Share Name Share Symbol Market Type Share ISIN Share Description
Nahl Group Plc LSE:NAH London Ordinary Share GB00BM7S2W63 ORD GBP0.0025
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 62.00 61.20 63.80 62.00 62.00 62.00 3,000 08:04:24
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Health Care Equipment & Services 49.0 9.8 14.5 4.3 29

NAHL Group PLC Interim Results

17/09/2019 7:00am

UK Regulatory (RNS & others)


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NAHL Group PLC

17 September 2019

17 September 2019

NAHL Group plc

("NAHL" or the "Group")

Interim Results

Performance in line with expectations; Continued strategic progress

NAHL (AIM: NAH), the leading UK marketing and services business focused on the UK consumer legal market, announces its Interim Results for the six months ended 30 June 2019.

Financial Highlights

   --      Revenue up 3.9% to GBP25.8m (2018 H1: GBP24.9m) 

-- Underlying operating profit(1) up 1.7% to GBP6.5m (2018 H1: GBP6.4m) including GBP0.5m of planned start-up losses of new ABS law firm, National Accident Law ("NAL"). Before these losses, up 10.6% to GBP7.0m

   --      Cash generation from operations(1) ahead at GBP3.5m (2018 H1: GBP1.3m) 

-- Exceptional costs of GBP0.8m (2018 H1: GBP0.1m) incurred in preparing for small claims reforms

   --      Profit before tax of GBP4.6m after exceptional costs (2018 H1: GBP5.3m) 

-- Basic earnings per share of 3.4p (2018 H1: 8.2p), in line with the Board's expectations, reflecting

o Shifting balance of case allocation between panel law firms and Legal Services business unit, in line with strategy; and

o Continued development of ABS structures, highlighted by profit attributable to JV partners of GBP2.6m (2018 H1: GBP0.6m)

   --      Interim dividend of 2.6p per share (2018 H1: 3.2p) 
   --      Net debt(1) flat at GBP17.6m (2018 H1: GBP17.4m) 

Operational Highlights

   --      Strategic transformation of Personal Injury ("PI") division yielding positive results 
   --      Successful launch of wholly owned law firm, NAL, which is scaling and performing well 

-- National Accident Helpline ("NAH") marketing and placement tactics adapted to respond to continuing competitive pressures

   --      Continued strong progress from Critical Care, with double digit revenue and profit growth 
   --      Residential Property performance reflective of continuing difficult wider market conditions 

Post-Period End

-- Announced the launch of a new ABS law firm, Law Together LLP, operated in partnership with panel law firm

Russell Atkinson, CEO of NAHL, commented:

"As a Group, we are pleased with the overall progress made in the first half of the year. The strategic transformation of our Personal Injury (PI) business continues and the changes put in place are now yielding positive results.

"Our wholly owned law firm, National Accident Law, has made encouraging progress since its launch in April 2019 and we are continuing to grow the number of enquiries being placed through our Legal Services business unit. Our focus remains on taking an economic interest in the success of the whole claim and capturing more value over the long-term. To this end, we are pleased to announce the launch of a new law firm, Law Together LLP, to help take advantage of the opportunities ahead.

"In our Critical Care division, we saw another strong performance, growing operating profit by 12.6% in the period as we begin the process of investing in the technology platform to position it for further growth. Conditions within the residential property market have been well documented and remain challenging. The leadership team in our Residential Property division are focused on a range of initiatives to grow market share.

"We are encouraged by the progress made in the year so far, and although fully cognisant of the challenges ahead, we remain confident of achieving a full year result in line with our underlying EPS(1) expectations."

For further information please call:

 
NAHL Group PLC                      via FTI Consulting 
 Russell Atkinson (CEO)              Tel: +44 (0) 20 
 James Saralis (CFO)                 3727 1000 
finnCap Ltd (NOMAD & Broker)        Tel: +44 (0) 207 
 Julian Blunt / James Thompson       220 0500 
 (Corporate Finance) 
 Andrew Burdis (Corporate Broking) 
FTI Consulting (Financial PR)       Tel: +44 (0) 20 
 Alex Beagley                        3727 1000 
 James Styles 
 Sam Macpherson 
 

Notes to Editors

NAHL Group plc (AIM: NAH) is a leader in the Consumer Legal Services ("CLS") market. The Group provides services and products to individuals and businesses in the CLS market through its three divisions:

-- Personal Injury provides outsourced marketing services to law firms through National Accident Helpline and claims processing services to individuals through its Legal Services business unit, which includes the law firms Your Law, National Law Partners, Law Together and National Accident Law.

-- Critical Care provides a range of specialist services in the catastrophic and serious injury market to both claimants and defendants through Bush and Company Rehabilitation.

-- Residential Property provides marketing services to law firms and conveyancers as well as surveys to individuals through Fitzalan Partners. It also provides property searches through Searches UK.

More information is available at www.nahlgroupplc.co.uk

(1) The Interim Results include alternative performance measures (APMs) because the Directors believe they provide useful information for shareholders on underlying business trends and performance. Details of APMs are provided in Note 1.

Interim Management Statement

I am pleased to report the Group's results for the six months ended 30 June 2019.

Summary of Financial Performance

During the first half of 2019, the Group has performed in line with the Board's underlying EPS expectations. Revenue grew by 3.9% to GBP25.8m (H1 2018: GBP24.9m) and underlying operating profit increased by 1.7% to GBP6.5m (H1 2018: GBP6.4m).

 
                                                                           Unaudited   Unaudited 
                                                                             H1 2019     H1 2018   Growth   Growth 
                                                                                GBPm        GBPm     GBPm        % 
 Personal Injury                                                                16.2        15.5      0.7      5.1 
 Critical Care                                                                   6.6         6.0      0.6     10.4 
 Residential Property                                                            3.0         3.4    (0.4)   (12.8) 
------------------------------------------------------------------------  ----------  ----------  -------  ------- 
 Revenue                                                                        25.8        24.9      0.9      3.9 
 
 Personal Injury                                                                 4.8         4.6      0.2      2.8 
 Critical Care                                                                   2.3         2.1      0.2     12.6 
 Residential Property                                                            0.1         0.6    (0.5)   (83.7) 
 Group Costs                                                                   (0.7)       (0.9)      0.2   (21.9) 
------------------------------------------------------------------------  ----------  ----------  -------  ------- 
 Underlying operating profit                                                     6.5         6.4      0.1      1.7 
 
 Start -up losses associated with NAL                                            0.5           -      0.5      n/a 
------------------------------------------------------------------------  ----------  ----------  -------  ------- 
 Underlying operating profit before start-up losses associated with NAL          7.0         6.4      0.6     10.6 
------------------------------------------------------------------------  ----------  ----------  -------  ------- 
 

Underlying operating profit was net of GBP0.5m of planned start-up losses associated with the Group's new law firm, National Accident Law ("NAL"). Whilst they don't conform to the Group's definition of exceptional costs, these start-up losses comprise the operating loss for the first six months after launch, as the business is scaling up and still refining its processes. The underlying operating profit before start-up losses associated with NAL was GBP7.0m, which represents growth of 10.6% on last year.

