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Next Fifteen Comm (NFC)

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Tuesday 28 September, 2021

Next Fifteen Comm

Half-year Report

Half-year Report

Next Fifteen Communications Plc

 

Next Fifteen Communications Group plc
(“Next 15” or the “Group”)
Interim
results for the six months ended 31 July 2021

Strong performance driven by double digit net revenue growth across all four business segments

Next Fifteen Communications Group plc (AIM:NFC), the tech and data-driven growth consultancy, today announces its interim results for the six months ended 31 July 2021.

Financial results for the six months to 31 July 2021 (unaudited)

 

 

Six months ended
31 July 2021
£m

 

Six months ended
31 July 2020
£m

 

Year on year change

Adjusted results 1

 

 

 

 

 

 

Net revenue

 

165.9

 

126.2

 

32%

Operating profit after interest on financial lease liabilities

 

35.0

 

21.2

 

65%

Operating profit margin

 

21.1%

 

16.8%

 

 

Profit before tax

 

35.0

 

20.7

 

69%

Diluted EPS (p)

 

26.3p

 

17.4p

 

51%

Interim dividend per share (p)

 

3.6p

 

-

 

 

 

 

 

 

 

 

 

Statutory results

 

 

 

 

 

 

Revenue

 

208.8

 

153.1

 

36%

Operating profit/(loss)

 

14.9

 

(0.4)

 

 

Profit/(loss) before tax

 

3.1

 

(3.4)

 

 

Net cash inflow from operating activities

 

27.3

 

31.5

 

(13%)

Diluted loss per share (p)

 

(2.9)p

 

(3.6)p

 

19%

1 Adjusted results have been presented to provide additional information that may be useful to shareholders to understand the performance of the Group by facilitating comparability both year on year and with industry peers. Adjusted results are reconciled to statutory results within notes 2 and 3.

H1 Highlights

  • Group net revenue growth of 32% to £165.9m (2020: £126.2m)
  • Organic net revenue growth of 23%
  • Adjusted profit before tax up 69% to £35.0m (2020: £20.7m)
  • Adjusted diluted earnings per share increased by 51% to 26.3p (2020: 17.4p)
  • Statutory revenue growth of 36% to £208.8m (2020: £153.1m)
  • Statutory operating profit of £14.9m, up from a loss of £0.4m
  • Strong balance sheet with net cash of £6.6m (2020: net debt of £5.0m)
  • Successful refinancing, providing up to £100m of debt capacity to fund further acquisitions and capital investment
  • Significant client wins including Boots, Citibank, Diageo and Disney+
  • Acquisitions of Shopper Media Group (“SMG”) and a controlling interest in Blueshirt Capital Advisers (“BCA”), both of which have performed strongly in the first half
  • Acquisition of business and assets of MSI International East Inc (“MSI”) by the US arm of Savanta

Current trading and outlook
The Group’s strong trading has continued into the third quarter of our financial year, and we are currently seeing no sign of a slowdown in client demand. Despite being against a strong comparable period, we anticipate delivering double digit organic revenue growth in our second half. Our new positioning as a growth consultancy is clearly resonating with our clients and we are confident in a positive financial performance for the rest of the year.

The Group’s strong balance sheet provides scope for further investments both in the businesses and in M&A to accelerate our longer term growth.

Commenting on the results, Chair of Next 15, Penny Ladkin-Brand said:
“Our first half results have seen very strong organic revenue and profit growth across all segments and we continue to benefit from the same momentum in our second half. The increasing mix of digital services is providing strong operating leverage although we are also taking the opportunity to accelerate investment in talent and product development to continue to drive longer term growth.”

Next 15 will host an analyst and investor webcast at 12.00 today, Tuesday 28 September 2021.

The registration link can be found here: https://us06web.zoom.us/webinar/register/WN_DbyvuhonThC-2cik4oUWmA

For further information contact:

Next Fifteen Communications Group plc
Tim Dyson, Chief Executive Officer
+1 415 350 2801

Peter Harris, Chief Financial Officer
+44 (0) 20 7908 6444

Numis
Mark Lander, Hugo Rubinstein
+44 (0)20 7260 1000

Berenberg
Ben Wright, Mark Whitmore, Dan Gee-Summons
+44 (0)20 3207 7800

Powerscourt
Elly Wiliamson, Jane Glover
+44 (0)7970 246 725

Notes:

Net revenue
Net revenue is calculated as revenue less direct costs as shown on the Consolidated Income Statement.

Organic net revenue growth
Organic net revenue growth is defined as the net revenue growth at constant currency excluding the impact of acquisitions and disposals in the last 12 months.

Adjusted operating profit margin
Adjusted operating profit margin is calculated based on the operating profit after interest on finance lease liabilities as a percentage of net revenue.

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation.

About Next 15

Next 15 (AIM:NFC) is an AIM-listed tech and data-driven growth consultancy with operations in Europe, North America and across Asia Pacific. The Group has a strong track record of creating and acquiring high-performance businesses. For acquired businesses it offers an opportunity to take advantage of the Group’s global operational infrastructure and centralized resources to accelerate their growth. The Group has long-term customer relationships with many of the world’s leading companies including Google, Amazon, Facebook, Microsoft, IBM, American Express and Procter & Gamble.

The business operates across four segments, each of which describes how we help customers grow in different ways: Customer Insight helps them understand their opportunities and challenges; Customer Engagement optimises their reputation and digital assets; Customer Delivery helps them connect with customers to drive sales; and Business Transformation helps maximize long-term value through corporate positioning, business design and the development of new ventures.

At Next 15, success is underpinned by a people-led approach. Our purpose is to make our customers and our people the best versions of themselves, and our culture is empowering and respectful. We are seeking B Corp status as externally audited recognition of our commitment to our people and the planet alongside performance.

Our goal is to deliver above-market growth. Our revenues have grown by 106% over the last five years and we are aiming to double the size of the business in the next five years. This will be driven by the quality of the businesses, the strength of our customer relationships, the support our model gives them, and strong tech, data and digital tailwinds.

Chair and Chief Executive’s Statement

Next 15, the growth consultancy, is pleased to report its interim results for the six months ended 31 July 2021.

