Buy
Sell
Share Name Share Symbol Market Type Share ISIN Share Description
Dods Group Plc LSE:DODS London Ordinary Share GB0031129579 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.20 -5.88% 3.20 3.00 3.40 3.40 3.20 3.40 19,450 13:16:34
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 27.8 -1.3 -0.2 - 19

Dods Group PLC Final Results

03/09/2020 7:02am

UK Regulatory (RNS & others)


Dods (LSE:DODS)
Historical Stock Chart


From Aug 2020 to Oct 2020

Click Here for more Dods Charts.

TIDMDODS

RNS Number : 8823X

Dods Group PLC

03 September 2020

3 September 2020

Dods Group plc

("Dods", the "Company" or the "Group")

AUDITED RESULTS FOR THE YEARED 31 MARCH 2020

Dods Group plc (AIM: DODS), a leading technology company specialising in business intelligence, media and technology resourcing, announces its audited results for the year ended 31 March 2020. The Group continues to enhance the business with a strengthened new Board and senior management team.

Highlights

-- Revenue from continuing operations increased by 30% to GBP27.8 million (2019: GBP21.3 million), including impact from Merit acquisition

   --      Gross profit increased by c. 13% to GBP8.9 million (2019: GBP7.9 million) 
   --      Adjusted EBITDA improvement from GBP1.5 million in 2019 to GBP2.8 million in 2020 
   --      Adjusted Operating Profit increased from GBP0.6 million (2019) to GBP0.9 million in 2020 
   --      Loss before tax for the year reduced from GBP5.7 million (2019) to GBP1.3 million 
   --      Adjusted EPS from continuing operations of 0.12 pence (2019: 0.12 pence loss) 

-- Cash balance at year end of GBP4.4 million and agreed revised banking arrangements to ensure Dods can manage its way through the impacts of COVID-19

   --      Successful acquisition and integration of Merit and subsequent restructure of core business 

-- Appointment post period end of Con Conlon and Munira Ibrahim as Managing Directors of Dods Technology and Dods Intelligence respectively

-- The Board is not issuing guidance due to ongoing uncertainty caused by COVID-19, although remains optimistic that the Group's strategy is capable of sustainable profit streams in the medium to longer term

Operational and Trading Update

The year to 31 March 2020 saw significant improvement in our performance, with total losses for the year reducing from GBP5.5 million in 2019 to GBP1.2 million in 2020 and Adjusted EBITDA improving from GBP1.5 million (2019) to GBP2.8 million.

Across the organisation we have had a completely new management team in place from Q1 this year, which brings extensive expertise in technology, sales, media and financial management. Commercially focused and "hands on" in all areas of operations, the team is also developing a clear strategic plan that aims to take the business to a position which is more technology orientated and is characterised by best-in-class products, increased recurring revenue and stronger margins.

Key operational updates in the year include:

- The integration of Merit into Dods has been completed smoothly and with all the cost synergies envisaged now delivered.

- The Merit team is now helping to drive the development of a new set of products across Dods in the political and regulatory domain.

- The original core business, Dods Intelligence, is being restructured to deliver revenue which is more likely to be of a recurring nature and deliver higher margins.

- Our political monitoring service is now seeing renewal rates of 95% and an increasing number of clients.

   -        We are successfully pivoting many of our live events to a virtual format. 

- Merit revenue grew by over 15% in the year including double digit growth in technical resourcing services. 90% of Merit revenue was recurring.

   -       We continue to develop new tools and capabilities in all fields of data collection and data transformation using machine learning and AI tool sets. We are also negotiating several new channel partner deals across Europe to help distribute content and generate additional revenue. 

COVID-19 will of course have an adverse impact on both revenue and profits in the year to 2021. Our events business will be particularly hard hit, but our strong recurring revenues in Political Business Intelligence and in Merit are proving to be very resilient. The new management team have been aggressively reducing our cost base to make the business much leaner, whilst we make modest, but important investments in marketing, product development and technology research. We are confident that these actions will drive strong growth and enhanced margins in subsequent years.

Going Concern

The Directors have considered the implications for Going Concern for a period of at least twelve months from the signing of these accounts. The Board remains satisfied with the Company's funding and liquidity position as discussed further in note 1 of the group financial statements.

The Board remains mindful regarding the uncertainties inherent in the current economic conditions. The company's forecasts and projections, taking into account reasonable changes in trading performance given these uncertainties, show the Company operating within its current cash flow with headroom going forward.

On the basis of these forecasts, and given the level of cash available, the Board has concluded that the going concern basis of preparation continues to be appropriate.

For further information, please contact:

 
 Dods Group plc 
  Mark Smith - Interim Non-Executive 
  Chairman 
  www.dodsgroup.com                      020 7593 5500 
 Canaccord Genuity (Nomad and Broker) 
  Bobbie Hilliam 
  Georgina McCooke                       020 7523 8000 
 

About Dods Group

Dods is a leading technology company specialising in business intelligence, media and technology resourcing. With extensive capability in machine learning and AI, we manage and transform large volumes of data and information across multiple industries, for some of the UK's leading business intelligence providers. In the political and regulatory domains, we have built a reputation for high quality, unbiased content across all of our products and services in Westminster, Edinburgh, Paris and Brussels.

Strategic report

For the year ended 31 March 2020

Chairman's statement

It is with great sadness that I report the passing of our former Chairman, David Hammond, on the 18 June 2020. David was appointed as Non-Executive Chairman on 1 August 2018 and then Executive Chairman on 22 January 2020. David was always extremely encouraging to other Board members, senior management and staff alike, with a great eye for detail and sharp intellect. His contribution to the Group has been significant, and he will be greatly missed. It was under these regrettable circumstances that I was appointed Interim Non-Executive Chairman of the Company.

2020 Financial Year

With the inclusion of approximately 8.5 months' of Merit results, the Group's revenue from continuing operations increased by 30% to GBP27.8 million (2019: GBP21.3 million) and gross profit increased by 13% to GBP8.9 million (2019: GBP7.9 million).

The 2019 Chairman's statement outlined an ongoing strategic review of the business and a focus on a strategy that seeks to deliver growth by increasing average client spend, pivoting away from policy dependent products, raising operating margins through increased commercialisation of the Group's proprietary data and enhancing its existing portfolio. The Group continues to progress this strategy and continues to seek to simplify and strengthen its core business to deliver sustainable shareholder value in the long term.

During the year, the Group strengthened its leadership team, including the appointment of a Chief Information Officer, Chief Revenue Officer and a new Chief Financial Officer.

As outlined in the trading update issued on 22 January 2020, the uncertain political and economic environment during the 2020 financial year, which included a December General Election, adversely impacted the Group's publishing, events and training businesses. Further to this, the COVID-19 virus had a detrimental impact on the last month of Group results, particularly on the Group's events and training businesses.

Significant Acquisition

On 18 July 2019, Dods successfully completed its acquisition of Meritgroup Limited ("Merit"). The Board believes that this acquisition will be a transformational deal for the Group and will enable it to diversify its service offering into faster growing, higher margin activities.

The addition of Merit brings a deep technical knowledge and expertise in the field of data engineering, machine learning and artificial intelligence to the Group, which when combined with Dods' considerable expertise in analysis and content creation, it will make the enlarged Group a leading business intelligence organisation.

Merit brings a highly educated, agile and diverse team with impressive technical capabilities based in Chennai, Mumbai and London which will enrich the existing operations of the Group in London, Edinburgh, Brussels and Paris. The addition of Merit will enable customers to rapidly test and adapt new technologies to transform their services. With an emphasis on remaining at the forefront of innovation in new technologies, Merit will leverage the significant resident domain knowledge across the Group to drive actionable business outcomes for its customers.

The integration of Merit was successfully completed during the 2020 financial year.

Board Changes

Following the appointment of new senior management to the Group and the successful integration of Merit, Simon Presswell stepped down as Director and Group Chief Executive Officer on 22 January 2020.

On 24 February 2020, the Group's Chief Financial Officer, Nitil Patel, stepped down as Director of the Company. Subsequent to this, on 30 March 2020 Simon Bullock was appointed as Nitil Patel's replacement as Chief Financial Officer. Simon Bullock was appointed to the Dods Group plc Board on 1 June 2020.

On 1 June 2020, it was also announced that:

- Cornelius Conlon, the Group's Chief Technology Officer, would take up the position of Managing Director, Dods Technology

- Munira Ibrahim, the Group's Chief Revenue Officer, would take up the position of Managing Director, Dods Intelligence.

Both Cornelius Conlon and Munira Ibrahim were also appointed to the Dods Group plc Board on 1 July 2020.

Outlook

The Group has made great progress in the year to 31 March 2020 in terms of its expanded revenues and reduced losses. We have successfully integrated an enormous amount of technology talent at Merit and the new management team put in place earlier this year are running the business successfully and implementing a strategy that will ensure the Group has sustainable revenue streams in the medium to long term.

Dods has leading experience, knowledge and understanding developed over the decades in the political, regulatory and civil service landscape of the UK and Europe. Merit is one of the UK's leading providers of data collection, curation and data transformation services for the business information industry.

We believe that this combination will make Dods an invaluable partner for global organisations who operate and trade under both UK and EU regulatory environments driving revenue growth and profits in the coming years.

The emergence of COVID-19 has lent uncertainty to our core markets and the Board at this stage cannot predict the medium to long-term effects of pandemic, and therefore does not expect to be able to issue any forward looking statements or guidance for the foreseeable future.

Our bank has been very supportive and agreement has been reached with them that provides us with the cash resources we need in the medium term.

I should acknowledge the dedication and commitment of our employees who have been fantastic in these difficult times, and with their continued help we will emerge stronger in the future. Finally, I would like to thank our shareholders and customers for their loyalty and continued support.

Mark Smith

Interim Non-Executive Chairman

CFO Review

Despite 2020 being a challenging year reflecting both the uncertain political and economic environment as well as the impact of COVID-19 in Q4, the successful acquisition of Merit in July 2019 resulted in an increase in Group revenue. In line with Board expectations, the Group was impacted by a decrease in Dods Intelligence business revenue, reflecting the conditions outlined above. However, as mentioned previously the Group is prioritising a strategy that seeks to deliver growth by increasing average client spend, pivoting away from policy dependent products, raising operating margins through increased commercialisation of the Group's proprietary data and enhancing its existing portfolio. As we continue to advise, inform and connect businesses in the political and policy environment, we will be looking to upgrade our digital offering in our Business Intelligence products. The Group continues to reduce its reliance on print and advertising as it replaces these revenue sources with more reliable, recurring revenue streams, including increasing our subscription-based revenues and multi-year contracts.

On 18 July 2019, Dods successfully completed its acquisition of Merit. The acquisition was paid for through a mixture of cash and new ordinary shares in the Company. A capital fundraise of GBP13 million and a new GBP5 million debt facility were entered into to fund the cash component of the acquisition.

Adjusted results are prepared to provide a more comparable indication of the Group's core business performance by removing the impact of certain items including exceptional items (material and non-recurring), and volatile items predominantly relating to investment activities and other separately reported items.

In addition, the Group also measures and presents performance in relation to various other non-GAAP measures including adjusted operating profit and adjusted EBITDA. Adjusted results are not intended to replace statutory results. These have been presented to provide users with additional information and analysis of the Group's performance, consistent with how the Board monitors results.

Adjusted operating profit

 
                                                         2020       2019 
                                                      GBP'000    GBP'000 
--------------------------------------------------  ---------  --------- 
 Operating loss before tax                              (862)    (5,776) 
 Impairment expense - investment in equity 
  accounted associate                                       -      1,231 
 Impairment expense - intangible assets                     -        259 
 Increased amortisation of software intangible 
  assets                                                    -      1,230 
 Amortisation of intangible assets acquired 
  through business combinations                           711        351 
 Non-recurring acquisition costs and professional 
  fees                                                    171      2,239 
 Other non-recurring items                                865      1,029 
 
 Adjusted Operating Profit                                885        563 
                                                    ---------  --------- 
 

Revenue and operating results

With the inclusion of approximately 8.5 months' of Merit results, the Group's revenue from continuing operations increased by 30% to GBP27.8 million (2019: GBP21.3 million) and gross profit increased by 13% to GBP8.9 million (2019: GBP7.9 million).

Gross margin decreased from 37% to 32% in the year. The decrease in gross margin was largely due to a change in product mix following the addition of Merit during the year. The Group has adopted IFRS 16 Leases effective 1 April 2019 and as a result, operating lease charges previously included within administrative costs are now included as right-of-use depreciation and lease interest charges. The impact of this has been a decrease of approximately GBP1.6 million to administrative costs.

Adjusted EBITDA increased to GBP2.8 million (2019: GBP1.5 million), largely impacted by the IFRS 16 changes outlined above. Operating loss was GBP0.9 million (2019: loss of GBP5.8 million), after non-cash items including an amortisation charge of GBP0.7 million (2019: GBP0.4 million) for business combinations and a charge of GBP0.2 million (2019: GBP1.8 million) for intangible software assets. The depreciation charge in the year increased slightly to GBP0.5 million (2019: GBP0.4 million) and a right-of-use depreciation charge of GBP1.2m (2019: GBPnil) was booked in relation to IFRS 16. For the prior year, the increased amortisation charge for software intangibles reflects the strategic review carried out by the new Board on the useful economic life of the software platform developed in-house by the Group. Non-recurring acquisition related costs, impairment expense, people-related costs and other costs were GBP1.0 million (2019: GBP4.8 million). This decrease is principally a result of the fact that the prior year included GBP2.3m of acquisition costs as well as GBP1.5 million of impairment charges.

The statutory loss before tax for the year was GBP1.3 million (2019: loss before tax of GBP5.7 million).

Taxation

The Group has booked a tax credit of GBP0.1 million for the year (2019: credit of GBP0.2 million).

Earnings per share

Adjusted earnings per share, both basic and diluted, from continuing operations in the year were 0.12 pence (2019: loss of 0.12 pence) and were based on the adjusted profit for the year of GBP0.6 million (2019: loss of GBP0.4 million) with a basic weighted average number of shares in issue during the year of 492,696,964 (2019: 341,640,953 ).

