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RNS
M&C Saatchi PLC  -  SAA   

Final Results

Released 07:00 16-Mar-2017

RNS Number : 6057Z
M&C Saatchi PLC
16 March 2017
 

 

 

 

 

M&C SAATCHI PLC

 

 

FINAL RESULTS

 

 

YEAR ENDED

31 DECEMBER 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16 March 2017

 

M&C Saatchi PLC

Final Results for the year ended 31 December 2016

 

 

 

16 March 2017

 

Financial Highlights 2016

Growth versus 2015

Revenue

Revenue in constant currencies      

Like-for-like revenue

£225.3m £213.1m

£195.6m

+ 26%   (2015: £178.9m)

+ 19%

+ 9%

 

Operating Profit

£23.0m

+ 24% (2015: £18.6m)

 

Profit Before Tax

£23.7m

+ 18% (2015: £20.1m)

 

Profit After Tax and MI

EPS

£15.4m

21.07p

+ 17% (2015: £13.2m)

+ 13% (2015: 18.57p)

 

Full-Year Dividend

  8.29p

+ 15% (2015: 7.21p)

 

 

 

 

 

         

The highlights are headline results, see note on next page for definition.

 

Operational Highlights

·    Record results in terms of both revenue and earnings

·    The Global network performed well across all geographies:

·    UK: like-for-like revenues up 5%, with CRM, Sport & Entertainment and Mobile continuing to perform particularly positively; operating profit was down 12%, impacted by the previously announced restructuring costs in the advertising agency

·    Europe: like-for-like revenues up 5%, operating profit increased 10%

·    Middle East and Africa: like-for-like revenues up 23%, operating profit up 4%

·    Asia and Australasia: like-for-like revenues up 13%, operating profit was up 37%

·    Americas: constant currency revenues up 97% following New York investments and like-for-like revenues up 18%, operating profit up 118%

·    Final dividend increased 15% to 6.44p, full-year dividend up 15% to 8.29p

 

 

David Kershaw, Chief Executive, said:

 

"2016 was an outstanding year for M&C Saatchi. We continue to roll out our proven strategy of winning new business and starting new businesses and see positive momentum across our global network and business channels.

 

The year has started well and we are confident that we will continue to make good progress in 2017 and beyond."  

 

For further information please call:

M&C Saatchi                                     +44 (0)20-7543-4500

David Kershaw

 

Tulchan Communications                  +44 (0)20-7353-4200

Andrew Grant

Tom Murray

 

Numis Securities                               +44 (0)20-7260-1000

Nick Westlake, NOMAD

Charles Farquhar, Corporate Broking

 

Notes to Editors

Headline results

The term headline is not a defined term in IFRS. The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill and acquired intangibles, but excluding software) acquired in business combinations, changes to deferred and contingent consideration and other acquisition related charges taken to the income statement; impairment of investment in associates and investments; profit and loss on disposal of associates; and the income statement impact of put option accounting and share based payment charges. See Note 3 for a reconciliation between the Group's statutory results and the headline results.

Like-for-like

The like-for-like revenue comparisons referred to in this report are stated after excluding the impact of foreign currency movements and corporate acquisitions and disposals during 2016. See Note 4 for for a reconciliation between the Group's headline results and like-for-like results. 

 

 

 

 

 

 

SUMMARY OF RESULTS

2016 saw record headline results with both excellent revenue momentum and earnings growth. Actual revenues grew by 26%, with constant currency revenues increasing 19%, whilst we increased like-for-like revenues 9%. We returned a headline operating margin of 10.2%, down from 10.4% in 2015, with the previously announced UK restructuring costs causing the drag. If these are excluded then the 2016 headline operating margin increased to 10.9%. The headline profit before tax advanced 18% to £23.7m and headline net earnings rose 17%.

 

UK

Like-for-like revenue in the UK was up 5%, with CRM, Sport & Entertainment, PR and Mobile continuing to perform particularly positively. We experienced a commendable run of account wins across our group of businesses in the year, including Virgin Red, the Home Office, NN Investment Partners, E.ON, PHE (Antimicrobial Resistance), the Rail Delivery Group, the Civil Aviation Authority and the Department of Work and Pensions.

 

M&C Saatchi Mobile was awarded Digital Agency of the Year and Most Effective Media Agency of the Year, whilst M&C Saatchi Sport & Entertainment won Agency of the Year (for the fifth time). We are launching Re, our successful Australian brand identity unit, in the UK in the first quarter of 2017.

