TIDMCTP
RNS Number : 7236V
Castleton Technology PLC
07 November 2017
Castleton Technology plc
("Castleton", the "Group" or the "Company")
Unaudited Interim Results for the Six Months Ended 30 September
2017
Castleton Technology plc (AIM: CTP), the software and managed
services provider to the public and not-for-profit sectors, today
announces its unaudited interim results for the six months ended 30
September 2017.
Financial Highlights
-- Revenues increased 10.9% to GBP10.8 million (H1 FY17: GBP9.7
million), of which 63% are recurring
-- Adjusted EBITDA* increased 11.5% to GBP2.3 million (H1 FY17: GBP2.0 million)
-- Cash flow from operations of GBP2.3 million (H1 FY17: GBP1.8 million)
-- Profit before tax for the period of GBP0.2 million (H1 FY17: GBP0.04 million)
-- Net debt** (including deferred and contingent consideration)
as at 30 September 2017 of GBP8.0 million (30 September 2016:
GBP11.1 million), down from GBP9.7 million as at 31 March 2017
Operational Highlights
-- Significant new multi-year contract wins with North
Hertfordshire Homes and a community regeneration and housebuilding
company
-- Delivery of integrated product suite on two milestone contracts
-- Increase in software sales on a hosted basis leading to a
stronger base of recurring revenues and greater visibility of
earnings
-- Strong customer retention with customer base now over 730
David Payne, Chairman of Castleton, commented:
"I am pleased to report on a strong performance from the Group
during the first half of the year. Whilst recording significant
organic growth in both revenues and profit, underpinned by
excellent cash generation, the Group has also achieved some key
operational milestones, notably the delivery of our integrated
product suite on two milestone contracts, which illustrate both the
appetite for the proposition and our ability to deliver.
Current trading remains robust and in line with market
expectations. As such, the long term prospects for the Group remain
positive and we are confident that we have the foundations in place
to significantly scale the business."
* Before net finance costs, tax, depreciation, amortisation,
exceptional items and share based payment charges
**Including deferred and contingent considerations and interest
accrued on loan notes
Enquiries:
Castleton Technology Tel. +44 (0)845 241
plc 0220
Dean Dickinson, Chief
Executive Officer
Haywood Chapman, Chief
Financial Officer
finnCap Tel. +44 (0)20 7220
Jonny Franklin-Adams 0500
/ Simon Hicks
MXC Capital Markets Tel. +44(0)20 7965
LLP 1849
Marc Young / Charlotte
Stranner
Alma PR Tel. +44(0) 203 865
Rebecca Sanders-Hewett 9668
Helena Bogle
Josh Royston
About Castleton Technology plc
Castleton Technology plc is a leading supplier of complementary
software and managed services to the public and not-for-profit
sectors. The Group is a 'one stop shop', providing integrated
housing systems via the Cloud, working in partnership with its
customers and resellers to help drive efficiencies whilst improving
controls and customer service. www.castletonplc.com
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Chairman's Statement
Dear Shareholder
I am pleased to report the results of the Group for the six
months ended 30 September 2017. The prior year was one of
consolidation for the Group, with the focus on completing the
integration of the seven companies acquired during the previous two
years. We therefore entered FY18 with a strong platform from which
Castleton could grow and maximise the opportunities in our chosen
markets. The first six months of FY18 have demonstrated that we are
able to capitalise on this growth potential with the results
showing significant growth in our revenues, adjusted EBITDA and
profit before tax, as well as strong operating cash generation.
Operational Review
During the period we have implemented a new operational
structure with clearly aligned objectives. Alongside this, sales
teams have been tasked with defined territories and targets to
enable the Company to better execute its strategy.
Significant multi-year contracts were won during the period. The
long term nature of the contracts being entered into, as well as
the increasing success we are experiencing in selling our products
on a hosted basis, both increases our level of recurring revenues
and provides better visibility of earnings and cash flow.
The delivery of Castleton's integrated product suite on two
milestone contracts illustrates Castleton's ability to be a 'one
stop shop' serving the social housing sector. This followed a
period of significant product development and demonstrates that
Castleton is able to provide its customers with the technology and
services they require to operate effectively and achieve their
goals.
The Group remains focused on increasing the number of customers
who take multiple products, both by winning new customers and cross
selling and upselling products to our existing base, thereby
driving further growth in revenues and profit. Illustrating the
Group's success in cross selling, the number of customers taking
more than one product has increased in the period, with 37 new
product sales to 21 existing customers.
