London Assembly report calls for mandatory sprinkler installations in UK buildings

A new report released by the London Assembly’s Planning Committee has outlined recommendations for making the installation of Automatic Fire Suppression Systems including sprinklers mandatory in all new-build residential developments above 18 metres in height.

The report, called ‘Never Again: Sprinklers as the next step in fire safety’, has been drawn up in response to the recent Grenfell Tower tragedy, and states that “London cannot afford to ignore the deadly consequences of failing to protect its buildings from fire”.

Published by the London Assembly’s Navin Shah AM, the report calls for a risk-based, phased, ‘road map’ towards making sprinklers mandatory in all homes in England. This includes the recommendation that “Building Regulations should require all new residential buildings over 18 metres – 6 storeys – high, new care homes and sheltered housing be fitted with sprinklers immediately.” It also recommends the retrofitting of sprinklers in all existing tall buildings, care homes and sheltered housing.

The London Assembly report follows Dame Judith Hackitt’s Independent Review of Building Regulations and Fire Safety, which is due to release its final report in Spring 2018.

Paul Teasdale, Chief Executive of Premier Technical Services Group PLC (PTSG) said: “We fully support the call for mandatory sprinkler systems in residential buildings and will continue to work closely with local authorities and building managers to provide fit-for-purpose fire suppression systems for their facilities.

“Since we founded our dedicated Fire Solutions division we have installed sprinkler systems to more than 3,500 residential buildings nationwide. They are a cost-effective safety measure and are proven to save lives, so it is self-evident that we should be looking at installing them to new buildings as well as retro-fitting.

Paul added: “The London Assembly’s report outlines the size of the task ahead to protect the city’s residents from fire. PTSG has a strong presence in the capital and offers a turnkey fire solutions provision can help meet the growing demand for fire safety systems in public and residential buildings. We look forward to continuing our work to make these buildings safer for everyone.”

To read the London Assembly’s full report click here: https://www.london.gov.uk/sites/default/files/final_afss_report.pdf

PTSG strikes deal with Premier League club

Premier Technical Services Group PLC (PTSG) will add to the Group’s prestigious portfolio of clients by carrying out work at the new landmark stadium of a Premier League football team.

Operatives from BEST will install a new lightning protection system at the new home of Tottenham Hotspur in north London, to protect visitors and building users in the event of a lightning strike. The new stadium, built on the site of the former White Hart Lane which was demolished at the end of the 2016-17 season, will have a capacity of 61,559 with a 17,500 single-tier home southern stand.

BEST, part of PTSG Electrical Services, has provided expertise for design and installation works to the nuclear and power industry on projects such as Sellafield, Urenco and EFW and has worked on the new ‘super hospital’ at Llanfrechfa Grange.

BEST is now integrated into PTSG’s Electrical Services Division and enhances the company’s leading position in the Lightning Protection market – providing complementary geographical coverage to PTSG’s existing operations, and adding scale to the company’s lightning protection offer test and inspection offer.

PTSG in store for Tesco

Tesco PLC has turned to a Premier Technical Services Group PLC (PTSG) company to provide essential works to a range of buildings and facilities.

The team from BEST will provide maintenance to over 800 of Tesco’s stores, offices and distribution centres.

Tesco is one of the leading supermarket brands in the UK, consistently ranking highest in terms of grocery market share. The company is headquartered in Hertfordshire, United Kingdom, employs over 500,000 people worldwide and, in the UK, provides customers with a range of different store formats of varying sizes.

BEST is a long established and respected lightning protection and steeplejack business with a significant national presence and well-established relationships with Blue Chip clients including Balfour Beatty, Engie, Jaguar Landrover, Tesco, John Laing and Interserve amongst others.

Last year’s acquisition of BEST substantially enhances PTSG’s leading position in the Lightning Protection market and follows the company’s strategy to be the market leader in its chosen areas of operation.

PTSG’s aces to work at Wimbledon

Premier Technical Services Group PLC (PTSG) has provided lightning protection testing and remedial works to the spiritual home of tennis.

BEST, acquired by PTSG in July 2017, delivered the work for the All England Lawn Tennis Club at Wimbledon.

Testing and remedial works will take place at all of the club’s existing installations, including the prestigious Centre Court, which was installed with a roof in readiness for the 2009 season that allowed play to continue in bad weather and provided a fully air-conditioned venue when the roof was in its closed position. The new roof over Wimbledon’s No 1 Court will be completed by 2019, allowing two-thirds of the crowds that flock to SW19 every year for the only grass court Grand Slam in the world to enjoy play, whatever the weather.

The All England Lawn Tennis Club is committed to continuous improvement of Wimbledon and turned to BEST’s specialist lightning protection engineers to carry out this essential work.

PTSG Electrical Services is the leading provider of design, installation and testing services for lightning protection systems. The company is an active member of the Association of Technical Lightning & Access Specialist (ATLAS) and the associated Steeplejack and Lightning Protection Training Group and is committed to the continuous development of its people through ongoing training and learning initiatives.

Final Results 2017

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

 Another year of exceptional growth delivering record turnover and profits

 Final Results

Premier Technical Services Group PLC (“PTSG” or the “Group”), the niche specialist services provider, announces its final results for the year ended 31 December 2017.