 

The UK headline operating profit was 12% down on 2015 but included previously announced restructuring costs of £1.6m in the advertising agency unit, which if discounted, meant operating profit actually grew 2% on 2015. The headline operating margin decreased to 11.7% compared with 2015's 14.0% but if the restructuring costs are excluded then the margin came in at 13.6%.  These margins exclude the impact of Group recharges. The restructure is complete and the new management team is in place and making good progress.

 

 

Europe

European like-for-like revenues increased 5% year on year. Headline operating profit was up 10%, with a headline operating margin of 15.1% (2015: 16.1%).

 

Our Stockholm office kept up its strong new business record and won the TV and broadband supplier Com Hem. Both Germany and Italy continue to shine, with Italy winning E.ON. In France, advertising was still slow but our agency was appointed by YouTube and Google for some projects and continues to grow through diversification. 

 

Our office in Spain is much improved, winning Codorniu and Huawei, and as a consequence we are increasing our shareholding from 24% to 51%. We are starting a sponsorship company in Madrid as well as opening Clear in Berlin.

 

Middle East and Africa

Like-for-like revenues in the Middle East and Africa were up 23%.

 

South Africa finished strongly, having lost their Edgars client mid-year but subsequently picked up the Sun International and Strongbow accounts. We are making a small acquisition in Johannesburg of 51% of Levergy, a sport and entertainment company, which will capitalise on the large South African sports market. Abu Dhabi lost Etihad and has subsequently been rebuilding revenues. Our Dubai office is growing steadily, as is Tel Aviv. 

 

Operating profit in the region was up 4% and the headline operating margin dipped to 9.3% from 12.3% in 2015.

 

Asia and Australia

In Asia and Australia, like-for-like revenue was up 13% year on year.

 

Australia had another good year, winning Woolworths (without a pitch), BBQ Galore, eBay and Tabcorp. They were awarded 'Most Innovative Communications Company in Australia', reflecting some of their ground breaking and pioneering work for their clients. In February of this year, we acquired 51% of Bohemia, a media buying and planning operation. This add on positions us well for satisfying the needs of our clients, who are increasingly seeking a closer relationship between their media agency and the content and creative providers. We also are launching The Source, our successful UK research operation, in Melbourne.

 

Our associate in China, aeiou, had a good second half. Malaysia is still excelling and won the KLIA and Pr1ma accounts. Singapore is developing positively and won Shell and Bridgestone.

 

Our Mobile operation continues to thrive in the region and we added new offices in New Delhi and Bangalore to work alongside our mobile offices in Singapore and Sydney.

 

The headline regional operating margin was 11.0% (2015: 9.9%), with the headline operating profit ahead an impressive 37% on 2015. 

 

 

Americas

Constant currency revenues increased 97%, with like-for-like up 18%. With the acquisitions' contribution, there was a very good 118% increase in operating profit to £7.0m and a headline operating margin of 15.4% (2015: 15.2%).

 

Mobile are performing exceptionally well and building a formidable client base across the US.

 

The SS+K relationship in New York is thriving. In the light of this outstanding growth, we increased our shareholding in SS+K from 33% to 51% in March of last year and then to 67% in February of this. Also in March last year, we acquired 51% of MCD Partners in New York and Chicago, who specialise in customer digital experience. This business is progressing well. 

 

Our office in Los Angeles lost the UGG account in the first quarter but later in the year won some projects for Reebok and Fox. Brazil's macro-economic factors and trading remained tough, and appropriately we made an impairment charge of £3.7m for our Santa Clara associate.

 

Both Clear and Sport & Entertainment are planning to open in Los Angeles in the first half and we are looking to open an office in Mexico, where the management of our Madrid office has a strong network of clients and contacts.

 

Outlook

2016 was an outstanding year for M&C Saatchi. We continue to roll out our proven strategy of winning new business and starting new businesses and see positive momentum across our global network and business channels. 

 

The year has started well and we are confident that we will continue to make good progress in 2017 and beyond.

