REG - Facilities by ADF - Final results for the year ended 31 December 2021
26/05/2022 07:00
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RNS Number : 8391M Facilities by ADF plc 26 May 2022
26 May 2022
Facilities by ADF plc
("Facilities by ADF", the "Company" or the "Group")
Final results for the year ended 31 December 2021
Facilities by ADF, the leading provider of premium serviced production
facilities to the UK film and high-end television industry, is pleased to
announce its maiden unaudited final results for the year ended 31 December
2021.
Financial highlights
31 Dec 2021 £m 31 Dec 2020 £m 31 Dec 2019 £m
Group revenue 27.8 8.0 15.9
Adjusted EBITDA 7.7 0.8 3.2
Adjusted EBITDA % 28% 10% 20%
Operational highlights
· Significant revenue growth across Main Packages sales and
Additional Sales following the pandemic.
· Supported 39 productions, including Doctor Strange, Essex
Serpent, Slow Horses, Sanditon, Disney's Willow, The Crown, Peaky Blinders,
The Outlaws and have a strong pipeline of films and TV shows for the coming
year.
· Secured a number of contracts for future productions
through existing customers.
· Experienced increased demand in 2021 for additional content
from global streaming brands, firmly establishing ourselves in the UK
production landscape.
· Begun construction of new operational base at Longcross,
Surrey, which is expected to be fully operational by Q4 2022.
Outlook
· Market dynamics continue to be strong with increasing demand
for film and high-end television in the UK. This is further supported by
unprecedented levels of investment in UK Studio space and content, which bodes
well for the Company's growth ambitions.
· The Company raised £15m of gross proceeds on admission to
trading on AIM and has already started to invest by expanding orders for
additional vehicles and trailers to meet demand.
· Recent contract wins with new and existing customers have
strengthened ADF's expanding network of contacts.
· The Group continues to have strong order visibility in the
new financial year with the 2022 order book almost fully booked.
Commenting on the results, Marsden Proctor, CEO, said:
"We are delighted to report on a strong year of trading, delivered in the lead
up to our IPO on AIM, in which we experienced increasing demand for our
offering. Our successful IPO, completed in January 2022, has provided us with
the means to further strengthen the Company's financial position and execute
on our growth strategy.
"The strength of our network of contacts, depth of our customer base and
supportive market dynamics, provides us with confidence in the long-term
opportunities for the business; positioning us well to capitalise on the
market opportunities ahead."
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company take responsibility
for this announcement.
For further enquiries:
Facilities by ADF plc via Alma PR
Marsden Proctor, Chief Executive Officer
Neil Evans, Chief Financial Officer
John Richards, Chairman
Cenkos (Nominated Adviser and Broker) Tel: +44 (0)20 7397 8900
Ben Jeynes / Max Gould / George Lawson - Corporate Finance
Alex Pollen - Sales
Alma PR (Financial PR) Tel: +44 (0)20 3405 0205
Josh Royston facilitiesbyadf@almapr.co.uk (mailto:facilitiesbyadf@almapr.co.uk)
Hannah Campbell
Ella Denton
OVERVIEW OF FACILITIES BY ADF
ADF's production fleet is made up of premium mobile make-up, costume and
artiste trailers, production offices, mobile bathrooms (known as honey
wagons), diners, school rooms and technical vehicles. The Group provides these
production facilities and additional services after a planning process with
the customer held well in advance of filming. In servicing productions, ADF
staff are available on site and each production is allocated an account
manager who acts as a single lead point of contact during filming.
The Group serves customers in an industry that has experienced significant
growth in recent years, with additional demand driven by a material rise in
the consumption of film and HETV content via streaming platforms such as
Netflix, Disney and Amazon Prime. The UK film and TV industry has directly
benefited during this growth due to the quality of its production facilities
and studios, highly skilled domestic workforce, geography, accessibility to
Europe, English language environment and strong governmental support. Major US
streaming companies have now set up permanent bases in the UK, with the UK now
Netflix's third largest operation after the USA and Canada.
Chairman's statement
Having begun our first year as a publicly listed company, I am delighted to
report a successful outcome for 2021 and a robust pipeline for 2022.
Completing an IPO is a significant feat but to do so against a challenging
macro-economic backdrop, and to deliver an improved share price since IPO in
January, is a clear testament to the quality of the business. Full year
revenues of £27.8m and adjusted EBITDA of £7.7m demonstrate a remarkable
turnaround from the impact of the Covid-19 pandemic in 2020, and equally
remarkable progress from the pre-pandemic levels of 2019.
Much of this success is driven by our expanding fleet of vehicles, unrivalled
long-standing customer relationships, the expertise and committed teams within
the business, and a robust and growing market.
