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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
The Mission Marketing Group Plc | LSE:TMMG | London | Ordinary Share | GB00B11FD453 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 78.50 | 77.00 | 80.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMTMMG
RNS Number : 4946K
The Mission Marketing Group PLC
22 September 2016
The Mission Marketing Group plc
Interim results for the six months to 30 June 2016
The Mission Marketing Group plc ("TMMG" or "the mission(tm) "), the marketing communications and advertising group, sets out its unaudited interim results for the six months ended 30 June 2016.
Trading
-- Some great new business wins in the period, including Fuji Xerox, Golden Wonder, Greene King, Halfords, Mondelez, O2 and Sky Betting & Gaming
-- Good progress made upscaling people, systems and technology -- Recent acquisitions trading well and global capabilities strengthened
-- Expect to have a strong second-half bias as in previous years and remain confident for full year outlook
Income statement
-- Revenue up 10% to GBP32.4m (2015: GBP29.5m) -- Headline profit before tax up 10% to GBP2.6m (2015: GBP2.3m*) -- Reported profit before tax up 14% to GBP2.0m (2015: GBP1.7m*) -- Headline diluted EPS up 15% to 2.33 pence (2015: 2.03 pence*)
Balance sheet and cash flow
-- Cash inflows from operating activities of GBP4.8m (2015: GBP2.3m) -- Acquisition obligations of GBP3.0m settled since year-end
-- Period-end acquisition obligations reduced to GBP5.4m, of which only GBP2.5m due within one year
-- Net bank debt reduced by GBP1.5m in the six months to GBP9.4m -- Debt levels continue to reduce and are comfortably within the Board's limits
Dividend
-- Interim dividend increased by 67% to 0.5p (2015: 0.3p) -- Payable on 2 December 2016 to shareholders on the register at 4 November 2016
*restated as explained in Note 1
David Morgan, Chairman, commented: "The first half of 2016 went very well for us as we continue to build on our profitable platform. We look forward to a positive second half and remain confident in the outturn for the full year, continuing the consistent growth achieved over recent years. To reflect our confidence in the business, the Board has decided to substantially increase the dividend."
An interview with David Morgan, Chairman, can be viewed from 9.30am today at:
http://www.themission.co.uk/investor-centre/reports
Enquiries:
David Morgan, Executive Chairman Peter Fitzwilliam, Finance Director The Mission Marketing Group plc 020 7462 1415 Geoff Nash/James Thompson (Corporate Finance) Stephen Norcross (Corporate Broking) finnCap Limited 020 7220 0500
the mission(tm) is a network of entrepreneurial marketing communications Agencies employing over 950 people in the UK, Asia and San Francisco. The Group comprises a complementary mix of integrated generalists, specialists in specific marketing/communications activities and specialists in particular market sectors, all providing award-winning solutions to national and international Clients.
www.themission.co.uk
Chairman's Statement
A GAME OF TWO HALVES. BOTH LOOKING GOOD
I am delighted to report that the first half of 2016 went very well for us and we continue to progress as we had hoped despite the uncertainties that surrounded the UK market.
It is difficult to assess the actual effect of Brexit on us and, whilst there have been the occasional budget-reducing decisions, our Clients are maintaining investment in their businesses and as a result we remain confident that our Agencies will continue to grow alongside them through the remainder of 2016.
Across our Group we have focused on upscaling our Agencies where increased creativity is being supported by technology-enabled systems that bring a leading marketing edge to our Clients. Our core businesses have continued to progress and our recent acquisitions, Chapter and Echo, have repaid our confidence in them. In-fills in our Mongoose Sports Marketing Agency are helping that business develop and a move into the Sales Promotion arena will be underway shortly. We continue to build.
We also continue to offer best-in-class teams, drawn from across a number of Agencies, to support those Clients that require access to our breadth of service and depth of talent. We have strengthened our position in Asia and the USA by adding new resources into our Bray Leino and April Six Agencies there. Earlier this year we launched our April Six Proof PR Agency in San Francisco and early indications are positive.
Our Solaris Healthcare Agency recently finalised agreements with Vivactis and Precision Effect to enable them to operate on a more global scale, thereby providing their Pharma Clients with seamless brand activities wherever they operate.
New business wins have continued apace with assignments from the likes of Fuji Xerox, Golden Wonder, Greene King, Halfords, Mondelez, O2 and Sky Betting & Gaming, whilst bolstering our businesses with further development of our Pathfindr and Ethology products into Rolls Royce and Aviva.