The Group also incurred GBP0.8m (H1 2018: GBP0.1m) of exceptional costs associated with our business transformation. We continue to carefully manage these costs and are pleased that they remain in line with plan.

After deducting minority interest payments associated with the Group's ABS law firms, which are rising as a result of increased volumes, underlying earnings per share was 7.4p (H1 2018: 9.9p), which was consistent with the Board's expectation.

Trading Review - Personal Injury ("PI")

The PI division performed in line with plan in the first half. Revenue increased 5.1% to GBP16.3m and underlying operating profit increased 2.8% to GBP4.8m.

The strategic transformation of PI continues and, pleasingly, the contribution from our Legal Services business unit is slightly ahead of expectations during the period. This includes the Group's wholly owned law firm, NAL, which has made encouraging progress since its launch in April 2019, and we are now turning our attention to finalising our small claims proposition, albeit we still require Government confirmation of some important elements of the small claims process.

We are encouraged that panel demand has remained stable during the period and we have agreed a number of deals with panel firms that extend beyond the reform implementation date, currently planned for April 2020. We continue to grow the proportion of our enquiries placed into our Legal Services business unit, in support of our chosen strategy.

National Accident Helpline ("NAH") continues to operate in challenging market conditions, driven by competitive pressures. The Board expects these to persist until the implementation date of the legal reforms. NAH management continue to adapt the business' marketing and placement tactics to respond and optimise its performance. As part of this, we are investing in re-platforming the NAH website in early 2020 which will keep us at the forefront of digital marketing performance.

Our largest ABS venture, Your Law LLP, performed ahead of expectations in the first half and continues to grow. It has achieved damages to date of over GBP16m. Together with our partner in this venture, NewLaw LLP, we are pleased with the progress made and look forward to further developing this relationship.

I am pleased to announce that on 16 September we entered into a contract to launch a new law firm, called Law Together LLP. This venture, which is operated in partnership with Horwich Cohen Coghlan Solicitors, is consistent with the ongoing evolution of our ABS strategy, enabling us to maintain our placement strategy and manage the working capital demands of running personal injury claims. Law Together is the third joint venture law firm to have been established by NAH following the launch of Your Law and National Law Partners in 2017 and is scheduled to launch in October 2019.

Trading Review - Critical Care

Our Critical Care division has had a good H1, driven largely by organic growth from its case management business. Revenue increased 10.4% to GBP6.6m, and underlying operating profit was up 12.6% to GBP2.3m.

The business is progressing a number of initiatives aimed at maintaining this growth and intends to upgrade its technology platform in 2020, which will create efficiencies and deliver further process improvements.

Trading Review - Residential Property

The residential property market has deteriorated further in H1 and this has impacted our results. First half revenue was down 12.8% to GBP3.0m and underlying operating profit was down 83.7% at GBP0.1m. Whilst leadership changes made last year are starting to have a positive effect, the market remains very challenging.

Cash Conversion, Balance Sheet and Interim Dividend

The Group generated free cash flow(1) of GBP0.8m in the first half (H1 2018: GBP(0.5)m) and underlying cash conversion increased on the same period last year to 66.5% (H1 2018: 20.3%). Our ABS law firms made a positive contribution towards a total of GBP4.3m underlying operating cash flow(1) .

As at 30 June 2019 we had net debt of bank borrowings of GBP17.6m (H1 2018: GBP17.4m), which was in line with our expectations.

The Board is declaring an interim dividend of 2.6p per share payable on 31 October 2019 to ordinary shareholders registered on 27 September 2019. Our policy is to have a dividend cover of twice underlying EPS, before exceptional costs and non-cash charges.

Current Year Outlook

As a Board, we are pleased with the tangible results achieved within the PI division in the first half of the year and expect the Group to continue to make progress with its strategic transformation in H2. Whilst we do not expect a noticeable improvement in the market conditions experienced by our Residential Property or PI divisions, our underlying earnings expectations for the full year remain unchanged.

Russell Atkinson

Chief Executive Officer

17 September 2019

(1) The Interim Results include alternative performance measures (APMs) because the Directors believe they provide useful information for shareholders on underlying business trends and performance. Details of APMs are provided in Note 1.

Consolidated statement of comprehensive income

for the 6 months ended 30 June 2019

 
 
 
                                                                                                               Audited 
                                                                             Unaudited     Unaudited         12 months 
                                                                              6 months      6 months          ended 31 
                                                                     Note     ended 30      ended 30     December 2018 
                                                                             June 2019     June 2018            GBP000 
                                                                                GBP000        GBP000 
 
 Total revenue                                                          2       25,839        24,865            48,957 
 Cost of sales                                                                (12,589)      (12,217)          (24,254) 
 Gross profit                                                                   13,250        12,648            24,703 
 Administrative expenses                                                       (8,500)       (7,269)          (14,683) 
----------------------------------------------------------------  -------  -----------  ------------  ---------------- 
 Underlying operating profit                                                     6,465         6,360            12,132 
 Share-based payments                                                            (426)         (191)             (457) 
 Amortisation of intangible assets acquired on business 
  combinations                                                                   (484)         (648)           (1,270) 
 Exceptional items                                                      3        (805)         (142)             (385) 
 Total operating profit                                                 2        4,750         5,379            10,020 
 Financial income                                                                  104            98               222 
 Financial expense                                                               (296)         (206)             (470) 
----------------------------------------------------------------  -------  -----------  ------------  ---------------- 
 Profit before tax                                                               4,558         5,271             9,772 
 Taxation                                                               4        (424)         (953)           (1,389) 
----------------------------------------------------------------  -------  -----------  ------------  ---------------- 
 Profit for the period and total comprehensive income                            4,134         4,318             8,383 
----------------------------------------------------------------  -------  -----------  ------------  ---------------- 
 
 Profit and total comprehensive income is attributable to: 
 Owners of the company                                                           1,561         3,758             6,674 
 Non-controlling interests                                                       2,573           560             1,709 
----------------------------------------------------------------  -------  -----------  ------------  ---------------- 
                                                                                 4,134         4,318             8,383 
----------------------------------------------------------------  -------  -----------  ------------  ---------------- 
 
