TIDMTPG
RNS Number : 4304Q
TP Group PLC
12 September 2017
12 September 2017
TP Group plc
("TP Group" or the "Company" or the "Group")
Interim Report for the six months ended 30 June 2017
Growth in mission-critical systems and services
TP Group (AIM: TPG), the specialist services and engineering
group, today announces its unaudited interim results for the six
months ended 30 June 2017.
Financial highlights
-- Revenue up 45% to GBP13.6m (H1 2016: GBP9.4m)
-- Operating loss reduced to GBP0.3m (H1 2016 operating loss: GBP0.8m)
-- Adjusted EBITDA(1) improved to GBP0.8m (H1 2016: breakeven)
-- Order intake of GBP27.4m was more than three times that of
prior year (H1 2016: GBP8.3m)
-- Closing order book more than doubled to GBP30.8m (H1 2016: GBP13.4m)
-- Cash balance of GBP6.7m (31 December 2016: GBP9.2m)
Operational highlights
-- Acquired and integrated ALS Technologies Ltd. ("ALS") and
Flexible Software Solutions Ltd. ("FSS") adding both revenue and
profit
-- Confirmed two large defence contracts with the Ministry of
Defence ("MoD") adding further long-term revenue visibility
-- Achieved a breakthrough first contract with the UK Army,
being appointed to provide technical and project support to Army HQ
on their secure information system implementation
-- Awarded listing on the MoD's Multi-Participant Framework
Agreement for Technical Support (FATS/5)
-- Appointment of two new non-Executive Directors strengthened
the Board with new skills and experience
Outlook
-- Post-period end equity issue realised GBP20.8m (net of
expenses) to fund acquisitions and further investment into the
existing business
-- Discussions in progress with several acquisition targets with
the aim to close the first transaction by the end of the year
-- The Group is growing its activity with global customers and
partners in Europe, the Americas and most notably in South-East
Asia, evidenced by a significant post-period contract, building our
export revenues
-- Visibility of future revenue improved through greater closing
order book value and a strengthened pipeline of new
opportunities
-- The Group is leveraging existing skills and capabilities into
additional verticals, including secure systems, aerospace and
precision manufacturing
-- Group performance provides confidence that the business will
continue to trade in line with market expectations
Commenting on the results, Chief Executive Officer, Phil
Cartmell said:
"TP Group has had a strong start to the year, building upon our
positive achievements in 2016. We are increasingly finding
ourselves engaged as systems providers, working with tier-1 prime
contractors. This is adding scale and depth to our pipeline of new
business opportunities.
"There is also a growing international profile in our activity.
We have built a track record and enjoy strong relationships with
global customers and partners. We are working with them on projects
that will deliver in Europe, the Middle East and South-East Asia,
and this presence has opened many potential projects that support
our expansion plans in these markets.
"We were delighted with the success of our fundraising in July
that raised GBP20.8m net of expenses. We are actively pursuing a
number of opportunities that, if successfully concluded, are
expected to be accretive to earnings. The Board remains focused on
completing the first of these transactions in the second half of
this year.
"Having continued this progress into the second half of the
year, the Board is confident that the transformed business of TPG
will deliver profit at the adjusted EBITDA(1) level in line with
market expectations for 2017 and move onward to sustainable
profitability."
Note:
1 Adjusted EBITDA is defined as operating profit adjusted to add
back depreciation of property, plant and equipment, amortisation
and impairment of acquired intangible assets and any other
acquisition-related charges, share based payment charges and
exceptional items. Exceptional items are those items believed to be
exceptional in nature by virtue of their size and or incidence.
Exceptional items in the period to 30 June 2017 comprise
restructuring costs of GBP0.3m (2016: Exceptional items in 2016
comprised termination costs of GBP0.2m).
Enquiries:
TP Group plc www.tpgroup.uk.com
Phil Cartmell, Chief Executive Tel: +44 (0)1753 285
Officer 810
Derren Stroud, Chief Financial
Officer
Simon Kings, Executive
Director
Cenkos Securities plc (NOMAD www.cenkos.com
and Broker)
Mark Connelly / Callum Tel: +44 (0)20 7397
Davidson 8900
Vigo Communications www.vigocomms.com
Jeremy Garcia / Fiona Henson Tel: +44 (0)20 7830
/ Natalie Jones 9700
Notes to Editors
TP Group designs and develops advanced technologies, engineers
complex equipment and systems, and provides support throughout
their operational life. The Company's shares have been traded on
AIM since July 2001.
