Centaur Media plc
Incorporated in England and
Wales
Registration number:
04948078
LEI:
2138005WK87G7DQRQI62
ISIN: GB0034291418
13 March 2024
Centaur Media
Plc
Preliminary results for the
year ended 31 December 2023
Comfortably exceeded MAP23
EBITDA margin objective
Strong growth in EBITDA and
EBITDA margin
Centaur Media plc ("Centaur"), an
international provider of business information, training and
specialist consultancy, is pleased to present its preliminary
results for the year ended 31 December 2023.
Swag Mukerji, Chief Executive Officer,
commented:
"This year's performance is the
culmination of our MAP23 strategy which achieved its
three clear objectives: to implement a simple,
efficient and scalable operating model, develop high quality,
trusted products which are the leaders in their markets, and build
the credibility of Centaur's management team for delivering on its
strategic and financial commitments. We have significantly grown
our profitability and built a business with an impressive
proportion of higher quality revenue, providing us with a scalable
platform for long-term sustainable future growth.
Looking ahead, we are determined
to keep driving performance beyond MAP23 to become a
customer-centric business intelligence and learning organisation
with growth from organic revenue, new product development and
selective bolt-on acquisitions. I firmly believe Centaur has the
talent, strategy and financial discipline to achieve its ambitious
objectives and look forward to updating the market on our next
phase of growth at our upcoming Capital Markets Day."
Financial highlights
Margin Acceleration Plan 2023
(MAP23) highlights since 2020:
·
|
Revenue from continuing operations
grew by 27%
|
·
|
Higher quality revenue grew by 38%
and now represents 80% of total revenue (2020: 67%)
|
·
|
Adjusted1 EBITDA grew
155% from £3.8m to £9.7m
|
·
|
Adjusted1 EBITDA margin
more than doubled to 26%
|
·
|
Total returns to shareholders as
ordinary and special dividends of 8.9p per share
(£12.8m)
|
2023 trading:
£m
|
2023
|
2022
|
Statutory revenue
|
37.3
|
38.4
|
Adjusted1 EBITDA
margin
|
26%
|
21%
|
Adjusted1
EBITDA
|
9.7
|
8.1
|
Adjusted1 operating
profit
|
7.6
|
4.9
|
Statutory operating
profit
|
6.1
|
3.6
|
Group statutory profit after
taxation
|
4.9
|
2.8
|
Net cash2
|
9.5
|
16.0
|
Ordinary dividend (pence per
share)
|
1.8
|
1.1
|
Adjusted1 diluted
earnings per share (pence)
|
4.2
|
2.6
|
·
|
Revenue from continuing operations
declined by 3% to £37.3m while higher quality revenue streams grew
by 3%
|
·
|
Adjusted1 EBITDA grew
20% to £9.7m
|
·
|
Adjusted1 EBITDA margin
improved to 26% from 21%
|
·
|
Net cash2 of £9.5m,
after paying ordinary and special dividends during the year of
£8.9m, gives capacity to reinvest for growth
|
·
|
Final ordinary dividend of 1.2p
per share giving total ordinary dividends of 1.8p for the year
(2022: 1.1p)
|
Financial and strategic highlights
This year marked the successful
delivery of Centaur's MAP23, which targeted an
adjusted1 EBITDA margin of 23% by 2023. Centaur recorded another year
of profitable growth building on the structures and processes that
have been implemented over the past three years, despite the
continued macroeconomic and geopolitical uncertainties.
Centaur generated an
adjusted1 EBITDA margin of 26% (up from 21% in 2022 and 12% in 2020),
comfortably exceeding the MAP23 target and resulting in net
cash2 of £9.5m at 31 December 2023 after
paying ordinary and special dividends of £8.9m in the
year.
Centaur reported revenue of £37.3m
(slightly down from £38.4m in 2022) after a softening in the
macroeconomic environment trading conditions and inflationary
pressures. Centaur recorded good performance across its higher
quality revenue streams in Premium Content and Training and
Advisory, which now collectively represent 80% of the business, up
from 76% in 2022.
The higher quality revenue streams
have driven the successful delivery of MAP23. The demand for these
products and services, across a range of industries and sectors,
are resilient in markets characterised by change driven by
technological advancement, structural transformation and
globalisation. These fundamentals provide Centaur with a clear
opportunity to use its competitive advantage, operational leverage
and deep level of expertise to further grow in these
sectors.
The strategic objective across
Centaur's suite of brands is to position them for continued growth
by investing in customer-centric business intelligence and learning
products and harnessing cross-selling opportunities, with the aim
of enabling customers to deliver better corporate outcomes through
building competitive advantage in their markets.
In 2023, Centaur's higher quality
revenue streams continued to demonstrate their resilience focused
on The Lawyer, MW Mini MBA, Econsultancy and Influencer
Intelligence.
·
|
The Lawyer Premium Content
revenue grew by 9% due to corporate subscription renewal rates of
108% supported by Signal and Litigation Tracker, its data-driven
paid-for products. However, Events revenue of £1.8m was down 11%
year-on-year due to shortfalls in sponsorship across several events
dampening the overall revenue growth to 1%.
|
·
|
MW Mini MBA continued its
growth with revenue up 8% driven by a 23% yield increase, although
delegate numbers declined by 12%. The new third MW Mini MBA in
Management course has contributed above management
expectations.
|
·
|
Econsultancy revenue declined
14% owing to delays in Training and Advisory on the client side,
due to budgetary caution. We expect to gain the revenue benefit of
these delays in 2024.
|
·
|
Influencer Intelligence recorded a small decrease in renewal rates to 84%, down from
90% in 2022, but saw reassuring momentum build through
H2.
|
Due to the macroeconomic
environment, performance at Really B2B and Design Week was below
management's expectations. As such we made the difficult decision
to close these businesses in December 2023. We are confident that
this will further enable Centaur to focus on its higher quality
revenue streams, which will drive improved profitability and
provide the business with a solid platform for further
growth.
Centaur has a strong management
team including recent appointments such as Xeim's marketing
director, a new MD for Mini MBA, a new Chief People Officer, a CTO
and a Data Director, who together with the hard work and
determination of everyone at Centaur have successfully delivered
MAP23. Alongside this progress, Centaur has taken clear operational
and financial steps to focus on organic growth and manage costs to
reinforce the resilience of the business. These steps will ensure
that Centaur is best positioned to withstand any continued
macroeconomic uncertainty, building a platform for long-term,
sustainable growth beyond MAP23.
Outlook
Overall, the culmination of our
three-year strategy sees Centaur having undergone a significant
transformation building a scalable platform for future growth.
While we start 2024 cautious of the macroeconomic environment's
impact on Centaur, we remain reassured by the foundations built
during MAP23. Centaur's strategic priority is to become a
customer-centric business intelligence and learning organisation
and the next stage of the journey has begun. We look forward to
providing more detail on this at our Capital Markets Day on 23
April (see enquiries below).
Dividend
Centaur's Board believes in the
long-term fundamentals of the business, recognising the importance
of shareholder returns, and has been distributing progressive
dividend payments to investors throughout the MAP23 period.
Additionally, Centaur has paid significant special dividends in
2023 as the success of the strategy has led to considerably
stronger cash flows and a more robust balance sheet. As a result of
the special dividends paid in 2023, Centaur's net
cash2 position reduced to £9.5m as at 31 December 2023 (2022:
£16.0m) but remains at a strong level.
In line with our normal dividend
policy of distributing 40% of adjusted1 retained earnings, the Board
has declared a final dividend of 1.2 pence per share (£1.7m), which
when added to the interim dividend provides a total dividend for
the year of 1.8 pence per share (£2.6m) for 2023. In total,
dividends of £12.8m (8.9 pence per share) have been paid over the
course of MAP23.
1
Adjusted EBITDA is adjusted operating profit
before depreciation and amortisation. Adjusted results exclude
adjusting items as detailed in note 4 of the financial
information.
2
Net cash is the total of cash and cash
equivalents and short-term deposits.
Enquiries
Capital Markets Day at 9am on 23
April 2024 at WeWork office room 15A, 10 York Road, London SE1 7ND.
For details, please contact Teneo below or email
investor.relations@centaurmedia.com
Centaur Media plc
|
|
Swag Mukerji, Chief Executive
Officer
Simon Longfield, Chief Financial
Officer
|
020 7970 4000
|
Teneo
|
|
Zoë Watt / Oliver
Bell
|
07713 157561 / 07917
221748
|
Note to editors
Centaur is an international
provider of business information, training and specialist
consultancy within the marketing and legal professions that
inspires and enables people to excel at what they do, to raise
their aspirations and to enable our clients to deliver better
performance.
Advise. Inform. Connect.
Our purpose
We enable ambitious leaders to see
around corners and deliver change
·
|
We inspire and empower the world's
most dynamic leaders in the marketing and legal
professions
|
·
|
We are committed to the delivery
of market-leading insight and tangible outcomes to build long-term,
sustainable growth
|
·
|
Every article, every piece of
research, every data point, every live event, training programme,
advisory opportunity and interaction turbo-charges leaders and
their teams to predict the future and then make it
happen
|
Our vision
We aim to be the 'go to' company
in the international marketing and legal sectors to:
·
|
Provide business information to
customers using data, content and insight;
|
·
|
Offer training services through
digital initiatives and online programmes;
|
·
|
Connect specific communities
through digital media and events; and
|
·
|
Advise businesses on how to
improve their performance and return on investments.
|
We will build strong and lasting
relationships with our customers by providing cutting-edge insight
and analysis to deliver long-term sustainable returns for our
shareholders.
Our business
Centaur is an international
provider of business information, training and specialist
consultancy in the marketing and legal professions that inspires
and enables people to excel at what they do. Our Xeim and The
Lawyer business units serve the marketing and legal sectors
respectively and, across both, we offer a wide range of products
and services targeted at helping our customers add
value.
Our reputation is built on the
trust and confidence arising from a deep understanding of these
sectors and a strong track record of providing our customers with
market-leading insight, content, data and training. Our key
strengths are the expertise of our people, the quality of our
brands and products, and our ability to harness technology to
innovate continually and develop our customer offering. This
enables us to help our customers raise their aspirations and
deliver better performance.
Highlights of the year and during MAP23
Financial highlights
Revenue from continuing operations
£37.3m
2022: £38.4m
2021: £35.4m
2020: £29.3m
|
Adjusted1 2
EBITDA
£9.7m (26% margin)
2022: £8.1m (21%
margin)
2021: £6.4m (16%
margin)
2020: £3.8m (12%
margin)
|
Net Cash3
£9.5m
2022: £16.0m
2021: £13.1m
2020: £8.3m
|
Adjusted1
diluted
EPS
4.2p
2022: 2.6p
2021: 1.9p
2020: 0.3p
|
1 See alternative performance measures
section for definition of adjusted results
2 Adjusted EBITDA is reconciled to
Adjusted Operating Profit in note 1(b)
3 Net Cash is the total of cash and
cash equivalents and short-term deposits
Strategic and operational highlights
·
|
Strong performance exceeding the
MAP23 EBITDA margin objective of 23% in 2023
|
·
|
Clear operational and financial
steps taken to focus on organic growth and manage costs that have
built a strong platform for future profitable revenue
growth
|
·
|
Increase in higher quality revenue
to 80% of revenue from continuing operations
|
·
|
New customer-centric products
launched including MW Mini MBA in Management course, additional
learning courses on Econsultancy's LMS platform and Horizon Live in
The Lawyer
|
·
|
Closure of two brands, Really B2B
and Design Week, after revenue and profit performance below
expectations
|
·
|
Strong balance sheet with net cash
balance of £9.5m after a return of capital to shareholders paid of
£8.9m in ordinary and special dividends
|
Chief Executive's Statement
This is my fifth Annual Report as
CEO of Centaur and I'm pleased with the platform for growth that
our ambitious Margin Acceleration Plan 2023 ("MAP23") has provided
the Group.
The last three years have been
characterised by macroeconomic turbulence, sector headwinds and
extended impact of Covid-19. Centaur weathered these challenges to
deliver significant improvements to the quality of its customers,
products and profitability, aligning the business with resilient
demand for high-quality business information and digital training
services.
This year, we succeeded in
generating an Adjusted EBITDA margin of 26%, reflecting our focus
on higher quality revenue streams and the operational leverage
inherent within our business. This exceeded the ambitious
profitability target for 2023 set out three years ago of 23% and
has been achieved substantially through profitable revenue
growth.
We are determined to keep driving
performance and growth beyond MAP23, strengthening our position as
a leading customer-centric business intelligence and learning
organisation through organic revenue growth including new product
development, and inorganic revenue growth through acquisitions. We
look forward to providing more detail after the Group's preliminary
results, setting out our vision to deliver the specialist insights
our customers need to succeed.
Financial performance
In 2023, Centaur reported revenue
from continuing operations of £37.3m (a reduction of 3% from £38.4m
in 2022), and a Group Adjusted EBITDA of £9.7m (up from £8.5m in
2022). It was satisfying to see that the Adjusted EBITDA margin for
2023 was 26% (up from 21% in 2022) which was well ahead of the 23%
target that we had set three years ago and more than double the
margin of 12% in 2020, when we started our Margin Acceleration
Plan.
The Group ended the year with net
cash of £9.5m, a reduction from £16.0m last year after paying out
significant ordinary and special dividends in 2023 totalling £8.9m.
I am pleased with the contribution generated from the trust and
confidence that our customers have in all of our brands and that we
have continued to gain positive momentum over the past twelve
months.
Strategic and operational steps
have been taken to provide a scalable platform for further organic
profitable revenue growth to reinforce the resilience of the
business. These include developing our offer for customers,
focusing on blue-chip multinational clients, building our pipeline
of new business, conducting negotiations with suppliers at a Group
level and implementing flexible reward structures to retain and
recruit top talent.
There has been a slight decrease
in employee numbers on 2022, as increases in growth areas were
offset by the closure in December of Design Week and ReallyB2B and
reductions in other less strategically important areas of the
business. We have also reduced our central costs from 2022, along
with our related carbon footprint, aided by our move into a smaller
London office at the start of 2023 and will continue to control our
cost base in 2024. These steps will maintain our operational
leverage and ensure that the business is best positioned to
withstand any wider macroeconomic uncertainty and build on the
achievements of MAP23.
Dividends
The Group has proposed a final
dividend of 1.2 pence per ordinary share to take our total ordinary
dividends for 2023 to 1.8 pence, now significantly above the 1.0
pence per share that we have as a de minimis under our dividend
policy. In addition to the special dividend of 3.0 pence per share
paid in February 2023, a further special dividend of 2.0 pence per
share, was paid in March 2023, bringing the total dividends paid
out to shareholders during 2023 to £8.9m. The total dividends paid
out to shareholders in relation to the whole MAP23 period of 2021
to 2023 will have been 8.9 pence or £12.8m.
Operational review
Centaur comprises two business
units, Xeim and The Lawyer. Xeim forms 78% of our revenue and is
focused on the marketing sector across a wide range of industries.
The Lawyer is focused on the legal sector and drives the other 22%.
Both sectors continue to experience opportunities created from
significant disruption, driven by technological advances and
artificial intelligence, structural change and globalisation. This
gives Centaur substantial competitive advantages to build on the
achievements of MAP23 and grow in these sectors.
To enable the delivery of MAP23
and improve the quality of revenue streams, Centaur had prioritised
investment and resource allocation to the brands that have been
identified as key drivers of growth across the two business units.
The Lawyer is one of these key brands, while the other three form
part of the Xeim portfolio (MW Mini MBA, Econsultancy and
Influencer Intelligence).
Over the course of MAP23, we made
significant progress in developing these key brands and the rest of
our brand portfolio. Our aim has been to position each of these for
further growth, developing cross-selling opportunities and
enhancing their shared capabilities, to enable our customers to
deliver better business outcomes through building competitive
advantage in their markets.
The MW Mini MBA successfully launched its
third course in September, the MW Mini MBA in Management, which
exceeded expectations with 400 participants. The brand delivered an
8% increase in revenue, although we saw lower volumes on the two
main courses, driven by a 23% increase in yield from discount
management, price rises at the start of the year and the launch of
the third course, which contributed above management expectations.
We also launched a new network, open to the alumni of all MW Mini
MBA courses, creating an online community to facilitate
peer-to-peer connections and opportunities for development.
Strengthening the capabilities of the brand was a key focus in the
year with the recruitment of a new Managing Director, Tim Plyming,
who has joined from the Open University.
Econsultancy continued to
show its resilience with several large blue-chip multinational
contract wins, including Sky, John Lewis Partnership and Jaguar
Land Rover. However, Training and Advisory revenue declined - we
saw good new customer wins and grew our digital and learning
subscription services but suffered overall slower growth due to
customer-driven contractual and delivery delays. A continued
programme of improvements saw the brand develop its eLearning
content on the new platform, including four completely new
eCommerce courses, a new Omnichannel course for the Consumer
Packaged Goods sector and translation of all eLearning materials
into 5 languages. This programme extension built on the
developments in 2022 that enabled the business to combine its
consultancy and online subscription learning, enhancing the offer
to customers.
Influencer Intelligence recorded a small decrease in renewal rates to 84%. Although
down from 90% levels in 2022, we were reassured by the momentum
built through the year, reaching 87% in H2. Informed by recent
insights to the needs of customers, the brand has developed a new
product proposition of Discover (the right influencers for you),
Evaluate (how they fit with your brand goals), Plan (your
activations) and Contact (chosen brand ambassadors).
The Lawyer had another year
of strong performance with Premium Content revenue growing by 9%
due to corporate subscription renewal rates of 108% supported by
Signal and Litigation Tracker, its data-driven paid-for products.
However, Events revenue of £1.8m was down 11% year-on-year due to
shortfalls in sponsorship across several events dampening the
overall revenue growth to 1%.
In November, we launched Horizon
Live, an interactive forum for our senior law firm subscribers to
get deeper insights from our content and data in a live environment
and saw strong uptake. We added 85 new corporate subscription
accounts in 2023, by developing new content for Europe, including
our "Passport" newsletter, and new content for law firms outside of
the top 100, as well as upgrading single subscriptions to corporate
accounts. Further, our podcast has gained good traction in 2023,
enabling subscribers to listen to lively debates on the most
important issues in the market.
Looking at our portfolio of other
brands, the strategic decision to close Design Week and Really B2B
has sharpened the overall focus of the Group, and the brands that
remain add to the customer proposition of Xeim's key brands.
Elsewhere, we were pleased with Oystercatchers' success advising
customers with agency review and selection, Marketing Week's
platform and content development and Festival of Marketing's
sold-out October event at The Brewery in London.
People
A key part of our strategy is
ensuring that we have the right people in the right positions to
deliver our intended growth. Over the course of 2023, Centaur
continued to strengthen its management team. We made several
excellent new hires, including Tim Plyming who joined as Managing
Director of the Marketing Week Mini MBA, Agata Kreutzinger as Data
Director and Nicola Moretti who took over as Chief People Officer
following the retirement of Jacquie MacKenzie at the end of the
year.
Following the delivery of MAP23,
and replacing the existing Centaur Strategy Group, we have set up a
new Leadership Forum to focus on the strategy, targets and delivery
of the next phase of Centaur's growth.
Looking to 2024
MAP23 has delivered three years of
higher quality revenue, EBITDA and EBITDA margin growth. The
increased share of repeatable and higher quality revenue streams
from a higher proportion of blue-chip customers has further
reinforced the resilience of the Group.
The Lawyer will accelerate its
penetration of UK and European law firms with new content, a new
digital platform for subscribers, the launch of a subscription
intelligence service powered by proprietary data and the expansion
of face-to-face forums with Horizon Live. This will enable The
Lawyer to deliver industry leading sector intelligence in the UK
market, as well as the significantly larger opportunities
internationally.
At Xeim, developing paid content
and information via corporate packages, subscriptions and
partnerships will remain a strategic priority, alongside our
industry leading events. Xeim's brands will enhance their focus on
addressing the market demand in the UK creating solutions for the
top 200 marketing spend companies and identifying opportunities to
provide solutions to blue-chip multinational customers.
Alongside these strategic
priorities, we will continue to extract value from back-office
synergies for Xeim and The Lawyer, across technology, facilities
and shared services.
Summary
I wanted to conclude by reflecting
on the progress MAP23 has delivered over the past three years and
reiterate my thanks to everyone at Centaur for their hard work and
determination in delivering this strategy so successfully.
Profitably growing revenue whilst doubling the margins of a Group
this size is a considerable achievement and has taken a tremendous
team effort - particularly when set against the upheaval that has
been experienced through Covid-19 and other macroeconomic
uncertainty.
As we look to 2024, Centaur
remains entirely focused on growth. We want to provide the most
advanced and competitive offering in the marketplace - to do that
we will continue to build the quality of our expertise, focus on
our strategically important revenue streams and adapt to deliver
productively and profitably what our customers need and
want.
Key Performance Indicators
The Group has set out the
following core financial and non-financial metrics to measure the
Group's performance. The KPIs are monitored by the Board and the
focus on these measures will support the successful implementation
of the MAP23 strategy. These indicators are discussed in more
detail in the CEO and financial reviews.
KPI
|
|
Commentary
|
Financial
|
|
|
Underlying revenue
growth/(decline)1
|
2023: (3)%
2022: 8%
|
The growth/(decline) in revenue
from continuing operations adjusted, if applicable, to exclude the
impact of event timing differences and the revenue contribution
arising from acquired or disposed businesses.
See Chief Executive Officer's
Statement and the Financial Review for explanation of this year's
decline.
|
Adjusted EBITDA margin1
|
2023: 26%
2022: 21%
|
Adjusted EBITDA as a percentage of
revenue where Adjusted EBITDA is defined as Adjusted operating
profit before depreciation and impairment of tangible assets and
amortisation and impairment of intangible assets other than those
acquired through a business combination.
The continued improvement in
margin reflects the increase in higher quality revenue streams
together with the impact of the Group's operational
leverage.
|
Adjusted diluted EPS1
|
2023: 4.2 pence
2022: 2.6 pence
|
Diluted earnings per share
calculated using the Adjusted earnings, as set out in note 9 to the
financial information.
The 62% increase in EPS reflects
the increase in post-tax profitability.
|
Cash conversion1
|
2023: 80%
2022: 99%
|
The percentage by which Adjusted
operating cash flow covers Adjusted EBITDA as set out in the
financial performance review.
The cash conversion in 2023 was
impacted by adverse movements in working capital compared to the
level achieved in 2022.
|
Non-financial
|
|
|
Attendance at Festival of Marketing
|
2023: 998
2022: 920
|
Number of unique delegates
attending the Festival of Marketing event in October.
This year's event reached the
capacity of the venue. The number of paid delegates increased
compared to 2022.
|
Delegates on MW Mini MBA course
|
2023: 5,709
2022: 6,490
|
Number of delegates on MW Mini MBA
courses.
There was a decrease in the number
of delegates on the two main courses but 2023 also includes
delegates on the new Management course launched in September. Yield
per delegate was however significantly higher in 2023.
|
Xeim customers >£50k
|
2023: 71 (£10.1m)
2022: 81 (£11.6m)
|
Number and value of Xeim customers
with sales greater than £50,000.
The focus on higher value accounts
continued in 2023, although reduced revenue from advisory contracts
relates to the decrease in the number of higher paying customers.
The average value of these accounts was maintained year on
year.
|
Top 250 law firm customers
|
2023: 149 (£3.4m)
2022: 144 (£3.2m)
|
Number and value of revenue from
top 200 UK law firms and top 50 US law firms.
