Regulatory Story
Go to market news section View chart   Print
RNS
Hunters Property PLC   -  HUNT   

Interim Results

Released 07:00 05-Sep-2019

RNS Number : 2430L
Hunters Property PLC
05 September 2019
 

5 September 2019

 

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR)

 

Hunters Property Plc

 

Interim Results for the six months ended 30 June 2019

 

Hunters Property Plc ("Hunters" or the "Company" or the "Group"), one of the UK's largest franchised sales and lettings agency businesses, is pleased to announce its unaudited interim results for the six months ended 30 June 2019.

 

'Robust half year results underpin confidence for full year outcome'

 

Financial Highlights:

·      Network Income up +7% to £19.2m (six months to June 2018: £17.9m);

·      Revenue £6.6m (2018: £6.7m);

·      Adjusted operating profit* up +30% to £1.1m (2018: £0.85m);

·      Adjusted earnings per share increased +13% to 2.30p (2018: 2.03p); and

·      Interim dividend up +9% to 0.87p per share (2018: 0.80p per share).

 

*  Adjusted operating profit is before depreciation, amortisation, impairments and profit/loss on disposal of non-current assets, acquisition and share-based payments expenses.  Excluding the impact of IFRS 16 Adjusted operating profit for H1 2019 was £857,000.

 

Operational Highlights:

·     Converted eight new branches in this period at an average Network Income per branch of £425,000 (2018: £186,000);

·      Expanded our branch network to 200 (December 2018: 197);

·      Investing significantly in our software capability as well as bolstering the management team;

·      Two further lettings books have been acquired by franchisees, making use of our acquisition fund facility for branches to expand, and bringing our investments to 15;

·      Grown lettings income across the network by 12% for the period; and

·      Returned a Customer Satisfaction Rating of 96% (Dec 2018: 96%).

 

Outlook

·      Board remains confident the second half will, as in prior years, outperform the first six months despite the impact of the Tenant Fee Ban (which at £0.3m remains broadly in line with the Board's expectations) and against sales listings for the market as a whole reporting a 7%1 decline this period according to Rightmove data;

·     Independent businesses continue to join the Hunters network to mitigate the current uncertainty and challenging economic backdrop; and

·      Strong net asset position and facilities available to continue our growth plans.

 

 

Glynis Frew, Chief Executive of Hunters Property Plc, commented:

"We have delivered a good set of results in the first six months. The market has been held back by the wider economic uncertainty and the tenant fee ban. However, we continue to roll out our mitigation strategy as regards the ban which is well underway and is on plan.

We continue to offer a very attractive solution to suitable, independent businesses who see the advantages of joining the Hunters network. In fact, we are experiencing increasingly strong businesses seeing that benefit.

Going forward we believe our exceptional customer service at local level combined with enhanced technical expertise, automated compliance and increased productivity will boost our offering even further. We are investing in our software to advance our strategy to grow and develop the franchise system having recruited a COO with fifteen years' experience in the industry as well as being bolstered by the support of our network in embracing that change. 

 

The continuing work and support displayed by our staff and the franchise network itself is a credit to the Group.  I offer, on behalf of the Board, our gratitude to everyone that is involved."

 

 

For further details:

Hunters Property Plc                                                    Tel:  01904 756 197

Kevin Hollinrake, Chairman

Glynis Frew, Chief Executive Officer

Ed Jones, Chief Financial Officer

 

Dowgate Capital Limited

David Poutney and James Serjeant (Corporate Broking)

 

Tel: 020 3903 7715

 

SPARK Advisory Partners Limited

Mark Brady and Andrew Emmott (Nominated Adviser)

 

Tel: 020 3368 3551

1 - Based on Rightmove data in Hunters' areas

 

Chairman's Statement

 

Overview

On behalf of the Board I am pleased to comment on the half year results for 2019.  In this period the Group added another eight branches to the network making a total of 132 in the last five and a half years.  Network Income in the six months to June grew by 7% to £19.2m (six months to June 2018: £17.9m). The average per branch for this first six months has increased 9% to £96k (six months to June 2018: £88k) in part as a result of the new branches averaging their income at £425,000 (2018: £186,000) and an income balance of 64:36 sales to lettings for this period (2018: 66:34).