In other news, Mike Smith joined our Automotive Agency, RLA as CEO bringing with him a wealth of expertise of the market and we welcome him on board. Greg Delaney has joined the Bray Leino Board as a Non Executive to bring wise counsel on creative matters, and Rob Grahamslaw has been appointed to run our Global Events Agency, joining us from BP.
Our debt continues to reduce and our profits continue to increase. We believe that through new initiatives, very talented management teams that utilise original techniques, continued investment in our Agencies and our entrepreneurial approach, we are well set and anything is possible.
As a management team, we are very much focused on building on our solid platform. We are looking to create ever greater collaboration across the Group which will help drive organic growth and with it increased profitability and cashflow. Margins remain a key focus. Over the last couple of years we have successfully expanded our footprint while further adding to our expertise and reach. We will continue to look for accretive acquisitions that add to our capabilities and enhance our Client offering. Whilst we have a significant pipeline of opportunities, we will focus on those with the potential to deliver greatest shareholder value.
Trading results
Turnover ("billings") for the six months ended 30 June 2016 increased by 11% to GBP74.2m (2015: GBP66.6m). Billings include pass-through costs (e.g. TV companies' charges for buying air-time) and thus the Board does not consider turnover to be a key performance measure. Instead, the Board views operating income (turnover less third party costs) as a more meaningful measure of Agency activity levels.
Operating income ("revenue") increased 10% in the six months to GBP32.4m (2015: GBP29.5m). Whilst organic growth rates remain modest in a very competitive market, there have been some high quality new business wins and the acquisitions made in 2015 have made very positive contributions.
Headline operating profits increased by 10%, in line with revenue growth, to GBP2.8m (2015: GBP2.6m). In a market which continues to apply relentless downward pressure on margins, we are pleased to have maintained margins in the first half at the levels achieved in the equivalent period last year. As previously reported, our Clients' spending cycles tend to result in a second half bias in our financial results, including higher profit margins, and we expect this pattern to be repeated in 2016.
Adjustments to headline profits in 2016 totalled GBP0.6m (2015: GBP0.6m), explained further in Note 3. After these adjustments, reported operating profits were GBP2.2m (2015: GBP2.0m).
After unchanged financing costs of GBP0.2m, headline profit before tax increased by 10% to GBP2.6m (2015: GBP2.3m), and reported profit before tax increased by 14% to GBP2.0m (2015: GBP1.7m).
The Group estimates an effective tax rate on headline profits before tax of 22% (2015: 24%), resulting in a 13% increase in headline earnings of GBP2.0m for the six months (2015: GBP1.8m), and reported profit after tax of GBP1.5m (2015: GBP1.4m). Fully diluted headline EPS increased 15% to 2.33 pence (2015: 2.03 pence).
Balance sheet, cash flow and dividend
Net cash inflows from operating activities were GBP4.8m in the six months ended June 2016 (2015: GBP2.3m). Of particular note were working capital inflows of GBP2.6m compared with GBP0.4m in the prior period. These strong operating cash flows funded the cash settlement of acquisition obligations totalling GBP2.7m and also a GBP1.5m reduction in net debt to GBP9.4m. At 30 June 2016, the Group had GBP13.1m of committed facilities and an additional overdraft facility of GBP3m, providing comfortable headroom to accommodate the normal phasing of working capital requirements which tends to result in an increase in net debt in the second half of the year.
The balance sheet has again strengthened during the period. Bank debt continued to fall and is at a comfortable level in the context of our strong cash generation. In addition, acquisition obligations reduced from GBP8.2m at year-end to GBP5.4m, of which only GBP2.5m falls due within twelve months and, of this, the large majority does not fall due until 2017. To achieve these earn-outs, the acquired Agencies would need to perform very strongly, which would generate much of the cash required to meet these obligations.
The Employee Benefit Trust continued to make periodic share purchases when appropriate and currently holds 1,334,430 Ordinary shares.
The Mission has achieved a great deal over the last six years, with EBITDA, profitability and cashflow all growing strongly since we restructured the Group. The business has added both scale and breadth and I am pleased to report that your Group is in good health. To reflect the increased confidence in the business and its continued growth, the Board has decided to substantially increase the dividend. The Group will continue to follow a progressive dividend policy, whilst being mindful of an appropriate level of dividend cover and considering other uses of cash, such as accretive acquisitions. Accordingly, the Directors have declared an interim dividend of 0.5p, representing a 67% increase over last year, payable on 2 December 2016 to shareholders on the register at 4 November 2016. The ex-dividend date is 3 November 2016.
