TIDMMONY
RNS Number : 0530G
Moneysupermarket.com Group PLC
22 July 2021
22 July 2021
Moneysupermarket.com Group PLC interim results for the six
months ended 30 June 2021
Strategic execution on track amid tough market conditions
6 months ended 2021 2020 Growth %
30 June
Group revenue GBP162.3m GBP183.2m (11)
------------ ----------------- ---------
Adjusted EBITDA
* GBP51.3m GBP62.8m (18)
------------ ----------------- ---------
Profit after tax GBP28.0m GBP40.6m (31)
------------ ----------------- ---------
Adjusted basic
EPS * 6.1p 7.9p (23)
------------ ----------------- ---------
Basic EPS 5.2p 7.6p (31)
------------ ----------------- ---------
Operating cashflow GBP35.1m GBP41.7m (16)
------------ ----------------- ---------
Net cash/(debt)
* GBP8.8m GBP7.5m 17
------------ ----------------- ---------
Interim dividend 3.1p 3.1p -
------------ ----------------- ---------
-- Strategy implementation on track with good progress made in
attracting customers more efficiently and improving our data
infrastructure
-- Revenue fell 11% due to Covid-19 market impacts and challenging energy market dynamics
-- Gross margin was up c.3%pts driven by more efficient customer
acquisition and improved conversion in Money
-- Adjusted EBITDA fell 18%, with operating costs in line with guidance
-- Strong cash conversion: GBP35.1m operating cashflow with net cash GBP8.8m at 30 June 2021
-- Interim dividend maintained at 3.1p, reflecting robust cash
generation and confidence in the business
Peter Duffy, CEO of Moneysupermarket Group, said:
"I'm delighted that we have again helped millions of UK
households save on their bills, while providing valuable financial
information and tools through these uncertain times.
Strategic improvements to the business are progressing well,
delivering good margin gains.
Our markets are still on the road to recovery ahead of what
should be more normal trading conditions in 2022. Cash generation
remains strong, with the dividend reflecting our confidence in the
business and opportunities ahead."
Outlook
Our markets are recovering at different rates. In Insurance our
channels, excluding travel, have returned to more normal trading
conditions. We anticipate continuing gradual improvement in Money
this year. The expected increase in the energy price cap in October
should improve customer savings levels, assuming wholesale energy
prices decline. On this basis the Board is confident of delivering
market expectations for the year.
*Notes:
Adjusted EBITDA is operating profit before depreciation,
amortisation and impairment and adjusted for other non-underlying
costs as detailed on page 9. This is consistent with how business
performance is measured internally.
Adjusted basic earnings per ordinary share is profit before tax
adjusted for acquisition related intangible assets and other
non-underlying costs as described on page 9, divided by the number
of weighted average shares. A tax rate of 19% (2020:19%) has been
applied to calculate adjusted EPS.
Net cash/(debt) is cash and cash equivalents less borrowings and
does not include deferred consideration or lease liabilities.
Market expectations of adjusted EBITDA for 2021 from the analyst
consensus on our investor website are in a range of
GBP96.6m to GBP117.6m, with an average of GBP108.1m.
Quarter 2 trading
Revenue for the 3 months Revenue for the 6 months
ended 30 June 2021 ended 30 June 2021
GBPm Growth % GBPm Growth %
---------- ----------- -------------
Insurance 39.5 5 80.5 (10)
Money 17.2 43 35.3 (3)
Home Services 19.5 (26) 45.5 (14)
Travel 0.6 155 1.0 (77)
Total 76.8 1 162.3 (11)
---------- -------------- ----------- -------------
Note: we have changed our segments in line with changes in our
organisational structure implemented in the half. Decision Tech
(B2B and B2C) is now included within Home Services and Travel is
revenue from TravelSupermarket. 2020 comparatives have been
restated on the same basis.
Revenue for the quarter increased 1% year-on-year, with recovery
in Insurance and Money (versus a heavily impacted Q2 2020) offset
by Home Services, where market conditions deteriorated.
-- Car insurance returned to year-on-year growth, although from
June we started to lap the strong prior year market growth that
continued into Q4. Travel insurance revenue remained negligible
given ongoing restrictions.
-- Money continued to benefit from gradually improving
conversion in cards and loans.
-- In Home Services, energy revenue was weaker. The energy price
cap increase in April was insufficient to offset sharply rising
wholesale prices. As a result, across the market, providers had few
attractive tariffs available and customer savings levels were
low.
-- TravelSupermarket revenue has yet to recover given ongoing
travel restrictions.
Results presentation
A presentation for investors and analysts will be available from
8am at
http://corporate.moneysupermarket.com/Investors/results-centre . A
Q&A session will be held at 9.30am with Peter Duffy (CEO) and
Scilla Grimble (CFO). This session can be accessed via
https://edge.media-server.com/mmc/p/4e5qwoub
For further information, contact:
Scilla Grimble, Chief Financial Officer Scilla.Grimble@moneysupermarket.com / 0203 826 4667
Ian Gibson, Strategy & IR Director Ian.Gibson@moneysupermarket.com / 07974 197742
William Clutterbuck, Maitland AMO wclutterbuck@maitland.co.uk / 07785 292617
Cautionary note regarding forward looking statements
This announcement includes statements that are forward looking
in nature. Forward looking statements involve known and unknown
risks, assumptions, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by such forward looking
statements. Except as required by the Listing Rules, Disclosure and
Transparency Rules and applicable law, the company undertakes no
obligation to update, revise or change any forward-looking
statements to reflect events or developments occurring on or after
the date such statements are published.
Business review
We have made good progress executing our strategy, with
encouraging results in customer acquisition efficiency and
improving our marketing and data platforms.
MoneySavingExpert ("MSE") updated the site's visual identity and
navigation, making it even easier to use. MSE continued its
successful consumer campaigns, for example calling for the
regulation of Buy Now, Pay Later products, which was accepted by
the Woolard Review and subsequently the Treasury. It continues to
be a highly trusted and valued site - YouGov again rated MSE the
most recommended brand in the UK, ahead of over 1,600 brands in
more than forty categories.
MoneySuperMarket ("MSM") saw 10.2m active users in the half and
helped consumers save GBP0.8bn on their household bills, despite
the reduced savings levels available in energy and car
insurance.
The Group joined other leading UK tech companies in founding the
Tech Zero taskforce in March and we announced our commitment to be
net zero by 2030. We remain "Beyond Carbon Neutral", offsetting
150% of our carbon emissions through verified carbon offset
projects. Our partnership with The Prince's Trust is ongoing and we
continue to support local charities with volunteering and
fundraising programmes.
