16 March 2022

 

Centaur Media Plc

 

Preliminary results for the year ended 31 December 2021

 

Strong year of progress with growth in revenues, EBITDA and EBITDA margin

 

On track for Margin Acceleration Plan (MAP23) objectives

 

Centaur Media, an international provider of business intelligence, training and specialist consultancy, is pleased to present its preliminary results for the year ended 31 December 2021.

Financial Highlights

£m	2021	2020
Statutory revenue	39.1	32.4
Adjusted EBITDA[1]	6.4	3.8
Adjusted profit/(loss) before tax	3.0	(0.3)
Statutory profit/(loss) before tax	1.4	(2.6)
Group statutory profit/(loss) after taxation	1.4	(14.4)

 

·	Revenues increased 21% to £39.1m
·	Adjusted EBITDA grew 68% to £6.4m with margin growing to 16% in line with MAP23 strategy
·	Group statutory profit of £1.4m
·	Proposing a final dividend of 0.5p per share
·	Net cash of £13.1m at year end, driven by EBITDA growth and cash conversion2 of 164%
·	Revenue from outside UK grew to 37% of total - up from 31% in 2020

 

In early 2021 Centaur launched its Margin Acceleration Plan (MAP23) with the objective of generating over £45m in revenue and an adjusted EBITDA margin of 23% by 2023. To support MAP23, Centaur has continued to focus investment and resource allocation in its Flagship 4 brands - Econsultancy, Influencer Intelligence, MW Mini MBA and The Lawyer - which it considers the key drivers of organic revenue growth. These are supported by Xeim's wider portfolio of Core Brands.

Over the course of 2021, despite the continued impact of the Covid pandemic, the Group has performed ahead of consensus and remains on track to deliver on its ambitious MAP23 goals. The year saw a 21% growth in revenue to £39.1m and a sustained improvement in Adjusted EBITDA margin to 16% (2020: 12%), which contributed to the further strengthening of Centaur's cash position to £13.1m. Xeim and The Lawyer contributed to this result with increased revenues, EBITDA and EBITDA margin.

Market and business knowledge provide an increasingly important competitive advantage in the legal and marketing professions and the past two years have accelerated the already rapid shift to high-quality digital content. In a market characterised by change, Centaur is delivering targeted connectivity together with deeper insight, learning and consultancy expertise.

The objective across Centaur's portfolio of brands is to position them for continued growth by harnessing cross-selling opportunities, with the ultimate aim of enabling customers to deliver better corporate outcomes through building competitive advantage in their markets.

In 2021 Centaur's Flagship 4 brands benefitted from optimised pricing, strong renewal rates and a recovery in events. Econsultancy had particular success through providing blended learning solutions and continuing to penetrate the top 200 companies by marketing spend, while Influencer Intelligence overcame challenging market conditions in H1 to achieve H2 renewal rates of 95%. MW Mini MBA had another outstanding year, with record corporate sales for multi-seat packages and delegate numbers up 44%. The Lawyer saw excellent client renewal rates at 116% and launched several new paid-for products.

Meanwhile, Centaur's Core Brands saw good revenue growth from marketing solutions and successful hybrid events. The performance of the Festival of Marketing was particularly encouraging, with above-target sponsorship and delegate levels for its second consecutive virtual event.

Overall, the value of the content and networking capabilities of Centaur's brands enabled the business to increase the number, size and quality of its customers. Revenue of £28.8m, representing approximately three-quarters of the Group's total, came from our valuable Premium Content, Marketing Services and Training and Advisory recurring revenue streams. Centaur has also successfully increased its international footprint, which now comprises 37% of total revenues with two-thirds of the Group's revenue growth coming from outside the UK.

Outlook

The excellent performance across the Group in 2021 provides a good platform for further growth in 2022. Centaur will continue to invest in quality across the Flagship 4 and Core Brands to take advantage of the trends in the market and develop the Group's offering for its customers, increasing the emphasis on cross-selling of products and building on their synergies. 

Centaur has started the year well and trading for the first two months of 2022 is in line with the Board's expectations. Cash at 11 March 2022 was £12.1m.

The business is on track to meet its MAP23 objectives and will aim to achieve this despite the market headwinds of inflation, competition for talent and the current geopolitical backdrop. Centaur will look to manage its margin through structured price rises in relation to its services to customers, strong negotiation with suppliers and flexible reward structures to retain and recruit top talent.

Dividend

Centaur's Board is proposing a final dividend of 0.5p per share, a total of 1p per share for the 2021 financial year. This is in line with its dividend policy to distribute 40% of adjusted earnings after taxation, subject to a minimum of 1p per share.

Swag Mukerji, Chief Executive Officer, commented:

"After the challenges of 2020, Centaur entered 2021 as a strong and resilient business. We launched our Margin Acceleration Plan - MAP23 - our strategy designed to drive profitable revenue growth, and I am pleased that Centaur has made strong progress in line with these objectives.

Over the course of 2021, it was particularly encouraging to see how the business invested in the quality of the Flagship 4 and Core Brands, positioning them for further growth and enhancing their opportunities to cross-sell. We now have the talent, strategy and financial discipline to realise the opportunities that lie ahead. And none of this would have been possible without the hard work and resilience of our brilliant colleagues, who are playing a pivotal role in making MAP23 a reality."

Enquiries
Centaur Media plc
Swag Mukerji, Chief Executive Officer	020 7970 4000
Simon Longfield, Chief Financial Officer
Teneo
Zoë Watt / Matthew Thomlinson	07713 157561 / 07785 528363

 

Note to editors

Centaur is an international provider of business information, training and specialist consultancy that inspires and enables people to excel at what they do, raising the standard for insight, interaction and impact.

 

Advise. Inform. Connect.

 

Our vision

 

We will be the 'go to' company in the international Marketing and Legal sectors for:

 

·	Advising businesses on how to improve their performance and returns on investment (ROI);
·	Informing customers using data, content and insight with the provision of business intelligence products;
·	Offering training and advisory services through digital learning initiatives and online programmes; and
·	Connecting specific communities through media and events.

 

We will build strong and lasting relationships with our customers by providing cutting-edge insight and analysis to deliver long-term sustainable returns for our shareholders.

 

Our business

 

Centaur is an international provider of business information, training and specialist consultancy that inspires and enables people to excel at what they do within the marketing and legal professions. Our Xeim and The Lawyer business units serve the marketing and legal sectors respectively and, across both, we offer a wide range of products and services targeted at helping our customers add value.

 

Our reputation is based on the trust and confidence arising from a deep understanding of these sectors providing innovative products and services and we have developed a strong track record for providing our customers with market-leading insight, content, data and training. Our key strengths are the expertise of our people, the quality of our brands and products, and our ability to harness technology to innovate continually and develop our customer offering. This enables us to help our customers raise their aspirations and deliver better performance.

Highlights of the year

Financial highlights

 

Revenue from continuing operations £39.1m 2020: £32.4m	Adjusted EBITDA £6.4m (16% margin) 2020: £3.8m (12% margin)
Cash £13.1m 2020: £8.3m	Adjusted diluted EPS 1.9p 2020: 0.3p

 

Strategic and operational highlights

·	Resilient performance against the backdrop of the Covid pandemic and the business remains on track to deliver on its MAP23 objectives
·	Flagship 4 brands continued to deliver strong results, benefitting from optimised pricing, strong renewal rates and the creation of hybrid events
·	Developed the customer offering of our brands, including the introduction of a campaign management tool for Influencer Intelligence, blended learning for Econsultancy and further paid-for products at The Lawyer
·	Record cross-marketing performance of Xeim Brands, supported by Xeim Engage and Xeim Labs marketing solutions
·	Hybrid events at The Lawyer continued to improve in content and networking capability, leading to increased quality and size of customer
·	Improved brand profile at Xeim following further investment in our marketing teams and digital marketing capabilities
·	Increased number of, and value generated from, large blue chip international clients across Xeim
·	DICE, our employee engagement committee, has worked closely with employees to implement initiatives to help Centaur build a more diverse and inclusive workplace

Performance: CEO Review

This has been another unique year for Centaur.

 

After the challenges of 2020, Centaur entered 2021 as a strong and resilient business. During 2021, our people were brilliant and all showed great drive, energy and tenacity in serving our customers while continuing to grow our business in the uncertain economic environment. Their hard work supported 21% revenue growth and 68% adjusted EBITDA growth while cash improved 58% compared to 2020 all ahead of market consensus.

 

In January 2021, we launched MAP23, our new strategy designed to drive profitable revenue growth. The core objectives of MAP23 are to raise Group Adjusted EBITDA margins to 23% by 2023, while increasing revenues to more than £45m in the same timeframe. We remain on track to deliver this.

 

Financial Performance

 

Over the course of the year, we took our first positive steps towards our MAP23 goals, as well as putting in place an effective organisation structure to deliver it.

 

In 2021, Centaur reported revenues of £39.1m for the year (up 21% from 2020), and a Group Adjusted EBITDA margin of 16% (up 4 percentage points from 2020). The Group ended the year with a cash balance of £13.1m, up from £8.3m last year.

 

I am pleased with the contribution that all our brands have made to this positive momentum over the past twelve months.  

 

Dividends

 

The Group has proposed a final dividend for 2021 of 0.5p per ordinary share, bringing the total dividends in respect of 2021 to 1.0p per ordinary share.

 

Operational review

 

Centaur comprises two business units, Xeim and The Lawyer. Xeim (or "excellence in marketing") forms 82% of our revenues and is focused on the marketing sector. The Lawyer is focused on the legal sector and drives the other 18%. Both sectors are undergoing significant change, driven by technological advancement, structural transformation and globalisation all of which gives Centaur a great opportunity for growth.

 

Within these two business units, Centaur has four key brands - the Flagship 4 - which we consider our key growth drivers and where the business prioritises investment and resource allocation. The Lawyer is one of these brands, while the other three form part of the Xeim portfolio (Econsultancy, Influencer Intelligence and MW Mini MBA). The Flagship 4 is supported by our suite of Core Brands.

 

Over the course of 2021, we made significant progress in developing both our Flagship 4 and Core Brands. Our aim is to position each of these brands for further growth, developing cross-selling opportunities and enhancing their shared capabilities, with the ultimate aim of enabling our customers to deliver better corporate outcomes through building competitive advantage in their markets.

 

At Econsultancy, we had success with the sale of blended learning solutions and continued to penetrate the top 200 marketing companies, winning contracts from large blue chip international companies including Unilever, Bayer, UPS and PZ Cussons. Econsultancy Live and the marketing solutions operation also performed well with positive results and impressive revenue growth compared to the prior year.

 

Influencer Intelligence grew in momentum as the year progressed, overcoming the challenging market conditions from 2020 and in Q1 2021 to end the year with renewal rates at 84%. This was supported by our new campaign management tool which helped drive new business, 41% higher than 2020 levels. Our focus on higher value clients supported margin growth and we are well positioned to capitalise on attractive market dynamics in an industry worth $15bn.

 

MW Mini MBA had another excellent year, with record corporate sales for multi-seat packages and online revenues for both the Marketing and Brand courses. Delegate numbers rose 44% with many of our largest sales coming directly from recurring corporate customers demonstrating the value they see in the courses.

 

The Lawyer also performed well, with excellent corporate client renewal rates of 116% and daily usage of Horizon, the 7am daily email. This was supported by several new paid for products including Signal, which provides monthly in-depth strategic insight, benchmark data on the markets and detailed reports on the topics that matter most to law firms.

 

In our portfolio of Core Brands, we were particularly encouraged by the performance of the Festival of Marketing. Last year's Festival, titled "The Year Ahead", was held virtually for the second consecutive year. With more than 80 speakers over the course of four days, and above-target sponsorship and delegate levels, it is well-placed to return even stronger as a hybrid event for 2022.

 

People

 

In August 2021 Jane Wilkinson joined the Group as the new Managing Director of The Lawyer. Jane's experience in driving revenue and margin growth across data, media, B2B and B2C businesses will ensure The Lawyer is best placed to reach its MAP23 objectives and I am delighted to have her onboard. I would also like to take this opportunity to thank Andy Baker for his significant contribution to making The Lawyer a multi-faceted subscription-based information provider with a strong digital presence and market-leading retention rates.

 

We have also strengthened the senior management team in Centaur with the appointment of Claire Rance as Managing Director of our Core Brands, Gill Huber as Managing Partner of Oystercatchers and Juan Mejia as Marketing Director of The Lawyer as well as the promotion of Zara Paes to the role of Group Financial Controller.

 

Looking to 2022

 

In 2022 our objective is to continue to drive revenue and margin growth to deliver our MAP23 strategy. To do this we will focus investment and resource allocation on our Flagship 4 brands while continuing to develop our Core Brands, increasing the emphasis on cross-selling our products and building on their synergies. We aim to achieve this despite the market headwinds of inflation and competition for talent and we will manage our margin through robust negotiation with suppliers, flexible reward structures to retain and recruit top talent and structured price rises in relation to our services to customers.

 

We are confident in our MAP23 plan; the targets are ambitious and achievable and, with our strong balance sheet and unique portfolio of brands, we are well-placed to capitalise on future market opportunities.

 

Centaur will continue to invest across the Flagship 4 and Core Brands portfolios to take advantage of these trends and to develop its offering for our customers.

 

Summary

 

To conclude, I wanted to reflect on the past two years and reiterate my thanks to everyone at Centaur for their tremendous effort and contribution to the growth of our business.

 

As we enter 2022 Centaur is well-positioned for growth. We have a clear strategy in place and I am confident in our ability to hit our targets. Next year we will continue to advance our offering and capitalise on the many market opportunities that lie ahead of us as we continue to invest in our brands and provide the most advanced and competitive offering in the marketplace.

 

Key Performance Indicators

The Group has set out the following core financial and non-financial metrics to measure the Group's performance. The KPIs are monitored by the Board and the focus on these measures will support the successful implementation of the MAP23 strategy. These indicators are discussed in more detail in the CEO and financial reviews.

KPI	Graph	Commentary
Financial
Underlying revenue growth*	2021: 21%, 2020: (14)%	The growth/(decline) in total revenue adjusted to exclude the impact of event timing differences, as well as the revenue contribution arising from acquired or disposed businesses.
Adjusted EBITDA margin*	2021: 16%, 2020: 12%	Adjusted EBITDA as a percentage of revenue where Adjusted EBITDA is defined as adjusted operating profit before depreciation and impairment of tangible assets and amortisation and impairment of intangible assets other than those acquired through a business combination.
Adjusted diluted EPS*	2021: 1.9p, 2020: 0.3p	Diluted earnings per share calculated using the adjusted earnings, as set out in note 9 to the financial information.
Cash conversion*	2021: 164%, 2020: 100%	The percentage by which adjusted operating cash flow covers Adjusted EBITDA (on continuing and discontinued operations) as set out in the financial performance review.
Non-financial
Attendance at Festival of Marketing	2021: 6,786, 2020: 3,938	Number of unique delegates attending the Festival of Marketing
Delegates on Mini MBA course	2021: 6,951, 2020: 4,813	Number of delegates on Mini MBA and related eLearning courses in the year
Xeim customers >£50k	2021: 90 (£12.1m), 2020: 77 (£10.4m)	Number and value of Xeim customers that have sales in the year of greater than £50,000
Top 250 law firm customers	2021: 152 (61%), 2020: 160 (64%)	Number and percentage of top 200 UK law firms and top 50 US law firms

*See definitions in Financial Review

Performance: Financial Review

Overview

2021 has been a year of organic growth recovery after the significant challenges posed by the pandemic. The social and governmental restrictions imposed in 2020 and the economic uncertainties faced by our customers were unprecedented. The easing of these measures, together with the focused strategic and operational actions taken by Centaur's management team, has supported organic growth across most revenue streams, notably Training and Advisory and Events both up by approximately 50% year-on-year. Premium content was an exception to this trend, seeing revenues decline by 2% due to the downturn in renewals and new business in 2020, which has had a knock-on impact on revenues in the year.

After the divestments made in 2019 and the subsequent restructuring of the business, combined with continued control over our costs, we started 2021 in a good financial position. We are pleased with the 21% growth in revenue compared to 2020, the sustained expansion in EBITDA margin and the increase in our cash balance. All of this demonstrates that we are on track to meet our MAP23 objectives.

Performance

Group

Statutory revenue rose by £6.7m to £39.1m in 2021 - an increase of 21%. Xeim increased 23% and The Lawyer 9%. 37% (2020: 31%) of the revenue was generated from outside the UK and this year-on-year increase represented two-thirds of the total growth. We will not be renewing or taking on any new business with Russian customers during 2022, the impact of which is negligible to our results.

Adjusted EBITDA increased from £3.8m to £6.4m at a margin of 16% (2020: 12%), showing promising progress towards our MAP23 targets. This improved margin was on increased revenues, demonstrating the commitment to continued cost control and profitable revenue growth following the previously completed cost savings programme. Central operating costs rose by only 3% in 2021.

The Group posted an adjusted operating profit of £3.2m in the year (2020: £nil), showing an improved trading performance for the business year-on-year as a result of the operational gearing on increased revenues. The Group achieved an adjusted profit after taxation of £2.8m (2020: £0.4m).

During 2021, we have increased our cash balances from £8.3m to £13.1m, mainly as a result of a focus on cash management, the increase in EBITDA, healthy cash collections from customers and working capital improvements from subscriptions growth and the timing of payments.

Xeim

Xeim's revenue for 2021 was £32.1m, an increase of 23% from £26.0m in 2020, surpassing pre-Covid revenue levels of £31.4m in 2019. Premium content in 2021 fell 5% year-on-year, due mainly to the economic uncertainties posed by the global pandemic in 2020 reducing both subscription renewal and new business billings in that year. However, 2021 has seen a recovery in renewal rates and new business across both Econsultancy and Influencer Intelligence, which will lead to positive momentum on revenue in 2022.

Revenue from all other streams showed year-on-year growth, most significantly in Training and Advisory and Events. Events revenue grew by 69% to £2.7m, largely driven by the move from wholly virtual events to hybrid events as some social distancing measures and restrictions were eased in the second half of the year.

Training and Advisory revenue saw strong growth of 48% on the back of continued excellent performance in eLearning revenues from the MW Mini MBA marketing and brand courses, Econsultancy and Oystercatchers.

Xeim posted an Adjusted EBITDA of £6.6m for the year, an increase from £4.3m in 2020. This was predominantly driven by the increase in revenue, offset by an associated increase in cost.

Xeim contains three of the Group's Flagship 4 brands - Econsultancy, Influencer Intelligence and MW Mini MBA.

After facing difficulties posed by the pandemic in the prior year, Econsultancy grew all revenue streams in 2021, with an increase of 22% in the year, resulting in revenues now exceeding pre-Covid levels. Our blended learning strategy was the main driver of new business wins at more than three times the level seen in 2020, resulting in premium content revenue from Econsultancy growing 18%. Subscription renewal rates increased to 69% (2020: 64%) and we are aiming to improve this further in 2022.

Econsultancy's training and advisory revenue also returned to growth up 22% on 2020 and winning further large digital training and consultancy contracts with blue chip international companies. Events revenue almost trebled year-on-year from the Econsultancy Live conferences held in April and November, together with Econsultancy revenue from Marketing Solutions also increasing by over 30%.

Influencer Intelligence revenue reduced 15% in the year. The impact of Covid on the retail and fashion industries in 2020 and the first quarter of 2021 had reduced billings due to cautious marketing investment from core consumer-facing brand clients. However, renewal rates improved significantly from Q2 of 2021 onwards and averaged close to the historically strong rates last seen in 2019. New business also improved in 2021, up 41% on 2020. Both these increases resulted in annualised book of business growth of 3% in the year, after initially dropping by 6%; the revenue benefits will be seen in 2022.

