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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hunters Property Plc | LSE:HUNT | London | Ordinary Share | GB00BYMW5L71 | ORD 4P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 70.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMHUNT
RNS Number : 2430L
Hunters Property PLC
05 September 2019
5 September 2019
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR)
Hunters Property Plc
Interim Results for the six months ended 30 June 2019
Hunters Property Plc ("Hunters" or the "Company" or the "Group"), one of the UK's largest franchised sales and lettings agency businesses, is pleased to announce its unaudited interim results for the six months ended 30 June 2019.
'Robust half year results underpin confidence for full year outcome'
Financial Highlights:
-- Network Income up +7% to GBP19.2m (six months to June 2018: GBP17.9m); -- Revenue GBP6.6m (2018: GBP6.7m); -- Adjusted operating profit* up +30% to GBP1.1m (2018: GBP0.85m); -- Adjusted earnings per share increased +13% to 2.30p (2018: 2.03p); and -- Interim dividend up +9% to 0.87p per share (2018: 0.80p per share).
* Adjusted operating profit is before depreciation, amortisation, impairments and profit/loss on disposal of non-current assets, acquisition and share-based payments expenses. Excluding the impact of IFRS 16 Adjusted operating profit for H1 2019 was GBP857,000.
Operational Highlights:
-- Converted eight new branches in this period at an average Network Income per branch of GBP425,000 (2018: GBP186,000);
-- Expanded our branch network to 200 (December 2018: 197);
-- Investing significantly in our software capability as well as bolstering the management team;
-- Two further lettings books have been acquired by franchisees, making use of our acquisition fund facility for branches to expand, and bringing our investments to 15;
-- Grown lettings income across the network by 12% for the period; and -- Returned a Customer Satisfaction Rating of 96% (Dec 2018: 96%).
Outlook
-- Board remains confident the second half will, as in prior years, outperform the first six months despite the impact of the Tenant Fee Ban (which at GBP0.3m remains broadly in line with the Board's expectations) and against sales listings for the market as a whole reporting a 7%(1) decline this period according to Rightmove data;
-- Independent businesses continue to join the Hunters network to mitigate the current uncertainty and challenging economic backdrop; and
-- Strong net asset position and facilities available to continue our growth plans.
Glynis Frew, Chief Executive of Hunters Property Plc, commented:
"We have delivered a good set of results in the first six months. The market has been held back by the wider economic uncertainty and the tenant fee ban. However, we continue to roll out our mitigation strategy as regards the ban which is well underway and is on plan.
We continue to offer a very attractive solution to suitable, independent businesses who see the advantages of joining the Hunters network. In fact, we are experiencing increasingly strong businesses seeing that benefit.
Going forward we believe our exceptional customer service at local level combined with enhanced technical expertise, automated compliance and increased productivity will boost our offering even further. We are investing in our software to advance our strategy to grow and develop the franchise system having recruited a COO with fifteen years' experience in the industry as well as being bolstered by the support of our network in embracing that change.
The continuing work and support displayed by our staff and the franchise network itself is a credit to the Group. I offer, on behalf of the Board, our gratitude to everyone that is involved."
For further details:
Hunters Property Plc Tel: 01904 756 197
Kevin Hollinrake, Chairman
Glynis Frew, Chief Executive Officer
Ed Jones, Chief Financial Officer
Dowgate Capital Limited Tel: 020 3903 7715 David Poutney and James Serjeant (Corporate Broking) SPARK Advisory Partners Limited Tel: 020 3368 3551 Mark Brady and Andrew Emmott (Nominated Adviser)
1 - Based on Rightmove data in Hunters' areas
Chairman's Statement
Overview
On behalf of the Board I am pleased to comment on the half year results for 2019. In this period the Group added another eight branches to the network making a total of 132 in the last five and a half years. Network Income in the six months to June grew by 7% to GBP19.2m (six months to June 2018: GBP17.9m). The average per branch for this first six months has increased 9% to GBP96k (six months to June 2018: GBP88k) in part as a result of the new branches averaging their income at GBP425,000 (2018: GBP186,000) and an income balance of 64:36 sales to lettings for this period (2018: 66:34).
