REG - Aquila Services Grp - Annual Financial Report and AGM Notice
27/06/2022 07:00
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RNS Number : 2003Q Aquila Services Group PLC 27 June 2022
For immediate
release
27 June 2022
Aquila Services Group plc
("Aquila", the "Company" or the "Group")
Annual report and financial statements
for the year ended 31 March 2022
and
Notice of AGM
Annual report
Aquila is pleased to announce its audited annual report and financial
statements for the year ended 31 March 2022, extracts from which are set out
below.
The Company's annual report and financial statements for the year ended 31
March 2022 will shortly be made available from the Company's website at:
http://www.aquilaservicesgroup.co.uk/ (http://www.aquilaservicesgroup.co.uk/)
.
In addition, the document will be uploaded to the National Storage Mechanism
and will be available for viewing shortly at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Financial Highlights
For the year ended 31 March 2022
Revenue Gross profit Gross profit margin
£10,119k £2,206k 22%
(2021: £7,642k) (2021: £1,640k) (2021: 21%)
Underlying operating profit* Statutory profit after tax Statutory earnings per share
£726k £579k 1.45p
(2021: £614k) (2021: £187k) (2021: 0.48p)
Cash generated by operations Cash balances Total dividend payable
£512k £2,193k 0.6p per share
(2021: £930k) (2021: £2,127k) (2021: 0.55p)
*Underlying operating profit is calculated by adjusting the reported pre-tax
profit for share-based payment charges and in 2021: restructuring costs
related to COVID-19, acquisition costs, and impairments of investments.
Dividend
The Directors propose a final dividend of 0.4p per share (2021: 0.4p). This
will be paid on 1 August 2022 to shareholders on the register at 15 July 2022.
Notice of Annual General Meeting ("AGM")
The Company's AGM will be held at Tempus Wharf 29A, Bermondsey Wall West,
London, SE16 4SA on 27 July 2022 at 3:00 pm.
The financial information set out below does not constitute the Company's
statutory accounts for the period ending 31 March 2022. The financial
information for 2021 is derived from the statutory accounts for that year.
The auditors, Crowe U.K. LLP, have reported on the 2022 accounts. Their report
was unqualified and did not include a reference to any matters to which the
auditors draw attention by way of emphasis without qualifying their report.
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018.
For further information please visit www.aquilaservicesgroup.co.uk
(http://www.aquilaservicesgroup.co.uk) or contact:
Aquila Services Group plc
Claire Banks, Group Finance Director
Tel: 020 7934 0175
Beaumont Cornish Limited, Financial Adviser
Roland Cornish
Tel: 020 7628 3396
Extracts from the Company's annual report and financial statements for the
year ended 31 March 2022
Chairs statement
Dear Shareholder,
I am pleased to present the Annual Report and the Financial Statements for the
year to 31 March 2022. The report is designed to provide both an overview of
the Group's business and achievements as well as a summary of the results for
the year. I hope shareholders will find it both helpful and informative. If
you would like further information or wish to discuss the work of the Group,
please do not hesitate to contact one of the Directors; details are given on
Page 4.
Aquila Services Group plc ('the company') is the holding company for Altair
Consultancy & Advisory Services Ltd ('Altair'), Aquila Treasury &
Financial Solutions Ltd ('ATFS') and Oaks Consultancy ('Oaks') which form the
Group ('the Group').
The Group is an independent consultancy which provides advice and support to
organisations that develop and manage affordable housing, provide education
and sports opportunities as well as organisations active in the charity and
community sectors. Most clients are mainly public sector organisations and
NGOs in both the UK and, increasingly, for support of affordable housing and
communities internationally, particularly in Africa and Asia.
My statement at the interim stage for the 6 months ended 30 September 2021
emphasised how financially resilient the Group had been during a period of
restricted activity due to the pandemic. Much of this was generated by our
affordable housing client base with continuing demand for both the management
of existing stock and new development.
During the second half of the financial year, the Group's housing related
services have seen continuing increasing demand and account for the majority
of the increased turnover. The sports and communities work has seen some
increase but slower than expected, with education only now starting to
recover. Demand in these sectors for the Group's services will improve as the
services providers become fully operational and start to review their
strategic options.
Against this backdrop Group results for the financial year ended 31 March 2022
are encouraging with turnover £10,119k (2021: £7,642k) increasing by 33%,
underlying operating profit at £726k (2021: £614k) was up by 18% and profit
after tax £579k (2021: £187k) increased by over 300%.
The Directors have declared a final dividend of 0.4p (2021: 0.4p) which totals
dividends for the year of 0.6p (2021: 0.55p) an increase of 9%.
There are a number of encouraging signs as we start the new financial year. In
particular the Group is starting to acquire new clients after a period when
few new tenders were circulating. In the interim report, we mentioned that
during the pandemic most revenue was coming from renewal of services for
existing clients with few providers having the resources to test the market or
develop new projects. In recent months the Group has submitted a significant
number of new bids and won a high proportion of these, and other, new
contracts.
A particular feature which is certainly appreciated by all our staff and
executive is the dedication of everybody involved during the pandemic being
recognised by our clients. Many positive comments have been received on both
the continuity, reliability and quality of work and how this has enhanced our
reputation.
What of the future? The major restructuring we undertook in 2020 and 2021,
as described in previous reports, is now fully in place. To respond to the
increasing demands of the business we continue to grow organically through
both expanding our range of products and services and recruiting and training
new staff. We also continue to invest in our current colleagues through
internal and external training.
The Group continues to look at potential acquisitions. With higher rates of
price inflation, the possibility of a recession and higher borrowing costs,
potential acquisitions are becoming more realistic in their expectations. We
continue to believe that this is a possible avenue of growth, especially into
new markets.
Demand for housing services continues to be high and expectations are that
affordable housing will benefit from any government investment packages that
are prompted by higher mortgage rates or a need to stimulate the economy.
The international work is only now seeing potential expansion as travel
restrictions are lifted. Much of the funding for this work comes from
governments through their aid and development budgets. This will be restricted
whilst, rightly, the needs of Ukraine are prioritised.
For education, sports and communities the products and structures that worked
well in the housing market are being reviewed to see whether they can be
adapted for these sectors and our offering consolidated into larger
multi-skilled groups.
We continue to exist in an increasingly unstable and fragile geopolitical and
economic environment. The range of sectors that we support and our continuing
maintenance of significant reserves and cash flows enable us to grow
successfully. This can also provide opportunities for the Group to enhance the
services we offer. I look forward to reporting further to shareholders at the
next interim stage.
We have so much to thank our loyal, hardworking and skilled staff and
executive that it is difficult to single out anyone amongst them, however the
leadership of Fiona Underwood, our Group Managing Director has been important
to our success and she deserves a special mention in despatches.
Lastly, I need to pay tribute to Steve Douglas, our former Group Chief
Executive who sadly passed away this year at the age of 57. He was a
founding partner, a great ambassador of both the Group and the affordable
housing sector. His work of bringing forward opportunities and justice for
members of minority communities is to be remembered. He will be greatly missed
by his friends and colleagues in the sector.
Derek Joseph - Chair
24 June 2022
Extract from the Strategic Report
Strategy and objectives
Aquila Services Group (Aquila) has a bold purpose to 'make a better, more
sustainable and socially responsible world'. We achieve this by being a
consultancy group which provides professional support services to socially
focused sectors in the UK and internationally.
Our purpose is core to what we want to be across the group:
§ We want our subsidiaries to have a direct beneficial impact on communities
and lives in the UK and beyond.
§ We want to offer staff the opportunity to inspire positive change in an
environment with a strong social focus.
§ And we want to provide investors the opportunity of supporting an
organisation that combines strong performance with a positive social outcome.
