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Aquila Services Group PLC  -  AQSG   

Annual report for the year to end 31 March 2018

Released 07:00 28-Jun-2018

RNS Number : 8068S
Aquila Services Group PLC
28 June 2018
 

 

For immediate release                                                                                                  28 June 2018

 

Aquila Services Group plc

("Aquila" or the "Company")

 

Annual report and financial statements

for the year ended 31 March 2018

 

Aquila is pleased to announce its audited annual report and financial statements for the year ended 31 March 2018, extracts from which are set out below.

The Company's annual report and financial statements for the year ended 31 March 2018 are being posted to shareholders today and will shortly be made available from the Company's website at: http://www.aquilaservicesgroup.co.uk/.

In addition, the document will be uploaded to the National Storage Mechanism and will be available for viewing shortly at http://www.morningstar.co.uk/uk/NSM.

The financial information set out below does not constitute the Company's statutory accounts for the period ending 31 March 2018.  The financial information for 2018 is derived from the statutory accounts for that year.  The auditors, Saffery Champness, have reported on the 2018 accounts. Their report was unqualified and did not include a reference to any matters to which the auditors draw attention by way of emphasis without qualifying their report.

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

 

Aquila Services Group plc

Susan Kane, Group Finance Director

Tel: 020 7934 0175

 

Beaumont Cornish Limited, Financial Adviser

Roland Cornish

Tel: 020 7628 3396

 

 

 

Chairman's Statement

Dear Shareholder,

I am pleased to present the annual report and the Financial Statements for the year to 31 March 2018.

Aquila Services Group plc (''the Company''), is the holding company for Altair Consultancy & Advisory Services Limited (''Altair'') and Aquila Treasury and Finance Solutions Limited ("ATFS") (formerly known as Murja Limited), which form the Group (''the Group'').

The Group is an independent consultancy specialising 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 commercial property sector.

Group Members

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.  The consultancy covers the whole of the United Kingdom and, during the year under review, has consolidated its presence in the Republic of Ireland and further resourced its client base in the Midlands and North of England.  Altair 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.  During the year, Altair completed five major consulting assignments in Africa with two further ongoing.  This expansion has led to the establishment of a specialist team to bid for further work.

In October 2017, the company acquired the development consultancy and financial modelling services business of pod LLP and pod Partnership for a consideration of £1.7m for cash and the issue of new equity.  This increased in-house capability by a team of 13 experienced consultants and is expected to boost turnover in a full year by a sum in excess of £1m.

Aquila Treasury and Finance Solutions Limited

ATFS is a specialist treasury management consultancy authorised and regulated by the Financial Conduct Authority.  ATFS advises local authorities, housing associations, higher education bodies and other clients on their capital funding requirements and supports them in securing and managing debt finance.  The business operates through contracts as retained general treasury advisers with a significant number of clients, and specific advisory projects on which fees are generated according to agreed milestones.

Investments

In March 2018, Aquila acquired two minority stakes in 3C Consultants Limited and AssetCore Limited respectively, companies involved in the provision of IT consultancy and a cloud-based platform to manage loan security.  The total cost was approximately £348k.  In addition to the investment in 3C, Steve Douglas, our Co CEO, joined the board as a non-executive director.

 

The investment in AssetCore represents around 8% of its enlarged equity and was part of a £500,000 cash injection to expand the platform already used by ten major housing associations.  I, and non-executive director Richard Wollenberg, have also invested similar amounts and now each hold 8% of the enlarged equity.  I have also been appointed Chair of the company following the completion of the equity issue.  It is part of the Aquila Group's continuing strategy to establish a presence as the key player in direction of IT services to the sector.

Business Review

At the half year, I reported on the investment by the Group in resources to ensure the recruitment and retention of staff, the acquisition of pod, the launch of Altair Africa and our adjustment to the management structure that better reflected the workstreams following changes in government policy and client demand.  This investment in resources was reflected in a reduction in operating profit for the six months ended 30 September 2017.  We have confidence that this investment will support future expansion.  The results for the 12 months show both turnover and operating profit matching the previous year reflecting the improved performance in the second half.

The financial health of the affordable housing sector and its willingness to invest in both growth and business opportunities is dependent on government housing and economic policy.  The sector principally finances itself through borrowings, particularly on the capital markets where public policy is a key component of the credit risk.  The availability of skilled construction personnel and land availability are critical to growth, as is a stable and active residential property market where sales of completed housing provide cross-subsidy for affordable provision.  Demand for the Group's services is partly dependent on the confidence of our clients in making new investments.  To date, the UK economy has stood up well against the projections of the impact of Brexit, but there still remains a residue of political and economic uncertainty in Europe.

The need for more affordable housing has moved up the political agenda and most opinion polls indicate that this is now a much more important concern to the wider population.  The tragedy at Grenfell has highlighted some of the worst deficiencies but it is yet to be seen whether either will generate increased investment in more and better affordable housing, as well as remedying some of the poor investment decisions of the past.

During the year the Group has seen some increases in demand for its services, particularly in the areas of governance and financial oversight, as well as reviewing the quality and impact of our clients ongoing operational services.  The expanded property team have been kept busy as clients investigate more complex development opportunities and ATFS assists medium sized players who are keen to utilise their available assets to support growth.

The Group investment in 3C and AssetCore is a stepping stone into one of the fastest growing areas of the sector where larger organisations are having to deal with increasing volumes of transactions, increasing regulations concerning the holding and management of data and the expectation of a more immediate and efficient response to our clients' tenant base.

The resources invested in the creation of Altair Africa are now generating both turnover and profits.  This allows us to start to diversify our income stream while still concentrating on our core skills.  At this stage, we are only a small player in a very large market and it will be important to consolidate our presence.  Many of the contracts on offer require us to partner with existing players, particularly those with local presence and physical property skills.

 

Financial results

For the year to 31 March 2018, Group turnover was £5.905m (2017: £5.928m).  Altair's consultancy and interim management business contributed £5.320m (2017: £5.456m) and ATFS's £0.585m (2017: £0.472m).

Gross profit was £1.562m (2017: £1.475m) with operating profit, before share option charges, of £660k (2017: £658k).  Operating profit took into account investment in new staff and resources for Altair and ATFS to meet growing and changing demand, particularly, in the North of England, Midlands and Scotland.  Profit after tax, attributable to shareholders, was £405k (2017: £404k) and earnings per share was 1.20p (2017: 1.24p).

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

 

Year ended 31 March 2018 (audited)

6 months to 30 September 2017 (unaudited)

Year ended 31 March 2017 (audited)

 

£000s

£000s

£000s

Turnover

5,905

2,524

5,928

Gross profit

1,562

676

1,475

Operating profit (before share option charge)

660

263

658

Share option charge

135

70

148

Operating profit (after share option charge)

524

193

510

 

The Group has a strong balance sheet with £970k in cash deposits as at 31 March 2018.

Dividend

The directors propose a final dividend of 0.55p per share (2017: 0.50p), making a total dividend for the year of 0.81p per share (2017: 0.74p), an increase of 9.5% compared to 2017.  This will be payable on 3 August 2018 to shareholders on the register at 20 July 2018.

Outlook

The outlook for the Group remains positive.  The affordable housing sector is a key market for the Group.  The continued political pressure to deliver more homes and the impact of the Grenfell tragedy, coupled with economic stability prior to the conclusion of the Brexit negotiations has meant that housing organisations require more of the services provided by Aquila.  However, any major setback could harm confidence.

Our decision to invest in skills and resources has started to show a beneficial impact.  The investment in the technology companies and the setting up of Altair Africa will widen both the range of services and client opportunities whilst making the Group more resilient.

The Group will continue to work with housing providers of all types, including housing associations, local authorities, house builders and private sector providers.  We will support their growth, helping them change to improve and supporting their resilience to the current and future operating environment.  This coupled with our constant engagement with the policy landscape ensures that we are able to provide credible, innovative and practical solutions to our client needs.

 

The increasing profile of public and political debate around the funding of care and support services will also provide opportunities as well as threats for a number of our clients; we will be developing our services to provide support in this area.

We continue to investigate acquisitions and other opportunities to increase the scope and depth of the business.

May I take the opportunity to record my thanks to my fellow directors, executive team and staff of the GroupAs a people-business, the Group is dependent on their enormous commitment and expertise.  I look forward to reporting further progress as part of the half year results.

 

 

 

Derek Joseph - Chairman

27 June 2018

 

 

Strategic Report

Our business

The Group comprises the holding company Aquila Services Group plc (''the Company'') and two trading subsidiaries, Altair Consultancy and Advisory Services Limited ("Altair") and Aquila Treasury and Finance Solutions Limited ("ATFS") (formerly known as Murja Limited).

Altair

Altair provides support services to enable organisations to carry out their activities in a more efficient manner.  It helps manage complex and diverse organisations through periods of significant change, driving service improvement and delivering creative solutions.  Altair's traditional client base includes housing associations, developers and regeneration specialists, charities and local authorities.  Our client base also includes government departments, statutory bodies, financial institutions and other private commercial institutions.

Within the housing sector, Altair provides a broad range of advisory and consultancy services to its clients covering areas such as general management, high level executive recruitment, corporate governance, financial planning, management strategy, organisational improvement and training.  The acquisition of pod has created further opportunities to expand our development and regeneration offering.

We have strong relationships with the English Regulator (the Regulator of Social Housing), Greater London Authority, Welsh Government, the Scottish Regulator, the Irish Housing Regulator and the Irish Council for Social Housing.  Altair's services also cover the application of government strategies to increase the supply of affordable housing both for rent and home ownership as well as local government initiatives encouraging the transfer of public sector housing to independent vehicles.