Turnover was maintained at GBP6.6m (2018: GBP6.7m) but with an increase in adjusted operating profit of 30% to GBP1.1m (2018: GBP0.85m) as a result of adoption of the IFRS 16 accounting treatments. Excluding the IFRS adjustments profit has been maintained at GBP857,000. The Group's strategy is to grow a predominantly franchise network and during this period welcomed eight branches to the network (2018: eight) that were existing businesses converting to Hunters. At the end of June, the network stood at 200 (June 2018: 203) branches, of which 188 (2018: 192) are franchised.
Our strategy to invest further in technology to offer an enhanced customer experience whilst managing labour costs is a key area for the future and I am delighted with our additional management and our plans for investment in this regard whilst ensuring we never lose sight of the importance of genuine local area expertise.
We continue to drive professional standards through our industry leading Hunters Training Academy, which has seen almost 5,000 courses completed by the network in the first six months of this year. Our web sessions increased by 5% in the period to July against the same period last year whilst our online appointment booking has grown by 40%. Our customer service rating to June was 96% (to December 2018: 96%), being our 8(th) consecutive year above 90%.
Outlook
Given the market challenges it is very encouraging that our strategies have been able to mitigate against the tenant fee ban and that good quality independent businesses are increasingly seeing the benefit of joining the Hunters network. I am pleased to report that we remain in line with expectations.
We are delighted with these results and we're looking this year to increase our level of branch conversions. Our strong pipeline of opportunities give the management team confidence for H2 and beyond. Consequently, the Board is declaring an increase of 9% in its interim dividend to 0.87p (2018: 0.8p) per share. The dividend will be paid on 18 October 2019 to shareholders on the register on 20 September 2019.
I look forward to updating you again in due course.
Kevin Hollinrake
Chairman
Financial report
Hot Features
Premium
H1 2019 H1 2018
Network Income GBP19.2m GBP17.9m +7%
Sales GBP6,588,000 GBP6,699,000 (2%)
Adjusted operating profit(1) GBP1,111,000 GBP854,000 +30%
Adjusted profit before tax(2) GBP785,000 GBP714,000 +10%
Profit before tax GBP246,000 GBP263,000 (6%)
Cash generated (GBP376,000) (GBP465,000)
Net debt GBP3,224,000 Dec-18 GBP2,363,000
Shareholders' funds GBP7,150,000 Dec-18 GBP7,757,000
Shares in issue 32,502,088 31,827,088
Weighted average number of shares 32,200,650 31,818,043
Earnings after tax GBP209,000 GBP207,000 +1%
Adjusted earnings(3) GBP734,000 GBP646,000 +14%
EPS 0.66p 0.65p +2%
Adjusted EPS 2.30p 2.03p +13%
Dividend 0.87p 0.80p +9%
Branches 200 203 (1%)
1 Adjusted operating profit is before depreciation, amortisation, impairments and profit/loss on disposal of non-current assets, acquisition and share-based payments expenses. Excluding the impact of IFRS 16 Adjusted operating profit for H1 2019 was GBP857,000.
2 Adjusted profit before tax is Adjusted earnings less tax. Excluding the impact of IFRS 16 Adjusted profit before tax for H1 2019 was GBP726,000.
3 Adjusted earnings is profit after tax adjusted to exclude amortisation, and profit/loss on disposal of intangibles, time-value interest costs, acquisition expenses, shared-based payments, other gains and losses and finance income. Excluding the impact of IFRS 16 Adjusted earnings for H1 2019 was GBP681,000.
Revenue
Network income from sales and lettings across the network rose by 7% to GBP19.2m from GBP17.9m for the same period last year. Turnover was slightly down at GBP6.6m (2018: GBP6.7m) as against a market as reported down by 7%(1) .
