REG - Centaur Media PLC - Preliminary results for the year ended 31 Dec 2022
15/03/2023 07:00
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RNS Number : 9779S Centaur Media PLC 15 March 2023
15 March 2023
Centaur Media Plc
Preliminary results for the year ended 31 December 2022
Robust growth in EBITDA and operating margins
despite challenging macroeconomic backdrop
Declaration of a further special dividend
On track to achieve Margin Acceleration Plan (MAP23)
Centaur Media Plc ("Centaur"), an international provider of business
intelligence, learning and specialist consultancy, is pleased to present its
preliminary results for the year ended 31 December 2022.
Financial Highlights
£m 2022 2021 Change
Statutory revenue 41.6 39.1 +6%
Adjusted EBITDA(1) margin 20% 16% +4%pts
Adjusted EBITDA(1) 8.5 6.4 +33%
Adjusted(1) operating profit 5.3 3.2 +66%
Statutory operating profit 3.9 1.6 +144%
Group statutory profit after taxation 2.8 1.4 +100%
Interim ordinary dividend per share 0.5p 0.5p
Final ordinary dividend per share 0.6p 0.5p
Special dividend per share (paid February 2023) 3.0p -
Special dividend per share (announced today) 2.0p -
Total dividends per share 6.1p 1.0p
· Revenue grew by 6% to £41.6m
· Adjusted EBITDA(1) increased by 33% to £8.5m
· Adjusted EBITDA(1) margin improved to over 20% from 16%
· Net cash(2) of £16.0m reflecting robust performance and cash generative
nature of Centaur
· 77% of revenue from high value Premium Content, Training and Advisory and
Marketing Services recurring revenue streams (2021: 74%)
· Final ordinary dividend of 0.6 pence per share proposed - total ordinary
dividends for the year of 1.1 pence per share
· Second special dividend of 2.0 pence per share announced today - total special
dividends of 5.0 pence per share
· Total return to shareholders from ordinary and special dividends of £8.8m
Business Highlights
· Flagship 4 brands drove positive momentum over last 12 months
· Growth from successfully developing more customer-centric products and
cross-selling
· Festival of Marketing moved from two years of virtual events to a sold out
in-person event
· Focus on organic growth and operational management to reinforce the Group's
resilience and maintain its operational leverage
Over the course of 2022, Centaur continued to take further steps towards
achieving the targets set out as part of its Margin Acceleration Plan (MAP23)
- to generate £45m in revenue and an Adjusted EBITDA(1) margin of 23% by the
end of 2023. In 2022, the second year of MAP23, Centaur built on its Flagship
4 strategy, the efficiency of its operating structure and the excellence of
its people.
Centaur performed well despite the macroeconomic uncertainty seen in 2022. The
Group reported revenue of £41.6m for the year (2021: £39.1m), and a Group
Adjusted EBITDA(1) of £8.5m (2021: £6.4m). Adjusted EBITDA(1) margin for
2022 improved to over 20% (2021: 16%), resulting in the Group ending the year
with a net cash(2) balance of £16.0m, up from £13.1m last year.
The Flagship 4 brands - Econsultancy, Influencer Intelligence, MW Mini MBA and
The Lawyer - have driven this positive momentum over the past twelve months.
The markets in which these brands operate, marketing across a range of
industries and the legal sector, are characterised by change. They continue to
be driven by technological advancement, structural change and globalisation.
This provides Centaur with a clear opportunity to use its deep level of
expertise to further grow in the marketing and legal sectors.
In 2022, Centaur continued to make significant progress in developing its
Flagship 4 brands:
· Econsultancy saw revenue increase by 8%, driven by double-digit growth in
subscriptions and a 38% increase in Training and Advisory revenue from large
six-figure contracts with blue-chip multinational companies;
· Influencer Intelligence built momentum over the course of the year with
double-digit revenue growth due to renewal rates at 90%, the highest for five
years;
· MW Mini MBA, our largest brand by revenue, continued to go from strength to
strength with corporate multi-seat packages up 20% and price rises
contributing to a 7% increase in revenue; and
· The Lawyer performed ahead of expectations, with a 22% increase in Premium
Content revenue due to corporate subscription renewal rates of 116% supported
by Signal and Litigation Tracker, its data-driven paid-for products. It also
held its first in-person The Lawyer Awards since 2019, pushing events revenue
up 87%.
Meanwhile, across the portfolio, Centaur was particularly encouraged by the
Festival of Marketing moving forwards from two years of virtual events to a
hybrid Festival in March and a sold out in-person Festival in October.
However, marketing solutions were challenged across both business units due to
changing customer behaviour arising from macroeconomic pressures.
The strategic objective across Centaur's suite of brands is to position them
for continued growth by developing more customer-centric products and
harnessing cross-selling opportunities, with the aim of enabling customers to
deliver better corporate outcomes through building competitive advantage in
their markets.
Alongside this strategic progress, Centaur has taken clear operational and
financial steps to focus on organic growth and manage costs to reinforce the
resilience and sustainability of the business. These steps will help maintain
the Group's operational leverage and ensure that it is best positioned to
withstand any continued macroeconomic uncertainty and achieve its ambitious
MAP23 objectives.
Ordinary Dividend and Second Special Dividend
The Group's capital allocation policy is focused on retaining sufficient cash
in the business to fund all organic investment, including technology and new
products, while maintaining sufficient funding to cover unexpected working
capital volatility. The Group will also consider complementary bolt-on
acquisitions to supplement its growth strategy. Any cash surplus to the
long-term requirements of the business will be returned to shareholders.
The success of the MAP23 strategy and the cash generative, capital light
nature of the business has resulted in surplus cash, with net cash(2) levels
of £16.0m as at 31 December 2022 (2021: £13.1m).
Therefore the Board was pleased to announce a special dividend of 3.0 pence
per share, £4.3m, in January 2023 in addition to its normal dividend policy
of distributing 40% of adjusted retained earnings, subject to a minimum
dividend of 1.0 pence per share per annum.
The proposed final dividend of 0.6 pence per share results in total ordinary
dividends for 2022 of 1.1 pence per share, above the minimum 1.0 pence per
share for the first time since the policy was initiated in 2019.
Following the payment of the first special dividend and other planned creditor
payments, net cash(2) at 10 March 2023 was £10.2m.
Given the strength of the balance sheet, Centaur is pleased to announce today
a second special dividend of 2.0 pence per share, £2.9m. Together with the
interim, final ordinary and first special dividends, total dividends are 6.1
pence per share, £8.8m.
Outlook
Centaur has undergone a significant transformation over recent years and this
is set to continue in 2023. The Group will further develop its Flagship 4 and
Core Brands to ensure it continues to lead from the front in delivering what
customers need.
The Group's strategic priority over time is to shift towards an even more
focused, customer-centric offering as it looks to gain a greater share of
repeatable, high-value revenue streams from a higher proportion of blue-chip
customers.
Centaur remains on track to meet its MAP23 objectives despite the uncertain
macroeconomic outlook, and the Group's trading has started the year in line
with the Board's expectations.
Swag Mukerji, Chief Executive Officer, commented:
"Centaur continued to perform well despite the macroeconomic uncertainty that
characterised 2022 for our customers. Our focus on understanding and
satisfying customer needs, together with our ability to continuously drive
operational improvements, raised the quality and efficiency of our business.
"Looking ahead, we are determined to keep driving performance in line with our
MAP23 objectives and beyond, by continuing to build the quality of our revenue
streams and taking advantage of the operational leverage within our business
units. I believe Centaur has the talent, strategy and financial discipline to
achieve its longer-term ambitious objectives."
(1)( ) Adjusted EBITDA is adjusted operating profit before
depreciation, amortisation and impairment. Adjusted results exclude adjusting
items as detailed in note 4 of the financial information.
(2)( ) Net cash is the total of cash and cash equivalents and
short-term deposits. There are no overdrafts or borrowings in the Group.
Enquiries
Centaur Media plc
Swag Mukerji, Chief Executive
Officer
020 7970 4000
Simon Longfield, Chief Financial Officer
Teneo
Zoë Watt / Matthew Thomlinson / Oliver Bell 07713 157561 / 07785
528363 / 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, raising the standard for insight, interaction and impact.
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.
Advise. Inform. Connect.
Our vision
We will be the 'go to' company in the international Marketing and Legal
sectors for:
· Advising businesses on how to improve their performance and returns on
investment (ROI);
· Providing business intelligence to customers using data, content and insight;
· Offering training, learning and advisory services through digital learning
initiatives and online programmes; and
· Connecting specific communities through digital media and events.
We will build strong and lasting relationships with our customers by providing
cutting-edge insight and analysis to deliver long-term sustainable returns for
our shareholders.
Our business
Centaur is an international provider of business intelligence, learning and
specialist consultancy that inspires and enables people to excel at what they
do within the marketing and legal professions. Our Xeim and The Lawyer
business units serve the marketing and legal sectors respectively and, across
both, we offer a wide range of products and services targeted at helping our
customers add value.
Our reputation is based on the trust and confidence arising from a deep
understanding of these sectors providing innovative products and services and
we have developed a strong track record for providing our customers with
market-leading insight, content, data and training. Our key strengths are the
expertise of our people, the quality of our brands and products, and our
ability to harness technology to innovate continually and develop our customer
offering. This enables us to help our customers raise their aspirations and
deliver better performance.
