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

(END) Dow Jones Newswires

June 08, 2021 02:00 ET (06:00 GMT)

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