TIDMBILB
RNS Number : 4038X
Bilby PLC
19 December 2019
19 December 2019
Bilby plc
("Bilby" or the "Company")
Interim Results
Bilby Plc (AIM:BILB), a leading gas heating, electrical and
building services provider, announces its interim results for the
six months ended 30 September 2019.
Financial Overview
Unaudited Unaudited Audited 12
6 months 6 months months to
to to 31 March
30 September 30 September 2019
2019 2018 GBP 000
Group results GBP 000 GBP 000
-------------------------------------- -------------- -------------- -----------
Revenue(1) 29,778 36,359 66,528
Gross profit(1) 7,819 8,261 9,483
Underlying EBITDA(2) 2,062 2,678 3,164
Underlying operating profit 1,917 2,546 2,789
Underlying profit before taxation(3) 1,702 2,428 2,501
Profit/(loss) after taxation 542 1,133 (8,596)
Basis EPS 1.34 2.81 (21.29)
Basic EPS adjusted(4) 3.78 5.40 6.38
Dividend per share 0.00 2.00 2.50
Net Debt(5) 11,068 7,891 10,858
-------------------------------------- -------------- -------------- -----------
1. Underlying Revenue and Gross profit for the 12 months ended
31 March 2019 were GBP69.588 million and GBP15.131 million
respectively. There are no adjustments to Revenue or Gross Profit
for the 6 months ended 30 September 2018 or 30 September 2019.
2. Underlying EBITDA is earnings before interest, tax,
depreciation and non-underlying items as set out in note 3.
3. Underlying profit before taxation is stated after interest
and before charging non-underlying items.
4. Basic EPS adjusted is the profit before deducting
non-underlying after tax divided by the weighted average number of
ordinary shares.
5. Net debt comprises overdraft, term loans, mortgage and other
loans less cash
Summary
-- Robust performance from the underlying Group delivers an
underlying EBITDA of GBP2.1 million (2018: GBP2.7 million) in a
business that is historically weighted to the second-half
-- The Group resolved its legacy issues and completed the restructuring of P&R
-- Strong cash generation of GBP2.4m from underlying operations
but impacted by GBP1.8m relating to P&R losses from year ending
March 2019 and related restructuring, resulting in net cash
generation from operating activities of GBP0.629m
-- Appointment of David Bullen as Chief Executive Officer who
accelerated the operational and financial review of the business
which led to several conclusive actions:
o The closure of P&R's gas division
o P&R's profitable building services contracts transferred
to management responsibility of Purdy
o Integration and alignment of R Dunham into Group
o Standardisation and centralisation of operating systems,
policies and controls to improve transparency, efficiency and
profitability within the Group, remains ongoing
o Appointment of an interim Group HR Director - a permanent
position for this role will be confirmed in due course
-- Significant operational progress securing new large scale
contracts with no major contracts up for renewal in the financial
year
o Purdy won a contract with Enfield Council with a value of
GBP1.2 million
o DCB secured an extended contract with Port of Dover for GBP1.5
million
o DCB secured a contract with Newlon Housing for GBP1.2
million
o Spokemead secured additional work with its largest customer,
Southwark Council
Post period end & outlook
o Fundraise of GBP2 million to provide additional resources to
improve the working capital position
o Conclusion and closure of the resolution proceedings relating
to the two severely loss-making contracts with Carillion Amey and
East Kent Housing with nil settlement to all parties
o Strengthening of Board with the appointment of David Guest as
Non-Executive Director and Chair of the Audit Committee
o Board remain confident of at least maintaining underlying
revenues of GBP59 million with an underlying EBITDA of not less
than GBP4.5 million for the full year
Commenting on the results, David Bullen, Chief Executive of
Bilby plc said:
"This has been a period of restructuring for the Group in which
we finally resolved the legacy issues relating to P&R and
continued the operational and financial review that collectively
has achieved a positive reset for the Group. We have taken the
positive steps to improve our levels of transparency and
efficiency, as well as engaging staff at all levels to shape the
future of the organisation. This will ensure that each subsidiary
benefits from being part of a wider Group and will accelerate the
trajectory of our future growth path. I am confident that the
actions we have taken, and continue to undertake, will ensure that
Bilby is best placed to capitalise on opportunities moving
forward."
