TIDMADF
RNS Number : 9796X
Facilities by ADF plc
02 May 2023
2 May 2023
Facilities by ADF plc
("Facilities by ADF", "ADF", the "Company" and together with its
subsidiaries the "Group")
Final results for the year ended 31 December 2022
Facilities by ADF, the leading provider of premium serviced
production facilities to the UK film and high-end television
industry ("HETV"), is pleased to announce its audited final results
for the year ended 31 December 2022.
Financial highlights
GBPM's 31 Dec 2022 31 Dec 2021 31 Dec 2020
------------------ ------------ ------------ ------------
Group revenue 31.4 27.8 8.0
*Adjusted EBITDA 8.0 7.7 0.8
*Adjusted EBITDA
% 25% 28% 10%
Profit/(loss)
before tax 4.6 2.8 (0.5)
E arnings per
share 6.1p 3.2p (0.1)p
Operational highlights
-- ADF supported 76 productions (FY21 39 productions), including
The Crown season 5, Slow Horses, Everything I know about
Love, The Sandman, Sex Education and Happy Valley.
-- H1-FY22 saw a larger number of shorter productions more
geographically spread than in H2-FY22, resulting in additional
budgeted transport costs but H2 productions were larger
and more clustered around London resulting in improved
margins. The Group generated an average revenue value
of GBP386k per production.
-- GBP15m was raised for expansion capital at IPO (January
2022) and to date GBP9.2m has been invested in new revenue
generating vehicles. During FY22, ADF added 136 vehicle
units, bringing the total vehicle fleet to 632 by year
end.
-- Successfully acquired Location One, the UK's largest
integrated TV and film location service and equipment
hire company, providing expanded growth opportunities
across the UK and bringing highly complementary services
to ADF.
-- ADF opened a new office at Pioneer Films studio in Scotland;
and doubled capacity at its Bridgend manufacturing facility,
expanded ADF's UK geographical reach.
-- ADF opened its new flagship five-acre operational hub
at Longcross, Surrey which is perfectly located to serve
several major studios.
-- A final dividend of 0.90 pence per share, reflecting
the Group's strong cash position and confidence in trading,
is proposed to be paid (subject to shareholder approval
at the 2023 AGM) on 30 June 2023 to shareholders who
are on the register at the close of business on 16 June
2023.
Outlook
-- Underlying market drivers continue to provide confidence
that the demand for ADF's services will continue to expand
for the foreseeable future.
-- The Group remains committed to growth and will continue
to review further acquisition opportunities in line with
its strategy.
-- Healthy underlying growth of the newly enlarged Group
provides the management team with confidence to invest
further in its people and service offerings, while continuing
to manage the impacts of inflationary environment presently
faced.
-- The FY23 order book is strong, indicating a continuation
of the H2-FY22 profile, with larger productions generating
higher revenue per job. The Group is presently taking
orders for Q1 and Q2 FY24 providing strong levels of
revenue visibility for the year.
-- Trading in the current year is in line with expectations
and management is confident in delivering FY23 financial
results in line with current market expectations(1) .
Commenting on the results, Marsden Proctor, CEO, said:
"Our first full year as a listed business has been one of
operational and financial success, and I am incredibly proud of
what the ADF team has achieved in the current difficult economic
backdrop. We have continued to successfully execute our growth
strategy through continued investment in our revenue generating
fleet, the acquisition of Location One, and through our geographic
expansion across the UK.
"Following a strong end to FY22, we have continued to trade
positively in the new financial year, with an expanding order book
and considerable momentum across the whole business. We have a
growing addressable market, an expanding network of contacts and a
high-quality business model driving growth in Group revenue.
Alongside positive market drivers, where demand for film and HETV
in the UK continues to accelerate, I am confident in the Group's
ability to deliver on its strategy and plans in FY23."
1. Current market expectations are revenue of GBP47.6 million
and adjusted EBITDA of GBP12.3 million.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
take responsibility for this announcement.
For further enquiries:
Facilities by ADF plc via Alma PR
Marsden Proctor, Chief Executive Officer
Neil Evans, Chief Financial Officer
John Richards, Chairman
Cenkos (Nominated Adviser and Broker) Tel: +44 (0)20 7397
Ben Jeynes / Max Gould / George Lawson - 8900
Corporate Finance
Alex Pollen - Sales
Alma PR (Financial PR) Tel: +44 (0)20 3405
Josh Royston 0205
Hannah Campbell facilitiesbyadf@almapr.co.uk
OVERVIEW OF FACILITIES BY ADF Group
Facilities by ADF plc is the leading provider of premium
serviced production facilities to the UK film and high-end
television industry ("HETV"). Its production fleet is made up of
over 600 premium mobile make-up, costume and artiste trailers,
production offices, mobile bathrooms (known as honey wagons),
diners, school rooms and technical vehicles. The Group provides
these production facilities and additional services after a
planning process with its customers held in advance of filming. In
servicing productions, ADF staff are available on site and each
production is allocated an account manager who acts as a single
lead point of contact during filming.
In December 2022, ADF acquired Location One Ltd, the UK's
largest integrated TV and film location service and equipment hire
company, bringing highly complementary services and providing cross
selling opportunities to the enlarged Group, as well as delivering
efficiencies through central services.
The Group serves customers in an industry that has experienced
significant growth in recent years, with additional demand driven
by a material rise in the consumption of film and HETV content via
streaming platforms such as Netflix, Disney, Apple and Amazon
Prime. The UK film and TV industry has directly benefited during
this growth due to the quality of its production facilities and
studios, highly skilled domestic workforce, geography,
accessibility to Europe, English language environment and strong
governmental support. Major US streaming companies have now set up
permanent bases in the UK, with the UK now Netflix's third largest
operation after the USA and Canada.
Chairman's statement
Overview
Facilities by ADF PLC (Hereinafter referred to as ADF) has
delivered another year of solid growth, fuelled by high levels of
fleet utilisation, an increased number of larger productions in
H2-FY22, and the successful acquisition of Location One, to
strengthen the Group's position as the leading provider of premium
serviced production facilities to the UK film and HETV
industry.
The Group's strong financial performance during our first full
year as a listed business is evident by the revenue growth of 13%
to GBP31.4m (FY21 GBP27.7m) and adjusted EBITDA growth to GBP8.0m
(FY21 GBP7.7m) reflecting the continued positive momentum across
the business in H2-FY22.
Despite the current macro-economic environment, demand for our
products remain strong as the UK's film and HETV market continues
to accelerate through studio space expansion and inward investment
from global production companies. As a result, the Group's order
book remains strong as we continue to find ourselves at the
forefront of increasing competition for subscribers amongst the
leading global streaming companies.
Strategy
The Group has ambitions to grow our revenue to over GBP100
million and we intend do this through organic means by investing in
revenue generating fleet equipment, as well as inorganically
through appropriate acquisitions and I am pleased to report that
Location One represented ADF's first successful acquisition in
delivering this strategy.
Location One is the UK's largest integrated TV and film location
service and equipment hire company. Its integration is progressing
as planned and is performing in line with the Board's expectations.
The acquisition will enable further expansion across the UK and
brings highly complementary services to ADF which provide a wealth
of cross selling opportunities to the enlarged Group, as well as
deliver efficiencies through central services. As a Board, we
believe this is a significant step in becoming the premium
one-stop-shop for film and HETV.
