REG - Facilities by ADF - Half year results
13/09/2022 07:00
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RNS Number : 1833Z Facilities by ADF plc 13 September 2022
13 September 2022
Facilities by ADF plc
("Facilities by ADF", "ADF", the "Company" or the "Group")
Half year results for the six months ended 30 June 2022
Facilities by ADF, the leading provider of premium serviced production
facilities to the UK film and high-end television industry ("HETV"), is
pleased to announce its unaudited half year results for the six months ended
30 June 2022.
Financial highlights
£M's H1-22 H1-21 FY-21
Group revenue 12.6 11.5 27.8
*Adjusted EBITDA 2.6 3.8 7.7
*Adjusted EBITDA % 21% 33% 28%
Operational highlights
· Positive trading in H1-22, with revenues marginally ahead
of H1-21 levels.
· Interim dividend proposed of 0.46 pence per share.
· Supported 46 productions in the half, including The Crown season
5, Slow Horses, Everything I knowabout Love, Sandman and Secret
Invasion.
· Continued deployment of funds raised at IPO, supporting the
expansion of the current fleet adding 51 units in H1-22, bringing the total
fleet to 550 units.
· Experienced increased demand for ADF's services from global
streaming brands in H1-22, firmly establishing the UK's position in the
content production landscape.
· Working with carbon audit consultancy Creative Zero to better
understand our impact on the environment.
· New operational base at Longcross, Surrey, on track to be
completed by Q4 2022, highlighting the Company's commitment to its growth
strategy and increased demand for ADF's services.
· Increased number of productions serviced, with almost double the
number of productions serviced in H1- 21, leading to increased mobilisation
costs.
Outlook
· Underlying market drivers providing confidence that the demand
for ADF's services will continue to expand for the
foreseeable future.
· Excellent order visibility in the second half with the order
book for 2022 now filled and the Group services continue to be oversubscribed.
· The Group remains committed to growth and will continue to
review acquisition opportunities in line with its strategy.
· Notwithstanding the high number of smaller scale productions
undertaken in H1-22 compared to H1-21, leading to expected, higher fleet
mobilisation costs, the H2-22 order book consists of predominantly larger
scale productions, and thus the Group continues to trade in line with market
expectations for the FY-22 year.
· Management is monitoring the macro-economic backdrop, with
increased energy and fuel costs, along with higher inflation, and are
preparing strategies accordingly.
Commenting, Marsden Proctor, CEO, said:
"Following a strong end to FY-21, we have continued to trade positively in the
new financial year demonstrated by high levels of fleet utilisation. Funds
provided at IPO have allowed the Company to increase the size of our fleet to
ensure that we meet the robust demand for film and HETV in the UK.
"The overall landscape has not changed, our order book is now filled for 2022,
market dynamics have remained strong, and we are confident that we shall see
continued success going forward into the second half and beyond."
Note
*Adjusted EBITDA is the adjusted profit before tax, prior to the addition of
finance income and deduction of depreciation, amortisation, and finance
expenses. The adjusted EBITDA measurement removes non-recurring, irregular and
one-time items that may distort EBITDA. Adjusted EBITDA provides a more
normalised metric to make comparisons more meaningful across the Group and
other companies in the same industry
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
Stephen Samuel
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.
CEO review
Overview
We are pleased with the operational and financial progress made in the first
half of the new financial year as we continue to strengthen our position as
the leading provider of premium serviced production facilities to the UK film
and HETV industry. To date this progress has been driven by organic growth
benefitting from additional scale following our successful IPO in January
2022. Whilst last year several larger productions had to catch up from
Covid-19 restrictions, resulting in an exceptional first half of FY-21, we are
delighted to report that revenues for the half are ahead of H1-21 levels.
Demand for our products remains strong, underpinned by the ever-growing film
and TV market in the UK and we continue to find ourselves at the forefront of
increasing competition for subscribers amongst the leading global streaming
companies. The funds raised at IPO enable us to continue to increase the size
of our fleet, allowing us to better support higher demand for our services.
Our current fleet size is 550, up from 500 at the end of 2021, reflecting this
demand lead growth strategy.
Alongside supportive market drivers and a strong business model, we have
unrivalled long-standing customer relationships, a full order book for the
year and an expert dedicated team across the Group, providing the Board with
confidence in the long-term success of the business.