We continued the strategy of converting independent agents to new franchise branches and in the six month period to June 2019 opened eight (2018: eight). This sets the total number of branches at 200 (2018: 203).
Adjusted operating profit
Adjusted operating profit for the six months to June 2019 was GBP1.1m, an increase of 30% on the same period last year (2018: GBP0.85m), a result of the adoption of IFRS 16. Excluding IFRS16, adjusted operating profit was GBP0.86m.
Adjusted profit before tax
Adjusted profit before tax for the six months ended June 2019 was GBP785,000, an increase of 8% on the equivalent period last year (2018: GBP714,000) reflecting the balance of income generated.
Earnings per share
Basic earnings per share for the six months ended 30 June 2019 was 0.66p (2018: 0.65p). Adjusted earnings per share, excluding amortisation and acquisition costs, finance timing investment income and share-based payment expenses for the six months to June 2019 was 2.30p (2018: 2.03p).
Dividend
The Board declares an interim dividend of 0.87p (Interim 2018: 0.80p) per share, an increase of 9% as part of its policy to pay a progressive dividend whilst maintaining dividend cover of at least two times. The dividend will be payable on 18 October 2019 to shareholders on the register on 20 September 2019.
Cash flow
The Company generated net cash from operations of GBP728,000 during the six months to June 2019. There were further debt drawdowns in the six months to June 2019 totalling GBP516,000, which was used along with the operating cash inflow to fund the opening of the additional franchisee branches during the first six months of 2019.
Liquidity and capital reserves
As at 30 June 2019, the Group's cash balance was GBP1,342,000 (June 2018: GBP1,117,000) with net debt of GBP3,224,000 (December 2018: GBP2,363,000; June 2018: GBP2,997,000).
Risks
The primary risk to the business continues to be the state of the UK property market. Some uncertainty remains in the marketplace, as individuals and businesses take stock and assess the macro-economic outlook. Our balance between franchising, sales and lettings and geographical mix allows us, as these results have demonstrated, to mitigate against this risk.
Ed Jones
Chief Financial Officer
5 September 2019
1 - Based on Rightmove data in Hunters' areas
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2019
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
GBP'000s GBP'000s GBP'000s
Revenue 6,588 6,699 13,982
Ongoing administrative expenses (5,480) (5,845) (11,698)
--------- ---------
Adjusted operating profit 1,108 854 2,284
Depreciation and adjustments
on disposal (238) (57) (80)
Amortisation and adjustments
on disposal (449) (409) (949)
Business combination acquisition
expenses - (2) (13)
Share-based payment expense (11) (33) (62)
--------- --------- -------------
Operating profit 410 353 1,180
Finance income 1 8 13
Finance costs (167) (98) (201)
Other gains and losses 2 - (23)
--------- --------- -------------
Profit before taxation 246 263 969
Taxation (37) (56) (127)
Profit and total comprehensive
for the period 209 207 842
--------- --------- -------------
Basic earnings per share 6 0.66p 0.65p 2.65p
------ ------ -------------------------------------
Diluted earnings per share 6 0.64p 0.63p 2.55p
------ ------ -------------------------------------
The Group has applied IFRS 16 at 1 January 2019, using the modified
retrospective approach. Under this approach, comparative information
is not
restated and the cumulative effect of initially applying IFRS
16 is recognised in retained earnings at the date of initial application.
Refer to note 5 for details on the impact of IFRS 16.
