Half-year Report
M&C SAATCHI PLC
INTERIM RESULTS
SIX MONTHS ENDED
30 JUNE 2017
25 September 2017
M&C SAATCHI PLC
Interim results for the six months
ended 30 June 2017
25 September 2017
Strong revenue and earnings growth
|
|
|
|||
|
Financial Highlights 2017 |
Growth versus 2016 |
|||
|
Revenue |
£121.0m |
+ 21% (2016: £100.2m) |
|
|
|
Revenue in constant currencies Like-for-like Revenue Operating Profit |
£13.3m |
+ 12% + 10% + 17% (2016: £11.3m) |
|
|
|
Profit Before Tax |
£13.3m |
+ 17% (2016: £11.4m) |
|
|
|
Earnings EPS |
£9.1m 11.94p |
+ 18% (2016: £7.7m) + 11% (2016: 10.71p) |
|
|
|
Dividend |
2.13p |
+ 15% (2016: 1.85p) |
|
|
The highlights are headline results, see note on next page for definition.
Operational Highlights
· Successful first half with strong revenue momentum and earnings growth
· Global Network performed very well:
° UK: like-for-like revenues up 5%
° Europe: like-for-like revenues up 15%
° Middle East and Africa: like-for-like revenues up 9%
° Asia and Australasia: like-for-like revenues up 12%
° Americas: like-for-like revenues up 14%
· Net borrowing of £3.9m with increased working capital pressure (£8.5m net borrowing at 30th June 2016)
· Interim dividend increased 15% to 2.13p
Commenting on the results, David Kershaw, Chief Executive, said:
"Growth across the Group remains strong with excellent revenue and earnings increases over the first half of 2017.
"In line with our long-term strategy, we have been busy starting new businesses and opening new offices. This is the fuel for growth in years to come.
"The second half has started well with trading in line with expectations."
For further information please call:
M&C Saatchi +44 (0)20-7543-4500
David Kershaw
Tulchan Communications +44 (0)20-7353-4200
Tom Murray
Numis Securities +44 (0)20-7260-1000
Nick Westlake, NOMAD
Charles Farquhar, Corporate Broking
Notes to Editors
Headline results
The term headline is not a defined term in IFRS. The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill and acquired intangibles, but excluding software) acquired in business combinations, changes to deferred and contingent consideration and other acquisition related charges taken to the income statement; impairment of investment in associate; profit/loss on disposal of associates; and income statement impact of put option accounting (whether accounted under IFRS2 or IAS39). See Note 4 for reconciliation between the Group's statutory results and the headline results.
Like-for-like
The like-for-like revenue comparisons referred to in this report are stated after excluding the impact of foreign currency movements and corporate acquisitions and disposals.
Periods compared
This report comments on the unaudited consolidated income statement of M&C Saatchi plc (the "Group") for the six months to 30 June 2017 compared with the unaudited consolidated income statement for the same period in 2016.
SUMMARY OF RESULTS
The first six months of 2017 saw strong revenue momentum and earnings growth. Actual revenues grew by 21%, with constant currency revenues increasing by 12% and like-for-like revenues by 10%. Excluding new start-ups, we returned a headline operating margin of 11.5%, up from 11.3% in 2016. The headline profit before tax advanced 17% to £13.3m and headline net earnings rose 18%. Statutory profit before taxation was down 10% from £10.7m to £9.7m, primarily due to increased charges for put options accounted for as conditional share awards.
UK
We posted an increase in UK revenues of 5%, with our CRM, Mobile, PR and Sport & Entertainment divisions continuing to trade particularly positively.
We returned a good run of account wins across our group of businesses in the first half, including Dreams, Visit Britain, The Body Shop, Costa Coffee and Clinique.
Our PR operation was awarded Outstanding Large Public Relations Consultancy, Mobile won Most Effective Mobile Agency and Sport & Entertainment were Sponsorship Agency of the Year.
In July, Giles Hedger joined as CEO of the London advertising agency, completing the new management team, who have been incentivised under our owner/driver model. The new team is working well and attracting new business.
M&C Saatchi Merlin, our talent management agency which flourished in the first six months, launched a social influencer division in May. We also started Re UK in June, importing our successful Sydney brand design consultancy.
The UK headline operating profit was 6% up on 2016 and the headline operating margin increased to 13.2% compared with 2016's 13.0%. These margins exclude the impact of Group costs.
Europe
We made excellent progress in Europe with like-for-like revenues up 15%. Headline operating profit was up 22%, with a headline operating margin of 15.0% (2016: 16.2%).
Sweden maintains its strong new business performance, winning the property company AMFF and the engineering client PE Consulting.
Both Germany and Italy continue to thrive. Mobile opened in Berlin whilst Italy was appointed by Sisal, a gaming company, in addition to being reappointed by Unicredit. In France, advertising is still slow but our agency did win some Haribo business and the energy company Sowee. Madrid is developing well and we have started a Spanish sponsorship operation.
Middle East and Africa
Like-for-like revenues in the Middle East and Africa were up 9%. Both our UAE and South African offices are rebuilding following account losses last year (Etihad and Edgars). The operating profit was consequently down 8% and the headline operating margin dipped from 7.9% in 2016 to 5.4%.
Our South African offices were appointed by Windhoek and Heineken Export. We also acquired the Johannesburg based Sport & Entertainment company Levergy. UAE recorded some good wins in the period; Aldar Properties, UAE Banks Federation and Unilever's Lipton account. M&C Saatchi PR opened in the UAE and have since won the Abu Dhabi Motors Rolls-Royce account.
