Utilitywise – audited results for the year: Utilitywise – acquisition analysis

utilitywiseUtilitywise, a utility cost management consultancy, has announced final audited results for the year ended 31 July 2013. These include certain amendments to the Company’s Income Statement from that presented with the Company’s preliminary results issued on 15 October 2013. This has led to additional revenue of £430,595 being recognised within the audited consolidated financial statements for the year ended 31 July 2013 with a consequential increase in profitability, There is no impact on the Company’s cash flows. For full details go the the London Stock Exchange announcement here.

The revenue and EBITDA adjustments to the 2013 income statement of the Company are as follows:

Revenue £24.83M prelims: £25.25M (audited)
EBITDA £7.39M prelims: £7.82M (audited)

Highlights

  • Like for like revenue growth up 61%.
  • Acquisitions of Clouds Environmental Consultancy Ltd, Aqua Veritas Consulting Ltd and Energy Information Centre Ltd.
  • 15,333 customers and 44,361 meters at 31 July (30 September 2012: 11,400 and 32,972 respectively) with additional 550 customers and 23,000 meters added through EIC.
  • £16.6 million of secured contracts waiting to go live as at 31 July ( 31 July 2012: £7.1 million – 30 September 2013 (post period) £18.2 million).
  • Proposed final dividend payment of 1.8p, making total dividend for the year of 2.6p.

Geoff Thompson, Chief Executive of Utilitywise, commented

“Our first full year as a plc has proved a very successful one. As well as delivering very strong organic growth we have been able to invest and build for the future. Integration of the three businesses that we acquired is progressing well and we have entered the new financial year with an improved suite of products and services to satisfy the wider energy needs of all businesses, regardless of size.

“The market in which we operate remains highly fragmented and we have still attracted only a very small percentage of our addressable market. Through our strong relationships with energy supply companies and our ability to identify customers and deliver the optimum solutions, we remain confident in the continued success of the Company.”

Read the full announcement here

Utilitywise Acquisition Analysis

1. Acquisition of Clouds Environmental Consultancy Limited

Utilitywise Plc acquired the entire share capital of Clouds Environmental Consultancy Limited on 1 October 2012 for £1,040,821 in order to enhance the service offering provided by the Group.

Consideration consisted of both cash payments and the issue of shares, an element of which is contingent on the performance of Clouds Environmental Consultancy Limited to 31 July 2013. Contingent consideration has been included as a best estimate of amounts payable.

Goodwill on consolidation has been calculated as follows:

  £
Amount of consideration 1,040,821
     
Fair value of net assets acquired:  
Property, plant and equipment   15,260
Receivables   122,289
Cash   159,152
Payables     (251,788)
Net assets   44,913
     
Goodwill   995,908
     

 

Consideration:  
Cash   355,821
Shares issued   300,000
Contingent consideration    

385,000

Total  consideration   1,040,821

The goodwill reflects expected synergies from combining the two businesses and is not tax deductible.

The total value of the contingent consideration is based on a multiple of expected EBITDA capped at £385,000. This is split equally between cash and shares.  All of the contingent consideration is included in trade and other payables as it meets the definition of a financial liability.

Since the date of acquisition Clouds Environmental Consultancy Limited has generated revenue of £916,913 and a profit before tax of £203,999 which is included in the consolidated statement of comprehensive income.

Assuming Clouds Environmental Consultancy Limited was acquired at the beginning of the annual reporting period, group revenue would be £24,966,494 and profit before tax £6,053,067. 

The Group estimate costs incurred in relation to the transactions to be £49,403. These costs are included within exceptional items in the consolidated statement of total comprehensive income.

2. Acquisition of Aqua Veritas Consulting Limited

Utilitywise Plc acquired the entire share capital of Aqua Veritas Consulting Limited on 16 April 2013 for £2,161,677 in order to enhance the service offering provided by the Group.

Consideration consisted of both cash payments and the issue of shares, an element of which is contingent on the performance of Aqua Veritas Consulting Limited to 30 April 2014. Contingent consideration has been included as a best estimate of amounts payable.

Goodwill on consolidation has been calculated as follows:

  £
Amount of consideration 2,161,677
     
Fair value of net assets acquired:  
Customer related intangible assets    

443,000

Technology based intangible assets    

241,000

Property, plant and equipment   12,158
Receivables   349,011
Cash   15,361
Payables   (566,494)
Deferred tax liability   (136,800)
Net assets   357,236
     
Goodwill   1,804,441
     

 

Consideration:  
Cash   70,385
Liabilities settled   91,292
Contingent consideration    

2,000,000

Total consideration   2,161,677

 

Customer related intangible assets relate to customer relationships in place at the date of acquisition.

Technology related intangible assets relate to hardware design intellectual property.

The goodwill reflects the value of the workforce and expected synergies from combining the two businesses and is not tax deductible.

The total value of the contingent consideration is based on a multiple of expected EBITDA, capped at £4,000,000. This is split equally between cash and shares. All of the contingent consideration is included in trade and other payables as it meets the definition of a financial liability.

Since the date of acquisition Aqua Veritas Consulting Limited has generated revenue of £276,886 and a profit before tax of £168,198 which is included in the consolidated statement of comprehensive income.

Assuming Aqua Veritas Consulting Limited was acquired at the beginning of the annual reporting period, group revenue would be £24,940,096 and profit before tax £5,844,453.

The Group estimate costs incurred in relation to the transactions to be £70,892. These costs are included within exceptional items in the consolidated statement of total comprehensive income.

3. Acquisition of Energy Information Centre Limited

Utilitywise Plc acquired the entire share capital of Energy Information Centre Limited on 3 July 2013 for £18,201,154 in order to enhance the service offering provided by the Group.

Consideration consisted of both cash payments and the issue of shares.

Goodwill on consolidation has been calculated as follows:

  £
Amount of consideration 18,201,154
     
Fair value of net assets acquired:  
Customer related intangible assets    

6,239,000

Intangible fixed assets   108,025
Property, plant and equipment   3,845,911
Investments   200
Receivables   1,094,239
Cash   3,008,473
Payables   (3,386,677)
Deferred tax liability   (1,247,800)
Net assets   9,661,371
     
Goodwill   8,539,783
     

 

Consideration:  
Cash   11,662,500
Shares issued   5,390,125
Deferred cash   1,148,529
Total consideration   18,201,154

Customer related intangible assets relate to customer relationships in place at the date of acquisition.

The goodwill reflects the value of the workforce and expected synergies from combining the two businesses and is not tax deductible.

Since the date of acquisition Energy Information Centre Limited has generated revenue of £531,444 and a profit before tax of £145,867 which is included in the consolidated statement of comprehensive income.

Assuming Energy Information Centre Limited was acquired at the beginning of the annual reporting period, group revenue would be £31,108,691 and profit before tax £7,901,001.

The Group estimate costs incurred in relation to the transactions to be £786,131. Of this amount £317,833 relate to the issue of new shares to fund the acquisition and have subsequently been taken to the share premium reserve. The remaining costs are included within exceptional items in the consolidated statement of total comprehensive income.

UK, South Shields

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