REG - React Group PLC - Interim Results & Trading Update
27/05/2025 07:00
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RNS Number : 0898K React Group PLC 27 May 2025
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27 May 2025
REACT Group plc
("REACT", the "Group" or the "Company")
Interim results and trading update
REACT Group plc (AIM: REAT), the leading specialist support services provider
to the FM industry, announces its unaudited interim results for the six-month
period ended 31 March 2025.
The Company's acquisition of 24h Aquaflow Services in October 2024 has
generated a positive contribution to both revenue and EBITDA in the first five
months following consolidation and, as a result, the Group has expanded in the
first half of FY 2025.
Financial highlights
· Revenue increased by 14% to £12.1m (H1 2024: £10.6m) driven by the
recent acquisition of 24hr Aquaflow Services.
o First time five months' revenue contribution from 24hr Aquaflow Services
of £2.8m.
· Repeat or recurring revenue greater than 85% (H1 2024: >85%).
· Gross profit increased by 35% to £3.9m (H1 2024: £2.9m).
· Gross profit margin strengthened by 490 basis points to 32.0% (H1
2024: 27.1%) as the Group benefitted from higher gross margins in 24hr
Aquaflow Services.
· Adjusted EBITDA* increased by 12% to £1.43m (H1 2024: £1.28m).
o First time five months' Adjusted EBITDA contribution from 24hr Aquaflow
Services of £827k.
· Free cash flow of £204k (H1 2024: £923k), after exceptional items
mainly relating to the acquisition of 24hr Aquaflow Services and corporation
tax.
· Cash and cash equivalents as at 31 March 2025 of £2.8m (H1 2024:
£1.5m).
o Net debt of £1.9m as at 31 March 2025 includes £3.2m from the £3.5m new
term loan drawn in the period to fund the acquisition of 24hr Aquaflow
Services
· Basic (loss)/earnings per share of (1.18p) (H1 2024: 0.41p),
reflecting an incremental increase in amortisation and depreciation as a
direct result of the acquisition of 24hr Aquaflow Services.
· Adjusted EBITDA earnings per share of 6.07p (H1 2024: 6.02p).
Operational & strategic highlights
· Robust financial performance despite headwinds - first-half Group
revenue grew 14% to £12.1m, with gross profit up 35% to £3.9m and Adjusted
EBITDA increasing 12% to £1.4m and reflecting the contribution from 24hr
Aquaflow Services acquired in late October 2024.
· Resilient revenue mix - >85% of revenue is recurring or
repeat, providing stability while shifting toward higher-margin services to
support long-term profitability.
· Strategic expansion - the integration of 24hr Aquaflow Services
has strengthened cross-selling opportunities and unlocked new revenue streams,
including a 12-month commercial drainage contract with a major FM-sector
client in London.
· Driving operational efficiencies - the rollout of Project
Sparkle, the Group's digital platform for commercial window cleaning, is
underway. This initiative will streamline processes, enhance customer
interaction, and create new cross-selling opportunities, ultimately improving
operational efficiency and driving scalable revenue growth.
· Navigating market headwinds - rising employer national insurance
and living wage costs are pressuring customers, affecting demand for
specialist cleaning services. While the Group can pass on statutory cost
increases, it has taken a collaborative approach, ensuring fair pricing and
maintaining strong customer partnerships with minimal churn. Meanwhile, 24hr
Aquaflow Services' strong performance has helped mitigate some of these
pressures.
· Effective customer engagement strategy - REACT has proactively
worked with customers to implement fair cost adjustments while ensuring
service continuity. This flexible approach has helped preserve customer
relationships but has had some impact on revenue and profitability.
· Balance sheet strength - £2.8m in cash and cash equivalents,
providing financial stability and ample working capital headroom.
Current trading & outlook
· Despite market challenges, REACT remains focused on mid-market
opportunities, where shorter decision cycles continue to drive cross-selling
and upselling, reinforcing customer retention and long-term value creation.
· Deals that experienced delays in H1 2025 are now progressing,
supporting re-emerging revenue growth which may benefit the second half of the
current financial year.
· While challenges remain in specialist cleaning and soft FM
services, 24hr Aquaflow Service' performance has helped offset some of these
pressures, reinforcing our ability to adapt.
