UNAUDITED HALF YEAR RESULTS 2024

Pebble Group PLC (The)
09 September 2024
 

 

 

9 September 2024

THE PEBBLE GROUP PLC

("The Pebble Group" or the "Group")

 

UNAUDITED HALF YEAR RESULTS 2024

Strong operational progress with performance for FY 24 expected to be in line with market expectations

Appointment of new Non-Executive Chair

 

The Pebble Group (AIM: PEBB, OTCQX: PEBBF), a leading provider of digital commerce, products and related services to the global promotional products industry, announces its unaudited results for the six months ended 30 June 2024 ("HY 24" or the "Period").

 

Having achieved satisfactory results in HY 24, the Board expects that for the year ending 31 December 2024 ("FY 24") the Group's results will be in line with market expectations.

 

Commenting, Chris Lee, Chief Executive Officer of The Pebble Group said: "We expect our full year performance to be in line with market expectations and have made strong operational progress in the period. The Group's robust financial profile and market leading businesses leave us well-placed to gain market share in the circa $50bn global promotional products market.

 

"I am also delighted to welcome Anne de Kerckhove to The Pebble Group as our Non-Executive Chair. Anne's significant experience will further strengthen the Board's expertise and be particularly valuable as we push to deliver Facilisgroup's technology and product innovation strategy."

 

 

Financials

 

Statutory results

HY 24

HY 23

Change

FY 23

Revenue

£60.8m

£63.3m

-4%

£124.2m

Gross profit margin

44.7%

42.8%

+1.9ppt

43.6%

Operating profit

£3.2m

£3.3m

-3%

£8.0m

Profit before tax

£2.9m

£3.1m

-6%

£7.4m

Basic earnings per share

1.36p

1.37p

-1%

3.46p

 

Other financial highlights

HY 24

HY 23

Change

FY 23

Adjusted EBITDA1

£7.4m

£7.5m

-1%

£16.0m

Net cash2

£4.9m

£4.2m

+£0.7m

£15.9m

Adjusted basic earnings per share3

1.87p

2.08p

-10%

4.60p

 

 

Financial highlights

 

·    Group Adjusted EBITDA in line with prior year at £7.4m

·    Gross profit margins continue to expand, up 1.9 percentage points to 44.7%, driven by improved margins at Brand Addition of 35.3% (HY 23: 33.2%)

·    Customer retention remains excellent across the Group as our services continue to resonate well with our customers, underpinning growth opportunities

·    Facilisgroup: Revenue, in home currency, for HY 24 of USD11.3m (HY 23: USD11.3m) generating USD5.4m Adjusted EBITDA, slightly ahead of prior year

·    Brand Addition: Revenue for HY 24 of £51.9m (HY 23: £54.2m) generating £4.6m Adjusted EBITDA, slightly ahead of prior year

·    Balance sheet remains strong with cash generated funding the Group's capital investment to support its growth strategy whilst continuing to increase shareholder returns

·    On 6 September 2024, £0.8m of up to £5.0m has been returned to Shareholders under the Share Buyback Programme launched in May 2024 and the Group grew its dividend paid in in HY 24 by 100% to £2.0m (HY 23: £1.0m)

 

Business highlights

 

·    In Facilisgroup:

·    Appointed our first Chief Product Officer, focused on the refinement and delivery of our technology strategy which follows on from the leadership change in late 2023

·    At 6 September 2024, Partner numbers were 240 (31 December 2023: 242) with 12 quality new Partners added to date in 2024. Underlying Partner retention rate remains excellent at circa 98%

·    Key indicators of Gross Merchandise Value ("GMV") (+5%) and spend through our Preferred Suppliers (+6%) have returned to growth

·    Capitalised investment into new Facilisgroup technology products reducing in the year with further reduction planned for 2025 as the major new product investment cycle is now behind us

 

·    In Brand Addition:

·    Revenue has recovered well following a challenging second half in 2023

·    High client retention levels continue

·    Gross margin strength and disciplined cost management is supporting the Group's profitability in uncertain market conditions

·    Appointed a Global Marketing Director to evolve the business's approach to new client acquisition

Outlook and Post Period update

·    The Board expects FY 24 results to deliver on its market expectations

·    Appointment of Anne de Kerckhove as Non-Executive Chair, bringing significant experience and further strengthening the Board's technology expertise following the appointment of Non-Executive Director, David Moss in June 2023

 

 

 

1

Adjusted EBITDA means operating profit before depreciation, amortisation and share-based payment charge/credit

2

Net cash is calculated as cash and cash equivalents less borrowings (excluding lease liabilities)

3

Adjusted basic earnings per share ("EPS") represents Adjusted Earnings meaning profit after tax before amortisation of acquired intangible assets and share-based payment charge/credit divided by a weighted average number of shares

 

Presentation for Analysts and Investors

A presentation for analysts and investors with Q&A will take place at 8:00am today by webinar.

Please register to attend via this link:

The Pebble Group HY 24 Results Presentation

 

A copy of the presentation is available on the Investors section of The Pebble Group's website at https://www.thepebblegroup.com/investors/

 

Presentation for retail investors

The management team is hosting a separate online presentation for retail investors with Q&A at 1:00pm on Wednesday 11 September 2024.  To participate, please register with PI World:

https://bit.ly/PEBB_H124_results_webinar

 

A recording of this presentation will be made available on the Investors section of The Pebble Group's website at https://www.thepebblegroup.com/investors/

 

 

 

Enquiries:

 

The Pebble Group

Chris Lee, Chief Executive Officer

Claire Thomson, Chief Financial Officer

 

+44 (0) 750 012 4121

Panmure Liberum (Nominated Adviser and Broker)

Edward Mansfield

Will King

Josh Moss

+44 (0) 20 3100 2000

Temple Bar Advisory (Financial PR)

Alex Child-Villiers

Alistair de Kare-Silver

Sam Livingstone

+44 (0) 207 183 1190

pebble@templebaradvisory.com

About The Pebble Group

 

The Pebble Group is a provider of digital commerce, products and related services to the global promotional products industry, comprising two differentiated businesses, Facilisgroup and Brand Addition, focused on specific areas of the promotional products market. For further information, please visit www.thepebblegroup.com.

 

CHIEF EXECUTIVE OFFICER'S REVIEW

 

Summary of results

 

We are satisfied with the Group's financial performance in HY 24 achieving Revenue of £60.8m (HY 23: £63.3m), Adjusted EBITDA of £7.4m (HY 23: £7.5m) and Operating profit of £3.2m (HY 23: £3.3m).

 

The Group continues to have a strong balance sheet and our working capital cycle remains disciplined and in a consistent cycle with prior years. As a result of the Group's strong cash generation, net cash at 30 June 2024 was £4.9m (30 June 2023: £4.2m, 31 December 2023: £15.9m) following cash distributions of £2.6m in HY 24 (HY 23: £1.0m) through the previously announced dividend (£2.0m) and Share Buyback Programme (£0.6m).

 

Introduction

 

The Pebble Group's core competency is to use its technology and sustainability expertise, deep industry understanding and global footprint to create long-term relationships and grow its market share in the circa $50 billion promotional products market. Our two businesses, Facilisgroup and Brand Addition, hold market leading and differentiated positions in this industry, delivering strong margins and cash generation.

 

The Group has significantly enhanced its senior talent pool over the last year and today we welcome the appointment of Anne de Kerckhove as our new Non-Executive Chair. Anne brings a wealth of relevant skills to the Group and further advances the technology sector expertise that was added to the Board in 2023 by the appointment of Non-Executive Director David Moss, co-founder of Blue Prism.

