REG - Esken Limited - Half-year Report
29/11/2023 07:00
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RNS Number : 9761U Esken Limited 29 November 2023
Prior to publication the information communicated in this announcement was
deemed by the Company to constitute inside information for the purposes of
article 7 of the Market Abuse Regulations (EU) No 596/2014 as amended by
regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations No
2019/310 ('MAR'). With the publication of this announcement, this information
is now considered to be in the public domain.
29 November 2023
Esken Limited
("Esken" or the "Group")
Results for the six months ended 31 August 2023
Esken Limited, the aviation and renewables group, today announces its
unaudited interim results for the six months ended 31 August 2023.
David Shearer, Executive Chairman of Esken, said
"The Board is pleased that shareholders have approved the disposal of Esken
Renewables and this transaction is expected to complete on or around 1
December 2023. The sale will generate net proceeds of £78.5m after costs,
which will be used to repay the term loan that was secured against certain
Group assets, provide funding for a wind up of the legacy pension scheme and
generate some additional liquidity in the short term. The disposal, in line
with the results of the strategic review, has been completed despite a
challenging market backdrop and will lead to a significant reduction in Group
indebtedness at a time of high interest rates as well as removing a number of
guarantees given on long-term contracts.
Following the disposal, the main operating business will be the Aviation
division, primarily London Southend Airport (LSA). The airport has benefitted
during the summer season from the industry's strong passenger demand, which
has seen the other London airports return to pre-pandemic passenger levels
with the associated capacity constraints. The partnership with easyJet has
seen the schedule grow from three to eight destinations, with increasing
frequency and strong load factors being experienced, resulting in a 17.8%
increase in passengers on the same period last year. This has encouraged
easyJet to add additional routes with Alicante, Amsterdam, Geneva, Paris and
most recently Grenoble to operate through the winter this year. Against this
positive backdrop, discussions continue on an expanded summer schedule for
2024 with a number of airlines who recognise the growing capacity constraints
at other London airports and the strong offering from LSA in terms of
operating cost and passenger experience.
The Board believes it now has a base from which to progress the process to
seek a new owner for LSA, with a view to crystallising shareholder value
through securing the right long-term partner, who both recognises the inherent
strategic opportunity and is best placed to support future growth. The Board
recognises that this process may take time to get the right deal and, as
disclosed in the recent circular, are taking steps to further secure the
Group's financial position to support the airport so that the Group can
execute a sale of LSA without undue balance sheet pressure. As part of this
work, the Board has received a term sheet and has entered into negotiations
with a large majority holder of the exchangeable bond, which currently matures
in May 2024, with a view to agreeing terms and an extension on the maturity to
December 2025, along with removing the cash drag from interest payments at
2.75%, to be replaced with 10% PIK payable on redemption. These steps are
being taken to ensure that the maturity profile of the Group funding matches
and supports the sale process, allowing it to be conducted in an orderly
manner to maximise the value realised for shareholders.
As disclosed on 26 September 2023, Esken received notification that documents
filed by Carlyle Global Infrastructure Opportunity Fund (CGI) in the High
Court had been served on LSA claiming certain technical breaches by LSA with
respect to the Convertible Debt Facility. LSA does not agree with CGI's
claimed interpretation and intends to defend the action vigorously. Meanwhile,
Esken intends to continue with its sale process, as a successful sale and
application of the proceeds to redeem the Convertible Debt Facility would in
any case resolve the matter.
Since the period end, Esken has entered into non-binding heads of agreement
for the sale of two of the non-core assets for a cash consideration of £8.5m.
In addition, discussions are underway on the remaining non-core assets at
Widnes and Carlisle Lake District Airport, with a view to completing
transactions to dispose of these assets before the end of our financial year.
These transactions will not only generate cash to improve the Groups liquidity
profile and support the wind down of the Group services, but also remove
long-term lease liabilities from the balance sheet and allow a focus to be on
the growth and sale of LSA. It is the intention of the Board that once these
transactions have been completed the residual value will be returned to
shareholders."
Financial highlights during the period
· Group Adjusted EBITDA improved by 14.5% to a loss of £3.5m
(2022: £4.1m). Note that Renewables is now presented within discontinued
operations and that the comparator period is consequently restated.
· The aviation business reported an Adjusted EBITDA loss of £2.8m
(2022: £0.5m). Passenger numbers improved by 17.8% to 71,557 (2022: 60,734)
reflecting continued easyJet operations, following increased flight frequency
and increased destinations. The prior period benefitted from a logistics
contract which has terminated and one-off items.
· Star Handling Limited was sold for £3.9m, generating a £1.6m
profit on disposal, with a further contingent consideration of up to £1.0m
dependent upon revenue performance over the 12 months post sale.
· Propius handed back three aircraft in the period, leaving one
aircraft still to return along with the overhaul of one landing gear set still
outstanding. The maintenance reserve provision remains sufficient to settle
all outstanding obligations and will be fully utilised in the second half of
the year.
· The Group disposed of its investment in Mersey Bioenergy (MBE)
for proceeds of £9.0m, generating a profit on disposal of £1.7m, following a
write back of impairment of £7.3m at 28 February 2023.
· The Group has recalculated the amortised cost of the convertible
debt liability leading to a one-off non-cash adjustment of £29.4m through
finance costs in the profit or loss, driven by a change in estimated repayment
date resulting from the decision to sell LSA.
· An impairment of £5.3m has been recognised on the non-core asset
at Pollington, having accepted a non-binding proposal to dispose of the asset
for £3.5m.
· The Group's cash at the period end was £26.9m (Feb 2023:
£50.3m), which includes £3.0m (Feb 2023: £5.3m) of ring-fenced cash in LSA
and £6.9m in Renewables, presented as held for sale.
· Renewables contributed £5.0m (2022: £7.0m) of EBITDA now
presented within discontinued operations. Performance was impacted by
increased plant outages, lower gate fee rates and impacts of one-off
settlements that have been agreed with specific plants in relation to
contractual negotiations done in parallel with discussions to seek change of
control consents in relation to the disposal process.
Financial highlights post period end
· Post period end, the Group agreed the disposal of Renewables for
net proceeds of £78.5m. Completion is expected on or around 1 December 2023.
· On completion, the Group will repay its term loan of c.£71m
(including costs), removing security over the remaining non-core assets.
· Following completion, the Group will make a one-off contribution
of c.£3.6m into escrow for the benefit of the Ansa Logistics Pension Plan.
