Source - RNS
RNS Number : 4946K
The Mission Marketing Group PLC
22 September 2016
 

The Mission Marketing Group plc

Interim results for the six months to 30 June 2016

 

 

The Mission Marketing Group plc ("TMMG" or "the missiontm"), the marketing communications and advertising group, sets out its unaudited interim results for the six months ended 30 June 2016.

 

Trading

·      Some great new business wins in the period, including Fuji Xerox, Golden Wonder, Greene King, Halfords, Mondelez, O2 and Sky Betting & Gaming

·      Good progress made upscaling people, systems and technology

·      Recent acquisitions trading well and global capabilities strengthened

·      Expect to have a strong second-half bias as in previous years and remain confident for full year outlook

 

Income statement

·      Revenue up 10% to £32.4m (2015: £29.5m)

·      Headline profit before tax up 10% to £2.6m (2015: £2.3m*)

·      Reported profit before tax up 14% to £2.0m (2015: £1.7m*)

·      Headline diluted EPS up 15% to 2.33 pence (2015: 2.03 pence*)

 

Balance sheet and cash flow

·      Cash inflows from operating activities of £4.8m (2015: £2.3m)

·      Acquisition obligations of £3.0m settled since year-end

·      Period-end acquisition obligations reduced to £5.4m, of which only £2.5m due within one year

·      Net bank debt reduced by £1.5m in the six months to £9.4m

·      Debt levels continue to reduce and are comfortably within the Board's limits

 

Dividend

·      Interim dividend increased by 67% to 0.5p (2015: 0.3p)

·      Payable on 2 December 2016 to shareholders on the register at 4 November 2016

 

*restated as explained in Note 1

 

David Morgan, Chairman, commented: "The first half of 2016 went very well for us as we continue to build on our profitable platform. We look forward to a positive second half and remain confident in the outturn for the full year, continuing the consistent growth achieved over recent years. To reflect our confidence in the business, the Board has decided to substantially increase the dividend."

 

An interview with David Morgan, Chairman, can be viewed from 9.30am today at:

http://www.themission.co.uk/investor-centre/reports

 

Enquiries:                                                                                                

  David Morgan, Executive Chairman

  Peter Fitzwilliam, Finance Director

  The Mission Marketing Group plc

 

 

020 7462 1415

 

Geoff Nash/James Thompson (Corporate Finance)

Stephen Norcross (Corporate Broking)


  finnCap Limited

020 7220 0500

 

the missiontm is a network of entrepreneurial marketing communications Agencies employing over 950 people in the UK, Asia and San Francisco. The Group comprises a complementary mix of integrated generalists, specialists in specific marketing/communications activities and specialists in particular market sectors, all providing award-winning solutions to national and international Clients. 

 

www.themission.co.uk

 

Chairman's Statement

 

A GAME OF TWO HALVES. BOTH LOOKING GOOD

 

I am delighted to report that the first half of 2016 went very well for us and we continue to progress as we had hoped despite the uncertainties that surrounded the UK market.

 

It is difficult to assess the actual effect of Brexit on us and, whilst there have been the occasional budget-reducing decisions, our Clients are maintaining investment in their businesses and as a result we remain confident that our Agencies will continue to grow alongside them through the remainder of 2016.

 

Across our Group we have focused on upscaling our Agencies where increased creativity is being supported by technology-enabled systems that bring a leading marketing edge to our Clients. Our core businesses have continued to progress and our recent acquisitions, Chapter and Echo, have repaid our confidence in them. In-fills in our Mongoose Sports Marketing Agency are helping that business develop and a move into the Sales Promotion arena will be underway shortly.  We continue to build.

 

We also continue to offer best-in-class teams, drawn from across a number of Agencies, to support those Clients that require access to our breadth of service and depth of talent. We have strengthened our position in Asia and the USA by adding new resources into our Bray Leino and April Six Agencies there. Earlier this year we launched our April Six Proof PR Agency in San Francisco and early indications are positive.

