Preliminary Results

RNS Number : 0964L

Christie Group PLC

17 April 2018

 

17 April 2018

Christie Group plc
Preliminary results for the 12 months ended 31 December 2017

Christie Group plc ('Christie Group' 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 announce its preliminary results for the 12 months ended 31 December 2017.

Key points:

·      Revenue growth of 11.1% to £71.6m (2016: £64.5m)

·      Operating profit of £3.8m (2016: £1.1m before exceptional items)
 

·      Earnings per share of 9.47p per share (2016: 5.41p per share)

·      Total dividend for the year increased to 2.75p per share (2016: 2.50p per share)

·      Strong recovery in revenue and operating profit from the PBS division, with revenue up 15.9% on the prior year

·      PBS operating profit up to £5.3m (2016: £1.7m before exceptional items)

·      Strong revenue from corporate M&A activity set to continue in 2018

·      Challenging year for retail stocktaking within the SISS division

·      Improved terms on a number of major contracts should have a marked and positive impact on SISS performance in 2018

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

"2017 saw an encouraging rebound in performance following a disrupted 2016. Looking ahead, 2018 has started well. We have a good volume of Client M&A transactions in progress. As a result, we anticipate our first half performance will be significantly ahead of last year's first half performance."

Enquiries:

Christie Group plc
David Rugg Chairman and Chief Executive	020 7227 0707
Daniel Prickett Chief Operating Officer	020 7227 0700
Simon Hawkins Group Finance Director	020 7227 0700
Panmure Gordon (UK) Limited Dominic Morley / Charles Leigh-Pemberton Nominated Adviser & Broker	020 7886 2906

Notes to Editors:

Christie Group plc (CTG.L), quoted on AIM, is a leading professional business services group with 44 offices across the UK, Europe and Canada, catering to its specialist markets in the hospitality, leisure, healthcare, medical, childcare & education and retail 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.

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.

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

CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW OF THE YEAR

Results for the year

We achieved full-year revenue of £71.6m in 2017, an increase of 11% on the prior year (2016: £64.5m). Operating profit before exceptional items, at £3.8m (2016: £1.1m), was broadly in line with expectations and represented a solid recovery to 2015 levels. Earnings per share rose to 9.47p per share (2016: 5.41p per share), an encouraging rebound in performance following the previously referred to disruption to our markets caused by the referendum on the UK's continued membership of the European Union.

The increase in overall revenue was mainly attributable to higher volumes in transaction-related business, but with simultaneous growth in stocktaking revenue our two main divisions continue to remain well balanced with 57% of our revenues generated by Professional Business Services ("PBS") and 43% percent is attributable to Stock and Inventory Systems and Services ("SISS").

The strong recovery in PBS revenues translated to a much-improved operating profit from the division. Conversely, we continued to deal with some challenges in our SISS division but, having made significant progress in this division in recent months, we are optimistic of its prospects for 2018.

Continuity and change

This is my first report to you since becoming your Chairman in September 2017. Since then we have implemented a board refresh and, whilst retaining continuity amongst the current executive directors, we have sought to bring on board new non-executive directors with appropriate business backgrounds and skills.

It was over 40 years ago that my predecessor as Chairman, Philip Gwyn, assembled a small nucleus of colleagues at Christie & Co, then a small business sales agency. Motivated by a desire to provide clients with the high-quality services they required to acquire and operate their businesses, we developed the diverse international Group that our shareholders own today. The unique nature of Christie Group stands as a tribute to Philip. We appreciate the brilliance and fortitude with which Philip directed our Group and grew the business through recurring business cycles. It is fitting that he has agreed to become our Life President.

I would also like to place on record our gratitude to Pommy Sarwal who has recently stepped down as an independent non-executive director. His incisive advice has made an immense contribution over the past 12 years.

Along with these changes, we have taken the opportunity to refresh the make-up of the board. I now combine both the Chair and Chief Executive functions.  Dan Prickett has stepped into the new role of Chief Operating Officer, while Simon Hawkins -  formerly Finance Director at Christie & Co, Christie Finance and Christie Insurance -  has been promoted to Group Finance Director.

