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Aquila Services Group PLC  -  AQSG   

Half-year Report

Released 07:00 30-Nov-2016

RNS Number : 4791Q
Aquila Services Group PLC
30 November 2016
 

For Immediate Release

30 November 2016

 

Aquila Services Group plc

Unaudited Interim Results for the six months ended 30 September 2016

 

 

Aquila Services Group plc (''the Company''), previously General Industries plc, is the holding company for Altair Consultancy & Advisory Services Ltd (''Altair'') and Murja Ltd ("Murja") which form the Group (''the Group'').

The Group's particular expertise is in the provision, financing and management of affordable housing by housing associations, local authorities, government agencies and other non-profit organisations as well as high level business advice to the property sector.

Results Highlights

 

 

6 months to 30 September 2016 (unaudited)

6 months to 30 September 2015 (unaudited)

Year ended 31 March 2016 (audited)

 

£000s

£000s

£000s

Revenue

2,796

2,261

4,746

Gross Profit

673

464

1,288

Operating Profit

239

205

290

EPS

(before deemed cost of listing)

0.53p

0.66p

0.61p

Declared Dividend per Share

0.24p

0.22p

0.66p

Cash Balances

2,173

1,974

2,552

 

For further information please visit www.aquilaservicesgroup.co.uk. or contact:

 

Aquila Services Group plc

Fiona Underwood

Tel: 020 7934 0175

 

Beaumont Cornish Limited, Financial Adviser

Roland Cornish

Tel: 020 7628 3396

 

 

 

Chairman's Statement and Interim Management Report

For the six months ended 30 September 2016

I am delighted to announce the half year results for the Group, which has continued to perform strongly.

Altair, a leading provider of consultancy services to the property sector, specifically the provision of affordable housing, has grown organically in the first half in response to an increased order book.  Expansion has been focused on the North of England to enable Altair to better serve its clients in the Midlands, Northern England and Scotland.

Murja, acquired in December 2015, has seen further opportunities arise, particularly in Northern Ireland and the Republic of Ireland, and as a result has increased its consulting capacity.

We are also seeing both subsidiaries benefitting from the expanded client base.

Trading results

The Group saw a 23% increase in turnover for the 6 months to 30 September 2016.  Gross profit rose to £673k (September 2015: £464k, March 2016: £1,288k) with operating profit of £307k (September 2015: £250k, March 2016: £545k).  Operating profits took into account investment in new staff for Altair and Murja and, as required under IFRS 2, before the share option charge as set out below.

The comparison between this reporting period, the year-end position and the previous year's half-year results for the Group are as follows:

 

6 months to 30 September 2016 (unaudited)

6 months to 30 September 2015 (unaudited)

Year ended 31 March 2016 (audited)

 

£000s

£000s

£000s

Turnover

2,796

2,261

4,746

Gross profit

673

464

1,288

Operating profit (before share option charge)

307

250

545

Share option charge

68

45

255

Operating profit (after share option charge)

239

205

290

 

The Group is in a very strong net asset position, with over £2.17m in cash held at 30 September 2016.

Dividend

The Directors propose to declare an interim dividend of 0.24p per share which will be paid on 19 December 2016 to shareholders on the register at 9 December 2016.

The Company is committed to a progressive dividend policy to enhance shareholder value.

Business Review

The underlying business remains strong and there has been continued growth of the client base in Altair's consultancy business.  The acquisition of Murja has expanded our offering into the education sector and we are beginning to see the opportunities of the treasury offering complementing Altair's business activities within the housing sector.  We are also pleased that new projects are being won both in the UK and Republic of Ireland by Murja.

Altair has invested in and expanded its consultancy capacity through recruitment of new consultants focusing on increasing its national coverage and developing new products and services to reflect the changing operational and political environment of our clients.  These new products have provided opportunities to bid for larger contracts and, as a consequence, has extended the consultancy pipeline.  The core consultancy and interim business remains strong and the client base continues to grow in number and range.

Murja has similarly expanded its specialist treasury management services.  A significant number of clients are on retained contracts and additional fees are secured once specific projects have been completed.  During the six months under review, a number of these specific projects have commenced with fees expected to accrue during the next twelve months.

