TIDMPTSG
RNS Number : 9549T
Premier Technical Services Grp PLC
26 March 2019
26 March 2019
Premier Technical Services Group PLC
("PTSG" or the "Group")
Another year of exceptional growth delivering record turnover
and profits
Final Results
Premier Technical Services Group PLC ("PTSG" or the "Group"),
the niche specialist services provider, announces its final results
for the year ended 31 December 2018.
Key highlights
-- Group revenue up 31% to GBP69.1m (2017: GBP52.9m).
-- Strong underlying organic revenue growth of 19%.
-- Gross profit up 29% to GBP35.0m (2017: GBP27.1m).
-- Adjusted operating profit* increased 40% to GBP14.9m (2017: GBP10.6m).
-- Adjusted profit before tax** up 40% to GBP14.3m (2017: GBP10.2m).
-- Adjusted EPS* up 22% to 11.86p (2017: 9.73p).
-- Final dividend increased by 13% to 0.90p (2017: 0.80p).
-- Successful equity raise of GBP20m (before expenses) to support acquisitions.
-- Two acquisitions completed in the year both continue to perform well:
o M&P Fire Protection Ltd, enhancing the Group's scale and
geographic coverage in its sprinkler and dry risers operations.
Fully integrated and trading significantly ahead of the acquired
business with a strong order book and pipeline.
o Guardian Electrical Compliance Limited, increasing our already
strong presence in the electrical safety services market. Guardian
has traded well since acquisition and is now expanding into
Scotland and increasing its remedial offering. Guardian's
proprietary software platform, TraQ-it software will be combined
with PTSG Clarity to strengthen the Group's service offering to our
customers.
-- Renewal rate remained high at 88% coupled with strong performance from the Group sales team.
-- Acquisition of Trinity Fire and Security Systems Limited on
21 January 2019. This transformational acquisition will
significantly extend PTSG's Fire Solutions division to offer a full
suite of fire protection services.
*before adjusting items of GBP10.5m (2017: GBP8.3m) resulting in
a statutory operating profit of GBP4.4m (2017: GBP2.4m) and eps of
2.77p (2017: 1.37p)
**before adjusting items of GBP10.5m (2017: GBP8.3m) resulting
in a statutory profit before tax of GBP3.7m (2017: GBP1.8m)
John Foley, Chairman of Premier Technical Services Group PLC
commented
"The second half of 2018 saw the Group make two further
acquisitions, raise fresh equity proceeds of GBP20m and continue to
deliver further healthy levels of organic turnover and profit
growth. As a result of all these factors, I am pleased to report
that record levels of turnover, gross profit, adjusted EBITDA and
adjusted earnings per share were achieved in the year. Subsequent
to the year end we announced the acquisition of Trinity Fire and
Security Systems Limited, which greatly increases the size and
offering of our Fire Solutions Division and percentage of turnover
from recurring and maintenance activities. 2019 has started well as
we continue to deliver against our strategy to seek sector
dominance in the markets we serve, and the Board is both confident
and enthusiastic about the Group's prospects and performance."
Enquiries:
PTSG +44 (0)1977 668 771
Paul Teasdale, Chief Executive Officer
Numis Securities +44 (0)207 260 1000
Stuart Skinner / Kevin Cruickshank / Michael Burke
Hudson Sandler +44 (0)207 796 4133
Charlie Jack / Hattie O'Reilly
About PTSG - www.ptsg.co.uk
Premier Technical Services Group PLC is the UK's leading
provider of façade access and fall arrest equipment services,
lightning protection and electrical testing, steeplejack and rope
access services and fire solutions.
Operating through four divisions, Access & Safety,
Electrical Services, Building Access Specialists and Fire
Solutions, the Group provides highly-engineered industrial products
and quality services and has a substantial presence in a number of
niche markets.
PTSG provides a central information service for its businesses
and champions the dissemination of key information and best
practice. PTSG unites its constituent businesses under one clear
identity, which supports smarter working and delivers top class
service to its customers.
Headquartered in Castleford, West Yorkshire, the Group employs
more than 1,200 people across 31 UK sites, who service more than
180,000 buildings across the whole of the UK for over 20,000
customers in a wide range of industries.
The Company is listed on the LSE AIM (PTSG.L)
Chairman's statement
2018 - a summary
The first half of 2018 saw the Group successfully integrate the
three acquisitions made in 2017 and deliver healthy levels of
profitable growth within its new divisionalised structure.
The second half of 2018 saw the Group make two further
acquisitions, raise fresh equity proceeds of GBP20m (before
expenses) from a successful placing of 12,698,414 new ordinary
shares at a price of 157.5 pence per ordinary share with
institutional investors and continue to deliver further healthy
levels of organic turnover and profit growth. As a result of all
these factors, I am pleased to report that record levels of
turnover, gross profit, adjusted EBITDA and adjusted earnings per
share were achieved in the year ended 31 December 2018. Subsequent
to the year end we purchased the entire issued share capital of
Trinity Fire and Security Systems Limited and have recently
announced the negotiation of GBP40m of committed banking facilities
with HSBC UK Bank plc. The Group is very well placed to continue
its 12 year history of delivering year on year profitable
growth.
Acquisitions
Two acquisitions were completed in 2018.
The acquisition of the entire issued share capital of M&P
Fire Protection Limited ("M&P") was completed in July 2018 for
a total consideration of up to a maximum of GBP3.5m, comprising an
initial cash payment of GBP1.0m and deferred payments of up to
GBP2.5m payable over five years subject to the business achieving
stretching and escalating profit targets in each of those periods.
