Final Results for the Year Ended 31 December 2020

RNS Number : 3614V

Mission Group PLC (The)

14 April 2021

 

 

THE MISSION GROUP plc

("MISSION", "the Group")

FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2020

14 April 2021

The MISSION Group plc (AIM: TMG), the alternative group for ambitious brands , today announces its final results for the year ended 31 December 2020.

FINANCIAL HIGHLIGHTS

	Year ended 31 December	2020	H1 2020	2019
·	Revenue	£61.5m	£29.1m	£81.0m
·	Operating Profit*/(Loss)	£1.9m	£(1.8)m	£10.8m
·	Profit Margins	3.1%	(6.2)%	13.3%
·	Headline Profit/(Loss) Before Tax*	£1.2m	£(2.2)m	£10.2m
·	Reported (Loss)/Profit Before Tax	(£2.1m)	£(2.3)m	£8.3m
·	Earnings Per Share*	1.0p	(1.92)p	9.47p
·	Diluted Earnings Per Share*	1.0p	(1.92)p	9.00p

·	Cash conservation measures resulted in year-end net bank debt of £1.2m, an historic low (2019: £4.9M).

* Headline results are calculated before acquisition adjustments, exceptional items, losses from start-up activities and investment write-offs. A reconciliation of headline to reported results is set out in Note 3.

BUSINESS HIGHLIGHTS

·	Trading began to recover in H2, reversing H1 losses felt at the height of the pandemic and delivering a headline PBT performance ahead of market expectations.
·	Client retention remained strong, with well over 50% of revenues generated from Clients of five years or more.
·	Diversity of Client portfolio ensured Group was at forefront of activity in more resilient sectors, with strong performances in healthcare and technology.
·	Continued to win new Clients and assignments, including the launch of chemical group INEOS's hand sanitiser and expansion of the remit with Amazon Web Services.
·	Significant steps taken to refine and strengthen the MISSION Advantage, enabling Agencies to call upon specialist expertise as needed.
·	Launch of MISSION MADE, a new centralised 24/7 Digital Production and Innovation studio to support Agencies across the Group.
·	Completed acquisition of Innovationbubble, the psychological insights and behavioural solutions consultancy, and welcomed brand activation consultancy, ALIVE, into the Group.
·	Development of inaugural Environmental, Social and Governance (ESG) manifesto, 'Making Positive Change.'

OUTLOOK

·	Trading in the first quarter of FY21 is on track with Group's expectations.
·	Encouraged by the robust and growing pipeline of new business opportunities.
·	Focussed on leveraging infrastructure by adding high margin, high engagement capabilities in data, analytics, and performance media, underpinning a 14% margin target by 2022
·	Removal of uncertainty around Brexit negotiations opens up further opportunities across international markets.

Commenting on the results, David Morgan, Chairman of The MISSION Group plc, said:  "In the face of adversity, the MISSION Agencies and their people responded brilliantly to the challenges set through 2020. To achieve headline profitability whilst at the same time reducing debt was quite an achievement and the Group's ability to take swift, proactive, astute and at times difficult decisions, all whilst maintaining a seamless service to our Clients, is impressive. I therefore offer my sincere thanks to the people working across MISSION. Their continued dedication and hard work throughout such a time means that MISSION is now emerging as an even stronger business than before, better positioned to make progress against its long-term plans and strategy."

ENDS

CONTACT

THE MISSION GROUP plc James Clifton, Group Chief Executive Peter Fitzwilliam, Chief Financial Officer	Tel: [phone]
SHORE CAPITAL (Nomad and Broker) Mark Percy / James Thomas / Sarah Mather	Tel: [phone]
HOUSTON (Financial PR and Investor Relations) Kate Hoare / Laura Stewart	Tel: [phone]

NOTES TO EDITORS  

MISSION   is a collective of Creative and MarTech Agencies led by entrepreneurs who encourage an independent spirit.   Employing 1,000 people across 27 locations and 3 continents, the Group successfully combines its diverse expertise to bring about commercially effective solutions for some of the world's biggest Clients. 

www.themission.co.uk

CHAIRMAN'S STATEMENT

EMERGING STRONGER

If it is true that we are only as good as what adversity throws at us, then it is fair to say that the MISSION Agencies and their people responded brilliantly to the challenges set through 2020.

To achieve profitability* whilst at the same time reducing debt was quite an achievement and I was impressed by the speed of response, the operational cost reductions made and the ability to maintain a seamless service to our Clients albeit where for most of the year the majority of our people were working remotely.

I therefore offer my sincere thanks to our people working across MISSION, for their continued dedication and hard work throughout such a time. All credit to everyone concerned.

In the face of this adversity, their commitment and entrepreneurial approach has seen the Group not only continue to deliver outstanding work for Clients day-in day-out, but also to make further strategic progress against its growth plans. This has been fundamental to leveraging the strong recovery in the Group's markets in the second half of the year, reversing first half losses and enabling it to deliver a robust and profitable* FY20 performance.

The Group has taken proactive, astute and at times difficult decisions, which has meant that MISSION is now emerging as an even stronger business than before, better positioned to make progress against its long-term plans and strategy.

The Group has further evolved the changes made in the prior year to reposition the business. Under James Clifton's strong leadership there has been further refinement of the Group structure, putting MISSION at the centre as a collaborator and supporter of its Agencies. This has been supported by both organic investment and new acquisitions, strengthening the expertise and capabilities that MISSION provides to its global network of Clients.

Board

All good things come to an end and Peter Fitzwilliam has decided to stand down from the business as Chief Financial Officer after 11 years. I have nothing but admiration for the financial stewardship, expertise and input that he has brought to MISSION since we restructured the business in 2010. Peter has been instrumental to MISSION's success during his tenure and it has been my privilege to work with him. On behalf of the Board I would like to thank him for his outstanding contribution, he leaves with our warmest of wishes.

I am delighted to report that Peter will remain available to the business in an advisory capacity, and I look forward to his support and advice as we go forward.

From April 2021, Peter will be replaced as Group Chief Financial Officer by Giles Lee, who has worked closely with Peter, James and myself as MISSION's Group Commercial Director for some years. Giles' undoubted financial capability coupled with his deep understanding of the sector, our Agencies and his experience centralising our back office functions, made him the unrivalled choice to succeed Peter.

Barry Cook has also informed the Board of his intention to retire to pursue his existing charitable and non-executive roles. Barry co-founded krow in 2005 which was acquired by MISSION in 2018 and was appointed to the Board in June 2019. We wish him well in his future endeavours.