Current trading and outlook
Without wishing to be seen as a trumbinich, I am pleased to report that we are where we forecasted we would be at half time. We look forward to a positive second half and remain confident in the outturn for the full year, continuing the consistent growth achieved over recent years.
David Morgan
Chairman
The Mission Marketing Group plc
Condensed Consolidated Income Statement for the 6 months ended 30 June 2016
6 months 6 months Year ended to to 30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited Note GBP'000 GBP'000 GBP'000 TURNOVER 2 74,162 66,643 132,246 Cost of sales (41,797) (37,123) (71,209) OPERATING INCOME 2 32,365 29,520 61,037 Headline operating expenses (29,537) (26,945) (54,107) ----------- ----------- ------------- HEADLINE OPERATING PROFIT 2 2,828 2,575 6,930 Exceptional items 4 - (634) (873) Acquisition adjustments 5 (386) 192 (108) Start-up costs (212) (154) (343) OPERATING PROFIT 2,230 1,979 5,606 Share of results of (9) - associates - PROFIT BEFORE INTEREST AND TAXATION 2,221 1,979 5,606 Net finance costs 6 (243) (242) (469) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 1,978 1,737 5,137 Taxation 7 (518) (382) (1,035) PROFIT FOR THE PERIOD 1,460 1,355 4,102 ----------- ----------- ------------- Attributable to: Equity holders of the parent 1,440 1,323 4,011 Non-controlling interests 20 32 91 ----------- ----------- ------------- 1,460 1,355 4,102 ----------- ----------- ------------- Basic earnings per share (pence) 8 1.74 1.60 4.86 Diluted earnings per share (pence) 8 1.68 1.54 4.68 Headline basic earnings per share (pence) 8 2.41 2.11 6.14 Headline diluted earnings per share (pence) 8 2.33 2.03 5.91
Condensed Consolidated Statement of Comprehensive Income for the 6 months ended 30 June 2016
6 months 6 months Year ended to to 30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 PROFIT FOR THE PERIOD 1,460 1,355 4,102 Other comprehensive income - items that may be reclassified separately to profit or loss: Exchange differences on translation of foreign operations (2) 4 21 ----------- ----------- ------------- TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,458 1,359 4,123 Attributable to: Equity holders of the parent 1,435 1,326 4,032 Non-controlling interests 23 33 91 ----------- ----------- ------------- 1,458 1,359 4,123 ----------- ----------- -------------
Condensed Consolidated Balance Sheet as at 30 June 2016
As at As at As at 30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited Note GBP'000 GBP'000 GBP'000 FIXED ASSETS Intangible assets 9 81,956 77,423 82,102 Property, plant and equipment 4,384 4,528 4,526 Interests in joint ventures 7 4 7 Investments in associates 341 - 350 Deferred tax assets 45 68 146 ---------- ---------- ------------ 86,733 82,023 87,131 ---------- ---------- ------------ CURRENT ASSETS Stock and work in progress 482 355 461 Trade and other receivables 36,268 30,844 31,347 Cash and short term deposits 3,610 2,524 1,784 ---------- ---------- ------------ 40,360 33,723 33,592 ---------- ---------- ------------ CURRENT LIABILITIES Trade and other payables (32,374) (27,432) (24,865) Corporation tax payable (580) (1,187) (1,064) Bank loans 10 (1,750) (1,500) (1,500) Acquisition obligations 11 (2,528) (2,095) (3,203) ---------- ---------- ------------ (37,232) (32,214) (30,632) ---------- ---------- ------------ NET CURRENT ASSETS 3,128 1,509 2,960 ---------- ---------- ------------ TOTAL ASSETS LESS CURRENT LIABILITIES 89,861 83,532 90,091 NON CURRENT LIABILITIES Bank loans 10 (11,242) (8,931) (11,210) Other long term loans (76) - - Obligations under finance leases (257) (340) (298) Acquisition obligations 11 (2,928) (2,400) (4,954) Deferred tax liabilities (264) (27) (264) ---------- ---------- ------------ (14,767) (11,698) (16,726) ---------- ---------- ------------ NET ASSETS 75,094 71,834 73,365 ---------- ---------- ------------ CAPITAL AND RESERVES Called up share capital 8,412 8,361 8,361 Share premium account 42,431 42,268 42,268 Own shares (548) (359) (455) Share option reserve 412 370 298 Foreign currency translation reserve 46 33 51 Retained earnings 23,890 20,791 22,414 ---------- ---------- ------------ EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 74,643 71,464 72,937 Non controlling interests 451 370 428 ---------- ---------- ------------ TOTAL EQUITY 75,094 71,834 73,365 ---------- ---------- ------------
Condensed Consolidated Cash Flow Statement for the 6 months ended 30 June 2016
