TIDMPGY
RNS Number : 0055M
Progility PLC
07 October 2016
7 October 2016
Progility plc
("Progility" or "the Company" or "the Group")
Final Results
Progility plc (AIM: PGY) is the holding company of a systems
integration and project management services group which has been
created to provide a range of project management services including
innovative and market leading technology solutions.
Chairman's Statement
I am pleased to present Progility's results for the twelve
months to 30 June 2016. Early in the period we reconsidered the
basis upon which we reported our results as we evolved into a more
stable set of businesses. Although our focus remains to apply our
expertise as a broadly based project management services group we
are now very focused on achieving efficient and effective
operations within three distinct areas - Professional Services,
(comprising our training and recruitment businesses), Healthcare
(comprising Starkstrom) and Communications (comprising our
technology businesses in India and Australia). Wherever possible we
will seek to exploit opportunities to combine activities across
these segments and across geographies, but during the period under
review the focus has been on improving the cost effectiveness and
overall efficiency of the separate segments and to instil a much
more rigorous approach to all aspects of our business.
During the year we have therefore incurred some additional cost
in implementing change, both in reducing Corporate headcount and
also in closing certain activities which were not and are no longer
expected to generate an acceptable return.
Financial Performance
Overall revenue was GBP61.6 million from continuing operations,
which represented growth of 3%, from continuing operations, over
the prior year. Within this we saw a reduction in sales in both
Professional Services and Healthcare but strong revenue growth in
Communications operations, primarily as a result of consolidating a
full year of results from India. An operating loss of GBP0.1
million from continuing operations, before highlighted items, was
clearly disappointing but in arriving at this we have absorbed a
significant level of cost in implementing changes to our
operational cost base and in headcount reduction.
The overall reported post tax loss for the year was GBP2.7
million which is after interest charges of GBP3.0 million, a write
down of goodwill in Australia of GBP0.6 million and a credit of
GBP2.0 million arising from the release of provisions on our Indian
acquisition.
Our strategic report contains more detailed commentary on our
three business areas.
Management and the Board
During the year we have seen a number of changes to the Board.
At the end of July 2015, Donald Stewart left the company, some
three years after joining Progility, to pursue his own professional
practice and become more involved as a non-executive with a range
of companies. Hugh Cawley, our CFO, left the Company at the end of
March 2016 after a year with the Group. We have strengthened the
finance function within our operating segments and have not
therefore considered it necessary to have a CFO on the Board, at
this time. We continue to keep this situation under review. We are
grateful to both Donald and Hugh for their efforts on behalf of the
Group. Outside the Board we have made additions to senior
management, in particular in Australia where Campbell Johnson
joined in September 2015, and is already making great strides in
changing the performance of our Australian activities. He is also
providing his expertise elsewhere in the Group, particularly at
Starkstrom, to drive efficiencies in the business.
Prospects
The focus will remain, in the year ahead, on embedding greater
efficiency into our operating units. We have made the changes to
enable this to happen and expect our future performance to improve.
We will ensure that future growth is both sustainable and
profitable. We believe that there are significant opportunities for
our businesses to develop and expect a more positive outcome this
year.
Wayne Bos
Executive Chairman
7 October 2016
Strategic Report
Progility plc - Overview
The Progility Group now comprises three business segments
Professional Services, (comprising the training and recruitment
businesses), Healthcare (comprising Starkstrom) and Communications
(comprising our technology businesses in India and Australia). This
move from a historically geographic segment approach reflects our
more stable set of businesses. Using this spread of skills and the
geographic reach of our businesses it is still the intention, where
opportunities arise, to create solutions for both using the skills
and resources of our three segments to deliver project management
solutions. However, the focus in the period under review has been
to implement the necessary changes to our cost base and to our
operational practices to achieve more acceptable returns in the
future.
The Group will continue to be run as a portfolio, making
additions and disposals when the opportunity to generate above
average returns arises. The current period saw no acquisitions or
disposals.
