REG - Cohort PLC - Half-year Report <Origin Href="QuoteRef">CHRT.L</Origin> - Part 2
12/12/2016 07:06
- Part 2: For the preceding part double click ID:nRSL5123Ra
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Export defence customers 10.6 22 10.2 21 19.8 17
Defence and security revenue 44.5 89 44.0 89 103.0 91
Transport 2.3 1.7 3.5
Offshore energy 1.2 2.2 3.0
Other commercial 2.0 1.8 3.1
Non-defence revenue 5.5 11 5.7 11 9.6 9
Total revenue 50.0 100 49.7 100 112.6 100
By capability
Defence products 26.3 53 17.6 35 47.0 42
Operational support 4.5 9 5.7 12 11.3 10
Training 4.3 9 5.5 11 12.0 11
Secure networks 4.2 8 3.8 8 10.7 9
Provision of specialist expertise 3.8 8 6.7 13 8.9 8
Application software 3.7 7 2.9 6 7.9 7
Studies and analysis 2.6 5 4.5 9 6.1 5
Applied research 0.6 1 3.0 6 8.7 8
Total revenue 50.0 100 49.7 100 112.6 100
3. Income tax (credit)/expense
The income tax (credit)/expense comprises:
Six monthsended31 October2016Unaudited£'000 Six monthsended31 October2015Unaudited£'000 Yearended30 April2016Audited£'000
Current tax: in respect of this period 407 681 1,935
Current tax: in respect of prior periods - (40) (368)
407 641 1,567
Deferred taxation: in respect of this period (993) (626) (1,621)
(586) 15 (54)
The income tax expense for the six months ended 31 October 2016 is based upon
the anticipated charge for the full year ending 30 April 2017.
4. Earnings per share
The earnings per share are calculated as follows:
Six monthsended31 October2016Unaudited£'000 Six monthsended31 October2015Unaudited£'000 Yearended30 April2016Audited£'000
Earnings
Basic and diluted (loss)/earnings (1,810) 1,126 7,775
Credit on marking forward exchange contracts to market at period end (net of income tax) (130) - (6)
Exceptional items (net of income tax):
Reorganisation of SCS (net of income tax) 1,840 - -
Cost on acquisition of EID 79 181 821
Foreign exchange gain on marking cash held (in Euros) for the acquisition of EID to market value at period end (net of income tax) (12) - (429)
Group's share of amortisation of intangible assets (net of income tax) 2,443 1,581 2,879
Adjusted basic and diluted earnings 2,410 2,888 11,040
Number Number Number
Weighted average number of shares
For the purposes of basic earnings per share 40,260,946 40,659,768 40,622,496
Share options 601,956 878,989 767,501
For the purposes of diluted earnings per share 40,862,902 41,538,757 41,389,997
The weighted average number of ordinary shares for the six months ended 31
October 2016 excludes 504,844 ordinary shares held by the Cohort plc Employee
Benefit Trust (which do not receive a dividend) for the purposes of
calculating earnings per share (six months ended 31 October 2015: 118,311;
year ended 30 April 2016: 755,743).
Six monthsended31 October2016Unauditedpence Six monthsended31 October2015Unauditedpence Yearended30 April2016Auditedpence
(Loss)/earnings per share
Basic (4.50) 2.77 19.14
Diluted (4.50) 2.71 18.78
Adjusted earnings per share
Basic 5.99 7.11 27.18
Diluted 5.90 6.95 26.67
5. Dividends
Six monthsended31 October2016Unauditedpence Six monthsended31 October2015Unauditedpence Yearended30 April2016Auditedpence
Dividends per share proposed in respect of the period
Interim 2.20 1.90 1.90
Final - - 4.10
The interim dividend for the six months ended 31 October 2016 is 2.20 pence
(six months ended 31 October 2015: 1.90 pence) per ordinary share. This
dividend will be payable on 1 March 2017 to shareholders on the register at 3
February 2017.
The final dividend charged to the income statement for the year ended 30 April
2016 was 5.30 pence per ordinary share comprising 1.90 pence of interim
dividend for the six months ended 31 October 2015 and 3.40 pence of final
dividend for the year ended 30 April 2015.
