TIDMSAA
RNS Number : 4183N
M&C Saatchi PLC
24 September 2019
M&C SAATCHI PLC
INTERIM RESULTS
SIX MONTHSED
30 JUNE 2019
24 September 2019
M&C SAATCHI PLC
Interim results for the six months
ended 30 June 2019
24 September 2019
Statutory - 30 June Headline - 30 June
GBP'm 2019 2018 Restated 2018 2019 2018 Restated 2018
------------------------ ------ -------------- ----------- ------- ------ -------------- -------- ------
Billings 280.7 289.2 -3.0% 289.2 280.7 289.2 -3.0% 289.2
Revenue 214.2 212.8 0.7% 215.4 214.2 212.8 0.7% 215.4
Net Revenue 117.9 123.0 -4.1% 127.2 117.9 123.0 -4.1% 127.2
Operating profit 0.3 4.9 -93.0% 11.3 4.8 9.4 -48.9% 15.8
Profit before taxation 9.4 5.0 87.7% 11.4 3.4 10.3 -66.9% 16.7
Profit for the
period 9.0 2.9 208.8% 7.6 2.5 7.7 -67.4% 12.8
Earnings 8.5 1.5 460.5% 6.2 1.1 5.6 -80.0% 10.7
EPS 9.59p 1.84p 421.2% 7.6p 1.26p 6.80p -81.5% 13.0p
Interim dividend 2.45p 2.45p maintained 2.45p
Operating profit
margin 0.2% 2.3% -2.1pts 5.25% 2.2% 4.4% -2.2pts 7.3%
Tax rate 3.8% 41.5% -37.7pts 30.40% 26.4% 25.2% +1.2pts 23.2%
------------------------ ------ -------------- ----------- ------- ------ -------------- -------- ------
See note on next page for definition of headline.
2018 Restated. See note 4 for details of the restatement, as
well as comments below.
Highlights
-- Increase in Statutory profit due to GBP11.6m profit on
disposal of remaining 24.9% share in Walker Media Ltd for GBP25m in
February 2019
-- As previously communicated, year-on-year decline in Headline
revenue and profits due to larger number of loss-making entities,
particularly start-ups, and the impact of the timing of revenues in
2019 which are expected to fall into the second half
-- Independent accounting review by PwC ongoing, expected to
conclude by November 2019. The Board expects this to lead to a
restatement of 2018 results; H1 2018 results have been restated to
reflect misstatements already identified. The specific items result
in a net charge of GBP5.1m
-- Solid balance sheet with net cash of GBP9.5m (GBP2.2m net debt at 31(st) December 2018)
-- Interim dividend maintained at 2.45p
-- Full year operating profit and profit before tax forecast to
be 5%-10% below expectations (before the impact of exceptional
items including office refurbishment costs of GBP1.4m)
-- Full Year earnings and EPS are projected to show a relatively
greater decline than operating profits as a result of the changing
composition of profits, with a greater share of Group profits
currently being made by those companies with a higher proportion of
non-controlling interests and operating in higher tax rate
jurisdictions
Commenting on the results, David Kershaw, Chief Executive,
said:
"Our results in the first half of 2019 have been impacted by the
number of new businesses in the Group as well as the weighting of
revenues shifting towards the second half of the year.
"Whilst this has had a short term impact on our results, we
remain confident in and committed to our strategy of winning new
business and investing in new, fast-growing businesses. Looking to
the second half, our pipeline of new business is strong across the
network, and our newest businesses are performing well and expected
to start making a meaningful contribution to the Group."
For further information please call:
M&C Saatchi +44 (0)20-7543-4500
David Kershaw
Tulchan Communications +44 (0)20-7353-4200
Tom Murray
Numis Securities +44 (0)20-7260-1000
Nick Westlake, Hugo Rubinstein, NOMAD
Charles Farquhar, Corporate Broking
Notes to Editors
Headline results
The term headline is not a defined term in IFRS. The items that
are excluded from headline results are the amortisation or
impairment of intangible assets (including goodwill and acquired
intangibles, but excluding software) acquired in business
combinations; changes to deferred and contingent consideration and
other acquisition related charges taken to the income statement;
impairment of investment in associate; profit and loss on disposal
of associates; revaluation of investment and their related costs
and income statement impact of put option accounting (whether
accounted under IFRS2 or IFRS 9). See Note 6 for reconciliation
between the Group's statutory results and the headline results.
Like-for-like
The like-for-like revenue comparisons referred to in this report
are stated after excluding the impact of foreign currency
movements, corporate acquisitions and disposals and incorporate
restated 2018 results (see note 4).
Operating margin
Operating margin refers to the percentage calculated through
dividing operating profit by revenue.
Net Cash
Net Cash refers to cash and cash equivalents less external
borrowings at the end of the period, exclusive of expected future
cash outflows relating to lease agreements.
Periods compared
This report comments on the unaudited consolidated income
statement of M&C Saatchi plc (the "Group") for the six months
to 30 June 2019 compared with the restated unaudited consolidated
income statement for the same period in 2018 (see note 4 for
details of the restatement).
SUMMARY OF RESULTS
Factors impacting these results
As stated in the trading update announced on 16(th) August 2019,
two key factors have impacted the Group's results in the first six
months of 2019 when compared to the same period in 2018 and prior
years.
First, M&C Saatchi has continued to invest in new, start-up
businesses which we consider will deliver long term growth. That is
reflected in the higher proportion of losses from such ventures in
H1 19 compared to H1 18, amounting to a negative impact on profit
of GBP2.6m in H1 19 vs H1 18. Ours is a network of best-in-class
entrepreneurs motivated to succeed by holding meaningful minority
equity holdings in their businesses. In 2019 the fastest growing
businesses in the network and those making the greatest
contribution to operating profits have larger minority
shareholdings than in prior years and also operate in higher tax
rate jurisdictions creating a disproportionate drag on earnings and
earnings per share when compared to operating profit.
Second, the timing of a considerable proportion of revenues
committed and expected to be delivered in 2019, including recent
client wins and additional projects, is such that operating profit
will be much more heavily weighted to the second half of the year.
This also reflects a more prudent approach to revenue
recognition.
Although there were regional changes to net revenues caused by
exchange rate movements, at the Group level currency had negligible
effect on net revenues.
The first six months of 2019 saw revenues increase by 0.7%
compared to H1 2018 (restated). The increased cost of sales due to
higher production costs recognised in the period has resulted in a
GBP5 million or 4% reduction in net revenue compared to H1 2018
(restated), leading to a GBP4.6m or 49% decline in operating
profit.
Expectations for the second half and full year
We have seen a shift in the timing of revenues in 2019 away from
the first half of the year and expect an increased proportion of
profits to be made in the second half of the year. Trading in the
second half has been solid, with a strong pipeline of client
revenues through to the end of the year expected to convert to
improved revenues and profits. As a result, we expect like for like
full year operating profit to be 5%-10% below full year 2019
expectations. This is before the impact of any exceptional items
including office refurbishment costs of GBP1.4m. With a change in
the composition of those companies in the Group contributing to
profits, that is those companies with higher minority
shareholdings, and which operate in higher tax rate jurisdictions
generating a greater share of operating profit, earnings and EPS
are expected to fall by a relatively greater margin than operating
profit.
The largest contribution to Group profits in the remainder of
the year is expected to come from the following divisions:
-- Performance - slow start to the year but has since picked up
and has been operating on a monthly run rate consistent with its
record of last year
-- Australia - heavily skewed towards retail clients with focus
on advertising and promotions during the final quarter of the
year.
-- SS+K - significant project with Commonwealth Bank in the second half of the year
-- World Services - significant media activities in the second half of the year
-- South Africa - win of Standard Bank with all of this year's revenue in the second half
-- China - move from associate to subsidiary in the second half
In addition, and as announced in the Company's 12(th) August
statement, as part of the ongoing assessment of the Group's assets,
we have decided to take an exceptional cost of GBP1.4m in the
second half of 2019 in respect of property-related assets arising
from the UK office refurbishment which is currently taking
place.
UK
The UK posted an increase in net revenue of 3% (2019,
GBP43.6million; 2018, GBP42.3million). Headline operating profit
was up 108% (2019, GBP3.0million, 2018, GBP1.4million), with
headline operating costs increasing 5% (all comparisons are against
restated 2018 numbers).
Growth was driven by World Services and the Talent Group, which
has benefited from the acquisition of Red Hare and Grey Whippet on
29 June 2018, have traded strongly. M&C Saatchi S&E
continues to trade well, winning Heineken, Beko & Ovo
Energy.
