TIDMUTW
RNS Number : 4166V
Utilitywise plc
28 October 2014
28 October 2014
Utilitywise plc
("Utilitywise" or the "Group")
Final Results
Utilitywise PLC (AIM: UTW), a leading independent utility cost
management consultancy, is pleased to announce its audited full
year results for the year ended 31 July 2014.
Financial Highlights:
2014 2013 % change
(GBP000's) (GBP000's)
Revenue 48,641 25,256 +93
Gross profit 22,056 12,137 +82
EBITDA* 14,161 7,817 +81
Profit before tax** 13,059 7,411 +76
Diluted earnings per
share(#) 13.4p 8.5p +58
Total dividend for
the year 4.0p 2.6p +54
*Excluding exceptional items relating to acquisition costs of
GBP0.1m, (2013: GBP0.8m), share based payment expenses of GBP0.7m
(2013: GBP0.2m), restructuring and reorganisation costs of GBP1.9m
(2013: GBPnil) and exceptional credit of GBP2m (2013: GBPnil)
relating to the release of contingent consideration.
** As above, but excluding amortisation relating to acquired
intangibles of GBP0.9m (2013: GBP0.2m).
(#) As above, but including the tax impact of the above
adjustments.
Highlights:
-- 62% increase in like for like revenue growth, largely driven
by increased energy consultant headcount to 363 (2013: 281)
-- Secured revenue pipeline increased 70% on 2013 to GBP28.2
million, representing visible revenue streams secured by the Group
but not yet recognised in the financial statements
-- New additions to the Partner Channel including the British Chamber of Commerce
-- Acquisition and integration of Icon Communication Centres,
providing a platform into continental Europe
-- Creation of an Operational board and changes to PLC Board to
provide optimum support for further growth
Geoff Thompson, Chief Executive of Utilitywise, commented: "I am
very pleased to report on another year of significant growth for
the Group, demonstrating the momentum we have established as a
result of both organic growth and the successful integration of our
recent acquisitions. Utilitywise procures, monitors, reduces and
manages the three essential utilities of power, gas and water for
SME's through to multi-national corporate organisations and our new
divisional structure ensures the optimal support for each client.
Our continued strong performance is evidence of the strength of our
proposition, the hard work of our people and most importantly the
value we add to our customers. We enter the new financial year with
a very healthy level of contracted revenue as well as a strong
pipeline and, as a result, the Board remains confident in the
Group's continued success."
For further information:
Utilitywise PLC 0870 626 0559
Geoff Thompson (CEO)
Andrew Richardson (Deputy CEO)
Jon Kempster (CFO)
finnCap (NOMAD and broker) 020 7220 0500
Matt Goode / Charlotte Stranner (Corporate
Finance)
Simon Johnson (Corporate Broking)
Newgate Threadneedle 020 7653 9850
Josh Royston / John Coles / Hilary Buchanan
About Utilitywise
Utilitywise is a leading independent utility cost management
consultancy based in North Tyneside. The Group has established
trading relationships with a number of major UK energy suppliers
and provides services to its customers designed to assist them in
achieving better value out of their energy contracts, reduced
energy consumption and lower carbon footprint.
Businesses large and small rely on Utilitywise for their energy
management needs. Clients range in size from single site SME's to
multinationals with thousands of sites and cover the whole of the
UK. In total, Utilitywise has over 20,000 customers and manages an
overall energy consumption of approaching 20 terra watt hours per
annum.
Utilitywise is a UK company quoted on the AIM market of the
London Stock Exchange. For more information, please visit
www.utilitywise.com.
Strategic Report
Chairman's Statement
I am delighted to report another year of strong performance and
excellent operational progress. Revenue increased by 93% in the
year to GBP48.6 million, delivering EBITDA of GBP14.2 million and
Adjusted Profit Before Tax of GBP13.1 million, increases of 82% and
76% respectively. As a result of the acquisitions made over the
past two years and the increasing scope of the Group's business,
Utilitywise has been re-organised into two divisions, Enterprise
and Corporate. The former concentrates on the provision of our
energy procurement services to the SME market, whilst the latter's
focus is on the larger, industrial and commercial ("I&C")
segment as well as the provision of utility management services. I
am pleased that both have performed well throughout the year. Icon
Communication Centres s.r.o was also acquired in April in order to
facilitate international expansion and in particular into certain
European markets.
During the year the Company welcomed both Jeremy Middleton and
Jon Kempster to the Board of Directors, with Jon having now taken
on an executive role following his initial appointment as a
Non-Executive Director.
As a result of the new divisional structure and to provide the
support necessary for further growth, the Company is taking the
opportunity to restructure the PLC Board and to create an
Operational Board to handle the day to day operations of the
Company.