We were also delighted to welcome two new non-executive directors to the board this year who will add fresh perspectives to our deliberations. Hwfa Gwyn joined the board in September as an advocate for shareholder interests. Laurie Benson joined the board in November following an independent selection process. Laurie brings the benefit of three decades in the communications, digital media and technology sector.

The Group Board oversees its constituent businesses as a cooperating portfolio of branded services. The trading businesses operate within a framework set at Group level. The Group Board formulates overall strategy; it seeks to maximise synergies and pursue growth opportunities, as well as safeguard the Group's commercial resilience by maintaining a balanced portfolio and controlling centralised treasury operations.

The subsidiaries maintain strong operational structures, each with their own managing directors, finance directors and senior management.

We are also taking the opportunity to review our professional advisors and in December announced the appointment of Grant Thornton UK LLP as auditors.

We have initiated a strategy review to look afresh at our businesses and our services. This encompasses looking at the niches we dominate or have a strong presence in to ensure that operating margins remain worthwhile, while also identifying available markets that may warrant further investment. As part of this process we have identified management succession in each of our trading businesses.

People are key to our businesses and the services we provide. We commissioned an external review of our recruitment processes. We recognise that our future success lies in attracting and retaining the best talent. Following on from this we will be taking the opportunity to ensure we continue to develop the skills and experiences of future leaders by circulating those throughout the group both through a transfer of employment and on a project basis.

On a related note, we have instigated a review of the training which we carry out in our businesses and the accreditations and qualifications we pursue to ensure that these are best aligned to our business requirements. Equally important is to offer our staff a visible opportunity for career development and progression. We are taking the opportunity to evaluate what financial assistance may be available to us through recouping the apprenticeship levy.

Our outsourced services

Our stocktaking businesses provide an outsourced service for our clients. Given recent press comment on revenue recognition of contracting in the outsourced sector, I am pleased to be able to take this opportunity to clarify that our revenue - whilst invariably contracted - is provided on a per job or per diem basis. We are entitled to invoice the full value of the services provided as and when work has been carried out and this we do. We hold no outsource contracts where it is necessary to calculate, estimate and apportion revenue and profits across the lifespan of a several years' contract.

Professional Business Services

Our PBS division drove revenue to a total of £40.6m (2016: £35.0m) an increase of 15.9% over the previous year. The primary drivers were an increase in regional transactional derived income emanating from additional hires engaged in the proceeding 3 years, as well as strong revenue from corporate M&A activity in certain key and emerging markets. Our financial services income also continues to grow.

Increases in the Living Wage have hit those labour-intensive sectors we operate in. For example, Care Homes employ large numbers of staff at the minimum wage. In Restaurants & Retail shops this has been compounded by an increase in property rates. As a result, our Agency business Christie & Co has seen some increase in distress based transactions. Through the advent of C.V.A.s some distress will transfer to landlords through increased voids and the prospect of re-letting at reduced rents. Inevitably, distress leads to increased business advisory & disposal work.

Stock and Inventory Systems and Services

Notwithstanding a challenging year in retail stocktaking, we nonetheless succeeded in growing total revenue by 5.3% to £31.0m for (2016: £29.5m). A strong performance by our hospitality stocktaking business was augmented by continued growth in our European retail stocktaking activity.

Orridge negotiated a difficult trading period during 2017. The company sharpened its focus by separating its activities into three main areas - Retail, Supply Chain and Pharmacy - but it faced tough trading conditions. The retail sector has proved particularly challenging but growth in the supply chain services continued. The pharmacy-related business continues to win accounts.

In the past, some of our competitors have tried to grow or retain market share by agreeing contracts on uneconomic terms, but the unsustainability of this policy is increasingly clear. Pricing is at last beginning to return to more sensible levels. Orridge has been able to negotiate improved terms for a series of major contracts. This new pricing should have a marked and positive impact on its profitability in 2018.

Outside of the UK, Orridge's German operation grew into profit during the second half of 2017 and its Belgian business continues to add profitable work in France.

In 2017, Venners faced unprecedented demand for its services and we expect this strong level of demand to continue. This demand, combined with an ability to efficiently train the skilled stocktakers who are key to delivering its services, provide the foundation for further growth in 2018.