We continued to support our colleagues to work from home with
online collaborative tools, learning events and wellbeing
initiatives. We also maintained our focus on Diversity and
Inclusion, with a programme that included leadership training, a
diversity mentoring scheme and various colleague-led awareness
activities .
Strategic progress
-- Efficient acquisition
We aim to attract consumers to our sites in the most
cost-effective way. This means optimising our paid search ("PPC"),
search engine optimisation ("SEO"), and above-the-line
marketing.
By the end of the half we had transitioned all MSM channels to
Google SA360, a leading PPC bidding platform. We delivered
significant gross margin improvements, especially in Insurance, as
we increased our use of data to bid more effectively. We will
continue to refine and optimise our bidding strategies as we use
the full functionality of the new bidding platform together with
our enhanced data capabilities.
SEO brings large volumes of free search traffic to our site. We
have migrated most of the MSM site to an updated content platform
that enables faster page loading, leaner and more efficient pages,
and other technical advantages. This has helped us to weather the
recent Google Core Web Vitals algorithm update without significant
impact to our SEO positions.
We continue to review all aspects of efficient acquisition
including customer incentives. We tested removing our life
insurance incentive during the half and in May launched a trial
incentive giving every customer that purchases car insurance
through MSM up to GBP150 of vouchers towards car ownership
expenses. These vouchers can be redeemed through the year and are
accessed via the MSM dashboard, providing further opportunities to
engage with our customers. Although we are at an early stage,
initial results are promising.
Above-the-line marketing is an important driver of traffic to
our website. We can sharpen the MSM brand positioning and more
directly show consumers the many ways they can save on our site. In
the second half we will launch a new creative campaign to this
effect.
-- Retain and grow
We want to retain customers and help them switch more of their
household bills. We do this through our monitoring products,
reminders of policy end and other key dates, and by continuing to
promote other ways they can save with us.
Customer engagement is a key element of this. We have now
integrated the Braze customer engagement platform, bringing
enhanced capability to the Group. As well as enabling efficient,
co-ordinated and data-driven marketing campaigns across the app,
web and email, Braze interfaces with our data infrastructure to
deliver tailored, relevant messages to our users. We have
transitioned over a third of our email campaigns and sent over 50
million emails using the platform already. We will also add end of
policy / tariff renewal emails for several new channels by the end
of the year.
Pick Me A Tariff every year, MSE's innovative energy
proposition, grew well and is taking an increasing proportion of
MSE energy switches. It has over 140k users subscribed, with early
adopters now coming up to their first renewal. An additional 130k
users have switched via the Pick Me A Tariff mechanism since
launch, representing a future upsell opportunity into the "every
year" proposition.
-- Expanding our offer
In May we announced that TravelSupermarket will combine with
Icelolly.com to create a standalone holiday comparison business.
The combination will benefit customers of both brands with a richer
and more diversified offer as travel and holiday markets recover.
As well as unlocking commercial benefits, the creation of a
standalone entity under a travel-focused management team will give
us greater flexibility to maximise shareholder returns. We expect
to receive a decision on regulatory clearance towards the end of
summer.
Our mortgage proposition advanced further with the launch of a
third decision-in-principle re-mortgage journey, this time with
Natwest. This means we have a decision in principle journey with
providers that represent around 35% of the lending market.
-- Supporting infrastructure and capabilities
Data and how we use it is integral to our strategy. The
modernisation of our data infrastructure and capabilities will
shorten and simplify internal processes as well as enabling greater
analysis and testing to improve our offer. It will also benefit
users, for example through recommending more intelligent 'next best
actions' and streamlining subsequent enquiries.
In the half we made strong progress, moving towards Google Cloud
Platform ("GCP") as our core data platform. GCP will allow us to
store all of our data in a single location, and brings with it
strong analytical tools to interrogate that data. In the second
half we will surface more of our data, enabling marketing,
commercial and product improvements based on analytical
insight.
FCA General Insurance review
The FCA has finalised its regulations on general insurance
pricing, which are in line with expectations. They put in place
regulation against 'price walking' in car and home insurance but
also make it easier for consumers to opt out of policy
auto-renewal. The regulations come into effect in January 2022.
As a group we have adapted well to all the regulatory changes we
have seen over the last several years and are confident that these
regulations represent opportunity for us as much as change. We
believe our markets should be relatively unaffected by these
reforms - using a price comparison website ("PCW") to be confident
of receiving the best price is an ingrained behaviour for many
consumers. According to surveys run on MSM, 60% of our enquirers
for car and home insurance use a PCW every year.
The 'price-walking' reforms will provide some protection to
customers, however, as has proven to be the case with the energy
price cap, it often remains in a customer's interest to switch.
The auto-renewal changes will help customers by relieving a real
pain point from today's customer journey and make it easier for
them to switch and save. This should also improve conversion on our
sites.
It will become clearer over time how insurers adapt their
pricing strategies but we do expect the reforms to cause price
changes in the near term. Such price changes will drive enquiry
volumes in 2022.
Key performance indicators
The Board reviews key performance indicators ("KPIs") to assess
the performance of the business against the Group's strategy. We
measure five key strategic KPIs: estimated customer savings, net
promoter score, active users, revenue per active user and marketing
margin.
30 June 30 June
2021 2020
Estimated customer savings GBP0.8bn GBP1.1bn
Net promoter score 71 74
Active users 10.2m 12.4m
Revenue per active user GBP17.00 GBP16.29
Marketing margin 61% 58%
--------------------------- -------- --------
Estimated customer savings: This is calculated by multiplying
sales volume against the average saving per product for core
channels, the balance of the calculation is a company
estimation.
Net promoter score: The 12 monthly rolling average NPS (1 Jul
2020 - 30 Jun 2021 inclusive) measured by YouGov Brand Index
service Recommend Score weighted by revenue for MoneySuperMarket
and MoneySavingExpert to create a Group-wide NPS .
Active users: The number of unique accounts running enquiries in
our core seven channels for MoneySuperMarket (car insurance, home
insurance, life insurance, travel insurance, credit cards, loans
and energy) in the last 12-month period.
Revenue per active user: The revenue for the core seven
MoneySuperMarket channels divided by the number of active users for
the last 12 months.
Marketing margin: The inverse relationship between revenue and
total marketing spend represented as a percentage. Total marketing
spend includes the direct cost of sales plus distribution
expenses.
