REG - Cohort PLC - Final Results <Origin Href="QuoteRef">CHRT.L</Origin> - Part 3
29/06/2017 07:05
- Part 3: For the preceding part double click ID:nRSc4994Jb
- - 583 - - - 583 - 583
Loss on own shares sold - - 1,119 - - (1,119) - - -
Share-based payments - - - 221 - - 221 - 221
Deferred tax adjustment in respect of share based payments - - - (336) - - (336) - (336)
Transfer of share option reserve on vesting of options - - - (169) - 169 - - -
Non-controlling interest introduced on acquisition of EID - - - - - - - 5,115 5,115
Effect of acquisition of non-controlling interest in MCL - - - - 5,035 (2,075) 2,960 (5,011) (2,051)
At 30 April 2017 4,096 29,657 (1,142) 783 (465) 36,901 69,830 4,158 73,988
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 April 2017
Notes Year ended30 April 2017£000 Year ended 30 April 2016£000
Net cash generated from operating activities 6 659 6,718
Investing activities
Interest received 47 68
Purchases of property, plant and equipment (875) (980)
Acquisition of EID, net of cash acquired 8 (4,045) (744)
Acquisition of MCL 7 (5,080) -
Net cash used in investing activities (9,953) (1,656)
Financing activities
Dividends paid (2,544) (2,158)
Repayment of borrowings (3) (3)
Drawdown of borrowings - 3,302
Purchase of own shares (109) (4,162)
Sale of own shares 583 914
Net cash out flow from financing activities (2,073) (2,107)
Net (decrease)/increase in cash and cash equivalents (11,367) 2,955
At 1 May 2016 £000 Acquired £000 Effect of foreign exchange rate changes £000 Cash Flow £000 At 30 April 2017 £000
Funds reconciliation
Cash and bank 23,109 - 275 (11,367) 12,017
Short term deposits - - - - -
Cash and cash equivalents 23,109 - 275 (11,367) 12,017
Loan (3,293) - (243) - (3,536)
Finance lease (11) (1) - 3 (9)
Debt (3,304) (1) (243) 3 (3,545)
Net funds 19,805 (1) 32 (11,364) 8,472
NOTES TO THE PRELIMINARY RESULTS ANNOUNCEMENT
1. BASIS OF PREPARATION
The financial information contained within this preliminary report has been
prepared using accounting policies consistent with International Financial
Reporting Standards (IFRS) as adopted by the EU and applying at
30 April 2017. The information in this preliminary statement has been
extracted from the financial statements for the year ended 30 April 2017 and
as such, does not contain all the information required to be disclosed in the
financial statements prepared in accordance with IFRS.
The non-controlling interest (49.999%) of MCL was acquired 31 January 2017.
As the Group had effective control from the original acquisition date, 9 July
2014, 100% of MCL's result and balances have been consolidated from that date
with the non-controlling interest identified up to 31 January 2017.
57% of EID was acquired 27 June 2016 and as the Group has effective control,
100% of EID's result and balances has been consolidated from that date with
the non-controlling interest identified.
The Group's Annual Report for the year ended 30 April 2017 has yet to be
delivered to the Registrar of Companies. The auditors have reported on these
accounts. Their report was not qualified and did not contain a statement
under Section 498 of the Companies Act 2006. The figures for the year ended 30
April 2017 and 2016 do not constitute statutory accounts within the meaning of
section 434 of the Companies Act 2006.
The comparative figures for the financial year ended 30 April 2016 are not the
Company's statutory accounts for that financial year. Those accounts have
been reported on by the Company's auditor and delivered to the Registrar of
Companies. The report of the auditor was:
i. unqualified,
ii. did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying their report, and
iii. did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
The preliminary announcement was approved by the Board and authorised for
issue on 29 June 2017.
Copies of the Annual Report and accounts for the year ended 30 April 2017 will
be posted to shareholders on 28 July 2017 and available on the Company's
website (www.cohortplc.com) from that date.
