Audited Annual Report and Financial Statements
for the period ended 31 March 2016
Company number: 09952391
Contents
Officers and Advisers
Strategic Report
Directors’ Report
Independent Auditors’ Report
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
3
4
5
8
10
11
12
13
14
2
Independent Auditors
Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square
London
NW1 2EP
Officers and Advisers
Company Secretary
Derek O’Neill
Registered Office
Fifth Floor
55 King Street
Manchester
M2 4LQ
Directors
Alex Dacre (appointed 14 January 2016)
Derek O’Neill (appointed 14 January 2016)
Charles Skinner (appointed 14 January 2016)
Peter Gaze (appointed 14 January 2016)
Nigel Jackson (appointed 1 April 2016)
Nominated Adviser & Broker
Cenkos Securities plc
6-8 Tokenhouse Yard
London
EC2R 7AS
Public Relations
FTI Consulting
200 Aldersgate
Aldersgare Street
London
EC1A 4HD
Solicitors
Brabners LLP
Fifth Floor
55 King Street
Manchester
M2 4LQ
Bankers
Lloyds Bank plc
4th Floor
25 Gresham Street
London
EC2V 7HN
Registrar and Transfer Agent
Capita Registrars Limited
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
3
Strategic Report
Marlowe plc (“Marlowe” or “the Company”) was incorporated on 14 January 2016. On 30 March 2016
it merged with Marlowe Holdings Limited and was admitted to trading on the AIM Market of the London
Stock Exchange.
Since its incorporation Marlowe has developed a strategy to become a leading support services
company providing business-to-business services to customers across the United Kingdom.
Marlowe Holdings Limited raised cash of £5.2 million in May 2015 through the placing of 8,584,998
ordinary shares and made three new appointments to its Board of Directors (“the Board”) in order to
pursue acquisition opportunities within the business services sector. Following this it focused on
identifying investment targets in sectors where companies possessed annuity-type recurring revenues
underpinned by long-term contracts and a degree of operational complexity that the Board believed
would provide attractive margins and high barriers to entry.
Marlowe’s strategy is now focused on the acquisition and development of businesses in the outsourced
business service sector with a
that provide critical asset maintenance
services. Marlowe is focused on fire protection, security systems and water treatment services - which
are essential to its customers' operations and invariably governed by regulation, and where customers
require a single specialist outsourced provider with nationwide coverage.
focus on
those
Marlowe has made strong progress with this strategy. In April 2016 it conducted a placing to raise cash
of £3.0 million and completed the acquisition of Fire and Security (Group) Limited (“Swift”), one of the
United Kingdom’s leading providers of fire protection and security systems installation and
maintenance services. In the same month Marlowe went on to acquire WCS Environmental Group
Limited, a provider of integrated water treatment, hygiene, testing and engineering services. In May
2016, Marlowe acquired Fire Alarm Fabrication Services Limited, a London based provider of fire
protection services. Marlowe customers can be found on most high streets, in office complexes and
industrial estates, and include SMEs, local authorities, facilities management providers, multi-site NHS
trusts and FTSE 100 companies.
Marlowe plans to expand and develop these businesses into major players across mainland Britain,
accelerated in part through further highly targeted acquisition-led growth. Marlowe also plans to
diversify and broaden the services that the group delivers by acquiring and developing specialist
support service businesses in complementary sectors with the intention of building a leading group of
companies that provide critical asset maintenance services throughout the United Kingdom. Many of
the maintenance services that Marlowe is focused on providing are necessitated by stringent
legislation and unavoidable regulation.
The businesses were acquired post the end of the reporting period, as a result no financial results of
the three acquired businesses have been included in these financial statements. In subsequent
financial statements consolidated financial statements including all acquired businesses will be
prepared and the following KPIs will be used to assess performance:
Revenue
Adjusted operating profit
Operating cash flow before financing costs and tax
Bank interest
Net debt
Marlowe currently has approximately 400 employees and the Board welcomes and looks forward to
working with them and the new management teams into the future.
