TIDMDRV
RNS Number : 0917B
Driver Group plc
08 June 2021
8 June 2021
DRIVER GROUP PLC
("Driver" or "the Group")
Interim Report
For the six months ended 31 March 2021
Key Points (for the six months ended 31 March 2021
6 months 6 months
Ended Ended
31 March 31 March
2021 2020
GBP000 GBP000 Change
Unaudited Unaudited GBP000
---------- ---------- -------
Revenue 24,957 28,042 (3,085)
Gross Profit 6,397 7,175 (778)
Gross Profit % 26% 26% -
-------------------------------- ---------- ---------- -------
Profit before tax 855 1,252 (397)
-------------------------------- ---------- ---------- -------
Add: Share-based payment charge 158 - 158
-------------------------------- ---------- ---------- -------
Underlying* profit before tax 1,013 1,252 (239)
-------------------------------- ---------- ---------- -------
Underlying* profit before tax % 4% 4% -
Underlying* earnings per share 1.4p 1.8p (0.4p)
Net cash** 7,222 3,301 3,921
-- Underlying* profit before tax at GBP1.0m (2020: GBP1.3m)
resulting in an underlying* profit before tax margin of 4% (2020:
4%).
-- Profit before tax at GBP0.9m (2020: GBP1.3m).
-- Net cash increase year on year of GBP3.9m to GBP7.2m (2020: GBP3.3m).
-- Revenue down by 11.0% to GBP25.0m (2020: GBP28.0m) as a result of the impact of COVID-19.
-- Gross profit at 26%, a GBP0.8m decrease to GBP6.4m (2020: GBP7.2m).
-- Fee earner headcount decreased by 28 to 301 with an increase
in EuAm offset by decreases in both APAC and Middle East.
-- Overall utilisation rates of 72.1% (2020: 73.1%).
-- Europe & Americas (EuAm) reported underlying * profit
before tax for the period of GBP2.5m (2020: GBP1.7m) with
utilisation rates at 71.6% (2020: 71.6%).
-- Middle East (ME) reported underlying * loss before tax for
the period of GBP0.4m (2020: breakeven) with utilisation rates at
75.0% (2020: 72.3%).
-- Asia Pacific (APAC) reported underlying * loss before tax for
the period of GBP0.3m (2020: GBP0.6m profit) with utilisation rates
at 67.6% (2020: 77.1%).
* Underlying figures are stated before the share-based payment
costs (this is not a GAAP measure).
** Net cash consists of cash and cash equivalents and bank
loans
*** Utilisation % is calculated by dividing the total hours
billed by the total working hours available for chargeable
staff
Steve Norris, Chairman of Driver Group, said:
"The Group has continued to perform well despite the ongoing
disruption caused by the COVID-19 pandemic. Meaningful progress has
been made on implementing the five year strategy, and this has
positioned the group well for future growth as restrictions
following the pandemic are relaxed and we see the widely
anticipated improvement in our key markets."
Results presentation
The leadership team will be hosting a live webcast for analysts
and investors at 09.30 GMT on 8 June 2021. Analysts have already
been invited to participate in a live Q&A during the
presentation, but any eligible person not having received details
should contact the Company's PR advisers, Acuitas Communications,
at driver@acuitascomms.com or on +44 (0)20 3848 2810.
Enquiries:
Driver Group plc
Mark Wheeler (CEO)
David Kilgour (CFO) +44 (0) 20 7377 0005
N+1 Singer - Nominated Adviser
Sandy Fraser +44 (0)20 7496 3000
Acuitas Communications - Financial +44 (0) 20 3848 2810
PR simon.nayyar@acuitascomms.com
Simon Nayyar catriona.foyle@acuitascomms.com
C atriona Foyle
INTRODUCTION
During the COVID-19 affected first half of the 2021 financial
year the Group has performed in line with the second half of the
2020 financial year. This resilient performance is creditable
during the first half of the financial year with underlying* profit
before tax (stated before share based payment charges) being
slightly below the result for the same period last year, which was
largely unaffected by COVID-19. Whilst the performance during the
period has been adversely impacted by various lockdowns in key
territories and the loss of senior staff and associated team
members to a competitor in the APAC region, we have made meaningful
progress in implementing the five year strategic plan which was
announced in December 2020. We have successfully established and
grown a presence in the United States and Spain which has resulted
in developing opportunities in these markets and in South America.