Dividend

As outlined in our Trading Update on 20 January 2021, the improved trading performance and strong cash position underpinned the Board's decision to reinstate the deferred 2019 final dividend of 1.53 pence per share which was committed to in our 2019 Annual Report (the period before COVID-19). It was paid on 1 March 2021 to shareholders on the share register as at close of business on 12 February 2021.

Whilst the Board believes it would not be appropriate to pay any dividend in respect of FY20, we remain committed to our previously stated long term progressive dividend policy and will continue to monitor the situation as this year progresses in line with the performance of the Group.

Outlook

The Board is cautiously optimistic for 2021. Whilst the economic impact from COVID-19 has run deep and its legacy is yet to be fully understood, MISSION's performance so far this year has been encouraging.

We are confident that thanks to the hard work and dedication of all the Group's employees, MISSION remains well positioned to make further progress against its strategic priorities in 2021 and beyond.

David Morgan

Chairman

* Reference to profitability is in relation to headline profit. A reconciliation of headline profit to the Group's reported loss for the year is set out in Note 3.

CHIEF EXECUTIVE'S REVIEW

2020 was clearly a year like no other and I would like to congratulate our team on this robust performance in the face of incredibly challenging market conditions. Their extraordinary efforts have ensured that MISSION has emerged from the pandemic an even stronger and fitter business than we were before, focussed on the significant opportunities that are now presenting themselves across our markets.

COVID-19 has accelerated certain structural shifts across our industry which we are well positioned to capitalise on. Our dynamic and independent 'Agency First' culture and methodology has ensured our Agencies have remained agile throughout this difficult year, at the forefront of these changing dynamics and continually reinforcing our position as a trusted business partner to our Clients that we pride ourselves on.

Survive, Strive, Thrive

We entered the pandemic in a position of strength following a strong trading performance in FY19, our ninth consecutive year of growth. Through our phased COVID-19 management strategy of 'survive, strive, thrive', we were quick to take decisive and effective measures in the first half of the year to mitigate the impact of the crisis and conserve cash. These actions provided us with strong building blocks from which to bounce back as trading began to recover in the second half of the financial year, reversing the first half losses felt at the economic height of the pandemic and delivering a profitable headline PBT performance, ahead of market expectations.

Our primary focus throughout this difficult year has been the health and wellbeing of our people and ensuring business continuity for our Clients. Whilst some of our Agencies were inevitably significantly impacted due to their respective industry focus, the diversity of our Client portfolio ensured that we were at the forefront of activity in more resilient sectors such as healthcare and technology. 

Despite the incredibly challenging trading environment, the entrepreneurial and creative culture that exists throughout MISSION has seen us make further progress against our strategic priorities. We continue to place increasing focus on the additive value that MISSION can bring to our Agencies and over the course of the year we have taken significant steps to refine and strengthen the MISSION Advantage, enabling our Agencies to call upon specialist expertise as needed, to deliver a flexible multi-discipline service for our Clients .

Strategic investments in the MISSION Advantage have underpinned this momentum. In July we were delighted to announce the acquisition of the international psychological insights and behavioural solutions consultancy, Innovationbubble, which provides expert research and advice to a growing portfolio of Clients. This ranges from blue-chip companies including Asda, Aviva, HSBC and a number of leading pharmaceutical businesses, to high profile brands such as Diesel and SpaceNK, helping them better understand what drives the behaviour of their customers and ultimately how to improve marketing activity.  Although modest in financial terms, we view the acquisition as a significant strategic advance. We have been delighted at how quickly the Innovationbubble team have integrated themselves into the Group, already working closely with a number of the Agencies, and we have been particularly pleased by the positive responses from our Clients, Group-wide, to this valuable extended capability.

In October we launched MISSION MADE, our new centralised 24/7 Digital Production and Innovation studio. MISSION MADE initially supported four Agencies across the Group but a full roll-out is now underway and expected to be completed in the next 12 months. Two hubs have been created in Norwich and Ho Chi Minh City, providing access to a range of digital production services including web and mobile development, motion graphics, digital design and technical management.

Finally, in October we also welcomed brand activation consultancy, ALIVE, into the Group. This small but international team, based in Singapore, offer expert advice and results-driven activation campaigns for global brands across multiple media channels and marketing platforms, expanding the range of services we can offer our Agencies even further.

Performance Overview

Operating income ("revenue") fell by 24% to £61.5m (2019: £81.0m), with the impact of COVID-19 being felt initially in our Asian operations and then most notably in our property and events businesses. After an exceptionally challenging Q2, we saw a sequential recovery as the year progressed. Margins (headline operating profit as a percentage of revenue) recovered strongly in H2 to 11.5%, reflecting careful management of costs and benefit of Government support, resulting in an H2 headline operating profit of £3.7m and £1.9m for the year (2019: £10.8m).

In times of adversity, opportunities inevitably present themselves and, as previously highlighted, the diversity of our portfolio has meant that we have been well placed to grasp these opportunities. Our specialist technology and mobility Agency, April Six, capitalised on the enormous growth in the use of online platforms and delivered an excellent performance, with key highlights including the successful expansion of the Agency's scope of work with Amazon Web Services. The Group also launched the chemical group INEOS' hand sanitiser range in response to the impact of the pandemic. In addition, Pathfindr, our asset tracking business, demonstrated its ability to innovate, adapting its core technology to create the Safe Distancing Assistant, a device to warn if personnel within businesses come within two metres of each other.

Making A Positive Change

Despite the distractions of 2020, I am delighted that the year has seen us cement our commitment to Making Positive Change through the development of our inaugural Environmental, Social and Governance (ESG) manifesto. This manifesto embodies our commitment to ensuring that the impact MISSION makes on the world should always be positive and that our interaction with our people, Clients, communities and the wider environment makes a difference.

This manifesto has been developed through our work with advisory partners Creative Access and Green Element, and outlines an ambitious but deliverable and measurable strategy which is supported by our overall growth plans. We look forward to reporting on our progress in the coming years as we deliver this plan.

A key part of our manifesto is focused on introducing and developing talent in the industry. We work in many local communities and in several cases are a key employer in the towns where we have offices. In these areas we will continue to open our doors to local schools, colleges and universities to encourage emerging talent. As part of this we have introduced an Apprenticeship programme that has seen us take on 28 individuals, with a target to more than double this number by 2023.

Outlook

Trading in the first quarter of FY21 is on track with our expectations. Whilst the lockdown restrictions implemented in January 2021 have inevitably impacted certain markets and sectors more than others, our performance remains in line with our plans.

