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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Quarto Group Incorporated | LSE:QRT | London | Ordinary Share | COM STK USD0.10 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 140.00 | 120.00 | 150.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMQRT
RNS Number : 8896A
Quarto Group Inc
17 September 2018
THE QUARTO GROUP, INC.
("Quarto" or the "Company" or the "Group")
Half-Year Results for the Six Months Ended 30 June 2018
The Quarto Group, Inc. (LSE: QRT), the leading global illustrated book publisher announces its unaudited half-year results for the six months ended 30 June 2018.
Results ($m) H1 2018 H1 2017 ---------------------------------- -------- -------- Group Revenue 56.2 50.2 Adjusted(2) Group Operating Loss (4.7) (7.2) Group Operating Loss (7.0) (7.6) Adjusted(2) Loss before Tax (6.6) (8.7) Loss before Tax (8.9) (9.2) Loss after Tax (6.7) (5.2) Net Debt 73.2 75.8 1. All results relate to continuing operations.
2. Adjusted measures are stated before amortization of acquired intangibles and exceptional items.
Financial Highlights
-- Encouraging trading performance, ahead of the prior year -- Revenue up 12% -- Improved gross profit margin of 50.1% (2017: 48.2%)
-- Cost-out programme initiated post period end, and significant progress made with our banking syndicate to extend facilities until August 2020
Operational Highlights
-- Solid trading performance in a challenging retail environment in both domestic markets -- US publishing lists revenue up 9%, compared to 2017
-- UK publishing lists revenue up 17%, compared to 2017, driven by a strong contribution from children's imprints
Commenting on the results, Chief Executive, CK Lau said:
"This is an encouraging set of results. We have achieved good year-on-year growth and we are well placed to deliver a solid performance for the full year.
The Group has had to adjust to various transitions in the management of the Company during the first half year. Our resilient and talented staff have stepped up to the challenges we have faced and are committed to delivering on a leaner and more focused publishing programme.
The newly constituted Board are concentrating on delivering stability to the business, and the extension of the banking facilities will enable us to lay down a key building block in returning the Group to full-health."
-S -
For further information please contact: CK Lau, CEO Natacha Jedzinska, Corporate Communications Manager +44 (0)207 700 8075
About The Quarto Group
The Quarto Group (LSE: QRT) creates a wide variety of books and intellectual property products for global distribution, with a mission to inspire life's experiences. Produced in many formats for adults, children and the whole family, our products are visually appealing, information rich and stimulating.
The Group encompasses a diverse portfolio of imprints and businesses that are creatively independent and expert in developing long-lasting content across specific niches of interest.
Quarto sells its products globally in over 50 countries and 40 languages, through a variety of sales channels and partnerships, and five main routes to market - US, UK, International English Language, Foreign Language and other Partnerships.
Quarto employs c.350 talented people in the US, UK, Hong Kong and Australia. The Group was founded in London in 1976. It is domiciled in the US and listed on the London Stock Exchange.
For more information, visit quarto.com, quartoknows.com or follow us on Twitter at @TheQuartoGroup.
This statement will be available at the registered office of the Company. A copy will also be displayed on the Company's website: www.quarto.com.
CHIEF EXECUTIVE'S STATEMENT
SUMMARY
The first six months of 2018 have been challenging as the market place continues to show softness in the book trade, both in the US and the UK. However, trading was encouraging for the first half of the year, with revenue up by 12% at $56.2m (2017: $50.2m). Our children's imprints performed particularly strongly, with revenues up 30%. Revenues from our adult imprints were also up, by 5%. The gross profit margin before amortization of pre-publication costs, was 50.1% (2017: 48.2%). The increased revenues, together with an improved gross profit margin, have resulted in a significantly lower adjusted group operating loss of $4.7m (H1 2017: loss of $7.2m), in what is our seasonally weak half year. The adjusted loss before tax was $6.6m (H1 2017: loss of $8.7m). Net debt at 30 June 2018 was $73.2m (H1 2017: $75.8m), a decrease of $2.6m over the twelve-month period.
