Final Results
25 April 2013
Norman Broadbent plc
("Norman Broadbent" or "the Company")
Final Results
Norman Broadbent plc, a leading provider of executive search and leadership
consultancy services, announces its audited financial results for the year
ended 31 December 2012.
Financial highlights
* Revenue increased to £7.6 million from £6.9 million for the year ended 31
December 2011, an increase of 10.6 per cent.
* Results summary:
*
Revenue
2012 2011
£000 £000
Executive Search / Interim 6,673 5,976
Assessment & Leadership Consulting 586 591
Overseas royalties 339 333
Social Media Search & Consulting 36 -
7,634 6,900
Group operating profit before restructuring costs 293 301
Restructuring costs (331) (802)
Operating loss (38) (501)
Finance cost (35) (34)
Loss before tax (73) (535)
Tax charge (42) (26)
Loss after tax (115) (561)
EPS - basic (1.16)p (5.96)p
EPS - adjusted (0.52)p (5.16)p
* Group operating profit before restructuring costs maintained at £293,000
(2011: £301,000).
* Oversubscribed placing of £742,560 in November 2012 to facilitate an
acquisition and establishment of new subsidiaries.
* Year-end cash of £1.0 million (2011: £0.65 million).
* No bank debt other than invoice discounting facility following repayment of
the outstanding term loan and deferred consideration.
* Net assets increased to £3.2 million (2011: £2.3 million).
Pierce Casey, Executive Chairman of Norman Broadbent, said:
"We remain committed to achieving increased market share in the UK search
market whilst pursuing geographical and product diversification on a cost
efficient basis. This allows us to enhance our relationship with our UK
clients, attract new clients and to develop scale through overseas revenues.
The brand of Norman Broadbent is strong, not just in the UK but around the
globe and should continue to strengthen throughout 2013."
For further information please contact:
Norman Broadbent plc 020 7484 0000
Pierce Casey/Sue O'Brien/Ben Felton
Sanlam Securities UK Limited 020 7628 2200
Simon Clements/Virginia Bull/Catherine Miles
Notes to Editors
Norman Broadbent plc is a leading provider of executive search and leadership
consultancy services. It offers board and executive search services, interim
management services and leadership consultancy services, such as executive
assessment and development, talent management, and executive coaching services.
Headquartered in London, the group operates globally and has offices in
Barcelona, Bogota, Brussels, Dublin, Limassol, Milan, Madrid, Paris, Singapore,
Los Angeles and across the Middle East and North Africa.
For further information visit www.normanbroadbent.com
CHAIRMAN'S STATEMENT
INTRODUCTION
Norman Broadbent plc (the "Company" or the "Group") is a human capital
consultancy which operates as a global executive search and leadership
consultancy business, headquartered in London. It has a network of subsidiary
and licenced international offices providing international reach across Europe,
Asia, North America, Latin America, Middle East and North Africa.
Following an oversubscribed share placing in November 2012 raising £742,560,
the Group has extended its product offering via the establishment of two
complementary, but separately branded businesses - Arcus Global Partners and
Connecting Corporates - which provide flexible solutions to clients in the
market `below' our traditional board search practice and harness the power of
social media. The Company also acquired a controlling stake in an established,
profitable Belgian leadership consulting and search business to extend the
geographic reach of the Norman Broadbent business. The Group continues to
appraise further opportunities to diversify both geographically and in terms of
product offerings.
RESULTS FOR THE FINANCIAL YEAR
The table below summarises the results of the Group:
Revenue 2012 2011
£000 £000
Executive Search / Interim 6,673 5,976
Assessment & Leadership Consulting 586 591
Overseas royalties 339 333
Social Media Search & Consulting 36 -
7,634 6,900
Group operating profit before 293 301
restructuring costs
Restructuring costs (331) (802)
Operating loss (38) (501)
Finance cost (35) (34)
Loss before tax (73) (535)
Tax charge (42) (26)
Loss after tax (115) (561)
EPS - basic (1.16)p (5.96)p
EPS - adjusted (0.52)p (5.16)p
Group revenue for the year increased to £7.6 million from £6.9 million in 2011,
an increase of 10.6 per cent, while operating profit before non-recurring
restructuring costs was maintained at £293,000 compared with £301,000 in the
previous year. The loss after tax, pre-minority interests, narrowed
substantially to £115,000 from a loss of £561,000 in 2011.
Core board and executive search revenues increased by 11.7 per cent to £6.7
million from £6.0 million in 2011. The search business contributed an operating
profit before restructuring costs of £476,000 (2011: £464,000) which includes
the impact of start-up losses in the newly formed international subsidiaries in
the USA and Singapore.
The UK leadership consulting and assessment business did well to withstand the
sad death in October 2012 of the founder of HADIL, who had remained a
significant revenue producer. We appointed his successor Carole Bodell, an
experienced leader in human capital businesses, to lead the business in
November. Traction is now increasing albeit following an expected time lag. In
order to leverage off the core brand, we have now integrated the business into
Norman Broadbent Leadership Consulting. With HADIL's core of exceptional
occupational psychologists the practice is well placed to drive greater brand
recognition of our leadership assessment services.
Overseas royalties totalled £339,000 (2011: £333,000) which was highly
creditable given the weak economies pertaining in Spain and Italy, and the
on-going geo-political tensions in the Middle East.
CORPORATE DEVELOPMENTS
2012 was another year of significant development for the Company with further
expansion overseas combined with strategic diversification of our core products
offerings. In November 2012, the Company acquired a 51 per cent stake in Acker
Deboeck & Company, a well-established and profitable leadership consulting and
search business based in Brussels. This firm, now rebranded Norman Broadbent,
has integrated well into the Group. It has particularly enhanced the existing
UK and international leadership consulting teams and the Directors believe that
leadership assessment and consulting will be an area of revenue growth over the
next few years given current market trends.
The two new international search businesses incorporated during the year in
Singapore and USA, are now gaining traction in their respective territories
with the increased brand awareness starting to lead to new business flow. Since
the year ended 31 December 2012, we have also established (through our Belgian
subsidiary) a dedicated Paris based executive search company led by an
experienced local search professional.
As part of a strategy to leverage the Group's strengths and diversify from a
reliance on traditional retained executive search, the Company completed a
successful, oversubscribed share placing in November 2012, raising £742,560,
with some of the funds going towards establishing two complementary businesses:
Arcus Global Partners, led by Simon Vaughan-Edwards who joined the Group in
March 2013, has been formed to provide existing and new clients with
innovative, tactical or strategic solutions for their human capital needs. This
ranges from contingent search for roles below full and operating board level,
through to short term contracting, in-house RPO solutions, talent mapping and
candidate pipeline provision.