 

At Facilisgroup, following a change of leadership in late 2023, strong operational progress has been made. We are pleased to have appointed our first Chief Product Officer, focused on the refinement and delivery of our technology and product innovation strategy, a crucial part of advancing towards our medium-term aspirations. I have continued to directly lead the business, deepening my connection with its Partners (customers), Preferred Suppliers and team. These important relationships have strengthened over this time and leave the business well positioned for sustainable growth. The Board is currently carefully considering next steps regarding the leadership of Facilisgroup, to ensure it has the required depth and breadth of expertise for the next stage of its development.

 

At Brand Addition, we have appointed a Global Marketing Director to evolve the business's approach to new client acquisition alongside supporting the development of existing client relationships.

 

Our approach to the market and the financial performance in the Period of both Facilisgroup and Brand Addition is described below.

 

Facilisgroup: providing a digital commerce platform for promotional products businesses in North America

 

Revenue and profit analysis


HY 24

HY 23

FY 23

Recurring revenue

£8.5m

£8.6m

£17.0m

Other revenue

£0.4m

£0.6m

£0.9m

Total revenue

£8.9m

£9.2m

£17.9m

Gross profit margin

100%

100%

100%

Adjusted EBITDA

£4.2m

£4.3m

£8.9m

Adjusted EBITDA margin

47%

47%

50%

 

Facilisgroup revenue in USD, the home currency of the business, was in line with HY 23. In GBP, the Group's reporting currency, there was a decrease of £0.3m (3% on HY 23) due to foreign exchange rates compared to prior year.

 

Facilisgroup's growth record since the Group listed on AIM in late 2019 is robust, with a 4-year CAGR to 30 June 2024 of 15%. The reduced Annual Recurring Revenue ("ARR") growth in HY 24 compared to prior periods reflects that our fee model is underpinned by the GMV value that is placed through our technology and the attention that has been placed on significant operational progress in the last 12 months.

 

To recap, the income model for our ARR has two elements:

 

1.           

Technology Subscription Fee: Fixed annually and paid monthly by our Partners based on the GMV in the prior calendar year; and

2.           

Preferred Supplier Activity Fee: Accrued monthly and paid twice yearly by our Preferred Suppliers based upon the in-month purchases through these contracted Preferred Suppliers.

 

In 2023, GMV was in line with the prior year due to a broader market slowdown, indicating that our Technology Subscription Fee for existing Partners will be broadly flat in 2024. Growth in 2024 will be predominantly driven by additional Partner wins from 2023 and 2024, plus increasing purchases through our Preferred Suppliers compared to prior year.

 

The activity on these key forward indicators in HY 24 has improved compared to prior year as GMV in HY 24 increased by 5% to USD724m (HY 23: USD688m) and Preferred Supplier Purchases increased by 6% to USD240m (HY 23: USD227m). This increase is predominantly from the contribution of recently added new Partners. Improvements in the macroeconomic environment would be expected to contribute to further increasing GMV and Preferred Supplier Purchases supporting future income growth when Technology Subscription Fees are renewed in January 2025.

 

Partner numbers at 6 September 2024 were 240 (31 December 2023: 242) including 12 new quality Partner wins. Strong Partner retention rates continue. Within our Partner attrition, 9 Partners were acquired by other businesses and 1 Partner was exited by Facilisgroup, leaving underlying attrition of 4 and a retention rate of 98%. A key area of operational focus in the last 12 months has been improvements in our sales organisation and go-to-market strategy where we have an identified target list of 1,600 businesses and a growing pipeline.

 

Our strategy to scale Facilisgroup is focused on driving GMV through our technology, delivering services that provide value to support the "Attach Rate" percentage derived from the amount of income earned against this GMV. Below we share the four principal strategies for growth to unlock the large value opportunity and alongside each, summarise the operational progress that has been made.

 

 

Strategy for growth

Progress in last 12 months

1.   

Retain existing Partners through supporting their workflow efficiency and growth and consequently the GMV throughput of their businesses

·    Improved relationships, supporting retention

·    Investment in technology to maintain a market leading Product proposition

·    Learning and education initiatives to influence Partner GMV

2.   

Winning more Partners, gaining market share within our existing Total Addressable Market ("TAM")

·    Refocussed on a higher quality and scale of new Partner additions

·    More knowledgeable, experienced sales team, increasing the new Partner pipeline

3.   

Concentrating Partner purchases through our Preferred Suppliers

·    Deepening relationships with top-tier Preferred Suppliers including fewer, higher quality events

·    Utilising large data sources created by USD1.4bn of GMV to improve the Preferred Supplier purchases

4.   

New product development, bringing additional technology to market to grow the services to our existing Partners and increase our TAM within the North American promotional products market

·    Stores: eCommerce Platform

Through its most significant capital investment period.

Contributing to new Partner acquisition and retention

Currently:  54 customers

Focus is on targeting existing Partners as our principal route to additional product uptake

·    Orders: Order workflow for small sized distributors

Through its most significant capital investment period.

Currently: 45 beta customers

Focus is on integration with our Preferred Suppliers to support product usage

 

 

We have chosen to invest capital into new product development (Stores and Orders) over the last three years. In 2025, our aim is for Facilisgroup's total capitalised product development to continue to reduce.

 

We believe that Facilisgroup has made strong operational progress and with its leading market position, growth potential and excellent profit margins is well-placed to continue to gain market share and drive value for the Group.

 

Brand Addition: providing promotional products and related services under contract to many of the world's most recognisable brands

 

Revenue and profit analysis


HY 24

HY 23

FY 23

Revenue

£51.9m

£54.2m

£106.3m

Gross profit

£18.3m

£18.0m

£36.3m

Gross profit margin

35.3%

33.2%

34.1%

Adjusted EBITDA

£4.6m

£4.5m

£9.5m

Adjusted EBITDA margin

8.9%

8.3%

8.9%

 

Brand Addition revenue has recovered well in HY 24 following the previously announced lower than expected revenues in the last six months of 2023, driven primarily by challenging macroeconomic conditions leading to a reduction in promotional marketing spend by our clients in the Technology and Consumer sectors.

 

HY 24 revenue was £51.9m, 4.2% behind HY 23. In HY 24, there has been some recovery in our Technology clients which are slightly ahead of HY 23. Clients in our Consumer sector represent most of the difference in total revenue compared to HY 23.

 

Gross margins have increased over the last two years to 35.3% in HY 24 (HY 23: 33.2%, HY 22: 29.9%) reflecting the value being created by the business for its clients. Alongside this, careful cost management has resulted in EBITDA of £4.6m (HY 23: £4.5m), slightly ahead of prior year.

 

Brand Addition supports its clients - which include many of the best-known brands in the world - by providing a range of complex services to deliver promotional merchandise strategies. These services are underpinned by technology, creative product solutions with a strong and consistent sustainability focus, delivered across multiple geographies. We believe that Brand Addition is one of the few businesses with the skills, knowledge and experience to provide this level of service at scale and this supports its high client retention levels.

 

The majority of Brand Addition's revenue is generated through approximately 70 client contracts and, with a new business development target list of 800 companies, Brand Addition has a large addressable market to grow into. Current new business tendering activity is in line with previous periods, albeit final decision making for the appointment of new contracts has been slower than historically experienced.

 

In such an environment, we are focussed on protecting our profitability through strengthening our gross margin and prudently managing our cost base. Throughout the period, client retention has remained strong which supports the long-term growth and success of the business as market conditions improve.