Business Review
Introduction
The Group is pleased to report it has made significant progress
in the first half of 2017 and has continued to deliver market
leading solutions and services to our customers across the defence,
government and industrial markets.
In July 2017, post period end, the Group announced a
transformational GBP20.8m fundraising (net of expenses), strongly
supported by existing shareholders and achieving an objective of
management to introduce new investors to the Company. The proceeds
will be used primarily to fund acquisitions that have the potential
to grow the business in terms of both widening the Group's
capabilities and in earnings accretion.
The Group continues to invest in its businesses to create a
balanced offering and the Board remains focused on business
priorities to:
-- Strengthen the Group's services capability by attracting
talented systems and software engineers
-- Build an experienced team to support planned acquisition activity
-- Enhance capability and streamline operational effectiveness to drive profitability
-- Leverage existing relationships with major customers to
maximise value and expand service offerings
-- Better connect the Group's business units, share capability
efficiently and adding value through cross-selling services and
products
-- Enhance product offering and market reach through acquisition
and by continued investment in the existing business
Financial Overview
The Group has continued to improve profitability at an adjusted
EBITDA(1) level in the first half, through revenue growth in our
core markets supported by a growing order book.
A strong close to 2016 in terms of order capture set the
business up for a very positive start to the year. This momentum
was sustained throughout the first half with a record order intake
in the period of GBP27.4m, positioning the Group well as it enters
the second half of the year. First half order intake was more than
three times that for the equivalent period last year (H1 2016:
GBP8.3m) and provided a sizeable closing order book of GBP30.8m,
more than double the figure last year (H1 2016: GBP13.4m). With a
number of these new orders taking the form of long term contracts,
the Group also has enhanced revenue visibility going forward.
Order intake was strongest in the defence sector, with large
contracts secured for equipment supply and equipment support, and
for project services in large-scale secure communications systems.
The Group continues to develop new opportunities and has an active
sales pipeline.
Efficient conversion of the order book saw revenue grow to
GBP13.6m (H1 2016: GBP9.4m) with positive momentum across both
Engineering and Services. Engineering revenue grew GBP2.8m to
GBP10.7m and Services revenue doubled to GBP2.9m. The Group's
export business also grew, and was further supported by a GBP1.9m
order from a new major maritime customer in South-East Asia,
received in July 2017.
Central costs remained flat in the first half at GBP0.6m (H1
2016: GBP0.6m). All costs associated with supporting the business
units are fully allocated to them.
The Group's revenue growth and continued focus on operational
effectiveness has fed through to further improvement in operating
loss, which fell by GBP0.5m to GBP0.3m, and adjusted EBITDA(1)
which grew to GBP0.8m (H1 2016: breakeven).
The Group cash balance at 30 June 2017 was GBP6.7m (31 December
2016: GBP9.2m):
-- Cash consumed in the first half from operations was GBP1.0m,
reflecting timing of a significant collection associated with a
large defence contract, originally expected in early 2017, that was
received at the end of the 2016 financial year
-- Cash used in investments was GBP1.5m, which includes the
acquisitions of ALS and FSS, plus investment in manufacturing
equipment to launch the Advanced Manufacturing Centre ("AMC") in
Dukinfield
Management views the underlying cash position to be positive and
expects to retain a healthy cash balance at the year end, in line
with market expectations.
Engineering businesses
During the first half of the year, both parts of our engineering
activity were focused on providing a solid and resilient platform
for the Group to grow. Two large defence contracts were secured to
provide long-term revenue visibility.
On 3 April 2017, the Group announced an agreement with the MoD
under which TPG will manage equipment availability and spares
provision for air purification systems on board Royal Navy
submarines currently in service. The five-year contract has an
option for a further two year extension and is estimated by the
Company and the MoD to be worth at least GBP22m (at 2017 prices)
over seven years, although the final value is dependent on spares
usage. This contract is a framework and so is called off
progressively over its term. The full value does not, therefore,
appear on the Company's current order book. The value of orders
booked in the first half of 2017 was GBP8.7m.
