TIDMBILB
RNS Number : 7689U
Bilby PLC
16 July 2018
16 July 2018
Bilby Plc
("Bilby", the "Group" or the "Company")
Unaudited Preliminary Results
Record revenues and profits
Bilby Plc (AIM: BILB.L), the holding company for P&R
Installation Company Limited ("P&R"), Purdy Contracts Limited
("Purdy"), Spokemead Maintenance Limited ("Spokemead"), and DCB
(Kent) Limited ("DCB"), a leading gas heating and building services
provider, is pleased to announce its unaudited preliminary results
for the 12 months ended 31 March 2018.
Highlights
-- Revenue up 23.2% to GBP78.81m (2017: GBP63.98m)
-- Underlying EBITDA up 61.0% to GBP6.29m (2017: GBP3.91m)
-- Underlying operating profit up 68.7% to GBP5.98m (2017: GBP3.55m)
-- Gross margin of 22.4% (2017: 17.2%)
-- Profit after taxation of GBP3.45m (2017: GBP0.18m loss)
-- Basic EPS of 8.61p (2017: 0.46p loss)
-- Proposed final dividend per share of 2p (2017: 1.5p) following interim dividend of 0.5p
-- Record revenues and profits achieved following strong
trading, with a number of significant new long-term customer wins
enabling excellent visibility of future earnings in excess of
GBP275m
-- The Group is now one of the largest contractors in London and
the South East providing general building, gas maintenance and
electrical services to over 300,000 domestic and commercial
properties
Sangita Shah, Non-Executive Chairman of Bilby Plc, said:
"Bilby has delivered a year of excellent progress achieving
record revenues, profitability and shareholder returns. The growth
was driven by both new customer wins and through existing customers
widening the remit and scope of work undertaken by Bilby companies.
This performance is testament to our reputation for delivering best
in class customer service and operational excellence.
We have a clear growth strategy with a dedicated and focused
management team to build on the progress we have made in the last
financial year and to that end, we look to the future with
confidence."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
Enquiries
Bilby Plc 020 3968 4490
Sangita Shah, Non-Executive
Chairman
Phil Copolo, Deputy Executive
Chairman
David Ellingham, Finance Director
Northland Capital Partners 020 3861 6625
(Nominated Adviser and Broker)
Corporate Finance:
David Hignell / Matthew Johnson
Sales and Broking:
Rob Rees
Hudson Sandler 020 7796 4133
Charlie Jack
Bertie Berger
CHAIRMAN'S REVIEW
I am delighted to report that the Group has achieved an
excellent performance for the year ended 31 March 2018 with record
revenues, profits and shareholder returns. This was delivered by
maintaining our tight focus on operational excellence and
first-class customer service. The period was characterised by
companies within the Group winning many new large scale
contracts.
Our commitment to best in class service enables us to maintain a
culture of long-term partnerships with our customers. Reflecting
this, we take great pride in the fact that year-on-year we have
consistently grown the number of properties we provide services
for.
In recognition of the Company's excellent progress and
confidence in the future, the Board has recommended a final
dividend of 2p per ordinary share that, together with the interim
dividend of 0.5p, represents a total of 2.5p per share up 42.8%
from 2017. The Group's shares will be marked ex-dividend on 26 July
2018 and the final dividend will be paid, subject to shareholder
approval, to those shareholders on the register at close of
business on 27 July 2018 in September 2018. The Group's dividend
policy will continue to be actively reviewed by the Board to ensure
shareholders receive an appropriate return whilst ensuring the
Group retains sufficient resource to invest for growth and
expansion.
Market
Bilby operates in a market with heightened awareness and focus
on compliance and safety. This has led to many housing associations
and councils prioritising widescale reviews of their properties.
This increased awareness, coupled with the continued growing demand
for high-quality affordable homes in London and the South East,
ensures that gas heating, electrical and general building services
remain in high demand. In this growing market Bilby's long-term
track record of delivery and reputation for the highest levels of
customer satisfaction ensure it is ideally placed to meet this
demand and grow and deliver value for all stakeholders.
Strategy
Bilby's strategy is to grow organically and when market
conditions allow, complement this with our targeted buy and build
strategy. In addition to the excellent organic growth achieved
during the period through the winning of new large-scale contracts.
Bilby has also had success in cross-selling services from within
the Group and expanding the scope of work with existing customers.
This operational momentum significantly increases the Group's
visibility of future revenues which currently stands at GBP275
million.
The Group listed on the AIM market in 2015 with one subsidiary
and today there are four companies within the Bilby Group. We
continue to benefit from the scale and the collective organisation
which has enabled them to tender for larger scale contracts. These
efficiencies of scale within our core London and South-East market
deliver both excellent customer service levels and high margin
returns.
Growth through acquisition still remains a key focus and we
continue to review a number of opportunities that could meet our
strict acquisition criteria. These criteria target first class
management teams providing complementary services in our target
markets to ensure further high margin and sustainable growth.
Our People
On behalf of the Board I would like to thank our employees for
their continued hard work, diligence and focus on providing our
customers with a first-class service. They ultimately create and
maintain the high reputation the business is proud of. The Group
will continue to invest in the development and training of all our
employees and we are fully committed to being a best in class
employer.
Outlook
We are extremely well placed to exploit many of the
opportunities that the market presents and build on the success of
an excellent period. We have a clear, proven growth strategy of
developing our presence in our core market in London and the South
East. The companies within the Bilby Group will continue to benefit
from the opportunities and synergies that come with increased
scale, a reputation for a first-class offering and a tight
geographic focus. We are excited by what the future holds and we
look to it with confidence.
