Half Yearly Report

RNS Number : 7330R

Christie Group PLC

16 September 2014

 



16 September 2014

Christie Group plc
Interim Results for the six months ended 30 June 2014

Christie Group plc ('Christie' or the 'Group'), the leading provider of Professional Business Services and Stock & Inventory Systems & Services to the leisure, retail and care markets, is pleased to announced its Interim Results for the six months ended 30 June 2014.

Key points:

·      Revenue for the first half up 14.4% to £29.4m (2013: £25.7m)

·      £1.1m increase in operating profit before exceptional items to £0.8m (2013: £0.3m loss)

·      Basic earnings per share up 5p per share to 1.74p (2013: 3.26p negative eps)

·      Interim dividend increased by 50% to 0.75p per share (2013: 0.5p per share)

·      Corporate M&A instructions provide basis for expectation of a strong full year result

Commenting on the results, David Rugg, Chief Executive of Christie Group, said:

"Our first half performance and the activity we continue to see provides us with confidence that we will deliver a much improved result for the year as a whole, driven by a resurgent UK M&A market."

Enquiries:

Christie Group plc
David Rugg Chief Executive	020 7227 0707
Daniel Prickett Chief Financial Officer	020 7227 0700
Charles Stanley Securities Nominated Adviser & Broker Russell Cook / Carl Holmes	020 7149 6000

Notes to Editors:

Christie Group plc, quoted on AIM, is a leading professional business services group with 43 offices across the UK, Europe and Canada, catering to its specialist markets in the leisure, retail and care sectors.

Christie Group operates in two complementary business divisions: Professional Business Services (PBS) and Stock & Inventory Systems & Services (SISS). These divisions trade under the brand names: PBS - Christie + Co, Pinders, Christie Finance and Christie Insurance: SISS - Orridge, Venners and Vennersys.

Tracing its origins back to 1846, the Group has a long established reputation for offering essential services to client companies in agency, valuation services, investment, consultancy, project management, multi-functional trading systems and online ticketing services, stock audit and inventory management. The diversity of these services provides a natural balance to the Group's core agency business.

For more information, please go to www.christiegroup.com.

CHAIRMAN'S STATEMENT

I am pleased to report a first-half operating profit before exceptional items of £0.8m (2013: £0.3m loss) which is in line with the positive outlook presented in my AGM statement in June.  This £1.1m improvement in the H1 operating result before exceptional items follows a 14.4% increase in revenue to £29.4m (2013: £25.7m).

Professional Business Services

Our corporate Mergers & Acquisitions activity has been both intense and successful, with our UK operations leading the recovery in what has been an encouraging six months.   The rewards of this activity have continued to accrue across the summer and, with our pipelines fully charged, we anticipate the delivery of a strong second-half result.

M&A activity has continued apace.  Owners of companies trading in our sectors increasingly appreciate how a detailed knowledge of industry demands and focus coupled with the long term trust of the national, regional and local players allows us a "rifle shot" approach when desired to deliver both a quick and timely transaction at the best available terms.

First half instructions in the hotel sector included the recently completed sale of QMH Hotels for the owning consortium as well as LRG's disposal of 19 Holiday Inn hotels for a price significantly above the £70 million guide price. C+Co have also been instructed to market De Vere Group's Golf & Resort Hotels, with a value of over £160m.

Our consultants carried out advisory work on a number of non-performing loan portfolios, including a circa €4bn NPL portfolio in Spain which includes a significant number of hotels.

In the Care arena, we sold Caring Daycare Nurseries, a group of 12 children's day nurseries, to Busy Bees Ltd. We also acted for Mencap in the sale of 3 Educational Colleges to GI Partners' backed Cambian Group.

We have sold pubs to Wetherspoons since their inception and were pleased to add Browns Hotel in Tavistock to their portfolio. We were pleased to advise a mainstream fast food franchise in releasing equity - an illustration of our knowledge in the fast food sector.This is complemented by Venners Food Services Consultancy.

Our Pharmacy agency division was pleased to report the sale of 11 community pharmacies to AMG Healthcare, the major shareholder of which is buying group Avicenna plc.