Trading and Results
The Group generated revenue for the six months to 30 September
2017 of GBP10.8 million (H1 FY17: GBP9.7 million). Recurring
revenues are more than 63% of total revenues, with further growth
in recurring revenue expected due to the increasing number of
multi-year contracts being entered into as well as the success in
selling products on a hosted basis. Revenue in the Software
Solutions division increased 14% and revenue in the Managed
Services division increased 7% when compared to H1 FY17.
The Group generated an adjusted EBITDA* of GBP2.3 million in the
period (H1 FY17: GBP2.0 million). Adjusted EBITDA* for the Software
Solutions division and the Managed Services division (pre central
costs) increased 20% and 5% respectively when compared to H1
FY17.
Central costs amounted to GBP0.7 million (H1 FY17: GBP0.6
million) before management recharges, excluding net finance costs,
depreciation, amortisation of intangible assets, acquisition and
integration costs and share based payments.
Exceptional costs amounted to GBP0.1 million (H1 FY17: GBP0.1
million) and related to restructuring costs of the Group's scanning
bureau operation.
Net finance costs amounted to a P&L charge of GBP0.17
million (H1 FY17: GBP0.20 million).
As the integration of businesses is now complete the cost base
has stabilised, the increase in revenues and reduction in
exceptional integration and strategic costs and acquisition and
reorganisation costs has contributed to a profit before tax of
GBP0.18 million (H1 FY17: GBP0.04 million). This is after
amortisation of intangibles of GBP1.5 million (H1 FY17: GBP1.5
million). The amortisation of intangibles and utilisation of
brought forward tax losses, alongside a reduction in future tax
rates have resulted in a deferred tax credit of GBP0.4 million (H1
FY17: GBP0.6 million) leading to profit after tax of GBP0.6 million
(H1 FY17: GBP0.6 million).
Basic earnings per share from continuing activities was 0.80p
(H1 FY17: 0.80p). Diluted earnings per share from continuing
activities was 0.75p (H1 FY17: 0.72p). Adjusted diluted earnings
per share was 2.73p (H1 FY17: 2.32p).
*Before net finance costs, tax, depreciation, amortisation,
exceptional items and share based payment charges.
Cash Flow and Net Debt
Cash generated by operations amounted to GBP2.3 million (H1
FY17: GBP1.8 million) comprising adjusted EBITDA* of GBP2.3 million
(H1 FY17: GBP2.0 million) and operating working capital movements
of GBP0.07 million (H1 FY17: GBP(0.28) million). This gave a cash
conversion of EBITDA of 103% (H1 FY17: 86%) with the increase on H1
FY17 being largely driven by an increase in trade and other
payables.
Net finance charges paid of GBP0.06 million (H1 FY17: GBP0.15
million) reflect the cash cost of the interest on the loan with
Barclays, the balance of which has decreased due to repayments of
GBP0.5 million (H1 FY17: GBP0.5 million) made during the period. As
at the balance sheet date, GBP3.75 million of the term loan was
outstanding.
In April 2017 Group repaid GBP0.5 million of the convertible
loan notes issued in January 2016 to part fund the acquisition of
Kypera ("Kypera Loan Notes"). There are GBP2.7 million Kypera Loan
Notes outstanding, including GBP0.3 million of accrued interest (30
September 2016: GBP3.4 million including GBP0.1 million accrued
interest).
On 21 June 2017, it was agreed by the beneficiaries of the Opus
loan notes issued at the time of the Company's acquisition of Opus
Information Technology Limited that they would waive the remaining
GBP0.2 million of loan notes in consideration of surrendering any
potential warranty claims for onerous contracts under the sale and
purchase agreement.
The total increase in cash and net cash equivalents was GBP0.06
million (H1 FY17: decrease GBP0.02 million). Net Debt (including
contingent and deferred consideration and interest accrued on loan
notes) at the period end stood at GBP8.0 million, down from GBP9.7
million as at 31 March 2017 and GBP11.1 million as at 30 September
2016.
The Board
In July 2017 Ian Smith, Deputy Chairman, stepped down from the
Board. We would like to thank Ian for his instrumental role in
establishing and delivering Castleton's organic and acquisitive
growth strategy.