· In light of prevailing sector specific and global economic
pressures extending business decision cycles, particularly for higher value
contracts, the Board is adopting a cautious approach to conversion of new
business in the second half of FY 2025 and results are now expected to be
below market expectations.
· 24hr Aquaflow Services maintains strong momentum, with a steady
flow of new opportunities.
*Adjusted EBITDA represents earnings before separately disclosed acquisition,
impairment of intangibles, share-based payments and other restructuring costs
(as well as before interest, tax, depreciation and amortisation). This is a
non-IFRS measure.
Commenting on the results Shaun Doak, Chief Executive Officer of REACT, said:
"REACT has delivered a robust first-half performance, despite market headwinds
impacting organic growth. Following the acquisition of 24hr Aquaflow Services,
revenue increased 14% to £12.1m, with Adjusted EBITDA up 12%, reflecting the
strength of our recurring revenue base and proactive cost management, while
also enhancing our financial and operational infrastructure to support the
business' continued scaling.
While economic pressures have materially affected some areas, the successful
integration of 24hr Aquaflow Services has been a key growth driver, helping to
offset some of the challenges in specialist cleaning. Looking ahead, we remain
focused on strengthening pipeline momentum and capitalising on mid-market
opportunities, where shorter decision cycles are supporting new business wins.
Investments in Project Sparkle, customer engagement, and service optimisation
continue to enhance efficiency, positioning REACT well for long-term,
sustainable growth despite broader market challenges. The Board is taking a
more cautious approach with respect to the expected outturn for the current
financial year but firmly believes that REACT is well positioned to capitalise
on an improvement in the economy."
Investor Presentation
REACT Group plc announces that Shaun Doak, Chief Executive Officer, Spencer
Dredge, Chief Financial Officer and Mark Braund, Chair, will provide a live
presentation relating to the half year results via Investor Meet Company on 29
May 2025, 12:30 BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
28 May 2025, 09:00 BST, or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet REACT
GROUP PLC via:
https://www.investormeetcompany.com/react-group-plc/register-investor
(https://www.investormeetcompany.com/react-group-plc/register-investor)
Investors who already follow REACT GROUP PLC on the Investor Meet Company
platform will automatically be invited.
For more information:
REACT
Group
Tel: +44 (0) 1283 550 503
Shaun Doak, Chief Executive Officer
Spencer Dredge, Chief Financial Officer
Mark Braund, Chair
Singer Capital Markets
Tel: +44 (0) 207 496 3000
Nominated Adviser & Joint Broker
Philip Davies / Alex Bond / Oliver Platts
Dowgate Capital - Joint
Broker Tel:
+44 (0) 203 903 7715
Nicholas Chambers
IFC Advisory - Financial PR &
IR
Tel: +44 (0) 203 934 6630
Graham Herring / Zach Cohen
About Us:
REACT Group plc is one of the UK's leading support services providers to the
facility management (FM) sector, operating across four key service
propositions:
· LaddersFree, one of the UK's largest commercial window cleaning
businesses, delivering nationwide services.
· Fidelis Contract Services ("Fidelis"), a contract cleaning and
soft facilities maintenance provider focused on long-term client partnerships.
· REACT, specialising in emergency and specialist cleaning
solutions, offering both long-term framework agreements and rapid response
services.
· 24hr Aquaflow Services, a recently acquired commercial drainage
and plumbing business serving clients across London and the South East of
England.
Strategic overview
REACT has delivered a robust first-half performance, navigating a challenging
market with focus and adaptability. Aided by the acquisition of 24hr Aquaflow
Services in October 2024, Group revenue increased 14% to £12.1m, with gross
profit rising 35% to £3.9m and Adjusted EBITDA up 12% to £1.4m, driven by
disciplined execution and the strength of our recurring revenue base, which
now accounts for >85% of total revenues.
Macroeconomic pressures and a record comparative period in H1 2024 have
influenced organic growth, but the successful integration of 24hr Aquaflow
Services has unlocked new revenue streams and expanded cross-selling
opportunities. This includes specialist cleaning projects supporting the
drainage division and a 12-month commercial drainage contract with a major
FM-sector client in London, servicing a landmark location. While challenges
remain in specialist cleaning and soft FM services, 24hr Aquaflow Services'
performance has helped offset some of these pressures, reinforcing the Group's
ability to adapt.