As a result of these changes Andrew Richardson has taken on an
enhanced role as Deputy Chief Executive and Jon Kempster has become
Chief Financial Officer, a role he previously held at Wincanton
Plc. Adam Thompson and Michael Dent will both step down from the
PLC Board but assume roles as Managing Director of Utilitywise
Enterprise and Sales Director respectively on the newly formed
Operational Board and will be joined by Claire Waterson, Group
Director of People and HR; Nigel Hudson, Marketing Director and
Ashley Guise, Managing Director of Utilitywise Corporate. The
Operational Board will be chaired by Geoff Thompson, Chief
Executive.
As well as providing the best balance for the business, these
changes will ensure the Company is committed to maintaining a high
standard of corporate governance, a duty the Board continues to
take very seriously.
Utilitywise will shortly be moving into its new head office at
Cobalt Business Park, North Tyneside, which will enable us to grow
Group headcount to 1,400 in the next two years to drive further
organic growth.
Given the dynamic and ever changing environment in which we
operate, I believe that the increasing diversity of our offering
and the strategic decisions taken to further broaden our products
and services auger well for the future. We are well placed to take
advantage of opportunities as well as face any challenges which may
present themselves as we continue to grow.
With the continued strong performance the Board is pleased to
recommend a final dividend payment of 2.7p per share, making a
total of 4.0p for the year, and continues to view the future with
confidence.
I would like to thank all of the staff for their continued hard
work. It is as a result of their strenuous efforts that Utilitywise
continues to thrive and prosper.
Richard Feigen
Our Strategy
Utilitywise was established to assist the SME market to procure
their gas and electricity. It was a poorly served market with
traditional consultants and brokers focusing on large customers. It
became apparent that the SME market was very conducive to
assistance and we have continued to expand our ability to service
this market with increases in personnel and capabilities.
As we developed the business we started to build further
capabilities that allowed our customers to monitor their usage and
provided a reporting platform in order to aid better consumption
management.
The strategy of the Group has been reinforced via acquisitions
which brought in more capabilities and expertise including the
procurement of utilities for I&C customers, the ability to
monitor water consumption via our O box product and an audit and
compliance capability. These acquisitions typically targeted the
larger customer but we have used these skills to enhance our
offering in to our core historic SME customer.
Our strategy is to provide a comprehensive utility solution to
all sizes of customer. We can procure their energy, we can monitor
and report their usage, identify efficiency savings and project
manage the solutions in order to realise identified savings.
Business Model
Utilitywise continues to specialise in energy procurement and
energy management services for businesses. The Company negotiates
rates with energy suppliers on behalf of business customers,
provides an account care service and offers a range of products and
services designed to assist customers in managing their energy
consumption. Customers are based throughout the UK, the Republic of
Ireland and most recently certain European markets, across a
variety of industry sectors and the public sector, and range in
size from small single site customers to large multi-site
customers.
The Company has further developed its routes to market as
follows:
-- The Company continues to employ energy consultants who
contact prospective customers identified by the Company's bespoke
IT search system to offer a potentially reduced energy tariff and
various energy management products and services designed to assist
in identifying ways to reduce that customer's overall energy
consumption.
-- Secondly, the Company operates a "partner channel" where
organisations refer customers to Utilitywise and commissions
generated from those customers are shared between Utilitywise and
the referring organisation. We are pleased to have secured the
British Chamber of Commerce as an important addition to this
channel.
-- The company also employs 'field based' energy consultants who
target organisations that cannot be effectively reached via the
core telemarketing channel.
-- Additionally, the company has now grown its business
development team who target larger I&C prospective customers.
For these prospective customers the process is more consultative
and bespoke and whilst it may lead with an energy procurement
discussion, it often includes a range of the broader service
elements.
The Group has continued to develop in all of these areas and has
re-organised to ensure the Group's products and services are
presented to target customers in the most efficient way. As a
result the Group is now organised into two divisions, Enterprise
and Corporate.
The Enterprise Division services SME and mid-market
customers.
Following integration of all three newly acquired businesses
namely Clouds Environmental Consultancy Limited, Aqua Veritas
Consulting Limited and Energy Information Centre Limited (EIC), the
Corporate Division has been created to service the larger I&C
customers.
These structural changes reflect the Directors' comments at the
end of 2013 when we stated "there will be more focus on providing
both energy procurement and energy management services to the full
customer portfolio in the future and the Directors expect to
provide further analysis of the activities in the next reporting
period as the reporting systems are updated and the Group
develops."
The Directors continue to believe that the UK market
fragmentation, the low penetration of third party intermediaries
(TPIs) in the UK commercial market and the Company's current share
of the total potential market, means that there is an opportunity
to increase the Company's market share through organic growth and
acquisitions.
