Unaudited Full Year Results

RNS Number : 5777P

Creston PLC

09 June 2015

 



Creston plc

('Creston' or the 'Group')

Unaudited Full Year Results for the Year Ended 31 March 2015

Creston plc (LSE: CRE), the marketing communications group, today announces its full year results for the year ended 31 March 2015.

Financial Highlights

·    Revenue up 3 per cent to £76.9 million (2014: £74.9 million)

·    Like-for-like¹ revenue up 2 per cent to £76.6 million (2014: £74.9 million), constant currency² like-for-like revenue up 3 per cent

·    Headline³ PBIT⁴ up 2 per cent to £10.0 million (2014: £9.8 million), constant currency Headline PBIT up 3 per cent

·    Headline PBT⁵ up 2 per cent to £9.9 million (2014: £9.6 million), constant currency Headline PBT up 3 per cent

·    Headline DEPS⁶ up 11 per cent to 13.07 pence (2014: 11.79 pence)

·    Proposed full year dividend up 8 per cent to 4.20 pence per share (2014: 3.90 pence per share)

·    Net cash of £8.3 million (2014: £7.5 million)

Operational and Corporate Highlights

·    Launch of new strategy including new Group brand and offer, Creston Unlimited, alongside rebranding of Group companies

·    International partnership with Serviceplan Gruppe ('Serviceplan') to extend the Group's European offer

·    Acquisition of niche, market-leading neuroscience specialist, Walnut Unlimited

·    Increased new business wins in the period

·    Digital and online revenue up 7 per cent in absolute terms representing 55 per cent (2014: 53 per cent) of Group revenue

·    Group share buy-back in year of 1,572,359 shares for £1.8 million at an average price of 111 pence per share

·    New Board appointments following succession planning

Post period end

·    Acquisition of 51 per cent of How Splendid Ltd, a digital design and development consultancy, to create Splendid Unlimited

·    Strategic investment for a 27 per cent stake in advertising agency, 18 Feet & Rising Ltd

·    Partnerships with Future Foundation (Global Consumer Trends); The Digital Consultancy (Digital Strategy) and Propeller Communications (Digital Healthcare Communications in the US)

·    Appointment of Nigel Lingwood as Non-Executive Director

Commenting on the results, Barrie Brien, Group Chief Executive of Creston plc, said:

"One year into our new five year strategy there is a real feeling of momentum and energy across our Group. A fantastic team effort has seen us achieve a huge amount in the last 12 months. The launch of a new Group brand and offer, a Group-wide rebrand, three acquisitions and four partnerships have all been delivered alongside award-winning work for our global clients, a strong new business performance, growth in our financial results, and an increased dividend to our shareholders.

We are encouraged by the early successes in our new strategy which give us a strong platform to deliver value to shareholders over the medium term."

Group Financial Results

	2015	2014	% change
Revenue (£ million)	76.9	74.9	3%
Headline PBIT (£ million)	10.0	9.8	2%
Reported PBIT (£ million)	9.8	7.4	32%
Headline PBIT margin (%)	13%	13%	0%
Headline DEPS (pence)	13.07	11.79	11%
Reported DEPS (pence)	12.45	8.52	46%
Dividend per share (pence)	4.20	3.90	8%

There will be a presentation for analysts today at 9.30am at the offices of Rothschild, New Court, St Swithin's Lane, London EC4N 8AL

For further information on the Group's full year results or about the analyst meeting please contact:

Creston plc	+ 44 (0)20 7930 9757
Barrie Brien, Group Chief Executive
Kathryn Herrick, Chief Financial Officer
Bell Pottinger	[phone]
Elly Williamson/Lucy Stewart

About Creston plc

Creston plc (LSE: CRE), incorporating the Creston Unlimited group offer, is a marketing communications group delivering a range of digital technology-based marketing solutions to blue-chip global clients. Encompassing consultants and discipline experts from across the industry and beyond, Creston Unlimited unlocks the power of creative collaboration to realise the opportunities that exist for brands and businesses in today's rapidly evolving world. www.creston.com / www.creston-unlimited.com  

Group Chief Executive's Statement

Overview

In the 12 months under review, the Group has delivered a good financial and operational performance and achieved significant progress in implementing its five year strategic plan.

The Group is reporting year-on-year growth across full year revenue, Headline PBT, Headline Diluted EPS and dividend. Revenue grew 3 per cent against the prior year to £76.9 million (2014: £74.9 million) with like-for-like revenue up 2 per cent to £76.6 million (2014: £74.9 million); Headline PBT rose 2 per cent to £9.9 million (2014: £9.6 million); while Headline Diluted EPS was 13.07 pence (2014: 11.79 pence), an 11 per cent increase.

On a constant currency basis higher growth was achieved, with like-for-like revenue growth of 3 per cent to £76.8 million (2014: £74.9 million) and Headline PBT growth of 3 per cent to £9.9 million (2014: £9.6 million). Due to the slight strengthening of sterling against the US dollar there is a currency exchange impact on our US operations' results which merits this separate reporting in constant currency.

The proposed full year dividend also increased 8 per cent to 4.20 pence per share (2014: 3.90 pence per share). At the year end, the Group had a strong balance sheet with net cash of £8.3 million (2014: £7.5 million).

Strategy

At the start of the year I set out, and we began, the implementation of the new Group strategy for the next five years.

In summary this strategy is to:

·      build an agency group brand

·      develop a group full service client offer

·      develop our consultancy offer

·      invest in our existing companies' offer and services

·      grow our international services

Following the launch of our new agency group brand and offer, Creston Unlimited in November 2014, and the simultaneous rebrand of all Creston companies with the Unlimited suffix, we have spent the subsequent six months beginning to build out this offer. Having previously identified with the Board where the gaps in our full service lie, we have commenced a programme of targeted investments, acquisitions and partnerships to add these complementary skills and expertise to the Group.

To this end, on 22 April 2015 we announced the acquisition of 51 per cent of How Splendid Ltd, a digital design and development consultancy, to form Splendid Unlimited. The acquisition is consistent with Creston's strategy to continue growing its digital marketing consultancy offer, which will help clients with a key element of their brand's digital transformation and the complementary services are expected to create significant cross selling and client referral opportunities with the rest of the Group. The acquisition also adds some significant new clients to the Group such as Barclaycard, Boots, Gamesys, News UK, Skrill, SSE and Star Alliance, two of which will enter the Group's Top 20 clients in terms of revenue.

Furthermore we announced today our strategic investment for a 27 per cent stake in advertising agency, 18 Feet & Rising, thereby adding another key discipline to our offer. When working jointly on new or existing clients, 18 Feet & Rising will be known as 18 Feet & Rising Unlimited.