Financial performance
The strong financial end to FY-21 has continued into the first half, with
revenues up 9% to £12.6m (HY21 £11.5m), highlighting our strong position in
a market full of opportunities. We have seen demand for our fleet steadily
increase, demonstrated by our high number of productions, doubling on the
number from last year. The increased number of productions has translated into
shorter production times with a greater need for mobilisation. Whilst this has
caused a rise in our cost base for H1-22, we continue to have optimism moving
forward as we see further growth opportunities through larger productions
planned in H2-22. The Group has strong order visibility for the remainder of
FY-22, with the 2022 order book now filled, and management is confident in
achieving full year market expectations.
Market opportunity
We operate in an industry that has experienced significant growth and
investment in recent years, underpinned by the success of HETV. The
significant rise of global streaming platforms such as Apple TV+, HBO Max,
Netflix, Disney +, Sky TV and Amazon Prime, has culminated in a material
increase in the consumption of films and HETV, with Disney + recently
announcing 221.1 million subscribers, a rise of over 14 million in its fiscal
Q3 of 2022. Despite concerns over some streaming platform subscriber numbers,
the Group has seen no effect on production demand to date and we continue to
expand our offering. There continues to be an influx of inward investment and
co-production spend in the UK, as we see the demand for content reaching
record levels. The UK has become a major hub for international clients, with
the UK being Netflix's third largest operation after the USA and Canada, which
bodes well for our growth ambitions.
Ulster University has recently partnered with the Belfast Harbour Commission,
with the support of the Northern Ireland Screen to commission a £72m complex.
The complex is set to include commercial Virtual Production stages, at a time
when Virtual Production is being viewed as a revolutionary innovation for
production pipelines across the film sector.
The Shepperton studios, of the Pinewood Group, is set to undergo a huge
expansion project. The expansion will see the production hub double in size,
with the promise of 14 sound stages and 31 workshops to be used by Netflix.
This is an exciting time for the UK as major developers continue to increase
their investment and we envisage this trend continuing.
Great Point Seren Studios, in Cardiff, plans to expand one of Wales' biggest
film studios. Great Point Seren Studios recent productions include Netflix's
Havoc, popular BBC show Industry, A Discovery of Witches, and the fourth
series of Sherlock. The studios already have four stages, the smallest of
which measures 15,873 sq ft, while the largest is 21,039 sq ft. Now plans have
been submitted to Cardiff Council to further expand the east Cardiff studios.
The plans include building three studio buildings, as well as parking for cars
and bikes and access for pedestrians and cyclists. The brief, according to the
design and access statement, is to "design cutting edge studio facilities in
response to the booming demand for high quality content, combined with a
shortage of large purpose-built studios".
UK's Shinfield Studios has secured £261 million of funding from investment
firm Cain International to construct the main phase of its 18-stage facility
in Berkshire, England. The new complex situated at the Thames Valley Science
Park, near Reading, already has four temporary stages in place, which are let
to HETV, streaming and film companies, including Disney, and work on a further
14 purpose-built sound stages is underway. The studios hope to generate
between £500-600 million of annual inward investment and create 3,000 new
jobs.
A list of the new Film and TV studios under construction in the UK can be
found at The Studio Map: thestudiomap.com.
Industry Performance
In terms of the overall performance of film and TV production in the UK, the
British Film Institute ("BFI") recently reported for the half-year ended 28
July 2022 the following facts:
· The combined total spend on film and HETV production in the UK for
H1 2022 was £3.19 billion from 191 productions. This is the highest combined
film and HETV spend reported for the H1 official statistics period.
· The combined total UK spend on film and HETV productions for the 12
months from July 2021 to June 2022 was £5.72 billion. This is a 3% increase
in spend on the previous 12-month period and is also now the highest figure
seen since records began. Inward investment productions accounted for £4.75
billion or 83% of the total.
· The latest 12-month period contains the second and third highest
quarters for combined UK spend since the introduction of the HETV tax relief
in 2013.
· The total number of films starting principal photography during
H1 (January - June) 2022 was 90, which is 13 more than reported for H1-21. The
total UK spend of these films was £1.11 billion, 44% higher than the £771
million reported for 2021.
This information only furthers our confidence in the market dynamics and the
outlook of the HETV industry in the UK.