Consolidated Statement of Financial Position
As at 30 June 2019
Notes 30 June 2019 30 June 2018 31 December
2018
GBP'000s GBP'000s GBP'000s
ASSETS
Non-current assets
Intangible assets 3 11,584 11,195 11,214
Investment property 454 - -
Property, plant and
equipment 4 2,179 305 282
Investments 30 50 28
Deferred tax assets 118 124 90
--------------
14,365 11,674 11,614
-------------- --------------- ------------
Current assets
Trade and other receivables 1,570 1,840 1,608
Cash and cash equivalents 1,342 1,117 1,718
-------------- --------------- ------------
2,912 2,957 3,326
-------------- --------------- ------------
Total assets 17,277 14,631 14,940
-------------- --------------- ------------
LIABILITIES
Current liabilities
Borrowings (82) (80) (80)
Lease liabilities (459) (20) (21)
Current tax liabilities (123) (250) (129)
Trade and other payables (1,903) (2,003) (2,068)
(2,567) (2,353) (2,298)
-------------- --------------- ------------
Non-current liabilities
Borrowings (4,484) (4,034) (4,001)
Lease liabilities (2,297) (52) (42)
Other payables (19) (19) (19)
(6,800) (4,105) (4,062)
-------------- --------------- ------------
Provisions for liabilities
Provisions (52) (60) (65)
Deferred tax liabilities (708) (720) (758)
-------------- --------------- ------------
(760) (780) (823)
-------------- --------------- ------------
Total liabilities (10,127) (7,238) (7,183)
-------------- --------------- ------------
Net assets 7,150 7,393 7,757
-------------- --------------- ------------
EQUITY
Share capital 1,300 1,273 1,273
Share premium 4,417 4,107 4,107
Merger reserve 899 899 899
Retained earnings 534 1,114 1,478
Total equity 7,150 7,393 7,757
-------------- --------------- ------------
The Group has applied IFRS 16 at 1 January 2019, using the modified
retrospective approach. Under this approach, comparative information
is not restated and the cumulative effect of initially applying
IFRS 16 is recognised in retained earnings at the date of initial
application. Refer to note 5 for details on the impact of IFRS
16.
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2019
Share Share Merger Retained Total equity
capital premium reserve earnings attributable
to owners
of the parent
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
At 1 January 2018 1,272 4,105 899 1,320 7,596
Profit and total comprehensive income - - - 207 207
Dividends paid - - - (477) (477)
Credit to equity for equity settled share-based
payments - - - 33 33
Issue of share capital 1 2 - - 3
Deferred tax on share-based payment
transactions - - - 31 31
At 30 June 2018 1,273 4,107 899 1,114 7,393
--------- --------- --------- ---------- ---------------
Profit and total comprehensive income - - - 635 635
Dividends paid - - - (255) (255)
Credit to equity for equity settled share-based
payments - - - 29 29
Deferred tax on share-based payment
transactions - - - (45) (45)
At 31 December 2018 1,273 4,107 899 1,478 7,757
--------- --------- --------- ---------- ---------------
Adjustment on initial application of IFRS
16 (note 5) - - - (356) (356)
Profit and total comprehensive income - - - 209 209
Dividends paid - - - (509) (509)
Credit to equity for equity settled share-based
payments - - - 11 11
Issue of share capital 27 310 - (292) 45
Deferred tax on share-based payment
transactions - - - (7) (7)
At 30 June 2019 1,300 4,417 899 534 7,150
--------- --------- --------- ---------- ---------------
Consolidated Statement of Cashflows
For the six months ended 30 June 2019
6 months 6 months Year ended
ended ended 30 December
30 June 30 June 2018
2019 2018
GBP000's GBP000's GBP000's
Cash flow from operating activities
Operating profit 410 353 1,180
Adjustment for:
Depreciation of property, plant and
equipment 238 57 107
Amortisation of intangible assets 461 391 836
(Gain) on disposal of property, plant
and equipment - - (27)
Loss/(profit) on disposal of intangible
assets (12) 18 71
Impairment of intangible assets - - 42
Share options fair value expense 11 33 62
Expensed/(released) element of provisions (17) 5 10
Share exchange transactions - (50) (50)
Costs of acquisitions - 3 -
Changes in working capital:
Increase in trade and other receivables (54) (195) 37
Decrease in trade and other payables (167) (287) (223)
--------- --------- -------------
Cash generated from operations 870 328 2,045
Interest paid (87) (83) (173)
Income tax paid (53) (23) (260)
--------- --------- -------------
Net cash from operating activities 730 222 1,612
--------- --------- -------------
Cash flow from investing activities
Capital expenditure (tangible and
intangible) (907) (747) (896)
Proceeds from sale of tangible and
intangible assets 60 297 311
Business combinations, net of cash
acquired - - (350)
Interest received 1 8 13