This payment is expected to be sufficient to take the scheme through buy-in,
buy-out and wind up removing any further liability for the Group.
· Residual cash from the disposal of Renewables will provide
working capital in the short term for the continuing Group.
· As previously disclosed, the Group has initiated discussions in
relation to a £20m funding facility from Esken's larger shareholders into
Esken Aviation, as holding company of LSA, of which an initial £5m has been
committed plus indicative commitments for a further £7m. These discussions
will be progressed following the settlement of the existing debt facilities
when the Renewables transaction completes.
Strategic review and outlook
Following the disposal of Esken Renewables, the continuing Group will comprise
of Esken Aviation, principally LSA, and non-core operating divisions.
The strategy of the continuing Group will be to:
· provide support for the ongoing recovery of passenger growth at
LSA, whilst continuing the managed sale process to secure a new long term
strategic owner for the airport;
· dispose of the remaining non-core assets;
· renegotiate the terms and maturity of the exchangeable bond
beyond the current maturity date of 8 May 2024, and to subsequently repay and
close out the exchangeable bond when it then becomes due;
· to settle all remaining outstanding liabilities;
· once sufficient assets have been realised, to seek a managed sale
process of any of the remaining assets of the Group and return remaining value
to shareholders; and
· implement the move to a Standard Listing on 22 December 2023.
Enquiries:
Esken Limited C/o Teneo
Teneo
Olivia Peters / Giles Kernick
020 7353 4200
esken@teneo.com
Publication on website
A copy of this announcement and associated presentation will be available for
inspection on the Company's website at: www.esken.com.
(https://www.esken.com.) For the avoidance of doubt, the contents of this
website are not incorporated into and do not form part of this announcement.
Financial Review
Summary of the period
In the Aviation division, passenger numbers in the period increased by 17.8%
to 71,557, up from 60,734 in the prior period. During the summer 2023 season
there was a 30% increase in the number of flights operated by easyJet out of
LSA due to the new Amsterdam route in addition to increased frequency of
flights to Faro. At LSA the increased number of flights and destinations has
driven the period-on-period increase in passenger numbers.
During the period, the Group sold its wholly owned subsidiary Star Handling
Limited, which provided ground handling services at Manchester and Stansted
airports, to Skytanking UK Ltd for cash consideration of £3.9m generating a
profit on disposal of £1.6m. There is further contingent consideration of up
to £1.0m dependent on revenue performance over the 12 months post sale, for
which there is no provision in the accounts. The remaining ground handling
operation will provide dedicated in-house services at LSA.
During the period, the Renewables division was reclassified as a disposal
group held for sale and its results are presented within discontinued
operations on the Condensed Consolidated Income Statement. Continuing
challenging market conditions have had an adverse effect on gate fee income,
which has also been impacted due to unplanned plant shutdowns reducing the
amount of waste wood that can be taken in by processing sites. Despite this,
the division contributed a £0.7m profit before tax (2022: £2.3m).
The Group disposed of its investment in MBE for cash consideration of £9.0m,
resulting in a profit on disposal of £1.7m. The Group's investment comprised
a 39.6% shareholding and £7.3m of loan notes. Impairment of the loan notes
was previously reversed from £nil to £7.3m in the year ended 28 February
2023.
At 31 August 2023, the Group has £4.7m of obligations relating to leases,
maintenance and other costs of the ATR aircraft in Propius. At the period end,
there was one remaining aircraft to be returned to the lessor and obligations
on a further set of landing gear. All costs are expected to be settled before
the year ending 29 February 2024.
The Group's headroom at 31 August 2023 is £26.9m (see note 16), which
includes £20.0m of cash in the continuing Group, of which £3.0m is
ring-fenced within LSA, and £6.9m of cash and restricted cash in the
Renewables division, shown as part of assets held for sale on the Condensed
Consolidated Statement of Financial Position. The Group has remaining non-core
assets with book value of £30.3m.
The sale of Esken Renewables Limited has progressed significantly and is
expected to complete on or around 1 December 2023 for net consideration of
c.£78.5m, which will allow the Group to immediately repay the £55m term loan
and associated costs which total c.£71m. The balance of the net proceeds will
be used to further contribute £3.6m to the Group's defined benefit pension
scheme and to provide additional working capital in the short term for the
continuing Group.
Revenue
Revenue from continuing operations has decreased by 37.4% to £9.1m (2022:
£14.6m) in the six months to 31 August 2023. This is due to the Aviation
division, with the cargo operations from a global logistics partner ending in
mid-September 2022, and only three months of revenue in the period for Star
Handling Limited, following the sale of this business. There was also a
period-on-period reduction in fuel sales at LSA due to a reduction in the
global fuel price.
Profitability
Divisional Continuing Profit Summary Six months ended Restated
31 August 2023 Six months ended
£m 31 August 2022
£m
Aviation (2.8) (0.5)
Investments - -
Non-Strategic Infrastructure 2.0 (0.4)
Group central and eliminations (2.7) (3.2)
Adjusted EBITDA (3.5) (4.1)
Depreciation (4.9) (5.2)
Impairment (5.3) -
Finance costs (net) (46.8) (5.4)
Share of post-tax losses of associates and joint ventures (0.3) (0.3)
Loss before tax (60.8) (15.0)
Tax 0.4 2.5
Loss for the period from continuing operations (60.4) (12.5)
Profit from discontinued operations, net of tax 0.1 3.9
Loss for the period (60.3) (8.6)
( )
The 31 August 2022 results have been restated where required due to IFRS 5
Discontinued Operations. Refer to note 6 for more details.
EBITDA has improved by 14.5% to a loss of £3.5m (2022: £4.1m). In Aviation,
EBITDA has decreased to a loss of £2.8m (2022: £0.5m). This is due to cargo
operations from a global logistics partner ending in mid-September 2022, a
£1.4m recovery of airline marketing costs in the prior period not being
repeated, and increases in legal and staff costs. These decreases were
partially offset by the £1.6m profit on disposal of Star Handling Limited.
The Non-Strategic Infrastructure EBITDA improved from a loss of £0.4m to a
profit of £2.0m in the period, due to the £1.7m profit on disposal of MBE
and a reduction in the Widnes Regional Development Fund grant liability.
The loss before tax from continuing operations is £60.8m (2022: £15.0m).
Land and buildings at Pollington were impaired by £5.3m following the
decision to dispose of the site. Net finance costs of £46.8m (2022: £5.4m)
have increased principally due to additional non-cash interest on the
convertible debt due to a re-assessment of the expected repayment date of the
loan (see note 7), in addition to foreign exchange losses from the revaluation
of Esken Limited's US-Dollar denominated loan with Propius.
