Share Name Share Symbol Market Type Share ISIN Share Description
Management Consulting Group NEX:MMC.GB NEX Ordinary Share GB0001979029
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 2.25 1.50 3.00 2.25 2.25 2.25 0.00 07:50:02
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
- - - -

Management Consulting Group PLC Preliminary Results

15/03/2019 7:01am

UK Regulatory (RNS & others)


Management Consulting (NEX:MMC.GB)
Historical Stock Chart

1 Year : From Dec 2018 to Dec 2019

Click Here for more Management Consulting Charts.

TIDMMMC

RNS Number : 9593S

Management Consulting Group PLC

15 March 2019

14 March 2019

This announcement contains inside information

Management Consulting Group PLC

Preliminary Results

Management Consulting Group PLC ("MCG" or the "Group"), the global professional services group, today announces its preliminary results for the year ended 31 December 2018. These results reflect the continuing operations of the Group, comprising Proudfoot.

Key highlights

   -- Substantial investment in sales capability and marketing at Proudfoot. The transformation of the US leadership 
      team and the full implementation of our new offering and strategy in that market continues to show early signs of 
      success. 
 
   -- Reported revenues of GBP28.3m (2017 restated: GBP32.7m), with H2 revenues up 14% compared to H2 2017 (restated). 
 
   -- Operating costs reduced by around 19% during the year. 
 
   -- Adjusted operating loss* of GBP4.2m (2017 restated: GBP7.5m loss). 
 
   -- After non-underlying items retained net loss of GBP13.7m (2017 restated: retained net loss GBP31.0m) including 
      loss on discontinued operations of GBP6.7m. (2017 restated: loss of GBP1.4m). 
 
   -- Cash balances at 31 December 2018 were GBP17.3m (2017: GBP21.0m) including GBP4.2m (2017: GBP8.5m) restricted 
      cash reserved for contingent creditors. 
 
   -- Equity fundraising successfully completed in July increasing cash resources by GBP8.6m (net of expenses). 
 
   -- Pam Hackett, CEO of Proudfoot, appointed to the Board. 

* Being operating loss before non-underlying costs and credits.

Nick Stagg, Chairman and Chief Executive, commented:

"We continue to invest in the sales capability of Proudfoot. Whilst revenues for 2018 were lower, the second-half showed an increase of 14% compared to the same period in 2017 and there are early indications for a continuation of this trend. With Proudfoot now working with a number of Fortune 500 companies the Board remains confident Proudfoot will continue to deliver sustainable change to our clients and that this will create value for our shareholders"

For further information please contact:

Management Consulting Group PLC

   Nick Stagg            Chairman and Chief Executive         020 7710 5000 

Notes to Editors

Management consulting Group PLC (MMC.L) provides professional services across a wide range of industries and sectors. For further information, visit www.mcgplc.com

Market Abuse Regulation

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via a regulatory information service, this inside information is now considered to be in the public domain.

The person responsible for arranging for the release of this announcement on behalf of the Group is Nick Stagg, Chairman and Chief Executive.

Forward Looking Statements

Certain information contained in this announcement constitutes forward looking information. This information relates to future events or occurrences or the Company's future performance. All information other than information of historical fact is forward looking information. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "predict" and "potential" and similar expressions are intended to identify forward looking information. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking information. No assurance can be given that this information will prove to be correct and such forward looking information included in this announcement should not be relied upon. Forward-looking information speaks only as of the date of this announcement.

The forward looking information included in this announcement is expressly qualified by this cautionary statement and is made as of the date of this announcement. The Group does not undertake any obligation to publicly update or revise any forward looking information except as required by applicable securities laws.

Chairman and Chief Executive's statement

After returning value to shareholders through the successful building and selling of multiple consultancy brands over the past decade, MCG is now focused on the execution of rebuilding and transformation of Proudfoot into a profitable global player in the operations consulting marketplace. With the second half of 2018 delivering a 14% increase in sales on the same period in 2017 and with a significant reduction in operating costs, this now provides the Board with confidence that it is within reach.

The priority in 2018 was to put in place a new American leadership team to develop a strong marketing and sales capability, in order to tap into the world's largest consulting market and position Proudfoot for success in 2019. Additionally, we started to reinvigorate the Proudfoot brand and reputation in that market. The US leadership team was formed late in the first half of the year and by the year-end had re-established Proudfoot as a brand capable of winning and retaining Fortune 500 clients and top talent. This investment will yield benefits into 2019 and beyond. Concurrently, it was critical to maintain growth in Europe which was also achieved.

While Proudfoot continues to focus on operational transformation as its core offering, we have made significant progress in positioning Proudfoot as a transformation leader achieving measurable results through people. This is evident through the expansion of its client base into businesses and industry leaders. Proudfoot continued the rollout of its sector-based go-to-market strategy in the Americas and Europe, focused on the established Natural Resources and Industrials sectors, as well as Maintenance & Repair Operations (MRO) (with a focus on Transportation and Aviation), and Digital & Operational Transformation (with a focus on Financial Services and Healthcare). This approach was taken to reduce the risk of dependence on any one vertical.

Group revenues were GBP28.3m in 2018. While 13% lower than in 2017 (restated: GBP32.7m), second half revenues rose by 14% compared to the same period last year. This was achieved by maintaining growth in Europe, demonstrating the success of our new US talent, continuing a flexible approach to meet client needs and alignment with our specialist verticals. We also continued to invest in sales capability and marketing in order to scale the Proudfoot business to generate the growth required to deliver an increase in value to shareholders.

The Group has continued to reduce its cost base: adjusted operating costs were GBP32.5m in 2018 compared to GBP40.2m (2017 restated), a reduction of approximately 19%. Furthermore we restructured the business to reduce the global administrative footprint by combining the MCG and Proudfoot back-offices across two hubs to service Proudfoot's global business; we sold the Proudfoot Brazilian operations to cost-effectively maintain the Proudfoot brand presence in Brazil through local ownership; and we continue to manage the residual activities and liabilities linked to our discontinued businesses, which has significantly reduced over the course of the last year. The Group reported a narrower adjusted operating loss of GBP4.2m for the year compared to GBP7.5m loss in 2017 (restated). The reported loss for the year was GBP13.7m (2017 restated: GBP31.0m) after charging non-underlying costs of GBP2.2m (2017 restated: GBP1.3m) and the loss on the discontinued business in Brazil of GBP6.7m (2017 restated: GBP1.4m).

As previously reported, the Group successfully raised new equity of GBP8.6m (net of expenses) in July. The issue was well supported by our existing major shareholders and was over-subscribed resulting in applications being scaled back.

The Group's cash and cash equivalents fell to GBP17.3m as at 31 December 2018 (31 December 2017: GBP21.0m). This reflects operating losses as well as restructuring costs and the new equity funds raised and included GBP4.2m (2017: GBP8.5m) held in escrow accounts connected with the sale of parts of the Kurt Salmon business.

In July Pamela Hackett, CEO of Proudfoot, was appointed to the Board, joining Fiona Czerniawska, and together they raise female representation on the Board to one third.

In 2018, we were able, with the support of our shareholders, to progress substantially the investment and reinvigoration of the Proudfoot business, serving our clients successfully and recruiting experienced sales and delivery talent. It is evident that the Proudfoot model has the potential to grow into a global player with the ability to provide lasting value to the world's business community. As we look ahead to 2019, we will seek to maintain and increase the momentum of the transformation we have started in order to deliver a profitable and growing business.

Financial and Operating Review

The Group results have been restated to exclude the results of the Brazilian business which was sold during the year, and therefore the Group financial statements (and the restated 2017 results) reflect the Brazilian results as discontinued operations. Reported discontinued operations in 2018 also reflect the financial effect of this disposal. Following the sale of its Kurt Salmon businesses in 2015 and 2016, the Group's performance now solely reflects its Proudfoot business.

Alternative Performance Measures

We have adopted the use of certain alternative performance measures and therefore have adjusted profit/loss to reflect the exclusion of material non-underlying costs. The non-underlying costs relate to items which are not related to the normal operating costs of the business and therefore have been removed from operating profit/loss to ensure more clarity around the trading operations of the business. Each of the non-underlying costs have been assessed to determine its nature and that the class of cost would not be expected to recur.

Continuing operations

During 2018 we continued to focus on the transformation of Proudfoot, particularly in the US, with further investment in sales capability and marketing.

Group reported revenue for 2018 was 13% lower at GBP28.3m (2017 restated: GBP32.7m), however second half revenues of GBP14.5m showed growth of 14% compared to the second half of 2017 (restated: GBP12.7m). Given the lower revenues, and with substantial cost reduction measures of around 19%, the Group reported a reduced adjusted operating loss of GBP4.2m (2017 restated: loss of GBP7.5m) for the year as a whole. The lower adjusted loss shows the impact of the significant cost reductions implemented and the improvement in second half revenues compared to 2017. The reported operating loss was also lower at GBP6.4m (2017 restated: loss of GBP24.8m)

The Group has reported a net non-underlying charge of GBP2.2m (2017 restated: GBP0.7m) comprising a charge of GBP1.6m relating to restructuring of the Proudfoot business and GBP0.6m provision relating to additional costs from prior years disposals.