To manage the growth of our business in a prudent manner and to ensure we retain a strong balance sheet, the Board has approved a programme of building strong partnerships in addition to undertaking strategic acquisitions. During the course of FY15, and post the period end, we have entered into four such partnerships - each in a very distinct and complementary area, and in each case when working jointly with Creston Unlimited the partner will adopt the Unlimited brand.

Our international services, which represent almost one third of Group revenue, have been enhanced through signing two new recent partners. In November 2014, we signed a partnership agreement with Serviceplan, the leading independent marketing communications agency group in Europe. Having worked with Serviceplan in the past, this agreement cemented our existing relationship and has already resulted in a number of new client referrals and joint pitches. Indeed, since our formal partnership, Creston Unlimited and Serviceplan have already won joint CRM assignments for Danone in Germany and the Middle East.

In April 2015 we signed our second international partner, Propeller Communications - a digital healthcare communications agency based in the US. Also in April we signed with Future Foundation, the global consumer trends and insight consultancy, to complement our insight offer and with the digital strategist, The Digital Consultancy, to add to our consultancy offer alongside Splendid Unlimited.

Embedded in the Creston Unlimited proposition is our ability to work together collaboratively, creating agile bespoke teams to solve the big brand and business challenges that our clients face. We've already seen some early successes and are pleased with the level of opportunities arising from this new way of working.

Not only does the launch of Creston Unlimited allow us to pitch for new full service business, but it is also facilitating the referral of clients across multiple disciplines, as clients recognise us as a more united innovative Group. For example, long standing clients Canon and Danone now have five and six Unlimited companies servicing them respectively, compared to just two Group companies four years ago. 

Additionally, while playing a full part in Creston Unlimited, our individual companies have continued to service clients in their core markets and disciplines and have had a successful year in terms of new business revenue, which has grown year-on-year. This growth has been predominantly driven by our leading innovative digital capabilities, as evidenced by the rise in our digital and online revenue which increased 7 per cent in absolute terms to represent 55 per cent (2014: 53 per cent) of Group revenue.

Business Review

Following the launch of Creston Unlimited, with its collaborative team-led approach to meeting client needs, the Group no longer operates on a divisional basis. The Group's insight capabilities will be an important part of the Group's new consultancy offer and will also closely support our communications companies, and as such, the former Communications and Insight divisions are reported as one division, Communications & Insight. The Group will continue to have an important specialism in health marketing, which will still be reported separately.

The respective revenue, Headline PBIT and percentage contributions for Communications & Insight and Health are as follows:

2015	Revenue		Headline PBIT
	£ million	% of Group	£ million	% of Group (excluding Head Office costs)
Communications & Insight	56.2	73%	8.1	65%
Health	20.7	27%	4.3	35%

Communications & Insight

	2015	2014
Revenue (£ million)	56.2	53.6
Contribution to Group revenue (%)	73%	72%
Headline PBIT (£ million)	8.1	8.3
Reported PBIT (£ million)	7.9	7.3
Headline PBIT margin (%)	14%	15%

Revenue for Communications & Insight increased by 5 per cent during the period to £56.2 million (2014: £53.6 million). Headline PBIT declined slightly to £8.1 million (2014: £8.3 million) due to the adverse impact of the weakening Euro in the second half of the year on a few Euro based revenue contracts, and temporary additional freelancer costs incurred following a strong new business performance. 

Whilst, as previously reported, the division carried an additional £0.5 million of property related costs in the first half of the year, we have managed to fully mitigate this incremental cost following a successful rates review across a number of our properties in the latter part of the year.

Significant new business wins during the period include work for new and existing clients: Activision, Allianz Arthritis Research UK, ASDA, Barilla, Bentley, Deezer, McCarthy & Stone, Mclaren, Mind Candy, Sainsbury's Energy, Sky, Sony Mobile, Superfast Broadband and Vue Cinemas. Post period end wins include Costa and further assignments from Canon.

Health

	2015	2014
Revenue (£ million)	20.7	21.3
Contribution to Group revenue (%)	27%	28%
Headline PBIT (£ million)	4.3	4.5
Reported PBIT (£ million)	4.7	4.0
Headline PBIT margin (%)	21%	21%

Health reported a revenue decline of 3 percent to £20.7 million (2014: £21.3 million) and Headline PBIT decline of 4 per cent to £4.3 million (2014: £4.5 million). Like-for-like revenue, adjusting for the acquisition of Liberation Unlimited on 1 August 2013, declined 4 per cent to £20.5 million (2014: £21.3 million).

On a constant currency basis, the decline was reduced, with revenue decreasing by 2 per cent to £20.8 million (2014: £21.3 million), like-for-like revenue decreasing by 3 per cent to £20.6 million (2014: £21.3 million) and Headline PBIT decreasing 3 per cent to £4.3 million (2014: £4.5 million).

Following a strong first half revenue growth of 6 per cent, and as reported in our Q3 IMS on 3 February 2015, our third quarter revenue performance was impacted by some client budget cuts and project delays within the UK health business, which also affected the division's final quarter revenue. Consequently, where required, actions were taken in the fourth quarter to re-align the cost base to this revenue.

Reported PBIT for the division was £4.7 million (2014: £4.0 million), with the difference between Headline and Reported PBIT largely due to a revaluation credit of the contingent deferred consideration for DJM Unlimited, which was reported within our half year results statement on 25 November 2014. This was due to project delays and cancellations, partly in relation to a failed clinical trial in the first half of the year.

Significant new business wins during the period include work for Abbott, Baxter, Bayer, Danone, International AIDS Society, Parent Project Muscular Dystrophy and Unilever and we've continued to expand our remit with existing clients including: CDC, Novartis, National Meningitis Association, Pfizer and Sanofi.

People

It's been an incredibly busy year for everyone in the Group and I would like to thank all my colleagues for their continued hard work for our clients, and the enthusiasm and support they have shown for our new strategy. Implementing a new strategic plan is very time consuming and we can be proud of how much we have achieved together in a short space of time.

Recognition by our industry in the form of awards is a very compelling endorsement and I am proud of every award our Group wins. I have no doubt we have some of the most innovative, forward thinking people in our sector and it's great to see this reflected by the year-on-year growth in awards - 35 awards and 61 shortlists in the calendar year 2014.

Board

As previously announced a number of plc Board changes took effect during the year. I became Group Chief Executive on 1 April 2014 and Kathryn Herrick joined the Board and Group as Chief Financial Officer on 1 July 2014.

David Grigson stepped down from his role as Non-Executive Chairman at the Group's AGM on 8 September 2014, and was replaced as Non-Executive Chairman and Chairman of the Nomination Committee by Richard Huntingford, an existing member of the Board.

