Half-yearly Report
26 September 2013
Norman Broadbent plc
("Norman Broadbent" or "the Company" or "the Group")
Interim Results
Norman Broadbent, a leading provider of executive search, leadership
consultancy and complementary recruitment services, today announces its
unaudited results for the six months ended 30 June 2013.
Financial highlights
* Revenues were flat at £4.0m (2012: revenues of £4.0m)
* Group operating profit was £0.08m before start-up costs of new subsidiaries
and new overseas offices of £0.30m (2012: operating profit of £0.06m after
restructuring costs).
* Group loss after tax was £0.26m (2012: profit after tax of £0.04m).
* Equity shareholders' funds of £3.0m as at 30 June 2013 (£3.2m at 31
December 2012).
* Group cash and cash equivalents at 30 June 2013 of £0.6m (31 December 2012:
£1.0m), excluding rent deposit of £0.3m, with revolving invoice discounting
facility.
* No bank debt.
Operational highlights
* UK search continues to recover from a slow first quarter of 2013 in the TMT
practice, reporting operating profit of £0.21m (2012: £0.21m). New
consultant hires joining in TMT and financial services in the second half
of the year.
* Encouraging trend in business development from new overseas search offices.
* Strong momentum in new UK subsidiary businesses in the growth areas of
niche contingent recruitment, interim and social media consultancy.
* Recently acquired Belgian executive assessment and search business trading
profitably and in-line with management expectations.
Pierce Casey, Executive Chairman, said:
"It is encouraging to note that market sentiment and activity has improved in
all areas of our diverse suite of human capital offerings and that the timing
of our recent entry into a specialist segment of contingent recruitment and
into social media recruitment and consulting looks opportune and has created a
strong platform for growth across the Group. Moreover, the existing plc
infrastructure is allowing greater operational gearing by providing finance,
administration and support at minimal extra cost to our new subsidiaries and
expanded search offices."
For further information please contact:
Norman Broadbent plc Tel: 020 7484 0000
Pierce Casey/Sue O'Brien/Ben Felton
Sanlam Securities Limited Tel: 020 7628 2200
Simon Clements/Virginia Bull/Catherine
Miles
Notes to Editors
Norman Broadbent plc is a leading human capital consultancy. It offers board
and executive search services, leadership consultancy services, interim
management, contingent and social media recruitment services. Headquartered in
London, the group operates globally and has offices in cities across Europe and
in Bogota, Dubai, Los Angeles and Singapore.
For further information visit www.normanbroadbent.com
Chairman's Statement
Introduction
Following the oversubscribed share placing in November 2012 which raised £
742,560, the Group has made significant progress in the development of both our
two new complementary businesses - Arcus Global Partners and Connecting
Corporates - and in developing the international Norman Broadbent search
offices in USA, Singapore and France. In addition the share placing facilitated
the acquisition of 51 per cent. of Acker Deboeck & Company, the Brussels based
leadership assessment business, since rebranded Norman Broadbent. Much has been
achieved on limited capital, without debt.
The online products and flexible recruitment solutions offered by the two new
businesses have been well received by existing and new clients. The positive
support provided by the established businesses within the Group has assisted
them in attracting talent and building strong teams in a short period of time.
The new brands and the extended international offices are contributing
increasingly positively to Group revenues since the period end.
Financial Results
The table below summarises the results for the Group.
Six months to Six months to Year ended
30 June 30 June
31 Dec
2013 2012
2012
£000's £000's £000's
REVENUE 4,010 4,014 7,634
Cost of sale (305) (116) (208)
GROSS PROFIT 3,705 3,898 7,426
Operating expenses (4,051) (3,643) (7,133)
Other income 125 - -
GROUP OPERATING (LOSS)/ PROFIT BEFORE (221) 255 293
RESTRUCTURING COSTS
Restructuring costs - (189) (331)
GROUP OPERATING (LOSS)/PROFIT (221) 66 (38)
Net finance cost (16) (16) (35)
(Loss)/Profit Before Tax (237) 50 (73)
Income tax (21) (7) (42)
(Loss)/Profit After Tax (258) 43 (115)
Group operating profit was £82,000, before accounting for the costs of new UK
and overseas start-up businesses totalling £303,000 (2012: operating profit of
£66,000 after restructuring costs of £189,000).
