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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 : 3580A
Hunters Property PLC
29 September 2020
29 September 2020
The information communicated in this announcement contains inside information for
the purposes of Article 7 of EU Regulation 596/2014.
Hunters Property PLC
("Hunters" or "the Group")
Interim Results six months to June 2020
Hunters Property Plc ("Hunters" or the "Company" or the "Group" (AIM: HUNT)), the UK's largest franchised sales and lettings agency brand, is pleased to provide its interim results for six months ended 30 June 2020.
Operational Headlines:
- Strong start to year
- Despite the unprecedented challenges of Covid-19 and reduced turnover, profit improved by 30% against last year
- Opened five new branches and retain a strong openings pipeline - Restructured and reduced our cost base
- Website users increased by 25% and user engagement by 17% against the same period last year. Social media activity saw 8.9m people reached, an increase of 53% against the previous six month period
- Customer satisfaction record at 97% (twelve months to December 2019: 96%)
- Achieved record sales activity in each of June, July and August. August instructions being 38% ahead of last year and leaving a network pipeline ahead +43%
- New CRM software has entered testing and is looking at roll out from Q4 and is expected to deliver significant productivity benefits
Financial Headlines:
- Network Income(1) GBP17.1m (2019: GBP19.2m) - EBITDA GBP1.44m (2019: GBP1.11m) +30% - aPBT GBP1.11m (2019: GBP0.77m) +44% - aEPS 3.06p (2019: 2.30p) +33%
- Cash balance GBP5.6m (31 December 2019: GBP1.3m); net debt GBP2.2m (31 December 2019: GBP3.2m)
Full Year Dividend:
- It is the Board's intention to reinstate dividends with a full year final dividend to be announced with the release of the year-end results.
Kevin Hollinrake, Chairman, said:
"As we announced on 26 May, the year started very well with valuations +17% to February versus the previous year, before the Covid-19 related lockdown reduced sales activity in April alone by 93%. We have been pleased with the early steps we took and our timely decision to implement a range of cost savings including utilisation of Government support such as the Job Retention Scheme and securing a GBP3.5 million facility as a precaution. Our end-user and franchisee customer focus during this period was a key priority and we are delighted with the feedback that we received from them during and after this period. I would like to thank my team and the Network for their incredible hard work and commitment during this time and the executive team for their excellent leadership.
Since the lockdown, we have seen significant levels of activity from those looking to move home and we are in a strong position to weather the uncertainty ahead and are excited with the progress we have made with our new CRM, SKIPA(TM). As we have said many times, technology is important and the Covid-19 pandemic has, in our view, brought that need forward by between three and five years. Our approach has been rewarded this period achieving a 97% Customer Service Rating, a new record (12 months to December 2019: 96%). Our bespoke SKIPA(TM) software is on track for its testing phase and our investment has proven timely. SKIPA(TM) will ensure that our customers and agents benefit from the latest technological user experiences and capabilities and will enhance productivity and efficiencies across our network. It will facilitate a more flexible way of working and automate many normally labour-intensive processes, leaving our agents free to list, sell and let more homes.
Sales activity increased in June, July and August, with August instructions being 38% ahead of last year increasing the network pipeline of sales due for exchange and completion +43%. Enquiries from Independent agents looking to reap the benefits of joining our network have continued and we are pleased to have welcomed five new branches to our fold this year despite the year's disruptions.
Having finished the first half with a strong recovery in trading across our network and operating margins exceeding 2019, we have commenced the second half very positively, with activity levels returning to (and in some areas exceeding) pre-Covid levels and a lower and more resilient cost base. As a result, we are looking forward to the full year results with confidence. However, the Board does not feel it is right to pay an interim dividend at this time given the retention of our unused CBILS facility. On the basis of our current outlook, it is the Board's intention to look to repay the CBILS loan, reinstate its progressive dividend policy and to pay a full year final dividend to accompany the announcement of the year-end results.
I look forward to updating you further in due course."
For further information please contact:
Hunters Property PLC Tel: 01904 756 197 Glynis Frew, Chief Executive Ed Jones, Chief Financial Officer SPARK Advisory Partners Limited Tel: 0113 370 8975 Andrew Emmott and Mark Brady (Nominated Adviser) Dowgate Capital Limited Tel: 020 3903 7715 James Serjeant (Corporate Broking)
Notes:
(1) Network Income is the gross sales and lettings revenue of the Franchisee and Owned branch network.