We estimate that MoneySuperMarket customers saved GBP0.8bn in
the first six months of 2021. The year-on-year decline reflects
market factors including significantly lower energy savings, lower
car premiums and the Covid-19 restrictions on travel.
Group NPS remained healthy at 71 demonstrating that trust and
satisfaction in our brands remain high. The decline over the last
year reflects a trend experienced across our PCW peer group. MSE
has for the second year running been named the most recommended UK
brand by YouGov.
Active user numbers fell to 10.2m, driven by negligible travel
insurance enquiries (normally a high volume channel) and a
reduction in car enquiry volumes.
Revenue per active user increased GBP0.71 to GBP17.00 reflecting
increased conversion in car (associated with falling premiums and
lower enquiries) and a mix away from travel insurance.
The marketing margin increase reflects the gross margin
improvements described below.
Financial review
Group revenue decreased 11% to GBP162.3m (2020: GBP183.2m), with
profit after tax declining 31% to GBP28.0m (2020: GBP40.6m). When
reviewing performance, the Board reviews several adjusted measures,
including adjusted EBITDA which decreased 18% to GBP51.3m (2020:
GBP62.8m) and adjusted EPS which decreased 23% to 6.1p (2020:
7.9p), as shown in the table below.
Extract from the Consolidated Statement of Comprehensive
Income
for the six months ended 30 June
2021 2020 Growth
GBPm GBPm %
------------------------------ ------- ----------------- ------
Revenue 162.3 183.2 (11)
Cost of sales (48.4) (60.7) (20)
------------------------------ ------- ----------------- ------
Gross profit 113.9 122.5 (7)
Operating costs (75.1) (69.8) 8
------------------------------ ------- ----------------- ------
Operating profit 38.8 52.7 (26)
Amortisation and depreciation 11.1 10.1 10
EBITDA 49.9 62.8 (21)
------------------------------ ------- ----------------- ------
Reconciliation to adjusted EBITDA:
EBITDA 49.9 62.8 (21)
Deal fees and associated costs 1.4 - n.m
Adjusted EBITDA 51.3 62.8 (18)
------------------------------------ ---- ---- ----
Adjusted earnings per share**:
* basic (p) 6.1 7.9 (23)
* diluted (p) 6.1 7.9 (23)
------------------------------------ ---- ---- ----
**A reconciliation to adjusted EPS is included within note
5.
Alternative performance measures
We use a number of alternative (non-Generally Accepted
Accounting Practice ("non-GAAP")) financial measures which are not
defined within IFRS. The Board reviews adjusted EBITDA and adjusted
EPS alongside GAAP measures when reviewing the performance of the
Group. Executive management bonus targets include an adjusted
EBITDA measure and the long-term incentive plans include an
adjusted basic EPS measure.
The adjustments are separately disclosed and are usually items
that are non-underlying to trading activities and that are
significant in size. Alternative performance measures used within
these statements are accompanied with a reference to the relevant
GAAP measure and the adjustments made. These measures should be
considered alongside the IFRS measures.
Revenue
for the six months ended 30 June
2021 2020 Growth
GBPm GBPm %
-------------- ----- ----- ------
Insurance 80.5 89.4 (10)
Money 35.3 36.5 (3)
Home Services 45.5 53.0 (14)
Travel 1.0 4.3 (77)
--------------- ----- ----- ------
Total 162.3 183.2 (11)
--------------- ----- ----- ------
Note: we have changed our segments in line with changes in our
organisational structure implemented in the half. Decision Tech
(B2B and B2C) is now included within Home Services and Travel is
revenue from TravelSupermarket. 2020 comparatives have been
restated on the same basis.
Insurance
Insurance revenue decreased 10% or 3% excluding travel insurance
(for which demand remained negligible).
Decreasing car insurance premiums drove fewer enquiries but
strong conversion. The channel returned to year on year growth in
Q2. The home insurance market is subdued, with reductions in
renewal premiums limiting enquiry growth. Life insurance revenue
was down year on year, lapping strong 2020 comparables in Q1.
Although car premiums remain significantly lower year on year,
we have now started to see month on month growth. However, we are
now lapping last year's release of pent-up demand which drove good
market growth in H2.
Money
Money revenue fell 3 %. The start of the year was impacted by
lower year-on-year search demand for credit products, in particular
the lack of "seasonal peak" in credit card demand. In recent weeks,
market demand has been at 2020 levels, still some way below
2019.
Conversion improved in the half as lending criteria continued to
gradually loosen. We expect this to continue in the second half. We
have seen some signs of promotional products returning within
banking.
Home Services
Home Services revenue decreased 14% driven by weaker trading in
energy in particular. In the half energy was around 50% of Home
Services revenue.
MSE's distinctive energy auto-switch proposition, Pick Me A
Tariff every year, saw good growth. The service now has over 140k
subscribers, and conversion remains extremely strong. A further
130k users have switched via the Pick Me A Tariff mechanism; these
represent an upsell opportunity into the "every year"
proposition.
Steep wholesale energy price rises meant there were few
attractive tariffs in the market, and lower customer savings as a
result - despite the April price cap increase. With savings at less
than half the level of the prior year, we saw lower conversion on
our sites. We understand this to reflect a trend across the wider
market.
Home comms performance lapped the strong Q2 trading seen last
year during the first lockdown when consumer demand for broadband
increased substantially.
B2B Home Services continued to see double-digit growth in the
half.
Given the rising wholesale energy prices we expect a substantial
rise in the price cap (announced in August, effective from
October). This should increase energy saving levels, assuming that
wholesale prices decline.
Travel
Demand for TravelSupermarket was heavily affected by travel
restrictions, leading to negligible revenue in the half.
Gross profit
Gross margin increased from 67% to 70% year on year.
Approximately two thirds of this increase was due to
improvements in our customer acquisition strategies including the
more granular use of data to optimise PPC bidding and the testing
of customer incentives. The remainder of the increase was mainly
due to improved borrowing performance as conversion within Money
grew.
Channel mix was broadly neutral with the reduction in travel
insurance and MSE energy (relatively lower margin channels)
offsetting growth in Home Services B2B (where margins are
structurally significantly lower).
We continued to see a shift to mobile devices, where margins are
lower than on desktop. Mobile devices accounted for 59.8% of
visitors to MSM in the half (2020: 56.9%). However, since almost
all of this shift came from tablet, with desktop mix stable year on
year, there was no significant impact to gross margin.