Pinders' building division has been newly appointed to work on behalf of British Telecom.  Building inspection reports were also prepared for Majestic Bingo on the Top Ten Bingo portfolio.

Christie Finance has established a specialist Medical Sector team to assist the funding of pharmacies, GPs' and dental surgeries and veterinary practices.

The regulation of consumer credit introductions has moved from the OFT to the FCA. Our belief is that a number of competitors will not choose to seek full authorisation, affording increased opportunity for those which remain.

The purpose of insurance is to meet losses. Christie Insurance were pleased to assist our client in being able to re-open the Cambridge Arms Hotel in the space of four days, following a fire.

Stock & Inventory Systems & Services

Three planned events have enabled us to continue to grow revenue in our Stock & Inventory Systems & Services division at the expense of a short term impact on operating profit.  These moves will facilitate the further growth of the businesses concerned and allow us to safeguard continuing underlying profitability.

When we acquired our German based retail stocktaking business in September 2013, we knew that its revenues were heavily biased towards the second half of the year.   This continues to be the case.     Moving forward, we are pursuing further new work for H1 2015 to better balance our German trade.

We have just finished writing a new stocktaking system for our hospitality stocktaking business Venners, appropriately called Next Generation.  We will introduce this to clients progressively through to April 2015.  This system is designed to deliver real-time reporting and online access, delivery and consumption of data and margin and revenue analysis to our clients.  We believe it is a marked improvement over our existing system and ahead of any commercially scaleable solution we know of.

In Vennersys we have finished an online merchandising system which operates as a stand-alone module of our new visitor attraction software encompassing online ticketing, event control, point of sale and customer relationship management.

Recent new clients included Carphone Warehouse, Swarovski in Belgium, Holland and Germany and Molton Brown, Harveys of Lewes, St. Austell Brewery and Novus Leisure.

From October this year we will accommodate the knock-on effect of an increase in minimum wage.

Whilst we await any legislation relating to zero hour contracts, it is noteworthy that our day rate staff each currently work approximately 96% of the hours of their full time equivalents.

Outlook

UK trading is set fair for our second half.  We continue carefully to expand whilst our business continues to grow organically.  The sectors we operate in are buoyant, too.  We expect to report a strong outcome for the year with the potential for further improvement once the recovery in mainland Europe materialises.

On your behalf, I thank our management and staff for some truly excellent achievements.

The Board have declared an increased interim dividend of 0.75p per share (2013: 0.50p per share) which will be paid on 17 October 2014 to shareholders on the register on 26 September 2014.

Consolidated interim income statement

		Note	Half year to 30 June 2014 £'000 (Unaudited)	Half year to 30 June 2013 £'000 (Unaudited)	Year ended  31 December 2013 £'000
	Continuing operations:
	Revenue	4	29,406	25,702	54,154
	Employee benefit expenses		(19,839)	(18,580)	(36,121)
			9,567	7,122	18,033
	Depreciation and amortisation		(273)	(308)	(564)
	Impairment credit / (charge)		-	77	(53)
	Other operating expenses		(8,479)	(7,164)	(15,849)
	Operating profit / (loss) before exceptional items	4	815	(273)	1,567
	Exceptional items *		-	(396)	(442)
	Operating profit / (loss) after exceptional items		815	(669)	1,125
	Finance costs		(53)	(52)	(120)
	Finance income		-	-	4
	Pension scheme finance costs		(124)	(8)	(468)
	Total finance charge		(177)	(60)	(584)
	Profit / (loss) before tax from continuing operations		638	(729)	541
	Taxation	5	(311)	(67)	(351)
	Profit / (loss) for the period after tax from continuing operations		327	(796)	190
	Discontinued operations:
	Profit / (loss) for the period from discontinued operations	6	-	(29)	(29)
	Profit / (loss) for the period after tax		327	(825)	161

    Profit / (loss) for the period after tax attributable to:

Equity shareholders of the parent		458	(824)	212
Non-Controlling interest		(131)	(1)	(51)
		327	(825)	161

 Earnings per share - pence

Profit / (loss) attributable to the equity holders of the Company
- Basic	7	1.74	(3.26)	0.82
- Fully diluted	7	1.66	(3.26)	0.80
Profit / (loss) from continuing operations attributable to the equity holders of the Company
- Basic	7	1.74	(3.15)	0.93
- Fully diluted	7	1.66	(3.15)	0.91

* Exceptional costs for the half year to 30 June 2013 and year to 31 December 2013 relate to the restructuring of operations. There are no such costs in the half year to 30 June 2014.

