We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Norman Broadbent Plc | LSE:NBB | London | Ordinary Share | GB00B3VF4Y66 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.75 | 9.00 | 10.50 | 9.75 | 9.75 | 9.75 | 50,000 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Consulting Svcs,nec | 8.7M | -338k | -0.0056 | -17.41 | 5.92M |
From Apr 2019 to Apr 2024
TIDMNBB
RNS Number : 8880N
Norman Broadbent PLC
14 May 2018
Norman Broadbent plc
("Norman Broadbent", the "Company" or the "Group")
Final Results and Annual Accounts
The board (the "Board") of Norman Broadbent (AIM: NBB) - a leading Professional Services firm specifically focussing on Leadership Acquisition & Advisory Services (Board & Leadership Search, Senior Interim Management, Research & Insight, Leadership Consulting & Assessment, and executive level Recruitment Solutions) - is pleased to announce its final results and annual accounts for the year ended 31 December 2017.
Highlights
-- Overall revenue increased by GBP0.86m (+15%) to GBP6.5m with lower, but higher quality headcount. New businesses grew substantially in line with the strategy to create a more balanced business of high quality revenue
-- Cross selling between brands has increased significantly resulting in c.50% of NB Solutions deals being generated by NB Executive Search
-- NB Interim revenues increased by GBP1.1m (140%), NB Leadership Consulting revenues increased by GBP0.4m (148%), NB Solutions revenue increased GBP0.2m (45%), and our recently (2018 H2) launched Research & Insight service starting to contribute. These increases are offset by the decline in Search revenues (due to the transformation) of GBP0.9m (-23%)
-- Strong Q4 for NB Executive Search
-- Loss after tax increased by GBP0.6m (60%) to GBP1.6m reflecting restructuring costs and associated short term impact on fee earner numbers in Search but masked a strong Q4 2017 performance
-- April 2018 office relocation to generate GBP300k in savings pa for lease duration -- Group now more relevant and competitive in terms of pricing, proposition and people
-- Trading update: Q4 2017 strongest quarter for new wins and revenue during the last financial year - positive trend continuing into Q1 2018; Q1 2018 ahead of Board plan at EBITDA and revenue level. In summary significant progress made, but still a way to go in completing this phase of our transformation.
For further information, please contact:
Norman Broadbent plc Mike Brennan / Will Gerrand 020 7484 0000 WH Ireland Limited Adrian Hadden / Jessica Cave / Alex Bond 020 7220 1666
CEO's Review for the year ended 31 December 2017
RESULTS FOR THE FINANCIAL YEAR
The table below summarises the results of the Group:
Hot Features
Premium
Year ended Year ended
31-Dec 31-Dec
2017 2016
GBP000's GBP000's
---------- ----------
CONTINUING OPERATIONS
REVENUE 6,523 5,661
Cost of sales (1,484) (735)
---------- ----------
GROSS PROFIT 5,039 4,926
Operating expenses (6,599) (6,149)
---------- ----------
GROUP OPERATING LOSS (1,560) (1,223)
---------- ----------
Net finance cost (42) (54)
---------- ----------
LOSS BEFORE TAX (1,602) (1,277)
Income tax - -
---------- ----------
Profit/(Loss) from discontinued operation - 279
---------- ----------
LOSS AFTER TAX (1,602) (998)
---------- ----------
Strategic review and fundraising
The increased loss from continuing operations for the full year of 2017 is disappointing but conceals the considerable progress made in the implementation of Phase 2 of our turnaround. This progress has been against the backdrop of a fundamental change in how we go about our business. There has been a relentless focus on the quality of our work and people, the development of a more collegiate approach to servicing our client's needs, including leveraging the synergies between our brands to devise innovative solutions for our clients rather than industry standard offerings. The positive impact of these changes was reflected in the Q4 revenue run rates of the underlying business units. This trend has continued into 2018.
The key appointments made during the past 18 months are now entrenched and have settled in well with long-standing team members. As we continue to recruit externally and to promote from within, our focus has been on the identification of high quality innovative and collegiate professionals, who are team-players and culturally in tune with the 'new' Norman Broadbent.
A significant appointment and major source of change was the recruitment of Tim Hammett as Head of Norman Broadbent Executive Search. Tim joined us in February 2017 and has driven significant change through this part of the business. Will Gerrand, an experienced CFO and proven operator within the industry, joined as Group CFO/COO in October 2017 and has made a significant and positive impact on the Group.
The Group raised GBP1.23 million of new equity (before expenses) in September 2017 from existing institutional shareholders along with GBP300,000 in Secured Loan Notes. This additional investment was to help accelerate the Company's growth plans, to enable a move to more modern Central London offices, and for working capital purposes.
A key aspect of the turnaround programme has been relocation. Our St James's offices, whilst in a beautiful location, were expensive, inefficient, under-utilised and do not reflect the 'new' Norman Broadbent Group. After a significant amount of effort, we secured more modern offices which are not only brand enhancing and more efficient, but will create annualised savings in excess of GBP300,000 from the second half of 2018.
I'm delighted that after much hard work and commitment, our efforts are slowly being rewarded. The percentage of cross-referred work is higher than it has ever been since I joined, and the new approach has been reflected in the level of wins and revenue achieved in Q4 2017 and Q1 2018.
2017 trading and business review
As noted above a major part of our efforts during 2017 focussed on bringing in more innovative, entrepreneurial talent into the Group. The combination of new talent and our core performing Fee Earners has helped create a more uniformly collegiate, commercial and high performing culture. This change in culture led to a number of staff exiting the business. The impact of the cost of individuals leaving during 2017 is estimated to be circa GBP750,000, (2016: GBP300,000). There is also the related issue of the time taken by new employees to start generating consistent revenue. In a number of cases we have found that the new culture has enabled new joiners to generate revenue earlier than the traditionally anticipated 6 month fallow period.
The fundamental changes being driven through the Group have inevitably had a short-term impact on both costs and revenue generating capacity. Despite this Group turnover increased to GBP6,523,000 (2016: GBP5,661,000) whilst overall net revenues after associate and interim costs in the continuing businesses increased to GBP5,039,000 (2016: GBP4,926,000). Inevitably the cost of investing in refocusing the Group saw operating expenses increase to GBP6,599,000 (2016: GBP6,149,000), and as a result operating losses from continued operations widened to GBP1,560,000 (2016: GBP1,223,000).
In addition to the commentary below note 3 of the Consolidated Financial Statements in the report and accounts provides a detailed segmental breakdown of the 2017 Group results.
Norman Broadbent Executive Search ("NBES")
NBES was the part of the group most significantly impacted by the costs associated with the implementation of the much-needed change during 2017. This resulted in a number of staff exits and new hires. During this period revenue declined by 24% to GBP3,061,000 (2016: GBP4,005,000) resulting in a GBP1,005,000 loss before tax (2016: Loss GBP328,000). The process of change in NBES, subject to a small number of potential targeted hires, is now largely complete and the foundations for a return to growth have been laid with increased activity evidenced by 2017's highest quarter's sales taking place in Q4.
In addition the impact of the programme of change is reflected in the greatly increased levels of cross referrals from NBES to other business units. Some 30% of NBIM deals and 50% of NBS deals were originated by NBES. This compares to prior years when there were negligible levels of referred work. This reflects the move from a siloed business unit outlook to the client focussed solutions based approach now adopted across the Group.
