TIDMENTU
RNS Number : 9817L
entu (UK) plc
25 July 2017
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
ENTU (UK) PLC
("Entu" or the "Group")
Results for the Six Months Ended 30 April 2017
Entu (UK) plc, the home improvements group providing energy
efficiency products and services to homeowners and businesses
across the UK, announces its results for the six months ended 30
April 2017 which are in line with the Group's trading announcement
on 14 June 2017.
Highlights
-- Operational and supply chain issues result in lower first
half revenues of GBP36.5m (2016: GBP42.2m).
-- LBITDA in line with expectations at GBP2.3m (2016: earnings of GBP1.3m).
-- Operational improvements made in the early part of H2 already yielding results.
-- Further restructuring exercise implemented with expected savings of GBP0.8m a year.
-- Executive Team strengthened further to drive efficiency
savings across the Group's activities and improve working
capital.
Half Year Ended 30 April 2017 2016
Unaudited Restated
GBPm GBPm
------------------------------------ ------ ----------
Continuing Operations
Revenue 36.5 42.2
Gross profit 10.0 13.8
(LBITDA)/EBITDA before exceptional
items (2.3) 1.3
Operating (loss)/profit before
exceptional items (2.4) 1.2
Operating (loss)/profit after
exceptional items (3.0) 1.1
Overall Results
(Loss)/profit for the period (2.6) 0.5
Basic (loss)/profit per share
(pence) (4.0) 0.8
Cash used in operations (7.3) (2.3)
Net decrease in cash and cash
equivalents (7.3) (2.3)
Net debt (6.6) (0.9)
Strategic Review and Going Concern
-- Strategic review announced 6 July 2017 - assisted by KPMG.
-- Aim to secure new long-term financing to address cash and borrowing requirements.
-- Interest being expressed by a number of parties in a number of possible solutions.
-- Group's lenders remain supportive whilst this process continues.
-- Initial offers are expected shortly for consideration by the Board and the Group's lenders.
Chief Executive, Ian Blackhurst, commented:
"Whilst implementing our five-point improvement plan, the
complexity of issues in our operations and supply chain meant that
we were unable to move ahead as quickly as we would have wished.
However, our strengthened Executive Team is already delivering
tangible results and we hope that the strategic review exercise
that we announced on 6 July 2017 will stabilise the Group's
financial position to allow the wider management team to deliver
the improvement plan and return the business to profitable growth
in the next financial year."
For further information, please contact:
Entu
Ian Blackhurst, Chief Executive
Officer 020 7457 2020
Neill Skinner, Chief Financial
Officer
Zeus Capital Limited (Broker
and Nominated Adviser)
John Goold 020 3829 5000
Dominic King
Andrew Jones
Instinctif Partners (Public Relations)
Helen Tarbet 020 7457 2020
James Gray
Notes to Editors
Entu (UK) plc (AIM: ENTU) is a leading home improvement group
providing energy efficiency products and services to homeowners and
businesses in the UK.
Headquartered in Cheshire, Entu has national presence through a
network of strong regional brands such as Weatherseal, Penicuik and
Zenith. The Group operates three business segments: home
improvement products, energy generation and energy saving products
and repairs and renewals services.
Entu operates in a growing marketplace with myriad
opportunities. Entu's primary strategy is to focus on driving
organic growth from its diversified, fully integrated product
portfolio, and also, over time, through the development of new
product and service offerings, in particular, energy efficiency
products and services.
The Group was admitted to AIM in October 2014.
CHIEF EXECUTIVE'S STATEMENT
Business Review
Sales in the core Home Improvements business held up well
throughout the first quarter. However, as operations were scaled up
to meet peak seasonal demand in late March and April, it became
clear that the operational and supply chain difficulties outlined
in the full-year results statement on 29 March 2017 were more
complex and further reaching than expected.
Driving up fit capacity to meet peak demand in the last weeks of
the first half of the year whilst implementing actions to address
these complex operational and supply chain issues would have
created an unsustainable position and been counter-productive. The
Group, therefore, made the difficult decision to hold fit capacity
at a lower level during this peak period and bring sales into line,
in order to protect levels of customer service until the
operational and supply chain issues had been resolved.
Following the sale of Astley Façades in October 2015, the Energy
Saving and Generation Division was a considerably smaller operation
in the first half. However, the Division did see some growth in its
emerging LED installation business with several major warehouse
conversion projects undertaken for a number of leading
manufacturing and distribution businesses, and the ECO-funded
insulation business secured a 15-month extension to its contract
with a major utility company.
The loss of fit capacity during these critical weeks had a
significant impact on first half revenues. Group revenues from
continuing operations for the six months ended 30 April 2017 were
down 13.5% at GBP36.5m (2016: GBP42.2m) and, with the loss of
revenue being concentrated in the peak period, gross margins fell
to 27.4% (2016: 32.7%) resulting in a gross profit of GBP10.0m
(2016: GBP13.8m).
