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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Midwich Group Plc | LSE:MIDW | London | Ordinary Share | GB00BYSXWW41 | ORD GBP0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 11.00 | 2.75% | 411.00 | 410.00 | 418.00 | 417.00 | 396.00 | 400.00 | 89,320 | 16:35:10 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Services, Nec | 1.29B | 26.82M | 0.2597 | 16.06 | 430.56M |
From Apr 2019 to Apr 2024
TIDMMIDW
RNS Number : 4339Q
Midwich Group PLC
12 September 2017
12 September 2017
Midwich Group Plc
("Midwich" or "the Group")
Interim Results
Double digit revenue growth and strong net profits across all territories
Midwich, a specialist audio visual and document solutions distributor to the trade market, today announces its interim results for the six-months ended 30 June 2017.
Hot Features
Premium
Note Six Months Ended
30 June 30 June % change
2017 2016
Revenue 211,564 158,349 34%
Gross Profit 32,433 24,641 32%
Gross profit % 15.3% 15.6%
Operating profit 8,729 5,575 57%
Adjusted operating
profit 12 10,533 7,872 34%
Adjusted operating
profit % 5.0% 5.0%
Profit before tax 8,033 3,825 110%
Adjusted profit before
tax 12 10,253 7,563 36%
Adjusted profit before
tax % 4.9% 4.8%
Profit after tax 5,812 2,716 114%
Adjusted profit after
tax 12 8,032 6,438 25%
Basic earnings per
share 7.04p 3.47p 103%
Diluted earnings per
share 7.03p 3.47p 103%
Adjusted basic earnings
per share 12 9.84p 8.71p 13%
Adjusted diluted earnings
per share 9.82p 8.71p 13%
Interim Dividend per
Share 13 4.2p 1.5p 36%
Financial Highlights
-- Revenue increased by 33.6% to GBP211.6 million (27.9 % on constant currency basis) -- Gross margin of 15.3%, in line with full year 2016
-- Adjusted operating profit increased by 33.8 % to GBP10.5 million (27.8 % on constant currency basis)
-- Adjusted profit before tax improved by 35.6% to GBP10.3 million (29.5 % on constant currency basis)
-- Interim dividend declared of 4.17 pence per share (2016: 1.53 pence per share), an increase of 36.3% on a like for like basis.
Operational Highlights
-- Recent acquisitions have performed ahead of expectations -- Positive full year effect of new distribution agreements -- Continued growth in the audio visual business
Post-Period Highlights
-- Acquisition of Gebroeders van Domburg B.V. a Netherlands based audio visual distributor
Stephen Fenby, Managing Director of Midwich Group Plc, commented:
"The Group has performed strongly in the first six months of the year across all geographies with robust organic growth and contributions from recent acquisitions Holdan and Earpro.
"Our business in large format displays continues to grow strongly and we are pleased with progress in the developing specialist broadcast and audio segments.
"Profit margins have been maintained and cash generation is in line with our expectations at this stage of the year. We are pleased to declare an interim dividend of 4.17 pence per share, 36% ahead of prior year on a like for like basis.
"The strong performance reported in the first half year coupled with indications of positive sales momentum and strong contributions from recent acquisitions gives the Board confidence in reporting results for the full year in line with our expectations, which were upgraded at the time of the Group's trading statement on 21 July 2017."
Enquiries:
Midwich Group Plc Stephen Fenby, Managing Director +44 (0) 1379 Anthony Bailey, Finance Director 649 200 FTI Consulting Oliver Winters / Alex Beagley +44 (0) 20 3727 / George Robinson 1000 Investec Bank plc James Ireland / Carlton Nelson +44 (0) 20 7597 / James Rudd 5970
Notes to editors
Midwich is a specialist AV and document solutions distributor to the trade market, with operations in the UK and Ireland, France, Germany, Iberia, and Australasia. The Group's long-standing relationships with over 300 vendors, including blue-chip organisations such as Samsung, LG, Epson, and NEC, support a comprehensive product portfolio across major audio visual categories such as large format displays, projectors, digital signage and printers. The Group operates as the sole or largest in-country distributor for a number of its vendors in their respective product sets. The Directors attribute this position to the Group's technical expertise, extensive product knowledge and strong customer service offering built up over a number of years. The Group has a large and diverse base of approximately 10,000 customers, most of which are professional AV integrators and IT resellers serving sectors such as corporate, education, retail, residential and hospitality. Although the Group does not sell directly to end users, it believes that the majority of its products are used by commercial and educational establishments rather than consumers.
Initially a UK only distributor, the Group now has over 600 employees across the UK and Ireland, Germany, France, Iberia, and Australasia. In the six months to 30 June 2017, 38 per cent of the Group's revenues were derived from outside the UK. A core component of the Group's growth strategy is further expansion of its international operations and footprint into strategically targeted jurisdictions.
