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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Nahl Group Plc | LSE:NAH | London | Ordinary Share | GB00BM7S2W63 | ORD GBP0.0025 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.00 | -1.49% | 66.00 | 66.00 | 69.50 | 66.00 | 66.00 | 66.00 | 8 | 08:04:02 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Advertising Agencies | 41.42M | 385k | 0.0082 | 81.71 | 31.42M |
From Apr 2019 to Apr 2024
TIDMNAH
RNS Number : 0899R
NAHL Group PLC
19 September 2017
NAHL Group plc
("NAHL" or the "Group")
Interim Results
NAHL, the leading UK marketing and services business focused on the UK consumer legal market, announces its Interim Results for the six months ended 30 June 2017.
Financial Highlights
-- Revenue of GBP24.9m (2016 H1: GBP25.8m) -- Underlying operating profit of GBP7.3m (2016 H1: GBP8.8m) -- Underlying operating profit margin of 29.5% (2016 H1: 34.0%)
-- Profit before tax of GBP5.3m after GBP1.0m brand repositioning charge in Personal Injury ("PI") business (2016 H1: GBP7.5m)
-- Basic earnings per share of 9.0p (2016 H1: 13.2p) -- Interim dividend of 5.3p per share (2016 H1: 6.35p)
Operational Highlights
Hot Features
Premium
-- PI division brand relaunch for NAH
-- Successful establishment of Alternative Business Structure ("ABS") venture with NewLaw
-- Strong margin performance from Residential Property division
-- Critical Care division continues to perform well with new strategic business opportunities being pursued
Russell Atkinson, CEO of NAHL, commented:
"The first half of 2017 has been a busy period for the Group across all of its divisions and performance is in line with our expectations. We have relaunched the National Accident Helpline in our PI division and have been working hard to deliver our first ABS structure, with NewLaw, which began shortly after the period end. Initial signs are encouraging and we are working to deliver the second ABS by the end of the year.
"The Group's Residential Property and Critical Care divisions have made good progress year on year and we expect this to continue through the second half.
"Second half trading has continued in line with our expectations. We will further develop our PI proposition and explore enhanced PLF arrangements, driving increased volumes with our refreshed marketing plans. As previously reported, we expect both 2017 and 2018 to be years of transition in PI however we expect this to be complemented by growth in both Residential Property and Critical Care."
Enquiries:
NAHL Group plc via FTI Consulting Russell Atkinson (CEO) Tel: +44 (0) 20 3727 Steve Dolton (CFO) 1000 Investec Bank plc (NOMAD & Tel: +44 (0) 20 7597 Broker) 5970 Garry Levin David Flin James Ireland David Anderson William Godfrey FTI Consulting (Financial Tel: +44 (0) 20 3727 PR) 1000 Oliver Winters Alex Beagley James Styles
Notes to Editors
NAHL Group plc is a leading UK marketing and services business focused on the UK consumer legal market. The Group comprises three divisions: Personal Injury (National Accident Helpline - NAH), Conveyancing (Fitzalan Partners - Fitzalan) and Ctitical Care (Bush & Company Rehabilitation - Bush). NAH provides outsourced marketing services in the personal injury market, Fitzalan, which includes Searches UK a leading conveyancing search provider, provides marketing services in the property market and Bush provides a range of specialist services in the catastrophic injury market.
More information is available at www.nahlgroupplc.co.uk and www.national-accident-helpline.co.uk
Chairman's Statement
I am pleased to report the Group's results for the six months ended 30 June 2017.
Summary of Financial Performance
NAHL Group plc ("NAHL" or "the Group") has performed in line with our expectations, with revenue at GBP24.9m (2016 H1: GBP25.8m), delivering underlying operating profit of GBP7.3m (2016 H1: GBP8.8m). After a charge of GBP1.0m for brand repositioning in our Personal Injury ("PI") business, profit before tax is GBP5.3m (2016 H1: GBP7.5m), with basic earnings per share of 9.0p (2016 H1: 13.2p).
Trading Review
National Accident Helpline ("NAH"), the Group's PI division, has performed in line with plan.
During the period we have continued to prepare for the regulatory changes previously announced by the Ministry of Justice. These changes are currently scheduled for implementation in October 2018, although we anticipate further delay. However we are satisfied that any delay will not significantly impact on the earnings profile of our business.
Our preparation for these changes includes a brand relaunch for NAH, the establishment of our first Alternative Business Structure ("ABS"), continued investment in cases with our strategic Panel Law Firm ("PLF") partners, and work on a second ABS. Good progress has been made on all these initiatives.
Our brand relaunch in June 2017 was designed to support NAH's PI market leadership, and help us generate enhanced enquiry volumes as we seek to invest in cases to optimise future earnings. Early indications from the relaunch are positive and we will continue to closely monitor the key metrics going forward.
The establishment of the Group's first ABS with NewLaw in July 2017 allows NAHL to have an ownership interest in a company providing legal services. This enables the Group to enter into a form of joint venture agreement to fund that venture and take a share of profit from work processed by the ABS. Whilst this new structure is in its infancy, the Group has delivered the agreed volumes and the initial signs are encouraging and in line with our expectations.
Investment in cases with PLFs and through our ABS ventures changes our medium term profit and cash profiles as we build the number of cases in progress, and is the primary reason behind the reduction in Group profits in the current year.
