TIDMPVG
RNS Number : 6013O
Premier Veterinary Group PLC
31 January 2019
PREMIER VETERINARY GROUP PLC
PRELIMINARY ANNOUNCEMENT
AUDITED FINAL RESULTS FOR THE YEARED 30 SEPTEMBER 2018
London, UK, 31 January 2019 - Premier Veterinary Group plc (LSE:
PVG) ("PVG" or the "Company") today announces its audited results
for the year ended 30 September 2018.
Dominic Tonner, CEO of PVG commented:
"The business looks forward to working with our customers to
support the growth of their businesses in innovative and exciting
ways."
2018 HIGHLIGHTS
-- 35% increase in contracted clinics with a total of 1,461
clinics in UK, Europe and the USA signed up to Premier Pet Care
Plan (30 September 2017: 1,084).
-- 24% increase in global revenues from Premier Pet Care Plan to
GBP3,152k for the year ended 30 September 2018 (30 September 2017:
GBP2,534k).
-- 30% increase in the number of pets on plan with 244,000 on
plan at 30 September 2018 (30 September 2017: 188,000).
-- 24% increase in the number of pets on plan in the UK to
193,000 at 30 September 2018 (30 September 2017: 156,000).
-- 30% increase in the number of global monthly transactions
processed to 2,616,000 in year ended 30 September 2018 (30
September 2017: 2,005,000).
POST PERIOD HIGHLIGHTS
-- On 29 January 2019 the Group announced it had entered into a
loan agreement with Bybrook Finance Solutions Limited ("BFSL")
whereby BFSL has agreed to provide a committed loan facility of
GBP3.85m repayable by the Group on or before 25 April 2019 with the
Group having the ability to extend the repayment date to 25 January
2021 by issuing warrants to BFSL to acquire 767,347 of ordinary
GBP0.10 Shares at par. The facility will be used to repay the
previous loan notes issued to BFSL and provide GBP2.0m of
additional working capital which was drawn down upon completion of
the agreement. Crossroads Finance Limited ("Crossroads"), a company
jointly owned and controlled by Dominic Tonner, Chief Executive
Officer of PVG, and his spouse, has taken part in the PVG funding
by entering into direct arrangements with BFSL.
-- Following a successful trial with a leading USA corporate we
are proceeding to full roll-out which will substantially underpin
the Group's existing growth expectations.
A full copy of the Company's Annual Report and Financial
Statements for the year ended 30 September 2018 (the "Annual
Report") will be available shortly on its website at
www.premiervetgroup.co.uk within the Investor Relations section.
The Annual Report will also be uploaded to the National Storage
Mechanism, and will also shortly be available for viewing.
Disclosure & Transparency Rule ("DTR") 6.3.5 requires the
Company to disclose to the media certain information from its
Annual Report, if that information is of a type that would be
required to be disseminated in a half-yearly report. Accordingly,
this announcement should be read in conjunction with and is not a
substitute for reading the full Annual Report. Together these
constitute the information required by DTR 6.3.5, which is required
to be communicated in unedited full text through a Regulatory
Information Service.
The information included in this announcement is extracted from
the Annual Report which was approved by the Directors on 30 January
2019. Defined terms used in the announcement refer to terms as
defined in the Annual Report unless the context otherwise
requires.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
For further information, please contact:
Premier Veterinary Group plc Tel: +44 (0)117 970 4130
Dominic Tonner, Chief Executive
Officer
Andy Paull, Chief Financial Officer
This announcement includes "forward-looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding the Group's
financial position, business strategy, plans and objectives of
management for future operations, and any statements preceded by,
followed by or that include forward-looking terminology such as the
words "targets", "believes", "estimates", "expects", "aims",
"intends", "will", "can", "may", "anticipates", "would", "should",
"could" or similar expressions or the negative thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Group's
control that could cause the actual results, performance or
achievements of the Group to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding the Group's present and
future business strategies and the environment in which the Group
will operate in the future. These forward-looking statements speak
only as at the date of this announcement. The Group expressly
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements contained in this
announcement to reflect any change in the Group's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statements are based. As a result of these
factors, readers are cautioned not to rely on any forward-looking
statement.
CHAIR'S STATEMENT
Overview and results
Introduction
This year, I am pleased to report that the Group continues to
grow the business organically despite some challenges in our
overseas markets. The Board maintains a strong focus on delivering
its strategic objectives and has taken decisions to invest in the
business, its technology infrastructure, its people, marketing and
business development.
Our preventative healthcare programme for pets continues to
position itself as a leading brand in the market and is supported
by a strong culture of service to ensure an end-to-end professional
customer experience. The business is focused on developing
preventative healthcare programmes and other initiatives to improve
compliance in the use of vaccines, parasiticides and long-term
therapeutic drugs for its customers. The investment in the global
technology platform provides further capability to deliver
efficient and flexible solutions including multi-country processing
capabilities and home delivery services. Like many other businesses
we are having to navigate the current political and financial
uncertainties. Despite this, both in the UK and overseas, our
people continue to develop and sell our Plans in markets which
present a significant opportunity. Our strategic partnerships
ensure we deliver preventative healthcare programmes to benefit pet
owners and their pets, veterinary practices, product manufacturers,
and distributors.