Having raised GBP15.0m at IPO in January 2022, to date we have
invested GBP9.2m in new revenue generating fleet, GBP4.0m of which
was spent on Hire Purchase assets and invested an initial cash
consideration of GBP4.4m for the acquisition of Location One in
November 2022. Going forward, the Group will continue to invest
wisely seeking to meet customer demand and drive further business
growth.
Market opportunity
UK market growth continues to be buoyed by a highly skilled
workforce, strong Government support, a long history of film and TV
production, favourable tax treatment and the unprecedented levels
of investment in UK studio space and content, which bodes well for
the Group's future growth ambitions. HETV has been in the vanguard
of this growth and ADF has been and continues to be well positioned
to capitalise on this opportunity.
Apple at Aylesbury, Disney at Pinewood, Netflix at Shepperton
and Longcross, and Sky at Elstree, along with many others, have
added significant additional capacity to UK film and HETV
production capacity. The Group's five-acre hub at Longcross became
fully operational in Q4 FY22. This new site is perfectly located to
serve all these production sites. The Group also opened a new
office in Glasgow, set in Pioneer Film Studios' campus, Scotland's
newest and largest film studio. The office was opened to capitalise
on the growing market as global production companies are
increasingly choosing Scotland for its natural landscapes and to
utilise its strong creative sector.
People
We have continued to invest in the expansion of our senior
leadership team to ensure we have the depth and breadth of
management to deliver our growth strategy and have been encouraged
by the immediate positive contribution that the new team members
have made.
In May 2022, we appointed Alexandra Innes to the Board as an
independent Non-Executive Director. Following a career in banking,
Alexandra has already proven to be a valuable addition to our Board
as we seek to drive the business forward in its next phase of
growth.
In the current macro-economic environment, our priority
continues to be the wellbeing of our teams around the UK, providing
them with the best environment to continue to deliver the
high-quality service that our customers expect of ADF. On behalf of
the Board, I would like to take this opportunity to thank all
members of staff for their dedication and commitment to making
Facilities by ADF what it is today.
ESG
Like many businesses, Facilities by ADF is committed to
activities that have a positive impact on our employees and
society, and we aim to reduce our environmental impact through
collaborating with stakeholders towards a low carbon production
industry. As a Board, we are proud to have been the first
facilities provider in Europe that is approved by Albert, the
authority on environmental sustainability for the film and
television industry, which is a clear endorsement of the Group's
ESG strategy. Being approved by Albert is becoming ever more
important as studios will only allow approved vehicles on site.
Location One is also an approved Albert supplier and on a journey
to net-zero with impressive sustainability credentials.
As we embark upon a journey to ultimately become a
carbon-neutral operator in the future, we have partnered with
Creative Zero, a sustainability organisation, to undergo a carbon
audit to better understand our impact on the environment. We are
also working with our clients and suppliers to reduce the footprint
of our operations, helping to deliver an environmentally
sustainable media industry.
Working with Creative Zero, we aim to report against SECR
guidelines. Facilities by ADF and Location One's footprints are
currently separate with no shared energy usage and emissions across
the organisations, but there is a real opportunity to reduce carbon
emissions across the Group in an integrated way. These
opportunities will be maximised moving forward and the carbon
footprint and carbon reduction plan exercise that is underway will
provide the data required for the SECR submission to be prepared by
April 2024.
Post period end, we launched our first Employee Satisfaction
Survey to measure and improve employee wellbeing. We are in the
process of re-launching our Company Values and Mission Statement,
to ensure our employees can reach their full potential. As part of
this, we are launching a wellbeing policy to provide guidance and
advice to staff on the support that is available, including support
for financial wellbeing.
The Company already offers an Employee Assistance Programme via
an external provider and has also invested in the training of three
Mental Health First Aiders to support and signpost employees to
professional assistance if required.
In addition to wellbeing, the health & safety (H&S) of
our staff as well as our customers and contractors, is a key focus
for ADF. We have an established H&S framework and resources in
place to ensure that the conduct of the business ensures the lowest
level of risk. The Group has a full-time H&S Coordinator,
reporting to the CFO, who in turn reports H&S matters to the
Board. Detailed accident reporting is maintained, all incidents are
investigated, and procedures changed where necessary.
The Company appointed Safety Forward, external H&S
consultants and auditors, in 2022 to assist with the development of
our H&S framework. Our 12-month plan outlines the key areas of
focus for 2023 to include H&S structure, training and
development, risk management, audit, and review.
We have worked on a number of projects with our production
clients to improve the safety and accessibility on site. ADF joined
forces with the TV Access Project (TAP), created to actively work
towards achieving a more inclusive television production sector for
disabled talent. The TV Access Project is an alliance of 11
Broadcasters and Streamers led by the BBC and Channel 4 working
alongside creative talent with disabilities in the industry to
create sustainable change.
As a Board, we are dedicated to maintaining our strong corporate
governance framework. Following our IPO, we have chosen to adopt
the QCA Corporate Governance Code, which will help to inform the
evolution of our governance approach in future. The appointments we
have made to the Board are a clear demonstration of this commitment
and we will continue to ensure this remains as we grow as a listed
business.
Outlook
This year ADF has become a more robust business, with a greater
ability to capture the growing opportunity within the UK Film and
HETV industry, through investment in our vehicle fleet and the
acquisition of Location One. We are successfully delivering against
our growth strategy to move ADF closer to becoming a 'one-stop
shop' for film and TV producers and we are excited about the
opportunities that lay ahead.
The prospects for ADF are increasingly positive and we have
entered FY23 in a very strong position with considerable momentum
across the business, managing inflationary pressures, with trading
in the first few months of the year in line with the Board's
expectations. The supportive market dynamics, expanding partner
network and proven offering, underpin the Board's confidence of
delivering sustainable revenue growth and is confident in
delivering FY23 financial results in line with current market
expectations.
John Richards
Chairman of the Board
CEO review
Overview
I am incredibly proud of the successes achieved during our first
full year as a listed business by our fantastic team, against a
challenging economic backdrop. We made our first acquisition,
expanded into Scotland and opened our new operational hub at
Longcross, demonstrating our continuing delivery of our growth
strategy. We experienced increased demand for our services,
resulting in revenue growth of 13% year on year, and have continued
to invest wisely in our business. The successes delivered during
the year have moved the business closer to becoming a one-stop-shop
for film and TV producers as we strengthen our position as the
leading provider of premium serviced production facilities to the
UK film and HETV industry.
Our progress in the year was supported by the acceleration of
both the film & HETV markets, which was a record year for the
industry, and we anticipate this growth will continue for a number
of years in the future. We have seen a huge influx of investment in
recent years, with additional demand driven by a rise in the in the
consumption of film HETV content via global streaming platforms
such as Apple TV+, Netflix, Disney +, Sky TV and Amazon Prime. The
UK film and TV industry has directly benefited due to the quality
of its production facilities and studios, a highly skilled domestic
workforce, geography, accessibility to Europe, English language
environment and strong governmental support and, ADF continues to
be the provider of choice for many global production companies
filming in the UK.
The prospects for ADF and its Group are increasingly positive
and we have entered FY23 in a very strong position. We have a
growing addressable market, an expanding network of contacts, an
enhanced offering and a high-quality business model driving growth
in Group revenue. These factors, coupled with a strong order book,
underpin management's confidence in the long-term success of
ADF.
