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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Porta Communications Plc | LSE:PTCM | London | Ordinary Share | GB00B71C7K21 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.449 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPTCM
RNS Number : 1454L
Porta Communications PLC
29 September 2016
PORTA COMMUNICATIONS PLC
(The "Group" or "Porta")
Interim results for the six months ended 30 June 2016
Porta Communications Plc, the international communications and marketing group, is pleased to announce its interim results for the six months ended 30 June 2016.
Solid performance despite impact of Brexit vote
Strategic progress
Financial Highlights
Hot Features
Premium
Rounded to the Six months Six months Year ended
nearest thousand ended ended 31 December
30 June 2016 30 June 2015
GBP 2015 GBP
GBP
=================== ============== =========== =============
Revenue 17,804,000 17,352,000 34,093,000
=================== ============== =========== =============
Gross Profit 13,758,000 13,906,000 26,949,000
=================== ============== =========== =============
EBITDA (1) 692,000 828,000 1,072,000
=================== ============== =========== =============
Headline EBITDA
(2) 936,000 1,334,000 2,607,000
=================== ============== =========== =============
Headline EBITDA
Margin (3) 6.8% 9.6% 9.7%
=================== ============== =========== =============
(1) Reported EBITDA after all costs.
(2) Headline EBITDA excludes acquisitions and restructuring costs, exceptional legal and professional costs, share based payments, gain on acquisition and non-recurring property costs.
(3) Headline EBITDA Margin is headline EBITDA as a percentage of Gross Profit.
First half highlights:
-- Gross profit down 1% despite the impact of Brexit, offset by organic growth in Asia-Pacific of 11%.
-- EBITDA after all costs virtually unchanged after adding back GBP120k impairment of collateral held on a loan.
-- Exceptional costs down 50%. -- Positive operating cash flow of GBP350k.
-- Debt with Hawk Investment Holdings Ltd was restructured to allow roll-up of interest and deferral of redemption to April 2019.
-- New clients won including Sompo Japan Nipponkoa, Permira, Legal & General Investment Management and the Rugby Football Union.
-- New senior hires in the UK and Australia.
-- Quality of our work recognised through awards including Best Advisor - Financial PR Agency of the Year in the UK Stock Market Awards 2016.
Board changes:
-- Brian Blasdale will be stepping down from the board with effect from 30 November 2016.
-- John Foley has joined the Board as a Non-Executive Director. John is an experienced PLC director with over 27 years of continuous experience on various public company boards as either Chairman, CEO, CFO or Non-Executive Director.
Commenting, David Wright said:
"After the first five months the Group was running ahead of budget. In our May 2016 trading statement, however, we indicated that the uncertainty caused by the referendum and the subsequent Brexit vote had a marked impact on project work in the UK where we are particularly exposed to the housing and property sectors.
"We have continued to attract senior, proven staff to our team due to the quality of our platform. These hires help improve the number, quality and conversion rate of our client opportunities.
"Porta is now moving into a new chapter in its development. We need to re-present the company, its strategy and to deliver greater value by building on the good work that has taken place thus far."
Enquiries
Porta Communications Plc +44 (0) 20 7680 David Wright / Gene Golembiewski 6500 Grant Thornton UK LLP (Nominated Adviser) Philip Secrett / Samantha Harrison +44 (0) 20 7383 / Daniel Bush 5100 N+1 Singer (Broker) +44 (0) 20 7496 James Maxwell / Lauren Kettle 3000 Redleaf Communications - Media Enquiries +44 (0) 20 7382 Charlie Geller / Sam Modlin 4769
Chief Executive Report
Overview
Having backed a number of start-ups and also having completed a number of acquisitions over the years, the theme of 2016 is very definitely about consolidating what we have already built whilst adding to the senior firepower of the group in the London market - the largest global fee opportunity outside of New York.
The very good start to 2016 for Porta was offset by the impact of the Brexit vote in the UK. This undoubtedly had a negative effect on all corporate decision making in general and on the housing and property market in particular. The number of IPOs diminished significantly and our PPS business - the market leader in property with an emphasis on housing - was adversely affected.
In the rest of the world our businesses did well with Australia the star performer.
As reputation management becomes ever more complex and important, clients are increasingly looking for senior counsel. We are adding to the number of our senior proven staff to create a team that can help us to take Porta to the next level. In the period I was delighted to welcome Gavin Devine and Charlie Chichester in London. Gavin was hired as the COO of Porta and will help us grow the Public Affairs business in the UK and Europe. Charlie joined as Senior Partner and heads-up the financial practice in London. Both have made an immediate impact to the business. I was also very pleased to welcome Fiona Court and Nick Maher to our Australia business. Fiona, who joined us as a Director, is a specialist community relations practitioner who will work on expanding and developing a dedicated practice area in this space. Nick Maher was a former Partner of his colleagues in Australia. He is a highly experienced public affairs and communications advisor who re-joined us as a Senior Adviser. Nick recently served as a Chief of Staff for the Australian Government in infrastructure and regional development in 2013/14. He was also the Head of Government Relations for the Property Council of Australia in 2015/16, based in Canberra working on tax reform. We are increasingly attracting such talent - drawn by our integrated approach which is fit for purpose in the internet age. All of our senior hires thus far have generated fees from day one,
Communications Division
In the UK, we are integrating PPS Group and Newgate Communications to create a major new force in the corporate communications world. The combined entity will be our largest business unit, and has a unique market positioning in being able to deliver financial PR and IR, corporate PR and media relations, public affairs, local stakeholder engagement and regional PR. We believe this is a compelling proposition for clients and potential clients.