The MW Mini MBA continues to go from strength to strength, with delegate numbers up 44% year-on-year and Net Promoter Scores of +75. Revenue grew 66% from the increase in delegates and a rise in the list price. Delegate increases are being driven in particular by larger take up from recurring corporate customers as well as an increase in online sales.

Of our core Xeim brands, Festival of Marketing has shown significant recovery in 2021 through a series of three hybrid events resulting in a doubling of revenue year-on-year. This is in contrast with the reduced revenue in 2020 due to the move to virtual events. Really B2B and Oystercatchers saw growth in revenue of approximately 20% and the growth in revenue from Marketing Week exceeded 30%, driven by contracts for Marketing Solutions.

The Lawyer

Overall revenues for The Lawyer grew by 9%. Premium content revenue showed modest growth of 5%, primarily from corporate subscriptions which grew 15%. However, this was offset by a planned deferral of revenue relating to the move from the transactional Market Reports product to the Signal product on a subscription based revenue model. Without the impact of this deferral, premium content revenues would have grown by over 10%.

High-margin recruitment advertising revenue grew 34%, demonstrating a partial recovery from the reduction seen due to the economic uncertainty in 2020 which saw law firms delay hiring. With a move to hybrid events as social distancing measures eased, events revenue grew 22% year-on-year to £1.1m, albeit lower than revenue in 2019 when all events were face-to-face. 

This led to a rise in Adjusted EBITDA from £2.1m in 2020 to £2.7m in 2021. The underlying business continues to perform strongly with strong renewal rates and continued engagement by users indicating how important The Lawyer has become to leading law firms and their fee earners.

Measurement and non-statutory adjustments

The statutory results of the Group are presented in accordance with International Financial Reporting Standards ("IFRS"). The Group also uses alternative reporting and other non-GAAP measures as explained below and as defined in the table at the end of this section.

Adjusting items

Adjusted results are not intended to replace statutory results but are prepared to provide a better comparison of the Group's core business performance by removing the impact of certain items from the statutory results. The Directors believe that adjusted results and adjusted earnings per share are the most appropriate way to measure the Group's operational performance because they are comparable to the prior year and consequently review the results of the Group on an adjusted basis internally.

Statutory operating profit/(loss) from continuing operations reconciles to adjusted operating profit and Adjusted EBITDA as follows:

	Note		2021 £m		2020 £m
Statutory operating profit/(loss)			1.6		(2.3)
Adjusting items:
Exceptional operating costs	4	-		0.2
Amortisation of acquired intangible assets	11	1.1		1.5
Share-based payments	23	0.5		0.5
Loss on disposal of assets and liabilities	11,12,18	-		0.1
			1.6		2.3
Adjusted operating profit			3.2		-
Depreciation, amortisation and impairment	3		3.2		3.8
Adjusted EBITDA			6.4		3.8
Adjusted EBITDA margin			16%		12%

 

Adjusting items from continuing operations of £1.6m in the year (2020: £2.3m) are comprised as follows:

Adjusting Item	Description
Exceptional operating costs	2021 £nil. 2020 exceptional costs of £0.2m relate primarily to staff restructuring costs following the onset of the pandemic.
Amortisation of acquired intangible assets	Amortisation of acquired intangible assets of £1.1m (2020: £1.5m) has fallen as certain assets have become fully amortised.
Share-based payments	Share-based payments of £0.5m were at a similar level (2020: £0.5m).
Loss on disposal of assets and liabilities	2021 £nil. In 2020 £0.1m relates primarily to asset write-offs and disposals.

Segment profit

Segmental profit is reported to improve clarity around our business units' performance and consists of gross contribution for a business unit minus specific overheads and allocations of the central support teams and overheads that are directly related to each business unit. Any costs not attributable to either Xeim or The Lawyer, remain as part of central costs.

The table below shows the statutory revenue for each business unit:

	Xeim	The Lawyer	Total	Xeim	The Lawyer	Total
	2021 £m	2021 £m	2021 £m	2020 £m	2020 £m	2020 £m
Revenue
Premium Content	9.0	3.9	12.9	9.5	3.7	13.2
Marketing Services	3.3	-	3.3	2.9	-	2.9
Training and Advisory	12.6	-	12.6	8.5	-	8.5
Events	2.7	1.1	3.8	1.6	0.9	2.5
Marketing Solutions	4.2	0.8	5.0	3.3	0.9	4.2
Recruitment Advertising	0.3	1.2	1.5	0.2	0.9	1.1
Total statutory revenue	32.1	7.0	39.1	26.0	6.4	32.4
Revenue growth	23%	9%	21%

 

The table below reconciles the adjusted operating profit/(loss) for each segment to the Adjusted EBITDA:

	Xeim	The Lawyer	Central	Total	Xeim	The Lawyer	Central	Total
	2021 £m	2021 £m	2021 £m	2021 £m	2020 £m	2020 £m	2020 £m	2020 £m
Revenue	32.1	7.0	-	39.1	26.0	6.4	-	32.4
Operating costs	(27.6)	(4.9)	(3.4)	(35.9)	(24.1)	(5.0)	(3.3)	(32.4)
Adjusted operating profit/(loss)	4.5	2.1	(3.4)	3.2	1.9	1.4	(3.3)	-
Adjusted operating margin	14%	30%		8%	7%	22%		0%
Depreciation, amortisation and impairment	2.1	0.6	0.5	3.2	2.4	0.7	0.7	3.8
Adjusted EBITDA	6.6	2.7	(2.9)	6.4	4.3	2.1	(2.6)	3.8
Adjusted EBITDA margin	21%	39%		16%	17%	33%		12%

Xeim's telemarketing business, MarketMakers, was closed in 2020 and its results in the prior-year comparatives are not shown above but within discontinued operations.

Net finance costs

Net finance costs were £0.3m (2020: £0.3m). The Group held positive cash balances throughout the year and therefore, in both 2021 and 2020, the vast majority of finance costs relate to the commitment fee payable for the revolving credit facility as well as interest on lease payments for right-of-use assets.

Taxation

A tax credit of £0.1m (2020: credit of £0.9m) has been recognised on continuing operations for the year. The adjusted tax charge was £0.1m (2020: credit of £0.6m). The Company's profits were taxed in the UK at a blended rate of 19% (2020: 19.0%), but the resulting tax charge is more than offset by a credit resulting from the effect of changes in the tax rate on deferred tax balances. See note 7 for a reconciliation between the statutory reported tax charge and the adjusted tax charge.

Earnings/loss per share

The Group has delivered adjusted diluted earnings per share for the year of 1.9 pence (2020: 0.3 pence). Diluted earnings per share for the year were 0.9 pence (2020: loss of 10.0 pence). Full details of the earnings per share calculations can be found in note 9 to the financial information.

Dividends

Under the Group's dividend policy, Centaur will target a pay-out ratio of 40% of adjusted retained earnings, subject to a minimum dividend of 1.0p per share per annum.

In light of this, the Group has proposed a final dividend in March 2022 of 0.5p per ordinary share in respect of 2021. This brings the total dividends relating to 2021 to 1.0p (2020: 0.5p) per ordinary share.

This final dividend is subject to shareholder approval at the Annual General Meeting and, if approved, will be paid on 27 May 2022 to all ordinary shareholders on the register at the close of business on 13 May 2022.

Cash flow

	2021 £m	2020 £m
Adjusted operating profit	3.2	-
Depreciation, amortisation and impairment	3.2	4.0
Movement in working capital	3.1	2.5
Adjusted operating cash flow	9.5	6.5
Capital expenditure	(0.8)	(0.8)
Cash impact of adjusting items	-	(4.6)
Taxation	-	-
Repayment of lease obligations and interest	(2.2)	(2.1)
Free cash flow	6.5	(1.0)
Disposal of subsidiaries	-	(0.1)
Disposal of intangible assets	-	0.1
Purchase of own shares	(0.3)	-
Dividends paid to Company's shareholders	(1.4)	-
Increase/(decrease) in net cash	4.8	(1.0)
Opening net cash	8.3	9.3
Closing net cash	13.1	8.3
Cash conversion	164%	100%

 

Adjusted operating cash flow is not a measure defined by IFRS. Centaur defines adjusted operating cash flow as cash flow from operations excluding the impact of adjusting items. The Directors use this measure to assess the performance of the Group as it excludes volatile items not related to the core trading of the Group and includes the Group's management of capital expenditure. A reconciliation between cash flow from operations and adjusted operating cash flow is shown in note 1(b) to the financial information. The cash impact of adjusting items in 2020 primarily related to exceptional restructuring costs.

The movement in working capital in 2021 includes a repayment of £1.0m of VAT deferred under the Government's Covid VAT payment deferral scheme (2020: £1.0m deferral). 2020 also included the receipt of £1.5m relating to the lease incentive on the Group's former office premise. The cash conversion of 164% (2020: 100%) has been adjusted to exclude these one-off items. The cash conversion has increased significantly as a result of the positive working capital movements relating to increased bonuses for 2021 and costs related to the MW Mini MBA, both paid after the end of the year, and an increase in deferred income mainly due to increased billings on subscriptions.

MAP23

In January 2021 the Group announced its MAP23 strategy, under which it will raise Group Adjusted EBITDA margins to 23% (including the impact of IFRS 16) by 2023, while increasing revenues to £45m. The increase in revenue of 21% and EBITDA margin from 12% in 2020 to 16% in 2021 demonstrates clear progress towards these objectives.

The Group has made an encouraging start to 2022 and trading is in line with our expectations. We are expecting some pressure on our costs and on retention of employees due to the wider economic situation in the UK and internationally. We will address this through structured pricing increases to our customers, robust negotiation with our suppliers, tight control of our cost base, variable remuneration structures for our senior management team and continued work on the social aspects of our ESG agenda as set out in our ESG report.

Financing and bank covenants

On 16 March 2021 the Group signed a new revolving credit facility with NatWest that replaces the £25m facility signed with NatWest and Lloyds in 2018. The new facility allows the Group to borrow up to £10m and has a three-year duration with the option of two further one-year periods. The covenants regarding leverage and interest cover are identical to those of the facility it replaces.

Balance sheet

	2021 £m	2020 £m
Goodwill and other intangible assets	44.2	46.1
Property, plant and equipment	2.5	3.3
Deferred taxation	2.4	2.2
Deferred income	(7.8)	(7.0)
Other current assets and liabilities	(7.1)	(4.8)
Non-current assets and liabilities	(0.2)	(0.9)
Net assets before cash	34.0	38.9
Net cash	13.1	8.3
Net assets	47.1	47.2

 

Goodwill and other intangibles have decreased by £1.9m as a result of the amortisation of intangible assets. Property, plant and equipment has fallen by £0.8m due to the difference between depreciation and capital expenditure. Deferred income has increased by £0.8m mainly as a result of advance billings on subscriptions. Other current assets and liabilities have been impacted by an increase in bonus accruals and cost accruals related to the MW Mini MBA.

Going concern

After due consideration, as required under IAS 1 Presentation of Financial Information, including consideration of the Group's net current liability position, the Group's forecasts for at least twelve months from the date of this report, and the effectiveness of risk management processes, the Directors have concluded that it is appropriate to continue to adopt the going concern basis in the preparation of the consolidated financial information for the year ended 31 December 2021. As detailed under the Risk Management section, the Directors have assessed the viability of the Group over a three-year period to March 2025 and the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over that period.

Conclusion

Centaur is well-positioned for growth. The resilience of our brands during the pandemic, the resultant organic revenue growth and the increase in profitability delivered in 2021, together with the strength of our balance sheet, provides persuasive evidence of the progress that Centaur is making towards its MAP23 goals and longer-term vision.

 

Alternative performance measures

Measure	Definition
Adjusted EBITDA	Adjusted operating profit before depreciation and impairment of tangible assets and amortisation and impairment of intangible assets other than those acquired through a business combination.
Adjusted EBITDA margin	Adjusted EBITDA as a percentage of revenue.
Adjusted EPS	EPS calculated using Adjusted profit for the period.
Adjusting items	Items as set out in the statement of consolidated income and notes 1(b) and 4 of the financial information including exceptional items, amortisation of acquired intangible assets, profit/(loss) on disposal of assets, share-based payment expense, volatile items predominantly relating to investment activities and other separately reported items.
Adjusted operating profit	Operating profit excluding Adjusting items.
Adjusted profit before tax	Profit before tax excluding Adjusting items.
Cash conversion	Adjusted operating cash flow (excluding any one-off significant cash flows) / Adjusted EBITDA (including discontinued operations).
Exceptional items	Items where the nature of the item, or its magnitude, is material and likely to be non-recurring in nature as shown in note 4.
Free cash flow	Increase/decrease in cash for the year before the impact of debt, acquisitions, disposals, dividends and share repurchases.
Segment profit	Adjusted operating profit of a segment after allocation of central support teams and overheads that are directly related to each segment or business unit.
Underlying revenue	Statutory revenue adjusted to exclude the impact of revenue arising from acquired businesses, disposed businesses that do not meet the definition of discontinued operations per IFRS 5, and closed business lines ("excluded revenue").

Risk Management

Risk management approach

 

The Board has overall responsibility for the effectiveness of the Group's system of risk management and internal controls, and these are regularly monitored by the Audit Committee.

 

The Executive Committee, Company Secretary and the Head of Legal are responsible for identifying, managing and monitoring material and emerging risks in each area of the business and for regularly reviewing and updating the risk register, as well as reporting to the Audit Committee in relation to risks, mitigations and controls. As the Group operates principally from one office and with relatively flat management reporting lines, members of the Executive Committee are closely involved in day-to-day matters and are able to identify areas of increasing risk quickly and respond accordingly. The responsibility for each risk identified is assigned to a member of the Executive Committee. The Audit Committee considers risk management and controls regularly and the Board formally considers risks to the Group's strategy and plans as well as the risk management process as part of its strategic review.

 

The risk register is the core element of the Group's risk management process. The register is maintained by the Company Secretary with input from the Executive Committee and the Head of Legal. The Executive Committee initially identifies the material risks and emerging risks facing the Group and then collectively assesses the severity of each risk (by ranking both the likelihood of its occurrence and its potential impact on the business) and the related mitigating controls.

 

As part of its risk management processes, the Board considers both strategic and operational risks, as well as its risk appetite in terms of the tolerance level it is willing to accept in relation to each principal risk, which is recorded in the Company's risk register. This approach recognises that risk cannot always be eliminated at an acceptable cost and that there are some risks which the Board will, after due and careful consideration, choose to accept. The Group's risk register, its method of preparation and the operation of the key controls in the Group's system of internal control are regularly reviewed and overseen by the Audit Committee with reference to the Group's strategic aims and its operating environment. The register is also reviewed and considered by the Board.

As part of the ongoing enhancement of the Group's risk monitoring activities, we reviewed and updated the procedures by which we evaluate principal risks and uncertainties during the year.

 

Principal risks

 

The Group's risk register currently includes operational and strategic risks. The principal risks faced by the Group in 2021, taken from the register, together with the potential effects and mitigating factors, are set out below. The Directors confirm that they have undertaken a robust assessment of the principal and emerging risks facing the Group. Financial risks are shown in note 26 to the financial information.

 

 

 

Rank	Risk	Description of risk and impact	Risk mitigation/control procedure	Movement in risk
1	Failure to deliver and maintain a high growth performance culture. The risk that Centaur is unable to attract, develop and retain an appropriately skilled, diverse and responsible workforce and leadership team, and maintain a healthy culture which encourages and supports ethical high-performance behaviours and decision making. Difficulties in recruiting and retaining staff could lead to loss of key senior staff.	Centaur's success depends on growing the business and completing the MAP23 strategy. In order to do this, it depends in large part on its ability to recruit, motivate and retain highly experienced and qualified employees in the face of often intense competition from other companies, especially true in London. Investment in training, development and pay awards needs to be compelling but will be challenging in the current economic and operating climate. Implementing a diverse and inclusive working environment that allows for agile and remote delivery is necessary to keep the workforce engaged. It is also required for the transition to a more flexible hybrid working model. Higher staff churn (a challenge for many companies in our sector) is likely to be an important issue during 2022 and we will need to keep our policies and practices under review. Developing the MAP23 business strategy and changes required in skill set and culture are challenging and costly.	There has been a significant focus on employee communication this year, including, weekly updates, local town hall meetings, monthly all Company Q&A sessions and staff welfare calls. We regularly review measures aimed at improving our ability to recruit and retain employees. During the year we have focused on bringing in higher quality employees to replace leavers or in new roles in order to enhance our strategy particularly in areas such as digitalisation, technology and data analytics.  We track employee engagement through weekly "check-ins" via our Engage system to gauge colleague sentiment and gain an understanding of any key risks or challenges. Our employee engagement team, "DICE", who focus on Diversity, Inclusion, Culture and Engagement have helped to drive forward initiatives relating to diversity and inclusion, through communication and virtual social events. This is sponsored by the CEO and a Non-Executive Director. An annual review ensures flight risks and training needs are identified which become the focus for pay, reward and development areas. All London based staff continue to be paid at or above the London Living Wage. Our HR team hold exit interviews for all leavers to identify and resolve areas of concern.	The Board considers this risk to have increased since the prior year.
2	Sensitivity to UK/sector economic conditions.	The world economy has been severely impacted by the Covid pandemic and UK GDP fell significantly in 2020.The UK also came to the end of the transition deal with the EU at the end of 2020. Although the UK economy has improved during 2021 the Group continues to have sensitivity to UK/sector volatility and economic conditions. The impact was acute on some of Centaur's target market segments including the fashion, retail and entertainment sectors and could also have an impact on physical events. The likelihood of ongoing volatility is expected to be high in 2022 including higher inflation rates and there are varying views as to the timing and extent of a recovery.	Most of the risk impacting Centaur relates to our customers. The Group has demonstrated that it can mitigate the risk by increased digitalisation, running hybrid events and offering eLearning services. Centaur plans to increase international organic growth in the mid to longer term, focusing on the US and Asia in particular, to mitigate this risk. We are also increasing our focus on targeting larger scale multinational businesses which have a more diversified risk profile.   Many of the Group's products are market-leading in their respective sectors and are an integral part of our customers' operational processes, which mitigates the risk of reduced demand for our products. The Group regularly reviews the political and economic conditions and forecasts for the UK, including specific risks such as inflation, to assess whether changes to its product offerings or pricing structures are necessary.	The Board considers this risk to be broadly the same as the prior year.
3	Fraudulent or accidental breach of our IT network, major systems failure or ineffective operation of IT and data management systems leads to loss, theft or misuse of financial assets, proprietary or sensitive information and/or inoperative core products, services, or business functions.	Centaur relies on its IT network to conduct its operations. The IT network is at risk of a serious systems failure or breach of its security controls due to a deliberate or fraudulent cyber-attack or unintentional event and may include third-parties gaining unauthorised access to Centaur's IT network and systems. This could result in misappropriation of its financial assets, proprietary or sensitive information (including personal data or confidential information), corruption of data, or operational disruption, such as unavailability of our websites and our digital products to users, unavailability of support platforms and disruption to our revenue collection activities. Centaur could incur significant costs and suffer other negative consequences as a result of this, such as remediation costs (including liability for stolen assets or information, and repair of any damage caused to Centaur's IT network infrastructure and systems) as well as reputational damage and loss of investor confidence resulting from any operational disruption. A serious occurrence of a loss, theft or misuse of personal data could also result in a breach of data protection requirements and the effects of this.  See risk 4: GDPR, PECR below.	Appropriate IT security and related controls are in place for all key processes to keep the IT environment safe and monitor our network systems and data. Centaur has invested significantly in its IT systems and, where services are outsourced to suppliers, contingency planning is carried out to mitigate risk of supplier failure. Centaur continues to develop its CRM, e-commerce and finance systems and removed a number of legacy systems following the divestments in 2019 which has reduced the Group's cyber risk. Centaur has a business continuity plan which includes its IT systems, subject to an annual failover test, and there is daily, overnight back-up of data, stored off-site. Websites are hosted by specialist third-party providers who typically provide warranties relating to security standards. All of our websites are hosted on a secure platform which is cloud hosted and databases have been cleansed and updated. The Group Head of Data ensures that rigorous controls are in place to ensure warehouse data can only be downloaded by the data team. Integration of the warehouse with current databases and data captured and stored elsewhere is ongoing. Please see risk 4 below for specific mitigations relating to the security of personal data and GDPR compliance.	The Board considers this risk to be broadly the same as the prior year.
4	Regulatory (GDPR, PECR and other similar legislation) involve strict requirements regarding how Centaur handles personal data, including that of customers. There is the risk of a fine from the ICO, third-party claims as well as reputational damage if we do not comply.	The UK General Data Protection Regulation ('GDPR'), the Data Protection Act 2018 ('DPA') and the Privacy and Electronic Communications Regulations ('PECR') involve strict requirements for Centaur regarding its handling of personal data. Centaur's obligations under the GDPR are complex meaning this area requires ongoing focus. PECR includes specific obligations for businesses like Centaur regarding electronic marketing calls, emails, texts, and on their use of cookies and similar technologies, among other things. In the event of a serious breach of the GDPR and/or PECR, Centaur could be subject to a significant fine from the regulator, the ICO, and claims from third parties including customers as well as reputational damage. The maximum fines for breaches are £17.5 million (GDPR) and £500,000 (PECR) respectively and directors can  have liability for serious breaches of PECR's marketing rules. Other countries and jurisdictions worldwide are reviewing and updating their own laws relating to data and privacy. Where Centaur is required to comply with the laws in non-UK jurisdictions there is a risk that Centaur may not be compliant with all such laws and could therefore be subject to regulatory action and fines from the relevant regulators and data subjects. The UK's departure from the EU will have implications for UK data protection laws, the impact of which is not yet clear and is being kept under review. ICO guidance relating to use of cookies, and further changes to the laws relating to data privacy, ad tech and electronic marketing expected in the future, will further increase the regulatory burden for businesses like Centaur, and the requirements in this regard will need to be kept under review.	Centaur has taken a wide range of measures aimed at complying with the key aspects of the GDPR, DPA and PECR. In 2020, a Data Protection Compliance Committee was formed (overseen by the CFO) in order to monitor Centaur's ongoing compliance with these data protection laws. Staff are required to undertake online data protection awareness and data security awareness training annually. In Q4 2021, Centaur appointed a DPO (Wiggin LLP) to oversee its compliance with data protection laws. Further, Centaur's in-house lawyer keeps abreast of material developments in data protection law and regulation and advice from external law firms is sought where appropriate.  Given the increasingly global nature of our business and our customers, Centaur's approach to complying with data protection laws in other jurisdictions should be kept under review. In 2020, Centaur implemented various measures to mitigate against risk in respect of the CCPA, a new Californian privacy law, and also appointed an 'EU representative' under the GDPR ahead of Brexit.	The Board considers this risk to be broadly the same as the prior year.