At the same time, sales efforts across the Group have continued with
encouraging success, despite longer decision cycles, particularly for
high-value deals. Each division has achieved notable wins and strengthened
customer relationships.
Alongside operational execution, the Group has continued investing in
financial and infrastructure improvements to support long-term growth. Key
priorities include strengthening the Finance team, advancing Project Sparkle,
and enhancing customer engagement and service delivery.
Additionally, as outlined in our FY 2024 Annual Report & Accounts, the
Group made a strategic decision to exit the periodic deep clean business in
the rail sector following a shift in service expectations. During and
immediately after COVID-19, heightened hygiene requirements drove high-value
contracts, but as standards eased, pricing and margins declined to
unsustainable levels. This exit from this division removed approximately
£1.1m in revenue, which was included in H1 2024 but is now fully absent in H1
2025, impacting year-on-year comparisons. While this affects short-term
results, it strengthens the Group's focus on sustainable, high-margin
opportunities, ensuring resources are deployed where they drive long-term
value.
Sales performance & market dynamics
Despite a slower market and extended decision cycles, particularly for
higher-value deals, sales efforts have continued across all divisions,
yielding solid results.
Soft FM services at Fidelis secured several upsell and cross-sell
opportunities, including two large deals worth approximately £300k annually.
Additionally, Fidelis closed four mid-sized contracts with new customers
totalling around £100k annually and established breakthrough relationships
with two new FM firms focused on void cleaning work in the housing association
sector. The division also successfully navigated multiple long-term contract
renewals, including three material agreements worth approximately £800k
annually.
LaddersFree, the Group's nationwide commercial window cleaning business, has
faced challenges due to market headwinds but has successfully retained
customers impacted by cost pressures by adjusting service specifications and
cleaning frequencies. Sales momentum remains solid, with 45 new customer
acquisitions, predominantly in the SME segment, alongside two national
contracts with well-known brands and 68 incremental new sites onboarded for
existing customers.
REACT's specialist cleaning division experienced a slight slowdown in project
work volumes, though this was offset by 18 new customer acquisitions during
the period. These customers represent a mix of contracted and ad hoc work,
contributing approximately £500k in annualised revenue.
Meanwhile, 24hr Aquaflow Services secured three new FM-sector clients, each
presenting opportunities for significant revenue expansion. One of these
customers has already signed a contract to service 167 sites for 'first-call'
services, expected to generate approximately £100k per year based on
historical trends. Additionally, 24hr Aquaflow Services recently secured a
12-month commercial drainage contract with a major FM-sector client, servicing
a landmark London location. This contract reinforces REACT's ability to
integrate and scale specialist services across its divisions.
The waterfall graph below provides a breakdown of gross profit contribution
between H1 2024 and H1 2025, highlighting the key factors driving changes over
the period.
Operational & strategic execution
Cross-selling and upselling remain central to the Group's strategy,
strengthening customer relationships and driving additional value across all
divisions.
The acquisition of 24hr Aquaflow Services in October 2024 has been a standout
success in this regard, demonstrating REACT's ability to integrate niche
facilities management operators while unlocking new revenue streams.
Beyond integration efforts, the Group has made targeted investments in
financial and operational infrastructure to support continued growth.
Strengthening the Finance team, improving customer engagement, and enhancing
service delivery remain key priorities.
Meanwhile, Project Sparkle, the Group's digital platform for commercial window
cleaning, is actively rolling out. Designed to enhance scalability,
operational efficiency, and customer engagement, the platform will streamline
operations and unlock new service opportunities. Once fully deployed, it will
strengthen revenue growth across the business while improving long-term
service capabilities.
Navigating market challenges
Many of the Group's customers continue to face economic pressures, including
higher retail business rates, increased labour costs, and statutory changes
like higher employer national insurance contributions and an increased living
wage. These factors have created financial constraints, particularly in soft
FM services, affecting demand and profitability.
In response, the Company has worked proactively with customers to establish
fair agreements, allowing it to responsibly pass on statutory cost increases
while maintaining service continuity. This approach helps customers balance
their budgets effectively while ensuring essential operations continue,
reinforcing REACT's role as a trusted partner.