Principal activity and business review
The principal activities of the Group during the period, as
outlined above, are Professional Services, Healthcare and
Communications.
Corporate Management and segmental reporting
The group's global headquarters remain in central London to suit
the diverse needs of the various businesses within the Group.
Our executive management team comprises highly capable managers
within sales, finance and operations. The team has evolved to
become an effective operation, able to deliver across their
respective geographical client base. Their combined experience
covers both large and medium sized entities and includes: systems
integration, consulting, business development, sales, classroom and
e-learning, digital transformation, financial control and operating
in a public company environment. Our executive team are experienced
in mergers and acquisitions, business integration and business
improvement.
Our business is managed through three business segments to
maximize our ability to communicate and to deliver our full range
of products and expertise to our key clients' decision makers
across the diverse territories and time zones in which we operate.
These three segments reflect the management responsibility and
accounting arrangements used to manage and report upon the
performance of the business.
Key performance indicators (KPI's) for each business are
revenue, gross profit margin and earnings before interest,
taxation, depreciation and amortisation (EBITDA).
The Group's chief operating decision maker remains the Executive
Chairman who reviews and considers these reports at the formal
board meetings.
Professional Services
As reported As reported
Year ended Year ended
30.6.16 30.6.16 30.6.15 30.6.15
GBP000 GBP000 GBP000 GBP000
Revenue Segment Profit Revenue Segment Profit
Professional Services continuing operations 15,924 1,087 16,882
1,084
Professional Services discontinued operations 824 (268) 344
(239)
Professional Services total 16,748 819 17,226 845
The founding unit of the Group, the Training business, operates
under the ILX brand. ILX is a leading provider of training in best
practice for programme, project and IT service management,
including strategic programme and project management consulting
solutions. ILX also develops bespoke training courses for
large-scale IT migration and transformation projects. We deliver
ILX services from offices in the UK and Dubai and Australia, with
partnerships extending into Europe and the US.
TFPL, Sue Hill and Progility Recruitment are our UK-based
recruitment services brands. TFPL became part of the Group in July
2014 with Sue Hill joining in November 2014. Together they form a
recruitment division which boasts a pool of quality assured
candidates trained in project management services, including
digital information management candidates. Progility Recruitment
was established in January
2014 to offer specific project management recruitment services.
Obrar is a consulting-led project management services company, with
over 30 years' experience of delivering technology and people
solutions in the UK and internationally. Obrar focuses on
multimedia-driven contact centres, corporate technology
infrastructure and associated operational change management.
Woodspeen Training works with individuals and companies across a
range of occupational areas, led by an experienced team of advisors
and trainers, operating from seven locations across the UK,
enhancing young people's skills and helping them into work.
Overall revenue of this segment fell by just under 3%, though we
were able to maintain profit margins in line with the previous
year, such that the decline in segment profit was also 3%. However,
taking into account the closure of the southern operations of
Woodspeen, which is treated as a discontinued activity, underlying
operating margins have materially improved.
During the year the ILX training business achieved revenue
almost in line with the prior year with slightly improved operating
margins. This year has been a transitory one for the business with
its new Managing Director, who was appointed just before this
period, transforming the management team and implementing steps to
improve operational efficiency and marketing effectiveness.
The recruitment business, which specialises in both temporary
and permanent resources in information management, has had a
challenging year with differing performance across the various
industry categories of our clients.
Woodspeen, for which this is the first full year under our
ownership, has contributed strongly to revenue, but also made only
a modest contribution to profit, as a result of the cost of
reorganising the business to deliver our learning courses
efficiently and effectively. This involved ceasing providing
training in the south of the UK, disclosed as discontinued
operations above, and in note 11 to the accounts. We see
significant opportunities to grow this business which addresses an
important area for both government and the wider community in
getting people equipped to work.