The Group also announced two further Board changes on 28 October 2014. Effective 1 November 2014 Kate Burns joined the Board as Non-Executive Director and Chairman of the Remuneration Committee and, effective 30 November 2014, David Marshall stepped down from the Board as Non-Executive Director.

Finally, post period end on 5 June 2015, the Group announced that, effective 1 July 2015, Nigel Lingwood will join the Board as Non-Executive Director. Following the AGM in September 2015, Nigel will become Senior Independent Director and Chairman of the Audit Committee. At the same time the Group announced that, after nine years, and following a handover to Nigel in September 2015 of the Audit Chair, Andrew Dougal will step down from the Board as Non-Executive Director at the end of November 2015.

Dividend

Following the growth in Headline Diluted EPS and the Group's net cash position combined with our outlook, the Board recommends a final dividend of 2.85 pence per share (2014: 2.70 pence per share). This, with the half year dividend of 1.35 pence per share (2014: 1.20 pence per share), gives a proposed full year dividend of 4.20 pence per share (2014: 3.90 pence per share), representing an 8 per cent increase compared to the prior year.

Summary and Outlook

One year into our new five year strategy there is a real feeling of momentum and energy across our Group. A fantastic team effort has seen us achieve a huge amount in the last 12 months. The launch of a new Group brand and offer, a Group-wide rebrand, three acquisitions and four partnerships have all been delivered alongside award-winning work for our global clients, a strong new business performance, growth in our financial results, and an increased dividend to our shareholders.

We are encouraged by the early successes in our new strategy which give us a strong platform to deliver value to shareholders over the medium term.

Barrie Brien

Group Chief Executive

Financial Review

Headline results

For the financial year ended 31 March 2015, Group revenue increased by 3 per cent to £76.9 million (2014: £74.9 million) and Group Headline PBIT increased by 2 per cent to £10.0 million (2014: £9.8 million) maintaining the Headline PBIT margin at 13 per cent (2014: 13 per cent). Group Headline PBT increased by 2 per cent to £9.9 million (2014: £9.6 million) and Headline Diluted Earnings Per Share (DEPS) increased 11 per cent to 13.07 pence (2014: 11.79 pence) with this growth being enhanced due to a reduction in the Group's effective tax rate and its share buy-back programme.

Growth in Headline results was delivered despite Sterling continuing to strengthen against the Euro during the year. With a few Euro based revenue contracts the Group's revenue and Headline PBIT growth has unfortunately been impacted by these currency movements. Given that further GBP:EUR volatility is expected management are working to renegotiate Euro denominated contracts where possible, and are considering available hedging arrangements.

Headline items

Headline items consist of certain items which are eliminated from Reported results to enable a better understanding of the underlying performance of the Group (see note 4 and note 5 for further detail), the material items of which were:

(i) Creston Unlimited rebranding

Creston Unlimited rebranding costs of £0.4 million have been excluded from the Headline PBIT measure. These incremental and non-recurring costs are as a result of the launch of our new agency group brand and offer, Creston Unlimited, in November 2014 and the simultaneous rebrand of all our Creston companies with the Unlimited suffix.

(ii)   Movement in fair value of contingent deferred consideration

Following the end of the earn out period for DJM Unlimited and Cooney Waters Unlimited there has been a reduction of contingent deferred consideration resulting in a credit to the Consolidated income statement of £0.3 million and £0.04 million respectively. This credit has been excluded from the Headline PBIT measure.

(iii)  Acquisition and start-up related costs

Acquisition and start-up costs of £0.3 million have been excluded from the Headline PBIT measure. These include £0.2 million in deal related costs incurred during the year in relation to the post year end acquisition of Splendid Unlimited with the remaining balance relating to trading losses associated with the brand and creative consultancy, Loooped Unlimited in its first year of trading.

Reported results

Group Reported PBIT increased by 32 per cent to £9.8 million (2014: £7.4 million) primarily due to one-off costs that were incurred in the prior year following the London co-location and restructuring within the Insight division. As a result the Group Reported PBIT margin has increased to 13 per cent (2014: 10 per cent), and Group Reported PBT increased 34 per cent to £9.6 million (2014: £7.2 million). Group Reported DEPS increased 46 per cent to 12.45 pence (2014: 8.52 pence) with this growth being enhanced due to a reduction in the Group's effective tax rate and its share buy-back programme. Note 4 to the full year results presents a reconciliation between Headline and Reported results.

Key performance indicators

The Group manages its operational performance through a number of key performance indicators (KPIs). The principal ones are as follows:

	Financial year ended 31 March 2015	Financial year ended 31 March 2014
Revenue	£76.9 million	£74.9 million
Revenue from digital and online	55%	53%
Revenue from international	32%	32%
Revenue per head	£90,100	£91,900
Headline EBITDA	£11.7 million	£11.6 million
Headline PBIT	£10.0 million	£9.8 million
Headline PBIT per head	£11,700	£12,000
Headline PBIT margin	13%	13%
*Adjusted cash conversion	74%	65%
Net cash	£8.3 million	£7.5 million
Net cash including contingent deferred consideration	£6.9 million	£5.7 million

*Adjusted cash conversion is the ratio of adjusted operating cash flow to Headline EBITDA, where adjusted operating cash flow excludes the movement in net proceeds on operating lease as described in note 12. The movement in net proceeds on operating lease impacts the adjusted operating cash flow for FY14 only.

Balance sheet

As at 31 March 2015, the Group was in a net cash position of £8.3 million (2014: £7.5 million). The net cash including contingent deferred consideration liabilities of £1.4 million (£0.3 million for the Cooney Waters Group Unlimited and £1.1 million for DJM Unlimited) was £6.9 million (2014: £5.7 million).

Cash flow performance

During the financial year, the adjusted operating cash flow was £8.6 million (2014: £7.5 million). The working capital position increased to £4.2 million (2014: £1.9 million) which resulted in a cash conversion ratio of adjusted operating cash flow to Headline EBITDA of 74 per cent (2014: 65 per cent). The increase in working capital position was predominantly due to a reduction in deferred revenue, where scope for pre-billing has reduced across a few of our clients. Management continues to place significant emphasis on managing working capital effectively and this has resulted in a five year cumulative cash conversion of 83 per cent.

Net finance costs

Despite the Group being in a net cash position throughout the year, Headline net finance costs were £0.1 million (2014: £0.1 million) due to the interest paid as a non-utilisation fee for the revolving credit facility. Headline net finance costs were covered by Headline EBITDA 78 times (2014: 78 times).

The Reported net finance costs were £0.2 million (2014: £0.2 million), which includes a notional finance charge relating to the deferred consideration payments of £0.03 million (2014: £0.1 million).

