REG - Centaur Media PLC - Interim Results
20/07/2023 07:00
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RNS Number : 5800G Centaur Media PLC 20 July 2023
20 July 2023
Centaur Media Plc
("Centaur" or "Group")
Interim results for the 6 months ended 30 June 2023
Successful execution of strategy driving higher quality revenue
Strong EBITDA margin performance in line with Margin Acceleration Plan (MAP23)
Centaur, an international provider of business intelligence, learning and
specialist consultancy presents its interim results for the 6 months ended 30
June 2023.
Financial highlights
£m H1 2023 H1 2022 Change
Reported revenue 19.3 19.8 -3%
Adjusted(1) EBITDA 3.5 3.4 +3%
Adjusted(1) EBITDA margin 18% 17% +1pp
Adjusted(1) operating profit 2.4 1.9 +26%
Reported operating profit 1.8 1.1 +64%
Group reported profit after taxation 1.9 0.7 +171%
Adjusted(1) diluted EPS 1.6 0.9 +78%
Ordinary dividend (pence per share) 0.6 0.5 +20%
Net cash(2) 8.8 14.2 -38%
· Revenue reduction of 3% to £19.3m primarily due to macroeconomic related
headwinds and fall in non-strategic advertising, recruitment & marketing
solutions revenues
° Flagship 4 represents 74% of Group revenue and grew by 6% including event
timing(5)
° 76% of Group revenue derived from higher quality revenue streams
· Adjusted(1) EBITDA increased to £3.5m (H1 2022: £3.4m) delivering an
adjusted(1) EBITDA margin of 18% (H1 2022: 17%); driven by a focus on
profitable revenue, structured price rises and careful cost management
offsetting the margin loss from fall in non-strategic revenues
· Interim ordinary dividend of 0.6 pence per share representing an increase of
20% on the 2022 interim dividend
· Robust balance sheet with net cash(2) of £8.8m (H1 2022: £14.2m), following
£8.0m of ordinary and special dividends paid in the period, together with
£10m undrawn RCF
· Strong cash conversion(3) of 115% due to good cash collection and increase in
deferred revenue
· Centaur remains well positioned to deliver profitable growth alongside
continued product investment in business intelligence and learning where we
have identified further opportunities to enhance market share and accelerate
growth and profits.
Strategic and operational highlights
· Flagship 4 brands and higher quality revenue streams (Premium Content and
Training & Advisory) drove profitability over last 6 months
· Strategic emphasis on building repeat and recurring revenue with improving
renewal rates and blue-chip customer base
· Focus on profitable revenue, structured price rises and careful cost
management to reinforce the Group's resilience and maintain its operational
leverage
· Well placed to generate full year revenue at last year's level whilst
achieving our MAP23 EBITDA objectives(4) to raise EBITDA to over £10m at an
adjusted(1) EBITDA margin of at least 23% by the end of 2023
Swag Mukerji, Chief Executive Officer, commented:
"We are proud to be on track to deliver our MAP23 EBITDA objectives, despite
the macroeconomic backdrop and remain encouraged to see the growth in our
Flagship 4 brands and Group profitability.
We are positioning Centaur to deliver targeted connectivity with timely and
deeper insight to customers and we continue to develop our learning and
consultancy expertise in a market consistently characterised by change. These
underlying trends and our focus on the Flagship 4 are driving improved
profitability and give us a solid platform for growth. Meanwhile, our
resilient revenue streams and balance sheet strength will ensure that Centaur
is well positioned to deliver MAP23 despite any wider macroeconomic
uncertainty."
Financial performance
Over the first six months of 2023, Centaur has continued to drive margin
acceleration in challenging market conditions. Adjusted(1) EBITDA and
adjusted(1) EBITDA margin both continued to show growth, as did the Group's
reported profit for the period.
First half reported revenue was £19.3m down 3% (H1 2022: £19.8m), impacted
by the fall in the advertising market and a slowdown in customer decision
making creating longer sales pipelines seen across the industry. Nonetheless,
the Group achieved combined growth of 6% from the Flagship 4 brands of
Econsultancy, MW Mini MBA and Influencer Intelligence (all three of which are
in the Xeim business unit) and The Lawyer. This growth in H1 2023 was
primarily driven by the benefit of The Lawyer Awards, which took place in June
2023 (vs. being held in July 2022). Without this timing difference, underlying
revenue(5) from the Flagship 4 brands was flat year on year.
In line with Centaur's strategy, the focus on the higher quality revenue
streams of Premium Content and Training and Advisory now represent 76% of
Group revenue (H1 2022: 70%). These are valuable because they are repeat and
recurring revenues that we expect, and have seen to date, to be more resilient
to macroeconomic conditions.
Adjusted(1) EBITDA increased by 3% to £3.5m (H1 2022: £3.4m) as a result of
the focus on profitable revenue, structured price rises and careful cost
management more than offsetting the reduction in margin from lower revenue,
delivering an adjusted(1) EBITDA margin increase to 18% (H1 2022: 17%), in
line with the Board's expectations.
The resilience of Centaur's EBITDA illustrates the operational leverage
inherent within its business model. This, together with the significantly
higher EBITDA margin historically reported in H2 compared to H1, underpins
management's confidence that its EBITDA objectives can be achieved in line
with MAP23.
With a small decline in revenue in the period, management has carefully
managed the cost base through clear operational and financial steps to
reinforce the resilience and efficiency of the business. We believe that this
will ensure that the business is best positioned to withstand any further
macroeconomic uncertainty during the remainder of the year.
The increase in adjusted(1) EBITDA together with lower depreciation and
amortisation has resulted in an adjusted(1) operating profit of £2.4m (H1
2022: £1.9m). Together with a tax credit of £0.1m, the Group reported profit
after taxation is £1.9m, a 171% improvement from last year's profit to 30
June 2022 of £0.7m.
Centaur had a net cash(2) balance of £8.8m at 30 June, after paying out
£8.0m of special and ordinary dividends during the period and strong cash
conversion(3) at 115%.
Flagship 4 Performance (Econsultancy, MW Mini MBA, Influencer Intelligence and
The Lawyer)
Centaur has continued to increase its profit margin under "MAP23" with the
primary aim of achieving its EBITDA objectives. To achieve this, Centaur has
focused investment and resource allocation on its Flagship 4 brands, the key
drivers of organic growth, particularly through strategic investment in
Econsultancy and MW Mini MBA as well as increased marketing spend and is well
placed for continued organic revenue growth in the future.
Over the past six months, revenue from the Flagship 4 grew by 6% to £14.2m,
which now equates to 74% (H1 2022: 68%) of total Group revenue:
· Econsultancy - since launching its new multi-touch learning platform in H2
last year, Econsultancy has seen increased renewal rates of 86% in H1 2023 (H1
2022: 73%) and strong demand for digital marketing training. However, longer
customer sales cycles resulting from a backdrop of increased macro-economic
uncertainty has delayed some of the revenue anticipated in H1 into H2
resulting in a 9% year on year reduction in H1 revenue for the brand;
· MW Mini MBA - continued growth, with revenue up 7% vs H1 2022. Our focus on
sales to repeat corporate customers has embedded the benefit of a significant
price increase achieving a yield increase of 15% with only a small decrease in
delegate numbers;
· Influencer Intelligence - satisfactory renewal rates in H1 2023 of 81% (H1
2022: 86%) due to some customers in the retail and fashion sectors tightening
budgets with an upward trend in new business during H1 2023, resulting in a
book of business and revenue marginally above H1 2022; and
· The Lawyer - delivered 11% growth in Premium Content due to a strong renewal
rate of 105% on its main corporate subscriptions and assisted by its premium
product Signal with a renewal rate of 100%. The Lawyer also held a successful
Awards event in June (2022: July) - excluding the impact of the timing of this
event, underlying revenue increased 1% compared to H1 2022 with the growth in
Premium Content offset by lower revenue from legacy advertising related
Marketing Solutions and other events.
