Final Results

Entu (UK) plc

Final Results for the Year Ended 31 October 2014

Highlights

· A significant year of development for the Group, culminating in our admission to AIM in October 2014

· Total Group revenues increased up 24.6% to £119m (2013: £95.5m)

· Revenue growth across all business segments:

o Home Improvements division reported sales of £84.3m (2013: £71.2m)

o Energy Generation and savings segment sales were £23.9m (2013: £20.8m)

o The Insulation Division sales in the year were £8.4m (2013: £1.2m)

o Repair and Renewal Service Agreements business achieved £2.4m sales during the year (2013: £2.2m)

· Group operating profit before exceptional items rose 69.5% to £10.3m (2013 £6.1m)

· Profit before tax increased 47.9% to £9m (2013: £6.1m)

· EBTIDA grew 65.6% to £10.6m in 2014 (2013: 6.4m)

· The Group also witnessed a significant shift in its profitability splits in 2014 compared to previous years, with a more equal distribution of profits among the different business segments

· Net cash at 31 October 2014 of £5.8m (2013: (£1.8m))

· Adjusted earnings per share increased 57.7% to 12.3p (2013: 7.8p)

· Special interim dividend of 1.5p per share

· This morning, MoU announced with FlowGroup plc to allow Entu to sell, install and maintain Flowgroup's electricity-generating domestic boiler and to market Flowgroup's home energy offer, through its Job Worth Doing subsidiary

Commenting on the Full Year Results, Ian Blackhurst said:

"This has been a significant year of development for the Group, culminating in our admission to AIM in October 2014. We have strengthened our leading positions in our target markets across the UK, buoyed by our strong brand reputation, our national coverage, and by steadily improving consumer demand.

"Our primary strategy is to focus on driving organic growth from our diversified, fully integrated product portfolio, and also, over time, through the development of new product and service offerings, in particular, energy efficiency products and services.

"With our market leading positions, diversified product portfolio and deep customer knowledge, we are able to look forward to the future with confidence, and the Board believes Entu is well positioned to deliver growth and shareholder value."

10 February 2015

ENQUIRIES

Chairman's Statement

Overview & Strategic Update

I am pleased to report an excellent year for Entu. The Group achieved strong financial results and completed its successful admission to trading on AIM in October.

Total Group revenues were £119m, up 24.6% on the previous year (2013: £95.5m). Group operating profit before exceptional items rose 69.5% to £10.3m (2013: £6.1m). Profit before tax increased 47.9% to £9m (2013: £6.1m). Adjusted earnings per share increased 57.7% to 12.3p (2013: 7.8p). At the year end, the Group had net cash of £5.8m (2013: (1.8m)).

The Company's admission to AIM represented the start of a phase of integration and growth for Entu that we believe has the potential to deliver significant value for our shareholders.

Whilst we are only at the start of our journey as a quoted company, we can already see evidence that the flotation will provide Entu with additional opportunities for growth, both by raising the profile of our existing businesses and by providing the Company with more readily accessible capital to fund acquisitions and other investment. The Board intends to take advantage of these new opportunities as much as is prudent whilst ensuring that the risks inherent in the Group remain properly managed and controlled.

Entu operates in a marketplace in which there are compelling opportunities for growth. There are around 27 million residential homes in the UK, and the overall home improvements market is worth an estimated £27 billion annually. Particularly exciting are the opportunities in the areas of energy generation and energy efficient products. These products are growing in popularity due to a combination of increasing consumer awareness, the generally high cost of traditional home energy products and Government incentives towards the adoption of green technology in the home. Entu is well positioned to take advantage of these market conditions.

Entu's strategy is to grow by offering and cross-selling a wide range of complementary products, including energy efficient windows, doors, conservatories, external and cavity wall insulations, solar power generation products and energy efficient boilers. The Group has a UK wide presence through established local brands, all united under the Entu name and supported by Job Worth Doing, the Group's national installation service.

There is significant scope to execute our strategy across our whole product range through enhanced marketing, increased cross-selling, more online sales and enhanced customer acquisition and retention.

In addition to implementing our organic growth strategy, we will actively look at growing the Group by acquisition in the highly fragmented existing, and complementary, product lines and market areas.

Dividend

At the time of Entu's AIM admission the Board committed to implementing a dividend policy subject to their discretion and subject to the Company having sufficient distributable reserves which, based on their expectations of current and future trading and track record of the business, would commence for the year ending 31 October 2015.

In addition to the commitment above, the Directors are pleased to declare a special interim dividend for the year ending 31 October 2015, amounting to 1.5p per share which will be paid on 13 March 2015.

 Subject to the conditions noted above, the Board confirms its intention to recommend a total dividend (excluding the exceptional first interim dividend) of 8p per share for the year ending 31 October 2015.

