TIDMAFM
RNS Number : 4552Q
Alpha Fin Markets Consulting plc
06 June 2018
6 June 2018
Alpha Financial Markets Consulting plc
("Alpha", the "Company" or the "Group")
Alpha Financial Markets Consulting plc (AIM:AFM), a leading
global provider of specialist consultancy services to the asset and
wealth management industry, is pleased to report its audited
results for the 12 months ended 31 March 2018 (FY18). This
constitutes the Group's first annual results as a public company,
following admission of the Group to trading on AIM on 11 October
2017.
A YEAR OF STRONG PERFORMANCE AND A CONFIDENT OUTLOOK
Financial Highlights
-- Group revenue increased by 51.5% to GBP66.0m (FY17: GBP43.6m)
-- Group adjusted EBITDA increased by 62.9% to GBP13.9m (FY17: GBP8.6m)
-- Group adjusted operating profit increased by 65.0% to GBP13.6m (FY17: GBP8.3m)
-- Strong cash generation from operating activities of GBP11.3m (FY17: GBP4.3m)
-- Recommending a final dividend per share of 3.69p, bringing
total dividend for the year to 5.17p inclusive of the previously
paid 1.48p interim dividend
-- Exceptional non-recurring items in the period included costs
of AIM admission, costs relating to the acquisition of TrackTwo
GmbH and costs related to a successful secondment programme into
the Group's US offices
Operating Highlights
-- Establishment of first Alpha office in Asia, in Singapore
-- Acquisition and successful integration of TrackTwo GmbH
-- Launch of two new practice areas: Digital and Alpha Data Solutions
-- Continued investment in the highest calibre of people; number
of consultants grew by 27% compared to FY17
-- Addition of five directors to reinforce the management team
and further support future growth
Commenting on the results, Euan Fraser, Global Chief Executive
Officer said:
"We are delighted to be reporting on the most successful year in
Alpha's history. Alpha has continued to achieve growth in all its
core markets of the UK, Europe & Asia, and the US, with revenue
increasing by 51.5% to GBP66.0m and adjusted EBITDA by 62.9% to
GBP13.9m, ahead of market expectations. These results reflect the
exceptionally hard work of our talented team.
We were pleased with the success of our IPO and admission to AIM
in October, and take great confidence from our first eight months
of trading as a public company. We have continued to invest in
geographic expansion and extending Alpha's service offering,
responding to a strong pipeline and unwavering client demand.
Looking ahead, the structural industry drivers of cost pressure
and regulatory change, along with increasing assets under
management, create significant opportunities for future growth. The
Group is well positioned to leverage its recent performance in the
financial year ahead."
Enquiries:
Alpha Financial Markets Consulting
plc +44 (0)20
Euan Fraser, Global Chief Executive 7796 9300
Officer
John Paton, Chief Financial Officer
Temple Bar Advisory (Financial Public +44 (0)77
Relations) 9542 5580
Alex Child-Villiers +44 (0)78
William Barker 2796 0151
Sam Livingstone +44 (0)77
6965 5437
Grant Thornton UK LLP (Nominated
Adviser)
Philip Secrett / Richard Tonthat +44 (0)20
/ Harrison Clarke 7383 5100
Berenberg (Broker)
Chris Bowman / Toby Flaux / Laure +44 (0)20
Fine 3207 7800
Analyst Presentation:
A results presentation from Alpha will take place at 9.30 a.m.
on the day at Berenberg's offices, 60 Threadneedle Street London
EC2R 8HP. Those wishing to attend should email
alpha@templebaradvisory.com or call 0207 001 1080. A copy of the
presentation slides will be available on the company website at
9.30 a.m. for those unable to attend.
The full year results and presentation slides can be found on
Alpha's website at
http://investors.alphafmc.com/reports-and-presentations.
Chairman's Report
Introduction
In my first statement to you as Chairman of the Board, it gives
me great pleasure to introduce Alpha's FY18 year-end results. FY18
was a definitive year for Alpha; in October 2017, the Company was
successfully admitted to trading on the AIM of the London Stock
Exchange and is now able to report Alpha's best financial results
since it was founded in 2003. This compelling record of financial
performance, together with investment in the business from our new
shareholders, positions the Group extremely well for continued
future growth.
Overview of the Financial Year
Alpha has continued to perform confidently across its business
areas and has delivered its first full-year results as a public
company ahead of market expectations. With continuing demand for
Alpha's services from within the asset and wealth management
industry and a strong pipeline of new business, the Group achieved
annual revenues of GBP66.0m. Trading progressed well during the
months following Alpha's admission to trading on AIM.
During the period, Alpha completed an important strategic
acquisition in TrackTwo GmbH ("TrackTwo"), a specialist data
solutions and consulting firm based in Frankfurt. This now forms
the core of a new business practice, Alpha Data Solutions. Alpha
also launched another practice, Alpha Digital, thus strengthening
further its platforms to fulfil business opportunities on an
increasingly global basis.
Dividend
The Alpha Board is recommending a final dividend of 3.69p per
share, which, if approved at the Annual General Meeting, will be
payable on 12 September 2018. Together with the previously paid
2018 interim dividend of 1.48p per share, this gives a total
dividend for the year of 5.17p per share, in line with the policy
of paying approximately 50% of post-tax profits to shareholders,
this year adjusted to reflect normalised post-AIM admission
earnings.
Governance
An important focus since Admission has been fulfilling the
Group's corporate governance transition from a private to a public
company. I am very pleased to be involved in Alpha's future growth
journey, having worked with the Company as a client for over ten
years. The Alpha Board meets regularly to oversee the Group's
corporate activities and progress towards its strategic
objectives.
Board Changes
Recently, we welcomed Penny Judd to the Alpha Board, as a new
Non-Executive Director, and John Paton, who joined Alpha as Chief
Financial Officer. Together, Penny and John bring a wealth of
public markets and financial services expertise to the Alpha Board
and I look forward to working with them.
I was delighted to be appointed as Chairman in February,
following two years serving on the Alpha Board as a Non-Executive
Director. This follows the decision by Timothy Trotter, Alpha's
longest serving independent Non-Executive Director, to step down,
as was disclosed in the AIM admission document. Tim has been an
invaluable support to the Directors in the last four years; we and
the entire management team would like to thank him and wish him
well in the future.
Strategy
The Alpha Board works closely with the Alpha executive team to
develop a successful and achievable strategy. Alpha's growth
strategy remains focussed on continuing to grow in both existing
and new jurisdictions. This strategy is being diligently executed
through the continued strengthening of the global consulting teams,
extension of Alpha's geographic footprint and investment in
capabilities to expand further the service offering.
The Group is led by a strong executive team, with a rich range
of skills and experience, and a deep understanding of the asset and
wealth management industry. The Alpha Board is extremely confident
that this team of people is well placed to deliver Alpha's
strategic vision and objectives.
Outlook
The asset and wealth management industry is undergoing
deep-rooted change, with increasing pressure on fees and regulatory
focus driving the need for support with a range of complex change
initiatives and projects. With its highly focussed market
proposition, strong reputation in the industry and a robust
platform for growth, Alpha is uniquely positioned to assist with
its clients' needs. The Alpha Board is encouraged by the strong
business pipeline and confident of further growth in the financial
year ahead.
Finally, I would like to thank all Alpha's employees, clients
and the wider stakeholders for their commitment, hard work and
invaluable contributions.
Ken Fry
Chairman
Global Chief Executive Officer's Report
Introduction
I am delighted to present our full-year results, with FY18
having been a very successful year for Alpha. Following on from our
AIM admission in October 2017, we have enjoyed another year of
strong revenue, operating profit and adjusted EBITDA growth. This
growth has been delivered across all of our core regions, through
both the breadth of our service offering and a successful
acquisition.
Summary of Financial Performance (1 2)
The Group has demonstrated strong revenue growth, with a
continued focus on operating margins resulting in revenue
increasing by 51.5% to GBP66.0m (FY17: GBP43.6m), adjusted EBITDA
(3) by 62.9% to GBP13.9m (FY17: GBP8.6m) and operating profit by
39.5% to GBP8.6m (FY17: GBP6.1m). Our transition from a private
limited company to a public company strengthened our statement of
financial position and we have also had another year of excellent
cash generation from operations. The Board is pleased to propose a
final dividend of 3.69p per share, bringing the total dividend to
5.17p per share for the year, ahead of expectations.
The Group has delivered very strong organic growth across its
core business, driven by working on some of the largest and most
challenging projects in the asset and wealth management industry,
on an increasingly global scale. The Group also added an additional
25 new clients during the year.
Operational Review
Client demand for our consulting talent and expertise continues
to be driven by the structural industry trends of increasing cost
pressures and regulatory demand, alongside increasing assets under
management. Consequently, FY18 saw strong results from across all
our core geographies: the UK, the US, and Europe & Asia.
Alpha continued to expand its service offering with the creation
of new practices, including Alpha Digital and Alpha Data Solutions,
in response to demand from our clients. In addition, practices that
the Group launched in FY17 such as Investment Guidelines and
Regulatory Compliance performed well and made a contribution to
this year's substantial growth. Well-established practices such as
Front Office, Distribution, M&A Integration and Operations
& Outsourcing continued to be very successful.