Revenue for the six months remained flat at £4.0m, while UK executive search
revenue declined by 14 per cent. to £2.9m from £3.4m in the six month period to
30 June 2012. This decline in UK search revenue, highlighted in the Chairman's
Statement on 25 April 2013 accompanying the 2012 annual results, was primarily
driven by a slow first quarter in the TMT practice, historically a strong
contributor to UK search revenues.
Group operating expenses grew by 11 per cent. reflecting the investment in the
two new subsidiary businesses and the inclusion for the first time of the costs
of our new Belgian subsidiary. This is reflected in the consolidated group
headcount which increased from 60 to 74 during the period, with a further 15
hires made since the end of June 2013. In response to the decline in UK search
revenues in the first quarter of the year, management identified administrative
cost savings which resulted in the UK search business reporting an operating
profit of £207,000 compared with £212,000 in the six months to 30 June 2012.
New search consultants in TMT and retail financial services will be joining in
the second half of the year to develop new business within these established
practices.
The loss per share for the six months to 30 June 2013 was 2.09 pence per share
compared with earnings per share of 0.40 pence in the comparative period and
adjusted loss per share was 1.70 pence compared with earnings per share of 0.89
pence in 2012.
Financial Position
Equity shareholders' funds were £3.0m as at 30 June 2013 (£3.2m as at 31
December 2012), with net current assets of £0.95m (£1.1m as at 31 December
2012). Cash and cash equivalents at 30 June 2013 stood at £0.60m, down from £
1.0m at 31 December 2012 reflecting the investment in the new businesses and
their start-up losses. The balance on the Group's revolving invoice discounting
facility was £0.75m (£0.97m at 31 December 2012), reflecting a trade
receivables balance of £1.3m (£1.5m at 31 December 2012). The Group continues
to hold no bank debt.
Current Trading and Outlook
The UK search business performed better in July and August than in the same
period last year. Average fee levels have increased by 20 per cent. as the
extension of the experienced board practice across executive and non-executive
roles has led to Norman Broadbent's continuing growth in the C-suite search
market. The UK leadership consulting business continues to build a strong
reputation with new clients for its core products albeit the conversion of
business development into sales has taken longer than expected.
The wholly owned overseas search offices in Los Angeles, Paris and Singapore
(all start-ups in the last 12 months) should, collectively, contribute modest
profits in the second half of the year. Licenced overseas search has a mixed
outlook; resilient in Spain and Latin America, whilst the Middle East and Italy
are both softer. Fortunately all licence income is incremental to the Company.
Our acquired leadership assessment business in Belgium is performing well and
provides a good platform for growth into neighbouring countries.
Arcus Global Partners, our start-up contingent, executive RPO and talent
management offering is achieving expectations. The first half of 2013 was spent
building a team of experienced consultants and the company now has a strong
order book of mandated work across its portfolio of products. Although at an
early stage of its development, the business appears to bear the hallmarks of a
successful, scaleable and exportable business, operating disruptively in a
large marketplace.
Connecting Corporates (incorporating Social Media Search and WinningWork), in
which we hold a controlling stake in partnership with its entrepreneurial
founder, is also achieving expectations and offers a compelling suite of
digital and traditional enabling solutions to a growing list of clients. It,
too, appears to bear the hallmarks of a successful, scaleable and exportable
business.
We continue to review potential new opportunities in the human capital sector
both in the UK and overseas and our flexible approach and ability to partner
with strong entrepreneurs should give us an edge in continuing to grow the
Group in scale.