During the period the Group’s net revenues increased by 32% to £165.9m (2020: £126.2m), while adjusted profit before tax increased by 69% to £35.0m (2020: £20.7m). The positive revenue performance aided by the favourable revenue mix towards more higher margin services and improved operational gearing resulted in the Group’s adjusted operating margin increasing to 21.1% (2020: 16.8%). Our minority interest increased to £2.0m (2020: £0.3m) due to exceptional performances from Agent3 and BCA, both of which have significant management minority shareholdings. Our tax rate on adjusted profit increased to 22% (2020: 20%) due to the increased proportion of our profit coming from our US operations. Despite this, our diluted adjusted EPS increased by 51% to 26.3p (2020: 17.4p) driven by the strong performance at an adjusted operating profit level. Continued strong cash generation resulted in our net cash increasing to £6.6m. This is after the recent acquisitions of SMG and BCA, in addition to other earn out and tax related payments, leaving the Group well placed to make further investments and acquisitions.

We are pleased to announce that the Group has returned to paying an interim dividend post its suspension in response to the pandemic. An interim dividend of 3.6p will be paid to shareholders on 26 November 2021. This represents a notional 20% increase on the interim dividend which we would have paid last year.

The performance has been strong across all four areas of the Group with all delivering double digit organic net revenue growth. Business Transformation was our fastest growing segment following the recent acquisitions of Mach49 and BCA, with Delivery also showing exceptional organic growth as our clients reacted to the pandemic by increasing spend on more measurable products and services. Our Customer Insight and Customer Engagement segments also produced encouraging performances. A fuller financial analysis by segment is provided below.

Given the robust performance of the businesses, we are using the period to accelerate investment in productizing a number of areas of the Group and hire additional digital talent. While these investments will have a minor impact on margins this year, they are expected to help drive sustained long-term organic growth.

The Group reported a statutory operating profit of £14.9m compared with £0.4m loss in the prior period, while reported diluted loss per share was 2.9p compared with 3.6p in the prior period.

Segment adjusted performance

 

Customer
Engage
£000

Customer
Delivery
£000

Customer
Insight
£000

Business
Transformation
£000

Head
Office
£000

Total
£000

6 months ended 31 July 2021

 

 

 

 

 

 

Net revenue

91,170

36,295

18,760

19,724

-

165,949

Adjusted operating profit / (loss) after interest on finance lease liabilities

20,363

13,168

3,329

4,621

(6,476)

35,005

Adjusted operating profit margin

22.3%

36.3%

17.7%

23.4%

-

21.1%

Organic net revenue growth

14.6%

48.8%

22.3%

47.4%

-

23.1%

6 months ended 31 July 2020

 

 

 

 

 

 

Net revenue

82,711

22,623

15,299

5,525

-

126,158

Adjusted operating profit / (loss) after interest on finance lease liabilities

16,354

6,716

1,616

1,300

(4,814)

21,172

Adjusted operating profit margin

19.8%

29.7%

10.6%

23.5%

-

16.8%

Organic net revenue (decline)/growth

(11.4%)

12.7%

(8.0%)

2.9%

-

(6.6%)

Our customer engagement businesses are designed to help our customers optimize their brand reputation and build the mission-critical digital assets such as apps and websites that are the window through which much of the world’s commerce is now transacted. Revenue grew by 10% to £91.2m, with operating profit of £20.4m, an increase of 25%, delivered at an improved operating margin of 22.3%. We have had positive performances across the board but MBooth has been the standout performer benefitting from a recovery in revenues from its more consumer-oriented client base and its broad range of service offerings. Archetype and Beyond’s profitability have both risen significantly in the period due to resilient revenue performances and efficiency savings.

Customer delivery businesses are deeply specialised to use creativity, data, and analytics to create the connections with customers to drive sales and other forms of interaction. This link in the chain is increasingly digital. Businesses want to anticipate what their customers want and when they will want it. It is perhaps not surprising that this is a high growth area for our Group. Revenue grew by 60% to £36.3m, with operating profit almost doubling to £13.2m at an improved operating margin of 36.3%. Activate has continued to excel as its technology led client base has continued to see the benefit of using Activate’s ROI driven lead generation services. Both Agent3 and Twogether have seen significant revenue and profit growth from their more integrated B2B client marketing offerings. We acquired Shopper Media Group, the commerce marketing activation business, in April which has made a very positive start as part of the Group.

Our customer insight businesses are set up to help customers understand the opportunities and challenges they face and arm them with the data and insights they need to make the best decisions. Revenue grew by 23% to £18.8m, with operating profit of £3.3m delivered at a much improved operating margin of 17.7%. Our Savanta business showed a strong recovery from a Covid-impacted comparable period. Within the period, Savanta acquired YouthSight, a UK based youth specialist agency, and MSI, a US based healthcare and financial services specialist agency in the period which will strengthen the performance in our second half.

Business transformation is where customers need our help to either redesign their business model or create entirely new ventures. It is also the area where we help our clients to understand how to maximise the value of the organisation. Revenue grew by 257% to £19.7m, with operating profit of £4.6m at an operating margin of 23.4%. Mach49, which we acquired in August last year, has performed exceptionally well as its clients have embraced its corporate venture building expertise and the business has evolved into a more retainer-based business. The Blueshirt Group and BCA, where we increased our shareholding to 51% in May 2021, both benefitted from the revival of the tech IPO market, while Palladium performed strongly as its focus on providing tech oriented due diligence and value creation services to the Private Equity market proved popular.

Reconciliation between statutory and adjusted profit

 

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

 

£000

 

£000

 

 

 

 

 

Profit / (loss) before income tax

 

3,135

 

(3,402)

Unwinding of discount on deferred and contingent consideration and share purchase obligation payable

 

3,343

 

2,182

Change in estimate of future contingent consideration and share purchase obligation payable

 

7,885

 

(366)

One-off charge for employee incentive schemes

 

5,803

 

189

Employment-related acquisition payments

 

5,794

 

1,699

Restructuring costs

 

-

 

2,052

Deal costs

 

242

 

178

Property (write back)/impairment

 

(990)

 

10,910

Amortisation of acquired intangibles

 

8,440

 

7,264

UK furlough grant

 

1,396

 

-

Adjusted profit before income tax

 

35,048

 

20,706

Adjusted financial measures are presented to provide additional information that may be useful to shareholders through facilitating comparability with industry peers and to best represent the underlying performance of the business. Adjusted results are explained and reconciled to statutory results within note 2 and 3.