For further information, please visit www.midwichgroupplc.com
MANAGING DIRECTOR'S REPORT
Overview
The Group has performed strongly in the first six months of 2017. Our business continues to develop in all markets, with double digit revenue growth being achieved in all territories, including the UK and Ireland - our most established segment.
Recent acquisitions have performed ahead of expectations, and have helped to grow our presence in the specialist broadcast and audio markets.
We saw strong growth in the displays (particularly large format and interactive displays), broadcast, audio and technical product categories.
Strategy
The Group's strategy for growth continues to be both organic and inorganic, reflecting the contributors to the successful growth track record in recent years.
The Group's organic growth strategy is focused on the provision of market leading support to its customers and vendors. As a distributor, the Group neither develops product nor does it sell to the end-users of those products. It is aware that both its vendors and customers generally have a choice of distribution partner. The Group's expertise is the provision of services which provide the greatest assistance to vendors in pushing product out into the market, and to help customers provide the highest level of support to their end-users.
Underpinning the Group's growth strategy is its success in sourcing, executing and integrating its chosen acquisitions. The Group takes a disciplined approach to acquisitions, seeking to add capital value without an adverse impact on the existing business. Acquisitions remain a fundamental aspect of the Group's strategy and it continues to pursue a strong pipeline of opportunities.
Acquisitions
On 27 March 2017, the Group completed the acquisition of EarPro S.A. ("Earpro"), a value-added distributor of audio, video and lighting solutions in Spain and Portugal. Integration of the business is progressing well and we are pleased with its performance since acquisition.
Post period end, on 6 September 2017 the Group completed the acquisition of Gebroeders van Domburg , a market leading specialist audio visual and lighting distributor in the Netherlands. The Group's robust balance sheet means it is well placed to continue its buy and build strategy both in new and existing territories.
Trading and Financial Review
Group turnover increased by 33.6% to GBP211.6 million for the period (H1 2016: GBP158.3 million). Significant double digit growth was achieved in all territories with Germany and Australasia growing at the fastest rates of 47% and 44% respectively. Our business in Germany has continued to gain share in the projection category and to develop its business in the large format and technical categories. Our businesses in Australasia benefited from the introduction of new technical vendors and growth in existing vendors. The UK and Ireland business grew at 27% with Holdan, which was acquired in September 2016, performing strongly. Our business in France grew by 18% driven particularly by the projection category. Earpro had a strong first quarter, contributing nearly GBP5 million in sales, which was above the Board's original expectations.
The Group's gross margin for the half year fell by 0.3% to 15.3%, in line with the full year result for 2016. The gross margin in the UK business was 0.6% lower than in the first half of last year, partly as a result of one-off high margin document solutions sold in the prior period and partly due to the impact of product mix. The gross margins in Germany and France were also slightly below prior year as a result of product mix effects. Australasia grew its gross margin strongly as it extended its technical vendor base. The gross margin of the Earpro business in Iberia contributed positively to the overall Group result.
Operating profit increased by 56.6% to GBP8.7 million (H1 2016: GBP5.6 million). Adjusting for acquisition costs and amortisation, operating profit of GBP10.5 million represented growth of 33.8%. Adjusted operating profit increased by 28% in the UK & Ireland with particularly strong contributions from Holdan and the PSCo rental business. Operating profit in Australasia grew by nearly 70% and in Germany by nearly 20%. The only territory which experienced a fall in operating profit was France where we have invested in additional resources to support future growth.
Group turnover and adjusted operating profit both grew by 28% on a constant currency basis in the first half. The Group benefited from movements in currency in the first half and the positive impact on adjusted operating profit was approximately GBP0.4 million.
Taxation
The tax charge for the period was GBP2.2 million (H1 2016: GBP1.1 million) which represents an effective current tax rate of 22% (H1 2016: 21%) based on adjusted operating profits less net interest costs. The charge in H1 2017 includes a prior year debit of GBP0.1 million. The charge in 2016 included prior year credits amounting to GBP0.3 million.
Financial Position
The Group had a net cash inflow from operations before tax of GBP3.5 million for the period (H1 2016: outflow GBP1.2 million). The first half year is traditionally a more working capital intensive period than the full year and this performance was in line with management expectations.
Net debt at 30 June 2017 was GBP22.8 million (GBP15.0 million at 31 December 2016).
Dividend
The Board is pleased to declare an interim dividend of 4.17 pence per share (H1 2016: 1.53 pence per share for the shortened interim period after the IPO), which will be paid on 27 October 2017 to those shareholders on the Company's register as at 22 September 2017.