Geographical Overview
We are pleased to have enjoyed strong client-led demand across
all of the markets in which we operate:
FY18 FY17 2017
12 months 12 months Change 60 weeks
to to to
31 March 31 March 31 March
2018 2017* 2017**
-------------- ----------- ----------- -------- ----------
Revenue
UK GBP40.0m GBP28.5m 40.5% GBP32.3m
US GBP9.0m GBP4.4m 107.1% GBP4.9m
Europe & Asia GBP17.0m GBP10.7m 58.3% GBP12.0m
-------------- ----------- ----------- -------- ----------
GBP66.0m GBP43.6m 51.5% GBP49.2m
-------------- ----------- ----------- -------- ----------
FY18 FY17 2017
12 months 12 months Change 60 weeks
to to to
31 March 31 March 31 March
2018 2017 2017
-------------- ----------- ----------- -------- ----------
Gross profit
UK GBP17.0m GBP11.2m 52.3% GBP12.5m
US GBP2.7m GBP0.4m 511.2% GBP0.4m
Europe & Asia GBP5.6m GBP3.4m 62.4% GBP3.8m
-------------- ----------- ----------- -------- ----------
GBP25.3m GBP15.0m 68.0% GBP16.7m
-------------- ----------- ----------- -------- ----------
* 12 months results to 31 March 2017 per Admission Document
dated 6 October 2017; hereafter referred to as "FY17"
** Audited results; hereafter referred to as "2017"
31 March 31 March
2018 2017 Change
----------------------- --------- --------- --------
Consultant Headcount*
UK 165 138 20%
US 44 26 69%
Europe & Asia 96 76 26%
----------------------- --------- --------- --------
Year-end totals 305 240 27%
----------------------- --------- --------- --------
* Consultant Headcount refers to fee generating consultants:
employed consultants plus utilised contractors
Each of our regional businesses grew substantially compared to
the previous 12 months, both in terms of revenue and consultant
headcount. Our newest offices in Singapore and Switzerland, which
opened at the end of FY17, were launched in response to client
requests for the Group to have a presence in these locations. I am
pleased to report that both offices enjoyed profitable first years.
We are very pleased with the success of our first office in Asia
and have recently hired an Executive Director in Singapore to
strengthen our offering and lead our expansion in that market.
The UK remains the largest geography within the Alpha Group and
we are delighted with the continued growth that it has enjoyed this
year.
In Europe, Alpha continues to deliver a robust performance
growing revenue and profitability, with offices in France,
Luxembourg, the Netherlands and Switzerland, along with our newly
acquired business in Germany. We perceive a number of growth
opportunities, both in terms of geographic expansion and in the
development of our existing practices.
We believe that the US market represents the most significant
geographic opportunity for future growth. We see no other
consulting firm offering the same blend of expertise,
market-leading consulting and project management skills, and our
proposition is resonating with both national and global clients in
that market. As a result of demand, and our existing projects in
the US, we now have a presence in four financial centres (Chicago,
Denver, Los Angeles, San Francisco), in addition to our core
offices in Boston and New York. We are pleased to report that Alpha
US delivered to our growth expectations in FY18.
Alpha's strong underlying adjusted EBITDA performance reflects
our growing global reputation as the consulting partner of choice
to support asset managers with their most critical projects, along
with our strong utilisation and increased efficiency. We have
continued to invest in central operational capability to support
this continued global growth.
We were also delighted to win the Funds Europe Consultant of the
Year award for the third consecutive year.
Our People
The people at Alpha are our greatest asset. We remain completely
committed to hiring the very highest quality consultants at every
level of the Group and increased our headcount of consultants,
including contractors, by 27% to 305 globally (March 2017: 240).
That relentless focus on quality ensures that we deliver
exceptional results to our clients, which in turn drives client
loyalty and repeat business, and helps us to retain our
market-leading reputation.
We will continue to offer market-leading compensation to attract
the very best consulting talent. Our focus on creating a unique
culture that differentiates us from our competitors also helps us
to retain the talent that we hire, with unmanaged attrition at 5%
in the year. This, in turn, limits recruitment costs and ensures
that our clients benefit from the expertise that an experienced
team brings.
We now have two employee equity schemes in place. Offering all
our people the opportunity to be shareholders in Alpha helps us not
only retain staff and align interests, but also attracts a wide
pool of fresh talent. All staff that were employed at the time of
the AIM admission received a nominal number of shares.
To help achieve a consistent global culture, we have an
important ongoing secondment programme, which has allowed us to
second a significant number of our consultants to facilitate growth
in our new offices, including Singapore and Switzerland most
recently, and embed our culture globally. The globally consistent
culture is very important to the Group as it plays an integral role
in ensuring the same high calibre quality across our consultant
team, driving a seamless client experience and market
reputation.
We were delighted to have our culture recognised by winning a
place, for the second consecutive year, in the Sunday Times' 100
Best Small Companies to Work For 2017 (2017: top 20; 2016: top 50).
Culture and quality have, for many years, been the foundation of
Alpha's success and will continue to shape and drive our
business.
Growth Strategy
Alpha's objective is to be recognised as the leading asset
management consultancy in all the geographies in which it operates,
with an ongoing strategic focus to continue building scale in all
markets, for which it is well positioned.
The Group's growth strategy is both organic and inorganic. The
majority of Alpha's historic growth has been organic, with last
year's acquisition of TrackTwo highlighting the role that inorganic
growth can play in adding to the products and services that the
Group can successfully bring to its client base.
The Group expects to achieve continued growth in all geographic
markets, including both established and more recently opened
offices. Alpha will continue to focus on building its client base
of asset managers, asset owners, wealth managers and those who
support the asset management industry, such as third-party
administrators.
We will continue to invest in our service offering and will both
deepen and broaden our practice structure. Through a combination of
internal promotions and external hires, we will ensure that each
practice has the appropriate leadership to meet client demand.
Alpha has built an exceptional service offering, which is
heavily in demand across a wide range of asset management sponsors
and geographies. That service offering is currently defined by 10
practices within Alpha. Our ongoing focus is to deepen our offering
within those practices and to consistently develop that proposition
across all regions. We will continue to broaden our service
offering and extend the number of practices so as to meet client
demand.
The structural drivers within the asset management industry of
fee pressure, growth in assets under management and on-going
regulatory change are creating significant change and opportunity
within our clients, which are trends that we expect to
continue.
Acquisitions
Acquisitions are an important part of the Group's growth
strategy, alongside organic growth, with a focus on acquiring
businesses that offer complementary services to clients in Alpha's
existing and target markets. Our objective is to extend our
consulting proposition and broaden our reach into other financial
services industries beyond asset and wealth management.
In July 2017, we successfully completed our acquisition of
TrackTwo, and the integration of the business and its core product,
360 SalesVista, has been very successful. Alpha's much broader
footprint allows the Group to take the product, 360 SalesVista, to
a much wider market than TrackTwo as a standalone entity, offering
significant opportunity for future growth.
The Group remains acquisitive and will continue to add to its
service offering through selectively investing in new products and
services that provide diversified and established revenues and,
where possible, are underpinned by strong data or technology
components.
Current Trading and Outlook
The Group's trading performance in the second half of FY18 was
excellent and we have started FY19 with confidence. The structural
drivers in the asset management industry remain very strong and
continue to drive a wide range of significant change projects
within our client base. We remain focused on delivering another
year of growth and continuing to broaden our geographic footprint
and service offering.
The Group is well positioned to leverage its recent
accomplishments and to continue to build on its progress in the
year ahead.
Euan Fraser
Global Chief Executive Officer
1 Comparable period references ("FY17") are to the 12-month
period ended 31 March 2017; see the Chief Financial Officer's
Report for further disclosure
2 All rounding and percentage change calculations are from the
basis of the financial statements, in GBP'000s
3 Adjusted EBITDA is operating profit before interest, tax,
depreciation, amortisation and other adjusting non-operational
costs including acquisition costs, AIM admission costs,
restructuring costs, earn-out costs and share based payment
charges
Chief Financial Officer's Report
Group Results
I am delighted that Alpha has delivered strong inaugural
full-year results following its admission to trading on AIM in
October 2017, and to be reporting my first results as Alpha's Chief
Financial Officer.
Alpha's accounting period represents the year to 31 March 2018
and the comparative period represents 60 weeks to 31 March 2017
from 3 February 2016, when Alpha Financial Markets Consulting plc,
a new holding company, acquired the Alpha business. In order to
allow better clarity to the underlying performance of the Group,
constant period comparisons of selected profit and loss account and
cashflow items have been included.
FY18 FY17 Change 2017 Change
12 months 12 months 60 weeks
to to to
31 March 31 March 31 March
2018 2017* 2017**
-------------------- ------------ ------------ ------- ---------- -------
Revenue GBP66.0m GBP43.6m 51.5% GBP49.2m 34.1%
Gross Profit GBP25.3m GBP15.0m 68.0% GBP16.7m 51.0%
Adjusted EBITDA GBP13.9m GBP8.6m 62.9% GBP8.2m 69.0%
Adjusted Operating
Profit*** GBP13.6m GBP8.3m 65.0% GBP8.0m 71.5%
Operating
Profit GBP8.6m GBP6.1m 39.5% GBP4.0m 113.7%
Net Cashflow
from Operations GBP11.3m GBP4.3m 161.8% GBP5.9m 93.3%
-------------------- ------------ ------------ ------- ---------- -------
* 12 months results to 31 March 2017 per Admission Document
dated 6 October 2017; hereafter referred to as "FY17"
** Audited results; hereafter referred to as "2017"
*** Adjusted operating profit is operating profit before
interest, tax, amortisation and other adjusting non-operational
costs including acquisition costs, AIM admission costs,
restructuring costs, earn-out costs and share based payment
charges
Revenue
The Group has delivered another impressive year of progress.
Reflective of Alpha's successful growth strategy, Group revenue for
FY18 increased to GBP66.0m, representing a 34.1% increase on the
previous accounting period (2017: GBP49.2m), and a 51.5% increase
against the prior 12 months.