Our office in Tel Aviv is building an exciting offer and was appointed by Jaguar.
Asia and Australia
In Asia and Australasia, like-for-like revenues were up 12% on the same period last year. The headline regional operating margin was 12.0% (2016: 11.9%), with the headline operating profit up a remarkable 37% on the same period last year.
Our Australian offices are doing very well and continue to widen their offer. In February, we acquired Bohemia, a media buying and planning operation, which positions us favourably for satisfying the needs of our clients, who are increasingly seeking a closer relationship between their media agency and the content and creative providers. In March, we launched The Source, our successful UK research operation, in Melbourne.
Our associate in China, aeiou, continues to grow positively and was appointed by the car account SGMW and the walnut drinks provider New Farm. Malaysia is still shining and was awarded Social Media Agency of the Year. Singapore is developing encouragingly and won Bridgestone and the Bank of Singapore. We are looking to open a new office in Indonesia before the end of the year.
Americas
Like-for-like revenues increased 14%. There was an 8% increase in operating profit to £3.6m and a headline operating margin dip from 17.1% in 2016 to 14.7%. This was after new start-up costs, which when excluded restates the first half margin at 17.1%, as last year.
Mobile continues to excel and has a very impressive business in the US. LIDA New York opened for business and was appointed by Aston Martin.
Our Los Angeles office made impressive progress and was appointed by Pacific Life. We launched both Sport & Entertainment and Clear there in the first half.
Within a challenging economic environment, trading in Brazil remains difficult. We have opened a new office in Mexico City.
Balance sheet and cash
Our net borrowing at the half-year was £3.9m, which compares with £8.5m of borrowing at the same stage last year. We continue to experience enhanced pressure from clients on payment terms over the last six months, particularly with our growing revenues in the US. We are putting in place strategies to redress this.
Outlook
Growth across the Group remains strong with excellent revenue and earnings increases over the first half of 2017. In line with our long-term strategy, we have been busy starting new businesses and opening new offices. This is the fuel for growth in years to come. The second half has started well with trading in line with expectations.
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT
ENDED 30 JUNE 2017
|
|
|
|
|
|
Six months
|
|
Six months
|
|
Year
|
|
|
Note |
|
|
|
£000 |
|
£000 |
|
£000 |
|
|
|
|
|
|
|
|
|
|
|
Billings |
|
|
|
|
261,194 |
|
217,222 |
|
458,180 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
4 |
|
|
|
121,035 |
|
100,219 |
|
225,387 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs |
|
|
|
|
(115,699) |
|
(93,180) |
|
(218,738) |
Operating profit |
4 |
|
|
|
5,336 |
|
7,039 |
|
6,649 |
|
|
|
|
|
|
|
|
|
|
|
|
Share of results of associates |
|
|
|
|
531 |
|
405 |
|
1,530 |
|
Finance income |
6 |
|
|
|
4,520 |
|
3,797 |
|
440 |
|
Finance costs |
7 |
|
|
|
(710) |
|
(512) |
|
(1,828) |
Profit before taxation |
4 |
|
|
|
9,677 |
|
10,729 |
|
6,791 |
|
Taxation on profits |
8 |
|
|
|
(2,023) |
|
(1,667) |
|
(3,451) |
|
Profit for the financial period |
|
|
|
|
7,654 |
|
9,062 |
|
3,340 |
|
|
|
|
|
|
|
|
|
|
|
|
Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
Equity shareholders of the Group |
4 |
|
|
|
6,838 |
|
8,094 |
|
144 |
|
Non controlling interest |
|
|
|
|
816 |
|
968 |
|
3,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,654 |
|
9,062 |
|
3,340 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
4 |
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
8.98p |
|
11.24p |
|
0.20p |
|
Diluted |
|
|
|
|
8.74p |
|
11.20p |
|
0.19p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of the above numbers to the Headline numbers, discussed in the front of this report, can be found in note 4 on pages 17 to 19.