Centaur has seen lower revenue across its suite of Core Brands primarily due
to:
· a reduction of 36% in Xeim's legacy advertising related Marketing Solutions
revenue impacted by tough economic conditions in the media market;
· a reduction of 22% in Marketing Services revenue resulting from Really B2B's
lower renewal rates in H2 2022; and
· the decision to focus on one annual Festival of Marketing event in October
2023 (2022 also included a lower profit hybrid March event).
The negative effects of the above were partially offset by revenue growth of
37% in Oystercatchers - our industry-leading consultancy with expertise in
delivering marketing agency search and selection due to an increase in the
number of blue-chip customers assessing and pitching their marketing agencies.
Going forward, Centaur's aim is to continue to position its Flagship 4 for
growth, broadening cross-selling opportunities and enhancing shared
capabilities, with the support of the Core Brands.
Dividend
Centaur's Board has approved an increased interim ordinary dividend for 2023
of 0.6p per share (H1 2022: 0.5p). This is in line with Centaur's dividend
policy that aims to distribute 40% of adjusted(1) earnings after taxation,
subject to a minimum aggregate total of 1p per share per year.
Outlook
Centaur has met the Board's expectations under its Margin Acceleration Plan of
increasing adjusted(1) EBITDA and adjusted(1) EBITDA margin over the course of
the first half of 2023. Trading is currently in line with the Board's
expectations for the second half of the year, which, in keeping with
historical trends, will have a greater weighting of revenue and profit than
the first half, primarily due to the Festival of Marketing and higher revenue
from MW Mini MBA falling in H2.
Despite the uncertain macroeconomic environment which has driven a broader
sector slowdown and a fall in the advertising market, the resilient
performance of our higher quality revenues leads us to expect full-year
revenue to be flat year on year (2022: £41.6m). The Board remains confident
in the successful delivery of Centaur's MAP23 EBITDA objectives(4) and
execution of the strategy set out three years ago. Centaur will continue to
invest in improving the quality of its revenue mix across the Flagship 4,
while the Group's balance sheet strength will allow for adaptability and
investment in its future.
(1 ) Adjusted EBITDA is adjusted operating profit before
depreciation and amortisation. Adjusted results exclude adjusting items as
detailed in note 4 of this Interim Report.
(2 ) Net cash is the total of cash and cash equivalents and
short-term deposits. There are no overdrafts or borrowings in the Group.
(3 ) Cash conversion is calculated as adjusted operating cash
flow (excluding any one-off significant cash flows) / adjusted EBITDA.
(4) Centaur's MAP23 EBITDA objectives are to raise EBITDA to
over £10m (based on our original target of 23% of £45m revenue) at an
adjusted EBITDA Margin of at least 23% by 2023.
(5) Event timing relates to the impact of The Lawyer Awards
timing in June 2023 compared to July 2022.
Enquiries
Centaur Media plc
Swag Mukerji, Chief Executive Officer 020 7970 4000
Simon Longfield, Chief Financial Officer
Teneo
Zoë Watt / Oliver Bell 07713 157561 / 07917 221748
Note to editors
Centaur is an international provider of business intelligence, learning and
specialist consultancy that inspires and enables people to excel at what they
do within the marketing and legal professions.
Centaur's Flagship 4 brands are Econsultancy, enabling customers to achieve
excellence in digital marketing and ecommerce; MW Mini MBA, taking marketing
and brand skills to the next level; Influencer Intelligence, helping global
brands find and engage with the right influencers; and The Lawyer, the most
trusted brand for the legal profession, providing data-rich business
intelligence and insight.
Overview of Group Performance
Centaur has continued to perform well off the back of the revenue and profit
growth in 2022. However, reported revenue in H1 2023 declined 3% compared to
H1 2022, with Xeim reporting an 8% decrease partially offset by The Lawyer
which achieved an increase of 21%. Excluding the impact of the timing of The
Lawyer Awards held in July 2022, underlying revenue in The Lawyer increased 1%
compared with the same period last year.
Within the headline revenue growth of 6% from the Flagship 4 brands, the
higher quality revenue streams of Premium Content and Training and Advisory
accounted for 76% of Group revenue in H1 2023, an increase of 6 percentage
points from H1 2022. The Flagship 4 now account for 74% of Group revenue (H1
2022: 68%) and this has boosted the Group's profitability in H1 2023.
The Group is half-way through the final year of its three-year strategy
("MAP23") that is targeting its EBITDA objectives. Given the challenging
macroeconomic environment, particularly in the advertising sector, the Group
expects revenue for the year to be flat on FY2022. However, the growth in
EBITDA margin (increasing from 17% in H1 2022 to 18% in H1 2023) and the
expected seasonal increase in H2 revenue and EBITDA margin underpins our
belief that the EBITDA objectives are realistic and achievable.
Trading Summary
Six months ended Six months ended
Unaudited 30 June 2023 30 June 2022 Movement
Revenue (£m) 19.3 19.8 -3%
Adjusted(1) EBITDA (£m) 3.5 3.4 +3%
Adjusted(1) operating profit (£m) 2.4 1.9 +26%
Reported operating profit (£m) 1.8 1.1 +64%
Group reported profit after tax (£m) 1.9 0.7 +171%
Adjusted(1) diluted EPS (pence) 1.6 0.9 +78%
Adjusted(1) operating cash flow(2) (£m) 4.0 4.2 -5%
Cash conversion(3) 115% 125% -10pp
The adjusted(1) operating profit of £2.4m (H1 2022: £1.9m) was achieved
despite the year-on-year decrease in revenue with structured price rises and
careful cost management. As a result of the increased adjusted(1) operating
profit, a reduction in the charge for adjusting items to £0.6m (H1 2022:
£0.8m) and a tax credit of £0.1m (H1 2022: a charge of £0.3m), the Group
reported a profit for the period of £1.9m (H1 2022: £0.7m).
As a result of the uplift in profitability, adjusted(1) diluted earnings per
share for the reporting period increased to 1.6 pence (H1 2022: 0.9 pence).
Diluted earnings per share for the period on a reported basis was 1.3 pence
(H1 2022: 0.5 pence).
Net cash(4) decreased from £16.0m at the end of 2022 to £8.8m at the end of
June 2023. Cash performance was strong in the period, mainly due to continued
focus on cash collection resulting in a reduction in trade receivables of
£0.4m. This, combined with a £1.8m increase in deferred income, but offset
by a decrease in creditors and an increase in prepayments and accrued income,
resulted in strong cash conversion(3) in the period of 115% (H1 2022: 125%).
The Group generated £4.0m of cash from operations and, in addition to capital
expenditure and taxation outflows, paid out £8.0m of special and ordinary
dividends, £0.3m for purchase of own shares and £0.5m of lease obligations,
net interest and other payments.