The Government's roadmap to exiting lockdown is providing much needed clarity for UK businesses. We are encouraged by the robust and growing pipeline of new business opportunities that are presenting themselves. It is particularly pleasing to see that a growing proportion of this pipeline includes collaboration between two or more Agencies from across the Group. 

Whilst our global operations have not been affected by Brexit, the removal of much of the uncertainty around negotiations opens up even more opportunities for us across our international markets. We see significant further opportunity for MISSION here through our Client-led strategy and look forward to building on our market leading sector expertise in new territories.

We also plan to capitalise on the undoubted acquisition, consolidation and collaboration opportunities that will arise over the next 12 months. We aim to leverage our compelling infrastructure by adding high margin, high engagement capabilities in data, analytics and performance media, underpinning a 14% headline operating profit margin target by 2022. Finally, following its successful launch, we will also look to build out our central eCommerce capability via MISSION Made.

James Clifton

Group Chief Executive

CHIEF FINANCIAL OFFICER'S REVIEW

Trading Performance

Overview

While the first half of 2020 was severely impacted by the onset of the COVID-19 pandemic, the Group recovered strongly in H2, demonstrating its resilience and the effectiveness of the decisions it took in H1 to mitigate the impact of the pandemic. The first half of the year saw revenues decline dramatically, by as much as 80% in our particularly affected Agencies in the property, events and cinema space. Our business priorities at this time were to protect the health and wellbeing of our staff and to embrace a working from home approach that enabled us to provide seamless continuity of Client service. We are proud that, thanks to the Group's continued hard work and dedication, our Client retention remained excellent during this exceptionally challenging period.

Our financial priorities at the economic height of the pandemic were to mitigate the impact of the crisis, preserve cash and, with the continued support of our bankers, NatWest, to agree relaxations of covenants and any additional liquidity that might be required in a downside scenario. The strong relationship we have developed with NatWest during more than a decade of working closely together enabled this support to be put in place swiftly. In the event, no additional liquidity was required due to the Group's cash management activities.

The actions we took in the first half of the year ensured that we were well placed to bounce back in the second half, as trading began to recover. Although revenues in H2 were still well below those of 2019, we still achieved operating profit margins of 11.5% and a headline profit before tax of £3.4m in the second half, a creditable performance. Our cash conservation actions also proved highly effective, and the year ended with the lowest net debt figure in the Group's history.

Billings and revenue

Turnover (billings) was 29% lower than the previous year, at £121.9m (2019: £171.1m), but since billings include pass-through costs (e.g. TV companies' charges for buying airtime), the Board does not consider turnover to be a key performance measure for its Agencies. Instead, the Board views operating income (turnover less third-party costs) as a more meaningful measure of activity levels. The exception to this is Pathfindr, the Group's embryonic asset tracking business, where turnover is a more relevant measure to gauge progress over time and against relevant competitors.

Taken as a whole, the Group's operating income (referred to as "revenue") for the year reduced by 24% to £61.5m (2019: £81.0m) but the impact of the pandemic was felt most severely in Q2.

There was also a wide range of variation across our different Agencies. Whilst the most significantly impacted sectors were property (ThinkBDW), events (Bray Leino Events) and cinema-related sales promotions (Mongoose), the diversity of our Client portfolio ensured that we have been at the forefront of activity in more resilient sectors such as healthcare and technology.  April Six, our specialist technology and mobility Agency, performed particularly well during the period, growing Amazon Web Services (AWS) into an important Group Client.

While much of Pathfindr's Client base was subject to the same lockdown restrictions as the rest of the world, it again demonstrated its ability to adapt. It sold 24,000 units of its Safe Distancing Assistant innovation during 2020, helping Pathfindr to increase turnover by over 60% to £1.5m (2019: £0.9m).

One of the differentiating features of MISSION is the longevity and loyalty of its Client base. We believe this is due to the dynamic and Agency-first culture which ensures Clients feel they are receiving a boutique level of Client service but yet supported by the resources of a multi-national group. Our Client retention statistics remained strong during this exceptionally challenging year, with well over 50% of our revenues generated from Clients who have been with us for 5 years or more.

Profit and margins

The Directors measure and report the Group's performance primarily by reference to headline results, in order to avoid the distortions created by one-off events and non-cash accounting adjustments relating to acquisitions. Headline results are calculated before acquisition adjustments, exceptional items, losses from start-up activities and investment write-offs (as set out in Note 3).

As with revenue, headline operating profit was very clearly divided into two halves. In H1, profits were hit hard by the suddenness of the drop in revenue. As an "Agency first" group, each Agency CEO was empowered to take cost reduction actions appropriate to their own circumstances but with the benefit of central coordination and support. Each Board member immediately and voluntarily reduced their own salary by 20% and this approach was widely adopted across the Group. Additionally, many staff in those Agencies most impacted by COVID-19 agreed to be furloughed in order to preserve jobs; at its peak, one third of the Group's workforce was furloughed. Despite these mitigating actions, the revenue decline was so severe that the Group reported an H1 loss of £1.8m. Regrettably, due to the sustained reduction in levels of revenue in some businesses, right-sizing in H2 resulted in 10% of our workforce being made redundant. We also took the decision to exit two of our London offices in order to reduce our cost base further. The costs of these one-off COVID-related restructuring events have been excluded from headline results.

Due to these actions, and despite H2 revenues being 22% lower than in 2019, our margin (headline operating profit as a percentage of revenue) recovered strongly in H2, to 11.5%, resulting in an H2 headline operating profit of £3.7m and £1.9m for the year (2019: £10.8m).

The Government's Coronavirus Job Retention Scheme was of significant benefit in 2020, without which many more jobs would have been lost as we reacted to sharply reduced revenues. Instead, the Scheme allowed continued employment until revenues started to improve and we were able to bring staff back off furlough. During the year, the Group benefitted from £3.0m of furlough receipts, which have been netted off gross employment costs within headline operating expenses. Introduced at the end of March, the Group received assistance of £1.6m in Q2, after which furlough claims tailed off.

After £0.1m of profits from joint ventures (2019: £0.1m) and financing costs of £0.8m (2019: £0.7m), headline profit before tax was £1.2m (2019: £10.2m). Considering the very dramatic impact of COVID-19 on the Group, we were pleased to deliver this profitable result, which was ahead of market expectations.

Adjustments to reported profits, detailed further in Note 3, totalled £3.2m (2019: £1.9m), comprising acquisition-related items of £1.9m (2019: £1.3m), reflecting the strong performance of krow during 2020, COVID-related restructuring costs of £1.0m (2019: nil) and losses from start-up activities of £0.3m (2019: £0.4m). After these adjustments, the reported loss before tax was £2.1m (2019: profit of £8.3m).

