TIDMXPD
RNS Number : 6292B
Xpediator PLC
24 September 2018
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
XPEDIATOR PLC
("Xpediator", the "Company" or the "Group")
INTERIM RESULTS
FOR THE SIX MONTHS TO 30 JUNE 2018
Xpediator Plc (AIM: XPD), a leading provider of freight
management services across the UK and Europe, is pleased to
announce its unaudited interim results for the six months ended 30
June 2018.
Statutory Results Underlying Results (3)
H1 2018 H1 Change(4) H1 2018 H1 2017 Change
2017
----------------------- ------------ ---------- ----------- ------------ ----------- -------
Revenue GBP78.9m GBP49.1m 60.7% GBP63.7m GBP49.1m 29.8%
Operating Profit GBP2.3m GBP1.0m 132.9% GBP1.6m GBP1.0m 60.7%
Earnings GBP1.7m GBP0.5m 212.9% GBP1.0m GBP0.5m 81.7%
EPS 1.29p 0.50p
Adjusted Operating
Profit(1) GBP2.1m GBP1.4m 44.2% GBP1.9m GBP1.4m 30.6%
Adjusted Earnings(2) GBP1.4m GBP1.0m 33.7% GBP1.2m GBP1.0m 18.4%
Adjusted EPS(2) 1.06p 1.10p (3.6)%
Net Cash from
(used in)/operating GBP(0.1)m
activities m GBP1.9m (106.3)%
Dividend 0.42p 0.347p 21.0%
per share
(pence)
1: Adjustment for one-off costs incurred in H1 2018 comprise
GBP91,000 of costs of acquisition relating to Anglia Forwarding
Group Limited, GBP361,000 amortisation and the net impact of
transactions relating to Benfleet totalling GBP747,000. In H1 2017,
the Group incurred costs associated with the group restructure and
AIM IPO of GBP331,000, goodwill amortisation of GBP88,000. Adjusted
Earnings is inclusive of the profit from non-controlling interests
of GBP132,000 (2017 - GBP105,000).
2: Adjustment for one-off costs incurred in H1 2018 comprise
GBP91,000 of costs of acquisition relating to Anglia Forwarding
Group Limited, GBP17,000 non cash interest charges, GBP361,000
amortisation and the net impact of transactions relating to
Benfleet totalling GBP747,000. In H1 2017, the Group incurred costs
associated with the group restructure and AIM IPO of GBP331,000,
goodwill amortisation of GBP88,000 and non cash interest charges of
GBP86,000. Adjusted Earnings is inclusive of the profit from
non-controlling interests of GBP132,000 (2017 - GBP105,000).
3: Underlying Results relates to a business that existed in the
same period last year, and thus excludes all acquisitions acquired
post 30 June 2017.
4: The percentages are calculated from movements in the
Consolidated Income Statement using GBP000's rather than GBPm.
Trading Highlights
-- Group turnover increased by GBP29.8m of which GBP14.6m/49.0%
was organic growth and GBP15.2m/51.0% came from acquisitions
-- Strong turnover growth (versus H1 2017) and increased
contribution from all three operating divisions (Freight
Forwarding, Transport Solutions and Logistics):
o Freight Forwarding division up 67.1%
o Transport Solutions division up 36.0%
o Logistics division up 35.7%
-- Turnover generated in the UK increased to GBP28.8m/36.6% of
total (H1 2017: GBP11.5m/23.5%) of which GBP2.1m was organic growth
and GBP15.2m came from acquisitions, whilst CEE/non-UK turnover
increased GBP12.5m/33.3% to GBP50.0m (H1 2017: GBP37.5m) which was
entirely organic
-- Particularly strong performance from Pall-Ex Romania now
consistently achieving in excess of 45,000
pallets of freight per month (2017: 35,800 average freight per month)
-- Following increased customs security checks across the
continent, the development of Benfleet Forwarding Limited's
("Benfleet") Far Eastern business was affected. Whilst trading
recently recommenced with a key customer, this has and will
continue to impact Benfleet's profitability in 2018. The resultant
impairment of goodwill was countered by a positive restructuring of
the original acquisition terms.
-- Successfully completed two further acquisitions being:
-- Anglia Forwarding Group Limited ("AFGL") in May 2018 for an
initial net consideration of GBP1.5m with further consideration
payable on the final net asset position on the completion and
deferred consideration of up to GBP2.0m payable depending on future
profits generated.
-- Import Services Limited ("ISL") post balance sheet date, for
an initial net consideration of GBP9.0m with further consideration
payable on the final net asset position on the completion and
deferred consideration of up to GBP3.0m depending on future profits
generated
-- Appointment of Stuart Howard as Chief Financial Officer from 1 September 2018
-- Pleasing start to H2 2018 with trading weighted as usual
towards the second half and the Board remains
confident of delivering full year results in line with market
expectations
-- Interim dividend increased 21.0% to 0.42 pence per share (H1 2017: 0.347 pence)
Alex Borrelli, Chairman, commented:
"The first half of 2018 has continued the progress made through
2017. All three divisions are growing well, underlying revenues
have increased substantially, and demand for our freight management
services across all our core markets is high.
"We continue to seek acquisitions in line with our strategy to
add to our existing activities and facilitate our expansion
internationally. During the period, we acquired AFGL, an
international freight forwarding and courier business based in
Essex, for up to GBP3.5 million in cash. In July, we acquired ISL
for up to GBP12 million in a mixture of cash and shares, part
financed through an over subscribed placing which raised GBP7
million, before expenses. ISL has a strong management team and has
40k sqm of warehousing in the Port of Southampton, representing a
significant commercial opportunity for Group expansion, and we
expect to benefit from operational and cross-selling
opportunities.
The Group has now completed four acquisitions over the last 18
months and collectively they are expected to be significant drivers
of sales and profit growth in the current year and beyond. Although
the increasing customs security checks have affected the
development of the Far East business within Benfleet, I am pleased
with the positive steps taken to address this, which ultimately
resulted in a one-off net credit to the Group's income statement of
approximately GBP0.7m.
"Following the positive start to the year, the Board is pleased
to announce an increased interim dividend in line with our
progressive dividend policy and we remain confident in the outlook
for our full year results for 2018."
An interview with Xpediator CEO, Stephen Blyth, discussing
today's Interim Results with Vox Markets will be available today
from 7.00am. To listen go to https://bit.ly/2NZ7Sms or visit the
Company's account https://twitter.com/@Xpediator.
Enquiries
Xpediator plc Tel: +44 (0)330 043
2395
Stephen Blyth, Chief Executive Officer Email: info@xpediator.com
Stuart Howard, Chief Financial Officer
SP Angel Corporate Finance LLP (Nominated Advisor Tel: +44 (0)20 3470
& Joint Broker) 0470
Jeff Keating
Caroline Rowe
Cantor Fitzgerald Europe (Joint Broker) Tel: +44 (0)20 7894
7000
David Foreman, Michael Boot (Corporate Finance)
Caspar Shand Kydd, Gregor Paterson (Sales)
Novella Communications (Financial Public Relations) Tel: +44 (0)20 3151
7008
Tim Robertson
Toby Andrews
About Xpediator:
Xpediator is a well-established international provider of
freight management services. Established in 1988 by CEO Stephen
Blyth today the Group's International network of offices provides
road, sea and air freight services, together with logistics and
warehousing in the UK and Romania. The business offers integrated
freight management within the supply chain logistics and fulfilment
sector, through their three main areas: freight forwarding,
logistics & warehousing and transport solutions. With
headquarters in Braintree, Essex and country offices in nine CEE
countries across 31 sites, the Group currently employs 938 people
and was successfully listed on London's AIM market in August
2017.
For more information, please visit: www.xpediator.com.