 

At the end of August 2024 revenues are broadly in line with the same period in 2023.

 

Environmental, Social and Governance ("ESG")

 

In alignment with our four ESG cornerstones, during 2024 we have continued to drive action to measure and reduce carbon emissions and implement sustainable practices.  We have conducted our first Carbon Disclosure Project submission, enhancing transparency around our climate change initiatives. Following the achievement of the Race Equality Code Quality Mark award in 2023, we have maintained focus on Diversity, Equality and Inclusion with Brand Addition receiving the Living Wage Foundation accreditation and Facilisgroup relaunching its Women's Empower initiative. 

 

The Group is expected to publish its next ESG report in 2025 alongside its 2024 Annual Report and Accounts, providing a detailed update on our actions and progress.

 

Group outlook

 

From our assessment of recent sales activity, gross margin run rates and cost commitments, the Board expects FY 24 Group results to be in line with market expectations.

 

Good operational progress has been made in the last 12 months, delivering a solid foundation to support growth opportunities in the substantial market in which the Group operates. This is underpinned by a robust balance sheet and strong cash generation.

 

Whilst concentrating on our stated growth strategies, the Group will continue to focus on driving shareholder returns, including the current Share Buyback Programme.

 

Christopher Lee

Chief Executive Officer

9 September 2024

 

CHIEF FINANCIAL OFFICER'S REVIEW

 

HY 24 Results

 


HY 24

HY 23

FY 23


Unaudited

£'m

Unaudited

£'m

Audited

£'m

Revenue

60.8

63.3

124.2

Gross profit

27.2

27.1

54.2

Gross profit margin

44.7%

42.8%

43.6%

Adjusted EBITDA

7.4

7.5

16.0

Adjusted EBITDA margin

12.2%

11.8%

12.9%

Depreciation and amortisation

(5.0)

(3.4)

(7.4)

Share-based payment credit/(charge)

0.8

(0.8)

(0.6)

Operating profit

3.2

3.3

8.0

Net finance costs

(0.3)

(0.2)

(0.6)

Profit before tax

2.9

3.1

7.4

Tax

(0.6)

(0.8)

(1.6)

Profit for the Period

2.3

2.3

5.8


 



Weighted average number of shares

166,890,909

167,450,893

167,412,949

Adjusted Basic EPS

1.87p

2.08p

4.60p

Basic EPS

1.36p

1.37p

3.46p

 

Revenue

Revenue for the Period to 30 June was £60.8m (HY 23: £63.3m), a decrease of £2.5m (3.9%) compared to the same period in 2023. Facilisgroup's total revenues decreased £0.3m (3% on HY 23), flat when measured on a constant currency basis. ARR growth when measured in USD was 1.4%. This is lower than historic growth rates as the challenging economic backdrop to H2 23 impacted partner GMV and consequently the Net Revenue Retention ("NRR") percentage achieved on technology subscription fees which for FY 24 were 102% (FY 23: 110%). The balance of the movement relates to Brand Addition where overall, we have seen a stabilisation of order intake trends when compared to those experienced in H2 23.

 

Gross profit

Gross profit as a percentage of revenue continued to increase and was 44.7% (HY 23: 42.8%). This 1.9 ppt increase relates principally to Brand Addition where the business has successfully maintained the pricing increases introduced in FY 23.

 

Adjusted EBITDA

Adjusted EBITDA was £7.4m (HY 23: £7.5m) made up as follows:

-

Facilisgroup £4.2m (HY 23: £4.3m) maintaining excellent EBITDA margins of 47.2% (HY: 23 46.7%);

-

Brand Addition £4.6m (HY 23: £4.5m) as improvements in gross margin offset the impact of movements in sales; and

-

Central costs £1.4m (HY 23: £1.3m). Increase of £0.1m.

The Adjusted EBITDA margin increased to 12.2% (HY 23: 11.8%) as a result of improved margins at Brand Addition.

 

Depreciation and amortisation

The total charge for the Period was £5.0m (HY 23: £3.4m) of which £3.9m (HY 23: £2.2m) was the amortisation of intangible assets. The amortisation of intangible assets charge in HY 24 includes a one-off amount of £1.3m to align the amortisation period for acquired intangible software assets (previously 5 years) with that of those which are internally generated (3 years). The charge for the amortisation of acquired intangible assets in FY 24 is expected to be £2.2m and for FY 25 circa £0.6m.

 

Share-based payments

The total credit for the Period under IFRS 2 "Share-based payments" was £0.8m (HY 23: charge of £0.8m) and relates to the 2022, 2023 and 2024 awards made under The Pebble Group Long Term Incentive Plan ("LTIP") and Sharesave Plan. The credit reflects the decrease in the number of equity instruments expected to vest under the non market based performance conditions of the 2022 and 2023 LTIP awards.

 

Operating profit

Operating profit for the Period was £3.2m (HY 23: £3.3m).

 

Taxation

The tax charge for the Period was £0.6m (HY 23: £0.8m) and is based on the full year Group expected tax rate for 2024.

 

Basic Earnings per share

The earnings per share analysis in note 5 covers both adjusted earnings per share (profit attributable to equity shareholders before amortisation of acquired intangibles and share-based payment charge/credit divided by the weighted average number of shares in issue during the Period), and basic earnings per share (profit attributable to equity holders divided by the weighted average number of shares in issue during the Period). Adjusted earnings were £3.1m (HY 23: £3.5m) meaning adjusted basic earnings per share was 1.87 pence per share (FY 23: 2.08 pence per share), a decrease of 0.21 pence per share. Basic earnings per share was 1.36 pence per share (FY 23: 1.37 pence per share), a decrease of 0.01 pence per share.

 

Dividends

In March 2024, the Board announced a final dividend payment in respect of FY 23 confirming its intention to maintain a progressive dividend policy of making dividend payments of circa 30% of profit after tax. The Board remains committed to this decision but does not consider the introduction of an interim dividend payment necessary at this time. An update on the dividend payment in respect of FY 24 will be provided at the time of the full year announcement in March 2025.

 

Cash Flow

The Group had a cash balance of £4.9m at 30 June 2024 (30 June 2023: £4.2m) after distributions of £2.6m (HY 23: £1.0m) through the previously announced dividend and Share Buyback Programme.

 

Cash flow for the Period is set out below:


HY 24

HY 23

FY 23


Unaudited

£'m

Unaudited

£'m

Audited

£'m

Adjusted EBITDA

7.4

7.5

16.0

Movement in working capital

(9.4)

(9.7)

0.7

Capital expenditure

(3.7)

(4.0)

(8.6)

Leases

(0.8)

(0.9)

(1.6)

Operating cash flow

(6.5)

(7.1)

6.5

Tax paid

(1.6)

(1.5)

(2.5)

Net finance cash flows

(0.3)

(0.3)

(0.6)

Dividend paid

(2.0)

(1.0)

(1.0)

Purchase of own shares

(0.6)

-

-

Purchase of own shares by EBT

(0.1)

-

(0.4)

Exchange gain/(loss)

0.1

(1.0)

(1.2)

Net cash flow

(11.0)

(10.9)

0.8

 

The outflow in working capital in the Period was £9.4m (HY 23: £9.7m). This is in line with the normal in-year cycle which peaks in Q3.

 

Capital expenditure in the Period was £3.7m (HY 23: £4.0m). This spend relates principally to investment in the Facilisgroup digital commerce platform. This reduction aligns with our previous statements that FY 23 would be the peak of capital investment into new product development.

