The cash outflow from discontinued operations has increased period-on-period due to higher maintenance and lease costs in Propius as aircraft are handed back in the current period. Costs for Propius remain in line with expectations. Investing inflows include £9.0m from the sale of MBE and £3.6m from the sale of Star Handling. In the prior period they included £3.5m from the sale of a portion of Widnes land. The principal financing outflows include £4.2m of lease payments and £3.9m interest paid on the term loan interest. There was an inflow of £4.0m from a further drawdown on the term loan. In the prior period the main financing outflow was from lease payments totalling £3.5m.

Key risks and uncertainties

As with any business, risk assessment and the implementation of mitigating actions and controls are vital to successfully achieving the Group's strategy. The Board has overall responsibility for risk management and internal control within the context of achieving the Group's objectives and has approved a Framework for the risk management process. This includes regular consideration of both existing and emerging risks, and the evaluation of the Group's exposure to key corporate risks.  

 

During the year, the Board has added one new principal risk, relating to the Group's relationship with CGI, the issuer of the convertible debt instrument.  Other than that addition, the principal risks set out in our statutory accounts for the year ended 28 February 2023 are still applicable.

 

Directors' Responsibility Statement

 

We confirm that to the best of our knowledge:

 

·      The condensed set of unaudited financial statements has been prepared in accordance with the UK-adopted International Accounting Standard 34, 'Interim Financial Reporting'; and

 

·      The interim management report includes a fair review of the information required by:

 

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the statutory accounts for the year ended 28 February 2023 that could do so.

The above statement of Directors' responsibilities was approved by the Board on
28 November 2023.

 

 

 

 

Nick Dilworth

Director

29 November 2023

 

		Six months ended 31 August 2023	Restated1 Six months ended 31 August 2022
		Unaudited	Unaudited
Continuing operations	Notes	£'000	£'000
Revenue	4	9,142	14,613
Other operating income	5	3,322	89
Operating expenses		(13,803)	(18,805)
Restructuring costs	13	(2,171)	-
Adjusted EBITDA		(3,510)	(4,103)
Depreciation		(4,965)	(5,234)
Impairments	8	(5,270)	-
Operating loss		(13,745)	(9,337)
Finance costs	7	(47,205)	(10,557)
Finance income	7	413	5,220
Share of post-tax losses of associates and joint ventures		(286)	(346)
Loss before tax		(60,823)	(15,020)
Tax	9	391	2,511
Loss for the period from continuing operations		(60,432)	(12,509)
Discontinued operations
Profit from discontinued operations, net of tax	6	177	3,891
Loss for the period		(60,255)	(8,618)
Loss per share expressed in pence per share - continuing operations
Basic	10	(5.92p)	(1.23p)
Diluted	10	(5.92p)	(1.23p)
Loss per share expressed in pence per share - total
Basic	10	(5.90p)	(0.84p)
Diluted	10	(5.90p)	(0.84p)

Condensed Consolidated Income Statement

 

 

 

¹The 2022 results have been restated where required due to IFRS 5 Discontinued Operations. Refer to note 6 for further details.

Condensed Consolidated Statement of Comprehensive Income

 

	Six months ended 31 August 2023	Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Loss for the period	(60,255)	(8,618)
Discontinued operations, net of tax, relating to exchange differences	3,318	(9,744)
Other comprehensive income/(expense) - items that may be reclassified in subsequent periods to profit or loss, net of tax	3,318	(9,744)
Re-measurement of defined benefit plan	(663)	178
Change in fair value of financial assets classified as FVOCI	(1,283)	(962)
Tax on items relating to components of other comprehensive income/(expense)	-	(200)
Other comprehensive expense - items that will not be reclassified to profit or loss, net of tax	(1,946)	(984)
Other comprehensive income/(expense) for the period, net of tax	1,372	(10,728)
Total comprehensive expense for the period	(58,883)	(19,346)

 

Condensed Consolidated Statement of Financial Position

 