Successful IPO
At the time of our listing in January 2022, we emphasised our intention to
grow the business by both organic and acquisitive routes, and to utilise our
£15m of gross proceeds accordingly. I am pleased to report that this has
already begun with the purchase of new capital equipment to meet the growing
demand we are experiencing, and our acquisition pipeline looks very
encouraging. We approach acquisitions with a robust set of criteria in that we
look to work within demanding multiples, will have an element of the
consideration both deferred and contingent, will in most circumstances retain
the management and will keep the brand name unchanged as it serves its
customer base. Whilst opportunities were limited pre-IPO, the IPO has provided
significant growth capital and raised the Company's profile, and it is now a
key part of the Group's growth strategy.
At IPO, we were also able to demonstrate a substantially sold-out 2022 order
book and a significant order book for 2023. This continues to progress and
means our new trailers, which increase our capacity, can be booked out in
advance. Around 100 additional vehicles will become part of the ADF fleet in
2022, bringing the total number of vehicles to 600, with similar volumes
ordered for 2023.
Market opportunity
UK market growth continues to be buoyed by a highly skilled workforce, strong
Government support, a long history of film and TV production, favourable tax
treatment and the unprecedent levels of investment in UK studio space and
content, which bodes well for the Group's growth ambitions. High-end TV has
been in the vanguard of this growth and ADF has been and continues to be well
positioned to capitalise on this opportunity. Apple at Aylesbury, Disney at
Pinewood, Netflix at Shepperton and Longcross, and Sky at Elstree, along with
many others, adds huge additional capacity to UK film and high-end television
production capability.
At our new base at Longcross in Surrey, we are perfectly located to serve all
of those sites and, whilst work has already begun, we expect to be fully
operational from there by the start of Q4 2022.
People
In January 2022, we were pleased to announce the appointment of Kathryn James
and Vin Wijeratne as independent Non-Executive Directors. Kathryn previously
served as Managing Director of the National Exhibition Centre and as Managing
Director of Luton Airport. Vin has served as CFO at the Royal Mint and as CFO
of Zip World. On 9 May 2022, we appointed Alexandra Innes as an independent
Non-Executive Director. Following a career in banking, Alexandra is currently
a Non-Executive Director of Securities Trust of Scotland PLC, a Non-Executive
Committee Member of the Bank of England and a Member of both the Group
Executive Board and the Technology Investment Board at Knight Frank LLP.
Through their experience and expertise, I am confident Kathryn, Vin and
Alexandra will be valuable additions to our Board as we drive the business
forward in its next phase of growth.
On behalf of the Board, I would like to take this opportunity to thank all
members of staff for their dedication and commitment to making Facilities by
ADF what it is today, and to our new shareholders for their support which has
enabled us to create the right working environment for ADF to succeed as a
listed business.
ESG
Facilities by ADF is committed to activities that benefit the environment and
society, underpinned by good governance. As a Board, we are proud to have been
the first facilities provider in Europe that is approved by Albert, the
authority on environmental sustainability for the film and television
industry, which is a clear endorsement of the Group's positive ESG strategy.
Being approved by Albert is becoming ever more important as studios (including
the recently opened Sky Studios Elstree), will only allow approved vehicles on
site. We now also have solar panels installed on our new fleet vehicles, which
are all Euro 6 compliant and use biofuel where possible.
As a Board, we are dedicated to maintaining our strong corporate governance
framework; following our IPO, we have chosen to adopt the QCA Corporate
Governance Code, which will help to inform the evolution of our governance
approach in future. The recent appointments we have made to the Board are a
clear demonstration of this commitment and we will continue to ensure this
remains as we grow as a listed business.
Outlook
We have made significant progress in our first six months as a listed business
which reflects the hard work and dedication of our staff across the Group.
With an excellent customer base and a supportive market backdrop, I am
confident this positive momentum will persist as we continue to deliver our
growth strategy in the year ahead.
John Richards
Chairman of the Board
CEO review
Overview
I am delighted to present Facilities by ADF's results for the year ended 31
December 2021. It has been a year of solid progress across the Group and a
great start to life as a listed business on AIM. The increased demand for our
products from our extensive customer base throughout the period, alongside
strong market dynamics, have enabled us to achieve revenues for FY 2021 of
c.£27.8 million and adjusted EBITDA of £7.7 million. This is ahead of market
expectations at the time of IPO. Following strategic planning, the Group's IPO
in January 2022 was a real success, and we are very encouraged by the
welcoming reception we have received from our key stakeholders. The Group
raised £15 million of growth funds on admission to AIM and we are already
deploying these funds as we execute on our IPO growth strategy.
Given the continued positive momentum across the Group, and the strength of
our growth strategy and business model, I am confident this progress will
continue in the current and upcoming financial year.
Financial performance
The strong financial performance in the year reflects the bounce back from the
impact of the Covid-19 pandemic in 2020 with the various national lockdowns.
In the case of ADF, that meant the complete closure of the business for four
months from March to the end of July in 2020. Following a phased return to
filming, the TV & film industry has not looked back, with 2021 recording
the highest ever level of activity and spend. Consequently, ADF was operating
at its capacity limit for most of 2021, which is reflected in the Group's
impressive financial results.