Alpha grew in all three of its core geographic regions with
revenues in the UK, the US, and Europe & Asia, increasing by
24.0%, 82.8% and 41.1% respectively (or 40.5%, 107.1% and 58.3%
respectively in comparison to the prior 12 months). This growth has
been driven by strong demand in our established practices,
including Front Office, Distribution, M&A Integration and
Operations & Outsourcing, supported by an increase in global
consultant headcount to 305 consultants (including contractors) by
the year end (March 2017: 240). Both of the newer offices in
Switzerland and Singapore also traded well and made good progress.
TrackTwo, acquired in July 2017, contributed GBP0.9m revenue whilst
under Group ownership.
Group Profitability
The Group also substantially increased its profits. Gross profit
rose to GBP25.3m (2017: GBP16.7m) and gross profit margin improved
430 basis points to 38.3% (2017: 34.0%), driven mainly through
improved utilisation of our consultancy staff, both in the UK and
globally, as both existing and new offices developed an expanded
market presence.
Group overhead costs, before adjusting items as detailed in note
4 of the consolidated financial statements, increased 32% in the
year to GBP11.3m (2017: GBP8.7m), reflecting increased recruitment
spend required to deliver consultant headcount growth, strategic
investment in the Group management team to manage the global
operations and anticipate future growth, other staff related costs
and costs associated with being a publicly quoted company.
The Group also reported an adjusted EBITDA of GBP13.9m,
representing an increase of 62.9% on the prior 12 months. Adjusted
EBITDA margin improved to 21.1% (2017: 16.7%; or FY17: 19.6%).
Adjusted operating profit increased to GBP13.6m (FY17:
GBP8.3m).
Total Group operating profit more than doubled to GBP8.6m (2017:
GBP4.0m) after charging depreciation, intangible amortisation
costs, one-off costs and other non-operational costs. Adjusted
EBITDA excludes these expense items to give better clarity to the
underlying performance of the Group. These adjustments total
GBP5.4m of costs in FY18 (2017: GBP4.2m) and are detailed in note 4
of the consolidated financial statements.
Currency
Currency translation had a modest impact on both sales and
profits in FY18, as a result of the weaker Sterling. In the year,
Sterling averaged USD1.34 (2017: USD1.32) and EUR1.14 (2017:
EUR1.19). Currency translation increased FY18 sales by GBP0.4m
(0.6%).
Net Finance Expense
Net finance costs decreased in the year to GBP7.1m (2017:
GBP7.9m). This decrease reflects Alpha's capital restructuring and
reduced indebtedness since the October equity raise at the time of
admission to AIM. The Group repaid or converted to equity all of
its previous private equity-related debt. As a consequence, GBP1.7m
of amortising loan issuance costs were written off and are included
in the GBP7.1m net finance costs for the year. Since its admission
to AIM, the Group has operated with a net cash position.
Taxation
The Group's tax charge was GBP1.9m (2017: GBP0.5m). The
effective tax rate was inflated by adjusting items, including AIM
admission costs, and limits on tax deductibility of interest costs
under the previous capital structure. The Group's cash tax payment
in the year was GBP1.2m (2017: GBP1.7m). Adjusted profit after tax
is shown using a blended rate of the jurisdictions in which the
Group operates to better indicate the Group's expected ongoing tax
position.
For further taxation details, see notes 8 and 9 in the notes to
the consolidated financial statements.
Acquisition Activity
Complementary, bolt-on acquisitions to enhance the product and
service offering to Alpha's clients are integral to the Group's
strategy. On 18 July 2017, the Group acquired 100% of the share
capital of TrackTwo, a German based consulting and data solutions
business. Since acquisition, TrackTwo continues to progress
well.
Earnings per Share
Pro forma adjusted earnings per share(4) improved to 9.77p per
share (2017: 7.75p) and, after including the adjusting expense
items, the basic loss per share is 0.49p per share (2017: 5.52p
loss).
Cashflow, Statement of Financial Position and Net Funds
The Group has continued to see healthy cash generation with net
cash generated from operating activities rising to GBP11.3m (2017:
GBP5.9m). This represents an 83% adjusted cash conversion(5) rate
from adjusted operating profit this year, improving on the 74%
adjusted cash conversion rate in 2017.
On admission to trading on AIM on 11 October 2017, the Company
issued 22 million shares, which raised GBP35.2m for the Group. This
equity raising, together with existing cash reserves, was used to
meet the admission expenses, and also repay all of the Group's
outstanding debt facilities.
Net cash interest paid increased to GBP5.5m (2017: GBP1.4m)
reflecting the settlement of debt facilities at the time of AIM
admission. Income tax paid totalled GBP1.2m (2017: GBP1.7m). The
Group also paid the initial TrackTwo consideration payment in the
year and its maiden interim dividend payment of GBP1.5m. In the
prior period, cash outflows from investing activities included the
private equity acquisition of the group and associated
financing.
The Group maintains a GBP5m committed revolving debt facility
expiring in October 2020, arranged at the time of admission and
which has since remained undrawn. At the year end, the Group's cash
position was GBP9.8m (2017: net debt GBP77.9m).
Dividends
The Board is recommending a final dividend of 3.69p per share
(2017: nil). If approved at the Annual General Meeting, the final
dividend will be paid on 12 September 2018 to shareholders on the
register on 3 August 2018.
Together with the previously paid FY18 interim dividend of 1.48p
per share, this gives a total dividend for the year of 5.17p per
share. This is consistent with the Group's stated policy of paying
dividends of approximately 50% of profits after tax, which, this
year is calculated on an adjusted basis to represent normalised
post-AIM admission earnings.
Total Shareholders' Funds
Total shareholders' funds increased to GBP83.0m (March 2017:
GBP4.5m negative reserves). The changes in equity reserves reflect
the Group's capital reorganisation on admission to AIM, the
retained loss after tax for the year, currency movements on
overseas asset values, equity settled consideration and the payment
of the interim dividend.
Risk Management and the Year Ahead
Risk is managed actively and closely across our geographical
business operations to individual materiality. Risk management is
embedded within all aspects of the organisation and any principal
Group risks will be identified to, discussed and monitored at Board
level. Macro-economic and end-market conditions are subject to
change and are reviewed regularly. Alpha has a set of core company
values, adopted internationally, which reflects the Group's ethical
and responsible approach to business. The Board has considered all
of the above factors in its review of going concern and has been
able to conclude the review satisfactorily.
The Group has delivered a strong financial performance and ends
the year with a robust balance sheet which positions it well for
the year ahead.
John Paton
Chief Financial Officer
(4) Pro forma adjusted earnings per share is calculated by
dividing the adjusted profit after tax by the weighted average
number of ordinary shares in issue since admission to trading on
AIM
(5) Adjusted cash conversion is net cash from operating
activities divided by adjusted operating profit
Consolidated statement of comprehensive income
For the year ended 31 March 2018
Period
Year ended ended
31 March 31 March
2018 2017
Note GBP'000 GBP'000
Continuing operations
Revenue 2 66,009 49,240
Cost of sales (40,748) (32,515)
---------- ---------
Gross profit 25,261 16,725
Administration expenses (16,703) (12,721)
Operating profit 3 8,558 4,004
Depreciation 297 289
Adjusting items 4 5,078 3,951
Adjusted EBITDA* 4 13,933 8,244
------------------------------------ ------ ---------- ---------
Finance income 7 - 5
Finance expense 7 (7,059) (7,880)
Profit/(loss) before tax 1,499 (3,871)
Taxation 8 (1,941) (537)
Loss for the year/period (442) (4,408)
---------- ---------
Exchange differences on translation
of foreign operations (186) (224)
Total comprehensive expense
for the year/period (628) (4,632)
========== =========
Basic earnings/(losses) per
ordinary share (p) 11 (0.49) (5.52)
Diluted earnings/(losses) per
ordinary share (p) 11 (0.49) (5.52)
Pro forma adjusted basic earnings
per ordinary share (p)** 11 9.77 7.75
Pro forma adjusted diluted earnings
per ordinary share (p)** 11 9.77 7.75
* Adjusted EBITDA is operating profit before interest, tax,
depreciation, amortisation and other adjusting non-operational
costs including acquisition costs, AIM admission costs,
restructuring costs, earn-out costs and share based payment
charges.
** Pro forma adjusted earnings per share for FY18 is calculated
by dividing the adjusted PAT by the weighted average number of
ordinary shares in issue from AIM admission during the year.