Altair has created a specialist bid team to enable our expansion into Africa.  The work has focused on assisting governmental and international institutions interested in the provision of affordable housing in countries such as Nigeria and Rwanda.

ATFS

ATFS specialises in providing advice to organisations principally involved in the affordable / social housing and education sectors in respect of debt and financial risk management.  Continued pressure to deliver more homes and fundamental changes in the financing markets mean there is strong and growing demand for specialist treasury advisory services, with increasing emphasis on funding from the capital markets and other sources of long-term capital.

Housing associations and local authorities are becoming involved in more complex legal, commercial and financial structures particularly with housebuilders and private sector developers in joint ventures.  As clients face new risks, Altair's products and services complement ATFS' core advisory activity providing opportunity for growth of a comprehensive financial and commercial advisory service.

 

Strategy and Objectives - Leadership, Quality, Insight

The strategy and objectives of the Group are:

§ Provide high quality consultancy advice and support to organisations operating within or aligned to the public sector, specifically those that govern, manage, regulate or build houses.

§ Continue to seek out acquisitions and investments which will expand our range of services and scope of business to increase our ability to be a one-stop shop of professional support services for the clients of our subsidiary companies.

§ Attract and retain employees by providing a great place and environment to work and enable employee participation and reward through equity participation.

§ To increase our client base nationwide.

§ Encourage innovation through the development of new products.

§ To continue exploring the opportunities that are occurring as a result of the Group's expertise in overseas markets

Review of the Business

The year under review has achieved the following financial results.

The Group saw a 0.39% decrease in turnover on 2018.  This reflected some growth in Altair's housing consultancy, specifically through the acquisition of pod, which was countered by a decline in revenue of interim management business through a tightening of IR35, some consolidation in the sector and the continued impact of the government's policy of rent reduction for the sector.

Gross profit for the Group rose by over £87k (5.9%).  Altair has made a substantial investment in its acquisition of pod, its IT infrastructure and staff over the year in anticipation of future growth; the Board anticipates that this investment will aid future profit growth.  The Group is in a very strong net asset position, with £970k in cash held at 31 March 2018.

The underlying business remains strong and there has been continued growth of the client base in the consultancy business in the Midlands, the North of England and Ireland.

The Group is benefiting from our acquisitions and investments and this year we have seen an increase in opportunities arising from being able to offer consulting and treasury advice to our clients both in the United Kingdom and Ireland.  Our work in Africa demonstrates our ability to transfer our expertise internationally and we continue to seek international opportunities using the bid team we have created for this purpose.  In the first year, this area of the business has been profitable.

We have assisted clients with their response to the tragic events following Grenfell and continue to work closely with them as policies evolve.  We await the issue of the Housing Green Paper later this year and are reviewing the outcomes within the Dame Judith Hackett Report as to how this will affect our clients.  The government's focus on the delivery of 300,000 new homes per year is challenging and the acquisition of pod has helped position Altair to respond proactively to clients as they seek to increase their development capability and capacity.  The demand for the increase in new homes has meant some consolidation in the sector and we have advised clients through mergers and acquisitions.

 

We continue to seek out research opportunities to help inform the decision makers throughout the sector and government and, for the year under review, we have worked with the Joseph Rowntree Foundation developing and publishing a suite of reports that examined the links between housing and poverty and an individual's life experiences; the Altair/ J RF Housing and Poverty Prevention Project.  We published a major report, Building Bridges, which examined how local authorities and housing associations could better work together through partnerships.

Altair is one of the major partners in the Leadership 2025 campaign, Creating a more diverse leadership across the housing sector.  This work is supported by BME London, L&Q, and Optivo. Altair has continued to expand its consultancy capacity through its acquisition of pod and 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.  As organisations embrace new ways of working and communicating with their customers, our continued partnership with 3C, a specialist IT consultancy company, has strengthened our offer to our customers, specifically the Organisational Excellence product.  Altair has also provided Human Resource and Personnel services to clients through retained contracts during the year.  The interim business has experienced a weaker market, IR35 has had an impact on how housing organisations and local authorities cover their short-term vacancies.  This has led to a reduced income from this stream of work.  The core recruitment business remains strong and the client base continues to grow in number and range.

ATFS similarly expanded its treasury advisory offering with increasing focus on advisory assignments for the capital markets, and private placements in particular.  ATFS also strengthened its presence in Ireland winning renewal of a three-year contract providing services to the Housing Finance Agency plc in Dublin as the Irish social housing market grows with increasing focus on funding construction of new housing.

The company continues to have a strong presence in Scotland, reinforced with the appointment of a full-time Director based near Edinburgh.  The Scottish government has a significant programme for delivery of new homes, creating increasing demand for advisory services on new debt funding and capital markets access.

The comparison between this reporting year, the mid-year results and the last reporting year are set out below:

 

Year ended 31 March 2018 (audited)

6 months to 30 September 2017 (unaudited)

Year ended 31 March 2017 (audited)

 

£000s

£000s

£000s

Turnover

5,905

2,524

5,928

Gross profit

1,562

676

1,475

Operating Profit

524

193

510

 

 

 

 

Operating profit is after charging share option expense as follows:

 

 

 

 

 

Share option charge

135

70

148

         

 

The Group has not identified any post balance sheet events, as set out in note 27 to the Financial Statements.

The Group will also continue to look at opportunities to expand its consultancy base through acquisition to offer an increased scope of services and products to our clients.

 

Key Performance Indicators

The Group monitors its key performance indicators (KPI's) regularly and these are set out below:

 

 

Revenue

 

Gross profit

Earnings

per share

2018

5,905,221

1,561,765

1.20p

2017

5,928,201

1,474,735

1.24p

 

 

Number of

clients

Number of

New clients

Client retention rate

(%)

2018

225

77

66

2017

212

72

64

 

Principal Risks and Uncertainties

The principal risks currently faced by the Group are:

Financial Instruments

The main financial risks arising from the Group activities are credit risk, foreign currency risk and interest rate risk details of which can be found in Note 26 to the Financial Statements.

Unfavourable economic conditions and / or changes to government policy

The Group's operating results and its financial condition may be negatively affected by a downturn in the general economic climate within the UK which consequently may have adverse effect upon government policy and spending, and private sector investments.

A reduced level of economic activity will restrict the amount of outsourcing by companies, local authorities or other bodies and result in the restriction of funding available for the purchase of such services leading to a decline in the number of firms in the sector and their profitability. 

The continuing Brexit negotiations and the immediate aftermath of the United Kingdom leaving the European Union could lead to a period of uncertainty and this may cause clients to review their spending with consultancy providers and lead to a reduction in projects.

The focus on IR35 within the interim market for public sector bodies has caused a softening of the interim market within government and local authorities.  Clients are carefully reviewing their spend and methods of resourcing, turning to new and alternative models.

Reduction in government investment and funding

The Group's future revenues and profitability will be dependent on the current UK Government's policy with regard to expenditure on service and social housing improvements and to public expenditure levels in general.  The introduction of policies to restrict the income for housing providers is a risk that the Group is monitoring closely.

 

The Grenfell tragedy has meant that organisations have invested in remedial works, and, although the Government has indicated there is some money available for recladding of tower blocks, this has been provided from the Affordable Housing Programme, which provides the grant to clients who are developing new houses.  This additional investment is likely to have an impact on development and regeneration programmes for our clients, although the funding will be reinstated in the 2022 Programme.

A change in the political environment relating to regeneration, specifically in the major cities, could dampen private developer appetite and this would have an impact on our clients.

The UK Government and local authorities may decide in future to change their programmes and priorities including reducing present or future spending and investment where the Group would expect to compete for work.

Competition

The contracts and procurement arrangements under which companies operating in these sectors compete for new business can lead to a higher cost of procuring new contracts and the possibility of not meeting fully the terms of contracts leading to reduced margins.

Staff skills, retention, recruitment and succession

The success of the Group is dependent on retaining, developing, motivating and communicating with senior management and personnel and, as the business grows, on recruiting appropriately skilled, competent people at all levels.  Any shortages in the availability of appropriately skilled personnel may have a negative effect on the Group.  The Directors of the subsidiaries are expected to contribute to its ability to obtain, generate and manage opportunities.

If the Group cannot successfully attract, retain and motivate such personnel, it may not be able to maintain standards of service or continue to grow its businesses as anticipated.  The loss of such personnel, or the inability to attract, retain, motivate and communicate with additional skilled employees required for their activities within an affordable cost base, could have an adverse effect on the Group's business and prospects.

Data Governance

The increase of cyber-attacks and the loss of data is a key risk that is monitored closely.  The Group complies with all relevant legislation and has invested in updated systems, security and training during the year.

The Group seeks to mitigate all these risks through ensuring that it monitors changes in statutory, regulatory and financial changes and maintains good relationships with its principal contacts within government, regulators and other key influencers within the sector.

The Group is well placed to provide the full range of services needed by housing providers as the external environment changes and the outlook for the business continues to be positive.  A continued understanding of its position in the market and delivering value for money to clients will ensure that services and products remain competitive.  In addition, the Group will ensure that its people policies are refreshed and follow good practice so that it can continue to attract and retain excellent staff.