Viability Statement

In accordance with provision 31 of the UK Corporate Governance Code 2018, the Directors have assessed the viability of the Group over a three-year period from signing of this Annual Report to March 2025, taking account of the Group's current position, the Group's strategy, the Board's risk appetite and, as documented above, the principal risks facing the Group and how these are managed. Based on the results of this analysis, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period to March 2025.

 

The Board has determined that the three-year period to March 2025 is an appropriate period over which to provide its viability statement because the Board's financial planning horizon covers a three-year period. In making their assessment, the Directors have taken account of the Group's £10m three-year revolving credit facility (which allows extensions to 2026 on similar terms), cash flows, dividend cover and other key financial ratios over the period.

 

The covenants of the facility require a minimum interest cover ratio of 4, and net leverage not exceeding 2.5 times. In the calculation of net leverage Adjusted EBITDA excludes the impact of IFRS 16. The Group is not expected to breach any of these covenants in any of the scenarios run for the viability statement.

 

The base scenario uses a three-year forecast to December 2025, which assumes achievement of MAP23 targets, with 2024 forecast continuing that strategy. The three months to March 2025 are based directly off the respective forecast in 2024 with inflation applied. The MAP23 targets were built, bottom-up during 2020 once the impact of Covid had become clear. The strategy focuses on investment and resource allocation on the Flagship 4, the four brands we consider our key drivers for organic revenue growth. Further details of the MAP23 plan can be found in the Strategy section of the 2020 Annual Report.

 

The metrics in the base case are subject to stress testing which involves sensitising key assumptions underlying the forecasts both individually and in unison. The key sensitivity is on Adjusted EBITDA which is the primary driver of performance in the viability assessment. This sensitised scenario assume that Adjusted EBITDA is lowered by 10% in every period that the viability statement covers.

 

In both the base case and sensitised scenarios, the Group would not be required to rely on the revolving credit facility in order to fund its daily operations. Sensitising the model for changes in the assumptions and risks affirmed that the Group would remain viable over the three-year period to March 2025.

 

Going concern basis of accounting

 

In accordance with provision 30 of the UK Corporate Governance Code 2018, the Directors' statement as to whether they consider it appropriate to adopt the going concern basis of accounting in preparing the financial information and their identification of any material uncertainties, including the principal risks outlined above, to the Group's ability to continue to do so over a period of at least twelve months from the date of approval of the financial information and for the foreseeable future, being the period as discussed in the viability statement above.

Statement of Directors' Responsibilities in respect of the financial information

The Directors are responsible for preparing the Annual Report and the financial information in accordance with applicable law and regulation.

 

Company law requires the Directors to prepare financial information for each financial year. On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted International Accounting Standards (IASs), with future changes being subject to endorsement by the UK Endorsement Board. Therefore, the Directors have prepared the Group financial information in accordance with UK-adopted IASs and Company financial information in accordance with UK-adopted IASs. Under company law the Directors must not approve the financial information unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group and Company for that period. In preparing the financial information, the Directors are required to:

 

·	select suitable accounting policies and then apply them consistently;
·	state whether applicable UK-adopted IASs have been followed for the Group financial information and UK-adopted IASs have been followed for the Company financial information, subject to any material departures disclosed and explained in the financial information;
·	make judgements and accounting estimates that are reasonable and prudent; and
·	prepare the financial information on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

 

The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial information and the Directors' Remuneration Report comply with the Companies Act 2006.

 

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

 

Directors' confirmations

The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and Company's position and performance, business model and strategy.

 

Each of the Directors, whose names and functions are listed in the Governance Report confirm that, to the best of their knowledge:

·	the Company financial information, which has been prepared in accordance with UK-adopted IASs, gives a true and fair view of the assets, liabilities, financial position and result of the Company;
·	the Group financial information, which has been prepared in accordance with UK-adopted IASs, gives a true and fair view of the assets, liabilities, financial position and profit of the Group; and
·	the Directors' Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.

 

In the case of each Director in office at the date the Directors' Report is approved:

·	so far as the Director is aware, there is no relevant audit information of which the Group and Company's auditors are unaware; and
·	they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group and Company's auditors are aware of that information.

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2021

	Note	Adjusted Results1 2021 £'000	Adjusting Items1 2021 £'000	Statutory Results 2021 £'000	Adjusted Results1 2020 £'000	Adjusting Items1 2020 £'000	Statutory Results 2020 £'000
Continuing operations
Revenue	2	39,080	-	39,080	32,419	-	32,419
Other operating income		-	-	-	2	-	2
Net operating expenses	3	(35,848)	(1,611)	(37,459)	(32,411)	(2,315)	(34,726)
Operating profit / (loss)		3,232	(1,611)	1,621	10	(2,315)	(2,305)
Finance income		1	-	1	6	-	6
Finance costs	6	(261)	-	(261)	(315)	-	(315)
Profit / (loss) before tax		2,972	(1,611)	1,361	(299)	(2,315)	(2,614)
Taxation	7	(139)	195	56	559	336	895
Profit / (loss) for the year from continuing operations		2,833	(1,416)	1,417	260	(1,979)	(1,719)
Discontinued operations
Profit / (loss) for the year from discontinued operations after tax	8	-	-	-	112	(12,821)	(12,709)
Profit / (loss) for the year attributable to owners of the parent after tax		2,833	(1,416)	1,417	372	(14,800)	(14,428)
Total comprehensive income / (loss) attributable to owners of the parent		2,833	(1,416)	1,417	372	(14,800)	(14,428)
Earnings / (loss) per share attributable to owners of the parent	9
Basic from continuing operations		2.0p	(1.0p)	1.0p	0.2p	(1.4p)	(1.2p)
Basic from discontinued operations		-	-	-	0.1p	(8.9p)	(8.8p)
Basic from profit / (loss) for the year		2.0p	(1.0p)	1.0p	0.3p	(10.3p)	(10.0p)
Fully diluted from continuing operations		1.9p	(1.0p)	0.9p	0.2p	(1.4p)	(1.2p)
Fully diluted from discontinued operations		-	-	-	0.1p	(8.9p)	(8.8p)
Fully diluted from profit / (loss) for the year		1.9p	(1.0p)	0.9p	0.3p	(10.3p)	(10.0p)

¹ Adjusted results exclude adjusting items, as detailed in note 1(b)

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2021

Attributable to owners of the Company

	Note	Share capital £'000	Own shares £'000	Share premium £'000	Reserve for shares to be issued £'000	Deferred shares £'000	Foreign currency reserve £'000	Retained earnings £'000	Total equity £'000
At 1 January 2020		15,141	(7,243)	1,101	1,770	80	127	50,040	61,016
Loss for the year and total comprehensive loss		-	-	-	-	-	-	(14,428)	(14,428)
Currency translation adjustment		-	-	-	-	-	39	-	39
Transactions with owners in their capacity as owners:
Exercise of share awards	22,23	-	1,341	-	(749)	-	-	(592)	-
Fair value of employee services	23	-	-	-	543	-	-	-	543
Lapsed share awards	22	-	-	-	(957)	-	-	957	-
As at 31 December 2020		15,141	(5,902)	1,101	607	80	166	35,977	47,170
Profit for the year and total comprehensive income		-	-	-	-	-	-	1,417	1,417
Currency translation adjustment		-	-	-	-	-	(23)	-	(23)
Transactions with owners in their capacity as owners:
Dividends	24	-	-	-	-	-	-	(1,450)	(1,450)
Exercise of share awards	22,23	-	431	-	(493)	-	-	(419)	(481)
Fair value of employee services	23	-	-	-	357	-	-	-	357
Tax on share-based payments	14	-	-	-	-	-	-	118	118
As at 31 December 2021		15,141	(5,471)	1,101	471	80	143	35,643	47,108

 

COMPANY STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2021

Attributable to owners of the Company

	Note	Share capital £'000	Own shares £'000	Share premium £'000	Reserve for shares to be issued £'000	Deferred shares £'000	Retained earnings £'000	Total equity £'000
At 1 January 2020		15,141	(6,330)	1,101	1,770	80	15,972	27,734
Profit for the year and total comprehensive income		-	-	-	-	-	12,172	12,172
Transactions with owners in their capacity as owners:
Transfer of treasury shares	22	-	2,195	-	-	-	(1,591)	604
Exercise of share awards	23	-	-	-	(749)	-	246	(503)
Fair value of employee services	23	-	-	-	543	-	-	543
Lapsed share awards	22	-	-	-	(957)	-	957	-
As at 31 December 2020		15,141	(4,135)	1,101	607	80	27,756	40,550
Loss for the year and total comprehensive loss		-	-	-	-	-	(2,325)	(2,325)
Transactions with owners in their capacity as owners:
Dividends	24	-	-	-	-	-	(1,450)	(1,450)
Exercise of share awards	23	-	-	-	(493)	-	80	(413)
Fair value of employee services	23	-	-	-	357	-	-	357
Tax on share-based payments	14	-	-	-	-	-	88	88
As at 31 December 2021		15,141	(4,135)	1,101	471	80	24,149	36,807

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2021

Registered number 04948078

	Note	31 December 2021 £'000	31 December 2020 £'000
Non-current assets
Goodwill	10	41,162	41,162
Other intangible assets	11	3,102	4,911
Property, plant and equipment	12	2,484	3,258
Deferred tax assets	14	2,488	2,449
Other receivables	15	319	515
		49,555	52,295
Current assets
Trade and other receivables	15	6,059	5,781
Cash and cash equivalents	16	13,065	8,300
Current tax assets	20	195	182
		19,319	14,263
Total assets		68,874	66,558
Current liabilities
Trade and other payables	17	(11,405)	(8,719)
Bank and other borrowings		(3)	(7)
Lease liabilities	18	(1,884)	(1,969)
Deferred income	19	(7,846)	(7,048)
		(21,138)	(17,743)
Net current liabilities		(1,819)	(3,480)
Non-current liabilities
Lease liabilities	18	(500)	(1,406)
Provisions	21	-	-
Deferred tax liabilities	14	(128)	(239)
		(628)	(1,645)
Net assets		47,108	47,170
Capital and reserves attributable to owners of the Company
Share capital	22	15,141	15,141
Own shares		(5,471)	(5,902)
Share premium		1,101	1,101
Other reserves		551	687
Foreign currency reserve		143	166
Retained earnings		35,643	35,977
Total equity		47,108	47,170

 

COMPANY STATEMENT OF FINANCIAL POSITION

as at 31 December 2021

Registered number 04948078

	Note	31 December 2021 £'000	31 December 2020 £'000
Non-current assets
Investments	13	65,155	64,992
Deferred tax assets	14	190	68
Other receivables	15	1,197	237
		66,542	65,297
Current assets
Trade and other receivables	15	161	35,717
		161	35,717
Total assets		66,703	101,014
Current liabilities
Trade and other payables	17	(29,893)	(60,457)
Bank and other borrowings		(3)	(7)
		(29,896)	(60,464)
Net current liabilities		(29,735)	(24,747)
Net assets		36,807	40,550
Capital and reserves attributable to owners of the Company
Share capital	22	15,141	15,141
Own shares		(4,135)	(4,135)
Share premium		1,101	1,101
Other reserves		551	687
Retained earnings		24,149	27,756
Total equity		36,807	40,550

 

The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in this financial information. The Company's loss for the year was £2,325,000 (2020: profit of £12,172,000). Dividends of £1,450,000 were paid in the year (2020: £nil). The other movements in retained earnings are shown in the Company's statement of changes in equity.

 

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2021

	Note	2021 £'000	2020 £'000
Cash flows from operating activities
Cash generated from operations	25	9,521	2,065
Tax refund		-	(9)
Net cash generated from operating activities		9,521	2,056
Cash flows from investing activities
Directly attributable costs of disposal of subsidiaries		-	(85)
Proceeds from disposal of intangible assets	11	-	150
Purchase of property, plant and equipment	12	(51)	(223)
Purchase of intangible assets	11	(706)	(597)
Net cash flows used in investing activities		(757)	(755)
Cash flows from financing activities
Purchase of own shares	22	(306)	-
Loan arrangement fees	25	(107)	(25)
Interest paid	25	(87)	(130)
Repayment of obligations under lease arrangements	18	(2,036)	(1,925)
Termination of finance lease	18	-	(200)
Dividends paid to Company's shareholders	24	(1,448)	-
Net cash flows used in financing activities		(3,984)	(2,280)
Net increase / (decrease) in cash and cash equivalents		4,780	(979)
Cash and cash equivalents at beginning of the year		8,300	9,274
Effects of foreign currency exchange rate changes		(15)	5
Cash and cash equivalents at end of year	16	13,065	8,300

 

COMPANY CASH FLOW STATEMENT

for the year ended 31 December 2021

	Note	2021 £'000	2020 £'000
Cash flows from operating activities
Cash generated from operating activities	25	1,642	155
Cash flows from investing activities
Net cash flows used in investing activities		-	-
Cash flows from financing activities
Interest paid	25	(87)	(130)
Loan arrangement fees	25	(107)	(25)
Dividends paid to Company's shareholders	24	(1,448)	-
Net cash flows used in financing activities		(1,642)	(155)
Net increase in cash and cash equivalents		-	-
Cash and cash equivalents at beginning of the year		-	-
Cash and cash equivalents at end of year	16	-	-

 

NOTES TO THE FINANCIAL INFORMATION

1 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these consolidated and Company financial information is set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. The financial information is for the Group consisting of Centaur Media Plc and its subsidiaries, and the Company, Centaur Media Plc. Centaur Media Plc is a public company limited by shares and incorporated in England and Wales.

(a) Basis of preparation

The financial information in this preliminary announcement has been extracted from the audited Group Financial Statements for the year ended 31 December 2021 and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group Financial Statements for 2020 were delivered to the registrar of companies, and those for 2021 will be delivered in due course. The auditor's report on the Group Financial Statements for 2020 and 2021 were both unqualified and unmodified. The auditors' report was signed on 15 March 2022. The Group Financial Statements and this preliminary announcement were approved by the Board of Directors on 15 March 2022.

On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. Centaur Media Plc transitioned to UK-adopted International Accounting Standards in its consolidated and Company financial information on 1 January 2021. This change constitutes a change in accounting framework. However, there is no impact on recognition, measurement or disclosure in the year reported as a result of the change in framework. The consolidated and Company financial information has been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial information has been prepared on a historical cost basis except where stated otherwise within the accounting policies.

Going concern

The financial information has been prepared on a going concern basis. The Directors have carefully assessed the Group's ability to continue trading and have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for at least twelve months from the date of approval of this financial information and for the foreseeable future, being the period in the viability statement.

Net cash (see note 1(b)) at 31 December 2021 amounted to £13,065,000 (2020: £8,300,000). On 16 March 2021, the Group signed a new multi-currency revolving credit facility with NatWest. The new revolving credit facility consists of a committed £10m facility and an additional uncommitted £15m accordion option, both of which can be used to cover the Group's working capital and general corporate needs. The facility runs to March 2024 with the option to extend for two periods of one year each. None of this was drawn down at 31 December 2021. The covenants regarding leverage and interest cover are identical to those of the facility it replaces.

The Group has net current liabilities at 31 December 2021 amounting to £1,819,000 (2020: £3,480,000). In both the current and prior year these primarily arose from its normal high levels of deferred income relating to performance obligations to be delivered in the future rather than an inability to service its liabilities, as deferred income will not result in a cash outflow. An assessment of cash flows for the next three financial years, which has taken into account the factors described above, has indicated an expected level of cash generation which would be sufficient to allow the Group to fully satisfy its working capital requirements and the guarantee given in respect of its UK subsidiaries, to cover all principal areas of expenditure, including maintenance, capital expenditure and taxation during this year, and to meet the financial covenants under the revolving credit facility. The Company has net current liabilities at 31 December 2021 amounting to £29,735,000 (2020: £24,747,000). In both the current and prior year, these almost entirely arose from unsecured payables to subsidiaries which have no fixed date of repayment.

The preparation of financial information in accordance with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial information and the reported amounts of revenues and expenses during the year. Although these estimates are based on management's best knowledge of the amount, events or actions, the actual results may ultimately differ from those estimates.

Having assessed the principal risks and the other matters discussed in connection with the Viability Statement which considers the Group's viability over a three-year period to March 2025, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing its consolidated financial information.

New and amended standards adopted by the Group

No new standards or amendments to standards that are mandatory for the first time for the financial year commencing 1 January 2021 affected any of the amounts recognised in the current year or any prior year and is not likely to affect future periods.

New standards and interpretations not yet adopted

There are no standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Prior year re-presentation

The financial information has been presented in £'000. This is a change from the prior year financial information which was presented in £m rounded to one decimal place. Prior year comparatives have been re-presented in £'000. Certain prior year comparatives have been updated following this change.

