We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Management Consulting Group Plc | LSE:MMC | London | Ordinary Share | GB0001979029 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.23 | 0.16 | 0.30 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMMMC
RNS Number : 3505O
Management Consulting Group PLC
18 August 2017
18 August 2017
The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via a regulatory information service, this inside information is now considered to be in the public domain.
Management Consulting Group PLC
Interim Results
Management Consulting Group PLC ("MCG" or the "Group"), the global professional services group, today announces its results for the half-year ended 30 June 2017.
Key points
-- Reported revenues of GBP21.6m - up 11% on H2 2016 -- Underlying* operating loss of GBP4.6m (H2 2016: loss GBP6.9m) -- Retained loss for the half-year of GBP6.0m (H2 2016: GBP38.6m including impairment charge) -- Cash balances at 30 June 2017 of GBP28.4m (31 December 2016: GBP38.1m) -- Proudfoot new structure and operating model now in place
Nick Stagg, Chief Executive, commented:
"The newly re-branded Proudfoot has fundamentally changed its structure and operating model. This provides a leaner, more agile, flexible and focused business. Revenue for the first half of 2017 was 11% higher than the preceding six month period. This is despite a decline in the Americas region where the new operating model was implemented late in the half. Although progress this period has been slower than expected, Proudfoot's new focus and offerings make it well placed to create value for its clients and drive revenues to the required levels for profitability. We have successfully continued the process of reducing our costs and closing out the divestment activity from the last two years."
For further information please contact:
Hot Features
Premium
Chairman and Chief
Nick Stagg Executive 020 7710 5000
Michael Chief Financial
Comras Officer 020 7710 5000
Notes to Editors
Management Consulting Group PLC (MMC.L) provides professional services across a wide range of industries and sectors. For further information, visit www.mcgplc.com.
* refer Note 2 for definition
Chairman and Chief Executive's Statement
I am pleased to report that Proudfoot, MCGs continuing business, has made progress in the execution of its strategy, resulting in a stronger performance in the EMEAA region (Europe, Middle East, Africa, Asia) with increased revenue and reduced losses for the first half. While the Americas' operations has underperformed, new management is now in place and the key elements of our global strategy, including greater client specialisation, are now being implemented. As a result, we expect the Americas to benefit from these actions in the same way as EMEAA.
While the above developments are encouraging, the Group financial results as a whole for the six months ended 30 June 2017 remain unsatisfactory, driven by the continued weak performance in North America. Revenue for the first half of 2017 was GBP21.6m, 11% higher than the preceding six month period (H2 2016: GBP19.5m), but 16% lower than the same period in 2016 (H1 2016: GBP25.7m). The Group reported an underlying operating loss of GBP4.6m in the first half of 2017 compared with losses of GBP6.9m for the second half of 2016 and GBP1.9m for the first half of 2016. Overall, these results are an improvement on the second half of 2016 but we expected to be further along the road to recovery in North America.
Revenues for the first six months of 2017 from the EMEAA region saw an increase of 32% over the second half of 2016 and 36% over the first half of 2016. Similar progress was not realised in our Americas markets where revenue of GBP9.9m represents a decline from GBP10.6m in the second half of 2016 and from GBP17.2m in the first half of 2016. However, following management changes and the adoption of processes from EMEAA operations late in the half, sales activity in North America increased although it will take time for results to fully flow through.
While we continue to leverage our 75 year track record in the delivery of significant financial benefits to our clients, we have made large-scale changes in the nature of the solutions we now deliver while still being true to our purpose for clients; achieving "tomorrow's results, today". Proudfoot traditionally implements operational improvement, resulting in enterprise-wide, cultural transformation. This remains our focus but we have shifted our business model into our two core capabilities of Proudfoot Analytics and Proudfoot People Solutions. Additionally, significant improvement to our value proposition is the focus on delivering long term sustainable change to our client's workforce. This reinforces our desire to achieve powerful results for our clients through their workforce, yet also enabling them to continue achieving those results long after we depart and without the continued use of our support; ensuring they can 'do-it-themselves'.