 

Our Solaris Healthcare Agency recently finalised agreements with Vivactis and Precision Effect to enable them to operate on a more global scale, thereby providing their Pharma Clients with seamless brand activities wherever they operate.

 

New business wins have continued apace with assignments from the likes of Fuji Xerox, Golden Wonder, Greene King, Halfords, Mondelez, O2 and Sky Betting & Gaming, whilst bolstering our businesses with further development of our Pathfindr and Ethology products into Rolls Royce and Aviva.

 

In other news, Mike Smith joined our Automotive Agency, RLA as CEO bringing with him a wealth of expertise of the market and we welcome him on board. Greg Delaney has joined the Bray Leino Board as a Non Executive to bring wise counsel on creative matters, and Rob Grahamslaw has been appointed to run our Global Events Agency, joining us from BP.

 

Our debt continues to reduce and our profits continue to increase. We believe that through new initiatives, very talented management teams that utilise original techniques, continued investment in our Agencies and our entrepreneurial approach, we are well set and anything is possible.

 

As a management team, we are very much focused on building on our solid platform.  We are looking to create ever greater collaboration across the Group which will help drive organic growth and with it increased profitability and cashflow. Margins remain a key focus. Over the last couple of years we have successfully expanded our footprint while further adding to our expertise and reach.  We will continue to look for accretive acquisitions that add to our capabilities and enhance our Client offering.  Whilst we have a significant pipeline of opportunities, we will focus on those with the potential to deliver greatest shareholder value.

 

 

Trading results

 

Turnover ("billings") for the six months ended 30 June 2016 increased by 11% to £74.2m (2015: £66.6m). Billings include pass-through costs (e.g. TV companies' charges for buying air-time) and thus the Board does not consider turnover to be a key performance measure. Instead, the Board views operating income (turnover less third party costs) as a more meaningful measure of Agency activity levels.

 

Operating income ("revenue") increased 10% in the six months to £32.4m (2015: £29.5m). Whilst organic growth rates remain modest in a very competitive market, there have been some high quality new business wins and the acquisitions made in 2015 have made very positive contributions.

 

Headline operating profits increased by 10%, in line with revenue growth, to £2.8m (2015: £2.6m). In a market which continues to apply relentless downward pressure on margins, we are pleased to have maintained margins in the first half at the levels achieved in the equivalent period last year. As previously reported, our Clients' spending cycles tend to result in a second half bias in our financial results, including higher profit margins, and we expect this pattern to be repeated in 2016.

 

Adjustments to headline profits in 2016 totalled £0.6m (2015: £0.6m), explained further in Note 3. After these adjustments, reported operating profits were £2.2m (2015: £2.0m).

 

After unchanged financing costs of £0.2m, headline profit before tax increased by 10% to £2.6m (2015: £2.3m), and reported profit before tax increased by 14% to £2.0m (2015: £1.7m).

 

The Group estimates an effective tax rate on headline profits before tax of 22% (2015: 24%), resulting in a 13% increase in headline earnings of £2.0m for the six months (2015: £1.8m), and reported profit after tax of £1.5m (2015: £1.4m). Fully diluted headline EPS increased 15% to 2.33 pence (2015: 2.03 pence). 

 

Balance sheet, cash flow and dividend

 

Net cash inflows from operating activities were £4.8m in the six months ended June 2016 (2015: £2.3m). Of particular note were working capital inflows of £2.6m compared with £0.4m in the prior period. These strong operating cash flows funded the cash settlement of acquisition obligations totalling £2.7m and also a £1.5m reduction in net debt to £9.4m. At 30 June 2016, the Group had £13.1m of committed facilities and an additional overdraft facility of £3m, providing comfortable headroom to accommodate the normal phasing of working capital requirements which tends to result in an increase in net debt in the second half of the year.