 

Lease payments relate to leases capitalised in accordance with IFRS 16 "Leases".

 

Cash and liquidity

The Group's working capital cycle is unwinding as expected. The high point experienced in the period from June to August 2024 is reducing, as we progress towards the year end, with clients and Partners continuing to pay to agreed terms.

 

The Group had Net cash of £6.6m at 6 September 2024 and continues to demonstrate an attractive profit to cash conversion. At the full year end, 31 December 2024 we expect Net cash to be circa £15m after a Dividend payment of £2.0m and assumed full year returns to Shareholders under the ongoing Share Buyback Programme of £2.0m (31 December 2023: £15.9m, Dividend £1.0m, Share Buyback Programme £Nil).

 

Claire Thomson

Chief Financial Officer

9 September 2024

 

CONSOLIDATED INCOME STATEMENT

 


 

 

 

Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023


Notes

£'000

£'000

£'000

Revenue


60,753

63,317

124,171

Cost of goods sold


(33,573)

(36,188)

(69,988)

Gross profit

 

27,180

27,129

54,183

Operating expenses


(23,991)

(23,810)

(46,185)

Operating profit

 

3,189

3,319

7,998

Analysed as:


 



Adjusted EBITDA1

6

7,354

7,480

15,978

Depreciation

9

(1,127)

(1,115)

(2,248)

Amortisation

8

(3,853)

(2,224)

(5,184)

Share-based payment credit/(charge)

13

815

(822)

(548)

Total operating profit

 

3,189

3,319

7,998

Finance expense


(281)

(266)

(589)

Profit before taxation

 

2,908

3,053

7,409

Income tax expense

4

(640)

(751)

(1,614)

Profit for the period

 

2,268

2,302

5,795

 


 



Basic earnings per share

5

1.36p

1.37p

3.46p

Diluted earnings per share

5

1.36p

1.37p

3.45p

 

1  Adjusted EBITDA, which is defined as operating profit before depreciation, amortisation and share-based payment credit/charge, is a non-GAAP metric used by management and is not an IFRS disclosure.

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 


Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023

 

£'000

£'000

£'000

Profit for the period

2,268

2,302

5,795

Items that may be subsequently reclassified to profit and loss

 



Currency translation differences

130

(1,901)

(2,068)

Other comprehensive income/(expense) for the period

130

(1,901)

(2,068)

Total comprehensive income for the period

2,398

401

3,727

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 



Unaudited

As at

30 June

2024

Unaudited

As at

30 June

2023

Audited

As at 31 December

2023


Notes

£'000

£'000

£'000

Assets


 



Non-current assets


 



Intangible assets

8

         61,070

60,353

61,307

Property, plant and equipment

9

            7,765

8,729

8,306

Deferred tax asset


               281

270

282

Total non-current assets

 

         69,116

69,352

69,895

Current assets


 



Inventories


         15,472

14,788

11,852

Trade and other receivables


         32,595

36,901

30,158

Current tax asset


               250

-

-

Cash and cash equivalents


            4,909

4,184

15,898

Total current assets

 

         53,226

55,873

57,908

Total assets

 

       122,342

125,225

127,803

Liabilities


 



Non-current liabilities


 



Lease liability

10

            5,650

6,795

6,130

Deferred tax liability


            1,926

2,370

2,365

Total non-current liabilities

 

            7,576

9,165

8,495

Current liabilities


 



Lease liability

10

            1,559

1,496

1,494

Trade and other payables


         25,708

28,403

28,965

Current tax liability


               118

397

381

Total current liabilities

 

         27,385

30,296

30,840

Total liabilities

 

         34,961

39,461

39,335

Net assets

 

         87,381

85,764

88,468

Equity

 

 



Share capital

11

1,665

1,675

1,675

Share premium

11

78,451

78,451

78,451

Own share reserve

 

(255)

-

(227)

Capital reserve

 

135

125

125

Merger reserve

 

(103,581)

(103,581)

(103,581)

Translation reserve

 

(1,075)

(1,038)

(1,205)

Share-based payment reserve

 

1,098

2,671

2,005

Retained earnings

 

110,943

107,461

111,225

Total equity

 

87,381

85,764

88,468

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

Share capital

Share premium

Own share reserve

Capital reserve

Merger reserve

Translation reserve

Share-based payment reserve

Retained earnings

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2023

1,675

78,451

-

125

(103,581)

863

1,892

106,164

85,589

Profit for the period

-

-

-

-

-

-

-

2,302

2,302

Other comprehensive   expense for the period

-

-

-

-

-

(1,901)

-

-

(1,901)

Total comprehensive (expense)/income

-

-

-

-

-

(1,901)

-

2,302

401

Employee share schemes             - value of employee services

-

-

-

-

-

-

743

-

743

Deferred tax on employee   share schemes

-

-

-

-

-

-

36

-

36

Dividend paid

-

-

-

-

-

-

-

(1,005)

(1,005)

Total transactions with          owners recognised in equity

-

-

-

-

-

-

779

(1,005)

(226)

At 30 June 2023

1,675

78,451

-

125

(103,581)

(1,038)

2,671

107,461

85,764

Profit for the period

-

-

-

-

-

-

-

3,493

3,493

Other comprehensive  expense for the period

-

-

-

-

-

(167)

-

-

(167)

Total comprehensive (expense)/income

-

-

-

-

-

(167)

-

3,493

3,326

Purchase of own shares by EBT

-

-

(395)

-

-

-

-

-

(395)

Employee share schemes         - value of employee services

-

-

168

-

-

-

(607)

271

(168)

Deferred tax on employee           share schemes

-

-

-

-

-

-

(59)

-

(59)

Total transactions with          owners recognised in equity

-

-

(227)

-

-

-

(666)

271

(622)

At 31 December 2023

1,675

78,451

(227)

125

(103,581)

(1,205)

2,005

111,225

88,468

Profit for the period

-

-

-

-

-

-

-

2,268

2,268

Other comprehensive           income for the period

-

-

-

-

-

130

-

-

130

Total comprehensive income

-

-

-

-

-

130

-

2,268

2,398

Purchase of own shares

(10)

-

-

10

-

-

-

(589)

(589)

Purchase of own shares by EBT

-

-

(109)

-

-

-

-

-

(109)

Employee share schemes             - value of employee services

-

-

81

-

-

-

(910)

44

(785)

Deferred tax on employee    share schemes

-

-

-

-

-

-

3

-

3

Dividend paid

-

-

-

-

-

-

-

(2,005)

(2,005)

Total transactions with    owners recognised in equity

(10)

-

(28)

10

-

-

(907)

(2,550)

(3,485)

At 30 June 2024

1,665

78,451

(255)

135

(103,581)

(1,075)

1,098

110,943

87,381












 

The Group has an Employee Benefit Trust (EBT) to administer share plans and to acquire shares, using funds contributed by the Group, to meet commitments to employee share schemes. At 30 June 2024, the EBT held 458,382 shares (30 June 2023: nil, 31 December 2023: 412,637 shares).