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
ENDED 30 JUNE 2017
|
|
|
|
|
|
Six months |
|
Six months |
|
Year |
|
|
|
|
|
|
£000 |
|
£000 |
|
£000 |
|
Profit for the period |
|
|
|
|
7,654 |
|
9,062 |
|
3,340 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations |
|
|
|
|
(625) |
|
1,791 |
|
6,754 |
|
Total other comprehensive income for the period net of tax |
|
|
|
|
(625) |
|
1,791 |
|
6,754 |
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
|
|
|
7,029
|
|
10,853
|
|
10,094 |
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|
|
Equity shareholders of the Group |
|
|
|
|
6,213 |
|
9,885 |
|
6,898 |
|
Non controlling interests |
|
|
|
|
816 |
|
968 |
|
3,196 |
|
|
|
|
|
|
7,029 |
|
10,853 |
|
10,094 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2017
|
|
|
|
|
|
30 June 2017 |
|
30 June 2016 |
|
31 December 2016 |
|
|
|
|
|
|
£000 |
|
£000 |
|
£000 |
|
NON CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
|
|
52,681 |
|
47,546 |
|
51,004 |
|
Investments in associates |
|
|
|
|
20,175 |
|
18,473 |
|
19,277 |
|
Plant and equipment |
|
|
|
|
11,038 |
|
9,619 |
|
10,619 |
|
Deferred tax assets |
|
|
|
|
3,059 |
|
2,609 |
|
3,112 |
|
Other non current assets |
|
|
|
|
9,018 |
|
7,600 |
|
7,455 |
|
|
|
|
|
|
95,971 |
|
85,847 |
|
91,467 |
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
|
|
|
107,728 |
|
105,673 |
|
109,824 |
|
Current tax assets |
|
|
|
|
4,164 |
|
2,199 |
|
1,057 |
|
Cash and cash equivalents |
|
|
|
|
31,638 |
|
29,269 |
|
32,222 |
|
|
|
|
|
|
143,530 |
|
137,141 |
|
143,103 |
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Bank overdraft |
|
|
|
|
- |
|
(2,796) |
|
- |
|
Trade and other payables |
|
|
|
|
(103,012) |
|
(103,277) |
|
(115,886) |
|
Current tax liabilities |
|
|
|
|
(2,482) |
|
(2,885) |
|
(1,186) |
|
Other financial liabilities |
|
|
|
|
(4,310) |
|
(25) |
|
(3,670) |
|
Deferred and contingent consideration |
|
|
|
|
- |
|
- |
|
- |
|
Minority shareholder put options liabilities |
|
|
|
|
(13,855) |
|
(15,594) |
|
(20,216) |
|
|
|
|
|
|
(123,659) |
|
(124,577) |
|
(140,958) |
|
|
|
|
|
|
|
|
|
|
|
|
Net current Assets |
|
|
|
|
19,871 |
|
12,564 |
|
2,145 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets less current liabilities |
|
|
|
|
115,842 |
|
98,411 |
|
93,612 |
|
|
|
|
|
|
|
|
|
|
|
|
Non current liabilities |
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
|
|
(100) |
|
(36) |
|
(380) |
|
Other financial liabilities |
|
|
|
|
(35,567) |
|
(34,958) |
|
(28,277) |
|
Minority shareholder put options liabilities |
|
|
|
|
(10,529) |
|
(13,698) |
|
(12,950) |
|
Other non current liabilities |
|
|
|
|
(2,390) |
|
(1,630) |
|
(2,608) |
|
|
|
|
|
|
(48,586) |
|
(50,322) |
|
(44,215) |
|
|
|
|
|
|
|
|
|
|
|
|
Net assets |
|
|
|
|
67,256 |
|
48,089 |
|
49,397 |
|
|
|
|
|
|
|
|
|
|
|
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED BALANCE SHEET (CONTINUED)
AT 30 JUNE 2017
|
|
|
|
|
|
30 June 2017 |
|
30 June 2016 |
|
31 December |
|
|
|
|
|
|
£000 |
|
£000 |
|
£000 |
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
|
|
|
790 |
|
737 |
|
749 |
|
Share premium |
|
|
|
|
31,383 |
|
20,332 |
|
24,099 |
|
Merger reserve |
|
|
|
|
31,592 |
|
31,592 |
|
31,592 |
|
Treasury reserve |
|
|
|
|
(792) |
|
(792) |
|
(792) |
|
Minority interest put option reserve |
|
|
|
|
(14,540) |
|
(22,379) |
|
(20,598) |
|
Non controlling interest acquired |
|
|
|
|
(20,421) |
|
(9,990) |
|
(13,122) |
|
Foreign exchange reserve |
|
|
|
|
4,145 |
|
(193) |
|
4,770 |
|
Retained earnings |
|
|
|
|
29,380 |
|
23,412 |
|
15,871 |
|
TOTAL SHAREHOLDERS FUNDS |
|
|
|
|
61,537 |
|
42,719 |
|
42,569 |
|
|
|
|
|
|
|
|
|
|
|
|
Non Controlling interestS |
|
|
|
|
5,719 |
|
5,370 |
|
6,828 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY |
|
|
|
|
67,256 |
|
48,089 |
|
49,397 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
SIX MONTHS ENDED 30 JUNE 2017
|
2017 Half year |
Share |
Share |
Merger reserve £000 |
Treasury |
MI put option reserve |
Non controlling interest acquired |
Foreign exchange |
Retained |
Subtotal |
Non controlling |
Total |
|
At 1 January 2017 |
749 |
24,099 |
31,592 |
(792) |
(20,598) |
(13,122) |
4,770 |
15,871 |
42,569 |
6,828 |
49,397 |
|
Reserve movement for six months ending 30 June 2017 |
|
|
|
|
|
|
|
|
|
||
|
Exercise of put options |
16 |
5,788 |
- |
- |
6,060 |
(7,344) |
- |
- |
4,520 |
- |
4,520 |
|
Acquisitions |