The dividend will be paid in accordance with the following timetable:

Ex-Dividend Date 19 February 2015

Record Date 20 February 2015

Pay Date 13 March 2015

Annual General Meeting

The Company's 2015 Annual General Meeting will be held at 9:30am on 24 March 2015 at Eversheds LLP, 70 Great Bridgewater Street, Manchester M1 5ES.

Board & People

These strong results would not have been achieved without the enthusiasm, professionalism and commitment shown by our people this year. On behalf of the Board, I would like to thank them for all their hard work, and to emphasise how much I am looking forward to working with them as Entu enters this new and exciting phase of its life as a listed company.

The Entu (uk) plc Board itself has seen many changes this year, with the additions of myself as Independent Non-executive Chairman, and Lorraine Clinton and David Grundy as Independent Non-executive Directors to support Ian and Darren in driving the Group's growth strategy and delivering value to shareholders. We are well supported in this by an able and experienced senior management team which we have recently further strengthened with the appointment of a new Group Marketing Director, who is responsible for continuing to enhance sales leads and brand awareness as a combined Group, across all media.

Summary & Outlook

After an eventful and successful 12 months, the Group enters the current financial year with a strong balance sheet and a range of compelling opportunities for growth, which it is actively exploiting. The Entu brand has benefitted from the enhanced profile resulting from the Company's status as a publically quoted business, and we will continue to build on this with our cross-selling and organic growth initiatives together with our prime mover advantage in the energy generation and energy efficiency space, allied with our prudent acquisition strategy. These factors will underpin and drive profitable growth in the years to come. We are well positioned in our target markets, and we look forward to the future with confidence.

David M Forbes

Chairman

Chief Executive's Statement

Overview

This has been a significant year of development for the Group, culminating in our admission to AIM in October 2014. We have strengthened our leading positions in our target markets across the UK, buoyed by our strong brand reputation, our national coverage, and by steadily improving consumer demand.

Our primary strategy is to focus on driving organic growth from our diversified, fully integrated product portfolio, and also, over time, through the development of new product and service offerings, in particular, energy efficiency products and services, whilst continuing to strive for the highest levels of customer satisfaction across all the product range.

This growth will be enhanced by leveraging the unified, nation-wide Entu brand to drive cross-selling opportunities, as well as a greater proportion of sales through our website.

As a Group we have benefitted over the years from acquisitions and, to complement our organic growth, we are always exploring the potential to enhance our product offering through carefully targeted acquisitions which meet strict value enhancing criteria.

Results & Operational Review

For the year ended 31 October 2014, profit before tax increased to £9.0m (2013: £6.1m) on revenues of £119.0m (2013: £95.5m), giving adjusted earnings per share of 12.3p (2013: 7.8p). Net cash at year end was £5.8 m (2013: (1.8m)).

Home Improvement Products

Our home improvement products - doors, windows, conservatories and roofline - are sold through separate brands which are market leaders in their regions. The division has performed robustly as we have built on our market share, and as consumer confidence has increased and homeowners have decided to make replacements or improvements to their homes. In the year to 31 October 2014, the division reported sales of £84.3m (2013: £71.2m), representing 71.0% of Group sales (2013: 74.6 %). Net margin for the division was 4.5% (2013: 5.0%).

During the year, the Home Improvement Products segment was strengthened through the acquisition of the Europlas brand in December 2013.

Energy Generation and Energy Saving Products

Products sold include solar photovoltaic installations, air to air heat pumps, voltage regulators, remote heating controls and boilers. For the year ended 31 October 2014, sales were £23.9m (2013: £20.8m), representing 20.0% of Group sales (2013: 21.8%). This is a segment in which we see significant opportunities for growth with the increasing adoption of energy efficient products and technologies, as I outline further below.

Insulation Products

Demand for this relatively new product segment is driven by a growing recognition of the financial and environmental benefits of home insulation. Products in this segment include cavity wall insulation, external wall insulation and loft insulation. Sales in the year were £8.4m (2013: £1.2m) or 7.0% of Group sales (2013: 1.3%).

Repairs and Renewals Service Agreement ("RRSA") Programme

Our RRSA programme is an annual warranty plan offered to customers on the vast majority of our products. It represented £2.4m of Group sales during the year (2013: £2.2m), 2.0% of Group sales (2013: 2.3%). This gave the segment a gross margin of 78.7% in 2014 (2013: 82.5%), and at year end around 60% of our customers were members of the programme (2013: 60%).

National Installation

Our national installation service, Job Worth Doing ("JWD"), has comprehensive nationwide coverage, with 80% of the population living within one hour's drive of a JWD centre. It therefore unites all our brands and products, and facilitating cross-selling and in the roll-out of new products and services.

The Opportunity in Energy Efficiency

UK homes are becoming increasingly energy efficient. Households are now using around 20% less energy than they were in 2004 (Source: Delivering UK Energy Investment July 2014, www.gov.uk) and the growing recognition, from Government to household level, of the long term economic advantages of energy efficiency is continuing to drive adoption. For example, in the UK there are 24 million homes which would be suitable for loft insulation, 19 million suitable for cavity wall insulation and 27 million suitable for high efficiency boilers (Source: Delivering UK Energy Investment July 2014, www.gov.uk).