As the Board reported in March, Proudfoot requires management focus and further change and so I am pleased to report that the newly re-branded Proudfoot, has now fundamentally changed its structure and operating model and added new offerings including Proudfoot Digital Ready which enables management to lead digital change through their people, processes and decision making. This has driven the early successes in EMEAA and provides a leaner, more agile, flexible and focused business together with deeper sector focus and knowledge to which clients have responded favourably. As an example, we continue to merge our selling activities with our delivery capabilities, delivering greater client satisfaction with the added benefit of streamlining our cost base. Structurally, we have removed several layers of management across the Proudfoot business, thereby focusing on bringing our most senior expertise directly into our client teams. Market based managing directors now own our client relationships from sales to delivery.
These teams report to a newly appointed Chief Executive of Proudfoot, Pam Hackett, who has a 30 year history with Proudfoot. While she continues to lead the execution of our strategy in EMEAA, Pam is now focused on delivering the same level and speed of change in North America.
The Board continues to align the cost base to the smaller group business and to simplify the management structure. To date, annualised cost savings of approximately GBP4.7m have been secured and actions are in hand which will deliver further savings in the second half and beyond.
As previously announced, the businesses sold last year had transitional service agreements in place whereby the Group continued to provide some back-office functions for periods ceasing in the second half of 2017. These arrangements have been positively managed to reduce risk and cost to the Group and allowed for a smooth transition to their new owners.
We announced on 31 May the appointment of Michael Comras to the Board as Chief Financial Officer. His skill and dedication is proving a great asset to the Board.
Proudfoot is a long-standing business and, with its new focus and offerings, is well placed to create value for its clients. While the indicators and changes in the first half are positive, current revenues are not yet at levels to restore the business to profitability and so this remains the focus of the Board and Proudfoot management. The Group continues to have a strong financial position with cash balances of GBP28.4m at 30 June 2017. Although progress this period has been slower than expected we are committed to restoring the business to growth and profitability and to deliver value to MCG shareholders.
Nick Stagg
Chairman and Chief Executive
17 August 2017
Group Financial Review
Following the disposals in 2016 of all our Kurt Salmon operations, the continuing operations of the Group comprise our Proudfoot business. The results of the discontinued businesses of Kurt Salmon are relevant only for the 2016 loss from discontinued operations comparative in the Condensed Group Statement of Profit and Loss.
Proudfoot's reported revenue for the first half of 2017 was GBP21.6m, 11% higher than the preceding six month period (H2 2016: 19.5m), but 16% lower than the same period in 2016 (H1 2016: GBP25.7m). The Group reported an underlying operating loss of GBP4.6m in the first half of 2017 compared with losses of GBP6.9m for the second half of 2016 and GBP1.9m for the first half of 2016.
Proudfoot operates as a single business. It generates revenues and deploys resources globally. The performance in geographic areas differed in the period. While revenues in the EMEAA region as a whole maintained the progress made in 2016 helped by new management and processes to provide improved opportunities to deliver an increase of 32% over the second half of 2016 and 36% over the first half of 2016, similar progress was not realised in the Americas where revenue of GBP9.9m represented a decline from GBP10.6m in the second half of 2016 and GBP17.2m in the first half of 2016. However, following management changes and the adoption late in the half of processes from EMEAA operations, sales activity in North America increased although it will take time for results to fully flow through.
Given the changes to the management structure of Proudfoot introduced in 2017 and taking account of lower income levels in recent periods, the Group's cost base has been reviewed and resulted in a reduction of total employees during the period from 281 to 221 at 30 June 2017. A restructuring cost of GBP0.7m is reflected in the first half results due to this action.
As reported at the time of the disposal of the Kurt Salmon activities in 2016, there are some services provided by the Group under transitional service agreements, in particular, arrangements for the Group to support back office operations for agreed periods; these expire during the second half of the year. In addition, the Group is responsible for the unexpired portion of leases on certain properties in the USA previously occupied by Kurt Salmon. The costs for these arrangements were provided for in the balance sheet at 31 December 2016.
Exchange rates
A significant portion of Group revenue and costs are derived in foreign currencies. As a result, the impact of currency movements on the Group operating results for the period is not significant. However, the strengthening of Sterling over the period had a negative impact on cash balances, the majority of which are held in US Dollars.