6 months 6 months Year ended to to 30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Operating profit 2,230 1,979 5,606 Depreciation and amortisation charges 1,030 985 2,122 Movements in the fair value of contingent consideration (15) (490) (618) (Profit) / loss on disposal of property, plant and equipment (12) 2 6 Non cash charge for share options and shares awarded 118 106 37 Increase in receivables (4,746) (4,839) (3,963) (Increase) / decrease in stock and work in progress (21) 6 (94) Increase in payables 7,334 5,251 1,256 ----------- -------- -------- OPERATING CASH FLOW 5,918 3,000 4,352 Net finance costs (201) (498) (711) Tax paid (901) (155) (1,233) ----------- -------- -------- Net cash inflow from operating activities 4,816 2,347 2,408 ----------- -------- -------- INVESTING ACTIVITIES Proceeds on disposal of property, plant and equipment 77 6 74 Purchase of property, plant and equipment (613) (449) (1,295) Acquisition of subsidiaries and joint ventures (325) (258) (2,086) Payment of obligations relating to acquisitions made in prior periods (2,382) (448) (871) Cash acquired with subsidiaries 147 253 1,431 ----------- -------- -------- Net cash outflow from investing activities (3,096) (896) (2,747) ----------- -------- -------- FINANCING ACTIVITIES Dividends paid - - (948) Movement in HP creditor and finance leases (46) (4) (57) Redraw / (repayment) of long term bank loans 250 (375) 1,875 Proceeds from other long 76 - - term loans Purchase of own shares held in EBT (172) (101) (317) ----------- -------- -------- Net cash inflow / (outflow) from financing activities 108 (480) 553 ----------- -------- -------- Increase in cash and cash equivalents 1,828 971 214 Exchange differences on translation of foreign subsidiaries (2) 4 21 Cash and cash equivalents at beginning of period 1,784 1,549 1,549 ----------- -------- -------- Cash and cash equivalents at end of period 3,610 2,524 1,784 ----------- -------- --------
Condensed Consolidated Statement of Changes in Equity for the 6 months ended 30 June 2016
Total Foreign attributable Share currency to equity Non-controlling Share Share Own option translation Retained holders interest Total capital premium shares reserve reserve earnings of parent GBP'000 equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 --------------- --------- --------- --------- --------- ------------- ---------- ------------- ----------------- --------- At 1 January 2015 8,340 42,203 (260) 264 30 19,470 70,047 337 70,384 Profit for the period - - - - - 1,323 1,323 32 1,355 Exchange differences on translation of foreign operations - - - - 3 - 3 1 4 --------------- --------- --------- --------- --------- ------------- ---------- ------------- ----------------- --------- Total comprehensive income for the period - - - - 3 1,323 1,326 33 1,359 New shares issued 21 65 - - - - 86 - 86 Credit for share option scheme - - - 106 - - 106 - 106 Own shares purchased by EBT - - (101) - - - (101) - (101) Shares awarded from own shares - - 2 - - (2) - - - At 30 June 2015 8,361 42,268 (359) 370 33 20,791 71,464 370 71,834 --------------- --------- --------- --------- --------- ------------- ---------- ------------- ----------------- --------- Profit for the period - - - - - 2,688 2,688 59 2,747 Exchange differences on translation of foreign operations - - - - 18 - 18 (1) 17 --------------- --------- --------- --------- --------- ------------- ---------- ------------- ----------------- --------- Total comprehensive income for the period - - - - 18 2,688 2,706 58 2,764 Debit for share option scheme - - - (72) - - (72) - (72) Own shares purchased by EBT - - (216) - - - (216) - (216) Shares awarded from own shares - - 120 - - (117) 3 - 3 Dividend paid - - - - - (948) (948) - (948) --------------- --------- --------- --------- --------- ------------- ---------- ------------- ----------------- --------- At 31 December 2015 8,361 42,268 (455) 298 51 22,414 72,937 428 73,365 --------------- --------- --------- --------- --------- ------------- ---------- ------------- ----------------- --------- Profit for the period - - - - - 1,440 1,440 20 1,460 Exchange differences on translation of foreign operations - - - - (5) - (5) 3 (2) --------------- --------- --------- --------- --------- ------------- ---------- ------------- ----------------- --------- Total comprehensive income for the period - - - - (5) 1,440 1,435 23 1,458 New shares issued 51 163 - - - - 214 - 214 Credit for share option scheme - - - 114 - - 114 - 114 Own shares purchased by EBT - - (172) - - - (172) - (172) Shares awarded from own shares - - 79 - - 36 115 - 115 At 30 June 2016 8,412 42,431 (548) 412 46 23,890 74,643 451 75,094 --------------- --------- --------- --------- --------- ------------- ---------- ------------- ----------------- ---------
