21 Mar 2018 07:00
21 March 2018
Premier Technical Services Group PLC
("PTSG" or the "Group")
Another year of exceptional growth delivering record turnover and profits
Final Results
Premier Technical Services Group PLC ("PTSG" or the "Group"), the niche specialist services provider, announces its final results for the year ended 31 December 2017.
Key highlights
· Group revenue up 35% to £52.9m (2016: £39.2m).
· Strong underlying organic revenue growth of 11%.
· Gross profit up 33% to £27.1m (2016: £20.3m).
· Adjusted operating profit* increased 35% to £10.6m (2016: £7.9m).
· Adjusted profit before tax** up 36% to £10.2m (2016: £7.5m).
· Adjusted eps* up 28% to 9.73p (2016: 7.63p).
· Final dividend increased by 14% to 0.80p (2016: 0.70p).
· Divisional reorganisation unveiled in H2 2017 aligning our business with customers' needs and industry demands has been well received.
· Three acquisitions completed in the year all continue to perform well: Nimbus fully integrated, BEST integration 90% complete, UK Sprinklers Ltd fully integrated and trading 50% ahead of the acquired business with a strong order book and pipeline.
· Renewal rate has increased to 88% coupled with strong performance from the Group sales team.
John Foley, Chairman of Premier Technical Services Group PLC commented
"PTSG delivered a record performance in 2017, driven by strong organic growth and a number of highly successful acquisitions, including the largest acquisition made since the Group's IPO in February 2015. During the year the Group took steps to diversify and reorganise the business, to further strengthen its foundation for future growth. Trading in 2018 has started well. We continue to review a number of acquisition opportunities and the Board is confident that the Group's positive organic revenue and profit momentum will continue throughout the year"
Enquiries:
PTSG | +44 (0)1977 668 771 |
Paul Teasdale, Chief Executive Officer
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Numis Securities | +44 (0)207 260 1000 |
Stuart Skinner / Kevin Cruickshank / Michael Burke |
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Hudson Sandler | +44 (0)207 796 4133 |
Charlie Jack / Hattie O'Reilly |
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*before adjusting items of £8.3m (2016: £4.7m) resulting in a statutory operating profit of £2.4m (2016: £3.1m) and eps of 1.37p (2016: 2.61p)
**before adjusting items of £8.4m (2016: £4.8m) resulting in a statutory profit before tax of £1.8m (2016: £2.6m)
About PTSG - www.ptsg.co.uk
Premier Technical Services Group PLC is the UK's leading provider of façade access and fall arrest equipment services, lightning protection and electrical testing, steeplejack and rope access services and fire solutions.
Operating through four divisions, Access & Safety, Electrical Services, Building Access Specialists and Fire Solutions, the Group provides highly-engineered industrial products and quality services and has a substantial presence in a number of niche markets.
PTSG provides a central information service for its businesses and champions the dissemination of key information and best practice. PTSG unites its constituent businesses under one clear identity, which supports smarter working and delivers top class service to its customers.
Headquartered in Castleford, West Yorkshire, the Group employs more than 600 people across 17 UK sites, who service more than 150,000 buildings across the whole of the UK for over 17,000 customers in a wide range of industries.
The Company is listed on the LSE AIM (PTSG.L)
Chairman's statement
2017 - a summary
2017 was a busy and exciting year for PTSG. I am pleased to report that record levels of turnover, gross profit, adjusted EBITDA and adjusted earnings per share were achieved. The Group extended the scale and range of its service offerings through both further organic growth and by three carefully selected acquisitions, including the largest acquisition made since the Group's IPO in February 2015.In addition the Group refreshed its strategy and reorganised its divisional structure so that we can continue to grow and maximise future value.
Acquisitions
Three acquisitions were completed in 2017.
We purchased the entire issued share capital of Nimbus Lightning Protection Limited in January 2017 for a total consideration of £1.0m which was paid in cash on completion. The acquisition of Brook Edgeley (Industrial Chimneys) Ltd ("BEST") was concluded in July 2017 for an initial cash consideration of £14m which was entirely funded from a successful placing of 12.5m new ordinary shares with institutional investors; £6m of deferred consideration is also payable over 3 years with two-thirds of the payments payable in cash or shares at the Group's discretion. UK Sprinklers Limited was acquired in September 2017 for a total consideration of £2.5m comprising an initial cash payment of £1.3m, two fixed deferred cash payments of £0.1m on the first and second anniversary of completion and a contingent payment of up to £1.0m payable over a three year period dependent on performance and payable in cash or shares at the Group's discretion.
The acquisitions of Nimbus and BEST have confirmed our position as market leader in the UK Lightning Protection sector. BEST's Steeplejack activities have strengthened the activities within our new Building Access Specialists division and the addition of UK Sprinklers has expanded our service offering in our new Fire Solutions division. These acquisitions were made to achieve our objective of sector dominance in our chosen areas of operation, which are those niche specialist service areas where our established operating model can deliver both high margins and industry leading contract renewal rates to a satisfied customer base.