 
                                       Unaudited 6 months ended   Unaudited 6 months   Audited 12 months 
                                                   30 June 2019                ended               ended 
                                                                             30 June    31 December 2018 
                                                                                2018 
--------------------------------      -------------------------  -------------------  ------------------ 
 Basic earnings per share (p)      7                        3.4                  8.2                14.5 
--------------------------------      -------------------------  -------------------  ------------------ 
 Diluted earnings per share (p)    7                        3.3                  8.0                14.3 
--------------------------------      -------------------------  -------------------  ------------------ 
 

Consolidated statement of financial position

At 30 June 2019

 
                                      Unaudited 6 months ended    Unaudited 6 months ended     Audited 12 months ended 
                                                  30 June 2019                30 June 2018            31 December 2018 
                              Note                      GBP000                      GBP000                      GBP000 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 Non-current assets 
 Goodwill                                               60,362                      60,362                      60,362 
 Intangibles                                             5,906                       6,647                       6,400 
 Property, plant and 
  equipment                                                842                         225                         195 
 Deferred tax asset                                        152                          34                         177 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
                                                        67,262                      67,268                      67,134 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 Current assets 
 Trade and other 
  receivables (including 
  GBP4,955,000 (June 2018: 
  GBP9,538,000, December 
  2018: 
  GBP6,603,000) due in 
  greater than one year)         5                      33,027                      29,978                      28,806 
 Cash and cash equivalents                               2,026                         939                       1,598 
                                                        35,053                      30,917                      30,404 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 Total assets                                          102,315                      98,185                      97,538 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 Current liabilities 
 Trade and other payables        6                    (17,495)                    (14,770)                    (15,111) 
 Other payables relating to 
  legacy pre-LASPO ATE 
  product                                                    -                       (865)                       (301) 
 Tax payable                                             (726)                     (1,290)                       (975) 
                                                      (18,221)                    (16,925)                    (16,387) 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 Non-current liabilities 
 Other interest-bearing 
  loans and borrowings                                (19,659)                    (18,334)                    (17,122) 
 Deferred tax liability                                (1,188)                     (1,500)                     (1,342) 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
                                                      (20,847)                    (19,834)                    (18,464) 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 Total liabilities                                    (39,068)                    (36,759)                    (34,851) 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 Net assets                                             63,247                      61,426                      62,687 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 
 Equity 
 Share capital                                             115                         115                         115 
 Share option reserve                                    3,004                       2,312                       2,578 
 Share premium                                          14,595                      14,595                      14,595 
 Merger reserve                                       (66,928)                    (66,928)                    (66,928) 
 Retained earnings                                     110,313                     110,756                     111,380 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 Capital and reserves 
  attributable to the 
  owners of NAHL Group plc                              61,099                      60,850                      61,740 
 Non-controlling interests                               2,148                         576                         947 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 Total equity                                           63,247                      61,426                      62,687 
---------------------------  -----  --------------------------  --------------------------  -------------------------- 
 

Consolidated statement of changes in equity

for the 6 months ended 30 June 2019

 
 
 
                                                                              Capital and 
                                                                                 reserves 
                                 Share                                      attributa-ble 
                      Share     option      Share     Merger    Retained    to the owners    Non-controlling     Total 
                    capital    reserve    premium    reserve    earnings    of NAHL Group           interest    equity 
                     GBP000     GBP000     GBP000     GBP000      GBP000       plc GBP000             GBP000    GBP000 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 Balance at 1 
  January 2019          115      2,578     14,595   (66,928)     111,380           61,740                947    62,687 
 Adjustment on 
  initial 
  application of 
  IFRS 16                 -          -          -          -           4                4                  -         4 
 Adjusted 
  balance at 1 
  January 2019          115      2,578     14,595   (66,928)     111,384           61,744                947    62,691 
 Total 
 comprehensive 
 income for the 
 period 
 Profit for the 
  period                  -          -          -          -       1,561            1,561              2,573     4,134 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 Total 
  comprehensive 
  income                  -          -          -          -       1,561            1,561              2,573     4,134 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 Transactions with owners, 
 recorded directly in 
 equity 
 Share-based 
  payments                -        426          -          -           -              426                  -       426 
 Dividends paid           -          -          -          -     (2,632)          (2,632)                  -   (2,632) 
 Non- 
  controlling 
  interest 
  member 
  drawings                -          -          -          -           -                -            (1,372)   (1,372) 
 Balance at 30 
  June 2019             115      3,004     14,595   (66,928)     110,313           61,099              2,148    63,247 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 
 
 Balance at 1 
  January 2018          115      2,121     14,507   (66,928)     111,893           61,708                103    61,811 
 Total 
 comprehensive 
 income for the 
 period 
 Profit for the 
  period                  -          -          -          -       3,758            3,758                560     4,318 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 Total 
  comprehensive 
  income                  -          -          -          -       3,758            3,758                560     4,318 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 Transactions 
 with owners, 
 recorded 
 directly in 
 equity 
 Issue of new 
  Ordinary 
  shares                  -          -         88          -           -               88                  -        88 
 Share-based 
  payments                -        191          -          -           -              191                  -       191 
 Dividends paid           -          -          -          -     (4,895)          (4,895)                  -   (4,895) 
 Non- 
  controlling 
  interest 
  member 
  drawings                -          -          -          -           -                -               (87)      (87) 
 Balance at 30 
  June 2018             115      2,312     14,595   (66,928)     110,756           60,850                576    61,426 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 
 
 Balance at 1 
  January 2018          115      2,121     14,507   (66,928)     111,893           61,708                103    61,811 
 Adjustment on 
  initial 
  application of 
  IFRS 9 net of 
  tax                     -          -          -          -       (814)            (814)                  -     (814) 
 Adjusted 
  balance at 1 
  January 2018          115      2,121     14,507   (66,928)     111,079           60,894                103    60,997 
 Total 
 comprehensive 
 income for the 
 year 
 Profit for the 
  year                    -          -          -          -       6,674            6,674              1,709     8,383 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 Total 
  comprehensive 
  income                  -          -          -          -       6,674            6,674              1,709     8,383 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 Transactions 
 with owners, 
 recorded 
 directly in 
 equity 
 Issue of new 
  Ordinary 
  Shares                  -          -         88          -           -               88                  -        88 
 Member drawings          -          -          -          -           -                -              (865)     (865) 
 Share-based 
  payments                -        457          -          -           -              457                  -       457 
 Dividends paid           -          -          -          -     (6,373)          (6,373)                  -   (6,373) 
 Balance at 31 
  December 2018         115      2,578     14,595   (66,928)     111,380           61,740                947    62,687 
----------------  ---------  ---------  ---------  ---------  ----------  ---------------  -----------------  -------- 
 