To support customers through these challenges, the Group has adjusted service
levels, including reducing cleaning frequencies where appropriate and, in some
cases, temporarily pausing services to help customers manage costs without
compromising standards. This reduction in activity levels inevitably impacted
the revenues generated from these areas of the Group during the period and is
expected to continue through the second half of the year, and into FY'26. The
strong performance of 24hr Aquaflow Services has helped counteract some of
these pressures, showing resilience in drainage and plumbing operations
despite broader market challenges.
Cash flow, balance sheet & capital allocation
Cash generated from continuing operations totalled £0.7m, after settling
£0.4m in corporation tax, £0.2m in exceptional items (primarily related to
the 24hr Aquaflow Services acquisition), and adjusting for non-cash items,
depreciation, and amortisation of £1.3m.
Cash flows from financing activities reached £4.1m, which includes drawing a
new 4-year £3.5m bank loan and raising £1.1m from a share placing, offset by
loan repayments of £0.3m and interest and lease liability payments of £0.1m
each.
At period-end, cash and cash equivalents stood at £2.8m, reinforcing the
Group's strong liquidity position. Free cash flow for the period was £0.2m,
after settling £0.2m in exceptional items, £0.4m in corporation taxes, and
£0.3m in capital investments.
At period-end, net debt £1.9m is made up of bank debt £3.9m, finance leases
£0.8m and cash and cash equivalents £2.8m. Bank debt includes £3.2m from
the £3.5m new term loan drawn in the period to fund the acquisition of 24hr
Aquaflow Services.
People & talent strategy
Investing in our people, technology, and operational foundations remains
central to our long-term growth strategy. Strengthened financial and
management reporting has improved decision-making, while tailored training
programs continue to develop internal talent and enhance performance.
The Group has also expanded its sales and marketing capabilities, making
targeted investments in business development that will drive future growth.
The Board extends its sincere appreciation to all employees for their
dedication, professionalism, and contributions to REACT's success.
Outlook & strategic direction
The Board is mindful of the difficult operating environment with rising costs,
inflationary pressures, and evolving regulations affecting businesses across
the FM sector. Despite these challenges, REACT has demonstrated resilience,
underpinned by strong recurring revenues and a customer-centric approach that
fosters long-term partnerships.
Encouragingly, demand for integrated service solutions is growing, with
mid-market opportunities offering shorter decision cycles and driving new
contract wins, particularly through cross-selling and upselling strategies.
The successful integration of 24hr Aquaflow Services has strengthened the
Group's capabilities, unlocking new revenue streams and reinforcing its
position as a trusted provider.
Looking ahead, the Board remains confident in its ability to navigate market
challenges. Strategic investments in operational efficiencies, digital
transformation, and customer engagement including the rollout of Project
Sparkle will enhance service delivery and support future growth. As conditions
improve, REACT is well-positioned to accelerate growth, leveraging our
expanded capabilities to deliver sustainable, long-term value for customers
and shareholders alike.
The Board is taking a more cautious approach with respect to the expected
outturn for the current financial year but firmly believes that REACT is well
positioned to capitalise on an improvement in the economy.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 March 2025
Unaudited Unaudited Audited
6 months ended 31 March 2025 6 months ended 31 March 2024 Year ended
30 September 2024
Note £'000 £'000 £'000
Continuing Operations
Revenue 12,083 10,566 20,749
Cost of Sales (8,222) (7,698) (15,024)
Gross Profit 3,861 2,868 5,725
Administrative expenses (3,977) (2,560) (5,438)
Adjusted EBITDA* 1,433 1,281 2,410
Depreciation (193) (77) (138)
Amortisation (1,060) (821) (1,643)
Exceptional items (220) (56) (253)
Share-based payments (76) (19) (89)
Operating (loss)/profit (116) 308 287
Finance cost (109) (78) (131)
Taxation (55) (143) (138)
(Loss)/profit for the period (280) 87 18
Other comprehensive Income - - -
(Loss)/profit for the financial period attributable to equity holders of the (280) 87 18
company
Basic, diluted earnings and adjusted EBITDA per share 4
Basic (loss)/earnings per share (1.18)p 0.41p 0.08p
Diluted (loss)/earnings per share (1.18)p 0.37p 0.08p
Adjusted basic EBITDA per share 6.07p 6.02p 11.18p