Consolidated statement of financial position
As at 31 March 2018
Period
Year ended ended
31 March 31 March
2018 2017
Note GBP'000 GBP'000
Assets
Non-current assets
Goodwill 12 52,626 51,529
Intangible fixed assets 12 22,913 23,213
Property, plant and equipment 14 397 451
Total non-current assets 75,936 75,193
Current assets
Trade and other receivables 15 21,242 12,087
Cash and cash equivalents 16 9,774 8,023
---------- ---------
Total current assets 31,016 20,110
---------- ---------
Current liabilities
Trade and other payables 17 (20,302) (10,024)
---------- ---------
Total current liabilities (20,302) (10,024)
---------- ---------
Net current assets 10,714 10,086
Non-current liabilities
Borrowings 18 - (85,879)
Deferred tax provision 9 (3,401) (3,946)
Other non-current liabilities 18 (277) -
Total non-current liabilities (3,678) (89,825)
---------- ---------
Net assets/(liabilities) 82,972 (4,546)
Equity
Issued share capital 19 77 -
Share Premium 89,396 86
Retained earnings (6,358) (4,408)
Other reserves 267 -
Foreign exchange reserve (410) (224)
Total Shareholders' equity 82,972 (4,546)
Consolidated statement of cash flows
For the year ended 31 March 2018
Period
Year ended ended
31 March 31 March
2018 2017
GBP'000 GBP'000
Cash flows from operating activities:
Operating profit/(loss) for
the year 8,558 4,004
Depreciation of property, plant
and equipment 297 289
Amortisation of intangible
fixed assets 2,383 2,488
Share-based payment charge 191 -
Acquisition related costs 241 1,463
Costs relating to the IPO 1,621 -
Operating cashflows before
movements in working capital 13,291 8,244
Working capital adjustments:
(Increase)/decrease in trade
and other receivables (8,839) (1,644)
Increase/(decrease) in trade
and other payables 8,107 970
Tax paid (1,222) (1,707)
---------- ---------
Net cash generated from operating
activities 11,337 5,863
Cash flows from investing activities:
Interest received - 5
Acquisition of subsidiary (1,941) (77,790)
Costs relating to the IPO (892) -
Costs relating to acquisitions (242) (1,463)
Capital expenditure (243) (199)
Net cash used in investing
activities (3,318) (79,447)
Cash flows from financing activities:
Issue of ordinary share capital 34,348 86
Repayment of borrowings (33,602) (1,540)
New borrowings - 83,829
Interest paid (1,431)
Investor loan note interest (5,469) -
Repayment of preference shares - (95)
Dividends paid (1,508) -
---------- ---------
Net cash used in financing
activities (6,231) 80,849
---------- ---------
Net increase in cash and cash
equivalents 1,788 7,265
---------- ---------
Cash and cash equivalents at
beginning of the period 8,023 -
Effect of exchange rate fluctuations
on cash held (37) 758
---------- ---------
Cash and cash equivalents at
end of the period 9,774 8,023
========== =========
Consolidated statement of changes in equity
For the year ended 31 March 2018
Share Foreign Other reserves
Capital exchange Retained
Share premium reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 22 January - - - - - -
2016
Comprehensive
income
Loss for the
period - - - - (4,408) (4,408)
Foreign exchange
differences on
translation of
foreign
operations - - (224) - - (224)
Transactions with
owners
Shares issued
(equity) - 86 - - - 86
As at 31 March
2017 - 86 (224) - (4,408) (4,546)
As at 1 April
2017 - 86 (224) - (4,408) (4,546)
Comprehensive
income
Loss for the
period - - - - (442) (442)
Foreign exchange
differences on
translation of
foreign
operations - - (186) - - (186)
Transactions with
owners
Shares issued
(equity) 77 89,310 - - - 89,387
Share based
payment reserves - - - 191 - 191
Consideration to
be settled in
equity - - - 76 - 76
Dividends - - - - (1,508) (1,508)
----------------
As at 31 March
2018 77 89,396 (410) 267 (6,358) 82,972
Share capital
Share capital represents the nominal value of share capital
subscribed.
Share premium
Share premium represents the aggregate amount or value of
premiums paid when the company's shares are issued at a premium,
net of associated share issue costs.
Foreign exchange reserve
The foreign exchange reserve represents exchange differences
which arise on consolidation from the translation of the financial
statements of foreign subsidiaries.
Retained earnings
The retained earnings reserve represents cumulative net gains
and losses recognised in the consolidated statement of
comprehensive income. This makes up our distributable reserves.
Other reserves
The other reserves represent the cumulative fair value of the
IFRS 2 share based payment charge to be recognised each year and
equity-settled consideration reserves.
Notes to the consolidated financial statements
1. Basis of Preparation and Significant Accounting Policies
The financial information set out in this financial results
announcement does not constitute statutory
accounts as defined in section 435 of the Companies Act 2006.
The consolidated statement of
comprehensive profit and loss and other comprehensive income,
consolidated statement of financial
position, consolidated statement of change in equity,
consolidated statement of cashflows and the
associated notes have been extracted from the group's financial
statements for the year ended 31 March 2018, upon which the
auditor's opinion is unqualified and does not include any statement
under section
498 of the Companies Act 2006. The statutory accounts for the
year ended 31 March 2018 will be
delivered to the Registrar of Companies following the Annual
General Meeting.
These condensed preliminary financial statements for the year
ended 31 March 2018 have been prepared
on the basis of the accounting policies adopted by the Group
upon admission to AIM. These are in
accordance with the Group's accounting policies as set out in
the historical financial information included
in the AIM Admission Document.
The recognition and measurement requirements of all
International Financial Reporting Standards
('IFRSs'), International Accounting Standards ('IAS') and
interpretations currently endorsed by the
International Accounting Standards Board ('IASB') and its
committees as adopted by the EU and as
required to be adopted by AIM listed companies have been
applied.
2. Segment information
Management has determined the operating segments by considering
the segment information that is reported internally to the chief
operating decision-maker, the Board of Directors. For management
purposes, the Group is currently organised into three geographical
operating divisions: UK, US and Europe & Asia. The Group's
operations are all consist of one type of operations - consultancy
services to the asset/wealth management industry.
31 March 2018 UK US Europe Total
& Asia
GBP'000 GBP'000 GBP'000 GBP'000
External revenue 40,020 9,036 16,953 66,009
Cost of sales (22,986) (6,353) (11,409) (40,748)
Gross profit 17,034 2,683 5,544 25,261
31 March 2017 UK US Europe Total
& Asia
GBP'000 GBP'000 GBP'000 GBP'000
External revenue 32,280 4,942 12,018 49,240
Cost of sales (19,759) (4,504) (8,252) (32,515)
Gross profit 12,521 438 3,766 16,725
During the year the Group had one customer which comprised 10.7%
of the Group's revenues. This customer is reported within both the
UK and US segments. No customer contributed more than 10% of Group
revenues in 2017.
3. Operating profit
2018 2017
GBP'000 GBP'000
Operating profit for the period
is stated after charging/(crediting):
Amortisation of intangible assets 2,383 2,488
Depreciation of plant and equipment 297 289
Net foreign exchange losses/(gains) 36 364
Operating lease rentals 673 642
Impairment provision recognised
on trade receivables 400 6
Defined contribution pension scheme
costs 189 202
Share based payments charge 191 -
Earn out & deferred consideration 391 -
Costs directly attributable to the
AIM admission 1,621 -
Acquisition costs 241 1,460
Restructuring costs 251 -
--------- ---------
2018 2017
GBP'000 GBP'000
Auditor's remuneration:
Audit fees - Parent Company 25 25
Audit fees - subsidiary companies 57 33
Tax compliance services 14 24
Tax advisory services 54 48
Other assurance services 24 12
--------- ---------
4. Reconciliation of adjusted operating profit and adjusted
EBITDA
2018 2017
GBP'000 GBP'000
Operating profit 8,558 4,004
Amortisation 2,383 2,488
Loss on disposal of fixed assets - 3
Share based payments charge 191 -
Earn out & deferred consideration 391 -
Acquisition costs 241 1,460
Restructuring costs 251 -
Costs directly attributable to the
AIM admission 1,621 -
Total adjustments 5,078 3,951
Adjusted operating profit 13,636 7,955
Depreciation of plant and equipment 297 289
Adjusted EBITDA 13,933 8,244
--------- ---------
Alpha uses alternative performance measures, including Adjusted
EBITDA, to allow a clearer understanding of the underlying
performance of the Group. Adjusted EBITDA is a commonly-used
measure in which earnings are stated before intangible asset
amortisation and depreciation, used by the Board to assess
performance; the Board considers that this alternative performance
measure is the most appropriate measure by which users of the
financial statements can assess the ongoing performance of the
Group. Adjusted EBITDA also excludes the employee share-based
payments charge to remove the inherent volatility in share-based
payment expense calculations and more closely align to the
operational activities. Note 21 sets out further details of the
employee share-based payments expense calculation under IFRS2.
As per note 13, the acquisition of TrackTwo GmbH involved
deferred consideration payments in the form of an earn-out which,
in accordance with IFRS3, will be expensed annually to 2021
dependent on the ongoing employment of the vendor. This cost has
been removed to calculate Adjusted EBITDA as, whilst it will recur
in the short-term, it represents additional payments linked to the
TrackTwo acquisition.
Other acquisition costs expensed in the current year, relating
to the TrackTwo acquisition, and in the prior period, relating to
the acquisition of Alpha FMC Group Holdings Limited, have also been
excluded from Adjusted EBITDA as they are not directly attributable
to the ongoing performance of the Group. Similarly, costs directly
attributable to the AIM admission in October 2017 have also been
excluded.
Restructuring costs relating to realigning the US operations
have been excluded from Adjusted EBITDA as they relate to a
specific restructuring programme.
5. Reconciliation to adjusted profit after tax
2018 2017
GBP'000 GBP'000
Adjusted operating profit 13,636 7,955
Tax charge (1,941) (537)
Tax impact of adjusting items (1,739) (1,229)
Adjusted profit after tax 9,956 6,189
Adjusted profit after tax is also shown to allow a clearer
understanding of the underlying performance of the Group. Adjusted
profit after tax is stated before adjusting items and their
associated tax effects.
6. Staff costs
The average number of employees employed by the group, including
executive directors, was:
2018 2017
Number Number
UK 117 97
US 32 21
Europe & Asia 73 47
Administration 23 16
245 181
Staff costs for the above persons were:
2018 2017
GBP'000 GBP'000
Wages and salaries 28,841 22,413
Social security costs 3,629 2,949
Pension costs 189 202
Share incentive plans 191 -
--------- ---------
32,850 25,564
7. Finance costs and finance income
2018 2017
GBP'000 GBP'000
Bank interest receivable - 5
========= =========
Interest payable on bank loans and
overdraft 2,858 2,363
Shareholder and management loan
note interest 2,479 5,075
Amortisation of issue costs on loan
notes 1,722 442
7,059 7,880
As part of the loan repayments on at the time of admission to
trading on AIM, loan note issue costs amortisation of GBP1.7m was
accelerated and expensed.