 

Consolidated income statement

 

 

Year ended 31 December

 

 

Note


2016
£000

Total
2015
£000

Billings

 

 

3

458,180

375,107

Revenue

 

 

3

225,387

178,928

Operating costs

 

 

3

(218,738)

(164,221)

Operating profit

 

 

3

6,649

14,707

Share of results of associates and joint ventures

 

 

5

1,530

2,017

Finance income

 

 

6

440

299

Finance costs

 

 

7

(1,828)

(4,477)

Profit before taxation

 

 

3

6,791

12,546

Taxation

 

 

8

(3,451)

(3,386)

Profit for the year

 

 

 

3,340

9,160

Attributable to:

 

 

 

 

 

Equity shareholders of the Group

 

 

3

144

6,474

Non-controlling interests

 

 

3

3,196

2,686

Profit for the year

 

 

3

3,340

9,160

Earnings per share

 

 

 

 

 

Basic (pence)

 

 

3

0.20p

9.08p

Diluted (pence)

 

 

3

0.19p

9.04p

 

Headline results*

 

 

 

 

 

Operating profit

 

 

 

23,037

18,578

Profit before tax

 

 

 

23,776

20,123

Profit after tax attributable to equity
shareholders of the Group

 

 

 

15,423

13,241

Basic earnings per share (pence)

 

 

 

21.07p

18.57p

Diluted earnings per share (pence)

 

 

 

20.55p

18.49p

 

* The reconciliation of headline to statutory results above can be found in note 3.

 

The notes on pages 12 to 21 form part of these preliminary statements.

 

CONSOLIDATED STATEMENT OF other COMPREHENSIVE INCOME

 

 

Year ended 31 December

Total
2016
£000

Total
2015
£000

Profit for the year

3,340

9,160

Other comprehensive income*

 

 

Exchange differences on translating foreign operations before tax

6,754

(1,316)

Other comprehensive income for the year net of tax

6,754

(1,316)

 

 

 

Total comprehensive income for the year

10,094

7,844

Total comprehensive income attributable to:

 

 

Equity shareholders of the Group

6,898

5,158

Non-controlling interests

3,196

2,686

Total comprehensive income for the year

10,094

7,844

 

* All items in consolidated statement of comprehensive income will be reclassified to the income statement.

 

The notes on pages 12 to 21 form part of these preliminary statements.

 

CONSOLIDATED balance sheet

 

 

At 31 December

 

2016
£000

2015
£000

Non-current assets

 

 

 

Intangible assets

 

51,004

28,286

Investments in associates

 

19,277

24,811

Plant and equipment

 

10,619

8,197

Deferred tax assets

 

3,112

1,476

Other non-current assets

 

7,455

8,349

 

 

91,467

71,119

Current assets

 

 

 

Trade and other receivables

 

109,824

87,692

Current tax assets

 

1,057

844

Cash and cash equivalents

 

32,222

32,344

 

 

143,103

120,880

Current liabilities

 

 

 

Bank overdraft

 

-

(98)

Trade and other payables

 

(115,886)

(94,533)

Current tax liabilities

 

(1,186)

(1,204)

Other financial liabilities

 

(3,670)

(3,155)

Deferred and contingent consideration

 

-

(1,792)

Minority shareholder put option liabilities

 

(20,216)

(16,738)

 

 

(140,958)

(117,520)

Net current assets

 

2,145

3,360

Total assets less current liabilities

 

93,612

74,479

Non-current liabilities

 

 

 

Deferred tax liabilities

 

(380)

(30)

Other financial liabilities

 

(28,277)

(23,594)

Minority shareholder put option liabilities

 

(12,950)

(7,626)

Other non-current liabilities

 

(2,608)

(1,208)

 

 

(44,215)

(32,458)

Total net assets

 

49,397

42,021

 

At 31 December

 

2016
£000

2015
£000

Equity

 

 

 

Share capital

 

749

727

Share premium

 

24,099

17,338

Merger reserve

 

31,592

31,592

Treasury reserve

 

(792)

(792)

Minority interest put option reserve

 

(20,598)

(12,595)

Non-controlling interest acquired

 

(13,122)

(9,233)

Foreign exchange reserve

 

4,770

(1,984)

Retained earnings

 

15,871

12,673

Equity attributable to shareholders of the Group

 

42,569

37,726

Non-controlling interest

 

6,828

4,295

Total equity

 

49,397

42,021

 

The notes on pages 12 to 21 form part of these preliminary statements.