Outlook
The strong performance reported in the first half year coupled with indications of positive sales momentum and strong contributions from recent acquisitions gives the Board confidence in reporting results for the full year in line with our expectations, which were upgraded at the time of the Group's trading statement on 21 July 2017 .
Stephen Fenby
Managing Director
Unaudited Consolidated Income Statement for the 6 months ended 30 June 2017
Note 30 June 30 June 31 December 2016
2017 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 211,564 158,349 370,142
Cost of sales (179,131) (133,708) (313,681)
---------- ---------- -----------------
Gross profit 32,433 24,641 56,461
Distribution costs (20,841) (16,001) (35,520)
Total administrative expenses (4,364) (4,398) (9,234)
Other operating income 1,501 1,333 2,780
---------- ---------- -----------------
Operating profit 8,729 5,575 14,487
Comprising
------------------------------------------------------- ----- ---------- ---------- -----------------
Adjusted operating profit 10,533 7,872 18,542
Costs of flotation - (1,018) (1,041)
Share based payments (136) - (75)
Costs of acquisitions (146) - (259)
Amortisation (1,522) (1,279) (2,680)
------------------------------------------------------- ----- ---------- ---------- -----------------
8,729 5,575 14,487
Finance income 14 - 1
Finance costs 5 (710) (1,750) (2,386)
---------- ---------- -----------------
Profit before taxation 8,033 3,825 12,102
Taxation (2,221) (1,109) (3,542)
---------- ---------- -----------------
Profit after taxation 5,812 2,716 8,560
Profit for the period/financial year attributable to:
The company's equity shareholders 5,595 2,461 8,216
Non-controlling interest 217 255 344
---------- ---------- -----------------
5,812 2,716 8,560
========== ========== =================
Basic earnings per share 3 7.04p 3.47p 10.92p
========== ========== =================
Diluted earnings per share 3 7.03p 3.47p 10.91p
========== ========== =================
Unaudited Consolidated Statement of Comprehensive Income for 6 months ended 30 June 2017
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit for the
period/financial
year 5,595 2,461 8,216
Other comprehensive
income - items
that may subsequently
be reclassified
to profit / loss
Foreign exchange
gains on consolidation 435 1,261 1,707
---------- ---------- ------------
Other comprehensive
income for the
period/financial
year, net of tax 435 1,261 1,707
---------- ---------- ------------
Total comprehensive
income for the
period/financial
year attributable
to the Company's
equity shareholders 6,030 3,722 9,923
========== ========== ============
Total comprehensive
income for the
period/financial
year attributable
to non-controlling
interests 217 255 344
========== ========== ============
Total comprehensive
income for the
period/financial
year 6,247 3,977 10,267
Unaudited Consolidated Balance Sheet as at 30 June 2017
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Goodwill 5,568 3,303 4,557
Intangible assets 19,725 18,370 18,820
Property, plant
and equipment 5,978 3,424 5,035
---------- ---------- ------------
31,271 25,097 28,412
Current assets
Inventories 56,514 40,351 48,142
Trade and other
receivables 61,862 48,015 52,545
Cash and cash equivalents 20,597 14,880 20,164
---------- ---------- ------------
138,973 103,246 120,851
Current liabilities
Trade and other
payables (64,786) (51,870) (58,299)
Financial instruments (734) - (698)
Deferred consideration (4,939) - (1,554)
Borrowings (43,426) (28,737) (35,131)
Current tax (2,260) (1,995) (2,062)
---------- ------------
(116,145) (82,602) (97,744)
---------- ---------- ------------
Net current assets 22,828 20,644 23,107
---------- ---------- ------------
Non-current liabilities:
Financial instruments (2,853) - (1,441)
Deferred consideration - - (72)
Finance lease payables - (26) -
Deferred tax (3,817) (3,378) (3,414)
---------- ---------- ------------
(6,670) (3,404) (4,927)
---------- ---------- ------------
Net assets 47,429 42,337 46,592
========== ========== ============
Capital and reserves
Share capital 794 794 794
Share premium 25,855 25,857 25,855
Share based payment
reserve 233 - 84
Investment in own
shares (5) (5) (5)
Retained earnings 19,753 15,220 19,765
Translation reserve 1,152 271 717
Put option reserve (2,803) - (1,770)
Capital redemption
reserve 50 50 50
Other reserve 150 150 150
---------- ---------- ------------
Equity attributable
to owners of parent 45,179 42,337 45,640
Non-controlling
interests 2,250 - 952
---------- ---------- ------------
Total equity 47,429 42,337 46,592
========== ========== ============
Unaudited Consolidated Statement of Changes in Equity for 6 months ended 30 June 2017