Enquiries
Bilby plc
Sangita Shah, Chairman +44 (0)20 7796 4133
David Bullen, Chief Executive Officer (via Hudson Sandler)
Canaccord Genuity Limited (Nominated Adviser
and Sole Broker) +44 (0)20 7523 8000
Corporate Broking:
Bobbie Hilliam
Andrew Potts
Georgina McCooke
Sales:
Jonathan Barr
Hudson Sandler (Financial PR) +44 (0)20 7796 4133
Charlie Jack
Bertie Berger
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
Chair's statement
The first half of 2019 ("the Period") saw significant conclusive
structural and reorganisational changes within the Group, in
addition to a much needed strengthening of the Board. These actions
were a necessity, and all arose from the vital need to fully
address the legacy issues resulting from one poorly managed
subsidiary and re-establish the Group on a robust platform for
future growth.
Following an extensive search process, I was delighted to
welcome David Bullen to the Group as Chief Executive in April 2019.
David joined Bilby from Boleyn International Ltd, a strategic
management consultancy he founded in 2016. He brings an impressive
track record in turnaround situations and creating shareholder
value as well as strong plc experience. On arrival, David
immediately accelerated the operational and financial review the
Board had implemented and will spearhead this until completion. His
appointment has already made a huge impact: the Group has
stabilised and we are now forging our strategy to return the
business to solid calibrated growth.
As previously announced, the Group faced several challenges that
had driven the poor financial outrun for the year ended 31 March
2019. These challenges were limited to one subsidiary, P&R. The
poor financial performance of this subsidiary was driven by
operational failings that resulted from governance failings at the
subsidiary. Decisive action was undertaken, including restructuring
P&R, which is now complete. Concurrently, under the aegis of
David Bullen, an intensive operational review across the Group was
instigated to ensure that the enormous challenges from a failing
subsidiary are mitigated and fully addressed proactively. This
operational and financial review of the business is ongoing and has
resulted in the implementation of an investment programme that will
ensure robust systems and governance across the Group.
Despite these challenges, the underlying health of the business
is robust, and we are pleased to deliver underlying Group EBITDA of
GBP2.1 million for the Period (2018: GBP2.7 million) in a business
that is historically stronger in the second-half. As a result of
this progress, in addition to securing new contracts and benefiting
from the centralised functions, Bilby is pleased to report that we
have visible revenues of GBP180.8 million to 2021 (2019: GBP162.3
million).
The net debt position was higher than in previous years as a
result of the material losses on the exit of contracts within the
gas division of P&R and the associated restructuring costs.
These amounted to GBP1.8 million during the Period and
significantly impacted the working capital of the Group.
Post Period end, in November 2019, the Group raised GBP2 million
from existing shareholders and certain Directors and senior
management to provide additional resources to improve the working
capital position. We continue to regularly engage with our banking
partners, HSBC, who remain supportive of the Board and the ongoing
operational and financial review.
In addition, post Period end, we were delighted to augment our
Board with the addition of a new Non-Executive Director, David
Guest. David is currently the senior audit partner at UHY Hacker
Young in Brighton and is Chair of the Audit Committee. We are
seeking to further enhance the non-executive board in the near
future.
Outlook
For the full year, the Board remains confident of at least
maintaining underlying revenues of GBP59 million with an underlying
EBITDA of not less than GBP4.5 million.
While the operational and financial review of the business is
ongoing, the Group has now conclusively resolved its legacy issues
relating to P&R and the underlying business remains solid. With
our bolstered management team, spearheaded by a CEO who is dogged
and impressive, I am confident Bilby can return to the rate of
growth of previous years.
Chief Executive's statement
During the Period, Group underlying revenue decreased 18% to
GBP29.8 million (2018: GBP36.4 million) with underlying EBITDA
decreasing by 23% to GBP2.1 million (2018: GBP2.7 million) and
adjusted earnings per share down to 3.78 pence (2018: 5.40 pence).
The decrease in the underlying EBITDA was primarily driven by the
negative impact P&R had on the Group and the discontinuation of
certain elements of that subsidiary.
Despite these challenges, the Group has performed commendably,
making significant operational progress securing new contracts and
completing substantial work during the Period.
Update on the operational and financial review
The Period saw the completion of the restructuring of the
P&R business that was the primary reason for the Group's
underperformance for the year ended 31 March 2019. Since my
arrival, I have focused on working with the Executive management
team and Board to listen, understand and identify the underlying
issues within the business and address them robustly with urgency.
