TIDMNEXS
RNS Number : 2867B
Nexus Infrastructure PLC
09 January 2018
9 January 2018
Nexus Infrastructure plc ("Nexus" or the "Group")
Preliminary results for the year ended 30 September 2017
Landmark year, robust results, positioned for growth
Mike Morris, Chief Executive of Nexus, the leading provider of
essential infrastructure services to the UK housebuilding and
commercial sectors, comments:
"It has been a landmark year for Nexus with the successful
listing of the business on AIM in July, a robust performance and
continued growth in our order book which gives us good visibility
of future earnings. All of which pays tribute to the hard work and
commitment of our employees."
We have strong market positions along with well-defined
strategic objectives in place to continue to deliver growth and
future value for all stakeholders."
Highlights:
Resilient performance in FY2017 despite impact of EU
Referendum
-- Revenue of GBP135.0m, in line with expectations (2016:
GBP135.7m)
-- Operating profit of GBP9.3m, ahead of expectations (2016:
GBP10.4m)
-- Order Book, up 25% at year end to GBP202.7m
-- Sustained momentum with current order book of GBP213m as at
the end of December 2017
Strong cash generative business model
-- Cash and cash equivalents of GBP27.1m at year end
-- Proposed final dividend of 4.2 pence per share, taking the
full year dividend to 6.3 pence per share, ahead of expectations
and in line with progressive dividend policy
Established growth strategy within attractive and expanding
addressable markets
-- Organic growth driven by large multi-phase contracts,
geographic expansion, cross selling and combined delivery of
Tamdown and TriConnex services
-- Inorganic growth plans focused on disciplined approach to bolt-on acquisitions
Proven track record of delivering consistent growth, profits and
cash generation
Confident outlook for the year ahead
Enquiries:
Nexus Infrastructure Tel: 01376 320856
plc
Michael Morris, Chief
Executive Officer
Alan Martin, Chief
Financial Officer
Numis Securities Limited Tel: 0207 260 1200
(Nominated Adviser
& Broker)
Oliver Hardy (Nomad)
Heraclis Economides
Ben Stoop
Financial Public Relations Tel: 0203 757 4992
Camarco
Ginny Pulbrook
Tom Huddart
Notes to Editors:
Nexus is a leading provider of essential infrastructure services
to the UK housebuilding and commercial sectors. The Group comprises
two separately managed and operated businesses: Tamdown, a provider
of specialised infrastructure services; and TriConnex which
designs, installs and connects utility networks to properties on
new residential and commercial developments.
Tamdown has a well-established market position having been in
operation for over 40 years and currently counts amongst its
customers nine of the top ten largest UK housebuilders. TriConnex
was established in 2011 to take advantage of deregulation in the
utilities market with the goal of being recognised as the UK's
leading independent provider of utility connections to new
developments.
CHAIRMAN'S STATEMENT
I am pleased to report a robust set of results for the year
ended 30 September 2017. This is our maiden set of results as a
public company, following the Company's successful Initial Public
Offering ("IPO") on the London Stock Exchange's Alternative
Investment Market ("AIM") in July 2017. I would like to take this
opportunity of welcoming all our new shareholders.
Overview of the year
The Nexus business model, with Tamdown's well established market
position as a leading provider of essential infrastructure services
to the UK's largest housebuilders, coupled with TriConnex's growing
utilities connection services, was resilient during a challenging
year. As previously reported, the EU Referendum caused a slowdown
in tendering activity and delays to customers awarding new
contracts during the second half of 2016 with a corresponding delay
to work commencing on site. In spite of this market backdrop, the
Group is reporting revenue for the year of GBP135.0m (2016:
GBP135.7m), and an operating profit of GBP9.3m (2016: GBP10.4m). As
at 30 September 2017, the order book was at a record level of
GBP202.7m up 25% from GBP161.7m in 2016, providing good earnings
visibility for the year ahead.