Our work helps our clients to develop a response to a changing world and make
a positive difference to the communities in which they operate. At present
we work with clients across housing and regeneration, sport and education,
charity and government sectors. We work across the UK and increasingly
internationally.
Our business as at 31 March 2022
Aquila delivers work to clients through key subsidiaries, each of which has a
core market and service focus:
§ Altair provides support for affordable housing and government bodies
through the development, growth, management, governance, and operation of
organisations, and the improvement of services to housing customers.
§ ATFS is registered with the Financial Conduct Authority and provides advice
to the affordable housing and education sectors on treasury and funding
solutions.
§ Oaks works with clients in the sport and education sectors focused on
strategy, business planning and income generation activities.
The Group has two employee led groups with representation across the Aquila
Group. The aim is to focus activities on the environment and sustainability,
equality, diversity and inclusion and promoting these initiatives amongst
colleagues, making Aquila an attractive employer to work for.
Green Group
The objective of the Green Group is to reduce the Group's environmental
impact, to maintain Carbon Neutral Plus status and develop further initiatives
to mitigate the Group's impact on the environment.
EDI Group
The purpose of the Equality Diversity and Inclusion (EDI) Group is to drive
the EDI agenda across subsidiaries including developing frameworks and raising
awareness for the implementation of a range of initiatives to foster a culture
of equality, diversity and inclusion at Aquila.
Further information about, and activities within the groups, is available on
the website.
Principal risks and uncertainties
The principal risks currently faced by the Group are:
Financial risk
The main financial risks arising from the Group's activities are credit risk,
foreign currency risk, interest rate risk and liquidity, details of which can
be found in note 24 to the Financial Statements.
Unfavourable economic conditions and/or changes to government policy
The current macro-economic uncertainty resulting from COVID-19 and the
conflict in Ukraine may see a reduction in business as clients spending on
consultancy is curtailed. Local authorities continue to see significant
pressure on budgets and may stop consultancy contracts and/or limit their
commissioning of work.
The Group mitigates these risks by ensuring that each subsidiary has diversity
across its client base, not relying on any one client or group of clients.
Changes to government policy may adversely affect the Group. The Group ensures
that it is aware of the impact of these changes and adapts its products and
services to proactively respond to this risk.
Competition
Increased competition in the market continues to pose a risk to all companies
within the Group.
Staff skills, retention, recruitment and succession
As the Group is a people-based business, a significant risk is the recruitment
and retention of talent. The Group has implemented a new pay-structure and
succession plans within the year to mitigate this risk.
Data governance
The increase of cyber-attacks and the loss of data is a serious risk that is
monitored closely. The Group complies with all relevant legislation and has
invested in updated systems, security and training. The Group obtained the
certification of Cyber Essentials and is in the process of applying for Plus
status.
Mitigations of risk
The Group seeks to mitigate all these risks through ensuring that it monitors
changes in statutory, regulatory and financial requirements and maintains good
relationships with its clients, principal contacts within government,
regulators and other key influencers within the sector.
The Group is well placed to provide the full range of services needed by its
clients as the external environment changes. Our international work will
continue to be impacted due to international travel restrictions. It is
hoped these will further ease during the year.
Environment
As part of the Group's overall purpose of 'Making a better, more sustainable,
socially responsible world' the need to tackle the wider climate emergency has
been a focus and as a result Aquila has again achieved Carbon Neutral Plus
status within the year.
Further information is on the website.
The directors (whose names and functions are set out on page 27) are
responsible for preparing this report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have prepared the Company and
Group financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union and applicable law. Under
company law, the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the Company and the Group and the profit or loss of the Company and the
Group for that period.
Statement of Directors Responsibilities in respect of the Annual Report and
the Financial Statements
The directors (being Derek Joseph, Chair, Fiona Underwood, Managing Director,
Claire Banks, Group Finance Director and Company Secretary and Richard
Wollenberg, Non-Executive Director) are responsible for preparing this report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have prepared the Company and
Group financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union and applicable law. Under
company law, the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the Company and the Group and the profit or loss of the Company and the
Group for that period.
In preparing the Company and Group financial statements, the directors are
required to:
§ select suitable accounting policies and then apply them consistently;
§ make judgements and estimates that are reasonable and prudent;
§ present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
§ state whether IFRSs as adopted pursuant to Regulation (EC) No 1606/2002 as
it applies in the European Union have been followed, subject to any material
departures disclosed and explained in the financial statements;
§ prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company and Group will continue in business;
and
§ provide additional disclosures when compliance with the specific
requirements in IFRSs is insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the entity's
financial position and financial performance.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company and Group's transactions and
disclose with reasonable accuracy at any time the financial position of the
Company and Group and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
We confirm that to the best of our knowledge:
§ the Company and Group financial statements, prepared in accordance with
IFRS as adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union, give a true and fair view of the assets, liabilities,
financial position and profit of the Company and the Group; and
§ these strategic and directors' reports include a fair review of the
development and performance of the business and the position of the Company
and the Group together with a description of the principal risks and
uncertainties that they face.
Claire Banks - Group Finance Director
On behalf of the Board
24 June 2022
Consolidated statement of comprehensive income
For the year ended 31 March 2022
Notes 2022 2021
£'000 £'000
Revenue 4 10,119 7,642
Cost of sales 5 (7,913) (6,002)
Gross profit 2,206 1,640
Administrative expenses 5 (1,488) (1,339)
Operating profit 718 301
Loss on disposal of associate - (25)
Profit before taxation 6 718 276
Income tax expense 8 (139) (89)
Profit for the year 579 187
Other comprehensive income - -
Total comprehensive income for the year 579 187
Earnings per share attributable to owners of the parent
Basic 9 1.45p 0.48p
Diluted 9 1.41p 0.45p
The income statement has been prepared on the basis that all operations are
continuing operations.
Consolidated statement of financial position
As at 31 March 2022 Group Group
2022 2021
Notes £'000 £'000
Non-current assets
Goodwill 10 3,317 3,317
Property, plant and equipment 11 313 394
Investments 13 71 71
3,701 3,782
Current assets
Trade and other receivables 14 2,593 2,273
Cash and bank balances 2,193 2,127
4,786 4,400
Current liabilities
Trade and other payables 15 1,917 1,929
Lease liabilities 16 88 85
Corporation tax 144 89
2,149 2,103
Net current assets 2,637 2,297
Non-current lease liabilities 16 196 284
Net assets 6,142 5,795
Equity
Share capital 17 1,998 1,998
Share premium account 17 1,712 1,712
Merger reserve 17 3,042 3,042
Share-based payment reserve 20 415 580
Retained losses (1,025) (1,537)
Equity attributable to the owners of the parent 6,142 5,795
The financial statements were approved by the board and authorised for issue
on 24 June 2022.
Claire Banks - Group Finance Director
Company statement of financial position
As at 31 March 2022
Company Company
2022 2021
Notes £'000 £'000
Non-current assets
Property, plant and equipment 11 3 -
Investment in subsidiaries 12 4,180 4,170
Investments 13 71 71
4,254 4,241
Current assets
Trade and other receivables 14 991 1,304
Cash and bank balances 89 415
1,080 1,719
Current liabilities
Trade and other payables 15 440 393
440 393
Net current assets 640 1,326
Net assets 4,894 5,567
Equity
Share capital 17 1,998 1,998
Share premium account 17 2,341 2,341
Share-based payment reserve 20 415 580
Retained earnings 140 648
Equity attributable to the owners of the parent 4,894 5,567
As permitted by S408 Companies Act 2006, the company has not presented its own
profit and loss account. The company's loss for the year was £441k (2021:
profit £539k).
The financial statements were approved by the board and authorised for issue
on 24 June 2022.
