TIDMAUK
RNS Number : 7306G
Aukett Swanke Group PLC
31 March 2022
Aukett Swanke Group Plc
Announcement of final audited results
for the year ended 30 September 2021
Announcement of final audited results for the year ended 30
September 2021
Aukett Swanke Group plc ("the Group"), the international group
of architects, interior designers and engineers announces its final
audited results for the year ended 30 September 2021.
Highlights
Revenue (less sub consultant costs) decreased by 22% to
GBP8,822k (2020: GBP11,336k) primarily due to the continuing impact
of COVID leading to uncertainty in decision making and inevitable
delays.
Businesses in both the UK and the Middle East were loss-making
however Continental Europe made a profit (excluding Group
management charges) of GBP330k.
The overall loss for the year was GBP1,136k (2020: loss GBP20k),
largely due to sup-optimal group plc costs and a one-off impairment
of GBP249k.
As the impacts of the pandemic subsided in the second half of
the year, revenue stabilised, increasing to GBP4,683k (H1:
GBP4,139k) and losses before impairment reduced to GBP265k (H1:
loss GBP1.017m).
Operations
Looking forward the Group are considering a range of structural
and geographic options to stabilise and improve the Group's
underlying financial position.
Following the retirement of Nicholas Thompson at the end of the
year, a new CEO will step in to lead the business in the next phase
of its operations.
Nicholas Thompson, CEO said
"The pandemic has continued to affect the operations of our
business, and any signs of recovery have been slow to emerge. The
efforts of the business to adapt to the current economic climate
has resulted in stabilised revenues in H2, higher than those in the
same period in 2020, however we still have more to do if we want to
return to the level of profit achieved pre-pandemic.
As stated in our interim accounts, H1 was strongly impacted by
the uncertainties created by COVID-19 in form of project delays and
deferments, and despite a more positive H2 than in 2020 there was
still a greater overall loss for the period.
I look forward to working with the Board until the end of 2022
and help the team address the range of options they are considering
in the operational review."
Enquiries
Aukett Swanke Group Plc - 020 7843 3000
-- Nicholas Thompson, Chief Executive Officer
-- Antony Barkwith, Group Finance Director
Arden Partners Plc - 020 7614 5900
-- Corporate Finance: John Llewellyn-Lloyd / Louisa Waddell / Benjamin Onyeama-Christie
Investor / Media Enquiries - 07979 604687
-- Chris Steele
30 March 2022
Extract from the Chairman's Statement
This is my third year as Non-Executive Chairman, and the
challenges that the business has experienced during this period
have been unprecedented: first Brexit, then the Covid pandemic, and
finally - at the time of writing - the ongoing tragedy taking place
in Ukraine.
During the last financial year, the world continued to suffer
the aftershocks of the worldwide pandemic, but the latest Omicron
variant appears to be considerably less lethal than the previous
ones. In consequence, many countries are starting to relax the
strict measures that have been in place for almost two years, and
there is a gradual return to many pre-pandemic activities,
including an uplift of international travel. Were this the
remaining major challenge, we would say with some confidence that
the services we provide would be determined by the market economics
that we were previously accustomed to and experienced in dealing
with.
However, the invasion of the Ukraine by Russian forces has
introduced a further challenge to the business. Leaving aside the
appalling humanitarian tragedy developing in front of our eyes, and
the obvious impossibility to predict either the nature of the
outcome or of its timing, these conditions will make exceptional
demands on our management and our talented professionals.
Despite these once-in-a-lifetime challenges, our executive team
and our highly motivated staff have continued to exercise their
considerable talents to work through these demanding environments.
They have retained their energy, optimism, and creativity to
provide the very highest levels of client service that is a key
part of our company's reputation.
Governments throughout the world will continue to use the
resources within their reach to power up their economies out of the
pandemic. It is axiomatic that the building industry is one of the
motors of the economy, and it is one of the few sectors that has
continued to operate even during periods of total lockdown. It is
thus not unreasonable to expect that demand for design services
will continue, albeit in a modified form.
During this financial year, we have seen a continuing level of
demand in all our markets, with a steady level of enquiries that
have often converted into commissions. As we said in last year's
Report and is equally applicable now: we remain focused on
maintaining our quality of service by adapting to changing
circumstances and until a more sustained market is evident.
This year's result, a loss of GBP1.5m which includes GBP249k
one-off non-cash impairment, is disappointing, given the
considerable efforts made by all parties to manage the Company in a
very difficult business environment. Nevertheless, I fully expect
our management team to continue to steer the Company around the
current difficulties, always looking for suitable business
opportunities.
Our CEO, Nicholas Thompson, has announced his retirement at the
end of this calendar year. His many accomplishments, as Chief
Executive Officer of the Company have been of the very highest
calibre, and the Company owes him a debt of gratitude for the
exceptional achievements during his long tenure. I would like to
take this opportunity to thank Nicholas for his service to the
Company throughout all these decades, for the excellence of his
leadership and the clarity of his commercial vision. As is to be
expected, the Board is addressing in a timely way the succession
issues arising from his departure
Raúl Curiel
Chairman
30 March 2022
Extracts from chief executive's statement, strategic and
directors' reports
This has been a difficult year for the Group. The whole of the
period was covered by the pandemic and as stated in previous
reports this has led to uncertainty in decision making and the
inevitable delays that this encourages. Notwithstanding this, we
continue to enjoy a level of repeat and new business instructions
albeit with some noticeable gaps in timing. We are, and continue to
be, appreciative of those clients who have supported us with
ongoing instructions during this period of uncertainty.
Our attention during the year has been on maintaining our
structure and ability to service those instructions that we have
which in turn has meant retaining a staff and overhead structure
that is sub optimal. This is essential to preserving critical mass
throughout our operations in advance of any meaningful recovery in
the demand for our services. At the same time, however, we have
addressed some longer-term fixed costs in the Plc company, the UK
and in the Middle East operations - the benefit of which is to be
seen in future periods and is further explained in the narrative
below.
Group Performance
The past two years has been a tale of four halves. The worst of
the pandemic was covered by the first six months in the current
year and our revenue performance for H2 2021 is now moving slowly
back to the early pandemic period covered by H2 2020.
H2 2021 H1 2021 H2 2020 H1 2020
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- --------- --------- ---------
Revenue less sub
consultant costs 4,683 4,139 4,476 6,860
Total net expenditure (5,043) (5,227) (4,994) (6,830)
Impairment of intangibles (249) - - -
Share of results
of associate and
joint ventures 95 71 336 106
(Loss) / profit
before tax (514) (1,017) (182) 136
Notwithstanding this out-turned result, the situation mid-year
continued to indicate no immediate end to the pandemic and we
continued to take advantage of the UK Government's Coronavirus
Business Interruption Loan Scheme ("CBILS") and various employee
schemes that were available throughout the Group's UK and overseas
operations. This action provided the necessary working capital to
allow us to make an orderly return to pre pandemic levels of
trading.