Consolidated cash flow statement

for the 6 months ended 30 June 2019

 
                                                                                                               Audited 
                                      Unaudited 6 months ended                   Unaudited          12 months ended 31 
                                                  30 June 2019      6 months ended 30 June               December 2018 
                              Note                      GBP000                 2018 GBP000                      GBP000 
--------------------------  ------  --------------------------  --------------------------  -------------------------- 
 Cash flows from operating 
 activities 
 Profit for the period                                   4,134                       4,318                       8,383 
 Adjustments for: 
 Depreciation and amortisation                             913                         810                       1,630 
 IFRS 9 provision movements                                130                           -                         206 
 Financial income                                        (104)                        (98)                       (222) 
 Financial expense                                         296                         206                         470 
 Share-based payments                                      426                         191                         457 
 Taxation                                                  424                         953                       1,389 
----------------------------------  --------------------------  --------------------------  -------------------------- 
                                                         6,219                       6,380                      12,313 
 Increase in trade and other 
  receivables                                          (4,253)                     (7,621)                     (7,564) 
 Increase in trade and other 
  payables                                               1,530                       2,340                       2,775 
 Increase/(decrease) in other 
  payables relating to legacy 
  pre-LASPO ATE product                                      -                         189                       (375) 
----------------------------------  --------------------------  --------------------------  -------------------------- 
 Cash generation from operations                         3,496                       1,288                       7,149 
 Interest paid                                           (240)                       (154)                       (474) 
 Tax paid                                                (803)                     (1,338)                     (2,202) 
----------------------------------  --------------------------  --------------------------  -------------------------- 
 Net cash from operating 
  activities                                             2,453                       (204)                       4,473 
----------------------------------  --------------------------  --------------------------  -------------------------- 
 
  Cash flows from 
  investing activities 
 Acquisition of property, plant 
  and equipment                                          (118)                        (42)                       (145) 
 Acquisition of intangible assets                        (190)                       (156)                       (640) 
 Disposal of property, plant and 
  equipment                                                  -                           -                          42 
 Interest received                                           6                           2                          35 
 Net cash used in investing 
  activities                                             (302)                       (196)                       (708) 
----------------------------------  --------------------------  --------------------------  -------------------------- 
 
  Cash flows from 
  financing activities 
 New share issue                                             -                          88                          88 
 New borrowings acquired                                 2,500                       5,375                       4,125 
 Finance leases                                          (219)                           -                           - 
 Dividends paid                                        (2,632)                     (4,895)                     (6,373) 
 Non- controlling interest member 
  drawings                                             (1,372)                        (87)                       (865) 
----------------------------------  --------------------------  --------------------------  -------------------------- 
 Net cash (used in)/from financing 
  activities                                           (1,723)                         481                     (3,025) 
----------------------------------  --------------------------  --------------------------  -------------------------- 
 
   Net increase in cash and cash 
   equivalents                                             428                          81                         740 
 Cash and cash equivalents at 
  beginning of period                                    1,598                         858                         858 
----------------------------------  --------------------------  --------------------------  -------------------------- 
 Cash and cash equivalents at end 
  of period                                              2,026                         939                       1,598 
----------------------------------  --------------------------  --------------------------  -------------------------- 
 

Notes to the financial statements

1. Accounting policies

General Information

The half year results for the current and comparative period to 30 June have not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance of Review of Interim Financial Information.

These half year results do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2018 were approved by the Board of Directors on 18 March 2019 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

Having made due enquiries the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the condensed set of financial statements.

The condensed set of financial statements was approved by the Board of Directors on 16 September 2019.

Basis of preparation

Statement of compliance

The half year results for the current and comparative period to 30 June have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the AIM Rules of UK companies. They do not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended 31 December 2018, which have been prepared in accordance with IFRSs as adopted by the European Union.

New and amended standards adopted by the Group

The following new or amended standards became applicable for the current reporting period:

IFRS 16 - Leases

The Group has adopted IFRS 16 'Leases' from 1 January 2019 which has changed lease accounting for lessees under operating leases. Such agreements now require recognition of an asset, representing the right to use the leased item, and a liability, representing future lease payments. Lease costs (such as property rent) are recognised in the form of depreciation and interest, rather than as an operating cost. Further information on the impact of IFRS 16 is given in Note 10.

Use of judgements and estimates

The preparation of financial statements in conformity with IFRSs requires management to make judgements and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future years affected.

The preparation of the condensed set of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing the condensed set of financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were of the same type as those that applied to the financial statements for the year ended 31 December 2018.

Significant accounting policies

The accounting policies used in the preparation of these interim financial statements for the 6 months ended 30 June 2019 are the accounting policies as applied to the Group's financial statements for the year ended 31 December 2018 with the addition of IFRS 16 which is discussed in further detail in Note 10.

Statutory and non-statutory measures

The Directors have presented these alternative performance measures (APMs) in the Interim Results because they believe they provide additional useful information for shareholders on underlying business trends and performance. As these APMs are not defined by IFRS, they may not be directly comparable to other companies' APMs. They are not intended to be a substitute for, or superior to, IFRS measurements and the Directors recommend that the IFRS measures should also be used when users of this document assess the performance of the Group.

The APMs used in the Interim Results are as defined in the 2018 Annual Report and the principles to identify adjusting items have been applied on a basis consistent with previous years with the exception of exceptional revenues arising from the release of the pre-LASPO ATE liability. Given the magnitude of the pre-LASPO ATE liability, it is no longer considered to be a material item and therefore from 1 January 2019 the Directors have made the decision to no longer include revenues related to the release of this liability as an exceptional item. The key adjusting items in arriving at the APMs are as follows:

IFRS 2 Share-based Payments - This is the charge for share-based payments calculated in line with IFRS 2. IFRS 2 requires the fair

value of equity instruments measured at grant date to be spread over the period during which the employees become unconditionally

entitled to the options. The calculation behind the charge can fluctuate year-on-year as new grants are made depending on inputs such

as the expected volatility, the share price, exercise price etc. and therefore the charge can vary with little correlation to the underlying

trading activities. For example, in the five years since the Group's flotation on AIM, the IFRS 2 charge has been as low as GBP182,000 and

as high as GBP1,052,000. Management therefore believe it is appropriate to exclude this charge from the underlying operating profit to

allow for greater comparability of the underlying core trading performance of the Group year-on-year.