The UK business was subject to some degree of slowdown in the run up to and immediate aftermath of the referendum on Brexit, particularly in terms of project work where we are relatively exposed to the housing and property sectors. These sectors accounted for approximately 9% of our group gross profit in H1 2015, decreasing to 5% in H1 2016. However, business has picked up noticeably since. Good progress has been made, with the business advising on several transactions, including Samsonite on its acquisition of TUMI, Glencore on the sale of a partial stake in its Agri business and Blue Prism on its IPO. Newgate also advised Third Energy on securing the first planning permission for shale gas exploration in five years. The business has also increased its focus on pensions advisory work over the last 12 months. The team, which includes public policy, media, member communications and training experts, has acted for several FTSE100 schemes.
On the local stakeholder engagement side, the PPS team has added new clients including the Rugby Football Union, Marlborough College and Cambridge University, the International Advanced Manufacturing Park in Sunderland and South Tyneside, and the Defence Infrastructure Organisation.
The profile of Newgate and PPS has grown in recent months, in large part due to the high profile hires we have made. As a result of these and other steps forward in the business the pipeline of new client prospects and high profile hires for both Newgate and PPS has strengthened significantly in the last couple of months.
Publicasity, which focuses on B2C and B2B markets, has been very solid throughout the first six months with an encouraging level of new business coming through towards the end of the first half, such as BSH Group (which includes brands such as Bosch, Siemens and Neff), and also won a large confidential piece of business from a major UK retailer.
Also in the UK, the corporate and financial PR business Redleaf performed extremely well with new client wins including BDO International, Caxton FX and IG Design Group Plc. Redleaf received awards for Best Advisor - Financial PR Agency of the Year in the UK Stock Market Awards 2016 (third year running), PR Agency of the Year Grant Thornton Quoted Company Awards (second year running) and PR Campaign of the Year 2016 at the Insurance PR Marketing Awards for the Insurance Made Simple (AskCindy) campaign with the CII.
Australia once again has turned in excellent results and plans are being implemented to significantly increase the size of the business. Growth has been strong across all parts of their business, in particular research and public affairs, for both state and federal Governments. Sydney Metro continues to be the agency's largest client helping with the stakeholder and community engagement and providing market research to support the development of Sydney's largest infrastructure project. Newgate Australia has been involved with the high-profile administration of electronics retailer Dick Smith, starting in January and still going strong. Australia has also assisted Uber throughout the year and has helped it to successfully become legal in a number of states.
Newgate Research in Australia was awarded the Research Industry Council of Australia (RICA) Employer of the Year Award at the national market research industry conference in Melbourne in September. RICA says the award recognises industry leaders who demonstrate a strong employer brand, a commitment to engaging and retaining talent and overall excellence in people management. Organisations have to fight hard to recruit and retain people and this award recognises those businesses that really put people at the heart of their overall strategy. Winning Employer of the Year Award is not only an acknowledgement of professional success; it is a demonstration of a long term commitment to better business outcomes. Few things can be better for employee morale, investors and most important of all, the bottom line.
Hong Kong and Singapore have performed really well in some difficult markets, reflecting the quality of both their teams and their clients.
In addition to Hong Kong's existing retained client base, a number of new retained and project clients were won during the period including Asiya Investments, BFAM (in connection with the Kaisa debt restructuring), Franklin Templeton, Merril Corporation, Maxnerva and Permira.
Singapore won or renewed a number of retainer contracts (at higher rates and with enlarged scopes of work) for the regional property giant Ascendas-Singbridge, the diversified conglomerate Pan-United Corporation and the high-profile law firm TSMP Law Corporation. Singapore also advised on a number of capital markets transactions, including the successful takeover by Baring Private Equity Asia of locally-listed UE E&C and other confidential briefs.
Marketing & Advertising Division
A detailed management appraisal has been concluded recently at 2112 and further changes have been made which will result in an improvement in both margins and profits. The business however continues to add new clients to its roster. Recent wins include Legal and General Investment Management, Quilter Cheviot (one of the UK's largest discretionary investment management firms), leading wealth management company Charles Stanley, and independent sports dispute service Sports Resolutions.
Summit has traded well and its Management are now exploring further business development opportunities. Meanwhile the business continues to win new clients, including Sage One and the Institution of Civil Engineers.
Outlook
Over the last few years the building blocks have been put in place with the result that we now have scale operations in several markets including the UK and Asia-Pacific. The potential of these operations and the platform we have created need to be driven forward through operational enhancement and further strategic development.
The outlook is undoubtedly strengthening all the time now that the Brexit vote is behind us, but we cannot relax our resolve in growing the business. We can say with confidence that the platform is there to continue driving the business forward.
