Buy
Sell
Share Name Share Symbol Market Type Share ISIN Share Description
The Simplybiz Group Plc LSE:SBIZ London Ordinary Share GB00BG1THS43 ORD GBP0.01
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -3.50 -2.4% 142.50 140.50 149.50 142.50 142.50 142.50 2,000 08:58:29
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 62.8 10.8 9.3 15.4 138

SimplyBiz Group PLC (The) Half Year Results

15/09/2020 7:00am

UK Regulatory (RNS & others)


The Simplybiz (LSE:SBIZ)
Historical Stock Chart


From Aug 2020 to Oct 2020

Click Here for more The Simplybiz Charts.

TIDMSBIZ

RNS Number : 9630Y

SimplyBiz Group PLC (The)

15 September 2020

15 September 2020

The SimplyBiz Group plc

("SimplyBiz", the "Company" or the "Group")

Half-year results for the six months ended 30 June 2020

Resilient Performance - Digital Acceleration

SimplyBiz (AIM: SBIZ), a leading independent provider of compliance, technology and business services to financial advisers and financial institutions in the UK, today announces its unaudited results for the six months ended 30 June 2020.

Financial highlights:

   --    Revenue of GBP28.9m (H1 2019: GBP29.1m) 
   --    Operating profit of GBP5.0m (H1 2019: GBP3.2m) 
   --    Adjusted EBITDA*(1) of GBP7.4m (H1 2019: GBP8.0m) 
   --    Adjusted EBITDA*(1) margin of 25.5% (H1 2019: 27.5%) 
   --    Adjusted EPS *(2) of 4.22p (H1 2019: 5.57p) 
   --    Free cash flow conversion*(3) of 65% (H1 2019: 43%) 
   --    30 June 2020 net debt of GBP25.8m (30 June 2019: GBP30.1m) 
   --    Full year guidance maintained - adjusted EPS no less than 11.0p (PY: 13.0p) 

Operational highlights:

   --    Digital strategy accelerated 
   --    Scale and growth in intermediary services 
   --    Decisive cost control and efficiency improvements 
   --    Strong performance and contribution from Defaqto 
   --    Mortgage completions of GBP7.4bn 
   --    Awarded Service Company of the Year 

Operational Update

The company took strong and positive action within the first week of national lockdown to successfully ensure it could fully support its customers and colleagues. All services to intermediary customers were moved onto a proprietary digital platform and delivered without disruption. Decisive cost control and efficiency improvements were made which will deliver sustained margin benefits in the future. Fintech & Research remained resilient and robust over the period with continued product developments to support our future growth.

The Company's mortgage valuation business and events programme were significantly impacted by the lockdown, though volumes moderately increased in June. Management expects a continued slow recovery in the housing market during the second half of the year. Mortgage completions were consistent with prior year, further demonstrating the resilience of our customer base and services.

Management quickly and successfully moved to agile working, bringing forward and enhancing developments to the digital platform, enhancing the delivery of services.

Dividend

As stated in the Operational & COVID-19 Update announcement on 27 April 2020 and Pre-Close Statement on 23 July 2020, the Board does not intend to recommend an interim dividend in respect of the current financial year. A further update on the FY20 dividend will be provided in January 2021.

Matt Timmins, Joint CEO of The SimplyBiz Group plc, commented:

"We are delighted to report strong and resilient trading for H1 2020, demonstrating the robust nature of our business. We benefitted from an improving quality of our underlying earnings, under-pinned by six full months trading from Defaqto which helped offset a significant reduction in valuation income during the period. The quality of our revenues, the resilience of our customers, and the benefits of a stronger digital delivery platform have enabled strong trading during challenging times. We have responded quickly and decisively to deliver growth in key strategic areas, whilst improving the quality of our underlying earnings.

We have accelerated our digital strategy. This data led, digital delivery, will further improve our quality of earnings, margins and cash generation going forward, whilst also improving customer service."

"On behalf of the Board, I would like to thank all of our colleagues, customers, and wider stakeholders for their support during these unprecedented times."

*(1) Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share option charges and operating exceptional costs. Adjusted profit before and profit after tax exclude operating exceptional costs and amortisation of intangible assets arising on acquisition.

*(2) Adjusted Earnings Per Share is calculated as adjusted profit after tax, which excludes operating exceptional costs and amortisation of intangible assets arising on acquisition, divided by the average number of ordinary shares in issue for the period.

*(3) Free cash flow conversion is calculated as adjusted EBITDA, less working capital movements, lease payments, CAPEX, development expenditure, corporation tax paid and interest, as a percentage of Adjusted EBITDA.

For further information please contact:

 
 SimplyBiz                                 via Instinctif Partners 
 Matt Timmins (Joint Chief Executive 
  Officer) 
  Neil Stevens (Joint Chief Executive 
  Officer) 
  Gareth Hague (Group Finance Director) 
 
 Zeus Capital (Nominated Adviser 
  and Joint Broker)                        +44 (0) 20 3829 5000 
 Martin Green 
  Dan Bate 
 
 Liberum (Joint Broker) 
  Cameron Duncan 
  James Greenwood 
  Ed Phillips                              +44 (0) 20 3100 2222 
 
 Instinctif Partners                       +44 (0)78 3767 4600 / 
                                            SimplyBiz@instinctif.com 
 Lewis Hill 
  Catherine Wickman 
 

Notes to Editors

The SimplyBiz Group provides essential support services, software and data that enable professional financial advisers, financial intermediaries and product providers to deliver better outcomes for their customers.

The SimplyBiz Group supports 3,700 intermediary firms with regulatory and business support in addition to 1,900 customer firms of its fintech platform, while providing essential distribution support to over 400 financial institutions.

The Company's understanding of the changing regulatory landscape and deep insights into the needs of customers, advisers and product providers enables it to add unique value to the retail financial services sector.

For more information, please visit: www.simplybizgroup.co.uk/

Analyst presentation

An analyst briefing is being held at 09:30 BST on 15 September 2020 via an online video conference facility. To register your attendance please contact SimplyBiz@instinctif.com

JOINT CHIEF EXECUTIVES' STATEMENT

Overview

During the six months to 30 June 2020, SimplyBiz delivered a robust financial and operational performance, reacting quickly and decisively to COVID-19 restrictions. The robust nature of revenues, the resilience of its customers base, and a stronger delivery platform following the acquisition of Defaqto have enabled growth in key strategic areas offsetting reductions in valuations and marketing events. The company delivered a strong adjusted EBITDA margin with strong cash conversion.