At the same time, Paul Gibson was appointed as Non-Executive
Director of the Company. Paul is a partner at MXC Capital Limited
and has had a highly successful career in the TMT sector, most
recently as Chief Operating Officer of Advanced Computer Software
Plc ("ACS") prior to its acquisition by Vista Equity Partners for
GBP725 million. In his five years at ACS Paul oversaw a period of
exceptional value creation and transformation, with responsibility
for driving both organic and acquisitive growth. Prior to ACS, Paul
held a number of senior roles in both financial and operational
capacities, latterly as Finance Director of Redac Limited, the
Alchemy backed turnaround that was subsequently sold to ACS for
GBP100 million. The foundations of Paul's career were built at
Unigate, GrandMet (now Diageo) and Oracle. Paul is a qualified
accountant and currently sits on the board of Tax Systems plc as
Non-Executive Director.
Outlook
Castleton made significant progress during the first six months
of the year and this has continued into the start of the second
half.
We will continue to concentrate on driving further organic
growth across the Group, whilst increasing profitability by
providing more of our customers with our broader range of
complementary services - and all the time building our core of
repeat revenues.
The Group remains on course to meet market expectations for the
full year and looks forward to continuing to build on the solid
foundations in place, cementing Castleton's position as a 'one stop
shop' serving the social housing sector.
David Payne
Non-Executive Chairman
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
Note GBP000 GBP000 GBP000
------------------------------------ ----- -------------- -------------- ----------
Revenue 2 10,785 9,725 20,269
Cost of sales (3,633) (3,073) (5,980)
------------------------------------ ----- -------------- -------------- ----------
Gross profit 7,152 6,652 14,289
Administrative expenses (6,799) (6,418) (14,100)
Adjusted EBITDA* 2,260 2,026 4,383
Depreciation (129) (123) (225)
Amortisation of intangibles (1,502) (1,469) (2,997)
Exceptional items included
within administrative expenses 3 (133) (107) (741)
Charges for share-based
payment (143) (93) (231)
------------------------------------ ----- -------------- -------------- ----------
Operating profit 353 234 189
Net finance costs (169) (195) (728)
Profit / (loss) on ordinary
activities before taxation 184 39 (539)
Income Tax 4 442 589 1,002
------------------------------------ ----- -------------- -------------- ----------
Profit for the period attributable
to the owners of the parent
company 626 628 463
------------------------------------ ----- -------------- -------------- ----------
Earnings per share 5
Basic earnings per share 0.80p 0.80p 0.59p
Diluted earnings per share 0.75p 0.72p 0.54p
------------------------------------ ----- -------------- -------------- ----------
*Earnings for the period from continuing operations before net
finance costs, depreciation, amortisation, exceptional items, group
management charges and share based payment charges.
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
Note GBP000 GBP000 GBP000
------------------------------------ ------ -------------- -------------- ----------
Net income 626 628 463
Exchange differences on -
translation of foreign operations 29 -
------------------------------------ ------ -------------- -------------- ----------
Total comprehensive income 655 628 463
The above consolidated statement of comprehensive income should
be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
Note 30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
----------------------------- -------- -------------- -------------- ----------
Assets
Non-current assets
Intangible assets 32,300 33,808 33,605
Property, plant and
equipment 900 717 781
Trade and other receivables 148 376 261
33,348 34,901 34,647
-------------------------------------- -------------- -------------- ----------
Current assets
Inventories 72 13 50
Trade and other receivables 4,527 5,818 5,050
Current income tax
asset 91 - 145
Cash and cash equivalents 571 644 586
--------------------------------------- -------------- -------------- ----------
5,261 6,475 5,831
-------------------------------------- -------------- -------------- ----------
Total assets 38,609 41,376 40,478
--------------------------------------- -------------- -------------- ----------
Equity and liabilities
Equity attributable
to owners of the parent
Called up share capital 1,625 1,617 1,625
Share premium account 16,995 16,853 16,995
Equity reserve 2,668 2,919 2,919
Other reserves 7,966 7,966 7,966
Translation reserve 29 - -
Accumulated loss (12,976) (13,969) (13,996)
--------------------------------------- -------------- -------------- ----------
Total equity attributable
to owners of the parent 16,307 15,386 15,509
--------------------------------------- -------------- -------------- ----------
Consolidated Statement
of Financial Position
(cont.)