		31 August 2023	28 February 2023
		Unaudited	Audited
	Notes	£'000	£'000
Non-current assets
Property, plant and equipment	11	203,146	263,412
Investment in associates and joint ventures		163	450
Other financial assets	12	14,040	15,324
Intangible assets		-	54,669
Net investment in lease		16,159	16,888
Defined benefit pension surplus		1,992	1,937
		235,500	352,680
Current assets
Inventories		1,125	1,729
Trade and other receivables		10,194	34,195
Restricted cash		-	1,000
Cash and cash equivalents	12	19,958	49,264
Assets held for sale	6	130,824	-
		162,101	86,188
Total assets		397,601	438,868
Non-current liabilities
Loans and borrowings	12	(264,707)	(259,841)
Other liabilities		(7,237)	(8,894)
Deferred tax	9	(6,133)	-
Provisions	13	(3,942)	(3,942)
		(282,019)	(272,677)
Current liabilities
Trade and other payables		(9,445)	(27,611)
Loans and borrowings	12	(62,933)	(80,521)
Corporation tax	9	(1,000)	(583)
Provisions	13	(8,277)	(17,560)
Liabilities associated with the assets held for sale	6	(53,265)	-
		(134,920)	(126,275)
Total liabilities		(416,939)	(398,952)
Net (liabilities)/assets		(19,338)	39,916
Capital and reserves
Issued share capital		102,534	102,534
Share premium		403,225	403,225
Foreign currency exchange reserve		(3,481)	(6,799)
Reserve for own shares held by employee benefit trust		(7,596)	(7,596)
Retained deficit		(514,020)	(451,448)
Shareholders' (deficit)/equity		(19,338)	39,916

 

 

Condensed Consolidated Statement of Changes in Equity

 

For the six months ended 31 August 2023

Unaudited

	Issued share capital	Share premium	Foreign currency exchange reserve	Reserve for own shares held by EBT	Retained deficit	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 March 2023	102,534	403,225	(6,799)	(7,596)	(451,448)	39,916
Loss for the period	-	-	-	-	(60,255)	(60,255)
Other comprehensive income/(expense) for the period	-	-	3,318	-	(1,946)	1,372
Total comprehensive income/(expense) for the period	-	-	3,318	-	(62,201)	(58,883)
Employee benefit trust	-	-	-	-	(539)	(539)
Share-based payment charge	-	-	-	-	168	168
Balance at 31 August 2023	102,534	403,225	(3,481)	(7,596)	(514,020)	(19,338)

 

 

For the six months ended 31 August 2022

Unaudited

	Issued share capital	Share premium	Foreign currency exchange reserve	Reserve for own shares held by EBT	Retained deficit	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 March 2022	102,534	403,225	218	(7,596)	(428,238)	70,143
Loss for the period	-	-	-	-	(8,618)	(8,618)
Other comprehensive expense for the period	-	-	(9,744)	-	(984)	(10,728)
Total comprehensive expense for the period	-	-	(9,744)	-	(9,602)	(19,346)
Share-based payment charge	-	-	-	-	250	250
Balance at 31 August 2022	102,534	403,225	(9,526)	(7,596)	(437,590)	51,047

 

 

Condensed Consolidated Statement of Cash Flows

 

		Six months ended 31 August 2023	Restated Six months ended 31 August 2022
		Unaudited	Unaudited
	Notes	£'000	£'000
Cash used in continuing operations	14	(10,991)	(11,586)
Cash (outflow)/inflow from discontinued operations		(6,233)	3,802
Income taxes paid		(526)	(1,030)
Net cash flow from operating activities		(17,750)	(8,814)
Purchase of property, plant and equipment		(85)	(1,597)
Proceeds from the sale of property inventory		-	3,538
Proceeds from the sale of property, plant and equipment		37	90
Receipt of capital element of net investment in lease		854	676
Proceeds from disposal of subsidiary undertaking, net of cash disposed		3,614	-
Proceeds from sale of associate		9,000	-
Interest received		211	323
Cash inflow from discontinued operations		4,859	1,307
Net cash flow from investing activities		18,490	4,337
Proceeds from new borrowings		4,010	-
Proceeds from grants		-	670
Principal element of lease payments		(3,176)	(2,425)
Net repayment of revolving credit facility (net of costs)		-	(50)
Interest paid		(5,743)	(1,967)
Cash outflow from discontinued operations		(19,165)	(12,558)
Net cash flow from financing activities		(24,074)	(16,330)
Decrease in cash and cash equivalents		(23,334)	(20,807)
Cash and cash equivalents at beginning of period		49,264	52,738
Cash and cash equivalents at end of period		25,930	31,931
Restricted cash
Restricted cash at beginning of period		1,000	-
Restricted cash at end of period		1,000	-
Cash and cash equivalents including restricted cash at end of period		26,930	31,931

 

Included in cash and cash equivalents at end of period at 31 August 2023 is £5,972,000 classified as held for sale. The restricted cash balance of £1,000,000 at 31 August 2023 is also classified as held for sale. See note 6 for details on assets and associated liabilities held for sale.