Financial overview of results
Turnover increased by 35% to £52.9m (2016: £39.2m). Gross profit increased by 33% to £27.1m (2016: £20.3m). Adjusted EBITDA increased by 37% to £12.3m (2016: £9.0m) and underlying profit before taxation (before adjusting items of £8.4m) increased by 36% to £10.2m (2016: £7.5m). Adjusting items were principally one off or non trading items including £1.4m of restructuring costs, £3.0m of share option costs and £3.5m of contingent payments in relation to acquisitions. The high level of adjusting items reflects share based remuneration made prior to IPO which are due to reduce in scale in future years, the effect of earn out payments to continuing employees which are treated as remuneration (rather than capital payments) under IFRS 3 and the effects of necessary restructuring arising in particular from the BEST acquisition. The contingent amounts payable are high due to the inclusion of £2m in respect of BEST, although the £6m deferred consideration is paid over three years, under IFRS 3, this has to be recognised over 18 months.
The Board has recommended a final dividend of 0.8 pence per share which together with the interim dividend paid of 0.8 pence is a 14% increase on the dividends paid in respect of 2016. This will be paid to shareholders of the register on 29 June 2018 and the expected payment date is 20 July 2018.
Net debt at 31 December 2017 increased to £18.3m (2016: £13.6m) following payments of £2.3m of cash in relation to acquisition of businesses. The Group's working capital position has necessarily increased due to the very substantial increased scale of the Group's activities at the period end.
The Group's exit turnover run rate was 46% higher than its run rate at the end of 2016. The Group trades very comfortably within its covenants on its established committed medium term facilities with HSBC. The Board remains comfortable with core borrowings of up to 1.75 x adjusted EBITDA at this stage in the Group's development. At 31 December 2017 core borrowings were 1.49x adjusted EBITDA compared to a bank covenant of 2.25x.
Operational highlights
The Group's underlying organic revenue growth rate was a healthy 11% and the Board was pleased with the performance of all three acquired businesses within PTSG. The successful implementation of a new Divisional structure which is explained in the Chief Executive's Review has involved a great deal of thought and hard work by the Group's senior management team and the reaction of our customers to our new approach has been very encouraging.
The Chief Executive's review provides further detail about operational performance but our focus on compliance to a demanding set of safety standards remains foremost in our thoughts and actions. The Board is pleased to report that contract renewal rates in our core maintenance divisions was at 88% during 2017; we believe this is an industry leading contract renewal rate. Gross margins were steady at 51.2% (2016: 51.9%) which provides further proof of margin sustainability as turnover increases.
The new divisional structure was introduced together with the introduction of a national major accounts sales team which identifies and secures multi disciplinary contract opportunities. This team will assist all divisions within the Group to secure organic growth opportunities where a Group approach is beneficial.
Strategy
PTSG was incorporated in November 2006 has now completed 23 acquisitions since inception and more than doubled its turnover and profits since the IPO and admission to AIM in 2015. The Group currently has 16 offices and more than 600 employees and its new divisional structure provides a balanced offering of niche specialist services to customers in the facilities management, construction and property sectors.
The operating model which has worked so well from the start of PTSG in its Access and Safety division can now be seen to work just as effectively in our Electrical Services division where our position as market leader in the Lightning Protection sector has been achieved since our first entrance to this area in December 2010. Our entry to the Fire Services market did not start until 2016 but the similarities in methods of operation with a strict adherence to safety standards are proving to be core values.
We continue to see exciting opportunities for both organic and acquisitive growth for all four divisions. Senior management is focused on achieving both increased operating profitability and cash conversion targets to fund already identified acquisition opportunities.
People
I would like to thank all our employees for their continuing commitment, enthusiasm and hard work.
Outlook
2018 has started well with continuing sales growth and healthy order books. The Board remains confident that the Group's positive revenue and profit momentum will continue in 2018.
John Foley
Chairman
Chief Executive's review
I feel incredibly proud to be the Chief Executive of PTSG, a very special organisation which exists to help our customers to operate in a safe, efficient and compliant manner. We are financially strong and have a trusted brand, committed people, and market-leading positions which we continue to grow. We are, however, not complacent and work hard to make sure that we continue to look firmly forward at those things that will make the biggest difference to the people we serve.
2018 takes PTSG into its second decade of business. The company is now in a stronger position than at any other time in its history. This is clearly illustrated by our turnover of £53m in the last year alone, with a further 200+ industry experts employed to service our rapidly growing customer base.
Now is an appropriate time to reflect on what has brought us to this point and how we will continue to achieve year on year growth and profitability as we cement our name as the UK's leading provider of niche specialist services to the support services, building owners and the construction industries. Anyone who enters into a contract with PTSG finds that we offer unbeatable customer service. Our combination of value for money and uncompromising adherence to quality and safety standards and procedures, coupled with our rapid response to any location in the UK, has secured a contract retention rate of more than 88%.
Something else that gives us a genuine edge on our competitors is the ability to cross-sell our niche specialist services, maximising value for our customers and profit for ourselves. As our business and reputation continue to grow, we are starting to see more opportunities overseas. We have successfully completed lightning protection projects at numerous locations in the Middle East, including at Doha International Airport, and St Bernard's Hospital in Gibraltar.