Refinance

The Group's banking facility has been successfully renegotiated post year end to include a £25 million revolving credit facility on improved terms plus an optional £10 million accordion.

Effective tax rate

The Headline tax rate is 21 per cent (2014: 25 per cent) and the Reported tax rate is 23 per cent (2014: 27 per cent). The Reported tax rate is slightly higher than the Headline rate as it includes the deferred tax charge on amortisation deductions claimed in respect of Goodwill acquired in the US, which is added back as a Headline adjustment. Both the Headline and Reported rates have fallen from 2014 as a result of the drop in the UK statutory tax rate from 23 per cent down to 21 per cent, in addition to the release of a prior year US tax provision, to reflect the correct closing liability following the agreement of prior period returns.

In future periods we would expect the Headline tax rate to be slightly higher than the UK statutory rate as a consequence of the higher tax rates in the US.

Share buy-back

In light of its cash position and share price at the time, the Group announced on 11 June 2014 that it would commence a share buy-back programme of up to £2 million. As at 31 March 2015, a total of 1,572,359 shares had been bought back during the financial year costing £1.8 million at an average price of 111 pence. The remaining balance of £0.2 million will be utilised dependent on the share price performance.

Post year end acquisition

On the 22 April 2015 the Group acquired 51 per cent of the share capital of How Splendid Ltd ('Splendid'), a London-based digital design and development consultancy.

On completion there was an initial cash consideration payment of £8.7 million funded from Group's existing cash resources and Splendid retained net current assets of c.£2 million, including cash of £1 million. A balance sheet surplus payment will be made of c.£0.2 million for the net current assets in the completion balance sheet in excess of the pre-agreed minimum requirement of £1.1 million. There will be a further final cash consideration payment of up to £7 million in June 2017 for the 51 per cent holding, based on average profit before interest and tax from April 2015 to March 2017.

For the remaining share capital there are no put options, however Creston will have the option to acquire a further 24 per cent from April 2017 for a value up to £8.6 million and for the remaining 25 per cent from April 2019 for a value up to £11.9 million. The consideration for both these call options, payable in cash, will be calculated at a pre-agreed multiple applied to the average profit before interest and tax for the year in which the call option is exercised and the two years preceding the call.

Today the Group made a strategic investment in 18 Feet & Rising, a London based advertising agency. The investment represents a 27 per cent stake, and 50 per cent of the £1 million cash payment for the shareholding will be invested in the business to help accelerate its future growth. For the financial year ended 31 December 2014, 18 Feet & Rising grew revenue by over 24 per cent to £2.7 million.

Kathryn Herrick

Chief Financial Officer

UNAUDITED CONSOLIDATED INCOME STATEMENT

for the year ended 31 March 2015

		Note			Unaudited  Year ended 31 March 2015 £'000	Audited Year ended 31 March 2014 £'000
Turnover (billings)				100,135		101,850
Revenue		5		76,878		74,878
Operating costs				(67,081)		(67,471)
Profit before finance income, finance costs and taxation		4		9,797		7,407
Finance income				10		-
Finance costs				(184)		(203)
Profit before taxation		4		9,623		7,204
Taxation		6		(2,216)		(1,969)
Profit for the year		4		7,407		5,235
Attributable to:
Equity holders of the parent				7,321		5,128
Non-controlling interest				86		107
				7,407		5,235
Basic earnings per share (pence)		7		12.48		8.55
Diluted earnings per share (pence)		7		12.45		8.52
Headline profit before finance income, finance costs and taxation		4		10,001		9,766
Headline profit before taxation		4		9,852		9,617
Headline profit for the year		4		7,775		7,207

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2015

		Unaudited Year ended 31 March 2015 £'000	Audited Year ended 31 March 2014 £'000
Profit for the year		7,407	5,235
Other comprehensive income/(expense):
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations		1,298	(1,007)
Other comprehensive income/(expense) for the year, net of tax		1,298	(1,007)
Total comprehensive income for the year		8,705	4,228
Attributable to:
Equity holders of the parent		8,619	4,121
Non-controlling interest		86	107
		8,705	4,228

UNAUDITED CONSOLIDATED BALANCE SHEET

as at 31 March 2015

	Note		Unaudited as at  31 March 2015 £'000		Audited as at 31 March 2014 £'000
Non-current assets
Intangible assets
Goodwill	9		105,381		103,792
Other			1,256		1,193
Property, plant and equipment			3,985		4,619
Deferred tax assets			1,141		987
			111,763		110,591
Current assets
Inventories and work in progress			1,001		905
Trade and other receivables			28,195		28,948
Cash and cash equivalents	11		8,312		7,452
			37,508		37,305
Current liabilities
Trade and other payables			(25,559)		(28,519)
Corporation tax payable			(1,328)		(1,147)
Provision for contingent deferred consideration	10		(1,384)		-
			(28,271)		(29,666)
Net current assets			9,237		7,639
Total assets less current liabilities			121,000		118,230
Non-current liabilities
Trade and other payables			(2,078)		(2,674)
Provision for contingent deferred consideration	10		-		(1,711)
Provision for other liabilities and charges			(841)		(782)
Deferred tax liabilities			(808)		(505)
			(3,727)		(5,672)
Net assets			117,273		112,558
Equity
Called up share capital			6,134		6,134
Share premium account			35,943		35,943
Own shares			(3,371)		(1,679)
Shares to be issued			423		929
Other reserves			30,822		30,822
Foreign currency translation reserve			568		(730)
Retained earnings			46,668		41,032
Equity attributable to equity holders of parent			117,187		112,451
Non-controlling interest			86		107
Total equity			117,273		112,558

UNAUDITED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2015

	Called up share capital	Share premium	Own shares	Shares to be issued	Other reserves	Foreign currency translation reserve	Retained earnings	Total attributable to equity holders of parent	Non-controlling interest	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Changes in equity for 2015 (Unaudited)
At 1 April 2014	6,134	35,943	(1,679)	929	30,822	(730)	41,032	112,451	107	112,558
Profit for the year	-	-	-	-	-	-	7,321	7,321	86	7,407
Other comprehensive income:
Exchange differences on translation of foreign operations	-	-	-	-	-	1,298	-	1,298	-	1,298
Total comprehensive income for the year	-	-	-	-	-	1,298	7,321	8,619	86	8,705
Credit for share-based incentive schemes	-	-	-	335	-	-	-	335	-	335
Transfer between reserves in respect of lapsed share options	-	-	-	(683)	-	-	683	-	-	-
Exercise of share award	-	-	60	(158)	-	-	-	(98)	-	(98)
Gain on employee benefit trust	-	-	-	-	-	-	16	16	-	16
Purchase of treasury shares	-	-	(1,752)	-	-	-	-	(1,752)	-	(1,752)
Dividends (note 8)	-	-	-	-	-	-	(2,384)	(2,384)	(107)	(2,491)
At 31 March 2015	6,134	35,943	(3,371)	423	30,822	568	46,668	117,187	86	117,273