Executive Summary
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
=========================== =========== =========== ============
Operating loss (631,775) (548,975) (1,646,793)
Add back depreciation
and amortisation 1,323,291 1,377,027 2,718,405
=========================== =========== =========== ============
EBITDA from continuing
operations 691,516 828,052 1,071,612
Acquisition costs -- 29,948 36,948
Restructuring costs 88,231 116,956 756,240
Non-recurring property
costs -- 66,909 86,207
Legal and professional
consultancy costs 142,727 98,994 340,850
Share based payments (106,873) 192,748 315,002
Impairment of security 120,130 -- --
collateral
Headline EBITDA 935,731 1,333,607 2,606,859
=========================== =========== =========== ============
EPS reported on operating
loss for continuing
operations (0.2p) (0.2p) (0.6p)
EPS based on headline
EBITDA 0.3p 0.5p 1.0p
=========================== =========== =========== ============
Interim results by division were as follows:
Six months ended Communications Marketing TOTAL Head TOTAL
30 June 2016 & Advertising Operations office
GBP GBP GBP GBP GBP
====================== =============== =============== ============ ========== ===========
External revenue 14,744,904 3,058,937 17,803,841 -- 17,803,841
Gross profit
(fee income) 12,155,703 1,602,630 13,758,333 -- 13,758,333
Operating results 483,261 (263,515) 219,746 (851,521) (631,775)
Depreciation
& Amortisation 1,099,432 100,689 1,200,121 123,170 1,323,291
Reported EBITDA 1,582,693 (162,826) 1,419,867 (728,351) 691,516
Headline adjustments 108,379 88,231 196,610 47,605 244,215
Headline EBITDA 1,691,072 (74,595) 1,616,477 (680,746) 935,731
====================== =============== =============== ============ ========== ===========
Headline EBITDA
margin 6.8%
===========
Six months ended Communications Marketing TOTAL Head TOTAL
30 June 2015 & Advertising Operations office
GBP GBP GBP GBP GBP
====================== =============== =============== ============ ============ ===========
External revenue 14,319,240 3,032,508 17,351,748 -- 17,351,748
Gross profit
(fee income) 12,129,177 1,776,373 13,905,550 -- 13,905,550
Operating results 769,219 (102,631) 666,588 (1,215,563) (548,975)
Depreciation
& Amortisation 1,180,107 105,518 1,285,625 91,402 1,377,027
Reported EBITDA 1,949,326 2,887 1,952,213 (1,124,161) 828,052
Headline adjustments 288,307 13,773 302,080 203,475 505,555
Headline EBITDA 2,237,633 16,660 2,254,293 (920,686) 1,333,607
====================== =============== =============== ============ ============ ===========
Headline EBITDA
margin 9.6%
===========
David Wright
Chief Executive Officer
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2016 (Unaudited)
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2015
2016 2015
GBP GBP GBP
=============================== ============= ============= =============
Continuing operations
Revenue 5 17,803,841 17,351,748 34,093,005
Cost of sales (4,045,508) (3,446,198) (7,144,100)
=============================== ============= ============= =============
Gross profit 13,758,333 13,905,550 26,948,905
Operating and administrative
expenses (14,390,108) (14,454,525) (28,595,698)
=============================== ============= ============= =============
Operating loss 4 (631,775) (548,975) (1,646,793)
=============================== ============= ============= =============
Finance expense (604,995) (593,629) (1,268,314)
Finance income 5,994 11,737 27,267
Share of profit/(loss)
in associate 54,902 -- (25,304)
=============================== ============= ============= =============
Profit/(loss) before
taxation on continuing
operations (1,175,874) (1,130,867) (2,913,144)
Tax charge 6 (39,595) (284,657) (187,794)
=============================== ============= ============= =============
Loss for the period
on continuing operations (1,215,469) (1,415,524) (3,100,938)
Discontinued operations
Loss for the period
from discontinued operations 7 (387,500) -- (352,577)
=============================== ============= ============= =============
Loss for the period (1,602,969) (1,415,524) (3,453,515)
=============================== ============= ============= =============
(Loss) / profit for
the period attributable
to:
Owners of the Company (1,913,900) (1,802,801) (4,356,112)
Non-controlling interests 310,931 387,277 902,597
=============================== ============= ============= =============
(1,602,969) (1,415,524) (3,453,515)
=============================== ============= ============= =============
Other comprehensive
income
Exchange differences
arising on items that
may be subsequently
reclassified to profit
and loss 308,965 (121,953) (34,610)
Total other comprehensive
income, net of tax 308,965 (121,953) (34,610)
Total comprehensive
income for the period (1,294,004) (1,537,477) (3,488,125)
=============================== ============= ============= =============
Total comprehensive
income for the period
attributable to:
Owners of the Company (1,791,795) (1,897,563) (4,363,548)
Non-controlling interests 497,791 360,086 875,423
================================ === ============ ============ ============
(1,294,004) (1,537,477) (3,488,125)
================================ === ============ ============ ============
Earnings/(loss)per
share basic and diluted 13
================================ === ============ ============ ============
On continuing operations (0.4p) (0.5p) (1.5p)
On discontinued operations (0.1p) -- (0.1p)
On continuing and discontinued
operations (0.6p) (0.5p) (1.6p)
On operating (loss)/profit
from continuing operations (0.2p) (0.2p) (0.6p)
On headline EBITDA 0.3p 0.5p 1.0p
================================ === ============ ============ ============
The accompanying notes are an integral part of this condensed consolidated interim financial report.
Condensed Consolidated Statement of Financial Position
As at 30 June 2016 (Unaudited)
Notes 30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
================================== ====== ============= ============= =============
Non-current assets
Intangible assets 12 16,081,779 17,911,355 17,056,192
Property, plant
and equipment 8 1,050,005 1,250,398 1,181,803
Deferred tax asset 1,606,691 119,435 1,601,065
Non-current financial
assets 923,775 923,775 923,775
Other investments 8,500 9,500 9,500
Investment in associates 937,421 1,425,154 845,921
Total non-current
assets 20,608,171 21,639,617 21,618,256
================================== ====== ============= ============= =============
Current assets
Work in progress 1,154,583 724,998 924,662
Trade and other
receivables 6,633,016 8,540,783 7,326,215
Current tax assets - 120,192 -
Cash and cash equivalents 1,792,513 1,923,873 1,787,184
================================== ====== ============= ============= =============
Total current assets 9,580,112 11,309,846 10,038,061
================================== ====== ============= ============= =============
Current liabilities
Trade and other
payables (8,204,001) (7,719,375) (8,116,383)
Current tax liabilities (363,030) (754,446) (448,824)
Loans and borrowings 11 (5,226,527) (7,426,165) (4,956,269)
================================== ====== ============= ============= =============
Total current liabilities (13,793,558) (15,899,986) (13,521,476)
================================== ====== ============= ============= =============
Net current (liabilities)/assets (4,213,446) (4,590,140) (3,483,415)
================================== ====== ============= ============= =============
Non-current liabilities
Trade and other
payables (361,746) -- (462,487)
Fair value of contingent
consideration (1,236,338) (956,417) (1,179,302)
Deferred tax liabilities (1,620,419) (2,093,338) (1,832,413)
Loans and borrowings 11 (3,246,603) (260,188) (3,041,803)
================================== ====== ============= ============= =============
Total non-current
liabilities (6,465,106) (3,309,943) (6,516,005)
================================== ====== ============= ============= =============
Net assets 9,929,619 13,739,534 11,618,836
================================== ====== ============= ============= =============
Equity
Share capital 9 28,556,792 23,380,791 28,380,791
Share premium 4,788,547 4,788,547 4,788,547
Retained losses (24,686,265) (20,490,215) (22,822,085)
Translation reserve 36,474 (172,958) (85,631)
Other reserves (822,442) (785,326) (489,848)
================================== ====== ============= ============= =============
Total equity shareholders'
funds 7,873,106 11,720,839 9,771,774
Equity non-controlling
interests 2,056,513 2,018,695 1,847,062
================================== ====== ============= ============= =============
Total equity 9,929,619 13,739,534 11,618,836
================================== ====== ============= ============= =============
The accompanying notes are an integral part of this condensed consolidated interim financial report.