Unaudited Unaudited Audited
Note 30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
--------------------------------- ------- -------------- -------------- ----------
Liabilities
Current liabilities
Trade and other payables 6 8,611 8,654 8,836
Current income tax liabilities - 476 -
Finance leases 22 11 46
Borrowings 1,223 2,030 1,324
Convertible Loan notes - 343 140
Deferred consideration 717 - 838
Provisions 721 311 751
--------------------------------- ------- -------------- -------------- ----------
11,294 11,825 11,935
--------------------------------- ------- -------------- -------------- ----------
Non-current liabilities
Trade and other payables 6 1,699 1,430 1,893
Borrowings 2,846 3,856 3,352
Convertible Loan notes 2,353 3,336 2,957
Deferred consideration 427 1,554 707
Contingent consideration 748 619 748
Provisions - 224 -
Deferred taxation liability 2,935 3,146 3,377
--------------------------------- ------- -------------- -------------- ----------
11,008 14,165 13,034
--------------------------------- ------- -------------- -------------- ----------
Total liabilities 22,302 25,990 24,969
--------------------------------- ------- -------------- -------------- ----------
Total equity and liabilities 38,609 41,376 40,478
--------------------------------- ------- -------------- -------------- ----------
Consolidated Statement of Changes in Equity
(Attributable to shareholders of the parent company)
(Called up share (Share premium Equity Merger Translation (Retained earnings) (Total equity)
capital) account) Reserve reserve reserve (c)
(b) (a)
(GBP000) (GBP000) (GBP000) (GBP000) (GBP000) (GBP000) (GBP000)
(1 April 2016) (1,612) (16,758) (2,919) (7,966) (-) (14,690) (14,565)
(Profit for the period) (-) (-) (-) (-) (-) (628) (628)
(Transactions with
owners in their
capacity as owners:)
(Share based payments) (-) (-) (-) (-) (-) (93) (93)
Conversion of loan
notes (d) (5) (95) (-) (-) (-) (-) (100)
(At 30 September 2016) (1,617) (16,853) (2,919) (7,966) (-) (13,969) (15,386)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(Loss for the period) (-) (-) (-) (-) (-) (165) (165)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(Transactions with
owners in their
capacity as owners:)
Conversion of loan
notes (d) (8) (142) (-) (-) (-) (-) (150)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(Share based payments) (-) (-) (-) (-) (-) (138) (138)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(At 1 April 2017) (1,625) (16,995) (2,919) (7,966) (-) (13,996) (15,509)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(Profit for the period) (-) (-) (-) (-) (-) (626) (626)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(Other comprehensive
income) (-) (-) (-) (-) (29) (-) (29)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(Transactions with
owners in their
capacity as owners:)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(Share based payments) (-) (-) (-) (-) (-) (143) (143)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(Waiver of Opus loan
notes) (-) (-) (251) (-) (-) (251) (-)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
(At 30 September 2017) (1,625) (16,995) (2,668) (7,966) (29) (12,976) (16,307)
------------------------ ----------------- --------------- --------- --------- ------------ -------------------- ---------------
a) Merger reserve
The merger reserve arose from the acquisition of Redstone
Communications Limited (GBP216,000) and Maxima Holdings Limited
(GBP7.75 million) and represents the difference between the value
of the shares acquired and the nominal value of the shares
issued.
b) Equity reserve
The equity reserve consists of the equity element of convertible
loan notes that were issued as part of the consideration for the
acquisition of Kypera Holdings Limited. The fair value of the
equity component of convertible loan notes issued is the residual
value after deduction of the fair value of the debt component of
the instrument from the fair value of the loan note.
c) Translation reserve
On consolidation, the balance sheet of Kypera Australia is
translated into sterling at the rates of exchange ruling at the
balance sheet date. Income statements and cash flows of Kypera
Australia are translated into sterling at rates approximating to
the foreign exchange rates at the date of the transaction. Gains or
losses arising from the consolidation of Kypera Australia are
recognised in the translation reserve.
d) Conversion of loan notes
On 8 July 2016, the company issued 250,000 new ordinary shares
of 2 pence each ("Ordinary Shares") at a price of 40 pence pursuant
to the conversion of loan notes issued and on 4 October 2016 issued
a further 375,000 new Ordinary Shares at a price of 40 pence
pursuant to the conversion of loan notes issued as part of the
previous acquisition of Opus Information Technology Limited.