Headline revenue was broadly consistent with the prior year at GBP28.9m (H1 2019: GBP29.1m), as the positive performance from Defaqto and growth in core Intermediary Services were offset by the impact of COVID-19 on the Distribution Channels division.

Adjusted EBITDA of GBP7.4m represented a robust 25.5% (H1 2019: 27.5%) margin flowing from the higher margin Fintech & Research division, coupled with the quick and efficient implementation of cost saving measures, including the utilisation of certain UK Government assistance packages.

Divisional Performance

The Intermediary Services division provides compliance and business services to over 3,700 individual intermediary firms through a comprehensive membership model. Members, including financial advisers, mortgage advisers and wealth managers, conduct regulated activities and are regulated by the FCA.

The Company reacted quickly and decisively to accelerate its digital strategy and deliver a package of member benefits that enabled uninterrupted high quality delivery of all intermediary services, maintained customer scale and recurring subscriptions value, and strengthened the opportunities for future engagement and growth.

Membership fee income increased by 4% to GBP5.3m, compared to H1 2019. The Company continued to pursue its strategy of focussing on recruiting larger firms and wealth managers, with average fees increasing by 3%.

Increased regulation continues to drive demand for our services. Additional services income increased by 9% to GBP2.6m (H1 2019: GBP2.4m) and the acceleration of the Company's digital delivery in the period strengthened its growth potential.

Software licence users increased from 4,106 at 30 June 2019 to 4,580 (30 June 2020), contributing to a strong and accelerating 10% increase in software licence income to GBP2.7m.

Revenues in Zest Technologies, the Group's employee benefits software solution, were stabilised and grew marginally ahead of the prior year at GBP1.7m.

The Distribution Channels division was significantly impacted by the COVID-19 restrictions, with revenues reducing by 31% to GBP9.2m.

The Surveying business was unable to provide physical onsite valuations for 10 weeks, from late March, with the majority of its surveyors placed on furlough as a result. The market has subsequently improved with volumes currently around c50% of previous 'normal' levels. Valuation Services revenues in the period were GBP2.1m (H1 2019: GBP4.4m).

The temporary closure of the housing market also impacted Mortgage Services income, with lower than expected mortgage completions and reduced panel management transactions during Q2. Growth in the months prior to lockdown helped maintain total mortgage completion at GBP7.4bn, consistent with H1 2019. Mortgage Services revenues for the period were GBP2.3m (H1 2019: GBP3.1m) mainly due to a reduction in panel management services (surveying).

The Company's extensive events programme has also been impacted by lockdown restrictions, with all physical events suspended from the end of March. The Company acted quickly and decisively to develop an innovative new virtual events service that has attracted excellent attendance and superb customer feedback. Revenues from marketing agreements were GBP2.6m (H1 2019: GBP3.6m).

The Fintech & Research division contributed GBP7.4m of revenue for the period, compared with GBP4.2m for the three and a half months following the acquisition on 22 March 2019. The acquisition remains earnings enhancing. Defaqto continues to provide a significant strengthening of its delivery platform and remains a strategic priority for future quality earnings growth.

Strategy

The Company's strategy comprises organic and acquisitive growth. Organic growth is expected to be driven by growth in the Company's digital service and technology offering to its customers as well as increasing average revenue per customer. An accelerated digital strategy will deliver strong margin growth and greater cash and capital efficiency. The integration of Defaqto and the Company's enhanced ability to provide data driven, digitised services, will further improve the quality of earnings.

Management continue to pursue selective acquisitions to enhance the services offered, the technology capabilities it possesses and to build on the scalable platform of the Company, subject to prudent balance sheet management, particularly with regard to sensible leverage ratios.

Financial Results:

 
                                    Jun-20  Jun-19 
                                      GBPm    GBPm 
 
Group Revenue                         28.9    29.1 
Expenses                            (21.5)  (21.1) 
Adjusted EBITDA                        7.4     8.0 
                                    ------  ------ 
Adjusted EBITDA margin %             25.5%   27.5% 
 
Depreciation                         (0.1)   (0.1) 
Depreciation of lease asset          (0.4)   (0.3) 
Amortisation of development 
 expenditure and software            (0.5)   (0.5) 
Adjusted EBIT                          6.4     7.1 
                                    ------  ------ 
 
Operating costs of an exceptional 
 nature                                  -   (3.0) 
Share option charges                 (0.4)   (0.3) 
Amortisation of other intangible 
 assets                              (1.0)   (0.6) 
Net finance costs                    (0.6)   (0.5) 
Profit before tax                      4.4     2.7 
                                    ------  ------ 
Taxation                             (1.6)   (1.3) 
 
Profit after tax                       2.8     1.4 
                                    ------  ------ 
 
Adjusted earnings per share 
 (EPS)                               4.22p   5.57p 
 

Revenue

Revenues of GBP28.9m were 1% lower than the prior period, largely due to revenue reductions resulting from the COVID-19 restrictions. These reductions were balanced by underlying growth from both the Intermediary Services and Research & Fintech divisions, and a full six months' contribution from Defaqto.

Revenues in the Intermediary services division grew by 6% to GBP12.3m, as a result of growth in member numbers and improved penetration of additional services and software licences. Fintech & Research revenues increased by GBP3.2m (77%) as a result of the full period of trading vs three and a half months in 2019 and continued organic growth from Defaqto.

The Distribution Channels division has been impacted by the COVID-19 lockdown restrictions, with GBP3.2m (42%) lower revenues from Valuation and Mortgage Services that directly link to housing transactions, and from the GBP0.9m (26%) impact to marketing events being moved from physical to digital delivery.

Operating profit and adjusted EBITDA margin

Operating profit increased by 56% to GBP5.0m (H1 2019: GBP3.2m, after exceptional charges of GBP3.0m).

Adjusted EBITDA margin is calculated as adjusted EBITDA (as defined in note 6), divided by revenue. Whilst adjusted EBITDA is not a statutory measure, the Board believe it is a highly useful measure of the underlying trade and operations, excluding one-off and non-cash items.

The Company delivered a robust adjusted EBITDA margin of 25.5% (H1 2019: 27.5%) due to continued revenue growth in higher margin sectors, rapid and decisive cost saving measures, and GBP0.8m received through the UK Government's assistance schemes.

Operating costs of an exceptional nature

Exceptional operating costs in the prior year included GBP2.6m of professional fees in respect of the acquisition of Defaqto and GBP0.4m of termination costs.