Connecting Corporates, trading through the established brands of "WinningWork"
and "Social Media Search", provides rapid, bespoke, candidate lists for
client's in-house recruitment teams, using innovative search techniques through
multiple social media and online channels. WinningWork is a sales management
tool used to exploit social media to drive sales in professional service firms
and those operating in a B2B environment.
I am pleased to report that, although both businesses are at a very early stage
of development, they have started well; attracting high calibre talent, working
closely with the Norman Broadbent Executive Search team and are currently
operating in line with management's expectations.
FINANCIAL POSITION
The consolidated Group statement of financial position was strengthened through
the November 2012 placing of 2,121,600 new ordinary shares, raising £727,560
net of £15,000 expenses. As at 31 December 2012 consolidated net assets were £
3.2 million, compared to £2.3 million as at 31 December 2011. Group net current
assets increased to £1.09 million (2011: £0.47 million) while Group cash
increased to £1.0 million (£0.65 million).
During the year under review, the Group repaid its residual term loan of £
109,000 in full and in addition reduced the outstanding deferred consideration
from the Norman Broadbent acquisition in 2008 from £481,000 to £73,000 at 31
December 2012. This £73,000 balance was repaid shortly after the year end. The
Group now has no bank debt other than its on-going invoice discounting
facility, which had a balance outstanding of £965,000 at the year-end (2011: £
625,000). This was higher in 2012 due to the increase in sales and the improved
aging profile of the trade receivables at the year-end compared with 2011.
From March 2013, all Spanish royalties are retained by the Company, as compared
to the previous arrangement whereby the payments flowed through on a quarterly
basis to satisfy the outstanding deferred consideration.
OPERATIONAL EFFICIENCIES
As a group we continually review our processes and our cost base to ensure it
is effective, cost efficient and fit for the changing market conditions in
which we operate. During the year we agreed new, more efficient IT contracts
and moved our core database onto an innovative cloud based product. Since the
year end we have signed a new lease on our head office in St James's Square on
more favourable terms and we expect to have sufficient space to accommodate the
new UK subsidiary businesses until at least the end of 2013.
These savings will have a meaningful positive impact on the monthly fixed
overhead of the Group from the second quarter of 2013.
BUSINESS DEVELOPMENT
Our UK search practice has a quality, though relatively concentrated client
base from which it continues to enjoy considerable repeat levels of business.
Over recent years it is evident that the retained executive search market has
become more competitive as clients successfully source more senior talent
online or through contingent suppliers. Our Group now has the ability to
provide these solutions to UK clients through Arcus Global Partners and
Connecting Corporates, thereby allowing us to expand our client base both in
retained search and these new complimentary services. Over time we anticipate
extending the Arcus Global Partners and Connecting Corporates offerings
internationally.
CURRENT TRADING AND OUTLOOK
The continued diversification in 2012 and early 2013 has resulted in a more
robust Group with a compelling suite of service offerings in an environment
where traditional retained search has seen revenues decline across the
industry, but particularly in the UK and Europe. Our UK search revenues for the
first quarter of 2013 were lower than the first quarter in 2012, in part due to
the industry challenges and partly caused by a reduced number of search
consultants compared with last year. However, we have a lower comparable fixed
cost base, no further expected restructuring costs and the operational
efficiencies flagged above should compensate for this reduction in revenues.
The current UK search pipeline is reasonable and we are pleased with initial
progress in the new USA, Singapore and Paris offices following recent
successful launch events in these territories.
The Board believes that our more potent, diversified offerings will, in the
absence of unforeseen circumstances, lead to a larger more profitable Group
over the next few years.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2012
Note 2012 2011
£000 £000
REVENUE 2 7,634 6,900
Cost of sales (208) (109)
GROSS PROFIT 2 7,426 6,791
Operating expenses (7,133) (6,515)
Other income - 25
GROUP OPERATING PROFIT BEFORE RE-STRUCTURING 293 301
COSTS
Re-structuring costs 4 (331) (802)
GROUP OPERATING LOSS (38) (501)
Net finance cost 7 (35) (34)
LOSS ON ORDINARY ACTIVITIES BEFORE 3 (73) (535)
INCOME TAX
Income tax expense 6 (42) (26)
LOSS FOR THE YEAR (115) (561)
OTHER COMPREHENSIVE INCOME
Foreign currency translation 2 -
differences - foreign operations
TOTAL COMPREHENSIVE INCOME FOR THE (113) (561)
YEAR
Loss attributable to:
* Owners of the Company (127) (561)
* Non-controlling interests 12 -
Loss for the year (115) (561)
Total comprehensive income
attributable to:
* Owners of the Company (127) (561)
* Non-controlling interests 14 -
Total comprehensive income for the (113) (561)
year
Loss per share 8
- Basic (1.16)p (5.96)p
- Diluted (1.16)p (5.96)p
Adjusted loss per share 8
- Basic (0.52)p (5.16)p
- Diluted (0.52)p (5.16)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2012
Notes 2012 2011
£000 £000
Non-Current Assets
Intangible assets 10 1,922 1,810
Property, plant and equipment 11 139 131
Deferred tax assets 6 69 69
TOTAL NON-CURRENT ASSETS 2,130 2,010
Current Assets
Trade and other receivables 14 2,267 1,829
Cash and cash equivalents 15 1,009 650
TOTAL CURRENT ASSETS 3,276 2,479
TOTAL ASSETS 5,406 4,489
Current Liabilities
Trade and other payables 16 1,075 980
Deferred consideration 17 73 300
Bank overdraft and interest bearing 17 965 734
loans
Corporation tax liability 72 -
TOTAL CURRENT LIABILITIES 2,185 2,014
NET CURRENT ASSETS 1,091 465
Non-Current Liabilities
Deferred consideration 17 - 181
TOTAL LIABILITIES 2,185 2,195
TOTAL ASSETS LESS TOTAL LIABILITIES 3,221 2,294
EQUITY
Issued share capital 19 5,857 5,833
Share premium account 19 9,572 8,758
Retained earnings (12,353) (12,297)
EQUITY ATTRIBUTABLE TO OWNERS OF THE 3,076 2,294
COMPANY
Non-controlling interests 145 -
TOTAL EQUITY 3,221 2,294
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2012
Attributable to owners of the
Company
Share Share Retained Total Non-controlling Total
Capital Premium Earnings interests Equity
Equity
£000 £000 £000 £000 £000
£000
Balance at 1st January 2011 5,804 6,985 (11,811) 978 - 978
Loss for the year - - (561) (561) - (561)
Total comprehensive income - - (561) (561) - (561)
for the year
Transactions with owners of
the Company, recognised
directly in equity:
Issue of ordinary shares 29 1,773 - 1,802 - 1,802
Credit to equity for share - - 75 75 - 75