 

 

 

 

CONSOLIDATED STATEMENT OF changes in equity

 

Note


Share
capital
£000

Share
premium
£000

Merger
reserve
£000

Treasury
reserve
£000

MI put option
reserve
£000

Non-controlling
interest
acquired
£000

Foreign
exchange
reserves
£000

Retained
earnings
£000

Subtotal
£000

Non-controlling
interest
in equity
£000

Total
£000

At 1 January 2015

 

683

16,807

27,689

(792)

(13,070)

(7,882)

(668)

9,639

32,406

3,466

35,872

Acquisitions

 

-

-

-

-

-

-

-

-

-

161

161

Exercise of put options

 

13

224

3,903

-

1,274

(1,274)

-

(48)

4,092

24

4,116

Office closure

 

-

-

-

-

-

-

-

(158)

(158)

158

-

Exchange rate movements

 

-

-

-

-

39

(77)

-

-

(38)

(121)

(159)

Issue of shares to minorities

 

-

-

-

-

-

-

-

-

-

1,850

1,850

Issue of minority put options

 

-

-

-

-

(2,190)

-

-

-

(2,190)

-

(2,190)

Reclassification of minority put

 

-

-

-

-

1,352

-

-

306

1,658

-

1,658

Option exercise

 

31

307

-

-

-

-

-

(3)

335

(338)

(3)

Share option charge

 

-

-

-

-

-

-

-

1,125

1,125

-

1,125

Dividends

9

-

-

-

-

-

-

-

(4,662)

(4,662)

(3,591)

(8,253)

Total transactions with owners

 

44

531

3,903

-

475

(1,351)

-

(3,440)

162

(1,857)

(1,695)

Total comprehensive income for the year

 

-

-

-

-

-

-

(1,316)

6,474

5,158

2,686

7,844

At 1 January 2016

 

727

17,338

31,592

(792)

(12,595)

(9,233)

(1,984)

12,673

37,726

4,295

42,021

Acquisitions

 

-

-

-

-

(10,249)

-

-

-

(10,249)

1,919

(8,330)

Acquisitions of minority interest

 

4

1,364

-

-

-

(1,222)

-

-

146

-

146

Exercise of put options

 

18

5,397

-

-

2,366

(2,366)

-

-

5,415

(47)

5,368

Disposals

 

-

-

-

-

-

-

-

-

-

(10)

(10)

Exchange rate movements

 

-

-

-

-

(120)

(301)

-

-

(421)

627

206

Issue of shares to minorities

 

-

-

-

-

-

-

-

-

-

14

14

Issue of options

 

-

-

-

-

-

-

-

515

515

-

515

Share option charge

 

-

-

-

-

-

-

-

7,997

7,997

-

7,997

Dividends

9

-

-

-

-

-

-

-

(5,458)

(5,458)

(3,166)

(8,624)

Total transactions with owners

 

22

6,761

-

-

(8,003)

(3,889)

-

3,054

(2,055)

(663)

(2,718)

Total comprehensive income for the year

 

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

6,754

144

6,898

3,196

10,094

At 31 December 2016

 

749

24,099

31,592

(792)

(20,598)

(13,122)

4,770

15,871

42,569

6,828

49,397

 

The notes on pages 12 to 21 form part of these preliminary statements.

 

CONSOLIDATED CASH FLOW

 

 

Year ended 31 December

 

2016

£000

2015

£000

Revenue

 

225,387

178,928

Operating expenses

 

(218,738)

(164,221)

Operating profit

 

6,649

14,707

Adjustments for:

 

 

 

Depreciation of plant and equipment

 

2,668

2,128

Loss on sale of plant and equipment

 

542

36

Loss on sale of software intangibles

 

10

12

Profit on disposal associate

 

 -

(217)

Fair value revaluation of associate on step acquisition

 

859

-

Impairment and amortisation of acquired intangible assets

 

2,324

1,940

Impairment of associate and investments

 

4,389

-

Impairment of goodwill

 

-

889

Amortisation of capitalised software intangible assets

 

354

98

Equity settled share based payment expenses

 

7,997

1,125

Operating cash before movements in working capital

 

25,792

20,718

Increase in trade and other receivables

 

(22,334)

(17,192)

increases in trade and other payables

 

19,342

18,018

Cash generated from operations

 

22,800

21,544

Tax paid

 

(4,073)

(5,326)

Net cash from operating activities

 

18,727

16,218

Investing activities

 

 

 

Acquisitions of subsidiaries net of cash acquired

 

(12,822)

(79)

Disposal of subsidiaries net of cash divested

 

(263)

-

Acquisitions of associates

 

-

(3,765)

Disposal of associates

 

-

325

Acquisitions of investments

 

(1,056)

(1,366)

Proceeds from sale of plant and equipment

 

32

7

Purchase of intangibles

 

-

(327)

Purchase of plant and equipment

 

(3,873)

(1,970)

Purchase of capitalised software

 

(34)

(158)

Dividends received from associates

 

177

1,173

Interest received

 

440

299

Net cash consumed investing activities

 

(17,399)

(5,861)

Net cash from operating and investing activities

 

1,328

10,357

 

 

The notes on pages 12 to 21 form part of these preliminary statements.