Operating costs
for the six months ended 30 June
2021 2020 Growth
GBPm GBPm %
------------------------------------------------------ ---- ---- ------
Distribution expenses 14.6 16.9 (13)
Administrative expenses 60.5 52.9 14
------------------------------------------------------- ---- ---- ------
Operating costs 75.1 69.8 8
------------------------------------------------------- ---- ---- ------
Within administration expenses
Amortisation of software 7.4 6.7 11
Amortisation of acquisition related intangible assets 1.5 1.2 20
Depreciation 2.2 2.2 1
------------------------------------------------------- ---- ---- ------
Distribution expenses reduced in the half due to a planned
reduction in media spend. Amortisation of software increased as
some existing data infrastructure assets will have a shorter useful
life given the transition to GCP as part of the change to our data
strategy. These assets have therefore seen an accelerated charge in
the period, as guided previously.
Other administration expenses have risen with the return of
employee incentive accruals, the consolidation of CYTI costs (from
January 2021) and lower capitalisation of internal resource. We
continue to expect full-year operating costs (excluding
depreciation and amortisation) slightly above 2019 (i.e., pre
Covid-19) levels.
Adjusting items*
for the six months ended 30 June
2021 2020 Growth
GBPm GBPm %
------------------------------------------------------ ---- ---- ------
Amortisation of acquisition related intangible assets 1.5 1.2 20
Deal fees and associated costs 1.4 - n.m
Change in fair value of investment 0.7 - n.m
3.6 1.2 n.m
------------------------------------------------------ ---- ---- ------
* Amortisation of acquisition related intangible assets and the
change in fair value of investment are not included in EBITDA and
therefore are only adjusting items in the adjusted EPS calculation.
Deal fees and associated costs are adjusting items in both the
adjusted EBTIDA and adjusted EPS calculations.
The acquisitions of MSE in 2012, Decision Tech in 2018 and CYTI
in 2021 gave rise to intangible assets (excluding goodwill) of
GBP12.9m, GBP8.7m and GBP3.4m respectively. These are each being
amortised over a period of 3-10 years and the charge increased to
GBP1.5m (2020: GBP1.2m) due to the acquisition of CYTI this
year.
The acquisition of CYTI required a revaluation at acquisition
date of the Group's existing 28% holding which was previously
equity-accounted for. The investment's valuation was previously
determined as its value in use from the Group's perspective and
therefore no adjustment was made to reflect the concentration of
CYTI's revenues with the Group. However, the acquisition accounting
under IFRS 3 Business combinations requires us to reflect the fair
value for CYTI from an external (market participant) view. A market
participant would discount CYTI's valuation for this revenue
concentration risk; this resulted in a GBP0.7m decrease in the fair
value of the 28% investment.
The Group incurred GBP1.4m of one-off deal fees and associated
costs relating to the planned combination of TravelSupermarket and
IceLolly.com; these costs have been treated as an adjusting
item.
Dividends
The Board has recommended an interim dividend of 3.1 pence per
share (2020: 3.1p). This reflects the ongoing strong cash
generation of the business, strong balance sheet and the Board's
confidence in the future prospects of the Group.
The interim dividend will be paid on 3 September 2021 to
shareholders on the register on 30 July 2021.
Tax
The effective tax rate of 24.4% (2020: 21.0%) is above the UK
standard rate of 19.0% (2020: 19.0%). This is due to a charge
arising from the revaluation of deferred tax liabilities following
the Government announcement that the standard rate of corporation
tax will increase to 25% in April 2023.
Earnings per share
Basic reported earnings per share for the six months ended 30
June 2021 was 5.2p (2020: 7.6p). Adjusted basic earnings per
ordinary share decreased 23% to 6.1p per share (2020: 7.9p). This
represents a larger decrease than at EBITDA level, due primarily to
depreciation and amortisation charges increasing year on year .
The adjusted earnings per ordinary share is based on profit
before tax before the adjusting items detailed above. A tax rate of
19.0% (2020: 19.0%) is applied to calculate adjusted profit after
tax.
Cashflow and balance sheet
The Group generated robust operating cash flows of GBP35.1m
(2020: GBP41.7m) and finished the period with a net cash position
of GBP8.8m (2020: GBP7.5m).
The working capital outflow of GBP6.4m was largely driven by
lower payables. This relates to the payment in the half of c.GBP8m
of VAT which was deferred from last year under the Government's
automatic VAT payment deferral scheme. This was partly offset by
the return of employee incentive accruals which will not be paid in
cash until 2022. Trade and other receivables also increased
slightly due to the timing of marketing prepayments.
The Group paid GBP0.7m in cash in respect of the acquisition of
CYTI (see note below) and received GBP2.1m for the disposal of our
investment in open banking software provider, TrueLayer.
The Group has a revolving credit facility ("RCF") of GBP90m
which is available until September 2023. The Group also has an
accordion option to apply for up to GBP100m of additional funds
during the term of the RCF. The RCF was undrawn at 30 June
2021.
Capital expenditure
Our technology capital expenditure was GBP3.5m (2020: GBP4.4m),
due to lower capitalisation of internal resource. For the year, we
expect technology capex to be in the region of GBP10m and the
technology amortisation charge to be in the region of GBP15m.
The amortisation charge for 2021 includes accelerated
amortisation of several data infrastructure assets. This is due to
a transition to Google Cloud Platform in 2021 as we enhance our
infrastructure to make data more accessible and allow faster, more
efficient and insightful analysis and decision making.
CYTI investment
In March 2020, the Group acquired a 28% shareholding in CYTI
(for GBP2.8m) and took a call option to purchase the remainder of
the business. The investment forged closer links with an important
partner in our travel, life and pet insurance channels and gave the
Group the option for more control over these key channels. In
January 2021, the Group acquired the remaining share capital of
CYTI for a cash amount of GBP1. 1m, GBP0.7m having been paid and
GBP0.4m being contingent (see note 12 to the financial statements
below for more detail).
Directors' responsibility statement in respect of the
half-yearly financial report
Each of the directors, whose names and functions are listed
below, confirms that, to the best of his or her knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted
for use in the UK;
-- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact
on the condensed set of financial statements; and a description of
the principal risks and uncertainties for the remaining six months
of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have
materially affected the financial position or performance of the
Group during that period; and any changes in the related party
transactions described in the last annual report that could do
so.