Additionally, we have achieved the following strategic
objectives:
-- Grown the number of testifying Diales experts to 50
-- Focused recruitment to further enhance our technical and geographic service offering
-- Implemented a new long term incentive plan to aid the retention of key staff
-- Won a long term contract with a major South Korean contractor
based in Seoul which will help to further grow this sector
-- Reduced the Group's cost base by approximately 13%
year-on-year by bearing down selectively on operating costs whilst
maintaining the Group's fee-earning capacity at maximum utilisation
at pre-COVID levels
In addition, it is our intention to establish a forensic
accounting service offering under the Diales brand. This new
service line represents an excellent and complementary fit
alongside our core construction-related quantum, delay and
technical expert services. Implementation of these actions is
consistent with the Group's stated strategic ambition to generate
increased shareholder value through growing the proportion of
revenues derived from higher margin expert assignments.
TRADING PERFORMANCE
Group revenue for the six months to 31 March 2021 was GBP25.0m,
a decrease of 10.7% on the same period in 2020 (GBP28.0m), however
the latter period was mainly unaffected by COVID-19. Overall, the
Group reported an underlying* profit before tax of GBP1.0m (2020:
GBP1.3m). Revenues in the EuAm region of GBP17.2m increased by
11.8% which was offset by decreases of 28.4% in ME and 55.7% in
APAC respectively GBP5.7m and GBP2.1m. The EuAm region delivered
operating profits of GBP2.5m (2020: GBP1.7m) whilst the ME region
recorded an operating loss of GBP0.4m (2020: breakeven) and APAC
region an operating loss of GBP0.3m (2020: operating profit
GBP0.6m). The strong performance in EuAm was delivered across the
region increasing the operating margin to 14.7% (2020: 11.2%)
whilst the poor performances in ME and APAC regions reflect a
combination of COVID-19 affected markets and the loss of key staff
in Singapore to a competitor. Decisive action has been taken with a
view to improving operating performance in both the ME and APAC
regions, with both regions under the common leadership of a very
experienced operational business leader, who joined the Group from
a major competitor in September 2020.
The Group's effective tax rate is 34% (2020: 24%) reflecting a
shift in the geographic split of overall Group profits with taxable
profits generated in the EuAm region and losses in low tax regime
in the ME region. Profit per share was 1.1p (2020: 1.8p).
The Group continues to maintain strict discipline over the
management of its net working capital position and the Group's net
cash** balance stood at GBP7.2m at 31 March 2021 compared to
GBP8.2m at the traditionally seasonally higher financial year end
position at 30 September 2020 and GBP3.3m at 31 March 2020.
Net cash inflow from operations was GBP0.3m (2020: GBP0.5m
outflow) during the first six months, including a net inflow from a
decrease in trade and other receivables of GBP0.1m (2020: GBP2.1m
cash outflow) and a net cash outflow from a decrease in trade and
other payables of GBP1.5m (2020: GBP0.4m). Tax paid totalled
GBP0.2m (2020: GBP0.3m) and the acquisition of fixed assets
absorbed GBP0.2m (2020: GBP0.1m). A further cash outflow during the
period was the payment of dividends of GBP0.4m (2020: GBP0.7m).
DIVID
The final dividend announced at the time of the results for the
year to 30 September 2020 (0.75p per share) in December was paid in
March 2021. Reflecting our confidence in the medium term prospects
for the Group and the inherently cash generative nature of our
business along with the strong balance sheet position the Board
recommends the payment of an interim dividend of 0.75p per share
for 2021 (2020: nil p per share).
OUTLOOK
Activity levels during April and May were broadly unchanged from
those witnessed during the first half and while the pipeline of
opportunities continues to build, the COVID impact on pipeline
conversion timelines suggests that the prospects of a meaningful
uptick during the remainder of the current financial year are now
limited. Construction-related claims activity is a lagging
indicator of broader trends in infrastructure spend and the Board's
belief is that Driver's current activity levels are reflective of
the wider market. Looking beyond the current financial year,
recognising that Driver typically operates with limited forward
revenue visibility, our expectation is that the very significant
constraints on routine business development which have existed
throughout the last twelve months will start to abate. The building
blocks which underpin our five year plan are in place and the Board
is confident that the actions already implemented to reposition the
business with growth focussed on higher margin expert service lines
and, including the
significant reduction in the cost base and hence monthly revenue
break-even level noted above, together ensure that the Group is
well placed to take advantage of the widely anticipated improvement
in our key markets as infrastructure spend recovers and the sector
confronts the reality of a COVID-induced backlog of claims and
disputes.