Key highlights

  • Group revenue up 35% to £52.9m (2016: £39.2m).
  • Strong underlying organic revenue growth of 11%.
  • Gross profit up 33% to £27.1m (2016: £20.3m).
  • Adjusted operating profit* increased 35% to £10.6m (2016: £7.9m).
  • Adjusted profit before tax** up 36% to £10.2m (2016: £7.5m).
  • Adjusted eps* up 28% to 9.73p (2016: 7.63p).
  • Final dividend increased by 14% to 0.80p (2016: 0.70p).
  • Divisional reorganisation unveiled in H2 2017 aligning our business with customers’ needs and industry demands has been well received.
  • Three acquisitions completed in the year all continue to perform well: Nimbus fully integrated, BEST integration 90% complete, UK Sprinklers Ltd fully integrated and trading 50% ahead of the acquired business with a strong order book and pipeline.
  • Renewal rate has increased to 88% coupled with strong performance from the Group sales team.

John Foley, Chairman of Premier Technical Services Group PLC commented

“PTSG delivered a record performance in 2017, driven by strong organic growth and a number of highly successful acquisitions, including the largest acquisition made since the Group’s IPO in February 2015.  During the year the Group took steps to diversify and reorganise the business, to further strengthen its foundation for future growth. Trading in 2018 has started well.  We continue to review a number of acquisition opportunities and the Board is confident that the Group’s positive organic revenue and profit momentum will continue throughout the year”

Enquiries:

PTSG +44 (0)1977 668 771
Paul Teasdale, Chief Executive Officer
Numis Securities +44 (0)207 260 1000
Stuart Skinner / Kevin Cruickshank / Michael Burke
Hudson Sandler +44 (0)207 796 4133
Charlie Jack / Hattie O’Reilly

*before adjusting items of £8.3m (2016: £4.7m) resulting in a statutory operating profit of £2.4m (2016: £3.1m) and eps of 1.37p (2016: 2.61p)
**before adjusting items of £8.4m (2016: £4.8m) resulting in a statutory profit before tax of £1.8m (2016: £2.6m)

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, steeplejack and rope access services and fire solutions.

Operating through four divisions, Access & Safety, Electrical Services, Building Access Specialists and Fire 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

2017 – a summary
2017 was a busy and exciting year for PTSG. I am pleased to report that record levels of turnover, gross profit, adjusted EBITDA and adjusted earnings per share were achieved. The Group extended the scale and range of its service offerings through both further organic growth and by three carefully selected acquisitions, including the largest acquisition made since the Group’s IPO in February 2015.In addition the Group refreshed its strategy and reorganised its divisional structure so that we can continue to grow and maximise future value.

Acquisitions
Three acquisitions were completed in 2017.

We purchased the entire issued share capital of Nimbus Lightning Protection Limited in January 2017 for a total consideration of £1.0m which was paid in cash on completion. The acquisition of Brook Edgeley (Industrial Chimneys) Ltd (“BEST”) was concluded in July 2017 for an initial cash consideration of £14m which was entirely funded from a successful placing of 12.5m new ordinary shares with institutional investors; £6m of deferred consideration is also payable over 3 years with two-thirds of the payments payable in cash or shares at the Group’s discretion. UK Sprinklers Limited was acquired in September 2017 for a total consideration of £2.5m comprising an initial cash payment of £1.3m, two fixed deferred cash payments of £0.1m on the first and second anniversary of completion and a contingent payment of up to £1.0m payable over a three year period dependent on performance and payable in cash or shares at the Group’s discretion.

The acquisitions of Nimbus and BEST have confirmed our position as market leader in the UK Lightning Protection sector. BEST’s Steeplejack activities have strengthened the activities within our new Building Access Specialists division and the addition of UK Sprinklers has expanded our service offering in our new Fire Solutions division. These acquisitions were made to achieve our objective of sector dominance in our chosen areas of operation, which are those niche specialist service areas where our established operating model can deliver both high margins and industry leading contract renewal rates to a satisfied customer base.

Financial overview of results
Turnover increased by 35% to £52.9m (2016: £39.2m). Gross profit increased by 33% to £27.1m (2016: £20.3m). Adjusted EBITDA increased by 37% to £12.3m (2016: £9.0m) and underlying profit before taxation (before adjusting items of £8.4m) increased by 36% to £10.2m (2016: £7.5m). Adjusting items were principally one off or non trading items including £1.4m of restructuring costs, £3.0m of share option costs and £3.5m of contingent payments in relation to acquisitions. The high level of adjusting items reflects share based remuneration made prior to IPO which are due to reduce in scale in future years, the effect of earn out payments to continuing employees which are treated as remuneration (rather than capital payments) under IFRS 3 and the effects of necessary restructuring arising in particular from the BEST acquisition. The contingent amounts payable are high due to the inclusion of £2m in respect of BEST, although the £6m deferred consideration is paid over three years, under IFRS 3, this has to be recognised over 18 months.

The Board has recommended a final dividend of 0.8 pence per share which together with the interim dividend paid of 0.8 pence is a 14% increase on the dividends paid in respect of 2016.  This will be paid to shareholders of the register on 29 June 2018 and the expected payment date is 20 July 2018.

Net debt at 31 December 2017 increased to £18.3m (2016: £13.6m) following payments of £2.3m of cash in relation to acquisition of businesses. The Group’s working capital position has necessarily increased due to the very substantial increased scale of the Group’s activities at the period end.

The Group’s exit turnover run rate was 46% higher than its run rate at the end of 2016. The Group trades very comfortably within its covenants on its established committed medium term facilities with HSBC. The Board remains comfortable with core borrowings of up to 1.75 x adjusted EBITDA at this stage in the Group’s development. At 31 December 2017 core borrowings were 1.49x adjusted EBITDA compared to a bank covenant of 2.25x.