Vennersys has broadly completed the development of its online ticketing business as a cloud-based application offered via a SaaS delivery model. The successful migration of existing major clients, together with several client wins this year, creates a solid platform for future profitable growth. 

Business intelligence

Our 30-strong hotel consultancy team shares its expertise with a growing roster of international investors. Its 2017 report, European Travel Trends and Hotel Investment Hot Spots presented the key factors most likely to affect hotel occupancy and revenue rates in European destinations, such as airport capacity and connectivity, average spend per day and the relative importance of particular feeder markets for specific locations. This kind of detailed business intelligence is highly prized by potential investors.

We have again been reviewing the UK healthcare market in depth. Our Adult Social Care 2017 report built on a 2016 report on nursing staff. The 2017 report focused on the problem of bed-blocking and the associated funding and staffing challenges. The report highlighted a 96 percent drop in EU citizens taking up nursing positions in the UK since the EU referendum. It identified the lack of district and community nurses as a key contributory factor perpetuating bed blocking and concluded that the UK urgently needs to take steps globally to attract skilled nursing staff from elsewhere.

European integration

We have looked at the implications of Brexit. These we believe, so far, are operationally neutral. The property based businesses we serve are immovable. Our staff serving these businesses are primarily domestically-based in the countries concerned. Our pan-European consulting team can be based in any convenient hub.

As a service business, we are less likely to be directly affected by the ultimate shape of the Brexit deal. Our international network is founded not on regulatory harmonisation but on the underlying forces driving globalisation.

The hotel sector, for example, which is an important European market for us, is built on the internationalisation of brands. Because demand is brand-driven, the underlying ownership of the branded assets can be traded by us without effecting performance. Brexit is, in our view, unlikely to affect demand for the businesses we sell or the services we provide.

Looking ahead

Our core objective remains to initially regain previous profit levels by continuing to provide a unique but deliberately constructed combination of professional services for business owners and operators in our sectors.

Looking ahead, 2018 has started well. We have a good volume of Client M&A transactions in progress. As a result, we anticipate our first half performance will be significantly ahead of last year's first half performance. We have assumed no material adverse impact from current events in Syria.

We are a Group with the scale, scope and ambition to broaden and deepen its services and profit from its international footprint. We approach the future with energy and enthusiasm.

Your directors recommend a final dividend of 1.75p per share (2016: 1.5p per share), increasing the dividend to a total of 2.75p for the year (2016: 2.5p). If approved the dividend will be paid on 6 July 2018 to those shareholders on the register on 8 June 2018.

David Rugg
Chairman and Chief Executive

Consolidated Income Statement
For the year ended 31 December 2017

	Note	2017 Total £'000	Restated (*) 2016       Total £'000
Revenue	3	71,635	64,488
Employee benefit expenses		(48,978)	(45,866)
		22,657	18,622
Depreciation and amortisation		(902)	(798)
Impairment reversal/(charge)		61	(194)
Other operating expenses		(18,048)	(16,489)
Operating profit before exceptional items		3,768	1,141
Exceptional items	2	-	1,328
Operating profit after exceptional items		3,768	2,469
Finance costs		(162)	(193)
Pension scheme finance costs		(463)	(432)
Finance income		3	-
Total finance costs		(622)	(625)
Profit before tax		3,146	1,844
Taxation		(699)	(537)
Profit after tax		2,447	1,307
Profit for the period after tax attributable to:
Equity shareholders of the parent		2,496	1,423
Non-controlling interest		(49)	(116)
		2,447	1,307
Earnings per share attributable to equity holders - pence
Profit attributable to the equity holders of the Company
-Basic	5	9.47	5.41
-Fully diluted	5	9.43	5.32

All amounts derive from continuing activities.

(*) Refer to note 7 for full details of the restatement of 2016 figures. This restatement has resulted in no change to the previously reported revenue, an increase in operating profit before and after exceptional items of £121,000, an £82,000 increase in finance costs and a £39,000 increase in profit before tax. Profit after tax has increased by £18,000. Basic earnings per share for 2016 are restated at 5.41 pence per share (previously 5.35 pence per share).