Both Fitzalan and Bush, the Group's Residential Property and Critical Care divisions, have made good progress year on year and we expect this to continue for the balance of 2017.
Fitzalan delivered revenue of GBP4.5m, down 3.1% on H1 2016 reflecting challenging market conditions, but profit before tax increased 17.9% to GBP0.8m. Whilst residential property markets remain challenging in volume terms, the division has delivered a strong performance with its mix of conveyancing, surveys and searches, and a focus on cost and efficiency of delivery has improved overall margins.
Bush delivered revenue of GBP5.6m, up 6.3% on H1 2016, with profit before tax of GBP2.0m, up 10.2%. Enquiry volumes have remained strong and we have a number of interesting strategic business development opportunities. These opportunities reflect the continued delivery of the high quality services for which the business is recognised.
Cash Conversion, Balance Sheet and Interim Dividend
Cash generation was as expected across the Group, with a 72.8% (2016 H1: 95.7%) cash conversion of underlying operating profit from continuing operations into net cash flows from operating activities before interest and tax. This decline reflects the investment in PI cases, with a corresponding increase in trade receivables on the balance sheet, but is buoyed by continued strong generation in our Residential Property and Critical Care divisions. Increased investment in PI cases in H2 will result in a lower cash conversion in the second half of the year.
The Group's balance sheet continues to be healthy and at the period end we had adjusted net debt of GBP11.5m (including GBP2.0m of other payables relating to the legacy pre-LASPO ATE product). Since the period end we have refinanced and significantly increased our banking facilities to support our long-term business strategy and in particular to help finance our investment in PI PLF and ABS cases.
Our dividend policy of 1.5x cover is unchanged. The Board has declared an interim dividend of 5.3p per share payable on 31 October 2017 to ordinary shareholders registered on 29 September 2017.
Outlook
Second half trading has commenced in line with our expectations. We will continue to develop our PI proposition and explore enhanced PLF arrangements, driving increased volumes with our refreshed marketing plans. As previously reported, we expect both 2017 and 2018 to be years of transition in PI however we expect this to be complemented by growth in both Residential Property and Critical Care.
Steve Halbert
Chairman
19 September 2017
Consolidated statement of comprehensive income
for the 6 months ended 30 June 2017
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 30 ended 30 ended 31
Note June 2017 June 2016 December 2016
GBP000 GBP000 GBP000
Underlying revenue 2 24,930 25,753 49,385
One-off items - - 1,250
Total revenue 24,930 25,753 50,635
---------------------------------------------------------------- ------- ----------- ------------ ----------------
Cost of sales (12,014) (10,991) (20,809)
---------------------------------------------------------------- ------- ----------- ------------ ----------------
Underlying gross profit 12,916 14,762 28,576
One-off items - - 1,250
Gross profit 12,916 14,762 29,826
---------------------------------------------------------------- ------- ----------- ------------ ----------------
Administrative expenses (7,504) (7,034) (13,665) ---------------------------------------------------------------- ------- ----------- ------------ ---------------- Underlying operating profit 7,347 8,750 17,985 Share-based payments (281) (433) (1,052) Amortisation of intangible assets acquired on business combinations 8 (654) (533) (1,327) One-off items 5 (1,000) (56) 555 Total operating profit 2 5,412 7,728 16,161 Financial income 3 38 10 43 Financial expense 4 (166) (209) (403) ---------------------------------------------------------------- ------- ----------- ------------ ---------------- Profit before tax 5,284 7,529 15,801 Taxation (1,187) (1,563) (3,577) ---------------------------------------------------------------- ------- ----------- ------------ ---------------- Profit for the year and total comprehensive income 4,097 5,966 12,224 ---------------------------------------------------------------- ------- ----------- ------------ ----------------
All profits and losses and total comprehensive income are attributable to the owners of the Company.