Operational highlights
The Group’s underlying organic revenue growth rate was a healthy 11% and the Board was pleased with the performance of all three acquired businesses within PTSG. The successful implementation of a new Divisional structure which is explained in the Chief Executive’s Review has involved a great deal of thought and hard work by the Group’s senior management team and the reaction of our customers to our new approach has been very encouraging.

The Chief Executive’s review provides further detail about operational performance but our focus on compliance to a demanding set of safety standards remains foremost in our thoughts and actions. The Board is pleased to report that contract renewal rates in our core maintenance divisions was at 88% during 2017; we believe this is an industry leading contract renewal rate. Gross margins were steady at 51.2% (2016: 51.9%) which provides further proof of margin sustainability as turnover increases.

The new divisional structure was introduced together with the introduction of a national major accounts sales team which identifies and secures multi disciplinary contract opportunities. This team will assist all divisions within the Group to secure organic growth opportunities where a Group approach is beneficial.

Strategy
PTSG was incorporated in November 2006 has now completed 23 acquisitions since inception and more than doubled its turnover and profits since the IPO and admission to AIM in 2015. The Group currently has 16 offices and more than 600 employees and its new divisional structure provides a balanced offering of niche specialist services to customers in the facilities management, construction and property sectors.

The operating model which has worked so well from the start of PTSG in its Access and Safety division can now be seen to work just as effectively in our Electrical Services division where our position as market leader in the Lightning Protection sector has been achieved since our first entrance to this area in December 2010. Our entry to the Fire Services market did not start until 2016 but the similarities in methods of operation with a strict adherence to safety standards are proving to be core values.

We continue to see exciting opportunities for both organic and acquisitive growth for all four divisions. Senior management is focused on achieving both increased operating profitability and cash conversion targets to fund already identified acquisition opportunities.

People
I would like to thank all our employees for their continuing commitment, enthusiasm and hard work.

Outlook
2018 has started well with continuing sales growth and healthy order books. The Board remains confident that the Group’s positive revenue and profit momentum will continue in 2018.

John Foley
Chairman

Chief Executive’s review

I feel incredibly proud to be the Chief Executive of PTSG, a very special organisation which exists to help our customers to operate in a safe, efficient and compliant manner. We are financially strong and have a trusted brand, committed people, and market-leading positions which we continue to grow. We are, however, not complacent and work hard to make sure that we continue to look firmly forward at those things that will make the biggest difference to the people we serve.

2018 takes PTSG into its second decade of business. The company is now in a stronger position than at any other time in its history. This is clearly illustrated by our turnover of £53m in the last year alone, with a further 200+ industry experts employed to service our rapidly growing customer base.

Now is an appropriate time to reflect on what has brought us to this point and how we will continue to achieve year on year growth and profitability as we cement our name as the UK’s leading provider of niche specialist services to the support services, building owners and the construction industries. Anyone who enters into a contract with PTSG finds that we offer unbeatable customer service. Our combination of value for money and uncompromising adherence to quality and safety standards and procedures, coupled with our rapid response to any location in the UK, has secured a contract retention rate of more than 88%.

Something else that gives us a genuine edge on our competitors is the ability to cross-sell our niche specialist services, maximising value for our customers and profit for ourselves. As our business and reputation continue to grow, we are starting to see more opportunities overseas. We have successfully completed lightning protection projects at numerous locations in the Middle East, including at Doha International Airport, and St Bernard’s Hospital in Gibraltar.

We are completely focused on improving and extending our services for our 17,000 customers. To equip PTSG for the next phase of our ongoing growth, we have refreshed our strategy and continue to put customers first in all that we do. With the further development of Clarity, our proprietary software system designed to significantly improve the way we do business, we are now at the forefront of today’s digital age. All of which is making a huge difference to our stakeholders and customers.

Acquisitions adding value
In July 2016 we acquired UK Dry Risers Ltd. and UK Dry Risers Maintenance Ltd, recognising their valuable offering to the industry and also their worth to us as a business. We were subsequently able to develop that area of PTSG into a fully comprehensive Fire Solutions division. This has since been consolidated with the acquisition of UK Sprinklers Ltd. (UKS) in September 2017. Based in Bury, UKS is a specialist in the installation and maintenance of sprinkler systems. All of these businesses have seen tremendous growth since being integrated into PTSG, with UK Dry Risers Maintenance Ltd. growing by 37% in the six months following acquisition.

After acquiring Nottingham-based Nimbus Lightning Protection Ltd. at the start of 2017 and Brooke Edgeley (BEST), a lightning protection and steeplejack company based in Manchester, we are now the UK’s leading provider of lightning protection services and products, with centres of operation throughout the UK.

Established in 1957, BEST was a privately-owned market leading company in lightning protection, specialist earthing, surge protection and steeplejack services.

BEST is a national provider with four office locations in Manchester, Kidderminster, Chelmsford and Wishaw, Scotland with c.160 engineers and staff. It has well established and good relationships with Blue Chip clients including Balfour Beatty, Engie, Jaguar Landrover, Tesco, John Laing and Interserve and over 2,200 other customers.

It is a highly cash generative business, achieving 104% cash conversion in 2016 and has maintained attractive EBIT margins of c.20%, in line with the PTSG group average.

BEST has now been integrated into PTSG’s Electrical Services Division, and its previous owners as well as other members of the management team remain in place. We are in the process of making what was a very good business, a great business.

It is clear that carefully targeted acquisitions have proven key to our exponential growth over the past ten-plus years. Working in tandem with the strong organic growth that we continue to experience as a result of our high-value service and repeat business, we have created a robust business model and a powerful formula that pays rewards to our investors.