Loss before interest, tax, depreciation and amortisation
("LBITDA") on continuing operations before exceptional items for
the six months ended 30 April 2017 was in line with our latest
expectations at GBP2.3m (2016: positive earnings of GBP1.3m), and
the operating loss before exceptional items was GBP2.4m (2016:
profit of GBP1.2m).
The overall loss for the half year, after exceptional items of
GBP0.6m (2016: GBP0.1m) relating to restructuring costs, was
GBP2.6m (2016: profit of GBP0.5m). Net debt at 30 April 2017 was
GBP6.6m (2016: GBP0.9m).
Divisional Results (Continuing Operations)
Six months Home Improvements Energy Repairs Group
ended Generation and Renewals
30 April and Saving Service
2017 Agreements
Unaudited
2017 2016 2017 2016 2017 2016 2017 2016
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- --------- --------- ------ ------ ------- ------- ------ ------
Revenue 32.9 39.1 2.3 1.8 1.3 1.3 36.5 42.2
(LBITDA)/EBITDA(1) (3.4) 0.3 0.2 0.1 0.9 0.9 (2.3) 1.3
Operating
(loss)/profit(1) (3.5) - 0.2 0.1 0.9 1.0 (2.4) 1.2
Operating
(loss)/profit(2) (4.1) - 0.2 0.1 0.9 1.0 (3.0) 1.1
(1) Before exceptional items.
(2) After exceptional items.
Home Improvements
The significant loss of fit capacity during late March and April
caused revenues in the core Home Improvements Division to fall
15.8% to GBP32.9m (2016: GBP39.1m). As noted above, the
concentration around a few weeks at the end of the first half had a
disproportionate impact on gross margin and, as a result, the
Division reported an operating loss before exceptional items of
GBP3.5m (2016: nil).
Intense competition in the non-core boilers and energy-switching
businesses resulted in a loss of GBP0.2m in the first half and,
following a review in May, the Group decided to close these
businesses and focus on its core glazing products.
Energy Generation and Saving
Revenues grew 27.8% to GBP2.3m (2016: GBP1.8m) due to growth in
the Group's emerging LED installations business, whilst the
ECO-funded insulation business continued to trade in line with
expectations. The Division generated an operating profit of GBP0.2m
(2016: GBP0.1m).
Repairs and Renewals Service Agreements ("RRSA")
The RRSA Division continued to deliver a stable revenue and
profit stream. Revenues were in line with the previous half year at
GBP1.3m (2016: GBP1.3m) and represented 4.0% of Home Improvement
revenues (2016: 3.3%). Operating profit was GBP0.9m (2016:
GBP1.0m).
Strategic Review and Going Concern
The losses incurred in the period and the pressure on working
capital and debt collection resulting from the operational and
supply chain issues referred to above have pushed cash and
borrowing requirements into uncomfortable territory. As a result,
on 6 July 2017, the Group announced that it had, with the
assistance of KPMG, commenced a strategic review with the aim of
securing new long-term financing and strengthening the balance
sheet. The process has attracted interest across the various
options being considered, namely new debt funding, debt and equity
structures and expressions of interest in certain parts of the
Group. Initial offers of interest have been requested to be
submitted shortly and an update will be provided once the various
offers have been evaluated by the Board in conjunction with the
Group's lenders.
Appropriate bank support continues to remain in place whilst
this process is completed. Based on the current level of interest,
the Board hopes that the Group will be able to secure new long-term
finance facilities. However, should the Group's banks withdraw
their support or should the process fail to provide options that
will stabilise the Group's financial position, then the Group's
ability to continue as a going concern may be at risk. This is
discussed in more detail in Note 1 to the Consolidated Financial
Statements.
Dividend
In light of the results for the six months ended 30 April 2017
and the current financial position of the Group, the Board is not
recommending an interim dividend.
Trading Outlook
The outcome of the strategic review will have a bearing upon the
trading outlook for the Group. In the meantime, the Group continues
to implement its detailed action plan to reduce costs, improve
operational efficiency, leverage its supply chain, improve cash
collection and strengthen controls.
A significant number of operational improvements have been made
since the appointment of a new Group Operations Director in April,
and performance in the second half of the year is improving as
these measures take effect. A further restructuring exercise was
implemented in July which is expected to yield savings of GBP0.8m a
year, and the Executive Team has been strengthened with a number of
experienced interim managers to drive further efficiency savings
across the Group's activities and improve working capital.
As noted in the Trading Update announced on 14 June 2017, the
intention is to hold fit capacity at current levels throughout the
second half of the year and to bring sales into line. Furthermore,
the LED business and other commercial revenue streams will be
scaled back in the short-term in order to focus resources on the
core Home Improvements business. Whilst the actions noted above
will yield some benefit in the current financial year, the Group
still expects the full-year loss before interest, tax, depreciation
and amortisation on continuing operations before exceptional items
to be in the range of GBP1.2m-GBP2.2m subject to the outcome of the
strategic review.
