TIDMREAT
RNS Number : 4891J
React Group PLC
29 June 2017
REACT Group plc
("React" or the "Company")
INTERIM RESULTS FOR THE 6 MONTHSED 31 MARCH 2017
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
REACT Group Plc announces its half year results for the period
ended 31 March 2017.
This has been a period of consolidation and reassessment of the
business, with the closure of EPUK and concentration on improving
the core business React Specialist Cleaning Ltd and the other
businesses within the group, React Occupational Hygiene Ltd
("ROHSL") and React Environmental Services Ltd ("RES").
Financial Results
The Group results for the period ending 31 March 2017 are set
out in the Consolidated Statement of Comprehensive Income. Turnover
for the period was GBP1.27m against GBP1.178m in the previous half
year to March 2016. The loss for the 6 months to 31 March 2017
stood at GBP0.192 million of which GBP0.028 million was
attributable to the closing down costs associated with EPUK. The
cash balance at 31 March stood at GBP0.847 million (2016:
GBP1.385m).
Strategy
Following the disappointing performance of EPUK resulting in its
closure, announced in December, the Company is now concentrating on
improving the performance of its remaining businesses within the
Group. The Company does not intend making any further acquisitions
in the foreseeable future. As part of the strategy to build on the
core business, React Specialist Cleaning, two new salespeople have
been recruited to drive for more new sales, but we expect it will
take time to see the benefit of that investment. ROHSL has been
restructured and sales are now improving. The weakest of the three
businesses is RES, which despite being awarded a new two year
asbestos licence, which is a major win for a new licence holder,
continues to perform below expectations and its future within the
Group remains under review.
Current Trading
By concentrating on the three remaining businesses the overall
performance of the Group has begun to improve, driven by React
Specialist Cleaning Ltd and ROHSL. In addition to working for
longstanding clients React Specialist Cleaning Ltd has, via a major
Facilities Management ("FM") company, secured work at a major
London hospital to supply labour to clean wards, operating theatres
and public areas on a daily/nightly basis, involving approximately
20 members of staff.
ROHSL was restructured and sales are now coming through at the
level we anticipated and the team has built a relationship with a
nationwide dental practice to provide a range of services, which
seems to be becoming a good steady flow of sales and profit.
Asbestos is proving a difficult business to grow. Our sales are
much slower than we had originally hoped, however the team continue
to work at building a sales pipeline.
A new administrative computer system is being installed, which
will give a higher level of visibility and improve our controls
going forward across all the businesses.
Outlook
Our marketplace is shifting with a number of our customers
moving to a more FM managed service. We have retained most of the
business but at a lower margin, and in some cases have increased
sales. The Company has added some prestigious new clients and
continues to work to add sales and control costs to enable it to
continue to improve its financial performance in the second half of
the year.