4
Directors’ report
For the period ended 31 March 2016
The Directors submit their annual report together with the financial statements for the period since
incorporation, being 14 January 2016 to 31 March 2016.
Directors’ responsibilities
The Directors are responsible for preparing the Strategic Report and the Directors’ Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare company financial statements for each financial period.
The Directors are required by AIM Rules of the London Stock Exchange to prepare financial
statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the
European Union (“EU”).
The financial statements are required by law and IFRS adopted by the EU to present fairly the financial
position and performance of the Company. The Companies Act 2006 provides in relation to such
financial statements that references in the relevant part of that Act to financial statements giving a true
and fair view are references to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the
Company for that period.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
-
- make judgements and accounting estimates that are reasonable and prudent;
-
-
state whether they have been prepared in accordance with IFRSs adopted by the EU; and
prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Company. They are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Insofar as each of the Directors is aware:
-
-
there is no relevant audit information of which the Company’s auditor is unaware; and
the Directors have taken all steps that they ought to have taken to make themselves aware
of any relevant audit information and to establish that the auditor is aware of that information.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Marlowe plc website.
Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Capital management
The Company seeks to invest in controlling stakes in unquoted businesses in the business services
sector that possess annuity-type recurring revenues, predominately long term contracts, low capital
intensity, some operational complexity, sustainable margins and high barriers to entry. The
Company generally seeks to finance all operational financing requirements through cash flows
5
generated from operating activities of its subsidiaries, although this may be supplemented through
capital injections if mutually beneficial to the Company and its subsidiaries (“the Group”), current
shareholders and prospective investors. The Company’s equity structure is set out in note 13 to the
financial statements.
Management’s objectives with respect to managing capital include maintaining sufficient capital to
enable the Company to implement its strategy going forward with an optimal level of external debt.
Results and dividends
The audited financial statements for the period ended 31 March 2016 are set out on pages 10 to 26.
The Company’s loss for the year after taxation amounted to £128,000.
No dividend was declared during the period.
Directors and their interests
The Directors who served during the period and/or up to the date of this report and their beneficial
interests in the Company’s Ordinary Share capital were as follows:
Alex Dacre
Derek O’Neill
Charles Skinner
Peter Gaze
Number of 50p ordinary shares as at 31
March 2016
3,333,333
416,667
333,333
218,625
On 1 April 2016, the Directors’ agreed to subscribe for an aggregate of 727,000 ordinary shares, at
an issue price of 100 pence per share as follows:
Alex Dacre
Derek O’Neill
Charles Skinner
Peter Gaze
Number of 50p ordinary shares
170,000
250,000
75,000
232,000
On 1 April, Nigel Jackson was appointed to the Board, following the acquisition of Swift in which he
received 3,500,000 ordinary shares.
Substantial shareholdings
As at 13 June 2016 the Company has been notified of the following interests in 3% or more of its
issued share capital:
Lord Michael Ashcroft KCMG PC
Alex Dacre
Nigel Jackson
Derek O’Neill
Number of 50p ordinary
shares
9,313,933
3,503,333
3,500,000
666,667
Percentage of issued
share capital
43.58%
16.39%
16.38%
3.1%
Going concern
The financial statements have been prepared on a going concern basis. The Directors are required
by the Companies Act 2006 to prepare annual accounts that give a true and fair view and, as part of
this, to decide if it is appropriate to prepare them on a going concern basis. In forming an opinion that
the Company is a going concern the Company has prepared cash flow forecasts for the period
ending 30 June 2017, which show that the Company and the Group have sufficient facilities for
ongoing operations. Whilst there will always remain some inherent uncertainty within the
6
aforementioned forecasts, the Directors believe the Company and Group have sufficient resources to
continue in operational existence for at least twelve months from the date of approval of these
financial statements. Accordingly, the Directors continue to adopt the going concern basis in
preparing the financial statements for the period ended 31 March 2016.
Financial risk management
The Company’s operations expose it to financial and capital risks. The Directors review and agree
policies for managing each of these risks and details of these risks and policies are set out in note 3
to the financial statements.