Taxation

COVID-19 has had a significant effect on the Group's headline tax rate. Whilst most territories experienced reduced revenues and profits, the exception was the US (predominantly April Six's West Coast activities), where tax rates are much higher than in the UK. This factor, coupled with losses in Asia and Germany which were unable to be utilised elsewhere, resulted in an unusually high headline tax rate of 42.6% (2019: 20.5%). The headline tax rate is expected to reduce to more normal levels during 2021.

On a reported basis, because amortisation of acquisition-related intangibles and adjustments to contingent consideration are not deductible for tax purposes, this has a significant effect on the Group's reported tax rate, resulting in a charge of £0.2m on reported losses before tax of £2.1m (2019: tax rate of 22.5% on reported profits before tax of £8.3m). The tax rate is expected to be consistently higher than the statutory rate (of 19.0%, unchanged from 2019) but the sizeable reduction in profits as a result of COVID and the relative size of non-deductible acquisition-related items results in a highly distorted outcome in 2020 which is not expected to be repeated in future years.

Earnings Per Share

Headline EPS was 1.0 pence (2019: 9.5 pence) and, on a diluted basis, was also 1.0 pence (2019: 9.0 pence).

After tax, the reported loss for the year was £2.2m (2019: profit of £6.4m) and EPS was a loss of 2.3 pence (2019: profit of 7.5 pence). On a diluted basis, EPS was also a loss of 2.3 pence (2019: profit of 7.1 pence).

Dividend

The Board adopts a progressive dividend policy, aiming to grow dividends each year in line with earnings but always balancing the desire to reward shareholders via dividends with the need to fund the Group's growth ambitions and maintain a strong balance sheet.

In view of the modest profit reported in 2020 and the fact that the Group accessed The Government's Coronavirus Job Retention Scheme, the Board did not pay an interim dividend and does not propose a final dividend. However, in view of the very significantly better than expected net debt position at 31 December 2020, the Board has, subsequent to the year-end, reinstated and paid the 2019 final dividend that was deferred at the economic height of the pandemic. We remain committed to our previously stated long term progressive dividend policy and will continue to monitor the situation as 2021 progresses.

Balance Sheet and Cash Flow

The key balance sheet ratio measured and monitored by the Board is the ratio of debt to headline EBITDA ("leverage ratio"). The Group started the year in a strong financial position, with a bank debt leverage ratio of less than x0.5 and committed bank facilities of 15m.

As a precautionary measure, these facilities were increased to 20m in Q1 and, as the impact of the pandemic started to be felt, a number of scenarios were modelled for the possible severity and duration of COVID-19. Sharing these scenarios with our bankers, NatWest, we secured their support for relaxations of covenants in both 2020 and 2021 and additional liquidity that might be required under our downside scenario.

At the same time, we implemented a series of cash-conservation measures. As well as the salary reduction and furlough actions mentioned earlier, all non-essential capital expenditure was put on hold, we took advantage of the Government's Time To Pay scheme, we reached agreement with vendors of acquired businesses for delayed payment terms, and we deferred the 2019 final dividend, due for payment in July 2020.

These decisive actions helped to reduce the Group's net bank debt position at the half year to 0.9m (2019: 5.1m) and the continuing focus on cash preservation in H2 resulted in year-end net bank debt of £1.2m, an historic low (2019: £4.9m).

At the height of uncertainty in Q2, the Group deferred roughly £6m of VAT, PAYE and National Insurance taxes. All deferred PAYE and National Insurance was repaid in Q3 and all deferred VAT has been repaid in Q1 2021.

Cash payments of £0.1m were settled for acquisitions totalling £0.6m made in the year and £2.2m of acquisition obligations from prior years were settled, of which 2.0m was in cash (2019: 3.3m, of which 2.7m was settled in cash). Amounts settled in the year were both paid later in the year and lower than the £3.4m expected at the end of 2019 as a result of reaching agreement with vendors to defer payments due to COVID-19 uncertainties. After increases of £1.3m in estimated future contingent consideration payments, the estimated acquisition liability at 31 December 2020 totalled 8.5m (2019: £8.9m). The large majority of this relates to post-acquisition earn-out profits for periods which have now ended and, as a consequence, £7.5m is expected to be settled in cash within the coming 12 months. Together with the short term nature of the Group's bank debt, due to its maturity in September 2021, the Group reported net current liabilities of £8.9m at the end of 2020. However, with new long term bank facilities agreed since year-end (referred to further below and in Note 19) and with acquisition liabilities due to be settled during 2021, the Group expects to report net current assets at the end of 2021.

COVID-19 had a significant impact on the profits of many of the Group's Agencies in 2020 but none has been mortally wounded. The Board expects levels of trading to return to pre-pandemic levels during H2 2021 and, accordingly, has concluded that any impairment in the value of goodwill at 31 December 2020 from the pandemic is only temporary. Details of the Board's annual assessment of the value of goodwill are set out in Note 11.

At the end of the year, the Group's leverage ratio of net bank debt to headline EBITDA (on an adjusted basis, pre-IFRS 16), was x0.6 (2019: x0.4) but, due to the depressed levels of EBITDA, its ratio of total debt, including remaining acquisition obligations, to EBITDA had increased to x4.3 (2019: x1.1). In the first half of 2021, while profits recover from the impact of COVID-19, these leverage ratios are expected to exceed the Board's KPI targets but are expected to return to more normal levels in H2.

Going Concern

The positive progress being made around the world with a vaccination programme suggests that the peak economic uncertainty of COVID-19 has passed. However, further scenario modelling has been undertaken of the Group's net debt position into the reasonably foreseeable future. This modelling included cautious assumptions about trading performance, investment plans and acquisition consideration obligations. The principal uncertainty in the projections is when and to what extent the Group's revenues will return to pre-pandemic levels. The central scenario anticipates that revenues will remain below 2019 levels until Q3 2021. Against this scenario, the Group was demonstrated to have adequate headroom against its pre-existing £20m banking facilities. These facilities were also demonstrated to be sufficient to cater for a downside scenario whereby the Group's trading in H1 2021 repeated that seen in H1 2020, the worst in the Group's history. This headroom has been further enhanced by a new three year £20m Revolving Credit Facility with NatWest which has an "accordion option" to increase the facility by up to £5m. Accordingly, the Board has concluded that it is appropriate to adopt the going concern basis in preparing the financial statements.