Ian Blackhurst
Chief Executive
25 July 2017
CONSOLIDATED INCOME STATEMENT
Half Year Half Year Year to
to to 31 October
30 April 30 April 2016 Audited
2017 Unaudited 2016 Unaudited
Restated
Notes GBP000's GBP000's GBP000's
--------------------------------- ----- --------------- ---------------- ---------------
Continuing operations
Revenue 4 36,501 42,162 87,745
Cost of sales (26,503) (28,326) (60,284)
Gross profit 9,998 13,836 27,461
Administrative expenses (12,397) (12,647) (24,994)
Operating (loss)/profit
before exceptional items (2,399) 1,189 2,467
Exceptional items 5 (601) (90) (4,581)
Operating loss after exceptional
items (3,000) 1,099 (2,114)
Finance costs (194) (92) (219)
Loss before taxation (3,194) 1,007 (2,333)
Taxation credit/(charge) 7 567 (88) 512
Loss for the period from
continuing operations (2,627) 919 (1,821)
Discontinued operations
Loss for the period from
discontinued operations 6 - (414) (3,801)
Loss for the period (2,627) 505 (5,622)
--------------------------------- ----- --------------- ---------------- ---------------
Continuing basic (loss)/profit
per share (pence) 9 (4.0) 1.4 (2.8)
Discontinued basic (loss)/profit
per share (pence): 9 - (0.6) (5.8)
Total basic (loss)/profit
per share (pence) 9 (4.0) 0.8 (8.6)
--------------------------------- ----- --------------- ---------------- ---------------
Diluted continuing operations
(loss)/profit per share
(pence) 9 (4.0) 1.4 (2.8)
--------------------------------- ----- --------------- ---------------- ---------------
Adjusted earnings per share is shown in note 9 to the
accounts.
The notes 1 to 15 are an integral part of these Consolidated
Financial Statements.
There are no other items of comprehensive income for the period
other than the loss for the period attributable to the equity
holders.
CONSOLIDATED BALANCE SHEET
As at 30 As at 30 As at
April 2017 April 2016 31 October
Unaudited Unaudited 2016
Restated Audited
Notes GBP000's GBP000's GBP000's
------------------------------ ----- ------------- ------------- -------------
Assets
Non-current assets
Intangible assets 1,141 1,496 1,141
Property, plant and equipment 360 879 481
Deferred tax asset 418 - 418
------------------------------ ----- ------------- ------------- -------------
1,919 2,375 2,040
------------------------------ ----- ------------- ------------- -------------
Current assets
Inventories 1,704 2,002 1,267
Trade and other receivables 10 10,785 15,864 8,103
Current taxation receivable 1,347 - -
Cash and cash equivalents 11 - - 768
------------------------------ ----- ------------- ------------- -------------
13,836 17,866 10,138
------------------------------ ----- ------------- ------------- -------------
Total assets 15,755 20,241 12,178
------------------------------ ----- ------------- ------------- -------------
Equity
Share capital 50 50 50
Accumulated losses (10,983) (1,900) (8,356)
------------------------------ ----- ------------- ------------- -------------
Total shareholders' deficit (10,933) (1,850) (8,306)
------------------------------ ----- ------------- ------------- -------------
Liabilities
Non-current liabilities
Deferred taxation liabilities - 60 -
Provisions 403 1,318 403
------------------------------ ----- ------------- ------------- -------------
403 1,378 403
------------------------------ ----- ------------- ------------- -------------
Current liabilities
Trade and other payables 12 18,348 18,302 18,465
Borrowings 13 6,553 891 -
Current taxation liabilities - 620 54
Provisions 1,384 900 1,562
------------------------------ ----- ------------- ------------- -------------
26,285 20,713 20,081
------------------------------ ----- ------------- ------------- -------------
Total liabilities 26,688 22,091 20,484
------------------------------ ----- ------------- ------------- -------------
Total shareholders' deficit
and liabilities 15,755 20,241 12,178
------------------------------ ----- ------------- ------------- -------------
The notes 1 to 15 are an integral part of these Consolidated
Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Accumulated Total
Capital Losses Shareholders'
Unaudited Unaudited Deficit
Unaudited
Notes GBP000's GBP000's GBP000's
------------------------------- ----- ---------- ----------- --------------
At 1 November 2015 (restated) 50 (655) (605)
Loss for the period - 505 505
Transactions with owners:
Dividends 8 - (1,750) (1,750)
Total transactions with owners
recognised directly in equity - (1,750) (1,750)
------------------------------- ----- ---------- ----------- --------------
At 30 April 2016 (restated) 50 (1,900) (1,850)
Loss for the period - (6,127) (6,127)
Transactions with owners:
Dividends 8 - (329) (329)
Total transactions with owners
recognised directly in equity - (329) (329)
------------------------------- ----- ---------- ----------- --------------
At 31 October 2016 50 (8,356) (8,306)
Loss for the period - (2,627) (2,627)
At 30 April 2017 50 (10,983) (10,933)
------------------------------- ----- ---------- ----------- --------------
Share capital
The share capital account includes the nominal value for all
shares issued and outstanding.