A summary of divisional profitability and further details of divisional
performance are set out in the Divisional Reviews section.
Taxation
The tax credit of £0.4m (2022: £2.5m) has arisen predominantly due to a
change in the amount of unrecognised tax losses following the disposal of Star
Handling Limited in the period.
Loss per share
Loss per share from continuing operations was 5.92p (2022: 1.23p) (see note 10
for further details).
Balance sheet
31 August 2023 28 February 2023
£m £m
Non-current assets 235.5 352.7
Current assets 162.1 86.2
Non-current liabilities (282.0) (272.7)
Current liabilities (134.9) (126.3)
Net (liabilities)/assets (19.3) 39.9
Non-current assets have decreased in the period, largely due to the
reclassification of goodwill and Property, Plant and Equipment within the
Renewables division to assets held for sale, presented within current assets,
in addition to impairment and depreciation in the period. Current assets have
increased primarily due to the above reclassification of Renewables
non-current assets, partly offset by the decrease in cash balance in the
period, see the Cash flow section below for more detail.
There has been an increase in non-current liabilities driven by an increase in
the convertible debt due to a re-assessment of the expected repayment date,
partly offset by the reclassification of non-current leases within the
Renewables division to liabilities held for sale, presented within current
liabilities. Current liabilities have increased due to the above Renewables
division reclassification, partially offset by repayment of the Propius
maintenance provision.
Debt and gearing
31 August 2023 28 February 2023
Loans and borrowings £327.7m £340.4m
Cash (£20.0m) (£50.3m)
Net debt £307.7m £290.1m
Adjusted EBITDA/interest (0.1) 0.2
Net debt/total assets 77.4% 66.1%
Gearing (1,591.1%) 726.8%
In the period, loans and borrowings have decreased by £12.7m, the main
drivers of which are as follows. Lease liabilities have decreased by £56.5m
due to the reclassification of leases in the Renewables division to
liabilities held for sale, in addition to capital repayments across the Group.
The convertible debt instrument has increased by £38.4m due to a
re-assessment of the estimated repayment date, in light of the strategic
review triggering the managed disposal of LSA. Due to make-whole provisions,
the re-assessment of the expected repayment date does not alter the expected
cash repayment amount.
Cash flow
31 August 2023 Restated
£m 31 August 2022
£m
Operating cash outflow (11.5) (12.6)
Investing activities 13.6 3.0
Financing activities (4.9) (3.8)
Decrease in the period (2.8) (13.4)
Discontinued operations (20.6) (7.4)
Cash at beginning of period 50.3 52.7
Cash at end of period 26.9 31.9
The cash outflow from discontinued operations has increased period-on-period
due to higher maintenance and lease costs in Propius as aircraft are handed
back in the current period. Costs for Propius remain in line with
expectations. Investing inflows include £9.0m from the sale of MBE and £3.6m
from the sale of Star Handling. In the prior period they included £3.5m from
the sale of a portion of Widnes land. The principal financing outflows include
£4.2m of lease payments and £3.9m interest paid on the term loan interest.
There was an inflow of £4.0m from a further drawdown on the term loan. In the
prior period the main financing outflow was from lease payments totalling
£3.5m.
Key risks and uncertainties
As with any business, risk assessment and the implementation of mitigating
actions and controls are vital to successfully achieving the Group's strategy.
The Board has overall responsibility for risk management and internal control
within the context of achieving the Group's objectives and has approved a
Framework for the risk management process. This includes regular consideration
of both existing and emerging risks, and the evaluation of the Group's
exposure to key corporate risks.
During the year, the Board has added one new principal risk, relating to the
Group's relationship with CGI, the issuer of the convertible debt
instrument. Other than that addition, the principal risks set out in our
statutory accounts for the year ended 28 February 2023 are still applicable.
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
· The condensed set of unaudited financial statements has been
prepared in accordance with the UK-adopted International Accounting Standard
34, 'Interim Financial Reporting'; and
· The interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the statutory accounts for the
year ended 28 February 2023 that could do so.
The above statement of Directors' responsibilities was approved by the Board
on
28 November 2023.
Nick Dilworth
Director
29 November 2023
Six months ended 31 August 2023 Restated(1)
Six months ended 31 August 2022
Unaudited Unaudited
Continuing operations Notes £'000 £'000
Revenue 4 9,142 14,613
Other operating income 5 3,322 89
Operating expenses (13,803) (18,805)
Restructuring costs 13 (2,171) -
Adjusted EBITDA (3,510) (4,103)
Depreciation (4,965) (5,234)
Impairments 8 (5,270) -
Operating loss (13,745) (9,337)
Finance costs 7 (47,205) (10,557)
Finance income 7 413 5,220
Share of post-tax losses of associates and joint ventures (286) (346)
Loss before tax (60,823) (15,020)
Tax 9 391 2,511
Loss for the period from continuing operations (60,432) (12,509)
Discontinued operations
Profit from discontinued operations, net of tax 6 177 3,891
Loss for the period (60,255) (8,618)
Loss per share expressed in pence per share - continuing operations
Basic 10 (5.92p) (1.23p)
Diluted 10 (5.92p) (1.23p)
Loss per share expressed in pence per share - total
Basic 10 (5.90p) (0.84p)
Diluted 10 (5.90p) (0.84p)
Condensed Consolidated Income Statement
¹The 2022 results have been restated where required due to IFRS 5
Discontinued Operations. Refer to note 6 for further details.