Strategy
The Group's mission is to be recognised as the leading provider
of essential infrastructure services in the UK. The Group's
strategy is to deliver outstanding performance through a focus on
innovation and customer service which will lead to growth, building
on existing market positions by developing new markets and services
whilst extending geography, both organically and through
complementary earnings enhancing acquisitions.
The Group's organic growth strategy is focused on four key
drivers: increasing market share within current geographies,
expanding into new geographies, diversification into new growth
sectors and leveraging customer relationships to enhance cross
selling within the Group. In addition to organic growth, further
growth will come from the successful sourcing, execution and
integration of chosen acquisitions.
The Group is taking a disciplined approach to acquisitions,
seeking to enhance shareholder value with acquisitions that are
linked or closely associated with TriConnex, such as businesses
within existing residential utility or non-residential utilities
markets or new markets, such as continuing to develop our fibre and
Electric Vehicle charging services.
Returns to shareholders
As a listed company, one of our primary objectives is to deliver
increased shareholder value over time. The Board has adopted a
progressive dividend policy and has already paid an interim
dividend of 2.1 pence per share. For the year ended 30 September
2017, the Board is proposing a final dividend of 4.2 pence per
share, which, if approved at the AGM, will take the dividend for
the year to 6.3 pence per share. The total dividend for the year of
GBP2.4m is based on a dividend cover of 3.0 times the Group's
profit after tax, adjusted for exceptional items, which is in line
with our guidance on dividend cover stated at the time of the IPO.
The dividend will be paid on 9 March 2018 to shareholders on the
register at close of business on 9 February 2018. The shares will
go ex-dividend on 8 February 2018.
Looking forward, whilst continuing to invest in the growth plans
of the business, our adopted progressive dividend policy will
enable shareholders to benefit as the Group delivers on its
performance targets.
Board and Governance
The Board has been established now for over a year, with Richard
Kilner appointed as Non-Executive Director and myself, appointed as
Non-Executive Chairman, in January 2016. Alex Wiseman was appointed
as Non-Executive Director in June 2016. The Board consists of five
members in total including executive board directors Mike Morris
(CEO) and Alan Martin (CFO).
Since the Board was expanded in early 2016, roles and
responsibilities have been defined and the Board has spent time
setting out the vital discipline, processes and authorities of
governance. Changes have included the creation of Board
sub-committees in 2016 for Audit, Remuneration and Nominations, all
of which were in place throughout the year under review.
People
A primary driver to the Group's success is the team of highly
skilled, driven and loyal employees across the businesses. Nexus
places great importance on engaging with and developing its
employees and providing a platform for personnel growth and
successful career development. On behalf of the Board, I would like
to congratulate and thank them for their continued hard work and
dedication.
Outlook
We are in a strong position to deliver growth. The fundamental
market drivers for our business look positive in the short and
medium terms. The order book has grown significantly over the past
year and is now at a record level. Against this background, the
Board is optimistic on the outlook for the business and is
confident the Group will deliver on its growth strategy.
Geoff French
Chairman
8 January 2018
EXECUTIVE REVIEW
Group operating results
As anticipated and as highlighted earlier in the year, the
outcome for the Group's full year revenues of GBP135.0m (2016:
GBP135.7m) were relatively flat reflecting the impact of the EU
Referendum. Revenues for Tamdown were GBP105.6m (2016: GBP112.4m)
and were broadly offset by the 26.3% increase in TriConnex's
revenues to GBP29.5m (2016: GBP23.3m).
Gross profit for the year increased to GBP27.2m (2016:
GBP26.3m), with the overall gross margin improving by 78 basis
points to 20.2% (2016: 19.4%).
Administrative expenses for the Group increased by GBP2.0m to
GBP17.9m (2016: GBP15.9m). The 12.4% increase was primarily due to
investment for growth within TriConnex, where the planned office
headcount has increased by 27, along with salary increases.