Six months ended Six months ended
30 June (unaudited) 30 June (unaudited)
2023 2022
£m £m
Adjusted(1) operating profit 2.4 1.9
Depreciation and amortisation 1.1 1.5
Movement in working capital 0.5 0.8
Adjusted(1) operating cash flow(2) 4.0 4.2
Capital expenditure (0.8) (0.8)
Taxation (1.6) -
Lease obligations, net interest and other (0.5) (1.0)
Free cash flow 1.1 2.4
Dividends paid to Company's shareholders (8.0) (0.7)
Purchase of own shares (0.3) (0.6)
(Decrease)/increase in net cash(4) (7.2) 1.1
Opening net cash(4) 16.0 13.1
Closing net cash(4) 8.8 14.2
Cash conversion(3) 115% 125%
Segmental Review
Revenue for the six months ended 30 June, together with reported and
underlying(5) growth rates across each segment, are set out below.
Xeim The Lawyer Total Xeim The Lawyer Total
2023 2023 2023 2022 2022 2022
£m £m £m £m £m £m
Revenue
Premium Content 5.1 2.5 7.6 4.9 2.3 7.2
Training and Advisory 7.0 - 7.0 6.7 - 6.7
Events 0.5 1.2 1.7 1.3 0.5 1.8
Marketing Services 1.3 - 1.3 1.6 - 1.6
Marketing Solutions 0.9 0.2 1.1 1.4 0.3 1.7
Recruitment Advertising 0.1 0.5 0.6 0.2 0.6 0.8
Total reported revenue 14.9 4.4 19.3 16.1 3.7 19.8
Reported revenue growth (%) (8)% 21% (3)%
Underlying(5) revenue adjustment:
Events - - - - 0.7 0.7
Total underlying(5) revenue 14.9 4.4 19.3 16.1 4.4 20.5
Underlying(5) revenue growth (%) (8)% 1% (6)%
The table below reconciles the adjusted(1) operating profit/(loss) for each
segment to the adjusted(1) EBITDA:
Xeim The Lawyer Central Total Xeim The Lawyer Central Total
2023 2023 2023 2023 2022 2022 2022 2022
£m £m £m £m £m £m £m £m
Revenue 14.9 4.4 - 19.3 16.1 3.7 - 19.8
Adjusted(1) operating costs (12.3) (2.8) (1.8) (16.9) (13.3) (2.8) (1.8) (17.9)
Adjusted(1) operating profit/(loss) 2.6 1.6 (1.8) 2.4 2.8 0.9 (1.8) 1.9
Adjusted(1) operating margin 17% 36% - 12% 17% 24% - 10%
Depreciation and amortisation 0.8 0.2 0.1 1.1 1.1 0.3 0.1 1.5
Adjusted(1) EBITDA 3.4 1.8 (1.7) 3.5 3.9 1.2 (1.7) 3.4
Adjusted(1) EBITDA margin 23% 41% - 18% 24% 32% - 17%
Xeim
Xeim's revenue decreased by 8% for the first half of 2023. Adjusted(1) EBITDA
reduced by £0.5m to £3.4m on the back of the lower revenue partially offset
by a reduction in operating costs from careful management, resulting in a 1%
decrease in EBITDA margin to 23%.
Xeim contains three of the Group's Flagship 4 brands - Econsultancy, MW Mini
MBA and Influencer Intelligence - which have contributed to this performance:
· Econsultancy revenue reduced by 9%, mainly because of a fall in advertising
related Marketing Solutions revenue and customer-driven delays on execution
and delivery of Training and Advisory contracts, offset by a marginal increase
in subscription revenue from increased renewal rates of 86% in H1 2023 (H1
2022: 73%);
· The MW Mini MBA grew 7% due to a 15% increase in yields from price rises and
tighter management of discounts to corporate customers for our spring
Marketing and Brand courses with only a small reduction of 4% in volumes to
3,200 delegates; and
· Influencer Intelligence renewal rates in H1 2023 of 81% were lower than last
year (H1 2022: 86%), but a good result due to difficult trading conditions in
our main customer sectors of retail and fashion. Together with an increasing
trend on new business sales, this resulted in a book of business and revenue
marginally above H1 2022.
In addition, on our Core brands:
· Marketing Week continues to lead the marketing community and drive audiences
that support our Core Brands such as the Festival of Marketing. However, the
macro-economic uncertainty, particularly in the advertising sector, has
resulted in a 36% reduction in non-strategic Marketing Solutions revenue;
· Oystercatchers' revenue has increased 37% compared to the comparative period
as a result of new business wins and repeat customer business in the blue-chip
corporate market;
· Really B2B, our award-winning demand generation agency, is showing a 22%
reduction in Marketing Services revenue compared to H1 2022 due to lower
repeat business, but is in line with the revenue achieved in H2 2022 after
some significant new business wins; and
· Fashion and Beauty Monitor has flat revenue compared to H1 2022 due to a small
decrease in renewal rates compared to 2022 offset by an increase in new
business.
The Lawyer
Revenue for The Lawyer increased 21% on a reported basis. Excluding the timing
of The Lawyer Awards that took place in June (2022: July), underlying revenue
increased 1% compared to H1 2022 with an increase in higher quality revenue
from Premium Content offset by a decrease in Marketing Solutions revenue of
32% and lower revenue from other events.
Adjusted(1) EBITDA increased by £0.6m to £1.8m on the back of the higher
revenue while operating costs were flat year-on-year from careful management,
resulting in an increase in EBITDA margin to 41% (H1 2022: 32%).
The Lawyer achieved corporate subscription renewal rates by value of 105%,
which together with good renewal rates of 100% on Signal (the subscription
service offering in-depth strategic insight and benchmarking of markets,
clients and competitors) and a consistent flow of new business, has resulted
in 11% growth of Premium Content revenue.
The Lawyer achieved a significant increase to £1.2m of Events revenue in H1
2023 following the re-instatement of The Lawyer Awards to its historical
timing in June.
Central
Central operating costs are flat compared to H1 2022 after careful cost
management.
Dividends
In line with the Group's dividend policy to distribute a minimum of 40% of
adjusted(1) retained earnings or 1.0 pence per share per annum, the Board has
announced an increased interim dividend for 2023 of 0.6 pence per share (H1
2022: 0.5 pence). This will be paid on 20 October 2023 to all shareholders on
the register as at close of business on 6 October 2023.
Balance Sheet
The balance sheet of the Group remains strong albeit with reduced levels of
net cash after paying out £8.0m in special and ordinary dividends during the
period. Healthy cash collection during the period has resulted in a decrease
in days sales outstanding. Non-current assets have increased since 31 December
2022 in relation to the new office lease with a right of use asset and related
lease liability of £2.9m being recognised on 1 January 2023 and an increase
in the deferred tax assets in relation to losses carried forward (see note 5).
Principal Risks and Uncertainties
The principal risks and uncertainties currently faced by the Group are
reviewed regularly by the Board. The principal risks faced by the Group are
set out below and the Board considers the risk levels to have remained the
same since December 2022, except where stated otherwise.
· The world economy has been severely impacted by the Covid pandemic and the
conflict in Ukraine. The UK is forecast to be in recession and the inflation
rate is c.8%. The Group continues to have sensitivity to UK/sector volatility
and economic conditions. The impact has been acute on some of Centaur's target
market segments including fashion, retail and entertainment sectors and is
also having some impact on in-person events. The Board considers this risk
to have increased.