M&P significantly enhances the scale and geographic coverage of
the Group's sprinkler and dry risers operations and has performed
well since it joined the Group.
The acquisition of the entire issued share capital of Guardian
Electrical Compliance Limited ("Guardian") was completed in October
2018 for a total consideration of up to a maximum of GBP16.0m
comprising an initial cash payment of GBP12.0m and deferred
payments of up to GBP4.0m payable over three years, subject to the
business achieving stretching profit targets. Guardian
significantly increased our already strong presence in the
electrical safety services market and possesses in "TraQ-It" a
proprietary software platform which provides customer and staff
with a unique , interactive on line portal. "TraQ-it" will be
combined with PTSG Clarity, the Group's existing proprietary
operating system, to strengthen the service offering to PTSG
Group's customers. Guardian has also performed strongly since
joining PTSG.
The acquisition of the entire issued share capital of Trinity
Fire and Security Systems Limited was completed in January 2019 for
a total consideration up to a maximum of GBP15.8m, comprising an
initial cash payment of GBP10.8m and deferred payments of up to
GBP5.0m payable over two years. Trinity is seen by us as a
transformational transaction since it greatly increases the size
and offering of our Fire Solutions Division, making it the largest
division in the Group and enabling us to provide a full suite of
fire protection services. Again, Trinity has performed
encouragingly well since joining PTSG.
As is our policy with all deferred payments to which Premier
Technical Services Group Plc is a party, such payments can be
satisfied in cash or shares at our option.
Financial overview of results
Turnover increased by 31% to GBP69.1m (2017: GBP52.9m). Gross
profit increased by 29% to GBP35.0m (2017: GBP27.1m). Adjusted
EBITDA increased by 39% to GBP17.1m (2017: GBP12.3m). Underlying
profit before taxation (before adjusting items of GBP10.5m)
increased by 40% to GBP14.3m (2017: GBP10.2m, before adjusting
items of GBP8.3m). Adjusting items were principally one-off and
non-trading items including GBP1.5m of restructuring costs, GBP2.4m
of share option costs and GBP5.8m of contingent consideration
payment in relation to acquisitions. Adjusted earnings per share
increased by 22% to 11.9p (2017: 9.7p). The Board has recommended a
final dividend of 0.9p per share, which together with the interim
dividend of 0.9p is a 13% increase on the dividends paid in respect
of 2017. Net bank debt at 31 December 2018 was GBP11.9m (2017:
GBP18.3m). Underlying trading cash conversion improved to 72%
(2017: 65%), despite the working capital impact of underlying
organic turnover growth during 2018 of 19%. 2018 saw applications
and accrued income levels principally associated with the Group's
installation activities reduced by 14% to GBP8.4m at 31 December
2018 (2017: GBP9.8m) despite the substantial increase in the
Group's turnover. Debtor days on invoiced sales equated to 88 days
at 31 December 2018 (2017: 97 days) and further improvements in the
Group's working capital position have been targeted for 2019.
Operational highlights
Underlying organic turnover growth of 19% is regarded by the
Board as healthy and the performances of our Fire Solutions and
Electrical Services divisions were especially pleasing. Turnover
from recurring compliance and maintenance activities increased to
51% of total Group turnover during 2018 (2017: 48%), with the
associated gross profit of GBP22.8m amounting to 62% of total Group
gross profit (2017: 58%), and we expect that the full year effect
of the Trinity acquisition will naturally increase this percentage
in 2019. Gross profit margins remained strong at 51%, showing
continuing sustainability in all areas, which reflects the strength
of the Group's established operating model. We pride ourselves on
the fact that our operating model is best in class in the markets
in which we operate; the contract renewal rates in our core
maintenance divisions were at 88% in 2018 and once again we believe
that this is an industry-leading contract renewal rate. The Group's
major accounts sales team was grown in size in 2018 and had a
successful year; the cross-selling of the Group's service offering
to our large customer base continues to gather positive momentum
and continues to provide further organic growth opportunities. The
Chief Executive's Review provides further detail on the initiatives
currently underway in the key areas of efficiency, innovation and
scalability, which will continue to improve the range and quality
of our multi-disciplinary service offerings.
Strategy and intent
We operate only in those areas where we believe that our
established operating model can work effectively. We have grown
both organically and as a result of completing 26 acquisitions
since the Group's creation in 2007. Our turnover and underlying
levels of EBITDA have more than trebled since our IPO in February
2015. The successful placing which raised GBP20 million of fresh
equity proceeds in October 2018 together with the Group's strong
underlying operational cash flow and newly announced expanded
committed banking facilities provide us with plenty of headroom to
continue to develop our established growth plans.
People
I would like to thank the 850 employees, based in 21 locations
across the UK, for their continuing commitment. The Group continues
to win awards for its performance at Institute of Workplace
Facilities Management "IWFM" and Premises and Facilities Management
"PFM" annual ceremonies because of their hard work.
Outlook
2019 has started well as we continue to deliver against our
strategy to seek sector dominance in the markets we serve, which
are underpinned by compliance demand. The Board is both confident
and enthusiastic about the Group's prospects and performance.
John Foley
Chairman
Chief Executive's review
After 12 years as Chief Executive of PTSG, I have never felt
greater pride in the work we do, the positive effect we have on
building users and the workplace environment, and the benefits this
brings to everyone involved with the company - directly and
indirectly.
PTSG is unique in the way it provides building owners and
managers with the niche specialist services they need to operate at
optimum efficiency. We have never strayed from our original vision
of meeting a market requirement for a single provider of multiple
expert services to the services and construction sectors. As we
continue to pursue our business model, which combines acquisitive
growth and organic growth, while delivering our unique bundled
service provision, we enjoy year-on-year growth.