Financial performance
The strong financial performance in the year reflects the
ongoing demand for the Group's services. We raised GBP15m of growth
capital at IPO (January 2022) and to date have invested GBP9.2m in
new revenue generating vehicle fleet, GBP4m of which were spent on
Hire Purchase assets. We expect capital expenditure to be at a
similar level in FY23 as we look to keep up with demand and drive
further growth.
In 2022, we achieved Group revenues of GBP31.4m (FY21 GBP27.7m)
and adjusted EBITDA of GBP8.0m (FY21 GBP7.7m) with continued
positive momentum across the business in H2-FY22. The distribution
of productions in H1-FY22 saw a larger number of shorter
productions more geographically spread than in H1-FY21 with a
greater need for mobilisation of our vehicle fleet to service our
jobs which caused a rise in our cost base, but as anticipated, we
delivered the growth opportunities in H2-FY22 through larger
productions with higher revenue per job. The larger productions
were clustered around the main studios close to London, and as a
result, the EBITDA margin for H2-FY22 was 28% compared with 21% in
H1-FY22 (delivering 25% across the year).
Overall, from the 76 productions for FY22 (FY21 39 productions)
the Group generated an average revenue value of GBP386k per
production compared to GBP682K in FY21. The typical lead time for
booking productions remains at seven months and our FY23 order book
continues to be strongly populated.
Growing market opportunity in an expanding industry
We operate in an industry that has experienced significant
growth and investment in recent years, underpinned by the success
of HETV. The rise of global streaming platforms has culminated in a
material increase in the consumption of films and HETV.
There continues to be an influx of inward investment and
co-production spend in the UK, as we see the demand for content
reaching record levels. The UK has become a major hub for
international clients, with the UK being Netflix's third largest
operation after the USA and Canada, which bodes well for our growth
ambitions.
As part of the UK's Spring Budget in March 2023, the Chancellor
of the Exchequer revealed that the Government is raising film and
HEVT tax credits and keeping the qualifying threshold in place.
This was a welcome move for the TV production community and clearly
demonstrates Government's recognition of and commitment to the
continued growth and success of the UK's film and HE-TV sector.
Recent studio projects in the UK include Stage Fifty's third
studio. The UK-based studio operator & owner is building an
eight stage 295,000sq ft studio in High Wycombe, Buckinghamshire.
In the North, property developers CAPITAL&CENTRIC alongside
Twickenham Studios are planning to build a major filming
destination at the old Littlewoods headquarters in Liverpool. The
GBP50m project will feature two new 20,000sq. ft sound stages,
supporting workshops, prop storage and offices, and support over
2,000 industry jobs across the city.
In Q4 FY22, we opened our first office in Scotland, set at
Pioneer Film Studios, the country's largest film studio, in
response to the recent growth in the film and HETV market in the
region. Films including Aftersun, 1917, My Old School and
television shows such as Guilt, Good Omens and Vigil, have all
originated or benefited from Scotland's production sector in recent
years as global productions increasingly choose the country's
natural landscape and utilisation of its strong creative sector.
Screen Scotland has predicted that the value of the Scottish screen
sector could reach GBP1 billion by 2030 provided that the current
levels of investment, infrastructure and talent development remain
maintained. As such, our new base at Pioneer will not only
strengthen the Group's regional presence alongside global
production companies, with the support of Pioneer Films Studio, ADF
will also be able to capitalise on the growing activity in one of
the largest emerging markets within the UK Film and TV industry. I
am also pleased to share that Location One has also now opened a
branch at the studio alongside ADF to enable the enlarged group to
offer its complementary services to the range of productions
scheduled to be filmed at Pioneer.
In terms of the overall performance of film and TV production in
the UK, the British Film Institute ("BFI") recently reported for
the year ended 31 December 2022 that the combined total spend on
film and HETV production in the UK for 2022 was GBP6.27 billion
from 415 productions. This is the highest combined film and HETV
spend reported for a year. The statistics which are reported on
further in the financial review, demonstrate the strength and
ongoing resilience of the UK's screen sectors, reinforcing the
industry's globally recognised position as a first-class production
centre and underpins management's confidence in the prospects for
ADF.
Competitive strength
We are already the provider of choice for many in the UK for
large scale and quality productions, which has allowed us to
benefit from high valued productions and customers. This market
position has taken many years to establish, and we have the right
infrastructure in place to support continued successful customer
delivery and further expansion. To deliver such a high quality of
service to our customers and successfully compete at this level,
the quality of a supplier's vehicle fleet needs to be incredibly
high. ADF prides itself upon the strength of its vehicle fleet and
customer service, which has led to ADF having positive direct
relationships with some of the world's largest traditional and
on-demand production companies and positions us well to capture a
growing proportion of the expanding market. ADF has won several
contracts for future productions through its existing customers and
being able to retain these valued customers we recognise is
critical element of our future success.
We worked on 76 productions this year, including Slow Horses,
Everything I know about Love, The Sandman, Marvels Secret Invasion,
I Hate Suzie, Sex Education, Happy Valley, Troubled Blood and A Spy
Amongst Friends to name a few. Delivering an excellent service and
maintaining strong relationships with all our customers we
recognise is essential in our ability to meet and deliver their
future projects and grow our business.
Our flagship five-acre operational hub at Longcross, Surrey was
officially opened in Q4 FY22. The site is perfectly located to
serve all major studios near Longcross, including Shepperton
Studios, Pinewood Studios, Leavesden Studios, and Elstree studios
and demonstrates commitment to our growth strategy.
We also expanded the capacity of ADF's Bridgend depot as part of
our expansion plans. The workspace was expanded with a new 5,400
sq. ft factory unit, bolstering our current 9,000 sq. f. of
available floor space currently available, and will employ key
personnel from the local area, encouraging strong regional
relationships within the Welsh Film Industry and helping to further
facilitate sales.
We report our Net Promotor Score (NPS), an internationally
recognised customer service measurement, throughout the year, with
an overall NPS score of 88, a figure which Bain & Company, the
creators for NPS, has described as 'world class'. We continue to
perform extremely well, reflecting the skills, knowledge and
expertise of our staff that enables us to be a market leader.
Delivering against growth strategy
The Group has ambitions to grow organically through further
investment into its revenue-generating vehicle fleet, and
inorganically through appropriate acquisitions, and I am pleased to
report we have successfully executed on both during the year, with
the key highlight being the acquisition of Location One, which
completed in December 2022.
The acquisition of an integrated equipment hire company provide
complementary services to that of ADF, having worked together since
2008. Location One's customer base includes Amazon Studios,
Netflix, Warner Brothers and the BBC and together, we have worked
on a number of productions including, The Crown, Top Boy, Lazarus,
Becoming Elizabeth, Slow Horses, My Lady Jane, and The Gentleman.
Given the excellent track record of working together on productions
across the UK, the programme of integration is already underway and
progressing as planned. The main commercial benefit of the
acquisition is sharing our industry contacts and moving Location
One into our advanced production network pipeline which is already
bearing fruit with a number of successful joint bids. We are also
working on streamlining our processes to ensure best practice
across several departments, including HR and Finance. With both
businesses committed to providing high-quality equipment and
customer service levels, along with having similar cultural values
and impressive sustainability credentials, we are particularly
excited by the strategic fit of the two organisations.
