News

Interim Results 2018

25 September 2018

Premier Technical Services Group PLC
(“PTSG” or the “Group”)

Interim Results 2018

Strong growth with record turnover and profits

 

Premier Technical Services Group PLC (“PTSG” or the “Group”), the niche specialist services provider, announces its interim results for the six months ended 30 June 2018.

Key highlights

 

 

John Foley, Chairman of PTSG, commenting on the interim results said:

“The first half of 2018 was a period of internal focus to integrate the three acquisitions made in 2017 into PTSG as well as a period of external communication and delivery to ensure that our customer base understood and reacted favourably to the new divisional structure that was implemented in 2017. Both objectives were successfully achieved and I am pleased to report continuing record levels of turnover, gross profit, adjusted EBITDA and adjusted earnings per share were achieved in the period.

Our principal objective is to build a Group which is the UK’s leading provider of clearly identified niche specialist services to customers in the facilities management, construction and property sectors. Our focus on compliance to a demanding set of safety standards remains foremost in our thoughts and actions. We continue to see and develop further opportunities which can assist the Group to achieve its stated principal objectives and the pipeline of potential acquisitions remains both healthy and full.

We remain both confident about continuing the positive revenue and profit momentum which is evident in the Group’s results for the first six months of 2018 and also enthusiastic about our prospects for the future.”

* before adjusting items of £4.2m (2017: £2.4m) resulting in a statutory operating profit of £1.7m (2017: £2.0m) and eps of 1.06p (2017: 1.15p)

Enquiries:

PTSG +44 (0)1977 668 771
Paul Teasdale, Chief Executive Officer
Numis Securities +44 (0)20 7260 1000
Stuart Skinner / Kevin Cruickshank / Michael Burke
Hudson Sandler +44 (0)20 7796 4133
Charlie Jack / Hattie O’Reilly

About PTSG – www.ptsg.co.uk

Premier Technical Services Group PLC is the UK’s leading provider of façade access and fall arrest equipment services, lightning protection and electrical testing, high-level cleaning and training solutions.

Operating through four divisions, Access & Safety, Electrical Services, High Level Cleaning and Training Solutions, the Group provides highly-engineered industrial products and quality services and has a substantial presence in a number of niche markets.

PTSG provides a central information service for its businesses and champions the dissemination of key information and best practice. PTSG unites its constituent businesses under one clear identity, which supports smarter working and delivers top class service to its customers.

Headquartered in Castleford, West Yorkshire, the Group employs more than 600 people across 17 UK sites, who service more than 150,000 buildings across the whole of the UK for over 17,000 customers in a wide range of industries.  The Company is listed on the LSE AIM (PTSG.L)

Chairman’s statement

Overview
The first half of 2018 was a period of internal focus to integrate the three acquisitions made in 2017 into PTSG as well as a period of external communication and delivery to ensure that our customer base understood and reacted favourably to the new divisional structure that was implemented in 2017. Both objectives were successfully achieved and I am pleased to report continuing record levels of turnover, gross profit, adjusted EBITDA and adjusted earnings per share were achieved in the period.

Acquisitions
All three acquisitions made in 2017 have made a strong contribution within PTSG. The acquisitions of Nimbus Lightning Protection Ltd and Brook Edgley (Industrial Chimneys) Ltd (“BEST”) confirmed our position as market leader in the UK Lightning Protection sector. The acquisition of UK Sprinklers Ltd enhanced the capabilities of our recently created Fire Solutions Division and the growth in the size and scale of this particular business has been spectacular since its acquisition in September 2017.

The successful integration of these 2017 acquisitions into PTSG enabled us to make a further acquisition on 5 July 2018 to further strengthen and extend the offering of our Fire Solutions Division. M & P Fire Protection Ltd which is based in Maidstone is a specialist in the installation and maintenance of sprinkler, dry and wet riser systems was acquired for a total consideration of up to £3.5m, comprising an initial cash payment of £1.0m with deferred cash payments of £2.5m payable over five years subject to the business achieving stretching and escalating milestone profitability targets in each of these periods.