Accumulated losses
The 'Accumulated Losses' column in the Statement of Changes in
Equity includes the accumulated profits and losses arising from the
Consolidated Income Statement and certain items from the
Consolidated Statement of Changes in Equity attributable to equity
shareholders, net of distributions to shareholders.
The notes 1 to 15 are an integral part of these Financial
Statements.
CONSOLIDATED CASH FLOW STATEMENT
Half Year Half Year Year to
to 30 April to 30 31 October
2017 April 2016 Audited
Unaudited 2016
Unaudited
Restated
Notes GBP000's GBP000's GBP000's
------------------------------ ----- -------------- ---------- ----------------
Cash flows from operating
activities
Cash generated from/(used
in) operations 14 (7,101) (2,168) 1,382
Taxation paid - - (12)
Interest paid (194) (92) (232)
------------------------------- ----- -------------- ---------- ----------------
Net cash generated from/(used
in) operating activities (7,295) (2,260) 1,138
------------------------------- ----- -------------- ---------- ----------------
Cash flows from investing
activities
Purchase of property,
plant and equipment (26) (66) (189)
Proceeds from disposal
of property plant and
equipment - - 463
Net cash generated from/(used
in) investing activities (26) (66) 274
------------------------------- ----- -------------- ---------- ----------------
Cash flows from financing
activities
Dividends paid to equity
shareholders - - (2,079)
------------------------------- ----- -------------- ---------- ----------------
Net cash used in financing
activities - - (2,079)
------------------------------- ----- -------------- ---------- ----------------
Net decrease in cash and
cash equivalents (7,321) (2,326) (667)
Cash and cash equivalents
at the beginning of the
year 768 1,435 1,435
Cash and cash equivalents
at the end of the year (6,553) (891) 768
------------------------------- ----- -------------- ---------- ----------------
The notes 1 to 15 are an integral part of these Financial
Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Interim announcement
While the financial information included in this interim
announcement has been computed in accordance with IFRS, the
announcement does not itself contain sufficient information to
comply with IFRS. The accounting policies used are consistent with
those in the Group's Statutory Financial Statements for the year
ended 31 October 2016. The key accounting policies applied by the
Group have been set out below.
General information
Entu (UK) plc ('the Company') and its subsidiaries (together
"the Group") principal activity during the period was the sale of
replacement windows, double glazing, entrance doors, patio doors
and exterior improvement products within the United Kingdom. Other
activities, included within discontinued operations were solar home
improvement products and within the Astley Facades UK group of
companies, the provision of façade facilities for both new build
construction and refurbishment products.
The Company is incorporated and domiciled in the UK. The
Company's registered number is 08957339. The address of its
registered office is 7 Road One, Winsford Industrial Estate,
Winsford, Cheshire CW7 3PZ.
The Company is a public limited company and has its primary
listing on the AIM division of the London Stock Exchange.
1. Accounting policies
The principal accounting policies applied in the preparation of
these Interim Financial Statements are consistent with those of the
annual financial statements for the year ended 31 October 2016.
Basis of preparation
The Consolidated Interim Financial Statements for the six months
ended 30 April 2017, which have not been reviewed or audited, have
been prepared in accordance with the Disclosure and Transparency
Rules (DTR) of the Financial Conduct Authority and in accordance
with IAS 34, 'Interim Financial Reporting' as adopted by the
European Union (EU). They should be read in conjunction with the
audited annual financial statements for the year ended 31 October
2016 which have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union
(IFRS as adopted by the EU), IFRS Interpretations Committee (IFRS
IC) Interpretations and the Companies Act 2006 applicable to
companies reporting under IFRS.
The interim financial statements for the period ended 30 April
2017 do not constitute statutory accounts within the meaning of
Section 434 of the Companies Act 2006.
Then financial information set out in this statement relating to
the year ended 31 October 2016 does not constitute statutory
accounts for that year. Full audited accounts in respect of that
year were approved by the Board of Directors on 28 March 2017 and
have been delivered to the Registrar of Companies. The report of
the auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain a statement under
section 498 of the Companies Act 2006.
The preparation of Interim Financial Statements 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. In preparing these Interim Financial
Statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty continue to be reviewed and applied on a
consistent basis. There have been no material changes since 31
October 2016 as set out in the Group's Annual Report and
Accounts.