Results
During the year ended 30 September 2018, we significantly
increased our total number of pets enrolled on our pet healthcare
programmes ("Pets on Plan") to 244,000, a 30% uplift on September
2017, as well as increasing the number of monthly transactions
processed by 30%. Total revenue from continuing operations for the
year ended 30 September 2018 was GBP3,152k compared with GBP2,534k
last year, an increase of 24%. The loss from continuing operations
reduced from GBP4,269k to GBP3,567k.
Shareholders will have seen that the Board continues to take
steps to ensure that the Company has sufficient funds to support
its investment and business development needs and has renegotiated
its facility with Bybrook Finance Solutions Limited.
At present the intention is that no dividends will be paid by
the Company. This position will be reviewed if future activities
lead to significant levels of distributable profits, of which there
can be no assurance, taking into account any earnings to be
reinvested in the Group's business. Further details on our
operational and financial performance can be found in the
operational and financial review.
Governance
The Board remains committed to maintaining the highest standards
of transparency, ethics and corporate governance whilst also
providing leadership controls and strategic oversight to ensure
that we deliver value to all shareholders.
Throughout the year, the Board has been mindful of its board and
committee membership and composition. Having evaluated ways to
enhance effectiveness and to ensure relevant skills and experience
on the Board, we welcomed Neil Wood as Non-Executive Director on
the Board. We also announced the departure of Will Evans and his
replacement by the appointment of Andrew Paull as Chief Financial
Officer. The Board thanks Will for his skilled oversight of
significant developments and change in all parts of the business,
including the implementation of considerable improvements in our
back office operational and financial processes. We wish Will all
the very best for the future.
The biographical details of both Neil and Andrew can be found in
the notes to the Company's Annual General Meeting, at which their
appointments will be formally proposed for shareholder approval.
The Notice of the AGM can be found at the end of the Annual Report
and Financial Statements, and in the Investors' section of the
Company's website www.premiervetgroup.co.uk
Looking ahead
The Board believes that the business is well positioned to
achieve its future growth ambitions. The significant contract
opportunity that has been secured in the USA, if successfully
implemented, will substantially increase the visibility of
prospective revenue. I would like to take this opportunity of
thanking the shareholders and all those who work for the Company
for their continued support.
I look forward to updating you on future developments.
Graham Dick
Chair
Premier Veterinary Group plc
30 January 2019
CEO'S STATEMENT
OUR STRATEGY
The Board regularly evaluates how best to achieve its strategic
objectives. Our strategy remains focussed on four key areas:
To leverage the success of PVA
The PPCP business was started by PVA in 2010 and has been grown
organically to become a sustainable, cash generative business in
the UK with continuing opportunities for growth. There are
significant opportunities to leverage the intellectual property,
systems and processes which have been developed in the UK business
to expand PPCP, both in the UK and into international markets. The
Group has undertaken significant amounts of research to identify
countries with similar economic and socio-demographic
characteristics relevant to the PPCP business and has identified a
number of territories which are likely to embrace the PPCP
offering, most notably in mainland Europe and the USA.
To develop the business through its global strategic
partnerships and growing data set
The business has significant long-term relationships with global
pharmaceutical manufacturers, buying groups and distributors that
operate in the animal health sector. These relationships are vital
in establishing PPCP in new territories.
Furthermore, the substantial data sets generated by the business
over previous years provide valuable insights on which to work with
our strategic partners to develop our businesses, strengthen
relationships and identify opportunities for future value creation.
The Group's IT investment programme continues to build significant
data sets to enhance planning and partner value.
To continue to invest in our global transaction platform
The investment required to capture significant international
opportunities is considerable, not only in establishing operations
in each territory but also in developing the IT and back office
support necessary to deliver consistent, high quality customer
experience in every territory. The Group expects to continue to
invest in its global transaction platform and portal, which will
help generate increased revenue, create bigger barriers to entry
for any competition and deliver competitive advantage.
To develop new opportunities for growth
Notwithstanding the significant consolidation of veterinary
practices currently taking place in the UK, the UK and overseas
markets remain fragmented and the directors believe that, by
adopting an opportunistic and entrepreneurial approach, the Group
will be in a position to identify and exploit new opportunities for
growth.
OPERATIONAL AND FINANCIAL REVIEW
Operational and financial overview
2018 has seen positive progress in the continuation of business
growth. The number of revenue generating pets on plan across our
operations in the UK, Europe and the USA has increased by 30% on
the previous year to 244,000 from 188,000 as at the end of the
financial year. We have continued to pursue our strategy to
leverage strategic partnerships and to focus on our core
territories to increase the Group's growth potential. Alongside
this, we continue to invest in our operating model, core
infrastructure and plans to work with clients to support them as we
develop business solutions and opportunities.