 

Turnover was maintained at £6.6m (2018: £6.7m) but with an increase in adjusted operating profit of 30% to £1.1m (2018: £0.85m) as a result of adoption of the IFRS 16 accounting treatments. Excluding the IFRS adjustments profit has been maintained at £857,000.  The Group's strategy is to grow a predominantly franchise network and during this period welcomed eight branches to the network (2018: eight) that were existing businesses converting to Hunters.  At the end of June, the network stood at 200 (June 2018: 203) branches, of which 188 (2018: 192) are franchised.

 

Our strategy to invest further in technology to offer an enhanced customer experience whilst managing labour costs is a key area for the future and I am delighted with our additional management and our plans for investment in this regard whilst ensuring we never lose sight of the importance of genuine local area expertise. 

 

We continue to drive professional standards through our industry leading Hunters Training Academy, which has seen almost 5,000 courses completed by the network in the first six months of this year.  Our web sessions increased by 5% in the period to July against the same period last year whilst our online appointment booking has grown by 40%.  Our customer service rating to June was 96% (to December 2018: 96%), being our 8th consecutive year above 90%.

 

Outlook

Given the market challenges it is very encouraging that our strategies have been able to mitigate against the tenant fee ban and that good quality independent businesses are increasingly seeing the benefit of joining the Hunters network.  I am pleased to report that we remain in line with expectations.

 

We are delighted with these results and we're looking this year to increase our level of branch conversions.  Our strong pipeline of opportunities give the management team confidence for H2 and beyond.  Consequently, the Board is declaring an increase of 9% in its interim dividend to 0.87p (2018: 0.8p) per share.  The dividend will be paid on 18 October 2019 to shareholders on the register on 20 September 2019.

 

I look forward to updating you again in due course.

 

 

 

 

 

 

Kevin Hollinrake

Chairman

 

 

 

Financial report

 

 

H1 2019

H1 2018

 

 

 

 

 

Network Income

£19.2m

£17.9m

 +7%

 

 

 

 

Sales

£6,588,000

£6,699,000

 (2%)

Adjusted operating profit1

£1,111,000

£854,000

+30%

Adjusted profit before tax2

£785,000

£714,000

+10%

Profit before tax

£246,000

£263,000

 (6%)

Cash generated

(£376,000)

(£465,000)

 

Net debt

£3,224,000

Dec-18 £2,363,000

 

Shareholders' funds

£7,150,000

Dec-18 £7,757,000

 

 

 

 

 

Shares in issue

32,502,088

31,827,088

 

Weighted average number of shares

32,200,650

31,818,043

 

Earnings after tax

£209,000

£207,000

 +1%

Adjusted earnings3

£734,000

£646,000

+14%

 

 

 

 

EPS

0.66p

0.65p

 +2%

Adjusted EPS

2.30p

2.03p

+13%

 

 

 

 

Dividend

0.87p

0.80p

 +9%

 

 

 

 

Branches

200

203

 (1%)

 

1     Adjusted operating profit is before depreciation, amortisation, impairments and profit/loss on disposal of non-current assets, acquisition and share-based payments expenses.  Excluding the impact of IFRS 16 Adjusted operating profit for H1 2019 was £857,000.

2     Adjusted profit before tax is Adjusted earnings less tax.  Excluding the impact of IFRS 16 Adjusted profit before tax for H1 2019 was £726,000.

3     Adjusted earnings is profit after tax adjusted to exclude amortisation, and profit/loss on disposal of intangibles, time-value interest costs, acquisition expenses, shared-based payments, other gains and losses and finance income.  Excluding the impact of IFRS 16 Adjusted earnings for H1 2019 was £681,000.

 

Revenue

Network income from sales and lettings across the network rose by 7% to £19.2m from £17.9m for the same period last year.  Turnover was slightly down at £6.6m (2018: £6.7m) as against a market as reported down by 7%1

 

We continued the strategy of converting independent agents to new franchise branches and in the six month period to June 2019 opened eight (2018: eight).  This sets the total number of branches at 200 (2018: 203).