 

The balance sheet has again strengthened during the period. Bank debt continued to fall and is at a comfortable level in the context of our strong cash generation. In addition, acquisition obligations reduced from £8.2m at year-end to £5.4m, of which only £2.5m falls due within twelve months and, of this, the large majority does not fall due until 2017. To achieve these earn-outs, the acquired Agencies would need to perform very strongly, which would generate much of the cash required to meet these obligations.

 

The Employee Benefit Trust continued to make periodic share purchases when appropriate and currently holds 1,334,430 Ordinary shares.

 

The Mission has achieved a great deal over the last six years, with EBITDA, profitability and cashflow all growing strongly since we restructured the Group. The business has added both scale and breadth and I am pleased to report that your Group is in good health. To reflect the increased confidence in the business and its continued growth, the Board has decided to substantially increase the dividend. The Group will continue to follow a progressive dividend policy, whilst being mindful of an appropriate level of dividend cover and considering other uses of cash, such as accretive acquisitions. Accordingly, the Directors have declared an interim dividend of 0.5p, representing a 67% increase over last year, payable on 2 December 2016 to shareholders on the register at 4 November 2016. The ex-dividend date is 3 November 2016.

 

Current trading and outlook

 

Without wishing to be seen as a trumbinich, I am pleased to report that we are where we forecasted we would be at half time. We look forward to a positive second half and remain confident in the outturn for the full year, continuing the consistent growth achieved over recent years.

 

 

 

David Morgan

Chairman

The Mission Marketing Group plc

 

 

Condensed Consolidated Income Statement for the 6 months ended 30 June 2016



 

6 months to

 

6 months to

 

Year ended



30 June 2016

30 June 2015

31 December 2015



Unaudited

Unaudited

Audited


Note

£'000

£'000

£'000






TURNOVER

2

74,162

66,643

132,246






Cost of sales


(41,797)

(37,123)

(71,209)

 

OPERATING INCOME

2

 

32,365

 

29,520

 

61,037






Headline operating expenses


(29,537)

(26,945)

(54,107)

HEADLINE OPERATING PROFIT

2

 

2,828

 

2,575

 

6,930






Exceptional items

4

-

(634)

(873)

Acquisition adjustments

5

(386)

192

(108)

Start-up costs


(212)

(154)

(343)

 

OPERATING PROFIT


 

2,230

 

1,979

5,606






Share of results of associates


(9)

-

-

 

PROFIT BEFORE INTEREST AND TAXATION


 

2,221

 

1,979

5,606






Net finance costs

6

(243)

(242)

(469)

 

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION


 

 

1,978

 

 

1,737

 

 

5,137






Taxation

7

(518)

(382)

(1,035)

 

PROFIT FOR THE PERIOD


 

1,460

 

1,355

 

4,102






Attributable to:





Equity holders of the parent


1,440

1,323

4,011

Non-controlling interests


20

32

91



1,460

1,355

4,102






Basic earnings per share (pence)

8

1.74

1.60

4.86

Diluted earnings per share (pence)

8

1.68

1.54

4.68

Headline basic earnings per share (pence)

8

 

2.41

 

2.11

 

6.14

Headline diluted earnings per share (pence)

 

8

 

2.33

 

2.03

 

5.91

 

 

Condensed Consolidated Statement of Comprehensive Income for the 6 months ended 30 June 2016



 

6 months to

 

6 months to

 

Year ended



30 June 2016

30 June 2015

31 December 2015



Unaudited

Unaudited

Audited



£'000

£'000

£'000






PROFIT FOR THE PERIOD


1,460

1,355

4,102






Other comprehensive income - items that may be reclassified separately to profit or loss:





Exchange differences on translation of foreign operations


(2)

4

21

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD


 

1,458

 

1,359

 

4,123






Attributable to:





Equity holders of the parent


1,435

1,326

4,032

Non-controlling interests


23

33

91



1,458

1,359

4,123

 

 

 

Condensed Consolidated Balance Sheet as at 30 June 2016

 