For the period ended 30 June 2017
Equity
attributable
to
Investment Share owners
Share in based Retained Put Capital of
Share own payment Translation option redemption Other the Non-controlling
capital premium shares reserve earnings reserve reserve reserve reserve parent interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance
at 1 January
2017 794 25,855 (5) 84 19,765 717 (1,770) 50 150 45,640 952 46,592
Profit
for the
period - - - - 5,595 - - - - 5,595 217 5,812
Other
comprehensive
income - - - - - 435 - - - 435 - 435
---------------- --------
Total
comprehensive
income
for the
period - - - - 5,595 435 - - - 6,030 217 6,247
Share
based
payments - - - 136 - - - - - 136 - 136
Deferred
tax on
share
based
payments - - - 13 - - - - - 13 - 13
Acquisition
of Earpro
SA (note
7) - - - - - - (1,033) - - (1,033) 1,081 48
Dividends
paid - - - - (5,607) - - - - (5,607) - (5,607)
Balance
at 30
June 2017
(Unaudited) 794 25,855 (5) 233 19,753 1,152 (2,803) 50 150 45,179 2,250 47,429
======== ======== =========== ======== ========= ============ ======== =========== ========= ============= ================ ========
For the period ended 30 June 2016
Share Share Investment Retained Translation Put Capital Other Equity Non-controlling Total
capital premium in earnings reserve option redemption reserve attributable interests
own reserve reserve to owners
shares of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance
at 1 January
2016 1,398 - (1,000) 8,652 (990) (1,735) 50 1,145 7,520 4,858 12,378
Profit
for the
period - - - 2,461 - - - - 2,461 255 2,716
Other
comprehensive
Income - - - - 1,261 - - - 1,261 - 1,261
-------- -------- ----------- --------- ------------ -------- ----------- -------- ------------- ---------------- --------
Total
comprehensive
income
for the
period - - - 2,461 1,261 - - - 3,722 255 3,977
Bonus
share
issue* 663 - (5) (663) - - - 5 - - -
Share
capital
reduction* (1,392) - 1,000 1,392 - - - (1,000) - - -
Issue
of shares* 125 26,647 - - - - - - 26,772 - 26,772
Costs
of share
issue* - (790) - - - - - - (790) - (790)
Acquisition
of
non-controlling
interest
(note
8) - - - 3,378 - 1,735 - - 5,113 (5,113) -
-------- -------- ----------- --------- ------------ -------- ----------- -------- ------------- ---------------- --------
Transactions
with owners (604) 25,857 995 4,107 - 1,735 - (995) 31,095 (5,113) 25,982
-------- -------- ----------- --------- ------------ -------- ----------- -------- ------------- ---------------- --------
Balance
at 30
June 2016
(Unaudited) 794 25,857 (5) 15,220 271 - 50 150 42,337 - 42,337
======== ======== =========== ========= ============ ======== =========== ======== ============= ================ ========
*See note 6
For the year ended 31 December 2016
Equity
attributable
to
Investment Share owners
Share in based Put Capital of
Share own payment Retained Translation option redemption Other the Non-controlling
capital premium shares reserve earnings reserve reserve reserve reserve parent interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance
at 1 January
2016 1,398 - (1,000) - 8,652 (990) (1,735) 50 1,145 7,520 4,858 12,378
Profit
for the
year - - - - 8,216 - - - - 8,216 344 8,560
Other
comprehensive
income - - - - - 1,707 - - - 1,707 - 1,707
---------------- --------
Total
comprehensive
income
for the
year - - - - 8,216 1,707 - - - 9,923 344 10,267
Bonus
share
issue* 663 - (5) - (663) - - - 5 - - -
Share
capital
reduction* (1,392) - 1,000 - 1,392 - - - (1,000) - - -
Issue
of shares* 125 26,647 - - - - - - - 26,772 - 26,772
Costs
of share
issue* - (792) - - - - - - - (792) - (792)
Acquisition
of
non-controlling
interest
(note
8) - - - - 3,378 - 1,735 - - 5,113 (5,113) -
Share
based
payments - - - 75 - - - - - 75 - 75
Deferred
tax on
share
based
payments - - - 9 - - - - - 9 - 9
Acquisition
of subsidiary - - - - - - (1,770) - - (1,770) 863 (907)
Dividends
paid - - - - (1,210) - - - - (1,210) - (1,210)
Balance
at 31
December
2016 (Audited) 794 25,855 (5) 84 19,765 717 (1,770) 50 150 45,640 952 46,592
======== ======== =========== ======== ========= ============ ======== =========== ========= ============= ================ ========
*See note 6
Unaudited Consolidated Cashflow Statement for 6 months ended 30 June 2017
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash inflow from operating
activities
Profit before tax 8,033 3,825 12,102
Depreciation 733 604 1,229
Amortisation 1,522 1,279 2,680
(Gain) / loss on disposal
of assets (153) (85) 183
Share based payments 136 - 75
Foreign exchange (gains)/losses 154 (15) 216
Finance income (14) - (1)
Finance costs 710 1,750 2,386
---------- ---------- ------------
