Half-year Report
M&C SAATCHI PLC
INTERIM RESULTS
SIX MONTHS ENDED
30 JUNE 2016
22 September 2016
M&C Saatchi PLC
Interim results for the six months ended 30 June 2016
22 September 2016
Strong revenue and earnings growth
|
|
|
|||
|
Financial Highlights 2016 |
Growth versus 2015 |
|||
|
Revenue |
£100.2m |
+ 15% (2015: £87.5m) |
|
|
|
Revenue in constant currencies Like-for-like revenue Operating Profit |
£11.3m |
+ 14% + 6% + 22% (2015: £9.3m) |
|
|
|
Profit Before Tax |
£11.4m |
+ 19% (2015: £9.6m) |
|
|
|
Earnings EPS |
£7.7m 10.71p |
+ 22% (2015: £6.3m) + 20% (2015: 8.96p) |
|
|
|
Dividend |
1.85p |
+ 15% (2015: 1.61p) |
|
|
The highlights are headline results, see note on next page for definition.
Operational Highlights
· Successful first half with strong revenue momentum and earnings growth
· Global Network performed mostly very well:
° UK: like-for-like revenues down 1%
° Europe: like-for-like revenues up 12%
° Middle East and Africa: like-for-like revenues up 19%
° Asia and Australasia: like-for-like revenues up 5%
° Americas: like-for-like revenues up 27%, constant currency revenues were up 93%
o Net borrowing of £8.5m following equity investments in New York
o Interim dividend increased 15% to 1.85p
Commenting on the results, David Kershaw, Chief Executive, said:
"Momentum across the Group remains strong, producing positive revenue and earnings growth over the first six months of 2016.
"We are well positioned and see significant opportunities from our breadth of offer in the fastest growing segments.
"The second half has started well with trading in line with expectations. We continue with the proven strategy."
For further information please call:
M&C Saatchi +44 (0)20-7543-4500
David Kershaw
Tulchan Communications +44 (0)20-7353-4200
Tom Murray
Numis Securities +44 (0)20-7260-1000
Nick Westlake, NOMAD
Charles Farquhar, Corporate Broking
Notes to Editors
Headline results
The term headline is not a defined term in IFRS. The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill and acquired intangibles, but excluding software) acquired in business combinations, changes to deferred and contingent consideration and other acquisition related charges taken to the income statement; impairment of investment in associate; profit/loss on disposal of associates; and income statement impact of put option accounting (whether accounted under IFRS2 or IAS39). See Note 4 for reconciliation between the Group's statutory results and the headline results.
Like-for-like
The like-for-like revenue comparisons referred to in this report are stated after excluding the impact of foreign currency movements and corporate transactions.
Periods compared
This report comments on the unaudited consolidated income statement of M&C Saatchi plc (the "Group") for the six months to 30 June 2016 compared with the unaudited consolidated income statement for the same period in 2015.
SUMMARY OF RESULTS
The first six months of 2016 saw strong revenue momentum and earnings growth. Actual revenues grew by 15%, with constant currency revenues increasing 14%, whilst we increased like-for-like revenues 6%. We returned a headline operating margin of 11.3%, up from 10.6% in 2015. The headline profit before tax advanced 19% to £11.4m and headline net earnings rose 22%.
UK
We posted a small decrease in UK revenues of 1%, with our CRM and mobile operations returning good increases. In addition, M&C Saatchi PR and our Sport & Entertainment division as well as our research operation The Source all performed strongly. However, this growth was offset by the impact of 2015 client losses within the advertising agency.
We experienced a favourable run of account wins across our group of businesses in the first half, including Ageas, Alibaba, the Department of Work and Pensions, E.ON, the Home Office, Open University, Rail Delivery Group and further work for Royal Mail.
The UK headline operating profit was 10% down on 2015 but included restructuring costs of £660k in the advertising agency unit, which if discounted meant operating profit actually grew 2% on 2015. The headline operating margin decreased to 13.0% compared with 2015's 14.2%, but if the restructuring costs are excluded then the margin came in at 14.7%. These margins exclude the impact of Group recharges. We are also finalising the previously announced sale of 30% of the advertising agency to a new management team following our proven owner-driver model. We are confident that this new team will provide a platform for growth next year.
Europe
We made further positive progress in Europe with like-for-like revenues up 12%. Headline operating profit was up 51%, with a headline operating margin of 16.2% (2015: 12.7%). Our Stockholm office kept up its very good new business record and won the TV and broadband supplier Com Hem. Both Germany and Italy maintained their strong performance, with Italy winning E.ON. In France, advertising remained sluggish but our agency was appointed by YouTube and Google and continues to grow through diversification. Our associate in Spain continues to tick up after a challenging few years.
Middle East and Africa
Like-for-like revenues in the Middle East and Africa were up 19%, with a slow start as last year but a stronger second half anticipated. In South Africa we lost Edgars but quickly won Sun International. Our Abu Dhabi and Dubai offices are both growing steadily, as is our Tel Aviv office. Overall with the slow start, the operating profit off a low base was up 33% and the headline operating margin increased to 7.9% from 6.8% in 2015.
Asia and Australasia
In Asia and Australasia, like-for-like revenues increased 5% in the period. Our Australian offices are doing very well and following their win of Woolworths in February without a pitch, have since won BBQ Galore, eBay and Menulog.