Share-based payments

Share-based payment charges of GBP0.4m (H1 2019: GBP0.3m) have been recognised in respect of the options in issue. The increase in the charge reflects the full period of issue for options granted in 2019.

Financial income and expense

Net finance expenses of GBP0.6m (H1 2019: GBP0.5m) relate to drawdowns on the Group's revolving credit facility agreement.

Taxation

The tax charge for the period has been accrued using the tax rate that is expected to apply to the full financial year. The tax expense includes a deferred tax charge of GBP0.6m, being the deferred tax liability arising on intangible assets acquired with Defaqto, along with the change in the UK corporation tax rate from 17% to 19%.

Earnings per share

Earnings per share has been calculated based on the weighted average number of shares in issue in both periods.

Dividend

During the period the Company paid the final dividend in respect of FY19 of GBP2.8m. As announced in April, the Board does not intend to recommend an interim dividend in respect of the current financial year.

Cash flow and closing net debt

At 30 June 2020 the Company had net debt of GBP25.8m, compared to GBP27.0m at 31 December 2019 and GBP30.1m at 30 June 2019. Net debt is calculated as borrowings less cash and cash equivalents and amortised arrangement fees. In March 2020, the Company drew down the remaining GBP7.0m of the GBP45m Revolving Credit Facility to provide ongoing financial flexibility.

Free cash flow conversion was strong at 65% for H1 2020, vs 43% in H1 2019. In the prior period, cash flow conversion was lower due to the timing of Defaqto's cash receipts across the year.

Free cash flow conversion is calculated as adjusted EBITDA, less working capital movements, lease payments, CAPEX, development expenditure, corporation tax paid and interest, as a percentage of Adjusted EBITDA. A reconciliation of free cash flow is provided in note 6.

OUTLOOK

Trading has continued in line with the Board's expectation since the end of the period.

The Board remains confident of the Company's strong trading and cash generation and continues to expect that 2020 full year adjusted earnings per share shall be no less than 11.0p (2019 FY: 13.0p).

Matt Timmins and Neil Stevens

Joint Chief Executive Officers

Consolidated statement of profit or loss and other comprehensive income

for the six months ended 30 June 2020

 
 
 
                                     Note        6 months        6 months 
                                                    ended           ended 
                                             30 June 2020    30 June 2019 
                                                   GBP000          GBP000 
 
Revenue                                 7          28,870          29,086 
 
Operating expenses                      8        (22,912)        (25,354) 
Amortisation of other intangible 
 assets                                12           (994)           (550) 
 
Operating profit                                    4,964           3,182 
Finance income                          9              47              41 
Finance costs                           9           (666)           (562) 
 
Profit before taxation                              4,345           2,661 
 
Taxation                               10         (1,583)         (1,234) 
 
Profit for the financial 
 period                                             2,762           1,427 
 
 
Profit attributable to 
 shareholders: 
    Owners of the Company                           2,707           1,416 
    Non-controlling interests                          55              11 
 
                                                    2,762           1,427 
 
 
Earnings per share - basic             11           2.80p           1.61p 
Earnings per share - diluted           11           2.78p           1.59p 
 

There are no items to be included in other comprehensive income in the current or preceding period.

Consolidated Statement of Financial Position

As at 30 June 2020

 
                                                                             Audited 
                                              Unaudited      Unaudited   31 December 
                                    Note   30 June 2020   30 June 2019          2019 
                                                 GBP000         GBP000        GBP000 
Assets 
Non-current assets 
Property, plant & equipment           13          1,294            492           454 
Lease asset                                       5,166          1,511         2,653 
Intangible assets and goodwill        12        106,048        106,644       106,210 
Deferred tax asset, non-current                      80              -         1,262 
 
Total non-current assets                        112,588        108,647       110,579 
 
Current assets 
Trade and other receivables                       9,253         11,023        11,774 
Deferred tax asset                                   91            116           194 
Cash and cash equivalents 
 -unrestricted                                   18,921         11,010        10,666 
Cash and cash equivalents 
 -restricted                                          -            545             - 
 
Total current assets                             28,265         22,694        22,634 
 
Total assets                                    140,853        131,341       133,213 
 
Equity and liabilities 
Equity attributable to the 
 owners of the Company 
Share capital                         15            968            968           968 
Share premium account                 15         64,755         73,149        64,755 
Other reserves                        16       (52,716)       (60,760)      (51,993) 
Retained earnings                                55,644         49,939        55,695 
Equity attributable to the 
 owners of the Company                           68,651         63,296        69,425 
Non-controlling interest                            134             11            79 
 
Total equity                                     68,785         63,307        69,504 
 
Liabilities 
Current liabilities 
Trade and other payables                         16,031         18,175        17,195 
Lease liabilities, current                          580            271           540 
Current tax liabilities                             230          1,315           651 
 
Total current liabilities                        16,841         19,761        18,386 
 
Non-current liabilities 
Loans and borrowings                  14         44,695         41,615        37,685 
Lease liabilities, non-current                    4,610          1,179         2,176 
Deferred tax liabilities                          5,922          5,479         5,462 
 
Total non-current liabilities                    55,227         48,273        45,323 
 
Total liabilities                                72,068         68,034        63,709 
 
Total equity and liabilities                    140,853        131,341       133,213 
 
 

Consolidated statement of changes in equity

 
                                  Share    Share     Other          Non  Retained    Total 
                                capital  premium   reserve  controlling  earnings   equity 
                                                               interest 
                                 GBP000   GBP000    GBP000       GBP000    GBP000   GBP000 
 
Balance at 1 January 2019           765   36,791  (61,067)            -    50,081   26,570 
Total comprehensive income 
 for period                           -        -         -           11     1,427    1,438 
 
Transactions with owners, 
 recorded directly in equity 
Issue of share capital              203   36,358         -            -         -   36,561 
Dividends                             -        -         -            -   (1,569)  (1,569) 
Share option charge                   -        -       307            -         -      307 
 
Total contributions by and 
 distribution to owners             203   36,358       307            -   (1,569)   35,299 
 
Balance at 30 June 2019             968   73,149  (60,760)           11    49,939   63,307 
Total comprehensive income 
 for period                           -        -         -           68     7,120    7,188 
 
Transactions with owners, 
 recorded directly in equity 
Transfer to other reserves            -  (7,449)     7,449            -         -        - 
Cost of share issue                   -    (945)         -            -         -    (945) 
Share option charge                   -        -       205            -         -      205 
Deferred tax on share options 
 exceeding profit and loss 
 charge                               -        -     1,113            -         -    1,113 
Dividends                             -        -         -            -   (1,364)  (1,364) 
 