IFRS 3 (Revised) Business Combinations - This is the amortisation charge for intangible assets arising on acquisitions and expenditure

arising from acquisition activity. Under IFRS 3 all acquisition costs are required to be expensed in the Group Income Statement and

intangible assets arising on acquisition are required to be amortised over their useful economic life. Management believes that it is

useful to separately identify these costs due to their materiality to the Group results and due to the fact that the amortisation is

calculated on a straight-line basis, it therefore has little correlation to the trading activities of the acquired entity in any particular year.

To allow for greater comparability of the trading results year-on-year, this charge is therefore excluded from underlying operating profit.

Exceptional items - These are non-recurring items that are material by nature and separately identified to allow for greater comparability of underlying Group operating results year on year. Examples of exceptional items in the current and/or previous years include

reorganisation and restructuring costs; revaluation of liability associated with legacy ATE products; and acquisition related costs.

Exceptional costs are separately identified to allow for greater comparability of underlying Group operating results year-on-year.

The APMS presented in the Interim Results are defined as follows:

 
Nature       Related              Related 
 of           IFRS                 IFRS 
measure      measure              source         Definition                         Use/relevance 
 
Underlying   Operating          Consolidated     Based on the related               Allows management and users 
 operating    profit             income           IFRS measure                       of the financial statements 
 profit                          statement        but excluding exceptional          to assess the underlying 
                                                  items, IFRS                        trading results after removing 
                                                  2 share-based payment              material, non-recurring 
                                                  charges and                        items that are not reflective 
                                                  amortisation of intangible         of the core trading activities 
                                                  assets                             and allows comparability 
                                                  acquired on business               of core trading performance 
                                                  combinations.                      year-on-year. 
-----------  -----------------  ---------------  ---------------------------------  ---------------------------------- 
Underlying   Cash flow          Consolidated     Based on the related               Provides management with 
 operating    from               cash flow        IFRS measure                      an indication of the amount 
 cash         operating          statement        but excluding cash flows          of cash available for 
 flow         activities                          in respect of                     discretionary 
                                                  the items excluded from           investing or financing 
                                                  underlying                        after removing material 
                                                  operating profit as described     non-recurring expenditure 
                                                  above.                            that does not reflect the 
                                                                                    underlying trading operations 
                                                                                    and allows management to 
                                                                                    monitor the conversion 
                                                                                    of underlying profit into 
                                                                                    cash. 
 
Underlying   Not defined        n/a              Calculated as underlying 
 cash         by IFRS                             operating 
 conversion                                       cash flow divided by 
                                                  underlying 
                                                  operating profit. 
Free         Not defined        n/a              Calculated as net cash 
 cash         by IFRS                             generated 
 flow                                             from operating activities 
                                                  less net cash 
                                                  used in investing activities 
                                                  less 
                                                  payments made to non-controlling 
                                                  interests. 
-----------  -----------------  ---------------  --------------------------------- 
Underlying Basic              Consolidated       Based on the related               Allows management and users 
 EPS                           income             IFRS measure                       of the financial statements 
 EPS                           statement          but calculated using               to assess the underlying 
                                                  underlying                         trading results after removing 
                                                  Profit after tax.                  material, non-recurring 
                                                                                     items that are not reflective 
                                                                                     of the core trading activities. 
                                                                                     It also allows comparability 
                                                                                     of core trading performance 
                                                                                     year-on-year. 
----------------------------  -----------------  ---------------------------------  ---------------------------------- 
Working      Movement         Consolidated       Working capital is not             Allows management to assess 
 Capital      in receivables   statement          defined by IFRS. This              the short-term cash flows 
              and movement     of cashflows       is defined by management           from movements in the more 
              in payables                         as being the cash movement         liquid assets. 
                                                  in trade and other receivables 
                                                  less the cash movement 
                                                  in trade and other payables. 
Net debt     Not defined      Consolidated       Net debt is defined as             Allows management to monitor 
              by IFRS          cash flow         cash and cash                       the overall level of debt 
                               statement         equivalents less interest-bearing   in the business. As stated 
                                                 borrowings net of loan              in the strategic report, 
                                                 arrangement                         loan funding is key to 
                                                 fees.                               the Group's future strategy 
                                                                                     as an increasing proportion 
                                                                                     of profits and cash flows 
                                                                                     are deferred until case 
                                                                                     settlement. 
 
 

A reconciliation of each measure is provided as follows:

Underlying operating profit:

 
                               Unaudited 6 months ended 30   Unaudited 6 months ended 30    Audited 12 months ended 31 
                                                 June 2019                     June 2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 IFRS measure - operating 
  profit                                             4,750                         5,379                        10,020 
 Exceptional items                                     805                           142                           385 
 IFRS 2 share-based payment 
  charge                                               426                           191                           457 
 Amortisation of intangible 
  assets acquired on 
  business combinations                                484                           648                         1,270 
 Underlying operating profit                         6,465                         6,360                        12,132 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

Underlying operating cash flow, underlying cash conversion and free cash flow:

 
                               Unaudited 6 months ended 30   Unaudited 6 months ended 30    Audited 12 months ended 31 
                                                 June 2019                     June 2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 IFRS measure - cash 
  generation from operations                         3,496                         1,288                         7,149 
 Exceptional items                                     805                           142                           385 
 Working capital movements 
  in respect of exceptional 
  items                                                  -                            50                            50 
 Decrease/(increase) in 
  liabilities relating to 
  Pre-LASPO ATE                                          -                         (189)                           375 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Underlying operating cash 
  flow                                               4,301                         1,291                         7,959 
 Underlying operating profit 
  (as above)                                         6,465                         6,360                        12,132 
 Underlying cash conversion                          66.5%                         20.3%                         65.6% 
 
 Cash generation from 
  operations                                         3,496                         1,288                         7,149 
 Interest paid                                       (240)                         (154)                         (474) 
 Tax paid                                            (803)                       (1,338)                       (2,202) 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Net cash generated from 
  operating activities                               2,453                         (204)                         4,473 
 Net cash used in investing 
  activities                                         (302)                         (196)                         (708) 
 Payments to non-controlling 
  interests                                        (1,372)                          (87)                         (865) 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Free cash flow                                        779                         (487)                         2,900 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

Underlying EPS:

 
                               Unaudited 6 months ended 30   Unaudited 6 months ended 30    Audited 12 months ended 31 
                                                 June 2019                     June 2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 IFRS measure - profit for 
  the year attributable to 
  shareholders                                       1,561                         3,758                         6,674 
 Exceptional items net of 
  tax                                                  652                           115                           312 
 Start-up losses associated                            458                             -                             - 
 with NAL net of tax 
 IFRS 2 share-based payment 
  charge                                               426                           191                           457 
 Amortisation of intangible 
  assets acquired on 
  business combinations net 
  of deferred tax                                      334                           486                           950 
 Underlying profit for the 
  year attributable to 
  shareholders                                       3,431                         4,550                         8,393 
 Weighted average number of 
  shares                                        46,178,716                    46,100,876                    46,160,172 
 Underlying EPS                                        7.4                           9.9                          18.2 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