This is a major growth opportunity for Entu, and one of which we are well positioned to take advantage.

There is a gap in the market for a supplier which offers expert advice and guidance about energy efficiency, as well as practical installation services, to the consumer.

With our unique offering, we are well placed to establish a market leading presence in the home efficiency market, as part of our integrated portfolio of services. Entu already has an established foothold in this market through our energy efficiency brands Energy Hypermarket, Staybrite Solar and Zest, and we are actively looking to grow this.

Our aim now is to build by leveraging our knowledge of our customers' requirements from our 1 million strong Group database, engaging with our customers and showing them how they can realise tangible benefits from adopting energy saving products, and then offering affordable solutions tailored to them.

We are currently at an early stage of developing a technology that will allow our customers to monitor their energy usage online on a daily, weekly and monthly basis to understand where they are consuming most energy and how energy efficient products can save them money. From this we can offer energy assessments and bespoke energy efficient solutions.

We are also actively seeking to grow our existing product line, especially in energy efficient boilers and in solar photovoltaic installations, and to capitalise on emerging trends by entering into partnership agreements with other players in the sector, for example, in the "smart energy control" solutions. We look forward to providing updates on our progress in these initiatives in due course.

Financial Review

During the year, total Group revenues increased 24.6%, to £119m, compared to the prior year (2013: £95.5m), which was primarily driven by significant revenue increases in our Home Improvements and Insulation business segments. Within our Home Improvement segment, revenues increased to £84.3m compared to £71.2m in 2013, and within the Insulation segment revenues increased to £8.4m from £1.2m in 2013.

Profit before taxation and exceptional items during 2014 was £10.3m, a 69.5% increase from £6.1m in 2013. During the year, the Group saw a significant increase in profit before tax and exceptional items generated by its Energy Generation and Saving Segment from £0.2m in 2013 to £1.8m in 2014.

In 2014, the Group incurred exceptional costs of £1.32m, which related to costs associated with the listing on AIM.

Post exceptional items, the Group achieved profit before tax of £9.0m in 2014, compared to £6.1m in 2013, a 47.9% increase. Within this growth in profits, the Group also witnessed a significant shift in its profitability splits in 2014 compared to previous years, with a more equal distribution of profits among the different business segments, giving our earnings greater resilience.

During the year, the Group also successfully negotiated an increased credit facility with Barclays Bank, which will give the Group additional capacity for further acquisitions and developments

At 31 October 2014, the Group had Cash and cash equivalents of £5.8m compared to a £1.8m overdraft at 31 October 2013.

Adjusted earnings per share increased 57.7% for the year ended 31 October 2014 to 12.3p (2013: 7.8p) and basic earnings per share rose 32% in the year to 10.3p (2013: 7.8p).

Current Trading & Outlook

The current year has started well and trading is in line with our expectations.

We look forward to continued organic growth through greater customer engagement and cross-selling, as well as by taking advantage of the exciting opportunities in the energy efficiency market. In addition, and where appropriate, we will supplement our organic growth through the use of strategic acquisitions in target product segments.

With our market leading positions, diversified product portfolio and deep customer knowledge, we are able to look forward to the future with confidence, and the Board believes Entu is well positioned to deliver growth and shareholder value.

Ian Blackhurst

CEO

10 February 2015

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 October 2014

The notes below are an integral part of these consolidated financial statements.

There are no other items of comprehensive income for the year other than the profit/(loss) attributable to the equity holders.

CONSOLIDATED BALANCE SHEET

At 31 October 2014

The financial statements were approved by the Board of Directors and authorised for issue.

They were signed on its behalf by:

Darren Cornwall

10 February 2015

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 October 2014

Equity attributable to the equity holders

Share capital

The share capital account includes the nominal value for all shares issued and outstanding.

Retained earnings

The retained earnings reserve includes the accumulated profits and losses arising from the consolidated statement of comprehensive income and certain items from the statement of changes in equity attributable to equity shareholders net of distributions to shareholders.

CONSOLIDATED CASH FLOW STATEMENT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Accounting policies

General information

Entu (UK) plc ('the Company') and its subsidiaries' (together "the Group") principal activity during the period was the sale of replacement windows, double glazing, entrance doors, patio doors and exterior improvement products within the United Kingdom.

The Company is incorporated and domiciled in the UK. The Company's registered number is 08957339. The address of its registered office is 8 Bow Chambers, Tib Lane, Manchester, M2 4JB.

The Company is a public limited company and has its primary listing on the AIM division of the London Stock Exchange.

The Group consolidated financial statements were authorised for issue by the Board on 10 February 2015.