Each of our reporting segments produced a solid trading performance. US Publishing revenues were up 9% compared to the prior year, UK publishing revenues were up 17% and Q Partners revenues were up 1%, resulting in an improvement in the Group's adjusted operating result, as shown in the table below. The US and UK publishing segments both benefited from an improved seasonal split of co-edition revenues, with a higher percentage than normal of expected full-year revenues achieved in the first half.
The book store market continues to be slow and this is likely to continue for the remainder of the year. We may also see further consolidation in the book trade and a continued pattern of more frequent smaller orders, which puts pressure on the supply chain. The Group expects that its strong autumn and holiday publishing programme, resurgent backlist and list of break-out titles will contribute to a positive year-end.
OPERATING REVIEW
Revenue ($m) H1 2018 H1 2017 ------------------- -------- ------- United States 34.7 32.1 United Kingdom 8.4 7.5 Rest of the World 6.8 5.4 Europe 6.3 5.2 ------------------- -------- ------- Total Revenue 56.2 50.2 ------------------- -------- ------- Adjusted Operating Loss ($m) H1 2018 H1 2017 ------------------------------- -------- -------- US Publishing (0.6) (1.7) UK Publishing (2.0) (3.6) Q Partners (0.1) (0.1) Group overhead (2.0) (1.8) ------------------------------- -------- -------- Total adjusted operating loss (4.7) (7.2) ------------------------------- -------- --------
Note: Revenue is shown by destination; Adjusted Operating Profit is shown by segment.
Continuing Publishing Operations
The Group's increase in revenue this year is a result of several factors prompted by our strong frontlist publishing programme, and backlist sales particularly from titles published in prior years. The highlights are our Little People Big Dreams list of titles which is now approaching 1 million copies in print and still growing. Our line of healthy cookery titles, led by our Keto cookery programme, has been very successful, with almost 600,000 copies in print. Returns, which were high last year when the colouring books fad ended, were at a more normalized level in 2018.
The revenue for our US publishing lists was up 9%, compared to the prior year, with a strong performance from our Beverly based imprints, Quarry and Fair Winds Press. In addition, Racepoint Publishing and becker&mayer! books achieved increased revenues. A strength of the US programme has been our ability to grow the specialty retailer accounts base, as the uncertainty of the book trade continues to show lower sales in our publishing categories.
The revenue for our UK publishing lists was up 17%, mainly driven by our children's category, led by Frances Lincoln Children's, which has performed well in all markets. The Little People Big Dreams series continues to be a major success; we are adding additional titles to the programme this autumn, and next year will be expanding the list to include inspirational male role models. Young Quarto has also performed strongly in the first half, selling well in the book trade. Although we have had a good first half in co-edition, sales to our key co-edition publishers for the second half of the year are expected to be slower. The launch of our Build and Become series (White Lion Publishing) has been well received and, with another four titles to come, we expect continued growth in the series.
Our international English language sales have seen a good uplift at the start of the year. We have already matched full-year sales from the prior year with a strong contribution from our Australian, Middle Eastern and Asian markets.
We expect our foreign language sales to be slightly lower than the prior year as a result of market place uncertainty. 2017 was a record year for our foreign language sales team, significantly increasing our market reach and growing the business in Asia.
Q Partners, our publishing partners and distribution business, has performed in line with the prior year's results. Sales have been slow in Brazil and the launch of Quarto Iberoamericana, our Spanish language partnership, has still to reach critical mass.
Cost-out programme
We have initiated a cost-out programme, which is designed to achieve: a right-sizing of the Group; a path to sustainable debt reduction; a focus on our core strengths; and a disciplined business model.
The process involved a thorough review of key areas of expenditure, including but not limited to, pre-publication expenditure, occupancy costs, payroll and discretionary expenditure. The benefit of the cost-out programme will not flow through immediately, as we will have to incur one-time exceptional costs, mainly in 2018, to implement the plan.