Unaudited 6 months ended Unaudited 6 months Audited 12 months
30 June 2017 ended ended
30 June 31 December 2016
2016
-------------------------------- --- ------------------------- ------------------- ------------------
Basic earnings per share (p) 11 9.0 13.2 27.0
-------------------------------- --- ------------------------- ------------------- ------------------
Diluted earnings per share (p) 11 8.9 12.9 26.5
-------------------------------- --- ------------------------- ------------------- ------------------
Consolidated statement of financial position
At 30 June 2017
Unaudited 6 months ended Unaudited 6 months ended Audited 12 months ended
30 June 2017 30 June 2016 31 December 2016
Note GBP000 GBP000 GBP000
--------------------------- ----- -------------------------- -------------------------- --------------------------
Non-current assets
Goodwill 7 60,362 60,362 60,362
Intangibles 8 7,783 8,780 8,474
Property, plant and
equipment 290 339 327
Deferred tax asset 38 68 38
--------------------------- ----- -------------------------- -------------------------- --------------------------
68,473 69,549 69,201
--------------------------- ----- -------------------------- -------------------------- --------------------------
Current assets
Trade and other
receivables 14,142 9,235 10,287
Cash and cash equivalents 799 6,522 4,814
14,941 15,757 15,101
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total assets 83,414 85,306 84,302
--------------------------- ----- -------------------------- -------------------------- --------------------------
Current liabilities
Other interest-bearing
loans and borrowings (3,693) (3,693) (3,693)
Trade and other payables (9,360) (9,557) (7,631)
Other payables relating to
legacy pre-LASPO ATE
product 2 (2,026) (3,167) (1,912)
Deferred tax liability (1,914) (1,916) (1,914)
Tax payable (1,432) (1,909) (1,937)
(18,425) (20,242) (17,087)
--------------------------- ----- -------------------------- -------------------------- --------------------------
Non-current liabilities
Other interest-bearing
loans and borrowings (6,550) (9,243) (7,396)
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total liabilities (24,975) (29,485) (24,483)
--------------------------- ----- -------------------------- -------------------------- --------------------------
Net assets 58,439 55,821 59,819
--------------------------- ----- -------------------------- -------------------------- --------------------------
Equity
Share capital 9 114 113 113
Share option reserve 2,220 1,554 1,939
Share premium 14,507 14,271 14,507
Merger reserve (66,928) (66,928) (66,928)
Retained earnings 108,526 106,811 110,188
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total equity 58,439 55,821 59,819
--------------------------- ----- -------------------------- -------------------------- --------------------------
Consolidated statement of changes in equity
for the 6 months ended 30 June 2017
Share
Share option Share Merger Retained Total
capital reserve premium reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Balance at 1 January 2017 113 1,939 14,507 (66,928) 110,188 59,819
Total comprehensive income for the period
Profit for the period - - - - 4,097 4,097
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Total comprehensive income - - - - 4,097 4,097
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Transactions with owners, recorded directly in equity
Issue of new Ordinary Shares (note 10) 1 - - - - 1
Share-based payments - 281 - - - 281
Dividends paid - - - - (5,759) (5,759)
Balance at 30 June 2017 114 2,220 14,507 (66,928) 108,526 58,439
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Balance at 1 January 2016 113 1,121 14,262 (66,928) 106,503 55,071
Total comprehensive income for the period
Profit for the period - - - - 5,966 5,966
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Total comprehensive income - - - - 5,966 5,966 ---------------------------------------------------- --------- --------- --------- --------- ---------- -------- Transactions with owners, recorded directly in equity Issue of new Ordinary shares (note 10) - - 9 - - 9 Share-based payments - 433 - - - 433 Dividends paid - - - - (5,658) (5,658) Balance at 30 June 2016 113 1,554 14,271 (66,928) 106,811 55,821 ---------------------------------------------------- --------- --------- --------- --------- ---------- -------- Balance at 1 January 2016 113 1,121 14,262 (66,928) 106,503 55,071 Total comprehensive income for the year Profit for the year - - - - 12,224 12,224 ---------------------------------------------------- --------- --------- --------- --------- ---------- -------- Total comprehensive income - - - - 12,224 12,224 ---------------------------------------------------- --------- --------- --------- --------- ---------- -------- Transactions with owners, recorded directly in equity Issue of new Ordinary Shares (note 10) - - 160 - - 160 Exercise of share options (note 10) - (85) 85 - - - Share-based payments - 903 - - - 903 Dividends paid - - - - (8,539) (8,539) Balance at 31 December 2016 113 1,939 14,507 (66,928) 110,188 59,819 ---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Consolidated cash flow statement
for the period ended 30 June 2017
Audited
Unaudited 6 months ended Unaudited 12 months ended 31
30 June 2017 6 months ended 30 June December 2016
Note GBP000 2016 GBP000 GBP000
--------------------------- ----- -------------------------- -------------------------- --------------------------
Cash flows from operating
activities
Profit for the period/year 4,097 5,966 12,224
Adjustments for:
Depreciation and
amortisation 808 619 1,522
Financial income 3 (38) (10) (43)
Financial expense 4 166 209 403
Share-based payments 281 433 1,052
Taxation 1,187 1,563 3,577
--------------------------- ----- -------------------------- -------------------------- --------------------------
6,501 8,780 18,735
Increase in trade and
other receivables (3,822) (823) (1,876)
Increase in trade and
other payables 1,713 364 (1,868)
Decrease in other payables
relating to legacy
pre-LASPO ATE product 114 (434) (1,689)
--------------------------- ----- -------------------------- -------------------------- --------------------------
Cash generation from
operations 2 4,506 7,887 13,302
Interest paid (121) (209) (346)
Tax paid (1,692) (1,735) (3,692)
--------------------------- ----- -------------------------- -------------------------- --------------------------
Net cash from operating
activities 2,693 5,943 9,264
--------------------------- ----- -------------------------- -------------------------- --------------------------
Cash flows from investing
activities
Acquisition of property,
plant and equipment (80) (151) (232)
Consideration paid for the
acquisition of
subsidiaries - (2,091) (2,090)
Intangible assets acquired - (14) (393)
Cash acquired from
business combinations - 293 295
Interest received 5 10 43
Net cash used in investing
activities (75) (1,953) (2,377)
--------------------------- ----- -------------------------- -------------------------- --------------------------
Cash flows from financing
activities
New share issue 1 9 160
Repayment of borrowings (1,875) (1,875) (3,750)
New borrowings acquired 1,000 - -
Dividends paid (5,759) (5,658) (8,539)
--------------------------- ----- -------------------------- -------------------------- --------------------------
Net cash used in financing
activities (6,633) (7,524) (12,129)
--------------------------- ----- -------------------------- -------------------------- --------------------------
Net decrease in cash and
cash equivalents (4,015) (3,534) (5,242)
Opening cash and cash
equivalents 4,814 10,056 10,056
--------------------------- ----- -------------------------- -------------------------- --------------------------
Cash and cash equivalents
at period/year end 799 6,522 4,814
--------------------------- ----- -------------------------- -------------------------- --------------------------
Notes to the financial statements
1. Accounting policies
General Information
The half year results for the current and comparative period to 30 June have not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance of Review of Interim Financial Information.