Name Function
Robin Freestone Chair
Peter Duffy Chief Executive Officer
Scilla Grimble Chief Financial Officer
Sally James Senior Independent Non-Executive Director
James Bilefield Independent Non-Executive Director
Caroline Britton Independent Non-Executive Director
Supriya Uchil Independent Non-Executive Director
Sarah Warby Independent Non-Executive Director
Consolidated statement of comprehensive income
for the six months ended 30 June 2021 and 30 June 2020
Note 2021 2020
GBPm GBPm
Revenue 2 162.3 183.2
Cost of sales (48.4) (60.7)
----------- ---------
Gross profit 113.9 122.5
Distribution expenses (14.6) (16.9)
Administrative expenses (60.5) (52.9)
Operating profit 38.8 52.7
Change in fair value of financial (0.7) -
instruments
Net finance costs 3 (0.8) (1.0)
Share of loss of joint venture 8 (0.4) (0.3)
Profit on disposal of asset 0.1 -
Profit before taxation 37.0 51.4
Taxation 4 (9.0) (10.8)
----------- ---------
Profit for the period 28.0 40.6
Other comprehensive income 9 0.7 2.6
----------- ---------
Total comprehensive income for
the period 28.7 43.2
=========== =========
Earnings per share:
Basic earnings per ordinary share
(pence) 5 5.2 7.6
Diluted earnings per ordinary
share (pence) 5 5.2 7.6
Consolidated statement of financial position
as at 30 June 2021, 31 December 2020 and 30 June 2020
30 June 31 December 30 June
Note 2021 2020 2020
GBPm GBPm GBPm
Assets
Non-current assets
Property, plant and
equipment 41.0 42.6 45.0
Intangible assets 7 171.5 170.8 174.4
Equity accounted investments 8 0.1 2.6 3.0
Other investments 9 6.7 8.2 8.2
Total non-current assets 219.3 224.2 230.6
----------------------- ------------------- -----------------
Current assets
Derivative financial - 3.5 -
assets
Trade and other receivables 44.2 45.1 50.3
Prepayments 11.5 8.8 8.7
Cash and cash equivalents 8.8 23.6 12.5
Total current assets 64.5 81.0 71.5
Total assets 283.8 305.2 302.1
======================= =================== =================
Liabilities
Non-current liabilities
Other payables 29.8 30.7 34.8
Deferred tax liabilities 12.8 11.4 11.0
----------------------- ------------------- -----------------
Total non-current liabilities 42.6 42.1 45.8
----------------------- ------------------- -----------------
Current liabilities
Borrowings - - 5.0
Trade and other payables 50.5 54.6 54.7
Current tax liabilities (1.0) - -
Total current liabilities 49.5 54.6 59.7
----------------------- ------------------- -----------------
Total liabilities 92.1 96.7 105.5
----------------------- ------------------- -----------------
Equity
Share capital 0.1 0.1 0.1
Share premium 205.3 205.0 204.9
Reserve for own shares (2.2) (2.8) (3.2)
Retained earnings (75.6) (57.2) (68.6)
Other reserves 64.1 63.4 63.4
----------------------- ------------------- -----------------
Total equity 191.7 208.5 196.6
Total equity and liabilities 283.8 305.2 302.1
Consolidated statement of changes in equity
for the period ended 30 June 2021, 31 December 2020 and 30 June
2020
Reserve
Share Share for own Retained Other
capital premium shares earnings reserves Total
GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2020 0.1 204.7 (2.9) (63.4) 60.8 199.3
---- ------ ------ ------- ----- -------
Profit for the period - - - 40.6 - 40.6
Other comprehensive income - - - - 2.6 2.6
---- ------ ------ ------- ----- -------
Total comprehensive income - - - 40.6 2.6 43.2
Purchase of shares by
employee trusts - - (0.3) - - (0.3)
New shares issued 0.0 0.2 - - - 0.2
Equity dividends paid - - - (46.2) - (46.2)
Share-based payments - - - 0.4 - 0.4
---- ------ ------ ------- ----- -------
At 30 June 2020 0.1 204.9 (3.2) (68.6) 63.4 196.6
---- ------ ------ ------- ----- -------
At 1 July 2020 0.1 204.9 (3.2) (68.6) 63.4 196.6
---- ------ ------ ------- ----- -------
Profit for the period - - - 28.7 - 28.7
Other comprehensive income - - - - - -
---- ------ ------ ------- ----- -------
Total comprehensive income - - - 28.7 - 28.7
Purchase of shares by
employee trusts - - (0.6) - - (0.6)
Exercise of LTIP awards - - 1.0 (1.0) - -
New shares issued 0.0 0.1 - - - 0.1
Equity dividends paid - - - (16.6) - (16.6)
Share-based payments - - - 0.3 - 0.3
---- ------ ------ ------- ----- -------
At 31 December 2020 0.1 205.0 (2.8) (57.2) 63.4 208.5
---- ------ ------ ------- ----- -------
At 1 January 2021 0.1 205.0 (2.8) (57.2) 63.4 208.5
---- ------ ------ ------- ----- -------
Profit for the period - - - 28.0 - 28.0
Other comprehensive income - - - - 0.7 0.7
---- ------ ------ ------- ----- -------
Total comprehensive income - - - 28.0 0.7 28.7
Exercise of LTIP awards - - 0.6 (0.6) - -
New shares issued 0.0 0.3 - - - 0.3
Equity dividends paid - - - (46.2) - (46.2)
Share-based payments - - - 0.4 - 0.4
---- ------ ------ ------- ----- -------
At 30 June 2021 0.1 205.3 (2.2) (75.6) 64.1 191.7
---- ------ ------ ------- ----- -------
Consolidated statement of cash flows
for the six months ended 30 June 2021 and 30 June 2020
2021 2020
GBPm GBPm
Operating activities
Profit for the period 28.0 40.6
Adjustments to reconcile Group profit
to net cash flow from operating
activities:
Amortisation of intangible assets 8.9 7.9
Depreciation of property, plant
and equipment 2.2 2.2
Profit on disposal of assets (0.1) -
Share of loss of joint venture 0.3 0.3
Change in fair value of financial
instruments 0.7 -
Net finance costs 0.8 1.0
Equity settled share-based payment
transactions 0.4 0.4
Tax charge 9.0 10.8
Changes in trade and other receivables (1.8) (5.3)
Changes in trade and other payables (4.6) 1.3
Tax paid (8.7) (17.5)
Net cash flow from operating activities 35.1 41.7
------ --------
Investing activities
Interest received - 0.1
Acquisition of subsidiary (0.5) (1.4)
Acquisition of investments (0.4) (3.2)
Acquisition of property, plant and
equipment (0.4) (1.3)
Acquisition of intangible assets (3.5) (4.5)
Proceeds from sale of property,
plant and equipment 0.5 -
Proceeds from sale of investments 2.1 -
Net cash used in investing activities (2.2) (10.3)
------ --------
Financing activities
Dividends paid (46.2) (46.2)
Proceeds from issue of shares 0.4 0.2
Share purchases by employee trusts - (0.3)
Proceeds from borrowings 10.0 50.0
Repayment of borrowings (10.0) (45.0)
Interest paid (0.8) (0.9)
Repayment of lease liabilities (1.1) (0.9)
Net cash used in financing activities (47.7) (43.1)
Net decrease in cash and cash equivalents (14.8) (11.7)
Cash and cash equivalents at 1 January 23.6 24.2
Cash and cash equivalents at 30
June 8.8 12.5
------ --------
Notes
1. Basis of preparation
Moneysupermarket.com Group plc (the Company) is a public limited
company registered and domiciled in England and Wales and listed on
the London Stock Exchange.