Basis of preparation

While the financial information included in this preliminary announcement has been computed in accordance with IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The accounting policies used are consistent with those in the Group's statutory financial statements for the year ended 31 October 2014 which have yet to be published. The key accounting policies applied by the Group have been set out below. The preliminary results for the year ended 31 October 2014 were approved by the Board of Directors on 10 February 2015.

The financial information set out in this preliminary announcement does not constitute the Group's statutory financial statements for the year ended 31 October 2014 but is derived from those financial statements which were approved by the Board of Directors on 10 February 2015. The auditors have reported on the Group's statutory financial statements and the report was unqualified and did not contain a statement under section 498 (2) or 498 (3) Companies Act 2006. The statutory financial statements for the year ended 31 October 2014 have not yet been delivered to the Registrar of Companies and will be delivered following the Company's Annual General Meeting.

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS as adopted by the EU), IFRS Interpretations Committee (IFRS IC) Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

The Group's deemed transition date to IFRS is 1 November 2012. The principles and requirements for first time adoption of IFRS are set out in IFRS 1. IFRS 1 allows certain exemptions in the application of particular standards to prior periods in order to assist companies with the transition process. The Group has not applied any of the optional exemptions under IFRS 1 other than in respect of IFRS 3 where acquisitions completed before the date of transitions have not been retrospectively adjusted. This is the first financial information prepared by the Group under IFRS. The Group has not previously prepared or reported any consolidated financial information in accordance with any other GAAP. Consequently, it is not possible to provide IFRS 1 reconciliations between financial information prepared under any previous GAAP and this consolidated financial information.

For the years ended 31 October 2012 and 31 October 2013 the Group existed as three separate Groups being HI Sales Limited, JWD Installations Limited and KBC Energy Limited. These three Groups operated under common management and were majority owned and controlled by Brian Kennedy.

On 7 July 2014 the Company acquired a 100 per cent interest in each of the Groups but control remained with the majority shareholder in the company at that time, Brian Kennedy. The transaction is a business combination under common control and is not within the scope of IFRS 3. It has therefore been accounted for as a capital reorganisation.

Predecessor accounting has therefore been applied by presenting the financial information of the combined businesses, which has resulted in the comparative financial information being prepared on a consistent consolidated basis.

The financial statements have been prepared in GBP, being the Groups presentational currency and have been presented in thousands.

The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

Basis of consolidation

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The Financial Statements of subsidiaries are generally included in the Group Financial Statements from the date that control commences until the date that control ceases.

Transactions, balances and unrealised gains on transactions between Group companies have been eliminated on consolidation. Unrealised gains have also been eliminated to the extent that they do not represent an impairment of a transferred asset. Subsidiaries' accounting policies have been changed where necessary to ensure consistency with the policies adopted by the Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Accounting policies continued

Adoption of new or amended standards and interpretations in the current year

In the current year, the following new or amended standards have been adopted.

IFRS 7 (amendment) "Financial instruments: disclosures" is effective for annual reporting periods beginning on or after 1 January 2013, and amends the disclosures required where certain items have been offset.

IFRS 13 "Fair value measurement" is effective for annual periods beginning on or after 1 January 2013. This standard applies to IFRSs that require or permit fair value measurements or disclosures and provides a single IFRS framework for measuring fair value and requires disclosures about fair value measurement.

IAS 19 (revised 2011) "Employee benefits" is effective for annual periods beginning on or after 1 January 2013. As the Company has no defined benefit pensions schemes the amendment to the standard has had no impact on the Group.

New or amended standard and interpretations in issue but not yet effective or EU endorsed

The following new standards, amendments to standards and interpretations that are expected to apply to the Group, which have not been applied in these financial statements, were in issue, but are not yet effective, or EU endorsed.

IFRS 9 "Financial Instruments" is effective for annual reporting periods commencing on or after 1 January 2018. The standard will eventually replace IAS 39.

IFRS 10 "Consolidated financial statements" is effective for annual reporting periods beginning on or after 1 January 2014. This standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within consolidated financial statements.

IFRS 11 "Joint arrangements" is effective for annual periods beginning on or after 1 January 2014. This standard provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. This is not expected to have a material impact.

IFRS 12 "Disclosure of interests in other entities" is effective for annual periods beginning on or after 1 January 2014. This standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles.

IFRS 15 "Revenue from contracts with customers" is to establish the principles that an entity shall apply to report about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. Application of the standard is mandatory for annual reporting periods starting from 1 January 2017 onwards.

IFRIC 21 "Levies", sets out the accounting for an obligation to pay levy that is not income tax. The interpretation addresses what the obligating event is that gives rise to pay a levy. The Company is not currently subject to significant levies so the impact on the Company is not material. Effective for annual periods beginning on or after 1 January 2014.

IAS 27 (revised) "Separate financial statements" is effective for annual periods beginning on or after 1 January 2014. This standard includes the provisions on separate financial statements that are left after the control provisions of IAS 27 have been included in the new IFRS 10.