Group operating profit, which has been recorded before the
deduction of exceptional costs, for the year was GBP9.3m (2016:
GBP10.4m). Group operating margin decreased to 6.9% (2016: 7.6%),
with the gross margin improvement offset by the significant
investment in administrative expenses to support future growth.
Exceptional items totalling GBP1.7m (2016: nil) were recorded in
the year to reflect the costs related to the IPO.
Profit for the year attributable to equity holders of the parent
company was GBP5.8m (2016: GBP8.4m).
Basic earnings per share were 15.4 pence, after the impact of
the exceptional item (2016: 22.3 pence). The underlying basic
earnings per share, adjusting for the exceptional item, were 19.1
pence (2016: 22.3 pence).
The Group's balance sheet remains strong, with net assets
growing by 27.2% to GBP17.0m (2016: GBP13.4m). The Group's net cash
remains high at GBP18.7m (2016: GBP23.6m) with cash and cash
equivalents at GBP27.1m (2016: GBP34.0m) and bank borrowings of
GBP8.4m (2016: GBP10.4m). The Group holds a high net cash position
in order to support growth and the Group's acquisition
strategy.
Tamdown
Financial & Operating performance
The revenue for Tamdown decreased by 6.1% to GBP105.6m, (2016:
GBP112.4m). This was anticipated earlier in the year and
highlighted at the time of the IPO, as the business saw the impact
of the June 2016 EU Referendum on the housebuilding market and
customers in general.
From the end of 2016 onwards, orders for new phases and new
sites returned to normal levels. This is reflected in the 24.9%
improvement in the order book from GBP86.7m at 30 September 2016 to
GBP108.3m at 30 September 2017.
The gross margin for the year at 16.4% (2016: 16.5%) maintained
the significant improvement in margin of recent years.
Our investment for growth with increased headcount, staff and
salary costs resulted in a 10.9% increase in administrative
expenses to GBP10.1m (2016: GBP9.1m). The operating profit for the
year at GBP7.2m (2016: GBP9.5m), achieved an operating margin of
6.8% (2016: 8.4%). The Board believes that this investment can
support Tamdown's growth over a number of years.
Our markets
The customers of Tamdown are UK housebuilders or affordable
housing developers, including housing associations and, as such,
the UK housebuilding market is key to the Company. The housing
market has been in a long-term position of structural undersupply
as the number of new houses built has failed to keep pace with the
rate of household formation. Current estimates from the DCLG are
for annual household formation in excess of 250,000 over the short
to medium term, which compares to the CPA estimates of UK housing
starts in 2016 of approximately 148,000 (178,000 including public
and private homes) and is projected to increase to 158,000 in 2019
(192,000 including public and private homes). As a result, there is
the expectation that the housing deficit will remain over the long
term. The prevalence of this deficit has attracted a significant
amount of government stimulus to the sector.
Tamdown operates within the more economically resilient areas of
the South East of England and London where the undersupply of
housing appears to be more acute compared to the rest of the UK.
Tamdown works with the majority of the quoted housebuilders, who
account for approximately 50% of total private new build volumes
(compared to approximately 32% in 2005) with this dominance
expected to continue as they work through their land bank and
develop larger schemes.
The housing White Paper released in February 2017 announced new
plans by the UK Government to tackle the undersupply of houses by
reducing the obstacles to housebuilding and help local authorities,
developers and small to medium sized housebuilders meet housing
needs. This included greater support for small housebuilders,
through the Home Building Fund, to build up to 225,000 homes in the
long term. This is alongside a commitment to build more affordable
homes, including Rent to Buy and shared ownership, with an extra
GBP1.4 billion for the Affordable Homes Programme, to build around
225,000 affordable homes.
The Government announced in the November 2017 Budget a further
package of investments, loans and guarantees, which when added to
previous initiatives totalled GBP44bn, to increase the annual
number of new homes from 217,000 in 2016/17 to 300,000 by 2025.