Financial overview
Turnover increased by 38% to £30.2m (H1 2017: £21.9m). Gross profit increased by 37% to £15.4m (H1 2017: £11.2m). Adjusted EBITDA increased by 36% to £6.9m (H1 2017: £5.1m). Underlying profit before taxation (before adjusting items of £4.3m) increased by 37% to £5.6m (H1 2017: £4.1m). Adjusted earnings per share increased by 30% to 5.03 pence (H1 2017: 3.86 pence). The Board has recommended an interim dividend of 0.9 pence which will be paid on 26 October 2018 to shareholders on the register at 5 October 2018.

Net debt at 30 June 2018 was £11.8m (£18.3m at 31 December 2017) and benefitted from a £4.2m receipt in June from Mr R Teasdale, to cover the tax payments on his previously awarded share based payments, which was paid to the HMRC in early Q3. Excluding this, the underlying net debt would have been £16.0m, a £2.3m reduction from the year end, due to improved trading cash conversion which increased to 81% in the period.

Operational highlights
PTSG’s established operating model delivers sustainable high margins together with industry leading renewal rates. Results for H1 2018 show gross margins of 51% (H1 2017: 51%) and adjusted operating margins of 19.5% (H1 2017: 20%). Contract renewal rates in our core maintenance divisions were once again in excess of 88% during H1 2018 and the Group’s underlying organic revenue growth rate was 14 % during the period.

The fastest organic growth rates are currently being experienced by our Fire Solutions Division. As an example, the turnover of UK Sprinklers Ltd for the 12 months prior to its acquisition in September 2017 was exceeded in the first 6 months of 2018 and its annualised operating profits have increased by just over 300%. This example of profitable growth is not simply the result of an operation finding itself in the right place at the right time; it is also the result of a positive application of PTSG’s operating model.

The same successful result can be seen in BEST’s Testing and Inspection business; it had a 50% contract renewal rate at the time of its acquisition in September 2017 and had no 3/5 year contracts; the renewal rate for June 2018 was 85% and the number of 3/5 year contracts was 610. In addition, its operating margin had increased by 15%.

The new divisional structure has been well received by our customers and the recently created national sales team has secured a number of significant new multi-disciplinary contract wins. The Chief Executive’s review provides further detail about operational performance and contract wins.

Strategy
Our principal objective is to build a Group which is the UK’s leading provider of clearly identified niche specialist services to customers in the facilities management, construction and property sectors. Our focus on compliance to a demanding set of safety standards remains foremost in our thoughts and actions.

We undertake acquisitions to seek sector dominance in the provision of those clearly identified services where our established operating model can be put to good effect. We continue to see and develop further opportunities which can assist the Group to achieve its stated principal objectives and the pipeline of potential acquisitions remains both healthy and full. The Group is now at a stage where further acquisitions will seek to increase the relative percentage of compliance related turnover since gross margins on this type of work are higher and more sustainable than in installation related activity and provides better visibility of revenues; the Group’s infrastructure is well enough developed to take on further opportunities in the compliance area.

Outlook
We remain both confident about continuing the positive revenue and profit momentum which is evident in the Group’s results for the first six months of 2018 and also enthusiastic about our prospects for the future.

John Foley
Chairman

25 September 2018

 

Chief Executive’s review

Overview
Change is inevitable in business and those organisations that embrace change are far more likely to succeed. PTSG is evolving to remain at the cutting edge of market demands and as a result, business has never been better.

Following the introduction of new businesses incorporating dry and wet risers and sprinklers in 2016 and 2017, our Fire Solutions division is already experiencing ever-greater demand – well beyond our initial forecasts.

Testing and compliance are at the core of our service provision. This is true for the Group as a whole, but is perhaps most visible in Fire Solutions. It means delivering a consistently high level of workmanship to meet a rigorous set of demands. This is one of the ways in which we add value for our clients, giving them reassurance that the work we do not only keeps their buildings legally safe, but is of the highest possible standard.