The focus on higher value accounts
continued in 2022 with a 24% increase in the average value of these
accounts.
|
1
See definitions in Financial Review
Performance: Financial Review
Overview
2023 marks the final year of our
three-year MAP23 strategy, which focused on revenue and profit
growth and the achievement of an Adjusted EBITDA margin of 23% in
2023. I am pleased to report that this margin objective was
exceeded in 2023, where a 26% Adjusted EBITDA margin has been
achieved, more than double the margin of 12% in 2020 which was the
base year for the strategy.
During the three-year strategy
period, the Group has faced challenges posed by the pandemic and
wide-ranging economic uncertainties. However, through these
challenging times, Centaur has grown continuing revenue by 27%
since 2020 and the proportion of higher quality revenue from
Premium Content and Training and Advisory has now increased to 80%,
compared to 67% at the start of MAP23. The aim of reaching £45m of
revenue during MAP23 was not realised due to the closure of two
businesses and the drag on growth from non-strategic Recruitment
Advertising and Marketing Solutions revenue.
During 2023 Centaur has increased
its higher quality revenue from Premium Content and Training and
Advisory by 3%. However, macroeconomic headwinds impacted the
Group's non-strategic revenue, resulting in a decrease in revenue
from continuing operations of 3% from 2022.
A combination of careful cost
management and the proportionally greater contribution from higher
quality revenue has contributed to a decrease of 11% in the Group's
operating expenses, resulting in Adjusted EBITDA of £9.7m at a 26%
margin, up from £8.1m and 21% in 2022.
During 2023 the difficult decision
was made to close our Really B2B and Design Week businesses, which
struggled to maintain their revenue and profitability in an
economic downturn. The results of these businesses have been
presented in discontinued operations. The Financial Review in this
Annual Report focuses on continuing operations, unless otherwise
specified.
Performance
Group
Statutory revenue fell by £1.1m to
£37.3m in 2023, a decrease of 3%. Xeim decreased 4% whereas The
Lawyer increased 1%. Revenue generated from outside the UK remained
steady at 38% (2022: 38%) with an increase of 25% in revenue from
the Rest of the World offset by decreases in all other
regions.
Adjusted EBITDA increased by 19%
from £8.1m to £9.7m at a margin of 26% (2022: 21%). This improved
margin was on slightly decreased revenue, demonstrating the
contribution provided by our higher quality revenue streams,
resolute cost control and improved efficiencies within the
Group.
The Group posted an increase of
54% in adjusted operating profit to £7.6m (2022: £4.9m) as a result
of the increase in adjusted EBITDA in addition to a lower IFRS 16
depreciation expense since the move to a smaller office in 2023.
The Group achieved an adjusted profit after taxation of £6.4m
(2022: £3.7m) resulting in an impressive 62% increase in fully
diluted adjusted earnings per share to 4.2 pence per
share.
Despite an increase in EBITDA, a
focus on cash management and healthy cash collections from
customers, during 2023 net cash balances decreased from £16.0m to
£9.5m, most significantly due to ordinary and special dividend
payments of £8.9m as well as payment of exceptional costs and lower
working capital balances.
Xeim
Xeim's revenue for 2023 was
£28.9m, a decrease of 4% from £30.1m in 2022. Premium Content in
2023 remained flat with modest growth in Econsultancy and Marketing
Week offset by slight declines in other brands in a tough
environment for both renewals and new business.
Revenue from Training and Advisory
showed modest year-on-year growth of 3% as a result of a robust
trading performance by Oystercatchers and from a continued increase
in MW Mini MBA revenue. Conversely, delays by customers for both
engagement and delivery caused a significant year-on-year shortfall
for Econsultancy.
The planned return to one single
physical Festival of Marketing Event in October, after multiple
virtual and hybrid events in prior years, caused an expected
decline in Events revenue of 18% year-on-year, although as a result
of this focus, the October event achieved a 37% increase in
revenue.
Recruitment Advertising of £0.1m
was weak throughout the year and fell 59% from 2022. This has been
a long-term non-strategic revenue stream for Xeim and a decision
has been made to exit this revenue stream going forward.
Marketing Solutions saw a
year-on-year decline of 33% with low spend from customers facing an
increasingly tough market environment.
Xeim posted an Adjusted EBITDA of
£9.0m for the year, an increase of 10% from £8.1m in 2022. This was
driven by improving revenue margins and a 10% decrease in operating
costs.
Econsultancy's momentum in 2022
met headwinds in 2023 particularly in Training and Advisory after
delays on the customer side, leading to a 14% revenue decline
year-on-year. We expect to gain the revenue benefit of these delays
in 2024 as we continue to deliver valuable consultancy to our
blue-chip international customers. In Premium Content we continue
to invest in Econsultancy's blended multi-touch learning strategy
to aid the recovery of subscription renewal rates which stand at
72% (2022: 82%) and new business.
Influencer Intelligence benefitted
in 2022 from the recovery of the retail and fashion industries. In
2023 this improvement plateaued with a small decrease in renewal
rates to 84% (2022: 90%), partially upheld by maintaining the
performance of new business in line with 2022. The resulting
revenue saw a decline of 5% year-on-year.
The MW Mini MBA continued to grow
with revenue up 8% driven by a 23% yield increase, but total
delegate numbers declining by 12%. MW Mini MBA retains excellent
Net Promoter Scores of over +65 on all four of the Marketing and
Brand course cohorts in 2023 and strong loyalty from recurring
corporate customers. A third MW Mini MBA in Management course was
launched in 2023, with its first cohort in September seeing 400
delegates and revenue performing well above
expectations.
Of our other Xeim brands, revenue
declined by 6% year-on-year, with slightly lower renewal rates for
Fashion Monitor and a decline in Marketing Solutions revenue for
both Marketing Week and Creative Review, in addition to the planned
reduction to one Festival of Marketing event. These shortfalls were
partially offset by an extremely pleasing performance in
Oystercatchers which grew revenue by almost 50% as more branded
customers reviewed their advertising agencies.
During 2023 the difficult decision
was made to close our Really B2B and Design Week businesses, which
saw lower revenue and profitability in an economic downturn due to
the loss of key customers. The results of these businesses have
been presented in discontinued operations.
The Lawyer
Revenue for The Lawyer grew by 1%.
Premium Content revenue showed strong growth of 9% primarily from
TheLawyer.com corporate subscriptions performance with an
impressive renewal rate of 108% (2022: 116%) bolstered by new
business more than doubling from 2022. This resulted in the book of
business growing by 16% and customer volume by 18%. The renewal
rate for Signal remained strong at 97% (2022: 102%) and despite new
business being lower than expectations the book of business has
grown 9% year-on-year.
The Lawyer retains a significant
penetration of the top 100 law firms of 91% (2022: 90%)
demonstrating the value delivered to our customers and continues to
gain penetration into the next tier of top 150 UK law
firms.
The Lawyer ran a series of
successful conferences, roundtables and awards during 2023,
although Events revenue of £1.8m was down 11% year-on-year with
shortfalls in sponsorship across a number of conference events.
Marketing Solutions also had a difficult year with a 25% decline in
revenue. Recruitment advertising stayed materially flat
year-on-year and although being a non-strategic revenue stream for
Centaur as a whole, remains valuable for The Lawyer as a source of
connectivity with its audience.
This led to a rise in adjusted
EBITDA from £3.0m in 2022 to £3.4m in 2023 at a margin of 41%. The
underlying business is performing strongly with resilient renewal
rates and continued engagement by users indicating how important
The Lawyer is to leading law firms and their fee
earners.
Measurement and non-statutory adjustments
The statutory results of the Group
are presented in accordance with UK-adopted International
Accounting Standards (IFRS). The Group also uses alternative
reporting and other non-GAAP measures as explained below and as
defined in the table at the end of this section.
Adjusting items
Adjusted results are not intended
to replace statutory results but are prepared to provide a better
comparison of the Group's core business performance by removing the
impact of certain items from the statutory results. The Directors
believe that adjusted results and adjusted earnings per share are
the most appropriate way to measure the Group's operational
performance because they are comparable to the prior year and
consequently management review the results of the Group on an
adjusted basis internally.
Statutory operating profit from
continuing operations reconciles to adjusted operating profit and
adjusted EBITDA as follows:
|
Note
|
|
2023
£m
|
|
Re-presented
2022
£m
|
Statutory operating profit
|
|
|
6.1
|
|
3.5
|
Adjusting items:
|
|
|
|
|
|
Exceptional costs
|
4
|
|
0.3
|
|
0.1
|
Amortisation of acquired
intangible assets
|
11
|
|
0.1
|
|
0.5
|
Share-based payments
|
23
|
|
1.1
|
|
0.8
|
Adjusted operating profit
|
|
|
7.6
|
|
4.9
|
Depreciation and
amortisation
|
3
|
|
2.1
|
|
3.2
|
Adjusted EBITDA
|
|
|
9.7
|
|
8.1
|
Adjusted EBITDA margin
|
|
|
26%
|
|
21%
|
Adjusting items from continuing
operations of £1.5m in the year (2022: £1.4m) are comprised as
follows:
Adjusting Item
|
Description
|
Exceptional costs
|
Exceptional costs of £0.3m relate
to strategic restructuring of the Group as it prepares for the next
phase of growth following MAP23. In 2022, exceptional costs of
£0.1m relate to the office lease termination fee less the gain on
remeasurement of the office lease.
|
Amortisation of acquired
intangible assets
|
Amortisation of acquired
intangible assets of £0.1m (2022: £0.5m) has fallen as certain
assets have become fully amortised.
|
Share-based payments
|
Share-based payments of £1.1m
increased in the year due to an additional year of LTIP issuance to
members of the Centaur Strategy Group (2022: £0.8m).
|
Segment profit
Segmental profit is reported to
improve clarity around performance and consists of the gross
contribution for the Xeim and The Lawyer Business Units less
specific overheads and allocations of the central support teams and
overheads that are directly related to each Business Unit. Any
costs not attributable to either Xeim or The Lawyer, remain as part
of Central costs.
The table below shows the
statutory revenue from continuing operations, which is the same as
the underlying revenue, for each Business Unit:
|
|
|
|
Re-presented1
|
|
Xeim
|
The
Lawyer
|
Total
|
Xeim
|
The
Lawyer
|
Total
|
|
2023
£m
|
2023
£m
|
2023
£m
|
2022
£m
|
2022
£m
|
2022
£m
|
Revenue
|
|
|
|
|
|
|
Premium Content
|
10.0
|
5.2
|
15.2
|
10.0
|
4.7
|
14.7
|
Training and
Advisory
|
14.8
|
-
|
14.8
|
14.4
|
-
|
14.4
|
Events
|
2.1
|
1.8
|
3.9
|
2.6
|
2.0
|
4.6
|
Marketing
Solutions
|
1.9
|
0.4
|
2.3
|
2.9
|
0.6
|
3.5
|
Recruitment
Advertising
|
0.1
|
1.0
|
1.1
|
0.2
|
1.0
|
1.2
|
Total statutory revenue
|
28.9
|
8.4
|
37.3
|
30.1
|
8.3
|
38.4
|
Revenue growth
|
(4)%
|
1%
|
(3)%
|
|
|
|
1
See note 1(a) for description of the prior year
re-presentation.
The table below reconciles the
adjusted operating profit/(loss) for each segment to the adjusted
EBITDA:
|
|
|
|
|
Re-presented1
|
|
Xeim
|
The Lawyer
|
Central
|
Total
|
Xeim
|
The
Lawyer
|
Central
|
Total
|
|
2023
£m
|
2023
£m
|
2023
£m
|
2023
£m
|
2022
£m
|
2022
£m
|
2022
£m
|
2022
£m
|
Revenue
|
28.9
|
8.4
|
-
|
37.3
|
30.1
|
8.3
|
-
|
38.4
|
Adjusted net operating
expenses
|
(21.4)
|
(5.4)
|
(2.9)
|
(29.7)
|
(24.3)
|
(5.9)
|
(3.3)
|
(33.5)
|
Adjusted operating
profit/(loss)
|
7.5
|
3.0
|
(2.9)
|
7.6
|
5.8
|
2.4
|
(3.3)
|
4.9
|
Adjusted operating margin
|
26%
|
36%
|
|
20%
|
19%
|
29%
|
|
13%
|
Depreciation and
amortisation
|
1.5
|
0.4
|
0.2
|
2.1
|
2.3
|
0.6
|
0.3
|
3.2
|
Adjusted EBITDA
|
9.0
|
3.4
|
(2.7)
|
9.7
|
8.1
|
3.0
|
(3.0)
|
8.1
|
Adjusted EBITDA margin
|
31%
|
40%
|
|
26%
|
27%
|
36%
|
|
21%
|
|
|
|
|
|
|
|
|
| |
1
See note 1(a) for description of the prior year
re-presentation.
Net finance costs
Net finance costs were £nil (2022:
£0.1m). The Group held positive cash balances throughout the year
and therefore, in both 2023 and 2022, finance costs mainly relate
to the commitment fee payable for the revolving credit facility and
interest on lease payments for right-of-use assets. In 2023 this
was offset by interest income of £0.3m (2022: £0.1m) on cash and
short-term deposits.
Taxation
A tax charge of £0.8m (2022
re-presented: £0.9m) has been recognised on continuing operations
for the year. The adjusted tax charge was £1.2m (2022 re-presented:
£1.2m). The Company's profits were taxed in the UK at a blended
rate of 23.5% (2022: 19.0%), but the resulting adjusted tax charge
is at an effective tax rate of 16% due mainly to a tax credit in
respect of prior years of £0.4m on tax losses for which the
deferred tax asset has now been recognised at a rate of 25%, being
the future rate of tax in the UK from April 2023. See note 7 for a
reconciliation between the statutory reported tax charge and the
adjusted tax charge.
Discontinued operations
In 2023, discontinued operations
relate to the closure of Really B2B and Design Week due to the
economic downturn and loss of key customers. The 2022 comparatives
include the re-presentation of Really B2B and Design Week into
discontinued operations within the reported statutory results for
the Group. See note 8 for further details.
|
Discontinued
|
Discontinued
|
Continuing
|
As
reported
|
|
2023
£m
|
2022
£m
|
2022
£m
|
2022
£m
|
Revenue
|
2.0
|
3.2
|
38.4
|
41.6
|
Adjusted net operating
expenses
|
(2.0)
|
(2.8)
|
(33.5)
|
(36.3)
|
Adjusted operating
profit
|
-
|
0.4
|
4.9
|
5.3
|
Adjusting items
|
(0.5)
|
(0.1)
|
(1.3)
|
(1.4)
|
Operating (loss)/profit
|
(0.5)
|
0.3
|
3.6
|
3.9
|
Net finance costs
|
-
|
-
|
(0.1)
|
(0.1)
|
(Loss)/profit before
tax
|
(0.5)
|
0.3
|
3.5
|
3.8
|
Taxation
|
-
|
(0.1)
|
(0.9)
|
(1.0)
|
(Loss)/profit after tax
|
(0.5)
|
0.2
|
2.6
|
2.8
|
Earnings per share
The Group has delivered adjusted
diluted earnings per share for the year of 4.2 pence (2022: 2.6
pence). Diluted earnings per share for the year were 3.2 pence
(2022: 1.8 pence). Full details of the earnings per share
calculations can be found in note 9 to the financial
information.
Dividends
Under the Group's dividend policy,
Centaur targets a pay-out ratio of 40% of adjusted retained
earnings, subject to a minimum dividend of 1.0 pence per share per
annum.
Therefore, the Group has proposed
a final dividend of 1.2 pence per ordinary share in respect of
2023. This brings the total ordinary dividends relating to 2023 to
1.8 pence (2022: 1.1 pence) per ordinary share, the second year in
a row that we will have paid above the 1.0 pence per share minimum
due to the increasing profitability of the Group.
The final ordinary dividend is
subject to shareholder approval at the Annual General Meeting and,
if approved, will be paid on 24 May 2024 to all ordinary
shareholders on the register at the close of business on 10 May
2024.
Cash flow
|
2023
£m
|
2022
£m
|
Adjusted operating profit
|
7.6
|
5.3
|
Depreciation and
amortisation
|
2.1
|
3.2
|
Movement in working
capital
|
(1.9)
|
(0.1)
|
Adjusted operating cash flow
|
7.8
|
8.4
|
Capital expenditure
|
(2.1)
|
(1.4)
|
Cash impact of adjusting
items
|
(0.5)
|
(0.2)
|
Taxation
|
(1.6)
|
-
|
Repayment of lease obligations and
net interest paid
|
(0.8)
|
(1.9)
|
Free cash flow
|
2.8
|
4.9
|
Purchase of own shares and
payments on share options exercised
|
(0.4)
|
(0.6)
|
Dividends paid to Company's
shareholders
|
(8.9)
|
(1.4)
|
(Decrease)/increase in net
cash1
|
(6.5)
|
2.9
|
Opening net
cash1
|
16.0
|
13.1
|
Closing net cash1
|
9.5
|
16.0
|
Cash conversion
|
80%
|
99%
|
1
Net cash is the total of cash and cash
equivalents and short-term deposits.
Adjusted operating cash flow is
not a measure defined by IFRS. Centaur defines adjusted operating
cash flow as cash flow from operations excluding the impact of
adjusting items. The Directors use this measure to assess the
performance of the Group as it excludes volatile items not related
to the core trading of the Group and includes the Group's
management of capital expenditure. A reconciliation between
cash flow from operations and adjusted operating cash flow is shown
in note 1(b) to the financial information.
The cash conversion of 80% (2022:
99%) has been adjusted to exclude these one-off items. The cash
conversion in 2023 decreased from historical levels as a result of
negative working capital movements for lower accrued costs, lower
deferred revenue balances and the timing of cash payments, although
the conversion rate is expected to return to normal historical
levels going forward. Over the MAP23 period, Centaur has generated
£14.2m of free cash flow with a cash conversion rate of
109%.
Financing and bank covenants
On 16 March 2021 the Group signed
a revolving credit facility with NatWest which allows the Group to
borrow up to £10m and has a three-year duration with the option of
two further one-year periods. On 5 December 2022, management
exercised the option to extend for the first further one-year
period. On 19 February 2024, management exercised the option to
extend for the second further one-year period until 31 March 2026.
The Group has not drawn down any borrowings under the
facility.
Balance sheet
|
2023
£m
|
2022
£m
|
Goodwill and other intangible
assets
|
44.7
|
43.8
|
Property, plant and
equipment
|
2.2
|
0.4
|
Deferred taxation
|
1.9
|
1.6
|
Deferred income
|
(8.4)
|
(8.9)
|
Other current assets and
liabilities
|
(4.0)
|
(4.1)
|
Non-current assets and
liabilities
|
(0.8)
|
-
|
Net assets before cash
|
35.6
|
32.8
|
Net cash1
|
9.5
|
16.0
|
Net assets
|
45.1
|
48.8
|
1
Net cash is the total of cash and cash
equivalents and short-term deposits.
Goodwill and other intangibles
have increased by £0.9m as a result of investment in capital
expenditure to support profitable revenue growth initiatives.
Property, plant and equipment has increase by £1.8m predominantly
due to the cessation of the previous property lease on 31 December
2022 meaning the right-of-use asset was disposed of, with the
right-of-use asset for the new lease being recognised on 1 January
2023.
Deferred income has decreased by
£0.5m mainly as a result of slower renewals and new business on
premium content subscriptions. Other current and non-current
liabilities have increased by £0.7m predominately due to the
recognition of the new lease liability on 1 January
2023.
Going concern
After due consideration, as
required under IAS 1 Presentation of Financial Statements, of the
Group's forecasts for at least twelve months from the date of this
report and the effectiveness of risk management processes, the
Directors have concluded that it is appropriate to continue to
adopt the going concern basis in the preparation of the
consolidated financial information for the year ended 31 December
2023.
As detailed under the Risk
Management section, the Directors have assessed the viability of
the Group over a three-year and nine-month period to December 2027
and the Directors have a reasonable expectation that the Company
will be able to continue in operation and meet its liabilities as
they fall due over that period.
Conclusion
Centaur has exceeded its adjusted
EBITDA margin objective set out under MAP23 for 2023, despite a
difficult trading environment for revenue growth. The culmination
of our three-year Margin Acceleration Plan strategy sees Centaur
with a solid platform for future growth, a very high proportion of
higher quality revenue, a controlled cost base, effective cash
management and efficient processes. The next stage of Centaur's
journey to become a customer-centric business intelligence and
learning organisation is about to get under way and we look forward
to providing more detail on this following the preliminary
results.
Alternative performance measures
Measure
|
Definition
|
Adjusted EBITDA
|
Adjusted operating profit before
depreciation and impairment of tangible assets and amortisation and
impairment of intangible assets other than those acquired through a
business combination.
|
Adjusted EBITDA margin
|
Adjusted EBITDA as a percentage of
revenue.
|
Adjusted EPS
|
EPS calculated using adjusted
profit for the period.
|
Adjusting items
|
Items as set out in the statement
of consolidated income and notes 1(b) and 4 of the financial
information including exceptional items, amortisation of acquired
intangible assets, profit/(loss) on disposal of assets, share-based
payment expense, volatile items predominantly relating to
investment activities and other separately reported
items.
|
Adjusted net operating
expenses
|
Net operating expenses excluding
adjusting items.
|
Adjusted operating
profit
|
Operating profit excluding
adjusting items.
|
Adjusted profit before
tax
|
Profit before tax excluding
adjusting items.
|
Adjusted retained
earnings
|
Profit for the year excluding
adjusting items.
|
Adjusted tax charge
|
Tax charge excluding the tax
charge on adjusted items.
|
Cash conversion
|
Adjusted operating cash flow
(excluding any one-off significant cash flows) / adjusted
EBITDA.
|
Exceptional items
|
Items where the nature of the
item, or its magnitude, is material and likely to be non-recurring
in nature as shown in note 4.
|
Free cash flow
|
Increase/decrease in cash for the
year before the impact of debt, acquisitions, disposals, dividends
and share repurchases.
|
Net cash
|
The total of cash and cash
equivalents and short-term deposits.
|
Segment profit
|
Adjusted operating profit of a
segment after allocation of centrally managed overheads that are
directly related to each segment or business unit.
|
Underlying revenue
|
Statutory revenue adjusted to
exclude the impact of revenue arising from acquired businesses,
disposed businesses that do not meet the definition of discontinued
operations per IFRS 5, and closed business lines ("excluded
revenue").
|
Risk Management
Risk management approach
The Board has overall
responsibility for the effectiveness of the Group's system of risk
management and internal controls, and these are regularly monitored
by the Audit Committee.
The Executive Committee, Company
Secretary and the Head of Legal are responsible for identifying,
managing and monitoring material and emerging risks in each area of
the business and for regularly reviewing and updating the risk
register, as well as reporting to the Audit Committee in relation
to risks, mitigations and controls. As the Group operates
principally from one office and with relatively flat management
reporting lines, members of the Executive Committee are closely
involved in day-to-day matters and are able to identify areas of
increasing risk quickly and respond accordingly.
The responsibility for each risk
identified is assigned to a member of the Executive Committee. The
Audit Committee considers risk management and controls regularly
and the Board formally considers risks to the Group's strategy and
plans as well as the risk management process as part of its
strategic review.
The risk register is the core
element of the Group's risk management process. The register is
maintained by the Company Secretary with input from the Executive
Committee and the Head of Legal. The Executive Committee initially
identifies the material risks and emerging risks facing the Group
and then collectively assesses the severity of each risk (by
ranking both the likelihood of its occurrence and its potential
impact on the business) and the related mitigating
controls.