· Failure to deliver and maintain a high growth performance culture. Centaur's
success depends on growing the business and completing the MAP23 strategy. To
do this, it is reliant in large part on its ability to recruit, motivate and
retain highly experienced and qualified employees in the face of often intense
competition from other companies, especially in London.
· Fraudulent or accidental breach of IT network, major systems failure or
ineffective operation of IT and data management systems leads to loss, theft
or misuse of financial assets, proprietary or sensitive information and / or
inoperative core products, services, or business functions.
· Regulatory: GDPR, PECR and other similar legislation include strict
requirements regarding how Centaur handles personal data, including that of
customers. There is risk of a fine from the ICO, third-party claims as well as
reputational damage if we do not comply.
Forward Looking Statements
Certain statements in this interim report are forward looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that these expectations
will prove to be correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. It undertakes no obligation to
update any forward-looking statements whether because of new information,
future events or otherwise.
Statement of Directors' Responsibilities
The Directors confirm that the condensed consolidated interim financial
statements for the six-month period ended 30 June 2023 have been prepared in
accordance with the Disclosure Guidance and Transparency Rules (DTR) of the
Financial Conduct Authority and with International Financial Reporting
Standards ('IFRSs') and IAS 34, 'Interim financial reporting', in line with
UK-adopted international accounting standards.
In addition, the interim management report herein includes a fair review of
the information required by DTR 4.2.7 and DTR 4.2.8, namely:
· An indication of important events that have occurred during the period and
their impact on the condensed consolidated interim financial statements, and a
description of the principal risks and uncertainties for the remaining period
of the financial year; and
· Material related party transactions in the period and any material changes in
the related party transactions described in the last annual report.
The Directors of Centaur Media Plc are listed in the Centaur Media Plc Annual
Report for the year ended 31 December 2022. A list of current directors is
maintained on the Centaur Media Plc website.
Going Concern
In assessing the going concern status, the Directors considered the Group's
activities, the financial position of the Group and their identification of
any material uncertainties and the principal risks to the Group. The Directors
have a reasonable expectation that the Group has adequate resources to
continue in operational existence for at least 12 months from the date of this
report and for this reason, they continue to adopt the going concern basis in
preparing the condensed consolidated interim financial statements.
The interim report was approved by the Board of Directors and authorised for
issue on 19 July 2023 and signed on behalf of the Board by:
Swag Mukerji, Chief Executive Officer
Notes:
(a) The maintenance and integrity of the Centaur Media plc website is the
responsibility of the directors; the work carried out by the auditor does not
involve consideration of these matters and, accordingly, the auditor accepts
no responsibility for any changes that may have occurred to the condensed
consolidated interim financial statements since they were initially presented
on the website.
(b) Legislation in the United Kingdom governing the preparation and dissemination
of the condensed consolidated interim financial statements may differ from
legislation in other jurisdictions.
Footnotes:
(1 ) Adjusted EBITDA is adjusted operating profit before depreciation and
amortisation. Adjusted results exclude adjusting items, as detailed in note 4
of this Interim Report.
(2 ) For reconciliation of adjusted operating cash flow see note 1 of this
Interim Report.
(3 ) Cash conversion is calculated as adjusted operating cash flow
(excluding any one-off significant cash flows) / adjusted EBITDA.
(4) Net cash is the total of cash and cash equivalents and short-term
deposits. There are no overdrafts or borrowings in the Group.
(5) Underlying revenue is adjusted for the impact of The Lawyer Awards
timing in 2022. There are no underlying revenue adjustments relating to Xeim.
INDEPENDENT AUDITOR'S REVIEW REPORT TO CENTAUR MEDIA PLC
On the interim financial information for the six months ended 30 June 2023
Conclusion
We have been engaged by Centaur Media Plc (the "Group"), to review the
condensed set of financial statements in the half-yearly financial report for
the six months ended 30 June 2023 which comprise the condensed consolidated
statement of comprehensive income, condensed consolidated statement of changes
in equity, condensed consolidated statement of financial position, condensed
consolidated cash flow statement and the related notes 1 to 19.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2023 is not prepared in all
material aspects, in accordance with UK-adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 - "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued for use in the United Kingdom. A
review of interim financial information consists of making inquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted international accounting standards. The
condensed set of financial statements included in this half-yearly report has
been prepared in accordance with UK-adopted International Accounting Standard
34 "Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE(UK) 2410, however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with UK adopted International Accounting Standard 34 and the
Disclosure Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority .
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Group a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusion
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the Group in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" issued by the
Financial Reporting Council. Our work has been undertaken so that we might
state to the Group those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Group, for our review work, for this report, or for the conclusions
we have formed.
Crowe U.K. LLP
Statutory Auditor
London, United Kingdom
19 July 2023
Condensed consolidated Statement of Comprehensive Income
for the six months ended 30 June 2023
Six months ended 30 June (unaudited)
Adjusted results(1) Adjusting items(1) Reported results Adjusted results(1) Adjusting items(1) Reported results
2023 2023 2023 2022 2022 2022
Note £'000 £'000 £'000 £'000 £'000 £'000
Revenue 2 19,289 - 19,289 19,793 - 19,793
Net operating expenses 3 (16,873) (606) (17,479) (17,916) (787) (18,703)
Operating profit/(loss) 2,416 (606) 1,810 1,877 (787) 1,090
Finance income 114 - 114 6 - 6
Finance costs (142) - (142) (79) - (79)
Net finance costs (28) - (28) (73) - (73)
Profit/(loss) before tax 2,388 (606) 1,782 1,804 (787) 1,017
Taxation 5 (27) 145 118 (454) 180 (274)
Profit/(loss) for the period attributable to owners of the parent 2,361 (461) 1,900 1,350 (607) 743
Total comprehensive income/(loss) attributable to owners of the parent 2,361 (461) 1,900 1,350 (607) 743
Earnings/(loss) per share attributable to owners of the parent 6
Basic 1.6p (0.3p) 1.3p 0.9p (0.4p) 0.5p
Fully diluted 0.9p 1.6p (0.3p) 1.3p 0.9p (0.4p)
(1) Adjusting items are disclosed in note 4.