An interesting development within facilities management this year has been the passing of a resolution to change the name of the British Institute of Facilities Management to the Institute of Workplace and Facilities Management. PTSG has always been a supporter of forward-thinking industry bodies such as BIFM, and was fully on board with this development. The name change signifies a culture change in the industry, giving greater emphasis to the term ‘workplace’.

This wholly resonates with PTSG; whilst we understand that the workplace varies widely from organisation to organisation and sector to sector, our specialists uphold the same high standards in the different sectors within the facilities management industry.

The importance of Fire Solutions
It is a fact that since the Grenfell Tower tragedy in 2017, awareness of accountability for ensuring buildings are compliant and users remain safe has heightened. Compliance is a legal requirement where fire risk in buildings is involved. However, meeting the latest regulations shouldn’t be the sole motivation for building owners and managers in safeguarding their assets.

The safety and wellbeing of all building users, including engineers performing any kind of work, should always be a priority. It’s how we at PTSG work. Indeed, since day one we have worked to the principle: “If it can’t be done safely, we won’t do it”. PTSG’s Fire Solutions division is currently testing systems within Grenfell Tower. With new regulations for fire safety and a heightened awareness throughout the industry for implementing safe practices, it has never been more important to adhere to our safety principle.

Our recent acquisition of M&P Fire Protection Ltd. signals the Group’s intention to further expand our Fire Solutions division. When growth in our dry risers and sprinklers businesses reaches a level that meets our expectation, we aim to add addressable fire systems to our portfolio. This will see Fire Solutions offering a truly comprehensive range of services to enable buildings of all kinds, in all sectors to be as safe and compliant as possible.

Acquisition key to success
Even though Fire Solutions is the newest of the PTSG’s divisions, it is already showing incredibly strong signs of success. Our move into this important area of work began with the acquisition of UK Dry Risers Ltd. (UKDR) and UK Dry Risers Maintenance Ltd. (UKDRM), specialists in the installation, maintenance and testing of dry and wet riser systems.

After just six months of integration into the Group, UKDRM had grown by an incredible 37% which was largely attributable to its successful integration into the Premier Technical Services Group of companies. Turnover growth since acquisition now stands at 102% with operating profit growth at 399% within the first 24 months. Integration is a fundamental part of the acquisition process. It enables all new members of staff to become fully aligned with our methods and practices – which are proven to be highly successful. It enables them to continue to use their vital industry skills to their full potential – and crucially, that they are satisfied working within their new parent company.

The integration of BEST into our Electrical Services business in July 2017 is another good example. Due to the way in which we overlay PTSG’s policies and procedures, we have seen a 15% margin improvement in that business in our first 12 months together. Renewal rates have increased from 50% to 85% and we have secured 610 additional 3-5 year contracts in the last year.

I must mention Clarity – our proprietary software system – and its increasingly important role in the integration process. The system has now been rolled out across the majority of our compliance business and it is making a big difference to the way in which we work.

Clarity enables everyone at PTSG, including office-based administrative staff, business development managers and on-site engineers, to do their jobs safely and far more efficiently than ever before.

UK Sprinklers was acquired in September 2017 and integrated into the Group in the months that followed. The turnover for UK Sprinklers prior to acquisition was just over £3m; the expected turnover this year is £6-£8m. Current turnover growth since acquisition is 101% with operating profit growth at 318% within the first 12 months.

With a strong pipeline of potential acquisitions, the Group is set to continue its progression.

Divisional results

Each of our divisions has contributed to the exceptional performance of PTSG in the first half of 2018, thanks to our unique operating model and our teams of highly trained experts.

Access & Safety
Safety Testing and Installation, Cradle Maintenance and Installation. As the UK’s leading supplier of fall arrest systems and safety testing services, we achieved a turnover of £7.9m in H1 2018 (2017 H1: £9.1m) – a 26% contribution to the turnover of the Group. Adjusted operating profits were £1.3m from £1.5m in 2017, with decline resulting from the strong comparative performance from the lumpy Cradle Installs business in H1 2017.

