REG - Nexus Infrastructure - Interim Results
08/06/2022 07:00
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RNS Number : 0618O Nexus Infrastructure PLC 08 June 2022
8 June 2022
Nexus Infrastructure plc ("Nexus" or the "Group")
Interim results for the six months ended 31 March 2022
Nexus, a leading enabler of energy transition by delivering sustainable
infrastructure, today announces its unaudited interim results for the six
months ended 31 March 2022.
Mike Morris, Chief Executive of Nexus, commented:
"I am pleased with the excellent progress made in the first half of the year
pursuing our strategy in multi-utilities, energy transition and civil
engineering. TriConnex continues to thrive, eSmart Networks is delivering
growth and building its order book and Tamdown is on track with its medium
term plan. Nexus has a strong balance sheet with £23m of cash, plus a growing
order book. Combined with our sought-after services we head into the second
half of the year with positive momentum."
Group financial highlights:
· Group revenue of £80.3m (H1 2021: £63.7m)
· Group operating profit of £1.1m (H1 2021: £1.5m)
· Group order book remains strong with a 6.6% increase since the year
end to £306.7m (H1 2021: £301.6m)
Strong balance sheet & cash generation: delivering returns to
shareholders:
· Net assets growth of 8.5% to £32.7m at 31 March 2022 (31 March 2021:
£30.1m)
· Cash and cash equivalents of £23.1m (31 March 2021: £25.6m), with
net cash of £12.5m (31 March 2021: £13.7m)
· The post period end sale and leaseback of the head office building,
Nexus Park, increased cash and cash equivalents balance by £2.9m and
eliminated Group borrowings, increasing net cash by £13.5m
· Interim dividend increased by 66% to 1.0 pence per share (H1 2021:
0.6 pence per share) reflecting confidence in the second half of the year
Strategic progress:
· Multi-Utilities business TriConnex continues to grow by attracting
new customers and leveraging its differentiation in designing multi-utility
networks
· Energy Transition business eSmart Networks continues to scale up,
with significant growth in the order book and continuing to develop its market
position in the electric vehicle charging, industrial electrification and
renewable infrastructure sectors
· Civil Engineering business Tamdown has grown its order book since the
year end, despite an acceleration of on-site delivery. The management team is
focused on optimising efficiency and protecting margins
Divisional performances:
· TriConnex: solid performance
o Revenues up 2.5% to £25.0m (H1 2021: £24.4m)
o Operating profit up 2.5% to £2.4m (H1 2021: £2.4m)
o Order book up 3.4% by £6.5m to £197.4m (H1 2021: £190.9m)
· eSmart Networks: reflects investment to grow
o Revenues up 208% to £8.6m (H1 2021: £2.8m)
o Operating loss of £1.1m (H1 2021: loss £0.4m)
o Order book up 72.1% to £21.0m (H1 2021: £12.2m)
· Tamdown: turnaround being delivered
o Revenues up 26.8% to £46.7m (H1 2021: £36.8m)
o Operating profit of £1.1m (H1 2021: £0.3m)
o Order book of £88.4m (H1 2021: £98.5m)
Enquiries:
Nexus Infrastructure plc Tel: 01376 559 550
Michael Morris, Chief Executive Officer
Alan Martin, Chief Financial Officer
Numis Securities Limited Tel: 0207 260 1200
(Nominated Adviser & Broker)
Oliver Hardy (Nomad)
Heraclis Economides
Ben Stoop
Camarco Tel: 0203 757 4992
(Financial Public Relations)
Ginny Pulbrook
Rosie Driscoll
Notes to Editors:
Nexus is enabling the energy transition by delivering sustainable
infrastructure. The Group's capabilities are:
Multi-Utilities - TriConnex, our multi-utilities business, designs,
installs and connects energy, water, fibre networks and electric vehicle
charging infrastructure on new residential developments. The business offers
end‑to‑end solutions with the goal of being recognised as the UK's leading
independent provider of utility connections to new developments.
Energy Transition - eSmart Networks, the energy transition specialist,
provides public electric vehicle charging, industrial electrification and
renewable energy connections. The business was created to respond to the UK's
need for charging infrastructure as the transition to electric vehicles
gathers pace and has since broadened its services to provide grid connection
solutions and renewable energy infrastructure.