Claire Banks - Group Finance Director
Company Registration No. 08988813
Consolidated statement of changes in equity
For the year ended 31 March 2022
Share Share based
Share premium Merger payment Retained Total
capital account reserve reserve losses equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2020 1,897 1,475 3,042 769 (1,941) 5,242
Total comprehensive income - - - - 187 187
Issue of shares 101 237 - - - 338
Transfer on reserves - - - (277) 277 -
Share based payment charge - - - 88 - 88
Dividend - - - - (60) (60)
Balance at 31 March 2021 1,998 1,712 3,042 580 (1,537) 5,795
Balance at 1 April 2021 1,998 1,712 3,042 580 (1,537) 5,795
Total comprehensive income - - - - 579 579
Transfer on reserves - - - (173) 173 -
Share based payment charge - - - 8 - 8
Dividend - - - - (240) (240)
Balance at 31 March 2022 1,998 1,712 3,042 415 (1,025) 6,142
Company statement of changes in equity
For the year ended 31 March 2022
Share Share based
Share premium payment Retained Total
capital account reserve earnings equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 April 2020 1,897 2,104 769 (108) 4,662
Total comprehensive income - - - 539 539
Issue of shares 101 237 - - 338
Transfer on reserves - - (277) 277 -
Share based payment charge - - 88 - 88
Dividend - - - (60) (60)
Balance at 31 March 2021 1,998 2,341 580 648 5,567
Balance at 1 April 2021 1,998 2,341 580 648 5,567
Total comprehensive income - - - (441) (441)
Transfer on reserves - - (173) 173 -
Share based payment charge - - 8 - 8
Dividend - - - (240) (240)
Balance at 31 March 2022 1,998 2,341 415 140 4,894
Consolidated statement of cash flow
For the year ended 31 March 2022
2022 2021
£'000 £'000
Cash flows from operating activities
Profit for the year 579 187
Income tax expense 139 89
Share based payment charge 8 88
Loss on disposal of associate - 25
Change in fair value of investments - 50
Depreciation 118 131
Operating cash flows before movement in working capital 844 570
(Increase)/Decrease in trade and other receivables (320) 114
(Decrease)/Increase in trade and other payables (12) 246
Cash generated by operations 512 930
Income taxes paid (84) (75)
Net cash inflow from operating activities 428 855
Cash flows from investing activities
Purchase of property, plant and equipment (37) (7)
Proceeds from sale of associate - 252
Net cash (outflow)/inflow from investing activities (37) 245
Cash flows from financing activities
Lease liability payments (85) (79)
Proceeds of share issue - 338
Dividends paid (240) (60)
Net cash (outflow)/inflow from financing activities (325) 199
Net increase in cash and cash equivalents 66 1,299
Cash and cash equivalents at beginning of the year 2,127 828
Cash and cash equivalents at end of the year 2,193 2,127
Company statement of cash flow
For the year ended 31 March 2022
2022 2021
£'000 £'000
Cash flows from operating activities
(Loss)/Profit for the year (441) 539
Dividends received (200) (1,122)
Profit on disposal of associate - (26)
Change in fair value of investment - 50
Depreciation - 16
Operating cash flows before movement in working capital (641) (543)
Decrease/(Increase) in trade and other receivables 313 (597)
Increase/(Decrease) in trade and other payables 39 (110)
Cash (outflow) generated by operations (289) (1,250)
Net cash (outflow) from operating activities (289) (1,250)
Cash flows from investing activities
Purchase of plant and equipment 3 -
Dividends received 200 1,122
Proceeds from sale of associate - 252
Net cash (outflow)/inflow from investing activities 203 1,374
Cash flows from financing activities
Proceeds of share issue - 338
Dividends paid (240) (60)
Net cash (outflow)/inflow from financing activities (240) 278
Net (decrease)/increase in cash and cash equivalents (326) 402
Cash and cash equivalents at beginning of the year 415 13
Cash and cash equivalents at end of the year 89 415
Notes to the financial statements
For the year ended 31 March 2022
1 General information
Aquila Services Group plc ('the Company') and its subsidiaries (together, 'the
Group') provide specialist housing, sport, education and treasury management
consultancy services. The principal activity of the Company is that of a
holding company for the Group as well as providing all the strategic and
governance functions of the Group.
The Company is a public limited company which is listed on the London Stock
Exchange, domiciled in the United Kingdom and incorporated and registered in
England and Wales. The Company's registered office is Tempus Wharf, 29a
Bermondsey Wall West, London, SE16 4SA.
2 Accounting policies
The principal accounting policies applied in preparation of these consolidated
financial statements are set out below. These policies have been
consistently applied unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with International
Accounting standards in conformity with the requirements of UK-adopted
International Accounting Standards and the Companies Act 2006.
The financial statements have been prepared on the historical cost basis
except for certain assets which are carried at fair value.
The financial statements are presented in Pounds Sterling which is the
functional and presentational currency of all companies within the group.
The preparation of the financial statements in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's
accounting policies. The areas of critical accounting estimates and
judgements are set out in note 3.
Going concern
The budgets and cashflow forecasts that have been produced and reviewed
demonstrate that the Group is forecast to generate profits and cash in the
year ended 31 March 2022 and beyond and that the Group has sufficient cash
reserves to enable the Group to meet its obligations as they fall due for a
period of at least 12 months from the date of signing the financial
statements.
Government Furlough scheme
The Company took advantage of the Governments furlough scheme and furloughed
one employee who has since returned to work. The monies received have been
offset against the employee costs.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
subsidiary entities. A subsidiary is defined as an entity over which the
Company has control. Control is achieved when the Company has power over an
entity, is exposed to, or has rights to, variable returns from its involvement
with the entity, and could use its power to affect its returns.
Consolidation of a subsidiary begins when the Company obtains control and
ceases when control is lost. The Company reassesses whether it controls an
entity if facts and circumstances indicate that there are changes to one or
more of the three control elements listed above.
All intragroup assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are eliminated on
consolidation.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring accounting policies used into line with the Group's
accounting policies.
Business combinations
Acquisitions of subsidiaries are accounted for using the acquisition method.
The consideration transferred in a business combination is measured at fair
value, which is calculated as the sum of the acquisition date fair values of
assets transferred by the Group, liabilities incurred by the Group to the
former owners of the acquiree and the equity interest issued by the Group in
exchange for control of the acquiree.
Any excess of the consideration over the fair value of the identifiable assets
and liabilities acquired is recognised as goodwill. Goodwill is not
amortised but is reviewed for impairment at least annually. If the
consideration is less than the fair value of the identifiable assets and
liabilities acquired, the difference is recognised in the statement of
comprehensive income.
Revenue recognition
The group earns income from the following principal services:
§ Revenue from consultancy services
§ Revenue from treasury management.
For all these principal services, revenue represents amounts recoverable from
clients for professional services provided during the year. Revenue is
measured based on the consideration to which the Group expects to be entitled
in a contract with a customer and excludes amounts collected on behalf of
third parties.
Revenue is recognised when control of a product or service is transferred to a
customer.
Revenue from fixed fee assignments is recognised over a period of time by
reference to the stage of completion of the actual services provided at the
reporting date, as a proportion of the total services to be provided because
the customer receives and uses the benefits simultaneously. This is
determined based on the actual labour hours spent relative to the total
expected labour hours.