United Kingdom
Much of the income during the year resulted from long term
project work plus two sizeable new instructions: 457 apartments at
Vulcan Wharf for London Square and a state-of-art redevelopment
project for UCB with Heatherwick studio, both in our Veretec
business. The Veretec business has performed well throughout the
pandemic period. A number of projects were on site including: the
Asticus building in London; EQ, an Head office building for CEG in
Bristol; The STEAMhouse development for Birmingham City University;
Nova or n2 in Victoria for Land Securities; the Featherstone
building for Skanska in the City; and completion of the UK Pavilion
at Dubai's' Expo 2020. The second half also saw a raft of new
enquiries at the concept stage. With much of this work progressing
into the second half the operation returned a profit before tax
(excluding Group management charges) in H2 of GBP259k.
With the need to maintain our critical mass, attention was
focused on overhead cost savings. Two fixed cost areas have been
addressed, both under the property head. We have reduced our
archiving storage cost and have appointed Agents to re-structure
our head office location and find sub tenants - we are seeking cost
savings of between GBP250k pa and GBP350k pa on an annualised
basis, part of which has already been achieved.
The UK is expecting to significantly increase revenues net of
sub consultants in the next financial year. Current secure work for
2022 already totals more than the 2021 outturn result.
Middle East
With less work opportunities a proportion of our time was spent
in reducing our structural costs as the market for our services
began to shrink. This has involved reducing our Licence network
from seven down to (eventually) one and then terminating the linked
property and manager cost requirements. This does not restrict our
ability to work across all of the seven emirates but will require
some partnering of services through our network of trusted sub
consultant providers. As a result of this re-structuring we have
impaired our remaining investment in Shankland Cox Limited and this
is shown as a separate line in the results.
During the year we were on site with a number of projects
including the Leader Sports Mall, Kyber, Safa Community and
Pristine Schools, two projects on Expo: Nissan Café and the
Pakistan Pavilion, two projects for WSP and three villas on
Jumeriah Park. As well as the further rollout of Etisalat retail
stores, and three projects in the Emirate of Al-Ain, a Mall and a
Museum along with the Sheikh Mohammed bin Khalifa House
refurbishment.
Notwithstanding the initiatives stated above, with revenues down
14% in H2, a larger loss before tax (excluding Group management
charges and impairment provision) than H1 was recorded at GBP210k.
The forward position indicates a continuing fall in revenue, but
offset by the savings regime that is in place.
Continental Europe
The Continental group of operations has again been the best
performing of all three operations this year with profits
(excluding Group management charges) of GBP330k (2020: GBP657k).
The main contributor was our associate office Aukett + Heese in
Berlin, which with its sister joint venture company in Frankfurt,
managed to navigate around the worst impacts of the pandemic for
the second year running.
The smaller operations of Istanbul and Prague were impacted to
differing degrees this year with Istanbul, a wholly owned
subsidiary, recording a profit (excluding Group management charges)
of GBP35k despite a turbulent year of political and economic
instability in Turkey. The severe impact of the pandemic on the
Czech Republic market led to a substantial fall in projected
workload resulting in the local directors implementing an orderly
closure of this joint venture operation by agreement with the Plc
Board.
Significant project completions in Berlin this year included the
topping out of the 56,000 sqm mixed use Am Tacheles project and the
entrance areas of the historic KaDeWe department store. The 34
storey Edge East Side Tower, the tallest building in Berlin and let
to Amazon, is now rising above 5(th) floor level and will complete
in 2023.
In Frankfurt completions included several fit-outs for corporate
and financial sector tenants alongside further landlord upgrades in
the iconic Messeturm building. A major new refurbishment project
has begun for an international bank in Frankfurt together with a
new building for a Tata Group subsidiary company in Bonn in
collaboration with the Berlin office.
The Istanbul office completed major corporate sector fit-out
projects for LC Waikiki, Google, Allianz and Vakifbank in Istanbul
and VM Ware in Bulgaria. A series of residential villa designs were
completed for DAAX in Erbil, Iraq and concept studies for further
buildings on the Cengis Campus.
The Moscow licensee completed a 37,500 sqm 500 apartment
residential project in Tyumen and, in collaboration with London,
concept designs for mixed use projects in Moscow including the
Skolkovo Educational Hub project and an international medical
centre on a nearby site. The Moscow operation's third year as a
licensee business continues to make a positive contribution to
Group other operating income. This latter project, being designed
in the UK studio, reached a work stage milestone pre Ukraine
conflict and a payment has been received since that time. No
further services are being performed. Any delay in receiving the
Licence fee is not material and is only recognised on receipt.
Group/Plc costs
As the Group has been reducing in size the Board is cognisant of
the disproportionate central cost in relation to the ability of the
underlying operations to generate sufficient profit to cover it. In
2020 we made some one-off savings which are not carried into 2021
resulting in a higher central cost charge this year. We are
expecting this total cost to be under GBP1m in the forthcoming year
with a further reduction in executive salaries. However, this
assumes that the underlying operations can achieve more than this
in profit generation to make the plc structure viable. With the
pandemic abating or at least becoming a normal course of business
event the Board is considering various structural changes to
mitigate the central cost impact.
Going Concern
We expected this year to present a continuing set of challenges
arising out of the pandemic and this has been the case. The main
challenge has been in relation to working capital which has reduced
over the period along with Group net assets as a result of losses
in our main trading operations and in administering the listed
company structure.
During the second half of the financial year, we saw our
revenues becoming more stable as project uncertainty became the
norm with our risk management procedures focusing on cost controls
where this was possible.
In February 2022 the Group received a 3 month covenant waiver to
avoid the risk of a breach on the net gearing covenant from
February to April 2022. The Group will then attend the scheduled 6
monthly review with Coutts & Co in May 2022 to discuss the
Groups' financing needs. The Group is therefore currently reliant
on the ongoing support of Coutts & Co.
The Directors are considering a range of options regarding our
strategy for the Group structure and geographic footprint to
stabilise and improve the Groups' underlying financial position.
With this in mind, the board has a reasonable expectation that the
Group will have adequate resources to operate for the foreseeable
future, however we face the usual uncertainties that occur in our
market regarding the future levels and timing of work that are made
by client decisions which are beyond our control, which could
result in the Group requiring additional external financing.
The going concern statement in the Directors report and
corresponding section in note 1 provide a summary of the
assessments made by the directors to establish the financial risk
to the Group over the next 12 months. This is further supplemented
by the principal risks and uncertainties section in the strategic
report.
Prospects and Operational Review
With the pandemic becoming a feature of commercial life we now
have more visibility on what the future holds, and this is now
factored into our plans. We are considering a range of options
about our future particularly in the context of the size and
ownership structure of the underlying entities and consequent
regulatory cost. In this context we shall be seeking a replacement
for the position of CEO to lead the delivery of the next phase of
the Group's plans.
