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RNS
M&C Saatchi PLC  -  SAA   

Half-year Report

Released 07:00 25-Sep-2017

RNS Number : 6355R
M&C Saatchi PLC
25 September 2017
 

 

 

 

 

 

 

 

M&C SAATCHI PLC

 

INTERIM RESULTS

 

 

SIX MONTHS ENDED

30 JUNE 2017

 

 

 

 

25 September 2017

 

 

 

 

 

 

M&C SAATCHI PLC

Interim results for the six months

ended 30 June 2017

 

 

25 September 2017

Strong revenue and earnings growth

 

 

Financial Highlights 2017

Growth versus 2016

Revenue

£121.0m

+ 21% (2016: £100.2m)

 

Revenue in constant currencies

Like-for-like Revenue

Operating Profit

 

 

£13.3m

+ 12%

+ 10%

+ 17% (2016: £11.3m)

 

Profit Before Tax

£13.3m

+ 17% (2016: £11.4m)

 

Earnings

EPS

£9.1m

11.94p

+ 18% (2016: £7.7m)

+ 11% (2016: 10.71p)

 

Dividend

2.13p

+ 15% (2016: 1.85p)

 

         

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

 

 

Operational Highlights

·      Successful first half with strong revenue momentum and earnings growth

·      Global Network performed very well:

°           UK: like-for-like revenues up 5%

°           Europe: like-for-like revenues up 15%

°           Middle East and Africa: like-for-like revenues up 9%

°           Asia and Australasia: like-for-like revenues up 12% 

°           Americas: like-for-like revenues up 14%

·      Net borrowing of £3.9m with increased working capital pressure (£8.5m net borrowing at 30th June 2016)

·      Interim dividend increased 15% to 2.13p 

 

 

 

 

 

Commenting on the results, David Kershaw, Chief Executive, said:

 

"Growth across the Group remains strong with excellent revenue and earnings increases over the first half of 2017.

 

"In line with our long-term strategy, we have been busy starting new businesses and opening new offices. This is the fuel for growth in years to come. 

 

"The second half has started well with trading in line with expectations."

 

For further information please call:

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

David Kershaw

 

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

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 associate; profit/loss on disposal of associates; and income statement impact of put option accounting (whether accounted under IFRS2 or IAS39). See Note 4 for 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.

 

Periods compared

This report comments on the unaudited consolidated income statement of M&C Saatchi plc (the "Group") for the six months to 30 June 2017 compared with the unaudited consolidated income statement for the same period in 2016. 

 

 

 

 

 

SUMMARY OF RESULTS

 

The first six months of 2017 saw strong revenue momentum and earnings growth. Actual revenues grew by 21%, with constant currency revenues increasing by 12% and like-for-like revenues by 10%. Excluding new start-ups, we returned a headline operating margin of 11.5%, up from 11.3% in 2016. The headline profit before tax advanced 17% to £13.3m and headline net earnings rose 18%. Statutory profit before taxation was down 10% from £10.7m to £9.7m, primarily due to increased charges for put options accounted for as conditional share awards.

 

UK

We posted an increase in UK revenues of 5%, with our CRM, Mobile, PR and Sport & Entertainment divisions continuing to trade particularly positively.

 

We returned a good run of account wins across our group of businesses in the first half, including Dreams, Visit Britain, The Body Shop, Costa Coffee and Clinique.

 

Our PR operation was awarded Outstanding Large Public Relations Consultancy, Mobile won Most Effective Mobile Agency and Sport & Entertainment were Sponsorship Agency of the Year.

 

In July, Giles Hedger joined as CEO of the London advertising agency, completing the new management team, who have been incentivised under our owner/driver model. The new team is working well and attracting new business.

 

M&C Saatchi Merlin, our talent management agency which flourished in the first six months, launched a social influencer division in May. We also started Re UK in June, importing our successful Sydney brand design consultancy.

 

The UK headline operating profit was 6% up on 2016 and the headline operating margin increased to 13.2% compared with 2016's 13.0%. These margins exclude the impact of Group costs.

