Regulatory Story
Go to market news section View chart   Print
RNS
Triad Group Plc  -  TRD   

Half-year Report

Released 07:00 27-Nov-2018

RNS Number : 5335I
Triad Group Plc
27 November 2018
 

Legal Entity Identifier (LEI) No. 213800MDNBFVEQEN1G84

 

 

Triad Group Plc

Half year results for the six months ended 30 September 2018

 

Chairman's Statement

Financial Highlights

·    Revenue for the six months ended 30 September 2018: £11.85m (2017: £14.24m)

·    Profit after tax: £0.48m (2017: £0.76m)

·    Profit from operations: £0.52m (2017: £0.74m)

·    Earnings before interest, tax, amortisation and depreciation: £0.55m (2017: £0.77m)

·    Gross profit as a percentage of revenue: 18.5% (2017: 16.8%) 

·    Cash as at 30 September 2018: £3.85m (2017: £2.00m)              

Business Review

Challenging market conditions have seen revenue for the first six months of the financial year decrease to £11.85m (2017: £14.24m). Despite this the Group continues to make steady progress strengthening the underlying performance of the business.

 

Encouragingly, gross margin as a percentage of revenue has increased to 18.5% (2017: 16.8%) as a result of improved utilisation of our permanent consultants and the continued reduction in a low margin, high revenue, staffing contract with a retail bank that has been converting its contractor staff to permanent staff to pre-empt the forthcoming off-payroll reforms in the private sector.

 

Revenue has also decreased across several public sector accounts as a result of re-procurements. Additionally, revenue has been impacted by the decision of one of our largest clients to reduce their requirements for GIS technical services during the period due to reduced demand from their end client.

 

The Group's cash position remains extremely healthy. As at 30 September 2018 cash has increased to £3.85m (2017: £2.00m).

 

Triad teams have continued to be engaged in significant programmes of work at Ministry of Justice, Department for Transport, Home Office, Ofgem, Highways England and the Police. Our GIS team continues to provide expertise to a number of private sector clients.  Many of our assignments involve the translation of complex business logic into accessible digital services, and our skill in this domain is becoming widely recognised, particularly in the public sector.

 

The Group has made good progress with a number of business development activities aimed at strengthening our profile and increasing our client base across the public and private sectors. 

Significant work is underway to develop new opportunities through engagement on new public sector frameworks and targeted campaigns in the private sector.  Initiatives around the digital skills shortage, Microsoft's cloud strategy and the effect of legacy systems on digital transformation plans have resulted in very encouraging conversations with technology leaders in the private and not-for-profit sectors. During the period Triad has been successful in being awarded a place on the G-Cloud 10 and DOS 3 frameworks

 

The launch of our new website has been well received by clients and prospects, providing a platform for the dissemination of valuable content from Triad consultants and other contributors.  Our first round table event in London was launched, and received extremely positive reviews from the audience of senior technology executives involved.

 

Consultant headcount has risen steadily during the period and the Group continues to search for and recruit quality individuals. All of our newly-recruited consultants have been deployed on longer-term engagements, which should flow through into further margin improvements.

Our business development team has also been strengthened and, in conjunction with improved lead generation activities, is making improvements to the quality of the sales pipeline.

 

Outlook

The market remains intensely competitive and, against a backdrop of political and economic uncertainty, the Group remains focused on generating profit and cash.  The transition from a business heavily dependent on contractors to one which is consultant-led continues.  The plan is to recruit more permanent consultants and to maintain high levels of utilisation and to use our integrated resourcing capabilities to augment our teams with carefully selected associates and contractors.

 

Some uncertainty has been removed, to an extent, following the Government's recent budget announcement, confirming that the widely expected off-payroll reforms in the private sector would not be introduced until April 2020. 

 

 

The Company is aware of numerous unfounded comments from a major shareholder appearing on social media, relating to its officers and professional advisers. The Company is taking this matter extremely seriously and has sought appropriate legal advice.

 

Dividend

The Board has declared an interim dividend of 1p (2017: 0.5p). See note 4.

Employees

On behalf of the Board I would like to thank staff for their continued hard work and dedication.