 

 

 

 

Note

2016

£000

2015

£000

Net cash from operating and investing activities

 

1,328

10,357

Financing activities

 

 

 

Dividends paid to equity holders of the Company

9

(5,458)

(4,662)

Dividends paid to non-controlling interest

 

(3,166)

(3,591)

Issue of shares to minorities

 

514

15

Repayment of finance leases

 

(36)

(31)

Inception of invoice discounting

 

4,455

3,130

Repayment of invoice discounting

 

(3,943)

-

Inception of bank loans

 

11,433

6,349

Repayment of bank loans

 

(7,191)

(968)

Interest paid

 

(1,230)

(771)

Net cash consumed by financing activities

 

(4,622)

(529)

Net (decrease)/increase in cash and cash equivalents

 

(3,294)

9,828

Effect of exchange rate fluctuations on cash held

 

3,270

(903)

Cash and cash equivalents at the beginning of the year

 

32,246

23,321

Cash and cash equivalents at the end of the year

 

32,222

32,246

 

 

 

 

Bank loans and borrowings*

 

(28,582)

(23,800)

NET CASH**

 

3,640

8,446

CAPITAL

 

 

 

TOTAL MARKET CAPITALISATION (at 31 December: 380.0p; 326.50p)

 

284,811

237,414

GEARING RATIO**

 

nil

nil

 

* Bank loans and borrowings excludes £3,645k (2015: £3,130k) of Invoice discounting.

** Gearing ratio and net cash are not defined under IFRS.

 

The notes on pages 12 to 21 form part of these preliminary statements.

 

 

Notes to the preliminary statements

Year ended 31 December 2016

 

 

1. GENERAL INFORMATION

The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 36 Golden Square, London W1F 9EE.

The Company is listed on the AIM market of the London Stock Exchange.

These 2016 preliminary statements were approved for issue on 15 March 2017.

The financial information set out below does not constitute the company's statutory accounts for 2015 or 2016. Statutory accounts for the years ended 31 December 2015 and 31 December 2016 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for 2015 and 2016 were 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.

Statutory accounts for the year ended 31 December 2015 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2016 will be delivered to the Registrar in due course.

 

Headline results

The Directors believe that the headline results and headline earnings per share provide additional useful information on the underlying performance of the business. The headline result is used for internal performance management, calculating the value of subsidiary convertible shares and minority interest put options. The term headline is not a defined term in IFRS. Note 3 reconciles reported to headline results.

Our segmental reporting (note 4) reflects our headline results in accordance with IFRS 8.

The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill and acquired intangibles, but excluding software) acquired in business combinations, changes to deferred and contingent consideration and other acquisition related charges taken to the income statement; impairment of investment in associates and investments; profit and loss on disposal of associates; and the income statement impact of put option accounting and share based payment charges. See Note 3 for a reconciliation between the Group's statutory results and the headline results.

 

Notes to the preliminary statements

Continued

 

2. ACCOUNTING POLICIES

The financial information set out in these final results has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The accounting policies adopted in these final results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the period ended 31 December 2016. The principal accounting policies adopted are unchanged from those used in the preparation of the statutory accounts for the period ended 31 December 2015.

 

 

Notes to the preliminary statements

Continued

 

 

 

3. Headline results and earnings per share

The analysis below provides a reconciliation between the Group's statutory results and the headline results.

 

Year ended
31 December 2016

Note


2016
£000

Amortisation
of acquired intangibles

£000

Impairment
of associate

£000

Provision against investments

£000

Revaluation of an associate on acquisition

£000

Acquisition related remuneration

 

Put option accounting*

£000

Headline
results

£000

Billings

4

458,180

-

-

-

-

 

-

458,180

Revenue

4

225,387

-

-

-

-

 

-

225,387

Operating profit

4

6,649

2,324

3,738

651

859

819

7,997

23,037

Share of results of associates and JV

5

1,530

-

-

-

-

 

-

1,530

Finance income

6

440

-

-

-

-

 

-

440

Finance cost

7

(1,828)

-

-

-

-

 

597

(1,231)

Profit before taxation

4

6,791

2,324

3,738

651

859

819

8,594

23,776

Taxation

8

(3,451)

(659)

-

-

-

 

-

(4,110)

Profit for the year

 

3,340

1,665

3,738

651

859

819

8,594

19,666

Non-controlling interests

 

(3,196)

(256)

-

-

-

(540)

(251)

(4,243)

Profit attributable to equity holders of the Group

 

144

1,409

3,738

651

859

279

8,343

15,423

 

* These values represent share based payment charges (£7,997k) and fair value adjustments to minority put option liabilities (£597k), the non-controlling interest charge is the additional charge had the put option not been accounted for under IFRS2 conditional share awards.