Highlights of the year
Financial highlights
Revenue Adjusted EBITDA
£41.6m £8.5m (20% margin)
2021: £39.1m 2021: £6.4m (16% margin)
2020: £32.4m 2020: £3.8m (12% margin)
Net Cash(1) Adjusted diluted EPS
£16.0m 2.6p
2021: £13.3m 2021: 1.9p
2020: £8.3m 2020: 0.3p
(1) Net cash is the total of cash and cash equivalents and short-term
deposits
Strategic and operational highlights
· Strong performance despite macroeconomic uncertainty, with business on track
to deliver its MAP23 objectives
· Clear operational and financial steps taken to focus on organic growth and
manage costs to reinforce the resilience of the business
· Flagship 4 brands continue to deliver growth as the average customer account
value increases
· New customer-centric products launched including Econsultancy's LMS platform,
MW Mini MBA's alumni membership, The Lawyer Briefing Room and Litigation
Tracker International
· Return to in-person events with Festival of Marketing and The Lawyer Awards
being notable successes
· Cash conversion remains strong at close to 100%
· Return of capital to shareholders announced through special dividends
· DICE, our employee engagement committee, continues to go from strength to
strength, with improvements in employee engagement and on climate-related
matters.
Performance: CEO Review
This is my fourth Annual Report as CEO of Centaur Media and, as we enter the
third and final year of our ambitious MAP23 strategy, we are laying the
foundations for the next step in Centaur's growth story.
2022 was another year marked by macroeconomic turbulence - and Centaur remains
focused on growth. We are determined to keep driving performance in line with
our MAP23 objectives, by continuing to build the quality of our revenue
streams and taking advantage of the operational leverage within our business
units.
As a reminder, the core objectives of MAP23 are to raise Group Adjusted EBITDA
margins to 23% by the end of 2023, while increasing revenues to £45m in the
same timeframe.
Financial performance
Over the course of 2022, Centaur continued to take positive steps towards our
MAP23 goals, building on the structure and processes that were put in place
through the previous year.
In 2022, Centaur reported revenues of £41.6m for the year (up from £39.1m
2021), and a Group Adjusted EBITDA of £8.5m (up from £6.4m in 2021). It was
satisfying to see that Adjusted EBITDA margin for 2022 was over 20% (up from
16% in 2021) resulting in the Group ending the year with net cash of £16.0m,
up from £13.1m last year. I am pleased with the contribution that all our
brands have continued to make to this positive momentum over the past twelve
months.
Clear operational and financial steps have been taken to focus on organic
growth and manage costs to reinforce the resilience of the business. These
include better understanding and satisfying the needs of our customers,
focusing on increasing the size and scale of customers we target, conducting
strong negotiation with suppliers and implementing flexible reward structures
to retain and recruit top talent. Employee numbers have been kept under tight
control, with only a slight increment on 2021, as increases in growth areas
were balanced by reductions in less strategically important areas of the
business. We have also maintained our central costs in line with 2021 and will
be reducing our costs in 2023, along with our carbon footprint, by moving into
a smaller London office as of 1 January 2023. These steps will maintain our
operational leverage and ensure that the business is best positioned to
withstand any wider macroeconomic uncertainty and achieve our MAP23
objectives.
Dividends
The Group has proposed a final dividend of 0.6 pence per ordinary share to
take our total ordinary dividends for 2022 to 1.1 pence, above the minimum 1.0
pence per share that we have paid previously under our dividend policy. A
special dividend of 3.0 pence per share, equivalent to £4.3m, was paid on 10
February 2023 and a further special dividend of 2.0 pence per share, to be
paid on 31 March 2023, will bring the total dividends to shareholders in
respect of 2022 to 6.1 pence per share (£8.8m).
Operational review
Centaur comprises two business units, Xeim and The Lawyer. Xeim forms 80% of
our revenues and is focused on the marketing sector across a wide range of
industries. The Lawyer is focused on the legal sector and drives the other
20%. Both sectors are undergoing significant change, driven by technological
advancement, structural change and globalisation, giving Centaur a great
opportunity to use its competitive advantage to further grow in these sectors.
Within these two business units, Centaur has four key brands - the Flagship 4
- which we consider our key growth drivers and where the business prioritises
investment and resource allocation. The Lawyer is one of these brands, while
the other three form part of the Xeim portfolio (Econsultancy, Influencer
Intelligence and MW Mini MBA). The Flagship 4 is supported by our suite of
Core Brands.
Over the course of 2022, we made significant progress in developing both our
Flagship 4 and Core Brands. Our aim is to position each of these brands for
further growth, developing cross-selling opportunities and enhancing their
shared capabilities, with the ultimate aim of enabling our customers to
deliver better corporate outcomes through building competitive advantage in
their markets.
Econsultancy continued to win large six-figure contracts from blue-chip
international companies including Unilever, Jacobs Douwe Egberts, Specsavers
and Pepsico, seeing Training and Advisory revenues increase by 38%, while
growing its core digital and training subscription services through improving
renewal rates averaging 82% for the year. A restructuring in 2022 enabled the
business to combine its consultancy and online subscription training,
enhancing the offer to customers.
Influencer Intelligence grew in momentum over the course of the year,
overcoming prior challenging market conditions, to end the year with an annual
renewal rate of 90% - the highest rate for over five years. Our focus has been
to gain a better insight as to what the needs of our customers are whilst
retaining the level of detailed analytics conducted by our research and
content team.
The MW Mini MBA continued to go from strength to strength, with corporate
multi-seat packages up 20% and related delegates now representing 43% of the
total for the year. A reduction in the volume of online sales resulted in
total delegate numbers on the main courses increasing only 1% in the year.
However this was achieved with an increase in yield of 10% from price rises
and discount management resulting in an 11% increase in revenue on the main
courses and 7% in total for the MW Mini MBA, including bespoke courses.
The Lawyer had another year of strong performance, with TheLawyer.com
corporate subscriptions, supported by Horizon, performing ahead of
expectations with renewal rates of 116%. The main corporate subscription
product is complemented by data-driven products, including Signal and
Litigation Tracker, which launched internationally in May with content from
Hong Kong, Singapore and Dubai. The new data-driven subscription product,
Signal, launched in 2021 has performed well, exceeding expectations on renewal
rate by value and volume in its first year of renewals, and on the number of
new customers. It was also recognised externally as an award-winning Market
Intelligence subscription product.
In April we also launched Briefing Room bringing together all sides of the
legal community to share thought leadership and latest content enabling
networking with companies and individuals. The Lawyer's industry-leading
conferences also returned to a fully live schedule in 2022, which was welcomed
by both sponsors and delegates. This strong performance follows last year's
similarly high renewal rates and user engagement, indicating how important The
Lawyer is to leading law firms and their fee earners.
In our portfolio of Core Brands, we were particularly encouraged by the
Festival of Marketing moving forwards from two years of virtual events to a
hybrid Festival in March and an in-person Festival in October. This year's
Festivals brought together a carefully curated group of top speakers from
the marketing world and beyond, offering the insight, provocation and
inspiration that will help those in the industry to do their job better.
People
A key part of our strategy is ensuring that we have the right people in the
right positions to deliver our intended growth. Over the course of 2022,
Centaur continued to strengthen its management team. We made several excellent
new hires, including Lisa Taylor, who joined as Xeim Group Marketing Director
and Agata Kreutzinger, who became our Group Data Director. We also identified
and promoted people within the organisation to support the progression of our
people, with Ian Baldwin joining our Executive Committee and taking on the
role of Chief Technology Officer.
Looking to 2023
Centaur has undergone a significant transformation over recent years and in
2023, we will continue to develop our Flagship 4 and Core Brands to ensure we
are leading from the front in delivering what our customers need. Our
strategic priority is to shift towards a more focused, customer-centric
offering. That means gaining a greater share of repeatable, high-value revenue
streams from a higher proportion of blue-chip customers. We will be focusing
on this across the Flagship 4 and Core Brands.
The Lawyer will accelerate its penetration of UK and European law firms with
new content and will implement a customised website user experience, a law
firm practice Signal channel and a UK law firm advisory service.
At Xeim, there will be more emphasis and focus on paid content and strategic
information via corporate packages, subscriptions and partnerships. Our
objective is to work with higher value companies as a regular partner. For
this, we have Xeim Engage, a dedicated, experienced team, creating solutions
for the top 200 marketing spend companies. Xeim's Flagship 4 brands will
continue to be supported by the Core Brands, which together will enhance
Xeim's focus on addressing the market demand for paid content and strategic
information, via corporate packages, subscriptions and partnerships.
Summary
To conclude, I wanted to reflect on the past three years and reiterate my
thanks to everyone at Centaur for their hard work and determination. As we
look to 2023, Centaur remains focused on growth. Our strategy is clear and we
are in the final stage of achieving our ambitious, but achievable targets. We
want to provide the most advanced and competitive offering in the marketplace
- to do that we will continue to build the quality of our employees, focus on
our high value revenue streams and take advantage of our operational leverage.
Key Performance Indicators
The Group has set out the following core financial and non-financial metrics
to measure the Group's performance. The KPIs are monitored by the Board and
the focus on these measures will support the successful implementation of the
MAP23 strategy. These indicators are discussed in more detail in the CEO and
financial reviews.