based payments
Total transactions with 29 1,773 75 1,877 - 1,877
owners of the Company,
recognised directly in
equity
Balance at 31st December 5,833 8,758 (12,297) 2,294 - 2,294
2011
Balance at 1st January 2012 5,833 8,758 (12,297) 2,294 - 2,294
Loss for the year - - (127) (127) 12 (115)
Total other comprehensive - - - - 2 2
income
Total comprehensive income - - (127) (127) 14 (113)
for the year
Transactions with owners of
the Company, recognised
directly in equity:
Issue of ordinary shares 24 814 - 838 - 838
Credit to equity for share - - 71 71 - 71
based payments
Acquisition of subsidiary - - - - 131 131
with non-controlling
interests
Total transactions with 24 814 71 909 131 1,040
owners of the Company,
recognised directly in
equity
Balance at 31st December 5,857 9,572 (12,353) 3,076 145 3,221
2012
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2012
Notes 2012 2011
£000 £000
Net cash used in operating activities (250) (561)
Cash flows from investing activities and servicing of
finance
Net finance cost (35) (35)
Dividends received - 25
Payments to acquire tangible fixed assets 11 (92) (33)
Repayment of deferred consideration (408) (528)
Net cash inflow on acquisition of 23 181 -
subsidiary
Net cash used in investing activities (354) (571)
Cash flows from financing activities
Net cash inflows from equity placing 19 727 1,750
Repayment of secured loans (109) (116)
Repayment of directors' loans - (7)
Increase in invoice discounting 341 14
Net cash from financing activities 959 1,641
Net increase in cash and cash equivalents 356 510
Net cash and cash equivalents at beginning of period 650 140
Effects of exchange rate changes on cash balances held 4 -
in foreign currencies
Net cash and cash equivalents at end of period 1,009 650
Analysis of net funds
Cash and cash equivalents 1,009 650
Borrowings due within one year (965) (734)
Borrowings due after one year - -
Deferred consideration (73) (481)
Net funds (29) (565)
Note (i)
Reconciliation of operating loss to net cash from 2012 2011
operating activities
£000 £000
Operating loss (38) (501)
Depreciation/impairment of property, plant and equipment 84 79
Share based payment charge 71 75
Dividends received - (25)
(Increase)/decrease in trade and other (438) 144
receivables
Increase/(decrease) in trade and other payables 165 (306)
Taxation paid (94) (27)
Net cash used in operating activities (250) (561)
1. ACCOUNTING POLICIES
Basis of preparation
The consolidated financial statements of Norman Broadbent plc ("Norman
Broadbent" or "the Company") have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union
(IFRS as adopted by the EU), IFRIC interpretations and the Companies Act 2006
applicable to Companies reporting under IFRS. The consolidated financial
statements have been prepared under the historical cost convention, as modified
by the revaluation of financial assets and liabilities (including derivative
instruments) at fair value through profit or loss.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in notes to the financial statements.
The financial information set out above does not comprise the Company's
statutory accounts for the periods ended 31 December 2012 or 31 December 2011.
Statutory accounts for 31 December 2011 have been delivered to the Registrar of
Companies and those for 31 December 2012 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those accounts;
their report was unqualified, did not include references to any matters to
which the auditors drew attention by way of emphasis of matter without
qualifying their report and did not contain statements under section 498(2) or
(3) of the Companies Act 2006 in respect of the accounts for 2012 or for 2011.
Going concern
The Group reported an operating loss in the year to 31 December 2012 of £38,000
compared with an operating loss of £501,000 in 2011. However these losses were
primarily driven by residual one-off planned restructuring costs in the UK
search business totalling £331,000 (2011: 802,000), which will not be repeated
in 2013.
The Consolidated Statement of Financial Position shows a strong net asset
position at 31 December 2012 of £3.22 million (2011: £2.29 million) with cash
at bank of £1.01 million (2011: £0.65 million). At the date that these
financial statements were approved the only bank debt owed by the Company was
its invoice discounting facility which is secured by the Group's trade
receivables.
In light of the current financial position of the Group and on consideration of
the business' forecasts and projections, taking account of possible changes in
trading performance, the directors have a reasonable expectation that the Group
has adequate available resources to continue as a going concern for the
foreseeable future. For these reasons, they continue to adopt the going concern
basis in preparing their annual report and financial statements.
2. SEGMENTAL ANALYSIS
Management has determined the operating segments based on the reports reviewed
regularly by the board for use in deciding how to allocate resources and in
assessing performance. The Board considers Group operations from both a class
of business and geographic perspective.
Each class of business derives its revenues from the supply of a particular
recruitment related service, from retained executive search through to
executive assessment and coaching. Business segment results are reviewed
primarily to operating profit level, which includes employee costs, marketing,
office and accommodation costs and appropriate recharges for management time.
Group revenues are primarily driven from UK operations however, when revenue is
derived from overseas business the results are presented to the Board by
geographic region to identify potential areas for growth or those posing
potential risks to the Group.
i) Class of Business:
The analysis by class of business of the Group's turnover, profit before
taxation and net assets/ (liabilities) is set out below:
BUSINESS SEGMENTS
2012 Executive Overseas Interim Assessment, Social Un- Total
Search Royalties coaching & Media allocated
£000 talent Search & £000
£000 £000 mgmt. Consulting £000
£000 £000
Revenue 6,607 339 66 586 36 - 7,634
Cost of sales (118) - - (89) (1) - (208)
Gross profit 6,489 339 66 497 35 - 7,426
Operating (5,931) (119) - (612) (32) (357) (7,051)
expenses
Other operating - - - - - - -
income
Re-structuring (331) - - - - - (331)
costs
Finance costs (31) - - - - (4) (35)
Depreciation and (82) - - - - - (82)
amort.
Profit/(loss) 114 220 66 (115) 3 (361) (73)
before tax
Net assets 3,129 - - 89 3 - 3,221
BUSINESS SEGMENTS
2011 Executive Overseas Interim Assessment, Social Un-allocated Total
Search Royalties coaching & Media
£000 talent Search & £000 £000
£000 £000 mgmt. Consulting
£000 £000
Revenue 5,929 333 47 591 - - 6,900
Cost of sales (50) - - (59) - - (109)
Gross profit 5,879 333 47 532 - - 6,791
Operating expenses (5,336) (119) - (580) - (401) (6,436)
Other operating 25 - - - - - 25
income
Re-structuring (512) - - - - (290) (802)
costs
Finance costs (34) - - - - - (34)
Depreciation and (79) - - - - - (79)
amort.