 

Adjusted operating profit

Adjusted operating profit for the six months to June 2019 was £1.1m, an increase of 30% on the same period last year (2018: £0.85m), a result of the adoption of IFRS 16.  Excluding IFRS16, adjusted operating profit was £0.86m. 

 

Adjusted profit before tax

Adjusted profit before tax for the six months ended June 2019 was £785,000, an increase of 8% on the equivalent period last year (2018: £714,000) reflecting the balance of income generated. 

 

Earnings per share

Basic earnings per share for the six months ended 30 June 2019 was 0.66p (2018: 0.65p).  Adjusted earnings per share, excluding amortisation and acquisition costs, finance timing investment income and share-based payment expenses for the six months to June 2019 was 2.30p (2018: 2.03p).

 

Dividend

The Board declares an interim dividend of 0.87p (Interim 2018: 0.80p) per share, an increase of 9% as part of its policy to pay a progressive dividend whilst maintaining dividend cover of at least two times.  The dividend will be payable on 18 October 2019 to shareholders on the register on 20 September 2019.

 

Cash flow

The Company generated net cash from operations of £728,000 during the six months to June 2019.  There were further debt drawdowns in the six months to June 2019 totalling £516,000, which was used along with the operating cash inflow to fund the opening of the additional franchisee branches during the first six months of 2019.

 

Liquidity and capital reserves

As at 30 June 2019, the Group's cash balance was £1,342,000 (June 2018: £1,117,000) with net debt of £3,224,000 (December 2018: £2,363,000; June 2018: £2,997,000).

 

Risks

The primary risk to the business continues to be the state of the UK property market.  Some uncertainty remains in the marketplace, as individuals and businesses take stock and assess the macro-economic outlook.  Our balance between franchising, sales and lettings and geographical mix allows us, as these results have demonstrated, to mitigate against this risk.

 

 

 

 

 

Ed Jones

Chief Financial Officer

5 September 2019

 

1 - Based on Rightmove data in Hunters' areas

Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2019

 

 

 

 

6 months ended

30 June 2019

6 months ended

30 June 2018

Year

ended

31 December 2018

 

 

£'000s

£'000s

£'000s

 

 

 

 

 

Revenue

 

6,588

6,699

13,982

Ongoing administrative expenses

 

(5,480)

(5,845)

(11,698)

Adjusted operating profit

 

1,108

854

2,284

 

 

 

 

 

Depreciation and adjustments on disposal

 

(238)

(57)

(80)

Amortisation and adjustments on disposal

 

(449)

(409)

(949)

Business combination acquisition expenses

 

-

(2)

(13)

Share-based payment expense

 

(11)

(33)

(62)

Operating profit

 

410

353

1,180

 

 

 

 

 

Finance income

 

1

8

13

Finance costs

 

(167)

(98)

(201)

Other gains and losses

 

2

-

(23)

Profit before taxation

 

246

263

969

 

 

 

 

 

Taxation

 

(37)

(56)

(127)

 

 

 

 

 

Profit and total comprehensive for the period

 

209

207

842

 

 

 

 

 

 

 

Basic earnings per share

6

0.66p

0.65p

2.65p

 

 

 

 

 

 

 

 

 

Diluted earnings per share

6

0.64p

0.63p

2.55p

 

 

 

 

 

 

 

 

 

The Group has applied IFRS 16 at 1 January 2019, using the modified retrospective approach. Under this approach, comparative information is not

restated and the cumulative effect of initially applying IFRS 16 is recognised in retained earnings at the date of initial application. Refer to note 5 for details on the impact of IFRS 16.