Reorganisation for further growth
The industry took a new direction in 2017, with a renewed requirement for steadfast compliance to UK safety regulations in all areas, with a specific focus on fire services. Whilst already in a very strong position we have grasped the forces driving the change and our fire solutions business is flourishing as a result.

Events in 2017 reminded everyone in the industry of the need for an unwavering commitment to safety, upholding British Safety Standards to the letter. PTSG has always made this a priority, and our record of setting new standards for safety has brought us a great amount of positive interest from a governance and compliance perspective – yet again in 2017 we were asked to provide national guidance and advice to the wider support services and construction sectors on behalf of leading health and safety professionals and industry media/commentators. We were also awarded a Gold Medal by The Royal Society for the Prevention of Accidents for our ongoing commitment and track record in this important area of our work.

Fire safety must be the foundation upon which all buildings are constructed, with rigorous regular testing and maintenance. It is now integrated as one of our biggest growth areas having seen an unprecedented demand for wet and dry riser and sprinkler services over the past few months. By continuing to keep quality and safety clearly aligned, we will safeguard the users of the buildings we work on and in doing so, substantially expand our business.

Our divisional structure
The demands of the industry have, over the last year, helped us to shape a stronger, more sustainable business that will enable even greater growth. We now offer the following four discrete but complementary business divisions:

Access & Safety
Electrical Services
Building Access Specialists
Fire Solutions

This new and clearer structure allows us to provide a comprehensive, multi-disciplinary service, driving the value we offer and giving our clients a measurable commercial advantage.

Divisional results
Each of our divisions has contributed to the exceptional performance of PTSG in 2017, 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 £20.2m in 2017 (2016: £18.9m) – a 38% contribution to the turnover of the Group. Adjusted operating profits increased to £3.2m from £3.1m in 2016 with growth across all segments.

Electrical Services
Lightning Protection, Fixed Wire and PAT Testing, (design, install and maintenance). We achieved a turnover of £20.2m in 2017 (2016: £12.1m) – a 38% contribution to the turnover of the Group. Adjusted operating profits increased from £2.9m in 2016 to £4.7m. We saw good growth across all services and the acquisitions made in 2016 and 2017 showed good progress.

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 2017 we achieved a turnover of £5.4m (2016: £5.8m) – a 10% contribution to the turnover of the Group. Adjusted operating profit was £1.2m (2016: £1.3m).

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 £2.4m in 2016 to £7.1m in 2017 representing 14% of turnover. Adjusted operating profits increased from £0.5m in 2016 to £1.6m in 2017.

Our People
We now have a team of more than 641 talented industry operatives, many of whom have joined us over the last year as a result of our acquisitions and organic growth. It has always been our policy to nurture talent, providing the training and professional development opportunities to make the most of their potential. It is our people who make us what we are.

Our newly formed national business development team is fast becoming one of our many success stories and a prime example of how talent, hard work and ambition have helped us to achieve great success and rapid growth. We have devoted five pages within this annual report to profiling our people.

We gladly place responsibility on the teams’ shoulders for creating and implementing a cohesive sales and marketing plan for the business which is aligned to PTSG’s business plan. They will build long-term, profitable client relationships with allocated accounts that enable account revenue growth and retention. They will steer and proactively contribute to sales strategy meetings, and is a visible sales team within PTSG – being fully engaged with the national and service area sales channel and a pre-agreed activity calendar.

People-focused, business-minded and constantly looking for ways to improve upon what we do, our people epitomise the PTSG way.

Looking forward to continuing a profitable future
Our reorganisation is complete and we are already building on our previous offering to the support services and construction sectors, with four distinct but complementary divisions. Our original principle was to be the complete provider of engineered solutions recognised as the standard against which all other companies are measured; this remains true more than ten years on, but that provision is now larger and benefits even more customers.

Our divisional results show that we continue to improve upon our performance every year, and in the area of fire solutions, we are experiencing astonishing demand for our services. As ever, people choose PTSG for our incredible customer service and bundled services delivery. However, our ongoing focus on compliance, taking infinite care to safeguard everyone who comes into contact with the buildings we work on,
has moved PTSG to the next level.

Our service and performance are given extra weight by our 133 accreditations, including ISO 9001, OHSAS 18001 and ISO 14001, as well as the industry awards we were proud to receive this year – and every year since we began operating in 2007.

Now, more than ever before, the support services and construction industries needs financially robust and reliable service providers that can guarantee a quality end product, provide a rapid response to every call, wherever the location, and are a pleasure to work with – with strong relationships with key industry names. PTSG has proven time and time again it can do all of this for less. We are more cost effective than our competitors, while retaining a good margin. That’s a winning formula for our customers and shareholders alike.

We now look ahead to 2018 with great anticipation, and the opportunity to serve a greater diversity of customers.

Paul Teasdale
Chief Executive


Financial review

Summary
2017 was another significant year for PTSG with continued substantial earnings and revenue growth. The acquisition of Nimbus and BEST extended our market dominance in our Electrical Services Division and the acquisition of UK Sprinklers Ltd enhances our offering in the Fire Solutions division. To provide additional financial flexibility we increased the Revolving Credit Facility to £12m and our overdraft to £8m.

Another year of strong earnings and revenue growth
Revenue grew by 35% in 2017 to £52.9m (2016: £39.2m) with 24% from the acquisitions and 11% from pure organic growth. Access and Safety returned another strong performance, with continued growth in revenue and adjusted operating profits. Electrical Services continued to grow well, aided by the acquisitions made in the year, with 14% pure organic growth. Building Access Specialists declined by 6%, but is well positioned for the future.  Fire Solutions performed strongly with substantial increases in both revenue and profits. We expect to see the full benefit, from Sprinklers being added to this division’s offering, in 2018.