G.M. Leates
Chairman
28 June 2017
For further information, please contact:
REACT Group plc
Gill Leates - Chairman 07799 662642
SPARK Advisory Partners Limited
Neil Baldwin 0113 370 8974
Mark Brady 0113 379 8971
Whitman Howard Limited
Nick Lovering 0207 659 1224
Walbrook PR Ltd 020 7933 8780
Anna Dunphy Mob: 07876 741 001
REACT Group Plc
Consolidated Statement of Comprehensive Income
For the six months ended 31 March 2017
Note 6 months 6 months Year to
ended ended 30 September
31 March 31 March 2016
2017 2016
GBP'000 GBP'000 GBP'000
Continuing Operations
Revenue 1,270 1,178 2,432
Cost of Sales (934) (648) (1,419)
----------- --------------
Gross Profit 336 530 1,013
Administrative expenses (500) (560) (1,159)
Operating loss (164) (30) (146)
Income tax expense - - (1)
Loss for the period from continuing
operations (164) (30) (147)
Loss for the period from discontinued
operations (28) - (141)
----------- ----------- --------------
Loss for the period (192) (30) (288)
Other Comprehensive Income - - -
Loss for the financial period
attributable to equity holders
of the company (192) (30) (288)
=========== =========== ==============
Loss per share for loss attributable
to the equity holders of the
company (pence) on continuing
activities
Basic and diluted loss per ordinary
share
From continuing operations (0.06p) (0.01p) (0.05p)
From discontinuing operations 4 (0.01p) - (0.05p)
=========== =========== ==============
REACT Group Plc
Consolidated Statement of Financial Position
As at 31 March 2017
Note As at As at As at
31 March 31 March 30 September
2017 2016 2016
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Intangibles 1,444 1,466 1,444
Property, plant and equipment 173 237 252
----------
1,617 1,703 1,696
---------- ---------- --------------
Current assets
Trade and other receivables 1,069 624 788
Cash and cash equivalents 847 1,385 931
1,916 2,009 1,719
--------------
Total assets 3,533 3,712 3,415
========== ========== ==============
Equity
Shareholders' Equity
Called-up equity share capital 5 689 689 689
Share premium account 4,889 4,889 4,889
Reverse acquisition reserve (5,726) (5,726) (5,726)
Capital redemption reserve 3,337 3,337 3,337
Merger relief reserve 1,328 1,328 1,328
Share based payments 30 5 22
Accumulated losses (1,689) (1,239) (1,497)
Total Equity 2,858 3,283 3,042
---------- ---------- --------------
Liabilities
Current liabilities
Trade and other payables 654 409 352
Non-current liabilities
Deferred tax liability 21 20 21
Total liabilities 675 429 373
---------- ----------
Total Liabilities and Equity 3,533 3,712 3,415
========== ========== ==============
REACT Group Plc
Consolidated Statement of Cash Flows
For the six months ended 31 March 2017
Note 6 months 6 months Year to
ended ended 30 September
31 March 31 March 2016
2017 2016
GBP'000 GBP'000 GBP'000
Net cash used in operating activities (78) (317) (698)
Net cash from investing activities
Purchases of property, plant
and equipment (6) (137) (210)
Net cash outflow from investing
activities (6) (137) (210)
---------- ---------- --------------
Net cash from financing activities
Net proceeds from issue of equity
shares - - -
Net increase in cash, cash equivalents
and overdrafts (84) (454) (908)
Cash, cash equivalents and overdrafts
at beginning of period 931 1,839 1,839
Cash, cash equivalents and overdrafts
at end of period 847 1,385 931
========== ========== ==============
Reconciliation of operating 6 months 6 months Year to
loss to net cash outflow from ended ended 30 September
operating activities 31 March 31 March 2016
2017 2016
GBP'000 GBP'000 GBP'000
Operating loss from continuing
activities (192) (30) (288)
Depreciation and amortisation 90 86 163
Share based payments 8 5 22
Operating cash flows before
movements in working capital (94) 61 (103)
---------- ---------- --------------
(Increase)/decrease in receivables (281) 140 (24)
Increase/(decrease) in payables 297 (518) (571)
----------
Net movement in working capital 16 (378) (595)
---------- ---------- --------------
Net cash outflow from operating
activities (78) (317) (698)
========== ========== ==============
REACT Group Plc
Consolidated Statement of Changes in Equity
Six months ended 31 March 2017
Share
Merger Capital Reverse Based
Share Share Relief Redemption Accumulated Acquisition Payments Total
Capital Premium Reserve Reserve Deficit Reserve Reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30 September
2015 689 4,889 1,328 3,337 (1,209) (5,726) - 3,308
Options issued
in the period - - - - - - 5 5
Loss for the
period - - - - (30) - - (30)
At 31 March
2016 689 4,889 1,328 3,337 (1,239) (5,726) 5 3,283
--------- --------- --------- ------------ ------------ ------------- ---------- --------
Options issued
in the period - - - - - - 17 17
Loss for the
period - - - - (258) - - (258)
At 30 September
2016 689 4,889 1,328 3,337 (1,497) (5,726) 22 3,042
--------- --------- --------- ------------ ------------ ------------- ---------- --------
Options issued
in the period - - - - - - 8 8
Loss for the
period - - - - (192) - - (192)
At 31 March
2017 689 4,889 1,328 3,337 (1,689) (5,726) 30 2,858
--------- --------- --------- ------------ ------------ ------------- ---------- --------
REACT Group Plc
Notes to the interim financial statements
1. Basis of preparation
These consolidated interim financial statements have been
prepared in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union and on a
historical basis, using the accounting policies which are
consistent with those set out in the Group's annual report and
accounts for the period ended 30 September 2016. The interim
financial information for the six months to 31 March 2017, which
complies with IAS 34 'Interim Financial Reporting' has been
approved by the Board of Directors on 28 June 2017.