I would like to pay particular tribute to our CEO Mark Wheeler
and CFO David Kilgour for the way they have managed the business
during the COVID-19 affected times and in tandem have still made
significant progress in implementing the objectives of the five
year strategic plan. I also thank my Board colleagues, Peter
Collini, Elizabeth Filkin and John Mullen for their unstinting
support and most of all, I thank every one of our staff wherever
they are in the world for their continued diligence and loyalty. I
am grateful for the confidence our shareholders have consistently
demonstrated and I assure them that the Group will continue to do
its utmost to repay that confidence.
Steven Norris
Non-Executive Chairman
8 June 2021
* Underlying figures are stated before the share-based payment
costs (this is not a GAAP measure).
** Net cash consists of cash and cash equivalents and bank
loans
Consolidated Income Statement
Interim report for the six months ended 31 March 2021
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2021 2020 2020
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
------------------------------------------------ ---------- ---------- -------------
REVENUE 24,957 28,042 53,074
------------------------------------------------ ---------- ---------- -------------
Cost of sales (18,500) (20,748) (39,162)
Impairment movement (60) (119) (778)
GROSS PROFIT 6,397 7,175 13,134
Administrative expenses (5,576) (5,946) (11,413)
Other operating income 67 73 130
------------------------------------------------ ---------- ---------- -------------
Underlying* operating profit 1,046 1,302 2,618
One off severance costs - - (767)
Share-based payment charge and associated
costs (158) - -
------------------------------------------------ ---------- ---------- -------------
OPERATING PROFIT 888 1,302 1,851
Finance income - 14 14
Finance costs (33) (64) (128)
------------------------------------------------ ---------- ---------- -------------
PROFIT BEFORE TAXATION 855 1,252 1,737
Tax expense (note 2) (291) (301) (399)
------------------------------------------------ ---------- ---------- -------------
PROFIT FOR THE PERIOD 564 951 1,338
Profit/(loss) attributable to non-controlling
interests - 1 (1)
Profit attributable to equity shareholders
of the parent 564 950 1,339
------------------------------------------------ ---------- ---------- -------------
564 951 1,338
------------------------------------------------ ---------- ---------- -------------
Basic earnings per share attributable to equity
shareholders of the parent (pence) 1.1p 1.8p 2.6p
Diluted earnings per share attributable to
equity shareholders of the parent (pence) 1.0p 1.7p 2.5p
------------------------------------------------ ---------- ---------- -------------
* Underlying figures are stated before the share-based payment
costs (this is not a GAAP measure) and one off severance costs.
Consolidated Statement of Comprehensive Income
Interim report for the six months ended 31 March 2021
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2021 2020 2020
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
---------------------------------------------- ---------- ---------- -------------
PROFIT FOR THE PERIOD 564 951 1,338
---------------------------------------------- ---------- ---------- -------------
Other comprehensive income:
Items that could subsequently be reclassified
to the Income Statement:
Exchange differences on translating foreign
operations 37 73 (24)
---------------------------------------------- ---------- ---------- -------------
Other comprehensive income for the year net
of tax 37 73 (24)
---------------------------------------------- ---------- ---------- -------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 601 1,024 1,314
---------------------------------------------- ---------- ---------- -------------
Total comprehensive income attributable to:
Owners of the parent 601 1,023 1,315
Non-controlling interest - 1 (1)
---------------------------------------------- ---------- ---------- -------------
601 1,024 1,314
---------------------------------------------- ---------- ---------- -------------
Consolidated Statement of Financial Position
Interim report for the six months ended 31 March 2021
31 March 31 March 30 September
2021 2020 2020
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
------------------------------- ---------- ---------- ------------
NON-CURRENT ASSETS
------------------------------- ---------- ---------- ------------
Goodwill 2,969 2,969 2,969
Property, plant and equipment 433 593 501
Right of use asset 2,124 2,226 1,831
Intangible asset 319 57 182
Deferred tax asset 303 268 308
------------------------------- ---------- ---------- ------------
6,148 6,113 5,791
------------------------------- ---------- ---------- ------------
CURRENT ASSETS
Trade and other receivables 17,606 21,767 17,819
Derivative financial asset 317 275 171
Cash and cash equivalents 7,472 3,301 11,215