Net cash used in investing activities (846) (442) (922)
--------- --------- -------------
Cash flow from financing activities
Dividends paid to shareholders (509) (477) (732)
Repayment of borrowings (45) (325) (370)
Issue of borrowings 516 564 564
Issue of share capital 45 2 2
Repayment of capital element of finance
lease contracts (267) (9) (18)
Net cash (used in)/ from investing
activities (260) (245) (554)
--------- --------- -------------
(Decrease) in cash and cash equivalents (376) (465) 136
Net cash and cash equivalents at
beginning of the period 1,718 1,582 1,582
--------- --------- -------------
Net cash and cash equivalents at
end of period 1,342 1,117 1,718
--------- --------- -------------
Comprised of:
Cash and cash equivalents 1,342 1,117 1,718
Bank overdraft - - -
The Group has applied IFRS 16 at 1 January 2019, using the modified
retrospective approach. Under this approach, comparative information
is not
restated and the cumulative effect of initially applying IFRS 16
is recognised in retained earnings at the date of initial application.
Refer to note 5 for details on the impact of IFRS 16.
Notes to the Financial Statements
For the six months ended 30 June 2019
1. General information
Hunters Property Plc is a Company incorporated in the United Kingdom. The registered address of the Company is Apollo House, Eboracum Way, York, YO31 7RE. The consolidated financial statements (or "financial statements") incorporate the financial statements of the Company and entities (its subsidiaries) controlled by the Company (collectively comprising the "Group").
The principal activity of the Group is the provision of property services to consumers and businesses which include sales, lettings, franchising and related services.
2. Accounting policies
2.1. Basis of preparation
The financial information set out in these interim consolidated financial statements for the six months ended 30 June 2018 is unaudited. The financial information presented are not statutory accounts prepared in accordance with the Companies Act 2006, and are prepared only to comply with AIM requirements for interim reporting. Statutory accounts for the year ended 31 December 2018 on which the auditors gave an audit report which was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union.
New standards, interpretations and amendments adopted by the Group
The Group has initially adopted IFRS 16 Leases from 1 January 2019, replacing the current lease guidance including IAS 17. The standard permits either a full retrospective or a modified retrospective approach for the adoption. The Group has adopted the standard using the modified retrospective approach, with the right of use asset being equal to the lease liability at the point of original recognition. Therefore, the cumulative impact of the adoption is recognised in retained earnings as of 1 January 2019 and the comparatives are not restated.
Included as part of the right of use asset is a separable floor of a property, which accordingly has been accounted for as an investment property. As the property is subject to a fixed life contract which would have previously been accounted for as an operating lease, the directors consider it most appropriate to recognise the property at cost less depreciation. As these financial statements are interim only, the directors have not attempted to quantify the fair value of this investment property.
Further details on the Group's IFRS 16 accounting policy and transitional impact are provided in Note 5.
2.2. Basis of consolidation
The Group financial information consolidates those of the Parent Company and the subsidiaries that the Parent has control of. Control is established when the Parent is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.
Where a subsidiary is acquired/disposed of during the period, the consolidated profits or losses are recognised from/until the effective date of the acquisition/disposal.
All inter-company balances and transactions between group companies have been eliminated on consolidation.
Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by the Group.
2.3. Going concern
When assessing going concern the Directors have looked at the period of 12 months from the date of approval of the interim financial statements. The Directors are satisfied that the Group has sufficient resources to continue in operation and accordingly these interim financial statements have been prepared on a going concern basis.
2.4. Leases
The Group has initially adopted IFRS 16 Leases from 1st January 2019, replacing the current lease guidance including IAS 17. Previously all of the Group's leases were accounted for as operating leases (see Note 29 of the 2018 Group Annual Report and Accounts).