This acquisition will enable us to provide the very best
services the industry has to offer under one roof, and I believe it
moves us towards becoming a one-stop-shop to the UK TV and HETV
industry.
Our IPO raised the Group's profile across our industry and as a
result has presented us a number of acquisition opportunities
worthy of consideration for our Group and I would like to thank
shareholders for their continued support in allowing us the
opportunity to help the business to grow in line with our
strategy.
People
We will always maintain that our employees are the most
essential asset of ADF and are key to the Group's long-term
success. We have made a successful start as a listed business and
our employees are at the centre of that success. We made several
key senior management appointments in the year, including Andrea
Browning as the Head of HR, Rhys Thomas as Head of Fleet, Ross
McDiarmid as Deputy Chief Financial Officer and Janis Arents as IT
Manager. In May 2022 we also announced the appointment of Alexandra
Innes as an independent Non-Executive Director. Alexandra's
executive career spanned investment banking, global capital
markets, and investment management across several sectors, which
will be invaluable to us, as we continue to grow. Currently,
Alexandra is a Non-Executive Committee Member at the Bank of
England, a member of the Group Executive Board at Knight Frank LLP,
and a Non-Executive Director of Dowlais Group plc, Waverton
Investment Management Group Ltd, Securities Trust of Scotland plc,
and Schroder Real Estate Investment Trust Ltd.
ESG
Both Location One and ADF continue to work with pivotal
organisations to support the next generation of crew talent across
the industry. Location One's Managing Director Crispin Hardy helped
facilitate the Barking & Dagenham 'Skills for Screen' Careers
Day at Eastbrook Studios during the year which was attended by over
700 secondary school children and their parents. Alongside Location
One, we are also currently supporting the Film Skills and NFTS
Teaching Programme by delivering modules on unit base operation,
including how to further reduce carbon emissions and achieve zero
waste.
We have also continued our support of Screen Alliance Wales
(SAW), which is the gateway between the industry and its workforce
to grow and promote local talent, crew and services of the film and
TV industry in Wales. We are working with SAW and Cardiff and Vale
college to establish a fully funded HGV training programme designed
to specifically address the current national shortage of HGV
drivers and to help generate a much-needed pipeline of new HGV
drivers into the Creative Industries sector in Wales. We already
have a number of current employees who have signed up for a
Personal Learning Account (PLA) in order to progress their
qualification.
We have also continued to strengthen our relationship with The
Production Guild of Great Britain (PGGB) to increase their reach
across the UK and we have introduced PGGB to both national and
regional committees, and we are proud to sponsor the Wales &
Southwest regions. This is proving valuable for local talent
pipelines and production services, while the work of our 'Diversity
and Inclusion Action Group' (DIAG) underpins all that they do.
We are also working closely with Underlying Health Conditions
(UHC), a pressure group for disabled representation in the TV &
Film Industry and have started to manufacture, supply wheelchair
access Honey wagons as well as adapted American 2-ways.
In 2022, we also joined forces with the TV Access Project (TAP),
created to actively work towards achieving a more inclusive
television production sector for disabled talent. The TV Access
Project is an alliance of 11 Broadcasters and Streamers led by the
BBC and Channel 4 working alongside disabled creatives in the
industry to create sustainable change. It has been formed in
response to the campaign by UHC. ADF will continue to work with UHC
and TAP to listen, learn and make changes that will make a
difference, such as our Wheelchair Accessible Honey wagon and
bespoke adaptions to artiste trailers depending on the user's
requirements. TV and production manager Katie Player noted that
"ADF have created an exceptional asset. By thinking about
accessibility throughout the design process everything is
integrated so brilliantly. UHC are delighted to be supporting ADF
in their efforts to bring about change the industry requires".
Cost of living
We are mindful of the challenging economic environment in 2022
and the impact that this has had, and continues to have, on our
workforce. To support our colleagues, we have conducted a market
review of pay rates on a regular basis, increasing the salaries of
those that fell below the market rate. We have also identified our
lowest paid employees and increased salaries of those employees by
at least 10% over the National Minimum Wage levels set in April
2023. Furthermore, all employees are eligible to participate in the
informal Reward Scheme where they are nominated by their line
manager or peers for going above and beyond in their role. We are
also launching our Wellbeing policy which provides guidance and
advice to employees on the support that is available, including
support for Financial Wellbeing. This policy also links into
various events and awareness campaigns throughout the year.
Outlook
I am incredibly proud of what the ADF team has achieved against
the continued challenging economic backdrop. We have delivered
growth through investment in our revenue generating vehicle fleet,
the acquisition of Location One and through geographic expansion
across the UK. We continue to secure new business through our
expanding network of contacts and with a very encouraging market
backdrop, we are confident that the demand for our services will
continue to accelerate.
Following a strong conclusion to FY22, we have continued to
trade positively in FY23, with strong order book and customer
pipeline, lending considerable momentum across the business. We
remain in a robust position and look to the future with confidence
as the UK continues to establish itself as a major hub for our
industry, presenting a significant opportunity for ADF to
capitalise on this expanding market.
Marsden Proctor
Chief Executive Officer
CFO Review
ADF's results for the year reflect our strong market position
and the continued growth within the Film & HETV in the UK in
2022, which was a record year for the industry following the
previous record year set in 2021.
In our first year as a listed company, ADF made its first major
acquisition, of Location One, the UK's largest integrated TV and
film location service and equipment hire company and opened its
brand new flagship operational Hub at Longcross, Surrey, which is
perfectly located to serve several major studios. The successes
seen this year demonstrate our commitment to continue to deliver on
our growth strategy.
Revenue
ADF's revenue increased by 13% in FY22 compared to FY21, despite
FY21 being a record year with - significant pent-up demand for
content following the prolonged studio closures in 2020 owing to
the COVID-19 pandemic. The table below shows the revenue split out
between the 3 main headings, being main packages, additional sales,
plus other miscellaneous income.
Inc.
Turnover GBPM's 2022 2021 %
Main packages GBP18.5 GBP15.6 18.9%
Additional sales GBP12.6 GBP11.8 6.4%
Other income GBP0.3 GBP0.4 -22.2%
Total GBP31.4 GBP27.8 13.0%
Uplift % 75.2% 75.6% -0.2%
------------------ -------- -------
Main Package Sales
Main packages comprise of the pre-booking of the base level of
equipment required for the duration of a production with each asset
being charged at a set daily hire rate for the number of days of
filming. Main packages also include the hire of ADF staff to manage
and service the equipment - this is also calculated by reference to
a set daily hire rate. The daily hire charges for equipment and
staff are set annually and incremented in line with market
rates.
Additional Sales
The main package will not include the cost of the planned (or
unplanned) moves for a production. Any additional equipment and
staff required during the filming period, and the labour cost of
all equipment moves are then charged out weekly during the filming
period. Fuel for moves and consumables are also part of the
additional sales. In FY22, the value of these additional sales was
in excess of 75% and in line with the levels seen in FY21.
UK Film & HETV
The British Film Institute (BFI) recently reported that for the
year ended 31 December 2022:
-- The combined spend by film and high-end television production
(HETV) during 2022 reached GBP6.27 billion, the highest ever
reported and GBP1.83 billion higher than for the pre-pandemic year
2019.