Condensed consolidated Statement of Changes in Equity
for the six months ended 30 June 2023
Reserve
for Foreign
Share Own Share shares to Deferred currency Retained Total
capital shares premium be issued shares reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Unaudited
At 1 January 2022 15,141 (5,471) 1,101 471 80 143 35,643 47,108
Profit for the period and
total comprehensive income - - - - - - 743 743
Currency translation adjustment - - - - - (37) - (37)
Transactions with owners:
Dividends (note 13) - - - - - - (724) (724)
Purchase of own shares - (604) - - - - - (604)
Fair value of employee services - - - 299 - - - 299
Tax on share-based payments - - - - - - (21) (21)
As at 30 June 2022 15,141 (6,075) 1,101 770 80 106 35,641 46,764
Unaudited
At 1 January 2023 15,141 (5,863) 1,101 1,127 80 144 37,096 48,826
Profit for the period and
total comprehensive income - - - - - - 1,900 1,900
Currency translation adjustment - - - - - (6) - (6)
Transactions with owners:
Dividends (note 13) - - - - - - (8,046) (8,046)
Purchase of own shares (note 14) - (322) - - - - - (322)
Fair value of employee services - - - 435 - - - 435
Tax on share-based payments - - - - - - (169) (169)
As at 30 June 2023 15,141 (6,185) 1,101 1,562 80 138 30,781 42,618
Condensed consolidated Statement of Financial Position as at 30 June
2023
Registered number 04948078
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
Note £'000 £'000 £'000
Non-current assets
Goodwill 7 41,162 41,162 41,162
Other intangible assets 8 3,114 2,611 2,748
Property, plant and equipment 2,751 387 3,613
Deferred tax assets 3,287 1,673 2,153
Other receivables 9 176 27 302
50,490 45,860 49,978
Current assets
Trade and other receivables 9 5,735 5,357 6,745
Short-term deposits 10 6,000 8,500 3,500
Cash and cash equivalents 2,839 7,501 10,738
Current tax asset 105 165 176
14,679 21,523 21,159
Total assets 65,169 67,383 71,137
Current liabilities
Trade and other payables 11 (9,411) (9,652) (10,203)
Lease liability 12 (918) - (1,900)
Deferred income (10,648) (8,885) (10,748)
(20,977) (18,537) (22,851)
Net current (liabilities)/assets (6,298) 2,986 (1,692)
Non-current liabilities
Lease liability 12 (1,505) - (1,488)
Deferred tax liabilities (69) (20) (34)
(1,574) (20) (1,522)
Net assets 42,618 48,826 46,764
Capital and reserves attributable to owners of the Company
Share capital 15,141 15,141 15,141
Own shares (6,185) (5,863) (6,075)
Share premium 1,101 1,101 1,101
Other reserves 1,642 1,207 850
Foreign currency reserve 138 144 106
Retained earnings 30,781 37,096 35,641
Total equity 42,618 48,826 46,764
The notes are an integral part of these condensed consolidated interim
financial statements. The condensed consolidated interim financial statements
were approved by the Board of Directors on 19 July 2023 and were signed on its
behalf by:
Simon Longfield
Chief Financial Officer
Condensed consolidated Cash Flow Statement
for the six months ended 30 June 2023
Six months ended 30 June (unaudited)
2023 Re-presented(2)
2022
Note £'000 £'000
Cash flows from operating activities
Cash generated from operations 16 3,990 4,200
Tax paid (1,556) (30)
Interest paid (40) -
Net refund of lease deposit 9 116 -
Net cash generated from operating activities 2,510 4,170
Cash flows from investing activities
Purchase of property, plant and equipment (72) (173)
Purchase of intangible assets 8 (763) (601)
Interest received 10 105 -
Proceeds from/(investment in) short-term deposits 10 2,500 (3,500)
Net cash flows generated from/(used in) investing activities 1,770 (4,274)
Cash flows from financing activities
Finance costs paid (37) (35)
Extension fee on revolving credit facility (20) -
Repayment of obligations under lease 12 (486) (947)
Purchase of own shares 14 (322) (604)
Dividends paid to Company's shareholders 13 (8,046) (724)
Net cash flows used in financing activities (8,911) (2,310)
Net decrease in cash and cash equivalents (4,631) (2,414)
Cash and cash equivalents at beginning of period 7,501 13,065
Effect of foreign currency exchange rate changes (31) 87
Cash and cash equivalents at end of period 2,839 10,738
(2) See note 1 for description of prior period re-presentation.
Notes to the condensed consolidated interim financial statements
1 Summary of explanatory information and significant accounting policies
General information
Centaur Media Plc ('the Company') is a public company limited by shares and
incorporated and domiciled in England and Wales. The address of the Company's
registered office is 10 York Road, London, SE1 7ND, United Kingdom. The
Company is listed on the London Stock Exchange.
These condensed consolidated interim financial statements were approved for
issue on 19 July 2023.
These condensed consolidated interim financial statements are unaudited and do
not constitute the statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The Group's most recent statutory financial statements,
which comprise the Annual Report and audited Financial Statements for the year
ended 31 December 2022 were approved by the Board of Directors on 14 March
2023 and delivered to the Registrar of Companies. The report of the auditor
on those financial statements was not qualified, did not contain an emphasis
of matter paragraph and did not contain any statement under Section 498 of the
Companies Act 2006.
The consolidated financial statements of the Group as at and for the year
ended 31 December 2022, are available upon request from the Company's
registered office or at www.centaurmedia.com (http://www.centaurmedia.com) .
Accounting policies and estimates
The accounting policies adopted by the Group in the condensed consolidated
interim financial statements are consistent with those applied by the Group in
its consolidated financial statements for the year ended 31 December 2022.
The preparation of the condensed consolidated interim financial statements
requires management to make judgements, estimates and assumptions 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.
In preparing these condensed consolidated interim financial statements, 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
that applied to the consolidated financial statements as at and for the year
ended 31 December 2022.
New and amended standards adopted by the Group
'Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2)' was adopted by the Group for the financial period beginning 1
January 2023. This amendment has revised that an entity is now required to
disclose its material accounting policy information instead of its significant
accounting policies. This does not impact these consolidated interim financial
statements.
New standards and interpretations not yet adopted
There are no standards that are not yet effective and that would be expected
to have a material impact on the entity in the current or future reporting
periods and on foreseeable future transactions.
Prior period re-presentation
Prior period comparative numbers have been updated to reflect current period
presentation and disclosures. Cash flows relating to investment in short-term
deposits have been reclassified from financing cash flows to investment cash
flows in the prior period. This has been reflected within the condensed
consolidated interim cash flow statement. There is no impact on the face of
the condensed consolidated statement of comprehensive income or net assets as
a result of this change.
Basis of preparation
The condensed consolidated interim financial statements for the six-month
period ended 30 June 2023 have been prepared in accordance with the Disclosure
and Transparency rules of the Financial Conduct Authority and with UK-adopted
International Accounting Standards and IAS 34, 'Interim Financial Reporting'.
The condensed consolidated financial statements should be read in conjunction
with the Annual Report and Financial Statements for the year ended 31 December
2022, which have been prepared in accordance with UK-adopted International
Accounting Standards.
Going concern
The condensed consolidated interim financial statements have been prepared on
a going concern basis.
At 30 June 2023, the Group has cash and cash equivalents of £2,839,000 (2022:
£10,738,000), short-term deposits of £6,000,000 (2022: £3,500,000) and has
net current liabilities of £6,298,000 (2022: net current liabilities
£1,692,000). In both periods net current liabilities primarily arose from the
Group's normal high levels of deferred income relating to performance
obligations to be delivered in the future and is not a liability that is
likely to be paid in cash.
The Directors have assessed the Group's activities, the financial position of
the Group, and their identification of any material uncertainties and the
principal risks to the Group. The Directors have a reasonable expectation that
the Group has adequate resources to continue in operational existence for at
least twelve months from the date of approval of this report and for the
foreseeable future. Therefore, the Directors consider it appropriate to adopt
the going concern basis of accounting in preparing the condensed consolidated
interim financial statements.
Presentation of non-statutory measures
In addition to IFRS statutory measures, the Directors use various non-GAAP key
financial measures to evaluate the Group's performance and consider that
presentation of these measures provides shareholders with an additional
understanding of the core trading performance of the Group. The basis of the
principal adjustments is comparable with that presented in the consolidated
financial statements for the year ended 31 December 2022, and as described in
those financial statements. The measures used are explained and reconciled to
their IFRS statutory headings below.