We had a net charge of £7.9m in relation to our estimate of future contingent consideration, due to stronger trading than expected from Mach49 and Agent3. As a Group, we are moving towards the inclusion of employment conditions for certain acquisition-related payments. As a result, we are required to build up a provision relating to these payments over time and therefore this has led to an accounting charge of £5.8m (2020: £1.7m). We also incurred a one-off £5.8m charge related to new incentive schemes for various brands.

Due to the success in subletting properties that were impaired in the prior year, a £1.0m credit has been incurred. Since the prior year end, we have repaid the furlough monies received from the UK government in full of £1.4m, which was also treated as an exceptional gain in the year to 31 January 2021. We incurred £0.2m of deal costs in relation to acquisitions, and the amortisation of acquired intangibles was £8.4m in the period.

Cashflow
Despite the unwinding of the benefits from government Covid-related schemes and a very strong revenue performance which negatively impacted our working capital, the Group delivered a resilient cashflow performance with the net cash inflow from operating activities of £27.3m compared to £31.5m in the prior period. This resulted in our net cash increasing to £6.6m as at 31 July 2021.

Bank refinancing
The Group completed a refinancing of its bank facilities on 2 September 2021. This involved a new three-year RCF with HSBC and Bank of Ireland for £60m, with two one-year extension options. As part of the arrangement the group has a £40m accordion option to facilitate future acquisitions.

Dividend
We are pleased to announce that the Group has returned to paying an interim dividend post its suspension in response to the pandemic. An interim dividend of 3.6p will be paid to shareholders on 26 November 2021, who hold shares on 29 October 2021. This represents a notional 20% increase on the interim dividend which we would have paid last year in the absence of the pandemic.

Current Trading and Outlook
The Group’s strong trading has continued into the third quarter of our financial year and we are currently seeing no sign of a slowdown in client demand, despite being against a tough comparable period in our second half. Our new positioning as a growth consultancy is clearly resonating with our clients and we are confident of a positive financial performance for the rest of the year.

The Group’s strong balance sheet provides scope for further investments both in the businesses and in M&A to accelerate our long term growth.

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED INCOME STATEMENT

FOR THE SIX-MONTH PERIOD ENDED 31 July 2021

 

 

 

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

12 months ended
31 January 2021
(Audited)

 

 

Note

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

208,756

 

153,100

 

323,668

Direct costs

 

 

 

(42,807)

 

(26,942)

 

(56,782)

Net revenue

 

2

 

165,949

 

126,158

 

266,886

 

 

 

 

 

 

 

 

 

Staff costs

 

 

 

122,419

 

88,836

 

189,530

Depreciation

 

 

 

4,681

 

6,618

 

11,609

Amortisation

 

 

 

9,269

 

7,960

 

16,394

Other operating charges

 

 

 

14,705

 

23,108

 

35,665

Total operating charges

 

 

 

(151,074)

 

(126,522)

 

(253,198)

Operating profit/(loss)

 

2

 

14,875

 

(364)

 

13,688

 

 

 

 

 

 

 

 

 

Finance expense

 

6

 

(12,776)

 

(4,985)

 

(16,884)

Finance income

 

7

 

827

 

1,888

 

1,459

Share of profit from associate

 

 

 

209

 

59

 

431

 

 

 

 

 

 

 

 

 

Profit/(loss) before income tax

 

3

 

3,135

 

(3,402)

 

(1,306)

 

 

 

 

 

 

 

 

 

Income tax (expense)/credit

 

4

 

(3,998)

 

408

 

(2,643)

 

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

(863)

 

(2,994)

 

(3,949)

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

Owners of the parent

 

 

 

(2,844)

 

(3,330)

 

(4,938)

Non-controlling interests

 

 

 

1,981

 

336

 

989

 

 

 

 

(863)

 

(2,994)

 

(3,949)

Loss per share

 

 

 

 

 

 

 

 

Basic (pence)

 

8

 

(3.1)

 

(3.8)

 

(5.5)

Diluted (pence)

 

8

 

(2.9)

 

(3.6)

 

(5.3)

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 July 2021

 

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

12 months ended
31 January 2021
(Audited)

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Loss for the period

 

(863)

 

(2,994)

 

(3,949)

 

 

 

 

 

 

 

Other comprehensive (expense) / income:

 

 

 

 

 

 

Items that may be reclassified into profit or loss

 

 

 

 

 

 

Exchange differences on translating foreign operations

 

(711)

 

473

 

(1,395)

 

 

(711)

 

473

 

(1,395)

Items that will not be reclassified subsequently to profit or loss

 

 

 

 

 

 

Revaluation of investments

 

329

 

5

 

(117)

Total other comprehensive (expense) / income for the period

 

(382)

 

478

 

(1,512)

Total comprehensive expense for the period

 

(1,245)

 

(2,516)

 

(5,461)

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

Owners of the parent

 

(3,226)

 

(2,852)

 

(6,450)

Non-controlling interests

 

1,981

 

336

 

989

 

 

(1,245)

 

(2,516)

 

(5,461)

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

ADJUSTED RESULTS: KEY PERFORMANCE INDICATORS

 

 

 

Six months ended
31 July 2021
(Unaudited)
£000

 

Six months ended
31 July 2020
(Unaudited)
£000

Net revenue

 

165,949

 

126,158

Total operating charges

 

(124,879)

 

(96,916)

Depreciation and amortisation

 

(5,510)

 

(7,314)

Operating profit

 

35,560

 

21,928

Interest on finance lease liabilities

 

(555)

 

(756)

Operating profit after interest on finance lease liabilities

 

35,005

 

21,172

Operating profit margin

 

21.1%

 

16.8%

Net finance expense excluding interest on finance lease liabilities

 

(166)

 

(525)

Share of profits of associate

 

209

 

59

Profit before income tax

 

35,048

 

20,706

Tax

 

(7,739)

 

(4,141)

Retained profit

 

27,309

 

16,565

 

 

 

 

 

Weighted average number of ordinary shares

 

91,992,850

 

88,542,197

Diluted weighted average number of ordinary shares

 

96,443,000

 

93,197,615

 

 

 

 

 

Adjusted earnings per share

 

27.5p

 

18.3p

Diluted adjusted earnings per share

 