Consolidated interim statement of comprehensive income

			Half year to 30 June 2014 £'000 (Unaudited)	Half year to 30 June 2013 £'000 (Unaudited)	Year ended  31 December 2013 £'000
	Profit / (loss) for the period after tax		327	(825)	161
	Other comprehensive income / (losses):
	Items that may be reclassified subsequently to profit or loss:
	Exchange differences on translating foreign operations		17	(4)	46
	Net other comprehensive income / (losses) to be reclassified to profit or loss in subsequent periods		17	(4)	46
	Items that will not be reclassified to profit or loss:
	Actuarial (losses) / gains on defined benefit plans		(2,393)	1,499	4,839
	Income tax effect		443	(315)	(1,183)
	Net other comprehensive (losses) /  income not being reclassified to profit or loss in subsequent periods		(1,950)	1,184	3,656
	Other comprehensive (losses) / income for the period, net of tax		(1,933)	1,180	3,702
	Total comprehensive (losses)  / income for the period		(1,606)	355	3,863

Total comprehensive (losses) / income attributable to:

Equity shareholders of the parent		(1,475)	356	3,914
Non-Controlling interest		(131)	(1)	(51)
		(1,606)	355	3,863

Consolidated interim statement of changes in shareholders' equity

	Share capital £'000	Fair value and other reserves £'000	Cumulative translation adjustments £'000	Retained earnings £'000	Non - Controlling interest £'000	Total equity £'000
Half year to 30 June 2013 (Unaudited)
Balance at 1 January 2013	505	4,688	457	(10,113)	(75)	(4,538)
(Loss)/ profit for the period after tax	-	-	-	(824)	(1)	(825)
Other comprehensive income	-	-	(4)	1,184	-	1,180
Total comprehensive (losses)  / income for the period	-	-	(4)	360	(1)	355
Movement in respect of employee share scheme	-	53	-	(23)	-	30
Employee share option scheme:
- value of services provided	-	43	-	-	-	43
Proceeds from shares issued	26	758	-	-	-	784
Balance at 30 June 2013	531	5,542	453	(9,776)	(76)	(3,326)
Year ended 31 December 2013 (Audited)
Balance at 1 January 2013	505	4,688	457	(10,113)	(75)	(4,538)
Profit / (loss) for the year after tax	-	-	-	212	(51)	161
Other comprehensive income	-	-	-	3,656	-	3,656
Exchange differences on translating foreign operations	-	-	46	-	-	46
Total comprehensive income / (losses) for the year	-	-	46	3,868	(51)	3,863
Transfer of non-controlling interest on liquidation	-	-	-	(75)	75	-
Movement in respect of employee share scheme	-	19	-	(23)	-	(4)
Employee share option scheme:
-value of services provided	-	61	-	-	-	61
Proceeds from shares issued	26	758	-	-	-	784
Dividends paid	-	-	-	(257)	-	(257)
Balance at 31 December 2013	531	5,526	503	(6,600)	(51)	(91)
Half year to 30 June 2014 (Unaudited)
Balance at 1 January 2014	531	5,526	503	(6,600)	(51)	(91)
Profit / (loss) for the period after tax	-	-	-	458	(131)	327
Other comprehensive (losses)	-	-	-	(1,950)	-	(1,950)
Exchange differences on translating foreign operations	-	-	17	-	-	17
Total comprehensive income / (losses)  for the period	-	-	17	(1,492)	(131)	(1,606)
Movement in respect of employee share scheme	-	(132)	-	(2)	-	(134)
Employee share option scheme:
- value of services provided	-	60	-	-	-	60
Dividends paid	-	-	-	(262)	-	(262)
Balance at 30 June 2014	531	5,454	520	(8,356)	(182)	(2,033)

 

 