Competitive strength
We are already the provider of choice in the UK for large scale and quality
productions, which has allowed us to select the highest value production
contracts available. This market position has taken several years to build,
and we have the right infrastructure in place to support continued expansion.
To deliver such productions and compete at this level, 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 Group has experienced a larger number of shorter
productions in the H1-22 than in H1-21 which, in addition to receiving some
enquires over twelve months ago, has meant the Company's order book for 2022
is filled. This level of revenue visibility allows the Group to accurately
plan.
The Group continues at pace with its capital expenditure programme, and we
have orders with our key suppliers through to the end of 2023.
The Group is in the process of taking a lease on an adjacent property to our
factory in Brynmenin, with the intention of doubling the capacity of our new
vehicle manufacturing and fit-outs. We expect this to be fully staffed and
operational by the end of the year.
The completion of our new UK operational hub at Longcross is expected by the
end of October, from when an orderly transition will commence from the current
site in Bordon Hampshire. All necessary operational planning components are
complete for this.
Our NPS score continues at an exceptional level - currently 87, up from 83 at
the date of the IPO.
The Group has continued to work on several premier productions throughout
H1-22, including the upcoming season of The Crown, Sandman, Everything I know
about Love and Slow Horses. We mentioned our work with Disney on the latest Dr
Strange movie, and we are pleased to announce our work on another Marvel
movie, Secret Invasion. As previously stated, having visibility on such highly
acclaimed projects is imperative as we look to continue our growth in the
future.
Delivering against growth strategy
In the first six months of the year, we have continued to successfully execute
on our organic growth strategy through further investment into
revenue-generating fleet equipment.
Our total current fleet size is 550, with this capacity level fully booked for
the 2022 year. By the end of 2022 we expect the fleet size to reach 600, and
700 by the end of 2023, further strengthening our leading market position. The
Group has committed to new fleet capital expenditure orders of c.£7.8 million
and £8.2 million for 2022 and 2023, respectively. Final capex for these years
will be ahead of this with ad-hoc purchases and the fitout costs of some
vehicles and trailers.
Due to the well documented worldwide supply chain issues, we continued to see
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.
The 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 is on track to be operational by the start of Q4 2022.
At IPO, we also emphasised our intention to grow through acquisitions. 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 typically keep the brand name unchanged as it serves its customer base.
Whilst opportunities were limited pre-IPO, the IPO has raised the Group's
profile and balance sheet strength, and we are now seeing more opportunities.
We are in discussions with several parties and will continue to review
opportunities for complementary additions as they arise.
ESG
As a Group, minimising any impact on the environment from our operations
remains core to the business. 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 are always looking to leverage our strong network of clients and
partners, to help identify initiatives that can improve our environmental
performance. We have recently started working with Creative Zero, a
sustainability consultant working with creative companies to transition to Net
Zero, to undergo a Carbon Audit to better understand our impact on the
environment, as we embark upon a journey to ultimately become a carbon-neutral
operator in the future. Our business is also committed to enforcing the
highest ethical standards and we are always focused on enhancing the offering
for our employees and customers. 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
We will always maintain that our employees are the most important asset of ADF
and are key to the Group's long-term success. We have had a successful start
to life as a listed business and our employees are at the centre of that
success. Following several key appointments in January 2022 including Andrea
Browning as the Head of HR, Rhys Thomas as Head of Fleet, Ross McDiarmid as
Deputy Chief Financial Officer and Janis Arents as IT Manager, in May 2022 we
announced the appointment of Alexandra Innes as an independent Non-Executive
Director. Alexandra's executive career spanned investment banking, global
capital markets, and investment management across several sectors, which will
be invaluable to us, as we continue to grow.
Outlook
It has been an encouraging start to the year, working on several premier
productions in the UK, bolstered by a resurging market following the pandemic.
We have successfully grown our fleet and have seen a rise in our overall
number of productions. Going forward, we remain optimistic over the outlook
for the business, and with the 2022 order book now filled, our business model
provides a strong platform for sustainable growth. We enter the second half in
a robust position and look to the future with confidence as the UK continues
to establish itself as a hub for our industry, presenting a significant
opportunity for ADF to capitalise on this expanding market.
Marsden Proctor
Chief Executive Officer
Financial performance
Summary
The financial results for the six months ended 30 June 2022 reflect a very
busy period for ADF. Sales in the first half of the year were 9% ahead of the
same period in 2021, which were exceptional at the time, and came in slightly
ahead of management's expectations.