Profit/(loss) (57) 214 47 (48) (691) (535)
before tax
Net assets 2,312 - - (18) - 2,294
The unallocated costs refer to central costs of the Group including salaries,
professional and other costs, which are not directly attributable to the
delivery of the services. The four segments shown represent the management
information provided to the Board and in the opinion of the directors reflect
the nature of the Group's services.
ii) Geographic Region:
The analysis by geographic region of the Group's turnover, profit before
taxation and net assets/ (liabilities) is set out below:
BUSINESS SEGMENTS
2012 Executive Overseas Interim Assessment, Social Un-allocated Total
Search Royalties coaching & Media
£000 talent Search & £000 £000
£000 £000 mgmt. Consulting
£000 £000
Revenue
United Kingdom 6,413 - 66 471 36 - 6,986
Europe 148 275 - 114 - - 537
Other 46 64 - 1 - - 111
Total 6,607 339 66 586 36 - 7,634
Gross profit
United Kingdom 6,302 - 66 428 35 - 6,831
Europe 148 275 - 69 - - 492
Other 39 64 - - - - 103
Total 6,489 339 66 497 35 - 7,426
Profit/(loss)
before tax
United Kingdom 114 - 66 (63) 3 (361) (241)
Europe - 157 - (51) - - 106
Other - 63 - (1) - - 62
Total 114 220 66 (115) 3 (361) (73)
Net assets
United Kingdom 3,129 - - 89 3 - 3,221
Total 3,129 - - 89 3 - 3,221
BUSINESS SEGMENTS
2011 Executive Overseas Interim Assessment, Social Un-allocated Total
Search Royalties coaching & Media
£000 talent Search & £000 £000
£000 £000 mgmt. Consulting
£000 £000
Revenue
United Kingdom 5,284 - 34 356 - - 5,674
Europe 333 263 10 235 - - 841
Other 312 70 3 - - - 385
Total 5,929 333 47 591 - - 6,900
Gross profit
United Kingdom 5,234 - 34 309 - - 5,577
Europe 333 263 10 223 - - 829
Other 312 70 3 - - - 385
Total 5,879 333 47 532 - - 6,791
Profit/(Loss)
before tax
United Kingdom (57) - 34 (40) - (691) (754)
Europe - 164 10 (8) - - 166
Other - 50 3 - - - 53
Total (57) 214 47 (48) - (691) (535)
Net assets
United Kingdom 2,312 - - (18) - - 2,294
Total 2,312 - - (18) - - 2,294
Turnover by location is not materially different from turnover by destination.
3. (LOSS) / PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
2012 2011
£000 £000
Loss on ordinary activities before taxation is stated after
charging:
Depreciation and impairment of property, plant and 84 79
equipment
Loss on foreign currency exchange 16 19
Operating lease rentals:
Land and buildings 327 305
Auditors' remuneration:
Audit work 34 33
Non-audit work - -
The Company audit fee in the year was £11,500 (2011: £10,000).
4. RE-STRUCTURING COSTS
Re-structuring costs include residual personnel costs relating to the hiring of
new consultants in 2011, exiting of under-performing staff and external
recruitment consultancy costs relating to the new hires.
These items have been highlighted in the consolidated statement of
comprehensive income because separate disclosure is considered appropriate in
understanding the underlying performance of the business.
2012 2011
£000 £000
Personnel 331 677
Consultancy - 125
Total re-structuring costs 331 802
5. STAFF COSTS
The average number of full time equivalent 2012 2011
persons (including directors)
No. No.
employed by the Group during the period was as
follows:
Sales and related services 25 23
Administration 30 30
55 53
Staff costs (for the above persons): £000 £000
Wages and salaries 4,605 4,254
Social security costs 476 439
Defined contribution pension cost 206 177
Share based payment expense (note 71 75
20)
5,358 4,945
The emoluments of the directors are disclosed as required by the Companies Act
2006 on page 9 of the Report and Accounts in the Directors' Remuneration
Report.
6. TAX EXPENSE
(a) Tax charged in the income statement
Taxation is based on the profit for 2012 2011
the year and comprises:
£000 £000
Current tax:
United Kingdom corporation tax at 42 26
24.5% (2011: 26.5%) based on profit
for the year
Adjustment in respect of prior years - -
Total current tax 42 26
Deferred tax:
Origination and reversal of temporary differences - -
Tax charge/(credit) 42 26
(b) Reconciliation of the total tax charge
The difference between the current tax shown above and the amount calculated by
applying the standard rate of UK corporation tax to the profit before tax is as
follows:
2012 2011
£000 £000
Loss on ordinary activities before (73) (535)
taxation
Tax on loss on ordinary activities at (18) (142)
standard UK corporation tax rate of
24.5% (2011: 26.5%)
Effects of:
Expenses not deductible 32 50
Foreign tax suffered 18 -
Non-taxable income (1) (7)
Capital allowances in excess of 14 12
depreciation
Utilisation of ACT (2) (4)
Adjustment to losses carried forward (1) 113
Other adjustments - 4
Current tax charge/(credit) for the 42 26
year
(c) Deferred tax
Tax losses Total
£000 £000
At 01 January 2011 (69) (69)
Credited to the income statement in - -
2011
At 31 December 2011 (69) (69)
Credited to the income statement in - -
2012
At 31 December 2012 (69) (69)
At 31 December 2012 the Group had capital losses carried forward of £8,130,000
(2011: £8,130,000). A deferred tax asset has not been recognised for the
capital losses as the recoverability in the near future is uncertain. The Group
also has £10,000,000 (2011: £10,000,000) trading losses carried forward, which
includes £8,987,000 losses transferred from BNB Recruitment Consultancy Ltd in
2011. A deferred tax asset of £1,613,000 has not been recognised in the
financial statements due to the inherent uncertainty as to the quantum and
timing of its utilisation.
The analysis of deferred tax in the consolidated balance sheet is as follows:
2012 2011
Deferred tax assets: £000 £000
Tax losses carried forward 69 69
Total 69 69
7. NET FINANCE COST
2012 2011
£000 £000
Interest payable on bank loans and overdrafts 35 34
Total 35 34
8. EARNINGS PER SHARE
i) Basic earnings per share
This is calculated by dividing the profit attributable to equity holders of the
Company by the weighted average number of ordinary shares in issue during the
period:
2012 2011
Loss attributable to shareholders £(127,000) £(561,000)
Weighted average number of ordinary 10,929,676 9,416,510
shares
ii) Diluted earnings per share
This is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. The
Company has two categories of dilutive potential ordinary shares: share options
and warrants. For these options and warrants, a calculation is done to
determine the number of shares that could have been acquired at fair value
(determined as the average annual market share price of the Company's shares)
based on the monetary value of the subscription rights attached to the
outstanding warrants and options. The number of shares calculated as above is
compared with the number of shares that would have been issued assuming the
exercise of the share options.