Earnings per share, both basic and diluted, from continuing operations in the year were a loss of 0.24 pence (2019: loss of 1.62 pence) and were based on the net loss for the year of GBP1.2 million (2019: loss of GBP5.5 million).

Dividend

The Board is not proposing a dividend at this time (2019: GBPnil).

Assets

Non-current assets consisted of goodwill of GBP28.9 million (2019: GBP13.3 million), intangible assets of GBP11.2 million (2019: GBP6.4 million) and property, plant and equipment of GBP2.1 million (2019: GBP2.1 million). The increases to goodwill and intangible assets reflect the acquisition of Merit during the year. The Group, since February 2017, has held a 40% stake in the issued share capital of Sans Frontières Associates (SFA) and has loaned SFA GBP0.5 million (2019: GBP0.7 million) at the year end, the movement reflecting part-repayment during the year. The loan is unsecured and carries no interest charge. The carrying value of this investment increased to GBP0.2 million during the year (2019: GBPnil) reflecting the Group's share of profit for the year. Additionally, the Group has held a 30% stake in Social 360 since November 2017 which it carries at GBP0.5 million (2019: GBP0.5 million).

As mentioned previously, the Group has adopted IFRS 16 Leases effective 1 April 2019. As a result, operating leases have been recognised on balance sheet as right-of-use assets and lease liabilities. Under the modified retrospective approach the Group has not restated prior periods. The impact has been to increase non-current assets by GBP7.9 million (2019: GBPnil) at the balance sheet date.

Trade and other receivables increased by GBP4.2 million to GBP7.8 million (2019: GBP3.6 million) as a result of the Merit acquisition. Included in prepayments is an amount of GBP0.8 million due in cash to certain former shareholders of Merit. The corresponding amount is in current and non-current liabilities as other payables.

Liabilities

Current liabilities increased by GBP6.5 million to GBP18.0 million (2019: GBP11.5 million) as a result of the Merit acquisition (including deferred consideration), the current component of the lease liability arising on the adoption of IFRS 16 and the impact of the current component of the bank loan. The increase is partly offset by the decrease in accruals relating to acquisition costs (2019: GBP1.5 million).

The GBP0.9 million (2019: GBP0.5 million) deferred tax liability balance reflects a GBP0.7 million increase arising from the acquisition of Merit, offset by a credit booked in the deferred tax liability of GBP0.3 million (2019: GBP0.3 million). In FY20, non-current liabilities also reflect the non-current component of the lease liability and amounts recognised in relation to the acquisition which are payable in both shares and cash to certain Merit vendors.

Capital and Reserves

Total assets of the Group were GBP63.9 million (2019: GBP35.0 million) with the main movements being the additions to intangibles and other assets associated with the Merit acquisition. Total equity increased by GBP12.8 million to GBP35.8 million (2019: GBP23.0 million), largely reflecting issue of shares in July 2019, partly offset by the loss for the year.

Liquidity and capital resources

During the year, the Group borrowed a term loan of GBP3.0 million (2019: GBPnil) over a 5-year period carrying a rate of 3.25% over LIBOR. The full amount outstanding at year end. In addition, the Group also drew down on a revolving credit facility (RCF) during the year of GBP2.0 million. This RCF balance was repaid subsequently and at balance sheet date the outstanding amount was GBPnil (2019: GBPnil).

The Group has a cash and cash equivalents balance of GBP4.4 million (2019: GBP8.4 million) and a net cash position of GBP1.4 million (2019: GBP8.4 million).

Updated banking facilities and covenant waiver

During the year end audit process, the Group became aware of a change in a contractual obligation that existed as at 31 March 2020 that caused it to be in breach of one of its three banking covenants.

The Group has secured a waiver from the bank for this breach; however, because the waiver was not in place as at the balance sheet date the entire GBP3 million loan balance has been classified as current in these financial statements. The Group expects the GBP3 million loan balance to be classified as a long term liability in its interim result balance sheet on 30 September 2020.

In the 12 month period from the balance sheet date capital repayments of GBP0.4 million will be repaid to the bank with the remaining GBP2.6 million due in subsequent periods. The group continues to enjoy the support of Barclays Bank plc and agreement has been reached on new covenants to support the Group in 2021.

Principal risks and uncertainties

 
 Risks                        Mitigating Actions             Opportunity 
 Geo-political                Dods continues to focus        To be well positioned 
                               on growing a diverse range     with a balanced portfolio 
  Brexit negotiations,         of customers, in different     of customers and 
  global political tensions    markets, which helps to        markets. 
  and potential trade          mitigate this risk. 
  issues with the major 
  trading blocs could 
  cause uncertain economic 
  conditions 
                             =============================  =========================== 
 Technology changes           Constant focus on efficiency   As volume of information 
                               programmes in service          grows, and becomes 
  The markets in which         delivery platforms and         more readily available, 
  Dods operates are            increasing the quality         there is a greater 
  constantly changing          of our content.                need for users to 
  due to rapid technology                                     receive the type 
  advancements                                                of curated information 
                                                              provided by Dods. 
                             =============================  =========================== 
 Further migration            Dods continues to invest       Further capitalise 
  of print advertising         and develop in digital         on our diverse brand 
  to online                    expertise and platforms.       portfolio. 
 
  An industry wide change 
                             =============================  =========================== 
 People                       Increased our talent and       We are implementing 
                               leadership capacity with       key employee engagement 
  Succession planning          key hires.                     programmes. 
                             =============================  =========================== 
 
 
 Data storage/cyber               Effective data management          As part of implementing 
  attack                           detailing where all business       GDPR we are reviewing 
                                   data is stored and how,            data stores, security, 
  Loss, integrity and              together with ISO27001             processes and procedures 
  breach of data                   Information Security Management    and continue to monitor 
                                   System containing these            on an ongoing basis. 
                                   controls. Intrusion detection 
                                   monitoring software exists 
                                   on our network. 
 GDPR                             Delegated Limits of Authority,     Cleansing of data, 
                                   setting out requirements           new procedures and 
  Stricter rules on                for approval and execution         more effective marketing 
  how data is handled              of legally binding                 should benefit Dods 
                                   documents (limits set              in the long term. 
                                   by value and legal risk). 
                                 =================================  ========================== 
 COVID-19 and other               Remote working for employees; deferral of 
  pandemics                        statutory payments where allowable; accessing 
                                   the government furlough scheme; the agreement 
  Impact on face-to-face           of a covenant and loan repayment holiday 
  events and training              with the Group's bankers; a reduction in 
  business, as well                Board and senior management remuneration; 
  as more general macroeconomic    a roll out of online delivery capabilities 
  impacts.                         for our training and events businesses; and 
                                   various other strategic and operational actions. 
 
                                   It is not considered appropriate to comment 
                                   on opportunities arising. 
                                 ============================================================= 
 

Simon Bullock

Chief Financial Officer

Annual General Meeting

The Annual General Meeting of the Company will be held on 29 September 2020 at the office of Dods Group plc in London, at which the directors will present their annual report together with the audited financial statements of Dods Group plc (the "Company") and its subsidiaries (together, the "Group") for the 12 months ended 31 March 2020. The Notice of Meeting and Explanation of Special Business will be provided in the annual report and accounts.

Financial statements

Basis of Preparation

The financial information, which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated cash flow statement, consolidated statement of changes in equity and related notes, does not constitute full accounts within the meaning of s435 (1) and (2) of the Companies Act 2006. The auditors have reported on the Group's statutory accounts for the each of the years ended 31 March 2020 and 2019 which do not contain any statement under s498 of the Companies Act 2006 and are unqualified. The statutory accounts for the year ended 31 March 2019 have been delivered to the Registrar of Companies and the statutory accounts for the year ended 31 March 2020 will be filed with the registrar in due course.

Consolidated income statement

For the year ended 31 March 2020

 
                                                                          2020       2019 
                                                               Note    GBP'000    GBP'000 
----------------------------------------------------------  -------  ---------  --------- 
 
 Revenue                                                          3     27,796     21,301 
 Cost of sales                                                        (18,852)   (13,419) 
----------------------------------------------------------  -------  ---------  --------- 
 
   Gross profit                                                          8,944      7,882 
 
 Administrative expenses                                               (6,154)    (6,381) 
 Other operating income                                           4          -          - 
----------------------------------------------------------  -------  ---------  --------- 
 
   Adjusted EBITDA                                                       2,790      1,501 
 
 Depreciation of tangible fixed assets                           15      (537)      (379) 
 Depreciation of right-of-use assets                             25    (1,210)          - 
 Amortisation of intangible assets acquired 
  through business combinations                                  14      (711)      (351) 
 Amortisation of software intangible assets                      14      (158)    (1,789) 
 Non-recurring items                                              5 
         Non-recurring acquisition costs and professional 
          fees                                                           (171)    (2,239) 
         Impairment expense - investment in equity 
          accounted associate                                                -    (1,231) 
         Impairment expense - intangible assets                              -      (259) 
         People-related costs                                            (785)      (332) 
         Other non-recurring items                                        (80)      (697) 
 
   Operating loss                                                        (862)    (5,776) 
 
 Net finance costs                                             9,10      (555)          - 
 Share of profit of associate                                    17        158         50 
----------------------------------------------------------  -------  ---------  --------- 
 Loss before tax                                                  6    (1,259)    (5,726) 
 
 Income tax credit                                               11         76        197 
----------------------------------------------------------  -------  ---------  --------- 
 
   Loss for the year                                                   (1,183)    (5,529) 
----------------------------------------------------------  -------  ---------  --------- 
 

Loss per share (pence)

 
 
   Basic      12   (0.24p)   (1.62p) 
 
   Diluted    12   (0.24p)   (1.62p) 
-----------  ---  --------  -------- 
 

Consolidated statement of comprehensive income

For the year ended 31 March 2020

 
                                                       2020       2019 
                                                    GBP'000    GBP'000 
------------------------------------------------  ---------  --------- 
 
 Loss for the year                                  (1,183)    (5,529) 
 Items that may be subsequently reclassified 
  to Profit and loss 
 Exchange differences on translation of foreign 
  operations                                              6        (8) 
------------------------------------------------  ---------  --------- 
 Other comprehensive income / (loss) for the 
  year                                                    6        (8) 
------------------------------------------------  ---------  --------- 
 Total comprehensive loss for the year              (1,177)    (5,537) 
------------------------------------------------  ---------  --------- 
 

Consolidated statement of financial position

As at 31 March 2020

 
                                                         2020       2019 
                                              Note    GBP'000    GBP'000 
-----------------------------------------  -------  ---------  --------- 
 
 Non-current assets 
 Goodwill                                       13     28,911     13,282 
 Intangible assets                              14     11,238      6,421 
 Property, plant and equipment                  15      2,134      2,063 
 Right-of-use asset                             25      7,926          - 
 Investment in associates                       17        661        503 
 Long-term loan receivable                      17        560        700 
 Total non-current assets                              51,430     22,969 
 
 Current assets 
 Work in progress and inventories               18        273         16 
 Trade and other receivables                    20      7,819      3,584 
 Cash and cash equivalents                      20      4,368      7,160 
 Restricted cash held in deposit account        20          -      1,266 
 Total current assets                                  12,460     12,026 
 
 Total assets                                          63,890     34,995 
-----------------------------------------  -------  ---------  --------- 
 
 Capital and reserves 
 Issued capital                                 24     19,239     17,096 
 Share premium                                         20,082      8,142 
 Other reserves                                           409        409 
 Retained loss                                        (3,991)    (2,616) 
 Share option reserve                                      75         55 
 Translation reserve                                     (61)       (67) 
 Total equity                                          35,753     23,019 
 
 Current liabilities 
 Trade and other payables                       21     12,423     11,489 
 Deferred consideration                         16      1,046          - 
 Bank loan                                      22      3,000          - 
 Lease liability                                25      1,515          - 
 Total current liabilities                             17,984     11,489 
 
 Non-current liabilities 
 Deferred tax liability                         23        862        487 
 Deferred consideration                         16      1,045          - 
 Other payables                                 21        545          - 
 Lease liability                                25      7,701          - 
-----------------------------------------  -------  ---------  --------- 
 Total non-current liabilities                         10,153        487 
 
 Total equity and liabilities                          63,890     34,995 
-----------------------------------------  -------  ---------  --------- 
 

These financial statements were approved by the Board of Directors and were signed on its behalf by:

Simon Bullock

Chief Financial Officer

2 September 2020

Consolidated statement of changes in equity

For the year ended 31 March 2020

 
 
                                                                                                                 Total 
                                       Share                   Retained    Translation          Share    shareholders' 
                         Share       premium        Merger     earnings     reserve(3)         option            funds 
                       capital    reserve(1)    reserve(2)      GBP'000        GBP'000     reserve(4)          GBP'000 
                       GBP'000       GBP'000       GBP'000                                    GBP'000 
------------------  ----------  ------------  ------------  -----------  -------------  -------------  --------------- 
 
 At 1 April 2018        17,096         8,142           409        2,913           (59)             44           28,545 
 Total 
 comprehensive 
 income 
      Loss for the 
       year                  -             -             -      (5,529)              -              -          (5,529) 
 Other 
 comprehensive 
 income 
      Currency 
       translation 
       differences           -             -             -            -            (8)              -              (8) 
 Share-based 
  payment                    -             -             -            -              -             11               11 
------------------  ----------  ------------  ------------  -----------  -------------  -------------  --------------- 
 
   At 31 March 
   2019                 17,096         8,142           409      (2,616)           (67)             55           23,019 
 
   Effect of 
   adoption 
   of IFRS 16 
   Leases 
   (see note 25)             -             -             -        (192)              -              -            (192) 
------------------  ----------  ------------  ------------  -----------  -------------  -------------  --------------- 
 At 1 April 2019 
  (adjusted)            17,096         8,142           409      (2,808)           (67)             55           22,827 
 Total 
 comprehensive 
 income 
      Loss for the 
       year                  -             -             -      (1,183)              -              -          (1,183) 
 Other 
 comprehensive 
 loss 
      Currency 
       translation 
       differences           -             -             -            -              6              -                6 
 Share-based 
  payment                    -             -             -            -              -             20               20 
 Transactions with 
  owners 
      Issue of 
       ordinary 
       shares            2,143        11,940             -            -              -              -           14,083 
------------------  ----------  ------------  ------------  -----------  -------------  -------------  --------------- 
 At 31 March 2020       19,239        20,082           409      (3,991)           (61)             75           35,753 
------------------  ----------  ------------  ------------  -----------  -------------  -------------  --------------- 
 
 

1 The share premium reserve represents the amount paid to the Company by shareholders above the nominal value of shares issued.