The UK Group businesses have strengthened compared to H1 2018
and continues to do so winning a New Home Office contract, LNER,
Alpro, Vodafone, Revolution Beauty, OPPO, Durasein, Olympia London,
McCormick, Trinity College, Cetaphil, Forex.com, Expedia, the
Football Association, Foxtons, GambleAware, Heineken, Legal &
General, Powerade and Twinings.
Our Talent agencies signed up John Amaechi (OBE), as well as
having three contestants performing in Strictly 2019 (Alex Scott
(MBE), James Cracknell (OBE) and Saffron Barker) along with other
projects.
Performance media spending slowed in H1 during a period of
contract renewals. They have however since resumed at 2018
levels.
We made significant investment in start-ups, including in excess
of GBP1million in Send Me A Sample in the first half of the
year.
Europe
Like for like net revenues in Europe declined by 16% (2019,
GBP14.2million ; 2018, GBP17.1million). Headline operating profit
was down 84% (2019, GBP0.4million; 2018, GBP2.6million), with
headline operating costs reducing 5% (all comparisons are against
restated 2018 numbers).
France had a poor first half with the loss of La Banque Postale
and Mini contributing heavily to reduced performance in Europe.
However, the office continued to win business which will translate
to much improved second half trading, winning work with Compté,
Picard, LVMH, Celio, Lansay, IZI by EF, GERLINEA, Focal, Le Bourget
and Ipsos.
Spain and Sweden had a slow start to the year, but stronger H2
results are expected, particularly in Sweden which is becoming a
regional hub winning Adidas Euro 2020 (Sweden), Reebok (Norway,
Sweden and Denmark), KLM (Norway, Sweden, Denmark and Finland) and
Zound Industries (Sweden).
Italy continues to trade strongly with wins including Delonghi
and fashion retailers OVS.
Germany had a number of new clients including ING (Banking),
Falke (Socks), Vattenfall (Energy) and Uniqfeel (Sports
Apparel).
Middle East and Africa
Like for like net revenue in the Middle East and Africa was down
4% (2019, GBP7.5million; 2018, GBP7.8million). Headline operating
profit was down 85% (2019, GBP0.1million; 2018, GBP0.5million),
with headline operating costs reducing 2% (all comparisons are
against restated 2018 numbers).
The South African business had client losses of Nedbank and SARB
impacting H1 2019. This has been countered by winning Standard Bank
in the first half, with the work starting in the second half and
will be that office's largest ever client.
Asia and Australia
In Asia and Australia, like for like net revenues have increased
by 1% (2019, GBP32.8million; 2018, GBP32.6million). Headline
operating profit was down 48% (2019, GBP2.3million; 2018,
GBP4.6million), with headline operating costs increasing 6% (all
comparisons are against restated 2018 numbers).
Start up investments in Jakarta, Hong Kong and Singapore
resulted in H1 losses of GBP0.8m. This is expected to turn around
in H2.
Non-recurring income in Australia for H1 2018 has resulted in
lower comparative profits in H1 2019. Spend in H2 2019 is expected
to increase due to the strong retail-driven client base
(Woolworths, Optus, Lexus, Cricket Australia and Tab).
Clients won in 2019 by the Australian group include AHC
(Division of Unilever), SUMO Power, FlexiGroup, Uniting (NSW ACT),
Sony Music, AVEO Group, Respiri, Racing Victoria, Plush, Yourtown,
Ethos Urban, UNSW, Bill Care and SMEG.
Americas
Like for like net revenues have decreased by 14% (2019,
GBP19.9million; 2018, GBP23.1million). Headline operating profit
was down 50% (2019, GBP1.3million; 2018, GBP2.7million), with
headline operating costs reducing 5% (all comparisons are against
restated 2018 numbers).
The Los Angeles office had a poor first half. The office has
experienced client reductions, including Epson and Fox Restaurant
Concepts, materially impacting our results. Subsequently however
the office has won projects for Amazon Music and Origin Hotel.
Performance media spending slowed in H1 during a period of
contract renewals. They have however since resumed at 2018
levels.
Investment in start-ups in Mexico & NY (LIDA) has further
impacted H1 2019 results.
SS+K continues to trade in line with 2018, with the Commonwealth
Bank project generating revenue in H2 2019.
Notable client wins for the region in 2019 which will
beneficially impact H2 include Locktons, VIZIO + Apple and
Copperstate Farms.
Balance sheet and cash
Net cash at the half-year was GBP9.5m, which compares with
GBP2.5m of net debt at 2018 year end and GBP4.5m net cash at the
same stage last year. Working capital outflows during the first
half year were GBP3.8 million which compares to a GBP11.8 million
working capital outflow in the 12 months of 2018 (restated). The
disposal of Walker Media Ltd generated GBP23.2m of cash in the
first half and this has been absorbed in repaying bank loans and in
investing activities.
Opening reserves have been reduced by GBP6.5m due to the
adoption of IFRS16 Leases. This accounting charge will reverse over
the life of the leases (see note 5). Initial findings from the
ongoing independent accounting review lead us to conclude a
restatement of prior year results is necessary, reducing opening
reserves by GBP5.1m (see note 4)
Accounting review
The Group announced in August that we would be taking an
exceptional charge of GBP6.4 million to the Group's 2019 results as
result of an internal review of specific subsidiaries in the UK
(this comprised of GBP4.9m of specifically identified items and a
contingency of GBP1.5 million for further items that may
subsequently be identified). We have since engaged PwC to conduct
an independent accounting review of the whole Group which is
expected to be completed by November 2019. Initial indications are
that this review will result in the restatement of prior year
results (rather than an exceptional charge in 2019). Further
analysis has been undertaken and the specific issues identified
relate to:
-- Overstated accrued income: GBP2.6m
-- Irrecoverable receivables: GBP1.7m
-- Prepayments: GBP0.9m
-- Other debtors: GBP0.5m
-- Impairment of intangible assets: GBP0.7m
-- The above items to be offset by corporation tax receivable: GBP1.2m
Further detail is included in Note 4 and we will make a further
announcement to the market once the findings are confirmed.
Since these issues came to light, our recently appointed Group
Finance Director, Mickey Kalifa, has appointed a new Finance
Director for the UK division and is in the process of hiring
additional senior finance staff.
