Final results for the year ended 31 December 2021

RNS Number : 8391M

Facilities by ADF plc

26 May 2022

 

26 May 2022

Facilities by ADF plc

("Facilities by ADF", the "Company" or the "Group")

Final results for the year ended 31 December 2021

Facilities by ADF, the leading provider of premium serviced production facilities to the UK film and high-end television industry, is pleased to announce its maiden unauditedfinal results for the year ended 31 December 2021.

Financial highlights

	31 Dec 2021 £m	31 Dec 2020 £m	31 Dec 2019 £m
Group revenue	27.8	8.0	15.9
Adjusted EBITDA	7.7	0.8	3.2
Adjusted EBITDA %	28%	10%	20%

Operational highlights

·   Significant revenue growth across Main Packages sales and Additional Sales following the pandemic.

·       Supported 39 productions, including Doctor Strange, Essex Serpent, Slow Horses, Sanditon, Disney's Willow, The Crown, Peaky Blinders, The Outlaws and have a strong pipeline of films and TV shows for the coming year.

·   Secureda number of contracts for future productions through existing customers.

· Experienced increased demand in 2021 for additional content from global streaming brands, firmly establishing ourselves in the UK production landscape.

· Begun construction of new operational base at Longcross, Surrey, which is expected to be fully operational by Q4 2022.

Outlook

· Market dynamics continue to be strong with increasing demand for film and high-end television in the UK. This is further supported by unprecedented levels of investment in UK Studio space and content, which bodes well for the Company's growth ambitions.

· The Company raised £15m of gross proceeds on admission to trading on AIM and has already started to invest by expanding orders for additional vehicles and trailers to meet demand.

·         Recent contract wins with new and existing customers have strengthened ADF's expanding network of contacts.

· The Group continues to have strong order visibility in the new financial year with the 2022 order book almost fully booked.

Commenting on the results, Marsden Proctor, CEO, said:

"We are delighted to report on a strong year of trading, delivered in the lead up to our IPO on AIM, in which we experienced increasing demand for our offering. Our successful IPO, completed in January 2022, has provided us with the means to further strengthen the Company's financial position and execute on our growth strategy.

"The strength of our network of contacts, depth of our customer base and supportive market dynamics, provides us with confidence in the long-term opportunities for the business; positioning us well to capitalise on the market opportunities ahead."

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   Marsden Proctor, Chief Executive Officer   Neil Evans, Chief Financial Officer   John Richards, Chairman	via Alma PR
Cenkos (Nominated Adviser and Broker)   Ben Jeynes / Max Gould / George Lawson - Corporate Finance   Alex Pollen - Sales	Tel: [phone]
Alma PR (Financial PR)   Josh Royston   Hannah Campbell   Ella Denton	Tel: [phone] [e-mail]

OVERVIEW OF FACILITIES BY ADF

ADF's production fleet is made up of 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 the customer held well 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.

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 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

Having begun our first year as a publicly listed company, I am delighted to report a successful outcome for 2021 and a robust pipeline for 2022. Completing an IPO is a significant feat but to do so against a challenging macro-economic backdrop, and to deliver an improved share price since IPO in January, is a clear testament to the quality of the business.  Full year revenues of £27.8m and adjusted EBITDA of £7.7m demonstrate a remarkable turnaround from the impact of the Covid-19 pandemic in 2020, and equally remarkable progress from the pre-pandemic levels of 2019.

Much of this success is driven by our expanding fleet of vehicles, unrivalled long-standing customer relationships, the expertise and committed teams within the business, and a robust and growing market.

Successful IPO

At the time of our listing in January 2022, we emphasised our intention to grow the business by both organic and acquisitive routes, and to utilise our £15m of gross proceeds accordingly. I am pleased to report that this has already begun with the purchase of new capital equipment to meet the growing demand we are experiencing, and our acquisition pipeline looks very encouraging. We approach acquisitions with a robust set of criteria in that we look to work within demanding multiples, will have an element of the consideration both deferred and contingent, will in most circumstances retain the management and will keep the brand name unchanged as it serves its customer base. Whilst opportunities were limited pre-IPO, the IPO has provided significant growth capital and raised the Company's profile, and it is now a key part of the Group's growth strategy.