Norman Broadbent Interim Management ("NBIM")
Following NBIM's relaunch in October 2016 under a new Managing Director and the hiring of an entire new team, NBIM is now trading across the majority of our key areas of market and functional specialisations. Unlike many Interim providers NBIM is increasingly operating in the less transactional/commoditised and higher margin markets. As businesses are facing increasingly complex short term challenges, NBI is frequently mandated to find and place Interim experts.
As planned we invested heavily in 2017 in rebuilding our Interim business. NBIM generated net revenues (after interim costs) of GBP711,000 (2016: GBP191,000) resulting in a loss before tax of GBP237,000 (2016: profit GBP60,000). We anticipate that 2018 will see further substantial growth in this business.
Norman Broadbent Solutions ("NBS")
Having been significantly restructured, repositioned and rebranded in 2016, NBS has both successfully promoted staff from within and attracted new talent from competitors. Revenue increased to GBP842,000 (2016: GBP577,000) and its loss before tax reduced to GBP14,000 (2016: loss before tax of GBP357,000).
As with NBES, we see significant opportunities in this part of the market as we blend service lines within our portfolio to provide optimal client solutions ranging from single hires through to longer-term team builds.
Research and Insight ("R&I")
During 2017 we began to invest in R&I, which, in addition to serving our own internal requirements, has started to provide complementary services to clients. R&I is an important strategic differentiator and an enabler of follow-on work, particularly Executive Search. Clients can be provided with research, market insight and business intelligence enabling them to make more informed 'people', organisational or commercial decisions. We see this as an exciting addition to our portfolio and it is a service we are increasingly offering to clients as part of our overall Advisory offering. The revenue arising is included within the Search business.
Norman Broadbent Leadership Consulting ("NBLC")
NBLC produced a greatly improved trading performance in 2017 with repeat client business in particular being reflected in a very strong first half of the year. NBLC revenues (after associate costs) were GBP516,000 (2016: GBP252,000), resulting in a profit before tax of GBP294,000 (2016: Loss GBP56,000).
Financial position
As at 31 December 2017, consolidated net assets were GBP1,990,000 (2016: GBP2,434,000) with net current assets decreasing to GBP316,000 from GBP825,000 in 2016. Group cash amounted to GBP678,000 (2016: GBP963,000).
Net cash outflow from operations in 2017 was GBP2,079,000 (2016: GBP797,000). Net cash inflow from financing activities amounted to GBP1,851,000 (2016: GBP1,404,000) relating primarily to the net funds received from the 2017 Subscription, Secured Loan Notes and utilisation of the invoice discounting facility.
At 31 December 2017 the Group had GBP851,000 of funds drawn down against the revolving invoice discounting facility (2016: GBP444,000) against UK trade receivables of GBP1,371,000 (2016: GBP634,000).
The Directors continue to monitor and manage the Group's working capital very carefully.
Property
On 21st March 2018, Norman Broadbent plc signed a lease to secure new Central London premises of 5,335 sq. feet in Portland House, London SW1. The move, completed on the 30th of April 2018, will enable us to operate out of a brand-enhancing, more modern and efficient, purpose built office reflective of the 'new' Norman Broadbent Group.
This is a significant move for the Company as not only will it generate annualised cost savings during the term of the lease of over GBP300,000 starting from mid-year 2018, but also provides additional capacity to grow.
Current trading
The ongoing reinvention of Norman Broadbent Group is progressing. Our broader, more integrated service proposition is landing well with clients, the business is increasingly competitive, and culturally we are more innovative and collegiate. In summary, the Group is now more relevant and competitive in terms of pricing, proposition and people.
I can report that the first quarter of 2018 at revenue and EBITDA level was ahead of the Board's plan.
While significant progress has been made in terms of new services, hires and our premises move, collegiate working, there is still a way to go in completing this phase of our transformation.
On behalf of the Board I would like to thank our shareholders for their continuing support, our clients for placing their trust in us, and finally our team. We are quite rightly proud of what we are achieving, much of which is down to the hard work, dedication and commitment of my colleagues.
MIKE BRENNAN
Group Chief Executive
11 May 2018
Strategic Report for the year ended 31 December 2017
THE BUSINESS MODEL
Norman Broadbent plc is a leading Professional Services firm with a specific focus on Talent Acquisition & Advisory Services. Since our formation nearly 40 years ago, we have developed a range of complementary service lines consisting of Board & Leadership/Executive Search, Senior Interim Management, Research & Insight, Leadership Consulting & Assessment, and executive level Recruitment Solutions.
The Group operates through independently managed and separately branded businesses which trade independently but collectively share a set of core behavioural and brand values.
STRATEGY AND OBJECTIVES
The Groups strategy is focussed on further developing and strengthening its complementary portfolio of Talent Acquisition and Advisory services via further selective hires and concentrating on driving synergies via cross selling.
RESULTS FOR THE FINANCIAL YEAR
Group revenue from continued operations increased in the year by 15% to GBP6,523,000 (2016: GBP5,661,000), with gross profit of GBP5,039,000 (2016: GBP4,926,000). NBES fees declined by 24% to GBP3,061,000 (2016: GBP4,005,000) reflecting the short term impact on the number of fee earners. Net revenues from NBLC, NBS and NBIM were GBP2,044,000 (2016: GBP1,013,000), reflecting the significant restructuring of NBI and NBS during 2016.
Operating expenditure increased to GBP6,599,000 (2016: GBP6,149,000), reflecting the costs of the restructuring that took place in all businesses during 2016.
The Group reported an operating loss from continued operations in 2017 of GBP1,560,000 (2016: GBP1,223,000) and a retained loss of GBP1,602,000 (2016: GBP998,000).
CASH FLOW AND BALANCE SHEET
Net cash outflow from operations in 2017 was GBP2,079,000 (2016: GBP797,000). Reflecting the improved revenues in Q4, Group debtor days increased to 78 days with net trade receivables at the year-end standing at GBP1,371,000 (2016: GBP697,000). Management continue to monitor this Key Performance Indicator and aim to maintain debtor days at a level which is no higher than 60.
Net cash inflow from financing activities amounted to GBP1,851,000 (2016: GBP1,404,000) relating primarily to the net funds received from the fundraising in September 2017. At 31 December 2017, the Group had GBP851,000 of funds drawn down against the revolving invoice discounting facility (2016: GBP444,000) against UK trade receivables of GBP1,371,000 (2016: GBP634,000).
EARNINGS PER SHARE
The retained loss for 2017 has resulted in a reported loss per share of 3.52 pence (2016: loss per share 5.36 pence). After adding back the cost of share based payments the adjusted loss per share was 3.48 pence (2016: loss per share 5.32 pence).
GOING CONCERN
In light of the current financial position of the Group and on consideration of the business's forecasts and projections, taking account of possible changes in trading performance, the directors have a reasonable expectation that the Group has adequate available resources to continue as a going concern for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing their annual report and financial statements.
MONITORING, RISK AND KPIs
The directors have a responsibility for identifying risks facing each of the businesses and for putting in place procedures to mitigate and monitor risks. Board meetings incorporate, amongst other agenda items, a review of monthly management accounts, operational and financial KPIs and major issues and risks facing the business.