Time and materials assignments are recognised as services are provided at the
fee rate agreed with the client. Unbilled revenue on individual client
assignments is classified as contract assets for client work within trade and
other receivables. Where individual on-account billings exceed recognised
revenue on a client assignment, the excess is classified as contract
liabilities for client work within trade and other payables.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any recognised impairment loss. The cost of an item of property, plant
and equipment initially recognised includes its purchase price and any cost
that is directly attributable to bringing the asset to the location and
condition necessary for use. Depreciation is recognised to write-off the
cost of assets less their residual values over their estimated useful lives,
using the straight-line method, on the following bases:
Right of use assets Over unexpired term of lease
Leasehold improvements Over unexpired term of lease
Fixtures, fittings and equipment 3-4 years
The estimated useful lives, residual values and depreciation method are
reviewed at the end of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from the continued use of
the asset. The gain or loss arising on the disposal of an asset is
determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the statement of comprehensive
income.
Investment in subsidiaries
In the Company's financial statements, investments in subsidiaries are carried
at cost less any accumulated impairment.
The cost of an investment in a subsidiary is the aggregate of the fair value,
at the date of exchange, of assets given, liabilities incurred or assumed, and
equity instruments issued by the Company, plus any costs directly attributable
to the purchase of the subsidiary.
Investments
Investments are held at fair value.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's
Statement of Financial Position when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets
Financial assets are classified into the following specified categories:
financial assets 'at fair value through profit or loss' (FVTPL) and 'amortised
cost'. The classification depends on the financial asset's contractual cash
flow characteristics and the Group's business model for managing them and is
determined at the time of initial recognition. Financial assets with cash
flows that are not solely payments of principal and interest are classified
and measured at fair value through profit or loss, irrespective of the
business model.
Amortised cost
Financial assets at amortised cost
These assets are held within a business model whose objective is to collect
contractual cash flows which are solely payments of principals and interest
and therefore classified as subsequently measured at amortised cost. With
the exception of trade receivables which are initially measured at transaction
price determined in accordance with IFRS 15, financial assets at amortised
cost are initially recognised at fair value plus transaction costs that are
directly attributable to their acquisition and are subsequently carried at
amortised cost using the effective interest rate method, less provision for
impairment. The Group's financial assets measured at amortised cost comprise
trade and other receivables and cash and cash equivalents. Cash comprises
cash in hand and deposits repayable on demand, less overdrafts payable on
demand which have a right of offset against cash balances. These instruments
are readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value.
Financial assets at fair value through profit or loss
Assets that do not meet the criteria for amortised cost are measured at
FVTPL. A gain or loss on a debt investment that is subsequently measured at
FVTPL is recognised in profit or loss and presented net within other
gains/(losses) in the period in which it arises. The Group's financial
assets measured at FVTPL comprise unquoted equity investments.
Impairment of financial assets
Impairment provisions for current trade receivables are recognised based on
the simplified approach within IFRS 9 using a provision matrix in the
determination of credit losses. During this process the probability of the
non-payment of the trade receivable is assessed. This probability is then
multiplied by the amount of the expected loss arising from default to
determine the expected credit loss for the trade receivables. Provisions are
recorded net in a separate provision account with the loss being recognised in
the consolidated income statement. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is written off
against the associated provision. Impairment provisions for receivables from
related parties and loans to related parties are recognised based on a
forward-looking expected credit loss model. The methodology used to
determine the amount of provision is based on whether there has been a
significant increase in credit risk since the initial recognition of the
asset.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Equity
instruments issued by the Group are recorded at the proceeds received, net of
direct issue costs.
Financial liabilities
Financial liabilities are classified as either financial liabilities 'at
FVTPL' or 'amortised cost'. The Group does not currently hold any financial
liabilities 'at FVTPL'.
Pensions
The Group contributes to defined contribution schemes for the benefit of its
directors and employees. Contributions payable are charged to the statement
of comprehensive income in the year they are payable.
Current and deferred income tax
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the profit or loss, because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible.
The Company's liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amount of assets and liabilities in the financial
information and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised
if the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction which affects neither the tax profit
nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply to the
year when the asset is realised, or the liability is settled. Deferred tax
is charged or credited in the profit or loss, except when it relates to items
credited or charged in other comprehensive income directly to equity, in which
case the deferred tax is also dealt with in other comprehensive income.
Deferred tax assets
Management regularly assesses the likelihood that deferred tax assets will be
recovered from future taxable income. No deferred tax asset is recognised
when management believe that it is more likely than not that a deferred asset
will not be realised.
Impairment of non-financial assets
The Group assesses at each statement of financial position date if there is
any indication that an asset may be impaired. If any such indication exists,
the Group estimates the recoverable amount of the asset.
If there is any indication that an asset may be impaired, the recoverable
amount is estimated for the individual asset. If it is not possible to
estimate the recoverable amount of the individual asset, the recoverable
amount of the cash-generating unit to which the asset belongs is determined.
The recoverable amount of an asset or a cash-generating unit is the higher of
its fair value less costs to sell and its value in use.
If the recoverable amount of an asset is less than its carrying amount, the
carrying amount of the asset is reduced to its recoverable amount. That
reduction is an impairment loss.
An impairment loss of assets carried at cost less any accumulated depreciation
or amortisation is recognised immediately in profit or loss.
An entity assesses at each reporting date whether there is any indication that
an impairment loss recognised in prior periods for assets other than goodwill
may no longer exist or may have decreased. If any such indication exists, the
recoverable amounts of those assets are estimated.
The increased carrying amount of an asset other than goodwill attributable to
a reversal of an impairment loss does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the
asset in prior periods.
A reversal of an impairment loss of assets carried at cost less accumulated
depreciation or amortisation other than goodwill is recognised immediately in
profit or loss.
Provisions
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation and a reliable estimate of
the amount can be made. If the effect is material, provisions are determined
by discounting the expected future cash flows at an appropriate pre-tax
discount rate.
Leases
Leases are accounted for on a 'right-of-use model' reflecting that, at the
commencement date, the Company as a lessee has a financial obligation to make
lease payments to the lessor for its right to use the underlying asset during
the lease term. The financial obligation is recognised as a lease liability,
and the right to use the underlying asset is recognised as a right-of-use
asset. The right-of-use assets are recognised within property, plant and
equipment on the face of the financial position and are presented separately
in note 11.
The lease liability is initially measured at the present value of the lease
payments using the rate implicit in the lease or, where that cannot be readily
determined, the incremental borrowing rate. Subsequently the lease liability
is measured at amortised cost, with interest increasing the carrying amount
and lease payments reducing the carrying amount. The carrying amount is
re-measured to reflect any reassessment or lease modifications, or to reflect
revised in-substance fixed lease payments.
Right-of-use assets are measured at cost comprising the following:
· the amount of the initial measurement of lease liability;
· any lease payments made at or before the commencement date less any
lease incentives received;
· any initial direct costs; and
· restoration costs.
Subsequently the right-of-use asset is measured at cost less accumulated
depreciation and impairment losses. Depreciation is calculated to write off
the cost on a straight line-basis over the lease term.
The Group does not have any short-term leases of equipment or vehicles.
Share capital/equity instruments
Ordinary shares are classified as equity. Equity instruments issued by the
Company are recorded at the proceeds received, net of direct issue costs.
The Company has one class Ordinary share which carries no right to fixed
income. Each share carries the right to one vote at general meetings of the
Company.
Share-based payments
Equity-settled share-based payments to employees and directors are measured at
the fair value of the equity instruments at grant date. The fair value
excludes the effect of non-market-based vesting conditions.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of equity instruments that will eventually vest. At
each reporting date, the Group revises the estimate of the number of equity
instruments expected to vest as a result of the effect of non-market-based
vesting conditions. The impact of the revision of the original estimates, if
any, is recognised in profit or loss such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to equity reserves.
The fair value of the options is measured using the Black Scholes options
valuation model.
Adoption of new and revised standards
No new standards were adopted in the year.
Standards issued but not yet effective
There are no other standards that are not yet effective and that would be
expected to have a material impact on the entity in the current or future
reporting periods and on foreseeable future transactions.