Our bespoke software system facilitates the worldwide operation
of Premier Pet Care Plan. The Group will continue to add
functionality to the platform, after careful assessment, with the
intention of developing further revenue generating opportunities,
creating bigger barriers to entry and delivering competitive
advantage.
PVG has continued to make significant investments across all its
geographical territories to ensure that it remains at the forefront
in working with veterinary practices to deliver preventative
healthcare programmes for pets.
Our operating model
Our core revenue is generated from processing the payments made
by pet owners for their Plan via the clinics, using our own state
of the art payment platform. In addition, not only does our
business model allow us to generate income from processing
payments, but we can also add further value by applying our
expertise and knowledge of veterinary markets to help produce
significant, tangible benefits for our clients and strategic supply
partners.
We continue to invest in the solutions we offer our customers to
help drive greater efficiency through the transaction process. Our
Global Transaction Platform ("Platform") delivers a high-quality
customer experience, enabling the collection of payments across the
globe and provides real-time access to client records and regular
management reporting. We believe this provides a technical
competitive advantage to ensure our services meet customers'
expectations to provide them with flexible and effective
solutions.
Our knowledgeable sales and training teams assist customers with
Plan design, point of sale marketing and staff training. We provide
advice on what to include as part of the Plan based on our
experience and market expertise. We ensure we keep Plans simple and
flexible for the client whilst also ensuring Plans remain price
competitive and generate bottom-line growth for the veterinary
clinics.
Once a Plan has been structured, we launch the customer's plan
on our Platform and train their staff through one-to-one
field-based training. We also provide continuous training and
post-launch support which delivers an end-to-end solution and
results for our customers and pet owners. Should customers and pet
owners choose to, they can also benefit from our text messaging
reminder service to ensure they never miss out on the benefits that
the Plan provides.
Market overview
Our operations and performance in the UK
In the UK, PPCP revenues are up by 6% to GBP1,985k (2017:
GBP1,873k - up by 17% on 2016). The increase in revenues from
veterinary clinics driven by the continued growth in pets on plan
is partially offset by a reduction in revenues from other third
parties. EBITDA generated by the PPCP business in the UK has
decreased by 13% to GBP540k (2017: GBP622k). This decrease is due
to the reduction in the rate of revenue growth noted above and the
increased allocation of back office administration costs following
the disposal of the Buying Group in the prior year.
UK
The UK business has grown the number of pets on plan from
156,000 to 193,000 representing a 24% growth on the same period
last year.
The UK business is well established, cash generative and
continues to see opportunities for growth from its existing
customer base and new customer opportunities. We continue to work
with customers to enhance the quality of real time information
provided by our Platform on the performance of PPCP in each
clinic.
The UK business currently has 697 clinics signed up to the
Premier Pet Care Plan and management recognises that there are good
opportunities for further growth both within the UK independent
veterinary market of approximately 3,500 clinics, by partnering
with leading UK corporate groups and by leveraging the strategic
relationships the business has with manufacturers and
distributors.
Our operations and performance in Europe
Solid progress has been made in the number of pets on plan
across Europe during the financial year. The business continues to
keep under careful review the current political and financial
uncertainties as the UK transitions toward leaving the EU. Despite
this we believe we can continue to maintain our existing operations
and will continue to pursue and drive our strategy forwards in our
current and any future European territories.
Our operations in Europe have continued to see an increase in
the number of pets on plan from 28,000 to 42,000, representing a
50% increase on the same period last year. In Europe, revenues are
up by 64% to GBP808k (2017: GBP493k). The EBITDA loss in Europe
improved from GBP983k to GBP775k.
Overall the performance of the European business for the current
financial year is in line with management's expectations. However,
the pressures on growth in the Netherlands are expected to slow
overall growth in Europe in the future.
EUROPE
The Group's most significant territory in Europe is the
Netherlands which, as anticipated, has started to become cash
generative during the latter part of the financial year. Huisdieren
Zorg Plan ("HZP"), in the Netherlands was launched during 2015. The
number of pets on plan has grown by 38% to 33,000 as at 30
September 2018 (30 September 2017: 24,000). The Group is contracted
with over 250 clinics, representing approximately 25% of the
clinics in the Dutch market. In the last 12 months, there have been
increased levels of clinic acquisitions by corporate veterinary
groups. This presents both opportunities and threats for the
Group's operation but as a consequence some reduction in future
rates of growth are expected.
Substantial opportunities remain available for further growth in
the Dutch market. The available market for preventative healthcare
programmes for pets across the Netherlands is estimated at 1,100
veterinary practices, and an estimated 1.6 million dogs and 2.6
million cats (Source: FEDIAF - 2012).