Condensed Consolidated Statement of Comprehensive Income
Six months ended 31 August 2023 Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Loss for the period (60,255) (8,618)
Discontinued operations, net of tax, relating to exchange differences 3,318 (9,744)
Other comprehensive income/(expense) - items that may be reclassified in 3,318 (9,744)
subsequent periods to profit or loss, net of tax
Re-measurement of defined benefit plan (663) 178
Change in fair value of financial assets classified as FVOCI (1,283) (962)
Tax on items relating to components of other comprehensive income/(expense) - (200)
Other comprehensive expense - items that will not be reclassified to profit or (1,946) (984)
loss, net of tax
Other comprehensive income/(expense) for the period, net of tax 1,372 (10,728)
Total comprehensive expense for the period (58,883) (19,346)
( )
Condensed Consolidated Statement of Financial Position
31 August 2023 28 February 2023
Unaudited Audited
Notes £'000 £'000
Non-current assets
Property, plant and equipment 11 203,146 263,412
Investment in associates and joint ventures 163 450
Other financial assets 12 14,040 15,324
Intangible assets - 54,669
Net investment in lease 16,159 16,888
Defined benefit pension surplus 1,992 1,937
235,500 352,680
Current assets
Inventories 1,125 1,729
Trade and other receivables 10,194 34,195
Restricted cash - 1,000
Cash and cash equivalents 12 19,958 49,264
Assets held for sale 6 130,824 -
162,101 86,188
Total assets 397,601 438,868
Non-current liabilities
Loans and borrowings 12 (264,707) (259,841)
Other liabilities (7,237) (8,894)
Deferred tax 9 (6,133) -
Provisions 13 (3,942) (3,942)
(282,019) (272,677)
Current liabilities
Trade and other payables (9,445) (27,611)
Loans and borrowings 12 (62,933) (80,521)
Corporation tax 9 (1,000) (583)
Provisions 13 (8,277) (17,560)
Liabilities associated with the assets held for sale 6 (53,265) -
(134,920) (126,275)
Total liabilities (416,939) (398,952)
Net (liabilities)/assets (19,338) 39,916
Capital and reserves
Issued share capital 102,534 102,534
Share premium 403,225 403,225
Foreign currency exchange reserve (3,481) (6,799)
Reserve for own shares held by employee benefit trust (7,596) (7,596)
Retained deficit (514,020) (451,448)
Shareholders' (deficit)/equity (19,338) 39,916
Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 August 2023
Unaudited
Issued share capital Share premium Foreign currency exchange reserve Reserve for own shares held by EBT Retained deficit Total equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 March 2023 102,534 403,225 (6,799) (7,596) (451,448) 39,916
Loss for the period - - - - (60,255) (60,255)
Other comprehensive income/(expense) for the period - - 3,318 - (1,946) 1,372
Total comprehensive income/(expense) for the period - - 3,318 - (62,201) (58,883)
Employee benefit trust - - - - (539) (539)
Share-based payment charge - - - - 168 168
Balance at 31 August 2023 102,534 403,225 (3,481) (7,596) (514,020) (19,338)
For the six months ended 31 August 2022
Unaudited
Issued share capital Share premium Foreign currency exchange reserve Reserve for own shares held by EBT Retained deficit Total equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 March 2022 102,534 403,225 218 (7,596) (428,238) 70,143
Loss for the period - - - - (8,618) (8,618)
Other comprehensive expense for the period - - (9,744) - (984) (10,728)
Total comprehensive expense for the period - - (9,744) - (9,602) (19,346)
Share-based payment charge - - - - 250 250
Balance at 31 August 2022 102,534 403,225 (9,526) (7,596) (437,590) 51,047
Condensed Consolidated Statement of Cash Flows
Six months ended 31 August 2023 Restated
Six months ended 31 August 2022
Unaudited Unaudited
Notes £'000 £'000
Cash used in continuing operations 14 (10,991) (11,586)
Cash (outflow)/inflow from discontinued operations (6,233) 3,802
Income taxes paid (526) (1,030)
Net cash flow from operating activities (17,750) (8,814)
Purchase of property, plant and equipment (85) (1,597)
Proceeds from the sale of property inventory - 3,538
Proceeds from the sale of property, plant and equipment 37 90
Receipt of capital element of net investment in lease 854 676
Proceeds from disposal of subsidiary undertaking, net of cash disposed 3,614 -
Proceeds from sale of associate 9,000 -
Interest received 211 323
Cash inflow from discontinued operations 4,859 1,307
Net cash flow from investing activities 18,490 4,337
Proceeds from new borrowings 4,010 -
Proceeds from grants - 670
Principal element of lease payments (3,176) (2,425)
Net repayment of revolving credit facility (net of costs) - (50)
Interest paid (5,743) (1,967)
Cash outflow from discontinued operations (19,165) (12,558)
Net cash flow from financing activities (24,074) (16,330)
Decrease in cash and cash equivalents (23,334) (20,807)
Cash and cash equivalents at beginning of period 49,264 52,738
Cash and cash equivalents at end of period 25,930 31,931
Restricted cash
Restricted cash at beginning of period 1,000 -
Restricted cash at end of period 1,000 -
Cash and cash equivalents including restricted cash at end of period 26,930 31,931
Included in cash and cash equivalents at end of period at 31 August 2023 is
£5,972,000 classified as held for sale. The restricted cash balance of
£1,000,000 at 31 August 2023 is also classified as held for sale. See note 6
for details on assets and associated liabilities held for sale.
Notes to the Condensed Consolidated Financial Statements
1 Accounting policies
Corporate information
The Condensed Consolidated Financial Statements of the Group for the six
months ended 31 August 2023 (interim financial statements) were authorised for
issue in accordance with a resolution of the Directors on 29 November 2023.
Esken Limited is a Guernsey registered company whose ordinary shares are
publicly traded on the London Stock Exchange. The principal activities of the
Group are described in note 3.
Basis of preparation
These condensed interim financial statements for the half year ended 31 August
2023 have been prepared in accordance with the UK-adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. They do not include all the information required for the
full annual financial statements and should be read in conjunction with the
financial statements of the Group as at and for the year ended 28 February
2023.
Except for the 28 February 2023 statutory comparatives, the interim financial
statements have not been audited or reviewed by the Group's auditors, Mazars
LLP.
The audited comparative financial information set out in these interim
financial statements does not constitute the Group's statutory accounts for
the year ended 28 February 2023, but has been derived from those accounts.
Statutory accounts for the year ended 28 February 2023 have been published and
Mazars LLP has reported on those accounts. Their audit report was unqualified,
however, it highlighted a material uncertainty regarding going concern in
respect of sufficient liquidity for the Group's requirements being dependent
on the successful completion of the proposed sale of the Group's renewables
business by 31 December 2023, and the ability to raise an additional
short-term facility of up to £5.0m to provide liquidity for LSA prior to 31
July 2023. The annual financial statements of the Group are prepared in
accordance with UK-adopted international accounting standards.
As presented in the Group's annual financial statements, all percentage
calculations are based on results rounded to the nearest £1,000, being the
presentation used across the primary statements and accompanying notes.
Going concern
In adopting the going concern basis for preparing the interim financial
statements, the Directors have considered the business activities including
the Group's principal risks and uncertainties. The Directors also considered
the Group's current cash position, the repayment profile of its existing debt
structure and its 12-month cashflow forecasts. In addition, the resilience of
the Group has been assessed by applying significant downside scenarios to the
Group's cash flow projections.