26.3p

 

17.4p

 

 

 

 

 

Cash inflow from operating activities

 

27,300

 

31,536

Cash outflow on acquisition related payments

 

(24,733)

 

(18,350)

Net cash/(debt)

 

6,622

 

(4,993)

 

 

 

 

 

Dividend (per share)

 

3.6p

 

-

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED BALANCE SHEET AS AT 31 July 2021

 
   

31 July 2021
(Unaudited)

 

31 July 2020
(Unaudited)

 

31 January 2021
(Audited)

 

 

Note

 

£000

 

£000

 

£000

Assets

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 

8,753

 

10,048

 

8,904

Right-of-use assets

 

 

 

22,967

 

27,623

 

26,008

Intangible assets

 

 

 

183,763

 

157,332

 

163,777

Investment in equity-accounted associate

 

 

 

-

 

123

 

254

Investments in financial assets

 

 

 

1,343

 

1,080

 

955

Deferred tax asset

 

 

 

15,875

 

15,233

 

15,314

Other receivables

 

 

 

823

 

590

 

860

Total non-current assets

 

 

 

233,524

 

212,029

 

216,072

 

 

 

 

 

 

 

 

 

Trade and other receivables

 

 

 

115,612

 

68,634

 

77,530

Cash and cash equivalents

 

9

 

27,342

 

30,191

 

26,831

Corporation tax asset

 

 

 

776

 

1,943

 

1,215

Total current assets

 

 

 

143,730

 

100,768

 

105,576

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

377,254

 

312,797

 

321,648

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Loans and borrowings

 

9

 

-

 

30,184

 

7,810

Deferred tax liabilities

 

 

 

2,729

 

4,932

 

3,229

Lease liabilities

 

 

 

26,456

 

35,147

 

31,812

Other payables

 

 

 

1,482

 

1,193

 

1,576

Provisions

 

 

 

7,455

 

3,949

 

7,140

Contingent consideration

Other contingent liability

 

10

10

 

20,694

3,927

 

20,615

-

 

36,194

-

Share purchase obligation

 

10

 

8,183

 

1,670

 

5,302

Total non-current liabilities

 

 

 

70,926

 

97,690

 

93,063

 

 

 

 

 

 

 

 

 

Loans and borrowings

 

9

 

20,720

 

5,000

 

5,000

Trade and other payables

 

 

 

115,455

 

66,988

 

77,319

Lease liabilities

 

 

 

10,851

 

11,038

 

10,957

Provisions

 

 

 

5,721

 

2,700

 

5,656

Corporation tax liability

 

 

 

1,612

 

2,510

 

604

Deferred consideration

 

10

 

125

 

1,424

 

1,262

Contingent consideration

 

10

 

28,683

 

8,666

 

9,700

Share purchase obligation

 

10

 

1,480

 

1,263

 

1,206

Total current liabilities

 

 

 

184,647

 

99,589

 

111,704

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 

255,573

 

197,279

 

204,767

 

 

 

 

 

 

 

 

 

TOTAL NET ASSETS

 

 

 

121,681

 

115,518

 

116,881

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Share capital

 

 

 

2,317

 

2,265

 

2,274

Share premium reserve

 

 

 

103,952

 

90,838

 

92,408

Foreign currency translation reserve

 

 

 

5,455

 

8,034

 

6,166

Other reserves

 

 

 

(2,065)

 

(2,065)

 

(2,065)

Retained earnings

 

 

 

10,793

 

16,890

 

18,174

Total equity attributable to owners of the parent

 

 

 

120,452

 

115,962

 

116,957

Non-controlling interests

 

 

 

1,229

 

(444)

 

(76)

TOTAL EQUITY

 

 

 

121,681

 

115,518

 

116,881

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 31 July 2021

 

 

 

 

Share
capital

 

Share
premium
reserve

 

Foreign
currency
translation
reserve

 

Other
reserves1

 

Retained
earnings

 

Equity
attributable
to owners of
the Company

 

Non-
controlling
interests

 

Total
equity

 

 

£000

 

£000

 

£000

 

£000

 

£000

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 January 2020 (audited)

 

2,163

 

76,019

 

7,561

 

(2,065)

 

29,618

 

113,296

 

(585)

 

112,711

(Loss) / profit for the period

 

-

 

-

 

-

 

-

 

(3,330)

 

(3,330)

 

336

 

(2,994)

Other comprehensive income for the period

 

-

 

-

 

473

 

-

 

5

 

478

 

-

 

478

Total comprehensive income / (expense) for the period

 

-

 

-

 

473

 

-

 

(3,325)

 

(2,852)

 

336

 

(2,516)

Shares issued on satisfaction of vested share options

 

64

 

9,253

 

-

 

-

 

(9,317)

 

-

 

-

 

-

Shares issued on acquisitions

 

38

 

5,566

 

-

 

-

 

-

 

5,604

 

-

 

5,604

Movement in relation to share-based payments

 

 

-

 

 

-

 

 

-

 

 

-

 

 

273

 

 

273

 

 

-

 

 

273

 

Movement on reserves for non-controlling interests

 

-

 

-

 

-

 

-

 

(359)

 

(359)

 

359

 

-

Non-controlling interest dividend

 

-

 

-

 

-

 

-

 

-

 

-

 

(554)

 

(554)

At 31 July 2020 (unaudited)

 

2,265

 

90,838

 

8,034

 

(2,065)

 

16,890

 

115,962

 

(444)

 

115,518

(Loss) / profit for the period

 

-

 

-

 

-

 

-

 

(1,608)

 

(1,608)

 

653

 

(955)

Other comprehensive expense for the period

 

-

 

-

 

(1,868)

 

-

 

(122)

 

(1,990)

 

-

 

(1,990)

Total comprehensive (expense) / income for the period

 

-

 

-

 

(1,868)

 

-

 

(1,730)

 

(3,598)

 

653

 

(2,945)

Shares issued on satisfaction of vested share options

 

5

 

909

 

-

 

-

 

(914)

 

-

 

-

 

-

Shares issued on acquisitions

 

4

 

661

 

-

 

-

 

-

 

665

 

-

 

665

Movement in relation to share-based payments

 

-

 

-

 

-

 

-

 

3,775

 

3,775

 

-

 

3,775

Movement on reserves for non-controlling interests

 