Market opportunity
The Group serves customers in an industry that has experienced significant
growth and investment in recent years, with additional demand driven by a
material rise in the consumption of film and high-end TV ("HETV") content via
global streaming platforms such as Apple TV+, HBO Max, Netflix, Disney +, Sky
TV and Amazon Prime. The UK film and TV industry has directly benefited during
this growth due to the quality of its production facilities and studios, a
highly skilled domestic workforce, geography, accessibility to Europe, English
language environment and strong governmental support. Major US streaming
companies have now set up permanent bases in the UK, with the UK now being
Netflix's third largest operation after the USA and Canada. Throughout the
year there has also been unprecedented levels of investment in UK studio space
and content, which bodes extremely well for our growth ambitions.
Shinfield Studios in Reading, a state-of-the-art film and television
production complex on over 65 acres of land at the Thames Valley Science Park
in Shinfield, Berkshire, England has now been granted full planning permission
for 18 sound stages with completion by the middle of 2024.
Meanwhile, Apple TV+, are interested in an Enfield site, to add to its studio
space in Aylesbury. Hertfordshire is also increasingly becoming Europe's
largest TV and film production hub, comprising three studio complexes. These
include a £700 million investment by Sunset Studios, the makers of Zoolander,
at Broxbourne; a 93-acre site at Hertswood; and Sky's 28-acre development at
Elstree.
Industry Performance
In terms of the overall performance of film and TV production in the UK, the
British Film Institute ("BFI") recently reported on the year ended 31 December
2021 the following facts:
· The combined total UK spend on film and high-end (HETV)
productions for the full year 2021 was £5.64 billion. This is the highest
since records began and £1.27 billion higher than the previous peak reported
in 2019. The total number of film and HETV productions for 2021 was 420, 19%
higher than the 353 productions which started principal photography during
2020.
· 209 films began principal photography in 2021; with a total
UK production spend of £1.55 billion. This is 3% higher than the £1.5
billion spent across 350 films in 2020. Inward investment productions
accounted for 82% of the total UK spend (£1.28 billion). Spend on UK domestic
features was £221 million or 14% of the 2021 spend, compared with £158m in
2020, 10% of the total UK spend on film production. Coproduction accounted for
£58 million, or 4% of the UK spend.
· There were 211 high-end television productions filming in
2021. Total HETV production spend for 2021 was £4.09 billion, by a large
margin this is highest reported spend, nearly double the previous high of
£2.21 billion in 2019. Of the total number of productions, 94 or 45% were
domestic, generating a total spend of £648 million (16% of the total UK
spend). Total inward investment and co-production spend on HETV was £3.44
billion (84% of the total spend) across 117 productions. All of these figures
are the highest, by a large margin, since the HETV tax relief was introduced
in 2013.
This extremely encouraging market backdrop, alongside our strong network of
contacts and growing customer base, bodes well for sustainable growth
opportunities for ADF.
Competitive strength
In order to deliver large scale productions and compete at the top end of the
production facilities market, the quality of a supplier's fleet needs to be
incredibly high. ADF prides itself upon the strength of its fleet and customer
service, which has led to ADF having positive direct relationships with some
of the world's largest traditional and on-demand production companies, and
positions us well to capture a growing proportion of the expanding market. ADF
has won several contracts for future productions through existing customers
and being able to retain these customers is critical for the success of a
business like ADF. Production companies are unlikely to change provider once
they know the facilities and service levels meet their requirements, given the
bespoke set of requirements for each production. The length of planning time
has increased in recent years due to the rise in both demand for content and
scale of productions. As a result, ADF is receiving some enquiries between 12
and 18 months before a production is filmed, with the average lead time of
seven months, and its orderbook is mostly filled for 2022. This level of
revenue visibility is rare in any business and allows the Group to accurately
plan.
The requirement for a large amount of capital expenditure on specialised
equipment and a high-quality network of contacts are the two main barriers to
entry in this industry. The Board believe it would take somewhere between
three to five years and require approximately £40 million of capital
expenditure to replace ADF's current fleet, and a new entrant into the market
without an industry contact base would likely struggle to generate sufficient
leads.
We also tracked our Net Promotor Score (NPS) throughout the year, and we are
continuing to perform extremely well. We received an overall NPS score of 88,
which is a first class result in this internationally recognised customer
service measurement and reflects the expertise and knowledge of our staff that
enables us to be a market leader.
Throughout the year we supported a range of productions, including Doctor
Strange, Essex Serpent, Slow Horses, Sanditon, Willow, The Crown, Peaky
Blinders, The Outlaws and have a strong pipeline of films and TV shows for the
coming year. This visibility provides us with the confidence in our ability to
deliver on our growth strategy in the new financial year and beyond.
Delivering against growth strategy
The Group has ambitions to grow organically through further investment into
revenue-generating fleet equipment; and inorganically via opportunities to
grow through acquisitions.
The supportive market dynamics mentioned above have led to a significant
increase in demand for our services, with ADF's fleet capacity already almost
fully booked for the 2022 calendar year. We have had a total of 197 new
vehicles ordered for 2022/2023, with 76 already delivered.