Production and revenue visibility at the back end of 2021 meant we knew that
the first half of the 2022 was going to comprise a much higher number of
smaller, and thus shorter duration, productions. This work schedule meant an
additional requirement for equipment and labour and that these would require a
higher degree of mobilisation, which was subsequently built into the 2022
budget.
H1-21 was undoubtedly a 'bounce-back' period after the Covid restrictions from
2020 were finally lifted. There has always been a degree of seasonality with
production activity, with a winter hiatus in Q1 and then a build towards the
summer months with the more reliable weather. However, in 2021, with a high
level of backed-up work from 2020, the first 6 months of 2021 were very busy
for the film & TV industry from the outset of the year. Additionally, the
mix of jobs in Q1 and Q2 in 2021 was very static and studio-based with very
little movement and hence much lower mobilisation & associated costs
(agency drivers, fuel etc). Given this comparative activity it is very
pleasing that H1-22 revenue exceeded that of the prior year.
The overall metrics are further summarised in the table below.
The cost of the additional mobilisation in H1-22 was c.£1 million, with twice
the number of agency HGV driver hires than in H1-21, combined with a 30%
increase in fuel costs in the same period resulted in operating profit
reducing from 25% in 2021 to 12% in 2022. Fuel costs are passed onto customers
during productions but not the costs of mobilisation between engagements.
Further details regarding the impact of the mix of productions and associated
costs are provided in the following sections.
H1-22 H1-21
Revenue £12,620 £11,536
Operating profit £1,538 £2,944
Add back: Depreciation £1,093 £896
EBITDA £2,631 £3,840
EBITDA % 20.8% 33.3%
Revenue
ADF's revenue increased by 9% in the first half of 2022 compared to 2021.
The table below shows the revenue for the period analysed between the 2 main
categories, being Main Packages and Additional Sales, plus other miscellaneous
sales.
Turnover £M's H1-22 H1-21 % FY-21
Main packages £7.2 £6.2 16% £15.6
Additional sales £5.3 £5.5 -4% £11.8
Other income £0.1 £0.2 -15% £0.4
Total £12.6 £11.5 9% £27.8
Uplift on main packages % (see explanation below) 74% 89% 76%
Main Package sales
Main packages are agreed with ADF's clients, in most cases several months in
advance, for the hire of specific items of 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. The rate card is set and adjusted
annually.
Additional sales
As ADF's trailers are typically booked six or more months in advance, and
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
H1-22, the value of additional sales was 74% of the initial package revenue
compared to 76% during the 12 months of 2021 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 and equipment around the various locations on each
production.
· Additional trailer hire - incremental vehicles required
during the project.
· Fuel recharges - ADF recharges fuel used on productions (with
a c10% admin fee). ADF also sells fuel cards that the clients' staff can use
as they move about between sets.
· Sundry recharges - consumable products, hand sanitisers,
toiletries etc.
As noted above, generally there is an element of 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. In 2021 there was no such effect
with an overspill of demand from 2020.
Revenue Mix
ADF worked on 39 productions across the 12 months of 2021 with an average
revenue value of £682K. This was a significant increase on the pre-Pandemic
average value, which was £338K in 2019.
In H1-22 we have worked on 46 productions with an average revenue value of
£274K and clearly the mix for the first half of 2022 has been very different
to 2021. In the second half of 2022 there are a number of much larger
productions planned.
Revenue by Platform £000's %
Amazon £686 5.4%
Apple £234 1.9%
BBC £2,431 19.3%
Disney £1,449 11.5%
Fox £315 2.5%
ITV £2,246 17.8%
Marvel £952 7.5%
Netflix £2,614 20.7%
Other £714 5.7%
Sky £702 5.6%
Total invoiced £12,342 97.8%
WIP & deferred income £278 2.2%
Total revenue £12,620 100.0%
The split of productions across the revenue bands is shown below:
H1-22 FY-21
Production value
£0 - £500K 39 19
£500K - £1.0M 6 13
£1.0M - £1.5M 1 4
£1.5M - £2.0M 1
£2.0M - £2.5M 1
£2.5M - £3.0M 1
46 39
Direct Costs & Gross Profit
Agency HGV Driver costs
As mentioned above, the first half of 2022 was characterised by smaller value
jobs and consequently higher mobilisation costs. During the first 6 months of
2022, we made 7,097 individual agency driver bookings vs 3,680 in the same
period in 2021 - an increase of 93%.
