TIDMAQSG
RNS Number : 3598I
Aquila Services Group PLC
26 November 2018
For immediate release
26 November 2018
Aquila Services Group plc
Unaudited Interim Results for the six months ended 30 September
2018
Aquila Services Group plc ("the Company"), is the holding
company for Altair Consultancy & Advisory Services Ltd
("Altair") and Aquila Treasury and Finance Solutions Ltd ("ATFS")
which form the Group ("the Group").
The Group's expertise is in the provision, financing and
management of affordable housing by housing associations, local
authorities, government agencies and other non-profit organisations
as well as high level business advice to the property sector.
Results Highlights
6 months to 6 months to Year ended
30 September 30 September 31 March
2018 (unaudited) 2017 (unaudited) 2018 (audited)
GBP000s GBP000s GBP000s
Revenue 3,592 2,524 5,905
Gross Profit 773 676 1,562
Operating Profit 222 193 524
EPS 0.47p 0.42p 1.20p
Declared Dividend per
Share 0.29p 0.26p 0.81p
Cash Balances 1,029 2,238 970
This announcement includes inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014.
For further information please visit
www.aquilaservicesgroup.plc.co.uk or contact:
Aquila Services Group plc
Steve Douglas
Co-Chief executive
Tel: 020 7934 0175
Beaumont Cornish Limited, Financial Adviser
Roland Cornish
Tel: 020 7628 3396
Chairman's Statement and Interim Management Report
Dear Shareholder,
I am pleased to present the half-year report and the interim
results for the 6 months to 30 September 2018.
Aquila Services Group plc ("the Company") is the holding company
for Altair Consultancy & Advisory Services Ltd ("Altair") and
Aquila Treasury and Finance Solutions Ltd ("ATFS") 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 housing related organisations, as well as high level business
advice to the commercial property sector.
The half-year results for the Group demonstrate the
sustainability of our business model and the benefits of investment
in longer term planned growth, both organic and targeted
acquisitions, 3C and AssetCore.
The six months has seen a continuation of the strategy described
in the annual report for the previous financial year. The
streamlining of the executive team to concentrate on our particular
specialisms, the integration of the pod property consultancy
business following its acquisition, the development of our overseas
business following the launch of the Altair Africa brand, and
building our presence in the IT market by acquiring stakes in
established sector businesses.
We are now seeing the results of this strategy starting to work
through to both our turnover and operating profit. We enter the
second half of the year with expectations of continuing progress.
This confidence is reflected in the continuation of our progressive
dividend policy for the half-year.
Trading Results
The Group saw an increase in turnover for the 6 months to 30
September 2018 compared to the 6 months ended 30 September 2017.
Gross profit was GBP773k (September 2017: GBP676k, March 2018:
GBP1,562k) with operating profit before share option charges of
GBP281k (September 2017: GBP263k, March 2018: GBP660k).
6 months 6 months Year ended
to to 31 March
2018
30 September 30 September (GBP000's)
2018 2017
(GBP000's) (GBP000's)
Turnover 3,592 2,524 5,905
Gross Profit 773 676 1,562
Operating profit (before
share options charge) 281 263 659
Share option charge 59 70 135
Operating profit (after
share option charge) 222 193 524
EPS 0.47p 0.42p 1.20p
The Group has a strong net asset position, with over GBP1,029k
in cash held at the 30 September 2018.
Dividend
The Directors propose to declare an interim dividend of 0.29p
(2016: 0.26p) per share, an increase of 11.54% which will be paid
on 21 December 2018 to shareholders on the register at 7 December
2018.
Business Review
The underlying business remains robust and there has been
continuing growth of the client base in both Altair's consultancy
business and the treasury advice business of ATFS. This is
reflected in the increased turnover. Operating profit after the
share option charge increased by 15% in the six months compared to
the previous period. The increase in operating profits is after our
continuing investment in the business. We expect the benefits to
continue as the need to divert resources to implement the new
strategies reduces and the infra-structure we have put in place
matures. Growth continues to be constrained by the recruitment and
retention of staff with the relevant, on the ground, experience and
reputation in the sector and such recruitment has associated costs.
We are starting to see some improvement in this trend which should
assist longer term improved performance. We continue to encourage
commitment to wider share ownership amongst all our staff through
the share option programme.