2012 2011
Loss attributable to shareholders £(127,000) £(561,000)
Weighted average number of ordinary 10,929,676 9,416,510
shares
- assumed conversion of share options - 49,272
- assumed conversion of warrants - 55,343
Total 10,929,676 9,521,125
iii) Adjusted earnings per share
An adjusted earnings per share has also been calculated in addition to the
basic and diluted earnings per share and is based on earnings adjusted to
eliminate the effects of charges for share based payments. It has been
calculated to allow shareholders to gain a clearer understanding of the trading
performance of the Group.
2012 2012 2012 2011 2011 2011
£000 Basic Diluted £000 Basic Diluted
pence pence pence pence
per per per per
share share share share
Basic earnings
Loss after tax (127) (1.16) (1.16) (561) (5.96) (5.96)
Adjustments
Share based payment charge 71 0.64 0.64 75 0.80 0.80
Adjusted earnings (56) (0.52) (0.52) (486) (5.16) (5.16)
9. PROFIT OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the income statement of
the parent company is not presented as part of these accounts. The parent
company's profit for the year amounted to £192,000 (2011: loss of £150,000).
10. INTANGIBLE ASSETS
Group Goodwill
arising on
consolidation
£000
Balance at 1 January 2011 3,690
Balance at 31 December 2011 3,690
Additions (Note 24) 112
Balance at 31 December 2012 3,802
Provision for impairment
Balance at 1 January 2011 1,880
Balance at 31 December 2011 1,880
Balance at 31 December 2012 1,880
Net book value
At 1 January 2011 1,810
At 31 December 2011 1,810
At 31 December 2012 1,922
Goodwill acquired through business combinations is allocated to cash-generating
units (CGU) identified at entity level. The carrying value of intangibles
allocated by CGU is shown below:
Norman Human Asset Total
Broadbent Development
International £000
£000
£000
At 1 January 2011 1,750 60 1,810
At 31 December 2011 1,750 60 1,810
At 31 December 2012 1,862 60 1,922
The goodwill attributed to the Norman Broadbent entity can be split into two
further CGU's, cash generated from the retained Executive Search and leadership
consultancy business of £1,212,000 (2011: £1,100,000) and cash generated from
International Royalties of £650,000 (2011: £650,000).
In line with International Financial Reporting Standards, goodwill has not been
amortised from the transition date, but has instead been subject to an
impairment review by the directors of the Group. As set out in accounting
policy note 1 on page 18, the directors test the goodwill for impairment
annually. The recoverable amount of the Group's CGUs are calculated on the
present value of their respective expected future cash flows, applying a
weighted average cost of capital in line with businesses in the same sector.
Pre-tax future cash flows for the next five years are derived from the approved
forecasts for the 2013 financial year.
The key assumption applied to the forecasts for the business is that return on
sales for Norman Broadbent is expected to be a minimum of 10 per cent per annum
for the foreseeable future (2011: 10 per cent) and 7% for Human Asset
Development International (2011: 10 per cent). Return on sales defined as the
expected profit before tax on net revenue. There are only minimal non cash
flows included in profit before tax. The rate used to discount the forecast
cash flows is 12 per cent (2011: 12 per cent).
The five year forecasts have been prepared using conservative revenue growth
rates to reflect the uncertainty that is still present in the economy. Based on
the above assumptions, at 31 December 2012 the recoverable value of the Norman
Broadbent CGU is £2,991,000 and the Human Asset Development International CGU
is £180,000. Return on sales would need to fall below 7 per cent for the Norman
Broadbent goodwill to be impaired and below 2 per cent for Human Asset
Development International goodwill to be impaired.
11. PROPERTY, PLANT AND EQUIPMENT
Group Land and Office Fixtures Motor Total
buildings and and Vehicles
- computer fittings £000
leasehold equipment £000
£000
£000 £000
Cost
Balance at 1 January 2011 83 145 128 - 356
Additions - 32 1 - 33
Disposals (21) (1) - - (22)
Balance at 31 December 2011 62 176 129 - 367
Additions - 53 - - 53
Arising on acquisition of - 7 19 13 39
subsidiaries (note 23)
Disposals - - - - -
Balance at 31 December 2012 62 236 148 13 459
Accumulated depreciation
Balance at 1 January 2011 33 51 95 - 179
Charge for the year 20 48 11 - 79
Disposals (21) (1) - - (22)
Balance at 31 December 2011 32 98 106 - 236
Charge for the year 22 49 11 2 84
Disposals - - - - -
Balance at 31 December 2012 54 147 117 2 320
Net book value
At 1 January 2011 50 94 33 - 177
At 31 December 2011 30 78 23 - 131
At 31 December 2012 8 89 31 11 139
The Group had no capital commitments as at 31 December 2012 (2011: £Nil).
The above assets are owned by Group companies; the Company has no fixed assets.
12. INVESTMENTS
Company Shares in
subsidiary
undertakings
£000
Cost
Balance at 1 January 2011 5,786
Balance at 31 December 2011 5,786
Additions (see note below) 255
Balance at 31 December 2012 6,041
Provision for impairment
Balance at 1 January 2011 3,926
Balance at 31 December 2011 3,926
Impairment in the year -
Balance at 31 December 2012 3,926
Net book value
At 1 January 2011 1,860
At 31 December 2011 1,860
At 31 December 2012 2,115
During the year, the company acquired a 51 per cent interest in Acker Deboeck
and Company for a total consideration of £248,000 (see note 23). The Company
also incorporated wholly owned subsidiaries in Singapore and USA, with combined
share capital of £7,000. Funding for the growth of these subsidiaries will be
provided through Group treasury in the form of inter-company loans.
At 31 December 2012 the Company held the following ownership interests:
Principal Group Country of Principal Description and
investments: incorporation activities proportion of
or registration shares held by
and operation the Company
Norman Broadbent Executive England and Executive 100% ordinary
Search Ltd Wales search shares
Norman Broadbent Overseas England and Executive 100% ordinary
Ltd Wales search shares
Human Asset Development England and Assessment, 100% ordinary
International Wales coaching and shares
talent mgmt.
Ltd
Arcus Global Partners Ltd England and Contingent 100% ordinary
(formerly NBBI Ltd) Wales Search shares
Norman Broadbent Inc United States Executive 100% ordinary
of America search shares
The NB Consultancy Singapore Executive 100% ordinary
(Singapore) Pte. Ltd search shares
Norman Broadbent SPRL Belgium Executive 51% ordinary
(formerly Acker Deboeck search, shares
and Company) assessment,
coaching and
talent mgmt.