 

Employees

A split of our employees and directors by gender as at the end of the year is shown below:

 

Male

Female

Directors of the Company

4

2

Directors of subsidiary companies not included in above

3

-

Employees in other senior management positions

2

3

Total senior managers other than directors of the Company

5

3

Other employees of the Group

14

17

Total employees of the Group

23

22

 

The Group consults with its employees on a regular basis through direct updates and conducts an annual review of staff; results are reviewed and discussed by the Directors and an action plan agreed and discussed with all staff.  The Group invests in training and developing its employees through both internal and external courses.

The Group follows the legislative requirements set out in the Equality Act 2010 which covers all aspects of equality and diversity, replacing previous legislation covering equal pay, sex, race and disability discrimination.  The Group gives due consideration to all applications and provides training and the opportunity for career development wherever possible.  The Board is also mindful of the Human Rights Act 1998.

Environment

We understand and effectively manage the actual and potential impact of our activities.  The Group's operations are conducted such that compliance is maintained with legal requirements relating to the environment.

Corporate and Social Responsibility

The Group recognises that we have a responsibility to ensure the impact of our business is positive, and that we are good corporate citizens.  We focus our corporate and social responsibility in four key areas; sustainability, staff, charitable giving, and supporting communities.

§ We are committed to treating with respect and dignity those we work with.

§ We are committed to honesty and transparency in our communication with staff, external stakeholders, and customers.

§ We recognise the importance of reflecting our clients and networks within the housing sector and seek to promote diversity and inclusion in all our activities.

§ The Group considers a strategic approach to diversity and inclusion is imperative to creating an environment that supports its talented and highly valued people.  Our approach is based on inclusivity, enabling those we work with, and those who work for us to achieve their potential.

§ We ensure those we work with are provided with equitable fair opportunities, and do not discriminate on the basis of age, gender, sexuality, disability, ethnicity, or any other protected characteristic listed in the Equality Act 2010.

§ We aim to work actively with our suppliers to ensure they meet our values and have sustainability issues at the heart of every decision.

§ We are conscious of our responsibilities to minimise the environmental impact of our activities and to behave in a sustainable manner.

§ We know that, as corporate citizens, we have a responsibility to the broader community.  We work with our stakeholders to understand community priorities and reflect these in our activities.

§ We work with organisations whose customers include some of the most vulnerable in society.  We are committed to supporting our clients to contribute to their communities and consider the impact of their plans on their stakeholders.

§ We recognise that our staff are the most valuable asset to our organisation.  Our employment policies across the Company seek to exceed mere compliance with relevant legislation, to create a working environment that embraces diversity and offers fairness and equality of opportunity throughout our workplace.

§ Aquila will support the development of all its staff, particularly those from diverse backgrounds.  We will challenge inappropriate and discriminatory behaviours and will continually assess our progress against organisations inside and outside of sector.

§ We support and encourage our staff to engage in the governance of organisations within our spheres of influence, for example by holding non-executive directorships of charities or not for profit organisations.

During the year, we continued our commitment to supporting a vibrant and inclusive leadership within the housing sector.  Altair has been providing extensive support to the Leadership 2025 programme.  Altair, L&Q, Optivo and BME London, in partnership with Roffey Park Business School, joined forces to develop this leadership programme aimed at senior leaders from BME backgrounds.  At its heart, Leadership 2025 aims to support and empower BME senior professionals to become sector leaders of the future.  Leadership 2025 seeks to positively disrupt the housing sector by challenging current perceptions.

Altair were commissioned to carry out a research project identifying where the sector stands in terms of diversity representation, developing a business case for diverse leadership, scoping what the sector can learn from its past and present leaders and from other sectors and highlighting what changes the sector should make now.  To enable the step-change necessary to break down these existing barriers, the review set out a number of ambitious but practical recommendations, which have been distilled as a five-point plan.  Aquila has committed to implementing the plan and report to the Board on progress.

Leadership 2025 and the research report was launched in November 2017 at City Hall, with the support of the Mayor of London.

 

Going Concern Basis

The Board updates its three-year business plan annually which includes a review of the company's cash flows and other key financial ratios over the period.  These metrics are subject to sensitivity analysis which involves flexing a number of the main assumptions underlying the forecast both individually and in unison.  Where appropriate, this analysis is carried out to evaluate the potential impact of the company's principal risks actually occurring.  The three-year review also makes certain assumptions about the normal level of capital investment likely to occur and considers whether additional financing facilities will be required.

Based on the results of this analysis, the directors have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the three-year period of their assessment, and thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

 

 

 

Dr Fiona Underwood - Co-Chief Executive

27 June 2018

 

 

 

Notes

 

 

2018

 

2017

 

 

 

 

£

 

£

Revenue

 

4

 

 

5,905,221

 

5,928,201

 

 

 

 

 

 

 

 

Cost of sales

 

5

 

 

(4,343,456)

 

(4,453,466)

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

1,561,765

 

1,474,735

 

 

 

 

 

 

 

 

Administrative expenses

 

5

 

 

(1,037,287)

 

(964,692)

 

 

 

 

 

 

 

 

Operating profit

 

 

 

 

524,478

 

510,043

 

 

 

 

 

 

 

 

Finance income

 

4

 

 

3,596

 

5,512

 

 

 

 

 

 

 

 

Profit before taxation

 

6

 

 

528,074

 

515,555

 

 

 

 

 

 

 

Income tax expense

 

8

 

 

(123,390)

 

(111,345)

 

 

 

 

 

 

 

 

Profit for the year

 

 

 

 

404,684

 

404,210

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

-

 

-

Total comprehensive income for the year

 

 

 

404,684

 

404,210

 

 

 

 

 

 

 

 

Earnings per share attributable to owners of the parent

 

 

 

 

 

 

 

Basic

 

9

 

 

1.20p

 

1.24p

Diluted

 

9

 

 

1.05p

 

1.08p

 

The income statement has been prepared on the basis that all operations are continuing operations.

 

 

Consolidated and Company statements of financial position

As at 31 March 2018

 

 

Group

 

Group

 

Company

 

Company

 

 

2018

 

2017

 

2018

 

2017

Notes

£

 

£

 

£

 

£

Non-current assets

 

 

 

 

 

 

 

 

Goodwill

10

2,027,688

 

317,688

 

-

 

-

Property, plant and equipment

11

95,747

 

50,559

 

58,967

 

-

Investment in subsidiaries

12

-

 

-

 

9,885,193

 

9,749,931

Investment in associates

13

226,620

 

-

 

226,620

 

-

Investments

14

121,104

 

-

 

121,104

 

-

 

 

2,471,159

 

368,247

 

10,291,884

 

9,749,931

Current assets

 

 

 

 

 

 

 

 

Trade and other receivables

15

2,109,678

 

1,350,187

 

1,127,499

 

47

Cash and bank balances

 

969,987

 

2,312,600

 

343,269

 

348,062

 

 

3,079,665

 

3,662,787

 

1,470,768

 

348,109

Current liabilities

 

 

 

 

 

 

 

 

Trade and other payables

16

1,094,690

 

951,923

 

616,971

 

217,380

Corporation tax

 

141,775

 

134,753

 

-

 

-

 

 

1,236,465

 

1,086,676

 

616,971

 

217,380

 

 

 

 

 

 

 

 

 

Net current assets

 

1,843,200

 

2,576,111

 

853,797

 

130,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets

 

4,314,359

 

2,944,358

 

11,145,681

 

9,880,660

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Share capital

17

1,763,273

 

1,632,550

 

1,763,273

 

1,632,550

Share premium account

18

1,487,512

 

533,235

 

1,487,512

 

533,235

Reverse acquisition reserve

18

(4,771,473)

 

(4,771,473)

 

-

 

-

Merger reserve

18

7,184,334

 

7,184,334

 

7,184,334

 

7,184,334

Share-based payment reserve

20

557,653

 

422,391

 

557,653

 

422,391

Retained (losses) / earnings

 

(1,906,940)

 

(2,056,679)

 

152,909

 

108,150

 

 

 

 

 

 

 

 

 

Equity attributable to the owners of the parent

 

4,314,359

 

2,944,358

 

11,145,681

 

9,880,660

 

As permitted by S408 Companies Act 2006, the company has not presented its own profit and loss account and related notes.  The company's profit for the year was £299,704 (2017: £225,364).

The financial statements were approved by the board on 27 June 2018.