Notes to the Condensed Consolidated Financial Statements

 

1             Accounting policies

 

Corporate information

The Condensed Consolidated Financial Statements of the Group for the six months ended 31 August 2023 (interim financial statements) were authorised for issue in accordance with a resolution of the Directors on 29 November 2023. Esken Limited is a Guernsey registered company whose ordinary shares are publicly traded on the London Stock Exchange. The principal activities of the Group are described in note 3.

 

Basis of preparation

These condensed interim financial statements for the half year ended 31 August 2023 have been prepared in accordance with the UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. They do not include all the information required for the full annual financial statements and should be read in conjunction with the financial statements of the Group as at and for the year ended 28 February 2023.

 

Except for the 28 February 2023 statutory comparatives, the interim financial statements have not been audited or reviewed by the Group's auditors, Mazars LLP.

 

The audited comparative financial information set out in these interim financial statements does not constitute the Group's statutory accounts for the year ended 28 February 2023, but has been derived from those accounts. Statutory accounts for the year ended 28 February 2023 have been published and Mazars LLP has reported on those accounts. Their audit report was unqualified, however, it highlighted a material uncertainty regarding going concern in respect of sufficient liquidity for the Group's requirements being dependent on the successful completion of the proposed sale of the Group's renewables business by 31 December 2023, and the ability to raise an additional short-term facility of up to £5.0m to provide liquidity for LSA prior to 31 July 2023. The annual financial statements of the Group are prepared in accordance with UK-adopted international accounting standards.

 

As presented in the Group's annual financial statements, all percentage calculations are based on results rounded to the nearest £1,000, being the presentation used across the primary statements and accompanying notes.

 

Going concern

In adopting the going concern basis for preparing the interim financial statements, the Directors have considered the business activities including the Group's principal risks and uncertainties. The Directors also considered the Group's current cash position, the repayment profile of its existing debt structure and its 12-month cashflow forecasts. In addition, the resilience of the Group has been assessed by applying significant downside scenarios to the Group's cash flow projections.

 

However, the risks and uncertainties associated with the achievement of forecasts and the availability of sufficient funding indicate the existence of a material uncertainty related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern.

 

The sale of Esken Renewables Limited has progressed significantly and still expected by the Directors of the Group to complete on or around 1 December 2023. A material uncertainty exists in relation to the settlement of the exchangeable bond due in May 2024 being extended. The base case and significant downside forecasts both include an amend and extend of the exchangeable bond, extending the repayment to December 2025, or repayment will be made the month after the LSA disposal, if earlier.

 

The significant downside scenario includes a 2-month delay to the sale of LSA and the continuation of Group operations and costs to the end of February 2025. Both scenarios leave the Group with sufficient cash headroom to continue trading within the going concern review period.

 

Overall, the Directors are satisfied that the Group will have sufficient funds to continue to meet its liabilities as they fall due until at least 30 November 2024 and therefore have prepared the interim financial statements on a going concern basis. However, as previously noted this is highly dependent upon the exchangeable bond amend and extend, which indicates the existence of a material uncertainty related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern and, therefore, to continue realising its assets and discharging its liabilities in the normal course of business. The financial statements for the 6-month period ended 31 August 2023 do not include any adjustments that would result from the basis of preparation being inappropriate.

 

Significant accounting policies

The accounting policies applied in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 28 February 2023. These accounting policies are expected to be applied for the full year to 28 February 2024.

 

Key estimates and judgements

The estimates and judgements taken by the Directors in preparing these interim financial statements are comparable with those disclosed in the annual financial statements for the year ended 28 February 2023, with the exception of the IFRS 5 classification of Esken Renewables as held for sale as all the criteria has now been met in the current period.

 

Presentation of Condensed Consolidated Income Statement

Adjusted EBITDA, a non-GAAP measure, is the key profitability measure used by management for performance review in the day-to-day operations of the Group. Non-GAAP measures are used as they are considered to be both useful and necessary. They are used for internal performance analysis; the presentation of these measures facilitates comparability with other companies, although management's measures may not be calculated in the same way as similarly titled measures reported by other companies.

 

In the current period the Renewables division has been reclassed as a disposal group held for sale and a discontinued operation. The post-tax results of discontinued operations are disclosed as a single amount in the Condensed Consolidated Income Statement and the prior period comparative results restated accordingly.