Working capital:

 
                               Unaudited 6 months ended 30   Unaudited 6 months ended 30    Audited 12 months ended 31 
                                                 June 2019                     June 2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Movement in trade and other 
  receivables                                      (4,253)                       (7,621)                       (7,564) 
 IFRS 9 provision movement                             130                             -                           206 
 Movement in trade and other 
  payables                                           1,530                         2,340                         2,775 
 Working capital                                   (2,593)                       (5,281)                       (4,583) 
 Pre-LASPO ATE movement                              (101)                             -                             - 
 IFRS 9 opening balance 
  adjustment                                             -                             -                         1,002 
 IFRS 16 adjustments to                                676                             -                             - 
 payables 
 Movement in interest 
  accruals                                           (120)                          (81)                         (268) 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 IFRS measure - movement in 
  trade and other 
  receivables less movement 
  in trade and other 
  payables 
  (including Pre-LASPO ATE 
  liability)                                       (2,138)                       (5,362)                       (3,849) 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

Financial assets and liabilities

The Group's principal financial instruments comprise cash and cash equivalents, trade and other receivables, trade and other payables

and interest-bearing borrowings.

Trade and other receivables

Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition, trade and other receivables are stated at amortised cost using the effective interest method, less any impairment losses calculated in line with IFRS 9.

Trade and other payables

Trade and other payables are recognised initially at fair value. Subsequent to initial recognition, trade and other payables are stated at

amortised cost using the effective interest method.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances. Cash and cash equivalents are repayable on demand and are recognised at their

carrying amount.

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition,

interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.

2. Operating segments

 
                            Personal   Critical   Residential     Group   Underlying   Pre-LAPSO      Other   Eliminati-ons      Total 
                              Injury       Care      Property    GBP000   operations         ATE      items          GBP000     GBP000 
                              GBP000     GBP000        GBP000                 GBP000      GBP000     GBP000 
 6 months ended 30 June 
 2019 
 Revenue                      16,279      6,591         2,969         -       25,839           -          -               -     25,839 
 Depreciation and 
  amortisation                 (185)       (71)         (172)       (1)        (429)           -      (484)               -      (913) 
 Operating profit/(loss) 
  (1)                          4,751      2,349            96     (731)        6,465           -    (1,715)               -      4,750 
 Financial income                103          -             -         1          104           -          -               -        104 
 Financial expenses              (1)        (1)           (2)     (292)        (296)           -          -               -      (296) 
 Profit/(loss) before tax      4,853      2,348            94   (1,022)        6,273           -    (1,715)               -      4,558 
 Trade receivables             8,673      5,106           770         -       14,549           -          -               -     14,549 
 Total assets(3)              29,289      5,753         1,666    78,332      115,040           -          -        (12,725)    102,315 
 Segment liabilities(3)     (15,457)    (1,027)         (704)     (307)     (17,495)       - (2)          -               -   (17,495) 
 Capital expenditure 
  (including intangibles)      (192)       (93)           (7)      (16)        (308)           -          -               -      (308) 
-------------------------  ---------  ---------  ------------  --------  -----------  ----------  ---------  --------------  --------- 
 
 6 months ended 30 June 
 2018 
 Revenue                      15,489      5,970         3,406         -       24,865           -          -                     24,865 
 Depreciation and 
  amortisation                  (94)       (18)          (50)         -        (162)           -      (648)                      (810) 
 Operating profit/(loss) 
  (1)                          4,622      2,087           588     (937)        6,360           -      (981)                      5,379 
 Financial income                 97          -             -         1           98           -          -                         98 
 Financial expenses                -          -             -     (206)        (206)           -          -                      (206) 
 Profit/(loss) before tax      4,719      2,087           588   (1,142)        6,252           -      (981)                      5,271 
 Trade receivables            14,572      4,655           795         -       20,022           -          -                     20,022 
 Total Assets(3)              25,132      4,970         1,604    78,917      110,623               (12,438)                     98,185 
 Segment liabilities(3)     (12,492)    (1,003)         (569)     (706)     (14,770)    (865)(2)          -                     15,635 
 Capital expenditure 
  (including intangibles)         21         20           157         -          198           -          -                        198 
-------------------------  ---------  ---------  ------------  --------  -----------  ----------  ---------  --------------  --------- 
 
  12 months ended 31 
  December 2018 
 Revenue                      29,522     12,383         6,388         -       48,293         664          -               -     48,957 
 Depreciation and 
  amortisation                 (195)       (48)         (117)         -        (360)           -    (1,270)               -    (1,630) 
 Operating profit/(loss) 
  (1)                          8,424      4,520           728   (1,540)       12,132         589    (2,701)               -     10,020 
 Financial income                191         30             -         1          222           -          -               -        222 
 Financial expenses                -        (5)             -     (465)        (470)           -          -               -      (470) 
 Profit/(loss) before tax      8,615      4,545           728   (2,004)       11,884         589    (2,701)               -      9,772 
 Trade receivables            10,200      5,036           598         -       15,834           -          -               -     15,834 
 Total assets(3)              24,528      5,800         1,269    78,574      110,171           -          -        (12,633)     97,538 
 Segment liabilities(3)     (13,254)    (1,137)         (364)     (356)     (15,111)    (301)(2)          -               -   (15,412) 
 Capital expenditure 
  (including intangibles)        245        188           352         -          785           -          -               -        785 
-------------------------  ---------  ---------  ------------  --------  -----------  ----------  ---------  --------------  --------- 
 
   1.          These are the respective underlying profits of the division. 

2. Pre-LASPO ATE liabilities include the balance of commissions received in advance that are due to be paid back to the insurance

provider of GBP200,000 (June 2018: GBP865,000, December 2018: GBP301,000). From January 2019 this balance was no longer considered to be material and going forward will now be presented as part of Personal Injury.

3. Total assets and segment liabilities exclude intercompany loan balances as these do not form part of the operating activities of the segment.

Geographic information

All revenue and assets of the Group are based in the UK.

Operating segments

The activities of the Group are managed by the Board, which is deemed to be the chief operating decision maker (CODM). The CODM has identified the following segments for the purpose of performance assessment and resource allocation decisions. These segments are split along product lines and are consistent with those reported last year.

Personal Injury - Revenue from the provision of enquiries to the Panel Law Firms, based on a cost plus margin model, plus commissions received from providers for the sale of additional products by them to the Panel Law Firms and in the case of the ABSs, revenue receivable from clients for the provision of legal services.