However, the risks and uncertainties associated with the achievement of
forecasts and the availability of sufficient funding indicate the existence of
a material uncertainty related to events or conditions that may cast
significant doubt on the Group's ability to continue as a going concern.
The sale of Esken Renewables Limited has progressed significantly and still
expected by the Directors of the Group to complete on or around 1 December
2023. A material uncertainty exists in relation to the settlement of the
exchangeable bond due in May 2024 being extended. The base case and
significant downside forecasts both include an amend and extend of the
exchangeable bond, extending the repayment to December 2025, or repayment will
be made the month after the LSA disposal, if earlier.
The significant downside scenario includes a 2-month delay to the sale of LSA
and the continuation of Group operations and costs to the end of February
2025. Both scenarios leave the Group with sufficient cash headroom to continue
trading within the going concern review period.
Overall, the Directors are satisfied that the Group will have sufficient funds
to continue to meet its liabilities as they fall due until at least 30
November 2024 and therefore have prepared the interim financial statements on
a going concern basis. However, as previously noted this is highly dependent
upon the exchangeable bond amend and extend, which indicates the existence of
a material uncertainty related to events or conditions that may cast
significant doubt on the ability of the Group to continue as a going concern
and, therefore, to continue realising its assets and discharging its
liabilities in the normal course of business. The financial statements for the
6-month period ended 31 August 2023 do not include any adjustments that would
result from the basis of preparation being inappropriate.
Significant accounting policies
The accounting policies applied in the preparation of the interim financial
statements are consistent with those followed in the preparation of the
Group's annual financial statements for the year ended 28 February 2023. These
accounting policies are expected to be applied for the full year to 28
February 2024.
Key estimates and judgements
The estimates and judgements taken by the Directors in preparing these interim
financial statements are comparable with those disclosed in the annual
financial statements for the year ended 28 February 2023, with the exception
of the IFRS 5 classification of Esken Renewables as held for sale as all the
criteria has now been met in the current period.
Presentation of Condensed Consolidated Income Statement
Adjusted EBITDA, a non-GAAP measure, is the key profitability measure used by
management for performance review in the day-to-day operations of the Group.
Non-GAAP measures are used as they are considered to be both useful and
necessary. They are used for internal performance analysis; the presentation
of these measures facilitates comparability with other companies, although
management's measures may not be calculated in the same way as similarly
titled measures reported by other companies.
In the current period the Renewables division has been reclassed as a disposal
group held for sale and a discontinued operation. The post-tax results of
discontinued operations are disclosed as a single amount in the Condensed
Consolidated Income Statement and the prior period comparative results
restated accordingly.
2 Seasonality of operations
There is a material effect of seasonality in the Aviation and Renewables
divisions. In the Aviation division there are higher seasonal sales in summer,
due to increased demand for overseas travel, and there are higher seasonal
sales in summer in the Renewables division, due to higher gate fees.
3 Segmental information
The reporting segments are Aviation, Investments and Non-Strategic
Infrastructure. The results of Propius and the Renewables division are
presented as discontinued operations on the face of the Condensed Consolidated
Income Statement, see note 6.
The Aviation segment specialises in the operation of a commercial airport and
the provision of ground handling services. The Investments segment holds
non-controlling interests in a logistics services investing business and a
baggage handling business. The Non-Strategic Infrastructure segment
specialises in management, development, and realisation of a portfolio of
property assets, including Carlisle Lake District Airport.
The Executive Directors are regarded as the Chief Operating Decision Maker.
The Directors monitor the results of each business unit separately for the
purposes of making decisions about resource allocation and performance
assessment. The main segmental profit measure is adjusted EBITDA, which is
calculated as loss before interest, tax, depreciation and impairments. Income
taxes and certain central costs are managed on a Group basis and are not
allocated to operating segments. No segmental assets or liabilities
information is disclosed because no such information is regularly provided to,
or reviewed by, the Chief Operating Decision Maker.
Aviation Investments Non-Strategic Infrastructure Group central and eliminations
Six months ended 31 August 2023 Total
£'000 £'000 £'000 £'000 £'000
Revenue
External 8,427 - 509 206 9,142
Internal 15 - 50 (65) -
Statutory revenue 8,442 - 559 141 9,142
Adjusted EBITDA (2,837) (34) 1,960 (2,599) (3,510)
Depreciation (4,530) - (194) (241) (4,965)
Impairments - - (5,270) - (5,270)
Net interest (39,063) (842) 41 (6,928) (46,792)
Share of post-tax losses of associates and joint ventures - (286) - - (286)
Loss before tax (46,430) (1,162) (3,463) (9,768) (60,823)
Aviation Investments Non-Strategic Infrastructure Group central and eliminations
Restated Total
Six months ended 31 August 2022
£'000 £'000 £'000 £'000 £'000
Revenue
External 14,150 - 302 161 14,613
Internal - - 50 (50) -
Statutory revenue 14,150 - 352 111 14,613
Adjusted EBITDA (518) (34) (402) (3,149) (4,103)
Depreciation (4,848) - (192) (194) (5,234)
Net interest (7,080) (821) (12) 2,576 (5,337)
Share of post-tax losses of associates and joint ventures - (346) - - (346)
Loss before tax (12,446) (1,201) (606) (767) (15,020)
Internal revenue above relates to inter-segment revenues that are eliminated
within Group central and eliminations. Intra-segment revenues are eliminated
within each segment.
4 Revenue
Revenue is primarily from contracts with customers. Other sources of revenue
are from owned and leased fixed assets. The following tables detail the split
between revenue from contracts with customers and other revenue, and the
disaggregation of revenue from contracts with customers.