 

Europe

We made excellent progress in Europe with like-for-like revenues up 15%. Headline operating profit was up 22%, with a headline operating margin of 15.0% (2016: 16.2%).

 

Sweden maintains its strong new business performance, winning the property company AMFF and the engineering client PE Consulting.

 

Both Germany and Italy continue to thrive. Mobile opened in Berlin whilst Italy was appointed by Sisal, a gaming company, in addition to being reappointed by Unicredit. In France, advertising is still slow but our agency did win some Haribo business and the energy company Sowee. Madrid is developing well and we have started a Spanish sponsorship operation.

 

Middle East and Africa

Like-for-like revenues in the Middle East and Africa were up 9%. Both our UAE and South African offices are rebuilding following account losses last year (Etihad and Edgars). The operating profit was consequently down 8% and the headline operating margin dipped from 7.9% in 2016 to 5.4%.

 

Our South African offices were appointed by Windhoek and Heineken Export. We also acquired the Johannesburg based Sport & Entertainment company Levergy. UAE recorded some good wins in the period; Aldar Properties, UAE Banks Federation and Unilever's Lipton account. M&C Saatchi PR opened in the UAE and have since won the Abu Dhabi Motors Rolls-Royce account.

 

Our office in Tel Aviv is building an exciting offer and was appointed by Jaguar.

 

Asia and Australia

In Asia and Australasia, like-for-like revenues were up 12% on the same period last year. The headline regional operating margin was 12.0% (2016: 11.9%), with the headline operating profit up a remarkable 37% on the same period last year.

 

Our Australian offices are doing very well and continue to widen their offer. In February, we acquired Bohemia, a media buying and planning operation, which positions us favourably for satisfying the needs of our clients, who are increasingly seeking a closer relationship between their media agency and the content and creative providers. In March, we launched The Source, our successful UK research operation, in Melbourne.

 

Our associate in China, aeiou, continues to grow positively and was appointed by the car account SGMW and the walnut drinks provider New Farm. Malaysia is still shining and was awarded Social Media Agency of the Year. Singapore is developing encouragingly and won Bridgestone and the Bank of Singapore. We are looking to open a new office in Indonesia before the end of the year.

 

Americas

Like-for-like revenues increased 14%. There was an 8% increase in operating profit to £3.6m and a headline operating margin dip from 17.1% in 2016 to 14.7%. This was after new start-up costs, which when excluded restates the first half margin at 17.1%, as last year.

 

Mobile continues to excel and has a very impressive business in the US. LIDA New York opened for business and was appointed by Aston Martin.

 

Our Los Angeles office made impressive progress and was appointed by Pacific Life. We launched both Sport & Entertainment and Clear there in the first half.

 

Within a challenging economic environment, trading in Brazil remains difficult. We have opened a new office in Mexico City.

 

Balance sheet and cash

Our net borrowing at the half-year was £3.9m, which compares with £8.5m of borrowing at the same stage last year. We continue to experience enhanced pressure from clients on payment terms over the last six months, particularly with our growing revenues in the US. We are putting in place strategies to redress this.

 

Outlook

Growth across the Group remains strong with excellent revenue and earnings increases over the first half of 2017. In line with our long-term strategy, we have been busy starting new businesses and opening new offices. This is the fuel for growth in years to come. The second half has started well with trading in line with expectations.

 

 

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED INCOME STATEMENT

ENDED 30 JUNE 2017

 

 

 

 

 

Six months
ended
30 June 2017

 

 

Six months
ended
30 June 2016

 

 

Year
ended

31 December 2016

 

 

Note

 

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

 

 

 

Billings

 

 

 

 

261,194

 

217,222

 

458,180

 

 

 

 

 

 

 

 

 

 

Revenue

4

 

 

 

121,035

 

100,219

 

225,387

 

 

 

 

 

 

 

 

 

 

Operating costs

 

 

 

 

(115,699)

 

(93,180)

 

(218,738)

Operating profit

4

 

 

 

5,336

 

7,039

 

6,649

 

 

 

 

 

 

 

 

 

 

Share of results of associates

 

 

 

 

531

 

405

 

1,530

Finance income

6

 

 

 

4,520

 

3,797

 

440

Finance costs

7

 