Alternatively, do follow us on Twitter at @Xpediator or find us
on LinkedIn at Xpediator Plc.
CEO Statement
Introduction
This has been a successful period for the Group delivering
substantial increases in revenues and profitability. Pleasingly,
these increases have come in near equal measure from organic growth
and contribution from the acquisitions we have made.
Equally importantly, this momentum has continued into the second
half of 2018. Xpediator is trading in line with management
expectations and is well placed to continue to expand.
Positioned for Growth
Established as a scalable, risk adjusted, platform to support an
expanding portfolio of freight management companies across the UK
and Europe with a particular expertise in Central and Eastern
Europe ("CEE"), Xpediator has been successful in pursuing this
objective. Over the last 12 months, the Group has grown
substantially, increasing the number of active customers through a
balance of strong organic growth and complementary
acquisitions.
This growth has been supported by a positive market environment
in which demand for transportation solutions has been high and we
are confident this will continue. The very visible consumer switch
from the high street to home deliveries has been a significant
global factor in driving demand together with an increase in
commercial activity across our core markets.
The Group has adopted an asset light business model to minimise
risk. Operating on a comparatively low fixed cost base, no one
customer represents more than 2% of Group turnover and revenues are
spread over multiple geographies and market sectors thereby further
reducing customer and market risk. This approach is replicated
throughout the business and is key to ongoing scalability.
Increasing scale will continue to come from a healthy mix of
organic and acquisition led growth. We have the ability to source
capacity within our current structure to manage the forecast
increase in demand and we continue to see opportunities to acquire
complementary businesses which can fit within the Xpediator
portfolio.
H1 2018 Trading
The Group generated revenues of GBP78.9m during the six months
ended 30 June 2018 (H1 2017: GBP49.1m), adjusted operating profit
of GBP2.1m (H1 2017: GBP1.4m) and unadjusted profit after tax of
GBP1.7m (H1 2017: GBP0.5m). Pleasingly, all three of the Group's
operating divisions (Freight Forwarding, Transport Solutions and
Logistics) delivered strong turnover growth and increased
contribution, further details of which are set out below.
Turnover generated in the UK increased to GBP28.8m/36.6% of
total (H1 2017: GBP11.5m/23.5%) of which GBP2.1m was organic and
GBP15.2m came from acquisitions, whilst CEE/non-UK turnover
increased GBP12.5m/33.3% to GBP50.0m (H1 2017: GBP37.5m) which was
entirely organic.
Reflecting confidence in the future, the Board has announced the
payment of an interim dividend of 0.42p per share. The dividend
will be payable to shareholders on the register on 5 October 2018
with the ex div date being 4 October 2018. The dividend will be
paid on 26 October 2018.
Acquisitions
In May 2018, we expanded our position in the international
freight forwarding market with the acquisition of Anglia Forwarding
Group. Anglia has been well integrated into the Group and its
strength in sea and air freight, in particular, has significantly
increased the Group's capabilities in these areas.
Post the half-year end in July 2018, Import Services Limited
("ISL") was acquired for up to a maximum consideration of GBP12
million in part financed through an over subscribed placing which
raised GBP7 million, before expenses. ISL is a long established
contract warehousing business located within the port of
Southampton, has 40k sqm of warehousing capacity and a strong
presence in the toy, leisure and sports sectors. It is a natural
fit with the Group and provides scope to combine with our existing
facilities in Southampton and expand the Group's capabilities
around port services. The integration of ISL into the Group is
progressing in line with expectations and the ISL team have made a
positive start post acquisition.
Operational Review
Freight Forwarding
Revenue H1 2018: GBP65.4m H1 2017: GBP39.1m
Operating profit H1 2018: GBP1.0m H1 2017: GBP0.7m
Freight forwarding services are provided under the Delamode
brand. The division specialises in connecting CEE countries and the
UK. In the period under review, the freight forwarding division
increased revenues by 68.2% of which 30.7% was organic.
This organic growth was principally driven by increased
activities in the Baltic region together with the development of
Greek activity [through our Bulgaria operations]. The Group has
also continued to progress the development of the full load
activity, which, whilst decreasing gross profit margins, is both
revenue and earnings enhancing. The West Balkan activity generated
an increase in revenues of 41.7% against the comparable period last
year.
The Group's EshopWedrop division is also progressing in line
with expectations with franchises having been awarded to companies
in Albania and Cyprus in 2017 and, more recently, in the USA.
Further franchises are expected to be agreed in the last quarter of
2018.
Transport Solutions
Revenue H1 2018: GBP3.1m H1 2017: GBP2.2m
Operating profit H1 2018: GBP1.2m H1 2017: GBP1.1m
Transport solutions, trading principally under the Affinity
brand, provides bundled fuel and toll cards, financial and support
services for hauliers in southern Europe. Affinity is an agent of
DKV in Romania, one of the world's largest fuel card providers and
provides the DKV fuel card across the Balkans to a database of
approximately 1,700 Eastern European hauliers and over 12,500
trucks. In addition, Affinity provides a "one stop shop" of
transport services including roadside assistance and ferry
bookings.
Affinity's commercial model fits well within the Group as many
of the hauliers who are customers of Affinity also supply haulage
services to Delamode a key factor that enables the Group to have a
good understanding of its customers/suppliers, which underpins the
strategy to provide further financial services such as insurance
and leasing.
Affinity generated record revenues during the period. The
majority of this growth was from increased provision of fuel cards
in the West Balkan region along with increased ferry crossing sales
in Romania, up by 46.7% to approximately 11,000, (H1 2017 : 7,500),
albeit this latter service is lower margin and therefore impacted
the divisions overall margin in the period compared with H1
2017.
Logistics & Warehousing
Revenue H1 2018: GBP10.5m H1 2017: GBP7.7m
Operating profit H1 2018: GBP0.3m H1 2017: GBP0.2m
Logistics and Warehousing comprises:
-- distribution hubs in the UK and southern Europe providing
over 50,000 sqm of shared user space (at the period end);
-- pallet distribution services: the Group is the master
franchisee of a fast growing pallet distribution network in Romania
which trades under the Pall-Ex brand; and
-- EMT, a business based in London specialising in fashion logistics.
Pall-Ex contributed strongly during this period and is now
moving over 45,000 pallets of freight monthly, a significant
increase over the prior period (2017: 38,500 per month).
Our logistics network continued to develop its offering in 2018
by increasing the customer database and service offerings,
including e-commerce. The Group plans to move into a new purpose
built cross dock facility in Sibiu in 2019 to accommodate the
increased Pall-Ex activity. The Logistics divisions activities
remain largely focused in CEE and the UK.
Warehousing activity increased in the first half 2018 compared
to 2017 as a result of a rise in customer activity in the UK and
the new warehouse in Romania which opened in the second half of
2017. In the UK, warehouse activity in Braintree is expected to
increase in the second half of 2018 following the significant
expansion of a contract with an existing customer
Brexit
We have consistently said that we see Brexit as an opportunity
for Xpediator. The current uncertainty makes planning for all
business challenging. We maintain however, that our experience over
the last 30 years of providing cross border transport solutions
(including customs clearances) leaves us well positioned to adapt
to, and indeed benefit from the consequences of Brexit, hard or
soft. Ultimately, our customers will need to understand and find
solutions to continue getting their goods to their end-market.
People
During the period, the Company welcomed Michael Grange as Chief
Information Officer (non-Board position) and Rob Riddleston as a
Non Executive Director, an experienced corporate banker with
extensive knowledge of the logistics sector. Further, on 20 August
2018, the Company confirmed the appointment of Stuart Howard,
previously CEO of Dollar UK, as the Company's new CFO from 1
September 2018.