Connecting Corporates Ltd England and Social Media 51% ordinary
Wales Search & shares
Consulting
Bancomm Ltd England and Dormant 100% ordinary
Wales shares
Norman Broadbent Ireland Republic of Dormant 100% ordinary
Ltd** Ireland shares
Substantial Shareholdings:
NBS Norman Broadbent SA* Spain Executive 20% ordinary
search, shares
assessment,
coaching and
talent mgmt.
* The 20% shareholding in this company is owned by Norman Broadbent Overseas
Ltd, a wholly owned subsidiary of the Company.
** The 100% shareholding in this company is owned by Norman Broadbent Overseas
Ltd.
13. INVESTMENTS IN ASSOCIATES
2012 2011
£000 £000
At 1 January - 5
Acquisition of shares in associate - 5
Consolidation of wholly owned - (10)
subsidiary
At 31 December - -
14. TRADE AND OTHER RECEIVABLES
Group Company
2012 2011 2012 2011
£000 £000 £000 £000
Trade receivables 1,655 1,319 - -
Less: provision for impairment (20) (87) - -
Trade receivables - net 1,635 1,232 - -
Other debtors 354 185 50 40
Prepayments and accrued income 278 412 5 6
Due from Group undertakings - - 1,513 1,262
Total 2,267 1,829 1,568 1,308
As at 31 December 2012, Group trade receivables of £836,000 (2011: £820,000)
were past their due date but not impaired. They relate to customers with no
default history. The aging profile of these receivables is as follows:
Group Company
2012 2011 2012 2011
£000 £000 £000 £000
Up to 3 months 800 624 - -
3 to 6 months 1 31 - -
6 to 12 months 35 165 - -
Total 836 820 - -
The largest amount due from a single debtor at 31 December 2012 represents
10.86% (2011: 11.07%) of the total trade receivables balance outstanding.
As at 31 December 2012, Group trade receivables of £20,000 (2011: £87,000) were
past their due date and impaired. A provision for impairment for the full
amount has been recognised in the financial statements. Movements on the
Group's provision for impairment of trade receivables are as follows:
2012 2011
£000 £000
At 1 January 87 145
Provision for receivable impairment 20 87
Receivables written-off as (87) (145)
uncollectable
At 31 December 20 87
Other than the impairment provision provided for aged trade receivables above,
there are no other material difference between the carrying value and the fair
value of the Group's and parent company's trade and other receivables.
15. CASH AND CASH EQUIVALENTS
Group Company
2012 2011 2012 2011
£000 £000 £000 £000
Cash at bank and on hand 1,009 650 592 366
Total 1,009 650 592 366
There is no material difference between the carrying value and the fair value
of the Group's and parent company's cash at bank and in hand.
16. TRADE AND OTHER PAYABLES
Group Company
2012 2011 2012 2011
£000 £000 £000 £000
Trade payables 479 369 73 59
Due to Group undertakings - - 957 764
Other taxation and social security 317 323 (3) (11)
Other payables 75 122 - -
Accruals 204 166 38 25
Total 1,075 980 1,065 837
There is no material difference between the carrying value and the fair value
of the Group's and parent company's trade and other payables.
17. BORROWINGS
Group Company
Maturity profile of borrowings 2012 2011 2012 2011
£000 £000 £000 £000
Current
Bank overdrafts and interest bearing
loans:
Invoice discounting facility 965 625 - -
Interest bearing loan - 109 - 109
965 734 - 109
Deferred consideration 73 300 73 300
1,038 1,034 73 409
Non-Current
In more than one year but no more than
two:
Deferred consideration - 181 - 181
- 181 - 181
Total 1,038 1,215 73 590
The carrying amounts and fair value of the Group's borrowings, which are all
denominated in sterling, are as follows:
Carrying amount Fair value
2012 2011 2012 2011
£000 £000 £000 £000
Bank overdrafts and interest bearing 965 734 965 734
loans
Deferred consideration 73 481 73 481
Total 1,038 1,215 1,038 1,215
a. Invoice discounting facility
Norman Broadbent Executive Search Limited operates an invoice discounting
facility. Funds are available to be drawn down at an advance rate of 75%
against trade receivables of Norman Broadbent Executive Search Limited that are
aged less than 120 days, with the facility capped at £1,500,000. At 31 December
2012, the outstanding balance on the facility of £965,000 (2011: £625,000) was
secured by trade receivables of £1,450,000 (2011: £1,229,000) and a cross
corporate guarantee and indemnity deed dated 20 July 2011. Interest is charged
on the drawn down funds at a rate of 2.75% above the bank base rate (2011:
2.75%).
b. Deferred consideration
The balance outstanding at 31 December 2012 of £73,000 was settled in full on 7
February 2013. There are no further liabilities, warranties or obligations
outstanding in relation to the deferred consideration.
18. FINANCIAL INSTRUMENTS
The principle financial instruments used by the Group, from which financial
instrument risk arises, are summarised below. All financial assets and
liabilities are measured at amortised cost which is not considered to be
materially different to fair value.
Amortised Cost
Group 2012 2011
£000 £000
Financial Assets
Trade and other receivables 2,267 1,829
Cash and cash equivalents 1,009 650
Financial Liabilities
Trade and other payables 1,075 980
Bank overdrafts and interest bearing loans 965 734
Deferred consideration 73 481
Corporation tax liability 72 -
Amortised Cost
Company 2012 2011
£000 £000
Financial Assets
Trade and other receivables 1,676 1,308
Cash and cash equivalents 592 366
Financial Liabilities
Trade and other payables 1,173 837
Bank overdrafts and interest bearing loans - 109
Deferred consideration 73 481
In common with all other businesses, the Group is exposed to risks that arise
from its use of financial instruments. Details on these risks and the policies
set out by the Board to reduce them can be found in Note 2 of the Report and
Accounts.
19. SHARE CAPITAL AND PREMIUM
Allotted and fully paid: 2012 2011
£000 £000
Ordinary Shares:
13,048,686 Ordinary shares of 1.0p each (2011: 130 106
10,607,801)
Deferred Shares:
23,342,400 Deferred A shares of 4.0p each (2011: 934 934
23,342,400)
907,118,360 Deferred shares of 0.4p each (2011: 3,628 3,628
907,118,360)
1,043,566 Deferred B shares of 42.0p each (2011: 438 438
1,043,566)
2,504,610 Deferred shares of 29.0p each (2011: 727 727
2,504,610)
5,727 5,727
Total 5,857 5,833
Deferred A Shares of 4.0p each
The Deferred A Shares carry no right to dividends or distributions or to
receive notice of or attend general meetings of the company. In the event of a
winding up, the shares carry a right to repayment only after the holders of
Ordinary Shares have received a payment of £10 million per Ordinary Share.
The company retains the right to cancel the shares without payment to the
holders thereof. The rights attaching to the shares shall not be varied by the
creation or issue of shares ranking parri passu with or in priority to the
Deferred A Shares.