Unaudited
Unaudited six Audited
six months months year
ended ended ended
30 September 30 September 31 March
Consolidated Cash Flow Statement 2017 2016 2017
Note GBP000 GBP000 GBP000
-------------------------------------- ----- -------------- -------------- ------------------
Cash flows from operating
activities
Cash generated from operations 7 2,331 1,751 4,581
Exceptional items (395) (404) (797)
Income tax received 54 110 133
Net finance charges paid (64) (147) (256)
-------------------------------------- ----- -------------- -------------- ------------------
Net cash flows generated
from operating activities 1,926 1,310 3,661
Cash flows from investing
activities
Receipt of deferred consideration
from sale of businesses 31 24 53
Acquisition of businesses,
net of cash acquired - - (450)
Purchase of intangible assets (340) (150) (309)
Purchase of property, plant
and equipment (230) (191) (297)
Net cash flows used in investing
activities (539) (317) (1,003)
-------------------------------------- ----- -------------- -------------- ------------------
Cash flows from financing
activities
Settlement of deferred consideration (300) (500) (500)
Repayment of borrowings (1,030) (513) (1,558)
Net cash flows used in financing
activities (1,330) (1,013) (2,058)
-------------------------------------- ----- -------------- -------------- ------------------
Net increase/(decrease)
in cash and cash equivalents 57 (20) 600
Cash and cash equivalents
at beginning of period 270 (330) (330)
Effect of changes in exchange
rate and other 29 - -
Cash and cash equivalents
at end of period 356 (350) 270
-------------------------------------- ----- -------------- -------------- ------------------
Comprising:
Cash and cash equivalents 571 644 586
Overdrafts (215) (994) (316)
---------------------------- ------ ------ ------
356 (350) 270
--------------------------- ------ ------ ------
Notes to the half-yearly financial information
1. Basis of preparation and general information
The interim financial information is unaudited. This condensed
consolidated interim financial information was approved by the
Directors and authorised for issue on 6 November 2017.
The Company is a public limited liability company incorporated
and domiciled in England. The address of its registered office is
Castleton Technology plc ("Castleton"), 100 Fetter Lane, London,
EC4A 1BN. The Company is listed on the AIM market of the London
Stock Exchange.
The principal activity of the Group during the period was the
provision of software and managed services to the public and
not-for-profit sectors, predominantly the social housing
sector.
Castleton and its subsidiaries have not applied IAS 34, Interim
Financial Reporting, which is not mandatory for UK AIM listed
companies, in the preparation of this half-yearly financial
report.
This condensed, consolidated interim financial information for
the six months ended 30 September 2017 does not comply, therefore
with all the requirements of IAS 34, 'Interim financial reporting'
as adopted by the European Union. The consolidated interim
financial information should be read in conjunction with the annual
financial statements of Castleton for the year ended 31 March 2017,
which have been prepared in accordance with IFRS as adopted by the
European Union.
This condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. Statutory accounts for the year ended 31
March 2017 were approved by the Board of directors on 17 July 2017
and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under sections 498 (2) or (3) of the Companies Act 2006.
Accounting policies
The accounting policies used in the preparation of the financial
information for the six months ended 30 September 2017 are in
accordance with the recognition and measurement criteria of
International Financial Reporting Standards ("IFRS") as adopted by
the European Union and are consistent with those which will be
adopted in the annual statutory financial statements for the year
ending 31 March 2018.
While the financial information included has been prepared in
accordance with the recognition and measurement criteria of IFRS,
as adopted by the European Union (EU), these financial statements
do not contain sufficient information to comply with IFRSs.
Going concern
The consolidated interim financial information of Castleton has
been prepared on the going concern basis.
The Directors have prepared detailed cash flow projections
including sensitivity analysis on key assumptions. The Group's
forecasts and projections, taking account of reasonably possible
changes in trading performance and the timing of key strategic
events, show the Group will be able to operate within the level and
conditions of available funding. The Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future.
Based on these facts, the Directors consider that the adoption
of the going concern basis is appropriate.
2. Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting to the Chief Operating Decision Makers ('CODM').
The CODM has been identified as the Executive Board.
The Group is comprised of the following main operating
segments:
Managed Services In this segment are the results of Castleton
Managed Services Ltd for the six months ended 30 September
2017.
Software Solutions This segment comprises the results of
Castleton Software Solutions Ltd, Kypera Limited and Kypera
Australia Pty for the six months ended 30 September 2017.