-

 

-

 

-

 

-

 

153

 

153

 

(153)

 

-

Non-controlling interest dividend

 

-

 

-

 

-

 

-

 

-

 

-

 

(132)

 

(132)

At 31 January 2021 (audited)

 

2,274

 

92,408

 

6,166

 

(2,065)

 

18,174

 

116,957

 

(76)

 

116,881

(Loss) / profit for the period

 

-

 

-

 

-

 

-

 

(2,844)

 

(2,844)

 

1,981

 

(863)

Other comprehensive (expense) / income for the period

 

-

 

-

 

(711)

 

-

 

329

 

(382)

 

-

 

(382)

Total comprehensive (expense) / income for the period

 

-

 

-

 

(711)

 

-

 

(2,515)

 

(3,226)

 

1,981

 

(1,245)

Shares issued on satisfaction of vested share options

 

20

 

4,763

 

-

 

-

 

(4,783)

 

-

 

-

 

-

Shares issued on acquisitions

 

23

 

6,781

 

-

 

-

 

-

 

6,804

 

-

 

6,804

Movement in relation to share-based payments

 

-

 

-

 

-

 

-

 

6,346

 

6,346

 

-

 

6,346

Dividends to owners of the parent

 

-

 

-

 

-

 

-

 

(6,491)

 

(6,491)

 

-

 

(6,491)

Movement on reserves for non-controlling interests

 

-

 

-

 

-

 

-

 

62

 

62

 

(62)

 

-

Non-controlling interest purchased in the period

 

-

 

-

 

-

 

-

 

-

 

-

 

564

 

564

Non-controlling interest dividend

 

-

 

-

 

-

 

-

 

-

 

-

 

(1,178)

 

(1,178)

At 31 July 2021 (unaudited)

 

2,317

 

103,952

 

5,455

 

(2,065)

 

10,793

 

120,452

 

1,229

 

121,681

1 Other reserves include ESOP reserve, hedging reserve, share purchase reserve and merger reserve.

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE SIX MONTH PERIOD ENDED 31 July 2021

 

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

Twelve months ended
31 January 2021
(Audited)

 

 

£000

 

£000

 

£000

Cash flows from operating activities

 

 

 

 

 

 

Loss for the period

 

(863)

 

(2,994)

 

(3,949)

Adjustments for:

 

 

 

 

 

 

Depreciation

 

4,681

 

6,618

 

11,609

Amortisation

 

9,269

 

7,960

 

16,394

Finance expense

 

12,776

 

4,985

 

16,884

Finance income

 

(827)

 

(1,888)

 

(1,459)

Share of profit from equity accounted associate

 

(209)

 

(59)

 

(431)

Impairment of RoU assets

 

-

 

7,664

 

8,503

Loss on sale/impairment of property, plant and equipment

 

741

 

5,753

 

6,885

Gain on exit of finance lease

 

(1,196)

 

(2,327)

 

(2,327)

Income tax expense

 

3,998

 

(408)

 

2,643

Employment linked acquisition provision charge

 

5,794

 

1,699

 

8,041

IFRS 2 charges

 

7,411

 

502

 

3,587

 

 

 

 

 

 

 

Net cash inflow from operating activities before changes in working capital

 

41,575

 

27,505

 

66,380

 

 

 

 

 

 

 

Change in trade and other receivables

 

(25,659)

 

1,607

 

(5,692)

Change in trade and other payables

 

16,506

 

6,962

 

12,942

Change in other liabilities

 

(53)

 

(1,524)

 

(697)

 

 

(9,206)

 

7,045

 

6,553

 

 

 

 

 

 

 

Net cash generated from operations before tax and interest outflows

 

32,369

 

34,550

 

72,933

 

 

 

 

 

 

 

Income taxes paid

 

(5,069)

 

(3,014)

 

(8,423)

 

 

 

 

 

 

 

Net cash inflow from operating activities

 

27,300

 

31,536

 

64,510

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Acquisition of subsidiaries and trade and assets, net of cash acquired

 

(11,477)

 

(4,237)

 

(8,097)

Payment of contingent and deferred consideration

 

(13,256)

 

(14,113)

 

(15,539)

Purchase of investment

 

(60)

 

-

 

-

Acquisition of property, plant and equipment

 

(1,444)

 

(1,028)

 

(1,998)

Proceeds on disposal of property, plant and equipment

 

2

 

2

 

4

Acquisition of intangible assets

 

(1,505)

 

(1,059)

 

(2,109)

Net movement in long-term cash deposits

 

(39)

 

120

 

(82)

Income from finance lease receivables

 

597

 

434

 

780

Interest received

 

22

 

33

 

47

 

 

 

 

 

 

 

Net cash outflow from investing activities

 

(27,160)

 

(19,848)

 

(26,994)

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED STATEMENT OF CASH FLOW (Continued)

FOR THE SIX MONTH PERIOD ENDED 31 July 2021

 

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

Twelve months ended
31 January 2021
(Audited)

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Repayment of lease liabilities

 

(5,846)

 

(6,235)

 

(12,647)

Net movement in bank borrowings

 

7,945

 

(3,000)

 

(24,912)

Interest on borrowings paid

 

(219)

 

(578)

 

(881)

Dividend and profit share paid to non-controlling interest partners

 

(1,178)

 

(554)

 

(686)

 

 

 

 

 

 

 

Net cash inflow/(outflow) from financing activities

 

702

 

(10,367)

 

(39,126)

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

842

 

1,321

 

(1,610)

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of the period

 

26,831

 

28,661

 

28,661

Exchange (loss)/gains on cash held

 

(331)

 

209

 

(220)

 

 

 

 

 

 

 

Cash and cash equivalents at end of the period

 

27,342

 

30,191

 

26,831

NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 July 2021

1) BASIS OF PREPARATION

The unaudited consolidated interim financial statements represent a condensed set of financial information and have been prepared using the recognition and measurement principles of International Accounting Standards, and in accordance with IAS 34, Interim Financial Reporting. The principal accounting policies used in preparing the results are those the Group has applied in its financial statements for the year ended 31 January 2021.