Outlook
Tamdown has an established market position, providing quality
services to 9 of the top 10 UK housebuilders. The backdrop of
Government stimulus to counter the housing supply deficit provides
us with confidence that our customers will continue to demand our
services.
Our strategic objectives are to grow the business organically,
expand into new geographic markets and develop diversification
opportunities into sectors such as affordable residential and build
to rent. These plans, alongside working with TriConnex to ensure
that the early customer intelligence that TriConnex becomes aware
of is utilised in the most effective manner, give us confidence
that we have an established route to continue to grow the Tamdown
business.
TriConnex
Financial & Operating performance
Revenue for TriConnex increased by 26.3% to GBP29.5m (2016:
GBP23.3m). This strong growth is due to a combination of an
expansion of our customer base, increased market share from current
customers and the take up by customers of TriConnex's self-lay
water and fibre services. The EU referendum had a limited negative
impact on the order book of TriConnex mainly due to the longer lead
times in designing and implementing utility networks. The order
book grew by 25.9% over the year to GBP94.4m (2016: GBP75.0m).
TriConnex is a high gross margin business, principally due to
the more technical, office based, added value nature of the
services it provides, resulting in a higher proportion of overhead
cost. The high gross margin was maintained during the year, with
the margin improving by 40 basis points to 33.8% (2016: 33.4%).
As TriConnex provides a turnkey service from concept to
connection with a significant amount of desktop planning and
research, the majority of TriConnex's staff are office based and in
order for TriConnex to continue to grow it has needed to invest in
an increased number of staff within business development, technical
and operations departments, with the total headcount increasing by
57 (44%) over the year. Accordingly, overheads have increased in
the year to GBP6.5m (2016: GBP5.0m), broadly in proportion to
turnover growth.
Operating profit increased by 23.8% to GBP3.5m (2016: GBP2.8m)
with an operating margin of 11.8% (2016: 12.1%).
Our markets
The utility connections market consists of three regulated
utilities; electricity, gas and water, and one unregulated utility,
fibre. TriConnex initially offered electricity and gas connections,
expanding to offer water connections in 2014 and fibre connections
in 2016. The market has arisen from the deregulation of the utility
sector and TriConnex entered the market in 2011 as a result of this
deregulation.
Since 2000 the regulator of electricity and gas utilities,
Ofgem, has been focused on improving competition within the
distribution side of the industry. In 2010, licence obligations
were imposed on electricity and gas distribution companies to
promote competition and tighten up performance standards when
working with independents. Today approximately 60% of gas and
approximately 30% of electricity connections in the UK are
undertaken by independent connection providers and these
percentages are expected to continue to grow.
The priority for the regulator for Water, Ofwat, has, until
recently, been to encourage the investment in an inadequate
infrastructure rather than the promotion of competition meaning
that the selling, distribution and the connection of water to new
developments had remained with the regional monopoly water
companies. However, the concept of Self-Lay was introduced in 2013
which permitted developers to arrange for the installation of the
water mains and services by an independent third party, so called
Self-Lay Organisations (SLOs) such as TriConnex.
The fibre connections market is not a regulated activity and
independents have always been able to provide them. Thus, there has
been less opportunity for TriConnex to benefit from deregulation
but in 2016, Ofcom mandated more open access to Openreach's fibre
network throughout the UK and the dynamics remain similar to the
electricity, gas and water connections market as the availability
of high speed fibre is an increasingly important factor for home
buyers, and therefore for housebuilders and developers. There has
been significant government support to roll out super-fast fibre
across the country, including new residential and commercial
developments.
TriConnex has approximately 20% share of the independent
utilities connection market in the South East of England. This has
been built through having a deep understanding of its customers'
needs, drawing on the Group's expertise in residential
developments, being more service focused and user-friendly than
competitors, as well as by providing fast and reliable delivery.
The market share for the South West of England is approximately 3%
but TriConnex has only been operating in the region since 2015 and
has identified significant growth opportunities.