Absolutely fundamental to this growth and success is our
approach to customer service. Its importance for any business can't
be overstated, but for PTSG it's the destination to which all other
roads lead. In every job we do, we want to delight our customers
through our high standards of workmanship. We look for ways to
innovate, to offer cost-effectiveness, to offer services beyond the
original contract and to ensure our operatives undertake every
action safely. This approach guarantees the best possible result
and has led to a contract renewal rate of 88%. This is an
endorsement that we do "get it right" and is something we aim to
maintain and build on even further.
Acquisitions unlock further market potential
Having mentioned acquisitions as one of the bedrocks of our
success, in 2018 we made two carefully targeted and highly
strategic business acquisitions that have bolstered our Fire
Solutions and Electrical Services divisions - which I expect to be
the two most prolific areas of the Group in 2019. M&P Fire
Protection Ltd. (M&P) was acquired in July 2018. The team
provides a range of services in the installation, maintenance and
testing of dry and wet riser systems and commercial and domestic
sprinkler systems. Based in Maidstone, Kent, this gives us a
substantial presence in the south of England.
In October 2018, we acquired Guardian Electrical Compliance
Limited, based in Sheffield, to enhance our strong presence in the
electrical safety services market. The company complements our
existing compliance and testing operating model and product
coverage extremely well. Furthermore, its proprietary "TraQ-It"
software platform enhances our existing disciplines. Guardian,
therefore, is far from just a commodity; it is a managed testing
service - and 72% of PTSG's proforma 2019 gross profit is generated
by compliance businesses.
It is worth noting that we have made 26 business acquisitions to
date. A substantial number of these were in the areas of lightning
protection and electrical testing and maintenance, which has seen
PTSG Electrical Services Ltd. become the largest of our four
business divisions, making a significant Group turnover
contribution. I am confident that Fire Solutions will follow a
similar path, aided by the ongoing high demand for services in this
area.
Grenfell - the beginning of a more robust approach to fire
safety
Although nearly two years have passed since the Grenfell
tragedy, its effects are still resonating throughout the industry,
with a call for a rigorous approach to compliance and testing
within buildings. The fire was allegedly caused by an electrical
fault within one of the apartments, which soon got out of control
largely because of the building's flammable cladding. However, as
M&P Fire Protection's Paul Atkins told BBC London: "If they'd
had a sprinkler system the fire would have been deluged before it
got to the cladding. People would've had plenty of time to leave
the building. To date no-one has ever died in a fire with a
sprinkler system in the household."
The disaster triggered a huge demand for fire safety and
suppression systems to be installed within buildings, with several
councils in London alone committing to sprinkler systems in all of
their housing blocks of a certain height. The world's first modern
recognisable sprinkler system was installed in the Theatre Royal,
Drury Lane in the United Kingdom in 1812 by its architect, William
Congreve, and was patented the same year. It's an innovation which
has been saving lives for over two centuries and has the potential
to save countless more.
Of course, innovation is about much more than technology. As a
multi-disciplinary service provider, it is about being open to
change with the ability to adapt quickly and effectively to meet
the evolving needs of the business leaders in our industry.
In 2017, this saw us reorganise our business as a result of the
call for stringent adherence to the highest standards of safety
regarding fire solutions in buildings.
Our approach in creating a discrete Fire Solutions business
division in answer to an industry and governmental need has had the
dual effect of safeguarding a substantial and growing number of
buildings from the risk and effects of fire, while growing our
business. As demand continues to grow, we will remain extremely
vigilant in upholding these standards of fire safety and will look
for areas to further strengthen our services in this area - and our
coverage of the UK.
It could be said that as far as PTSG is concerned, the
revolution took place in 2007, the year the company was formed, and
the evolution is ongoing. We achieve continuous growth by
delivering niche specialist services to the highest possible
standard - work which improves the day-to-day lives of building
users in many different sectors. Safe working is an original and
integral part of our ethos; rather than doing what is necessary to
be safe, we have always tried to set the standard for safe working
within the industry. It's a way of working that has seen our HSEQ
team actively featured heavily in trade publications such as PFM
magazine, and in 2018 we received our eighth RoSPA Gold award and
our second Gold medal.
November saw a significant change in the FM industry as the
British Institute of Facilities Management (BIFM) changed its name
to the Institute of Workplace and Facilities Management (IWFM).
It's a change that PTSG fully endorses; giving special significance
to the term 'workplace' resonates with the approach we take to
working in multiple areas of the services and construction sectors.
We have always held the view that the niche specialist services
undertaken as part of facilities management contribute to the
performance of organisations of all kinds. In fact, the design of
this annual report was based upon the theme: 'Connected workplace
that drives innovation'.
Divisional results
I am delighted to report another year of exceptional growth -
Group turnover is up substantially on last year's figure. All four
divisions have performed well but special mention must be made of
Fire Solutions which, at the time that the Interim Report 2018 was
published, was already making a contribution of 21% while only in
its second year of operation. As ever, our growth is down to the
talent and hard work of all 850+ team members.
Access & Safety
Safety Testing and Installation, Cradle Maintenance and
Installation. As the UK's leading supplier of fall arrest systems
and safety testing services. In 2018 we achieved a turnover of
GBP17.3m (2017: GBP20.2m) with growth across all segments apart
from Cradles where installation work is lumpy in nature. Adjusted
operating profits were GBP3.0m (2017: GBP3.2m) however, the margin
increased to 17.0% (2017: 15.8%).