Auditor
Grant Thornton UK LLP were appointed auditors on 27 February 2016 to fill a casual vacancy in
accordance with s485 (3) of the Companies Act 2006. A resolution to re-appoint Grant Thornton UK
LLP as auditor and to authorise the Directors to agree its remuneration will be placed before the
forthcoming AGM of the Company.
On behalf of the Board
Alex Dacre
Chief Executive
24 June 2016
7
Independent Auditors’ Report to the Members of Marlowe
Plc
We have audited the company financial statements of Marlowe plc for the period ended 31 March
2016 which comprise of the statement of comprehensive income, the statement of financial position,
the statement of changes in equity, the statement of cash flow and the related notes. The financial
reporting framework that has been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to
the company’s members those matters we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 5, the directors
are responsible for the preparation of the company financial statements and for being satisfied that
they give a true and fair view. Our responsibility is to audit and express an opinion on the company
financial statements in accordance with applicable law and International Standards on Auditing (UK
and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical
Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting
Council's website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion the company financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2016 and of its loss
for the period then ended;
have been properly prepared in accordance with IFRS as adopted by the European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors' Report for the financial
period for which the financial statements are prepared is consistent with the company financial
statements.
8
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006
requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the company, or returns adequate for our
audit have not been received from branches not visited by us; or
the company financial statements are not in agreement with the accounting records and returns;
or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Marc Summers
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
24 June 2016
9
Statement of Comprehensive Income
For the period ended 31 March 2016
Administrative expenses
Operating loss
Gain on merger of Marlowe Holdings Limited
Impairment of Marlowe Holdings Limited
Loss before taxation
Taxation
Net loss for the period
Other comprehensive income
Total comprehensive income for the period
Loss per ordinary share
- Basic (pence)
- Diluted (pence)
2016
Notes
£’000
4
(128)
(128)
15
15
7,574
(7,574)
(128)
6
-
(128)
-
(128)
7
7
-
-
The notes from pages 14 to 26 are part of these financial statements.
10
Statement of Financial Position
As at 31 March 2016
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
LIABILITIES
Current liabilities
Notes
2016
£’000
8
9
10
11
3
4
7
18
10,619
10,637
10,644
Trade and other payables
Subscription received in advance
12
13
(178)
(3,000)
Total liabilities
Net assets
Equity
Share capital
Retained earnings
Equity attributable to the owners of the company
(3,178)
(3,178)
7,466
13
7,292
174
7,466
These financial statements were approved by the Board of Directors and authorised for issue on 24
June 2016 and were signed on its behalf by:
Alex Dacre
Chief Executive
11
Statement of Changes in Equity
For the period ended 31 March 2016
Share
Capital
Merger Relief
Reserve
Retained
Earnings
Total
equity
£'000
£’000
£'000
£'000
Balance at 14 January 2016
Loss for the period
Total comprehensive income for the
period
-
-
-
-
-
-
-
-
(128)
(128)
(128)
(128)
Issue of share capital
7,292
302
-
7,594
Liquidation of Marlowe Holdings Limited
-
(302)
302
-
Transaction with owners
Balance at 31 March 2016
7,292
7,292
-
302
7,594
-
174
7,466
The notes from pages 14 to 25 are part of these financial statements.
12
Statement of Cash Flows
For the period ended 31 March 2016
Notes
2016
£’000
Cash flows from operating activities
Cash flows from operations
14
Net cash generated from operating activities
Cash flows from investing activities
Cash received on acquisition of Marlowe Holdings
Limited
Net cash generated from investing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at start of period
Cash and cash equivalents at end of period
-
-
10,619
10,619
10,619
-
10,619
Cash and cash equivalents shown above comprise:
Cash at bank
11
10,619
The notes from pages 14 to 25 are part of these financial statements.
13
Notes to the Financial Statements
For the period ended 31 March 2016
1. General information
Marlowe plc (the “Company”) is a strategic investment company incorporated in the United Kingdom
(no. 09952391) on 14 January 2016.