There was a compound effect with rate increases from agencies due to changes
in IR35 rules and the well-publicised shortage in HGV drivers in the second
half of 2021 pushing up pay rates. Consequently, agency driver costs, although
slightly below budget, have increased from 7.7% in H1-21 to 16.1% in H1-22.
Hourly rates paid to agencies in H1-21 were £21.45 compared to £27.85 in the
comparative period in 2022. Across the whole of 2021, the equivalent rate was
£24.75 - hence the rate increase on FY-21 is c.12%.
Fuel Costs
Fuel costs have also significantly increased, up c.30% on the same period in
2021, but the majority of this is passed on to customers.
Pence Per litre Petrol Diesel Average
6 months 2021 122.9 127.1 125.0
6 months 2022 156.0 165.3 160.7
Increase 33.1 38.2 35.7
Increase % 27% 30% 29%
Other direct costs
Some labour efficiencies have been achieved in the first half of 2022, with
direct payroll costs down from 30.3% of turnover in 2021 to 29.1% in 2022 (and
ahead of budget of 31.5%). Likewise cross-hiring of equipment reduced from
4.6% in 2021 to 4.3% in 2022.
Administrative expenses
Since the listing of the business in January 2022, overheads have increased by
£190K in the first 6 months of 2022 compared to the same period in 2021 in
relation to the 'administrative' costs of being a PLC (audit & accountancy
fees, brokers costs, company secretarial costs' legal fees, etc), plus a
further £100K increase in overall remuneration for senior executives and new
NEDs - these were all budgeted for in 2022.
Other administrative costs comprise payroll for senior management and
office-based staff, rent and 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 11.9% of sales vs 8.6% in H1-21 (and 11.3% in FY-21).
Share Based Payments
These relate to certain options granted to 3 employees. The cost was
calculated under the Black Scholes method.
Cash Flow & Net Debt
Operating cash inflows before movements in working capital was £1.2 million
in H1 2022 compared to £2.8 million in H1-21.
Trade and other receivables increased by £1.1 million and trade and other
payables decreased by £1.5 million due to the settlement of accrued advisers
and brokers fees for the IPO accrued at 31 December 2021.
During the period, net proceeds of £13.2 million were raised from the IPO on
5 January 2022 and cash balances at the end of the period were £16.0 million
(£5.0 million at 31 December 2021).
Net cash at 30 June 2022 was £2.4 million - net debt at 31 December 2021 was
(£7.6 million).
During the 6 months to 30 June 2022, ADF spent £4.3 million on new equipment,
of which £2.4 million was financed by hire purchase and £1.9 million was
paid for with cash.
Neil Evans
Chief Financial Officer
FACILITIES BY ADF PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Six months ended Six months ended
30 June 2022 (unaudited) £'000 30 June 2021 (unaudited) £'000
Note
Revenue 3 12,620 11,536
Cost of sales (8,454) (6,406)
Gross profit 4,166 5,130
Other operating income 4 - 25
Administrative expenses (2,600) (1,884)
Non-recurring expenses - (327)
Share based payment expense (29) -
Operating profit 1,537 2,944
Finance income - -
Finance expense (284) (117)
Profit before taxation 1,253 2,827
Taxation (112) (606)
Profit for the period 1,141 2,221
Other comprehensive income
Total other comprehensive income - -
Total other comprehensive income 1,141 2,221
Earnings per share for profit attributable to the owners
Basic earnings per share (£) 6 0.0152 0.0555
Diluted earnings per share (£) 6 0.0141 0.0479
The accompanying notes on page 14 to 21 form an integral part of these
consolidated interim financial statements.
All amounts relate to continuing operations.