The most important KPIs used in monitoring the business are set out in the following table:
Key performance indicators 2017 2016
------------ ------------
Revenue (continued operations) GBP6,523,000 GBP5,661,000
Operating loss (1,560,000) (1,223,000)
Debtor days 78 days 43 days
------------ ------------
The directors monitor revenue against annual targets, which are adjusted each year to ensure the Group remains on target to achieve its strategic growth plan. Further, given the significant restructuring and refocus of the group, the directors expect Group revenues and operating profits to improve over the next few years.
The principal risks faced by the Group in the current economic climate are considered to be financial, business environment and people related.
Financial - The main financial risks arising from the Group's operations are the adequacy of working capital, interest rate, liquidity and credit risk. These are monitored regularly by the Board and are disclosed further in notes 2 and 19 of the financial statements.
In September 2017, the Group raised GBP1,230,000 (2016: GBP2,300,000) from institutional shareholders.
The business is in the later stages of the turnaround process and is budgeted to be self-funding. In turnarounds there is always a risk that the process could take longer than anticipated which could lead to short term working capital pressures. In the event of such an occurrence the company anticipates working closely with its supportive shareholders to access short term working capital funding.
Business Environment - Demand for services is affected by global and UK specific economic conditions and the level of economic activity in the regions and industries in which the Group operates. When conditions in the economy deteriorate or economic activity slows, many companies hire fewer permanent employees or rely on internal human resource departments to recruit staff. Whilst it appears that the global economy is still growing and the impact of Brexit on the UK economy is lower than expected, should conditions deteriorate in the future then demand for the services offered by the Group could weaken resulting in lower cash flows.
The Group attempts to mitigate this risk by operating across various diverse sectors where demand for such services are stronger.
People - The Group's most vital resource remains its employees and the directors remain committed to retaining and recruiting quality staff who share the Group's culture and values. In a people intensive business, the resignation of key staff, which could lead to them taking clients, candidates and colleagues to another employer, is a significant risk. The Group aims to mitigate this risk by offering competitive remuneration structures, whilst also insisting on employment contracts that contain restrictive covenants that limit a leaver's ability to approach existing clients, candidates and employees.
CAUTIONARY STATEMENT
This Strategic Report has been prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for those strategies to succeed.
The Strategic Report contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
The directors, in preparing this Strategic Report, have complied with s414C of the Companies Act 2006. The Strategic Report has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to Norman Broadbent plc and its subsidiary undertakings when viewed as a whole.
Mike Brennan Will Gerrand Director Director 11 May 2018 11 May 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2017
2017 2016
Note GBP'000 GBP'000
------- -------
CONTINUING OPERATIONS
Revenue 1 6,523 5,661
Cost of sales (1,484) (735)
------- -------
Gross profit 3 5,039 4,926
Operating expenses (6,599) (6,149)
------- -------
Operating loss from continued operations (1,560) (1,223)
Net finance cost 7 (42) (54)
------- -------
LOSS ON ORDINARY ACTIVITIES BEFORE INCOME
TAX 4 (1,602) (1,277)
Income tax expense 6 - -
------- -------
LOSS FROM CONTINUING OPERATIONS (1,602) (1,277)
------- -------
DISCONTINUED OPERATIONS
Profit (Loss) from discontinued operation 8 - 279
------- -------
LOSS FOR THE PERIOD (1,602) (998)
------- -------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (1,602) (998)
------- -------
Loss attributable to:
- Owners of the Company (1,543) (1,304)
- Non-controlling interests (59) 306
------- -------
Loss for the year (1,602) (998)
------- -------
Total comprehensive income attributable
to:
- Owners of the Company (1,543) (1,304)
- Non-controlling interests (59) 306
------- -------
(1,602) (998)
------- -------
Total comprehensive income for the year
Loss per share
- Basic 9 (3.52)p (5.36)p
- Diluted (3.52)p (5.36)p
Adjusted loss per share
- Basic 9 (3.48)p (5.32)p
- Diluted (3.48)p (5.32)p
Loss per share - continuing operations
- Basic 9 (3.52)p (5.25)p
- Diluted (3.52)p (5.25)p
Adjusted loss per share - continuing
operations
- Basic (3.52)p (5.21)p
- Diluted 9 (3.52)P (5.21)p
------- -------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2017
2017 2016
Notes GBP'000 GBP'000
-------- --------
Non-Current Assets
Intangible assets 11 1,363 1,363
Property, plant and equipment 12 47 68
Prepayments and accrued income 14 195 234
Deferred tax assets 6 69 69
-------- --------
TOTAL NON-CURRENT ASSETS 1,674 1,734
-------- --------
Current Assets
Trade and other receivables 14 2,093 1,347
Cash and cash equivalents 15 678 963
-------- --------
TOTAL CURRENT ASSETS 2,771 2,310
-------- --------
TOTAL ASSETS 4,445 4,044
-------- --------
Current Liabilities
Trade and other payables 16 1,179 1,041
Loan notes 17 300 -
Bank overdraft and interest bearing loans 17 851 444
Provisions 22 125 -
Corporation tax liability - -
-------- --------
TOTAL CURRENT LIABILITIES 2,455 1,485
-------- --------
NET CURRENT ASSETS 316 825
-------- --------
Non-Current Liabilities
Provisions 22 - 125
-------- --------
TOTAL LIABILITIES 2,455 1,610
-------- --------
TOTAL ASSETS LESS TOTAL LIABILITIES 1,990 2,434
-------- --------
EQUITY
Issued share capital 19 6,266 6,143
Share premium account 19 13,706 12,685
Retained earnings (17,923) (16,394)
-------- --------
EQUITY ATTRIBUTABLE TO OWNERS OF THE
COMPANY 2,049 2,434
Non-controlling interests (59) -
-------- --------
TOTAL EQUITY 1,990 2,434
-------- --------
These financial statements were approved by the Board of Directors on 11 May 2018 2018
Signed on behalf of the Board of Directors
M Brennan W Gerrand Director Director
Company No 00318267
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2017
CONSOLIDATED GROUP
Attributable to owners of the Company
----------------------------------------------------------------
Share Share Retained Total Non-controlling Total
Capital Premium Earnings Equity interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- --------- ------- --------------- -------
Balance at 1st January
2016 5,901 10,699 (15,101) 1,499 (294) 1,205
Loss for the year (1,304) (1,304) 306 (998)
Adjustment for discontinued
operation
Total other comprehensive
income
-------- -------- --------- ------- --------------- -------
Total comprehensive income
for the year (1,304) (1,304) 306 (998)
-------- -------- --------- ------- --------------- -------
Transactions with owners
of the Company, recognised
directly in equity:
Issue of ordinary shares 242 1,986 - 2,228 - 2,228
Credit to equity for share
based payments - - 11 11 - 11
-------- -------- --------- ------- --------------- -------
Total transactions with
owners of the Company,
recognised directly in
equity 242 1,986 11 2,239 - 2,239
-------- -------- --------- ------- --------------- -------
Change in ownership interest
in subsidiaries
Disposal of non-controlling
interest with change of
control (12) (12)
-------- -------- --------- ------- --------------- -------
Total transactions with
owners of the Company 242 1,986 11 2,239 (12) 2,227
-------- -------- --------- ------- --------------- -------
Balance at 31st December
2016 6,143 12,685 (16,394) 2,434 - 2,434
-------- -------- --------- ------- --------------- -------
Balance at 1st January
2017 6,143 12,685 (16,394) 2,434 - 2,434
-------- -------- --------- ------- --------------- -------
Loss for the year (1,543) (1,543) (59) (1,602)
Adjustment for discontinued
operation
Total other comprehensive
income
-------- -------- --------- ------- --------------- -------
Total comprehensive income
for the year (1,543) (1,543) (59) (1,602)
-------- -------- --------- ------- --------------- -------
Transactions with owners
of the Company, recognised
directly in equity:
Issue of ordinary shares 123 1,021 - 1,144 - 1,144
Credit to equity for share
based payments 14 14 14
-------- -------- --------- ------- --------------- -------
Total transactions with
owners of the Company,
recognised directly in
equity 123 1,021 14 1,158 - 1,158
-------- -------- --------- ------- --------------- -------
Total transaction with
owners of the Company 123 1,021 14 1,158 - 1,158
-------- -------- --------- ------- --------------- -------
Balance at 31st December
2017 6,266 13,706 (17,923) 2,049 (59) 1,990
-------- -------- --------- ------- --------------- -------
Share Capital
This represents the nominal value of shares that have been issued by the Company.