8. Taxation
2018 2017
GBP'000 GBP'000
Current tax
In respect of the current year 1,400 385
Adjustment in respect of prior periods (29) -
Foreign taxation 1,467 832
Deferred tax
In respect of the current year (908) (423)
Change in tax rate - (257)
Adjustment in respect of prior periods 11 -
------- -------
Total tax expense for the year 1,941 537
------- -------
Tax has been calculated using an estimated annual effective tax
rate of 19% (2017: 20%) on profit before tax.
The difference between the total tax expense shown above and the
amount calculated by applying the standard rate of UK corporation
tax to the profit before tax is as follows:
2018 2017
GBP'000 GBP'000
Profit/(loss) before taxation 1,499 (3,871)
------- -------
Tax on profit on ordinary activities
at standard UK corporation tax rate
of 19% (2017: 20%) 285 (774)
Effects of:
Fixed asset differences 4 -
Expenses not deductible for taxation 902 1,493
Income not taxable for tax purposes (81) -
Differences due to overseas tax
rates 757 499
Adjustments in respect of prior
periods (29) -
Adjustments in respect of prior
periods - deferred tax 11 -
Change in deferred tax rate 106 (681)
Deferred tax not recognised (14) -
Total tax expense for the year 1,941 537
------- -------
9. Deferred tax
2018 2017
GBP'000 GBP'000
At 1 April 3,946 4,627
Arising on business combinations 352 -
Charged to the statement of profit
or loss (897) (681)
Charged directly to other comprehensive - -
income
Charged directly to equity - -
At 31 March 3,401 3,946
------- -------
The UK Government has announced future tax changes to the
corporation tax rate. These changes resulted in a decrease in the
standard rate of corporation tax to 20% for the 2016/17 tax year,
falling to a rate of 19% for the 2017/18, 2018/19 and 2019/20 tax
years and eventually culminating in a rate of 17% by 2020/21.
As at 31 March 2018 all such changes have been substantively
enacted and have therefore been reflected in the calculation of
deferred tax for the year ended 31 March 2018.
Movements in deferred 1 April Recognised Amount 31 March
tax during the year 2017 in income arising 2018
on acquisition
GBP'000 GBP'000 GBP'000 GBP'000
Accelerated capital allowances - 20 - 20
Arising on business combinations 3,946 (917) 352 3,381
3,946 (897) 352 3,401
-------- ---------- --------------- --------
10. Dividends
Amounts recognised as distributions 2018 2017
to equity holders:
GBP'000 GBP'000
Interim dividend for the year ended
31 March 2018 of 1.48p (2017: 0p)
per share 1,508 -
Proposed final dividend for the
year ended 31 March 2018 of 3.69p
(2017: 0p) per share 3,757 -
------- -------
The proposed final dividend is subject to approval by the
shareholders at the AGM and has not been included as a liability in
these financial statements.
11. Earnings/(loss) per share
The Group presents basic and diluted earnings per share ('EPS')
data, both adjusted and non-adjusted for its ordinary shares. Basic
EPS is calculated by dividing the profit or loss for the period
attributable to ordinary shareholders by the weighted normalised
average number of ordinary shares outstanding during the period.
Potential ordinary shares are only treated as dilutive when their
conversion to ordinary shares would decrease EPS (or increase loss
per share).
In order to reconcile to the adjusted profit for the financial
period, the same adjustments as in notes 4 and 5 have been made to
the Group's loss for the financial period. The profits/(losses) and
weighted average number of shares used in the calculations are set
out below:
Year ended Period
31 March ended
2018 31 March
Basic & diluted EPS 2017
(Loss) for the financial year/period
used in calculating basic and
diluted EPS (GBP'000) (442) (4,408)
Weighted average number of ordinary
shares in issue 90,185 79,842
Basic EPS (p) (0.49) (5.52)
Diluted EPS (p) (0.49) (5.52)
---------- ---------
Pro Forma Adjusted EPS
Adjusted profit for the financial
year/period used in calculating
adjusted basic and diluted EPS
(note 5) (GBP'000) 9,956 6,189
Weighted average number of ordinary
shares in issue 101,860 79,842
Proforma adjusted EPS (p) 9.77 7.75
Proforma adjusted diluted EPS
(p) 9.77 7.75
---------- ---------
Loss per share is calculated based on the share capital of
Company and the earnings of the Group.
As explained, the Group's consolidated financial statements
reflect the continuation of the pre-existing group previously
headed by Alpha FMC Topco Limited. To aid comparability following
the Group's reconstruction and share reorganisation, the 79,841,931
ordinary shares held by original Shareholders immediately before
the AIM admission has been used to best indicate the share capital
in existence before the AIM admission and provide earnings
information on a consistent basis. Similarly, in the pro forma
adjusted EPS and pro forma adjusted diluted EPS calculations, to
allow comparability between periods, the weighted average number of
shares in issue only considers the shares in issue at and since
admission to trading on AIM and 2017 considers the shares in issue
immediately prior to the AIM admission.
There were no potentially dilutive ordinary shares for the
period ended 31 March 2017. No dilution has been applied in
accordance with accounting standards in 2017.
12. Goodwill and Intangible fixed assets
Goodwill
31 March 31 March
2018 2017
GBP'000 GBP'000
Cost at beginning of the year/period 51,529 -
Additions 1,097 51,529
Cost at end of the year/period 52,626 51,529
======== ========
Goodwill represents the excess of the cost of an acquisition
over the fair value of the Group's share of the net identifiable
assets of the acquired subsidiary at the date of acquisition.
Goodwill was recognised upon the acquisition of Alpha FMC Group
Holdings Limited by Alpha Financial Markets Consulting plc on 3
February 2016 and is the difference between the consideration paid
and the fair value of assets acquired and liabilities assumed.
During the current year goodwill increased reflecting the acquired
goodwill arising on the acquisition of TrackTwo. Goodwill acquired
and liabilities assumed represent the potential synergy benefits of
combining the Alpha and TrackTwo intellectual property and talents
of the team into the Group. In line with IAS 36, the carrying value
of goodwill is not subject to systematic amortisation but is
reviewed at least annually for impairment. The review assesses each
cash-generating unit ('CGU') to which goodwill has been allocated
for impairment by comparing the carrying amount of the unit,
including the goodwill, with the recoverable amount of the unit.
The impairment reviews completed have calculated the recoverable
amount of goodwill through a Value in Use calculation.
The cash generating units that have been considered are UK, US
and Europe & Asia, in line with our operating segments and the
goodwill allocated to the CGU's as follows:
31 March 31 March
Goodwill by cash-generating unit 2018 2017
GBP'000 GBP'000
UK 31,241 31,241
USA 7,054 7,054
Europe & Asia 14,331 13,234
At end of the year/period 52,626 51,529
======== ========
In considering this position, the estimated adjusted weighted
average cost of capital ('WACC') for the Group was determined to be
11.6% (2017: 12.5%). This discount rate has been applied to the
Group's future cash flow forecasts in order to make this assessment
at each balance sheet date.
Revenues and gross margins have continued at the rate projected,
with limited customer attrition, no significant change in the
competitor landscape, no negative events impacting on the Group's
brand or reputation and no legal or regulatory changes impacting
the Group's offering. There are no other aspects of the key
business objectives that have not been met. The recoverable amounts
of all CGUs are based on the same key assumptions.
The Directors do not therefore believe there to be any
impairment indicators.
As in the prior period, the base actuals have been inflated by
10% up to year 3 and by 1% then onwards, for each cash generating
unit, which management believe does not exceed the long-term
average growth rate for the industry, with a terminal value
calculated on a perpetuity basis.
These cash flows are discounted at a post-tax discount rate of
11.6% and adjusted for specific risk factors that take into account
the sensitivities of the projection. The Group has conducted a
sensitivity analysis on the impairment test for all cash generating
units individually. If the assumed growth rate was reduced to 0%,
the receivable amount for each cash generating unit would remain
greater than their carrying values. Further
increasing the post-tax discount rate to 13.5% resulted in
positive headroom remaining for all cash generating units compared
to the carrying value of goodwill.
Intangible fixed assets
As at 31 March 2018
Customer Intellectual Trade Total
relationships property name
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At the start of the
year 18,650 1,421 5,630 25,701
Recognised on acquisitions
(see note 13) 1,418 665 - 2,083
-------------- ------------ ------- -------
At the end of the
year - total 20,068 2,086 5,630 27,784
-------------- ------------
Amortisation
At the start of the
year (1,813) (237) (438) (2,488)
Charge for the year (1,629) (262) (492) (2,383)
-------------- ------------ ------- -------
At the end of the
year - total (3,442) (499) (930) (4,871)
-------------- ------------ ------- -------
Net book value 16,626 1,587 4,700 22,913
-------------- ------------ ------- -------
As at 31 March 2017
Customer Intellectual Trade Total
relationships property name
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At the start of the - - - -
period
Recognised on acquisitions 18,650 1,421 5,630 25,701
-------------- ------------ ------- -------
At the end of the
period - total 18,650 1,421 5,630 25,701
-------------- ------------
Amortisation
At the start of the - - - -
period
Charge for the period (1,813) (237) (438) (2,488)
-------------- ------------ ------- -------
At the end of the
period - total (1,813) (237) (438) (2,488)
-------------- ------------ ------- -------
Net book value 16,837 1,184 5,192 23,213
-------------- ------------ ------- -------
Customer relationships
Customer relationships represent the fair value
at the 3 February 2016 acquisition date of the customer
relationships which were owned by, but not previously
recognised as assets of, Alpha FMC Group Holdings
Limited. The fair value has been determined by applying
the 'multi-period excess earnings' method to the
cash flows expected to be earned from customer relationships.