Note Six months Six months Year ended
ended 30 June ended 30 June 31 December
2019 2018(#) 2018(#)
GBP000 GBP000 GBP000
----------------------------------- ----- ---------- ---------- ---------- ---------- ----------
Billings 280,667 289,219 609,610
----------------------------------- ----- ---------- ---------- ---------- ---------- ---------- ----------
Revenue 214,221 212,835 419,844
Third party cost of sales (96,304) (89,876) (168,710)
Overheads (26,988) (29,218) (59,814)
Operating charges (123,292) (123,292) (119,094) (119,094) (228,524) (228,524)
---------- ---------- ----------
Staff costs (90,959) (89,269) (182,536)
Other gains 371 400 1,584
----------------------------------- ----- ---------- ---------- ---------- ---------- ----------
Operating profit 341 4,872 10,368
----------------------------------- ----- ---------- ---------- ---------- ---------- ---------- ----------
Share of results of associates and
joint ventures (115) 1,264 2,825
Gain on disposal of associate 11 11,617 - -
Finance income 8 200 182 273
Finance costs 8 (2,693) (1,337) (2,268)
----------------------------------- ----- ---------- ---------- ---------- ---------- ----------
Profit before taxation 9,350 4,981 11,198
----------------------------------- ----- ---------- ---------- ---------- ---------- ---------- ----------
Taxation (354) (2,068) (5,362)
----------------------------------- ----- ---------- ---------- ---------- ---------- ---------- ----------
Profit for the period 8,996 2,913 5,836
----------------------------------- ----- ---------- ---------- ---------- ---------- ---------- ----------
Attributable to:
Equity shareholders of the Group 8,509 1,518 3,128
Non-controlling interests 487 1,395 2,708
----------------------------------- ----- ---------- ---------- ---------- ---------- ---------- ----------
Profit for the period 8,996 2,913 5,836
----------------------------------- ----- ---------- ---------- ---------- ---------- ---------- ----------
Earnings per share
Basic (pence) 6 9.59p 1.84p 3.71p
Diluted (pence) 6 9.13p 1.71p 3.47p
----------------------------------- ----- ---------- ---------- ---------- ---------- ---------- ----------
Headline results
Revenue 214,221 212,835 419,844
Third party cost of sales (96,304) (89,876) (168,710)
Net revenue 117,917 122,959 251,134
---------- ----------
Operating profit 6 4,806 9,412 23,927
Profit before tax 6 3,406 10,289 25,897
Profit after tax attributable to
equity
shareholders of the Group 6 1,118 5,600 15,969
Basic earnings per share (pence) 6 1.26p 6.80p 18.93p
Diluted earnings per share (pence) 6 1.20p 6.29p 17.69p
----------------------------------- ----- ---------- ---------- ---------- ---------- ---------- ----------
(#) restated (note 4)
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2018(#)
2019 2018(#)
GBP000 GBP000 GBP000
----------------------------------------- ----------- ----------- -------------
Profit for the period 8,996 2,913 5,836
-------------------------------------------- ----------- ----------- -------------
Other comprehensive income*
Exchange differences on translating
foreign operations before tax (841) (64) 1,000
-------------------------------------------- ----------- ----------- -------------
Other comprehensive income for
the period net of tax (841) (64) 1,000
Total comprehensive income for
the period 8,155 2,849 6,836
-------------------------------------------- ----------- ----------- -------------
Total comprehensive income attributable
to:
Equity shareholders of the Group 7,668 1,454 4,128
Non-controlling interests 487 1,395 2,708
-------------------------------------------- ----------- ----------- -------------
Total comprehensive income for
the period 8,155 2,849 6,836
-------------------------------------------- ----------- ----------- -------------
(#) restated (note 4)
*All items in the consolidated statement of comprehensive income
will be reclassified to the income statement
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018(#) 2018(#)
Note GBP000 GBP000 GBP000
--------------------------------------- ------ --------------- -------------- -------------
Non-current assets
Intangible assets 47,867 50,813 49,124
Investments in associates and
JV 7,940 20,781 9,483
Plant and equipment 12,470 11,663 13,274
Right-of-use assets 30,614 - -
Other non-current assets 6,749 3,747 4,248
Deferred tax assets 7,830 5,369 5,687
Financial assets at fair value
through profit or loss 13,469 9,486 12,958
---------- -------------- -------------
126,939 101,859 94,774
---------------------------------------------- --- ---------- -------------- -------------
Current assets
Trade and other receivables 128,174 138,506 145,197
Current tax assets 4,718 6,217 2,241
Cash and cash equivalents 50,438 36,267 50,065
Non-current assets classified
as Held-for-sale 11 - - 13,106
---------- --------------
183,330 180,990 210,609
---------------------------------------------- --- ---------- -------------- -------------
Current liabilities
Trade and other payables (120,809) (136,016) (142,627)
Current tax liabilities (746) (6,671) (3,318)
Borrowings (17,636) (3,666) (14,060)
Lease liabilities (10,658) - -
Deferred and contingent consideration (675) (348) (752)
Minority shareholder put option
liabilities (22,120) (12,593) (12,327)
------------------------------------------------ --- ---------- -------------- -------------
(172,644) (159,294) (173,084)
---------------------------------------------- --- ---------- -------------- -------------
Net current assets 10,686 21,696 37,525
------------------------------------------------ --- ---------- -------------- -------------
Total assets less current liabilities 137,625 123,555 132,299
------------------------------------------------ --- ---------- -------------- -------------
Non-current liabilities
Deferred tax liabilities (1,560) (861) (1,444)
Borrowings (23,291) (28,767) (38,541)
Lease liabilities (30,271) - -
Contingent consideration (411) (765) (514)
Minority shareholder put option
liabilities (3,773) (7,363) (6,063)
Other non-current liabilities (1,784) (2,613) (1,944)
------------------------------------------------ --- ---------- -------------- -------------
(61,090) (40,369) (48,506)
---------------------------------------------- --- ---------- -------------- -------------
Total net assets 76,535 83,186 83,793
------------------------------------------------ --- ---------- -------------- -------------
(#) restated (note 4)
Six months Six months Year ended
ended 30 ended 30 June 31 December
June 2019 2018(#) 2018(#)
GBP000 GBP000 GBP000
-------------------------------------- ----------- --------------- -------------
Equity
Share capital 906 866 876
Share premium 46,667 44,770 46,667
Merger reserve 31,592 31,592 31,592
Treasury reserve (560) (792) (792)
Minority interest put option reserve (19,240) (13,935) (12,954)
Non-controlling interest acquired (22,463) (21,317) (22,464)
Foreign exchange reserve 3,752 3,529 4,593
Retained earnings 30,568 32,265 29,068
---------------------------------------- ----------- --------------- -------------
Equity attributable to shareholders
of the Group 71,222 76,978 76,586
---------------------------------------- ----------- --------------- -------------
Non-controlling interest 5,313 6,208 7,207
---------------------------------------- ----------- --------------- -------------
Total equity 76,535 83,186 83,793
---------------------------------------- ----------- --------------- -------------
(#) restated (note 4)
MI put Non-controlling Foreign Non-controlling
Share Share Merger Treasury option interest exchange Retained interest
capital premium reserve reserve reserve acquired reserves earnings Subtotal in equity Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- -------- -------- -------- --------- --------- ---------------- --------- ---------- --------- ---------------- --------
At 31 December
2018 876 46,667 31,592 (792) (12,954) (22,464) 4,593 29,068(#) 76,586 7,207 83,793
---------------- -------- -------- -------- --------- --------- ---------------- --------- ---------- --------- ---------------- --------
Adjustment on
initial
application
of IFRS 16 - - - - - - - (6,030) (6,030) (531) (6,561)
----------------
Adjusted
balance
at 1 January
2019 876 46,667 31,592 (792) (12,954) (22,464) 4,593 23,038 70,556 6,676 77,232
---------------- -------- -------- -------- --------- --------- ---------------- --------- ---------- --------- ---------------- --------
Acquisitions - - - - - - - - 0 0 0
Acquisitions of
minority
interest - - - - (6,288) - - - (6,288) 0 (6,288)
Exercise of put
options 30 - - 232 - - - (2,991) (2,729) 0 (2,729)
Exchange rate
movements - - - - 2 1 - - 3 5 8
Deferred
consideration - - - - - - - - 0 0 0
Issue of shares
to minorities - - - - - - - - 0 (66) (66)
Share option
charge - - - - - - - 2,012 2,012 0 2,012
Dividends - - - - - - - 0 0 (1,789) (1,789)
---------------- -------- -------- -------- --------- --------- ---------------- --------- ---------- --------- ---------------- --------
Total
transactions
with owners 30 0 0 232 (6,286) 1 0 (979) (7,002) (1,850) (8,852)
Total
comprehensive
income for the
period 0 0 0 0 0 0 (841) 8,509 7,668 487 8,155
---------------- -------- -------- -------- --------- --------- ---------------- --------- ---------- --------- ---------------- --------
At 30 June 2019 906 46,667 31,592 (560) (19,240) (22,463) 3,752 30,568 71,222 5,313 76,535
---------------- -------- -------- -------- --------- --------- ---------------- --------- ---------- --------- ---------------- --------
(#) restated (note 4)
MI put Non-controlling Foreign Non-controlling
Share Share Merger Treasury option interest exchange Retained interest
capital premium reserve reserve reserve acquired reserves earnings(#) Subtotal in equity Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- --- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- --------
At 31 December
2017 813 32,095 31,592 (792) (13,958) (21,040) 3,593 25,235 57,538 6,532 64,070
--------------- --- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- --------
Adjustment on
initial
application
of IFRS 15 - - - - - - - 28 28 - 28
Adjustment on
initial
application
of IFRS 9 - - - - - - - 2,971 2,971 - 2,971
Adjusted
balance
at 1 January
2018 813 32,095 31,592 (792) (13,958) (21,040) 3,593 28,234 60,537 6,532 67,069
--------------- --- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- --------
Acquisitions 13 17 6,749 - - - (265) - - 6,501 71 6,572
Acquisitions - - - - - - - - - - -
of
minority
interest
Exercise of
put
options 24 36 5,926 - - - - - (21) 5,941 - 5,941
Exchange rate
movements - - - - 23 (12) - - 11 (25) (14)
Deferred - - - - - - - - - - -
consideration
Issue of - - - - - - - - - - -
shares
to minorities
Share option
charge 25 - - - - - - - 2,534 2,534 0 2,534
Dividends 12 - - - - - - - - - (1,765) (1,765)