Peter Fitzwilliam

Chief Financial Officer

Consolidated Income Statement

For the year ended 31 December 2020

			Year to 31 December 2020		Year to 31 December 2019
		Note	£'000		£'000
TURNOVER		2	121,927		171,091
Cost of sales			(60,409)		(90,119)
OPERATING INCOME		2	61,518		80,972
Headline operating expenses			(59,585)		(70,219)
HEADLINE OPERATING PROFIT			1,933		10,753
Acquisition adjustments		3	(1,891)		(1,320)
Exceptional restructuring costs		3	(1,004)		-
Start-up costs		3	(335)		(431)
Loss on investments		3	-		(109)
OPERATING (LOSS) / PROFIT			(1,297)		8,893
Share of results of associates and joint ventures			56		69
(LOSS) / PROFIT BEFORE INTEREST AND TAXATION			(1,241)		8,962
Net finance costs		5	(821)		(668)
(LOSS) / PROFIT BEFORE TAXATION		6	(2,062)		8,294
Taxation		7	(186)		(1,868)
(LOSS) / PROFIT FOR THE YEAR			(2,248)		6,426
Attributable to:
Equity holders of the parent			(2,033)		6,314
Non-controlling interests			(215)		112
			(2,248)		6,426
Basic earnings per share (pence)		9	(2.3)		7.5
Diluted earnings per share (pence)		9	(2.3)		7.1
Headline basic earnings per share (pence)		9	1.0		9.5
Headline diluted earnings per share (pence)		9	1.0		9.0

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2020

					Year to 31 December 2020	Year to 31 December 2019
					£'000	£'000
(LOSS) / PROFIT FOR THE YEAR					(2,248)	6,426
Other comprehensive income - items that may be reclassified separately to profit or loss:
Exchange differences on translation of foreign operations					(173)	(50)
TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE YEAR					(2,421)	6,376
Attributable to:
Equity holders of the parent					(2,187)	6,285
Non-controlling interests					(234)	91
					(2,421)	6,376

Consolidated Balance Sheet

As at 31 December 2020

		As at 31 December 2020	As at 31 December 2019
	Note	£'000	£'000
FIXED ASSETS
Intangible assets	10	96,186	95,859
Property, plant and equipment		2,394	3,225
Right of use assets		10,729	8,135
Investments, associates and joint ventures	11	317	177
		109,626	107,396
CURRENT ASSETS
Stock		1,194	1,091
Trade and other receivables	12	33,314	40,998
Cash and short term deposits		3,806	5,028
		38,314	47,117
CURRENT LIABILITIES
Trade and other payables	13	(34,138)	(36,015)
Corporation tax payable		(359)	(742)
Bank loans	14	(4,969)	-
Acquisition obligations	16.1	(7,765)	(3,424)
		(47,231)	(40,181)
NET CURRENT (LIABILITIES) / ASSETS		(8,917)	6,936
TOTAL ASSETS LESS CURRENT LIABILITIES		100,709	114,332
NON CURRENT LIABILITIES
Bank loans	14	-	(9,927)
Lease liabilities	15	(9,414)	(6,229)
Acquisition obligations	16.1	(720)	(5,458)
Deferred tax liabilities		(346)	(417)
		(10,480)	(22,031)
NET ASSETS		90,229	92,301
CAPITAL AND RESERVES
Called up share capital	17	9,102	8,530
Share premium account		45,928	43,015
Own shares	18	(591)	(659)
Share-based incentive reserve		642	700
Foreign currency translation reserve		(66)	88
Retained earnings		34,842	40,021
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT		89,857	91,695
Non-controlling interests		372	606
TOTAL EQUITY		90,229	92,301

Consolidated Cash Flow Statement

For the year ended 31 December 2020

		Year to 31 December 2020	Year to 31 December 2019
		£'000	£'000
Operating (loss) / profit		(1,297)	8,893
Depreciation and amortisation charges		4,836	4,832
Movements in the fair value of contingent consideration		1,276	433
Profit / (loss) on disposal of property, plant and equipment		35	(49)
Non cash charge for share options, growth shares and shares awarded		183	215
Decrease / (increase) in receivables		7,684	(1,271)
Increase in stock		(103)	(241)
Decrease in payables		(1,175)	(1,106)
OPERATING CASH FLOWS		11,439	11,706
Net finance costs paid		(763)	(626)
Tax paid		(640)	(1,805)
Net cash inflow from operating activities		10,036	9,275
INVESTING ACTIVITIES
Proceeds on disposal of property, plant and equipment		3	151
Purchase of property, plant and equipment		(421)	(1,472)
Investment in software development		(696)	(848)
Acquisitions of or investments in businesses		(184)	(108)
Payment relating to acquisitions made in prior years		(2,018)	(2,731)
Net cash outflow from investing activities		(3,316)	(5,008)
FINANCING ACTIVITIES
Dividends paid		-	(1,831)
Payment of lease liabilities		(2,769)	(2,579)
Repayment of bank loans		(5,000)	-
Issue of shares to minority interests		-	3
Purchase of own shares held in EBT		-	(681)
Net cash outflow from financing activities		(7,769)	(5,088)
Decrease in cash and cash equivalents		(1,049)	(821)
Exchange differences on translation of foreign subsidiaries		(173)	(50)
Cash and cash equivalents at beginning of year		5,028	5,899
Cash and cash equivalents at end of year		3,806	5,028

Consolidated Statement of Changes in Equity

For the year ended 31 December 2020

	Share capital £'000	Share premium £'000	Own shares £'000	Share- based incentive reserve £'000	Foreign currency translation reserve £'000	Retained earnings £'000	Total attributable to equity holders of parent £'000	Non-controlling interest £'000	Total equity £'000
At 1 January 2019	8,436	42,506	(299)	498	117	35,826	87,084	512	87,596
Profit for the year	-	-	-	-	-	6,314	6,314	112	6,426
Exchange differences on translation of foreign operations	-	-	-	-	(29)	-	(29)	(21)	(50)
Total comprehensive income for the year	-	-	-	-	(29)	6,314	6,285	91	6,376
New shares issued	94	509	-	-	-	-	603	3	606
Share option charge	-	-	-	127	-	-	127	-	127
Growth share charge	-	-	-	75	-	-	75	-	75
Own shares purchased	-	-	(681)	-	-	-	(681)	-	(681)
Shares awarded and sold from own shares	-	-	321	-	-	(288)	33	-	33
Dividend paid	-	-	-	-	-	(1,831)	(1,831)	-	(1,831)
At 31 December 2019	8,530	43,015	(659)	700	88	40,021	91,695	606	92,301
Loss for the year	-	-	-	-	-	(2,033)	(2,033)	(215)	(2,248)
Exchange differences on translation of foreign operations	-	-	-	-	(154)	-	(154)	(19)	(173)
Total comprehensive loss for the year	-	-	-	-	(154)	(2,033)	(2,187)	(234)	(2,421)
New shares issued	28	135	-	-	-	-	163	-	163
Share option charge	-	-	-	179	-	-	179	-	179
Growth share charge	-	-	-	34	-	-	34	-	34
Settlement of growth shares	544	2,778	-	(271)	-	(3,051)	-	-	-
Shares awarded and sold from own shares	-	-	68	-	-	(95)	(27)	-	(27)
At 31 December 2020	9,102	45,928	(591)	642	(66)	34,842	89,857	372	90,229

Notes to the Consolidated Financial Statements

1. Principal Accounting Policies

Basis of preparation

The results for the year to 31 December 2020 have been extracted from the audited consolidated financial statements, which are expected to be published by 30 April 2021.