Electrical Services
Lightning Protection, Fixed Wire and PAT Testing, (design,
install and maintenance). Turnover grew strongly to GBP30.9m (2017:
GBP20.2m) as it became the largest division with the Group.
Adjusted operating profits increased by 49% to GBP7.0m (2017:
GBP4.7m). We saw growth in all services with the acquisitions made
in 2017 and 2018 making good progress.
Building Access Specialists
Steeplejack Services, High Level Installations, High Level
Remedials, High Level Cleaning. Our products and services enable
safe, efficient access to any part of any building. Our team
members are experts at working at height and performing a
high-quality service even in the most inaccessible locations. We
employ some of the UK's most talented and safety conscious working
at height specialists in the UK. In 2018 we achieved an increase in
turnover to GBP5.6m (2017: GBP5.4m). Adjusted operating profits
rose to GBP1.4m (2017: GBP1.2m).
Fire solutions
Wet and Dry Risers, Sprinkler Systems, Fire Alarms, Emergency
Lighting, Fire Extinguishers (design, install and maintenance). We
now offer one of the UK's most comprehensive fire solutions
services delivering high quality, safety systems in both
residential and commercial settings. Turnover increased rapidly to
GBP15.3m (2017: GBP7.1m) benefiting from strong organic growth
coupled with a good contribution from M&P Fire Protection Ltd
which was acquired in July 2018. Adjusted operating profits
increased to GBP3.5m (2017: GBP1.6m).
Predicting volume and demand whilst increasing efficiency
PTSG has in place a strong pipeline of acquisitions, and our
ongoing work to make sure our infrastructure is scalable will
support further significant additions to the Group. This bodes
extremely well for our investors; PTSG is the leader in the market
sectors in which it elects to operate. We have achieved this
position through acquisitive growth, balanced by organic
growth.
While it is predicted that Fire Solutions will make the largest
contribution to Group turnover in 2019, followed by Electrical
Services, I am also extremely optimistic of further growth in
Access & Safety and Building Access, with plans for further
expansion and geographical coverage in these areas. We must, as a
business, be equally vigilant regarding efficiency as we are with
company growth and any areas for improvement must be addressed.
For example, we will continue to identify opportunities for
upskilling our staff and retaining the talent within our workforce;
we will continue to look for ways to innovate, either through
technology and software or the way we operate as an organisation;
and we will play to our strengths and maximise opportunities for
cross-selling. All of this will help to drive up our already high
contract renewal rate, as the improvements within our specialist
teams are felt by our clients.
I look forward to 2019 with great confidence and the expectation
of consolidating our position as leader in our chosen market
sectors. We are now focused on facilitating a connected workforce
that drives innovation. Every action within all of our projects
must be undertaken safely, for the overall safe and efficient
operation of buildings in all of the sectors in which we work. In
doing so, we will delight a growing diversity of customers.
Paul Teasdale
Chief Executive
Financial review
Summary
2018 was another significant year for PTSG with continued
substantial earnings and revenue growth.
The acquisition of Guardian Electrical Compliance Limited
extended our market dominance in our Electrical Services division
and the acquisition of M&P Fire Protection Limited enhances our
offering in the Fire Solutions division. To provide additional
financial flexibility and help fund the acquisitions GBP20m (pre
expenses) was raised via the successful placement of new, ordinary
shares.
Another year of strong earnings and revenue growth
Revenue grew by 31% in 2018 to GBP69.1m (2017 GBP52.9m) with 21%
from acquisitions and a reported 10% from pure organic growth. We
have previously explained that the revenue in the Cradle
Installation division is lumpy in nature, with most of the turnover
on these long-term contracts being recognised when the cradle is
delivered and installed on site. This lumpy nature resulted in an
abnormally high turnover for this division in 2017 and a more
normalised turnover in 2018. Excluding the impact of these
installations shows that the underlying organic growth rate of the
Group was 19%.
Access and Safety's turnover was affected by this and as such
reported a 14% year on year reduction; with the remainder of the
Access and Safety division (excluding Cradle Installations) growing
by 14%. Despite the lower turnover, the operating margin grew to
17% (2017: 15.8%).
Electrical Services' revenue grew by 53% to GBP30.8m and is now
the largest division accounting for 45% of the Group's revenue. The
revenue growth was aided by the Guardian acquisition and 17% pure
organic growth - driven by strong growth in the Lightning
Protection Testing and Electrical Testing divisions. The operating
margin for this division was accretive to the Group at 23%.
Following the refocusing of the Building Access Specialist
division in 2017, it returned to growth in 2018 with revenue up 4%.
Operating margins increased from 22% to 24%.
Revenue in the Fire Solutions division grew by 114% to GBP15.3m,
with organic growth at 65% predominantly due to the explosive
growth in UK Sprinklers. Operating margin increased by 1 percentage
point to 23%.
Turnover from recurring compliance and maintenance activities
accounted for 51% of the total Group turnover (2017: 48%).
Gross profit increased by 29% to GBP35.0m (2017: GBP27.1m) with
the gross margin, continuing to exceed 50%, at 50.6% (2017: 51.2%).
The slight reduction against the prior year margin was due to mix
and in particular the strong growth in the Fire Solutions division,
which has a GP lower than some of the other divisions but whose
operating margin is accretive for the Group. Gross profit from
recurring compliance and maintenance activities accounted for 62%
of the total Group gross profit (2017: 58%).