 

 

(710)

 

(512)

 

(1,828)

Profit before taxation

4

 

 

 

9,677

 

10,729

 

6,791

Taxation on profits

8

 

 

 

(2,023)

 

(1,667)

 

(3,451)

Profit for the financial period

 

 

 

 

7,654

 

9,062

 

3,340

 

 

 

 

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

 

 

 

 

 

Equity shareholders of the Group

4

 

 

 

6,838

 

8,094

 

144

Non controlling interest

 

 

 

 

816

 

968

 

3,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,654

 

9,062

 

3,340

 

 

 

 

 

 

 

 

 

 

Earnings per share

4

 

 

 

 

 

 

 

 

Basic

 

 

 

 

8.98p

 

11.24p

 

0.20p

Diluted

 

 

 

 

8.74p

 

11.20p

 

0.19p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of the above numbers to the Headline numbers, discussed in the front of this report, can be found in note 4 on pages 17 to 19.

 

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

ENDED 30 JUNE 2017

 

 

 

 

 

 

Six months
ended
30 June 2017

 

Six months
ended
30 June 2016

 

Year
ended
31 December 2016

 

 

 

 

 

£000

 

£000

 

£000

 

Profit for the period

 

 

 

 

 

7,654

 

 

9,062

 

 

3,340

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Exchange differences on translating foreign operations

 

 

 

 

(625)

 

1,791

 

6,754

Total other comprehensive income for the period net of tax

 

 

 

 

(625)

 

1,791

 

6,754

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

 

 

 

7,029

 

 

10,853

 

 

10,094

 

Total comprehensive income attributable to:

 

 

 

 

 

 

 

 

 

Equity shareholders of the Group

 

 

 

 

6,213

 

9,885

 

6,898

Non controlling interests

 

 

 

 

816

 

968

 

3,196

 

 

 

 

 

7,029

 

10,853

 

10,094

 

 

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED BALANCE SHEET

AT 30 JUNE 2017

 

 

 

30 June 2017

30 June 2016

 

31 December 2016

 

 

 

 

 

£000

 

£000

 

£000

NON CURRENT ASSETS

 

 

 

 

 

 

 

 

 

Intangible assets

 

 

52,681

47,546

 

51,004

Investments in associates

 

 

20,175

18,473

 

19,277

Plant and equipment

 

 

11,038

9,619

 

10,619

Deferred tax assets

 

 

3,059

2,609

 

3,112

Other non current assets

 

 

 

 

9,018

 

7,600

 

7,455

 

 

 

 

 

95,971

 

85,847

 

91,467

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Trade and other receivables

 

 

107,728

105,673

 

109,824

Current tax assets

 

 

4,164

2,199

 

1,057

Cash and cash equivalents

 

 

 

 

31,638

 

29,269

 

32,222

 

 

 

 

 

143,530

 

137,141

 

143,103

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Bank overdraft

 

 

-

(2,796)

 

-

Trade and other payables

 

 

(103,012)

(103,277)

 

(115,886)

Current tax liabilities

 

 

(2,482)

(2,885)

 

(1,186)

Other financial liabilities

 

 

(4,310)

(25)

 

(3,670)

Deferred and contingent consideration

 

 

-

-

 

-

Minority shareholder put options liabilities

 

 

 

 

(13,855)

 

(15,594)

 

(20,216)

 

 

 

 

 

(123,659)

 

(124,577)

 

(140,958)

 

 

 

 

 

 

 

 

 

 

Net current Assets

 

 

19,871

12,564

 

2,145

 

 

 

 

 

 

 

 

 

 

Total assets less current liabilities

 

 

115,842

98,411

 

93,612

 

 

 

 

 

 

 

 

 

 

Non current liabilities

 

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

(100)

(36)

 

(380)

Other financial liabilities

 

 

(35,567)

(34,958)

 

(28,277)

Minority shareholder put options liabilities

 

 

(10,529)

(13,698)

 

(12,950)

Other non current liabilities

 

 

 

 

(2,390)

 

(1,630)

 

(2,608)

 

 

 

 

 

(48,586)

 

(50,322)

 