-- The lion's share of the total GBP6.27 billion spend was
contributed by HETV production with GBP4.30 billion, or 69%; with
feature film production contributing GBP1.97 billion, or 31% of the
total spend.
-- Inward investment films and HETV shows delivered GBP5.37
billion, or 92% of the combined production spend underlining the
UK's global reputation as the world-leading centre for film and TV
production.
90% of ADF's sales in 2022 were in HETV (2021: 92%).
The table below shows the progression of spend in the TV &
Film Industry in the UK since 2018. The drop off in 2020 was due to
the 3-4 months that the industry was closed for the first national
COVID-19 lockdown. The red line shows the number of film and TV
productions in the year.
UK Film & HETV Spend 2018 2019 2021 2022
---------------------- ------- ------- ------- -------
Spend GBPBn GBP3.6 GBP4.4 GBP6.1 GBP6.3
No. of productions 518 544 525 415
---------------------- ------- ------- ------- -------
Revenue Seasonality
In FY22, consistent with previous years there is a degree of
seasonality with a steady build up to the key summer months when
outdoor filming on location is more reliable, typically with
improved weather conditions. December is a quiet month for trading
as productions wind down for Christmas. However, unlike the last 3
years, revenue remained at a higher level than recorded before in
Q4, in line with forecast productions.
Quarterly Sales GBPM's 2019 2020 2021 2022
------------------------ -------- ------- -------- --------
Q1 GBP3.3 GBP2.4 GBP5.3 GBP5.9
Q2 GBP3.8 GBP0.0 GBP6.2 GBP6.8
Q3 GBP4.1 GBP1.8 GBP9.0 GBP8.6
Q4 GBP4.7 GBP3.9 GBP7.2 GBP10.2
GBP15.9 GBP8.1 GBP27.8 GBP31.4
------------------------ -------- ------- -------- --------
Revenue Mix
In FY21, ADF worked on just 39 productions with an average
revenue value of GBP682k and average duration of 22 weeks, which
was a significant increase on the pre-Pandemic average. However,
most productions were studio based with the ongoing disruptions
from COVID-19, and hence with limited movement across locations in
the UK.
In FY22 ADF worked on 76 productions - on average these were
shorter length productions than 2021 at 15 weeks, hence with a
lower average revenue value of GBP38kK. The majority of the shorter
length productions occurred in the first half of the year and were
more spread around the UK. The second half of the year saw a return
to longer and higher revenue generating projects.
Production FY22 FY21
Value
GBP0 - GBP500K 54 19
----- -----
GBP500K - GBP1.0M 16 13
----- -----
GBP1.0M - GBP1.5M 4 4
----- -----
GBP1.5M - GBP2.0M 1 1
----- -----
GBP2.0M - GBP2.5M - 1
----- -----
GBP2.5M - GBP3.0M 1 1
----- -----
T otal productions 76 39
----- -----
Direct Costs & Gross Profit
Direct costs comprise a number of significant elements.
-- Direct payroll which includes ADF staff based at production
sites (studios and on location) who manage and service the
equipment, together with HGV drivers to move equipment between
locations, and staff employed in our workshops, body shop and
trailer manufacturing plants. Direct payroll costs in FY22 were
27.9% of revenue, compared with 28.2% in FY21.
-- Repair & running costs for motor vehicles & trailers
which comprise 4.8% of revenue (FY21: 4.6%)
-- Fuel for transport between productions, which experienced
significant increases across FY22, comprised 7.3% of sales
(FY21:5.4%). Fuel costs for production moves are charged out on a
cost plus basis.
-- Agency driver costs - ADF relies on agency partners to
supplement location moves and its general transport requirements.
Costs were 15.0% of revenue in FY22 (12.5% in 2021). This was in
line with budget, with agency rates having undergone some
industry-wide increases in late 2021 due to a well-publicised
shortfall of HGV drivers as we came out of the COVID-19 pandemic.
These agency rate increases have since levelled off as HGV driver
shortfalls have eased.
The overall gross margin for - FY22 was 37.3% (FY21: 39.1%).
Administrative Costs
Administrative costs comprise payroll for executives, management
and office-based staff, rent & facility related costs for the
sites that the company operates from, depreciation &
amortisation, and various other overheads.
Administrative expenses in FY22 were 11.9% of revenue (FY21:
11.2%) including the significant additional costs of operating as a
publicly listed company which were absent in 2021 and prior to the
Company's admission to trading on AIM.
Share Based Payments & Non-Recurring Expenses
The share-based payments relate to certain options granted to
the 2 current executive directors. The non-recurring expenses
relate to the advisory costs in relation to the acquisition of
Location One Group.
Adjusted EBITDA
In addition to measuring financial performance of the Group, we
also measure performance based on EBITDA and Adjusted EBITDA.
EBITDA is defined as the Group's profit or loss before interest,
taxation, depreciation, and amortisation. Adjusted EBITDA is
defined as EBITDA, before specific items; non-recurring expenses,
and share based payment expenses. EBITDA is a common measure used
by investors and analysts to evaluate the operating financial
performance of companies.
We consider EBITDA and Adjusted EBITDA to be useful measures of
operating performance because they approximate the underlying
operating cash flow by eliminating depreciation and amortisation.
EBITDA and Adjusted EBITDA are not direct measures of our
liquidity, which is shown by our cash flow statement, and need to
be considered in the context of our financial commitments.
A reconciliation of reported profit for the period, the most
direct comparable IFRS measure, to EBITDA and Adjusted EBITDA, is
set out below.
Adjusted EBITDA
(GBP000's) 2022 2021
------------------------------ ------ ------
Profit/(loss) before
tax 4,615 2,794
Add back:
Finance expenses 702 358
Depreciation & amortisation 2,513 1,922
Non-recurring expenses 78 1,322
Share based payment
expense 59 1,332
Adjusted EBITDA 7,967 7,728
------------------------------ ------ ------
Adjusted EBITDA
% 25.4% 27.8%
------------------------------ ------ ------
Cash Flow and Net Debt
Operating cash flow before movements in working capital was
GBP4.6M in FY22 (FY21 - GBP2.8M). Cash generated from operations
was GBP4.3M in 2022 (2021 - GBP8.6M).
At 31 December 2022, net debt (borrowings less cash, including
IFRS16 property 'loans') was GBP11.7M, compared to GBP7.6M at the
prior year end. The increase is predominantly down to the
application of IFRS16 to the new Operational Hub at Longcross which
is a substantial 15 year lease agreement.
Facilities by ADF Plc remains a highly cash-generative
business.
Cash Flow & Net
Debt (GBPM's) 2022 2021
-------------------- ------- -------
Cash Flow:
Cash balances B/F 4,987 1,254
Movement 4,531 3,733
Cash balances C/F 9,518 4,987
-------------------- ------- -------
Debt:
Hire Purchase 12,944 11,574
IFRS16 Leases 8,285 691
Bank loans 0 342
Total 21,229 12,607
-------------------- ------- -------
Net Debt 11,711 7,620
Net Debt (excl.