Operating profit before adjusting items grew by 40% to GBP14.9m
(2017: GBP10.6m). The adjusted operating profit margin grew by
147bps to 21.6% (2017: 20.1%) with overhead leverage and strong
cost control mitigating the slight gross margin reduction. The
statutory operating profit was GBP4.4m (2017: GBP2.4m) 83% ahead of
last year.
Profit before tax was GBP3.7m (2017: GBP1.8m) and incorporated
GBP10.5m (2017: GBP8.4m) of adjusting items. These adjusting items
were either not expected to recur or non-trading in nature and were
mainly associated with share option costs granted to Directors and
employees of GBP2.4m (2017:GBP3.0m), GBP5.8m of contingent
consideration payments in relation to acquisitions ( GBP2017:
GBP3.5m), GBP0.8m amortisation of acquired intangible assets (2017:
GBP0.4m); and GBP1.5m of restructuring costs associated with the
recent acquisitions (2017 : GBP1.4m). It should be noted that in
2018 the Group achieved the final share options milestone and as a
result these costs will not be incurred in future years. The
contingent payments on acquisition are in accordance with our
acquisition strategy in which we look to reduce risk by keeping
initial consideration payments low and paying deferred
consideration in future years against stretching profit targets,
meaning these deferred payments are effectively self-financing. The
current levels are expected to continue in the near future and will
cover deferred consideration from the recent Trinity
acquisition.
The interest charge and other financing costs were GBP0.7m
(2017: GBP0.6m). This increase was driven by an increase in finance
lease charges in line with the continued expansion in our employee
and engineer base.
Adjusted earnings per share increased by 22% to 11.86p (2017:
9.73p). GBP1.9m of dividends were paid during the year and the
Board is proposing a final dividend of 0.9p per share. This
represents a 13% increase on the 2017 dividends and is in line with
our progressive dividend policy. Statutory earnings per share was
2.77p (2017: 1.37p).
Net debt
Net debt, excluding finance leases, had reduced to GBP11.9m as
of the 31 December 2018 (2017: GBP18.3m), which, together with the
39% increase in EBITDA, meant that net debt had reduced to only 69%
of EBITDA. The reduction in net debt was predominantly driven by a
surplus from the share placing GBP7.2m and an improved underlying
operating cash conversion of 72%. This was offset by deferred
consideration payments of GBP1.8m, and enabled the Group to spend
GBP1.9m on dividends, GBP1.6m on capital expenditure and increase
its working capital in line with the substantial increase in the
size of the Group.
Trade and other receivables increased by GBP5.4m to GBP35.8m
with the two acquisitions adding GBP2.4m. The acquisitions
adversely affect a number of the debtors' ratios because we
acquired the full debtor book but only took a proportion of the
year's turnover. That said, trade receivables and accrued income,
at the reported level, only increased by 13% despite turnover
increasing by 31%. Accrued income reduced by 14% to GBP8.4m with
virtually all the 2017 balance collected in the year. Trade
receivables increased by GBP5.2m, due to a strong Q4 trading
performance, with all the increase in the less than 120 days
category. The level of debt in the 120+day category (from date of
invoice and not due date) fell by 590bps to 20.6% due to improved
cash collection.
We have a long-term relationship with our bankers, HSBC, having
been a customer for over ten years. HSBC has been very supportive
of the Group enabling us to develop our facilities in line with our
increasing profitability. Post year end, we announced an extension
to our banking facilities with the Revolving Credit Facility, taken
out in 2015, increasing to GBP30m and a GBP10m term loan, repayable
over four years, being taken out. Both these new facilities will
give us additional flexibility for the future and are provided with
the same covenant testing, but improved interest margins, as the
previous facilities.
Acquisitions
We acquired M&P Fire Protection Limited and Guardian
Electrical Compliance Limited during the year for a total
consideration of GBP19.5m, GBP6.5m of which was deferred and is
contingent on the continued employment of the vendors and the
achievement of stretching milestone targets.
These acquisitions had a significant impact on the closing
balance sheet adding GBP8.6m to goodwill, GBP6.2m to intangibles,
and GBP0.2m to fixed assets.
Outlook
We believe that 2019 will be another year of substantial
earnings and revenue growth driven by both organic and acquisitive
growth. We are a well financed group and expect to make
improvements to operating cash flow and net debt throughout the
year. We believe that the Group remains well placed to deliver on
our strategic priorities.