The financial statements are prepared on the historical cost
basis. Comparative figures presented in the financial statements
represent the six months ended 30 June 2020.
The financial statements have been prepared on the same basis as
those for the year ended 31 December 2020.
Statement of compliance
This condensed set of consolidated interim financial statements
has been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted for use in the UK. The annual financial
statements of the group for the year ended 31 December 2021 will be
prepared in accordance with UK-adopted international accounting
standards. As required by the Disclosure Guidance and Transparency
Rules of the Financial Conduct Authority, the condensed set of
financial statements has been prepared applying the accounting
policies and presentation that were applied in the preparation of
the company's published consolidated financial statements for the
year ended 31 December 2020 which were prepared in accordance with
International Financial Reporting Standards (IFRSs) adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union and in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006..
These condensed consolidated interim financial statements were
approved by the board of directors on 21 July 2021.
Going concern
The directors have prepared the condensed set of consolidated
interim financial statements on a going concern basis for the
following reasons. The Group is profitable, cash generative and has
no external debt other than the revolving credit facility, 'RCF'
(GBPnil drawn as at 30 June 2021 and GBPnil drawn down post period
end, out of the GBP90m available). The operations of the business
have been impacted by Covid-19 and whilst revenues have decreased
since lockdown commenced compared to the same period in 2020, the
Group remains profitable, cash generative and compliant with the
covenants of the RCF.
The directors have prepared cash flow forecasts for the Group,
including its cash position, for a period of at least 12 months
from the date of approval of this condensed set of consolidated
interim financial statements. The directors have also considered
the effect of Covid-19 upon the Group's business, financial
position, and liquidity in severe, but plausible, downside
scenarios, using a reverse stress test, and scenario analysis
techniques. These scenarios modelled included considering whether
the potential impacts of the lockdown restrictions and impact on
the wider economy could plausibly affect the liquidity or covenant
compliance in the going concern period by assessing the degree of
downside assumption that, individually and collectively, could
result in a liquidity issue, taking into account the Group's
current and projected cash and facilities (a reverse stress
test).
The scenarios tested showed that the Group will be able to
operate at adequate levels of liquidity for a period of at least 12
months from the date of approval of this condensed set of
consolidated interim financial statements.
The directors, therefore, consider that the Group has adequate
resources to continue in operational existence for at least the
next 12 months and have prepared this condensed set of consolidated
interim financial statements on a going concern basis.
2. Segmental information
Below we report a measure of profitability at segment level that
reflects the way performance is assessed internally. The Group has
a number of teams, capabilities and infrastructure which are used
to support all verticals e.g. data warehousing and brand marketing.
These are shared costs of the Group rather than "central costs". We
have concluded there is no direct or accurate basis for allocating
these costs to the operating segments and therefore they are
disclosed separately, which is how they are presented to the Chief
Operating Decision Maker.
The Group's reportable segments are Insurance, Money, Home
Services and Travel. These segments represent individual trading
verticals which are reported separately for revenue and directly
attributable expenses. Home Services now includes the B2C and B2B
revenues and directly attributable expenses from Decision Tech
brands, in line with the organisational changes implemented in the
half and comparatives for Home Services have been restated on the
same basis. F ollowing the acquisition of CYTI, the costs and
revenues associated with this business are now included in the
Insurance segment. Travel is revenue and directly attributable
expenses from TravelSupermarket.
Costs below EBITDA and net assets are only reviewed by the Chief
Operating Decision Maker at a consolidated level and therefore have
not been allocated between segments. All assets held by the Group
are located in the UK.
The following summary describes how revenue is generated for
each segment.
Segment Revenue products and services
------------------------------- ---------------------------------------------------------------
Insurance Customer completes transaction for insurance policy
on any of the following: provider website, our
website or a telephone call.
Money Customer completes transaction for money products
such as credit cards, loans and mortgages on provider
website.
Home Services Customer completes transaction for home services
products such as energy and broadband on provider
website.
Travel Customer completes transaction for travel products
on provider website or our website.
------------------------------- ---------------------------------------------------------------
Shared
Insurance Money Home Services Travel costs Total
Segment GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- -------------- --------- --------------- --------- ------- --------------
Period ended 30 June
2021
Revenue 80.5 35.3 45.5 1.0 - 162.3
Directly attributable
expenses (33.2) (11.9) (24.2) (2.1) (39.6) (111.0)
-------------------------------- -------------- --------- --------------- --------- ------- --------------
Adj. EBITDA contribution 47.3 23.4 21.3 (1.1) (39.6) 51.3
Adj. EBITDA contribution
margin 59% 66% 47% (110%) - 32%
Depreciation and amortisation (11.1)
Deal fees and associated
costs (1.4)
Change in fair value
of financial instruments (0.7)
Net finance costs (0.8)
Profit on disposal
of assets 0.1
Share of loss of joint
venture (0.4)
-------------------------------- -------------- --------- --------------- --------- ------- --------------
Profit before tax 37.0
Taxation (9.0)
-------------------------------- -------------- --------- --------------- --------- ------- --------------
Profit for the period 28.0
-------------------------------- -------------- --------- --------------- --------- ------- --------------
Shared
Insurance Money Home Services Travel costs Total
Segment GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- -------------- --------- -------------- ------- ------- ---------
Period ended 30 June
2020
Revenue 89.4 36.5 53.0 4.3 - 183.2
Directly attributable
expenses (40.0) (14.0) (24.7) (3.5) (38.2) (120.4)
------------------------------- -------------- --------- -------------- ------- ------- ---------
Adj. EBITDA contribution 49.4 22.5 28.3 0.8 (38.2) 62.8
Adj. EBITDA contribution
margin 55% 62% 53% 19% - 34%
Depreciation and amortisation (10.1)
Net finance costs (1.0)
Share of loss of joint
venture (0.3)
------------------------------- -------------- --------- -------------- ------- ------- ---------
Profit before tax 51.4
Taxation (10.8)
------------------------------- -------------- --------- -------------- ------- ------- ---------
Profit for the period 40.6
------------------------------- -------------- --------- -------------- ------- ------- ---------
Adjusted EBITDA contribution margin is calculated by dividing
adjusted EBITDA contribution by revenue.