In the equipment supply area, an order for multiple oxygen
generation systems for MoD submarines was confirmed. The framework
contract was agreed for up to eight Combined Oxygen Generating
Systems ("COGS") and additional ancillary items to upgrade
in-service Royal Navy submarines. The framework contract has a
potential value of up to GBP22.5m if all systems are ordered. On 4
May 2017, the Group announced the first call-off from the MoD under
this framework, worth GBP9.7m. This first tranche of work is for
four COGS systems plus associated documentation and logistics
support to be built at TPG's facility in Portsmouth and delivered
progressively over the next three years. The balance of the
contract value will be added to the order book as it called off
over the remainder of the contract life.
The Group has also invested in manufacturing and inspection
equipment to launch the AMC at the Dukinfield facility in Greater
Manchester. The AMC was set up initially to support the Group's
contract with GE Oil & Gas (now Baker Hughes, a GE company)
announced on 6 December 2016. It is equipped with high precision,
high capacity machining centres, metrology and manufacturing
systems that will serve a wide range of opportunities in aerospace,
defence and other high-integrity applications.
Services businesses
The Group's Services businesses have evolved significantly
during the first half of 2017. Two primary initiatives were
implemented:
-- the streamlining of the business to create a single services
platform from which to deliver the full range of Group capabilities
in a consistent way, and
-- the acquisition and integration of ALS and FSS to add new
capabilities, capacity and customer relationships.
The resulting consolidation of business methods has greatly
reduced overlap or duplication of business processes and has
established a Group-wide template to facilitate the addition of
future acquired services businesses as opportunities arise. This
restructuring incurred exceptional one-time restructuring costs of
cGBP0.3m.
Services revenue doubled year-on-year to GBP2.9m (H1 2016:
GBP1.5m) and contributed towards balancing business activities
across the Group. Services generated 21% of Group revenue (H1 2016:
16%). The relative growth in this area is expected to continue to
improve the balance of Group revenues in the long term.
The Services business is now set up to provide:
-- Technical project management - services to monitor, control
and integrate engineering activities to help our customers achieve
their strategic objectives on time and to cost, quality and
performance requirements.
-- Systems engineering - requirements capture, architecture,
software development, assurance and delivery roles in aerospace and
defence domains on complex operational, mission- and
safety-critical systems.
-- Through-life support - managing the long-term availability
and performance of complex equipment and systems.
-- Project resourcing - supplying permanent and contract
engineering resources across the aerospace and defence sectors.
A notable contract was secured in the period to provide
independent technical support to an advanced communications and
information management system for the Army HQ. This is a strategic
MoD programme to provide information superiority to UK Commanders
in the Land Environment through better information exploitation
between headquarters and individual troops. TPG are providing
expert skills in systems engineering, project and programme
management and business analysis to complement the Army's own
resources. This represents a major achievement as the Group secured
its first contract with the UK Army.
In addition, the Group was awarded listing on the MoD's
Multi-Participant Framework Agreement for Technical Support
(FATS/5). This is a service catalogue that allows the MoD to
procure technical service work packages from pre-approved
participants and provides ready access to a pipeline of future
business opportunities for the Services business.
Update on acquisition targets
The Company raised GBP20.8 million (net of expenses) towards the
end of July. The proceeds will be used to support a programme of
investment in the existing business together with the acquisition
of suitable companies that demonstrate synergies with the Group's
current activities, and that are intended to be accretive to
earnings in the first full year following completion of their
acquisition.
The Directors continue to evaluate a number of acquisition
opportunities and have identified several in areas including
simulation, emulation, mission control systems, satellite
technologies and unmanned air vehicles, where discussions are
ongoing. The Board is aiming to complete the first acquisition by
the end of the year.
Strategy and Outlook
The Group is firmly focused on further developing TPG into a
highly profitable business, generating annual revenues of between
GBP90m and GBP100m in 2020. The Board firmly believes the defence,
aerospace and government sectors offer scope to accelerate growth
through the Group's leading position as a services and engineering
business with a blue-chip customer base.