We have implemented relevant systems and processes to ensure that
our effectiveness, our efficiencies and our offer are all of the
highest standards.
A key outcome of the review established the need for providing
consistency amongst all the subsidiaries, specifically on the
internal reporting and controls, aligning accounting and
performance procedures across the Group through the same
centralised operating systems. These systems include providing
vital end-to-end data on engineering time and identifying
opportunities for improvement that enables all employees to manage,
measure and meet the same high standards through the transparency
and accountability of performance; job by job, contract by
contract. The implementation of this programme is already showing
positive results and delivering efficiencies, with each subsidiary
benefitting as a result.
In parallel and additionally, this improved transparency and
accountability will facilitate the opportunity for the Group to
initiate and implement a Group-wide incentive programme to suitably
reward and recognise, on a personal level, the significance of the
value each of our employees contributes to the success of the
business.
As previously announced, as part of the P&R restructuring,
all profitable building services contracts were transferred to the
management responsibility of Purdy and its centralised systems and
are already benefitting from the consolidation and cohesion that
this has delivered. Importantly, the remaining building services
employees have both welcomed and embraced the change to align
itself with the rest of the Group, contributing to a strengthened
morale within the subsidiary.
People
Immediately following my arrival, the Board strengthened the
Group HR function by instilling an interim HR Director with an
expectation to fulfil this role on a permanent basis. In
conjunction, I have pro-actively sought to engage with employees at
all levels across the subsidiaries with other Members of the Board
and Senior Management, also having detailed consultations with our
stakeholders.
The review and continuing turnaround of the Group could not have
happened without the engaged involvement of all key stakeholders
and we are hugely appreciative of their feedback and dedication. As
part of this process, the Board is committed to ensuring employees
are receiving optimum personal and professional development and
training to maximise their potential. The Board is also committed
to ensuring all our employees have the opportunity to share the
success of the Group. It is vital they are all adequately rewarded
and recognised for their individual contributions to the best in
class service Bilby offers its companies. This will ensure our
profitable growth is sustainable.
Operational review of subsidiaries
Purdy
Purdy has continued the strong momentum it delivered in 2019 by
successfully securing new contracts and undertaking ongoing work
for existing customers. Purdy strengthened its relationship with
Hackney Council by conducting electrical works on some of its
housing stock, with anticipated revenue of GBP0.4 million. The
subsidiary also secured a contract with Enfield Council for
rewiring work and boiler installations with a total value of GBP1.1
million. In addition, it won a GBP0.5 million contract with Tower
Hamlets Community Housing for kitchen and bathroom maintenance
work. The robustness of Purdy's performance during the Period has
been excellent and is a testament to the quality of the business,
the strength of relationships with their client base and the
resolve of the staff.
DCB
DCB's progress has been sluggish during the Period, as deferred
starts and deferred contracts on projects limited the opportunities
for the business. However, these projects have now begun to gather
pace post Period end and will continue to accelerate to the end of
the financial year. DCB built on its relationship with the Port of
Dover by securing a GBP1.5 million contract for Fire Risk
Assessment upgrades to 140 buildings in the area. The contract DCB
held with the Tunbridge Wells Borough Council for the last seven
years to conduct corporate maintenance was extended for an
additional five years. In addition, DCB signed a new contract with
Newlon Housing for GBP1.3 million and a GBP1.2 million contract
with NHS Health Living Centres for remodelling and refurbishment
work.
Spokemead
Despite the reduction in contracted work, following their tender
win last year with Southwark Council, Spokemead continues to
progress positively and has recently secured some new emergency
lighting instalments which will commence in the final quarter of
the year.
R Dunham
Following the acquisition of R Dunham, a significant amount of
work has been undertaken during the Period to align the subsidiary
with the rest of the Group. Historically the subsidiary was
entirely paper-based. It has now been integrated on the centralised
operating systems and will benefit significantly from the
efficiencies this will deliver. The former owner and son have now
left the business. Lee Venables, Bilby COO will undertake overall
responsibility of the subsidiary whilst we assess the potential for
further consolidation within the Group. The opportunity for
strengthening inter-company synergies have already been clearly
demonstrated between R Dunham and Purdy, where they have
successfully coordinated key services relating to Hackney Council,
a Purdy customer.