The safety testing and safety installation business continued to grow showing increases of 9% and 24% respectively.

Electrical Services
Lightning Protection, Fixed Wire and PAT Testing, (design, install and maintenance). We achieved a turnover of £13.4m in H1 2018 (2017 H1: £7.4m) – a 44% contribution to the turnover of the Group. Adjusted operating profits increased from £1.7m in 2017 to £2.8m. We saw good growth across all services, the acquisitions of BEST and Nimbus showed good progress coupled with strong organic growth.

Building Access Specialists
Steeplejack Services, High Level Installations, High Level Remedials, High Level Cleaning. Our products and services enable safe, efficient access to any part of any building. Our team members are experts at working at height and performing a high-quality service even in the most inaccessible locations.

We employ some of the UK’s most talented and safety-conscious working at height specialists in the UK. In H1 2018 we achieved a turnover of £2.7m (2017 H1: £3.0m) – a 9% contribution to the turnover of the Group. Adjusted operating profit was £0.6m (2017: £0.7m).

Fire Solutions
Wet and Dry Risers, Sprinkler Systems, Fire Alarms, Emergency Lighting, Fire Extinguishers (design, install and maintenance). We now offer one of the UK’s most comprehensive fire solutions services delivering high quality, safety systems in both residential and commercial settings. Turnover increased from £2.5m in H1 2017 to £6.2m in H1 2018 representing 21% of turnover. Adjusted operating profits increased from £0.6m in 2017 to £1.3m in 2018. The increase was a mixture of strong organic growth across all areas of the division, together with the excellent performance of UK Sprinklers which was acquired in September 2017.

 

A sustainable model for success
Naturally, anyone looking to work with PTSG, whether as a customer, a shareholder or an employee, wants to be reassured that our success up until now will continue. PTSG offers the best guarantee of the Group’s sustainability for the future, based on a number of factors.

PTSG’s operating model is built around the twin drivers of organic and acquisitive growth, augmented by the demands of the marketplace.

It is an efficient, unique operating model, designed to achieve long-term sustainable profitability. An important part of this is ensuring that the utilisation of engineers is maximised, coupled with efficiency in planning in our back office functions. Our approach in this respect has been further enhanced since we implemented our new, proprietary software system, Clarity.

Whilst we intend to continue with the operating model which has yielded so much success over the last 11 years, we remain agile and able to evolve to the changing demands of customers and legislation. That is what has happened when the industry called for a more robust approach to fire safety.

As a consequence of the need for all building owners or managers to take a significant step up in safety, our Fire Solutions division was formed and has been a strong success over the last two years. Our three other divisions also continue to grow apace and I am pleased with the performance of our well-established, highly trained and professional teams who deliver consistently well in these important areas of our operations.

Cross-selling is something that has differentiated PTSG within the marketplace. Our ability to offer a bundled service provision is key in saving our clients the time, cost and complication of finding multiple service providers. We have strong relationships with our customers, which has seen us achieve a contract renewal rate of 88 per cent, which is why they are often happy for us to extend our provision to include other niche specialist services.

Our newly formed sales team, established in 2017, is already performing strongly and adding value. With £4m in new sales in 2017, they are on target to achieve in excess of £8m in 2018.

An impressive endorsement of the sustainability of our operating model came on 24th June this year. Joanne Hart, the “shares guru with the golden touch”, reviewed the Group from a financial perspective in her Midas column in the Mail on Sunday, tipping it to grow on the success it has already achieved.

The article recommends PTSG shares as a strong addition to investors’ portfolios, focusing on the fact that the Group often carries out work that is mandatory by law, providing valuable assistance both with installations and maintenance, and holding contracts that last for several years.

It neatly summarises what PTSG does, which has been at the root of our success since 2007. Compliance and testing remain at the very core of our provision for customers going into the future, ensuring buildings perform safely and well for all who use them.

I hope you will join me in looking forward to the year-end results, confident of another record-breaking set of figures for PTSG. In the meantime, the results highlighted in this interim report should give confidence to current and future investors alike.