Risk and Uncertainties

The Directors do not consider that the principal risks and uncertainties have changed since the publication of the annual report for the year ended 31 March 2016, which contains a detailed explanation of the risks relevant to the Group on page 6, and is available at:

http://aquilaservicesgroup.co.uk/wp-content/uploads/2016/07/General-Industries-plc-2016-Accounts.pdf

Outlook

The Group is aware of the varied and changing policy landscape brought about by the impact of welfare reform, reducing government grants for home-ownership, further devolved funding and decision making to local authorities.

The Government's Autumn Statement has confirmed new money for the affordable homes programme, with flexibility of tenure which is good news for the housing sector.  There is also encouragement for new building and a raft of housing policies relating to right to buy and welfare reform.

A forthcoming housing White Paper will provide more detail, but will almost certainly involve housing associations, local authorities and traditional housebuilders.  The enhanced spending on infrastructure announced by the Chancellor is welcomed.

These on-going changes mean that clients will continue to need services that the Group supplies and the provision of value-for-money, high quality services continues to be fundamental to the Group's offering to the market.

The Group continues to look at opportunities to expand its consultancy base through acquisition.  Initial discussions have been held with a number of parties.  Most of these businesses are privately owned and it is hoped that they will be attracted to the benefits of joining a well-established and listed group.

 

Jeff Zitron

Chairman

30 November 2016

 

 

Directors' Report

Substantial Shareholdings

As at 30 September 2016, the Company was aware of the following notifiable interests in its voting rights:

 

Number of

Percentage of

Nature of

 

Ordinary shares

Voting rights

holding

Richard Wollenberg*

3,808,406

11.7%

Direct

Steven Douglas

3,279,440

10.1%

Direct

Chris Wood

3,279,440

10.1%

Direct

Susan Kane

3,279,440

10.1%

Direct

Fiona Underwood

3,279,440

10.1%

Direct

Derek Joseph

2,870,403

8.8%

Direct

Jeffrey Zitron

2,798,403

8.8%

Direct

Cardiff Property plc**

1,000,000

3.1%

Direct

 

*Includes shares held by immediate family members of Richard Wollenberg

**Richard Wollenberg holds 44.17% of the issued share capital and voting rights of Cardiff Property plc.

The Company is not aware of any changes to the above holdings between 30 September 2016 and the date of this report.

Related Party Transactions

During the 6 months to 30 September 2016, the non-executive directors were paid fees of £6,139 (6 months to September 2015: £2,250)

During the 6 months to 30 September 2016, the Group charged £12,030 (6 months to September 2015: £12,030) to DMJ Consultancy Services Limited for office costs and secretarial services, a company in which Derek Joseph is a director and shareholder.

Remuneration of Directors and key management personnel

 

The remuneration of the directors, who are the key management personnel of the Group, is set out below.

 

6 months to 30 September 2016 (unaudited)

6 months to 30 September 2015 (unaudited)

Year ended 31 March 2016 (audited)

 

 

 

 

 

 

Short-term employee benefits

268,637

230,000

586,283

 

Share-based payments

39,452

28,683

212,116

 

Post-retirement benefits

6,000

10,552

22,934

 

 

 

 

 

 

 

314,089

269,235

821,333

 

           
 

 

Corporate Governance

The UK Corporate Governance Code (September 2014) (the code), as appended to the listing rules, sets out Principles of Good Corporate governance and code provisions which are applicable to listed companies incorporated in the United Kingdom.  As a standard listed company, the Company is not subject to the UK Corporate Governance Code but the Board recognises the value of applying the principles of the code where appropriate and proportionate and endeavours to do so where practicable.

Responsibility Statement

The Directors, being Jeffrey Curtis Zitron, Steven Franklyn Douglas, Fiona May Underwood, Susan Margaret Kane, Derek Maurice Joseph and John Richard Wollenberg, are responsible for preparing the Unaudited Interim Condensed Consolidated Financial Statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority ('DTR') and with International Accounting Standard 34 on Interim Financial reporting (IAS34).  The Directors confirm that, to the best of their knowledge, this unaudited interim condensed consolidated report has been prepared in accordance with IAS34 as adopted by the European Union.  The interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 namely:

§ an indication of key events occurred during the period and their impact on the unaudited interim condensed consolidated financial statements and a description of the principal risks and uncertainties for the second half of the financial year, and

§ related party transactions that have taken place during the period and that have materially affected the financial position or the performance of the business during that period.