IAS 28 (revised) "Investments in associates and joint ventures" is effective for annual periods beginning on or after 1 January 2014. This standard includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of IFRS 11.

IAS 32 "Offsetting financial assets and liabilities" is effective for annual periods beginning on or after 1 January 2014 and provides clarification on the application of offsetting rules.

The Group continues to assess the impact of adopting these new or amended standards and interpretations in future accounting periods.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Accounting policies continued

Going concern

The financial statements have been prepared on a going concern basis. For the purpose of considering going concern the board has considered a period of at least 12 months from the date of approving these financial statements. The principal risks to the company are set out in note 3 of these financial statements but it is felt that these do not pose a threat to the going concern status of the group going forward.

Revenue

Revenue from the sales of goods is recognised when the Group has transferred the significant risks and rewards of ownership to the buyer and it is probable that the Group will receive the previously agreed upon payment. These criteria are considered to be met when installation has been completed. The Group does not consider that it has any long term contracts as all jobs are usually completed in a short time frame. Revenue is recognised net of VAT and any sales discounts and rebates offered. Warranty sales are recognised at the point of sale which is upon the completion of installation as the contracts are non-cancellable following the initial 14 day cooling off period.

Provided the amount of revenue can be measured reliably and it is probable that the Group will receive any consideration, revenue for services is recognised in the period in which they are rendered.

Finance commission income

The Group recognises finance commissions receivable from finance providers upon receipt which occurs upon completion of the sale of finance to the end customer and so when the revenue is due to the Group. Income is recognised upon receipt with a provision put in place to estimate any potential claw backs of commission's receivable based upon past history of such claw backs. Finance commission income is recognised within revenue in the statement of comprehensive income.

Goodwill

Goodwill represents the excess of the cost of a business combination over the Group's interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued. Contingent consideration is included in cost at the acquisition date fair value and, in the case of contingent consideration classified as a financial liability, re-measured subsequently through profit or loss. Direct costs of acquisition are recognised immediately as an expense in profit or loss.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceeds the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.

Goodwill Impairment

For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in the profit or loss. An impairment loss recognised for goodwill is not reversed.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Accounting policies continued

Exceptional items

The Group adopts a columnar income statement format to highlight significant items within the Group results for the period. Such items are considered by the Directors to be exceptional in nature rather than being representative of the underlying trading of the Group, and in the current year include costs associated with the Group's initial public offering. The Directors apply judgement in assessing the particular items, which by virtue of their scale and nature should be disclosed in a separate column of the income statement and notes to the financial statements as 'Exceptional items'. The Directors believe that the separate disclosure of these items is relevant to an understanding of the Group's financial performance.

Business Combinations

The acquisition of subsidiaries is accounted for using the purchase method. The fair value of consideration of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 'Business combinations' are recognised at their fair values at the acquisition date. All acquisition costs are expensed as incurred as exceptional items.

Share capital

Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset.

The Group's ordinary shares are classified as equity instruments.

Dividends

Dividends are recognised when they become legally payable and are approved by shareholders. In the case of interim dividends to equity shareholders, this is when they are paid.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current and deferred tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that 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 difference arises from 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 profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Accounting policies continued

Taxation continued

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 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. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax liabilities on a net basis.

Property plant and equipment

All other assets are stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the item.

Depreciation is charged so as to write off the cost or valuation of assets, other than land, over their estimated useful lives, using the straight-line method, on the following basis:

Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if appropriate.

Gains or losses on disposal are included in the profit or loss for the year within admin costs.

Cash and cash equivalents

Cash and cash equivalents include cash in hand and balances with banks including outstanding bank overdrafts.

Financial Instruments

The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are recognised on the balance sheet at fair value when the Group becomes a party to the contractual provisions of the instrument.

Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables and is measured as the difference between carrying value and present value of estimated future cash flows. Subsequent recoveries of previously impaired trade receivables are recognised as a credit to profit as recorded.

Trade payables

Trade payables are not interest bearing and are stated at fair value and subsequently measured at amortised cost.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Accounting policies continued

Borrowings

Interest-bearing bank loans and overdrafts are recorded at fair value, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis through the income statement using the effective interest method and are added to the carrying amount of the instrument to the extent they are not settled in the period in which they arise.

Defined contribution schemes

Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to which they relate.

Leases

Payments made under operating leases are recognised in profit and loss on a straight-line basis over the term of the lease. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight-line basis.

Finance income and costs

Finance income and costs are recognised in the income statement in the period in which they are incurred.

Inventories

Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Weighted average cost is used to determine the cost of ordinarily interchangeable items.

Discontinued operations

A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operations.

Discontinued operations are presented in the combined statement of comprehensive income as a single line which comprises the post-tax profit or loss of the discontinued operation along with the post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on disposal of the assets or disposal groups constituting discontinued operations.

Prior periods are re-stated so that disclosures relate to all operations that have been discontinued by the end of the reporting period for the latest period presented.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision-maker (CODM), who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Board. 