 

 

Susan Kane - Group Finance Director

Company Registration No. 08988813

 

Consolidated statement of changes in equity for the year ended

31 March 2018

 

Share

Reverse

Share based

 

 

 

Share

premium

acquisition

Merger

payment

Retained

Total

 

capital

account

reserve

reserve

reserve

losses

equity

 

£

£

£

£

£

£

£

 

 

 

 

 

 

 

 

Balance 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

Total comprehensive income

-

-

-

-

-

404,210

404,210

Transfer on exercise of options

-

-

-

-

(6,846)

6,846

-

Share based payment charge

-

-

-

-

147,651

-

147,651

Dividend

-

-

-

-

-

(221,840)

(221,840)

Balance at 31 March 2017

1,632,550

533,235

(4,771,473)

7,184,334

422,391

(2,056,679)

2,944,358

 

 

 

 

 

 

 

 

Balance at 1 April 2017

1,632,550

533,235

(4,771,473)

7,184,334

422,391

(2,056,679)

2,944,358

Issue of shares

130,723

954,277

-

-

-

-

1,085,000

Total comprehensive income

-

-

-

-

-

404,684

404,684

Share based payment charge

-

-

-

-

135,262

-

135,262

Dividend

-

-

-

-

-

(254,945)

(254,945)

Balance at 31 March 2018

1,763,273

1,487,512

(4,771,473)

7,184,334

557,653

(1,906,940)

4,314,359

 

 

 

Company statement of changes in equity

 

Share

Share based

 

 

For the year ended 31 March 2018

Share

premium

Merger

payment

Retained

Total

 

capital

account

reserve

reserve

earnings

equity

 

£

£

£

£

£

£

 

 

 

 

 

 

 

Balance at 1 April 2016

1,630,434

533,235

7,184,334

281,586

97,780

9,727,369

Issue of shares

2,116

-

-

-

-

2,116

Total comprehensive income

-

-

-

-

225,364

225,364

Transfer on exercise of options

-

-

-

(6,846)

6,846

-

Share based payment charge

-

-

-

147,651

-

147,651

Dividend

-

-

-

-

(221,840)

(221,840)

Balance at 31 March 2017

1,632,550

533,235

7,184,334

422,391

108,150

9,880,660

 

 

 

 

 

 

 

Balance at 1 April 2017

1,632,550

533,235

7,184,334

422,391

108,150

9,880,660

Issue of shares

130,723

954,277

-

-

-

1,085,000

Total comprehensive income

-

-

-

-

299,704

299,704

Share based payment charge

-

-

-

135,262

-

135,262

Dividend

-

-

-

-

(254,945)

(254,945)

Balance at 31 March 2018

1,763,273

1,487,512

7,184,334

557,653

152,909

11,145,681

 

 

 

Consolidated statement of cash flow

For the year ended 31 March 2018

2018

 

2017

 

£

 

£

Cash flows from operating activities

 

 

 

Profit for the year

404,684

 

404,210

Interest received

(3,596)

 

(5,512)

Income tax expense

123,390

 

111,345

Share based payment charge

135,262

 

147,651

Depreciation

31,639

 

11,694

691,379

 

669,388

 

 

 

 

Increase in trade and other receivables

(759,491)

 

(191,351)

Increase / (decrease) in trade and other payables

76,997

 

(324,578)

Cash generated by operations

8,885

 

153,459

 

 

 

 

Income taxes paid

(116,368)

 

(131,690)

Net cash (outflow) / inflow from operating activities

(107,483)

 

21,769

 

 

 

 

Cash flows from investing activities

 

 

 

Interest received

3,596

 

5,512

Purchase of property, plant and equipment

(76,827)

 

(47,599)

Acquisition of goodwill

(625,000)

 

-

Acquisition of investment in an associate

(160,850)

 

-

Acquisition of investment

(121,104)

 

-

Net cash outflow from investing activities

(980,185)

 

(42,087)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds of share issue

-

 

2,116

Dividends paid

(254,945)

 

(221,840)

Net cash outflow from financing activities

(254,945)

 

(219,724)

 

 

 

 

Net decrease in cash and cash equivalents

(1,342,613)

 

(240,042)

 

 

 

 

Cash and cash equivalents at beginning of the year

2,312,600

 

2,552,642

 

 

 

 

Cash and cash equivalents at end of the year

969,987

 

2,312,600

 

 

Company statement of cash flow

For the year ended 31 March 2018

2018

 

2017

 

£

 

£

Cash flows from operating activities

 

 

 

Profit for the year

299,704

 

225,364

Dividends received

(410,820)

 

(325,650)

Interest received

(1,082)

 

(1,024)

Depreciation

5,355

 

-

Operating cash flows before movement in working capital

(106,843)

 

(101,310)

 

 

 

 

(Increase) / decrease in trade and other receivables

(42,452)

 

1,723

Increase / (decrease) in trade and other payables

333,821

 

(1,150)

Net cash inflow / (outflow) from operating activities

184,526

 

(100,737)

 

 

 

 

Cash flows from investing activities

 

 

 

Interest received

1,082

 

1,024

Dividends received

410,820

 

325,650

Purchase of property, plant and equipment

(64,322)

 

-

Acquisition of investment in an associate

(160,850)

 

-

Acquisition of investment

(121,104)

 

-

Net cash inflow from investing activities

65,626

 

326,674

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds of share issue

-

 

2,116

Dividends paid

(254,945)

 

(221,840)

Net cash outflow from financing activities

(254,945)

 

(219,724)

 

 

 

 

Net (decrease) / increase in cash and cash equivalents

(4,793)

 

6,213

 

 

 

 

Cash and cash equivalents at beginning of the year

348,062

 

341,849

 

 

 

 

Cash and cash equivalents at end of the year

343,269

 

348,062

 

 

 

Notes to the financial statements

1        General information

Aquila Services Group plc (''the Company'') and its subsidiaries (together, ''the Group'') provide specialist housing and treasury management consultancy services.  The principal activity of the Company is that of a holding company for the Group as well as providing all the strategic and governance functions of the Group.

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

2        Accounting policies

The principal accounting policies applied in preparation of these consolidated financial statements are set out below.  These policies have been consistently applied unless otherwise stated.

Basis of preparation

The financial statements have been prepared in accordance with International Reporting Standards as adopted by the European Union (IFRSs), issued by the International Accounting Standards Board (IASB), including interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), and the Companies Act 2006 applicable to companies reporting under IFRS.

The financial statements have been prepared on the historical cost basis.

The financial statements are presented in Pounds Sterling which is the Group's functional and presentational currency.

The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates.  It also requires management to exercise its judgement in the process of applying the Group's accounting policies.  The areas of critical accounting estimates and judgements are set out in note 3.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of subsidiary entities.  A subsidiary is defined as an entity over which the Company has control.  Control is achieved when the Company has power over an entity, is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to use its power to affects its returns.

Consolidation of a subsidiary begins when the Company obtains control and ceases when control is lost.  The Company reassesses whether or not it controls an entity if facts and circumstances indicate that there are changes to one or more of the three control elements listed above.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated on consolidation.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies used into line with the Group's accounting policies.

 

Business combinations

Other than the reverse acquisition noted above, acquisitions of subsidiaries are accounted for using the acquisition method.  The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group in exchange for control of the acquiree.

Any excess of the consideration over the fair value of the identifiable assets and liabilities acquired is recognised as goodwill.  Goodwill is not amortised but is reviewed for impairment at least annually.  If the consideration is less than the fair value of the identifiable assets and liabilities acquired, the difference is recognised in the Statement of comprehensive income.

Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the rendering of services in the ordinary course of the Group's activity.  Revenue is shown net of value added tax, returns, rebates and discounts.  The Group recognises revenue when the amount of the revenue can be reliably measured and when it is probable that economic benefits will flow to the entity.

Un-invoiced fees at the balance sheet date are valued at the fair value of the consideration receivable when it is probable that economic benefits will flow to the Group.  Where income is invoiced in advanced of work being completed, revenue is treated in the first instance as deferred income and recognised when the services are performed by the Group.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.  The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for use.  Depreciation is recognised so as to write-off the cost of assets less their residual values over their estimated useful lives, using the straight-line method, on the following bases:

Computer equipment        33% per annum

Fixtures and fittings           33% per annum

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.  The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Statement of comprehensive income.

Investment in subsidiaries

In the company's separate annual financial statements, investments in subsidiaries are carried at cost less any accumulated impairment.

The cost of an investment in a subsidiary is the aggregate of the fair value, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the company, plus any costs directly attributable to the purchase of the subsidiary.

 

Investments in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture.  Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting.  Under the equity method, an investment in an associate is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of profit or loss and other comprehensive income of the associate.

An investment in an associate is accounted for using the equity method from the date on which the investee becomes an associate.  On acquisition of the investment in an associate, any excess of cost over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included in the carrying amount of the investment.

Financial instruments

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial assets can be divided into the following categories: loans and receivables, financial assets at fair value through profit or loss, available-for-sale financial assets and held-to-maturity investments.  Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the instruments were acquired.  The designation of financial assets is re-evaluated at every reporting date at which a choice of classification or accounting treatment is available.

De-recognition of financial instruments occurs when the rights to receive cash flows from investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred.  An assessment for impairment is undertaken at least at each balance sheet date whether or not there is objective evidence that a financial asset or a group of financial assets is impaired.

Trade receivables

Trade receivables are measured at initial recognition at fair value plus, if appropriate, directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest method.  Appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there is objective evidence that the asset is impaired.  The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at an effective interest rate computed at initial recognition.

Loans receivable

Loans receivable are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.  They arise when the Group or Company provides money directly to a debtor with no intention of trading the receivables.  Loans receivable are measured at initial recognition at fair value plus, if appropriate, directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest method, less provision for impairment.  Any change in their value is recognised in the income statement.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.  A financial liability is a contractual obligation to either deliver cash or another financial asset to another entity or to exchange a financial asset or financial liability with another entity, including obligations which may be settled by the Group using its equity instruments.  An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.  The accounting policies adopted for specific financial liabilities and equity instruments are set out below.

Financial liabilities

At initial recognition, financial liabilities are measured at their fair value plus, if appropriate, any transaction costs that are directly attributable to the issue of the financial liability.  After initial recognition, all financial liabilities are measured at amortised cost using the effective interest method.

Pensions

The Group contributes to defined contribution schemes for the benefit of its directors and employees.  Contributions payable are charged to the statement of comprehensive income in the year they are payable.

Current and deferred income tax

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year.  Taxable profit differs from net profit as reported in the profit or loss, because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.  The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial information and the corresponding tax bases used in the computation of taxable profit, and, is accounted for using the balance sheet liability method.  Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.  Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit.

Deferred tax is calculated at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled.  Deferred tax is charged or credited in the profit or loss, except when it relates to items credited or charged in other comprehensive income directly to equity, in which case the deferred tax is also dealt with in other comprehensive income.