2 The merger reserve represents accounting treatment in relation to historical business combinations.

3 The translation reserve comprises foreign currency translation differences arising from the translation of financial statements of the Group's foreign entities into sterling.

4 The share option reserve represents the cumulative expense recognised in relation to equity-settled share-based payments.

Consolidated statement of cash flows

For the year ended 31 March 2020

 
                                                                  2020       2019 
                                                       Note    GBP'000    GBP'000 
--------------------------------------------------  -------  ---------  --------- 
 
 Cash flows from operating activities 
 Loss for the year                                             (1,183)    (5,529) 
 Depreciation of property, plant and equipment           15        537        379 
 Depreciation of right-of-use assets                     25      1,210          - 
 Amortisation of intangible assets acquired 
  through business combinations                          14        711        351 
 Amortisation of other intangible assets                 14        158      1,789 
 Impairment charges                                       5          -      1,490 
 Share-based payments charge                             26         20         11 
 Share of profit of associate                            17      (158)       (50) 
 Lease interest expense                                  25        420          - 
 Net finance costs                                     9,10        135          - 
 Non-recurring acquisition costs and professional 
  fees                                                           2,010        400 
 Income tax credit                                       11       (76)      (197) 
 Operating cash flows before movement in 
  working capital                                                3,784    (1,356) 
 Change in inventories                                   18      (257)        (4) 
 Change in trade and other receivables                         (1,013)      (114) 
 Change in trade and other payables                              (282)      2,337 
 Cash generated by operations                                    2,232        863 
 Taxation paid                                                   (193)      (166) 
--------------------------------------------------  -------  ---------  --------- 
 Net cash from operating activities                              2,039        697 
--------------------------------------------------  -------  ---------  --------- 
 
 Cash flows from investing activities 
 Interest and similar income received                     9          5         12 
 Non-recurring acquisition costs and professional 
  fees                                                         (2,010)      (400) 
 Additions to property, plant and equipment              15      (187)      (115) 
 Additions to intangible assets                          14    (1,400)      (512) 
 Investment in subsidiaries (net of cash 
  acquired)                                              16   (17,055)          - 
 Net proceeds from bank loan                             22      3,000          - 
 Repayment of long-term loan by associate                17        140          - 
--------------------------------------------------  -------  ---------  --------- 
 Net cash used in investing activities                        (17,507)    (1,015) 
--------------------------------------------------  -------  ---------  --------- 
 
 Cash flows from financing activities 
 Proceeds from issue of share capital                           13,037          - 
 Interest and similar expenses paid                      10      (140)       (12) 
 Payment of lease liabilities                                  (1,487)          - 
--------------------------------------------------  -------  ---------  --------- 
 Net cash used in financing activities                          11,410       (12) 
--------------------------------------------------  -------  ---------  --------- 
 Net decrease in cash and cash equivalents                     (4,058)      (330) 
 Opening cash and cash equivalents                               8,426      8,757 
 Effect of exchange rate fluctuations on 
  cash held                                                          -        (1) 
--------------------------------------------------  -------  ---------  --------- 
 Closing cash at bank                                            4,368      8,426 
--------------------------------------------------  -------  ---------  --------- 
 Comprised of: 
 Cash and cash equivalents                                       4,368      7,160 
 Restricted cash held in deposit account                             -      1,266 
 Closing cash at bank                                    20      4,368      8,426 
--------------------------------------------------  -------  ---------  --------- 
 

Notes to the consolidated financial statements

For the year ended 31 March 2020

   1.    Statement of significant accounting policies and judgements 

Dods Group plc is a Company incorporated in England and Wales.

The consolidated financial statements of Dods Group plc have been prepared and approved by the directors in accordance with International Financial Reporting Standards as endorsed by the International Accounting Standards Board and as adopted by the EU ("adopted IFRS"). The Company has elected to prepare its parent company financial statements in accordance with FRS 102; these are presented after the notes to the consolidated financial statements.

The consolidated financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The parent company financial statements present information about the Company as a separate entity and not about its group.

The accounting policies set out below have, unless otherwise stated, or as outlined in the 'Standards adopted' section below, been applied consistently to all periods presented in these Group financial statements.

Judgements made by the directors in the application of these accounting policies that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 2.

Standards adopted

There are no IFRS or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 April 2019 that have had a material impact on the Group, with the exception of IFRS 16 Leases, which was adopted by the Group for the year.

IFRS 16 Leases (effective periods beginning on or after 1 January 2019); IFRS 16 replaces IAS 17 Leases and eliminates the classification of operating and finance leases. Under the standard a contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group has elected to apply the practical expedient not to reassess whether a contract is, or contains, a lease for all lease contracts in place prior to 1 April 2019. The Group has applied the definition of a lease and related guidance as stated in IFRS 16 to all lease contracts entered in to or modified after 1 April 2019.

Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease component based on their relative stand-alone prices. The Group has elected to account for leases of real estate as a single lease component.

Leases under the new standard are recognised in the Statement of financial position as right-of-use assets with a corresponding lease liability. The lease liability is initially measured at the present value of the remaining lease payments, discounted using the discount rate implicit to the lease. If this rate cannot be readily determined, the Group's incremental borrowing rate will be used. The lease liability is subsequently increased by the related interest expense and decreased by the lease payments made. The lease liability can be remeasured to reflect changes in the lease term or change in future lease payments. The lease liability includes the following payments, when applicable:

   --      Fixed lease payments; 
   --      Variable lease payments based on an index or rate; 
   --      Amounts to be paid under residual value guarantees; 

-- The exercise price of a purchase option, if the Group is reasonably certain to exercise the option; and

-- Payments of penalties for terminating the lease, if the Group is reasonably certain to exercise the option

Right-of-use assets are measured at the value of the associated lease liability plus any initial direct costs incurred, adjusted for any prepaid or accrued lease payments. The right-of-use asset is initially recognised at cost, and subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets comprise the following, when applicable:

   --      The amount of the initial measurement of the lease liability; 
   --      Any lease payments made at or before the commencement date; 
   --      Any initial direct costs; and 
   --      Restoration costs 

Leases which meet the criteria of "short-term" or "low-value assets" are exempt and continue to be recognised under IAS 17 Leases. The new standard does not substantially change how a lessor accounts for leases.

The Group has elected to apply the modified retrospective approach, with the cumulative effect of adopting the standard being recognised as an opening balance adjustment to retained earnings as at 1 April 2019. There have been no changes to prior year figures as a result of adoption. See note 25 for further information on the adoption of IFRS 16.

Basis of preparation

The financial statements have been prepared in accordance with applicable accounting standards, and under the historical cost accounting rules, except for goodwill which is stated at the lower of previous carrying value and fair value less costs to sell.

The following Group entities are exempt from audit by virtue of Section 479A of the Companies Act 2006. Dods Group plc has provided statutory guarantees to the following entities in accordance with Section 479C of the Companies Act 2006:

Fenman Limited

Total Politics Limited

Holyrood Communications Ltd

Going Concern

The Group had net current liabilities as at 31 March 2020 of GBP5.5 million (2019: net current assets of GBP0.5 million). The Directors have considered the implications for going concern below, for a period of at least twelve months from the signing of these accounts.

During the year end audit process, the Group became aware of a change in a contractual obligation that existed as at 31 March 2020 that meant that it was in breach of one of its three banking covenants.

The Group has secured a waiver from the bank for this breach; however, because the waiver was not in place as at the balance sheet date the entire GBP3 million loan balance has been classified as current in these financial statements. The Group expects the GBP3 million loan balance to be classified as long term liability in its interim result balance sheet on 30 September 2020.

In the 12 month period from the balance sheet date capital repayments of GBP0.4 million will be repaid to the bank with the remaining GBP2.6 million due in subsequent periods.

The Group continues to enjoy the support of Barclays Bank plc and agreement has been reached on new covenants to support the Group in 2021.

The Directors had approved the budget for the year ending 31 March 2021, under which they had assessed the future funding requirements of the Group and compared them with the level of available borrowing facilities and had assessed the impact of them on the Group's cash flow, facilities and headroom within its future banking covenants. Subsequent to this, the impact of COVID-19 became apparent and as a result, the Group prepared an updated 3 year forecast, which has been adjusted to take account of the current trading environment. The Directors consider the forecasts to be reasonable. Based on this work, and in light of the mitigating actions undertaken by the Group to respond to the impact of COVID-19, the Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Basis of consolidation

Subsidiaries are entities controlled by the Group. Control is achieved where the Group is exposed to, or has rights to, variable returns and has the ability to affect those returns. The results of subsidiaries acquired or sold are included in the consolidated financial statements from the date control commences to the date control ceases. Where necessary, adjustments are made to the results of the acquired subsidiaries to align their accounting policies with those of the Group. All intra-group transactions, balances, income and expenditure are eliminated on consolidation.

Business combinations

Business combinations are accounted for using the acquisition method at the acquisition date, which is the date on which control is transferred to the Group. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable.

The Group measures goodwill as the fair value of the consideration transferred (including the fair value of any previously-held equity interest in the acquiree) and the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as at the acquisition date. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

Revenue recognition - sale of goods

Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods provided in the normal course of business, net of discounts, VAT and other sales-related taxes, and provisions for returns and cancellations.

Revenue on books or magazines provided for clients is recognised when the performance obligation has been satisfied, at the point of delivery, and the amount of revenue can be measured reliably.

Revenue recognition - sale of services

Revenue in respect of subscription-based services, including online services and licensing, is recognised on a straight-line basis over the period of subscription or licence. The unrecognised element is carried within creditors as deferred revenue.

Revenue in respect of advertising services is recognised on publication, being the performance obligation. Where publications are printed and distributed in more than one volume, the fair value of the revenue attributable to each volume is recognised as it is distributed.

When long term training programmes are designed on a client's behalf, revenue relating to the conception, set-up and design of the programme is recognised when the first event occurs. Revenue in relation to the organisation and administration of the programme is recognised over the programme's life.

Revenue on all one-off events and conferences is recognised as they occur. Cash received in advance and directly attributable costs relating to future events are deferred. Losses anticipated at the balance sheet date are provided in full.

Leases

A contract contains a lease if the contract gives a right to control the use of an asset for a period of time in exchange for consideration. Leases which meet the criteria of "short-term," for which the lease term is less than 12 months, or "low-value assets" are exempt from IFRS 16. Lease payments associated with "short-term" and "low-value assets" are expensed on a straight-line basis over the life of the lease.

For all other leases, at the lease commencement date, a right-of-use asset and corresponding lease liability are recognised in the Statement of financial position. The lease liability is initially measured at the present value of the remaining lease payments, discounted using the Group's incremental borrowing rate. Right-of-use assets are measured at the value of the associated lease liability plus any initial direct costs incurred, adjusted for any prepaid or accrued lease payments. The right-of-use asset is initially recognised at cost, and subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. The lease liability is increased by the interest cost and decreased by the lease payments made.

Post-retirement benefits - defined contribution

The Group contributes to independent defined contribution pension schemes. The assets of the schemes are held separately from those of the Group in independently administered funds. The amount charged to the profit and loss account represents the contributions payable to the schemes in respect of the accounting period.

Share-based payment

The Group operates a number of equity-settled, share-based compensation plans. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense with a corresponding increase in equity. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, but excluding the impact of any non-market related vesting conditions. Non-market related vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the Group revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.

Deferred tax is recognised where it is probable that tax relief will be available on the difference between exercise price and market price at the balance sheet date.

Non-recurring items

Non-recurring items are items which in management's judgement need to be disclosed by virtue of their size, incidence or nature. Such items are included within the income statement line item to which they relate and are separately disclosed either in the notes to the consolidated financial statements or on the face of the consolidated income statement.

Non-recurring items are not in accordance with any specific IFRS definition and therefore may be different to other companies' definition of non-recurring items.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax is based on taxable profit for the year and any adjustment to tax payable in respect of previous years. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

The Group's assets and liabilities for current tax are calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax nor the accounting profit other than in a business combination.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of the deferred tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates enacted or that are expected to apply (substantively enacted) at the balance sheet dated when the liability is settled or the asset is realised. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Goodwill

Goodwill represents the difference between the cost of acquisition of a business and the fair value of identifiable assets, liabilities and contingent liabilities acquired. Identifiable intangibles are those which can be sold separately or which arise from legal rights regardless of whether those rights are separable. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is tested annually for impairment. Any impairment is recognised immediately in profit or loss.

Intangible assets

Intangible assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses, if any. Intangible assets are amortised on a straight-line basis over their useful lives in accordance with IAS 38 Intangible Assets. Assets are not revalued. The amortisation period and method are reviewed at each financial year end and are changed in accordance with IAS 8 Accounting Policies, "Changes in Accounting Estimates and Errors" if this is considered necessary. The estimated useful lives are as follows:

Publishing rights 20-75 years (one specific right is deemed to have a useful economic life of 75 years)

   Brand names                  15-20 years 
   Customer relationships   1-8 years 
   Customer list                    4-8 years 
   Order books                     1 year 
   Other assets                     1 year 

Software which is not integral to a related item of hardware is included in intangible assets and amortised over its estimated useful lives of between 3-6 years. The salaries of staff employed in the development of new software relating to the Group's information services products, and salaries of staff employed in building our digital platform architecture within the Group are capitalised into software.