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2017

				2017 Total £'000		Restated (*) 2016 Total £'000
Profit after tax				2,447		1,307
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations				3		184
Net other comprehensive income to be reclassified to profit or loss in subsequent years				3		184
Items that will not be reclassified subsequently to profit or loss:
Actuarial gains/(losses) on defined benefit plans				3,233		(8,054)
Income tax effect				(548)		1,011
Net other comprehensive income/(losses) not being reclassified to profit or loss in subsequent years				2,685		(7,043)
Other comprehensive income/(losses) for the year net of tax				2,688		(6,859)
Total comprehensive income/(losses) for the year				5,135		(5,552)

  Total comprehensive income/(losses) attributable to:

Equity shareholders of the parent		5,184	(5,436)
Non-controlling interest		(49)	(116)
		5,135	(5,552)

(*) Refer to note 7 for full details of the restatement of 2016 figures.

Consolidated Statement of Changes in Shareholders' Equity

As at 31 December 2017

Attributable to the Equity Holders of the Company
	Share capital £'000	Fair value and other reserves (Note 23) £'000	Cumulative translation reserve £'000	Retained earnings £'000	Non - controlling interest £'000	Total equity £'000
Balance at 1 January 2016 (*)	531	5,207	472	(9,025)	(454)	(3,269)
Profit/(loss) for the year after tax	-	-	-	1,423	(116)	1,307
Items that will not be reclassified subsequently to profit or loss	-	-	-	(7,043)	-	(7,043)
Items that may be reclassified subsequently to profit or loss	-	-	184	-	-	184
Total comprehensive income/(losses) for the year	-	-	184	(5,620)	(116)	(5,552)
Movement in respect of employee share scheme	-	20	-	-	-	20
Employee share option scheme:
-value of services provided	-	238	-	-	-	238
Acquisition of non-controlling interest	-	-	-	(241)	241	-
Dividends paid	-	-	-	(657)	-	(657)
Balance at 31 December 2016 (*)	531	5,465	656	(15,543)	(329)	(9,220)
Balance at 1 January 2017	531	5,465	656	(15,543)	(329)	(9,220)
Profit/(loss) for the year after tax	-	-	-	2,496	(49)	2,447
Items that will not be reclassified subsequently to profit or loss	-	-	-	2,685	-	2,685
Items that may be reclassified subsequently to profit or loss	-	-	3	-	-	3
Total comprehensive income/(losses) for the year	-	-	3	5,181	(49)	5,135
Movement in respect of employee share scheme	-	(82)	-	-	-	(82)
Employee share option scheme:
-value of services provided	-	229	-	-	-	229
Dividends paid	-	-	-	(657)	-	(657)
Balance at 31 December 2017	531	5,612	659	(11,019)	(378)	(4,595)

(*) Refer to note 7 for full details of the restatement of 2016 figures.

Consolidated Statement of Financial Position

At 31 December 2017

			2017 £'000	Restated (*) 2016 £'000	Restated (*) 2015 £'000
Assets
Non-current assets
Intangible assets - Goodwill			1,841	1,812	1,703
Intangible assets - Other			1,368	1,241	1,066
Property, plant and equipment			3,565	3,559	3,227
Deferred tax assets			3,142	3,901	3,266
Available-for-sale financial assets			635	635	635
Other receivables			182	182	182
			10,733	11,330	10,079
Current assets
Inventories			25	29	6
Trade and other receivables			14,873	13,226	12,027
Current tax assets			4	357	45
Cash and cash equivalents			4,692	1,638	3,621
			19,594	15,250	15,699
Total assets			30,327	26,580	25,778
Equity
Share capital			531	531	531
Fair value and other reserves			5,612	5,465	5,207
Cumulative translation reserve			659	656	472
Retained earnings			(11,019)	(15,543)	(9,025)
			(4,217)	(8,891)	(2,815)
Non-controlling interest			(378)	(329)	(454)
Total equity			(4,595)	(9,220)	(3,269)
Liabilities
Non-current liabilities
Trade and other payables			436	249	-
Retirement benefit obligations			14,241	18,106	11,958
Borrowings			1,644	1,663	1,809
Provisions			188	167	155
			16,509	20,185	13,922
Current liabilities
Trade and other payables			11,703	8,916	9,085
Current tax liabilities			230	152	-
Borrowings			5,616	5,686	4,288
Provisions			864	861	1,752
			18,413	15,615	15,125
Total liabilities			34,922	35,800	29,047
Total equity and liabilities			30,327	26,580	25,778

(*) Refer to note 7 for full details of the restatement of 2016 figures.

