REG - Aukett Swanke Group - Interim Results
29/06/2022 07:00
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RNS Number : 5420Q Aukett Swanke Group PLC 29 June 2022
Aukett Swanke Group Plc
Interim results
For the six months ended 31 March 2022
Aukett Swanke Group Plc ("the Group"), a company that principally provides
architectural and interior design services, is pleased to announce its
interim results for the six-month period ended 31 March 2022.
Highlights
Total revenue* increases to £5.78m (2021: £5.28m)
Revenue from continuing operations increases to £4.53m (2021: £3.70m)
United Kingdom returns to profit before group costs of £40k (2021: loss
£567K)
Group costs reduced by 30% to £419k (2021: £598k)
Post period disposal of interest in Middle East operation for AED 5.0m
(£1.1m)
Improving order book
*Continuing and discontinued operation revenue combined
Commenting on the interim results, CEO Nicholas Thompson said:
" The period under review highlights a return to growth, particularly in the
UK and a significant reduction in the running costs of the Group as we
progress our recovery strategy."
For further information please contact:
Aukett Swanke Group Plc
Nicholas Thompson, Antony Barkwith +44 (0) 20 7843 3000
Strand Hanson Limited (Financial and Nominated Adviser)
James Spinney, James Bellman +44 (0) 20 7409 3494
Arden Partners plc (Broker)
John Llewellyn-Lloyd, Louisa Waddell, Benjamin Onyeama-Christie +44 (0) 20 7614 5900
Investor/Media
Chris Steele +44 (0) 7979 604 687
Interim statement
Overview
In the half year under review and subsequently there has been a marked
improvement in the Group's trading and financial position.
The result for the six months ended 31 March 2022, shows revenues (from
continuing and discontinued operations combined) increasing by £500k to
£5.78m (2021: £5.28m) and with this our losses before tax substantially
reduced to £413k (2021: £1,017k).
Continuing operations' revenues increased by 22% to £4.53m (2021: £3.70m)
and the loss before tax fell significantly to £152k (2021: £737k) evidencing
the progress being made in restoring the group's underlying profitability.
Revenues from discontinued operations fell by 21% to £1.25m (2021: £1.58m)
and the loss before tax showed a small reduction at £261k (2021: £280k).
The post-period disposal of John R Harris & Partners Limited ("John R
Harris") to the local management team has also significantly improved the
Group's cash position.
Group Results
Within the overall result, the United Kingdom increased revenues to £4.43m
(2021: £3.44m) and net of consultants, revenues rose by £714k to £3.31m
(2021: £2.59m). As a result, the prior year loss before management charges of
£567k moved into a profit of £40k for the reporting six months. In effect
85% of the growth dropped straight to the bottom line.
Continental European revenues were down 64% (locally 42%) as the Turkish lira
depreciated by c.80% such that revenues were only £94k (2021: £258k).
Profits before management charges for Continental Europe, as a whole, also
reduced to £123k (2021: £227k). Both German operations continue to perform
well in a post covid market.
Elsewhere the operating results were not so favourable. The Middle East
continued to lose revenues with a fall of 21% to £1.25m (2021: £1.58m),
resulting in an increased loss of £157k (2021: £79k) before management
charges. This was further impacted by the closure costs related to the
numerous licences that were previously required in the region. However, since
the period end, we have disposed of our interest in the main operation, John R
Harris, and we continue to downsize our residual operations.
A pleasing upturn in new business wins (see below) in both the United Kingdom
and Continental Europe, leads us to expect further improvement in the second
half.
Having commented on the disproportionate cost of the Group compared to the
operations we are pleased to report a reduction in Group costs in the period
of 30% to £419k (2021: £598k). This was mainly due to a reduction in
executive salary costs as part of retirement planning processes.
Projects
Across the Group there have been significant new wins and project completions.
In the UK preliminary stages on a range of Hybrid mixed use projects have
begun for Related Argent, Segro, LaSalle, Freshwater, Regal London, Joseph
Homes, Royal London Asset Management and Network Rail. The Eastside Locks
project for Birmingham City University was completed earlier in the year with
the fit-out now under way. Planning consent has been secured for the 30,000
sqm St. George's House East project in Wimbledon.