 

John Rigg

Chairman

26 November 2018



Unaudited condensed consolidated statement of comprehensive income and expense

 

 


Note

Unaudited

Six months

ended

30 September

2018

£'000

Unaudited

Six months

ended

30 September

2017

£'000

Audited

Year

ended

31 March

 2018

£'000






Revenue


11,849

14,237

27,819






Cost of sales


(9,655)

(11,839)

(23,095)



--------------

--------------

--------------

Gross profit


2,194

2,398

4,724






Administrative expenses


(1,678)

(1,653)

(3,045)



--------------

--------------

--------------






Profit from operations


516

745

1,679






Finance expense

5

(1)

(9)

(17)






Finance income


-

1

-








--------------

--------------

--------------

Profit before tax


515

737

1,662






Tax (charge)/credit

6

(36)

18

(38)








--------------

--------------

--------------

Profit for the period and total comprehensive income attributable to equity holders of the parent


 

 

479

 

 

755

 

 

1,624



--------------

--------------

--------------











Basic earnings per share

7

3.05p

4.87p

10.45p



--------------

--------------

--------------

 

 





Diluted earnings per share

7

2.92p

4.67p

10.02p



--------------

--------------

--------------






 

 

All amounts relate to continuing activities.



Unaudited condensed consolidated statement of changes in equity

 

 






Share

Capital

Share premium account

Capital redemption reserve

Retained earnings

Total


£'000

£'000

£'000

£'000

£'000







At 1 April 2017

155

605

104

2,775

3,639







Profit for the period and total comprehensive income

 

-

 

-

 

-

 

755

 

755

 

Dividend paid

 

 

-

 

-

 

-

 

(77)

 

(77)

Issue of shares

-

6

-

-

6







Share-based payments

-

-

-

2

2


--------

--------

--------

--------

--------

At 30 September 2017

155

611

104

3,455

4,325


---------

---------

---------

---------

---------













At 1 April 2018

156

619

104

4,246

5,125







Profit for the period and total comprehensive income

 

-

 

-

 

-

 

479

 

479







Dividend paid

-

-

-

(158)

(158)







Issue of shares

2

23

-

-

25







Share-based payments

-

-

-

14

14


--------

--------

--------

--------

--------

At 30 September 2018

158

642

104

4,581

5,485


---------

---------

---------

---------

---------













At 1 April 2017

155

605

104

2,775

3,639







Profit for the year and total comprehensive income

 

-

 

-

 

-

 

1,624

 

1,624

 

Dividend paid

 

 

-

 

-

 

-

 

(155)

 

(155)

Issue of shares

1

14

-

-

15







Share-based payments

-

-

-

2

2








--------

--------

--------

--------

--------

At 31 March 2018

156

619

104

4,246

5,125


---------

---------

---------

---------

---------









Unaudited condensed consolidated statement of financial position

 

 


Note

Unaudited

30 September

 2018

£'000

Unaudited

30 September

 2017

£'000

Audited

31 March

 2018

£'000






Non-current assets










Intangible assets


19

6

4

Property, plant and equipment


123

105

136

Deferred tax


287

379

323



--------------

--------------

--------------



429

490

463



--------------

--------------

--------------






Current assets










Trade and other receivables


3,336

5,164

3,985

Cash and cash equivalents


3,848

2,001

3,751



--------------

--------------

--------------



7,184

7,165

7,736



--------------

--------------

--------------






Total assets


7,613

7,655

8,199






Current liabilities










Trade and other payables


(2,035)

(2,994)

(2,895)

Financial liabilities


(3)

-

(3)

Short term provisions


-

(285)

(99)



--------------

--------------

--------------



(2,038)

(3,279)

(2,997)



--------------

--------------

--------------






Non-current liabilities










Financial liabilities


(18)

-

(20)

Long term provisions


(72)

(51)

(57)



--------------

--------------

--------------



(90)

(51)

(77)



--------------

--------------

--------------






Total liabilities


(2,128)

(3,330)

(3,074)








--------------

--------------

--------------

Net assets


5,485

4,325

5,125



--------------

--------------

--------------






Shareholders' equity










Share capital


158

155

156

Share premium account


642

611

619

Capital redemption reserve


104

104

104

Retained earnings


4,581

3,455

4,246



--------------

--------------

--------------

Total shareholders' equity


5,485

4,325

5,125



--------------

--------------

--------------

 