Critical Care - Revenue from the provision of expert witness reports and case management support within the medico-legal framework for multi-track cases.

Residential Property - Revenue from the provision of online marketing services to target homebuyers and sellers in England and Wales, offering lead generation services to Panel Law Firms and surveyors in the conveyancing sector and the provision of conveyancing searches for solicitors and licensed conveyancers.

Group - Costs that are incurred in managing Group activities or not specifically related to a product.

Pre-LASPO ATE - Revenue is commissions received from the insurance provider for the use of after the event policies by Panel Law Firms. From 1 April 2013, this product was no longer available as a result of LASPO regulatory changes. Included in the balance sheet is a liability relating to commissions received in advance that are due to be paid back to the insurance provider. No interest is due on this liability.

Other items - Costs associated with the acquisition of subsidiary undertakings, reorganisation costs associated with exceptional projects that are not related to the core operations of the business, share-based payments and amortisation charges on intangible assets recognised as part of business combinations.

3. Exceptional items

 
                               Unaudited 6 months ended 30   Unaudited 6 months ended 30    Audited 12 months ended 31 
                                                 June 2019                     June 2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Release of pre-LASPO ATE 
  liability and associated 
  costs(1)                                               -                             -                           589 
 Personal Injury 
  reorganisation costs(2)                            (805)                         (142)                         (816) 
 Residential Property 
  reorganisation costs(3)                                -                             -                         (158) 
 Total                                               (805)                         (142)                         (385) 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

1. Previously recognised liabilities for pre-LASPO ATE commissions received in advance of GBP664,000 were released in 2018 as a result of more favourable settlements. These have been offset by associated costs of GBP75,000.

2. Personal Injury reorganisation costs relate to costs associated with exceptional projects that are not related to the core operations

of the business.

   3.     Costs of management reorganisation in the Residential Property division. 
   4.   Taxation 
 
                               Unaudited 6 months ended 30   Unaudited 6 months ended 30    Audited 12 months ended 31 
                                                 June 2019                     June 2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
 Current tax expense 
 Current tax on income for 
  the year                                             552                         1,115                         1,824 
 Adjustments in respect of 
  prior years                                            -                             -                         (160) 
 Total current tax                                     552                         1,115                         1,664 
 
 Deferred tax credit 
 Origination and reversal of 
  timing differences                                 (128)                         (162)                         (275) 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Total deferred tax                                  (128)                         (162)                         (275) 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Total expense in statement 
  of comprehensive income                              424                           953                         1,389 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Total tax charge                                      424                           953                         1,389 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

Reconciliation of effective tax rate:

 
                               Unaudited 6 months ended 30   Unaudited 6 months ended 30    Audited 12 months ended 31 
                                                 June 2019                     June 2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
 Profit for the period                               4,134                         4,318                         8,383 
 Total tax expense                                     424                           953                         1,389 
 Profit before taxation                              4,558                         5,271                         9,772 
 
 Tax using the UK 
  corporation tax rate of 
  19.00% (June 2018: 19.00%, 
  December 2018:19.00%)                                866                         1,001                         1,856 
 Income disallowable for tax 
  purposes                                               -                             -                           (6) 
 Non-deductible expenses                                81                            36                           100 
 Adjustments in respect of 
  prior years                                            -                             -                         (160) 
 Share scheme deductions                                 -                          (18)                          (18) 
 Non-controlling interest 
  share of tax                                       (489)                         (106)                         (324) 
 Short term timing 
  differences for which no 
  deferred tax is recognised                          (34)                            40                          (59) 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Total tax charge                                      424                           953                         1,389 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

The Group's tax charge of GBP424,000 (June 2018: GBP953,000, December 2018: GBP1,389,000) represents an effective tax rate of 9.3% (June 2018: 18.1%, December 2018: 14.2%). The effective tax rate is lower than the standard corporation tax rate of 19.0% for the reasons as set out above. The most significant of these is that the Group does not account for the non-controlling interests' share of tax. This results in a reduction in effective tax rate of 10.7% (June 2018: 2.0%, December 2018: 3.3%).

Changes in tax rates and factors affecting the future tax charge

A reduction in the UK corporation tax rate from 19.0% to 18.0% (effective from 1 April 2020) was substantively enacted on 26 October 2015 and an additional reduction to 17.0% (effective from 1 April 2020) were substantively enacted on 6 September 2017. This will reduce the Group's future current tax charge accordingly. The deferred tax assets and liabilities at 30 June 2019have been calculated based on these rates.

   5.   Trade and other receivables 
 
                               Unaudited 6 months ended 30   Unaudited 6 months ended 30    Audited 12 months ended 31 
                                                 June 2019                     June 2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
 Trade receivables: 
  receivable in less than 
  one year                                          13,444                        12,082                        13,234 
 Trade receivables: 
  receivable in more than 
  one year                                           1,105                         7,940                         2,600 
 Accrued income: receivable 
  in less than one year                              8,346                         5,215                         4,359 
 Accrued income: receivable 
  in more than one year                              3,850                         1,597                         4,003 
 Other receivables                                     208                           259                           308 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
                                                    26,953                        27,093                        24,504 
 Prepayments                                           990                           594                           673 
 Recoverable disbursements                           5,084                         2,291                         3,629 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Total                                              33,027                        29,978                        28,806 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

A provision against trade receivables of GBP779,000 (June 2018: GBP171,000, December 2018 GBP909,000) is included in the figures above.

6. Trade and other payables

 
                               Unaudited 6 months ended 30   Unaudited 6 months ended 30    Audited 12 months ended 31 
                                                 June 2019                     June 2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
 Trade payables                                      3,642                         2,360                         2,493 
 Disbursements payable                               5,359                         2,320                         3,712 
 Other taxation and social 
  security                                             941                           975                         1,028 
 Other payables, accruals 
  and deferred revenue                               6,849                         8,311                         6,907 
 Customer deposits                                     704                           804                           971 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Total                                              17,495                        14,770                        15,111 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

7. Earnings per share

The calculation of basic earnings per share at 30 June 2019 is based on profit attributable to ordinary shareholders and a weighted average number of Ordinary Shares outstanding at the end of the period as follows:

Profit attributable to ordinary shareholders (basic)

 
 
                                  Unaudited 6 months ended      Unaudited 6 months ended 
                                                   30 June                       30 June    Audited 12 months ended 31 
                                                      2019                          2018                 December 2018 
                                                    GBP000                        GBP000                        GBP000 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 Profit for the period 
  attributable to the 
  shareholders                                       1,561                         3,758                         6,674 
----------------------------  ----------------------------  ----------------------------  ---------------------------- 
 