Executive Architecture project wins include Project Apple, the 19ha
redevelopment in Surrey for biopharmaceutical giant UCB Celltech with the
Heatherwick Studio and No's 74 & 84 Moorgate for the City of London and
Osborne with Ben Adam Architects. Completions in London include the 21,000 sqm
Featherstone building for Derwent with architect Morris + Company and the
topping out of the 15,000 sqm n2 Nova Evolved workplace building for Landsec
with Lynch Architects.
In Germany completions include the IHK Business Welcome Center and the
refurbishment of the central areas of KaDeWe department store in Berlin, and
new wins include the fit-out planning of 14,000 sqm in the Am Tacheles
building for tenant Autodoc. In Frankfurt further refurbished floors of the
iconic MesseTurm have been completed for landlord Blackstone together with
fit-outs for international banking, legal and IT sector clients. In Turkey new
concept designs were won and completed for the 10,000 sqm Mercedes Benz Office
HQ, the 25,000 sqm Cengiz Altunizade Campus in Istanbul and their 4,000 sqm
Ankara HQ building.
Disposal
Shortly after the half year the Group concluded the disposal of its interest
in John R Harris to the local management team operating out of the Middle
East.
The disposal provided an initial inflow of cash consideration along with a
deferred consideration sum payable over 5 years, for a total £1.1m. The Group
has also entered into a Marketing Agreement, covering the use of the Group's
project portfolio and associated materials, over the deferred consideration
period for an additional sum in order to maintain the Group's interest in this
important market. The Group continues to operate in the Middle East but on a
much-reduced basis.
Prospects
The Group continues to focus on enhancing shareholder value. This, inter alia,
includes opportunities for further disposals and funding to support our new
growth strategy; consideration of a share consolidation to improve the share
register and allow many small investors to realise their investment on an
economic basis whilst significantly reducing the cost to the Group of
servicing a register with many hundreds of very small shareholdings; and,
following my retirement, the appointment of a successor CEO to lead the
business in the next phase of its operations.
Overall, we see the performance of the Group improving in the second half.
Nicholas Thompson
Chief Executive Officer
28 June 2022
Consolidated income statement
For the six months ended 31 March 2022
Note Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
Continuing Operations
Revenue 3 4,529 3,699 9,192
Sub consultant costs (1,152) (912) (2,887)
Revenue less sub consultant costs 3,377 2,787 6,305
Personnel related costs (2,921) (2,798) (5,594)
Property related costs (531) (534) (1,041)
Other operating expenses (240) (402) (695)
Other operating income 4 144 188 358
Operating loss (171) (759) (667)
Finance costs (46) (49) (94)
Loss after finance costs (217) (808) (761)
Impairment of intangibles - - -
Share of results of associate and joint ventures 65 71 166
Loss before tax 3 (152) (737) (595)
Tax credit 26 409 395
Loss from continuing operations (126) (328) (200)
Loss from discontinued operations 5 (261) (280) (936)
Loss for the period (387) (608) (1,136)
Loss attributable to:
Owners of Aukett Swanke Group Plc (387) (603) (1,123)
Non-controlling interests - (5) (13)
Loss for the period (387) (608) (1,136)
Basic and diluted earnings per share for loss attributable to the ordinary
equity holders of the Company:
From continuing operations (0.07p) (0.20p) (0.12p)
From discontinued operations (0.16p) (0.16p) (0.57p)
Total loss per share 6 (0.23p) (0.36p) (0.69p)
Consolidated statement of comprehensive income
For the six months ended 31 March 2022
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
Loss for the period (387) (608) (1,136)
Other comprehensive income:
Currency translation differences of foreign operations (42) (108) (107)
Currency translation differences on translation of discontinued operations (7) (55) (50)
Other comprehensive loss for the period (49) (163) (157)
Total comprehensive loss for the period (436) (771) (1,293)
Total comprehensive loss is attributable to:
Owners of Aukett Swanke Group Plc (436) (762) (1,280)
Non-controlling interests - (9) (13)