As part of its risk management
processes, the Board considers both strategic and operational
risks, as well as its risk appetite in terms of the tolerance level
it is willing to accept in relation to each principal risk, which
is recorded in the Company's risk register. This approach
recognises that risk cannot always be eliminated at an acceptable
cost and that there are some risks which the Board will, after due
and careful consideration, choose to accept.
The Group's risk register, its
method of preparation and the operation of the key controls in the
Group's system of internal control are regularly reviewed and
overseen by the Audit Committee with reference to the Group's
strategic aims and its operating environment. The register is also
reviewed and considered by the Board.
As part of the ongoing enhancement
of the Group's risk monitoring activities, we reviewed and updated
the procedures by which we evaluate principal risks and
uncertainties during the year including the consideration of
climate-related risks as described in the ESG report.
Principal risks
The Group's risk register
currently includes operational and strategic risks. The principal
risks faced by the Group in 2023, taken from the register, together
with the potential effects and mitigating factors, are set out
below. The Directors confirm that they have undertaken a robust
assessment of the principal and emerging risks facing the Group.
Financial risks are shown in note 26 to the financial
information.
Rank
|
Risk
|
Description of risk and impact
|
Risk mitigation/control procedure
|
Movement in risk
|
1
|
Sensitivity to UK/sector economic
conditions.
|
The world economy has been
severely impacted by the Covid-19 pandemic, the conflict in Ukraine
and the resulting impact with inflation having peaked at over 10%
and UK interest rates over 5%. In addition, the UK economy
has not been growing. The Group continues to have sensitivity to
UK/sector volatility and economic conditions. The impact has been
acute on some of Centaur's target market segments and corporate
marketing budgets.
The likelihood of ongoing
volatility in 2024 is expected to be high despite lowering
inflation rates and there are varying views as to the timing and
extent of any recovery.
|
We will mitigate the risk relating
to our customers by adapting content to help them manage in the
economic environment, focus on adding value to our subscription and
eLearning products and improving user experience and customer
service to protect renewal rates and new business. We will
also continue to manage our cost base and utilise technology such
as AI and machine learning to improve our cost
effectiveness.
Centaur continues to increase
international organic growth to mitigate this risk. We are
also increasing our focus targeting larger scale multinational
businesses which have a more diversified risk profile.
Many of the Group's products are
market-leading in their respective sectors and are an integral part
of our customers' operational processes, which mitigates the risk
of reduced demand for our products.
The Group regularly reviews the
political and economic conditions and forecasts for UK, including
specific risks such as inflation, to assess whether changes to its
product offerings or pricing structures are necessary.
|
The Board considers this risk
to be broadly the same as for the prior year.
|
|
Rank
|
Risk
|
Description of risk and impact
|
Risk mitigation/control procedure
|
Movement in risk
|
2
|
Failure to achieve a high growth
performance culture.
The risk that Centaur is unable to
attract, develop and retain an appropriately skilled, diverse and
responsible workforce and leadership team, and maintain a healthy
culture which encourages and supports ethical high-performance
behaviours and decision-making.
Difficulties in recruiting and
retaining staff could lead to loss of key senior staff.
|
Having completed the MAP23
strategy, Centaur's continued success depends on growing the
business. In order to do this, it depends in large part on its
ability to recruit, motivate and retain high quality experienced
and qualified employees in the face of often intense competition
from other companies, especially in London.
Investment in training,
development and pay awards needs to be compelling but will be
challenging in the current economic and operating
climate.
Implementing a diverse and
inclusive working environment that allows for agile and remote
delivery is necessary to keep the workforce engaged. It is also
required for a flexible hybrid working model.
Staff churn (a challenge for many
companies in our sector) has been at lower levels during 2023, but
we are continuing to improve our policies and practices.
Developing the future business
strategy beyond MAP23 and changes required in skill set and culture
are challenging and costly.
|
In January 2024, we are launching
a refreshed approach to objective setting and managing performance.
Colleagues will agree a personal development plan and annual
objectives with their manager, linked to Centaur's overall 2024
objectives.
Colleagues will have regular check
ins with their manager to ensure they are on track to clarify
accountabilities, provide focus and build a high growth performance
culture.
There continues to be a
significant focus on employee communication including weekly
updates, all company town hall and Q&A meetings and staff
welfare calls.
Over the course of Q4 2023, the
CSG and DICE have worked together to develop Centaur's values.
These will be launched in January 2024. The values will be included
in the new performance management process and embedded in our
culture.
We regularly review measures aimed
at improving our ability to recruit, onboard and retain employees.
We continue to focus on bringing in higher quality employees to
replace leavers or in new roles to enhance our strategy
particularly in areas such as marketing, technology and data
analytics.
We track employee engagement
through weekly "check-ins" via our ENGAGE system to gauge colleague
sentiment and gain an understanding of key risks or
challenges.
DICE has helped to drive forward
initiatives relating to diversity and inclusion, through
communication and social functions. This is sponsored by the CEO
and a Non-Executive Director and chaired by the CPO.
The CEO has held employee
breakfasts with the objective of generating a continuous
performance improvement culture within the Group. This has
identified six continuous improvement projects which have delivered
process improvements in 2023. This will continue in
2024.
An annual review ensures staff
flight risks and training needs are identified with a focus on
reward and development areas. All London based staff continue to be
paid at or above the London Living Wage.
Our HR team hold exit interviews
for all leavers to identify and resolve areas of
concern.
|
The Board considers this risk to
be broadly the same as the prior year.
|
|
|
|
|
|
| |
Rank
|
Risk
|
Description of risk and impact
|
Risk mitigation/control procedure
|
Movement in risk
|
3
|
Fraudulent or accidental breach of
our IT network, major systems failure or ineffective operation of
IT and data management systems leads to loss, theft, or misuse of
financial assets, proprietary or sensitive information and / or
inoperative core products, services, or business
functions
|
Centaur relies on its IT network
to conduct its operations. The IT network is at risk of a serious
systems failure or breach of its security controls due to a
deliberate or fraudulent cyber-attack or unintentional event and
may include third parties gaining unauthorised access to Centaur's
IT network and systems.
This could result in
misappropriation of its financial assets, proprietary or sensitive
information (including personal data or confidential information),
corruption of data or operational disruption, such as
unavailability of our websites, our users' digital products and
support platforms with disruption to our revenue collection
activities.
Centaur could incur significant
costs and suffer negative consequences as a result of this, such as
remediation costs (including liability for stolen assets or
information, and repair of any damage caused to Centaur's IT
network infrastructure and systems) as well as reputational damage
and loss of investor confidence resulting from any operational
disruption.
A serious occurrence of a loss,
theft or misuse of personal data could also result in a breach of
data protection requirements and the effects of this. See Risk 4:
Regulatory compliance.
|
Appropriate IT security and
related controls are in place for all key processes to keep the IT
environment safe and monitor our network systems and
data.
Centaur has invested significantly
in its IT systems and, where services are outsourced to suppliers,
contingency planning is carried out to mitigate risk of supplier
failure.
Centaur continues to develop its
CRM, e-commerce and finance systems and has removed a number of
legacy systems in recent years reducing the Group's cyber risk. To
improve staff awareness, Centaur continues to train staff on cyber
security and phishing with regular testing and online
learning.
Centaur has a business continuity
plan which includes its IT systems and there is daily, overnight
back-up of data, stored off-site.
Websites are hosted by specialist
third-party providers who typically provide warranties relating to
security standards. All of our websites are hosted on a secure
platform which is cloud hosted and databases have been cleansed and
upgraded.
The Data Director ensures that
rigorous controls are in place to ensure that warehouse data can
only be downloaded by the data team. Integration of the warehouse
with current databases and data captured and stored elsewhere is
ongoing.
In an ever-increasing
sophisticated environment of Cyber incidents, Centaur has
significantly improved protection, creating a dedicated
cross-technology cyber workgroup to review processes, systems and
access. As a result, Centaur has strengthened access across all
critical systems and improved monitoring. In addition, Centaur has
been externally audited and certified ISO/IEC 27001:2013
"Information Security Management". Given the advanced nature and
complexity of Cyber incidents, security is kept under constant
review.
Please see risk 4: Regulatory
compliance for specific mitigations relating to the security of
personal data and GDPR compliance.
|
The Board considers this risk to
be broadly the same as the prior year.
|
Rank
|
Risk
|
Description of risk and impact
|
Risk mitigation/control procedure
|
Movement in risk
|
4
|
Regulatory compliance (GDPR, PECR
and other similar legislation) includes
strict requirements regarding how
Centaur handles personal data, including that of customers. There
is the risk of a fine from the ICO, third party claims, as well as
reputational damage if we do not comply.
|
Centaur has strict requirements in
respect of its handling of personal data under UK General Data
Protection Regulation ('GDPR'), the Data Protection Act 2018
('DPA'), the Privacy and Electronic Communications Regulations
('PECR') and related law and regulation
('Data Protection Law'). Centaur's obligations under
Data Protection Law are continuously evolving meaning this area
requires ongoing focus.
PECR includes specific obligations
for businesses like Centaur regarding how they conduct electronic
marketing calls, emails, texts and use cookies and similar
technologies, among other things.
In the event of a serious breach
of the GDPR and / or PECR, Centaur could be subject to a
significant fine from the regulator, the ICO and claims from third
parties, including customers, as well as reputational
damage.
The maximum fines for breaches are
£17.5 million (GDPR) and £500,000 (PECR) respectively and directors
can be liable for serious breaches of PECR's marketing
rules.
Other countries and jurisdictions
worldwide have their own laws relating to data and privacy. Where
Centaur is required to comply with the laws in non-UK jurisdictions
there is a risk that Centaur may not be compliant with all such
laws and could therefore be subject to regulatory action and fines
from the relevant regulators and data subjects.
ICO guidance relating to use of
cookies, and further changes to the laws relating to data privacy,
ad tech and electronic marketing expected in the future, will
further increase the regulatory burden for businesses like Centaur
and the requirements in this regard will need to be kept under
review.
|
Centaur has taken a wide range of
measures aimed at complying with the key aspects of GDPR, DPA and
PECR.
The Data Compliance Committee
(overseen by the CFO) monitors Centaur's ongoing compliance with
data protection laws.
Staff are required to undertake
online data protection awareness and data security awareness
training annually.
Centaur has appointed a DPO
(Wiggin LLP) to oversee its compliance with data protection laws.
Further, Centaur's in-house legal team keeps abreast of material
developments in data protection law and regulation and advice from
external law firms is sought where appropriate.
Given the increasingly global
nature of our business and our customers Centaur's approach to
complying with data protection laws in other jurisdictions is kept
under review.
|
The Board considers this risk to
be broadly the same as the prior year.
|
|
Viability Statement
In accordance with provision 31 of
the UK Corporate Governance Code 2018, the Directors have assessed
the viability of the Group over a three-year and nine-month period
from signing of this Annual Report to December 2027, taking account
of the Group's current position, the Group's strategy, the Board's
risk appetite and, as documented above, the principal risks facing
the Group and how these are managed. Based on the results of this
analysis, the Directors have a reasonable expectation that the
Group and the Company will be able to continue in operation and
meet its liabilities as they fall due over the period to December
2027.
The Board has determined that the
three-year and nine-month period to December 2027 is an appropriate
period over which to provide its viability statement because the
Board's financial planning horizon covers a four-year period. In
making their assessment, the Directors have taken account of the
Group's £10m three-year revolving credit facility (which allows
extensions to March 2026 on similar terms), cash flows, dividend
cover and other key financial ratios over the period.
The covenants of the facility
require a minimum interest cover ratio of 4 and net leverage not
exceeding 2.5 times. In the calculation of net leverage Adjusted
EBITDA excludes the impact of IFRS 16. The Group is not expected to
breach any of these covenants in any of the scenarios run for the
viability statement and is not forecasting that the facility will
be utilised during the viability period.
The base scenario uses a four-year
forecast to December 2027. The four-year forecast was built,
bottom-up from the budget for 2024 together with appropriate growth
factors for 2025 to 2027.
The metrics in the base case are
subject to stress testing which involves sensitising key
assumptions underlying the forecasts both individually and in
unison. The key sensitivity is on Adjusted EBITDA which is the
primary driver of performance in the viability assessment. This
sensitised scenario assumes that Adjusted EBITDA is lowered by 10%
in every period that the viability statement covers.
In both the base case and
sensitised scenarios, the Group would not be required to rely on
the revolving credit facility in order to fund its daily
operations. Sensitising the model for changes in the assumptions
and risks affirmed that the Group and the Company would remain
viable over the three-year and nine-month period to December
2027.
Going concern basis of accounting
In accordance with provision 30 of
the UK Corporate Governance Code 2018, the Directors' statement as
to whether they consider it appropriate to adopt the going concern
basis of accounting in preparing the financial information and
their identification of any material uncertainties, including the
principal risks outlined above, to the Group's ability to continue
to do so over a period of at least twelve months from the date of
approval of the financial information and for the foreseeable
future, being the period as discussed in the viability statement
above.
Statement of Directors' Responsibilities in respect of the
financial information
The Directors are responsible for
preparing the Annual Report and the financial information in
accordance with applicable law and regulation.
Company law requires the Directors
to prepare financial information for each financial year.
Therefore, the Directors have prepared the Group financial
information in accordance with UK-adopted International Accounting
Standards (IFRS) and Company financial information in accordance
with IFRS. Under company law the Directors must not approve the
financial information unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and Company
and of the profit or loss of the Group and Company for that period.
In preparing the financial information, the Directors are required
to:
·
|
select suitable accounting
policies and then apply them consistently;
|
·
|
state whether applicable IFRS have
been followed for the Group financial information and applicable
IFRS have been followed for the Company financial information,
subject to any material departures disclosed and explained in the
financial information;
|
·
|
make judgements and accounting
estimates that are reasonable and prudent; and
|
·
|
prepare the financial information
on the going concern basis unless it is inappropriate to presume
that the Group and Company will continue in business.
|
The Directors are also responsible
for safeguarding the assets of the Group and Company and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the Group and Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Group
and Company and enable them to ensure that the financial
information and the Directors' Remuneration Report comply with the
Companies Act 2006.
The Directors are responsible for
the maintenance and integrity of the Company's website. Legislation
in the United Kingdom governing the preparation and dissemination
of financial information may differ from legislation in other
jurisdictions.
Directors' confirmations
The Directors consider that the
annual report and accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Group and Company's position and
performance, business model and strategy.
Each of the Directors, whose names
and functions are listed in the Governance Report confirm that, to
the best of their knowledge:
·
|
the Company financial information,
which have been prepared in accordance with UK-adopted IASs, give a
true and fair view of the assets, liabilities, financial position
and result of the Company;
|
·
|
the Group financial information,
which have been prepared in accordance with UK-adopted IASs, give a
true and fair view of the assets, liabilities, financial position
and profit of the Group; and
|
·
|
the Directors' Report includes a
fair review of the development and performance of the business and
the position of the Group and Company, together with a description
of the principal risks and uncertainties that it faces.
|
In the case of each Director in
office at the date the Directors' Report is approved:
·
|
so far as the Director is aware,
there is no relevant audit information of which the Group and
Company's auditors are unaware; and
|
·
|
they have taken all the steps that
they ought to have taken as a Director in order to make themselves
aware of any relevant audit information and to establish that the
Group and Company's auditors are aware of that
information.
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
for the year ended 31 December
2023
|
Note
|
Adjusted
Results1
2023
£'000
|
Adjusting
Items1
2023
£'000
|
Statutory
Results
2023
£'000
|
Re-presented2
Adjusted
Results1
2022
£'000
|
Re-presented2
Adjusting
Items1
2022
£'000
|
Re-presented2
Statutory
Results
2022
£'000
|
Continuing operations
|
|
|
|
|
|
|
|
Revenue
|
2
|
37,329
|
-
|
37,329
|
38,384
|
-
|
38,384
|
Net operating expenses
|
3
|
(29,725)
|
(1,491)
|
(31,216)
|
(33,441)
|
(1,388)
|
(34,829)
|
Operating profit / (loss)
|
|
7,604
|
(1,491)
|
6,113
|
4,943
|
(1,388)
|
3,555
|
Finance income
|
6
|
266
|
-
|
266
|
85
|
-
|
85
|
Finance costs
|
6
|
(245)
|
-
|
(245)
|
(158)
|
-
|
(158)
|
Net finance income /
(costs)
|
|
21
|
-
|
21
|
(73)
|
-
|
(73)
|
Profit / (loss) before tax
|
|
7,625
|
(1,491)
|
6,134
|
4,870
|
(1,388)
|
3,482
|
Taxation
|
7
|
(1,217)
|
410
|
(807)
|
(1,194)
|
264
|
(930)
|
Profit / (loss) for the year from continuing
operations
|
|
6,408
|
(1,081)
|
5,327
|
3,676
|
(1,124)
|
2,552
|
Discontinued operations
|
|
|
|
|
|
|
|
(Loss) / profit for the year from
discontinued operations after tax
|
8
|
(63)
|
(414)
|
(477)
|
273
|
(25)
|
248
|
Profit / (loss) for the year attributable to owners of the
parent
|
|
6,345
|
(1,495)
|
4,850
|
3,949
|
(1,149)
|
2,800
|
Total comprehensive income / (loss) attributable to owners of
the parent
|
|
6,345
|
(1,495)
|
4,850
|
3,949
|
(1,149)
|
2,800
|
|
|
|
|
|
|
|
|
Earnings / (loss) per share attributable to owners of the
parent
|
9
|
|
|
|
|
|
|
Basic from continuing
operations
|
|
4.4p
|
(0.7p)
|
3.7p
|
2.6p
|
(0.8p)
|
1.8p
|
Basic from discontinued
operations
|
|
-
|
(0.3p)
|
(0.3p)
|
0.1p
|
-
|
0.1p
|
Basic
|
|
4.4p
|
(1.0p)
|
3.4p
|
2.7p
|
(0.8p)
|
1.9p
|
|
|
|
|
|
|
|
|
Fully diluted from continuing
operations
|
|
4.2p
|
(0.7p)
|
3.5p
|
2.5p
|
(0.8p)
|
1.7p
|
Fully diluted from discontinued
operations
|
|
-
|
(0.3p)
|
(0.3p)
|
0.1p
|
-
|
0.1p
|
Fully diluted
|
|
4.2p
|
(1.0p)
|
3.2p
|
2.6p
|
(0.8p)
|
1.8p
|
1 Adjusted results exclude adjusting items, as detailed in note
1(b).
2 See note 1(a) for description of the prior year
re-presentation.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December
2023
Attributable to owners of the Company
|
Note
|
Share
capital
£'000
|
Own
shares
£'000
|
Share
premium
£'000
|
Reserve
for shares
to be
issued
£'000
|
Deferred
shares
£'000
|
Foreign currency
reserve
£'000
|
Retained
earnings
£'000
|
Total
equity
£'000
|
At 1 January 2022
|
|
15,141
|
(5,471)
|
1,101
|
471
|
80
|
143
|
35,643
|
47,108
|
Profit for the year and total
comprehensive income
|
|
-
|
-
|
-
|
-
|
-
|
-
|
2,800
|
2,800
|
Currency translation
adjustment
|
|
-
|
-
|
-
|
-
|
-
|
1
|
-
|
1
|
Transactions with owners in their capacity as
owners:
|
|
|
|
|
|
|
|
|
|
Dividends
|
24
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,436)
|
(1,436)
|
Purchase of own shares
|
23
|
-
|
(604)
|
-
|
-
|
-
|
-
|
-
|
(604)
|
Exercise of share
awards
|
22,23
|
-
|
212
|
-
|
(54)
|
-
|
-
|
(158)
|
-
|
Lapsed share awards
|
23
|
-
|
-
|
-
|
(14)
|
-
|
-
|
14
|
-
|
Fair value of employee
services
|
23
|
-
|
-
|
-
|
724
|
-
|
-
|
-
|
724
|
Tax on share-based
payments
|
14
|
-
|
-
|
-
|
-
|
-
|
-
|
233
|
233
|
As at 31 December 2022
|
|
15,141
|
(5,863)
|
1,101
|
1,127
|
80
|
144
|
37,096
|
48,826
|
|
|
|
|
|
|
|
|
|
|
Profit for the year and total
comprehensive income
|
|
-
|
-
|
-
|
-
|
-
|
-
|
4,850
|
4,850
|
Currency translation
adjustment
|
|
-
|
-
|
-
|
-
|
-
|
(17)
|
-
|
(17)
|
Transactions with owners in their capacity as
owners:
|
|
|
|
|
|
|
|
|
|
Dividends
|
24
|
-
|
-
|
-
|
-
|
-
|
-
|
(8,916)
|
(8,916)
|
Purchase of own shares
|
23
|
-
|
(322)
|
-
|
-
|
-
|
-
|
-
|
(322)
|
Exercise of share
awards
|
22,23
|
-
|
1,276
|
-
|
(396)
|
-
|
-
|
(880)
|
-
|
Fair value of employee
services
|
23
|
-
|
-
|
-
|
939
|
-
|
-
|
-
|
939
|
Tax on share-based
payments
|
14
|
-
|
-
|
-
|
-
|
-
|
-
|
(292)
|
(292)
|
As at 31 December 2023
|
|
15,141
|
(4,909)
|
1,101
|
1,670
|
80
|
127
|
31,858
|
45,068
|
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December
2023
Attributable to owners of the Company
|
Note
|
Share
capital
£'000
|
Own
shares
£'000
|
Share
premium
£'000
|
Reserve
for shares
to be
issued
£'000
|
Deferred
shares
£'000
|
Retained
earnings
£'000
|
Total
equity
£'000
|
At 1 January 2022
|
|
15,141
|
(4,135)
|
1,101
|
471
|
80
|
24,149
|
36,807
|
Loss for the year and total
comprehensive loss
|
|
-
|
-
|
-
|
-
|
-
|
(4,619)
|
(4,619)
|
Transactions with owners in their capacity
as owners:
|
|
|
|
|
|
|
|
|
Dividends
|
24
|
-
|
-
|
-
|
-
|
-
|
(1,436)
|
(1,436)
|
Exercise of share
awards
|
23
|
-
|
-
|
-
|
(54)
|
-
|
(27)
|
(81)
|
Lapsed share awards
|
23
|
-
|
-
|
-
|
(14)
|
-
|
14
|
-
|
Fair value of employee
services
|
23
|
-
|
-
|
-
|
724
|
-
|
-
|
724
|
Tax on share-based
payments
|
14
|
-
|
-
|
-
|
-
|
-
|
101
|
101
|
As at 31 December 2022
|
|
15,141
|
(4,135)
|
1,101
|
1,127
|
80
|
18,182
|
31,496
|
|
|
|
|
|
|
|
|
|
Loss for the year and total
comprehensive loss
|
|
-
|
-
|
-
|
-
|
-
|
(4,521)
|
(4,521)
|
Transactions with owners in their capacity as
owners:
|
|
|
|
|
|
|
|
|
Dividends
|
24
|
-
|
-
|
-
|
-
|
-
|
(8,916)
|
(8,916)
|
Exercise of share
awards
|
23
|
-
|
-
|
-
|
(396)
|
-
|
(312)
|
(708)
|
Fair value of employee
services
|
23
|
-
|
-
|
-
|
939
|
-
|
-
|
939
|
Tax on share-based
payments
|
14
|
-
|
-
|
-
|
-
|
-
|
(159)
|
(159)
|
As at 31 December 2023
|
|
15,141
|
(4,135)
|
1,101
|
1,670
|
80
|
4,274
|
18,131
|
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
as at 31 December 2023
Registered number 04948078
|
Note
|
31
December
2023
£'000
|
31
December
2022
£'000
|
Non-current assets
|
|
|
|
Goodwill
|
10
|
41,162
|
41,162
|
Other intangible assets
|
11
|
3,522
|
2,611
|
Property, plant and
equipment
|
12
|
2,226
|
387
|
Deferred tax assets
|
14
|
2,177
|
1,673
|
Other receivables
|
15
|
166
|
27
|
|
|
49,253
|
45,860
|
Current assets
|
|
|
|
Trade and other
receivables
|
15
|
5,089
|
5,357
|
Cash and cash
equivalents
|
16
|
1,996
|
7,501
|
Short-term deposits
|
17
|
7,500
|
8,500
|
Current tax assets
|
21
|
379
|
165
|
|
|
14,964
|
21,523
|
Total assets
|
|
64,217
|
67,383
|
Current liabilities
|
|
|
|
Trade and other
payables
|
18
|
(8,589)
|
(9,652)
|
Lease liabilities
|
19
|
(952)
|
-
|
Deferred income
|
20
|
(8,352)
|
(8,885)
|
|
|
(17,893)
|
(18,537)
|
Net current (liabilities) / assets
|
|
(2,929)
|
2,986
|
Non-current liabilities
|
|
|
|
Lease liabilities
|
19
|
(1,025)
|
-
|
Deferred tax
liabilities
|
14
|
(231)
|
(20)
|
|
|
(1,256)
|
(20)
|
Net assets
|
|
45,068
|
48,826
|
|
|
|
|
Capital and reserves attributable to owners of the
Company
|
|
|
|
Share capital
|
22
|
15,141
|
15,141
|
Own shares
|
|
(4,909)
|
(5,863)
|
Share premium
|
|
1,101
|
1,101
|
Other reserves
|
|
1,750
|
1,207
|
Foreign currency
reserve
|
|
127
|
144
|
Retained earnings
|
|
31,858
|
37,096
|
Total equity
|
|
45,068
|
48,826
|
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
Registered number 04948078
|
Note
|
31
December
2023
£'000
|
31
December
2022
£'000
|
Non-current assets
|
|
|
|
Investments
|
13
|
66,081
|
65,529
|
Deferred tax assets
|
14
|
1,082
|
375
|
Other receivables
|
15
|
879
|
1,225
|
|
|
68,042
|
67,129
|
Current assets
|
|
|
|
Trade and other
receivables
|
15
|
136
|
136
|
|
|
136
|
136
|
Total assets
|
|
68,178
|
67,265
|
Current liabilities
|
|
|
|
Trade and other
payables
|
18
|
(50,047)
|
(35,769)
|
|
|
(50,047)
|
(35,769)
|
Net current liabilities
|
|
(49,911)
|
(35,633)
|
|
|
|
|
Net assets
|
|
18,131
|
31,496
|
|
|
|
|
Capital and reserves attributable to owners of the
Company
|
|
|
|
Share capital
|
22
|
15,141
|
15,141
|
Own shares
|
|
(4,135)
|
(4,135)
|
Share premium
|
|
1,101
|
1,101
|
Other reserves
|
|
1,750
|
1,207
|
Retained earnings
|
|
4,274
|
18,182
|
Total equity
|
|
18,131
|
31,496
|
The Company has taken advantage of
the exemption available under section 408 of the Companies Act 2006
and has not presented its own statement of comprehensive income in
this financial information. The Company's loss for the year was
£4,521,000 (2022: loss of £4,619,000).