Summary
During the Period, there has been a great deal of focus on the
operational and financial review of the Group. However, despite the
challenges inherited as a result of P&R, the commitment of our
exceptional workforce has ensured the subsidiaries have performed
and gained further momentum by securing new contracts. We have
continued to deliver a high-quality service to our customers
throughout. Importantly, no major contracts are up for renewal in
the current financial year.
There is still work to be done but the turnaround of the Group
is well on track. Our actions during the period and the recent fund
raise post-Period has stabilised our operations, enabling the Group
to focus on achieving growth. As a result, the Board has confidence
in meeting its expectations for the full year.
Financial Review
The Board are satisfied with the performance of the Group in the
6 months to 30 September 2019 considering the significant
challenges that were faced in the Period.
Revenues of GBP29.8 million and underlying EBITDA of GBP2.1
million in the Period compares to underlying revenues of GBP33.2
million and underlying EBITDA of GBP0.486 million in the second
half of the year ended 31 March 2019, reflecting the consolidation
of the business and elimination of loss making activities.
Underlying revenues in the six month period to 30 September 2018
were GBP36.4 million and underlying EBITDA GBP2.7 million. The
reduction in revenues primarily relates to the exit from the
P&R gas division and lower activity in DCB due to some delays
in the start of contracted projects which are now starting to
progress.
The exit from loss making gas contracts in P&R and transfer
of the other day-to-day operations of P&R is complete and the
claim proceedings with East Kent Housing were resolved post the
Period end with nil settlement to either party. Good progress has
been made on the investment in operational and finance systems,
processes and structures for the Group.
Underlying cash generated of GBP2.4 million demonstrates a
positive cash conversion in the period. Net cash generated from
operating activities was GBP0.629 million after absorbing
non-underlying cash payments of approximately GBP1.8 million
relating to the loss on exit from onerous contracts, the closure of
the gas division of P&R and restructuring costs, which had an
impact on the working capital position of the Group. Operating cash
outflow in the year ended 31 March 2019 was GBP2 million.
Total borrowings increased in the period by GBP0.2 million to
GBP11.1 million, with the cash generated by operating activities
absorbed mainly by the payment of the deferred consideration of
GBP0.476 million for the acquisition of R Dunham and finance costs
relating to interest payable on term loans, mortgage loans and
overdraft. Net debt for covenant purposes was GBP13.7 million at 30
September 2019 and GBP12.6 million at 30 November 2019, with total
facilities of GBP13.9 million.
Post the Period end, in November 2019, the Group undertook a
successful share placing raising GBP2 million (GBP1.8 million net
of costs). The net proceeds were used to improve the Group's
working capital position, with GBP1.2m reducing trade creditors and
the balance improving working capital. We expect to further reduce
the stretch in our trade creditors by up to c.GBP1 million in the
coming months. The Group has been granted temporary amendments to
its financial covenants with HSBC until June 2020 which will
provide additional time and flexibility to agree new debt
facilities with rebased financial covenants. The Bank remains
supportive and discussions are already underway to agree new
facilities.
The Board remains confident in achieving revenues of GBP59
million for the year ending 31 March 2020 with underlying EBITDA of
not less than GBP4.5 million.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 30 September 2019
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September 2019
2019 2018
GBP'000 GBP'000 GBP'000
Underlying revenue 29,778 36,359 69,588
Non-underlying revenue - - (3,060)
Total revenue 29,778 36,359 66,528
Underlying cost of sales (21,959) (28,098) (54,457)
Non-underlying cost of sales - - (2,618)
------------- ------------- -----------
Gross Profit 7,819 8,261 9,453
Other operating expenses (5,902) (5,715) (12,342)
------------- ------------- -----------
Operating profit before non-underlying
items 1,917 2,546 (2,889)
Non-underlying operating expenses
Amortisation of customer relationships (963) (896) (1,836)
Impairment of customer relationships - - (1,802)
Share based payment charge (28) (64) (128)
Acquisition costs - - (120)
Restructuring costs - (82) (975)
Loss on exit from onerous contracts
and gas division of P&R - - (2,350)
------------- ------------- -----------
Total non-underlying operating expenses (991) (1,042) (7,211)
Operating profit/(loss) 926 1,504 (10,100)
Finance costs (215) (118) (288)