The Company’s primary objective is to acquire and develop businesses in the outsourced business
service sector with a focus on those that provide critical asset maintenance services in the United
Kingdom.
The Company’s issued share capital is traded on the Alternative Investment Market of the London
Stock Exchange (“AIM”), a market operated by the London Stock Exchange plc in the United
Kingdom (ticker symbol MRL). The address of the registered office is Fifth Floor, 55 King Street,
Manchester, M2 4LQ
2. Summary of significant accounting policies
The principle accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied, unless otherwise indicated.
Basis of preparation
The financial statements of the Company have been prepared in accordance with EU endorsed
International Financial Reporting Standards (“IFRS”), IFRIC interpretations, and the Companies Act
2006 applicable to companies reporting under IFRS.
The financial statements have been prepared on a going concern basis under the historical cost
convention, as modified in connection with certain financial instruments. The preparation of financial
statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the Company’s accounting
policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the financial statements are disclosed in this note.
Going concern
After reviewing the Company's forecasts and projections, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational existence for the
foreseeable future. The Company therefore continues to adopt the going concern basis in preparing
its financial statements.
Functional and presentational currency
All amounts in these financial statements are presented in thousands of United Kingdom pounds
sterling, the Company’s presentational and functional currency, unless otherwise stated.
Currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into
the functional currency using the exchange rates prevailing at the statement of financial position
date. Foreign exchange gains and losses arising from translation are included in the statement of
comprehensive income.
14
Notes to the Financial Statements (continued)
2. Summary of significant accounting policies (continued)
Intangible assets
Intangible assets are recognised when they are controlled through contractual or other legal rights,
or are separable from the rest of the business, and their fair value can be reliably measured.
Intangible assets that are regarded as having indefinite useful lives are not amortised. Intangible
assets that are regarded as having limited useful lives are amortised on a straight-line basis over
those lives. Assets with indefinite lives are reviewed for impairment annually and other assets are
reviewed for impairment whenever events or circumstances indicate that the carrying amount may
not be recoverable. The recoverable amount is the higher of value in use or fair value less costs to
sell. Amortisation and any impairment write downs are recognised in profit or loss.
Website development costs
Website development costs recognised as assets are amortised on a straight-line basis over their
estimated useful lives (expected to be up to five years). Residual values and useful lives are
reviewed each year.
Property, plant and equipment
Property, plant and equipment is stated at historical cost, less accumulated depreciation and
accumulated impairment losses. Depreciation is provided on a straight line basis.
Office equipment, fixtures and fittings
20%
% per annum
Trade and other receivables
Trade receivables, classified as loans and receivables in accordance with IAS 39 “Financial
Instruments: Recognition and Measurement”, are recorded initially at fair value and subsequently
measured at amortised cost. A provision for impairment of trade receivables is established when there
is evidence that the Company will not be able to collect all amounts due according to the original terms.
The amount of the provision is the difference between the assets’ carrying amount and the present
value of future cash flows discounted at the effective interest rate. The movement in provision is
recognised in profit or loss.
Other receivables and prepayments are recognised at fair value plus transaction costs, if any, which
are directly attributable to their acquisition or origination. These are subsequently measured at
amortised cost using the effective interest method, less provision for impairment. Given the nature of
other receivables and prepayments, however, and the short time involved between their origination
and settlement, their amortised costs are not materially different to their fair value at the date of
origination.
Cash and cash equivalents
Cash and cash equivalents as defined for the Statement of Cash flows comprise cash in hand, cash
held at bank with immediate access, other short-term investments and bank deposits with maturities
of three months or less from the date of inception and bank overdrafts. Bank overdrafts are shown in
current liabilities in the statement of financial position.
15
Notes to the Financial Statements (continued)
2. Summary of significant accounting policies (continued)
Trade and other payables
Trade payables, classified as other liabilities in accordance with IAS 39, are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest rate method. Given
the nature of trade payables, however, and the short time involved between their origination and
settlement their amortised cost is not materially different from their fair value at the date of origination.