Civil Engineering - Tamdown, our civil engineering business, provides a
range of civil engineering and infrastructure services to the UK housebuilding
and commercial sectors. Services include earthworks, highways, substructures
and basements and installing sustainable drainage systems. It has an
established market-leading position having been in operation for over 40
years.
Business and Financial Review
All of the Group's businesses have successfully grown their revenues in the
period. Profits have improved within TriConnex and Tamdown due to increased
revenues and successful delivery on site, whilst the loss in eSmart Networks
reflects the investment in overheads to sustain the high level of revenue
growth as this business further establishes its position as a market leader in
the UK's energy transition markets. All businesses have successfully secured
work during the period, with the order book standing at £306.7m, an increase
of 6.6% from the year end position.
Group revenue totalled £80.3m (H1 2021: £63.7m), with Group operating profit
of £1.1m (H1 2021: £1.5m). The operating profit for the period was lower
than anticipated due to the loss recorded by eSmart Networks following the
continued and planned investment in overheads to support its high levels of
growth and being impacted by one low margin contract, which is now complete.
The Group's balance sheet remains strong with net assets increasing
year-on-year by 8.5% to £32.7m as at 31 March 2022 (2021: £30.1m). Included
within the net assets balance is cash and cash equivalents of £23.1m (31
March 2021: £25.6m) and net cash, adjusted for borrowings, at 31 March 2022
was £12.5m (31 March 2021: £13.7m). Since the period end the Group has
completed the sale and leaseback of its head office building, Nexus Park. This
transaction has increased the Group's cash and cash equivalents balance by
£2.9m and eliminated the Group's borrowings, increasing net cash by £13.5m.
TriConnex
TriConnex designs, installs and connects energy, water, fibre networks and
electric vehicle charging infrastructure on new residential properties, with
operations in the South East, Midlands and South West of England.
TriConnex's core customer base consists of a mix of large, small and mid-sized
residential developers, who are offered a full multi-utility network service
from concept to connection.
Activity on sites has been high during the period with customers requiring
final connections of utilities to fulfil consumer demand. Housebuilder
customers continue to view their long-term plans positively and award
contracts to TriConnex, resulting in a further increase in the order book.
Revenue for TriConnex increased by 2.5% to £25.0m against a strong prior year
period (H1 2021: £24.4m). Operating profit improved by 2.5% to £2.4m (H1
2021: £2.4m).
TriConnex continues to differentiate itself in the market through its
provision of a full multi-utility connection offering to the residential
sector, coupled with a deep focus on outstanding customer service. The
business continues to be successful in securing orders, with the order book
increasing by 3.4% year-on-year to £197.4m (H1 2021: £190.9m) and up 4.4% in
the first half of the 2022 financial year.
TriConnex continues to assist customers with their energy transitions and
implementation of the Future Homes Standard to ensure that new homes built
from 2025 will produce 75-80% less carbon emissions than homes delivered under
current regulations. A key feature of the Future Homes Standard is expected to
be that no new homes will be able to connect to the gas network from 2025.
TriConnex is already well placed to provide solutions for this and is
assisting customers in designing alternative low-carbon heating sources for
both current and planned developments.
The fundamental growth drivers for the business are positive and the increase
in order book provides visibility of earnings for the future.
eSmart Networks
eSmart Networks, our energy transition business, provides public electric
vehicle charging, industrial electrification and renewable energy connections.
The business was created to respond to the UK's need for charging
infrastructure as the transition to electric vehicles gathers pace and has
since broadened its services to provide grid connection solutions and
renewable energy infrastructure.
eSmart Networks provides a high quality, end-to-end solution of design,
installation and connection of rapid electric vehicle charging infrastructure
for a variety of customers such as charge point network operators, electric
forecourt providers, local authorities, vehicles OEMs, direct B2B and B2C. The
skills and capabilities within the business allow us to provide turnkey
electric vehicle charging solutions for customers, with our ability to control
the timescale and grid connection process making for an accelerated
installation for customers.
eSmart Networks also provides electrical design, installation and grid
connection solutions to the industrial and commercial, renewable energy and
storage sectors. Projects include the provision of electrical infrastructure
for fulfilment centres, food production units and cold storage warehouses.