We are completely focused on improving and extending our services for our 17,000 customers. To equip PTSG for the next phase of our ongoing growth, we have refreshed our strategy and continue to put customers first in all that we do. With the further development of Clarity, our proprietary software system designed to significantly improve the way we do business, we are now at the forefront of today's digital age. All of which is making a huge difference to our stakeholders and customers.
Acquisitions adding value
In July 2016 we acquired UK Dry Risers Ltd. and UK Dry Risers Maintenance Ltd, recognising their valuable offering to the industry and also their worth to us as a business. We were subsequently able to develop that area of PTSG into a fully comprehensive Fire Solutions division. This has since been consolidated with the acquisition of UK Sprinklers Ltd. (UKS) in September 2017. Based in Bury, UKS is a specialist in the installation and maintenance of sprinkler systems. All of these businesses have seen tremendous growth since being integrated into PTSG, with UK Dry Risers Maintenance Ltd. growing by 37% in the six months following acquisition.
After acquiring Nottingham-based Nimbus Lightning Protection Ltd. at the start of 2017 and Brooke Edgeley (BEST), a lightning protection and steeplejack company based in Manchester, we are now the UK's leading provider of lightning protection services and products, with centres of operation throughout the UK.
Established in 1957, BEST was a privately-owned market leading company in lightning protection, specialist earthing, surge protection and steeplejack services.
BEST is a national provider with four office locations in Manchester, Kidderminster, Chelmsford and Wishaw, Scotland with c.160 engineers and staff. It has well established and good relationships with Blue Chip clients including Balfour Beatty, Engie, Jaguar Landrover, Tesco, John Laing and Interserve and over 2,200 other customers.
It is a highly cash generative business, achieving 104% cash conversion in 2016 and has maintained attractive EBIT margins of c.20%, in line with the PTSG group average.
BEST has now been integrated into PTSG's Electrical Services Division, and its previous owners as well as other members of the management team remain in place. We are in the process of making what was a very good business, a great business.
It is clear that carefully targeted acquisitions have proven key to our exponential growth over the past ten-plus years. Working in tandem with the strong organic growth that we continue to experience as a result of our high-value service and repeat business, we have created a robust business model and a powerful formula that pays rewards to our investors.
Reorganisation for further growth
The industry took a new direction in 2017, with a renewed requirement for steadfast compliance to UK safety regulations in all areas, with a specific focus on fire services. Whilst already in a very strong position we have grasped the forces driving the change and our fire solutions business is flourishing as a result.
Events in 2017 reminded everyone in the industry of the need for an unwavering commitment to safety, upholding British Safety Standards to the letter. PTSG has always made this a priority, and our record of setting new standards for safety has brought us a great amount of positive interest from a governance and compliance perspective - yet again in 2017 we were asked to provide national guidance and advice to the wider support services and construction sectors on behalf of leading health and safety professionals and industry media/commentators. We were also awarded a Gold Medal by The Royal Society for the Prevention of Accidents for our ongoing commitment and track record in this important area of our work.
Fire safety must be the foundation upon which all buildings are constructed, with rigorous regular testing and maintenance. It is now integrated as one of our biggest growth areas having seen an unprecedented demand for wet and dry riser and sprinkler services over the past few months. By continuing to keep quality and safety clearly aligned, we will safeguard the users of the buildings we work on and in doing so, substantially expand our business.
Our divisional structure
The demands of the industry have, over the last year, helped us to shape a stronger, more sustainable business that will enable even greater growth. We now offer the following four discrete but complementary business divisions:
Access & Safety
Electrical Services
Building Access Specialists
Fire Solutions
This new and clearer structure allows us to provide a comprehensive, multi-disciplinary service, driving the value we offer and giving our clients a measurable commercial advantage.
Divisional results
Each of our divisions has contributed to the exceptional performance of PTSG in 2017, thanks to our unique operating model and our teams of highly trained experts.
Access & Safety
Safety Testing and Installation, Cradle Maintenance and Installation. As the UK's leading supplier of fall arrest systems and safety testing services, we achieved a turnover of £20.2m in 2017 (2016: £18.9m) - a 38% contribution to the turnover of the Group. Adjusted operating profits increased to £3.2m from £3.1m in 2016 with growth across all segments.
Electrical Services
Lightning Protection, Fixed Wire and PAT Testing, (design, install and maintenance). We achieved a turnover of £20.2m in 2017 (2016: £12.1m) - a 38% contribution to the turnover of the Group. Adjusted operating profits increased from £2.9m in 2016 to £4.7m. We saw good growth across all services and the acquisitions made in 2016 and 2017 showed good progress.
Building Access Specialists
Steeplejack Services, High Level Installations, High Level Remedials, High Level Cleaning. Our products and services enable safe, efficient access to any part of any building. Our team members are experts at working at height and performing a high quality service even in the most inaccessible locations. We employ some of the UK's most talented and safety conscious working at height specialists in the UK. In 2017 we achieved a turnover of £5.4m (2016: £5.8m) - a 10% contribution to the turnover of the Group. Adjusted operating profit was £1.2m (2016: £1.3m).
Fire Solutions
Wet and Dry Risers, Sprinkler Systems, Fire Alarms, Emergency Lighting, Fire Extinguishers (design, install and maintenance). We now offer one of the UK's most comprehensive fire solutions services delivering high quality, safety systems in both residential and commercial settings. Turnover increased from £2.4m in 2016 to £7.1m in 2017 representing 14% of turnover. Adjusted operating profits increased from £0.5m in 2016 to £1.6m in 2017.