Deferred tax assets

Management regularly assesses the likelihood that deferred tax assets will be recovered from future taxable income.  No deferred tax asset is recognised when management believe that it is more likely than not that a deferred asset will not be realised.

Impairment of assets

The Group assesses at each statement of financial position date if there is any indication that an asset may be impaired.  If any such indication exists, the Group estimates the recoverable amount of the asset.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount.  That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased.  If any such indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss.

Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.  If the effect is material, provisions are determined by discounting the expected future cash flows at an appropriate pre-tax discount rate.

Operating leases

Rentals payable under operating leases, net of lease incentives, are charged to the statement of comprehensive income on a straight-line basis over the term of the lease.

Share capital / equity instruments

Ordinary shares are classified as equity.  Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.  The Company has one class Ordinary share which carries no right to fixed income.  Each share carries the right to one vote at general meetings of the Company.

 

Share based payments

Equity-settled share-based payments to employees and directors are measured at the fair value of the equity instruments at grant date.  The fair value excludes the effect of non-market-based vesting conditions.

The fair value determined at the grant date of the equity-settled share based-payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest.  At each balance sheet date, the Group revises the estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions.  The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves.

Adoption of new and revised standards

The following pronouncements have been adopted in the year and either had no impact on the financial statements or resulted in changes to presentation and disclosure only:

§ IAS 7 (amendments) Statement of cashflows disclosure *

§ IAS 12 (amendments) Income taxes on Recognition of deferred tax losses for unrealised losses *

§ Annual Improvements 2014-2016 Cycles *

*Effective for annual periods beginning on or after 1 January 2017.

Standards issued but not yet effective

At the date of authorisation of these financial statements, the following Standards and Interpretations relevant to the Group, which have not been applied in these financial statements, were in issue but were not yet effective.  In some cases, these standards and guidance have not been endorsed by the European Union.

§ IFRS 2 (amendments) Classification and Measurement of Share-based Payment Transactions **

§ IFRS 9 Financial Instruments **

§ IFRS 15 (amendments) Revenue from Contracts with Customers **

§ IFRIC 22 Foreign Currency Transactions and Advance Consideration **

§ IFRS 16 Leases ***

§ IFRIC 23 Uncertainty over Income Tax Treatments ***

§ IAS 28 (amendments) Long-term Interests in Associates and Joint Ventures***

§ Annual improvements 2015-2017 cycle***

**Effective for annual periods beginning on or after 1 January 2018

***Effective for annual periods beginning on or after 1 January 2019

The directors have assessed the impact of the standards in issue but not yet effective and have noted below their conclusions on the key new standards.

 

IFRS 9 Financial Instruments

IFRS 9 issued in July 2014 introduces new requirements for the classification and measurement of financial instruments.  It is effective for all accounting periods beginning on or after 1 January 2018.

The directors have considered the impact of IFRS 9 Financial Instruments for the next accounting period, and believe the key changes to the Company's accounting policies to be as follows:

§ The directors will assess the recoverability of receivables and loans with a view to recognising any impairment losses as necessary in line with the expected credit loss basis.

§ The directors are aware of the additional disclosure requirements of IFRS 9 Financial Instruments and will ensure their inclusion in the financial statements for the year ended 31 March 2019.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 (latest amendment issued in April 2016) introduces a new standard for the recognition of revenue from contracts with customers.  It is effective for all accounting periods beginning on or after 1 January 2018.

The directors have considered the potential impact of IFRS 15 Revenue from Contracts with Customers for the next accounting period and believe there to be no impact on the revenue recognition policies of the Company.

IFRS 16 Leases

IFRS 16 (latest amendment issued in January 2016) introduces a new basis for the accounting of leases.  It is effective for all accounting periods beginning on or after 1 January 2019.

The directors have considered the potential impact of IFRS 16 Leases for the accounting period beginning on 1 January 2019 for all existing lease agreements.  At present, the existing lease agreements are either of too short a nature or too low a value to qualify for a transitional change.  The directors are aware that the new standard may impact future lease agreements and will account for any new agreements in line with IFRS 16 Leases.

3        Critical accounting estimates and judgements

In application of the Group's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.  The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.  Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Group's accounting policies

The following are the critical judgements, apart from those involving estimations, that the directors have made in the process of applying the Group's accounting policies and that have a significant effect on the amounts recognised in the financial statements.

 

Revenue recognition

Work in progress is calculated on a project by project basis using the fair value of chargeable time that is un-invoiced at the period end.  Historic analysis shows that recovery rates of work in progress are very high; the Group does not expect any work in progress to be irrecoverable.  Work in progress is reviewed on a monthly basis to ensure it is recognised appropriately, it is probable that economic benefits will flow to the Group and that the fair value can be reliably measured (note 4).

Share based payments

The Company has granted share options to certain employees and directors of the Group.  The share options granted become exercisable at varying future dates.  If certain conditions are met, following the vesting period, the employee will be eligible to exercise their option at an exercise price determined on the date the share options are granted.

The share-based payment charge is recognised in the statement of comprehensive income and is calculated based on the Company's estimate of the number of share options that will eventually vest.

Assumptions regarding the fair value of the Company's shares and assumptions regarding employee fluctuation are taken into account when measuring the value of share-based payments for employees, which are required to be accounted for as equity-settled share-based payment transactions pursuant to IFRS 2.  The resulting staff costs are recognised pro rata in the statement of comprehensive income to reflect the services rendered as consideration during the vesting period (note 20).

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that may have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Impairment of goodwill

The carrying amounts of the Group's assets value are reviewed at each balance sheet date to determine whether there is any indication of impairment.  If any such indication exists, the asset's recoverable amount is estimated and an impairment loss is recognised where the recoverable amount is less than the carrying value of the asset.  Any impairment losses are recognised in the income statement.

4        Revenue

An analysis of the Group's revenue is as follows:

 

 

 

 

2018

 

2017

 

£

 

£

Continuing operations - rendering of services

 

 

 

Specialist housing consultancy income

5,320,054

 

5,456,328

Treasury management consultancy income

585,167

 

471,873

 

5,905,221

 

5,928,201

 

 

 

 

Interest revenue on bank deposits

3,596

 

5,512

 

 

 

 

 

5,908,817

 

5,933,713

 

 

 

5        Operating segments

The Group has three reportable segments, being consultancy, interim management and treasury management services, the results of which are included within the financial information.  In accordance with IFRS8 'Operating Segments', information on segment assets is not shown, as this is not provided to the chief operating decision-maker.

The principal activities of the Group are as follows:

Consultancy - a range of services to support the business needs of a diverse range of organisations (including housing associations and local authority) across the housing sector.  The majority of consultancy projects run over one to two months requiring on-going business development to ensure a full pipeline of consultancy work for the employed team.

Interim Management - individuals are embedded within housing organisations (normally registered providers, local authorities and ALMOs) in a substantive role, normally for a specified period of time.  Interim management provides the Group with a more extended forward sales pipeline as the average contract is for six months.  This section of the business provides low risk as the interim consultants are placed on rolling contractual basis and provides minimal financial commitment as associates to the business, rather than employees, are used for these roles.

Treasury Management - a range of services providing treasury advice and fund-raising services to non-profit making organisations working in the affordable housing and education sectors.  Within this segment of the business a number of client organisations enter into fixed period retainers to ensure immediate call-off of the required services.

The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 2.  Segment profit represents the profit earned by each segment, without allocation of central administration costs, including Directors' salaries, finance costs and income tax expense.  This is the measure reported to the Group's Chief Executive for the purpose of resource allocation and assessment of segment performance.

 

2018

 

2017

 

£

 

£

Revenue from Consultancy

4,214,909

 

3,712,790

Revenue from Interim management

1,152,950

 

1,743,538

Revenue from Treasury management

537,362

 

471,873

 

5,905,221

 

5,928,201

 

 

 

 

Cost of sales from Consultancy

3,036,105

 

2,627,985

Cost of sales from Interim management

914,801

 

1,483,353

Cost of sales from Treasury management

392,550

 

342,128

 

4,343,456

 

4,453,466

 

 

 

 

Gross profit from Consultancy

1,178,804

 

1,084,805

Gross profit from Interim management

238,149

 

260,185

Gross profit from Treasury management

144,812

 

129,745

 

1,561,765

 

1,474,735

 

 

 

 

Administrative expenses

(1,037,287)

 

(964,692)

 

 

 

 

Operating profit

524,478

 

510,043

Within consultancy revenues, approximately 3% (2017: 11%) has arisen from the segments largest customer; within interim management 14% (2017: 9%); within treasury management 46% (2017: 18%).

Geographical information

Revenues from external customers, based on location of the customer, are shown below:

 

2018

 

2017

 

£

 

£

UK

5,530,360

 

5,724,527

Republic of Ireland

298,212

 

157,628

Africa

76,649

 

46,046

 

5,905,221

 

5,928,201

 

6        Profit before taxation

 

2018

 

2017

 

£

 

£

Profit before taxation is arrived at after charging:

 

 

 

Auditors' remuneration

37,975

 

37,200

Depreciation of property, plant and equipment

31,639

 

11,694

Staff costs (see note 7)

2,943,663

 

2,816,112

Operating lease costs - land and buildings

49,605

 

49,605

 

7        Staff costs

 

2018

 

2017

The average monthly number of employees (including directors) employed by the Group was:

40

 

37

 

 

 

 

 

2018

 

2017

 

£

 

£

Aggregate remuneration (including directors)

 

 

 

Wages and salaries

2,436,180

 

2,322,383

Share-based payments

135,262

 

147,651

Pension contributions

96,160

 

88,565

Social security costs

276,061

 

257,513

 

2,943,663

 

2,816,112

 

 

2018

 

2017

 

£

 

£

Directors' remuneration

 

 

 

Salary (including taxable benefits)

333,957

 

347,362

Share-based payments

65,871

 

65,500

Pension contributions

12,600

 

12,000

 

412,428

 

424,862

 

 

 

 

Two directors are members of the company's defined contribution pension scheme.

