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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Essentially Grp | LSE:ESN | London | Ordinary Share | GB0032118878 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMESN
ESSENTIALLY GROUP LIMITED
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009
Essentially Group Limited, the leading sports marketing and athlete
management Group, today announces its interim results for the six
months ended 30 June 2009.
Financial Highlights
* Earnings before Interest, Tax, Depreciation and Amortisation up
15% to GBP1,184,000 (GBP1,030,000 in the period to 30 June 2008)
* Profit before tax* up 19% to GBP888,000 (GBP749,000 in the period to
30 June 2008)
* Profit after tax* up 61% to GBP653,000 (GBP406,000 in the period to
30 June 2008)
* Earnings per share* up 10% to 0.33 pence (0.30 pence in the
period to 30 June 2008)
* Cash on the balance sheet GBP4.3m and a debt position of GBP7.4m,
with a net debt position of GBP4.0m after taking account of funds
collected on behalf of clients
*excluding amortisation, loss on disposal and notional interest on
deferred consideration
Operational Highlights
* The collapse of all of our earn outs at an agreed level,
resulting in reduced disclosed liabilities
* Disposal of the Accelerate South African office to management
* Successful Ashes series for the Group within the sports
marketing, hospitality, and media sales businesses
* Successful tour by British & Irish Lions to South Africa
* Extension of key contracts across media sales and sponsorship
Review of Operations
The first half of 2009 has seen an increase in confidence within the
sports sector following the financial turmoil of 2008. While a number
of financial institutions have reduced their commitment to the sports
sector there has been an increase in the number of core consumer
brands who are recognising the power of sport to communicate their
messages to a targeted audience.
The media coverage of both the Ashes series and the British & Irish
Lions tour has provided strong media exposure for the respective
sponsorship partners and reinforced the strength of both of these
sports to a global audience.
Cricket continues to grow as Twenty 20 becomes increasingly part of
the sport's commercial activity. The speed with which the relocation
of the India Premier League to South Africa was achieved is a clear
indicator of the status this tournament has now achieved. Within
rugby there are strong positive drivers for us, including England
hosting the 2015 World Cup and the likely inclusion of Rugby 7's as
part of the 2016 Olympics.
Key Highlights
Our team have delivered a number of projects including the following:
* A successful tour by the British & Irish Lions to South Africa
* Key commercial partners to the ECB test match grounds for the
Ashes and West Indies tours
* Investec as TriNations series sponsor in New Zealand
* Arrangement of Springboks to play Leicester Tigers on the opening
of their new stand in November
* Pilsner Urquell as official beer of the Open Championship at
Turnberry
* Appointment as exclusive commercial agents to the European Rugby
Cup
* Appointment as exclusive commercial agents for the New Zealand
Rugby Union
* Renewal of Magners' sponsorship of the Celtic League
* Extension to our commercial agreement with Millennium Stadium
* Commercial agency for the IRB World Rugby Sevens Dubai
Many of these projects will flow through into the second half of this
year and into 2010.
Overall results
Results
Our results for the six months ended 30 June 2009 are summarised
below:
Unaudited Unaudited Audited
6 months 6 months 12 months
June 2009 June 2008 Dec 2008
GBP000's GBP000's GBP000's
Revenues 10,044 5,901 16,245
Contribution before
central costs 1,483 1,312 3,304
Central costs (384) (351) (661)
Earnings before
interest, tax and
amortisation of
intangibles 1,099 961 2,643
Interest (211) (212) (488)
Profit before tax
and amortisation of
intangibles 888 749 2,155
Tax (235) (343) (705)
Profit after tax and
before amortisation
and
notional interest,
exceptional items
and loss on
disposal of
operations 653 406 1,450
Exceptional Items - - (157)
Loss on disposal of
operation (507) - -
Amortisation of
intangible assets (823) (611) (1,536)
Notional interest
for deferred
consideration under
IFRS (295) (261) (697)
Fair value of
derivative
instrument, net of
tax impact (23) - (150)
Deferred tax on
amortisation of
intangible assets 231 183 466
(Loss) after tax (764) (283) (624)
Underlying earnings
per share * 0.33 0.30 0.87
Basic EPS (0.39) (0.21) (0.37)
Weighted average
number of shares 197,092,201 135,212,306 166,074,158
* Before amortisation of intangible assets and associated taxation,
loss on discontinued operations and notional interest on deferred
consideration
The financial information is presented in accordance with
International Financial Reporting Standards ("IFRS").