Otherwise, our associate in China, aeiou, continues to perform favourably and impress network clients. Malaysia is still excelling and won the KLIA account. Singapore is developing positively and picked up some Shell business. Japan has continued to underperform and we have therefore reduced our holding to 10%.
The headline regional operating margin was 11.9% (2015: 12.0%), with the headline operating profit ahead 4% on the same period last year.
Americas
Constant currency revenues increased 93%, with like-for-like up 27%. There was an excellent 95% increase in operating profit to £3.4m and a headline operating margin of 17.1% (2015: 17.3%). Mobile are doing exceptionally well and building a strong client base across the US. The SS+K relationship in New York is thriving. In the light of this outstanding growth, we increased our shareholding in SS+K from 33% to 51% in March. In March, we also acquired 51% of MCD Partners in New York and Chicago to develop our US CRM offer. They are working very positively with LIDA and building a good relationship.
Our office in Los Angeles lost the UGG account but has since been converting new business including some Reebok and BMW. Macro-economic factors in Brazil have materially slowed the advertising market there and trading is currently tough.
Outlook
Momentum across the Group remains strong, producing positive revenue and earnings growth over the first six months of 2016. We have not seen any impact as a result of the Brexit decision, other than a positive foreign currency impact. We are well positioned and see significant opportunities from our breadth of offer in the fastest growing segments. The second half has started well with trading in line with expectations. We continue with the proven strategy.
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT
ENDED 30 JUNE 2016
|
|
|
|
Six months
|
|
|
|
Six months
|
|
Year
|
|
|
Note |
|
£000 |
|
|
|
£000 |
|
£000 |
|
|
|
|
|
|
|
|
|
|
|
Billings |
|
|
217,222 |
|
|
|
182,340 |
|
375,107 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
4 |
|
100,219 |
|
|
|
87,568 |
|
178,928 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs |
|
|
(93,180) |
|
|
|
(79,242) |
|
(164,221) |
Operating profit |
4 |
|
7,039 |
|
|
|
8,326 |
|
14,707 |
|
|
|
|
|
|
|
|
|
|
|
|
Share of results of associates |
|
|
405 |
|
|
|
541 |
|
2,017 |
|
Finance income |
6 |
|
3,797 |
|
|
|
154 |
|
299 |
|
Finance costs |
7 |
|
(512) |
|
|
|
(618) |
|
(4,477) |
Profit before taxation |
4 |
|
10,729 |
|
|
|
8,403 |
|
12,546 |
|
Taxation on profits |
8 |
|
(1,667) |
|
|
|
(1,980) |
|
(3,386) |
|
Profit for the financial period |
|
|
9,062 |
|
|
|
6,423 |
|
9,160 |
|
|
|
|
|
|
|
|
|
|
|
|
Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
Equity shareholders of the Group |
4 |
|
8,094 |
|
|
|
5,203 |
|
6,474 |
|
Non controlling interest |
|
|
968 |
|
|
|
1,220 |
|
2,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,062 |
|
|
|
6,423 |
|
9,160 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
4 |
|
|
|
|
|
|
|
|
|
Basic |
|
|
11.24p |
|
|
|
7.36p |
|
9.08p |
|
Diluted |
|
|
11.20p |
|
|
|
7.36p |
|
9.04p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of the above numbers to the Headline numbers, discussed in the front of this report, can be found in note 4 on pages 16 to 18.
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
ENDED 30 JUNE 2016
|
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
Profit for the period |
|
|
9,062 |
|
|
|
6,423 |
|
9,160 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations |
|
|
1,791 |
|
|
|
(1,738) |
|
(1,316) |
|
Total other comprehensive income for the period net of tax |
|
|
1,791 |
|
|
|
(1,738) |
|
(1,316) |
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
|
10,853
|
|
|
|
4,685
|
|
7,844 |
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|
|
Equity shareholders of the Group |
|
|
9,885 |
|
|
|
3,465 |
|
5,158 |
|
Non controlling interests |
|
|
968 |
|
|
|
1,220 |
|
2,686 |
|
|
|
|
10,853 |
|
|
|
4,685 |
|
7,844 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2016
|
|
|
|
30 June 2016 |
|
|
|
30 June 2015 |
|
31 December 2015 |
|
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