 

2             Seasonality of operations

 

There is a material effect of seasonality in the Aviation and Renewables divisions. In the Aviation division there are higher seasonal sales in summer, due to increased demand for overseas travel, and there are higher seasonal sales in summer in the Renewables division, due to higher gate fees.

 

3             Segmental information

 

The reporting segments are Aviation, Investments and Non-Strategic Infrastructure. The results of Propius and the Renewables division are presented as discontinued operations on the face of the Condensed Consolidated Income Statement, see note 6.

 

The Aviation segment specialises in the operation of a commercial airport and the provision of ground handling services. The Investments segment holds non-controlling interests in a logistics services investing business and a baggage handling business. The Non-Strategic Infrastructure segment specialises in management, development, and realisation of a portfolio of property assets, including Carlisle Lake District Airport.

 

The Executive Directors are regarded as the Chief Operating Decision Maker. The Directors monitor the results of each business unit separately for the purposes of making decisions about resource allocation and performance assessment. The main segmental profit measure is adjusted EBITDA, which is calculated as loss before interest, tax, depreciation and impairments. Income taxes and certain central costs are managed on a Group basis and are not allocated to operating segments. No segmental assets or liabilities information is disclosed because no such information is regularly provided to, or reviewed by, the Chief Operating Decision Maker.

 

Six months ended 31 August 2023	Aviation	Investments	Non-Strategic Infrastructure	Group central and eliminations	Total
	£'000	£'000	£'000	£'000	£'000
Revenue
External	8,427	-	509	206	9,142
Internal	15	-	50	(65)	-
Statutory revenue	8,442	-	559	141	9,142
Adjusted EBITDA	(2,837)	(34)	1,960	(2,599)	(3,510)
Depreciation	(4,530)	-	(194)	(241)	(4,965)
Impairments	-	-	(5,270)	-	(5,270)
Net interest	(39,063)	(842)	41	(6,928)	(46,792)
Share of post-tax losses of associates and joint ventures	-	(286)	-	-	(286)
Loss before tax	(46,430)	(1,162)	(3,463)	(9,768)	(60,823)

 

Restated Six months ended 31 August 2022	Aviation	Investments	Non-Strategic Infrastructure	Group central and eliminations	Total
	£'000	£'000	£'000	£'000	£'000
Revenue
External	14,150	-	302	161	14,613
Internal	-	-	50	(50)	-
Statutory revenue	14,150	-	352	111	14,613
Adjusted EBITDA	(518)	(34)	(402)	(3,149)	(4,103)
Depreciation	(4,848)	-	(192)	(194)	(5,234)
Net interest	(7,080)	(821)	(12)	2,576	(5,337)
Share of post-tax losses of associates and joint ventures	-	(346)	-	-	(346)
Loss before tax	(12,446)	(1,201)	(606)	(767)	(15,020)

 

Internal revenue above relates to inter-segment revenues that are eliminated within Group central and eliminations. Intra-segment revenues are eliminated within each segment.

 

4              Revenue

 

Revenue is primarily from contracts with customers. Other sources of revenue are from owned and leased fixed assets. The following tables detail the split between revenue from contracts with customers and other revenue, and the disaggregation of revenue from contracts with customers.

 

Six months ended 31 August 2023	Aviation	Investments	Non-Strategic Infrastructure	Group central and eliminations	Total
	£'000	£'000	£'000	£'000	£'000
Revenue from contracts with customers	8,427	-	321	24	8,772
Other revenue - lease income	-	-	188	182	370
	8,427	-	509	206	9,142

 

Six months ended 31 August 2023	Aviation	Investments	Non-Strategic Infrastructure	Group central and eliminations	Total
	£'000	£'000	£'000	£'000	£'000
Major product/service line
Sale of goods	5,804	-	16	-	5,820
Rendering of services	2,623	-	305	24	2,952
	8,427	-	321	24	8,772
Primary geographical markets
United Kingdom	8,241	-	198	24	8,463
Europe and Ireland	177	-	123	-	300
Rest of world	9	-	-	-	9
	8,427	-	321	24	8,772
Timing of revenue recognition
Products and services transferred at a point in time	8,427	-	321	24	8,772
	8,427	-	321	24	8,772

 