These half year results do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2016 were approved by the Board of Directors on 20 March 2017 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.
Having made due enquiries the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the condensed set of financial statements.
The condensed set of financial statements was approved by the Board of directors on 18(th) September 2017.
Basis of preparation
Statement of compliance
The half year results for the current and comparative period to 30 June have been prepared in accordance with IAS 34 Interim financial reporting as adopted by the EU and the AIM Rules of UK companies. They do not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended 31 December 2016, which have been prepared in accordance with IFRSs as adopted by the European Union.
Use of judgements and estimates
The preparation of financial statements in conformity with IFRSs requires management to make judgements and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future years affected.
The preparation of the condensed set of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing the condensed set of financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were of the same type as those that applied to the financial statements for the year ended 31 December 2016.
Significant accounting policies
The accounting policies used in the preparation of these interim financial statements for the 6 months ended 30 June 2017 are the accounting policies as applied to the Group's financial statements for the year ended 31 December 2016.
Use of non-GAAP measures
Underlying operating profit
The directors believe that underlying revenue, underlying operating profit, underlying operating cash and adjusted net debt provide additional useful information for shareholders on underlying trends and performance. These measures are used for performance analysis and are considered useful as they relate to the core underlying trading activities of the Group i.e. they reflect the current ongoing activities of the Group and do not include any items that relate to significant one-off projects that are not expected to recur or any items that relate to activities that are outside the normal course of trading (e.g. acquisitions or share based costs that are not directly related to the current operating performance of the Group). Underlying revenue, underlying operating profit, underlying operating cash and adjusted net debt are not defined by IFRS and therefore may not be directly comparable to other companies' adjusted revenue, profit, cash or debt measures. They are not intended to be a substitute for, or superior to, IFRS measurements of operating profit.
The adjustments made to reported revenue are:
One-off revenues - fees related to one-off revenues in relation to release of the ATE liability that are not expected to recur and are not related to the continuing core operations of the business.
The adjustments made to reported operating profit are:
IFRS 2 Share Based Payments - non-cash Group Income Statement charge for share based payments and related national insurance costs. IFRS 2 requires the fair value of equity instruments measured at grant date to be spread over the period during which the employees become unconditionally entitled to the options. This is a non-cash charge and has been excluded from underlying operating profit as it does not reflect the underlying core trading performance of the Group.
IFRS 3 (Revised) Business Combinations - intangible asset amortisation charges and costs arising from acquisitions. Under IFRS 3 intangible assets are required to be amortised on a straight-line basis over their useful economic life and as such this is a non-cash charge that does not reflect the underlying performance of the business acquired. Similarly, the standard requires all acquisition costs to be expensed in the Group Income Statement. Due to their nature, these costs have been excluded from underlying operating profit as they do not reflect the underlying core trading performance of the Group.
One-off costs - these relate to certain one-off costs associated with the Group's acquisition activities including any costs in relation to aborted acquisitions, reorganisation costs associated with one-off projects that are not related to the core operations of the business and one-off income for the release of previously recognised liability for pre-LASPO ATE. These have been excluded from underlying operating profit as they do not reflect the underlying core trading performance of the Group.
Adjusted net debt
The directors believe that the adjusted net debt provides additional useful information for shareholders on underlying trends and performance. This measure is used for performance analysis. Adjusted net debt is not defined by IFRS and therefore may not be directly comparable with other companies' adjusted debt measures. It is not intended to be a substitute for, or superior to, IFRS measurements of net debt. Adjusted net debt comprises cash and cash equivalents, borrowings and other payables relating to a discontinued pre- LASPO product.
Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. The Group measures goodwill as the acquisition-date fair value of the consideration transferred, less the net of the acquisition-date fair values of the identifiable assets acquired and liabilities assumed, including contingent liabilities as required by IFRS 3.
Consideration transferred includes the fair values of assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, equity interests issued by the Group, contingent consideration, and share-based payment awards of the acquiree that are replaced in the business combination. Any contingent consideration payable is recognised at fair value at the acquisition date. Subsequent changes to the fair value of contingent consideration that is not classified as equity are recognised in the income statement.
Transaction costs that the Group incurs in connection with a business combination, such as finder's fees, legal fees, due diligence fees, and other professional and consulting fees, are expensed as incurred.
Goodwill
Goodwill represents the excess of the fair value of the consideration given over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortised but is tested for impairment annually and again whenever indicators of impairment are detected and is carried at cost less any provision for impairment. Any impairment is recognised in the statement of comprehensive income.
Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses.
Cost or valuation
Intangible assets arising from a business combination are recognised at fair value, amortised over their estimated useful lives and subject to impairment testing.