Over the first half of 2017 we have delivered improving organic
performance, completed successful acquisitions and built a solid
platform with a strategy for ambitious growth.
The acquisitions completed in February, the strengthening of the
Board and the recent fundraising are key components of this plan
and demonstrate that the business is ready and equipped for the
next phase.
The Group's near-term strategy is in two parts - to focus on the
effective management of the existing business in order to provide
the strongest of platforms for the investments that are planned;
and looking outwards, to identify, evaluate and complete suitable
acquisitions and then integrate them into the Group in order to
materially increase shareholder value.
The Group has seen increasing export opportunities and business
in Europe, the Americas and most notably South-East Asia. This
includes direct sales opportunities and technology developments to
enhance existing products.
We have a strong platform from which to grow and achieve our
targets and we look forward to achieving these targets and
generating considerable shareholder value as we do so.
The Group performance provides the Board with confidence that
the business will continue to trade in line with 2017 market
expectations and build towards sustainable growth and
profitability.
Phil Cartmell Derren Stroud
Chief Executive Officer Chief Financial Officer
12 September 2017
Condensed Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
Re-stated(2)
GBP'000 GBP'000 GBP'000
Revenue 13,640 9,363 21,226
Cost of sales (9,933) (6,878) (14,748)
=============================== ------------ -------------- -------------
Gross profit 3,707 2,485 6,478
=============================== ------------ -------------- -------------
Distribution costs (103) (188) (361)
Administrative expenses (3,876) (3,074) (6,381)
=============================== ------------ -------------- -------------
Operating loss (272) (777) (264)
Adjusted EBITDA(1) 760 12 1,066
Depreciation, amortization
and impairment (615) (540) (1,051)
Acquisition related
cost (89) - (44)
Exceptional items (305) (231) (231)
Share based payments (23) (18) (4)
------------------------------- ------------ -------------- -------------
Operating loss (272) (777) (264)
Finance cost - (69) (69)
=============================== ------------ -------------- -------------
Loss before income
tax (272) (846) (333)
Income tax (charge)/credit (28) 22 134
=============================== ------------ -------------- -------------
Total comprehensive
loss for the period
attributable to shareholders (300) (824) (199)
=============================== ============ ============== =============
Loss per share expressed Pence Pence Pence
in pence per share
Basic and diluted
loss per share (0.07) (0.20) (0.05)
=============================== ============ ============== =============
All results relate to continuing activities.
(1) Adjusted EBITDA is defined as operating profit adjusted to
add back depreciation of property, plant and equipment,
amortisation and impairment of acquired intangible assets and any
other acquisition-related charges, share based payment charges and
exceptional items. Exceptional items are those items believed to be
exceptional in nature by virtue of their size and or incidence.
Exceptional items in the period to 30 June 2017 comprise
restructuring costs of GBP305k (2016: Exceptional items in 2016
comprised termination costs of GBP231k).