The Chairman's Statement
Overview
On behalf of the board I am delighted to report Hunters' half year results for 2020 which covers a hugely disrupted period as a result of Covid-19. As previously reported, the Group started the year well, but progress came to an abrupt halt by lockdown with April sales down 93% versus April 2019. However, we took early action that included directors and senior management taking temporary salary reductions ranging from 20-50%, cancelling the 2019 final dividend, securing access to various Government schemes, redundancies and restructuring parts of the group. This rightsizing included franchising two of the group owned branches, a strategy we adopted last year and are looking to progress further. I am pleased to report that we improved EBITDA in this half year by 30% to GBP1.44m (six months to June 2019: GBP1.11m) despite turnover reducing to GBP5.4m (six months to June 2019: GBP6.6m).
Network Income for the first six months of this year stood at GBP17.1m (six months to June 2019: GBP19.2m). Sales took the brunt of the impact of the nationally mandated lockdown period, rebalancing our business for this half year to June at 58/42 Sales/Lettings (six months to June 2019: 64/36). Despite the ban on tenant fees introduced last year, Network Income from lettings reached GBP14.9m for the 12 months to June, a new record which we were delighted with. The improvement in lettings activity has continued since, July beating June, and August activity being 11% higher than August 2019. Our extensive plans for re-opening once lockdown ended on 13 May paid dividends in homes sales where month on month results have beaten all previous records. The income pipeline across the network stands at GBP16.6m (August 2019: GBP11.6m) an increase +43%.
The pandemic necessitated immediate change. Our swiftly adopted technology strategy meant branches could remain open to customers, even if remotely. We supplemented this with in-house support webinars named "Audience With..". This facilitated internal communication; information sharing and best practice training. Engagement has been tremendously positive . We have run 60 webinar sessions this year engaging with 4,715 registrants from our partner network and these will continue. Customers have also engaged online - to the end of June engaged users were up 25% compared to the previous six months and the average online duration was up 17% against the same period last year . Social Media engagement has generated an increase of 53% reaching 8.9m consumers.
Our Accredited Hunters National Qualification and award-winning Training are now fully available online, with 58% of delegates attending online. Individuals and branches have taken advantage of this opportunity. To June we had a further 75 achieving personal accreditation and we retain now 114 fully qualified branches (31 December 2019: 103).
We are pleased that our previous investment in technology was critical for our franchise partners and we are further pleased with the progress of our SKIPA(TM) CRM project as we enter its testing phase. Our intention is to have this rolled-out to the entire network by the end of Q1 2021. Our belief is that Covid-19 has accelerated the rate of technological usage by three to five years. Our approach to offer an enhanced customer experience whilst reducing labour costs and freeing up staff time to drive more revenue will be, we believe, key areas for the future. We have invested in technology-based solutions whilst ensuring we never lose sight of the importance of human contact, genuine local area expertise and making sure we put the customer at the heart of everything we do. To that end we are delighted to announce the achievement of a record 97% Customer Service Rating (twelve months to December 2019: 96%).
The work and support that has been displayed by the staff and the franchise network during what has been a hugely uncertain and difficult time is a credit to this group and the values it stands for. I offer, on behalf of the Board, our thanks and gratitude to everyone that has been involved.
The Group's strategy is to grow a predominantly franchised network and to the end of August, despite the disruption of lockdown, five additional branches have joined the network. As at 31 August the network stood at 209 branches (31 December 2019: 206) of which 198 (31 December 2019: 194) are franchised. We retain a healthy pipeline of prospects and I look forward to announcing further additions to the network later in the year.
Cash / Net debt
We retain cash balances of GBP5.6m (30 December 2019: GBP1.4m) as well as GBP1.1m of unused facilities. Our use of one-off assistance and restructuring caused by the pandemic has now essentially run its course. We have improved net debt to GBP2.2m (31 December 2019: GBP3.2m) driven by operating cash generation of GBP1.76m (six months to June 19: GBP0.9m). The GBP3.5m CBILS included in these positions remains unused, held simply in reserve.
Outlook
Our strategies, given the market challenges have, improved the quality of businesses we have brought on and helped the vast majority of the network weather the storms we have faced. We continue to attract quality independent businesses seeing the enhanced benefit of joining the Hunters network.