Sangita Shah, Non-Executive Chairman
STRATEGIC REPORT
Operational review
In the year ended 31 March 2018 Group revenue increased by 23.2%
to GBP78.81m (2017: GBP63.98m) with adjusted EBITDA up 61.0% to
GBP6.29m (2017: GBP3.91m). Underlying operating profit was up 68.7%
to GBP5.98m (2017: GBP3.55m). Net debt at the year-end was GBP5.41m
(2017: GBP3.95m). The Group was able to deliver a record
performance for the year as a result of both winning new
large-scale contracts with blue chip organisations as well as
expanding the remit and scope of services provided for many
existing customers.
The Group has continued to make significant investments during
the period. These have primarily been made into operational systems
that maximise the synergies and efficiencies within the Group. The
Group has been able to fund this investment and the ongoing
expansion of Bilby from existing working capital facilities and the
re-investment of profits.
Our market
Over the last three years since IPO, the Group has expanded its
offering to include gas heating, electricity and general building
maintenance services. Bilby's primary customer base remains local
authority and social housing organisations and it continues to
operate within the geographic focus of London and the South East.
This market offers a dense customer base, allowing operational
efficiencies that in turn deliver industry leading margins. The
Group has a long-standing reputation amongst its customers for
providing first-class customer service that is underpinned by its
disciplined focus on operational excellence.
During the period there has been a heightened awareness and a
greater focus on building safety, and regulatory compliance.
Accordingly, many customers have initiated large-scale reviews and
upgrade programmes for their properties. As a result of this, many
customers of the Group have broadened the remit and scope of work
for Bilby to address.
Government initiatives, such as the Decent Homes Standard and
the Right to Repair scheme, continue to ensure that investment
levels and maintenance spend is maintained. Alongside this, the
Autumn Budget 2017 highlighted the need to build a further 300,000
homes every year to meet the demand for social housing.
Our Companies
Today, the Bilby Group comprises four trading companies. These
are P&R, the award-winning provider of gas heating and building
maintenance service; Purdy, an award-winning Contractor in
Electrical, Mechanical and Property Services; DCB, provider of high
quality building, refurbishment and maintenance services; and,
Spokemead, a specialist in in electrical installation, repairs and
maintenance services. They offer complementary services and are
able to maximise customer synergies and cross selling
opportunities. As part of the Bilby Group, they also benefit from
the centralised larger scale purchasing function. Bilby continues
to leverage the collective scale of the business to win larger
scale contracts where customers require a wide range of
services.
Customer Progress
During the year, Bilby gained a significant number of new and
large-scale contracts from both its existing customer base and new
customers. This is testament to the excellent work, customer care
and dedication our employees have for our customers which drives
the high reputation the Bilby companies enjoy. The Board is
particularly pleased that the number of projects where several
Bilby companies are working together has increased. It is also
pleasing to report an increase in the range of services offered by
Bilby Group.
In the year, Purdy secured key large-scale new contracts with
the London Borough of Barnet and Aldwych Housing. These contracts
will last for five and three years respectively and this gives the
Group an even greater presence in London operating in 15 out of the
33 Boroughs of London.
Purdy was successfully appointed to the Eastern Procurement
Framework which consists of 24 housing associations and councils as
well as being appointed to the University of Essex Electrical
Framework. Purdy extended the scope of work with its existing
customer Hackney Council by delivering a significant level of asset
management work. The Company worked with Peabody Housing on a new
separate contract to install fire alarms and emergency lighting to
council blocks.
P&R had a positive year with new long term contracts signed
increasing the earnings visibility. Most notably, it secured a
major contract with Metropolitan Housing, to upgrade their existing
commercial plant and install high efficient heat to flats.
Furthermore, it won a new five-year contract with Islington Council
to provide plumbing and drainage works to properties across the
borough. During the period P&R undertook new work for Fulham
and Hammersmith Council as well as successfully completing
substantial work for two crematoriums for Wandsworth Council.
P&R also signed a three-year contract extension with Hyde
Housing across Kent and London to provide gas heating and
maintenance services. It also started work on its eight-year
contract for East Kent Housing which is the largest gas services
contract in Kent and covers servicing support for over 16,700
properties. The Board are pleased to report that P&R has no
major contract renewals or re-tenders for three years driving
earnings visibility in the future. In order to focus on it higher
margin gas services offer, recently P&R gave notice of
termination of its contract to supply building maintenance services
for Ministry of Defence properties.
In the period, DCB was awarded a three-year Aid and Adaptions
contract with Optivo and agreed a contract with Golding Homes to
refurbish 14 units as part of the Affordable Homes scheme in
Maidstone. Furthermore, DCB completed Phase 1 of Ashford Borough
Council Affordable Homes early and as a result was nominated for
LABC Excellence Award. Alongside this, DCB successfully delivered
all of the kitchen and bathroom projects for the University of Kent
student accommodation.
Frameworks remain a key customer referral source for the Group.
P&R's position within the South East Consortium framework
enabled it to secure a five year contract providing maintenance and
electricity support for Kings College Hospital. Purdy's place
within the South-East Consortium enabled it to secure contracts
with Local Space, B3Living, IDS, YMCA and Notting Hill Housing
Group. Furthermore, Purdy was appointed to the Easter Procurement
Framework that consists of 24 housing associations and councils as
well as being appointed to the University of Essex Electrical
Framework.
Operational Excellence
Bilby's highly regarded service offering for its blue-chip,
large-scale customer base is underpinned by operational excellence
and customer satisfaction. We continue to receive high advocacy
levels with customer compliance levels currently running at nearly
100% and customer satisfaction at above 95%.