I am extremely pleased to welcome such experienced individuals
to Xpediator and I am confident that they will all make a
significant contribution to the future growth of the business.
Outlook
As is usual across our industry, activity levels are second half
weighted. In general, there is increasing demand for our range of
freight management services, driven by economic growth especially
across the CEE region and wider global trends such as e-commerce
activity driving up the frequency of goods to be delivered across
all our markets. These factors, combined with the increased size
and additional capabilities of the Xpediator Group means the
business is well positioned to continue growing and to generate
increased revenues and higher profits and dividends.
With trading in the second half having begun well, the Board is
confident that the Group will deliver financial results for the
full year in line with market expectations.
Stephen Blyth
CEO
21 September 2018
Financial Review
Revenue
The underlying revenue for the six months to 30 June 2018 was
GBP78.9m, an increase of GBP29.8m/60.7% on the comparable period
(H1 2017: GBP49.1m). Of this revenue increase, GBP14.6m was organic
whilst GBP15.2m came from newly acquired businesses
Turnover increased across all of our main countries of
operations. UK turnover increased by 150% to GBP28.8m (H1 2017:
GBP11.5m) arising principally from the acquired businesses and
represented approximately 36.5% of Group revenues (H1 2017: 23.5%).
Romania, Lithuania and Bulgaria each grew revenues by over 30.0%,
much of this growth due to the successful and ongoing focus and
development of the full load activity in the Baltic region and the
development of the Bulgarian activity servicing the Greek
markets.
Operating profit
Statutory operating profit for the period was GBP2.3m (H1 2017:
GBP1.0m), a 132.8% increase year on year. However, GBP0.7m of this
increase related to the net effect of one off accounting
adjustments in respect of Benfleet (further details provided
below). Adjusted operating profit increased by 44.2% in the period
to GBP2.1m (H1 2017: GBP1.4m).
As is usual for the half year period end, the Group made a
significant number of deliveries over the period for which the
revenue and profit will be recognised on final delivery.
Accordingly, deferred revenue of GBP1.2m (H1 2017: GBP0.9m) and
deferred operating profit of GBP0.1m (H1 2017: GBP0.1m) will be
recognised in the second half of 2018. Due to seasonality of the
business, the amount of deferred revenue will be considerably
smaller at the year-end date.
Financing costs
The net interest expense for the six month period was GBP0.2m
(H1 2017: GBP0.2m). The reported net interest expense totalled
GBP0.2m (H1 2017: GBP0.3m) which included a charge of GBP17,000
relating to the "unwinding" of the difference between the expected
present value of deferred consideration and the expected total
consideration relating to acquisitions completed in 2017 and 2018
(H1 2017: GBP88,000). This is a non-cash interest charge and is not
trading related.
Tax
The tax charge for the period to June 2018 was GBP0.5m compared
to GBP0.2m for the same period in 2017. This equates to an
effective tax rate of 23.4% compared to 25.6% for the period to 30
June 2017.
The effective rate was principally affected by the exceptional
costs associated from acquisitions made and the non-cash finance
charge in 2018.
Balance Sheet
The Group had net assets of GBP17.5m as at 30 June 2018 (31
December 2017: GBP14.8m).
Non-current trade and other receivables increased by GBP1.9m to
GBP2.1 million (31 December 2017: GBP0.1 million) being the
receivable due from the vendors of Benfleet Forwarding as referred
to below.
Current trade and other receivables increased by GBP2.6m to
GBP54.4m (31 December 2017: GBP51.8m), partially as a result of the
acquisition of AFGL.
Non-current liabilities fell by GBP1.4m to GBP4.8m (31 December
2017: GBP6.2m) principally as a result of the GBP0.9m reduction in
deferred consideration, (which is no longer due on the acquisition
of Benfleet and other deferred consideration now falling due within
one year) and GBP0.5m reduction in loans and borrowings.
The Group's cash position was GBP6.0m as at 30 June 2018 (31
December 2017: GBP7.4m) partially due to the acquisition of AFGL.
In addition, the Group sought to pay suppliers more quickly in
order to benefit from early settlement discounts which resulted in
a net operating cash out flow. The Group utilised Delamode's UK CID
facility to finance the accelerated supplier payments which
resulted in Group total borrowings increasing to GBP6.5m at 30 June
2018 (31 December 2017: GBP5.8m).
Share Capital
On 8 June 2018, the Group issued 1,727,694 shares to the former
owners of EMT as part of the payment of the deferred consideration
relating to the acquisition of the entire equity of EMT in 2017.
The shares had a market value of GBP1.1m.
Dividends
The Directors are declaring an interim dividend of 0.42 pence
(H1 2017: 0.347 pence) per share totalling GBP558,000 (H1 2017:
GBP350,000) to be paid on 26 October 2018. This dividend has not
been accrued in the consolidated Statement of Financial
Position.
Benfleet
In October 2017, the Group acquired the entire issued share
capital of Benfleet. As a result of EU concerns over UK
under-collection of duty on Chinese imports, HMRC changed the
customs clearance processes being applied in the period.
Consequently, Benfleet's Far Eastern customers began experiencing
delays and incurring additional costs which resulted in those
customers suspending sending containers to the UK. This impacted
both the revenues and the profitability of Benfleet during the
period. The Group therefore obtained legal and taxation advice on
the situation and procedures undertaken, and the business
re-commenced post 30 June 2018, albeit at significantly lower
levels to that previously performed in 2017.
As a result of this reduced profitability, the Group has carried
out an impairment review on Benfleet. Based on the Board's
expectations and projected future cash flows, the Group determined
an impairment of GBP1.8m should be made against the goodwill
capitalised upon the acquisition of Benfleet (see note 5). The
impairment charge has been recognised in administration expenses
through the Income Statement.
Given this projected, reduced profitability of Benfleet, the
Group also determined and has agreed with the original vendors of
Benfleet that potential deferred consideration totalling GBP0.6m,
which was the fair value recognised as at 31 December 2017, will no
longer be payable. This liability has therefore been written back.
Further, the vendors of Benfleet have agreed to reimburse Xpediator
a total of GBP2.1m from the original initial consideration paid, to
be received by the earlier of the share price reaching 93 pence or
December 2020. Both the release of the deferred consideration of
GBP0.6m and the recognition of the receivable from the vendors of
Benfleet with a fair value of GBP1.97m have been recognised within
administrative expenses in the Income Statement (see note 9).