FACILITIES BY ADF PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Note As at As at
30 June 2022 (unaudited) £'000 31 December 2021
(audited)
£'000
Assets
Current assets
Trade and other receivables 2,939 1,767
Cash and cash equivalents 15,982 4,987
Total current assets 18,921 6,754
Non-current assets
Property, plant and equipment 7 5,045 4,137
Right-of-use assets 8 16,381 15,095
Total non-current assets 21,426 19,232
Total assets 40,347 25,986
Liabilities
Current liabilities
Trade and other payables 3,638 5,132
Lease liabilities 8 3,021 2,658
Borrowings 100 100
Total current liabilities 6,759 7,890
Non-current liabilities
Borrowings 192 242
Other provisions 37 37
Lease liabilities 8 10,319 9,607
Deferred tax liabilities 2,826 2,714
Total non-current liabilities 13,374 12,600
Total liabilities 20,133 20,490
Net Assets 20,214 5,496
Equity
Called up share capital 10 760 455
Share premium 13,897 787
Share based payment reserve 1,494 1,332
Merger reserve (400) (400)
Retained earnings 4,463 3,322
Total equity 20,214 5,496
The notes on pages 14 to 21 are an integral part of these consolidated interim
financial statements.
The financial statements were approved and authorised for issue by the Board
on 12 September 2022 and signed on its behalf by:
Neil Evans, Director
Company registered number: 13761460
FACILITIES BY ADF PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Share Based Payment Reserve
£'000
Share Capital Share Premium Merger Reserve Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000
Note
Balance at 01 January 2021 - - - - 2,930 2,930
Comprehensive Income
Profit for the year - - - - 1,305 1,305
Transactions with owners
Share for share exchange 400 - - 7,946 - 8,346
Group restructuring - - - (8,346) - (8,346)
Issue of share capital 10 55 787 - - - 842
Share based payment charge - - 1,332 - - 1,332
Dividends - - - - (913) (913)
Balance at 31 December 2021 (audited) 455 787 1,332 (400) 3,322 5,496
Balance at 01 January 2022 455 787 1,332 (400) 3,322 5,496
Comprehensive Income
Profit for the year - - - - 1,141 1,141
Transactions with owners
Issue of share capital 10 305 14,699 - - - 15,004
Share based payment charge - (133) 162 - - 29
Fees in relation to share issues - (1,456) - - - (1,456)
Balance at 30 June 2022 (unaudited) 760 13,897 1,494 (400) 4,463 20,214
The notes on pages 14 to 21 are an integral part of these consolidated interim
financial statements.
FACILITIES BY ADF PLC
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Note Six months ended Six months ended
30 June 2022 (unaudited) £'000 30 June 2021 (unaudited) £'000
Cash flows from operating activities
Profit before taxation from continuing activities 1,253 2,827
Adjustments for non-cash/non-operating items:
Depreciation of property, plant and equipment 7 226 177
Amortisation of right-of-use assets 8 867 719
Loss on disposal of property, plant and equipment and right-of-use assets 11 10
Movement in provision 327
Share based payment charge 29 -
Finance expense 284 117
2,670 4,177
(Increase) in trade and other receivables (1,173) (544)
(Decrease)/increase in trade and other payables (1,494) 878
Cash from operations 3 4,511
Corporation tax received - (87)
Net cash generated from operating activities 3 4,424
Cash flows from investing activities
Purchase of property, plant and equipment 7 (1,146) (297)
Purchase of right-of-use assets (240) (401)
Net cash used in investing activities (1,386) (698)
Cash flows from financing activities
Proceeds from issue of shares 13,548 -
Repayment of borrowings (50) (487)
Cash movements on lease liabilities 8 (836) (927)
Interest paid on lease liabilities 8 (280) (108)
Other interest paid (4) (9)
Dividends paid - (383)
Net cash used in financing activities 12,378 (1,914)
Net increase in cash and cash equivalents 10,995 1,812
Cash and cash equivalents at beginning of period 4,987 1,254
Cash and cash equivalents at end of period 15,982 3,066
The notes on pages 14 to 21 are an integral part of these consolidated interim
financial statements.
FACILITIES BY ADF PLC
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2022
1 General Information
The principal activity of Facilities by ADF Plc (the "Company") and its
subsidiaries (together, the "Group") is the supply of mobile facilities for
television and film productions.
The Company 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.
2 Summary of significant accounting policies
2.1 Basis of preparation
The unaudited interim financial information presents the financial results of
the Group for the six-month period to 30 June 2022. This financial information
has been prepared in accordance with UK-adopted International Accounting
Standards and includes a fair review of the information required. They are
presented on a condensed basis. All values are rounded to the nearest thousand
(£'000) except where otherwise indicated.