Revenue for the period grew significantly, with a year-on-year growth of 208%
to £8.6m (H1 2021: £2.8m). The gross margin in the period of 15.9% was
impacted by one low margin contract, which is now complete, and the gross
margin for H2 is expected to revert to the previous rate of approximately 25%.
The gross profit for the period was £1.4m (H1 2021: £0.7m). The business
continued to scale up during the period with additional investment in
resources and a £1.4m increase in overheads in order to support future
revenue growth. The operating loss for the period was £1.1m (H1 2021: loss
£0.4m).
eSmart Networks has been successful during the period in securing contracts in
all three of the sectors that it addresses. The order book of £21.0m as at 31
March 2022 is a 72.1% increase year-on-year (H1 2021: £12.2m) and an increase
of £7.5m during the first half of the financial year. eSmart Networks is well
placed to support the energy transition agenda in the UK and expects continued
momentum and order book growth.
The UK's need for electric vehicle charging infrastructure is significant,
with consumer demand for charging points to fulfil the needs of the increasing
number of electric vehicles, along with support from the UK Government. This,
along with high demand within the industrial and commercial sector for
independent connections providers and renewable connections, is expected to
result in the creation of valuable growth markets. The eSmart Networks team's
proven expertise and skills means that they are well placed to participate and
grow their existing solid position in these high growth markets.
Tamdown
Tamdown provides a range of civil engineering and infrastructure services to
the UK housebuilding sectors, with operations focused on the South-East of
England and London. Tamdown has an established market-leading position, with a
reputation for providing quality services to a broad range of the top UK
housebuilders.
The fundamental market growth drivers for Tamdown are positive since the UK's
housing market has been in a long-term position of structural undersupply as
the number of new houses built has failed to keep pace with the rate of
household formation. This structural undersupply provides us with confidence
that our housebuilding customers will continue to demand our quality services.
Revenue for Tamdown in the period grew year-on-year by 26.8% to a total of
£46.7m (H1 2021: £36.8m). The strong growth is attributed to an acceleration
of activity on the existing order book and low revenues in H1 2021 following
low levels of new contract awards in 2020.
Tamdown's gross margin for the period was 11.0% (H1 2021: 10.1%), with newly
won contracts driving gross margin improvements. The overall margin reflects
old contracts impacted by delays and unproductive working periods, principally
due to Covid-19. The gross margin will continue to show improvement as these
older contracts complete. Gross profit for the period totalled £5.2m (H1
2021: £3.7m) and operating profit for the period totalled £1.1m (H1 2021:
£0.3m).
Tamdown has been active and competitive in the market, winning work from its
extensive client base, leveraging our continued strong relationships and
reputation for quality work. Tamdown has been successful in securing new
business throughout the period, and even with the acceleration of delivery on
site, the order book increased by 3.6% since the year end to £88.4m (H1 2021:
£98.5m).
The operating environment continues to be characterised by significant levels
of input cost inflation, primarily in materials, energy and labour. The
business is committed to taking the necessary actions to protect and maintains
its margins. The backdrop of Government stimulus to counter the housing
supply deficit, alongside order book wins, provides us with confidence that
existing and new customers will continue to demand our services, with
improvements to profitability over the medium term as the turnaround advances.
Dividend and Dividend timetable
Considering these results and our confidence in the expected results for the
financial year, the Board is declaring an interim dividend of 1.0 pence per
share, an increase of 66% over the prior year (H1 2021: 0.6 pence per share).
The Group's dividend policy remains unchanged and the Board expects the
results for the year to be weighted to the second half of the year, with
TriConnex and Tamdown continuing to deliver profits and eSmart Networks to
significantly increase revenue and deliver profits.
The interim dividend will be paid on 15 July 2022 to shareholders on the
register at close of business on 17 June 2022. The shares will go ex-dividend
on 16 June 2022.
Financial Overview
The interim report has been prepared on the basis of the accounting policies
as set out in the Report and Accounts for the year ended 30 September 2021.