At IPO, we were also able to demonstrate a substantially sold-out 2022 order book and a significant order book for 2023. This continues to progress and means our new trailers, which increase our capacity, can be booked out in advance. Around 100 additional vehicles will become part of the ADF fleet in 2022, bringing the total number of vehicles to 600, with similar volumes ordered for 2023.

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 unprecedent levels of investment in UK studio space and content, which bodes well for the Group's growth ambitions. High-end TV 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, adds huge additional capacity to UK film and high-end television production capability.

At our new base at Longcross in Surrey, we are perfectly located to serve all of those sites and, whilst work has already begun, we expect to be fully operational from there by the start of Q4 2022.

People

In January 2022, we were pleased to announce the appointment of Kathryn James and Vin Wijeratne as independent Non-Executive Directors. Kathryn previously served as Managing Director of the National Exhibition Centre and as Managing Director of Luton Airport. Vin has served as CFO at the Royal Mint and as CFO of Zip World. On 9 May 2022, we appointed Alexandra Innes as an independent Non-Executive Director. Following a career in banking, Alexandra is currently a Non-Executive Director of Securities Trust of Scotland PLC, a Non-Executive Committee Member of the Bank of England and a Member of both the Group Executive Board and the Technology Investment Board at Knight Frank LLP. Through their experience and expertise, I am confident Kathryn, Vin and Alexandra will be valuable additions to our Board as we drive the business forward in its next phase of growth.

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, and to our new shareholders for their support which has enabled us to create the right working environment for ADF to succeed as a listed business.

ESG

Facilities by ADF is committed to activities that benefit the environment and society, underpinned by good governance. 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 positive ESG strategy. Being approved by Albert is becoming ever more important as studios (including the recently opened Sky Studios Elstree), will only allow approved vehicles on site. We now also have solar panels installed on our new fleet vehicles, which are all Euro 6 compliant and use biofuel where possible.

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 recent 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

We have made significant progress in our first six months as a listed business which reflects the hard work and dedication of our staff across the Group. With an excellent customer base and a supportive market backdrop, I am confident this positive momentum will persist as we continue to deliver our growth strategy in the year ahead.

John Richards

Chairman of the Board

CEO review

Overview

I am delighted to present Facilities by ADF's results for the year ended 31 December 2021. It has been a year of solid progress across the Group and a great start to life as a listed business on AIM. The increased demand for our products from our extensive customer base throughout the period, alongside strong market dynamics, have enabled us to achieve revenues for FY 2021 of c.£27.8 million and adjusted EBITDA of £7.7 million. This is ahead of market expectations at the time of IPO. Following strategic planning, the Group's IPO in January 2022 was a real success, and we are very encouraged by the welcoming reception we have received from our key stakeholders. The Group raised £15 million of growth funds on admission to AIM and we are already deploying these funds as we execute on our IPO growth strategy.

Given the continued positive momentum across the Group, and the strength of our growth strategy and business model, I am confident this progress will continue in the current and upcoming financial year.

Financial performance

The strong financial performance in the year reflects the bounce back from the impact of the Covid-19 pandemic in 2020 with the various national lockdowns. In the case of ADF, that meant the complete closure of the business for four months from March to the end of July in 2020. Following a phased return to filming, the TV & film industry has not looked back, with 2021 recording the highest ever level of activity and spend. Consequently, ADF was operating at its capacity limit for most of 2021, which is reflected in the Group's impressive financial results.

Market opportunity

The Group serves customers in an industry that has experienced significant growth and investment in recent years, with additional demand driven by a material rise in the consumption of film and high-end TV ("HETV") content via global streaming platforms such as Apple TV+, HBO Max, Netflix, Disney +, Sky TV 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, a 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 being Netflix's third largest operation after the USA and Canada. Throughout the year there has also been unprecedented levels of investment in UK studio space and content, which bodes extremely well for our growth ambitions.

Shinfield Studios in Reading, a state-of-the-art film and television production complex on over 65 acres of land at the Thames Valley Science Park in Shinfield, Berkshire, England has now been granted full planning permission for 18 sound stages with completion by the middle of 2024. 