The Directors believe that adjusted results and adjusted earnings per share
provide additional useful information on the core operational performance of
the Group to shareholders and review the results of the Group on an adjusted
basis for management purposes. The term 'adjusted' is not a defined term
under IFRS and may not therefore be comparable with similarly titled profit
measurements reported by other companies. It is not intended to be a
substitute for, or superior to, IFRS measurements of profit.
The basis of the principal adjustments is consistent with that presented in
the consolidated financial statements for the year ended 31 December 2022, and
as described in those financial statements.
For the six-month periods ended 30 June 2023 and 30 June 2022, adjustments
were made in respect of:
· Amortisation of acquired intangible assets - the amortisation charge for those
intangible assets recognised on business combinations is excluded from the
adjusted results of the Group since they are non-cash charges arising from
investment activities. As such, they are not considered reflective of the
core trading performance of the Group. Details of amortisation of intangible
assets are shown in note 8.
· Share-based payments - share-based payment expenses or credits are excluded
from the adjusted results of the Group as the Directors believe that the
volatility of these charges can distort the user's view of the core trading
performance of the Group. Details of share-based payments are shown in note
15.
The tax related to adjusting items is the tax effect of the items above that
are allowable deductions for tax purposes, calculated using the standard rate
of corporation tax.
Further details of adjusting items are included in note 4. A reconciliation
between adjusted and reported earnings per share is shown in note 6.
Adjusted operating profit
Profit before tax reconciles to adjusted operating profit as follows:
Six months ended 30 June (unaudited)
2023 2022
£'000 £'000
Profit before tax 1,782 1,017
Adjusting items:
Amortisation of acquired intangibles 39 438
Share-based payment expense 567 349
Adjusted profit before tax 2,388 1,804
Finance income (114) (6)
Finance costs 142 79
Adjusted operating profit 2,416 1,877
Adjusted operating cash flow
Adjusted operating cash flow is not a measure defined by IFRS. It is defined
as cash flow from operations excluding the impact of adjusting items, which
are defined above. The Directors use this measure to assess the performance of
the Group as it excludes volatile items not related to the core trading of the
Group. Reported cash flow from operations reconciles to adjusted operating
cash as follows:
Six months ended 30 June (unaudited)
2023 2022
£'000 £'000
Reported cash flow from operating activities 3,990 4,200
Adjusted operating cash flow 3,990 4,200
Capital expenditure (835) (774)
Post capital expenditure cash flow 3,155 3,426
Our cash conversion rate for the period was 115% (2022: 125%). It is
calculated as adjusted operating cash flow (excluding any one-off significant
cash flows) / adjusted EBITDA.
Underlying revenue growth
The Directors review underlying revenue growth in order to allow a
like-for-like comparison of revenue between years. Statutory revenue growth
reconciles to underlying revenue growth as follows:
Xeim The Lawyer Total
30 June 30 June 30 June
Unaudited Unaudited Unaudited
£'000 £'000 £'000
Reported revenue 2022 16,138 3,655 19,793
Events - The Lawyer Awards - 750 750
Underlying revenue 2022 16,138 4,405 20,543
Reported revenue 2023 14,858 4,431 19,289
Underlying revenue 2023 14,858 4,431 19,289
Reported revenue growth (8%) 21% (3%)
Underlying revenue growth (8%) 1% (6%)
Underlying revenue for 2022 includes an adjustment to reported revenue in
relation to The Lawyer Awards, which was held in the second half of 2022 after
postponement from its normal timing in the first half of the year.
Adjusted EBITDA
Adjusted EBITDA is not a measure defined by IFRS. It is defined as adjusted
operating profit before depreciation and amortisation of intangible assets
other than those acquired through a business combination. It is used by the
Directors as a measure to review performance of the Group and forms the basis
of some of the Group's financial covenants under its revolving credit
facility. Adjusted EBITDA is calculated as follows:
Six months ended 30 June (unaudited)
2023 2022
£'000 £'000
Adjusted operating profit (as above) 2,416 1,877
Depreciation of property, plant and equipment 569 969
Amortisation of computer software 488 512
Adjusted EBITDA 3,473 3,358
Net cash
Net cash is not a measure defined by IFRS. Net cash is the total of cash and
cash equivalents and short-term deposits. There are no overdrafts or
borrowings in the Group. The Directors consider the measure useful as it gives
greater clarity over the Group's liquidity as a whole. A reconciliation
between net cash and statutory measures is shown below:
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
£'000 £'000 £'000
Cash and cash equivalents 2,839 7,501 10,738
Short-term deposits 6,000 8,500 3,500
Net cash 8,839 16,001 14,238
Financial risk factors
The Group's activities expose it to a variety of financial risks: interest
rate risk, credit risk, liquidity risk, capital risk and currency risk. The
condensed consolidated interim financial statements do not include all
financial risk management information and disclosures that are required in the
annual consolidated financial statements; they should be read in conjunction
with the Group's annual consolidated financial statements for the year ended
31 December 2022.
There have been no changes in risk management processes or policies since the
year end.
Seasonality
In line with the historical seasonal performance of the business, there is an
expected greater weighting of revenue and profit derived in the second half of
each financial year. This weighting is mainly driven by the Festival of
Marketing Event in October, growth in Premium Content revenue and timing of
Training and Advisory revenue such as from MW Mini MBA. During the year ended
31 December 2022, 48% (2021: 47%) of revenue and 39% (2021: 33%) of EBITDA
occurred in the first half of the year.
2 Segmental reporting
The Group is organised around two reportable market-facing segments: Xeim and
The Lawyer. These two segments derive revenue from a combination of premium
content, training and advisory, events, marketing solutions, marketing
services and recruitment advertising. Overhead costs are allocated to these
segments on an appropriate basis, depending on the nature of the costs,
including in proportion to revenue or headcount. Corporate income and costs
have been presented separately as "Central". The Group believes this is the
most appropriate presentation of segmental reporting for the user to
understand the core operations of the Group. There is no inter-segmental
revenue.
Segment assets consist primarily of property, plant and equipment, intangible
assets (including goodwill) and trade receivables. Segment liabilities
comprise trade payables, accruals, lease liability and deferred income.
Corporate assets and liabilities primarily comprise property, plant and
equipment, intangible assets, current and deferred tax balances, cash and cash
equivalents, short-term deposits, borrowings.
Capital expenditure comprises additions to property, plant and equipment and
intangible assets.