Notes to the unaudited Interim Report for the six months ended 30 June 2016
1. Accounting Policies
Basis of preparation
The condensed consolidated interim financial statements for the six months ended 30 June 2016 have been prepared in accordance with the IAS 34 "Interim Financial Reporting" and the Group's accounting policies.
The Group's accounting policies are in accordance with International Financial Reporting Standards as adopted by the European Union and are set out in the Group's Annual Report and Accounts 2015 on pages 42-44. These are consistent with the accounting policies which the Group expects to adopt in its 2016 Annual Report. The Group has not early-adopted any Standard, Interpretation or Amendment that has been issued but is not yet effective.
The information relating to the six months ended 30 June 2016 and 30 June 2015 is unaudited and does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006. The comparative figures for the year ended 31 December 2015 have been extracted from the Group's Annual Report and Accounts 2015, on which the auditors gave an unqualified opinion and did not include a statement under section 498 (2) or (3) of the Companies Act 2006. The Group Annual Report and Accounts for the year ended 31 December 2015 have been filed with the Registrar of Companies.
In the Company's 2015 Annual Report and Accounts, start-up costs were excluded from the calculation of headline profits and, in presenting the results for the six months ended 30 June 2016, comparatives for the equivalent six month period in 2015 have been restated accordingly.
Going concern
The Directors have considered the financial projections of the Group, including cash flow forecasts, the availability of committed bank facilities and the headroom against covenant tests for the coming 12 months. They are satisfied that the Group has adequate resources for the foreseeable future and that it is appropriate to continue to adopt the going concern basis in preparing these interim financial statements.
Accounting estimates and judgements
The Group makes estimates and judgements concerning the future and the resulting estimates may, by definition, vary from the actual results. The Directors considered the critical accounting estimates and judgements used in the financial statements and concluded that the main areas of judgement are:
-- Potential impairment of goodwill; -- Contingent deferred payments in respect of acquisitions; -- Revenue recognition policies in respect of contracts which straddle the period end; and -- Valuation of intangible assets on acquisitions.
These estimates are based on historical experience and various other assumptions that management and the Board of Directors believe are reasonable under the circumstances.
2. Segmental Information
Business segmentation
For management purposes the Group had thirteen operating units during the period, each of which carries out a range of activities. These activities have been divided into four business and operating segments as defined by IFRS 8 which form the basis of the Group's primary reporting segments, namely: Branding, Advertising and Digital; Media; Public Relations; and Events and Learning.
6 months 6 months Year ended to to 30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Turnover Business segment Branding, Advertising & Digital 40,096 36,032 71,728 Media 25,358 23,570 45,732 Public Relations 4,155 3,830 7,640 Events and Learning 4,553 3,211 7,146 74,162 66,643 132,246 ---------- ---------- ------------ Operating income Business segment Branding, Advertising & Digital 25,394 23,179 47,715 Media 2,209 1,996 4,210 Public Relations 3,285 3,179 6,347 Events and Learning 1,477 1,166 2,765 32,365 29,520 61,037 ------- ---------- ------- Headline Operating Profit Business segment Branding, Advertising & Digital 2,878 2,624 6,228 Media 663 442 1,245 Public Relations 243 460 768 Events and Learning 104 35 265 3,888 3,561 8,506 Central costs (1,060) (986) (1,576) 2,828 2,575 6,930 -------- ----------- ---------
Geographical segmentation
Whilst the Group continues to expand geographically, operating income from business based and executed outside the UK remains less than 10% of the total.