OPERATING DIVISIONS
Sports Marketing
6m to 6m to 12m to
June 2009 June 2008 Dec 2008
GBP'000 GBP'000 GBP'000
Contribution 693 398 1,480
The sports marketing business has benefited from the inclusion of a
full six months of Sportseen Limited (included from 1 May in 2008)
however it remains weighted towards the second half of the year. Key
activity in the first half of the year included the first half of the
test match ground season, RBS 6 Nations at Twickenham, Millennium
Stadium and Murrayfield, England football world cup qualifiers and
the British & Irish Lions. In addition we ran successful events for
Amlin, Visit Britain, Pilsner Urquell, and the Lions.
Athlete Management 6m to 6m to 12m to
June 2009 June 2008 Dec 2008
GBP'000 GBP'000 GBP'000
Contribution 682 847 1,746
The last six months have seen us expanding our presence in both the
Northern and Southern hemispheres to supplement the investment we
made in Essentially South Africa and these are all anticipated to
contribute profits in the second half of the year. We remain cautious
in respect of the Japanese market for international players although
the financial issues at the end of 2008 have not had as significant
an impact on the Japanese market as we expected. Our office there is
now well positioned to service both the international and domestic
marketplace in Japan. Within cricket Twenty 20 continues to drive
values and is providing additional commercial revenues to the UK
domestic cricket market.
Professional Services 6m to 6m to 12m to
June 2009 June 2008 Dec 2008
GBP'000 GBP'000 GBP'000
Contribution 108 67 78
The professional services business continues to build its client base
as well as providing an important support service to our players
under management - well over half of whom use us for their tax and
accounting administration.
OFFER FOR THE SHARE CAPITAL OF THE COMPANY
As reported earlier today Chime Communications PLC ("Chime") has made
an announcement that they wish to acquire the whole of the issued
share capital of the Company. The Board, having been so advised by
Cenkos, consider the terms of the offer to be fair and reasonable and
the terms to be in the best interests of shareholders as a whole.
Accordingly, the Board intends to unanimously recommend that
shareholders accept the Offer.
DIVIDEND
The Board has declared an interim dividend of 0.36p per ordinary
share, payable in the event that the Offer by Chime is declared
unconditional and subject to passing of a special resolution for its
payment.
The interim dividend payment date will be announced in due course and
will be payable to shareholders on the register at 2 October 2009.
The ex-dividend date is 30 September 2009.
OUTLOOK
The Group operates in a competitive marketplace and the events of
late 2008 illustrated some of the uncertainties within the market -
both in terms of available sponsorship budgets and the timing and
appetite to commit to significant marketing expenditure. In addition
the Group continues to expand its overseas presence which can
increase its exposure to variations in exchange rates. Although the
acquisition of Sportseen has reduced the impact, the Group's results
remain weighted towards the second half of the year.
The Board remain positive as to Essentially's outlook. For our senior
management team the opportunity to combine with Fast Track, the
sports marketing division of Chime, represents a significant step in
the creation of a major presence within the sports marketing and
management business. We are continuing to see sponsorship and
marketing revenues flowing into the sports of rugby and cricket,
although there has been a significant shift in the nature of the
companies now partnering. The wider economic outlook will continue to
require a note of caution, however the longer term calendar in our
key sports, coupled with our locations to service our clients, allows
us to remain positive as to the Company's prospects: 2011 - India to
England, Rugby World Cup in New Zealand, 2012 Olympics, 2013 Ashes in
the UK, 2015 Rugby World Cup in England.
The Board would like to extend its thanks to all of our employees
around the world for all of their efforts to date and for their
continuing loyalty to the Group.