(44,215)

 

 

 

 

 

 

 

 

 

 

Net assets

 

 

 

 

67,256

 

48,089

 

49,397

 

 

 

 

 

 

 

 

 

 

 

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED BALANCE SHEET (CONTINUED)

AT 30 JUNE 2017

 

 

 

30 June 2017

30 June 2016

 

31 December
 2016

 

 

 

 

 

£000

 

£000

 

£000

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

790

737

 

749

Share premium

 

 

31,383

20,332

 

24,099

Merger reserve

 

 

31,592

31,592

 

31,592

Treasury reserve

 

 

(792)

(792)

 

(792)

Minority interest put option reserve

 

 

(14,540)

(22,379)

 

(20,598)

Non controlling interest acquired

 

 

(20,421)

(9,990)

 

(13,122)

Foreign exchange reserve

 

 

4,145

(193)

 

4,770

Retained earnings

 

 

 

 

29,380

 

23,412

 

15,871

TOTAL SHAREHOLDERS FUNDS

 

 

 

 

61,537

 

42,719

 

42,569

 

 

 

 

 

 

 

 

 

 

Non Controlling interestS

 

 

5,719

5,370

 

6,828

 

 

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

 

 

 

67,256

 

48,089

 

49,397

 

 

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

SIX MONTHS ENDED 30 JUNE 2017

 

 

2017 Half year

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 2017

749

24,099

31,592

(792)

(20,598)

(13,122)

4,770

15,871

42,569

6,828

49,397

Reserve movement for six months ending 30 June 2017

 

 

 

 

 

 

 

 

 

Exercise of put options

16

5,788

-

-

6,060

(7,344)

-

-

4,520

-

4,520

Acquisitions

4

1,496

-

-

-

-

-

-

1,500

(230)

1,270

Disposals

-

-

-

-

-

-

-

(153)

(153)

59

(94)

Exchange rate movements

-

-

-

-

(2)

45

-

-

43

(106)

(63)

Option exercise

21

-

-

-

-

-

-

(21)

-

-

-

Share option charge

-

-

-

-

-

-

-

6,845

6,845

-

6,845

Dividends

-

-

-

-

-

-

-

-

-

(1,648)

(1,648)

Total transactions with owners

41

7,284

-

-

6,058

(7,299)

-

6,671

12,755

(1,925)

10,830

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for period

-

-

-

-

-

-

(625)

6,838

6,213

816

7,029

At 30 June 2017

790

31,383

31,592

(792)

(14,540)

(20,421)

4,145

29,380

61,537

5,719

67,256

 

 

 

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

SIX MONTHS ENDED 30 JUNE 2017

 

2016 Half year

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 2016

727

17,338

31,592

(792)

(12,595)

(9,233)

(1,984)

12,673

37,726

4,295

42,021

Reserve movement for six months ending 30 June 2016

 

 

 

 

 

 

 

 

 

 

 

Exercise of put options

10

2,994

-

-

551

(502)

-

(6)

3,047

(17)

3,030

Acquisitions

-

-

-

-

(10,248)

-

-

-

(10,248)

1,797

(8,451)

Exchange rate movements

-

-

-

-

(87)

(255)

-

-

(342)

(367)

(709)

Issue of shares to minorities

-

-

-

-

-

-

-

-

-

31

31

Share option charge

-

-

-

-

-

-

-

2,651

2,651

-

2,651

Dividends

-

-

-

-

-

-

-

-

-

(1,337)

(1,337)

Total transactions with owners

10

2,994

-

-

(9,784)

(757)

-

2,645

(4,892)

107

(4,785)

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for period

-

-

-

-

-

-

1,791

8,094

9,885

968

10,853

At 30 June 2016

737

20,332

31,592

(792)

(22,379)

(9,990)

(193)

23,412

42,719

5,370

48,089

 

 

 

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

SIX MONTHS ENDED 30 JUNE 2017

2016 Year

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 2016

727

17,338

31,592

(792)

(12,595)

(9,233)

(1,984)

12,673

37,726

4,295

42,021

Reserve movement for year ending 31 December 2016

 

 

 

 

 

 

 

 