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2016 (Unaudited)
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2015
2016 2015
GBP GBP GBP
=================================== ============ ============ =============
Cash flow from operating
activities
Loss before taxation
on continuing activities (1,175,874) (1,130,867) (2,913,144)
Adjusted for:
Loss from discontinued
operations before tax (387,500) -- (352,577)
Depreciation and amortisation 1,323,291 1,377,027 2,718,405
Equity settled share
based payments (106,873) 192,749 315,002
Share of (profits)/losses
in associates (54,902) -- 25,304
Finance income (5,994) (11,737) (27,267)
Finance costs 604,995 593,629 1,268,314
Loss on disposal of
property, plant and
equipment 254 -- 1,713
Impairment of other 1,000 -- --
fixed assets
Impairment of security 120,130 -- --
receivable
Capitalised costs (9,422) -- --
Non cash rents received (126,000) -- (105,000)
Tax paid (367,950) (441,475) (1,019,396)
Change in estimate of
goodwill on prior year
acquisition -- -- (88,684)
(Increase)/decrease
in work in progress (140,528) 357,246 142, 835
(Increase)/decrease
in trade and other receivables 921,075 (828,856) (76,027)
(Decrease)/increase
in trade and other payables (129,888) 589,509 1,493,184
Unrealised foreign exchange
(gain)/loss (115,494) 23,525 (40,093)
==================================== ============ ============ =============
Net cash inflow from
operating activities 350,320 720,750 1,342,569
==================================== ============ ============ ============= Cash flows from investing activities Acquisition of intangible assets (22,427) (24,346) (188,141) Acquisition of property, plant and equipment (54,056) (71,696) (164,441) Acquisition of subsidiary, net of cash acquired -- 49,102 49,102 Dividends paid to non-controlling interests (288,340) (262,698) (728,226) Interest received 5,994 11,737 27,267 Interest paid (7,523) (9,856) (12,583) Net cash outflow from investing activities (366,362) (307,757) (1,016,982) ==================================== ============ ============ ============= Cash flows from financing activities Proceeds from loans and borrowings 2,881,010 -- 1,711,561 Repayment of loans and borrowings (2,870,729) (179,278) (1,896,861) Repayment of leases (70,420) (77,101) (134,498) Net cash absorbed by financing activities (60,139) (256,379) (1,033,340) ==================================== ============ ============ ============= Net (decrease)/ increase in cash and cash equivalents (76,181) 156,614 5,749 Cash and cash equivalents at 1 January 1,787,184 1,791,426 1,791,426 Effect of exchange rate changes 81,510 (24,167) (9,991) ==================================== ============ ============ ============= Cash and cash equivalents at period end 1,792,513 1,923,873 1,787,184 ==================================== ============ ============ =============
The accompanying notes are an integral part of this condensed consolidated interim financial report.
Condensed Consolidated Statement of Changes in
Equity
Statement of changes in equity for the six months
ended 30 June 2016 (Unaudited)
Share Share Retained Translation Other Written Total Non-controlling Total
capital premium losses reserve Reserves Put/Call equity interests equity
Options shareholders' (NCI)
over funds
NCI
GBP GBP GBP GBP GBP GBP GBP GBP GBP
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Balance at 1
January
2016 28,380,791 4,788,547 (22,822,085) (85,631) 1,301,898 (1,791,746) 9,771,774 1,847,062 11,618,836
Total
comprehensive
income
Loss for the
period -- -- (1,913,900) -- -- -- (1,913,900) 310,931 (1,602,969)
Other
comprehensive
income -- -- -- 122,105 -- -- 122,105 186,860 308,965
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Total
comprehensive
income - - (1,913,900) 122,105 -- -- (1,791,795) 497,791 (1,294,004)
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Transactions with
owners of the
Company,
recognised
directly
in equity
Contributions by
owners:
Issue of
ordinary
shares in
relation
to deferred
consideration 176,001 - 49,720 - (225,721) - - - -
Dividend paid to
non-controlling
interest -- -- -- -- -- -- -- (288,340) (288,340)
Share based
payments -- -- -- -- (106,873) -- (106,873) -- (106,873)
Total
transactions
recognised
directly
in equity -- -- -- -- (106,873) -- (106,873) (288,340) (395,213)
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Balance at 30
June
2016 28,556,792 4,788,547 (24,686,265) 36,474 969,304 (1,791,746) 7,873,106 2,056,513 9,929,619
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
The accompanying notes are an integral part of this condensed consolidated interim financial report.