Gross profit increased by 33% to £27.1m (2016: £20.3). The major factor affecting the Group’s gross margin performance is the relative mix between installation sales (which have substantially higher material costs) to testing and repair sales. Installation sales were very strong in 2017, especially in Cradle installations, causing the gross margin to fall slightly to 51.2% (2016: 51.9%).

Operating profit before adjusting items grew by 35% to £10.6m (2016: £7.9m). The adjusted operating profit margin was consistent at 20.1% (2016: 20.1%) with overhead leverage and strong cost control mitigating the slight gross margin reduction. The statutory operating profit was £2.4m (2016: £3.1m).

Profit before tax was £1.8m (2016: £2.6m) and is stated after £8.4m (2016: £4.8m) of adjusting items. Adjusting items are either non-recurring or non-trading in nature and comprised £3.0m (2016: £1.9m) in relation to share option costs granted to Directors and employees, contingent payments of £3.6m (2016: £1.9m) associated with acquisitions in accordance with IFRS 3, of which £2.0m related to the acquisition of BEST, amortisation of acquired intangible assets of £0.4m (2016: £0.5m) and restructuring costs of £1.4m (2016: £0.5m). The interest charge and other financing costs were £0.6m (2016: £0.5m). This increase was due to planned increased borrowing levels principally as a result of the cash payments for acquisitions and an increase in finance lease charges in relation to the Group’s larger vehicle fleet.

Adjusted earnings per share increased by 28% to 9.73p (2016: 7.63p). £1.5m of dividends were paid during the year and the Board is proposing a final dividend of 0.8p per share. This represents a 14% increase on the 2016 dividends and is in line with our progressive dividend policy. Statutory earnings per share was 1.37p (2016: 2.61p).

Net debt
Net debt at 31 December 2017 was £18.3m (2016: £13.6m). The increase in the reported number followed £4.4m of acquisition related costs, £0.7m property mortgage inherited as part of the BEST acquisition and an increase in working capital due to the substantial increase in the size of the Group. As anticipated the year end figure was negatively impacted by very high installations in the fourth quarter. We have already seen a substantial correction in 2018 and expect to continue making further improvements to net debt and free cash flow throughout the year. Our banking facilities provide the flexibility to manage this volatility.

Trade and other receivables increased by £11.3m to £30.4m with the three acquisitions adding £4.8m. Year end receivables were elevated due to the strong Q4 trading performance. The Carillion liquidation and their outstanding net debt of £0.3m has been fully provided for in the 2017 balance sheet.

We have a long term relationship with our bankers, HSBC, having been a customer for over ten years which enables us to develop our facilities in line with our increasing profitability. The Revolving Credit Facility, taken out in 2015, was increased to £12m during the year to give us additional flexibility for the future, the terms and interest rates remaining unchanged. We continue to trade well within our banking covenants with head room remaining for future growth.

Acquisitions
We acquired two lightning protection businesses in 2017, Nimbus and BEST, for a total consideration of £21m, £6m of which was deferred and is contingent on the continued employment of the vendors for a minimum 18 month period. We also acquired UK Sprinklers Ltd in September for a total consideration of £2.5m, £1.2m of which was deferred and is contingent on the continued employment of the vendors and the achievement of stretching milestone targets.

These acquisitions were funded in accordance with our financial strategy with the Nimbus and Sprinklers acquisitions being funded from our own resources, where as the sizeable acquisition, BEST, was funded by a placing of 12.5m shares at a purchase price of £1.20.

These acquisitions had a significant impact on the closing balance sheet adding £13.8m to goodwill, £1.1m to fixed assets, £1.0m to net current assets and £0.7m to debt.

Outlook
We believe that 2018 will be another year of earnings and revenue growth. We are a well financed group and expect to make improvements to operating cash flow and net debt throughout the year. We believe that the Group remains well placed to deliver on our strategic priorities.

Mark Watford
Finance Director
Consolidated statement of comprehensive income
for the year ended 31 December 2017

Year ended 31 December 2017 Year ended 31 December 2016
Before Adjusting   Before Adjusting
adjusting items   adjusting items
items   Total items Total
£ £ £ £  £ £
Revenue 52,939,183 52,939,183 39,194,766 39,194,766
Cost of sales (25,860,206) (25,860,206) (18,863,527) (18,863,527)
Gross profit 27,078,977 27,078,977 20,331,239 20,331,239
Net operating costs (16,435,955) (8,286,404) (24,722,359) (12,474,374) (4,739,988) (17,214,362)
Total operating profit 10,643,022 (8,286,404) 2,356,618 7,856,865 (4,739,988) 3,116,877
Finance costs (491,885) (71,357) (563,242) (405,076) (97,402) (502,478)
Profit before taxation 10,151,137 (8,357,761) 1,793,376 7,451,789 (4,837,390) 2,614,399
Taxation (733,233) 270,542 (462,691) (730,370) 415,544 (314,826)
Profit attributable to owners of the parent 9,417,904 (8,087,219) 1,330,685 6,721,419 (4,421,846) 2,299,573
     
Total comprehensive income/(expense) for the year attributable to owners of the parent 9,417,904 (8,087,219) 1,330,685 6,721,419 (4,421,846) 2,299,573
     
Earnings per share (pence):      
Basic and diluted earnings per share     1.37 2.61

 