The net interest expense from continuing operations was marginally higher at GBP0.7m (2017 restated: GBP0.5m). In accordance with IAS 19 the reported net interest charge for 2018 includes an imputed charge in relation to defined benefit pensions of GBP0.6m (2017 restated: GBP0.6m).

The loss before tax on continuing operations was GBP6.9m (2017 restated: loss of GBP25.3m). The tax charge on continuing operations was GBP0.1m (2017 restated: GBP4.4m credit) which reflects corporate taxes arising in profit-making jurisdictions without the availability of brought forward losses and the impact of project specific withholding taxes, offset by a tax credit relating to prior year adjustments with regard to submitted 2017 tax returns.

As at the date of this report, it is not yet clear whether or when the UK will leave the European Union ('Brexit'). Despite the continued uncertainly, the Board has reviewed the impact of the various potential outcomes of Brexit on the Group, and although the final outcome is not yet clear, we have considered the impact of labour mobility, our client base, regulatory issues, taxation, the potential for more complex administration matters and foreign exchange implications. In particular the Board have considered the impact on our future cash flow forecasts for the purposes of assessing the Group's viability and its status as a going concern. Due to the nature of Proudfoot's business and our group structure and operating model, based on the information available at the date of approval of these financial statements, the Board believes that the Group will not be materially impacted by Brexit, irrespective of the final form this takes.

Discontinued operations

In May 2018, as previously reported, the Group made the decision to sell its Brazilian business, Alexander Proudfoot Servicos Empresarias Ltda. to the local management team. This provided Proudfoot with the ability to maintain a global brand presence in that market but realise the benefits of locally run operations in a non-core market. The loss attributable to discontinued operations was GBP6.7m which comprises a GBP1.4m loss after tax for the period and GBP5.3m being the loss on disposal. The discontinued tax charge of GBP0.8m relates to a reversal of a tax debtor no longer recoverable.

Loss for the year

Taking into account the loss from discontinued operations, the reported Group loss for the year attributable to shareholders was GBP13.7m (2017 restated: GBP31.0m loss).

The adjusted loss per share attributable to continuing operations was 0.5p (restated 2017: loss of 2.4p) and the basic loss per share attributable to continuing operations was 0.7p (restated 2017: loss of 5.8p).

Balance sheet

Intangible assets

Intangible assets of GBP0.04m (2017: GBP0.2m) relate solely to computer software assets following the impairment of goodwill in 2017.

Deferred tax assets

The balance sheet includes GBP0.1m of deferred tax assets (2017: GBP0.1m). In 2018 and 2017, this principally relates to the deferred tax asset on the French pension scheme offset by a small deferred tax liability in Botswana.

Net cash

At 31 December 2018, the Group reported cash and cash equivalents of GBP17.3m (2017: GBP21.0m).

Reported cash balances at 31 December 2018 include GBP4.2m (2017: GBP8.5m) of cash required to be retained to support certain contingent creditors of the Group. In particular, EUR1.6m was held in an escrow account and in addition a further EUR1.6m was held at HSBC to secure further indemnity obligations to Wavestone, the acquirer of the French and related operations of Kurt Salmon. The HSBC security has been extended to 17(th) September 2019. The total held in respect of potential Wavestone claims amounts to EUR3.2m. Although a substantial proportion of this cash is expected to become available to the Group for general corporate purposes as the contingent obligations fall away over time, the exact amount and timing is still subject to uncertainty.

Pensions

The retirement benefits obligation reflected in the Group balance sheet at 31 December 2018 relates to the net liability under a part-funded US defined benefit pension scheme of GBP9.1m, an unfunded French retirement obligation of GBP0.3m, and a legacy Kurt Salmon UK defined benefit pension scheme which shows a closing asset position of GBP0.2m. The US defined benefit pension scheme is not open to new employees and existing members are not accruing further benefits. The net post-retirement obligation for defined benefit schemes increased from GBP7.3m at 31 December 2017 to GBP9.1m at 31 December 2018, principally as a result of the actuarial changes in respect of the US scheme liabilities together with a fall in market value of the investments held to support this liability, most of this decline in market value has been reversed in early 2019. During 2017 the fund was managed on a basis to reduce (as far as possible) the deficit between liabilities and assets whilst maintaining an appropriate risk profile. This was achieved by having 60% of the fund in equities and 40% in bonds. This risk profile was adjusted, in early 2018, to a more conservative 60% in bonds and 40% in equities.

Provisions

Provisions principally relate to the cost of leases for surplus property, other onerous contracts, restructuring costs and other liabilities linked to the 2016 disposals. These have decreased from GBP4.7m at 31 December 2017 to GBP3.7m at 31 December 2018. The reduction principally relates to the utilisation of the provisions set up to cover the transitional service agreements and onerous leases in Atlanta and San Francisco.

Net assets

The net assets of the Group decreased from GBP2.1m at 31 December 2017 to GBP0.8m at 31 December 2018, primarily due to the retained loss for the year offset by the capital increase as a result of raising new equity.

Dividends

The Board does not intend to declare a dividend for 2018 (2017: nil).

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the principal risks and uncertainties section in this announcement. The financial position of the Group is described in this Chairman and Chief Executive's review. In addition, note 2 of the consolidated financial statements include the Group's objectives, policies and processes for managing its capital and its exposures to risk. The Group prepares regular business forecasts which are reviewed by the Board. Forecasts are adjusted for sensitivities, which address the principal risks to which the Group is exposed, and consideration is given to actions open to management to mitigate the impact of these sensitivities. The Board used assumptions for 2019 and in particular, the Board noted that Proudfoot revenues in H2 2018 were 14% higher than in the corresponding period of 2017 and early indications are for a continuation of this trend into 2019. For 2020, the Board's base case assumed that Proudfoot's revenues would continue to rise.

In assessing sensitivities, the Board took into account the previous slower than expected pace of change at Proudfoot and the disappointing results in past periods. The Board has, in particular, considered risks related to revenue and looked at assumptions both consistent with the recent past and the long-term changes in revenue. In addition, we have considered the risks related to the Kurt Salmon escrow funds (being an amount of GBP4.2m as of the date of this report) and have made assumptions on a worst case that these are not resolved during the period of review. The Board has considered mitigating actions that could be taken if these scenarios become likely and these have been reflected in our sensitised forecasts.

These assumptions are predicated on Proudfoot continuing to win and deliver on contracts throughout 2019 and 2020 in line with board expectations.

The Group continues to manage the liabilities related to the disposals made in 2015 and 2016 and, in particular, to negotiate the release of funds held under the escrow arrangements which guarantee certain contingent liabilities relating to the disposal of parts of the Kurt Salmon business in 2016.

The Board has concluded that its forecasts, even on a worst case basis, indicate that the Group has adequate resources to be able to operate for the foreseeable future. For this reason, the going concern basis has been adopted in preparing the financial statements.

Outlook

The Board notes Proudfoot revenues in H2 2018 were 14% higher than in the corresponding period of 2017 and early indications are for a continuation of this trend going forwards. The necessary infrastructure has now been put in place for Proudfoot to grow its client base and revenues, and we continue to see evidence that clients value the work we do for them. With this, and the distinctly new positioning of Proudfoot as a firm that delivers not only results but visible behaviour and cultural change for our clients, the Board remains confident in the power of the Proudfoot model to deliver sustainable improvement and change for our clients.

The Board is confident of a return to increasing revenues and profitability within the underlying Proudfoot business together with a successful resolution of historic liabilities on disposals.

Principal risks and uncertainties

Identifying key areas

The Board has carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity.

Risk management process

The risk management process can be summarised as follows:

Identify risk, then assess, develop mitigation plans, reassess and report to the Board

1. Demand for services provided by Proudfoot in the markets and sectors in which it operates

Description

Proudfoot operates in several geographies and industry sectors and demand for its services can be affected by global, regional or national macro-economic conditions and conditions within individual industry sectors. Proudfoot operates in a competitive environment, where other consulting firms seek to provide similar services to its clients. Changes in demand for Proudfoot's services can significantly impact revenues and profits.

Mitigation

In response to anticipated changes in demand and competitive pressures, the Group made changes in 2018 to Proudfoot's offering to exploit opportunities for business in geographies and sectors where demand is increasing. Proudfoot operates a flexible model and can deploy staff to areas of higher demand to optimise utilisation. Part of the total remuneration paid to senior employees is in the form of variable pay related to financial performance, which provides some profit mitigation in the event of a decline in revenues.

Level

Market conditions in 2018 varied between the key sectors and geographies in which Proudfoot operates, in some cases showing positive trends, in others negative ones. Demand from Natural Resources clients, a key sector for Proudfoot's services, improved in 2018.

2 Development and retention of key client relationships

Description

Proudfoot typically contracts with clients for the delivery of project-related consulting services over relatively short periods. These individual projects can lead to repeat business or form part of a longer-term series of related projects. However, individual clients may change their preferred suppliers or may change the quantity of such services or the price at which they buy such services. Failure by Proudfoot to develop and retain client relationships could result in a significant reduction in the Group's revenues. Potential unforeseen contractual liabilities may arise from client engagements that are not completed satisfactorily.