IFRS16) 3,426 6,929
-------------------- ------- -------
Acquisition of Location One
ADF acquired Location 1 Group Limited on 30 November 2022 for
GBP8.9m. A program of integration is under way, streamlining
process and jointly adopting best practices in certain areas. We
are also assessing the possibility of merging one of their sites in
London with ADF's operational hub at Longcross. Consolidation of HR
& Finance processes is already underway, along with aggregating
key insurance covers. However, the main commercial benefit of the
acquisition is the ability to share ADF's extensive industry
contacts and getting Location One into our production pipeline.
With ADF's long lead times this means much greater visibility of
opportunities for Location One.
Dividends
A final dividend of 0.90 pence per share, reflecting the Group's
strong cash position and confidence in trading, is proposed to be
paid (subject to shareholder approval at the 2023 AGM) on 30 June
2023 to shareholders who are on the register at the close of
business on 16 June 2023.
In addition to the proposed final dividend to be put to
shareholders for approval at the 2023 AGM, and following the FY22
year end, the Directors have become aware of two technical breaches
of the Companies Act 2006 in respect of the interim dividend of
0.46 pence per ordinary share historically paid by the Company in
October 2022. Accordingly, a resolution will be proposed at the
2023 AGM to resolve this issue.
Neil Evans FCA
Chief Financial Officer
Consolidated income statement
Profit & Loss - Y/E Dec (GBPm) FY20A FY21A FY22A
Revenue GBP8.0 GBP27.8 GBP31.4
Growth -49% 245% 13%
Cost of sales GBP(7.5) GBP(16.9) GBP(19.7)
-------------------------------- --------- ---------- ----------
Gross profit GBP0.6 GBP10.9 GBP11.7
Gross margin 7% 39% 37%
Admin expenses GBP(1.7) GBP(3.2) GBP(3.7)
Other income GBP1.9 GBP0.0 GBP0.0
-------------------------------- --------- ---------- ----------
Adj EBITDA GBP0.8 GBP7.7 GBP8.0
Adj EBITDA margin 10% 28% 25%
Non-recurring expenses GBP0.0 GBP(1.3) GBP(0.1)
Share based payments GBP0.0 GBP(1.3) GBP(0.1)
--------------------------------- --------- ---------- ----------
EBITDA GBP0.8 GBP5.1 GBP7.8
Depreciation & amortisation GBP(0.9) GBP(1.9) GBP(2.5)
EBIT GBP(0.1) GBP3.2 GBP5.3
Net interest expense GBP(0.4) GBP(0.4) GBP(0.7)
PBT GBP(0.5) GBP2.8 GBP4.6
Tax charge GBP0.1 GBP(1.5) GBP0.0
--------------------------------- --------- ---------- ----------
PAT GBP(0.4) GBP1.3 GBP4.6
--------------------------------- --------- ---------- ----------
Consolidated cashflow statement
Cash Flow - Y/E Dec (GBPm) FY20A FY21A FY22A
PBT GBP(0.5) GBP2.8 GBP4.6
Depreciation & amortisation GBP0.9 GBP1.9 GBP2.5
Working capital GBP0.6 GBP1.8 GBP(3.7)
Share based payments GBP0.0 GBP1.3 GBP0.1
Other items GBP0.4 GBP0.1 GBP0.1
Net Interest Expense GBP0.4 GBP0.4 GBP0.7
Corporation Tax (paid) / received GBP0.0 GBP0.4 GBP0.0
---------------------------------- --------- --------- ---------
Net Cash Flow from Operating GBP1.8 GBP8.6 GBP4.3
Activities
---------------------------------- --------- --------- ---------
Purchase of property, plant GBP(0.1) GBP(0.8) GBP(4.1)
and equipment and intangible
assets
Purchase of right of use assets GBP(3.5) GBP(5.9) GBP(1.0)
Increase in amounts due from GBP0.0 GBP0.0 GBP(0.2)
directors
Cost of business acquisition GBP0.0 GBP0.0 GBP(3.6)
---------------------------------- --------- --------- ---------
Net Cash Flow from Investment GBP(3.6) GBP(6.7) GBP(8.9)
Activities
---------------------------------- --------- --------- ---------
Equity issuance and cost of GBP0.0 GBP0.8 GBP13.4
issuance
Net Debt Borrowings / Repayments GBP3.5 GBP5.5 GBP(0.3)
Lease Payments GBP(1.3) GBP(3.1) GBP(3.5)
Dividends GBP(0.4) GBP(0.9) GBP(0.4)
Other items GBP0.0 GBP(0.5) GBP(0.1)
---------------------------------- --------- --------- ---------
Net Cash Flow from Financing GBP1.8 GBP1.8 GBP9.1
Activities
---------------------------------- --------- --------- ---------
Net Increase / (Decrease) GBP0.0 GBP3.7 GBP4.5
in Cash
Cash at Beginning of Year GBP1.3 GBP1.3 GBP5.0
---------------------------------- --------- --------- ---------
Cash at End of year GBP1.3 GBP5.0 GBP9.5
---------------------------------- --------- --------- ---------
Consolidated balance sheet
Balance Sheet - Y/E Dec (GBPm) FY20A FY21A FY22A
Property, plant and equipment GBP3.4 GBP4.1 GBP10.7
Right-of-use assets GBP11.1 GBP15.1 GBP25.9
Goodwill & other intangible GBP0.0 GBP0.0 GBP7.3
assets
------------------------------- -------- -------- --------
Total Non-Current Assets GBP14.5 GBP19.2 GBP43.9
Cash GBP1.3 GBP5.0 GBP9.5
Trade & other receivables GBP1.0 GBP1.7 GBP3.0
Inventories GBP0.0 GBP0.0 GBP0.4
------------------------------- -------- -------- --------
Total Current Assets GBP2.3 GBP6.7 GBP12.9
Short term debt GBP0.5 GBP0.1 GBP0.0
Lease liabilities GBP2.1 GBP2.7 GBP3.7
Trade & other payables GBP2.3 GBP5.1 GBP6.3
------------------------------- -------- -------- --------
Total Current Liabilities GBP4.9 GBP7.9 GBP10.0
Long term debt GBP0.4 GBP0.2 GBP0.0
Lease liabilities GBP7.3 GBP9.6 GBP17.5
Deferred tax GBP1.2 GBP2.7 GBP3.0
Contingent consideration GBP0.0 GBP0.0 GBP0.9
Other long term liabilities GBP0.1 GBP0.0 GBP0.0
------------------------------- -------- -------- --------
Total Non-Current Liabilities GBP9.0 GBP12.6 GBP21.4
------------------------------- -------- -------- --------
Net Assets GBP2.9 GBP5.4 GBP25.4
------------------------------- -------- -------- --------
NOTES TO THE FINANCIAL INFORMATION
1. Accounting Policies
1.1 Basis of preparation
Facilities by ADF Plc (the "Group") is a public company limited
by shares, incorporated, domiciled and registered in England and
Wales in the UK. The registered number is 13761460 and the
registered address is Ground Floor 31 Oldfield Road, Bocam Park,
Pencoed, Bridgend, United Kingdom, CF35 5LJ.
The consolidated and Company financial statements are for the
year ended 31 December 2022. The Company's prior period was from
incorporation on 23 November 2021 to 31 December 2021 and was the
first period of accounts for the Company. They have been prepared
in accordance with UK-adopted international accounting standards in
conformity with the requirements of the UK Companies Act 2006.