KPI Commentary
Financial
Underlying revenue growth(1) 2022: 6%, 2021: 21% The growth in total revenue adjusted, if applicable, to exclude the impact of
event timing differences and the revenue contribution arising from acquired or
disposed businesses.
See Chief Executive Officer's Statement and the Financial Review for
explanation of this year's growth. The revenue growth in 2021 included the
recovery in revenue following the pandemic.
Adjusted EBITDA margin(1) 2022: 20%, 2021: 16% Adjusted EBITDA as a percentage of revenue where Adjusted EBITDA is defined as
Adjusted operating profit before depreciation and impairment of tangible
assets and amortisation and impairment of intangible assets other than those
acquired through a business combination.
The continued improvement in margin reflects the increase in high-quality
revenue streams together with the impact of the Group's operational leverage.
Adjusted diluted EPS(1) 2022: 2.6 pence, 2021: 1.9 pence Diluted earnings per share calculated using the Adjusted earnings, as set out
in note 8 to the financial information.
The 37% increase in EPS reflects the increase in post-tax profitability.
Cash conversion(1) 2022: 99%, 2021: 164% The percentage by which Adjusted operating cash flow covers Adjusted EBITDA as
set out in the financial performance review.
The cash conversion in 2022 has returned to a more typical historical level
after the level achieved in 2021 which included unusually high working capital
movements.
Non-financial
Attendance at Festival of Marketing 2022: 1,778, 2021: 6,786 Number of unique delegates attending the Festival of Marketing.
This year's events were in-person compared to virtual attendees in 2021. The
number of paid delegates increased compared to the last in-person event in
2019 coupled with a significant reduction in complimentary tickets.
Delegates on Mini MBA course 2022: 6,490, 2021: 6,951 Number of delegates on Mini MBA and related eLearning courses in the year.
There was an increase in the number of total delegates on the two main courses
as well as a higher yield per delegate. 2021 included 515 delegates on a
customised course that was not repeated in 2022.
Xeim customers >£50k 2022: 88 (£13.9m), Number and value of Xeim customers that have sales in the year of greater than
£50,000.
2021: 90 (£12.1m)
The focus on higher value accounts continued in 2022 with a 17% increase in
the average value of these accounts.
Top 250 law firm customers 2022: 144 (£3.2m), Number and value of top 200 UK law firms and top 50 US law firms.
2021: 152 (£2.7m) The focus on higher value accounts continued in 2022 with a 24% increase in
the average value of these accounts.
(1 ) See definitions in Financial Review .
Performance: Financial Review
Overview
After the recovery in 2021 following the challenges posed by the pandemic, new
economic uncertainties impacted Centaur's trading. Despite these
uncertainties, Centaur continued to focus on organic revenue growth
particularly through its higher value revenue streams of Premium Content and
Training and Advisory which together grew 15%. This growth was enhanced by the
return to a full schedule of in-person events, including The Lawyer Awards and
the Festival of Marketing, pushing up revenue from events by 23%. These growth
areas were offset by a reduction of 25% in total revenue from Marketing
Solutions and Recruitment Advertising and a 14% reduction in Marketing
Services.
Our continued focus on tight control of costs resulted in only a 1% increase
in operating expenses demonstrating the operational leverage within Centaur
and its ability to maintain its consistent improvement in profitability. All
of this resulting in generation of free cash flow through good cash
conversion.
Performance
Group
Statutory revenue rose by £2.5m to £41.6m in 2022, an increase of 6%. Xeim
increased 4% and The Lawyer 19%. Revenue generated from outside the UK
remained steady at 36% (2021: 37%) showing 9% growth across customers in the
UK and Europe offset by a 3% decline in the rest of the world. Throughout 2022
we did not engage in any business with Russian customers, the impact of which
is negligible compared to our results for 2021.
Adjusted EBITDA increased by 33% from £6.4m to £8.5m at a margin of 20%
(2021: 16%), showing promising progress towards our MAP23 targets of a 23%
margin in 2023. This improved margin was on increased revenues, demonstrating
the increase in our high-quality revenue streams, resolute cost control and
the operational leverage within the Group. Despite inflationary pressure,
operating costs in the Central segment were flat in 2022 compared to 2021.
The Group posted an increase of 66% in Adjusted operating profit to £5.3m
(2021: £3.2m) as a result of the increase in Adjusted EBITDA. The Group
achieved an Adjusted profit after taxation of £3.9m (2021: £2.8m).
During 2022, we have increased our net cash (net cash is the total of cash and
cash equivalents and short-term deposits) balances from £13.1m to £16.0m,
mainly as a result of a focus on cash management, the increase in EBITDA and
healthy cash collections from customers.
Xeim
Xeim's revenue for 2022 was £33.3m, an increase of 4% from £32.1m in 2021.
Premium Content in 2022 rose 11% with growth in Flagship brands Econsultancy
and Influencer Intelligence both of which had improved renewal rates compared
to 2021 and despite a tougher year for new business.
Revenue from Training and Advisory also showed year-on-year growth of 15% as a
result of a robust trading performance by Econsultancy, Oystercatchers and
from MW Mini MBA's marketing and brand courses. Recruitment Advertising grew
5% with a strong performance in H1, partially offset by slowing demand in H2.
Conversely, it was a difficult year for Marketing Services and Marketing
Solutions which saw year-on-year declines in revenue of 14% and 29%
respectively, resulting from lower recurring revenues and new business
generation. Events revenue was at a similar level to 2021 but was mainly
driven by delegates and sponsorship revenues from the in-person Festival of
Marketing compared to virtual events in the previous year.
Xeim posted an Adjusted EBITDA of £8.5m for the year, an increase of 29% from
£6.6m in 2021. This was driven by a combination of increased revenue and a
decrease in costs.
Xeim contains three of the Group's Flagship 4 brands - Econsultancy,
Influencer Intelligence and MW Mini MBA.
After facing difficulties posed by the pandemic in previous years,
Econsultancy has continued its momentum from 2021 and has grown both its
Premium Content and Training and Advisory revenue streams in 2022. Including
an offset from a reduction in Events and Marketing Solutions revenue, total
Econsultancy revenue has increased by 8%.
Premium Content revenue benefitted from our continued investment in
Econsultancy's blended multi-touch learning strategy resulting in an improved
subscription renewal rate of 82% (2021: 70%). Econsultancy's Training and
Advisory revenue had an excellent year with 38% growth on 2021, continuing to
win large digital training and consultancy contracts with blue chip
international companies.
Influencer Intelligence revenue increased 13% in the year, following the
post-Covid recovery of the retail and fashion industries. Renewal rates
improved significantly from Q2 2021 and continued throughout 2022, with the
annual renewal rate of 90% in 2022 at the highest rate seen over the past five
years. The success of renewals was partially offset by muted performance in
winning new business during the year.
The MW Mini MBA's strong growth in recent years has slowed with delegate
numbers on the main courses up only 1% year-on-year, but revenue on those
courses up 11% driven by a 10% yield increase. MW Mini MBA retains an
excellent Net Promoter Score of +74 and strong loyalty from recurring
corporate customers.
Of our core Xeim brands, Fashion Monitor showed growth due to strong renewals
up to 92% from 73% in the prior year, while Really B2B and Festival of
Marketing both saw revenue fall by approximately 15%. Really B2B struggled
with lack of new business contracts to drive renewal and upsell. Festival of
Marketing fell short of delegate and sponsorship revenues for its March event,
but held a successful and fully booked festival in October.
The Lawyer
Overall revenues for The Lawyer grew by 19%. Premium Content revenue showed
strong growth of 22% primarily from TheLawyer.com corporate subscriptions
performance with an impressive renewal rate of 116%, supported by Signal with
a further year of significant new business and a notable first year of
renewals at a 102% renewal rate. Events also had a particularly strong year
with the first in-person The Lawyer Awards since 2019. The Lawyer retains a
90% penetration of the top 100 law firms demonstrating the value delivered to
our customers.
This performance was partially offset with downsides in Marketing Solutions
and Recruitment Advertising reducing 33% and 15% respectively.
This led to a rise in Adjusted EBITDA from £2.7m in 2021 to £3.1m in 2022 at
a margin of 37%. The underlying business is performing strongly with resilient
renewal rates and continued engagement by users indicating how important The
Lawyer is to leading law firms and their fee earners.
Measurement and non-statutory adjustments
The statutory results of the Group are presented in accordance with UK-adopted
International Accounting Standards (IFRS). The Group also uses alternative
reporting and other non-GAAP measures as explained below and as defined in the
table at the end of this section.
Adjusting items
Adjusted results are not intended to replace statutory results but are
prepared to provide a better comparison of the Group's core business
performance by removing the impact of certain items from the statutory
results. The Directors believe that adjusted results and Adjusted earnings per
share are the most appropriate way to measure the Group's operational
performance because they are comparable to the prior year and consequently
review the results of the Group on an adjusted basis internally.
Statutory operating profit for the year reconciles to Adjusted operating
profit and Adjusted EBITDA as follows:
Note 2022 2021
£m £m
Statutory operating profit 3.9 1.6
Adjusting items:
Exceptional costs 4 0.1 -
Amortisation of acquired intangible assets 10 0.5 1.1
Share-based payments 22 0.8 0.5
1.4 1.6
Adjusted operating profit 5.3 3.2
Depreciation, amortisation and impairment 3 3.2 3.2
Adjusted EBITDA 8.5 6.4
Adjusted EBITDA margin 20% 16%
Adjusting items of £1.4m in the year (2021: £1.6m) are comprised as follows:
Adjusting Item Description
Exceptional costs Exceptional costs of £0.1m (2021: £nil) relate to the office lease
termination fee less the gain on remeasurement of the office lease.