--------------- --- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- --------
Total
transactions
with owners 53 12,675 - - 23 (277) - 2,513 14,987 (1,719) 13,268
Total
comprehensive
income for
the
period - - - - - - (64) 1,518 1,454 1,395 2,849
--------------- --- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- --------
At 30 June
2018 866 44,770 31,592 (792) (13,935) (21,317) 3,529 32,265 76,978 6,208 83,186
--------------- --- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- --------
(#) restated (note 4)
MI put Non-controlling Foreign Non-controlling
Share Share Merger Treasury option interest exchange Retained interest
capital premium reserve reserve reserve acquired reserves earnings(#) Subtotal in equity Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- ---------
At 31 December
2017 813 32,095 31,592 (792) (13,958) (21,040) 3,593 25,235 57,538 6,532 64,070
---------------- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- ---------
Adjustment on
initial
application
of IFRS 15 - - - - - - - 28 28 - 28
Adjustment on
initial
application
of IFRS 9 - - - - - - - 2,971 2,971 - 2,971
Adjusted
balance
at 1 January
2018 813 32,095 31,592 (792) (13,958) (21,040) 3,593 28,234 60,537 6,532 67,069
---------------- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- ---------
Acquisitions 18 6,484 - - - - - - 6,502 - 6,502
Acquisitions of
minority
interest - - - - - (319) - - (319) - (319)
Exercise of put
options 44 7,630 - - 973 (973) - (20) 7,654 - 7,654
Exchange rate
movements - - - - 31 (132) - - (101) 24 (77)
Deferred
consideration 1 458 - - - - - - 459 - 459
Issue of shares
to minorities - - - - - - - - - 551 551
Share option
charge - - - - - - - 6,104 6,104 - 6,104
Dividends - - - - - - - (8,378) (8,378) (2,608) (10,986)
---------------- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- ---------
Total
transactions
with owners 63 14,572 - - 1,004 (1,424) - (2,294) 11,921 (2,033) 9,888
Total
comprehensive
income for the
year - - - - - - 1,000 3,128 4,128 2,708 6,836
---------------- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- ---------
At 31 December
2018 876 46,667 31,592 (792) (12,954) (22,464) 4,593 29,068 76,586 7,207 83,793
---------------- -------- -------- -------- --------- --------- ---------------- --------- ------------ --------- ---------------- ---------
(#) restated (note 4)
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018(#) 2018(#)
Note GBP000 GBP000 GBP000
------------------------------------------------------ ------ ----------- -------------- -------------
Net revenue 117,917 122,959 251,134
Overheads (26,988) (29,218) (59,814)
Staff costs (90,959) (89,269) (182,536)
Other gains 371 400 1,584
-------------------------------------------------------------- ----------- -------------- -------------
Operating profit 341 4,872 10,368
-------------------------------------------------------------- ----------- -------------- -------------
Adjustments for:
Depreciation of plant and equipment and Right-of-use
assets 6,609 1,705 3,558
Loss on sale of plant and equipment 11 52 75
Loss on sale of software intangibles 49 60 9
Decrease / (Increase) in financial assets
at FVTPL (371) (400) (1,584)
Impairment and amortisation of acquired intangible
assets 1,350 2,007 4,427
Impairment of associate and investments - - 674
Impairment of goodwill and other intangibles - - 2,195
Amortisation of capitalised software intangible
assets 168 731 959
Equity settled share based payment expenses 2,012 2,534 6,104
-------------------------------------------------------------- ----------- -------------- -------------
Operating cash before movements in working
capital 10,169 11,561 26,785
-------------------------------------------------------------- ----------- -------------- -------------
Decrease / (Increase) in trade and other
receivables 9,150 (2,208) (19,487)
Decrease / (Increase) in contract assets (1,653) (16,398) (679)
Increase / (Decrease) in trade and other
payables (2,276) 928 153
Increase / (Decrease) in contract liabilities (8,480) 5,396 8,240
-------------------------------------------------------------- ----------- -------------- -------------
Cash generated from operations 6,910 (721) 15,012
Tax paid (4,017) (2,256) (6,018)
-------------------------------------------------------------- ----------- -------------- -------------
Net cash from operating activities 2,893 (2,977) 8,994
-------------------------------------------------------------- ----------- -------------- -------------
Investing activities
Acquisitions of subsidiaries equity net of
cash acquired (2,978) 1,149 441
Net proceeds from sale of associates 23,284 - -
Acquisitions of associates - - (904)
Acquisitions of unlisted investments (714) (355) (780)
Proceeds from sale of plant and equipment 32 13 77
Purchase of plant and equipment (1,302) (1,083) (4,597)
Purchase of capitalised software (23) (6) (1,046)
Dividends received from associates (49) (59) 428
Interest received 194 182 273
-------------------------------------------------------------- ----------- -------------- -------------
Net cash consumed investing activities 18,444 (159) (6,108)
-------------------------------------------------------------- ----------- -------------- -------------
Net cash from operating and investing activities 21,337 (3,136) 2,886
-------------------------------------------------------------- ----------- -------------- -------------
(#) Restated (note 4)
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018(#) 2018(#)
Note GBP000 GBP000 GBP000
-------------------------------------------------- ------ ----------- -------------- -------------
Net cash from operating and investing activities 21,337 (3,136) 2,886
---------------------------------------------------------- ----------- -------------- -------------
Financing activities
Dividends paid to equity holders of the Company - - (8,378)
Dividends paid to non-controlling interest (1,789) (1,727) (2,608)
Proceeds / (payments) of own shares (110) 34 85
Repayment of finance leases (14) (45)
Payment of lease liabilities (5,834) - -
Proceeds / (Repayment) of invoice discounting (2,001) (843) (914)
Proceeds from bank loans 734 387 9,100
Repayment of bank loans (15,734) (9,442) (9,462)
Interest paid (577) (569) (1,355)
Interest paid on leases (897) - -
-------------------------------------------------- ------ ----------- -------------- -------------
Net cash consumed by financing activities (26,208) (12,174) (13,577)
---------------------------------------------------------- ----------- -------------- -------------
Net (decrease)/increase in cash and cash
equivalents (4,871) (15,310) (10,691)
---------------------------------------------------------- ----------- -------------- -------------
Effect of exchange rate fluctuations on cash
held (84) (426) 45
Cash and cash equivalents at the beginning
of the year 38,311 48,957 48,957
---------------------------------------------------------- ----------- -------------- -------------
Total cash and cash equivalents at the end
of period 33,356 33,221 38,311
---------------------------------------------------------- ----------- -------------- -------------
Cash and cash equivalents 50,438 36,267 50,065
Bank Overdrafts (17,082) (3,046) (11,754)
---------------------------------------------------------- ----------- -------------- -------------
Total cash and cash equivalents at the end
of period 33,356 33,221 38,311
---------------------------------------------------------- ----------- -------------- -------------
Bank loans and borrowings (23,845) (29,387) (40,818)
---------------------------------------------------------- ----------- -------------- -------------
Net cash 9,511 3,834 (2,507)
---------------------------------------------------------- ----------- -------------- -------------
(#) Restated (note 4)
1. GENERAL INFORMATION
The Company is a public limited company incorporated and
domiciled in the UK. The address of its registered office is 36
Golden Square, London W1F 9EE.
The Company has its primary listing on the AIM market of the
London Stock Exchange.
This consolidated half-yearly financial information was approved
for issue on 23 September 2019.
These results do not constitute the Group's statutory accounts.
The information presented in relation to 31 December 2018 is
extracted from the statutory financial statements for the year then
ended, which have been delivered to the Registrar of Companies,
except for the amendments detailed in Note 4. The auditor's report
on the statutory financial statements for the year ended 31
December 2018 was unqualified, did not include references to any
matters to which the auditors drew attention by way of emphasis
without qualifying their report and did not contain statements
under Section 498 (2) or (3) of the Companies Act 2006.
2. BASIS OF PREPARATION
This consolidated half-yearly financial information for the
half-year ended 30 June 2019 has been prepared in accordance with
the AIM Rules for companies. The half-yearly consolidated financial
information should be read in conjunction with the annual financial
statements for the year ended 31 December 2018.
3. USE OF JUDGEMENTS AND ESTIMATES
In preparing these interim financial statements, management has
made judgements and estimates that affect the application of
accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from
these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those described in the last annual
financial statements, except for new significant judgements and key
sources of estimation uncertainty related to the application of
IFRS 16, which are described in Note 5.
4. Restatement
As announced on 12 August 2019 the Group has conducted an
internal accounting review of several of the UK subsidiaries.
Subsequent to the commencement of the internal review, under the
oversight of the Audit Committee, PwC were engaged to perform a
separate targeted independent forensic review of the entire Group,
including the UK subsidiaries that formed part of the internal
accounting review. At the date of publication of these Interim
financial statements the external review is ongoing.
As a result of these investigations the Board are currently of
the belief that there are a number misstatements relating to 2018
which need to be addressed. This is subject to confirmation by the
conclusion of all investigations which is expected in November
2019. As at the date of publication of the Interim statement it is
impracticable to ascertain definitively whether the corrections, on
an individual basis, relate to 2018 or potentially earlier. At this
point in time, however the indications point to the corrections
relating to 2018, and as such the identified misstatements have
been incorporated within the 6 month financial period ending 30
June 2018 in accordance with the requirements of IAS 8.44.