Comparative numbers

Prior year comparative numbers have been updated to reflect current year presentation and disclosures. A portion of costs previously presented as administrative expenses have now been allocated to cost of sales, an update to reflect the same allocation basis as the current year. The allocation basis has been refined to reflect the nature of the costs. These reallocations increased cost of sales by £1,946,000 and decreased administrative expenses by £1,946,000 for the Group, refer to note 3. There is no impact on the face of the consolidated statement of comprehensive income.

(b) Presentation of non-statutory measures

In addition to IFRS statutory measures, the Directors use various non-GAAP key financial measures to evaluate the Group's performance and consider that presentation of these measures provides shareholders with an additional understanding of the core trading performance of the Group. The measures used are explained and reconciled to their IFRS statutory headings below.

Adjusted operating profit and adjusted earnings per share

The Directors believe that adjusted results and adjusted earnings per share, split between continuing and discontinued operations, provide additional useful information on the core operational performance of the Group to shareholders, and review the results of the Group on an adjusted basis internally. The term 'adjusted' is not a defined term under IFRS and may not therefore be comparable with similarly titled profit measurements reported by other companies. It is not intended to be a substitute for, or superior to, IFRS measurements of profit.

Adjustments are made in respect of:

·	Exceptional items - the Group considers items of income and expense as exceptional and excludes them from the adjusted results where the nature of the item, or its magnitude, is material and likely to be non-recurring in nature so as to assist the user of the financial information to better understand the results of the core operations of the Group. Details of exceptional items are shown in note 4.
·	Amortisation of acquired intangible assets - the amortisation charge for those intangible assets recognised on business combinations is excluded from the adjusted results of the Group since they are non-cash charges arising from investment activities. As such, they are not considered reflective of the core trading performance of the Group. Details of amortisation of acquired intangible assets are shown in note 11.
·	Share-based payments - share-based payment expenses or credits are excluded from the adjusted results of the Group as the Directors believe that the volatility of these charges can distort the user's view of the core trading performance of the Group. Details of share-based payments are shown in note 23.
·	Impairment of goodwill - the Directors believe that non-cash impairment charges in relation to goodwill are triggered by factors external to the core trading of the business, and therefore exclude any such charges from the adjusted results of the Group. Details of the goodwill impairment analysis are shown in note 10.
·	Profit or loss on disposal of assets or subsidiaries - profit or loss on disposals of businesses are excluded from adjusted results of the Group as they are unrelated to core trading and can distort a user's understanding of the performance of the Group due to their infrequent and volatile nature. See note 4.
·	Other separately reported items - certain other items are excluded from adjusted results where they are considered large or unusual enough to distort the comparability of core trading results year-on-year. Details of these separately disclosed items are shown in note 4.

The tax related to adjusting items is the tax effect of the items above that are allowable deductions for tax purposes, calculated using the standard rate of corporation tax. See note 7 for a reconciliation between reported and adjusted tax charges.

Further details of adjusting items are included in note 4. A reconciliation between adjusted and statutory earnings per share measures is shown in note 9.

Profit / (loss) before tax reconciles to adjusted operating profit as follows:

		Note	2021 £'000	2020 £'000
Profit / (loss) before tax			1,361	(2,614)
Adjusting items
Exceptional operating costs		4	-	238
Amortisation of acquired intangible assets		11	1,091	1,464
Impairment of acquired intangible assets		11	25	-
Share-based payment expense		23	495	541
Loss on disposal assets and liabilities		11,12,18	-	72
Adjusted profit / (loss) before tax			2,972	(299)
Finance income			(1)	(6)
Finance costs		6	261	315
Adjusted operating profit			3,232	10

 

Adjusted operating cash flow

Adjusted operating cash flow is not a measure defined by IFRS. It is defined as cash flow from operations excluding the impact of adjusting items, which are defined above, and including capital expenditure. The Directors use this measure to assess the performance of the Group as it excludes volatile items not related to the core trading of the Group and includes the Group's management of capital expenditure. Statutory cash flow from operations reconciles to adjusted operating cash as below:

		Note	2021 £'000	2020 £'000
Reported cash flow from operating activities		25	9,521	2,065
Adjusting items from operations			-	1,063
Working capital impact of adjusting items from operations			-	3,450
Adjusted operating cash flow			9,521	6,578
Capital expenditure			(757)	(820)
Post capital expenditure cash flow			8,764	5,758

 

Our cash conversion rate for the year was 164% (2020: 100%).

Underlying revenue growth

The Directors review underlying revenue growth in order to allow a like-for-like comparison of revenues between years. Underlying revenues therefore exclude the impact of revenue contribution arising from acquired or disposed businesses and other revenue streams that are not expected to be ongoing in future years. Statutory revenue growth reconciles to underlying revenue growth as follows:

	Xeim £'000	The Lawyer £'000	Total £'000
Reported revenue 2020	26,053	6,366	32,419
Underlying revenue 2020	26,053	6,366	32,419
Reported revenue 2021	32,108	6,972	39,080
Underlying revenue 2021	32,108	6,972	39,080
Reported revenue growth	23%	9%	21%
Underlying revenue growth	23%	9%	21%

 

Adjusted EBITDA

Adjusted EBITDA is not a measure defined by IFRS. It is defined as adjusted operating profit before depreciation and impairment of tangible assets and amortisation and impairment of intangible assets other than those acquired through a business combination. It is used by the Directors as a measure to review performance of the Group and forms the basis of some of the Group's financial covenants under its revolving credit facility. Adjusted EBITDA is calculated as follows:

		Note	2021 £'000	2020 £'000
Adjusted operating profit (as above)			3,232	10
Depreciation of property, plant and equipment		12	1,808	1,992
Amortisation of computer software		11	1,335	1,816
Impairment of computer software		11	55	-
Adjusted EBITDA			6,430	3,818

 

Net cash / (debt)

Net cash/(debt) is not a measure defined by IFRS. Net cash/(debt) is calculated as cash less overdrafts and bank borrowings under the Group's financing arrangements. The Directors consider the measure useful as it gives greater clarity over the Group's liquidity as a whole. Net cash is £13,062,000 as at 31 December 2021 (2020: £8,293,000).

(c) Principles of consolidation

The consolidated financial information incorporates the financial information of Centaur Media Plc and all of its subsidiaries after elimination of intercompany transactions and balances.

(i) Subsidiaries

Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group until the date that the Group ceases to control them. In the consolidated statement of comprehensive income, the results of subsidiaries for which control has ceased are presented separately as discontinued operations in the year in which they have been disposed of and in the comparative year.

On the disposal of a subsidiary, assets and liabilities of that subsidiary are de-recognised from the consolidated statement of financial position, earnings up to the date of loss of control are retained in the Group, and a profit/(loss) on disposal is recognised, measured as consideration received less the fair value of assets and liabilities disposed of.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. The accounting policies of subsidiaries are consistent with the policies adopted by the Group.

(ii) Employee Benefit Trust

The Centaur Employees' Benefit Trust ('Employee Benefit Trust') is a trust established by Trust deed in 2006 for the granting of shares to applicable employees. Its assets and liabilities are held separately from the Company and are fully consolidated in the consolidated statement of financial position. Holdings of Centaur Media Plc shares by the Employee Benefit Trust are shown within the 'own shares' reserve as a deduction from consolidated equity.

(d) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial information of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial information are presented in Pounds Sterling, which is the Group and Company's functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognised in the consolidated statement of comprehensive income.

(iii) Group companies

The results and financial position of the Group entities that have a functional currency different from the presentation currency, as disclosed in note 13, are translated into the presentation currency as follows:

·	assets and liabilities for each statement of financial position presented are translated at the closing rate at the reporting date;
·	income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
·	all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations and of borrowings are recognised in other comprehensive income. When a foreign operation is sold, exchange differences that were recorded in equity are recognised in the consolidated statement of comprehensive income as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(e) Revenue recognition

Revenue is measured at the transaction price, which is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to the customer. Judgement may arise in timing and allocation of transaction price when there are multiple performance obligations in one contract. However, an annual impact assessment is performed which has confirmed that the impact is immaterial in both the current year and comparative year. Revenue arises from the sales of premium content, marketing services, training and advisory, events, marketing solutions, recruitment advertising, and telemarketing services in the normal course of business, net of discounts and value added tax. Goods and services exchanged as part of a barter transaction are recognised in revenue at the fair value of the goods and services provided. Returns, refunds and other similar allowances, which have historically been low in volume and immaterial in magnitude, are accounted for as a reduction in revenue as they arise.

Where revenue is deferred it is held as a balance in deferred income on the consolidated statement of financial position. At any given reporting date, this deferred income is current in nature and is expected to be recognised wholly in revenue in the following financial year, with the exception of returns and credit notes, which have historically been low in volume and immaterial in magnitude.

The Group recognises revenue earned from contracts as individual performance obligations are met, on a stand-alone selling price basis. This is when value and control of the product or service has transferred, being when the product is delivered to the customer or the period in which the services are rendered as set out in more detail below.

Premium Content

Revenue from subscriptions is deferred and recognised on a straight-line basis over the subscription period, reflecting the continuous provision of paid content services over this time. Revenue from individual publication sales is recognised at the point at which the publication is delivered to the customer. In general, the Group bills customers for premium content at the start of the contract.

Marketing Services

Revenue from campaign work and consultancy contracts is recognised when the Group has obtained the right to consideration in exchange for its performance, which is when a separately identifiable phase (milestone) of a contract has been completed and the value and benefit of the services rendered have been transferred to the customer. In general, the Group bills customers for marketing services up front on a milestone basis.

 

Training and Advisory

Revenue from training and advisory is deferred and recognised over the period of the training or when a separately identifiable milestone of a contract has been delivered to the customer. In general, the Group bills customers for training and advisory up front or on a milestone basis as the service is delivered.

Events

Consideration received in advance for events is deferred and revenue is recognised at the point in time at which the event takes place. In general, the Group bills customers for events before the event date.

Marketing Solutions

Marketing solutions revenue from display and bespoke campaigns is recognised over the period that the service is provided. In general, the Group bills customers for marketing solutions on delivery.

Recruitment Advertising

Sales of online recruitment advertising space are recognised in revenue over the period during which the advertisements are placed. Sales of recruitment advertising space in publications are recognised at the point at which the publication occurs. In general, the Group bills customers for recruitment advertising on delivery.

Telemarketing Services

Revenue from telemarketing services was deferred and recognised over the period that the service was delivered, generally according to the number of hours expended as a proportion of the total hours contracted. In general, the Group billed customers for telemarketing services in advance. All revenue from telemarketing services ceased during the prior year following the closure of the MarketMakers' telemarketing business in August 2020 and is therefore presented within discontinued operations in the prior year.

(f) Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions. Government grants are recognised in the profit or loss and deducted from the related expense within net operating expenses in the consolidated statement of comprehensive income. Note 3 provides further information on how the Group accounts for government grants.

(g) Investments

In the Company's financial information, investments in subsidiaries are stated at cost less provision for impairment in value.

Investments are reviewed for impairment whenever events indicate that the carrying value may not be recoverable. An impairment loss is recognised to the extent that the carrying value exceeds the higher of the investments fair value less cost of disposal and its value-in-use. An asset's value-in-use is calculated by discounting an estimate of future cash flows by the pre-tax weighted average cost of capital. Any impairment is recognised in the statement of comprehensive income. If there has been a change in the estimates used to determine the investment's recoverable amount, impairment losses that have been recognised in prior periods may be reversed. This reversal is recognised in the statement of comprehensive income.

(h) Income tax

The tax expense represents the sum of current and deferred tax.

Current tax is based on the taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years, and it further includes items that are never taxable or deductible. The Group and Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is provided in full, using the liability method, on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial information and the corresponding tax bases used in the computation of taxable profit. 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 to utilise those temporary differences and losses. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or 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 is calculated at the enacted or substantively enacted tax rates that are expected to apply in the year when the liability is settled, or the asset is realised. Deferred tax is charged or credited to the consolidated statement of comprehensive income, except when it relates to items charged or credited directly to equity or other comprehensive income, in which case the deferred tax is recognised in equity or other comprehensive income respectively.

The carrying amount of deferred tax assets is reviewed at each reporting date and is 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.

(i) Leases

Lessee accounting

Under IFRS 16, leases are accounted for on a 'right-of-use model' reflecting that, at the commencement date, the Group as a lessee has a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term. The financial obligation is recognised as a lease liability, and the right to use the underlying asset is recognised as a right-of-use ('ROU') asset. The ROU assets are recognised within property, plant and equipment on the face of the consolidated statement of financial position and are presented separately in note 12.

The lease liability is initially measured at the present value of the lease payments using the rate implicit in the lease or, where that cannot be readily determined, the incremental borrowing rate. Subsequently, the lease liability is measured at amortised cost, with interest increasing the carrying amount and lease payments reducing the carrying amount. The carrying amount is remeasured to reflect any reassessment or lease modifications, or to reflect revised in-substance fixed lease payments.

The ROU asset is initially measured at cost which comprises:

·	the amount of the initial measurement of the lease liability;
·	any lease payments made at or before the commencement date, less any lease incentives received;
·	any initial direct costs; and
·	an estimate of costs to be incurred at the end of the lease term.

Subsequently, the ROU asset is measured at cost less accumulated depreciation and impairment losses. Depreciation is calculated to write off the cost on a straight-line basis over the lease term.

Using the exemption available under IFRS 16, the Group elects not to apply the requirements above to:

·	Short-term leases; and
·	Leases for which the underlying asset is of a low value.

In these cases, the Group recognises the lease payments as an expense on a straight-line basis over the lease term, or another systematic basis if that basis is more representative of the agreement.

Lessor accounting

The Group had contracts for the sub-lease of areas of its former office property lease. These arrangements were exempt from the requirements of IFRS 16 under the short-term lease exemption as they all had a lease term of under twelve months from the date of transition. As such, the income derived from these sub-leasing arrangements was recognised on a straight-line basis and was presented in the consolidated statement of comprehensive income in 'other operating income'. All arrangements in which the Group acted as a lessor ceased during the prior year.

(j) Impairment of assets

Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events indicate that the carrying value may not be recoverable. An impairment loss is recognised to the extent that the carrying value exceeds the higher of the asset's fair value less cost of disposal and its value-in-use. An asset's value-in-use is calculated by discounting an estimate of future cash flows by the pre-tax weighted average cost of capital.

(k) Inventories

Inventories are stated at the lower of cost and net realisable value. Work in progress comprises costs incurred relating to publications and exhibitions prior to the publication date or the date of the event. Cost is measured as all costs of purchase and other costs incurred in bringing the inventories to their present location and condition.

(l) Property, plant and equipment

See note 1(i) for right-of-use assets. All other property, plant and equipment is stated at historical cost less accumulated depreciation and impairment losses. The historical cost of property, plant and equipment is the purchase cost together with any incidental direct costs of acquisition. Depreciation is calculated to write off the cost, less estimated residual value, of assets, on a straight-line basis over the expected useful economic lives to the Group over the following periods:

Leasehold improvements	- 10 years or the expected length of the lease if shorter
Fixtures and fittings	- 5 to 10 years
Computer equipment	- 3 to 5 years
Right-of-use assets	- over the lease term

The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting year, with the effect of any changes in estimate accounted for on a prospective basis.

(m) Intangible assets

(i) Goodwill

Where the cost of a business acquisition exceeds the fair values attributable to the separable net assets acquired, the resulting goodwill is capitalised and allocated to the cash generating unit ('CGU') or groups of CGUs that are expected to benefit from the synergies of the business combination. Goodwill has an indefinite useful life and is tested for impairment annually on a Group level or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Each segment is deemed to be a CGU. Goodwill and acquired intangible assets are assessed for impairment in accordance with IAS 36 'Impairment of Assets'. In assessing whether a write-down of goodwill and acquired intangible assets is required, the carrying value of the segment is compared with its recoverable amount. Recoverable amount is measured as the higher of fair value less cost of disposal and value-in-use. Any impairment is recognised in the consolidated statement of comprehensive income (in net operating expenses) and is classified as an adjusting item. Impairment of goodwill is not subsequently reversed.

On the disposal of a CGU, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

(ii) Brands and publishing rights and customer relationships

Separately acquired brands and publishing rights are shown at historical cost. Brands and publishing rights and customer relationships acquired in a business combination are recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated amortisation and impairment losses.

(iii) Software

Computer software that is not integral to the operation of the related hardware is carried at cost less accumulated amortisation. Costs associated with the development of identifiable and unique software products controlled by the Group that will generate probable future economic benefits in excess of costs are recognised as intangible assets when the criteria of IAS 38 'Intangible Assets' are met. They are carried at cost less accumulated amortisation and impairment losses.

(iv) Amortisation methods and periods

Amortisation is calculated to write off the cost or fair value of intangible assets on a straight-line basis over the expected useful economic lives to the Group over the following periods:

Computer software	- 3 to 5 years
Brands and publishing rights	- 5 to 20 years
Customer relationships	- 3 to 10 years or over the term of any specified contract
Separately acquired websites and content	- 3 to 5 years

(n) Employee benefits

(i) Post-employment obligations

The Group and Company contribute to a defined contribution pension scheme for the benefit of employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. Contributions to defined contribution schemes are charged to the statement of comprehensive income in net operating expenses when employer contributions become payable.

(ii) Share-based payments

The Group operates a number of equity-settled share-based compensation plans for its employees. The fair value of the share-based compensation expense is estimated using either a Monte Carlo (stochastic model) or Black-Scholes option pricing model and is recognised in the consolidated statement of comprehensive income over the vesting period with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the awards granted:

·	including any market performance conditions;
·	excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets, cash flow performance and remaining an employee of the entity over a specified time period); and
·	including the impact of any non-vesting conditions (for example, the requirement for employees to save).

The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting year, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in the consolidated statement of comprehensive income, with a corresponding adjustment to equity. The Company issues new shares or transfers shares from treasury shares to settle share-based compensation awards.

The award by the Company of share-based compensation awards over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution only if it is left unsettled. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

A deferred tax asset is recognised on share options based on the intrinsic value of the options, which is calculated as the difference between the fair value of the shares under option at the reporting date and exercise price of the share options. The deferred tax asset is utilised when the share options are exercised or released when share options lapse. The accounting policy regarding deferred tax is set out above in note 1(h).

(o) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and the obligation can be reliably estimated.

(p) Equity

(i) Share capital and share premium

Ordinary and deferred shares are classified as equity. The excess of consideration received in respect of shares issued over the nominal value of those shares is recognised in the share premium account. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Where any Group company purchases the Company's equity instruments, for example as the result of a share buyback or share-based payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of the Company as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Company.

Shares held by the Employee Benefit Trust are disclosed as own shares and deducted from equity.

(ii) Own shares

Own shares consist of treasury shares and shares held within the Employee Benefit Trust.

Own shares are recognised at cost as a deduction from equity shareholders' funds. Subsequent consideration received for the sale of such shares is also recognised in equity, with any excess of consideration received between the sale proceeds and the original cost being recognised in share premium. No gain or loss is recognised in the financial information on transactions in treasury shares.

(q) Dividends

Dividends are recognised in the year in which they are paid or, in respect of the Company's final dividend for the year, approved by the shareholders in the Annual General Meeting.

(r) Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Executive Committee has been identified as the chief operating decision-maker, reviewing the Group's internal reporting on a monthly basis in order to assess performance and allocate resources. Refer to note 2 for the basis of segmentation.

(s) Financial instruments

The Group has applied IFRS 9 'Financial Instruments' as outlined below:

(i) Financial assets

The Group classifies and measures its financial assets in line with one of the three measurement models under IFRS 9: at amortised cost, fair value through profit or loss, and fair value through other comprehensive income. Management determines the classification of its financial assets based on the requirements of IFRS 9 at initial recognition.