Profit/(loss) before taxation 711 1,386 (10,388)
Income tax (expense)/credit (169) (253) 1,792
Total profit/(loss) for the period
attributable to the equity holders
of the parent company 542 1,133 (8,596)
Other comprehensive income - - -
Total comprehensive income/(loss) for
the period attributable to the equity
holders of the parent company 542 1,133 (8,596)
============= ============= ===========
Earnings per share (note 5)
Basic (pence) 1.34 2.81 (21.29)
Diluted (pence) 1.34 2.76 (21.29)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September 2019
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September 2019
2019 2018
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible fixed assets 10,930 13,122 11,750
Property plant and equipment 1,684 1,606 1,661
Total non-current assets 12,614 14,728 13,411
Current assets
Inventories 3,425 4,445 3,134
Trade and other receivables 17,555 20,488 18,548
Cash and cash equivalents 11 161 21
Total current assets 20,991 25,094 21,703
Total assets 33,605 39,822 35,114
============= ============= ===========
Issued share capital and reserves
Share capital 4,054 4,029 4,054
Share premium 8,609 8,391 8,609
Share based payment reserve 855 763 827
Merger reserve (248) (248) (248)
Retained earnings (5,312) 4,080 (5,854)
Total equity attributable to the equity
of the group 7,958 17,015 7,388
Non-current liabilities
Borrowings 212 2,200 236
Obligations under finance leases 47 1 -
Deferred tax liabilities 599 1,722 431
858 3,923 667
Current liabilities
Overdraft 6,303 4,354 5,219
Borrowings 4,564 1,498 5,424
Obligations under finance leases 16 28 10
Current income tax liabilities - 1,481 -
Deferred consideration - 500 476
Trade and other payables 13,906 11,023 15,930
24,789 18,884 27,059
Total equity and liabilities 33,605 39,822 35,114
============= ============= ===========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six month period ended 30 September 2019
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September 2019
2019 2018
GBP'000 GBP'000 GBP'000
Net cash generated from/(used in) operating
activities 629 (1,005) (2,026)
------------- ------------- -----------
Cash flow from investing activities
Acquisition of subsidiaries (476) (500) (1,750)
Net cash acquired on acquisition - - 79
Purchases of property, plant and equipment (85) (80) (158)
Purchase of intangible assets (54) (2) (9)
Proceeds on disposal of property, plant
and equipment - - 9
------------- ------------- -----------
Net cash used in investing activities (615) (582) (1,829)
------------- ------------- -----------
Cash flow from financing activities
Proceeds from borrowings - - 6,100
Repayment of borrowings (883) (749) (5,193)
Interest paid (215) (118) (288)
Capital element of finance lease payments (10) (52) (71)
Dividends paid - (805) (1,009)
Net cash used in financing activities (1,108) (1,724) (461)
------------- ------------- -----------
Net decrease in cash and cash equivalents (1,094) (3,311) (4,316)
Cash and cash equivalents at beginning
of period/year (5,198) (882) (882)
Cash and cash equivalents at end of
period/year (6,292) (4,193) (5,198)
============= ============= ===========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 30 September 2019 (unaudited)
Share based
Issued Share payment Merger Retained Total
share capital premium reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April
2019 4,054 8,609 827 (248) (5,854) 7,388
Profit and total comprehensive
income for the period - - - - 542 542
Share-based payment
charge - - 28 - - 28
Dividends paid - - - - - -
Balance at 30 September
2019 4,054 8,609 855 (248) (5,312) 7,958
============== ======== =========== ======== ========= =======
For the six month period ended 30 September 2018 (unaudited)
Balance at 1 April
2018 4,029 8,392 699 (248) 3,751 16,623
Profit and total comprehensive
income for the period - - - - 1,133 1,133
Share-based payment
charge - - 64 - - 64
Dividends paid - - - - (805) (805)
Balance at 30 September
2018 4,029 8,392 763 (248) 4,079 17,015
============== ======== =========== ======== ========= =======
For the year ended 31 March 2019
Balance at 1 April
2018 4,029 8,392 699 (248) 3,751 16,623
Loss and total comprehensive
income for the period - - - - (8,596) (8,596)
Issue of share capital 25 217 - - - 242
Share-based payment
charge - - 128 - - 128
Dividends paid - - - - (1,009) (1,009)
Balance at 31 March
2019 4,054 8,609 827 (248) (5,854) 7,388
============== ======== =========== ======== ========= =======
NOTES TO THE INTERIM STATEMENT
1. Basis of preparation
Bilby Plc and its subsidiaries (together 'the Group') operate in
the gas heating, electrical and general building services
industries. The Group is a public company operating on the AIM
Market of the London Stock Exchange and is incorporated and
domiciled in England and Wales (registered number 09095860). The
address of its registered office is 201 Temple Chambers, 3-7 Temple
Avenue, London EC4Y 0DT.