4 |
1,496 |
- |
- |
- |
- |
- |
- |
1,500 |
(230) |
1,270 |
|
Disposals |
- |
- |
- |
- |
- |
- |
- |
(153) |
(153) |
59 |
(94) |
|
Exchange rate movements |
- |
- |
- |
- |
(2) |
45 |
- |
- |
43 |
(106) |
(63) |
|
Option exercise |
21 |
- |
- |
- |
- |
- |
- |
(21) |
- |
- |
- |
|
Share option charge |
- |
- |
- |
- |
- |
- |
- |
6,845 |
6,845 |
- |
6,845 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(1,648) |
(1,648) |
|
Total transactions with owners |
41 |
7,284 |
- |
- |
6,058 |
(7,299) |
- |
6,671 |
12,755 |
(1,925) |
10,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for period |
- |
- |
- |
- |
- |
- |
(625) |
6,838 |
6,213 |
816 |
7,029 |
|
At 30 June 2017 |
790 |
31,383 |
31,592 |
(792) |
(14,540) |
(20,421) |
4,145 |
29,380 |
61,537 |
5,719 |
67,256 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
SIX MONTHS ENDED 30 JUNE 2017
|
2016 Half year |
Share |
Share |
Merger reserve £000 |
Treasury |
MI put option reserve |
Non controlling interest acquired |
Foreign exchange |
Retained |
Subtotal |
Non controlling |
Total |
|
At 1 January 2016 |
727 |
17,338 |
31,592 |
(792) |
(12,595) |
(9,233) |
(1,984) |
12,673 |
37,726 |
4,295 |
42,021 |
|
Reserve movement for six months ending 30 June 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of put options |
10 |
2,994 |
- |
- |
551 |
(502) |
- |
(6) |
3,047 |
(17) |
3,030 |
|
Acquisitions |
- |
- |
- |
- |
(10,248) |
- |
- |
- |
(10,248) |
1,797 |
(8,451) |
|
Exchange rate movements |
- |
- |
- |
- |
(87) |
(255) |
- |
- |
(342) |
(367) |
(709) |
|
Issue of shares to minorities |
- |
- |
- |
- |
- |
- |
- |
- |
- |
31 |
31 |
|
Share option charge |
- |
- |
- |
- |
- |
- |
- |
2,651 |
2,651 |
- |
2,651 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(1,337) |
(1,337) |
|
Total transactions with owners |
10 |
2,994 |
- |
- |
(9,784) |
(757) |
- |
2,645 |
(4,892) |
107 |
(4,785) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for period |
- |
- |
- |
- |
- |
- |
1,791 |
8,094 |
9,885 |
968 |
10,853 |
|
At 30 June 2016 |
737 |
20,332 |
31,592 |
(792) |
(22,379) |
(9,990) |
(193) |
23,412 |
42,719 |
5,370 |
48,089 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
SIX MONTHS ENDED 30 JUNE 2017
|
2016 Year |
Share |
Share |
Merger reserve £000 |
Treasury |
MI put option reserve |
Non controlling interest acquired |
Foreign exchange |
Retained |
Subtotal |
Non controlling |
Total |
|
At 1 January 2016 |
727 |
17,338 |
31,592 |
(792) |
(12,595) |
(9,233) |
(1,984) |
12,673 |
37,726 |
4,295 |
42,021 |
|
Reserve movement for year ending 31 December 2016 |
|
|
|
|
|
|
|
|
|||
|
Acquisitions |
- |
- |
- |
- |
(10,249) |
- |
- |
- |
(10,249) |
1,919 |
(8,330) |
|
Acquisitions of minority interest |
4 |
1,364 |
- |
- |
- |
(1,222) |
- |
- |
146 |
- |
146 |
|
Exercise of put options |
18 |
5,397 |
- |
- |
2,366 |
(2,366) |
- |
- |
5,415 |
(47) |
5,368 |
|
Disposals |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(10) |
(10) |
|
Exchange rate movements |
- |
- |
- |
- |
(120) |
(301) |
- |
- |
(421) |
627 |
206 |
|
Issue of shares to minorities |
- |
- |
- |
- |
- |
- |
- |
- |
- |
14 |
14 |
|
Issue of options |
- |
- |
- |
- |
- |
- |
- |
515 |
515 |
- |
515 |
|
Share option charge |
- |
- |
- |
- |
- |
- |
- |
7,997 |
7,997 |
- |
7,997 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
(5,458) |
(5,458) |
(3,166) |
(8,624) |
|
Total transactions with owners |
22 |
6,761 |
- |
- |
(8,003) |
(3,889) |
- |
3,054 |
(2,055) |
(663) |
(2,718) |
|
Total comprehensive income for the year |
- |
- |
- |
- |
- |
- |
6,754 |
144 |
6,898 |
3,196 |
10,094 |
|
At 31 December 2016 |
749 |
24,099 |
31,592 |
(792) |
(20,598) |
(13,122) |
4,770 |
15,871 |
42,569 |
6,828 |
49,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
SIX MONTHS ENDED 30 JUNE 2017
|
|
|
|
|
Six months ended |
|
Six months ended |
|
Year Ended |
|
|
|
Notes |
|
|
£000 |
|
£000 |
|
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
121,035 |
|
100,219 |
|
225,387 |
|
|
Operating cost |
|
|
|
(115,699) |
|
(93,180) |
|
(218,738) |
|
|
Operating Profit |
|
|
|
5,336 |
|
7,039 |
|
6,649 |
|
|
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
Depreciation of plant and equipment |
|
|
|
1,348 |
|
1,159 |
|
2,668 |
|
|
Losses on sale of plant and equipment |
|
|
|
27 |
|
36 |
|
542 |
|
|
Losses on sale of software intangibles |
|
|
|
- |
|
- |
|
10 |
|
|