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December
2023
|
Note
|
2023
£'000
|
2022
£'000
|
Cash flows from operating activities
|
|
|
|
Cash generated from
operations
|
25
|
7,303
|
8,402
|
Tax paid
|
7
|
(1,589)
|
(30)
|
Interest paid
|
6
|
(50)
|
-
|
Net refund of lease
deposit
|
19
|
116
|
-
|
Net cash generated from operating
activities
|
|
5,780
|
8,372
|
Cash flows from investing activities
|
|
|
|
Purchase of property, plant and
equipment
|
12
|
(111)
|
(284)
|
Purchase of intangible
assets
|
11
|
(1,944)
|
(1,073)
|
Interest received
|
6
|
220
|
63
|
Investment in short-term
deposits
|
17
|
1,000
|
(8,500)
|
Net cash flows used in investing activities
|
|
(835)
|
(9,794)
|
Cash flows from financing activities
|
|
|
|
Finance costs paid
|
6
|
(73)
|
(71)
|
Repayment of obligations under
lease
|
19
|
(973)
|
(1,921)
|
Termination of lease
|
19
|
-
|
(243)
|
Purchase of own shares
|
22
|
(322)
|
(604)
|
Share options exercised
|
23
|
(97)
|
-
|
Dividends paid to Company's
shareholders
|
24
|
(8,916)
|
(1,436)
|
Extension fee on revolving credit
facility
|
25
|
(20)
|
-
|
Net cash flows used in financing activities
|
|
(10,401)
|
(4,275)
|
Net decrease in cash and cash equivalents
|
|
(5,456)
|
(5,697)
|
Cash and cash equivalents at
beginning of the year
|
|
7,501
|
13,065
|
Effects of foreign currency
exchange rate changes
|
|
(49)
|
133
|
Cash and cash equivalents at end of the
year
|
16
|
1,996
|
7,501
|
COMPANY CASH FLOW STATEMENT
for the year ended 31 December
2023
|
Note
|
2023
£'000
|
2022
£'000
|
Cash flows from operating activities
|
|
|
|
Cash generated from operating
activities
|
25
|
9,085
|
1,507
|
Cash flows from financing activities
|
|
|
|
Finance costs paid
|
6
|
(73)
|
(71)
|
Share options exercised
|
23
|
(76)
|
-
|
Dividends paid to Company's
shareholders
|
24
|
(8,916)
|
(1,436)
|
Extension fee on revolving credit
facility
|
25
|
(20)
|
-
|
Net cash flows used in financing
activities
|
|
(9,085)
|
(1,507)
|
Net increase in cash and cash equivalents
|
|
-
|
-
|
Cash and cash equivalents at
beginning of the year
|
|
-
|
-
|
Cash and cash equivalents at end of the
year
|
16
|
-
|
-
|
NOTES TO THE FINANCIAL INFORMATION
1
Summary of material accounting policies
The principal accounting policies
adopted in the preparation of these consolidated and Company
financial information are set out below. These policies have been
consistently applied to all of the periods presented, unless
otherwise stated. The financial information is for the Group
consisting of Centaur Media Plc and its subsidiaries, and the
Company, Centaur Media Plc. Centaur Media Plc is a public company
limited by shares and incorporated in England and Wales.
(a) Basis of preparation
The financial information in this
preliminary announcement has been extracted from the audited Group
Financial Statements for the year ended 31 December 2023 and does
not constitute statutory accounts within the meaning of section 434
of the Companies Act 2006. The Group Financial Statements for 2022
were delivered to the registrar of companies, and those for 2023
will be delivered in due course. The auditor's report on the Group
Financial Statements for 2022 and 2023 were both unqualified and
unmodified. The auditors' report was signed on 12 March 2024. The
Group Financial Statements and this preliminary announcement were
approved by the Board of Directors on 12 March 2024.
The consolidated and Company
financial information has been prepared in accordance with
UK-adopted International Accounting Standards (IFRS) and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The financial information has been
prepared on a historical cost basis except where stated otherwise
within the accounting policies.
In preparing the consolidated and
Company financial information management has considered the impact
of climate change, taking into account the relevant disclosures in
the Strategic Report, including those made in accordance with the
recommendations of the Taskforce on Climate-related Financial
Disclosures. This included an assessment of assets with indefinite
and long lives as well as impairment assessments of CGUs (including
forecasted cash flows), and how they could be impacted by measures
taken to address global warming. Recognising that the environmental
impact of the Group's operations, and the use of the Group's
services, is relatively low, no issues were identified that would
impact the carrying values of such assets or have any other impact
on the financial information.
Going concern
The financial information has been
prepared on a going concern basis. The Directors have carefully
assessed the Group's ability to continue trading and have a
reasonable expectation that the Group and Company have adequate
resources to continue in operational existence for at least twelve
months from the date of approval of this financial information and
for the foreseeable future, being the period in the viability
statement.
At 31 December 2023, the Group had
cash and cash equivalents of £1,996,000
(2022: £7,501,000) and
short-term deposits of £7,500,000 (2022: £8,500,000). Since March
2021, the Group has had a multi-currency revolving credit facility
with NatWest. The facility consists of a committed £10m facility
and an additional uncommitted £15m accordion option, both of which
can be used to cover the Group's working capital and general
corporate needs. In February 2024, the Group took the option to
extend the facility for one year and the facility now runs to 31
March 2026. £nil of this was drawn down at 31 December
2023.
The Group has net current
liabilities at 31 December 2023 amounting to £2,929,000 (2022: net current assets £2,986,000). The net
current liability position primarily arose from its normal high
levels of deferred income relating to performance obligations to be
delivered in the future rather than an inability to service its
liabilities. In the prior year, there were the normal high levels
of deferred income, however the higher levels of net cash in 2022
of £16,001,000 (note 1(b)) and the termination of a property lease
resulting in nil lease liabilities at the balance sheet date
resulted in achieving a net current asset position. A lease
agreement for new office space was signed during the prior year,
with a commencement date of 1 January 2023, and has been recognised
in lease liabilities as at 31 December 2023. An assessment of cash
flows for the next four financial years, which has taken into
account the factors described above, has indicated an expected
level of cash generation which would be sufficient to allow the
Group to fully satisfy its working capital requirements and the
guarantee given in respect of its UK subsidiaries, to cover all
principal areas of expenditure, including maintenance, capital
expenditure and taxation during this year, and to meet the
financial covenants under the revolving credit facility. The
Company has net current liabilities at 31 December 2023 amounting
to £49,911,000 (2022: £35,633,000). In both the current and prior
year, these almost entirely arose from unsecured payables to
subsidiaries which have no fixed date of repayment.
The preparation of financial
information in accordance with IFRS requires the use of estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial information and the
reported amounts of revenue and expenses during the year. Although
these estimates are based on management's best knowledge of the
amount, events or actions, the actual results may ultimately differ
from those estimates.
Having assessed the principal
risks and the other matters discussed in connection with the
Viability Statement which considers the Group and Company's
viability over a three-year period to March 2027, the Directors
consider it appropriate to adopt the going concern basis of
accounting in preparing both the consolidated financial information
of the Group and the financial information of the
Company.
New and amended standards adopted by the
Group
The Group has applied the
following standards and amendments for the first time for its
annual reporting period commencing 1 January 2023:
·
|
Disclosure of Accounting Policies
- amendments to IAS 1 and IFRS Practice Statement 2;
|
·
|
Definition of Accounting Estimates
- amendments to IAS 8; and
|
·
|
Deferred Tax related to Assets and
Liabilities arising from a Single Transaction - amendments to IAS
12.
|
The amendments listed above did
not have any impact on the amounts recognised in prior periods and
are not expected to significantly affect the current or future
period.
New standards and interpretations not yet
adopted
Certain amendments to accounting
standards have been published that are not mandatory for 31
December 2023 reporting periods and have not been early adopted by
the group. These amendments are not expected to have a material
impact on the entity in the current or future reporting periods and
on foreseeable future transactions.
Prior year re-presentation
Discontinued
operations
Where the requirements of IFRS 5
have been met, the operational results of closed brands have been
presented in discontinued operations in the current period and
re-presented as discontinued in the comparative period. See note 8
for more details.
(b) Presentation of non-statutory measures
In addition to IFRS statutory
measures, the Directors use various non-GAAP key financial measures
to evaluate the Group's performance and consider that presentation
of these measures provides shareholders with an additional
understanding of the core trading performance of the Group. The
measures used are explained and reconciled to their IFRS statutory
headings below.
Adjusted operating profit and adjusted earnings per
share
The Directors believe that
adjusted results and adjusted earnings per share, split between
continuing and discontinued operations, provide additional useful
information on the core operational performance of the Group to
shareholders, and review the results of the Group on an adjusted
basis internally. The term 'adjusted' is not a defined term under
IFRS and may not therefore be comparable with similarly titled
profit measurements reported by other companies. It is not intended
to be a substitute for, or superior to, IFRS measurements of
profit.
Adjustments are made in respect
of:
·
|
Exceptional costs - the Group
considers items of income and expense as exceptional and excludes
them from the adjusted results where the nature of the item, or its
magnitude, is material and likely to be non-recurring in nature so
as to assist the user of the financial information to better
understand the results of the core operations of the Group. Details
of exceptional items are shown in note 4.
|
·
|
Amortisation of acquired
intangible assets - the amortisation charge for those intangible
assets recognised on business combinations is excluded from the
adjusted results of the Group since they are non-cash charges
arising from investment activities. As such, they are not
considered reflective of the core trading performance of the Group.
Details of amortisation of acquired intangible assets are shown in
note 11.
|
·
|
Share-based payments - share-based
payment expenses or credits are excluded from the adjusted results
of the Group as the Directors believe that the volatility of these
charges can distort the user's view of the core trading performance
of the Group. Details of share-based payments are shown in note
23.
|
·
|
Profit or loss on disposal of
assets or subsidiaries - profit or loss on disposals of businesses
are excluded from adjusted results of the Group as they are
unrelated to core trading and can distort a user's understanding of
the performance of the Group due to their infrequent and volatile
nature. See note 4.
|
·
|
Other separately reported items -
certain other items are excluded from adjusted results where they
are considered large or unusual enough to distort the comparability
of core trading results year-on-year. Details of these separately
disclosed items are shown in note 4.
|
The tax related to adjusting items
is the tax effect of the items above that are allowable deductions
for tax purposes, calculated using the standard rate of corporation
tax. See note 7 for a reconciliation between reported and adjusted
tax charges.
Further details of adjusting items
are included in note 4. A reconciliation between adjusted and
statutory earnings per share measures is shown in note
9.
Profit before tax reconciles to
adjusted operating profit as follows:
|
|
Note
|
2023
£'000
|
Re-presented2
2022
£'000
|
Profit before tax
|
|
|
6,134
|
3,482
|
Adjusting items
|
|
|
|
|
Exceptional operating
costs
|
|
4
|
349
|
-
|
Amortisation of acquired
intangible assets
|
|
11
|
47
|
490
|
Gain on remeasurement of
lease
|
|
19
|
-
|
(151)
|
Lease termination
fee
|
|
12,19
|
-
|
243
|
Share-based payment
expense
|
|
23
|
1,095
|
806
|
Adjusted profit before tax
|
|
|
7,625
|
4,870
|
Finance income
|
|
6
|
(266)
|
(85)
|
Finance costs
|
|
6
|
245
|
158
|
Adjusted operating profit
|
|
|
7,604
|
4,943
|
2 See note 1(a) for description of the prior year
re-presentation.
Adjusted operating cash flow
Adjusted operating cash flow is
not a measure defined by IFRS. It is defined as cash flow from
operations excluding the impact of adjusting items, which are
defined above, and including capital expenditure. The Directors use
this measure to assess the performance of the Group as it excludes
volatile items not related to the core trading of the Group and
includes the Group's management of capital expenditure. Statutory
cash flow from operations reconciles to adjusted operating cash as
below:
|
|
Note
|
2023
£'000
|
2022
£'000
|
Reported cash flow from operating
activities
|
|
25
|
7,303
|
8,402
|
Cash outflow of adjusting items
from operations
|
|
|
472
|
-
|
Adjusted operating cash flow
|
|
|
7,775
|
8,402
|
Capital expenditure
|
|
|
(2,055)
|
(1,357)
|
Post capital expenditure cash flow
|
|
|
5,720
|
7,045
|
Our cash conversion rate for the
year was 80% (2022: 99%).
Underlying revenue growth
The Directors review underlying
revenue growth in order to allow a like-for-like comparison of
revenue between years. Underlying revenue therefore excludes the
impact of revenue contribution arising from acquired or disposed
businesses and other revenue streams that are not expected to be
ongoing in future years. There were no exclusions for underlying
revenue in the current or prior year. Statutory revenue growth is
equal to underlying revenue growth and is as follows:
|
Xeim
£'000
|
The Lawyer
£'000
|
Total
£'000
|
Reported and underlying revenue
2022 (re-presented2)
|
30,083
|
8,301
|
38,384
|
Reported and underlying revenue 2023
|
28,968
|
8,361
|
37,329
|
Reported and underlying revenue growth
|
(4)%
|
1%
|
(3)%
|
2 See note 1(a) for description of the prior year
re-presentation.
Adjusted EBITDA
Adjusted EBITDA is not a measure
defined by IFRS. It is defined as adjusted operating profit before
depreciation and impairment of tangible assets and amortisation and
impairment of intangible assets other than those acquired through a
business combination. It is used by the Directors as a measure to
review performance of the Group and forms the basis of some of the
Group's financial covenants under its revolving credit facility.
Adjusted EBITDA is calculated as follows:
|
|
Note
|
2023
£'000
|
Re-presented2
2022
£'000
|
Adjusted operating profit (as above)
|
|
|
7,604
|
4,943
|
Depreciation of property, plant
and equipment
|
|
3,12
|
1,133
|
2,028
|
Amortisation of computer
software
|
|
3,11
|
930
|
1,136
|
Adjusted EBITDA
|
|
|
9,667
|
8,107
|
2 See note 1(a) for description of the prior year
re-presentation.
Net cash
Net cash is not a measure defined
by IFRS. Net cash is calculated as cash and cash equivalents, plus
short-term deposits less overdrafts and bank borrowings under the
Group's financing arrangements. The Directors consider the measure
useful as it gives greater clarity over the Group's liquidity as a
whole. Group net cash is calculated as follows:
|
|
Note
|
2023
£'000
|
2022
£'000
|
Cash and cash
equivalents
|
|
16
|
1,996
|
7,501
|
Short-term deposits
|
|
17
|
7,500
|
8,500
|
Net cash
|
|
|
9,496
|
16,001
|
(c) Principles of consolidation
The consolidated financial
information incorporates the financial information of Centaur Media
Plc and all of its subsidiaries after elimination of intercompany
transactions and balances. The consolidated financial information
is presented in Pounds Sterling, which is the Group and Company's
functional and presentation currency.
(i)
Subsidiaries
Subsidiaries are all entities
controlled by the Group. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group until the date that the Group ceases to
control them.
(ii) Employee Benefit
Trust
The Centaur Employees' Benefit
Trust ('Employee Benefit Trust') is a trust established by Trust
deed in 2006 for the granting of shares to applicable employees.
Its assets and liabilities are held separately from the Company and
are fully consolidated in the consolidated statement of financial
position. Holdings of Centaur Media Plc shares by the Employee
Benefit Trust are shown within the 'own shares' reserve as a
deduction from consolidated equity.
(d) Revenue recognition
Revenue is measured at the
transaction price, which is the amount of consideration to which
the Group expects to be entitled in exchange for transferring
promised goods or services to the customer. Judgement may arise in
timing and allocation of transaction price when there are multiple
performance obligations in one contract. However, an annual impact
assessment is performed which has confirmed that the impact is
immaterial in both the current year and comparative year. Revenue
arises from the sales of premium content, training and advisory,
events, marketing solutions and recruitment advertising in the
normal course of business, net of discounts and relevant sales tax.
Goods and services exchanged as part of a barter transaction are
recognised in revenue at the fair value of the goods and services
provided. Returns, refunds and other similar allowances, which have
historically been low in volume and immaterial in magnitude, are
accounted for as a reduction in revenue as they arise.
Where revenue is deferred it is
held as a balance in deferred income on the consolidated statement
of financial position. At any given reporting date, this deferred
income is current in nature and is expected to be recognised wholly
in revenue in the following financial year, with the exception of
returns and credit notes, which have historically been low in
volume and immaterial in magnitude.
The Group recognises revenue
earned from contracts as individual performance obligations are
met, on a stand-alone selling price basis. This is when value and
control of the product or service has transferred, being when the
product is delivered to the customer or the period in which the
services are rendered as set out in more detail below.
Premium
Content
Revenue from subscriptions is
deferred and recognised on a straight-line basis over the
subscription period, reflecting the continuous provision of paid
content services over this time. Revenue from individual
publication sales is recognised at the point at which the
publication is delivered to the customer. In general, the Group
bills customers for premium content at the start of the
contract.
Training and
Advisory
Revenue from training and advisory
is deferred and recognised over the period of the training or when
a separately identifiable milestone of a contract has been
delivered to the customer. In general, the Group bills customers
for training and advisory up front or on a milestone basis as the
service is delivered.
Events
Consideration received in advance
for events is deferred and revenue is recognised at the point in
time at which the event takes place. In general, the Group bills
customers for events before the event date.
Marketing
Solutions
Marketing solutions revenue from
display and bespoke campaigns is recognised over the period that
the service is provided. In general, the Group bills customers for
marketing solutions on delivery.
Recruitment
Advertising
Sales of online recruitment
advertising space are recognised in revenue over the period during
which the advertisements are placed. Sales of recruitment
advertising space in publications are recognised at the point at
which the publication occurs. In general, the Group bills customers
for recruitment advertising on delivery.
(e) Investments
In the Company's financial
information, investments in subsidiaries are stated at cost less
provision for impairment in value.
Investments are reviewed for
impairment whenever events indicate that the carrying value may not
be recoverable. An impairment loss is recognised to the extent that
the carrying value exceeds the higher of the investments fair value
less cost of disposal and its value-in-use. An asset's value-in-use
is calculated by discounting an estimate of future cash flows by
the pre-tax weighted average cost of capital. Any impairment is
recognised in the statement of comprehensive income. If there has
been a change in the estimates used to determine the investment's
recoverable amount, impairment losses that have been recognised in
prior periods may be reversed. This reversal is recognised in the
statement of comprehensive income.
(f) Income tax
The tax expense represents the sum
of current and deferred tax.
Current tax is based on the
taxable profit for the year. Taxable profit differs from profit as
reported in the consolidated statement of comprehensive income
because it excludes items of income or expense that are taxable or
deductible in other years, and it further includes items that are
never taxable or deductible. The Group and Company's liability for
current tax is calculated using tax rates that have been enacted or
substantively enacted by the reporting date.
Deferred tax is provided in full,
using the liability method, on temporary differences between the
carrying amounts of assets and liabilities in the consolidated
financial information and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available to utilise those
temporary differences and losses. Such assets and liabilities are
not recognised if the temporary difference arises from goodwill or
the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither
the tax profit nor the accounting profit.
Deferred tax is calculated at the
enacted or substantively enacted tax rates that are expected to
apply in the year when the liability is settled, or the asset is
realised. Deferred tax is charged or credited to the consolidated
statement of comprehensive income, except when it relates to items
charged or credited directly to equity or other comprehensive
income, in which case the deferred tax is recognised in equity or
other comprehensive income respectively.
The carrying amount of deferred
tax assets is reviewed at each reporting date and is reduced to the
extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be
recovered.
(g) Leases
Lessee
accounting
Under IFRS 16, leases are
accounted for on a 'right-of-use model' reflecting that, at the
commencement date, the Group as a lessee has a financial obligation
to make lease payments to the lessor for its right to use the
underlying asset during the lease term. The financial obligation is
recognised as a lease liability, and the right to use the
underlying asset is recognised as a right-of-use ('ROU') asset. The
ROU assets are recognised within property, plant and equipment on
the face of the consolidated statement of financial position and
are presented separately in note 12.
The lease liability is initially
measured at the present value of the lease payments using the rate
implicit in the lease or, where that cannot be readily determined,
the incremental borrowing rate ('IBR'). The incremental borrowing
rate is estimated to discount future lease payments to measure the
present value of the lease liability at the lease commencement
date. Such a rate is based on what the Group estimates the lessee
would have to pay a third party to borrow the funds necessary to
obtain an asset of a similar value to the right-of-use asset, with
similar terms, security and economic environment. Subsequently, the
lease liability is measured at amortised cost, with interest
increasing the carrying amount and lease payments reducing the
carrying amount. The carrying amount is remeasured to reflect any
reassessment or lease modifications, or to reflect revised
in-substance fixed lease payments.