Six months ended 30 September 2017 - unaudited
Software
Managed Services Solutions Central Total
Continuing GBP000 GBP000 GBP000 GBP000
------------------------------------ ---------------- ---------- --------- --------
Revenue 4,957 5,828 - 10,785
------------------------------------ ---------------- ---------- --------- --------
Operating profit/(loss)
before amortisation of intangibles
assets and management charge 1,464 985 (594) 1,855
Amortisation of acquired
intangibles (484) (1,000) (18) (1,502)
Management charge (607) (204) 811 -
------------------------------------ ---------------- ---------- --------- --------
Operating profit /(loss) 373 (219) 199 353
------------------------------------ ---------------- ---------- --------- --------
Finance income 9 1 6 16
Finance costs - (25) (160) (185)
------------------------------------ ---------------- ---------- --------- --------
Profit/(loss) before tax 382 (243) 45 184
Adjusted EBITDA* 1,551 1,371 (662) 2,260
------------------------------------ ---------------- ---------- --------- --------
Assets and liabilities
Segment assets 11,427 29,384 (2,202) 38,609
------------------------------ -------- --------- -------- ---------
Segment liabilities (2,933) (12,206) (7,163) (22,302)
------------------------------ -------- --------- -------- ---------
Net assets / (liabilities) 8,494 17,178 (9,365) 16,307
------------------------------ -------- --------- -------- ---------
*Earnings for the period from continuing operations before net
finance costs, tax, depreciation, amortisation, exceptional items,
group management charges and share based payment charges.
Six months ended 30 September 2016 - unaudited
Software
Managed Services Solutions Central Total
Continuing GBP000 GBP000 GBP000 GBP000
------------------------------------ ---------------- ----------- --------- -----------
Revenue 4,619 5,106 - 9,725
------------------------------------ ---------------- ----------- --------- -----------
Operating profit/(loss)
before amortisation of intangibles
assets and management charge 1,416 1,064 (777) 1,703
Amortisation of acquired
intangibles (485) (984) - (1,469)
Management charge (617) (46) 663 -
------------------------------------ ---------------- ----------- --------- -----------
Operating profit /(loss) 314 34 (114) 234
------------------------------------ ---------------- ----------- --------- -----------
Finance income 10 - 1 11
Finance costs - (5) (201) (206)
------------------------------------ ---------------- ----------- --------- -----------
Profit/(loss) before tax 324 29 (314) 39
Adjusted EBITDA* 1,476 1,143 (593) 2,026
------------------------------------ ---------------- ----------- --------- -----------
Assets and liabilities
Segment assets 12,572 28,688 116 41,376
------------------------------ ------------------- --------- ----------------- ------------------
Segment liabilities (3,628) (12,638) (9,724) (25,990)
------------------------------ ------------------- --------- ----------------- ------------------
Net assets / (liabilities) 8,944 16,050 (9,608) 15,386
------------------------------ ------------------- --------- ----------------- ------------------
*Earnings for the period from continuing operations before net
finance costs, tax, depreciation, amortisation, exceptional items,
group management charges and share based payment charges.
3. Exceptional costs
In accordance with the Group's policy in respect of exceptional
costs the following charges were incurred:
Unaudited
Unaudited six Audited
six months months year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
------------------------------------- -------------- -------------- ----------
Integration and strategic costs - 71 278
Acquisition and reorganisation
costs: - 36 448
Creation of restructuring provision - - 15
Restructuring costs 133 - -
Waiver of Opus loan note (215) - -
Creation of provision in respect
of onerous Opus contracts 215 - -
133 107 741
------------------------------------- -------------- -------------- ----------
Restructuring costs relate to closure of the scanning bureau in
the period.
On 21 June 2017, it was agreed by the beneficiaries of the Opus
loan notes issued at the time of the company's acquisition of Opus
Information Technology Limited that they would waive the remaining
GBP0.2 million of loan notes in consideration of surrendering any
potential warranty claims for onerous contracts under the sale and
purchase agreement.
During the 6 months ended 30 September 2017, a provision was
created in respect of onerous contracts associated with the
acquisition of Opus Information Technology Limited.