Consolidated Interim Income Statement
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 June to 30 June 31 December
2009 2008 2008
GBP'000 GBP'000 GBP'000
Note
Revenue 3 10,044 5,901 16,245
Cost of sales (4,629) (1,993) (6,821)
-------------- -------------- --------------
Gross profit 5,415 3,908 9,424
Operating costs (4,231) (2,878) (6,626)
Depreciation (85) (69) (155)
Earnings from
continuing
operations before
interest, tax, 1,099 961 2,643
amortisation and
loss on disposal of
subsidiary
Exceptional Items - - (157)
Loss on disposal of
subsidiary (507) - -
undertaking
Amortisation of (823) (611) (1,536)
Intangible assets
Total
Administrative (5,646) (3,558) (8,474)
costs
Operating (loss) (231) 350 950
profit
Interest charged (541) (537) (1,523)
Interest Received 4 64 129
-------------- -------------- --------------
Loss before tax (768) (123) (444)
Income tax expense 4 (160) (180)
-------------- -------------- --------------
Loss for the period (764) (283) (624)
========== ========== ==========
Earnings / (Loss)
per share :
Basic and fully
diluted earnings (0.39) (0.21) (0.37)
per share 4
========== ========== ==========
Consolidated statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 June to 30 June 31 December
2009 2008 2008
GBP'000 GBP'000 GBP'000
Loss for the period (764) (283) (624)
Exchange differences
arising on translating (29) (287) 174
foreign operations
Exchange differences
reflected in loss on 9 - -
disposal of subsidiary
undertaking
-------------- -------------- --------------
Loss for the period (784) (580) (450)
========== ========== ==========
Consolidated Balance Sheet
Unaudited Unaudited Audited
30 June 30 June 31 December
2009 2008 2008
Note GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and 459 463
equipment 521
Goodwill 6 22,690 25,908 23,644
Other intangible 7,169 6,497
assets 5,588
Investments 117 - 117
-------------- -------------- --------------
28,916 33,536 30,721
-------------- -------------- --------------
Current assets
Inventories 98 120 114
Trade and other 7,992 8,523
receivables 8,609
Cash and cash 7,919 3,564
equivalents 4,294
-------------- -------------- --------------
13,001 16,031 12,201
-------------- -------------- --------------
Total assets 41,917 49,567 42,922
-------------- -------------- --------------
LIABILITIES
Current liabilities
Trade and other 8,945 5,827
payables 7,638
Short-term 977 1,417
borrowings 1,417
Current portion of 3,960 2,147
long-term earn out
creditor 8 4,853
Current tax payable 1,368 1,303 1,577
-------------- -------------- --------------
15,276 15,185 10,968
-------------- -------------- --------------
Non-current
liabilities
Long-term earn out 4,487 3,462
creditor 8 -
Long term 7,880 6,732
borrowings 6,023
Deferred tax 2,176 1,718
liabilities 1,454
-------------- -------------- --------------
Total non-current 14,543 11,912
liabilities 7,477
-------------- -------------- --------------
Total liabilities 22,753 29,728 22,880
-------------- -------------- --------------
Net assets 19,164 19,839 20,042
========= ========= =========
Equity attributable
to equity holders
of the parent
Share capital 5 197 196 197
Share premium 17,300 17,318
account 17,318
Merger reserve 3,294 3,230 3,294
Own shares held (527) (433) (433)
Foreign exchange 68 529
reserve 509
Profit and loss (522) (863)
account (1,627)
-------------- -------------- --------------
Total equity 19,164 19,839 20,042
========= ========= =========
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months Year to
to 30 June to 30 June 31 December
2009 2008 2008
GBP'000 GBP'000 GBP'000
Cash flows from
operating activities
Loss after taxation (764) (283) (624)
Adjustments for:
Depreciation 85 69 155
Amortisation of
intangibles 823 611 1,536
Loss on disposal of
subsidiary company 507 - -
Foreign exchange gain
(loss) 5 (33) 59
Investment income (4) (64) (129)
Interest expense 509 537 1,314
Fair value loss on
derivative financial
instrument 32 - 209
Taxation (credit)
expense recognised in
profit and loss (4) 160 180
Decrease (Increase) in
inventories 16 17 23
Increase in trade and
other receivables (770) (902) (1,172)
Increase (Decrease) in
trade payables 1,991 3,863 (189)
-------------- -------------- --------------
Cash generated from
operations 2,426 3,975 1,376
Interest paid (214) (242) (617)
Income taxes paid (370) (500) (322)
-------------- -------------- --------------
Net cash generated from
operating activities 1,842 3,233 437
-------------- -------------- --------------
Cash flows from
investing activities
Acquisition of
subsidiaries net of cash
acquired - (3,158) (3,441)
Transaction costs in
relation to acquisition
of subsidiaries (52) (384) (827)
Payment of long term
earn-out creditor (62) (2,086) (2,087)
Net (Purchase) / sale of
equipment (146) (64) (155)
Interest received 4 64 129
Cashflows in respect of
disposal of subsidiaries (147) - -
Purchase of investments - - (117)
-------------- -------------- --------------
Net cash generated by
investing activities (403) (5,628) (6,498)
-------------- -------------- --------------
Cash flows from
financing activities