Provisions

The Group has recognised provisions for liabilities of uncertain timing or amount including those for warranty claims. The provision is measured at the best estimate of the expenditure required to settle the obligation at the reporting date, discounted at a pre-tax rate reflecting current market assessments of the time value of money and risks specific to the liability.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. Critical accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Critical accounting judgements and key sources of estimation uncertainty

(a) Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires an entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Any change in estimates could result in an adjustment to recorded amounts. More information can be found in note 13.

(b) Warranty provision

The Group have in place a warranty provision to cover the cost of future warranty work on certain products which offer a ten year warranty. The estimation of this provision involves the estimation of the net present value of these future costs. The costs are estimated based upon the applicable sales made in the previous ten years including those made before the acquisition of any companies acquired with existing warranties and the average number and value of warranty claims which have been made against these sales. A discount rate of 10% has been used to determine the net present value of these costs. Any change in the method of estimation of costs or the discount rate could lead to an adjustment to the warranty provision.

3. Financial instruments - Risk Management

General objectives, policies and processes

The directors of the Group's parent company Entu (UK) plc have overall responsibility for the determination of the Group's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's finance function. Entu (UK) only became the ultimate parent company of the group on 7 July 2014 but the key directors of the group have remained unchanged throughout the period.

The overall objective of the directors is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

The Group is exposed through its operations to the following financial risks:

· Credit risk

· Liquidity risk

· Capital risk

· Fair value and cash flow interest rate risk

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the method used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

Financial instruments include trade receivables, trade payables and cash and cash equivalents which are treated as loans and receivables or financial liabilities at amortised cost for IFRS 7 classification purposes.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. Financial instruments - Risk Management continued

Credit risk

Credit risk is the risk that financial loss arises from the failure of a customer or counterparty to meet its obligations under a contract. The Group has dedicated standards, policies and procedures to control and monitor all such risks. Although the Group is potentially exposed to credit loss in the event of non-performance by counterparties, such credit risk is controlled through credit rating and equity price reviews of the counterparties and by limiting the total amount of exposure to any one party.

An analysis of the international long-term credit ratings of counterparties where cash and cash equivalents are held is as follows:

Liquidity risk

Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group monitors its risk to a shortage of funds through regular cash management and forecasting. The Group's objective is to maintain a balance between continuity of funds and flexibility to invest as necessary.

Capital risk management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios. 

The Group manages its capital structure and makes adjustments to it to suit economic conditions. The Group regards called-up share capital and retained earnings as its capital as there is no long term debt capital.

The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Group does not seek to maintain any particular capital ratio but will consider investment opportunities on their merits and fund them in the most effective manner.

Fair value and cash flow interest rate risk

The Group has had no outstanding loan balances throughout the period other than short term overdrafts. Therefore a change in LIBOR of 1% would change the Group's profit before tax by an insignificant amount.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. Financial instruments - Risk Management continued

Financial instruments by category

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. Financial instruments - Risk Management continued

4. Segmental analysis

The Chief Operating Decision-Maker (CODM) has been identified as the Executive Board which comprises the two Executive Directors.

The CODM reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports which include an allocation of central costs as appropriate.

The CODM considers the business from an operating perspective, with the Home Improvements, Energy Generation and Saving, Repair and Renewal Service Agreements and Insulation divisions being the reporting segments. The CODM assesses the performance based on operating profit before any exceptional items. Other information provided to the CODM, except as noted below, is measured in a manner consistent with that of the financial statements.

All revenue, profit and assets of the Group and all segments arise in the Companies county of domicile, being the United Kingdom.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4. Segmental analysis continued

Business segments

2014

All revenue relates to the sale of goods.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

5. Exceptional items

The Group has incurred £1.3m of exceptional costs related to its Initial Public Offering fees that were incurred as part of the listing on AIM.

6. Profit/(loss) for the year from continuing operations - analysis by nature

Profit for the year has been arrived at after charging/(crediting):

A more detailed analysis of auditors' remuneration is provided below:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

7. Directors and employees

Employee costs

The average monthly number of employees (including Executive Directors) was as follows:

The costs incurred in respect of the above were as follows:

Directors' remuneration

The costs incurred in respect of the Directors, who are regarded as the key management personnel, were as follows:

For the year ended 31 October 2014 the highest paid Director received total remuneration of £ 385,000 (2013: £343,000) and pension contributions of £1,200 (2013: £1,200).

8. Finance income and costs

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

9. Taxation

UK corporation tax is calculated at 21% (2013: 23.4%) of the estimated assessable profit for the year.