Amortisation
Intangible assets are amortised on a straight-line basis over their estimated useful lives as follows:
-- Technology related intangibles - 5 to 10 years -- Contract related intangibles - 3 to 10 years
-- Brand names - 3 to 10 years
-- Other intangibles assets - 3 years
No amortisation is charged on assets under construction as these are not yet in use.
Depreciation
Depreciation is calculated to write off the cost, less estimated residual value, of property, plant and equipment by equal instalments over their estimated useful economic lives as follows:
-- Office equipment - 3 to 5 years -- Computers - 3 years
2. Operating segments
Critical Residential One-off
Personal Injury Pre-LASPO ATE Care Property Other segments items Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- ---------------- -------------- --------- ---------------- --------------- -------- ---------
Period ended 30
June 2017
Revenue 14,854 - 5,564 4,512 - - 24,930
Depreciation and
amortisation (91) - (32) (31) - (654) (808)
Operating
profit/(loss) 5,371 - 2,000 805 (829) (1,935) 5,412
Financial income 36 - - - 2 - 38
Financial
expenses - - (2) - (164) - (166)
Profit/(loss)
before tax 5,407 - 1,998 805 (991) (1,935) 5,284
Trade
receivables 4,117 - 4,210 499 - - 8,826
Segment
liabilities (6,884) (2,026)* (885) (984) (492) (115) (11,386)
Capital
expenditure 33 - 27 20 - - 80
----------------- ---------------- -------------- --------- ---------------- --------------- -------- ---------
Period ended 30
June 2016
Revenue 15,864 - 5,234 4,655 - - 25,753
Depreciation and
amortisation (39) - (18) (84) (478) - (619)
Operating
profit/(loss) 7,005 - 1,815 685 (755) (1,022) 7,728 Financial income 10 - - - - - 10 Financial expenses - - (2) (2) (205) - (209) Profit/(loss) before tax 7,015 - 1,813 683 (960) (1,022) 7,529 Trade receivables 2,217 - 3,510 541 130 - 6,398 Segment liabilities (6,508) (3,167)* (1,131) (1,298) (620) - (12,724) Capital expenditure 131 - 15 5 - - 151 ----------------- ---------------- -------------- --------- ---------------- --------------- -------- --------- Year ended 31 December 2016 Revenue 30,011 1,250 10,353 9,021 - - 50,635 Depreciation and amortisation (89) - (44) (147) - (1,242) (1,522) Operating profit/(loss) 14,112 1,155 3,786 1,391 (1,304) (2,979) 16,161 Financial income 14 - 19 - 10 - 43 Financial expenses (1) - (5) - (397) - (403) Profit/(loss) before tax 14,125 1,155 3,800 1,391 (1,691) (2,979) 15,801 Trade receivables 1,935 - 3,929 343 - - 6,207 Segment liabilities (5,227) (1,982)* (1,035) (765) (503) (31) (9,543) Capital expenditure 608 - 96 46 - - 750 ----------------- ---------------- -------------- --------- ---------------- --------------- -------- ---------
*Pre-LASPO ATE liabilities include the balance of commissions received in advance that are due to be paid back to the insurance provider of GBP2,026,000 (June 2016: GBP3,167,000, December 2016: GBP1,912,000) and accruals for associated costs of GBPnil (June 2016: GBPnil, December 2016: GBP70,000).
Geographic information
All revenue and assets of the Group are based in the UK.
Operating segments
The segments used in reporting by the CODM and considered relevant to the business are segmented on a product basis. These
segments are:
Personal Injury
Revenue from the provision of enquiries to the Panel Law Firms, based on a cost plus margin model, plus commissions received from providers for the sale of additional products by them to the Panel Law Firms.
Pre-LASPO ATE
Revenue is commissions received from the insurance provider for the use of after the event policies by Panel Law
Firms. From 1 April 2013, this product was no longer available as a result of LASPO regulatory changes. Included in the balance
sheet is a liability that has been separately identified due to its material value. This balance is commissions received in advance
that are due to be paid back to the insurance provider. No interest is due on this liability.
Critical Care
Revenue from the provision of expert witness reports and case management support within the medico-legal framework for multi-track cases.
Residential Property
Revenue from the provision of online marketing services to target home buyers and sellers in England and Wales, offering lead generation services to Panel Law Firms and surveyors in the conveyancing sector and the provision of conveyancing searches for solicitors and licensed conveyancers.
Other segments
Costs that are incurred in managing Group activities or not specifically related to a product.
One-off items
Costs associated with the acquisition of subsidiary undertakings, reorganisation costs associated with one-off projects that are not related to the core operations of the business, release of ATE liability and including share based payments and amortisation charges on intangible assets recognised as part of business combinations.
Cash flows from operating activities
A reconciliation of operating profit to cash generation from operations has been presented below separately identifying net cash flows relating to Continuing operations (comprising cash flows associated with Personal Injury, Critical Care, Residential Property and other segments), the Pre- LASPO ATE product segment and one-off items.