Outlook
The proportion of regulated utility connections to be made by
independents is expected to continue to increase. TriConnex has
already built a reputation of a high level of customer services
alongside cost effective, efficient connections.
Our strategic objectives are to exploit the opportunities to
increase the customer base in a sector which is predicted to grow
due to undersupply. In addition, as the utilities services sector
is highly fragmented, the TriConnex team will explore acquisition
opportunities, with the aim of increasing geographic penetration
and service offering, as well as being earnings enhancing for the
Group.
Other financial information
Exceptional item
In 2017, the Group incurred a number of exceptional costs in
relation to the IPO totalling GBP1.7m and comprised GBP0.6m in
relation to transaction costs and GBP1.1m in relation to settling
share based management incentive arrangements (non-cash) that were
triggered on completion of the IPO.
Net finance costs
The net finance charge for the year totalled GBP0.2m (2016:
GBP0.2m). Interest received on bank deposits totalled GBP0.1m
(2016: GBP0.1m), with interest payable on bank borrowing of
GBP0.26m (2016: GBP0.30m) and interest on finance lease and hire
purchase facilities totalling GBP0.04m (2016: GBP0.06m).
Tax
The tax charge for the year was GBP1.6m, representing an
effective tax rate of 21.0%. This is higher than the statutory rate
of corporation tax due to some exceptional costs related to the IPO
not being deductible for tax.
Earnings per share
Basic earnings per share were 15.4 pence, after the impact of
the exceptional item (2016: 22.3 pence). The underlying basic
earnings per share, which has been adjusted for the impact of the
exceptional item were 19.1 pence (2016: 22.3 pence). The diluted
earnings per share were 15.0 pence (2016: 22.2 pence) and the
adjusted diluted earnings per share, excluding the impact of the
exceptional item were 18.6 pence (2016: 22.2 pence).
Dividends
As discussed in the Chairman's Statement, the Board has
recommended a final dividend of 4.2 pence per share, giving a total
dividend for the year of 6.3 pence per share. This is in line with
our guidance at the time of the IPO. The total cost of the
dividend, including the interim dividend, will be GBP2.4m.
Statement of financial position
During the year to 30 September 2017, shareholders' funds
increased by GBP3.6m to GBP17.0m (2016: GBP13.4m), the movement
included the payment of a dividends totalling GBP3.5m, which was
mitigated by the strong trading performance of the Group
companies.
Non-current assets increased over the year by GBP3.0m to
GBP10.2m (2016: GBP7.2m), with the increase including the
acquisition of land in Braintree where the Group's new head office
buildings will be built once the design and planning processes have
completed, which is anticipated to be midway through 2018. Current
assets decreased by GBP2.0m to GBP65.8m (2016: GBP67.8m) with
inventories increasing by GBP0.5m, trade and other receivables
increasing by GBP4.4m and cash balances decreasing by GBP6.9m to
GBP27.1m.
Total liabilities decreased by GBP2.6m to GBP59.0m (2016:
GBP61.6m), with borrowings decreasing by GBP2.0m with the repayment
of the term loan.
Cash flow
The Group utilised GBP6.9m (2016: generated GBP6.3m) of cash in
the year, resulting in a cash and cash equivalent balance at 30
September 2017 of GBP27.1m (2016: GBP34.0m).
Operating cash flows before working capital movements, generated
GBP10.3m (2016: GBP11.7m). Investment in working capital totalled
GBP5.0m (2016: GBP0.2m), with the main increase in debtors,
resulting in cash generated from operating activities of GBP5.3m
(2016: GBP11.5m). Tax and interest payments amounted to GBP2.7m
(2016: GBP2.4m). Cash utilised in investing activities totalled
GBP3.4m (2016: GBP0.2m), with GBP4.0m used to acquire fixed assets
of which GBP3.0m was for land for the Group's new head office. Net
cash out-flows from financing activities totalled GBP6.2m (2016:
GBP2.5m), including GBP3.5m (2016: GBP11.0m) on dividend
payments.