The prospects for the consultancy service and the sector are
encouraging. At the Conservative party conference, it was announced
that there would be in excess of GBP2bn for affordable housing to
be bid for from 2021/22. This commitment to a longer-term programme
gives housing organisations greater certainty to plan and invest in
new housing projects. This support has also been confirmed in the
2018 Budget which identified longer-term strategic partnerships
with a range of housing providers and is an initiative that has
cross-party support. At the same time, it was announced that local
authorities would be granted freedom to borrow to enable them to
build more new homes. We need to see the detail and, in particular,
how new borrowing will be serviced, but many local authorities are
enthusiastic to take up this opportunity with affordable housing
demand vastly outstripping supply in many areas. Our Property,
Treasury and Finance teams are advising a number of local
authorities on how to use this newly given freedom.
The importance of the housing sector, as a political priority,
was emphasised by the Chancellor of the Exchequer in the Autumn
Statement with removal of stamp duty on shared ownership purchases
below GBP500,000 and some extensions of the Help to Buy equity loan
scheme.
Increasingly the sector is attracting private investors who see
the stable revenues from long term investment in affordable housing
as part of their offering to clients seeking a home for wider
funds. Our clients now include Blackstone and its registered
provider Sage, Grainger plc and Civitas plc, amongst others. Most
of these organisations have commissioned Altair to provide advice
on the governance and technical requirements of being a regulated
provider of social housing. These investments are an opportunity
suitable for those looking for longer term returns. We expect other
private investment houses to see this as an attractive option.
Our work across the United Kingdom and beyond continues to grow.
Altair Africa is still building its brand but has now wider
recognition amongst potential clients and funders. It continues to
win contracts, in particular, with its work on the affordable
housing programme in Nigeria. In partnership with Sweco, a
significant contract has recently been signed to develop a 'Green
City' in Rwanda funded by an agency of the German government. A
further contract in negotiation is a review of the mortgage market
in Ghana. Like other Altair Africa assignments, these are longer
term contracts so profit recognition is anticipated to be realised
in future financial years.
The pod property consultancy business has now been successfully
integrated into the Altair team and their services as 'property
advisors' is in continuing demand from housing associations, local
authorities, public and private sector bodies. Notable clients now
include some of the largest housing associations in London,
including Peabody and Optivo as well as major public bodies such as
the NHS and Transport for London. The benefits of increasing demand
alongside integration with Group services should see improving fee
income. This will take time to realise as many of these are also
longer-term contracts. Recently, significant resources have been
diverted into bids particularly when working through local
authority procurement processes. Again, we expect to see a future
benefit from this activity.
Against this generally positive news there are some areas where
there are concerns. Like other sectors, the uncertainties relating
to Brexit and world economic growth causes concern amongst our
commercial clients and, also, the housing associations who generate
cross-subsidy for affordable housing through sale of homes built
for market sale. This is reinforced by whether the Help to Buy
scheme from which much of the cross-subsidy is generated will
continue to generate current revenues. Also, some local authorities
and housing associations who are concerned about funding the works
required to their existing housing stock following the tragic
events at Grenfell are being cautious about committing to other
future expenditure. Despite these factors, the overall view is that
the future is positive both for the sector and our business.
Risks and Uncertainties
The Directors do not consider that the Group's principal risks
and uncertainties have changed since the publication of the annual
report for the year ended 31 March 2018, which contains a detailed
explanation of the risks relevant to the Group on Page 9 and is
available at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/AQSG/13696541.html
Outlook
The first six months of this financial year has seen the
beginning of the benefits of our investment strategy working
through to our financial results. The sector is seen as
increasingly important as both a social need and an economic driver
with increasing political visibility and cross-party consensus. Our
business will only be successful if our clients perceive that we
continue to be both relevant to their needs and offer a range of
services that they can utilise for their benefit. The level of
repeat business that we secure from existing clients, as well as
new opportunities, gives us confidence that our strategy is
right.
We will continue to develop our 'one-stop professional services'
approach for the sector and balance the needs of providing a return
to shareholders in the short to medium term with the resources
required to ensure the long term sustainability of the business.
Both need to be achieved to be attractive to clients, executive,
staff and investors as well as potential acquisitions.
I have now been Chair for a little over 15 months. It is
pleasing to be at the helm of a business that provides a worthwhile
social service, an exciting place to work and a benefit to our
investors. It would be remiss of me not to end this statement
without thanking all our staff and my fellow directors.