Total contributions by and 
 distribution to owners               -  (8,394)     8,767            -   (1,364)    (991) 
 
Balance at 31 December 2019         968   64,755  (51,993)           79    55,695   69,504 
 
Total comprehensive income 
 for period                           -        -         -           55     2,707    2,762 
 
Transactions with owners, 
 recorded directly in equity 
Dividends                             -        -         -            -   (2,758)  (2,758) 
Share option charge                   -        -       390            -         -      390 
Deferred tax on share options 
 exceeding profit and loss 
 charge                               -        -   (1,113)            -         -  (1,113) 
 
Total contributions by and 
 distribution to owners               -        -     (723)            -   (2,758)  (3,481) 
 
Balance at 30 June 2020             968   64,755  (52,716)          134    55,644   68,785 
 
 

Consolidated statement of cash flows

for the 6 months ended 30 June 2020

 
 
                                                   6 months    6 months 
                                                      ended       ended 
                                                    30 June     30 June 
                                                       2020        2019 
                                                     GBP000      GBP000 
 
Net cash generated from operating activities 
 (note 18)                                            7,784       2,214 
 
Cash flows from investing activities 
   Finance income                                        47          41 
   Purchase of property, plant and equipment          (954)        (42) 
   Development expenditure                          (1,355)       (930) 
   Acquisitions, net of cash received                     -    (38,886) 
 
Net cash used in investing activities               (2,262)    (39,817) 
 
Cash flows from financing activities 
   Finance costs                                      (279)       (475) 
   Loan repayments made                                   -    (27,676) 
   Drawdown of loans                                  7,000      37,500 
   Transaction costs related to borrowing              (45)       (420) 
   Payment of lease liability                         (460)       (385) 
   Payment of deferred and other consideration        (725)       (725) 
   Issue of share capital                                 -      29,072 
   Dividends paid                                   (2,758)     (1,569) 
 
Net cash generated from financing activities          2,733      35,322 
 
   Net increase / (decrease) in cash and 
    cash equivalents                                  8,255     (2,281) 
   Cash and cash equivalents at start of 
    period                                           10,666      13,836 
 
Cash and cash equivalents at end of period           18,921      11,555 
 
 

NOTES TO THE INTERIM FINANCIAL INFORMATION

   1.            Reporting entity 

The SimplyBiz Group plc is a company domiciled in the UK. These condensed consolidated interim financial statements ('interim financial statements') as at and for the six months ended 30 June 2020 comprise the Company and its subsidiaries (together referred to as 'the Group'). The Group is primarily involved in the provision of compliance, technology and business services to financial advisers, including directly authorised IFAs, directly authorised mortgage advisers, workplace consultants and directly authorised wealth managers. It also provides marketing and promotion, product panelling and co-manufacturing services to more than 135 financial institutions, through access to its membership.

   2.            Basis of accounting 

These interim financial statements have been prepared in accordance with IAS 34 Interim financial reporting and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 31 December 2019 ('last annual financial statements'). They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the Group's financial position and performance since the last annual financial statements.

The financial information set out in these interim financial statements for the six months ended 30 June 2020 and the comparative figures for the six months ended 30 June 2019 are unaudited. The comparative financial information for the period ended 31 December 2019 in this interim report does not constitute statutory accounts for that period under 435 of the Companies Act 2006.

Statutory accounts for the period ended 31 December 2019 have been delivered to the Registrar of Companies. The auditors' report on the accounts for 31 December 2019 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The interim financial statements comprise the financial statements of the Group and its subsidiaries at 30 June 2020. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtained control, and continue to be consolidated until the date when such control ceases.

The interim financial statements incorporate the results of business combinations using the acquisition method. In the consolidated balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date.

These interim financial statements were authorised for issue by the Company's Board of Directors on 14 September 2020.

   3.            Use of Judgements and Estimates 

In preparing these interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements.

   4.            Changes in significant accounting policies 

The accounting policies applied in these condensed consolidated interim financial statements are the same as those applied in the Group's consolidated financial statements in the 2019 Annual Report & Accounts.

Current taxes

The policy for recognising and measuring income taxes in the interim period is described in note 10.

Accounting for Government Support

Amounts receivable under the UK Government's Coronavirus Job Retention Scheme have been recognised in profit or loss on a systematic basis net of the expense for which the monies are intended to compensate, once any conditions related to the receipts are met.

   5.            Going concern 

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Joint Chief Executives' statement.

The Group Directors have prepared cash flow forecasts for the Group for the period to 31 December 2021 which indicate that, taking account of severe but plausible downside scenarios, the Group will have sufficient funds, to meet its liabilities as they fall due for that period.

The cash flow forecasts include the impact of the recent global outbreak of COVID-19, which has led to a net 1% drop of revenue in the first half of the year across the Group. Various sensitivity analyses have been performed to assess the impact of more severe but plausible downside scenarios to future trading. Under these severe but plausible downside scenarios the Group continues to operate within its available facilities and does not incur any covenant breaches.

The Directors have considered these factors, the likely performance of the business and possible alternative outcomes and the financing activities available to the Group. Having taken all of these factors into consideration, including the impact on covenants relating to the external borrowing facility, the Directors confirm that forecasts and projections indicate that the Group has adequate resources for the foreseeable future and at least for the period of 12 months from the date of signing the half year report. Accordingly, the financial information has been prepared on the going concern basis.

   6.            Reconciliation of GAAP to Non-GAAP measures 

The Group uses a number of "non-GAAP" figures as comparable key performance measures, as they exclude the impact of one-off items that are not considered part of ongoing trade. Amortisation of other intangible assets has been excluded on the basis that it is a non-cash amount, relating to acquisitions in the current and prior periods. Operating costs of an exceptional nature have been excluded as they are not considered part of the underlying trade. Share option charges have been excluded from Adjusted EBITDA only as non-cash costs.

The Group's "non-GAAP" measures are not defined performance measures in IFRS. The Group's definition of the reporting measures may not be comparable with similar titled performance measures in other entities.