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

-

-

-

-

-

-

-

(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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

SIX MONTHS ENDED 30 JUNE 2017

 

 

 

 

Six months ended
30 June 2017

Six months ended
30 June 2016

Year Ended
31 December 2016

 

 

Notes

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

121,035

100,219

225,387

 

Operating cost

 

 

(115,699)

(93,180)

(218,738)

 

Operating Profit

 

 

 

5,336

 

7,039

 

6,649

 

Adjustments for:

 

 

 

 

 

 

 

 

 

Depreciation of plant and equipment

 

 

1,348

1,159

2,668

 

Losses on sale of plant and equipment

 

 

27

36

542

 

Losses on sale of software intangibles

 

 

-

-

10

 

Fair value revaluation of associate on step acquisition

 

 

-

-

859

Impairment and amortisation on acquired intangible assets

 

 

737

1,638

2,324

 

Impairment of associate and investments

 

 

-

-

4,389

 

Amortisation of capitalised software intangible assets

 

44

60

354

 

Equity settled share based payment expenses

 

 

 

6,845

 

2,651

 

7,997

 

Operating cash flow before movements in working capital and provisions

 

 

 

14,337

 

12,583

 

25,792

 

Decrease/(Increase) in trade and other receivables

 

 

 

1,980

 

(1,449)

 

(22,334)

 

(Increase)/Decrease in trade and other payables

 

 

 

(14,195)

 

(8,781)

 

19,342

 

Cash generated from operations

 

 

 

2,122

 

2,353

 

22,800

 

Tax paid

 

 

 

(3,881)

 

(2,901)

 

(4,073)

 

Net cash (outflow)/inflow from operating activities

 

 

(1,759)

 

(548)

 

18,727

 

Investing activities

 

 

 

 

 

 

 

 

 

Acquisitions net of cash acquired

10

 

(834)

(11,033)

(12,822)

 

Disposal of subsidiaries net of cash divested

 

 

-

-

(263)

 

Acquisition of investments

 

 

(1,140)

(581)

(1,056)

 

Proceeds from sale of plant and equipment

 

 

4

8

32

 

Purchase of intangibles

 

 

-

-

-

 

Purchase of plant and equipment

 

 

(773)

(1,495)

(3,873)

 

Purchase of capitalised software

 

 

 

(85)

 

(156)

 

(34)

 

Dividend from associates

 

 

 

-

 

-

 

177

 

Interest earned

 

 

 

166

 

169

 

440

 

Net cash consumed by investing activities

 

 

 

(2,662)

 

(13,088)

 

(17,399)

 

Net cash consumed by operating and investing activities

 

 

 

(4,421)

 

(13,636)

 

1,328

 

 

 

 

 

 

 

Six months ended
30 June 2017

 

Six months ended
30 June 2016

 

Year Ended
31 December
 2016

 

 

 

 

£000

 

£000

 

£000

Net cash consumed by operating and investing activities

 

 

 

(4,421)

 

(13,636)

 

1,328

 

 

 

 

 

 

 

 

 

Dividends paid to equity holders of the Company

 

 

 

-

 

-

 

(5,458)

Dividends paid to non controlling interest

 

 

 

(1,648)

 

(1,337)

 

(3,166)

Issue of shares to minorities

 

 

 

-

 

-

 

514

Repayment of finance leases

 

 

 

(15)

 

(21)

 

(36)

Inception of invoice discounting

 

 

 

291

 

-

 

4,455

Repayment of invoice discounting

 

 

 

-

 

(3,130)

 

(3,943)

Inception of bank loans

 

 

 

6,315

 

10,646

 

11,433

Repayment of bank loans

 

 

 

(184)

 

-

 

(7,191)

Interest paid

 

 

 

(709)

 

(510)

 

(1,230)

Net cash generated / (consumed) from financing activities

 

 

 

4,050

 

 

5,648

 

 

(4,622)

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

 

(371)

 

 

(7,988)

 

 

(3,294)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes

 

 

(213)

2,215

3,270

Cash and cash equivalents at the beginning of the period

 

 

 

32,222

 

32,246

 

32,246

Cash and cash equivalents at the end of the period

 

 

 

31,638

 

 

26,473

 

 

32,222

 

 

 

 

 

 

 

 

 

 

 

 

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 has its primary listing on the AIM market of the London Stock Exchange.