The closing exchange rates to Sterling used in balance sheet translation at 30 June 2017 were GBP1 = $1.30 (H1 2016: $1.43; H2 2016: $1.24) and GBP1 = EUR1.14 (H1 2016: EUR1.28; H2 2016: EUR1.17).
Underlying operating loss from continuing operations
The underlying operating loss from continuing operations for the period was GBP4.6m compared with losses of GBP6.9m for the second half of 2016 and GBP1.9m for the first half of 2016.
Non-underlying items relating to continuing operations for the first half of 2017 represent restructuring costs referred to above (H1 2016: net credit of GBP0.6m relating to a provision release in respect of the deregistration of an overseas subsidiary and gain on disposal of an overseas holding company).
Interest
The total net finance costs for the period were GBP0.3m which relates mainly to a subsidiary pension plan (H1 2016: GBP0.6m). The Group remains debt free.
Taxation
The tax charge for the period reflects adjustments of prior year balances, project specific withholding taxes and tax charges in taxable non-UK jurisdictions where there are no losses available to shelter the income.
Loss for the period
The loss for the period including the underlying loss from operations, non-underlying expenses, taxation and interest was GBP6.0m and arises from continuing operations (H1 2016: loss GBP20.1m including losses from discontinued operations). The H2 2016 loss from continuing operations of GBP34.6m included a goodwill impairment charge of GBP30.4m and a net tax credit of GBP4.0m.
Losses per share
The basic loss per share for continuing operations was 1.2p (H1 2016: 0.8p per share) and the underlying basic loss per share was 1.1p (H1 2016: 0.9p per share).
Going Concern
The Board's assessment in relation to going concern is included in Note 2 of the financial information. Principal risks and uncertainties are set out in Note 2 of the financial information. The recent improvement in performance due to management actions is encouraging and the cost cutting measures implemented reduces cash utilisation. However, the outcome for the year as a whole for Proudfoot remains uncertain and will depend on sales made in the coming months. The Board has assessed the financial impact of potential downside financial scenarios, taking into account the principal risks to the business and recognises, as stated in the 2016 full year report, that should the Group underperform in the longer term, it will consider all options in the best interests of all stakeholders.
Balance Sheet
The net assets of the Group decreased from GBP32.6m at 31 December 2016 to GBP27.1m at 30 June 2017 due to the loss for the period and the negative impact of exchange rates on cash balances offset by a GBP1.7m reduction in the post-retirement obligations of the closed Proudfoot defined benefit pension scheme.
Intangible assets of GBP16.8m includes goodwill relating to Proudfoot of GBP16.5m (GBP16.0m plus the impact of exchange rate fluctuations) following the impairment charge at 31 December 2016. The Board considers that the assumptions examined at that time remain valid in all respects and that although sensitivity analysis indicate that relatively small changes in the underlying assumptions would result in the recoverable amount of goodwill falling to a level below its carrying value, actions now taken including management changes, cost reductions and an increase in sales activity during Q2 support the "value in use" calculation assumptions that the recent weak trading performances in parts of the business will not persist in the medium term and that Proudfoot will achieve a return to profitability.
The balance sheet includes GBP6.8m of deferred tax assets, principally relating to pension liabilities and tax losses carried forward, in both cases in relation to the US operations. The recoverability of these deferred assets is dependent upon the future profitability of the US operations of Proudfoot.
Total Group cash balances have reduced from GBP38.1m at 31 December 2016 to GBP28.4m at 30 June 2017 which is within the range expected by the Board when the Group last reported. During the first half, certain one-off items resulted in cash outflows including:-
-- GBP2.9m principally relating to the disposal of Kurt Salmon activities in 2016 and other restructuring amounts, which was mainly provided for in the balance sheet at 31 December 2016;
-- GBP0.7m of restructure costs arising in 2017; and -- an adverse foreign exchange movement of GBP1.1m.
The total cash balance at 30 June 2017 includes GBP9.1m currently subject to restrictions following Kurt Salmon disposals, approximately 90% of which is expected to become unrestricted from January to July 2018.
There have been no transactions with or material changes to related parties that have materially affected
the financial position or performance of the Group during the period.