(2) Refer to note 2 for details of re-statement
Condensed Consolidated Statement of Financial Position
Unaudited
Unaudited 30 June Audited
30 June 2016 31 December
2017 Re-stated(1) 2016
GBP'000 GBP'000 GBP'000
============================== ========== ============== =============
ASSETS
Non-current assets
Goodwill 3,918 3,918 3,918
Other intangible assets 10,298 9,054 8,775
Property, plant and
equipment 1,053 693 667
============================== ========== ============== =============
15,269 13,665 13,360
============================== ========== ============== =============
Current assets
Inventories 540 136 116
Trade and other receivables 7,844 5,871 7,291
Taxation recoverable - 79 71
Cash and cash equivalents 6,749 7,482 9,160
============================== ========== ============== =============
15,133 13,568 16,638
============================== ========== ============== =============
Total assets 30,402 27,233 29,998
============================== ========== ============== =============
LIABILITIES
Current liabilities
Trade and other payables (9,263) (6,338) (8,411)
(9,263) (6,338) (8,411)
============================== ========== ============== =============
Non-current liabilities
Deferred taxation (1,081) (949) (823)
Provisions (673) (894) (1,101)
============================== ========== ============== =============
(1,754) (1,843) (1,924)
============================== ========== ============== =============
Total liabilities (11,017) (8,181) (10,335)
============================== ========== ============== =============
Net assets 19,385 19,052 19,663
============================== ========== ============== =============
EQUITY
Share capital 4,225 42,246 4,225
Share premium - 13,769 -
Capital redemption
reserve - 575 -
Own shares held by
the Employee Benefit
Trust (561) (561) (561)
Share-based payments
reserve 1,201 1,192 1,178
Retained earnings 14,520 (38,169) 14,821
============================== ========== ============== =============
Total equity 19,385 19,052 19,663
============================== ========== ============== =============
(1) Refer to note 2 for details of re-statement
Condensed Consolidated Statement of Changes in Equity
Own
Capital shares Share-based Retained
Share Share redemption held payments earnings
capital premium reserve by EBT reserve Re-stated(1) Total
Six months GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
to 30 June
2017
--------------------- --------- --------- ------------ -------- ------------ -------------- --------
Balance at
1 January
2017 4,225 - - (561) 1,178 14,821 19,663
IFRS 2 share
option charge - - - - 23 - 23
Total comprehensive
loss for
the period - - - - - (300) (300)
===================== ========= ========= ============ ======== ============ ============== ========
Balance at
30 June 2017 4,225 - - (561) 1,201 14,521 19,386
===================== ========= ========= ============ ======== ============ ============== ========
Six months
to 30 June
2016
===================== ====================================================================================
Balance at
1 January
2016 42,246 13,769 575 (561) 1,174 (37,345) 19,858
IFRS 2 share
option charge - - - - 18 - 18
Total comprehensive
loss for
the period - - - - - (824) (824)
===================== ========= ========= ============ ======== ============ ============== ========
Balance at
30 June 2016 42,246 13,769 575 (561) 1,192 (38,169) 19,052
===================== ========= ========= ============ ======== ============ ============== ========
Year to 31
December
2016
===================== ====================================================================================
Balance at
1 January
2016 42,246 13,769 575 (561) 1,174 (37,345) 19,858
Capital reduction (38,021) (13,769) (575) - - 52,365 -
IFRS 2 share
option charge - - - - 4 - 4
Total comprehensive
loss for
the year - - - - - (199) (199)
Balance at
31 December
2016 4,225 - - (561) 1,178 (14,821) 19,663
===================== ========= ========= ============ ======== ============ ============== ========
(1) Refer to note 2 for details of re-statement
Condensed Consolidated Statement of Cash Flows
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
=============================== ============ ============ =============
Operating activities
Loss before income
tax (272) (846) (333)
Adjustments for:
Depreciation 86 81 98
Amortisation 529 459 953
Finance cost - 69 69
Share-based payment
expense 23 18 4
(Increase)/decrease
in inventories (244) 33 53
(Increase)/decrease
in trade and other
receivables (145) 496 (836)
(Decrease)/increase
in trade and other
payables (512) 582 2,563
(Decrease)/increase
in provisions (428) (202) 5
=============================== ============ ============ =============
(962) 690 2,576
Income tax received 60 - -
=============================== ============ ============ =============
Net cash (used in)/
generated from operating
activities (903) 690 2,576
=============================== ============ ============ =============
Investing activities
Purchase of subsidiary,
net of cash acquired (1,037) - -
Interest received - 1 1
Purchase of property,
plant and equipment (450) (160) (313)
Purchase of Computer
Software (18) (54) (106)
Net cash used in investing
activities (1,505) (213) (418)
=============================== ============ ============ =============
Financing activities
Repayment of hire purchase
liabilities (3) - (3)
Net cash from financing
activities (3) - (3)
=============================== ============ ============ =============
Net (decrease)/increase
in cash and cash equivalents (2,411) 477 2,155
Cash and cash equivalents
at beginning of period 9,160 7,005 7,005
Cash and cash equivalents
at end of period 6,749 7,482 9,160
=============================== ============ ============ =============
Notes to the Condensed Consolidated Interim Financial
Statements
1. Nature of operations and general information
Following the refinement of the Group's strategy, the business
is now managed along two distinct business units. The principal
activities of TP Group plc and its subsidiaries (the "Group")
comprise:
-- TPG Engineering - activities include the design, manufacture,
installation and support of complex equipment. These include air
purification equipment for submarines including oxygen/hydrogen
generation and purification, air handling and distribution systems,
heat exchange equipment used in the heating and cooling of large
scale industrial processes, and other fabricated structures. This
segment is a combination of the prior segments TPG Maritime and TPG
Engineering.