They are included in current assets, except for maturities greater than 12 months after the reporting date. These are classified as non-current assets. The Group's financial assets comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position. Please see the following sections.

(ii) Trade receivables

Trade receivables are accounted for under IFRS 9, being recognised initially at fair value and subsequently at amortised cost less any allowance for expected lifetime credit losses under the 'expected credit loss' model. As mandated by IFRS 9, the expected lifetime credit losses are calculated using the 'simplified' approach.

A provision matrix is used to calculate the allowance for expected lifetime credit losses on trade receivables which is based on historical default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. The allowance for expected lifetime credit losses is established by considering, on a discounted basis, the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying those shortfalls by the probability of each scenario occurring. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The allowance is the sum of these probability weighted outcomes. The allowance and any changes to it are recognised in the consolidated statement of comprehensive income within net operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against net operating expenses in the consolidated statement of comprehensive income. The Group defines a default as failure of a debtor to repay an amount due as this is the time at which our estimate of future cash flows from the debtor is affected.

(iii) Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits repayable on demand or maturing within three months from the date of acquisition.

(iv) Financial liabilities

Debt and trade payables are recognised initially at fair value based on amounts exchanged, net of transaction costs, and subsequently at amortised cost.

Interest expense on debt is accounted for using the effective interest method and is recognised in finance costs.

(v) Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

(vi) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred and carried subsequently at amortised cost. Costs of borrowings, including commitment fees on undrawn facilities, are recognised in the consolidated statement of comprehensive income as incurred or, where appropriate, across the term of the related borrowing.

(vii) Receivables from and payables to subsidiaries and the Employee Benefit Trust

The Company has amounts receivable from and payable to subsidiaries and the receivable from the Employee Benefit Trust which are recognised at fair value. Amounts receivable from subsidiaries and the Employee Benefit Trust are assessed annually for recoverability under the requirements of IFRS 9.

(t) Key accounting assumptions, estimates and judgements

The preparation of financial information under IFRS requires the use of certain key accounting assumptions and requires management to exercise its judgement and to make estimates. The areas where assumptions and estimates are significant to the consolidated financial information are as follows:

Key sources of estimation uncertainty

(i) Carrying value of goodwill, other intangible assets and Company investment estimate

In assessing whether goodwill, other intangible assets and the Company's investment are impaired, the Group uses a discounted cash flow model which includes forecast cash flows and estimates of future growth. If the results of operations in future periods are lower than included in the cash flow model, impairments may be triggered. A sensitivity analysis has been performed on the value-in-use calculations. Further details of the assumptions and sensitivities in the discounted cash flow model are included in notes 10 and 13.

(ii) Recoverability of trade receivables estimate

The allowance for expected lifetime credit losses for trade receivables is calculated in line with IFRS 9. This is established by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. Further details about trade receivables are included in note 15 and information about the credit risk and expected lifetime credit losses are shown in note 26.

(iii) Share-based payments estimate

The fair value of the share-based compensation expense recognised in the consolidated statement of comprehensive income requires the use of estimates. Details regarding the determination of fair value of these costs are set out in note 1(n)(ii).

(iv) Deferred tax judgement and estimate

The calculation of deferred tax assets and liabilities requires judgement. Where the ultimate tax treatment is uncertain, the Group recognises deferred tax assets and liabilities based on an estimate of future taxable income and recoverability. Where a change in circumstances occurs, or the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax balances in the year in which that change, or outcome, is known. The accounting policy regarding deferred tax is set out above in note 1(h).

Critical accounting judgements

(v) Adjusting items judgement

The term 'adjusted' is not a defined term under IFRS. Judgement is required to ensure that the classification and presentation of certain items as adjusting, including exceptional items, is appropriate and consistent with the Group's accounting policy. Further details about the amounts classified as adjusting are included in notes 1(b) and 4.

(vi) IFRS 16 reassessment of lease term judgement

Leases are required to be recognised at the present value of the lease payments not yet paid for the duration of the lease term. The lease term is defined by IFRS 16 as the non-cancellable period of the lease, and any period covered by an option to extend or terminate that the lessee is reasonably certain to exercise. The assessment of the lease term requires judgement when considering the option to extend or terminate in a contract.

During the year, the Group's property lease has been remeasured upon reassessment of the lease term, where a judgement has been taken that an option to extend will be exercised. The remeasurement of the lease, and the corresponding adjustment to the ROU asset are presented in notes 18 and 12 respectively.

 

2 Segmental reporting

The Group is organised around two reportable market-facing segments: Xeim and The Lawyer. These two segments derive revenues from a combination of premium content, marketing services, training and advisory, events, marketing solutions and recruitment advertising. Overhead costs are allocated to these segments on an appropriate basis, depending on the nature of the costs, including in proportion to revenues or headcount. Corporate income and costs have been presented separately as 'Central'. The Group believes this is the most appropriate presentation of segmental reporting for the user to understand the core operations of the Group. There is no inter-segmental revenue.

Segment assets consist primarily of property, plant and equipment, intangible assets (including goodwill) and trade receivables. Segment liabilities comprise trade payables, accruals and deferred income.

Corporate assets and liabilities primarily comprise property, plant and equipment, intangible assets, current and deferred tax balances, cash and cash equivalents, borrowings and lease liabilities.

Capital expenditure comprises additions to property, plant and equipment and intangible assets.

2021	Note	Xeim £'000	The Lawyer £'000	Central £'000	Group £'000
Revenue		32,108	6,972	-	39,080
Adjusted operating profit / (loss)	1(b)	4,469	2,110	(3,347)	3,232
Amortisation of acquired intangibles	11	(1,091)	-	-	(1,091)
Impairment of acquired intangibles	11	(25)	-	-	(25)
Share-based payments	23	(113)	(2)	(380)	(495)
Operating profit / (loss)		3,240	2,108	(3,727)	1,621
Finance income					1
Finance costs	6				(261)
Profit before tax					1,361
Taxation	7				56
Profit for the year					1,417
Segment assets		38,167	18,216	-	56,383
Corporate assets				12,491	12,491
Consolidated total assets					68,874
Segment liabilities		(13,251)	(2,795)	-	(16,046)
Corporate liabilities				(5,720)	(5,720)
Consolidated total liabilities					(21,766)
Other items
Capital expenditure (tangible and intangible assets)		401	188	162	751

 

2020	Note	Xeim £'000	The Lawyer £'000	Central £'000	Continuing operations £'000	Discontinued operations £'000	Group £'000
Revenue		26,053	6,366	-	32,419	3,604	36,023
Other operating income		-	-	2	2	-	2
Adjusted operating profit / (loss)	1(b)	1,923	1,408	(3,321)	10	41	51
Exceptional operating costs	4	(283)	(50)	95	(238)	(911)	(1,149)
Amortisation of acquired intangibles	11	(1,464)	-	-	(1,464)	(485)	(1,949)
Share-based payments	23	(304)	(39)	(198)	(541)	-	(541)
Loss on disposal of assets and liabilities	11,12,18	-	-	(72)	(72)	(659)	(731)
Impairment of goodwill	10	-	-	-	-	(11,009)	(11,009)
Operating (loss) / profit		(128)	1,319	(3,496)	(2,305)	(13,023)	(15,328)
Finance income					6	1	7
Finance costs	6				(315)	(24)	(339)
Loss before tax					(2,614)	(13,046)	(15,660)
Taxation	7				895	337	1,232
Loss for the year					(1,719)	(12,709)	(14,428)
Segment assets		40,618	17,734	-	58,352	-	58,352
Corporate assets				8,206	8,206	-	8,206
Consolidated total assets					66,558	-	66,558
Segment liabilities		(13,816)	(3,103)	-	(16,919)	(285)	(17,204)
Corporate liabilities				(2,184)	(2,184)	-	(2,184)
Consolidated total liabilities					(19,103)	(285)	(19,388)
Other items
Capital expenditure (tangible and intangible assets)		253	39	461	753	91	844

 

Supplemental Information

Revenue by Geographical Location             

The Group's revenues from continuing operations from external customers by geographical location are detailed below:

	Xeim 2021 £'000	The Lawyer 2021 £'000	Total 2021 £'000	Xeim 2020 £'000	The Lawyer 2020 £'000	Total 2020 £'000
United Kingdom	19,057	5,662	24,719	17,175	5,168	22,343
Europe (excluding United Kingdom)	4,567	675	5,242	2,503	636	3,139
North America	4,954	445	5,399	4,069	385	4,454
Rest of world	3,530	190	3,720	2,306	177	2,483
	32,108	6,972	39,080	26,053	6,366	32,419

 

Substantially all of the Group's net assets are located in the United Kingdom. The Directors therefore consider that the Group currently operates in a single geographical segment, being the United Kingdom.  Refer to note 13 for the location of the Group's subsidiaries.

Revenue by type

The Group's revenue from continuing operations by type is as follows:

	Xeim 2021 £'000	The Lawyer 2021 £'000	Total 2021 £'000	Xeim 2020 £'000	The Lawyer 2020 £'000	Total 2020 £'000
Premium Content	9,006	3,882	12,888	9,527	3,689	13,216
Marketing Services	3,301	-	3,301	2,889	-	2,889
Training and Advisory	12,542	18	12,560	8,497	36	8,533
Events	2,751	1,071	3,822	1,595	865	2,460
Marketing Solutions	4,145	840	4,985	3,291	915	4,206
Recruitment Advertising	363	1,161	1,524	254	861	1,115
	32,108	6,972	39,080	26,053	6,366	32,419

 

The accounting policies for each of these revenue streams is disclosed in note 1(e), including the timing of revenue recognition. There are some contracts for which revenue has not yet been recognised and is being held in deferred income, see note 19. This deferred income is all current and is expected to be recognised as revenue in 2022.

 

3 Net operating expenses

Continuing operating profit / (loss) is stated after charging:

	Note	Adjusted Results1 2021 £'000	Adjusting Items1 2021 £'000	Statutory Results 2021 £'000	Re-presented2 Adjusted Results1 2020 £'000	Adjusting Items1 2020 £'000	Re-presented2 Statutory Results 2020 £'000
Employee benefits expense	5	19,272	-	19,272	17,282	238	17,520
Government grants		-	-	-	(290)	-	(290)
Net employee benefits expense		19,272	-	19,272	16,992	238	17,230
Depreciation of property, plant and equipment	12	1,808	-	1,808	1,992	-	1,992
Loss on disposal of assets and liabilities	11,12,18	-	-	-	-	72	72
Amortisation of intangible assets	11	1,335	1,091	2,426	1,816	1,464	3,280
Impairment of intangible assets	11	55	25	80	-	-	-
Impairment of trade receivables	26	(39)	-	(39)	255	-	255
Share-based payment expense	23	-	495	495	-	541	541
IT expenditure		2,563	-	2,563	2,548	-	2,548
Marketing expenditure		1,399	-	1,399	719	-	719
Other staff related costs		618	-	618	715	-	715
Other operating expenses		8,837	-	8,837	7,374	-	7,374
		35,848	1,611	37,459	32,411	2,315	34,726
Cost of sales		15,082	-	15,082	12,604	-	12,604
Distribution costs		62	-	62	98	-	98
Administrative expenses		20,704	1,611	22,315	19,709	2,315	22,024
		35,848	1,611	37,459	32,411	2,315	34,726

¹ Adjusted results exclude adjusting items, as detailed in note 1(b)

² See note 1(a) for description of the prior year re-presentation

 

Government grants

In prior year, the Group applied for government grants of £835,000 for furloughed employees based at both the London and Portsmouth offices. This was received in full during the prior year. Government grants were deducted from the related employee benefit expenses and presented within net operating expenses in the consolidated statement of comprehensive income.

The government grants in continuing operations was £290,000 and in discontinued operations was £545,000.

No government grants were applied for in the current year.

Services provided by the Company's auditors

	2021 £'000	2020 £'000
Fees payable to the Company's auditor for the audit of the Company and consolidated financial information	109	105
Fees payable to the Company's predecessor auditor for the audit of the Company and consolidated financial information	-	31
Total audit fees	109	136
Audit related assurance services	10	50
Total non-audit fees	10	50
Total fees	119	186

 

4 Adjusting items

As discussed in note 1(b), certain items are presented as adjusting. These are detailed below:

	Note	2021 £'000		2020 £'000
Continuing operations
Exceptional operating costs
Staff related restructuring costs (including external employment advice costs)	5	-		238
Exceptional operating costs		-		238
Amortisation of acquired intangible assets	11	1,091		1,464
Impairment of acquired intangible assets	11	25		-
Share-based payment expense	23	495		541
Loss on disposal of assets and liabilities	11,12,18	-		72
Adjusting items to profit / (loss) before tax		1,611		2,315
Tax relating to adjusting items	7	(195)		(336)
Total adjusting items after tax for continuing operations		1,416		1,979
Discontinued operations
Exceptional costs	8,21	-		911
Impairment of goodwill	10	-		11,009
Amortisation of acquired intangible assets	11	-		485
Loss on disposal of assets and liabilities	11,12,18	-		659
Tax relating to adjusting items	7	-		(243)
Total adjusting items after tax for discontinued operations		-		12,821
Total adjusting items after tax		1,416		14,800

 

Exceptional costs

Staff related restructuring costs (including external employment advice costs)

In the prior year staff related restructuring costs of £793,000 in discontinued operations related to restructuring of the MarketMakers business and £238,000 in continuing operations related to restructuring parts of the wider Centaur Group due to the adverse impact of Covid. Refer to note 21 for further details.

Other exceptional costs

In the prior year, £118,000 in discontinued operations related to the exit of the Portsmouth lease upon cessation of MarketMakers' telemarketing business.

Other adjusting items

Other adjusting items relate to the amortisation and impairment of acquired intangible assets (see note 11) and share-based payment costs (see note 23) as well as the items discussed below:

Goodwill impairment

An impairment of £11,009,000 against goodwill relating to the MarketMakers business was recognised in the prior year. There were no impairments recognised in the current year. See note 10 for further details.

Loss on disposal of assets and liabilities

In the prior year the loss on disposal of assets and liabilities in continuing operations of £72,000 consisted of a loss on disposal of software assets of £60,000 (see note 11), a loss on disposal of computer equipment of £53,000 (see note 12), a loss on disposal of the MarketMakers ROU asset of £124,000 (see note 12) which represented the proportion of the asset attributable to the continuing Really B2B business, offset by a £165,000 gain on disposal of the corresponding lease liability (see note 18).

The loss on disposal of assets and liabilities in discontinued operations of £659,000 consisted of the disposal of intangible assets totalling a net book value of £830,000 (see note 11), with proceeds on disposal of £150,000 creating a loss on disposal of £680,000 (see note 11). Additionally, there was a loss on disposal of computer equipment of £68,000, fixtures and fittings of £65,000, and the MarketMakers ROU asset of £469,000 (see note 12) which represented the proportion of the asset attributable to the discontinued telemarketing business. This was offset by a £623,000 gain on disposal of the corresponding lease liability (see note 18).

In the current year, disposals of assets were at net book value, resulting in no gain or loss on disposal.

 

5 Directors and employees

	Note	2021 Group £'000	2020 Continuing Group £'000	2020 Discontinued Group £'000	2020 Total Group £'000	2021 Total Company £'000	2020 Total Company £'000
Wages and salaries		16,652	15,014	3,055	18,069	1,057	989
Social security costs		1,946	1,609	251	1,860	105	92
Other pension costs		674	659	57	716	42	34
Adjusted staff costs		19,272	17,282	3,363	20,645	1,204	1,115
Government grants	3	-	(290)	(545)	(835)	-	-
Exceptional staff related restructuring costs	4	-	238	793	1,031	-	-
Equity-settled share-based payments	23	495	541	-	541	325	(15)
		19,767	17,771	3,611	21,382	1,529	1,100

 

The average monthly number of employees employed during the year, including Executive Directors, was:

	2021 Group Number	2020 Group Number	2021 Company Number	2020 Company Number
Xeim	202	216	-	-
The Lawyer	52	56	-	-
Central	10	10	4	4
Discontinued	-	134	-	-
	264	416	4	4

 

The Group's employees are employed and paid by Centaur Communications Limited, a Group company, with the exception of the Company's directors who are employed by the Company. As the employees provide services to other Group companies, their costs are recharged, and the relevant disclosures are made in the financial information. The employees relating to discontinued operations were employed and paid by Market Makers Incorporated Limited.

Key management compensation

		2021 £'000	2020 £'000
Salaries and short-term employment benefits		1,736	1,216
Post-employment benefits		74	57
Share-based payments		64	40
		1,874	1,313

Key management is defined as the Executive Directors and Executive Committee members.

Aggregate Directors' remuneration

		2021 £'000	2020 £'000
Salaries, fees, bonuses and benefits in kind		1,150	753
Post-employment benefits		46	29
		1,196	782

 

Highest paid Director's remuneration

		2021 £'000	2020 £'000
Salaries, fees, bonuses and benefits in kind		592	386
Post-employment benefits		37	20
		629	406

 

No directors exercised share options during the year (2020: one director and one former director exercised share options). Further details of Directors' remuneration are included in the Remuneration Committee Report.

 

6 Finance costs

	Note	2021 Group £'000	2020 Continuing £'000	2020 Discontinued £'000	2020 Total £'000
Commitment fees and amortisation of arrangement fee in respect of revolving credit facility		194	215	-	215
Lease interest	18	67	100	24	124
		261	315	24	339

 

Interest and fees on revolving credit facility

These finance costs are in relation to the £25m revolving credit facility, none of which was drawn down at 31 December 2021 (2020: £nil). As indicated by the consolidated cash flow statement, there were no drawdowns from this facility during the current and prior year. Finance costs in relation to this facility resulted in cash outflows by the Company and Group of £194,000 during the year (2020: £155,000).

Lease interest

Lease liabilities are recognised for the Group's property lease arrangements. £67,000 of interest on these leases was incurred during the year (2020: £124,000). Please refer to notes 1(i) and 18 for further details.

 

7 Taxation

	Note		2021 Group £'000	2020 Continuing £'000	2020 Discontinued £'000	2020 Total £'000
Analysis of (credit) / charge for the year
Current tax	20
UK Corporation Tax			-	105	(105)	-
Overseas tax			14	24	-	24
Adjustments in respect of prior years			(38)	(20)	-	(20)
			(24)	109	(105)	4
Deferred tax	14
Current period			(175)	(731)	(232)	(963)
Adjustments in respect of prior years		143		(273)	-	(273)
		(32)		(1,004)	(232)	(1,236)
Taxation credit		(56)		(895)	(337)	(1,232)

 

The tax credit for the year can be reconciled to the profit / (loss) in the consolidated statement of comprehensive income as follows:

	'000	'000	'000	'000
	2021 Group £'000	2020 Continuing £'000	2020 Discontinued £'000	2020 Total £'000
Profit / (loss) before tax	1,361	(2,614)	(13,046)	(15,660)
Tax at the UK rate of corporation tax of 19.0% (2020: 19.0%)	259	(497)	(2,479)	(2,976)
Effects of:
Expenses not deductible for tax purposes	69	62	2,119	2,181
Share-based payments	47	-	-	-
Effects of changes in tax rate on deferred tax balances	(538)	(170)	23	(147)
Different tax rates of subsidiaries in other jurisdictions	2	3	-	3
Adjustments in respect of prior years	105	(293)	-	(293)
Taxation credit	(56)	(895)	(337)	(1,232)

 

The Finance Act 2021 included provisions to increase the main rate of corporation tax to 25% from 1 April 2023. This change had been substantively enacted at the reporting date.