NON CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
47,546 |
|
|
|
28,382 |
|
28,286 |
|
Investments in associates |
|
|
18,473 |
|
|
|
22,095 |
|
24,811 |
|
Plant and equipment |
|
|
9,619 |
|
|
|
7,801 |
|
8,197 |
|
Deferred tax assets |
|
|
2,609 |
|
|
|
1,770 |
|
1,476 |
|
Other non current assets |
|
|
7,600 |
|
|
|
7,792 |
|
8,349 |
|
|
|
|
85,847 |
|
|
|
67,840 |
|
71,119 |
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
|
105,673 |
|
|
|
74,303 |
|
87,692 |
|
Current tax assets |
|
|
2,199 |
|
|
|
32 |
|
844 |
|
Cash and cash equivalents |
|
|
29,269 |
|
|
|
26,104 |
|
32,344 |
|
|
|
|
137,141 |
|
|
|
100,439 |
|
120,880 |
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Bank overdraft |
|
|
(2,796) |
|
|
|
(151) |
|
(98) |
|
Trade and other payables |
|
|
(103,277) |
|
|
|
(74,894) |
|
(94,533) |
|
Current tax liabilities |
|
|
(2,885) |
|
|
|
(801) |
|
(1,204) |
|
Other financial liabilities |
|
|
(25) |
|
|
|
(125) |
|
(3,155) |
|
Deferred and contingent consideration |
|
|
- |
|
|
|
- |
|
(1,792) |
|
Minority shareholder put options liabilities |
|
|
(15,594) |
|
|
|
(15,566) |
|
(16,738) |
|
|
|
|
(124,577) |
|
|
|
(91,537) |
|
(117,520) |
|
|
|
|
|
|
|
|
|
|
|
|
Net current Assets |
|
|
12,564 |
|
|
|
8,902 |
|
3,360 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets less current liabilities |
|
|
98,411 |
|
|
|
76,742 |
|
74,479 |
|
|
|
|
|
|
|
|
|
|
|
|
Non current liabilities |
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
(36) |
|
|
|
(254) |
|
(30) |
|
Other financial liabilities |
|
|
(34,958) |
|
|
|
(24,389) |
|
(23,594) |
|
Minority shareholder put options liabilities |
|
|
(13,698) |
|
|
|
(7,303) |
|
(7,626) |
|
Other non current liabilities |
|
|
(1,630) |
|
|
|
(1,049) |
|
(1,208) |
|
|
|
|
(50,322) |
|
|
|
(32,995) |
|
(32,458) |
|
|
|
|
|
|
|
|
|
|
|
|
Net assets |
|
|
48,089 |
|
|
|
43,747 |
|
42,021 |
|
|
|
|
|
|
|
|
|
|
|
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED BALANCE SHEET (CONTINUED)
AT 30 JUNE 2016
|
|
|
|
30 June 2016 |
|
|
|
30 June 2015 |
|
31 December |
|
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
|
737 |
|
|
|
725 |
|
727 |
|
Share premium |
|
|
20,332 |
|
|
|
19,727 |
|
17,338 |
|
Merger reserve |
|
|
31,592 |
|
|
|
29,335 |
|
31,592 |
|
Treasury reserve |
|
|
(792) |
|
|
|
(792) |
|
(792) |
|
Minority interest put option reserve |
|
|
(22,379) |
|
|
|
(14,041) |
|
(12,595) |
|
Non controlling interest acquired |
|
|
(9,990) |
|
|
|
(9,068) |
|
(9,233) |
|
Foreign exchange reserve |
|
|
(193) |
|
|
|
(2,406) |
|
(1,984) |
|
Retained earnings |
|
|
23,412 |
|
|
|
14,949 |
|
12,673 |
|
TOTAL SHAREHOLDERS FUNDS |
|
|
42,719 |
|
|
|
38,429 |
|
37,726 |
|
|
|
|
|
|
|
|
|
|
|
|
Non Controlling interestS |
|
|
5,370 |
|
|
|
5,318 |
|
4,295 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY |
|
|
48,089 |
|
|
|
43,747 |
|
42,021 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
SIX MONTHS ENDED 30 JUNE 2016
|
2016 Half year |
Share |
Share |
Merger reserve £000 |
Treasury |
MI put option reserve |
Non controlling interest acquired |
Foreign exchange |
Retained |
Subtotal |
Non controlling |
Total |
|
At 1 January 2016 |
727 |
17,338 |
31,592 |
(792) |
(12,595) |
(9,233) |
(1,984) |
12,673 |
37,726 |
4,295 |
42,021 |
|
Reserve movement for six months ending 30 June 2016 |
|
|
|
|
|
|
|
|
|
||
|
Exercise of put options |
10 |
2,994 |
- |
- |
551 |
(502) |
- |
(6) |
3,047 |
(17) |
3,030 |
|
Acquisitions |
- |
- |
- |
- |
(10,248) |
- |
- |
- |
(10,248) |
1,797 |
(8,451) |
|
Exchange rate movements |
- |
- |
- |
- |
(87) |
(255) |
- |
- |
(342) |
(367) |
(709) |
|
Issue of shares to minorities |
- |
- |
- |
- |
- |
- |
- |
- |
- |
31 |
31 |
|
Share option charge |
- |
- |
- |
- |
- |
- |
- |
2,651 |
2,651 |
- |
2,651 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(1,337) |
(1,337) |
|
Total transactions with owners |
10 |
2,994 |
- |
- |
(9,784) |
(757) |
- |
2,645 |
(4,892) |
107 |
(4,785) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for year |
- |
- |
- |
- |
- |
- |
1,791 |
8,094 |
9,885 |
968 |
10,853 |
|
At 30 June 2016 |
737 |
20,332 |
31,592 |
(792) |
(22,379) |
(9,990) |
(193) |
23,412 |