Paul Teasdale
Chief Executive

25 September 2018

Unaudited consolidated statement of comprehensive income

Six months ended 30 June 2018 Six months ended 30 June 2017 Year ended 31 December 2017 (audited)
  Before Before Before
adjusting Adjusting adjusting Adjusting adjusting Adjusting
items items Total items items Total items items Total
£ £ £ £ £ £ £ £ £
Revenue 30,194,449 30,194,449 21,913,210 21,913,210 52,939,183 52,939,183
Cost of sales (14,842,933) (14,842,933) (10,719,940) (10,719,940) (25,860,206) (25,860,206)
Gross profit 15,351,516 15,351,516 11,193,270 11,193,270 27,078,977 27,078,977
Net operating costs (9,448,141) (4,228,745) (13,676,886) (6,818,907) (2,404,830) (9,223,737) (16,435,955) (8,286,404) (24,722,359)
Total operating profit 5,903,375 (4,228,745) 1,674,630 4,374,363 (2,404,830) 1,969,533 10,643,022 (8,286,404) 2,356,618
Finance costs (335,748) (36,411) (372,159) (231,160) (35,437) (266,597) (491,885) (71,357) (563,242)
Profit before tax 5,567,627 (4,265,156) 1,302,471 4,143,203 (2,440,267) 1,702,936 10,151,137 (8,357,761) 1,793,376
Taxation (293,567) 105,167 (188,400) (689,853) 13,681 (676,172) (733,233) 270,542 (462,691)
Profit attributable to owners of the parent 5,274,060 (4,159,989) 1,114,071 3,453,350 (2,426,586) 1,026,764 9,417,904 (8,087,219) 1,330,685
Total comprehensive income for the period attributable to owners of the parent 5,274,060 (4,159,989) 1,114,071 3,453,350 (2,426,586) 1,026,764 9,417,904 (8,087,219) 1,330,685
Basic and diluted earnings per share (pence) 1.06 1.15 1.37
Adjusted EPS 5.03 3.86 9.73

 

 

 

Unaudited consolidated statement of changes in equity

 

Capital Non-
Share redemption Share Retained controlling Total
capital reserve premium earnings Total interest equity
£ £ £ £ £ £ £
Balance as at 1 January 2017 884,025 128,753 548,418 10,482,697 12,043,713 179 12,043,892
Profit for the year 1,330,685 1,330,685 1,330,685
Total comprehensive income 1,330,685 1,330,685 1,330,685
Transactions with owners
Issue of share capital 161,192 16,806,567 (1,160,631) 15,807,128 15,807,128
Share based payments charge 2,444,433 2,444,433 2,444,433
Share based deferred consideration charge 923,000 923,000 923,000
Tax credit relating to share based payments 1,363,109 1,363,109 1,363,109
Ordinary dividend paid (1,476,752) (1,476,752) (1,476,752)
Transactions with owners 161,192 16,806,567 2,093,159 19,060,918 19,060,918
Balance at 31 December 2017 1,045,217 128,573 17,354,985 13,906,541 32,435,316 179 32,435,495
Profit for the six months ended
30 June 2018 1,114,071 -1,114,071 1,114,071
Total comprehensive income 1,114,071 1,114,071 1,114,071
Transactions with owners
Issue of share capital 52,263 2,665,386 (2,717,649)
Share based payments charge 543,268 543,268 543,268
Share based deferred consideration charge 1,330,000 1,330,000 1,330,000
Tax charge relating to share based payments (474,579) (474,579) (474,579)
Ordinary dividend paid
Transactions with owners 52,263 2,665,386 (1,318,960) 1,398,689 1,398,689
Balance at 30 June 2018 1,097,480 128,573 20,020,371 13,701,652 34,948,076 179 34,948,255
Balance as at 1 January 2017 884,025 128,573 548,418 10,482,697 12,043,713 179 12,043,892
Profit for the six months ended
30 June 2017 1,026,764 1,026,764 1,026,764
Total comprehensive income 1,026,764 1,026,764 1,026,764
Transactions with owners Issue of share capital
Share based payments charge 644,935 644,935 644,935
Issue of shares related to share based payments 22,320 1,138,311 (1,160,631)
Issue of shares related to deferred consideration 4,772 395,228 (400,000)
Issue of share capital 4,000 204,087 208,087 208,087
Tax charge relating to share based payments 231,484 231,484 231,484
Transactions with owners 31,092 1,737,626 (684,212) 1,084,506 1,084,506
Balance at 30 June 2017 915,117 128,573 2,286,044 10,825,249 14,154,983 179 14,155,162