Consolidated Statement of Cash Flows

For the year ended 31 December 2017

	Note	2017 £'000	Restated (*) 2016 £'000
Cash flow from operating activities
Cash generated from/(used in) operations	6	5,171	(826)
Interest paid		(162)	(193)
Tax paid		(160)	(243)
Net cash generated from/(used in) operating activities		4,849	(1,262)
Cash flow from investing activities
Purchase of property, plant and equipment (PPE)		(575)	(855)
Proceeds from sale of PPE		3	16
Intangible asset expenditure - software		(460)	(453)
Interest received		3	-
Net cash used in investing activities		(1,029)	(1,292)
Cash flow from financing activities
Repayment of bank loan		(17)	(85)
(Repayments)/proceeds from invoice finance		(12)	371
Repayment of finance lease liabilities		(6)	(6)
Dividends paid		(657)	(657)
Net cash used in financing activities		(692)	(377)
Net increase/(decrease) in cash		3,128	(2,931)
Cash and cash equivalents at beginning of year		(2,932)	17
Exchange losses on euro bank accounts		(20)	(18)
Cash and cash equivalents at end of year		176	(2,932)

The accompanying notes are an integral part of these financial statements.

(*) Refer to note 7 for full details of the restatement of 2016 figures.

NOTES TO THE PRELIMINARY ANNOUNCEMENT

1.    BASIS OF PREPARATION

The financial information set out in this announcement does not comprise the Company's statutory accounts for the years ended 31 December 2017 or 31 December 2016.  

The financial information has been extracted from the statutory accounts of the Company for the years ended 31 December 2017 and 31 December 2016. The auditors reported on those accounts; their reports were unqualified. The audit report for the year ended 31 December 2017 contains an emphasis of matter without qualifying the report which draws attention to the prior year restatement, details of which are set out in note 7.

The statutory accounts for the year ended 31 December 2016 have been delivered to the Registrar of Companies, whereas those for the year ended 31 December 2017 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in April 2018.

The accounting policies adopted are consistent with those applied in the 2016 financial statements.

2.    EXCEPTIONAL ITEMS

	2017 £'000	2016 £'000
Reduction in past service costs relating to defined benefit pension schemes	-	1,328
	-	1,328

In relation to both of its defined benefit pension schemes the Group has completed consultations relating to the indexation increases which may be applied to future increases in pensionable salary for active members of both schemes. The result is a reduction in aggregated scheme liabilities of £nil (2016 £1,328,000).

3.    SEGMENT INFORMATION

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

The segment results for the year ended 31 December 2017 are as follows:

	Professional Business Services £'000	Stock & Inventory Systems &  Services £'000	Other £'000	Group £'000
Total gross segment sales	40,726	31,018	2,992	74,736
Inter-segment sales	(109)	-	(2,992)	(3,101)
Revenue	40,617	31,018	-	71,635
Operating profit/(loss) (**)	5,298	(1,085)	(445)	3,768
Finance costs	(342)	(187)	(93)	(622)
Profit before tax				3,146
Taxation				(699)
Profit for the year after tax				2,447

The segment results for the year ended 31 December 2016 are as follows:

	Professional Business Services £'000	Stock & Inventory Systems &  Services £'000	Other £'000	Restated (*) Group £'000
Total gross segment sales	35,139	29,455	3,533	68,127
Inter-segment sales	(106)	-	(3,533)	(3,639)
Revenue	35,033	29,455	-	64,488
Operating profit/(loss) before exceptional items (**)	1,664	(110)	(413)	1,141
Exceptional items	973	286	69	1,328
Operating profit/(loss) after exceptional items (**)	2,637	176	(344)	2,469
Finance costs	(314)	(142)	(169)	(625)
Profit before tax				1,844
Taxation				(537)
Profit for the year after tax				1,307

(*) Refer to note 7 for full details of the restatement of 2016 figures.

(**) Operating profit/(loss) excludes intercompany royalties. 