Our operation in France is branded as Premier Veto Plan ("PVP")
through which there were 7,000 pets on plan as at 30 September 2018
(30 September 2017: 1,000). The business now has 183 clinics
contracted with 117 currently launched. The pipeline of clinics to
launch and the strong pipeline of new sales opportunities provides
encouraging signs for continued growth in this region.
The business continues to pursue opportunities in France, with
an available market for preventative healthcare programmes for pets
across France estimated at over 7 million dogs - similar to the UK
- and over 11 million cats - more than 30% higher than the UK
(Source:FACCO, France).
Our operations and performance in the USA
Operations were established in the USA during the second half of
financial year 2016 and the first clinics were launched in
September 2016. The business continues to work hard in the USA to
focus on changes we have implemented to satisfy the specific need
of the USA market.
In the USA, revenues are up by 114% to GBP359k (2017: GBP168k).
The EBITDA loss improved from GBP1,895k to GBP1,438k. The
improvement in the loss exceeds the increase in revenues as the
business resources have been focussed in the South East and
Mid-West regions of the USA.
USA
The available market for preventative healthcare programmes for
pets across the USA is estimated at 70 million dogs and 74 million
cats (U.S. Pet Ownership & Demographics Sourcebook 2012). The
number of pets on plan increased to 9,000 as at 30 September 2018
(30 September 2017: 4,000). 158 clinics have currently launched
PPCP and a further 98 clinics are awaiting implementation. This
excludes any of the clinics referred to in the contract outlined
below.
During the financial year, we were pleased to announce the
signing of a contract with a major veterinary consolidator in the
USA (the "Customer") who currently has over 140 hospitals across 25
States with in excess of 700 Full Time Veterinary Equivalents
("FTVEs"). Of these hospitals, in excess of 100 are companion
animal, the target market for PVA, with a FTVE compliment of over
500. The average veterinary staffing level of the Customer's
hospitals is approximately 5 FTVE, which is twice the average size
of UK and USA practices currently served.
This contract, initially, was to introduce PVA's preventative
healthcare programme for pets, branded "Premier Pet Care Plan"
("PPCP"), to 15 of the Customer's companion animal hospitals. The
pilot has been successfully completed and forms the basis of a
positive strategic alliance between the two businesses and extends
the contract for a term of 3-years with a full roll-out across all
existing and new companion animal hospitals.
This contract is unlike previous co-operation agreements that
have been signed with distributors in the USA and will see PPCP
launched in all the Customer's existing sites over a 12-month
period. Furthermore, PPCP will be launched in hospitals acquired or
opened by the Customer in the future throughout the contract
period. As the fourth largest corporate consolidator in the USA,
this represents a significant opportunity to grow our existing
market share in this key territory.
Group Financial Summary Overview
The following review should be read in conjunction with the
financial statements and related notes on pages 64 to 90 of the
Annual Report. The Group's total revenue from continuing operations
for the year ended 30 September 2018 was GBP3,152k, an increase of
24% (2017: GBP2,534k). This growth was driven by an increased
number of fee generating pets on plan throughout the year.
The tables below show the revenues and operating results from
each of the geographical regions in which the business now
operates.
GBP000s Revenue
2018 2017
------ ------
PPCP - UK 1,985 1,873
------ ------
PPCP - Europe 808 493
------ ------
PPCP- USA 359 168
------ ------
Total 3,152 2,534
------ ------
GBP000s Operating profit/(loss)
2018 2017
------------ ------------
EBITDA*
------------ ------------
PPCP - UK 540 622
------------ ------------
PPCP - Europe (775) (983)
------------ ------------
PPCP- USA (1,438) (1,895)
------------ ------------
Total EBITDA from PPCP (1,673) (2,256)
------------ ------------
Central unallocated costs (1,576) (1,546)
------------ ------------
Total EBITDA from continuing operations (3,249) (3,802)
------------ ------------
One-off items - (172)
------------ ------------
Depreciation and amortisation (247) (134)
------------ ------------
Finance expenses (102) (161)
------------ ------------
Loss before income tax (3,598) (4,269)
------------ ------------
*EBITDA represents earnings before interest, tax, depreciation
and amortisation
Central unallocated costs are in line with the previous year. As
in the previous year the Executive Directors will not receive a
bonus for the financial year ended 30 September 2018.
In the previous year, one-off items relate to expenses that were
incurred in relation to (i) mobilising the cooperation agreements
in the USA including significant travel, relocation and recruitment
expenses and (ii) legal expenses incurred in relation to the
acquisition of the competitor customer base in the Netherlands.
Interest costs for the year were GBP102k (2017: GBP161k).
The income tax credit recognised in the year represents the
unwinding of the deferred tax liability recognised on rollover
relief claimed in the previous financial year.
The loss from continuing operations reduced from GBP4,269k to
GBP3,567k, directly as a result of the increase in revenues.
Overall operating and interest costs have reduced by GBP133k.
Continued investment
The Group has invested and capitalised GBP250k (2017: GBP196k)
in its bespoke software system to facilitate the worldwide
operation of Premier Pet Care Plan. To further enhance its
functionality the level of capital investment is expected to
increase to approximately twice the current amount in the financial
year ending 30 September 2019 before returning to current
levels.