This consolidated half-yearly financial information was approved for issue on 22 September 2017.

These results do not constitute the Group's statutory accounts.  The information presented in relation to 31 December 2016 is extracted from the statutory financial statements for the year then ended and which have been delivered to the Registrar of Companies. The auditor's report on the statutory financial statements for the year ended 31 December 2016 was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report(s) and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.

 

2.   Basis of preparation

 

This consolidated half-yearly financial information for the half-year ended 30 June 2017 has been prepared in accordance with the AIM Rules for companies. The half-yearly consolidated financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2016.

 

 

3.   Accounting policies

 

The financial information in these interim results is that of the holding company and all of its subsidiaries (the Group). It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2016 and which will form the basis of the 2017 financial statements.

 

 

4.   Earnings per share and reconciliation between headline and statutory results

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

 

Six Months to
30 June 2017

 



Reported results
£000

 

Amortisation
of acquired intangibles

£000

Allocations and dividend paid to conditional share awards

Fair value adjustments to minority put option liabilities
 £000

 

Headline
results

£000

Revenue

 

121,035

 

-

-

-

 

121,035

Operating profit

 

5,336

 

737

332

6,845

 

13,250

Share of results of associates & JV

 

531

 

-

-

-

 

531

Finance income

 

4,520

 

-

-

(4,355)

 

165

Finance cost

 

(710)

 

-

-

-

 

(710)

Profit before taxation

 

9,677

 

737

332

2,490

 

13,236

Taxation

 

(2,023)

 

(245)

-

(600)

 

(2,868)

Profit for the period

 

7,654

 

492

332

1,890

 

10,368

Non controlling interests

(816)

 

(135)

(332)

-

 

(1,283)

Profit attributable to equity holders of the Group

6,838

 

357

-

1,890

 

9,085

BASIC EARNINGS PER SHARE

 

 

 

 

 

Weighted average number of shares (Thousands)

76,115

 

 

 

 

 

76,115

Basic EPS

 

8.98p

 

 

 

 

 

11.94p

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER SHARE

 

 

 

 

 

 

 

Weighted average number of shares (Thousands) as above

76,115

 

 

 

 

 

76,115

Add

 

 

 

 

 

 

 

 

- Conditional shares

 

2,139

 

 

 

 

 

2,139

Total

 

78,254

 

 

 

 

 

78,254

Diluted earnings per share

 

8.74p

 

 

 

 

 

11.61p

 

 

 

 

 

 

 

 

 

                   

The Directors believe that the headline results and headline earnings per share provide additional useful information on the underlying performance. 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.

 

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.
 

Six Months to
30 June 2016

 



Reported results
£000

 

Amortisation
of acquired intangibles

£000

Allocations and dividend paid to conditional share awards

Fair value adjustments to minority put option liabilities
 £000

 

Headline
results

£000

Revenue

 

100,219

 

-

 

-

 

100,219

Operating profit

 

7,039

 

1,637

 

2,651

 

11,327

Share of results of associates & JV

 

405

 

-

 

-

 

405

Finance income

 

3,797

 

-

 

(3,628)

 

169

Finance cost

 

(512)

 

-

 

-

 

(512)

Profit before taxation

 

10,729

 

1,637

 

(977)

 

11,389

Taxation

 

(1,667)

 

(645)

 

-

 

(2,312)

Profit for the period

 

9,062

 

992

 

(977)

 

9,077

Non controlling interests

(968)

 

(403)

 

-

 

(1,371)

Profit attributable to equity holders of the Group

8,094

 

589

 

(977)

 

7,706

BASIC EARNINGS PER SHARE

 

 

 

 

 

Weighted average number of shares (Thousands)

71,982

 

 

 

 

 

71,982

Basic EPS

 

11.24p

 

 

 

 

 

10.71p

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER SHARE

 

 

 

 

 

 

 

Weighted average number of shares (Thousands) as above

71,982

 