42,719 |
5,370 |
48,089 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
SIX MONTHS ENDED 30 JUNE 2016
|
2015 Half year |
Share |
Share |
Merger reserve £000 |
Treasury |
MI put option reserve |
Non controlling interest acquired |
Foreign exchange |
Retained |
Subtotal |
Non controlling |
Total |
|
At 1 January 2015 |
683 |
16,807 |
27,689 |
(792) |
(13,070) |
(7,882) |
(668) |
9,639 |
32,406 |
3,466 |
35,872 |
|
Reserve movement for six months ending 30 June 2015 |
|
|
|
|
|
|
|
|
|||
|
Exercise of put options |
12 |
2,612 |
1,646 |
- |
1,201 |
(1,201) |
- |
(48) |
4,222 |
36 |
4,258 |
|
Issue of put options |
- |
- |
- |
- |
(2,214) |
- |
- |
- |
(2,214) |
1,805 |
(409) |
|
Disposal of a subsidiary |
- |
- |
- |
- |
- |
- |
- |
(72) |
(72) |
181 |
109 |
|
Exchange rate movements |
- |
- |
- |
- |
42 |
15 |
- |
- |
57 |
(110) |
(53) |
|
Share option exercise |
30 |
308 |
- |
- |
- |
- |
- |
(3) |
335 |
(338) |
(3) |
|
Share option charge |
- |
- |
- |
- |
- |
- |
- |
230 |
230 |
- |
230 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(942) |
(942) |
|
Total transactions with owners |
42 |
2,920 |
1,646 |
- |
(971) |
(1,186) |
- |
107 |
2,558 |
632 |
3,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for year |
- |
- |
- |
- |
- |
- |
(1,738) |
5,203 |
3,465 |
1,220 |
4,685 |
|
At 30 June 2015 |
725 |
19,727 |
29,335 |
(792) |
(14,041) |
(9,068) |
(2,406) |
14,949 |
38,429 |
5,318 |
43,747 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
SIX MONTHS ENDED 30 JUNE 2016
|
2015 Year |
Share |
Share |
Merger reserve £000 |
Treasury |
MI put option reserve |
Non controlling interest acquired |
Foreign exchange |
Retained |
Subtotal |
Non controlling |
Total |
|
At 1 January 2015 |
683 |
16,807 |
27,689 |
(792) |
(13,070) |
(7,882) |
(668) |
9,639 |
32,406 |
3,466 |
35,872 |
|
Reserve movement for year ending 31 December 2015 |
|
|
|
|
|
|
|
|
|||
|
Acquisition |
- |
- |
- |
- |
- |
- |
- |
- |
- |
161 |
161 |
|
Exercise of put options |
13 |
224 |
3,903 |
- |
1,274 |
(1,274) |
- |
(48) |
4,092 |
24 |
4,116 |
|
Office closure |
- |
- |
- |
- |
- |
- |
- |
(158) |
(158) |
158 |
- |
|
Exchange rate movements |
- |
- |
- |
- |
39 |
(77) |
- |
- |
(38) |
(121) |
(159) |
|
Issue of shares to minorities |
- |
- |
- |
- |
- |
- |
- |
- |
- |
1,850 |
1,850 |
|
Issue of minority put options |
- |
- |
- |
- |
(2,190) |
- |
- |
- |
(2,190) |
- |
(2,190) |
|
Reclassification of minority put options |
- |
- |
- |
- |
1,352 |
- |
- |
306 |
1,658 |
- |
1,658 |
|
Option exercise |
31 |
307 |
- |
- |
- |
- |
- |
(3) |
335 |
(338) |
(3) |
|
Share option charge |
- |
- |
- |
- |
- |
- |
- |
1,125 |
1,125 |
- |
1,125 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
(4,662) |
(4,662) |
(3,591) |
(8,253) |
|
Total transactions with owners |
44 |
531 |
3,903 |
- |
475 |
(1,351) |
- |
(3,440) |
162 |
(1,857) |
(1,695) |
|
Total comprehensive income for the year |
- |
- |
- |
- |
- |
- |
(1,316) |
6,474 |
5,158 |
2,686 |
7,844 |
|
At 1 December 2015 |
727 |
17,338 |
31,592 |
(792) |
(12,595) |
(9,233) |
(1,984) |
12,673 |
37,726 |
4,295 |
42,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
SIX MONTHS ENDED 30 JUNE 2016
|
|
|
Six months ended |
|
|
|
Six months ended |
|
Year Ended |
|
|
|
Notes |
£000 |
|
|
|
£000 |
|
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
100,219 |
|
|
|
87,568 |
|
178,928 |
|
|
Operating cost |
|
(93,180) |
|
|
|
(79,242) |
|
(164,221) |
|
|
Operating Profit |
|
7,039 |
|
|
|
8,326 |
|
14,707 |
|
|
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
Depreciation of plant and equipment |
|
1,159 |
|
|
|
1,120 |
|
2,128 |
|
|
Losses on sale of plant and equipment |
|
36 |
|
|
|
9 |
|
36 |
|
|
Losses on sale of software intangibles |
|
- |
|
|
|
- |
|
12 |
|
|
Profit on disposal of associate |
|
- |
|
|
|
(142) |
|
(217) |
|
|
Amortisation on acquired intangible assets |
|
1,638 |
|
|
|
684 |
|
1,940 |
|
|
Impairment of goodwill |
|
- |
|
|
|
- |
|
889 |
|
|
Amortisation of capitalised software intangible assets |
60 |
|
|
|
50 |
|
98 |
|
|
|
Equity settled share based payment expenses |
|
2,651 |
|
|
|
315 |
|
1,125 |
|
|
Operating cash flow before movements in working capital and provisions |