Directors' responsibility statement
The directors are responsible for the maintenance and integrity of corporate and financial information. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
We confirm that, to the best of our knowledge:
(a) the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting;
(b) the Chairman and Chief Executive's Statement and the Group Financial Review include a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
(c) the Chairman and Chief Executive's Statement and the Group Financial Review include a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
By order of the Board
Michael Comras
Chief Financial Officer
17 August 2017
Cautionary statement
The Chairman and Chief Executive's Statement and the Group Financial Review have been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. They should not be relied on by any other party or for any other purpose.
They contain certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
.
Condensed Group statement of profit and loss
for the six months ended 30 June 2017
Unaudited Unaudited
six months six months
ended ended
30 June 30 June
2017 2016
Note GBP'000 GBP'000
---------------------------------------------- ---- ---------- ----------
Continuing operations
Revenue 3 21,575 25,694
Cost of sales (12,255) (12,928)
---------------------------------------------- ---- ---------- ----------
Gross profit 9,320 12,766
---------------------------------------------- ---- ---------- ----------
Administrative expenses - underlying (13,948) (14,693)
Loss from operations - underlying (4,628) (1,927)
Administrative (expenses)/income
- non-underlying (754) 654
---------------------------------------------- ---- ---------- ----------
Loss from operations before amortisation
of acquired intangibles (5,382) (1,273)
Administrative expenses - amortisation
of acquired intangibles - (304)
---------------------------------------------- ---- ---------- ----------
Total administrative expenses (14,702) (14,343)
---------------------------------------------- ---- ---------- ----------
Loss from operations 3 (5,382) (1,577)
Investment income 55 22
Finance costs (360) (603)
---------------------------------------------- ---- ---------- ----------
Loss before tax (5,687) (2,158)
Tax 5 (361) (1,773)
---------------------------------------------- ---- ---------- ----------
Loss for the period from continuing
operations (6,048) (3,931) Loss from discontinued operations 8 - (16,832) ---------------------------------------------- ---- ---------- ---------- Loss for the period (6,048) (20,763) ---------------------------------------------- ---- ---------- ---------- Loss per share - pence From loss from continuing operations for the period Basic and diluted 6 (1.2) (0.8) Basic and diluted - underlying 6 (1.1) (0.9) From the loss for the period Basic and diluted 6 (1.2) (4.2) Basic and diluted - underlying 6 (1.1) (4.0)
Condensed Group statement of comprehensive income
for the six months ended 30 June 2017
Unaudited Unaudited
six months six months
ended ended
30 June
2017 30 June 2016
GBP'000 GBP'000
--------------------------------------------- ---------- ------------
Loss for the period (6,048) (20,763)
Items that will not subsequently be
reclassified to profit and loss
Remeasurement of defined benefit pension
schemes 1,686 (4,604)
Tax on items taken directly to comprehensive
income (542) -
Items that may subsequently be reclassified
to profit and loss
Gain on available-for-sale investments - 6
Exchange differences on translation
of foreign operations (672) 9,945
--------------------------------------------- ---------- ------------
Total comprehensive expense for the
period attributable to owners of the
Company (5,576) (15,416)
--------------------------------------------- ---------- ------------
Condensed Group statement of changes in equity
for the six months ended 30 June 2017
Shares
held
by
Share employee
Share Share Merger compensation benefit Translation Other Retained
capital premium reserve reserve trust reserve reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- --------- --------- --------- ------------ -------- ------------ --------- --------- ---------
Balance as at
1 January
2016 84,538 82,664 5,683 4,179 (1,855) 17,291 6,082 (69,276) 129,306
-------------- --------- --------- --------- ------------ -------- ------------ --------- --------- ---------
Total
comprehensive
expense for
the period - - - - - 9,945 6 (25,367) (15,416)
Shares issued 81 - - - - - - - 81
Share-based
payments - - - 1,329 - - - - 1,329
Vesting of
share awards - - - (3,032) - - - 2,556 (476)
Shares
transferred
from ESOP - - - - 7 - - - 7
-------------- --------- --------- --------- ------------ -------- ------------ --------- --------- ---------
Unaudited
balance
at
30 June 2016 84,619 82,664 5,683 2,476 (1,848) 27,236 6,088 (92,087) 114,831
-------------- --------- --------- --------- ------------ -------- ------------ --------- --------- ---------
Total
comprehensive
expense for
the period - - - - - (30,612) 1 24,552 (6,059)