During the period Bilby made substantial investment in its
operational software. This has delivered further efficiencies both
within the Group's finance function as well as improving Bilby's
engineer time-management software which is now delivering record
levels of engineer productivity.
Bilby prides itself on its highly skilled, committed and
collaborative workforce. The Group has worked to ensure that staff
retention and development levels remain high. A critical component
of this is the success of our apprenticeship scheme that now
employs a record number of 34 apprentices throughout the Group.
Outlook
Bilby has made considerable progress during the year. Growth
from existing customers and new large-scale customer wins have
given the Group excellent future visibility of revenues and an
excellent platform to capitalise on. We build our long-term
customer partnerships by delivering a first-class service that
remains critical to our approach. Our strict cost disciplines and
geographic focus continues to ensure that we can deliver industry
leading margins. Our core markets in London and the South East
remain buoyant and present significant opportunities for all the
companies in the Bilby Group. We look forward with confidence.
Phil Copolo, Deputy Executive Chairman
Financial Review
Revenue
We are delighted to report record revenues of GBP78.81 million
for the year to 31 March 2018 (GBP63.98 million for the year to 31
March 2017).
Underlying Operating Profit
We are also pleased to report underlying operating profits of
GBP5.98 million (2017: GBP3.55 million). These are adjusted for the
share based payment charge, restructuring costs, amortisation of
customer relationships, acquisition costs, change in estimated
accrued income and the change in value of contingent
consideration.
Our direct costs are being closely monitored on all our
contracts and as a result our gross margins have improved to 22.4%
(2017: 17.2%). The Group has benefited from the increased
purchasing power the acquisitions and internal growth has afforded
without compromising the service levels. We now have the
opportunity for each company within the Group to enjoy a flexible
workforce either through our direct labour or utilisation of
sub-contractors. This flexibility and greater purchasing power has
enabled the Group to gain critical mass.
Overhead costs
Our central overhead costs have remained constant and are
considerably lower than comparable AIM listed companies. We remain
cost conscious, with each subsidiary requiring group approval to
increase their overhead expenditure.
Our Financial Position
We continue to strengthen our financial position with Group
Total Assets of GBP39.4million at 31 March 2018 (2017: GBP36.9
million). The Group Net Assets as at 31 March 2018 were
GBP16.6million (2017: GBP13.4million). Net debt (bank loans plus
lease purchase liabilities less cash) at 31 March 2018 amount to
GBP5.41 million (2017: GBP3.95 million) with the majority of this
balance being attributable to the 5-year term loan signed for the
purpose of the acquisitions of Purdy, DCB and Spokemead.
The Group has a working capital facility of GBP3.75 million as
at 31 March 2018. At this date it had utilised GBP954,000 of the
overdraft facility.
The Group has complied with all the financial covenants set by
our bankers HSBC Bank Plc, during the financial year.
We are fortunate to enjoy long term client relationships with a
number of local government organisations and other housing
associations. This has resulted in an improvement in cash
collections. We continue to monitor cash collection on both a
long-term and daily basis. In addition, management have focused on
improving financial and operating systems and the rollout of
Bilby's enhanced financial software has enabled us to become more
efficient. We have also managed to negotiate better terms with our
suppliers which has enable us in some cases to take advantage of
early settlement discounts.
We focus on a range of key indicators to assess our performance.
Our performance indicators are both financial and non-financial and
ensure that the Group targets its resources around its customers,
operations and finance. Collectively they form an integral part of
the way that we manage the business to deliver our strategic
goals.
The two key business drivers which are monitored on a regular
basis are as follows:
-- Customer compliancy - currently running near 100% across our largest contracts
-- Customer satisfaction - currently running at 95%+ across our largest contracts
Group Highlights Audited
12 months to
Unaudited 31 March
12 months to 31 March 2018 2017
GBPmillion GBPmillion
Revenue 78.81 63.98
Gross profit 17.69 11.02
Gross margin 22.4% 17.2%
Underlying EBITDA 6.29 3.91
Underlying operating profit 5.98 3.55
Underlying profit before taxation (2) 5.79 3.32
Basic EPS 8.61p (0.46)p
EPS basic (adjusted) (1) 12.3p 7.7p
Dividend per share 2.5p 2.25p
Cash 0.07 1.90
Total assets 39.46 36.91
Net working capital (3) 12.11 7.02
Net assets 16.62 13.41
Notes
1. Adjusted for amortisation of customer relationships, share
based payment charges, acquisition costs, framework development
costs, change in estimate of accrued income, restructuring costs
and change in value of contingent consideration.
2. Underlying profit before taxation is stated after interest
and before charging the share based payment charges, acquisition
costs, framework development costs, amortisation of customer
relationships, change in value of contingent consideration, change
in estimate of accrued income and restructuring costs.
3. Calculated as cash, inventories, trade and other receivables
less trade and other payables.
Dividends
The Board has recommended a final dividend of 2p per ordinary
share which is subject to shareholder approval at the Annual
General Meeting. Bilby's shares will be marked ex-dividend on 26
July 2018 and the final dividend will be paid in September 2018 to
those shareholders on the register at the close of business on 27
July 2018. Together with the interim dividend of 0.5p, this
represents a total dividend of 2.5p per ordinary share for the
year.
Conclusion
The Group continues to make progress and is driven by a
determined focus to increase shareholder value. Management intend
to achieve this by continuing to implement the following:-
-- Increasing revenues, maintaining margins and growing earnings
in a sustainable and profitable manner.
-- Increasing our client base.
-- Efficient and targeted investment of cash.
-- Making full utilisation of our increased purchasing power.
-- Where and when appropriate implementing an earnings enhancing buy and build strategy.