Consolidated statement of changes in equity
for the year ended 31 December 2017

Attributable to owners of the parent
Capital Share Non-
Share redemption Premium Retained controlling Total
capital reserve Account earnings Total interest equity
£ £ £ £ £ £ £
Balance at 31 December 2015   876,447 128,573 7,915,690 8,920,710 179 8,920,889
Profit for the year 2,299,573 2,299,573 2,299,573
Total comprehensive income   2,299,573 2,299,573 2,299,573
Transactions with owners
Issue of share capital 7,578 548,418 (400,000) 155,996 155,996
Share based payments charge 1,643,841 1,643,841 1,643,841
Share based deferred consideration charge 400,000 400,000 400,000
Tax charge relating to share based payments (283,935) (283,935) (283,935)
Ordinary dividends paid (1,092,472) (1,092,472) (1,092,472)
Transactions with owners   7,578 548,418 267,434 823,430 823,430
Balance at 31 December 2016   884,025 128,573 548,418 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 923,000 923,000 923,000
Tax charge relating to share based payments 1,363,109 1,363,109 1,363,109
Ordinary dividends 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

 

Consolidated balance sheet
as at 31 December 2017

2017 2016
£ £
Assets  
Non-current assets  
Intangible assets 26,212,021 12,365,481
Property, plant and equipment 4,310,058 3,195,880
Deferred tax asset 1,567,611 417,336
Total non-current assets 32,089,690 15,978,697
 
Current assets  
Inventories 1,219,165 503,307
Trade and other receivables 32,531,384 20,303,115
Cash at bank and in hand 7,002,025 6,543,749
Total current assets 40,752,574 27,350,171
 
Liabilities  
Current liabilities  
Trade and other payables 9,030,829 7,231,346
Bank overdraft 12,662,910 8,560,270
Finance leases 736,069 767,303
Borrowings 52,167 25,033
Deferred consideration 1,335,432 1,053,070
Current tax liabilities 839,982 296,003
Total current liabilities 24,657,389 17,933,025
Net current assets 16,095,185 9,417,146
 
Non-current liabilities  
Borrowings 12,661,742 10,010,155
Loan notes 2,667,563 2,596,206
Finance leases 420,075 745,590
Total non-current liabilities 15,749,380 13,351,951
 
Net assets 32,435,495 12,043,892
 
Equity attributable to the owners of the parent  
Share capital 1,045,217 884,025
Capital redemption reserve 128,573 128,573
Share premium account 17,354,985 548,418
Retained earnings 13,906,541 10,482,697
32,435,316 12,043,713
Non-controlling interests 179 179
Total equity 32,435,495 12,043,892

 

Consolidated cash flow statement
for the year ended 31 December 2017

2017 2016
£ £
Cash flows from operating activities  
Profit after taxation 1,330,685 2,299,573
Adjustments for:  
Income tax charge 462,691 314,826
Depreciation 1,683,633 1,164,362
Amortisation of intangible assets 370,623 499,233
Profit on disposal of property, plant and equipment (319,299) (316,134)
Finance costs 563,242 502,478
Share based payments 2,998,813 1,243,841
7,090,388 5,708,179
Changes in working capital:  
Increase in inventories (243,705) (86,399)
Increase in trade and other receivables (7,462,133) (6,092,755)
(Decrease)/increase in trade and other payables (195,864) 1,038,646
Cash (used in)/generated from operations (811,314) 567,671
 
Interest paid (491,885) (433,272)
Tax paid (790,890) (796,812)
Net cash outflow from operating activities (2,094,089) (662,413)
 
Cash flows from investing activities  
Acquisition of businesses (14,993,975) (1,757,702)
Purchase of property, plant and equipment (1,368,289) (766,304)
Payment of deferred consideration (1,060,000) (905,159)
Net proceeds from sale of property, plant and equipment 626,002 354,849
Net cash outflow from investing activities (16,796,262) (3,074,316)
 
Cash flows from financing activities  
Proceeds from borrowings 1,944,124 4,016,347
Capital element of finance lease payments (1,028,513) (1,042,197)
Issue of shares 15,807,128 155,996
Dividends paid (1,476,752) (1,092,472)
Net cash inflow from financing activities 15,245,987 2,037,674
 
Net (decrease)/increase in cash and cash equivalents (3,644,364) (1,699,055)
Cash and cash equivalents at 1 January (2,016,521) (317,466)
Cash and cash equivalents at 31 December* (5,660,885) (2,016,521)

* cash and cash equivalents comprises cash at bank in hand of £7,002,025 (2016: £6,543,749) less bank overdraft of £12,662,910 (2016: £8,560,270).

 

Notes to the Final Results
Basis of preparation

The preliminary financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006, for the financial years ended 31 December 2017 and 31 December 2016, but has been derived from those accounts.

These financial statements have been prepared in accordance with the requirements of the AIM Rules, in accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS”), the IFRS Interpretations Committee’s (“IFRSIC”) interpretations and with those parts of the Companies Act 2006 as applicable to companies reporting under IFRS, however, this announcement in itself does not contain sufficient information to comply with IFRS. The accounting policies used in preparation of this preliminary announcement have remained unchanged from those set out statutory accounts for the year ended 31 December 2016. They are also consistent with those in the full financial statements which have yet to be published.

Statutory accounts for 2016 have been delivered to the Registrar of Companies and those for the financial year ended 31 December 2017 will be delivered following the Company’s annual general meeting.  The auditors have reported on those accounts and their opinion was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

Segmental information

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.

Principally, all revenue originates in the UK.