Amortisation of acquired intangible assets Amortisation of acquired intangible assets of £0.5m (2021: £1.1m) has fallen
as certain assets have become fully amortised.
Share-based payments Share-based payments of £0.8m have increased in the year due to an additional
year of LTIP issuance to members of the Centaur Strategy Group (2021: £0.5m).
Segment profit
Segmental profit is reported to improve clarity around performance and
consists of the gross contribution for the Xeim and The Lawyer Business Units
less specific overheads and allocations of the central support teams and
overheads that are directly related to each Business Unit. Any costs not
attributable to either Xeim or The Lawyer, remain as part of central costs.
The table below shows the statutory revenue, which is the same as the
underlying revenue, for each Business Unit:
Xeim The Total Xeim The Total
Lawyer Lawyer
2022 2022 2022 2021 2021 2021
£m £m £m £m £m £m
Revenue
Premium Content 10.0 4.7 14.7 9.0 3.9 12.9
Training and Advisory 14.4 - 14.4 12.6 - 12.6
Marketing Services 2.9 - 2.9 3.3 - 3.3
Events 2.7 2.0 4.7 2.7 1.1 3.8
Marketing Solutions 2.9 0.6 3.5 4.2 0.8 5.0
Recruitment Advertising 0.4 1.0 1.4 0.3 1.2 1.5
Total statutory revenue 33.3 8.3 41.6 32.1 7.0 39.1
Revenue growth 4% 19% 6%
The table below reconciles the Adjusted operating profit/(loss) for each
segment to the Adjusted EBITDA:
Xeim The Lawyer Central Total Xeim The Lawyer Central Total
2022 2022 2022 2022 2021 2021 2021 2021
£m £m £m £m £m £m £m £m
Revenue 33.3 8.3 - 41.6 32.1 7.0 - 39.1
Adjusted operating costs (27.1) (5.8) (3.4) (36.3) (27.6) (4.9) (3.4) (35.9)
Adjusted operating profit/(loss) 6.2 2.5 (3.4) 5.3 4.5 2.1 (3.4) 3.2
Adjusted operating margin 19% 30% 13% 14% 30% 8%
Depreciation, amortisation and impairment 2.3 0.6 0.3 3.2 2.1 0.6 0.5 3.2
Adjusted EBITDA 8.5 3.1 (3.1) 8.5 6.6 2.7 (2.9) 6.4
Adjusted EBITDA margin 26% 37% 20% 21% 39% 16%
Net finance costs
Net finance costs were £0.1m (2021: £0.3m). The Group held positive cash
balances throughout the year and therefore, in both 2022 and 2021, finance
costs mainly relate to the commitment fee payable for the revolving credit
facility as well as interest on lease payments for right-of-use assets. In
2022 this was offset by interest income of £0.1m.
Taxation
A tax charge of £1.0m (2021: credit of £0.1m) has been recognised for the
year. The Adjusted tax charge was £1.3m (2021: charge of £0.1m). The
Company's profits were taxed in the UK at a rate of 19.0% (2021: 19.0%), but
the resulting tax charge is at an effective tax rate of 26% due mainly to the
utilisation of tax losses for which the deferred tax asset had been recognised
at a rate of 25%, being the future rate of tax in the UK from April 2023. See
note 7 for a reconciliation between the statutory reported tax charge and the
Adjusted tax charge.
Earnings/loss per share
The Group has delivered Adjusted diluted earnings per share for the year of
2.6 pence (2021: 1.9 pence). Diluted earnings per share for the year were 1.8
pence (2021: earnings of 0.9 pence). Full details of the earnings per share
calculations can be found in note 8 to the financial information.
Dividends
Under the Group's dividend policy, Centaur targets a pay-out ratio of 40% of
Adjusted retained earnings, subject to a minimum dividend of 1.0 pence per
share per annum.
Therefore, the Group has proposed a final dividend of 0.6 pence per ordinary
share in respect of 2022. This brings the total ordinary dividends relating to
2022 to 1.1 pence (2021: 1.0 pence) per ordinary share and is the first time,
since the dividend policy was initiated, that we have paid above the 1.0 pence
per share minimum due to the increasing profitability of the Group.
Given the continued robust performance of the Group in 2022 and the resulting
year end cash balance of £16.0m, the Group announced in January 2023, and
paid in February, a special dividend of 3.0 pence per share, equivalent to
£4.3m. Looking forward and taking into account the cash needs of the Group,
the Board has taken the decision to announce a second special dividend of 2.0
pence per share, equivalent to £2.9m, to be paid in March 2023 in order to
return further cash to shareholders.
The final ordinary dividend is subject to shareholder approval at the Annual
General Meeting and, if approved, will be paid on 26 May 2023 to all ordinary
shareholders on the register at the close of business on 12 May 2023.
Cash flow
2022 2021
£m £m
Adjusted operating profit 5.3 3.2
Depreciation, amortisation and impairment 3.2 3.2
Movement in working capital (0.1) 3.1
Adjusted operating cash flow 8.4 9.5
Capital expenditure (1.4) (0.8)
Cash impact of adjusting items (0.2) -
Taxation - -
Repayment of lease obligations and net interest paid (1.9) (2.2)
Free cash flow 4.9 6.5
Purchase of own shares (0.6) (0.3)
Dividends paid to Company's shareholders (1.4) (1.4)
Increase in net cash(1) 2.9 4.8
Opening net cash(1) 13.1 8.3
Closing net cash(1) 16.0 13.1
Cash conversion 99% 164%
(1) Net cash is the total of cash and cash equivalents and short-term
deposits.
Adjusted operating cash flow is not a measure defined by IFRS. Centaur defines
Adjusted operating cash flow as cash flow from operations excluding the impact
of adjusting items. The Directors use this measure to assess the performance
of the Group as it excludes volatile items not related to the core trading of
the Group and includes the Group's management of capital expenditure.
A reconciliation between cash flow from operations and Adjusted operating
cash flow is shown in note 1(b) to the financial information.
The cash conversion of 99% (2021: 164%) has been adjusted to exclude these
one-off items. The cash conversion in 2022 has returned to a more normal level
after the high conversion rate in 2021 resulting from positive working capital
movements relating to increased bonuses and MW Mini MBA costs in 2021, both
paid after the end of the year. Conversely 2022 cash conversion is impacted by
lower bonuses but maintained close to 100% by an increase in deferred revenue
from subscriptions.
MAP23
In January 2021 the Group announced its MAP23 strategy under which it will
raise Adjusted EBITDA margins to 23% by 2023, while increasing revenues to
£45m. The increase in revenue of 6% and Adjusted EBITDA margin from 12% in
2020 to 16% in 2021 to 20% in 2022 demonstrates clear progress towards these
objectives. With current uncertainty over the economic environment going into
2023, the achievement of our MAP23 objectives will be demanding and will
require an unwavering focus on our customer's needs and control over our
costs, particularly given inflationary pressures.
The Group has made an encouraging start to 2023 and trading is in line with
our expectations. We are expecting elongated sales contracting processes with
our customers and pressure on our costs due to the wider economic situation in
the UK and internationally. We will address this through a deep focus on our
customer needs, structured pricing increases, robust negotiation with our
suppliers to tighten control of our cost base and variable remuneration
structures for our senior management team. We will also continue our work on
the climate and social aspects of our ESG agenda as set out in our ESG report.
Financing and bank covenants
On 16 March 2021 the Group signed a revolving credit facility with NatWest
which allows the Group to borrow up to £10m and has a three-year duration
with the option of two further one-year periods. On 5 December 2022,
management exercised the option to extend for one further one-year period. The
Group has not drawn down any borrowings under the facility.
Balance sheet
2022 2021
£m £m
Goodwill and other intangible assets 43.8 44.2
Property, plant and equipment 0.4 2.5
Deferred taxation 1.6 2.4
Deferred income (8.9) (7.8)
Other current assets and liabilities (4.1) (7.1)
Non-current assets and liabilities - (0.2)
Net assets before cash 32.8 34.0
Net cash(1) 16.0 13.1
Net assets 48.8 47.1
(1) Net cash is the total of cash and cash equivalents and short-term
deposits.
Goodwill and other intangibles have decreased by £0.5m as a result of the
amortisation of intangible assets. Property, plant and equipment has fallen by
£2.1m predominantly due to the cessation of the property lease meaning the
right-of-use asset has been disposed of. A right-of-use asset for the new
lease will be recognised on 1 January 2023, and is included in capital
commitments at 31 December 2022, see note 27. Deferred income has increased by
£1.0m mainly as a result of advance billings on subscriptions. Other net
current assets and liabilities have increased by £3.0m due to a lower bonus
accrual and a reduction of £1.9m in lease liabilities, offset by a reduction
in trade receivables.
Going concern
After due consideration, as required under IAS 1 Presentation of Financial
Statements, of the Group's forecasts for at least twelve months from the date
of this report and the effectiveness of risk management processes, the
Directors have concluded that it is appropriate to continue to adopt the going
concern basis in the preparation of the consolidated financial information for
the year ended 31 December 2022. As detailed under the Risk Management
section, the Directors have assessed the viability of the Group over a
three-year period to March 2026 and the Directors have a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over that period.