Our People
We now have a team of more than 641 talented industry operatives, many of whom have joined us over the last year as a result of our acquisitions and organic growth. It has always been our policy to nurture talent, providing the training and professional development opportunities to make the most of their potential. It is our people who make us what we are.
Our newly formed national business development team is fast becoming one of our many success stories and a prime example of how talent, hard work and ambition have helped us to achieve great success and rapid growth. We have devoted five pages within this annual report to profiling our people.
We gladly place responsibility on the teams' shoulders for creating and implementing a cohesive sales and marketing plan for the business which is aligned to PTSG's business plan. They will build long-term, profitable client relationships with allocated accounts that enable account revenue growth and retention. They will steer and proactively contribute to sales strategy meetings, and is a visible sales team within PTSG - being fully engaged with the national and service area sales channel and a pre-agreed activity calendar.
People-focused, business-minded and constantly looking for ways to improve upon what we do, our people epitomise the PTSG way.
Looking forward to continuing a profitable future
Our reorganisation is complete and we are already building on our previous offering to the support services and construction sectors, with four distinct but complementary divisions. Our original principle was to be the complete provider of engineered solutions recognised as the standard against which all other companies are measured; this remains true more than ten years on, but that provision is now larger and benefits even more customers.
Our divisional results show that we continue to improve upon our performance every year, and in the area of fire solutions, we are experiencing astonishing demand for our services. As ever, people choose PTSG for our incredible customer service and bundled services delivery. However, our ongoing focus on compliance, taking infinite care to safeguard everyone who comes into contact with the buildings we work on,has moved PTSG to the next level.
Our service and performance are given extra weight by our 133 accreditations, including ISO 9001, OHSAS 18001 and ISO 14001, as well as the industry awards we were proud to receive this year - and every year since we began operating in 2007.
Now, more than ever before, the support services and construction industries needs financially robust and reliable service providers that can guarantee a quality end product, provide a rapid response to every call, wherever the location, and are a pleasure to work with - with strong relationships with key industry names. PTSG has proven time and time again it can do all of this for less. We are more cost effective than our competitors, while retaining a good margin. That's a winning formula for our customers and shareholders alike.
We now look ahead to 2018 with great anticipation, and the opportunity to serve a greater diversity of customers.
Paul Teasdale
Chief Executive
Financial review
Summary
2017 was another significant year for PTSG with continued substantial earnings and revenue growth. The acquisition of Nimbus and BEST extended our market dominance in our Electrical Services Division and the acquisition of UK Sprinklers Ltd enhances our offering in the Fire Solutions division. To provide additional financial flexibility we increased the Revolving Credit Facility to £12m and our overdraft to £8m.
Another year of strong earnings and revenue growth
Revenue grew by 35% in 2017 to £52.9m (2016: £39.2m) with 24% from the acquisitions and 11% from pure organic growth. Access and Safety returned another strong performance, with continued growth in revenue and adjusted operating profits. Electrical Services continued to grow well, aided by the acquisitions made in the year, with 14% pure organic growth. Building Access Specialists declined by 6%, but is well positioned for the future. Fire Solutions performed strongly with substantial increases in both revenue and profits. We expect to see the full benefit, from Sprinklers being added to this division's offering, in 2018.
Gross profit increased by 33% to £27.1m (2016: £20.3). The major factor affecting the Group's gross margin performance is the relative mix between installation sales (which have substantially higher material costs) to testing and repair sales. Installation sales were very strong in 2017, especially in Cradle installations, causing the gross margin to fall slightly to 51.2% (2016: 51.9%).
Operating profit before adjusting items grew by 35% to £10.6m (2016: £7.9m). The adjusted operating profit margin was consistent at 20.1% (2016: 20.1%) with overhead leverage and strong cost control mitigating the slight gross margin reduction. The statutory operating profit was £2.4m (2016: £3.1m).
Profit before tax was £1.8m (2016: £2.6m) and is stated after £8.4m (2016: £4.8m) of adjusting items. Adjusting items are either non-recurring or non-trading in nature and comprised £3.0m (2016: £1.9m) in relation to share option costs granted to Directors and employees, contingent payments of £3.6m (2016: £1.9m) associated with acquisitions in accordance with IFRS 3, of which £2.0m related to the acquisition of BEST, amortisation of acquired intangible assets of £0.4m (2016: £0.5m) and restructuring costs of £1.4m (2016: £0.5m). The interest charge and other financing costs were £0.6m (2016: £0.5m). This increase was due to planned increased borrowing levels principally as a result of the cash payments for acquisitions and an increase in finance lease charges in relation to the Group's larger vehicle fleet.
Adjusted earnings per share increased by 28% to 9.73p (2016: 7.63p). £1.5m of dividends were paid during the year and the Board is proposing a final dividend of 0.8p per share. This represents a 14% increase on the 2016 dividends and is in line with our progressive dividend policy. Statutory earnings per share was 1.37p (2016: 2.61p).