 

 

 

 

Unaudited consolidated balance sheet

as at 30 June 2017 and 2018 and 31 December 2017

 

  31 December
30 June 30 June 2017
2018 2017 (audited)
£ £ £
Assets  
Non-current assets  
Intangible assets 25,880,063 13,324,958 26,212,021
Property, plant and equipment 5,069,754 3,210,276 4,310,058
Deferred tax asset 876,729 173,989 1,567,611
Total non-current assets 31,826,546 16,709,223 32,089,690
 
Current assets  
Inventories 1,256,710 647,792 1,219,165
Trade and other receivables 32,205,660 23,992,192 32,531,384
Cash and cash equivalents 13,851,861 8,040,415 7,002,025
Total current assets 47,314,231 32,680,399 40,752,574
 
Liabilities  
Current liabilities  
Trade and other payables 10,822,742 8,109,976 9,030,829
Bank overdraft 13,654,960 10,281,519 12,662,910
Finance leases 692,244 776,431 736,069
Borrowings 52,167
Deferred consideration 2,457,000 1,925,137 1,335,432
Current tax liabilities 768,567 893,303 839,982
Total current liabilities 28,395,513 21,986,366 24,657,389
Net current assets 18,918,718 10,694,033 16,095,185
 
Non-current liabilities  
Borrowings 12,000,000 9,984,784 12,661,742
Loan notes 2,703,974 2,631,643 2,667,563
Finance leases 1,093,035 631,667 420,075
Deferred tax liability
Deferred consideration
Total non-current liabilities 15,797,009 13,248,094 15,749,380
 
Net assets 34,948,255 14,155,162 32,435,495
 
Equity attributable to the owners of the parent  
Share capital 1,097,480 915,117 1,045,217
Share premium 20,020,371 2,286,044 17,354,985
Capital redemption reserve 128,573 128,573 128,573
Retained earnings 13,701,652 10,825,249 13,906,541
34,948,076 14,154,983 32,435,316
Non-controlling interests 179 179 179
Total equity 34,948,255 14,155,162 32,435,495

 

 

 

 

Unaudited consolidated cash flow statement

for the six months ended 30 June 2017 and 2018
and the year ended 31 December 2017

 

31 December
30 June 30 June 2017
2018 2017 (audited)
£ £ £
Cash flows from operating activities
Profit after taxation 1,114,071 1,026,764 1,330,685
Adjustments for:
Income tax charge 188,400 676,172 462,691
Depreciation 1,032,561 726,688 1,683,633
Amortisation of intangible assets 331,958 38,667 370,623
Profit on disposal of property, plant and equipment (220,000) (180,000) (319,299)
Finance costs 372,159 266,597 563,242
Share based payments 641,712 644,935 2,998,813
3,460,861 3,199,823 7,090,388
Changes in working capital:
Increase in inventories (37,545) (132,497) (243,705)
Increase/(decrease) in trade and other receivables 325,724 (3,449,500) (7,462,133)
Increase/(decrease) in trade and other payables* 4,183,024 1,539,114 (195,864)
Cash generated/(used in) from operations 7,932,064 1,156,940 (811,314)
Interest paid (335,748) (231,160) (491,885)
Tax repaid/(paid) 43,506 334,705 (790,890)
Net cash inflow/(outflow) from operating activities 7,639,822 1,260,485 (2,094,089)
Cash flows from investing activities
Acquisition of businesses (826,870) (14,993,975)
Purchase of property, plant and equipment (1,076,270) (407,440) (1,368,289)
Payment of deferred consideration (125,000) (150,000) (1,060,000)
Net proceeds from sale of property, plant and equipment 820,000 180,000 626,002
Net cash outflow from investing activities (381,270) (1,204,310) (16,796,262)
Cash flows from financing activities
Proceeds from borrowings 1,944,124
Repayment of bank borrowings (713,909) (50,404)
Capital element of finance lease payments (686,857) (438,441) (1,028,513)
Issue of shares 208,087 15,807,128
Dividends paid (1,476,752)
Net cash (outflow)/inflow from financing activities (1,400,766) (280,758) 15,245,987
Net (decrease)/increase in cash and cash equivalents 5,857,786 (224,583) (3,644,364)
Cash and cash equivalents at beginning of period (5,660,885) (2,016,521) (2,016,521)
Cash and cash equivalents at end of period 196,901 (2,241,104) (5,660,885)