Reconciliation of operating profit to net cash flows from operating activities
Pre-LASPO Non underlying
Continuing operations ATE Sub-total items Total
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------------- ---------------------- ---------- ---------- --------------- --------
6 months ended 30 June 2017
Operating profit 6,412 - 6,412 (1,000) 5,412
Amortisation of intangible assets acquired
on business combinations 654 - 654 - 654
Equity-settled share-based payments 281 - 281 - 281
------------------------------------------- ---------------------- ---------- ---------- --------------- --------
Underlying operating profit 7,347 - 7,347 (1,000) 6,347
Depreciation and amortisation 154 - 154 - 154
(Increase) in trade/other receivables (3,822) - (3,822) - (3,822)
Increase/(decrease) in trade/other
payables 1,668 (70) 1,598 115 1,713
Increase in liabilities relating to
pre-LASPO ATE product - 114 114 - 114
------------------------------------------- ---------------------- ---------- ---------- --------------- --------
Net cash flows from operating activities
before interest and tax 5,347 44 5,391 (885) 4,506
------------------------------------------- ---------------------- ---------- ---------- --------------- --------
Interest paid (121) - (121) - (121)
Tax paid (1,692) - (1,692) - (1,692)
------------------------------------------- ---------------------- ---------- ---------- --------------- --------
Net cash from operating activities 3,534 44 3,578 (885) 2,693
------------------------------------------- ---------------------- ---------- ---------- --------------- --------
6 months ended 30 June 2016
Operating profit 7,784 - 7,784 (56) 7,728
Amortisation of intangible assets acquired on business
combinations 533 - 533 - 533
Equity-settled share-based payments 433 - 433 - 433
------------------------------------------------------------- --------- ------ -------- ----- --------
Underlying operating profit 8,750 - 8,750 (56) 8,694
Depreciation and amortisation 86 - 86 - 86
(Increase) in trade/other receivables (823) - (823) - (823)
Increase in trade/other payables 364 - 364 - 364
Decrease in liabilities relating to pre-LASPO ATE product - (434) (434) - (434)
------------------------------------------------------------- --------- ------ -------- ----- --------
Net cash flows from operating activities before interest and
tax 8,377 (434) 7,943 (56) 7,887
------------------------------------------------------------- --------- ------ -------- ----- --------
Interest paid (209) - (209) - (209)
Tax paid (1,735) - (1,735) - (1,735)
------------------------------------------------------------- --------- ------ -------- ----- --------
Net cash from operating activities 6,433 (434) 5,999 (56) 5,943
------------------------------------------------------------- --------- ------ -------- ----- --------
12 months ended 31 December 2016
Operating profit 15,606 1,155 16,761 (600) 16,161
Amortisation of intangible assets acquired on business
combinations 1,327 - 1,327 - 1,327
Equity-settled share-based payments 1,052 - 1,052 - 1,052
------------------------------------------------------------ -------- -------- -------- ------ -------- Underlying operating profit 17,985 1,155 19,140 (600) 18,540 Depreciation and amortisation 195 - 195 - 195 (Increase) in trade/other receivables (1,876) - (1,876) - (1,876) (Decrease)/Increase in trade/other payables (1,969) 70 (1,899) 31 (1,868) Decrease in liabilities relating to pre-LASPO ATE product - (1,689) (1,689) - (1,689) ------------------------------------------------------------ -------- -------- -------- ------ -------- Net cash flows from operating activities before interest and tax 14,335 (464) 13,871 (569) 13,302 ------------------------------------------------------------ -------- -------- -------- ------ -------- Interest paid (346) - (346) - (346) Tax paid (3,692) - (3,692) - (3,692) ------------------------------------------------------------ -------- -------- -------- ------ -------- Net cash from operating activities 10,297 (464) 9,833 (569) 9,264 ------------------------------------------------------------ -------- -------- -------- ------ --------
3. Financial income
Unaudited 6 months ended 30 Unaudited 6 months ended 30 Audited 12 months ended 31
June 2017 June 2016 December 2016
GBP000 GBP000 GBP000
----------------------- ------------------------------ ------------------------------ -----------------------------
Bank interest income 5 10 25
Other interest income 33 - -
Investment income - - 18
Total finance income 38 10 43
----------------------- ------------------------------ ------------------------------ -----------------------------
4. Financial expense
Unaudited 6 months ended 30 Unaudited 6 months ended 30 Audited 12 months ended 31
June 2017 June 2016 December 2016
GBP000 GBP000 GBP000
----------------------------- ---------------------------- ---------------------------- ---------------------------
On bank loans and overdrafts 135 209 340
Bank charges 31 - 63
----------------------------- ---------------------------- ---------------------------- ---------------------------
Total finance expense 166 209 403
----------------------------- ---------------------------- ---------------------------- ---------------------------
5. One-off items
Unaudited 6 months ended 30 Unaudited 6 months ended 30 Audited 12 months ended 31
June 2017 June 2016 December 2016
GBP000 GBP000 GBP000
---------------------------- ---------------------------- ---------------------------- ----------------------------
Personal Injury
reorganisation costs(1) 1,000 - 522
Legal and professional fees
relating to acquisitions
(2) - 56 78
Release of pre-LASPO ATE
liability and associated
costs(3) - - (1,155)
Total 1,000 56 (555)
---------------------------- ---------------------------- ---------------------------- ----------------------------
1. Personal Injury reorganisation costs relate to costs associated with one-off projects that are not related to the core operations of the
business.