Strategy
We are a professional services group that principally provides
architectural design services along with specialisms in master
planning, interior design, executive architecture and some
engineering services.
Our strategic objective is to provide a range of high-quality
design orientated solutions to our clients that allow us to create
shareholder value over the longer term and at the same time
provides a pleasant and rewarding working environment for our
staff. In addition, we undertake to deliver projects throughout the
technical drawing stages and, onto site and up to practical
completion and handover.
Our markets are subject to cyclical and other economic and
political influences in the geographies in which we operate, which
gives rise to peaks and troughs in our financial performance.
Management is cognisant that our business model needs to reflect
these variable factors in both our decision making and expectation
of future performance. The recent pandemic, which affected all our
operations, is an event that has required specific responses.
Similarly, the current conflict in Ukraine creates an uncertain
outlook in terms of both continuity of project instructions and new
business activity. However, the business and the component parts
have been through many sustained crises before and whilst losses
have been incurred the business has been able to respond positively
by adopting new business models along with re-structuring the
operational costs.
Business Model
We operate through a 'three hub' structure covering: the United
Kingdom with our office in London; the Middle East with a main
office in Dubai; and Continental Europe with three offices in
Berlin, Frankfurt and Istanbul; along with a Licensee operation in
Moscow. This model has remained unchanged for several years.
The presentation of the results of our operations is at local,
underlying, trading level and before the allocation of central
costs in order to provide a level playing field in terms of
comparable performance across the hubs as many only incur a small
management charge.
The United Kingdom hub comprises three principal service offers:
comprehensive architectural design including master planning,
interior design and fit-out capability and an executive
architectural delivery service operating under the 'Veretec'
brand.
Our Middle East business in the United Arab Emirates ("UAE")
comprises several registered companies marketed under the common
brand 'Aukett Swanke'. The service offers within the region include
architectural and interior design, post contract delivery services
including architect of record and engineering design and site
services. Increasingly these separate activities are being combined
as a single multidisciplinary service as demanded by this market
and we are now better placed to offer such a 'one-stop shop'
service. Following an internal review of the future cost structure
relating to the underlying entities the business will operate under
a single company in the region.
Our Continental European operations provide services offered
that are consistent with the other two hubs. Entities within this
hub can provide additional drawing services to the larger
operations in order to optimise both local and group wide
resources.
Management of the operations is delegated to locally based
Directors who are, in most instances, indigenous to the country
with oversight on a regular basis by the Group's executive
management.
As a Group we now have a total average full time equivalent
("FTE") staff contingent of 256 (2020: 291) throughout our
organisation which includes both wholly owned and joint venture
operations. We are ranked by professional staff in the 2022 World
Architecture 100 at number 63 (2021 WA100 number 54).
Nicholas Thompson Antony Barkwith
Chief Executive Officer Group Finance Director
30 March 2022
Consolidated income statement
For the year ended 30 September 2021
Note 2021 2020
GBP'000 GBP'000
------------------------------------------ ------ ---------- ----------
Revenue 2 12,014 12,166
Sub consultant costs (3,192) (830)
------------------------------------------ ------ ---------- ----------
Revenue less sub consultant costs 2 8,822 11,336
Personnel related costs (7,806) (9,600)
Property related costs (1,238) (1,295)
Other operating expenses (1,492) (1,324)
Other operating income 360 455
Operating loss (1,354) (428)
Finance costs (94) (112)
------------------------------------------ ------ ---------- ----------
Loss after finance costs (1,448) (540)
Gain on disposal of subsidiary - 52
Impairment of intangibles (249) -
Share of results of associate
and joint ventures 166 442
------------------------------------------ ------ ---------- ----------
Loss before tax (1,531) (46)
Tax credit 4 395 26
------------------------------------------ ------ ---------- ----------
Loss for the year 2 (1,136) (20)
------------------------------------------ ------ ---------- ----------
(Loss) / profit attributable to:
Owners of Aukett Swanke Group
Plc (1,123) 5
Non-controlling interests (13) (25)
------------------------------------------ ------ ---------- ----------
(1,136) (20)
------------------------------------------ ------ ---------- ----------
Basic and diluted earnings per
share for (loss)/profit attributable
to the ordinary equity holders
of the Company:
From continuing operations (0.69p) 0.00p
Total (loss)/profit per share 3 (0.69p) 0.00p
------------------------------------------ ------ ---------- ----------
Consolidated statement of comprehensive income
For the year ended 30 September 2021
2021 2020
GBP'000 GBP'000
------------------------------------------ ---------- ----------
Loss for the year (1,136) (20)
Currency translation differences (157) (38)
Other comprehensive loss for the
year (157) (38)
Total comprehensive loss for the
year (1,293) (58)
------------------------------------------- ---------- ----------
Total comprehensive loss for the
year is attributable to:
Owners of Aukett Swanke Group
Plc (1,280) (33)
Non-controlling interests (13) (25)
(1,293) (58)
------------------------------------------ ---------- ----------
Consolidated statement of financial position
At 30 September 2021
Note 2021 2020
GBP'000 GBP'000
-------------------------------- ------ --------- ---------
Non current assets
Goodwill 7 2,370 2,392
Other intangible assets 8 324 653
Property, plant and equipment 155 272
Right-of-use assets 2,546 2,929
Investment in associate 9 587 927
Investments in joint ventures 10 209 317
Deferred tax 241 214
-------------------------------- ------ --------- ---------
Total non current assets 6,432 7,704
Current assets
Trade and other receivables 3,975 3,527
Contract assets 982 628
Cash at bank and in hand 515 992
-------------------------------- ------ --------- ---------
Total current assets 5,472 5,147
Total assets 11,904 12,851
Current liabilities
Trade and other payables (3,747) (3,333)
Contract liabilities (829) (606)
Borrowings (83) (155)
Lease liabilities (539) (539)
Total current liabilities (5,198) (4,633)
Non current liabilities
Borrowings (417) -
Lease liabilities (2,350) (2,805)
Deferred tax (40) (47)
Provisions (832) (992)
-------------------------------- ------ --------- ---------
Total non current liabilities (3,639) (3,844)
Total liabilities (8,837) (8,477)
Net assets 3,067 4,374
-------------------------------- ------ --------- ---------
Capital and reserves
Share capital 11 1,652 1,652
Merger reserve 1,176 1,176
Foreign currency translation
reserve (173) (16)
Retained earnings (1,082) 41
Other distributable reserve 1,494 1,494
-------------------------------- ------ --------- ---------
Total equity attributable to
equity holders of the Company 3,067 4,347
-------------------------------- ------ --------- ---------
Non-controlling interests - 27
-------------------------------- ------ --------- ---------
Total equity 3,067 4,374
-------------------------------- ------ --------- ---------
Consolidated statement of cash flows
For the year ended 30 September 2021