It is encouraging to note that market sentiment and activity has improved in
all areas of our diverse suite of human capital offerings and that the timing
of our recent entry into a specialist segment of contingent recruitment and
into social media recruitment and consulting looks opportune and has created a
strong platform for growth across the Group. Moreover, the existing plc
infrastructure is allowing greater operational gearing by providing finance,
administration and support at minimal extra cost to our new subsidiaries and
expanded search offices.
The Board is optimistic moving forward.
Pierce Casey
Executive Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 30 June 2013
Note Six months Six months Year ended
ended 30 ended 30 June
June 2013 2012 31 December
2012
(unaudited) (unaudited)
(audited)
£000 £000 £000
REVENUE 3 4,010 4,014 7,634
Cost of Sales (305) (116) (208)
GROSS PROFIT 3,705 3,898 7,426
Operating Expenses (4,051) (3,643) (7,133)
Other Income 125 - -
GROUP OPERATING (LOSS)/PROFIT (221) 255 293
BEFORE RESTRUCTURING COSTS
Re-structuring costs 4 - (189) (331)
GROUP OPERATING (LOSS)/PROFIT (221) 66 (38)
Net finance cost (16) (16) (35)
(LOSS)/PROFIT ON ORDINARY (237) 50 (73)
ACTIVITIES BEFORE INCOME TAX
Income tax expense (21) (7) (42)
(LOSS)/PROFIT FOR THE PERIOD (258) 43 (115)
OTHER COMPREHENSIVE INCOME
Foreign currency translation - - 2
differences - foreign operations
TOTAL COMPREHENSIVE INCOME (258) 43 (113)
(Loss)/Profit attributable to:
Owners of the Company (272) 43 (127)
Non-controlling interests 14 - 12
(Loss)/Profit for the period (258) 43 (115)
Total comprehensive income
attributable to:
Owners of the Company (272) 43 (127)
Non-controlling interests 14 - 14
Total comprehensive income for the (258) 43 (113)
period
(Loss)/earnings per share 6 (2.09)p 0.40p (1.16)p
- Basic (2.09)p 0.40p (1.16)p
- Diluted
Adjusted (loss)/earnings per share 6 (1.70)p 0.89p (0.52)p
- Basic (1.70)p 0.89p (0.52)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2013
Note As at As at As at 31
December
30 June 30 June 2012
(audited)
2013 2012
(unaudited) (unaudited)
£000 £000 £000
Non-Current Assets
Intangible assets 1,922 1,810 1,922
Property, plant and equipment 197 114 139
Deferred tax assets 69 69 69
TOTAL NON-CURRENT ASSETS 2,188 1,993 2,130
Current Assets
Trade and other receivables 2,314 2,652 2,267
Cash and cash equivalents 596 583 1,009
TOTAL CURRENT ASSETS 2,910 3,235 3,276
TOTAL ASSETS 5,098 5,228 5,406
Current Liabilities
Trade and other payables 1,116 1,280 1,075
Deferred consideration - 300 73
Bank overdraft and interest bearing 753 1,079 965
loans
Corporation tax liability 93 - 72
TOTAL CURRENT LIABILITIES 1,962 2,659 2,185
NET CURRENT ASSETS 948 576 1,091
Non-Current Liabilities
Deferred consideration - 181 -
Provisions 7 125 - -
TOTAL NON-CURRENT LIABILITIES 125 181 -
TOTAL LIABILITIES 2,087 2,840 2,185
TOTAL ASSETS LESS TOTAL
LIABILITIES 3,011 2,388 3,221
Issued share capital 5,857 5,833 5,857
Share premium account 9,570 8,758 9,572
Retained earnings (12,575) (12,203) (12,353)
EQUITY ATTRIBUTABLE TO OWNERS OF THE 2,852 2,388 3,076
COMPANY
Non-controlling interests 159 - 145
TOTAL EQUITY 3,011 2,388 3,221
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 30 June 2013
Attributable to owners of the
Company
CONSOLIDATED GROUP Share Share Retained Total Non-controlling Total
Capital Premium Earnings interests Equity
Equity
£000 £000 £000 £000 £000
£000
Balance at 1 January 2012 5,833 8,758 (12,297) 2,294 - 2,294
Profit for the period - - 43 43 - 43
Total other comprehensive - - - - - -
income
Total comprehensive income - - 43 43 - 43
for the period
Transactions with owners
of the Company, recognised
directly in equity:
Issue of ordinary shares - - - - - -