Impairment

The carrying amounts of the Group's intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill the recoverable amount is estimated each year at each balance sheet date.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-generating unit). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation is provided to write off the cost less estimated residual value of property, plant and equipment by equal instalments over their estimated useful economic lives as follows:

    Leasehold improvements                Over the shorter of the life of the asset or lease period 

Equipment, fixtures and

fittings       3-7 years 

Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.

Inventories

Inventories are stated at the lower of cost and net realisable value.

Cash

Cash includes cash on hand and in banks.

Restricted cash deposits amount to GBPnil (2019: GBP1,266,000). For the comparative, this balance related to a rental deposit held in the Group's name which was subject to a guarantee in favour of the landlord of the London premises of the Group.

Provisions

A provision is recognised on the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Financial assets, financial liabilities and equity instruments

Financial assets and financial transactions are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in pounds sterling, which is the presentation currency of the Group.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.

Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated but remain at the exchange rate at the date of the transaction.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the income statement for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period ended on the balance sheet date. Exchange rate differences arising, if any, are recognised directly in equity in the Group's translation reserve. Such translation differences are recognised as income or as expense in the income statement in the period in which the operation is disposed of.

Derivative financial instruments

All of the Group's derivatives are measured at their fair value at the end of each period. Derivatives that mature within one year are classified as current.

Associated companies

Associated companies are entities over which the Group has significant influence, but not control, generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%. Investments in associated companies are accounted for in the consolidated financial statements using the equity method of accounting less impairment losses.

Investments in associated companies are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

In applying the equity method of accounting, the Group's share of its associated companies' post-acquisition profits or losses are recognised in profit or loss and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements and distributions received from the associated companies are adjusted against the carrying amount of the investment. When the Group's share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the associated company.

Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group's interest in the associated companies. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Gains and losses arising from partial disposals or dilutions in investments in associated companies are recognised in profit or loss. Investments in associated companies are derecognised when the Group loses significant influence. Any retained interest in the entity is remeasured at its fair value. The difference between the carrying amount of the retained investment at the date when significant influence is lost and its fair value is recognised in profit or loss.

Financial assets

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those expected to be realised later than 12 months after the balance sheet date which are presented as non-current assets. Loans and receivables are presented as trade and other receivables and cash and cash equivalents on the balance sheet. The Group assesses expected credit losses associated with its trade and other receivables on a forward-looking basis. For trade receivables, the Group recognises gross amounts, less an allowance for bad debt based on expected credit losses. The Group considers its trade and other receivables to have a low credit risk. Cash and cash equivalents have a negligible credit risk.

Impairment

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists.

   2.    Critical accounting estimates and judgements and adopted IFRS not yet effective 

The key assumptions concerning the future and other key sources of estimation and judgements at the balance sheet date that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

a) Capitalisation of internal costs and assessment of their future recoverability

Management has capitalised certain costs incurred in relation to the development of internally generated intangible assets. The main area where costs have been capitalised has been summarised below:

Development of software

The salaries of staff employed in the development of new software within the Group have been capitalised into software, within other intangible assets. These development costs are then amortised over the estimated useful life of the software, being 3-6 years.

Management estimate the extent to which internally generated intangibles will be recovered by assessing future earnings. This is based on past revenue performance and the likelihood of future releases. Future sales performance varies from such assessments and changes to provisions against specific publications may be necessary.

b) Intangible assets

When the Group makes an acquisition, management review the business and assets acquired to determine whether any intangible assets should be recognised separately from goodwill. If such an asset is identified, it is valued by discounting the probable future cash flows expected to be generated by the asset over the estimated life of the asset. Where there is uncertainty over the amount of economic benefit and the useful life, this is factored into the calculation. Judgements and estimations are also used by the Directors for the value in use calculation for impairment purposes of goodwill and other intangible assets. Details of goodwill and intangible assets are given in notes 13 and 14. Details of judgements and estimates in relation to impairment of goodwill are given in note 13.

c) Investments

The Group takes into account the power over its investee, its exposure and rights to variable returns from its involvement with the investee, and its ability to use the power over the investee to affect the amount of the investor's return to determine whether the investment is treated as an associate or a controlling interest. See note 17 for further details. Where a controlling interest exists, the investee is consolidated.

d) Recoverability of trade receivables

Trade receivables are reflected net of estimated provisions for doubtful accounts. This provision is based on the ageing of receivable balances and historical experience. Details of trade receivables are given in note 19.

e) Deferred tax

Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised. In particular, judgement is used when assessing the extent to which deferred tax assets should be recognised with consideration given to the timing and level of future taxable income. Details of deferred tax are given in note 23.

f) Classification of non-recurring costs and accrual of non-recurring acquisition costs

Expenses are recognised as non-recurring when they reflect one-off costs that are not part of the ongoing operations of the Group. In relation to non-recurring acquisition costs, as the proposed acquisition was substantially complete by the year end date, the Group has accrued all agreed acquisition costs.

g) Recoverability of long-term loan receivable

Management assess the recoverability of the long-term loan receivable after taking into consideration the expected manner of recovery and expected and agreed recovery period. On the basis of the review undertaken by management the long-term loan receivable is deemed to be recoverable based upon expected future cashflows.

h) Fair value of separately identifiable intangible assets in business combinations

The Group is required to calculate the fair value of identifiable assets and liabilities acquired in business combinations. In order to estimate the fair value of separately identifiable assets in business combinations certain assumptions must be made about the future. The fair values of assets and liabilities acquired in business combinations, including separately identifiable intangible assets, are disclosed in note 16.

i) Incremental borrowing rate

The Group uses an incremental borrowing rate to measure its lease liabilities under IFRS 16. This rate represents the Group's estimate of the rate it would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use lease asset in a similar economic environment. Observable inputs are adjusted for entity-specific estimates to arrive at the Group's incremental borrowing rate.

Adopted IFRS not yet applied

The Group has not yet adopted certain new standards, amendments and interpretations to existing standards which have been published but are only effective for the Group's accounting periods beginning on or after 1 April 2020 or later periods. The Group has considered the new standards, interpretations and amendments to published standards that are effective for the Group and concluded that they are either not relevant to the Group or that they would not have a significant impact on the Group's financial statements. The Group continues to monitor the potential impact of other new standards and interpretations which may be endorsed by the European Union and may require adoption by the Group in future accounting periods.

   3.    Segmental information 

The basis on which operating results are reviewed and resources allocated is examined from both a business and geographic perspective by the senior management team.

Business segments

The Group now considers that it has two operating business segments, Dods Intelligence and Dods Technology. Dods Intelligences' business segment concentrates on the provision of key information and insights into the political and public policy environments around the UK and the European Union. The Dods Technology segment focuses on the fields of data engineering, machine learning, and artificial intelligence.

The following table provides an analysis of the Group's segment revenue by business segment.

 
                                      2020       2019 
   Revenue by business segment     GBP'000    GBP'000 
-------------------------------  ---------  --------- 
 
 Dods Intelligence                  20,154     21,301 
 Dods Technology                     7,642          - 
                                    27,796     21,301 
-------------------------------  ---------  --------- 
 

No client accounted for more than 10 percent of total revenue.

Geographical segments

The following table provides an analysis of the Group's segment revenue by geographical market. Segment revenue is based on the geographical location of customers.

 
                                          2020       2019 
   Revenue by geographical segment     GBP'000    GBP'000 
-----------------------------------  ---------  --------- 
 
 UK                                     22,179     16,183 
 Rest of world                           5,617      5,118 
                                        27,796     21,301 
-----------------------------------  ---------  --------- 
 

Asset segment information has not been disclosed because this information is not reviewed by the senior management team for the purpose of allocating resources.

   4.   Other operating income 

There was no other operating income for the current year or prior period.

   5.   Non-recurring items 
 
                                                           2020       2019 
                                                        GBP'000    GBP'000 
----------------------------------------------------  ---------  --------- 
 
 Non-recurring acquisition costs and professional 
  fees                                                      171      2,239 
 Impairment expense - investment in equity 
  accounted associate                                         -      1,231 
 Impairment expense - intangible assets                       -        259 
 People-related costs                                       785        332 
 Other 
    - Branding and marketing                                  -        206 
    - Costs relating to ongoing strategic corporate 
     review and initiatives                                   -        244 
    - Professional services and consultancy                  45        211 
    - Other                                                  35         36 
                                                          1,036      4,758 
----------------------------------------------------  ---------  --------- 
 

Non-recurring acquisition costs and professional fees reflect the costs incurred to date in line with the Group's acquisition strategy. On 18 July 2019, the Group acquired 100 percent of the share capital of Meritgroup Limited and its subsidiaries. For the prior year, as the proposed acquisition was substantially complete by the year end date, the Group had accrued all agreed acquisition costs.

For the prior year, Impairment expense - investment in equity accounted associate relates to the Group's investment in Social 360 Limited - see note 17. Also for the prior year, Impairment expense - intangible assets relates to specific publishing rights - see note 14.

People-related costs result from the recruitment of senior management for roles which have been newly created within the Group. Also included are redundancy costs reflecting the effect of Group initiatives to appropriately restructure the business.

Other non-recurring costs include branding and marketing expenses, costs relating to ongoing strategic corporate review and initiatives, various legal fees and one-off consultancy expenses.

   6.   Loss before tax 

Loss before tax has been arrived at after charging:

 
                                                      2020       2019 
                                                   GBP'000    GBP'000 
-----------------------------------------------  ---------  --------- 
 
 Depreciation of property, plant and equipment         537        379 
 Amortisation of intangible assets acquired 
  through business combinations                        711        351 
 Amortisation of other intangible assets               158      1,789 
 Staff costs (see note 8)                           14,616      9,804 
 Non-recurring items (see note 5)                    1,036      4,758 
 Net finance costs                                     555          - 
 Operating lease charge(1)                               -        969 
-----------------------------------------------  ---------  --------- 
 
   1    IFRS 16 Leases was adopted on 1 April 2019. 
 
                                                          2020       2019 
   Auditor's remuneration                              GBP'000    GBP'000 
---------------------------------------------------  ---------  --------- 
 
 Fees payable to the Company's auditor for 
  the audit of the Company's annual 
  accounts                                                  20         17 
 Fees payable to the Company's auditor and 
  its associates for other services: 
    - The audit of the Company's subsidiaries, 
     pursuant to legislation                                78         60 
    - Non-audit services in relation to IT program          18          - 
     assurance 
    - Non-audit services in relation to corporate 
     finance transactions                                    -        293 
---------------------------------------------------  ---------  --------- 
                                                           116        370 
---------------------------------------------------  ---------  --------- 
 
   7.   Directors' remuneration 

The remuneration of the directors of the Company for the years ended 31 March 2020 and 31 March 2019 is set out below:

 
                                                 Committee          Pension       Other 
                                      Salaries        Fees    contributions    benefits     Total 
                                           GBP         GBP              GBP         GBP       GBP 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 
   Executive directors 
 Dr David Hammond(1)         2020       86,525       5,000                -           -    91,525 
  Interim Executive 
   Chairman(1)               2019       33,334       3,335                -           -    36,669 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 Simon Presswell(2)          2020      265,000           -           30,000       1,963   296,963 
  Former Chief Executive 
   Officer                   2019      193,994           -           21,962       1,953   217,909 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 Nitil Patel(3)              2020      180,000           -           20,000         785   200,785 
  Former Chief Financial 
   Officer                   2019      180,000           -           20,000       1,083   201,083 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 Guy Cleaver(4)              2020            -           -                -           -         - 
  Former Chief Executive 
   Officer                   2019            -           -                -      86,889    86,889 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 
 Non-executive directors 
 Richard Boon(5)             2020       25,000       5,000                -      40,000    70,000 
  Non-Executive director     2019       15,625       3,125                -           -    18,750 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 Angela Entwistle(6)         2020       25,000       5,000                -           -    30,000 
  Non-Executive director     2019       25,000       5,000                -           -    30,000 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 Diane Lees                  2020       25,000       5,000                -           -    30,000 
  Non-Executive director     2019       25,000       2,500                -           -    27,500 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 Mark Smith                  2020       45,000      10,000                -           -    55,000 
  Non-Executive director     2019       45,000      10,000                -           -    55,000 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 Cheryl C. Jones(7)          2020            -           -                -           -         - 
  Former Chairman            2019        8,333           -                -         593     8,926 
-------------------------  ------  -----------  ----------  ---------------  ----------  -------- 
 Total for 2020                        651,525      30,000           50,000      42,748   774,273 
---------------------------------  -----------  ----------  ---------------  ----------  -------- 
 Total for 2019                        526,286      23,960           41,962      90,518   682,726 
---------------------------------  -----------  ----------  ---------------  ----------  -------- 
 

1 Served the role of non-executive chairman to 21 January 2020. Appointed interim executive chairman on 22 January 2020.

   2    Resigned as a director on 22 January 2020. See also share-based payments - note 26. 
   3    Resigned as a director on 24 February 2020. 

4 Resigned 29 November 2017. Included within 'Other benefits' is an amount of GBPnil (2019: GBP86,889) representing compensation for loss of

office.

   5    See also related party transactions - note 27. 

6 The GBP30,000 (2019: GBP30,000) paid for the services of Angela Entwistle as a non-executive director is paid to Deacon Street Partners Limited.

   7    Resigned 1 August 2018. See also related party transactions - note 27. 

The current Directors and their interests in the share capital of the Company at 31 March 2020 are disclosed within the Directors' Report.

   8.   Staff costs 

The average number of persons employed by the Group (including executive directors) during the year within each category was:

 
                                           2020      2019 
                                         Number    Number 
-------------------------------------  --------  -------- 
 
 Editorial and production staff             137       134 
 Sales and marketing staff                   37        35 
 Managerial and administration staff         31        29 
 Technology and support staff               724         - 
                                            929       198 
-------------------------------------  --------  -------- 
 

The current year figure includes the impact of 8.5 months of Merit employees.