Refinancing
Significant progress has been made with our banks, to extend our facilities to August 2020. The key terms, which include a debt reduction programme, have been agreed and we expect to be able to announce details of the refinancing in the short term.
Year end
We have decided to continue the historical year-end of 31 December - the previous Board had agreed a change to 31 March. By doing this, we avoid the unnecessary time and cost of carrying out the additional work that would have been required in restating comparatives and preparing additional transitional reports.
OUTLOOK
We have produced a strong first-half performance compared to last year, and we are well placed to deliver a solid result for the full year.
The newly constituted Board are fully focused on achieving stability in the business after a period of considerable change. The extension of the banking facilities will create financial stability which is a key building block in returning the Group to full-health. This will allow us to concentrate on the production of the profitable and beautifully illustrated books for which Quarto is so well-known.
On behalf of the Board, I would like to thank all staff for their continued support and loyalty during this recent period of change and uncertainty, as well as our partners and suppliers across the world.
CK Lau
Chief Executive
THE QUARTO GROUP, INC.
Condensed Consolidated Income Statement
For the six months ended 30 June 2018
Hot Features
Premium
Six months Six months Year ended
to to 31 December
30 June 2018 30 June 2017 2017
Unaudited Unaudited Audited
Note $'000 $'000 $'000
Continuing operations
Revenue 2 56,174 50,159 152,512
Cost of sales (44,237) (40,914) (109,848)
---------------------------------------- ---- ------------- ------------- ------------
Gross profit 11,937 9,245 42,664
Distribution costs (3,778) (3,265) (7,549)
Administrative expenses (12,838) (13,187) (27,922)
---------------------------------------- ----
Operating (loss)/profit before
amortisation of acquired intangibles
and exceptional items (4,679) (7,207) 7,193
Amortisation of acquired intangibles (428) (418) (840)
Exceptional items 3 (1,891) - (24,235)
---------------------------------------- ---- ------------- ------------- ------------
Operating loss 2 (6,998) (7,625) (17,882)
Finance income - - 25
Finance costs (1,902) (1,528) (3,325)
---------------------------------------- ---- ------------- ------------- ------------
Loss before tax (8,900) (9,153) (21,182)
Tax credit 4 2,225 2,655 1,480
---------------------------------------- ---- ------------- ------------- ------------
Loss for the period from continuing
operations (6,675) (6,498) (19,702)
Discontinued operations
Profit for the period from discontinued
operations 5 - 1,243 1,163
---------------------------------------- ----
Loss for the period (6,675) (5,255) (18,539)
======================================== ==== ============= ============= ============
Attributable to:
Owners of the parent (6,675) (5,229) (18,513)
Non-controlling interests - (26) (26)
---------------------------------------- ---- ------------- ------------- ------------
(6,675) (5,255) (18,539)
======================================== ==== ============= ============= ============
Loss per share (cents)
From continuing operations
Basic 6 (35.5) (31.8) (96.4)
Diluted 6 (35.5) (31.8) (96.4)
From continuing and discontinued
operations
Basic 6 (35.5) (25.6) (90.6)
Diluted 6 (35.5) (25.8) (90.6)
THE QUARTO GROUP, INC.
Condensed Consolidated Income Statement
For the six months ended 30 June 2018
Six months Six months Year ended
to to 31 December
30 June 2018 30 June 2017 2017
Unaudited Unaudited Audited
$'000 $'000 $'000
Loss for the period (6,675) (5,255) (18,539)
Other comprehensive income which
may be reclassified to profit or
loss
Foreign exchange translation differences (691) 267 35
Cash flow hedge: Profits arising
during the period 26 30 25
Reclassification to income statement
on disposal of businesses - 3,540 3,540
Tax relating to items that may be
reclassified to profit or loss - - 471
----------------------------------------- ------------- ------------- ------------
Total comprehensive expense for
the period (7,340) (1,418) (14,468)
========================================= ============= ============= ============
Attributable to:
Owners of the parent (7,340) (1,392) (14,442)
Non-controlling interests - (26) (26)
----------------------------------------- ------------- ------------- ------------
(7,340) (1,418) (14,468)
========================================= ============= ============= ============
THE QUARTO GROUP, INC.