Credit to equity for share - - 51 51 - 51
based payments
Total transactions with - - 51 51 - 51
owners of the Company,
recognised directly in
equity
Balance at 30 June 2012 5,833 8,758 (12,203) 2,388 - 2,388
Balance at 1 July 2012 5,833 8,758 (12,203) 2,388 - 2,388
(Loss)/Profit for the - - (170) (170) 12 (158)
period
Total other comprehensive - - - - 2 2
income
Total comprehensive income - - (170) (170) 14 (156)
for the period
Transactions with owners
of the Company, recognised
directly in equity:
Issue of ordinary shares 24 814 - 838 - 838
Credit to equity for share - - 20 20 - 20
based payments
Acquisition of subsidiary - - - - 131 131
with non-controlling
interests
Total transactions with 24 814 20 858 131 989
owners of the Company,
recognised directly in
equity
Balance at 31 December 5,857 9,572 (12,353) 3,076 145 3,221
2012
Balance at 1 January 2013 5,857 9,572 (12,353) 3,076 145 3,221
(Loss)/Profit for the - - (272) (272) 14 (258)
period
Total other comprehensive - - - - - -
income
Total comprehensive income - - (272) (272) 14 (258)
for the period
Transactions with owners
of the Company, recognised
directly in equity:
Issue of ordinary shares - (2) - (2) - (2)
Credit to equity for share - - 50 50 - 50
based payments
Acquisition of subsidiary - - - - - -
with non-controlling
interests
Total transactions with - (2) 50 48 - 48
owners of the Company,
recognised directly in
equity
Balance at 30 June 2013 5,857 9,570 (12,575) 2,852 159 3,011
CONSOLIDATED STATEMENT OF CASH FLOW
For the six month period ended 30 June 2013
Notes Six months Six months Year ended
ended 30 ended 30 31
June 2013 June 2012 December
(unaudited) (unaudited) 2012
(audited)
£000 £000 £000
Net cash used in operating activities (i) (8) (372) (250)
Cash flows from investing activities
and servicing of finance
Net finance cost (16) (16) (35)
Payments to acquire tangible fixed (102) (24) (92)
assets
Repayment of deferred consideration (73) - (408)
Net cash inflow on acquisition of - - 181
subsidiary
Net cash used in investing activities (191) (40) (354)
Cash flows from financing activities
Net cash inflows from equity placing (2) - 727
Repayment of secured loans - (50) (109)
(Decrease)/increase in invoice (212) 395 341
discounting
Net cash from financing activities (214) 345 959
Net (decrease)/increase in cash and (413) (67) 356
cash equivalents
Net cash and cash equivalents at 1,009 650 650
beginning of period
Effects of exchange rate changes on - - 3
cash balances held in foreign
currencies
Net cash and cash equivalents at end of 596 583 1,009
period
Analysis of net funds
Cash and cash equivalents 596 583 1,009
Borrowings due within one year (753) (1,079) (965)
Borrowings due after one year - - -
Deferred consideration - (481) (73)
Net funds (157) (977) (565)
Note (i)
Reconciliation of operating profit to Six months Six months Year ended
net cash from operating activities ended 30 ended 30 31
June 2013 June 2012 December
(unaudited) (unaudited) 2012
(audited)
Operating (loss)/profit (221) 66 (38)
Depreciation/ impairment of property, 45 41 84
plant and equipment
Share based payment charge 50 51 71
Increase in trade and other (48) (823) (438)
receivables
Increase/(decrease) in trade and other 41 300 (165)
payables
Increase in provisions 7 125 - -
Taxation paid - (7) (94)
Net cash used in operating activities (8) (372) (250)
NOTES TO THE FINACIAL STATEMENTS
1. ACCOUNTING POLICIES
1. Basis of preparation
The financial information set out in this interim report does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31 December 2012,
prepared under International Financial Reporting Standards (IFRS), have been
filed with the Registrar of Companies. The auditor's report on those statements
was unqualified.