Further to our announcement on 26 May, market activity has continued to improve, assisted by the announcement to suspend the application of Stamp Duty on homes up to GBP500,0000. In terms of activity, lettings has held up well and beaten expectations. On the sales side, instructions lifted in June by 19% as against the same month last year. July increased on June and August sits ahead of August last year by +38% in instructions and +71% in sales subject contract ("SSTC"). The Network pipeline stands at a record level, ahead 43%, against the same point last year. Having finished the first half with a strong recovery in trading across our network and operating margins exceeding 2019, we have commenced the second half very positively, with activity levels returning to (and in some areas exceeding) pre-Covid levels and a lower and more resilient cost base. As a result, we are looking forward to the full year results with confidence.
The Board does not feel it right to pay an interim dividend for the time being, having benefitted from support the Government has made available and whilst retaining the CBILS facility, albeit unused. Based on the steps we have taken, current activity and pipeline, and the Company's financial position at the time, it is the Board's intention with the announcement of the full year results to look to repay the CBILS reserve; reinstate its progressive dividend policy and to make payment of a full year final dividend to shareholders. The full year-end results are scheduled to be announced on or around Tuesday 13 April 2021.
I look forward to updating you again in due course.
Kevin Hollinrake
Chairman
Financial report
Hot Features
Premium
H1 2020 H1 2019
Sales GBP5,419,000 GBP6,588,000 (18%)
EBITDA(1) GBP1,440,000 GBP1,108,000 +30%
Adjusted profit before tax(2) GBP1,111,000 GBP771,000 +44%
Profit before tax GBP648,000 GBP246,000 +163%
Cash generated GBP4,298,000 (GBP376,000)
Net debt GBP2,236,000 GBP3,224,000 (31%)
Shareholders' funds GBP8,175,000 GBP7,150,000 +14%
Shares in issue 32,814,588 32,502,088
Weighted average number of
shares 32,778,530 32,200,650
Earnings after tax GBP543,000 GBP209,000 +160%
Earnings after tax, adjusted(3) GBP1,006,000 GBP734,000 +37%
EPS 1.66p 0.66p +152%
Adjusted EPS 3.06p 2.30p +33%
Dividend - 0.87p (100%)
Branches 204 200
1 EBITDA is operating profit before depreciation, amortisation, impairments and profit/loss on disposal of non-current assets, acquisition and share-based payments expenses.
2 Adjusted profit before tax is Adjusted earnings less tax.
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.
Revenue
Network income from sales and lettings across the network reduced by 11% to GBP17.1m compared to GBP19.2m for the same first half period last year due to the impact of the government-imposed lockdown. Consequently, turnover was down at GBP5.4m (2019: GBP6.6m).
EBITDA
EBITDA for the six months to June 2020 was GBP1.44m, an increase of 30% on the same period last year (2019: GBP1.1m ). The reduced turnover was mitigated against by reduced activity costs, bonuses and commissions as well as a reduction in senior manager and director remuneration (as between 20% and 50%). We utilised the Job Retention Scheme limiting then redundancies to 19. We benefitted from waived business rates for our sector and qualified for certain grants that have been made available. Our restructuring enabled services to continue, including online, together with our securing of improved terms from our suppliers which has also benefitted the wider network.
Adjusted profit before tax
Adjusted profit before tax for the six months ended June 2020 was GBP1,111,000, an increase of 44% on the equivalent period last year (2019: GBP771,000).
Earnings per share
Basic earnings per share for the six months ended 30 June 2020 was 1.66p (2019: 0.66p). Adjusted earnings per share, excluding amortisation and acquisition costs, finance timing investment income and share-based payment expenses for the six months to June 2020 was 3.06p (2019: 2.30p), an increase of 33%.
Dividend
The Board does not feel it right to pay an interim dividend for the period at this time having benefitted from support the Government has made available and whilst retaining the CBILS facility, albeit unused. Based on the steps we have taken, current activity and pipeline, and the Company's financial position at the time, it is the Board's intention with the announcement of the full year results to look to repay the CBILS reserve; reinstate its progressive dividend policy and to make payment of a full year final dividend to shareholders. The full year-end results are scheduled to be announced on or around Tuesday 13 April 2021.
Cash flow
The Company generated net cash from operations of GBP4.3m during the six months to June 2020. The Company received loan proceeds of GBP3.5m under the Coronavirus Business Interruption Loan Scheme which it holds in reserve.
Liquidity and capital reserves
As at 30 June 2020, the Group's cash balance was GBP5,606,000 (June 2019: GBP1,342,000) with net debt having improved to GBP2,236,000 (December 2019: GBP3,224,000).