Meanwhile, Apple TV+, are interested in an Enfield site, to add to its studio space in Aylesbury. Hertfordshire is also increasingly becoming Europe's largest TV and film production hub, comprising three studio complexes. These include a £700 million investment by Sunset Studios, the makers of Zoolander, at Broxbourne; a 93-acre site at Hertswood; and Sky's 28-acre development at Elstree.

Industry Performance

In terms of the overall performance of film and TV production in the UK, the British Film Institute ("BFI") recently reported on the year ended 31 December 2021 the following facts:

· The combined total UK spend on film and high-end (HETV) productions for the full year 2021 was £5.64 billion. This is the highest since records began and £1.27 billion higher than the previous peak reported in 2019. The total number of film and HETV productions for 2021 was 420, 19% higher than the 353 productions which started principal photography during 2020.

· 209 films began principal photography in 2021; with a total UK production spend of £1.55 billion. This is 3% higher than the £1.5 billion spent across 350 films in 2020. Inward investment productions accounted for 82% of the total UK spend (£1.28 billion). Spend on UK domestic features was £221 million or 14% of the 2021 spend, compared with £158m in 2020, 10% of the total UK spend on film production. Coproduction accounted for £58 million, or 4% of the UK spend.

· There were 211 high-end television productions filming in 2021. Total HETV production spend for 2021 was £4.09 billion, by a large margin this is highest reported spend, nearly double the previous high of £2.21 billion in 2019. Of the total number of productions, 94 or 45% were domestic, generating a total spend of £648 million (16% of the total UK spend). Total inward investment and co-production spend on HETV was £3.44 billion (84% of the total spend) across 117 productions. All of these figures are the highest, by a large margin, since the HETV tax relief was introduced in 2013.

This extremely encouraging market backdrop, alongside our strong network of contacts and growing customer base, bodes well for sustainable growth opportunities for ADF.

Competitive strength

In order to deliver large scale productions and compete at the top end of the production facilities market, the quality of a supplier's fleet needs to be incredibly high. ADF prides itself upon the strength of its 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 existing customers and being able to retain these customers is critical for the success of a business like ADF. Production companies are unlikely to change provider once they know the facilities and service levels meet their requirements, given the bespoke set of requirements for each production. The length of planning time has increased in recent years due to the rise in both demand for content and scale of productions. As a result, ADF is receiving some enquiries between 12 and 18 months before a production is filmed, with the average lead time of seven months, and its orderbook is mostly filled for 2022. This level of revenue visibility is rare in any business and allows the Group to accurately plan.

The requirement for a large amount of capital expenditure on specialised equipment and a high-quality network of contacts are the two main barriers to entry in this industry. The Board believe it would take somewhere between three to five years and require approximately £40 million of capital expenditure to replace ADF's current fleet, and a new entrant into the market without an industry contact base would likely struggle to generate sufficient leads.

We also tracked our Net Promotor Score (NPS) throughout the year, and we are continuing to perform extremely well. We received an overall NPS score of 88, which is a first class result in this internationally recognised customer service measurement and reflects the expertise and knowledge of our staff that enables us to be a market leader.

Throughout the year we supported a range of productions, including Doctor Strange, Essex Serpent, Slow Horses, Sanditon, Willow, The Crown, Peaky Blinders, The Outlaws and have a strong pipeline of films and TV shows for the coming year. This visibility provides us with the confidence in our ability to deliver on our growth strategy in the new financial year and beyond.

Delivering against growth strategy

The Group has ambitions to grow organically through further investment into revenue-generating fleet equipment; and inorganically via opportunities to grow through acquisitions.

The supportive market dynamics mentioned above have led to a significant increase in demand for our services, with ADF's fleet capacity already almost fully booked for the 2022 calendar year. We have had a total of 197 new vehicles ordered for 2022/2023, with 76 already delivered.