Mitigation

The changes made to Proudfoot's business processes in 2018 were designed to promote and enhance client relationships, and to generate revenues over longer periods than those of a typical single project. This includes different contracting models as well as a continued focus on the delivery of high quality work that meets clients' expectations. Our human resources management policies emphasise the importance of maintaining and developing client relationships. Potential contractual liabilities arising from client engagements are managed through the control of contractual conditions and insurance arrangements.

Increasing

Proudfoot has retained key client relationships and continued to work to develop new long-term relationships. Repeat work for clients in 2018 rose to 63%

3 Recruitment and retention of talented employees

Description

The Group is dependent on the recruitment and retention of key personnel to develop and maintain relationships with clients and to deliver high quality services. Any failure to attract and retain such personnel, or which results in their unforeseen departure from the business, may have detrimental consequences on the Group's financial performance. The Group has made a number of important hires in 2018 notably in its US business.

Mitigation

The Group has remuneration policies and structures that reward good performance consistent with prevailing market levels of remuneration. For senior employees, a significant element of total remuneration is variable and linked to financial and other performance measures, which provides opportunities for enhanced rewards. The Group is actively looking to hire from as broad a pool of talent as possible.

Increasing

Staff retention has been managed effectively and we have recruited in areas of the business which are being developed as the business returns to growth. Further skilled consultants will need to be recruited.

4 Optimisation of the Group's intellectual capital

Description

The intellectual capital of the Proudfoot business, including its methodologies and its track record of successful sale and delivery of assignments to clients, is a key asset which must be maintained, continually developed and protected, so that its offerings remain distinctive and attractive to clients. It is possible that employees who exit the business may appropriate this intellectual capital for use by themselves or by the Group's competitors.

Mitigation

The Group maintains a comprehensive knowledge management system to record its methodologies and track record of client assignments. It develops and refreshes these continually in response to, and in anticipation of, market demand. The Group protects its intellectual property through appropriate contractual arrangements with employees and others, and through legal action where necessary.

Level

We have continued to invest to develop new offerings and to build our intellectual capital.

5 Fluctuations in foreign currency exchange rates

Description

The Group reports its results and financial position in Pounds Sterling, but operates in and provides services to clients in many countries around the world, conducting most of its business in other currencies. In particular, a significant proportion of the Group's business is conducted in US Dollars and Euros. Fluctuations in prevailing exchange rates may have a significant impact on reported revenues.

Mitigation

Where appropriate, the Group will undertake hedging to mitigate currency risk. This is rarely undertaken since the Group's cost base is, in broad terms, located in those countries in which the Group generates revenues. The currencies in which costs and revenues are denominated are therefore, to a great extent, matched and this tends to reduce the impact of exchange rate fluctuations on reported profits.

Level

Currency volatility has not had a significant impact on reported revenues and operating results in 2018.

6. Management of residual liabilities

Description

In 2016, the Group completed three major disposals. As part of these disposals, the Group agreed to provide certain transitional services and also retained responsibility for certain contingent liabilities relating to the businesses sold. It placed certain of its cash balances in escrow as guarantees for these potential liabilities. The amount of actual costs and the timing and amount of the release of cash from escrow could vary from our initial assumptions, thereby reducing the amount of liquidity available for the Group's Continuing operations.

Mitigation

The initial contractual arrangements were structured to limit in amount and time the overall potential liabilities of the Group and management monitors the actual costs and potential liabilities.

Level

Whilst transition services agreements have been effectively managed and have now been completed, there remains risk to the effective timing of release from liabilities (including of cash reserved to cover them) arising from existing warranty claims from the acquirers.

7. Pension liabilities

Description

The Group has a number of retirement plans covering both current and former employees, including defined benefit plans notably in the US and the UK. The US defined benefit pension scheme is not open to new employees and existing members are not accruing further benefits. The net post-retirement obligation for defined benefit schemes increased from GBP7.3m at 31 December 2017 to GBP9.3m at 31 December 2018, principally as a result of the actuarial changes in respect of the US scheme liabilities together with a fall in market value of the investments held to support this liability. There is a risk that the amount of the liability changes depending on the actuarial value and investment return in the schemes. In addition, there is a risk that if the funding ratio in the US drops significantly there would be a risk for additional contributions into the fund thereby decreasing the Group's cash resources.

Mitigation

The Group maintains an active dialogue with the trustees of the plans. In addition, the Group continues to explore exit plans for the remaining plan members of the Kurt Salmon UK pension scheme.

Level

The increased liability for the US defined benefit pension scheme due to falls in the stock market in December 2018. These market losses were materially reversed in January 2019 and the deficit has subsequently reduced.

Viability statement

As referred to above, the Board having considered the impact of Brexit, do not see this resulting in any significant additional challenges to the Group and therefore does not change in our view the Group's viability.

The Directors have assessed the Group's prospects, taking into account its current position and the principal risks to the business, over a two-year time period. The Directors consider this to be the appropriate time horizon given the Group's continuing operations, retained obligations after the 2015 and 2016 disposals, its financial position and the industry segments to which it provides services. Furthermore, the use of a two year review period is considered appropriate due to the nature of short term nature of the order book. This is consistent with the period which has been used for planning purposes and with the approach taken in 2017.

Having completed the fund raising in 2018 and reduced the Group's cost base, the stress testing of the Group's cash flows show that the business can withstand further delays to recovery, which are not expected, without the need for further cash resources.

Following the disposals, the Group's continuing business comprises Proudfoot, and is materially smaller, less diverse and has reduced global reach and scale. The Board remains committed to improving the performance of Proudfoot and restoring that business to profitable growth. Proudfoot has a long-established brand and a historically successful business model. The Board has in place a plan to restore revenue growth and profitability in the Proudfoot business. The Board has prepared an operating budget and financial projections for the Group covering 2019 and 2020 as part of its strategic planning process. The Directors have assessed the financial impact of potential downside financial scenarios, taking into account the principal risks to the business, and the potential uncertainties arising from Brexit and the actions that the Board can take to mitigate those risks and reduce costs. The Board has, in particular, considered risks related to revenue and looked at assumptions consistent with both the recent and long-term changes in revenue, including no growth in revenue and decreasing revenue in line with historic long-term trends. In addition, the Board has considered the risks related to the Kurt Salmon escrow funds (being an amount of GBP4.2m as of the date of this report) and have made assumptions on a worst case that these are not resolved during the period of review. The Board has considered mitigating actions that could be taken if these scenarios become likely and these have been reflected in the Group's sensitised forecasts. The Board has concluded that, even in the reasonable worse case, the Group has sufficient cash resources.

On the basis of the assessment summarised above, the Directors have a reasonable expectation that the Group can continue to operate and meet its liabilities as they fall due for the foreseeable future, being the two years considered.

Group income statement

for the year ended 31 December 2018

 
                                                                            2017 
                                                                2018     GBP'000 
                                                     Note    GBP'000    Restated 
--------------------------------------------------  -----  ---------  ---------- 
 Continuing operations 
 Revenue                                                5     28,285      32,714 
 Cost of sales                                              (13,975)    (17,122) 
--------------------------------------------------  -----  ---------  ---------- 
 Gross profit                                                 14,310      15,592 
--------------------------------------------------  -----  ---------  ---------- 
 Administrative expenses - adjusted                     6   (18,521)    (23,068) 
--------------------------------------------------  -----  ---------  ---------- 
 Loss from operations - adjusted                             (4,211)     (7,476) 
 Administrative expenses - non-underlying 
  impairment                                           6a          -    (16,665) 
 Administrative expenses - non-underlying 
  other                                                6a    (2,156)     (1,336) 
 Administrative expenses - non-underlying 
  credit                                               6a          -         664 
--------------------------------------------------  -----  ---------  ---------- 
 Total administrative expenses                              (20,677)    (40,405) 
--------------------------------------------------  -----  ---------  ---------- 
 Operating loss                                              (6,367)    (24,813) 
 Investment revenues                                   8a         89         224 
 Finance costs                                         8b      (670)       (719) 
--------------------------------------------------  -----  ---------  ---------- 
 Loss before tax                                        6      6,948    (25,308) 
 Tax                                                    9      (112)     (4,350) 
--------------------------------------------------  -----  ---------  ---------- 
 Loss for the period from continuing operations              (7,060)    (29,658) 
 Loss for the period from discontinued operations      12    (6,670)     (1,361) 
--------------------------------------------------  -----  ---------  ---------- 
 Loss for the period                                        (13,730)    (31,019) 
--------------------------------------------------  -----  ---------  ---------- 
 Loss per share - pence 
 From loss from continuing operations for 
  the year attributable to owners of the 
  Company: 
 Basic                                                 10      (0.6)       (5.8) 
 Diluted                                               10      (0.6)       (5.8) 
 Basic - adjusted                                      10      (0.5)       (2.4) 
 Diluted - adjusted                                    10      (0.5)       (2.4) 
--------------------------------------------------  -----  ---------  ---------- 
 From the loss for the period: 
 Basic                                                 10      (1.4)       (6.1) 
 Diluted                                               10      (1.4)       (6.1) 
 Basic - adjusted                                      10      (0.6)       (2.6) 
 Diluted - adjusted                                    10      (0.6)       (2.6) 
--------------------------------------------------  -----  ---------  ---------- 
 