Audit engagement partner continuing to act in that role for one additional year
The Audit Committee have requested that Neil Lawrinson of Mazars LLP continues to act as the audit engagement partner for the audit of Hunters Property Plc for the year ending 31 December 2020. Neil first acted as audit engagement partner for the year ended 31 December 2019 but for the four preceding years had a senior position within the audit engagement team. Under the Financial Reporting Council's Ethical Standard 2016 Neil would normally be expected to rotate off the audit at the end of this five-year period. Given the exceptional circumstances that have befallen 2020, the Audit Committee believe that it is in the interest of audit quality for Neil to continue to act as audit engagement partner for this one further year. The attention of shareholders is drawn to this matter under paragraph 3.16 of Part B of the Ethical Standard 2016.
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 short to medium term macro-economic outlook, including the potential for further disruption due Covid-19. Our balance between franchising, sales and lettings and geographical mix allows us, as these results have demonstrated, to mitigate against this risk and the experience gained in this period will help us weather future market disruptions.
Ed Jones
Chief Financial Officer
29 September 2020
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2020
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2020 2019 2019
GBP'000s GBP'000s GBP'000s
Revenue 5,419 6,588 13,994
Administrative expenses (4,455) (5,480) (11,238)
Other operating income 476 - -
--------- --------------
Adjusted operating profit 1,440 1,108 2,756
Depreciation and profit on
disposal (239) (238) (494)
Amortisation, impairments
and loss on disposal (421) (449) (924)
Business combination and restructuring
expenses (8) - (30)
Share-based payment expense (75) (11) (83)
Operating profit 697 410 1,225
Finance income 138 1 1
Finance costs (194) (167) (336)
Other gains and losses 7 2 10
--------- -------------- --------------
Profit before taxation 648 246 900
Taxation (105) (37) (166)
Profit and total comprehensive
for the period 543 209 734
--------- -------------- --------------
Basic earnings per share 6 1.66p 0.66p 2.27p
------ ------ ------
Diluted earnings per share 6 1.57p 0.64p 2.15p
------ ------ ------
Consolidated Statement of Financial Position
As at 30 June 2020
Notes 30 June 2020 30 June 31 December
2019 2019
GBP'000s GBP'000s GBP'000s
ASSETS
Non-current assets
Goodwill 4 4,626 4,626 4,626
Intangible assets 4 7,276 6,958 7,219
Property, plant and
equipment 5 2,448 2,179 2,726
Investment properties 412 454 433
Investments 61 30 54
Deferred tax assets 196 118 167
-------------------
15,019 14,365 15,225
------------------- --------- ------------
Current assets
Trade and other receivables 1,572 1,570 1,855
Cash and cash equivalents 5,606 1,342 1,308
------------------- --------- ------------
7,178 2,912 3,163
------------------- --------- ------------
Total assets 22,197 17,277 18,388
------------------- --------- ------------
LIABILITIES
Current liabilities
Borrowings (83) (82) (81)
Obligations under leases (431) (459) (424)
Current tax liabilities (140) (123) (145)
Trade and other payables (2,200) (1,903) (2,155)
(2,854) (2,567) (2,805)
------------------- --------- ------------
Non-current liabilities
Borrowings (7,759) (4,484) (4,451)
Obligations under leases (2,575) (2,297) (2,843)
Other payables (19) (19) (19)
(10,353) (6,800) (7,313)
------------------- --------- ------------
Provisions for liabilities
Provisions (40) (52) (40)
Deferred tax liabilities (775) (708) (680)
------------------- --------- ------------
(815) (760) (720)
------------------- --------- ------------
Total liabilities (14,022) (10,127) (10,838)
------------------- --------- ------------
Net assets 8,175 7,150 7,550
------------------- --------- ------------
EQUITY
Share capital 1,313 1,300 1,311
Share premium 4,454 4,417 4,450
Merger reserve 899 899 899
Share option reserve 170 - 170
Retained earnings 1,339 534 720
Total equity 8,175 7,150 7,550
------------------- --------- ------------
Consolidated Statement of Changes in Equity
For the Period Ended 30 June 2020
Share Share Share option Merger reserve Retained Total equity
capital premium reserve earnings attributable
to owners
of the parent
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
At 1 January 2019 1,273 4,107 - 899 1,478 7,757
Effect of IFRS 16
transition - - - (356) (442)
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
--------- --------- ------------- --------------- ---------- ---------------
Effect of IFRS 16
transition - - - - (86) (86)
Deferred tax on IFRS 16