2. Legal and professional fees paid in relation to the acquisitions of Searches UK including due diligence costs and stamp duty.
3. Previously recognised liabilities for pre-LASPO ATE commissions received in advance of GBP1,250,000 were released in 2016 as a result of more favourable settlements. These have been offset by associated costs of GBP95,000.
6. Acquisitions
Acquisition of Searches UK Limited
On 11 January 2016 the Group acquired the entire share capital of Searches UK Limited. The company is a leading conveyancing search provider in England & Wales predominantly for residential property transactions.
Fair values
The acquisitions had the following effect on the Group's assets and liabilities:
Unaudited 6 months ended 30 Unaudited 6 months ended Audited 12 months ended 31
June 2017 30 June 2016 December 2016
GBP000 GBP000 GBP000
--------------------------- ---------------------------- --------------------------- ---------------------------
Intangible assets - 881 881
Tangible assets - 6 6
Trade and other receivables - 367 369
Cash and cash equivalents - 293 295
Trade and other payables - (415) (419)
Deferred tax liability - (176) (176)
---------------------------- --------------------------- --------------------------- ---------------------------
Net assets acquired - 956 956
Goodwill arising on
acquisition - 1,124 1,124
---------------------------- --------------------------- --------------------------- ---------------------------
Fair value of net assets
acquired and goodwill
arising - 2,080 2,080
---------------------------- --------------------------- --------------------------- ---------------------------
Cash consideration - 2,080 2,080
Fair value of net assets
acquired and goodwill
arising - 2,080 2,080
---------------------------- --------------------------- --------------------------- ---------------------------
The Group incurred acquisition related costs of GBP78,000 for full year 2016 (H1 2016: GBP56,000) related to professional fees paid for due diligence, general professional fees and legal related costs. These costs have been included in one-off items in the Group's consolidated income statement.
For all acquisitions made in the year, fair values remain provisional, but will be finalised within 12 months of acquisition.
7. Goodwill
Personal Injury Residential property Critical Care Total
GBP000 GBP000 GBP000 GBP000
--------------------- ---------------- --------------------- -------------- --------
Cost
At 30 June 2016 39,897 4,873 15,592 60,362
At 30 December 2016 39,897 4,873 15,592 60,362
--------------------- ---------------- --------------------- -------------- --------
At 30 June 2017 39,897 4,873 15,592 60,362
--------------------- ---------------- --------------------- -------------- --------
Impairment
At 30 June 2016 - - - -
At 30 December 2016 - - - -
At 30 June 2017 - - - -
--------------------- ---------------- --------------------- -------------- --------
Net book value
At 30 June 2016 39,897 4,873 15,592 60,362
--------------------- ---------------- --------------------- -------------- --------
At 30 December 2016 39,897 4,873 15,592 60,362
--------------------- ---------------- --------------------- -------------- -------- At 30 June 2017 39,897 4,873 15,592 60,362 --------------------- ---------------- --------------------- -------------- --------
8. Intangibles
Assets under
Technology related Contract related Brand names Other construction Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- ------------------- ----------------- ------------ -------- --------------------- --------
Cost
At 30 June 2016 167 8,466 885 57 8 9,583
--------------------- ------------------- ----------------- ------------ -------- --------------------- --------
At 31 December 2016 167 8,466 885 549 20 10,087
--------------------- ------------------- ----------------- ------------ -------- --------------------- --------
Additions - - - - 23 23
At 30 June 2017 167 8,466 885 549 43 10,110
--------------------- ------------------- ----------------- ------------ -------- --------------------- --------
Amortisation
At 30 June 2016 32 688 72 11 - 803
At 31 December 2016 42 1,286 258 27 - 1,613
--------------------- ------------------- ----------------- ------------ -------- --------------------- --------
Amortisation charge
on business
combinations 10 538 106 - - 654
Amortisation charge
for the period - - - 60 - 60
At 30 June 2017 52 1,824 364 87 - 2,327
--------------------- ------------------- ----------------- ------------ -------- --------------------- --------
Net book value
At 30 June 2016 135 7,778 813 46 8 8,780
At 31 December 2016 125 7,180 627 522 20 8,474
--------------------- ------------------- ----------------- ------------ -------- --------------------- --------
At 30 June 2017 115 6,642 521 462 43 7,783
--------------------- ------------------- ----------------- ------------ -------- --------------------- --------
The intangible assets recognised were acquired as part of the acquisitions of Fitzalan, BVC, Bush and Searches UK.
9. Share capital
30 June 2017 30 June 2016 31 December 2016
--------------------------------------- ------------- ------------- -----------------
Number of shares
'A' Ordinary Shares of GBP0.0025 each 45,511,088 45,270,937 45,349,629
--------------------------------------- ------------- ------------- -----------------
GBP000 GBP000 GBP000
--------------------------------------- ------------- ------------- -----------------
Allotted, called up and fully paid
'A' Ordinary Shares of GBP0.0025 each 114 113 113
Shares classified in equity 114 113 113
--------------------------------------- ------------- ------------- -----------------
10. Transactions with owners, recorded directly in equity
On 29 June 2017, 161,459 new ordinary shares with a par value of GBP0.0025 were issued due to the exercising of equity settled share based payments in respect of the LTIP scheme. These raised an additional GBP404 of funds for the Company, resulting in an increase to share capital of GBP404.