 

 

Notes to the preliminary statements

Continued

 

3. Headline results and earnings per share continued

Year ended
31 December 2015

Note


2015
£000

Amortisation
of acquired intangibles

£000

Acquisition of remaining shares in loss making associate

£000

Impairment of Goodwill

£000

Acquisition related remuneration

£000

Put option accounting*

 £000

Headline
results

£000

Billings

4

375,107

-

-

-

-

-

375,107

Revenue

4

178,928

-

-

-

-

-

178,928

Operating profit

4

14,707

1,940

(217)

889

134

1,125

18,578

Share of results of associates and JV

5

2,017

-

-

-

-

-

2,017

Finance income

6

299

-

-

-

-

-

299

Finance cost

7

(4,477)

-

-

-

-

3,706

(771)

Profit before taxation

4

12,546

1,940

(217)

889

134

4,831

20,123

Taxation

8

(3,386)

(541)

71

-

-

-

(3,856)

Profit for the year

 

9,160

1,399

(146)

889

134

4,831

16,267

Non-controlling interests

 

(2,686)

(162)

-

(178)

-

-

(3,026)

Profit attributable to equity holders of the Group

 

6,474

1,237

(146)

711

134

4,831

13,241

 

* These values represent share based payment charges (£1,125k) and fair value adjustments to minority put option liabilities (£3,706k).

 

 

 

 

Notes to the preliminary statements

Continued

 

3. Headline results and earnings per share continued

Basic and diluted earnings per share are calculated by dividing profit attributable to equity holders of the Group by the weighted average number of shares in issue during the year.

 

Year ended
31 December 2016

 

 

 


2016
£000

Headline
2016

£000

Profit attributable to equity shareholders of the Group

 

 

144

15,423

Basic earnings per share

 

 

 

 

 

Weighted average number of shares (thousands)

 

 

 

73,193

73,193

Basic EPS

 

 

 

0.20p

21.07p

Diluted earnings per share

 

 

 

 

 

Weighted average number of shares (thousands) as above

 

 

 

73,193

73,193

Add

 

 

 

 

 

- Conditional shares

 

 

 

1,867

1,867

Total

 

 

 

75,060

75,060

Diluted earnings per share

 

 

 

0.19p

20.55p

 

 

Year ended
31 December 2015

 

 

 


2015
£000

Headline
2015

£000

Profit attributable to equity shareholders of the Group

 

 

6,474

13,241

Basic earnings per share

 

 

 

 

 

Weighted average number of shares (thousands)

 

 

 

71,319

71,319

Basic EPS

 

 

 

9.08p

18.57p

Diluted earnings per share

 

 

 

 

 

Weighted average number of shares (thousands) as above

 

 

 

71,319

71,319

Add

 

 

 

 

 

- Conditional shares

 

 

 

300

300

Total

 

 

 

71,619

71,619

Diluted earnings per share

 

 

 

9.04p

18.49p

 

 

 

Notes to the preliminary statements

Continued

 

4. Segmental information

 

Segmental and headline income statement

 

Year ended
31 December 2016

UK

£000

Europe

£000

Middle East
and Africa
£000

Asia and Australia

£000

Americas

£000

Total

£000

Billings

154,844

38,504

22,810

88,665

153,357

458,180

Revenue

88,504

26,685

11,673

52,531

45,994

225,387

Operating profit excluding Group costs

10,398

4,028

1,085

5,754

7,119

28,384

Group costs

(4,879)

(87)

-

(343)

(38)

(5,347)

Operating profit

5,519

3,941

1,085

5,411

7,081

23,037

Share of results of associates and JV

1,323

(3)

-

290

(80)

1,530

Financial income and cost

(343)

(43)

43

124

(572)

(791)

Profit before taxation

6,499

3,895

1,128

5,825

6,429

23,776

Taxation

(811)

(1,350)

(362)

(1,458)

(129)

(4,110)

Profit for the year

5,688

2,545

766

4,367

6,300

19,666

Non-controlling interests

(1,320)

(494)

(326)

(844)