Funding
As at 30 September 2018, the Group held cash balances of GBP648k
and had drawn down GBP1m of its GBP2.25m unsecured loan note
facility with Bybrook Finance Solutions Limited ("BFSL"). A further
GBP0.5m was drawn down on 1 November 2018 under this facility.
Rajan Uppal, a director of PVG, is the sole shareholder and
director of BFSL.
As previously announced, PVG requires additional funding to
support the directors' going concern assessment, maximise the
growth opportunities that the Group has developed and to reach
overall profitability. A financing package has been negotiated with
BFSL to provide a secured loan facility providing GBP2.0m in
addition to the GBP1.5m already drawn.
The full Board has sought alternative funding options and the
non-conflicted directors of PVG, have negotiated terms with BFSL on
behalf of the Group. Having taken external advice and considered
the possibility of raising alternative sources of finance within
the timescales required the Board has concluded that the BFSL
proposal is the best available at the current time and will provide
the Group with the funding to maximise growth opportunities which
are in the best interests of all stakeholders of the Company.
Accordingly, on 29 January 2019 the Group announced it had
entered into a loan agreement with BFSL whereby BFSL has agreed to
provide a committed loan facility of GBP3.85m repayable by the
Group on or before 25 April 2019 with the Group having the ability
to extend the repayment date to 25 January 2021 by issuing warrants
to BFSL to subscribe for up to 767,347 new PVG GBP0.10 ordinary
shares within 5 years of the issue of those warrants. GBP1.85m of
this facility was drawn by the Group to repay the outstanding 2018
loan notes previously issued to BFSL and the arrangement fee of
GBP0.35m on the new facility. The remaining GBP2.0m was drawn down
on completion of the loan agreement. The balance of the 2018 loan
notes is no longer available for draw down. Crossroads Finance
Limited, a company jointly owned and controlled by Dominic Tonner,
Chief Executive Officer of PVG, and his spouse, has participated in
the funding by entering into direct arrangements with BFSL.
Pension scheme
The Group operates a defined contribution pension scheme and the
pension charge represents the amounts payable by the Group to the
fund and into personal arrangements in respect of the year.
Going Concern
The consolidated financial statements have been prepared on a
going concern basis. The Group made a loss from continuing
operations of GBP3,567k in the year ended 30 September 2018 and
ended the year with net liabilities of GBP254k. As at 30 September
2018, the Group had cash and short-term deposits of GBP648k.
In order to ensure that the Group has sufficient cash resources
for the foreseeable future, PVG entered into a new facility with
Bybrook Finance Solutions Limited ("BFSL").
The directors consider that with its current cash reserves and
the additional funds available from the committed funding facility,
the Group has sufficient resources to meet all current liabilities
as they fall due. After consideration of market conditions, the
Group's financial position, the Group's forecasts and projections,
which allow for reasonable possible changes in trading performance
and after making enquiries, the directors have a reasonable
expectation that the Group and the Company have adequate resources
to continue in operational existence for the foreseeable future.
For these reasons, the directors continue to adopt the going
concern basis in preparing the financial statements.
Outlook
The business has recently commenced a full roll out of a
significant contract in the USA. This demonstrates that the
substantial and consistent investment in our global transaction
platform is now delivering significant and measurable benefits with
competitive advantage to our company. Furthermore, our people's
focus on customer service and technical capability has enabled us
to secure this contract in the face of strong competition.
The business looks forward to working with our customers to
support the growth of their businesses in innovative and exciting
ways. Management expect that this contract will also lead to
further major opportunities for growth. The successful roll out in
the USA substantially underpins PVG's growth expectations and
profitability for 2019 and beyond.
I look forward to announcing future developments throughout the
coming 12 months.
Dominic Tonner
Chief Executive Officer
Premier Veterinary Group plc
30 January 2019
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE
FINANCIAL STATEMENTS
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have prepared the group financial statements in accordance with
International Financial Reporting Standards ("IFRSs") as adopted by
the European Union and company financial statements in accordance
with International Financial Reporting Standards ("IFRSs") as
adopted by the European Union. Under company law the directors must
not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the group
and company and of the profit or loss of the group and company for
that period.
In preparing the financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRSs as adopted by the European
Union have been followed for the group financial statements and
IFRSs as adopted by the European Union have been followed for the
company financial statements, subject to any material departures
disclosed and explained in the financial statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and company
will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the group and
company's transactions and disclose with reasonable accuracy at any
time the financial position of the group and company and enable
them to ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regard to the group financial statements, Article 4 of the IAS
Regulation.
The directors are responsible for the maintenance and integrity
of the company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Directors' confirmations
The directors consider that the Annual Report and Financial
Statements, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the group and company's position and performance, business model
and strategy.