Restated Six months ended 31 August 2022	Aviation	Investments	Non-Strategic Infrastructure	Group central and eliminations	Total
	£'000	£'000	£'000	£'000	£'000
Revenue from contracts with customers	14,045	-	78	-	14,123
Other revenue - lease income	105	-	224	161	490
	14,150	-	302	161	14,613

 

Restated Six months ended 31 August 2022	Aviation	Investments	Non-Strategic Infrastructure	Group central and eliminations	Total
	£'000	£'000	£'000	£'000	£'000
Major product/service line
Sale of goods	2,944	-	-	-	2,944
Rendering of services	11,101	-	78	-	11,179
	14,045	-	78	-	14,123
Primary geographical markets
United Kingdom	13,385	-	78	-	13,463
Europe and Ireland	573	-	-	-	573
Rest of world	87	-	-	-	87
	14,045	-	78	-	14,123
Timing of revenue recognition
Products and services transferred at a point in time	14,045	-	78	-	14,123
	14,045	-	78	-	14,123

 

Opening and closing receivables, contract assets and contract liabilities from contracts with customers are as follows:

 

	31 August 2023	28 February 2023
	Unaudited	Audited
	£'000	£'000
Receivables	2,456	8,911
Contract assets	-	3,327

 

Contract assets at 28 February 2023 relate to the Group's rights to consideration for work completed but not billed in the Renewables division. The balance is £nil at 31 August 2023 due to the reclassification of the Renewables division balances to held for sale.

 

5              Other income

 

	Six months ended 31 August 2023	Restated Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Profit on disposal of subsidiary	1,597	-
Profit on disposal of associate	1,698	-
Profit on disposal of property, plant and equipment	27	89
	3,322	89

 

On 15 May 2023, the Group disposed of its wholly owned subsidiary Star Handling Limited to Skytanking UK Ltd for cash consideration of £3,874,000 and deferred contingent consideration of £270,000. Net assets disposed of were £2,287,000 and there were costs of disposal of £260,000, leading to a profit on disposal of £1,597,000. Further contingent consideration, dependent upon the business achieving forecast customer revenue targets in the 12 months following completion, has not been recognised.

 

On 3 August 2023, the Group disposed of its investment in Mersey Bioenergy Holdings Limited and its wholly owned subsidiary to UK Waste Resources and Energy Investments L.P. for cash consideration of £9,000,000. The Group's investment comprised a 39.6% shareholding and £7,302,000 of loan notes. The disposal generated a profit on disposal of £1,698,000.

 

6              Discontinued operations and disposal group held for sale

 

Renewables

The results of the Renewables division are reported as part of the single line loss from discontinued operations, net of tax on the face of the Condensed Consolidated Income Statement. The prior year results have been restated on the same basis. The assets and liabilities of Renewables have been reclassed as a disposal group held for sale.

 

A summary of the Renewables results included in discontinued operations is as follows:

 

	Six months ended 31 August 2023	Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Revenue	48,883	43,534
Other income	358	466
Operating expenses	(44,272)	(37,050)
Depreciation	(3,406)	(3,879)
Net finance costs	(898)	(776)
Profit before tax	665	2,295
Tax	-	-
Profit for the period from discontinued operations, net of tax	665	2,295

 

The above profit from discontinued operations of £665,000 (2022: £2,295,000) is attributable to the owners of the Company.

 

The Renewables division disposal group comprises the following assets and liabilities:

 

	31 August 2023 Unaudited £'000
Goodwill	54,669
Property, plant and equipment	44,776
Inventory and work in Progress	725
Trade and other receivables	17,062
Deferred tax	6,133
Corporation tax	487
Cash	6,972
Assets held for sale	130,824
Lease obligations	35,896
Trade and other payables	17,369
Liabilities held for sale	53,265

 

The cash flows in relation to this operation are as follows:

 

	Six months ended 31 August 2023	Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Net cash generated from operating activities	3,425	5,559
Net cash generated from investing activities	1,762	1,307
Net cash used in financing activities	(6,481)	(6,270)
Net cash (outflow)/inflow for the period	(1,294)	596

 

 

Propius

Propius is abandoned in line with the IFRS 5 definition of a discontinued operation. The results of Propius are reported on a single line, net of tax on the face of the Condensed Consolidated Income Statement.

 

While the ongoing finance charges and cashflows in respect of aircraft leases and cashflows in respect of maintenance obligations of Propius are presented within discontinued operations in the Condensed Consolidated Income Statement, the corresponding liabilities are not presented within held for sale and remain on the Group's Condensed Consolidated Statement of Financial Position.

