NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

11 April 2018

Flowgroup plc

('Flowgroup', the 'Group' or the 'Company')

Publication of circular and unaudited results

Further to its announcement on 10 April 2018 regarding the conditional sale of Flow Energy Limited ('Flow Energy'), to Co-operative Energy Limited ('Co-op Energy') (the 'Sale'), the Company announces that it has today posted an explanatory circular to Shareholders detailing the Sale, together with a notice of the General Meeting to be held at the offices of Hogan Lovells International LLP, Atlantic House, Holborn Viaduct, London EC1A 2FG at 9.00 a.m. on 27 April 2018, in connection with the Sale. The circular is available to view on the Company's website at http://www.flowgroup.uk.com/

The Company also announces a summary of its unaudited results for the financial year ended 31 December 2017, which have been extracted from unaudited management accounts. The Company expects to issue its full audited 2017 results following completion of the disposal of Flow Energy Limited.

The Group expects to report that in the year ended 31 December 2017, its revenues increased by 40% to £138.1 million (2016: £98.8 million) and a gross profit (before exceptional items) of £8.3 million (2016: £7.1 million). After exceptional items totalling approximately £1.9 million (2016: £22.1 million), the Group expects to report a loss before taxation of approximately £20.8 million (2016 £45.8 million). As at 31 December 2017, net liabilities were £23.6 million (31 December 2016: £14.7million).

The summary unaudited management accounts are set out below:

Unaudited Group Income Statement

Unaudited

Year to 31 December 2017

£'000

Unaudited

Year to 31 December 2017

£'000

Unaudited

Year to 31 December 2017

£'000

Audited

Year to 31 December 2016

£'000

Audited

Year to 31 December 2016

£'000

Audited

Year to 31 December 2016

£'000

Before exceptional items

Exceptional items (Note 2)

Total

Before exceptional items

Exceptional items (Note 2)

Total

Revenue

138,136

-

138,136

98,796

-

98,796

Cost of sales

(129,822)

-

(129,822)

(91,732)

(3,277)

(95,009)

Gross profit

8,314

-

8,314

7,064

(3,277)

3,787

Administrative expenses

(24,929)

(1,919)

(26,848)

(30,612)

(18,823)

(49,435)

Operating loss

(16,615)

(1,919)

(18,534)

(23,548)

(22,100)

(45,648)

Net finance costs

(2,242)

(119)

Loss before income tax

(20,776)

(45,767)

Income tax

360

1,129

Loss for the financial period / year

(20,416)

(44,638)

Unaudited Group Statement of Financial Position

Unaudited as at 31 December 2017

£'000

Audited as at 31 December 2016

£'000

£'000

£'000

ASSETS

Non-current assets

Intangible assets

1,099

1,973

Property, plant and equipment

411

658

1,510

2,631

Current assets

Inventories

-

495

Trade and other receivables

29,873

20,631

Current tax receivable

722

1,231

Cash and cash equivalents

1,134

5,850

31,729

28,207

Total assets

33,239

30,838

LIABILITIES

Non-current liabilities

Borrowings

17,687

2,182

Provisions

536

-

18,223

2,182

Current liabilities

Trade and other payables

37,575

43,402

Provisions

1,027

-

38,602

43,402

Total liabilities

56,825

45,584

EQUITY

Capital and reserves attributable to equity holders of the Company

Share capital

16,983

15,876

Share premium account

67,981

59,238

Accumulated losses

(113,044)

(92,628)

Reverse acquisition reserve

(821)

(821)

Other reserves

5,315

3,589

Total shareholders' equity

(23,586)

(14,746)

Total equity and liabilities

33,239

30,838

Unaudited Group Statement of Cash Flows

Unaudited Year to 31 December 2017 £'000

Audited Year to 31 December 2016 £'000

Cash flows from operating activities

Cash consumed by operations

(27,012)

(6,839)

Cash flows from investing activities

Expenditure on intangible assets

(2,872)

(5,524)

Purchase of property, plant and equipment

(187)

(644)

Interest received

5

13

Net cash used in investing activities

(3,054)

(6,155)

Cash flows from financing activities

Net proceeds from the issue of ordinary shares

9,850

-

Issue of convertible unsecured loan notes

15,500

-

Net cash generated from financing activities

25,350

-

Net decrease in cash and cash equivalents

(4,716)

(12,994)

Cash and cash equivalents at beginning of the year

5,850

18,844

Cash and cash equivalents at end of the year

1,134

5,850

Unaudited Group Statement of Changes in Equity

Reverse acquisi-tion reserve

£'000

Total

Share-holders'

Equity

£'000

Balance at 1 January 2016

15,876

59,238

(47,990)

(821)

2,686

28,989

Share based payments

-

-

-

-

903

903

Transactions with owners

-

-

-

-

903

903

Loss for the financial period

-

-

(44,638)

-

-

(44,638)

Balance at 31 December 2016

15,876

59,238

(92,628)

(821)

3,589

(14,746)

Proceeds from shares issued

1,107

9,954

-

-

-

11,061

Share issue costs

-

(1,211)

-

-

-

(1,211)

Issue of convertible unsecured loan notes

-

-

-

-

1,038

1,038

Share based payments

-

-

-

-

688

688

Transactions with owners

1,107

8,743

-

-

1,726

11,576

Loss for the financial period

-

-

(20,416)

-

-

(20,416)

Balance at 31 December 2017

16,983

67,981

(113,044)

(821)

5,315

(23,586)

Notes to the Unaudited Group Management Accounts

1 Basis of preparation and accounting policies

The financial information for the year ended 31 December 2017 has been extracted from unaudited management accounts and does not constitute the Group's financial statements. Financial statements for the year ended 31 December 2017 have not yet been prepared, audited or delivered to the Registrar of Companies.

The accounting policies used in the preparation of the unaudited financial information are consistent with those used in the interim report for the 6 months ended 30 June 2017 and expected to be adopted in the annual financial statements for the year ended 31 December 2017.

The comparative figures are derived from the Group's financial statements for the year ended 31 December 2016 which carried an unqualified audit report, did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006 and have been filed with the Registrar of Companies.

2 Exceptional items

Unaudited

Year to 31 December 2017 £'000

Audited

Year to 31 December 2016 £'000

Adjustments to recognised assets and liabilities

(483)

22,100

Reorganisation costs

2,402

-

1,919

22,100

Further reorganisation costs comprising redundancy, empty property and contract settlements have been recognised during the year ended 31 December 2017 in respect of both the Flow Products and Flow Energy businesses. Adjustments to recognised assets and liabilities comprise the net of release of previous provisions, the gain on the settlement of long term creditors and the write off of fixed assets.

Exceptional items recognised during the year ended 31 December 2016 arise from the scaling back of the operations of the Flow Products division and comprise reductions in the balance sheet value of inventories and intangible assets together with adjustments to the carrying values of directly related prepayments and liabilities.

Enquiries

Flowgroup plc

Alan Lovell, Chairman

Nigel Canham, Chief Financial Officer

Smith Square Partners LLP (Financial adviser)

Jonathan Coddington / Matt Alexander

Cenkos Securities plc (Nominated adviser and broker)

Stephen Keys / Mark Connelly / Callum Davidson (Corporate Finance)

Walbrook PR Ltd (Financial PR advisers)

Paul McManus / Nick Rome

+44 (0)20 3817 3637

+44 (0)20 3696 7260

+44 (0)20 7397 8900

+44 (0)20 7933 8780

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Flowgroup plc published this content on 11 April 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 11 April 2018 09:36:08 UTC