Share Premium
This reserve records the amount above the nominal value received for shares issued by the Company. Share premium may only be utilised to write-off any expenses incurred or commissions paid on the issue of those shares, or to pay up new shares to be allotted to members as fully paid bonus shares.
Retained Earnings
This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the Company's shareholders.
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2017
2017 2016
Notes GBP'000 GBP'000
------- -------
Net cash used in operating activities (i) (2,079) (797)
Cash flows from investing activities
and servicing of finance
Net finance cost (42) (54)
Payments to acquire tangible fixed assets 12 (16) (24)
Disposal of subsidiary, inclusive of
cash disposed of 8 - (15)
------- -------
Net cash used in investing activities (58) (93)
------- -------
Cash flows from financing activities
Proceeds/(Repayment) of borrowings 17 300 (350)
Net cash inflows from equity placing 19 1,144 2,228
Increase/(Repayment) in invoice discounting 17 407 (474)
------- -------
Net cash from financing activities 1,851 1,404
------- -------
Net (decrease)/increase in cash and cash
equivalents (286) 514
Net cash and cash equivalents at beginning
of period 963 448
Effects of exchange rate changes on cash
balances held in foreign currencies 1 1
------- -------
Net cash and cash equivalents at end
of period 678 963
------- -------
Analysis of net funds
Cash and cash equivalents 678 963
Borrowings due within one year (1,151) (444)
Borrowings due within more than one year - -
------- -------
(Net debt)/cash (473) 519
------- -------
Note (i)
Reconciliation of operating loss to net cash from operating activities
2017 2016
GBP'000 GBP'000
------- -------
Operating loss from continued operations (1,560) (914)
Operating profit /(loss) from discontinued operations
(note 8) - (30)
Depreciation/impairment of property, plant and
equipment 37 38
Share based payment charge 14 11
Decrease/(Increase) in trade and other receivables (707) 871
Profit on sale of Investment - (309)
(Decrease)/Increase in trade and other payables 137 (464)
Taxation paid - -
------- -------
Net cash used in operating activities (2,079) (797)
------- -------
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2017
1. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to both years presented unless otherwise stated.
1.1 Basis of preparation
The consolidated financial statements of Norman Broadbent plc ("Norman Broadbent" or "the Company") have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS as adopted by the EU), IFRIC interpretations and the Companies Act 2006 applicable to Companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair value through profit or loss. The consolidated financial statements are presented in pounds and all values are rounded to the nearest thousand (GBP000), except when otherwise indicated.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 1.21.
1.1.1 Going concern
The Group reported an operating loss from continued operations in the year to 31 December 2017 of GBP1.6m compared with an operating loss of GBP1.2m in 2016. In September 2017 the Group raised GBP1.2m of new equity (before expenses) from existing institutional shareholders which has enabled the business to restructure further, to hire additional fee generating staff across the Group and to provide a more stable working capital position.
The Consolidated Statement of Financial Position shows a net asset position at 31 December 2017 of GBP2.0m (2016: GBP2.4m) with cash at bank of GBP0.7m (2016: GBP1.0m). At the date that these financial statements were approved the Group had no overdraft facility, and secured loan notes of 0.3m and its receivable finance (Leumi ABL) which is 100% secured by the Group's trade receivables.
In light of the current financial position of the Group and on consideration of the business' forecasts and projections, taking account of possible changes in trading performance, the directors have a reasonable expectation that the Group has adequate available resources to continue as a going concern for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing their annual report and financial statements.
2 SEGMENTAL ANALYSIS
Management has determined the operating segments based on the reports reviewed regularly by the Board for use in deciding how to allocate resources and in assessing performance. The Board considers Group operations from both a class of business and geographic perspective. Each class of business derives its revenues from the supply of a particular recruitment related service, from retained executive search through to executive assessment and coaching. Business segment results are reviewed primarily to operating profit level, which includes employee costs, marketing, office and accommodation costs and appropriate recharges for management time.
Group revenues are primarily driven from UK operations, however when revenue is derived from overseas business the results are presented to the Board by geographic region to identify potential areas for growth or those posing potential risks to the Group.
i) Class of Business:
The analysis by class of business of the Group's turnover and profit before taxation is set out below:
2017
Executive
Search NBLC NBS NBIM Disc Operation Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- ------- ------- ------- -------------- ----------- -------
Revenue 3,061 728 842 1,892 - - 6,523
Cost of sales (66) (212) (25) (1,181) - - (1,484)
--------- ------- ------- ------- -------------- ----------- -------
Gross profit 2,995 516 817 711 - - 5,039
Operating expenses (3,954) (215) (824) (942) - (627) (6,562)
Depreciation and
amort. (31) (1) (4) (1) - - (37)
Finance costs (15) (6) (3) (5) - (13) (42)
--------- ------- ------- ------- -------------- ----------- -------
Profit/(Loss) before
tax (1,005) 294 (14) (237) - (640) (1,602)
--------- ------- ------- ------- -------------- ----------- -------
2016
Executive
Search NBLC NBS NBIM Disc Operation Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- ------- ------- ------- -------------- ----------- -------
Revenue 4,005 293 577 786 470 - 6,131
Cost of sales (92) (41) (7) (595) - - (735)
--------- ------- ------- ------- -------------- ----------- -------
Gross profit 3,913 252 570 191 470 - 5,396
Operating expenses (4,195) (308) (918) (127) (497) (566) (6,611)
Depreciation and
amort. (29) - (6) - (3) - (38)
Finance costs (17) - (3) (4) - (30) (54)
Exceptional items - - - - 309 - 309
--------- ------- ------- ------- -------------- ----------- -------
Profit/(Loss) before
tax (328) (56) (357) 60 279 (596) (998)
--------- ------- ------- ------- -------------- ----------- -------
ii) Revenue and gross profit by geography
2017 2016 2017 2016
Revenue Revenue Gross Profit Gross Profit
------- ------- ------------ ------------
United Kingdom 6,196 6,030 4,712 5,295
Rest of the world 327 101 327 101
------- ------- ------------ ------------
Total 6,523 6,131 5,039 5,396
------- ------- ------------ ------------
3 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION
2017 2016
GBP'000 GBP'000
------- -------
Loss on ordinary activities before taxation is
stated after charging:
Depreciation and impairment of property, plant
and equipment 37 38
Gain on foreign currency exchange - -
Staff costs (see note 5) 4,652 4,734
Operating lease rentals:
Land and buildings 409 424
Auditors' remuneration:
Audit work 45 49
Non-audit work - -
------- -------
The Company audit fee in the year was GBP14,000 (2016: GBP12,500).