Adjusted diluted EBITDA earnings per share 5.53p 5.50p 10.22p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2025
Unaudited Unaudited Audited
As at 31 As at 31 March 2024 As at 30
March September 2024
2025
Assets £'000 £'000 £'000
Non-current assets
Intangibles - Goodwill 9,921 5,533 5,446
Intangibles - Other 3,635 3,216 2,394
Property, plant and equipment 923 237 427
Right-of-use assets 793 56 95
Deferred tax asset 56 143 58
15,328 9,185 8,420
Current assets
Stock 3 3 3
Trade and other receivables 4,825 4,660 3,720
Cash and cash equivalents 2,830 1,518 1,778
7,658 6,181 5,501
Total assets 22,986 15,366 13,921
Equity
Shareholders' Equity
Called-up equity share capital 2,955 2,669 2,694
Share premium account 1,259 10,915 10
Reverse acquisition reserve (5,726) (5,726) (5,726)
Capital redemption reserve - 3,337 -
Merger relief reserve 1,328 1,328 1,328
Share based payments 290 144 214
Accumulated surplus/(deficit) 9,862 (4,036) 10,142
Total Equity 9,968 8,631 8,662
Liabilities
Current liabilities
Trade and other payables 3,460 3,679 3,240
Loans and other borrowings 1,182 188 235
Lease liabilities within one year 676 30 48
Deferred consideration 953 907 -
Corporation tax 944 541 659
7,215 5,345 4,182
Non-current liabilities
Loans and other borrowings 2,739 585 452
Lease liabilities after one year 143 23 49
Deferred consideration 1,907 - -
Deferred tax liability 1,014 782 576
5,803 1,390 1,077
Total liabilities 13,018 6,735 5,259
Total Liabilities and Equity 22,986 15,366 13,921
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 March 2025
Unaudited Unaudited Audited
6 months ended 6 months ended Year
31 March 2025 31 March 2024 ended
30 September 2024
£'000 £'000 £'000
Net cash inflow from operations 667 1,147 2,788
Cash flows from financing activities
Proceeds of share issue 1,115 30 60
Expenses of share issue (105) - -
Lease liability payments (77) (26) (42)
Bank Loans 3,218 (80) (138)
Interest paid (109) (78) (113)
Net cash generated/(outflow) from financing 4,042 (154) (233)
activities
Cash flows from investing activities
Capital expenditure (277) (120) (410)
Acquisition of subsidiary, net of cash acquired (3,380) (1,023) (2,007)
Net cash outflow from investing activities (3,657) (1,143) (2,417)
Net increase/(decrease) in cash, cash 1,052 (150) 138
equivalents and overdrafts
Cash, cash equivalents and overdrafts at 1,778 1,640 1,640
beginning of period
Cash, cash equivalents and overdrafts at end of period 2,830 1,490 1,778
Analysis of cash, cash equivalents and overdrafts:
Cash at bank and in hand 2,830 1,518 1,778
Overdrafts - (28) -
2,830 1,490 1,778
Reconciliation of profit for the period to cash outflow from operations
Unaudited Unaudited Audited
6 months 6 months ended Year
ended 31 March 2024 ended
31 March 30 September 2024
2025
£'000 £'000 £'000
(Loss)/profit for the period (280) 87 18
Decrease in stocks - 4 4
Increase in receivables 127 (254) 741
Increase in payables (234) 181 (105)
Depreciation and amortisation charges 1,253 898 1,781
Finance costs 109 78 131
Tax charge 55 143 138
Share based payment 76 19 89
Tax paid (439) (9) (9)
Net cash inflow from operations 667 1,147 2,788
Consolidated Statement of Changes in Equity
For the six months ended 31 March 2025
Share Capital Share Merger Relief Capital Reverse Share Based Payments Accumulated surplus/(deficit) Total Equity
Premium Reserve Redemption Acquisition Reserve
Reserve Reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 October 2024 2,694 10 1,328 - (5,726) 214 10,142 8,662
Issue of shares 261 1,249 - - - - - 1,510
Share based payments - - - - - 76 - 76
Loss for the period - - - - - - (280) (280)
At 31 March 2025 2,955 1,259 1,328 - (5,726) 290 9,862 9,968
At 1 October 2023 2,644 10,910 1,328 3,337 (5,726) 125 (4,123) 8,495
Issue of shares 25 5 - - - - - 30
Share based payments - - - - - 19 - 19
Profit for the period - - - - - - 87 87
At 31 March 2024 2,669 10,915 1,328 3,337 (5,726) 144 (4,036) 8,631
As 1 October 2023 2,644 10,910 1,328 3,337 (5,726) 125 (4,123) 8,495
Issue of shares 50 10 - - - - - 60
Share based payments - - - - - 89 - 89
Capital reduction - (10,910) (3,337) 14,247 -
Profit for the period - - - - - - 18 18
At 30 September 2024 2,694 10 1,328 - (5,726) 214 10,142 8,662
Notes to the interim financial statements
1. Basis of preparation
These consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS") as
adopted by the United Kingdom and on a historical basis, using the accounting
policies which are consistent with those set out in the Group's annual report
and accounts for the year ended 30 September 2024. The interim financial
information for the six months ended 31 March 2025, which complies with IAS 34
'Interim Financial Reporting' were approved by the Board of Directors on 26
May 2025.