------------------------------- ---------- ---------- ------------
25,395 25,343 29,205
------------------------------- ---------- ---------- ------------
TOTAL ASSETS 31,543 31,456 34,996
------------------------------- ---------- ---------- ------------
CURRENT LIABILITIES
Borrowings (250) - (3,000)
Trade and other payables (8,139) (8,788) (9,446)
Derivative financial liability (1) (64) (178)
Lease creditor (826) (916) (679)
Current tax payable (346) (405) (264)
------------------------------- ---------- ---------- ------------
(9,562) (10,173) (13,567)
------------------------------- ---------- ---------- ------------
NON-CURRENT LIABILITIES
Lease creditor (1,224) (1,184) (1,040)
------------------------------- ---------- ---------- ------------
(1,224) (1,184) (1,040)
------------------------------- ---------- ---------- ------------
TOTAL LIABILITIES (10,786) (11,357) (14,607)
------------------------------- ---------- ---------- ------------
NET ASSETS 20,757 20,099 20,389
------------------------------- ---------- ---------- ------------
SHAREHOLDERS' EQUITY
Share capital 216 216 216
Share premium 11,496 11,496 11,496
Merger reserve 1,055 1,055 1,055
Currency reserve (412) (352) (449)
Capital redemption reserve 18 18 18
Treasury shares (1,025) (1,025) (1,025)
Retained earnings 9,406 8,686 9,075
Own shares (3) (3) (3)
------------------------------- ---------- ---------- ------------
TOTAL SHAREHOLDERS' EQUITY 20,751 20,091 20,383
------------------------------- ---------- ---------- ------------
NON-CONTROLLING INTEREST 6 8 6
------------------------------- ---------- ---------- ------------
TOTAL EQUITY 20,757 20,099 20,389
------------------------------- ---------- ---------- ------------
Consolidated Cashflow Statement
Interim report for the six months ended 31 March 2021
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2021 2020 2020
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
---------------------------------------------------- ---------- ---------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year 564 951 1,338
Adjustments for:
Depreciation 141 162 321
Amortisation of right to use assets 464 514 1,051
Exchange adjustments 32 (7) 55
Finance income - (14) (14)
Finance expense 33 64 128
Tax expense 291 301 399
Equity settled share-based payment charge 158 - -
---------------------------------------------------- ---------- ---------- -------------
OPERATING CASH FLOW BEFORE CHANGES IN WORKING
CAPITAL AND PROVISIONS 1,683 1,971 3,278
Decrease/(increase) in trade and other receivables 126 (2,051) 2,056
(Decrease)/increase in trade and other payables (1,486) (394) 240
---------------------------------------------------- ---------- ---------- -------------
CASH GENERATED/(USED) IN OPERATIONS 323 (474) 5,574
Tax paid (184) (274) (519)
---------------------------------------------------- ---------- ---------- -------------
NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 139 (748) 5,055
---------------------------------------------------- ---------- ---------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received - 14 14
Acquisition of property, plant and equipment (103) (70) (167)
Acquisition of intangible asset (136) (57) (182)
---------------------------------------------------- ---------- ---------- -------------
NET CASH OUTflow FROM INVESTING ACTIVITIES (239) (113) (335)
---------------------------------------------------- ---------- ---------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid (33) (64) (107)
Repayment of borrowings (3,000) (2,125) (3,191)
Proceeds of borrowings 250 - 3,000
Repayment of lease liabilities (437) (505) -
Dividends paid to the equity shareholders of
the parent (391) (652) (653)
Purchase of Treasury shares - (25) (25)
---------------------------------------------------- ---------- ---------- -------------
NET CASH OUTFLOW FROM FINANCING ACTIVITIES (3,611) (3,371) (976)
---------------------------------------------------- ---------- ---------- -------------
Net decrease in cash and cash equivalents (3,711) (4,232) 3,744
Effect of foreign exchange on cash and cash
equivalents (32) 7 (55)
Cash and cash equivalents at start of period 11,215 7,526 7,526
---------------------------------------------------- ---------- ---------- -------------
CASH AND CASH EQUIVALENTS AT OF PERIOD 7,472 3,301 11,215
---------------------------------------------------- ---------- ---------- -------------
Consolidated Statement of Changes of Equity
Interim Report for the six months ended 31 March 2021
For the six months ended 31 March 2021 (Unaudited):
Non-
Share Share Treasury Merger Other Retained Own controlling Total
capital premium shares reserve reserves(2) earnings shares Total(1) interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
CLOSING
BALANCE AT
30 SEPTEMBER
2020 216 11,496 (1,025) 1,055 (431) 9,075 (3) 20,383 6 20,389
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Profit for the
period - - - - - 564 - 564 - 564