Our total current fleet size is 514. By the end of 2022 we expect it to reach 600 and 700 by the end of 2023. The Group has committed to new fleet capital expenditure orders of approximately £7.2 million and £6.6 million for 2022 and 2023, respectively. Due to the strained worldwide supply chains, we have experienced increased lead times on delivery of our new fleet from ADF's key suppliers; General Coach Canada, who supply the Artists Trailers and Production Offices; and from DAF, who supply our Technical Vehicles, Tractor Units & Generators. To date in 2022, any delays in deliveries of new equipment has not had a major effect on the business.

Construction of our new Operational Base at Longcross in Surrey is well under way. It is a five-acre facility compared to our current 1.4 acres at Borden and we expect to be operational from there by the start of Q4 2022.

ESG

As a Group, we are conscious of our responsibility as a corporate citizen and are focused on achieving a strong ESG strategy. ADF is recognised as the first Albert approved facilities provider to the film and television industry in Europe and our progress against this accreditation continued to move forward throughout the year. We now have solar panels installed on 175 of our new vehicles and the use of low energy lighting is universal. We also remain focused on ensuring our vehicles are clean and meet the Euro 6 emission standards. All vehicles are Ultra Low Emission Zone compliant and use biofuel where possible. The health, safety and wellbeing of our employees and wider stakeholders is a key part of the company's strategy and we have engaged the consultants "Safety Forward" to assist us in improving further. We are constantly working to ensure we carry out regular health and safety inspections and audit reporting to ensure compliance. The Board also recognises the value and importance of high standards of corporate governance and has since IPO observed the requirements of the QCA Corporate Governance Code.

People

Our employees are ADF's most important asset and are key to the Group's long-term success. The achievements throughout the past year are a testament to the commitment and expertise of our staff. To strengthen our senior leadership team this year we have made several important appointments. In January 2022 we appointed Andrea Browning as the Head of HR and, to manage our expanding fleet of vehicles and trailers, Rhys Thomas as Head of Fleet. We have also secured the services of Ross McDiarmid as Deputy Chief Financial Officer as well as Janis Arents as IT Manager.

Outlook

I am pleased with the start to 2022 and life as a public company on AIM. As demonstrated this year, with the 2022 order book now almost fully booked, our business model provides a strong platform for sustainable growth. Going forward, the underlying market drivers provide us with confidence that the demand for our services will continue to expand significantly. This, coupled with our extensive network of contacts and sector expertise, positions us well to capitalise on the market opportunity ahead.

Marsden Proctor

Chief Executive Officer

Chief Financial Officer's Review

The financial results for the year reflect the huge bounce back from the impact of restrictions in 2020 arising from the Covid-19 pandemic, with high demand in 2021 for additional content from the global streaming brands now firmly established in the UK production landscape.

Revenue

ADF's revenue increased by 245% in 2021 compared to 2020, however there were prolonged periods of closure in 2020 as a result of the first national lockdown in the UK. ADF closed down from the end of March 2020 until the end of July 2020, with all staff on furlough, other than a small team of 5 to administer the business during the closure. From July 2020 there was a controlled return to production in the film and TV industry, which was among some of the first sectors to be allowed back to work after the national lockdown. Thus 2020 results are not comparable to 2021 and hence reference is made in the narrative in the report to 2019 as the last full 'normal' year of operation.

Turnover £M's	2021	2020	Inc. vs 2021	2019	Inc. vs 2021
Main packages	£15.6	£5.3	196%	£9.1	70%
Additional sales	£11.8	£2.7	344%	£6.5	82%
Other income	£0.4	£0.1	236%	£0.3	39%
Total	£27.8	£8.0	245%	£15.9	74%
Uplift on main packages %	76%	50%	50%	71%	7%

The table above shows the revenue for the year split out between the 2 main headings, being Main Packages and Additional Sales, plus other miscellaneous sales.

Main Package sales

Main packages are agreed with ADF's clients, in most cases several months in advance, for the hire of specific equipment over a set timeframe. Each type of equipment has a set daily hire rate. The cost of ADF staff required to be onsite to manage and service the equipment is also calculated by reference to a set daily hire rate.

Additional sales

As ADF's trailers can be booked six or more months in advance, client requirements invariably change in the run up to filming. 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. In 2021, the value of additional sales was 76% of the initial package revenue compared to 50% during the Covid-interrupted 2020 (and 71% in 2019). Specifically, additional sales include:

·       Labour recharges - this is the largest component of additional revenue (typically more than half) and is principally payments for drivers to move trailers & equipment around the various locations on each production.