 

*    Includes £4,237,047 receipt from Mr R Teasdale to cover the tax payments on his previously awarded share based payment (30 June 2017: £nil, 31 December 2017 £nil).

 

 

 

Notes to the unaudited consolidated financial information
for the six months ended 30 June 2018

1. GENERAL INFORMATION
Premier Technical Services Group plc (the “Company”) is a company incorporated in England and Wales and domiciled in the UK. The address of the registered office is: 13 Flemming Court, Whistler Drive, Castleford, WF10 5HW (registered company number is 06005074). The Company and its subsidiaries (together referred to as the “Group”) is a niche specialist service provider whose principal activities are the maintenance, inspection, testing, repair and installation of permanent façade access equipment, fall arrest systems and lightning protection systems together with fixed wire and portable appliance testing and high-level cleaning and fire solutions.

2. BASIS OF PREPARATION
The interim financial information for the six month period ended 30 June 2018 has not been audited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The interim financial information for the period ended 30 June 2017 is also unaudited. The comparative figures for the year ended 31 December 2017 do not constitute full financial statements and have been abridged from the full accounts for the year ended on that date, on which the auditors gave an unqualified report.

This unaudited consolidated interim financial information (“interim financial information”) has been prepared on a going concern basis under the historical cost convention and is in accordance with AIM Rule 18 in relation to half year reports.

3. GOING CONCERN BASIS
After making appropriate enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons they continue to adopt the going concern basis in preparing the interim financial information.

4. SIGNIFICANT ACCOUNTING POLICIES
In preparing the unaudited Interim Financial Information, the significant accounting policies, critical accounting estimates and judgements, and financial risk management disclosures, are the same as those set out in the 2017 Annual Report and Accounts.

5. SEGMENTAL ANALYSIS
Management has determined the operating segments based on the operating reports reviewed by the Board of Directors that are used to assess both performance and strategic decisions. Management has identified that the Board of Directors is the chief operating decision maker in accordance with the requirements of IFRS 8 “Operating segments”.

The Board of Directors considers the business to be split into four main types of business generating revenue; Access and Safety, Electrical Services, Building Access Specialists and Fire Solutions.

Following significant growth in the safe access/steeplejack and fire services sectors, two divisions were renamed, Building Access Specialists formerly High Level Cleaning and Fire Solutions formerly Training Solutions, with certain service lines moving divisions to better reflect how the Group operates and is managed. The prior year figures have been restated.