Fair value revaluation of associate on step acquisition |
|
|
|
- |
|
- |
|
859 |
|
|
Impairment and amortisation on acquired intangible assets |
|
|
|
737 |
|
1,638 |
|
2,324 |
|
|
Impairment of associate and investments |
|
|
|
- |
|
- |
|
4,389 |
|
|
Amortisation of capitalised software intangible assets |
|
|
44 |
|
60 |
|
354 |
|
|
|
Equity settled share based payment expenses |
|
|
|
6,845 |
|
2,651 |
|
7,997 |
|
|
Operating cash flow before movements in working capital and provisions |
|
|
|
14,337 |
|
12,583 |
|
25,792 |
|
|
Decrease/(Increase) in trade and other receivables |
|
|
|
1,980 |
|
(1,449) |
|
(22,334) |
|
|
(Increase)/Decrease in trade and other payables |
|
|
|
(14,195) |
|
(8,781) |
|
19,342 |
|
|
Cash generated from operations |
|
|
|
2,122 |
|
2,353 |
|
22,800 |
|
|
Tax paid |
|
|
|
(3,881) |
|
(2,901) |
|
(4,073) |
|
|
Net cash (outflow)/inflow from operating activities |
|
|
(1,759) |
|
(548) |
|
18,727 |
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
|
Acquisitions net of cash acquired |
10 |
|
|
(834) |
|
(11,033) |
|
(12,822) |
|
|
Disposal of subsidiaries net of cash divested |
|
|
|
- |
|
- |
|
(263) |
|
|
Acquisition of investments |
|
|
|
(1,140) |
|
(581) |
|
(1,056) |
|
|
Proceeds from sale of plant and equipment |
|
|
|
4 |
|
8 |
|
32 |
|
|
Purchase of intangibles |
|
|
|
- |
|
- |
|
- |
|
|
Purchase of plant and equipment |
|
|
|
(773) |
|
(1,495) |
|
(3,873) |
|
|
Purchase of capitalised software |
|
|
|
(85) |
|
(156) |
|
(34) |
|
|
Dividend from associates |
|
|
|
- |
|
- |
|
177 |
|
|
Interest earned |
|
|
|
166 |
|
169 |
|
440 |
|
|
Net cash consumed by investing activities |
|
|
|
(2,662) |
|
(13,088) |
|
(17,399) |
|
|
Net cash consumed by operating and investing activities |
|
|
|
(4,421) |
|
(13,636) |
|
1,328 |
|
|
|
|
|
|
Six months ended |
|
Six months ended |
|
Year Ended |
|
|
|
|
|
£000 |
|
£000 |
|
£000 |
|
Net cash consumed by operating and investing activities |
|
|
|
(4,421) |
|
(13,636) |
|
1,328 |
|
|
|
|
|
|
|
|
|
|
|
Dividends paid to equity holders of the Company |
|
|
|
- |
|
- |
|
(5,458) |
|
Dividends paid to non controlling interest |
|
|
|
(1,648) |
|
(1,337) |
|
(3,166) |
|
Issue of shares to minorities |
|
|
|
- |
|
- |
|
514 |
|
Repayment of finance leases |
|
|
|
(15) |
|
(21) |
|
(36) |
|
Inception of invoice discounting |
|
|
|
291 |
|
- |
|
4,455 |
|
Repayment of invoice discounting |
|
|
|
- |
|
(3,130) |
|
(3,943) |
|
Inception of bank loans |
|
|
|
6,315 |
|
10,646 |
|
11,433 |
|
Repayment of bank loans |
|
|
|
(184) |
|
- |
|
(7,191) |
|
Interest paid |
|
|
|
(709) |
|
(510) |
|
(1,230) |
|
Net cash generated / (consumed) from financing activities |
|
|
|
4,050
|
|
5,648
|
|
(4,622) |
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
|
|
(371)
|
|
(7,988)
|
|
(3,294) |
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes |
|
|
|
(213) |
|
2,215 |
|
3,270 |
|
Cash and cash equivalents at the beginning of the period |
|
|
|
32,222 |
|
32,246 |
|
32,246 |
|
Cash and cash equivalents at the end of the period |
|
|
|
31,638
|
|
26,473
|
|
32,222 |
|
|
|
|
|
|
|
|
|
|
1. GENERAL INFORMATION
The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 36 Golden Square, London W1F 9EE.
The Company has its primary listing on the AIM market of the London Stock Exchange.
This consolidated half-yearly financial information was approved for issue on 22 September 2017.
These results do not constitute the Group's statutory accounts. The information presented in relation to 31 December 2016 is extracted from the statutory financial statements for the year then ended and which have been delivered to the Registrar of Companies. The auditor's report on the statutory financial statements for the year ended 31 December 2016 was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report(s) and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.
2. Basis of preparation
This consolidated half-yearly financial information for the half-year ended 30 June 2017 has been prepared in accordance with the AIM Rules for companies. The half-yearly consolidated financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2016.
3. Accounting policies
The financial information in these interim results is that of the holding company and all of its subsidiaries (the Group). It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2016 and which will form the basis of the 2017 financial statements.