Healthcare
As reported As reported
Year ended Year ended
30.6.16 30.6.16 30.6.15 30.6.15
GBP000 GBP000 GBP000 GBP000
Revenue Segment Profit Revenue Segment Profit
Healthcare 11,148 62 13,688 984
Healthcare comprises the activities of the Starkstrom Group, the
operating theatre and critical care business, which delivers and
installs advanced medical equipment and is a leading provider of
fully integrated solutions, with over 40 years' experience in the
UK sector. Starkstrom also exports medical equipment overseas, with
a particular focus on the Middle East region.
Although the headline performance was disappointing, with
revenue down by 19% and segment profit down by 94%, there are
specific factors which underpin this.
The business invested in the establishment of a marketing
operation in Dubai to try and enhance the presence of Starkstrom in
the Middle Eastern market. The expectations of this new office were
not met and it has now been closed. In total this cost the business
around GBP0.7 million during the year. There was also a much
greater focus during the year on the gross margin that had to be
achieved on contracts that we were bidding for. This resulted in us
being unsuccessful on some contracts where the return was
unacceptably low.
We have also taken steps to minimise the impact of the decline
in the value of sterling following the referendum. We source a
number of component items from within the Eurozone countries and
are seeking to ensure that the cost of sterling's post referendum
valuation is shared by both the supplier and our customers. We have
also expanded the range of products that we can supply alongside
our core contracts in operating theatres.
We entered the current financial year with our highest recorded
order book of almost GBP6.0 million which, taken together with our
recurring maintenance income, gives us greater visibility for the
current year.
Communications
As reported As reported
Year ended Year ended
30.6.16 30.6.16 30.6.15 30.6.15
GBP000 GBP000 GBP000 GBP000
Revenue Segment Profit Revenue Segment Profit
Communications 34,559 515 29,142 194
Communications comprises the technology businesses in Australia
and India.
Progility Technologies in Australia operates a communication
systems integration business that designs, implements, trains and
maintains technology solutions for medium and large enterprises.
Its focus is on the transport, utilities, retail and healthcare
industries in Australasia and on the mining industry globally. The
business is headquartered in Melbourne, Australia, with five
regional sales offices.
The client facing brands include:
-- Communications Australia, focused on communication systems integration;
-- CA Bearcom, Australia's largest distributor of two-way radio communications products;
-- Minerals & Energy Technologies, which designs, implements
and manages an array of integrated communications solutions for
specific mining, energy and transport projects.
Progility Technologies Pvt. Ltd, formerly known as Unify
Enterprise Communications Pvt provides unified communications and
systems integration solutions across India and surrounding
countries. The business has significant overlap of product
offerings with Communications Australia whilst adding extensive
service and maintenance capabilities, providing level 1, 2 and 3
support to its clients, which include over 200 hospitals under
contract in the Indian market.
The Communications segment overall has shown strong sales growth
of 19% and improvement in profit. Our Indian business, acquired in
December 2014, has had a very good year. Revenue contribution from
our business in India grew by 105% to GBP19.0 million, a result of
both organic growth and consolidating a full year of results and,
with tight control over pricing and costs, produced a strong
performance. During the year the business has been stabilised
across all our target business segments (voice, video, data,
surveillance and services) and we have strengthened the Progility
brand across the enterprise market.
Following the acquisition by Progility it has won back the
confidence of the OEM's and our partner network and has
successfully entered the high end Video Surveillance market.
The year ahead in India will require us to continue to be alert
to new opportunities as the Indian government increases its
expenditure on infrastructure but we will need to ensure that we do
not succumb to pressure on margins.
In Australia the year under review was one of consolidation and
the beginnings of recovery. The core business has been rationalised
and we have refocussed our core business relationships. This focus
has resulted in us winning the Unify Partner of the Year 2015, and
two awards from Motorola. A number of partner relationships were
terminated during the year.
Whilst we remain in a challenging market, the rigorous focus on
our business and its key efficiencies introduced in the last year
will enable us to drive the business forward.
Highlights
-- 3.0% growth in revenue from continuing operations, year on year.