Net debt
Net debt at 31 December 2017 was £18.3m (2016: £13.6m). The increase in the reported number followed £4.4m of acquisition related costs, £0.7m property mortgage inherited as part of the BEST acquisition and an increase in working capital due to the substantial increase in the size of the Group. As anticipated the year end figure was negatively impacted by very high installations in the fourth quarter. We have already seen a substantial correction in 2018 and expect to continue making further improvements to net debt and free cash flow throughout the year. Our banking facilities provide the flexibility to manage this volatility.
Trade and other receivables increased by £11.3m to £30.4m with the three acquisitions adding £4.8m. Year end receivables were elevated due to the strong Q4 trading performance. The Carillion liquidation and their outstanding net debt of £0.3m has been fully provided for in the 2017 balance sheet.
We have a long term relationship with our bankers, HSBC, having been a customer for over ten years which enables us to develop our facilities in line with our increasing profitability. The Revolving Credit Facility, taken out in 2015, was increased to £12m during the year to give us additional flexibility for the future, the terms and interest rates remaining unchanged. We continue to trade well within our banking covenants with head room remaining for future growth.
Acquisitions
We acquired two lightning protection businesses in 2017, Nimbus and BEST, for a total consideration of £21m, £6m of which was deferred and is contingent on the continued employment of the vendors for a minimum 18 month period. We also acquired UK Sprinklers Ltd in September for a total consideration of £2.5m, £1.2m of which was deferred and is contingent on the continued employment of the vendors and the achievement of stretching milestone targets.
These acquisitions were funded in accordance with our financial strategy with the Nimbus and Sprinklers acquisitions being funded from our own resources, where as the sizeable acquisition, BEST, was funded by a placing of 12.5m shares at a purchase price of £1.20.
These acquisitions had a significant impact on the closing balance sheet adding £13.8m to goodwill, £1.1m to fixed assets, £1.0m to net current assets and £0.7m to debt.
Outlook
We believe that 2018 will be another year of earnings and revenue growth. We are a well financed group and expect to make improvements to operating cash flow and net debt throughout the year. We believe that the Group remains well placed to deliver on our strategic priorities.
Mark Watford
Finance Director
Consolidated statement of comprehensive income
for the year ended 31 December 2017
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| Year ended 31 December 2017 | Year ended 31 December 2016 | ||||
|
| Before | Adjusting |
| Before | Adjusting |
|
|
| adjusting | items |
| adjusting | items |
|
|
| items |
| Total | items |
| Total |
|
| £ | £ | £ | £ | £ | £ |
Revenue |
| 52,939,183 | - | 52,939,183 | 39,194,766 | - | 39,194,766 |
Cost of sales |
| (25,860,206) | - | (25,860,206) | (18,863,527) | - | (18,863,527) |
Gross profit |
| 27,078,977 | - | 27,078,977 | 20,331,239 | - | 20,331,239 |
Net operating costs |
| (16,435,955) | (8,286,404) | (24,722,359) | (12,474,374) | (4,739,988) | (17,214,362) |
Total operating profit |
| 10,643,022 | (8,286,404) | 2,356,618 | 7,856,865 | (4,739,988) | 3,116,877 |
Finance costs |
| (491,885) | (71,357) | (563,242) | (405,076) | (97,402) | (502,478) |
Profit before taxation |
| 10,151,137 | (8,357,761) | 1,793,376 | 7,451,789 | (4,837,390) | 2,614,399 |
Taxation |
| (733,233) | 270,542 | (462,691) | (730,370) | 415,544 | (314,826) |
Profit attributable to owners of the parent |
| 9,417,904 | (8,087,219) | 1,330,685 | 6,721,419 | (4,421,846) | 2,299,573 |
|
|
|
|
|
|
|
|
Total comprehensive income/(expense) for the year attributable to owners of the parent |
| 9,417,904 | (8,087,219) | 1,330,685 | 6,721,419 | (4,421,846) | 2,299,573 |
|
|
|
|
|
|
|
|
Earnings per share (pence): |
|
|
|
|
|
|
|
Basic and diluted earnings per share |
|
|
| 1.37 |
|
| 2.61 |
Consolidated statement of changes in equity
for the year ended 31 December 2017
|
| Attributable to owners of the parent |
|
| ||||
|
|
| Capital | Share |
|
| Non- |
|
|
| Share | redemption | Premium | Retained |
| controlling | Total |
|
| capital | reserve | Account | earnings | Total | interest | equity |
|
| £ | £ | £ | £ | £ | £ | £ |
Balance at 31 December 2015 |
| 876,447 | 128,573 | - | 7,915,690 | 8,920,710 | 179 | 8,920,889 |
|
|
|
|
|
|
|
|
|
Profit for the year |
| - | - | - | 2,299,573 | 2,299,573 | - | 2,299,573 |
Total comprehensive income |
| - | - | - | 2,299,573 | 2,299,573 | - | 2,299,573 |
Transactions with owners |
|
|
|
|
|
|
|
|
Issue of share capital |
| 7,578 | - | 548,418 | (400,000) | 155,996 | - | 155,996 |
Share based payments charge |
| - | - | - | 1,643,841 | 1,643,841 | - | 1,643,841 |
Share based deferred consideration charge |