 

            2017
      Building      
  Access Electrical Access Fire    
  and Safety Services Specialists Solutions Group Total
  £ £ £ £ £ £
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)
Segment operating profit (533,760) 223,016 1,173,789 1,531,566 (37,993) 2,356,618
Net finance cost (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
Other segmental items
Segment assets 22,713,713 15,590,383 7,419,880 6,450,468 20,667,820 72,842,264
Segment liabilities (4,801,727) (11,230,228) (2,058,857) (1,887,288) (20,428,669) (40,406,769)
Capital expenditure 906,201 791,942 163,308 172,406 2,033,857
Depreciation 575,648 820,212 175,399 112,374 1,683,633

Segmental operating profit
The reconciliation of Adjusted EBITDA to statutory operating profit is shown below.

Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
£ £ £ £ £ £
Adjusted EBITDA 3,759,682 5,502,954 1,402,789 1,692,730 (31,500) 12,326,655
Depreciation (575,648) (820,212) (175,399) (112,374) (1,683,633)
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)
Statutory operating profit (533,760) 223,016 1,173,789 1,531,566 (37,993) 2,356,618

 

 

 

2016 (Restated)
Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
£ £ £ £ £ £
Revenue
Total revenue 18,869,742 12,092,661 5,824,652 2,407,711 39,194,766
Total revenue from external customers 18,869,742 12,092,661 5,824,652 2,407,711 39,194,766
Operating profit before adjusting items 3,110,949 2,910,574 1,333,724 502,525 (907) 7,856,865
Restructuring costs (235,288) (178,141) (78,883) (492,312)
Share options granted to Directors and employees (1,887,400) (1,887,400)
Amortisation of intangible asset acquired (486,733) (12,500) (499,233)
Contingent payments in relation to acquisitions (100,000) (360,537) (840,506) (560,000) (1,861,043)
Segment operating profit 401,528 2,371,896 401,835 (57,475) (907) 3,116,877
Net finance cost (92,244) (53,880) (3,529) (6,532) (346,293) (502,478)
Profit before taxation 309,284 2,318,016 398,306 (64,007) (347,200) 2,614,399
Other segmental items
Segment assets 13,156,447 3,733,618 2,432,267 3,290,354 20,716,182 43,328,868
Segment liabilities (5,565,181) (4,462,652) (2,454,833) (1,799,085) (17,003,225) (31,284,976)
Capital expenditure 752,623 914,809 114,219 60,815 1,842,466
Depreciation 453,821 501,810 155,375 53,356 1,164,362

Segmental operating profit
The reconciliation of Adjusted EBITDA to statutory operating profit is shown below.

Building
Access Electrical Access Fire
and Safety Services Specialists Solutions Group Total
£ £ £ £ £ £
Adjusted EBITDA 3,564,770 3,412,384 1,489,099 555,881 (907) 9,021,227
Depreciation (453,821) (501,810) (155,375) (53,356) (1,164,362)
Operating profit before adjusting items 3,110,949 2,910,574 1,333,724 502,525 (907) 7,856,865
Restructuring costs (235,288) (178,141) (78,883) (492,312)
Share options granted to Directors and employees (1,887,400) (1,887,400)
Amortisation of intangible asset acquired (486,733) (12,500) (499,233)
Contingent payments in relation to acquisitions (100,000) (360,537) (840,506) (560,000) (1,861,043)
Statutory operating profit 401,528 2,371,896 401,835 (57,475) (907) 3,116,877

 

Earnings per share
The calculation of basic earnings per share for the year ended 31 December 2017 was based on the profit attributable to ordinary shareholders of £1,330,685 (year ended 31 December 2016: £2,299,573).

2017
£
2016
£
Profit for the year attributable to owners of the parent 1,330,685 2,299,573
Weighted average number of ordinary shares in issue for the basic earnings per share 96,809,578 88,101,562
Basic and diluted earnings per share (in pence per share) 1.37 2.61

The calculation of adjusted earnings per share for the year ended 31 December 2017 was based on the profit before adjusting items of £9,417,904 (Year ended 31 December 2016: £6,721,419).

 

2017
£
2016
£
Adjusted earnings 9,417,904 6,721,419
Weighted average number of shares 96,809,578 88,101,562
Adjusted earnings per share (pence) 9.73 7.63

Annual Report
The annual report will be mailed to shareholders and will be available in due course on our website www.ptsg.co.uk.

Annual General Meeting
The annual general meeting will be held at 13 Flemming Court, Whistler Drive, Castleford, WF10 5HW on Monday 18 June 2018 at 2.00pm.

The votes are in… and the winner is PTSGClarity!

Premier Technical Services Group PLC (PTSG) is celebrating after being crowned the winner of the Tomorrow’s FM Awards 2018!

The seventh Tomorrow’s FM Awards winners were announced on Monday 19th March. The awards are held annually to recognise the most innovative products and services introduced in the facilities management industry in the last 12 months, looking for initiatives that improve customer experiences and driving the industry forward.

PTSG was awarded first place for its bespoke all-in-one software system, PTSGClarity. The system has been developed to automate PTSG’s working processes and has helped drive improvements across PTSG’s four divisions, making the company’s operations unbeatably accurate and efficient. PTSGClarity has been developed by an in-house team and has provided visibility across the business, seamlessly integrating service delivery with back office systems.

On announcement of the award, PTSG’s Chief Executive, Paul Teasdale said: “Winning this award is a fantastic achievement for the business and is a testament to the hard work of our dedicated team of developers, who have strived to make the programme as effective and responsive as possible.

Paul added: “At PTSG we pride ourselves on leading the industry in innovative working practices and this award is further evidence of our dedication to this. This approach has helped us enjoy fantastic growth in recent years and we look forward to an even more prosperous future servicing our customers to the very highest standards.”