3 Critical accounting estimates and judgements
In application of the Group's accounting policies, which are described in note
2, the directors are required to make judgements, estimates and assumptions
about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are
based on historical experience and other factors that are relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Critical judgements in applying the Group's accounting policies
The following are the critical judgements, apart from those involving
estimations, that the directors have made in the process of applying the
Group's accounting policies and that have a significant effect on the amounts
recognised in the financial statements.
Work in progress within revenue recognition
Work in progress is calculated on a project by project basis using the fair
value of chargeable time that is un-invoiced at the period end. Historic
analysis shows that recovery rates of work in progress are very high; the
Group does not expect any work in progress to be irrecoverable. Work in
progress is reviewed on a monthly basis to ensure it is recognised
appropriately, it is probable that economic benefits will flow to the Group
and that the fair value can be reliably measured (note 4). Work in progress
is accounted for under contract assets.
Share based payments
The Company has granted share options to certain employees and directors of
the Group. The share options granted become exercisable at varying future
dates. If certain conditions are met the employee will be eligible to
exercise their option at an exercise price determined on the date the share
options are granted.
The share-based payment charge is recognised in the statement of comprehensive
income and is calculated based on the Company's estimate of the number of
share options that will eventually vest.
Assumptions regarding the fair value of the Company's shares are considered
when measuring the value of share-based payments for employees, which are
required to be accounted for as equity-settled share-based payment
transactions pursuant to IFRS 2. The resulting staff costs are recognised pro
rata in the statement of comprehensive income to reflect the services rendered
as consideration during the vesting period (note 20).
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the reporting date, that may have a significant risk of causing
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below.
Impairment of goodwill
The carrying amounts of the Group's assets value are reviewed at each
reporting date to determine whether there is any indication of impairment.
If any such indication exists, the asset's recoverable amount is estimated,
and an impairment loss is recognised where the recoverable amount is less than
the carrying value of the asset. Any impairment losses are recognised in the
income statement.
The recoverable amount of the goodwill is determined from value in use
calculations. The key assumptions for the value in use calculations are
those regarding the discount rates, growth rates and expected changes to
income and direct costs during the period.
Management estimates discount rates using pre-tax rates that reflect current
market assessments of the time value of money and the risks specific to each
acquisition of goodwill. Discount rates of 13.9% and a terminal value of 1%
has been used.
Growth rates of 0-15% have been applied, these are based on industry rates,
management's knowledge of the different businesses and the markets and the
ability for the businesses to expand. The maximum period over which the
cashflows are reviewed is 5 years.
Sensitivities have been applied to all assumptions.
Valuation of unquoted investments
The Group determines the fair value of these financial instruments using
recent transactions or valuation models if information about recent
transactions is not available. The values derived from applying these models
are significantly impacted by the choice of the valuation model used and the
underlying assumptions made, such as the amounts and timing of future cash
flows, discount rates, volatility and credit risk.
Management has determined that a valuation based on five time annual turnover
is an appropriate measure of fair value.
4 Revenue and Finance income
An analysis of the Group's revenue is as follows:
2022 2021
£'000 £'000
Continuing operations - rendering of services
Specialist housing consultancy income 8,502 5,961
Treasury management income 600 657
Specialist sports and education consultancy income 1,017 1,024
10,119 7,642
5 Operating segments
The Group has two reportable segments; consultancy and treasury management
services, the results of which are included within the financial
information. In accordance with IFRS8 'Operating Segments', information on
segment assets is not shown, as this is not provided to the chief operating
decision-maker.
The principal activities of the Group are as follows:
Consultancy - a range of services to support the business needs of a diverse
range of organisations (including housing associations, local authorities,
multi academy trusts and sporting businesses) across the housing, education
and sports sectors. Most consultancy projects run over one to two months and
on-going business development is required to ensure a full pipeline of
consultancy work for the employed team.
Within this segment of the business several client organisations enter fixed
period retainers to ensure immediate call-off of the required services.
The accounting policies of the reportable segments are the same as the Group's
accounting policies described in note 2. Segment profit represents the
profit earned by each segment, without allocation of central administration
costs, including directors' salaries, finance costs and income tax expense.
This is the measure reported to the Group's executive directors for the
purpose of resource allocation and assessment of segment performance.
2022 2021
£'000 £'000
Revenue from Consultancy 9,519 6,985
Revenue from Treasury management 600 657
10,119 7,642
Cost of sales from Consultancy 7,367 5,436
Cost of sales from Treasury management 546 566
7,913 6,002
Gross profit from Consultancy 2,152 1,549
Gross profit from Treasury management 54 91
2,206 1,640
Administrative expenses (1,488) (1,339)
Operating profit 718 301
Within consultancy revenues, approximately 9% (2021: 8%) has arisen from the
segment's largest customer; within treasury management 15% (2021: 26%).
Geographical information
Revenues from external customers, based on location of the customer, are shown
below:
2022 2021
£'000 £'000
UK 9,528 7,057
Europe 380 401
Rest of World 211 184
10,119 7,642
6 Profit before taxation
2022 2021
£'000 £'000
Profit before taxation is arrived at after charging:
Auditors' remuneration (see below) 56 53
Depreciation of property, plant and equipment (see note 11) 25 38
Depreciation of leasehold property (see note 11) 93 93
Staff costs (see note 7) 5,879 5,067
Significant reorganisation costs * - 175
* Significant restructuring costs include staff related costs of £0k (2021:
£175k) arising from the redundancy costs relating to COVID-19-19 are provided
for.
Breakdown of auditors' remuneration
2022 2021
£'000 £'000
Auditors' remuneration
Fees payable to the Company's auditors for:
The audit of the parent Company 33 30
The audit of the Company's subsidiaries 18 17
The review of the interim report 3 4
The provision of a CASS assurance report to the FCA 2 2
56 53
7 Staff costs
2022 2021
The average monthly number of employees (including directors) employed by the 86 76
Group was:
2022 2021
£'000 £'000
Aggregate remuneration (including directors)
Wages and salaries 5,171 4,250
Share-based payments 8 88
Pension contributions 262 203
Social security costs 438 526
5,879 5,067
The above amounts are net of £4k (2021:£60k) relating to income received
from the Government's furlough scheme.
7 Staff costs (continued)
2022 2021
£'000 £'000
Directors' remuneration
Salary (including taxable benefits) 330 435
Share-based payments 5 8
Pension contributions 17 19
352 462
Two directors are members of the company's defined contribution pension
scheme.
The amounts set out above include remuneration to the highest paid director as
follows:
2022 2021
£'000 £'000
Salary (including taxable benefits) 177 169
Share-based payments 4 5
Pension contributions 10 9
191 183
Remuneration of key management personnel
The remuneration of the key management personnel of the Group, including all
directors, is set out below in aggregate for each of the categories specified
in IAS 24 Related Party Disclosures.
2022 2021
£'000 £'000
Wages and salaries 1,186 1,197
Share-based payments (7) 23
Post-retirement benefits 49 44
1,228 1,264
8 Taxation
2022 2021
£'000 £'000
Corporation tax:
Current year 139 89
The tax charge for the year can be reconciled to the profit in the income
statement as follows:
2022 2021
£'000 £'000
Profit before taxation 718 276
Tax at the UK corporation tax rate of 19% (2021: 19%) 136 52
Expenses not deductible 3 37
Tax expense for the year 139 89
9 Earnings per share
Basic earnings per share is calculated by dividing the profit after tax
attributable to the equity holders of the Group by the weighted average number
of shares in issue during the year. Diluted earnings per share is calculated
by adjusting the weighted average number of shares outstanding to assume
conversion of all potential dilutive shares, namely share options. Details
of which are set out in note 20.