The interim financial information for the six months ended 30 June 2013, has
been prepared in accordance with the AIM Rules for Companies. The Group has not
elected to apply IAS 34 `Interim Financial Reporting'. The principal accounting
policies used in preparing the interim results are those the Group expects to
apply in its financial statements for the year ending 31 December 2013 and are
unchanged from those disclosed in the Group's Annual Report for the year ended
31 December 2012. The interim financial statements have not been audited.
2. Basis of consolidation and business combinations
The Group financial statements consolidate those of the Company and of the
following subsidiary undertakings:
Principal Group investments: Country of Principal Description and
incorporation activities proportion of
or registration shares held by
and operation the Company
Norman Broadbent Executive England and Executive 100% ordinary
Search Ltd Wales search shares
Norman Broadbent Overseas England and Executive 100% ordinary
Ltd Wales search shares
Norman Broadbent Leadership England and Assessment, 100% ordinary
Consulting Ltd (formerly Wales coaching and shares
Human Asset Development talent mgmt.
International Ltd)
Arcus Global Partners Ltd England and Contingent 100% ordinary
(formerly NBBI Ltd)* Wales Search shares
The NB Consultancy Republic of Executive 100% ordinary
(Singapore) Pte Ltd Singapore Search shares
Norman Broadbent Inc United States Executive 100% ordinary
of America Search shares
Norman Broadbent SPRL Belgium Executive 51% ordinary
(formerly Acker Deboeck and search, shares
Company) assessment,
coaching and
talent mgmt.
Norman Broadbent (Ireland) Republic of Dormant 100% ordinary
Ltd Ireland shares
Connecting Corporates Ltd England and Social Media 51% ordinary
Wales Search and shares
Consulting
Bancomm Ltd England and Dormant 100% ordinary
Wales shares
Substantial Shareholdings:
NBS Norman Broadbent SA** Spain Executive 20% ordinary
Search shares
* The 100% shareholding in this company is owned by Norman Broadbent Executive
Search Ltd, a wholly owned subsidiary of the Company.
** The 20% shareholding in this company is owned by Norman Broadbent Overseas
Ltd, a wholly owned subsidiary of the Company.
2. copies of the unaudited interim report
Copies of this report are available on request from the Company's registered
office at 12 St James's Square, London, SW1Y 4LB and are also available on the
Company's website at www.normanbroadbent.com.
3. SEGMENTAL ANALYSIS
Management has determined the operating segments based on the reports reviewed
regularly by the Board for use in deciding how to allocate resources and in
assessing performance. The Board considers Group operations from both a class
of business and geographic perspective.
Each class of business derives its revenues from the supply of a particular
recruitment related service, from retained executive search through to
executive assessment and coaching. Business segment results are reviewed
primarily to operating profit level, which includes employee costs, marketing,
office and accommodation costs and appropriate recharges for management time.
Group revenues are primarily driven from UK operations, however when revenue is
derived from overseas business the results are presented to the Board by
geographic region to identify potential areas for growth or those posing
potential risks to the Group.