Adjusted EBITDA is calculated as follows:

 
 
                                                 6 months    6 months ended 
                                                 ended 30      30 June 2019 
                                                June 2020 
                                                   GBP000            GBP000 
Operating profit                                    4,964             3,182 
add back: 
    Depreciation                                      124               133 
    Depreciation of leased assets                     359               321 
    Amortisation of other intangible assets 
     (note 12)                                        994               550 
    Amortisation of development costs and 
     software (note 12)                               523               494 
 
EBITDA                                              6,964             4,680 
    Add back: 
    Operating costs of exceptional nature 
     (note 8)                                           -             2,997 
    Share option charges                              390               307 
 
Adjusted EBITDA                                     7,354             7,984 
 
 

Adjusted profit before tax is calculated as follows:

 
 
                                                 6 months     6 months 
                                                 ended 30     ended 30 
                                                June 2020    June 2019 
                                                   GBP000       GBP000 
Profit before tax                                   4,345        2,661 
add back: 
    Operating costs of exceptional nature 
     (note 8)                                           -        2,997 
    Amortisation of other intangible assets 
     (note 12)                                        994          550 
 
Adjusted profit before tax                          5,339        6,208 
 
 

Adjusted profit after tax is calculated as follows:

 
 
                                                  6 months     6 months 
                                                  ended 30     ended 30 
                                                 June 2020    June 2019 
                                                    GBP000       GBP000 
Profit after tax                                     2,762        1,427 
add back: 
    Operating costs of exceptional nature 
     (note 8)                                            -        2,997 
    Amortisation of other intangible assets, 
     net of deferred tax charge / credit             1,323          471 
 
Adjusted profit after tax                            4,085        4,895 
 
 

Free cash flow conversion is calculated as follows:

 
                                                    6 months    6 months 
                                                    ended 30    ended 30 
                                                   June 2020   June 2019 
                                                      GBP000      GBP000 
Net cash generated from operating activities           7,784       2,214 
Adjusted for: 
    Operating costs of exceptional nature (note 
     8)                                                    -       2,997 
    Finance income                                        47          41 
    Finance costs                                      (279)       (475) 
    Purchase of property, plant and equipment          (954)        (42) 
    Payment of lease liability                         (460)       (385) 
    Development expenditure                          (1,355)       (930) 
 
Free cash flow                                         4,783       3,420 
Adjusted EBITDA (as above)                             7,354       7,984 
 
Free cash flow conversion                                65%         43% 
 
 
   7.            Segmental Information 

During the year, the Company was domiciled in the UK and as such substantially all revenue is derived from external customers in the United Kingdom. Since the acquisition of Defaqto in March 2019, the Group has an operation in Norway, which is wholly immaterial to the Group's revenues.

The Group has three operating segments, which are considered to be reportable segments under IFRS. The three reportable segments are:

   --      Intermediary Services; 
   --      Distribution Channels; and 
   --      Research & Fintech 

Intermediary Services provides compliance and regulation services to individual financial intermediary Member Firms, including directly authorised IFAs, directly authorised mortgage advisers, workplace consultants and directly authorised wealth managers.

Distribution Channels provides marketing and promotion, product panelling and co-manufacturing services to financial institutions. This division of the Group also undertakes survey panelling and surveying work for mortgage lenders.

The Research & Fintech segment provides a fintech platform for over 9,000 users, across 3,300 firms and providing independent ratings of 21,000 financial products and funds, licenced by 250 brands.

The reportable segments are derived on a product / customer type basis. Management have applied their judgement on application of IFRS 8, with operating segments reported in a manner consistent with the internal reporting produced to the chief operating decision makers ('CODM'). The chief operating decision makers are deemed to be the Joint CEOs. No aggregation of operating segments has occurred.

Segmental information is provided for Adjusted EBITDA, which is the measure used when reporting to the CODM.

The tables below present the segmental information.

 
                                           Intermediary  Distribution    Research 
6 months ended 30 June 2020                    Services      Channels   & Fintech       Group 
                                                 GBP000        GBP000      GBP000      GBP000 
 
Revenue                                          12,293         9,223       7,354      28,870 
Adjusted operating expenses, before 
amortisation and depreciation                   (9,886)       (7,164)     (4,466)    (21,516) 
-----------------------------------------  ------------  ------------  ----------  ---------- 
Adjusted EBITDA                                   2,407         2,059       2,888       7,354 
Operating costs of an exceptional 
 nature                                                                                     - 
Amortisation of other intangible 
 assets                                                                                 (994) 
Amortisation of development costs 
 and software                                                                           (523) 
Depreciation                                                                            (124) 
Depreciation of lease asset                                                             (359) 
Share option charges                                                                    (390) 
-----------------------------------------  ------------  ------------  ----------  ---------- 
Operating profit                                                                        4,964 
-----------------------------------------  ------------  ------------  ----------  ---------- 
 
                                           Intermediary  Distribution    Research 
6 months ended 30 June 2019                    Services      Channels   & Fintech     Group 
                                                 GBP000        GBP000      GBP000    GBP000 
 
Revenue                                          11,605        13,329       4,152    29,086 
Adjusted operating expenses, before 
 amortisation and depreciation                  (9,265)       (9,657)     (2,180)  (21,102) 
-----------------------------------------  ------------  ------------  ----------  -------- 
Adjusted EBITDA                                   2,340         3,672       1,972     7,984 
Operating costs of an exceptional 
 nature                                                                             (2,997) 
Amortisation of other intangible assets                                               (550) 
Amortisation of development costs 
 and software                                                                         (494) 
Depreciation                                                                          (133) 
Depreciation of lease asset                                                           (321) 
Share option charges                                                                  (307) 
-----------------------------------------  ------------  ------------  ----------  -------- 
Operating Profit                                                                      3,182 
-----------------------------------------  ------------  ------------  ----------  -------- 
 
 

In determining the trading performance of the operating segments central costs are allocated based on the divisional contribution of revenue to the Group.

The statement of financial position is not analysed between reporting segments for management and the chief decision-makers consider the Group statement of financial position as a whole.

No customer has generated more than 10% of total revenue during the period covered by the financial information.

   8.            Operating Profit 

Operating profit for the period has been arrived at after charging:

 
                                          6 months ended  6 months ended 
                                            30 June 2020    30 June 2019 
                                                  GBP000          GBP000 
 
Depreciation of tangible assets                      124             133 
Depreciation of lease asset                          359             321 
Operating costs of exceptional nature: 
     Restructuring costs                               -              59 
     Professional fees for acquisitions                -           2,549 
     Loss of office expense                            -             389 
 
                                                       -           2,997 
 
 

Operating costs of exceptional nature

Professional fees for acquisitions relate to the purchase of Defaqto in 2019. Loss of office expense relates to the redundancy of a senior employee and restructuring costs relate to a restructure program in a single legal entity.