The tax charge for the year can be reconciled to the profit per the consolidated statement of comprehensive income as follows:

Factors that may affect future tax charges

During the period, the relevant deferred tax balances have been re-measured as a result of reductions in the UK main rate of corporation tax to 21% from 1 April 2014 and 20% from 1 April 2015, changes which were substantially enacted on 2 July 2013.No further changes in the UK main rate of corporation tax have been announced or enacted and there are no other known factors expected to affect the group's corporation tax charge in future periods.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

10. Discontinued Operations

During the year ended 31 October 2012, the Group discontinued an operation which was considered to represent a separate major line of business. This was therefore classified as a discontinued operation in the consolidated statement of comprehensive income. The operation was ended with the assets used in the operation retained and re-used for other purposes. For the year ended 31 October 2013 final costs of exiting the business were incurred and no further costs were incurred in the year ended 31 October 2014. The results of the discontinued operation are shown below:

Results from discontinued operations

Statement of cashflows

The statement of cashflows includes the following amounts relating to discontinued operations:

11. Dividends

These dividends were paid out of subsidiary companies, Penicuik Home Improvements Limited in 2012 and Job Worth Doing Limited in 2013 but have not been eliminated from the consolidated financial information as they were paid outside of the Group. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

12. Earnings per share

Basic earnings per share and diluted earnings per share are calculated by dividing profit for the period attributable to equity holders by the weighted average number of shares in issue.

The weighted average number of shares used to calculate earnings per share has been set consistent with the number of ordinary shares in issue as at 31 October 2014 and this has been applied consistently for all periods reported within these financial statements. As a result of the formation of the Group and the Company's capital structure the application of the closing number of ordinary shares has been deemed to give the most relevant and comparable calculation of earnings per share in the financial years reported.

Deferred shares have been excluded from the basic and diluted number of shares as deferred shares carry no voting right and no rights to any distributions to be made by the Group.

No dilutive shares have been identified as all share option issued by the Group were issued on the year end date or post year end and as such have no dilutive impact for the years ended 31 October 2014 or 31 October 2013.

Adjusted basic and diluted earnings per share figures are calculated by dividing adjusted profit after tax for the year by the weighted average number of shares in issue (as above). The adjusted profit after tax for the year is as follows:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

13. Goodwill

The goodwill has arisen as follows:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

13. Goodwill continued

Impairment testing of Goodwill

The allocation of goodwill to Cash-Generating Units (CGU) is as follows:

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets, covering three years that are approved by the Board. Income and costs within the budget are derived on a detailed, 'bottom up' basis - all income streams and cost lines are considered and appropriate growth, or decline, rates are assumed for each based on historical experience, all of which are then reviewed and challenged, firstly by senior management and ultimately by the Board. Income and cost growth forecasts are risk adjusted to reflect the specific risks facing each CGU and take account of the markets in which they operate. Cash flows beyond the budgeted period are extrapolated using the estimated growth rate stated below. The growth rate does not exceed the long-term average growth rate for the markets in which the CGU operates. Further, it is assumed that there are no material adverse changes in legislation that would affect the forecast cashflows.

The key assumptions used in the value-in-use calculations for each CGU are as follows:

Growth rate (after budget period): 2.5%

Market risk premium: 5.75%

The pre-tax discount rate used within the recoverable amount calculations was 10.0% (2013: 10.0%) and is based upon the weighted average cost of capital reflecting the specific principal risks and uncertainties applicable to each CGU. The discount rate takes into account, amongst other things, the risk free rate of return, the cost of equity and the market risk premium (which is used in deriving the cost of equity). The same discount rate has been used for each CGU as the principal risks and uncertainties associated with the Group, as highlighted in note 3 of this report as being those risks with the highest likelihood or impact, would also impact each CGU in a similar manner. The Board acknowledge that there are additional factors that could impact the risk profile of each CGU given the difference in operations, customer base and trading performance over recent years. These additional factors were considered by way of a sensitivity analysis performed as part of the annual impairment tests. A sensitivity analysis has been performed around the base assumptions with the conclusion that no reasonable possible changes in key assumptions would cause the recoverable amount of the goodwill and other intangible assets to be less than the carrying value.

Having completed the 2014 annual impairment review, the Group has recognised no impairment (2013: £nil). The level of any impairment recognised is predominantly dependent upon judgements used in arriving at future growth rates and the discount rate applied to cash flow projections. Key drivers to future growth rates are dependent on the Group's ability to maintain and grow income streams whilst effectively managing operating costs. The level of headroom may change if different growth rate assumptions or a different pre-tax discount rate were used in the cash flow projections.

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

14. Property, plant and equipment

At 31 October 2014, the Group had entered into commitments for the acquisition of property, plant and equipment amounting to £Nil (2013: £Nil).

15. Inventories

During the year ended 31 October 2014 £Nil (2013: £Nil) was charged to the income statement for slow moving and obsolete inventories. The cost of the inventories recognised as an expense and included in cost of sales amounts to £33.1m (2013: £28.1m).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

16. Trade and other receivables

The fair value of trade and other receivables has been considered to be consistent with the book value given their short term nature.

Movements in the Group provision for impairment of trade receivables are as follows:

Provisions are estimated by management based on past default experience and their assessment of the current economic environment. The creation and release of provisions for receivables is charged/(credited) to administrative expenses in the statement of comprehensive income.