Note 2021 2020
GBP'000 GBP'000
----------------------------------------- ------ ---------- ----------
Cash flows from operating activities
Cash (expended by) / generated
from operations 5 (896) 151
Income taxes received 262 218
----------------------------------------- ------ ---------- ----------
Net cash (outflow)/inflow from
operating activities (634) 369
Cash flows from investing activities
Purchase of property, plant and
equipment (33) (245)
Sale of property, plant and equipment 16 16
Purchase of investments (123) -
Dividends received from associates
& joint ventures 528 211
----------------------------------------- ------ ---------- ----------
Net cash received in / (expended
on) investing activities 388 (18)
Net cash (outflow)/inflow before
financing activities (246) 351
Cash flows from financing activities
Principal paid on lease liabilities (455) (211)
Interest paid on lease liabilities (91) (103)
Proceeds from bank loans 500 -
Repayment of bank loans (155) (154)
Interest paid (3) (9)
Net cash outflow from financing
activities (204) (477)
Net change in cash and cash equivalents (450) (126)
Cash and cash equivalents at start
of year 992 1,145
Currency translation differences (27) (27)
Cash and cash equivalents at end
of year 515 992
----------------------------------------- ------ ---------- ----------
Cash and cash equivalents are comprised
of:
Cash at bank and in hand 515 992
Cash and cash equivalents at end
of year 515 992
------------------------------------------ ---- ----
Consolidated statement of changes in equity
For the year ended 30 September 2021
Share Foreign Retained Other Merger Total Non-controlling Total
capital currency earnings distributable reserve interests equity
translation reserve
reserve GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------- ------------ --------- -------------- --------- --------- ---------------- ---------
At 1 October
2019 1,652 22 36 1,494 1,176 4,380 133 4,513
Profit/(loss)
for the year - - 5 - - 5 (25) (20)
Acquisition of
minority
interest - - - - - - (81) (81)
Other
comprehensive
income - (38) - - - (38) - (38)
--------------- --------- ------------ --------- -------------- --------- --------- ---------------- ---------
Total
comprehensive
income - (38) 5 - - (33) (106) (139)
At 30
September
2020 1,652 (16) 41 1,494 1,176 4,347 27 4,374
Loss for the
year - - (1,123) - - (1,123) (13) (1,136)
Acquisition of
minority
interest - - - - - - (14) (14)
Other
comprehensive
income - (157) - - - (157) - (157)
--------------- --------- ------------ --------- -------------- --------- --------- ---------------- ---------
Total
comprehensive
income - (157) (1,123) - - (1,280) (27) (1,307)
At 30
September
2021 1,652 (173) (1,082) 1,494 1,176 3,067 - 3,067
--------------- --------- ------------ --------- -------------- --------- --------- ---------------- ---------
The other distributable reserve was created in September 2007
during a court and shareholder approved process to reduce the
capital of the Company.
The merger reserve was created through a business combination in
December 2013 representing the issue of 19,594,959 new ordinary
shares at a price of 7.00 pence per share.
Notes to the audited final results
1 Basis of preparation
The financial statements for the Group and parent have been
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006.
Going concern
During the year the Group repaid the final GBP155k ($200k)
balance of the USD Dollar loan.
The Group currently meets its day to day working capital
requirements through its cash balances. It maintains an overdraft
facility for additional financial flexibility and foreign currency
hedging purposes.
In May 2021 the Group also secured additional funding by way of
GBP500k from the Coronavirus Business Interruption Loan Scheme
("CBILS"), which is in addition to the overdraft facility. The
arrangement fees for this loan and the first year of interest are
paid for by the UK Government and the funds will mainly be used
instead of the current bank overdraft facility as and when it is
necessary. The loan has a duration of three years with interest at
4.05% over the Coutts base rate (currently 0.75%) in years two and
three. We expect to repay the CBILS loan before the expiry of the
term.
The overdraft facility is renewed annually and was renewed for a
further 12 months in November 2021, with a review in May 2022.
The facility was initially renewed at GBP500k (unchanged from
the prior year). However, as in prior years, the facility includes
a net gearing covenant which assesses the ratio of financial
indebtedness (cash at bank, less overdraft balances, loans and
finance lease liabilities, excluding the UK office lease
capitalised on adoption of IFRS16) to tangible net worth (net
assets less goodwill and other intangible assets). This covenant is
measured at each month end. The reduction in tangible net worth
following the loss in the year means that the Group is unable to
fully utilise the overdraft and CBILS loan at the end of each month
without breaching the covenant.
In February 2022 the Group made a request to Coutts & Co,
which was accepted, to waiver the net gearing covenant for the
February, March and April 2022 month ends. The Group similarly
agreed to temporarily reduce the overdraft facility to GBP250k
until the end of May 2022. This provides the Group greater freedom
in the short term to utilise the GBP500k CBILS loan and reduced
GBP250k overdraft. The Group will then attend the scheduled 6
monthly review with Coutts & Co in May 2022 to discuss the
Groups' financing needs whilst reviewing the preliminary half year
management accounts and 12 month cashflow forecast.
The processes the directors have undertaken, and the reasons for
the conclusions they have reached, regarding the applicability of a
going concern basis are explained below. In undertaking their
assessment the directors have followed the guidance issued in March
2020 by the Financial Reporting Council, "FRC guidance for
companies and auditors during the COVID-19 crisis".
Forecasts for the Group have been prepared on a monthly basis
through to the end of March 2023, which comprise detailed income
statements, statements of financial position and cash flow
statements for each of the Group's operations, as well as an
assessment of covenant tests.
As the COVID-19 pandemic developed through 2020 and into 2021 it
continued to affect all of the territories in which the Group
operates to varying extents and other countries in which the Group
has clients and projects. Having moved to remote working without
any significant disruption in the prior financial year, in the year
to September 2021, the Group adapted flexibly on an
office-by-office basis in accordance with local government advice.
All of the offices re-opened with varying levels occupancy as staff
continued to operate on a mix of office, project site and home
based working.
As economic uncertainty surrounding the pandemic continued, the
Groups' operational management took measures including encouraging
unpaid leave and part time working in the UAE operations for staff
not fully utilised, furloughing UK permanent staff; flexing the
number of temporary or freelance staff based on project workload
and a limited number of technical and admin staff redundancies.
These provided management with a range of tools implemented at
short notice and with immediate effect.
The Group continued to remove non-essential expenditure.
Deferred operational cash flows from the prior financial year began
to unwind through the year to September 2021, and as a result the
Group felt it was appropriate to drawdown the GBP500k CBILS loan to
offset the impact of these catch-up payments. In the UK the most
significant of these deferrals had been 1 quarter of VAT deferred
in the prior financial year in accordance with UK government
support. In the year to September 2021 the UK operation began
repaying this in monthly instalments. The last instalment has since
been repaid on time in January 2022.