The ROU asset is initially
measured at cost which comprises:
·
|
the amount of the initial
measurement of the lease liability;
|
·
|
any lease payments made at or
before the commencement date, less any lease incentives
received;
|
·
|
any initial direct costs;
and
|
·
|
an estimate of costs to be
incurred at the end of the lease term.
|
Subsequently, the ROU asset is
measured at cost less accumulated depreciation and impairment
losses. Depreciation is calculated to write off the cost on a
straight-line basis over the lease term.
Using the exemption available
under IFRS 16, the Group elects not to apply the requirements above
to:
·
|
Short-term leases; and
|
·
|
Leases for which the underlying
asset is of a low value.
|
In these cases, the Group
recognises the lease payments as an expense on a straight-line
basis over the lease term, or another systematic basis if that
basis is more representative of the agreement.
(h) Impairment of assets
Assets that are subject to
depreciation or amortisation are reviewed for impairment whenever
events indicate that the carrying value may not be recoverable. An
impairment loss is recognised to the extent that the carrying value
exceeds the higher of the asset's fair value less cost of disposal
and its value-in-use. An asset's value-in-use is calculated by
discounting an estimate of future cash flows by the pre-tax
weighted average cost of capital.
(i) Intangible assets
(i) Brands and publishing
rights and customer relationships
Separately acquired brands and
publishing rights are shown at historical cost. Brands and
publishing rights and customer relationships acquired in a business
combination are recognised at fair value at the acquisition date.
They have a finite useful life and are subsequently carried at cost
less accumulated amortisation and impairment losses.
(ii)
Software
Computer software that is not
integral to the operation of the related hardware is carried at
cost less accumulated amortisation. Costs associated with the
development of identifiable and unique software products controlled
by the Group that will generate probable future economic benefits
in excess of costs are recognised as intangible assets when the
criteria of IAS 38 'Intangible Assets' are met. They are carried at
cost less accumulated amortisation and impairment
losses.
(iv) Amortisation methods
and periods
Amortisation is calculated to
write off the cost or fair value of intangible assets on a
straight-line basis over the expected useful economic lives to the
Group over the following periods:
Computer software
|
- 3 to 5 years
|
Brands and publishing
rights
|
- 5 to 20 years
|
Customer relationships
|
- 3 to 10 years or over the term
of any specified contract
|
Goodwill has an indefinite life
and is tested for impairment annually at a Group level or whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable.
(j) Property, plant and equipment
See note 1(g) for right-of-use
assets. All other property, plant and equipment is stated at
historical cost less accumulated depreciation and impairment
losses. The historical cost of property, plant and equipment is the
purchase cost together with any incidental direct costs of
acquisition. Depreciation is calculated to write off the cost, less
estimated residual value, of assets, on a straight-line basis over
the expected useful economic lives to the Group over the following
periods:
Fixtures and fittings
|
- 5 to 10 years
|
Computer equipment
|
- 3 to 5 years
|
Right-of-use assets
|
- over the lease term
|
The estimated useful lives,
residual values and depreciation methods are reviewed at the end of
each reporting year, with the effect of any changes in estimate
accounted for on a prospective basis.
(k) Employee benefits
(i) Share-based
payments
The Group operates several
equity-settled share-based payment plans, under which the Group
receives services from employees in consideration for equity
instruments (share options and shares) of the Company. Information
relating to these plans is set out in note 23.
Equity-settled share-based
payments are measured at fair value at the date of grant. Fair
value is measured using either a Monte Carlo simulation
(stochastic) model or Black-Scholes option pricing model. The fair
value of the employee services received in exchange for the grant
of share awards and options is recognised as an expense on a
straight-line basis over the vesting period, based on the Group's
estimate of the number of options or shares that will eventually
vest. Non-market-based performance or service vesting conditions
(for example profitability and remaining as an employee of the
entity over a specified time period) are included in assumptions
about the number of share awards and options that are expected to
vest. Market-based performance criteria is reflected in the
measurement of fair value at the date of grant.
The impact of the revision to
original estimates, if any, is recognised in the consolidated
statement of comprehensive income, with a corresponding adjustment
to equity, such that the cumulative expense reflects the revised
estimate. The cumulative share-based payment expense held in
reserves is recycled into retained earnings when the share awards
or options lapse or are exercised. When options are exercised,
shares are either transferred to the employee from the Employee
Benefit Trust or by issuing new shares. The social security
contributions payable in connection with the grant of share awards
is treated as a cash-settled transaction.
The award by the Company of
share-based payment awards over its equity instruments to the
employees of subsidiary undertakings in the Group is treated as a
capital contribution only if it is left unsettled. The fair value
of employee services received, measured by reference to the grant
date fair value, is recognised over the vesting period as an
increase to investment in subsidiary undertakings, with a
corresponding credit to equity.
A deferred tax asset is recognised
on share options based on the intrinsic value of the options, which
is calculated as the difference between the fair value of the
shares under option at the reporting date and exercise price of the
share options. The deferred tax asset is utilised when the share
options are exercised or released when share options lapse. The
accounting policy regarding deferred tax is set out above in note
1(f).
(l) Equity
(i) Share
capital
Ordinary and deferred shares are
classified as equity. Incremental costs directly attributable to
the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Where any Group company purchases
the Company's equity instruments, for example as the result of a
share buyback or share-based payment plan, the consideration paid,
including any directly attributable incremental costs (net of
income taxes) is deducted from equity attributable to the owners of
the Company as treasury shares until the shares are cancelled or
reissued. Where such ordinary shares are subsequently reissued, any
consideration received, net of any directly attributable
incremental transaction costs and the related income tax effects,
is included in equity attributable to the owners of the
Company.
Shares held by the Employee
Benefit Trust are disclosed as own shares and deducted from
equity.
(ii) Own
shares
Own shares consist of treasury
shares and shares held within the Employee Benefit
Trust.
Own shares are recognised at cost
as a deduction from equity shareholders' funds. Subsequent
consideration received for the sale of such shares is also
recognised in equity, with any excess of consideration received
between the sale proceeds and the original cost being recognised in
share premium. No gain or loss is recognised in the financial
information on transactions in treasury shares.
(m) Financial instruments
The Group has applied IFRS 9
'Financial Instruments' as outlined below:
(i) Financial
assets
The Group classifies and measures
its financial assets in line with one of the three measurement
models under IFRS 9: at amortised cost, fair value through profit
or loss, and fair value through other comprehensive income.
Management determines the classification of its financial assets
based on the requirements of IFRS 9 at initial
recognition.
(ii) Trade
receivables
Trade receivables are accounted
for under IFRS 9, being recognised initially at fair value and
subsequently at amortised cost less any allowance for expected
lifetime credit losses under the 'expected credit loss' model. As
mandated by IFRS 9, the expected lifetime credit losses are
calculated using the 'simplified' approach.
A provision matrix is used to
calculate the allowance for expected lifetime credit losses on
trade receivables which is based on historical default rates over
the expected life of the trade receivables and is adjusted for
forward-looking estimates. The allowance for expected lifetime
credit losses is established by considering, on a discounted basis,
the cash shortfalls it would incur in various default scenarios for
prescribed future periods and multiplying those shortfalls by the
probability of each scenario occurring. The historical loss rates
are adjusted to reflect current and forward-looking information on
macroeconomic factors affecting the ability of the customers to
settle the receivables. The allowance is the sum of these
probability weighted outcomes. The allowance and any changes to it
are recognised in the consolidated statement of comprehensive
income within net operating expenses. When a trade receivable is
uncollectible, it is written off against the allowance account for
trade receivables. Subsequent recoveries of amounts previously
written off are credited against net operating expenses in the
consolidated statement of comprehensive income. The Group defines a
default as failure of a debtor to repay an amount due as this is
the time at which our estimate of future cash flows from the debtor
is affected.
(iii) Financial
liabilities
Debt and trade and other payables
are recognised initially at fair value based on amounts exchanged,
net of transaction costs, and subsequently at amortised
cost.
(iv) Receivables from and
payables to subsidiaries and the Employee Benefit
Trust
The Company has amounts receivable
from and payable to subsidiaries and the receivable from the
Employee Benefit Trust which are recognised at fair value. Amounts
receivable from subsidiaries and the Employee Benefit Trust are
assessed annually for recoverability under the requirements of IFRS
9.
(n) Key accounting assumptions, estimates and
judgements
The preparation of financial
information under IFRS requires the use of certain key accounting
assumptions and requires management to exercise its judgement and
to make estimates. Those that have the most significant effect on
the amounts recognised in the consolidated financial information or
have the most risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are discussed below.
Key sources of estimation uncertainty
(i) Carrying value of
goodwill, other intangible assets and Company investment
estimate
In assessing whether goodwill,
other intangible assets and the Company's investment are impaired,
the Group uses a discounted cash flow model which includes forecast
cash flows and estimates of future growth. If the results of
operations in future periods are lower than included in the cash
flow model, impairments may be triggered. A sensitivity analysis
has been performed on the value-in-use calculations. Further
details of the assumptions and sensitivities in the discounted cash
flow model are included in notes 10 and 13.
Critical accounting judgements
(ii) Adjusting items
judgement
The term 'adjusted' is not a
defined term under IFRS. Judgement is required to ensure that the
classification and presentation of certain items as adjusting,
including exceptional costs, is appropriate and consistent with the
Group's accounting policy. Further details about the amounts
classified as adjusting are included in notes 1(b) and
4.
Other areas of judgement and accounting
estimates
The consolidated financial
information includes other areas of judgement and accounting
estimates. While these areas do not meet the definition under IAS 1
of significant accounting estimates or critical accounting
judgements, the recognition and measurement of certain material
assets and liabilities are based on assumptions and/or are subject
to longer-term uncertainties. The other areas of judgement and
accounting estimates are:
·
|
Deferred tax (estimation of
forecasted future taxable profits) refer to notes 1(f) and
14;
|
·
|
Lease liabilities (lease term
judgement) refer to notes 1(g) and 19;
|
·
|
Lease liabilities (IBR estimate)
refer to notes 1(g) and 19; and
|
·
|
Share-based payment expense
(estimation of fair value) refer to notes 1(k)(i) and
23.
|
2
Segmental reporting
The Group is organised around two
reportable market-facing segments: Xeim and The Lawyer. These two
segments derive revenue from a combination of premium content,
training and advisory, events, marketing solutions and recruitment
advertising. Overhead costs are allocated to these segments on an
appropriate basis, depending on the nature of the costs, including
in proportion to revenue or headcount. Corporate income and costs
have been presented separately as 'Central'. The Group believes
this is the most appropriate presentation of segmental reporting
for the user to understand the core operations of the Group. There
is no inter-segmental revenue. Refer to note 8 for details on the
discontinued operations.
Segment assets consist primarily
of property, plant and equipment, intangible assets (including
goodwill) and trade receivables. Segment liabilities primarily
comprise trade payables, accruals and deferred income.
Corporate assets and liabilities
primarily comprise property, plant and equipment, intangible
assets, current and deferred tax balances, cash and cash
equivalents, short-term deposits and lease liabilities.
Capital expenditure comprises
purchases of additions to property, plant and equipment and
intangible assets.
2023
|
Note
|
Xeim
£'000
|
The Lawyer
£'000
|
Central
£'000
|
Continuing
operations
£'000
|
Discontinued
operations
£'000
|
Group
£'000
|
Revenue
|
|
28,968
|
8,361
|
-
|
37,329
|
2,006
|
39,335
|
Adjusted operating profit / (loss)
|
1(b)
|
7,447
|
3,022
|
(2,865)
|
7,604
|
42
|
7,646
|
Exceptional operating
costs
|
4
|
(297)
|
-
|
(52)
|
(349)
|
(454)
|
(803)
|
Amortisation of acquired
intangibles
|
11
|
(47)
|
-
|
-
|
(47)
|
(31)
|
(78)
|
Loss on disposal of
assets
|
4
|
-
|
-
|
-
|
-
|
(56)
|
(56)
|
Share-based payment
expense
|
23
|
(369)
|
(117)
|
(609)
|
(1,095)
|
-
|
(1,095)
|
Operating profit / (loss)
|
|
6,734
|
2,905
|
(3,526)
|
6,113
|
(499)
|
5,614
|
Finance income
|
6
|
|
|
|
266
|
-
|
266
|
Finance costs
|
6
|
|
|
|
(245)
|
-
|
(245)
|
Profit / (loss) before tax
|
|
|
|
|
6,134
|
(499)
|
5,635
|
Taxation
|
7
|
|
|
|
(807)
|
22
|
(785)
|
Profit / (loss) for the year
|
|
|
|
|
5,327
|
(477)
|
4,850
|
|
|
|
|
|
|
|
|
Segment assets
|
|
35,345
|
17,911
|
-
|
53,256
|
70
|
53,326
|
Corporate assets
|
|
-
|
-
|
10,891
|
10,891
|
-
|
10,891
|
Consolidated total assets
|
|
|
|
|
64,147
|
70
|
64,217
|
Segment liabilities
|
|
(11,391)
|
(3,780)
|
-
|
(15,171)
|
(196)
|
(15,367)
|
Corporate liabilities
|
|
-
|
-
|
(3,782)
|
(3,782)
|
-
|
(3,782)
|
Consolidated total liabilities
|
|
|
|
|
(18,953)
|
(196)
|
(19,149)
|
|
|
|
|
|
|
|
|
Other items
|
|
|
|
|
|
|
|
Capital expenditure (tangible and
intangible assets)
|
|
1,870
|
104
|
73
|
2,047
|
8
|
2,055
|
Re-presented2
2022
|
Note
|
Xeim
£'000
|
The Lawyer
£'000
|
Central
£'000
|
Continuing
operations
£'000
|
Discontinued
operations
£'000
|
Group
£'000
|
Revenue
|
|
30,083
|
8,301
|
-
|
38,384
|
3,209
|
41,593
|
Adjusted operating profit / (loss)
|
1(b)
|
5,771
|
2,474
|
(3,302)
|
4,943
|
354
|
5,297
|
Amortisation of acquired
intangibles
|
11
|
(490)
|
-
|
-
|
(490)
|
(31)
|
(521)
|
Gain on remeasurement of
lease
|
19
|
118
|
27
|
6
|
151
|
-
|
151
|
Lease termination fee
|
12,19
|
(190)
|
(43)
|
(10)
|
(243)
|
-
|
(243)
|
Share-based payment
expense
|
23
|
(260)
|
(72)
|
(474)
|
(806)
|
-
|
(806)
|
Operating profit / (loss)
|
|
4,949
|
2,386
|
(3,780)
|
3,555
|
323
|
3,878
|
Finance income
|
6
|
|
|
|
85
|
-
|
85
|
Finance costs
|
6
|
|
|
|
(158)
|
-
|
(158)
|
Profit before tax
|
|
|
|
|
3,482
|
323
|
3,805
|
Taxation
|
7
|
|
|
|
(930)
|
(75)
|
(1,005)
|
Profit for the year
|
|
|
|
|
2,552
|
248
|
2,800
|
|
|
|
|
|
|
|
|
Segment assets
|
|
33,550
|
17,391
|
-
|
50,941
|
793
|
51,734
|
Corporate assets
|
|
|
|
15,649
|
15,649
|
-
|
15,649
|
Consolidated total assets
|
|
|
|
|
66,590
|
793
|
67,383
|
Segment liabilities
|
|
(10,666)
|
(2,778)
|
-
|
(13,444)
|
(473)
|
(13,917)
|
Corporate liabilities
|
|
|
|
(4,640)
|
(4,640)
|
-
|
(4,640)
|
Consolidated total liabilities
|
|
|
|
|
(18,084)
|
(473)
|
(18,557)
|
|
|
|
|
|
|
|
|
Other items
|
|
|
|
|
|
|
|
Capital expenditure (tangible and
intangible assets)
|
|
1,143
|
147
|
67
|
1,357
|
-
|
1,357
|
2 See
note 1(a) for description of the prior year
re-presentation.
Supplemental information
Revenue by geographical
location
The Group's revenue from
continuing operations from external customers by geographical
location is detailed below:
|
Xeim
2023
£'000
|
The Lawyer
2023
£'000
|
Total
2023
£'000
|
Re-presented2
Xeim
2022
£'000
|
The Lawyer
2022
£'000
|
Re-presented2
Total
2022
£'000
|
United Kingdom
|
15,766
|
7,203
|
22,969
|
17,033
|
6,882
|
23,915
|
Europe (excluding United
Kingdom)
|
4,743
|
503
|
5,246
|
5,162
|
609
|
5,771
|
North America
|
4,210
|
495
|
4,705
|
4,534
|
628
|
5,162
|
Rest of world
|
4,249
|
160
|
4,409
|
3,354
|
182
|
3,536
|
|
28,968
|
8,361
|
37,329
|
30,083
|
8,301
|
38,384
|
2 See note 1(a) for description of the prior year
re-presentation.
Substantially all of the Group's
net assets are located in the United Kingdom. The Directors
therefore consider that the Group currently operates in a single
geographical segment, being the United Kingdom. Refer to note 13
for the location of the Group's subsidiaries.
Revenue by type
The Group's revenue from
continuing operations by type is as follows:
|
Xeim
2023
£'000
|
The Lawyer
2023
£'000
|
Total
2023
£'000
|
Re-presented2
Xeim
2022
£'000
|
The Lawyer
2022
£'000
|
Re-presented2
Total
2022
£'000
|
Premium Content
|
9,998
|
5,156
|
15,154
|
9,980
|
4,748
|
14,728
|
Training and Advisory
|
14,858
|
-
|
14,858
|
14,431
|
-
|
14,431
|
Events
|
2,096
|
1,780
|
3,876
|
2,548
|
1,998
|
4,546
|
Marketing Solutions
|
1,912
|
426
|
2,338
|
2,870
|
565
|
3,435
|
Recruitment Advertising
|
104
|
999
|
1,103
|
254
|
990
|
1,244
|
|
28,968
|
8,361
|
37,329
|
30,083
|
8,301
|
38,384
|
2 See note 1(a) for description of the prior year
re-presentation.
The accounting policies for each
of these revenue streams is disclosed in note 1(d), including the
timing of revenue recognition. There are some contracts for which
revenue has not yet been recognised and is being held in deferred
income, see note 20. This deferred income is all current and is
expected to be recognised as revenue in 2024.
3
Net operating expenses
Operating profit / (loss) is
stated after charging:
|
Note
|
Adjusted
Results1
2023
£'000
|
Adjusting
Items1
2023
£'000
|
Statutory
Results
2023
£'000
|
Re-presented2
Adjusted
Results1
2022
£'000
|
Re-presented2
Adjusting
Items1
2022
£'000
|
Re-presented2
Statutory
Results
2022
£'000
|
|
|
|
|
|
|
|
|
Employee benefits
expense
|
5
|
17,121
|
-
|
17,121
|
17,413
|
-
|
17,413
|
Capitalised employee
benefits
|
5,11
|
(435)
|
-
|
(435)
|
(403)
|
-
|
(403)
|
Exceptional operating
costs
|
4
|
-
|
349
|
349
|
-
|
-
|
-
|
Depreciation of property, plant
and equipment
|
4,12
|
1,133
|
-
|
1,133
|
2,028
|
243
|
2,271
|
Amortisation of intangible
assets
|
4,11
|
930
|
47
|
977
|
1,136
|
490
|
1,626
|
Gain on remeasurement of
lease
|
4,19
|
-
|
-
|
-
|
-
|
(151)
|
(151)
|
Share-based payment
expense
|
4,23
|
-
|
1,095
|
1,095
|
-
|
806
|
806
|
Net impairment of trade
receivables
|
26
|
(106)
|
-
|
(106)
|
(29)
|
-
|
(29)
|
IT expenditure
|
|
2,336
|
-
|
2,336
|
2,463
|
-
|
2,463
|
Marketing expenditure
|
|
1,489
|
-
|
1,489
|
1,618
|
-
|
1,618
|
Other staff-related
costs
|
|
275
|
-
|
275
|
412
|
-
|
412
|
Other operating
expenses
|
|
6,982
|
-
|
6,982
|
8,803
|
-
|
8,803
|
|
|
29,725
|
1,491
|
31,216
|
33,441
|
1,388
|
34,829
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
13,686
|
-
|
13,686
|
14,149
|
-
|
14,149
|
Distribution costs
|
|
28
|
-
|
28
|
60
|
-
|
60
|
Administrative expenses
|
|
16,011
|
1,491
|
17,502
|
19,232
|
1,388
|
20,620
|
|
|
29,725
|
1,491
|
31,216
|
33,441
|
1,388
|
34,829
|
|
|
|
|
|
|
|
| |
1 Adjusted results exclude adjusting items, as detailed in note
1(b).
2 See note 1(a) for description of the prior year
re-presentation.
Services provided by the Company and Group's
auditor
|
2023
£'000
|
2022
£'000
|
Fees payable for the audit of
Company and consolidated financial statements
|
128
|
120
|
Fees payable for the interim
financial statement review
|
12
|
11
|
Total fees paid to the Company and Group's
auditor
|
140
|
131
|
|
|
|
4
Adjusting items
As discussed in note 1(b), certain
items are presented as adjusting. These are detailed
below:
|
Note
|
2023
£'000
|
Re-presented2
2022
£'000
|
Continuing operations
|
|
|
|
Exceptional operating
costs
|
|
349
|
-
|
Amortisation of acquired
intangible assets
|
11
|
47
|
490
|
Gain on remeasurement of
lease
|
19
|
-
|
(151)
|
Lease termination fee
|
12,19
|
-
|
243
|
Share-based payment
expense
|
23
|
1,095
|
806
|
Adjusting items before
tax
|
|
1,491
|
1,388
|
Tax relating to adjusting
items
|
7
|
(410)
|
(264)
|
Total adjusting items after tax for continuing
operations
|
|
1,081
|
1,124
|
Discontinued operations
|
8
|
|
|
Exceptional operating
costs
|
|
454
|
-
|
Amortisation of acquired
intangible assets
|
11
|
31
|
31
|
Loss on disposal of
assets
|
11
|
56
|
-
|
Tax relating to adjusting
items
|
7
|
(127)
|
(6)
|
Total adjusting items after tax for discontinued
operations
|
|
414
|
25
|
Total adjusting items after tax
|
|
1,495
|
1,149
|
2 See note 1(a) for description of the prior year
re-presentation.
Exceptional operating costs
In the current year, exceptional
operating costs in continuing operations of £349,000 relate to
strategic restructuring of the Group as it prepares for the next
phase of growth following MAP23. This includes £317,000 of staff
related restructuring costs and £32,000 of associated professional
fees.
Exceptional operating costs in
discontinued operations of £454,000 were incurred during the year
due to the closure of the Really B2B and Design Week brands within
Xeim. This includes £393,000 of staff related restructuring costs
and £61,000 relating to professional fees and onerous
contracts.
Loss on disposal of assets
In the current year the loss on
disposal of assets in discontinued operations of £56,000 consists
of a loss on disposal of computer software of £7,000 and a loss on
disposal of acquired intangibles relating to the Really B2B brand
of £49,000. Refer to note 11 for further details.
Termination of lease
As a result of the termination of
the London property lease in the prior year, a net gain of £151,000
was recognised on remeasurement of the lease liability and
respective proportionate adjustment to the ROU asset. The
termination fee was included in the measurement of the ROU asset at
the time of the remeasurement, therefore the £243,000 was
recognised in depreciation in 2022. Refer to note 19 for further
details.