 

A summary of the Propius results included in discontinued operations is as follows:

 

	Six months ended 31 August 2023	Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Net operating income	447	2,670
Net finance costs	(935)	(1,074)
(Loss)/profit before tax	(488)	1,596
Tax	-	-
(Loss)/profit for the period from discontinued operations, net of tax	(488)	1,596

 

The cash flows in relation to Propius are as follows:

 

	Six months ended 31 August 2023	Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Net cash used in operating activities	(9,658)	(1,757)
Net cash generated from investing activities	3,097	-
Net cash used in financing activities	(12,684)	(6,288)
Net cash outflows for the period	(19,245)	(8,045)

 

7              Finance costs and income

 

	Six months ended 31 August 2023	Restated Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Finance charges payable under leases	1,278	1,067
Convertible debt interest	38,372	7,591
Exchangeable bond interest	906	918
Term loan interest	4,685	-
Revolving credit facility interest	-	981
Foreign exchange losses	1,964	-
Total finance costs	47,205	10,557
	Six months ended 31 August 2023	Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Interest received from net investment in lease	335	321
Interest received on defined benefit pension scheme	78	8
Foreign exchange gains	-	3,848
Revaluation of convertible debt derivative	-	1,043
Total finance income	413	5,220

 

It was originally estimated that repayment date of the convertible debt would be during the year ended 28 February 2026. During the period, the Group re-assessed the repayment date and estimated that it is now going to be during the year ended 29 February 2024, in light of the strategic review triggering the managed sale of LSA. Due to make-whole provisions the re-assessment of the expected repayment date does not alter the expected cash repayment amount. This has driven an increased one-off non-cash interest charge in the period and is the main reason for the period-on-period increase in interest on the convertible debt.

 

The increase in foreign exchange losses, and decrease in foreign exchange gains, is due to adverse fluctuations in US Dollar and exchange rates impacting the Group's foreign currency denominated loan with Propius.

 

8              Impairment

 

During the six months ended 31 August 2023 land and buildings at Pollington were impaired by £5,270,000 following the decision to dispose of the site.

 

9              Taxation

 

Taxation on profit on ordinary activities

 

Total tax in the Condensed Consolidated Income Statement from continuing and discontinued operations	Six months ended 31 August 2023	Restated Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Corporation tax:
Current year corporation tax	-	1,000
Adjustments in respect of prior years	-	(3,311)
Total corporation tax	-	(2,311)
Deferred tax:
Origination and reversal of temporary differences	(391)	(152)
Impact of change in rate	-	(48)
Total deferred tax	(391)	(200)
Total credit in the Condensed Consolidated Income Statement	(391)	(2,511)
Split between:
Continuing	(391)	(2,511)
Discontinued	-	-

 

Included in the above tax charges are total current tax credit on continuing operations of £nil (2022: £2,311,000) and a total deferred tax credit on continuing operations of £391,000 (2022: £200,000) giving a total tax credit on continuing operations in the Condensed Consolidated Income Statement of £391,000 (2022: £2,511,000). The total tax credit on continuing and discontinued operations in the Condensed Consolidated Income Statement is £391,000 (2022: £2,511,000).

 

An increase in the main rate of corporation tax 25% effective from 1 April 2023 was substantively enacted as at the balance sheet date 31 August 2022. As such, the deferred tax assets/liabilities as at 31 August 2022 have been recognised/provided at 25%.

 

The total net deferred tax for the consolidated Group is £nil at 31 August 2023, with a £6.3m liability presented as deferred tax on the face of the Condensed Consolidation Statement of Financial Position and a £6.3m asset presented within assets held for sale, relating to the Renewables division.

 

10           Loss per share

 

The following table reflects the income and share data used in the basic and diluted earnings per share calculations:

Numerator	Six months ended 31 August 2023	Restated Six months ended 31 August 2022
	Unaudited	Unaudited
	£'000	£'000
Continuing operations
Loss for the period used for basic and diluted earnings	(60,432)	(12,509)
Discontinued operations
Profit for the period used for basic and diluted earnings	177	3,891
Total
Loss for the period used for basic and diluted earnings	(60,255)	(8,618)

 

Denominator	Number	Number
Weighted average number of shares used in basic and diluted EPS	1,020,735,977	1,020,735,977
Own shares held and therefore excluded from weighted average number	4,600,764	4,600,764

 

11           Property, plant and equipment

 

Additions and disposals

During the six months ended 31 August 2023, the Group acquired or developed property, plant and equipment (PPE) assets with a cost of £1,049,000 (2022: £3,725,000). This mainly consisted of plant and machinery equipment in the Renewables division.