   9.            Finance Expense and Income 
 
                                    6 months ended  6 months ended 
                                      30 June 2020    30 June 2019 
                                            GBP000          GBP000 
Finance Expense 
Bank interest payable                        (603)           (559) 
Finance charge on lease liability             (63)             (3) 
 
                                             (666)           (562) 
Finance Income 
Bank interest receivable                        47              41 
 
                                                47              41 
 
Net finance expense                          (619)           (521) 
 
 
   10.          Taxation 
 
                                 6 months ended  6 months ended 
                                   30 June 2020    30 June 2019 
                                         GBP000          GBP000 
 
Current tax charge                          951           1,291 
Deferred tax charge / (credit)              632            (57) 
 
Tax charge for the period                 1,583           1,234 
 
 

Current income tax expense is recognised at an amount determined by multiplying the profit before tax for the interim reporting period by management's best estimate of the weighted-average annual income tax rate for the full financial year, adjusted for the tax effect of certain items recognised in full in the interim period. As such, the effective tax rate in the interim financial statements may differ from management's estimate of the effective tax rate for the annual financial statements.

   11.          Earnings per share 
 
 
  Basic Earnings Per Share ('EPS')                  6 months        6 months 
                                                       ended           ended 
                                                30 June 2020    30 June 2019 
                                                      GBP000          GBP000 
 
Profit attributable to equity shareholders 
 of the parent                                         2,707           1,416 
 
Weighted average number of shares 
 in issue                                         96,782,296      87,867,713 
 
Basic profit per share (pence)                         2.80p           1.61p 
 
 

Earnings per share has been calculated based on the weighted average number of shares in issue in both periods.

 
 
  Diluted Earnings Per Share                        6 months        6 months 
                                                       ended           ended 
                                                30 June 2020    30 June 2019 
                                                      GBP000          GBP000 
 
Profit attributable to equity shareholders 
 of the parent                                         2,707           1,416 
 
Weighted average number of shares in 
 issue                                            96,782,296      87,867,713 
Diluted weighted average number of shares 
 and options for the period                          483,999       1,203,045 
 
                                                  97,266,295      89,070,758 
 
Diluted profit per share (pence)                       2.78p           1.59p 
 
 

Adjusted EPS has been calculated below based on the adjusted profit after tax, which removes one of items not considered to be part of underlying trading.

 
 
  Adjusted basic Earnings Per Share          6 months        6 months 
                                                ended           ended 
                                         30 June 2020    30 June 2019 
                                               GBP000          GBP000 
 
Adjusted profit after tax (note 6)              4,085           4,895 
 
Weighted average number of shares 
 in issue                                  96,782,296      87,867,713 
 
Adjusted earnings per share (pence)             4.22p           5.57p 
 
 
   12.          Intangible assets and goodwill 
 
                                           Other Intangible Assets 
                  Goodwill  Software   Brand  Intellectual        Total                  Total 
                                                  property        other 
                                                             intangible   Development 
                                                                 assets   expenditure 
                    GBP000    GBP000  GBP000        GBP000       GBP000        GBP000   GBP000 
Cost 
At 1 January 
 2019               19,770         -     115           897        1,012         2,790   23,572 
Acquisitions        54,737        34   2,904        23,551       26,455         2,395   83,621 
Additions                -         -       -             -            -           930      930 
 
At 30 June 2019     74,507        34   3,019        24,448       27,467         6,115  108,123 
Additions                -         -       -             -            -         1,424    1,424 
Adjustments          1,669         -      36             -           36       (2,395)    (690) 
 
At 31 December 
 2019               76,176        34   3,055        24,448       27,503         5,144  108,857 
Additions                -         -       -             -            -         1,355    1,355 
 
At 30 June 2020     76,176        34   3,055        24,448       27,503         6,499  110,212 
 
Amortisation 
 and impairment 
At 1 January 
 2019                  178         -      12           112          124           133      435 
Charge in the 
 period                  -         4      60           490          550           490    1,044 
 
At 30 June 2019        178         4      72           602          674           623    1,479 
Charge in the 
 period                  -        10     181           848        1,029           129    1,168 
 
At 31 December 
 2019                  178        14     253         1,450        1,703           752    2,647 
Charge in the 
 period                  -         4     153           841          994           519    1,517 
 
At 30 June 2020        178        18     406         2,291        2,697         1,271    4,164 
 
Net book value 
At 30 June 2020     75,998        16   2,649        22,157       24,806         5,228  106,048 
 
At 31 December 
 2019               75,998        20   2,802        22,998       25,800         4,392  106,210 
 
At 30 June 2019     74,329        30   2,947        23,846       26,793         5,492  106,644 
 
 

Intellectual property is a single asset covering the three elements of customer relationships, technology and data. Capitalised development expenditure relates to the development of the software platform in Zest Technologies Limited, and technologies in Defaqto.

   13.          Property, plant & equipment 
 
 
                             Lease Assets                     Owned Assets 
                    ------------------------------  --------------------------------- 
                    Property         Plant   Total      Leasehold      Office   Total 
                               & Equipment           improvements   Equipment 
                      GBP000        GBP000  GBP000         GBP000      GBP000  GBP000 
Cost 
At 1 January 
 2019                      -             -       -              -       1,443   1,443 
Recognition of 
 right of use 
 asset on initial 
 application of 
 IFRS 16                 343           225     568              -           -       - 
 
                         343           225     568              -       1,443   1,443 
Additions              1,015            43   1,058              -          37      37 
Acquisitions              11           195     206              -         213     213 
 
At 30 June 2019        1,369           463   1,832              -       1,693   1,693 
Additions              1,285           243   1,528              -         171     171 
Disposals                  -             -       -              -       (216)   (216) 
 
At 31 December 
 2019                  2,654           706   3,360              -       1,648   1,648 
Additions              2,872             -   2,872            881          83     964 
 
At 30 June 2020        5,526           706   6,232            881       1,731   2,612 
 
Depreciation 
At 1 January 
 2019                      -             -       -              -       1,068   1,068 
Charge in the 
 period                  195           126     321              -         133     133 
 
At 30 June 2019          195           126     321              -       1,201   1,201 
Charge in the 
 period                  212           174     386              -         153     153 
Disposals                  -             -       -              -       (160)   (160) 
 
At 31 December 
 2019                    407           300     707              -       1,194   1,194 
Charge in the 
 period                  276            83     359              -         124     124 
 
At 30 June 2020          683           383   1,066              -       1,318   1,318 
 
Net book value 
At 30 June 2020        4,843           323   5,166            881         413   1,294 
 
At 31 December 
 2019                  2,247           406   2,653              -         454     454 
 
At 30 June 2019        1,174           337   1,511              -         492     492 
 
 

Leasehold improvements relate to the new head office, which remained under construction at 30 June 2020.