-- TPG Services - the provision of know-how and experience to
add value in large and complex enterprises. Services include
technical project management, systems engineering, design, software
development and assurance. This segment is a combination of the
prior segments TPG Design & Technology, TPG Managed Solutions
and the acquired businesses of ALS Technologies Ltd and Flexible
Software Solutions Ltd.
In 2016, the Group reported along four business units as
follows.
-- TPG Maritime - activities include the provision of air
purification equipment for submarines including oxygen/hydrogen
generation and purification, air handling and distribution
systems.
-- TPG Engineering - activities include the manufacture of heat
exchange equipment used in the heating and cooling of large scale
industrial processes and other fabricated structures.
-- TPG Design and Technology - specialises in the design and
development of high-speed turbomachinery. Innovative compressors
and expander generators use patented technologies.
-- TPG Managed Solutions - services to major organisations
through prime contracting and provision of specialist resources
Central unallocated costs are specific costs associated with the
Group's AIM listing and other Group operational costs that are not
charged out to the operating companies.
TP Group plc (the "Parent Company") is the Group's ultimate
parent company which is incorporated and domiciled in the United
Kingdom. The address of the registered office of the Company is
Cody Technology Park, Old Ively Road, Farnborough, Hampshire, GU14
0LX. The Parent Company's shares are listed on the Alternative
Investment Market of the London Stock Exchange.
The condensed consolidated interim financial statements are
presented in pounds sterling, which is also the functional currency
of the Parent Company, and all values are rounded to the nearest
thousand pounds except when otherwise indicated.
The financial information set out in this interim report does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 31 December 2016, prepared under IFRS as adopted by
the EU, have been delivered to the Registrar of Companies. The
auditor's report on the 2016 financial statements was unqualified,
did not draw attention to any matters by way of emphasis and did
not contain a statement under Section 498(2) or Section 498(3) of
the Companies Act 2006.
The condensed consolidated interim financial statements were
approved for issue by the Board of Directors on 11(th) September
2017.
2. Basis of preparation
These condensed consolidated interim financial statements are
for the six months ended 30 June 2017. They have been prepared
following the principal accounting policies and methods of
computation set out in the Group's Annual Report and Accounts for
the year ended 31 December 2016.
These condensed consolidated interim financial statements have
been prepared under the historical cost convention using accounting
policies consistent with International Financial Reporting
Standards (IFRS) as adopted by the European Union. The same
accounting policies, presentation and methods of computation are
followed in the condensed set of financial statements as applied in
the Group's latest annual audited financial statements. While the
financial figures included in this half-yearly report have been
computed in accordance with IFRS applicable to interim periods,
this half-yearly report does not contain sufficient information to
constitute an interim financial report as that term is defined in
IAS 34.
Going concern
The Directors are satisfied that the Group has adequate
resources to continue in business for the foreseeable future, and
accordingly continue to adopt the going concern basis in preparing
the accounts.
2. Basis of preparation (continued)
Prior year re-statement (H1 2016)
In 2016, the Group identified that a deferred tax liability
previously recognised upon acquisition of TPG Maritime on 5 April
2012 and Shaw Sheet Metal Company on 30 January 2015, had been
incorrectly accounted for. This also affected the value of goodwill
identified as part of the business combination accounting.