Group statement of comprehensive income

for the year ended 31 December 2018

 
                                                                    2018       2017 
                                                                 GBP'000    GBP'000 
-------------------------------------------------------  ----  ---------  --------- 
 Loss for the year                                              (13,730)   (31,019) 
-------------------------------------------------------------  ---------  --------- 
 Items that will not be reclassified subsequently 
  to profit and loss 
 Actuarial (losses)/gains on defined benefit 
  post-retirement obligations                                      (789)      3,838 
 Tax items taken directly to comprehensive income                      6    (3,867) 
 Exchange differences recycled through loss                        4,931          - 
  for the year as part of the Brazil disposal 
-------------------------------------------------------  ----  ---------  --------- 
                                                                   4,148       (29) 
 ----                                                          ---------  --------- 
 Items that may be reclassified subsequently 
  to profit and loss 
 Exchange differences on translation of foreign 
  operations                                                       (342)        643 
                                                                   (342)        643 
 ----                                                          ---------  --------- 
 Total comprehensive expense for the year attributable 
  to owners of the Company                                       (9,924)   (30,405) 
--------------------------------------------------------  ---  ---------  --------- 
 
 

Group statement of changes in equity

for the year ended 31 December 2018

 
                                                            Shares 
                                                              held 
                                                                by 
                                                  Share   employee 
                        Share      Share   compensation    benefit   Translation      Other   Retained 
                      capital    premium        reserve     trusts       reserve   reserves   earnings        Total 
                      GBP'000    GBP'000        GBP'000    GBP'000       GBP'000    GBP'000    GBP'000      GBP'000 
------------------  ---------  ---------  -------------  ---------  ------------  ---------  ---------  ----------- 
 Balance at 1 
  January 
  2017                  5,111      8,023            226      (108)       (3,376)      7,064     15,672       32,612 
------------------  ---------  ---------  -------------  ---------  ------------  ---------  ---------  ----------- 
 Loss for the 
  period                    -          -              -          -             -          -   (31,019)     (31,019) 
 Other 
  comprehensive 
  income/(expense)          -          -              -          -           643          -       (29)          614 
------------------  ---------  ---------  -------------  ---------  ------------  ---------  ---------  ----------- 
 Total 
  comprehensive 
  income/(expense)          -          -              -          -           643          -   (31,048)   (30,405) 
 Share based 
  payments                  -          -           (63)          -             -          -          -         (63) 
 Lapsed/Vested 
  shares                    -          -            (5)          -             -          -          -          (5) 
 Shares 
  transferred 
  from ESOP                 -          -              -          5             -          -          -            5 
 Balance at 31 
  December 
  2017                  5,111      8,023            158      (103)       (2,733)      7,064   (15,376)        2,144 
------------------  ---------  ---------  -------------  ---------  ------------  ---------  ---------  ----------- 
 Loss for the 
  period                    -          -              -          -             -          -   (13,730)     (13,730) 
 Other 
  comprehensive 
  income/(expense)          -          -              -          -         4,589          -      (783)        3,806 
------------------  ---------  ---------  -------------  ---------  ------------  ---------  ---------  ----------- 
 Total 
  comprehensive 
  income/(expense)          -          -              -          -         4,589          -   (14,513)      (9,924) 
 Transition to 
  IFRS 
  9                         -          -              -          -             -          -      (153)        (153) 
 Issue of new 
  shares               10,054    (1,409)              -          -             -          -          -        8,645 
 Share based 
  payments                  -          -             74          -             -          -          -           74 
 Balance at 31 
  December 
  2018                 15,165      6,614            232      (103)         1,856      7,064   (30,042)          786 
------------------  ---------  ---------  -------------  ---------  ------------  ---------  ---------  ----------- 
 
 

Group balance sheet

as at 31 December 2018

 
                                                      2018       2017 
                                                   GBP'000    GBP'000 
----------------------------------------------   ---------  --------- 
 Non-current assets 
 Intangible assets and goodwill                         40        151 
 Property, plant and equipment                         108        358 
 Other receivables                                     420        394 
 Deferred tax assets                                    86         79 
-----------------------------------------------  ---------  --------- 
 Total non-current assets                              654        982 
-----------------------------------------------  ---------  --------- 
 Current assets 
 Trade and other receivables                         6,400      4,075 
 Current tax receivables                               164        965 
 Cash and cash equivalents                          17,263     20,979 
 Total current assets                               23,827     26,019 
-----------------------------------------------  ---------  --------- 
 Total assets                                       24,481     27,001 
-----------------------------------------------  ---------  --------- 
 
 Current liabilities 
 Trade and other payables                          (9,548)   (11,390) 
 Current tax liabilities                           (1,153)    (1,391) 
 Total current liabilities                        (10,701)   (12,781) 
-----------------------------------------------  ---------  --------- 
 Net current assets                                 13,126     13,238 
-----------------------------------------------  ---------  --------- 
 Non-current liabilities 
 Retirement benefit obligations                    (9,286)    (7,320) 
 Deferred tax liabilities                              (4)       (24) 
 Long-term provisions                              (3,704)    (4,732) 
-----------------------------------------------  ---------  --------- 
 Total non-current liabilities                    (12,994)   (12,076) 
-----------------------------------------------  ---------  --------- 
 Total liabilities                                (23,695)   (24,857) 
-----------------------------------------------  ---------  --------- 
 Net assets                                            786      2,144 
-----------------------------------------------  ---------  --------- 
 Equity 
 Share capital                                      15,165      5,111 
 Share premium account                               6,614      8,023 
 Share compensation reserve                            232        158 
 Shares held by employee benefit trusts              (103)      (103) 
 Translation reserve                                 1,856    (2,733) 
 Other reserves                                      7,064      7,064 
 Retained earnings                                (30,042)   (15,376) 
-----------------------------------------------  ---------  --------- 
 Equity attributable to owners of the Company          786      2,144 
-----------------------------------------------  ---------  --------- 
 

Group cash flow statement

for the year ended 31 December 2018

 
                                                            2018       2017 
                                                 Note    GBP'000    GBP'000 
----------------------------------------------  -----  ---------  --------- 
 Net cash outflow from operating activities        11   (11,867)   (15,014) 
----------------------------------------------  -----  ---------  --------- 
 Investing activities 
 Interest received                                            89        224 
 Purchases of property, plant and equipment                  (4)      (108) 
 Purchases of intangible assets                                -       (15) 
 Net cost of disposal                                      (804)          - 
 Net cash (used in)/generated from investing 
  activities                                               (719)        101 
----------------------------------------------  -----  ---------  --------- 
 Financing activities 
 Net proceeds of issue of new shares                       8,645          - 
 Net cash generated from financing activities              8,645          - 
----------------------------------------------  -----  ---------  --------- 
 Net decrease in cash and cash equivalents               (3,941)   (14,913) 
 Cash and cash equivalents at beginning 
  of year                                                 20,979     38,067 
 Effect of foreign exchange rate changes 
  on cash                                                    225    (2,175) 
----------------------------------------------  -----  ---------  --------- 
 Cash and cash equivalents at end of year          11     17,263     20,979 
----------------------------------------------  -----  ---------  --------- 
 

Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less, net of outstanding bank overdrafts. The carrying amount of these assets is approximately equal to their fair value. Cash and cash equivalents at the end of the reporting period as shown in the consolidated statement of cash flows can be reconciled to the related items in the consolidated balance sheet position as shown above.

Notes

1. Basis of preparation

The financial information included in this statement does not constitute the Company's statutory accounts for the years ended 31 December 2018 or 2017 but is derived from those accounts. Statutory accounts for 2017 have been delivered to the Registrar of Companies and those for 2018 will be delivered following the Company's annual general meeting. An unqualified report including an emphasis of matter in respect of going concern was issued on the 2017 financial statements, and did not contain statements under section 498 Companies Act 2006. A condensed version is attached to this preliminary announcement.

While the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS.

The Group's Annual Report and Accounts and notice of Annual General Meeting will be sent to shareholders and will be available at the Company's registered office at St Paul's House, 4(th) Floor, 10 Warwick Lane, London, EC4M 7BP, United Kingdom and on our website: www.mcgplc.com.

2. Significant accounting policies

The financial information has been prepared in accordance with IFRS. These financial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these statements (as at 31 December 2018). The policies have been consistently applied to all the periods presented.

Full details of the Group's accounting policies can be found in note 2 to the 2017 Annual Report which is available on our website: www.mcgplc.com.

3. Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report. The Group prepares regular business forecasts which are reviewed by the Board. Forecasts are adjusted for sensitivities, which address the principal risks to which the Group is exposed, and consideration is given to actions open to management to mitigate the impact of these sensitivities. The Board used assumptions for 2019 and in particular, the Board noted that Proudfoot revenues in H2 2018 were 14% higher than in the corresponding period of 2017 and early indications are for a continuation of this trend into 2019. For 2020, the Board's base case assumed that Proudfoot's revenues would continue to rise.

In assessing sensitivities, the Board took into account the previous slower than expected pace of change at Proudfoot and the disappointing results in past periods. The Board has, in particular, considered risks related to revenue and looked at assumptions both consistent with the recent past and the long-term changes in revenue, including no growth in revenue and decreasing revenue in line with historic long-term trends. In addition, we have considered the risks related to the Kurt Salmon escrow funds (being an amount of GBP4.2m as of the date of this report) and have made assumptions on a worst case that these are not resolved during the period of review. The board has considered mitigating actions, including reductions in discretionary compensation and reversal of the investments made in marketing and business development expenditure that could be taken if any of these scenarios become likely and these have been reflected in our sensitised forecasts.