The credit risk of customers is assessed at a subsidiary and Group level, taking into account their financial positions, past experiences and other relevant factors. Individual customer credit limits are imposed based on these factors.

No other receivables have been deemed to be impaired.

The following table shows trade receivables at the reporting date which are overdue and for which no allowance for impairment has been recognised:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

17. Cash and cash equivalents

Cash and cash equivalents represent cash at bank and in hand and bank overdrafts. Bank overdrafts have been offset against cash at bank and in hand as the company has an enforceable right to offset and settle bank overdrafts net with cash at bank and in hand. As at 31 October 2014 bank overdrafts offset against cash at bank and in hand totalled £0.5m. No offsetting of cash at bank and in hand and bank overdrafts has been presented in prior years as no such right to offset existed.

18. Trade and other payables

Trade and other payables comprise amounts outstanding for trade purchases and on-going costs. The Directors consider the carrying amount of trade and other payables approximates their fair value due to their short term nature.

19. Borrowings

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

20. Deferred tax

Certain deferred tax assets and liabilities have been offset in accordance with IAS 12 'Income taxes'. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

There are no amounts on which a deferred tax asset is not recognised.

21. Provisions

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

21. Provisions continued

Warranty provision

Certain Group companies have in place a warranty provision to cover for the cost of future warranty work on certain products which offer a ten year warranty against any installation faults on products sold and installed by the Group, as such a provision is estimated to cover the cost of any future maintenance work on such goods. It is expected that the expenditure will be incurred equally over the ten year life of the warranty. Expected future costs are discounted at a discount rate of 10%.

In 2013 the underlying business circumstances relating to the overall warranty provision changed, which resulted in the large reduction in the provision balance shown above. Previously the warranty provision covered all costs associated with the cost of meeting any claims as related companies were involved in extruding the pvc that forms the main material component of the window and conservatory base product and also fabricated some of these finished products. These material and fabrication costs are now met by external suppliers to the Group under supplier agreements resulting in a lower warranty provision being required.

Finance clawback provision

Group members offer a financing agreement to customers upon the purchase of certain products. The financing is provided by a third party from whom the group receives a commission. This may be clawed back within the first 6 months of the agreement due to any issues that may arise due to the financing. Given this the provision has been classed as current within the financial statements.

22. Retirement benefits

The group operates a defined contribution pension scheme. The assets of the scheme are administered by trustees in funds independent from those of the company.

The total contributions paid in the year amounted to £232,000 (2013: £132,000) and at the balance sheet date pension contributions of £Nil (2013: £9,034) were outstanding.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

23. Share capital

The company was incorporated on 25 March 2014 at which time 100 ordinary shares of £0.01 were issued to the shareholders of the company which were settled in full in cash.

On 7 July 2014 a further 10,020 £0.01 ordinary shares were issued by the Company. Consideration for the issue of these shares was in the form of the issued share capital of JWD Installations Limited, HI Sales Limited and KBC Energy Limited, which were entities controlled by common shareholders.

On 8 October 2014 a further 4,989,880 £0.01 ordinary shares were issued by the Company which were settled in full in cash.

On 8 October 2014 the Company's issued share capital of 5,000,000 £0.01 ordinary shares were subdivided into 100,000,000 £0.0005 ordinary shares.

On 8 October 2014 30,000,000 £0.0005 ordinary shares issued by the company were converted into deferred shares in the company.

On 8 October 2014 4,400,000 £0.0005 ordinary shares issued by the company were converted into deferred shares in the company.

Ordinary shares give holders the right to vote and participate in general meetings of the Group as well as the rights over distributions and the assets of the Group. All ordinary shareholders rank pari-passu.Deferred share carry no voting rights and no rights to distributions and the assets of the Group.

24. Retained earnings

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

25. Reconciliation of profit before tax to cash generated from operations

26. Operating lease commitments

At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

27. Business Combinations

On 20 December 2013, Europlas Limited, a member of the Group acquired the trade and assets of Europlas ("Europlas"), a division of Specialist Building Products Limited with the full consideration being settled in cash.

Europlas's principal activity is the retail and installation of home improvement products.

The amount of identifiable net assets assumed at the acquisition date is shown below:

Goodwill acquired represents expected synergies to be achieved through combining Europlas with the Group and the value of employees acquired with the business. The goodwill acquired is expected to be deductible for tax purposes.The fair value of trade and other receivables is £156,000 and includes trade receivables with a fair value of £156,000. The gross contractual amount for trade receivables due is equal to their fair value.The revenue included in the consolidated statement of comprehensive income since 20 December 2013 contributed by Europlas Limited was £3,500,000. Europlas Limited also contributed profit of £485,000 over the same period.

28. Related party transactions

During the year, group companies entered into the following transactions with related parties who are not members of the group:

All of the below companies are related due to them being under common control or significant influence throughout the period.