The key management assumptions are around forecast
revenues, operating margins, discount factors and
contributory asset charges used.
Additions during the period represent the fair value
of the customer relationships acquired with Track
Two GmbH. Refer to note 13 for details.
A useful economic life of 12 years has been deemed
appropriate based on the average realisation rate
of cumulative cash flows and benchmarked data and
projected cash flows have been discounted over this
period. The amortisation charge is recognised in
administrative expenses within the statement of
comprehensive income. There are 9.8 years and 10.3
years remaining to be amortised for the customer
relationships in relation to Alpha FMC Group Holdings
Limited and TrackTwo respectively.
Intellectual property
Opening intellectual property represents the fair
value at the 3 February 2016 acquisition date of
the intellectual property which was owned by, but
not previously recognised as assets of, Alpha FMC
Group Holdings Limited.
The fair value has been determined by applying the
'relief from royalty' method to the cash flows earned
from the intellectual property. The key management
assumptions are around growth forecasts, discount
factors and royalty percentage utilised. A useful
economic life of 7 years has been deemed appropriate
based on previous acquisitions and benchmarking
data and projected cash flows have been discounted
over this period.
Additions during the period represent the fair value
of the intellectual property acquired from Track
Two GmbH. Refer to note 13 for details.
The amortisation charge is recognised in administrative
expenses within the statement of comprehensive income.
There are 4.8 years and 6.3 years remaining to be
amortised for the intellectual property in relation
to Alpha FMC Group Holdings Limited and TrackTwo
respectively.
Trade name
Trade name represents the fair value at the 3 February
2016 acquisition date of the trade name which was
owned by, but not previously recognised as assets
of, Alpha FMC Group Holdings Limited.
The fair value has been determined by applying the
'relief from royalty' method to the cash flows earned
from the trade name. The key management assumptions
are around growth forecasts, discount factors and
royalty percentage utilised. A useful economic life
of 15 years has been deemed appropriate based on
benchmarking reviews and projected cash flows have
been discounted over this period.
Additions during the period represent the fair value
of the trade name acquired from Track Two GmbH.
Refer to note 13 for details.
The amortisation charge is recognised in administrative
expenses within the statement of comprehensive income.
There are 12.8 years and 14.3 years remaining to
be amortised for the trade name in relation to Alpha
FMC Group Holdings Limited and TrackTwo respectively.
13. Acquisitions and disposal of business
Acquisitions in the current year
On 18 July 2017, the Group acquired 100% of the share capital
and voting interest of TrackTwo GmbH for an upfront cash
consideration of EUR 2,331,610, deferred consideration EUR
1,166,200 payable in January 2019 and 695 consideration shares in
the Company with a fair value of GBP1 per share.
This acquisition has been accounted for under the acquisition
method of accounting. The fair value adjustments relate to the
identification of separately identifiable intangibles and
associated deferred tax liabilities. For the remaining assets and
liabilities acquired no fair value adjustments were identified. The
table below sets out the book and fair values of the identifiable
assets and liabilities acquired. Goodwill represents the excess of
the cost of the acquisition over the fair value of the Group's
share of the net identifiable assets of the acquired subsidiary at
the date of acquisition.
Fair value Values
Book values Adjustments on acquisition
GBP'000
GBP'000 GBP'000
TrackTwo net assets at the
acquisition date:
Tangible fixed assets 9 - 9
Customer relationships - 1,418 1,418
Intellectual property - 665 665
Trade and other debtors 316 - 316
Cash 108 - 108
Trade and other creditors (195) - (195)
Deferred tax liability - (352) (352)
Net identifiable assets
and liabilities acquired 238 1,731 1,969
============= ============ ===============
Cash consideration relating
to business combination 3,066
Goodwill on acquisition
(see note 12) 1,097
===============
In addition, as part of the purchase negotiations, the Company
has put in place an annual earn-out arrangement and a final
ownership consideration based on the financial performance of the
TrackTwo over the three year period to July 2020 subject to
continuous employment of vendor until July 2020.
The earn-out and final ownership consideration payments have
been estimated by the Directors based on anticipated future
earnings and discounted to current values. An expense of GBP391,000
has been recognised in the current year and presented as an
adjusted expense (see note 4). This consists of GBP38,000 payable
within one year, GBP277,000 to be settled after one year and
GBP76,000 to be settled in equity.
If the acquisition of TrackTwo had been completed on 1 April
2017, Group revenues for the period would have been GBP66,263,000
and Group profits before tax would have been GBP2,202,000. TrackTwo
contributed GBP926,000 to the Group's revenue and GBP377,000 to the
Group's profit before tax for the period from the date of
acquisition to the year-end date.
Acquisitions in the prior period
On 3 February 2016, the Group acquired 100% of the ordinary
shares in Alpha FMC Group Holdings Limited for GBP85,669,000. This
amount included GBP48,914,000 satisfied by cash, settlement of
existing debt of GBP33,045,000, the issue of equity of GBP86,000,
and acquisition costs of GBP3,624,000 (of which GBP1,460,000 were
directly related to the business combination and GBP2,164,000 were
related to the raising of loan financing). Consequently, the
cashflow associated with the acquisition, net of cash acquired of
GBP5,905,000, was GBP79,764,000. This acquisition has been
accounted for under the acquisition method of accounting. The
resulting goodwill of GBP51,529,000 was capitalised. The table
below sets out the book and fair values of the identifiable assets
and liabilities acquired.
Effect of acquisition
The acquisition had the following effect on the Group's assets
and liabilities:
Fair value Values
Book values adjustments on acquisition
GBP000
Acquiree's net assets at
the acquisition date:
Goodwill 24,765 (24,765) -
Tangible fixed assets 541 - 541
Intangible assets - 25,701 25,701
Trade and other debtors 10,443 - 10,443
Cash 5,905 - 5,905
Interest-bearing loans and
borrowings (33,045) - (33,045)
Trade and other creditors (7,448) - (7,448)
Deferred tax liabilities - (5,140) (5,140)
------------- ------------ ---------------
Net identifiable assets
and liabilities acquired 1,161 (4,204) (3,043)
============= ============ ===============
lnternal cash consideration
relating to business combination 48,914
Equity instruments issued 86
IFRS adjustments (514)
Total consideration 48,486
===============
Goodwill on acquisition
(see note 12) 51,529
===============
The fair value adjustments relate to the identification of
separately identifiable intangibles, the reversal of the goodwill
already recognised in the acquired group on consolidation and
deferred tax on the fair values of the intangibles. For the
remaining assets and liabilities acquired no fair value adjustments
were identified.
The IFRS adjustment relates to the revaluation of the deferred
tax liability to fair value, based on the revised expected future
tax rate at the end of the period.
The settlement of debt of GBP33,045,000 has been included in
cash flows from investing activities in the cash flow statement as
part of the acquisition of subsidiaries.
14. Tangible fixed assets
As at 31 March 2018
Leasehold Fixtures, Computer Total
improvements fittings equipment
and equipment
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 22 January 2016 - - - -
Acquired through
business combinations 208 126 678 1,012
Additions - 66 101 167
Disposals - - (9) (9)
------------- -------------- ---------- -------
At 31 March 2017 208 192 770 1,170
Acquired through
business combinations - 7 7 14
Additions - 57 197 254
Disposals - - (20) (20)
At 31 March 2018 208 256 954 1,418
Depreciation
At 22 January 2016 - - - -
Acquired through
business combinations (81) (56) (293) (430)
Charge for the period (34) (122) (140) (296)
Disposals - - 7 7
At 31 March 2017 (115) (178) (426) (719)
Acquired through
business combinations - (2) (3) (5)
Charge for the period (37) (43) (221) (301)
Disposals - - 4 4
At 31 March 2018 (152) (223) (646) (1,021)
Net book value at
31 March 2018 56 33 308 397
Net book value at
31 March 2017 93 14 344 451
------------- -------------- ---------- -------
There are no assets held on finance leases.
15. Trade and other receivables
2018 2017
Amounts due within one year: GBP'000 GBP'000
Trade receivables 18,297 9,490
Less: provision for impairment (446) (46)
-------- --------
Trade receivables - net 17,851 9,444
Other debtors 55 454
Prepayments and accrued income 3,336 2,189
-------- --------
Total amounts due within one year: 21,242 12,087
======== ========
Trade receivables are non-interest bearing and generally have a
30 - 90 day term. Due to their short maturities, the carrying
amount of trade and other receivables is a reasonable approximation
of their fair value.
A provision for impairment of trade receivables is established
when there is objective evidence that the group will be unable to
collect all amounts due according to the original terms. The Group
considers factors such as default or delinquency in payment,
significant financial difficulties of the receivable and the
probability that the debtor will enter bankruptcy in deciding
whether the trade receivable is impaired.