Condensed Consolidated Balance Sheet
At 30 June 2018
31 December
30 June 2018 30 June 2017 2017
Unaudited Unaudited Audited
Note $'000 $'000 $'000
Non-current assets
Goodwill 19,144 36,468 19,286
Other intangible assets 3,025 3,816 3,516
Property, plant and equipment 1,870 2,296 2,129
Intangible assets: Pre-publication
costs 60,373 63,946 60,278
Deferred tax assets 3,890 2,824 3,901
----------------------------------- ---- ------------ ------------ -----------
Total non-current assets 88,302 109,350 89,110
----------------------------------- ---- ------------ ------------ -----------
Current assets
Inventories 24,574 21,159 22,637
Trade and other receivables 36,935 41,005 53,460
Derivative financial instruments 191 179 205
Cash and cash equivalents 8 5,047 6,800 17,946
Assets held for sale - 949 -
----------------------------------- ---- ------------ ------------ -----------
Total current assets 66,747 70,092 94,248
----------------------------------- ---- ------------ ------------ -----------
Total assets 155,049 179,442 183,358
----------------------------------- ---- ------------ ------------ -----------
Current liabilities
Short term borrowings 8 (78,294) (5,000) (5,000)
Derivative financial instruments - (58) -
Trade and other payables (47,853) (40,233) (60,796)
Tax payable (1,268) (1,695) (5,243)
Liabilities held for sale - (198) -
----------------------------------- ---- ------------ ------------ -----------
Total current liabilities (127,415) (47,184) (71,039)
----------------------------------- ---- ------------ ------------ -----------
Non-current liabilities
Medium and long term borrowings 8 - (77,720) (76,907)
Deferred tax liabilities (8,397) (11,093) (8,520)
Tax payable (1,016) - (1,116)
Other payables (1,524) (6,358) (1,673)
----------------------------------- ---- ------------ ------------ -----------
Total non-current liabilities (10,937) (95,171) (88,216)
----------------------------------- ---- ------------ ------------ -----------
Total liabilities (138,352) (142,355) (159,255) ----------------------------------- ---- ------------ ------------ ----------- Net assets 16,697 37,087 24,103 =================================== ==== ============ ============ =========== Equity Share capital 2,045 2,045 2,045 Paid in surplus 33,764 33,764 33,764 Retained profit and other reserves (19,112) 1,278 (11,706) ----------------------------------- ---- ------------ ------------ ----------- Total equity 16,697 37,087 24,103 =================================== ==== ============ ============ ===========
THE QUARTO GROUP, INC.
Condensed Consolidated Statement of Changes in Equity for the six months ended 30 June 2018
Equity
attributable
to owners
Share Paid in Hedging Translation Retained of the Non-controlling
capital surplus reserve reserve earnings parent interests Total
$000 $000 $000 $000 $000 $000 $000 $000
Balance at 1
January
2017 2,045 33,764 140 (8,850) 12,120 39,219 4,892 44,111
Loss for the period - - - - (5,229) (5,229) (26) (5,255)
Foreign exchange
translation
differences - - - 267 - 267 - 267
Reclassification to
income
statement on
disposal
of businesses - - - 3,540 - 3,540 - 3,540