Total comprehensive loss for the period (436) (771) (1,293)
Total comprehensive loss attributable to the owners of Aukett Swanke Group Plc
arises from:
Continuing operations (168) (436) (307)
Discontinued operations (268) (326) (973)
(436) (762) (1,280)
Consolidated statement of financial position
At 31 March 2022
Note Unaudited Unaudited Audited
at 31 at 31 at 30
March March September
2022 2021 2021
£'000 £'000 £'000
Non current assets
Goodwill 1,753 2,349 2,370
Other intangible assets 217 593 324
Property, plant and equipment 74 205 155
Right-of-use assets 2,354 2,737 2,546
Investment in associate and joint ventures 802 779 796
Deferred tax 265 259 241
Total non current assets 5,465 6,922 6,432
Current assets
Trade and other receivables 2,605 4,303 3,876
Contract assets 599 911 982
Current tax - 362 99
Cash at bank and in hand 8 38 591 515
3,242 6,167 5,472
Assets in disposal groups classified as held for sale 1,868 - -
Total current assets 5,110 6,167 5,472
Total assets 10,575 13,089 11,904
Current liabilities
Trade and other payables (2,497) (4,249) (3,747)
Contract liabilities (802) (797) (829)
Borrowings 8 (289) (390) (83)
Lease liabilities (539) (539) (539)
(4,127) (5,975) (5,198)
Liabilities directly associated with assets in disposal groups classified as (1,006) - -
held for sale
Total current liabilities (5,133) (5,975) (5,198)
Non current liabilities
Borrowings 8 (292) - (417)
Lease liabilities (2,118) (2,578) (2,350)
Deferred tax (37) (44) (40)
Provisions (364) (889) (832)
Total non current liabilities (2,811) (3,511) (3,639)
Total liabilities (7,944) (9,486) (8,837)
Net assets 2,631 3,603 3,067
Capital and reserves
Share capital 1,652 1,652 1,652
Merger reserve 1,176 1,176 1,176
Foreign currency translation reserve (222) (175) (173)
Retained earnings (1,469) (562) (1.082)
Other distributable reserve 1,494 1,494 1,494
Total equity attributable to 2,631 3,585 3,067
equity holders of the Company
Non-controlling interests - 18 -
Total equity 2,631 3,603 3,067
Consolidated statement of cash flows
For the six months ended 31 March 2022
Note Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
Cash flows from operating activities
Cash expended by operations 7 (303) (659) (896)
Interest paid - - -
Income tax credits received / (paid) 99 (1) 262
Net cash outflow from operating activities (204) (660) (634)
Cash flows from investing activities
Purchase of property, plant and equipment (13) (2) (33)
Sale of property, plant and equipment - - 16
Purchase of investments - (100) (123)
Dividends received 46 472 528
Net cash received in investing activities 33 370 388
Net cash outflow before financing activities (171) (290) (246)
Cash flows from financing activities
Principal paid on lease liabilities (232) (226) (455)
Interest paid on lease liabilities (40) (48) (91)
Proceeds from bank loans - - 500
Repayment of bank loans - (97) (155)
Interest paid (6) (1) (3)
Net cash outflow from financing activities (278) (372) (204)
Net change in cash and cash equivalents (449) (662) (450)
Cash and cash equivalents at start of period 515 992 992
Currency translation differences (81) (71) (27)
Cash and cash equivalents at end of period 8 (15) 259 515
Cash and cash equivalents are comprised of:
Cash at bank and in hand 38 591 515
Cash held within assets classified as held for sale 28 - -
Secured bank overdrafts (81) (332) -
Cash and cash equivalents at end of year (15) 259 515
Consolidated statement of changes in equity
For the six months ended 31 March 2022
Share capital Foreign Retained Other Merger reserve Total Non controlling Total
currency earnings distributable interests equity
translation reserve
£'000 reserve £'000 £'000
£'000 £'000 £'000 £'000 £'000
At 1 October 2021 1,652 (173) (1,082) 1,494 1,176 3,067 - 3,067
Loss for the period - - (387) - - (387) - (387)
Other comprehensive income - (49) - - - (49) - (49)
Total comprehensive loss - (49) (387) - - (436) - (436)
At 31 March 2022 1,652 (222) (1,469) 1,494 1,176 2,631 - 2,631
For the six months ended 31 March 2021
Share capital Foreign Retained Other Merger reserve Total Non controlling Total
currency earnings distributable interests equity
translation reserve
£'000 reserve £'000 £'000
£'000 £'000 £'000 £'000 £'000
At 1 October 2020 1,652 (16) 41 1,494 1,176 4,347 27 4,374
Loss for the period - - (603) - - (603) (5) (608)