These interim financial statements of the Group have been
prepared on a going concern basis under the historical cost
convention, and in accordance with International Financial
Reporting Standards ("IFRSs") as adopted by the European Union, the
International Financial Reporting Interpretations Committee
("IFRIC") interpretations issued by the International Accounting
Standards Boards ("IASB") that are effective or issued and early
adopted as at the time of preparing these financial statements and
in accordance with the provisions of the Companies Act 2006. The
Group has adopted all of the new and revised standards and
interpretations issued by the IASB and the International Financial
Reporting Interpretations Committee ("IFRIC") of the IASB, as they
have been adopted by the European Union, that are relevant to its
operations and effective for accounting periods beginning on 1
April 2019.
The interim financial information does not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
annual financial statements, being the statutory financial
statements for Bilby Plc as at 31 March 2019, which have been
prepared in accordance with IFRS as adopted by the European
Union.
The interim financial information for the six months ended 30
September 2019 do not comprise statutory accounts within the
meaning of Section 434 of the Companies Act 2006. The interim
financial information has not been audited.
Significant accounting policies
The accounting policies adopted in the preparation of the
interim financial information is consistent with those expected to
be adopted in the preparation of the Group's annual financial
statements for the year ending 31 March 2020.
Going concern
The Directors have prepared detailed financial forecasts and
cash flows looking beyond twelve months from the date of these
consolidated financial statements. In developing these forecasts
the Directors have made assumptions based upon their view of the
current and future economic conditions that will prevail over the
forecast period.
On the basis of the return to profitability in the period and
the above projections, the successful share placing in November
2019 and the constructive discussion with HSBC as set out below,
the Directors are confident that the Group has sufficient working
capital to honour all of its obligations to creditors as and when
they fall due. Accordingly, the Directors continue to adopt the
going concern basis in preparing these consolidated financial
statements.
Publication of non-statutory financial statements
The results for the six months ended 30 September 2019 and 30
September 2018 are unaudited and have not been reviewed by the
auditor. Statutory accounts for the year ended 31 March 2019, on
which the auditors gave an audit report which included a material
uncertainty related to going concern and did not contain a
statement under section 498(2) or (3) of the Companies Act 2006,
have been filed with the Registrar of Companies. In November 2019,
the Group undertook a successful share placing raising GBP2 million
(GBP1.8 million net of costs). The net proceeds were used to
improve the Group's working capital position. The Group has been
granted temporary amendments to its financial covenants with HSBC
until June 2020 which will provide additional time and flexibility
to agree new debt facilities with rebased financial covenants.
The interim financial information has been prepared on the basis
of the same accounting policies as published in the audited
financial statements for the year ended 31 March 2019.The annual
financial statements of the Group are prepared in accordance with
International Financial Reporting Standards and International
Financial Reporting Interpretations Committee ("IFRIC")
pronouncements as adopted by the European Union. Comparative
figures for the year ended 31 March 2019 have been extracted from
the statutory financial statements for that period.
2. Corporate governance, principal risks and uncertainties
The Corporate Governance Report included with our Annual Report
and Financial Statements for 2019 detailed how we embrace
governance. The Bilby Board recognise the importance of sound
corporate governance commensurate with the size and nature of the
Company and the interests of its shareholders.
The Quoted Companies Alliance has published a corporate
governance code for small and mid-sized quoted companies, which
includes a standard of minimum best practice for AIM companies, and
recommendations for reporting corporate governance matters (the
"QCA Code"). Bilby has adopted the QCA Code.
The nature of the principal risks and uncertainties faced by the
Group have not changed significantly from those set out within the
Bilby Plc annual report and accounts for the year ended 31 March
2019. The main points are listed below:
-- Profitable growth - the growth of our Group is dependent on
its ability to win new business and increase the amount of work we
do for our existing customers. It also relies on our ability to
successfully bid, mobilise, operate and manage contracts
profitably.