	Called up share capital	Share premium	Own shares	Shares to be issued	Other reserves	Foreign currency translation reserve	Retained earnings	Total attributable to equity holders of parent	Non-controlling interest	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Changes in equity for 2014 (Audited)
At 1 April 2013	6,134	35,943	(656)	1,167	30,822	277	37,863	111,550	58	111,608
Profit for the year	-	-	-	-	-	-	5,128	5,128	107	5,235
Other comprehensive expense:
Exchange differences on translation of foreign operations	-	-	-	-`	-	(1,007)	-	(1,007)	-	(1,007)
Total comprehensive (expense)/income for the year	-	-	-	-	-	(1,007)	5,128	4,121	107	4,228
Credit for share-based incentive schemes	-	-	-	126	-	-	-	126	-	126
Transfer between reserves in respect of lapsed share options	-	-	-	(364)	-	-	364	-	-	-
Purchase of treasury shares	-	-	(1,023)	-	-	-	-	(1,023)	-	(1,023)
Dividends	-	-	-	-	-	-	(2,323)	(2,323)	(58)	(2,381)
At 31 March 2014	6,134	35,943	(1,679)	929	30,822	(730)	41,032	112,451	107	112,558

 

UNAUDITED CONSOLIDATED STATEMENT OF CASHFLOWS
for the year ended 31 March 2015

	Note		Unaudited Year ended 31 March 2015 £'000	Audited Year ended 31 March 2014 £'000
Profit for the year			7,407	5,235
Taxation			2,216	1,969
Profit before taxation			9,623	7,204
Finance income			(10)	-
Finance costs			184	203
Profit before finance income, finance costs and taxation			9,797	7,407
Depreciation of property, plant and equipment			1,491	1,657
Amortisation of intangible assets			162	282
Share based payments charge			490	267
Charge for future acquisition payments to employees deemed as remuneration			12	252
Movement in fair value of contingent deferred consideration			(384)	(29)
Loss on disposal of property, plant and equipment			4	56
Loss on disposal of intangible assets			1	2
(Increase)/decrease in inventories and work in progress			(78)	160
Decrease/(increase) in trade and other receivables			982	(3,617)
(Decrease)/increase in trade and other payables			(3,828)	1,080
Adjusted operating cash inflow			8,649	7,517
Outflow of proceeds on operating lease	12		-	(3,688)
Operating cash inflow			8,649	3,829
Tax paid			(2,003)	(2,647)
Net cash inflow from operating activities			6,646	1,182
Investing activities
Finance income			10	-
Purchase of property, plant and equipment			(787)	(1,513)
Proceeds from sale of property, plant and equipment			5	-
Purchase of intangible assets			(181)	(152)
Net cash outflow from investing activities			(953)	(1,665)
Financing activities
Finance costs			(200)	(112)
Net decrease in borrowings			-	(10)
Dividends paid			(2,384)	(2,323)
Dividends paid to non-controlling interest			(107)	(58)
Purchase of treasury shares			(1,752)	(1,023)
Net cash outflow from financing activities			(4,443)	(3,526)
Increase/(decrease) in cash and cash equivalents			1,250	(4,009)
Cash and cash equivalents at start of year	11		7,452	11,208
Effect of foreign exchange rates			(390)	253
Cash and cash equivalents at end of year	11		8,312	7,452

NOTES TO THE FULL YEAR RESULTS STATEMENT
for the year ended 31 March 2015

1.         Presentation of financial information

The financial information set out herein does not constitute the company's statutory accounts for the years ended 31 March 2015 or 2014, within the meaning of section 434 of the Companies Act 2006.  Statutory accounts for 2014 have been delivered to the Registrar of Companies.  The auditors have reported on these 2014 accounts and their report was (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under section 498(2) or (3) of the Companies Act 2006.  Copies of the statutory accounts for 31 March 2015 will be distributed to shareholders in advance of the Annual General Meeting and will be delivered to the Registrar of Companies upon approval.

2.         Basis of Preparation

The information has been prepared in accordance with the EU-adopted International Financial Reporting Standards (IFRS) and IFRIC interpretations and with those parts of the Companies Act 2006 which are applicable to companies reporting under IFRS, however, this full year statement in itself does not contain sufficient information to comply with IFRS. The Group Financial Statements are consolidated and include all Group entities. The Company's domicile and country of incorporation is England and Wales, and both its registered office and Head Office are located at Creston House, 10 Great Pulteney Street, London W1F 9NB.

The financial statements have been prepared in sterling, the currency in which the majority of the Group's transactions are denominated, on the historical cost basis, except where IFRS as adopted by the European Union requires a fair value adjustment, and on a going concern basis.

3.         Accounting policies

The full year results were prepared in accordance with the policies disclosed in the 2014 audited Annual Report and Accounts and the policies as described in note 2 above.

The following standards, amendments and interpretations are relevant to the Group, but not yet effective and have not been early adopted by the Group:

IFRS 9 'Financial instruments' (effective for periods beginning on or after 1 January 2018).  This standard on classification and measurement of financial assets and financial liabilities will replace IAS 39, 'Financial instruments: Recognition and measurement'.  IFRS 9 has two measurement categories: amortised cost and fair value.  All equity instruments are measured at fair value.  A debt instrument is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest.  For liabilities, the standard retains most of the IAS 39 requirements.

The following standards, amendments and interpretations were adopted by the Group during the period:

IFRS 10, 'Consolidated financial statements' and amendments to IAS 32, 'Financial instruments: Presentation'.  The adoption of these amendments did not have a material impact on the Financial Statements.

4.         Reconciliation of Headline profit to Reported profit

In order to enable a better understanding of the underlying trading of the Group, the Board refers to Headline PBIT, PBT and PAT which eliminate certain amounts from the Reported figures.  These break down into two parts:

(i)         Certain accounting policies which have a material impact and introduce volatility to the Reported figures. These are acquisition related costs, amortisation of acquired intangible assets, movement in the fair value of contingent deferred consideration, future acquisition payments to employees deemed as remuneration and notional finance costs on future contingent deferred consideration. These charges will cease once all the relevant earn-out and related obligations have been settled; and

(ii)         exceptional non-recurring operating charges, which consist of start-up and restructuring related costs, property related costs, Creston Unlimited rebranding costs and the impairment of goodwill.

See note 5, segmental analysis, for further explanation of the nature of Headline items incurred within the respective periods.