transaction - - - - 75 75
Profit and total
comprehensive income - - - - 525 525
Dividends paid - - - - (284) (284)
Credit to equity for
equity settled
share-based payments - - 83 - (11) 72
Reclassification to
share option
reserve - - 379 - (379) -
Issue of share capital 11 (259) - - 292 44
Exercise of share
options - 292 (292) - - -
Deferred tax on
share-based payment
transactions - - - - 54 54
At 31 December 2019 1,311 4,450 170 899 720 7,550
--------- --------- ------------- --------------- ---------- ---------------
Profit and total
comprehensive income - - - - 543 543
Credit to equity for
equity settled
share-based payments - - - - 75 75
Deferred tax on
share-based payment
transactions - - - - 1 1
Issue of share capital 2 4 - - - 6
At 30 June 2020 1,313 4,454 170 899 1,339 8,175
--------- --------- ------------- --------------- ---------- ---------------
Consolidated Statement of Cashflows
For the period ended 30 June 2020
6 months 6 months Year ended
ended ended 30 December
30 June 30 June 2019
2020 2019
GBP000's GBP000's GBP000's
Cash flow from operating activities
Operating profit 697 410 1,226
Adjustment for:
Depreciation of property, plant
and equipment 248 238 494
Amortisation of intangible assets 421 461 935
(Gain) on disposal of property, (7) - -
plant and equipment
Loss/(profit) on disposal of intangible
assets - (12) (11)
Share-based payment expense 75 11 83
Expensed/(released) element of
provisions - (17) (31)
Changes in working capital:
(Increase)/decrease in trade and
other receivables 283 (54) (368)
Increase/(decrease) in trade and
other payables 45 (167) 90
--------- --------- -------------------
Cash generated from operations 1,762 870 2418
Interest paid (168) (87) (301)
Income tax paid (43) (53) (185)
--------- --------- -------------------
Net cash inflow from operating
activities 1,551 730 1,932
--------- --------- -------------------
Cash flow from investing activities
Capital expenditure (tangible and
intangible) (499) (907) (1,677)
Proceeds from sale of tangible
and intangible assets 1 60 106
Purchase of investments - - (1)
Interest received - 1 1
Net cash used in investing activities (498) (846) (1,571)
--------- --------- -------------------
Cash flow from financing activities
Dividends paid - (509) (793)
Repayment of borrowings (45) (45) (90)
Proceeds of new borrowings 3,467 516 516
Proceeds from issue of own shares 6 45 89
Payment of lease obligations (183) (267) (493)
Net cash from/(used in) financing
activities 3,245 (260) (771)
--------- --------- -------------------
Net Increase/(decrease) in cash
and cash equivalents 4,298 (376) (410)
Cash and cash equivalents at beginning
of the period 1,308 1,718 1,718
--------- --------- -------------------
Cash and cash equivalents at end
of period 5,606 1,342 1,308
--------- --------- -------------------
Notes to the Financial Statements
For the six months ended 30 June 2020
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 2020 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 2019 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.
The interim consolidated financial statements have been prepared using consistent accounting policies as those adopted in the financial statements for the year ended 31 December 2019.
New standards, interpretations and amendments adopted by the Group
The current standards, amendments and interpretations have been adopted in the year and have not had a material impact on the reported results in the group's financial statements:
-- Amendments to the Conceptual Framework for Financial Reporting -- Amendments to IAS 1 and IAS 8 'Definition of Material' -- Amendments to IFRS9, IAS39 and IFRS 7 'Interest rate benchmark reform' -- Amendments to IFRS 3 'Definition of a Business'
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
As at 30 June 2020, the Group has net current assets. The nature of the Group's trade is that there exist intangibles which generate significant cashflows, and are expected to continue doing so. The Group has sufficient unused facilities available in its bank financing.
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus Directors continue to adopt the going concern basis of accounting.
In addition, the Directors have considered the ongoing impact of the Coronavirus and its potential impact on trading activities in the UK. Barring a catastrophic impact on life, the housing market is expected to be broadly resistant to the worst financial downturns, whilst operationally the Group can run efficiently through the use of home-working staff and video conferencing. The Directors therefore do not believe that the short-term impact of this is likely to have a fundamental detrimental effect on the ongoing business.