4. Taxation
Tax on profit on ordinary activities
Unaudited
Unaudited six Audited
six months months year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
-------------------------------- -------------- -------------- ----------
Corporation Tax
Current tax on profit / (loss)
for the year - - (571)
Deferred tax
Origination and reversal of
timing differences (442) (290) (431)
Changes in rates of tax - (299) -
Total tax credit (442) (589) (1,002)
-------------------------------- -------------- -------------- ----------
The rate of UK corporation tax for the year beginning 1 April
2017 is 19% (year beginning 1 April 2016 it was 20%). From the year
starting 1 April 2020 the UK corporation tax rate drops to 17%.
Deferred tax has been measured on the basis of these rates and
reflected in the financial statements.
5. Earnings per share
Basic earnings per share and diluted earnings per share are
calculated using a weighted average number of shares of 78,714,832
and 82,919,847 respectively (30 September 2016: weighted average
number of shares of 78,204,586 and 86,743,592 respectively and at
31 March 2017: weighted average number of shares of 78,339,832 and
86,215,879 respectively).
Adjusted diluted EBITDA* per share has been shown on the grounds
that it is a common metric used by the market in monitoring similar
businesses.
Unaudited
Unaudited six Audited
six months months year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
Basic and diluted earnings per
share:
Basic earnings per share 0.80p 0.80p 0.59p
Fully diluted 0.75p 0.72p 0.54p
Adjusted diluted EBITDA* per
share 2.73p 2.32p 5.08p
*Earnings for the period from continuing operations before net
finance costs, tax, depreciation, amortisation, exceptional items
and share based payment charges.
6. Trade and other payables
Unaudited
Unaudited six Audited
six months months year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
------------------------------ -------------- -------------- ----------
Current
Trade payables 653 1,011 298
Other payables 100 291 67
Taxation and social security 502 680 646
Accruals 1,063 680 1,180
Deferred income 6,293 5,992 6,645
8,611 8,654 8,836
Non current
Deferred income 1,414 1,430 1,718
Accrued interest 285 - 175
------------------------------ -------------- -------------- ----------
1,699 1,430 1,893
------------------------------ -------------- -------------- ----------
7. Net cash flows from operating activities
Unaudited
Unaudited six Audited
six months months year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
-------------------------------------- -------------- -------------- ----------
Profit/(loss) on ordinary activities
before tax 184 39 (539)
Adjustments for:
Exceptional items 133 404 797
Net finance costs 169 195 727
Depreciation of property, plant
and equipment 129 123 225
Amortisation of intangible assets 1,502 1,469 2,997
Equity-settled share based payment
charge 143 93 231
Movements in working capital:
Decrease in trade and other
receivables 518 661 1,514
Decrease in provisions (101) (208) (558)
Increase/(decrease) in trade
and other payables 332 (975) (1,235)
(Decrease)/increase in deferred
income (656) (224) 285
(Increase)/decrease in inventories (22) 174 137
Cash generated from operations
before exceptional items 2,331 1,751 4,581
-------------------------------------- -------------- -------------- ----------
8. Net debt
Unaudited
Unaudited six Audited
six months months year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
------------------------------------- -------------- -------------- ----------
Cash 571 644 586
Overdraft (215) (994) (316)
Barclays Loan (3,750) (4,777) (4,250)
Mortgage (Documotive) (104) (113) (110)
-------------- -------------- ----------
Net debt before loan notes and
deferred/contingent consideration (3,498) (5,240) (4,090)
Loan notes and accrued interest
on loan notes* (2,638) (3,681) (3,272)
-------------- -------------- ----------
Net debt before deferred/contingent
consideration (6,136) (8,921) (7,362)
Deferred consideration: (1,144) (1,554) (1,545)
Contingent consideration: (748) (619) (748)
Net debt (8,028) (11,094) (9,655)
------------------------------------- -------------- -------------- ----------
* Accrued interest on loan notes is presented within "Accrued
Interest" in Trade and other payables.
Advisers
Nominated Adviser and Broker
FinnCap, 60 New Broad Street London, EC2M 1JJ
Financial Adviser
MXC Capital Limited, 25 Victoria Street, London SW1H 0EX
Auditors
RSM UK Audit LLP, Portland, 25 High Street, Crawley, West
Sussex, RH10 1BG
Solicitors
Beachcroft LLP, 100 Fetter Lane, London, EC4A 1BN
Registrars
Link Asset Services, The Registry, 34 Beckenham Road, Beckenham,
Kent, BR3 4TU
Principal Bankers
Barclays Bank plc, 1 Churchill Place, London, E14 5HP
Company Number
03336134
Further details can be found on the Castleton website at the
following address: www.castletonplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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