REG - Triad Group Plc - Half-year Report <Origin Href="QuoteRef">TRD.L</Origin>

TriadAnnouncement

22/11/2017 07:05

RNS Number : 1037X
Triad Group Plc
22 November 2017
Triad Group Plc 
Half year results for the six months ended 30 September 2017
Chairman's Statement
Financial Highlights
 Revenue for the six months ended 30 September 2017: 14.24m (2016: 14.83m)
 Profit after tax: up to 0.76m (2016: 0.69m)
 Profit from operations: up to 0.74m (2016: 0.68m) 
 Earnings before interest, tax, amortisation and depreciation: up to 0.77m (2016: 0.71m)
 Gross profit as a percentage of revenue: 16.8% (2016: 15.6%) 
Business Review
I am pleased to report another strong performance for the period to 30 September 2017, continuing the unbroken trend of improved results over recent years. Further to the Group's ongoingdrive to strengthen profitability, gross margin as a percentage of revenue has improved to 16.8% (2016: 15.6%) and profit after tax has improved to 0.76m (2016: 0.69m). Revenue has, as expected, decreased from last year to 14.24m (2016: 14.83m). 
The Group continues to be heavily engaged in providing services across the public sector, including to The Ministry of Justice, The Home Office, and Highways England. In the private sector, we continue to support the operations and infrastructure of a global bank and to provide a significant number of resources to a multi-national engineering firm. New work acquired during the period included the development of a digital platform for a national surveying company, the development of a new platform at Department for Transport, and work at Cabinet Office.
The Group has withstood a number of challenging situations during the period. The start of the financial year coincided with Government's implementation of the new Off Payroll Legislation relating to the tax status of contractors working in the public sector. It was pleasing to note that we experienced minimal attrition due to this, although considerable management time and effort was required to steer through an extremely complex and fast-changing environment.
During the period the Group's largest client, a central Government department, initiated a re-procurement exercise across several major programmes of work on which Triad has been significantly engaged. I am delighted to report that Triad has been successful in winning two of these competitions, one a significant contract for the supply of a business analysis service, the other a large contract for the supply of production support services.
The Group's cash position as at 30 September 2017 has decreased from the previous year end to 2.0m (at 31 March 2017: 2.2m) further to two large clients being particularly slow in clearing a backlog of payments. I am pleased to say this situation has now been successfully resolved. There have been no bad debts during the period.
Outlook
Plans to further improve profitability are progressing well. Gross margin remains the key focus, achieved through improvements in daily rates and utilisation levels. Strategies to support this include access to new frameworks, an example being the pan-Governmental Management Consultancy Framework on which Triad has just been awarded a place within the ICT & Digital lot. Other plans include further penetration of the private sector, particularly Financial Services, using our extensive delivery credentials combined with some niche technical expertise around emerging technologies. 
Recruitment of high calibre consultants remains a priority as we continue to develop our services and capabilities to extend the Group's reach, particularly in the private sector.
Our sales pipeline remains healthy. 
Dividend
The Board have declared an interim dividend of 0.5p (2016: nil). See note 4.
Employees
On behalf of the Board I would like to thank our staff for their continued hard work and dedication during the period.
John Rigg
Chairman
21 November 2017


Unaudited condensed consolidated statement of comprehensive income and expense

Note
Unaudited
Six months 
ended 
30 September
2017
'000
Unaudited
Six months 
ended 
30 September
2016
'000
Audited
Year 
ended 
31 March
2017
'000





Revenue

14,237
14,834
30,912





Cost of sales

(11,839)
(12,524)
(25,912)


--------------
--------------
--------------
Gross profit

2,398
2,310
5,000





Administrative expenses

(1,653)
(1,630)
(3,453)


--------------
--------------
--------------





Profit from operations

745
680
1,547





Finance expense
5
(9)
(17)
(31)





Finance income

1
5
5







--------------
--------------
--------------
Profit before tax

737
668
1,521





Tax credit
6
18
24
13







--------------
--------------
--------------
Profit for the period and total comprehensive income attributable to equity holders of the parent

755
692
1,534


--------------
--------------
--------------










Basic earnings per share
7
4.87p
4.57p
10.08p


--------------
--------------
--------------




Diluted earnings per share
7
4.67p
4.38p
9.55p


--------------
--------------
--------------





All amounts relate to continuing activities.