Our total current fleet size is 514. By the end of 2022 we expect it to reach
600 and 700 by the end of 2023. The Group has committed to new fleet capital
expenditure orders of approximately £7.2 million and £6.6 million for 2022
and 2023, respectively. Due to the strained worldwide supply chains, we have
experienced increased lead times on delivery of our new fleet from ADF's key
suppliers; General Coach Canada, who supply the Artists Trailers and
Production Offices; and from DAF, who supply our Technical Vehicles, Tractor
Units & Generators. To date in 2022, any delays in deliveries of new
equipment has not had a major effect on the business.
Construction of our new Operational Base at Longcross in Surrey is well under
way. It is a five-acre facility compared to our current 1.4 acres at Borden
and we expect to be operational from there by the start of Q4 2022.
ESG
As a Group, we are conscious of our responsibility as a corporate citizen and
are focused on achieving a strong ESG strategy. ADF is recognised as the first
Albert approved facilities provider to the film and television industry in
Europe and our progress against this accreditation continued to move forward
throughout the year. We now have solar panels installed on 175 of our new
vehicles and the use of low energy lighting is universal. We also remain
focused on ensuring our vehicles are clean and meet the Euro 6 emission
standards. All vehicles are Ultra Low Emission Zone compliant and use biofuel
where possible. The health, safety and wellbeing of our employees and wider
stakeholders is a key part of the company's strategy and we have engaged the
consultants "Safety Forward" to assist us in improving further. We are
constantly working to ensure we carry out regular health and safety
inspections and audit reporting to ensure compliance. The Board also
recognises the value and importance of high standards of corporate governance
and has since IPO observed the requirements of the QCA Corporate Governance
Code.
People
Our employees are ADF's most important asset and are key to the Group's
long-term success. The achievements throughout the past year are a testament
to the commitment and expertise of our staff. To strengthen our senior
leadership team this year we have made several important appointments. In
January 2022 we appointed Andrea Browning as the Head of HR and, to manage our
expanding fleet of vehicles and trailers, Rhys Thomas as Head of Fleet. We
have also secured the services of Ross McDiarmid as Deputy Chief Financial
Officer as well as Janis Arents as IT Manager.
Outlook
I am pleased with the start to 2022 and life as a public company on AIM. As
demonstrated this year, with the 2022 order book now almost fully booked, our
business model provides a strong platform for sustainable growth. Going
forward, the underlying market drivers provide us with confidence that the
demand for our services will continue to expand significantly. This, coupled
with our extensive network of contacts and sector expertise, positions us well
to capitalise on the market opportunity ahead.
Marsden Proctor
Chief Executive Officer
Chief Financial Officer's Review
The financial results for the year reflect the huge bounce back from the
impact of restrictions in 2020 arising from the Covid-19 pandemic, with high
demand in 2021 for additional content from the global streaming brands now
firmly established in the UK production landscape.
Revenue
ADF's revenue increased by 245% in 2021 compared to 2020, however there were
prolonged periods of closure in 2020 as a result of the first national
lockdown in the UK. ADF closed down from the end of March 2020 until the end
of July 2020, with all staff on furlough, other than a small team of 5 to
administer the business during the closure. From July 2020 there was a
controlled return to production in the film and TV industry, which was among
some of the first sectors to be allowed back to work after the national
lockdown. Thus 2020 results are not comparable to 2021 and hence reference is
made in the narrative in the report to 2019 as the last full 'normal' year of
operation.
Turnover £M's 2021 2020 Inc. vs 2021 2019 Inc. vs 2021
Main packages £15.6 £5.3 196% £9.1 70%
Additional sales £11.8 £2.7 344% £6.5 82%
Other income £0.4 £0.1 236% £0.3 39%
Total £27.8 £8.0 245% £15.9 74%
Uplift on main packages % 76% 50% 50% 71% 7%
The table above shows the revenue for the year split out between the 2 main
headings, being Main Packages and Additional Sales, plus other miscellaneous
sales.
Main Package sales
Main packages are agreed with ADF's clients, in most cases several months in
advance, for the hire of specific equipment over a set timeframe. Each type of
equipment has a set daily hire rate. The cost of ADF staff required to be
onsite to manage and service the equipment is also calculated by reference to
a set daily hire rate.
Additional sales
As ADF's trailers can be booked six or more months in advance, client
requirements invariably change in the run up to filming. Any additional
equipment and staff required during the filming period, and the labour cost of
all equipment moves are then charged out weekly during the filming period. In
2021, the value of additional sales was 76% of the initial package revenue
compared to 50% during the Covid-interrupted 2020 (and 71% in 2019).
Specifically, additional sales include:
· Labour recharges - this is the largest component of additional
revenue (typically more than half) and is principally payments for drivers to
move trailers & equipment around the various locations on each production.
· Additional trailer hire - incremental vehicles required
during the project.
· Fuel recharges - when a customer requests ADF's vehicles be moved
around, ADF will recharge for the fuel used (with a c10% admin fee). ADF also
sell fuel cards that the clients' staff can use as they move about between
sets. Through an arrangement with Shell, ADF also get a rebate (of c3%) on
fuel purchased.