 

                     

 

Consolidated Statement of Financial Position

As at 30 June 2019

 

           

Notes

30 June 2019

 

30 June 2018

 

31 December

2018

 

 

£'000s

 

£'000s

 

£'000s

ASSETS

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Intangible assets

3

11,584

 

11,195

 

11,214

Investment property

 

454

 

-

 

-

Property, plant and equipment

4

2,179

 

305

 

282

Investments

 

30

 

50

 

28

Deferred tax assets

 

118

 

124

 

90

 

 

14,365

 

11,674

 

11,614

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Trade and other receivables

 

1,570

 

1,840

 

1,608

Cash and cash equivalents

 

1,342

 

1,117

 

1,718

 

 

2,912

 

2,957

 

3,326

 

 

 

 

 

 

 

Total assets

 

17,277

 

14,631

 

14,940

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Borrowings

 

(82)

 

(80)

 

(80)

Lease liabilities

 

(459)

 

(20)

 

(21)

Current tax liabilities

 

(123)

 

(250)

 

(129)

Trade and other payables

 

(1,903)

 

(2,003)

 

(2,068)

 

 

(2,567)

 

(2,353)

 

(2,298)

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Borrowings

 

(4,484)

 

(4,034)

 

(4,001)

Lease liabilities

 

(2,297)

 

(52)

 

(42)

Other payables

 

(19)

 

(19)

 

(19)

 

 

(6,800)

 

(4,105)

 

(4,062)

 

 

 

 

 

 

 

Provisions for liabilities

 

 

 

 

 

 

Provisions

 

(52)

 

(60)

 

(65)

Deferred tax liabilities

 

(708)

 

(720)

 

(758)

 

 

(760)

 

(780)

 

(823)

 

 

 

 

 

 

 

Total liabilities

 

(10,127)

 

(7,238)

 

(7,183)

 

 

 

 

 

 

 

Net assets

 

7,150

 

7,393

 

7,757

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

Share capital

 

1,300

 

1,273

 

1,273

Share premium

 

4,417

 

4,107

 

4,107

Merger reserve

 

899

 

899

 

899

Retained earnings

 

534

 

1,114

 

1,478

 

 

 

 

 

 

 

Total equity

 

7,150

 

7,393

 

7,757

The Group has applied IFRS 16 at 1 January 2019, using the modified retrospective approach. Under this approach, comparative information is not restated and the cumulative effect of initially applying IFRS 16 is recognised in retained earnings at the date of initial application. Refer to note 5 for details on the impact of IFRS 16.

 

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2019

 

 

Share

capital

 

Share

premium

 

Merger reserve

 

Retained earnings

 

Total equity attributable to owners of the parent

 

 

£'000s

 

£'000s

 

£'000s

 

£'000s

 

 

 

 

 

 

 

 

 

 

At 1 January 2018

1,272

 

4,105

 

899

 

1,320

 

7,596

Profit and total comprehensive income

-

 

-

 

-

 

207

 

207

Dividends paid

-

 

-

 

-

 

(477)

 

(477)

Credit to equity for equity settled share-based payments

-

 

-

 

-

 

 33

 

33

Issue of share capital

1

 

2

 

-

 

-

 

3

Deferred tax on share-based payment transactions

-

 

-

 

-

 

31

 

31

 

 

 

 

 

 

 

 

 

 

At 30 June 2018

1,273

 

4,107

 

899

 

1,114

 

7,393

 

 

 

 

 

 

 

 

 

 

Profit and total comprehensive income

-

 

-

 

-

 

635

 

635

Dividends paid

-

 

-

 

-

 

(255)

 

(255)

Credit to equity for equity settled share-based payments

-

 

-

 

-

 

29

 

29

Deferred tax on share-based payment transactions

-

 

-

 

-

 

(45)

 

(45)

 

 

 

 

 

 

 

 

 

 

At 31 December 2018

1,273

 

4,107

 

899

 

1,478

 

7,757

 

 

 

 

 

 

 

 

 

 

Adjustment on initial application of IFRS 16 (note 5)

-

 

-

 

-

 

(356)

 

(356)

Profit and total comprehensive income

-

 

-

 

-

 

209

 

209

Dividends paid

-

 

-

 

-

 

(509)

 

(509)

Credit to equity for equity settled share-based payments

-

 

-

 

-

 

11

 

11

Issue of share capital

27

 

310

 

-

 

(292)

 

45

Deferred tax on share-based payment transactions

-

 

-

 

-

 

(7)

 

(7)

 

 

 

 

 

 

 

 

 

 

At 30 June 2019

1,300

 

4,417

 

899

 

534

 

7,150

 

 

Consolidated Statement of Cashflows

For the six months ended 30 June 2019

 

 