 

Susan Kane

Director

30 November 2016

 

 

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 September 2016

 

 

Six months to 30 September 2016

Six months to 30 September 2015

Year ended

31 March

2016

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

 

 

 

 

Revenue

2,795,959

2,261,202

4,746,144

Cost of sales

(2,123,315)

(1,797,636)

(3,458,532)

 

 

 

 

Gross profit

672,644

463,566

1,287,612

 

 

 

 

Administrative expenses

(434,100)

(258,403)

(997,786)

 

 

 

 

Operating profit

238,544

205,163

289,826

 

 

 

 

Deemed cost of listing

-

(3,104,527)

(3,104,527)

Finance income

2,507

305

1,713

 

 

 

 

Profit/(loss) before taxation

241,051

(2,899,059)

(2,812,988)

 

 

 

 

Taxation

(69,756)

(50,074)

(124,319)

 

 

 

 

Profit/(loss) and total comprehensive income/(loss) for the period

171,295

(2,949,133)

(2,937,307)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings/(loss) per share attributable to equity shareholders

 

 

 

 

 

 

 

Weighted average number of shares:

 

 

 

-     Basic

32,615,625

23,449,223

27,566,749

-     Diluted

36,916,490

23,449,223

27,566,749

 

 

 

 

Basic earnings/(loss) per share

0.53p

(12.58p)

(10.66p)

Diluted earnings/(loss) per share

0.46p

(12.58p)

(10.66p)

 

 

 

 

 

 

 

Condensed Consolidated Statement of Financial Position

As at 30 September 2016

 

 

30 September 2016

30 September 2015

31 March

2016

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

Non-current assets

 

 

 

Intangible assets

317,688

-

317,688

Property, plant and equipment

15,936

5,494

14,654

 

 

 

 

 

333,624

5,494

332,342

 

 

 

 

Current assets

 

 

 

Trade and other receivables

1,358,670

1,159,457

1,158,836

Deferred tax assets

3,774

-

11,671

Cash and cash equivalents

2,173,626

1,974,234

2,552,642

 

 

 

 

 

3,536,070

3,133,691

3,723,149

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

930,663

969,583

1,276,501

Corporation tax

228,628

159,374

166,769

 

 

 

 

 

1,159,291

1,128,957

1,443,270

 

 

 

 

Net Current assets

2,376,779

2,004,734

2,279,879

 

 

 

 

Net assets

2,710,403

2,010,228

2,612,221

 

 

 

 

 

 

 

 

Equity and Liabilities

 

 

 

 

 

 

 

Share capital

1,632,550

1,575,000

1,630,434

Share premium account

533,235

464,960

533,235

Reverse acquisition reserve

(4,771,473)

(4,786,176)

(4,771,473)

Merger relief reserve

7,184,334

6,890,000

7,184,334

Share-based payment reserve

342,989

56,825

281,586

Accumulated losses

(2,211,232)

(2,190,381)

(2,245,895)

 

 

 

 

Equity attributable to owners of the parent

2,710,403

2,010,228

2,612,221

 

 

 

 

 

Condensed Consolidated Statement of Changes in Equity

 

Share capital

Share premium account

Reverse acquisition reserve

Merger relief reserve

Share based payments reserve

Retained profits/

(Accumulated)

losses

Total equity

 

£

£

£

£

£

£

£

 

 

 

 

 

 

 

 

As at 1 April 2015

515,000

464,960

(852,336)

-

11,923 

758,752

898,299

 

 

 

 

 

 

 

 

Group reconstruction

1,060,000

-

(3,933,840)

6,890,000

-

-

4,016,160

Share based payment

-

-

-

-

44,902

-

44,902

Loss for the period

-

-

-

-

-

(2,949,133)

(2,949,133)

 

 

 

 

 

 

 