4 STAFF COSTS
The average number of full time equivalent persons (including directors) employed by the Group during the period was as follows:
2017 2016
No. No.
---- ----
Sales and related services 32 45
Administration 17 18
---- ----
49 63
---- ----
Staff costs (for the above persons):
GBP'000 GBP'000
------- -------
Wages and salaries 4,037 4,136
Social security costs 458 450
Defined contribution pension cost 143 137
Share based payment expense 14 11
------- -------
4,652 4,734
------- -------
The emoluments of the directors are disclosed as required by the Companies Act 2006 on page in the Directors' Remuneration Report. The table of directors' emoluments has been audited and forms part of these financial statements. This also includes details of the highest paid director.
5 TAX EXPENSE (a) Tax charged in the income statement
Taxation is based on the loss for the year and comprises:
2017 2016
GBP'000 GBP'000
------- -------
Current tax:
United Kingdom corporation tax at 19% (2016:
20.25%) based on loss for the year - -
Foreign Tax - -
------- -------
Total current tax - -
------- -------
Deferred tax:
Origination and reversal of temporary differences - -
------- -------
Tax charge/(credit) - -
------- -------
(b) Reconciliation of the total tax charge
The difference between the current tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows:
2017 2016
GBP'000 GBP'000
------- -------
Loss on ordinary activities before taxation (1,602) (998)
------- -------
Tax on loss on ordinary activities at standard
UK corporation tax rate of 19.25% (2016: 20%) (305) (199)
Effects of:
Expenses not deductible 23 27
Substantial shareholding exemption (62)
Capital allowances in excess of depreciation 4 4
Intercompany loan write off - 66
Pension accrual movement (3) 3
Losses bought forward utilised (56)
Adjustment to losses carried forward 337 161
------- -------
Current tax charge for the year - -
------- -------
(c) Deferred tax
Tax losses Total
GBP'000 GBP'000
---------- -------
At 1 January 2017 (69) (69)
---------- -------
At 31 December 2017 (69) (69)
---------- -------
Credited to the income statement in 2017
At 31 December 2017 (69) (69)
---------- -------
At 31 December 2017 the Group had capital losses carried forward of GBP8,130,000 (2016: GBP8,130,000). A deferred tax asset has not been recognised for the capital losses as the recoverability in the near future is uncertain. The Group also has GBP13,510,042 (2016: GBP11,761,103 ) trading losses carried forward, which includes GBP8,987,000 losses transferred from BNB Recruitment Consultancy Ltd in 2011. A deferred tax asset of GBP1,288,061 (2016: GBP1,355,756) has not been recognised in the financial statements due to the inherent uncertainty as to the quantum and timing of its utilisation.
The analysis of deferred tax in the consolidated balance sheet is as follows:
2017 2016
GBP'000 GBP'000
------- -------
Deferred tax assets:
Tax losses carried forward 69 69
------- -------
Total 69 69
------- -------
6 NET FINANCE COST
2017 2016
GBP'000 GBP'000
------- -------
Interest payable on bank loans and overdrafts 42 54
------- -------
Total 42 54
------- -------
7 DISCONTINUED OPERATION
In 2016, the Group sold its 51% stake in Social Media Search Limited. Under the terms of the Sale and Purchase Agreement ("SPA"), Norman Broadbent will receive a cash consideration of GBP325,000 for Social Media Search. As at the end of April, the company had received GBP81,000 of the deferred consideration.
2017 2016
GBP'000 GBP'000
------- -------
Results from discontinued operation
Revenue - 470
Operating Expenses - (500)
------- -------
Results from operating activities - (30)
------- -------
Net finance cost - -
Exceptional items - 655
Tax - -
------- -------
Profit/(loss) on ordinary activities before taxation - 625
------- -------
Minority Interest - (306)
------- -------
Profit/(Loss) attributable to the owners - 319
------- -------
Profit on disposal of subsidiary - 309
------- -------
- 628
------- -------
The profit from discontinued operations disclosed within the 2016 Consolidated Income Statement of GBP278,900 consists of the operating loss of (GBP30,000) and the profit on disposal of the subsidiary of GBP309,900. The 2016 exceptional item, relating to the write off of intercompany loan accounts, has been eliminated on consolidation within the Consolidated Income Statement.
Effect of disposal on the financial position of the Group
Trade and other receivables - 42
Cash and cash equivalents - 15
Trade and other payables -(31)
----
Net assets and liabilities - 26
----
Consideration received, satisfied in cash - -
Cash and Cash equivalents disposed of -(15)
----
Net cash outflow -(15)
----
8 EARNINGS PER SHARE
i) Basic earnings per share
This is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period:
2017 2016
----------- -----------
Loss attributable to owners of the company (1,543,350) (1,304,000)
----------- -----------
Weighted average number of ordinary shares 43,882,363 24,316,626
----------- -----------
Total 43,882,363 24,316,626
----------- -----------
ii) Diluted earnings per share
This is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares in the form of employee share options. For these options a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to the outstanding options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
The grants of options in 2017 have both profitability and share price exercise criteria.
2017 2016
----------- -----------
Loss attributable to owners of the company (1,543,350) (1,304,000)
----------- -----------
Weighted average number of ordinary shares 43,882,363 24,316,626
----------- -----------
Total 43,882,363 24,316,626
----------- -----------
iii) Adjusted earnings per share
An adjusted earnings per share has also been calculated in addition to the basic and diluted earnings per share and is based on earnings adjusted to eliminate the effects of charges for share based payments. It has been calculated to allow shareholders to gain a clearer understanding of the trading performance of the Group.
2017 2017 2016 2016 2016
Diluted Diluted
Basic pence pence per Basic pence pence per
GBP'000 per share share GBP'000 per share share
------- ----------- ---------- ------- ----------- ----------
Basic earnings
Loss after tax (1,543) (3.52) (3.52) (1,304) (5.36) (5.36)
------- ----------- ---------- ------- ----------- ----------
Adjustments
Share based payment
charge 14 0.04 0.04 11 0.04 0.04
------- ----------- ---------- ------- ----------- ----------
Adjusted earnings (1,529) (3.48) (3.48) (1,293) (5.32) (5.32)
------- ----------- ---------- ------- ----------- ----------
9 PROFIT OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these accounts. The parent company's loss for the year amounted to GBP649,000 (2016: GBP541,000).