i) Class of Business:
The analysis by class of business of the Group's turnover, profit before
taxation and net assets/(liabilities) is set out below:
BUSINESS SEGMENTS
Six months ended Executive Overseas Contingent Assessment, Social Unallocated Total
30 June 2013 Search Royalties Recruitment Coaching & Media
Talent Mgmt. Search & £000 £000
£000 £000 £000 Consulting
£000
£000
Revenue 3,149 126 18 573 144 - 4,010
Cost of sales (147) - (1) (154) (3) - (305)
Gross profit 3,002 126 17 419 141 - 3,705
Operating expenses (2,936) (48) (215) (481) (174) (157) (4,011)
Other operating 125 - - - - - 125
income
Finance costs (16) - - - - - (16)
Depreciation and (39) - (1) - - - (40)
amortisation
Profit before tax 136 78 (199) (62) (33) (157) (237)
Net assets 3,152 - (175) 43 (9) - 3,011
BUSINESS SEGMENTS
Six months ended Executive Overseas Contingent Assessment, Social Unallocated Total
30 June 2012 Royalties Recruitment Coaching & Media
Search Talent Mgmt. Search & £000 £000
£000 £000 Consulting
£000 £000
£000
Revenue 3,573 189 - 252 - - 4,014
Cost of sales (84) - - (32) - - (116)
Gross profit 3,489 189 - 220 - - 3,898
Operating expenses (3,051) (86) - (313) - (152) (3,602)
Other operating - - - - - - -
income
Re-structuring (189) - - - - - (189)
costs
Finance costs (16) - - - - - (16)
Depreciation and (41) - - - - - (41)
amortisation
Profit before tax 192 103 - (93) - (152) 50
Net assets 2,497 - - (109) - - 2,388
BUSINESS SEGMENTS
Year ended 31 Executive Overseas Contingent Assessment, Social Unallocated Total
December 2012 Royalties Recruitment Coaching & Media
Search Talent Mgmt. Search & £000 £000
£000 £000 Consulting
£000 £000
£000
Revenue 6,673 339 - 586 36 - 7,634
Cost of sales (118) - - (89) (1) - (208)
Gross profit 6,555 339 - 497 35 - 7,426
Operating expenses (5,931) (119) - (612) (32) (357) (7,051)
Other operating - - - - - - -
income
Re-structuring (331) - - - - - (331)
costs
Finance costs (31) - - - - (4) (35)
Depreciation and (82) - - - - - (82)
amortisation
Profit before tax 170 220 - (115) 3 (361) (73)
Net assets 3,129 - - 89 3 - 3,221
ii) Geographic Region:
The analysis by geographic region of the Group's turnover, profit before
taxation and net assets/(liabilities) is set out below:
BUSINESS SEGMENTS
Six month Executive Overseas Contingent Assessment, Social Unallocated Total
period ended Search Royalties Recruitment Coaching & Media
30 June 2013 Talent Search & £000 £000
£000 £000 £000 Mgmt. Consulting
£000 £000
Revenue
United 2,885 - 18 242 144 - 3,289
Kingdom
Europe 54 104 - 331 - - 489
Other 210 22 - - - - 232
Total 3,149 126 18 573 144 - 4,010
Gross profit
United 2,774 - 17 202 141 - 3,134
Kingdom
Europe 54 104 - 217 - - 375
Other 174 22 - - - - 196
Total 3,002 126 17 419 141 - 3,705
Profit/(Loss)
before tax
United 207 - (199) (124) (33) (157) (306)
Kingdom
Europe (8) 57 - 62 - - 111
Other (63) 21 - - - - (42)
Total 136 78 (199) (62) (33) (157) (237)
Net assets
United 3,292 - (175) (291) (9) - 2,817
Kingdom
Europe 35 - - 334 - - 369
Other (175) - - - - - (175)
Total 3,152 - (175) 43 (9) - 3,011
BUSINESS SEGMENTS
Six month Executive Overseas Contingent Assessment, Social Unallocated Total
period ended Search Royalties Recruitment Coaching & Media
30 June 2012 Talent Search & £000 £000
£000 £000 £000 Mgmt. Consulting
£000 £000
Revenue
United 3,374 - - 252 - - 3,626
Kingdom
Europe 136 133 - - - - 269
Other 63 56 - - - - 119
Total 3,573 189 - 252 - - 4,014
Gross profit
United 3,292 - - 220 - - 3,512
Kingdom
Europe 137 133 - - - - 270
Other 60 56 - - - - 116
Total 3,489 189 - 220 - - 3,898
Profit/(loss)
before tax
United 212 - - (93) - (152) (33)
Kingdom
Europe 13 72 - - - - 85
Other (33) 31 - - - - (2)
Total 192 103 - (93) - (152) 50
Net assets
United 2,535 - - (109) - - 2,426
Kingdom
Europe - - - - - - -
Other (38) - - - - - (38)
Total 2,497 - - (109) - - 2,388
BUSINESS SEGMENTS
Year ended 31 Executive Overseas Contingent Assessment, Social Unallocated Total
December 2012 Search Royalties Recruitment Coaching & Media