2022 2021
£'000 £'000
Profit after tax attributable to owners of the parent 579 187
Weighted average number of shares '000 '000
- Basic 39,962 39,282
- Diluted 41,153 41,602
Basic earnings per share 1.45p 0.48p
Diluted earnings per share 1.41p 0.45p
10 Goodwill
Group Goodwill
£'000
Cost
At 1 April 2020 3,872
Additions -
At 31 March 2021 3,872
Additions -
At 31 March 2022 3,872
Accumulated impairment losses
At 1 April 2020 (555)
Impairment loss for the year -
At 31 March 2021 (555)
Impairment losses for the year -
At 31 March 2022 (555)
Net book value
At 1 April 2020 3,317
At 1 April 2021 3,317
At 31 March 2022 3,317
Goodwill acquired in a business combination is allocated, at acquisition, to
the cash generating units that are expected to benefit from that business
combination. Each Subsidiary is considered to be the cash generating unit
for the purpose of impairment review.
The Group tests goodwill annually for impairment, or more frequently if there
are any indications that goodwill might be impaired.
The recoverable amount of goodwill is determined from value in use
calculations. The key assumptions for the value in use calculations are
those regarding growth rate of client base and project fees. Management's
approach to determining the values to each key assumption is based on
experience and project work already secured for future periods and the
expected utilisation of consultants. Management have projected cash flows
over a period of five years, based on growth rates of between 0% and 15% per
annum; this is based on past performance and expected future activity. A
discount rate of 13.9% and a terminal value of 1.0% has been used.
Sensitivity analysis has been performed on the value in use calculations,
holding all other variables constant to:
· Apply a 2-6% reduction to the forecasted turnover
· Apply a 5-10% increase in cost of sales and of overheads
· Apply an increase in the discount rate to 19%.
The sensitivities applied do not provide reasonable possible changes and
therefore no impairment has been made.
11 Property, plant and equipment (Group)
Group Right of use assets-Leasehold property Leasehold improvement Fixtures and fittings Computer equipment Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 April 2020 514 27 45 166 752
Additions - - - 7 7
At 31 March 2021 514 27 45 173 759
Additions - - - 37 37
At 31 March 2022 514 27 45 210 796
At 1 April 2020 65 6 38 125 234
Charge for the year 88 5 3 35 131
At 31 March 2021 153 11 41 160 365
Charge for the year 88 5 3 22 118
At 31 March 2022 241 16 44 182 483
Net book value
At 1 April 2020 449 21 7 41 518
At 31 March 2021 361 16 4 13 394
At 31 March 2022 273 11 1 28 313
Company Computer equipment
£'000
Cost
At 1 April 2020 64
Additions -
At 31 March 2021 64
Additions 3
At 31 March 2022 67
Accumulated depreciation
At 1 April 2020 48
Charge for the year 16
At 31 March 2021 64
Charge for the year -
At 31 March 2022 64
Net book value
At 1 April 2020 16
At 31 March 2021 -
At 31 March 2022 3
12 Investment in subsidiaries
Company Investments in subsidiaries
£'000
Cost
At 1 April 2020 4,637
Additions 88
At 31 March 2021 4,725
Addition 10
At 31 March 2022 4,735
Accumulated impairment losses
At 1 April 2020 555
Impairment losses for the year -
At 31 March 2021 555
Impairment losses for the year -
At 31 March 2022 555
Net book value
At 1 April 2020 4,082
At 31 March 2021 4,170
At 31 March 2022 4,180
Details of the Company's subsidiaries at 31 March 2022 are as follows:
Place of incorporation and operation Principal activity Proportion of ownership and voting rights held
Altair Consultancy and Advisory Services Limited England and Wales Specialist housing consultancy 100%
Aquila Treasury and Finance Solutions Limited England and Wales 100%
Treasury management consultancy
Oaks Consultancy Limited England and Wales 100%
Specialist sports and education consultancy
The accounting reference date of each of the subsidiaries above is co-terminus
with that of the Company. The registered office of each subsidiary is Tempus
Wharf, 29a Bermondsey Wall West, London, SE16 4SA.
The following companies are all dormant, the registered office of each is
Tempus Wharf, 29a Bermondsey Wall West, London, SE16 4SA.
Place of incorporation and operation Proportion of ownership and voting rights held Accounting reference date
Altair International Consultancy Limited England and Wales 100% held by Aquila Services Group plc 31 August
Murja Limited England and Wales 100% held by ATFS Limited 30 May
Finalysis UK Limited England and Wales 100% held by Aquila Services Group plc 31 March
13 Investments
Fair Value Hierarchy 2022 2021
£'000 £'000
Unquoted equity investments Level 3 71 71
The Group has a 5.3% equity shareholding in AssetCore Limited an unquoted
company. AssetCore's principal activity is a cloud-based platform used to
manage loan security within the affordable housing sector. As explained in
Note 3, based on the information available at the reporting date the directors
consider cost to be an appropriate estimate of fair value.
Financial instruments measured at fair value subsequent to initial recognition
are grouped into levels 1 to 3 based on the degree to which the fair value is
observable, i.e.:
Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities.
Level 2 fair value measurements are those derived from inputs other than
quoted prices included within level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3 fair value measurements are those derived from valuation techniques
that include inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
14 Trade and other receivables
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade receivables 2,240 1,862 - -
Group undertakings - - 964 1,281
Other receivables 35 20 10 13
Prepayments 117 107 17 10
Contract assets 201 284 - -
2,593 2,273 991 1,304
Total <30 days 30-60 days 66-90 days >90 days
£'000 £'000 £'000 £'000 £'000
31 March 2022 2,240 2,182 14 23 21
31 March 2021 1,862 1,704 - 26 132
No expected credit loss is recognised in the accounts. The Group does not
expect any debts not to be paid. The directors have reviewed the provision for
expected credit loss and have not identified any which need to be provided
for.
15 Trade and other payables
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade payables 510 273 11 19
Other payables 77 50 - -
Amounts owed to Group undertakings - - 283 270
Taxes and social security costs 715 825 - -
Accruals 246 484 146 104
Contract liabilities 369 297 - -
1,917 1,929 440 393
Of the contract liability brought forward at the start of the year £297k
(2021: £181k) was recognised in revenue in the year.
16 Long term liabilities
The Statement of Financial Position shows the following amounts relating to
lease liabilities.
2022
£'000
At 31 March 2021 369
Decrease in lease liabilities (85)
Closing amounts as at 31 March 2022 284
Current 88
Non-current 196
17 Share capital
2022 2021
£'000 £'000
Allotted, called up and fully paid
39,961,955 (2021: 39,961,955) Ordinary shares of 5p each 1,998 1,998
The Company has one class Ordinary share which carries no right to fixed
income. Each share carries the right to one vote at general meetings of the
Company.
A reconciliation of share capital, share premium account and merger reserve is
set out below:
Number of Ordinary shares Amount called up and fully paid Share premium Merger reserve
'000 £'000 £'000 £'000
At 31 March 2020 37,947 1,897 1,475 3,042
Issued at 10p per share on 20 Jul 2020 824 41 41 -
Issued at 23p per share on 20 Jul 2020 1,088 55 196 -
Issued at 5p per share on 15 Mar 2021 103 5 - -
-
At 31 March 2021 39,962 1,998 1,712 3,042
At 31 March 2022 39,962 1,998 1,712 3,042
18 Reserves
The share premium account represents the amount received on the issue of
Ordinary shares by the Company in excess of their nominal value and is
non-distributable.
The merger relief reserve arose on the Company's acquisition of Altair.
There is no legal share premium on the shares issued as consideration as
section 612 of the Companies Act 2006, which deals with merger relief, applies
in respect of the acquisition. Since the shareholders of Altair became the
majority shareholders of the enlarged group, the acquisition is accounted for
as though the legal acquiree is the accounting acquirer.