Income statement
Group revenue increased 25.9% to £80.3m (H1 2021: £63.7m), with revenue
growth from all of the Group's businesses, particularly eSmart Networks as it
works through the order book, and Tamdown as its turnaround continues with
high levels of activity on site.
Group gross profit was £14.0m (H1 2021: £11.7m), with an overall gross
margin of 17.5% (H1 2021: 18.3%).
The Group's operating profit totalled £1.1m (H1 2021: £1.5m) with positive
contributions by TriConnex and Tamdown, mitigated by a loss recorded by eSmart
Networks due to a low margin contract and the investment in overheads to
sustain future growth. Net finance costs totalled £0.2m (H1 2021: £0.2m)
resulting in profit before tax of £1.0m (H1 2021: £1.3m).
The tax charge for the period was £0.2m (H1 2021: £0.2m) reflecting an
effective tax rate of 23.9% (H1 2021: 17.9%).
The profit after tax for the period totalled £0.7m (H1 2021: £1.1m),
resulting in basic earnings per share for the period of 1.59p (H1 2021:
2.35p).
Balance Sheet and Cash Flow
The Group's balance sheet remains strong with net assets standing at £32.7m
at 31 March 2022 compared to £30.1m at 31 March 2021. Included within the net
assets balance is cash and cash equivalents of £23.1m (31 March 2021:
£25.6m), with net cash, adjusting for borrowings, totalling £12.5m (31 March
2021: £13.7m).
Since the period end, the Group has completed the sale and leaseback of its
head office building, Nexus Park. This transaction has increased the Group's
cash and cash equivalents balance by £2.9m and eliminated the Group's
borrowings, increasing net cash by £13.5m. The disposed of assets were sold
at net book value and the subsequent lease arrangement will result in
increased depreciation and interest expenses.
In line with prior years, cash was utilised in the first half of the year,
with operating activities utilising £4.0m (H1 2021: £4.3m). The Board
expects that working capital will reduce in H2 2022, resulting in operating
cash flows in H2 2022 being positive. Investing activities consumed £0.4m
including investment in operational plant with the prior year expenditure
relating to the construction of the head office building (H1 2021: £4.1m),
financing activities consuming £2.0m (H1 2021: generation £1.9m) including
the dividend payments of £0.6m and loan and lease liability repayments of
£1.4m.
Risks and Uncertainties
The Group is subject to a number of risks and uncertainties as part of its
activities. The Board regularly reviews and considers these and seeks to
ensure that appropriate processes are in place to identify, monitor and
control these risks. The Directors consider that the principal risks and
uncertainties facing the Group include a potential market downturn, inflation
and regulatory changes imposed by the Building Safety Bill and Future Homes
Standard as outlined on pages 50 to 54 of the Report and Accounts for the year
ended 30 September 2021.
Strategic review
In December 2021, we announced that we would explore strategic options to
crystalise shareholder value in eSmart Networks. This process continues, with
the focus on a minority investment in eSmart Networks by a third party. We
will update the market as to the outcome of this review when finalised but are
delighted that, in the meantime, eSmart Networks continues to play a leading
part in the ongoing electrification of the UK.
Summary and Outlook
During the first half of the financial year the Group's performance reflected
strong underlying trading across all businesses. Looking ahead, although there
are currently signs of significant levels of input cost inflation across the
industry, the Group is committed to taking the necessary mitigating actions to
protect and maintain margins.
Nexus continues to be well positioned to support established and new customers
with their Net Zero plans, which is in line with our strategy of enabling the
UK's energy transition by delivering sustainable infrastructure including
electric vehicle charging, industrial electrification and low carbon heating
sources. TriConnex continues its strong performance, eSmart Networks continues
to scale up and is expected to deliver significant revenue growth and deliver
profits during the second half of the year in line with management
expectations. Tamdown is on track to enhance profitability over the medium
term.
The Group's order book is ahead year-on-year and has grown over the past six
months. This, combined with a strong balance sheet and the strength of our
chosen market sectors, gives us confidence for the second half of the year
with trading performance for the full-year in-line with the Board's
expectations.