Consolidated interim statement of financial position

	Note	At 30 June 2014 £'000 (Unaudited)	At 30 June 2013 £'000 (Unaudited)	At 31 December 2013 £'000
Assets
Non-current assets
Intangible assets - Goodwill		1,763	1,011	1,793
Intangible assets - Other		570	408	507
Property, plant and equipment		970	1,080	1,088
Deferred tax assets		2,768	4,019	2,628
Available-for-sale financial assets		635	300	485
Other receivables		466	316	500
		7,172	7,134	7,001
Current assets
Inventories		-	-	-
Trade and other receivables		12,472	11,840	10,819
Current tax assets		190	177	190
Cash and cash equivalents	12	421	334	1,747
		13,083	12,351	12,756
Total assets		20,255	19,485	19,757
Equity
Capital and reserves attributable to the Company's equity holders
Share capital	9	531	531	531
Fair value and other reserves		5,454	5,542	5,526
Cumulative translation reserve		520	453	503
Retained earnings		(8,356)	(9,776)	(6,600)
		(1,851)	(3,250)	(40)
Non-Controlling interest		(182)	(76)	(51)
Total equity		(2,033)	(3,326)	(91)
Liabilities
Non-current liabilities
Retirement benefit obligations	10	6,857	8,131	4,796
Provisions		313	644	561
		7,170	8,775	5,357
Current liabilities
Trade and other payables		8,592	8,447	8,365
Borrowings		4,568	3,796	4,483
Provisions		1,958	1,793	1,643
		15,118	14,036	14,491
Total liabilities		22,288	22,811	19,848
Total equity and liabilities		20,255	19,485	19,757

These consolidated interim financial statements have been approved for issue by the Board of Directors on 15 September 2014.

Consolidated interim statement of cash flows

	Note	Half year to 30 June 2014 £'000 (Unaudited)	Half year to 30 June 2013 £'000 (Unaudited)	Year ended 31 December 2013 £'000
Cash flow from operating activities
Cash used in operations	11	(745)	(1,908)	(355)
Interest paid		(53)	(60)	(120)
Tax received		-	-	225
Net cash used in operating activities		(798)	(1,968)	(250)
Cash flow from investing activities
Acquisition of Subsidiary		-	-	(140)
Purchase of property, plant and equipment (PPE)		(134)	(81)	(297)
Proceeds from sale of PPE		6	8	13
Intangible assets expenditure		(61)	(93)	(267)
Investment in available-for-sale asset		(150)	-	(185)
Interest received		-	-	4
Net cash used in investing activities		(339)	(166)	(872)
Cash flow from financing activities
Proceeds from issuance of ordinary shares		-	784	784
Proceeds from / (repayment of) invoice discounting		969	(150)	18
Dividends paid		(262)	-	(257)
Net cash generated from financing activities		707	634	545
Net decrease in cash and cash equivalents		(430)	(1,500)	(577)
Cash and cash equivalents at beginning of period		(2,130)	(1,538)	(1,538)
Exchange (losses) / gains on Euro bank accounts		(12)	14	(15)
Cash and cash equivalents at end of period	12	(2,572)	(3,024)	(2,130)

Notes to the consolidated interim financial statements

1. General information

Christie Group plc is the parent undertaking of a group of companies covering a range of related activities.   These fall into two divisions - Professional Business Services and Stock & Inventory Systems & Services.   Professional Business Services principally covers business valuation, consultancy and agency, mortgage and insurance services, and business appraisal.  Stock & Inventory Systems & Services covers stock audit and counting, compliance and food safety audits and inventory preparation and valuation, hospitality and cinema software.

 

2. Basis of preparation

The interim financial information in this report has been prepared using accounting policies consistent with IFRS as adopted by the European Union.  IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) and there is an ongoing process of review and endorsement by the European Commission.  The financial information has been prepared on the basis of IFRS that the Directors expect to be adopted by the European Union and applicable as at 31 December 2014. 

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2013, except for those noted below and except for the adoption of new standards and interpretations effective as of 1 January 2014.  Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

Several new standards and amendments apply for the first time in 2014. However, they do not materially impact the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group.