 

Year ended 31 March 2015

	PBIT £'000	PBT £'000	PAT £'000
Headline	10,001	9,852	7,775
Acquisition and start-up related costs	(271)	(271)	(271)
Property related costs	88	88	88
Creston Unlimited rebranding	(393)	(393)	(393)
Movement in fair value of contingent deferred consideration	384	384	384
Future acquisition payments to employees deemed as remuneration	(12)	(12)	(12)
Notional finance cost on future contingent deferred consideration	-	(25)	(25)
Deferred tax charge on amortisation of goodwill	-	-	(223)
Taxation impact	-	-	84
Reported	9,797	9,623	7,407
Headline Basic EPS (pence)			13.10
Headline Diluted EPS (pence)			13.07
Reported Basic EPS (pence)			12.48
Reported Diluted EPS (pence)			12.45

Year ended 31 March 2014
	PBIT £'000	PBT £'000	PAT £'000
Headline	9,766	9,617	7,207
Property related costs	(1,446)	(1,446)	(1,446)
Acquisition, start-up and restructuring related costs	(630)	(630)	(630)
Amortisation of acquired intangibles	(60)	(60)	(60)
Movement in fair value of contingent deferred consideration	29	29	29
Future acquisition payments to employees deemed as remuneration	(252)	(252)	(252)
Notional finance cost on future contingent deferred consideration	-	(54)	(54)
Deferred tax charge on amortisation of goodwill	-	-	(147)
Taxation impact	-	-	588
Reported	7,407	7,204	5,235
Headline Basic EPS (pence)			11.84
Headline Diluted EPS (pence)			11.79
Reported Basic EPS (pence)			8.55
Reported Diluted EPS (pence)			8.52

5.         Segmental analysis

The chief operating decision maker has been identified as the Executive Board of Directors, which makes the strategic decisions. During the year the way in which the Executive Board review the performance of the Group's components, and subsequently allocate resources to these components has changed, and as such the Group's reportable operating segments have also changed accordingly. The Executive Board now reviews the performance of the Group using two divisions, these being Communications & Insight and Health.

The principal activities of the two divisions are as follows:

Communications & Insight

The Communications & Insight division delivers a range of digital technology based marketing solutions to blue-chip global clients.  Services include: advertising, brand strategy, customer relationship marketing (CRM), digital and direct marketing, local marketing, market research using qualitative and quantitative face-to-face, telephone and online data collection techniques, social media marketing and public relations.

Health

The Health division provides an integrated communications solution to the healthcare and pharmaceutical sector and offers services which include advertising, advocacy, digital and direct marketing, public relations, issues and reputation management and medical education.

The Executive Board assesses the performance of the operating segments based on a measure of revenue and Headline PBIT.  This measurement basis excludes the effects of certain amounts from the operating segments, such as amortisation of acquired intangible assets, acquisition, start-up and restructuring related costs, property related costs, Creston Unlimited rebranding, movement in fair value of contingent deferred consideration, impairment of goodwill, future acquisition payments to employees deemed as remuneration and notional finance costs on contingent deferred consideration.

Accounting policies are consistent across the reportable segments.

All significant assets and liabilities are located within the UK and the USA. The Executive Board does not review the assets and liabilities of the Group on a divisional basis and therefore has chosen to adopt the amendments to IFRS 8 which permit not segmenting the assets and liabilities of the Group.

Other information provided to the Board of Directors is measured in a manner consistent with that in the Financial Statements.

Divisional segmentation

Turnover, revenue, Headline and Reported profit before finance income and finance costs (PBIT), and profit before tax (PBT) attributable to Group activities are shown below:

	Communications & Insight	Health	Head Office	Group
Year ended 31 March 2015	£'000	£'000	£'000	£'000
Turnover (billings)	76,599	23,536	-	100,135
Revenue	56,156	20,722	-	76,878
Headline PBIT	8,112	4,319	(2,430)	10,001
Acquisition and start-up related costs	(240)	(31)	-	(271)
Property related costs			88	88
Creston Unlimited rebranding	-	-	(393)	(393)
Movement in fair value of contingent deferred consideration	-	384	-	384
Future acquisition payments to employees deemed as remuneration	(20)	8	-	(12)
Reported PBIT	7,852	4,680	(2,735)	9,797
Finance income	-	-	10	10
Finance costs	-	-	(159)	(159)
Notional finance cost on future contingent deferred consideration	-	(25)	-	(25)
Profit before taxation	7,852	4,655	(2,884)	9,623
Taxation				(2,216)
Profit for the period				7,407

Acquisition and start-up costs of £0.3 million have been excluded from the Headline PBIT measure for the year ended 31 March 2015. These include £0.2 million in deal related costs incurred during the year in relation to the post year end acquisition of Splendid Unlimited with the remaining balance relating to trading losses associated with the brand and creative consultancy, Loooped in its first year of trading.

A property related credit of £0.1 million has been excluded from the Headline PBIT measure following a rebate of costs incurred during the vacant period of Creston House which were previously excluded from the Headline PBIT measure in a prior period.

Creston Unlimited rebranding costs of £0.4 million have been excluded from the Headline PBIT measure for the year ended 31 March 2015.  These incremental and non-recurring costs are as a result of the launch of our new agency group brand and offer, Creston Unlimited, in November 2014 and the simultaneous rebrand of all our Creston companies with the Unlimited suffix.

Following the end of the earn out period for DJM Unlimited and Cooney Waters Unlimited there has been a reduction of contingent deferred consideration resulting in a credit to the Consolidated income statement of £0.3 million and £0.04 million respectively for the year ended 31 March 2015. These amounts have been excluded from the Headline PBIT measure.

	Communications & Insight	Health	Head Office	Group
Year ended 31 March 2014	£'000	£'000	£'000	£'000
Turnover (billings)	77,829	24,021	-	101,850
Revenue	53,592	21,286	-	74,878
Headline PBIT	8,268	4,497	(2,999)	9,766
Property related costs	(534)	-	(912)	(1,446)
Acquisition, start-up and restructuring related costs	(435)	(195)	-	(630)
Amortisation of acquired intangibles	-	(60)	-	(60)
Movement in fair value of contingent deferred consideration	-	29	-	29
Future acquisition payments to employees deemed as remuneration	-	(252)	-	(252)
Reported PBIT	7,299	4,019	(3,911)	7,407
Finance costs	-	-	(149)	(149)
Notional finance cost on future contingent deferred consideration	-	(54)	-	(54)
Profit before taxation	7,299	3,965	(4,060)	7,204
Taxation				(1,969)
Profit for the period				5,235

Property related costs of £1.4 million have been excluded from the Headline PBIT measure for the year ended 31 March 2014. These costs include £0.9 million recognised within the Head Office result, relating to the costs incurred during the vacant period of Creston House, including double rent, rates and service charge.