A reconciliation between the reported tax expense and the adjusted tax expense taking account of adjusting items as discussed in note 1(b) and 4 is shown below:

	2021 Group £'000	2020 Continuing £'000	2020 Discontinued £'000	2020 Total £'000
Reported tax credit	(56)	(895)	(337)	(1,232)
Effects of:
Amortisation of acquired intangible assets	112	233	92	325
Exceptional costs	-	-	151	151
Share-based payments	83	103	-	103
Adjusted tax charge / (credit)	139	(559)	(94)	(653)

 

8 Discontinued operations

A significant restructuring of the MarketMakers' business was executed during the prior year following an adverse impact on the performance of the telemarketing business following the onset of Covid. This led to the closure of the MarketMakers' telemarketing business in August 2020. MarketMakers' Really B2B brand continues to operate and its performance is reported as part of continuing operations.

A loss on disposal of £659,000 arose on the disposal of assets relating to the MarketMakers' telemarketing business being the difference between the proceeds of disposal and the carrying amount of the net assets. Details of the disposal can be found in note 4.

The results of the discontinued operations, which were included in the consolidated statement of comprehensive income and consolidated cash flow statement, were as follows:

	2020
Statement of comprehensive income	£'000
Revenue	3,604
Expenses	(15,991)
Loss on disposal	(659)
Loss before tax	(13,046)
Attributable tax credit	337
Statutory loss after tax	(12,709)
Add back adjusting items1:
Exceptional costs	911
Impairment of goodwill	11,009
Amortisation of acquired intangible assets	485
Loss on disposal	659
Tax relating to adjusting items1	(243)
Total adjusting items1	12,821
Adjusted profit1 attributable to discontinued operations after tax	112

¹ Adjusted results exclude adjusting items, as detailed in note 1(b)

The attributable tax credit stated in the table above is derived from the loss from discontinued operations. No income tax credit arose on the loss on disposal.

	2020
Cash flows	£'000
Operating cash flows	280
Investing cash flows	102
Financing cash flows	(382)
Total cash flows	-

 

There were no discontinued operations for the year ended 31 December 2021.

 

9 Earnings / (loss) per share

Basic earnings per share ('EPS') is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares in issue during the year. 2,064,185 (2020: 1,948,492) shares held in the Employee Benefit Trust and 4,550,179 (2020: 4,550,179) shares held in treasury (see note 22) have been excluded in arriving at the weighted average number of shares.

For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares. This comprises share options and awards granted to Directors and employees under the Group's share-based payment plans where the exercise price is less than the average market price of the Company's ordinary shares during the year.

Basic and diluted earnings per share have also been presented on an adjusted continuing and discontinued basis, as the Directors believe that these measures are more reflective of the underlying performance of the Group. These have been calculated as follows:

	Note	2021 Earnings / (loss) attributable to owners of the parent £'000	2021 Weighted average number of shares thousands	2021 Earnings / (loss) per share pence	2020 Earnings / (loss) attributable to owners of the parent £'000	2020 Weighted average number of shares thousands	2020 Earnings / (loss) per share pence
Basic
Continuing operations		1,417	144,927	1.0	(1,719)	144,267	(1.2)
Continuing and discontinued operations		1,417	144,927	1.0	(14,428)	144,267	(10.0)
Effect of dilutive securities
Options: Continuing operations		-	7,947	(0.1)	-	-	-
Options: Continuing and discontinued operations		-	7,947	(0.1)	-	-	-
Diluted
Continuing operations		1,417	152,874	0.9	(1,719)	144,267	(1.2)
Continuing and discontinued operations		1,417	152,874	0.9	(14,428)	144,267	(10.0)
Adjusted1
Continuing operations
Basic		1,417	144,927	1.0	(1,719)	144,267	(1.2)
Other exceptional costs	4	-	-	-	238	-	0.2
Amortisation of acquired intangibles	11	1,091	-	0.8	1,464	-	1.0
Impairment of acquired intangibles	11	25	-	-	-	-	-
Share-based payments	23	495	-	0.3	541	-	0.4
Loss on disposal of assets and liabilities	11,12,18	-	-	-	72	-	-
Tax effect of above adjustments	7	(195)	-	(0.1)	(336)	-	(0.2)
Discontinued operations
Basic		-	144,927	-	(12,709)	144,267	(8.8)
Other exceptional costs	4	-	-	-	911	-	0.6
Impairment of goodwill	10	-	-	-	11,009	-	7.6
Amortisation of acquired intangibles	11	-	-	-	485	-	0.3
Loss on disposal of assets and liabilities	11,12,18	-	-	-	659	-	0.5
Tax effect of above adjustment	7	-	-	-	(243)	-	(0.1)
Adjusted1 basic
Continuing operations		2,833	144,927	2.0	260	144,267	0.2
Continuing and discontinued operations		2,833	144,927	2.0	372	144,267	0.3
Effect of dilutive securities
Options: Continuing operations		-	7,947	(0.1)	-	7,319	-
Options: Continuing and discontinued operations		-	7,947	(0.1)	-	7,319	-
Adjusted1 diluted
Continuing operations		2,833	152,874	1.9	260	151,586	0.2
Continuing and discontinued operations		2,833	152,874	1.9	372	151,586	0.3

¹ Adjusted results exclude adjusting items, as detailed in note 1(b)

 

	Adjusted Results1 2021 £'000	Adjusted Items1 2021 £'000	Statutory Results 2021 £'000	Adjusted Results1 2020 £'000	Adjusted Items1 2020 £'000	Statutory Results 2020 £'000
Earnings / (loss) per share attributable to owners of the parent
Fully diluted from continuing operations	1.9p	(1.0p)	0.9p	0.2p	(1.4p)	(1.2p)
Fully diluted from discontinued operations	-	-	-	0.1p	(8.9p)	(8.8p)
Fully diluted from continuing and discontinued	1.9p	(1.0p)	0.9p	0.3p	(10.3p)	(10.0p)

¹ Adjusted results exclude adjusting items, as detailed in note 1(b)

 

10 Goodwill

	Note				Group  £'000
Cost
At 1 January 2020					111,113
Closure of business	8				(11,009)
Elimination of goodwill					(18,995)
At 31 December 2020 and 31 December 2021					81,109
Accumulated impairment
At 1 January 2020					58,942
Impairment	8				11,009
Elimination of goodwill					(30,004)
At 31 December 2020 and 31 December 2021			39,947
Net book value
At 31 December 2020 and 31 December 2021			41,162

 

In the prior year, an impairment of £11,009,000 was recognised in the Xeim CGU, entirely related to the MarketMakers ('MM') business within that CGU. The MM telemarketing business ceased operations, and the goodwill cost and accumulated impairment was eliminated as at 31 December 2020. The impairment was included within discontinued operations as disclosed in note 8.

In addition to the impairment and subsequent elimination of goodwill relating to MM, the Group also eliminated £18,995,000 of goodwill in prior year that had been fully impaired in previous financial years relating to legacy brands and businesses that the Group no longer operated.

At 31 December 2021 a full impairment assessment has been carried out. No impairment is required for the carrying value of goodwill.

Goodwill by segment        

Each brand is deemed to be a cash generating unit ('CGU'), being the lowest level at which cash flows are separately identifiable. Goodwill is attributed to individual CGUs and has historically been reviewed at the operating segment level for the purposes of the annual impairment review as this is the level at which management monitors goodwill.

	Note	Xeim £'000	The Lawyer £'000	Total £'000
At 1 January 2020		36,197	15,974	52,171
Impairment charge	8	(11,009)	-	(11,009)
At 31 December 2020 and 31 December 2021		25,188	15,974	41,162

 

Impairment testing of goodwill and acquired intangible assets

At 31 December 2021, goodwill and acquired intangible assets (see note 11) were tested for impairment in accordance with IAS 36. In assessing whether an impairment of goodwill and acquired intangible assets is required, the carrying value of the segment is compared with its recoverable amount. Recoverable amounts are measured based on value-in-use ('VIU').

The Group estimates the VIU of its CGUs using a discounted cash flow model, which adjusts the cash flows for risks associated with the assets and discounts these using a pre-tax rate of 10.3% (2020: 12.8%). The discount rate used is consistent with the Group's weighted average cost of capital and is used across all segments, which are all based predominantly in the UK and considered to have similar risks and rewards.

The key assumptions used in calculating VIU are revenue growth, margin, Adjusted EBITDA growth, discount rate and the terminal growth rate. The Group has used the three-year plan forecast to 2024 for the first three years of the calculation and applied a terminal growth rate of 2.5% (2020: 2.5%). This timescale and the terminal growth rate are both considered appropriate given the nature of the Group's revenues. The Group's current year results have performed in line with the MAP23 strategy and hence this strategy has not been revised from the prior year. The three-year forecast to 2024 assumes achievement of MAP23 targets, with the forecast for 2024 continuing that strategy. The MAP23 targets were built, bottom-up during 2020 once the impact of Covid had become clear. The strategy focuses on investment and resource allocation on the Flagship 4, the four brands we consider our key drivers for organic revenue growth. Further details of the MAP23 plan can be found in the Strategy section of the 2020 Annual Report.

The key assumptions used in the calculations of VIU for each segment have been derived from a combination of experience and management's expectations of future growth rates in the business. The forecasts have been prepared following a review of the business where management has identified the key growth and focus areas which will deliver the targets, and conversely which areas of the business will be de-prioritised over that period. The forecasts reflect the transformed Group which is more focused and streamlined in order to deliver higher margins and profits.

The key assumptions and variables in this plan are sensitised in isolation and in combination. The main sensitivities applied to the key drivers are outlined below. As required by IAS 36, these sensitivities are applied in order to assess the effect of reasonably possible changes in the assumptions.

Sensitivity analysis has been performed on the VIU calculations, holding all other variables constant, to:

I.	apply a 10% reduction to forecast Adjusted EBITDA in each year of the modelled cash flows. No impairment would occur in either of the segments.
II.	apply a 4 percentage point increase in discount rate from 10.3% to 14.3%. No impairment would occur in either of the segments.
III.	reduce the terminal value growth rate from 2.5% to 1.5%. No impairment would occur in either of the segments.

The results of the impairment assessment and sensitivities applied indicate that no impairment to the goodwill of either CGU is required for the year ended 31 December 2021.

 

11 Other intangible assets

		Computer software £'000	Brands and publishing rights £'000	Customer relationships £'000	Separately acquired websites and content £'000	Total £'000
Cost
At 1 January 2020		19,248	2,072	13,030	3,216	37,566
Additions - separately acquired		292	-	-	-	292
Additions - internally generated		318	-	-	-	318
Disposals		(870)	(514)	(1,709)	-	(3,093)
Exchange differences		(5)	-	-	-	(5)
At 31 December 2020		18,983	1,558	11,321	3,216	35,078
Additions - separately acquired		396	-	-	-	396
Additions - internally generated		298	-	-	-	298
Disposals		(48)	(178)	-	-	(226)
Exchange differences		2	-	-	-	2
At 31 December 2021		19,631	1,380	11,321	3,216	35,548
Accumulated amortisation
At 1 January 2020		14,817	846	9,716	3,216	28,595
Amortisation charge for the year		1,944	165	1,671	-	3,780
Disposals		(535)	(203)	(1,465)	-	(2,203)
Exchange differences		(5)	-	-	-	(5)
At 31 December 2020		16,221	808	9,922	3,216	30,167
Amortisation charge for the year		1,335	114	977	-	2,426
Impairment charge for the year		55	25	-	-	80
Disposals		(48)	(178)	-	-	(226)
Exchange differences		(1)	-	-	-	(1)
At 31 December 2021		17,562	769	10,899	3,216	32,446
Net book value at 31 December 2021		2,069	611	422	-	3,102
Net book value at 31 December 2020		2,762	750	1,399	-	4,911
Net book value at 1 January 2020		4,431	1,226	3,314	-	8,971

 

In the current year, the Group disposed of intangible assets totalling a net book value of £nil.

During the prior year, the Group disposed of intangible assets totalling a net book value of £890,000. £60,000 of this was recognised in the consolidated statement of comprehensive income in continuing operations. The £60,000 loss on disposal of intangible assets in continuing operations related to software assets that were no longer in use by the business.

The remaining £830,000 of assets disposed were recognised in discontinued operations, along with proceeds of disposal of £150,000, resulting in a loss on disposal of £680,000 in discontinued operations. The £680,000 loss on disposal of intangible assets in discontinued operations resulted from the disposal relating to the MarketMakers ('MM') business. On 24 August 2020, the Group disposed of the MM branding and website with a net book value of £311,000 for proceeds of £150,000, resulting in a loss of £161,000. Customer relationships recognised on the acquisition of the MM business in 2017 with a net book value of £244,000 were disposed resulting in a loss of £244,000. MM software assets were disposed at a net book value of £275,000 resulting in a loss of £275,000. These disposals were effected in line with the closure of the MM telemarketing business following an adverse impact on trading performance caused by Covid.

Amortisation and impairment of intangible assets is included in net operating expenses in the consolidated statement of comprehensive income. The amortisation charge in continuing operations is £2,426,000 (2020: £3,280,000) and in discontinued operations is £nil (2020: £500,000). Amortisation on acquired intangible assets from business combinations is presented as an adjusting item in note 4 (see note 1(b) for further information). Total amortisation of £1,091,000 (2020: £1,949,000) on such assets is all amortisation on assets in the asset groups 'Brands and publishing rights', 'Customer relationships' and 'Separately acquired websites and content' of £1,091,000 (2020: £1,836,000) in addition to £nil (2020: £113,000) of amortisation on acquired intangible assets in the asset group 'Computer software'. These total amounts relate to continuing operations £1,091,000 (2020: £1,464,000) and discontinued operations £nil (2020: £485,000) as shown in note 4.

Other intangible assets are tested annually for impairment in accordance with IAS 36 at a segment level by comparing the carrying value with its recoverable amount. Please see note 10 for further details. During the current year, the Group impaired intangible assets totalling a net book value of £80,000. The £80,000 impairment charge relates to computer software and brand and publishing rights no longer in use by the business.

The Company has no intangible assets (2020: £nil).

 

12 Property, plant and equipment

		Leasehold improvements £'000	Fixtures and fittings £'000	Computer equipment £'000	ROU assets - property £'000	Total £'000
Cost
At 1 January 2020		2,112	618	1,902	5,501	10,133
Additions - separately acquired		-	14	209	1,704	1,927
Disposals		(2,112)	(564)	(1,061)	(2,122)	(5,859)
Exchange differences		-	-	(1)	(6)	(7)
At 31 December 2020		-	68	1,049	5,077	6,194
Additions - separately acquired		-	5	51	978	1,034
Disposals		-	-	(2)	-	(2)
Exchange differences		-	-	-	2	2
At 31 December 2021		-	73	1,098	6,057	7,228
Accumulated depreciation
At 1 January 2020		2,112	484	1,405	1,817	5,818
Depreciation charge for the year		-	55	240	1,912	2,207
Disposals		(2,112)	(499)	(940)	(1,529)	(5,080)
Exchange differences		-	-	(1)	(8)	(9)
At 31 December 2020		-	40	704	2,192	2,936
Depreciation charge for the year		-	21	138	1,649	1,808
Disposals		-	-	(2)	-	(2)
Exchange differences		-	-	-	2	2
At 31 December 2021		-	61	840	3,843	4,744
Net book value at 31 December 2021		-	12	258	2,214	2,484
Net book value at 31 December 2020		-	28	345	2,885	3,258
Net book value at 1 January 2020		-	134	497	3,684	4,315

 

In the current year, the Group disposed of tangible assets totalling a net book value of £nil.

During the prior year the Group disposed of tangible assets totalling a net book value of £779,000, which resulted in a loss on disposal of tangible assets of £779,000 (£177,000 in continuing operations and £602,000 in discontinued operations, see note 4).

In prior year, the £177,000 loss on disposal of tangible assets in continuing operations related to computer equipment assets that were no longer in use by the business (£53,000), and a proportion of the disposal of the MarketMakers' ROU asset that related to the continuing Really B2B business (£124,000).

In prior year, the £602,000 loss on disposal of tangible assets in discontinued operations related to disposal of computer equipment (£68,000), fixtures and fittings (£65,000) and a proportion of the disposal of the MarketMakers' ROU asset that related to the discontinued telemarketing business (£469,000). These disposals were effected in line with the closure of the MM telemarketing business following an adverse impact on trading performance caused by Covid.

Depreciation and impairment of property, plant and equipment is included in net operating expenses in the consolidated statement of comprehensive income.

The depreciation charge in continuing operations is £1,808,000 (2020: £1,992,000) and in discontinued operations is £nil (2020: £215,000).

The Company has no property, plant and equipment at 31 December 2021 (2020: £nil).

 

13 Investments

Company	Investments in subsidiary undertakings £'000
Cost
At 1 January 2020	151,134
Additions	251
At 31 December 2020	151,385
Additions	163
At 31 December 2021	151,548
Accumulated impairment
At 1 January 2020	61,000
Impairment charge for the year	25,393
At 31 December 2020	86,393
Impairment charge for the year	-
At 31 December 2021	86,393
Net book value at 31 December 2021	65,155
Net book value at 31 December 2020	64,992
Net book value at 1 January 2020	90,134

 

Impairment testing of the investment

As outlined in the tables below, the carrying value of the investment represents the Company's direct ownership of Centaur Communications Limited ('CCL'). At 31 December 2021, the investment was tested for impairment in accordance with IAS 36. In assessing whether an impairment of the investment is required, the carrying value of the investment is compared with its recoverable amount. The recoverable amount is measured based on value-in-use ('VIU'). Although the Company only has direct ownership of CCL, CCL in turn directly or indirectly controls the rest of the Group's subsidiaries. Therefore, the VIU of the Company's investment in CCL is supported by the operations of the entire Group.

In the prior year, the ongoing global pandemic and its impact on the economy and directly on the Group was identified as an indication of impairment of the Company's investment carrying value, particularly following the closure of the MarketMakers ('MM') telemarketing business. Therefore, a full impairment assessment was performed. An impairment of £25,393,000 was identified and recognised in the Company's statement of comprehensive income. After this impairment at 31 December 2020, the carrying value of the investment was supported by the underlying trade of the continuing Group.

In the current year, the ongoing global pandemic and its impact on the economy and directly on the Group was identified as an indication of impairment of the Company's investment carrying value. Therefore, a full impairment assessment has been performed.

The Group estimates the VIU using a discounted cash flow model, which adjusts the cash flows for risks associated with the assets and discounts these using a pre-tax rate of 10.3% (2020: 12.8%). The discount rate used is consistent with the Group's weighted average cost of capital.

The key assumptions used in calculating VIU are revenue growth, margin, Adjusted EBITDA growth, discount rate and the terminal growth rate. The Group has used its three-year plan forecast to 2024 for the first three years of the calculation and applied a terminal growth rate of 2.5% (2020: 2.5%). This timescale and the terminal growth rate are both considered appropriate given the nature of the Group's revenues. The Group's current year results have performed in line with the MAP23 strategy and hence this strategy has not been revised from the prior year. The three-year forecast to 2024 assumes achievement of MAP23 targets, with the forecast for 2024 continuing that strategy. The MAP23 targets were built, bottom-up during 2020 once the impact of Covid had become clear. The strategy focuses on investment and resource allocation on the Flagship 4, the four brands we consider our key drivers for organic revenue growth. Further details of the MAP23 plan can be found in the Strategy section of the 2020 Annual Report.

The assumptions used in the calculations of VIU have been derived based on a combination of experience and management's expectations of future growth rates in the business. The forecasts have been prepared following a review of the business where management has identified the key growth and focus areas which will deliver the targets, and conversely which areas of the business will be de-prioritised over that period. The forecasts reflect the transformed Group which is more focused and streamlined in order to deliver higher margins and profits.