Aviation Investments Non-Strategic Infrastructure Group central and eliminations
Six months ended 31 August 2023 Total
£'000 £'000 £'000 £'000 £'000
Revenue from contracts with customers 8,427 - 321 24 8,772
Other revenue - lease income - - 188 182 370
8,427 - 509 206 9,142
Aviation Investments Non-Strategic Infrastructure Group central and eliminations
Six months ended 31 August 2023 Total
£'000 £'000 £'000 £'000 £'000
Major product/service line
Sale of goods 5,804 - 16 - 5,820
Rendering of services 2,623 - 305 24 2,952
8,427 - 321 24 8,772
Primary geographical markets
United Kingdom 8,241 - 198 24 8,463
Europe and Ireland 177 - 123 - 300
Rest of world 9 - - - 9
8,427 - 321 24 8,772
Timing of revenue recognition
Products and services transferred at a point in time 8,427 - 321 24 8,772
8,427 - 321 24 8,772
Aviation Investments Non-Strategic Infrastructure Group central and eliminations
Restated Total
Six months ended 31 August 2022
£'000 £'000 £'000 £'000 £'000
Revenue from contracts with customers 14,045 - 78 - 14,123
Other revenue - lease income 105 - 224 161 490
14,150 - 302 161 14,613
Aviation Investments Non-Strategic Infrastructure Group central and eliminations
Restated Total
Six months ended 31 August 2022
£'000 £'000 £'000 £'000 £'000
Major product/service line
Sale of goods 2,944 - - - 2,944
Rendering of services 11,101 - 78 - 11,179
14,045 - 78 - 14,123
Primary geographical markets
United Kingdom 13,385 - 78 - 13,463
Europe and Ireland 573 - - - 573
Rest of world 87 - - - 87
14,045 - 78 - 14,123
Timing of revenue recognition
Products and services transferred at a point in time 14,045 - 78 - 14,123
14,045 - 78 - 14,123
Opening and closing receivables, contract assets and contract liabilities from
contracts with customers are as follows:
31 August 2023 28 February 2023
Unaudited Audited
£'000 £'000
Receivables 2,456 8,911
Contract assets - 3,327
Contract assets at 28 February 2023 relate to the Group's rights to
consideration for work completed but not billed in the Renewables division.
The balance is £nil at 31 August 2023 due to the reclassification of the
Renewables division balances to held for sale.
5 Other income
Six months ended 31 August 2023 Restated
Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Profit on disposal of subsidiary 1,597 -
Profit on disposal of associate 1,698 -
Profit on disposal of property, plant and equipment 27 89
3,322 89
On 15 May 2023, the Group disposed of its wholly owned subsidiary Star
Handling Limited to Skytanking UK Ltd for cash consideration of £3,874,000
and deferred contingent consideration of £270,000. Net assets disposed of
were £2,287,000 and there were costs of disposal of £260,000, leading to a
profit on disposal of £1,597,000. Further contingent consideration, dependent
upon the business achieving forecast customer revenue targets in the 12 months
following completion, has not been recognised.
On 3 August 2023, the Group disposed of its investment in Mersey Bioenergy
Holdings Limited and its wholly owned subsidiary to UK Waste Resources and
Energy Investments L.P. for cash consideration of £9,000,000. The Group's
investment comprised a 39.6% shareholding and £7,302,000 of loan notes. The
disposal generated a profit on disposal of £1,698,000.
6 Discontinued operations and disposal group held
for sale
Renewables
The results of the Renewables division are reported as part of the single line
loss from discontinued operations, net of tax on the face of the Condensed
Consolidated Income Statement. The prior year results have been restated on
the same basis. The assets and liabilities of Renewables have been reclassed
as a disposal group held for sale.
A summary of the Renewables results included in discontinued operations is as
follows:
Six months ended 31 August 2023 Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Revenue 48,883 43,534
Other income 358 466
Operating expenses (44,272) (37,050)
Depreciation (3,406) (3,879)
Net finance costs (898) (776)
Profit before tax 665 2,295
Tax - -
Profit for the period from discontinued operations, net of tax 665 2,295
The above profit from discontinued operations of £665,000 (2022: £2,295,000)
is attributable to the owners of the Company.
The Renewables division disposal group comprises the following assets and
liabilities:
31 August 2023
Unaudited
£'000
Goodwill 54,669
Property, plant and equipment 44,776
Inventory and work in Progress 725
Trade and other receivables 17,062
Deferred tax 6,133
Corporation tax 487
Cash 6,972
Assets held for sale 130,824
Lease obligations 35,896
Trade and other payables 17,369
Liabilities held for sale 53,265
The cash flows in relation to this operation are as follows:
Six months ended 31 August 2023 Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Net cash generated from operating activities 3,425 5,559
Net cash generated from investing activities 1,762 1,307
Net cash used in financing activities (6,481) (6,270)
Net cash (outflow)/inflow for the period (1,294) 596
Propius
Propius is abandoned in line with the IFRS 5 definition of a discontinued
operation. The results of Propius are reported on a single line, net of tax on
the face of the Condensed Consolidated Income Statement.
While the ongoing finance charges and cashflows in respect of aircraft leases
and cashflows in respect of maintenance obligations of Propius are presented
within discontinued operations in the Condensed Consolidated Income Statement,
the corresponding liabilities are not presented within held for sale and
remain on the Group's Condensed Consolidated Statement of Financial Position.
A summary of the Propius results included in discontinued operations is as
follows:
Six months ended 31 August 2023 Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Net operating income 447 2,670
Net finance costs (935) (1,074)
(Loss)/profit before tax (488) 1,596
Tax - -
(Loss)/profit for the period from discontinued operations, net of tax (488) 1,596
The cash flows in relation to Propius are as follows:
Six months ended 31 August 2023 Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Net cash used in operating activities (9,658) (1,757)
Net cash generated from investing activities 3,097 -
Net cash used in financing activities (12,684) (6,288)
Net cash outflows for the period (19,245) (8,045)
7 Finance costs and income
Six months ended 31 August 2023 Restated
Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Finance charges payable under leases 1,278 1,067
Convertible debt interest 38,372 7,591
Exchangeable bond interest 906 918
Term loan interest 4,685 -
Revolving credit facility interest - 981
Foreign exchange losses 1,964 -
Total finance costs 47,205 10,557
Six months ended 31 August 2023 Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Interest received from net investment in lease 335 321
Interest received on defined benefit pension scheme 78 8
Foreign exchange gains - 3,848
Revaluation of convertible debt derivative - 1,043
Total finance income 413 5,220
It was originally estimated that repayment date of the convertible debt would
be during the year ended 28 February 2026. During the period, the Group
re-assessed the repayment date and estimated that it is now going to be during
the year ended 29 February 2024, in light of the strategic review triggering
the managed sale of LSA. Due to make-whole provisions the re-assessment of the
expected repayment date does not alter the expected cash repayment amount.
This has driven an increased one-off non-cash interest charge in the period
and is the main reason for the period-on-period increase in interest on the
convertible debt.
The increase in foreign exchange losses, and decrease in foreign exchange
gains, is due to adverse fluctuations in US Dollar and exchange rates
impacting the Group's foreign currency denominated loan with Propius.
8 Impairment
During the six months ended 31 August 2023 land and buildings at Pollington
were impaired by £5,270,000 following the decision to dispose of the site.