The segment assets and liabilities at 31 December 2017 and capital expenditure for the year then ended are as follows:

	Professional Business Services £'000	Stock & Inventory Systems &  Services £'000	Other £'000	Group £'000
Assets	10,431	10,129	6,621	27,181
Deferred tax assets				3,142
Current tax assets				4
				30,327
Liabilities	15,620	8,517	3,295	27,432
Borrowings				7,260
Current tax liabilities				230
				34,922
Capital expenditure	204	750	81	1,035

The segment assets and liabilities at 31 December 2016 and capital expenditure for the year are as follows:

	Professional Business Services £'000	Stock & Inventory Systems &  Services £'000	Other £'000	Group £'000
Assets	9,088	7,571	5,663	22,322
Deferred tax assets				3,901
Current tax assets				357
				26,580
Liabilities	17,429	7,331	3,539	28,299
Borrowings				7,349
Current tax liabilities				152
				35,800
Capital expenditure	799	492	17	1,308

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating cash.  They exclude taxation.

Segment liabilities comprise operating liabilities. They exclude items such as taxation and corporate borrowings.

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

The Group manages its operating segments on a global basis.  The UK is the home country of the parent. The Group's revenue is mainly generated in Europe.

Revenue is allocated below based on the entity's country of domicile.

	2017 £'000		2016 £'000
Revenue
Europe	71,249		64,122
Rest of the World	386		366
	71,635		64,488
Total segment assets are allocated based on where the assets are located.
		2017 £'000	Restated (*) 2016 £'000
Total segment assets
Europe		27,119	22,148
Rest of the World		62	174
		27,181	22,322

4.    DIVIDENDS

A dividend in respect of the year ended 31 December 2017 of 1.75p per share, amounting to a total dividend of £464,000 is to be proposed at the Annual General Meeting on 14 June 2018. These financial statements do not reflect this proposed dividend.

5.    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 year, which excludes the shares held in the Employee Share Ownership Plan (ESOP) trust.

	2017 £'000	Restated (*) 2016 £'000
Profit attributable to equity holders of the Company	2,496	1,423
	Thousands	Thousands
Weighted average number of ordinary shares in issue	26,346 100	26,295 472
Adjustment for share options
Weighted average number of ordinary shares for diluted earnings per share	26,446	26,767
	Pence	Pence
Basic earnings per share	9.47	5.41
Fully diluted earnings per share	9.43	5.32

(*) Refer to note 7 for full details of the restatement of 2016 figures.

6.    NOTES TO THE CASH FLOW STATEMENT

Cash generated from/(used in) operations

	2017 £'000	Restated (*) 2016 £'000
Profit for the year after tax	2,447	1,307
Adjustments for:
Taxation	699	557
Finance costs	159	193
Past service costs	-	(1,328)
Depreciation	569	521
Amortisation of intangible assets	333	277
(Profit) on sale of PPE	(3)	(10)
Foreign currency translation	16	18
Increase/(decrease) in provisions	24	(879)
Share option charge	229	238
Movement in retirement benefit obligation	(632)	(578)
Movement in working capital:
Increase/(decrease) in inventories	3	(23)
(Decrease) in trade and other receivables	(1,647)	(1,199)
Increase in trade and other payables	2,974	80
Cash generated/(used in) from operations	5,171	(826)

(*) Refer to note 7 for full details of the restatement of 2016 figures.

7.    PRIOR YEAR RESTATEMENT

The Board have reviewed their previously adopted accounting treatment in relation to two indirectly held subsidiary entities, which were previously not consolidated by virtue of being considered to be immaterial contingent net assets.

Having considered the requirements of IFRS 10 the Board have restated the Consolidated Statement of Financial Position as at 1 January 2016 and 31 December 2016, the Consolidated Income Statement for the year ended 31 December 2016, and all other elements of the financial statements so affected. In doing so, the consolidated financial statements are now prepared recognising Atrium Holdings Limited and P.H. UK Limited as indirectly but wholly owned subsidiaries of Christie Group plc and recognise that indirect beneficial ownership of both entities has vested with Christie Group plc since 30 April 2015.