|
12,583 |
|
|
|
10,362 |
|
20,718 |
|
|
Increase in trade and other receivables |
|
(1,449) |
|
|
|
(9,182) |
|
(17,192) |
|
|
(Increase)/Decrease in trade and other payables |
|
(8,781) |
|
|
|
4,569 |
|
18,018 |
|
|
Cash generated from operations |
|
2,353 |
|
|
|
5,749 |
|
21,544 |
|
|
Tax paid |
|
(2,901) |
|
|
|
(2,081) |
|
(5,326) |
|
|
Net cash (outflow)/inflow from operating activities |
(548) |
|
|
|
3,668 |
|
16,218 |
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
|
Acquisitions net of cash acquired |
10 |
(11,033) |
|
|
|
(564) |
|
(79) |
|
|
Acquisitions of associates |
10 |
- |
|
|
|
(3,349) |
|
(3,765) |
|
|
Acquisition of investments |
|
(581) |
|
|
|
(335) |
|
(1,366) |
|
|
Disposal of associates |
|
- |
|
|
|
97 |
|
325 |
|
|
Proceeds from sale of plant and equipment |
|
8 |
|
|
|
- |
|
7 |
|
|
Purchase of intangibles |
|
- |
|
|
|
- |
|
(327) |
|
|
Purchase of plant and equipment |
|
(1,495) |
|
|
|
(638) |
|
(1,970) |
|
|
Purchase of capitalised software |
|
(156) |
|
|
|
(5) |
|
(158) |
|
|
Dividend from associates |
|
- |
|
|
|
76 |
|
1,173 |
|
|
Interest earned |
|
169 |
|
|
|
154 |
|
299 |
|
|
Net cash consumed by investing activities |
|
(13,088) |
|
|
|
(4,564) |
|
(5,861) |
|
|
Net cash consumed by operating and investing activities |
|
(13,636) |
|
|
|
(896) |
|
10,357 |
|
|
|
|
Six months ended |
|
|
|
Six months ended |
|
Year Ended |
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
Net cash consumed by operating and investing activities |
|
(13,636) |
|
|
|
(896) |
|
10,357 |
|
|
|
|
|
|
|
|
|
|
|
Dividends paid to equity holders of the Company |
|
- |
|
|
|
- |
|
(4,662) |
|
Dividends paid to non controlling interest |
|
(1,337) |
|
|
|
(1,912) |
|
(3,591) |
|
Issue of own shares |
|
- |
|
|
|
497 |
|
- |
|
Issue of shares to minorities |
|
- |
|
|
|
- |
|
15 |
|
Repayment of finance leases |
|
(21) |
|
|
|
(17) |
|
(31) |
|
(Repayment) / inception of invoice discounting |
|
(3,130) |
|
|
|
- |
|
3,130 |
|
Inception of bank loans |
|
10,646 |
|
|
|
6,451 |
|
6,349 |
|
Repayment of bank loans |
|
- |
|
|
|
(293) |
|
(968) |
|
Interest paid |
|
(510) |
|
|
|
(378) |
|
(771) |
|
Net cash generated / (consumed) from financing activities |
|
5,648
|
|
|
|
4,348
|
|
(529) |
|
|
|
|
|
|
|
|
|
|
|
Net increase / (decrease) in cash and cash equivalents |
|
(7,988)
|
|
|
|
3,452
|
|
9,828 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the period |
|
32,246 |
|
|
|
23,321 |
|
23,321 |
|
Effect of exchange rate changes |
|
2,215 |
|
|
|
(820) |
|
(903) |
|
Cash and cash equivalents at the end of the period |
|
26,473
|
|
|
|
25,953
|
|
32,246 |
|
|
|
|
|
|
|
|
|
|
1. GENERAL INFORMATION
The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 36 Golden Square, London W1F 9EE.
The Company has its primary listing on the AIM market of the London Stock Exchange.
This consolidated half-yearly financial information was approved for issue on 22 September 2016.
These results do not constitute the Group's statutory accounts. The information presented in relation to 31 December 2015 is extracted from the statutory financial statements for the year then ended and which have been delivered to the Registrar of Companies. The auditor's report on the statutory financial statements for the year ended 31 December 2015 was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report(s) and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.
2. Basis of preparation
This consolidated half-yearly financial information for the half-year ended 30 June 2016 has been prepared in accordance with the AIM Rules for companies. The half-yearly consolidated financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2015.
3. Accounting policies
The financial information in these interim results is that of the holding company and all of its subsidiaries (the Group). It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended
31 December 2015 and which will form the basis of the 2016 financial statements.
4. Earnings per share and reconciliation between headline and statutory results
The analysis below provides a reconciliation between the Group's statutory results and the headline results.