Cash flow hedge:
profits
arising during the
period - - 30 - - 30 - 30
Total
comprehensive
(expense)/income
for the period - - 30 3,807 (5,229) (1,392) (26) (1,418)
------------------- ------- ------- ------- ----------------------- --------- ------------ --------------- -------
Dividends to
shareholders - - - - (2,018) (2,018) - (2,018)
Dividend in-specie
paid
to non-controlling
interests - - - - - - (3,744) (3,744)
Adjustment arising
from
change in
non-controlling
interests - - - - 1,122 1,122 (1,122) -
Share based payment
charge - - - - 156 156 - 156
Balance at 30 June
2017 2,045 33,764 170 (5,043) 6,151 37,087 - 37,087
=================== ======= ======= ======= ======================= ========= ============ =============== =======
Balance at 1
January
2018 2,045 33,764 165 (4,793) (7,078) 24,103 - 24,103
Loss for the period - - - - (6,675) (6,675) - (6,675)
Foreign exchange
translation
differences - - - (691) - (691) - (691)
Cash flow hedge:
profits
arising during the
period - - 26 - - 26 - 26
Tax relating to
items
that may be
reclassified
to profit or loss - - - - - - - -
------------------- ------- ------- ------- ----------------------- --------- ------------ --------------- -------
Total comprehensive
(expense)/income
for the period - - 26 (691) (6,675) (7,340) - (7,340)
------------------- ------- ------- ------- ----------------------- --------- ------------ --------------- -------
Dividends to
shareholders - - - - - - - -
Share based payment
credit - - - - (66) (66) - (66)
Balance at 30 June
2018 2,045 33,764 191 (5,484) (13,819) 16,697 - 16,697
=================== ======= ======= ======= ======================= ========= ============ =============== =======
THE QUARTO GROUP, INC.
Condensed Consolidated Statement of Changes in Equity for the year ended 31 December 2017
Equity
Paid attributable
Share in Hedging Translation Retained to owners of Non-controlling
capital surplus reserve reserve earnings the parent interests Total
$000 $000 $000 $000 $000 $000 $000 $000
Balance at 1
January
2017 2,045 33,764 140 (8,850) 12,120 39,219 4,892 44,111
Loss for the year - - - - (18,513) (18,513) (26) (18,539)
Foreign exchange
translation
differences - - - 46 - 46 (11) 35
Reclassification
to income
statement on
disposal
of businesses - - - 3,540 - 3,540 - 3,540
Cash flow hedge:
profits
arising during
the year - - 25 - - 25 - 25
Tax relating to
items
that may be
reclassified
to profit or
loss - - - 471 - 471 - 471
Total
comprehensive
income
for the year - - 25 4,057 (18,513) (14,431) (37) (14,468)
----------------- ------- ------- ------- ----------------------- --------- ------------ --------------- --------
Dividends to
shareholders - - - - (2,018) (2,018) - (2,018)
Dividend
in-specie paid
to
non-controlling
interests - - - - - - (3,744) (3,744)
Adjustment
arising from
change in
non-controlling
interests - - - - 1,111 1,111 (1,111) -
Share based
payment charge - - - - 222 222 - 222
Balance at 31
December
2017 2,045 33,764 165 (4,793) (7,078) 24,103 - 24,103
================= ======= ======= ======= ======================= ========= ============ =============== ========
THE QUARTO GROUP, INC.