Other adjusting items
Other adjusting items relate to
the amortisation of acquired intangible assets (see note 11) and
share-based payment costs (see note 23).
5
Directors and employees
Group
|
Note
|
2023
Continuing
Group
£'000
|
2023
Discontinued
Group
£'000
|
2023
Total
Group
£'000
|
Re-presented2
2022
Continuing
Group
£'000
|
Re-presented2
2022
Discontinued
Group
£'000
|
Re-presented2
2022
Total
Group
£'000
|
Wages and salaries
|
|
14,522
|
1,126
|
15,648
|
14,723
|
1,379
|
16,102
|
Social security costs
|
|
1,696
|
129
|
1,825
|
1,863
|
155
|
2,018
|
Other pension costs
|
|
903
|
83
|
986
|
827
|
87
|
914
|
Employee benefits
expense
|
|
17,121
|
1,338
|
18,459
|
17,413
|
1,621
|
19,034
|
Capitalised employee
benefits
|
11
|
(435)
|
-
|
(435)
|
(403)
|
-
|
(403)
|
Exceptional staff related
restructuring costs
|
4
|
317
|
393
|
710
|
-
|
-
|
-
|
Share-based payment
expense
|
23
|
1,095
|
-
|
1,095
|
806
|
-
|
806
|
|
|
18,098
|
1,731
|
19,829
|
17,816
|
1,621
|
19,437
|
|
|
|
|
|
|
|
| |
2 See note 1(a) for description of the prior year
re-presentation.
Company
|
Note
|
2023
Company
£'000
|
2022
Company
£'000
|
Wages and salaries
|
|
1,499
|
1,464
|
Social security costs
|
|
205
|
221
|
Other pension costs
|
|
47
|
50
|
Employee benefits
expense
|
|
1,751
|
1,735
|
Share-based payment
expense
|
23
|
534
|
424
|
|
|
2,285
|
2,159
|
The average number of employees
employed during the year, including Executive Directors,
was:
|
2023
Group
Number
|
Re-presented2
2022
Group
Number
|
2023
Company
Number
|
2022
Company
Number
|
Xeim
|
167
|
169
|
-
|
-
|
The Lawyer
|
56
|
58
|
-
|
-
|
Central
|
10
|
10
|
4
|
4
|
Discontinued
|
24
|
32
|
-
|
-
|
|
257
|
269
|
4
|
4
|
2 See note 1(a) for description of the prior year
re-presentation.
The Group's employees are employed
and paid by Centaur Communications Limited, a Group company, with
the exception of the employees directly employed by the
Company.
Key management compensation
|
|
2023
£'000
|
2022
£'000
|
Salaries and short-term employment
benefits
|
|
1,680
|
1,583
|
Post-employment benefits
|
|
100
|
78
|
Share-based payment
expense
|
|
691
|
590
|
|
|
2,471
|
2,251
|
Key management is defined as the
Executive Directors and Executive Committee members.
1,485,000 shares were exercised by
Directors during the year at a share price of 37.0 pence.
(2022: 201,355 shares were exercised by
Directors at a share price of 40.0 pence).
Details of Directors' remuneration are included in the Remuneration
Committee Report.
6
Finance income and costs
|
Note
|
2023
£'000
|
2022
£'000
|
Finance income
|
|
|
|
Interest income from short-term
deposits
|
17
|
235
|
68
|
Interest income from cash and cash
equivalents
|
|
31
|
17
|
|
|
266
|
85
|
Finance costs
|
|
|
|
Commitment fees and amortisation
of arrangement fee in respect of revolving credit
facility
|
|
(106)
|
(105)
|
Interest on lease
|
19
|
(89)
|
(51)
|
Other finance costs
|
|
(50)
|
(2)
|
|
|
(245)
|
(158)
|
Net finance income / (costs)
|
|
21
|
(73)
|
Interest income from short-term deposits
Interest income from short-term
deposits is calculated using the effective interest method and is
recognised in profit or loss. Finance income in
relation to these short-term deposits resulted in cash inflows to
the Group of £189,000 during the year
(2022: £46,000).
Fees on revolving credit facility
These finance costs are in
relation to the Group's £10m revolving credit facility, none of
which was drawn down at 31 December 2023 (2022: £nil). As indicated
by the consolidated cash flow statement, there were no drawdowns
from this facility during the current and prior year. Finance costs
in relation to this facility resulted in cash outflows by the
Company and Group of £73,000 during the year (2022: £71,000).
Lease interest
A lease liability was recognised
for the Group's property lease. £89,000 of
interest on this lease was incurred during the year (2022:
£51,000). Refer to notes 1(g) and 19 for further
details.
7
Taxation
|
Note
|
2023
Continuing
£'000
|
2023
Discontinued
£'000
|
2023
Total
£'000
|
Re-presented2
2022
Continuing
£'000
|
Re-presented2
2022
Discontinued
£'000
|
Re-presented2
2022
Total
£'000
|
Analysis of charge / (credit) for the year
|
|
|
|
|
|
|
|
Current tax
|
21
|
|
|
|
|
|
|
Overseas tax
|
|
24
|
-
|
24
|
(3)
|
-
|
(3)
|
Adjustments in respect of
prior years
|
|
1,346
|
-
|
1,346
|
68
|
-
|
68
|
|
|
1,370
|
-
|
1,370
|
65
|
-
|
65
|
Deferred tax
|
14
|
|
|
|
|
|
|
Current period
|
|
1,193
|
(22)
|
1,171
|
838
|
75
|
913
|
Adjustments in respect of
prior years
|
|
(1,756)
|
-
|
(1,756)
|
27
|
-
|
27
|
|
|
(563)
|
(22)
|
(585)
|
865
|
75
|
940
|
Taxation charge / (credit)
|
|
807
|
(22)
|
785
|
930
|
75
|
1,005
|
2 See note 1(a) for description of the prior year
re-presentation.
The taxation charge / (credit) for
the year can be reconciled to the profit / (loss) before tax in the
consolidated statement of comprehensive income as
follows:
|
2023
Continuing
£'000
|
2023
Discontinued
£'000
|
2023
Total
£'000
|
Re-presented2
2022
Continuing
£'000
|
Re-presented2
2022
Discontinued
£'000
|
Re-presented2
2022
Total
£'000
|
Profit / (loss) before tax
|
6,134
|
(499)
|
5,635
|
3,482
|
323
|
3,805
|
Tax at the UK rate of corporation
tax of 23.5% (2022: 19.0%)
|
1,441
|
(117)
|
1,324
|
662
|
61
|
723
|
Effects of:
|
|
|
|
|
|
|
Expenses not deductible for tax
purposes
|
14
|
3
|
17
|
18
|
-
|
18
|
Additional deduction for capital
allowances
|
(8)
|
-
|
(8)
|
(86)
|
-
|
(86)
|
Share-based payments
|
(52)
|
-
|
(52)
|
2
|
-
|
2
|
Effects of changes in tax rate on
deferred tax balances
|
(82)
|
(1)
|
(83)
|
239
|
14
|
253
|
Use of losses
|
(93)
|
93
|
-
|
-
|
-
|
-
|
Different tax rates of
subsidiaries in other jurisdictions
|
(3)
|
-
|
(3)
|
-
|
-
|
-
|
Adjustments in respect of prior
years
|
(410)
|
-
|
(410)
|
95
|
-
|
95
|
Taxation charge / (credit)
|
807
|
(22)
|
785
|
930
|
75
|
1,005
|
2 See note 1(a) for description of the prior year
re-presentation.
In the Spring Budget 2021, the UK
Government announced that from 1 April 2023 the corporation tax
rate would increase to 25% (rather than remaining at 19%, as
previously enacted). This new law was substantively enacted on 24
May 2021. For the financial year ended 31 December 2023, the
current weighted averaged tax rate was 23.5%. Temporary differences
are remeasured using the enacted tax rates that are expected to
apply when the liability is settled or the asset
realised.
During the current year, the
Group's tax losses from 31 December 2021 were carried forward
rather than being surrendered by way of group relief against the
2022 taxable profits. This contrasts with the position that was
reflected in the financial statements for the year ended 31
December 2022. This results in additional taxable profits of
£6,926,000 in 2022 and a corresponding increase in tax losses
brought forward at 1 January 2023. Therefore in the current period,
adjustments in respect of prior year have been made to current tax
(£1,346,000) and deferred tax (£1,872,000) to reflect the
recognition of these tax losses as a deferred tax asset instead of
reducing the current tax charge relating to 2022.
A reconciliation between the
reported tax charge / (credit) and the adjusted tax charge taking
account of adjusting items as discussed in note 1(b) and 4 is shown
below:
|
2023
Continuing
£'000
|
2023
Discontinued
£'000
|
2023
Total
£'000
|
Re-presented2
2022
Continuing
£'000
|
Re-presented2
2022
Discontinued
£'000
|
Re-presented2
2022
Total
£'000
|
Reported tax charge / (credit)
|
807
|
(22)
|
785
|
930
|
75
|
1,005
|
Effects of:
|
|
|
|
|
|
|
Exceptional operating
costs
|
82
|
107
|
189
|
-
|
-
|
-
|
Amortisation of acquired
intangible assets
|
-
|
9
|
9
|
102
|
6
|
108
|
Loss on disposal of
assets
|
-
|
11
|
11
|
-
|
-
|
-
|
Gain on remeasurement of
lease
|
-
|
-
|
-
|
(36)
|
-
|
(36)
|
Share-based payments
|
328
|
-
|
328
|
198
|
-
|
198
|
Adjusted tax charge
|
1,217
|
105
|
1,322
|
1,194
|
81
|
1,275
|
2 See note 1(a) for description of the prior year
re-presentation.
8
Discontinued operations
In December 2023, the Group closed
the Really B2B ('Really) and Design Week ('DW') brands within Xeim
in line with the Group's strategy to prioritise higher quality
revenue and profit margin growth.
The results of the discontinued
operations, which were included in the consolidated statement of
comprehensive income and consolidated cash flow statement, were as
follows:
|
Really
|
DW
|
Total
|
Really
|
DW
|
Total
|
|
2023
|
2023
|
2023
|
2022
|
2022
|
2022
|
Statement of comprehensive income
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Revenue
|
1,787
|
219
|
2,006
|
2,850
|
359
|
3,209
|
Expenses
|
(2,181)
|
(268)
|
(2,449)
|
(2,679)
|
(207)
|
(2,886)
|
Loss on disposal of
assets
|
(56)
|
-
|
(56)
|
-
|
-
|
-
|
(Loss) / profit before tax
|
(450)
|
(49)
|
(499)
|
171
|
152
|
323
|
Attributable tax credit /
(charge)
|
22
|
-
|
22
|
(39)
|
(36)
|
(75)
|
Statutory (loss) / profit after tax
|
(428)
|
(49)
|
(477)
|
132
|
116
|
248
|
Add back adjusting items1:
|
|
|
|
|
|
|
Exceptional operating
costs
|
402
|
52
|
454
|
-
|
-
|
-
|
Amortisation of acquired
intangible assets
|
31
|
-
|
31
|
31
|
-
|
31
|
Loss on disposal of
assets
|
56
|
-
|
56
|
-
|
-
|
-
|
Tax relating to adjusting
items1
|
(115)
|
(12)
|
(127)
|
(6)
|
-
|
(6)
|
Total adjusting items1
|
374
|
40
|
414
|
25
|
-
|
25
|
Adjusted profit / (loss)1 attributable to
discontinued operations after tax
|
(54)
|
(9)
|
(63)
|
157
|
116
|
273
|
1 Adjusted results exclude adjusting items, as detailed in note
1(b).
|
Really
|
DW
|
Total
|
Really
|
DW
|
Total
|
|
2023
|
2023
|
2023
|
2022
|
2022
|
2022
|
Cash flows
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Net operating cash
flows
|
8
|
-
|
8
|
-
|
-
|
-
|
Investing cash flows
|
(8)
|
-
|
(8)
|
-
|
-
|
-
|
Financing cash flows
|
-
|
-
|
-
|
-
|
-
|
-
|
Total cash flows
|
-
|
-
|
-
|
-
|
-
|
-
|
The operating cash flows of
discontinued operations largely follow the trade activities of
these operations. There were no material investing or financing
cash flows in 2022 and 2023.
9
Earnings / (loss) per share
Basic earnings per share ('EPS')
is calculated by dividing the earnings attributable to ordinary
shareholders by the weighted average number of shares in issue
during the year. 1,878,628 (2022: 3,112,784) shares held in the
Employee Benefit Trust and 4,550,179 (2022: 4,550,179) shares held in
treasury (see note 22) have been excluded in arriving at the
weighted average number of shares.
For diluted earnings per share the
weighted average number of ordinary shares in issue is adjusted to
assume conversion of all deferred shares and dilutive potential
ordinary shares. This comprises share options and awards granted to
Directors and employees under the Group's share-based payment plans
where the exercise price is less than the average market price of
the Company's ordinary shares during the year.
Basic and diluted earnings per
share have also been presented on an adjusted basis, as the
Directors believe that these measures are more reflective of the
underlying performance of the Group. These have been calculated as
follows:
|
2023
Adjusted
Results1
£'000
|
2023
Adjusting
Items1
£'000
|
2023
Statutory
Results
£'000
|
Re-presented2
2022
Adjusted
Results1
£'000
|
Re-presented2
2022
Adjusting
Items1
£'000
|
Re-presented2
2022
Statutory
Results
£'000
|
Continuing operations (£'000)
Profit / (loss) for the year from
continuing operations
|
6,408
|
(1,081)
|
5,327
|
3,676
|
(1,124)
|
2,552
|
|
|
|
|
|
|
|
Number of shares (thousands)
|
|
|
|
|
|
|
Basic weighted average number of
shares
|
143,789
|
143,789
|
143,789
|
143,813
|
143,813
|
143,813
|
Effect of dilutive securities -
options
|
8,591
|
8,591
|
8,591
|
7,638
|
7,638
|
7,638
|
Diluted weighted average number of
shares
|
152,380
|
152,380
|
152,380
|
151,451
|
151,451
|
151,451
|
|
|
|
|
|
|
|
Earnings / (loss) per share from continuing
operations (pence)
|
|
|
|
|
|
|
Basic from continuing
operations
|
4.4
|
(0.7)
|
3.7
|
2.6
|
(0.8)
|
1.8
|
Fully diluted from continuing
operations
|
4.2
|
(0.7)
|
3.5
|
2.5
|
(0.8)
|
1.7
|
|
|
|
|
|
|
|
Discontinued operations (£'000)
Profit / (loss) for the year from
discontinued operations
|
(63)
|
(414)
|
(477)
|
273
|
(25)
|
248
|
|
|
|
|
|
|
|
Number of shares (thousands)
|
|
|
|
|
|
|
Basic weighted average number of
shares
|
143,789
|
143,789
|
143,789
|
143,813
|
143,813
|
143,813
|
Effect of dilutive securities -
options
|
8,591
|
8,591
|
8,591
|
7,638
|
7,638
|
7,638
|
Diluted weighted average number of
shares
|
152,380
|
152,380
|
152,380
|
151,451
|
151,451
|
151,451
|
|
|
|
|
|
|
|
Earnings / (loss) per share from discontinued operations
(pence)
|
|
|
|
|
|
|
Basic from discontinued
operations
|
-
|
(0.3)
|
(0.3)
|
0.1
|
-
|
0.1
|
Fully diluted from discontinued
operations
|
-
|
(0.3)
|
(0.3)
|
0.1
|
-
|
0.1
|
|
|
|
|
|
|
|
Continuing and discontinued operations
(£'000)
Profit / (loss) for the year
attributable to owners of parent
|
6,345
|
(1,495)
|
4,850
|
3,949
|
(1,149)
|
2,800
|
|
|
|
|
|
|
|
Number of shares (thousands)
|
|
|
|
|
|
|
Basic weighted average number of
shares
|
143,789
|
143,789
|
143,789
|
143,813
|
143,813
|
143,813
|
Effect of dilutive securities -
options
|
8,591
|
8,591
|
8,591
|
7,638
|
7,638
|
7,638
|
Diluted weighted average number of
shares
|
152,380
|
152,380
|
152,380
|
151,451
|
151,451
|
151,451
|
|
|
|
|
|
|
|
Earnings / (loss) per share from continuing and discontinued
operations (pence)
|
|
|
|
|
|
|
Basic earnings per
share
|
4.4
|
(1.0)
|
3.4
|
2.7
|
(0.8)
|
1.9
|
Fully diluted earnings per
share
|
4.2
|
(1.0)
|
3.2
|
2.6
|
(0.8)
|
1.8
|
1 Adjusted results exclude adjusting items, as detailed in
notes 1(b) and 4.
2 See note 1(a) for description of the prior year
re-presentation.
10 Goodwill
|
|
Group
£'000
|
Cost
|
|
|
At 1 January 2022, 31 December 2022 and 31 December
2023
|
|
81,109
|
|
|
|
Accumulated impairment
|
|
|
At 1 January 2022, 31 December 2022 and 31 December
2023
|
|
39,947
|
|
|
|
Net book value
|
|
|
At 1 January 2022, 31 December 2022 and 31 December
2023
|
|
41,162
|
At 31 December 2023 a full
impairment assessment has been carried out. No impairment is
required for the carrying value of goodwill. (2022:
£nil).
Goodwill by
segment
Each brand is deemed to be a cash
generating unit ('CGU'), being the lowest level at which cash flows
are separately identifiable. Goodwill is attributed to individual
CGUs and has historically been reviewed at the operating segment
level for the purposes of the annual impairment review as this is
the level at which management monitors goodwill.
|
|
Xeim
£'000
|
The Lawyer
£'000
|
Total
£'000
|
At 1 January 2022, 31 December
2022 and 31 December 2023
|
|
25,188
|
15,974
|
41,162
|
Impairment testing of goodwill and acquired intangible
assets
At 31 December 2023, goodwill and
acquired intangible assets (see note 11) were tested for impairment
in accordance with IAS 36. In assessing whether an impairment of
goodwill and acquired intangible assets is required, the carrying
value of the segment is compared with its recoverable amount.
Recoverable amounts are measured based on value-in-use
('VIU').
The Group estimates the VIU of its
CGUs using a discounted cash flow model, which adjusts the cash
flows for risks associated with the assets and discounts these
using a pre-tax rate of 10.8% (2022: 9.9%). The discount rate used
is consistent with the Group's weighted average cost of capital and
is used across all segments, which are all based predominantly in
the UK and considered to have similar risks and rewards.
The key assumptions used in
calculating VIU are revenue growth, margin,
adjusted1 EBITDA growth, discount rate and the terminal growth
rate. These have been
derived from a combination of experience and management's
expectations of future growth rates in the business. The Group has
used the four-year plan forecast to 2027 for the first four
years of the calculation and applied a terminal
growth rate of 2.5% (2022: 2.5%). This timescale and the
terminal growth rate are both considered appropriate given the
nature of the Group's revenue. The four-year plan
forecast to 2027 has been prepared brand by brand on a
bottom-up basis following a review of the business where management
has identified higher quality revenue streams for growth and focus,
which will deliver the targets set out below, and conversely which
areas of the business will be de-prioritised. Overall the four-year
plan forecast to 2027 assumes continued profit growth reflecting
top line expansion in key brands, while managing the impact of
projected inflationary pressures.
The key assumptions and variables
in this plan are sensitised in isolation and in combination. The
main sensitivities applied to the key drivers are outlined below.
As required by IAS 36, these sensitivities are applied in order to
assess the effect of reasonably possible changes in the
assumptions.
Sensitivity analysis has been
performed on the VIU calculations, holding all other variables
constant, to:
I.
|
apply a 10% reduction to forecast
adjusted1 EBITDA in each year
of the modelled cash flows. No impairment would occur in either of
the segments.
|
II.
|
apply a 2 percentage point
increase in discount rate from 10.8% to 12.8%. No impairment would
occur in either of the segments.
|
III.
|
reduce the terminal value growth
rate from 2.5% to 1.5%. No impairment would occur in either of the
segments.
|
The results of the impairment
assessment and sensitivities applied indicate that no impairment to
the goodwill or acquired intangible assets of either CGU is
required for the year ended 31 December 2023.
11 Other intangible assets
|
|
Computer
software
£'000
|
Brands and publishing
rights
£'000
|
Customer
relationships
£'000
|
Separately acquired
websites and content
£'000
|
Total
£'000
|
Cost
|
|
|
|
|
|
|
At 1 January 2022
|
|
19,631
|
1,380
|
11,321
|
3,216
|
35,548
|
Additions - separately
acquired
|
|
763
|
-
|
-
|
-
|
763
|
Additions - internally
generated
|
|
403
|
-
|
-
|
-
|
403
|
Disposals
|
|
(197)
|
-
|
-
|
-
|
(197)
|
Exchange differences
|
|
21
|
-
|
-
|
-
|
21
|
At 31 December 2022
|
|
20,621
|
1,380
|
11,321
|
3,216
|
36,538
|
Additions - separately
acquired
|
|
1,541
|
-
|
-
|
-
|
1,541
|
Additions - internally
generated
|
|
435
|
-
|
-
|
-
|
435
|
Disposals
|
|
(10,464)
|
(247)
|
(1,904)
|
-
|
(12,615)
|
At 31 December 2023
|
|
12,133
|
1,133
|
9,417
|
3,216
|
25,899
|
|
|
|
|
|
|
|
Accumulated amortisation
|
|
|
|
|
|
|
At 1 January 2022
|
|
17,562
|
769
|
10,899
|
3,216
|
32,446
|
Amortisation charge for the
year
|
|
1,136
|
99
|
422
|
-
|
1,657
|
Disposals
|
|
(197)
|
-
|
-
|
-
|
(197)
|
Exchange differences
|
|
21
|
-
|
-
|
-
|
21
|
At 31 December 2022
|
|
18,522
|
868
|
11,321
|
3,216
|
33,927
|
Amortisation charge for the
year
|
|
931
|
78
|
-
|
-
|
1,009
|
Disposals
|
|
(10,457)
|
(198)
|
(1,904)
|
-
|
(12,559)
|
At 31 December 2023
|
|
8,996
|
748
|
9,417
|
3,216
|
22,377
|
|
|
|
|
|
|
|
Net book value at 31 December 2023
|
|
3,137
|
385
|
-
|
-
|
3,522
|
Net book value at 31 December
2022
|
|
2,099
|
512
|
-
|
-
|
2,611
|
Net book value at 1 January
2022
|
|
2,069
|
611
|
422
|
-
|
3,102
|
During the year, the Group
performed a detailed review of the fixed asset register which
identified a number of historical fully amortised assets that are
no longer in use by the business, and therefore these assets were
disposed of in continuing operations. The disposed assets had a net
book value of £nil (2022: £nil).
During the year, the Group
disposed of intangible assets totalling a net book value of
£56,000, resulting in a loss on disposal of £56,000 in discontinued
operations. This has been recognised in the consolidated statement
of comprehensive income in discontinued operations.
The £56,000 loss on disposal of
intangible assets in discontinued operations resulted from the
disposal relating to the Really B2B business. In December 2023, the
Group disposed of the Really B2B branding with a net book value of
£49,000 for £nil proceeds, resulting in a loss of £49,000. Customer
relationships recognised on the acquisition of the Really B2B
business in 2017 with a net book value of £nil were disposed.
Really B2B computer software assets were disposed at a net book
value of £7,000 resulting in a loss of £7,000. These disposals were
effected in line with the closure of the Really B2B
brand within Xeim in line with the Group's
strategy to prioritise higher quality revenue and profit margin
growth.