Shares issued 26 359 - - - - - - 385
Share-based
payments - - - 192 - - - - 192
Vesting of
share awards - - - (2,442) - - - (1,035) (3,477)
Shares
transferred
from ESOP - - - - 1,740 - - - 1,740
Cancellation
of deferred
shares (79,534) - - - - - - 79,534 -
Cancellation
of share
premium - (75,000) - - - - - - (75,000)
Recycling of
Investment
reserve - - - - - - 975 (975) -
Recycling of
Merger
reserve - - (5,683) - - - - 5,683 -
-------------- --------- --------- --------- ------------ -------- ------------ --------- --------- ---------
Audited
balance at
31 December
2016 5,111 8,023 - 226 (108) (3,376) 7,064 15,672 32,612
-------------- --------- --------- --------- ------------ -------- ------------ --------- --------- ---------
Total
comprehensive
expense for
the period - - - - - (672) - (4,904) (5,576)
Share-based
payments - - - 23 - - - - 23
Vesting of
share awards - - - (5) - - - - (5)
Shares
transferred
from ESOP - - - - 5 - - - 5
-------------- --------- --------- --------- ------------ -------- ------------ --------- --------- ---------
Unaudited
balance
at
30 June 2017 5,111 8,023 - 244 (103) (4,048) 7,064 10,768 27,059
-------------- --------- --------- --------- ------------ -------- ------------ --------- --------- ---------
Condensed Group statement of financial position
as at 30 June 2017
Unaudited Audited
30 June 31 Dec
2017 2016
Note GBP'000 GBP'000
--------------------------------- ---- --------- ---------
Non-current assets
Intangible assets & goodwill 16,764 17,724
Property, plant and equipment 441 1,108
Investments - -
Deferred tax assets 6,848 8,324
--------------------------------- ---- --------- ---------
Total non-current assets 24,053 27,156
--------------------------------- ---- --------- ---------
Current assets
Trade and other receivables 6,135 7,212
Current tax receivables 1,322 1,404
Cash and cash equivalents 7 28,437 38,067
Total current assets 35,894 46,683
--------------------------------- ---- --------- ---------
Total assets 59,947 73,839
--------------------------------- ---- --------- ---------
Current liabilities
Trade and other payables (16,766) (20,162)
Current tax liabilities (806) (1,070)
Total current liabilities (17,572) (21,232)
--------------------------------- ---- --------- ---------
Net current assets 18,322 25,451
--------------------------------- ---- --------- ---------
Non-current liabilities
Retirement benefit obligations (9,856) (11,577)
Deferred tax liabilities (35) (707)
Long-term provisions (5,425) (7,711)
--------------------------------- ---- --------- ---------
Total non-current liabilities (15,316) (19,995)
--------------------------------- ---- --------- ---------
Total liabilities (32,888) (41,227)
--------------------------------- ---- --------- ---------
Net assets 27,059 32,612
--------------------------------- ---- --------- ---------
Equity
Share capital 5,111 5,111
Share premium account 8,023 8,023
Share compensation reserve 244 226
Shares held by employee benefit
trust (103) (108)
Translation reserve (4,048) (3,376)
Other reserves 7,064 7,064
Retained earnings 10,768 15,672
--------------------------------- ---- --------- ---------
Equity attributable to owners of
the Company 27,059 32,612 --------------------------------- ---- --------- ---------
Condensed Group statement of cash flows
for the six months ended 30 June 2017
Unaudited Unaudited
six months six months
ended ended
30 June 30 June
2017 2016
Note GBP'000 GBP'000
-------------------------------- ---- ---------- ----------
Net cash outflow from operating
activities 7 (9,216) (5,688)
-------------------------------- ---- ---------- ----------
Investing activities
Interest received 46 22
Purchases of property, plant
and equipment (83) (257)
Purchases of intangible
assets (46) (117)
Proceeds from disposals
of subsidiaries 790 54,363
-------------------------------- ---- ---------- ----------
Net cash generated from
investing activities 707 54,011
-------------------------------- ---- ---------- ----------
Financing activities
Dividends paid - (3)
Interest paid (30) (241)
Proceeds from borrowings - 5,633
Repayment of borrowings - (68,294)
Net cash outflow from financing
activities (30) (62,905)
-------------------------------- ---- ---------- ----------
Net decrease in cash and
cash equivalents (8,539) (14,582)
Cash and cash equivalents
at beginning of period 38,067 20,737
Effect of foreign exchange
rate changes (1,091) 1,828
-------------------------------- ---- ---------- ----------
Cash and cash equivalents
at end of period 7 28,437 7,983
-------------------------------- ---- ---------- ----------
Notes
1. General information
The results for the six months ended 30 June 2017 and 30 June 2016 are unaudited but have been reviewed by the Group's auditor, whose report on the current period forms part of this document. The information for the year ended 31 December 2016 does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified or modified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.