In addition to the Company's aim to grow its market share of
both SME and I&C customers, the Directors believe that there is
an opportunity to capitalise on the Company's established
relationships with energy suppliers who continue to show an
interest in some of the Company's energy management products and
services for sale into the supplier's customer base.
Consequently the Group's strategy remains focused on three key
areas:
(1) Organic growth
The scaling and investment in the UK procurement and services
business model will continue and the number of energy consultants
is now planned to increase to over 700 by 2016.
(2) Acquisition
The Group continues to evaluate acquisitions which will add to
the overall proposition, including acquisitions in the controls and
demand management sectors;
(3) European expansion
Recent trials have proven successful. A clear market opportunity
exists and the acquisition of Icon Communication Centres s.r.o was
announced at our half year results marking the start of the Group's
expansion of its model into other geographies.
Business Review
The Group has developed in all areas of its operations and
delivered a 62% increase in like for like revenue growth (adjusted
for acquired businesses), largely driven by increased headcount in
line with our stated
strategy.
Financial Highlights
2014 2013 % change
(GBP000's) (GBP000's)
Revenue 48,641 25,256 +93
Gross profit 22,056 12,137 +82
EBITDA* 14,161 7,817 +81
Profit before tax** 13,059 7,411 +76
Diluted earnings per
share(#) 13.4p 8.5p +58
Dividend 4.0p 2.6p +54
*Excluding share based payment expenses of GBP0.7m (2013:
GBP0.2m), exceptional items relating to acquisition costs of
GBP0.1m, (2013: GBP0.8m), , restructuring and reorganisation costs
of GBP1.9m (2013: GBPnil) and exceptional credit of GBP2m (2013:
GBPnil) relating to the release of contingent consideration.
** As above, but excluding amortisation relating to acquired
intangibles of GBP0.9m (2013: GBP0.2m).
(#) As above, but including the tax impact of the above
adjustments.
Adjusted EBITDA is defined as profit from operations plus
depreciation, amortisation, share based payment expenses and
exceptional items. Exceptional items relate to costs associated
with the acquisition of Icon Communication Centres s.r.o,
restructure and reorganisation costs and the release of contingent
consideration where the earn out criteria was not met.
Key Performance Indicators
Some of the key performance indicators used by the Directors are
as follows:
KPI 2014 2013 % change
Energy consultants at
31 July 363 281 +29
Contracts secured 37,824 27,794 +36
Future secured revenue* GBP28.2 million GBP16.6 million +70
*where future secured revenue is contracts which have been won
but are not currently live, and therefore have not contributed to
these financial statements.
The Group has performed well against its key performance
objectives with the continued investment in new energy consultants
throughout this and prior periods driving a 36% increase in
contracts secured for 2014 at 37,824. This increase in secured
contracts in turn has driven up the secured revenue pipeline to
GBP28.2 million, an increase of 70% on 2013. This is a very
positive metric as it represents visible revenue streams secured by
the group but not yet recognised in the financial statements.
These results demonstrate the momentum we have established, as
we continue to grow headcount to support organic growth and
successfully integrate our recent acquisitions, but more
fundamentally continue to show the strength of our proposition, the
hard work of our people and most importantly the value we add to
our customers.
Revenue generated in 2014 at GBP48.6 million represents an
increase of 93% on the year ended 2013 and a like for like
comparison, adjusting for acquired businesses, results in an
increase of 62%. The value of contracts going live in the period, a
core driver of revenue, at GBP42.6 million is 65% higher than 2013.
Energy consultant head count in the Enterprise Division continues
to increase through the year to a total of 363 (an increase of 82
or 29%), a statistic that underpins the GBP40.1 million revenue
generated by the Enterprise Division in 2014 (an increase of 68% on
2013). The Corporate Division servicing larger customers on a more
consultative basis continues to perform well and represents 18% of
Group revenue.
Gross margin has stabilised at 45.3% for the year against 48.1%
for 2013 reflecting a first half margin of 43.1% where a majority
of the energy consultancy recruitment took place and a second half
margin of 47.5% reflecting the maturity of these recruits.
Customer Growth
Our core energy intermediary offering to commercial customers
has continued to scale throughout this reporting period as
evidenced by the volume of new customers we contracted in 2014. As
at our IPO in June 2012 we had over 10,000 contracted customers and
this grew to over 15,333 customers and over 44,361 meters by July
2013, incorporating EIC customers and meters. On a like for like
basis this now stands at 20,826 customers and 63,451 meters as at
the year end.