Condensed Consolidated Cash Flow Statement
For the six months ended 30 June 2018
Six months Six months Year ended
to to 31 December
30 June 2018 30 June 2017 2017
Unaudited Unaudited Audited
$'000 $'000 $'000
Loss for the period (6,675) (5,255) (18,539)
Adjustments for:
Net finance costs 1,902 1,528 3,300
Depreciation of property, plant
and equipment 357 381 817
Software amortisation 137 156 315
Tax credit (2,225) (2,655) (1,480)
Impairment of goodwill - - 17,418
Impairment of pre-publication
costs - - 4,868
Share based payments (66) 156 222
Amortisation of acquired intangibles 428 418 841
Gain on divestment of businesses - (2,538) (2,541)
Amortisation and amounts written
off pre-publication costs 16,206 14,921 32,212
Movement in fair value of derivatives (26) (31) (130)
Operating cash flows before movements
in working capital 10,038 7,081 37,303
(Increase)/decrease in inventories (2,030) 2,410 1,281
Decrease/(increase) in receivables 16,314 10,923 (784)
(Decrease)/increase in payables (13,086) (11,296) 6,822
--------------------------------------------------- ------------- ------------- ------------
Cash generated by operations 11,236 9,118 44,622
Income taxes paid (1,865) - -
--------------------------------------------------- ------------- ------------- ------------
Net cash from operating activities 9,371 9,118 44,622
Investing activities
Interest received - - 25
Investment in pre-publication
costs (16,886) (16,222) (35,551)
Purchases of property, plant and
equipment (121) (639) (1,063)
Purchase of software (82) (212) (266)
Disposal of subsidiaries - 3,650 4,588
Acquisition of publishing assets - (4,041) (7,041)
--------------------------------------------------- ------------- ------------- ------------
Net cash used in investing activities (17,089) (17,464) (39,308)
Financing activities
Dividends paid - (2,018) (2,018)
Interest payments (1,651) (1,322) (2,935)
External loans repaid (8,633) (5,432) (8,271)
External loans drawn 5,000 5,000 6,600
Net cash used in financing activities (5,284) (3,772) (6,624)
Net decrease in cash and cash
equivalents (13,002) (12,118) (1,310)
Cash and cash equivalents at beginning
of period 17,946 18,824 18,824
Foreign currency exchange differences
on cash and cash equivalents 103 94 432
--------------------------------------------------- ------------- ------------- ------------
Cash and cash equivalents at end
of period 5,047 6,800 17,946
=================================================== ============= ============= ============
THE QUARTO GROUP, INC.
Notes to the condensed financial statements
1. Interim Statement
These interim consolidated financial statements are for the half year to 30 June 2018. They were approved by the board on 17 September 2018. These results are unaudited and have not been reviewed by the Group's auditor. The comparative figures for the six months to 30 June 2017 are also unaudited and derived from the interim financial statements for that period.
The information for the year ended 31 December 2017 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.
Basis of preparation
These interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, "Interim Financial Reporting", as adopted by the European Union.
The Directors have formed a judgement that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements. The Group has committed facilities of $80.0m through to 30 April 2019. The Group has complied with its bank covenants and is budgeted to do so for the foreseeable future.
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2017 as described in those financial statements.
2. Segmental analysis
US UK Q Partners
Six months to 30 June 2018 Publishing Publishing Total
$000 $000 $000 $000
Revenue 29,180 24,288 2,706 56,174
============ ============ =========== ========
Operating profit before amortisation
of acquired intangibles and
exceptional items (569) (1,980) (121) (2,670)
Amortisation of acquired intangibles (298) (130) - (428)
------------ ------------ ----------- --------
Segment result (867) (2,110) (121) (3,098)
Unallocated corporate expenses (2,009)
Exceptional items (1,891)
--------
Operating loss (6,998)
Finance costs (1,902)
--------
Loss before tax (8,900)
Tax credit 2,225
--------
Loss after tax (6,675)
========
Q
Six months to 30 June 2017 US Publishing UK Publishing Partners Total
$000 $000 $000 $000
Revenue 26,656 20,834 2,669 50,159
============== ============== ========== ========
Operating profit before amortisation
of acquired intangibles and
exceptional items (1,712) (3,577) (161) (5,450)
Amortisation of acquired intangibles (298) (120) - (418)
-------------- -------------- ---------- --------
Segment result (2,010) (3,697) (161) (5,868)
Unallocated corporate expenses (1,757)
Exceptional items -
--------
Operating (loss) (7,625)
Finance costs (1,528)
--------
Loss before tax (9,153)
Tax credit 2,655
--------
Loss after tax from continuing
operations (6,498)
Profit after tax from discontinued
operations 1,243
--------
Loss after tax (5,255)
========
2. Segmental analysis (continued)
Year ended 31 December 2017 US Publishing UK Publishing Q Partners Total
$000 $000 $000 $000
Revenue 74,134 72,737 5,641 152,512
============== ============== =========== =========
Operating profit before amortisation
of acquired intangibles and
exceptional items 4,641 7,099 (431) 11,309
Amortisation of acquired intangibles (596) (244) - (840)