In addition, the Board has taken into consideration, as at the date of this report, that it is not yet clear whether or when the UK will leave the European Union ('Brexit'). Despite the continued uncertainly, the Board has reviewed the impact of the various potential outcomes of Brexit on the Group, and although the final outcome is not yet clear, we have considered the impact of labour mobility, our client base, regulatory issues, taxation, the potential for more complex administration matters and foreign exchange implications. In particular the Board have considered the impact on our future cash flow forecasts for the purposes of assessing the Group's status as a going concern. Due to the nature of Proudfoot's business and our group structure and operating model, based on the information available at the date of approving these financial statements, the Board believes that the Group will not be materially impacted by Brexit, irrespective of the form this takes.

The Group continues to manage the liabilities related to the disposals made in 2015 and 2016 and, in particular to negotiate the release of funds held under the escrow arrangements which guarantee certain contingent liabilities relating to the disposal of parts of the Kurt Salmon business in 2016.

These assumptions are predicated on Proudfoot continuing to win and deliver on contracts throughout 2019 and 2020 in line with board expectations

The Board has concluded that its forecasts, even on a worst case basis, indicate that the Group has adequate resources to be able to operate for the foreseeable future. For this reason, the going concern basis has been adopted in preparing the financial statements.

4. Alternative performance measures

The Group has adopted a number of alternative performance measures to provide additional information to understand underlying trends and the performance of the Group. These alternative performance measures are not defined by IFRS and therefore may not be directly comparable to other companies' alternative performance measures.

Adjusted profit/loss from operations

The Group's operating results are split between adjusted and non-underlying to better understand the performance of the group without distortion by items of income and expense that are of non-underlying in nature. The definition of non-underlying is referred to below. Adjusted profit/loss is used by management internally to evaluate performance and to establish and measure strategic goals. Adjusted profit/loss is arrived at by removing non-underlying items from operating profit/loss as seen on the face of the income statement reconciled to gross and operating profit. Adjusted loss per share is reconciled to loss per share by removing non-underlying items from operating profit/loss.

Non-underlying

Non-underlying items are those significant charges or credits which, in the opinion of the directors, should be disclosed separately by virtue of their size or incidence to enable a full understanding of the Group's financial performance. Transactions that may give rise to non-underlying items include charges for impairment, restructuring costs, employee severance, acquisition costs and profits/losses on disposals of subsidiaries. The Group exercises judgement in assessing whether items should be classified as non-underlying. This assessment covers the nature of the item and the material impact of that item on reported performance. Reversals of previous items are assessed based on the same criteria. Items charged to non- underlying are one off in nature and typically comprise restructuring, impairments, disposals and acquisitions. None of these items form part of the ongoing operational costs of the business.

5. Operating segments

The Group's continuing operating segment is one professional services practice, Proudfoot. This is the basis on which information is provided to the Board of Directors for the purposes of allocating certain resources within the Group and assessing the performance of the business. All revenues are derived from the provision of professional services.

(a) Geographical analysis

The Group operates in three geographical areas: the Americas, Europe and the Rest of the World. The following is an analysis of financial information by geographic area:

(i) Revenue and adjusted operating loss by geography

 
                                                                    Rest of 
                                           Americas     Europe    the World      Group 
 Year ended 31 December 2018                GBP'000    GBP'000      GBP'000    GBP'000 
----------------------------------------  ---------  ---------  -----------  --------- 
 Revenue - continuing operations              7,101     18,751        2,433     28,285 
----------------------------------------  ---------  ---------  -----------  --------- 
 Adjusted (Loss)/profit from operations     (4,249)        696        (658)    (4,211) 
 Non-underlying expenses                      (608)    (1,409)        (139)    (2,156) 
 Loss from operations                       (4,857)      (713)        (797)    (6,367) 
----------------------------------------  ---------  ---------  -----------  --------- 
 Investment revenue                                                                 89 
 Finance costs                                                                   (670) 
----------------------------------------  ---------  ---------  -----------  --------- 
 Loss before tax                                                               (6,948) 
----------------------------------------  ---------  ---------  -----------  --------- 
 

Included in revenues arising from Europe are revenues of approximately GBP3.7m which arose from sales in 2018 to the Group's largest customer. In 2017, revenues in Americas reflected GBP3.6m of revenue which arose from sales to Groups largest customer. In either year no other single customer contributed to 10% or more to the Group's revenue in 2018 or 2017.

 
                                                                      Rest of 
                                            Americas      Europe    the World       Group 
                                             GBP'000     GBP'000      GBP'000     GBP'000 
 Year ended 31 December 2017                restated    restated     restated    restated 
----------------------------------------  ----------  ----------  -----------  ---------- 
 Revenue - continuing operations              12,988      14,762        4,964      32,714 
----------------------------------------  ----------  ----------  -----------  ---------- 
 Adjusted loss from operations               (5,321)     (1,580)        (575)     (7,476) 
 Non-underlying expenses                     (1,037)       (148)        (151)     (1,336) 
 Non-underlying income                           664           -            -         664 
----------------------------------------  ----------  ----------  -----------  ---------- 
 Loss from operations before impairment      (5,694)     (1,728)        (726)     (8,148) 
----------------------------------------  ----------  ----------  -----------  ---------- 
 Goodwill impairment                                                             (16,665) 
----------------------------------------  ----------  ----------  -----------  ---------- 
 Loss from operations                                                            (24,813) 
 Investment revenue                                                                   224 
 Finance costs                                                                      (719) 
----------------------------------------  ----------  ----------  -----------  ---------- 
 Loss before tax                                                                 (25,308) 
----------------------------------------  ----------  ----------  -----------  ---------- 
 

(ii) Net assets by geography

 
                                                                Rest of 
                                       Americas     Europe    the World      Group 
 At 31 December 2018                    GBP'000    GBP'000      GBP'000    GBP'000 
------------------------------------  ---------  ---------  -----------  --------- 
 Assets 
 Intangibles                                 40          -            -         40 
 Other segment assets                     3,353      5,510          105      8,968 
------------------------------------  ---------  ---------  -----------  --------- 
 Total assets allocated to segments       3,393      5,510          105      9,008 
 Unallocated corporate assets                                               15,473 
------------------------------------  ---------  ---------  -----------  --------- 
 Consolidated total assets                                                  24,481 
------------------------------------  ---------  ---------  -----------  --------- 
 Liabilities 
 Segment liabilities                   (11,194)    (6,522)      (1,038)   (18,754) 
 Unallocated corporate liabilities                                         (4,941) 
------------------------------------  ---------  ---------  -----------  --------- 
 Consolidated total liabilities                                           (23,695) 
------------------------------------  ---------  ---------  -----------  --------- 
 Net assets                                                                    786 
------------------------------------  ---------  ---------  -----------  --------- 
 
 
                                                                  Rest of 
                                        Americas      Europe    the World       Group 
                                         GBP'000     GBP'000      GBP'000     GBP'000 
 At 31 December 2017                    restated    restated     restated    restated 
------------------------------------  ----------  ----------  -----------  ---------- 
 Assets 
 Intangibles                                 151           -            -         151 
 Other segment assets                      2,401       3,417          901       6,719 
------------------------------------  ----------  ----------  -----------  ---------- 
 Total assets allocated to segments        2,552       3,417          901       6,870 
 Unallocated corporate assets                                                  20,131 
------------------------------------  ----------  ----------  -----------  ---------- 
 Consolidated total assets                                                     27,001 
------------------------------------  ----------  ----------  -----------  ---------- 
 Liabilities 
 Segment liabilities                    (10,909)     (5,692)      (2,269)    (18,870) 
 Unallocated corporate liabilities                                            (5,987) 
------------------------------------  ----------  ----------  -----------  ---------- 
 Consolidated total liabilities                                              (24,857) 
------------------------------------  ----------  ----------  -----------  ---------- 
 Net assets                                                                     2,144 
------------------------------------  ----------  ----------  -----------  ---------- 
 

6. Loss before tax

Loss before tax has been arrived at after charging/(crediting) the following:

 
                                                  Note                            2017 
                                                                      2018     GBP'000 
                                                                   GBP'000    restated 
-----------------------------------------------  -----  ------------------  ---------- 
 Net foreign exchange losses                                            58       1,175 
 Amortisation of intangible assets                                     114       1,503 
 Depreciation of property, plant and equipment                         126         784 
 Loss on disposal of fixed assets                                      117           - 
 Non-underlying items - impairment                  6a                   -      16,665 
 Non -underlying expense - other                    6a               2,156       1,336 
 Non-underlying income                              6a                   -       (664) 
 Staff costs                                         7              20,456      23,557 
 Auditors remuneration                                                 602         414 
-----------------------------------------------  -----  ------------------  ---------- 
 

A detailed analysis of the auditor's remuneration on a worldwide basis is provided below:

 
                                                                 2018       2017 
 Auditor's remuneration                                       GBP'000    GBP'000 
----------------------------------------------------------  ---------  --------- 
 Fees payable to the Company's auditor for the audit 
  of the Company's annual accounts                                 50         47 
 Fees payable to the Company's auditor and its associates 
  for the audit of the Company's subsidiaries                     182        173 
----------------------------------------------------------  ---------  --------- 
 Total audit fees                                                 232        220 
----------------------------------------------------------  ---------  --------- 
 Taxation compliance services                                      71         51 
 Audit related assurance services                                  38         30 
 Taxation advisory services                                        11          - 
 Other non-audit services([) *(])                                 250        113 
----------------------------------------------------------  ---------  --------- 
 Total non-audit fees                                             370        194 
----------------------------------------------------------  ---------  --------- 
 Total auditor's remuneration                                     602        414 
----------------------------------------------------------  ---------  --------- 
 

* Other non-audit services in 2018 include a fee of GBP250,000 for reporting accounts work performed in respect of the placing and open offer. (2017: GBP112,500 for reviewing the projections and assumptions within the Group's financial models).