Statement of changes in equity for the
year ended 31 December 2015:
Share Share Retained Translation Other Written Total Non-controlling Total
capital premium losses reserve Reserves Put/ equity interests equity
Call shareholders'
Options funds
over
NCI
GBP GBP GBP GBP GBP GBP GBP GBP GBP
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Balance at 1
January
2015 27,405,391 4,788,547 (18,108,687) (78,195) 813,671 (1,791,746) 13,118,981 2,174,768 15,293,749
Total
comprehensive
income
Loss for the
period -- -- (1,802,801) -- -- -- (1,802,801) 387,277 (1,415,524)
Other
comprehensive
income -- -- -- (94,763) -- -- (94,763) (27,190) (121,953)
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Total
comprehensive
income -- -- (1,802,801) (94,763) -- -- (1,897,564) 360,087 (1,537,477)
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Contributions by
owners:
Issue of
ordinary shares
in relation to
business
combinations 975,400 -- -- -- -- -- 975,400 -- 975,400
Dividend paid to
non-controlling
interest -- -- -- -- -- -- -- (262,698) (262,698)
Share based
payments -- -- -- -- 192,749 -- 192,749 -- 192,749
Changes in
ownership
interest of
subsidiaries:
Acquisition of
subsidiary
with
non-controlling
interest -- -- -- -- -- -- -- 53,211 53,211
Acquisition of
non-controlling
interest
without a
change in
control -- -- (668,727) -- -- -- (668,727) (306,673) (975,400)
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Total
transactions
recognised
directly
in equity 975,400 -- (668,727) -- 192,749 -- 499,422 (516,160) (16,738)
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Balance at 30
June
2015 28,380,791 4,788,547 (20,490,215) (172,958) 1,006,420 (1,791,746) 11,720,839 2,018,695 13,739,534
================== =========== ========== ============= ============ ========== ============ ============== ================ ============
Total
comprehensive
income
Loss for the
period -- -- (2,553,311) -- -- -- (2,553,311) 515,320 (2,037,991)
Other
comprehensive
income -- -- -- 87,327 -- -- 87,327 16 87,343
================== =========== ========== ============= ============ ========== ============ ============== ================ ============ Total comprehensive income -- -- (2,553,311) 87,327 -- -- (2,465,984) 515,336 (1,950,648) ================== =========== ========== ============= ============ ========== ============ ============== ================ ============ Contributions by owners: Dividends paid to non-controlling interest -- -- -- -- -- -- -- (465,528) (465,528) Share based payments -- -- -- -- 122,253 -- 122,253 -- 122,253 Equity component of convertible loan issued -- -- -- -- 173,225 -- 173,225 -- 173,225 Changes in ownership interest of subsidiaries: Adjustments in respect of prior year disposal of subsidiaries with non-controlling interest -- -- 221,441 -- -- -- 221,441 (221,441) -- ================== =========== ========== ============= ============ ========== ============ ============== ================ ============ Total transactions directly recognised in equity -- -- 221,441 -- 295,478 -- 516,919 (686,969) (170,050) ================== =========== ========== ============= ============ ========== ============ ============== ================ ============ Balance at 31 December 2015 28,380,791 4,788,547 (22,822,085) (85,631) 1,301,898 (1,791,746) 9,771,774 1,847,062 11,618,836 ================== =========== ========== ============= ============ ========== ============ ============== ================ ============
The accompanying notes are an integral part of this condensed consolidated interim financial report.
Notes to the Condensed Consolidated Interim Financial Report
For the six months to 30 June 2016 (Unaudited)
1. Corporate information
The interim condensed consolidated financial statements of Porta Communications Plc and its subsidiaries (collectively, the Group) for the six-month period ended 30 June 2016 were authorised for issue in accordance with a resolution of the Directors on 29 September 2016.
Porta Communications Plc ('the Company') is a public company domiciled in the United Kingdom whose shares are publicly traded on the AIM of the London Stock Exchange. The Group is primarily involved in providing communication, advertising and marketing services.
2. Basis of preparation
(a) Statement of compliance
The condensed consolidated interim financial report for the six month period ended on 30 June 2016 has been prepared in accordance with IAS 34 Interim Financial Reporting. Selected explanatory notes are included to explain events and transactions that are significant to understand the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 31 December 2015. This condensed consolidated interim financial report does not include all of the information required for full annual financial statements prepared in accordance with International Financial Reporting Standards as adopted by the European Union.
The financial information presented herein does not constitute full statutory accounts under section 434 of the Companies Act 2006. This condensed consolidated financial report is unaudited. The financial information in respect of the previous year ended 31 December 2015 has been extracted from the consolidated statutory accounts of the Company for that period and have been delivered to the Registrar of Companies. The Group's Independent Auditor's report on those accounts was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or 498 (3) of the Companies Act 2006.
(b) Judgements and estimates
Preparing the condensed consolidated interim financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
In preparing this condensed consolidated interim financial report, significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2015.
(c) Headline measures
The Group believes that reporting non-GAAP or headline adjusted measures provide a useful comparison of business performance and reflects the way the business is managed. Accordingly headline measures of operating profit (EBITDA) and earnings per share exclude, where applicable, restructuring costs, start-up losses, amortisation of intangible assets, impairment charges, acquisition accounting adjustments, share option charges, and other exceptional items. Non-headline gains or losses are items that, in the opinion of the Directors, are required to be disclosed separately, by virtue of their size or incidence, to enable a full understanding of the Group's underlying financial performance.
A reconciliation between statutory and headline operating profit is presented in Note 4. In addition to this, earnings per share is presented in Note 13. Headline measures in this report are not defined terms under IFRS and may not be compared with similarly titled measures reported by other companies.
3. Accounting policies
The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2015, as described in those annual financial statements. The adoption of new standards and interpretations effective as of 1 January 2016 had no impact on the comparative figures.