The business combination accounting treatment has, therefore
been re-stated in the H1 2016 financial statements. The effects of
the re-statement are as outlined below:
H1 2016 H1 2016
Re-stated Original
GBP'000 GBP'000
================================ =========== ==========
Goodwill 3,918 4,953
Deferred tax liability (949) (1,636)
Tax credit 22 70
Retained earnings (38,169) (37,821)
Total comprehensive
loss for the year
attributable to shareholders (824) (776)
================================ =========== ==========
Restatement of comparative segmental results for 2017
As set out in Note 1, the presentation of the audited segmental
results for the year to 31 December 2016 and the unaudited
segmental results for the six months to 30 June 2016 have been
reclassified to be consistent with the current year presentation.
The overall reported loss for the period has not changed.
3. Segmental Reporting
Following the refinement of the Group's strategy the business is
managed along two distinct business units The following table
presents revenue and profit information for each new business
segment.
TPG TPG Central Group
Engineering(2) Services(2) unallocated
costs
GBP'000 GBP'000 GBP'000 GBP'000
============================ ================ ============= ============= ========
Six months ended
30 June 2017
Revenue 10,715 2,925 - 13,640
Operating profit/(loss) 1,055 (535) (795) (275)
Depreciation, amortisation
and impairment 514 3 101 618
Acquisition related
cost - - 89 89
Exceptional items - 305 - 305
Share based payments - - 23 23
============================
Adjusted EBITDA(1) 1,569 (227) (582) 760
============================ ================ ============= ============= ========
Six months ended
30 June 2016
Revenue 7,904 1,459 - 9,363
Operating profit/(loss) 659 (613) (823) (777)
Depreciation, amortization
and impairment 511 8 21 540
Exceptional items - - 231 231
Share based payments - - 18 18
============================ ================ ============= ============= ========
Adjusted EBITDA(1) 1,170 (605) (553) 12
============================ ================ ============= ============= ========
Year ended
31 December 2016
Revenue 19,080 2,146 - 21,226
Operating profit/(loss) 2,168 (1,008) (1,424) (264)
Depreciation, amortization
and impairment 1,032 19 - 1,051
Acquisition related
costs - - 44 44
Exceptional items - - 231 231
Share based payments - - 4 4
============================ ================ ============= ============= ========
Adjusted EBITDA(1) 3,200 (989) (1,145) 1,066
============================ ================ ============= ============= ========
1 Adjusted EBITDA is defined as operating profit adjusted to add
back depreciation of property, plant and equipment, amortisation
and impairment of acquired intangible assets and any other
acquisition-related charges, share based payment charges and
exceptional items. Exceptional items are those items believed to be
exceptional in nature by virtue of their size and or incidence.
Exceptional items in the period to 30 June 2017 comprise
restructuring costs of GBP305k (2016: Exceptional items in 2016
comprised termination costs of GBP231k).
2 The presentation of the unaudited segmental results for the
six months to 30 June 2016 and 31 December 2016 have been
reclassified to be consistent with the current year presentation in
line with the Group's refined strategy. The overall reported loss
for the period has not changed. TPG Engineering is a combination of
the 2016 segments TPG Maritime and TPG Engineering, TPG Services is
a combination of the 2016 segments TPG Design & Technology, TPG
Managed Solutions and the acquired businesses of ALS Technologies
Ltd and Flexible Software Solutions Ltd.
3. Segmental Reporting (continued)
The following table presents revenue and profit information for
each business segment, as previously applied in the business for
the year ended 31 December 2016.