CONSOLIDATED CASH FLOW STATEMENT

 



Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023


Notes

£'000

£'000

£'000

Profit before taxation


2,908

3,053

7,409

Adjustments for:

 

 



Depreciation

9

1,127

1,115

2,248

Amortisation

8

3,853

2,224

5,184

Share-based payment (credit)/charge

13

(815)

822

548

Loss on disposal of fixed assets


-

3

(18)

Finance expense


281

266

589

Cash flows from operating activities before changes in working capital

 

 

7,354

 

7,483

 

15,960

Change in inventories


(3,645)

659

3,595

Change in trade receivables


(2,561)

(2,208)

4,535

Change in trade payables


(3,184)

(8,089)

(7,422)

Cash flows (used in)/from operating activities

 

(2,036)

(2,155)

16,668

Income taxes paid


(1,593)

(1,545)

(2,517)

Net cash flows (used in)/from operating activities

 

(3,629)

(3,700)

14,151

Cash flows from investing activities


 



Purchase of property, plant and equipment

9

(194)

(349)

(882)

Purchase of intangible assets

8

(3,491)

(3,687)

(7,648)

Net cash flows used in investing activities

 

(3,685)

(4,036)

(8,530)

Cash flows from financing activities


 



Lease payments - capital


(810)

(919)

(1,600)

Lease payments - interest


(188)

(199)

(399)

Interest paid


(42)

(67)

(190)

Dividend paid

7

(2,005)

(1,005)

(1,005)

Share-based payments - cash-settled


(7)

-

-

Purchase of own shares

11

(589)

-

-

Purchase of own shares by EBT

11

(109)

-

(395)

Net cash flows used in financing activities

 

(3,750)

(2,190)

(3,589)

Net cash flows

 

(11,064)

(9,926)

2,032

Cash and cash equivalents at beginning of period


15,898

15,058

15,058

Effects of exchange rate changes


75

(948)

(1,192)

Cash and cash equivalents at end of period

 

4,909

4,184

15,898

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

1.     GENERAL INFORMATION

 

The principal activity of The Pebble Group plc (the "Company") is that of a holding company and the principal activity of the Company and its subsidiaries (the "Group") is the sale of digital commerce, products and related services to the promotional merchandise industry. The Group has two segments: Brand Addition; and Facilisgroup. For Brand Addition, this is the sale of promotional products internationally, to many of the world's best-known brands. For Facilisgroup, this is the provision of digital commerce, consolidated buying power and community learning and networking events to SME promotional product distributors in North America, its Partners, through subscription-based services.

 

The Company was incorporated on 27 September 2019 in the United Kingdom and is a public company limited by shares registered in England and Wales. The registered office of the Company is Broadway House, Trafford Wharf Road, Trafford Park, Manchester, England M17 1DD. The Company registration number is 12231361.

 

2.     BASIS OF PREPARATION

 

These Condensed consolidated interim financial statements of the Group are for the 6 months ended 30 June 2024. They have been prepared on the basis of the accounting policies set out in the 2023 annual financial statements and in accordance with the requirements of UK-adopted IAS 34 "Interim Financial Reporting".

 

The Condensed consolidated interim financial statements are unaudited and do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. They should be read in conjunction with the Group's 2023 Annual report and financial statements which were prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006. The 2023 Annual report and financial statements have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain a statement under Section 498 of the Companies Act 2006.

 

The Condensed consolidated interim financial statements are presented in the Group's functional currency of Sterling and all values are rounded to the nearest thousand (£'000) except when otherwise indicated.

 

Accounting Policies

 

The accounting policies adopted in the preparation of the Condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2023 as described in the Group's Annual report and financial statements for that year and as available on the Group's website (www.thepebblegroup.com).

 

Taxation

 

Taxes on income in the interim periods are accrued using management's best estimate of the weighted average annual tax rate that would be applicable to expected total annual earnings.

 

Forward looking statements

 

Certain statements in this report are forward looking with respect to the operations, strategy, performance, financial condition and growth opportunities of the Group. The terms "expect", "anticipate", "should be", "will be", "is likely to", and similar expressions, identify forward-looking statements. Although the Board believes that the expectations reflected in these forward-looking statements are reasonable, by their nature these statements are based on assumptions and are subject to a number of risks and uncertainties. Actual events could differ materially from those expressed or implied by these forward-looking statements. Factors which may cause future outcomes to differ from those foreseen in forward-looking statements include, without limitation: general economic conditions and business conditions in the Group's markets, customers' expectations and behaviours, supply chain developments, technology changes, the actions of competitors, exchange rate fluctuations and legislative, fiscal and regulatory developments. Information contained in these financial statements relating to the Group should not be relied upon as a guide to future performance.

 

Alternative performance measures

 

Throughout the report, we refer to a number of alternative performance measures (APMs). APMs are used internally by management to assess the operating performance of the Group. These are non-GAAP measures and so other entities may not calculate these measures in the same way and hence are not directly comparable. The APMs that are not recognised under UK-adopted international accounting standards are:

 

·    Adjusted EBTIDA;

·    Adjusted operating profit;

·    Adjusted operating profit less finance expense; and

·    Adjusted earnings.

A reconciliation of the APMs can be found in note 6.

 

The Board considers that the above APMs provide useful information for stakeholders on the underlying trends and performance of the Group and facilitate meaningful year-on-year comparisons.

 

Key risks and uncertainties

 

The Group has in place a structured risk management process which identifies key risks and uncertainties along with their associated mitigants. The key risks and uncertainties that could affect the Group's medium-term performance and the factors that mitigate those risks are set out in the Group's Annual Report which can be found on the Group's website (www.thepebblegroup.com). These have not substantially changed in the period, with the exception of the strategic risk associated with share price performance, volatility and liquidity where, in its latest review, the Board has increased the level of risk in response to the extended period of low share price performance.


Going Concern statement

 

The Group meets its day-to-day working capital requirements through its own cash balances and committed banking facilities. The Group has a £10m Revolving Credit Facility to January 2026. In assessing the appropriateness of adopting the going concern basis in the preparation of these financial statements, the Directors have prepared cash flow forecasts and projections up to 31 December 2025.

 

The forecasts and projections, which the Directors consider to be prudent, have been further sensitised by applying reductions to revenue growth and margin, to consider a severe but plausible downside. Under both the base and sensitised case, the Group is expected to have headroom against covenants, which are based on interest cover and net leverage, and a sufficient level of financial resources available through existing facilities when the future funding requirements of the Group are compared with the level of committed available facilities. Based on this, the Directors are satisfied that the Group has adequate resources to continue in operational existence for at least 12 months from the date of signing the financial statements. For this reason, they continue to adopt the going concern basis in preparing the consolidated interim financial statements.

 

3.     SEGMENTAL ANALYSIS

 

The Chief Operating Decision Maker (CODM) has been identified as the Executive Directors. The Directors have determined that the operating segments, based on these financial statements, are: Brand Addition; Facilisgroup; and Central operations.

 

Segment information about the above businesses is presented below.

 

Income statement for the 6 months ended 30 June 2024

 


Brand Addition

Facilisgroup

Central operations

Total         Group


£'000

£'000

£'000

£'000

Revenue

51,852

8,901

-

60,753

Cost of goods sold

(33,573)

-

-

(33,573)

Gross profit

18,279

8,901

-

27,180

Operating expenses

(14,809)

(7,910)

(1,272)

(23,991)

Operating profit/(loss)

3,470

991

(1,272)

3,189

Analysed as:




 

Adjusted EBITDA

4,559

4,245

(1,450)

7,354

Depreciation

(793)

(294)

(40)

(1,127)

Amortisation

(671)

(3,182)

-

(3,853)

Share-based payment credit

375

222

218

815

Total operating profit/(loss)

3,470

991

(1,272)

3,189

Finance expense

(157)

(30)

(94)

(281)

Profit/(loss) before taxation

3,313

961

(1,366)

2,908

Income tax (expense)/income

(729)

(211)

300

(640)

Profit/(loss) for the period

2,584

750

(1,066)

2,268

 

Due to the timing on the delivery of orders, the Brand Addition segment of The Pebble Group plc traditionally raises a higher number of invoices in the period July to December which results in The Pebble Group plc's performance being weighted to the second half of the year. 