The Groups' principal banker is Coutts & Co with whom the
Group has an excellent long-term relationship extending through
previous business cycles. Coutts & Co has again renewed the
Group's overdraft facility as described above, and have temporarily
waived the gearing covenant for 3 months. We have no reason not to
expect that the overdraft facility would not be renewed again in
November 2022.
Due to the uncertainty in forecasting profits during the
COVID-19 pandemic Coutts & Co waived the debt servicing
covenant from the facility agreement for the year ending 30
September 2021. This has been reintroduced in the November 2021
renewal and is due for assessment following the year ending 30
September 2022 (assessed on completion of the annual audit,
anticipated in January 2023).
The other covenant applicable relates to maintaining a level of
UK eligible debtors.
The Group has managed cash flow within its facilities so far.
During the course of the next 12 month going concern review period,
our forecast assumes that no additional external financing is
received when measuring the Groups ability to continue to operate
and that the CBILS loan instalments commence their 24 monthly
repayments from June 2022.
The Groups' assessment of going concern is therefore focussed on
its ability to operate within the GBP250k overdraft limit to the
end of May 2022, then assuming a return to the GBP500k overdraft
limit thereafter.
The Group forecasts on the basis of earnings and billings from
i) secure contractual work, ii) known potential work which is
deemed to have a greater than 50% chance of being undertaken and is
predominantly follow on stages of currently instructed work, on
which a factoring is applied; and iii) new work from known sources
such as competitive tenders and submitted fee proposals, or new
work to be achieved based on historical experience of market
activity and timescales in which work can be converted from an
enquiry to an active project which varies by territory and the
service each office in the Group provides.
The risk of short term recessions and delays in clients making
financial investment decisions due to the COVID-19 pandemic appear
to have now largely abated. Across the Groups' business units the
forecasts assessed by the Directors therefore assume the businesses
continue to operate much as they have done in recent months and
without the reintroduction of any new COVID-19 government support
mechanisms.
However we note that the recent conflict in the Ukraine, rising
energy prices and inflation globally will have macro-economic
implications and could be a trigger for recession in the short to
medium term, and will have significant impact on clients decision
making, albeit as yet we have not experienced any material
indication to this effect.
The forecasts apply sensitivities based on levels of earnings
reductions sustained over the next 12 months, making controllable
adjustments to the cost base through structural adjustments to
staffing numbers and deferring and removing non-essential costs. We
also assess overall cash levels across the Group and how those can
be best deployed to ensure each of the entities in the Group has
sufficient cash to operate.
The above cost planning exercise and focus on near term secure
income and contract extensions has resulted in the Group
reforecasting based on cash inflows from turnover less sub
consultant costs reduced by an average of 11.7% against management
accounts over the next 12 months. This reforecasting ensures that
where the business is sensitive to expected declines in cash
inflows from work, management are able to plan ahead for this and
manage cost outflows effectively.
In the event that the level of turnover falls by more than the
11.7% indicated above, management have identified further cash flow
initiatives around the Group which could be utilised to generate
additional free cash to allow the company to continue to trade.
This includes options to sublet, administrative staff and
discretionary overhead cost savings and freeing up liquidity in our
German associate and joint venture.
In the shorter term, management reviewed a number of scenarios,
including a scenario modelling a pause on short term expected work
amounting to 14.2% of income for 3 months, then followed by the
same reductions in workload from the 12 month model (averaging out
to over 14.1% across 12 months). In this case the Group would
consistently fail the net gearing covenant and the eligible debtor
covenant and could exceed the limits of the assumed GBP500k
overdraft. This would necessitate the Group moving a level of cash
from the investments in joint ventures and associates into the
Group, improved debtor collection rate (which is reliant on client
processes and therefore not wholly within the Group's control) than
we normally forecast to remain within the limits of our facilities,
and then might require additional funding.
The Directors note that the UK and other governments in the
territories in which we operate, have been supportive in their
efforts to enable construction and infrastructure projects to
continue throughout the pandemic. With vaccine roll outs largely
completed and booster programs ongoing, we see the industry now
well positioned to reduce the risks of impact from further COVID-19
spikes.
With the impact the loss for the year has had on net assets and
working capital, the Directors are considering a range of options
regarding our strategy for the Group structure and geographic
footprint to stabilise and improve the Groups' underlying financial
position. With this in mind, the Board, after applying the
processes and making the enquiries described above, has a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
However there remains a risk that if the COVID-19 environment
worsened or the Ukraine conflict lead to macro-economic
uncertainty, the Group may find itself as the result of unexpected
levels of delays on project work beyond its control requiring
additional external financing.
For this reason, the Board considers it appropriate to prepare
the financial statements on a going concern basis, however given
the lack of certainty involved in preparing these cash flow
forecasts, there is a material uncertainty which may cast
significant doubt on the Group's and the Parent Company's ability
to continue as a going concern and therefore their ability to
realise their assets and discharge their liabilities in the normal
course of business.
The financial statements do not include the adjustments that
would result if the Group or the Parent Company was unable to
continue as a going concern.
2 Operating segments
The Group comprises three separately reportable geographical
segments ('hubs'), together with a group costs segment.
Geographical segments are based on the location of the operation
undertaking each project.
The Group's operating segments consist of the United Kingdom,
the Middle East and Continental Europe. Turkey is included within
Continental Europe together with Germany and the Czech
Republic.