-------------------------------------- -------------- -------------- ----------- ---------
Segment result 4,045 6,855 (431) 10,469
Exceptional items:
Exceptional item - impairment
of Goodwill (17,100) (314) - (17,414)
Exceptional item - pre-publication
asset impairment (1,041) (3,827) - (4,868)
Exceptional items - other (82) (842) (46) (970)
-------------------------------------- -------------- -------------- ----------- ---------
Operating (loss)/profit (14,178) 1,872 (477) (12,783)
Unallocated corporate expenses (4,116)
Corporate exceptional items (983)
---------
Operating loss (17,882)
Finance income 25
Finance costs (3,325)
---------
Loss before tax (21,182)
Tax 1,480
---------
Loss after tax from continuing
operations (19,702)
Profit after tax from discontinued
operations 1,163
---------
Loss after tax (18,539)
=========
Geographical revenue
The Group generates its revenue in the
following geographical areas:
Six months Six months Year ended
to to 31 December
30 June 2018 30 June 2017 2017
Unaudited Unaudited Audited
$'000 $'000 $'000
United States 34,690 32,068 86,444
United Kingdom 8,407 7,486 20,256
Europe 6,293 5,189 29,098
Rest of the World 6,784 5,416 16,714
Total 56,174 50,159 152,512
========================= =============== ============== =============
3. Exceptional items
Six months Six months
to to Year ended
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
$'000 $'000 $'000
Exceptional items comprised:
Goodwill impairment - - 17,414
Reorganisation costs
* Impairment of pre-publication intangible assets - - 4,868
* Staff costs 132 - 544
* Royalty advance provisions - - 409
* Inventory provisions - - 75
* Refinancing costs 893 - 597
Board changes 866 - -
Aborted corporate transaction costs - - 241
Aborted business acquisition costs - - 87
Total 1,891 - 24,235
============================================================= =========== =========== =============
4. Taxation
Taxation for the six months to 30 June 2018 is based on the Group estimated underlying tax rate for the year.
5. Discontinued operations
On 30 March 2017, the Group completed the disposal of its 75% interest in Regent Publishing Services Limited ("Regent"), its Hong Kong based publishing services business. On 3 April 2017, the Group completed the disposal of its 100% share of Books & Gifts Direct Pty Limited ("BGD Australia"), its direct sales business in Australia. On 7 July 2017, the Group completed the disposal of the trade and selected net assets of Books & Gifts Direct Limited ("BGD New Zealand"), its direct sales business in New Zealand. At 30 June 2017, this business was disclosed as a discontinued operation held for sale. The final loss on disposal was accounted for in the year ended 31 December 2017.
These disposals were completed in line with the Group's strategy of disposing of non-core businesses. Proceeds from the disposal were used to manage the Group's net debt position as received. The results of the discontinued operations and the profit or loss on disposal were included in the consolidated income statement, under discontinued operations,
6. Earnings per share
Six months Six months
to to Year ended
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
$'000 $'000 $'000
From continuing operations
Loss for the purposes of basic and diluted
earnings per share, being net loss attributable
to owners of the parent (6,675) (6,498) (19,702)
Amortisation of acquired intangibles
(net of tax) 321 293 591
Exceptional items (net of tax) 1,418 - 22,852
--------------------------------------------------- ---------- ---------- ------------
(Loss)/earnings for the purposes of
adjusted earnings per share (4,936) (6,205) 3,741
=================================================== ========== ========== ============
From continuing and discontinued operations
Loss for the purposes of basic and diluted
earnings per share, being net loss attributable
to owners of the parent (6,675) (5,229) (18,513)
Amortisation of acquired intangibles
(net of tax) 321 293 591
Exceptional items (net of tax) 1,418 - 22,852
(Profit) from discontinued operations - - (1,189)
--------------------------------------------------- ---------- ---------- ------------
Adjusted earnings attributable to owners
of the parent (4,936) (4,936) 3,741
=================================================== ========== ========== ============
Number Number Number
Weighted average number of shares 20,444,450 20,444,450 20,444,450
Dilutive outstanding options awards 400,185 626,167 575,631
--------------------------------------------------- ---------- ---------- ------------
Diluted weighted average number of 20,844,635 21,070,617 21,020,081
=================================================== ========== ========== ============
(Loss)/earnings per share (cents) Cents Cents Cents
From continuing operations
Basic (32.6) (31.8) (96.4)
Diluted (32.6) (31.8) (96.4)
Adjusted basic (24.1) (30.4) 18.3
Adjusted diluted (24.1) (30.4) 17.8
From continuing and discontinued operations
Basic (35.5) (25.6) (90.6)
Diluted (35.5) (25.8) (90.6)
From discontinued operations
Basic - 6.2 5.8
Diluted - 6.0 5.7
Discontinued operations earnings
Profit for the period from discontinued
operations - 1,243 1,163
Add: non-controlling interest share
of loss - 26 26
---------- ---------- ------------
- 1,269 1,189
---------- ---------- ------------
THE QUARTO GROUP, INC.