Non-statutory accounts

These consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'.  The financial information for the period ended 30 June 2014 set out in this interim report does not constitute the Group's statutory accounts for that period.  The statutory accounts for the year ended 31 December 2013 have been delivered to the Registrar of Companies.  The auditors reported on those accounts; their report was unqualified, did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.  The financial information for the periods ended 30 June 2014 and 30 June 2013 is unaudited. 

3. Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future.   The resulting accounting estimates will, by definition, seldom equal the related actual results.   The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are consistent with those applied to the consolidated financial statements for the year ended 31 December 2013.

4. Segment information

The Group is organised into two main business segments: Professional Business Services and Stock & Inventory Systems & Services. 

The reportable segment results for continuing operations for the period ended 30 June 2014 are as follows:

	Professional Business Services £'000	Stock & Inventory Systems & Services £'000	Other £'000	Group £'000
Total gross segment revenue	14,562	14,896	1,239	30,697
Inter-segment revenue	(52)	-	(1,239)	(1,291)
Revenue	14,510	14,896	-	29,406
Operating profit	831	264	(280)	815
Net finance charge				(177)
Profit before tax				638
Taxation				(311)
Profit for the period after tax				327

The reportable segment results for continuing operations for the period ended 30 June 2013 are as follows:

	Professional Business Services £'000	Stock & Inventory Systems & Services £'000	Other £'000	Group £'000
Total gross segment revenue	13,152	12,602	1,163	26,917
Inter-segment revenue	(52)	-	(1,163)	(1,215)
Revenue	13,100	12,602	-	25,702
Operating (loss) / profit before exceptional items	(923)	766	(116)	(273)
Exceptional items	(396)	-	-	(396)
Operating (loss) / profit after exceptional items	(1,319)	766	(116)	(669)
Net finance charges				(60)
Loss before tax				(729)
Taxation				(67)
Loss for the period after tax				(796)

The reportable segment results for continuing operations for the year ended 31 December 2013 are as follows:

	Professional Business Services £'000	Stock & Inventory Systems & Services £'000	Other £'000	Group £'000
Total gross segment revenue	28,404	25,854	2,473	56,731
Inter-segment revenue	(104)	-	(2,473)	(2,577)
Revenue	28,300	25,854	-	54,154
Operating profit / (loss) before exceptional items	936	1,100	(469)	1,567
Net finance (costs) /credit	(442)	-	-	(442)
Operating profit / (loss) after exceptional items	494	1,100	(469)	1,125
Net finance charge	(455)	(128)	(1)	(584)
Profit before tax				541
Taxation				(351)
Profit for the year after tax				190

The Group is not reliant on any key customers.

 

5. Taxation

During the period, as a result of the change in the UK corporation tax rate, the opening deferred tax balances have been re-measured. Deferred tax assets recognised at 1 January 2014 which had been measured at 21% at 31 December 2013 have been re-measured using the enacted rate that will apply at 31 December 2014 (20%).

Deferred tax assets have been recognised in respect of tax losses and other temporary differences giving rise to deferred tax assets where it is probable that these assets will be recovered.

The tax on the Group's profit / (loss) before tax differs from the theoretical amount that would arise using the standard rate of corporation tax in the UK of 21% due to £125,000 arising from the reduction in the value of the brought forward deferred tax asset and a further £15,000 arising from other movements in the deferred tax asset.

6. Discontinued operation

On 31 January 2013, Christie + Co FZ LLC, a 95% owned subsidiary of Christie Group plc, ceased trading following the Board's decision to voluntarily liquidate the operation. The operations of Christie + Co FZ LLC have been classified as a discontinued operation for the period ended 30 June 2013.

The results of Christie + Co FZ LLC are as follows:

		Half year to 30 June 2014 £'000 (Unaudited)	Half year to 30 June 2013 £'000 (Unaudited)	Year ended  31 December 2013 £'000
Revenue		-	9	9
Employee benefit expenses		-	-	-
		-	9	9
Other operating expenses		-	(38)	(38)
Operating loss		-	(29)	(29)
Finance costs		-	-	-
Loss from discontinued operations		-	(29)	(29)
Total comprehensive (losses) from discontinued operations		-	(29)	(29)

7. Earnings per share

Basic earnings per share 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, which excludes the shares held in the Employee Share Ownership Plan (ESOP) trust. 