Mark Watford
Finance Director
Consolidated statement of comprehensive income
for the year ended 31 December 2018
Year ended 31 December Year ended 31 December
2018 2017
----------------------- ---- ------------------------------------------- ------------------------------------------
Before Adjusting Before Adjusting
adjusting items adjusting items
items Total items Total
GBP GBP GBP GBP GBP GBP
----------------------- ---- ------------- ------------- ------------- ------------- ------------ -------------
Revenue 69,097,155 - 69,097,155 52,939,183 - 52,939,183
Cost of sales (34,134,303) - (34,134,303) (25,860,206) - (25,860,206)
----------------------------- ------------- ------------- ------------- ------------- ------------ -------------
Gross profit 34,962,852 - 34,962,852 27,078,977 - 27,078,977
Net operating
costs (22,280,539) (10,457,975) (32,738,514) (16,755,254) (8,286,404) (25,041,658)
Other operating
income 2,221,144 - 2,221,144 319,299 - 319,299
----------------------- ---- ------------- ------------- ------------- ------------- ------------ -------------
Total operating
profit 14,903,457 (10,457,975) 4,445,482 10,643,022 (8,286,404) 2,356,618
Finance costs (648,743) (73,319) (722,062) (491,885) (71,357) (563,242)
----------------------------- ------------- ------------- ------------- ------------- ------------ -------------
Profit before
taxation 14,254,714 (10,531,294) 3,723,420 10,151,137 (8,357,761) 1,793,376
Taxation (1,172,508) 499,341 (673,167) (733,233) 270,542 (462,691)
----------------------------- ------------- ------------- ------------- ------------- ------------ -------------
Profit attributable
to owners of the
parent 13,082,206 (10,031,953) 3,050,253 9,417,904 (8,087,219) 1,330,685
----------------------------- ------------- ------------- ------------- ------------- ------------ -------------
Total comprehensive
income/(expense)
for the year attributable
to owners of the
parent 13,082,206 (10,031,953) 3,050,253 9,417,904 (8,087,219) 1,330,685
----------------------------- ------------- ------------- ------------- ------------- ------------ -------------
Earnings per share
(pence):
Basic and diluted
earnings per share 2.77 1.37
----------------------------- ------------- ------------- ------------- ------------- ------------ -------------
Consolidated statement of changes in equity
for the year ended 31 December 2018
Attributable to owners of the parent
----------------------------------------------------------------
Capital Share Non-
Share redemption Premium Retained controlling Total
capital reserve Account earnings Total interest equity
GBP GBP GBP GBP GBP GBP GBP
--------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Balance at 31
December
2016 884,025 128,573 548,418 10,482,697 12,043,713 179 12,043,892
Profit for the
year - - - 1,330,685 1,330,685 - 1,330,685
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Total comprehensive
income - - - 1,330,685 1,330,685 - 1,330,685
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Transactions with
owners
Issue of share
capital 161,192 - 16,806,567 (1,160,631) 15,807,128 - 15,807,128
Share based payments
charge - - - 2,444,433 2,444,433 - 2,444,433
Share based deferred
consideration - - - 923,000 923,000 - 923,000
Tax relating to
share based payments - - - 1,363,109 1,363,109 - 1,363,109
Ordinary dividends
paid - - - (1,476,752) (1,476,752) - (1,476,752)
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Transactions with
owners 161,192 - 16,806,567 2,093,159 19,060,918 - 19,060,918
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Balance at 31
December
2017 1,045,217 128,573 17,354,985 13,906,541 32,435,316 179 32,435,495
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Profit for the
year - - - 3,050,253 3,050,253 - 3,050,253
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Total comprehensive
income - - - 3,050,253 3,050,253 - 3,050,253
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Transactions with
owners
Issue of share
capital 186,652 - 23,123,374 (2,717,563) 20,592,463 - 20,592,463
Share based payments
charge - - - 1,302,498 1,302,498 - 1,302,498
Share based deferred
consideration - - - 1,323,000 1,323,000 - 1,323,000
Tax relating to
share based payments - - - (1,032,697) (1,032,697) - (1,032,697)
Ordinary dividends
paid - - - (1,872,379) (1,872,379) - (1,872,379)
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Transactions with
owners 186,652 - 23,123,374 (2,997,141) 20,312,885 - 20,312,885
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Balance at 31
December
2018 1,231,869 128,573 40,478,359 13,959,653 55,798,454 179 55,798,633
---------------------- ---------- ----------- ----------- ------------ ------------ ------------ ------------
Consolidated balance sheet
as at 31 December 2018
2018 2017
GBP GBP
-------------------------------------- ----------- -----------
Assets
Non-current assets
Intangible assets 40,130,047 26,212,021
Property, plant and equipment 5,645,423 4,310,058
Deferred tax asset - 1,567,611
---------------------------------------- ----------- -----------
Total non-current assets 45,775,470 32,089,690
---------------------------------------- ----------- -----------
Current assets
Inventories 1,370,306 1,219,165
Trade and other receivables 39,501,417 32,531,384
Cash at bank and in hand 10,525,955 7,002,025
---------------------------------------- ----------- -----------
Total current assets 51,397,678 40,752,574
---------------------------------------- ----------- -----------
Liabilities
Current liabilities
Trade and other payables 9,830,569 9,030,829
Bank overdraft 10,402,258 12,662,910
Finance leases 1,123,782 736,069
Borrowings - 52,167
Loan notes 1,680,000 -
Deferred consideration 1,935,679 1,335,432
Current tax liabilities 571,980 839,982
---------------------------------------- ----------- -----------
Total current liabilities 25,544,268 24,657,389
Net current assets 25,853,410 16,095,185
---------------------------------------- ----------- -----------
Non-current liabilities
Borrowings 12,000,000 12,661,742
Loan notes 1,060,881 2,667,563
Finance leases 1,275,250 420,075
Deferred consideration 677,000 -
Deferred tax liability 817,116 -
-------------------------------------- ----------- -----------
Total non-current liabilities 15,830,247 15,749,380
---------------------------------------- ----------- -----------
Net assets 55,798,633 32,435,495
---------------------------------------- ----------- -----------
Equity attributable to the owners of
the parent
Share capital 1,231,869 1,045,217
Capital redemption reserve 128,573 128,573
Share premium account 40,478,359 17,354,985
Retained earnings 13,959,653 13,906,541
---------------------------------------- ----------- -----------
55,798,454 32,435,316