4. Earnings per share and reconciliation between headline and statutory results
The analysis below provides a reconciliation between the Group's statutory results and the headline results.
|
Six Months to |
|
|
|
Amortisation £000 |
Allocations and dividend paid to conditional share awards |
Fair value adjustments to minority put option liabilities |
|
Headline £000 |
|
|
Revenue |
|
121,035 |
|
- |
- |
- |
|
121,035 |
|
|
Operating profit |
|
5,336 |
|
737 |
332 |
6,845 |
|
13,250 |
|
|
Share of results of associates & JV |
|
531 |
|
- |
- |
- |
|
531 |
|
|
Finance income |
|
4,520 |
|
- |
- |
(4,355) |
|
165 |
|
|
Finance cost |
|
(710) |
|
- |
- |
- |
|
(710) |
|
|
Profit before taxation |
|
9,677 |
|
737 |
332 |
2,490 |
|
13,236 |
|
|
Taxation |
|
(2,023) |
|
(245) |
- |
(600) |
|
(2,868) |
|
|
Profit for the period |
|
7,654 |
|
492 |
332 |
1,890 |
|
10,368 |
|
|
Non controlling interests |
(816) |
|
(135) |
(332) |
- |
|
(1,283) |
||
|
Profit attributable to equity holders of the Group |
6,838 |
|
357 |
- |
1,890 |
|
9,085 |
||
|
BASIC EARNINGS PER SHARE |
|
|
|
|
|
||||
|
Weighted average number of shares (Thousands) |
76,115 |
|
|
|
|
|
76,115 |
||
|
Basic EPS |
|
8.98p |
|
|
|
|
|
11.94p |
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
|
|
|
|
|
|
||
|
Weighted average number of shares (Thousands) as above |
76,115 |
|
|
|
|
|
76,115 |
||
|
Add |
|
|
|
|
|
|
|
|
|
|
- Conditional shares |
|
2,139 |
|
|
|
|
|
2,139 |
|
|
Total |
|
78,254 |
|
|
|
|
|
78,254 |
|
|
Diluted earnings per share |
|
8.74p |
|
|
|
|
|
11.61p |
|
|
|
|
|
|
|
|
|
|
|
|
The Directors believe that the headline results and headline earnings per share provide additional useful information on the underlying performance. The headline result is used for internal performance management, calculating the value of subsidiary convertible shares and minority interest put options. The term headline is not a defined term in IFRS.
The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill and acquired intangibles, but excluding software) acquired in business combinations, changes to deferred and contingent consideration and other acquisition related charges taken to the income statement; impairment of investment in associates and investments; profit and loss on disposal of associates; and the income statement impact of put option accounting and share based payment charges.
|
Six Months to |
|
|
|
Amortisation £000 |
Allocations and dividend paid to conditional share awards |
Fair value adjustments to minority put option liabilities |
|
Headline £000 |
|
|
Revenue |
|
100,219 |
|
- |
|
- |
|
100,219 |
|
|
Operating profit |
|
7,039 |
|
1,637 |
|
2,651 |
|
11,327 |
|
|
Share of results of associates & JV |
|
405 |
|
- |
|
- |
|
405 |
|
|
Finance income |
|
3,797 |
|
- |
|
(3,628) |
|
169 |
|
|
Finance cost |
|
(512) |
|
- |
|
- |
|
(512) |
|
|
Profit before taxation |
|
10,729 |
|
1,637 |
|
(977) |
|
11,389 |
|
|
Taxation |
|
(1,667) |
|
(645) |
|
- |
|
(2,312) |
|
|
Profit for the period |
|
9,062 |
|
992 |
|
(977) |
|
9,077 |
|
|
Non controlling interests |
(968) |
|
(403) |
|
- |
|
(1,371) |
||
|
Profit attributable to equity holders of the Group |
8,094 |
|
589 |
|
(977) |
|
7,706 |
||
|
BASIC EARNINGS PER SHARE |
|
|
|
|
|
||||
|
Weighted average number of shares (Thousands) |
71,982 |
|
|
|
|
|
71,982 |
||
|
Basic EPS |
|
11.24p |
|
|
|
|
|
10.71p |
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
|
|
|
|
|
|
||
|
Weighted average number of shares (Thousands) as above |
71,982 |
|
|
|
|
|
71,982 |
||
|
Add |
|
|
|
|
|
|
|
|
|
|
- Conditional shares |
|
300 |
|
|
|
|
|
300 |
|
|
Total |
|
72,282 |
|
|
|
|
|
72,282 |
|
|
Diluted earnings per share |
|
11.20p |
|
|
|
|
|
10.66p |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
|
Amortisation £000 |
Impairment of associate and provision against investment £000 |
Revaluation of an associate on acquisition |
Acquisition related remuneration |
Put option accounting |
Headline £000 |
|
Revenue |
|
225,387 |
- |
- |
- |
- |
- |
225,387 |
|
Operating profit |
|
6,649 |
2,324 |
4,389 |
859 |
819 |
7,997 |
23,037 |
|
Share of results of associates & JV |
|
1,530 |
- |
- |
- |
- |
- |
1,530 |
|
Finance income |
|
440 |
- |
- |
- |
- |
- |
440 |
|
Finance cost |
|
(1,828) |
- |
- |
- |
- |
597 |
(1,231) |
|
Profit before taxation |
|
6,791 |
2,324 |
4,389 |
859 |
819 |
8,594 |
23,776 |
|
Taxation |
|
(3,451) |
(659) |
- |
- |
- |
- |
(4,110) |
|
Profit for the year |
|
3,340 |
1,665 |
4,389 |
859 |
819 |
8,594 |
19,666 |
|
Non controlling interests |
(3,196) |
(256) |
- |
- |
(540) |
(251) |
(4,243) |
|
|
Profit attributable to equity holders of the Group |
144 |
1,409 |
4,389 |
859 |
279 |
8,343 |
15,423 |
|
|
BASIC EARNINGS PER SHARE |
|
|
|
|
|
|
||
|
Weighted average number of shares (Thousands) |
73,193 |
|
|
|
|
|
73,193 |
|
|
Basic EPS |
|
0.20p |
|
|
|
|
|
21.07p |
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
|
|
|
|
|
||
|
Weighted average number of shares (Thousands) as above |
|
73,193 |
|
|
|
|
|
71,319 |
|
Add |
|
|
|
|
|
|
|
|
|
- Conditional shares |
|
1,867 |
|
|
|
|
|
1,867 |
|
Total |
|
75,060 |
|
|
|
|
|
75,060 |
|
Diluted earnings per share |
0.19p |
|
|
|
|
|
20.55p |
|
5. SEGMENTAL INFORMATION
This segmental information is reconciled to the statutory results in Note 4.