A description of the work of the Audit and Risk Committee is set out in the Report of the Audit and Risk Committee and includes an explanation of how auditor objectivity and independence are safeguarded when non-audit services are provided by the auditor.

6a. Non underlying items

 
                                                                      2017 
                                                          2018     GBP'000 
                                                       GBP'000    restated 
---------------------------------------------------  ---------  ---------- 
 Restructuring                                           1,630         984 
 Employee provision                                          -         352 
 Goodwill impairment                                         -      16,665 
 Defined medical benefit scheme closure                   (74)       (664) 
 Additional costs relating to prior year disposals         600           - 
---------------------------------------------------  ---------  ---------- 
                                                         2,156      17,337 
---------------------------------------------------  ---------  ---------- 
 

Items charged to non- underlying are one off in nature and typically comprise restructuring, impairments, disposals and acquisitions. None of these items form part of the ongoing operational costs of the business. The GBP2.2m (2017 restated: GBP17.3m) of non-underlying expenses comprises GBP0.9m of restructuring related redundancy costs and employee severance, GBP0.7m in relation to advisory fees incurred for restructuring, and GBP0.6m provision relating to additional costs from prior years disposals. The GBP0.1m credit is in relation to the release of a provision in relation to the closure of the Proudfoot Defined Benefit medical Scheme in December 2016

GBP17.3m of non-underlying expenses in 2017 comprise GBP16.7m of goodwill impairment, GBP0.9m of restructuring-related redundancy costs and employee severance, GBP0.3m in connection to a provision charge for a former Proudfoot employee's ongoing contractual pension payments and GBP0.1m in relation to advisory fees incurred for restructuring. The GBP0.7m credit is in relation to the release of a provision in relation to the closure of the Proudfoot Defined Benefit Medical Scheme in December 2016.

7. Staff numbers and costs

The average number of persons employed by the Group (including executive directors) during the year, analysed by category, was as follows:

 
 
                               2018            2017 
                             Number    re-presented 
-------------------------  --------  -------------- 
 Sales and marketing             42              38 
 Consultants                     79             107 
 Support staff                   33              46 
-------------------------  --------  -------------- 
 Continuing activities          154             191 
-------------------------  --------  -------------- 
 Discontinued operations         19              23 
-------------------------  --------  -------------- 
 Total                          173             214 
-------------------------  --------  -------------- 
 

The number of Group employees at the year-end was 147 being employed by continuing operations (2017 restated: 191).

The aggregate payroll costs were as follows:

 
                                                  2017 
                                      2018     GBP'000 
                                   GBP'000    restated 
-------------------------------  ---------  ---------- 
 Wages and salaries                 18,063      20,573 
 Social security costs               1,693       2,163 
 Other including pension costs         700         821 
-------------------------------  ---------  ---------- 
                                    20,456      23,557 
-------------------------------  ---------  ---------- 
 

The average number of Company employees for the year was 9 (2017: 11). The payroll costs of the Company were GBP1,605,000 (2017: GBP1,565,000) for wages and salaries, GBP140,000 (2017: GBP189,000) for social security costs and GBP77,000 (2017: GBP68,000) for pension costs. Disclosures in respect of directors' emoluments are included in the Directors' Remuneration Report.

8a. Investment revenues

 
                                                         2018       2017 
                                                      GBP'000    GBP'000 
--------------------------------------------------  ---------  --------- 
 Interest receivable on bank deposits and similar 
  income                                                   89        224 
--------------------------------------------------  ---------  --------- 
 

8b. Finance costs

 
                                                   2018       2017 
                                                GBP'000    GBP'000 
-------------------------------------------   ---------  --------- 
 Interest payable on bank overdrafts and 
  loans and similar charges                        (37)       (77) 
 Finance costs on retirement benefit plans        (633)      (642) 
--------------------------------------------  ---------  --------- 
                                                  (670)      (719) 
 -------------------------------------------  ---------  --------- 
 

9. Tax

 
                                                        2018                                   2017 
                                       -------------------------------------  -------------------------------------- 
                                                                                    Before 
                                             Before                                   non-          Non- 
                                               non-          Non-               underlying    underlying 
 Recognised in the income statement:     underlying    underlying                    items         items       Total 
  Income tax expense on continuing            items         items      Total       GBP'000       GBP'000     GBP'000 
  operations                                GBP'000       GBP'000    GBP'000      restated      restated    restated 
-------------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 Current tax 
 Current year                                   380             -        380           856             -         856 
 Adjustment in respect of prior 
  years                                       (249)             -      (249)            95             -          95 
-------------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 Current tax expense                            131             -        131           951             -         951 
-------------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 Deferred tax 
 Current year                                  (19)             -       (19)         3,204             6       3,210 
 Adjustment in respect of prior 
  years                                           -             -          -           189             -         189 
-------------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 Deferred tax (credit)/expense                 (19)             -       (19)         3,393             6       3,399 
-------------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 Total income tax 
 Income tax expense on continuing 
  activities                                    112             -        112         4,344             6       4,350 
-------------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 
 

The income tax expense for the year is based on the effective United Kingdom statutory rate of corporation tax for the period of 19% (2017: 19.25%). Overseas tax is calculated at the rates prevailing in the respective jurisdictions.

The tax charge for the year can be reconciled to the pre-tax loss from continuing operations per the income statement as follows:

 
                                                     2018                                   2017 
                                    -------------------------------------  -------------------------------------- 
                                                                                 Before 
                                          Before                                   non-          Non- 
                                            non-          Non-               underlying    underlying 
                                      underlying    underlying                    items         items       Total 
                                           items         items      Total       GBP'000       GBP'000     GBP'000 
                                         GBP'000       GBP'000    GBP'000      restated      restated    restated 
----------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 Loss before tax from continuing 
  operations                             (4,792)       (2,156)    (6,948)       (7,971)      (17,337)    (25,308) 
----------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 Notional income tax credit at 
  the effective UK tax rate of 
  19.00% (2017: 20.0%)                     (910)         (424)    (1,334)       (1,534)       (3,337)     (4,871) 
 Unrelieved current year tax 
  losses                                   1,925           266      2,191         2,688           262       2,950 
 Irrecoverable withholding tax               153             -        153           231             -         231 
 Effects of different tax rates 
  of subsidiaries operating in 
  other jurisdictions                      (293)             -      (293)          (71)             1        (70) 
 Reassessment of deferred tax 
  recognition policy                           -             -          -         3,291             -       3,291 
 Profits offset by losses not 
  previously recognised                    (452)             -      (452)         (746)             -       (746) 
 Other temporary differences 
  not previously recognised                (573)             -      (573)       (1,713)             -     (1,713) 
 Permanent differences                       511           158        669         1,915         3,080       4,995 
 Relating to prior years                   (249)             -      (249)           283             -         283 
----------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 Income tax expense on continuing 
  operations                                 112             -        112         4,344             6       4,350 
----------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 Effective tax rate for the year            (2%)                     (2%)         (54%)                     (17%) 
----------------------------------  ------------  ------------  ---------  ------------  ------------  ---------- 
 
 

Permanent differences reflect tax adjustments for intercompany transactions where taxable income in one territory is not mirrored by a taxable deduction in the other territory, and other non-tax deductible items such as client entertaining, fines and penalties, and costs of a capital nature.