2. SEGMENTAL ANALYSIS OF REVENUE AND OPERATING PROFIT
Year ended 30 April 2017 £000 Year ended 30 April 2016 £000
Revenue
EID 16,023 -
MASS 32,476 31,998
MCL 14,761 13,709
SCS 5,001 18,097
SEA 44,390 48,773
112,651 112,577
Adjusted Operating Profit
EID 4,234 -
MASS 5,908 5,956
MCL 2,053 1,404
SCS (455) 1,250
SEA 5,294 5,442
Central costs (2,545) (2,150)
14,489 11,902
Amortisation of other intangible assets (11,259) (6,379)
Credit on marking forward exchange contracts to market value at the year end 171 7
Exchange gains on revaluing cash held for acquisition consideration for EID 259 537
Exceptional items:
Costs of acquisition of EID (80) (821)
Costs of acquisition of MCL (47) -
Reorganisation of SCS (2,570) -
Operating Profit 963 5,246
The above segmental analysis is the primary segmental analysis of the Group.
All revenue and adjusted operating profit is in respect of continuing
operations.
The operating profit as reported under IFRS is reconciled to the adjusted
operating profit as reported above by the exclusion of amortisation of other
intangible assets, change on marking forward exchange contracts to market
value at the year end, the exchange gain on revaluing cash held (in Euros) for
the acquisition consideration for EID and exceptional items.
The adjusted operating profit is presented in addition to the operating profit
to provide the trading performance of the Group, as derived from its
constituent elements on a consistent basis from year to year.
The adjusted operating profit is stated after charging £221,000 in respect of
share-based payments (2016: £197,000).
The SCS business was reorganised with effect from 1 November 2016 with the
closure of its support functions and the transfer of its operating divisions
to MASS and SEA. The revenue and adjusted operating profit of SCS is reported
within MASS and SEA from 1 November 2016 onwards.
3. TAX (CREDIT)/CHARGE
Year ended30 April 2017£000 Year ended 30 April 2016£000
UK Corporation tax:
Current year 1,466 1,935
Prior year (845) (368)
Portugal corporation tax; current year 965 -
Other foreign corporation tax; current year 13 -
1,599 1,567
Deferred taxation:
Prior year 55 -
Current year (2,798) (1,621)
(2,743) (1,621)
(1,144) (54)
The current year corporation tax charge (2016: charge) includes a credit of
£512,000 (2016: £nil) in respect of exceptional items and the current year
deferred tax credit includes a credit of £2,402,000 (2016: credit of
£1,505,000) in respect of the amortisation of other intangible assets and a
charge of £86,000 (2016: £109,000) in respect of marking forward exchange
contracts to market value at the year end and revaluing the cash held (in
Euros) for the purchase of EID at acquisition date (2016: year end).
4. EARNINGS PER SHARE
The earnings per share are calculated by dividing the earnings for the year by
the weighted average number of ordinary shares in issue as follows:
Year ended30 April 2017£000 Year ended 30 April 2016£000
Earnings
Basic and diluted earnings 3,672 7,775
Amortisation of other intangible assets (net of tax of £1,550,000; 2016: £904,000) 5,773 2,879
Credit on non-trading foreign exchange movements (net of tax charge of £86,000 (2016: charge of £109,000) (344) (435)
Costs of acquisition of EID (nil tax) 80 821
Costs of acquisition of MCL (nil tax) 47 -
Reorganisation of SCS (net of tax credit of £512,000) 2,058 -
Adjusted basic and diluted earnings 11,286 11,040
The adjustments for the amortisation of intangible assets in respect of EID
and MCL and the credit on marking forward exchange contracts to market for the
year ended 30 April 2017 and the year ended 30 April 2016 reflect the
interests of the equity holders of the parent only and exclude the proportion
allocated to the non-controlling interest.
Number Number
Weighted average number of shares
For the purposes of basic earnings per share 40,400,179 40,622,496
Share options 553,515 767,501
For the purposes of diluted earnings per share 40,953,694 41,389,997
Year ended30 April 2017Pence Year ended30 April 2016Pence
Earnings per share
Basic 9.09 19.14
Diluted 8.97 18.78
Adjusted earnings per share
Basic 27.93 27.18
Diluted 27.56 26.67
5. DIVIDENDS
The proposed final dividend for the year ended 30 April 2017 is 4.9 pence
(2016: 4.1 pence) per ordinary share. This dividend will be payable on 13
September 2017 to shareholders on the register at 18 August 2017 subject to
approval by shareholders at the AGM on 7 September 2017.