10 INTANGIBLE ASSETS
Goodwill
arising
on consolidation
GBP'000
-----------------
Group
Balance at 1 January 2016 3,690
Balance at 31 December 2016 3,690
-----------------
Balance at 31 December 2017 3,690
-----------------
Provision for impairment
Balance at 1 January 2016 2,327
Balance at 31 December 2016 2,327
-----------------
Balance at 31 December 2017 2,327
Net book value
At 1 January 2016 1,363
-----------------
At 31 December 2016 1,363
-----------------
At 31 December 2017 1,363
-----------------
Goodwill acquired through business combinations is allocated to cash-generating units (CGU) identified at entity level. The carrying value of intangibles allocated by CGU is shown below:
Norman Broadbent
Leadership
Norman Broadbent Consulting Total
GBP'000 GBP'000 GBP'000
---------------- ---------------- -------
At 1 January 2016 1,303 60 1,363
---------------- ---------------- -------
At 31 December 2016 1,303 60 1,363
---------------- ---------------- -------
At 31 December 2017 1,303 60 1,363
---------------- ---------------- -------
In line with International Financial Reporting Standards, goodwill has not been amortised from the transition date, but has instead been subject to an impairment review by the directors of the Group. As set out in accounting policy note 1 on page 31 of the report and accounts, the directors test the goodwill for impairment annually. The recoverable amount of the Group's CGUs are calculated on the present value of their respective expected future cash flows, applying a weighted average cost of capital in line with businesses in the same sector. Pre-tax future cash flows for the next five years are derived from the approved forecasts for the 2017 financial year.
The key assumption applied to the forecasts for the business is that return on sales for Norman Broadbent is expected to be a minimum of 10% per annum for the foreseeable future (2016: 9%) and 19% for Norman Broadbent Leadership Consulting (2016: 19%). Return on sales defined as the expected profit before tax on net revenue. There are only minimal non cash flows included in profit before tax. The rate used to discount the forecast cash flows is 9% (2016: 10%).
The five year forecasts have been prepared using conservative revenue growth rates to reflect the uncertainty that is still present in the economy. Based on the above assumptions, at 31 December 2017 the recoverable value of the Norman Broadbent CGU is GBP1,635,000 and the Norman Broadbent Leadership Consulting CGU is GBP313,000.
11. PROPERTY, PLANT AND EQUIPMENT
Land and Office and
buildings computer Fixtures
- leasehold equipment and fittings Total
GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------- ------------- -------
Group
Cost
Balance at 1 January 2016 84 206 47 337
Additions - 14 10 24
Disposals - (74) - (74)
------------ ---------- ------------- -------
Balance at 31 December 2016 84 146 57 287
------------ ---------- ------------- -------
Additions - 16 - 16
Disposals - - - -
------------ ---------- ------------- -------
Balance at 31 December 2017 84 162 57 303
------------ ---------- ------------- -------
Accumulated depreciation
Balance at 1 January 2016 46 163 46 255
Charge for the year 16 21 1 38
Disposals - (74) - (74)
------------ ---------- ------------- -------
Balance at 31 December 2016 62 110 47 219
------------ ---------- ------------- -------
Charge for the year 16 18 3 37
Disposals - - - -
------------ ---------- ------------- -------
Balance at 31 December 2017 78 128 50 256
------------ ---------- ------------- -------
Net book value
At 1 January 2016 38 43 1 82
------------ ---------- ------------- -------
At 31 December 2016 22 36 10 68
------------ ---------- ------------- -------
At 31 December 2017 6 34 7 47
------------ ---------- ------------- -------
The Group had no capital commitments as at 31 December 2017 (2016: GBPNil).
The above assets are owned by Group companies; the Company has no fixed assets.
12 INVESTMENTS
Shares in
subsidiary
undertakings
GBP'000
-------------
Company
Cost
Balance at 1 January 2016 5,802
-------------
Disposals -
-------------
Balance at 31 December 2016 5,802
-------------
Disposals (see note below) (6)
-------------
Balance at 31 December 2017 5,796
-------------
Provision for impairment
Balance at 1 January 2016 3,926
-------------
Balance at 31 December 2016 3,926
-------------
Impairment for the year 227
-------------
Balance at 31 December 2017 4,153
-------------
Net book value
At 1 January 2016 1,876
-------------
At 31 December 2016 1,876
-------------
At 31 December 2017 1,643
-------------
In 2017, the Company wrote off the value of dormant overseas subsidiaries.
At 31 December 2017 the Company held the following ownership interests:
Description and
Country of incorporation proportion of
Principal Group or registration shares held by
investments: and operation Principal activities the Company
----------------------- ------------------------- --------------------- --------------------
Norman Broadbent England and Wales Executive search 100% ordinary
Executive Search shares
Ltd
Norman Broadbent England and Wales Executive search 100% ordinary
Overseas Ltd shares
Norman Broadbent England and Wales Assessment, coaching 100% ordinary
Leadership Consulting and talent mgmt. shares
Limited
NB Solutions Ltd England and Wales Mezzanine level 100% ordinary
search shares
Bancomm Ltd ** England and Wales Dormant 100% ordinary
shares
Norman Broadbent Republic of Ireland Dormant 100% ordinary
Ireland Ltd* ** shares
Norman Broadbent England and Wales Interim Management 75% ordinary shares
Interim Management
Ltd
* 100 % of the issued share capital of this company is owned by Norman Broadbent Overseas Ltd.
** These companies are exempt from audit by virtue of provisions in the Companies Act 2006. Where required limited assurance procedures have been completed.
The registered office for the subsidiaries are Portland House, Bressenden Place London SW1E 5BH with the exception of Norman Broadbent Ireland.
13 TRADE AND OTHER RECEIVABLES
Group Company
---------------- ----------------
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Trade receivables 1371 711 - -
Less: provision for impairment - (14) - -
------- ------- ------- -------
Trade receivables - net 1371 697 - -
Other debtors 334 326 5 6
Prepayments and accrued income 583 558 283 336
Due from Group undertakings - - 5,344 4,199
------- ------- ------- -------
Total 2,288 1,581 5,632 4,541
------- ------- ------- -------
Non-Current 195 234 195 234
Current 2,093 1,347 5,437 4,307
------- ------- ------- -------
2,288 1,581 5,632 4,541
------- ------- ------- -------
Non-current trade receivables is in relation to the cash consideration due from the sale of SMS.
As at 31 December 2017, Group trade receivables of GBP838,000 (2016: GBP597,000) were past their due date but not impaired. They relate to customers with no default history. The aging profile of these receivables is as follows:
Group Company
------------------ -----------------
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- ------- --------
Up to 3 months 820 597 - -
3 to 6 months 18 - - -
6 to 12 months - - - -
-------- -------- ------- --------
Total 838 597 - -
-------- -------- ------- --------
The largest amount due from a single trade debtor at 31 December 2017 represents 14% (2016: 10%) of the total trade receivables balance outstanding.
As at 31 December 2017, no group trade receivables (2016: GBP14,000) were past their due date and considered impaired. No provision for impairment has been recognised in the financial statements. Movements on the Group's provision for impairment of trade receivables are as follows:
2017 2016
GBP'000 GBP'000
------- -------
At 1 January 14 72
Provision for receivable impairment - 14
Receivables written-off as uncollectable (14) (72)
------- -------
At 31 December - 14
------- -------
Other than the impairment provision provided for aged trade receivables above, there are no other material difference between the carrying value and the fair value of the Group's and parent Company's trade and other receivables.
14 CASH AND CASH EQUIVALENTS
Group Company
---------------- ----------------
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Cash at bank and in hand 678 963 588 843
------- ------- ------- -------
Total 678 963 588 843
------- ------- ------- -------
There is no material difference between the carrying value and the fair value of the Group's and parent Company's cash at bank and in hand.
