Formation Group Plc - Half-year Report PR Newswire

24 May 2019

FORMATION GROUP PLC

('Formation', or the 'Company'; together with its subsidiaries, the ‘Group’))

Unaudited Interim Results for the six months ended 28 February 2019

Director's Statement

I am pleased to report the Group's results for the six months ended 28 February 2019.

Revenue for the 6 months ended 28 February 2019 of GBP 14.9 m was 15% lower than the GBP 17.2m generated in the same period last year.  This resulted in a gross profit of GBP 0.5m for the period (2018: GBP 0.9m), a fall of 45%. Administrative costs, which are relatively fixed in nature, were lower than the prior year at GB P0.6m (2018: GBP 1.1m). As a result, the group posted a loss for the period of GBP0.1m compared to a loss of GBP 0.3m for the same period in 2018.

The Directors continue to pursue opportunities for new projects and new clients in order to grow revenues.

David Kennedy
24 May 2019

Unaudited consolidated income statement
For the six months ended 28 February 2019


                         6 Months ended 28 6 Months ended 28 Year ended 31 Aug
                    Note Feb 2019          Feb 2018          2018 (Audited)
                         (Unaudited)       (Unaudited)

                         £’000             £’000             £’000

Continuing
operations

Turnover            2    14,864            17,206            38,629

Cost of sales            (14,396)          (16,349)          (37,674)

                         __________        __________        __________

Gross profit             468               857               955

Administrative           (605)             (1,134)           (1,371)
expenses

                         __________        __________        __________

Operating loss from
continuing               (137)             (277)             (416)
operations

Gain on financial
asset at fair value 3    -                 -                 450
through profit and
loss account

                         __________        __________        __________

(Loss)/profit on
ordinary activities      (137)             (277)             34
before exceptional
item and taxation


Exceptional Item         -                 -                 (318)

                         __________        __________        __________

(Loss) on ordinary
activities before        (137)             (277)             (284)
taxation
                         -                 -                 -
Taxation

                         __________        __________        __________

(Loss) for the           (137)             (277)             (284)
period

                         __________        __________        __________

Attributable to:

                         __________        __________        __________

Equity holders of        (137)             (277)             (284)
the parent

                         __________        __________        __________

(Loss)/earnings per
share

From continuing
operations

Basic and diluted   4    (0.31)p           (0.63)p           0.08p

From continuing and
discontinued
operations

Basic and diluted   4    (0.31)p           (0.63)p           (0.64)p



Unaudited consolidated statement of financial position
As at 28 February 2019


                    Note 6 Months ended 28 6 Months ended 28 Year ended 31 Aug
                                 Feb 2019          Feb 2018     2018 (Audited)
                               (Unaudited)       (Unaudited)

                                     £’000             £’000             £’000

Fixed Assets

Tangible Assets                         10                16                14

Investment Property                    275               275               275
Investments                          5,000                 -             5,000

                                __________        __________        __________

                                     5,285               291             5,289

                                __________        __________        __________

Current assets


Inventories         5                  156               170               156
Debtors                              6,274            11,417             9,949

Cash at bank and in                  3,051             3,204               746
hand

                                __________        __________        __________

                                     9,481            14,791            10,851

                                __________        __________        __________

Current liabilities

Creditors: Amounts
falling due within
one year

Creditors                          (4,958)           (5,130)           (5,878)

                                __________        __________        __________

Total current                      (4,958)           (5,130)           (5,878)
liabilities

Net current assets                   4,523             9,661             4,973

                                __________        __________        __________

Total assets less                    9,808             9,952            10,261
current liabilities
                    6                    -                 -             (318)
Provision for
liabilities

                                __________        __________        __________

Net assets                           9,808             9,952             9,945

                                __________        __________        __________

Shareholders’ funds

Share capital                        2,205             2,205             2,205

Share premium                        2,106             2,106             2,106
account

Capital redemption                      61                61                61
reserve

Share option                            22                22                22
reserve

Retained earnings                    4,964             5,558             5,101
Fair value reserve                     450                 -               450

                                __________        __________        __________

Total shareholders’                  9,808             9,952             9,945
funds

                                __________        __________        __________



Notes to the unaudited financial information

  1. Basis of preparation

The financial information set out in this unaudited interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 August 2018, prepared under FRS 102, have been filed with the Registrar of Companies. The auditor’s report on those financial statements was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

The unaudited interim financial information has been prepared in accordance with the recognition and measurement principles of FRS 102 and on the same basis and using the same accounting policies as used in the financial statements for the year ended 31 August 2018. The interim financial statements have not been audited or reviewed in accordance with the International Standard on Review Engagement 2410 issued by the Auditing Practices Board.

2. Turnover

For management purposes, the Group is organised into different segments being professional construction services and development operations. All turnover is generated in the United Kingdom.

Turnover analysed by category was as follows:


             6 Months ended 28 Feb 6 Months ended 28 Feb Year ended 31 Aug
                  2019 (Unaudited)      2018 (Unaudited)    2018 (Audited)

                             £’000                 £’000             £’000

Professional                14,864                15,846            37,268
construction
services

Development                      -                 1,360             1,361
operations

                        __________            __________        __________

                            14,864                17,206            38,629

                        __________            __________        __________



3. Exceptional Item

Included in the 2018 audited accounts is a provision of £0.318m in relation to a judgement passed by the court to Formation Construction Limited (FCL).  This liability is the sole obligation of FCL, with no recourse to the remainder of the group.

4. Earnings per share


The calculation of basic and diluted loss per share is based on the following losses and numbers of shares:                  


                                 6 Months ended 6 Months ended Year ended 31 Aug
                                   28 Feb 2019    28 Feb 2018     2018 (Audited)
                                    (Unaudited)    (Unaudited)

Basic earnings before                     (137)          (277)                34
exceptional items

Basic loss after exceptional                  -              -             (318)
items

                                     __________     __________        __________

Basic and diluted profit –
continuing and discontinued               (137)          (277)             (284)
operations

                                     __________     __________        __________


                                   Number of 5p   Number of 5p      Number of 5p
                                         shares         shares            shares

                                           ’000           ’000              ’000

Weighted average
number of
shares:

Basic                                    44,103         44,103            44,103

Diluted                                  44,103         44,103            44,887

                                     __________     __________        __________



Profit per share is calculated by dividing the profit for the period attributable to equity shareholders by the weighted average number of shares in issue during the period.

5. Inventories      


                       6 Months ended 28 6 Months ended 28 Feb Year ended 31 Aug
                    Feb 2019 (Unaudited)      2018 (Unaudited)    2017 (Audited)

                                   £’000                 £’000             £’000

Work in progress &                   156                   170               156
stock of properties

                              __________            __________        __________



The inventory is held at the lower of cost and estimated selling price. There has been no impairment of inventories or amounts recognised in the income statement during the period.

6. Contingent liability note

On 4 November 2015, the Health and Safety Executive began an investigation into Formation Construction Limited (FCL) following an accident on one FCL’s construction sites on that date.  Prosecution by the Health and Safety Executive against FCL has now concluded and the financial impact of the court case was provided for in the 2018 audited accounts, as referenced in note 3 above.

The Directors of the Company accept responsibility for the contents of this announcement.

--ENDS--

Enquiries:


Formation Group plc                            Tel: +44 (0) 20 7920 7590
David Kennedy, Chief Executive Officer

Peterhouse Capital Limited (Corporate Adviser) Tel: +44 (0) 20 7469 0934
Fungai Ndoro and Mark Anwyl



Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.