|
Six Months to |
|
|
|
Amortisation £000 |
|
Fair value adjustments to minority put option liabilities |
|
Headline £000 |
|
|
Revenue |
|
100,219 |
|
- |
|
- |
|
100,219 |
|
|
Operating profit |
|
7,039 |
|
1,637 |
|
2,651 |
|
11,327 |
|
|
Share of results of associates & JV |
|
405 |
|
- |
|
- |
|
405 |
|
|
Finance income |
|
3,797 |
|
- |
|
(3,628) |
|
169 |
|
|
Finance cost |
|
(512) |
|
- |
|
- |
|
(512) |
|
|
Profit before taxation |
|
10,729 |
|
1,637 |
|
(977) |
|
11,389 |
|
|
Taxation |
|
(1,667) |
|
(645) |
|
- |
|
(2,312) |
|
|
Profit for the year |
|
9,062 |
|
992 |
|
(977) |
|
9,077 |
|
|
Non controlling interests |
(968) |
|
(403) |
|
- |
|
(1,371) |
||
|
Profit attributable to equity holders of the Group |
8,094 |
|
589 |
|
(977) |
|
7,706 |
||
|
BASIC EARNINGS PER SHARE |
|
|
|
|
|
||||
|
Weighted average number of shares (Thousands) |
71,982 |
|
|
|
|
|
71,982 |
||
|
Basic EPS |
|
11.24p |
|
|
|
|
|
10.71p |
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
|
|
|
|
|
|
||
|
Weighted average number of shares (Thousands) as above |
71,982 |
|
|
|
|
|
71,982 |
||
|
Add |
|
|
|
|
|
|
|
|
|
|
- Conditional shares |
|
300 |
|
|
|
|
|
300 |
|
|
Total |
|
72,282 |
|
|
|
|
|
72,282 |
|
|
Diluted earnings per share |
|
11.20p |
|
|
|
|
|
10.66p |
|
|
|
|
|
|
|
|
|
|
|
|
The Directors believe that the headline results and headline earnings per share provide additional useful information on the underlying performance. The headline result is used for internal performance management, calculating the value of subsidiary convertible shares and minority interest put options. The term headline is not a defined term in IFRS.
The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill and acquired intangibles, but excluding software) acquired in business combinations, changes to deferred and contingent consideration and other acquisition related charges taken to the income statement; impairment of investment in associate; profit/loss on disposal of associates; and income statement impact of put option accounting (whether accounted under IFRS2 or IAS39).
|
Six Months to |
|
|
Amortisation £000 |
Profit on disposal of an associate £000 |
Loss on disposal of subsidiary |
Contingent acquisition cost classified as expense |
Fair value adjustments to minority put option liabilities |
Headline £000 |
|
|||||||||||
|
Revenue |
|
87,568 |
- |
- |
- |
- |
- |
87,568 |
|
|||||||||||
|
Operating profit |
|
8,326 |
684 |
(142) |
85 |
142 |
200 |
9,295 |
|
|||||||||||
|
Share of results of associates & JV |
|
541 |
- |
- |
- |
- |
- |
541 |
|
|||||||||||
|
Finance income |
|
154 |
- |
- |
- |
- |
- |
154 |
|
|||||||||||
|
Finance cost |
|
(618) |
- |
- |
- |
- |
238 |
(380) |
|
|||||||||||
|
Profit before taxation |
|
8,403 |
684 |
(142) |
85 |
142 |
438 |
9,610 |
|
|||||||||||
|
Taxation |
|
(1,980) |
(124) |
71 |
- |
- |
- |
(2,033) |
|
|||||||||||
|
Profit for the year |
|
6,423 |
560 |
(71) |
85 |
142 |
438 |
7,577 |
|
|||||||||||
|
Non controlling interests |
(1,220) |
(27) |
- |
- |
- |
- |
(1,247) |
|||||||||||||
|
Profit attributable to equity holders of the Group |
5,203 |
533 |
(71) |
85 |
142 |
438 |
6,330 |
|||||||||||||
|
BASIC AND DILUTED EARNINGS PER SHARE* |
|
|
|
|
|
|||||||||||||||
|
Weighted average number of shares (Thousands) |
70,677 |
|
|
|
|
|
70,677 |
|||||||||||||
|
Basic and diluted EPS* |
|
7.36p |
|
|
|
|
|
8.96p |
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
* At 30 June 2015 there are no dilutive options, so basic and diluted EPS are the same.
|
Year ended |
|
|
Amortisation £000 |
Sale of associate £000 |
Impairment of Goodwill |
Contingent acquisition cost classified as expense |
Put option accounting |
Headline £000 |
|
Revenue |
|
178,928 |
- |
- |
- |
- |
- |
178,928 |
|
Operating profit |
|
14,707 |
1,940 |
(217) |
889 |
134 |
1,125 |
18,578 |
|
Share of results of associates & JV |
|
2,017 |
- |
- |
- |
- |
- |
2,017 |
|
Finance income |
|
299 |
- |
- |
- |
- |
- |
299 |
|
Finance cost |
|
(4,477) |
- |
- |
- |
- |
3,706 |
(771) |
|
Profit before taxation |
|
12,546 |
1,940 |
(217) |
889 |
134 |
4,831 |
20,123 |
|
Taxation |
|
(3,386) |
(541) |
71 |
- |
- |
- |
(3,856) |
|
Profit for the year |
|
9,160 |
1,399 |
(146) |
889 |
134 |
4,831 |
16,267 |
|
Non controlling interests |
(2,686) |
(162) |
- |
(178) |
- |
- |
(3,026) |
|
|
Profit attributable to equity holders of the Group |
6,474 |
1,237 |
(146) |
711 |
134 |
4,831 |
13,241 |
|
|
BASIC EARNINGS PER SHARE |
|
|
|
|
|
|
||
|
Weighted average number of shares (Thousands) |
71,319 |
|
|
|
|
|
71,319 |
|
|
Basic EPS |
|
9.08p |
|
|
|
|
|
18.57p |
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
|
|
|
|
|
||
|
Weighted average number of shares (Thousands) as above |
|
71,319 |
|
|
|
|
|
71,319 |
|
Add |
|
|
|
|
|
|
|
|
|
- Conditional shares |
|
300 |
|
|
|
|
|
300 |
|
Total |
|
71,619 |
|
|
|
|
|
71,619 |
|
Diluted earnings per share |
9.04p |
|
|
|
|
|
18.49p |
|
5. SEGMENTAL INFORMATION
This segmental information is reconciled to the statutory results in Note 4.