15 TRADE AND OTHER PAYABLES
Group Company
---------------- ----------------
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Trade payables 602 244 51 41
Due to Group undertakings - - 1,521 1,536
Other taxation and social security 292 322 - -
Other payables 21 65 - -
Accruals 264 410 58 33
------- ------- ------- -------
Total 1,179 1,041 1,630 1,610
------- ------- ------- -------
There is no material difference between the carrying value and the fair value of the Group's and parent company's trade and other payables.
16 BORROWINGS
Group Company
---------------- ----------------
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
Maturity profile of borrowings
Current
Bank overdrafts and interest
bearing loans:
Invoice discounting facility
(see note (a) below) 851 444 - -
Secured Loan notes 300 - 300 -
------- ------- ------- -------
Total 1,151 444 300 -
------- ------- ------- -------
The carrying amounts and fair value of the Group's borrowings, which are all denominated in sterling, are as follows:
Carrying amount Fair value
----------------- ----------------
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
-------- ------- ------- -------
Bank overdrafts and interest
bearing loans:
Invoice discounting facility 851 444 851 444
Secured Loan notes 300 - 300 -
-------- ------- ------- -------
Total 1151 444 1151 444
-------- ------- ------- -------
a) Invoice discounting facilities:
Norman Broadbent Executive Search Limited, NBS and NBIM operate independent invoice discounting facilities, provided by Leumi ABL Limited. Leumi ABL Ltd holds all assets debentures for each company (fixed and floating charges) and also a cross corporate guarantee and indemnity deed dated 20 July 2011. The financial terms of the facilities are outlined below:
Norman Broadbent Executive Search Limited:
Funds are available to be drawn down at an advance rate of 85% against trade receivables of Norman Broadbent Executive Search Limited that are aged less than 120 days, with the facility capped at GBP1,500,000. At 31 December 2017, the outstanding balance on the facility of GBP456,291 (2016: GBP331,000) was secured by trade receivables of GBP555,244 (2016: GBP441,000). Interest is charged on the drawn down funds at a rate of 2.40% (2016: 2.40%) above the bank base rate.
Norman Broadbent Solutions Limited:
Funds are available to be drawn down at an advance rate of 85% against trade receivables of Norman Broadbent Solutions Limited that are aged less than 120 days, with the facility capped at GBP750,000. At 31 December 2017, the outstanding balance on the facility of GBP136,271 (2016: GBP22,000) was secured by trade receivables of GBP166,500 (2016: GBP27,000). Interest is charged on the drawn down funds at a rate of 2.40% (2016: 2.40%) above the bank base rate.
Norman Broadbent Interim Management Limited:
Funds are available to be drawn down at an advance rate of 90% against trade receivables of Norman Broadbent Interim Management Limited that are aged less than 120 days, with the facility capped at GBP750,000. At 31 December 2017, the outstanding balance on the facility of GBP225,454 (2016: GBP92,000) was secured by trade receivables of GBP251,076 (2016: GBP166,000). Interest is charged on the drawn down funds at a rate of 2.40% (2016: 2.40%) above the bank base rate.
Norman Broadbent Leadership Consulting
Funds are available to be drawn down at an advance rate of 85% against trade receivables of Norman Broadbent Leadership Consulting Limited that are aged less than 120 days, with the facility capped at GBP750,000. At 31 December 2017, the outstanding balance on the facility of GBP33,113 was secured by trade receivables of GBP38,659. Interest is charged on the drawn down funds at a rate of 2.40% above the bank base rate.
b) Secured Loan Notes
The GBP350,000 2015 Loan Notes were repaid in full in October 2016. A new GBP300,000 loan note was issued on 21 August 2017, it bears interest at 12%.
17 FINANCIAL INSTRUMENTS
The principal financial instruments used by the Group, from which financial instrument risk arises, are summarised below. All financial assets and liabilities are measured at amortised cost which is not considered to be materially different to fair value.
Amortised Cost
----------------
2017 2016
GBP'000 GBP'000
------- -------
Group
Financial Assets
Trade and other receivables 1,965 1,329
------- -------
Financial Liabilities
Trade and other payables 1,179 1,041
Secured loan notes 300 -
Invoice discounting facility 851 444
------- -------
Amortised Cost
----------------
2017 2016
GBP'000 GBP'000
------- -------
Company
Financial Assets
Trade and other receivables 5,609 4,531
------- -------
Financial Liabilities
Trade and other payables 1,630 1,610
Secured loan notes 300 -
------- -------
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. Details on these risks and the policies set out by the Board to reduce them can be found in Note 2 of the report and accounts.
18 SHARE CAPITAL AND PREMIUM
2017 2016
GBP'000 GBP'000
------- -------
Allotted and fully paid:
Ordinary Shares:
53,885,570 Ordinary shares of 1.0p each (2016:
41,633,320 ) 539 416
------- -------
Deferred Shares:
23,342,400 Deferred A shares of 4.0p each (2016:
23,342,400) 934 934
907,118,360 Deferred shares of 4.0p each (2016:
907,118,360) 3,628 3,628
1,043,566 Deferred B shares of 42.0p each (2016:
1,043,566) 438 438
2,504,610 Deferred shares of 29.0p each (2016:
2,504,610) 727 727
------- -------
5,727 5,727
------- -------
Total 6,266 6,143
------- -------
Deferred A Shares of 4.0p each
The Deferred A Shares carry no right to dividends or distributions or to receive notice of or attend general meetings of the Company. In the event of a winding up, the shares carry a right to repayment only after the holders of Ordinary Shares have received a payment of GBP10,000 per Ordinary Share. The Company retains the right to cancel the shares without payment to the holders thereof. The rights attaching to the shares shall not be varied by the creation or issue of shares ranking parri passu with or in priority to the Deferred A Shares.
Deferred Shares of 4.0p each
The Deferred Shares carry no right to dividends, distributions or to receive notice of or attend general meetings of the Company. In the event of a winding up, the shares carry a right to repayment only after payment of capital paid up on Ordinary Shares plus a payment of GBP10,000 per Ordinary Share. The Company retains the right to transfer or cancel the shares without payment to the holders thereof.
Deferred B Shares of 42.0p each
The Deferred B Shares carry no right to dividends or distributions or to receive notice of or attend general meetings of the Company. In the event of a winding up, the shares carry the right to repayment only after the holders of Ordinary Shares have received a payment of GBP10 million per Ordinary Share. The Company retains the right to cancel the shares without payment to the holders thereof. The rights attaching to the shares shall not be varied by the creation or issue of shares ranking parri passu with or in priority to the Deferred B Shares.
Deferred Shares of 29.0p each
The Deferred Shares carry no right to dividends or distributions or to receive notice of or attend general meetings of the Company. In the event of a winding up, the shares carry the right to repayment only after the holders of Ordinary Shares have received a payment of GBP10,000 per Ordinary Share. The Company retains the right to cancel the shares without payment to the holders thereof.
A reconciliation of the movement in share capital and share premium is presented below:
No. of
ordinary Ordinary Deferred Share
shares shares shares premium Total
(000s) (000s) (000s) (000s) (000s)
--------- -------- -------- -------- -------
At 1 January 2016 17,416 174 5,727 10,699 16,600
Proceeds from share placing
(note (a) below) 24,217 242 - 1,986 2,228
--------- -------- -------- -------- -------
At 31 December 2016 41,633 416 5,727 12,685 18,828
--------- -------- -------- -------- -------
Proceeds from share placing 12,252 123 - 1,021 1,144
--------- -------- -------- -------- -------
At 31 December 2017 53,885 539 5,727 13,706 19,972
--------- -------- -------- -------- -------
a) Share placings in September 2017 and 2016.