Mike Morris
Chief Executive Officer
Condensed consolidated statement of comprehensive income
For the six months to 31 March 2022
Unaudited Unaudited Audited
six months to six months to Year ended
31 March 31 March 30 September
2022 2021 2021
Note £'000 £'000 £'000
Revenue 2 80,266 63,737 136,955
Cost of sales (66,226) (52,047) (112,774)
Gross profit 14,040 11,690 24,181
Administrative expenses (12,891) (10,199) (20,155)
Other income 4 - - 133
Operating profit before exceptional items 1,149 1,491 2,893
Exceptional items 5 - - 1,266
Operating profit 1,149 1,491 4,159
Finance income 3 1 -
Finance expense (200) (196) (402)
Profit before taxation 952 1,296 3,757
Taxation 6 (228) (232) (782)
Profit and total comprehensive income for the period attributable to equity 724 1,064 2,975
holders of the parent
Earnings per share (p per share)
Basic 8 1.59 2.35 6.56
Diluted 8 1.56 2.22 6.43
Condensed consolidated statement of financial position
at 31 March 2022
Unaudited Unaudited Audited
six months to six months to Year ended
31 March 31 March 30 September
2022 2021 2021
Note £'000 £'000 £'000
Non-current assets
Property, plant and equipment 19,509 16,946 19,584
Right of use assets 2,048 2,723 2,415
Goodwill 2,361 2,361 2,361
Total non-current assets 23,918 22,030 24,360
Current assets
Inventories 3,080 2,022 2,495
Trade and other receivables 42,942 34,646 38,150
Contract assets 26,820 18,776 21,138
Corporation tax asset 263 468 84
Cash and cash equivalents 23,098 25,624 29,517
Total current assets 96,203 81,536 91,384
Total assets 120,121 103,566 115,744
Current liabilities
Borrowings 9 1,715 2,150 2,076
Trade and other payables 34,112 29,114 33,894
Contract liabilities 40,423 29,107 35,526
Lease liabilities 1,004 1,198 1,090
Total current liabilities 86,129 61,569 72,586
Non-current liabilities
Borrowings 9 8,875 9,767 9,365
Lease liabilities 1,146 1,825 1,499
Deferred tax liabilities 163 278 162
Total non-current liabilities 10,184 11,870 11,026
Total liabilities 87,438 73,439 83,612
Net assets 32,683 30,127 32,132
Equity attributable to equity holders of the Company
Share capital 910 908 908
Share premium account 9,419 9,419 9,419
Retained earnings 22,354 19,800 21,805
Total equity 32,683 30,127 32,132
Condensed consolidated statement of changes in equity
For the six months to 31 March 2022
Share Share Retained Total
capital premium earnings
account
£'000 £'000 £'000 £'000
Equity at 1 October 2020 (Audited) 905 9,419 18,476 28,800
Transactions with owners
Issue of share capital 3 - - 3
Share-based payments - - 260 260
3 - 260 263
Total comprehensive income
Profit and total comprehensive income for the period - - 1,064 1,064
- - 1,064 1,064
Equity at 31 March 2021 (Unaudited) 908 9,419 19,800 30,127
Transactions with owners
Share-based payments - - 366 366
Dividends paid - - (272) (272)
- - 94 94
Total comprehensive income
Profit and total comprehensive income for the period - - 1,911 1,911
- - 1,911 1,911
Equity at 30 September 2021 (Audited) 908 9,419 21,805 32,132
Transactions with owners
Issue of share capital 2 - - 2
Dividends paid - - (637) (637)
Share-based payments - - 462 462
2 (175) (173)
Total comprehensive income
Profit and total comprehensive income for the period - - 724 724
- - 724 724
Equity at 31 March 2022 (Unaudited) 910 9,419 22,354 32,683
Condensed consolidated statement of cash flows
For the six months to 31 March 2022
Unaudited Unaudited Audited
six months six months Year ended
to to 30
31 March 31 March September
2022 2021 2021
£'000 £'000 £'000
Cash flow from operating activities
Profit before tax 952 1,296 3,757
Adjusted by:
Profit on disposal of property, plant and equipment - owned (3) (83) (1,288)
Share-based payments 462 260 626
Finance expense (net) 196 195 402
Loss on disposal of assets measured at FVOCI - 3 -