Amortisation of intangible assets
is included in net operating expenses in the consolidated statement
of comprehensive income. The amortisation charge in continuing
operations is £977,000 (2022: £1,626,000) and in discontinued
operations is £32,000 (2022: £31,000). Amortisation on acquired
intangible assets from business combinations is presented as an
adjusting item in note 4 (see note 1(b) for further information).
Total amortisation of £78,000 (2022: £521,000) on such assets is
all amortisation on assets in the asset groups 'Brands and
publishing rights' and 'Customer relationships'. These total
amounts relate to continuing operations £47,000 (2022: £490,000)
and discontinued operations £31,000 (2022: £31,000) as shown in
note 4.
Other intangible assets are tested
annually for impairment in accordance with IAS 36 at a segment
level by comparing the carrying value with its recoverable amount
(see note 10 for further details). No impairment was recognised in
the current year or prior year.
The Company has no intangible
assets (2022: £nil).
12 Property, plant and equipment
|
|
Fixtures
and
fittings
£'000
|
Computer
equipment
£'000
|
ROU assets -
property
£'000
|
Total
£'000
|
Cost
|
|
|
|
|
|
At 1 January 2022
|
|
73
|
1,098
|
6,057
|
7,228
|
Additions - separately
acquired
|
|
21
|
273
|
-
|
294
|
Remeasurement
|
|
-
|
-
|
(120)
|
(120)
|
Disposals
|
|
-
|
(21)
|
(5,937)
|
(5,958)
|
Exchange differences
|
|
-
|
2
|
-
|
2
|
At 31 December 2022
|
|
94
|
1,352
|
-
|
1,446
|
Additions - separately
acquired
|
|
40
|
71
|
2,861
|
2,972
|
Disposals
|
|
(64)
|
(504)
|
-
|
(568)
|
At 31 December 2023
|
|
70
|
919
|
2,861
|
3,850
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
At 1 January 2022
|
|
61
|
840
|
3,843
|
4,744
|
Depreciation charge for the
year
|
|
7
|
170
|
2,094
|
2,271
|
Disposals
|
|
-
|
(21)
|
(5,937)
|
(5,958)
|
Exchange differences
|
|
-
|
2
|
-
|
2
|
At 31 December 2022
|
|
68
|
991
|
-
|
1,059
|
Depreciation charge for the
year
|
|
9
|
170
|
954
|
1,133
|
Disposals
|
|
(64)
|
(504)
|
-
|
(568)
|
At 31 December 2023
|
|
13
|
657
|
954
|
1,624
|
|
|
|
|
|
|
Net book value at 31 December 2023
|
|
57
|
262
|
1,907
|
2,226
|
Net book value at 31 December
2022
|
|
26
|
361
|
-
|
387
|
Net book value at 1 January
2022
|
|
12
|
258
|
2,214
|
2,484
|
In the current year, the Group
disposed of computer equipment and fixtures and fittings that are
no longer in use by the business. The disposed assets had a net
book value of £nil (2022: £nil).
Depreciation of property, plant
and equipment is included in net operating expenses in the
consolidated statement of comprehensive income. The current year
depreciation charge is £1,133,000 (2022: £2,271,000).
In the prior year, depreciation of
the ROU asset included £243,000 termination fee which was included
in the cost of the ROU asset in the remeasurement on the agreement
of the lease termination (see note 19). This £243,000 was presented
as an adjusting item in note 4 and the remaining depreciation
charge of £2,028,000 was in Adjusted Results.
The Company has no property, plant
and equipment at 31 December 2023 (2022: £nil).
13 Investments
|
Company
|
Investments
in
subsidiary
undertakings
£'000
|
|
Cost
|
|
|
At 1 January 2022
|
151,548
|
|
Additions
|
374
|
|
At 31 December 2022
|
151,922
|
|
Additions
|
552
|
|
At 31 December 2023
|
152,474
|
|
|
|
Accumulated impairment
|
|
|
|
At 1 January 2022, 31 December 2022 and 31 December
2023
|
86,393
|
|
|
|
|
Net book value at 31 December 2023
|
66,081
|
|
Net book value at 31 December
2022
|
65,529
|
|
Net book value at 1 January
2022
|
65,155
|
|
|
| |
Impairment testing of the investment
The carrying value of the
investment represents the Company's direct ownership of Centaur
Communications Limited ('CCL'). At 31 December 2023, the investment
was tested for impairment in accordance with IAS 36. In assessing
whether an impairment of the investment is required, the carrying
value of the investment is compared with its recoverable amount.
The recoverable amount is measured based on value-in-use ('VIU').
Although the Company only has direct ownership of CCL, CCL in turn
directly or indirectly controls the rest of the Group's
subsidiaries. Therefore, the VIU of the Company's investment in CCL
is supported by the operations of the entire Group.
In the prior year, the UK's
economic uncertainty throughout 2022 was identified as an
indication of impairment of the Company's investment carrying
value. Therefore, a full impairment assessment was performed. The
results of the impairment assessment and sensitivities applied
indicated that no impairment to the Company's investment in CCL was
required for the year ended 31 December 2022 as the carrying value of the investment was supported by the
underlying trade of the Group.
In the current year, the UK's
ongoing economic uncertainty throughout 2023 has been identified as
an indication of impairment of the Company's investment carrying
value. Therefore, a full impairment assessment has been
performed.
The Group estimates the VIU using
a discounted cash flow model, which adjusts the cash flows for
risks associated with the assets and discounts these using a
pre-tax rate of 10.8% (2022: 9.9%). The discount rate used is
consistent with the Group's weighted average cost of
capital.
The key assumptions used in
calculating VIU are revenue growth, margin,
adjusted1 EBITDA growth, discount rate and the terminal growth rate.
These have been derived from a combination of experience and
management's expectations of future growth rates in the business.
The Group has used the four-year plan forecast to 2027 for the
first four years of the
calculation and applied a terminal growth rate of 2.5% (2022:
2.5%). This timescale and the terminal growth rate are both
considered appropriate given the nature of the Group's revenue. The
four-year plan forecast to 2027 has been
prepared brand by brand on a bottom-up basis following a review of
the business where management has identified higher quality revenue
streams for growth and focus, which will deliver the targets set
out below, and conversely which areas of the business will be
de-prioritised. Overall the four-year plan forecast to 2027 assumes
continued profit growth reflecting top line expansion in key
brands, while managing the impact of projected inflationary
pressures.
Sensitivities are applied to each
of the key assumptions and variables in isolation and in
combination, in line with those sensitivities applied for goodwill
impairment testing as outlined in note 10. As required by IAS 36,
these sensitivities are applied in order to assess the effect of
reasonably possible changes in the assumptions.
The results of the impairment
assessment and sensitivities applied indicate that no impairment to
the Company's investment in CCL is required for the year ended 31
December 2023.
Additions of £552,000 (2022: £374,000) related to
capital contributions for share-based payments recharged to the
Company's subsidiaries.
In order to simplify the Group
structure, the process to close dormant companies commenced during
2021.
The Group dissolved the following
subsidiaries during the current year:
Name
|
Proportion of ordinary
shares and voting rights held (%)
|
Principal
activities
|
Country of
incorporation
|
Date of
closure
|
Chiron Communications
Limited
|
100
|
Dormant
|
United
Kingdom
|
11
January 2023
|
Taxbriefs Holdings
Limited
|
100
|
Dormant
|
United
Kingdom
|
4 April
2023
|
At 31 December 2023, the Group has
control over the following subsidiaries:
Name
|
Proportion of ordinary
shares and voting rights held (%)
|
Principal
activities
|
Country of
incorporation
|
Centaur Communications Limited
1
|
100
|
Holding
company and agency services
|
United
Kingdom
|
Centaur Media USA
Inc.2
|
100
|
Digital
information services
|
United
States
|
E-consultancy LLC
2
|
100
|
Holding
company
|
United
States
|
E-consultancy.com
Limited
|
100
|
Digital
information services
|
United
Kingdom
|
Market Makers Incorporated
Limited3
|
100
|
In
liquidation
|
United
Kingdom
|
TheLawyer.com Limited
|
100
|
Digital information services
|
United
Kingdom
|
Xeim Limited
|
100
|
Digital
information services
|
United
Kingdom
|
1 Directly owned by Centaur Media
Plc.
2 Registered address is 244 Fifth
Avenue, Suite 1297, New York, NY 10001, USA. Functional currency is
USD.
3 Market Makers
Incorporated Limited was liquidated on 14 January
2024.
The registered address of all
subsidiary companies, except for those identified above, is 10 York
Road, London, SE1 7ND, United Kingdom. The functional currency of
all subsidiaries is GBP except for those identified above. The
consolidated financial information incorporates the financial
information of all entities controlled by the Company at 31
December 2023.
14 Deferred tax
The movement on the deferred tax
account for the Group is shown below:
|
Accelerated
capital
allowances
£'000
|
Other
temporary
differences
£'000
|
Tax
losses
£'000
|
Total
£'000
|
Net asset at 1 January
2022
|
710
|
159
|
1,491
|
2,360
|
Adjustments in respect of prior
periods
|
13
|
23
|
(63)
|
(27)
|
Recognised in the consolidated
statement of comprehensive income
|
(443)
|
268
|
(738)
|
(913)
|
Recognised in the consolidated
statement of changes in equity
|
-
|
233
|
-
|
233
|
Net asset at 31 December 2022
|
280
|
683
|
690
|
1,653
|
Adjustments in respect of prior
periods
|
(115)
|
(1)
|
1,872
|
1,756
|
Recognised in the consolidated
statement of comprehensive income
|
(396)
|
173
|
(948)
|
(1,171)
|
Recognised in the consolidated
statement of changes in equity
|
-
|
(292)
|
-
|
(292)
|
Net asset at 31 December 2023
|
(231)
|
563
|
1,614
|
1,946
|
Deferred tax assets and
liabilities are only offset where there is a legally enforceable
right of offset and there is an intention to settle the balances
net.
|
2023
£'000
|
2022
£'000
|
Deferred tax assets
|
2,177
|
1,673
|
Deferred tax
liabilities
|
(231)
|
(20)
|
|
1,946
|
1,653
|
At the year end, the Group has
unused tax losses of £6,454,000 (2022: £2,935,000) available for
offset against future profits. A deferred tax asset of £1,614,000
(2022: £690,000) has been recognised in respect of £6,454,000
(2022: £2,935,000) of such tax losses.
In line with the Group's strategy
to focus on profit margin growth, the Group has been profitable
since 2021 and continuation of this profitable position is
reflected in the Group's four-year plan forecast to 2027. The Group
has concluded that the deferred tax asset will be recoverable using
the estimated future taxable profit based on the
four-year plan forecast to 2027. This forecast was
used in the impairment assessments performed for goodwill and
investments. Refer to notes 10 and 13 for further details. The
Group generated taxable profits in 2023 and is expected to generate
taxable profits from 2024 onwards. The losses can be carried
forward indefinitely and have no expiry date as long as the
companies that have the losses continue to trade.
The Company has deferred tax
assets on share options under long-term incentive
plans and unused tax losses totalling £1,082,000
at 31 December 2023 (2022:
£375,000).
Deferred tax assets and
liabilities are expected to be materially utilised after 12
months.
15 Trade and other receivables
|
Note
|
2023
Group
£'000
|
2022
Group
£'000
|
2023
Company
£'000
|
2022
Company
£'000
|
Amounts falling due within one year
|
|
|
|
|
|
Trade receivables
|
26
|
3,744
|
4,348
|
-
|
-
|
Less: expected credit
loss
|
26
|
(188)
|
(537)
|
-
|
-
|
Trade receivables - net
|
|
3,556
|
3,811
|
-
|
-
|
Other receivables
|
|
126
|
430
|
23
|
34
|
Prepayments
|
|
1,107
|
916
|
113
|
102
|
Accrued income
|
|
300
|
200
|
-
|
-
|
|
|
5,089
|
5,357
|
136
|
136
|
|
|
2023
Group
£'000
|
2022
Group
£'000
|
2023
Company
£'000
|
2022
Company
£'000
|
Amounts falling due after one year
|
|
|
|
|
|
Other receivables
|
|
166
|
27
|
4
|
27
|
Receivable from Employee Benefit
Trust
|
|
-
|
-
|
875
|
1,198
|
|
|
166
|
27
|
879
|
1,225
|
The receivable from Employee
Benefit Trust is unsecured, has no fixed due date and does not bear
interest.
Other receivables falling due
after one year include £162,000 (2022: £278,000 amount falling due
within one year) in relation to a deposit on the London property
lease which is fully refundable at the end of the lease term. The
previous London property lease ended on 31 December 2022 and the
Group was fully refunded for this deposit in 2023. The Group signed
a new lease agreement commencing 1 January 2023. Refer to note 19
for further detail.
16 Cash and cash equivalents
|
2023
Group
£'000
|
2022
Group
£'000
|
Cash at bank and in
hand
|
1,996
|
7,501
|
The Company had no cash and cash
equivalents at 31 December 2023 (2022: £nil).
17 Short-term deposits
|
2023
Group
£'000
|
2022
Group
£'000
|
Short-term deposits
|
7,500
|
8,500
|
The fixed term for these deposits
is four months (2022: between four and five months). Interest for
these short-term deposits is paid on maturity. Refer to note 6 for
further detail.
18 Trade and other payables
|
2023
Group
£'000
|
2022
Group
£'000
|
2023
Company
£'000
|
2022
Company
£'000
|
Trade payables
|
1,198
|
727
|
-
|
-
|
Payables to
subsidiaries
|
-
|
-
|
49,056
|
34,744
|
Accruals
|
5,713
|
7,590
|
988
|
1,002
|
Social security and other
taxes
|
1,003
|
577
|
-
|
-
|
Other payables
|
675
|
758
|
3
|
23
|
|
8,589
|
9,652
|
50,047
|
35,769
|
Payables to subsidiaries are
unsecured, have no fixed date of repayment and bear interest at an
annual rate of 7.44% (2022: 5.68%).
The Directors consider that the
carrying amount of the trade payables approximates their fair
value.
19 Lease liabilities
The lease liability reflected
below relates to a property lease, for which a corresponding
right-of-use ('ROU') asset is held on the consolidated statement of
financial position within property, plant and equipment and
detailed in note 12.
|
2023
Group
£'000
|
2022
Group
£'000
|
At 1 January
|
-
|
2,384
|
Addition of lease
liability
|
2,861
|
-
|
Remeasurement of lease
liability
|
-
|
(271)
|
Interest expense
|
89
|
51
|
Cash outflow - lease
payments
|
(973)
|
(1,921)
|
Cash outflow - termination
fee
|
-
|
(243)
|
At 31 December
|
1,977
|
-
|
|
|
|
Current
|
952
|
-
|
Non-current
|
1,025
|
-
|
At 31 December
|
1,977
|
-
|
A new lease agreement was entered
into with a commencement date of 1 January 2023, and therefore a
lease liability and corresponding ROU asset has been recognised on
1 January 2023. This lease has a term of three years until 31
December 2025, with lease payments/cash outflows of £973,000 for
the first year of the lease term, increasing by 3.5% annually
thereafter.
The Group had one lease agreement
in place during the prior year. In June 2022 an option to extend
the lease was exercised, resulting in an increase to the lease
liability and a corresponding increase to the ROU asset.
Subsequently, in October 2022, an agreement to terminate the lease
was signed, bringing the end date forward to 31 December 2022. This
changed the lease term judgement previously made, and the lease
liability was therefore remeasured. These two remeasurements
resulted in the net decrease in lease liability of £271,000. The
remeasurement upon agreement to terminate resulted in a
proportionate adjustment to the ROU asset and lease liability based
on the carrying values at the effective date, resulting in a gain
on remeasurement of £151,000. In exiting the lease, the Group
incurred a £243,000 termination fee. These were both recognised as
adjusting items in the consolidated statement of comprehensive
income. Refer to note 1(b) and 4 for further details.
20 Deferred income
|
2023
Group
£'000
|
2022
Group
£'000
|
Deferred income
|
8,352
|
8,885
|
Deferred income arises on
contracts with customers where revenue recognition criteria has not
yet been met. See note 1(d) for further details. During the year
ended 31 December 2023, £8,824,000 (2022: £7,831,000) of the
deferred income balance of £8,885,000 at 31 December 2022
(£7,846,000 at 31 December 2021) was recognised as revenue in the
consolidated statement of comprehensive income.
21 Current tax assets
|
2023
Group
£'000
|
2022
Group
£'000
|
Corporation tax
receivables
|
379
|
165
|
The Company had no corporation tax
receivables or payables at 31 December 2023 (2022:
£nil).
22 Equity
Ordinary shares of 10 pence each
|
Nominal
value
£'000
|
Number of
shares
|
Authorised share capital - Group
and Company
|
|
|
At 1 January 2022, 31 December
2022 and 31 December 2023
|
20,000
|
200,000,000
|
Issued and fully paid share
capital - Group and Company
|
|
|
At 1 January 2022, 31 December
2022 and 31 December 2023
|
15,141
|
151,410,226
|
Deferred shares reserve
The deferred shares reserve
represents 800,000 (2022: 800,000) deferred shares of 10 pence
each, which carry restricted voting rights and have no right to
receive a dividend payment in respect of any financial
year.
Reserve for shares to be issued
The reserve for shares to be
issued is in respect of equity-settled share-based payment plans.
The movements in the reserve for shares to be issued
represent the total charges for the year relating to equity-settled
share-based payment transactions with employees as accounted for
under IFRS 2 less transfers from this reserve to retained
earnings for shares exercised or lapsed during the year.
Own shares reserve
The own shares reserve represents
the value of shares held as treasury shares and in the Employee
Benefit Trust. At 31 December 2023, 4,550,179 (2022: 4,550,179) 10
pence ordinary shares were held in treasury and 1,878,628 (2022:
3,112,784) 10 pence ordinary shares were held in the Employee
Benefit Trust.
The Employee Benefit Trust issued
1,887,510 (2022: 201,355) shares to meet obligations arising from
share-based rewards to employees that had vested and were exercised
in the current year (2022: vested and exercised in 2022). The
shares were issued at a historical weighted average cost of 67.6
pence (2022: 105.3 pence) per share. The total cost of £1,276,000
(2022: £212,000) has been recognised as a reduction in the own
shares reserve in other reserves in equity.
During 2023, the Employee Benefit
Trust purchased 653,354 (2022: 1,249,954) ordinary shares in order
to meet future obligations arising from share-based rewards to
employees. The shares were acquired at an average price of 49.4
pence per share. The total cost of £322,000 (2022: £604,000) has
been recognised in the own shares reserve in equity.
23 Share-based payments
The Group's share-based payment
expense for the year:
|
2023
£'000
|
2022
£'000
|
Share-based payment
expense
|
1,095
|
806
|
The share-based payment expense is
presented as an adjusting item in note 4 (see note 1(b) for further
information) and is included in net operating expenses in the
consolidated statement of comprehensive income.
The Group's share-based payment
plans are equity-settled upon vesting.
The share-based payment expense
includes social security contributions which are settled in cash
upon exercise. £146,000 (2022: £75,000) was charged to the
consolidated statement of comprehensive income in relation to
employers NI on share-based payment plans and included in accruals
on the consolidated statement of financial position.
Long-Term Incentive Plan
The Group operates a Long-Term
Incentive Plan ('LTIP') for Executive Directors and selected senior
management. This is an existing incentive policy and was approved
by shareholders at the 2016 AGM. Full details on how the plan
operates are included in the Remuneration Report.
During the year LTIP awards were
granted to Executive Directors and selected senior management.
Details of the performance conditions of these awards are disclosed
in the Remuneration Report.
A reconciliation of the movements
in LTIP awards is shown below.
|
2023
|
2022
|
Number of awards
|
|
|
At 1 January
|
7,334,737
|
7,664,075
|
Granted
|
2,579,381
|
2,870,942
|
Exercised
|
(1,887,510)
|
(201,355)
|
Forfeited
|
(434,081)
|
(166,057)
|
Lapsed
|
-
|
(2,832,868)
|
At 31 December
|
7,592,527
|
7,334,737
|
Exercisable at 31 December
|
-
|
-
|
Weighted average share price at date of exercise
(pence)
|
37.44
|
40.00
|
The awards granted during the year
were priced using the following models and inputs:
Grant date
|
|
12.04.2023
|
Share price at grant date
(pence)
|
|
49.00
|
Weighted average fair value of
options (pence)
|
|
47.31
|
Vesting date
|
|
12.04.2026
|
Exercise price (pence)
|
|
-
|
Expected volatility (%)
|
|
28.14
|
Expected dividend yield
(%)
|
|
-
|
Risk free interest rate
(%)
|
|
3.75
|
Valuation model used
|
|
Stochastic
|
Options exercised during the year
related to the 2020 LTIP awards that vested during the year (2022:
2019 LTIP awards).
Options forfeited during the year
were due to the participants leaving before the vesting date of the
options. No options lapsed during the year. Options that lapsed in
the prior year did not meet the performance conditions and related
to a portion of the 2019 LTIP awards. No options expired during the
year (2022: nil).
The share awards outstanding at 31
December 2023 had a weighted average exercise price of £nil (2022:
£nil) and a weighted remaining life of 1.2 years (2022: 1.4
years).
Deferred Share Bonus Plan
The Deferred Share Bonus Plan
('DSBP') was approved by the Board in May 2022 and applies to
Executive Directors. Under the plan, the portion of their annual
bonus greater than 75% of basic salary is deferred in accordance
with the Group's remuneration policy into awards in Centaur Media
Plc shares. Awards under the DSBP are not subject to further
performance conditions and vest after three years, subject to
continued employment. Dividend equivalents may be awarded in
respect of the DSBP awards on vesting. Further details on how the
plan operates is included in the Remuneration Report.
A reconciliation of the movements
in DSBP awards is shown below.
|
2023
|
2022
|
Number of awards
|
|
|
At 1 January
|
60,593
|
-
|
Granted
|
-
|
60,593
|
At 31 December
|
60,593
|
60,593
|
Exercisable at 31 December
|
-
|
-
|
Weighted average share price at date of exercise
(pence)
|
-
|
-
|
No options were granted during the
year. In May 2022, 60,593 shares were awarded to Executive
Directors under the DSBP, representing the portion of the 2021
bonus to Executive Directors greater than 75% of their basic
salary.
No options were exercised,
forfeited or expired during the current and prior year.
The share awards outstanding at 31
December 2023 had a weighted average exercise price of £nil (2022:
£nil) and a weighted remaining life of 1.2 years (2022: 2.2
years).
Senior Executive Long-Term Incentive Plan
The Centaur Media Plc 2010 Senior
Executive Long-Term Incentive Plan (the 'SELTIP') was introduced
during 2011 and was approved by shareholders at the 2010 AGM. This
is not an HMRC approved plan and vests over a three-year period
with service and performance conditions. Awards were granted under
this plan in 2011 for no consideration and no exercise price. This
plan closed to new awards in the prior year.
|
|
2023
|
2022
|
|
Number of awards
|
|
|
At 1 January
|
-
|
6,862
|
Expired
|
-
|
(6,862)
|
At 31 December
|
-
|
-
|
Exercisable at 31 December
|
-
|
-
|
Weighted average share price at date of exercise
(pence)
|
-
|
-
|
|
|
| |
No options were granted,
exercised, forfeited or lapsed during the current and prior
year.
All options expired during the
prior year.