The unaudited interim financial information for the six months ended 31 March
2025 does not constitute statutory accounts within the meaning of Section 435
of the Companies Act 2006. The comparative figures for the year ended 30
September 2024 are extracted from the statutory financial statements which
have been filed with the Registrar of Companies and contain an unqualified
audit report and did not contain statements under Section 498 to 502 of the
Companies Act 2006. As disclosed in note 4, for the purposes of calculating
earnings per share, these interim accounts and comparative periods are
presented on the basis that the share consolidation was effective for all
reporting periods.
2. Segmental Reporting
In the opinion of the Directors, the Group has one class of business, being
that of specialist cleaning and decontamination services. Although the Group
operates in only one geographic segment, which is the UK, it has also analysed
the sources of its business into the segments of Contract Maintenance,
Contract Reactive, Ad Hoc work and the Group overhead.
Unaudited 6 months ended
31-Mar-25
Contract Maintenance Contract Reactive Ad Hoc Work Plc/Holdings Total
£'000 £'000 £'000 £'000 £'000
Revenue 8,524 1,928 1,631 - 12,083
Cost of sales (5,316) (1,004) (1,117) - (7,437)
Direct costs (498) (170) (117) (785)
Gross profit 2,710 754 397 - 3,861
Administrative Expenses (1,495) (433) (260) (1,789) (3,977)
Operating (Loss)/profit 1,215 321 137 (1,789) (116)
1,367 367 147 (448) 1,433
Adjusted EBITDA
Total Assets 5,804 1,620 900 14,662 22,986
Total Liabilities (3,672) (856) (654) (7,836) (13,018)
Unaudited 6 months ended
31-Mar-24
Contract Maintenance Contract Reactive Ad Hoc Work Plc/Holdings Total
£'000 £'000 £'000 £'000 £'000
Revenue 8,031 1,439 1,096 - 10,566
Cost of sales (5,511) (886) (778) - (7,175)
Direct costs (267) (215) (41) - (523)
Gross profit 2,253 338 277 - 2,868
Administrative Expenses (914) (201) (164) (1,281) (2,560)
Operating profit/(Loss) 1,339 137 113 (1,281) 308
1,384 144 121 (368) 1,281
Adjusted EBITDA
4,846 976 770 8,774 15,366
Total Assets
(3,193) (442) (425) (2,675) (6,735)
Total Liabilities
Audited 12 months ended
30-Sep-24
Contract Contract Ad Hoc Plc/Holdings Total
Maintenance Reactive Work
£'000 £'000 £'000 £'000 £'000
Revenue 15,450 2,629 2,670 - 20,749
Cost of sales (10,297) (1,899) (1,818) - (14,014)
Direct costs (699) (156) (155) - (1,010)
Gross profit 4,454 574 697 - 5,725
Administrative Expenses (1,994) (330) (409) (2,705) (5,438)
Operating Profit/(Loss) 2,460 244 288 (2,705) 287
Adjusted EBITDA 2,575 278 322 (765) 2,410
Total Assets 4,079 441 661 8,740 13,921
Total Liabilities (3,061) (286) (450) (1,462) (5,259)
3. Business combinations
On 25 October 2024, the Group acquired 100% of the issued share capital and
voting rights of 24hr Aquaflow Services Limited ('24hr Aquaflow Services'), a
successful commercial drainage and plumbing business headquartered in Essex
providing services to customers based in London and the South East of
England. The acquisition is expected to be earnings enhancing and accretive,
and along with broadening the Groups service offering as well as enlarging the
Groups client base, we anticipate the combination will enable cross selling of
wider group services.