Proceeds from issue of
share capital - 5,656 5,677
Proceeds from long-term
borrowings - 3,084 3,000
Repayment of long-term
borrowings (709) (428) (1,054)
-------------- -------------- --------------
Net cash generated by
financing activities (709) 8,312 7,623
-------------- -------------- --------------
Net increase in cash and
cash equivalents 730 5,917 1,562
Cash and cash
equivalents at beginning
of period 3,564 2,002 2,002
-------------- -------------- --------------
Cash and cash
equivalents at end of
period 4,294 7,919 3,564
-------------- -------------- --------------
Consolidated Statement of Changes in Equity
Share Foreign Profit and
Share premium Merger Shares exchange loss Total
capital account reserve Held reserve account Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 120 10,612 1,743 (433) 355 (239) 12,158
January 2008
Issue of 77 6,706 1,551 - - - 8,334
share
capital
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total 77 6,706 1,551 - - - 8,334
transactions
with owners
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Loss) for - - - - - (624) (624)
the
period
Other
comprehensive
income:
Exchange
difference on
translation
of
foreign
operation - - - - 174 - 174
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
comprehensive
income for
the
period - - - - 174 (624) (450)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at 31 197 17,318 3,294 (433) 529 (863) 20,042
December
2008
Purchase of - - - (94) - - (94)
shares held
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total - - - (94) - - (94)
transactions
with owners
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Loss) for - - - - - (764) (764)
the
period
Other
comprehensive
income:
Exchange
difference on
translation
of
foreign
operation - - - - (20) - (20)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
comprehensive
income for
the
period - - - - (20) (764) (784)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at 30 197 17,318 3,294 (527) 509 (1,627) 19,164
June 2009
======= ======= ======= ======= ======= ======= =======
Balance at 1 120 10,612 1,743 (433) 355 (239) 12,158
January 2008
Issue of 76 6,688 1,487 - - - 8,251
share
capital
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total 76 6,688 1,487 - - - 8,251
transactions
with owners
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Loss) for - - - - - (283) (283)
the
period
Other
comprehensive
income:
Exchange
difference on
translation
of
foreign
operation - - - - (287) - (287)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total
comprehensive
income for
the
period - - - - (287) (283) (570)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at 30 196 17,300 3,230 (433) 68 (522) 19,839
June 2008
======= ======= ======= ======= ======= ======= =======
Notes to the condensed consolidated interim financial statements
1 Nature of operations and general information
Essentially Group Limited is the Group's ultimate parent company. It
is incorporated and domiciled in Jersey. Essentially Group Limited's
shares are listed on the Alternative Investment Market of the London
Stock Exchange.
Essentially Group's consolidated financial statements are presented
in Pounds Sterling (GBP), which is also the functional currency of the
parent company.
The condensed consolidated interim financial statements have been
prepared in accordance with International Accounting Standard ("IAS")
34 "Interim Financial Reporting", as adopted by the European Union.
There are no related party transactions that require to be reported.
2 Summary of significant accounting policies
These condensed consolidated interim financial statements (the
interim financial statements) have been prepared in accordance with
the accounting policies adopted in the last annual financial
statements for the year to 31 December 2008 except for the adoption
of IAS1 Presentation of Financial Statements (revised 2007), and IFRS
8 Operating Segments.
The adoption of IAS 1 (revised 2007) does not affect the financial
position or profits of the Group, but gives rise to additional
disclosures. The measurement and recognition of the Group's assets,
liabilities, income and expenses is unchanged, however some items
that were recognised directly into equity are now recognised in other
comprehensive income, for example foreign exchange movements on
overseas subsidiaries. IAS 1 (revised 2007) affects the presentation
of owner changes in equity and introduces a "Consolidated Statement
of Comprehensive Income". In accordance with the new standard the
interim financial statements also include a revised "Consolidated
Statement of Changes in Equity".
Under IFRS8 the accounting policy for identifying segments is now
based on the internal management reporting information that is
regularly reviewed by the chief operating decision maker. There has
been no impact of this on the segments disclosed as the Group has
always reported both its management information and its segmental
analysis in its financial statements by reference to the dominant
source and nature of the Group's risks and returns (i.e. on a
divisional basis).