Deferred Shares of 0.4p each
The Deferred Shares carry no right to dividends, distributions or to receive
notice of or attend general meetings of the company. In the event of a winding
up, the shares carry a right to repayment only after payment of capital paid up
on Ordinary Shares plus a payment of £10,000 per Ordinary Share. The company
retains the right to transfer or cancel the shares without payment to the
holders thereof.
Deferred B Shares of 42.0p each
The Deferred B Shares carry no right to dividends or distributions or to
receive notice of or attend general meetings of the company. In the event of a
winding up, the shares carry the right to repayment only after the holders of
Ordinary Shares have received a payment of £10 million per Ordinary Share. The
company retains the right to cancel the shares without payment to the holders
thereof. The rights attaching to the shares shall not be varied by the creation
or issue of shares ranking parri passu with or in priority to the Deferred B
Shares.
Deferred Shares of 29.0p each
The Deferred Shares carry no right to dividends or distributions or to receive
notice of or attend general meetings of the company. In the event of a winding
up, the shares carry the right to repayment only after the holders of Ordinary
Shares have received a payment of £10,000 per Ordinary Share. The company
retains the right to cancel the shares without payment to the holders thereof.
A reconciliation of the movement in share capital and share premium is
presented below:
No. of Ordinary Deferred Share Total
ordinary shares shares premium
shares £000
(000s) £000 £000 £000
At 1 January 2011 7,719 77 5,727 6,985 12,789
Proceeds from share placing 2,692 27 - 1,723 1,750
(note a)
Transaction costs related to - - - (54) (54)
share placing
Shares issued on conversion 118 1 - 53 54
of options/warrants
Shares issued to employees 79 1 - 51 52
At 31 December 2011 10,608 106 5,727 8,758 14,591
Proceeds from share placing 2,122 21 - 721 742
(note b)
Transaction costs related to - - - (15) (15)
share placing
Shares issued on acquisition 319 3 - 108 111
(note 23)
At 31 December 2012 13,049 130 5,727 9,572 15,429
a. Share placing in May 2011:
At the Annual General Meeting of the Company on 31 May 2011, a special
resolution was passed to allot 2,692,308 new ordinary 1.0p shares for a total
cash consideration of £1,750,000.
b) Share placing in November 2012:
On 13 November 2012, the Company issued 2,121,600 new ordinary 1.0p shares for
a total cash consideration of £742,000. Transaction costs of £15,000 were
incurred resulting in net cash proceeds of £727,000.
20. SHARE BASED PAYMENTS
20.1 Share Options
The Company has an approved EMI share option scheme for full time employees and
directors and had an unapproved share option scheme under which options to
subscribe for the Company's shares were granted to connected parties, which
expired in 2011. The exercise price of the granted options is equal to the
market price of the shares on the date of the grant. The Company has no legal
or constructive obligation to repurchase or settle the options or warrants in
cash.
Options under the Company EMI scheme are conditional on the employee completing
three years' service (the vesting period). The EMI options vest in three equal
tranches on the first, second and third anniversary of the grant. The options
have a contractual option term of ten years.
Options under the unapproved scheme lapsed in March 2011.
Movements in the number of share options and their related weighted average
exercise prices are as follows:
Approved EMI share Unapproved share
option scheme option scheme
Avg. Number of Avg. Number of
exercise options exercise options
price per price per
share (p) share (p)
At 1 January 2011 68.70 387,211 168.90 26,625
Granted 65.50 955,393 - -
Forfeited 96.82 (141,499) 168.90 (26,625)
Exercised 52.50 (19,047) - -
At 31 December 2011 63.01 1,182,058 - -
Forfeited 63.05 (185,819) - -
At 31 December 2012 62.92 996,240 - -
Share options outstanding at the end of the year have the following expiry date
and exercise prices:
Expiry date Exercise Share options
price per
share (p) 2012 2011
2020 52.50 198,094 226,665
2021 65.50 798,146 955,393
Total 996,240 1,182,058
Out of the 996,240 outstanding options (2011: 1,182,058), no options were
exercisable at the year end (2011: 75,555) as they were all `underwater'.
The weighted average fair value of the share options granted in 2011,
determined using the Trinomial Valuation Model, was 37.5 pence (options granted
in 2010: 21.3 pence). The significant inputs into the model were weighted
average share price of 65.5 pence at the grant date (2010: 52.5 pence),
exercise price shown above, volatility of 75% (2010: 85%), dividend yield of 0%
(2010: 0%), an expected option life of 10 years (2010: 10 years) and an annual
risk-free interest rate of 3.38% (2010: 3.65%). The expected volatility was
estimated by reference to the historical volatility of the Company's share
price and those of UK quoted companies in a similar business sector. The
risk-free interest rate is estimated as the yield on zero coupon UK government
bonds of a term consistent with the contractual life of the options granted.
20.2 Warrants
On 14 June 2010, the Company issued warrants over shares in the Company to two
directors and a connected party on the basis of one warrant for one ordinary
share. The warrants have an exercise price of 45 pence, can be exercised in
full or in part immediately and expire on 31 May 2013.
Movements in the number of warrants and their related weighted average exercise
prices are as follows:
Warrants
Avg. Number of
exercise warrants
price per
share (p)
At 1 January 2011 49.35 292,776
Forfeited 90.00 (28,333)
Exercised 45.00 (97,777)
At 31 December 2011 45.00 166,666
Granted - -
Forfeited - -
Exercised - -
At 31 December 2012 45.00 166,666
Warrants outstanding at the end of the year have the following expiry date and
exercise prices:
Expiry date Exercise Warrants
price per
share (p) 2012 2011
2013 45.00 166,666 166,666
Total 166,666 166,666
Out of the 166,666 outstanding warrants (2011: 166,666), 166,666 warrants were
exercisable in the year (2011: 166,666).
See Note 65 for the total expense recognised in the income statement for share
options and warrants granted to directors and employees.
21. LEASES
Operating leases
The Group leases all its premises. The terms of the leases vary for each
property and are tenant repairing.
As at 31 December 2012, the total future value of minimum lease payments are
due as follows:
Land and Buildings
2012 2011
£000 £000
Within one year 156 440
Later than one year and not later than five years - 117
Total 156 557
On the 6 March 2013 the directors signed a new lease for the Company's
principle office at 12 St James's Square, London on substantially improved
financial terms. The new lease commences on 30 April 2013 for 10 years with the
option to break after 5 years.
22. PENSION COSTS
The Group operated several defined contribution pension schemes for the
business. The assets of the schemes were held separately from those of the
Group in independently administered funds. The pension cost represents
contributions payable by the Group to the funds and amounts to £182,000 (2011:
£177,000). At the year end £18,000 of contributions were outstanding (2011: £
17,000).