 

 

The amounts set out above include remuneration to the highest paid director as follows:

 

 

 

 

Salary (including taxable benefits)

126,389

 

106,513

Share-based payments

21,957

 

22,866

Pension contributions

6,300

 

6,000

 

154,646

 

135,379

 

8        Taxation

 

2018

 

2017

 

£

 

£

Corporation tax:

 

 

 

Current year

123,390

 

117,738

Adjustment in respect of prior years

-

 

(18,064)

 

123,390

 

99,674

 

 

 

 

Deferred tax charge

-

 

11,671

 

123,390

 

111,345

 

 

 

 

The tax charge for the year can be reconciled to the profit in the income statement as follows:

 

2018

 

2017

 

£

 

£

 

 

 

 

Profit before taxation

528,074

 

515,555

 

 

 

 

Tax at the UK corporation tax rate of 19% (2017: 20%)

100,334

 

103,111

 

 

 

 

Expenses not deductible

23,056

 

26,298

Adjustment in respect of prior years

-

 

(18,064)

 

23,056

 

8,234

 

 

 

 

Tax expense for the year

123,390

 

111,345

 

9        Earnings per share

Basic earnings per share is calculated by dividing the profit after tax attributable to the equity holders of the Group by the weighted average number of shares in issue during the year.  Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all potential dilutive shares, namely share options.

 

2018

 

2017

 

£

 

£

Profit after tax attributable to owners of the parent

404,684

 

404,210

Weighted average number of shares

 

 

 

-      Basic

33,746,926

 

32,633,381

-      Diluted

38,429,011

 

37,301,635

 

 

 

 

Basic earnings per share

1.20p

 

1.24p

Diluted earnings per share

1.05p

 

1.08p

 

 

 

10      Goodwill

Group

 

 

Goodwill

 

 

 

£

Cost

 

 

 

At 1 April 2016

 

 

317,688

Additions

 

 

-

At 31 March 2017

 

 

317,688

Additions

 

 

1,710,000

At 31 March 2018

 

 

2,027,688

 

 

 

 

Accumulated impairment losses

 

 

 

At 1 April 2016 and 31 March 2017

 

 

-

Impairment losses for the year

 

 

-

At 31 March 2018

 

 

-

 

 

 

 

Net book value

 

 

 

At 1 April 2016

 

 

317,688

At 31 March 2017

 

 

317,688

At 31 March 2018

 

 

2,027,688

 

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units that are expected to benefit from that business combination.

On 27th October 2017, the Group acquired the business of pod LLP and pod Partnership Limited for a fair value consideration of £1,710,000, satisfied by cash consideration of £625,000 and 2,614,458 shares issued at the market price of 41.5p per share.  Acquisition related costs of £26,307 have been recognised as an expense in Administrative expenses in the Statement of comprehensive income.

The Group tests goodwill annually for impairment, or more frequently if there are any indications that goodwill might be impaired.

The recoverable amount of goodwill is determined from value in use calculations.  The key assumptions for the value in use calculations are those regarding growth rate of client base and project fees.  Management's approach to determining the values to each key assumption is based on past experience and project work already secured for future periods.  Management have projected cash flows over a period of 5 years, based on a minimum average growth rate of 10% per annum.  Projected cash flows have been discounted at a rate of 5%.

 

 

11      Property, plant and equipment

Group

Fixtures and fittings

Computer equipment

Total

 

£

£

£

Cost

 

 

 

At 1 April 2016

-

20,111

20,111

Additions

34,339

13,260

47,599

At 31 March 2017

34,339

33,371

67,710

Additions

-

76,827

76,827

At 31 March 2018

34,339

110,198

144,537

 

 

 

 

Accumulated depreciation

 

 

 

At 1 April 2016

-

5,457

5,457

Charge for the year

953

10,741

11,694

At 31 March 2017

953

16,198

17,151

Charge for the year

11,435

20,204

31,639

At 31 March 2018

12,388

36,402

48,790

 

 

 

 

Net book value

 

 

 

At 1 April 2016

-

14,654

14,654

At 31 March 2017

33,386

17,173

50,559

At 31 March 2018

21,951

73,796

95,747

 

Company

 

 

Computer equipment

 

 

 

£

Cost

 

 

 

At 1 April 2016

 

 

-

Additions

 

 

-

At 31 March 2017

 

 

-

Additions

 

 

64,322

At 31 March 2018

 

 

64,322

 

 

 

 

Accumulated depreciation

 

 

 

At 1 April 2016

 

 

-

Charge for the year

 

 

-

At 31 March 2017

 

 

-

Charge for the year

 

 

5,355

At 31 March 2018

 

 

5,355

 

 

 

 

Net book value

 

 

 

At 1 April 2016

 

 

-

At 31 March 2017

 

 

-

At 31 March 2018

 

 

58,967

 

 

12      Investment in subsidiaries

Company

 

 

Investments

 

 

 

in subsidiaries

 

 

 

 

£

 

Cost

 

 

 

 

At 1 April 2016

 

 

9,602,280

 

Additions

 

 

147,651

 

At 31 March 2017

 

 

9,749,931

 

Additions

 

 

135,262

 

At 31 March 2018

 

 

9,885,193

 

 

 

 

 

 

 

Accumulated impairment losses

 

 

 

 

At 1 April 2016 and 31 March 2017

 

 

-

 

Impairment losses for the year

 

 

-

 

At 31 March 2018

 

 

-

 

 

 

 

 

 

Net book value

 

 

 

 

At 1 April 2016

 

 

9,602,280

 

At 31 March 2017

 

 

9,749,931

 

At 31 March 2018

 

 

9,885,193

 

 

 

 

 

 

 

The addition of £135,262 represents capital contributions made to the Company's subsidiaries in respect of the share option expense recognised in those subsidiaries on share options issued by the Company.

 

 

 

Details of the Company's subsidiaries at 31 March 2018 are as follows:

 

 

 

 

 

 

 

Place of incorporation and operation

Principal activity

Proportion of ownership and voting rights held

 

 

 

 

 

 

Altair Consultancy and Advisory Services Limited

England and Wales

Specialist housing consultancy

100%

 

Aquila Treasury and Finance Solutions Limited

England and Wales

Treasury management consultancy

100%

 

               

 

The accounting reference date of each of the subsidiaries is co-terminus with that of the Company.  The registered office of each subsidiary is Tempus Wharf, 29a Bermondsey Wall West, London, SE16 4SA.

 

 

13      Investment in Associates

Details of the Group's material associates at 31 March 2018 are as follows:

 

Place of incorporation and operation

Principal activity

Proportion of ownership and voting rights held

 

 

 

 

3C Consultants Limited

England and Wales

IT consultancy

25%

 

The principal activity of the associate is seen as complementing the Group's operations and contributing to achieving the Group's overall strategy.

The above associate is accounted for using the equity method in these consolidated financial statements as set out in the accounting policies in note 2.

Summarised financial information in respect of the Group's associates are set out below:

3C Consultants Limited

 

 

 

 

 

 

Year ended

31 March 2018

 

 

 

 

 

 

 

£

Current assets

 

 

 

 

 

 

400,410

Non-current assets

 

 

 

 

 

 

2,210

Current liabilities

 

 

 

 

 

 

(282,983)

Non-current liabilities

 

 

 

 

 

 

(81,986)

Equity attributable to owners of the Company

 

 

 

37,651

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

1,000,905

Profit or loss from continuing operations

 

 

 

 

 

 

(54,838)

Post-tax profit or loss from discontinued operations

 

 

 

-

Profit/(loss) for the year

 

 

 

 

 

 

(54,838)

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

-

Total comprehensive income

 

 

 

 

 

 

(54,838)

 

 

 

 

 

 

 

 

Dividends received from associate during the year

 

 

 

-

                 

 

Reconciliation of the above summarised financial information to the carrying amount recognised in the consolidated financial statements:

 

 

 

 

 

 

 

2018

 

 

 

 

 

 

 

£

Net assets of associates

 

 

 

 

 

 

37,651

 

 

 

Proportion of the Group's ownership interest in the associate

 

9,413

Goodwill

 

 

 

 

 

 

217,207

Carrying amount

 

 

 

226,620

 

 

 

 

 

 

 

14      Investments

 

 

 

Equity investment

 

 

 

£

Cost

 

 

 

At 1 April 2016

 

 

-

Additions

 

 

-

At 31 March 2017

 

 

-

Additions

 

 

121,104

At 31 March 2018

 

 

121,104

 

 

 

 

Accumulated impairment losses

 

 

 

At 1 April 2016 and 31 March 2017

 

 

-

Impairment losses for the year

 

 

-

At 31 March 2018

 

 

-

 

 

 

 

Net book value

 

 

 

At 1 April 2016

 

 

-

At 31 March 2017

 

 

-

At 31 March 2018

 

 

121,104

 

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured is held at cost less impairment.