This has been principally driven by the increased energy
consultant headcount to 363 at 31 July 2014, up from 281 at the
previous year end. Given the sophistication of our leading software
based analysis tools, headcount remains the greatest driver of our
core offering in order to convert the vast number of opportunities
identified. As such, we will continue to add further to our
staffing levels over the course of the current year. The success of
this approach can be further seen through the level of contracts
waiting to go live, one of our key forward looking metrics, which
was GBP28.2 million at 31 July 2014, compared with GBP16.6 million
at the prior year end.
Proprietary Systems and Solutions
Investment has continued in the Group's IT systems and processes
to support further growth and this has included the development of
Quantum, our core CRM solution. In addition the Group has developed
the system to support our presence in the French and German
markets.
Our acquisitions have allowed us to invest further in Energy
Services with improvements to our Edd:e sub-metering solution that
is now fully integrated to our multi-utility reporting platform -
Utility Insight.
During the year under review Utilitywise added Icon
Communication Centres s.r.o to the Group which supports our stated
strategy to develop our business model in certain European
markets.
Acquisitions
The Directors are pleased to report that each of the previously
acquired businesses is integrating well, as part of the newly
formed Corporate Division, with revenues of GBP8.6m, 860 customers
and 19,258 meters. The division's strength lies within the large
enterprise, industrial and commercial market, complementing
Utilitywise's leading position in the SME market. As a result,
Utilitywise has a much broader offering and expertise in providing
the right products for any company's wider energy needs, be they
large or small. We have also increased our geographical reach, with
locations in Portsmouth, Redditch and Bury St Edmunds as well as
our Head Office in North Tyneside, enabling us to service clients
in any part of the UK more easily.
The Group remains alert to further opportunities in this highly
fragmented market which could bring additional products, services
or expertise to our existing capability. In particular the Group
continues to seek opportunities in the controls and demand
management space.
The Board of Directors has a strong expertise in M&A
activity and our Chairman in particular will continue to work
closely with the Executive team to assess the viability of
potential targets and the benefits that they could bring to the
Group.
Principal risks and uncertainties
The principle risks and uncertainties faced by the group are as
follows:
Exposure to energy suppliers
A significant proportion of the Group's revenues are derived
from commissions paid by a small number of energy suppliers. Should
these energy suppliers decide in future not to engage with the
Group or with TPIs generally and, instead, engage directly with
customers, the Group would suffer a loss in revenues related to the
commission payable by such energy suppliers. The Group ensures that
it is in constant dialogue and has trading with all of the major
energy suppliers to help mitigate this risk.
Exposure to underlying customers
The Group's customers pay the energy supplier directly for the
energy consumed, with the Group receiving its commissions from the
energy supplier. The Group is, however, at risk should the customer
cease trading or fail to pay the energy supplier. Should this
occur, the Group would suffer a loss in future revenues related to
the commissions associated with the future energy consumption by
that customer. It should be noted, however, that the energy
supplier usually undertakes credit checks on customers prior to
entering into a contract to supply energy and there is limited
individual customer concentration in revenue terms.
Competition
The Group has a number of competitors. These competitors may
announce new services, or enhancements to existing services, that
better meet the needs of customers or changing industry standards.
Management continue to develop and offer a full range of energy
services products to help mitigate customer risk.
Legislation
Legislation may change in a manner that may require more strict
or additional standards of compliance than those currently in
effect thereby creating additional costs. In addition, the
Government may implement legislation requiring changes to current
fee structures for TPIs. Should such legislation be passed, there
may be a material adverse effect on its financial condition and
operating results of the Group.
Regulatory
Currently, energy procurement is an unregulated market. Should
regulation be introduced to cover the Group's activities, the
increased regulatory burden could impact on the profits of the
Group. However, it should be noted that the Board believe that the
Group operates in line with best market practice, including the
provisions of the OFGEM retail market review, and in their view any
such regulation would initially impact on the smaller energy
consultancy and brokering businesses.
Dividend
The Board is proposing a final dividend of 2.7p per share
subject to the approval of the shareholders at the Annual General
Meeting. The dividend per share will be paid on 18 December 2014 to
shareholders on the register at close of business on 14 November
2014. The associated ex-dividend date is 13 November 2014.
Outlook
The new financial year has started well, in line with management
expectations. The increasing diversity of our offering and
commitment to further broaden our products and services auger well
for the future. Our plans remain to continue to grow headcount to
support organic growth; we have successfully integrated our recent
acquisitions and we continue to show the strength of our
proposition with the value we add to our customers.
We are well placed to take advantage of opportunities as we
continue to grow.
Approved by the Board of Directors and signed on behalf of the
Board on 28 October 2014.