24 hr Aquaflow Services was acquired for an initial consideration of £5.08m,
payable as £4.1m in cash and £0.5m through the issue of new ordinary shares
as equity consideration and deferred consideration of 0.48m. A further £2.38m
of contingent consideration is payable subject to 24hr Aquaflow Services
meeting certain performance conditions over a two year earn out period. The
acquisition has a total capped consideration of £7.5m should the performance
conditions be fully met.
The fair value of the acquired customer list and customer contracts has been
assessed as at the point of acquisition. The fair value of the contingent
consideration arrangement was estimated calculating the present value of the
future expected cash flows.
Acquisition costs of £0.2m are not included as part of the consideration
transferred and are recognised as an expense in the Consolidated Statement of
Comprehensive Income.
a) Subsidiaries acquired
Name 24hr Aquaflow Services Limited
Principal activity Commercial Drainage and Plumbing
Date of acquisition 25 October 2024
Proportion of voting equity interests Acquired 100%
Consideration £7.476m
b) Consideration £'000
Cash 4,116
Equity issued 500
Deferred consideration arrangement (included in Other Creditors) 2,860
Total consideration transferred 7,476
c) Assets and liabilities recognised on the date of acquisition £'000
Non-current assets 3,291
Current assets 1,968
Non-current liabilities (1,725)
Current liabilities (533)
Net assets acquired 3,001
d) Goodwill arising on acquisition £'000
Consideration transferred 7,476
Fair value of identifiable net assets acquired (3,001)
Goodwill acquired 4,475
e) Net cash outflow on acquisition £'000
Consideration paid in cash 4,116
Less: cash balances acquired (736)
3,380
4. Earnings per Share (basic and adjusted)
The calculations of earnings per share (basic and adjusted) are based on the
net profit/(loss) and adjusted EBITDA per share before; interest, tax,
depreciation, amortisation of acquired intangible assets, exceptional items
and share-based payments. Aligned to IFRS reporting standards, the earnings
per share calculation is based on the new capital structure post the 50:1
share consolidation, the effective date of the consolidation was 2 April
2024. The comparative periods earnings per share are also based on the new
capital structure.
Unaudited Unaudited Audited
6 months 6 months ended Year
ended 31 March 2024 ended
31 March 30 September 2024
2025
£'000 £'000 £'000
(Loss)/profit for the financial period (280) 87 18
Finance cost 109 78 131
Taxation 55 143 138
Operating (loss)/profit (116) 308 287
Adjustments: 193 77 138
Depreciation
Amortisation 1,060 821 1,643
Exceptionals 220 56 253
Share based payments 76 19 89
Adjusted EBITDA 1,433 1,281 2,410
Number Number Number
Weighted average shares in issue for basic earnings per share 23,619,251 21,264,446 21,551,761
Weighted average dilutive share options and warrants 2,312,823 2,041,701 2,042,097
Average number of shares used for dilutive earnings per share 25,932,074 23,306,147 23,593,858
pence pence pence
Basic (loss)/profit per share (1.18)p 0.41p 0.08p
Diluted (loss)/profit per share (1.18)p 0.37p 0.08p
Adjusted EBITDA earnings per share 6.07p 6.02p 11.18p
Adjusted diluted EBITDA earnings per share 5.53p 5.50p 10.22p
Copies of this Interim Report are available on the Company's website
www.reactsc.co.uk/react-group-plc
(https://protect.checkpoint.com/v2/___http:/www.reactsc.co.uk/react-group-plc___.bXQtcHJvZC1jcC1ldXcyLTE6cmVhY3RzYzpjOm86NDY0ZGU2YTdkZTkxNDNmNDUwYmJiZjI3NWQ5OTk2MjE6Njo0MmMyOmZjZmY4Y2ZiYmYyODlhMjQ0MTAwNzkwMzBlOWZkYjM0MTJjOTQ1Y2Q5ZWI2NTE0M2EzNzEzMTg5YmE4YzMwZWE6cDpUOk4)
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