The total paid and proposed dividend for the year ended 30 April 2017 is 7.1
pence per ordinary share; a cost of £2,914,000 (2016: 6.0 pence per ordinary
share; cost of £2,423,000).
The charge for the year ended 30 April 2017 of £2,544,000 is the final
dividend for the year ended 30 April 2016 paid (£1,652,000) and the interim
dividend for the year ended 30 April 2017 paid (£892,000).
6. NET CASH GENERATED FROM OPERATING ACTIVITIES
Year ended30 April 2017£000 Year ended 30 April 2016£000
Profit for the year 2,108 5,364
Adjustments for:
Tax credit (1,144) (54)
Depreciation of property, plant and equipment 1,207 1,090
Amortisation of goodwill and other intangible assets 11,259 6,379
Net finance income (1) (64)
Share-based payment 221 197
Derivative financial instruments and other non-trading exchange movements (430) (7)
Increase/(decrease) in provisions 297 (59)
Operating cash inflows before movements in working capital 13,517 12,846
Increase in inventories (1,386) (958)
Increase in receivables (3,002) (8,585)
(Decrease)/increase in payables (5,815) 5,203
(10,203) (4,340)
Cash generated by operations 3,314 8,506
Tax paid (2,609) (1,784)
Interest paid (46) (4)
Net cash generated from operating activities 659 6,718
7. ACQUISITION OF THE NON-CONTROLLING INTEREST OF MARLBOROUGH
COMMUNICATIONS LIMITED (MCL)
On 31 January 2017, Cohort plc acquired the entire non-controlling interest of
Marlborough Communications (Holdings) Limited (49.999%), which in turns owns
100% of Marlborough Communications Limited (MCL), for £5,080,000.
This was in accordance with the original sale and purchase agreement (SPA) of
9 July 2014.
In addition, and in accordance with the SPA, Cohort plc is expected to pay
£465,000 earn out in respect of MCL's closing order book at 30 April 2017.
The non-controlling interest is also entitled under the SPA to its share of
the surplus cash in MCL at 30 April 2017, estimated at £1,961,000.
These additional amounts (estimated at £2,426,000) are expected to be paid on
or before 31 July 2017.
In acquiring the non-controlling interest of MCL, £5,011,000 was eliminated
from non-controlling interests and a charge to equity of £2,075,000 made.
This was funded by £5,080,000 cash payment, £1,961,000 creditor in respect of
surplus cash payable to the non-controlling interest and £45,000 additional
creditor in respect of the order book based earn out, the latter now being a
total of £465,000 at 30 April 2017.
MCL contributed £2.1m of adjusted operating profit on £14.8m of revenue for
the year ended 30 April 2017, of which £1.4m and £5.0m respectively was for
the period from 1 February 2017 to 30 April 2017.
8. ACQUISITION OF Empresa de Investigação e Desenvolvimento de
Electrónica, S.A. (EID)
As mentioned last year, the Group acquired 56.89% of EID on 27 June 2016 for a
consideration of £8.9m (E10.3m).
The Group acquired a further 0.02% in the period up to 30 April 2017 under the
same terms as the sale and purchase agreement signed 5 August 2015.
As at 30 April 2017 the Group held 56.91% of EID and has agreement with the
Portuguese Government (the holder of the remaining 43.09% of EID) to acquire a
further 23.09% to take the Group's holding to 80%.
As the Group has effective control, the Group recognised 100% of EID's result
and net assets from 27 June 2016.
The acquisition of EID is summarised as follows:
Fair value£000
Fixed assets acquired 295
Other intangible assets 10,247
Net current liabilities (237)
Deferred tax (2,149)
Net cash 3,708
11,864
56.89% acquired 6,749
Goodwill 2,195
8,944
Funded by cash of 8,944
The net cash outflow of £4,789,000 is cash consideration paid of £8,944,000
less net cash acquired (£3,708,000).
The other intangible asset arising on acquisition is in respect of contracts
(the EID order book) acquired and will be amortised over nine years.
EID contributed £4.2m of adjusted operating profit on £16.0m of revenue for
the period from 28 June 2016 to 30 April 2017.
This information is provided by RNS
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