Adjusted profit from operations
before changes in working
capital 11,121 7,358 18,870
Increase in inventories (6,319) (2,502) (8,447)
Increase in trade and other
receivables (5,114) (5,308) (5,887)
(Decrease) / increase in
trade and other payables 3,830 (755) 3,367
---------- ---------- ------------
Cash flow from operations 3,518 (1,207) 7,903
Income tax paid (2,186) (1,664) (4,281)
---------- ---------- ------------
Net cash inflow / (outflow)
from operating activities 1,332 (2,871) 3,622
---------- ---------- ------------
Cash flow from investing
activities
Acquisition of businesses (4,986) - (3,276)
Cash acquired within business
combination 2,972 - 367
Purchase of intangible
assets (43) (126) (186)
Purchase of plant and equipment (1,820) (606) (2,278)
Proceeds on disposal of
plant and equipment 368 371 546
Interest received 14 - 1
---------- ---------- ------------
Net cash outflow from investing
activities (3,495) (361) (4,826)
---------- ---------- ------------
Net cash from financing
activities
Acquisition of non-controlling
interest - (7,454) (7,454)
Deferred consideration
paid (11) - (11)
Issue of shares net of
issue costs - 25,982 25,980
Dividends paid (5,607) - (1,210)
Invoice financing inflows
/ (outflows) 7,380 (3,688) 256
Issue of loan to related
party - - (212)
Repayment received of related
party loan - - 212
Repayment of loans (14) (13,424) (13,696)
Interest paid (295) (390) (657)
Interest paid on finance
leases - (10) (16)
Capital element of finance
lease payments (65) (219) (527)
---------- ---------- ------------
Net cash inflow from financing
activities 1,388 797 2,665
Net (decrease) / increase
in cash and cash equivalents (775) (2,435) 1,461
Cash and cash equivalents
at beginning of period/year 17,201 14,351 14,351
Effects of exchange rate
changes 280 1,222 1,389
---------- ---------- --------------
Cash and cash equivalents
at end of period/year 16,706 13,138 17,201
========== ========== ==============
Comprising:
Cash at bank 20,597 14,880 20,164
Bank overdrafts (3,891) (1,742) (2,963)
-------- -------- --------
16,706 13,138 17,201
======== ======== ========
Notes to the Interim Consolidated Financial Information
1. GENERAL
The interim financial information for the period to 30 June 2017 is unaudited and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.
They do not include all the information required in annual financial statements in accordance with IFRS, and should therefore be read in conjunction with the consolidated financial statements for the year ended 31 December 2016.
2. ACCOUNTING POLICIES
The interim financial information in this report has been prepared on the basis of the accounting policies set out in the audited financial statements for the year ended 31 December 2016, which complied with International Financial Reporting Standards as adopted for use in the European Union ("IFRS").
The financial information has been prepared on the basis of IFRS that the Directors expect to be applicable as at 31 December 2017.
The Directors have adopted the going concern basis in preparing the financial information. In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant available information about the foreseeable future.
The statutory accounts for the year ended 31 December 2016, which were prepared under IFRS, have been delivered to the Registrar of Companies. The auditors reported on these accounts; their report was unqualified; did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006, and did not include reference to any matters to which the auditor drew attention by way of emphasis.
3. EARNINGS PER SHARE
Basic earnings per share is based on the profit after tax for the period/year and the weighted average number of shares in issue during the period/year. Preference shares are non-participating and therefore excluded.
Diluted earnings per share is calculated by adjusting the average number of shares in issue during the period to assume conversion of all dilutive potential ordinary shares. Since July 2016, the Group has issued potentially dilutive shares relating to the long term incentive plan available to senior management and key members of staff.
June June December
2017 2016 2016
Profit attributable to equity holders of the parent Company
(GBP'000) 5,595 2,461 8,216
Weighted average number of shares in issue* 79,448,200 71,000,398 75,247,380
----------- ----------- -----------
Basic earnings per share 7.04p 3.47p 10.92p
=========== =========== ===========
*The weighted average number of shares for the purpose of earnings per share has been based on the assumed number of shares as if the bonus issue on 6 May 2016 had occurred at the beginning of the earliest period presented.