2. Significant accounting policies
(a) Basis of preparation
The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The set of condensed financial statements included in this half-yearly report has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, as adopted by the European Union.
(b) Accounting policies
In the current financial year the following standards have become effective, although as at 30 June 2017 these had not been endorsed by the European Union. None of these would have a material impact on the half-yearly financial statements:
Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses
Amendments to IAS 7: Disclosure initiative
Annual Amendments to IFRS Standards 2014 - 2016 Cycle: Amendments to IFRS 12
Full details of the Group's accounting policies can be found in note 2 to the 2016 Annual Report which is available on our website: www.mcgplc.com.
Principal risks and uncertainties
The Group has operating and financial policies and procedures designed to maximise shareholder value within a defined risk management framework.
The key risks to which the business is exposed are reviewed regularly by senior management and the Board as a whole.
These risks are managed by anticipating consultancy trends; identifying new markets and sectors in which the Group might operate; maximising staff utilisation; having remuneration policies which reward performance and promote continued employment with the Group; maintaining a comprehensive knowledge management system; and undertake hedging to mitigate currency risk where appropriate.
Potential contractual liabilities arising from client engagements are managed through careful control of contractual conditions and appropriate insurance arrangements. There is no material outstanding litigation against the Group of which the Directors are aware which is not covered by insurance, or provided for in the financial statements.
Going concern
The Group prepares regular business forecasts and monitors its projected cashflows, which are reviewed by the Board. Forecasts are adjusted for reasonable sensitivities that address the principal risks and uncertainties to which the Group is exposed. Consideration is given to the potential actions available to management to mitigate the impact of one or more of these sensitivities in particular the discretionary nature of a significant amount of cost incurred by the Group.
The Board has concluded that the Group should have adequate resources to continue in operational existence for the foreseeable future being a period of at least twelve months from the date of approval of this half-yearly report.
Accordingly, they continue to adopt the going concern basis in preparing the half-yearly report.
Non-GAAP performance measures
The Group has adopted a number of alternative performance measures to provide additional information to understand underlying trends and the performance of the Group. These alternative performance measures are not defined by IFRS and therefore may not be directly comparable to other companies' alternative performance measures
Underlying profit/loss from operations
This is defined as operating profit or loss before non-underlying items and amortisation of intangible assets.
Non-underlying
Non-underlying items are those significant charges or credits which, in the opinion of the directors, should be disclosed separately by virtue of their size or incidence to enable a full understanding of the Group's financial performance. Transactions that may give rise to non-underlying items include charges for impairment, restructuring costs, acquisition costs and profits/losses on disposals of subsidiaries. The Group exercises judgement in assessing whether items should be classified as non-underlying. This assessment covers the nature of the item and the material impact of that item on reported performance. Reversals of previous items are assessed based on the same criteria.
3. Segmental information
The Group's continuing operating segment is one professional services practice, Proudfoot. This is the basis on which information is provided to the Board of Directors for the purposes of allocating certain resources within the Group and assessing the performance of the business. All revenues are derived from the provision of professional services.