Andrew Richardson
Company secretary
Consolidated statement of total comprehensive income
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Revenue 48,641,855 25,256,142
Cost of sales 26,585,832 13,119,386
Gross profit 22,056,023 12,136,756
Other operating income 327,647 142,739
Exceptional contingent consideration
release 2,000,000 -
-------------------- --------------------
Total operating income 2,327,647 142,739
Other administrative expenses 10,621,221 5,194,916
Exceptional administrative
expenses 2,021,790 826,935
-------------------- --------------------
Total administrative expenses 12,643,011 6,021,851
Profit from operations before
exceptional items 11,762,449 7,084,579
Exceptional items (21,790) (826,935)
------------------------------------------ -------------------- --------------------
Profit from operations 11,740,659 6,257,644
Finance income 103,697 41,296
Finance expense 476,393 83,521
Profit before tax 11,367,963 6,215,419
Tax expense 2,101,925 1,457,213
Profit for the year attributable
to equity holders of the parent
company 9,266,038 4,758,206
Other comprehensive income
/ (expense) (net of tax) (77,308) -
-------------------- --------------------
Total comprehensive income
attributable to equity holders
of the parent company 9,188,730 4,758,206
Earnings per share for profit
attributable to the owners
of the parent during the year
Basic 0.127 0.075
Diluted 0.121 0.071
Consolidated statement of financial position
As at As at
31 July 2014 31 July 2013
Restated
GBP GBP
----------------- -----------------
Non-current assets
Property, plant and
equipment 4,837,532 4,795,670
Goodwill 14,851,149 14,281,743
Intangible assets 7,075,202 6,943,854
Accrued revenue 13,068,221 7,269,680
Total non-current
assets 39,832,104 33,290,947
----------------- -----------------
Current assets
Inventories 97,983 80,825
Trade and other receivables 14,717,485 8,554,629
Cash and cash equivalents 15,823,137 9,014,680
Total current assets 30,638,605 17,650,134
----------------- -----------------
Total assets 70,470,709 50,941,081
----------------- -----------------
Current liabilities
Trade and other payables 17,564,007 12,644,484
Loans and borrowings - 1,252
Corporation tax liability 303,200 1,357,362
Current provisions 750,639 -
----------------- -----------------
Total current liabilities 18,617,846 14,003,098
----------------- -----------------
Non-current liabilities
Trade and other payables 7,918,457 4,669,308
Loans and other borrowings 6,000,000 5,000,000
Deferred tax liability 1,132,642 1,958,117
Non-current provision 443,256 -
----------------- -----------------
Total non-current
liabilities 15,494,355 11,627,425
----------------- -----------------
Total liabilities 34,112,201 25,630,523
Net assets 36,358,508 25,310,558
----------------- -----------------
Equity attributable
to equity holders
of the company
Called up share capital 74,514 71,858
Share premium 12,477,889 10,864,765
Merger reserve 5,783,427 5,684,693
Share option reserve 1,231,434 228,916
Foreign currency (77,308) -
reserve
Retained earnings 16,868,552 8,460,326
Total equity 36,358,508 25,310,558
--------------- ---------------
Consolidated statement of changes in equity
Share Foreign
Share Share option Merger Retained currency
capital premium reserve reserve earnings reserve Total
GBP GBP GBP GBP GBP GBP GBP
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
At 1 August
2012 61,426 6,187,598 20,952 - 4,814,894 - 11,084,870
Profit for
the period - - - - 4,758,206 - 4,758,206
Other
comprehensive
income - - - - - - -
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Total
comprehensive
income for
the year - - - - 4,758,206 - 4,758,206
Dividends
paid - - - - (1,112,770) - (1,112,770)
Share option
expense - - 207,964 - - - 207,964
Issue of
shares 10,432 4,995,000 - 5,684,693 - - 10,690,125
Share issue
costs - (317,833) - - - - (317,833)
Equity as
at 31 July
2013 71,858 10,864,765 228,916 5,684,693 8,460,326 - 25,310,558
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Profit for
the period - - - - 9,266,038 - 9,266,038
Other
comprehensive
income - - - - - (77,308) (77,308)
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Total
comprehensive
income for
the year - - - - 9,266,038 (77,308) 9,188,730
Dividends
paid - - - - (2,158,341) - (2,158,341)
Share option
expense - - 737,117 - - - 737,117
Deferred
tax on share
options - - 617,249 - - - 617,249
Tax on equity
items - - - - 948,681 - 948,681
Issue of
shares 2,656 1,613,124 - 98,734 - - 1,714,514
Reserve
transfer
relating
to share
based
payments - - (351,848) - 351,848 - -
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Equity as
at 31 July
2014 74,514 12,477,889 1,231,434 5,783,427 16,868,552 (77,308) 36,358,508
------------ --------------- -------------- -------------- ---------------- -------------- ----------------
Consolidated cash flow statement
12 months 12 months
ended ended
31 July 2014 31 July 2013
GBP GBP
----------------- -----------------
Operating activities
Profit before tax 11,367,963 6,215,419
Finance income (103,697) (41,296)
Finance expense 476,393 83,521
Depreciation of property, plant and
equipment 715,256 332,911
Share option expense 737,117 207,964
Grant income (36,000) (36,000)
Amortisation of intangible fixed assets 946,391 191,406
----------------- -----------------