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.   The Company has only one category of potential dilutive ordinary shares: share options.

The calculation is performed for the share options 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 outstanding share 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.

	Half year to 30 June 2014 £'000	Half year to 30 June 2013 £'000	Year ended 31 December 2013 £'000
Profit / (loss) from continuing operations attributable to equity holders of the Company	458	(796)	241
(Loss) from discontinued operations attributable to equity holders of the Company	-	(28)	(29)
Profit / (loss) from total operations attributable to equity holders of the Company	458	(824)	212
	30 June 2014 Thousands	30 June 2013 Thousands	31 December 2013 Thousands
Weighted average number of ordinary shares in issue	26,379	25,292	25,889
Adjustment for share options	1,133	263	466
Weighted average number of ordinary shares for diluted earnings per share	27,512	25,555	26,355
	30 June 2014 Pence	30 June 2013 Pence	31 December 2013 Pence
Basic earnings per share
Continuing operations	1.74	(3.15)	0.93
Discontinued operations	-	(0.11)	(0.11)
Total operations	1.74	(3.26)	0.82
Fully diluted earnings per share
Continuing operations	1.66	(3.15)	0.91
Discontinued operations	-	(0.11)	(0.11)
Total operations	1.66	(3.26)	0.80

8. Dividends

A final dividend in respect of the year ended 31 December 2013 of 1.0p per share, amounting to a total dividend of £262,000, was approved and paid to the Christie Group plc registrar on 27 June 2014.  The funds were transferred to shareholders on 04 July 2014.

An interim dividend in respect of 2014 of 0.75p per share, amounting to a dividend of £199,000, was declared by the directors at their meeting on 10 September 2014. These financial statements do not reflect this dividend payable.

The dividend of 0.75p per share will be payable to shareholders on the record on 26 September 2014. The ex-dividend date will be 24 September 2014. The dividend will be paid on 17 October 2014.

9. Share capital	30 June 2014		30 June 2013		31 December 2013
Ordinary shares of 2p each	Number	£'000	Number	£'000	Number	£'000
Authorised: At 1 January, 30 June and 31 December	30,000,000	600	30,000,000	600	30,000,000	600
Allotted and fully paid:
At beginning of period	26,526,729	531	25,263,551	505	25,263,551	505
Issue of shares	-	-	1,263,178	26	1,263,178	26
At end of period	26,526,729	531	26,526,729	531	26,526,729	531

The Company has one class of ordinary shares which carry no right to fixed income.

During 2013, the Company placed 1,263,178 new 2p Ordinary shares during the period. The shares were placed at 62p per share, raising a total of £784,000.

Investment in own shares

The Group has established an Employee Share Ownership Plan (ESOP) trust in order to meet its future contingent obligations under the Group's share option schemes.  The ESOP purchases shares in the market for distribution at a later date in accordance with the terms of the Group's share option schemes.  The rights to dividend on the shares held have been waived.

At 30 June 2014 advances by the Group to the ESOP to finance the purchase of ordinary shares during the period were £135,000 (30 June 2013: £nil; 31 December 2013: £39,000).  The market value at 30 June 2014 of the ordinary shares held in the ESOP was £309,000 (30 June 2013: £57,000; 31 December 2013: £121,000).   The investment in own shares represents 238,000 shares (30 June 2013: 91,000; 31 December 2013: 151,000) with a nominal value of 2p each.

10. Retirement benefit obligations

The Group operates two defined benefit schemes (closed to new members) providing pensions on final pensionable pay.  The contributions are determined by qualified actuaries on the basis of triennial valuations using the projected unit method.

When a member retires, the pension and any spouse's pension is either secured by an annuity contract or paid from the managed fund.  Assets of the schemes are reduced by the purchase price of any annuity purchase and the benefits no longer regarded as liabilities of the scheme.

The amounts recognised in the statement of comprehensive income and the movement in the liability recognised in the statement of financial position have been based on the forecast position for the year ended 31 December 2014 after adjusting for the actual contributions to be paid in the period.