Conclusion
Centaur is continuing to grow organically despite the macro-economic
uncertainties and year on year is increasing the profit margin achieved.
Together with the strength of our balance sheet, Centaur is in a good position
to press on towards its ambitious MAP23 goals and longer-term vision.
Alternative performance measures
Measure Definition
Adjusted EBITDA Adjusted operating profit before depreciation and impairment of tangible
assets and amortisation and impairment of intangible assets other than those
acquired through a business combination.
Adjusted EBITDA margin Adjusted EBITDA as a percentage of revenue.
Adjusted EPS EPS calculated using Adjusted profit for the period.
Adjusting items Items as set out in the statement of consolidated income and notes 1(b) and 4
of the financial information including exceptional items, amortisation of
acquired intangible assets, profit/(loss) on disposal of assets, share-based
payment expense, volatile items predominantly relating to investment
activities and other separately reported items.
Adjusted operating costs Net operating costs excluding Adjusting items.
Adjusted operating profit Operating profit excluding Adjusting items.
Adjusted profit before tax Profit before tax excluding Adjusting items.
Adjusted retained earnings Profit for the year excluding Adjusting items.
Adjusted tax charge Tax charge excluding the tax charge on Adjusted items.
Cash conversion Adjusted operating cash flow (excluding any one-off significant cash flows) /
Adjusted EBITDA.
Exceptional items Items where the nature of the item, or its magnitude, is material and likely
to be non-recurring in nature as shown in note 4.
Free cash flow Increase/decrease in cash for the year before the impact of debt,
acquisitions, disposals, dividends and share repurchases.
Net cash The total of cash and cash equivalents and short-term deposits.
Segment profit Adjusted operating profit of a segment after allocation of central support
teams and overheads that are directly related to each segment or business
unit.
Underlying revenue Statutory revenue adjusted to exclude the impact of revenue arising from
acquired businesses, disposed businesses that do not meet the definition of
discontinued operations per IFRS 5, and closed business lines ("excluded
revenue").
Risk Management
Risk management approach
The Board has overall responsibility for the effectiveness of the Group's
system of risk management and internal controls, and these are regularly
monitored by the Audit Committee.
The Executive Committee, Company Secretary and the Head of Legal are
responsible for identifying, managing and monitoring material and emerging
risks in each area of the business and for regularly reviewing and updating
the risk register, as well as reporting to the Audit Committee in relation to
risks, mitigations and controls. As the Group operates principally from one
office and with relatively flat management reporting lines, members of the
Executive Committee are closely involved in day-to-day matters and are able to
identify areas of increasing risk quickly and respond accordingly.
The responsibility for each risk identified is assigned to a member of the
Executive Committee. The Audit Committee considers risk management and
controls regularly and the Board formally considers risks to the Group's
strategy and plans as well as the risk management process as part of its
strategic review.
The risk register is the core element of the Group's risk management process.
The register is maintained by the Company Secretary with input from the
Executive Committee and the Head of Legal. The Executive Committee initially
identifies the material risks and emerging risks facing the Group and then
collectively assesses the severity of each risk (by ranking both the
likelihood of its occurrence and its potential impact on the business) and the
related mitigating controls.
As part of its risk management processes, the Board considers both strategic
and operational risks, as well as its risk appetite in terms of the tolerance
level it is willing to accept in relation to each principal risk, which is
recorded in the Company's risk register. This approach recognises that risk
cannot always be eliminated at an acceptable cost and that there are some
risks which the Board will, after due and careful consideration, choose to
accept.
The Group's risk register, its method of preparation and the operation of the
key controls in the Group's system of internal control are regularly reviewed
and overseen by the Audit Committee with reference to the Group's strategic
aims and its operating environment. The register is also reviewed and
considered by the Board.
As part of the ongoing enhancement of the Group's risk monitoring activities,
we reviewed and updated the procedures by which we evaluate principal risks
and uncertainties during the year including the consideration of
climate-related risks as described in the ESG report.
Principal risks
The Group's risk register currently includes operational and strategic risks.
The principal risks faced by the Group in 2022, taken from the register,
together with the potential effects and mitigating factors, are set out below.
The Directors confirm that they have undertaken a robust assessment of the
principal and emerging risks facing the Group. Financial risks are shown in
note 25 to the financial information.
Rank Risk Description of risk and impact Risk mitigation/control procedure Movement in risk
1 Sensitivity to UK/sector economic conditions. The world economy has been severely impacted by the Covid pandemic and the We will mitigate the risk relating to our customers by adapting content to The Board considers this risk to have increased since the prior year.
conflict in Ukraine. The UK is forecast to be in recession and the inflation help them manage in the economic environment, focus on adding value to our
rate is over 10%. The Group continues to have sensitivity to UK/sector subscription and eLearning products and improving user experience and customer
volatility and economic conditions. The impact has been acute on some of service to protect renewal rates and new business.
Centaur's target market segments including the fashion, retail and
entertainment sectors and is also having some impact on in-person events. Centaur continues to increase international organic growth to mitigate this
risk. We are also increasing our focus on targeting larger scale multinational
The likelihood of ongoing volatility in 2023 is expected to be high including businesses which have a more diversified risk profile.
high inflation rates and there are varying views as to the timing and extent
of any recovery. Many of the Group's products are market-leading in their respective sectors
and are an integral part of our customers' operational processes, which
mitigates the risk of reduced demand for our products.
The Group regularly reviews the political and economic conditions and
forecasts for UK, including specific risks such as inflation, to assess
whether changes to its product offerings or pricing structures are necessary.
2 Failure to deliver and maintain a high growth performance culture. Centaur's success depends on growing the business and completing the MAP23 There has been a significant focus on employee communication this year The Board considers this risk to be broadly the same as the prior year.
strategy. In order to do this, it depends in large part on its ability to including weekly updates, local town hall meetings, all company Q&A
The risk that Centaur is unable to attract, develop and retain an recruit, motivate and retain highly experienced and qualified employees in the sessions and staff welfare calls.
appropriately skilled, diverse and responsible workforce and leadership team, face of often intense competition from other companies, especially in London.
and maintain a healthy culture which encourages and supports ethical
We regularly review measures aimed at improving our ability to recruit and
high-performance behaviours and decision making. Investment in training, development and pay awards needs to be compelling but retain employees. During the year we have continued to focus on bringing in
will be challenging in the current economic and operating climate. higher quality employees to replace leavers or those in new roles in order to
Difficulties in recruiting and retaining staff could lead to loss of key
enhance our strategy particularly in areas such as marketing, digitalisation,
senior staff. Implementing a diverse and inclusive working environment that allows for agile technology and data analytics.
and remote delivery is necessary to keep the workforce engaged. It is also
required for a flexible hybrid working model. We track employee engagement through weekly "check-ins" via our ENGAGE system
to gauge colleague sentiment and gain an understanding of any key risks or
Higher staff churn (a challenge for many companies in our sector) has been an challenges.
important issue during the first half of 2022 but we will need to keep our
policies and practices under review. Our employee engagement committee, DICE, who focus on Diversity, Inclusion,
Culture and Engagement, has helped to drive forward initiatives relating to
Developing the MAP23 business strategy and changes required in skill set and diversity and inclusion, through communication and social functions. This is
culture are challenging and costly. sponsored by the CEO and a Non-Executive Director.
The CEO has held Kaizen breakfasts with employees during the year with the
objective of generating a continuous performance improvement culture within
the Group.
An annual review ensures flight risks and training needs are identified which
become the focus for pay, reward and development areas. All London based
staff continue to be paid at or above the London Living Wage.
Our HR team hold exit interviews for all leavers to identify and resolve areas
of concern.
3 Fraudulent or accidental breach of our IT network, major systems failure or Centaur relies on its IT network to conduct its operations. The IT network is Appropriate IT security and related controls are in place for all key The Board considers this risk to be broadly the same as the prior year.
ineffective operation of IT and data management systems leads to loss, theft at risk of a serious systems failure or breach of its security controls due to processes to keep the IT environment safe and monitor our network systems and
or misuse of financial assets, proprietary or sensitive information and/or a deliberate or fraudulent cyber-attack or unintentional event and may include data.
inoperative core products, services, or business functions. third parties gaining unauthorised access to Centaur's IT network and systems.
Centaur has invested significantly in its IT systems and, where services are
This could result in misappropriation of its financial assets, proprietary or outsourced to suppliers, contingency planning is carried out to mitigate risk
sensitive information (including personal data or confidential information), of supplier failure.
corruption of data, or operational disruption, such as unavailability of our
websites and our digital products to users, unavailability of support Centaur continues to develop its CRM, e-commerce and finance systems and has
platforms and disruption to our revenue collection activities. removed a number of legacy systems in the last 3 years reducing the Group's
cyber risk.
Centaur could incur significant costs and suffer other negative consequences
as a result of this, such as remediation costs (including liability for stolen Centaur has a business continuity plan which includes its IT systems and there
assets or information and repair of any damage caused to Centaur's IT network is daily, overnight back-up of data, stored off-site.
infrastructure and systems) as well as reputational damage and loss of
investor confidence resulting from any operational disruption. Websites are hosted by specialist third-party providers who typically provide
warranties relating to security standards. All of our websites are hosted on a
A serious occurrence of a loss, theft or misuse of personal data could also secure platform which is cloud hosted and databases have been cleansed and
result in a breach of data protection requirements and the effects of this. updated.