   14.          Borrowings 
 
                             30 June 2020  30 June 2019 
                                   GBP000        GBP000 
Secured bank loan: 
Current                                 -             - 
Non-current                        45,000        42,000 
Less loan arrangement fees          (305)         (385) 
 
                                   44,695        41,615 
 
 

On 21 March 2019, the Group repaid the loan facility provided by Yorkshire Bank and drew down GBP45.0m from an RCF provided in two equal amounts of GBP22.5m from Yorkshire Bank and NatWest. The drawdown from Yorkshire Bank was net of the settlement of the previous funding. The RCF is a four-year facility, with the option of a one-year extension. The margin payable on the RCF is based on the net leverage of the Group with a range of 1.5% to 2.6% above LIBOR. In March 2020, the Group exercised the one-year extension for the facility.

On 21 March 2019, the Group repaid the acquired debt of Defaqto of GBP24,676,000 (including accrued interest).

On 21 June 2019, the Group repaid GBP3.0m of the RCF, and on 23 December 2019 repaid GBP4.0m.

On 23 March 2020, the Group drew down GBP7.0m of the RCF.

   15.          Share Capital & Share Premium 

Share capital

 
                                                Ordinary 
                                                  Shares 
Number of fully paid shares (nominal value 
 GBP0.01): 
At 1 January 2019                             76,470,588 
Issue of share capital                        20,311,708 
 
At 30 June 2019 and 31 December 2019          96,782,296 
Issue of share capital                                 - 
 
At 30 June 2020                               96,782,296 
 
 

Share Premium

 
                              GBP'000 
At 1 January 2019              36,791 
Issue of share capital         36,358 
 
At 30 June 2019                73,149 
 
Cost of share issue             (945) 
Transfer to other reserves    (7,449) 
 
At 31 December 2019            64,755 
Issue of share capital              - 
 
At 30 June 2020                64,755 
 
 

On 21 March 2019, the Company issued 20,311,708 new GBP0.01 ordinary shares for GBP1.80 per share, as part of the funding for the acquisition of Defaqto. 4,160,600 of these shares were issued in part consideration for the acquisition of Defaqto.

   16.          Other reserves 
 
                                      Merger      Capital     Share      Total 
                                     Reserve   redemption    Option      Other 
                                                  reserve   Reserve   Reserves 
                                     GBP'000      GBP'000   GBP'000    GBP'000 
At 1 January 2019                   (61,395)            8       320   (61,067) 
Share option charge                        -            -       307        307 
 
At 30 June 2019                     (61,395)            8       627   (60,760) 
Share option charge                        -            -       205        205 
Deferred tax on share options 
 exceeding profit and loss charge          -            -     1,113      1,113 
Transfer from share premium            7,449            -         -      7,449 
 
At 31 December 2019                 (53,946)            8     1,945   (51,993) 
Share option charge                        -            -       390        390 
Deferred tax on share options              -            -   (1,113)    (1,113) 
 
At 30 June 2020                     (53,946)            8     1,222   (52,716) 
 
 

During 2019, the Company issued 4,160,600 new GBP0.01 ordinary shares at a value of GBP1.80 per share in part consideration for the acquisition of Defaqto, resulting in an increase in the merger reserve. The opening balance on the merger reserve arose during the introduction of a new ultimate parent company (The SimplyBiz Group plc) in 2015.

   17.          Share-based payment arrangements 

At 30 June 2020, the Group had the following share-based payment arrangements.

Issued in 2018

Company Share Option Plan ("CSOP")

On 4 April 2018, the Group established the Company Share Option Plan ("CSOP"), which granted share options to certain key management personnel. The CSOP consists of two parts, and all options are to be settled by physical delivery of shares. The terms and conditions of the share option schemes granted during the year ended 31 December 2019 are as follows:

 
                                  Number                          Contractual 
Scheme             Grant date  of awards  Vesting conditions  life of options 
-----------------  ----------  ---------  ------------------  --------------- 
                      4 April               3 years' service 
Approved Scheme          2018    229,412     from grant date    3 to 10 years 
                      4 April               3 years' service 
Unapproved Scheme        2018    250,000     from grant date    3 to 10 years 
-----------------  ----------  ---------  ------------------  --------------- 
 

During the period 11,765 awards (2019: 5,882) under the above plans have been forfeited as a result of bad leavers.

Management Incentive Plan ("MIP")

On 4 April 2018, the Group established the Management Incentive Plan ("MIP") which invited eligible employees to subscribe for A shares in the Company's subsidiary SimplyBiz Limited. Participants have a put option to sell the A shares to the Company in exchange for Ordinary Shares of the Company at any point between three years and ten years after the date of grant, provided that they are still employed and an equity hurdle is met. The terms and conditions of the MIP are as follows:

 
                 Number                                                Contractual 
Grant date    of awards                        Vesting conditions  life of options 
------------  ---------  ----------------------------------------  --------------- 
                                3 years' service from grant date, 
                                   subject to an equity hurdle of 
4 April 2018      2,250   40% above the IPO market capitalisation    3 to 10 years 
------------  ---------  ----------------------------------------  --------------- 
 

If the equity hurdle is achieved, the A Shares are convertible into shares of the Company, based on 15% of the value created above 105% of the market capitalisation at IPO, subject to a 7.35% dilution cap on the issued share capital at the point of vesting.

As at 30 June 2020, the MIP was below the required equity hurdle.

The fair value of services received in return for share options granted is based on the fair value of the share options granted. The fair value has been measured using the Black Scholes model for the unapproved CSOP scheme, and the Monte Carlo model for the MIP and approved CSOP scheme.