The GBP6.4 million of adjustments comprise the following
corrections: overstatement of revenue of GBP2.6million,
understatement of costs of GBP3.1million and an inappropriate
recognition of intangible assets valued at GBP0.7million. After the
effect of tax, these resulted in an overstatement of equity of
GBP5.1million. These adjustments are restricted to four UK trading
entities and the UK shared services company. The precise basis as
to how these errors arose is expected to be identified in PwC's
review and we will update the market in due course.
Description of misstatements
(1) - Two of the affected entities under review were noted as
having recognised GBP2.6million of accrued income which under the
requirements of IFRS 15 should not have been recognised based on
the profile of completion of the related performance obligations as
at the end of 2018.
(2) - GBP1.7million of adjustments relate to a mis-estimation of
project progress and estimated costs to completion.
(3) - GBP0.9million of prepayments held as at the end of 2018
that we now believe had expired during the second half of 2018 have
been eliminated from the Balance sheet.
(4) - A balance of GBP0.5million of Other Debtors as at 31
December 2018 was identified as being unsupportable and requiring
to be written out.
(5) - Impairment of intangible assets - GBP0.7million of
intangible assets with no future economic benefits were identified
and consequently impaired.
(6) - The impact of the above adjustments in reducing profit
previously recognised for 2018 by GBP6.4million, has resulted in a
reduction of corporation tax of GBP1.3million.
The impact of these misstatements are presented below in tabular
format for the Consolidated income statement and Consolidated
balance sheet for the financial period ending 31 December 2018 and
30 June 2018 respectively.
For the year ended 31 December
2018
-------------------------------------------------
As previously Restatement Ref As restated
reported impacts
GBP000 GBP000 GBP000
------------------------ -------------- ------------ ---- ------------
Billings 609,610 - 609,610
------------------------- -------------- ------------ ---- ------------
Revenue 422,404 (2,560) 1 419,844
Third party cost
of sales (167,031) (1,679) 2 (168,710)
Overheads (57,653) (2,161) 3-5 (59,814)
Staff costs (182,536) - (182,536)
Other gains / (losses) 1,584 - 1,584
------------------------- -------------- ------------ ------------
Operating profit 16,768 (6,400) 10,368
------------------------- -------------- ------------ ---- ------------
Profit before taxation 17,598 (6,400) 11,198
------------------------- -------------- ------------ ---- ------------
Taxation (6,635) 1,273 6 (5,362)
------------------------- -------------- ------------ ---- ------------
Profit for the year 10,963 (5,127) 5,836
------------------------- -------------- ------------ ---- ------------
Attributable to: - 0
Equity shareholders
of the Group 8,255 (5,127) 3,128
Non-controlling
interests 2,708 - 2,708
------------------------- -------------- ------------ ---- ------------
Profit for the year 10,963 (5,127) 5,836
------------------------- -------------- ------------ ---- ------------
Earnings per share
Basic (pence) 9.79p (6.08)p 3.71p
Diluted (pence) 9.15p (5.68)p 3.47p
------------------------- -------------- ------------ ---- ------------
For the year ended 31 December
2018
------------------------------------------------
As previously Restatement As restated
reported impacts
GBP000 GBP000 GBP000
----------------------------- -------------- ------------ ---- ------------
Total non-current
assets 95,430 (656) 5 94,774
------------------------------ -------------- ------------ ---- ------------
Current assets
Trade and other receivables 150,941 (5,744) 1-4 145,197
Current tax assets 968 1,273 6 2,241
Cash and cash equivalents 50,065 - 50,065
Non-current assets
Held-for-sale 13,106 - 13,106
-------------- ------------
215,080 (4,471) 210,609
----------------------------- -------------- ------------ ---- ------------
Total current liabilities (173,084) - (173,084)
------------------------------ -------------- ------------ ---- ------------
Net current assets 41,996 (4,471) 37,525
------------------------------ -------------- ------------ ---- ------------
Total assets less
current liabilities 137,426 (5,127) 132,299
------------------------------ -------------- ------------ ---- ------------
Total non-current
liabilities (48,506) - (48,506)
------------------------------ -------------- ------------ ---- ------------
Total net assets 88,920 (5,127) 83,793
------------------------------ -------------- ------------ ---- ------------
Total adjustment
to equity:
Retained earnings 34,195 (5,127) 29,068
Other reserves 54,725 - 54,725
88,920 (5,127) 83,793
----------------------------- -------------- ------------ ---- ------------
For the period ended 30 June
2018
-------------------------------------------------
As previously Restatement Ref As restated
reported impacts
GBP000 GBP000 GBP000
--------------------------- -------------- ------------ ---- ------------
Billings 289,219 - 289,219
---------------------------- -------------- ------------ ---- ------------
Revenue 215,395 (2,560) 1 212,835
Third party cost
of sales (88,197) (1,679) 2 (89,876)
Overheads (27,057) (2,161) 3-5 (29,218)
Staff costs (89,269) - (89,269)
Other gains / (losses)*)* 400 - 400
---------------------------- -------------- ------------ ------------
Operating profit 11,272 (6,400) 4,872
---------------------------- -------------- ------------ ---- ------------
Profit before taxation 11,381 (6,400) 4,981
---------------------------- -------------- ------------ ---- ------------
Taxation (3,341) 1,273 6 (2,068)
---------------------------- -------------- ------------ ---- ------------
Profit for the year 8,040 (5,127) 2,913
---------------------------- -------------- ------------ ---- ------------
Attributable to: - 0
Equity shareholders
of the Group 6,645 (5,127) 1,518
Non-controlling
interests 1,395 - 1,395
---------------------------- -------------- ------------ ---- ------------
Profit for the year 8,040 (5,127) 2,913
---------------------------- -------------- ------------ ---- ------------
Earnings per share
Basic (pence) 8.07p (6.23)p 1.84p
Diluted (pence) 7.46p (5.75)p 1.71p
---------------------------- -------------- ------------ ---- ------------
* Reflecting IFRS9 year end treatment.
For the period ended June
2018
------------------------------------------------
As previously Restatement Ref As restated
reported impacts
GBP000 GBP000 GBP000
----------------------------- -------------- ------------ ---- ------------
Total non-current
assets 102,515 (656) 5 101,859
------------------------------ -------------- ------------ ---- ------------
Current assets
Trade and other receivables 144,250 (5,744) 1-4 138,506
Current tax assets 4,944 1,273 6 6,217
Cash and cash equivalents 36,267 - 36,267
Non-current assets
Held-for-sale - - 0
-------------- ------------
185,461 (4,471) 180,990
----------------------------- -------------- ------------ ---- ------------
Total current liabilities (159,294) - (159,294)
------------------------------ -------------- ------------ ---- ------------
Net current assets 26,167 (4,471) 21,696
------------------------------ -------------- ------------ ---- ------------
Total assets less
current liabilities 128,682 (5,127) 123,555
------------------------------ -------------- ------------ ---- ------------
Total non-current
liabilities (40,369) - (40,369)
------------------------------ -------------- ------------ ---- ------------
Total net assets 88,313 (5,127) 83,186
------------------------------ -------------- ------------ ---- ------------
Total adjustment
to equity:
Retained earnings 37,392 (5,127) 32,265
Other reserves 50,921 - 50,921
88,313 (5,127) 83,186
----------------------------- -------------- ------------ ---- ------------
5. ACCOUNTING POLICIES
The financial information in these interim results is that of
the holding company and all of its subsidiaries (the Group). It has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs). Except as described below, the
accounting policies applied in these interim financial statements
are the same as those applied in the Group's consolidated financial
statements as at and for the year ended 31 December 2018.
The changes in accounting policies are also expected to be
reflected in the Group's consolidated financial statements as at
and for the year ending 31 December 2019.
The Group has initially adopted IFRS 16 Leases from 1 January
2019. Several other amendments and interpretations apply for the
first time in 2019, but do not have an impact on the interim
condensed consolidated financial statements of the Group.
IFRS 16 Leases
IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an
Arrangement contains a Lease, SIC-15 Operating Leases-Incentives
and SIC-27 Evaluating the Substance of Transactions Involving the
Legal Form of a Lease. The standard sets out the principles for the
recognition, measurement, presentation and disclosure of leases and
requires lessees to account for most leases under a single
on-balance sheet model.