Insurance adjusted EBITDA contribution margin improved year on
year, increasing from 55% to 59% mostly as a result of efficient
acquisition based on more granular bidding and changes in customer
incentive strategy. The margin also strengthened by mixing away
from travel insurance.
Money continued to benefit from gradually improving conversion
in cards and loans as lending criteria continued to ease, resulting
in an adjusted EBITDA contribution margin increase from 62% to
66%.
Home Services adjusted EBITDA contribution margin declined from
53% to 47% due in part to a growing mix of B2B revenue (where
margins are structurally significantly lower) but also due to bad
debt costs associated with the administration of an energy partner
and higher vertical specific marketing spend.
3. Net finance costs
2021 2020
GBPm GBPm
Finance income 0.0 0.1
( 1.1
Finance costs (0.8) )
------------- ----------
Net finance costs (0.8) (1.0)
============= ==========
4. Taxation
The Group's consolidated effective tax rate for the six months
ended 30 June 2021 was 24.4% (six months ended 30 June 2020:
21.0%). The increase in rate is due to a charge arising from the
revaluation of deferred tax liabilities following the increase in
the standard rate of corporation tax to 25% in April 2023.
2021 2020
GBPm GBPm
Profit before tax 37.0 51.4
Standard rate of tax at 19% (2019:
19%) 7.0 9.8
7 .0 9.8
------ ------
Effects of:
Origination and reversal of temporary
differences - (0.2)
Expenses not deductible for tax
purposes 0.2 0.3
Adjustment due to changes in tax
rate 1 .6 0.8
Share of loss of joint venture 0.1 0.1
Change in fair value of financial 0 .1 -
instruments
------ ------
2 .0 1.0
------ ------
Tax expense for the period 9.0 10.8
====== ======
5. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or
loss for the year attributable to ordinary equity holders of the
Company, by the weighted average number of ordinary shares
outstanding during the period. The Company's own shares held by
employee trusts are excluded when calculating the weighted average
number of ordinary shares outstanding.
Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit
or loss for the year attributable to ordinary equity holders of the
Company, by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on the conversion of all
dilutive potential ordinary shares into ordinary shares.
Earnings per share
Basic and diluted earnings per share have been calculated on the
following basis:
2021 2020
GBPm GBPm
Profit after taxation attributable to ordinary
shareholders 28.0 40.6
------ -------
Basic weighted average ordinary shares in issue
(millions) 536.4 536.4
Dilutive effect of share based instruments (millions) 0.3 0.4
------ -------
Diluted weighted average ordinary shares in issue
(millions) 536.7 536.8
====== =======
Basic earnings per ordinary share (pence) 5 .2 7.6
Diluted earnings per ordinary share (pence) 5.2 7.6
Adjusted basic and diluted earnings per share have been calculated
as follows:
2021 2020
GBPm GBPm
Profit before tax 37.0 51.4
Amortisation of acquisition related intangible
assets 1.5 1.2
Deal fees and associated costs 1.4 -
Change in fair value of financial instruments 0.7 -
40.6 52.6
Estimated taxation at 19% (2020: 19%) (7.7) (10.0)
------ -------
Profit for adjusted EPS purposes 32.9 42.6
====== =======
Basic adjusted earnings per share (pence) 6.1 7.9
Diluted adjusted earnings per share (pence) 6.1 7.9
6. Dividends
2021 2020
GBPm GBPm
Equity dividends on ordinary shares:
Final dividend for 2020: 8.61 pence
per share
(2019: 8.61 pence per share) 46.2 46.2
----- -----
Proposed for approval (not recognised
as a liability as at 30 June):
Interim dividend for 2021: 3.10 pence
per share (2020: 3.10 pence per share) 16.6 16.6
===== =====
7. Intangible assets
Market Customer Customer Technology Goodwill Total
related relationships lists related
GBPm GBPm GBPm GBPm GBPm GBPm
Cost
At 1 January 2020 155.3 69.3 2.3 108.7 212.6 548.2
Additions - - - 4.4 - 4.4
At 30 June 2020 155.3 69.3 2.3 113.1 212.6 552.6
Amortisation
At 1 January 2020 146.8 69.3 2.3 77.6 74.3 370.3
Charged in period 0.8 - - 7.1 - 7.9
-------- -------------- ----------- ---------- -------- -----
At 30 June 2020 147.6 69.3 2.3 84.7 74.3 378.2
======== ============== =========== ========== ======== =====
Net book value
At 1 January 2020 8.5 - - 31.1 138.3 177.9
At 30 June 2020 7.7 - - 28.4 138.3 174.4
======== ============== =========== ========== ======== =====
Cost
At 1 January 2021 155.3 - - 101.5 212.6 469.4
Additions - - - 6.8 2.8 9.6
Disposals - - - (2.7) - (2.7)
-------- -------------- ----------- ---------- -------- -----
At 30 June 2021 155.3 - - 105.6 215.4 476.3
======== ============== =========== ========== ======== =====
Amortisation
At 1 January 2021 148.5 - - 75.8 74.3 298.6
Charged in period 0.9 - - 8.0 - 8.9
Eliminated on
disposal - - - (2.7) - (2.7)
-------- -------------- ----------- ---------- -------- -----
At 30 June 2021 149.4 - - 81.1 74.3 304.8
======== ============== =========== ========== ======== =====
Net book value
At 1 January 2021 6.8 - - 25.7 138.3 170.8
At 30 June 2021 5.9 - - 24.5 141.1 171.5
======== ============== =========== ========== ======== =====
Asset disposals in the year include assets relating to Decision
Tech with gross book value of GBP2.7m and GBPnil net book value
that are no longer in use and have therefore been retired.