| - | - | - | 400,000 | 400,000 | - | 400,000 |
Tax charge relating to share based payments |
| - | - | - | (283,935) | (283,935) | - | (283,935) |
Ordinary dividends paid |
| - | - | - | (1,092,472) | (1,092,472) | - | (1,092,472) |
Transactions with owners |
| 7,578 | - | 548,418 | 267,434 | 823,430 | - | 823,430 |
Balance at 31 December 2016 |
| 884,025 | 128,573 | 548,418 | 10,482,697 | 12,043,713 | 179 | 12,043,892 |
|
|
|
|
|
|
|
|
|
Profit for the year |
| - | - | - | 1,330,685 | 1,330,685 | - | 1,330,685 |
Total comprehensive income |
| - | - | - | 1,330,685 | 1,330,685 | - | 1,330,685 |
Transactions with owners |
|
|
|
|
|
|
|
|
Issue of share capital |
| 161,192 | - | 16,806,567 | (1,160,631) | 15,807,128 | - | 15,807,128 |
Share based payments charge |
| - | - | - | 2,444,433 | 2,444,433 | - | 2,444,433 |
Share based deferred consideration |
| - | - | - | 923,000 | 923,000 | - | 923,000 |
Tax charge relating to share based payments |
| - | - | - | 1,363,109 | 1,363,109 | - | 1,363,109 |
Ordinary dividends paid |
| - | - | - | (1,476,752) | (1,476,752) | - | (1,476,752) |
Transactions with owners |
| 161,192 | - | 16,806,567 | 2,093,159 | 19,060,918 | - | 19,060,918 |
Balance at 31 December 2017 |
| 1,045,217 | 128,573 | 17,354,985 | 13,906,541 | 32,435,316 | 179 | 32,435,495 |
Consolidated balance sheet
as at 31 December 2017
|
| 2017 | 2016 |
|
| £ | £ |
Assets |
|
|
|
Non-current assets |
|
|
|
Intangible assets |
| 26,212,021 | 12,365,481 |
Property, plant and equipment |
| 4,310,058 | 3,195,880 |
Deferred tax asset |
| 1,567,611 | 417,336 |
Total non-current assets |
| 32,089,690 | 15,978,697 |
|
|
|
|
Current assets |
|
|
|
Inventories |
| 1,219,165 | 503,307 |
Trade and other receivables |
| 32,531,384 | 20,303,115 |
Cash at bank and in hand |
| 7,002,025 | 6,543,749 |
Total current assets |
| 40,752,574 | 27,350,171 |
|
|
|
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
| 9,030,829 | 7,231,346 |
Bank overdraft |
| 12,662,910 | 8,560,270 |
Finance leases |
| 736,069 | 767,303 |
Borrowings |
| 52,167 | 25,033 |
Deferred consideration |
| 1,335,432 | 1,053,070 |
Current tax liabilities |
| 839,982 | 296,003 |
Total current liabilities |
| 24,657,389 | 17,933,025 |
Net current assets |
| 16,095,185 | 9,417,146 |
|
|
|
|
Non-current liabilities |
|
|
|
Borrowings |
| 12,661,742 | 10,010,155 |
Loan notes |
| 2,667,563 | 2,596,206 |
Finance leases |
| 420,075 | 745,590 |
Total non-current liabilities |
| 15,749,380 | 13,351,951 |
|
|
|
|
Net assets |
| 32,435,495 | 12,043,892 |
|
|
|
|
Equity attributable to the owners of the parent |
|
|
|
Share capital |
| 1,045,217 | 884,025 |
Capital redemption reserve |
| 128,573 | 128,573 |
Share premium account |
| 17,354,985 | 548,418 |
Retained earnings |
| 13,906,541 | 10,482,697 |
|
| 32,435,316 | 12,043,713 |
Non-controlling interests |
| 179 | 179 |
Total equity |
| 32,435,495 | 12,043,892 |
Consolidated cash flow statement
for the year ended 31 December 2017
|
| 2017 | 2016 |
|
| £ | £ |
Cash flows from operating activities |
|
|
|
Profit after taxation |
| 1,330,685 | 2,299,573 |
Adjustments for: |
|
|
|
Income tax charge |
| 462,691 | 314,826 |
Depreciation |
| 1,683,633 | 1,164,362 |
Amortisation of intangible assets |
| 370,623 | 499,233 |
Profit on disposal of property, plant and equipment |
| (319,299) | (316,134) |
Finance costs |
| 563,242 | 502,478 |
Share based payments |
| 2,998,813 | 1,243,841 |
|
| 7,090,388 | 5,708,179 |
Changes in working capital: |
|
|
|
Increase in inventories |
| (243,705) | (86,399) |
Increase in trade and other receivables |
| (7,462,133) | (6,092,755) |
(Decrease)/increase in trade and other payables |
| (195,864) | 1,038,646 |
Cash (used in)/generated from operations |
| (811,314) | 567,671 |
|
|
|
|
Interest paid |
| (491,885) | (433,272) |
Tax paid |
| (790,890) | (796,812) |
Net cash outflow from operating activities |
| (2,094,089) | (662,413) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Acquisition of businesses |
| (14,993,975) | (1,757,702) |
Purchase of property, plant and equipment |
| (1,368,289) | (766,304) |
Payment of deferred consideration |
| (1,060,000) | (905,159) |
Net proceeds from sale of property, plant and equipment |
| 626,002 | 354,849 |
Net cash outflow from investing activities |
| (16,796,262) | (3,074,316) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from borrowings |
| 1,944,124 | 4,016,347 |
Capital element of finance lease payments |
| (1,028,513) | (1,042,197) |
Issue of shares |
| 15,807,128 | 155,996 |
Dividends paid |
| (1,476,752) | (1,092,472) |
Net cash inflow from financing activities |
| 15,245,987 | 2,037,674 |
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
| (3,644,364) | (1,699,055) |
Cash and cash equivalents at 1 January |
| (2,016,521) | (317,466) |
Cash and cash equivalents at 31 December* |
| (5,660,885) | (2,016,521) |
* cash and cash equivalents comprises cash at bank in hand of £7,002,025 (2016: £6,543,749) less bank overdraft of £12,662,910 (2016: £8,560,270).