6 months

ended

30 June 2019

6 months

ended

30 June 2018

Year ended

30 December 2018

 

 

£000's

£000's

£000's

 

 

 

 

 

 

 

 

 

410

353

1,180

 

 

 

 

 

238

57

107

 

461

391

836

 

-

-

(27)

 

(12)

18

71

 

-

-

42

 

11

33

62

 

(17)

5

10

 

-

(50)

(50)

 

-

3

-

 

 

 

 

 

(54)

(195)

37

 

(167)

(287)

(223)

 

870

328

2,045

 

(87)

(83)

(173)

 

(53)

(23)

(260)

 

730

222

1,612

 

 

 

 

 

 

 

 

 

(907)

(747)

(896)

 

60

297

311

 

-

-

(350)

 

1

8

13

 

(846)

(442)

(922)

 

 

 

 

 

 

 

 

 

(509)

(477)

(732)

 

(45)

(325)

(370)

 

516

564

564

 

45

2

2

 

(267)

(9)

(18)

 

(260)

(245)

(554)

 

 

 

 

 

(376)

(465)

136

 

1,718

1,582

1,582

 

1,342

1,117

1,718

 

 

 

 

 

 

 

 

 

1,342

1,117

1,718

 

-

-

-

 

 

 

 

 

The Group has applied IFRS 16 at 1 January 2019, using the modified retrospective approach. Under this approach, comparative information is not

restated and the cumulative effect of initially applying IFRS 16 is recognised in retained earnings at the date of initial application. Refer to note 5 for details on the impact of IFRS 16.

 

 

Notes to the Financial Statements

For the six months ended 30 June 2019

 

1.    General information

 

Hunters Property Plc is a Company incorporated in the United Kingdom. The registered address of the Company is Apollo House, Eboracum Way, York, YO31 7RE. The consolidated financial statements (or "financial statements") incorporate the financial statements of the Company and entities (its subsidiaries) controlled by the Company (collectively comprising the "Group").

 

The principal activity of the Group is the provision of property services to consumers and businesses which include sales, lettings, franchising and related services.

 

2.    Accounting policies

 

2.1. Basis of preparation

 

The financial information set out in these interim consolidated financial statements for the six months ended 30 June 2018 is unaudited. The financial information presented are not statutory accounts prepared in accordance with the Companies Act 2006, and are prepared only to comply with AIM requirements for interim reporting.  Statutory accounts for the year ended 31 December 2018 on which the auditors gave an audit report which was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

 

New standards, interpretations and amendments adopted by the Group

The Group has initially adopted IFRS 16 Leases from 1 January 2019, replacing the current lease guidance including IAS 17. The standard permits either a full retrospective or a modified retrospective approach for the adoption. The Group has adopted the standard using the modified retrospective approach, with the right of use asset being equal to the lease liability at the point of original recognition. Therefore, the cumulative impact of the adoption is recognised in retained earnings as of 1 January 2019 and the comparatives are not restated.

 

Included as part of the right of use asset is a separable floor of a property, which accordingly has been accounted for as an investment property. As the property is subject to a fixed life contract which would have previously been accounted for as an operating lease, the directors consider it most appropriate to recognise the property at cost less depreciation. As these financial statements are interim only, the directors have not attempted to quantify the fair value of this investment property.

 

Further details on the Group's IFRS 16 accounting policy and transitional impact are provided in Note 5.

 

2.2. Basis of consolidation

 

The Group financial information consolidates those of the Parent Company and the subsidiaries that the Parent has control of. Control is established when the Parent is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.

 

Where a subsidiary is acquired/disposed of during the period, the consolidated profits or losses are recognised from/until the effective date of the acquisition/disposal.

 

All inter-company balances and transactions between group companies have been eliminated on consolidation.

 

Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by the Group.

 

2.3. Going concern

 

When assessing going concern the Directors have looked at the period of 12 months from the date of approval of the interim financial statements.  The Directors are satisfied that the Group has sufficient resources to continue in operation and accordingly these interim financial statements have been prepared on a going concern basis.