|
Six months to |
|
UK £000 |
Europe £000 |
Middle East and Africa |
Asia and Australia £000 |
Americas £000 |
Total £000 |
|
|
Revenue |
|
42,553 |
16,195 |
6,352 |
31,102 |
24,833 |
121,035 |
|
|
Operating profit excluding Group costs |
|
5,612 |
2,433 |
341 |
3,717 |
3,642 |
15,745 |
|
|
Group costs |
|
(2,247) |
(44) |
- |
(171) |
(33) |
(2,495) |
|
|
Operating profit |
|
3,365 |
2,389 |
341 |
3,546 |
3,609 |
13,250 |
|
|
Share of results of associates |
|
332 |
6 |
- |
193 |
- |
531 |
|
|
Financial income and cost |
|
(227) |
(35) |
24 |
27 |
(334) |
(545) |
|
|
Profit before taxation |
|
3,470 |
2,360 |
365 |
3,766 |
3,275 |
13,236 |
|
|
Taxation |
|
(393) |
(958) |
21 |
(1,048) |
(490) |
(2,868) |
|
|
Profit for the period |
|
3,077 |
1,402 |
386 |
2,718 |
2,785 |
10,368 |
|
|
Non controlling interests |
|
(642) |
(213) |
25 |
(436) |
(17) |
(1,283) |
|
|
Profit attributable to equity shareholders |
|
2,435 |
1,189 |
411 |
2,282 |
2,768 |
9,085 |
|
|
HEADLINE BASIC EPS |
|
|
|
|
|
|
11.94p |
|
|
Non cash costs included in headline operating profit: |
|
|
|
|
|
|||
|
Depreciation & Amortisation of software |
|
(552) |
(116) |
(176) |
(305) |
(243) |
(1,392) |
|
|
Share option charges |
|
- |
- |
- |
- |
- |
- |
|
|
OFFICE LOCATION |
|
London |
Milan Berlin Madrid Geneva Stockholm Moscow Istanbul |
Johannesburg Cape Town Abu Dhabi Dubai Beirut Tel Aviv |
Sydney Melbourne New Delhi Bangalore Islamabad Hong Kong Shanghai Tokyo Kuala Lumpur Bangkok Singapore |
New York Chicago Los Angeles San Francisco São Paulo |
|
|
|
Six months to |
|
UK £000 |
Europe £000 |
Middle East and Africa |
Asia and Australia £000 |
Americas £000 |
Total £000 |
|
|
Revenue |
|
40,595 |
12,371 |
4,725 |
22,787 |
19,741 |
100,219 |
|
|
Operating profit excluding Group costs |
|
5,270 |
1,999 |
371 |
2,720 |
3,378 |
13,738 |
|
|
Group costs |
|
(2,188) |
(44) |
- |
(160) |
(19) |
(2,411) |
|
|
Operating profit |
|
3,082 |
1,955 |
371 |
2,560 |
3,359 |
11,327 |
|
|
Share of results of associates |
|
425 |
20 |
- |
25 |
(65) |
405 |
|
|
Financial income and cost |
|
(142) |
(22) |
23 |
38 |
(240) |
(343) |
|
|
Profit before taxation |
|
3,365 |
1,953 |
394 |
2,623 |
3,054 |
11,389 |
|
|
Taxation |
|
(685) |
(661) |
(211) |
(722) |
(33) |
(2,312) |
|
|
Profit for the period |
|
2,680 |
1,292 |
183 |
1,901 |
3,021 |
9,077 |
|
|
Non controlling interests |
|
(404) |
(294) |
(61) |
(326) |
(286) |
(1,371) |
|
|
Profit attributable to equity shareholders |
|
2,276 |
998 |
122 |
1,575 |
2,735 |
7,706 |
|
|
HEADLINE BASIC EPS |
|
|
|
|
|
|
10.71p |
|
|
Non cash costs included in headline operating profit: |
|
|
|
|
|
|||
|
Depreciation & Amortisation of software |
|
(633) |
(86) |
(77) |
(168) |
(255) |
(1,219) |
|
|
Share option charges |
|
- |
- |
- |
- |
- |
- |
|
|
OFFICE LOCATION |
|
London |
Milan Berlin Madrid Geneva Stockholm Moscow Istanbul |
Johannesburg Cape Town Abu Dhabi Dubai Beirut Tel Aviv |
Sydney Melbourne New Delhi Islamabad Hong Kong Shanghai Tokyo Kuala Lumpur Bangkok Singapore |
New York Chicago Los Angeles San Francisco São Paulo |
|
|
|
Year ended |
|
UK £000 |
Europe £000 |
Middle East and Africa |
Asia and Australia £000 |
Americas £000 |
Total £000 |
|
|
Revenue |
|
88,504 |
26,685 |
11,673 |
52,531 |
45,994 |
225,387 |
|
|
Operating profit excluding Group costs |
|
10,398 |
4,028 |
1,085 |
5,754 |
7,119 |
28,384 |
|
|
Group costs |
|
(4,879) |
(87) |
- |
(343) |
(38) |
(5,347) |
|
|
Operating profit |
|
5,519 |
3,941 |
1,085 |
5,411 |
7,081 |
23,037 |
|
|
Share of results of associates |
|
1,323 |
(3) |
- |
290 |
(80) |
1,530 |
|
|
Financial income and cost |
|
(343) |
(43) |
43 |
124 |
(572) |
(791) |
|
|
Profit before taxation |
|
6,499 |
3,895 |
1,128 |
5,825 |