Notes to the Final Results
Basis of preparation
The preliminary financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006, for the financial years ended 31 December 2017 and 31 December 2016, but has been derived from those accounts.
These financial statements have been prepared in accordance with the requirements of the AIM Rules, in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"), the IFRS Interpretations Committee's ("IFRSIC") interpretations and with those parts of the Companies Act 2006 as applicable to companies reporting under IFRS, however, this announcement in itself does not contain sufficient information to comply with IFRS. The accounting policies used in preparation of this preliminary announcement have remained unchanged from those set out statutory accounts for the year ended 31 December 2016. They are also consistent with those in the full financial statements which have yet to be published.
Statutory accounts for 2016 have been delivered to the Registrar of Companies and those for the financial year ended 31 December 2017 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts and their opinion was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
Segmental information
Management has determined the operating segments based on the operating reports reviewed by the Board of Directors that are used to assess both performance and strategic decisions. Management has identified that the Board of Directors is the chief operating decision maker in accordance with the requirements of IFRS 8 "Operating segments".
The Board of Directors considers the business to be split into four main types of business generating revenue; Access and Safety, Electrical Services, Building Access Specialists and Fire Solutions.
Following significant growth in the safe access/steeplejack and fire services sectors, two divisions were renamed, Building Access Specialists formerly High level Cleaning and Fire Solutions formerly Training Solutions, with certain service lines moving divisions to better reflect how the Group operates and is managed. The prior year figures have been restated.
Principally, all revenue originates in the UK.
|
|
|
|
|
| 2017 |
|
|
| Building |
|
|
|
| Access | Electrical | Access | Fire |
|
|
| and Safety | Services | Specialists | Solutions | Group | Total |
| £ | £ | £ | £ | £ | £ |
Revenue |
|
|
|
|
|
|
Total revenue | 20,200,519 | 20,163,991 | 5,445,543 | 7,129,130 | - | 52,939,183 |
Total revenue from external customers | 20,200,519 | 20,163,991 | 5,445,543 | 7,129,130 | - | 52,939,183 |
|
|
|
|
|
|
|
Operating profit before adjusting items | 3,184,034 | 4,682,742 | 1,227,390 | 1,580,356 | (31,500) | 10,643,022 |
Restructuring costs | (566,648) | (741,074) | (28,601) | (48,790) | (6,493) | (1,391,606) |
Share options granted to Directors and employees | (2,998,813) | - | - | - | - | (2,998,813) |
Amortisation of intangible asset acquired | (52,333) | (293,290) | (25,000) | - | - | (370,623) |
Contingent payments in relation to acquisitions | (100,000) | (3,425,362) | - | - | - | (3,525,362) |
Segment operating profit | (533,760) | 223,016 | 1,173,789 | 1,531,566 | (37,993) | 2,356,618 |
Net finance cost | (89,433) | (75,482) | (15,951) | (15,780) | (366,596) | (563,242) |
Profit before taxation | (623,193) | 147,534 | 1,157,838 | 1,515,786 | (404,589) | 1,793,376 |
|
|
|
|
|
|
|
Other segmental items |
|
|
|
|
|
|
Segment assets | 22,713,713 | 15,590,383 | 7,419,880 | 6,450,468 | 20,667,820 | 72,842,264 |
Segment liabilities | (4,801,727) | (11,230,228) | (2,058,857) | (1,887,288) | (20,428,669) | (40,406,769) |
Capital expenditure | 906,201 | 791,942 | 163,308 | 172,406 | - | 2,033,857 |
Depreciation | 575,648 | 820,212 | 175,399 | 112,374 | - | 1,683,633 |
Segmental operating profit
The reconciliation of Adjusted EBITDA to statutory operating profit is shown below.