·    Additional trailer hire - incremental vehicles required during the project.

·       Fuel recharges - when a customer requests ADF's vehicles be moved around, ADF will recharge for the fuel used (with a c10% admin fee). ADF also sell fuel cards that the clients' staff can use as they move about between sets. Through an arrangement with Shell, ADF also get a rebate (of c3%) on fuel purchased.

·  Sundry recharges - small in size, and includes items such as consumable products, hand sanitisers, toiletries etc.

There was, as in previous years, an element of revenue seasonality, with a build up to the key summer months when outdoor filming on location is more reliable with better weather, and a tail off in December when the TV & film industry generally has a 3-4-week hiatus.

Revenue Mix

ADF worked on 39 productions in 2021 with an average revenue value of £682K. This was a significant increase on the pre-Pandemic average value, which was £338K in 2019. This is partly a reflection of film and higher-end TV productions getting longer and more cost intensive.

Production value No. £0 - £500K 19 £500K - £1.0M 13 £1.0M - £1.5M 4 £1.5M - £2.0M 1 £2.0M - £2.5M 1 £2.5M - £3.0M 1 39

Direct Costs & Gross Profit

Direct costs comprise a number of significant elements:

· Payroll for ADF staff based at production sites (studios and on location, managing and servicing the equipment), together with ADF & agency HGV drivers to move equipment between locations, and ADF staff employed in our workshops, bodyshop and trailer manufacturing plant.  ADF's direct payroll cost in 2021 was 28% of revenue, compared to 61% in 2020, when the business was closed for 4 months during the national lockdown (and 35% in 2019, the last full comparable year);

·   Repair & running costs for motor vehicles & trailers - some economies were achieved during 2021 as a result of the continued investment in new, better-quality equipment;

·  Fuel - further economies were achieved with the increasing scale of individual productions, balanced by fluctuating fuel prices.

The overall gross margin for 2021 was 39% compared to 7% during 2020 (and 32% in 2019).

Administrative Expenses

Administrative costs comprise payroll for management and office-based staff, rent & facility related costs for the 3 mains sites that the company operates from, depreciation & amortisation, and various other overheads. Excluding depreciation and amortisation, administrative expenses were 11.3% of revenue compared to 20.3% in 2020 (10.8% in 2019).

Non- Recurring Expenses

Non-recurring expenses comprise professional adviser costs and other one-off costs relating to the listing of Facilities by ADF Plc on the London Stock Exchange AIM market on 5^th January 2022.

Share Based Payments

These relate to certain options granted to 3 employees. The cost was calculated under the Black Scholes method.

Operating Profit

Operating profit for the year was £3.1 million compared to an operating loss of £69,000 in 2020 (£2.4 million in 2019). 

Adjusted EBITDA

Adjusted EBITDA is the adjusted profit before tax, prior to the addition of finance income and deduction of depreciation, amortisation, and finance expenses.

The table below shows the bridge between profit before tax (2020 loss before tax) to Adjusted EBITDA (£000's).

Adjusted EBITDA 2021 2020 Profit/(loss) before tax £2,794 (£479) Add back: Finance expenses £358 £411 Depreciation & amortisation £1,922 £895 Non-recurring expenses £1,322 £0 Share based payment expense £1,332 £0 Adjusted EBITDA £7,728 £827 Adjusted EBITDA % 27.8% 10.3%

Cash Flow & Net Debt

Operating cash flows before movements in working capital increased from a deficit of £(479,000) in 2020 to a surplus of £2.8 million in 2021. Cash generated from operations increased from £1.8 million in 2020 to £8.6 million in 2021.

Trade & other receivables increased by £1.1 million, and trade and other payables increased by £2.9 million, predominantly due to costs related to the IPO on 5^th January 2022.

At 31 December 2021, net debt (borrowings less cash) was £7.6 million which compares to £9.1 million at the prior year end.

This is after non-financed investment in additional equipment of £780,000 and dividends of £913,000 (2020: £371,000).