Other payables are stated at amortised cost.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from
accounting profit as reported in the Statement of Comprehensive Income because it excludes items of
income or expenses that are taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that
have been enacted or substantively enacted at the reporting date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amount of assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit and accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary difference and deferred tax assets are
recognised to the extent it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary
differences arise from the initial recognition of goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that affects neither the tax profits
nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is
settled or the asset is realised based upon tax rates that have been enacted or substantively enacted
at the reporting date. Deferred tax is charged or credited in profit or loss, except when it relates to
items charged or credited directly to other comprehensive income and equity, in which case the
deferred tax is also dealt with in other comprehensive income and equity.
Equity
Ordinary shares are classified as equity. Transaction costs directly attributable to the issue of new
shares are reported, net of tax, in shareholder’s equity.
Critical accounting estimates and judgements
The preparation of the Company’s financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the disclosure of contingent liabilities, at the reporting date. However, the uncertainty
about these assumptions and estimates could require a material adjustment to the carrying amount of
the asset or liability affected in the future.
On 30 March 2016, in accordance with the provisions of Part VII of the International Business
Companies Act, 1990 of Belize (the “IBCA”), Marlowe Holdings Limited merged with Marlowe plc so
that Marlowe plc became the surviving Company resulting from the merger and all rights and
obligations of Marlowe Holdings Limited vested with the Company.
16
Notes to the Financial Statements (continued)
2. Summary of significant accounting policies (continued)
As Marlowe Holdings Limited was not considered to be a business, the merger is not within the scope
of IFRS 3 Business Combinations and the directors have accounted for the merger as a share
purchase of all assets and liabilities as at 30 March 2016.
Subsequent to the period end the Company has made a number of significant acquisitions. The
assessment of the fair values of the assets and liabilities is inherently judgemental. Where these are
still being assessed and until information is received, the amounts disclosed in the financial statements
are included as provisional.
Adoption of new and revised standards
(a) New standards, amendments and interpretations issued and effective during the financial period
commencing 14 January 2016:
There are no standards, interpretations or amendments to existing standards that are effective for the
first time for the financial period beginning 14 January 2016 that would be expected to have a material
impact on the Company.
(b) Standards, amendments and interpretations, which are effective for reporting periods beginning
after the date of these financial statements which have not been adopted early:
New standards, amendments to standards and interpretations have been issued as detailed below but
are not effective for the year ended 31 March 2016. The Company has not early adopted any of these
standards and is currently assessing the impact of their adoption.
IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial
assets and financial liabilities. An updated version of IFRS 9 was issued on 19 November 2013. It
replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments.
IFRS 9 requires financial assets to be classified into two measurement categories: those measured as
at fair value and those measured at amortised cost. The determination is made at initial recognition.
The classification depends on the entity’s business model for managing its financial instruments and
the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains
most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken
for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in
other comprehensive income rather than the income statement, unless this creates an accounting
mismatch. The Company is yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 no later
than the required accounting period beginning on or after 1 January 2018, the date advised by the
IASB.
A number of other new standards, amendments to standards and interpretations are effective for
annual periods beginning after 1 April 2016, and have not been applied in preparing these financial
statements. None of these are expected to have a significant effect on the financial statements of the
Company.
17
Notes to the Financial Statements (continued)
3. Financial and capital risk management
The overall objective of the financial risk management of the Company is to minimise risks that may
have an adverse impact on the Company’s results, cash flows and financial position. The Company
is subject to market (interest rate) and credit risks on its cash and cash equivalents.
Interest rate risk arises from the effects of fluctuations in the prevailing levels of markets interest rates
on the fair value of financial assets and liabilities and future cash flow. The majority of the Company’s
financial assets and liabilities are non-interest bearing. As a result, the Company is not subject to
significant amount of risk due to fluctuations in prevailing levels of market interest rates.
The credit risk is mitigated by banking with reputable and well established financial institutions, whose
performance and credit worthiness is reviewed at least annually by the Directors.