Provision for impairment of trade debtors
2018 2017
GBP'000 GBP'000
At 1 April 46 40
Charge for the period 400 6
Uncollected amounts written off, - -
net of recoveries
As at 31 March 446 46
======= =======
At the year end the following trade receivables were overdue but
not impaired:
2018 2017
GBP'000 GBP'000
Not yet due 14,873 8,839
Between 1 and 3 months 1,343 457
Over 3 months 1,635 148
As at 31 March 17,851 9,444
======== =======
16. Cash and cash equivalents
2018 2017
GBP'000 GBP'000
Cash in bank and at hand 9,774 8,023
Cash and cash equivalents per cash
flow statement 9,774 8,023
------- -------
17. Trade and other payables
2018 2017
GBP'000 GBP'000
Secured bank loans - 1,245
Trade creditors 2,361 1,334
Accruals and deferred income 11,404 5,433
Taxation and social security 2,428 1,607
Corporation tax 1,826 209
Other creditors 2,245 196
Earn out provision (note 13) 38 -
Total amounts owed within one year: 20,302 10,024
-------- --------
Trade payables comprise amounts outstanding for trade purchases
and on-going costs. The average credit period taken for trade
purchases is 30 days (2017: 30 days). No interest is charged on the
outstanding balance.
The Directors consider that the carrying amount of trade and
other payables is a reasonable approximation of their fair
value.
Included within other creditors is an amount of EUR1,166,200 of
deferred consideration relating to the acquisition of TrackTwo (see
note 13).
18. Non-current liabilities
31 March 31 March
2018 2017
GBP'000 GBP'000
Dunedin loan notes - 44,911
Bank loans and overdrafts - 24,815
Management loan notes - 14,806
Management preference shares - 1,347
Deferred tax provision (note
9) 3,401 3,946
Other non-current liabilities 277 -
3,678 89,825
Dunedin loan notes
Dunedin Buyout LLP invested GBP41,137,000 of ordinary 'A' loan
notes in Alpha FMC Midco Limited on 3 February 2016. The loan notes
were converted to ordinary equity shares on at the time of the AIM
admission for 29,241,568 shares.
Bank loans and overdrafts
As at 31 March 2017, Alpha FMC Bidco Limited had a Mezzanine
Facility of GBP7,317,000 with Beechbrook Capital LLP. In addition,
Alpha FMC Bidco Limited had a loan 'A' of GBP9,460,000 and a loan
'B' of GBP11,000,000 both with Lloyds Bank Plc.
The bank loans were repaid on 12 October 2017 from the proceeds
of The AIM admission
In October 2017 the Group entered into a committed revolving
credit facility of GBP5,000,000 with Lloyds Bank Plc. Interest on
drawings is based on LIBOR plus 2.25%. As at 31 March 2018 the
facility remained undrawn.
Management loan notes
UK, French and US management invested GBP12,362,087 of ordinary
'B1', 'B2', 'C1', 'C2' and 'D' loan notes in Alpha FMC Topco
Limited on 3 February 2016. The loan notes were converted to
ordinary equity shares at the time of the AIM admission for
4,383,585 shares.
Preference shares
On 3 February 2016, management invested GBP1,322,000 of
preference shares in Alpha FMC Topco Limited.
The preference shares were converted to ordinary equity shares
at the time of the AIM admission for 784,461 shares.
Other non-current liabilities
Included within trade and other payables is GBP277,000 of costs
associated with the earn-out payments associated with the
acquisition of TrackTwo (see note 13).
19. Called up share capital
2018 2017
Number Number
Alloted, called up and fully paid
Class
Ordinary 'A' GBP0.00001 shares (1
vote per share capped at 55%) - 58,898
Ordinary 'B1' GBP0.00001 shares
(no voting rights) - 9,564
Ordinary 'B2' GBP0.00001 shares
(no voting rights) - 7,120
Ordinary 'C1' GBP0.00001 shares
(no voting rights) - 5,390
Ordinary 'C2' GBP0.00001 shares
(no voting rights) - 5,155
Ordinary 'D' GBP0.00001 shares (5%
per share) - 9
Ordinary 0.00075 shares (1 vote
per share) 101,859,583
----------- ------
101,859,583 86,136
2018 2017
GBP GBP
Alloted, called up and fully paid
Class
Ordinary 'A' GBP0.00001 shares (1
vote per share capped at 55%) - 0.58
Ordinary 'B1' GBP0.00001 shares
(no voting rights) - 0.09
Ordinary 'B2' GBP0.00001 shares
(no voting rights) - 0.07
Ordinary 'C1' GBP0.00001 shares
(no voting rights) - 0.05
Ordinary 'C2' GBP0.00001 shares
(no voting rights) - 0.05
Ordinary 'D' GBP0.1 shares (5% per
share) - 0.90
Ordinary GBP 0.00075 shares (1 vote
per share) 76,394.69 -
--------- ------
76,394.69 1.74
Movements in share capital during
the year ended 31 March 2018:
Balance at 1 April 2017
86,136 ordinary shares of GBP0.00001
each 2
Issue of shares (i) 1
Bonus issue (ii) 4,995
------
Balance prior to reorganisation 4,998
Share capital reorganisation (iii) 54,884
Issue of shares (iv) 16,513
JSOP share award (v) 281
Balance at 31 March 2018 76,676
(i) Prior to the AIM admission, a series of small share issues
were made, totalling 13,810 shares of GBP0.00001 each, ahead of the
larger capital reorganisation on admission to trading on AIM.
Additionally, shares were issued as part settlement of the TrackTwo
acquisition.
(ii) On 2 October 2017, each holder of equity shares in the
capital of the Company was issued 4,999 bonus shares (credited as
fully paid) for each existing share held, resulting in the issue of
499,530,108 shares.
(iii) Immediately prior to the AIM admission, on 11 October
2017, all classes of ordinary equity share capital in issue
(including shares issued on conversion of loan notes and preference
shares, A shares, B1 shares, B2 shares, C1 shares, C2 shares, and D
shares) were consolidated and converted to ordinary shares of
GBP0.00075 each as part of the capital reorganisation on admission
to trading on AIM. The issued share capital of the Company after
this capital restructuring was GBP59,881.45 comprising of
79,841,931 ordinary shares.
(iv) On admission to trading on AIM, the Company issued a
further 22,017,652 ordinary shares which were allotted in
connection with the placing. Immediately following Admission, the
Company's issued share capital was GBP76,394.69, comprising of
101,859,583 ordinary shares of GBP0.00075 each (all of which is
fully paid or credited as fully paid).
(v) Since the AIM admission, 375,000 shares have been issued as
JSOP awards to management. At 31 March 2018, the total number of
shares in issue was 102,234,583.
20. Reconciliation of liabilities arising from financing
activities
2017 Cashflows Non-cash 2018
changes
GBP'000 GBP'000 GBP'000 GBP'000
Dunedin loan
notes 44,911 - (44,911) -
Secured bank
loans 1,245 (1,245) -
Bank loans
and overdrafts 24,815 (24,815) - -
Management
loan notes 14,806 (7,542) (7,264) -
Management
preference
shares 1,347 - (1,347) -
87,124 (33,602) (53,522) -
As part of the capital restructuring immediately prior to the
AIM admission, the loan notes and preference shares outstanding
were partly converted into equity comprising 34,409,614 ordinary
shares. The remaining loan notes, preference shares and bank loans
were repaid from the proceeds of the AIM admission.
21. Share based payments
The Management Incentive Plan ('MIP')
The Group has a MIP designed to retain and incentivise the
Executive Directors and selected key employees. The MIP consists of
four parts, part A of which will enable the granting of enterprise
management incentive and non-tax advantaged options to acquire
Shares, part B of which will enable the awarding of joint ownership
interests in Shares ('JSOP'), and part C of which will enable the
awarding of restricted stock units for participants in the US, and
Part D of which will enable the awarding of RSUs in France
(together the 'Options').
Options granted to the Executive Directors are subject to the
fulfilment of performance conditions including (a) the Group to
achieve its initial IPO market consensus estimate for adjusted
earnings per share ("EPS") for the financial year ending 31 March
2018, (b) the Group to achieve a total shareholder return for the
three years from Admission in excess of the average total
shareholder return of a peer group of comparable companies, and (c)
the Group to achieve between 10 or 15 percent EPS growth for the
financial year ending 31 March 2019. Assuming conditions (a) and
(b) are met 100 percent of the Options or Awards will vest, if EPS
for the financial year ending 31 March 2019 exceeds the EPS for the
year ending 31 March 2018 by 15 percent; 66 percent will vest if
EPS for the financial year ending 31 March 2019 exceeds the EPS for
the year ending 31 March 2018 by 10 percent. There will be a
straight line of vesting if EPS for the year ending 31 March 2019
exceeds the EPS for the year ending 31 March 2018 by between 10
percent and 15 percent.
Options granted to selected senior management and employees on
Admission will be subject to performance condition (b) above and
such conditions determined by the Remuneration Committee as being
appropriate to their personal role and objectives.
MIP awards have either nil exercise price payable (or there
shall be no more than a nominal purchase price payable) in order to
acquire Shares pursuant to Options. MIP awards have either 3 or 4
year vesting periods from the date of grant and can be equity
settled only.
The Employee Incentive Plan ('EIP')
In addition to the MIP, as stated in the AIM Admission Document,
the Board intends to put in place a medium term Employee Incentive
Plan ("EIP"). Under the EIP, a broad base of the Group's employees
will be granted share options or share awards over a small number
of shares. The EIP will be structured as is most appropriate under
the local tax, legal and regulatory rules in the key jurisdictions
and therefore may vary between those jurisdictions.
At 31 March 2018 a total of 2,977,775 share option and award
grants had been made to employees (2017: nil).
Details of the share based payments made are as follows:
2018
Number of Weighted
share options average
exercise
price
Outstanding at
the beginning - -
of the year
Granted during 2,977,775 -
the year
Exercised during - -
the year
Forfeited during - -
the year
Expired during - -
the year
--------------- ----------
Outstanding at 2,977,775 -
the year end
Exercisable at - -
the year end
No shares were exercisable in the year.