Sensitivities are applied to each of the key assumptions and variables in isolation and in combination, in line with those sensitivities applied for goodwill impairment testing as outlined in note 10. As required by IAS 36, these sensitivities are applied in order to assess the effect of reasonably possible changes in the assumptions.

The results of the impairment assessment and sensitivities applied indicate that no impairment to the Company's investment in CCL is required for the year ended 31 December 2021.

Additions of £163,000 (2020: £251,000) related to capital contributions for share-based payments recharged to the Company's subsidiaries.

In order to simplify the Group structure, the process to close dormant companies commenced during the year.

The Group closed the following subsidiaries during the year:

Name	Proportion of ordinary shares and voting rights held (%)	Principal activities	Country of incorporation	Date of closure
E-consultancy Asia Pacific Pte Limited	100	Dormant	Singapore	6 June 2021
E-consultancy Australia Pty Limited	100	Dormant	Australia	5 April 2021
Mayfield Publishing Limited	100	Dormant	United Kingdom	21 December 2021
Your Business Magazine Limited	100	Dormant	United Kingdom	20 April 2021

 

Centaur Newco 2018 Limited was dissolved during the prior year. The company did not trade since incorporation.

 

At 31 December 2021, the Group has control over the following subsidiaries:

Name	Proportion of ordinary shares and voting rights held (%)	Principal activities	Country of incorporation
Centaur Communications Limited 1	100	Holding company and agency services	United Kingdom
Centaur Media USA Inc.2	100	Digital information, training and events	United States
Chiron Communications Limited	100	In liquidation	United Kingdom
E-consultancy LLC 2	100	Digital information, training and events	United States
E-consultancy.com Limited	100	Digital information, training and events	United Kingdom
Market Makers Incorporated Limited	100	In liquidation	United Kingdom
Pro-Talk Ltd	100	In liquidation	United Kingdom
Taxbriefs Holdings Limited	100	Holding company	United Kingdom
Taxbriefs Limited	100	In liquidation	United Kingdom
TheLawyer.com Limited	100	Digital information services	United Kingdom
Xeim Limited	100	Digital information services	United Kingdom

¹     Directly owned by Centaur Media Plc

²     Registered address is 251 Little Falls Drive, Wilmington, DE19808, USA. Functional currency is USD

The registered address of all subsidiary companies, except for those identified above, is Floor M, 10 York Road, London, SE1 7ND, United Kingdom. The functional currency of all subsidiaries is GBP except for those identified above. The consolidated financial information incorporates the financial information of all entities controlled by the Company at 31 December 2021.

 

14 Deferred tax

The movement on the deferred tax account for the Group is shown below:

	Accelerated capital allowances £'000	Other temporary differences £'000	Tax losses £'000	Total £'000
Net asset / (liability) at 1 January 2020	626	(368)	716	974
Adjustments in respect of prior periods	66	174	33	273
Recognised in the statement of comprehensive income	(9)	180	792	963
Net asset / (liability) at 31 December 2020	683	(14)	1,541	2,210
Adjustments in respect of prior periods	(42)	(55)	(46)	(143)
Recognised in the statement of comprehensive income	69	110	(4)	175
Recognised in the statement of changes in equity	-	118	-	118
Net asset at 31 December 2021	710	159	1,491	2,360

 

Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net.

	2021 Group £'000	2020 Group £'000
Deferred tax assets	2,488	2,449
Deferred tax liabilities	(128)	(239)
	2,360	2,210

 

At the year end, the Group has unused tax losses of £5,961,000 (2020: £8,104,000) available for offset against future profits. A deferred tax asset of £1,491,000 (2020: £1,541,000) has been recognised in respect of £5,961,000 (2020: £8,104,000) of such tax losses. The Group has concluded that the deferred tax asset will be recoverable using the estimated future taxable profit based on the FY22-24 3YP forecast. The Group is expected to generate taxable profits from 2022 onwards. The losses can be carried forward indefinitely and have no expiry date as long as the companies that have the losses continue to trade.

The Company had deferred tax assets on share options under long-term incentive plans of £190,000 at 31 December 2021 (2020: £68,000).

Deferred tax assets and liabilities are expected to be materially utilised after 12 months.

 

15 Trade and other receivables

	Note	2021 Group £'000	2020 Group £'000	2021 Company £'000	2020 Company £'000
Amounts falling due within one year
Trade receivables		5,475	5,211	-	-
Less: expected credit loss	26	(564)	(993)	-	-
Trade receivables - net		4,911	4,218	-	-
Receivables from subsidiaries		-	-	-	34,973
Receivable from Employee Benefit Trust		-	-	-	560
Other receivables		92	162	34	77
Prepayments		981	1,240	127	107
Accrued income		75	161	-	-
		6,059	5,781	161	35,717

 

		2021 Group £'000	2020 Group £'000	2021 Company £'000	2020 Company £'000
Amounts falling due after one year
Other receivables		319	515	41	237
Receivable from Employee Benefit Trust		-	-	1,156	-
		319	515	1,197	237

 

Trade receivables included £114,000 and the expected credit loss included £114,000 in relation to discontinued operations as at 31 December 2020. No amounts relate to discontinued operations as at 31 December 2021.

Receivables from subsidiaries are unsecured, have no fixed due date and bear interest at an annual rate of 3.45% (2020: 2.49%). In preparation for liquidation of certain Group subsidiaries (see note 13) the Company settled receivables and payables with these subsidiaries during the year.

The receivable from Employee Benefit Trust is unsecured, has no fixed due date and does not bear interest.

Other receivables due after one year include £278,000 (2020: £278,000) in relation to a deposit on the London property lease which is fully refundable at the end of the lease term.

 

16 Cash and cash equivalents

	2021 Group £'000	2020 Group £'000
Cash at bank and in hand	13,065	8,300

The Company had no cash and cash equivalents at 31 December 2021 (2020: £nil).

 

17 Trade and other payables

	2021 Group £'000	2020 Group £'000	2021 Company £'000	2020 Company £'000
Trade payables	1,070	219	-	-
Payables to subsidiaries	-	-	29,397	60,044
Accruals	8,112	5,652	496	406
Social security and other taxes	886	1,274	-	-
Other payables	1,337	1,574	-	7
	11,405	8,719	29,893	60,457

 

Payables to subsidiaries are unsecured, have no fixed date of repayment and bear interest at an annual rate of 3.45% (2020: 2.49%). In preparation for liquidation of certain Group subsidiaries (see note 13) the Company settled receivables and payables with these subsidiaries during the year.

In response to Covid the Government allowed payments of VAT between 20 March 2020 and 30 June 2020 to be deferred. Under this scheme, in prior year, the Group deferred a total of £1,000,000 VAT payments, which is included in social security and other taxes above. The Group re-paid the full amount in instalment payments from March to November 2021.

At 31 December 2020, trade payables and other payables included £61,000 and £244,000 respectively, relating to discontinued operations. No amounts relate to discontinued operations as at 31 December 2021.

The Directors consider that the carrying amount of the trade payables approximates their fair value.

 

18 Lease liabilities

The lease liability currently held by the Group relates to a property lease, for which a corresponding right-of-use ('ROU') asset is held on the consolidated statement of financial position within property, plant and equipment and detailed in note 12.

	2021 Group £'000	2020 Group £'000
At 1 January	3,375	4,260
Remeasurement of lease liabilities	978	1,704
Interest expense	67	124
Cash outflow	(2,036)	(1,925)
Disposal on exit of lease	-	(788)
At 31 December	2,384	3,375
Current	1,884	1,969
Non-current	500	1,406
At 31 December	2,384	3,375

 

The lease liability for the Group's property in London was remeasured during the year upon reassessment of the lease term, resulting in an increase of £978,000. The amount of the remeasurement of the lease liability was recognised as an adjustment to the ROU asset.

During the prior year, the lease liability for the Group's property in London was remeasured upon reassessment of the lease term and renegotiation of payment terms due to Covid, resulting in an increase of £1,704,000. The amount of the remeasurement of the lease liability was recognised as an adjustment to the ROU asset.

The lease liability for the Group's property in Portsmouth, which was the office for the MarketMakers' business, was fully released during prior year upon the cessation of the MarketMakers' telemarketing business.

The gain on disposal of the lease liability was recognised in the consolidated statement of comprehensive income in the prior year, with £165,000 recognised in continuing operations for the proportion of the liability related to the continuing Really B2B business, and £623,000 recognised in discontinued operations related to the proportion of the liability that related to the discontinued telemarketing business. The corresponding ROU asset was also disposed of (see note 12), with the resulting net gain on disposal of £195,000 being materially offset by the exit penalty incurred.

 

19 Deferred income

	2021 Group £'000	2020 Group £'000
Deferred income	7,846	7,048

 

Deferred income arises on contracts with customers where revenue recognition criteria has not yet been met. See note 1(e) for further details.

 

20 Current tax assets

	2021 Group £'000	2020 Group £'000
Corporation tax receivables	195	182

 

The Company had no corporation tax receivables or payables at 31 December 2021 (2020: £nil).

 

21 Provisions

Group	Restructuring £'000	Other £'000	Total £'000
At 1 January 2020	-	50	50
Additions	1,031	-	1,031
Utilised in the year	(1,031)	(50)	(1,081)
At 31 December 2020 and 31 December 2021	-	-	-

 

Restructuring

During the prior year, a restructuring provision of £793,000 was recognised in relation to restructuring the MarketMakers business following a sharp fall in revenue as several major customers were hit by disruption in their own markets. A further £238,000 was provided in relation to restructuring other parts of the wider Centaur group due to the adverse impact of Covid. The provision was fully utilised in the second half of 2020. The associated expense was recognised within exceptional costs and presented as adjusting items as disclosed within note 4. In 2020, the staff related restructuring costs in continuing operations was £238,000 and in discontinued operations was £793,000.

Other

The other provision in the prior year related to the dilapidation provision which was acquired on the acquisition of MarketMakers in relation to the building leased by the company in Portsmouth. This provision was utilised during the prior year as part of the exit of the Portsmouth lease upon cessation of MarketMakers' telemarketing business. The associated expense was recognised within discontinued exceptional costs and presented as adjusting items as disclosed within note 4.

There were no provisions as at 31 December 2021.

 

22 Equity

Ordinary shares of 10p each	Nominal value £'000	Number of shares
Authorised share capital - Group and Company
At 1 January 2020, 31 December 2020 and 31 December 2021	20,000	200,000,000
Issued and fully paid share capital - Group and Company
At 1 January 2020, 31 December 2020 and 31 December 2021	15,141	151,410,226

 

Deferred shares reserve

The deferred shares reserve represents 800,000 (2020: 800,000) deferred shares of 10p each, which carry restricted voting rights and have no right to receive a dividend payment in respect of any financial year.

Reserve for shares to be issued

The reserve for shares to be issued is in respect of equity-settled share-based compensation plans. The movements in the reserve for shares to be issued represent the total charges for the year relating to equity-settled share-based payment transactions with employees as accounted for under IFRS 2 less transfers from this reserve to retained earnings for shares exercised or lapsed during the year.

During the prior year a transfer of £957,000 was made from the reserve to retained earnings for lapsed share awards relating to the TSR performance condition of long-term incentive plans.

Own shares reserve

The own shares reserve represents the value of shares held as treasury shares and in the Employee Benefit Trust. At 31 December 2021, 4,550,179 (2020: 4,550,179) 10p ordinary shares are held in treasury and 2,064,185 (2020: 1,948,492) 10p ordinary shares are held in the Employee Benefit Trust.

The Employee Benefit Trust issued 981,783 (2020: 2,038,736) shares to meet obligations arising from share-based rewards to employees that had vested and were exercised in the current year (2020: vested in 2020 and 2019 and were exercised in 2020). The shares were issued at a historical weighted average cost of 92.9p (2020: 61.3p) per share. The total cost of £912,000 (2020: £1,341,000) has been recognised as a reduction in the own shares reserve in other reserves in equity.

During 2021, the Employee Benefit Trust purchased 1,097,476 (2020: nil) ordinary shares in order to meet future obligations arising from share-based rewards to employees. The shares were acquired at an average price of 43.8p per share, with prices ranging from 39.9p to 50.8p. The total cost of £481,000 (2020: £nil) has been recognised in the own shares reserve in equity.

During 2020, 2,414,434 shares were transferred out of treasury to the Employee Benefit Trust in order to meet future obligations arising from share-based rewards to employees. The shares were transferred from treasury at the historical weighted average cost of £2,195,000 (90.9p per share) and acquired by the Employee Benefit Trust at the market value of £604,000 (25.0p per share). The difference between the historical weighted average cost and the market value of £1,591,000 has been eliminated on consolidation.

 

23 Share-based payments

The Group's share-based payment expense for the year by plan:

	2021 £'000	2020 £'000
Long-Term Incentive Plan ('LTIP')	488	537
Share Incentive Plan ('SIP')	7	4
Share-based payment expense	495	541

 

The share-based payment expense is presented as an adjusting item in note 4 (see note 1(b) for further information) and is included in net operating expenses in the consolidated statement of comprehensive income.

The Group's share-based payment plans upon vesting are equity-settled.

The share-based payment expense includes social security costs which are settled in cash upon exercise.

Long-Term Incentive Plan

 

The Group operates a Long-Term Incentive Plan ('LTIP') for Executive Directors and selected senior management. This is an existing incentive policy and was approved by shareholders at the 2016 AGM.  The share awards are valued at date of grant and the consolidated statement of comprehensive income is charged over the vesting period, taking into account the number of shares expected to vest. Full details on how the plan operates are included in the Remuneration Report.

During the year LTIP awards were granted to Executive Directors and selected senior management. Details of the performance conditions of these awards are disclosed in the Remuneration Report.

A reconciliation of the movements in LTIP awards is shown below.

	LTIP 2016	LTIP 2016	LTIP 2016		LTIP 2016	LTIP 2016
Grant date	29.04.2021	25.03.2021	30.06.2020		03.10.2019	25.10.2019
Number of awards
Balance at 1 January 2021	-	-	2,074,782		995,259	48,050
Granted during the year	1,187,076	1,798,489	-		-	-
Forfeited during the year	(82,025)	(161,198)	(187,272)		-	-
Exercised during the year	-	-	-		-	-
Lapsed during the year	-	-	-		-	-
Balance at 31 December 2021	1,105,051	1,637,291	1,887,510		995,259	48,050
Exercisable at 31 December 2021	-	-	-		-	-
Weighted average share price at date of exercise (p)	-	-	-		-	-
Balance at 1 January 2020	-	-	-		995,259	128,133
Granted during the year	-	-	2,074,782		-	-
Forfeited during the year	-	-	-		-	(80,083)
Exercised during the year	-	-	-		-	-
Lapsed during the year	-	-	-		-	-
Balance at 31 December 2020	-	-	2,074,782		995,259	48,050
Exercisable at 31 December 2020	-	-	-		-	-
Weighted average share price at date of exercise (p)	-	-	-		-	-
No options expired during the year (2020: nil). These awards were priced using the following models and inputs:
Grant date	29.04.2021	25.03.2021	30.06.2020		03.10.2019	25.10.2019
Share price at grant date	39.78	39.50	24.00		41.50	32.50
Fair value	29.09	30.10	14.80		22.77	16.25
Vesting date	29.04.2024	25.03.2024	29.06.2023		02.10.2022	05.04.2022
Exercise price (p)	£nil	£nil	£nil		£nil	£nil
Expected volatility (%)	48.9	48.0	47.0		40.0	-
Expected dividend yield (%)	1.29	1.30	-		-	-
Risk free interest rate (%)	(0.12)	(0.07)	(0.09)		0.34	-
Valuation of model used	Stochastic	Stochastic	Stochastic		Stochastic	*

 

	LTIP 2016	LTIP 2016	LTIP 2016		LTIP 2016	LTIP 2016
Grant date	25.07.2019	06.04.2018	06.04.2018		24.04.2017	07.04.2017
Number of awards
Balance at 1 January 2021	2,156,512	1,246,879	981,776		-	-
Granted during the year	-	-	-		-	-
Forfeited during the year	(165,598)	-	-		-	-
Exercised during the year	-	-	(981,776)		-	-
Lapsed during the year	-	(1,246,879)	-		-	-
Balance at 31 December 2021	1,990,914	-	-		-	-
Exercisable at 31 December 2021	-	-	-		-	-
Weighted average share price at date of exercise (p)	-	-	42.01		-	-
Balance at 1 January 2020	2,236,640	1,246,879	1,963,191		675,764	381,557
Granted during the year	-	-	-		-	-
Forfeited during the year	(80,128)	-	-		-	-
Exercised during the year	-	-	(981,415)		(675,764)	(381,557)
Lapsed during the year	-	-	-		-	-
Balance at 31 December 2020	2,156,512	1,246,879	981,776		-	-
Exercisable at 31 December 2020	-	-	-		-	-
Weighted average share price at date of exercise (p)	-	-	24.19		25.50	26.65
No options expired during the year (2020: nil). These awards were priced using the following models and inputs:
Grant date	25.07.2019	6.04.2018	6.04.2018		24.04.2017	07.04.2017
Share price at grant date	46.00	50.20	50.20		45.75	40.75
Fair value	23.00	28.65	25.10		24.46	21.08
Vesting date	05.04.2022	06.04.2021	06.04.2021		24.04.2020	07.04.2020
Exercise price (p)	£nil	£nil	£nil		£nil	£nil
Expected volatility (%)	-	43.5	43.5		45.4	45.4
Expected dividend yield (%)	-	-	6.47		-	-
Risk free interest rate (%)	-	0.86	0.86		0.12	0.12
Valuation of model used	*	Stochastic	Black-Scholes		Stochastic	Stochastic

 

*Shares granted on 25 October 2019 and 25 July 2019 were nil-cost options with non-market-based performance conditions. These plans were valued based on the estimated vesting value of the non-market-based conditions and expected forfeiture rates

 

The plans above also include non-market based performance conditions. These elements of the plans were valued based on the estimated vesting value of the non-market based conditions and expected forfeiture rates.

The share awards outstanding at 31 December 2021 had a weighted average exercise price of £nil (2020: £nil) and a weighted remaining life of 1.3 years (2020: 1.3 years).

Senior Executive Long-Term Incentive Plan ('SELTIP')

The Centaur Media Plc 2010 Senior Executive Long-Term Incentive Plan (the 'SELTIP') was introduced during 2011 and was approved by shareholders at the 2010 AGM. This is not an HMRC approved scheme and vests over a three-year period with service and performance conditions. Awards were granted under this plan in 2011 for no consideration and no exercise price. This plan is closed to new awards.

Awards of bonus units were made in 2013 as summarised in the following table:

Financial year	Threshold  profit	PBTA achieved	Profit growth	SELTIP contribution	Total  bonus pool	Bonus pool allocated*	Number of shares awarded in total**
2013	£8.0m	£8.6m	£0.6m	30%	£0.1m	£0.1m	118,851

*     The Remuneration Committee did not allocate the entire bonus pool in 2013.

**    Awards were only made to participants with continuing employment.

These awards were priced using the following models and inputs:

	SELTIP 2013
Grant date	15.09.11
Share price at grant date	33.88
Fair value	23.76
Vesting date	17.09.14
Exercise price (p)	£nil
Number of awards
Balance at 1 January 2020, 31 December 2020 and 31 December 2021	6,862
Exercisable at 31 December 2020 and 31 December 2021	6,862
Average share price at date of exercise (p)	-

 

There were no grants, forfeitures, exercises, lapses, or expired options during the current and prior years.

The share awards outstanding at 31 December 2021 had a weighted average exercise price of £nil (2020: £nil) and a weighted remaining life of 0.7 years (2020: 1.7 years).