19 Dividends
2022 2021
Amounts recognised as distributions to equity holders £'000 £'000
Final dividend for the year ended 31 March 2021 of 0.4p per share (2020: Nil) 160 -
Interim dividend for the year ended 31 March 2022 of 0.2p per share (2021: 80 60
0.15p)
240 60
Proposed final dividend for the year ended 31 March 2022 of 0.4p per share 160 160
(2021: 0.4p)
20 Share-based payment transactions
The Company operates an Unapproved Scheme and an Enterprise Management
Incentives Scheme. The total amount recognised in the year to 31 March 2022
arising from share-based payment transactions is £8k (2021 expense: £88k).
Unapproved scheme Number '000 Weighted average
exercise price
Number of options outstanding at 1 April 2021 171 £0.35
Lapsed during period -
Exercised during period -
Number of options outstanding as at 31 March 2022 171
Number of options exercisable as at 31 March 2022 171
The exercise price of the options outstanding at 31 March 2022 is 35p. The
weighted average remaining contractual life of the options outstanding at 31
March 2022 is 3 years (2021: 4 years).
EMI scheme Number Weighted average exercise price
'000
Number of options outstanding at 1 April 2021 2,320 £0.05
Cancelled during the period (96)
Lapsed during period (750)
1,474
Number of options outstanding as at 31 March 2022
Number of options exercisable as at 31 March 2022 1,474
The weighted average remaining contractual life of the options outstanding at
31 March 2022 is 3 years (2021: 4 years).
21 Related party disclosures
Balances and transactions between the Group and other related parties are
disclosed below:
Dividends totalling £70k (2021: £17k) were paid in the year in respect of
Ordinary Shares held by the Company's directors.
At 31 March 2022, the balance owed to Richard Wollenberg for services as a
non-executive director was £4k (2021: £4k).
Amounts paid to Derek Joseph for consultancy services £23k (2021: £51k).
22 Control
In the opinion of the Directors there is no single ultimate controlling party.
23 Financial instruments
Financial risk management
The Group's activities are exposed to a variety of market risk (including
foreign currency risk and interest rate risk), credit risk and liquidity risk.
Credit risk
Credit risk is the risk of financial loss to the Group resulting from
counterparties failing to discharge their obligations to the Group. The
Group's principal financial assets are trade and other receivables and cash
and cash equivalents.
The Group considers its credit risk to be low. Of the total trade
receivables at the 2022 year-end £258k (2021: £180k) is due from one
customer.
There are no other customers that represent more than 10% of the total balance
of trade receivables. The maximum exposure to credit risk is equal to the
carrying value of these instruments.
Liquidity risk
Liquidity risk is the risk of the Group being unable to meet its liabilities
as they fall due. The Group manages liquidity risk by maintaining enough
cash reserves and holding banking facilities, and by continuously monitoring
forecast and actual cash flows. In addition, the Group is a cash generative
business with income being received regularly over the course of the year.
The Group held cash balances of £2,193k (2021: £2,127k) at the year-end.
Foreign currency risk
Foreign exchange risk is the risk of loss due to adverse movements in the
exchange rates affecting the Group's profits and cash flows. Only a very
small number of clients are invoiced in Euros and USD and the foreign exchange
exposure is not considered a significant risk. The Group's principal
financial assets are cash and cash equivalents and trade and other
receivables, which are almost exclusively denominated in Pounds Sterling.
Interest rate risk
The Group does not undertake any hedging activity in this area. The main
element in interest rate risk involves sterling deposits.
Capital risk management
Internal working capital requirements are low and are regularly monitored.
The Group's objective when managing capital is to safeguard the Group's
ability to continue as a going concern in order to provide return for
shareholders, benefits for other stakeholders and to maintain optimal capital
structure and to reduce the cost of capital.
In order to ensure an appropriate return for shareholder capital invested in
the Group, management thoroughly evaluates all material projects and potential
acquisitions and has them approved by the Board of Directors where applicable.
The Group monitors capital on a short- and medium-term view.
24 Post Balance Sheet event
There are no post balance sheet events.
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting (AGM) of Aquila
Services Group plc will be held at Tempus Wharf 29A, Bermondsey Wall West,
London, SE16 4SA on 27 July 2022 at 3:00 pm, for the purpose of considering
and, if thought fit, passing the following resolutions, of which resolutions
numbered 1 to 7 will be proposed as ordinary resolutions and resolution 8 and
9 will be proposed as a special resolution. Resolutions 7 to 9 are items of
special business.
Ordinary business
1. To receive the reports of the directors and auditor and the financial
statements for the period ended 31 March 2022.
2. To approve the remuneration report for the period ended 31 March 2022.
3. That, following a recommendation by the directors, a final dividend
payment of 0.4p per Ordinary Share shall be paid to those persons who were
named on the register of shareholders on 15 July 2022.
4. That Crowe UK LLP be and is hereby reappointed as auditor of the
Company and that the directors be authorised to determine the auditor's
remuneration.
5. To re-elect as a director, Fiona Underwood, who was re-allected at the
AGM held on 24 July 2019.
6. To re-elect as a director, Claire Banks, who was appointed at the AGM
held on 24 July 2019.
Special business
7. That, in accordance with section 551 of the Companies Act 2006 ("CA
2006"), the directors be generally and unconditionally authorised to issue and
allot equity securities (as defined by section 560 of the CA 2006) up to an
aggregate nominal amount of:
7.1 £82,259 in connection with the valid exercise of the options
(both approved and unapproved) granted by the Company (as set out in the
prospectus issued by the Company dated 20 July 2015), any unapproved options
granted to current or former officers of the Company and options granted to
employees and officers of the Company and/or its subsidiaries in accordance
with the terms of the Company's Employee Share Option Scheme ("Options"); and
7.2 in any other case, £666,033 (such amount to be reduced by the
nominal amount of any equity securities allotted pursuant to the authorities
in paragraph 6.1 above in excess of the stated amount) provided that this
authority shall, unless renewed, varied or revoked by the Company, expire on
the date of the next annual general meeting of the Company save that the
Company may, before such expiry, make offers or agreements which would or
might require relevant securities to be allotted and the directors may allot
relevant securities in pursuance of such offer or agreement notwithstanding
that the authority conferred by this resolution has expired.
This resolution revokes and replaces all unexercised authorities previously
granted to the directors to allot relevant securities but without prejudice to
any allotment of shares or grant of rights already made, offered or agreed to
be made pursuant to such authorities.
8. That, subject to Resolution 7 above being duly passed, the directors of
the Company be and are hereby empowered, pursuant to section 570 of the CA
2006, to allot equity securities (as defined in section 560 of the CA 2006)
wholly for cash pursuant to the authority conferred upon them by Resolution 7
above (as varied, renewed or revoked from time to time by the Company at a
general meeting) as if section 561(1) of the CA 2006 did not apply to any such
allotment provided that such power shall be limited to the allotment of equity
securities:
8.1 in connection with a rights issue or any other pre-emptive
offer in favour of holders of equity securities where the equity securities
offered to each such holder is proportionate (as nearly as may be) to the
respective amounts of equity securities held by each such holder subject only
to such exclusion or other arrangements as the directors may consider
appropriate to deal with fractional entitlements or legal or practical
difficulties under the laws of or the requirements of any recognised
regulatory body in any territory or otherwise;
8.2 in connection with the valid exercise of Options;
8.3 in connection with the valid exercise of any share options
granted to employees of the Group in accordance with the terms of the Employee
Share Option Scheme; and
8.4 otherwise, up to a maximum nominal amount of £99,905.