Treasury risk management
The Group's cash balances are centrally pooled and invested,
ensuring the best available returns are achieved consistent with
retaining liquidity for the Group's operations. The Group deposits
funds only with financial institutions which have a minimum credit
rating of A. As the Group operates wholly within the UK, there is
no requirement for currency risk management
Current trading and outlook
Trading in the first few months of the new financial year has
been in line with the Board's expectations. Demand from customers
is robust, and the Group's order book continuing to increase with
the balance as at 31 December 2017 of GBP213m, which provides the
Board with confidence for the year ahead.
Mike Morris Alan Martin
Chief Executive Officer Chief Financial Officer
8 January 2018
Consolidated statement of total comprehensive income
For the year ended 30 September 2017
Note 2017 2016
GBP'000 GBP'000
-------------------------------------- ----- ---------- ----------
Revenue 135,034 135,720
Cost of sales (107,793) (109,399)
Gross profit 27,241 26,321
---------- ----------
Administrative expenses (17,910) (15,941)
Operating profit 9,331 10,380
---------- ----------
Exceptional items 3 (1,714) -
Other income 4 - 380
Finance income 5 70 107
Finance expense 5 (304) (352)
Profit before tax 7,383 10,515
Taxation 6 (1,554) (2,104)
Profit 5,829 8,411
Other comprehensive income
Items that will or may be classified
to profit or loss:
Available for sale investments - (379)
Total comprehensive income for
the year attributable to equity
holders of the parent 5,829 8,032
Earnings per share (pence per
share)
Basic 8 15.40 22.28
Diluted 8 15.01 22.22
Consolidated statement of financial position
At 30 September 2017
2017 2016
GBP'000 GBP'000
------------------------------------------- -------- --------
Non-current assets
Property, plant and equipment 7,795 4,774
Goodwill 2,361 2,361
Other investments 55 60
-------- --------
Total non-current assets 10,211 7,195
Current assets
Inventories 924 427
Trade and other receivables 37,841 33,412
Cash and cash equivalents 27,066 33,992
-------- --------
Total current assets 65,831 67,831
-------- --------
Total assets 76,044 75,026
-------- --------
Current liabilities
Borrowings 2,000 2,000
Trade and other payables 49,909 49,908
Corporation tax 39 807
-------- --------
Total current liabilities 51,948 52,715
Non-current liabilities
Borrowings 6,400 8,400
Net obligations under finance leases/hire
purchase agreements 619 433
Deferred tax liabilities 62 102
-------- --------
Total non-current liabilities 7,081 8,935
-------- --------
Total liabilities 59,029 61,650
-------- --------
Net assets 17,013 13,376
-------- --------
Equity attributable to equity holders
of the company
Share capital 762 755
Retained earnings 16,251 12,621
Total equity 17,013 13,376
-------- --------
Consolidated statement of changes in equity
For the year ended 30 September 2017
Capital
Share redemption Retained
capital reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- ------------ ---------- ---------
Equity as at 1 October
2015 755 4,734 10,821 16,310
Transactions with owners
Dividend paid - - (11,000) (11,000)
Share-based payment
charge - - 34 34
Transfer from capital
redemption reserve to
retained earnings - (4,734) 4,734 -
--------- ------------ ---------- ---------
- (4,734) (6,232) (10,966)
Total comprehensive
income
Profit for the year - - 8,411 8,411
Other comprehensive
income - - (379) (379)
--------- ------------ ---------- ---------
- - 8,032 8,032
Equity as at 30 September
2016 755 - 12,621 13,376
--------- ------------ ---------- ---------
Transactions with owners
Dividend paid - - (3,476) (3,476)
Share-based payment
charge - - 1,277 1,277
Issue of share capital 7 - - 7
--------- ------------ ---------- ---------
7 - (2,199) (2,192)
Total comprehensive
income
Profit for the year - - 5,829 5,829
--------- ------------ ---------- ---------
- - 5,651 5,651
Equity as at 30 September
2017 762 - 16,251 17,013
--------- ------------ ---------- ---------
Consolidated statement of cash flows
For the year ended 30 September 2017
Note 2017 2016
GBP'000 GBP'000
----------------------------------------- ----- -------- ---------
Cash flow from operating activities
Profit before tax 7,383 10,515
Adjusted by:
Loss on disposal of plant and
equipment 20 3
Share-based payment charge 1,277 34
Loss/(Profit) on disposal of
investments 5 (372)
Finance expense (net) 234 245
Depreciation of property, plant
and equipment 1,400 1,261
-------- ---------
Operating profit before working
capital changes 10,319 11,686
Working capital adjustments:
(Increase)/Decrease in trade
and other receivables (4,428) (11,273)
(Increase)/Decrease in inventories (497) 312
Increase/(Decrease) in trade
and other payables (63) 10,753
-------- ---------
Cash generated from operating
activities 5,331 11,478
Interest paid (304) (355)
Taxation paid (2,363) (2,076)
Net cash flows from operating
activities 2,664 9,047
-------- ---------
Investing activities
Purchase of property, plant and
equipment (4,061) (1,050)
Sale of property and equipment 629 244
Sale of available for sale investments - 456
Interest received 70 107
-------- ---------
Net cash used in investing activities (3,362) (243)
-------- ---------
Financing activities
Dividend payment 7 (3,476) (11,000)
Draw down of term loan - 12,000)
Repayment of loans (2,000) (2,600)
Repayment of finance leases/hire
purchase agreements (759) (936)
Issue of share capital 7 -
-------- ---------
Net cash used in financing activities (6,228) (2,536)
Net change in cash and cash equivalents (6,926) 6,268
-------- ---------
Cash and cash equivalents at
the beginning of the year 33,992 27,724
Cash and cash equivalents at
the end of the year 27,066 33,992
-------- ---------
Notes to the preliminary results
For the year ended 30 September 2017
1. Accounting policies
The Group financial statements have been prepared and approved
by the Directors in compliance with international financial
reporting standards (IFRSs) and IFRS interpretations committee
(IFRIC) as adopted by the European Union.
The financial information included within this preliminary
report does not constitute the Group's statutory accounts, but is
derived from those accounts on which an unqualified audit opinion
has been issued. Statutory accounts for 2016 have been delivered to
the Registrar of Companies, and those for 2017 will be delivered in
due course.
The accounting policies adopted in preparation of these accounts
are consistent with those of the previous financial year. Of the
new standards and interpretations that are in issue for the
financial year ended 30 September 2017, there is no financial
impact on these preliminary results.
Notes to the preliminary results (continued)
For the year ended 30 September 2017
2. Segmental analysis
The Group is organised into the following two operating
divisions under the control of the Executive Board, which is
identified as the Chief Operating Decision Maker as defined under
IFRS8 'Operating Segments':
-- Tamdown Group Limited
-- TriConnex Limited
All of the Group's operations are carried out entirely within
the United Kingdom.
Segment information about the Group's operations is presented
below:
2017 2016
GBP'000 GBP'000
-------------------------------- -------- --------
Revenue
Tamdown Group Limited 105,565 112,390
TriConnex Limited 29,469 23,330
-------- --------
Total revenue 135,034 135,720
Gross profit
Tamdown Group Limited 17,282 18,536
TriConnex Limited 9,959 7,785
-------- --------
Total gross profit 27,241 26,321
Operating profit
Tamdown Group Limited 7,210 9,451
TriConnex Limited 3,490 2,819
Group overhead (1,369) (1,889)
-------- --------
Total operating profit 9,331 10,381
Exceptional items (1,714) -
Other income - 380
Net finance cost (234) (246)
-------- --------
Profit before tax 7,383 10,515
Taxation (1,554) (2,104)
Total comprehensive income for
the period 5,829 8,411
-------- --------
Notes to the preliminary results (continued)
For the year ended 30 September 2017
3. Exceptional items
2017 2016
GBP'000 GBP'000
---------------------------------- -------- --------
IPO transaction costs 611 -
IFRS2 costs of shares transferred 1,103 -
on IPO
-------- --------
1,714 -
The transaction costs relate to the admission of the company to
the Alternative Investment Market of the London Stock Exchange on
11 July 2017. The admission to AIM triggered the settlement of
management incentive arrangements, with shares being transferred to
members of management. The amount relates to the fair value of
shares transferred.