Taking the Group's LTIP's into consideration in respect of the Group's weighted average number of ordinary shares for the purposes of diluted earnings per share, is as follows:
June June December
2017 2016 2016
Number of shares
Dilutive (potential dilutive) effect of share options 134,338 - 93,852
----------- ----------- -----------
Weighted average number of ordinary shares for the purposes of
diluted earnings per share 79,582,538 71,000,398 75,341,232
Diluted earnings per share 7.03p 3.47p 10.91p
=========== =========== ===========
4. SEGMENTAL REPORTING
June 2017
UK &
GBP'000 Ireland France Iberia(1) Germany Australasia Total
Revenue 139,420 17,123 4,927 35,495 14,599 211,564
Gross profit 22,090 2,165 1,316 4,327 2,535 32,433
Gross profit
% 15.8% 12.6% 26.7% 12.2% 17.4% 15.3%
Adjusted operating
profit 7,138 260 588 1,586 961 10,533
Costs of acquisitions (146) - - - - (146)
Share based
payments (136) - - - - (136)
Amortisation (1,215) (15) (71) (196) (25) (1,522)
--------- --------- ---------- -------- ------------ ----------
Operating profit 5,641 245 517 1,390 936 8,729
Net interest (696)
----------
Profit before
tax 8,033
==========
Segment assets 115,353 11,965 12,909 20,621 9,396 170,244
Segment liabilities (95,931) (10,312) (4,288) (6,303) (5,981) (122,815)
Depreciation
and amortisation 1,788 94 75 212 86 2,255
UK ROW Total
Non-current
assets 23,173 8,098 31,271
(1) Iberian subsidiary acquired 27 March 2017
June 2016
UK &
GBP'000 Ireland France Germany Australasia Total
Revenue 109,532 14,536 24,157 10,124 158,349
Gross profit 17,961 1,915 3,220 1,545 24,641
Gross profit
% 16.4% 13.2% 13.3% 15.3% 15.6%
Adjusted operating
profit 5,595 357 1,349 571 7,872
Costs of flotation (1,018) - - - (1,018)
Amortisation (1,069) (15) (190) (5) (1,279)
--------- -------- -------- ------------ ---------
Operating profit 3,508 342 1,159 566 5,575
Net interest (1,750)
---------
Profit before
tax 3,825
=========
Segment assets 93,520 10,561 17,799 6,463 128,343
Segment liabilities (65,557) (9,701) (5,899) (4,849) (86,006)
Depreciation
and amortisation 1,539 63 207 74 1,883
UK ROW Total
Non-current
assets 20,615 4,482 25,097
December 2016
UK &
GBP'000 Ireland France Germany Australasia Total
Revenue 246,972 33,414 64,258 25,498 370,142
Gross profit 39,319 4,526 8,495 4,121 56,461
Gross profit
% 15.9% 13.5% 13.2% 16.2% 15.3%
Adjusted operating
profit 12,001 1,059 3,881 1,601 18,542
Costs of flotation (1,041) - - - (1,041)
Costs of acquisitions (247) - - (12) (259)
Share based
payments (75) - - - (75)
Amortisation (2,230) (33) (390) (27) (2,680)
--------- -------- -------- ------------ ----------
Operating profit 8,408 1,026 3,491 1,562 14,487
Net interest (2,385)
----------
Profit before
tax 12,102
==========
Segment assets 109,614 11,303 19,634 8,712 149,263
Segment liabilities (80,498) (9,878) (6,548) (5,747) (102,671)
Depreciation
and amortisation 3,197 139 425 148 3,909
UK ROW Total
Non-current
assets 22,129 6,283 28,412
5. FINANCE COSTS
June 2017 June 2016 December 2016
GBP'000 GBP'000 GBP'000
Interest on overdraft and invoice discounting 282 305 604
Interest on finance leases - 20 27
Dividend on preference shares treated as borrowings - (14) (14)
Interest on other loans 12 79 40
Interest & fair value movement on put option liability 416 1,360 1,729
710 1,750 2,386
========== ========== ==============
6. SHARE CAPITAL
The total allotted share capital of the company is:
Allotted, issued and fully paid
June 2017 June 2016 December 2016
Classed as equity: Number GBP'000 Number GBP'000 Number GBP'000
Ordinary shares of GBP0.01 each 79,448,200 794 79,448,200 794 79,448,200 794
Total equity 79,448,200 794 79,448,200 794 79,448,200 794
=========== ======== =========== ======== =========== ========
Share transactions effected during the 2017 interim period:
No shares have been issued during the 6 months ended 30 June 2017.