9 Taxation
Taxation on profit on ordinary activities
Total tax in the Condensed Consolidated Income Statement from continuing and Six months ended 31 August 2023 Restated
discontinued operations
Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Corporation tax:
Current year corporation tax - 1,000
Adjustments in respect of prior years - (3,311)
Total corporation tax - (2,311)
Deferred tax:
Origination and reversal of temporary differences (391) (152)
Impact of change in rate - (48)
Total deferred tax (391) (200)
Total credit in the Condensed Consolidated Income Statement (391) (2,511)
Split between:
Continuing (391) (2,511)
Discontinued - -
Included in the above tax charges are total current tax credit on continuing
operations of £nil (2022: £2,311,000) and a total deferred tax credit on
continuing operations of £391,000 (2022: £200,000) giving a total tax credit
on continuing operations in the Condensed Consolidated Income Statement of
£391,000 (2022: £2,511,000). The total tax credit on continuing and
discontinued operations in the Condensed Consolidated Income Statement is
£391,000 (2022: £2,511,000).
An increase in the main rate of corporation tax 25% effective from 1 April
2023 was substantively enacted as at the balance sheet date 31 August 2022. As
such, the deferred tax assets/liabilities as at 31 August 2022 have been
recognised/provided at 25%.
The total net deferred tax for the consolidated Group is £nil at 31 August
2023, with a £6.3m liability presented as deferred tax on the face of the
Condensed Consolidation Statement of Financial Position and a £6.3m asset
presented within assets held for sale, relating to the Renewables division.
10 Loss per share
The following table reflects the income and share data used in the basic and
diluted earnings per share calculations:
Numerator Six months ended 31 August 2023 Restated
Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Continuing operations
Loss for the period used for basic and diluted earnings (60,432) (12,509)
Discontinued operations
Profit for the period used for basic and diluted earnings 177 3,891
Total
Loss for the period used for basic and diluted earnings (60,255) (8,618)
Denominator Number Number
Weighted average number of shares used in basic and diluted EPS 1,020,735,977 1,020,735,977
Own shares held and therefore excluded from weighted average number 4,600,764 4,600,764
11 Property, plant and equipment
Additions and disposals
During the six months ended 31 August 2023, the Group acquired or developed
property, plant and equipment (PPE) assets with a cost of £1,049,000 (2022:
£3,725,000). This mainly consisted of plant and machinery equipment in the
Renewables division.
PPE assets with a book value of £728,000 (2022: £617,000) were disposed of
by the Group during the six months ended 31 August 2023, resulting in a profit
on disposal of £376,000 (2022: £430,000), of which £350,000 is presented
within discontinued operations.
PPE in the Renewables division, with a net book value of £44,776,000, was
reclassified to assets held for sale. Land and buildings at Pollington were
impaired by £5,270,000 following the decision to dispose of the site. The
sale of Star Handling Limited led to the disposal of PPE with net book value
of £1,798,000.
12 Financial assets and liabilities
31 August 2023 28 February 2023
Unaudited Audited
Loans and borrowings £'000 £'000
Non-current
Convertible debt 171,349 132,977
Term loan 46,212 43,969
Obligations under leases 47,146 82,895
264,707 259,841
Current
Exchangeable bonds 53,300 52,637
Term loan 3,750 1,250
Obligations under leases 5,883 26,634
62,933 80,521
Total loans and borrowings 327,640 340,362
Cash (19,958) (49,264)
Restricted cash - (1,000)
Net debt 307,682 290,098
Esken Limited provides support to its subsidiaries where required. Examples of
support include intercompany funding arrangements and the provision of
guarantees in relation to financing lines provided by a number of lenders. In
addition, one Renewables contract has a covenant relating to the market
capital of Esken Limited, where a breach would be remedied by additional
letters of credit or a security deposit.
The exchangeable bonds have a May 2024 maturity date, with repayment being the
difference between the £53.3m gross bonds and the value of shares held in LDG
plc into which the bonds are convertible. At 31 August 2023, the difference
amounted to £44.4m.
There has been an increase in the convertible debt liability due to a
re-assessment of the estimated repayment date, see note 7.
A reconciliation of movements of liabilities to cash flows arising from
financing is as follows:
Exchangeable bond Convertible debt Term loan Obligations under leases
Total
£'000 £'000 £'000 £'000 £'000
Balance at 1 March 2023 52,637 132,977 45,219 109,529 340,362
Changes from financing cash flows:
Additional loans - - 5,000 - 5,000
Cash outflow from debt issue costs - - (990) - (990)
Principal elements of lease payments - continuing operations (3,176) (3,176)
Principal elements of lease payments - discontinued operations (17,922) (17,922)
Interest paid - continuing operations (730) - (3,952) (1,061) (5,743)
Interest paid - discontinued operations - - - (1,243) (1,243)
Total changes from financing cash flows (730) - 58 (23,402) (24,074)
New leases entered into - - - 1,279 1,279
Reclassification to held for sale - - - (35,896) (35,896)
Disposal of subsidiary undertaking - - - (553) (553)
The effect of changes in foreign exchange rates - - - (449) (449)
Non-cash amortisation of loan and accrual of interest 1,393 38,372 4,685 2,521 46,971
Balance at 31 August 2023 53,300 171,349 49,962 53,029 327,640
Exchangeable bond Convertible debt Revolving credit facility Obligations under leases
Total
£'000 £'000 £'000 £'000 £'000
Balance at 1 March 2022 52,385 118,862 - 123,391 294,638
Changes from financing cash flows:
Cash outflow from debt issue costs - - (50) - (50)
Principal elements of lease payments - continuing operations (Restated) - - - (2,425) (2,425)
Principal elements of lease payments - discontinued operations (Restated) - - - (10,611) (10,611)
Interest paid - continuing operations (Restated) (730) - (179) (1,058) (1,967)
Interest paid - discontinued operations (Restated) - - - (1,947) (1,947)
Total changes from financing cash flows (730) - (229) (16,041) (17,000)
New leases entered into - - - 3,395 3,395
Termination of lease - - - (11) (11)
The effect of changes in foreign exchange rates - - - 3,780 3,780
Revaluation of derivative - (1,043) - - (1,043)
Non-cash amortisation of loan and accrual of interest 918 7,592 229 2991 11,730
Balance at 31 August 2022 52,573 125,411 - 117,505 295,489
The book value and fair values of financial assets and financial liabilities
are as follows:
Book Value Fair Value
31 August 2023 31 August 2023
Unaudited Unaudited
£'000 £'000
Financial assets
Other investments 14,040 14,040
Financial liabilities
Exchangeable bonds - host element 53,300 48,436
Convertible debt - host element 171,304 85,213
Embedded derivatives 45 45
Book Value Fair Value
28 February 2023 28 February 2023
Audited Audited
£'000 £'000
Financial assets
Other investments 15,324 15,324
Financial liabilities
Exchangeable bonds - host element 52,637 42,413
Convertible debt - host element 132,932 85,213
Embedded derivatives 45 45
The Directors reasonably consider the fair value of other financial assets and
liabilities (such as trade and other receivables, trade and other payables,
and lease liabilities) approximate their book value.