Weighted average number of Ordinary Shares (basic)

 
 
                                  Unaudited 6 months ended     Unaudited 6 months ended      Audited 12 months ended 
 Number                                       30 June 2019                 30 June 2018             31 December 2018 
----------------------------   ---------------------------  ---------------------------  --------------------------- 
 Issued Ordinary Shares at 
  start of period                               46,178,716                   46,061,090                   46,061,090 
-----------------------------  ---------------------------  ---------------------------  --------------------------- 
 Weighted average number of 
  Ordinary Shares at end of 
  period                                        46,178,716                   46,100,876                   46,160,172 
-----------------------------  ---------------------------  ---------------------------  --------------------------- 
 

Basic earnings per share (p)

 
               Unaudited 6 months ended 30 June    Unaudited 6 months ended 30 June         Audited 12 months ended 31 
                                           2019                                2018                      December 2019 
-----------  ----------------------------------  ----------------------------------  --------------------------------- 
 Group (p)                                  3.4                                 8.2                               14.5 
-----------  ----------------------------------  ----------------------------------  --------------------------------- 
 

The Company has in place share-based payment schemes to reward employees. The incremental shares available for these schemes included in the diluted earnings per share calculation are 405,859 (June 2018: 958,388; December 2018: 454,169). There are no other diluting items.

Diluted earnings per share (p)

 
              Unaudited 6 months ended 30 June    Unaudited 6 months ended 30 June          Audited 12 months ended 31 
                                          2019                                2018                            December 
                                                                                                                  2018 
-----------  ---------------------------------  ----------------------------------  ---------------------------------- 
 Group (p)                                 3.3                                 8.0                                14.3 
-----------  ---------------------------------  ----------------------------------  ---------------------------------- 
 

8. Dividends

On 31 May 2019 the Group paid final dividends in respect of 2018 of GBP2,632,000 (2018: final dividends in respect of 2017 of GBP4,895,000) which represented a dividend per share of 5.7p (2018: 10.6p). The Directors have recommended an interim dividend in respect of 2019 of 2.6p (2018: interim dividend of 3.2p).

9. Net debt

Net debt comprises cash and cash equivalents, secured bank loans, loan notes and preference shares.

 
                                                    30 June 2019    30 June   31 December 2018 
                                                          GBP000       2018             GBP000 
                                                                     GBP000 
------------------------------------------------  --------------  ---------  ----------------- 
 Cash and cash equivalents                                 2,026        939              1,598 
 Other interest-bearing loans and loan notes(1)         (19,659)   (18,334)           (17,122) 
 Net debt                                               (17,633)   (17,395)           (15,524) 
------------------------------------------------  --------------  ---------  ----------------- 
 

1. Other interest-bearing loans and loan notes are stated after deducting facility arrangement fees of GBP91,000 (June 2018: GBP166,000; December 2018: GBP128,000). These fees are being amortised over the term of the facility.

Set out below is a reconciliation of movements in net debt during the period.

 
                                                                            30 June 2019    30 June   31 December 2018 
                                                                                  GBP000       2018             GBP000 
                                                                                             GBP000 
-------------------------------------------------------------------------  -------------  ---------  ----------------- 
 Net increase in cash and cash equivalents                                           428         81                740 
 Cash and cash equivalents net inflow from increase in debt and debt 
  financing                                                                      (2,500)    (5,375)            (4,125) 
-------------------------------------------------------------------------  -------------  ---------  ----------------- 
 Movement in net borrowings resulting from cash flows                            (2,072)    (5,294)            (3,385) 
 Non-cash release of prepaid loan arrangement fees                                  (37)       (37)               (75) 
 Net debt at beginning of period                                                (15,524)   (12,064)           (12,064) 
-------------------------------------------------------------------------  -------------  ---------  ----------------- 
 Net debt at end of period                                                      (17,633)   (17,395)           (15,524) 
-------------------------------------------------------------------------  -------------  ---------  ----------------- 
 

It is the Group's intention to repay the balance on the revolving credit facility in more than 12 months time and hence the gross balance of GBP19,750,000 is deemed to be a non-current liability.

10. Changes in accounting policies

The Group has adopted the modified retrospective approach with the right of use asset measured as if IFRS 16 had been applied since the commencement date of a lease using a discount rate based on the Group's incremental borrowing rate at the date of initial application and the lease liability at transition date as the present value of the remaining lease payments, discounted using the Group's

incremental borrowing rate at the date of initial application, adjusted by any prepayments or lease incentives recognised immediately before the date of initial application. Under the modified retrospective transition approach, the comparative information is not restated.

The Group has elected to apply a single discount rate to assets with similar characteristics. The Group has also elected not to recognise right of use assets and lease liabilities for short-term leases or low-value assets. The Group will continue to expense the lease payments associated with these leases on a straight-line basis over the lease term.

Leases

The Group leases property and certain items of office equipment.

 
                                         Property   Office equipment     Total 
                                           GBP000             GBP000    GBP000 
--------------------------------------  ---------  -----------------  -------- 
 Right of use asset at 1 January 2019         531                109       640 
--------------------------------------  ---------  -----------------  -------- 
 Right of use asset at 30 June 2019           473                 97       570 
--------------------------------------  ---------  -----------------  -------- 
 

Impact on Financial Statements

1) Impact on transition

On transition to IFRS 16, the Group recognised additional right of use assets and lease liabilities recognising the difference in retained earnings. This impact on transition is summarised below.

 
                                                                                   Total 
                                                                                  GBP000 
 Right of use assets presented in property, plant and equipment                      640 
 Lease liabilities presented in other payables, accruals and deferred revenue      (673) 
 Release of rent-free period adjustments                                              37 
------------------------------------------------------------------------------  -------- 
 Impact on retained earnings                                                           4 
------------------------------------------------------------------------------  -------- 
 

2) Impacts for the period

As a result of applying IFRS 16, in relation to the leases that were previously classified as operating leases, the Group recognised GBP570,000 of right of use assets and GBP640,000 of lease liabilities as at 30 June 2019 (including new leases taken out after 1 January 2019). The right of use assets of GBP570,000 have been included in property, plant and equipment on the balance sheet and the lease liabilities of GBP640,000 have been included within other payables, accruals and deferred revenue.

Also, in relation to those leases under IFRS 16, the Group has recognised depreciation and interest costs, instead of operating lease expense. During the six months ended 30 June 2019, the Group recognised GBP187,000 of depreciation charges and GBP4,000 of interest costs from those leases.

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END

IR EASNKFSANEFF

(END) Dow Jones Newswires

September 17, 2019 02:00 ET (06:00 GMT)

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