· Sundry recharges - small in size, and includes items such
as consumable products, hand sanitisers, toiletries etc.
There was, as in previous years, an element of revenue seasonality, with a
build up to the key summer months when outdoor filming on location is more
reliable with better weather, and a tail off in December when the TV &
film industry generally has a 3-4-week hiatus.
Revenue Mix
ADF worked on 39 productions in 2021 with an average revenue value of £682K.
This was a significant increase on the pre-Pandemic average value, which was
£338K in 2019. This is partly a reflection of film and higher-end TV
productions getting longer and more cost intensive.
Production value No.
£0 - £500K 19
£500K - £1.0M 13
£1.0M - £1.5M 4
£1.5M - £2.0M 1
£2.0M - £2.5M 1
£2.5M - £3.0M 1
39
Direct Costs & Gross Profit
Direct costs comprise a number of significant elements:
· Payroll for ADF staff based at production sites (studios and
on location, managing and servicing the equipment), together with ADF &
agency HGV drivers to move equipment between locations, and ADF staff employed
in our workshops, bodyshop and trailer manufacturing plant. ADF's direct
payroll cost in 2021 was 28% of revenue, compared to 61% in 2020, when the
business was closed for 4 months during the national lockdown (and 35% in
2019, the last full comparable year);
· Repair & running costs for motor vehicles &
trailers - some economies were achieved during 2021 as a result of the
continued investment in new, better-quality equipment;
· Fuel - further economies were achieved with the increasing
scale of individual productions, balanced by fluctuating fuel prices.
The overall gross margin for 2021 was 39% compared to 7% during 2020 (and 32%
in 2019).
Administrative Expenses
Administrative costs comprise payroll for management and office-based staff,
rent & facility related costs for the 3 mains sites that the company
operates from, depreciation & amortisation, and various other overheads.
Excluding depreciation and amortisation, administrative expenses were 11.3% of
revenue compared to 20.3% in 2020 (10.8% in 2019).
Non- Recurring Expenses
Non-recurring expenses comprise professional adviser costs and other one-off
costs relating to the listing of Facilities by ADF Plc on the London Stock
Exchange AIM market on 5(th) January 2022.
Share Based Payments
These relate to certain options granted to 3 employees. The cost was
calculated under the Black Scholes method.
Operating Profit
Operating profit for the year was £3.1 million compared to an operating loss
of £69,000 in 2020 (£2.4 million in 2019).
Adjusted EBITDA
Adjusted EBITDA is the adjusted profit before tax, prior to the addition of
finance income and deduction of depreciation, amortisation, and finance
expenses.
The table below shows the bridge between profit before tax (2020 loss before
tax) to Adjusted EBITDA (£000's).
Adjusted EBITDA 2021 2020
Profit/(loss) before tax £2,794 (£479)
Add back:
Finance expenses £358 £411
Depreciation & amortisation £1,922 £895
Non-recurring expenses £1,322 £0
Share based payment expense £1,332 £0
Adjusted EBITDA £7,728 £827
Adjusted EBITDA % 27.8% 10.3%
Cash Flow & Net Debt
Operating cash flows before movements in working capital increased from a
deficit of £(479,000) in 2020 to a surplus of £2.8 million in 2021. Cash
generated from operations increased from £1.8 million in 2020 to £8.6
million in 2021.
Trade & other receivables increased by £1.1 million, and trade and other
payables increased by £2.9 million, predominantly due to costs related to the
IPO on 5(th) January 2022.
At 31 December 2021, net debt (borrowings less cash) was £7.6 million which
compares to £9.1 million at the prior year end.
This is after non-financed investment in additional equipment of £780,000 and
dividends of £913,000 (2020: £371,000).
Cash Flow & Net Debt 2021 2020
Cash Flow:
Cash balances B/F £1,254 £1,330
Movement £3,733 (£76)
Cash balances C/F £4,987 £1,254
Debt:
Leases & Hire Purchase £12,265 £9,373
Bank loans £342 £946
Total £12,607 £10,319
Net Debt £7,620 £9,065
Subsequent Events
As noted elsewhere in the Annual Report, Facilities by ADF Plc listed on the
London Stock Exchange AIM market on 5(th) January 2022.