 
                                   2020       2019 
                                GBP'000    GBP'000 
----------------------------  ---------  --------- 
 
 Wages and salaries              13,049      8,674 
 Social security costs            1,376      1,033 
 Pension and other costs            171         86 
 Share-based payment charge          20         11 
----------------------------  ---------  --------- 
                                 14,616      9,804 
----------------------------  ---------  --------- 
 
   9.   Finance income 
 
                                 2020       2019 
                              GBP'000    GBP'000 
--------------------------  ---------  --------- 
 Bank interest receivable           5         12 
--------------------------  ---------  --------- 
 

10. Finance costs

 
                                    2020       2019 
                                 GBP'000    GBP'000 
-----------------------------  ---------  --------- 
 Bank interest payable               117          - 
 Lease interest expense              420          - 
 Net foreign exchange losses          23         12 
-----------------------------  ---------  --------- 
                                     560         12 
-----------------------------  ---------  --------- 
 

11. Taxation

 
                                                2020       2019 
                                             GBP'000    GBP'000 
-----------------------------------------  ---------  --------- 
 
 Current tax 
 Current tax on income for the year at             -          - 
  19% (2019: 19%) 
 Adjustments in respect of prior periods       (173)         37 
-----------------------------------------  ---------  --------- 
                                               (173)         37 
 Overseas tax 
 Current tax expense on income for the 
  year                                           260         41 
-----------------------------------------  ---------  --------- 
 Total current tax expense                        87         78 
-----------------------------------------  ---------  --------- 
 
 
   Deferred tax (see note 23) 
 Origination and reversal of temporary 
  differences                                  (150)      (120) 
 Effect of change in tax rate                    142         13 
 Adjustments in respect of prior periods       (155)      (168) 
-----------------------------------------  ---------  --------- 
 Total deferred tax income                     (163)      (275) 
-----------------------------------------  ---------  --------- 
 
 Total income tax charge / (credit)             (76)      (197) 
-----------------------------------------  ---------  --------- 
 

The tax charge / (credit) for the year differs from the standard rate of corporation tax in the UK of 19% (2019: 19%). A reconciliation is provided in the table below:

 
                                                 2020       2019 
                                              GBP'000    GBP'000 
------------------------------------------  ---------  --------- 
 
 Loss before tax                              (1,259)    (5,726) 
------------------------------------------  ---------  --------- 
 
   Notional tax credit at standard rate 
   of 19% (2019: 19%)                           (239)    (1,088) 
 Effects of: 
 Expenses not deductible for tax purposes          23        840 
 Non-qualifying depreciation                       88        272 
 Effect of deferred tax rate changes 
  on realisation and recognition                  142         13 
 Adjustments to tax charge in respect 
  of prior periods                                  -       (27) 
 Research and development claim                     -          - 
 Deferred tax not recognised                       10          3 
 Utilisation of losses not provided for             -      (155) 
 Tax losses carried forward                        52          7 
 Other                                          (152)       (62) 
------------------------------------------  ---------  --------- 
 Total income tax charge / (credit)              (76)      (197) 
------------------------------------------  ---------  --------- 
 

12. Earnings per share

 
                                                        2020       2019 
                                                     GBP'000    GBP'000 
-------------------------------------------------  ---------  --------- 
 
 Loss attributable to shareholders                   (1,183)    (5,529) 
 Add: non-recurring items                              1,036      4,758 
 Add: amortisation of intangible assets acquired 
  through business combinations                          711        351 
 Add: net exchange losses                                 23         12 
 Add: share-based payment expense                         20         11 
-------------------------------------------------  ---------  --------- 
 Adjusted post-tax profit / (loss) attributable 
  to shareholders                                        607      (397) 
-------------------------------------------------  ---------  --------- 
 
 
                                              2020          2019 
                                          Ordinary      Ordinary 
                                            shares        shares 
------------------------------------  ------------  ------------ 
 
 Weighted average number of shares 
 In issue during the year - basic      492,696,964   341,640,953 
 Adjustment for share options            1,674,500     1,067,375 
 In issue during the year - diluted    494,371,464   342,708,328 
------------------------------------  ------------  ------------ 
 
 
                                                     2020         2019 
                                                Pence per        Pence 
                                                    share    per share 
--------------------------------------------  -----------  ----------- 
 
 Earnings per share - continuing operations 
 Basic                                             (0.24)       (1.62) 
 Diluted                                           (0.24)       (1.62) 
 
 Adjusted earnings per share - continuing 
  operations 
 Basic                                               0.12       (0.12) 
 Diluted                                             0.12       (0.12) 
--------------------------------------------  -----------  ----------- 
 

13. Goodwill

 
                                  2020       2019 
                               GBP'000    GBP'000 
---------------------------  ---------  --------- 
 
 Cost and net book value 
 Opening balance                13,282     13,282 
 Acquisition of subsidiary      15,629          - 
---------------------------  ---------  --------- 
 Closing balance                28,911     13,282 
---------------------------  ---------  --------- 
 

Goodwill acquired in a business combination is allocated at acquisition to the cash-generating units (CGUs) that are expected to benefit from that business combination. Of the carrying amount of goodwill, GBP13.282 million has been allocated to the Dods CGU (2019: GBP13.282 million) and GBP15.629 million has been allocated to the Merit CGU (2019: GBPnil).

Goodwill is not amortised but tested annually for impairment with the recoverable amount being determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rate, growth rates and forecasts of income and costs.

The Group assessed whether the carrying value of goodwill was supported by the discounted cash flow forecasts of the Group based on financial forecasts approved by management covering a three-year period, taking in to account both past performance and expectations for future market developments. Management estimates the discount rate using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to each separate business.

The impairment charge was GBPnil (2019: GBPnil).

CGU

The recoverable amount of each CGU is determined from value in use calculations.

Value in use was determined by discounting future cash flows generated from the continuing use of the titles and was based on the following most sensitive assumptions:

- cash flows for 2020/21 were projected based on the forecast for 2020/21, using the budget as a base and sensitising in light of the current environment;

- cash flows for years ending 31 March 2022 to 2023 were projected based on the Group forecast for these two years, based on the current economic environment in respect of COVID-19. For years ending 31 March 2024 and 31 March 2025, cash flows were prepared using underlying growth rates of 5% for Dods and 5% for Merit, based on management's view on likely trading and likely growth for those years;

- this assumption is based upon both assumed increases in revenue from yield improvements and expansion of markets and also strict cost control;

   -       cash flows beyond 2025 are extrapolated using a 2% growth rate for both Dods and Merit; 

- cash flows were discounted using the CGU's pre-tax discount rate of 10.59% for Dods and 8.59% for Merit.

Based on the above sensitivity assumptions the calculations disclosed headroom against the carrying value of goodwill for each CGU. The Executive directors carried out a number of sensitivity scenarios on the data. These were based on best estimates under the current economic environment created by COVID-19, however it is acknowledged that given the environment, it is not possible to determine what changes to these estimates may eventuate.

14. Intangible assets

 
 
 
                                  Assets acquired                  Other capitalised 
                                 through business                              costs 
                                  combinations(1)     Software                            Total 
                                          GBP'000      GBP'000               GBP'000    GBP'000 
---------------------------   -------------------  -----------  --------------------  --------- 
 
 Cost 
 At 1 April 2018                           24,215        2,907                     -     27,122 
 Additions - internally 
  generated                                     -          512                     -        512 
 Impairment                                 (259)            -                     -      (259) 
 
   At 31 March 2019                        23,956        3,419                     -     27,375 
 Additions - internally 
  generated                                     -          296                     -        296 
 Additions - other                              -            -                 1,304      1,304 
 Acquisition of subsidiary                  4,086            -                     -      4,086 
 At 31 March 2020                          28,042        3,715                 1,304     33,061 
----------------------------  -------------------  -----------  --------------------  --------- 
 
 
 Accumulated amortisation 
 At 1 April 2018              17,359   1,455   -   18,814 
 Charge for the year             351   1,789   -    2,140 
 
   At 31 March 2019           17,710   3,244   -   20,954 
 Charge for the year             711     158   -      869 
 At 31 March 2020             18,421   3,402   -   21,824 
---------------------------  -------  ------      ------- 
 
 
 Net book value 
 
   At 31 March 2019       6,246     175       -     6,421 
 At 31 March 2020         9,621     313   1,304    11,238 
---------------------  --------  ------  ------  -------- 
 

1 Assets acquired through business combinations are disclosed in the table below.

In the prior year the GBP259K impairment for the year relates to Fenman publishing rights.

In the prior year, the increase in amortisation charge for intangibles reflects the strategic review carried out by the Board on the useful economic life of the software platform developed in-house by the Group. As a consequence of that review the amortisation charge increased by GBP1.3 million reflecting a shortened useful economic life of the intangible asset.

The useful economic lives of the intangible assets are as follows:

   - Dods                                                   75 years 
   - Total Politics                                       20 years 
   - Holyrood                                             20 years 
   - Merit                                                    8 years 
   - Software intangibles                           2-6 years 

The carrying value of publishing rights with a useful economic life of 75 years is GBP4.1 million (2019: GBP4.1 million).

Included within intangible assets are internally generated assets with a net book value of GBP0.3 million (2019: GBP0.2 million).

Assets acquired through business combinations comprise:

 
 
 
                                                             Customer 
                         Publishing     Brand names     relationships      Other 
                             rights                         and lists     assets      Total 
                            GBP'000         GBP'000           GBP'000    GBP'000    GBP'000 
--------------------  -------------  --------------  ----------------  ---------  --------- 
 
 Cost 
 At 1 April 2018             19,193           1,277             3,591        154     24,215 
 Impairment                   (259)               -                 -          -      (259) 
 
   At 31 March 2019          18,934           1,277             3,591        154     23,956 
 Acquisition of 
  subsidiary                      -               -             4,086          -      4,086 
 At 31 March 2020            18,934           1,277             7,677        154     28,042 
--------------------  -------------  --------------  ----------------  ---------  --------- 
 
 
 Accumulated amortisation 
 At 1 April 2018               12,337     1,277     3,591     154     17,359 
 Charge for the year              351         -         -       -        351 
 
   At 31 March 2019            12,688     1,277     3,591     154     17,710 
 Charge for the year              351         -       360       -        711 
 At 31 March 2020              13,039     1,277     3,951     154     18,421 
--------------------------  ---------  --------  --------  ------  --------- 
 
 
 
 Net book value 
 
   At 31 March 
   2019             6,246     -       -     -     6,246 
---------------  --------  ----  ------  ----  -------- 
 At 31 March 
  2020              5,895     -   3,726     -     9,621 
---------------  --------  ----  ------  ----  -------- 
 

15. Property, plant and equipment

 
                               Leasehold Improvements    IT Equipment 
                                                         and Fixtures     Total 
                                                         and Fittings 
                                              GBP'000         GBP'000   GBP'000 
---------------------------   -----------------------  --------------  -------- 
 
 Cost 
 At 1 April 2018                                1,944           1,072     3,016 
 Additions                                         66              49       115 
 Disposals                                          -               -         - 
---------------------------   -----------------------  --------------  -------- 
 
   At 31 March 2019                             2,010           1,121     3,131 
 Additions                                         15             172       187 
 Acquisition of subsidiary                          -             421       421 
 At 31 March 2020                               2,025           1,714     3,739 
----------------------------  -----------------------  --------------  -------- 
 
 
 Accumulated depreciation 
 At 1 April 2018                279     410       689 
 Charge for the year            201     178       379 
 Disposals                        -       -         - 
--------------------------   ------  ------  -------- 
 
   At 31 March 2019             480     588     1,068 
 Charge for the year            212     325       537 
 At 31 March 2020               692     913     1,605 
---------------------------  ------  ------  -------- 
 
 
 Net book value 
 
   At 31 March 2019       1,530     533     2,063 
 At 31 March 2020         1,333     801     2,134 
---------------------  --------  ------  -------- 
 

16. Subsidiaries

 
 Company                                 Activity          % holding   Country of 
                                                                        registration 
--------------------------------------  ----------------  ----------  ---------------- 
 
 Dods Parliamentary Communications       Publishing              100   England and 
  Limited(1)                                                            Wales 
 Fenman Limited(1)                       Publishing              100   England and 
                                                                        Wales 
 Holyrood Communications Ltd(2)          Publishing              100   Scotland 
 Le Trombinoscope SAS(3)                 Publishing              100   France 
 Total Politics Limited(1)               Publishing              100   England and 
                                                                        Wales 
 Training Journal Limited(1)             Holding company         100   England and 
                                                                        Wales 
 Meritgroup Limited(1)                   Data and                100   England and 
                                          code                          Wales 
 Letrim Intelligence Services Private    Data and              99.99   India 
  Limited(4)                              code 
 Merit Processes Limited(1)              Dormant                 100   England and 
                                                                        Wales 
 European Parliamentary Communications   Dormant                 100   Belgium 
  Services SPRL(5) 
 Mislex (420) Limited(1)                 Dormant                 100   England and 
                                                                        Wales 
 Monitoring Services Limited(1)          Dormant                 100   England and 
                                                                        Wales 
 Political Wizard Limited(1)             Dormant                 100   England and 
                                                                        Wales 
 Social Lens Limited(1)                  Dormant                 100   England and 
                                                                        Wales 
 Vacher Dod Publishing Limited(1)        Dormant                 100   England and 
                                                                        Wales 
 VDP Limited(1)                          Dormant                 100   England and 
                                                                        Wales 
--------------------------------------  ----------------  ----------  -------------- 
 
   1   Registered address: 11th Floor, The Shard, 32 London Bridge Street, London, SE1 9SG. 
   2   Registered address: Panmure Court, 32 Calton Road, Edinburgh, EH8 8DP. 

3 Registered address: 315 Bureaux de la Colline, 1 rue Royale, 92213 Saint-Cloud cedex, Paris, France.

   4   Registered address: SP 52, 3(rd) Street, Ambattur Industrial Estate, Chennai 600 058. 
   5   Registered address: Boulevard Carlemagne 1, 1041 Bruxelles, Belgium. 