14,103,423 6,953,925
(Increase)/Decrease in trade and other
receivables (11,961,397) (11,209,146)
(Increase)/Decrease in inventories (17,158) 17,796
Increase/(Decrease) in trade and other
payables 8,296,666 7,142,642
Increase/(Decrease) in provisions 1,193,895 -
----------------- -----------------
(2,487,994) (4,048,708)
Cash generated from operations 11,615,429 2,905,217
----------------- -----------------
Income taxes paid (1,910,373) (1,206,853)
Net cash flows from operating activities 9,705,056 1,698,364
----------------- -----------------
Investing activities
Purchase of property, plant and equipment (630,583) (467,063)
Purchase of intangibles (42,313) (57,557)
Consideration paid (192,500) -
Finance income 12,603 41,296
Acquisition of subsidiary, net of cash
acquired (599,688) (8,997,012)
----------------- -----------------
Net cash used in investing activities (1,452,481) (9,480,336)
----------------- -----------------
Financing activities
Issue of shares 200,000 5,000,000
Share issue costs - (317,833)
Loans repaid (1,252) (24)
Loans received 1,000,000 5,000,000
Finance expense (476,393) (220)
Dividends paid (2,158,341) (1,112,770)
-----------------
Net cash raised from financing activities (1,435,986) 8,569,153
----------------- -----------------
Net increase in cash and cash equivalents 6,816,589 787,181
Exchange losses on cash and cash equivalents (8,132) -
Cash and cash equivalents at beginning
of period 9,014,680 8,227,499
----------------- -----------------
Cash and cash equivalents at end of
period 15,823,137 9,014,680
----------------- -----------------
Notes to financial statements
1. The financial information set out herein does not constitute
the Group's statutory accounts for the year ended 31 July 2014 or
the year ended 31 July 2013 within the meaning of section 435 of
the Companies Act 2006, but is derived from those accounts. The
information has been derived from the audited statutory accounts
for each of those years upon which an unqualified audit opinion was
expressed and which did not contain a statement under section 498
(2) or (3) of the Companies Act 2006.
The audited accounts will be posted to all shareholders in due
course and will be available upon request by contacting the Company
Secretary at the Company's registered office.
2. Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRSs"), as adopted
by the European Union (EU).
Utilitywise Plc is incorporated and domiciled in the United
Kingdom.
Prior period adjustment
During the preparation of the current year financial statements
management has considered the loss of the Initial Recognition
Exemption on the property acquired as part of the acquisition of
Energy Information Centre Limited. This has resulted in the tax
base of this property reducing to GBPnil. A deferred tax liability
of GBP584,651 should have been recognised, with a corresponding
increase in goodwill. Management consider it appropriate to reflect
this as a prior period adjustment to the financial position and
results of 2013. There is no impact on actual cash flows or net
assets. Further narrative has been provided in note 14 of the
financial statements.
The principal accounting policies have been applied consistently
to all years and are detailed in the Group's statutory
accounts.
3. Operating Segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as the
management team including the Chief Executive Officer, Chief
Operating Officer and Chief Financial Officer. The Group reports to
the Board under both UK GAAP and IFRS. Underlying accounting
information is prepared under UK GAAP and the adjustments noted
within this report taking results to IFRS are made for the purpose
of reporting to the Board and external reporting.
During the current year the Group serviced both corporate and
enterprise businesses. The Board considers that the services were
offered from two distinct segments in the current year, and as such
have taken the decision to report separately on these operating
segments. These distinct operating segments have arisen from a
restructure in the current year of previously acquired businesses.
Given the reorganisation in the year the Board have undertaken to
restate the corresponding items of the segment information, see
note 4.
Operating segments are determined based on the internal
reporting information and management structure within the Group.
Information regarding the results of the reportable segments is
included within this report. Performance is based on segment
operating profit or loss before share-based payment charges,
depreciation, amortisation and acquisition costs, as reported in
the internal management reports that are reviewed by the CODM. The
segment operating profit or loss is used to measure performance.
Revenues represent revenues to external customers.
The Enterprise Division derives its revenues from energy
procurement by negotiating rates with energy suppliers for small
and medium sized business customers throughout the UK, Republic of
Ireland and certain European markets. The Corporate Division
derives its revenues from energy procurement of larger industrial
and commercial customers, providing an account care service and
offering a variety of utility management products and services
designed to assist customers manage their energy consumption.