6. Net cash (used in)/generated from operating activities
Six monthsended31 October 2016Unaudited£'000 Six monthsended31 October2015Unaudited£'000 Yearended30 April2016Audited£'000
(Loss)/profit for the period (2,662) 70 5,364
Adjustments for:
Tax (credit)/expense (586) 15 (54)
Depreciation of property, plant and equipment 627 539 1,090
Amortisation of intangible assets 5,012 3,246 6,379
Net finance costs/(income) 7 (36) (64)
Share-based payment 100 100 197
Derivative financial instruments and foreign exchange movements (178) - (7)
Decrease in provisions (292) (41) (59)
Operating cash flow before movements in working capital 2,028 3,893 12,846
(Increase)/decrease in inventories (2,356) 396 (958)
Decrease/(increase) in receivables 2,910 (7,629) (8,585)
(Decrease)/increase in payables (5,652) (1,534) 5,203
(5,098) (8,767) (4,340)
Cash (used in)/generated from operations (3,070) (4,874) 8,506
Tax paid (1,200) (745) (1,784)
Interest paid (44) (2) (4)
Net cash (used in)/generated from operating activities (4,314) (5,621) 6,718
7. Acquisition of Empresa de Investigação e Desenvolvimento de Electrónica
S.A. (EID)
As announced on 28 June 2016, Cohort plc acquired 56.89% of EID for a total
consideration of £8.9m (E10.3m). The Group has recognised 100% of EID's result
and net assets from that date as it has effective control.
The acquisition accounting is as follows:
Book valued£'000 Fair valued£'000
Recognised amounts of identifiable assets acquired and liabilities assumed:
Property, plant and equipment 295 295
Other intangible assets - 10,247
Inventory 1,874 1,874
Trade and other receivables 6,120 6,520
Trade and other payables (7,822) (8,489)
Deferred tax 92 (2,149)
Net cash 3,708 3,708
4,267 12,006
56.89% acquired 6,830
Goodwill 2,114
Total consideration 8,944
Satisfied by:
Cash 8,497
Deferred consideration (paid 23 November 2016) 447
Total consideration transferred 8,944
Net cash outflow arising on acquisition:
Cash consideration paid in the period ended 31 October 2016 7,753
Cash consideration paid in the year ended 30 April 2016 744
Less: cash and cash equivalents acquired (3,708)
4,789
Actual cash outflow for the six months ended 31 October 2016 was £4,045,000.
The exchange rate used on the acquisition of EID in respect of net assets,
goodwill and consideration was £1:E1.2073.
Other intangible assets of £10.2m and their estimated useful lives are
analysed as follows:
Other intangible assets£'000 Estimated lifeYears
Contracts acquired 10,247 9
A deferred tax liability of £2.3m in respect of the other intangible assets
balance above was established and is disclosed as part of the fair value
deferred tax liability.
The goodwill of £2.1m arising from the acquisition represents the customer
contacts, supplier relationships and know-how to which no certain value can be
ascribed. None of the goodwill is expected to be deductible for income tax
purposes.
The acquisition costs of £0.9m in respect of EID were charged as an
exceptional item of £0.8m in the income statement for the year ended 30 April
2016 and £0.1m for the six months ended 31 October 2016.
EID contributed £4.6m of revenue and £1.4m of adjusted operating profit for
the period from 28 June 2016 to 31 October 2016.
Cohort plc has agreed with the Portuguese Government, the holder of 43.09% of
EID to acquire a further 23.09% on the same terms as the original sale and
purchase agreement, leaving the Group with 79.98% of EID. On completion of the
second part of the acquisition of EID, we will enter into a shareholders'
agreement giving the Portuguese Government certain rights, typical of a
minority shareholder.
8. Acquisition of Marlborough Communications Ltd (MCL)
The Group acquired 50% plus one share of Marlborough Communications Ltd (MCL)
on 9 July 2014.
The Group has recognised 100% of MCL's results and net assets as it has
effective control.