-- Applying a dividend policy which closely tracks earnings growth.
-- Undertaking continual risk reviews during the year.
We look forward to providing our shareholders with updates
regarding our key financial objectives during the course of the
next financial year. We believe the Group is well placed to
continue its growth objections in the expanding social housing
sector in London and the South East.
David Ellingham, Finance Director
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31 MARCH 2018
Audited 12 months
Unaudited 12 months ended 31
ended 31 March 2018 March 2017
Non-underlying Non-
items underlying
(note items
Notes Underlying 6) Underlying (note
items Total items 6) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
REVENUE 4 78,807 - 78,807 63,981 - 63,981
Cost of sales (61,115) - (61,115) (52,966) - (52,966)
-------------- -------------- -------------- -------------- -------------- --------------
GROSS PROFIT 17,692 - 17,692 11,015 - 11,015
Administrative
expenses (11,710) (1,498) (13,208) (7,470) (3,254) (10,724)
-------------- -------------- -------------- -------------- -------------- --------------
OPERATING
PROFIT 5 5,982 (1,498) 4,484 3,545 (3,254) 291
Finance costs (192) - (192) (227) - (227)
-------------- -------------- -------------- -------------- -------------- --------------
Net finance
costs (192) - (192) (227) - (227)
-------------- -------------- -------------- -------------- -------------- --------------
PROFIT BEFORE
TAX 5,790 (1,498) 4,292 3,318 (3,254) 64
Income tax
expense (844) (244)
-------------- --------------
PROFIT / (LOSS) FOR THE YEAR attributable
to the equity holders of the parent
company 3,448 (180)
-------------- --------------
Total comprehensive income for
the year attributable to the equity
holders of the parent company 3,448 (180)
Basic earnings
/ (loss)
per share
(pence) 7 8.61p (0.46)p
Diluted
earnings /
(loss)
per share
(pence) 7 8.51p (0.46)p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31
MARCH 2018
Share
Issued based
share Share payment Merger Retained Total
capital premium reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
April 2016 3,425 3,659 163 (1,624) 2,382 8,005
Audited
Loss and total
comprehensive
income for the
year - - - - (180) (180)
Issue of share
capital 548 4,575 - 1,376 - 6,499
Issue costs - (158) - - - (158)
Share-based
payment charge - - 342 - - 342
Tax credit
relating to
share option
scheme - - - - (204) (204)
Dividends paid - - - - (894) (894)
---------------- ---------------- ---------------------------- ---------------- ----------------- ----------------
Total
transactions
with
owners
recognised
directly
in equity 548 4,417 342 1,376 (1,098) 5,585
---------------- ---------------- ---------------------------- ---------------- ----------------- ----------------
Balance at 31
March 2017 3,973 8,076 505 (248) 1,104 13,410
Unaudited
Profit and
total
comprehensive
income for the
year - - - - 3,448 3,448
Issue of share
capital 55 316 - - - 371
Share-based
payment charge - - 194 - - 194
Dividends paid - - - - (800) (800)
---------------- ---------------- ---------------------------- ---------------- ----------------- ----------------
Total
transactions
with
owners
recognised
directly
in equity 55 316 194 - (800) (235)
Balance at 31
March 2018 4,028 8,392 699 (248) 3,752 16,623
================ ================ ============================ ================ ================= ================
CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE FINANCIAL
YEARED 31 MARCH 2018
Unaudited Audited
Notes 2018 2017
GBP'000 GBP'000
ASSETS
NON CURRENT ASSETS
Intangible assets 8 14,036 15,843
Property, plant and equipment 1,638 1,821
-------------- --------------
15,674 17,664
CURRENT ASSETS
Inventories 3,153 1,993
Trade and other receivables 20,561 15,358
Cash and cash equivalents 72 1,895
-------------- --------------
TOTAL CURRENT ASSETS 23,786 19,246
-------------- --------------
TOTAL ASSETS 39,460 36,910
EQUITY AND LIABILITIES ATTRIBUTABLE TO EQUITY
HOLDERS
OF THE PARENT COMPANY
ISSUED CAPITAL AND RESERVES
Share capital 11 4,028 3,973
Share premium 11 8,392 8,076
Share-based payment reserve 699 505
Merger reserve 11 (248) (248)
Retained earnings 3,752 1,104
-------------- --------------
16,623 13,410
NON CURRENT LIABILITIES
Borrowings 9 2,949 4,363
Obligations under finance leases 11 78
Deferred consideration - 1,000
Deferred tax liabilities 1,883 2,184
-------------- ------------
4,843 7,625
CURRENT LIABILITIES
Borrowings 9 2,452 1,276
Obligations under finance leases 70 131
Current income tax liabilities 2,800 225
Deferred consideration 1,000 2,013
Trade and other payables 11,672 12,230
-------------- --------------
TOTAL CURRENT LIABILITIES 17,994 15,875
-------------- --------------
TOTAL EQUITY AND LIABILITIES 39,460 36,910
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEARED 31
MARCH 2018
Unaudited Audited
12 months 12 months
ended 31 ended 31
March 2018 March 2017
Notes GBP'000 GBP'000
Net cash generated from operating
activities 10 802 3,357
-------------- --------------
Cash flow from investing activities
Acquisition of subsidiaries including
deferred consideration (1,154) (8,700)
Net cash acquired on acquisition - 2,066
Purchases of property, plant and equipment (89) (120)
Purchase of intangible assets (24) (57)
Proceeds on disposal of property, plant
and equipment - 69
-------------- --------------
Net cash used in investing activities (1,267) (6,742)
Cash flow from financing activities
Proceeds from borrowings 250 2,500
Repayment of borrowings (1,442) (1,182)
Interest paid (192) (219)
Capital element of finance lease payments (128) (211)
Issue of ordinary share capital - 5,000
Issue costs - (158)
Dividend paid (800) (894)
-------------- --------------
Net cash (used in) / generated from
financing
activities (2,312) 4,836
Net (decrease) / increase in cash and
cash equivalents (2,777) 1,451
-------------- --------------
Cash and cash equivalents at beginning
of year 1,895 444
-------------- --------------
Cash and cash equivalents at end of year (882) 1,895
Note
The cash and cash equivalents at the year-end represent the net
of overdrafts of GBP954,000 (note 9) together with the cash and
cash equivalents shown on the balance sheet of GBP72,000.