During the current year the Group have elected to provide a parental guarantee to Fenman Limited, Total Politics Limited and Holyrood Communications Ltd in accordance with section 479C of the Companies Act 2006, meaning that they are exempt from the requirement to have a statutory audit.

Acquisitions of subsidiaries

Summary of acquisition

During the current year, on 18 July 2019, the parent entity acquired 100 percent of the issued share capital of Meritgroup Limited and its subsidiaries, a provider of data services and software code. The acquisition will enable the Group to further diversify and strengthen its presence in new end markets and open up significant opportunities through the sharing of resources and talent across the Group.

There were no acquisitions in the prior year.

Details of the purchase consideration, the net assets acquired and goodwill are as follows:

 
 
                                   2020 
   Purchase consideration       GBP'000 
--------------------------   ---------- 
 
 Cash paid                       18,231 
 Ordinary shares issued           1,046 
 Deferred consideration           2,091 
 Purchase consideration          21,368 
---------------------------  ---------- 
 

The fair value of the 13,715,881 shares issued as part of the consideration was based on the average of the middle market quotations for Purchaser Ordinary Shares on AIM for each of the five dealing days prior to the completion date. The deferred consideration is not contingent on any future event occurring and requires the Group to issue a variable number of shares to the value of GBP1.045 million on the first anniversary of the acquisition and GBP1.045 million on the second anniversary of the acquisition.

 
 
                                    Current     Non-current       Total 
   Deferred consideration           GBP'000         GBP'000     GBP'000 
------------------------------   ----------  --------------  ---------- 
 Deferred consideration to be 
  settled in shares                   1,046           1,045       2,091 
-------------------------------  ----------  --------------  ---------- 
 
 
 
                                              2020 
   Fair value of net assets acquired       GBP'000 
-------------------------------------   ---------- 
 
 Cash and cash equivalents                   1,176 
 Trade and other receivables                 2,336 
 Property, plant and equipment                 421 
 Right-of-use assets                         4,209 
 Identifiable intangible assets              4,086 
 Trade and other payables                  (1,587) 
 Lease liabilities                         (4,209) 
 Deferred tax liability                      (693) 
 Net identifiable assets acquired            5,739 
 Add: Goodwill                              15,629 
 Net assets acquired                        21,368 
--------------------------------------  ---------- 
 

The goodwill arising from the acquisition consists of largely intangible assets that cannot be separately recognised, such as the assembled workforce of the acquired entity and cost synergies expected to flow to the Group. The goodwill is not expected to be deductible for income tax purposes.

The fair value of trade and other receivables is GBP2.30 million . The gross amount for trade receivables is GBP2.30 million , with a loss allowance of GBP0.02 million recognised on acquisition.

The acquired subsidiary contributed revenues of GBP7.6 million and net profit of GBP0.7 million for the year ended 31 March 2020.

Purchase consideration - cash outflow

 
 
                                                    2020 
   Net cash outflow arising on acquisition       GBP'000 
-------------------------------------------   ---------- 
 
 Cash paid                                        18,231 
 Less: cash and cash equivalent balances 
  acquired                                       (1,176) 
 Net cash outflow                                 17,055 
--------------------------------------------  ---------- 
 

17. Investments in associates

Set out below are the associates and joint ventures of the Group as at 31 March 2020 which, in the opinion of the directors, are individually not material to the Group. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held.

 
 
 
                                                 Carrying                                 Carrying 
                                                   amount     Impairment     Share of       amount 
                                 % ownership         2019           2020       profit         2020 
   Name of entity                                 GBP'000        GBP'000         2020      GBP'000 
                                                                              GBP'000 
----------------------------  --------------  -----------  -------------  -----------  ----------- 
 
 Sans Frontieres Associates 
  Ltd(1)                                  40            -              -          164          164 
 Social 360 Limited(2)                    30          503              -          (6)          497 
----------------------------  --------------  -----------  -------------  -----------  ----------- 
                                                      503              -          158          661 
============================  ==============  ===========  =============  ===========  =========== 
 

Place of business/country of incorporation of both entities is England. The Group accounts for both entities as equity-accounted associates. In the prior year. after a strategic review, the Board impaired the Group's

investment in Social 360 Limited by GBP1.231   million. 

1. On 16 February 2017, the Group purchased 40% of the issued share capital of Sans Frontieres Associates Limited (SFA), a company registered in England and Wales, for a carrying value of GBP40.

SFA's objective is to redefine the approach taken to international geopolitical and crisis communications consulting.

As at the year end the Group had loaned SFA GBP560,000 (2019: GBP700,000). During the year, repayments of GBP140,000 were received by the Group. The remaining unsecured loan of GBP560,000 carries no interest rate charge and is repayable in 2022. Recoverability is reviewed on an annual basis.

After taking into account the Group's power over its investee, its exposure and rights to variable returns from its involvement with the investee, and its ability to use the power over the investee to affect the amount of investor's return, the Directors have concluded that the Group does not have a controlling interest in SFA as it is not able to direct the activities of SFA. Therefore SFA has been accounted for as an associate in these financial statements.

2. On 16 November 2017, the Group purchased 30% of the enlarged share capital of Social 360 Limited (Social360), a company registered in England and Wales, for a carrying value of GBP1.68 million in cash including acquisition costs. Social360 provides intelligent digital media monitoring and analysis.

The acquisition includes a contractual option for the Group, at its sole discretion, to purchase the balance of the current existing shares between November 2019 and November 2020, at a valuation based upon Social 360's prevailing EBITDA. It is considered that the fair value of the option at the balance sheet date is GBPnil (2019: GBPnil).

During the prior year, a fter a strategic review, the Board impaired the Group's investment in Social 360 Limited by GBP1,231,000.

The total share of profit recognised from associates is GBP158K (2019: GBP50K).

18. Work in progress and inventories

 
                                         2020       2019 
                                      GBP'000    GBP'000 
----------------------------------  ---------  --------- 
 
 Work in progress and inventories         273         16 
                                          273         16 
----------------------------------  ---------  --------- 
 

19. Financial instruments

The carrying amount of financial assets and liabilities recognised at the balance sheet date of the reporting periods under review may also be categorised as follows:

 
                                                2020       2019 
                                             GBP'000    GBP'000 
-----------------------------------------  ---------  --------- 
 
   Financial assets 
 Trade and other receivables                   5,086      2,318 
 Long-term loan                                  560        700 
 Cash and cash equivalents                     4,368      7,160 
 Restricted cash held in deposit account           -      1,266 
-----------------------------------------  ---------  --------- 
                                              10,014     11,444 
 
   Financial liabilities 
 Trade and other payables                   (10,226)    (9,870) 
 Bank loan                                   (3,000)          - 
-----------------------------------------  ---------  --------- 
                                            (13,226)    (9,870) 
 
 
 Net financial assets and liabilities    (3,212)   1,574 
--------------------------------------  --------  ------ 
 
 
 
   Non-financial instruments 
 Property, plant and equipment        2,134     2,063 
 Goodwill                            28,911    13,282 
 Other intangible assets             11,238     6,421 
 Prepayments and accrued income       2,733     1,266 
 Inventories                            273        16 
 Other non-financial instruments    (5,462)   (1,116) 
 Provisions for deferred tax          (862)     (487) 
                                     38,965    21,445 
 
 
 Total equity    35,753   23,019 
--------------  -------  ------- 
 

The Group has exposure to several forms of risk through its use of financial instruments. Details of these risks and the Group's policies for managing these risks are included below.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group's principal financial assets are trade and other receivables, and cash.

The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.

At 31 March 2020, GBP487,000 of the Group's trade receivables were exposed to risk in countries other than the United Kingdom (2019: GBP270,000).

The ageing of trade receivables at the reporting date was:

 
                                        Gross   Provided      Gross   Provided 
                                         2020       2020       2019       2019 
                                      GBP'000    GBP'000    GBP'000    GBP'000 
----------------------------------  ---------  ---------  ---------  --------- 
 
 Current or overdue by less 
  than 3 months                         4,472          -      1,958          - 
 Overdue by greater than 3 months         104       (64)         96       (95) 
                                        4,576       (64)      2,054       (95) 
----------------------------------  ---------  ---------  ---------  --------- 
 

Provisions against trade receivables are based on an ageing analysis of overdue receivables and any other indications which suggest an impairment as estimated by management.

The movement in allowance for doubtful accounts in respect of trade receivables during the year was as follows:

 
                                         2020       2019 
                                      GBP'000    GBP'000 
--------------------------------    ---------  --------- 
 
 Balance at the beginning of 
  the year                                 95         41 
 Acquisition of subsidiary                 15          - 
 Movement                                (46)         54 
 Balance at the end of the year            64         95 
----------------------------------  ---------  --------- 
 

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The contractual cash flows of each financial liability are materially the same as their carrying amount.

Maturity of financial liabilities:

The tables below analyses the Group's financial liabilities into relevant maturity groupings based on their contractual maturities as at 31 March 2020. The amounts disclosed in the table are the contractual undiscounted cash flows.

 
 
                                      Due between 
                       Due within      1 year and       Total 
                           1 year         5 years     GBP'000 
                          GBP'000         GBP'000 
-----------------   -------------  --------------  ---------- 
 Trade and other 
  payables                 12,423             545      12,968 
 Bank loan                  3,000               -       3,000 
 

All the financial liabilities in the prior year had a maturity date of within one year. The GBP3 million bank loan has been classified as current - see note 22.

Currency risk

The Group is exposed to currency risk on transactions denominated in Euros, US Dollars and Indian Rupees.

Share capital

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. For further details of share capital see note 24.

Sensitivity analysis

In managing interest rate and currency risks the Group aims to reduce the impact of short-term fluctuations on the Group's earnings. Over the longer-term, however, permanent changes in foreign exchange and interest rates would have an impact on consolidated earnings.

At 31 March 2020, it is estimated that a general increase of one percentage point in interest rates would have decreased the Group's profit before tax by approximately GBP32,000 (2019: GBPnil). In the prior year the Group did not have any borrowings.

It is estimated that a general increase of one percentage point in the value of the Euro against Sterling would have increased the Group's profit before tax by approximately GBP11,000 (2019: GBP25,000).

Fair values

The directors consider that the fair value of financial instruments is materially the same as their carrying amounts.

Capital management

The Group manages its capital to ensure that all entities in the Group will be able to continue as a going concern while maximising return to stakeholders, as well as sustaining the future development of the business. The capital structure of the Group consists of cash and cash equivalents and equity attributable to the owners of the parent, comprising issued share capital, other reserves and retained earnings.

20. Other financial assets

 
                                       2020       2019 
   Trade and other receivables      GBP'000    GBP'000 
--------------------------------  ---------  --------- 
 
 Trade receivables                    4,512      1,959 
 Other receivables                      574        359 
 Prepayments and accrued income       2,733      1,266 
--------------------------------  ---------  --------- 
                                      7,819      3,584 
--------------------------------  ---------  --------- 
 

Trade and other receivables denominated in currencies other than Sterling comprise GBP351,000 (2019: GBP270,000) denominated in Euros and GBP127,000 (2019: GBPnil) denominated in USD.

 
                                                2020       2019 
   Cash related                              GBP'000    GBP'000 
-----------------------------------------  ---------  --------- 
 
 Cash and cash equivalents                     4,368      7,160 
 Restricted cash held in deposit account           -      1,266 
-----------------------------------------  ---------  --------- 
                                               4,368      8,426 
-----------------------------------------  ---------  --------- 
 

Cash includes GBP763,000 (2019: GBP1,794,301) denominated in Euros, GBP248,000 (2019: GBP480,000) denominated in USD and GBP998,000 (2019: GBPnil) denominated in Indian rupees.

Included in cash at bank is a rental deposit of GBPnil (2019: GBP1,266,000) held in a bank account in the Group's name which is subject to a guarantee in favour of the landlord of the London premises of the Group.

21. Trade and other payables

 
                                                 2020       2019 
   Current                                    GBP'000    GBP'000 
------------------------------------------  ---------  --------- 
 
 Trade creditors                                1,880      1,129 
 Other creditors including tax and social 
  security                                      2,197      1,619 
 Other payables                                   272          - 
 Accruals and deferred income                   8,074      8,741 
------------------------------------------  ---------  --------- 
                                               12,423     11,489 
------------------------------------------  ---------  --------- 
 

Current liabilities denominated in currencies other than Sterling compromise GBP47,000 (2019: GBP26,000) denominated in Euros, GBP20,000 (2019: GBP25,000) denominated in USD and GBP752,000 (2019: GBPnil) denominated in Indian rupees.

 
                      2020       2019 
   Non-current     GBP'000    GBP'000 
---------------  ---------  --------- 
 Other payables        545          - 
---------------  ---------  --------- 
 

The non-current other payables balance reflects an amount payable arising on the acquisition of Merit, contingent on the continued employment of certain of the Merit employees.

22. Interest-bearing loans and borrowings

During the year, the Group borrowed a term loan of GBP3 million (2019: GBPnil) over a 5-year period carrying a rate of 3.25% over LIBOR. In addition, it has a revolving credit facility (RCF) of GBP2 million carrying a rate of 3.5% over LIBOR. The current balance outstanding on the term loan is GBP3 million. The current balance outstanding on the RCF is GBPnil.

See note 19 for the maturity analysis of the bank loan.

Updated banking facilities and covenant waiver

During the year end audit process, the Group became aware of a change in a contractual obligation that existed as at 31 March 2020 that caused it to be in breach of one of its three banking covenants.

The Group has secured a waiver from the bank for this breach; however, because the waiver was not in place as at the balance sheet date the entire GBP3million loan balance has been classified as current in these financial statements. The Group expects the GBP3 million loan balance to be classified as a long term liability in its interim result balance sheet on 30 September 2020.

In the 12 month period from the balance sheet date capital repayments of GBP0.4 million will be repaid to the bank with the remaining GBP2.6 million due in subsequent periods. The group continues to enjoy the support of Barclays Bank plc and agreement has been reached on new covenants to support the Group in 2021.