The overall net impact of impairment charge, release of
previously recognised deferred consideration payable and
recognition of receivable from vendors of GBP0.7m has been
recognised as a credit to the Income Statement
Stuart Howard (CFO) and Richard Myson (former CFO)
21 September 2018
Consolidated income statement Unaudited Unaudited Audited
6 months
6 months to to Year to
30 June 30 June 31 December
2018 2017 2017
Note GBP000 GBP000 GBP000
-------------------------- ---------------- ---------------------
Gross Billing 143,770 106,994 232,070
------------------------------------- ----- -------------------------- ---------------- ---------------------
Revenue 1 78,879 49,063 116,297
Cost of sales (62,049) (37,389) (88,186)
Gross profit 16,830 11,674 28,111
Other operating income 147 365 658
Administrative expenses (14,632) (11,032) (25,680)
Operating profit 2,345 1,007 3,089
EBIT
------------------------------------- ----- -------------------------- ---------------- ---------------------
Exceptional items included in
Administrative
expenses above 11 91 331 912
Exceptional items - Benfleet 11 (747) - -
-------------------------- ---------------- ---------------------
Operating profit before exceptional
items 1,689 1,338 4,001
------------------------------------- ----- -------------------------- ---------------- ---------------------
Finance income 14 2 12
Finance costs (181) (210) (370)
Non cash finance costs 11 (17) (88) (295)
Profit before tax 2,161 711 2,436
Income tax (506) (182) (651)
Profit for period 1,655 529 1,785
========================== ================ =====================
Profit attributable to:
Owners of the parent 1,523 424 1,540
Non-controlling interests 132 105 245
-------------------------- ---------------- ---------------------
Profit for period 1,655 529 1,785
EPS attributable to the owners
of the parent
Basic earnings pence per share 3 1.29 0.50 1.64
Diluted earnings pence per share 3 1.27 0.50 1.63
Adjusted basic earnings pence
per share* 3 1.06 1.10 3.27
Adjusted diluted earnings pence
per share 3 1.04 1.10 3.26
* Earnings per share adjusted for exceptional costs as described
in note 11
Consolidated Statement of Comprehensive
Income Unaudited Unaudited Audited
6 months to 6 months to Year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
------------- ------------- ------------
Profit for the period 1,655 529 1,785
------------- ------------- ------------
Other comprehensive income
Exchange differences on translation
of foreign operations (32) 85 112
------------- ------------- ------------
Total comprehensive income for
the period 1,623 614 1,897
============= ============= ============
Total comprehensive income attributable
to:
Owners of the parent 1,494 501 1,634
Non-controlling interests 129 113 263
-------- ------------------------------ ------
Total comprehensive income for
the period 1,623 614 1,897
======== ============================== ======
Unaudited Unaudited Audited
Consolidated statement of 30 June 30 June 31 December
financial position 2018 2017 2017
Note GBP000 GBP000 GBP000
--------------------- ---------- ------------
Non-current assets
Intangible assets 5 14,439 7,997 15,168
Property, plant and equipment 6 1,713 1,368 1,600
Investments 58 15 1
Trade and other receivables 2,112 181 149
Deferred tax 231 202 196
--------------------- ---------- ------------
Total non-current assets 18,553 9,763 17,114
Current assets
Inventories 42 34 50
Trade and other receivables 54,405 39,731 51,806
Cash and cash equivalents 5,988 6,927 7,385
Total current assets 60,435 46,692 59,241
Total assets 78,988 56,455 76,355
--------------------- ---------- ------------
Equity
Share capital 7 6,008 4,050 5,922
Share premium 5,792 - 5,792
Equity reserve 151 - 69
Translation reserve 521 529 546
Merger reserve (521) (3,750) (1,509)
Retained earnings 5,054 2,769 3,535
--------------------- ---------- ------------
Total equity 17,005 3,598 14,355
Non-controlling interests 8 487 266 413
Total equity 17,492 3,864 14,768
Non-current liabilities
Deferred consideration 9 601 - 1,666
Trade and other payables - 1,103 -
Interest bearing loans and
borrowings 10 2,810 3,084 3,309
Deferred tax 1,374 804 1,209
4,785 4,991 6,184
--------------------- ---------- ------------
Current liabilities
Overdrafts 267 - 45
Trade and other payables 50,764 41,943 50,973
Deferred consideration 9 1,955 - 1,840
Interest bearing loans and
borrowings 10 3,725 5,657 2,545
56,711 47,600 55,403
--------------------- ---------- ------------
Total liabilities 61,496 52,591 61,587
--------------------- ---------- ------------
Total equity and liabilities 78,988 56,455 76,355
===================== ========== ============
Consolidated statement of
cash flows Unaudited Unaudited Audited
6 months
6 months to to Year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
-------------------------------------------------- ---------------- ----------------
Profit before tax 2,161 711 2,436
Adjustment for:
Depreciation 237 159 368
Amortisation 425 145 437
Finance costs 198 298 665
Finance income (14) (2) (12)
Share based payment charge 82 - 69
Impairment of intangible
assets 1,845 - -
Deferred consideration
write
back and vendor income (2,592) - -
Profit on disposal of
investments - (15)
Loss on disposal of
property,
plant and equipment 13 29 8
-------------------------------------------------- ---------------- ----------------
2,355 1,340 3,956
Changes in working capital:
Decrease/(increase) in
stock 8 10 (6)
Increase/(decrease) in
trade
and other receivables 325 (11,179) (17,208)
(Decrease)/increase in
trade
and other payables (2,806) 11,710 16,043
Net cash (used
in)/generated
from operating activities (118) 1,881 2,785
-------------------------------------------------- ---------------- ----------------
Continuing operations
Cash flows from operating
activities
Interest paid (181) (212) (370)
Tax paid (402) (309) (762)
-------------------------------------------------- ---------------- ----------------
Net cash from operating
activities (701) 1,360 1,653
Cash flows from investing
activities
Purchase of tangible fixed
assets (195) (338) (771)
Acquisition of subsidiary,
net of cash acquired (1,352) (2,500) (5,835)
Cash received from sale of -
investments 83 -
Purchase of intangible
fixed
assets (49) (38) (47)
Sale of tangible fixed
assets
and investment property - - 72
Sale of investments - 30
Interest received 14 2 12
Net outflow from investing
activities (1,499) (2,874) (6,539)
-------------------------------------------------- ---------------- ----------------
Cash flows from financing
activities
New loans 1,029 4,183 1,198
Loan repayments (348) (794) (696)
Issue of ordinary shares
for cash - - 7,184
Dividend paid - - (350)
Transactions with
non-controlling
interests (3) (193) (209)
Non-controlling interest
dividends paid (55) (104) (107)
Net cash inflow from
financing
activities 623 3,092 7,020
-------------------------------------------------- ---------------- ----------------
Consolidated statement of cash
flows Unaudited Unaudited Audited
6 months
6 months to to Year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
------------ ---------- ------------
(Decrease)/increase in cash and
cash equivalents from continuing
operations (1,577) 1,578 2,134
Cash and cash equivalents at
beginning of period 7,340 5,351 5,351
Effect of foreign exchange rate
movements (42) (2) (145)
------------ ---------- ------------
Cash and cash equivalents at
end of period 5,721 6,927 7,340
============ ========== ============
Consolidated Statement of Changes in Equity
For the six months to 30 June 2018 (unaudited)
Share Share Equity Retained Translation Merger Total Non-controlling Total
Capital Premium Reserve earnings Reserve Reserve interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP000s GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- --------- ----------- --------- -------- --------------- --------
Balance at
1 January
2018 5,922 5,792 69 3,535 546 (1,509) 14,355 413 14,768
Dividends - - - - - - - (55) (55)
Share options
not yet
exercised - - 82 - - - 82 - 82
Issue of share
Capital 86 - - - - 988 1,074 - 1,074
-------- -------- -------- --------- ----------- --------- -------- --------------- --------
Total
contributions
by and
distributions
to owners 86 - 82 - - 988 1,156 (55) 1,101
Profit for
the period - - - 1,523 - - 1,523 132 1,655
Exchange
differences
on foreign
operations - - - (4) (25) - (29) (3) (32)
-------- -------- -------- --------- ----------- --------- -------- --------------- --------
Total
comprehensive
income for
the period - - - 1,519 (25) - 1,494 129 1,623
-------- -------- -------- --------- ----------- --------- -------- --------------- --------
Balance at
30 June 2018 6,008 5,792 151 5,054 521 (521) 17,005 487 17,492
======== ======== ======== ========= =========== ========= ======== =============== ========
For the six months to 30 June 2017 (unaudited)
Share Retained Translation Merger Total Non-controlling Total
Capital earnings Reserve Reserve interests Equity
GBP'000 GBP'000 GBP000s GBP'000 GBP'000 GBP'000 GBP'000
-------- ----------------- ----------- --------- -------- --------------- --------
Balance at 1 January
2017 4,050 2,466 452 (3,750) 3,218 345 3,563
Acquisition of