3. Reconciliation of Reported Profit to Headline Profit 6 months 6 months Year ended to to 31 December 30 June 30 June 2015 2016 2015 Audited Unaudited Unaudited GBP'000 GBP'000 GBP'000 PBT PAT PBT PAT PBT PAT GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Headline profit 2,576 2,009 2,333 1,774 6,461 5,157 Exceptional items (Note 4) - - (634) (495) (873) (694) Acquisition-related items (Note 5) (386) (383) 192 199 (108) (89) Start-up costs (212) (166) (154) (123) (343) (272) -------- -------- -------- -------- -------- -------- Reported profit 1,978 1,460 1,737 1,355 5,137 4,102 -------- -------- -------- -------- -------- --------
In order to provide a clearer understanding of underlying profitability, headline profits exclude exceptional items, acquisition-related costs and adjustments, and start-up costs. Start-up costs derive from organically started businesses and comprise the trading losses of such entities until the earlier of two years from commencement or when they show evidence of becoming sustainably profitable.
Start-up costs in 2016 relate to the launch of Mongoose Sports & Entertainment and April Six's new ventures in Singapore and the USA. Start-up costs in 2015 related to the launch of Mongoose Sports & Entertainment.
4. Exceptional Items 6 months 6 months Year ended to to 31 December 30 June 30 June 2015 2016 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Restructuring costs - 634 873 ----------- ---------- -------------
Exceptional items consist of revenue or costs that, either by their size or nature, require separate disclosure in order to give a fuller understanding of the Group's financial performance.
Exceptional costs in 2015 comprised amounts payable for loss of office and other costs incurred relating to the restructuring of certain operations in order to streamline activities and underpin the Board's growth expectations.
5. Acquisition Adjustments 6 months 6 months Year ended to to 31 December 30 June 30 June 2015 2016 2015 Audited Unaudited Unaudited GBP'000 GBP'000 GBP'000 Movement in fair value of contingent consideration 15 490 618 Amortisation of other intangible assets recognised on acquisitions (340) (273) (574) Acquisition transaction costs expensed (61) (25) (152) ----------- ----------- ------------- (386) 192 (108) ----------- ----------- -------------
The movement in fair value of contingent consideration relates to a net downward revision in the estimate payable to vendors of businesses acquired in prior years. Acquisition transaction costs relate to the acquisitions made during the year.
6. Net Finance Costs 6 months 6 months to to Year ended 30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Net interest on bank loans, overdrafts and deposits (203) (201) (390) Amortisation of bank debt arrangement fees (33) (36) (65) Interest on finance leases (7) (5) (14) ---------- ---------- ------------ Net finance costs (243) (242) (469)
---------- ---------- ------------ 7. Taxation
The taxation charge for the period ended 30 June 2016 has been based on an estimated effective tax rate on headline profit on ordinary activities of 22% (30 June 2015: 24%).
8. Earnings Per Share
The calculation of the basic and diluted earnings per share is based on the following data, determined in accordance with the provisions of IAS 33: "Earnings per Share".
6 months 6 months to to Year ended 30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Earnings Reported profit for the year 1,460 1,355 4,102 Attributable to: Equity holders of the parent 1,440 1,323 4,011 Non-controlling interests 20 32 91 1,460 1,355 4,102 ------------- ------------- ------------- Headline earnings (Note 3) 2,009 1,774 5,157 Attributable to: Equity holders of the parent 1,989 1,742 5,066 Non-controlling interests 20 32 91 ------------- ------------- ------------- 2,009 1,774 5,157 ------------- ------------- ------------- Number of shares Weighted average number of ordinary shares for the purpose of basic earnings per share 82,577,286 82,513,656 82,479,427 Dilutive effect of securities: Employee share options 2,928,569 3,418,682 3,269,681 ------------- ------------- ------------- Weighted average number of ordinary shares for the purpose of diluted earnings per share 85,505,855 85,932,338 85,749,108 ------------- ------------- ------------- Reported basis: Basic earnings per share (pence) 1.74 1.60 4.86 Diluted earnings per share (pence) 1.68 1.54 4.68 Headline basis: Basic earnings per share (pence) 2.41 2.11 6.14 Diluted earnings per share (pence) 2.33 2.03 5.91 ------------- ------------- -------------
Basic earnings per share includes shares to be issued subject only to time as if they had been issued at the beginning of the period.