|
|
| Building |
|
|
|
| Access | Electrical | Access | Fire |
|
|
| and Safety | Services | Specialists | Solutions | Group | Total |
| £ | £ | £ | £ | £ | £ |
Adjusted EBITDA | 3,759,682 | 5,502,954 | 1,402,789 | 1,692,730 | (31,500) | 12,326,655 |
Depreciation | (575,648) | (820,212) | (175,399) | (112,374) | - | (1,683,633) |
Operating profit before adjusting items | 3,184,034 | 4,682,742 | 1,227,390 | 1,580,356 | (31,500) | 10,643,022 |
Restructuring costs | (566,648) | (741,074) | (28,601) | (48,790) | (6,493) | (1,391,606) |
Share options granted to Directors and employees | (2,998,813) | - | - | - | - | (2,998,813) |
Amortisation of intangible asset acquired | (52,333) | (293,290) | (25,000) | - | - | (370,623) |
Contingent payments in relation to acquisitions | (100,000) | (3,425,362) | - | - | - | (3,525,362) |
Statutory operating profit | (533,760) | 223,016 | 1,173,789 | 1,531,566 | (37,993) | 2,356,618 |
| 2016 (Restated) | |||||
|
|
| Building |
|
|
|
| Access | Electrical | Access | Fire |
|
|
| and Safety | Services | Specialists | Solutions | Group | Total |
| £ | £ | £ | £ | £ | £ |
Revenue |
|
|
|
|
|
|
Total revenue | 18,869,742 | 12,092,661 | 5,824,652 | 2,407,711 | - | 39,194,766 |
Total revenue from external customers | 18,869,742 | 12,092,661 | 5,824,652 | 2,407,711 | - | 39,194,766 |
|
|
|
|
|
|
|
Operating profit before adjusting items | 3,110,949 | 2,910,574 | 1,333,724 | 502,525 | (907) | 7,856,865 |
Restructuring costs | (235,288) | (178,141) | (78,883) | - | - | (492,312) |
Share options granted to Directors and employees | (1,887,400) | - | - | - | - | (1,887,400) |
Amortisation of intangible asset acquired | (486,733) | - | (12,500) | - | - | (499,233) |
Contingent payments in relation to acquisitions | (100,000) | (360,537) | (840,506) | (560,000) | - | (1,861,043) |
Segment operating profit | 401,528 | 2,371,896 | 401,835 | (57,475) | (907) | 3,116,877 |
Net finance cost | (92,244) | (53,880) | (3,529) | (6,532) | (346,293) | (502,478) |
Profit before taxation | 309,284 | 2,318,016 | 398,306 | (64,007) | (347,200) | 2,614,399 |
|
|
|
|
|
|
|
Other segmental items |
|
|
|
|
|
|
Segment assets | 13,156,447 | 3,733,618 | 2,432,267 | 3,290,354 | 20,716,182 | 43,328,868 |
Segment liabilities | (5,565,181) | (4,462,652) | (2,454,833) | (1,799,085) | (17,003,225) | (31,284,976) |
Capital expenditure | 752,623 | 914,809 | 114,219 | 60,815 | - | 1,842,466 |
Depreciation | 453,821 | 501,810 | 155,375 | 53,356 | - | 1,164,362 |
Segmental operating profit
The reconciliation of Adjusted EBITDA to statutory operating profit is shown below.
|
|
| Building |
|
|
|
| Access | Electrical | Access | Fire |
|
|
| and Safety | Services | Specialists | Solutions | Group | Total |
| £ | £ | £ | £ | £ | £ |
Adjusted EBITDA | 3,564,770 | 3,412,384 | 1,489,099 | 555,881 | (907) | 9,021,227 |
Depreciation | (453,821) | (501,810) | (155,375) | (53,356) | - | (1,164,362) |
Operating profit before adjusting items | 3,110,949 | 2,910,574 | 1,333,724 | 502,525 | (907) | 7,856,865 |
Restructuring costs | (235,288) | (178,141) | (78,883) | - | - | (492,312) |
Share options granted to Directors and employees | (1,887,400) | - | - | - | - | (1,887,400) |
Amortisation of intangible asset acquired | (486,733) | - | (12,500) | - | - | (499,233) |
Contingent payments in relation to acquisitions | (100,000) | (360,537) | (840,506) | (560,000) | - | (1,861,043) |
Statutory operating profit | 401,528 | 2,371,896 | 401,835 | (57,475) | (907) | 3,116,877 |
Earnings per share
The calculation of basic earnings per share for the year ended 31 December 2017 was based on the profit attributable to ordinary shareholders of £1,330,685 (year ended 31 December 2016: £2,299,573).
| 2017£ | 2016£ |
Profit for the year attributable to owners of the parent | 1,330,685 | 2,299,573 |
Weighted average number of ordinary shares in issue for the basic earnings per share | 96,809,578 | 88,101,562 |
Basic and diluted earnings per share (in pence per share) | 1.37 | 2.61 |
The calculation of adjusted earnings per share for the year ended 31 December 2017 was based on the profit before adjusting items of £9,417,904 (Year ended 31 December 2016: £6,721,419).
| 2017£ | 2016£ |
Adjusted earnings | 9,417,904 | 6,721,419 |
Weighted average number of shares | 96,809,578 | 88,101,562 |
Adjusted earnings per share (pence) | 9.73 | 7.63 |
Annual Report
The annual report will be mailed to shareholders and will be available in due course on our website www.ptsg.co.uk.
Annual General Meeting
The annual general meeting will be held at 13 Flemming Court, Whistler Drive, Castleford, WF10 5HW on Monday 18 June 2018 at 2.00pm.
ENDS