4. Administrative expenses
Legal and professional
Audit fee
Other expenses
Total administrative expenses
2016
£’000s
43
10
75
128
5. Operating leases
The Company leases an office under an operating lease. The future minimum lease payments are as
follows:
Minimum lease payments due
1 to 5
years
£’000s
After 5
years
£’000s
within
1 year
£’000s
Total
£’000s
31 March 2016
20
-
-
20
18
Notes to the Financial Statements (continued)
6. Taxation
Current tax
United Kingdom corporation tax on loss for the
current period
Total current tax
Deferred tax
Origination and reversal of timing differences
Total tax charge
2016
£’000s
-
-
-
-
The charge for the year can be reconciled to the loss per the statement of financial position as follows:
Loss before taxation
2016
£’000s
(128)
Expected tax charge based on the standard rate of
corporation tax rate in the United Kingdom of 20%
26
Tax effect of expenses that are not deductible in
determining taxable loss
Taxable losses carried forward
Tax expense for the year
(13)
(13)
-
19
Notes to the Financial Statements (continued)
7. Loss per ordinary Share
Basic loss per ordinary share have been calculated on the loss for the period after taxation and the
weighted average number of ordinary shares in issue during the period.
Weighted average number of shares in issue
Total loss for the period
Total basic loss per ordinary share (pence)
2016
14,584,999
(£127,716)
(0.9)
Share issue contingent on acquisition of Fire and Security (Group) Limited
3,000,000
Weighted average fully diluted number of shares in issue
17,584,999
Total fully diluted loss per share (pence)
(0.9)
20
Notes to the Financial Statements (continued)
8. Intangible assets
Cost
14 January 2016
Balances transferred from Marlowe Holdings Limited
31 March 2016
Accumulated amortisation and impairment
14 January 2016
Balances transferred from Marlowe Holdings Limited
31 March 2016
Carrying amount
31 March 2016
Website
development
costs
£’000s
Total
£’000s
-
3
3
-
-
-
-
3
3
-
-
-
3
3
21
Notes to the Financial Statements (continued)
9. Property, plant and equipment
Office Equipment
£’000s
Total
£’000s
Cost
14 January 2016
Balances transferred from Marlowe Holdings Limited
31 March 2016
Accumulated Depreciation
14 January 2016
Balances transferred from Marlowe Holdings Limited
31 March 2016
Carrying amount
31 March 2016
10. Trade and other receivables
Other receivables
Prepayments and accrued income
VAT receivable
Total Trade and Other Receivables
-
5
5
-
(1)
(1)
-
5
5
-
(1)
(1)
4
4
2016
£’000s
10
1
7
18
The carrying amounts of trade and other receivables are denominated in United Kingdom pounds
sterling. The fair values of trade and other receivables approximate to their book values.
22
Notes to the Financial Statements (continued)
11. Cash and cash equivalents
Cash at bank
2016
£’000s
10,619
Total cash and cash equivalents
10,619
12. Trade and other payables
Other payables
Other taxation and social security
Accruals and deferred income
Total
2016
£’000s
46
3
129
178
The carrying amounts of trade and other payable are denominated in United Kingdom pounds sterling.
The fair values of trade and other payable approximate to their book values. During the year 99,999
redeemable preference shares of £0.50 each, classified as liabilities, were issued and redeemed.
13. Called up share capital
Authorised:
28,113,332 ordinary shares of 50p each
2016
£’000s
14,057
Allotted, issued and fully paid;
14,584,999 ordinary shares of 50p each
7,292
The issued ordinary share capital is as follows:
Date
Number of ordinary shares
Issue price
14 January 2016
1
30 March 2016 – Acquisition of Marlowe
Holdings Limited
14,584,998
0.5
0.5
31 March 2016
14,584,999
23
Notes to the Financial Statements (continued)
£3.0 million was received prior to the period end in advance of a contingent share issue to be executed
upon completion of the acquisition of Swift. The shares were issued on 1 April when the transaction
was completed.