Other comprehensive income - (159) - - - (159) (4) (163)
Total comprehensive loss - (159) (603) - - (762) (9) (771)
At 31 March 2021 1,652 (175) (562) 1,494 1,176 3,585 18 3,603
Consolidated statement of changes in equity (continued)
For the year ended 30 September 2021
Share capital Foreign Retained Other Merger reserve Total Non controlling Total
currency earnings distributable interests equity
translation reserve
£'000 reserve £'000 £'000
£'000 £'000 £'000 £'000 £'000
At 1 October 2020 1,652 (16) 41 1,494 1,176 4,347 27 4,374
Loss for the period - - (1,123) - - (1,123) (13) (1,136)
Acquisition of minority interest - - - - - - (14) (14)
Other comprehensive income - (157) - - - (157) - (157)
Total comprehensive loss - (157) (1,123) - - (1,280) (27) (1,307)
At 30 September 2021 1,652 (173) (1,082) 1,494 1,176 3,067 - 3,067
Notes to the Interim Report
1 Basis of preparation
The financial information presented in this Interim Report has been prepared
in accordance with the recognition and measurement principles of international
accounting standards in conformity with the requirements of the Companies Act
2006 that are expected to be applicable to the financial statements for the
year ending 30 September 2022 and on the basis of the accounting policies
expected to be used in those financial statements.
2 New accounting standards, amendments and interpretations
applied
A number of new or amended standards and interpretations to existing standards
became applicable for the current reporting period. The Group did not have to
change its accounting policies or make retrospective adjustments as a result
of adopting these standards.
3 Operating segments
The Group comprises a single business segment and separately reportable
geographical segments (together with a Group costs segment). Geographical
segments are based on the location of the operation undertaking each
project. Turkey is included within Continental Europe together with Germany
and the Czech Republic (in the comparative periods). The Middle East segment
has been re-presented as a discontinued operation in note 5, and accordingly
is no longer included in this operating segments note.
Segment revenue Unaudited six months to 31 March 2022 Unaudited six months to 31 March 2021 Audited year to 30 September 2021
£'000 £'000 £'000
United Kingdom 4,435 3,441 8,871
Continental Europe 94 258 321
Total 4,529 3,699 9,192
Segment revenue less sub consultant costs Unaudited six months to 31 March 2022 Unaudited six months to 31 March 2021 Audited year to 30 September 2021
£'000 £'000 £'000
United Kingdom 3,305 2,591 6,063
Continental Europe 72 196 242
Total 3,377 2,787 6,305
Segment result before tax Unaudited six months to 31 March 2022 Unaudited six months to 31 March 2021 Audited year to 30 September 2021
£'000 £'000 £'000
United Kingdom (230) (837) (848)
Continental Europe 49 121 149
Group costs 29 (21) 104
Total (loss)/profit (152) (737) (595)
Segment result before tax Unaudited six months to 31 March 2022 Unaudited six months to 31 March 2021 Audited year to 30 September 2021
(before reallocation of group management charges) £'000 £'000 £'000
United Kingdom 40 (567) (308)
Continental Europe 123 227 330
Group costs (419) (598) (1,015)
Total (loss)/profit (256) (938) (993)
Group management charges charged to the 104 201 398
Middle East discontinued operation
Total (loss)/profit (152) 737 (595)
4 Other operating income
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
Property rental income 74 79 153
Management charges to associate and joint ventures 63 65 132
Government grants (UK furlough scheme) - 42 59
Licence fee income 7 2 -
Other sundry income - - 14
Total other operating income 144 188 358
5 Discontinued operations
5 (a) Description
In April 2022, the Group sold assets, as part of the Group's disposal of its
John R Harris & Partners Limited (Cyprus) subsidiary and John R Harris
& Partners (Dubai) entity. This marked the sale of the main trading
operations in the Group's Middle East segment. With closure costs incurred in
the period relating to the planned termination of a number of trading licenses
in the Middle East operations, the Middle East segment is presented as a
discontinued operation in the current period, and the comparative periods
represented accordingly.