Neil Evans FCA
Chief Financial Officer
Consolidated income statement
Profit & Loss - Y/E Dec (£m) FY19A FY20A FY21A
Revenue £15.9 £8.0 £27.8
Growth 26% -49% 245%
Cost of sales £(10.9) £(7.5) £(16.9)
Gross profit £5.1 £0.6 £10.9
Gross margin 32% 7% 39%
Admin expenses £(1.9) £(1.7) £(3.2)
Other income £0.0 £1.9 £0.0
Adj EBITDA £3.2 £0.8 £7.7
Adj EBITDA margin 20% 10% 28%
Non-recurring expenses £0.0 £0.0 £(1.3)
Share based payments £0.0 £0.0 £(1.3)
EBITDA £3.2 £0.8 £5.1
Depreciation & amortisation £(0.8) £(0.9) £(1.9)
EBIT £2.4 £(0.1) £3.2
Net interest expense £(0.2) £(0.4) £(0.4)
PBT £2.2 £(0.5) £2.8
Tax charge £(0.5) £0.1 £(1.5)
PAT £1.7 £(0.4) £1.3
Consolidated cashflow statement
Cash Flow - Y/E Dec (£m) FY19A FY20A FY21A
PBT £2.2 £(0.5) £2.8
Depreciation & amortisation £0.9 £0.9 £1.9
Working capital £0.1 £0.6 £1.8
Share based payments £0.0 £0.0 £1.3
Other items £0.6 £0.4 £0.1
Net Interest Expense £0.3 £0.4 £0.4
Corporation Tax (paid) / received £(0.3) £0.0 £0.4
Net Cash Flow from Operating Activities £3.8 £1.8 £8.6
Purchase of property, plant and equipment £(0.2) £(0.1) £(0.8)
Purchase of right of use assets £(6.9) £(3.5) £(5.9)
Net Cash Flow from Investment Activities £(7.1) £(3.6) £(6.7)
Equity issuance £0.0 £0.0 £0.8
Net Debt Borrowings / Repayments £6.7 £3.5 £5.5
Lease Payments £(1.9) £(1.3) £(3.1)
Dividends £(0.5) £(0.4) £(0.9)
Other items £0.0 £0.0 £(0.5)
Net Cash Flow from Financing Activities £4.3 £1.8 £1.8
Net Increase / (Decrease) in Cash £1.0 £0.0 £3.7
Cash at Beginning of Year £0.3 £1.3 £1.3
Cash at End of year £1.3 £1.3 £5.0
Consolidated balance sheet
Balance Sheet - Y/E Dec (£m) FY19A FY20A FY21A
Property, plant and equipment £3.2 £3.4 £4.1
Right-of-use assets £8.8 £11.1 £15.1
Goodwill & other intangible assets £0.0 £0.0 £0.0
Total Non-Current Assets £12.0 £14.5 £19.2
Cash £1.3 £1.3 £5.0
Trade & other receivables £0.8 £1.0 £1.7
Total Current Assets £2.1 £2.3 £6.7
Short term debt £0.0 £0.5 £0.1
Lease liabilities £0.8 £2.1 £2.7
Trade & other payables £1.9 £2.3 £5.1
Total Current Liabilities £2.7 £4.9 £7.9
Long term debt £0.0 £0.4 £0.2
Lease liabilities £6.7 £7.3 £9.6
Deferred tax £0.9 £1.2 £2.7
Other long term liabilities £0.0 £0.1 £0.0
Total Non-Current Liabilities £7.6 £9.0 £12.6
Net Assets £3.8 £2.9 £5.4
NOTES TO THE FINANCIAL INFORMATION
1. Accounting Policies
1.1 Basis of preparation
Facilities by ADF Plc (the "Group") is a public company limited by shares,
incorporated, domiciled and registered in England and Wales in the UK. The
registered number is 13761460 and the registered address is Ground Floor 31
Oldfield Road, Bocam Park, Pencoed, Bridgend, United Kingdom, CF35 5LJ.
The consolidated financial statements are for the year ended 31 December 2021;
the company financial statements are for the period from incorporation to 31
December 2021. They have been prepared in accordance with UK-adopted
international accountings standards in conformity with the requirements of the
UK Companies Act 2006.
1.2 Going concern
The Group has continued to invest in growth throughout the financial year,
with the Group continuing to trade throughout the historical financial period
in a net asset position. The Directors are pleased with the progress of
trading to date, and in particular, the progress made relative to the
challenges of the last two years, whereby the film and television industry
closed due to government lockdowns for approximately a third of the FY20
financial year.
The financial statements have been prepared on the going concern basis which
the directors believe to be appropriate for the following reasons. The
directors have prepared cash flow forecasts for a 12-month period from the
date of approval of these financial statements and such forecasts have
indicated that sufficient funds should be available to enable the Group to
continue in operational existence for the foreseeable future by meeting its
liabilities as they fall due for payment.
The Group has been impacted by the COVID-19 Pandemic to a limited extent, with
the Directors highlighting the Group has been able to maintain a strong
balance sheet and has continued to trade profitably throughout.
2. Earnings Per Share
The calculation of the basic earnings per share (EPS) is based on the results
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the year. Diluted EPS includes the impact of
outstanding share options.
For the period ending 31 December 2020 there was a loss for the year
recognised of £402,259, as such diluted EPS is identical to the basic loss
per share as the exercise of warrants and options would be anti-dilutive.