-- Loss before tax GBP1.4 million from continuing operations
(2015: GBP0.7 million profit from continuing operations) after
highlighted items of GBP1.4 million profit (2015: GBP2.6 million
profit)
Highlighted items
As reported As reported
Year ended Year ended
30.6.16 30.6.15
GBP000 GBP000
Highlighted items 1,412 2,551
In the period under review the Group was able to release GBP2.0
million of its provision made for potential tax liabilities, when
Progility Technologies Pvt Limited was acquired at the end of 2014.
The provision has been reduced by GBP2.0 million, as no tax
liabilities have arisen relating to the prior years up to and
including 2011, and the balance of GBP1.0 million is estimated to
be sufficient to provide for any liabilities which arise relating
to the outstanding years to 2013.
A decision was also taken to impair GBP0.6 million of goodwill
in Progility Pty Limited in the period, a reflection of the
challenging market in which our Australian businesses currently
operate. However, the aforementioned focus on our business and its
key efficiencies will enable us to drive the business forward in
the coming year.
Central corporate costs
As reported As reported
Year ended Year ended
30.6.16 30.6.15
GBP000 GBP000
Central corporate costs (1,770) (1,838)
Central costs comprise back office operations including
property, legal, finance, IT, communications, HR and board costs in
London. There have been a number of non-recurring items incurred in
the year as part of a rationalisation exercise to reduce central
costs, and which will provide benefits in the coming year.
Additional costs, around staff engaged on acquisitions or
disposals, may also be incurred when such activity takes place.
Financial Review
Operating performance
The Group delivered revenues of GBP62.5 million (2015: GBP60.1
million), growth of 4.0%. Gross margins decreased slightly to 37.3%
(2015: 38.3%). Operating loss after excluding highlighted items
(see note 10) fell to GBP0.4 million (2015: GBP0.2 million
profit).
Highlighted items include the release of GBP2.0 million from a
GBP3.0 million provision made in the prior year, which arose from
the acquisition of Progility Technologies Pvt in India, and an
impairment charge of GBP0.6 million relating to goodwill in the
Australian operations.
Result Underlying
for the result
period for the
ended Highlighted period
30.6.2016 items ended
30.6.2016 30.6.2016
GBP'000 GBP'000 GBP'000
Revenue - continuing operations 61,631 - 61,631
Revenue - discontinued
operations 824 - 824
Revenue - total 62,455 - 62,455
Operating profit/(loss)
- continuing operations 1,306 - (106)
Operating profit/(loss)
- discontinued operations (268) - (268)
Operating profit/(loss)
- total 1,038 1,412 (374)
=========== ============ ===========
Finance costs
The Group incurred net finance costs of GBP2.7 million (2015:
GBP2.2 million) during the reporting period. The year on year
increase reflects the higher levels of debt in the Group, primarily
relating to GBP3.6 million of new shareholder loans raised during
the year.
Taxation
The tax expense for the year was GBP1.0 million (2015: GBP0.02
million), higher than the prior year as a result of taxes incurred
in India and the de-recognition of deferred tax assets relating to
Progility plc.
Profit for the period and earnings per share
The loss attributable to equity shareholders was GBP2.7 million
(2015: GBP0.5 million profit) from continuing and discontinued
operations. Losses per share were 1.35 pence basic and diluted
(2015: 0.24 pence earnings per share basic and diluted) from
continuing and discontinued operations.
Hive Down
Progility plc is the AIM listed holding company of the Progility
Group. Until 30 June 2015 the United Kingdom operations of the ILX
Group training division of the business traded as part of the
Progility plc legal entity. A decision was made to hive down the
assets, liabilities and trade of the ILX training division to a
100% owned subsidiary company, ILX Group plc, with effect from 1
July 2015. Details of the assets and liabilities transferred to ILX
Group plc are included in the notes to the accounts. It should be
noted that this transaction has no impact on the consolidated
financial statements as it is intra-group.
Going Concern
The Group has prepared its accounts on a going concern basis
based on current forecasts for the period through to December 2017.
While the Group had net current liabilities at the year-end, the
Board believes that it can meet its day-to-day working capital
requirements from operating cash flows and its existing facilities.