6,429 |
23,776 |
|
|
Taxation |
|
(811) |
(1,350) |
(362) |
(1,458) |
(129) |
(4,110) |
|
|
Profit for the year |
|
5,688 |
2,545 |
766 |
4,367 |
6,300 |
19,666 |
|
|
Non controlling interests |
|
(1,320) |
(494) |
(326) |
(844) |
(1,259) |
(4,243) |
|
|
Profit attributable to equity shareholders |
|
4,368 |
2,051 |
440 |
3,523 |
5,041 |
15,423 |
|
|
HEADLINE BASIC EPS |
|
|
|
|
|
|
21.07p |
|
|
Non cash costs included in operating profit: |
|
|
|
|
|
|||
|
Depreciation & Amortisation of software |
|
(1,632) |
(304) |
(194) |
(342) |
(550) |
(3,022) |
|
|
Share option charges |
|
- |
- |
- |
- |
- |
- |
|
|
OFFICE LOCATION |
|
London |
Milan Berlin Madrid Geneva Stockholm Moscow Istanbul |
Johannesburg Cape Town Abu Dhabi Dubai Beirut Tel Aviv |
Sydney Melbourne New Delhi Bangalore Islamabad Hong Kong Shanghai Tokyo Kuala Lumpur Bangkok Singapore |
New York Chicago Los Angeles San Francisco São Paulo |
|
|
6. Finance Income
|
|
|
|
|
Six months |
|
Six months |
|
Year |
|
|
|
|
|
£000 |
|
£000 |
|
£000 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Bank interest receivable |
|
|
|
140 |
|
92 |
|
338 |
|
Other interest receivable |
|
|
|
25 |
|
77 |
|
102 |
|
Total finance income |
|
|
|
165 |
|
169 |
|
440 |
|
Fair value adjustments to minority shareholder put option liabilities |
|
|
|
4,355 |
|
3,628 |
|
- |
|
Total |
|
|
|
4,520 |
|
3,797 |
|
440 |
7. Finance COsts
|
|
|
|
|
Six months |
|
Six months |
|
Year |
|
|
|
|
|
£000 |
|
£000 |
|
£000 |
|
Finance costs |
||||||||
|
|
|
|
|
|
|
|
|
|
|
Bank interest payable |
|
|
|
(700) |
|
(510) |
|
(1,227) |
|
Other interest payable |
|
|
|
(10) |
|
(2) |
|
(4) |
|
Total interest payable |
|
|
|
(710) |
|
(512) |
|
(1,231) |
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustments to minority shareholder put option liabilities |
|
|
|
- |
|
- |
|
(597) |
|
Total |
|
|
|
(710) |
|
(512) |
|
(1,828) |
8. Taxation
Income tax expenses are recognised based on management's estimate of the average annual headline income tax expected for the full financial year.
The estimated headline effective annual tax rate (excluding associates) used for the period to 30 June 2017 is 21.6% (30 June 2016: 21.2%). The increase in the headline tax rate is due to increased profits made in USA.
The estimated effective annual tax rate for the period to 30 June 2017 is 20.9% (30 June 2016: 15.5%). The difference between the headline and statutory tax rates is caused by a difference in the profit before tax due to the impact of fair value adjustments to minority shareholder put option liabilities that have no effect on the tax charge.
9. Dividends
|
|
|
|
|
Six months |
|
Six months |
|
Year |
|
|
|
|
|
£000 |
|
£000 |
|
£000 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
2015 final dividend 5.60p (2014: 4.87pp) |
|
|
|
- |
|
- |
|
4,084 |
|
2016 interim dividend 1.85p (2015: 1.61p) |
|
|
|
- |
|
- |
|
1,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
- |
|
5,458 |
The directors propose an interim dividend of 2.13p per share (2016: 1.85p per share) payable on 10 November 2017 to shareholders who are on the register at 27 October 2017. This interim dividend, amounting to £1,711k (2016: £1,374k) has not been recognised as a liability in this half-yearly financial report.
10. Cash consumed by acquisitions
|
|
|
|
|
|
Six months |
|
Six months |
|
Year |
|
|
|
|
|
|
£000 |
|
£000 |
|
£000 |
|
Acquisitions |
|
|
|
|
|
|
|
|
|
|
Initial cash consideration paid |
|
|
|
|
(1,375) |
|
(14,476) |
|
(15,717) |
|
Cash and cash equivalents acquired |
|
|
|
|
541 |
|
3,443 |
|
2,895 |
|
|
|
|
|
|
(834) |
|
(11,033) |
|
(12,822) |
|
|
|
|
|
|
|
|
|
|
|
This information is provided by RNS
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