NCI - (121) - - (121) (88) (209)
Dividends - - - - - (104) (104)
-------- ----------------- ----------- --------- -------- --------------- --------
Total contributions
by and distributions
to owners - (121) - - (121) (192) (313)
Comprehensive income
Profit for the
period - 424 - - 424 105 529
Exchange differences
on foreign operations - - 77 - 77 8 85
-------- ----------------- ----------- --------- -------- --------------- --------
Total comprehensive
income for the
period - 424 77 - 501 113 614
-------- ----------------- ----------- --------- -------- --------------- --------
Balance at 30 June
2017 4,050 2,769 529 (3,750) 3,598 266 3,864
-------- ----------------- ----------- --------- -------- --------------- --------
For the year ended 31 December 2017 (audited)
Share Share Equity Retained Translation Merger Total Non-controlling Total
Capital Premium Reserve earnings Reserve Reserve interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP000s GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- --------- ----------- --------- -------- --------------- --------
Balance
at 1 January
2017 4,050 - - 2,466 452 (3,750) 3,218 345 3,563
Acquisition
of NCI - - - (121) - - (121) (88) (209)
Dividends
Distributions
to owners - - - (350) - - (350) (107) (457)
Share Based
Consideration
on Acquisitions 480 - - - - 2,241 2,721 - 2,721
Share Options
not yet
exercised - - 69 - - - 69 - 69
Issue of
Share Capital 1,392 5,792 - - - - 7,184 - 7,184
-------- -------- -------- --------- ----------- --------- -------- --------------- --------
Total
contributions
and
distribution
to owners 1,872 5,792 69 (471) - 2,241 9,503 (195) 9,308
Comprehensive
income
Profit for
the year - - - 1,540 - - 1,540 245 1,785
Exchange
differences
on foreign
operations - - - - 94 - 94 18 112
Total
comprehensive
income for
the period - - - 1,540 94 - 1,634 263 1,897
-------- -------- -------- --------- ----------- --------- -------- --------------- --------
Balance
at 31
December
2017 5,922 5,792 69 3,535 546 (1,509) 14,355 413 14,768
======== ======== ======== ========= =========== ========= ======== =============== ========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD TO 30 JUNE 2018
General information
The financial information included in this interim statement of
results does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006. The unaudited accounts for
the six month period ended 30 June 2018 have been prepared on a
consistent basis and using the same accounting policies as those
adopted in the financial statements for Xpediator PLC for the year
ended 31 December 2017, except as noted below for new standards
adopted. The statutory accounts of the Xpediator PLC for the year
ended 31 December 2017 are available on the Xpediator Plc website,
www.xpediator.com . The auditors reported on those accounts: their
report was unqualified and did not draw attention to any matters by
way of emphasis.
Basis of preparation
Xpediator Plc (the 'Company') is a company incorporated in
England. The consolidated interim financial statements of the
Company for the six month period ended 30 June 2018 comprise the
Company and its subsidiaries (together referred to as the 'Group').
The interim financial statements have been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the European
Union. They are unaudited but have been reviewed by the Company's
auditor and should be read in conjunction with the consolidated
financial statements of the Group for the year ended 31 December
2017.
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amount of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
During the six months ended 30 June 2018, management also
reassessed its estimates in respect of deferred contingent
consideration and considered the recoverable amount of goodwill and
other intangible assets. Please refer to notes 5 and 9 for further
details.
Merger accounting
On 25 May 2017, Xpediator entered into a share swap agreement
with the ultimate beneficiaries of Delamode Group Holdings Limited,
whereby 4,000,000 new ordinary shares of GBP1.00 each were issued
to the ultimate beneficiaries of the Delamode Group Holdings
Limited in exchange for their shares in Delamode Group Holdings
Limited in the same proportion as their shareholding in Delamode
Group Holdings Limited. The merger method of accounting is used to
consolidate the results of Xpediator and Delamode Group Holdings
Limited and subsidiaries.
Accounting policies
The financial statements have been prepared on the historical
cost basis except for the revaluation of certain financial
instruments that are measured at revalued amounts or fair values at
the end of each reporting period.
Changes in significant accounting policies
The Group has adopted IFRS 15 'Revenue from Contracts with
Customers' and IFRS 9 'Financial Instruments' from 1 January 2018.
Neither standard has a material effect on the Group's financial
statements.
Except for the first time application of IFRS 15 and IFRS 9, the
significant judgements made by management in applying the Group
accounting policies and the key sources of estimation uncertainty
were the same as those applied to the consolidated financial
statements as at and for the year ended 31 December 2017.
Revenue recognition
IFRS 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. It replaced IAS
18 'Revenue', IAS 11 'Construction Contracts' and related
interpretations.
As the effect of the application of IFRS 15 is not material,
further details of the new significant accounting policies will be
set out in the Group's consolidated financial statements as at and
for the year ending 31 December 2018.
Financial instruments
IFRS 9 sets out requirements for recognising and measuring
financial assets, financial liabilities and some contracts to buy
or sell non-financial items. This standard replaces IAS 39
'Financial Instruments: Recognition and Measurement'. The adoption
of IFRS 9 resulted in no adjustments to previously reported
results.
As the effect of the application of IFRS 9 is not material, the
details of the new significant accounting policies will be set out
in the Group's consolidated financial statements as at and for the
year ending 31 December 2018.
There have been no material revisions to the nature and amount
of estimates of amounts reported in prior period except whether the
implementation of IFRS 9 discussed above requires a different
approach to the accounting previously applied. Significant
estimates and judgments that have been required for the
implementation of these new standard are:
-- Estimating the lifetime losses of trade receivables for the
purpose of IFRS 9's expected credit loss model
New or amended EU endorsed accounting standards
Details of new or revised accounting standards, interpretations
or amendments which are effective for periods beginning on or after
1 January 2018 and which are considered to have an impact on the
Group can be found in the annual financial statements for the year
ended 31 December 2017.
IFRS 16 'Leases' is effective 1 January 2019. IFRS 16 will
change lease accounting for lessees under operating leases. Such
agreements will require recognition of an asset, representing the
right to use the leased item, and a liability, representing future
lease payments. Lease costs will be recognised in the form of
depreciation and interest, rather than as an operating cost. The
adoption is likely to have a material impact on the presentation of
the Group's assets and liabilities, mainly due to property leases.
Due to the quantity of leases under review, the Group has not
substantially completed the assessment of lease contracts under the
new accounting standard. Therefore, a quantification of the impact
on the Group's results cannot yet be reliably estimated.
The Group is not expecting any other new standards that would
have a significant impact to the Group.
Accounting for associates
Associates are all entities over which the Group has significant
influence but not control or joint control. This is generally the
case where the group holds between 20% and 50% of the voting
rights. Investment in associates are accounted for using the equity
method of accounting. Under the equity method of accounting, the
investments are initially recognised at cost and adjusted
thereafter to recognise the group's share of the post-acquisition
profits or losses of the investee in profit or loss, and the
group's share of movements in other comprehensive income of the
investee in other comprehensive income. Dividends received or
receivable from associates and joint ventures are recognised as a
reduction in the carrying amount of the investment.
Going concern
The Directors have concluded that it is appropriate that the
financial statements have been prepared on a going concern basis
given the cash balances as at 30 June 2018, and funding facilities
in place across the group, which it does not envisage will be
withdrawn thus there are sufficient funds available to meet its
liabilities as they fall due. The financial statements have
therefore been prepared on a going concern basis.
The directors believe that based on the current budgets and
forecast cash flows, there is sufficient resources to meet its
liabilities as they fall due.