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Revenue
Enterprise (local GAAP) 40,064,832 23,902,261
Corporate (local GAAP) 9,859,510 2,783,173
Intersegment revenue (1,252,367) (1,181,096)
Accrued revenue 390,627 -
Discounting of cash flows (420,747) (248,196)
-------------------- --------------------
Total Group revenue 48,641,855 25,256,142
==================== ====================
Enterprise Corporate
GBP GBP
Segment profit 7,094,711 2,146,573
Finance income 9,738 2,865
Finance expense (476,214) (179)
Depreciation (312,740) (402,516)
Amortisation (8,876) (6,300)
Profit before tax (local GAAP) 6,306,619 1,740,443
==================== ====================
12 months ended 12 months ended
31 July 2014 31 July 2013
Profit before tax GBP GBP
Enterprise (local GAAP) 6,306,619 5,784,521
Corporate (local GAAP) 1,740,443 1,503,431
Accrued revenue 390,627 -
Grant release 36,000 36,000
Discounting of cash flows net of
unwinding (69,117) (749,573)
Amortisation 999,891 160,538
Investment costs (36,500) (519,498)
Exceptional release of contingent 2,000,000 -
consideration
-------------------- --------------------
Total Group profit before tax 11,367,963 6,215,419
==================== ====================
12 months ended 12 months ended
31 July 2014 31 July 2013
Net assets GBP GBP
Enterprise (UK GAAP) 29,808,399 24,393,737
Corporate (UK GAAP) 2,469,364 1,164,500
Accrued revenue and tax impact 312,502 -
Grant release and tax impact (24,638) (66,790)
Discounting of cash flows and tax
impact (394,342) (339,053)
Share options 617,249 -
Amortisation 2,113,728 677,662
Investment costs (555,998) (519,498)
Exceptional release of contingent 2,000,000 -
consideration
Business combinations 12,244 -
-------------------- --------------------
Group net assets 36,358,508 25,310,558
==================== ====================
4. Exceptional Items
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Exceptional release
-------------------- ----------------------
Contingent consideration 2,000,000 -
-------------------- ----------------------
Exceptional costs
Restructuring and reorganisation 782,795 -
Provisions 1,193,895 -
Acquisition costs and aborted
acquisition costs 45,100 826,935
2,021,790 826,935
-------------------- ----------------------
21,790 826,935
==================== ======================
Exceptional items in the year ended 31 July 2014 relate to the
costs incurred in the acquisition of Icon Communication Centres
s.r.o and other aborted acquisition costs. Also included are
restructuring and reorganisation costs such as settlement payments
of GBP456k, costs of GBP167k incurred in the set up of a new Head
Office which will be occupied in the next financial year, as well
as a dilapidations provision and an onerous lease provision for the
current premises of GBP422k and GBP772k respectively.
There is also a credit of GBP2m offsetting these costs which has
arisen from the release of deferred consideration where earn out
criteria were not met. Exceptional items are included in
administrative expenses and other operating income in the income
statement.
Exceptional items in the year ended 31 July 2013 related to the
costs incurred in the acquisitions of Clouds Environmental
Consultancy Limited, Aqua Veritas Consulting Limited and Energy
Information Centre Limited and other aborted acquisitions. Costs
associated with share issues were taken to the share premium
account. Please see the Consolidated Statement of Changes in
Equity.
5. Tax expense
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Current tax expense
Current tax on profits
for the period 2,569,906 1,617,704
Adjustments in respect
of previous periods (67,920) -
------------------------------- --------------------
2,501,986 1,617,704
=============================== ====================
Deferred tax expense
Origination and reversal
of temporary differences (349,793) (61,274)
Adjustment in respect of
previous periods (50,268) (108,905)
Effects of change on tax
rates - 9,688
------------------------------- --------------------
(400,061) (160,491)
=============================== ====================
Total tax expense 2,101,925 1,457,213
=============================== ====================
Equity items
Origination and reversal
of temporary differences (948,677) (160,491)
Adjustment in respect of
previous periods (617,249) -
------------------------- --------------
(1,565,926) (160,491)
========================= ==============
5. Tax expense (continued)
The reasons for the difference between the actual tax charge for
the year and the standard rate of corporation tax in the United
Kingdom applied to profit for the year as follows:
12 months ended 12 months ended
31 July 2014 31 July 2013
GBP GBP
Profit for the period 11,367,963 6,215,419
Expected tax charge based
on corporation tax rate
of 22.33% in 2014 (23.67%
in 2013) 2,538,638 1,471,190
Expenses not deductible
for tax purposes 82,073 75,306
Income not taxable for (446,630) -
tax purposes
Current tax rate difference (534) (414)
Impact of change in tax
rate in period 40,429 9,688
Adjustment to tax charge (67,920) -
in respect of previous
periods - current tax
Adjustment to tax charge
in respect of previous
periods - deferred tax (50,268) (108,905)
Deferred tax not recognized 6,137 10,348
-------------------- --------------------
Total tax expense 2,101,925 1,457,213
==================== ====================
6. Earnings per Share
Basic profit per share is calculated by dividing the profit
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the year.