|
Six months to |
|
UK £000 |
Europe £000 |
Middle East and Africa |
Asia and Australasia £000 |
Americas £000 |
Total £000 |
|
|
Revenue |
|
40,595 |
12,371 |
4,725 |
22,787 |
19,741 |
100,219 |
|
|
Operating profit excluding Group costs |
|
5,270 |
1,999 |
371 |
2,720 |
3,378 |
13,738 |
|
|
Group costs |
|
(2,188) |
(44) |
- |
(160) |
(19) |
(2,411) |
|
|
Operating profit |
|
3,082 |
1,955 |
371 |
2,560 |
3,359 |
11,327 |
|
|
Share of results of associates |
|
425 |
20 |
- |
25 |
(65) |
405 |
|
|
Financial income and cost |
|
(142) |
(22) |
23 |
38 |
(240) |
(343) |
|
|
Profit before taxation |
|
3,365 |
1,953 |
394 |
2,623 |
3,054 |
11,389 |
|
|
Taxation |
|
(685) |
(661) |
(211) |
(722) |
(33) |
(2,312) |
|
|
Profit for the period |
|
2,680 |
1,292 |
183 |
1,901 |
3,021 |
9,077 |
|
|
Non controlling interests |
|
(404) |
(294) |
(61) |
(326) |
(286) |
(1,371) |
|
|
Profit attributable to equity shareholders |
|
2,276 |
998 |
122 |
1,575 |
2,735 |
7,706 |
|
|
HEADLINE BASIC EPS |
|
|
|
|
|
|
10.71p |
|
|
Non cash costs included in headline operating profit: |
|
|
|
|
|
|||
|
Depreciation & Amortisation of software |
|
(633) |
(86) |
(77) |
(168) |
(255) |
(1,175) |
|
|
Share option charges |
|
- |
- |
- |
- |
- |
- |
|
|
OFFICE LOCATION |
|
London |
Paris Berlin Madrid Geneva Milan Stockholm |
Abu Dhabi Dubai Beirut Istanbul Cape Town Johannesburg Tel Aviv |
Sydney Melbourne New Delhi Kuala Lumpur Hong Kong Shanghai Tokyo Singapore Bangkok |
Los Angeles São Paulo New York San Francisco Chicago |
|
|
|
Six months to |
|
UK £000 |
Europe £000 |
Middle East and Africa |
Asia and Australasia £000 |
Americas £000 |
Total £000 |
|
|
Revenue |
|
41,111 |
10,427 |
4,076 |
21,930 |
10,024 |
87,568 |
|
|
Operating profit excluding Group costs |
|
5,837 |
1,327 |
278 |
2,621 |
1,731 |
11,794 |
|
|
Group costs |
|
(2,281) |
(36) |
- |
(161) |
(21) |
(2,499) |
|
|
Operating profit |
|
3,556 |
1,291 |
278 |
2,460 |
1,710 |
9,295 |
|
|
Share of results of associates |
|
347 |
(6) |
- |
78 |
122 |
541 |
|
|
Financial income and cost |
|
(267) |
(23) |
(2) |
47 |
19 |
(226) |
|
|
Profit before taxation |
|
3,636 |
1,262 |
276 |
2,585 |
1,851 |
9,610 |
|
|
Taxation |
|
(500) |
(387) |
(47) |
(779) |
(320) |
(2,033) |
|
|
Profit for the period |
|
3,136 |
875 |
229 |
1,806 |
1,531 |
7,577 |
|
|
Non controlling interests |
|
(538) |
(185) |
(82) |
(235) |
(207) |
(1,247) |
|
|
Profit attributable to equity shareholders |
|
2,598 |
690 |
147 |
1,571 |
1,324 |
6,330 |
|
|
HEADLINE BASIC EPS |
|
|
|
|
|
|
8.96p |
|
|
Non cash costs included in headline operating profit: |
|
|
|
|
|
|||
|
Depreciation & Amortisation of software |
|
(703) |
(119) |
(94) |
(131) |
(123) |
(1,170) |
|
|
Share option charges |
|
(30) |
- |
- |
- |
- |
(30) |
|
|
OFFICE LOCATION |
|
London |
Paris Berlin Madrid Geneva Milan Stockholm |
Abu Dhabi Beirut Istanbul Cape Town Johannesburg Tel Aviv |
Sydney Melbourne New Delhi Kuala Lumpur Hong Kong Shanghai Tokyo Singapore Bangkok |
Los Angeles São Paulo New York San Francisco
|
|
|
|
Year ended |
|
UK £000 |
Europe £000 |
Middle East and Africa |
Asia and Australasia £000 |
Americas £000 |
Total £000 |
|
|
Revenue |
|
84,159 |
22,745 |
8,549 |
42,103 |
21,372 |
178,928 |
|
|
Operating profit excluding Group costs |
|
11,782 |
3,668 |
1,049 |
4,187 |
3,253 |
23,939 |
|
|
Group costs |
|
(4,970) |
(83) |
- |
(308) |
- |
(5,361) |
|
|
Operating profit |
|
6,812 |
3,585 |
1,049 |
3,879 |
3,253 |
18,578 |
|
|
Share of results of associates |
|
809 |
25 |
- |
325 |
858 |
2,017 |
|
|
Financial income and cost |
|
(527) |
(60) |
(17) |
69 |
63 |
(472) |
|
|
Profit before taxation |
|
7,094 |
3,550 |
1,032 |
4,273 |
4,174 |
20,123 |
|
|
Taxation |
|
(506) |