Cash Flow & Net Debt 2021 2020 Cash Flow: Cash balances B/F £1,254 £1,330 Movement £3,733 (£76) Cash balances C/F £4,987 £1,254 Debt: Leases & Hire Purchase £12,265 £9,373 Bank loans £342 £946 Total £12,607 £10,319 Net Debt £7,620 £9,065

Subsequent Events

As noted elsewhere in the Annual Report, Facilities by ADF Plc listed on the London Stock Exchange AIM market on 5^th January 2022.

Neil Evans FCA

Chief Financial Officer

Consolidated income statement

Profit & Loss - Y/E Dec (£m)		FY19A	FY20A	FY21A
Revenue		£15.9	£8.0	£27.8
Growth		26%	-49%	245%
Cost of sales		£(10.9)	£(7.5)	£(16.9)
Gross profit		£5.1	£0.6	£10.9
Gross margin		32%	7%	39%
Admin expenses		£(1.9)	£(1.7)	£(3.2)
Other income		£0.0	£1.9	£0.0
Adj EBITDA		£3.2	£0.8	£7.7
Adj EBITDA margin		20%	10%	28%
Non-recurring expenses		£0.0	£0.0	£(1.3)
Share based payments		£0.0	£0.0	£(1.3)
EBITDA		£3.2	£0.8	£5.1
Depreciation & amortisation		£(0.8)	£(0.9)	£(1.9)
EBIT		£2.4	£(0.1)	£3.2
Net interest expense		£(0.2)	£(0.4)	£(0.4)
PBT		£2.2	£(0.5)	£2.8
Tax charge		£(0.5)	£0.1	£(1.5)
PAT		£1.7	£(0.4)	£1.3

Consolidated cashflow statement

Cash Flow - Y/E Dec (£m)		FY19A	FY20A	FY21A
PBT		£2.2	£(0.5)	£2.8
Depreciation & amortisation		£0.9	£0.9	£1.9
Working capital		£0.1	£0.6	£1.8
Share based payments		£0.0	£0.0	£1.3
Other items		£0.6	£0.4	£0.1
Net Interest Expense		£0.3	£0.4	£0.4
Corporation Tax (paid) / received		£(0.3)	£0.0	£0.4
Net Cash Flow from Operating Activities		£3.8	£1.8	£8.6
Purchase of property, plant and equipment		£(0.2)	£(0.1)	£(0.8)
Purchase of right of use assets		£(6.9)	£(3.5)	£(5.9)
Net Cash Flow from Investment Activities		£(7.1)	£(3.6)	£(6.7)
Equity issuance		£0.0	£0.0	£0.8
Net Debt Borrowings / Repayments		£6.7	£3.5	£5.5
Lease Payments		£(1.9)	£(1.3)	£(3.1)
Dividends		£(0.5)	£(0.4)	£(0.9)
Other items		£0.0	£0.0	£(0.5)
Net Cash Flow from Financing Activities		£4.3	£1.8	£1.8
Net Increase / (Decrease) in Cash		£1.0	£0.0	£3.7
Cash at Beginning of Year		£0.3	£1.3	£1.3
Cash at End of year		£1.3	£1.3	£5.0

Consolidated balance sheet

Balance Sheet - Y/E Dec (£m)		FY19A	FY20A	FY21A
Property, plant and equipment		£3.2	£3.4	£4.1
Right-of-use assets		£8.8	£11.1	£15.1
Goodwill & other intangible assets		£0.0	£0.0	£0.0
Total Non-Current Assets		£12.0	£14.5	£19.2
Cash		£1.3	£1.3	£5.0
Trade & other receivables		£0.8	£1.0	£1.7
Total Current Assets		£2.1	£2.3	£6.7
Short term debt		£0.0	£0.5	£0.1
Lease liabilities		£0.8	£2.1	£2.7
Trade & other payables		£1.9	£2.3	£5.1
Total Current Liabilities		£2.7	£4.9	£7.9
Long term debt		£0.0	£0.4	£0.2
Lease liabilities		£6.7	£7.3	£9.6
Deferred tax		£0.9	£1.2	£2.7
Other long term liabilities		£0.0	£0.1	£0.0
Total Non-Current Liabilities		£7.6	£9.0	£12.6
Net Assets		£3.8	£2.9	£5.4

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 financial statements are for the year ended 31 December 2021; the company financial statements are for the period from incorporation to 31 December 2021. They have been prepared in accordance with UK-adopted international accountings 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 the historical financial period 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 last two years, whereby the film and television industry closed due to government lockdowns for approximately a third of the FY20 financial year.