The Company's largest shareholder, Praxis Trustees Limited, as
trustee of the DNY Trust, announced its intention, on 7 July 2014,
to support Progility by making up to GBP30 million available on
commercial terms. This facility is currently GBP17 million
undrawn.
Cash flow, net debt and facilities
Cash flow
Cash generated from operating activities was GBP1.8 million
(2015: GBP1.3 million). The Group generates operating cash flow
from its product sales, maintenance contracts and from advance
payments from customers.
The Group paid GBP0.6 million in income tax during the period of
reporting (2015: GBP0.4 million paid).
The Group continues to invest in its staff development, its
product range and also incurred capital expenditure in the period
relating to updates of intellectual property assets, product
development and its internal systems and equipment to improve
operating efficiency.
Net debt and facilities
At the balance sheet date the Group's debt comprised loans and
overdrafts due within one year of GBP1.2 million (2015: GBP3.3
million) and GBP18.5 million (2015: GBP14.8 million) falling due in
over one year. Of these amounts a total of GBP18.8 million
represents shareholder loans made up of GBP0.4 million of
convertible loan notes and GBP18.4 million of other notes.
Net debt at the year end, defined as all bank and third party
debt, less cash at bank, excluding shareholder loans was an asset
of GBP2.8m million (2015: asset of GBP0.6 million). This comprised:
GBP3.6 million in cash balances, less GBP0.8 million in invoice
discounting facilities.
Consolidated Statement of Comprehensive Income for the Year
ended 30 June 2016
Before Before
Highlighted Year Highlighted Year
items Highlighted ended items Highlighted ended
30.6.2016 items 30.6.2016 30.6.2015 items 30.6.2015
Continuing operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 61,631 - 61,631 59,712 0 59,712
Cost of sales (39,015) - (39,015) (36,638) 0 (36,638)
------------- ------------ ----------- ------------- ------------ -----------
Gross profit 22,616 - 22,616 23,074 - 23,074
Administrative
and distribution
expenses (22,722) (588) (23,310) (22,650) (676) (23,326)
Other income - 2,000 2,000 - 3,227 3,227
--- ------------- ------------ ----------- ------------- ------------ -----------
Operating (loss)/profit (106) 1,412 1,306 424 2,551 2,975
Finance income 263 - 263 65 - 65
Finance costs (2,962) - (2,962) (2,296) - (2,296)
------------- ------------ ----------- ------------- ------------ -----------
Loss/(profit)
before tax (2,805) 1,412 (1,393) (1,807) 2,551 744
Tax expense (1,038) - (1,038) (64) 46 (18)
------------- ------------ ----------- ------------- ------------ -----------
Loss/(profit)
after tax (3,843) 1,412 (2,431) (1,871) 2,597 726
Discontinued
operation
Loss after tax
from discontinued
operations (268) - (268) (239) - (239)
------------- ------------ ----------- ------------- ------------ -----------
Loss/(profit)
for the year
attributable
to equity shareholders (4,111) 1,412 (2,699) (2,110) 2,597 487
============= ============ ============= ============
Items that may
be reclassified
to profit or
loss
-----------
Currency translation
differences on
foreign operations 662 (287)
----------- -----------
Other comprehensive
income, net of
tax 662 (287)
----------- -----------
Total comprehensive
(loss)/income (2,037) 200
=========== ===========
(Loss)/earnings
per share from
continuing operations
Basic (1.22)p 0.36p
Diluted (1.22)p 0.36p
Consolidated statement of Financial Position for the Year ended
30 June 2016
As at As at
30.6.2016 30.6.2015
Assets GBP'000 GBP'000
Non-current assets
Plant and equipment 1,029 1,449
Intangible assets 19,501 20,135
Deferred tax asset 709 888
----------- -----------
Total non-current
assets 21,239 22,472
----------- -----------
Current assets
Inventories 3,260 4,001
Trade and other receivables 14,931 16,554
Other current assets 2,827 2,107
Tax receivable - 41
Cash and cash equivalents 3,564 3,538
----------- -----------
Total current assets 24,582 26,241
Total assets 45,821 48,713
----------- -----------
Current liabilities
Trade and other payables (20,309) (19,889)
Deferred/contingent
consideration (681) (2,041)
Provisions (2,650) (4,282)
Tax liabilities (174) (28)
Bank and shareholder
loans (1,174) (3,288)
----------- -----------
Total current liabilities (24,988) (29,528)
----------- -----------