The movement in the liability recognised in the statement of financial position is as follows:

Half year to  30 June 2014 £'000		Half year to  30 June 2013 £'000	Year ended 31 December 2013 £'000
Beginning of the period	4,796	10,000	10,000
Expenses included in the employee benefit expense	284	348	567
Contributions paid	(740)	(718)	(1,400)
Finance costs	124	8	468
Actuarial losses / (gains) recognised	2,393	(1,499)	(4,839)
End of the period	6,857	8,139	4,796

The amounts recognised in the income statement and statement of comprehensive income are as follows:

Half year to  30 June 2014 £'000		Half year to  30 June 2013 £'000	Year ended 31 December 2013 £'000
Current service cost	284	340	567
Total included in employee benefit expenses	284	340	567
Net interest cost	124	8	468
Total included in finance costs	124	8	468
Actuarial (losses) / gains	(2,393)	1,499	4,839
Total included in other comprehensive income / (losses)	(2,393)	1,499	4,839

The principal actuarial assumptions used were as follows:

	Half year to 30 June 2014 %	Half year to 30 June 2013 %	Year ended  31 December  2013 %
Inflation rate	3.2	3.2 - 3.3	3.2 - 3.3
Discount rate / expected return on plan assets	4.75	5.0 - 6.5	5.0
Future salary increases	3.2	3.2 - 3.3	3.2 - 3.3
Future pension increases	2.3 - 3.5	2.5 - 3.5	2.5 - 3.5

Assumptions regarding future mortality experience were consistent with those disclosed in the financial statements for the year ended 31 December 2013.

11.  Note to the cash flow statement

Cash (used in) / generated from operations

	Half year to  30 June 2014 £'000	Half year to 30 June 2013 £'000	Year ended 31 December 2013 £'000
Continuing operations
Profit / (loss) for the period	327	(796)	190
Adjustments for:
- Taxation	311	67	351
- Finance costs	53	60	116
- Depreciation	213	285	411
- Amortisation of intangible assets	60	23	153
- Profit on sale of property, plant and equipment	(1)	(28)	(42)
- Foreign currency translation	10	20	102
- Increase / (decrease) in provisions	67	(439)	(672)
- Movement in share option charge	60	43	61
- Retirement benefits	(332)	(370)	(365)
- Decrease/ (increase) in non-current other receivables	34	-	(184)
Changes in working capital (excluding the effects of exchange differences on consolidation):
- Decrease in inventories	-	1	1
- Decrease in trade and other receivables	(1,653)	(1,198)	(9)
- Increase /(decrease) in trade and other payables	106	771	(121)
Cash used in continuing operations	(745)	(1,561)	(8)
Discontinued operations
(Loss) for the period	-	(29)	(29)
Adjustments for:
- Finance costs	-	-	-
- Depreciation	-	-	-
- Loss on sale of property, plant and equipment	-	24	24
- Foreign currency translation	-	1	1
Changes in working capital (excluding the effects of exchange differences on consolidation):
- Decrease in trade and other receivables	-	28	28
- Decrease in trade and other payables	-	(371)	(371)
Cash used in discontinued operations	-	(347)	(347)
Cash used in operations	(745)	(1,908)	(355)

 12. Cash and cash equivalents include the following for the purposes of the cash flow statement:

	Half year to  30 June 2014 £'000	Half year to 30 June 2013 £'000	Year ended 31 December 2013 £'000
Cash and cash equivalents	421	334	1,747
Bank overdrafts	(2,993)	(3,358)	(3,877)
	(2,572)	(3,024)	(2,130)

13. Related-party transactions

There is no controlling interest in the Group's shares.

During the period rentals of £159,000 (30 June 2013: £155,000; 31 December 2013: £310,000) were paid to Carmelite Property Limited, a company incorporated in England and Wales, and jointly owned by The Christie Group Pension and Assurance Scheme, The Venners Retirement Benefit Fund and The Fitzroy Square Pension Fund, by Christie Group plc in accordance with the terms of a long-term lease agreement.

14. Publication of Interim Report

The 2014 Interim Financial Statements are available on the Company's website www.christiegroup.com

 

END

 

 

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