Income statement segment information
Segment revenue 2021 2020
GBP'000 GBP'000
-------------------- --------- ---------
United Kingdom 8,871 7,106
Middle East 2,822 4,823
Continental Europe 321 237
Revenue 12,014 12,166
--------------------- --------- ---------
Segment revenue less sub consultant 2021 2020
costs GBP'000 GBP'000
------------------------------------- --------- ---------
United Kingdom 6,063 6,990
Middle East 2,517 4,122
Continental Europe 242 224
Revenue less sub consultant
costs 8,822 11,336
-------------------------------------- --------- ---------
2021 Before goodwill Fair value Sub-total Reallocation Total
Segment result and acquisition gains on GBP'000 of group GBP'000
adjustments deferred management
GBP'000 consideration charges
and acquisition GBP'000
settlement
GBP'000
----------------- ----------------- ----------------- ---------- ------------- ---------
United Kingdom (848) - (848) 540 (308)
Middle East (936) - (936) 398 (538)
Continental
Europe 149 - 149 181 330
Group costs 104 - 104 (1,119) (1,015)
----------------- ----------------- ----------------- ---------- ------------- ---------
Loss before
tax (1,531) - (1,531) - (1,531)
----------------- ----------------- ----------------- ---------- ------------- ---------
2020 Before goodwill Fair value Sub-total Reallocation Total
Segment result and acquisition gains on GBP'000 of group GBP'000
adjustments deferred management
GBP'000 consideration charges
and acquisition GBP'000
settlement
GBP'000
----------------- ----------------- ----------------- ---------- ------------- ---------
United Kingdom (282) - (282) 496 214
Middle East (472) - (472) 449 (23)
Continental
Europe 511 - 511 146 657
Group costs 197 - 197 (1,091) (894)
----------------- ----------------- ----------------- ---------- ------------- ---------
Profit before
tax (46) - (46) - (46)
----------------- ----------------- ----------------- ---------- ------------- ---------
3 Earnings per share
The calculations of basic and diluted earnings per share are
based on the following data:
Earnings 2021 2020
GBP'000 GBP'000
---------------------------- --------- ---------
Continuing operations (1,123) 5
(Loss)/profit for the year (1,123) 5
---------------------------- --------- ---------
Number of shares 2021 2020
Number Number
-------------------------------------- ------------ ------------
Weighted average of ordinary shares
in issue 165,213,652 165,213,652
Effect of dilutive options - -
-------------------------------------- ------------ ------------
Diluted weighted average of ordinary
shares in issue 165,213,652 165,213,652
-------------------------------------- ------------ ------------
4 Tax charge
2021 2020
GBP'000 GBP'000
--------------------------------------- --------- ---------
Current tax - -
Adjustment in respect of previous (361) -
years
--------------------------------------- --------- ---------
Total current tax (361) -
Origination and reversal of temporary
differences (126) (26)
Adjustment in respect of previous 92 -
years
Changes in tax rates - -
--------------------------------------- --------- ---------
Total deferred tax (34) (26)
Total tax credit (395) (26)
---------------------------------------- --------- ---------
The standard rate of corporation tax in the United Kingdom is
applicable for the financial year was 19% (2020: 19%)
The tax assessed for the year differs from the United Kingdom
standard rate as explained below:
2021 2020
GBP'000 GBP'000
---------------------------------------------- --------- ---------
Loss before tax (1,531) (46)
Loss before tax multiplied by the standard
rate of corporation tax in the United
Kingdom of 19% (2020: 19%) (291) (9)
Effects of:
Other non tax deductible expenses/(credits) 60 (12)
Associate and joint ventures reported
net of tax (32) (84)
Tax losses not recognised 105 84
Current tax adjustment in respect of
previous years (361) -
Deferred tax adjustment in respect
of previous years 92 7
Income not taxable 32 (12)
----------------------------------------------- --------- ---------
Total tax credit (395) (26)
----------------------------------------------- --------- ---------
5 Cash generated from operations
Group 2021 2020
GBP'000 GBP'000
----------------------------------------- --------- ---------
Loss before tax - continuing operations (1,531) (46)
Finance costs 94 112
Share of results of associate and
joint ventures (166) (442)
Intangible amortisation 59 79
Intangible impairment 249 -
Depreciation 129 74
Amortisation of right-of-use assets 383 340
Profit on disposal of property, (2) -
plant & equipment
(Increase)/decrease in trade and
other receivables (843) 989
(Decrease) / increase in trade and
other payables 892 (794)
Change in provisions (160) (79)
Unrealised foreign exchange differences - (82)
Net cash (expended by) / generated
from operations (896) 151
------------------------------------------ --------- ---------
6 Analysis of net funds
Group 2021 2020
GBP'000 GBP'000
--------------------------- --------- ---------
Cash at bank and in hand 515 992
Cash and cash equivalents 515 992
Secured bank loan (500) (155)
Net funds 15 837
---------------------------- --------- ---------
7 Goodwill
Group GBP'000
---------------------- ---------
Cost
At 1 October 2019 2,683
Addition 19
Disposal (271)
Exchange differences (39)
At 30 September 2020 2,392
Addition 9
Disposal -
Exchange differences (31)
------------------------ ---------
At 30 September 2021 2,370
------------------------ ---------
Impairment
At 1 October 2019 271
Disposal (271)
Exchange differences -
At 30 September 2020 -
Disposal -
Exchange differences -
---------------------- ---------
At 30 September 2021 -
---------------------- ---------
Net book value
At 30 September 2021 2,370
At 30 September 2020 2,392
At 30 September 2019 2,412
------------------------ ---------
The disposal recorded in the prior year related to Goodwill on a
Russian subsidiary which was sold during the prior year. As the
Goodwill allocated to that entity had previously been fully
impaired no gain or loss was recognised on disposal of the
goodwill.
The addition recorded in the year related to Goodwill on the
acquisition of an additional 5% shareholding in John R Harris &
Partners Limited increasing the Group's shareholding from 95% to
100%.
The net book value of goodwill is allocated to the Group's cash
generating units ("CGU") as follows:
United Middle
Kingdom Turkey East Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- -------- -------- --------
At 30 September
2019 1,740 37 635 2,412
Addition - - 19 19
Exchange differences - (11) (28) (39)
----------------------- --------- -------- -------- --------
At 30 September
2020 1,740 26 626 2,392
Addition - - 9 9
Exchange differences - (4) (27) (31)
----------------------- --------- -------- -------- --------
At 30 September
2021 1,740 22 608 2,370
----------------------- --------- -------- -------- --------
An annual impairment test is performed over the cash generating
units ('CGUs') of the Group where goodwill and intangible assets
are allocable to those CGUs.
JRHP and SCL are identifiable as separate CGUs for the purposes
of performing an impairment review under IAS 36. The goodwill
relating to the Middle East CGU for reference purposes in the
disclosure table is wholly attributable to JRHP. Intangible assets
relating to both JRHP and SCL are included in the other intangible
asset tables in note 8.
The recoverable amount of a cash generating unit is determined
based on value in use calculations. These calculations use pre-tax
cash flow projections based on financial budgets and forecasts
covering a five year period. Cash flows beyond the five year period
are extrapolated using long term average growth rates.
The carrying value of goodwill allocated to the United Kingdom
and the Middle East is material. The total carrying value of
goodwill allocated to Turkey is not material.
The key assumptions in the discounted cash flow projections for
the United Kingdom operation are:
-- the future level of revenue, set at a compound growth rate of
8.31% over the next five years - which is based on knowledge of
past property development cycles and external forecasts such as the
construction forecasts published by Experian. Historically the
property development market has both declined more swiftly and
recovered more sharply than the economy as a whole. Management also
considers the level of future secured revenues at the point of
drawing up these calculations. Projections consider a return to
economic health in the year to September 2022, with assumption of a
return to relative economic normality following the COVID-19
pandemic. The compound growth rate is higher than prior years
modelling assumptions as it bases the starting point on the lower
earnings in the year 20/21 which were significantly lower than
prior years, and assumes an annualised inflation of earnings (and
costs) of a higher CPI assumption of 4.6%. Compound growth used in
the model compared to the 19/20 year revenue is 4.37%.