Going concern
On 6 July 2017, the Group announced that it was undertaking a
strategic review and that the Directors were exploring options for
new long-term finance facilities. KPMG have since been engaged to
assist with this ongoing process and appropriate bank support
continues to remain in place whilst the process is completed. The
ability of the Group to continue to trade is dependent on the
ultimate success of the process as, in the event that appropriate
new long-term financing arrangements are not secured, the ability
of the Group to continue to trade as a going concern is uncertain
as it may be unable to realise its assets and discharge its
liabilities in the normal course of business. The Directors
presently remain confident that, given the level of interest
expressed by interested parties, there is a reasonable expectation
that the Group will be able to successfully secure appropriate new
long-term financing facilities. Therefore, the Directors have
concluded that it is appropriate to continue to prepare the Group's
financial statements on a going concern basis.
2. Prior year adjustments
During the year ended 31 October 2016, the Directors undertook a
review of the Group's revenue recognition policies and the
application of those policies. As a result of this review, the
Directors took the decision to change their accounting policies for
certain revenue streams to better reflect industry practices and to
align policies more consistently across the Group. The impact of
the changes in accounting policies is disclosed in the Annual
Report and Accounts for the year ended 31 October 2016.
In accordance with IAS 8, the change in accounting policies has
been applied retrospectively and the comparative financial
information has been restated. The table below sets out the impact
of the changes in accounting policies on both the profit for the
period ended 30 April 2016 and the equity of the Group as at that
date.
Impact of prior year adjustments on the Consolidated Income
Statement of the Group
Period ended 30 April 2016
GBP000's
------------------------------------------------------ --------
Profit after tax as previously reported 431
Change in RRSA revenue recognition (i) 29
Change in other home improvements revenue recognition
(ii) 192
Change in finance commission revenue recognition
(iii) (48)
Change in application of deferred commission
accounting policy (iv) (118)
Adjustment to tax in respect of changes to income
recognition (v) 19
-------------------------------------------------------- --------
Restated profit after tax 505
-------------------------------------------------------- --------
(i) Historically the Group recognised revenue in relation to the
RRSA programme on a cash received basis. However, as the RRSA
programme results in a 12-month commitment to customers the
Directors have determined that it would be appropriate to spread
the revenue over the 12-month contract period.
(ii) On review of recognition of revenue across the Group's
businesses it was concluded that for certain types of installations
in certain subsidiaries, there was a different interpretation of
the point of completion of installation. In some cases, revenue was
being recognised prior to the substantial completion of the
installations. The Directors have determined that the revenue
should be recognised when the Group has substantially completed the
installation and the substantial risks and rewards of ownership are
deemed to have transferred.
(iii) Historically the Group recognised finance commissions on
receipt from finance providers. There has been limited history of
non-collection of commissions and, therefore, the Directors think
it more appropriate to recognise finance commissions in line with
the revenue recognition policy to which the product associated with
the finance commission relates.
(iv) The Group defers sales commissions costs incurred in a
financial year which are considered to be directly related to
revenue transactions which are not recognised until subsequent
financial years. As part of the review of the Group's revenue
recognition policy the Group aligned policies on deferred
commissions across the Group. This has resulted in certain costs
being required to be recognised earlier than previously recognised.
The current and prior years cost of sales numbers have been
restated in this respect.
(v) Taxation charges have been adjusted in respected of changes
to income recognition and deferred commissions.
Impact of prior year adjustments on the Consolidated Balance
Sheet of the Group
At 30 April As reported Change Change Change Change Change Restated
2016 previously in RRSA in other in finance in deferred In taxation
revenue commission commission
recognition
(i) (ii) (iii) (iv) (v)
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Assets
Non-current
assets
Intangible assets 1,496 - - - - - 1,496
Property, plant
and equipment 879 - - - - - 879
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
2,375 - - - - - 2,375
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Current assets
Inventories 2,002 - - - - - 2,002
Trade and other
receivables 16,787 - (554) 76 (445) - 15,864
Cash and cash - - - - - - -
equivalents
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
18,789 - (554) 76 (445) - 17,866
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Total assets 21,164 - (554) 76 (445) - 20,241
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Equity
Share capital 50 - - - - - 50
Retained earnings/
(accumulated
losses) (411) (1,187) (353) 76 (445) 420 (1,900)
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Total shareholders'
equity/(deficit) (361) (1,187) (353) 76 (445) 420 (1,850)
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Liabilities
Non-current
liabilities
Deferred taxation
liabilities 60 - - - - - 60
Provisions 1,318 - - - - - 1,318
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
1,378 - - - - - 1,378
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
-
Current liabilities
Trade and other
payables 17,316 1,187 (201) - - - 18,302
Borrowings 891 - - - - - 891
Current taxation
liabilities 1,040 - - - - (420) 620
Provisions 900 - - - - - 900
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
20,147 1,187 (201) - - (420) 20,713
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Total liabilities 21,525 1,187 (201) - - (420) 22,091
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
Total shareholders'
equity/(deficit)
and liabilities 21,164 - (554) 76 (445) - 20,241
-------------------- ----------- -------- ------------ ----------- ------------ ------------ --------
(i) Changes in accounting policies for RRSA resulted in
increased deferred income, which is included in trade and other
payables category of liabilities.