In the case of each director in office at the date the
Directors' Report is approved:
-- so far as the director is aware, there is no relevant audit
information of which the group and company's auditors are unaware;
and
-- they have taken all the steps that they ought to have taken
as a director in order to make themselves aware of any relevant
audit information and to establish that the group and company's
auditors are aware of that information.
By order of the Board
Graham Dick Dominic Tonner
Director Director
30 January 2019 30 January 2019
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR YEARED 30 SEPTEMBER 2018
Year ended Year ended
30 September 30 September
2018 2017
Note GBP'000 GBP'000
Revenue 4 3,152 2,534
Cost of sales (165) (74)
-------------- --------------
Gross profit 2,987 2,460
Administrative expenses (6,483) (6,568)
-------------- --------------
Loss from operations (3,496) (4,108)
Finance expense (102) (161)
-------------- --------------
Loss before income tax (3,598) (4,269)
Income tax credit 31 -
-------------- --------------
Loss from continuing operations (3,567) (4,269)
Profit on discontinued operations, net
of tax - 5,890
(Loss)/profit for the year (3,567) 1,621
============== ==============
Exchange differences on translation of -
foreign operations 6
Total comprehensive (expense)/income for
the year attributable to equity holders
of the parent company (3,561) 1,621
Loss per share for loss from continuing
operations attributable to the owners of
the parent during the year:
Basic (pence) 5 (23.2) (28.2)
Diluted (pence) 5 (22.6) (27.6)
-------------- --------------
(Loss)/earnings per share for profit attributable
to the owners of the parent during the
year:
Basic (pence) 5 (23.2) 10.7
Diluted (pence) 5 (22.6) 10.5
-------------- --------------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2018
As at 30 As at 30
September September
2018 2017
Note GBP'000 GBP'000
Non-current assets
Property, plant and equipment 32 63
Other intangible assets 471 432
Total non-current assets 503 495
Current assets
Trade and other receivables 6 534 705
Cash and cash equivalents 648 3,218
----------- -----------
Total current assets 1,182 3,923
Total assets 1,685 4,418
=========== ===========
Equity attributable to equity holders of
the Company
Called up share capital 1,535 1,535
Share premium 5 5
Share based payments reserve 35 35
Reverse acquisition reserves 3,671 3,671
Accumulated losses (5,500) (1,939)
----------- -----------
Total equity (254) 3,307
Current liabilities
Trade and other payables 703 845
Current tax liabilities 133 132
Total current liabilities 836 977
Non-current liabilities
Loans and borrowings 7 1,000 -
Deferred tax provision 103 134
----------- -----------
Total non-current liabilities 1,103 134
Total liabilities 1,939 1,111
Total equity and liabilities 1,685 4,418
=========== ===========
The financial statements were approved and authorised for issue
by the Board and authorised for issue on 30 January 2019. They were
signed on its behalf:
Dominic Tonner Graham Dick
Director Director
30 January 2019 30 January 2019
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR YEARED 30 SEPTEMBER 2018
Share
Called based Reverse
up Share Share payments acquisition Accumulated Total
capital premium reserve reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 October
2016 1,491 1 35 3,671 (3,560) 1,638
Transactions with owners:
Shares issued (options exercised) 44 4 - - - 48
Profit and total comprehensive
income for the year: - - - - 1,621 1,621
Balance as at 30 September
2017 and 1 October 2017 1,535 5 35 3,671 (1,939) 3,307
Loss for the year: - - - - (3,567) (3,567)
Other comprehensive income
for the year: - - - - 6 6
Balance as at 30 September
2018 1,535 5 35 3,671 (5,500) (254)
========== ========= ========== ============= ============ ========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR YEARED 30 SEPTEMBER 2018
Year ended Year ended
30 September 30 September
2018 2017
GBP'000 GBP'000
Cash flows from:
Continuing operating activities
Loss before income tax (3,598) (4,269)
Finance expense 102 161
Depreciation of property, plant and equipment 36 26
Amortisation of intangible assets 211 108
Decrease in trade and other receivables 181 14
Decrease in trade and other payables (140) (88)
------------- -------------
Cash used in continuing operations (3,208) (4,048)
Discontinued operating activities - 338
------------- -------------
Cash used in operations (3,208) (3,710)
Income taxes - -
------------- -------------
Net cash used in operating activities (3,208) (3,710)
Investing activities
Purchase of property, plant and equipment (10) (25)
Purchase of intangible assets (250) (251)
------------- -------------
Net cash used in continuing investing
activities (260) (276)
Discontinued investing activities - 6,963
------------- -------------
Net cash (used in)/generated from investing
activities (260) 6,687
Financing activities
Issue of new shares (net of costs) - 48
Loan notes issued and other loans received 1,000 350
Repayment of loan notes - (1,250)
Interest paid (102) (161)
------------- -------------
Net cash generated from/(used in) financing
activities 898 (1,013)
Net (decrease)/increase in cash and cash
equivalents (2,570) 1,964
Cash and cash equivalents at beginning
of year 3,218 1,254
Cash and cash equivalents at end of year 648 3,218
============= =============
Shown as:
Cash and cash equivalents 648 3,218
============= =============
SELECTED NOTES TO THE FINANCIAL INFORMATION
1 Presentation of financial information
These results for the year ended 30 September 2018 are an
excerpt from the Annual Report and do not constitute the Company's
statutory accounts for the year ended 30 September 2018.