-- long term growth rate - which has been assumed to be 2.0%
(2020: 2.0%) per annum based on the average historical growth in
gross domestic product in the United Kingdom over the past fifty
years; and
-- the discount rate - which is the UK segment's pre-tax
weighted average cost of capital and has been assessed at 11.34%
(2020: 12.66%).
Based on the discounted cash flow projections, the recoverable
amount of the UK CGU is estimated to exceed carrying values by
GBP7,530k (546%). An 8% fall in all future forecast revenues
(applied as a smooth reduction to the compound growth rate noted
above) without a corresponding reduction in costs in the UK CGU, or
an increase in the discount rate to over 50%, would result in
carrying amounts exceeding their recoverable amount. A decrease in
the effective compound growth rate of revenue to 6.48% instead of
the 8.31% noted above, without a corresponding reduction in costs
in the UK CGU, would result in carrying amounts exceeding their
recoverable amount. Management believes that the carrying value of
goodwill remains recoverable despite this sensitivity given the
conservative nature of the underlying forecasts prepared.
The key assumptions in the discounted cash flow projections for
the Middle East operation are:
-- the future level of revenue, set at a compound growth rate of
4.3% (for JRHP) over the next five years - which is based on
knowledge of the current and expected level of construction
activity in the Middle East. For JRHP we assume earnings in the
year to September 2022 of AED 8.9m with earnings rising slowly to
AED 9.9m from the year 2025/26.
-- working capital requirements - which is based on management's
best in a geography where it is common to have high levels of trade
receivables;
-- long term growth rate - which has been assumed to be 3.15%
per annum based on the average historical growth in gross domestic
product in the Middle East over the past forty years; and
-- the discount rate - which is the Middle East segment's
pre-tax weighted average cost of capital, has been assessed at
10.1% (2020: 13.7%).
Based on the discounted cash flow projections, the recoverable
amount of JRHP within the Middle East CGU is estimated to exceed
carrying values by at least GBP2.43m (252%). A decrease in the
effective compound growth rate of revenue to 2.2% instead of the
4.3% noted above, without a corresponding reduction in costs in
JRHP, would result in carrying amounts exceeding their recoverable
amount. An increase in the discount rate to 29.2% would result in
carrying amounts exceeding their recoverable amount.
The carrying value of the Middle East CGU Goodwill is entirely
attributable to JRHP, whereas Other Intangible Assets (note 8)
includes both JRHP and SCL. As the operations of SCL are in the
process of being transferred across to JRHP, Management consider it
appropriate to impair the remaining balance of Other Intangible
Assets associated with SCL and this is commented on further in note
8.
Management believe that the carrying value of goodwill remains
recoverable for JRHP despite this sensitivity given the
conservative nature of the underlying forecasts prepared.
8 Other intangible assets
Group Trade Customer Order Trade
name relationships book licence Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- --------------- -------- --------- --------
Cost
At 30 September 2019 701 404 - 80 1,185
Disposal - - - - -
Exchange differences (29) (31) - (4) (64)
---------------------- -------- --------------- -------- --------- --------
At 30 September 2020 672 373 - 76 1,121
Disposal - - - - -
Exchange differences (17) (19) - (3) (39)
---------------------- -------- --------------- -------- --------- --------
At 30 September 2021 655 354 - 73 1,082
---------------------- -------- --------------- -------- --------- --------
Amortisation
At 30 September 2019 152 237 - 34 423
Disposal - - - - -
Charge 26 45 - 8 79
Exchange differences (9) (23) - (2) (34)
---------------------- -------- --------------- -------- --------- --------
At 30 September 2020 169 259 - 40 468
Disposal - - - - -
Impairment 236 13 - - 249
Charge 25 26 - 8 59
Exchange differences (3) (13) - (2) (18)
---------------------- -------- --------------- -------- --------- --------
At 30 September 2021 427 285 - 46 758
---------------------- -------- --------------- -------- --------- --------
Net book value
At 30 September 2021 228 69 - 27 324
At 30 September 2020 503 114 - 36 653
At 30 September 2019 549 167 - 46 762
---------------------- -------- --------------- -------- --------- --------
Amortisation is included in other operating expenses in the
consolidated income statement.
Impairment
Following the Group's decision to restructure the UAE business,
Shankland Cox Limited ongoing contracts have been or are in the
process of being reassigned into John R Harris & Partners
Limited, with new work being contracted by John R Harris &
Partners Limited, and the remaining licences held by Shankland Cox
Limited being allowed to expire. Management therefore took the view
that remaining balance of intangible assets totalling GBP249k
should be impaired as at 30(th) September 2021. This impairment
charge is presented separately to the amortisation charge for the
year, on the face of the Consolidated Income Statement
Trade name
The trade name was acquired as part of the acquisition of Swanke
Hayden Connell Europe Limited ("SHC") in December 2013 and also on
the acquisition of Shankland Cox Limited ("SCL") in February 2016.
The SHC trade name reflects the inclusion of the Swanke name in the
enlarged Group. Trade names are amortised on a straight line basis
over a 25 year period from the acquisition date and have remaining
amortisation periods of 18 and 20 years, respectively.
Customer relationships
The customer relationships were acquired as part of the
acquisition of SHC in December 2013, on the acquisition of John R
Harris & Partners Limited ("JRHP") in June 2015 and on the
acquisition of SCL in February 2016. This represents the value
attributed to clients who provided repeat business to the Group on
the strength of these relationships. Customer relationships are
amortised on a straight line basis over a 7-10 year period from the
acquisition dates. The customer relationships acquired in December
2013 have a remaining amortisation period of 3 months. The customer
relationships acquired in June 2015 and February 2016 both have
remaining amortisation periods of 5 years.
Trade licence
The trade licence was acquired as part of the acquisition of
JRHP in June 2015. This represents the value of licences granted to
JRHP for architectural activities in the regions in which it
operates. The licence is amortised on a straight line basis over a
10 year period from the acquisition date and has a remaining
amortisation period of 5 years.
9 Investment in associate
The Group owns 25% of Aukett + Heese GmbH which is based in
Berlin, Germany. The table below provides summarised financial
information for Aukett + Heese GmbH as it is material to the Group.