(1,259)

(4,243)

Profit attributable to equity shareholders of the Group

4,368

2,051

440

3,523

5,041

15,423

Headline basic EPS

 

 

 

 

 

21.07p

 

Non-cash costs included in headline operating profit:

 

 

 

 

 

 

 

Depreciation

1,364

242

185

329

548

2,668

Amortisation of software

(268)

(62)

(9)

(13)

(2)

(354)

Share option charges

-

-

-

-

-

-

Office location

London

Paris

Milan

Berlin

Madrid

Geneva

Stockholm

Moscow

Istanbul

 

Johannesburg

Cape Town

Abu Dhabi

Dubai

Beirut

Tel Aviv

Sydney

Melbourne

New Delhi

Bangalore

Islamabad

Hong Kong

Shanghai

Tokyo

Kuala Lumpur

Bangkok

Singapore

New York

Chicago

Los Angeles

San Francisco

São Paulo

 

 

 

Segmental results are reconciled to the income statement in note 3. Our segmental and headline results are one and the same. The above segments reflect the fact that our business is run on an operating unit basis. In accordance with IFRS 8 paragraph 12, we have aggregated our operating units into regional segments.

 

 

Notes to the preliminary statements

Continued

 

4. Segmental information continued

 

 

Segmental and headline income statement

 

Year ended
31 December 2015

UK

£000

Europe

£000

Middle East
and Africa
£000

Asia and Australia

£000

Americas

£000

Total

£000

Billings

155,226

37,668

18,965

68,140

95,108

375,107

Revenue

84,159

22,745

8,549

42,103

21,372

178,928

Operating profit excluding Group costs

11,782

3,668

1,049

4,187

3,253

23,939

Group costs

(4,970)

(83)

-

(308)

-

(5,361)

Operating profit

6,812

3,585

1,049

3,879

3,253

18,578

Share of results of associates and JV

809

25

-

325

858

2,017

Financial income and cost

(527)

(60)

(17)

69

63

(472)

Profit before taxation

7,094

3,550

1,032

4,273

4,174

20,123

Taxation

(506)

(1,190)

(268)

(1,209)

(683)

(3,856)

Profit for the year

6,588

2,360

764

3,064

3,491

16,267

Non-controlling interests

(1,169)

(658)

(372)

(477)

(350)

(3,026)

Profit attributable to equity shareholders of the Group

5,419

1,702

392

2,587

3,141

13,241

Headline basic EPS

 

 

 

 

 

18.57p

 

Non-cash costs included in headline operating profit:

 

 

 

 

 

 

 

Depreciation

(1,269)

(208)

(145)

(242)

(267)

(2,131)

Amortisation of software

(9)

(51)

(16)

(18)

(4)

(98)

Share option charges

(5)

-

-

-

-

(5)

Office location

London

Paris

Milan

Berlin

Madrid

Geneva

Stockholm

Moscow

Istanbul

 

Johannesburg

Cape Town

Abu Dhabi

Beirut

Tel Aviv

Sydney

Melbourne

New Delhi

Hong Kong

Shanghai

Tokyo

Kuala Lumpur

Bangkok

Singapore

New York

Los Angeles

San Francisco

São Paulo

 

 

 

 

Notes to the preliminary statements

Continued

 

4. Segmental information continued

 

Segmental income statement translated at 2015 exchange rates

It is normal practice in our industry to provide like-for-like results and constant currency results. In the year, we have not acquired any significant new businesses therefore the only difference in our like-for-like results is the impact from movements in exchange rates.

 

Had our 2016 results been translated at 2015 exchange rates then our constant currency results would have been:

Year ended
31 December 2016

UK

£000

Europe

£000

Middle East and Africa
£000

Asia and Australia

£000

Americas

£000

Total

£000

Revenue

88,504

23,766

11,356

47,418

42,106

213,150

Operating profit excluding Group costs

10,398

3,573

1,095

5,298

6,800

27,164

Group costs

(4,885)

(78)

-

(308)

(38)

(5,309)

Operating profit

5,513

3,495

1,095

4,990

6,762

21,855

Share of results of associates and JV

1,323

(5)

-

273

(72)

1,519

Financial income and cost

(393)

(43)

44

113

(510)

(789)

Profit before taxation

6,443

3,447

1,139

5,376

6,180

22,585

Taxation

(799)

(1,197)

(371)

(1,337)

(65)

(3,769)

Profit for the year

5,644

2,250

768

4,039

6,115

18,816

Increase/(decrease) in 2016 results caused by translation differences

44

295

(2)