(1,190) |
(268) |
(1,209) |
(683) |
(3,856) |
|
|
Profit for the year |
|
6,588 |
2,360 |
764 |
3,064 |
3,491 |
16,267 |
|
|
Non controlling interests |
|
(1,169) |
(658) |
(372) |
(477) |
(350) |
(3,026) |
|
|
Profit attributable to equity shareholders |
|
5,419 |
1,702 |
392 |
2,587 |
3,141 |
13,241 |
|
|
HEADLINE BASIC EPS |
|
|
|
|
|
|
18.57p |
|
|
Non cash costs included in operating profit: |
|
|
|
|
|
|||
|
Depreciation & Amortisation of software |
|
(1,275) |
(259) |
(161) |
(260 |
(271) |
(2,226) |
|
|
Share option charges |
|
(5) |
- |
- |
- |
- |
(5) |
|
|
OFFICE LOCATION |
|
London |
Paris Berlin Madrid Geneva Milan Stockholm |
Abu Dhabi Beirut Istanbul Tel Aviv Cape Town Johannesburg
|
Sydney Melbourne New Delhi Kuala Lumpur Hong Kong Beijing Shanghai Tokyo Singapore Bangkok |
Los Angeles São Paulo New York San Francisco |
|
|
6. Finance Income
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Bank interest receivable |
|
92 |
|
|
|
98 |
|
181 |
|
Other interest receivable |
|
77 |
|
|
|
56 |
|
118 |
|
Total finance income |
|
169 |
|
|
|
154 |
|
299 |
|
Fair value adjustments to minority shareholder put option liabilities |
|
3,628 |
|
|
|
- |
|
- |
|
Total |
|
3,797 |
|
|
|
154 |
|
299 |
7. Finance COsts
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
Finance costs |
||||||||
|
|
|
|
|
|
|
|
|
|
|
Bank interest payable |
|
(510) |
|
|
|
(366) |
|
(766) |
|
Other interest payable |
|
(2) |
|
|
|
(14) |
|
(5) |
|
Total interest payable |
|
(512) |
|
|
|
(380) |
|
(771) |
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustments to minority shareholder put option liabilities |
|
- |
|
|
|
(238) |
|
(3,706) |
|
Total |
|
(512) |
|
|
|
(618) |
|
(4,477) |
8. Taxation
Income tax expenses are recognised based on management's estimate of the average annual headline income tax expected for the full financial year.
The estimated headline effective annual tax rate (excluding associates) used for the period to 30 June 2016 is 21.2% (30 June 2015: 28.3%). The decrease in the headline tax rate is due to reduced losses in subsidiaries that we were investing in, and the reduced UK tax rate.
The estimated effective annual tax rate for the period to 30 June 2016 is 17.4% (30 June 2015: 132.1%). The difference between the headline and statutory tax rates is caused by a difference in the profit before tax due to the impact of fair value adjustments to minority shareholder put option liabilities that have no effect on the tax charge.
9. Dividends
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
2014 final dividend 4.87p (2013: 4.24p) |
|
- |
|
|
|
- |
|
3,504 |
|
2015 interim dividend 1.61p (2014: 1.40p) |
|
- |
|
|
|
- |
|
1,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
4,662 |
The directors propose an interim dividend of 1.85p per share (2015: 1.61p per share) payable on
11 November 2016 to shareholders who are on the register at 28 October 2016. This interim dividend, amounting to £1,351k (2015: £1,158k) has not been recognised as a liability in this half-yearly financial report.
10. Cash consumed by acquisitions
|
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
Acquisitions |
|
|
|
|
|
|
|
|
|
|
Initial cash consideration paid |
|
|
(14,476) |
|
|
|
(577) |
|
(346) |
|
Cash and cash equivalents acquired |
|
|
3,443 |
|
|
|
13 |
|
267 |
|
|
|
|
(11,033) |
|
|
|
(564) |
|
(79) |
|
Purchase of associates |
|
|
- |
|
|
|
(3,349) |
|
(3,765) |
|
|
|
|
(11,033) |
|
|
|
(3,914) |
|
(3,844) |
|
|
|
|
|
|
|
|
|
|
|
This information is provided by RNS
Latest directors dealings
- 1 day ago IntegraFin Holding
- 1 day ago Spirent Communications
- 1 day ago CRH (CDI)
- 1 day ago Bezant Resources
- 1 day ago EJF Investments Ltd NPV