 

Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
Six months ended 30 June 2018 £ £ £ £ £ £
Revenue
Total revenue 7,896,720 13,374,065 2,703,243 6,220,421 30,194,449
Total revenue from external customers 7,896,720 13,374,065 2,703,243 6,220,421 30,194,449
Operating profit before adjusting items 1,255,829 2,832,338 600,848 1,277,185 (62,825) 5,903,375
Restructuring costs (196,797) (339,622) (17,089) (553,508)
Share options granted to Directors and employees (641,712) (641,712)
Amortisation of intangible asset acquired (26,167) (293,290) (12,500) (331,957)
Contingent payments in relation to acquisitions (50,000) (2,651,568) (2,701,568)
Segmental operating profit 341,153 (452,142) 588,348 1,260,096 (62,825) 1,674,630
Net financing costs (120,932) (49,747) (6,285) (8,659) (186,536) (372,159)
Profit before taxation 220,221 (501,889) 582,063 1,251,437 (249,361) 1,302,471

5. SEGMENTAL ANALYSIS continued

Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
Six months ended 30 June 2017 (restated) £ £ £ £ £ £
Revenue
Total revenue 9,070,030 7,362,045 2,958,602 2,522,533 21,913,210
Total revenue from external customers 9,070,030 7,362,045 2,958,602 2,522,533 21,913,210
Operating profit before adjusting items 1,460,275 1,700,849 668,643 577,616 (33,020) 4,374,363
Restructuring costs (136,894) (58,535) (64,035) (8,955) (268,419)
Share options granted to Directors and employees (1,075,677) (1,075,677)
Amortisation of intangible asset acquired (26,167) (12,500) (38,667)
Contingent payments in relation to acquisitions (50,000) (972,067) (1,022,067)
Segmental operating profit 171,537 670,247 592,108 568,661 (33,020) 1,969,533
Net financing costs (41,357) (39,771) (1,425) (7,307) (176,737) (266,597)
Profit before taxation 130,180 630,476 590,683 561,354 (209,757) 1,702,936

 

Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
Year end 31 December 2017 £ £ £ £ £ £
Revenue
Total revenue 20,200,519 20,163,991 5,445,543 7,129,130 52,939,183
Total revenue from external customers 20,200,519 20,163,991 5,445,543 7,129,130 52,939,183
Operating profit before adjusting items 3,184,034 4,682,742 1,227,390 1,580,356 (31,500) 10,643,022
Restructuring costs (566,648) (741,074) (28,601) (48,790) (6,493) (1,391,606)
Share options granted to Directors and employees (2,998,813) (2,998,813)
Amortisation of intangible asset acquired (52,333) (293,290) (25,000) (370,623)
Contingent payments in relation to acquisitions (100,000) (3,425,362) (3,525,362)
Segmental operating profit (533,760) 223,016 1,173,789 1,531,566 (37,993) 2,356,618
Net financing costs (89,433) (75,482) (15,951) (15,780) (366,596) (563,242)
Profit before taxation (623,193) 147,534 1,157,838 1,515,786 (404,589) 1,793,376

6. EARNINGS PER SHARE
The calculation of basic earnings per share for the half year to 30 June 2018 was based on the profit attributable to ordinary shareholders of £1,114,071 (six months ended June 2017: £1,026,764; year ended 31 December 2017: £1,330,685) and a weighted average number of Ordinary Shares in issue of 104,923,666 (six months ended 30 June 2017: 89,505,162; year ended 31 December 2017: 96,809,578).

The calculation of adjusted earnings per share for the half year to 30 June 2018 was based on the profit before adjusting items of £5,274,060 (six months ended 30 June 2017: £3,453,350; year ended 31 December 2017: £9,417,904) and a weighted average number of Ordinary Shares in issue of 104,923,666 (six months ended 30 June 2017: 89,505,162; year ended 31 December 2017: 96,809,578).

ACCESS & SAFETY
ELECTRICAL SERVICES
BUILDING ACCESS SPECIALISTS
FIRE SOLUTIONS

ACCESS & SAFETY

Safety Testing Safety Installation Cradle Maintenance Cradle Installation

ELECTRICAL SERVICES

Lightning Protection Surge Protection Specialist Earthing Electrical Testing

BUILDING ACCESS SPECIALISTS

Steeplejack Services High-Level Installations High-Level Reparation High-Level Cleaning

FIRE SOLUTIONS

Dry Risers Sprinkler Systems Fire Alarm/Emergency Lighting Fire Extinguishers

ACCREDITATIONS


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