In accordance with IFRS 3, the Group has ascribed a value to the option to
acquire the non-controlling interest of MCL. This value has been estimated at
£5.5m and the option is shown as a current liability and as the
non-controlling interest has a right to dividends, in the other reserves as
"option for acquiring the non-controlling interest in MCL".
The Group has agreed with the holders of the non-controlling interest of MCL
to acquire their interest (49.999%), taking the Group holding in MCL to 100%.
This agreement is in line with the original sale and purchase agreement and
the estimated cost of acquiring this non-controlling interest is £5.5m,
unchanged from 30 April 2016 (31 October 2015: £6.0m due greater than one
year). In addition, and as set out in the original sale and purchase
agreement, the non-controlling interest will receive its share of the cash
held in MCL as at 30 April 2017 which is in excess of MCL's operational
requirements.
Independent review report to Cohort plc
for the six months ended 31 October 2016
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly report for the six months ended 31 October 2016
which comprises the Consolidated income statement, the Consolidated statement
of comprehensive income, the Consolidated statement of financial position, the
Consolidated statement of changes in equity, the Consolidated cash flow
statement and the related explanatory notes. We have read the other
information contained in the half-yearly report and considered whether it
contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our
engagement. Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work,
for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the
Directors. The Directors are responsible for preparing the half-yearly report
in accordance with the AIM Rules.
The annual financial statements of the Group are prepared in accordance with
IFRSs as adopted by the EU. The condensed set of financial statements included
in this half-yearly report has been prepared in accordance with the
recognition and measurement requirements of IFRSs as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently
does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
report for the six months ended 31 October 2016 is not prepared, in all
material respects, in accordance with the recognition and measurement
requirements of IFRSs as adopted by the EU and the AIM Rules.
Andrew Campbell-Orde for and on behalf of KPMG LLP Chartered Accountants
Arlington Business Park
Theale
Reading RG7 4SD
12 December 2016
Shareholder information, financial calendar and advisers
Advisers
Nominated adviser and broker
Investec
2 Gresham Street
London EC2V 7QP
Auditor
KPMG LLP
Chartered Accountants
Arlington Business Park
Theale
Reading RG7 4SD
Tax advisers
Deloitte LLP
Abbots House
Abbey Street
Reading RG1 3BD
Legal advisers
Shoosmiths LLP
Apex Plaza
Forbury Road
Reading RG1 1SH
Registrars
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Public and investor relations
MHP Communications
6 Agar Street
London WC2N 4HN
Bankers
Barclays
Level 27, 1 Churchill Place
London E14 5HP
Lloyds Bank
The Atrium
Davidson House
Forbury Square
Reading RG1 3EU
RBS
Abbey Gardens
4 Abbey Street
Reading RG1 3BA
Shareholders' enquiries
If you have an enquiry about the Company's business, or about something
affecting you as a shareholder (other than queries which are dealt with by the
registrars), you should contact the Company Secretary by letter to the
Company's registered office or by email at info@cohortplc.com.
Share register
Capita Asset Services maintains the register of members of the Company.
If you have any questions about your personal holding of the Company's shares,
please contact:
Capita Asset Services
Shareholder Solutions
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Telephone: 0871 664 0300 (calls are charged at standard geographic rate and
will vary by provider). (From outside the UK: +44 371 664 0300, calls will be
charged at the applicable international rate.) Lines are open 9.00am to
5.30pm, Monday to Friday, excluding public holidays in England and Wales.
Email: shareholderenquiries@capita.co.uk
If you change your name or address or if details on the envelope enclosing
this report, including your postcode, are incorrect or incomplete, please
notify the registrars in writing.
Daily share price listings
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• London Evening Standard - AIM section
Financial calendar
Annual General Meeting
7 September 2017
Final dividend payable
September 2017
Expected announcements of results for the year ending 30 April 2017
Preliminary full-year announcement
June 2017
Half-year announcement
December 2017
Registered office
Cohort plc
2 Waterside Drive
Arlington Business Park
Theale
Reading RG7 4SW
Registered company number of Cohort plc
05684823
Cohort plc is a company registered
in England and Wales.
This information is provided by RNS
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