4. Other income
2017 2016
GBP'000 GBP'000
---------------------------------------- --------- --------
Sale of available for sale investments - 380
--------- --------
5. Finance income and expense
2017 2016
GBP'000 GBP'000
-------------------------------------- -------- --------
Finance income
Interest on bank deposits 70 107
-------- --------
Finance expense
Interest on bank loan (260) (296)
Interest on hire purchase agreements (44) (56)
-------- --------
(304) (352)
Finance expense (net) (234) (245)
-------- --------
Notes to the preliminary results (continued)
For the year ended 30 September 2017
6. Taxation
2017 2016
GBP'000 GBP'000
----------------------------------------- -------- --------
Current Tax:
UK corporation tax on profits for
the year 1,606 2,248
Adjustments in respect of prior periods - (81)
-------- --------
Total current tax 1,606 2,167
Deferred Tax:
Origination and reversal of timing
differences (52) (37)
Prior period adjustment - (1)
Effect of tax rate change on opening
balance - (25)
-------- --------
Taxation 1,554 2,104
-------- --------
The tax assessed for the year is different from the standard
rate of corporation tax as applied in the UK. The differences are
explained below:
Profit before tax 7,383 10,515
Profit before tax multiplied by the
respective standard rate of corporation
tax applicable in the UK (19.5%)
(2016: 20.0%) 1,421 2,027
Effects of:
Non-deductible expenses 425 176
Prior period adjustment - (81)
Deduction in respect of share options (311) -
exercised
Deferred tax 19 (18)
------ -------
Taxation 1,554 2,104
------ -------
Notes to the preliminary results (continued)
For the year ended 30 September 2017
7. Dividends
2017 2016
GBP'000 GBP'000
-------------------------------------- -------- --------
Amounts recognised as distributions
to equity holders in the year:
Interim dividend for the year ended
30 September 2017 of 2.1p (2016:
GBP14.56) 799 11,000
Final dividend for the year ended 2,677 -
30 September 2016 of 3.5p per share
3,476 11,000
-------- --------
The proposed final dividend for the year ended 30 September 2017
of 4.2p per share (2016:3.5p) makes a total dividend for the year
of 6.3p (2016: 18.06p). The proposed final dividend is subject to
approval by shareholders at the AGM and has not been included as a
liability in these financial statements. The total estimated
dividend to be paid is GBP1,600,000.
8. Earnings per share
2017 2016
GBP'000 GBP'000
-------------------------------------- ----------- -----------
Profit for the year attributable
to equity shareholders 5,829 8,411
----------- -----------
Weighted average number of shares
in issue for the year 37,844,645 37,757,850
Effect of dilutive potential
ordinary shares:
Share options 985,099 1,784
Weighted average number of shares
for the purpose of diluted earnings
per share 38,829,744 37,847,067
Basic earnings (pence per share) 15.40 22.28
Diluted earnings (pence per share) 15.01 22.22
On 5 July 2017, the Group passed resolutions, conditional upon
Admission and to take effect immediately prior to Admission, to
restructure the company's capital to reclassify all shares as
ordinary voting shares and to subdivide and redesignate the shares
as ordinary shares of GBP0.02 each.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAEFPEEAPEAF
(END) Dow Jones Newswires
January 09, 2018 02:00 ET (07:00 GMT)
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