8. Equity accounted investments
Podium CYTI
Solutions (Holdings)
Limited Limited
(50%) (28%) Total
GBPm GBPm GBPm
At 30 June 2020
Investment 1.0 2.8 3.8
Group share of loss brought
forward (0.5) - (0.5)
Group share of loss for the
period (0.3) 0.0 (0.3)
0.2 2.8 3.0
========== =========== =======
At 31 December 2020
Investment 1.0 2.8 3.8
Group share of loss brought
forward (0.5) - (0.5)
Group share of loss for the
period (0.5) (0.2) (0.7)
---------- ----------- -------
- 2.6 2.6
========== =========== =======
At 30 June 2021
Investment 1.0 2.8 3.8
Additions 0.4 - 0.4
Derecognition of investment
upon acquisition - (2.8) (2.8)
Group share of loss brought
forward (1.0) - (1.0)
Group share of loss for the
period ( 0.3) - (0.3)
---------- ----------- -------
0.1 - 0.1
========== =========== =======
On 28 January 2021, the Group acquired the remaining 72% of the
share capital of CYTI (Holdings) Limited ("CYTI") and therefore
CYTI is now accounted for as a subsidiary and fully consolidated
into the Group accounts. See note 12 for further details.
9. Other investments
1 January Additions/ Fair value 30 June
2020 (disposals) uplift 2020
GBPm GBPm GBPm GBPm
Truelayer Limited 1.5 - - 1.5
Flagstone Investment Management
Limited 2.5 0.3 0.8 3.6
By Miles Ltd 1.0 - 1.6 2.6
Plum Fintech Limited 0.3 - 0.2 0.5
---------- ------------ ------------- -------
5.3 0.3 2.6 8.2
========== ============ ============= =======
1 January Additions/ Fair value 30 June
2021 (disposals) uplift 2021
GBPm GBPm GBPm GBPm
Truelayer Limited 1.4 (2.1) 0.7 -
Flagstone Investment Management
Limited 3.6 - - 3.6
By Miles Ltd 2.6 - - 2.6
Plum Fintech Limited 0.5 - - 0.5
---------- ------------ ------------- -------
8.1 (2.1) 0.7 6.7
========== ============ ============= =======
Investments are measured at fair value, using the latest
unquoted share price implied by recent transactions in shares of
the investments. Updates are made as required considering market
conditions as at 30 June 2021. This valuation method falls under
level 3 as defined by IFRS 13 Fair Value Measurements.
Sensitivity analysis
For the fair value of investments, a 5% movement in share price
would have an effect of GBP0.3m (2020: GBP0.4m) on the total
value.
10. Related party transactions
Robin Freestone, Scilla Grimble, James Bilefield and Sally James
in total received dividends from the Group totalling GBP22,344
(2020: Robin Freestone, Scilla Grimble and Sally James in total
received GBP12,812).
11. Commitments and contingencies
The Group is committed to incur capital expenditure of GBP0.8m
(2020: GBP0.4m).
Comparable with most companies of our size, the Group is a
defendant in a small number of disputes incidental to its
operations and from time to time is under regulatory scrutiny.
As a leading website operator, the Group occasionally
experiences operational issues as a result of technological
oversights that in some instances can lead to customer detriment,
dispute and potentially cash outflows. The Group has a professional
indemnity insurance policy in order to mitigate liabilities arising
out of events such as this. The contingencies outlined above are
not expected to have a material adverse effect on the Group.
12. Acquisition of subsidiary
On 28 January 2021, the Group acquired the remaining 72% of the
share capital of CYTI (Holdings) Limited ("CYTI").
The total consideration for the acquisition was GBP6.5m which
comprised the following:
GBPm
Cash paid for remaining 72% of share capital 0.7
Contingent consideration for remaining 72%
of share capital 0.4
Fair value of initial 28% investment 1.9
Fair value of call option on exercise date 3.5
---------------------------------------------- -----------------
Total consideration 6.5
---------------------------------------------- -----------------
Contingent consideration is subject to confirmation that there
is not a contingent liability due in respect of pre-acquisition
trading and is expected to be settled within one year of the
balance sheet date.
On acquisition of the remaining share capital, the original 28%
investment was remeasured to its fair value of GBP1.9m. This
resulted in a charge to the income statement of GBP0.7m. Prior to
the acquisition, the Group held a call option to acquire the
remaining share capital which had a fair value on the date of
acquisition of GBP3.5m.
The fair value of the total identifiable net assets acquired was
GBP3.7m:
GBPm
Tangible assets 0.7
Intangible assets 3.4
Trade and other receivables 0.5
Cash 0.2
Trade payables (0.1)
Non-trade payables and accrued expenses (0.4)
Lease liabilities (0.6)
--------------------------------------------- -----------------
Fair value of total identifiable net assets
acquired 3.7
--------------------------------------------- -----------------
Intangible assets relate to technology expenditure that had not
been capitalised in CYTI prior to acquisition. The fair value of
these assets was determined using a rebuild cost valuation method,
in consultation with senior technology professionals. The cost
assumption for developers included a profit margin to reflect the
external market rate of building an equivalent platform. A degree
of obsolescence was also assumed within the fair value to reflect
the advancements in technology since the technology was originally
built.
Goodwill arising from the acquisition was recognised as
follows:
GBPm
Consideration 6.5
Fair value of assets and liabilities acquired (3.7)
----------------------------------------------- -----------------
Goodwill 2.8
----------------------------------------------- -----------------
The goodwill is primarily attributable to the experience and
processes in place within CYTI for providing white label website
services, which can be leveraged into new channels, as well as the
synergies expected to be achieved from integrating the company into
the Group. None of the goodwill recognised is expected to be
deductible for tax purposes. If new information obtained within one
year of the date of acquisition about facts and circumstances that
existed at the date of acquisition identifies adjustments to the
above amounts, or any additional provisions that existed at the
date of acquisition, then the accounting for the acquisition will
be revised.
13. Post balance sheet events
There are no significant post balance sheet events.
Appendix
Statutory Information
The financial information set out above does not constitute the
Company's statutory accounts for the six months ended 30 June 2021
or 30 June 2020 but is derived from those accounts. The auditor has
reported on those accounts; their reports were (i) unqualified,
(ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their
report and (iii) did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
The Annual General Meeting took place on 13 May 202 1. The
interim dividend will be paid on 3 September 2021 to shareholders
on the register at the close of business on 30 July 2021 .
Presentation of figures
Certain figures contained in this announcement, including
financial information, have been subject to rounding adjustments.
Accordingly, in certain instances, the sum or percentage change of
the numbers contained in this announcement may not conform exactly
with the total figure given.
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