See risk 4: Regulatory compliance.
The Group Head of Data ensures that rigorous controls are in place to ensure
warehouse data can only be downloaded by the data team. Integration of the
warehouse with current databases and data captured and stored elsewhere is
ongoing.
Please see risk 4: Regulatory compliance for specific mitigations relating to
the security of personal data and GDPR compliance.
4 Regulatory compliance (GDPR, PECR and other similar legislation) includes The UK General Data Protection Regulation ('GDPR'), the Data Protection Act Centaur has taken a wide range of measures aimed at complying with the key The Board considers this risk to be broadly the same as the prior year.
strict requirements regarding how Centaur handles personal data, including 2018 ('DPA') and the Privacy and Electronic Communications Regulations aspects of the GDPR, DPA and PECR.
that of customers. There is the risk of a fine from the ICO, third-party ('PECR') involve strict requirements for Centaur regarding its handling of
claims as well as reputational damage if we do not comply. personal data. Centaur's obligations under the GDPR are complex meaning this The Data Compliance Committee (overseen by the CFO) monitors Centaur's ongoing
area requires ongoing focus. compliance with data protection laws.
PECR includes specific obligations for businesses like Centaur regarding Staff are required to undertake online data protection awareness and data
electronic marketing calls, emails, texts and use of cookies and similar security awareness training annually.
technologies, among other things.
In 2021, Centaur appointed a DPO (Wiggin LLP) to oversee its compliance with
In the event of a serious breach of the GDPR and/or PECR, Centaur could be data protection laws. Further, Centaur's in-house legal team keeps abreast of
subject to a significant fine from the regulator, the ICO, and claims from material developments in data protection law and regulation and advice from
third parties including customers, as well as reputational damage. external law firms is sought where appropriate.
The maximum fines for breaches are £17.5 million (GDPR) and £500,000 (PECR) Given the increasingly global nature of our business and our customers,
respectively and directors can have liability for serious breaches of PECR's Centaur's approach to complying with data protection laws in other
marketing rules. jurisdictions is kept under review.
Other countries and jurisdictions worldwide have their own laws relating to
data and privacy. Where Centaur is required to comply with the laws in non-UK
jurisdictions there is a risk that Centaur may not be compliant with all such
laws and could therefore be subject to regulatory action and fines from the
relevant regulators and data subjects.
ICO guidance relating to use of cookies, and further changes to the laws
relating to data privacy, ad tech and electronic marketing expected in the
future, will further increase the regulatory burden for businesses like
Centaur and the requirements in this regard will need to be kept under review.
Viability Statement
In accordance with provision 31 of the UK Corporate Governance Code 2018, the
Directors have assessed the viability of the Group over a three-year period
from signing of this Annual Report to March 2026, taking account of the
Group's current position, the Group's strategy, the Board's risk appetite and,
as documented above, the principal risks facing the Group and how these are
managed. Based on the results of this analysis, the Directors have a
reasonable expectation that the Group and the Company will be able to continue
in operation and meet its liabilities as they fall due over the period to
March 2026.
The Board has determined that the three-year period to March 2026 is an
appropriate period over which to provide its viability statement because the
Board's financial planning horizon covers a three-year period. In making their
assessment, the Directors have taken account of the Group's £10m three-year
revolving credit facility (which allows extensions to 2026 on similar terms),
cash flows, dividend cover and other key financial ratios over the period.
The covenants of the facility require a minimum interest cover ratio of 4 and
net leverage not exceeding 2.5 times. In the calculation of net leverage
Adjusted EBITDA excludes the impact of IFRS 16. The Group is not expected to
breach any of these covenants in any of the scenarios run for the viability
statement and is not forecasting that the facility will be utilised during the
viability period.
The base scenario uses a three-year forecast to December 2025, which assumes
achievement of MAP23 targets, with the 2024 and 2025 forecast continuing that
strategy. The three months to March 2026 are based directly off the respective
forecast in 2025 with inflation applied. The MAP23 targets were built,
bottom-up during 2020 once the impact of Covid had become clear. The strategy
focuses on investment and resource allocation on the Flagship 4, the four
brands we consider our key drivers for organic revenue growth. Further details
of the MAP23 plan can be found in the Strategy section of this Annual Report.
The metrics in the base case are subject to stress testing which involves
sensitising key assumptions underlying the forecasts both individually and in
unison. The key sensitivity is on Adjusted EBITDA which is the primary driver
of performance in the viability assessment. This sensitised scenario assumes
that Adjusted EBITDA is lowered by 10% in every period that the viability
statement covers.
In both the base case and sensitised scenarios, the Group would not be
required to rely on the revolving credit facility in order to fund its daily
operations. Sensitising the model for changes in the assumptions and risks
affirmed that the Group and the Company would remain viable over the
three-year period to March 2026.
Going concern basis of accounting
In accordance with provision 30 of the UK Corporate Governance Code 2018, the
Directors' statement as to whether they consider it appropriate to adopt the
going concern basis of accounting in preparing the financial information and
their identification of any material uncertainties, including the principal
risks outlined above, to the Group's ability to continue to do so over a
period of at least twelve months from the date of approval of the financial
information and for the foreseeable future, being the period as discussed in
the viability statement above.
Statement of Directors' Responsibilities in respect of the financial
information
The Directors are responsible for preparing the Annual Report and the
financial information in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial information for each
financial year. Therefore, the Directors have prepared the Group financial
information in accordance with UK-adopted International Accounting Standards
(IFRS) and Company financial information in accordance with IFRS. Under
company law the Directors must not approve the financial information unless
they are satisfied that they give a true and fair view of the state of affairs
of the Group and Company and of the profit or loss of the Group and Company
for that period. In preparing the financial information, the Directors are
required to:
· Select suitable accounting policies and then apply them consistently;
· State whether applicable IFRS have been followed for the Group financial
information and applicable IFRS have been followed for the Company financial
information, subject to any material departures disclosed and explained in the
financial information;
· Make judgements and accounting estimates that are reasonable and prudent; and
· Prepare the financial information on the going concern basis unless it is
inappropriate to presume that the Group and Company will continue in business.
The Directors are also responsible for safeguarding the assets of the Group
and Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the financial information and
the Directors' Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial information may differ from legislation in
other jurisdictions.
Directors' confirmations
The Directors consider that the annual report and accounts, taken as a whole,
is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Group and Company's position and performance,
business model and strategy.
Each of the Directors, whose names and functions are listed in the Governance
Report confirm that, to the best of their knowledge:
· The Company financial information which have been prepared in accordance with
UK-adopted IASs give a true and fair view of the assets liabilities financial
position and result of the Company;
· The Group financial information which have been prepared in accordance with
UK-adopted IASs give a true and fair view of the assets liabilities financial
position and profit of the Group; and
· The Directors' Report includes a fair review of the development and
performance of the business and the position of the Group and Company together
with a description of the principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors' Report is
approved:
· So far as the Director is aware, there is no relevant audit information of
which the Group and Company's auditors are unaware; and
· They have taken all the steps that they ought to have taken as a Director in
order to make themselves aware of any relevant audit information and to
establish that the Group and Company's auditors are aware of that information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2022
Note Adjusted Adjusting Statutory Adjusted Adjusting Statutory
Results(1) Items(1) Results Results(1) Items(1) Results
2022 2022 2022 2021 2021 2021
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 2 41,593 - 41,593 39,080 - 39,080
Net operating expenses 3 (36,296) (1,419) (37,715) (35,848) (1,611) (37,459)
Operating profit / (loss) 5,297 (1,419) 3,878 3,232 (1,611) 1,621
Finance income 6 85 - 85 1 - 1
Finance costs 6 (158) - (158) (261) - (261)
Net finance costs (73) - (73) (260) - (260)
Profit / (loss) before tax 5,224 (1,419) 3,805 2,972 (1,611) 1,361
Taxation 7 (1,275) 270 (1,005) (139) 195 56
Profit / (loss) for the year attributable to owners of the parent 3,949 (1,149) 2,800 2,833 (1,416) 1,417
Total comprehensive income / (loss) attributable to owners of the parent 3,949 (1,149) 2,800 2,833 (1,416) 1,417
Earnings / (loss) per share attributable to owners of the parent 8
Basic 2.7p (0.8p) 1.9p 2.0p (1.0p) 1.0p
Fully diluted 2.6p (0.8p) 1.8p 1.9p (1.0p) 0.9p