The following inputs were used in the measurement of the fair values at grant date of the share-based payment plans:

 
                                               Approved  Unapproved  Management 
                                                                      Incentive 
                                                   CSOP        CSOP        Plan 
---------------------------------------------  --------  ----------  ---------- 
Fair value at grant date                        GBP0.64     GBP1.59   GBP290.22 
Share price at grant date                       GBP1.70     GBP1.70     GBP1.70 
Exercise price                                  GBP1.70     GBP0.01    GBP1.785 
Expected volatility                                 40%         40%         40% 
Option life (expected weighted average 
 life)                                                3           3           3 
Expected dividends                                   2%          2%          2% 
Risk-free interest rate (based on government 
 bonds)                                            1.2%        1.2%        1.2% 
---------------------------------------------  --------  ----------  ---------- 
 

Save As You Earn ("SAYE") scheme

On 24 September 2018, the Group established the Save As You Earn ("SAYE") scheme and invited all Group employees to enter into a three-year savings contract linked to an option which entitles them to acquire Ordinary Shares in the Company.

537,618 options were issued under the scheme, with an exercise price of GBP1.70. The fair value of the shares at date of grant (1 December 2018) was GBP0.70, and the share options are due to vest in three years. Expected volatility, dividends and the risk-free interest rate have been assumed to be consistent with the approved CSOP scheme noted above.

During the period, 45,098 awards (2019: 119,631) under the above plans have been forfeited as a result of bad leavers. Assumed retention on the remaining options at 30 June 2020 is 90%.

Issued in 2019

Company Share Option Plan ("CSOP")

In September 2019, the Group established an additional Company Share Option Plan ("CSOP"), which granted share options to certain key management personnel. The CSOP consists of two parts, and all options are to be settled by physical delivery of shares. The terms and conditions of the share option schemes granted during the year ended 31 December 2019 are as follows:

 
                                    Number                           Contractual 
Scheme               Grant date  of awards   Vesting conditions  life of options 
-----------------  ------------  ---------  -------------------  --------------- 
                   26 September                3 years' service 
Approved Scheme            2019     15,564      from grant date    3 to 10 years 
                   26 September                2 years' service 
Unapproved Scheme          2019     61,302      from grant date    3 to 10 years 
                   26 September             1.52 years' service 
Unapproved Scheme          2019     90,791      from grant date    3 to 10 years 
-----------------  ------------  ---------  -------------------  --------------- 
 

The fair value of services received in return for share options granted is based on the fair value of the share options granted. The fair value has been measured using the Black Scholes model.

The following inputs were used in the measurement of the fair values at grant date of the share-based payment plans:

 
                                               Approved  Unapproved  Unapproved 
                                                   CSOP        CSOP        CSOP 
---------------------------------------------  --------  ----------  ---------- 
Fair value at grant date                        GBP0.54     GBP1.84     GBP1.86 
Share price at grant date                       GBP1.93     GBP1.93     GBP1.93 
Exercise price                                  GBP1.93     GBP0.01     GBP0.01 
Expected volatility                                 45%         45%         45% 
Option life (expected weighted average 
 life)                                                3           2        1.52 
Expected dividends                                   2%          2%          2% 
Risk-free interest rate (based on government 
 bonds)                                            1.3%        1.3%        1.3% 
---------------------------------------------  --------  ----------  ---------- 
 

Save As You Earn ("SAYE") scheme

On 26 September 2019, the Group established the 2019 Save As You Earn ("SAYE") scheme and invited all Group employees to enter into a three-year savings contract linked to an option which entitles them to acquire Ordinary Shares in the Company.

375,145 options were issued under the scheme, with an exercise price of GBP1.58. The fair value of the shares at date of grant (1 December 2019) was GBP0.70, and the share options are due to vest in three years. Expected volatility, dividends and the risk-free interest rate have been assumed to be consistent with the approved CSOP scheme noted above.

During the period 21,870 awards (2019: 3,417) have been forfeited as a result of bad leavers. An assumed retention rate of 85% has been applied at 31 December 2019 on the outstanding shares.

Issued in 2020

Company Share Option Plan ("CSOP")

In March 2020, the Group established an additional Company Share Option Plan ("CSOP"), which granted share options to certain key management personnel. All options are to be settled by physical delivery of shares. The terms and conditions of the share option scheme granted during the period ended 30 June 2020 are as follows:

 
                                     Number                          Contractual 
Scheme                Grant date  of awards  Vesting conditions  life of options 
-----------------  -------------  ---------  ------------------  --------------- 
                                               1 years' service 
Unapproved Scheme  11 March 2020     85,106     from grant date    3 to 10 years 
-----------------  -------------  ---------  ------------------  --------------- 
 

The fair value of services received in return for share options granted is based on the fair value of the share options granted. The fair value has been measured using the Black Scholes model.

The following inputs were used in the measurement of the fair values at grant date of the share-based payment plans:

 
                                                 Unapproved 
                                                       CSOP 
---------------------------------------------    ---------- 
Fair value at grant date                            GBP1.77 
Share price at grant date                           GBP1.82 
Exercise price                                      GBP0.01 
Expected volatility                                     45% 
Option life (expected weighted average 
 life)                                                 1.52 
Expected dividends                                       2% 
Risk-free interest rate (based on government 
 bonds)                                                  1% 
-----------------------------------------------  ---------- 
 
   18.          Notes to the cash flow statement 
 
 
                                                   6 months    6 months ended 
                                                   ended 30      30 June 2019 
                                                  June 2020 
                                                     GBP000            GBP000 
Cash flow from operating activities 
Profit after taxation                                 2,762             1,427 
Add back / (deduct): 
Finance income                                         (47)              (41) 
Finance cost                                            666               562 
Taxation                                              1,583             1,234 
 
                                                      4,964             3,182 
 
Adjustments for: 
Amortisation of development expenditure 
 and software                                           523               494 
Depreciation of property, plant and equipment           124               133 
Depreciation of lease asset                             359               321 
Amortisation of other intangible assets                 994               550 
Share option charge                                     390               307 
 
Operating cash flow before movements in 
 working capital                                      7,354             4,987 
 
Decrease in trade and other receivables               2,518               491 
Decrease in trade and other payables                  (717)           (2,906) 
 
Cash generated from operations                        9,155             2,572 
Income taxes paid                                   (1,371)             (358) 
 
Net cash generated from operating activities          7,784             2,214 
 
 
   19.          Subsequent Events 

No material subsequent events have arisen since the balance sheet date.

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR DGGDCRSBDGGS

(END) Dow Jones Newswires

September 15, 2020 02:00 ET (06:00 GMT)

1 Year The Simplybiz Chart

1 Year The Simplybiz Chart

1 Month The Simplybiz Chart

1 Month The Simplybiz Chart
ADVFN Advertorial
Your Recent History
LSE
SBIZ
The Simply..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20201028 09:28:06