Non-controlling interests 179 179
---------------------------------------- ----------- -----------
Total equity 55,798,633 32,435,495
---------------------------------------- ----------- -----------
Consolidated cash flow statement
for the year ended 31 December 2018
2018 2017
GBP GBP
-------------------------------------------- ------------- -------------
Cash flows from operating activities
Profit after taxation 3,050,253 1,330,685
Adjustments for:
Income tax charge 673,167 462,691
Depreciation 2,237,531 1,683,633
Amortisation of intangible assets 829,857 370,623
Profit on disposal of property, plant
and equipment (621,144) (319,299)
Finance costs 722,062 563,242
Share based payments 1,482,243 2,998,813
---------------------------------------------- ------------- -------------
8,373,969 7,090,388
Changes in working capital:
Increase in inventories (59,973) (243,705)
Increase in trade and other receivables (4,586,208) (7,462,133)
(Decrease)/increase in trade and other
payables 932,863 (195,864)
---------------------------------------------- ------------- -------------
Cash generated from /(used in) operations 4,660,651 (811,314)
Interest paid (648,743) (491,885)
Tax paid (1,047,406) (790,890)
---------------------------------------------- ------------- -------------
Net cash inflow/(outflow) from operating
activities 2,964,502 (2,094,089)
---------------------------------------------- ------------- -------------
Cash flows from investing activities
Acquisition of businesses (11,859,382) (14,993,975)
Purchase of property, plant and equipment (1,240,713) (1,368,289)
Payment of deferred consideration (1,772,054) (1,060,000)
Net proceeds from sale of property,
plant and equipment 1,390,647 626,002
---------------------------------------------- ------------- -------------
Net cash outflow from investing activities (13,481,502) (16,796,262)
---------------------------------------------- ------------- -------------
Cash flows from financing activities
(Repayment)/Proceeds from borrowings (713,909) 1,944,124
Capital element of finance lease payments (1,704,593) (1,028,513)
Issue of shares 20,592,463 15,807,128
Dividends paid (1,872,379) (1,476,752)
---------------------------------------------- ------------- -------------
Net cash inflow from financing activities 16,301,582 15,245,987
---------------------------------------------- ------------- -------------
Net increase/(decrease) in cash and
cash equivalents 5,784,582 (3,644,364)
Cash and cash equivalents at 1 January (5,660,885) (2,016,521)
---------------------------------------------- ------------- -------------
Cash and cash equivalents at 31 December* 123,697 (5,660,885)
---------------------------------------------- ------------- -------------
* cash and cash equivalents comprises cash at bank in hand of
GBP10,525,955 (2017: GBP7,002,025) less bank overdraft of
GBP10,402,258 (2017: GBP12,662,910).
Notes to the Final Results
Basis of preparation
The preliminary financial information does not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006, for the financial years ended 31 December 2018
and 31 December 2017, but has been derived from those accounts.
These financial statements have been prepared in accordance with
the requirements of the AIM Rules, in accordance with International
Financial Reporting Standards as adopted by the European Union
("IFRS"), the IFRS Interpretations Committee's ("IFRSIC")
interpretations and with those parts of the Companies Act 2006 as
applicable to companies reporting under IFRS, however, this
announcement in itself does not contain sufficient information to
comply with IFRS. The accounting policies used in preparation of
this preliminary announcement have remained unchanged from those
set out statutory accounts for the year ended 31 December 2017.
They are also consistent with those in the full financial
statements which have yet to be published.
Statutory accounts for 2017 have been delivered to the Registrar
of Companies and those for the financial year ended 31 December
2018 will be delivered following the Company's annual general
meeting. The auditors have reported on those accounts and their
opinion was unqualified and did not contain statements under
section 498(2) or (3) of the Companies Act 2006.
Segmental information
Management has determined the operating segments based on the
operating reports reviewed by the Board of Directors that are used
to assess both performance and strategic decisions. Management has
identified that the Board of Directors is the chief operating
decision maker in accordance with the requirements of IFRS 8
"Operating segments".
The Board of Directors considers the business to be split into
four main types of business generating revenue; Access and Safety,
Electrical Services, Building Access Specialists and Fire
Solutions.
Principally, all revenue originates in the UK.
2018
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
GBP GBP GBP GBP GBP GBP
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Revenue
Total revenue 17,297,574 30,876,933 5,637,377 15,285,271 - 69,097,155
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Total revenue from external
customers 17,297,574 30,876,933 5,637,377 15,285,271 - 69,097,155
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Operating profit before
adjusting items 2,947,284 6,987,254 1,381,857 3,545,763 41,299 14,903,457
Restructuring costs (805,574) (633,006) - (37,203) - (1,475,783)
Share options granted to
Directors and employees (2,357,034) - - - - (2,357,034)
Amortisation of intangible
asset acquired (52,334) (752,523) (25,000) - - (829,857)
Contingent payments in
relation to acquisitions (91,667) (5,703,634) - - - (5,795,301)
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Segment operating profit (359,325) (101,909) 1,356,857 3,508,560 41,299 4,445,482
Net finance cost (147,804) (88,883) (8,184) (20,382) (456,809) (722,062)
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Profit before taxation (507,129) (190,792) 1,348,673 3,488,178 (415,510) 3,723,420
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Other segmental items
Segment assets 21,332,705 22,713,251 3,696,054 9,195,480 40,235,659 97,173,149
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Segment liabilities (3,455,548) (18,308,261) (1,911,014) (2,847,733) (14,851,960) 41,374,516
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Capital expenditure 1,240,021 2,029,449 362,392 556,332 - 4,188,194
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Depreciation 619,594 1,220,513 180,455 216,969 - 2,237,531
----------------------------- ------------ ------------- ------------ ------------ ------------- ------------
Segmental operating profit
The reconciliation of Adjusted EBITDA to statutory operating
profit is shown below.
Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
GBP GBP GBP GBP GBP GBP
---------------------------- ------------ ------------ ------------ ---------- ------- ------------
Adjusted EBITDA 3,566,878 8,207,767 1,562,312 3,762,732 41,299 17,140,988
Depreciation (619,594) (1,220,513) (180,455) (216,969) - (2,237,531)
---------------------------- ------------ ------------ ------------ ---------- ------- ------------
Operating profit before
adjusting items 2,947,284 6,987,254 1,381,857 3,545,763 41,299 14,903,457
Restructuring costs (805,574) (633,006) - (37,203) - (1,475,783)
Share options granted to
Directors and employees (2,357,034) - - - - (2,357,034)
Amortisation of intangible
asset acquired (52,334) (752,523) (25,000) - - (829,857)
Contingent payments in
relation to acquisitions (91,667) (5,703,634) - - - (5,795,301)
---------------------------- ------------ ------------ ------------ ---------- ------- ------------
Statutory operating profit (359,325) (101,909) 1,356,857 3,508,560 41,299 4,445,482
---------------------------- ------------ ------------ ------------ ---------- ------- ------------
2017
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
GBP GBP GBP GBP GBP GBP
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Revenue
Total revenue 20,200,519 20,163,991 5,445,543 7,129,130 - 52,939,183
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Total revenue from external
customers 20,200,519 20,163,991 5,445,543 7,129,130 - 52,939,183
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Operating profit before
adjusting items 3,184,034 4,682,742 1,227,390 1,580,356 (31,500) 10,643,022
Restructuring costs (566,648) (741,074) (28,601) (48,790) (6,493) (1,391,606)
Share options granted to
Directors and employees (2,998,813) - - - - (2,998,813)
Amortisation of intangible
asset acquired (52,333) (293,290) (25,000) - - (370,623)
Contingent payments in
relation to acquisitions (100,000) (3,425,362) - - - (3,525,362)
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Segment operating profit (533,760) 223,016 1,173,789 1,531,566 (37,993) 2,356,618
Net finance cost (89,433) (75,482) (15,951) (15,780) (366,596) (563,242)
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Profit before taxation (623,193) 147,534 1,157,838 1,515,786 (404,589) 1,793,376
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Other segmental items
Segment assets 22,713,713 15,590,383 7,419,880 6,450,468 20,667,820 72,842,264
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Segment liabilities (4,801,727) (11,230,228 (2,058,857) (1,887,288) (20,428,669) (40,406,769)
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Capital expenditure 906,201 791,942 163,308 172,406 - 2,033,857
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Depreciation 575,648 820,212 175,399 112,374 - 1,683,633
----------------------------- ------------ ------------ ------------ ------------ ------------- -------------
Segmental operating profit
The reconciliation of Adjusted EBITDA to statutory operating
profit is shown below.
Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
GBP GBP GBP GBP GBP GBP
---------------------------- ------------ ------------ ------------ ---------- --------- ------------
Adjusted EBITDA 3,759,682 5,502,954 1,402,789 1,692,730 (31,500) 12,326,655
Depreciation (575,648) (820,212) (175,399) (112,374) - (1,683,633)
---------------------------- ------------ ------------ ------------ ---------- --------- ------------
Operating profit before
adjusting items 3,184,034 4,682,742 1,227,390 1,580,356 (31,500) 10,643,022
Restructuring costs (566,648) (741,074) (28,601) (48,790) (6,493) (1,391,606)
Share options granted to
Directors and employees (2,998,813) - - - - (2,998,813)
Amortisation of intangible
asset acquired (52,333) (293,290) (25,000) - - (370,623)
Contingent payments in
relation to acquisitions (100,000) (3,425,362) - - - (3,525,362)
---------------------------- ------------ ------------ ------------ ---------- --------- ------------
Statutory operating profit (533,760) 223,016 1,173,789 1,531,566 (37,993) 2,356,618
---------------------------- ------------ ------------ ------------ ---------- --------- ------------
Earnings per share
The calculation of basic earnings per share for the year ended
31 December 2018 was based on the profit attributable to ordinary
shareholders of GBP3,050,253 (year ended 31 December 2017:
GBP1,330,685).
2018 2017
GBP GBP
------------------------------------------------ ------------ -----------
Profit for the year attributable to owners of
the parent 3,050,253 1,330,685
------------------------------------------------ ------------ -----------
Weighted average number of ordinary shares in
issue for the basic earnings per share 110,296,535 96,809,578
Basic and diluted earnings per share (in pence
per share) 2.77 1.37
------------------------------------------------ ------------ -----------
The calculation of adjusted earnings per share for the year
ended 31 December 2018 was based on the profit before adjusting
items of GBP13,082,206 (Year ended 31 December 2017:
GBP9,417,904).
2017 2016
GBP GBP
------------------------------------- ------------ -----------
Adjusted earnings 13,082,206 9,417,904
Weighted average number of shares 110,296,535 96,809,578
Adjusted earnings per share (pence) 11.86 9.73
------------------------------------- ------------ -----------
Annual Report
The annual report will be mailed to shareholders and will be
available in due course on our website www.ptsg.co.uk.
Annual General Meeting
The annual general meeting will be held at 13 Flemming Court,
Whistler Drive, Castleford, WF10 5HW on Monday 17 June 2019 at
2.00pm.
ENDS
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
FR JAMTTMBBTTPL
(END) Dow Jones Newswires
March 26, 2019 03:01 ET (07:01 GMT)
Premier Technical Services (LSE:PTSG)
Historical Stock Chart
From Apr 2024 to May 2024
Premier Technical Services (LSE:PTSG)
Historical Stock Chart
From May 2023 to May 2024