1) Turnover analysis by Country & Segment
Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
----------- ------------------------------------- ------------
United Kingdom 28,839 11,534 32,147
Romania 15,397 11,594 25,739
Lithuania 20,862 15,529 36,167
Bulgaria 8,489 6,372 13,538
Other 5,292 4,034 8,706
----------- ------------------------------------- ------------
Total Income 78,879 49,063 116,297
----------- ------------------------------------- ------------
Unaudited Unaudited Audited
6 months 6 months
to to Year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
----------- ------------------------- -------------
Freight Forwarding
United Kingdom 24,661 8,792 24,952
Romania 6,704 4,702 10,513
Lithuania 20,862 15,529 36,167
Bulgaria 8,489 6,372 13,538
Other 4,645 3,710 8,169
----------- ------------------------- -------------
Total Income Freight Forwarding 65,361 39,105 93,339
----------- ------------------------- -------------
Logistics
United Kingdom 4,178 2,742 7,195
Romania 6,285 4,969 11,181
Total Income Logistics 10,463 7,711 18,376
------- ------ -------
Transport Solutions
Romania 2,408 1,923 4,045
Other 647 324 537
------ ------ ------
Total Income Transport Solutions 3,055 2,247 4,582
------ ------ ------
Total Income 78,879 49,063 116,297
------- -------- --------
2) Segmental Analysis
Types of services from which each reportable segment derives its
revenues
During the period, the Group had three main divisions: Freight
Forwarding, Logistics and Transport Solutions. All revenue is
derived from the provision of services.
-- Freight Forwarding - This division is the core business and
relates to the movement of freight goods across Europe. This
division accounts for the largest proportion of the Group's
business, generating 82.9% of its external revenues contributed in
2018 (H1 2017: 79.9%)
-- Transport Solutions - This division focuses on the reselling
of DKV fuel cards, leasing, ferry crossings and other associated
transport related solutions. This division accounts for 3.9% of the
Group's business in terms of revenue (H1 2017: 4.6%)
-- Logistics - This division provides warehousing and domestic
distribution and generated 13.2% of the Group's external revenues
in 2018 (H1 2017: 15.7%).
Factors that management used to identify the Group's reportable
segments
The Group's reportable segments are strategic business units
that offer different products and services. They are managed
separately because each business requires different technology and
marketing strategies.
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team comprising the Divisional CEOs, the Chief Executive
Officer and the Chief Financial Officer.
No single customer accounted for more than 2% of the Group's
total revenue.
Measurement of operating segment profit or loss, assets and
liabilities
The Group evaluates segmental performance on the basis of profit
or loss from operations calculated in accordance with IFRS.
Inter-segment sales are priced at market rates and on an arm's
length basis, along the same lines as sales to external customers.
This policy was applied consistently throughout the current and
prior period.
Segmental Analysis Freight Logistics Transport Unallocated Total
for the period to 30 Forwarding Solutions
June 2018
2018 2018 2018 2018 2018
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------- ----------- ------------ ---------
Gross Billings 65,361 10,722 67,687 - 143,770
Less recoverable disbursements - - (64,632) - (64,632)
Total revenue 65,361 10,722 3,055 - 79,138
Inter-segmental revenue - (259) - - (259)
------------ ---------- ----------- ------------ ---------
Total revenue from
external customers 65,361 10,463 3,055 - 78,879
Depreciation & amortisation (423) (177) (23) (39) (662)
Segment Profit (excluding
exceptional items) 986 320 1,192 (809) 1,689
Net Finance costs (184)
Exceptional items 656
---------
Profit before income
tax 2,161
=========
Segmental Analysis Freight Logistics Transport Unallocated Total
for the period to 30 Forwarding Solutions
June 2017
2017 2017 2017 2017 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------- ----------- ------------ ---------
Gross Billings 39,105 7,945 59,944 - 106,994
Less Recoverable Disbursements - - (57,697) - (57,697)
Total revenue 39,105 7,945 2,247 - 49,297
Inter-segmental revenue - (234) - - (234)
------------ ---------- ----------- ------------ ---------
Total revenue from
external customers 39,105 7,711 2,247 - 49,063
Depreciation & amortisation 54 227 18 5 304
Segment profit (excluding
exceptional items) 688 221 1,080 (651) 1,338
Net finance costs (296)
Exceptional items (331)
---------
Profit before income
tax 711
=========
Segmental Analysis Freight Logistics Transport Unallocated Total
for the year to 31 Forwarding Solutions
December 2017
2017 2017 2017 2017 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------- ----------- ------------ ----------
Gross Billings 93,339 18,898 119,833 - 232,070
Less recoverable disbursements - - (115,251) - (115,251)
Total revenue 93,339 18,898 4,582 - 116,819
Inter-segmental revenue - (522) - - (522)
------------ ---------- ----------- ------------ ----------
Total revenue from
external customers 93,339 18,376 4,582 - 116,297
Depreciation & amortisation (235) (530) (38) (2) (805)
Segment profit (excluding
exceptional items) 2,434 932 1,952 (1,317) 4,001
Net finance costs (653)
Exceptional items (912)
----------
Profit before income
tax 2,436
==========
3) Earnings per share
Unaudited Unaudited
6 months
6 months to to Year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
------------ ---------- ------------
Weighted average number of shares
- basic 117,651 84,296 94,004
Weighted average number of shares
- diluted 119,637 84,296 94,328
Profit for the period attributable
to equity holders of the company 1,523 424 1,540
Profit for the period attributable
to equity holders of the company
excluding exceptional items (see
note 11) 1,245 931 3,077
Earnings per share - basic (pence) 1.29 0.50 1.64
Earnings per share - diluted
(pence) 1.27 0.50 1.63
Earnings per share - basic (pence)
(excluding exceptional items)* 1.06 1.10 3.27
Earnings per share - diluted
(pence) (excluding exceptional
items)* 1.04 1.10 3.26
*Earnings per share adjusted for exceptional costs (see note 11)
4) Dividends
The directors are declaring an interim dividend of 0.42 pence (H1
2017: 0.347 pence) per share totalling GBP558,000 (H1 2017: GBP350,000)
to be paid on 26 October 2018. This dividend has not been accrued
in the consolidated statement of Financial Position.
5) Intangible Asset
For the period from 1 January Customer
2018 to 30 June 2018 (unaudited) related Licences Goodwill Total
Cost GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- --------
At 1 January 2018 5,689 2,675 7,551 15,915
Additions - 49 - 49
Acquired through business combinations 938 - 531 1,469
Transfer between categories (19) 19 - -
Exchange differences - 25 - 25
--------- --------- --------- --------
At 30 June 2018 6,608 2,768 8,082 17,458
Amortisation
At 1 January 2018 330 417 - 747
Amortisation for the period 361 64 - 425
Impairment - - 1,845 1,845
Exchange differences - 2 - 2
--------- --------- --------- --------
At 30 June 2018 691 483 1,845 3,019
Net Book Value at 30 June 2018 5,917 2,285 6,237 14,439
========= ========= ========= ========
For the period from 1 January Customer
2017 to 30 June 2017 (unaudited) related Licences Goodwill Total
Cost GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- --------
At 1 January 2017 - 2,453 682 3,135
Additions - 38 - 38
Acquired through business combinations 2,872 - 2,258 5,130
Exchange differences - 139 16 155
--------- --------- --------- --------
At 30 June 2017 2,872 2,630 2,956 8,458
Amortisation
At 1 January 2017 - 243 - 243
Amortisation for the period 88 57 - 145
Exchange differences - 73 - 73
--------- --------- --------- --------
At 30 June 2017 88 373 - 461
Net Book Value at 30 June 2017 2,784 2,257 2,956 7,997
========= ========= ========= ========
For the period from 1 January Customer
2017 to 31(st) December 2017 (audited) related Licences Goodwill Total
Cost GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2017 - 2,453 682 3,135
Additions 17 30 - 47
Disposals - (6) - (6)
Acquired through business combinations 5,670 - 6,829 12,499
Exchange differences 2 198 40 240
--------- --------- --------- --------
At 31 December 2017 5,689 2,675 7,551 15,915
Amortisation
At 1 January 2017 - 243 - 243
Amortisation for the period 330 107 - 437
Disposals - (6) - (6)
Exchange differences - 73 - 73
--------- --------- --------- --------
At 31 December 2017 330 417 - 747
--------- --------- --------- --------
Net Book Value at 31 December
2017 5,359 2,258 7,551 15,168
========= ========= ========= ========
The goodwill included in the above note, relates to the
acquisitions of Pallet Express Srl in January 2016, Easy Managed
Transport in March 2017, Benfleet Forwarding Limited in October
2017, Regional Express Limited in November 2017 and Anglia
Forwarding Group Limited in June 2018. This is the total value of
intangible assets with an indefinite useful life allocated to each
respective cash generating unit.