The power granted by this resolution will expire on the conclusion of the
Company's next annual general meeting (unless renewed, varied or revoked by
the Company prior to or on such date) save that the Company may, before such
expiry make offers or agreements which would or might require equity
securities to be allotted after such expiry and the directors may allot equity
securities in pursuance of any such offer or agreement notwithstanding that
the power conferred by this resolution has expired.
This resolution revokes and replaces all unexercised powers previously granted
to the directors to allot equity securities as if section 561(1) of the CA
2006 did not apply but without prejudice to any allotment of equity securities
already made or agreed to be made pursuant to such authorities.
9. That the Company be and is hereby authorised generally and
unconditionally to make market purchases (within the meaning of section 693(4)
of the CA 2006) of its ordinary shares ("Ordinary Shares") provided that:
9.1 the maximum aggregate number of Ordinary Shares that may be
purchased is 3,996,196;
9.2 the minimum price (exclusive of expenses) which may be paid
for an Ordinary Share is £0.05;
9.3 the maximum price (exclusive of expenses) which may be paid
for an Ordinary Share is the higher of:
9.3.1 105 per cent of the average closing middle market quotations for
the Ordinary Shares as quoted on the Official List of the London Stock
Exchange for the five business days prior to the day the purchase is made; and
9.3.2 the value of an Ordinary Share calculated on the basis of the
higher of the price quoted for:
9.3.3 the last independent trade of; and
9.3.4 the highest current independent bid for any number of Ordinary
Shares on the Official List.
9.4 The authority conferred by this resolution shall expire on the
conclusion of the Company's next annual general meeting save that the Company
may, before the expiry of the authority granted by this resolution, enter into
a contract to purchase Ordinary Shares which will or may be executed wholly or
partly after the expiry of such authority.
Registered
office:
By order of the board
Tempus
Wharf
Claire Banks
29a Bermondsey Wall
West
Company Secretary
London
SE16
4SA
24 June 2022
Notes
1. A member entitled to attend and vote at the above meeting
is entitled to appoint a proxy to exercise all or any of their rights to
attend, speak and vote on his/her behalf at the meeting. A proxy need not be
a member of the company.
2. You may appoint more than one proxy provided each proxy is
appointed to exercise rights attached to different shares. You may not appoint
more than one proxy to exercise rights attached to any one share. To appoint
more than one proxy you may photocopy the form of proxy. Please indicate the
proxy holder's name and the number of shares in relation to which they are
authorised to act as your proxy (which, in aggregate, should not exceed the
number of shares held by you). Please also indicate if the proxy instruction
is one of multiple instructions being given. All forms must be signed and
should be returned together in the same envelope.
3. A form of proxy accompanies this notice. Forms of proxy,
to be valid, must be delivered to the company's registrars, Neville Registrars
Limited, Neville House, Steelpark Road, Halesowen B62 8HD in accordance with
the instructions printed thereon, not less than 48 hours before the time set
for the holding of the meeting.
4. If you are not a member of the company but you have been
nominated under section 146 of the Companies Act 2006 (the 'Act') by a member
of the company to enjoy information rights, you do not have the rights of
members in relation to the appointment of proxies set out in notes 1, 2 and 3.
The rights described in those notes can only be exercised by members of the
company.
5. A vote withheld is not a vote in law, which means that the
vote will not be counted in the calculation of votes for or against the
resolution. If you either select the "Withheld" option or if no voting
indication is given, your proxy will vote or abstain from voting at his or her
discretion. Your proxy will vote (or abstain from voting) as he or she thinks
fit in relation to any other matter which is put before the meeting.
6. Information regarding the meeting, including the
information required by section 311A of the Act, is available from
www.aquilaservicesgroup.co.uk (http://www.aquilaservicesgroup.co.uk)
7. As provided by Regulation 41 of the Uncertificated
Securities Regulations 2001, only those members registered in the register of
members of the company 48 hours before the time set for the meeting shall be
entitled to attend and vote at the meeting in respect of the number of shares
registered in their name at that time. Changes to entries on the relevant
register of securities after that time shall be disregarded in determining the
rights of any person to attend or vote at the meeting.
8. As at close of business on 24 June 2022 the company's
issued share capital comprised 39,961,955 ordinary shares of 5 pence each.
Each ordinary share carries the right to one vote at a general meeting of the
company and, therefore, the total number of voting rights in the company at
close of business on 24 June 2022 is 39,961,955.
9. Under section 319A of the Act, the company must answer any
question you ask relating to the business being dealt with at the meeting
unless (a) answering the question would interfere unduly with the preparation
for the meeting or involve the disclosure of confidential information; (b) the
answer has already been given on a website in the form of an answer to a
question; or (c) it is undesirable in the interests of the company or the good
order of the meeting that the question be answered.
10. If you are a person who has been nominated under section 146
of the Act to enjoy information rights (a 'Nominated Person'), you may have a
right under an agreement between you and the member of the company who has
nominated you to have information rights (a 'Relevant Member') to be appointed
or to have someone else appointed as a proxy for the meeting. If you either
do not have such a right or if you have such a right but do not wish to
exercise it, you may have a right under an agreement between you and the
Relevant Member to give instructions to the Relevant Member as to the exercise
of voting rights. Your main point of contact in terms of your investment in
the company remains the Relevant Member (or, perhaps, your custodian or
broker) and you should continue to contact them (and not the company)
regarding any changes or queries relating to your personal details and your
interest in the company (including any administrative matters). The only
exception to this is where the company expressly requests a response from you.
11. Members satisfying the thresholds in section 338 of the Act
may require the company to give, to members of the company entitled to receive
notice of the Annual General Meeting, notice of a resolution which those
members intend to move (and which may properly be moved) at the Annual General
Meeting. A resolution may properly be moved at the Annual General Meeting
unless (i) it would, if passed, be ineffective (whether by reason of any
inconsistency with any enactment or the company's constitution or otherwise);
(ii) it is defamatory of any person; or (iii) it is frivolous or vexatious.
The business which may be dealt with at the Annual General Meeting includes
a resolution circulated pursuant to this right. A request made pursuant to
this right may be in hard copy or electronic form, must identify the
resolution of which notice is to be given, must be authenticated by the
person(s) making it and must be received by the company not later than 6 weeks
before the date of the Annual General Meeting.
12. Members satisfying the thresholds in section 338A of the Act
may request the company to include in the business to be dealt with at the
Annual General Meeting any matter (other than a proposed resolution) which may
properly be included in the business at the Annual General Meeting. A matter
may properly be included in the business at the Annual General Meeting unless
(i) it is defamatory of any person or (ii) it is frivolous or vexatious. A
request made pursuant to this right may be in hard copy or electronic form,
must identify the matter to be included in the business, must be accompanied
by a statement setting out the grounds for the request, must be authenticated
by the person(s) making it and must be received by the company not later than
6 weeks before the date of the Annual General Meeting.
13. Members satisfying the thresholds in section 527 of the Act
can require the company to publish a statement on its website setting out any
matter relating to (i) the audit of the company's accounts (including the
auditor's report and the conduct of the audit) that are to be laid before the
Annual General Meeting; or (ii) any circumstances connected with an auditor of
the company ceasing to hold office since the last Annual General Meeting,
which the members propose to raise at the meeting. The company cannot
require the members requesting the publication to pay its expenses. Any
statement placed on the website must also be sent to the company's auditor no
later than the time it makes its statement available on the website. The
business which may be dealt with at the Annual General Meeting includes any
statement that the company has been required to publish on its website
pursuant to this right.
14. Copies of the directors' service contracts will be available
for inspection at the registered office of the company during usual business
hours from the date of this notice until the date of the Annual General
Meeting, and also during and at least fifteen minutes before the beginning of
the Annual General Meeting.
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