Adoption method
The Group has adopted IFRS 16 using the modified retrospective
method of adoption with the date of initial application being 1
January 2019. Under this method, the standard is applied
retrospectively with the cumulative effect of initially applying
the standard recognised within equity at the date of initial
application. Accordingly there is no restatement of the comparative
period financial information.
On adoption of IFRS 16 the Group has elected to grandfather the
assessment of which arrangements are leases. Contracts not
identified as leases under Legacy IFRS were not reassessed for
whether there is a lease under IFRS 16. The Group also elected to
use the recognition exemptions for lease contracts that, at the
application date of IFRS 16, have a lease term of 12 months or less
and do not contain a purchase option ('short-term leases'), and
lease contracts for which the underlying asset is of low value
('low-value assets').
Approach to transition
As a lessee, the Group previously classified leases as operating
or finance leases based on its assessment of whether the lease
transferred significantly all of the risks and rewards incidental
to ownership of the underlying asset to the Group. Any prepaid rent
and accrued rent were recognised under Prepayments and Trade and
other payables, respectively.
Under IFRS 16, the Group recognises right-of-use assets and
lease liabilities for all leases (unless exempt from applying IFRS
16) on its balance sheet. The Group used the following practical
expedients when applying IFRS 16 to leases previously classified as
operating leases:
-- applied the exemption not to recognise right-of-use assets
and liabilities for leases of low value or for which the lease term
ends within 12 months of the date of initial application, on a
lease-by-lease basis
-- relied on previous assessments on whether leases are onerous
for impairment of right-of-use assets
-- excluded initial direct costs from the measurement of the
right-of-use asset at the date of initial application
-- used hindsight when determining the lease term if the
contract contains options to extend or terminate the lease
-- applied the exemption not to separate non-lease components
such as service charges from lease rental charges
-- used a single discount rate to a portfolio of leases with
reasonably similar characteristics
Leases previously accounted for as operating leases
Under the transition rules for leases classified as operating
leases, lease liabilities were measured at the present value of the
remaining lease payments, discounted at the relevant (i.e. specific
to each member of the Group) incremental borrowing rate as at 1
January 2019.
Right-of-use assets are measured at cost. In the majority of
instances this comprised the initial amount of the lease liability
adjusted for any lease payments made at or before the adoption date
and less any lease incentives received at or before the adoption
date.
For a selection of material long-term leases, the Group has
however assessed the cost of the Right-of-use asset as if IFRS 16
had always been applied from the original inception date of the
lease using the incremental borrowing rate at the date of initial
application. Under this method, the difference between the
right-of-use asset and lease liability is taken to retained
earnings as at 1 January 2019.
Leases previously classified as finance leases
The Group did not change the initial carrying amounts of
recognised assets and liabilities at the date of initial
application for leases previously classified as finance leases. The
requirements of IFRS 16 was applied to the leases from 1 January
2019.
Impact of adoption of IFRS 16
The effect of adoption IFRS 16 as at 1 January 2019
(increase/(decrease)) is as follows:
Increase /
(decrease)
GBP000
---------------------------- ------------
Assets
Right-of-use assets 34,928
Deferred tax assets 1,818
Prepayments (405)
Finance lease receivable 2,048
Total assets 38,389
---------------------------- ------------
Liabilities
Lease liabilities 45,906
Trade and other payables (956)
Total liabilities 44,950
---------------------------- ------------
Total adjustment to equity
Retained earnings (6,030)
Non-controlling interests (531)
(6,561)
---------------------------- ------------
The following table reconciles the opening balance for the lease
liabilities as at 1 January 2019 based upon the operating lease
obligations as at 31 December 2018:
GBP000
--------
Operating lease commitments as
at 31 12 18 42,006
Short term / low value leases not
included in lease liabilities (1,683)
Extension options reasonably certain
to be exercised 10,570
Signed leases not yet commenced -
Gross lease liabilities at 1/1/19 50,893
Effect of discounting (4,987)
Lease liabilities at 1/1/19 45,906
-------------------------------------- --------
The weighted average discount rate as at 1 January 2019 was
3.9%.
Accounting policies
The Group leases various assets, comprising properties,
equipment and motor vehicles. The determination whether an
arrangement is, or contains, a lease is based on whether the
contract conveys a right to control the use of an identified asset
for a period of time in exchange for consideration.
The following sets out the Group's lease accounting policy for
all leases with the exception of leases with a term of 12 months or
less and those of low value assets, both of which apply the
exemption allowable under the standard. These are typically
expensed to the income statement as incurred.
Right-of-use assets and lease liabilities
At the inception of the lease, the Group recognises a
right-of-use asset and a lease liability. The value of the lease
liability is determined by reference to the present value of the
future lease payments as determined at the inception of the lease.
A corresponding right-of-use fixed asset is also recognised at an
equivalent amount adjusted for any initial direct costs, payments
made before the commencement date (net of lease incentives) and the
estimated cost for any restoration costs the Group is obligated to
at lease inception. Right-of-use assets are subsequently
depreciated on a straight-line basis over the shorter of the lease
term or the assets estimated life. Depreciation is included within
the line item Overheads in the consolidated income statement.
Under IFRS 16 right-of-use assets are tested for impairment in
accordance with IAS 36 'Impairment of Assets' when there is an
indication of impairment. This replaces the previous requirements
relating to onerous leases.
Lease liabilities are disclosed separately on the Balance sheet.
These are measured at amortised cost using the effective interest
rate method. Lease payments are apportioned between a finance
charge and a reduction of the lease liability based on the constant
interest rate applied to the remaining balance of the liability.
Interest expense is included within the line item net finance costs
in the consolidated income statement.
Lease term
The lease term determined comprises the non-cancellable period
of the lease contract. Periods covered by an option to extend the
lease are included if the Group has reasonable certainty that the
option will be exercised and periods covered by the option to
terminate are included if it is reasonably certain that this will
not be exercised.
Lease payments
Lease payments comprise fixed payments and variable lease
payments that depend on an index or a rate, initially measured
using the minimum index or rate at inception date. The payments
also include any lease incentives and any penalty payments for
terminating the lease, if the lease term reflects the lessee
exercising that option. The lease liability is subsequently
remeasured (with a corresponding adjustment to the related
right-of-use asset) when there is a change in future lease payments
due to a renegotiation or market rent review, a change of an index
or rate or a reassessment of the lease term.
Lease modifications
Where there are significant changes in the scope of the lease
then the arrangement is reassessed to determine whether a lease
modification has occurred and, if there is such a modification,
what form it takes.
Subleases
At times entities of the Group will sublet certain of their
properties when underlying business requirements change. Under IFRS
16, the Group assesses the classification of these subleases with
reference to the right-of-use asset, not the underlying asset. This
results in certain leases being classified as finance leases under
IFRS 16 and recognition of a finance lease receivable (recorded as
a financial assets within Trade and other receivables on the
consolidated balance sheet).
When the Group acts as an intermediate lessor it accounts for
it's interests in the head lease and the sub-lease separately. At
lease commencement a determination is made whether the lease is a
finance lease or an operating lease. To classify each lease, the
Group makes an overall assessment of whether the lease transfers to
the lessee substantially all of the risks and rewards of ownership
in relation to the underlying asset. If this is the case, then the
lease is a finance lease; if not, then it is an operating lease.
The Group recognises lessor payments under operating leases as
income on a straight-line basis over the lease term. The Group
accounts for finance leases as finance lease receivables, using the
effective interest rate method.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option. It also
applies the lease of low-value assets recognition exemption to
leases of office equipment that are considered of low value
(defined by the Group as being below GBP3,000). Lease payments on
short-term leases and leases of low-value assets are recognised as
expense on a straight-line basis over the lease term.
Significant judgements relating to leases
The Group has made significant judgements in adopting IFRS 16,
these are considered to be; determining the interest rate used for
discounting of future cash flows, and the lease term.