Under IFRS 16 Leases are accounted for on the right of use model. The Income Statement presentation and expense recognition pattern is similar to that required for finance leases by IAS 17 previously adopted by the Group. At inception, the Group assesses whether a contract contains a lease. This assessment involved the exercise of judgement about whether the Group obtains substantially all the
economic benefits from the use of that asset, and whether the Group has the right to direct the use of the asset.
IFRS 16 permits lessees to elect not to apply the recognition requirements to short term leases and leases for which the underlying asset is of low value. The Group has elected not to recognise short term leases of less than one year at inception and low value leases which will continue to be reflected in the Income Statement. This will be the ongoing policy adopted by the Group. There are no right of use assets or lease liabilities recognised for these leases, and the expense is recognised in the Income Statement on a straight line basis.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses an incremental borrowing rate which is the rate of interest that the lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right--of--use asset in a similar economic environment.
The right--of--use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right--of--use assets are depreciated over the shorter period of lease term and useful life of the underlying asset and are now presented within property, plant and equipment.
The Group applies IAS 36 to determine whether a right--of--use asset is impaired and accounts for any identified impairment loss in line with the Group's existing impairment accounting policy.
Under IFRS 16, the straight--line operating lease expense, previously charged under IAS 17 has been replaced with a depreciation charge for the right--of--use assets and interest expense on lease liabilities.
3. Intangible Fixed Assets
Goodwill Software FDG's Brands Customer Total
& Rebrands Lists
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
Cost
At 1 January 2019 4,661 827 2,877 637 4,917 13,919
Additions - separately
acquired - 14 865 - - 879
Disposals - - (60) - - (60)
----------------- --------- ---------
At 30 June 2019 4,661 841 3,682 637 4,917 14,738
--------- --------- ------------ ----------------- --------- ---------
Amortisations and Impairment
At 1 January 2019 35 345 599 271 1,455 2,705
Amortisation charged
for the year - 82 131 32 216 461
Amortisation on disposal - - (12) - - (12)
--------- --------- ------------ ----------------- --------- ---------
At 30 June 2019 35 427 718 303 1,671 3,154
--------- --------- ------------ ----------------- --------- ---------
Carrying amount
At 30 June 2019 4,626 414 2,964 334 3,246 11,584
--------- --------- ------------ ----------------- --------- ---------
At 31 December 2018 4,626 482 2,278 366 3,462 11,214
--------- --------- ------------ ----------------- --------- ---------
Franchise Development Grants ("FDG's") and rebrand costs are externally incurred expenses at the inception of certain contracts with franchisees in order to assist with the transition to using the Hunters brand name. The amounts invested are amortised over the minimum life of the underlying franchise contract, typically 10 to 15 years. The Group recognises an impairment as provision against impairment losses arising from the risk of early terminations of franchise agreements.
4. Property, Plant and Equipment
Right Leasehold Plant Fixtures, Motor Total
of Use Land and machinery fittings vehicles
Asset and Buildings and equipment
(note
5)
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
Cost
At 1 January 2019 - 16 495 209 9 729
Impact of IFRS 16 4,564 - - - - 4,564
Additions - separately
acquired 67 - 15 13 - 95
At 30 June 2019 4,631 16 510 222 9 5,388
--------- --------------- --------------- ------------------------ ---------- ---------
Amortisations and
Impairment
At 1 January 2019 - 13 319 110 5 447
Impact of IFRS 16 2,544 - - - - 2,544
Amortisation charged
for the year 168 - 29 20 1 218
At 30 June 2019 2,712 13 348 130 6 3,209
--------- --------------- --------------- ------------------------ ---------- ---------
Carrying amount
At 30 June 2019 1,919 3 162 92 3 2,179
--------- --------------- --------------- ------------------------ ---------- ---------
At 31 December 2018 - 3 176 99 4 282
--------- --------------- --------------- ------------------------ ---------- ---------
In addition to the above, depreciation of GBP20,000 (2018 - GBPnil) has been charged on investment property.