On 29 September 2017, the Company issued 12,252,250 new ordinary 1.0p shares for a total cash consideration of GBP1,225,225. Transaction costs of GBP81,444 were incurred resulting in net cash proceeds of GBP1,143,781. On 19 September 2016, the Company issued 24,216,833 new ordinary 1.0p shares for a total cash consideration of GBP2,300,599. Transaction costs of GBP72,599 were incurred resulting in net cash proceeds of GBP2,228,000.
19 SHARE BASED PAYMENTS 19.1 Share Options
The Company has an approved EMI share option scheme for full time employees and directors. The exercise price of the granted options is equal to the market price of the shares on the date of the grant. The Company has no legal or constructive obligation to repurchase or settle the options or warrants in cash.
Options under the Company EMI scheme are conditional on the employee completing three years' service (the vesting period). The EMI options vest in three equal tranches on the first, second and third anniversary of the grant. The options have a contractual option term of either seven or ten years.
Movements in the number of share options and their related weighted average exercise prices are as follows:
Approved EMI
share option scheme
--------------------------
Avg. exercise
price per Number of
share (p) options
------------- -----------
At 1 January 2016 61.84 337,944
Granted 13.50 4,390,550
Forfeited 23.14 (510,607)
------------- -----------
At 31 December 2016 16.21 4,217,887
------------- -----------
Granted 13.50 380,951
Forfeited 18.95 (1,500,327)
------------- -----------
At 31 December 2017 14.54 3,098,511
------------- -----------
Share options outstanding at the end of the year have the following expiry date and exercise prices:
Share options
---------- --------------------
Exercise
Expiry date price per
share
(p) 2017 2016
---------- --------- ---------
2020 52.5 - 95,237
2021 65.5 62,153 148,052
2023 13.5 3,036,358 3,974,597
---------- --------- ---------
Total 3,098,511 4,217,887
---------- --------- ---------
Out of the 3,098,511 outstanding options (2016: 4,217,886), no options were exercisable at the year end (2016: None) as they were all 'underwater'.
The significant inputs into the model in valuing the 2017 option grant were weighted average share price of 12 pence at the grant date, exercise price of 13.5p, volatility of 28%, dividend yield of 0% (2011 and 2010: 0%), an expected option life of 10 years (2011 and 2010: 10 years) and an annual risk-free interest rate of 0.652%. The expected volatility was estimated by reference to the historical volatility of the Company's share price and those of UK quoted companies in a similar business sector. The risk-free interest rate is estimated as the yield on zero coupon UK government bonds of a term consistent with the contractual life of the options granted. Minimal share options were granted during 2017, therefore the same assumptions were used as per the prior year. Also there were no significant change in the company or shareholding during 2017.
20 LEASES
Operating leases
The Group leases its premises. The terms of the leases vary for each property and are tenant repairing.
As at 31 December 2017, the total future value of minimum lease payments due are as follows:
Land and Buildings
--------------------
2017 2016
GBP'000 GBP'000
--------- ---------
Within one year 82 273
Later than one year and not later than five years - 1,056
--------- ---------
Total 82 1,329
--------- ---------
21 PROVISIONS
Group
2017 2016
GBP'000 GBP'000
------- -------
At 1 January 125 125
Provisions made during the year - -
------- -------
At 31 December 125 125
------- -------
Current liability 125 -
Non-current liability - 125
------- -------
At 31 December 125 125
------- -------
On the 6 March 2013 the Company signed a new ten year lease with a five year break for its main office in London. On signing the new lease the Company inherited the office fit-out from the previous tenant. Under the terms of the new lease the Company is obliged to return vacant possession to the landlord with the office returned to its original state. The Company has had the present cost of the future works required to return the office to its original state valued by an independent firm of advisors and this non-current liability of GBP125,000 is provided for in the financial period (2015). The entity moved premises in April 2018, the provision above will be payable once agreed within the next 12 months therefore reclassified as current. The Company received a one-off payment of GBP250,000 in 2013 from the previous tenant in satisfaction of various costs and liabilities that it inherited with the new lease.
22 PENSION COSTS
The Group operated several defined contribution pension schemes for the business. The assets of the schemes were held separately from those of the Group in independently administered funds. The pension cost represents contributions payable by the Group to the funds and amounts to GBP142,000 (2016: GBP137,000). At the year end GBP10,000 of contributions were outstanding (2016: GBP11,000).
23 RELATED PARTY TRANSACTIONS
The following transactions were carried out with related parties:
(a) Purchase of services:
2017 2016
GBP0 GBP0
---- ----
Brian Stephens & Company Ltd 24 24
Connecting Corporates Limited - 25
---- ----
Total 24 49
---- ----
Brian Stephens & Company Ltd invoiced the Group for the provision of services of B Stephens of GBP20,000 and business related travel costs of GBP4,000 (2016 total: GBP24,000). B Stephens is a director of Brian Stephens & Company Ltd. During the prior year the Group acquired research services from Connecting Corporates Limited GBP25,000. The Group held a 51% stake in Connecting Corporates Limited in 2016.
All related party expenditure took place via "arms-length" transactions.
24 RELATED PARTY TRANSACTIONS (a) Key management compensation:
Key management includes Executive and Non-Executive Directors. The compensation paid or payable to the directors can be found in the Directors' Remuneration Report on page 13-15 of the report and accounts.
(b) Year-end payables arising from the purchases of services:
2017 2016
GBP0 GBP0
---- ----
Brian Stephens & Company Ltd 6 4
---- ----
Total 6 4
---- ----
Payables to related parties arise from purchase transactions and are due one month after date of purchase. Payables bear no interest.
25 CONTINGENT LIABILITY
The Company is a member of the Norman Broadbent plc Group VAT scheme. As such it is jointly accountable for the combined VAT liability of the Group. The total VAT outstanding in the Group at the year-end was GBP122,000 (2016: GBP39,000).
26 POST BALANCE SHEET EVENTS
On 21st March 2018, Norman Broadbent plc signed a lease to secure new Central London premises of 5,335 sq. feet in Portland House, London SW1. The move, in April 2018, will enable us to operate out of a brand-enhancing, more modern and efficient, purpose built office reflective of the 'new' Norman Broadbent Group.
27 AVAILIBILITY OF ACCOUNTS AND NOTICE OF ANNUAL GENRAL MEETING
Copies of the Final Report and Annual Accounts (including the notice of Annual General Meeting) will be posted to shareholders on 14(th) of May 2018 and will shortly be available to view on the Company's website (www.normanbroadbent.com/information/investor-relations).
Notice is hereby given that the 79th Annual General Meeting ("AGM") of Norman Broadbent plc will be held at 10am on the 10(th) Floor, Portland House, Bressenden Place, London SW1E 5BH on 6 June 2018.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SFIEEEFASEFI
(END) Dow Jones Newswires
May 14, 2018 02:00 ET (06:00 GMT)
1 Year Norman Broadbent Chart |
1 Month Norman Broadbent Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