23. Deferred tax liability

The following are the major deferred tax liabilities and assets recognised by the Group, and movements thereon during the current year and prior year:

 
                                      Liabilities                      Assets 
                                                             Accelerated 
                                Intangible           Other       capital 
                                    assets          timing    allowances     Tax losses       Total 
                                   GBP'000     differences       GBP'000        GBP'000     GBP'000 
                                                   GBP'000 
---------------------------  -------------  --------------  ------------  -------------  ---------- 
 
 At 31 March 2018                      973             (3)          (70)          (139)         763 
 Charge to income                    (260)             (1)            28           (41)       (275) 
---------------------------  -------------  --------------  ------------  -------------  ---------- 
 At 31 March 2019                      713             (4)          (42)          (180)         487 
 Acquisition of subsidiary             693               -             -              -         693 
 Other movements                     (155)               -             -              -       (155) 
 Charge to income                    (140)              45             2           (70)       (163) 
---------------------------  -------------  --------------  ------------  -------------  ---------- 
 At 31 March 2020                    1,111              41          (40)          (250)         862 
===========================  =============  ==============  ============  =============  ========== 
 

Deferred tax assets and liabilities have been offset in both the current year and preceding year as the current tax assets and liabilities can be legally offset against each other, and they relate to taxes levied by the same taxation authority or the Group intends to settle its current tax assets and liabilities on a net basis.

At the balance sheet date, the Group has unused tax losses of GBP8.1 million (2019: GBP5.1 million) available for offset against future profits. A deferred tax asset of GBP250,000 (2019: GBP180,000) has been recognised in respect of such losses.

24. Issued capital

 
                                  9p deferred   1p ordinary      Total 
                                       shares        shares    GBP'000 
                                       Number        Number 
-------------------------------  ------------  ------------  --------- 
 
 Issued share capital as at 
  1 April 2019                    151,998,453   341,640,953     17,096 
 Shares issued during the year              -   214,288,760      2,143 
 Issued share capital as at 
  31 March 2020                   151,998,453   555,929,713     19,239 
-------------------------------  ------------  ------------  --------- 
 

Holders of deferred shares do not have the right to receive notice of any general meeting of the Company or any right to attend, speak or vote at such meeting. The deferred shareholders are not entitled to receive any dividend or distribution and shall on a return of assets in a winding up of the Company entitle the holders only to the repayment of 1pence aggregate. The deferred shares are also incapable of transfer and no share certificate will be issued.

During the year the Company issued 214,288,760 ordinary shares to part fund the acquisition of Merit.

During the year the Group issued nil (2019: nil) ordinary shares on the exercise of employee share options for cash consideration of GBPnil (2019: GBPnil) of which GBPnil (2019: GBPnil) was credited to share capital and GBPnil (2019: GBPnil) to share premium.

25. Leases

The Group has adopted IFRS 16 Leases as at 1 April 2019, which replaces IAS 17 Leases. The Group has elected to apply the modified retrospective approach, with the cumulative effect of adopting IFRS 16 being recognised as an opening balance adjustment to retained earnings as at 1 April 2019. Prior periods have not been restated.

On transition to IFRS 16 on 1 April 2019, the Group recognised a GBP4.9 million right-of-use asset, along with a corresponding lease liability of GBP6.2 million. Accrued rent has been adjusted by GBP1.1 million and the difference of GBP0.2 million against opening retained earnings. The incremental borrowing rate used by the Group in applying IFRS 16 is 5 percent.

A reconciliation of total operating lease commitments disclosed at 31 March 2019 to the lease liability amount recognised on adoption of IFRS 16 is as follows:

 
                                                 GBP'000 
---------------------------------------------   -------- 
 
 Total operating lease commitments disclosed 
  at 31 March 2019                                 7,546 
 Discounted using incremental borrowing 
  rate                                           (1,359) 
 Total lease liabilities recognised under 
  IFRS 16 at 1 April 2019                          6,187 
----------------------------------------------  -------- 
 
 
                                                 Right-of-use   Lease liabilities 
                                                       assets             GBP'000 
                                                      GBP'000 
---------------------------------------------   -------------  ------------------ 
 
 On adoption - 1 April 2019                             4,927             (6,187) 
 Additions through acquisition of subsidiary            4,209             (4,209) 
 Depreciation                                         (1,210)                   - 
 Lease interest                                             -               (420) 
 Lease payments                                             -               1,732 
 Decrease in accruals/prepayments                           -               (132) 
----------------------------------------------  -------------  ------------------ 
 As at 31 March 2020                                    7,926             (9,216) 
 Current                                                  n/a             (1,515) 
 Non-current                                              n/a             (7,701) 
----------------------------------------------  -------------  ------------------ 
 

The statement of profit or loss shows the following amounts relating to leases:

 
 
                                                2020        2019 
                                             GBP'000     GBP'000 
--------------------------------------    ----------  ---------- 
 
 Depreciation charge of right-of-use           1,210           - 
  assets 
 Interest expense (included in finance           420           - 
  cost) 
--------------------------------------    ----------  ---------- 
 

The right-of-use assets relate to office space in five locations and at the balance date have remaining terms ranging up to 6.5 years.

26. Share-based payments

Executive Share Option Scheme

The Company operates an Unapproved Executive Share Option Scheme under which equity-settled share options are granted to selected Group employees. Currently, only 1 employee holds options under the scheme, and this employee is not a director of the Company. The contractual life of each grant is 10 years. No more awards will be made under this scheme.

 
 Grant date      Outstanding       Granted   Lapsed/exercised      Outstanding 
                  options at    during the         during the    options at 31 
                1 April 2019          year               year       March 2020 
------------  --------------  ------------  -----------------  --------------- 
 
 6 May 2009          150,000             -          (150,000)                - 
 4 November 
  2010               100,000             -                  -          100,000 
                     250,000             -          (150,000)          100,000 
------------  --------------  ------------  -----------------  --------------- 
 

All options granted are discretionary (as determined by the Board) and carry a pre-exercise performance condition, requiring the Company's Earnings Per Share achievement during any rolling three-year financial performance year to exceed the retail/consumer price index by at least 3%, in aggregate, during the same period. No consideration is received for an award and no grants can be made at an option exercise price per share which is less than the market price at the time of grant.

Long-Term Incentive Plan (LTIP)

During the prior year, the Company granted the former Chief Executive Officer a conditional award under a new

long-term incentive plan.   No more awards will be made under this scheme. 
 
 Grant date        Outstanding       Granted   Lapsed/exercised      Outstanding 
                    options at    during the         during the    options at 31 
                  1 April 2019          year               year       March 2020 
--------------  --------------  ------------  -----------------  --------------- 
 
 21 September 
  2018               1,562,000             -                  -        1,562,000 
                     1,562,000             -                  -        1,562,000 
--------------  --------------  ------------  -----------------  --------------- 
 

To become exercisable, the options are dependent on the market capitalisation of the Group. The options have a contractual life of 3 years, with the potential for additional value to be realised after a 4(th) year, subject to performance hurdles. The first GBP250,000 of this long-term incentive plan are under an approved EMI scheme. The option pricing model used in relation to the LTIP is a Monte-Carlo simulation model. Significant assumptions used include volatility and risk-free rates.

Details of the share options outstanding during the year are as follows.

 
                            Number of Ordinary   Weighted average 
                                        shares     exercise price 
                                                          (pence) 
-------------------------  -------------------  ----------------- 
 
 As at 1 April 2018                    250,000              10.0p 
 Granted during the year             1,562,000                n/a 
 As at 31 March 2019                 1,812,000                n/a 
 Granted during the year                     -                n/a 
 Lapsed during the year              (150,000)                n/a 
 As at 31 March 2020                 1,662,000                n/a 
-------------------------  -------------------  ----------------- 
 

The following options were outstanding under the Company's Executive Share Option Scheme and LTIP, as at 31 March 2020:

 
                                    Number of   Exercise price 
                              Ordinary shares        per share     Exercise 
                                                       (pence)       period 
--------------------------  -----------------  ---------------  ----------- 
 
   Executive Share Option 
   Scheme 
 4 November 2010                      100,000            10.0p     Nov 2020 
 Long-Term Incentive Plan 
 21 September 2018                  1,562,000         16.1087p    Sept 2021 
                                    1,662,000 
--------------------------  -----------------  ---------------  ----------- 
 

The income statement charge in respect of the LTIP for the year was GBP20,000 (2019: GBP11,000).

27. Related party transactions

During the year, CC Jones Consulting Limited provided strategic consultancy services to Dods Group plc to the value of GBPnil (2019: GBP85,000). Former Chairman Cheryl C. Jones is also a director of CC Jones Consulting Limited (also refer to note 7 detailing directors' remuneration).

During the year, Artefact Partners LLP provided strategic consultancy services to Dods Group plc to the value of GBP20,000 (2019: GBP20,000). Current non-executive director Richard Boon is an LLP designated member of Artefact Partners LLP (also refer to note 7 detailing directors' remuneration).

During the year, the Group received a repayment of GBP140,000 (2019: GBPnil) on its interest free loan to its associate Sans Frontieres Associates (SFA). At 31 March 2020 the balance outstanding was GBP560,000 (2019: GBP700,000).

During the year, an amount of GBP55,720 (2019: GBP60,781) was payable to an associate Social 360 Limited, in relation to profit-share for monitoring services provided. At 31 March 2020, GBP22,620 (2019: GBP11,490) of this balance was outstanding.

On acquisition of Merit, an arm's length non-repairing 7-year lease was entered into between a Merit subsidiary (Letrim Intelligence Services Private Limited) and Merit Software Services Private Limited. Cornelius Conlon, a director of the Group, is the beneficial owner of Merit Software Services Private Limited. The lease relates to the Chennai office of Merit. During the year, payments of GBP535,000 were made to Merit Software Services Private Limited in relation to the lease.

The Executive directors of the Group are considered key management personnel. See note 7 for details of directors' remuneration.

28. Events occurring after the reporting date

On 23 May 2020 the Group agreed certain modifications to its banking facilities with Barclays Bank plc including an additional 9 month capital repayment holiday on a GBP3 million loan (note duration of the loan has not been extended), a waiver of all covenants through to 31(st) December 2020 and certain revised covenants thereafter.

In addition, on 1 September the Group agreed revised covenants for the period starting 1 January 2021 and also agreed a waiver of the annual covenant test for 31 March 2021.

On 29 July 2020 the Group announced the allotment of 26,141,667 new ordinary shares in connection with its deferred consideration obligations entered into as part of the Company's acquisition of Meritgroup Limited.

The Group has been impacted by COVID-19 from March 2020. As discussed earlier, continuing efforts to manage the COVID-19 situation are in place and are fluid. The Board at this stage cannot predict the medium to long-term effects of COVID-19 and therefore does not expect to be able to issue any forward-looking statements or guidance for the foreseeable future.

Parent company balance sheet

As at 31 March 2020

Company number: 04267888

 
                                               2020       2019 
                                    Note    GBP'000    GBP'000 
-------------------------------  -------  ---------  --------- 
 
 Non-current assets 
 Intangible assets                    31      1,624      1,085 
 Tangible fixed assets                32      1,658      1,954 
 Investments                          33     42,342     20,974 
 Long-term loan                                 560        700 
 Total non-current assets                    46,184     24,713 
 
 Current assets 
 Debtors                              34      3,862      4,663 
 Cash                                 35        120      1,962 
 Total current assets                         3,982      6,625 
 
 Total assets                                50,166     31,338 
-------------------------------  -------  ---------  --------- 
 
 Capital and reserves 
 Called-up share capital              38     19,239     17,096 
 Share premium account                       20,082      8,143 
 Merger reserve                                 409        409 
 Profit and loss account                      1,366      1,340 
 Total equity                                41,096     26,988 
 
 Current liabilities 
 Trade and other payables             36      3,058      3,974 
 Deferred consideration               33      1,046          - 
 Bank loan                            37      3,000          - 
 Total current liabilities                    7,104      3,974 
 
 Non-current liabilities 
 Other payables                       36        921        376 
 Deferred consideration               33      1,045          - 
 Total non-current liabilities                1,966        376 
 
 Total equity and liabilities                50,166     31,338 
-------------------------------  -------  ---------  --------- 
 

During the year, the company made a profit of GBP26,000 (2019: loss of GBP3,196,929).

These financial statements were approved by the Board of directors and were signed on its behalf by:

Simon Bullock

Chief Financial Officer

2 September 2020

Parent company statement of changes in equity

For the year ended 31 March 2020

 
                                                                                    Total shareholders' 
                                 Share          Share         Merger     Retained                 funds 
                               capital     premium(1)     reserve(2)     earnings               GBP'000 
                               GBP'000        GBP'000        GBP'000      GBP'000 
--------------------------  ----------  -------------  -------------  -----------  -------------------- 
 
 At 1 April 2018                17,096          8,143            409        4,537                30,185 
 Total comprehensive 
  income 
      Loss for the year              -              -              -      (3,197)               (3,197) 
 Share-based payment                 -              -              -            -                     - 
  charge 
 Transactions with 
  the owners 
      Issue of ordinary              -              -              -            -                     - 
       shares 
 At 31 March 2019               17,096          8,143            409        1,340                26,988 
 Total comprehensive 
  income 
      Profit for the year            -              -              -           26                    26 
 Share-based payment                 -              -              -            -                     - 
  charge 
 Transactions with 
  the owners 
      Issue of ordinary 
       shares                    2,143         11,939              -            -                14,082 
 At 31 March 2020               19,239         20,082            409        1,366                41,096 
--------------------------  ----------  -------------  -------------  -----------  -------------------- 
 

1 The share premium reserve represents the amount paid to the Company by shareholders above the nominal value of shares issued.

2 The merger reserve represents accounting treatment in relation to historical business combinations.

Notes to the parent company financial statements

For the year ended 31 March 2020

29. Statement of Accounting Policies - company

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Company's financial statements.

Basis of accounting

The financial statements have been prepared in accordance with United Kingdom applicable accounting standards, including Financial Reporting Standard 102, and with the Companies Act 2006. The financial statements have been prepared on the historical cost basis.

Under section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own profit and loss account.