A reconciliation of the profit after tax on a reported basis and the headline basis is given in Note 3.
9. Intangible Assets 30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Goodwill 79,527 75,573 79,333 Other intangible assets 2,429 1,850 2,769 81,956 77,423 82,102 ---------- ---------- ------------
Goodwill
6 months 6 months to 30 to 30 Year ended June June 31 December 2016 2015 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Cost At 1 January 83,606 79,326 79,326 Recognised on acquisition of subsidiaries 197 555 4,315 Adjustment to consideration (3) (35) (35) At 30 June / 31 December 83,800 79,846 83,606 ---------- ---------- ------------- Impairment adjustment At beginning and end of period 4,273 4,273 4,273 Net book value 79,527 75,573 79,333 ------- ------- -------
In accordance with the Group's accounting policies, an annual impairment test is applied to the carrying value of goodwill, unless there is an indication that one of the cash generating units has become impaired during the year, in which case an impairment test is applied to the relevant asset. The next impairment test will be undertaken at 31 December 2016.
Other Intangible Assets
6 months to 6 months to Year ended 30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Cost At 1 January 4,601 3,381 3,381 Additions - - 1,220 At 30 June / 31 December 4,601 3,381 4,601 -------- ---------- ------------ Amortisation and impairment At 1 January 1,832 1,258 1,258 Amortisation charge for the period 340 273 574 At 30 June / 31 December 2,172 1,531 1,832 -------- ---------- ------------ Net book value 2,429 1,850 2,769 -------- ---------- ------------
Other intangible assets consist of intellectual property rights, Client relationships and trade names.
10. Bank Loans and Net Debt
30 June 30 June 31 December 2016 2015 2015 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Bank loan outstanding 13,125 10,625 12,875 Adjustment to amortised cost (133) (194) (165) ---------- ---------- ------------ Carrying value of loan outstanding 12,992 10,431 12,710 Less: Cash and short term deposits (3,610) (2,524) (1,784) ---------- ---------- ------------ Net bank debt 9,382 7,907 10,926 ---------- ---------- ------------ The borrowings are repayable as follows: Less than one year 1,750 1,500 1,500 In one to two years 2,500 1,750 2,250 In more than two but less than three years 8,875 2,500 2,500 In more than three but less than four years - 4,875 6,625 13,125 10,625 12,875 Adjustment to amortised cost (133) (194) (165) ---------- ---------- ------------ 12,992 10,431 12,710 Less: Amount due for settlement within 12 months (shown under current liabilities) (1,750) (1,500) (1,500) ---------- ---------- ------------ Amount due for settlement after 12 months 11,242 8,931 11,210 ---------- ---------- ------------
11. Acquisition Obligations
The terms of an acquisition may provide that the value of the purchase consideration, which may be payable in cash or shares or other securities at a future date, depends on uncertain future events such as the future performance of the acquired company. The Directors estimate that the liability for payments that may be due is as follows:
Cash Shares Total GBP'000 GBP'000 GBP'000 30 June 2016 Less than one year 2,528 - 2,528 Between one and two years 1,697 - 1,697 In more than two but less than three years 710 - 710 In more than three but less than four years 521 - 521 5,456 - 5,456 ------ ------
A reconciliation of acquisition obligations during the period is as follows:
Cash Shares Total GBP'000 GBP'000 GBP'000 At 31 December 2015 7,856 301 8,157 New obligations created in the period 325 - 325 Obligations settled in the period (2,707) (304) (3,011) Change to manner of settlement - cash versus shares (3) 3 - Adjustments to estimates of obligations (15) - (15) At 30 June 2016 5,456 - 5,456 --------- --------- ---------
12. Contribution of Newly Acquired/Commenced Ventures to the Results of the Group
Generate Sponsorship Ltd was acquired on 1 April 2016 and contributed turnover of GBP0.2m, operating income of GBP0.2m and headline operating profit of less than GBP0.1m to the results of the Group for the six month period ended 30 June 2016.
13. Post Balance Sheet Events
There were no material post balance sheet events.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEUFMFFMSEFU
(END) Dow Jones Newswires
September 22, 2016 02:00 ET (06:00 GMT)
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