-- Reputational management - maintaining our reputation is vital
to the success of our business and a loss of confidence from our
customers and the residents we serve will affect our ability to
retain and win business. This in turn can adversely affect our
financial performance and growth prospects.
-- Financial controls - ensuring we have strong financial
controls, access to funding and effective cash conversion is
essential to our ability to deliver our contracts and grow our
business.
-- Compliance and regulation - delivering on our contractual
obligations and meeting and reporting against agreed service levels
directly affect our ability to retain and win business. In order to
conduct our business we need to work to regulatory frameworks and
comply with legal requirements.
-- Significant health, safety or environmental incident - due to
our diverse operational portfolio, the potential to cause
significant harm to our employees, our business partners or members
of the public, or to damage the environment will always exist. We
are committed to safeguarding our people and protecting the
environment wherever we operate.
-- IT - as a business we are reliant on our IT infrastructure to
be able to conduct our work. IT provides the platform for our
contract management and business support activities. We are reliant
on these systems to improve our operational efficiency and they
provide the foundation for our administrative functions and
financial reporting.
-- Attracting and retaining skilled people - attracting and
retaining the best skilled people at all levels of the business is
critical to the success of our performance. This is particularly
the case in ensuring we have access to a diverse range of views and
experience and in attracting expertise at both managerial and
operational levels where the market may be highly competitive. We
need to maintain good relations with our staff, invest in their
training and the development of their careers.
3. Non-underlying items
Operating profit/(loss) includes the following items which are
considered by the Board to be exceptional, one off in nature,
non-cash expenses or necessary elements of expenditure to derive
future benefits for the Group which have not been capitalised on
the Consolidated Statement of Financial Position.
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September 2019
Note 2019 2018
GBP'000 GBP'000 GBP'000
Amortisation of customer relationships (a) 963 896 1,836
Impairment of customer relationships (a) - - 1,802
Share based payment charge (b) 28 64 128
Acquisition costs (c) - - 120
Restructuring costs (d) - 82 975
Loss on exit from onerous contracts
and gas division of P&R (e) - - 7,604
Impairment of accrued income (f) - - 424
991 1,042 12,889
============= ============= ===========
All non-underlying items have been charged to other operating
expenses except that in the year ended 31 March 2019 GBP2.636
million and GBP2.618 million of the loss on exit from onerous
contracts and gas division of P&R were charged to revenues and
cost of sales respectively and the impairment of accrued income was
charged to revenues.
(a) Amortisation and impairment of customer relationships
Amortisation of acquisition intangibles was GBP0.963 million for
the period (H1 2018: GBP0.896 million) and relates to amortisation
of the customer relationships identified by the Directors on the
acquisition of Purdy, DCB, Spokemead and R. Dunham. Impairment of
customer relationships of GBP1.802 million in the year ended 31
March 2019 related to Spokemead.
(b) Share based payment charge
A group share option scheme is in place during the period. The
share based payment charge has been separately identified as it is
a non-cash expense.
(c) Acquisition costs
Acquisition costs comprise legal, professional and other
expenditure in relation to the acquisition of R. Dunham in the year
ended 31 March 2019.
(d) Restructuring costs
Comprise redundancy costs, compromise agreements, legal and
professional fees and other related costs and were one off and
non-recurring.
(e) Loss on exit from onerous contracts and gas division of P&R
Comprise trading losses, legal and professional fees, impairment
of financial assets and inventory and provisions for claims in
relation to the exit of two contracts in P&R and the exit from
the gas division of P&R.
(f) Impairment of accrued income
Relates to one off adjustment to accrued income on a building
services contract following detailed review undertaken by the
Directors.
4. Cash flows from operating activities
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September 2019
2019 2018
GBP'000 GBP'000 GBP'000
Profit/(loss) before income tax 711 1,386 (10,388)
Adjusted for:
Finance costs 215 118 288
Loss on disposal of property, plant
and equipment 12 - 75
Depreciation 122 112 256
Amortisation of intangible assets 973 916 1,880
Impairment of intangible assets - - 1,802
Share based payments 28 64 128
Fair value adjustment (100) - -
Movement in receivables 993 73 2,980
Movement in payables (2,033) (2,375) 1,870
Movement in inventories (292) (1,292) 186
Tax paid - (7) (1,103)
Net cash from/(used in) operating
activities 629 (1,005) (2,026)
============= ============= ===========
5. Earnings per share
The calculation of basic and diluted earnings per share is based
on the result attributable to shareholders divided by the weighted
average number of ordinary shares in issue during the year. Basic
earnings per share amounts are calculated by dividing net profit
for the year or period attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares
outstanding during the year.