Depreciation of property, plant and equipment - owned 396 295 492
Depreciation of property, plant and equipment - right of use 466 473 1,110
Operating profit before working capital charges 2,469 2,439 5,099
Working capital adjustments:
(Increase)/decrease in trade and other receivables (4,792) 3,019 (485)
Increase in contract assets (5,682) (6,049) (8,411)
Increase in inventories (585) (838) (1,311)
Increase/(decrease) in trade and other payables 175 (3,164) 1,602
Increase in contract liabilities 4,898 526 6,945
Cash (used in)/generated from operating activities (3,517) (4,067) 3,439
Interest paid (158) (164) (355)
Taxation paid (407) (58) (343)
Net cash flows used in/generated from operating activities (4,082) (4,289) 2,741
Cash flow from investing activities
Purchase of property, plant and equipment - owned (411) (4,303) (7,681)
Proceeds from disposal of property, plant and equipment - owned 40 217 1,902
Proceeds from the disposal of assets measured at FVOCI - - 3
Interest received 4 1 -
Net cash used in investing activities (367) (4,085) (5,776)
Cash flow from financing activities
Dividend payment (637) - (272)
Draw down of term loan - 2,905 3,538
Repayment of term loan (851) (350) (1,459)
Principal elements of lease repayments (484) (675) (1,373)
Net proceeds from the issue of share capital 2 3 3
Net cash generated from financing activities (1,970) 1,883 437
Net change in cash and cash equivalents (6,419) (6,491) (2,598)
Cash and cash equivalents at the beginning of the period 29,517 32,115 32,115
Cash and cash equivalents at the end of the period 23,098 25,624 29,517
Notes to the condensed consolidated financial statements
For the six months to 31 March 2022
1. Basis of preparation and accounting policies
The interim report of the Group for the six months ended 31 March 2022 has
been prepared in accordance with UK-adopted IAS 34 "Interim Financial
Reporting" and the AIM Rules for Companies.
The interim report does not constitute financial statements as defined in
Section 434 of the Companies Act 2006 and is neither audited nor reviewed. It
should be read in conjunction with the Report and Accounts for the year ended
30 September 2021, which is available on request from the Group's registered
office, Nexus Park, Avenue East, Skyline 120, Great Notley, Braintree, Essex,
CM77 7AL, or can be downloaded from the website www.nexus-infrastructure.com.
The comparative information for the financial year ended 30 September 2021
does not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year has been
reported on by the Company's auditor and delivered to the Registrar of
Companies. The report of the auditor was (i) unqualified, (ii) did not include
a reference to any matters which the auditor drew attention by the way of
emphasis without qualifying their report and (iii) did not contain statements
under section 498 (2) or (3) of the Companies Act 2006.
The interim report has been prepared on the basis of the accounting policies
as set out in the Report and Accounts for the year ended 30 September 2021.
In preparing this interim report, the significant estimates and judgements
made by the Directors in applying the Group's accounting policies and
financial risk management objectives were the same as those set out in the
Report and Accounts for the year ended 30 September 2021.
Going concern
In determining the appropriate basis of preparation of the interim report, the
Directors are required to consider whether the Group can continue in
operational existence for the foreseeable future. After making enquiries, the
Directors have a reasonable expectation that the Group has adequate resources
to continue in operational existence for at least 12 months from the date of
this report. Accordingly, they continue to adopt the going concern basis in
preparing the interim report.