 

As at 30 September 2015

1,575,000

464,960

(4,786,176)

6,890,000

56,825

(2,190,381)

2,010,228

 

 

 

 

 

 

 

 

Issue of shares

55,434

68,275

-

294,334

-

-

418,043

Group reconstruction

-

-

14,703

-

-

-

14,703

Share based payment

-

-

-

-

226,721

-

226,721

Transfer on exercise of options

-

-

-

-

(1,960)

1,960

-

Profit for the period

-

-

-

-

-

11,826

11.826

Dividend

-

-

-

-

-

(69,300)

(69,300)

 

 

 

 

 

 

 

 

As at 1 April 2016

1,630,434

533,235

(4,771,473)

7,184,334

281,586

(2,245,895)

2,612,221

 

 

 

 

 

 

 

 

Issue of shares

2,116

-

-

-

-

-

2,116

Share based payment

-

-

-

-

68,249

-

68,249

Transfer on exercise of options

-

-

-

-

(6,846)

6,846

-

Profit for the period

-

-

-

-

-

171,295

171,295

Dividend

-

-

-

-

-

(143,478)

(143,478)

 

 

 

 

 

 

 

 

As at 30 September 2016

1,632,550

533,235

(4,771,473)

7,184,334

342,989

(2,211,232)

2,710,403

 

 

Condensed Consolidated Statement of Cash Flows

For the six months ended 30 September 2016

 

 

Six months to 30 September

Six months to 30 September

Year ended

31 March

 

2016

2015

2016

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

Cash flow from operating activities

 

 

 

Profit/(loss) for the period

171,295

(2,949,133)

(2,937,307)

Finance income received

(2,507)

(305)

(1,713)

Income tax expense

69,756

50,074

124,319

Share option charge

68,249

44,902

254,606

Deemed cost of listing

-

3,104,527

3,104,527

Depreciation

4,050

-

5,457

 

 

 

 

Operating cash flows before movement in working capital

310,843

250,065

549,889

 

 

 

 

Increase in trade and other receivables

(199,834)

(110,305)

(76,254)

(Decrease)/increase in trade and other payables

(345,838)

(188,924)

99,878

 

 

 

 

Cash (used in)/generated by operations

(234,829)

(49,164)

573,513

 

 

 

 

Taxation paid

-

(34,443)

(179,445)

 

 

 

 

Net cash flow from operating activities

(234,829)

(83,607)

394,068

 

 

 

 

Cash flow from investing activities

 

 

 

Interest received

2,507

305

1,713

Cash acquired on reverse acquisition

-

795,690

795,690

Cash acquired on purchase of subsidiary

-

-

785,262

Purchase of subsidiary

-

-

(899,696)

Purchase of property, plant and equipment

(5,332)

(5,494)

(16,344)

Proceeds from disposal of investments

-

-

207,834

 

 

 

 

Net cash flow from investing activities

(2,825)

790,501

874,459

 

 

 

 

Cash flow from financing activities

 

 

 

Proceeds of share issue

2,116

153,381

239,456

Dividends paid

(143,478)

-

(69,300)

 

 

 

 

Net cash flow from financing activities

(141,362)

153,381

170,156

 

 

 

 

Net increase in cash and cash equivalents

(379,016)

860,275

1,438,683

 

 

 

 

Cash and cash equivalents at beginning of the period

2,552,642

1,113,959

1,113,959

 

 

 

 

Cash and cash equivalents at end of the period

2,173,626

1,974,234

2,552,642

 

 

 

 

 

 

 

Notes to the Condensed set of Financial Statements

for the six months ended 30 September 2016

1.   General information

The Company and its subsidiaries (together ''the Group'') are a major provider of consultancy services to organisations that develop, fund or manage affordable housing.

The Company is a public limited company domiciled in the United Kingdom and incorporated under registered number 08988813 in England and Wales.  The Company's registered office is Tempus Wharf, 29a Bermondsey Wall West, London, SE16 4SA.

The Company changed its name from General Industries plc to Aquila Services Group plc on 30 August 2016.