Other
comprehensive
income for
the period - - - - 37 - - 37 - 37
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Total
comprehensive
income for
the period - - - - 37 564 - 601 - 601
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Contributions
by and
distributions
to owners
Dividend - - - - - (391) - (391) - (391)
Share-based
payment
charge - - - - - 158 - 158 - 158
Purchase of - - - - - - - - - -
Treasury
shares
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Total
contributions
by and
distributions
to owners - - - - - (233) - (233) - (233)
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
CLOSING
BALANCE AT
31 MARCH 2021 216 11,496 (1,025) 1,055 (394) 9,406 (3) 20,751 6 20,757
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
For the six months ended 31 March 2020 (Unaudited):
Non-
Share Share Treasury Merger Other Retained Own controlling Total
capital premium shares reserve reserves(2) earnings shares Total(1) interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
CLOSING
BALANCE AT
30 SEPTEMBER
2019 216 11,496 (1,000) 1,055 (407) 8,127 (3) 19,484 7 19,491
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Profit for the
period - - - - - 950 - 950 1 951
Other
comprehensive
income for
the period - - - - 73 - - 73 - 73
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Total
comprehensive
income for
the period - - - - 73 950 - 1,023 1 1,024
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Contributions
by and
distributions
to owners
Dividend - - - - - (391) - (391) - (391)
Issue of new - - - - - - - - - -
shares
Purchase of
Treasury
shares - - (25) - - - - (25) - (25)
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Total
contributions
by and
distributions
to owners - - (25) - - (391) - (416) - (416)
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
CLOSING
BALANCE AT
31 MARCH 2020 216 11,496 (1,025) 1,055 (334) 8,686 (3) 20,091 8 20,099
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Consolidated Statement of Changes of Equity (continued)
Interim Report for the six months ended 31 March 2020
For the year ended 30 September 2020 (Audited):
Non-
Share Share Treasury Merger Other Retained Own controlling Total
capital premium shares reserve reserves(2) earnings shares Total(1) interest Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
OPENING
BALANCE AT
1 OCTOBER
2019 216 11,496 (1,000) 1,055 (407) 8,127 (3) 19,484 7 19,491
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Profit for the
year - - - - - 1,339 - 1,339 (1) 1,338
Other
comprehensive
income for
the year - - - - (24) - - (24) - (24)
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Total
comprehensive
income for
the year - - - - (24) 1,339 - 1,315 (1) 1,314
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
Dividends - - - - - (391) - (391) - (391)
Share-based - - - - - - - - - -
payment
charge and
associated
costs
Purchase of
Treasury
shares - - (25) - - - - (25) - (25)
Issue of new - - - - - - - - - -
shares
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
CLOSING
BALANCE AT
30 SEPTEMBER
2020 216 11,496 (1,025) 1,055 (431) 9,075 (3) 20,383 6 20,389
-------------- -------- -------- -------- -------- ----------- -------- ------- -------- ----------- -------
(1) Total equity attributable to the equity holders of the Parent
(2) 'Other reserves' combines the currency reserve and capital
redemption reserve. The movement in the current and prior year
relates to the translation of foreign currency equity balances and
foreign currency non-monetary items.
1 BASIS OF PREPARATION
The consolidated interim financial information has been prepared
using accounting policies which are consistent with those applied
at the prior year end 30 September 2020 and that are expected to be
adopted in the Group's full financial statements for the year
ending 30 September 2021.
The financial information in this interim report is in
compliance with the recognition and measurement principles of
international accounting standards but does not include all
disclosures that would be required under IFRSs and are not IAS 34
compliant. The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of this
financial information. The financial information for the half years
ended 31 March 2021 and 31 March 2020 does not constitute statutory
accounts within the meaning of Section 434(3) of the Companies Act
2006 and is unaudited but has been reviewed by our auditors.
The comparative financial information for the year ended 30
September 2020 included within this report does not constitute the
full statutory accounts for that period. The statutory Annual
Report and Financial Statements for 2020 have been filed with the
Registrar of Companies. The Independent Auditor's Report on that
Annual Report and Financial Statements for 2020 was unqualified,
did not draw attention to any matters by way of emphasis, and did
not contain a statement under 498(2) or 498(3) of the Companies Act
2006.