The financial information set out above does not constitute the Company's statutory accounts for the years to 31 December 2020 or 2019 but is derived from those accounts.  Statutory accounts for the year ended 31 December 2019 were delivered to the Registrar of Companies following the Annual General Meeting on 15 June 2020 and the statutory accounts for 2020 are expected to be published on the Group's website ( www.themission.co.uk ) shortly, posted to shareholders at least 21 days ahead of the Annual General Meeting ("AGM") on 14 June 2021 and, after approval at the AGM, delivered to the Registrar of Companies. 

The auditors, PKF Francis Clark, have reported on the accounts for the years ended 31 December 2020 and 31 December 2019; their reports in both years were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006 in respect of those accounts.

2. Segmental Information

IFRS 15: Revenue from Contracts with Customers requires the disaggregation of revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Board has considered how the Group's revenue might be disaggregated in order to meet the requirements of IFRS 15 and has concluded that the activity and geographical segmentation disclosures set out below represent the most appropriate categories of disaggregation. The Board considers that neither differences between types of Clients, sales channels and markets nor differences between contract duration and the timing of transfer of goods or services are sufficiently significant to require further disaggregation.

For management purposes the Group monitored the performance of its separate operating units, each of which carries out a range of activities, as a single business segment. However, since different activities have different revenue characteristics, the Group's turnover and operating income has been disaggregated below to provide additional benefit to readers of these financial statements.

Following the implementation of a Shared Services function from the start of 2018 and the resulting transfer of certain Agency-specific contracts onto centrally-managed arrangements, a significant portion of the total operating costs are now centrally managed and segment information is therefore now only presented down to the operating income level.

	Advertising  & Digital	Media Buying	Exhibitions & Learning	Public Relations	Total
Year to 31 December 2020	£'000	£'000	£'000	£'000	£'000
Turnover	87,418	18,546	8,738	7,225	121,927
Operating income	50,022	2,286	3,248	5,962	61,518

	Advertising  & Digital	Media Buying	Exhibitions & Learning	Public Relations	Total
Year to 31 December 2019	£'000	£'000	£'000	£'000	£'000
Turnover	109,421	30,855	20,162	10,653	171,091
Operating income	64,510	3,694	5,226	7,542	80,972

Assets and liabilities are not split between activities.

Geographical segmentation

The following table provides an analysis of the Group's operating income by region of activity:

	Year to 31	Year to 31
	December 2020	December  2019
	£'000	£'000
UK	53,077	72,228
USA	5,972	4,618
Asia	2,353	4,103
Rest of Europe	116	23
	61,518	80,972

3. Reconciliation of Headline Profit to Reported Profit

The Board believes that headline profits, which eliminate certain amounts from the reported figures, provide a better understanding of the underlying trading of the Group. The adjustments to reported profits in 2020 fall into three categories: acquisition-related items, exceptional restructuring costs and start-up costs.

	Year ended 31 December  2020 £'000			Year ended 31 December  2019 £'000
	PBT	PAT	PBT		PAT
	£'000	£'000	£'000		£'000

Headline profit	1,168	670	10,154	8,075
Acquisition-related items (Note 4)	(1,891)	(1,806)	(1,320)	(1,200)
Exceptional restructuring costs	(1,004)	(834)	-	-
Start-up costs	(335)	(278)	(431)	(358)
Write off of investments and associates	-	-	(109)	(91)
Reported (loss) / profit	(2,062)	(2,248)	8,294	6,426

Exceptional restructuring costs consist of redundancy and property closure costs in response to the COVID-19 pandemic.

Start-up costs derive from organically started businesses and comprise the trading losses of such entities until the earlier of two years from commencement or when they show evidence of becoming sustainably profitable. Start-up costs in 2020 relate to Story's new venture in Leeds, April Six's new venture in Germany and the launch of ALIVE in Asia. Start-up costs in 2019 related to the Leeds and Germany ventures, and trading losses at April Six's China operation.

4. Acquisition Adjustments

		Year to 31 December 2020	Year to 31 December 2019
		£'000	£'000
Movement in fair value of contingent consideration		(1,276)	(433)
Amortisation of other intangibles recognised on acquisitions		(505)	(870)
Acquisition transaction costs expensed		(110)	(17)
		(1,891)	(1,320)

The movement in fair value of contingent consideration relates to a net upward (2019: upward) revision in the estimate payable to vendors of businesses acquired in prior years . Acquisition transaction costs relate to professional fees in connection with acquisitions made or contemplated.

5. Net Finance Costs

	Year to 31 December 2020	Year to 31 December 2019
	£'000	£'000
Interest on bank loans and overdrafts, net of interest on bank deposits	(329)	(351)
Amortisation of bank debt arrangement fees	(42)	(41)
Interest expense on lease liabilities	(450)	(276)
Net finance costs	(821)	(668)

6. Profit or Loss Before Taxation

Profit or loss on ordinary activities before taxation is stated after charging / (crediting):

	Year to 31 December 2020	Year to 31 December 2019
	£'000	£'000
Depreciation of owned tangible fixed assets	1,214	1,270
Depreciation expense on right of use assets	2,645	2,452
Amortisation of intangible assets recognised on acquisitions	505	870
Amortisation of other intangible assets	472	240
Staff costs before furlough grants	47,954	52,931
Furlough grants received	(2,966)	-
Bad debts and net movement in provision for bad debts	53	(3)
Auditors' remuneration	234	205
Loss on foreign exchange	62	160

7. Taxation

	Year to 31 December 2020	Year to 31 December 2019
	£'000	£'000
Current tax:-
UK corporation tax at 19.00% (2019: 19.00%)	15	1,693
Adjustment for prior periods	(178)	(64)
Foreign tax on profits of the period	402	290
	239	1,919
Deferred tax:-
Current year originating temporary differences	(53)	(51)
Tax charge for the year	186	1,868