 

 

 

 

71,982

Add

 

 

 

 

 

 

 

 

- Conditional shares

 

300

 

 

 

 

 

300

Total

 

72,282

 

 

 

 

 

72,282

Diluted earnings per share

 

11.20p

 

 

 

 

 

10.66p

 

 

 

 

 

 

 

 

 

                   

 

 

 

Year ended
31 December 2016

 



Reported results
£000

Amortisation
of acquired intangibles

£000

Impairment of associate and provision against investment

£000

Revaluation of an associate on acquisition
£000

Acquisition related remuneration
£000

Put option accounting
 £000

Headline
results

£000

Revenue

 

225,387

-

225,387

Operating profit

 

6,649

2,324

4,389

859

819

7,997

23,037

Share of results of associates & JV

 

1,530

-

-

-

-

-

1,530

Finance income

 

440

-

-

-

-

-

440

Finance cost

 

(1,828)

-

-

-

-

597

(1,231)

Profit before taxation

 

6,791

2,324

4,389

859

819

8,594

23,776

Taxation

 

(3,451)

(659)

-

-

-

-

(4,110)

Profit for the year

 

3,340

1,665

4,389

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

4,389

859

279

8,343

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

 

 

 

 

 

71,319

Add

 

 

 

 

 

 

 

 

- Conditional shares

 

1,867

 

 

 

 

 

1,867

Total

 

75,060

 

 

 

 

 

75,060

Diluted earnings per share

0.19p

 

 

 

 

 

20.55p

 

 

 

 

5.   SEGMENTAL INFORMATION

This segmental information is reconciled to the statutory results in Note 4.

 

 

Six months to
30 June 2017

 

UK

£000

Europe

£000

Middle East and Africa
£000

Asia and Australia

£000

Americas

£000

Total

£000

Revenue

 

42,553

16,195

6,352

31,102

24,833

121,035

Operating profit excluding Group costs

 

5,612

2,433

341

3,717

3,642

15,745

Group costs

 

(2,247)

(44)

-

(171)

(33)

(2,495)

Operating profit

 

3,365

2,389

341

3,546

3,609

13,250

Share of results of associates
and JV

 

332

6

-

193

-

531

Financial income and cost

 

(227)

(35)

24

27

(334)

(545)

Profit before taxation

 

3,470

2,360

365

3,766

3,275

13,236

Taxation

 

(393)

(958)

21

(1,048)

(490)

(2,868)

Profit for the period

 

3,077

1,402

386

2,718

2,785

10,368

Non controlling interests

 

(642)

(213)

25

(436)

(17)

(1,283)

Profit attributable to equity shareholders
of the Group

 

2,435

1,189

411

2,282

2,768

9,085

HEADLINE BASIC EPS

 

 

 

 

 

 

11.94p

Non cash costs included in headline operating profit:

 

 

 

 

 

Depreciation & Amortisation of software

 

(552)

(116)

(176)

(305)

(243)

(1,392)

Share option charges

 

-

-

-

-

-

-

OFFICE LOCATION

 

London

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

 

                 

 

 

 

Six months to
30 June 2016

 

UK

£000

Europe

£000

Middle East and Africa
£000

Asia and Australia

£000

Americas

£000

Total

£000

Revenue

 

40,595

12,371

4,725

22,787

19,741

100,219

Operating profit excluding Group costs

 

5,270

1,999

371

2,720

3,378

13,738

Group costs

 

(2,188)

(44)

-

(160)

(19)

(2,411)

Operating profit

 

3,082

1,955

371

2,560

3,359

11,327

Share of results of associates
and JV

 

425

20

-

25

(65)

405

Financial income and cost

 

(142)

(22)

23

38

(240)

(343)

Profit before taxation

 

3,365

1,953

394

2,623

3,054

11,389

Taxation

 

(685)

(661)

(211)

(722)

(33)

(2,312)

Profit for the period

 

2,680

1,292

183

1,901

3,021

9,077

Non controlling interests

 

(404)

(294)

(61)

(326)

(286)

(1,371)

Profit attributable to equity shareholders
of the Group

 