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 and such forecasts 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.

The Group has been impacted by the COVID-19 Pandemic to a limited extent, with the Directors highlighting the Group has been able to maintain a strong balance sheet and has continued to trade profitably throughout.

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 £402,259, 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 31 December 2021 £	Year ended 31 December 2020 £
Profit/ (loss) used in calculating basic diluted EPS	1,305,886	(402,259)
Weighted average number of shares	40,135,615	39,999,999
Diluted weighted average number of shares	46,686,026	39,999,999
Earnings per share	0.032	(0.010)
Diluted earnings per share	0.028	(0.010)

3.  Property, plant and equipment

	Plant and machinery £'000	Hire Fleet £'000	Motor vehicles £'000	Computer equipment £'000	Total   £'000
Cost
At 1 January 2020	114	4,330	357	74	4,875
Additions	8	87	-	-	95
Transfers	-	632	102	-	734
Disposals	-	(457)	(196)	-	(653)
At 31 December 2020	122	4,592	263	74	5,051
Depreciation
At 1 January 2020	52	1,497	116	45	1,710
Charge for the year	8	42	11	4	65
Transfers	-	184	47		231
Disposals	-	(215)	(118)	-	(333)
At 31 December 2020	60	1,508	56	49	1,673
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
Net book amount
At 31 December 2020	62	3,084	207	25	3,378
At 31 December 2021	68	3,618	444	7	4,137

Depreciation is charged to administrative expenses within the statement of comprehensive income.

4.  Leases

The Group leases a number of assets in the jurisdictions from which it operates. All lease payments, in-substance, are fixed over the lease term. Where there are leasehold properties which hold a variable element to the lease payments made, these are not fixed and not capitalised as part of the right of use asset. 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 31 December 2021	As at 31 December 2020
Number of active leases	61	64

The Group leases include leasehold properties for commercial and head office use, motor vehicles and equipment. The leases range in length from three to ten years and vary in length depending on lease type. Leasehold properties holding the longest-term length of up to 10 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 subsidiary CAD Services Ltd.

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% - 4.2% 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 increased to 5% there would be a decrease in the carrying amount of the right-of-use asset at 31 December 2021 of £32,393 (2020: £39,404); there would be a subsequent decrease in the lease liability of £23,834 (2020: £30,418). If the incremental borrowing rate decreased to 1% there would be an increase in the carrying amount of the right-of-use asset at 31 December 2021 of £96,512 (2020: £118,841) and there would be a consequent increase in the lease liability of £67,841 (2020: £89,373).

Sensitivity analysis is not performed on hire purchase leases as interest is inherent within these lease agreements.

5.  Right-of-use assets

	Leasehold Property £'000	Motor Leasehold £'000	Hire Fleet and Motor Vehicles £'000	Equipment £'000	Total   £'000
Cost
At 1 January 2020	1,397	30	8,137	12	9,576
Additions	-	79	3,547	-	3,626
Transfers	-	-	(734)	-	(734)
Disposals	-	-	-	(4)	(4)
At 31 December 2020	1,397	109	10,950	8	12,464
Depreciation
At 1 January 2020	265	2	491	5	763
Charge for the period	292	25	510	3	830
Transfers	-	-	(231)		(231)
Disposals	-	-	-	(4)	(4)
At 31 December 2020	557	27	770	4	1,358
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
Net book amount
At 31 December 2020	840	82	10,180	4	11,106
At 31 December 2021	557	80	14,442	16	15,095

6.  Lease liabilities

	Leasehold Property £'000	Motor Leasehold £'000	Hire Fleet and Motor Vehicles £'000	Equipment £'000	Total   £'000
At 1 January 2020	1,137	26	6,361	7	7,531
Additions	-	79	2,647	-	2,726
Interest expense	41	3	345	-	389
Lease payments (including interest)	(307)	(25)	(938)	(3)	(1,273)
At 31 December 2020	871	83	8,415	4	9,373
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