Revenue and underlying operating profit by geography
Unaudited six months
ended 30 June 2017
-----------------------------------------------
Rest
of
Americas Europe World Consolidated
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ---------- --------- -------- --------------
Revenue 9,854 8,261 3,460 21,575
------------------------------ ---------- --------- -------- --------------
(Loss)/profit from operations
- underlying (3,743) (1,014) 129 (4,628)
------------------------------ ---------- --------- -------- --------------
Non-underlying items (759) 5 - (754)
(Loss)/profit from operations (4,502) (1,009) 129 (5,382)
------------------------------ ---------- --------- -------- --------------
Investment income 55
Finance costs (360)
------------------------------ ---------- --------- -------- --------------
Loss before tax (5,687)
------------------------------ ---------- --------- -------- --------------
Unaudited six months ended 30 June
2016
--------------
Rest
Americas Europe of Consolidated
GBP'000 GBP'000 World GBP'000
GBP'000
-------------------------------------- ------------- ----------- ---------- --------------
Revenue - continuing operations 17,226 5,896 2,572 25,694
-------------------------------------- ------------- ----------- ---------- --------------
Profit/(loss) from operations
- underlying 525 (1,460) (992) (1,927) -------------------------------------- ------------- ----------- ---------- -------------- Non-underlying items and amortisation of acquired intangibles (199) 296 253 350 Profit/(loss) from operations 326 (1,164) (739) (1,577) -------------------------------------- ------------- ----------- ---------- -------------- Investment income 22 Finance costs (603) -------------------------------------- ------------- ----------- ---------- -------------- Loss before tax (2,158) -------------------------------------- ------------- ----------- ---------- --------------
4. Dividends
The Company did not pay an interim or final dividend for 2016 and no interim dividend for 2017 will be payable.
5. Taxation
The tax charge on operations was GBP0.4m (2016: GBP1.8m). The tax charge for the half year reflects the adjustments of prior year balances, project specific withholding taxes and tax charges in taxable non-UK jurisdictions where there are no losses available to shelter the income.
6. Loss per share
The calculation of the loss per share is based on the following data:
Unaudited Unaudited Unaudited
six months six months six months
ended ended ended
30 June 30 June 30 June
2017 2017 2017
Total Continuing Discontinued
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- -------------
Loss
Loss for the purposes of basic
and diluted loss per share being
net loss for the period attributable
to owners of the Company (6,048) (6,048) -
Non-underlying items 754 754 -
Tax on non-underlying items (152) (152) -
-------------------------------------- ----------- ----------- -------------
Loss for purpose of basic earnings
per share - underlying (5,446) (5,446) -
-------------------------------------- ----------- ----------- -------------
Unaudited Unaudited Unaudited
six months six months six months
ended ended ended
30 June 30 June 30 June
2016 2016 2016
Total Continuing Discontinued
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ------------ --------------
Loss
Loss for the purposes of basic
and diluted earnings per share
being net loss for the period
attributable to owners of the
Company (20,763) (3,931) (16,832)
Amortisation of acquired intangibles 304 304 -
Non-underlying items 1,536 (654) 2,190
Tax on non-underlying items (908) (115) (793)
------------------------------------- ----------- ------------ --------------
Loss for purpose of basic earnings
per share - underlying (19,831) (4,396) (15,435)
------------------------------------- ----------- ------------ --------------
2017 2016
Number Number
million million
------------------------------------------- -------- --------
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 511.1 499.8
Effect of dilutive potential ordinary
shares:
- share options and performance share
plan 0.3 7.1
------------------------------------------- -------- --------
Weighted average number of ordinary shares
for the purposes of diluted earnings
per share 511.4 506.9
------------------------------------------- -------- --------
2017
Pence
--------------------------------- ------
Basic and diluted loss per share (1.2)
Basic and diluted loss per share
- underlying (1.1)
------------------------------------ ------
2016 2016 2016
All Continuing Discontinued
Pence Pence Pence
--------------------------------- ------ ----------- -------------
Basic and diluted loss per share (4.2) (0.8) (3.4)
Basic and diluted loss per share
- underlying (4.0) (0.9) (3.1)
---------------------------------- ------ ----------- -------------
The average share price for the six months ended 30 June 2017 was 7.6p (30 June 2016: 15.2p). The decrease includes the impact of capital reduction in December 2016.