NOTES TO THE PRELIMINARY ANNOUNCEMENT FOR THE FINANCIAL YEARED
31 MARCH 2018
1. BASIS OF PREPARATION
Bilby Plc and its subsidiaries (together 'the Group') operate in
the gas heating, electrical and general building services
industries. The Company is a public company operating on the AIM
Market of the London Stock Exchange and is incorporated and
domiciled in England and Wales (registered number 09095860). The
address of its registered office is 6-8 Powerscroft Road, Sidcup,
DA14 5DT. The Company was incorporated on 20 June 2014.
The Group's preliminary results have been prepared on a going
concern basis under the historical cost convention, and in
accordance with International Financial Reporting Standards
("IFRSs") as adopted by the European Union, the International
Financial Reporting Interpretations Committee ("IFRIC")
interpretations issued by the International Accounting Standards
Boards ("IASB") that are effective or issued and early adopted as
at the time of preparing these financial statements and in
accordance with the provisions of the Companies Act 2006.
The Group has adopted all of the new and revised standards and
interpretations issued by the IASB and the International Financial
Reporting Interpretations Committee ("IFRIC") of the IASB, as they
have been adopted by the European Union, that are relevant to its
operations and effective for accounting periods beginning on 1
April 2017.
The preparation of financial statements requires management to
exercise its judgement in the process of applying 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 disclosed
in note 3.
The functional and presentational currency of the Group is
Pounds Sterling (GBP).
The principal accounting policies adopted by the Group are set
out in note 2.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1. Going Concern
As part of their going concern review the Directors have
followed the guidelines published by the Financial Reporting
Council entitled "Guidance on the Going Concern Basis of Accounting
and Reporting on Solvency and Liquidity Risk", issued April
2016.
The Directors have prepared detailed financial forecasts and
cash flows looking beyond 12 months from the date of these
consolidated financial statements. In developing these forecasts
the Directors have made assumptions based upon their view of the
current and future economic conditions that will prevail over the
forecast period.
On the basis of the above projections, the Directors are
confident that the Group has sufficient working capital to honour
all of its obligations to creditors as and when they fall due.
Accordingly, the Directors continue to adopt the going concern
basis in preparing these consolidated financial statements.
2.2. Basis of Consolidation
The consolidated financial statements consolidate those of the
Company and its subsidiary undertakings drawn up to 31 March each
year. Subsidiaries are entities over which the Company has the
power to control the financial and operating policies so as to
obtain benefits from their activities. The Group generally obtains
and exercises control through voting rights.
The consolidated financial statements incorporate the financial
information of Bilby Plc and its subsidiaries. Subsidiary companies
are consolidated from the date that control is gained.
On 6 March 2015 the Company acquired the shares of P&R in
exchange for its own shares. The Company issued 25,000,000 10p
shares in exchange for the entire share capital of P&R. The
acquisition did not meet the definition of a business combination
as the Company was not a business and therefore falls outside the
scope of IFRS 3. As IFRS does not provide specific guidance in
relation to group reorganisations it defers to the next appropriate
GAAP being UK GAAP. The acquisition of P&R by the Company has
therefore been accounted for in accordance with the principles of
merger accounting as applied to group reorganisations as set out in
Section 19 of FRS102. Accordingly, the consolidated financial
statements for the Group have been presented as if the Company
throughout the current and preceding periods has owned P&R. The
comparative figures for the previous year include the results of
the merged entity, the assets and liabilities at the previous
balance sheet date and the shares issued by the Company as
consideration as if they had always been in issue. The difference
between the share capital of P&R and the nominal value of
shares issued by the Company to acquire P&R is recorded as a
merger reserve.
On 13 July 2015, the Company acquired the entire issued share
capital of Purdy for a consideration of GBP8.07 million. The
acquisition meets the definition of a business combination and has
been accounted for using the acquisition method in accordance with
the Group's accounting policy.
On 12 April 2016, the Company acquired the entire issued share
capital of DCB for a consideration of GBP4 million. The acquisition
meets the definition of a business combination and has been
accounted for using the acquisition method in accordance with the
Group's accounting policy.
On 12 April 2016, the Company acquired the entire issued share
capital of Spokemead for an estimated consideration of GBP8.7
million. The acquisition meets the definition of a business
combination and has been accounted for using the acquisition method
in accordance with the Group's accounting policy.
All intra-group transactions, balances, income and expense are
eliminated on consolidation.
2.3 Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable for the provision of the Group's services.
Revenue is recognised by the Group, net of value added tax, based
upon the following:
Gas Maintenance - Gas maintenance revenue is recognised when the
services have been rendered, that is when the individual job has
been completed.
Building Services - Building Services contracts range between
2-24 months. During the course of a project an independent surveyor
will conduct a monthly review of the work done and agree an
incremental payment. The Group thus recognises the revenue of a
project gradually and on a monthly basis upon the accreditation of
the surveyor. Revenue recognisable in relation to work completed
and accredited is recognised as accrued income until invoiced.