The individual accounts of the Company have also adopted the following disclosure exemptions:

   --              the requirement to present a statement of cash flows and related notes; 

-- financial instrument disclosures, including: categories of financial instruments, items of income, expenses, gains or losses relating to financial instruments, and exposure to and management of financial risks;

   --              the requirement to present share-based payment disclosures; and 

-- the requirement to disclose key management personnel compensation.

Going Concern

The Directors have considered the implications for Going Concern for a period of at least twelve months from the signing of these accounts. The Board remains satisfied with the Company's funding and liquidity position as discussed further in note 1 of the group financial statements.

The Board remains mindful regarding the uncertainties inherent in the current economic conditions. The company's forecasts and projections, taking into account reasonable changes in trading performance given these uncertainties, show the Company operating within its current cash flow with headroom going forward.

On the basis of these forecasts, and given the level of cash available, the Board has concluded that the going concern basis of preparation continues to be appropriate.

Share-based payments

The Company operates a number of equity-settled, share based compensation plans. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense with a corresponding increase in equity. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the Company revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.

Deferred tax is recognised where it is likely that tax relief will be available on the difference between exercise price and market price at the balance sheet date.

Where the Company grants options over its own shares to the employees of its subsidiaries, it recognises a movement in the cost of investment in its subsidiaries equivalent to the equity-settled share based payment charge recognised in its subsidiary's financial statements, with the corresponding movement being recognised directly in equity.

Leases

Operating lease rentals are charged to the profit and loss account on a straight-line basis over the period of the lease.

Post-retirement benefits - defined contribution

The Company contributes to independent defined contribution pension schemes. The assets of the schemes are held separately from those of the Company in independently administered funds. The amount charged to the profit and loss account represents the contributions payable to the schemes in respect of the accounting period.

Dividends

Dividends from subsidiary companies are accounted for when payable. Dividends payable to shareholders are recognised when they are approved by the shareholders at the Annual General Meeting. Unpaid dividends that do not meet these criteria are disclosed in the notes to the financial statements.

Tax

Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that that have been enacted or substantively enacted by the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated.

Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. If and when all conditions for retaining tax allowances for the cost of a fixed asset of a fixed asset have been met, the deferred tax is reversed, recognised, and will be assessed. Deferred tax is recognised when income or expenses from a subsidiary or associate have been for tax in a future period, except where:

   --              the Company is able to control the reversal of the timing difference; and 

-- it is probable that the timing difference will not reverse in the foreseeable future.

Deferred tax is calculated using the tax rates and laws that that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference. Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. Deferred tax assets and deferred tax liabilities are offset only if:

-- the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

-- the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously.

Intangible assets

Intangible assets represent publishing rights acquired by the Company. These are amortised over their useful economic life of 20 years.

Tangible fixed assets and depreciation

Depreciation is provided to write off the cost less estimated residual value of tangible fixed assets by equal instalments over their estimated useful economic lives as follows:

   Leasehold improvements                              Over the remaining life of the lease 
   Equipment and fixtures and fittings               3-5 years 

Fixed asset investments

In the Company's financial statements, investments in subsidiary undertakings and participating interests are stated at cost less any provisions for impairment.

Impairment of fixed assets and goodwill

The carrying amounts of the Company's assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the fixed asset may not be recoverable. If any such indication exists, the asset's recoverable amount is estimated.

An impairment loss is recognised whenever the carrying amount of an asset or its income-generating unit exceeds its recoverable amount. Impairment losses are recognised in the profit and loss account unless it arises on a previously revalued fixed asset. An impairment loss on a revalued fixed asset is recognised in the profit and loss account if it is caused by a clear consumption of economic benefits. Otherwise impairments are recognised in the statement of other comprehensive income until the carrying amount reaches the asset's depreciated historic cost.

Calculation of recoverable amount

The recoverable amount of fixed assets is the greater of their net realisable value and value in use. In assessing value in use, the expected future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the rate of return expected on an equally risky investment. For an asset that does not generate largely independent income streams, the recoverable amount is determined for the income-generating unit to which the asset belongs.

Reversals of impairment

An impairment loss is reversed on intangible assets and goodwill only if subsequent external events reverse the effect of the original event which caused the recognition of the impairment or the loss arose on an intangible asset with a readily ascertainable market value and that market value has increased above the impaired carrying amount.

For other fixed assets where the recoverable amount increases as a result of a change in economic conditions or in the expected use of the asset then the resultant reversal of the impairment loss should be recognised in the current period.

An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Financial assets, liabilities and equity instruments

The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.

30. Staff costs - company

The average number of persons employed by the Company (including executive directors) during the year within each category was:

 
                                        2020   2019 
-------------------------------------  -----  ----- 
 Managerial and administration staff       8      8 
-------------------------------------  -----  ----- 
 

The aggregate payroll costs in respect of these employees (including executive directors) were:

 
                                   2020       2019 
                                GBP'000    GBP'000 
----------------------------  ---------  --------- 
 
 Wages and salaries                 678        786 
 Social security costs               76         96 
 Pension and other costs              -          1 
 Share-based payment charge          20         11 
----------------------------  ---------  --------- 
                                    774        894 
----------------------------  ---------  --------- 
 

Detailed disclosures on directors' remuneration is given in note 7.

31. Intangible assets - company

 
 
 
                                           Oher capitalised 
                            Publishing                costs 
                                rights                          Total 
                               GBP'000              GBP'000   GBP'000 
--------------------     -------------  -------------------  -------- 
 
 Cost 
 At 1 April 2018                 1,357                    -     1,357 
-----------------------  -------------  -------------------  -------- 
 
   At 31 March 2019              1,357                    -     1,357 
 
   Additions                         -                  607       607 
-----------------------  -------------  -------------------  -------- 
 
   At 31 March 2020              1,357                  607     1,964 
-----------------------  -------------  -------------------  -------- 
 
 
 Accumulated amortisation 
 At 1 April 2018                204     -     204 
 Charge for the year             68     -      68 
 
   At 31 March 2019             272     -     272 
 Charge for the year             68     -      68 
 At 31 March 2020               340     -     340 
---------------------------  ------  ----  ------ 
 
 
 Net book value 
 
   At 31 March 2019       1,085     -     1,085 
 At 31 March 2020         1,017   607     1,624 
---------------------  --------  ----  -------- 
 

32. Tangible fixed assets - company

 
                        Leasehold Improvements 
                                                   IT equipment     Total 
                                       GBP'000          GBP'000   GBP'000 
--------------------   -----------------------  ---------------  -------- 
 
 Cost 
 At 1 April 2018                         1,926              748     2,674 
 Additions                                  66                -        66 
 
   At 31 March 2019                      1,992              748     2,740 
 Additions                                  14                -        14 
 At 31 March 2020                        2,006              748     2,754 
---------------------  -----------------------  ---------------  -------- 
 
 
 Accumulated depreciation 
 At 1 April 2018                262     200     462 
 Charge for the year            201     123     324 
 
   At 31 March 2019             463     323     786 
 Charge for the year            204     106     310 
 At 31 March 2020               667     429   1,096 
---------------------------  ------  ------  ------ 
 
 
 Net book value 
 
   At 31 March 2019       1,529     425     1,954 
 At 31 March 2020         1,339     319     1,658 
---------------------  --------  ------  -------- 
 

33. Fixed asset investments - company

 
                                          Subsidiary 
                          Associates    undertakings       Total 
                             GBP'000         GBP'000     GBP'000 
---------------------  -------------  --------------  ---------- 
 
 Cost 
 As at 1 April 2019              463          20,511      20,974 
 Addition                          -          21,368      21,368 
---------------------  -------------  --------------  ---------- 
 As at 31 March 2020             463          41,879      42,342 
---------------------  -------------  --------------  ---------- 
 

Detailed disclosures on subsidiary undertakings are given in note 16 and associates in note 17. During the current year, the Company purchased 100 percent of the share capital of Meritgroup Limited. During the prior year, the carrying value of the Company's investment in Social 360 Limited was impaired by GBP1,231,000.

Deferred and contingent consideration payable in relation to the acquisition of Meritgroup Limited are also outlined in note 16.

34. Trade and other receivables - company

 
                                           2020       2019 
                                        GBP'000    GBP'000 
------------------------------------  ---------  --------- 
 
 Other debtors                                -        162 
 Amounts owed by group undertakings       2,692      4,285 
 Prepayments and accrued income           1,170        216 
------------------------------------  ---------  --------- 
                                          3,862      4,663 
------------------------------------  ---------  --------- 
 

35. Cash and cash equivalents - company

 
                                  2020       2019 
                               GBP'000    GBP'000 
---------------------------  ---------  --------- 
 
 Cash and cash equivalents         120      1,962 
---------------------------  ---------  --------- 
 

36. Trade and other payables - company

 
                                                    2020       2019 
   Trade and other payables: amounts falling     GBP'000    GBP'000 
   due within one year 
---------------------------------------------  ---------  --------- 
 
 Amounts owed to group undertakings                1,179      1,232 
 Other creditors including tax and social 
  security                                            18         15 
 Other payables                                      272          - 
 Accruals and deferred income                      1,589      2,727 
---------------------------------------------  ---------  --------- 
                                                   3,058      3,974 
---------------------------------------------  ---------  --------- 
 
 
                                                    2020       2019 
   Trade and other payables: amounts falling     GBP'000    GBP'000 
   due after more than one year 
---------------------------------------------  ---------  --------- 
 
 Amounts owed to group undertakings                  376        376 
 Other payables                                      545          - 
---------------------------------------------  ---------  --------- 
                                                     921        376 
---------------------------------------------  ---------  --------- 
 

The non-current other payables balance reflects an amount payable arising on the acquisition of Merit, contingent on the continued employment of certain of the Merit employees.

37. Interest-bearing loans and borrowings - company

During the year, the Company borrowed a term loan of GBP3 million (2019: GBPnil) over a 5-year period carrying a rate of 3.25% over LIBOR. In addition, it has a revolving credit facility (RCF) of GBP2 million carrying a rate of 3.5% over LIBOR. The current balance outstanding on the term loan is GBP3m. The current balance outstanding on the RCF is GBPnil.

See note 19 for the maturity analysis of the bank loan.

38. Share capital - company

 
                                  9p deferred   1p ordinary      Total 
                                       shares        shares    GBP'000 
                                       Number        Number 
-------------------------------  ------------  ------------  --------- 
 
 Issued share capital as at 
  1 April 2019                    151,998,453   341,640,953     17,096 
 Shares issued during the year              -   214,288,760      2,143 
 Issued share capital as at 
  31 March 2020                   151,998,453   555,929,713     19,239 
-------------------------------  ------------  ------------  --------- 
 

Holders of deferred shares do not have the right to receive notice of any general meeting of the Company or any right to attend, speak or vote at such meeting. The deferred shareholders are not entitled to receive any dividend or distribution and shall on a return of assets in a winding up of the Company entitle the holders only to the repayment of 1pence aggregate. The deferred shares are also incapable of transfer and no share certificate will be issued.

During the year the Company issued 214,288,760 ordinary shares to part fund the acquisition of Merit.

During the year the Company issued nil (2019: nil) ordinary shares on the exercise of employee share options for cash consideration of GBPnil (2019: GBPnil) of which GBPnil (2019: GBPnil) was credited to share capital and GBPnil (2019: GBPnil) to share premium.

39. Operating lease commitments - company

At the balance sheet date, the Company had outstanding commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows:

 
 Land and buildings                2020       2019 
                                GBP'000    GBP'000 
----------------------------  ---------  --------- 
 
 Within one year                  1,056      1,056 
 Between two and five years       4,223      4,223 
 After five years                 1,078      2,136 
----------------------------  ---------  --------- 
                                  6,357      7,415 
----------------------------  ---------  --------- 
 

40. Related party disclosures - company

The Company has taken advantage of the exemption conferred by Financial Reporting Standard 102 Related Party Disclosures Section 33 (33.1A) from disclosing transactions which occurred between wholly owned subsidiaries of the Group headed by Dods Group plc.

During the year, CC Jones Consulting Limited provided strategic consultancy services to Dods Group plc to the value of GBPnil (2019: GBP85,000). Former Chairman Cheryl C. Jones is also a director of CC Jones Consulting Limited (also refer to note 7 detailing directors' remuneration).

During the year, Artefact Partners LLP provided strategic consultancy services to Dods Group plc to the value of GBP20,000 (2019: GBP20,000). Current Non-Executive Director Richard Boon is a LLP designated member of Artefact Partners LLP (also refer to note 7 detailing directors' remuneration).

During the year, the Company received repayment of GBP140,000 (2019: GBPnil) of an interest free loan from its associate Sans Frontieres Associates (SFA). At 31 March 2020 the balance outstanding was GBP560,000 (2019: GBP700,000).

41. Events occurring after the reporting date

On 23 May 2020 the Company agreed certain modifications to its banking facilities with Barclays Bank plc including an additional 9 month capital repayment holiday on a GBP3 million loan (note duration of the loan has not been extended), a waiver of all covenants through to 31(st) December 2020 and certain revised covenants thereafter.

In addition, on 1 September the Group agreed revised covenants for the period starting 1 January 2021 and also agreed a waiver of the annual covenant test for 31 March 2021.

On 29 July 2020 the Company announced the allotment of 26,141,667 new ordinary shares in connection with its deferred consideration obligations entered into as part of the Company's acquisition of Meritgroup Limited.

The Group has been impacted by COVID-19 from March 2020. As discussed earlier, continuing efforts to manage the COVID-19 situation are in place and are fluid. The Board at this stage cannot predict the medium to long-term effects of COVID-19 and therefore does not expect to be able to issue any forward-looking statements or guidance for the foreseeable future.

.

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

FR KZGGLMZKGGZZ

(END) Dow Jones Newswires

September 03, 2020 02:02 ET (06:02 GMT)

1 Year Dods Chart

1 Year Dods Chart

1 Month Dods Chart

1 Month Dods Chart
ADVFN Advertorial
Your Recent History
LSE
DODS
Dods
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:20201021 04:00:04