I look forward to reporting to you further after the year
end.
Derek Joseph - Chair
23 November 2018
Directors' Report
Substantial Shareholdings
As at 30 September 2018, the Company was aware of the following
notifiable interests in its voting rights:
Number of Percentage of Nature of
Ordinary shares Voting rights holding
Richard Wollenberg* 3,808,406 10.8% Direct
Chris Wood 3,279,440 9.3% Direct
Susan Kane 3,279,440 9.3% Direct
Fiona Underwood** 3,279,440 9.3% Direct
Steven Douglas 3,144,305 8.9% Direct
Derek Joseph 3,005,538 8.5% Direct
Jeffrey Zitron 2,798,403 7.9% Direct
Matt Carroll 1,307,229 3.7% Direct
Hannah Breitschadel 1,307,229 3.7% Direct
*Includes shares held by immediate family members of Richard
Wollenberg
**Fiona Underwood's shares are held in a nominee account at Old
Mutual plc.
Related Party Transactions
During the 6 months to 30 September 2018, the non-executive
directors were paid fees of GBP5,054 (6 months to September 2017:
GBP6,375).
During the 6 months to 30 September 2018, the Group charged
GBP5,214 (6 months to September 2017: GBP9,686) to DMJ Consultancy
Services Limited for office costs and secretarial services, a
company in which Derek Joseph is a director and shareholder.
Remuneration of Directors and key management personnel
The remuneration of the directors, who are the key management
personnel of the Group, is set out below.
6 months to 6 months to Year ended
30 September 30 September 31 March
2018 (unaudited) 2017 (unaudited) 2018
(audited)
Short-term employee
benefits 283,592 316,512 571,880
Share-based payments 31,351 56,500 113,000
Post-retirement benefits 10,378 8,850 17,700
------------------ ------------------ -----------
325,321 381,862 702,580
================== ================== ===========
Corporate Governance
The UK Corporate Governance Code (September 2014) (the code), as
appended to the listing rules, sets out Principles of Good
Corporate Governance and Code provisions which are applicable to
listed companies incorporated in the United Kingdom. As a standard
listed company, the Company is not subject to the UK Corporate
Governance Code but the Board recognises the value of applying the
principles of the code where appropriate and proportionate and
endeavours to do so where practicable.
Responsibility Statement
The Directors, whose names and functions are set out at the end
of this report, are responsible for preparing the Unaudited Interim
Condensed Consolidated Financial Statements in accordance with the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority ('DTR') and with International Accounting
Standard 34 on Interim Financial reporting (IAS34). The Directors
confirm that, to the best of their knowledge, this unaudited
interim condensed consolidated report has been prepared in
accordance with IAS34 as adopted by the European Union. The interim
management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8 namely:
-- an indication of key events occurred during the period and
their impact on the unaudited interim condensed consolidated
financial statements and a description of the principal risks and
uncertainties for the second half of the financial year, and
-- related party transactions that have taken place during the
period and that have materially affected the financial position or
the performance of the business during that period.