The Group is required to test, on an annual basis, whether
goodwill has suffered any impairment. The recoverable amount is
determined based on value in use calculations. The use of this
method requires the estimation of future cash flows and the
determination of a discount rate in order to calculate the present
value of the cash flows.
Impairment of Goodwill on Benfleet Forwarding Limited
Early 2018 increased customs security checks across the EU
started to affect the Benfleet activity from the Far East. This
resulted in those customers suspending sending containers to the
UK. This has significantly impacted on the profitability of
Benfleet and its projected revenues.
As a result of this reduced profitability the Group has carried
out an impairment review on Benfleet. The Board has prepared
forecast of future revenue flows based on its best estimate and on
discussions with certain main customers.
These cash flows have then been sensitised and probabilities
applied, taking into account aspects such as: the likelihood of the
revenue streams coming back on line; an estimate of the level of
activity which will recommence; the expected timing of the start of
the revenue streams; and the margins which will be generated from
this activity.
In deriving the probabilities used to calculate the operating
revenues, the board has taken into account the current discussions
with customers and known factors, including the fact that the
business has recommenced post 30 June 2018, albeit at significantly
lower levels to that achieved in 2017.
Based on the Board expectations and future cash flow, the Group
has identified that there is an impairment required of GBP1.845
million to the goodwill recognised on acquisition of the
company.
In valuing the recoverable amount, a growth assumption of 2.5%
and discount rate of 16.99% were used and applied to updated
forecast performance for the business. The impairment charge has
been recognised in the consolidated income statement within the
administration expense line.
6) Property, plant and equipment
Fixtures,
For the period from 1 January Freehold fittings Computer
2018 to 30 June 2018 (unaudited) Property and equipment Motor Equipment Equipment Total
GBP000 GBP000 GBP000 GBP000 GBP000
---------- --------------- ---------------- ------------ -------
Cost
At 1 January 2018 142 972 840 1,593 3,547
Additions - 93 32 70 195
Additions acquired with
subsidiary 61 111 5 - 177
Disposals - (5) (47) (27) (79)
Exchange differences (1) (5) (4) (3) (13)
---------- --------------- ---------------- ------------ -------
At 30 June 2018 202 1,166 826 1,633 3,827
---------- --------------- ---------------- ------------ -------
Depreciation
At 1 January 2018 3 628 499 817 1,947
Charge for the period 2 76 50 109 237
Transfers between categories - (131) - 131 -
Eliminated on disposal - (1) (45) (18) (64)
Exchange differences - (2) (2) (2) (6)
---------- --------------- ---------------- ------------ -------
At 30 June 2018 5 570 502 1,037 2,114
Net book value 30 June 2018 197 596 324 596 1,713
========== =============== ================ ============ =======
Fixtures,
For the period from 1 January Freehold fittings Computer
2017 to 30 June 2017 (unaudited) Property and equipment Motor Equipment Equipment Total
GBP000 GBP000 GBP000 GBP000 GBP000
---------- --------------- ---------------- ------------ -------
Cost
At 1 January 2017 122 921 759 1,058 2,860
Additions - 93 74 171 338
Additions acquired with
subsidiary 18 1 4 - 23
Disposals - (2) (67) (9) (78)
Exchange differences 3 7 6 7 23
---------- --------------- ---------------- ------------ -------
At 30 June 2017 143 1,020 776 1,227 3,166
---------- --------------- ---------------- ------------ -------
Depreciation
At 1 January 2017 - 508 504 662 1,674
Charge for the period - 58 36 65 159
Eliminated on disposal - (1) (42) (3) (46)
Exchange differences - 3 4 4 11
---------- --------------- ---------------- ------------ -------
At 30 June 2017 - 568 502 728 1,798
Net book value 30 June 2017 143 452 274 499 1,368
========== =============== ================ ============ =======
For the period from 1 January Fixtures,
2017 to 31 December 2017 Freehold fittings Computer
(audited) Property and equipment Motor Equipment Equipment Total
GBP000 GBP000 GBP000 GBP000 GBP000
---------- --------------- ---------------- ------------ -------
Cost
At 1 January 2017 122 921 759 1,058 2,860
Additions 2 165 224 380 771
Addition with subsidiary 15 30 19 9 73
Disposals - (2) (176) (19) (197)
Transfer between categories - (154) - 154 -
Exchange differences 3 12 14 11 40
At 31 December 2017 142 972 840 1,593 3,547
---------- --------------- ---------------- ------------ -------
Depreciation
At 1 January 2017 - 508 504 662 1,674
Charge for the period 3 117 89 159 368
Eliminated on disposal - (2) (103) (12) (117)
Exchange differences - 5 9 8 22
---------- --------------- ---------------- ------------ -------
At 31 December 2017 3 628 499 817 1,947
---------- --------------- ---------------- ------------ -------
Net book value
---------- --------------- ---------------- ------------ -------
At 31 December 2017 139 344 341 776 1,600
========== =============== ================ ============ =======
7) Share Capital
Unaudited Unaudited
Audited 31
30 June 30 June December
2018 2017 2017
GBP000 GBP000 GBP000
---------- ---------- -----------
Allotted, issued and fully paid
Ordinary shares of GBP0.05p each
- Number 119,158 80,000 117,431
Ordinary shares of GBP0.05p each
- Value 5,958 4,000 5,872
Deferred Shares of GBP1 each
- number 50 50 50
Total Share Capital 6,008 4,050 5,922
On 8 June 2018, the Company issued 1,727,694 ordinary shares of
5p each in the Company as part of the agreed deferred consideration
for the acquisition of Easy Managed Transport. The total value of
this transaction was GBP1,074,625, which was settled by the
issuance of the new shares.
The deferred shares are non-voting shares and have no rights to
any distribution or dividend payments.
8) Non-Controlling Interests
Non-Controlling interests held in the group are as follows:
Unaudited Unaudited Audited 30 June 30 June 31 December
2018 2017 2017
Delamode Baltics UAB 20.0% 20.0% 20.0%
Delamode Estonia OÜ 20.0% 20.0% 20.0%
Delamode Bulgaria EOOD 10.0% 10.0% 10.0%
Delamode Service Financare IFN 0.05% 0.05% 0.05%
Delamode Distribution UK Limited 49.0% 49.0% 49.0%
9) Deferred Consideration
As part of the original sale and purchase agreement (SPA) the
consideration due to the original vendors of Benfleet Forwarding
Limited was based on an initial payment plus a payment for deferred
consideration linked to the profit generated by the company during
the earn out period. In addition to this, the SPA included a
clawback clause whereby the original vendors would be required to
repay some of the initial consideration if the target profit was
not achieved, thus ensuring that the total consideration payable is
directly linked to the profitability of the entity acquired.