1.2 Going concern
The Group has continued to invest in growth throughout the
financial year, with the Group continuing to trade throughout in a
net asset position . The Directors are pleased with the progress of
trading to date, and in particular, the progress made relative to
the challenges of the film and television industry. On the 5
January 2022 the shares of the Company were admitted to the London
Stock Exchange trading on the UK AIM market. As part of the
listing, and on this date, 30,000,000 new ordinary shares were
placed at a price of 50p, raising significant cash funds for the
business.
The Directors are continuing to identify acquisitions as well as
focussing on the continuation of the organic growth experienced in
recent years. The Company acquired a new a business in the current
financial period and significant synergies are expected to be
achieved over the coming year from this. The Directors expect
continued growth in 2023.
The financial statements have been prepared on the going concern
basis which the Directors believe to be appropriate for the
following reasons. The Directors have prepared cash flow forecasts
for a 12-month period from the date of approval of these financial
statements. They have applied a range of sensitivities to these
forecasts and such forecasts and analysis have indicated that
sufficient funds should be available to enable the Group to
continue in operational existence for the foreseeable future by
meeting its liabilities as they fall due for payment.
2. Earnings Per Share
The calculation of the basic earnings per share (EPS) is based
on the results attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year. Diluted
EPS includes the impact of outstanding share options.
For the period ending 31 December 2020 there was a loss for the
year recognised of GBP402,259, as such diluted EPS is identical to
the basic loss per share as the exercise of warrants and options
would be anti-dilutive.
Year ended Year ended
31 December 31 December
2022 2021
GBP GBP
------------- -------------
Profit used in calculating basic diluted
EPS 4,611,797 1,305,886
Weighted average number of shares 75,714,054 40,245,204
Diluted weighted average number of shares 81,939,807 46,686,026
Earnings per share 0.061 0.032
------------- -------------
Diluted earnings per share 0.054 0.028
============= =============
3. Property, plant and equipment
Computer Assets
Plant Hire Motor equipment under construction
and machinery Fleet vehicles GBP'000 GBP'000 Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------- ---------- ---------- ------------ --------------------- -----------
Cost
At 1 January 2021 122 4,592 263 74 - 5,051
Additions 31 486 294 10 - 821
Transfers - 496 25 - - 521
Disposals (27) (5) (90) (73) - (195)
At 31 December 2021 -126 5,569 492 11 - 6,198
--------------- ---------- ---------- ------------ --------------------- -----------
Depreciation
At 1 January 2021 60 1,508 56 49 - 1,673
Charge for the year 17 318 27 5 - 367
Transfers - 127 12 - - 139
Disposals (19) (2) (47) (50) - (118)
--------------- ---------- ---------- ------------ --------------------- -----------
At 31 December 2021 58 1,951 48 4 - 2,061
--------------- ---------- ---------- ------------ --------------------- -----------
Cost
At 1 January 2022 -126 5,569 492 11 - 6,198
Additions 33 1,984 221 - 1,818 4,056
Additions on acquisition - 2,524 560 - 69 3,153
Transfers - 677 401 - (1,078) -
Disposals - (91) (58) - - (149)
At 31 December 2022 159 10,663 1,616 11 809 13,258
--------------- ---------- ---------- ------------ --------------------- -----------
Depreciation
At 1 January 2022 58 1,951 48 4 - 2,061
Charge for the year 19 516 74 2 - 611
Disposals - (63) (31) - - (94)
At 31 December 2022 77 2,404 91 6 - 2,578
--------------- ---------- ---------- ------------ --------------------- -----------
Net book amount
At 31 December 2021 68 3,618 444 7 - 4,137
=============== ========== ========== ============ ===================== ===========
At 31 December 2022 82 8,259 1,525 5 809 10,680
=============== ========== ========== ============ ===================== ===========
Depreciation is charged to administrative expenses within the
statement of comprehensive income.
4 . Leases
The Group leases a number of assets, all assets are leased from
the UK, which is the main jurisdiction the Group operates in. All
lease payments, in-substance, are fixed over the lease term. All
expected future cash out flows are reflected within the measurement
of the lease liabilities at each year end.
Nature of leasing activities
As at As at
31 December 2022 31 December 2021
----------------- -----------------
Number of active leases 115 61
================= =================
The Group leases include leasehold properties for commercial and
head office use, motor vehicles and equipment. The leases range in
length from 3 to 15 years and vary in length depending on lease
type. Leasehold properties holding the longest-term length of up to
15 years, motor leases up to 4 years, hire fleet up to 7 years,
vehicles up to 7 years, and equipment of up to 5 years. All leases
are held with the Group's subsidiaries.
Extension, termination, and break options
The Group sometimes negotiates extension, termination, or break
clauses in its leases. In determining the lease term, management
considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a
termination option. Extension options (or periods after termination
options) are only included in the lease term if the lease is
reasonably certain to be extended (or not terminated).
On a case-by-case basis, the Group will consider whether the
absence of a break clause would expose the Group to excessive risk.
Typically, factors considered in deciding to negotiate a break
clause include:
- The length of the lease term;
- The economic stability of the environment in which the property is located; and
- Whether the location represents a new area of operations for the Group.
Incremental borrowing rate
The Group has adopted a rate with a range of 3.3% - 8.7% as its
incremental borrowing rate, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
This rate is used to reflect the risk premium over the borrowing
cost of the Group measured by reference to the Group's
facilities.
The Group performed a sensitivity analysis where incremental
borrowing rates have been used and identified if the incremental
borrowing rate was 5% for all assets there would be a increase in
the carrying amount of the right-of-use asset at 31 December 2022
of GBP88,483 (2021: Decrease GBP32,393); there would be a
subsequent increase in the lease liability of GBP62,047 (2021:
Decrease GBP23,834). If the incremental borrowing rate decreased to
1% for all assets there would be an increase in the carrying amount
of the right-of-use asset at 31 December 2022 of GBP203,628 (2021:
GBP96,512) and there would be a consequent increase in the lease
liability of GBP276,897 (2021: GBP67,841).
Sensitivity analysis is not performed on hire purchase leases as
interest is inherent within these lease agreements.