Notes to the condensed financial statements
7. Dividends
Six months Six months
to to Year ended
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
$'000 $'000 $'000
Amounts recognised as distributions
to equity holders in the period:
Final dividend for the year ended 31
December 2017 of nil (2016: 9.87c/7.95p) - 2,018 -
Total dividend paid for the period - 2,018 -
===================================================== ========== ========== ============
The Quarto Group, Inc., as a US incorporated company, is required to collect US dividend withholding taxes on dividend distributions made to its non-US shareholders. The US dividend withholding tax is generally 30% of any dividends paid to Quarto's non-US shareholders, but this amount can potentially be reduced pursuant to an applicable income tax treaty between the US and the country of residence of the non-US shareholder. For example, under the US/UK income tax treaty, the US dividend withholding tax rate can range from nil (applicable to certain UK resident pension trusts and tax-exempt entities) to 15% (applicable to UK resident individual shareholders and certain UK corporate shareholders). For US shareholders, no US dividend withholding tax is generally applicable. It should be noted that certain documentation requirements must be met by all shareholders prior to the payment of any dividends to certify their status as a US or non-US shareholder, and, if a non-US shareholder to claim any applicable benefits under the US/UK or other applicable income tax treaty. Each shareholder should consult their own tax adviser to determine whether and to what extent they may be entitled to claim a reduced amount of US dividend withholding taxes under a US income tax treaty.
8. Net debt
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
$'000 $'000 $'000
Net debt comprised:
Cash and cash equivalents 5,047 6,800 17,946
Cash included in assets held for
sale - 128 -
Short term borrowings (78,294) (5,000) (5,000)
Medium and long-term borrowings - (77,720) (76,907)
Net debt (73,247) (75,792) (63,961)
=========== =========== ============
At 30 June 2018, the Group has a $80.0m syndicated facility, comprising a term loan and revolving credit facility. These facilities expire on 30 April 2019 and are subject to covenants, which were all met in the current period.
9. Principal risks and uncertainties facing the Group
There have been no changes to the principal risks and uncertainties facing the Group since the year-end. These are disclosed on pages 28 and 29 of the 2017 Annual Report.
10. Financial Instruments
There are no material differences between the fair value of financial instruments and their carrying value.
11. Management Statement
This Interim Management Report (IMR) has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.
The IMR 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 but 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.
Responsibility statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements, which has been prepared in accordance with IAS 34 "Interim Financial Reporting", gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole as required by DTR 4.2.4R;
(b) the interim management report includes a fair review of the information required by DTR 4.27R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
(c) the interim management report includes a fair review of the information required by DTR 4.28R (disclosure of related party transactions and changes therein).
By the order of the board
CK Lau Andrew Cumming Chief Executive Officer Chairman 17 September 2018 17 September 2018
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR FKQDBOBKDPCD
(END) Dow Jones Newswires
September 17, 2018 02:00 ET (06:00 GMT)
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