PricewaterhouseCoopers LLP reported on the accounts for the year
ended 30 September 2018. Their report for the year ended 30
September 2018 was unqualified and did not contain statements under
Sections 498(2) or (3) of the Companies Act 2006 or equivalent
preceding legislation.
Whilst the financial information included in this annual results
release has been prepared in accordance with International
Financial Reporting Standards ("IFRS") adopted by the European
Union, this announcement does not itself contain sufficient
information to comply with IFRS. Full Financial Statements that
comply with IFRS are included in the Annual Report which will be
available at www.premiervetgroup.co.uk and hard copies distributed
in due course.
2 Going concern
The consolidated financial statements have been prepared on a
going concern basis. The Group made a loss from continuing
operations of GBP3,567k in the year ended 30 September 2018 and
ended the year with net liabilities of GBP254k. As at 30 September
2018, the Group had cash and short-term deposits of GBP648k.
On 25 January 2019 the Group entered into a loan agreement with
Bybrook Finance Solutions Limited ("BFSL") whereby BFSL has agreed
to provide a committed loan facility of GBP3.85m repayable by the
Group on or before 25 April 2019 with the Group having the ability
to extend the repayment date to 25 January 2021 by issuing warrants
to BFSL to subscribe for up to 767,347 new PVG GBP0.10 ordinary
shares within 5 years of the issue of those warrants. GBP1.85m of
this facility was drawn by the Group to repay the outstanding 2018
loan notes previously issued to BFSL and the arrangement fee of
GBP0.35m on the new facility. The remaining GBP2.0m was drawn down
on completion of the loan agreement. The balance of the 2018 loan
notes is no longer available for draw down. Rajan Uppal, a director
of the Company, is the sole shareholder and director of BFSL.
Crossroads Finance Limited, a company jointly owned and controlled
by Dominic Tonner, Chief Executive Officer of PVG, and his spouse,
has taken part in the PVG funding by entering into direct
arrangements with BFSL. Further information relating to the
arrangements with BFSL is set out in note 24 to the financial
statements.
The directors consider that with its current cash reserves and
the additional funds available from the new committed funding
facility outlined above that the Group has sufficient resources to
meet all current liabilities as they fall due. After consideration
of market conditions, the Group's financial position, the Group's
forecasts and projections, which allow for reasonable possible
changes in trading performance and after making enquiries, the
directors have a reasonable expectation that the Group and the
Company have adequate resources to continue in operational
existence for the foreseeable future. For these reasons, the
directors continue to adopt the going concern basis in preparing
the financial statements.
3 Employee remuneration
Year ended 30 September 2018 Year ended 30 September 2017
Continuing Discontinued Total Continuing Discontinued Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Wages and salaries 3,126 - 3,126 3,491 106 3,597
Social security costs 503 - 503 242 17 259
Other pension costs 66 - 66 30 - 30
Total 3,695 - 3,695 3,763 123 3,886
----------- ------------- -------- ----------- ------------- --------
The average monthly number of employees during the year was as
follows:
Year ended 30 September 2018 Year ended 30 September 2017
Continuing Discontinued Total Continuing Discontinued Total
Directors 5 - 5 6 - 6
Management 7 - 7 7 1 8
Finance 5 - 5 5 1 6
IT 4 - 4 4 - 4
Customer Services 7 - 7 8 - 8
Sales 9 - 9 10 - 10
Trainers 18 - 18 18 - 18
----------- ------------- ------ ----------- ------------- ------
Total 55 - 55 58 2 60
----------- ------------- ------ ----------- ------------- ------
4 Segmental reporting
Management have defined operating segments as those on which
results are considered by the Management team. Central
administrative expenses (including amortisation, impairment and
depreciation), finance costs and income tax expenses are monitored
centrally and are not allocated to operating segments. Further to
this, assets and liabilities are not allocated to operating
segments as they are shared by the Group. All Group Non-Current
assets are located in the UK. These operating segments are
monitored, and strategic decisions are made on the basis of
adjusted segment operating results.
The Premier Pet Care Plan ("PPCP") business is organised in
three geographical regions as follows:
-- PPCP United Kingdom
-- PPCP Europe (including Republic of Ireland)
-- PPCP USA
All revenue is derived from external customers.
Prior to disposal the Premier Buying Group was a separate
operating segment.