(1) Adjusted results exclude adjusting items, as detailed in note 1(b).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Attributable to owners of the Company
Note Share Own Share Reserve Deferred Foreign currency reserve Retained Total
capital shares premium for shares shares £'000 earnings equity
£'000 £'000 £'000 to be £'000 £'000 £'000
issued
£'000
At 1 January 2021 15,141 (5,902) 1,101 607 80 166 35,977 47,170
Profit for the year and total comprehensive income - - - - - - 1,417 1,417
Currency translation adjustment - - - - - (23) - (23)
Transactions with owners in their capacity as owners:
Dividends 23 - - - - - - (1,450) (1,450)
Purchase of own shares 21 - (481) - - - - - (481)
Exercise of share awards 21,22 - 912 - (493) - - (419) -
Fair value of employee services 22 - - - 357 - - - 357
Tax on share-based payments 13 - - - - - - 118 118
As at 31 December 2021 15,141 (5,471) 1,101 471 80 143 35,643 47,108
Profit for the year and total comprehensive income - - - - - - 2,800 2,800
Currency translation adjustment - - - - - 1 - 1
Transactions with owners in their capacity as owners:
Dividends 23 - - - - - - (1,436) (1,436)
Purchase of own shares 21 - (604) - - - - - (604)
Exercise of share awards 21,22 - 212 - (54) - - (158) -
Lapsed share awards 22 - - - (14) - - 14 -
Fair value of employee services 22 - - - 724 - - - 724
Tax on share-based payments 13 - - - - - - 233 233
As at 31 December 2022 15,141 (5,863) 1,101 1,127 80 144 37,096 48,826
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Attributable to owners of the Company
Note Share Own Share Reserve Deferred Retained Total
capital shares premium for shares shares earnings equity
£'000 £'000 £'000 to be £'000 £'000 £'000
issued
£'000
At 1 January 2021 15,141 (4,135) 1,101 607 80 27,756 40,550
Loss for the year and total comprehensive loss - - - - - (2,325) (2,325)
Transactions with owners in their capacity
as owners:
Dividends 23 - - - - - (1,450) (1,450)
Exercise of share awards 22 - - - (493) - 80 (413)
Fair value of employee services 22 - - - 357 - - 357
Tax on share-based payments 13 - - - - - 88 88
As at 31 December 2021 15,141 (4,135) 1,101 471 80 24,149 36,807
Loss for the year and total comprehensive loss - - - - - (4,619) (4,619)
Transactions with owners in their capacity as owners:
Dividends 23 - - - - - (1,436) (1,436)
Exercise of share awards 22 - - - (54) - (27) (81)
Lapsed share awards 22 - - - (14) - 14 -
Fair value of employee services 22 - - - 724 - - 724
Tax on share-based payments 13 - - - - - 101 101
As at 31 December 2022 15,141 (4,135) 1,101 1,127 80 18,182 31,496
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2022
Registered number 04948078
Note 31 December 31 December
2022 2021
£'000 £'000
Non-current assets
Goodwill 9 41,162 41,162
Other intangible assets 10 2,611 3,102
Property, plant and equipment 11 387 2,484
Deferred tax assets 13 1,673 2,488
Other receivables 14 27 319
45,860 49,555
Current assets
Trade and other receivables 14 5,357 6,059
Cash and cash equivalents 15 7,501 13,065
Short-term deposits 16 8,500 -
Current tax assets 20 165 195
21,523 19,319
Total assets 67,383 68,874
Current liabilities
Trade and other payables 17 (9,652) (11,408)
Lease liabilities 18 - (1,884)
Deferred income 19 (8,885) (7,846)
(18,537) (21,138)
Net current assets / (liabilities) 2,986 (1,819)
Non-current liabilities
Lease liabilities 18 - (500)
Deferred tax liabilities 13 (20) (128)
(20) (628)
Net assets 48,826 47,108
Capital and reserves attributable to owners of the Company
Share capital 21 15,141 15,141
Own shares (5,863) (5,471)
Share premium 1,101 1,101
Other reserves 1,207 551
Foreign currency reserve 144 143
Retained earnings 37,096 35,643
Total equity 48,826 47,108
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 December 2022
Registered number 04948078
Note 31 December 31 December
2022 2021
£'000 £'000
Non-current assets
Investments 12 65,529 65,155
Deferred tax assets 13 375 190
Other receivables 14 1,225 1,197
67,129 66,542
Current assets
Trade and other receivables 14 136 161
136 161
Total assets 67,265 66,703
Current liabilities
Trade and other payables 17 (35,769) (29,896)
(35,769) (29,896)
Net current liabilities (35,633) (29,735)
Net assets 31,496 36,807
Capital and reserves attributable to owners of the Company
Share capital 21 15,141 15,141
Own shares (4,135) (4,135)
Share premium 1,101 1,101
Other reserves 1,207 551
Retained earnings 18,182 24,149
Total equity 31,496 36,807
The Company has taken advantage of the exemption available under section 408
of the Companies Act 2006 and has not presented its own statement of
comprehensive income in this financial information. The Company's loss for the
year was £4,619,000 (2021: loss of £2,325,000).
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2022
Note 2022 2021
£'000 £'000
Cash flows from operating activities
Cash generated from operations 24 8,402 9,521
Tax paid 7 (30) -
Net cash generated from operating activities 8,372 9,521
Cash flows from investing activities
Purchase of property, plant and equipment 11 (284) (51)
Purchase of intangible assets 10 (1,073) (706)
Interest received 6 63 1
Investment in short-term deposits 16 (8,500) -
Net cash flows used in investing activities (9,794) (756)
Cash flows from financing activities
Finance costs paid 6 (71) (88)
Repayment of obligations under lease 18 (1,921) (2,036)
Termination of lease 18 (243) -
Purchase of own shares 21 (604) (306)
Dividends paid to Company's shareholders 23 (1,436) (1,448)
Loan arrangement fees 24 - (107)
Net cash flows used in financing activities (4,275) (3,985)
Net (decrease) / increase in cash and cash equivalents (5,697) 4,780
Cash and cash equivalents at beginning of the year 13,065 8,300
Effects of foreign currency exchange rate changes 133 (15)
Cash and cash equivalents at end of year 15 7,501 13,065
COMPANY CASH FLOW STATEMENT
for the year ended 31 December 2022
Note 2022 2021
£'000 £'000
Cash flows from operating activities
Cash generated from operating activities 24 1,507 1,642
Cash flows from financing activities
Finance costs paid 6 (71) (87)
Dividends paid to Company's shareholders 23 (1,436) (1,448)
Loan arrangement fees 24 - (107)
Net cash flows used in financing activities (1,507) (1,642)
Net increase in cash and cash equivalents - -
Cash and cash equivalents at beginning of the year - -
Cash and cash equivalents at end of year 15 - -
NOTES TO THE FINANCIAL INFORMATION
1 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these
consolidated and Company financial information are set out below. These
policies have been consistently applied to all the periods presented, unless
otherwise stated. The financial information are for the Group consisting of
Centaur Media Plc and its subsidiaries, and the Company, Centaur Media Plc.
Centaur Media Plc is a public company limited by shares and incorporated in
England and Wales.
(a) Basis of preparation
The financial information in this preliminary announcement has been extracted
from the audited Group Financial Statements for the year ended 31 December
2022 and does not constitute statutory accounts within the meaning of section
434 of the Companies Act 2006. The Group Financial Statements for 2021 were
delivered to the registrar of companies, and those for 2022 will be delivered
in due course. The auditor's report on the Group Financial Statements for 2021
and 2022 were both unqualified and unmodified. The auditors' report was signed
on 14 March 2023. The Group Financial Statements and this preliminary
announcement were approved by the Board of Directors on 14 March 2023.
The consolidated and Company financial information have been prepared in
accordance with UK-adopted International Accounting Standards (IFRS) and with
the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The financial information has been prepared
on a historical cost basis except where stated otherwise within the accounting
policies.
In preparing the Group financial information management has considered the
impact of climate change, taking into account the relevant disclosures in the
Strategic Report, including those made in accordance with the recommendations
of the Taskforce on Climate-related Financial Disclosures. This included an
assessment of assets with indefinite and long lives as well as impairment
assessments of CGU's (including forecasted cash flows), and how they could be
impacted by measures taken to address global warming. Recognising that the
environmental impact of the Group's operations, and the use of the Group's
services, is relatively low, no issues were identified that would impact the
carrying values of such assets or have any other impact on the financial
information.
Going concern
The financial information has been prepared on a going concern basis. The
Directors have carefully assessed the Group's ability to continue trading and
have a reasonable expectation that the Group and Company have adequate
resources to continue in operational existence for at least twelve months from
the date of approval of this financial information and for the foreseeable
future, being the period in the viability statement.
At 31 December 2022, the Group had cash and cash equivalents of £7,501,000
(2021: £13,065,000) and short-term deposits of £8,500,000 (2021: £nil).
Since March 2021, the Group has had its multi-currency revolving credit
facility with NatWest. The facility consists of a committed £10m facility and
an additional uncommitted £15m accordion option, both of which can be used to
cover the Group's working capital and general corporate needs. In December
2022, the Group took the option to extend the facility for one year and the
facility now runs to March 2025, with the remaining option to extend for one
further year. £nil of this was drawn down at 31 December 2022.
The Group has net current assets at 31 December 2022 amounting to £2,986,000
(2021: net current liabilities £1,819,000). In prior year, the net current
liability position primarily arose from its normal high levels of deferred
income relating to performance obligations to be delivered in the future
rather than an inability to service its liabilities. At 31 December 2022,
there are still normal high levels of deferred income, however the increase in
net cash in 2022 of £2,936,000 (note 1(b)) and the termination of a property
lease resulting in nil lease liabilities at the balance sheet date has
resulted in achieving net current asset position. A lease agreement for new
office space was signed during the year, with a commencement date of 1 January
2023, and has been included in this report as a capital commitment (note 27).