Xeim The Lawyer Central Group
£'000 £'000 £'000 £'000
Six months ended 30 June 2023
Unaudited
Revenue 14,858 4,431 - 19,289
Adjusted operating profit/(loss) 2,565 1,640 (1,789) 2,416
Amortisation of acquired intangibles (39) - - (39)
Share-based payment expense (167) (60) (340) (567)
Operating profit/(loss) 2,359 1,580 (2,129) 1,810
Finance income 114
Finance costs (142)
Profit before tax 1,782
Taxation 118
Profit for the period 1,900
Segment assets 34,759 18,457 - 53,216
Corporate assets 11,953 11,953
Consolidated total assets 65,169
Segment liabilities (13,230) (4,657) - (17,887)
Corporate liabilities (4,664) (4,664)
Consolidated total liabilities (22,551)
Other items
Capital expenditure (tangible and intangible) 755 45 35 835
Xeim The Lawyer Central Group
£'000 £'000 £'000 £'000
Six months ended 30 June 2022
Unaudited
Revenue 16,138 3,655 - 19,793
Adjusted operating profit/(loss) 2,759 939 (1,821) 1,877
Amortisation of acquired intangibles (438) - - (438)
Share-based payments (97) (22) (230) (349)
Operating profit/(loss) 2,224 917 (2,051) 1,090
Finance income 6
Finance costs (79)
Profit before tax 1,017
Taxation (274)
Profit for the period 743
Segment assets 37,137 21,513 - 58,650
Corporate assets 12,487 12,487
Consolidated total assets 71,137
Segment liabilities (13,763) (5,246) - (19,009)
Corporate liabilities (5,364) (5,364)
Consolidated total liabilities (24,373)
Other items
Capital expenditure (tangible and intangible) 654 75 45 774
Supplemental information
Revenue by geographical location
The Group's revenue from external customers by geographical location is
detailed below:
Six months ended 30 June (unaudited)
Xeim The Lawyer Total Xeim The Lawyer Total
2023 2023 2023 2022 2022 2022
£'000 £'000 £'000 £'000 £'000 £'000
United Kingdom 8,499 3,880 12,379 9,805 2,991 12,796
Europe (excluding United Kingdom) 2,323 187 2,510 2,687 303 2,990
North America 2,116 281 2,397 2,082 283 2,365
Rest of world 1,920 83 2,003 1,564 78 1,642
14,858 4,431 19,289 16,138 3,655 19,793
Substantially all of the Group's net assets are located in the United Kingdom.
The Directors therefore consider that the Group currently operates in a single
geographical segment, being the United Kingdom.
Revenue by type
The Group's revenue by type is as follows:
Six months ended 30 June (unaudited)
Xeim The Lawyer Total Xeim The Lawyer Total
2023 2023 2023 2022 2022 2022
£'000 £'000 £'000 £'000 £'000 £'000
Premium Content 5,040 2,514 7,554 4,939 2,256 7,195
Marketing Services 7,025 - 7,025 6,703 - 6,703
Training and Advisory 525 1,179 1,704 1,236 545 1,781
Events 1,248 - 1,248 1,596 - 1,596
Marketing Solutions 914 215 1,129 1,418 317 1,735
Recruitment Advertising 106 523 629 246 537 783
14,858 4,431 19,289 16,138 3,655 19,793
3 Net operating expenses
Operating profit/(loss) is stated after charging/(crediting):
Six months ended 30 June (unaudited)
Adjusted Adjusting Reported Adjusted Adjusting Reported
results(1) items(1) results results(1) items(1) results
2023 2023 2023 2022 2022 2022
Note £'000 £'000 £'000 £'000 £'000 £'000
Employee benefits expense 9,853 - 9,853 9,658 - 9,658
Depreciation of property, plant and equipment ( ) 569 - 569 969 - 969
Amortisation of intangible assets 8 488 39 527 512 438 950
Impairment of trade receivables (75) - (75) (37) - (37)
Share-based payment expense 15 - 567 567 - 349 349
IT expenditure 1,315 - 1,315 1,194 - 1,194
Marketing expenditure 1,092 - 1,092 928 - 928
Other staff related costs 108 - 108 292 - 292
Other operating expenses 3,523 - 3,523 4,400 - 4,400
16,873 606 17,479 17,916 787 18,703
Cost of sales 7,543 - 7,543 7,436 - 7,436
Distribution costs 16 - 16 32 - 32
Administrative expenses 9,314 606 9,920 10,448 787 11,235
16,873 606 17,479 17,916 787 18,703
(1) Adjusting items are disclosed in note 4.
4 Adjusting items
Certain items are presented as adjusting. These are detailed below.
Six months ended 30 June (unaudited)
2023 2022
£'000 £'000
Amortisation of acquired intangible assets 39 438
Share-based payment expense 567 349
Adjusting items to profit before tax 606 787
Tax relating to adjusting items (145) (180)
Total adjusting items after tax 461 607
( )
5 Taxation
Six months ended 30 June (unaudited)
2023 2022
£'000 £'000
Analysis of (credit)/charge for the period
Current tax 1,615 53
Deferred tax (1,733) 221
(118) 274
The tax (credit)/charge is based on the estimated effective tax rate for the
year ended 31 December 2023 of 23.5% (2022: 22.0%). During the current period,
the Group's tax losses from 31 December 2021 were carried forward rather than
being surrendered by way of group relief against the 2022 taxable profits.
This contrasts with the position that was reflected in the financial
statements for the year ended 31 December 2022. This results in additional
taxable profits of £6,926,000 in 2022, and a corresponding increase in tax
losses brought forward at 1 January 2023. Therefore in the current period,
adjustments in respect of prior period have been made to current tax
(£1,395,000) and deferred tax (£1,753,000) to reflect the recognition of
these tax losses as a deferred tax asset instead of reducing the current tax
charge relating to 2022.
6 Earnings/(loss) per share
Basic earnings per share ('EPS') is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of shares
in issue during the period. 3,766,138 (2022: 3,314,139) shares held in the
Employee Benefit Trust and 4,550,179 (2022: 4,550,179) shares held in treasury
have been excluded in arriving at the weighted average number of shares.
For diluted earnings per share the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. This comprises shares relating to awards granted to Directors and
employees under the Group's share-based payment plans where the exercise price
is less than the average market price of the Company's ordinary shares during
the period.
Basic and diluted earnings per share have also been presented on an adjusted
basis, as the Directors believe that these measures are more reflective of the
underlying performance of the Group. These have been calculated as follows:
Six months ended 30 June (unaudited)
Adjusted results(1) Adjusting items(1) Reported results Adjusted results(1) Adjusting items(1) Reported results
2023 2023 2023 2022 2022 2022
Profit/(loss) for the period attributable to owners of the parent (£'000)
Profit/(loss) for the period 2,361 (461) 1,900 1,350 (607) 743
Number of shares (thousands)
Basic weighted average number of shares 143,421 143,421 143,421 144,013 144,013 144,013
Effect of dilutive securities - awards 8,655 - 8,655 8,185 - 8,185
Diluted weighted average number of shares 152,076 143,421 152,076 152,198 144,013 152,198
Earnings/(loss) per share (pence)
Basic earnings/(loss) per share 1.6 (0.3) 1.3 0.9 (0.4) 0.5
Fully diluted earnings/(loss) per share 1.6 (0.3) 1.3 0.9 (0.4) 0.5
(1) Adjusting items are disclosed in note 4.
7 Goodwill
2023 2022
£'000 £'000
Cost
At 1 January and 30 June 81,109 81,109
Accumulated impairment
At 1 January and 30 June 39,947 39,947
Net book value
At 1 January (audited) and 30 June (unaudited) 41,162 41,162
At 31 December 2022, a full impairment assessment was performed over the
Group's goodwill, with no impairment required.
At 30 June 2023, the reported interim results remain ahead of the analysis
scenarios used to assess impairment at the year ended 31 December 2022, for
which there was no impairment. As such no indication of impairment has been
identified and a full impairment assessment will be performed on the Group's
goodwill and acquired intangible assets at the year ending 31 December 2023,
in line with IAS 36 'Impairment of Assets'.
8 Other intangible assets
Computer software Brands and publishing rights* Customer relationships* Total
£'000 £'000 £'000 £'000
Net book value
At 1 January 2023 2,099 512 - 2,611
Additions
Separately acquired 849 - - 849
Internally generated 181 - - 181
Amortisation for the period (488) (39) - (527)
At 30 June 2023 (unaudited) 2,641 473 - 3,114
Net book value
At 1 January 2022 2,069 611 422 3,102
Additions
Separately acquired 376 - - 376
Internally generated 220 - - 220
Amortisation for the period (512) (53) (385) (950)
At 30 June 2022 (unaudited) 2,153 558 37 2,748
* Amortisation of acquired intangibles is presented as an adjusting item.