Reconciliation of minimum lease payments and present value

	As at 31 December 2021 £'000	As at 31 December 2020 £'000
Within 1 year	2,996	2,247
Later than 1 year and less than 5 years	9,727	3,999
After 5 years	987	4,170
Total including interest cash flows	13,710	10,416
Less: interest cash flows	(1,445)	(1,043)
Total principal cash flows	12,265	9,373

Reconciliation of current and non-current lease liabilities

	As at 31 December 2021 £'000	As at 31 December 2020 £'000
Current	2,658	2,100
Non-current	9,607	7,273
Total	12,265	9,373

Short term or low value lease expense

	As at 31 December 2021 £'000	As at 31 December 2020 £'000
Total short term or low value lease expense	3	21
	3	21

7.  Trade and other receivables

Group	As at 31 December 2021 £'000	As at 31 December 2020 £'000
Amounts falling due within one year:
Trade receivables	622	226
Amounts recoverable on contracts	588	144
Hire purchase interest paid	127	-
Prepayments	430	295
	1,767	665

Company	As at 31 December 2021 £'000
Amounts falling due within one year:
Other receivables	127
Prepayments & accrued income	352
Taxation and social security	156
	635

8.  Trade and other payables 

Group	As at 31 December 2021 £'000	As at 31 December 2020 £'000
Amounts falling due within one year:
Trade payables	1,831	447
Other payables	101	333
Taxation and social security	959	928
Accrued expenses	1,722	222
Deferred income	519	328
	5,132	2,258

Company	As at 31 December 2021 £'000
Amounts falling due within one year:
Amounts due to subsidiaries	952
Accrued expenses	164
	1,116

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 by the Directors as at 31 December 2021: £297 (2020: due to Directors £28,668), all amounts were non-interest bearing. Revenue recognised in the year that has deferred from the previous year was £328,000 (2020: £86,393).

9.  Borrowings

	As at 31 December 2021 £'000	As at 31 December 2020 £'000
Current:
Bank loans	100	527
Other loans	-	20
	100	547
Non-current
Bank loans	242	342
Other loans	-	57
	242	399
Total borrowings	342	946

A maturity analysis of The Group's borrowings is shown below:

	As at 31 December 2021 £'000	As at 31 December 2020 £'000
Less than 1 year	100	547
Later than 1 year and less than 5 years	242	399
	342	946

Included in bank loans is a Coronavirus Business Interruption Loan Scheme (CBILS) held with Barclays. The loan was taken out in May 2020 and matures four years after this date. The loan incurs interest of 2.25% above Bank of England base rate with 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.

Included in bank loans is a trade finance facility held with Barclays. The agreement is renewed annually and provides 60 day finance facility. At 31 December 2021 the facility held a limit of £500,000 of which the following amounts had been drawn down and were outstanding £Nil (2020: £468,887). The facility incurred interest payable at 31 December 2021 of 2.5% per annum.  Included in other loans is a loan from the CAD Services Pension Scheme, whereby the trustees, A Dixon and S Haines are also Directors of CAD Services Ltd . The agreement matured over five years concluding in May 2021, where the loan was fully repaid, and all obligations released, thus the amount outstanding at 31 December 2021 was £Nil (2020: £77,202). The facility incurred interest payable at 12%.

10.  Post balance sheet events

On the 5 January 2022 the shares of the Company admitted to the London Stock Exchange trading on the UK AIM market. Admission and dealings of the ordinary shares of Facilities by ADF Plc became effective on this date. As part of the listing, and on this date, 30,000,000 new ordinary shares were placed at a price of 50p.

On 5 January 2022, the Company issued 500,000 and 390,000 new ordinary share options to M Proctor and N Evans, respectively. The options hold an exercise price of 1p and will vest after 3 years subject to specific performance measurement criteria.

On 5 January 2022 Cenkos Securities Plc were granted the conditional right to subscribe for 1,200,000 new ordinary shares at the Placing Price at any time during the three-year period from Admission.

 

END

 

 

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