As at  

As at  

As at



30 June 2016

30 June 2015

31 December 2015



Unaudited

Unaudited

Audited


Note

£'000

£'000

£'000

FIXED ASSETS





Intangible assets

9

81,956

77,423

82,102

Property, plant and equipment


4,384

4,528

4,526

Interests in joint ventures


7

4

7

Investments in associates


341

-

350

Deferred tax assets


45

68

146



86,733

82,023

87,131

CURRENT ASSETS





Stock and work in progress


482

355

461

Trade and other receivables


36,268

30,844

31,347

Cash and short term deposits


3,610

2,524

1,784



40,360

33,723

33,592

CURRENT LIABILITIES





Trade and other payables


(32,374)

(27,432)

(24,865)

Corporation tax payable


(580)

(1,187)

(1,064)

Bank loans

10

(1,750)

(1,500)

(1,500)

Acquisition obligations

11

(2,528)

(2,095)

(3,203)



(37,232)

(32,214)

(30,632)

NET CURRENT ASSETS


3,128

1,509

2,960

TOTAL ASSETS LESS CURRENT LIABILITIES


89,861

90,091

 

NON CURRENT LIABILITIES


 

 

 

 


Bank loans

10

(11,242)

(8,931)

(11,210)

Other long term loans


(76)

-

-

Obligations under finance leases


(257)

(340)

(298)

Acquisition obligations

11

(2,928)

(2,400)

(4,954)

Deferred tax liabilities


(264)

(27)

(264)



(14,767)

(11,698)

(16,726)

NET ASSETS


75,094

71,834

73,365






CAPITAL AND RESERVES





Called up share capital


8,412

8,361

8,361

Share premium account


42,431

42,268

42,268

Own shares


(548)

(359)

(455)

Share option reserve


412

370

298

Foreign currency translation reserve


46

33

51

Retained earnings


23,890

20,791

22,414

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT


 

74,643

 

71,464

 

72,937

Non controlling interests


451

370

428

TOTAL EQUITY


75,094

71,834

73,365

 

Condensed Consolidated Cash Flow Statement for the 6 months ended 30 June 2016


 

6 months to

 

6 months to

 

Year ended


30 June 2016

30 June 2015

31 December 2015


Unaudited

Unaudited

Audited


£'000

£'000

£'000





 

Operating profit

2,230

1,979

5,606

 

Depreciation and amortisation charges

1,030

985

2,122

 

Movements in the fair value of contingent consideration

 

(15)

 

(490)

 

(618)

 

(Profit) / loss on disposal of property, plant and equipment

 

(12)

 

2

 

6

 

Non cash charge for share options and shares awarded

 

118

 

106

 

37

 

Increase in receivables

(4,746)

(4,839)

(3,963)

 

(Increase) / decrease in stock and work in progress

 

(21)

 

6

 

(94)

 

Increase in payables

7,334

5,251

1,256

 

OPERATING CASH FLOW

5,918

3,000

4,352

 

Net finance costs

(201)

(498)

(711)

 

Tax paid

(901)

(155)

(1,233)

 

Net cash inflow from operating activities

4,816

2,347

2,408

 





 

INVESTING ACTIVITIES




 

Proceeds on disposal of property, plant and equipment

 

77

 

6

 

74

 

Purchase of property, plant and equipment

(613)

(449)

(1,295)

 

Acquisition of subsidiaries and joint ventures

(325)

(258)

(2,086)

 

Payment of obligations relating to acquisitions made in prior periods

 

(2,382)

 

(448)

(871)

 

Cash acquired with subsidiaries

147

253

1,431

 

Net cash outflow from investing activities

(3,096)

(896)

(2,747)

 





 

FINANCING ACTIVITIES




 

Dividends paid

-

-

(948)

 

Movement in HP creditor and finance leases

(46)

(4)

(57)

 

Redraw / (repayment) of long term bank loans

250

(375)

1,875

 

Proceeds from other long term loans

76

-

-

 

Purchase of own shares held in EBT

(172)

(101)

(317)

 

Net cash inflow / (outflow) from financing activities

 

108

 

(480)

 

553

 