Susan Kane - Group Finance Director
23 November 2018
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2018
Six months to 30 September 2018 Six months to 30 September 2017 Year ended
31 March
2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
Revenue 3,592,129 2,524,200 5,905,221
Cost of sales (2,818,980) (1,848,222) (4,343,456)
-------------------------------- -------------------------------- ------------
Gross profit 773,149 675,978 1,561,765
Administrative expenses (551,460) (482,896) (1,037,287)
-------------------------------- -------------------------------- ------------
Operating profit 221,689 193,082 524,475
Finance income 22 887 3,596
Profit before taxation 221,711 193,969 528,074
Income tax expense (55,640) (58,191) (123,390)
-------------------------------- -------------------------------- ------------
Profit and total comprehensive
income for the period 166,071 135,778 404,684
================================ ================================ ============
Earnings per share attributable to
owners of the parent
Weighted average number of shares:
* Basic 35,265,461 32,651,003 33,746,926
* Diluted 39,989,368 37,357,238 38,429,011
Basic earnings per share 0.47p 0.42p 1.20p
Diluted earnings per share 0.42p 0.36p 1.05p
Condensed Consolidated Statement of Financial Position
As at 30 September 2018
30 September 2018 30 September 2017 31 March
2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
Non-current assets
Goodwill 2,027,688 317,688 2,027,688
Property, plant and equipment 90,458 71,241 95,747
Investment in associates 226,620 - 226,620
Investments 121,104 - 121,104
------------------ ------------------ ------------
2,465,870 388,929 2,471,159
Current assets
Trade and other receivables 2,192,146 1,210,162 2,109,678
Cash and bank balances 1,028,951 2,237,725 969,987
------------------ ------------------ ------------
3,221,097 3,447,887 3,079,665
Current liabilities
Trade and other payables 1,143,599 657,474 1,094,690
Corporation tax 197,415 192,944 141,775
1,341,014 850,418 1,236,465
Net current assets 1,880,083 2,597,469 1,843,200
------------------ ------------------ ------------
Net assets 4,345,953 2,986,398 4,314,359
================== ================== ============
Equity
Share capital 1,763,273 1,632,550 1,763,273
Share premium account 1,487,512 533,235 1,487,512
Reverse acquisition reserve (4,771,473) (4,771,473) (4,771,473)
Merger reserve 7,184,334 7,184,334 7,184,334
Share-based payment reserve 617,136 491,908 557,653
Retained losses (1,934,829) (2,084,156) (1,906,940)
------------------ ------------------ ------------
Equity attributable to the owners of the parent 4,345,953 2,986,398 4,314,359
Condensed Consolidated Statement of Changes in Equity
Share Share Reverse Merger Share based Retained Total equity
capital premium acquisition relief payments losses
account reserve reserve reserve
GBP GBP GBP GBP GBP GBP GBP
As at 1 April
2017 1,632,550 533,235 (4,771,473) 7,184,334 422,391 (2,056,679) 2,944,358
Total
comprehensive
income - - - - - 135,778 135,778
Share based
payment - - - - 69,517 - 69,517
Dividend - - - - - (163,255) (163,255)
------------- ------------- ------------ ------------- ------------ ------------- -------------
As at 30
September
2017 1,632,550 533,235 (4,771,473) 7,184,334 491,908 (2,084,156) 2,986,398
------------- ------------- ------------ ------------- ------------ ------------- -------------
Issue of
shares 130,723 954,277 - - - - 1,085,000
Total
comprehensive
income - - - - - 268,906 268,906
Share based
payment - - - - 65,745 - 65,745
Dividend - - - - - (91,690) (91,690)
------------- ------------- ------------ ------------- ------------ ------------- -------------
As at 31 March
2018 1,763,273 1,487,512 (4,771,473) 7,184,334 557,653 (1,906,940) 4,314,359
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
comprehensive
income - - - - - 166,071 166,071
Share based
payment - - - - 59,483 - 59,483
Dividend - - - - - (193,960) (193,960)
------------- ------------- ------------ ------------- ------------ ------------- -------------
As at 30
September
2018 1,763,273 1,487,512 (4,771,473) 7,184,334 617,136 (1,934,829) 4,345,953
============= ============= ============ ============= ============ ============= =============
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2018
Six months to 30 September Six months to 30 September Year ended
31 March
2018 2017 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
Cash flow from operating activities
Profit for the period 166,071 135,778 404,684
Interest received (22) (887) (3,596)
Income tax expense 55,640 58,191 123,390
Share based payment charge 59,483 69,517 135,262
Depreciation 25,149 12,685 31,639
--------------------------- --------------------------- ------------
Operating cash flows before movement in
working capital 306,321 275,284 691,379
(Increase)/decrease in trade and other
receivables (82,468) 140,025 (759,491)
Increase/(decrease) in trade and other
payables 114,679 (294,449) 76,997
--------------------------- --------------------------- ------------
Cash generated by operations 338,532 120,860 8,885
Income taxes paid - - (116,368)
Net cash inflow/(outflow) from operating
activities 338,532 120,860 (107,483)
Cash flow from investing activities
Interest received 22 887 3,596
Purchase of property, plant and equipment (19,860) (33,367) (76,827)
Acquisition of Goodwill - - (625,000)
Acquisition of investment in an associate (65,770) - (160,850)
Acquisition of investment - - (121,104)
Net cash outflow from investing activities (85,608) (32,480) (980,185)
Cash flows from financing activities
Dividends paid (193,960) (163,255) (254,945)
Net cash outflow from financing activities (193,960) (163,255) (254,945)
--------------------------- --------------------------- ------------
Net increase/(decrease) in cash and cash
equivalents 58,964 (74,875) (1,342,613)
Cash and cash equivalents at beginning of the
period 969,987 2,312,600 2,312,600
--------------------------- --------------------------- ------------
Cash and cash equivalents at end of the
period 1,028,951 2,237,725 969,987
=========================== =========================== ============
Notes to the Condensed set of Financial Statements
for the six months ended 30 September 2018
1. General information
The Company and its subsidiaries (together "the Group") are a
major provider of consultancy services to organisations that
develop, fund or manage affordable housing.