2.   Basis of preparation

The unaudited condensed consolidated interim financial statements of the Group have been prepared on the basis of the accounting policies, presentation, methods of computation and estimation techniques used in the preparation of the audited accounts for the period ended 31 March 2016 and expected to be adopted in the financial information by the Company in preparing its annual report for the year ending 31 March 2017.

This interim consolidated financial information for the six months ended 30 September 2016 has been prepared in accordance with IAS 34, 'Interim financial reporting'.  This interim consolidated financial information is not the Group's statutory financial statements and should be read in conjunction with the annual financial statements for the year ended 31 March 2016, which have been prepared in accordance with International Financial Reporting Standard (IFRS) and have been delivered to the Registrar of Companies.  The auditors have reported on those accounts; their report was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis of matter without qualifying their report and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

The interim consolidated financial information for the six months ended 30 September 2016 is unaudited.  In the opinion of the Directors, the interim consolidated financial information presents fairly the financial position, and results from operations and cash flows for the period.

The Directors have made an assessment of the Group's ability to continue as a going concern and are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future.  The Group, therefore, continues to adopt the going concern basis in preparing its consolidated financial statements.

The financial statements are presented in sterling, which is the Group's functional currency as the UK is the primary environment in which it operates.

 

3.   Segmental analysis

The Directors are of the opinion that the business of the Group is in a single activity.  Nearly all business is conducted in sterling and within the UK.  Some fees are received in Euros and US Dollars but in the director's opinion these amounts are not significant and any changes in exchange rates would not have a material impact on the Group.

4.   Share capital

The Company has one class of share in issue being ordinary shares with a par value of 5p.

Allotted, issued and called up ordinary shares of £0.05 each:

 

 

Number

£

 

 

 

 

As at 1 April 2015

 

10,300,000

515,000

Issued during the period

 

21,200,000

1,060,000

 

 

 

 

As at 30 September 2015

 

31,500,000

1,575,000

Issued during the period

 

1,108,688

55,434

 

 

 

 

As at 31 March 2016

 

32,608,688

1,630,434

Issued during the period

 

42,315

2,116

 

 

 

 

As at 30 September 2016

 

32,651,003

1,632,550

 

 

 

 

 

As at 1 April 2016, 4,300,815 options were held by Directors and employees of the group.

On 24 June 2016, 500,000 options were issued to employees of Altair, of these 10,000 were returned by an employee who left the business.

On 4 July 2016, 20,000 options were issued to employees of Altair.

On 31 August 2016, 42,315 share options were exercised at an exercise price of 5p each.

As at 30 September 2016 a total of 4,768,550 options were held by Directors and employees of the group.

Option exercise price are in a range of 5p to 29.5p.

5.   Going concern

The Group has sufficient financial resources to enable it to continue its operational activities for the foreseeable future.  Accordingly, the Directors consider it appropriate to adopt the going concern basis in preparing these interim accounts.

6.   Dividend

An interim dividend of 0.24p will be paid on 19 December 2016 to shareholders on the register at 9 December 2016 at a cost of £78,362.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014
 

Financial Calendar

Year

Date

Comments

2016

30 November

Interim results 2016 announced

 

9 December

Ex-dividend date

 

19 December

Payment date for interim

2017

31 March

End of accounting year

 

By 30 July

2017 Annual Financial Report to be published and announced

 

July / August

Annual General Meeting

 

September

Final dividend to be paid

 

 

Editor's notes

The Group Members

Aquila Services Group plc

Aquila is the holding company for Altair Consultancy & Advisory Services Ltd and Murja Ltd which form the Group.

Altair Consultancy and Advisory Services Limited

Altair is a specialist management consultancy providing professional services to local authorities, housing associations, charities, property companies, regulators and government departments.  It advises on all aspects of the development and management of affordable housing for rent and sale, and on the effective management of organisations operating in this sector.

Altair was the company's first acquisition, achieved by a reverse takeover in August 2015, before which the company had not traded.

Murja Limited

Murja is a specialist treasury management consultancy authorised and regulated by the Financial Conduct Authority.  It advises local authorities, housing associations, colleges and other bodies on their capital funding requirements and supports them in securing debt finance.  Murja was the company's second acquisition which was completed in December 2015.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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