PTSG's software development team, Chris Cook and Simon Wainwright

PTSG’s software development team, Chris Cook and Simon Wainwright

Magnificent 7 for PTSG Safety

Premier Technical Services Group PLC (PTSG) has been recognised in the most prestigious global awards for commitment to good workplace health and safety management.

For the seventh year running, the UK’s leading niche specialist service provider will receive an International Safety Award from the British Safety Council for its ongoing commitment to safety in the workplace.

A total of 623 applications were received for the 2018 awards, which are independently marked by health and safety experts. The review and scoring of applications is particularly robust and PTSG scored highly to achieve the award with Merit.

PTSG’s Chief Executive Paul Teasdale, said: “We are delighted to have received this award for the seventh year running. We continue to be an industry-leading, safety-focused company that continually reviews our processes and procedures.

“Safety is of paramount important to us and it is clear that we are a business that prioritises occupational health, safety and wellbeing. Being annual recipients of the award highlights the ongoing commitment of everyone involved at PTSG.”

The PTSG team can now look forward to attending the 60th International Safety Awards Gala Dinner on Friday 27 April at London’s Grosvenor House Hotel.

This black-tie event is one of the most prestigious dates in the health and safety calendar and will be hosted by priest, BBC Radio 4 presenter and former Strictly contestant, Reverend Richard Coles. Individual award winners in four special categories will also be announced at the Gala Dinner.

Paul added: “We want to take this chance to celebrate our success and reward the team for their hard work, effort and attitude towards workplace health and safety management. We work in a tough industry and in challenging environments and we are very proud that our consistent approach is being noticed.”

In 2017, PTSG was awarded a RoSPA Gold Medal for the organisation’s health, safety and well-being work and its consistently strong track record.

rospa-gold-medal

Heathrow Control Tower

Premier Technical Services Group PLC (PTSG) has delivered short notice maintenance to the Control Tower at London Heathrow Airport.

The recent bad weather that caused disruption across the nation also led to the Control Tower at the UK’s biggest airport facility becoming excessively dirty.

It is essential that the view from the tower is not compromised for Air Traffic Controllers, who handle 1,350 aircraft on a daily basis.

The Control Tower at Heathrow is the highest visual control room (VCR) in the country. Emergency cleaning was ordered following the bad weather but when cleaners attempted to use the gantry it had developed a technical fault.

PTSG engineers were called in to identify the problem – a broken motor that had to be removed for repair. Engineers also enabled temporary access to the gantry for the cleaners. This highly critical work had to be carried out in a 48-hour window to avoid any disruption to Heathrow’s busy schedule.

Eighty airlines operate out of Heathrow’s five terminals, serving 84 countries. Air Traffic Controllers in the tower ensure that flights arrive and depart safely and on time. Heathrow’s schedule requires four holding stacks, with aircraft queued to land during peak times. Any disruption to the schedule would throw this complex operation into disarray.

The work was carried out on behalf of Mitie Technical Facilities Management Ltd. PTSG has a strong association with Heathrow, having been contracted by Mitie to carry out works at Heathrow’s Terminal 4, Terminal 5 Baggage Hall and World Cargo Centre.

Vote for PTSG to win the Tomorrow’s FM Awards 2018!

Voting is now open for the Tomorrow’s FM Awards 2018, with Premier Technical Services Group PLC (PTSG) shortlisted as one of the 50 finalists.

The Tomorrow’s FM Awards are entering their seventh year, and will once again showcase some of the best products and services from across the FM industry. The magazine has compiled a list of 50 products and services they feel deserve recognition, and readers are asked to select their winner.

PTSG has been nominated for the development and rollout of PTSG Clarity across the business. Clarity is a new proprietary technology that is helping PTSG grow its competitive advantage through innovation and continue to deliver shareholder value.

After three years of development and comprehensive trials, Clarity is successfully being rolled out across the business, not only making the PTSG boat go faster, but also providing clients with a much smoother, enjoyable journey.

Voting for the Tomorrow’s FM Awards 2018 is open until Friday 16th March and the winner will be announced in the April 2018 issue, so don’t delay, hit the link below and show PTSG your support today!

https://content.yudu.com/web/1jybr/0A1vxp9/TFMAwards18/html/index.html?page=4&origin=reader (please click on the yellow star in the bottom left hand corner (page 4) that says “click here to vote”).

 

Awards shortlist for PTSG

Premier Technical Services Group PLC (PTSG) has been shortlisted for Large Business of the Year in the Yorkshire Business Masters Awards 2018.

PTSG join a shortlist of five businesses in this category. More than 45 different businesses have been shortlisted for prestigious awards, which will be attended by a host of businesses along with the region’s business leaders and influencers.

Judges narrowed down the shortlists for each category from around 200 submitted entries and it is a mark of PTSG’s hard work and commitment across 2017 and a stronto have been selected.

Judges were impressed by the quality of the submissions to this year’s awards.

The judges of the Yorkshire Business Masters Awards 2018 are Sheffield’s Master Cutler Ken Cooke, LeedsBID non-executive Diane Cheesebrough, Professor George Lodorfos of Leeds Beckett University and Leeds Community Foundation CEO Kate Hainsworth. The judging panel was chaired by Kayley Worsley, Yorkshire editor of awards organisers TheBusinessDesk.com.

The Business Masters 2018 Yorkshire Awards Dinner will take place at the Queens Hotel in Leeds on Thursday 26 April 2018.

PTSG was crowned Fast Growth Business of the Year at the Yorkshire Business Masters Awards 2017.