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MIDW Midwich Group Plc

425.00
1.00 (0.24%)
01 May 2024 - Closed
Delayed by 15 minutes
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
  1.00 0.24% 425.00 417.00 426.00 429.00 420.00 423.00 22,556 16:35:07
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Business Services, Nec 1.29B 26.82M 0.2597 16.40 439.85M

Midwich Group PLC Interim Results (4339Q)

12/09/2017 7:01am

UK Regulatory


Midwich (LSE:MIDW)
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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.

 
                              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

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