 

All the above revenues are generated from contracts with customers.

 

Income statement for the 6 months ended 30 June 2023

 


Brand Addition

Facilisgroup

Central operations

Total         Group


£'000

£'000

£'000

£'000

Revenue

54,153

9,164

-

63,317

Cost of goods sold

(36,188)

-

-

(36,188)

Gross profit

17,965

9,164

-

27,129

Operating expenses

(15,300)

(7,002)

(1,508)

(23,810)

Operating profit/(loss)

2,665

2,162

(1,508)

3,319

Analysed as:





Adjusted EBITDA

4,457

4,272

(1,249)

7,480

Depreciation

(783)

(295)

(37)

(1,115)

Amortisation

(670)

(1,554)

-

(2,224)

Share-based payment charge

(339)

(261)

(222)

(822)

Operating profit/(loss)

2,665

2,162

(1,508)

3,319

Finance expense

(176)

(22)

(68)

(266)

Profit/(loss) before taxation

2,489

2,140

(1,576)

3,053

Income tax (expense)/income

(612)

(526)

387

(751)

Profit/(loss) for the period

1,877

1,614

(1,189)

2,302

 

 

Income statement for the year ended 31 December 2023

 


Brand Addition

Facilisgroup

Central operations

Total        Group


£'000

£'000

£'000

£'000

Revenue

106,276

17,895

-

124,171

Cost of goods sold

(69,988)

-

-

(69,988)

Gross profit

36,288

17,895

-

54,183

Operating expenses

(30,084)

(13,514)

(2,587)

(46,185)

Operating profit/(loss)

6,204

4,381

(2,587)

7,998

Analysed as:





Adjusted EBITDA

9,491

8,851

(2,364)

15,978

Depreciation

(1,640)

(571)

(37)

(2,248)

Amortisation

(1,335)

(3,849)

-

(5,184)

Share-based payment charge

(312)

(50)

(186)

(548)

Total operating profit/(loss)

6,204

4,381

(2,587)

7,998

Finance expense

(345)

(67)

(177)

(589)

Profit/(loss) before taxation

5,859

4,314

(2,764)

7,409

Income tax expense

(891)

(700)

(23)

(1,614)

Profit/(loss) for the year

4,968

3,614

(2,787)

5,795

 

Statement of financial position as at 30 June 2024

 


Brand Addition

Facilisgroup

Central operations

Total        Group


£'000

£'000

£'000

£'000

Assets




 

Non-current assets




 

Intangible assets

       38,602

       22,468

 -

         61,070

Property, plant and equipment

         4,863

         2,632

            270

            7,765

Deferred tax asset

             171

                    - 

            110

               281

Total non-current assets

       43,636

       25,100

            380

         69,116

Current assets




 

Inventories

       15,472

 -

 -

         15,472

Trade and other receivables

       27,067

         5,298

            230

         32,595

Current tax asset

               (67)

 -

            317

               250

Cash and cash equivalents

         3,435

             994

            480

            4,909

Total current assets

       45,907

         6,292

        1,027

         53,226

Total assets

       89,543

       31,392

        1,407

       122,342

Liabilities




 

Non-current liabilities




 

Lease liability

         3,579

         1,921

            150

            5,650

Deferred tax liability

 -

         1,926

 -

            1,926

Total non-current liabilities

         3,579

         3,847

            150

            7,576

Current liabilities




 

Lease liability

         1,228

             282

              49

            1,559

Trade and other payables

       23,386

         1,807

            515

         25,708

Current tax liability

               (192)

             310

 -

               118

Total current liabilities

       24,422

         2,399

            564

         27,385

Total liabilities

       28,001

         6,246

            714

         34,961

Net assets

       61,542

       25,146

            693

         87,381

 

Statement of financial position as at 30 June 2023

 


Brand Addition

Facilisgroup

Central operations

Total        Group


£'000

£'000

£'000

£'000

Assets





Non-current assets





Intangible assets

38,095

22,258

-

60,353

Property, plant and equipment

5,744

2,750

235

8,729

Deferred tax asset

92

-

178

270

Total non-current assets

43,931

25,008

413

69,352

Current assets





Inventories

14,788

-

-

14,788

Trade and other receivables

32,039

4,568

294

36,901

Cash and cash equivalents

2,477

1,555

152

4,184

Total current assets

49,304

6,123

446

55,873

Total assets

93,235

31,131

859

125,225

Liabilities





Non-current liabilities





Lease liability

4,618

2,177

-

6,795

Deferred tax liability

-

2,370

-

2,370

Total non-current liabilities

4,618

4,547

-

9,165

Current liabilities





Lease liability

1,179

255

62

1,496

Trade and other payables

26,185

1,605

613

28,403

Current tax liability

(56)

770

(317)

397

Total current liabilities

27,308

2,630

358

30,296

Total liabilities

31,926

7,177

358

39,461

Net assets

61,309

23,954

501

85,764

 

Statement of financial position as at 31 December 2023

 


Brand Addition

Facilisgroup

Central operations

Total         Group


£'000

£'000

£'000

£'000

Assets





Non-current assets





Intangible assets

38,472

22,835

-

61,307

Property, plant and equipment

5,269

2,803

234

8,306

Deferred tax asset

158

-

124

282

Total non-current assets

43,899

25,638

358

69,895

Current assets





Inventories

11,852

-

-

11,852

Trade and other receivables

24,956

4,921

281

30,158

Cash and cash equivalents

12,906

1,607

1,385

15,898

Total current assets

49,714

6,528

1,666

57,908

Total assets

93,613

32,166

2,024

127,803

Liabilities





Non-current liabilities





Lease liability

4,161

1,969

-

6,130

Deferred tax liability

-

2,365

-

2,365

Total non-current liabilities

4,161

4,334

-

8,495

Current liabilities





Lease liability

1,195

299

-

1,494

Trade and other payables

26,519

2,006

440

28,965

Current tax liability

(202)

583

-

381

Total current liabilities

27,512

2,888

440

30,840

Total liabilities

Net assets

 

4.     INCOME TAX EXPENSE

 

The income tax expense for the 6 months ended 30 June 2024 is based upon management's best estimate of the weighted average annual tax rate expected for the full year ending 31 December 2024. The income tax expense is lower than the standard rate of 25.0% due to tax relief that the Group is claiming in relation to research and development costs it incurs. The income tax expense for the year ended 31 December 2023 was also lower than the standard rate of 23.5% due to lower standard income tax rates in overseas territories as well as tax relief for research and development costs.

 

5.     EARNINGS PER SHARE

 

Basic earnings per share are calculated by dividing the earnings attributable to equity shareholders by the weighted average number of Ordinary Shares in issue during the period.

 

For diluted earnings per share, the weighted average number of Ordinary Shares in issue is adjusted to assume conversion of all potentially dilutive Ordinary Shares. The Company has potentially dilutive Ordinary Shares arising from share options granted to employees. Options are dilutive under the Group Sharesave Plan where the exercise price together with the future IFRS 2 charge of the option is less than the average market price of the Company's Ordinary Shares during the period. Options under The Pebble Group plc Long Term Incentive Plan, as defined by IFRS 2, are contingently issuable shares and are therefore only included within the calculation of diluted earnings per share if the performance conditions are satisfied at the end of the reporting period, irrespective of whether this is the end of the vesting period or not.