4. Reconciliation of operating profit to EBITDA and to headline adjusted EBITDA
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2015
2016 2015
Continuing operations: GBP GBP GBP
================================ =========== =========== =============
Reported operating loss (631,775) (548,975) (1,646,793)
Add back depreciation
and amortisation 1,323,291 1,377,027 2,718,405
================================ =========== =========== =============
EBITDA from continuing
operations 691,516 828,052 1,071,612
Add back:
Acquisition costs -- 29,948 36,948
Restructuring costs 88,231 116,956 756,240
Non-recurring property
costs -- 66,909 88,607
Legal and professional
consultancy costs 142,727 98,994 340,850
Share-based payments (106,873) 192,748 315,002
Impairment of security 120,130 -- --
collateral
================================ =========== =========== =============
Adjusted headline EBITDA 935,731 1,333,607 2,606,859
================================ =========== =========== =============
EPS reported on operating
profit/(loss) from continuing
operations (0.2p) (0.2p) (0.6p)
EPS based on adjusted
headline EBITDA 0.3p 0.5p 1.0p
5. Segmental reporting
Business segments
The following tables present revenue and reportable results for the Group's operational segments:
Six months ended Communications Marketing Head Other Total
30 June 2016 and Advertising office / Consol.
GBP GBP GBP GBP GBP
==================== =============== ================= ============ =========== ===========
External revenue 14,744,904 3,058,937 -- -- 17,803,841
Inter-segment
revenue 265,852 56,740 294,088 (616,680) --
==================== =============== ================= ============ =========== ===========
Reportable segment
revenue 15,010,756 3,115,677 294,088 (616,680) 17,803,841
Reportable segment
gross profit 12,155,703 1,602,630 -- -- 13,758,333
Reportable segment
results 483,261 (263,515) (851,521) -- (631,775)
Reported segment
EBITDA 1,582,693 (162,826) (728,351) -- 691,516
Headline segment
EBITDA 1,691,072 (74,595) (680,746) -- 935,731
==================== =============== ================= ============ =========== ===========
Six months ended Communications Marketing Head Other Total
30 June 2015 and Advertising office / Consol.
GBP GBP GBP GBP GBP
==================== =============== ================= ============ =========== ===========
Revenue 14,319,240 3,032,508 -- -- 17,351,748
Inter-segmental
revenue 13,204 63,555 892,979 (969,738) --
==================== =============== ================= ============ =========== ===========
Reportable segment
revenue 14,332,444 3,096,063 892,979 (969,738) 17,351,748
Reportable segment
gross profit 12,129,177 1,776,373 -- -- 13,905,550
Reportable segment
results 769,219 (102,631) (1,215,563) -- (548,975)
Reported segment
EBITDA 1,949,326 2,887 (1,124,161) -- 828,052
Headline segment
EBITDA 2,237,633 16,660 (920,686) -- 1,333,607
==================== =============== ================= ============ =========== ===========
Year ended 31 Communications Marketing Head Other Total
December 2015 and Advertising office / Consol.
GBP GBP GBP GBP GBP
==================== =============== ================= ============ =========== ============
Revenue 28,302,039 5,790,966 -- -- 34,093,005
Inter-segmental
revenue 369,377 35,254 353,795 (758,426) --
==================== =============== ================= ============ =========== ============
Reportable segment
revenue 28,671,416 5,826,220 353,795 (758,426) 34,094,006
Reportable segment
gross profit 23,533,409 3,415,496 -- -- 26,948,905
Reportable segment
results 969,953 (593,949) (2,022,797) -- (1,646,793)
Reported segment
EBITDA 3,289,008 (386,636) (1,830,760) -- 1,071,612
Headline segment
EBITDA 4,221,350 (205,313) (1,409,178) -- 2,606,859
==================== =============== ================= ============ =========== ============
The following table below presents assets and liabilities information for the Group's operating segments as at 30 June 2016, 30 June 2015 and 31 December 2015 respectively:
Six months ended Communications Marketing Head Other Total
30 June 2016 and Advertising office / Consol.
GBP GBP GBP GBP GBP
==================== =============== ================= ============= ============ =============
Reportable segment
assets 23,047,306 3,123,102 7,996,411 (3,978,536) 30,188,283
Reportable segment
liabilities (6,221,042) (5,024,859) (12,991,299) 3,978,536) (20,258,664)
==================== =============== ================= ============= ============ =============
Six months ended Communications Marketing Head Other Total
30 June 2015 and Advertising office / Consol.
GBP GBP GBP GBP GBP
==================== =============== ================= ============= ============ =============
Reportable segment
assets 26,263,580 1,807,634 11,689,271 (6,811,022) 32,949,463
Reportable segment
liabilities (9,399,832) (5,478,004) (11,143,115) 6,811,022 (19,209,929)
==================== =============== ================= ============= ============ =============
Year ended 31 Communications Marketing Head Other Total
December 2015 and Advertising office / Consol.
GBP GBP GBP GBP GBP
==================== =============== ================= ============= ============ =============
Reportable segment
assets 26,017,446 3,614,480 10,920,734 (8,896,343) 31,656,317
Reportable segment
liabilities (9,276,886) (5,399,403) (14,257,535) 8,896,343 (20,037,481)
==================== =============== ================= ============= ============ =============
Geographical segments
The analysis of results and assets by geographic region, based on the location of the operating company, is as follows:
Six months ended 30 UK EMEA Asia-Pacific Total
June 2016
GBP GBP GBP GBP
============================= ============ ========= ============= ============
Revenue 12,257,721 137,069 5,409,051 17,803,841
Gross profit 8,899,833 119,803 4,738,697 13,758,333
(Loss)/profit on continuing
operations before
tax (1,784,554) (117) 608,797 (1,175,874)
Loss on discontinued
operations before
tax (387,500) -- -- (387,500)
============================= ============ ========= ============= ============
Six months ended 30 UK EMEA Asia-Pacific Total
June 2015
GBP GBP GBP GBP
============================= ============ ========= ============= ============
Revenue 12,634,601 195,296 4,521,851 17,351,748
Gross profit 9,476,100 155,790 4,273,660 13,905,550
(Loss)/profit on continuing
operations before
tax (2,054,055) (12,763) 935,951 (1,130,867)
Loss on discontinued --- -- -- --
operations before
tax
============================= ============ ========= ============= ============
UK EMEA Asia-Pacific Total
Year ended 31 December
2015
GBP GBP GBP GBP
============================= ============ ========= ============= ============
Revenue 24,140,370 324,674 9,627,961 34,093,005
Gross profit 18,090,899 265,457 8,592,549 26,948,905
(Loss)/profit on continuing
operations before
tax (4,744,667) (94,363) 1,925,886 (2,913,144)
Loss on discontinued
operations before
tax (352,577) -- -- (352,577)
============================= ============ ========= ============= ============
6. Income tax expense
The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings. The major components of income tax expense in the interim Condensed Consolidated Statement of Comprehensive Income are:
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2015
2016 2015
============================== =========== =========== =============
Income taxes GBP GBP GBP
Current income tax charge 256,066 480,110 818,792
Deferred income tax credit (216,471) (195,453) (630,998)
============================== =========== =========== =============
Income tax charge recognised
in statement of profit
or loss 39,595 284,657 187,794
============================== =========== =========== =============
7. Discontinued operations
The administration of TTMV Group, discontinued in 2014, is still ongoing. During the reporting period the Group recognised an additional expense of GBP387,500 in accordance with IFRS 5. This expense represents part of a loan that was issued by Hawk Investments Ltd and was written off as part of discontinued operations in 2014.