7. Notes to the cash flow statement
Unaudited Unaudited
six months six months
ended ended
30 June 30 June
2017 2016
GBP'000 GBP'000
------------------------------------------- ----------- -----------
Loss from continuing operations (5,382) (1,577)
Profit from discontinuing operations - 639
------------------------------------------- ----------- -----------
Loss from operations (5,382) (938)
------------------------------------------- ----------- -----------
Adjustments for:
Depreciation of property, plant and
equipment 171 400
Amortisation of intangible assets 110 896
Loss on disposal of plant and equipment - 19
Adjustment for cost of share-based
payments 29 1,403
Decrease in provisions (420) (157)
Other non-underlying items (759) (81)
Operating cash flows before movements
in working capital (6,251) 1,542
------------------------------------------- ----------- -----------
Decrease/(increase) in receivables 987 (6,593)
(Decrease)/increase in payables (3,239) 2,066
------------------------------------------- ----------- -----------
Cash absorbed by operations (8,503) (2,985)
Income taxes paid (712) (2,704)
------------------------------------------- ----------- -----------
Net cash outflow from operating activities (9,216) (5,689)
------------------------------------------- ----------- -----------
Included within the 2017 Group cash balance of GBP28.4m is GBP9.1m (31 December 2016: GBP9.6m) of cash which is not currently available for use by the Group.
8. Discontinued operations
The loss for discontinued operations in 2016 of GBP16.8m
comprised:
Kurt Salmon Kurt Salmon Kurt Salmon
France Healthcare Consumer
unaudited unaudited Group unaudited Total unaudited
six months six months six months six months
ended ended 30 ended ended
30 June June 2016 30 June 30 June
2016 2016 2016
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------- ----------- ----------- ---------------- ---------------
Revenue - 7,321 40,429 47,750
Cost of sales - (6,076) (27,517) (33,593)
----------------------------------------------- ----------- ----------- ---------------- ---------------
Gross profit - 1,245 12,912 14,157
----------------------------------------------- ----------- ----------- ---------------- --------------- Administrative expenses - underlying (60) (2,224) (9,044) (11,328) (Loss)/profit from operations - underlying (60) (979) 3,868 2,829 Administrative expenses - non-underlying 75 (1,607) (658) (2,190) ----------------------------------------------- ----------- ----------- ---------------- --------------- Total administrative expenses 15 (3,831) (9,702) (13,518) ----------------------------------------------- ----------- ----------- ---------------- --------------- Profit/(loss) from operations 15 (2,586) 3,210 639 Finance costs - - (109) (109) ----------------------------------------------- ----------- ----------- ---------------- --------------- Profit/(loss) before tax 15 (2,586) 3,101 530 Tax - - (1,569) (1,569) ----------------------------------------------- ----------- ----------- ---------------- --------------- Profit/(loss) for the period attributable to owners of the Company 15 (2,586) 1,532 (1,039) Profit/(Loss) on disposal from discontinued operations 612 (16,405) - (15,793) ----------------------------------------------- ----------- ----------- ---------------- --------------- Net profit/(loss) attributable to discontinued operations 627 (18,991) 1,532 (16,832) ----------------------------------------------- ----------- ----------- ---------------- ---------------
9. Financial instruments fair value disclosure
The directors consider that the carrying value amounts of financial assets and financial liabilities recorded at amortised cost in the condensed financial statements included in this half-yearly report are approximately equal to their fair values.
10. Goodwill
The directors recognise that, whilst the carrying value of the Proudfoot goodwill is supportable as at 30 June 2017, it is possible that further impairment to the goodwill could be identified if the business does not improve as expected over the longer term in line with the business plan. Sensitivity analysis on the key assumptions included in the impairment review indicates that a reasonably possible change in key assumptions will result in additional changes in the recoverable amount on a value-in-use basis and small unfavourable changes to the assumptions and projections could result in the recoverable amount of goodwill falling below its carrying value.
INDEPENDENT REVIEW REPORT TO MANAGEMENT CONSULTING GROUP PLC
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the statement of profit and loss, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the cash flow statement and related notes 1 to 10. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
London, United Kingdom
17 August 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR XDLLFDVFZBBD
(END) Dow Jones Newswires
August 18, 2017 02:00 ET (06:00 GMT)
1 Year Management Consulting Chart |
1 Month Management Consulting Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