The information disclosed reflects Aukett + Heese GmbH's relevant
financial statements and not the Group's share of those amounts
Summarised balance sheet 2021 2020
GBP'000 GBP'000
-------------------------- --------- ---------
Assets
Non current assets 289 280
Current assets 4,693 6,755
--------------------------- --------- ---------
Total assets 4,982 7,035
Liabilities
Current liabilities (2,635) (3,329)
Total liabilities (2,635) (3,329)
Net assets 2,347 3,706
--------------------------- --------- ---------
Reconciliation to carrying amounts:
2021 2020
GBP'000 GBP'000
--------------------------------- --------- ---------
Opening net assets at 1 October 3,706 2,842
Profit for the period 470 1,201
Other comprehensive income (185) 102
Dividends paid (1,644) (439)
---------------------------------- --------- ---------
Closing net assets 2,347 3,706
Group's share in % 25% 25%
Group's share in GBP'000 587 927
---------------------------------- --------- ---------
Carrying amount 587 927
---------------------------------- --------- ---------
Summarised statement of comprehensive 2021 2020
income GBP'000 GBP'000
--------------------------------------- --------- ---------
Revenue 12,243 13,208
Sub consultant costs (3,492) (3,764)
---------------------------------------- --------- ---------
Revenue less sub consultant costs 8,751 9,444
Operating costs (8,078) (7,724)
---------------------------------------- --------- ---------
Profit before tax 673 1,720
Taxation (203) (519)
---------------------------------------- --------- ---------
Profit for the period from continuing
operations 470 1,201
Other comprehensive income (185) 102
---------------------------------------- --------- ---------
Total comprehensive income 285 1,303
---------------------------------------- --------- ---------
The Group received dividends of GBP393,000 after deduction of
German withholding taxes (2020: GBP105,000) from Aukett + Heese
GmbH. The principal risks and uncertainties associated with Aukett
+ Heese GmbH are the same as those detailed within the Group's
Strategic Report.
10 Investments in joint ventures
Frankfurt
The Group owns 50% of Aukett + Heese Frankfurt GmbH which is
based in Frankfurt, Germany.
GBP'000
---------------------- --------
At 30 September 2019 277
Share of profits 117
Dividends paid (110)
Exchange differences 8
------------------------ --------
At 30 September 2020 292
Share of profits 65
Dividends paid (142)
Exchange differences (14)
------------------------ --------
At 30 September 2021 201
------------------------ --------
The Group received dividends of GBP135,000 after deduction of
German withholding taxes (2020: GBP106,000) from Aukett + Heese
Frankfurt GmbH. The following amounts represent the Group's 50%
share of the assets and liabilities, and revenue and expenses of
Aukett + Heese Frankfurt GmbH.
2021 2020
GBP'000 GBP'000
--------------------- --------- ---------
Assets
Non current assets 12 18
Current assets 288 500
---------------------- --------- ---------
Total assets 300 518
Liabilities
Current liabilities (99) (226)
Total liabilities (99) (226)
Net assets 201 292
---------------------- --------- ---------
2021 2020
GBP'000 GBP'000
----------------------------------- --------- ---------
Revenue 919 1,233
Sub consultant costs (267) (451)
------------------------------------ --------- ---------
Revenue less sub consultant costs 652 782
Operating costs (541) (610)
------------------------------------ --------- ---------
Profit before tax 111 172
Taxation (46) (55)
------------------------------------ --------- ---------
Profit after tax 65 117
------------------------------------ --------- ---------
The principal risks and uncertainties associated with Aukett +
Heese Frankfurt GmbH are the same as those detailed within the
Group's Strategic Report.
Prague
The Group owns 50% of Aukett sro which is based in Prague, Czech
Republic.
GBP'000
---------------------- --------
At 30 September 2019 -
Share of profits 25
Exchange differences -
---------------------- --------
At 30 September 2020 25
Share of losses (16)
Exchange differences (1)
At 30 September 2021 8
------------------------ --------
The following amounts represent the Group's 50% share of the
assets and liabilities, and revenue and expenses of Aukett sro.
2021 2020
GBP'000 GBP'000
--------------------- --------- ---------
Assets
Current assets 11 105
---------------------- --------- ---------
Total assets 11 105
Liabilities
Current liabilities (3) (80)
Total liabilities (3) (80)
Net assets 8 25
---------------------- --------- ---------
2021 2020
GBP'000 GBP'000
----------------------------- --------- ---------
Revenue 165 347
Sub consultant costs (78) (141)
------------------------------ --------- ---------
Revenue less sub consultant
costs 87 206
Operating costs (103) (172)
------------------------------ --------- ---------
(Loss) / profit before tax (16) 34
Taxation - (4)
(Loss) / profit after tax (16) 30
------------------------------ --------- ---------
In the prior year the carrying value of the investment in the
joint venture brought forward was limited to GBPnil as the company
had net liabilities at the start of the prior year. The prior year
share of profit was therefore reduced by GBP5k so that the carrying
value of the investment in joint venture matched the Groups' share
of the entities' net assets being GBP25k as at 30 September
2020.
The principal risks and uncertainties associated with Aukett sro
are the same as those detailed within the Group's Strategic
Report.
11 Share capital
Group and Company 2021 2020
GBP'000 GBP'000
------------------------------------------ --------- ---------
Allocated, called up and fully paid
165,213,652 (2020: 165,213,652) ordinary
shares of 1p each 1,652 1,652
------------------------------------------ --------- ---------
Number
---------------------- ------------
At 1 October 2019 165,213,652
No changes -
At 30 September 2020 165,213,652
No changes -
At 30 September 2021 165,213,652
---------------------- ------------
The Company's issued ordinary share capital comprises a single
class of ordinary share. Each share carries the right to one vote
at general meetings of the Company.
12 Status of final audited results
This announcement of final audited results was approved by the
Board of Directors on 30 March 2022.
The financial information presented in this announcement has
been extracted from the Group's audited statutory accounts for the
year ended 30 September 2021 which will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting.
The auditor's report on these accounts was unqualified, and did
not contain a statement under section 498 of the Companies Act
2006. The auditor's report for the year ended 30 September 2021 did
not draw attention to any matters by way of emphasis, but it did
include reference to a material uncertainty related to going
concern, drawing attention to the fact that the Group may find
itself, as a result of unexpected levels of delays on project work
beyond its control, requiring additional financing. The opinion was
not modified in respect of this matter.
Statutory accounts for the year ended 30 September 2020 have
been delivered to the registrar of companies and the auditors'
report on these accounts was unqualified, and did not contain a
statement under section 498 of the Companies Act 2006. The
auditor's report for the year ended 30 September 2021 did not draw
attention to any matters by way of emphasis, but it did include
reference to a material uncertainty related to going concern,
drawing attention to the fact that the Group may find itself, as a
result of unexpected levels of delays on project work beyond its
control, requiring additional financing. The opinion was not
modified in respect of this matter.
The financial information presented in this announcement of
final audited results does not constitute the Group's statutory
accounts for the year ended 30 September 2021.
13 Annual General Meeting
The Annual General Meeting will be held at 10.00am on Thursday
31 March 2022 at 10 Bonhill Street, London, EC2A 4PE.
14 Annual report and accounts
Copies of the 2021 audited accounts will be available today on
the Company's website ( www.aukettswankeplc.com ) for the purposes
of AIM rule 26 and will be posted to shareholders who have elected
to receive a printed version in due course.
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END
FR EFLBXLXLFBBZ
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March 31, 2022 02:01 ET (06:01 GMT)
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