Unaudited condensed consolidated statement of changes in equity





Share 
Capital
Share premium account
Capital redemption reserve
Retained earnings
Total 

'000
'000
'000
'000
'000






At 1 April 2016
151
562
104
1,239
2,056






Profit for the period and total comprehensive income
-
-
-
 
692
692






Issue of shares
1
4
-
-
5






Share-based payments
-
-
-
2
2

--------
--------
--------
--------
--------
At 30 September 2016
152
566
104
1,933
2,755

---------
---------
---------
---------
---------












At 1 April 2017
155
605
104
2,775
3,639






Profit for the period and total comprehensive income
-
-
-
755
755






Dividend paid
-
-
-
(77)
(77)






Issue of shares
-
6
-
-
6






Share-based payments
-
-
-
2
2

--------
--------
--------
--------
--------
At 30 September 2017
155
611
104
3,455
4,325

---------
---------
---------
---------
---------












At 1 April 2016
151
562
104
1.239
2,056






Profit for the year and total comprehensive income
-
-
-
1,534
1,534






Issue of shares
4
43
-
-
47






Share-based payments
-
-
-
2
2







--------
--------
--------
--------
--------
At 31 March 2017
155
605
104
2,775
3,639

---------
---------
---------
---------
---------








Unaudited condensed consolidated statement of financial position

Note
Unaudited
30 September
2017
'000
Unaudited
30 September
2016
'000
Audited
31 March
2017
'000





Non-current assets









Intangible assets

6
11
8
Property, plant and equipment

105
131
134
Deferred tax

379
374
361


--------------
--------------
--------------


490
516
503


--------------
--------------
--------------





Current assets









Trade and other receivables

5,164
5,743
5,051
Cash and cash equivalents

2,001
901
2,248


--------------
--------------
--------------


7,165
6,644
7,299


--------------
--------------
--------------





Total assets

7,655
7,160
7,802





Current liabilities









Trade and other payables

(2,994)
(3,960)
(3,702)
Financial liabilities

-
(6)
(11)
Short term provisions

(285)
(254)
(405)


--------------
--------------
--------------


(3,279)
(4,220)
(4,118)


--------------
--------------
--------------





Non-current liabilities









Financial liabilities

-
(9)
-
Long term provisions

(51)
(176)
(45)


--------------
--------------
--------------


(51)
(185)
(45)


--------------
--------------
--------------





Total liabilities

(3,330)
(4,405)
(4,163)







--------------
--------------
--------------
Net assets

4,325
2,755
3,639


--------------
--------------
--------------





Shareholders' equity









Share capital

155
152
155
Share premium account

611
566
605
Capital redemption reserve

104
104
104
Retained earnings

3,455
1,933
2,775


--------------
--------------
--------------
Total shareholders' equity

4,325
2,755
3,639


--------------
--------------
--------------


Unaudited condensed consolidated statement of cash flows
Note
Unaudited
Six months 
ended 
30 September
2017
'000
Unaudited
Six months 
ended 
30 September
2016
'000
Audited
Year 
ended 
31 March
2017
'000





Profit for the period before taxation

737
668
1,521





Adjustments for:




Depreciation of property, plant and equipment

31
27
60
Amortisation of intangible assets

2
2
5
Interest expense

2
2
4
Share-based payment expense

2
2
2





Changes in working capital









Increase in trade and other receivables

(113)
(1,060)
(367)
(Decrease)/increase in trade and other payables

(708)
464
205
Decrease in provisions

(114)
(121)
(101)


--------------
--------------
--------------
Cash (consumed)/generated by operations

(161)
(16)
1,329





Interest paid

(2)
(2)
(4)
Tax received

-
-
2


--------------
--------------
--------------
Net cash flows from operating activities

(163)
(18)
1,327


--------------
--------------
--------------





Cash flows from investing activities









Purchase of intangible assets

-
-
-
Purchase of property, plant and equipment

(2)
(38)
(74)


--------------
--------------
--------------
Net cash outflows from investing activities

(2)
(38)
(74)


--------------
--------------
--------------
Cash flows from financing activities









Finance lease principal payments

(11)
(3)
(7)
Proceeds of issue of shares

6
5
47
Dividend paid
4
(77)
-
-


--------------
--------------
--------------
Net cash flows from investing activities

(82)
2
40


--------------
--------------
--------------





Net (decrease)/increase in cash and cash equivalents

(247)
(54)
1,293





Cash and cash equivalents at beginning of the period

2,248
955
955


--------------
--------------
--------------
Cash and cash equivalents at end of the period

2,001
901
2,248


--------------
--------------
--------------


Notes to the interim report
1. General information
The interim financial information set out above and overleaf does not constitute statutory accounts and has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. It has been approved by the Board of Directors on 21 November 2017. 
2. Basis of preparation
The comparative figures for the year ended 31 March 2017 are not the Group's statutory accounts for the financial year. Those accounts have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.
These financial statements have been prepared using accounting policies the Group expects to be applicable at 31 March 2018, in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and with the Disclosure and Transparency Rules of the Financial Services Authority, and in accordance with the requirements of IAS 34, Interim Financial Reporting, and with the accounting policies set out in the statutory accounts of Triad Group Plc for the year ended 31 March 2017. 
None of the new standards and amendments that are effective for the first time for periods beginning on or after 1 April 2017 have a material impact on the Group.
The estimates and assumptions applied in the interim financial information were the same as those applied in the last Group statutory accounts for the year ended 31 March 2017.
3. Going Concern
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half year results. 
4. Dividend
The Board have declared a dividend of 0.5p for the period to 30 September 2017 (2016: nil).
The Company will pay the dividend on Friday 5 January 2018 to all shareholders on the register of members of the Company at the close of business on 1 December 2017. The ex-dividend date will be on 30 November 2017.
During the period a final dividend for the year ended 31 March 2017 of 77,000 was paid.