 

PPE assets with a book value of £728,000 (2022: £617,000) were disposed of by the Group during the six months ended 31 August 2023, resulting in a profit on disposal of £376,000 (2022: £430,000), of which £350,000 is presented within discontinued operations.

 

PPE in the Renewables division, with a net book value of £44,776,000, was reclassified to assets held for sale. Land and buildings at Pollington were impaired by £5,270,000 following the decision to dispose of the site. The sale of Star Handling Limited led to the disposal of PPE with net book value of £1,798,000.

 

12           Financial assets and liabilities

 

	31 August 2023	28 February 2023
	Unaudited	Audited
Loans and borrowings	£'000	£'000
Non-current
Convertible debt	171,349	132,977
Term loan	46,212	43,969
Obligations under leases	47,146	82,895
	264,707	259,841
Current
Exchangeable bonds	53,300	52,637
Term loan	3,750	1,250
Obligations under leases	5,883	26,634
	62,933	80,521
Total loans and borrowings	327,640	340,362
Cash	(19,958)	(49,264)
Restricted cash	-	(1,000)
Net debt	307,682	290,098

Esken Limited provides support to its subsidiaries where required. Examples of support include intercompany funding arrangements and the provision of guarantees in relation to financing lines provided by a number of lenders. In addition, one Renewables contract has a covenant relating to the market capital of Esken Limited, where a breach would be remedied by additional letters of credit or a security deposit.

 

The exchangeable bonds have a May 2024 maturity date, with repayment being the difference between the £53.3m gross bonds and the value of shares held in LDG plc into which the bonds are convertible. At 31 August 2023, the difference amounted to £44.4m.

 

There has been an increase in the convertible debt liability due to a re-assessment of the estimated repayment date, see note 7.

 

A reconciliation of movements of liabilities to cash flows arising from financing is as follows:

 

	Exchangeable bond	Convertible debt	Term loan	Obligations under leases	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 1 March 2023	52,637	132,977	45,219	109,529	340,362
Changes from financing cash flows:
Additional loans	-	-	5,000	-	5,000
Cash outflow from debt issue costs	-	-	(990)	-	(990)
Principal elements of lease payments - continuing operations				(3,176)	(3,176)
Principal elements of lease payments - discontinued operations				(17,922)	(17,922)
Interest paid - continuing operations	(730)	-	(3,952)	(1,061)	(5,743)
Interest paid - discontinued operations	-	-	-	(1,243)	(1,243)
Total changes from financing cash flows	(730)	-	58	(23,402)	(24,074)
New leases entered into	-	-	-	1,279	1,279
Reclassification to held for sale	-	-	-	(35,896)	(35,896)
Disposal of subsidiary undertaking	-	-	-	(553)	(553)
The effect of changes in foreign exchange rates	-	-	-	(449)	(449)
Non-cash amortisation of loan and accrual of interest	1,393	38,372	4,685	2,521	46,971
Balance at 31 August 2023	53,300	171,349	49,962	53,029	327,640

 

	Exchangeable bond	Convertible debt	Revolving credit facility	Obligations under leases	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 1 March 2022	52,385	118,862	-	123,391	294,638
Changes from financing cash flows:
Cash outflow from debt issue costs	-	-	(50)	-	(50)
Principal elements of lease payments - continuing operations (Restated)	-	-	-	(2,425)	(2,425)
Principal elements of lease payments - discontinued operations (Restated)	-	-	-	(10,611)	(10,611)
Interest paid - continuing operations (Restated)	(730)	-	(179)	(1,058)	(1,967)
Interest paid - discontinued operations (Restated)	-	-	-	(1,947)	(1,947)
Total changes from financing cash flows	(730)	-	(229)	(16,041)	(17,000)
New leases entered into	-	-	-	3,395	3,395
Termination of lease	-	-	-	(11)	(11)
The effect of changes in foreign exchange rates	-	-	-	3,780	3,780
Revaluation of derivative	-	(1,043)	-	-	(1,043)
Non-cash amortisation of loan and accrual of interest	918	7,592	229	2991	11,730
Balance at 31 August 2022	52,573	125,411	-	117,505	295,489