Fair Value Hierarchy
The fair value hierarchy is explained in the statutory accounts for the year
ended 28 February 2023. The fair values in the table below reflect financial
assets and liabilities measured at fair value in Condensed Consolidated
Statement of Financial Position.
As at 31 August 2023 Total Level 1 Level 2 Level 3
Unaudited £'000 £'000 £'000 £'000
Financial assets
Other financial assets 14,040 8,884 5,156 -
Financial liabilities
Other financial liabilities 45 - - 45
As at 28 February 2023 Total Level 1 Level 2 Level 3
Audited £'000 £'000 £'000 £'000
Financial assets
Other financial assets 15,324 10,168 5,156 -
Financial liabilities
Other financial liabilities 45 - - 45
Level 1 other financial assets relates to the Group's investment in LDG plc.
The £5,156,000 other financial assets presented within level 2 at 31 August
2023 has been fair valued by reference to cash held within the bank account of
the captive insurance cell.
The other financial liabilities are recognised within the convertible debt and
exchangeable bonds within loans and borrowings on the face of the Condensed
Consolidated Statement of Financial Position.
There were no transfers between Levels 1, 2 and 3 fair value measurements.
13 Provisions
Onerous Litigation and claims Remediation provision Restructuring Maintenance reserves
contracts Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 March 2023 875 1,573 3,942 - 15,112 21,502
Provisions used (422) (656) - - (9,117) (10,195)
Provisions made 15 14 - 2,171 - 2,200
Provisions reversed - (26) - - (683) (709)
Currency retranslation - - - - (579) (579)
At 31 August 2023 468 905 3,942 2,171 4,733 12,219
Analysis of provisions
Current 468 905 - 2,171 4,733 8,277
Non-current - - 3,942 - - 3,942
During the period £656,000 was paid to settle part 1 claims relating to LSA.
The Group made payments totalling £9,117,000 for required maintenance on the
remaining four ATR aircraft leased by Propius. The required maintenance
provision was recalculated as at 31 August 2023, based on the latest estimates
and assumptions, which led to a release of provision of £683,000.
Fluctuations in the exchange rate between the US Dollar and GB Pound led to a
£579,000 decrease in maintenance reserves.
A restructuring provision of £2,171,000 was made to cover employee exit costs
as part of the Group restructure. The exit cost provision is expected to be
utilised in phases and within 12 months of the balance sheet date.
14 Cash used in continuing operations
Six months ended 31 August 2023 Restated
Six months ended 31 August 2022
Unaudited Unaudited
£'000 £'000
Loss before tax (60,823) (15,020)
Adjustments to reconcile loss before tax to net cash flows:
Realised profit on sale of property, plant and equipment (27) (89)
Profit on disposal of subsidiary undertaking (1,597) -
Profit on disposal of associate (1,698) -
Share of post-tax losses of associate accounted for using the equity method 286 346
Depreciation of property, plant and equipment 4,965 5,234
Finance income (413) (1,364)
Finance costs 45,241 10,549
Release of grant income (876) (772)
Impairment 5,270 -
Charge for share-based payments 167 250
Foreign exchange retranslation 1,959 (3,843)
Working capital adjustments:
Decrease/(increase) in inventories 3 (43)
Increase in trade and other receivables (2,874) (3,122)
Decrease in trade and other payables (1,437) (1,468)
Increase/(decrease) in retirement benefits and other provisions 863 (2,244)
Cash used in continuing operations (10,991) (11,586)
15 Related parties
On 3 August 2023 the Group disposed of its investment in Mersey Bioenergy
Holdings Limited (MBHL), at which point it ceased to be a related party.
During the period up to 3 August 2023, the Group made sales of £3,669,000
(2022: £2,928,000) to its former associate Mersey Bioenergy Limited, a
subsidiary of MBHL, relating to the sale of biomass material. At 31 August
2023, £563,000 (28 February 2023: £549,000) of the sales, made during the
time MBHL was a related party, was owed to the Group.
16 Glossary - Alternative performance measures (APMs)
In the reporting of financial information, the Directors have adopted various
APMs. These measures are not defined by International Financial Reporting
Standards (IFRS) and therefore may not be directly comparable with other
companies' APMs.
APMs should be considered in addition to, and are not intended to be a
substitute for, or superior to, IFRS measurements. Non-GAAP APMs are used as
they are considered to be both useful and necessary as well as enhancing the
comparability of information between reporting periods, by adjusting for
non-recurring or uncontrollable factors which affect IFRS measures, to aid
users in understanding the Group's performance.
Consequently, APMs are used by the Directors and management for internal
performance analysis, planning, reporting and incentive-setting purposes. The
presentation of these measures facilitates comparability with other companies,
although management's measures may not be calculated in the same way as
similarly titled measures reported by other companies.
Adjusted EBITDA
Adjusted EBITDA is the key profitability measure used by management for
performance review in the day-to-day operations of the Group. Adjusted EBITDA
represents loss before interest, tax, depreciation and impairments. Refer to
note 3 for reconciliation to statutory loss before tax.
Net debt
Net debt is defined as the sum of obligations under leases, term loan,
exchangeable bonds and convertible debt, less cash and cash equivalents. See
note 12 for reconciliations of this measure.
Gearing
Gearing is defined as net debt, as defined above, divided by Group
shareholders' equity per the Condensed Consolidated Statement of Financial
Position.
Headroom
Headroom is the sum of cash per the Condensed Consolidated Statement of
Financial Position of £19,958,000, plus £5,972,000 of cash and £1,000,000
of restricted cash in the Renewables division, which is presented within
assets held for sale.
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. END IR EAEFPAFPDFAARecent news on Esken
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AnnouncementREG - Esken Limited - Confirmation of appointment of administrators
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AnnouncementREG - Esken Limited - Intention to appoint administrators to the Company
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Announcement