15      Trade and other receivables

 

Group

 

Group

 

Company

 

Company

 

2018

 

2017

 

2018

 

2017

 

£

 

£

 

£

 

£

 

 

 

 

 

 

 

 

Trade receivables

1,815,073

 

1,153,940

 

-

 

-

Group undertakings

-

 

-

 

1,124,665

 

-

Other receivables

24,115

 

11,055

 

2,259

 

47

Prepayments and accrued income

270,490

 

185,192

 

575

 

-

 

2,109,678

 

1,350,187

 

1,127,499

 

47

 

 

 

 

 

 

 

 

The directors consider that the carrying amount of trade receivables approximates to their fair value.  Trade and other receivables are not considered impaired.

 

The aged profile of trade receivables not impaired is as follows:

 

Total

 

<30 days

 

30-60 days

 

66-90 days

>90 days

 

£

 

£

 

£

 

£

 

£

31 March 2018

1,815,073

 

1,650,520

 

-

 

76,495

 

88,058

31 March 2017

1,153,940

 

774,753

 

299,432

 

30,933

 

48,822

 

 

16      Trade and other payables

 

 

Group

 

Group

 

Company

 

Company

 

2018

 

2017

 

2018

 

2017

 

£

 

£

 

£

 

£

 

 

 

 

 

 

 

 

Trade payables

254,782

 

274,420

 

12,505

 

140

Other payables

88,063

 

27,668

 

65,770

 

-

Amounts owed to Group undertakings

-

 

-

 

500,000

 

183,865

Taxes and social security costs

200,487

 

341,020

 

-

 

-

Accruals and deferred income

551,358

 

308,815

 

38,696

 

33,375

 

1,094,690

 

951,923

 

616,971

 

217,380

 

 

 

 

 

 

 

 

The directors consider that the carrying amount of trade payables approximates to their fair value.

 

Included in other payables is £65,770 in respect of contingent consideration on the acquisition of investment in associate.  There is minimal uncertainty with regard to the amount and timing of the outflow.

 

17      Share capital

 

2018

 

2017

 

£

 

£

Allotted, called up and fully paid

 

 

 

35,265,461 (2017: 32,651,003) Ordinary shares of 5p each

1,763,273

 

1,632,550

 

 

 

 

The Company has one class Ordinary share which carries no right to fixed income.  Each share carries the right to one vote at general meetings of the Company.

A reconciliation of share capital, share premium account and merger reserve is set out below:

 

Number of Ordinary shares

Amount called up and fully paid

Share premium

Merger reserve

 

 

£

£

£

At 1 April 2016

32,608,688

1,630,434

533,235

7,184,334

Issued at 5p per share on

   31 August 2016

42,315

2,116

-

-

At 31 March 2017

32,651,003

1,632,550

533,235

7,184,334

Issued at 41.5p per share on

   27 October 2017

2,614,458

130,723

954,277

-

At 31 March 2018

35,265,461

1,763,273

1,487,512

7,184,334

 

 

 

18      Reserves

The share premium account represents the amount received on the issue of Ordinary shares by the Company in excess of their nominal value and is non-distributable.

The merger relief reserve arose on the Company's acquisition of Altair.  There is no legal share premium on the shares issued as consideration as section 612 of the Companies Act 2006, which deals with merger relief, applies in respect of the acquisition.

The reverse acquisition reserve arises due to the elimination of the Company's investment in Altair.  Since the shareholders of Altair became the majority shareholders of the enlarged group, the acquisition is accounted for as though the legal acquiree is the accounting acquirer.

19      Dividends

 

2018

 

2017

Amounts recognised as distributions to equity holders

£

 

£

Final dividend for the year ended 31 March 2017 of 0.50p per share (2016: 0.44p)

163,255

 

143,478

Interim dividend for the year ended 31 March 2018 of 0.26p per share (2017: 0.24p)

91,690

 

78,362

 

254,945

 

221,840

Proposed final dividend for the year ended 31 March 2018 of 0.55p per share (2017: 0.50p)

193,960

 

163,255

 

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.  The proposed dividend is payable on 3 August 2018 to shareholders on the Register of Members at 20 July 2018.  The total recommended dividend to be paid is 0.55p per share.  The payment of this dividend will not have any tax consequences for the Group.

20      Share-based payment transactions

The Company operates an Unapproved Scheme and an Enterprise Management Incentives Scheme.  The total expense recognised in the year to 31 March 2018 arising from share-based payment transactions is £135,262 (2017: £147,651).

Unapproved scheme

Number

Weighted average exercise price

 

 

 

Number of options outstanding at 1 April 2017

2,587,093

£0.23

Granted during period

-

-

Forfeited during period

-

-

Exercised during period

-

-

Number of options outstanding as at 31 March 2018

2,587,093

£0.23

 

 

 

Number of options exercisable as at 31 March 2018

2,587,093

£0.23

 

 

 

The exercise price of the options outstanding at 31 March 2018 ranges between £0.10 and £0.42.  The weighted average remaining contractual life of the options outstanding at 31 March 2018 is 2 years (2017: 3 years).

 

 

 

EMI scheme

Number

Weighted average exercise price

 

 

 

Number of options outstanding at 1 April 2017

2,119,141

£0.05

Granted during period

-

-

Forfeited during period

(41,158)

£0.05

Exercised during period

-

-

Number of options outstanding as at 31 March 2018

2,077,983

£0.05

 

Number of options exercisable as at 31 March 2018

1,607,983

£0.05

 

The weighted average remaining contractual life of the options outstanding at 31 March 2018 is 7 years (2016: 8 years).

21      Operating lease arrangements

At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

 

 

 

 

 

2018

 

2017

 

£

 

£

 

 

 

 

Within one year

49,650

 

49,650

In the second to fifth years inclusive

21,524

 

71,106

 

71,174

 

120,756

 

 

 

 

Operating lease payments represent rentals payable by the Group for certain of its office properties.

 

22      Remuneration of key management personnel

The remuneration of the key management personnel of the Group, including all directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.

 

2018

 

2017

 

£

 

£

 

 

 

 

Short-term employee benefits

571,880

 

694,790

Share-based payments

113,000

 

112,956

Post-retirement benefits

17,700

 

12,000

 

702,580

 

819,746

 

 

 

23      Related party disclosures

Balances and transactions between the Group and other related parties are disclosed below:

Dividends totalling £171,722 (2017: £153,646) were paid in the year in respect of Ordinary shares held by the Company's directors.

During the year the Group charged £12,327 (2017: £24,060) to DMJ Consultancy Services Limited for administrative services, a company in which Derek Joseph serves as a director.  At 31 March 2018, the balance owed to the Group by DMJ Consulting Limited was £5,000 (2017: £14,436).

During the year the Group was charged £nil (2017: £257) by Jeffrey Zitron for consultancy services.

At 31 March 2018, the balance owed to Richard Wollenberg for services as a non-executive director were £4,000 (2017: £1,906).

24      Retirement benefit schemes

Defined contribution schemes

2018

 

2017

 

£

 

£

 

 

 

 

Contributions payable by the Group for the year

96,160

 

88,565

 

25      Control

In the opinion of the Directors there is no single ultimate controlling party.

26      Financial instruments

Financial risk management

The Group's activities are exposed to a variety of market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.

Credit risk

Credit risk is the risk of financial loss to the Group resulting from counterparties failing to discharge their obligations to the Group.  The Group's principal financial assets are trade and other receivables and cash and cash equivalents.

The Group considers its credit risk to be low.  Of the total trade receivables at the 2018 year end, £121,626 (2017: £107,604) is due from one customer.  There are no other customers that represent more than 7% of the total balance of trade receivables.  The maximum exposure to credit risk is equal to the carrying value of these instruments.

Liquidity risk

Liquidity risk is the risk of the Group being unable to meet its liabilities as they fall due.  The Group manages liquidity risk by maintaining sufficient cash reserves and holding banking facilities, and by continuously monitoring forecast and actual cash flows.  In addition, the Group is a cash generative business with income being received regularly over the course of the year.  The Group held cash reserves of £969,987 (2017: £2,312,600) at the year-end.

Foreign currency risk

Foreign exchange risk is the risk of loss due to adverse movements in the exchange rates affecting the Group's profits and cash flows.  Only a very small number of clients are invoiced in Euros and USD and the foreign exchange exposure is not considered a significant risk.  The Group's principal financial assets are cash and cash equivalents and trade and other receivables, which are almost exclusively denominated in Pounds Sterling.

Interest rate risk

The Group does not undertake any hedging activity in this area.  The main element in interest rate risk involves sterling deposits which are placed on deposit.

Capital risk management

Internal working capital requirements are low and are regularly monitored.  Externally imposed capital requirements to which the Group is subject have been complied with in the year.

27      Post Balance Sheet event

There are no post balance sheet events.

28      Capital commitments

There were no capital commitments at 31 March 2018.

29      Contingent liabilities

There were no contingent liabilities at 31 March 2018.

 

 

Aquila Services Group plc

 

Notice of Annual General Meeting

 

Notice is hereby given that the Annual General Meeting of Aquila Services Group plc will be held at Tempus Wharf 29A, Bermondsey Wall West, London, SE16 4SA on 31 July 2018 at 4:30 pm, for the purpose of considering and, if thought fit, passing the following resolutions, of which resolutions numbered 1 to 9 and 11 will be proposed as ordinary resolutions and resolution 10 will be proposed as a special resolution:

 

Ordinary business

 

1.       To receive the reports of the directors and auditor and the financial statements for the period ended 31 March 2018.

 

2.       To approve the remuneration report for the period ended 31 March 2018.

 

3.       To approve the revised remuneration policy as implemented from 1 October 2017.

 

4.       That, following a recommendation by the directors, a final dividend payment of 0.55p per Ordinary Share shall be paid to those persons who were named on the register of shareholders on 20 July 2018.