Right-of-use assets
Hire
Fleet
Leasehold Motor and Motor Assets under
Property Leasehold Vehicles Equipment construction Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2021 1,397 109 10,950 8 - 12,464
Additions - 28 5,882 14 - -5,924
Transfers - - (519) - - (519)
At 31 December
2021 1,397 137 16,313 22 - 17,869
---------- ------------ ------------ ------------ -------------- -----------
Depreciation
At 1 January 2021 557 27 770 4 - 1,358
Charge for the
period 283 30 1,240 2 - 1,555
Transfers - - (139) - - (139)
At 31 December
2021 840 57 1,871 6 - 2,774
---------- ------------ ------------ ------------ -------------- -----------
Cost
At 1 January 2022 1,397 137 16,313 22 - 17,869
Additions 6,863 - 3,108 - 1,812 11,783
Business acquisitions 808 24 - 87 - 919
Transfers - - 1,085 - (1,082) 3
At 31 December
2022 9,068 161 20,506 109 730 30,574
---------- ------------ ------------ ------------ -------------- -----------
Depreciation
At 1 January 2022 840 57 1,871 6 - 2,774
Charge for the
period 251 38 1,602 8 - 1,899
At 31 December
2022 1,091 95 3,473 14 - 4,673
---------- ------------ ------------ ------------ -------------- -----------
Net book amount
At 31 December
2021 557 80 14,442 16 - 15,095
========== ============ ============ ============ ============== ===========
At 31 December
2022 7,977 66 17,033 95 730 25,901
========== ============ ============ ============ ============== ===========
Lease liabilities
Hire Fleet
Leasehold Motor and Motor
Property Leasehold Vehicles Equipment Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- ------------ ----------- ------------ -----------
At 1 January 2021 871 83 8,415 4 9,373
Additions - 28 5,458 15 5,501
Interest expense 30 3 311 - 344
Lease payments (including
interest) (318) (23) (2,610) (2) (2,953)
At 31 December 2021 583 91 11,574 17 12,265
========== ============ =========== ============ ===========
At 1 January 2022 583 91 11,574 17 12,265
Additions 6,770 - 4,165 - 10,935
Business acquisitions 808 24 - 87 919
Interest expense 106 3 585 1 695
Lease payments (including
interest) (172) (28) (3,376) (9) (3,585)
At 31 December 2022 8,095 90 12,948 96 21,229
========== ============ =========== ============ ===========
Reconciliation of minimum lease payments and present value
As at As at
31 December 2022 31 December 2021
GBP'000 GBP'000
----------------- -----------------
Within 1 year 4,542 2,996
Later than 1 year and less than 5 years 12,506 9,727
After 5 years 8,759 987
Total including interest cash flows 25,807 13,710
----------------- -----------------
Less: interest cash flows (4,578) (1,445)
-----------------
Total principal cash flows 21,229 12,265
================= =================
Reconciliation of current and non-current lease liabilities
As at As at
31 December 2022 31 December 2021
GBP'000 GBP'000
----------------- -----------------
Current 3,705 2,658
Non-current 17,524 9,607
----------------- -----------------
Total 21,229 12,265
================= =================
Short term or low value lease expense
As at As at
31 December 2022 31 December 2021
GBP'000 GBP'000
----------------- -----------------
Total short term or low value lease expense 28 3
28 3
================= =================
5. Trade and other receivables
Group As at As at
31 December 31 December
2022 2021
GBP'000 GBP'000
------------ ------------
Amounts falling due within one year:
Trade receivables 1,761 472
Director's loan accounts 307 127
Other receivables and prepayments 977 1,168
3,045 1,767
============ ============
6. Trade and other payables
Group As at As at
31 December 2022 31 December 2021
GBP'000 GBP'000
----------------- -----------------
Amounts falling due within one year:
Trade payables 1,932 1,831
Other payables 1,055 101
Taxation and social security 1,298 959
Accrued expenses 1,461 1,722
Deferred income 576 519
6,322 5,132
================= =================
The Directors consider that the carrying value of trade and
other payables approximates to their fair value. Trade payables are
non-interest bearing and are normally settled monthly.
Included in other payables were Director loan accounts with a
balance owed to the Directors as at 31 December 2022: GBPNil (2021:
GBP297), all amounts were non-interest bearing. Additionally
including in other payables is amounts payable of GBP848,582 in
respect of employer social security costs due on M Proctor share
options exercised.
Revenue recognised in the year that was deferred from the
previous year was GBP518,555 (2021: GBP328,000).
7. Borrowings
As at As at
31 December 2022 31 December 2021
GBP'000 GBP'000
----------------- -----------------
Current:
Bank loans - 100
Other loans - -
----------------- -----------------
- 100
----------------- -----------------
Non-current
----------------- -----------------
Bank loans - 242
Other loans - -
----------------- -----------------
- 242
----------------- -----------------
Total borrowings - 342
================= =================
A maturity analysis of The Group's borrowings is shown
below:
As at As at
31 December 2022 31 December 2021
GBP'000 GBP'000
----------------- -----------------
Less than 1 year - 100
Later than 1 year and less than 5 years - 242
- 342
================= =================
Included in bank loans is a Coronavirus Business Interruption
Loan Scheme (CBILS) held with Barclays. The loan was taken out in
May 2020 and originally matured four years after this date. The
loan incurs interest of 2.25% above Bank of England base rate with
a deferred payment start date as part of the CBILS scheme of 12
months. Interest on the loan is payable by the UK Government as
part of the business interruption payment under the facility. This
loan was fully paid in the year ended 31 December 2022.
8. Business acquisitions
On 30 November, the Group completed the acquisition of 100% of
the share capital of Location 1 Group Ltd for consideration of an
initial cash payment of GBP4,429,646 and GBP1,879,575 consideration
paid in shares, through Facilities by ADF. A further payment of
contingent consideration, up to maximum value of GBP4,059,788, was
valued on acquisition at GBP877,892, giving a total consideration
of GBP7,187,113.
The principal reason for the acquisition was to increase the
Group's synergies, to optimize the Group's coverage of the UK
television and film production market in which it operates.
In the period from 30 November 2022 to 31 December 2022, the
acquired business contributed GBP718,011 to Group revenues and a
profit of GBP6,716 to the Group's comprehensive profit. If the
acquisition had taken place on 1 January 2022, the acquired
business would have contributed GBP9,436,502 to Group revenues and
a profit of GBP146,727 to the Group's comprehensive profit.
Location 1 Group Ltd latest financial year end, prior to
acquisition, was 30 September 2021. On acquisition the Group
extended the period ended due 30 September 2022 to 31 December
2022, to align with the Group accounting period end. The results of
have been consolidated as at 31 December 2022 for inclusion in
these consolidated annual financial statements.
The following table summarises the fair value of assets
acquired, and liabilities assumed at the acquisition date There
were no differences identified between the book cost and fair value
of assets and liabilities acquired:
Fair value GBP'000
Property, plant and equipment 3,153
Right of use assets 919
Trade and other receivables 1,337
Cash 835
Trade and other payables (1,362)
Hire purchase and loans (3,443)
Lease liabilities (919)
Deferred tax liability (544)
-------------------
Total fair value (24)
Consideration 7,187
-------------------
Goodwill 7,211
-------------------
The goodwill of GBP7,211,397 comprises the potential value of
additional synergies which is not separately recognised.
Acquisition costs totalled GBP78,312 and are disclosed within the
statement of comprehensive income within non-recurring items,
certain additional costs totalling GBP122,844, which were directly
attributable to the share raise, were recognised against Share
Premium.
Purchase consideration GBP'000
Cash 4,430
Share consideration 1,880
Contingent consideration 878
--------
Total Consideration 7,187
Contingent consideration is payable up to maximum value of
GBP4,059,788, payable in cash, over a three-year period, based on
set performance criteria. Performance criteria is set against
adjusted EBITDA targets of Location 1 Group Ltd, at each year,
across a three-year period. The contingent consideration is payable
on a scaling basis based on the level of Adjusted EBITDA gained.
The minimum payment of contingent consideration is GBPNil. The
contingent consideration has been discounted to present value and
adjusted based on management expectation of probability of outcome
of reaching Adjusted EBITDA targets.
The net cash sum expended on Acquisition in the year ended 31
December 2022 is as follows:
Analysis of cash flows GBP'000
on acquisition
Cash paid as consideration
on acquisition (4,430)
Cash acquired at acquisition 835
--------
Net cash outflow on acquisition (3,595)
9. Post balance sheet events
There are no post balance sheet events to disclose.
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