(ii) Changes in accounting policies for other revenue
recognition had the impact of reducing trade receivables,
prepayments, accrued income and other receivables within the trade
and other receivables category of asset.
(iii) Changes in accounting policies for finance commission had
the impact of increasing the trade and other receivables category
of asset.
(iv) Changes in the accounting for deferred commission had the
impact of decreasing the trade and other receivables category of
asset.
(v) The current taxation liability has been adjusted in respect
of the reduction to tax charges as a consequence of the above
adjustments.
3. Accounting policies
The accounting policies are consistent with those of the Annual
Report and Accounts for the year ended 31 October 2016 which are
prepared in accordance with IFRS as adopted by the European Union,
except as disclosed below:
-- Taxes on income in the interim periods are accrued using the
tax rate that would be applicable to total expected annual
earnings.
There are no new IFRSs or IFRICs that are effective for the
first time in this interim period that would be expected to have a
material impact on the group.
4. Segmental analysis
The Chief Operating Decision Maker (CODM) has been identified as
the Executive Board which comprises the two Executive
Directors.
The CODM reviews the Group's internal reporting in order to
assess performance and allocate resources. Management has
determined the operating segments based on these reports which
include an allocation of central costs as appropriate.
The CODM considers the business from an operating perspective,
with Home Improvements, Energy Generation and Saving, Repair and
Renewal Service Agreements being the three reporting segments. The
CODM assesses the performance based on operating profit before
exceptional items. Other information provided to the CODM, except
as noted below, is measured in a manner consistent with that of the
Financial Statements.
All revenue, profit and assets of the Group and all segments
arise in the Group's country of domicile, being the United
Kingdom.
Half year ended 30 Home Energy Repair Total
April 2017 Improvements Generation and Renewal
Unaudited and Savings Service
Agreements
GBP000's GBP000's GBP000's GBP000's
------------------------ ------------- ------------ ------------ --------
Revenue 32,913 2,275 1,313 36,501
------------------------ ------------- ------------ ------------ --------
Operating (loss)/profit
before exceptional
items (3,502) 167 936 (2,399)
Exceptional items (586) (15) - (601)
------------------------ ------------- ------------ ------------ --------
Operating (loss)/profit (4,088) 152 936 (3,000)
Finance costs (194) - - (194)
------------------------ ------------- ------------ ------------ --------
(Loss)/profit before
taxation-continuing
operations (4,282) 152 936 (3,194)
------------------------ ------------- ------------ ------------ --------
There was no material inter-segment revenue in the half year
ended 30 April 2017.
Half year ended 30 April 2016 Home Energy Repair Total
Restated Improvements Generation and Renewal
Unaudited and Savings Service
Agreements
GBP000's GBP000's GBP000's GBP000's
------------------------------------ ------------- ------------ ------------ --------
Revenue 39,084 1,776 1,302 42,162
------------------------------------ ------------- ------------ ------------ --------
Operating profit before exceptional
items 130 82 977 1,189
Exceptional items (90) - - (90)
------------------------------------ ------------- ------------ ------------ --------
Operating (loss)/ profit 40 82 977 1,099
Finance costs (92) - - (92)
------------------------------------ ------------- ------------ ------------ --------
(Loss)/profit before taxation -
continuing operations (52) 82 977 1,007
------------------------------------ ------------- ------------ ------------ --------
Loss for the year from discontinued
operations - (414) - (414)
------------------------------------ ------------- ------------ ------------ --------
There was no material inter-segment revenue in the half year
ended 30 April 2016.
Year ended 31 October Home Energy Repair Total
2016 Improvements Generation and Renewal
and Savings Service
Agreements
GBP000's GBP000's GBP000's GBP000's
-------------------------- ------------- ------------ ------------ -----------------------
Revenue 77,113 8,017 2,615 87,745
-------------------------- ------------- ------------ ------------ -----------------------
Operating profit before
exceptional items 193 38 2,236 2,467
Exceptional items (4,146) (435) - (4,581)
-------------------------- ------------- ------------ ------------ -----------------------
Operating (loss)/ profit (3,953) (397) 2,236 (2,114)
Finance costs (219) - - (219)
-------------------------- ------------- ------------ ------------ -----------------------
(Loss)/profit before
taxation-continuing
operations (4,172) (397) 2,236 (2,333)
-------------------------- ------------- ------------ ------------ -----------------------
Loss for the year from
discontinued operations* (2,258) (1,543) - (3,801)
-------------------------- ------------- ------------ ------------ -----------------------
*Loss before tax from discontinued operations was GBP4,196,000.