Increase in cash and cash equivalents

 

1,828

 

971

 

214

 

Exchange differences on translation of foreign subsidiaries

 

(2)

 

4

 

21

 

Cash and cash equivalents at beginning of period

 

1,784

 

1,549

 

1,549

 

Cash and cash equivalents at end of period

3,610

2,524

1,784

 

 

Condensed Consolidated Statement of Changes in Equity for the 6 months ended 30 June 2016

 


 

 

 

Share

capital

£'000

 

 

 

Share premium

£'000

 

 

 

Own shares

£'000

 

 

Share option reserve

£'000

 

Foreign currency translation reserve

£'000

 

 

 

Retained earnings

£'000

Total attributable to equity holders of parent

£'000

 

 

Non-controlling interest

£'000

 

 

 

Total equity

£'000

 

 










At 1 January 2015

8,340

42,203

(260)

264

30

19,470

70,047

337

70,384











Profit for the period

-

-

-

-

-

1,323

1,323

32

1,355

Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

-

 

3

 

-

 

3

 

1

 

4

Total comprehensive income for the period

 

-

 

-

 

-

 

-

 

3

 

1,323

 

1,326

 

33

 

1,359











New shares issued

21

65

-

-

-

-

86

-

86

Credit for share option scheme

-

-

-

106

-

-

106

-

106

Own shares purchased by EBT

-

-

(101)

-

-

-

(101)

-

(101)

Shares awarded from own shares

-

-

2

-

-

(2)

-

-

-

At 30 June 2015

8,361

42,268

(359)

370

33

20,791

71,464

370

71,834

Profit for the period

-

-

-

-

-

2,688

2,688

59

2,747

Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

-

 

18

 

-

 

18

 

(1)

 

17

Total comprehensive income for the period

 

-

 

-

 

-

 

-

 

18

 

2,688

 

2,706

 

58

 

2,764

Debit for share option scheme

-

-

-

(72)

-

-

(72)

-

(72)

Own shares purchased by EBT

-

-

(216)

-

-

-

(216)

-

(216)

Shares awarded from own shares

-

-

120

-

-

(117)

3

-

3

Dividend paid

-

-

-

-

-

(948)

(948)

-

(948)

At 31 December 2015

8,361

42,268

(455)

298

51

22,414

72,937

428

73,365

Profit for the period

-

-

-

-

-

1,440

1,440

20

1,460

Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

-

 

(5)

 

-

 

(5)

 

3

 

(2)

Total comprehensive income for the period

 

-

 

-

 

-

 

-

 

(5)

 

1,440

 

1,435

 

23

 

1,458











New shares issued

51

163

-

-

-

-

214

-

214

Credit for share option scheme

-

-

-

114

-

-

114

-

114

Own shares purchased by EBT

-

-

(172)

-

-

-

(172)

-

(172)

Shares awarded from own shares

-

-

79

-

-

36

115

-

115

At 30 June 2016

8,412

42,431

(548)

412

46

23,890

74,643

451

75,094

 

 

 

Notes to the unaudited Interim Report for the six months ended 30 June 2016

 

 

1.   Accounting Policies

 

Basis of preparation

 

The condensed consolidated interim financial statements for the six months ended 30 June 2016 have been prepared in accordance with the IAS 34 "Interim Financial Reporting" and the Group's accounting policies.

 

The Group's accounting policies are in accordance with International Financial Reporting Standards as adopted by the European Union and are set out in the Group's Annual Report and Accounts 2015 on pages 42-44. These are consistent with the accounting policies which the Group expects to adopt in its 2016 Annual Report. The Group has not early-adopted any Standard, Interpretation or Amendment that has been issued but is not yet effective.

 

The information relating to the six months ended 30 June 2016 and 30 June 2015 is unaudited and does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006. The comparative figures for the year ended 31 December 2015 have been extracted from the Group's Annual Report and Accounts 2015, on which the auditors gave an unqualified opinion and did not include a statement under section 498 (2) or (3) of the Companies Act 2006. The Group Annual Report and Accounts for the year ended 31 December 2015 have been filed with the Registrar of Companies.