The comparative financial information for the year ended 31 January 2021 has been derived from the audited statutory financial statements for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditor’s report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

2) SEGMENT INFORMATION

Measurement of operating segment profit

The Board of Directors assesses the performance of the operating segments based on a measure of adjusted operating profit before intercompany recharges, which reflects the internal reporting measure used by the Board of Directors. This measurement basis excludes the effects of certain acquisition-related costs and goodwill impairment charges. Other information provided to them is measured in a manner consistent with that in the financial statements. Head office costs relate to Group costs before allocation of intercompany charges to the operating segments. Intersegment transactions have not been separately disclosed as they are not material. The Board of Directors does not review the assets and liabilities of the Group on a segmental basis and therefore this is not separately disclosed.

The Group has previously reported its results split into three divisions: Brand Marketing, Data and Insights and Creative Technology. From 1 February 2021, the Group structure has been enhanced, moving from three divisions to four: Customer Insight, Customer Engagement, Customer Delivery and Business Transformation.

 

 

Customer
Engage
£000

 

Customer
Delivery
£000

 

Customer
Insight
£000

 

Business
Transfor
mation
£000

 

Head
Office
£000

 

Total
£000

6 months ended 31 July 2021 (Unaudited)

     

 

 

 

 

 

 

 

 

 

Net revenue

 

91,170

 

36,295

 

18,760

 

19,724

 

-

 

165,949

Adjusted operating profit / (loss) after interest on finance lease liabilities

 

20,363

 

13,168

 

3,329

 

4,621

 

(6,476)

 

35,005

Adjusted operating profit margin 1

 

22.3%

 

36.3%

 

17.7%

 

23.4%

 

-

 

21.1%

Organic net revenue growth

 

14.6%

 

48.8%

 

22.3%

 

47.4%

 

-

 

23.1%

6 months ended 31 July 2020 (Unaudited)

     

 

 

 

 

 

 

 

 

 

Net revenue

 

82,711

 

22,623

 

15,299

 

5,525

 

-

 

126,158

Adjusted operating profit / (loss) after interest on finance lease liabilities

 

16,354

 

6,716

 

1,616

 

1,300

 

(4,814)

 

21,172

Adjusted operating profit margin1

 

19.8%

 

29.7%

 

10.6%

 

23.5%

 

-

 

16.8%

Organic net revenue growth

 

(11.4%)

 

12.7%

 

(8.0%)

 

2.9%

 

-

 

(6.6%)

Year ended 31 January 2021 (Unaudited)

     

 

 

 

 

 

 

 

 

 

Net revenue

 

166,534

 

49,557

 

33,073

 

17,722

 

-

 

266,886

Adjusted operating profit / (loss) after interest on finance lease liabilities

 

36,866

 

15,232

 

4,876

 

3,906

 

(11,394)

 

49,486

Adjusted operating profit margin1

 

22.1%

 

30.7%

 

14.7%

 

22.0%

 

-

 

18.5%

Organic net revenue growth

 

(9.2%)

 

17.2%

 

(3.6%)

 

9.0%

 

-

 

(3.4%)

1 Adjusted operating profit margin is calculated based on the operating profit after interest on finance lease liabilities as a percentage of net revenue.

NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2021

2) SEGMENT INFORMATION (continued)

 

 

UK

 

Europe
and Africa

 

US

 

Asia
Pacific

 

Head
Office

 

Total

 

 

£000

 

£000

 

£000

 

£000

 

£000

 

£000

Six months ended 31 July 2021 (Unaudited)

     

 

 

 

 

 

 

 

 

 

Net revenue

 

64,626

 

4,713

 

89,302

 

7,308

 

-

 

165,949

Adjusted operating profit / (loss) after interest on finance lease liabilities

 

14,309

 

1,050

 

25,210

 

912

 

(6,476)

 

35,005

Adjusted operating profit margin 1

 

22.1%

 

22.3%

 

28.2%

 

12.5%

 

-

 

21.1%

Organic revenue growth

 

19.7%

 

13.6%

 

26.9%

 

13.3%

 

-

 

23.1%

Six months ended 31 July 2020 (Unaudited)

     

 

 

 

 

 

 

 

 

 

Net revenue

 

46,773

 

4,228

 

68,657

 

6,500

 

-

 

126,158

Adjusted operating profit / (loss) after interest on finance lease liabilities

 

8,955

 

868

 

15,011

 

1,152

 

(4,814)

 

21,172

Adjusted operating profit margin1

 

19.1%

 

20.5%

 

21.9%

 

17.7%

 

-

 

16.8%

Organic revenue growth

 

(11.9%)

 

(3.3%)

 

(2.6%)

 

(6.2%)

 

-

 

(6.6%)

Twelve months ended 31 January 2021 (Audited)

     

 

 

 

 

 

 

 

 

 

Net revenue

 

106,247

 

8,610

 

138,383

 

13,646

 

-

 

266,886

Adjusted operating profit / (loss) after interest on lease liabilities

 

22,402

 

1,997

 

34,150

 

2,331

 

(11,394)

 

49,486

Adjusted operating profit margin1

 

21.1%

 

23.2%

 

24.7%

 

17.1%

 

-

 

18.5%

Organic net revenue decline

 

(6.4%)

 

(4.7%)

 

(0.8%)

 

(5.5%)

 

-

 

(3.4%)

1 Adjusted operating profit margin is calculated based on the operating profit after interest on finance lease liabilities as a percentage of net revenue.

A reconciliation of segment adjusted operating profit to operating profit is provided as follows:

 

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

Twelve months ended
31 January 2021
(Audited)

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Segment adjusted operating profit after interest on finance lease liabilities

 

35,005

 

21,172

 

49,486

Interest on finance lease liabilities

 

555

 

756

 

1,408

Segment adjusted operating profit

 

35,560

 

21,928

 

50,894

Amortisation of acquired intangibles (note 3)

 

(8,440)

 

(7,264)

 

(15,002)

One-off charge for employee incentive schemes (note 3)

 

(5,803)

 

(189)

 

(2,424)

Employment-related acquisition payments (note 3)

 

(5,794)

 

(1,699)

 

(8,041)

Restructuring costs (note 3)

 

-

 

(2,052)

 

(2,746)

Property write back/(impairment) (note 3)

 

990

 

(10,910)

 

(10,018)

UK furlough grant (note 3)

 

(1,396)

 

-

 

1,396

Deal costs (note 3)

 

(242)

 

(178)

 

(371)