A tax credit of GBP395,000 was utilised in arriving at the loss
after tax of GBP3,801,000.
There was no material inter-segment revenue in the year ended 31
October 2016.
5. Exceptional items
Half year ended 30 April 2017 2016
Unaudited
GBP000's GBP000's
------------------------- -------- --------
Restructuring 601 90
601 90
------------------------- -------- --------
Restructuring
Restructuring costs relate to the on-going restructuring of the
group. Costs relate primarily to redundancy/other employee related
costs arising from headcount reduction.
6. Discontinued Operations
During 2016, the Group took the strategic decision to sell the
Astley Facades (UK) Limited business (Astley) as well as close its
loss making Europlas operations in the South East of England. The
Directors consider both businesses to be separate major lines of
business and as such the results of both businesses have been
presented in discontinued operations in the prior period to 30
April 2016 and year to 31 October 2016.
7. Taxation
Half year Half year Year ended
ended 30 ended 31
April 2017 30 April October
Unaudited 2016 Unaudited 2016
Restated Audited
GBP000's GBP000's GBP000's
----------------------------------- ----------- ----------------- ----------
UK corporation tax credit/(charge) 567 (88) 512
------------------------------------- ----------- ----------------- ----------
Taxation is recognised based on management's best estimate of
the weighted average annual tax rate expected for the full
financial year. The estimated annual tax rate used for the period
ended 30 April 2017 is 19% (30 April 2016: 20%, 31 October 2016:
20%).
8. Dividends
Half year Half year Year ended
ended ended 30 31
30 April April 2016 October
2017 Unaudited 2016
Unaudited Audited
GBP000's GBP000's GBP000's
--------------- ---------- ------------- ----------
Dividends paid - 329 2,079
----------------- ---------- ------------- ----------
In the light of the changes in the financial position of the
Group, the Directors have concluded that no interim dividend will
be declared.
9. Earnings per share
Basic earnings per share and diluted earnings per share are
calculated by dividing the loss or profit for the period
attributable to equity holders by the weighted average number of
shares in issue.
Half year Half year Year ended
ended ended 30 31
30 April April 2016 October
2017 Unaudited 2016
Unaudited Audited
Number Number Number
------------------------- ---------- ------------ ----------
Basic weighted average 65,600,000 65,600,000 65,600,000
--------------------------- ---------- ------------ ----------
Diluted weighted average 65,600,000 65,600,000 65,600,000
--------------------------- ---------- ------------ ----------
The weighted average number of shares used to calculate earnings
per share is consistent with the number of ordinary shares in issue
as at the year end and this has been applied consistently for all
years reported within these Financial Statements. As a result of
the formation of the Group and the Company's capital structure the
application of the closing number of ordinary shares has been
deemed to give the most relevant and comparable calculation of
earnings per share in the financial years reported.
Deferred shares have been excluded from the basic and diluted
number of shares as deferred shares carry no voting right and no
rights to any distributions to be made by the Group.
Half year Half year Year ended
ended ended 31
30 April 30 April October
2017 2016 Unaudited 2016
Unaudited Restated Audited
Pence Pence Pence
--------------------------------- ---------- ---------------- ----------
Basic (loss)/profit per
share (4.0) 0.8 (8.6)
Exceptional items 0.9 0.1 7.0
Discontinued operations - 0.6 5.8
----------------------------------- ---------- ---------------- ----------
Adjusted basic (loss)/earnings
per share (3.1) 1.5 4.2
----------------------------------- ---------- ---------------- ----------
Adjusted diluted (loss)/earnings
per share (3.1) 1.5 4.2
----------------------------------- ---------- ---------------- ----------
Adjustments to earnings per share
Adjusted basic and diluted earnings per share figures are
calculated by dividing adjusted loss after tax for the year by the
weighted average number of shares in issue (as above). The adjusted
loss after tax for the year is as follows:
Half year Half year Year ended
ended ended 30 31
30 April April 2016 October
2017 Unaudited 2016
Unaudited Restated Audited
Pence Pence Pence
--------------------------- ---------- ------------ ----------
(Loss)/profit attributable
to owners of the Parent
Company (2,627) 505 (5,622)
Exceptional items 601 90 4,581
Discontinued operations - 414 3,801
----------------------------- ---------- ------------ ----------
Adjusted (loss)/profit
after tax (2,026) 1,009 2,760
----------------------------- ---------- ------------ ----------
Half year Half year Year ended
ended ended 31
30 April 30 April October
2017 2016 Unaudited 2016
Unaudited Restated Audited
Pence Pence Pence
-------------------------- ---------- --------------------------- ----------
Basic earnings per share:
Continuing operations
(loss)/profit per share (4.0) 1.4 (2.8)
Discontinued operations
(loss)/profit per share - (0.6) (5.8)
---------------------------- ---------- --------------------------- ----------
Total basic (loss)/profit
per share (4.0) 0.8 (8.6)
---------------------------- ---------- --------------------------- ----------
There is no material difference between diluted earnings per
share and basic earnings per share for continuing and discontinued
operations.