Electrical services - Electrical services revenue is recognised
when the services have been rendered, that is when the individual
job has been completed.
Trade Counter - Revenue is recognised upon the point of sale of
items sold over the trade counter.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these consolidated financial statements in
conformity with IFRS as adopted by the European Union requires the
Directors to make certain critical accounting estimates and
judgements. In the process of applying the Group's accounting
policies, management has decided the following estimates and
assumptions have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
recognised in the consolidated financial statements.
Recoverability of trade receivable balances
In the periods shown in these consolidated financial statements,
there are a small number of customers with a significant trade
receivable balance at the period end. Management have not made a
provision against any of these receivable balances at any date.
Although this is an area of judgement, management are comfortable
with this position due to the high credit ratings of the customers
involved and the lack of any history of non-payment.
Valuation of accrued income
Revenue recognisable in relation to work completed and
accredited is recognised as accrued income until invoiced based on
actual purchase order value, plus any variations or based on the
estimated cost of the job using recent past performance as a basis
for the price of the work. Some judgement is therefore required in
assessing the estimated cost but management are comfortable with
their basis of estimation which has been supported by post year end
invoice values.
Share based payment charge
The Group issued share options to Directors and employees of the
Group in the year. The Black Scholes model is used to calculate the
appropriate charge for these options. The use of this model to
calculate a charge involves using a number of estimates and
judgements to establish the appropriate inputs to be entered into
the model, covering areas such as the use of an appropriate
interest rate and dividend rate, exercise restrictions and
behavioural considerations. A significant element of judgement is
therefore involved in the calculation of the charge.
Valuation of customer relationships
Determining the valuation of customer relationships does require
use of estimates and judgements in terms of determining the
relevant cash flows and the discount factor to be applied in the
valuation to calculate the present value. Future cash flows are
estimated based on actual contract values and durations for
contractual relationships. Average monthly run rates and estimated
durations using length of current relationship, then moderated
using an attrition rate, are applied to non-contractual
relationships. Cash outflows are forecast using direct costs and
overheads based on past performance. Change in contract values and
duration, together with margins achieved and overheads applied
could result in variations to the carrying value of customer
relationships. In addition, an adverse movement in the discount
factor due to an increased risk profile or a change in the cost of
debt (increase in interest rates) would also result in a variation
to the carrying value of the customer relationships.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimate of
the value in use of the Cash Generating Units (CGUs) to which
goodwill has been allocated. The value in use calculation involves
an estimate of the future cash flows of the CGUs and also the
selection of appropriate discount rates to calculate present
values. Future cash flows are estimated based on contract values
and duration, together with margin based on past performance.
Change in contract values and duration, together with margins
achieved could result in variations to the carrying value of
goodwill. In addition, an adverse movement in the discount factor
due to an increased risk profile or a change in the cost of debt
(increase in interest rates) would also result in a variation to
the carrying value of goodwill.
4. REVENUE
Revenue is analysed as follows:
Unaudited Audited
12 months 12 months
ended 31 ended 31
March March
2018 2017
GBP'000 GBP'000
Gas Maintenance 14,574 11,563
Building Services 48,289 38,072
Electrical Services 15,944 14,183
Other - 163
-------------- --------------
78,807 63,981
-------------- --------------
All results in the current and prior year derive from continuing
operations and all revenues are derived in the UK.
5. OPERATING PROFIT AND EBITDA
Operating Profit
Operating profit is stated after charging all costs including
non-underlying items.
Unaudited Audited
12 months 12 months
ended 31 ended 31
March March
2018 2017
GBP'000 GBP'000
Inventory recognised as an expense in
cost of sales 34,955 12,625
Staff costs 10,202 13,589
Depreciation 256 310
Amortisation of software 39 32
Loss on disposal of property, plant
and equipment 17 21
Auditor's remuneration 98 95
Non-audit remuneration 21 44
Operating lease rentals 1,257 547
-------------- --------------
The depreciation and amortisation charges as stated in the table
above are included within administrative expenses in the
Consolidated Statement of Comprehensive Income.
Earnings Before Interest Taxation, Depreciation and Amortisation
("EBITDA")
EBITDA is calculated as follows:
Unaudited Audited
12 months 12 months
ended 31 ended 31
March March
2018 2017
GBP'000 GBP'000
Underlying profit before taxation 5,790 3,318
Finance costs 192 227
Depreciation 256 310
Amortisation 39 32
Loss on disposal of property, plant
and equipment 17 21
-------------- --------------
Underlying EBITDA 6,294 3,908
-------------- --------------
6. NON-UNDERLYING ITEMS
Operating profit includes the following items which are
considered by the Board to be one off in nature, non-cash expenses
or necessary elements of expenditure to derive future benefits for
the Group which have not been capitalised in the Consolidated
Statement of Financial Position.
Unaudited Audited
12 months 12 months
ended 31 March ended 31 March
2018 2017
GBP'000 GBP'000
Change in fair value of future contingent
consideration - 102
Restructuring costs - 358
Amortisation of customer relationships 1,792 1,792
Share based payment charge 194 341
Acquisition costs - 395
Change in estimate of accrued income - 266
Fair value adjustment (488) -
-------------- --------------
1,498 3,254
-------------- --------------
Amortisation of customer relationships was GBP1.79 million for
the year (2017: GBP1.79 million).
A group share option scheme is in place and options were granted
during the year. The share based payment charge has been separately
identified as it is a non-cash expense.
Acquisition costs comprise legal, professional and other
expenditure in relation to acquisition activity during 2017
amounted to GBP395,000. There were no acquisition costs in
2018.