3 Segment analysis
The Group operates through a number of different trading companies
and operating segments. Essentially Group evaluates the performance
of each business segment and allocates the necessary resources to
them based on operational requirements, including cash flow and
related resource requirements. Segmental earnings correspond to
Earnings before interest, tax and amortisation. Amortisation and
interest charged and received have not been allocated to any
individual business segments.
Group costs relate to the costs of Essentially Group Limited after
deducting any costs that have been allocated to an individual
business segment.
Primary segmental reporting
30 June 2009 30 June 2008 31 Dec 2008
Revenues Contribution Revenues Contribution Revenues Contribution
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Sports 6,462 693 3,004 398 9,895 1,480
Marketing
Athlete 2,972 682 2,490 847 5,329 1,746
Management
Professional 610 108 407 67 1,021 78
Services
-------------- -------------- -------------- -------------- -------------- --------------
10,044 1,483 5,901 1,312 16,245 3,304
Group costs (384) (351) (661)
-------------- -------------- --------------
1,099 961 2,643
Net interest (537) (473) (1,394)
expense
Amortisation (823) (611) (1,536)
of
Intangibles
Exceptional - - (157)
Items
Loss on
disposal of (507) - -
subsidiary
undertaking
-------------- -------------- --------------
Loss before (768) (123) (444)
tax
========= ========= ==========
There are no material intersegment revenues included in the above
analysis.
Total Assets
The following analyses the total assets of the Group by operating
division
30 June 2009 30 June 2008 31 Dec 2008
GBP'000 GBP'000 GBP'000
Sports Marketing 27,217 34,424 27,489
Athlete Management 12,713 10,348 12,787
Professional Services 1,565 1,811 1,791
Group 422 2,984 855
-------------- -------------- --------------
Total Assets 41,917 49,567 42,922
========= ========= =========
Total assets above is calculated excluding intercompany balances and
includes goodwill and customer contracts.
4 Earnings per share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the period.
The calculation of diluted earnings per share is based on the basic
earnings per share, adjusted to allow for the issue of shares and the
post tax effect of dividends and/or interest, on the assumed
conversion of all dilutive options and other dilutive potential
ordinary shares.
Reconciliations of the earnings and weighted average number of shares
used in the calculations are set out below
6 months 6 months Year to
to 30 June to 30 June 31 December
2009 2008 2008
GBP'000 GBP'000 GBP'000
Earnings before interest, tax,
amortisation, fair value of
derivative, and loss on disposal 1,099 961 2,643
Interest (211) (212) (488)
Profit before Tax, amortisation,
notional interest, fair value of
derivative, and loss on disposal 888 749 2,155
Tax (235) (343) (705)
Profit After Tax and before
amortisation, notional interest,
fair value of derivative, and
loss on disposal 653 406 1,450
Deferred Tax on intangible
amortisation 231 183 466
Notional interest for deferred
consideration under IFRS (295) (261) (697)
Fair value of derivative
instrument, net of tax impact (23) - (150)
Amortisation of Intangibles (823) (611) (1,536)
Loss after Tax on Continuing
operations before exceptional
items / loss on disposal of
subsidiary (257) (283) (467)
Loss on disposal of subsidiary /
exceptional items (507) - (157)
(Loss)/ Profit After Tax on
Continuing Operations (764) (283) (624)
Weighted Average no shares 197,092,201 135,212,306 166,074,158
Earnings per share on continuing
operations before amortisation of
Intangibles, notional interest, 0.33 0.30 0.87
fair value of derivatives and
loss on disposal (pence)
Earnings per share on continuing
operations before exceptional
items / disposal of subsidiary
(pence) (0.13) (0.21) (0.28)
Basic and fully diluted earning
per share (pence) (0.39) (0.21) (0.37)
Share options currently in issue are anti-dilutive and therefore do
not impact EPS.
5 Share issue
Six months to 30 June 2009
Number GBP'000
At 1 January 2009 and 30
June 2009 197,092,201 197
================ =============
Six months to 30 June
2008
Number GBP'000
At 1 January 2008 119,827,289 120
Issue of shares 76,563,650 76
------------------------ -------------------
At 30 June 2008 196,390,939 196
================ =============
Year to 31 December 2008
Number GBP'000
At 1 January 2008 119,827,289 120
Issue of shares 77,264,912 77
------------------------ -------------------
At 31 December 2008 197,092,201 197
================ =============
6 Goodwill
30 June 2009 30 June 2008 31 December 2008
GBP'000 GBP'000 GBP'000
Sports
Marketing 14,475 19,081 15,154
Athlete
Management 7,571 6,029 7,860
Professional
Services 644 798 630
------------------- ------------------- -------------------
22,690 25,908 23,644
============= ============= =============
Goodwill in each of these business units comprises:
The Sports Marketing division, which principally comprises Accelerate
Sport and Music Limited (acquired in 2006), Frontiers Group UK
Limited (acquired in 2007) and Sportseen Limited (acquired April
2008) have a long established reputation for the provision of value
added services to brands seeking to enhance their profile in both a
sporting and non-sporting context. In addition it has established a
number of key relationships with governing bodies, professional
associations, and influencers in the sporting and non-sporting arena.