23. BUSINESS COMBINATIONS
On the 1 November 2012, the Company obtained control of Acker Deboeck and
Company SPRL, an executive search and leadership consultancy business
headquartered in Brussels, by acquiring 51 per cent of the shares and voting
interests in the company. The acquisition of Acker Deboeck, renamed Norman
Broadbent SPRL in January 2013, will extend the European reach of the Norman
Broadbent executive search brand whilst significantly enhancing the leadership
consulting and board evaluation services of the Group.
In the two months to 31 December 2012, Acker Deboeck contributed revenue of £
114,000 and profit before tax of £34,000 to the Group's results. If the
acquisition had occurred on 1 January 2012, management estimates that the
subsidiary would have contributed revenue of £560,000 and pre-tax profit for
the year of £140,000.
The following summarises the major classes of consideration transferred and the
recognised amounts of assets acquired and liabilities assumed at the
acquisition date.
Consideration transferred:
£000
Cash 137
Equity instruments (319,285 ordinary 1.0p shares - note 111
19)
Total 248
a. Equity Instruments issued - the fair value of the ordinary shares issued
was based on the listed share price of the Company at 1 November 2012 of 35
pence per share.
Identifiable assets acquired and liabilities assumed:
£000
Property, plant and equipment 39
Trade and other receivables 74
Cash and cash equivalents 318
Trade and other payables (29)
Corporation tax (135)
Total 267
The following fair values have been determined on a provisional basis:
a. Trade receivables comprise gross contractual amounts of £60,000 and £14,000
of assignment related expenses due to be recharged to clients. Whilst there
is no expectation or track record of bad debts in the company, should any
of the outstanding invoices become uncollectable then an adjustment to the
fair value of trade receivables would be necessary.
b. The corporation tax liability of £135,000 represents a provision for the
expected tax liability of the company calculated by an independent tax
firm. Once the formal year end tax computation has been prepared any
material adjustments to the provision would need to be factored in to the
acquisition calculation.
If new information obtained within one year from the acquisition date about
facts and circumstances that existed at the acquisition date identifies
adjustments to the above amounts, or any additional provisions that existed at
the acquisition date, then the acquisition accounting will be revised.
Goodwill:
Goodwill was recognised as a result of the acquisition as follows:
£000
Total consideration transferred 248
Non-controlling interests, based on their proportionate 131
interest in the recognised amounts of assets and
liabilities of Acker Deboeck
Fair value of identifiable net assets (267)
Total 112
The goodwill is attributable mainly to the skills and technical talent of Acker
Deboeck's employees and the enhanced revenue generating ability of the Group,
particularly the leadership consulting and board evaluation services, for which
Acker Deboeck has a demonstrable track record of delivering.
Acquisition-related costs:
The Company incurred acquisition related legal costs of £10,000. These costs
have been included in "operating expenses" in the consolidated statement of
comprehensive income.
24. RELATED PARTY TRANSACTIONS
The following transactions were carried out with related parties:
a. Purchase of services:
b.
2012 2011
£000 £000
Adelaide Capital Limited 141 166
Anderson Barrowcliff LLP 31 35
Brian Stephens & Company Ltd 5 -
Andrew Garner Associates Limited - 261
NBS Norman Broadbent SA 8 9
Total 185 471
During the year Adelaide Capital Limited invoiced the Group for the directors'
fees of P Casey (£125,000), B Stephens (£15,000) and business related travel
costs of £1,000. From October 2012 Brian Stephens & Company Ltd invoiced the
Group for the directors' fees of B Stephens (£5,000). P Casey and B Stephens
were directors of Adelaide Capital Limited during the year. B Stephens is a
director of Brian Stephens & Company Ltd.
Taxation and company secretarial services of £11,000 were acquired from
Anderson Barrowcliff LLP, an accountancy firm of which R Robinson is a partner.
Anderson Barrowcliff also invoices the Group for R Robinson's director's fees
(£20,000).
During the year the company incurred rechargeable costs (£4,000) and fee splits
relating to jointly executed overseas searches (£4,000) from NBS Norman
Broadbent SA. The Group owns a 20% stake in NBS Norman Broadbent SA.
All related party expenditure took place via "arms-length" transactions.
b. Sale of services
c.
2012 2011
£000 £000
NBS Norman Broadbent SA 253 236
Total 253 236
During the year the company invoiced NBS Norman Broadbent SA for royalty income
(£241,000), rechargeable costs (£4,000) and fee splits relating to jointly
executed overseas searches (£8,000).
All related party transactions took place at "arms-length".
c. Key management compensation:
Key management includes executive and non-executive directors. The compensation
paid or payable to the directors can be found in the Directors' Remuneration
Report on page 9.
d. Year-end payables arising from the purchases of services:
e.
2012 2011
£000 £000
Adelaide Capital Limited 21 19
Anderson Barrowcliff LLP 6 4
Brian Stephens & Company Ltd 4 -
NBS Norman Broadbent SA 5 -
Total 36 23
Payables to related parties arise from purchase transactions and are due one
month after date of purchase. Payables bear no interest.
e. Year-end receivables arising from the sale of services:
f.
2012 2011
£000 £000
NBS Norman Broadbent SA 68 50
Total 68 50
Receivables owed by related parties arise from sales transactions and are due
one month after date of purchase. Payables bear no interest.
f. Loans from related parties:
In order to assist the working capital position, certain directors have
historically advanced loans to the Group, which were non-interest bearing and
had no formal repayment terms.
2012 2011
£000 £000
At 1 January - 7
Loans repaid during the year - (7)
At 31 December - -
26. CONTINGENT LIABILITY
The Company is a member of the Norman Broadbent plc Group VAT scheme. As such
it is jointly accountable for the combined VAT liability of the Group. The
total VAT outstanding in the Group at the year-end was £162,000 (2011: £
115,000).
Under Section 17 of the Landlord and Tenant (Covenants) Act 1995 the Company
has a contingent liability in respect of the lease on its previous registered
office, which was assigned to a third party in April 2010. The Company could be
required to meet the financial obligations of the lease should the assignee
default on lease payments. The maximum potential liability would be £120,000
per annum expiring on 31 December 2015. The directors believe the likelihood of
the assignee defaulting prior to expiry is remote due to the financial health
and balance sheet position of the tenant, reviewed in their last published
financial statements in March 2013.
27. AVAILABILITY OF REPORT AND ACCOUNTS
Copies of the report and accounts will be posted to shareholders shortly and
will be available on request from the Company's registered office at 12 St
James's Square, London, SW1Y 4LB. Copies are also available on the Company's
website: www.normanbroadbent.com