14. Cash inflow from operations
Loss before tax
Increase in trade and other receivables
Increase in trade and other payables
Expenses paid by Marlowe Holdings Limited
Net cash flow from operations
2016
£’000s
(128)
-
108
20
-
15. Investments
On 30 March 2016, the Company merged the assets and liabilities of Marlowe Holdings Limited, a
strategic investment company incorporated in Belize, for an equity consideration of £7.3 million
(14,584,998 shares of 50p). The fair values are as follows:
Property, plant and equipment
Intangible assets
Cash
Trade and other receivables
Subscription received in advance
Trade and other payables
Net assets
Fair value at
acquisition
£’000s
4
3
10,619
38
(3,000)
(70)
7,594
Marlowe Holdings Limited’s net assets included a £20,000 receivable from Marlowe plc. This was
subsequently eliminated following the merger along with the corresponding payable in Marlowe plc’s
statement of financial position. As a result, net assets of £7.574 million were transferred upon the
merger. A gain of £302,000 arose on merger and was recognised in the Merger Relief Reserve.
Subsequent to Marlowe Holdings Limited’s liquidation following acquisition this was transferred to
Retained Earnings.
24
Notes to the Financial Statements (continued)
16. Financial instruments
The Company’s financial instruments comprise cash at bank and various other receivable and payable
balances that arise from its operations. The main purpose of these financial instruments is to finance
the Company’s operations.
Carrying value of financial assets and (liabilities)
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Subscription received in advance
2016
£’000s
17
10,619
(48)
(3,000)
17. Directors and employees
The directors who served during the period did not receive any remuneration in respect of their services
to the Company. No wages and salaries were incurred during the financial period.
18. Related party transactions
There were no related party transactions during the financial period.
19. Post balance sheet events
Subsequent to the period end the company made the following acquisitions:
On 1 April 2016 the Company acquired the business and assets of Fire and Security (Group) Limited
(“Swift”), a fire protection and security solutions business, for a total consideration of £13.0 million,
satisfied by the payment of £8.5 million in cash on completion, £1.0 million in cash on 31 May 2016
and £3.5million satisfied by the issuance of 3.5 million ordinary shares in the Company. The
provisional fair values are as follows:
Provisional fair value at acquisition
Trade and other receivables
Intangible assets – customer relationships
Property, Plant and Equipment
Inventories
Cash
Intangible assets – order backlog
Trade and other payables
Deferred tax liabilities
Tax liabilities
Net assets acquired
Goodwill
One hundred percent of the equity of Swift was acquired in this transaction.
25
£’000s
6,554
3,116
875
615
544
143
(6,453)
(652)
(211)
4,531
8,469
In connection with the acquisition £3.0 million in cash was raised through the issuance of 3,000,000
ordinary shares of the Company at an issue price of £1 per share.
On 15 April 2016 the Company acquired the business and assets of WCS Environmental Group
Limited (“WCS”), a provider of integrated water treatment, hygiene, testing and engineering services,
for a total consideration of £2.5 million, satisfied by the payment of £2.025 million in cash and £0.475m
satisfied by the issuance of 287,878 ordinary shares of the Company. The provisional fair values are
as follows:
Provisional fair value at acquisition
Trade and other receivables
Intangible assets – customer relationships
Property, Plant and Equipment
Inventories
Trade and other payables
Deferred tax liabilities
Tax liabilities
Net Cash
Net assets acquired
Goodwill
£’000s
1,380
699
243
36
(505)
(162)
(55)
(43)
1,593
907
One hundred percent of the equity of WCS was acquired in this transaction.
On 11 May 2016 the Company acquired the business and assets of Fire Alarm Fabrication Services
Limited, a provider of fire protection services, for a total consideration of £2.5 million, satisfied by the
payment of £2.4 million in cash on completion and £0.1 million in cash payable subject to the
achievement of certain performance targets by the acquired business in the period ending 11 May
2017. A purchase price allocation exercise has not yet been performed.
One hundred percent of the equity was acquired in this transaction.
26