It is not possible to attribute value directly to each of these
relationships or the reputation, as it is, in the Directors' opinion,
these factors acting in concert that contribute to the overall value
of the Accelerate and Frontiers businesses. The goodwill attributable
to this division has been reduced following the disposal of the
Accelerate South Africa and the changes to the earn out consideration
set out in Note 8, as well as other factors including the
amortisation of interest on earn out consideration and changes in
exchange rates.
The Athletes Management division, which principally comprises Global
Sports Management Limited (acquired in 2005) and Athletes 1 Sports
Limited (acquired in 2007) has a long standing reputation with the
clubs, playing staff, players and professional bodies within cricket
and rugby. Each of these relationships provide new opportunities for
revenue generation, however it is not possible to identify separately
which of these relationships contributes to the each piece of new
business and, in the Directors' opinion, it is not any one factor
that drives the growth of the business unit. The increase in goodwill
from June 2008 to June 2009 is attributable to Essentially South
Africa and Arundel Promotions, both coming into the Group in the
second half of 2008. The other variations arise out of changes in the
earn out consideration set out in Note 8, together with other factors
including the amortisation of interest on earn out consideration and
changes in exchange rates.
The Professional Services division, which principally comprises
Essentially Professional Services Limited (acquired in 2006), has an
established network of referrers of revenue generating opportunities
which includes professional advisers, bankers, entrepreneurs, and
existing clients. It is not possible to separately identify the value
of each of these sources to the business. The changes in goodwill
arise from the changes in the earn out consideration as outlined in
Note 8, together with the amortisation of interest on earn out
consideration and changes in exchange rates.
In each of these divisions (including companies acquired in the
current year) the Directors believe that Goodwill represents a value
to the Group over and above the separately identifiable customer
contracts.
The Directors review the goodwill allocated to each business unit on
a regular basis, taking into account a number of factors including:
* Current trading
* Financial forecasts
* Cash generation
* Market conditions that may impact directly or indirectly on a
business unit's activity
* Staff and customer retention
* Organic growth during the period under review
* New business development
On the basis of this review the Directors believe that no impairment
has been made in respect of goodwill in any of the business units.
7 Dividends
No dividends were paid during this or any other periods shown.
8 Earn out consideration
As described in the annual financial statements for the year ended 31
December 2008 the company successfully concluded agreements for the
settlement of all earn out liabilities in connection with businesses
acquired by the company. The settlement of earn outs was agreed at
GBP4.8 million, of which GBP3.1 million is in cash, of which
approximately 50% was paid in July 2009. The balance of cash
consideration is due for payment in March 2010. The balance of
consideration was satisfied by way of the issue of 28,583,334
ordinary shares of 0.1p each in July 2009. The earn out consideration
is contingent on certain conditions being satisfied.
9 Post Balance Sheet Events
On 22 September 2009 Chime Communications PLC announced that it had
made an offer to acquire the whole of the issued share capital of
Essentially Group Limited. Further details of this Offer are
contained in the announcement made on 22 September 2009, available
from the website of Essentially Group Limited
www.essentiallygroup.com and in the Offer document being sent out to
all shareholders.
10 Interim statement
Copies of the interim statement will be available from the company's
registered office at PO Box 369, Sir Walter Raleigh House, The
Esplanade, St Helier, Jersey, JE1 4HH and is available to download at
www.essentiallygroup.com.
This statement does not constitute full statutory financial
statements within the meaning of Company Legislation.
Responsibility Statement
We confirm to the best of our knowledge:
* The condensed consolidated interim financial statements have been
prepared in accordance with IAS 34 "Interim Financial Reporting";
* The interim management report includes 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
* The interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related party
transactions and changes therein).
By order of the Board
Tim Berg
Chief Financial Officer
22 September 2009.
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This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
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