Diluted profit per share is calculated by adjusting the weighted
average number of ordinary shares in issue to assume the conversion
of all potentially dilutive ordinary shares.
12 months 12 months
ended ended
31 July 2014 31 July 2013
GBP GBP
Profit
Profit used in calculating
basic and diluted profit 9,188,730 4,758,206
Number of shares
Weighted average number of
shares for the purpose of
basic earnings per share 72,464,331 63,220,550
Effects of:
Employee share options and
warrants 2,593,870 3,109,573
Contingent shares to be issued 1,096,414 315,315
Weighted average number of
shares for the purpose of
diluted earnings per share 76,154,615 66,645,438
7. Acquisition
Utilitywise Plc acquired the entire share capital of Icon
Communication Centres s.r.o on 28 April 2014 for GBP1,981,294 in
order to enhance the service offering provided by the Group.
Consideration consisted of both cash payments and the issue of
shares, an element of which is contingent on the performance of
Icon Communication Centres s.r.o to 31 December 2014. Contingent
consideration has been included as a best estimate of amounts
payable.
Goodwill on consolidation has been calculated as follows:
GBP
Amount of consideration 1,981,294
Fair value of net assets acquired:
Property, plant
and equipment 23,348
Customer related
intangible assets 1,161,000
Other intangibles 5,381
Receivables 517,905
Cash 297,457
Payables (372,613)
Deferred tax liability (220,590)
---------------
Net assets 1,411,888
---------------
Goodwill (note
14) 569,406
---------------
Consideration:
Cash paid 897,145
Shares issued 98,765
Contingent consideration 985,384
Total consideration 1,981,294
--------------
The goodwill reflects expected synergies from combining the two
businesses and is not tax deductible.
The total value of the contingent consideration is based on a
multiple of expected EBITDA capped at GBP985,384. This is split
between cash and shares. All of the contingent consideration is
included in trade and other payables as it meets the definition of
a financial liability. The share consideration is deemed a
financial liability as it represents the settlement of a specific
cash amount rather than a specific number of shares.
Since the date of acquisition Icon Communication Centres s.r.o
has generated revenue of GBP866,825 and a loss before tax of
GBP65,140 which is included in the consolidated statement of
comprehensive income.
Assuming Icon Communication Centres s.r.o was acquired at the
beginning of the annual reporting period, group revenue would be
GBP52,200,249 and profit before tax GBP10,885,967.
Included within receivables above are gross contractual amounts
receivable of GBP436,589. These are expected to be collected in
full.
8. Share Capital
2014 2013
Share capital issued and
fully paid No. GBP No. GBP
Ordinary shares of GBP0.001
each
At 1 August 71,858,078 71,858 61,425,842 61,426
Warrants exercised 333,332 333 - -
Deferred consideration 253,290 253 - -
Consideration 30,701 31 5,432,236 5,432
Shares issued for cash - - 5,000,000 5,000
LTIPS exercised 2,038,750 2,039 - -
--------------- ----------- --------------- -----------
At 31 July 74,514,151 74,514 71,858,078 71,858
=============== =========== =============== ===========
Ordinary shares carry the right to one vote per share at general
meetings of the Company and the rights to share in any distribution
of profits or returns of capital and to share in any residual
assets available for distribution in the event of a winding up.
On 15 August 2013 a further 166,666 shares were issued pursuant
to the exercise of warrants over such shares, leading to additions
of GBP167 to share capital and GBP99,833 to share premium.
On 15 November 2013 a further 253,290 shares were issued in part
settlement of deferred consideration due on the acquisition of
Clouds Environmental Consultancy Limited, as announced on 1 October
2013, leading to additions to share capital of GBP253 and additions
to share premium of GBP192,247.
On 26 November 2013 a further 166,666 shares were issued
pursuant to the exercise of warrants over such shares, leading to
additions of GBP167 to share capital and GBP99,833 to share
premium.
On 28 April 2014 a further 30,701 shares were issued at 321.7p
per share for consideration in the investment in Icon Communication
Centres s.r.o. The investment has been recognized at fair value in
the consolidated financial statements which resulted in additions
to merger reserve of GBP98,734 and additions to share capital of
GBP31.
On 20 June 2014 a further 2,038,750 shares were issued pursuant
to the exercise of options over such shares, leading to additions
to share capital of GBP2,039 and additions to share premium of
GBP1,221,211.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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