 

In the Company's 2015 Annual Report and Accounts, start-up costs were excluded from the calculation of headline profits and, in presenting the results for the six months ended 30 June 2016, comparatives for the equivalent six month period in 2015 have been restated accordingly.

 

Going concern

 

The Directors have considered the financial projections of the Group, including cash flow forecasts, the availability of committed bank facilities and the headroom against covenant tests for the coming 12 months. They are satisfied that the Group has adequate resources for the foreseeable future and that it is appropriate to continue to adopt the going concern basis in preparing these interim financial statements.

 

Accounting estimates and judgements

 

The Group makes estimates and judgements concerning the future and the resulting estimates may, by definition, vary from the actual results. The Directors considered the critical accounting estimates and judgements used in the financial statements and concluded that the main areas of judgement are:

 

·      Potential impairment of goodwill;

·      Contingent deferred payments in respect of acquisitions;

·      Revenue recognition policies in respect of contracts which straddle the period end; and

·      Valuation of intangible assets on acquisitions.

 

These estimates are based on historical experience and various other assumptions that management and the Board of Directors believe are reasonable under the circumstances.

 

2.   Segmental Information

 

Business segmentation

 

For management purposes the Group had thirteen operating units during the period, each of which carries out a range of activities. These activities have been divided into four business and operating segments as defined by IFRS 8 which form the basis of the Group's primary reporting segments, namely: Branding, Advertising and Digital; Media; Public Relations; and Events and Learning.  

 


6 months to

6 months to

Year ended


30 June

2016

30 June

2015

31 December

 2015


Unaudited

Unaudited

Audited


£'000

£'000

£'000







Turnover


Business segment




Branding, Advertising & Digital

40,096

36,032

71,728

Media

25,358

23,570

45,732

Public Relations

4,155

3,830

7,640

Events and Learning

4,553

3,211

7,146


74,162

66,643

132,246

 



Operating income


Business segment




Branding, Advertising & Digital

25,394

23,179

47,715

Media

2,209

1,996

4,210

Public Relations

3,285

3,179

6,347

Events and Learning

1,477

1,166

2,765


32,365

29,520

61,037

 



Headline Operating Profit


Business segment




Branding, Advertising & Digital

2,878

2,624

6,228

Media

663

442

1,245

Public Relations

243

460

768

Events and Learning

104

35

265


3,888

3,561

8,506

Central costs

(1,060)

(986)

 (1,576)


2,828

2,575

6,930

 

 

Geographical segmentation

 

Whilst the Group continues to expand geographically, operating income from business based and executed outside the UK remains less than 10% of the total.

 

 

 

 

 

 

3.   Reconciliation of Reported Profit to Headline Profit

 


6 months to

30 June

 2016

Unaudited

£'000

6 months to

30 June

 2015

Unaudited

£'000

Year ended

31 December

 2015

Audited

£'000



PBT

PAT

PBT

PAT

PBT

PAT

 


£'000

£'000

£'000

£'000

£'000

£'000

 








 

Headline profit

2,576

2,009

2,333

1,774

6,461

5,157

 

Exceptional items (Note 4)

-

-

(634)

(495)

(873)

(694)

 

Acquisition-related items (Note 5)

(386)

(383)

192

199

(108)

(89)

 

Start-up costs

(212)

(166)

(154)

(123)

(343)

(272)

 

Reported profit

1,978

1,460

1,737

1,355

5,137

4,102

 

 

 

In order to provide a clearer understanding of underlying profitability, headline profits exclude exceptional items, acquisition-related costs and adjustments, and start-up costs. Start-up costs derive from organically started businesses and comprise the trading losses of such entities until the earlier of two years from commencement or when they show evidence of becoming sustainably profitable.

 

Start-up costs in 2016 relate to the launch of Mongoose Sports & Entertainment and April Six's new ventures in Singapore and the USA. Start-up costs in 2015 related to the launch of Mongoose Sports & Entertainment.