8. Property, plant and equipment
During the six months ended 30 June 2016, the Group acquired assets with a cost of GBP54,056 (six months to 30 June 2015: GBP71,696). Assets with a net book value of GBP254 were disposed of during the period (30 June 2015: GBPnil).
9. Capital and Reserves
On 5 February 2016, we announced the issuance of the remaining 1,760,010 ordinary shares of 10p each due in respect of the initial acquisition of 51% of Redleaf Polhill Limited. Further changes in the share capital since the period end are given in note 15.
The movement in Ordinary shares for the period reconciles as follows:
Number GBP nominal
value
============================ ============ ============
At 1 January 2016 277,327,895 27,732,791
New issues during the year 1,760,010 176,001
============================= ============ ============
At 30 June 2016 279,087,905 27,908,792
============================= ============ ============
Allotted, called up and fully paid
30 June 2016 Number GBP nominal
value
============================= ============ ============
Ordinary shares of 10p each 279,087,905 27,908,792
Deferred shares of 0.9p
each 72,000,000 648,000
============================== ============ ============
28,556,792
============================= ============ ============
31 December 2015 and 30 Number GBP nominal
June 2015 value
============================= ============ ============
Ordinary shares of 10p each 277,327,895 27,732,791
Deferred shares of 0.9p
each 72,000,000 648,000
============================== ============ ============
28,380,791
============================= ============ ============
10. Share-based payments
30 June 2016 Weighted
average
Number of exercise
Options price, pence
============================= ============ ==============
Balance at 1 January 2016 18,437,763 12.96p
Issued during the period - -
Forfeited during the period (8,628,679) 16.31p
============================= ============ ==============
Balance at 30 June 2016 9,809,084 10.01p
============================= ============ ==============
For the six months ended 30 June 2016, 8.6m share options issued to Directors and employees have lapsed resulting in an overall credit of GBP106,873 in the interim Condensed Consolidated Statement of Comprehensive Income (30 June 2015: expense of GBP192,748).
30 June 2015 and 31 December Weighted
2015 average
Number of exercise
Options price, pence
============================== ============ ==============
Balance at 1 January 2015 11,141,096 14.90p
Issued during the period 8,070,000 10.00p
Forfeited during the period (250,000) 10.00p
============================== ============ ==============
Balance at 30 June 2015 18,961,096 12.87p
============================== ============ ==============
Issued during the period 1,500,000 10.00p
============================== ============ ==============
Forfeited during the period (2,023,333) 10.00p
============================== ============ ==============
Balance at 31 December
2015 18,437,763 12.96p
============================== ============ ==============
11. Loans and Borrowings
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
========================== ========== ========== ============
Current liabilities
Loans - related party -- 2,665,743 --
Loans notes 5,211,441 1,572,807 100,342
Convertible loans -- 3,088,690 4,754,863
============================ ========== ========== ============
5,211,441 7,327,240 4,855,205
Obligation under finance
lease 15,086 98,925 101,064
============================ ========== ========== ============
5,226,527 7,426,165 4,855,205
========================== ========== ========== ============
Non-current liabilities
Loans - related party 2,980,468 -- 2,812,935
Obligation under finance
lease 266,135 260,188 228,868
============================ ========== ========== ============
3,246,603 260,188 3,041,803
========================== ========== ========== ============
The related party loans are secured over all current and future assets of all companies within the Group.
Terms and debt repayment schedule
30 June 2016 30 June 2015 31 December
2015
Nominal Year Face Carrying Face Carrying Face Carrying
Interest of maturity Value Amount Value Amount Value Amount
Rate
================ ========= ============ ========= ========= ========= ========= ========= =========
Discounted
bond - related
party 12% 2019 4,110,000 2,960,128 2,862,000 2,665,743 2,862,000 2,812,935
Loan notes 6% 2016 100,000 103,427 - - 100,000 100,342
Loan notes 6% 2015 -- -- 1,552,000 1,552,807 -- --
Convertible
loans 12% 2016 4,617,450 5,108,014 -- -- 4,867,450 4,754,863
Convertible
loans 12% 2015 - -- 3,067,450 3,088,690 -- --
Loan notes
(AED) 60% 2017 20,340 20,340 -- -- -- --
8,847,790 8,191,909 7,481,450 7,327,240 7,829,450 7,668,140
================ ========= ============ ========= ========= ========= ========= ========= =========
All debt is repayable in Pounds Sterling (GBP) unless otherwise stated.