Non-current liabilities
Shareholder loans (18,463) (14,837)
Deferred tax liability (186) (199)
Provisions (131) (90)
----------- -----------
Total non-current
liabilities (18,780) (15,126)
----------- -----------
Total liabilities (43,768) (44,654)
----------- -----------
Net assets 2,053 4,059
=========== ===========
Equity
Issued share capital 19,967 19,967
Share premium 114 114
Other reserve 75 75
Merger reserve (14,854) (14,854)
Own shares in trust (2) (2)
Share option reserve 42 43
Retained earnings (3,620) (953)
Foreign currency translation
reserve 331 (331)
Total equity 2,053 4,059
=========== ===========
Consolidated Cash Flow Statement for the Year ended 30 June
2016
Year ended Year ended
30.6.2016 30.6.2015
GBP'000 GBP'000
Operating profit 1,038 2,736
Adjustments for:
Depreciation and amortisation 1,135 1,154
Loss on fixed asset disposal 96 86
Impairment of intangibles 588 229
Gain on bargain purchase (3,227)
Share option charge 31 40
Revaluation of own shares held
in trust - 48
Movement in inventories 1,113 1,101
Movement in trade and other receivables 2,400 146
Movement in trade and other payables (4,446) (942)
Exchange difference on consolidation (170) (59)
----------- -----------
Cash generated from operations 1,785 1,312
Income taxes (paid)/recovered (590) (439)
----------- -----------
Net cash generated from operating
activities 1,195 873
----------- -----------
Investing activities
Interest received 263 65
Purchases of property and equipment (388) (555)
Capitalised expenditure on product
development (64) (52)
Acquisition of subsidiaries,
net of cash acquired (1,361) (8,032)
----------- -----------
Net cash used by investing activities (1,550) (8,574)
----------- -----------
Financing activities
Proceeds from borrowings 2,775 11,286
Repayment of borrowings (2,402) (1,235)
Interest costs paid (75) (408)
Net cash from financing activities 298 9,643
----------- -----------
Net change in cash and cash equivalents (57) 1,942
Cash and cash equivalents at
start of year 3,350 1,533
Effect of foreign exchange rate
differences 271 (125)
Cash and cash equivalents at
end of year 3,564 3,350
=========== ===========
Cash and cash equivalents comprise
Cash in hand and at bank 3,564 3,538
Bank overdraft - (188)
3,564 3,350
=========== ===========
Statement of Changes in Equity for the year ended 30 June
2016
Called Own Foreign
up Share shares Share currency
share premium Other Merger in option translation Retained
capital account reserve reserve trust reserve reserve earnings Total
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance
at 30.6.2014 19,967 114 75 (14,854) (50) 16 (44) (1,453) 3,771
Options
granted - - - - - 40 - - 40
Revaluation
of own
shares - - - - 48 - - - 48
Options
lapsed
and waived - - - - - (13) - 13 -
Transactions
with owners - - - - 48 27 - 13 88
-------- -------- -------- --------- -------- -------- ------------ --------- --------
Profit
for the
year - - - - - - - 487 487
Other
comprehensive
income:
Foreign
currency
translation
adjustment - - - - - - (287) - (287)
-------- -------- -------- --------- -------- --------
Total
comprehensive
income
for the
year - - - - - - (287) 487 200
-------- -------- -------- --------- -------- -------- ------------ --------- --------
Balance
at 30.6.2015 19,967 114 75 (14,854) (2) 43 (331) (953) 4,059
======== ======== ======== ========= ======== ======== ============ ========= ========
Balance
at 30.6.2015 19,967 114 75 (14,854) (2) 43 (331) (953) 4,059
Options
granted - - - - - 31 - - 31
Revaluation
of own
shares - - - - - - - - -
Options
lapsed
and waived - - - - - (32) - 32 -
Transactions
with owners - - - - - (1) - 32 31
------- ---- --- --------- ---- ----- ------ -------- --------
Loss for
the year - - - - - - - (2,699) (2,699)
Other comprehensive
income:
Foreign
currency
translation
adjustment - - - - - - 662 - 662
------- ---- --- --------- ---- -----
Total comprehensive
income
for the
year - - - - - - 662 (2,699) (2,037)
------- ---- --- --------- ---- ----- ------ -------- --------
Balance
at 30.6.2016 19,967 114 75 (14,854) (2) 42 331 (3,620) 2,053
======= ==== === ========= ==== ===== ====== ======== ========
Financial Information
The preliminary financial information does not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006 but is derived from the audited accounts for the
years ended 30 June 2016 and 30 June 2015.