Unaudited condensed consolidated statement of cash flows

 

 

Note

Unaudited

Six months

ended

30 September

 2018

£'000

Unaudited

Six months

ended

30 September

 2017

£'000

Audited

Year

ended

31 March

 2018

£'000






Profit for the period before taxation


515

737

1,662






Adjustments for:





Depreciation of property, plant and equipment


32

31

62

Amortisation of intangible assets


3

2

4

Interest expense

Unwinding of discount on provisions

Profit on disposal of tangible assets


1

-

-

2

-

-

4

13

(11)

Share-based payment expense


14

2

2






Changes in working capital










Decrease/(Increase) in trade and other receivables


649

(113)

1,066

Decrease in trade and other payables


(860)

(708)

(807)

Decrease in provisions


(84)

(114)

(294)



--------------

--------------

--------------

Cash generated/(consumed) by operations


270

(161)

1,701






Interest paid


(1)

(2)

(17)

Tax received


-

-

-



--------------

--------------

--------------

Net cash flows from operating activities


269

(163)

1,684



--------------

--------------

--------------






Cash flows used in investing activities










Purchase of intangible assets

Proceeds from sale of property, plant and equipment


(18)

-

-

-

-

11

Purchase of property, plant and equipment


(19)

(2)

(29)



--------------

--------------

--------------

Net cash used in investing activities


(37)

(2)

(18)



--------------

--------------

--------------

Cash flows from financing activities










Finance lease principal payments


(2)

(11)

(23)

Proceeds of issue of shares


25

6

15

Dividend paid

4

(158)

(77)

(155)



--------------

--------------

--------------

Net cash flows from investing activities


(135)

(82)

(163)



--------------

--------------

--------------






Net increase/(decrease) in cash and cash equivalents


 

97

 

(247)

 

1,503






Cash and cash equivalents at beginning of the period


 

3,751

 

2,248

 

2,248



--------------

--------------

--------------

Cash and cash equivalents at end of the period


 

3,848

 

2,001

 

3,751



--------------

--------------

--------------



Notes to the interim report

 

 

1. General information

 

The interim financial information set out above and overleaf does not constitute statutory accounts and has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. It has been approved by the Board of Directors on 26 November 2018.

 

 

2. Basis of preparation

 

The comparative figures for the year ended 31 March 2018 are not the Group's statutory accounts for the financial year. Those accounts have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

 

These financial statements have been prepared using accounting policies the Group expects to be applicable at 31 March 2019, in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and with the Disclosure and Transparency Rules of the Financial Services Authority, and in accordance with the requirements of IAS 34, Interim Financial Reporting, and with the accounting policies set out in the statutory accounts of Triad Group Plc for the year ended 31 March 2018. These financial statements reflect the new accounting standard IFRS 15 (Revenue from Contracts with Customers) and Amendments to IFRS 9 Financial Instruments) which became effective from 1 April 2018, and have been applied retrospectively.

 

The estimates and assumptions applied in the interim financial information were the same as those applied in the last Group statutory accounts for the year ended 31 March 2018.

 

 

3. Going Concern

 

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half year results.

 

 

4. Dividend

 

The Board has declared a dividend of 1p for the period to 30 September 2018 (2017: 0.5p). 

 

The Company will pay the dividend on 11 January 2019 to all shareholders on the register of members of the Company at the close of business on 7 December 2018. The ex-dividend date will be on 6 December 2018.

 

During the period a final dividend for the year ended 31 March 2018 of £158,000 was paid.

 



5. Finance expense

 


Unaudited

Six months

ended

30 September

2018

£'000

Unaudited

Six months

ended

30 September

 2017

£'000

Audited

Year

ended

31 March

 2018

£'000

 

 

Bank interest expense

 

 

1

 

 

2

 

 

3





Other interest expense

-

-

1


--------------

--------------

--------------





Total interest expense

1

2

4





Unwinding of discount on provisions

-

7

13


--------------

--------------

--------------

Total finance expense

1

9

17


--------------

--------------

--------------

 

 

 

 

 

6. Tax credit

 