Talent Search & £000 £000
£000 £000 £000 Mgmt. Consulting
£000 £000
Revenue
United 6,479 - - 471 36 - 6,986
Kingdom
Europe 148 275 - 114 - - 537
Other 46 64 - 1 - - 111
Total 6,673 339 - 586 36 - 7,634
Gross profit
United 6,368 - - 428 35 - 6,831
Kingdom
Europe 148 275 - 69 - - 492
Other 39 64 - - - - 103
Total 6,555 339 - 497 35 - 7,426
Profit/(loss)
before tax
United 170 - - (63) 3 (361) (241)
Kingdom
Europe - 157 - (51) - - 106
Other - 63 - (1) - - 62
Total 170 220 - (115) 3 (361) (73)
Net assets
United 3,129 - - 89 3 - 3,221
Kingdom
Total 3,129 - - 89 3 - 3,221
Turnover by location is not materially different from turnover by destination.
The unallocated costs refer to central costs of the Group including salaries,
professional and other costs, which are not directly attributable to the
delivery of the services. The four segments shown represent the management
information provided to the Board and in the opinion of the directors reflect
the nature of the Group's services.
4. RE-STRUCTURING COSTS
Re-structuring costs include personnel costs relating to the hiring of new
consultants, exiting of under-performing staff and external recruitment
consultancy costs relating to the new hires.
These items have been highlighted in the consolidated statement of
comprehensive income because separate disclosure is considered appropriate in
understanding the underlying performance of the business.
Six months Six months Year ended
ended 30 ended 30 31
June 2013 June 2012 December
2012
£000 £000
£000
Personnel - 189 331
Consultancy - - -
Total - 189 331
5. EQUITY SECURITIES ISSUED
During the six month period ended 30 June 2013 no equity securities were
issued. During the six month period ended 30 June 2012 no equity securities
were issued.
Issue of ordinary shares during Six months Six months Year ended 31
the period ended 30 June ended 30 June December 2012
2013 2012
(unaudited) (unaudited) (audited)
Shares Value Shares Value Shares Value
000's £000 000's £000 000's £000
Issue of shares on acquisition - - - - 319 111
Issue of shares for cash - - - - 2,122 742
Total - - - - 2,441 853
6. earnings PER ORDINARY SHARE
i. Basic earnings per share:
This is calculated by dividing the profit attributable to equity holders of the
company by the weighted average number of ordinary shares in issue during the
period:
Six months Six months Year ended
ended 30 June ended 30 31 December
2013 June 2012 2012
(unaudited) (unaudited) (audited)
(Loss)/profit attributable to £(272,000) £43,000 £(127,000)
shareholders
Weighted average number of 13,048,686 10,607,801 10,929,676
ordinary shares
ii) Diluted earnings per share:
This is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. The
company has two categories of dilutive potential ordinary shares; share options
and warrants. For these options and warrants, a calculation is done to
determine the number of shares that could have been acquired at fair value
(determined as the average annual market share price of the company's shares)
based on the monetary value of the subscription rights attached to the
outstanding warrants and options. The number of shares calculated as above is
compared with the number of shares that would have been issued assuming the
exercise of the share options.
Six months Six months Year ended
ended 30 ended 30 31
June 2013 June 2012 December
2012
(unaudited) (unaudited) (audited)
(Loss)/profit attributable to shareholders £(272,000) £43,000 £(127,000)
Weighted average no. of ordinary shares 13,048,686 10,607,801 10,929,676
- assumed conversion of share options - - -
- assumed conversion of warrants - 3,076 -
Weighted average number of ordinary shares 13,048,686 10,610,877 10,929,676
for diluted earnings per share
iii) Adjusted earnings per share
Adjusted earnings per share has also been calculated in addition to the basic
and diluted earnings per share and is based on earnings adjusted to eliminate
the effects of impairment of intangibles and charges for share based payments.