Progility plc (the "Company") is a public limited company
incorporated in England and Wales and, together with its
subsidiaries, forms the Progility group (the "Group"). These
financial statements are presented in pounds sterling which is the
Company's functional currency. All amounts have been rounded to the
nearest thousand unless otherwise indicated.
The Group financial statements were authorised for issue by the
Directors on 7 October 2016.
The Group financial statements consolidate those of the Company
and its subsidiaries. The Company financial statements present
information about the Company as a separate entity and not about
its Group.
Both the Group financial statements and the Company financial
statements have been prepared and approved by the Directors in
accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union ("EU"). In publishing the
Company financial statements here together with the Group financial
statements, the Company has taken advantage of the exemption in
Section 408 of the Companies Act 2006 not to present its individual
statement of comprehensive income and related notes that form a
part of these approved financial statements.
The statutory accounts for the year ended 30 June 2016 will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting. Statutory accounts for the year ended 30
June 2015 have been filed with the Registrar of Companies. The
auditor's report on those 2015 accounts was unqualified.
Basis of preparation
The preparation of the Group accounts in conformity with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities
and the disclosure of contingent liabilities at the date of the
financial statements. The key accounting estimates and assumptions
are set out below. Such estimates and assumptions are based on
historical experience and various other factors that are believed
to be reasonable in the circumstances and constitute management's
best judgment of conditions at the date of the financial
statements.
In the future, actual experience may deviate from these
estimates and assumptions, which could affect the financial
statements as the original estimates and assumptions are modified,
as appropriate, in the year in which the circumstances change.
The financial statements have been prepared on the historical
cost basis as modified by financial assets and financial
liabilities (including derivative financial instruments) at fair
value.
Highlighted items
The Group incurred costs during the year which we have
highlighted. These costs, set out below, include transaction costs,
restructuring costs and other strategic, non-cash items and
released provisions, including impairment, bargain gain on
acquisition and non-recurring acquisition expenses. This has
resulted in the following charges, gains and intangibles impairment
as follows:
Year ended Year ended
30.6.2016 30.6.2015
GBP'000 GBP'000
Recurring
Acquisition and merger costs
* - 447
Non-recurring
Bargain gain on acquisition ** - (3,227)
Impairment of intangibles *** - 229
Impairment of goodwill **** 588 -
Release of transfer pricing provision***** (2,000) -
Total highlighted items (1,412) (2,551)
=========== ===========
* Relates to the acquisitions of Starkstrom group, Progility
India and Woodspeen in the period ended 30.6.2016 (2015:
acquisition of Sue Hill and Progility Pty Ltd)
** Relates to gain on the acquisition of Progility India.
*** Relates to the impairment of Obrar intangible assets.
**** Relates to the impairment of Goodwill in Progilty Pty Ltd.
***** Relates to the transfer pricing provision made on the acquisition of Progilty India.
Earnings per share from continuing operations
Earnings per share is calculated by dividing loss from
continuing operations attributable to shareholders by the weighted
average number of shares in issue during the year.