Operating profit/(loss)

 

14,875

 

(364)

 

13,688

NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2021

3) RECONCILIATION OF ADJUSTED FINANCIAL MEASURES

 

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

Twelve months ended
31 January 2021
(Audited)

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Profit/(loss) before income tax

 

3,135

 

(3,402)

 

(1,306)

Unwinding of discount on deferred and contingent consideration and share purchase obligation payable1

 

3,343

 

2,182

 

5,153

Change in estimate of future contingent consideration and share purchase obligation payable1

 

7,885

 

(366)

 

8,064

One-off charge for employee incentive schemes2

 

5,803

 

189

 

2,424

Employment-related acquisition payments3

 

5,794

 

1,699

 

8,041

Restructuring costs4

 

-

 

2,052

 

2,746

Deal costs5

 

242

 

178

 

371

Property (write back)/impairment 6

 

(990)

 

10,910

 

10,018

UK furlough grant7

 

1,396

 

-

 

(1,396)

Amortisation of acquired intangibles8

 

8,440

 

7,264

 

15,002

Adjusted profit before income tax

 

35,048

 

20,706

 

49,117

Adjusted profit before income tax has been presented to provide additional information which may be useful to the reader, and it is a measure of performance used in the calculation of the adjusted earnings per share. This measure is considered to best represent the underlying performance of the business and so it is used for the vesting of employee performance shares. The adjusting items are consistent with those in the prior period.

1 The Group adjusts for the remeasurement of the acquisition-related liabilities within the adjusted performance measures in order to aid comparability of the Group’s results year on year as the charge/credit from remeasurement can vary significantly depending on the underlying brand’s performance. It is non-cash and its directional impact to the income statement is opposite to the brand’s performance driving the valuations. The unwinding of discount on these liabilities is also excluded from underlying performance on the basis that it is non-cash and the balance is driven by the Group’s assessment of the time value of money and this exclusion ensures comparability.

2 This charge relates to transactions whereby a restricted grant of brand equity was given to key management in Brandwidth Marketing Limited and Publitek Limited (total of £0.6m) (2020: Savanta Group Limited) at nil cost which holds value in the form of access to future profit distributions as well as any future sale value under the performance-related mechanism set out in the share sale agreement. The remaining £5.2m of the charge relates to an additional new incentive scheme for the sellers of Activate. This value is recognised as a one-off charge in the income statement in the year of grant as the agreements do not include service requirements, thus the cost accounting is not aligned with the timing of the anticipated benefit of the incentive, namely the growth of the relevant brands.

3 This charge relates to payments linked to the continuing employment of the sellers which is being recognised over the required period of employment. Although these costs are not exceptional or non-recurring, the Group determined they should be excluded from the underlying performance as the costs solely relate to acquiring the business. The sellers of the business are typically paid market salaries and bonuses in addition to these acquisition-related payments and therefore the Group determines these costs solely relate to acquiring the business. Adjusting for these within the Group’s adjusted performance measures gives a better reflection of the Group’s profitability and enhances comparability year-on-year.

4 In the prior period the Group incurred restructuring costs which primarily related to Covid-19 redundancy costs taken in the period in response to the pandemic. These costs related to specific transformational events and they did not relate to underlying trading of the relevant brands.

5 This charge relates to third party professional fees incurred during acquisitions.

6 In the current period the Group has recognised gains relating to the reorganisation of the property space across the Group. The majority of the credit relates to right-of-use assets which were impaired in the prior year and have subsequently been sublet or assigned ahead of expectation. The Group has adjusted for this credit to align to the treatment of the impairment in the prior year and because the additional one-off credit does not relate to the underlying trading of the business and therefore added back to aid comparability.

7 As a result of Covid-19, a number of the UK agencies received government support from the UK furlough scheme in the prior period. During the current year the Group has repaid all amounts received from the UK government. As a result of the receipt and repayment being accounted for in two separate years, the amounts are added back to aid comparability of the Group’s profitability year on year.

8 In line with its peer group, the Group adds back amortisation of acquired intangibles. Judgement is applied in the allocation of the purchase price between intangibles and goodwill, and in determining the useful economic lives of the acquired intangibles. The judgements made by the Group are inevitably different to those made by our peers and as such amortisation of acquired intangibles been added back to aid comparability.

NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2021

4) TAXATION

The tax charge for the six months ended 31 July 2021 is based on the Group’s estimated effective tax rate for the year ending 31 January 2022 of 22% (six months ended 31 July 2020 of 20%).

5) DIVIDENDS

An interim dividend of 3.6p (six months ended 31 July 2020: nil) per ordinary share will be paid on 26 November 2021 to shareholders listed on the register of members on 29 October 2021. Shares will go ex-dividend on 28 October 2021. The last date for DRIP elections to be returned to the registrar is 5 November 2021.

6) FINANCE EXPENSE

 

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

Twelve months ended
31 January 2021
(Audited)

 

 

£000

 

£000

 

£000

Financial liabilities at amortised cost

 

 

 

 

 

 

Bank interest payable

 

217

 

575

 

877

Interest on finance lease liabilities

 

555

 

756

 

1,408

Financial liabilities at fair value through profit and loss

 

 

 

 

 

 

Unwinding of discount on future deferred and contingent consideration and share purchase obligation payable1

 

3,343

 

2,182

 

5,153

Change in estimate of future contingent consideration and share purchase obligation payable1

 

 

8,659

 

 

1,470

 

9,442

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

Other interest payable

 

2

 

2

 

4

Finance expense

 

12,776

 

4,985

 

16,884

1These items are adjusted for in calculating the adjusted net finance expense.

7) FINANCE INCOME

 

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

Twelve months ended
31 January 2021
(Audited)

 

 

£000

 

£000

 

£000

Financial assets at amortised cost

 

 

 

 

 

 

Bank interest receivable

 

14

 

19

 

43

Finance lease interest receivable

 

31

 

20

 

34

Financial assets at fair value through profit and loss

 

 

 

 

 

 

Change in estimate of future contingent consideration and share purchase obligation payable1

 

774

 

1,836

 

1,378

Other interest receivable

 

8

 

13

 

4

Finance income

 

827

 

1,888

 

1,459

1These items are adjusted for in calculating the adjusted net finance expense.

NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2021

8) EARNINGS PER SHARE

 

 

Six months ended
31 July 2021
(Unaudited)

 

Six months ended
31 July 2020
(Unaudited)

 

Twelve months ended
31 January 2021
(Audited)

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Loss attributable to ordinary shareholders

 

(2,844)

 

(3,330)

 

(4,938)

Unwinding of discount on future deferred and contingent consideration and share purchase obligation payable

 

3,343

 

2,182

 

5,153

Change in estimate of future contingent consideration and share purchase obligation payable

 

7,885

 

(366)

 

8,064

One-off charge for employee incentive schemes

 

5,803

 

189

 

2,424

Restructuring costs

 

-

 

2,052

 

2,746

Property (write back)/impairment

 

(990)

 

10,910

 

10,018

UK Furlough grant

1,396

-

(1,396)

Employment-related acquisition payments

 

5,794

 

1,699

 

8,041

Amortisation of acquired intangibles

 

8,440

 

7,264

 

15,002

Deal costs

 

242

 

178

 

371

Tax effect of adjusting items above

 

(3,741)

 

(4,549)

 

(7,280)

Adjusted earnings attributable to ordinary shareholders

 

25,328

 

16,229

 

38,205

 

 

 

 

 

 

 

 

 

Number

 

Number

 

Number

 

 

 

 

 

 

 

Weighted average number of ordinary shares

 

91,992,850

 

88,542,197

 

89,382,909

Dilutive LTIP & Options shares

 

1,945,908

 

609,071

 

820,997

Dilutive Growth Deal shares

 

947,547

 

1,711,629

 

1,552,359

Other potentially issuable shares

 

1,556,695

 

2,334,718

 

2,062,239

 

 

 

 

 

 

 

Diluted weighted average number of ordinary shares

 

96,443,000

 

93,197,615

 

93,818,504

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per share

 

(3.1)p

 

(3.8)p

 

(5.5)p

Diluted loss per share

 

(2.9)p

 

(3.6)p

 

(5.3)p

Adjusted earnings per share

 

27.5p

 

18.3p

 

42.7p

Diluted adjusted earnings per share

 

26.3p

 

17.4p

 

40.7p

Adjusted and diluted adjusted earnings per share have been presented to provide additional information which may be useful to shareholders through facilitating comparability with industry peers. The adjusted earnings per share is the performance measure used for the vesting of employee performance shares.

NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2021

9) NET DEBT

The HSBC Bank revolving credit facility of £40m expires in July 2022 and therefore the outstanding balance has been classified in current borrowings. The £20m loan drawn from HSBC is repayable in annual instalments and has £5m left to be repaid in December 2021. The group completed a refinancing of its bank facilities in September 2021 to include a new three year RCF for £60m, refer to note 11 for details.

 

31 July 2021
(Unaudited)

 

31 July 2020
(Unaudited)

 

31 January 2021
(Audited)

 

£000

 

£000

 

£000

 

     

 

 

 

Cash and cash equivalents

 

27,342

 

30,191

 

26,831

Less: total loans and borrowings

 

(20,720)

 

(35,184)

 

(12,810)

Net cash/(debt)

 

6,622

 

(4,993)

 

14,021

Share purchase obligation

 

(9,663)

 

(2,933)

 

(6,508)

Contingent consideration

 

(49,377)

 

(29,281)

 

(45,894)

Deferred consideration

 

(125)

 

(1,424)

 

(1,262)

Other contingent liability

 

(3,927)

 

-

 

-

 

 

(56,470)

 

(38,631)

 

(39,643)

10) OTHER FINANCIAL LIABILITIES

 

 

Deferred
consideration

 

Contingent
consideration

 

Other
Contingent

Liability

 

Share
purchase
obligation

 

 

£000

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

 

 

At 31 January 2020 (Audited)

 

2,715

 

42,181

 

-

 

3,367

Arising during the period

 

-

 

417

 

-

 

-

Reclassification

 

2,405

 

(2,405)

 

-

 

-

Change in estimate

 

-

 

258

 

-

 

(624)

Exchange differences

 

-

 

3

 

-

 

7

Utilised

 

(3,811)

 

(13,057)

 

-

 

-

Unwinding of discount

 

115

 

1,884

 

-

 

183

At 31 July 2020 (Unaudited)

 

1,424

 

29,281

 

-

 

2,933

Arising during the period

 

-

 

12,468

 

-

 

-

Reclassification

 

-

 

-

 

-

 

-

Change in estimate

 

-

 

5,074

 

-

 

3,356

Exchange difference

 

-

 

(1,982)

 

-

 

(57)

Utilised

 

(226)

 

(1,578)

 

-

 

-

Unwinding of discount

 

64

 

2,631

 

-

 

276

At 31 January 2021 (Audited)

 

1,262

 

45,894

 

-

 

6,508

Arising during the period

 

-

 

5,626

 

3,888

 

-

Reclassification

 

125

 

(125)

 

-

 

-

Change in estimate

 

-

 

5,148

 

-

 

2,737

Exchange differences

 

-

 

(521)

 

-

 

(16)

Utilised

 

(1,301)

 

(9,476)

 

-

 

-

Unwinding of discount

 

39

 

2,831

 

39

 

434

At 31 July 2021 (Unaudited)

 

125

 

49,377

 

3,927

 

9,663

Current

 

125

 

28,683

 

-

 

1,480

Non-current

 

-

 

20,694

 

3,927

 

8,183

NOTES TO THE INTERIM RESULTS (Continued)
FOR THE SIX MONTHS ENDED 31 July 2021

11) EVENTS AFTER THE BALANCE SHEET DATE

Acquisition of MSI
On 1 August 2021, the US arm of the Group’s largest customer insight business, Savanta, acquired the business and assets of MSI International East Inc (“MSI”), a New Jersey based market research agency. This is a further step in the ambition for half of Savanta’s revenues to be delivered from its US arm. MSI’s clients include a variety of Fortune 500 companies across the Healthcare, Pharmaceutical, Investment, Insurance, IT/Security and Retirement sectors.

Bank Refinancing
The Group completed a refinancing of its bank facilities on 2 September 2021. This involved a new three year RCF with HSBC and Bank of Ireland for £60m, with two one year extension options. As part of the arrangement the Group has a £40m accordion option to facilitate future acquisitions.


a d v e r t i s e m e n t