6. Headline results and earnings per share - 30 June 2019
Capital
gain
FVTPL tax
investments on
Amortisation Impairment Disposal under Revaluation issue Acquisition
Reported of acquired of acquired of IFRS of contingent of put related Put option Headline
results intangibles intangibles associates 9 consideration options remuneration accounting results
Period ended 30
June
2019 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Net revenue 117,917 - - - - - - - - 117,917
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
EBITDA 8,195 - - - - - - 1,376 2,012 11,583
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Operating profit 341 1,350 (273) 1,376 2,012 4,806
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Share of results
of
associates and
JV* 11,502 - - (11,617) - - - - - (115)
Finance income 200 - - - - - - - 200
Finance cost (2,693) - - - 1,208 (1,485)
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- -----------
Profit before
taxation 9,350 1,350 0 (11,617) (273) 0 1,376 3,220 3,406
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Taxation (354) (343) (281) 79 (899)
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Profit for the
period 8,996 1,007 0 (11,898) (194) 0 0 1,376 3,220 2,507
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Non-controlling
interests (487) (194) - - - - (708) - (1,389)
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Profit
attributable
to equity
holders of
the Group 8,509 813 0 (11,898) (194) 0 0 668 3,220 1,118
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Basic earnings
per
share
----------------- --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Weighted average
number
of shares
(thousands) 88,707 88,707
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Basic EPS 9.59p 1.26p
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Diluted earnings
per
share*
----------------- --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Weighted average
number
of shares
(thousands) 88,707 88,707
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Add
----------------- --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
- Conditional
shares
without dividend
rights 2,240 2,240
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
- Conditional
shares
with dividend
rights** 1,933 1,933
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
- Contingent
consideration 309 309
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Total 93,189 93,189
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Diluted earnings
per
share 9.13p 1.20p
------------------ --------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
The Directors believe that the headline results and headline
earnings per share provide additional useful information on the
underlying performance. The headline result is used for internal
performance management, calculating the value of subsidiary
convertible shares and minority interest put options. The term
headline is not a defined term in IFRS.
The items that are excluded from headline results are the
amortisation or impairment of intangible assets (including goodwill
and acquired intangibles, but excluding software) acquired in
business combinations, changes to deferred and contingent
consideration and other acquisition related charges taken to the
income statement; impairment of investment in associates; profit or
loss on disposal of associates; revaluation of investments and
their related costs; and the income statement impact of put option
accounting and share based payment charges.
6. Headline results and earnings per share (continued) - 30 June
2018
Capital
gain
FVTPL tax
investments on
Amortisation Impairment Impairment under Revaluation issue Acquisition
Reported of acquired of acquired of IFRS of contingent of put related Put option Headline
results(#) intangibles intangibles associates 9 consideration options remuneration accounting results
Period ended 30
June
2018 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Net revenue 122,959 - - - - - - - - 122,959
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
EBITDA 8,751 - - - - - - 399 2,534 11,684
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Operating profit 4,872 2,007 - - (400) - - 399 2,534 9,412
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Share of results
of
associates and
JV 1,264 - - - - - - - - 1,264
Finance income 182 - - - - - - - 182
Finance cost (1,337) - - - - - - - 768 (569)
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- -----------
Profit before
taxation 4,981 2,007 - - (400) - 399 3,302 10,289
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Taxation (2,068) (504) - - - (24) (2,596)
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Profit for the
period 2,913 1,503 - - (400) - - 399 3,278 7,693
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Non-controlling
interests (1,395) (424) - - - - - (274) - (2,093)
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Profit
attributable
to equity
holders
of the Group 1,518 1,079 - - (400) - - 125 3,278 5,600
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Basic earnings per share
---------------------------- ------- -------
Weighted average number
of shares (thousands) 82,302 82,302
----------------------------- ------- -------
Basic EPS 1.84p 6.80p
----------------------------- ------- -------
Diluted earnings per
share*
---------------------------- ------- -------
Weighted average number
of shares (thousands) 82,302 82,302
Add
- Conditional shares
without dividend rights 2,022 2,022
- Conditional shares
with dividend rights** 4,575 4,575
- Contingent consideration 118 118
Total 89,017 89,017
----------------------------- ------- -------
Diluted earnings per
share 1.71p 6.29p
----------------------------- ------- -------
(#) Restated (note 11)
6. Headline results and earnings per share (continued) - 31
December 2018
Capital
gain
tax
on
FVTPL issue
Amortisation Impairment Impairment investments Revaluation of Acquisition
Reported of acquired of acquired of under of contingent put related Put option Headline
results(#) intangibles intangibles associates IFRS 9 consideration options remuneration accounting results
Year ended 31
December
2018 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Net revenue 251,134 - - - - - - - - 251,134
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
EBITDA 21,078 1,299 6,104 28,481
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Operating profit 10,368 4,427 2,195 674 (1,177) 37 - 1,299 6,104 23,927
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Share of results
of
associates and
JV 2,825 - - - - - - - - 2,825
Finance income 273 - - - - - - - 273
Finance cost (2,268) - - - 229 - - - 911 (1,128)
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- -----------
Profit before
taxation 11,198 4,427 2,195 674 (948) 37 1,299 7,015 25,897
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Taxation (5,362) (1,021) 0 179 - 517 - (342) (6,029)
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Profit for the
year 5,836 3,406 2,195 674 (769) 37 517 1,299 6,673 19,868
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Non-controlling
interests (2,708) (937) - - - - 149 (403) - (3,899)
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Profit
attributable
to equity
holders of
the Group 3,128 2,469 2,195 674 (769) 37 666 896 6,673 15,969
------------------ ----------- ------------- ------------ ----------- ------------ -------------- -------- ------------- ----------- ---------
Basic earnings per share
---------------------------- ------- -------
Weighted average number
of shares (thousands) 84,360 84,360
----------------------------- ------- -------
Basic EPS 3.71p 18.93p
----------------------------- ------- -------
Diluted earnings per
share
---------------------------- ------- -------
Weighted average number
of shares (thousands) 84,360 84,360
Add
- Conditional shares
without dividend rights 4,038 4,038
- Conditional shares
with dividend rights** 1,500 1,500
- Contingent consideration 350 350
Total 90,248 90,248
----------------------------- ------- -------
Diluted earnings per
share 3.47p 17.69p
----------------------------- ------- -------
(#) Restated (note 11)
7. Segmental information - 30 June 2019
The segmental information is reconciled to the statutory results
in Note 6.
Middle
East and Asia
UK Europe Africa and Australia Americas Total
Period ended 30 June GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
2019
------------------------- -------- ------------ -------------- --------------- ------------ --------
Net revenue 43,584 14,229 7,236 32,195 20,673 117,917
----------------------------- -------- ------------ -------------- --------------- ------------ --------
EBITDA 3,275 1,138 573 4,255 2,342 11,582
----------------------------- -------- ------------ -------------- --------------- ------------ --------
Operating profit excluding
Group costs 3,001 446 89 2,443 1,391 7,370
----------------------------- -------- ------------ -------------- --------------- ------------ --------
Group costs (2,292) (35) 0 (174) (63) (2,564)
----------------------------- -------- ------------ --------------- ------------ --------
Operating profit 709 411 89 2,269 1,328 4,806
----------------------------- -------- ------------ -------------- --------------- ------------ --------
Share of results of
associates
and JV 0 (3) 0 (87) (25) (115)
Financial income and cost (470) (80) (220) (107) (408) (1,285)
----------------------------- -------- ------------ -------------- --------------- ------------ --------
Profit before taxation 239 328 (131) 2,075 895 3,406
----------------------------- -------- ------------ -------------- --------------- ------------ --------
Taxation (47) (105) 36 (568) (215) (899)
----------------------------- -------- ------------ -------------- --------------- ------------ --------
Profit for the period 192 223 (95) 1,507 680 2,507
Non-controlling interests (1,448) 285 94 (368) 48 (1,389)
----------------------------- -------- ------------ -------------- --------------- ------------ --------
Profit attributable to
equity
shareholders of the Group (1,256) 508 (1) 1,139 728 1,118
----------------------------- -------- ------------ -------------- --------------- ------------ --------
Headline basic EPS 1.26p
----------------------------- -------- ------------ -------------- --------------- ------------ --------