The financial information presented in this interim financial report for the
period ended 30 June 2022 does not constitute statutory accounts, within the
meaning of section 434 of Companies Act 2006. These interim financial
statements do not include all of the information required for a complete set
of financial statements prepared in accordance with IFRS Standards. However,
selected explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the Group's
financial position and performance since the last annual consolidated
financial statements.
The Annual Report and Financial Statements for the year ending 31 December
2021 have been filed with the Registrar of Companies. The Independent
Auditor's Report on the Annual Report and Financial Statement ended 31
December 2021 was Unqualified.
2.2 Accounting policies
The accounting policies are consistent with those followed in the preparation
of the Annual Report and Financial Statements for the year ending 31 December
2021, which are filed with the Registrar of Companies.
2.3 Going concern
The interim 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 interim 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.
Furthermore, the Directors have considered the ongoing impact of the conflict
in Ukraine and current macro-economic factors on the Group's forecast
cashflows and liabilities, concluding that these have no material impact on
the Group due to the nature of its operations.
2.4 Critical accounting judgements and estimates
The preparation of the interim financial information requires the use of
certain critical accounting estimates. It also requires management to exercise
judgement and use assumptions in applying the Group's accounting policies. The
resulting accounting estimates calculated using these judgements and
assumptions will, by definition, seldom equal the related actual results but
are based on historical experience and expectations of future events.
Management believe that the estimates utilised in preparing the interim
financial information are reasonable and prudent.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions.
The judgements and key sources of estimation uncertainty that have a
significant effect on the amounts recognised in the interim financial
information are consistent with those followed in the preparation of the
Annual Report and Financial Statements for the year ending 31 December 2021
which are filed with the Registrar of Companies.
3 Revenue from contracts with customers
All of the Group's revenue was generated from the provision of services in the
UK. 4 customers make up 10% or more of revenue in the period ending 30 June
2022 (2021: 4). Management considers revenue is derived from two business
streams being that of hire of facilities and fuel by ADF.
Revenue from customers
Six months ended Six months ended
30 June 2022 (unaudited) £'000 30 June 2021 (unaudited) £'000
Hire of facilities
Customer 1 2,431 2,352
Customer 2 2,614 1,864
Customer 3 234 1,852
Customer 4 702 1,345
Customer 5 952 926
Customer 6 2,246 20
Customer 7 1,449 282
All other customers 1,902 2,777
Fuel by ADF 90 118
12,620 11,536
Timing of transfer of goods or services Six months ended Six months ended
30 June 2022 (unaudited) £'000 30 June 2021 (unaudited) £'000
Services transferred over time 12,530 11,418
At a point in time 90 118
12,620 11,536
4 Other operating income
Six months ended Six months ended
30 June 2022 (unaudited) £'000 30 June 2021 (unaudited) £'000
Grants received - 25
- 25
The Group received government grants as part of initiatives to provide
financial support as a result of the COVID-19 pandemic. There are no future
costs in respect of these grants which were received solely as compensation
for the impact of the pandemic during the period.
5 Segmental reporting
The Group has two reporting segments, being the hire of facilities and fuel
cards by ADF. No non-GAAP reporting measures are monitored. Total assets and
liabilities are not provided to the CODM in the Group's internal management
reporting by segment and therefore are not presented below and information on
segments is reported at a gross profit level only. Information about
geographical revenue is disclosed in note 3. All non-current assets are held
in the UK.
Six months ended Six months ended
30 June 2022 (unaudited) £'000 30 June 2021 (unaudited) £'000
Revenue
Hire of facilities 12,530 11,418
Fuel by ADF 90 118
12,620 11,536
Cost of sales profit
Hire of facilities (8,372) (6,301)
Fuel by ADF (82) (105)
(8,454) (6,406)
Gross Profit 4,166 5,130
6 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.