5 (b) Financial performance and cash flow information
Result of discontinued operations
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
Revenue 1,249 1,581 2,822
Sub consultant costs (189) (229) (305)
Revenue less sub consultant costs 1,060 1,352 2,517
Expenses (1,217) (1,431) (2,806)
Group management charges (104) (201) (398)
Impairment of intangibles - - (249)
Loss before tax (261) (280) (936)
Tax credit / (charge) - - -
Loss from discontinued operations (261) (280) (936)
Exchange differences on translation of discontinued operation (7) (55) (50)
Other comprehensive loss from discontinued operations (268) (335) (986)
Earnings per share from discontinued operations
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
Basic and diluted loss per share (0.16p) (0.16p) (0.57p)
Statement of cash flows
The statement of cash flows includes the following amounts relating to
discontinued operations:
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
Net cash outflow from operating activities (174) (241) (485)
Net cash outflow from investing activities - (3) (2)
Foreign exchange movements 2 (43) (39)
Net cash from discontinued operations (172) (287) (526)
6 Earnings per share
The calculations of basic and diluted earnings per share are based on the
following data:
Earnings Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
Continuing operations (126) (328) (200)
Discontinued operations (261) (275) (923)
Loss for the period (387) (603) (1,123)
Number of shares Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
'000 '000 '000
Weighted average number of shares 165,214 165,214 165,214
Effect of dilutive options - - -
Diluted weighted average number of shares 165,214 165,214 165,214
7 Reconciliation of profit before tax to net cash from
operations
Unaudited Unaudited Audited
six months six months year to
to 31 March to 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
Loss for the period (387) (608) (1,136)
Tax credit (26) (409) (395)
Finance costs 46 49 94
Share of results of associate and joint ventures (65) (71) (166)
Intangible amortisation 19 32 59
Intangible impairment - - 249
Depreciation 56 63 129
Amortisation of right-of-use assets 192 192 383
Profit on disposal of property, plant and equipment - (1) (2)
Decrease / (increase) in trade and other receivables 565 (976) (843)
(Decrease) / increase in trade and other payables (635) 1,207 892
Change in provisions (68) (52) (160)
Unrealised foreign exchange differences - (85) -
Net cash expended by operations (303) (659) (896)
8 Analysis of net funds
Unaudited at 31 March Unaudited at 31 March Audited at
2022 2021 30 September
£'000 £'000 2021
£'000
Cash at bank and in hand 38 591 515
Cash held within assets classified as held for sale 28 - -
Secured bank overdrafts (81) (332) -
Cash and cash equivalents (15) 259 515
Secured bank loan (500) (58) (500)
Net (debt)/funds (515) 201 15
9 Events occurring after the reporting period
On 28 April 2022 Aukett Swanke Group Plc disposed of its 100% interest in the
share capital of John R Harris & Partners Limited (registered in Cyprus),
the beneficial owner of John R Harris & Partners (Dubai) for a cash
consideration of AED 5,000,000, comprising AED 4,250,000 cash upfront and a
further AED 750,000 deferred consideration paid over a 5 year period.
The assets and liabilities directly associated with both John R Harris &
Partners Limited and John R Harris & Partners (Dubai) have been classified
as held for sale for the reporting period ended 31 March 2022
The operating results of these entities have been included within discontinued
operations for the 6 month period to 31 March 2022, and re-presented
accordingly for comparative periods.
10 Status of Interim Report
The Interim Report covers the six months ended 31 March 2022 and was approved
by the Board of Directors on 28 June 2022. The Interim Report is unaudited.
The interim condensed set of consolidated financial statements in the Interim
Report are not statutory accounts as defined by Section 434 of the Companies
Act 2006.
Comparative figures for the year ended 30 September 2021 have been extracted
from the statutory accounts of the Group for that period.
The statutory accounts for the year ended 30 September 2021 have been reported
on by the Group's auditors and delivered to the Registrar of Companies. The
audit report thereon was unqualified, did not include references to matters to
which the auditors drew attention by way of emphasis without qualifying the
report, and did not contain a statement under Section 498 of the Companies Act
2006. The audit report did draw attention to the Directors' assessment of
going concern, indicating that a material uncertainty exists that may cast
significant doubt on the Group's and parent company's ability to continue as a
going concern. The audit report was not modified in respect of this matter.
11 Further information
An electronic version of the Interim Report will be available on the Group's
website (www.aukettswankeplc.com).
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