Year ended Year ended
31 December 2021 31 December 2020
£ £
Profit/ (loss) used in calculating basic diluted EPS 1,305,886 (402,259)
Weighted average number of shares 40,135,615 39,999,999
Diluted weighted average number of shares 46,686,026 39,999,999
Earnings per share 0.032 (0.010)
Diluted earnings per share 0.028 (0.010)
3. Property, plant and equipment
Plant and machinery Motor vehicles Total
£'000 £'000 £'000
Computer equipment
Hire Fleet £'000
£'000
Cost
At 1 January 2020 114 4,330 357 74 4,875
Additions 8 87 - - 95
Transfers - 632 102 - 734
Disposals - (457) (196) - (653)
At 31 December 2020 122 4,592 263 74 5,051
Depreciation
At 1 January 2020 52 1,497 116 45 1,710
Charge for the year 8 42 11 4 65
Transfers - 184 47 231
Disposals - (215) (118) - (333)
At 31 December 2020 60 1,508 56 49 1,673
Cost
At 1 January 2021 122 4,592 263 74 5,051
Additions 31 486 294 10 821
Transfers - 496 25 - 521
Disposals (27) (5) (90) (73) (195)
At 31 December 2021 -126 5,569 492 11 6,198
Depreciation
At 1 January 2021 60 1,508 56 49 1,673
Charge for the year 17 318 27 5 367
Transfers - 127 12 - 139
Disposals (19) (2) (47) (50) (118)
At 31 December 2021 58 1,951 48 4 2,061
Net book amount
At 31 December 2020 62 3,084 207 25 3,378
At 31 December 2021 68 3,618 444 7 4,137
Depreciation is charged to administrative expenses within the statement of
comprehensive income.
4. Leases
The Group leases a number of assets in the jurisdictions from which it
operates. All lease payments, in-substance, are fixed over the lease term.
Where there are leasehold properties which hold a variable element to the
lease payments made, these are not fixed and not capitalised as part of the
right of use asset. All expected future cash out flows are reflected within
the measurement of the lease liabilities at each year end.
Nature of leasing activities
As at As at
31 December 2021 31 December 2020
Number of active leases 61 64
The Group leases include leasehold properties for commercial and head office
use, motor vehicles and equipment. The leases range in length from three to
ten years and vary in length depending on lease type. Leasehold properties
holding the longest-term length of up to 10 years, motor leases up to 4 years,
hire fleet up to 7 years, vehicles up to 7 years and equipment of up to 5
years. All leases are held with the Group's subsidiary CAD Services Ltd.
Extension, termination, and break options
The Group sometimes negotiates extension, termination, or break clauses in its
leases. In determining the lease term, management considers all facts and
circumstances that create an economic incentive to exercise an extension
option, or not exercise a termination option. Extension options (or periods
after termination options) are only included in the lease term if the lease is
reasonably certain to be extended (or not terminated).
On a case-by-case basis, the Group will consider whether the absence of a
break clause would expose the Group to excessive risk. Typically, factors
considered in deciding to negotiate a break clause include:
- The length of the lease term;
- The economic stability of the environment in which the property
is located; and
- Whether the location represents a new area of operations for the
Group.
Incremental borrowing rate
The Group has adopted a rate with a range of 3.3% - 4.2% as its incremental
borrowing rate, being the rate that the individual lessee would have to pay to
borrow the funds necessary to obtain an asset of similar value to the
right-of-use asset in a similar economic environment with similar terms,
security and conditions. This rate is used to reflect the risk premium over
the borrowing cost of the Group measured by reference to the Group's
facilities.
The Group performed a sensitivity analysis where incremental borrowing rates
have been used and identified if the incremental borrowing rate increased to
5% there would be a decrease in the carrying amount of the right-of-use asset
at 31 December 2021 of £32,393 (2020: £39,404); there would be a subsequent
decrease in the lease liability of £23,834 (2020: £30,418). If the
incremental borrowing rate decreased to 1% there would be an increase in the
carrying amount of the right-of-use asset at 31 December 2021 of £96,512
(2020: £118,841) and there would be a consequent increase in the lease
liability of £67,841 (2020: £89,373).
Sensitivity analysis is not performed on hire purchase leases as interest is
inherent within these lease agreements.