 

2.4.  Leases

 

The Group has initially adopted IFRS 16 Leases from 1st January 2019, replacing the current lease guidance including IAS 17. Previously all of the Group's leases were accounted for as operating leases (see Note 29 of the 2018 Group Annual Report and Accounts).

 

Under IFRS 16 Leases are accounted for on the right of use model. The Income Statement presentation and expense recognition pattern is similar to that required for finance leases by IAS 17 previously adopted by the Group. At inception, the Group assesses whether a contract contains a lease. This assessment involved the exercise of judgement about whether the Group obtains substantially all the

economic benefits from the use of that asset, and whether the Group has the right to direct the use of the asset.

 

IFRS 16 permits lessees to elect not to apply the recognition requirements to short term leases and leases for which the underlying asset is of low value. The Group has elected not to recognise short term leases of less than one year at inception and low value leases which will continue to be reflected in the Income Statement. This will be the ongoing policy adopted by the Group. There are no right of use assets or lease liabilities recognised for these leases, and the expense is recognised in the Income Statement on a straight line basis.

 

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses an incremental borrowing rate which is the rate of interest that the lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the rightofuse asset in a similar economic environment.

 

The rightofuse assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Rightofuse assets are depreciated over the shorter period of lease term and useful life of the underlying asset and are now presented within property, plant and equipment.

 

The Group applies IAS 36 to determine whether a rightofuse asset is impaired and accounts for any identified impairment loss in line with the Group's existing impairment accounting policy.

 

Under IFRS 16, the straightline operating lease expense, previously charged under IAS 17 has been replaced with a depreciation charge for the rightofuse assets and interest expense on lease liabilities.

 

 

3.    Intangible Fixed Assets

 

 

Goodwill

Software

 

FDG's & Rebrands

           Brands

Customer Lists

Total

 

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

Cost

 

 

 

 

 

 

At 1 January 2019

4,661

827

2,877

637

4,917

13,919

Additions - separately acquired

-

14

865

-

-

879

Disposals

-

-

(60)

-

-

(60)

At 30 June 2019

4,661

841

3,682

637

4,917

14,738

 

 

 

 

 

 

 

Amortisations and Impairment

 

 

 

 

 

 

At 1 January 2019

35

345

599

271

1,455

2,705

Amortisation charged for the year

-

82

131

32

216

461

Amortisation on disposal

-

-

(12)

-

-

(12)

At 30 June 2019

35

427

718

303

1,671

3,154

 

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

 

At 30 June 2019

4,626

414

2,964

334

3,246

11,584

 

 

 

 

 

 

 

At 31 December 2018

4,626

482

2,278

366

3,462

11,214

 

Franchise Development Grants ("FDG's") and rebrand costs are externally incurred expenses at the inception of certain contracts with franchisees in order to assist with the transition to using the Hunters brand name. The amounts invested are amortised over the minimum life of the underlying franchise contract, typically 10 to 15 years. The Group recognises an impairment as provision against impairment losses arising from the risk of early terminations of franchise agreements.

 

4.    Property, Plant and Equipment

 

 

Right of Use Asset

(note 5)

Leasehold Land and Buildings

 

Plant and machinery

           Fixtures, fittings and equipment

Motor vehicles

Total

 

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

Cost

 

 

 

 

 

 

At 1 January 2019

-

16

495

209

9

729

Impact of IFRS 16

4,564

-

-

-

-

4,564

Additions - separately acquired

67

-

15

13

-

95

At 30 June 2019

4,631

16

510

222

9

5,388

 

 

 

 

 

 

 

Amortisations and Impairment

 

 

 

 

 

 

At 1 January 2019

-

13

319

110

5

447

Impact of IFRS 16

2,544

-

-

-

-

2,544

Amortisation charged for the year

168

-

29

20

1

218

At 30 June 2019

2,712

13

348

130

6

3,209

 

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

 

At 30 June 2019

1,919

3

162

92

3

2,179

 

 

 

 

 

 

 

At 31 December 2018

-

3

176

99

4

282

 

In addition to the above, depreciation of £20,000 (2018 - £nil) has been charged on investment property.