5. Finance expense

Unaudited
Six months 
ended 
30 September
2017
'000
Unaudited
Six months 
ended 
30 September
2016
'000
Audited
Year 
ended 
31 March
2017
'000
Bank interest expense
2
1
3




Other interest expense
-
1
1

--------------
--------------
--------------




Total interest expense
2
2
4




Unwinding of discount on provisions
7
15
27

--------------
--------------
--------------
Total finance expense
9
17
31

--------------
--------------
--------------
6. Tax credit

Unaudited
Six months 
ended 
30 September
2017
'000
Unaudited
Six months 
ended 
30 September
2016
'000
Audited
Year 
ended 
31 March
2017
'000
Current tax



Current tax on profits for the period
-
-
-




Research and development tax credit relating to earlier period
-
-
(2)
Deferred tax







Recognition of previously unrecognised deferred tax asset
(18)
(24)
(11)

--------------
--------------
--------------
Total tax credit for the period
(18)
(24)
(13)

--------------
--------------
--------------


The differences between the actual tax credit for the year and the standard rate of corporation tax in the UK applied to profits for the year are as follows:

Unaudited
Six months 
ended 
30 September
2017
'000
Unaudited
Six months 
ended 
30 September
2016
'000
Audited
Year 
ended 
31 March
2017
'000




Profit before tax
737
668
1,521




Profit before tax multiplied by standard rate of corporation tax in the UK of 19%/20%/20%
140
134
304




Research and development tax credit relating to
-
-
(2)
earlier period







Expenses not deductible for tax purposes
3
-
8




Brought forward losses utilised against taxable profits
-
(134)
-




Recognition of previously unrecognised deferred tax asset on losses 
(161)
(24)
(323)

--------
--------
--------
Tax credit for the period
(18)
(24)
(13)

---------
---------
---------




Deferred tax asset




Unaudited
Six months 
ended 
30 September
2017
'000
Unaudited
Six months 
ended 
30 September
2016
'000
Audited
Year 
ended 
31 March
2017
'000
The movement is deferred tax is as follows:



At beginning of period
361
350
350




Utilisation against taxable profits
(143)
(134)
(312)




Recognition of previously unrecognised deferred tax asset on losses
160
158
342




Increase/(decrease) in relation to timing difference
1
-
(15)




Rate change
-
-
(4)

--------
--------
--------
At end of period
379
374
361

---------
---------
---------




Deferred tax assets have been recognised in respect of tax losses where the Directors believe it is probable that the assets will be recovered. A deferred tax asset amounting to 565,000 (2016: 922,000) has not been recognised in respect of trading losses, which can be carried forward indefinitely.


7. Earnings per ordinary share
Earnings per share have been calculated on the profit for the period divided by the weighted average number of shares in issue during the period based on the following:

Unaudited
30 September
2017
Unaudited 
30 September 
2016
Audited 
31 March 
2017




Profit for the period
755,000
692,000
1,534,000

--------------
--------------
--------------




Average number of shares in issue 
15,507,586
15,153,404
15,219,826




Effect of dilutive options 
656,019
646,181
848,437

--------------
--------------
--------------
Average number of shares in issue plus dilutive options
 
16,163,605
 
15,799,585
 
16,068,263
--------------
--------------
--------------




Basic earnings per share
4.87p
4.57p
10.08p

--------------
--------------
--------------




Diluted earnings per share
4.67p
4.38p
9.55p

--------------
--------------
--------------


8. Financial liabilities

Unaudited
Six months 
ended 
30 September
2017
'000
Unaudited
Six months 
ended 
30 September
2016
'000
Audited
Year 
ended 
31 March
2017
'000
Current







Finance lease obligations
-
7
11

--------------
--------------
--------------
Non Current







Finance lease obligations
-
8
-

--------------
--------------
--------------
9. Related party transactions
The Group rents two of its offices under contracts expiring in 2018. The current annual rents of 395,000 were fixed by independent valuation. JC Rigg, a Director, has notified the Board that he has a 50% beneficial interest in these contracts. The balance owed at the period end was nil (2016: nil). 
10. Statement of the directors' responsibilities
The Board confirms to the best of their knowledge;
 that the condensed consolidated half year financial statements for the six months to 30 September 2017 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU; and
 that the Half Year Report includes a fair review of the information required by sections 4.2.7R and 4.2.8R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the period and their impact on the condensed consolidated half year financial statements; a description of the principal risks and uncertainties for the remainder of the current financial year; and the disclosure requirements in respect of material related party transactions.
By order of the Board
NE Burrows
Company Secretary
21 November 2017
Names of the current Board of Directors can be found on the company website at www.triad.co.uk.

This information is provided by RNS
The company news service from the London Stock Exchange
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