Factors Affecting the Tax Charge for the Current Year:

The tax assessed for the year is higher (2019: higher) than the standard rate of corporation tax in the UK. The differences are:

	Year to 31 December 2020	Year to 31 December 2019
	£'000	£'000
(Loss) / profit before taxation	(2,062)	8,294
(Loss) / profit on ordinary activities before tax at the standard rate of corporation tax of 19.00% (2019: 19.00%)	(392)	1,576
Effect of:
Non-deductible expenses	210	180
Depreciation in excess of capital allowances	210	(72)
Losses not utilised	174	157
Higher rates on overseas earnings	151	39
Adjustments in respect of prior periods	(178)	(43)
Other differences	11	31
Actual tax charge for the year	186	1,868

8. Dividends

	Year to 31 December 2020	Year to 31 December 2019
	£'000	£'000
Amounts recognised as distributions to equity holders in the year:
Interim dividend of nil (2019: 0.77 pence) per share	-	648
Prior year final dividend of nil (2019: 1.4 pence) per share	-	1,183
	-	1,831

In view of the trading performance during 2020, affected substantially by COVID-19, no interim dividend was paid during 2020 and no final dividend is proposed. The 2019 final dividend of 1.53 pence per share was proposed in the 2019 annual report and accounts but subsequently deferred due to the priority to preserve cash during the pandemic. Following the much-improved net debt position at 31 December 2020, this dividend was paid in March 2021. In accordance with IFRS this dividend will be recognised in the 2021 accounts.

9. Earnings Per Share

The calculation of the basic and diluted earnings per share is based on the following data, determined in accordance with the provisions of IAS 33: Earnings Per Share.

	Year to	Year to
	31 December 2020	31 December 2019
	£'000	£'000
Earnings
Reported profit for the year
Attributable to:
Equity holders of the parent	(2,033)	6,314
Non-controlling interests	(215)	112
	(2,248)	6,426
Headline earnings (Note 3)
Attributable to:
Equity holders of the parent	885	7,963
Non-controlling interests	(215)	112
	670	8,075
Number of shares
Weighted average number of Ordinary shares for the purpose of basic earnings per share	88,341,383	84,056,636
Dilutive effect of securities:
Employee share options	2,360,072	4,426,774
Weighted average number of Ordinary shares for the purpose of diluted earnings per share	90,701,455	88,483,410
Reported basis
Basic earnings per share (pence)	(2.3)	7.5
Diluted earnings per share (pence)	(2.3)	7.1
Headline basis:
Basic earnings per share (pence)	1.0	9.5
Diluted earnings per share (pence)	1.0	9.0

A reconciliation of the profit after tax on a reported basis and the headline basis is given in Note 3.

10. Intangible Assets

	31 December 2020	31 December 2019
	£'000	£'000
Goodwill	92,160	91,752
Other intangible assets	4,026	4,107
	96,186	95,859

In accordance with the Group's accounting policies, an annual impairment test is applied to the carrying value of goodwill. The review performed assesses whether the carrying value of goodwill is supported by the net present value of projected cash flows derived from the underlying assets for each cash-generating unit ("CGU"), discounted using an appropriate discount rate. It is the Directors' judgement that each distinct Agency represents a CGU. The initial projection period of four years includes the annual budget for each CGU, based on insight into Clients' planned marketing expenditure and targets for net new business growth derived from historical experience, and extrapolations of the budget in subsequent years based on known factors and estimated trends. The key assumptions used by each CGU concern revenue growth and staffing levels and different assumptions are made by different CGUs based on their individual circumstances. Beyond this initial projection period, a generic long term growth rate is assumed.

The forecasting of future cash flows was more challenging in 2020 given the heightened level of uncertainty created by COVID-19. The main assumptions adopted were that economic activity would remain subdued in the first half of 2021 but that revenues would return to pre-pandemic levels in the second half, from which point the Group would resume more normal levels of growth. Long term annual growth assumptions of 2% beyond 2024 were based on information published by market analysts.

The resulting pre-tax cash flow forecasts were discounted using a rate of 8.20%, the average of the Weighted Average Cost of Capital ("WACC") over the 9 years from 2012, when the current methodology of calculating WACC was first adopted (2019: 8.07%, the WACC at 31 December 2019).

The reason for using this average rather than the WACC at 31 December 2020 (the "2020 WACC") was to avoid any distortion that may have been caused by the exceptional circumstances of COVID-19. Over the previous 8 years, the Group's WACC was consistently within a range of 7.5% to 8.5% and the Directors felt it inappropriate to discount cash flows that stretch into the indefinite future by using a potentially COVID-affected 2020 WACC.

The conclusion from using the above methodology was that no impairment in goodwill was required and is consistent with the Directors' assessment that any impairment that might have been caused by COVID-19 is only temporary in nature since all Agencies are predicting to return to pre-pandemic levels within the foreseeable future. No change to this conclusion is reached as a result of the following independent changes in assumptions: a one year delay in the achievement of 2021 budgets caused by COVID-19; any reduction in short term growth rates beyond 2021; nil long term growth rates; a 1% increase in discount rate. The only change in assumptions that would result in a material impairment in the carrying value of the Group's goodwill is an increase in discount rate of 3.5%, which management do not believe is a reasonably possible change in key assumption.

11. Investments, Associates and Joint Ventures

	Year to	Year to
	31 December 2020	31 December 2019
	£'000	£'000
At 1 January	177	-
Profit during the year	56	69
Additions	84	108
At 31 December	317	177

In 2019 the Group transferred its Learning activities into an established company, Fenturi Limited, in exchange for a 25% shareholding in that company. In 2020 the Group invested further in Fenturi. Fenturi is a Bristol-based digital learning agency with historical, positive previous associations with Bray Leino.

12. Trade and Other Receivables

	31 December 2020	31 December 2019
	£'000	£'000
Trade receivables	22,296	27,451
Accrued income	7,923	9,779
Prepayments	2,180	2,759
Other receivables	915	1,009
	33,314	40,998

An allowance has been made for estimated irrecoverable amounts from the provision of services of £97,000 (2019: £82,000). The estimated irrecoverable amount is arrived at by considering the historic loss rate and adjusting for current expectations, Client base and economic conditions, including the potential impact of COVID-19 which has resulted in an increase in the estimated loss rate in 2020.

Accrued income relates to unbilled work in progress and has substantially the same risk characteristics as the trade receivables for the same types of contracts.