The remaining £0.5 million included within the total £1.4 million of property related costs for the year relates to move costs and double rent, rates and service charge on existing leases; these have been recognised within the respective divisional result. As the economic benefit obtained during the year ended 31 March 2014 was in excess of the £0.5 million incurred under the existing leases, a provision for these costs was not made as at 31 March 2013.

Acquisition, start-up and restructuring related costs of £0.6 million have been excluded from the Headline PBIT measure for the year ended 31 March 2014. These consist of £0.4 million in closure costs and trading losses for Vitaris and restructuring costs within the Communications & Insight division, and £0.2 million in start-up costs associated with the brand and creative consultancy, Loooped in its first year of trading.

Geographical segmentation

The following table provides an analysis of the Group's turnover and revenue by geographical market, irrespective of the origin of the services:

			Turnover				Revenue
		Year ended 31 March 2015		Year ended 31 March 2014		Year ended 31 March 2015		Year ended 31 March 2014
		£'000		£'000		£'000		£'000
UK		66,404		70,376		52,282		50,949
Rest of Europe		19,209		18,471		12,383		12,779
Rest of the World (including USA)		14,522		13,003		12,213		11,150
		100,135		101,850		76,878		74,878

6.         Taxation

The Headline tax rate is 21 per cent (2014: 25 per cent) and the Reported tax rate is 23 per cent (2014: 27 per cent).  The Reported tax rate is slightly higher than the Headline rate as it includes the deferred tax charge on amortisation deductions claimed in respect of Goodwill acquired in the US, which is added back as a Headline adjustment.  Both the Headline and Reported rates have fallen from 2014 as a result of the drop in the UK statutory tax rate from 23 per cent down to 21 per cent, in addition to the release of a prior year US tax provision, to reflect the correct closing liability following the agreement of prior period returns.

In future periods we would expect the Headline tax rate to be slightly higher than the UK statutory rate as a consequence of the higher tax rates in the US.

 7.        Earnings per share

	Headline				Reported
	Year ended 31 March 2015		Year ended 31 March 2014			Year ended 31 March 2015	Year ended 31 March 2014
Earnings
Profit for the year (£'000)		7,775	7,207			7,407	5,235
Attributable to:
Non-controlling interest (£'000)		86	107			86	107
Equity holders of the parent (£'000)		7,689	7,100			7,321	5,128
Number of shares
Weighted average number of shares		58,679,091	59,951,901			58,679,091	59,951,901
Dilutive effect of shares		140,664	244,459			140,664	244,459
		58,819,755	60,196,360			58,819,755	60,196,360
Earnings per share
Basic earnings per share (pence):		13.10	11.84			12.48	8.55
Diluted earnings per share (pence):		13.07	11.79			12.45	8.52

The Headline EPS and Headline DEPS are based on the Headline PBT attributable to the equity holders of the parent analysed in note 4 less attributable tax and divided by the weighted average number of shares and by the weighted average number of diluted shares respectively.

Diluted earnings per share has been calculated based on the dilutive impact of 604,349 employee share options which were outstanding as at 31 March 2015 (31 March 2014: 714,059).

8.         Dividends

	Unaudited 2015 £'000	Audited 2014 £'000
Amounts recognised as distributions to shareholders in the year:
Prior year final dividend of 2.70 pence per share (2014: 2.67 pence per share)	1,600	1,610
Interim dividend of 1.35 pence per share (2014: 1.20 pence per share)	784	713
Total	2,384	2,323

A final dividend of 2.85 pence (2014: 2.70 pence) per share equivalent to £1,652,255 is recommended to be paid on 11 September 2015 to shareholders on the register on 7 August 2015. The final dividend will be recognised in the FY16 accounts, should it be approved by shareholders at the AGM.

9.         Goodwill

Goodwill represents the excess of cost of acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary at the date of acquisition.

	Goodwill on consolidation £'000
Cost
At 1 April 2013 (Audited)	105,022
Exchange differences	(1,230)
At 31 March 2014 (Audited)	103,792
Exchange differences	1,589
At 31 March 2015 (Unaudited)	105,381
Net book amount
At 31 March 2015 (Unaudited)	105,381
At 31 March 2014 (Audited)	103,792

In accordance with the Group's accounting policy, the carrying value of goodwill and other intangible assets are not subject to systematic amortisation but are reviewed annually for impairment. The review assesses whether the carrying value of goodwill could be supported by the recoverable amount which is determined through value in use calculations of each cash generating unit ('CGU'). The key assumptions applied in the value in use calculations are the discount rate and the projected cash flows.

The recoverable amounts of all CGUs are based on the same key assumptions.

Discount rates

Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money. In assessing the discount rate applicable to the Group the following factors have been considered:

(i) 12-month cost of debt;

(ii) the cost of equity based on a two-year industry average beta of 0.58. We consider this to be an appropriate period since the Group is of an acquisitive nature and therefore has changed significantly during the last five years;

(iii) the risk free rate for a 20-year UK government bond; and

(iv) the risk premium to reflect the increased risk of investing in equities.

Using a consistent methodology, the above assumptions have resulted in a decline in our calculated weighted average cost of capital to 7.9 per cent (2014: 9.9 per cent). However management have adopted a more conservative pre-tax discount rate of 9.9 per cent (2014: 9.9 per cent) in assessing the carrying value of goodwill.

As all the CGUs are similar in nature, the risk profile is considered the same across countries. As a result the same discount rate is used for each.

Projected cash flows

Projected cash flows are calculated with reference to each CGU's latest budget and business plan (approved in March 2015) which is subject to a rigorous review and challenge process. Operating company management prepare the budgets through an assessment of historic revenues from existing clients, the pipeline of new projects, historic pricing, and the required resource base needed to service new and existing clients, coupled with their knowledge of wider industry trends and the economic environment.

Projected cash flows are calculated using the first two years of approved budgets followed by a residual growth rate of 3 per cent (2014: 3 per cent) and after year five, a terminal value with 2.5 per cent (2014: 2.5 per cent) growth has been applied. Where a specific business issue means that the expected cash flows in the following three-year period are expected to be materially different to the residual growth rate of 3 per cent, the expected cash flows are used instead. Expected cash flows have been used in determining the recoverable amount at PAN Unlimited and ICM Unlimited instead of a residual growth rate of 3 per cent.