 

 

5.    IFRS 16 Leases Transitional Impact

 

Leases are shown as follows in the balance sheet and Income statement for the period ending 30 June 2019:

 

 

1 January 2019 Restated extracts

£'000

Cumulative adjustment as at 30 June 2019

£'000

Consolidated Statement of Financial Position

 

 

Non-current assets

 

 

Investment property

474

454

Property, plant and equipment

2,301

1,919

Deferred tax assets

163

69

Current assets

 

 

Prepayments

326

(92)

Current liabilities

 

 

Obligations under finance leases

(458)

(437)

Current taxation

-

1

Non-current liabilities

 

 

Obligations under finance leases

(2,434)

(2,264)

Equity

 

 

Retained earnings

1,122

(350)

 

Impact of IFRS 16 in six months to 30 June 2019

 

£'000

Consolidated income statement

 

Rent

(240)

Equipment Hire

(14)

Depreciation

188

Finance Costs

59

Current taxation

(3)

Deferred taxation

4

 

 

Total impact on income statement

 (6)

 

Short term leases of less than twelve months at inception and low value leases are charged to the Income statement evenly over the life of the lease. In the six month period ending 30 June 2019, £nil relating to short period and low value leases were included in Operating expenses.

 

The liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019. All leases were discounted using an estimated implicit rate of 4.50%, with almost all leases by value relating to properties.

 

In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:

 

·      The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.

·      Reliance on an assessment of whether leases are onerous immediately before the date of application as an alternative to performing an impairment review.

·      The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

 

The Group has also elected not to reassess whether a contract is, or contains, a lease at the date of initial application. Instead, for contracts entered into before the transition the date the Group relied on its assessment made applying IAS 17 and IFRIC 4 'Determining whether an arrangement contains a lease'.

 

Included as part of the right of use asset is a separable floor of a property, which accordingly has been accounted for as an investment property. As the property is subject to a fixed life contract which would have previously been accounted for as an operating lease, the directors consider it most appropriate to recognise the property at cost less depreciation. As these financial statements are interim only, the directors have not attempted to quantify the fair value of this investment property.

 

6.      Earnings per share

 

The calculation of the basic and diluted earnings per share is based on the following data:

 

Earnings

30 June 2019

 

30 June    2018

 

£'000s

 

£'000s

Earnings for the purpose of basic earnings per share being net profit attributable to owners of the parent

209

 

207

Effects of dilutive potential ordinary shares

-

 

-

 

 

 

 

Earnings for the purposes of diluted earnings per share

209

 

207

 

 

Number of shares

30 June 2019

 

30 June    2018

 

£

 

£

Weighted average number of ordinary shares for the purposes of basic earnings per share

32,200,650

 

 

31,818,043

 

 

 

 

Effects of dilutive potential ordinary shares

598,611

 

1,016,037

 

 

 

 

Weighted average number of ordinary shares for the purposes of diluted earnings per share

32,799,261

 

 

32,834,080

                                                                                                                        

Earnings per share

 

Pence per weighted average shares

0.66p

 

0.65p

 

 

 

 

Pence per weighted average diluted shares

0.64p

 

0.63p

 

 

The Directors use adjusted earnings before time-value interest, investment revenue, amortisation, and costs of acquisition ("Adjusted Earnings") as a measure of ongoing profitability and performance. The calculated Adjusted Earnings for the current period of accounts is as follows:

 

Adjusted Earnings per Share

30 June 2019

 

2019 Excluding IFRS 16

 

30 June   2018

 

£'000s

 

£'000s

 

£'000s

Profit after taxation

209

 

215

 

207

Adjusted for:

 

 

 

 

 

Time-value interest costs

63

 

4

 

3

Investment revenues

(1)

 

(1)

 

(8)

Amortisation and profit/loss of disposal of intangibles

449

 

449

 

409

Costs of acquisition

3

 

3

 

2

Share-based payment expense

11

 

11

 

33

 

 

 

 

 

 

Adjusted Earnings

734

 

681

 

646

 

Adjusted Earnings per share

Pence per weighted average shares

2.30p

 

2.14p

 

2.03p

 

 

 

 

 

 

Pence per weighted average diluted shares

2.26p

 

2.10p

 

1.97p

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR XZLFBKKFXBBE
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Interim Results - RNS