The Company is a public limited company domiciled in the United
Kingdom and incorporated under registered number 08988813 in
England and Wales. The Company's registered office is Tempus Wharf,
29a Bermondsey Wall West, London, SE16 4SA.
2. Basis of preparation
The unaudited condensed consolidated interim financial
statements of the Group have been prepared on the basis of the
accounting policies, presentation, methods of computation and
estimation techniques used in the preparation of the audited
accounts for the period ended 31 March 2018 and expected to be
adopted in the financial information by the Company in preparing
its annual report for the year ending 31 March 2019.
This interim consolidated financial information for the six
months ended 30 September 2018 has been prepared in accordance with
IAS 34, 'Interim financial reporting'. This interim consolidated
financial information is not the Group's statutory financial
statements and should be read in conjunction with the annual
financial statements for the year ended 31 March 2018, which have
been prepared in accordance with International Financial Reporting
Standard (IFRS) and have been delivered to the Registrar of
Companies. The auditors have reported on those accounts; their
report was unqualified, did not include references to any matters
to which the auditors drew attention by way of emphasis of matter
without qualifying their report and did not contain statements
under section 498(2) or (3) of the Companies Act 2006.
The interim consolidated financial information for the six
months ended 30 September 2018 is unaudited. In the opinion of the
Directors, the interim consolidated financial information presents
fairly the financial position, and results from operations and cash
flows for the period.
The Directors have made an assessment of the Group's ability to
continue as a going concern and are satisfied that the Group has
adequate resources to continue in operational existence for the
foreseeable future. The Group, therefore, continues to adopt the
going concern basis in preparing its consolidated financial
statements.
The financial statements are presented in sterling, which is the
Group's functional currency as the UK is the primary environment in
which it operates.
3. Segmental analysis
The Directors are of the opinion that the business of the Group
is in a single activity. Nearly all business is conducted in
sterling and within the UK. Some fees are received in Euros and US
Dollars but in the Director's opinion these amounts are not
significant and any changes in exchange rates would not have a
material impact on the Group.
4. Share capital
The Company has one class of share in issue being ordinary
shares with a par value of 5p.
Allotted, issued and called up ordinary shares of GBP0.05
each:
Number Amount called up and fully paid
GBP
As at 1 April 2017 32,651,003 1,632,550
Issued during the period - -
----------- --------------------------------
As at 30 September 2017 32,651,003 1,632,550
Issued during the period 2,614,458 130,723
----------- --------------------------------
As at 31 March 2018 35,265,461 1,763,273
Issued during the period - -
----------- --------------------------------
As at 30 September 2018 35,265,461 1,763,273
=========== ================================
As at 1 April 2018, 4,665,077 options were held by Directors and
employees of the Group.
On 31 August 2018, 21,158 options were returned by an employee
who left the business.
On 1 September 2018, 736,929 options were granted to Directors
and employees of the Group.
As at 30 September 2018 a total of 5,380,848 options were held
by Directors and employees of the Group.
Option exercise price are in a range of 5p to 29.5p.
5. Going concern
The Group has sufficient financial resources to enable it to
continue its operational activities for the foreseeable future.
Accordingly, the Directors consider it appropriate to adopt the
going concern basis in preparing these interim accounts.
6. Dividend
An interim dividend of 0.29p will be paid on 21st December 2018
to shareholders on the register at 7th December 2018 at a cost of
GBP102,270.
Financial Calendar
Year Date Comments
2018 26 November Interim results 2018 announced
6 December Ex-dividend date
7 December Record date
21 December Payment date for interim
2019 31 March End of accounting year
By 31 July 2018 Annual Financial Report to
be published and announced
July / August Annual General Meeting
September Final dividend to be paid
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
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November 26, 2018 02:00 ET (07:00 GMT)
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