 

 

4.   Exceptional Items


6 months to

30 June

 2016

6 months to

30 June

 2015

Year ended

31 December

 2015


Unaudited

Unaudited

Audited


£'000

£'000

£'000

 

Restructuring costs

 

-

 

634

 

873

 

 

 

Exceptional items consist of revenue or costs that, either by their size or nature, require separate disclosure in order to give a fuller understanding of the Group's financial performance.

 

Exceptional costs in 2015 comprised amounts payable for loss of office and other costs incurred relating to the restructuring of certain operations in order to streamline activities and underpin the Board's growth expectations.

 

 

 

 

 

 

5.   Acquisition Adjustments

 


6 months to

30 June

2016

Unaudited

6 months to

30 June

2015

Unaudited

Year ended

31 December 2015

Audited

 


£'000

£'000

£'000

 





Movement in fair value of contingent

consideration

15

490

618

Amortisation of other intangible assets

recognised on acquisitions

(340)

(273)

(574)

Acquisition transaction costs expensed

(61)

(25)

(152)

 


(386)

192

(108)

 

The movement in fair value of contingent consideration relates to a net downward revision in the estimate payable to vendors of businesses acquired in prior years. Acquisition transaction costs relate to the acquisitions made during the year.

 

 

6.   Net Finance Costs

 


6 months to

6 months to

Year ended    


30 June

2016

30 June

2015

31 December 2015


Unaudited

Unaudited

Audited


£'000

£'000

£'000





Net interest on bank loans, overdrafts and deposits

(203)

(201)

(390)

Amortisation of bank debt arrangement fees

 

(33)

 

(36)

 

(65)

Interest on finance leases

(7)

(5)

(14)

Net finance costs

(243)

(242)

(469)

 

 

7.   Taxation

 

The taxation charge for the period ended 30 June 2016 has been based on an estimated effective tax rate on headline profit on ordinary activities of 22% (30 June 2015: 24%).

 

8.   Earnings Per Share

 

The calculation of the basic and diluted earnings per share is based on the following data, determined in accordance with the provisions of IAS 33: "Earnings per Share".

 

 


6 months to

6 months to

Year ended 


30 June

2016

30 June

2015

31 December 2015


Unaudited

Unaudited

Audited


£'000

£'000

£'000

Earnings

 




Reported profit for the year

1,460

1,355

4,102

Attributable to:




Equity holders of the parent

1,440

1,323

4,011

Non-controlling interests

20

32

91


1,460

1,355

4,102





Headline earnings (Note 3)

2,009

1,774

5,157

Attributable to:




Equity holders of the parent

1,989

1,742

5,066

Non-controlling interests

20

32

91


2,009

1,774

5,157





Number of shares




Weighted average number of ordinary shares for the purpose of basic earnings per share

 

 

82,577,286

 

 

82,513,656

 

 

82,479,427

Dilutive effect of securities:




Employee share options

2,928,569

3,418,682

3,269,681

Weighted average number of ordinary shares for the purpose of diluted earnings per share

 

 

85,505,855

 

 

85,932,338

 

 

85,749,108

Reported basis:




Basic earnings per share (pence)

1.74

1.60

4.86

Diluted earnings per share (pence)

1.68

1.54

4.68

Headline basis:




Basic earnings per share (pence)

2.41

2.11

6.14

Diluted earnings per share (pence)

2.33

2.03

5.91

 

Basic earnings per share includes shares to be issued subject only to time as if they had been issued at the beginning of the period. 

 

A reconciliation of the profit after tax on a reported basis and the headline basis is given in Note 3.