The unaudited interim financial information for the period ended
31 March 2017 does not constitute statutory accounts within the
meaning of Section 435 of the Companies Act 2006. The comparative
figures for the period ended 30 September 2016 are extracted from
the statutory financial statements which have been filed with the
Registrar of Companies and contain an unqualified audit report and
did not contain statements under Section 498 to 502 of the
Companies Act 2006.
2. Principal Accounting Policies
The principal accounting policies adopted are consistent with
those of the annual financial statements for the period ended 30
September 2016 and are those expected to be applied for the year
ending 30 September 2017.
New and amended standards adopted by the group
There are no IFRSs or IFRIC interpretations that are effective
for the first time in this financial period that would be expected
to have a material impact on the group.
3. Segmental Reporting
In the opinion of the directors, the group has one class of
business, being that of specialist cleaning and decontamination
services. The group's primary reporting format is determined by the
geographical segment according to the location of its
establishments. There is currently only one geographic reporting
segment, which is the UK. All costs are derived from the single
segment.
4. Loss per Share
The loss per ordinary share has been calculated on the loss on
ordinary activities after taxation of GBP192,000 (30 September
2016: GBP288,000; 31 March 2016 GBP30,000) using the weighted
average number of ordinary shares in issue during the period being
275,407,753 (30 September 2016: 275,407,753; 31 March 2016:
275,407,753).
Basic and diluted earnings per share are the same, since where a
loss is incurred the effect of outstanding share options and
warrants is considered anti-dilutive and is ignored for the purpose
of the loss per share calculation. As at 31 March 2017 there were
19,104,464 (30 September 2016: 19,104,464; 31 March 2016:
19,104,464) outstanding share warrants and options which are
potentially dilutive.
5. Called up Share Capital
The issued share capital as at 31 March 2017 was 257,407,753
Ordinary Shares of 0.25 pence per share (30 September 2016:
257,407,753 Ordinary Shares of 0.25 pence per share as per the
audited accounts; 31 March 2016: 257,407,753).
There were no share issues during the interim period or the
comparative periods.
6. Share Options
On 30 November 2015, the Company issued EMI options for
16,524,464 new ordinary shares in the Company exercisable at a
price of 1.68p per GBP0.025 ordinary share, exercisable after 3
years. The options have a 10 year exercise period ending on 29
November 2025.
No options were exercised in the period.
The fair value of the share options issued in the current period
on 20 November 2015 with an exercise price of 1.68p is 0.38p and
was derived using the Black Scholes model. The following
assumptions were used in the calculations:
Share price at
grant date 1.68p
Risk-free rate 0.25%
Volatility 30%
Expected life 10 years
Expected volatility is based on a conservative estimate for the
Company. The expected life used in the model has been adjusted,
based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural
considerations.
GBP8,000 (March 2016: GBP5,000) has been recognised during the
period for the share based payments over the vesting period.
7. Post balance sheet events
There were no post balance sheet events.
8. Availability
Copies of this Interim Report are available from the Company
Secretary, Finsgate 5-7 Cranwood Street, London, EC1V 9EE, and on
the Company's website www.reactplc.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FPMFTMBJTBFR
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