During 2016 84,629 share options were exercised which resulted in the issue of 84,629 new Ordinary Shares with a par value of
GBP0.0025. The exercising of these options raised funds of GBP160,508 for the Group. A charge of GBP85,093 has been reclassified from
the share option reserve to share premium to reflect the crystalisation of previous charges in respect of these options.
11. Basic earnings per share
The calculation of basic earnings per share at 30 June 2017 is based on profit attributable to ordinary shareholders of GBP4,097,000 (H1 2016: GBP5,966,000; Full Year 2016: GBP12,224,000) and a weighted average number of Ordinary Shares outstanding of 45,350,071 (June 2016: 45,266,598; December 2016: 45,294,877).
Profit attributable to ordinary shareholders (basic)
Unaudited 6 months ended Unaudited 6 months ended
30 June 30 June Audited 12 months ended 31
2017 2016 December 2016
GBP000 GBP000 GBP000
---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit for the period /
year attributable to the
shareholders 4,097 5,966 12,224
---------------------------- ---------------------------- ---------------------------- ----------------------------
Weighted average number of Ordinary Shares (basic)
Number Audited 12 months ended 31
Unaudited 6 months ended Unaudited 6 months ended December 2016
30 June 2017 30 June 2016
---------------------------- --------------------------- --------------------------- ---------------------------
Issued Ordinary Shares at
start of period 45,349,629 45,265,000 45,265,000
----------------------------- --------------------------- --------------------------- ---------------------------
Weighted average number of
Ordinary Shares at end of
period 45,350,071 45,266,598 45,294,877
----------------------------- --------------------------- --------------------------- ---------------------------
Basic earnings per share (p)
Unaudited 6 months ended 30 Unaudited 6 months ended 30 Audited 12 months ended 31
June 2017 June 2016 December 2017
----------------------------- ---------------------------- ---------------------------- ---------------------------
Basic earnings per share (p) 9.0 13.2 27.0
----------------------------- ---------------------------- ---------------------------- ---------------------------
The Company has in place share-based payment schemes to reward employees. At the 30 June 2017, all necessary targets have been met and the LTIP scheme is at a value that would reasonably result in the options being exercised. The incremental shares available for these schemes included in the diluted earnings per share calculation are 602,503 (June 2016: 969,707; December 2016: 775,746). There are no other diluting items.
Diluted earnings per share (p)
Unaudited 6 months ended Unaudited 6 months ended 30 Audited 12 months ended 31
30 June 2017 June 2016 December
2016
----------------------------- --------------------------- ---------------------------- ----------------------------
Diluted earnings per share
(p) 8.9 12.9 26.5
----------------------------- --------------------------- ---------------------------- ----------------------------
12. Financial risk management
The Group's financial risk management objectives and policies are consistent with those disclosed in the financial statements for the year ended 31 December 2016. At 1 January 2017 and 30 June 2017 the Group held all financial instruments at Level 3 (as defined in IFRS 7 Financial instruments: disclosures) and there have been no transfers of assets or liabilities between levels of the fair value hierarchy.
13. Net debt
Net debt includes cash and cash equivalents, secured bank loans, loan notes and preference shares.
30 June 2017 30 June 31 December 2016
GBP000 2016 GBP000
GBP000
--------------------------------------------- -------------- --------- -----------------
Cash and cash equivalents 799 6,522 4,814
Other interest-bearing loans and loan notes (10,243) (12,936) (11,089)
Net debt (9,444) (6,414) (6,275)
--------------------------------------------- -------------- --------- -----------------
Set out below is a reconciliation of movements in net cash during the period.
30 June 2017 30 June 2016 31 December 2016
GBP000 GBP000 GBP000
--------------------------------------------------------------------- ------------- ------------- -----------------
Net decrease in cash and cash equivalents (4,015) (3,534) (5,242)
Cash and cash equivalents net inflow from increase in debt and debt
financing 846 1,846 3,693
--------------------------------------------------------------------- ------------- ------------- -----------------
Movement in net borrowings resulting from cash flows (3,169) (1,688) (1,549)
Movement in debt in period (3,169) (1,688) (1,549)
Net debt at beginning of period (6,275) (4,726) (4,726)
--------------------------------------------------------------------- ------------- ------------- -----------------
Net debt at end of period (9,444) (6,414) (6,275)
--------------------------------------------------------------------- ------------- ------------- -----------------
During 2017 the Group made an initial drawdown of GBP1.0m on its rolling credit facility. The Group refinanced its bank facilities on the 8(th) September 2017 and as a result, it is the Group's intention to repay this in more than 12 months time and hence the GBP1.0m is deemed to be a non-current liability.
14. Related parties
Transactions with key management personnel
Key management personnel in situ at 30 June 2017 and their immediate relatives control 4.1 per cent (June 2016: 4.7 per cent, December 2016: 4.4 per cent) of the voting shares of the Company.
Key management personnel are considered to be the directors of the Company as well as those of National Accident Helpline Limited, Fitzalan Partners Limited, Bush & Company Rehabilitation Limited, Searches UK Limited and any other management serving as part of the executive team.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAKNPFLLXEFF
(END) Dow Jones Newswires
September 19, 2017 02:00 ET (06:00 GMT)
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