The options outstanding at 31 March 2018 had a weighted average
remaining contractual life of 3 years and a nil or nominal exercise
price.
During the year ended 31 March 2018, options were granted on 11
October 2017, 2 March 2018 and 27 March 2018 to certain senior
management. The weighted average of the estimated fair values of
the options outstanding is GBP0.69 per share. No options were
granted in previous years.
The value of the options has been measured by the use of the
Monte Carlo Option Pricing Model. The model simulates a variety of
possible results, across 10,000 iterations for each of the options,
by substituting a range of values for any factor that has inherent
uncertainty over a number of scenarios using a different set of
random values from the probability functions. The model takes any
market-based performance conditions into account and adjusts the
fair value of the options based on the likelihood of meeting the
stated vesting conditions.
The inputs into the model were as follows:
2018
GBP'000
Weighted average
share price at grant
date 1.60
Exercise price -
Volatility 30%
Weighted average
vesting period 3
Risk free rate 0.53%
Expected dividend
yield 3.00%
Expected volatility was determined by calculating the historic
volatility of the market the Group operates in. The expected
expense calculated in the model has been adjusted, based on
management's best estimate, for the effects of non-market based
performance conditions and employee attrition.
The options outstanding which have time vesting criteria only
were valued using a Black-Scholes model using the same inputs as
above.
The Group recognised a total expense of GBP191,000 related to
equity-settled share-based payment transactions in the current year
(2017: GBPnil).
22. Operating lease commitments
At 31 March 2018, the Group has lease agreements in respect of
properties and equipment for which the payments extend over a
number of years. The future minimum lease payments under
non-cancellable leases are as follows:
2018 2017
Due: GBP'000 GBP'000
Within one year 452 498
Within two to five years 1,621 1,377
After five years 751 891
2,824 2,766
------- -------
23. Financial instruments
Carrying amount of financial instruments
The carrying amounts of the financial assets and liabilities
include:
2018 2017
GBP'000 GBP'000
Assets measured at amortised cost 27,625 17,467
Liabilities measured at amortised
cost (3,326) (88,458)
The book value of the financial instruments is deemed to be
approximate to fair value.
The Group's financial instruments comprise cash and cash
equivalents, items such as trade payables and trade receivables
which arise directly from its operations and in prior years bank
borrowings. These financial instruments arise in the ordinary
course of business and their main purpose is to provide finance for
the Group's operations.
The Group's operations expose it to a variety of financial risks
including credit risk, liquidity risk, interest rate risk, and
foreign currency exchange rate risk. Given the size of the Group,
the directors have not delegated the responsibility of monitoring
financial risk management to a sub-committee of the board. The
policies set by the board of directors are implemented by the
Company's finance department.
Credit risk
The Group's credit risk is primarily attributable to its trade
receivables. The Group has implemented policies that require
appropriate credit checks on potential customers before sales are
made.
Interest rate risk
The Group has interest-bearing assets and previously
interest-bearing liabilities. Interest-bearing assets comprise only
cash and cash equivalents which earn interest at a variable rate.
The Group historically had a policy of maintaining debt at fixed
rates to ensure certainty of future interest cash flows and will
reconsider were the Group to re-incur indebtedness. The directors
will revisit the appropriateness of this policy should the Group's
operations change in size or nature. The Group has no derivative
transactions outstanding at 31 March 2018. As at 31 March 2018,
given the low levels of interest earned on these balances, if LIBOR
had increased or decreased by 0.5% the effect on post-tax profit
and equity would have been minimal.
The Group's cash and cash equivalents earned interest at a
variable rate during the year.
Details of the terms of the Group's prior borrowings are
disclosed in notes 17 and 18.
Liquidity risk
The Group maintains a committed RCF alongside its cash balances
designed to ensure it has sufficient available funds for operations
and planned expansions. The Group monitors its levels of working
capital to ensure that it can meet its debt repayments as they fall
due.
Foreign currency exchange rate risk
The Group is exposed to foreign currency exchange rate risk
mainly as a result of trade receivables and payables which will be
settled in Euros and US Dollars. During the year the Group did not
enter into any arrangements to hedge this risk, as the Directors
did not consider the exposure to be significant given the
short-term nature of the balances. The Group will review this
policy as appropriate in the future.
GBP Euro USD CHF SGD HKD
'000 '000 '000 '000 '000 '000
Receivables 12,368 3,033 3,016 565 434 -
Cash 4,736 3,858 1,513 81 921 26
Payables (1,700) (472) (308) (35) (2) -
Total 15,404 6,419 4,221 611 1,353 26
24. Capital risk management
The Group defines capital as being share capital plus all
reserves, which amounted to GBP82,972,000 as at 31 March 2018
(2017: GBP(4,546,000)). The Group currently holds net cash
balances. The Board of Directors monitors the level of capital as
compared to the Group's requirements. The Group is not subject to
any externally imposed capital requirements.
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and maintain an optimal capital
structure to reduce the cost of capital.
The Group defines capital as being share capital plus all
reserves, which amounted to GBP82,972,000 as at 31 March 2018
(2017: GBP(4,546,000)). The Board of Directors monitors the level
of capital as compared to the Group's long term debt commitments
and adjusts the ratio of debt to capital as is determined to be
necessary, by issuing new shares, reducing or increasing debt,
paying dividends and returning capital to shareholders.
25. Related party disclosures
Transactions with directors
Transactions with directors, or entities in which a director is
also a director or partner:
Year ended Year ended
31 March 31 March
2018 2017
GBP'000 GBP'000
Consultancy services provided
by a director - Mr T Trotter 23 20
---------- ----------
Key management, being the Board of Directors, held both loan
notes and preference shares in the Group. At 31 March 2018,
management loan notes totalled GBPnil (2017: GBP14,806,000) and
management preference shares totalled GBPnil (2017: GBP1,347,000).
Further details are provided in note 20.
Transactions with shareholders
In the period ended 31 March 2018, the Group paid monitoring
fees of GBPnil (2017: GBP261,000) to Dunedin LLP, a major
shareholder of the Company prior to the AIM admission. At 31 March
2018, loan notes due to Dunedin totalled GBPnil (2017:
GBP44,911,000). Further details around the nature of these
instruments are provided in note 20.
26. Ultimate controlling party
At the year end there is no ultimate controlling party.
27. First time adoption of IFRS
As stated in note 1, these are the Group and Company's first
financial statements prepared in accordance with IFRS.
The accounting policies set out in note 1 have been applied in
preparing the financial statements for the year ended 31 March
2018, the comparative information presented in these financial
statements for the period ended 31 March 2017. The Company was
incorporated on 22 January 2016 and therefore preparation of an
opening IFRS Statement of Financial Position (the Company's date of
transition) has been performed retrospectively.
In preparing its opening IFRS Statement of Financial Position,
the Group and Company has adjusted amounts reported previously in
financial statements prepared in accordance with UK GAAP (previous
GAAP). An explanation of how the transition from previous GAAP to
IFRSs has affected the Group and Company's financial position and
financial performance is set out below in the tables and associated
notes. There has been no impact on the Company's financial position
and financial performance in the period ended 31 March 2017.
As previously Effect IFRS (as
presented of transition represented)
Assets 31 March 31 March 31 March
2017 2017 2017
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill (a) 47,261 4,268 51,529
Intangible assets 23,213 23,213
Property, plant and equipment 451 451
-------------
Total non-current assets 70,925 4,268 75,193
Current assets
Trade and other receivables 12,087 12,087
Cash and cash equivalents 8,023 8,023
------------- -------------- -------------
Total current assets 20,110 20,110
------------- -------------- -------------
Current liabilities
Trade and other payables (10,024) (10,024)
------------- -------------- -------------
Total current liabilities (10,024) (10,024)
------------- -------------- -------------
Net current assets 10,086 10,086
Non-current liabilities
Borrowings (85,879) (85,879)
Deferred tax provision (3,946) (3,946)
Total non-current liabilities (89,825) (89,825)
------------- -------------- -------------
Net assets/(liabilities) (8,814) 4,268 (4,546)
Equity
Issued share capital 86 86
Share premium
Retained earnings (8,676) 4,268 (4,408)
Foreign exchange reserve (224) (224)
(8,814) 4,268 (4,546)
As previously Effect of IFRS (as
reported transition represented)
Continuing operations
Revenue 49,240 49,240
Cost of sales (32,515) (32,515)
------------- ----------- -------------
Gross profit 16,725 16,725
Administration expenses
(a) (17,503) 4,782 (12,721)
Operating profit (778) 4,782 4,004
Finance income 5 5
Finance expense (7,880) (7,880)
Profit/(loss) before
income tax (8,653) 4,782 (3,871)
Taxation (a) (23) (514) (537)
Loss for the period (8,676) 4,268 (4,408)
------------- ----------- -------------
Exchange differences
on translation of foreign
operations (224) (224)
Total comprehensive expense
for the period (8,900) 4,268 (4,632)
------------- =========== =============
The previously reported goodwill was being amortised under
previous GAAP; however is not amortised under IFRS and an annual
impairment review is undertaken, with the associated deferred tax
movement. In addition the previously capitalised acquisition costs
of GBP1,460,000 can no longer be capitalised under IFRS and has,
therefore, been recognised as an expense within the Consolidated
Statement of Comprehensive Income.
The policies applied under the entity's previous accounting
framework are not materially different to IFRS and have not
impacted equity or profit or loss.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR QQLBBVQFFBBD
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