Basic and diluted earnings per share is calculated as
follows:
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September 2019
2019 2018
GBP'000 GBP'000 GBP'000
Profit/(loss) used in calculating
basic and diluted earnings
per share 542 1,133 (8,596)
Weighted average number of shares
for the purpose of basic earnings
per share 40,540,027 40,290,027 40,373,589
Weighted average number of shares
for the purpose of diluted earnings
per share 40,540,027 41,121,286 40,373,589
Basic earnings per share (pence) 1.34 2.81 (21.29)
Diluted earnings per share (pence) 1.34 2.76 (21.29)
Adjusted earnings per share
Profit after tax is stated after deducting non-underlying items
totalling GBP0.991 million. Non-underlying items are either
exceptional or one-off in nature, non-cash expenses or necessary
elements of expenditure to derive future benefits for the Group
which have not been capitalised in the Consolidated Statement of
Financial Position. These are shown separately on the face of the
Consolidated Statement of Comprehensive Income.
The calculation of adjusted basic and adjusted diluted earnings
per share is based on the result attributable to shareholders,
adjusted for exceptional items, divided by the weighted average
number of ordinary shares in issue during the year.
Unaudited Unaudited Audited
6 months 6 months Year ended
to to 31 March
30 September 30 September 2019
2019 2018
GBP'000 GBP'000 GBP'000
Adjusted Earnings Per Share
Profit after tax 542 1,133 (8,596)
Add back:
Restructuring costs - 82 975
Loss on exit from onerous contracts
and gas division of P&R - - 7,604
Impairment of accrued income - - 424
Amortisation of acquisition intangible
assets 963 896 1,836
Impairment of customer relationships - - 1,802
Share based payment charge 28 64 128
Acquisition costs - - 120
Impact of above adjustments on corporation
tax - - (1,716)
------------- ------------------ ----------------------------
1,533 2,175 2,577
------------- ------------------ ----------------------------
Weighted average number of shares
for the purpose of basic adjusted
earnings per share 40,540,027 40,290,027 40,373,589
Weighted average number of shares
for the purpose of diluted adjusted
earnings per share 40,540,027 41,121,286 40,509,079
Basic adjusted earnings per share
(pence) 3.78 5.40 6.38
Diluted adjusted earnings per share
(pence) 3.78 5.29 6.36
6. Share capital
Ordinary shares of GBP0.10 each Unaudited
6 months
to
30 September
2019
GBP'000
At the beginning of the period 4,054
Issued in the period -
--------------------
At the end of the period 4,054
Number of shares Unaudited
6 months
to
30 September
2019
At the beginning of the period 40,540,027
Issued in the period -
--------------------
At the end of the period 40,540,027
7. Dividends
The Board do not recommend an interim dividend for the year
ending 31 March 2020 due to the overall level of indebtedness that
resulted from the loss for the year ended 31 March 2019.
8. Taxation
The income tax charge for the six months ended 30 September 2019
is calculated based upon the effective tax rates expected to apply
to the Group for the full year of 19% (2018: 19%). Differences
between the estimated effective rate and the statutory rate of 19%
are due to non-deductible expenses.
9. Forward-Looking statements
This report contains certain forward-looking statements with
respect to the financial condition of Bilby Plc. These statements
involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There could
be a number of factors which influence the actual results and
developments. These could impact on the forward-looking statements
included in this report.
10. Events after the balance sheet date
In November 2019, the Group undertook a successful share placing
raising GBP2 million (GBP1.8 million net of costs). The net
proceeds were used to improve the Group's working capital position.
The Group has been granted temporary amendments to its financial
covenants with HSBC until June 2020 which will provide additional
time and flexibility to agree new debt facilities with rebased
financial covenants.
In December 2019 the Group formally resolved claim proceedings
with East Kent Housing with nil settlement to either party.
11. Interim Report
Copies of this Interim Report will be available to download from
the investor relations section on the Group's website
www.bilbyplc.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LFFSLFSLTLIA
(END) Dow Jones Newswires
December 19, 2019 02:00 ET (07:00 GMT)
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