 
                                                               2018       2017 
                                                            GBP'000    GBP'000 
--------------------------------------------------------  ---------  --------- 
 Tax credited to other comprehensive income 
 Deferred tax credits on actuarial and other movements 
  on post-employment benefits                                   (6)    (3,867) 
--------------------------------------------------------  ---------  --------- 
 Tax charged on items recognised in other comprehensive 
  income                                                        (6)    (3,867) 
--------------------------------------------------------  ---------  --------- 
 

10. Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

 
                                                       2018                                   2017 
                                                                                           re-presented 
                                      ------------------------------------- 
                                                                                    All   Continuing   Discontinued 
                                            All   Continuing   Discontinued     GBP'000      GBP'000        GBP'000 
 Earnings                               GBP'000      GBP'000        GBP'000    restated     restated       restated 
------------------------------------  ---------  -----------  -------------  ----------  -----------  ------------- 
 Loss for the period                   (13,730)      (7,060)        (6,670)    (31,019)     (29,658)        (1,361) 
 Add back: non-underlying items           2,156        2,156              -       1,070          672            398 
 Add back: non-underlying items 
  - impairment                                -            -              -      16,665       16,665              - 
 Adjustment for profit on disposals       5,287            -          5,287           -            -              - 
 Reduction in tax charge due 
  to add backs                                -            -              -       (192)        (192)              - 
------------------------------------  ---------  -----------  -------------  ----------  -----------  ------------- 
 Adjusted (loss)/profit for 
  the period                            (6,287)      (4,904)        (1,383)    (13,476)     (12,513)          (963) 
------------------------------------  ---------  -----------  -------------  ----------  -----------  ------------- 
 
 
 
                                                                         2018       2017 
                                                                       Number     Number 
 Number of shares                                                     million    million 
------------------------------------------------------------------  ---------  --------- 
 Weighted average number of ordinary shares for the purposes 
  of basic earnings per share, and basic excluding non-underlying 
  items and amortisation of acquired intangibles                          930        511 
 Effect of dilutive potential ordinary shares: 
 Restricted share plan                                                      0          0 
------------------------------------------------------------------  ---------  --------- 
 Weighted average number of ordinary shares for the purposes 
  of diluted earnings per share                                           930        511 
------------------------------------------------------------------  ---------  --------- 
 
 
                                                     2018                          2017 re-presented 
                                     -----------------------------------  ----------------------------------- 
                                         All   Continuing   Discontinued      All   Continuing   Discontinued 
 (Loss)/earnings per share             Pence        Pence          Pence    Pence        Pence          Pence 
-----------------------------------  -------  -----------  -------------  -------  -----------  ------------- 
 Basic (loss)/profit per share 
  for the year attributable 
  to the owners of the Company         (1.4)        (0.7)          (0.7)    (6.1)        (5.8)          (0.3) 
 Diluted (loss)/profit per 
  share for the year attributable 
  to the owners of the Company         (1.4)        (0.7)          (0.7)    (6.1)        (5.8)          (0.3) 
 Basic (loss)/profit per share 
  - excluding non-underlying 
  items and amortisation of 
  acquired intangibles                 (0.6)        (0.5)          (0.1)    (2.6)        (2.4)          (0.2) 
 Diluted (loss)/profit per 
  share - excluding non-underlying 
  items and amortisation of 
  acquired intangibles                 (0.6)        (0.5)          (0.1)    (2.6)        (2.4)          (0.2) 
-----------------------------------  -------  -----------  -------------  -------  -----------  ------------- 
 
 

The average share price for the year ended 31 December 2018 was 3.4p (2017: 7.2p).

The weighted average number of the Company's ordinary shares used in the calculation of diluted loss per share in 2018 includes rights over 364,890 ordinary shares (2017: 364,890).

11. Notes to the cash flow statement

 
                                                  Group                Company 
                                          --------------------  -------------------- 
                                               2018       2017       2018       2017 
                                            GBP'000    GBP'000    GBP'000    GBP'000 
----------------------------------------  ---------  ---------  ---------  --------- 
 Operating loss from continuing 
  operations                                (6,367)   (25,788)   (11,364)   (13,228) 
 Operating loss from discontinued 
  operations                                  (612)      (251)          -          - 
----------------------------------------  ---------  ---------  ---------  --------- 
 Operating loss                             (6,979)   (26,039)   (11,364)   (13,228) 
 Adjustments for: 
 Depreciation of property, plant 
  and equipment                                 126        273         30        105 
 Amortisation of intangible assets              114        223          -          6 
 Loss on disposal of fixed assets               117          -         55          - 
 Adjustment for the cost of share 
  awards                                         78       (87)         78       (87) 
 (Increase)/decrease in provisions          (1,078)    (2,598)        311      2,561 
 Goodwill impairment                              -     16,665          -          - 
 Non-cash Intercompany debt forgiveness           -          -      8,048   (83,568) 
 Non-cash dividend                                -          -          -   (14,669) 
 Impairment of investments                        -          -          -    110,020 
 Other non-cash items                            58      1,045         74      1,148 
----------------------------------------  ---------  ---------  ---------  --------- 
 Operating cash flows before movements 
  in working capital                        (7,564)   (10,518)    (2,768)      2,288 
 (Increase)/decrease in receivables         (2,141)      3,160         28        903 
 Decrease in payables                       (1,838)    (6,739)      (395)    (1,832) 
----------------------------------------  ---------  ---------  ---------  --------- 
 Cash used in by operations                (11,543)   (14,097)    (3,135)      1,359 
 Income taxes paid                            (287)      (840)          -          - 
 Interest paid                                 (37)       (77)          -          - 
----------------------------------------  ---------  ---------  ---------  --------- 
 Net cash outflow from operating 
  activities                               (11,867)   (15,014)    (3,135)      1,359 
----------------------------------------  ---------  ---------  ---------  --------- 
 
 

The Group had no financing liabilities arising from cash flow activities in the year ended 31 December 2018.

Included within the 2018 Group cash balance of GBP17.3m and Company cash balance of GBP13.1 is GBP4.2m (2017: GBP8.5m) of cash which is not available for use by the Group. This represents cash held in restricted bank accounts which is required to be retained to support indemnity obligations to Wavestone, the acquirer of the French and related operations of Kurt Salmon and in support of the Kurt Salmon UK pension scheme, which became the PLC Company's obligation following the sale of the Kurt Salmon retail and consumer goods operations.

12. Discontinued operations and disposals

Discontinued operations comprise Brazilian operations and for 2017 discontinued operations also comprised residual transitional service agreements and obligations including contingent liabilities of the business that were sold in 2016. Costs relating to prior year disposals incurred during 2018 have not been reclassed to discontinued and are recognised in non-underlying expenses within the Group income statement for continuing operations.

The sale of the Brazilian entity was completed on 23 May 2018 for cash consideration of $80,000. The results of its operations and the loss on disposal are reported as discontinued operations. The comparatives for 2017 have been restated on the same basis in relation to discontinued operations. The disposed entity was presented in the geographical region of the Americas.

The loss after tax for Brazil for the year up to disposal date was GBP1.4m (2017 GBP1.1m). The loss on disposal before the effect of foreign exchange was GBP0.3m. The loss on disposal includes GBP4.9m of cumulative historic foreign exchange losses which crystallise on disposal and are therefore transferred from the translation reserve. The results of the discontinued operations, which have been included in the consolidated income statement within the loss from discontinued operations line, were as follows:

 
                                              2018                                          2017 
                          --------------------------------------------  -------------------------------------------- 
                                                       Kurt                                          Kurt 
                                           Kurt      Salmon                              Kurt      Salmon 
                                         Salmon    Consumer                            Salmon    Consumer 
                              Brazil     France       Group      Total      Brazil     France       Group      Total 
                             GBP'000    GBP'000     GBP'000    GBP'000     GBP'000    GBP'000     GBP'000    GBP'000 
------------------------  ----------  ---------  ----------  ---------  ----------  ---------  ----------  --------- 
 Revenue                         446          -           -        446       2,389          -           -      2,389 
 Cost of sales                 (334)          -           -      (334)     (1,524)          -           -    (1,524) 
------------------------  ----------  ---------  ----------  ---------  ----------  ---------  ----------  --------- 
 Gross profit                    112          -           -        112         865          -           -        865 
 Administrative expenses 
  - underlying                 (724)          -           -      (724)     (1,693)          -           -    (1,693) 
------------------------  ----------  ---------  ----------  ---------  ----------  ---------  ----------  --------- 
 Loss from operations 
  - adjusted                   (612)          -           -      (612)       (828)          -           -      (828) 
 Administrative expenses 
  - non-underlying 
  other                            -          -           -          -       (147)    (1,396)     (1,143)    (2,686) 
 Administrative expenses 
  - non underlying 
  credit                           -          -           -          -           -          -       2,288      2,288 
 Total administrative 
  expenses                     (724)          -           -      (724)     (1,840)    (1,396)       1,145    (2,091) 
------------------------  ----------  ---------  ----------  ---------  ----------  ---------  ----------  --------- 
 (Loss)/profit from 
  operations                   (612)          -           -      (612)       (975)    (1,396)       1,145    (1,226) 
 Net finance cost                  -          -           -                      -          -           -          - 
------------------------  ----------  ---------  ----------  ---------  ----------  ---------  ----------  --------- 
 (Loss)/Profit) before 
  tax                          (612)          -           -      (612)       (975)    (1,396)       1,145    (1,226) 
 Attributable tax 
  expense                      (771)          -           -      (771)       (135)          -           -      (135) 
------------------------  ----------  ---------  ----------  ---------  ----------  ---------  ----------  --------- 
 (Loss)/profit after 
  tax                        (1,383)          -           -    (1,383)     (1,110)    (1,396)       1,145    (1,361) 
 Loss on disposal 
  of discontinued 
  operations                 (5,287)          -           -    (5,287)           -          -           -          - 
------------------------  ----------  ---------  ----------  ---------  ----------  ---------  ----------  --------- 
 Net (loss)/profit 
  attributable to 
  discontinued 
  operations                 (6,670)          -           -    (6,670)     (1,110)    (1,396)       1,145    (1,361) 
------------------------  ----------  ---------  ----------  ---------  ----------  ---------  ----------  --------- 
 
 

In 2017, the French and related operations of Kurt Salmon non-underlying expenses relate to a provision for future employee related litigation claims arising post sale of this business to Wavestone. The Kurt Salmon Consumer Group net non-underlying credit relates to a release of surplus TSA onerous space and contract provisions following the sublet of the legacy San Francisco office (GBP2.3m) and charges relating to provision for tax claims arising from the sale of the business to Accenture of net GBP0.3m and GBP0.8m of provision relating to the continued administration of the legacy Kurt Salmon UK defined benefit pension scheme.