The Financial Statements have been prepared on a going concern
basis. In reaching their assessment, the Directors have considered
a period extending at least twelve months from the date of approval
of this financial report.
The Directors continue to monitor developments across the
markets the Group operate in and the potential impact of COVID-19
in the short and medium term and is in particular focussed on the
key risks of: delays by clients in contracting for claims advice;
projects being suspended or planned projects not proceeding which
could potentially result in a reduction in staff utilisation
levels; and the impact of the current situation on the financial
stability of clients causing delays to payments.
As Driver's business is geographically well spread across the
world the Directors have been managing the impact of COVID-19 since
January 2020 when the Singapore and Hong Kong offices started
working remotely. As COVID-19 has spread, remote working has been
successfully adopted at varying times in the Middle East offices
and across Europe including the UK with minimal disruption of
service to our clients. Whilst the COVID-19 restrictions have been
relaxed across some jurisdictions the ongoing impact continues to
be felt. The Directors are continuing to closely monitor the impact
on the business to ensure the welfare of the staff and the
clients.
The Directors have prepared cash flow forecasts and a reverse
stress test covering a period of more than 12 months from the date
of releasing these financial statements. This assessment has
included consideration of the forecast performance of the business
for the foreseeable future, the cash and financing facilities
available to the Group and the mitigating actions undertaken to
reduce the impact of COVID-19. In preparing these forecasts, the
Directors have considered sensitivities incorporating the potential
impact of COVID-19 such as a reduction in both revenues and debtor
receipts. The forecasts show that the Group could incur a further
reduction in revenues of up to approximately 19% compared to
existing depressed COVID-19 levels if combined with a minimal
change to the cost base and a reduction of cash collections by up
to 24% compared to current levels and still have sufficient
headroom to operate. In all scenarios, the Group remained in a cash
positive position with headroom throughout and as such there were
no concerns with the banking covenants associated with the Group's
facilities.
At 31 March 2021 the Group had cash reserves of GBP7.45m with an
undrawn revolving credit facility of GBP5.0m and an undrawn
GBP1.75m Coronavirus Large Business Interruption Loan Scheme
Facility (GBP0.25m drawn). In addition to the above, the Group has
also agreed a relaxation of its banking covenants until 30
September 2021.
Based on the cash flow forecasts prepared including appropriate
stress testing, the Directors are confident that any funding needs
required by the business will be sufficiently covered by the
existing cash reserves and the undrawn additional credit facility.
As such these Financial Statements have been prepared on a going
concern basis.
2 TAXATION
The tax charge on the profit for the half-year ended 31 March
2021 is based on the estimated tax rates in the jurisdictions in
which the Group operates, for the year ending 30 September
2021.
3 DIVID
In view of the medium term prospects for the Group and the
inherently cash generative nature of the business along with the
strong balance sheet position, the Board recommends the payment of
an interim dividend of 0.75p per share for 2021 (2020: interim
dividend nil p per share).
4 SUMMARY SEGMENTAL ANALYSIS
REPORTABLE SEGMENTS
For management purposes, the Group is organised into three
operating divisions: Europe & Americas (EuAm), Middle East (ME)
and Asia Pacific (APAC). These divisions are the basis on which the
Group is structured and managed, based on its geographic structure.
The following key service provisions are provided across all three
operating divisions: quantity surveying, planning / programming,
quantum and planning experts, dispute avoidance / resolution,
litigation support, contract administration and commercial advice /
management. Segment information about these reportable segments is
presented below.