2.4. Government Grants
During the year, the Group has received COVID-19 specific grants from the UK Government. Grants received include the Job Retention Scheme and The Small Business Grant Fund in addition to financing received as part of the Coronavirus Business Interruption Loans Scheme ("CBILS"). The interest free period relating to the CBILS has been taken into account by recognising the loan at its net present value. Accordingly, interest has been expensed and recognised within interest income.
3. Government Grant Income
As a result of the Covid-19 pandemic, the Group has received a number of support mechanisms from the UK Government which are recognised as grant income, leading to one-off items of income recognised within the Income Statement. These include:
-- GBP296k in respect of income under the Coronavirus Job Retention Scheme, recognised within Other Operating Income in the Income Statement, on the performance basis by reference to the period to which the underlying contract of employment relates.
-- GBP180k in respect of local authority grants, recognised on receipt within Other Operating Income.
-- GBP137k of time-value benefits derived from an interest-free period on a CBILS loan, recognised within finance income in the Income Statement. Of this, GBP15k has been reversed as finance expense during the period, representing the consumption of this benefit.
4. 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 2020 4,661 1,025 4,210 637 4,925 15,458
Additions - 449 29 - - 478
Disposals - - - - - -
----------------- --------- ---------
At 30 June 2020 4,661 1,474 4,239 637 4,925 15,936
--------- --------- ------------ ----------------- --------- ---------
Amortisations and Impairment
At 1 January 2020 35 505 850 335 1,888 3,613
Amortisation charged
for the year - 81 153 8 179 421
Amortisation on disposal - - - - - -
--------- --------- ------------ ----------------- --------- ---------
At 30 June 2020 35 586 1,003 343 2,067 4,034
--------- --------- ------------ ----------------- --------- ---------
Carrying amount
At 30 June 2020 4,626 888 3,236 294 2,858 11,902
--------- --------- ------------ ----------------- --------- ---------
At 31 December 2019 4,626 520 3,360 302 3,037 11,845
--------- --------- ------------ ----------------- --------- ---------
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.
5. Property, plant and equipment
Right Leasehold Plant Fixtures, Motor Total
of Use land and machinery fittings vehicles
Asset and buildings and equipment
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
Cost
At 1 January 2020 4,776 16 530 111 9 5,442
Additions - - 21 - - 21
Disposals (121) - - (1) (3) (125)
At 30 June 2020 4,655 16 551 110 6 5,338
--------- --------------- --------------- ------------------------ ---------- ---------
Depreciation and
Impairment
At 1 January 2020 2,269 14 370 57 6 2,716
Depreciation charged
for the year 190 - 30 6 1 227
Elimination on disposal (50) - - (1) (2) (53)
At 30 June 2020 2,409 14 400 62 5 2,890
--------- --------------- --------------- ------------------------ ---------- ---------
Carrying amount
At 30 June 2020 2,246 2 151 48 1 2,448
--------- --------------- --------------- ------------------------ ---------- ---------
At 31 December 2019 2,507 2 160 54 3 2,726
--------- --------------- --------------- ------------------------ ---------- ---------
In addition to the above, depreciation of GBP21,000 (2019 - GBP21,000) has been charged on 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 2020 30 June 2019
GBP'000s GBP'000s
Earnings for the purpose of basic earnings
per share being net profit attributable
to owners of the parent 543 209
Effects of dilutive potential ordinary - -
shares
Earnings for the purposes of diluted earnings
per share 543 209
------------- -------------
Number of shares 30 June 2020 30 June 2019
GBP GBP
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 32,778,530 32,200,650
Effects of dilutive potential ordinary
shares 1,752,196 598,611
Weighted average number of ordinary shares
for the purposes of diluted earnings per
share 34,530,726 32,799,261
------------- -------------
Earnings per share
Pence per weighted average shares 1.66p 0.66p
------ ------
Pence per weighted average diluted shares 1.57p 0.64p
------ ------
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 30 June
2020 2019
GBP'000s GBP'000s
Profit after taxation 543 209
Adjusted for:
Time-value interest costs 97 63
Investment revenues (excluding grants) (138) (1)
Amortisation 421 449
Costs of business combination and restructuring 8 3
Share-based payment expense 75 11
Adjusted Earnings 1,006 734
--------- ---------
Adjusted Earnings per share
Pence per weighted average shares 3.06p 2.30p
------ ------
Pence per weighted average diluted shares 2.91p 2.26p
------ ------
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END
IR QVLFLBKLEBBQ
(END) Dow Jones Newswires
September 29, 2020 02:00 ET (06:00 GMT)
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