Notes to the condensed consolidated financial statements (continued)
For the six months to 31 March 2022
2. Revenue
Revenues from external customers are generated from the supply of services
relating to construction contracts, design, installation and connection of
utility networks and electric vehicle charging and smart energy
infrastructure. Revenue is recognised over time in the following operating
divisions:
Unaudited 31 March 2022
Tamdown TriConnex eSmart Networks Total
£'000 £'000 £'000 £'000
Segment revenue 46,662 24,988 8,616 80,266
Inter-segment revenue - - - -
Revenue from external customers 46,662 24,988 8,616 80,266
Timing of revenue recognition
Over time 46,662 24,988 8,616 80,266
Customer type
Residential 46,662 24,988 - 71,650
Non-residential - - 8,616 8,616
46,662 24,988 8,616 80,266
Unaudited 31 March 2021
Tamdown TriConnex eSmart Networks Total
£'000 £'000 £'000 £'000
Segment revenue 36,806 24,385 2,797 63,988
Inter-segment revenue (250) - (1) (251)
Revenue from external customers 36,556 24,385 2,796 63,737
Timing of revenue recognition
Over time 36,556 24,385 2,796 63,737
Customer type
Residential 35,464 24,385 - 59,849
Non-residential 1,092 - 2,796 3,888
36,556 24,385 2,796 63,737
Audited 30 September 2021
Tamdown TriConnex eSmart Networks Total
£'000 £'000 £'000 £'000
Segment revenue 78,047 50,730 9,009 137,786
Inter-segment revenue (723) - (108) (831)
Revenue from external customers 77,324 50,730 8,901 136,955
Timing of revenue recognition
Over time 77,324 50,730 8,901 136,955
Customer type
Residential 76,233 50,730 - 126,963
Non-residential 1,091 - 8,901 9,992
77,324 50,730 8,901 136,955
Notes to the condensed consolidated financial statements (continued)
For the six months to 31 March 2022
3. Segmental analysis
The Group is organised into the following three operating divisions under the
control of the Executive Board, which is identified as the Chief Operating
Decision Maker as defined under IFRS 8: Operating Segments:
· Tamdown;
· TriConnex; and
· eSmart Networks.
All of the Group's operations are carried out entirely within the UK.
Segment information about the Group's operations is presented below:
Unaudited Unaudited Audited
six months six months Year ended
to to 30
31 March 31 March September
2022 2021 2021
£'000 £'000 £'000
Revenue
Tamdown 46,662 36,806 78,047
TriConnex 24,988 24,385 50,730
eSmart Networks 8,616 2,797 9,009
Inter-company trading - (251) (831)
Total revenue 80,266 63,737 136,955
Gross profit
Tamdown 5,158 3,732 5,994
TriConnex 7,511 7,235 15,665
eSmart Networks 1,371 723 2,522
Total gross profit 14,040 11,690 24,181
Operating profit/(loss)
Tamdown 1,066 324 (642)
TriConnex 2,423 2,364 5,302
eSmart Networks (1,083) (368) 171
Group administrative expenses (1,257) (829) (1,938)
Total operating profit before exceptional items 1,149 1,491 2,893
Exceptional items
Tamdown - - 1,266
Total operating profit 1,149 1,491 4,159
Net finance cost (197) (195) (402)
Profit before tax 952 1,296 3,757
Taxation (228) (232) (782)
Profit and total comprehensive income for the period 724 1,064 2,975
Notes to the condensed consolidated financial statements (continued)
For the six months to 31 March 2022
3. Segmental analysis (continued)
Statement of financial position analysis of operating segments:
Unaudited 31 March 2022
Assets Liabilities Net Assets
£'000 £'000 £'000
Tamdown 42,536 26,606 15,930
TriConnex 29,171 40,408 (11,237)
eSmart Networks 4,166 7,914 (3,748)
Group 21,150 12,510 8,640
Net Cash 23,098 - 23,098
120,121 87,438 32,683
Unaudited 31 March 2021
Assets Liabilities Net Assets
£'000 £'000 £'000
Tamdown 38,445 22,157 16,288
TriConnex 20,075 34,483 (14,408)
eSmart Networks 1,098 3,023 (1,925)
Group 18,324 13,776 4,548
Net Cash 25,624 - 25,624
103,566 73,439 30,127
Audited 30 September 2021
Assets Liabilities Net Assets
£'000 £'000 £'000
Tamdown 36,288 26,184 10,104
TriConnex 25,323 37,071 (11,748)
eSmart Networks 3,590 7,310 (3,720)
Group 21,026 13,047 7,979
Net Cash 29,517 - 29,517
115,744 83,612 32,132
4. Other Income
Unaudited Unaudited Audited
six months to six months to Year ended
31 March 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
- - 133
Research and development expenditure credit
- - 133
Notes to the condensed consolidated financial statements (continued)
For the six months to 31 March 2022
5. Exceptional items
Unaudited Unaudited Audited
six months to six months to Year ended
31 March 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
- - 1,266
Profit on the sale of fixed asset
- - 1,266
Exceptional items in the prior year related to the disposal of Tamdown's
former office building.