Share Incentive Plan

The Group has a Share Incentive Plan, which is an HMRC approved Tax-Advantaged plan, which provides employees with the opportunity to purchase shares in the Company. This plan is open to all employees who have been employed by the Group for more than 3 months.  Employees may invest up to £1,800 per annum (or 10% of their salary if less) in ordinary shares in the Company, which are held in trust. The shares are purchased in open market and are held in trust for each employee. The shares can be withdrawn with tax paid at any time, or tax-free after five years. The Group matches the contribution with a ratio of one share for every two purchased.  Other than continuing employment, there are no other performance conditions attached to the plan.

The Executive Directors are eligible to participate in the Share Incentive Plan, as are all employees of the Group.

		2021	2020
Number of outstanding matching shares		57,495	58,117

 

24 Dividends

	2021 £'000	2020 £'000
Equity dividends
Final dividend for 2020: 0.5p per 10p ordinary share	726	-
Interim dividend for 2021: 0.5p per 10p ordinary share	724	-
	1,450	-

 

The total dividend pertaining to 2020 was the final dividend for the year ended 31 December 2020 of £726,000 (0.5p share). This dividend was paid on 28 May 2021.

An interim dividend for the six months ended 30 June 2021 of £724,000 (0.5p per ordinary share) was paid on 22 October 2021 to all ordinary shareholders on the register as at close of business on 8 October 2021.

A final dividend for the year ended 31 December 2021 of £725,000 (0.5p share) is proposed by the Directors and subject to shareholder approval at the Annual General Meeting, will be paid on 27 May 2022 to all ordinary shareholders on the register at the close of business on 13 May 2022.

During the prior year, the Company received a dividend of £40,000,000 from Centaur Communications Limited. No dividends were received in the current year.

 

25 Notes to the cash flow statement

Reconciliation of profit / (loss) for the year to cash generated from operating activities:

	Note	2021 Group £'000	2020 Group £'000	2021 Company £'000	2020 Company £'000
Profit / (loss) for the year		1,417	(14,428)	(2,325)	(27,828)
Adjustments for:
Tax	7	(56)	(1,232)	(512)	(433)
Net interest expense	2,6	260	332	1,182	838
Depreciation	12	1,808	2,207	-	-
Impairment of property, plant and equipment	12	-	-	-	-
Amortisation of intangible assets	11	2,426	3,780	-	-
Impairment of intangible assets	11	80	-	-	-
Impairment of goodwill	10	-	11,009	-	-
Loss on disposal of assets and liabilities	11,12,18	-	731	-	-
Loss on impairment of investment	13	-	-	-	25,393
Share-based payment charge	5,23	495	541	325	(15)
Dividends waived		2	-	2	-
Dividends received from subsidiaries	24	-	-	-	40,000
Unrealised foreign exchange differences		(65)	83	-	-
Changes in working capital:
(Increase) / decrease in trade and other receivables		(259)	4,445	34,359	(34,050)
Increase / (decrease) in trade and other payables		2,615	(3,732)	(31,389)	(3,750)
Increase / (decrease) in deferred income		798	(1,671)	-	-
Cash generated from operating activities		9,521	2,065	1,642	155

 

Reconciliation of movements of liabilities and associated assets to cash flows arising from financing activities:

	Note	Group and Company Net borrowings  £'000	Group Lease liabilities £'000
At 1 January 2020		(132)	4,260
Changes from financing cash flows:
Loan arrangement fee		(25)	-
Interest paid		(130)	-
Repayment of obligations under finance leases	18	-	(1,925)
		(155)	(1,925)
Other changes:
Interest expense	6	215	124
Remeasurement of lease liabilities	18	-	1,704
Disposal on exit of lease	18	-	(788)
		215	1,040
Balance at 31 December 2020		(72)	3,375
Changes from financing cash flows:
Loan arrangement fees		(107)	-
Interest paid		(87)	-
Repayment of obligations under finance leases	18	-	(2,036)
		(194)	(2,036)
Other changes:
Interest expense	6	194	67
Remeasurement of lease liabilities	18	-	978
		194	1,045
Balance at 31 December 2021		(72)	2,384

 

Net borrowings is comprised of a loan arrangement fee debtor of £75,000 (2020: £79,000) presented within other receivables on the statement of financial position and a commitment fee creditor of £3,000 presented as bank and other borrowings on the statement of financial position (2020: £7,000). The movements of this asset and liability together give rise to cash flows from financing activities relating to the £25m revolving credit facility.

 

26 Financial instruments and financial risk management

Financial risk management

The Board has overall responsibility for the determination of the Group's risk management policies. The Board receives monthly reports from the Chief Financial Officer through which it reviews the effectiveness of policies and processes put in place to manage risk.  The Board sets policies that reduce risk as far as possible without unduly affecting the operating effectiveness of the Group.

 

The Group's activities expose it to a variety of financial risks, including interest rate risk, credit risk, liquidity risk, capital risk and currency risk.  Of these, credit risk and liquidity risk are considered the most significant.  This note presents information about the Group's exposure to each of the above risks.

 

Categories of financial instruments

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1(s). All financial assets and liabilities are measured at amortised cost.

	Note	2021 £'000	2020 £'000
Financial assets
Cash and bank balances	16	13,065	8,300
Trade receivables - net	15	4,911	4,218
Other receivables	15	411	677
		18,387	13,195
Financial liabilities
Lease liabilities	18	2,384	3,375
Trade payables	17	1,070	219
Accruals	17	8,112	5,652
Provisions	21	-	-
Other payables	17	1,337	1,574
		12,903	10,820

 

Credit risk

The Group's principal financial assets are trade and other receivables (note 15).  Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.  The carrying amount of financial assets recorded in the financial information, which is net of impairment losses, represents the Group's maximum exposure to credit risk in relation to financial assets. Credit risk is managed on a Group basis.  The Group does not consider that it is subject to any significant concentrations of credit risk.

 

Trade receivables

Trade receivables consist of a large number of customers, of varying sizes and spread across diverse industries and geographies. The Group does not have significant exposure to credit risk in relation to any single counterparty or group of counterparties having similar characteristics. The Group's exposure to credit risk is influenced predominantly by the circumstances of individual customers as opposed to industry or geographic trends.

The business assesses the credit quality of customers based on their financial position, past experience and other qualitative and quantitative factors. The Group's policy requires customers to pay in accordance with agreed payment terms, which are generally 30 days from the date of invoice. Under normal trading conditions, the Group is exposed to relatively low levels of risk and potential losses are mitigated as a result of a diversified customer base and the requirement for events and certain premium content subscription invoices to be paid in advance of service delivery.

The credit control function within the Group's finance department monitors the outstanding debts of the Group and trade receivable balances are analysed by the age and value of outstanding balances.  

Any trade receivable balance which is objectively determined to be uncollectible is written off the ledger, with a charge taken through the consolidated statement of comprehensive income. The Group also records an allowance for the lifetime expected credit loss on its trade receivables balances under the simplified approach as mandated by IFRS 9. The impairment model for trade receivables, under IFSR 9, requires the recognition of impairment provisions based on expected lifetime credit losses rather than only incurred ones. All balances past due are reviewed with those greater than 90 days past due considered to carry a higher level of credit risk. Refer to note 1(s) for further details on the approach to allowance for expected credit losses on trade receivables.

The allowance for expected lifetime credit losses, and changes to it, are taken through administrative expenses in the consolidated statement of comprehensive income.

The ageing of trade receivables according to their original due date is detailed below:

	2021 Gross £'000	2021 Provision £'000	2020 Gross £'000	2020 Provision £'000
Not due	3,488	(43)	3,265	(76)
0-30 days past due	972	(25)	598	(26)
31-60 days past due	161	(9)	140	(10)
61-90 days past due	146	(16)	167	(39)
Over 90 days past due	708	(471)	1,041	(842)
	5,475	(564)	5,211	(993)

 

Trade receivables that are less than 3 months past due are generally not considered to be impaired, except where specific credit issues or delinquency in payments have been identified. In making the assessment that unprovided trade receivables are not impaired, the Directors have considered the quantum of gross trade receivables which relate to amounts not yet included in income, including amounts in deferred income and amounts relating to VAT. The credit quality of trade receivables not yet due nor impaired has been assessed as acceptable.  

The movement in the allowance for expected credit losses on trade receivables is detailed below:

	2021 Continuing £'000	2021 Discontinued £'000	2021 Total £'000	2020 Continuing £'000	2020 Discontinued £'000	2020 Total £'000
Balance at 1 January	879	114	993	729	378	1,107
Utilised	(276)	(114)	(390)	(134)	(24)	(158)
Additional provision charged to the statement of comprehensive income	-	-	-	255	-	255
Release	(39)	-	(39)	-	(241)	(241)
Written back	-	-	-	29	1	30
Balance at 31 December	564	-	564	879	114	993

 

The Group's policy requires customers to pay in accordance with agreed payment terms which are generally 30 days from the date of invoice or in the case of live events related revenue no less than 30 days before the event. All credit and recovery risk associated with trade receivables has been provided for in the consolidated statement of financial position. The Group's policy for recognising an impairment loss is given in note 1(s)(ii). Impairment losses are taken through administrative expenses in the consolidated statement of comprehensive income.

The remaining provision in prior year of £114,000 for discontinued operations related to MarketMakers trade debtors which was fully provided for as at 31 December 2020. This was fully utilised in the current year.

The Directors consider the carrying value of trade and other receivables approximates to their fair value.   

Cash and cash equivalents

Banks and financial institutions are independently rated by credit rating agencies. We choose only to deal with those with a minimum 'A' rating. We determine the credit quality for cash and cash equivalents to be strong.

Other receivables

Other receivables are neither past due nor impaired. These are primarily made up of sundry receivables, including employee-related debtors and receivables in respect of distribution arrangements.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages liquidity risk by maintaining adequate reserves and working capital credit facilities, and by continuously monitoring forecast and actual cash flows. In March 2021, the Group terminated its existing £25m multi-currency revolving credit facility with NatWest and Lloyds which was due to run to November 2021. It has been replaced by a new multi-currency revolving credit facility with NatWest which runs to March 2024 with the option to extend for two periods of one year each. The new facility consists of a £10m committed facility and an additional £15m uncommitted accordion option, both of which can be used to cover the Group's working capital and general corporate needs. As at 31 December 2021, the Group had cash of £13,065,000 (2020: £8,300,000) with a full undrawn loan facility of £25m (2020: full undrawn loan facility of £25m).

The following tables detail the financial maturity for the Group's financial liabilities:

	Book value £'000	Fair value £'000	Less than 1 year £'000	2-5 years £'000
At 31 December 2021
Financial liabilities
Interest bearing	2,384	2,384	1,884	500
Non-interest bearing	10,519	10,519	10,519	-
	12,903	12,903	12,403	500
At 31 December 2020
Financial liabilities
Interest bearing	3,375	3,375	1,969	1,406
Non-interest bearing	7,445	7,445	7,445	-
	10,820	10,820	9,414	1,406

 

The Directors consider that book value is materially equal to fair value.

The book value of primary financial instruments approximates to fair value where the instrument is on a short maturity or where they bear interest at rates that approximate to the market.

The following table details the level of fair value hierarchy for the Group's financial assets and liabilities:

Financial Assets		Financial Liabilities
Level 1		Level 3
Cash and bank balances		Lease liabilities
Level 3		Trade payables
Trade receivables - net		Accruals
Other receivables		Provisions
		Other payables
		Borrowings*

*Borrowings are purely in relation to the Group's revolving credit facility which is discussed above. The amount drawn down from this facility at 31 December 2021 was £nil (2020: £nil).

All trade and other payables are due for payment in one year or less, or on demand.

Interest rate risk

The Group has no significant interest-bearing assets but is exposed to interest rate risk when it borrows funds at floating interest rates through its revolving credit facility. Borrowings issued at variable rates expose the Group to cash flow interest rate risk.  The Group evaluates its risk appetite towards interest rate risks regularly to manage interest rate risk in relation to its revolving credit facility if deemed necessary.

 

The Group did not enter any hedging transactions during the current or prior year and as at 31 December 2021 the only floating rate to which the Group was exposed was LIBOR. The Group's exposure to interest rates on financial assets and financial liabilities is detailed in the liquidity risk section of this note.

 

Interest rate sensitivity

The Group has not drawn down from its revolving credit facility in the current year or prior year therefore a sensitivity analysis has not been performed.

Capital risk

The Group manages its capital to ensure that all entities in the Group will be able to continue as a going concern while maximising return to stakeholders, as well as sustaining the future development of the business.

The capital structure of the Group consists of net cash, which includes cash and cash equivalents (note 16), and equity attributable to the owners of the parent, comprising issued share capital (note 22), other reserves and retained earnings. The Board also considers the levels of own shares held for employee share plans and the ability to issue new shares for acquisitions, in managing capital risk in the business.

For the whole of 2020, the Group benefited from its banking facilities, renewed in November 2019 which ran until November 2021 with an option to extend for a further two periods of one year each. Interest was calculated on LIBOR plus a margin dependent on the Group's net leverage position, which was re-measured quarterly in line with covenant testing. The Group's borrowings were subject to financial covenants tested quarterly. The principal financial covenants under the facility were the ratio of net debt to Adjusted EBITDA (see note 1(b) for explanation and reconciliation of Adjusted EBITDA) would not exceed 2.5:1 and the ratio of EBITDA to net finance charges would not be less than 4:1. In July 2020, the Group agreed with the banks to waive leverage and interest cover covenants up to, and including, the testing periods to 30 September 2021. This was subject to minimum liquidity tests which were reported monthly. At no point during the prior year did the Group breach its covenants or its minimum liquidity tests.

From March 2021, the Group benefited from a new banking facility with NatWest, which featured a committed £10m facility and an additional uncommitted £15m accordion option, both of which can be used to cover the Group's working capital and general corporate needs. The facility is available until March 2024 with an option to extend for a further two periods of one year each. Interest is calculated on SONIA plus a margin dependent on the Group's net leverage position, which is re-measured quarterly in line with covenant testing. The Group's borrowings are subject to financial covenants tested quarterly. The principal financial covenants under the facility are that the ratio of net debt to Adjusted EBITDA (see note 1(b) for explanation and reconciliation of Adjusted EBITDA) shall not exceed 2.5:1 and the ratio of EBITDA to net finance charges shall not be less than 4:1. At no point during the year did the Group breach its covenants.

Currency risk

Substantially all the Group's net assets are in the United Kingdom. Most of the revenue and profits are generated in the United Kingdom and consequently foreign exchange risk is limited. The Group continues to monitor its exposure to currency risk, particularly as the business expands into overseas territories such as North America, however the results of the Group are not currently considered to be sensitive to movements in currency rates.

 

27 Pension schemes

The Group contributes to individual and collective money purchase pension schemes in respect of Directors and employees once they have completed the requisite period of service. The charge for the year in respect of these defined contribution schemes is shown in note 5. Included within other payables is an amount of £76,000 (2020: £77,000) payable in respect of the money purchase pension schemes.

 

28 Capital commitments

At 31 December 2021, the Group had no capital commitments (2020: £nil).

 

29 Related party transactions

Group

Key management compensation is disclosed in note 5. There were no other material related party transactions for the Group in the current or prior year.

Company

The Company had the following transactions with subsidiaries during the year.

i) Interest

During the year, interest was recharged from subsidiary companies as follows:

	2021	2020
	£'000	£'000
Net interest payable	988	623

 

There were no borrowings at the year end.

The balances outstanding with subsidiary companies are disclosed in notes 15 and 17.

ii) Dividends

 

During the prior year, the Company received a dividend of £40,000,000 from its subsidiary, Centaur Communications Limited. No dividends were received in the current year.

There were no other material related party transactions for the Company in the current or prior year.

Audit exemption

For the year ended 31 December 2021, the Company has provided a guarantee pursuant to sections 479A-C of Companies Act 2006 over the liabilities of the following subsidiaries and, as such, they are exempt from the requirements of the Act relating to the audit of individual financial information, or preparation of individual financial information, as appropriate, for this financial year.

Name	Company number	Outstanding liabilities £'000
Centaur Communications Limited	01595235	21,530
Chiron Communications Limited	01081808	-
E-consultancy.com Limited	04047149	2
Market Makers Incorporated Limited	05063707	-
Pro-Talk Limited	03939119	-
Taxbriefs Holdings Limited	03572069	-
Taxbriefs Limited	01247331	-
TheLawyer.com Limited	11491880	2,101
Xeim Limited	05243851	11,117

 

See note 13 for changes to subsidiary holdings during the year.

30 Events after the reporting date

No material events have occurred after the reporting date.

 

FIVE YEAR RECORD (UNAUDITED)

	2017*	2018*	2019	2020	2021
Revenue (£m)	64.7	50.3	39.6	32.4	39.1
Operating (loss) / profit (£m)	(0.3)	(20.3)	(7.8)	(2.3)	1.6
Adjusted operating profit / (loss) (£m)	4.1	(2.2)	(1.2)	-	3.2
Adjusted operating profit / (loss) margin	6%	(4%)	(3%)	-	8%
(Loss) / profit before tax (£m)	(0.7)	(20.5)	(8.1)	(2.6)	1.4
Adjusted profit / (loss) before tax (£m)	3.7	(2.4)	(1.5)	(0.3)	3.0
Adjusted diluted EPS (pence)	1.8	(1.4)	0.3	0.3	1.9
Ordinary dividend per share (pence)	3.0	3.0	1.5	0.5	1.0
Net operating cash flow (£m)	12.1	5.6	4.7	2.1	9.5
Average permanent headcount (FTE)	589	758	317	282	264
Revenue per head (£'000)	110	66	125	115	148

 

Revenue by type	2017* £m	2018* £m	2019 £m	2020 £m	2021 £m
Premium Content	19.1	14.4	14.4	13.2	12.9
Marketing Services	1.9	4.5	4.3	2.9	3.3
Training and Advisory	8.0	8.0	7.6	8.5	12.6
Events	18.7	6.5	6.4	2.5	3.8
Marketing Solutions	9.3	4.6	4.6	4.2	5.0
Recruitment Advertising	3.5	2.7	2.3	1.1	1.5
Telemarketing Services	4.2	9.6	-	-	-
	64.7	50.3	39.6	32.4	39.1

 

Other	2017* £m	2018* £m	2019 £m	2020 £m	2021 £m
Goodwill and other intangible assets	94.2	78.1	61.2	46.1	44.2
Other assets and liabilities	(13.4)	(11.5)	(9.4)	(7.2)	(10.2)
Net assets before net cash	80.8	66.6	51.8	38.9	34.0
Net cash	4.1	0.1	9.3	8.3	13.1
Total equity	84.9	66.7	61.1	47.2	47.1

* 2017-2018 have not been re-presented with regards to discontinued operations relating to the cessation of the MarketMakers telemarketing business in 2020.

Marketing and Advertising Solutions revenue was split into Marketing Solutions and Recruitment Advertising in the prior year.

 

Directors, Advisers and Other Corporate Information

Company registration number

04948078

 

Incorporated / domiciled in

England and Wales

 

Registered office

Floor M
10 York Road
London
SE1 7ND
United Kingdom

 

Directors

Colin Jones (Chair)
Swagatam Mukerji (Chief Executive Officer)
Simon Longfield (Chief Financial Officer)
William Eccleshare
Carol Hosey
Leslie-Ann Reed

 

Company Secretary

Helen Silver

 

Independent Auditor

Crowe U.K. LLP

55 Ludgate Hill

London

EC4M 7JW

 

Registrars

Share Registrars Limited
3 The Millennium Centre

Crosby Way

Farnham

Surrey

GU9 7XX

 

External Lawyers

Dechert LLP
160 Queen Victoria Street
London
EC4V 4QQ

 

Brokers

Investec Bank plc

Singer Capital Markets