For acquisitions made within the last two years, the Group uses the relevant CGU's current year Headline performance for the first two years and applies a 3 per cent growth (2014: 3 per cent) for the following three years with 2.5 per cent (2014: 2.5 per cent) growth on the terminal value. This is then adjusted for any related deemed remuneration charges relevant for that CGU. Management believes this method to be more appropriate as it allows them to work with any new acquisitions through one complete budgeting and performance cycle.

Sensitivity analysis

The review performed at the year end did not result in the impairment of goodwill for any CGU with the estimated recoverable amount exceeding the carrying value in all cases.

Management also tested the sensitivity of key assumptions by increasing the discount rate by 10 per cent to 10.9 per cent, and maintaining the discount rate at 9.9 per cent whilst applying a 10 per cent decrease to the projected future cash flows. Whilst the latter results in no impairment, increasing the discount rate to 10.9% would lead to an impairment in PAN Unlimited.

Through further sensitivity analysis, management determined that the CGUs that are most sensitive to a change in key assumptions used in the calculation of the recoverable amount are PAN Unlimited and ICM Unlimited, with their value in use exceeding their carrying value by £1.3 million and £2.8 million respectively. The key assumption that is subject to possible change, on which management has based its determination of the CGUs' recoverable amount, is the projected future cash flows over the five year period. If the discount rate remained at 9.9 per cent then in order for the CGUs' recoverable amount to be equal to their carrying value a decrease in all of the five year projected future cash flows of 12 per cent and 13 per cent would be required for PAN Unlimited and ICM Unlimited respectively.

Components of goodwill at 31 March 2015 and 2014 are:

	Unaudited 2015 £'000	Audited 2014 £'000
Communications & Insight
EMO Unlimited	4,362	4,362
NBG Unlimited	6,434	6,434
TMW Unlimited	28,541	28,541
TRA Unlimited	5,281	5,281
ICM Unlimited	19,030	19,030
MSL Unlimited	7,633	7,633
	71,281	71,281
Health
CWG Unlimited	13,716	13,716
DJM Unlimited	2,183	2,183
PAN Unlimited	9,599	9,599
RDC Unlimited	7,668	7,668
Exchange differences	934	(655)
	34,100	32,511
Total	105,381	103,792

10.        Provision for contingent deferred consideration

The contingent deferred consideration obligations are set out below:

		As at 31 March 2015	As at 31 March 2014
		£'000	£'000
Brought forward		1,711	1,714
Movement in fair value of contingent deferred consideration		(384)	(29)
Exchange differences		32	(28)
Income statement:
- Notional finance cost on future contingent deferred consideration		25	54
Carried forward		1,384	1,711
		As at 31 March 2015 £'000	As at 31 March 2014 £'000
Analysed as:
Current liabilities		1,384	-
Non-current liabilities		-	1,711

The Group considers that the above liabilities approximate to their fair value.  The notional interest rate used during the Period was 3.3 per cent (2014: 3.3 per cent).

The earn-out obligations will be paid in cash, in accordance with the associated sale purchase agreement. These payments become due in July 2015.

Under IFRS 3 the Group recognises any changes in the fair value of the contingent deferred consideration for previous acquisitions through the Consolidated income statement. During the Period a credit of £0.4 million has been recognised due to the revaluation of the contingent deferred consideration for DJM Unlimited and Cooney Waters Unlimited.

11.        Analysis of net cash

Year ended 31 March 2015	As at 1 April 2014	Acquisition related*	Cash flow	Foreign exchange	As at 31 March 2015
	£'000	£'000	£'000	£'000	£'000
Cash and cash equivalents	7,452	-	1,250	(390)	8,312
Net cash	7,452	-	1,250	(390)	8,312
Provision for contingent deferred consideration (note10)	(1,711)	327	-	-	(1,384)
Net cash including contingent deferred consideration	5,741	327	1,250	(390)	6,928

Year ended 31 March 2014	As at 1 April 2013	Acquisition related*	Cash flow	Foreign exchange	As at 31 March 2014
	£'000	£'000	£'000	£'000	£'000
Cash and cash equivalents	11,208	-	(4,009)	253	7,452
Acquisition loan notes	(10)	-	10	-	-
Net cash	11,198	-	(3,999)	253	7,452
Provision for contingent deferred consideration (note10)	(1,714)	3	-	-	(1,711)
Net cash including contingent deferred consideration	9,484	3	(3,999)	253	5,741

* Includes non-cash items.

12.        Proceeds on operating lease

On 7 January 2013 the Group entered into an operating lease for the new London office. On signing the lease, the Group received a one-off cash payment of £7.2 million (including VAT) in relation to a reverse premium and agreed dilapidations obligation. During the year to 31 March 2015 £nil (2014: £3.7 million) of the operating lease proceeds were utilised to fulfil the dilapidations obligation and settle the associated VAT liability. 

13.        Related-party transactions

Mr D C Marshall, a Non-Executive Director of Creston plc during the year is a Director of City Group P.L.C. and Western Selection P.L.C. which held 3,000,000 Ordinary Shares in Creston plc at 31 March 2015. During the year total fees of £52,930 (2014: £63,390) were paid to City Group P.L.C., £29,597 (2014: £28,960) for the provision of secretarial services and £23,333 (2014: £35,000) for the services of Mr D C Marshall.  As at 31 March 2015 £8,967 (2014: £19,323) was due to City Group P.L.C.

14.        Post balance sheet event

On the 22 April 2015 Creston plc acquired 51 per cent of the share capital of How Splendid Ltd, a London-based digital design and development consultancy.

On the 9 June 2015 Creston plc acquired 27 per cent of the share capital of 18 Feet & Rising Ltd, a London-based advertising agency.

On the 5 June 2015 Creston plc announced the appointment of Nigel Lingwood to the Board as Non-Executive Director effective 1 July 2015. Following the AGM in September 2015, Nigel will become Senior Independent Director and Chairman of the Audit Committee.

15.        Availability of the Annual Report and Accounts

Copies of the Annual Report and Accounts are available on the Company's website www.creston.com.

______________

¹ Excluding the results from any acquisitions made during the current year, like-for-like compares current year performance to the prior year, adjusting the current year to only include the results of prior year acquisitions for the commensurate period of ownership.

² Constant currency disclosures calculate the impact of retranslating overseas' operating results at prior year exchange rates.

³ Headline results reflect the underlying performance of the Group and exclude property related costs, acquisition, start-up and restructuring related costs, the launch of Creston Unlimited and Group rebranding, movement in fair value of contingent deferred consideration, amortisation of acquired intangibles, deemed remuneration charges and notional finance costs. A full reconciliation is presented in note 4 to this full year announcement.

⁴ Profit before finance costs, finance income and taxation (PBIT).

⁵ Profit before taxation (PBT).

⁶ Diluted earnings per share (DEPS).

 

END

 

 

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