Potential ordinary shares arising under potential conversion of
the convertible loan and share options outstanding are considered
anti-dilutive for the year ended 30 June 2016 and the period ended
30 June 2015. At 30 June 2016, the 4.45 million outstanding share
options were excluded from the dilution calculation as the exercise
price of 10 pence was greater than the average price for the period
in issue.
Year
Year ended ended
30.6.2016 30.6.2015
GBP'000 GBP'000
(Loss)/Profit for the year from
continuing operations attributable
to equity shareholders (2,431) 726
============ ============
Weighted average shares 199,666,880 199,666,880
Weighted average shares for
diluted earnings per share 199,666,880 199,666,880
============ ============
Basic (loss)/earnings
per share from continuing
operations (1.22)p 0.36p
Diluted (loss)/earnings
per share from continuing
operations (1.22)p 0.36p
For further information, please
contact:
Progility plc
020 7371
Wayne Bos, Executive Chairman 4444
www.progility.com
SPARK Advisory Partners Limited
(Nominated Adviser)
020 3368
Mark Brady 3551
020 3368
Sean Wyndham-Quin 3555
W H Ireland Limited (Broker)
020 7220
Adrian Hadden/Mark Leonard 1666
This announcement contains information which, prior to its
disclosure, was inside information for the purposes of the Market
Abuse Regulation.
Group Description
Progility plc, the systems integrator and project management
services firm has three operating divisions: Professional Services,
Healthcare and Communications.
Professional Services
The Professional Services division includes ILX Training, the
TFPL, Sue Hill and Progility Recruitment UK-based recruitment
service brands, Obrar consulting and Woodspeen Training.
The founding unit of the Group, ILX Training is a leading
provider of training in best practice for programme, project and IT
service management, including strategic programme and project
management consulting solutions. ILX also develops bespoke training
courses for large-scale IT migration and transformation projects.
We deliver ILX services from offices in the UK and Dubai and
Australia, with partnerships extending into Europe and the US.
TFPL became part of the Group in July 2014 with Sue Hill joining
in November 2014. Together they form a recruitment division which
boasts a pool of quality assured candidates trained in project
management services, including digital information management
candidates. Progility Recruitment was established in January 2014
to offer specific project management recruitment services. Obrar is
a consulting-led project management services company, with over 30
years' experience of delivering technology and people solutions in
the UK and internationally. Woodspeen Training works with
individuals and companies across a range of occupational areas, led
by an experienced team of advisors and trainers, operating from
seven locations across the UK, enhancing young people's skills and
helping them into work.
Communications
The Communications division comprises Progility Technologies in
Australia and India.
Progility Technologies operates a communication systems
integration business that designs, implements and maintains
solutions for medium and large enterprises with a focus on the
rail, port, oil and gas, power, water and healthcare industries in
Australia, on the healthcare, hospitality, financial services,
public sector, manufacturing, education and IT sectors in India and
on the mining industry globally.
The Australian business, which was merged with the Group in
October 2013, is headquartered in Melbourne, Australia, and has
offices in Sydney, Brisbane, Perth, Latrobe Valley, and
Castlemaine. The Indian business joined the Group in December 2014,
is headquartered in Mumbai and operates through a network of 21
offices throughout India.
Healthcare
Healthcare comprises the activities of the Starkstrom Group, the
operating theatre and critical care business, which delivers and
installs advanced medical equipment and is a leading provider of
fully integrated solutions, with over 40 years' experience in the
UK sector. Acquired in July 2014, Starkstrom is headquartered in
north-west London and with a manufacturing and assembly facility in
Leicester.
Progility Finco
Progility Finco is a wholly owned subsidiary of Progility plc
which was incorporated as a special purpose vehicle in order to
issue loan notes which would be admitted to the Official List of
the Channel Islands Securities Exchange Authority to help meet the
financing requirements of the Group.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GCBDGIUGBGLR
(END) Dow Jones Newswires
October 07, 2016 06:06 ET (10:06 GMT)
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