10. Trade and other receivables
At 30 April At 30 At 31 October
2017 April 2016
2016
Restated
GBP000's GBP000's GBP000's
------------------------- ----------- --------- -------------
Trade receivables 5,929 6,873 5,498
Provision for impairment
of trade receivables (1,655) (585) (1,424)
--------------------------- ----------- --------- -------------
Net trade receivables 4,274 6,288 4,074
Other receivables 605 646 675
Prepayments and accrued
income 5,906 8,930 3,354
--------------------------- ----------- --------- -------------
10,785 15,864 8,103
------------------------- ----------- --------- -------------
The fair value of trade and other receivables has been
considered to be consistent with the book value given their short
term nature.
11. Cash and cash equivalents
At 30 April At 30 At 31 October
2017 April 2016
2016
Restated
GBP000's GBP000's GBP000's
-------------------------- ----------- --------- -------------
Cash at bank and in hand - - 768
---------------------------- ----------- --------- -------------
Cash and cash equivalents - - 768
---------------------------- ----------- --------- -------------
The Group's banking facility is operated and managed as an
integrated facility both internally and externally. Although
individual bank accounts may have positive or negative cash
balances, the interest calculated is on the net position of the
banking balances within the Group facility. The cash at bank and in
hand position shown in the above table represents the net position
of the Group as bank overdrafts have been offset against cash at
bank and in hand as the Group has an enforceable right to offset
positive and negative individual bank account positions, and
receives or pays interest on its net cash position.
12. Trade and other payables
At 30 At 30 At 31 October
April April 2016
2017 2016
Restated
GBP000's GBP000's GBP000's
---------------------------- -------- --------- -------------
Trade payables 8,033 10,920 7,539
Payments on account 870 2,228 870
Other taxation and social
security 357 429 1,875
Accruals 3,267 3,739 1,937
Deferred income and advance
payments 5,821 986 6,244
------------------------------ -------- --------- -------------
18,348 18,302 18,465
---------------------------- -------- --------- -------------
13. Borrowings
At 30 April At 30 At 31 October
2017 April 2016
2016
Restated
GBP000's GBP000's GBP000's
----------- ----------- --------- -------------
Borrowings 6,553 891 -
------------- ----------- --------- -------------
During March 2017, the Group extended its facilities with
Barclays Bank plc, with the renewal of its GBP4m revolving credit
facility for 12 months alongside the Group's existing variable
overdraft facility.
14. Reconciliation of (loss)/profit before tax to cash generated
from operations
Half year Half year Year ended
ended ended 31
30 April 30 April October
2017 2016 Unaudited 2016
Unaudited Audited
GBP000's GBP000's GBP000's
------------------------------ ---------- ---------------- ----------
(Loss)/profit before tax
including discontinued
operations (3,194) 593 (6,529)
Finance costs 194 92 232
Depreciation of property,
plant and equipment 135 134 250
Profit on disposal of
property - - (213)
Goodwill impairment charge - - 355
Other non-cash movements
including write downs
of fixed assets - - 28
Loss on disposal of Astley
group of companies - - 1,740
Operating cash flows before
movements in working capital (2,865) 819 (4,137)
Movements in working capital:
Decrease/(increase) in
inventories (437) (163) 469
Decrease/(increase) in
trade and other receivables (2,682) (786) 1,767
Increase/(decrease) in
trade and other payables (939) (1,913) 2,891
Increase/(decrease) in
provisions (178) (125) 392
-------------------------------- ---------- ---------------- ----------
Cash generated from/(used
in) operations (7,101) (2,168) 1,382
-------------------------------- ---------- ---------------- ----------
The impact of the disposal of Astley Facades group of companies
is adjusted in the movements in working capital in the above
note.
The profit on sale of freehold property of GBP213,000 relates to
sales proceeds of GBP463,000 less net book value of GBP250,000
eliminated on disposal.
15. Related party transactions
Sale of freehold property
As reported in the annual report, at the end of October 2016 a
freehold property was sold to the Chief Executive Officer. The sale
price of GBP463,000, and the future rental charge, were determined
by independent valuers on an arm's length basis and were approved
by the Non-Executive Directors in advance of the transaction. The
Group generated a profit of GBP213,000 as a result of this
transaction.
Key management personnel
Darren Cornwall resigned as a director on 15 April 2016 and has
subsequently undertaken consultancy work for the Group. For the
period ended 30 April 2017, he received GBP51,517 in respect of
these services on an arm's length basis.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EASXSAFSXEEF
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July 25, 2017 02:01 ET (06:01 GMT)
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