5. Right-of-use assets
Leasehold Property Motor Leasehold Hire Fleet and Motor Vehicles Total
£'000 £'000 £'000 Equipment £'000
£'000
Cost
At 1 January 2020 1,397 30 8,137 12 9,576
Additions - 79 3,547 - 3,626
Transfers - - (734) - (734)
Disposals - - - (4) (4)
At 31 December 2020 1,397 109 10,950 8 12,464
Depreciation
At 1 January 2020 265 2 491 5 763
Charge for the period 292 25 510 3 830
Transfers - - (231) (231)
Disposals - - - (4) (4)
At 31 December 2020 557 27 770 4 1,358
Cost
At 1 January 2021 1,397 109 10,950 8 12,464
Additions - 28 5,882 14 -5,924
Transfers - - (519) - (519)
At 31 December 2021 1,397 137 16,313 22 17,869
Depreciation
At 1 January 2021 557 27 770 4 1,358
Charge for the period 283 30 1,240 2 1,555
Transfers - - (139) - (139)
At 31 December 2021 840 57 1,871 6 2,774
Net book amount
At 31 December 2020 840 82 10,180 4 11,106
At 31 December 2021 557 80 14,442 16 15,095
6. Lease liabilities
Leasehold Property Hire Fleet and Motor Vehicles Total
£'000 Motor Leasehold £'000 £'000
£'000 Equipment
£'000
At 1 January 2020 1,137 26 6,361 7 7,531
Additions - 79 2,647 - 2,726
Interest expense 41 3 345 - 389
Lease payments (including interest) (307) (25) (938) (3) (1,273)
At 31 December 2020 871 83 8,415 4 9,373
At 1 January 2021 871 83 8,415 4 9,373
Additions - 28 5,458 15 5,501
Interest expense 30 3 311 - 344
Lease payments (including interest) (318) (23) (2,610) (2) (2,953)
At 31 December 2021 583 91 11,574 17 12,265
Reconciliation of minimum lease payments and present value
As at As at
31 December 2021 31 December 2020
£'000 £'000
Within 1 year 2,996 2,247
Later than 1 year and less than 5 years 9,727 3,999
After 5 years 987 4,170
Total including interest cash flows 13,710 10,416
Less: interest cash flows (1,445) (1,043)
Total principal cash flows 12,265 9,373
Reconciliation of current and non-current lease liabilities
As at As at
31 December 2021 31 December 2020
£'000 £'000
Current 2,658 2,100
Non-current 9,607 7,273
Total 12,265 9,373
Short term or low value lease expense
As at As at
31 December 2021 31 December 2020
£'000 £'000
Total short term or low value lease expense 3 21
3 21
7. Trade and other receivables
Group As at As at
31 December 2021 31 December 2020
£'000 £'000
Amounts falling due within one year:
Trade receivables 622 226
Amounts recoverable on contracts 588 144
Hire purchase interest paid 127 -
Prepayments 430 295
1,767 665
Company As at
31 December 2021
£'000
Amounts falling due within one year:
Other receivables 127
Prepayments & accrued income 352
Taxation and social security 156
635
8. Trade and other payables
Group As at As at
31 December 2021 31 December 2020
£'000 £'000
Amounts falling due within one year:
Trade payables 1,831 447
Other payables 101 333
Taxation and social security 959 928
Accrued expenses 1,722 222
Deferred income 519 328
5,132 2,258
Company As at
31 December 2021
£'000
Amounts falling due within one year:
Amounts due to subsidiaries 952
Accrued expenses 164
1,116
The Directors consider that the carrying value of trade and other payables
approximates to their fair value. Trade payables are non-interest bearing and
are normally settled monthly.
Included in other payables were Director loan accounts with a balance owed by
the Directors as at 31 December 2021: £297 (2020: due to Directors £28,668),
all amounts were non-interest bearing. Revenue recognised in the year that has
deferred from the previous year was £328,000 (2020: £86,393).
9. Borrowings
As at As at
31 December 2021 31 December 2020
£'000 £'000
Current:
Bank loans 100 527
Other loans - 20
100 547
Non-current
Bank loans 242 342
Other loans - 57
242 399
Total borrowings 342 946
A maturity analysis of The Group's borrowings is shown below:
As at As at
31 December 2021 31 December 2020
£'000 £'000
Less than 1 year 100 547
Later than 1 year and less than 5 years 242 399
342 946
Included in bank loans is a Coronavirus Business Interruption Loan Scheme
(CBILS) held with Barclays. The loan was taken out in May 2020 and matures
four years after this date. The loan incurs interest of 2.25% above Bank of
England base rate with deferred payment start date as part of the CBILS scheme
of 12 months. Interest on the loan is payable by the UK Government as part of
the business interruption payment under the facility.
Included in bank loans is a trade finance facility held with Barclays. The
agreement is renewed annually and provides 60 day finance facility. At 31
December 2021 the facility held a limit of £500,000 of which the following
amounts had been drawn down and were outstanding £Nil (2020: £468,887). The
facility incurred interest payable at 31 December 2021 of 2.5% per annum.
Included in other loans is a loan from the CAD Services Pension Scheme,
whereby the trustees, A Dixon and S Haines are also Directors of CAD Services
Ltd. The agreement matured over five years concluding in May 2021, where the
loan was fully repaid, and all obligations released, thus the amount
outstanding at 31 December 2021 was £Nil (2020: £77,202). The facility
incurred interest payable at 12%.
10. Post balance sheet events
On the 5 January 2022 the shares of the Company admitted to the London Stock
Exchange trading on the UK AIM market. Admission and dealings of the ordinary
shares of Facilities by ADF Plc became effective on this date. As part of the
listing, and on this date, 30,000,000 new ordinary shares were placed at a
price of 50p.
On 5 January 2022, the Company issued 500,000 and 390,000 new ordinary share
options to M Proctor and N Evans, respectively. The options hold an exercise
price of 1p and will vest after 3 years subject to specific performance
measurement criteria.
On 5 January 2022 Cenkos Securities Plc were granted the conditional right to
subscribe for 1,200,000 new ordinary shares at the Placing Price at any time
during the three-year period from Admission.
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