The fair value adjustment relates to a reduction in the
consideration payable on the acquisition of Spokemead.
7. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share is based
on the result attributable to shareholders divided by the weighted
average number of ordinary shares in issue during the year.
Basic earnings per share amounts are calculated by dividing net
profit / (loss) for the year or period attributable to ordinary
equity holders of the parent by the weighted average number of
ordinary shares outstanding during the year.
The Group has potentially issuable shares all of which relates
to potential dilution from the Group's share options issued to
Directors and employees in the period.
Basic and diluted profit per share from continuing operations is
calculated as follows:
Unaudited Audited
12 months 12 months
ended 31 ended 31
March March
2018 2017
GBP'000 GBP'000
Profit / (loss) used in calculating basic
and diluted earnings per share 3,448 (180)
-------------- --------------
Number of shares
Weighted average number of shares for the
purpose of basic earnings per share 40,049,590 39,433,083
-------------- --------------
Weighted average number of shares for the
purpose of diluted earnings per share 40,491,051 39,433,083
-------------- --------------
Basic earnings/(loss) per share (pence) 8.61 (0.46)
-------------- --------------
Diluted earnings/(loss) per share (pence) 8.51 (0.46)
-------------- --------------
Adjusted EPS
Profit after tax is stated after deducting non-underlying items
totalling GBP1.50 million (2017: GBP3.2 million). Non-underlying
items are either one-off in nature, non-cash expenses or necessary
elements of expenditure to derive future benefits for the Group
which have not been capitalised in the Consolidated Statement of
Financial Position. These are shown separately on the face of the
Consolidated Statement of Comprehensive Income.
The calculation of adjusted basic and adjusted diluted earnings
per share is based on the result attributable to shareholders,
adjusted for exceptional items, divided by the weighted average
number of ordinary shares in issue during the year.
Unaudited Audited
12 months 12 months
ended 31 ended 31
March March
2018 2017
GBP'000 GBP'000
Profit / (loss) after tax 3,448 (180)
Add back
Change in fair value of contingent consideration - 102
Restructuring costs - 358
Amortisation of customer relationships 1,792 1,792
Share based payment charge 194 341
Acquisition costs - 395
Change in estimate of accrued income - 266
Impact of above adjustments on Corporation
Tax - (53)
Fair value adjustment (488) -
-------------- --------------
Adjusted profit after tax 4,946 3,021
------------ --------------
Number of shares
Weighted average number of shares for the
purpose of adjusted earnings per share 40,049,590 39,433,083
-------------- --------------
Weighted average number of shares for the
purpose of diluted adjusted earnings per
share 40,491,051 40,055,023
-------------- --------------
Adjusted earnings per share (pence) 12.3 7.7
-------------- --------------
Diluted adjusted earnings per share (pence) 12.2 7.5
-------------- --------------
8. INTANGIBLE ASSETS
Software Customer
costs relationships Goodwill Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April
2017 169 13,832 4,256 18,257
Additions in
the year 24 - - 24
-------------- -------------- -------------- --------------
At 31 March
2018
(Unaudited) 193 13,832 4,256 18,281
Amortisation
At 1 April
2017 40 2,374 - 2,414
Charge for
the year 39 1,792 - 1,831
-------------- -------------- -------------- --------------
At 31 March
2018
(Unaudited) 79 4,166 - 4,245
Net book value
At 31 March 2017 129 11,458 4,256 15,843
At 31 March 2018 (Unaudited) 114 9,666 4,256 14,036
The DCB, Spokemead and Purdy customer relationships intangible
asset were originally included at cost of GBP2.4 million, GBP5.9
million and GBP5.6 million respectively.
These represent the expected value to be derived from
contractual and non-contractual customer relationships. The value
placed on the contractual customer relationship is based on the
expected cash revenue inflows over the estimated remaining life of
each existing contract.
Goodwill on consolidation of DCB, Spokemead and Purdy arise on
the excess of cost of acquisition over the fair value of the net
assets acquired on purchase of the companies.
DCB, Spokemead and Purdy are their own CGU's for the purposes of
the goodwill calculation and impairment reviews carried out by the
Board and monitored on an ongoing basis.
9. BORROWINGS
Unaudited Audited
2018 2017
GBP'000 GBP'000
Non-Current borrowings:
Bank borrowings:
Term loans 2,578 3,936
Mortgage loan 371 427
-------------- --------------
2,949 4,363
-------------- --------------
2,949 4,363
Current borrowings:
Convertible loan note - 513
Bank borrowings:
Term loans 1,441 1,219
Mortgage loan 57 57
Overdraft 954 -
-------------- --------------
2,452 1,276
-------------- --------------
2,452 1,789
Total borrowings
Convertible loan note - 513
Bank borrowings:
Term loans 4,019 5,154
Mortgage loan 428 485
Overdraft 954 -
-------------- --------------
5,401 5,639
-------------- --------------
5,401 6,152
Working Capital Facilities
On 28 November 2016, the Group extended its working capital
facility to GBP2.25 million to accommodate a transfer of DCB's
banking from invoice discounting to the Group's working capital
facility.
As at 31 March 2018, the Group had extended its working capital
facility to GBP3.75 million to fund the internal growth of the
Group.
Bank overdrafts are held at an interest rate of 2.5% above the
Bank of England base rate. All cash at bank balances are
denominated in GBP sterling. As at 31 March 2018, the Group had
unused overdraft facilities of GBP2.80 million (2017: GBP2.25
million).