 

9.   Intangible Assets


 30 June

2016

 30 June

2015

31 December 2015


Unaudited

Unaudited

Audited


£'000

£'000

£'000





Goodwill

79,527

75,573

79,333

Other intangible assets

2,429

1,850

2,769


81,956

77,423

82,102

 

 

Goodwill


6 months to 30 June

2016

6 months to 30 June

2015

Year ended 31 December 2015


Unaudited

Unaudited

Audited


£'000

£'000

£'000





Cost




At 1 January

83,606

79,326

79,326

Recognised on acquisition of subsidiaries

197

555

4,315

Adjustment to consideration

(3)

(35)

(35)

At 30 June / 31 December

83,800

79,846

83,606

 

Impairment adjustment




At beginning and end of period

4,273

4,273

4,273





Net book value

79,527

75,573

79,333

 

In accordance with the Group's accounting policies, an annual impairment test is applied to the carrying value of goodwill, unless there is an indication that one of the cash generating units has become impaired during the year, in which case an impairment test is applied to the relevant asset. The next impairment test will be undertaken at 31 December 2016.

 

 

 

Other Intangible Assets

 


6 months to

6 months to

Year ended 

 


30 June

2016

30 June

2015

31 December 2015

 


Unaudited

Unaudited

Audited

 


£'000

£'000

£'000

 





 

Cost




At 1 January

4,601

3,381

3,381

 

Additions

-

-

1,220

 

At 30 June / 31 December

4,601

3,381

4,601

 

 

 




 

Amortisation and impairment




 

At 1 January

1,832

1,258

1,258

 

Amortisation charge for the period

340

273

574

 

At 30 June / 31 December

2,172

1,531

1,832

 





 

Net book value

2,429

1,850

2,769

 

 

 

Other intangible assets consist of intellectual property rights, Client relationships and trade names.

 

 

10.  Bank Loans and Net Debt


30 June

2016

30 June

2015

31 December 2015


Unaudited

Unaudited

Audited


£'000

£'000

£'000





Bank loan outstanding

13,125

10,625

12,875

Adjustment to amortised cost

(133)

(194)

(165)

Carrying value of loan outstanding

12,992

10,431

12,710

Less: Cash and short term deposits

(3,610)

(2,524)

(1,784)

Net bank debt

9,382

7,907

10,926





The borrowings are repayable as follows:




Less than one year

1,750

1,500

1,500

In one to two years

2,500

1,750

2,250

In more than two but less than three years

8,875

2,500

2,500

In more than three but less than four years

-

4,875

6,625


13,125

10,625

12,875

Adjustment to amortised cost

(133)

(194)

(165)


12,992

10,431

12,710

Less: Amount due for settlement within 12 

months (shown under current liabilities)

 

(1,750)

 

(1,500)

 

(1,500)

Amount due for settlement after 12 months

11,242

8,931

11,210

 

11.  Acquisition Obligations

 

The terms of an acquisition may provide that the value of the purchase consideration, which may be payable in cash or shares or other securities at a future date, depends on uncertain future events such as the future performance of the acquired company. The Directors estimate that the liability for payments that may be due is as follows:

 


Cash

£'000

Shares

£'000

Total

£'000

 

30 June 2016

Less than one year

2,528

-

2,528

Between one and two years

1,697

-

1,697

In more than two but less than three years

710

-

710

In more than three but less than four years

521

-

521


5,456

-

5,456

 

A reconciliation of acquisition obligations during the period is as follows:

 


Cash

£'000

Shares

£'000

Total

£'000





At 31 December 2015

7,856

301

8,157

New obligations created in the period

325

-

325

Obligations settled in the period

(2,707)

(304)

(3,011)

Change to manner of settlement - cash

versus shares

 

(3)

 

3

 

-

Adjustments to estimates of obligations

(15)

-

(15)

At 30 June 2016

5,456

-

5,456

 

 

12.  Contribution of Newly Acquired/Commenced Ventures to the Results of the Group

 

Generate Sponsorship Ltd was acquired on 1 April 2016 and contributed turnover of £0.2m, operating income of £0.2m and headline operating profit of less than £0.1m to the results of the Group for the six month period ended 30 June 2016.

 

13.  Post Balance Sheet Events

 

There were no material post balance sheet events.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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