12. Intangible assets and goodwill
Goodwill Customer Brands Websites, Total
relationships software
and licences
Cost GBP GBP GBP GBP GBP
========================= ========== =============== ========== ============== ===========
At 1 January 2015 7,516,950 9,380,000 3,187,000 184,087 20,268,037
Acquisition in
period - acquired
with subsidiary 451,259 -- -- -- 451,259
Other additions - - - 24,346 24,346
Exchange differences (18,969) - - (206) (19,175)
========================= ========== =============== ========== ============== ===========
At 30 June 2015 7,949,240 9,380,000 3,187,000 208,227 20,724,467
========================= ========== =============== ========== ============== ===========
Re-estimate of
previously acquired
goodwill 88,684 -- -- -- 88,684
Other additions
in the period -- -- -- 163,795 163,795
Translation differences 29,004 -- - 171 29,175
========================= ========== =============== ========== ============== ===========
At 31 December
2015 8,066,928 9,380,000 3,187,000 372,193 21,006,121
========================= ========== =============== ========== ============== ===========
Other additions
in the period -- -- -- 22,437 22,437
Exchange differences 123,401 -- -- 1,359 124,760
========================= ========== =============== ========== ============== ===========
At 30 June 2016 8,190,329 9,380,000 3,187,000 395,989 21,153,318
========================= ========== =============== ========== ============== ===========
Amortisation GBP GBP GBP GBP GBP
========================= ===== ========== ======== ======== ==========
At 1 January 2015 - 1,333,321 250,714 101,134 1,685,169
Charge for the
period - 944,248 159,350 24,529 1,128,127
Translation differences - -- -- (184) (184)
========================= ===== ========== ======== ======== ==========
At 30 June 2015 - 2,277,569 410,064 125,479 2,813,412
========================= ===== ========== ======== ======== ==========
Charge for the
period - 944,248 159,342 33,066 1,136,656
Translation differences - -- -- 161 161
========================= ===== ========== ======== ======== ==========
At 31 December
2015 - 3,221,817 569,406 158,706 3,949,929
========================= ===== ========== ======== ======== ==========
Charge for the
period - 912,999 159,317 48,672 1,120,988
Exchange differences - - - 622 622
========================= ===== ========== ======== ======== ==========
At 30 June 2016 - 4,134,816 728,723 208,000 5,071,539
========================= ===== ========== ======== ======== ==========
Net book value GBP GBP GBP GBP GBP
=================== ========== ========== ========== ======== =========== At 1 January 2015 7,516,950 8,046,679 2,936,286 82,953 15,582,868 =================== ========== ========== ========== ======== =========== At 30 June 2015 7,949,240 7,102,431 2,776,936 82,748 17,911,355 =================== ========== ========== ========== ======== =========== At 31 December 2015 8,066,928 6,158,183 2,617,594 213,487 17,056,192 =================== ========== ========== ========== ======== =========== At 30 June 2015 8,190,329 5,245,184 2,458,277 187,989 16,081,779 =================== ========== ========== ========== ======== ===========
No cash generating units ('CGUs') were tested for impairment because there were no impairment indicators at 30 June 2016 for CGUs to which goodwill has been allocated.
13. Earnings/(loss) per share
The loss per share has been calculated using the weighted average number of shares in issue during the relevant financial year. The weighted number of equity shares in issue and the loss after tax attributable to ordinary shareholders, used in these calculations, are as follows:
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2015 2015
2016
Number Number Number
========================== ============ ============== =============
Weighted average
number of shares
(ordinary and dilutive) 278,749,442 268,482,487 273,399,572
=========================== ============ ============== =============
GBP GBP GBP
========================== ============ ============== =============
Loss on continuing
activities after
tax (1,215,469) (1,415,524) (4,003,535)
Loss on discontinued
activities after
tax (387,500) -- (352,577)
Loss on continuing
and discontinued
activities after
tax (1,602,969) (1,415,524) (4,356,112)
=========================== ============ ============== =============
No share options outstanding at 30 June 2016, 30 June 2015 or 31 December 2015 were dilutive and all such potential ordinary shares are therefore excluded from the weighted average number of ordinary shares for the purposes of calculating diluted earnings per share. Details of share options outstanding are given in note 10.
14. Related party transactions
Key management personnel
The nature and amounts of related party transactions are consistent with those reported in the Group's consolidated statutory accounts for the year ended 31 December 2015.
Related party loans are shown in note 11 above.
15. Subsequent events
On 5 August 2016 the Company announced that, under the terms of the acquisition of Redleaf Polhill Limited ("Redleaf") in 2014, the first put option has been exercised by the vendors of Redleaf, requiring the Company to acquire a further 15% of the issued share capital of Redleaf. Under the terms of the put and call options, the additional consideration for the 15% of Redleaf is GBP805,427 which was be satisfied (i) 50% in cash; and (ii) 50% in ordinary shares of the Company at an issue price calculated with reference to the average of the mid-market closing price of Company's ordinary shares for a period prior to the allotment date of those ordinary shares (the "Further Consideration Shares").
Following the issue of the Further Consideration Shares, the Company's interest in the issued share capital of Company has increased to 66%. The remaining 34% of the issued share capital of Redleaf remains subject to two further put and call options which are exercisable after the publication of the audited results for the financial years to 31 December 2016 and 31 December 2017 respectively.
In order to issue the Further Consideration Shares, the Company undertook a capital reorganisation effective 14 September 2016. As a result of the capital reorganisation, each of the Company's 279,087,905 Ordinary shares of 10 pence each has been subdivided into and re-designated as, 279,087,905 ordinary shares of 1 pence each ("New Ordinary Shares") and 2,790,879,050 deferred shares of 0.9 pence each.
Following the capital reorganisation, the Company has issued 8,054,280 New Ordinary Shares to the vendors of Redleaf to satisfy the further consideration referred to above. The Further Consideration Shares are subject to a lock-in agreement which provides for a lock-in period to 20 January 2017 and a further 6-month orderly market period.
Other than the above there have been no material subsequent events to report from 30 June 2016 to the date that these accounts were approved on 29 September 2016.
16. Publication
A copy of this report is available from the Company's website at www.portacomms.com and is available in hard copy on application to the Company's offices.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FVLLLQKFXBBX
(END) Dow Jones Newswires
September 29, 2016 02:01 ET (06:01 GMT)
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