FULCRUM UTILITY SERVICES LIMITED - Unaudited interim results for the six months ended 30 September 2018

Financial highlights - continued delivery on all financial metrics

·      Revenue up 49.0% to £29.2 million (2017: £19.6 million)

·      Adjusted EBITDA* up 35.7% to £5.4 million (2017: £4.0 million)

·      On a like-for-like** basis, revenue increased by 12.9% and adjusted EBITDA* up 20.9%

·      Profit before tax (before exceptional items) up 13.5% to £4.2 million (2017: £3.7 million)

·      Net cash inflows from operations of £3.0 million (2017: £2.1 million)

·      Basic earnings per share of 1.7p (2017: 1.8p)

·      Cash of £10.4 million at 30 September 2018 (2017: £14.5 million)

Strong cash flow continues to support a progressive dividend policy

·      The Board is recommending an interim dividend of 0.75p per share for FY2019, an increase of 7.1% against the prior year (2017: 0.7p per share)

·      The dividend reflects the Board's ongoing confidence in the Group's ability to generate cash and its future prospects

Operational highlights - progressive growth and delivery against strategy

·      Sustained growth in the infrastructure order book, up 8.8% since March 2018 to £45.8 million

Consolidated Interim Statement of Comprehensive Income

For the six months ended 30 September 2018 (unaudited)






Six months ended 30 September 2018


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Six months ended 30 September 2017


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Year ended 31 March 2018











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·      Significant growth in utility asset ownership with committed spend of £15.4 million at the end of September
(2017: £7.5 million)  

·      £20.0 million undrawn debt facility to support increased adoption of utility assets

·   Integration of The Dunamis Group Limited ("Dunamis") and CDS Pipe Services Limited ("CDS") progressing well and in line with expectations

·    Dunamis successfully delivered a number of projects in the period, including the first tranche in a series of electrical vehicle charging infrastructure projects

·      Increased operational capacity across the Group, strengthening electrical and multi-utility capabilities

·     Smart metering services being established: Meter Operator (MOP) accreditation achieved in September, underpinning future plans for the installation and adoption of smart meters

·      Ian Foster, Chief Operating Officer - Gas, has notified the Board that he will be retiring on 31 March 2019. A successor has been identified and will be announced in the New Year.




The results for the six months ended 30 September 2018 ("H1") reflect a period of continued growth and consolidation in our business. The Group achieved another robust performance through organic growth within our core infrastructure and asset businesses, complemented by solid acquisitive growth delivered by Dunamis and CDS, which were acquired earlier this year. A record adjusted EBITDA* of £5.4 million, profit before tax of £4.0 million and continued cash generation all support the Company's ability to maintain its progressive dividend policy. These results reflect the continued successful delivery of the Group's strategy and our commitment to meeting customer demand across each of our routes to market throughout mainland UK.


Robust financial performance


Fulcrum has delivered a robust set of results in the first six months, achieving a record adjusted EBITDA* of £5.4 million from both organic growth in our core infrastructure and asset businesses and a solid performance delivered by our recently acquired companies.  Period-on-period revenue increased by £9.6 million, or 49.0%, to £29.2 million (2017: £19.6 million) benefiting from a full six months' contribution from Dunamis, acquired at the beginning of February 2018. On a like-for-like basis, after adjusting for the acquisitions, revenues from infrastructure services amounted to £20.8 million (2017: £18.7 million) and increase of £2.5 million or 12.9%. Asset ownership revenues increased by 44.4% to £1.3 million (2017: £0.9 million. With its low cost to serve, this annuity income stream represents a secure and profitable component of the Group's future financial stability.


Gross profit increased by £2.8 million to £10.4 million (2017: £7.6 million), with gross profit margins down slightly to 35.7%
(2017: 38.9%, FY2018: 36.7%). This change in margin is predominately due to the inclusion of Dunamis for the full six-month period. On large electrical infrastructure projects delivered by Dunamis, there is typically a higher proportion of expensive plant and equipment which carries a lower margin and results in an overall dilutive effect on the project margin. On a like-for like basis, after adjusting for the acquisitions, gross profit increased by £0.9 million or 12.3%.

Adjusted EBITDA* for the period increased to £5.4 million (2017: £4.0 million) and profit before tax increased to £4.0 million

(2017: £3.7 million).

Strong returns and increased dividend

Basic earnings per share was 1.7p (2017: 1.8p) with the growth in revenue offset by the increase in issued share capital and the increased amortisation charge resulting from the acquisitions. During H1, 8,990,314 ordinary shares were issued with a nominal value of £8,990 to employees exercising vested share options.  These exercises relate to the EMI 2015 and 2016 option plans, ESS 2015 option plan and GSS 2016 option plans which are now fully exercised.  The associated cash consideration for the exercise prices for the EMI schemes was £302,268.  As at 30 September, the issued share capital of the company was 220,328,797 ordinary shares (30 September 2017: 174,656,734) with a nominal value of £220,328. The year-on-year increase in the issued share capital share relates to the acquisitions of Dunamis and CDS, along with employee share option conversions.

Working capital management continues to be a key area of focus and the Group achieved a positive operating cash flow from trading activities of £3.0 million (2017: £2.1 million) during H1. At 30 September 2018, the Group had net cash of £10.4 million (2017: £14.5 million); a £4.1 million decrease against the prior period. This decrease reflects the acquisitions of Dunamis and CDS, which utilised existing cash resources to part satisfy the consideration. It also reflects increased investment in utility asset ownership, as well as increased dividend payments. Excluding the £4.8 million paid in respect of the acquisitions, net cash increased by £0.7 million.

The Group continues to maintain a progressive dividend policy. Our aim is to operate a policy within the context of broadly two times dividend cover.  As a result of the continued strong performance and cash generation in the period, the Board will pay an interim dividend of 0.75p per share for FY2019 (FY18: 0.7p). The period-on-period dividend increase of 7.1% demonstrates the Board's confidence in the future of the Group and cash generation from both infrastructure services and utility assets. The dividend will be paid on 25 January 2019 to members on the register on 28 December 2018. Shares will be marked ex-dividend on 27 December 2018.