2,276

998

122

1,575

2,735

7,706

HEADLINE BASIC EPS

 

 

 

 

 

 

10.71p

Non cash costs included in headline operating profit:

 

 

 

 

 

Depreciation & Amortisation of software

 

(633)

(86)

(77)

(168)

(255)

(1,219)

Share option charges

 

-

-

-

-

-

-

OFFICE LOCATION

 

London

Milan

Berlin

Madrid

Geneva

Stockholm

Moscow

Istanbul

Johannesburg

Cape Town

Abu Dhabi

Dubai

Beirut

Tel Aviv

Sydney

Melbourne

New Delhi

Islamabad

Hong Kong

Shanghai

Tokyo

Kuala Lumpur

Bangkok

Singapore

New York

Chicago

Los Angeles

San Francisco

São Paulo

 

                 

 

 

 

 

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

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 operating profit:

 

 

 

 

 

Depreciation & Amortisation of software

 

(1,632)

(304)

(194)

(342)

(550)

(3,022)

Share option charges

 

-

-

-

-

-

-

OFFICE LOCATION

 

London

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

 

                 

 

 

 

 

 

6.   Finance Income

 

 

Six months
ended
30 June 2017

Six months
ended
30 June 2016

Year
 ended
31 December
2016

 

 

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

Bank interest receivable

 

 

140

 

92

 

338

Other interest receivable

 

 

 

25

 

77

 

102

Total finance income

 

 

 

165

 

169

 

440

Fair value adjustments to minority shareholder put option liabilities

 

 

 

4,355

 

3,628

 

-

Total

 

 

 

4,520

 

3,797

 

440

 

 

7.   Finance COsts

 

 

 

Six months
ended
30 June 2017

Six months
ended
30 June 2016

Year
 ended
31 December
 2016

 

 

 

 

£000

 

£000

 

£000

Finance costs

 

 

 

 

 

Bank interest payable

 

 

(700)

 

(510)

 

(1,227)

Other interest payable

 

 

 

(10)

 

(2)

 

(4)

Total interest payable

 

 

 

(710)

 

(512)

 

(1,231)

 

 

 

 

 

 

 

 

 

Fair value adjustments to minority shareholder put option liabilities

 

 

-

 

-

 

(597)

Total

 

 

 

(710)

 

(512)

 

(1,828)

 

 

8.   Taxation

 

Income tax expenses are recognised based on management's estimate of the average annual headline income tax expected for the full financial year.

 

The estimated headline effective annual tax rate (excluding associates) used for the period to 30 June 2017 is 21.6% (30 June 2016: 21.2%). The increase in the headline tax rate is due to increased profits made in USA.

 

The estimated effective annual tax rate for the period to 30 June 2017 is 20.9% (30 June 2016: 15.5%). The difference between the headline and statutory tax rates is caused by a difference in the profit before tax due to the impact of fair value adjustments to minority shareholder put option liabilities that have no effect on the tax charge.

 

 

9.   Dividends

 

 

 

Six months
ended
30 June 2017

Six months
ended
30 June 2016

Year
 ended
31 December
 2016

 

 

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

2015 final dividend 5.60p (2014: 4.87pp)

 

-

-

4,084

2016 interim dividend 1.85p (2015: 1.61p)

 

-

-

1,374

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

 

5,458

 

The directors propose an interim dividend of 2.13p per share (2016: 1.85p per share) payable on 10 November 2017 to shareholders who are on the register at 27 October 2017. This interim dividend, amounting to £1,711k (2016: £1,374k) has not been recognised as a liability in this half-yearly financial report.

 

 

10. Cash consumed by acquisitions

 

 

 

Six months
ended
30 June 2017

Six months
ended
30 June 2016

Year
 ended
31 December
 2016

 

 

 

 

 

£000

 

£000

 

£000

Acquisitions

 

 

 

 

 

 

 

 

 

Initial cash consideration paid

 

 

(1,375)

(14,476)

(15,717)

Cash and cash equivalents acquired

 

 

541

3,443

2,895

 

 

 

 

 

(834)

 

(11,033)

 

(12,822)

 

 

 

 

 

 

 

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Half-year Report - RNS