 

The impact of the potentially dilutive share options issued under the LTIP on 29 March 2022, 28 March 2023 and 26 March 2024 and the SAYE on 6 October 2021 and 25 April 2023 is: nil for the 6 months ended 30 June 2024 (6 months ended 30 June 2023: nil, year ended 31 December 2023: 0.01p) in respect of statutory earnings per share; and 0.01p for the 6 months ended 30 June 2024 (6 months ended 30 June 2023: 0.01p, year ended 31 December 2023: 0.01p) in respect of adjusted earnings per share.

 

The calculation of basic earnings per share is based on the following data:

 

Statutory earnings per share

 

Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023

Earnings (£'000)

 



Earnings for the purposes of basic and diluted earnings per share being profit for the period attributable to equity shareholders

2,268

2,302

5,795

Number of shares

 



Weighted average number of shares for the purposes of basic earnings per share

166,890,909

167,450,893

167,412,949

Weighted average dilutive effects of conditional share awards

424,313

600,871

445,904

Weighted average number of shares for the purposes of diluted earnings per share

167,315,222

168,051,764

167,858,853

Earnings per Ordinary Share

 



Basic earnings per Ordinary Share (pence)

1.36

1.37

3.46

Diluted earnings per Ordinary Share (pence)

1.36

1.37

3.45

 

Adjusted earnings per share

 

The calculation of adjusted earnings per share is based on the after-tax adjusted profit after adding back certain costs as detailed in the table in note 6. Adjusted earnings per share figures are given to exclude the effects of amortisation of acquired intangible assets and share-based payment charge/credit, all net of taxation, and are considered to show the underlying performance of the Group.

 

 

Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023

Earnings (£'000)

 



Earnings for the purposes of basic and diluted adjusted earnings per share being adjusted earnings

3,116

3,479

7,708

Number of shares

 



Weighted average number of shares for the purposes of basic adjusted earnings per share

166,890,909

167,450,893

167,412,949

Weighted average dilutive effects of conditional share awards

424,313

600,871

445,904

Weighted average number of shares for the purposes of diluted adjusted earnings per share

167,315,222

168,051,764

167,858,853

Adjusted earnings per Ordinary Share

 



Basic adjusted earnings per Ordinary Share (pence)

1.87

2.08

4.60

Diluted adjusted earnings per Ordinary Share (pence)

1.86

2.07

4.59

 

6.     ALTERNATIVE PERFORMANCE MEASURES

 

Throughout the consolidated interim financial statements, we refer to a number of alternative performance measures (APMs). A reconciliation of the APMs used are shown below.

 

Adjusted EBTIDA

 

Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023


£'000

£'000

£'000

Operating profit

3,189

3,319

7,998

Add back/(deduct):

 



Depreciation

1,127

1,115

2,248

Amortisation

3,853

2,224

5,184

Share-based payment (credit)/charge

(815)

822

548

Adjusted EBITDA

7,354

7,480

15,978

 

Adjusted operating profit

 

Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023


£'000

£'000

£'000

Operating profit

3,189

3,319

7,998

Add back/(deduct):

 



Amortisation charge on acquired intangible assets

1,847

709

1,901

Share-based payment (credit)/charge

(815)

822

548

Adjusted operating profit

4,221

4,850

10,447

 

Adjusted operating profit less finance expense

 

Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023


£'000

£'000

£'000

Adjusted operating profit

4,221

4,850

10,447

Deduct:

 



Finance expense

(281)

(266)

(589)

Adjusted operating profit less finance expense

3,940

4,584

9,858

 

Adjusted earnings

 

Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023


£'000

£'000

£'000

Profit for the period attributable to equity shareholders

2,268

2,302

5,795

Add back/(deduct):

 



Amortisation charge on acquired intangible assets

1,847

709

1,901

Share-based payment (credit)/charge

(815)

822

548

Tax effect of the above

(184)

(354)

(536)

Adjusted earnings

3,116

3,479

7,708

 

7.     DIVIDENDS PAID AND PROPOSED

 

 

Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023


£'000

£'000

£'000

Declared and paid during the period

 



Final dividend for 2023 of 1.2p per share (2022: 0.6p per share)

2,005

1,005

1,005

Proposed for approval at AGM (not recognised in the period)

 



Final dividend for 2023 of 1.2p per share

 


2,005

 

As per the Trust Deed, the EBT waived its entitlement to the dividend on the shares held of 367,942 shares.

 

8.     INTANGIBLE ASSETS

 


Goodwill

Customer relationships

Software and development costs

Work in progress

Total


£'000

£'000

£'000

£'000

£'000

Cost






At 1 January 2023

36,139

11,322

24,877

4,085

76,423

Additions

-

-

401

3,286

3,687

Reclassifications

-

-

3,644

(3,644)

-

Exchange differences

(168)

(530)

(655)

(188)

(1,541)

At 30 June 2023

35,971

10,792

28,267

3,539

78,569

Additions

-

-

260

3,701

3,961

Disposals

-

-

(186)

-

(186)

Reclassifications

-

-

556

(556)

-

Exchange differences

(7)

(24)

(17)

(7)

(55)

At 31 December 2023

35,964

10,768

28,880

6,677

82,289

Additions

-

-

145

3,346

3,491

Disposals

-

-

(14)

-

(14)

Reclassifications

-

-

3,315

(3,315)

-

Exchange differences

25

78

(43)

40

100

At 30 June 2024

35,989

10,846

32,283

6,748

85,866

Accumulated amortisation

 





At 1 January 2023

-

2,372

14,049

-

16,421

Charge for the period                   

-

277

1,947

-

2,224

Exchange differences

-

(113)

(316)

-

(429)

At 30 June 2023

-

2,536

15,680

-

18,216

Charge for the period                   

-

273

2,687

-

2,960

Disposals

-

-

(155)

-

(155)

Exchange differences

-

(10)

(29)

-

(39)

At 31 December 2023

-

2,799

18,183

-

20,982

Charge for the period                   

-

271

3,582

-

3,853

Disposals

-

-

(14)

-

(14)

Exchange differences

-

20

(45)

-

(25)

At 30 June 2024

-

3,090

21,706

-

24,796

Net book value






At 31 December 2022

36,139

8,950

10,828

4,085

60,002

At 30 June 2023

35,971

8,256

12,587

3,539

60,353

At 31 December 2023

35,964

7,969

10,697

6,677

61,307

At 30 June 2024

35,989

7,756

10,577

6,748

61,070

 

Within software and development costs, the amortisation charge for the 6 months ended 30 June 2024 includes £1,576,000 (6 months ended 30 June 2023: £432,000, year ended 31 December 2023: £1,351,000) in respect of acquired intangible assets. This includes a charge of £1,260,000 (6 months ended 30 June 2023: £nil, year ended 31 December 2023: £494,000) which has been accelerated to align the useful lives of certain acquired intangible assets with those that are internally generated.

 

The Group tests annually for impairment, at the year end, or more frequently if there are indicators that goodwill might be impaired. There were no such indicators as at 30 June 2024.