Given the reduced profitability of Benfleet Forwarding Limited,
the Group has performed a re-estimation of the deferred
consideration payable at balance date. As a result of this
exercise, the Group has derecognised the deferred consideration
payable of GBP624k which was originally recognised on acquisition
of Benfleet, which was the fair value measured at 31 December
2017.
Consequently and in accordance with the SPA, the group has
recognised a deferred consideration receivable which represent
amount owed by vendors. The receivable was measured at fair value
with an expected repayment date of December 2020. Using a discount
rate of 4.5% the carrying value of the deferred consideration
receivable was estimated to be GBP1.97 million.
Both the release of the deferred consideration of GBP624k and
the recognition of the receivable from the vendors of GBP1.97
million has been recognised within the administration expenses
through the Income Statement.
10) Loans Unaudited Unaudited Audited
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
---------- ---------- ------------
Current;
Finance Leases 71 35 43
Other Loans 3,654 5,622 2,502
---------- ---------- ------------
3,725 5,657 2,545
Non - Current;
Finance Leases 1-2 year 53 62 64
Finance Leases 2-5 Years 38 - 24
Other Loans;
Loans 1- 2 years 310 296 651
Loans 2- 5 years 1,029 971 1,006
Loans due after five years repayable
by instalments 1,380 1,755 1,564
---------- ---------- ------------
2,810 3,084 3,309
The Finance leases are secured against the assets to which the
finance relates. Bank loans and overdrafts are secured by a fixed
and floating charge over the Group's assets.
11) Exceptional Costs
The Group incurred non-recurring costs of GBP91,000 relating to
the acquisitions of Anglia Forwarding Group Limited and Import
Services Limited (see note 12).
The exceptional costs relating to Benfleet amounting to GBP747k
net credit as disclosed in the table below is broken down as
follows:
Impairment of goodwill (see note 5) GBP1,845k
Release of deferred consideration payable (see note 9) GBP(624k)
Recognition of receivable from vendors of Benfleet (see note 9) GBP(1,968)k
Total GBP(747)k
Adjusted earnings per share has been calculated as follows:-
Unaudited
Unaudited 6 6 months Audited
months to to Year to
30 June 30 June 31 December
2018 2017 2017
GBP000 GBP000 GBP000
------------ ---------- ------------
Profit for the Period Attributable
to the Owners of the Parent 1,523 424 1,540
Exceptional Costs - Acquisition
Costs 91 331 912
Exceptional Costs - Benfleet (747) - -
Amortisation relating to acquisitions 361 88 330
Non-Cash Interest 17 88 295
------------ ---------- ------------
Adjusted Profit for the Period 1,245 931 3,077
------------ ---------- ------------
12) Post balance sheet events
On 6 July 2018, the Group raised a further GBP7.0m before
expenses by issuing an additional 10,000,000 ordinary shares of 5
pence each in the Company. Following this fund raising, the Group
acquired Import Services Limited (ISL), a contract logistics and
warehousing business based in Southampton, UK. The acquisition
consideration comprised an initial payment of GBP9.0m, being
GBP6.0m in cash and GBP3.0m in Xpediator shares and performance
based deferred consideration of up to GBP3.0m payable in two parts
on 30 June 2019 and 30 June 2020.
13) Business combinations
Anglia Forwarding Group Limited
On 4 June 2018, the Group acquired 100% of the issued share
capital of Anglia Forwarding Group Limited (Anglia), an
international freight forwarding and courier business.
The principal reason for this acquisition was to enable the
Group to consolidate and enhance their UK freight forwarding
distribution services and to allow good cross-selling
opportunities, especially within the customs clearance areas.
The total consideration payable comprised cash on completion of
GBP1.5m and Cash equal to GBP390k based on the net working capital
adjustment on completion earn-out payments payable over two years.
The deferred consideration is calculated as follows, both of which
are subject to a maximum aggregate payment of GBP2.0m:
-- 5 times Anglia's operating profit before tax less target
profit of GBP0.75m multiplied by 50% in respect of the First
Earn-Out Year, with an amount not greater than GBP1.0m.
-- 5 times the Company's operating profit before tax less target
profit of GBP0.75m multiplied by 50% in respect of the Second
Earn-Out Year, with an amount not greater than GBP1.0m.
Fair Value assessment
As part of the fair value assessment of the Intangible assets of
Anglia, it was identified that the only intangible asset category
to apply, is the customer related intangible assets. The fair value
calculation of customer related intangible asset was determined by
using the income approach based on the expected future cash flows.
This was then discounted to determine the present value.
The weighted average cost of capital used in determining the
present value, was 12.0%, which reflected the business and market
risks factors.
The outcome of the fair value calculation was to derive a
customer related intangible asset with a value of GBP938,000.
Economic useful life
When determining the economic useful life of the customer
relationships the historical length of relationships with existing
customers and those reported by listed companies in the sector was
considered as well as an annual attrition rate of 10.0%.
Based on these factors, it was concluded that the useful
economic life for customer relationships in relation to Anglia
would be up to 10 years.
Deferred tax
As a result of the creation of the customer related intangible
asset, there is a deferred tax liability, which was calculated as
the sum of the fair values of the intangible assets multiplied by
the tax rate. An average long-term tax rate of 17.0% was used as to
determine this. This resulted in a deferred tax liability of
GBP160,000.
Deferred Consideration
The deferred consideration consists of the
payment relating to the earn out period and;
amount by which the Completion Net Asset exceeds Target Net
Assets
In determining the present value of the earn out payment, the
first payment which is due in May 2019 was calculated using a cost
of capital of 12.0%.
Using the forecasted results for the respective periods the
present value of the deferred consideration relating to the earn
out was calculated to be GBP797,000.
The completion net assets exceeded target net assets by
GBP390,000, however the completion accounts are currently being
agreed and the final consideration payable may be amended. However,
it is not thought that this will be material.
Goodwill
When determining the goodwill arising on the acquisition the
following calculations were used.
Purchase Consideration GBP'000
Initial Consideration 1,500
Net Cash Adjustment 390
P.V. of Deferred Consideration 797
========
Total Consideration for Equity 2,687
========
Allocation of Assets and Liabilities Acquired
Intangible Assets
Customer-related Intangible Assets 938
Other Assets
Current Assets 3,644
Fixed Assets 177
Non-Current Assets 134
Liabilities
Assumed Liabilities (2,577)
Deferred Tax Liability for Intangible
Assets (160)
Goodwill 531
========
The goodwill recognised will not be deductible for tax
purposes.
Since the acquisition, Anglia has contributed GBP1,563,000 to
Group revenue and GBP29,000 to Group Profit.
International Cargo Centre (ICC)
As part of the acquisition of Anglia, the Group disposed of 60%
of the share capital of ICC on 4 June 2018. As the Group now owns
40% of the voting shares and does not have control over Board
decisions, then the Group will account for this as an
associate.
Anglia Forwarding Group received consideration of GBP83,000 from
the sale and made a profit on disposal of GBPnil.
INDEPENT REVIEW REPORT TO XPEDIATOR PLC
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2018 which comprises the consolidated
income statement, the consolidated statement of comprehensive
income, the consolidated statement of financial position, the
consolidated statement of cash flows, the consolidated statement of
changes in equity and the related notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the company's annual
accounts having regard to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Our report has been prepared in accordance with the terms of our
engagement to assist the company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on AIM and for no other purpose. No person is entitled to rely on
this report unless such a person is a person entitled to rely upon
this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity", issued by the Financial Reporting Council for use in the
United Kingdom. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2018 is not prepared, in all material respects, in accordance
with the rules of the London Stock Exchange for companies trading
securities on AIM.
BDO LLP
Chartered Accountants
London
United Kingdom
Date
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EALNDASFPEFF
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September 24, 2018 02:01 ET (06:01 GMT)
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