Share transactions effected during the 2016 interim period (see notes):
Number of shares
Write
down
Buy of
back Preference,
of Redemption B3 Re-designation
Issue B5 of and to Bonus Issue
of Ordinary Preference B5 Ordinary share of Closing
Opening B1 shares shares shares shares issue Ordinary 30
1 January Ordinary 4 22 29 29 29 shares June
2016 shares* February April April April April 3 May 2016
Ordinary
shares
of GBP0.01 - - - - - 669,482 66,278,718 12,500,000 79,448,200
Ordinary
shares
of GBP1 396,000 - - - - (396,000) - - -
Preference
shares
of GBP1 4,123,746 - - (3,123,746) (995,193) (4,807) - - -
A Ordinary
shares
of GBP0.01 52,500 - - - - (52,500) - - -
B1 Ordinary
shares
of GBP0.01 174,474 36,450 - - - (210,924) - - -
B3 Ordinary
shares
of GBP0.01 7,179 - - - (4,331) (2,848) - - -
B5 Ordinary
shares
of GBP0.01 14,358 (7,179) - (4,776) (2,403) - - -
4,768,257 36,450 (7,179) (3,123,746) (1,004,300) - 66,278,718 12,500,000 79,448,200
---------- --------- --------- ------------ ------------ --------------- ----------- ----------- -----------
Value of shares
GBP'000
Write
down
of
Preference,
Redemption B3 Re-designation
Issue Share of and to Bonus Issue
Opening of capital Preference B5 Ordinary share of Closing
1 B1 reduction shares shares shares issue Ordinary 30
January Ordinary 13 22 29 29 29 shares June
2016 shares* April April April April April 3 May 2016
Ordinary
shares
of GBP0.01 - - - - - 6 663 125 794
Ordinary
shares
of GBP1 396 - (392) - - (4) - - -
Preference
shares
of GBP1 4,124 - (990) (3,124) (10) (0) - - -
A Ordinary
shares
of GBP0.01 - - - - - - - - -
B1 Ordinary
shares
of GBP0.01 2 - - - - (2) - - -
4,522 - (1,382) (3,124) (10) - 663 125 794
-------- --------- ---------- ----------- ------------ --------------- ------ --------- --------
* Issue of B1 Ordinary shares took place on the following dates at a price of GBP21.20 per share:
13 January 10,000
18 January 20,000
4 February 3,700
10 March 2,750
-------
36,450
-------
Notes on share capital movements during 2016
As explained further in the admission document, the following share capital changes (as illustrated in the above tables) took place during the period:
1. Issue of B1 Ordinary shares at GBP21.20 per share as noted above, creating share premium of GBP772,000
2. Buy back of 7,179 B5 Ordinary shares on 4 February 2016 for cancellation at par value
3. Share capital reduction on 13 April 2016, reducing the equity Preference share capital and Ordinary share capital from GBP1.00 per share nominal value to GBP0.01 per share nominal value
4. Redemption of Preference shares classified as a financial liability on 22 April 2016, settling the financial liability in full
5. Re-designation of the Preference shares', B3 shares' and B5 shares' percentages on 29 April 2016, and subsequently re-designation of these as Deferred shares, pursuant to which these Deferred shares were transferred in favour of the Company for nil consideration and then cancelled.
6. Re-designation of all remaining categories of shares as GBP0.01 Ordinary shares on 29 April 2016
7. Bonus share issue on 29 April 2016 in the proportion of 99 Ordinary shares for each existing Ordinary share
8. Placing of new shares on 3 May 2016 (date of admission to the AIM Market) at GBP2.08 per share, creating share premium of GBP25,875,000 less issue costs of GBP790,000
All reductions in value of existing share capital have created additional distributable reserves which have been recorded in retained earnings. The bonus issue of ordinary shares has used some of the additional distributable reserves created by the preceding share capital reductions.
Rights and obligations
Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights. They do not confer any rights of redemption.
Employee benefit trust
As a result of the share changes described in the share capital movements notes 3,5,6 and 7 above, the employee benefit trust was allocated 480,700 ordinary shares. On 30 June 2016, 136,000 of these shares were distributed to the SIP trust, leaving 344,700 ordinary shares in the employee benefit trust as at 31 December 2016.
In May 2017 a further 105,000 were distributed to the SIP trust, leaving 239,700 GBP0.01 Ordinary shares in the employee benefit trust at 30 June 2017.
7. BUSINESS COMBINATIONS
Acquisitions have been completed by the Group during the period to increase scale, broaden its addressable market and widen the product offering.
Subsidiaries acquired:
Principal activity Date Proportion Fair value
of acquisition of voting of consideration
equity interest transferred
acquired GBP'000
(%)
-------------------- ----------------- ----------------- ------------------
Distribution
of audio visual
Earpro products to trade 27 March
SA customers 2017 88.50% 8,311
Fair value of consideration transferred
Acquisition
of Earpro
2017 SA
GBP'000
Cash 4,986
Deferred contingent consideration 3,325
Total 8,311
------------
Acquisition costs of GBP146,000 were expensed to the income statement in relation to the acquisition of Earpro SA.