9 Trade and other receivables
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
£'000 £'000 £'000
Amounts falling due within one year
Trade receivables 3,816 4,348 5,251
Less: expected credit loss (373) (537) (531)
Trade receivables - net 3,443 3,811 4,720
Prepayments 1,800 916 1,464
Other receivables 214 430 158
Accrued income 278 200 403
5,735 5,357 6,745
Amounts falling due after one year
Other receivables 176 27 302
176 27 302
As at 30 June 2023, other receivables due after one year includes £162,000 in
relation to a deposit on the new London property lease which is fully
refundable at the end of the lease term. £278,000 was included in other
receivables due after one year at 30 June 2022 and included in other
receivables due within one year at 31 December 2022. This was in relation to a
deposit for the previous London property lease which was terminated on 31
December 2022. The lease deposit has decreased from prior year due to the move
to a smaller office space from 1 January 2023.
10 Short-term deposits
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
£'000 £'000 £'000
Short-term deposits 6,000 8,500 3,500
In May 2023, £6,000,000 was placed in three short-term deposits. The fixed
terms for these deposits range between four to six months, accruing interest
at fixed annual rates between 3.66% to 3.80%. Interest for these short-term
deposits is to be paid on maturity. These amounts remain on deposit at 30 June
2023.
11 Trade and other payables
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
£'000 £'000 £'000
Amounts falling due within one year
Trade payables 482 727 567
Accruals 7,118 7,590 7,420
Social security and other taxes 1,153 577 1,230
Other payables 658 758 986
9,411 9,652 10,203
12 Lease liability
The lease liability currently held by the Group relates to a property lease,
for which a corresponding right-of-use ('ROU') asset is held on the condensed
consolidated statement of financial position within property, plant and
equipment.
£'000
At 1 January 2023 -
Addition of lease liability 2,861
Interest expense 48
Cash outflow (486)
At 30 June 2023 2,423
At 1 January 2022 2,384
Interest expense 26
Cash outflow (947)
Addition on remeasurement of lease liability 1,925
At 30 June 2022 3,388
Current 918
Non-current 1,505
At 30 June 2023 2,423
Current 1,900
Non-current 1,488
At 30 June 2022 3,388
In June 2022 an option to extend the London office lease was exercised,
resulting in an increase to the lease liability and a corresponding increase
to the ROU asset. Subsequently, in October 2022, an agreement to terminate the
lease was signed, bringing the end date forward to 31 December 2022.
A new lease agreement was entered into with a commencement date of 1 January
2023 and therefore a lease liability and corresponding ROU asset were
recognised on 1 January 2023. This lease has a term of three years until 31
December 2025, with lease payments/cash outflows of £972,000 for the first
year of the lease term, increasing by 3.5% annually thereafter.
13 Dividends
Six months ended 30 June (unaudited)
2023 2022
£'000 £'000
Equity dividends
Final dividend for 2021: 0.5 pence per 10 pence ordinary share - 718
Special dividend for 2022: 3.0 pence per 10 pence ordinary share 4,312 -
Special dividend for 2022: 2.0 pence per 10 pence ordinary share 2,875 -
Final dividend for 2022: 0.6 pence per 10 pence ordinary share 859 -
8,046 718
An interim dividend for the six months ended 30 June 2023 of £859,000 (0.6
pence per ordinary share) will be paid on 20 October 2023 to all shareholders
on the register as at close of business on 6 October 2023.
14 Own shares reserve
During the period, the Employee Benefit Trust purchased 653,354 ordinary
shares in order to meet future obligations arising from share-based rewards to
employees. The shares were acquired at an average price of 49.4 pence per
share. The total cost of £322,000 has been recognised in the own shares
reserve in equity.
15 Share-based payments
Six months ended 30 June (unaudited)
2023 2022
£'000 £'000
Share-based payment expense 567 349
The Group's share-based payment plans are equity-settled upon vesting.
The share-based payment expense includes social security contributions which
are settled in cash upon exercise.
A reconciliation of movements in share awards under the Long-Term Incentive
Plan ('LTIP') during the period is shown below. There were no movements in any
other plans therefore they have not been disclosed. See note 22 in the Group
Annual Report for the year ended 31 December 2022 for details of all plans.
Number of awards
At 1 January 2023 7,334,737
Granted 2,579,381
Forfeited (180,344)
At 30 June 2023 9,733,744
Exercisable at 30 June 2023 1,887,510
During the period LTIP awards were granted to Executive Directors and selected
senior management. The awards granted during the period were priced using the
following model and inputs:
Grant date 12.04.2023
Share price at grant date (pence) 49.00
Weighted average fair value of awards (pence) 47.31
Vesting date 12.04.2026
Exercise price (pence) -
Expected volatility (%) 28.14
Expected dividend yield (%) -
Risk free interest rate (%) 3.75
Valuation model used Stochastic
The LTIP awards granted in 2020 vested and became exercisable on 30 June 2023
as all performance conditions were met. Awards outstanding and exercisable at
30 June 2023 have an expiry date of 31 December 2023.
16 Cash flow generated from operating activities
Six months ended 30 June (unaudited)
2023 2022
Note £'000 £'000
Profit for the period 1,900 743
Adjustments for:
Tax (credit)/charge 5 (118) 274
Finance income (114) (6)
Finance costs 142 79
Depreciation of property, plant and equipment 569 969
Amortisation of intangible assets 8 527 950
Share-based payment expense 15 567 349
Unrealised foreign exchange differences 31 (84)
Changes in working capital:
Increase in trade and other receivables (663) (656)
Decrease in trade and other payables (614) (1,240)
Increase in deferred income 1,763 2,822
Cash generated from operating activities 3,990 4,200
17 Financial instruments
Categories of financial instruments
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised in respect of each class of financial
asset, financial liability and equity instrument are disclosed in note 1(t) in
the Annual Report for the year ended 31 December 2022. All financial assets
and liabilities are measured at amortised cost.
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
£'000 £'000 £'000
Financial assets
Cash and cash equivalents 2,839 7,501 10,738
Short-term deposits 6,000 8,500 3,500
Trade receivables - net 3,443 3,811 4,720
Other receivables 390 457 460
12,672 20,269 19,418
Financial liabilities
Lease liability 2,423 - 3,388
Trade payables 482 727 567
Accruals 7,118 7,590 7,420
Other payables 658 758 986
10,681 9,075 12,361
The Directors consider the carrying value of the Group's financial assets and
liabilities measured at amortised cost is approximately equal to their fair
value.
The following tables detail the level of fair value hierarchy for the Group's
financial assets and liabilities:
Financial assets Financial liabilities
Level 1 Level 3
Cash and cash equivalents Lease liability
Short-term deposits Trade payables
Level 3 Accruals
Trade receivables - net Other payables
Other receivables
All trade and other payables are due in one year or less, or on demand.
18 Related party transactions
Transactions between Group Companies, which are related parties, have been
eliminated on consolidation and therefore do not require disclosure. The Group
has not entered into any other related party transactions in the period which
require disclosure in these interim statements.
19 Events after the reporting date
No material events have occurred after the reporting date.
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