Europe Middle
Six months ended 31 March 2021 & Americas East Asia Pacific Eliminations Unallocated Consolidated
(Unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Total external revenue 17,179 5,689 2,089 - - 24,957
Total inter-segment revenue - - 18 (18) - -
------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Total revenue 17,179 5,689 2,107 (18) - 24,957
------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Segmental profit 2,527 (398) (278) - - 1,851
Unallocated corporate expenses - - - - (805) (805)
Share-based payment charge - - - - (158) (158)
------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Operating profit/(loss) 2,527 (398) (278) - (963) 888
Finance income - - - - - -
Finance expense - - - - (33) (33)
------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Profit/(loss) before taxation 2,527 (398) (278) - (996) 855
Taxation - - - - (291) (291)
------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Profit/(loss) for the period 2,527 (398) (278) - (1,287) 564
------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Europe Middle
Six months ended 31 March 2020 & Americas East Asia Pacific Eliminations Unallocated Consolidated
(Unaudited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Total external revenue 15,371 7,951 4,720 - - 28,042
Total inter-segment revenue 61 256 7 (324) - -
---------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Total revenue 15,432 8,207 4,727 (324) - 28,042
---------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Segmental profit 1,715 30 633 - - 2,378
Unallocated corporate expenses(1) - - - - (1,076) (1,076)
---------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Operating profit/(loss) 1,715 30 633 - (1,076) 1,302
Finance income - - - - 14 14
Finance expense - - - - (64) (64)
---------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Profit/(loss) before taxation 1,715 30 633 - (1,126) 1,252
Taxation - - - - (301) (301)
---------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Profit/(loss) for the period 1,715 30 633 - (1,427) 951
---------------------------------- ----------- ------- ------------ ------------ ----------- ------------
Europe & Middle
Year ended 30 September Americas East Asia Pacific Eliminations Unallocated Consolidated
2020 (AUDITED) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------- --------- ------- ------------ ------------ ----------- ------------
Total external revenue 31,033 14,373 7,668 - - 53,074
Total inter-segment revenue 53 576 24 (653) - -
---------------------------------- --------- ------- ------------ ------------ ----------- ------------
Total revenue 31,086 14,949 7,692 (653) - 53,074
---------------------------------- --------- ------- ------------ ------------ ----------- ------------
Segmental profit 3,988 111 511 - - 4,610
Unallocated corporate expenses(1) - - - - (1,992) (1,992)
One off severance costs - - - - (767) (767)
---------------------------------- --------- ------- ------------ ------------ ----------- ------------
Operating profit 3,988 111 511 - (2,759) 1,851
Finance income - - - - 14 14
Finance expense - - - - (128) (128)
---------------------------------- --------- ------- ------------ ------------ ----------- ------------
Profit before taxation 3,988 111 511 - (2,873) 1,737
Taxation - - - - (399) (399)
---------------------------------- --------- ------- ------------ ------------ ----------- ------------
Profit for the period 3,988 111 511 - (3,272) (1,338)
---------------------------------- --------- ------- ------------ ------------ ----------- ------------
OTHER INFORMATION
Non current assets 3,192 270 87 - 2,242 5,791
Reportable segment assets 16,061 8,796 2,117 - 8,022 34,996
Capital additions(2) 82 37 18 - 212 349
Depreciation and amortisation 543 327 247 - 255 1,372
(1) Unallocated costs represent Directors' remuneration,
administration staff, corporate head office costs and expenses
associated with AIM.
(2) Capital additions comprise of additions to property, plant
and equipment and intangible assets.
5 EARNINGS PER SHARE
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2021 2020 2020
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
--------------------------------------------- ----------- ----------- -------------
Profit for the financial period attributable
to equity shareholders 564 950 1,339
Compensation for loss of office - - 767
Share-based payments cost and associated
costs 158 - -
--------------------------------------------- ----------- ----------- -------------
Underlying* profit for the financial period 722 950 2,106
--------------------------------------------- ----------- ----------- -------------
Weighted average number of shares:
--------------------------------------------- ----------- ----------- -------------
- Ordinary shares in issue 53,962,868 53,962,868 53,962,868
- Shares held by EBT (3,677) (3,677) (3,677)
- Treasury shares (1,787,811) (1,786,062) (1,786,937)
--------------------------------------------- ----------- ----------- -------------
Basic weighted average number of shares 52,171,380 52,173,129 52,172,254
Effect of employee share options 1,939,155 2,759,618 2,558,796
--------------------------------------------- ----------- ----------- -------------
Diluted weighted average number of shares 54,110,535 54,932,747 54,731,050
--------------------------------------------- ----------- ----------- -------------
Basic earnings per share attributable to
equity shareholders of the Parent (pence) 1.1p 1.8p 2.6p
--------------------------------------------- ----------- ----------- -------------
Diluted earnings per share attributable to
equity shareholders of the Parent (pence) 1.0p 1.7p 2.5p
--------------------------------------------- ----------- ----------- -------------
Underlying* basic earnings per share 1.4p 1.8p 4.0p
--------------------------------------------- ----------- ----------- -------------
6 POST BALANCE SHEET EVENT
There have been no significant events requiring disclosure since
31 March 2021.
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END
IR UBUKRAVUNRAR
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June 08, 2021 02:00 ET (06:00 GMT)
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