Six months ended Six months ended
30 June 2022 (unaudited) 30 June 2021 (unaudited)
£ £
Profit used in calculating basic diluted EPS 1,142,573 2,220,640
Weighted average number of shares 74,964,087 39,999,999
Diluted weighted average number of shares 80,910,717 46,399,999
Earnings per share 0.0152 0.0555
Diluted earnings per share 0.0141 0.0479
7 Property, plant, and equipment
Plant and machinery Motor vehicles Total
£'000 £'000 £'000
Computer equipment
Hire Fleet £'000
£'000
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
Cost
At 1 January 2022 -126 5,569 492 11 6,198
Additions 17 1,129 - - 1,146
Transfers - - - - -
Disposals - (51) (18) - (69)
At 30 June 2022 143 6,647 474 11 7,275
Depreciation
At 1 January 2022 58 1,951 48 4 2,061
Charge for the year 9 195 21 1 226
Transfers - - - - -
Disposals - (46) (11) - (57)
At 30 June 2022 67 2,100 58 5 2,230
Net book amount
At 31 December 2021 68 3,618 444 7 4,137
At 30 June 2022 76 4,547 416 6 5,045
Depreciation is charged to administrative expenses within the statement of
comprehensive income.
8 Leases
Right-of-use assets
Leasehold Property Motor Leasehold Hire Fleet and Motor Vehicles Total
£'000 £'000 £'000 Equipment £'000
£'000
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
Cost
At 1 January 2022 1,397 137 16,313 22 17,869
Additions - - 2,153 - 2,153
Transfers - - - - -
At 30 June 2022 1,397 137 18,466 22 20,022
Depreciation
At 1 January 2022 840 57 1,871 6 2,774
Charge for the period 74 17 774 2 867
Transfers - - - - -
At 30 June 2022 914 74 2,645 8 3,641
Net book amount
At 31 December 2021 558 80 14,440 16 15,095
At 30 June 2022 484 63 15,820 14 16,381
9 Capital commitments and contingencies
Capital and financial commitments
The Group commits to lease agreements in respect of hire facilities over 6
months in advance, due to the nature of the facilities leased. As at 30 June
2022 CAD Services Limited, a subsidiary of the company, committed to the lease
of Kitsmead, Kitsmead Lane, Longcross KT16 0EF. The expected commencement of
this lease is to start in Q4 2022, with expected rentals of £754,000 per
annum for fifteen years, with a break clause after the first ten years.
Additionally, the Group has committed to new fleet capital expenditure orders
of approximately £7.8 million and £8.2 million for 2022 and 2023,
respectively.
The Group held no other additional capital, financial and or other commitments
at 30 June 2022.
10 Share capital
As at As at
30 June 2022 (unaudited) £'000 31 December 2021
(audited)
£'000
Allotted, called up and fully paid
Ordinary Shares of 1p each (2022: 45.5m; 2021: 40m) 455 400
2 million issued Ordinary Shares of 1p granted to Directors - 20
3.5 million issued Ordinary Shares of 1p in respect of exercised options - 35
30 million Ordinary Shares of 1p each in respect of initial public offering 300 -
0.5 million issued Ordinary Shares of 1p in respect of exercised options 5 -
Ordinary Shares of 1p each 760 455
All classes of shares have full voting, dividends and capital distribution
rights.
On the 5 January 2022 the shares of the Company were 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 Cenkos Securities Plc were granted the conditional right to
subscribe for 1,200,000 new ordinary shares at the Placing Price of 50p at any
time during the three-year period from Admission. The weighted average fair
value of options granted in the year was determined using the Black-Scholes
option pricing model. The Black-Scholes model is considered to apply the most
appropriate valuation method due to the options vesting immediately. The
expected life used in the model has been adjusted, based on management's best
estimate, for the effect of non-transferability, exercise restrictions, and
behavioural considerations. Non-vesting conditions and market conditions are
taken into account when estimating the fair value of the option at grant date.
Inputs to the model included a risk-free rate of 0.8%; expected life of 1.48
years; expected volatility of 50%; and a weighted average share price of 50p.
In respect of the options granted to Cenkos Securities Plc the Group
recognised a charge of £133,352 to Share Premium. The charge was recognised
in Share Premium as the options were granted as part of the fees structure
between the Company and Cenkos Securities Plc detailed in the Placing
Agreement dated 21 December 2021.
10 Share capital (continued)
On 4 April 2022 500,000 new ordinary share were issued in respect of options
exercised. The options exercised were outstanding prior to the Company's
January 2022 IPO, as detailed in the Company's Admission Document, with the
majority having been issued in 2016 as part of the Company's Enterprise
Management Incentive ("EMI") scheme.
No other options were issued, exercised, or forfeited during the period ending
30 June 2022.
11 Post balance sheet events
There have been no material post balance sheet events that would require
disclosure or adjustment to these Interim Financial Statements.
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