The effect on the Consolidated Income Statement for 2016 is set out below:

			Previously reported 2016 £'000	Restated 2016 £'000	Impact of restatement £'000
Revenue			64,488	64,488	-
Operating expenses			(63,468)	(63,347)	121
Operating profit before exceptional items			1,020	1,141	121
Exceptional items			1,328	1,328	-
Operating profit after exceptional items			2,348	2,469	121
Finance costs			(543)	(625)	(82)
Profit before tax			1,805	1,844	39
Taxation			(516)	(537)	(21)
Profit after tax			1,289	1,307	18
Earnings per share attributable to equity holders - pence
-       Basic			5.35	5.41	0.06
-       Fully diluted			5.25	5.32	0.07

The effect on the Statement of Financial Position as at 31 December 2016 was as follows:

			Previously reported 2016 £'000	Restated 2016 £'000	Impact of restatement £'000
Property, plant and equipment			1,468	3,559	2,091
Other receivables			451	182	(269)
Cash and cash equivalents			1,637	1,638	1
Trade and other payables			(8,883)	(8,916)	(33)
Current borrowings			(5,624)	(5,686)	(62)
Non-current borrowings			(1)	(1,663)	(1,662)
Other assets and liabilities (net)			1,666	1,666	-
Net assets / (liabilities)			(9,286)	(9,220)	66

Property, plant and equipment has been restated to recognise P.H. UK Limited's ownership of the freehold property of Pinder House, 249 Upper Third Street, Milton Keynes, MK9 1DS.

Current and non-current borrowings are restated to include amounts payable by Atrium Holdings Limited and its immediate and wholly owned subsidiary undertaking, P.H. UK Limited. Borrowings within these companies are without direct recourse to any other group company, including Christie Group plc. The bank loan is secured against the freehold property noted above.

The impact of the restatement of the opening Statement of Financial Position for 2016, as at 1 January 2016, was an increase in net assets at that date of £48,000.

Report and Accounts

Copies of the 2017 Annual Report and Accounts will be posted to shareholders in May.  Further copies may be obtained by contacting the Company Secretary at the registered office.  Alternatively, the 2017 Annual Report and Accounts will be available to download from the investor relations section on the Company's website www.christiegroup.com 

Key dates

The Annual General Meeting of the Company is scheduled to take place at 10.00am on Thursday 14th June 2018 at Whitefriars House, 6 Carmelite Street, London, EC4Y 0BS. 

Group Companies

Professional Business Services

Christie & Co

Christie & Co is a leading specialist firm providing business intelligence in the hospitality, leisure, healthcare, medical, childcare & education and retail sectors. It employs the largest teams of sector specialists in the UK & Europe providing professional agency, valuation and consultancy services.

www.christie.com www.christiecorporate.com

Christie Finance

Christie Finance has 40 years' experience in financing businesses in the hospitality, leisure, healthcare, medical, childcare & education, retail and medical sectors. Christie Finance prides itself on its speed of response to client opportunities and its strong relationships with finance providers.

www.christiefinance.com

Christie Insurance

With over 40 years' experience arranging business insurance in the hospitality, leisure, healthcare, retail and medical sectors, Christie Insurance is a leading company in its markets. It delivers and exceeds clients' expectations in terms of the cost of their insurance and the breath of its cover.

www.christieinsurance.com

Pinders

Pinders is the UK's leading specialist business appraisal, valuation and consultancy company, providing professional services to the licensed, leisure, retail and care sectors, and also the commercial and corporate business sectors. Pinders staff use business analysis and surveying skills to look ay the detail of the businesses to arrive at accurate assessments of their trading potential and value.

www.pinders.co.uk

Stock & Inventory Systems & Services

Orridge

Orridge is Europe's longest established stocktaking business specialising in all fields of retail stocktaking including high street, warehousing & factory operations, pharmacy and supply chain services. Orridge prides itself on the speed in supplying high quality management information to its clients.

www.orridge.co.uk

Venners
Venners is the leading supplier of stocktaking, inventory, consultancy services and related stock management systems to the hospitality sector. Venners is the largest and longest established stock audit company in the sector in the UK.

www.venners.com

Vennersys
Vennersys operates in the UK and North America with over 20 years experience delivering online Cloud-based ticketing sales and admission systems to visitor attractions. Examples include historic houses & estates, zoos, safari parks, playcentres and cinemas.

www.vennersys.com  www.vennersys.ca

 

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