Bank Loans and Overdrafts
The non-current proportion of bank loans amounted to GBP2.95
million as at 31 March 2018 (31 March 2017: GBP4.36 million), and
current proportion of amounted to GBP2.45 million as at 31 March
2018 (31 March 2017: GBP1.28 million). Bank loans are repayable by
quarterly instalments. Bank loans are held at an interest rates of
2.75% and 1.9% above the Bank of England base rate.
Security
Bank loans are secured on related property, plant and equipment
and debtor books of the Group.
In respect of bank debt there is an Unlimited Composite Company
Guarantee given by Bilby, Purdy, P&R, DCB and Spokemead to
secure all liabilities of each borrower.
Loan Note
On 13 July 2015 Bilby issued GBP500,000 of loan notes to J R
Horlock as part of the consideration for Purdy.
On 14 July 2017, the loan note and outstanding interest was
settled from existing cash reserves.
10. CASH FLOW FROM OPERATING ACTIVITES
Unaudited Audited
2018 2017
GBP'000 GBP'000
Profit before income tax 4,292 64
Adjustments for;
Net finance cost 192 227
Loss on disposal of property, plant and equipment 17 21
Depreciation 256 310
Amortisation of intangible assets 1,831 1,824
Share based payments 194 342
Unwinding of fair value discount - 102
Fair value adjustment (488) -
Movement in receivables (5,203) 586
Movement in payables 1,493 1,649
Movement in inventories (1,160) (1,115)
Tax paid (622) (653)
Net cash generated from operating activities 802 3,357
========= =========
11. SHARE CAPITAL
Ordinary shares of GBP0.10 each Unaudited Audited
2018 2017
GBP'000 GBP'000
At the beginning of the year 3,973 3,425
Issued in the year 55 548
-------------- --------------
At the end of the year 4,028 3,973
Number of shares Unaudited Audited
2018 2017
At the beginning of the year 39,729,731 34,247,845
Placing of shares on AIM in connection with the
acquisitions
of DCB and Spokemead - 4,237,288
Issue of initial consideration shares - DCB - 423,729
Issue of initial consideration shares - Spokemead - 423,729
Issue of further consideration shares - DCB - 397,140
Issue of further consideration shares - DCB 167,113 -
Issue of further consideration shares - Spokemead 393,183 -
-------------- --------------
At the end of the year 40,290,027 39,729,731
Share Premium Unaudited Audited
2018 2017
GBP'000 GBP'000
At the beginning of the year 8,076 3,659
Issued in the year 316 4,575
Issue costs - (158)
-------------- --------------
At the end of the year 8,392 8,076
On 12 April 2016, the Company acquired the entire issued share
capital of DCB and Spokemead. The initial consideration for DCB was
satisfied by a cash payment of GBP1.5million together with an issue
of 423,729 new Bilby ordinary shares at a price of 118 pence per
share.
The initial consideration for Spokemead was satisfied by a cash
payment of GBP5.7 million together with an issue of 423,729 new
Bilby ordinary shares at a price of 118 pence per share.
The DCB and Spokemead acquisitions were partly funded through
the placing of 4,237,288 new ordinary shares at a price of 118 per
share raising GBP5 million for the Group.
Further consideration for DCB was satisfied by a cash payment of
GBP500,000 together with an issue of 397,140 new Bilby ordinary
shares at a price of 126 pence per share.
Further consideration for Spokemead was satisfied by a cash
payment of GBP1 million paid in August 2016.
On 13 July 2017, further consideration for DCB was satisfied by
a cash payment of GBP375,000 form the Group's cash reserves and the
balance of GBP125,000 being settled via the issue of 167,113
ordinary shares at an issue price of 74.8p per ordinary share.
On 27 September 2017, further consideration of Spokemead was
satisfied by a cash payment of GBP250,000 from the Group's cash
reserves and the balance of GBP247,115 being settled via the issue
of 393,183 ordinary shares at an issue price of 62.85p per ordinary
share.
Merger Reserve
Unaudited Audited
2018 2017
GBP'000 GBP'000
At the beginning of the year (248) (1,624)
On acquisition of DCB - 919
On acquisition of Spokemead - 457
-------------- --------------
At the end of the year (248) (248)
The acquisitions of DCB and Spokemead were partly funded through
a placing of 4,237,288 new ordinary shares at a price of 118 pence
per share. The difference between the nominal value of the shares
issued and the placing price gives rise to a premium of GBP1.37
million which has been added to the merger reserve.
12. RELATED PARTY TRANSACTIONS
During the current and previous years, the Group operated from
headquarters at 6-8 Powerscroft Road, Sidcup, Kent. The freehold of
the property is owned by P Copolo, the major shareholder of the
Group as at 31 March 2018. A formal 20 year lease was entered into
on 6 March 2015 between P Copolo and the Group. Under the terms of
the lease, the initial rent is GBP50,000 per annum with the Group
being responsible for all ongoing costs.
Key management compensation
The Group's key management are considered to comprise the
directors and two non-executive directors of Bilby Plc. Their
remuneration is as follows:
Unaudited Audited
2018 2017
GBP'000 GBP'000
The aggregate remuneration comprised:
Aggregate emoluments 462 369
Consultancy fees 72 65
------------ ------------
534 434
Share based payments 21 30
------------ ------------
Total remuneration 555 464
The remuneration of the highest paid director during the year
was GBP213,755 (12 months to 31 March 2017: GBP116,607).
There were no other transactions with directors or key
management personnel to disclose.
13. ULTIMATE CONTROLLING PARTY
By virtue of his majority shareholding, as at 31 March 2018, P
Copolo is the ultimate controlling party of Bilby Plc.
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
FR GGUQUMUPRGPQ
(END) Dow Jones Newswires
July 16, 2018 08:26 ET (12:26 GMT)
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