TPG TPG TPG TPG Central Group
Maritime Engineering D&T MS(2) unallocated
costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= ========== ============= ======== ======== ============= ========
Six months ended
30 June 2017
Revenue 6,769 3,946 313 2,612 - 13,640
Operating profit/(loss) 1,579 (524) (475) (60) (795) (275)
Depreciation,
amortisation
and impairment 425 89 2 2 101 618
Acquisition related
cost - - - - 89 89
Exceptional items - - 305 - - 305
Share based payments - - - - 23 23
Adjusted EBITDA(1) 2,003 (435) (168) (58) (582) 760
========================= ========== ============= ======== ======== ============= ========
Six months ended
30 June 2016
Revenue 5,155 2,749 279 1,180 - 9,363
Operating profit/(loss) 1,300 (641) (752) 139 (823) (777)
Depreciation,
amortisation
and impairment 421 90 8 - 21 540
Exceptional items - - - - 231 231
Share based payments - - - - 18 18
========================= ========== ============= ======== ======== ============= ========
Adjusted EBITDA(1) 1,721 (551) (744) 139 (553) 12
========================= ========== ============= ======== ======== ============= ========
Year ended
31 December
2016
Revenue 12,229 6,851 757 1,389 - 21,226
Operating profit/(loss) 3,335 (1,167) (975) (33) (1,424) (264)
Depreciation,
amortisation
and impairment 859 173 16 3 - 1,051
Acquisition related
cost - - - - 44 44
Exceptional items - - - - 231 231
Share based payments - - - - 4 4
========================= ========== ============= ======== ======== ============= ========
Adjusted EBITDA(1) 4,194 (994) (959) (30) (1,145) 1,066
========================= ========== ============= ======== ======== ============= ========
1 Adjusted EBITDA is defined as operating profit adjusted to add
back depreciation of property, plant and equipment, amortisation
and impairment of acquired intangible assets and any other
acquisition-related charges, share based payment charges and
exceptional items. Exceptional items are those items believed to be
exceptional in nature by virtue of their size and or incidence.
Exceptional items in the period to 30 June 2017 comprise
restructuring costs of GBP305k (2016: Exceptional items in 2016
comprised termination costs of GBP231k).
2 The TPG MS 2017 numbers include the acquired businesses of ALS
Technologies Ltd and Flexible Software Solutions Ltd.
4. Loss per share
The calculation of the basic loss per share is based on the loss
after tax for the period divided by the weighted average number of
shares in issue during the period as follows:
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
number number number
========================= ============ ============ =============
Weighted average shares
in issue 420,857,956 420,857,956 420,857,956
========================= ============ ============ =============
The weighted average number of shares in issue has been reduced
by deducting the weighted average number of shares held by the
Employee Benefit Trust of 1,606,770 shares (six months ended 30
June 2016 and year ended 31 December 2016: 1,606,770 shares).
The issue of additional shares on exercise of employee share
options would decrease the basic loss per share and there is
therefore no dilutive effect of employee share options.
5. Business combinations during the period
On 6 February 2017, the Group through its parent company TP
Group plc, acquired 100% of the issued share capital of ALS
Technologies Limited ("ALS") and Flexible Solutions Software
Limited ("FSS") on a normalised working capital and cash free/debt
free basis, for a combined initial consideration of GBP1.25 million
and a maximum further discounted deferred consideration of GBP1.8
million based on the combined performance of both businesses. The
acquisition costs have been paid in cash from the Group's existing
cash resources. ALS and FSS specialise in providing consulting
services to both the public and private sectors. Payback of the
investment is expected within four years.
The principal reason for this acquisition is to support the
Group's evolution as a diversified engineering group providing not
only design and manufacture of bespoke engineering solutions but
also technical support and management to both the public and
private sectors. Both FSS and ALS now form part of the Services
business segment.
Provisional estimates of the fair value of
identifiable assets and liabilities acquired
are as follows:
ALS and FSS Book Fair
Value Value
GBP'000 GBP'000
============================ ======== ========
Property, plant &
equipment 22 22
Identifiable intangible
assets - 2,035
Cash and cash equivalents 440 440
Financial assets 592 592
Financial liabilities (548) (548)
Deferred taxation - (346)
============================ ======== ========
Total identifiable
net assets 506 2,195
============================ ======== ========
Goodwill arising on -
consolidation
============================ ======== ========
Estimated consideration 2,195
============================ ======== ========
The Group has provisionally fair valued intangible
assets relating to Customer Relationships
of GBP2,035,000. The estimated consideration
payable includes the initial cash consideration
paid of GBP1,477,000 (GBP981,000 ALS and GBP56,000
FSS, together with GBP440,000 of cash and
cash equivalents acquired) and a fair value
estimate of the contingent consideration of
GBP718,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DMGMLNMVGNZM
(END) Dow Jones Newswires
September 12, 2017 02:00 ET (06:00 GMT)
Tp (LSE:TPG)
Historical Stock Chart
From Apr 2024 to May 2024
Tp (LSE:TPG)
Historical Stock Chart
From May 2023 to May 2024