 

9.     PROPERTY, PLANT AND EQUIPMENT

 


Fixtures and fittings

Computer hardware

Right-of-use assets

Total


£'000

£'000

£'000

£'000

Cost




 

At 1 January 2023

3,555

2,671

13,798

20,024

Additions

194

145

472

811

Disposals

-

(7)

(345)

(352)

Exchange differences

(115)

(77)

(624)

(816)

At 30 June 2023

3,634

2,732

13,301

19,667

Additions

51

481

44

576

Disposals

-

(343)

(132)

(475)

Exchange differences

(3)

3

230

230

At 31 December 2023

3,682

2,873

13,443

19,998

Additions

79

115

404

598

Disposals

-

-

(497)

(497)

Exchange differences

6

(10)

(18)

(22)

At 30 June 2024

3,767

2,978

13,332

20,077

Accumulated depreciation




 

At 1 January 2023

2,640

1,572

6,320

10,532

Charge for the period

245

205

665

1,115

Disposals

-

(4)

(345)

(349)

Exchange differences

(92)

(48)

(220)

(360)

At 30 June 2023

2,793

1,725

6,420

10,938

Charge for the period

33

260

840

1,133

Disposals

-

(341)

(126)

(467)

Exchange differences

11

-

77

88

At 31 December 2023

2,837

1,644

7,211

11,692

Charge for the period

131

233

763

1,127

Disposals

-

-

(497)

(497)

Exchange differences

5

(5)

(10)

(10)

At 30 June 2024

2,973

1,872

7,467

12,312

Net book value

 

 

 

 

At 31 December 2022

915

1,099

7,478

9,492

At 30 June 2023

841

1,007

6,881

8,729

At 31 December 2023

845

1,229

6,232

8,306

At 30 June 2024

794

1,106

5,865

7,765

 

 

 

 

 










Right-of-use assets - net book value

 

Unaudited

As at

30 June

2024

Unaudited

As at

30 June

2023

Audited

As at

31 December

2023

 

£'000

£'000

£'000

Leasehold property

5,506

6,655

5,943

Fixtures and fittings

177

43

100

Computer hardware

182

183

189

Total right-of-use assets - net book value

5,865

6,881

6,232

 

10.  LEASES

 

Amounts recognised in the consolidated statement of financial position

In addition to the right-of-use assets included within note 9, the consolidated statement of financial position shows the following amounts relating to leases:

 

Lease liability

 

Unaudited

As at

30 June

2024

Unaudited

As at

30 June

2023

Audited

As at

31 December

2023


£'000

£'000

£'000

Maturity analysis - contractual undiscounted cash flows:

 



Less than one year

1,862

1,912

1,807

More than one year, less than two years

1,818

1,688

1,729

More than two years, less than three years

1,597

1,684

1,722

More than three years, less than four years

1,080

1,465

1,165

More than four years, less than five years

921

1,019

1,004

More than five years

724

1,611

1,106

Total undiscounted lease liability at period end

8,002

9,379

8,533

Finance expense

(793)

(1,088)

(909)

Total discounted lease liability at period end

7,209

8,291

7,624

Current

1,559

1,496

1,494

Non-current

5,650

6,795

6,130


7,209

8,291

7,624

 

Amounts recognised in the consolidated income statement

 

The consolidated income statement shows the following amounts relating to leases:

 

 

 

Unaudited

6 months ended

30 June

2024

Unaudited

6 months ended

30 June

2023

Audited

Year ended

31 December

2023

 

£'000

£'000

£'000

Depreciation charge - leasehold property

700

602

1,365

Depreciation charge - fixtures and fittings

36

42

86

Depreciation charge - computer hardware

27

21

54


763

665

1,505

Interest expense (within finance expense)

188

199

399

 

11. SHARE CAPITAL

 

The authorised, issued and fully paid number of shares are set out below.

 

 

Ordinary

Shares 2024

Share 

capital

Share

 premium

 

Number

£

£

Ordinary Shares of 1p each:

 



At 1 January 2023, 30 June 2023 and 31 December 2023

167,450,893

1,674,509

78,451,312

Purchase of own shares

(985,256)

(9,853)

-

At 30 June 2024

166,465,637

1,664,656

78,451,312

 

 

 

In May 2024, the Group commenced a share buyback programme to repurchase up to £5 million of its own shares. During the 6 months ended 30 June 2024, 985,256 Ordinary Shares with a total nominal value of £9,853 were bought back by the Company for a total consideration, including transaction costs, of £588,711, charged to retained earnings. The Company subsequently cancelled these shares which resulted in a reduction in share capital of £9,853, with a corresponding increase in the capital reserve.

 

In the 6 months ended 30 June 2024, the EBT purchased a total of 194,085 Ordinary Shares at an average price of £0.56 per share, which were used to satisfy the exercise of 148,340 LTIP options. The EBT did not sell any shares and the remaining 458,382 shares are held by the Trust.

 

12. FINANCIAL INSTRUMENTS

 

The fair values of all financial instruments included in the consolidated statement of financial position are a reasonable approximation of their carrying values.

 

13. SHARE-BASED PAYMENTS

 

In the 6 months ended 30 June 2024, the Group operated equity-settled share-based payment plans as described below.

 

The Group recognised total a total credit of £826,000 in respect of equity-settled share-based payment transactions for the 6 months ended 30 June 2024 (6 months ended 30 June 2023: expense of £822,000, year ended 31 December 2023: expense of £548,000).

 

The Pebble Group plc Long Term Incentive Plan (LTIP)

Certain employees of the Company, along with other Group employees, have been granted share options on 29 March 2022 28 March 2023 and 26 March 2024 under the LTIP.

 

Details of the maximum total number of Ordinary Shares which may be issued in future periods in respect of LTIP awards outstanding at 30 June 2024 are shown below.

 

 

Number of shares

At 1 January 2023

3,357,530

Granted in the period

1,655,496

Lapsed in the period

(60,789)

At 30 June 2023

4,952,237

Exercised in the period

(303,558)

Lapsed in the period

(1,433,726)

At 31 December 2023

3,214,953

Granted in the period

3,009,191

Exercised in the period

(148,340)

Lapsed in the period

(229,186)

Outstanding at 30 June 2024

5,846,618

Exercisable at 30 June 2024

424,313

 

The fair value at grant date is independently determined using an adjusted form of the Black-Scholes model which includes a Monte Carlo simulation model that takes into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share based on the AIM Price Index over the past 3 years, the expected dividend yield and the risk-free interest rate for the term of the option. This information in respect of the 2024 award in the period is shown below.

 


2024 award

TSR condition

2024 award

AEPS condition

Share price at start of performance period

60.2p

60.2p

Share price at grant date

67.0p

67.0p

Exercise price

£nil

£nil

Expected volatility

12.14%

-

Expected life

3 years

3 years

Expected dividend yield

1.78%

-

Risk-free interest rate

4.11%

-

Fair value per option

16.5p

67.0p

The vesting of these awards is subject to the Group achieving certain performance targets under the LTIP. The options are split into two parts with the amount of Part 1 options that will vest depending on achievement of the Group's Basic Adjusted EPS (AEPS), which comprises 70% of the award, whilst Part 2 depends on absolute total shareholder return (TSR) that will vest depending on performance of the Company's Absolute TSR, which comprises 30% of the award.

The Pebble Group plc Group Sharesave Plan

Certain eligible employees of the Company, along with other Group employees, have been granted share options on 6 October 2021 and 25 April 2023 under the SAYE.

Details of the maximum total number of Ordinary Shares which may be issued in future periods in respect of SAYE awards outstanding at 30 June 2024 are shown below.

 

Number of shares

At 1 January 2023

742,065

Lapsed in the period

(245,839)

At 30 June 2023

496,226

Granted in the period

417,932

Lapsed in the period

(235,811)

At 31 December 2023

678,347

Lapsed in the period

(127,679)

Outstanding at 30 June 2024

550,668

 

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