5. IFRS 16 Leases Transitional Impact
Leases are shown as follows in the balance sheet and Income statement for the period ending 30 June 2019:
1 January 2019 Restated extracts Cumulative adjustment as at 30 June
GBP'000 2019
GBP'000
Consolidated Statement of Financial
Position
Non-current assets
Investment property 474 454
Property, plant and equipment 2,301 1,919
Deferred tax assets 163 69
Current assets
Prepayments 326 (92)
Current liabilities
Obligations under finance leases (458) (437)
Current taxation - 1
Non-current liabilities
Obligations under finance leases (2,434) (2,264)
Equity
Retained earnings 1,122 (350)
Impact of IFRS 16 in six months to 30 GBP'000
June 2019
Consolidated income statement
Rent (240)
Equipment Hire (14)
Depreciation 188
Finance Costs 59
Current taxation (3)
Deferred taxation 4
--------
Total impact on income statement (6)
--------
Short term leases of less than twelve months at inception and low value leases are charged to the Income statement evenly over the life of the lease. In the six month period ending 30 June 2019, GBPnil relating to short period and low value leases were included in Operating expenses.
The liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019. All leases were discounted using an estimated implicit rate of 4.50%, with almost all leases by value relating to properties.
In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:
-- The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
-- Reliance on an assessment of whether leases are onerous immediately before the date of application as an alternative to performing an impairment review.
-- The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The Group has also elected not to reassess whether a contract is, or contains, a lease at the date of initial application. Instead, for contracts entered into before the transition the date the Group relied on its assessment made applying IAS 17 and IFRIC 4 'Determining whether an arrangement contains a lease'.
Included as part of the right of use asset is a separable floor of a property, which accordingly has been accounted for as an investment property. As the property is subject to a fixed life contract which would have previously been accounted for as an operating lease, the directors consider it most appropriate to recognise the property at cost less depreciation. As these financial statements are interim only, the directors have not attempted to quantify the fair value of this investment property.
6. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings 30 June 2019 30 June 2018
GBP'000s GBP'000s
Earnings for the purpose of basic earnings
per share being net profit attributable
to owners of the parent 209 207
Effects of dilutive potential ordinary - -
shares
Earnings for the purposes of diluted earnings
per share 209 207
------------- -------------
Number of shares 30 June 2019 30 June 2018
GBP GBP
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 32,200,650 31,818,043
Effects of dilutive potential ordinary
shares 598,611 1,016,037
Weighted average number of ordinary shares
for the purposes of diluted earnings per
share 32,799,261 32,834,080
------------- -------------
Earnings per share
Pence per weighted average shares 0.66p 0.65p
------ ------
Pence per weighted average diluted shares 0.64p 0.63p
------ ------
The Directors use adjusted earnings before time-value interest, investment revenue, amortisation, and costs of acquisition ("Adjusted Earnings") as a measure of ongoing profitability and performance. The calculated Adjusted Earnings for the current period of accounts is as follows:
Adjusted Earnings per Share 30 June 2019 Excluding 30 June
2019 IFRS 16 2018
GBP'000s GBP'000s GBP'000s
Profit after taxation 209 215 207
Adjusted for:
Time-value interest costs 63 4 3
Investment revenues (1) (1) (8)
Amortisation and profit/loss of
disposal of intangibles 449 449 409
Costs of acquisition 3 3 2
Share-based payment expense 11 11 33
Adjusted Earnings 734 681 646
--------- --------------- ---------
Adjusted Earnings per share
Pence per weighted average shares 2.30p 2.14p 2.03p
------ ------ ------
Pence per weighted average diluted
shares 2.26p 2.10p 1.97p
------ ------ ------
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR XZLFBKKFXBBE
(END) Dow Jones Newswires
September 05, 2019 02:00 ET (06:00 GMT)
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