Disposal of Subsidiary

The net assets of Proudfoot Brazil at the date of disposal were as follows:

 
                                      2018 
                                   GBP'000 
-----------------------------     -------- 
Property plant and equipment             7 
Trade and other receivables             76 
Cash                                   573 
--------------------------------  -------- 
Total assets disposed                  656 
--------------------------------  -------- 
Trade and other payables             (889) 
Current tax liabilities              (146) 
--------------------------------  -------- 
Total liabilities disposed         (1,035) 
--------------------------------  -------- 
Net liabilities disposed             (379) 
Disposal expenses - net                735 
FX on disposal                       4,931 
--------------------------------  -------- 
Loss on disposal                     5,287 
--------------------------------  -------- 
 

INDEPENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF MANAGEMENT CONSULTING GROUP PLC ON THE PRELIMINARY ANNOUNCEMENT OF MANAGEMENT CONSULTING GROUP PLC

As the independent auditor of Management Consulting Group Plc, we are required by UK Listing Rule LR 9.7A.1(2)R to agree to the publication of Management Consulting Group Plc's preliminary announcement statement of annual results for the period ended 31 December 2018.

The preliminary statement of annual results for the period ended 31 December 2018 includes summary financial statements, related disclosures required by the Listing Rules, Chairman's Statement, and financial and operational overview. We are not required to agree to the publication of the trading statement and overview from management.

The directors of Management Consulting Group Plc are responsible for the preparation, presentation and publication of the preliminary statement of annual results in accordance with the UK Listing Rules.

We are responsible for agreeing to the publication of the preliminary statement of annual results, having regard to the Financial Reporting Council's Bulletin "The Auditor's Association with Preliminary Announcements made in accordance with UK Listing Rules".

Status of our audit of the financial statements

Our audit of the annual financial statements of Management Consulting Group Plc is complete and we signed our auditor's report on 14 March 2019. Our auditor's report is not modified and contains no emphasis of matter paragraph.

Our audit report on the full financial statements sets out the following key audit matters which had the greatest effect on our overall audit strategy; the allocation of resources in our audit; and directing the efforts of the engagement team, together with how our audit responded to those key audit matters and the key observations arising from our work:

Going Concern

Key Audit Matter Description

Management is required to assess the ability of the Group to continue as a going concern for the foreseeable future. Management is also required to provide information to stakeholders about the economic and financial viability of the Group and to help demonstrate the directors' stewardship and governance of the company in that respect. At the time that the 2017 Financial Statements were issued, management's forecasts for the business contained a number of assumptions upon which there were material uncertainties which cast significant doubt about the entity's ability to continue as a going concern.

At 31 December 2018, the Group had shown improved results with an increase in activity and revenue at the end of 2018 and evidence of continued growth in the early part of 2019. During the course of 2018 the Group also raised GBP8.6 million (net of issue costs) from the issue of new shares in July 2018. At 31 December 2018 the Group had GBP17.3m of cash, including GBP4.2m of restricted cash. Net cash outflows from operating activities in 2018 was GBP12.0m.

Under management's 'base case' forecast, refer to Note 2 in the annual report (Note 3 in the Preliminary Announcement), and under management's sensitised forecast, revenue was forecast to grow. Under both scenarios, the Group has sufficient headroom up to December 2020.

How the scope of our audit responded to the key audit matter

We have reviewed and challenged the key assumptions made by management in the cash flow forecasts, particularly in respect of revenue growth, which we considered to be optimistic and necessitating further downward sensitivity.

The procedures performed included:

-- Challenging the Board's approved forecasts and obtained sensitised versions of that forecast which include a number of reasonably possible down-side scenarios. Those down-side scenarios do not cover every conceivable eventuality and assume a level of stabilisation of the business compared with historic performance;

-- Review of the documentation in connection with the release of the escrow funds and the letter of intent in connection with the fund raising;

-- Assessing the design and implementation of controls around management's forecasting processes;

-- Considering the arithmetic accuracy of and key principles underlying the forecasts presented to the Board;

-- Considering and evaluating the key assumptions within management's forecasts, with particular focus on assessment of forecasts against historical forecasting accuracy as well as the potential impact of the uncertainty created by Brexit on the forecasted revenue.

While we noted the evidence of improved performances in Quarter 4 2018 and Quarter 1, to date, 2019, we also considered that the reversal in revenue decline was only recent and therefore may not necessarily be indicative of a longer term trend. The longer term average revenue decline over the previous four years (excluding disposed operation) averaged 13.5%. Given this historical trend we performed additional sensitivities, modelling scenarios in which:

   --      revenue remains flat in 2019 and 2020; and 
   --      revenue continues to decline at the long term average of 13.5% per annum. 

In both cases, we considered reasonable mitigating actions management could undertake, including:

   --      reduction in sales related headcount; and 
   --      reduction in discretionary marketing spend, bonuses and other costs. 

Key Observations

Under both the additional sensitivity scenarios, the Group's forecast unrestricted cash remains positive throughout the period.

We are therefore satisfied that directors' use of the going concern assumption is appropriate.

Revenue recognition and the adoption of IFRS 15

Key audit matter description

We consider the risk specifically relates to the cut-off and valuation of revenue manifesting as the valuation of contract assets (previously accrued income) and contract liabilities (previously deferred income) on ongoing projects at year end. Please refer to the Audit and Risk committee's assessment on this matter in the annual report and Note 2 of the Annual Report for the accounting policies relating to revenue recognition. Due to the high level of judgement involved, we consider this to be the presumed fraud risk relating to revenue as required by International Standards on Auditing.

Revenue recognised relating to ongoing projects as at 31 December 2018 amounted to GBP3.4 million (2017: GBP8.3 million) out of the total contract value of those ongoing projects of GBP4.9 million (2017: GBP12.3 million). Contract assets at 31 December are GBP0.4 million (2017: GBP0.0 million) and contract liabilities are GBP0.2 million (2017: GBP0.8 million), whilst total revenue for the year amounted to GBP28.3 million (GBP32.7 million). Recognition of revenue based on stage of completion of ongoing projects requires management judgement and is susceptible to error or manipulation.

We also note the introduction of IFRS 15 for 2018, which in management's view does not have a material impact on the Group. This was identified as an area of audit focus as opposed to a significant risk.

How the scope of our audit responded to the key audit matter

We performed procedures to evaluate the design and implementation of the internal controls operating over the revenue business cycles. We noted that there were limited segregation of duties in the finance over postings to revenue. We therefore did not take a controls reliance approach and performed a fully substantive audit over revenue.

We performed specific substantive procedures on a sample of open and closed contracts at year-end to evaluate whether that revenue had been correctly recognised according to the stage of completion, and that the calculated stage of completion was accurate.

We have also reviewed management's conclusions on IFRS 15, including the consideration of the 'Five step model' in respect of contracts under the group's normal terms of business together with identified 'non-standard' contracts, and assess whether with management's conclusion that this does not have a material impact on the Group.

Key observations

We conclude that the cut off and valuation of revenue recognised in the current year is appropriate and not materially misstated. We also concur with management that IFRS 15 does not have a material impact on the recognition of revenue.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we did not provide a separate opinion on these matters.

Procedures performed to agree to the preliminary announcement of annual results

In order to agree to the publication of the preliminary announcement of annual results of Management Consulting Group Plc we carried out the following procedures:

(a) checked that the figures in the preliminary announcement covering the full year have been accurately extracted from the audited or draft financial statements and reflect the presentation to be adopted in the audited financial statements;

(b) considered whether the information (including the management commentary) is consistent with other expected contents of the annual report;

(c) considered whether the financial information in the preliminary announcement is misstated;

(d) considered whether the preliminary announcement includes a statement by directors as required by section 435 of CA 2006 and whether the preliminary announcement includes the minimum information required by UKLA Listing Rule 9.7A.1;

(e) where the preliminary announcement includes alternative performance measures ("APMs"), considered whether appropriate prominence is given to statutory financial information and whether:

   --      the use, relevance and reliability of APMs has been explained; 

-- the APMs used have been clearly defined, and have been given meaningful labels reflecting their content and basis of calculation;

-- the APMs have been reconciled to the most directly reconcilable line item, subtotal or total presented in the financial statements of the corresponding period; and

-- comparatives have been included, and where the basis of calculation has changed over time this is explained.

(f) read the management commentary, any other narrative disclosures and any final interim period figures and considered whether they are fair, balanced and understandable.

Use of our report

Our liability for this report, and for our full audit report on the financial statements is to the company's members as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for our audit report or this report, or for the opinions we have formed.

Peter Saunders (Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

14 March 2019

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

FR GGUQWWUPBPWC

(END) Dow Jones Newswires

March 15, 2019 03:01 ET (07:01 GMT)

1 Year Management Consulting Chart

1 Year Management Consulting Chart

1 Month Management Consulting Chart

1 Month Management Consulting Chart
Your Recent History
NEX
MMC.GB
Management..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20191215 13:26:22