It has been calculated to allow shareholders to gain a clearer understanding of
the trading performance of the Group.
Six months ended 30 June Six months ended Year ended 31
2013 30 June 2012 December 2012
£000 Basic Diluted £000 Basic Diluted £000 Basic Diluted
pence pence per pence pence pence pence
per share per per per per
share share share share share
Basic
earnings
(Loss)/Profit (272) (2.08) (2.08) 43 0.40 0.40 (127) (1.16) (1.16)
after tax
Adjustment
Share based 50 0.38 0.38 51 0.49 0.49 71 0.64 0.64
payment
charge
Adjusted (222) (1.70) (1.70) 94 0.89 0.89 (56) (0.52) (0.52)
earnings
7. PROVISIONS
8.
Six months Year ended
Six months ended 30 June 2013 ended 30 31 December
June 2012 2012
£000
£000 £000
Balance at beginning of period - - -
Provisions made during the period 125 - -
Balance at end of period 125 - -
Non-current 125 - -
Current - - -
125 - -
During the period the Company signed a new ten year lease with a five year
break for its main office in London. On signing the new lease the Company
inherited the office fit-out from the previous tenant. Under the terms of the
new lease the Company is obliged to return vacant possession to the landlord
with the office returned to its original state. The Company has had the present
cost of the future works required to return the office to its original state
valued by an independent firm of advisors and this non-current liability of £
125,000 has been provided for in the financial period. The Company received a
one-off payment of £250,000 from the previous tenant in satisfaction of various
costs and liabilities that it inherited with the new lease. The net balance of
this receipt has been reported within Other Income in the Consolidated
Statement of Comprehensive Income.
8. RELATED PARTY TRANSACTIONS
i. Purchase of services: Six months Six months Year ended
ended 30 ended 30 31
June 2013 June 2012 December
2012
£000 £000
£000
Adelaide Capital Limited 52 73 141
Anderson Barrowcliff LLP 8 15 31
Brian Stephens & Company Ltd 11 - 5
NBS Norman Broadbent SA 14 - 8
Total 85 88 185
Adelaide Capital Limited invoiced the Group for the directors' fees of P Casey
(£52,000). P Casey is a director of Adelaide Capital Limited. Brian Stephens &
Company Ltd invoiced the Group for the directors' fees of B Stephens (£10,000)
and business related travel costs of £1,000. B Stephens is a director of Brian
Stephens & Company Ltd.
Taxation and company secretarial services of £3,000 were acquired from Anderson
Barrowcliff LLP, an accountancy firm of which R Robinson is a partner. Anderson
Barrowcliff also invoiced the Group for R Robinson's director's fees (£5,000).
During the period the company incurred fee splits relating to jointly executed
overseas searches (£14,000) from NBS Norman Broadbent SA. The Group owns a 20%
stake in NBS Norman Broadbent SA.
All related party expenditure took place via "arms-length" transactions.
ii. Sales of services: Six months Six months Year ended
ended 30 ended 30 31
June 2013 June 2012 December
2012
£000 £000
£000
NBS Norman Broadbent SA 80 121 253
Total 80 121 253
During the period the Company invoiced NBS Norman Broadbent SA for royalty
income (£80,000).
iii. Period-end payables arising from the Six months Six months Year ended
purchases of services: ended 30 ended 30 31
June 2013 June 2012 December
2012
£000 £000
£000
Adelaide Capital Limited 10 12 21
Anderson Barrowcliff LLP 2 6 6
Brian Stephens & Company Ltd 4 - 4
NBS Norman Broadbent SA 14 - 5
Total 30 18 36
The payables to related parties arise from purchase transactions and are due
one month after date of purchase. The payables bear no interest.
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