Share Incentive Plan
The Centaur Media Plc Share
Incentive Plan (the 'SIP') is an HMRC approved Tax-Advantaged plan,
which provides employees with the opportunity to purchase shares in
the Company. This plan is open to all employees who have been
employed by the Group for more than three months. Employees may
invest up to £1,800 per annum (or 10% of their salary if less) in
ordinary shares in the Company, which are held in trust. The shares
are purchased in open market and are held in trust for each
employee. The shares can be withdrawn with tax paid at any time, or
tax-free after five years. The Group matches the contribution with
a ratio of one share for every two purchased. Other than
continuing employment, there are no other performance conditions
attached to the plan.
The Executive Directors are
eligible to participate in the Share Incentive Plan, as are all
employees of the Group.
|
|
2023
|
2022
|
|
Number of matching shares
|
|
|
Outstanding at 1
January
|
75,908
|
57,495
|
Awarded
|
19,752
|
18,413
|
Forfeited
|
(4,941)
|
-
|
Sold
|
(436)
|
-
|
Outstanding at 31 December
|
90,283
|
75,908
|
|
|
| |
24 Dividends
|
|
2023
|
2022
|
|
|
£'000
|
£'000
|
|
Equity dividends
|
|
|
Final dividend for 2021: 0.5 pence
per 10 pence ordinary share
|
-
|
718
|
Interim dividend for 2022: 0.5
pence per 10 pence ordinary share
|
-
|
718
|
Special dividend for 2022: 3.0
pence per 10 pence ordinary share
|
4,312
|
-
|
Special dividend for 2022: 2.0
pence per 10 pence ordinary share
|
2,875
|
-
|
Final dividend for 2022: 0.6 pence
per 10 pence ordinary share
|
859
|
-
|
|
Interim dividend for 2023: 0.6
pence per 10 pence ordinary share
|
870
|
-
|
|
|
8,916
|
1,436
|
|
|
| |
An interim dividend for the six
months ended 30 June 2023 of £870,000 (0.6 pence per ordinary
share) was paid on 20 October 2023 to all ordinary shareholders on
the register as at close of business on 6 October 2023.
A final dividend for the year
ended 31 December 2023 of £1,740,000
(1.2 pence per ordinary share) is proposed by the
Directors and, subject to shareholder approval at the Annual
General Meeting, will be paid on 24 May 2024 to all ordinary
shareholders on the register at the close of business on 10 May
2024.
The interim, special and final
dividends together resulted in a total dividend pertaining to 2022
of £8,764,000.
25 Notes to the cash flow statement
Reconciliation of profit / (loss)
for the year to cash generated from operating
activities:
|
|
'000
|
'000
|
'000
|
'000
|
|
Note
|
2023
Group
£'000
|
2022
Group
£'000
|
2023
Company
£'000
|
2022
Company
£'000
|
|
Profit / (loss) for the year
|
|
4,850
|
2,800
|
(4,521)
|
(4,619)
|
|
Adjustments for:
|
|
|
|
|
|
|
Taxation charge /
(credit)
|
7
|
785
|
1,005
|
(1,871)
|
(1,106)
|
|
Finance income
|
6
|
(266)
|
(85)
|
-
|
-
|
|
Finance costs
|
6
|
245
|
158
|
3,538
|
2,001
|
|
Depreciation of property, plant
and equipment
|
12
|
1,133
|
2,271
|
-
|
-
|
|
Amortisation of intangible
assets
|
11
|
1,009
|
1,657
|
-
|
-
|
|
Loss on disposal of
assets
|
11
|
56
|
-
|
-
|
-
|
|
Gain on remeasurement of
lease
|
19
|
-
|
(151)
|
-
|
-
|
|
Share-based payment
expense
|
23
|
1,095
|
806
|
534
|
424
|
|
Unrealised foreign exchange
differences
|
|
29
|
(145)
|
-
|
-
|
|
Changes in working capital:
|
|
|
|
|
|
|
Decrease / (increase) in trade and
other receivables
|
|
25
|
1,002
|
311
|
(17)
|
|
(Decrease) / increase in trade and
other payables
|
|
(1,125)
|
(1,955)
|
11,094
|
4,824
|
|
(Decrease) / increase in deferred
income
|
|
(533)
|
1,039
|
-
|
-
|
|
Cash generated from operating activities
|
|
7,303
|
8,402
|
9,085
|
1,507
|
|
|
|
|
|
|
|
| |
Reconciliation of movements of
liabilities and associated assets to cash flows arising from
financing activities:
|
Note
|
Group and
Company
Net
borrowings
£'000
|
Group
Lease
liability
£'000
|
At 1 January 2022
|
|
72
|
(2,384)
|
Changes from financing cash flows:
|
|
|
|
Finance costs paid
|
6
|
71
|
-
|
Repayment of obligations under
finance leases
|
19
|
-
|
1,921
|
Termination of lease
|
19
|
-
|
243
|
|
|
71
|
2,164
|
Other changes:
|
|
|
|
Finance costs
|
6
|
(105)
|
(51)
|
Remeasurement of lease
liability
|
19
|
-
|
271
|
Extension fee on revolving credit
facility
|
26
|
20
|
-
|
|
|
(85)
|
220
|
Balance at 31 December 2022
|
|
58
|
-
|
Changes from financing cash flows:
|
|
|
|
Finance costs paid
|
6
|
73
|
-
|
Extension fee on revolving credit
facility
|
26
|
20
|
|
Repayment of obligations under
finance leases
|
19
|
-
|
973
|
|
|
93
|
973
|
Other changes:
|
|
|
|
Finance costs
|
6
|
(106)
|
(89)
|
Addition of lease
liability
|
19
|
-
|
(2,861)
|
Extension fee on revolving credit
facility
|
26
|
(20)
|
-
|
|
|
(126)
|
(2,950)
|
Balance at 31 December 2023
|
|
25
|
(1,977)
|
Net borrowings is comprised of a
loan arrangement fee debtor of £28,000 (2022: £61,000) presented
within other receivables and a commitment fee creditor of £3,000
presented within other payables (2022: £3,000). The movements of
this asset and liability together give rise to cash flows from
financing activities relating to the £10m revolving credit
facility.
26 Financial instruments and financial risk
management
Financial risk management
The Board has overall
responsibility for the determination of the Group's risk management
policies. The Board receives monthly reports from the Chief
Financial Officer through which it reviews the effectiveness of
policies and processes put in place to manage risk. The Board sets
policies that reduce risk as far as possible without unduly
affecting the operating effectiveness of the Group.
The Group's activities expose it
to a variety of financial risks, including interest rate risk,
credit risk, liquidity risk, capital risk and currency risk. Of
these, credit risk and liquidity risk are considered the most
significant. This note presents information about the Group's
exposure to each of the above risks.
Categories of financial instruments
Details of the material accounting
policies and methods adopted, including the criteria for
recognition, the basis of measurement and the basis on which income
and expenses are recognised in respect of each class of financial
asset, financial liability and equity instrument are disclosed in
note 1(m). All financial assets and liabilities are measured at
amortised cost.
|
Note
|
2023
£'000
|
2022
£'000
|
Financial assets
|
|
|
|
Cash and cash
equivalents
|
16
|
1,996
|
7,501
|
Short-term deposits
|
17
|
7,500
|
8,500
|
Trade receivables - net
|
15
|
3,556
|
3,811
|
Other receivables
|
15
|
292
|
457
|
|
|
13,344
|
20,269
|
Financial liabilities
|
|
|
|
Lease liability
|
19
|
1,977
|
-
|
Trade payables
|
18
|
1,198
|
727
|
Accruals
|
18
|
5,713
|
7,590
|
Other payables
|
18
|
675
|
758
|
|
|
9,563
|
9,075
|
Credit risk
Credit risk refers to the risk
that a counterparty will default on its contractual obligations
resulting in financial loss to the Group. The carrying amount of
financial assets recorded in the financial information, which is
net of impairment losses, represents the Group's maximum exposure
to credit risk in relation to financial assets. Credit risk is
managed on a Group basis. The Group does not consider that it is
subject to any significant concentrations of credit
risk.
Trade receivables
Trade receivables consist of a
large number of customers, of varying sizes and spread across
diverse industries and geographies. The Group does not have
significant exposure to credit risk in relation to any single
counterparty or group of counterparties having similar
characteristics. The Group's exposure to credit risk is influenced
predominantly by the circumstances of individual customers as
opposed to industry or geographic trends.
The business assesses the credit
quality of customers based on their financial position, past
experience and other qualitative and quantitative factors. The
Group's policy requires customers to pay in accordance with agreed
payment terms, which are generally 30 days from the date of
invoice. Under normal trading conditions, the Group is exposed to
relatively low levels of risk and potential losses are mitigated as
a result of a diversified customer base and the requirement for
events and certain premium content subscription invoices to be paid
in advance of service delivery.
The credit control function within
the Group's finance department monitors the outstanding debts of
the Group and trade receivable balances are analysed by the age and
value of outstanding balances.
Any trade receivable balance which
is objectively determined to be uncollectible is written off the
ledger, with a charge taken through the consolidated statement of
comprehensive income. The Group also records an allowance for the
lifetime expected credit loss on its trade receivables balances
under the simplified approach as mandated by IFRS 9. The impairment
model for trade receivables, under IFRS 9, requires the recognition
of impairment provisions based on expected lifetime credit losses
rather than only incurred ones. All balances are reviewed with
those greater than 90 days past due considered to carry a higher
level of credit risk. Refer to note 1(m)(ii) for further details on
the approach to allowance for expected credit losses on trade
receivables.
The allowance for expected
lifetime credit losses, and changes to it, are taken through
administrative expenses in the consolidated statement of
comprehensive income.
The ageing of trade receivables
according to their original due date is detailed below:
|
2023
Gross
£'000
|
2023
Provision
£'000
|
2022
Gross
£'000
|
2022
Provision
£'000
|
Not due
|
2,656
|
(4)
|
2,971
|
(45)
|
0-30 days past due
|
390
|
(2)
|
488
|
(15)
|
31-60 days past due
|
138
|
(2)
|
141
|
(9)
|
61-90 days past due
|
82
|
(2)
|
74
|
(9)
|
Over 90 days past due
|
478
|
(178)
|
674
|
(459)
|
|
3,744
|
(188)
|
4,348
|
(537)
|
In making the assessment that
unprovided trade receivables are not impaired, the Directors have
considered the quantum of gross trade receivables which relate to
amounts not yet included in income, including amounts in deferred
income and amounts relating to VAT. The credit quality of trade
receivables not impaired has been assessed as
acceptable.
The movement in the allowance for
expected credit losses on trade receivables is detailed
below:
|
2023
Continuing
Group
£'000
|
2023
Discontinued
Group
£'000
|
2023
Total
Group
£'000
|
Re-presented2
2022
Continuing
Group
£'000
|
Re-presented2
2022
Discontinued
Group
£'000
|
Re-presented2
2022
Total
Group
£'000
|
Balance at 1 January
|
405
|
132
|
537
|
427
|
137
|
564
|
Utilised
|
(167)
|
(66)
|
(233)
|
(15)
|
(3)
|
(18)
|
Release
|
(106)
|
(5)
|
(111)
|
(29)
|
(2)
|
(31)
|
Exchange differences
|
(5)
|
-
|
(5)
|
22
|
-
|
22
|
Balance at 31 December
|
127
|
61
|
188
|
405
|
132
|
537
|
The Group's policy requires
customers to pay in accordance with agreed payment terms which are
generally 30 days from the date of invoice or in the case of live
events related revenue no less than 30 days before the event. All
credit and recovery risk associated with trade receivables has been
provided for in the consolidated statement of financial position.
The Group's policy for recognising an impairment loss is given in
note 1(m)(ii). Impairment losses are taken through administrative
expenses in the consolidated statement of comprehensive
income.
The Directors consider the
carrying value of trade and other receivables approximates to their
fair value.
Cash and cash equivalents and short-term
deposits
Banks and financial institutions
are independently rated by credit rating agencies. We choose only
to deal with those with a minimum 'A' rating. We determine the
credit quality for cash and cash equivalents and short-term
deposits to be strong.
Other receivables
Other receivables are neither past
due nor impaired. These are primarily made up of sundry
receivables, including employee-related debtors and receivables in
respect of distribution arrangements.
Liquidity risk
Liquidity risk is the risk that
the Group will not be able to meet its financial obligations as
they fall due. The Group manages liquidity risk by maintaining
adequate reserves and working capital credit facilities, and by
continuously monitoring forecast and actual cash flows. Since March
2021, the Group has had a multi-currency revolving credit facility
with NatWest. The facility consists of a committed £10m facility
and an additional uncommitted £15m accordion option, both of which
can be used to cover the Group's working capital and general
corporate needs. In February 2024, the Group took the option to
extend the facility for one year and the facility now runs to 31
March 2026. As at 31 December 2023, the Group had cash
of £1,996,000 (2022:
£7,501,000) and short-term deposits of
£7,500,000 (2022: £8,500,000) with a full undrawn loan facility of
£25,000,000 (2022: full undrawn loan facility of
£25,000,000).
The following tables detail the
financial maturity for the Group's financial
liabilities:
|
Book value
£'000
|
Fair value
£'000
|
Less than
1 year
£'000
|
2-5 years
£'000
|
At 31 December 2023
|
|
|
|
|
Financial liabilities
|
|
|
|
|
Interest bearing
|
1,977
|
1,977
|
952
|
1,025
|
Non-interest bearing
|
7,586
|
7,586
|
7,586
|
-
|
|
9,563
|
9,563
|
8,538
|
1,025
|
At 31 December 2022
|
|
|
|
|
Financial liabilities
|
|
|
|
|
Non-interest bearing
|
9,075
|
9,075
|
9,075
|
-
|
|
9,075
|
9,075
|
9,075
|
-
|
The Directors consider that book
value is materially equal to fair value.
The book value of primary
financial instruments approximates to fair value where the
instrument is on a short maturity or where they bear interest at
rates that approximate to the market.
The following table details the
level of fair value hierarchy for the Group's financial assets and
liabilities:
Financial Assets
|
Financial Liabilities
|
Level 1
|
Level 3
|
Cash and cash
equivalents
|
Lease liabilities
|
Short-term deposits
|
Trade payables
|
Level 3
|
Accruals
|
Trade receivables - net
|
Other payables
|
Other receivables
|
Borrowings*
|
*Borrowings are purely in relation
to the Group's revolving credit facility which is discussed above.
The amount drawn down from this facility at 31 December 2023 was
£nil (2022: £nil).
All trade and other payables are
due for payment in one year or less, or on demand.
Interest rate risk
The Group's financial assets are
not significant interest-bearing assets. The Group is exposed to
interest rate risk when it borrows funds at floating interest rates
through its revolving credit facility. Borrowings issued at
variable rates expose the Group to cash flow interest rate
risk. The Group evaluates its risk appetite towards interest
rate risks regularly to manage interest rate risk in relation to
its revolving credit facility if deemed necessary.
The Group did not enter any
hedging transactions during the current or prior year and as at 31
December 2023 the only floating rate to which the Group was exposed
was SONIA. The Group's exposure to interest rates on financial
assets and financial liabilities is detailed in the liquidity risk
section of this note.
Interest rate sensitivity
The Group has not drawn down from
its revolving credit facility in the current year or prior year
therefore a sensitivity analysis has not been performed.
Capital risk
The Group manages its capital to
ensure that all entities in the Group will be able to continue as a
going concern while maximising return to shareholders, as well as
sustaining the future development of the business.
The capital structure of the Group
consists of net cash, which includes cash and cash equivalents
(note 16), short-term deposits (note 17) and equity attributable to
the owners of the parent, comprising issued share capital (note
22), other reserves and retained earnings. The Board also considers
the levels of own shares held for employee share plans and the
ability to issue new shares for acquisitions, in managing capital
risk in the business.
Since March 2021, the Group has
benefited from its banking facility with NatWest, which featured a
committed £10m facility and an additional uncommitted £15m
accordion option, both of which can be used to cover the Group's
working capital and general corporate needs. In February 2024, the
Group took the option to extend the facility for one year and the
facility now runs to 31 March 2026. Interest is calculated on SONIA
plus a margin dependent on the Group's net leverage position, which
is re-measured quarterly in line with covenant testing. The Group's
borrowings are subject to financial covenants tested quarterly. The
principal financial covenants under the facility are that the ratio
of net debt to EBITDA shall not exceed 2.5:1 and the ratio of
EBITDA to net finance charges shall not be less than 4:1. At no
point during the current year or prior year did the Group breach
its covenants.
Currency risk
Substantially all the Group's net
assets are in the United Kingdom. Most of the revenue and profits
are generated in the United Kingdom and consequently foreign
exchange risk is limited. The Group continues to monitor its
exposure to currency risk, particularly as the business expands
into overseas territories such as North America, however the
results of the Group are not currently considered to be sensitive
to movements in currency rates.
27 Pension schemes
The Group contributes to
individual and collective money purchase pension schemes in respect
of Directors and employees once they have completed the requisite
period of service. The charge for the year in respect of these
defined contribution schemes is shown in note 5. Included within
other payables is an amount of £90,000
(2022: £92,000) payable in respect of the money
purchase pension schemes.
28 Capital commitments
At 31 December 2022, the Group had
signed a lease agreement for a London property with a commencement
date of 1 January 2023. This lease has a term of three years until
31 December 2025, with lease payments/cash outflows of £973,000 for
the first year of the lease term, increasing by 3.5% annually
thereafter. There is a deposit for the new London property lease
which will be payable from the commencement date of 1 January 2023
of £162,000. This is fully refundable at the end of the lease term.
This lease has now been recognised in the consolidated statement of
financial position as at 31 December 2023 accordingly within
property, plant and equipment (note 12), trade and other
receivables (note 15) and lease liabilities (note 19).
There are no capital commitments
as at 31 December 2023.
29 Related party transactions
Group
Key management compensation is
disclosed in note 5. There were no other material related party
transactions for the Group in the current or prior year.
Company
The Company had the following
transactions with subsidiaries and related parties during the
year.
i)
Interest
During the year, interest was
recharged from subsidiary companies as follows:
|
2023
|
2022
|
|
£'000
|
£'000
|
Net interest payable
|
3,432
|
1,896
|
There were no borrowings at the
end of the year (2022: £nil).
The balances outstanding with
subsidiary companies are disclosed in note 18.
ii)
Dividends
During both the current and prior
year, the Company did not receive any dividends from its
subsidiaries.
iii) Employee Benefit
Trust
The assets and liabilities of the
Employee Benefit Trust are comprised in the consolidated statement
of financial position. Transactions between the Employee Benefit
Trust and the Company are detailed in notes 22 and 23. Details of
the Company's receivable from the Employee Benefit Trust is in note
15.
There were no other material
related party transactions for the Company in the current or prior
year.
Audit exemption
For the year ended 31 December
2023, the Company has provided a guarantee pursuant to sections
479A-C of Companies Act 2006 over the liabilities of the following
subsidiaries and, as such, they are exempt from the requirements of
the Act relating to the audit of individual financial statements,
or preparation of individual financial statements, as appropriate,
for this financial year.
Name
|
Company
number
|
Outstanding
liabilities
£'000
|
Centaur Communications
Limited
|
01595235
|
24,696
|
Econsultancy.com
Limited
|
04047149
|
201
|
Market Makers Incorporated
Limited1
|
05063707
|
-
|
TheLawyer.com Limited
|
11491880
|
3,027
|
Xeim Limited
|
05243851
|
8,480
|
1 Market Makers Incorporated Limited
was liquidated on 14 January 2024.
See note 13 for changes to
subsidiary holdings during the year.
30 Events after the reporting date
No material events have occurred
after the reporting date.
FIVE YEAR RECORD (UNAUDITED)
|
2019*
|
2020*
|
2021*
|
Re-presented2
2022
|
2023
|
Revenue (£m)
|
39.6
|
32.4
|
39.1
|
38.4
|
37.3
|
|
|
|
|
|
|
Operating (loss) / profit
(£m)
|
(7.8)
|
(2.3)
|
1.6
|
3.5
|
6.1
|
|
|
|
|
|
|
Adjusted operating (loss) / profit
(£m)
|
(1.2)
|
-
|
3.2
|
4.9
|
7.6
|
|
|
|
|
|
|
Adjusted operating (loss) / profit
margin
|
(3%)
|
-
|
8%
|
13%
|
20%
|
|
|
|
|
|
|
(Loss) / profit before tax
(£m)
|
(8.1)
|
(2.6)
|
1.4
|
3.5
|
6.1
|
|
|
|
|
|
|
Adjusted (loss) / profit before
tax (£m)
|
(1.5)
|
(0.3)
|
3.0
|
4.9
|
7.6
|
|
|
|
|
|
|
Adjusted diluted EPS
(pence)
|
0.3
|
0.3
|
1.9
|
2.5
|
4.2
|
|
|
|
|
|
|
Ordinary dividend per share
(pence)
|
1.5
|
0.5
|
1.0
|
1.1
|
1.8
|
|
|
|
|
|
|
Special dividend per share
(pence)
|
2.0
|
-
|
-
|
5.0
|
-
|
|
|
|
|
|
|
Net operating cash flow
(£m)
|
4.7
|
2.1
|
9.5
|
8.4
|
5.8
|
|
|
|
|
|
|
Average permanent headcount
(FTE)
|
317
|
282
|
264
|
237
|
233
|
|
|
|
|
|
|
Revenue per head
(£'000)
|
125
|
115
|
148
|
162
|
160
|
Revenue from continuing operations by type
|
2019*
£m
|
2020*
£m
|
2021*
£m
|
Re-presented2
2022
£m
|
2023
£m
|
Premium Content
|
14.4
|
13.2
|
12.9
|
14.7
|
15.2
|
Training and Advisory
|
7.6
|
8.5
|
12.6
|
14.4
|
14.8
|
Marketing Services
|
4.3
|
2.9
|
3.3
|
-
|
-
|
Events
|
6.4
|
2.5
|
3.8
|
4.6
|
3.9
|
Marketing Solutions
|
4.6
|
4.2
|
5.0
|
3.5
|
2.3
|
Recruitment Advertising
|
2.3
|
1.1
|
1.5
|
1.2
|
1.1
|
|
39.6
|
32.4
|
39.1
|
38.4
|
37.3
|
Other
|
2019*
£m
|
2020*
£m
|
2021*
£m
|
Re-presented2
2022
£m
|
2023
£m
|
Goodwill and other intangible
assets
|
61.2
|
46.1
|
44.2
|
43.8
|
44.7
|
Other assets and
liabilities
|
(9.4)
|
(7.2)
|
(10.2)
|
(11.0)
|
(9.1)
|
Net assets before net
cash
|
51.8
|
38.9
|
34.0
|
32.8
|
35.6
|
Net cash
|
9.3
|
8.3
|
13.1
|
16.0
|
9.5
|
Total equity
|
61.1
|
47.2
|
47.1
|
48.8
|
45.1
|
2 See note 1(a) for description of the prior year
re-presentation.
* 2019 - 2021 have not been
re-presented with regards to discontinued operations relating to
the closure of the Really B2B and Design Week brands in 2023. 2022
has been re-presented for discontinued operations in line with the
comparatives disclosed in this financial information.
DIRECTORS, ADVISERS AND OTHER CORPORATE
INFORMATION
Company registration number
04948078
Incorporated / domiciled in
England and Wales
Registered office
10 York Road
London
SE1 7ND
United Kingdom
Directors
Colin Jones (Chair)
Swagatam Mukerji (Chief Executive Officer)
Simon Longfield (Chief Financial Officer)
William Eccleshare
Carol Hosey
Leslie-Ann Reed
Richard Staveley
Company Secretary
Helen Silver
Independent Auditor
Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
Registrars
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
External Lawyers
Dechert LLP
160 Queen Victoria Street
London
EC4V 4QQ
Brokers
Investec Bank plc
Singer Capital Markets