Office locations London Paris, Johannesburg, Sydney, New
Milan, Cape Town, Melbourne, York,
Berlin, Abu Dhabi, New Delhi, Chicago,
Madrid, Dubai, Bangalore, Los
Geneva, Beirut. Islamabad, Angeles,
Stockholm, Tel Aviv Hong San
Moscow, Kong, Francisco,
Istanbul Shanghai, Mexico
Tokyo, City,
Kuala Sao
Lumpur, Paulo
Bangkok,
Singapore
----------------------------- -------- ------------ -------------- --------------- ------------ --------
7. Segmental information (continued) - 30 June 2018
Middle
East and Asia and
UK(#) Europe Africa Australia Americas Total#
Period ended 30 June GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
2018
---------------------- -------- ------------ -------------- ------------ ---------------- --------
Net revenue 42,347 17,082 7,793 32,598 23,139 122,959
-------------------------- -------- ------------ -------------- ------------ ---------------- --------
EBITDA 624 2,712 653 4,855 2,840 11,684
-------------------------- -------- ------------ -------------- ------------ ---------------- --------
Operating profit
excluding
Group costs 1,445 2,583 488 4,499 2,709 11,724
-------------------------- -------- ------------ -------------- ------------ ---------------- --------
Group costs (2,188) (35) - (63) (26) (2,312)
-------------------------- -------- ------------ ------------ ---------------- --------
Operating profit (743) 2,548 488 4,436 2,683 9,412
-------------------------- -------- ------------ -------------- ------------ ---------------- --------
Share of results of
associates and JV 1,172 (18) - 161 (51) 1,264
Financial income and
cost (184) (37) 17 57 (240) (387)
-------------------------- -------- ------------ -------------- ------------ ---------------- --------
Profit before taxation 245 2,493 505 4,654 2,392 10,289
-------------------------- -------- ------------ -------------- ------------ ---------------- --------
Taxation 328 (1,068) (91) (1,285) (480) (2,596)
-------------------------- -------- ------------ -------------- ------------ ---------------- --------
Profit for the period 573 1,425 414 3,369 1,912 7,693
Non-controlling interests (981) (203) (76) (693) (140) (2,093)
-------------------------- -------- ------------ -------------- ------------ ---------------- --------
Profit attributable to
equity
shareholders of the
Group (408) 1,222 338 2,676 1,772 5,600
------------------------ -------- ------------ -------------- ------------ ---------------- --------
Headline basic EPS 6.80p
-------------------------- -------- ------------ -------------- ------------ ---------------- --------
Office locations London Paris, Johannesburg, Sydney, New York,
Milan, Cape Town, Melbourne, Chicago,
Berlin, Abu Dhabi, New Delhi, Los Angeles,
Madrid, Dubai, Bangalore, San Francisco,
Geneva, Beirut. Islamabad, Mexico
Stockholm, Tel Aviv Hong Kong, City,
Moscow, Shanghai, Sao Paulo
Istanbul Tokyo,
Kuala
Lumpur,
Bangkok,
Singapore
-------------------------- -------- ------------ -------------- ------------ ---------------- ----------
(#) Restated (note 44)
7. Segmental information (continued) - 31 December 2018
Middle
East and Asia and
UK(#) Europe Africa Australia Americas Total#
Year ended 31 December GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
2018
------------------------ -------- ------------ -------------- ------------ ---------------- --------
Net revenue 91,587 34,165 15,790 65,412 44,180 251,134
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
EBITDA 7,959 5,760 1,506 6,998 6,305 28,528
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
Operating profit excluding
Group costs 10,988 5,497 1,167 6,462 5,924 30,038
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
Group costs (5,618) (71) - (333) (89) (6,111)
---------------------------- -------- ------------ ------------ ---------------- --------
Operating profit 5,370 5,426 1,167 6,129 5,835 23,927
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
Share of results of
associates
and JV 2,354 (13) - 433 51 2,825
Financial income and cost (486) (31) 83 90 (511) (855)
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
Profit before taxation 7,238 5,382 1,250 6,652 5,375 25,897
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
Taxation (834) (1,879) (260) (1,924) (1,132) (6,029)
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
Profit for the year 6,404 3,503 990 4,728 4,243 19,868
Non-controlling interests (1,331) (452) (389) (1,189) (538) (3,899)
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
Profit attributable to
equity
shareholders of the Group 5,073 3,051 601 3,539 3,705 15,969
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
Headline basic EPS 18.93p
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
Office locations London Paris, Johannesburg, Sydney, New York,
Milan, Cape Town, Melbourne, Chicago,
Berlin, Abu Dhabi, New Delhi, Los Angeles,
Madrid, Dubai, Bangalore, San Francisco,
Geneva, Beirut. Islamabad, Mexico
Stockholm, Tel Aviv Hong Kong, City,
Moscow, Shanghai, Sao Paulo
Istanbul Tokyo,
Kuala
Lumpur,
Bangkok,
Singapore
---------------------------- -------- ------------ -------------- ------------ ---------------- --------
(#) Restated (Note 44)
8. Net finance income / (costs)
Six
Six months months Year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
Year ended 31 December GBP000 GBP000 GBP000
----------------------------- ----------- --------- -------------
Bank interest
receivable 172 154 272
Other interest receivable 28 - 1
Fair value adjustment
to minority shareholder - 28 -
put option
liabilities
Financial income 200 182 273
---------------------------- ----------- --------- -------------
Bank interest
payable (571) (569) (1,175)
Other interest
payable (17) - (182)
Interest on lease
liabilities (897) - -
Fair value adjustment
to minority shareholder (1,208) (768) (911)
put option
liabilities
Financial expense (2,693) (1,337) (2,268)
---------------------------- ----------- --------- -------------
Net finance income
/(costs) (2,493) (1,155) (1,995)
----------------------------- ----------- --------- -------------
9. Taxation
Income tax expenses are recognised based on management's
estimate of the average annual headline income tax expected for the
full financial year.
The estimated headline effective annual tax rate used for the
period to 30 June 2019 is 26.4% (30 June 2018: 25.2%). The increase
in tax is due to the sale of Blue 449 reducing associate income and
a change in our tax mix.
The estimated effective annual tax rate for the period to 30
June 2019 is 3.8% (30 June 2018: 41.5%). The difference between the
headline and statutory tax rates is caused by the disposal of Blue
449, the profit of which does not get a tax charge.
10. Dividends
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
GBP000 GBP000 GBP000
----------------------- ------------ ------------ -------------
2017 final dividend
7.40p (2016: 6.44p) - - 6,261
2018 interim dividend
2.45p (2017: 2.13p) - - 2,117
------------------------ -------------
- - 8,378
------------ ------------------------------------ -------------
The directors propose an interim dividend of 2.45p per share
(2018: 2.45p per share) payable on 8 November 2019 to shareholders
who are on the register at 25 October 2019. This interim dividend,
amounting to GBP2,235k (2018: GBP2,117k), along with the 2018 final
dividend of GBP6,261k (7.40p) has not been recognised as a
liability in this half-yearly financial report.
11. Disposal of Blue 449
As at 31 December 2018 the Group recognised its 25% investment
in the associate Blue 449 as held-for-sale in line with IFRS 5. On
31 January 2019 this disposal was completed for proceeds of
GBP25million. The gain arising on the disposal is as detailed
below.
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
GBP000 GBP000 GBP000
----------- ----------- -------------
Consideration received
in cash 25,000 - -
Carrying amount of investments
held-for-sale (11,646) - -
Legal costs (1,737)
Gain on sale before income
tax 11,617 - -
-------------------------------- ----------- ----------- -------------
Income tax expense on
gain 281 - -
Gain on sale after income
tax 11,898 - -
-------------------------------- ----------- ----------- -------------
As at 31 December 2018 the carrying value of the disposed
investment was GBP13.1million. As at the point of the sale the
carrying amount of the investment shown is net of a dividend due to
the Group of GBP1.5million.
12. Leases
The movements relating to leases to the six months ended 30 June
2019 are as follows:
Right-of-use assets
Land Computer Motor
& Buildings equipment vehicles Total
GBP000s GBP000s GBP000s GBP000s
At 1 January
2019 33,807 886 235 34,928
Additions 48 30 103 181
Depreciation (4,258) (158) (79) (4,495)
At 30 June 2019 29,597 758 259 30,614
------------------ ------------- ----------- ---------- --------
Lease liabilities
Land & Computer Motor
Buildings equipment vehicles Total
GBP000s GBP000s GBP000s GBP000s
At 1 January
2019 44,852 886 168 45,906
Additions 48 30 103 181
Lease liability
interest 871 21 55 897
Repayment of
lease liabilities (5,823) (163) (69) (6,055)
At 30 June
2019 39,948 774 207 40,929
-------------------- ----------- ----------- ---------- --------
The following table shows the breakdown of the lease expense
between amounts charged to operating profit amounts recognised as
finance income and finance costs:
Six months
ended 30
GBP000s June 2019
---------------------- -----------
Depreciation of
right of use assets (4,495)
Short-term lease
expense (357)
Low-value lease
expense (189)
Short-term sublease
income 73
Charge to operating
profit (4,968)
Sublease finance
income 53
Lease liability
interest expense (897)
Lease charge to
profit before tax (5,852)
------------------------- -----------
The maturity of the lease liabilities held as at 30 June 2019 is
as follows:
Six months
ended
30 June
GBP000s 2019
-----------
Period ending
31 December:
2019 5,937
2020 11,059
2021 8,118
2022 6,160
2023 5,821
2024 2,211
Later years 3,952
Gross future
liability 43,258
-------------------- -----------
The Group does not face a significant liquidity risk with regard
to its lease liabilities and manages them in line with its approach
to other month to month liquidity matters. Detailed disclosure can
be found in Note 28 of the 2018 Annual Report.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR USRVRKBAKURR
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