328

185

850

 

Had our 2016 results been translated at 2015 exchange rates, with the companies we owned in 2015, then our like-for-like results would have been:

Year ended
31 December 2016

UK

£000

Europe

£000

Middle East and Africa
£000

Asia and Australia

£000

Americas

£000

Total

£000

Revenue

88,504

23,766

10,557

47,418

25,294

195,539

Operating profit excluding Group costs

10,398

3,573

1,095

5,298

3,934

24,298

Group costs

(4,885)

(78)

-

(308)

(38)

(5,309)

Operating profit

5,513

3,495

1,095

4,990

3,896

18,989

Share of results of associates and JV

1,323

(5)

-

273

555

2,146

Financial income and cost

(393)

(43)

44

113

(454)

(733)

Profit before taxation

6,443

3,447

1,139

5,376

3,997

20,402

Taxation

(799)

(1,197)

(371)

(1,337)

123

(3,581)

Profit for the year

5,644

2,250

768

4,039

4,120

16,821

Increase/(decrease) in 2016 results caused by translation and acquisition differences

44

295

(2)

328

2,180

2,845

 

The key currencies that affect us and the average exchange rates used were:

 

 

2016

2015

US dollar

1.3558

1.5282

Malaysian ringgit

5.6104

5.9695

Australian dollar

1.8247

2.0354

South African rand

19.9843

19.5022

Brazilian real

4.7442

5.0952

Euro

1.2244

1.3780

 

Notes to the preliminary statements

Continued

 

 

5. Share of associates and joint ventures

 

Year ended 31 December

2016

£000

2015

£000

Share of associates' profit before taxation

1,981

2,386

Share of associates' taxation

(451)

(369)

 

1,530

2,017

 

6. Finance income

 

Year ended 31 December

2016

£000

2015

£000

Bank interest receivable

338

181

Other interest receivable

102

118

Total finance income

440

299

 

7. Finance costs

 

Year ended 31 December

2016

£000

2015

£000

Bank interest payable

(1,227)

(766)

Interest payable on finance leases

(4)

(5)

Total interest payable

(1,231)

(771)

Fair value adjustments to minority shareholder put option liabilities

(597)

(3,706)

Total finance costs

(1,828)

(4,477)

 

8. Taxation

 

Year ended 31 December

 

2016
£000

2015
£000

Current taxation

 

 

 

Taxation in the year

 

 

 

- UK

 

891

817

- Overseas

 

3,700

3,919

Withholding taxes payable

 

(49)

5

Adjustment for over provision in prior periods

 

(104)

(526)

Total

 

4,438

4,215

 

 

 

 

Deferred taxation

 

 

 

Origination and reversal of temporary differences

 

106

(46)

Recognition of previously unrecognised tax losses*

 

(1,093)

(788)

Effect of changes in tax rates

 

-

5

Total

 

(987)

(829)

Total taxation

 

3,451

3,386

* Recognised to reflect the probable future corporation tax that we can reclaim.

 

 

Notes to the preliminary statements

Continued

 

 

9. Dividends

 

Year ended 31 December

2016
£000

2015
£000

2015 final dividend paid 5.60p on 8 July 2016 (2014: 4.87p)*

4,084

3,504

2016 interim dividend paid 1.85p on 11 November 2016 (2015: 1.61p)

1,374

1,158

 

5,458

4,662

 

The 2016 proposed final dividend of 6.44p, totalling £4,876k. Subject to shareholders approval at 7 June 2017 AGM, the dividend is payable on 7 July 2017 to shareholders on the register 9 June 2017.

 

The dividends relate to the profit of the following years:

 

Year ended 31 December

2016
£000

2015
£000

Interim dividend paid 1.85p on 11 November 2016 (2015: 1.61p)

1,374

1,158

Final dividends payable 6.44p on 7 July 2017 (2015: 5.60p)

4,876

4,033

 

6,250

5,191

Headline dividend cover

2.5

2.6

 

Headline dividend cover is calculated by taking headline profit after tax attributable to equity shareholders and dividing it by the total dividends that relate to that year's profits. The Group seeks to maintain a long-term headline dividend cover of between 2 and 3. Retained profits are used to reinvest in the long term growth of the Group through funding working capital and Investing activities; and to repaying bank debt.

 

* 2015 dividend has been restated to reflect the number of shares in issue when the dividend was paid, as opposed to the number of shares in existence at 31 December 2015.

 

 

 

 

 


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