Total Continuing Discontinued
PPCP UK PPCP Europe PPCP USA operations operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 30 September
2018
Group's revenue
per consolidated
statement of comprehensive
income 1,985 808 359 3,152 - 3,152
Gross profit 1,939 761 287 2,987 - 2,987
Administrative
expenses (1,517) (1,635) (1,755) (4,907) - (4,907)
-------- ------------ --------- ----------------- ------------- --------
Profit/(loss) before
central costs 422 (874) (1,468) (1,920) - (1,920)
Central unallocated
administrative
costs (1,576) - (1,576)
Finance expense (102) - (102)
(Loss)/Profit before
income tax (3,598) - (3,598)
================= ============= ========
Year ended 30 September
2017
Group's revenue
per consolidated
statement of comprehensive
income 1,873 493 168 2,534 579 3,113
======== ============ ========= ================= ============= ========
Gross profit 1,839 467 154 2,460 579 3,039
Administrative
expenses (1,266) (1,533) (2,223) (5,022) (276) (5,298)
-------- ------------ --------- ----------------- ------------- --------
Profit/(loss) before
central costs 573 (1,066) (2,069) (2,562) 303 (2,259)
Central unallocated
administrative
costs (1,546) - (1,546)
Gain on disposal - 5,843 5,843
Finance expense (161) - (161)
Tax on gain on
disposal - (256) (256)
----------------- ------------- --------
(Loss)/Profit before
income tax (4,269) 5,890 1,621
================= ============= ========
Year Year
ended 30 ended 30
September September
2018 2017
Revenue GBP'000 GBP'000
Denmark 24 46
Ireland 21 19
Netherlands 537 394
France 225 32
Germany 1 2
USA 359 168
UK 1,985 1,873
------------ ----------
Continuing 3,152 2,534
Discontinued - UK - 579
Total 3,152 3,113
============ ==========
5 Earnings per share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year. For the
purposes of this calculation, the weighted average number of shares
is the number of ordinary shares in the year.
Diluted earnings per share are calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all potentially dilutive ordinary shares.
Year ended 30 September 2018 Year ended 30 September 2017
Continuing Discontinued Total Continuing Discontinued Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Loss)/Profit for the year (3,567) - (3,567) (4,269) 5,890 1,621
No. No. No. No. No. No.
Weighted average number of shares
used in basic earnings per share 15,346,950 15,346,950 15,346,950 15,130,373 15,130,373 15,130,373
Effect of dilutive potential
ordinary shares from share
options and warrants 399,035 399,035 399,035 348,595 348,595 348,595
------------ ------------- ----------- ----------- ------------- -----------
Weighted average number of shares
used in diluted earnings per
share 15,745,985 15,745,985 15,745,985 15,478,968 15,478,968 15,478,968
------------ ------------- ----------- ----------- ------------- -----------
6 Trade and other receivables
As at 30 September 2018 As at 30 September 2017
GBP'000 GBP'000
Trade receivables 286 457
Other receivables 39 -
Prepayments and accrued income 209 248
------------------------ ------------------------
534 705
------------------------ ------------------------
All amounts are considered to be receivable within one year. The
net carrying value of trade and other receivables is considered a
reasonable approximation of fair value.
The ageing analysis of trade receivables is as follows.
Management considers GBP36k (2017: GBPNil) of the Group's
receivables to be impaired and has deducted this amount from the
'more than 12 months' row in arriving at the following.
As at 30 As at
September 30 September
2018 2017
GBP'000 GBP'000
Up to 3 months 80 223
3 to 6 months 46 234
6 to 12 months 124 -
More than 12 months 36 -
----------- --------------
286 457
----------- --------------
Trade and other receivables have not been discounted. The
accrued income has not been discounted.
7 Loans and borrowings
As at 30 As at 30
September September
2018 2017
GBP'000 GBP'000
Non-current
Loan notes 1,000 -
1,000 -
------ ---
On the 1 June 2018 the Company issued GBP500,000 of unsecured
loan notes to Bybrook Finance Services Limited ("BFSL"). On 3
September 2018, the Company issued a further GBP500,000 of
unsecured loan notes to BFSL. The Company has the right to repay
the loan notes in full or in part before maturity. These loan notes
are due for repayment 24 months after the draw down date. Further
details in respect of the loan notes are provided in note 21 to the
financial statements.
These notes have been refinanced under the new loan facility
announced 29 January 2019 as described in note 24 to the financial
statements.
As at 30 September 2018 As at 30 September 2017
Ageing of loan notes: GBP'000 GBP'000
Repayable within 1 - 2 years 1,000 -
1,000 -
------------------------ ------------------------
8 Called up share capital
Ordinary shares Total
No. GBP'000 GBP'000
Shares at 1 October
2016 (Ordinary 10
pence) 14,907,433 1,491 1,491
Share options and
warrants exercised 439,517 44 44
Shares at 1 October
2017 (Ordinary 10
pence) 15,346,950 1,535 1,535
Share options and
warrants exercised - - -
Shares at 30 September
2018 (Ordinary 10
pence) 15,346,950 1,535 1,535
=========== ======== ========
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 CKKDNFBKDDDN
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