Unaudited

Six months

ended

30 September

2018

£'000

Unaudited

Six months

ended

30 September

 2017

£'000

Audited

Year

ended

31 March

 2018

£'000

Current tax




Current tax on profits for the period

-

-

-





 

Deferred tax








Decrease/(increase) in recognised deferred tax asset

 

36

 

(18)

 

38


--------------

--------------

--------------

Total tax charge (credit) for the period

36

(18)

38


--------------

--------------

--------------


 

 



The differences between the actual tax credit for the year and the standard rate of corporation tax in the UK applied to profits for the year are as follows:

 


Unaudited

Six months

ended

30 September

2018

£'000

Unaudited

Six months

ended

30 September

 2017

£'000

Audited

Year

ended

31 March

 2018

£'000





Profit before tax

 

515

737

1,662





Profit before tax multiplied by standard rate of corporation tax in the UK of 19%

 

98

 

140

 

316









Expenses not deductible for tax purposes

(20)

3

(12)





Recognition of previously unrecognised deferred tax asset

 

(42)

 

(161)

 

(266)


--------

--------

--------

Tax charge/(credit) for the period

36

(18)

38


---------

---------

---------





 

Deferred tax asset

 





Unaudited

Six months

ended

30 September

2018

£'000

Unaudited

Six months

ended

30 September

 2017

£'000

Audited

Year

ended

31 March

 2018

£'000

The movement is deferred tax is as follows:

 




At beginning of period

323

361

361





Utilisation against taxable profits

(78)

(143)

(304)





Recognition of previously unrecognised deferred tax asset on losses

 

31

 

160

 

276





Increase/(decrease) in relation to timing difference

11

1

(10)






--------

--------

--------

At end of period

287

379

323


---------

---------

---------





Deferred tax assets have been recognised in respect of tax losses where the Directors believe it is probable that the assets will be recovered. A deferred tax asset amounting to £458,000 (2017: £565,000) has not been recognised in respect of trading losses, which can be carried forward indefinitely.



7. Earnings per ordinary share

 

 

Earnings per share have been calculated on the profit for the period divided by the weighted average number of shares in issue during the period based on the following:

 

 

 


 

Unaudited

30 September

 2018

 

Unaudited

30 September

2017

 

Audited

31 March

2018





 

Profit for the period

 

£479,000

 

£755,000

 

£1,624,000


--------------

--------------

--------------





Average number of shares in issue

15,729,405

15,507,586

15,541,786





Effect of dilutive options

655,751

656,019

669,503


--------------

--------------

--------------

Average number of shares in issue plus dilutive options

 

16,385,156

 

16,163,605

 

16,211,289

 

 

--------------

--------------

--------------





Basic earnings per share

3.05p

4.87p

10.45p


--------------

--------------

--------------





Diluted earnings per share

2.92p

4.67p

10.02p


--------------

--------------

--------------

 



8. Financial liabilities

 


Unaudited

Six months

ended

30 September

 2018

£'000

Unaudited

Six months

ended

30 September

 2017

£'000

Audited

Year

ended

31 March

 2018

£'000

 

Current








Finance lease obligations

3

-

3


--------------

--------------

--------------

 

 

Non-Current








Finance lease obligations

18

-

20


--------------

--------------

--------------

 

 

 

 

9. Related party transactions

 

The Group rents one of its offices under contracts expiring in 2028 (with a break clause in 2023). The current annual rents of £215,000 were fixed by independent valuation. JC Rigg, a Director, has notified the Board that he has a 50% beneficial interest in this contract. The balance owed at the period end was £nil (2017: £nil).

 

10. Statement of the directors' responsibilities

 

The Board confirms to the best of their knowledge;

 

·    that the condensed consolidated half year financial statements for the six months to 30 September 2018 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU; and

 

·    that the Half Year Report includes a fair review of the information required by sections 4.2.7R and 4.2.8R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the period and their impact on the condensed consolidated half year financial statements; a description of the principal risks and uncertainties for the remainder of the current financial year; and the disclosure requirements in respect of material related party transactions.

 

By order of the Board

 

 

NE Burrows

Company Secretary

26 November 2018

 

Names of the current Board of Directors can be found on the company website at www.triad.co.uk.

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR UNANRWSAAUAA
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Half-year Report - RNS