6. Taxation
Taxation is recognised based on management's estimate of the weighted average
effective annual tax rate expected for the full financial year. The estimated
effective annual tax rate applied to the pre-tax income for the six months
ended 31 March 2022 is 23.9%.
7. Dividends
Unaudited Unaudited Audited
six months to six months to Year ended 30
31 March 2022 31 March 2021 September 2021
£'000 £'000 £'000
Amounts recognised as distributions to equity holders:
- 272
-
Interim dividend for the year ended 30 September 2021 of 0.6p per share
637 - -
Final dividend for the year ended 30 September 2021 of 1.4p per share
637 - 272
Notes to the condensed consolidated financial statements
For the six months to 31 March 2022 (continued)
8. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
equity shareholders of the Company by the weighted average number of shares in
issue for the period.
Diluted earnings per share is calculated by adjusting the weighted number of
shares in issue for the period to assume conversion of all dilutive potential
shares.
The calculation of the basic and diluted earnings per share is based on the
following data:
Unaudited Unaudited Audited
six months to six months to Year ended
31 March 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
724 1,064 2,975
Profit for the period attributable to equity shareholders
45,435,093 45,292,292 45,346,677
Weighted average number of shares in issue for the year
Effect of dilutive potential ordinary shares:
1,024,980 2,692,034 926,345
Share options
46,460,073 47,984,326 46,273,022
Weighted average number of shares for the purpose of diluted earnings per
share
1.59 2.35 6.56
Basic earnings (p per share)
1.56 2.22 6.43
Diluted earnings (p per share)
9. Borrowings
Unaudited Unaudited Audited
six months to six months to Year ended
31 March 31 March 30 September
2022 2021 2021
£'000 £'000 £'000
1,715 2,150 2,076
Current
8,875 9,767 9,365
Non-current
The Company entered into a £12.0m loan facility with Allied Irish Bank in
December 2015. The loan is secured over the whole of the Company's
undertakings and assets and by way of cross guarantee from other Group
undertakings. The loan carries interest at LIBOR plus 2.25% and is repayable
in instalments of £1.4m per annum with a termination payment in October 2022.
The Company entered into a £10.0m ten-year facility and £5.0m five-year
revolving credit facility with an accordion facility extension of £5.0m with
Allied Irish Bank in August 2019. The loan is secured over the whole of the
Company's undertakings and assets and by way of cross guarantee from other
Group undertakings. The loan carries interest at LIBOR plus up to 2.20% and is
repayable in instalments of £750,000 per annum.
10. Related party transactions
There have been no significant changes in the nature and amount of related
party transactions since the last Report and Accounts as at, and for the year
ended 30 September 2021.
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated in full on consolidation.
Notes to the condensed consolidated financial statements
For the six months to 31 March 2022 (continued)
11. Events after the reporting period
On 1 April 2022, the sale and leaseback transaction of Nexus Park, the Group
head office building, was completed with Dorsel U.K. 4 Limited. The disposal
included the 4.7 acre site and the three story, 35,000 sq ft head office
building that all constitutes Nexus Park. For accounting purposes, the
building has been derecognised, increasing the Group's cash and cash
equivalents balance by £2.7m and eliminating the Group's borrowings,
increasing net cash by £13.5m.
Statement of Directors' responsibilities
The Directors confirm that, to the best of our knowledge:
· the condensed set of financial statements has been prepared in
accordance with UK-adopted IAS 34 " Interim Financial Reporting"; and
· the condensed set of financial statements has been prepared in
accordance with the rules of the London Stock Exchange for companies trading
securities on AIM.
Signed on 7 June 2022 on behalf of the Board
Alan Martin
Mike Morris
Chief Executive Officer Chief Financial Officer
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