 

5.       That Saffery Champness LLP be and is hereby reappointed as auditor of the Company and that the directors be authorised to determine the auditor's remuneration.

 

6.       To re-elect as a director, Derek Joseph, who was appointed at the AGM held on 19 August 2015.

 

7.       To re-elect as a director, Richard Wollenberg, who was appointed at the AGM held on 19 August 2015.

 

8.       To re-elect as a director, Jeff Zitron, who was appointed at the AGM held on 19 August 2015.

 

Special business

 

9.       That, in accordance with section 551 of the Companies Act 2006 ("CA 2006"), the directors be generally and unconditionally authorised to issue and allot equity securities (as defined by section 560 of the CA 2006) up to an aggregate nominal amount of:

 

     9.1     £209,755 in connection with the valid exercise of the options (both approved and unapproved) granted by the Company (as set out in the prospectus issued by the Company dated 20th July 2015), any unapproved options granted to current or former officers of the Company and options granted to employees and officers of the Company and/or its subsidiaries in accordance with the terms of the Company's Employee Share Option Scheme ("Options"); and

 

     9.2     in any other case, £587,758 (such amount to be reduced by the nominal amount of any equity securities allotted pursuant to the authorities in paragraph 9.1 above in excess of the stated amount)

 

          provided that this authority shall, unless renewed, varied or revoked by the Company, expire on the date of the next annual general meeting of the Company save that the Company may, before such expiry, make offers or agreements which would or might require relevant securities to be allotted and the directors may allot relevant securities in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired.

 

     This resolution revokes and replaces all unexercised authorities previously granted to the directors to allot relevant securities but without prejudice to any allotment of shares or grant of rights already made, offered or agreed to be made pursuant to such authorities.

10.     That, subject to Resolution 9 above being duly passed, the directors of the Company be and are hereby empowered, pursuant to section 570 of the CA 2006, to allot equity securities (as defined in section 560 of the CA 2006) wholly for cash pursuant to the authority conferred upon them by Resolution 9 above (as varied, renewed or revoked from time to time by the Company at a general meeting) as if section 561(1) of the CA 2006 did not apply to any such allotment provided that such power shall be limited to the allotment of equity securities:

 

10.1   in connection with a rights issue or any other pre-emptive offer in favour of holders of equity securities where the equity securities offered to each such holder is proportionate (as nearly as may be) to the respective amounts of equity securities held by each such holder subject only to such exclusion or other arrangements as the Directors may consider appropriate to deal with fractional entitlements or legal or practical difficulties under the laws of or the requirements of any recognised regulatory body in any territory or otherwise;

 

10.2   in connection with the valid exercise of Options;

 

10.3   in connection with the valid exercise of any share options granted to employees of the Group in accordance with the terms of the Employee Share Option Scheme; and

 

10.4   otherwise, up to a maximum nominal amount of £88,163.

 

The power granted by this resolution will expire on the conclusion of the Company's next annual general meeting (unless renewed, varied or revoked by the Company prior to or on such date) save that the Company may, before such expiry make offers or agreements which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired.

 

This resolution revokes and replaces all unexercised powers previously granted to the directors to allot equity securities as if section 561(1) of the CA 2006 did not apply but without prejudice to any allotment of equity securities already made or agreed to be made pursuant to such authorities.

 

11.     That the Company be and is hereby authorised generally and unconditionally to make market purchases (within the meaning of section 693(4) of the CA 2006) of its ordinary shares ("Ordinary Shares") provided that:

 

     11.1   the maximum aggregate number of Ordinary Shares that may be purchased is 3,526,546;

 

     11.2   the minimum price (exclusive of expenses) which may be paid for an Ordinary Share is £0.05;

 

     11.3   the maximum price (exclusive of expenses) which may be paid for an Ordinary Share is the higher of:

 

            (a)        105 per cent of the average closing middle market quotations for the Ordinary Shares as quoted on the Official List of the London Stock Exchange for the five business days prior to the day the purchase is made; and

            (b)        the value of an Ordinary Share calculated on the basis of the higher of the price quoted for:

 

                        (i)        the last independent trade of; and

                        (ii)       the highest current independent bid for any number of Ordinary Shares on the

                                   Official List.

 

     11.4   The authority conferred by this resolution shall expire on the conclusion of the Company's next annual general meeting save that the Company may, before the expiry of the authority granted by this resolution, enter into a contract to purchase Ordinary Shares which will or may be executed wholly or partly after the expiry of such authority.

 

Registered office:                                                                          By order of the board

Tempus Wharf                                                                                 Dr Fiona May Underwood

29a Bermondsey Wall West                                                            Company Secretary

London

SE16 4SA                                                                                         27 June 2018

 

Notes

 

1.          A member entitled to attend and vote at the above meeting is entitled to appoint a proxy to exercise all or any of their rights to attend, speak and vote on his/her behalf at the meeting.  A proxy need not be a member of the company.

 

2.          You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share.  To appoint more than one proxy you may photocopy the form of proxy.  Please indicate the proxy holder's name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given.  All forms must be signed and should be returned together in the same envelope.

 

3.          A form of proxy accompanies this notice. Forms of proxy, to be valid, must be delivered to the company's registrars, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen B63 3DA in accordance with the instructions printed thereon, not less than 48 hours before the time appointed for the holding of the meeting.

 

4.          If you are not a member of the company but you have been nominated under section 146 of the Companies Act 2006 (the 'Act') by a member of the company to enjoy information rights, you do not have the rights of members in relation to the appointment of proxies set out in notes 1, 2 and 3.  The rights described in those notes can only be exercised by members of the company.

 

5.          A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If you either select the "Withheld" option or if no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting.

 

6.          Information regarding the meeting, including the information required by section 311A of the Act, is available from www.aquilaservicesgroup.co.uk 

 

7.          As provided by Regulation 41 of the Uncertificated Securities Regulations 2001, only those members registered in the register of members of the company 48 hours before the time set for the meeting shall be entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that time.  Changes to entries on the relevant register of securities after that time shall be disregarded in determining the rights of any person to attend or vote at the meeting.

 

8.          As at close of business on 27 June 2018 the company's issued share capital comprised 35,265,461 ordinary shares of 5 pence each. Each ordinary share carries the right to one vote at a general meeting of the company and, therefore, the total number of voting rights in the company at close of business on 27 June 2018 is 35,265,461.

 

9.          Under section 319A of the Act, the company must answer any question you ask relating to the business being dealt with at the meeting unless (a) answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is undesirable in the interests of the company or the good order of the meeting that the question be answered.

 

10.        If you are a person who has been nominated under section 146 of the Act to enjoy information rights (a 'Nominated Person'), you may have a right under an agreement between you and the member of the company who has nominated you to have information rights (a 'Relevant Member') to be appointed or to have someone else appointed as a proxy for the meeting.  If you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right under an agreement between you and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights.  Your main point of contact in terms of your investment in the company remains the Relevant Member (or, perhaps, your custodian or broker) and you should continue to contact them (and not the company) regarding any changes or queries relating to your personal details and your interest in the company (including any administrative matters).  The only exception to this is where the company expressly requests a response from you.

 

11.        Members satisfying the thresholds in section 338 of the Act may require the company to give, to members of the company entitled to receive notice of the Annual General Meeting, notice of a resolution which those members intend to move (and which may properly be moved) at the Annual General Meeting.  A resolution may properly be moved at the Annual General Meeting unless (i) it would, if passed, be ineffective (whether by reason of any inconsistency with any enactment or the company's constitution or otherwise); (ii) it is defamatory of any person; or (iii) it is frivolous or vexatious.  The business which may be dealt with at the Annual General Meeting includes a resolution circulated pursuant to this right.  A request made pursuant to this right may be in hard copy or electronic form, must identify the resolution of which notice is to be given, must be authenticated by the person(s) making it and must be received by the company not later than 6 weeks before the date of the Annual General Meeting.

 

12.        Members satisfying the thresholds in section 338A of the Act may request the company to include in the business to be dealt with at the Annual General Meeting any matter (other than a proposed resolution) which may properly be included in the business at the Annual General Meeting.  A matter may properly be included in the business at the Annual General Meeting unless (i) it is defamatory of any person or (ii) it is frivolous or vexatious.  A request made pursuant to this right may be in hard copy or electronic form, must identify the matter to be included in the business, must be accompanied by a statement setting out the grounds for the request, must be authenticated by the person(s) making it and must be received by the company not later than 6 weeks before the date of the Annual General Meeting.

 

13.        Members satisfying the thresholds in section 527 of the Act can require the company to publish a statement on its website setting out any matter relating to (i) the audit of the company's accounts (including the auditor's report and the conduct of the audit) that are to be laid before the Annual General Meeting; or (ii) any circumstances connected with an auditor of the company ceasing to hold office since the last Annual General Meeting, which the members propose to raise at the meeting.  The company cannot require the members requesting the publication to pay its expenses.  Any statement placed on the website must also be sent to the company's auditor no later than the time it makes its statement available on the website.  The business which may be dealt with at the Annual General Meeting includes any statement that the company has been required to publish on its website pursuant to this right.

 

14.        Copies of the directors' service contracts will be available for inspection at the registered office of the company during usual business hours from the date of this notice until the date of the Annual General Meeting, and also during and at least fifteen minutes before the beginning of the Annual General Meeting.


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.
 
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Annual report for the year to end 31 March 2018 - RNS