2017 Acquisition of Earpro SA
GBP'000
Non-current assets
Goodwill 1,009
Intangible assets - key supplier exclusivity 1,488
Intangible assets - customer relationships 740
Intangible assets - brand name 104
Intangible assets - other 58
Plant and equipment 66
Deferred tax asset 4
Current assets
Inventories 2,053
Trade and other receivables 4,004
Cash and cash equivalents 2,972
Financial Investments 201
Current liabilities
Trade and other payables (2,724)
Non-current liabilities
Deferred tax (583)
Non-controlling interests (1,081)
8,311
-------------------------
Goodwill acquired in 2017 relates to workforce, synergies and sales know how.
Goodwill arising on the acquisition of Earpro SA has been allocated to the Iberian operating segment and is not expected to be deductible for tax purposes.
Acquisition of Earpro
GBP'000
Net cash outflow on acquisition of subsidiaries
Consideration paid in cash (4,986)
Less: cash and cash equivalent balances acquired 2,972
Net cash outflow (2,014)
----------------------
8. ACQUISITION OF NON-CONTROLLING INTEREST
On 9 May 2016, the Group exercised a call option to acquire the remaining 49% non-controlling interest in their subsidiary, Kern & Stelly Medientechnik GmbH for EUR9,237,000.
As a result of this acquisition, the put option liability and put option reserve have been derecognised and the non-controlling interests in equity have been extinguished.
As this company was previously consolidated as a subsidiary, no other changes in the net assets of the subsidiary included in the consolidated financial statements arise because no change in control has occurred.
9. CURRENCY IMPACT
The Group report in Pounds Sterling (GBP) but has significant revenues and costs as well as assets and liabilities that are denominated in Euros (EUR) and Australia Dollars (AUD). The table below sets out the prevailing exchange rates in the periods reported.
Six months At 30 June At 31 December
to 30 June
2017 2016 2017 2016 2016
Average Average
EUR/GBP 1.166 1.300 1.146 1.208 1.180
AUD/GBP 1.678 1.966 1.732 1.802 1.690
The impact of changes in the key exchange rates from the first half of 2016 to the first half of 2017 are summarised as follows:
GBP000 EUR AUD Impact on revenues 5,327 1,670 Impact on profit before tax 264 87 Impact on net debt 61 (44)
10. COPIES OF INTERIM REPORT
Copies of the interim report are available to the public free of charge from the Company at Vinces Road, Diss, IP22 4YT.
11. POST BALANCE SHEET EVENTS
On 6 September the Group acquired 70% of Gebroeders van Domburg B.V, a specialist audio visual and lighting distributor in the Netherlands.
The initial consideration payable was EUR2.1m. The transaction also included an earn-out structure for the initial 70% stake which will be based on the business's performance in the period to 31 December 2018. The Group has options to acquire their remaining 30% stake over the next three years on a pre-determined methodology linked primarily to earnings growth.
12. ADJUSTMENTS TO REPORTED RESULTS
Six months
ended
30 June 30 June
2017 2016
GBP000 GBP000
Operating profit 8,729 5,575
Exceptional administrative
costs 146 1,018
Share based payments 136 -
Amortisation 1,522 1,279
Adjusted operating profit 10,533 7,872
Profit before tax 8,033 3,825
Exceptional administrative
costs 146 1,018
Share based payments 136 -
Amortisation 1,522 1,279
Finance costs - put and call
option 416 1,360
Finance costs - interest on
loan notes and preference shares - 81
Adjusted profit before tax 10,253 7,563
Profit after tax 5,812 2,716
Exceptional administrative
costs 146 1,018
Share based payments 136 -
Amortisation 1,522 1,279
Finance costs - put and call
option 416 1,360
Finance costs - interest on
loan notes and preference shares - 81
Tax impact - at 20% - (16)
Adjusted profit after tax 8,032 6,438
Profit after tax 5,812 2,716
Non-controlling interest (217) (255)
Profit after tax attributable 5,595 2,461
Adjusted profit after tax 8,032 6,438
Non-controlling interest (217) (255)
Adjusted profit after tax attributable 7,815 6,183
Number of shares 79,448,200 71,000,398
Reported EPS - pence 7.04p 3.47p
Adjusted EPS - pence 9.84p 8.71p
13. INTERIM DIVIDEND
The 2016 interim dividend of 1.5 pence was related to profits earned in the period from completion of the Group's listing on AIM to 30 June 2016, a period of 55 days. As a result the 2016 interim dividend was reduced by 50%. The interim dividend proposed for the six months to 30 June 2017 of 4.17 pence is related to profits earned over that whole period. Reported like for like growth of 36% is after adjustment to gross up the 2016 number to a full six months on a pro rata basis.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKDDKDBKBNCD
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September 12, 2017 02:01 ET (06:01 GMT)
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