		31 December 2020	31 December 2019
		£'000	£'000
Gross trade receivables		22,393	27,533
Gross accrued income		7,923	9,779
Total trade receivables and accrued income		30,316	37,312
Expected loss rate		0.3%	0.2%
Provision for doubtful debts		97	82

13. Trade and Other Payables

	31 December 2020	31 December 2019
	£'000	£'000
Trade creditors	9,622	14,050
Deferred income	8,636	5,754
Other creditors and accruals	8,102	9,333
Other tax and social security payable	5,918	4,303
Lease liabilities (Note 15)	1,860	2,575
	34,138	36,015

Deferred income has increased by £2,882,000 predominantly as a result of a number of Clients making payments on account shortly before year end.

14. Bank Overdrafts, Loans and Net Bank Debt

	31 December 2020	31 December 2019
	£'000	£'000
Bank loan outstanding	5,000	10,000
Unamortised bank debt arrangement fees	(31)	(73)
Carrying value of loan outstanding	4,969	9,927
Less: Cash and short term deposits	(3,806)	(5,028)
Net bank debt	1,163	4,899
The borrowings are repayable as follows:
Less than one year	5,000	-
In one to two years	-	10,000
	5,000	10,000

Bank debt arrangement fees, where they can be amortised over the life of the loan facility, are included in finance costs. The unamortised portion is reported as a reduction in bank loans outstanding.

At 31 December 2020, the Group's committed bank facilities comprised a revolving credit facility of £20.0m, expiring on 28 September 2021, with an option to extend the facility by one year. Interest on the facility is based on LIBOR plus a margin of between 1.25% and 2.00% depending on the Group's debt leverage ratio. On 6 April 2021, the Group agreed a new revolving credit facility of £20m, expiring on 5 April 2024, with an option to increase the facility by £5m and by one year.  Interest on the new facility is based on SONIA (sterling overnight index average) plus a margin of between 1.50% and 2.25% depending on the Group's debt leverage ratio, payable in cash on loan rollover dates.

In addition to its committed facilities, the Group has available an overdraft facility of up to £3.0m with interest payable by reference to National Westminster Bank plc Base Rate plus 2.25%.

At 31 December 2020, there was a cross guarantee structure in place with the Group's bankers by means of a fixed and floating charge over all of the assets of the Group companies in favour of National Westminster Bank plc. This security arrangement has been replicated in the Group's new banking facilities.

All borrowings are in sterling.

15. Lease Liabilities

Obligations under leases are due as follows:

	31 December 2020	31 December 2019
	£'000	£'000
In one year or less (shown in trade and other payables)	1,860	2,575
In more than one year	9,414	6,229
	11,274	8,804

16. Acquisitions

16.1 Acquisition Obligations

The terms of an acquisition provide that the value of the purchase consideration, which may be payable in cash or shares at a future date, depends on uncertain future events such as the future performance of the acquired company. The Directors estimate that the liability for contingent consideration payments is as follows:

	31 December 2020			31 December 2019
	Cash £'000	Shares £'000	Total £'000	Cash £'000	Shares £'000	Total £'000
Less than one year	7,461	304	7,765	3,261	163	3,424
Between one and two years	140	-	140	3,690	160	3,850
In more than two years but less than three years	280	-	280	-	-	-
In more than three years but less than four years	300	-	300	1,552	56	1,608
	8,181	304	8,485	8,503	379	8,882

A reconciliation of acquisition obligations during the period is as follows:

	Cash £'000		Shares £'000	Total £'000
At 31 December 2019	8,503		379	8,882
Obligations settled in the period	(2,018)		(163)	(2,181)
Adjustments to estimates of obligations	1,188		88	1,276
New acquisitions	508		-	508
At 31 December 2020		8,181	304	8,485

16.2 Acquisitions during the year

A total of £608,000 was invested in acquisitions during the year, comprising initial cash consideration of £100,000 and deferred contingent consideration of £508,000. Had the Group consolidated the results of acquisitions made during the year, from the beginning of the year, the Directors estimate that the turnover, operating income and headline operating profit of the Group would not have been materially different to the numbers presented in the consolidated income statement.

17. Share Capital

	31 December 2020	31 December 2019
	£'000	£'000
Allotted and called up:
91,015,897 Ordinary shares of 10p each (2019: 85,295,565 Ordinary shares of 10p each)	9,102	8,530

Share-based incentives

The Group has the following share-based incentives in issue: 

	At start of year	Granted/ acquired	Waived/ lapsed	Exercised	At end of year
TMMG Long Term Incentive Plan	890,262	553,364	(22,500)	(223,299)	1,197,827
Growth Share Scheme	5,434,162	-	-	(5,434,162)	-

The TMMG Long Term Incentive Plan ("LTIP") was created to incentivise senior employees across the Group. Nil-cost options are awarded at the discretion of, and vest based on criteria established by, the Remuneration Committee. During the year, 223,299 options granted in 2015 and 2017 were exercised at an average share price of 61.9p and at the end of the year 225,921 of the outstanding options are exercisable. Certain individuals received performance awards in the early part of 2020 as a result of the financial performance of their Agency in 2019 and a proportion of these awards were in grants of nil-cost options over a total of 553,364 shares, vesting over a 3 year period to 2023.

Shares held in an Employee Benefit Trust (see Note 18) will be used to satisfy share options exercised under the Long Term Incentive Plan.

A Growth Share Scheme was implemented on 21 February 2017. Participants in the scheme subscribed for Ordinary A shares in The Mission Marketing Holdings Limited (the "growth shares") at a nominal value. The performance condition attaching to these growth shares was met during 2019 and the shares could be exchanged for an equivalent number of Ordinary Shares in MISSIONduring the period up to 60 days from the announcement of the Group's financial results for the year ending 31 December 2019, subject only to continued employment. During the year the 5,434,162 growth shares were exchanged for 5,434,162 Ordinary Shares.

18. Own Shares

	No. of shares	£'000
At 31 December 2018	741,367	299
Own shares purchased during the year	623,570	681
Awarded or sold during the year	(288,194)	(321)
At 31 December 2019	1,076,743	659
Awarded or sold during the year	(178,929)	(68)
At 31 December 2020	897,814	591

Shares are held in an Employee Benefit Trust to meet certain requirements of the Long Term Incentive Plan.

19. Post Balance Sheet Events

On 6 April 2021, the Group agreed a new revolving credit facility of £20m, expiring on 5 April 2024, with an option to increase the facility by £5m and by one year. Further details are provided in Note 14.

 

END

 

 

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