An assessment of cash flows for the next three financial years, which has
taken into account the factors described above, has indicated an expected
level of cash generation which would be sufficient to allow the Group to fully
satisfy its working capital requirements and the guarantee given in respect of
its UK subsidiaries, to cover all principal areas of expenditure, including
maintenance, capital expenditure and taxation during this year, and to meet
the financial covenants under the revolving credit facility. The Company has
net current liabilities at 31 December 2022 amounting to £35,633,000 (2021:
£29,735,000). In both the current and prior year, these almost entirely arose
from unsecured payables to subsidiaries which have no fixed date of repayment.
The preparation of financial information in accordance with IFRS requires the
use of estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial information and the reported
amounts of revenues and expenses during the year. Although these estimates are
based on management's best knowledge of the amount, events or actions, the
actual results may ultimately differ from those estimates.
Having assessed the principal risks and the other matters discussed in
connection with the Viability Statement which considers the Group and
Company's viability over a three-year period to March 2026, the Directors
consider it appropriate to adopt the going concern basis of accounting in
preparing both the consolidated financial information of the Group and the
financial information of the Company.
New and amended standards adopted by the Group
No new standards or amendments to standards that are mandatory for the first
time for the financial year commencing 1 January 2022 affected any of the
amounts recognised in the current year or any prior year and are not likely to
affect future periods.
New standards and interpretations not yet adopted
'Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2)' will be effective for financial periods beginning on or after 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 will therefore impact the detail and number of
accounting policies disclosed from the subsequent financial year onwards.
There are no additional 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.
Comparative numbers
Prior year comparative numbers have been updated to reflect current year
presentation and disclosures. The prior year share-based payments reported
under key management compensation in note 5 have been re-presented to reflect
the share-based payment expense attributable to key management personnel
during the year. This was previously presented as the market value of shares
exercised by key management personnel during the year. There is no impact on
the face of the consolidated statement of comprehensive income.
(b) Presentation of non-statutory measures
In addition to IFRS statutory measures, the Directors use various non-GAAP key
financial measures to evaluate the Group's performance and consider that
presentation of these measures provides shareholders with an additional
understanding of the core trading performance of the Group. The measures used
are explained and reconciled to their IFRS statutory headings below.
Adjusted operating profit and adjusted earnings per share
The Directors believe that adjusted results and adjusted earnings per share,
provide additional useful information on the core operational performance of
the Group to shareholders, and review the results of the Group on an adjusted
basis internally. The term 'adjusted' is not a defined term under IFRS and may
not therefore be comparable with similarly titled profit measurements reported
by other companies. It is not intended to be a substitute for, or superior to,
IFRS measurements of profit.
Adjustments are made in respect of:
· Exceptional costs - the Group considers items of income and expense as
exceptional and excludes them from the adjusted results where the nature of
the item, or its magnitude, is material and likely to be non-recurring in
nature so as to assist the user of the financial information to better
understand the results of the core operations of the Group.
· Amortisation of acquired intangible assets - the amortisation charge for those
intangible assets recognised on business combinations is excluded from the
adjusted results of the Group since they are non-cash charges arising from
investment activities. As such, they are not considered reflective of the core
trading performance of the Group. Details of amortisation of acquired
intangible assets are shown in note 10.
· 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
22.
· Other separately reported items - certain other items are excluded from
adjusted results where they are considered large or unusual enough to distort
the comparability of core trading results year-on-year. Details of these
separately disclosed items are shown in note 4.
The tax related to adjusting items is the tax effect of the items above that
are allowable deductions for tax purposes, calculated using the standard rate
of corporation tax. See note 7 for a reconciliation between reported and
adjusted tax charges.
Further details of adjusting items are included in note 4. A reconciliation
between adjusted and statutory earnings per share measures is shown in note 8.
Profit before tax reconciles to adjusted operating profit as follows:
Note 2022 2021
£'000 £'000
Profit before tax 3,805 1,361
Adjusting items
Amortisation of acquired intangible assets 10 521 1,091
Impairment of acquired intangible assets 10 - 25
Gain on remeasurement of lease 18 (151) -
Lease termination fee 11,18 243 -
Share-based payment expense 22 806 495
Adjusted profit before tax 5,224 2,972
Finance income 6 (85) (1)
Finance costs 6 158 261
Adjusted operating profit 5,297 3,232
Adjusted operating cash flow
Adjusted operating cash flow is not a measure defined by IFRS. It is defined
as cash flow from operations excluding the impact of adjusting items, which
are defined above, and including capital expenditure. The Directors use this
measure to assess the performance of the Group as it excludes volatile items
not related to the core trading of the Group and includes the Group's
management of capital expenditure. Statutory cash flow from operations
reconciles to adjusted operating cash as below:
Note 2022 2021
£'000 £'000
Reported cash flow from operating activities 24 8,402 9,521
Adjusted operating cash flow 8,402 9,521
Capital expenditure (1,357) (757)
Post capital expenditure cash flow 7,045 8,764
Our cash conversion rate for the year was 99% (2021: 164%).
Underlying revenue growth
The Directors review underlying revenue growth in order to allow a
like-for-like comparison of revenues between years. Underlying revenues
therefore exclude the impact of revenue contribution arising from acquired or
disposed businesses and other revenue streams that are not expected to be
ongoing in future years. There were no exclusions for underlying revenue in
the current or prior year. Statutory revenue growth is equal to underlying
revenue growth and is as follows:
Xeim The Lawyer Total
£'000 £'000 £'000
Reported and underlying revenue 2021 32,108 6,972 39,080
Reported and underlying revenue 2022 33,292 8,301 41,593
Reported and underlying revenue growth 4% 19% 6%
Adjusted EBITDA
Adjusted EBITDA is not a measure defined by IFRS. It is defined as adjusted
operating profit before depreciation and impairment of tangible assets and
amortisation and impairment of intangible assets other than those acquired
through a business combination. It is used by the Directors as a measure to
review performance of the Group and forms the basis of some of the Group's
financial covenants under its revolving credit facility. Adjusted EBITDA is
calculated as follows:
Note 2022
£'000 2021
£'000
Adjusted operating profit (as above) 5,297 3,232
Depreciation of property, plant and equipment 3,11 2,028 1,808
Amortisation of computer software 3,10 1,136 1,335
Impairment of computer software 3,10 - 55
Adjusted EBITDA 8,461 6,430
Net cash
Net cash is not a measure defined by IFRS. Net cash is calculated as cash and
cash equivalents, plus short-term deposits less overdrafts and bank borrowings
under the Group's financing arrangements. The Directors consider the measure
useful as it gives greater clarity over the Group's liquidity as a whole.
Group net cash is calculated as follows:
Note 2022
£'000 2021
£'000
Cash and cash equivalents 15 7,501 13,065
Short-term deposits 16 8,500 -
Net cash 16,001 13,065
(c) Principles of consolidation
The consolidated financial information incorporates the financial information
of Centaur Media Plc and all of its subsidiaries after elimination of
intercompany transactions and balances.
(i) Subsidiaries
Subsidiaries are all entities controlled by the Group. The Group controls an
entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group
until the date that the Group ceases to control them.
On the disposal of a subsidiary, assets and liabilities of that subsidiary are
de-recognised from the consolidated statement of financial position, earnings
up to the date of loss of control are retained in the Group, and a
profit/(loss) on disposal is recognised, measured as consideration received
less the fair value of assets and liabilities disposed of.
Intercompany transactions, balances and unrealised gains on transactions
between Group companies are eliminated. The accounting policies of
subsidiaries are consistent with the policies adopted by the Group.
(ii) Employee Benefit Trust
The Centaur Employees' Benefit Trust ('Employee Benefit Trust') is a trust
established by Trust deed in 2006 for the granting of shares to applicable
employees. Its assets and liabilities are held separately from the Company and
are fully consolidated in the consolidated statement of financial position.
Holdings of Centaur Media Plc shares by the Employee Benefit Trust are shown
within the 'own shares' reserve as a deduction from consolidated equity.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial information of each of the Group's entities
are measured using the currency of the primary economic environment in which
the entity operates ('the functional currency'). The consolidated financial
information is presented in Pounds Sterling, which is the Group and Company's
functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are recognised in the consolidated
statement of comprehensive income.
(iii) Group companies
The results and financial position of the Group entities that have a
functional currency different from the presentation currency, as disclosed in
note 12, are translated into the presentation currency as follows:
· assets and liabilities for each statement of financial position presented are
translated at the closing rate at the reporting date;
· income and expenses for each statement of comprehensive income are translated
at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the
rate on the dates of the transactions); and
· all resulting exchange differences are recognised in other comprehensive
income.
On consolidation, exchange differences arising from the translation of the net
investment in foreign operations and of borrowings are recognised in other
comprehensive income. When a foreign operation is sold, exchange differences
that were recorded in equity are recognised in the consolidated statement of
comprehensive income as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
(e) Revenue recognition
Revenue is measured at the transaction price, which is the amount of
consideration to which the Group expects to be entitled in exchange for
transferring promised goods or services to the customer. Judgement may arise
in timing and allocation of transaction price when there are multiple
performance obligations in one contract. However, an annual impact assessment
is performed which has confirmed that the impact is immaterial in both the
current year and comparative year. Revenue arises from the sales of premium
content, training and advisory, marketing services, events, marketing
solutions and recruitment advertising in the normal course of business, net of
discounts and value added tax. Goods and services exchanged as part of a
barter transaction are recognised in revenue at the fair value of the goods
and services provided. Returns, refunds and other similar allowances, which
have historically been low in volume and immaterial in magnitude, are
accounted for as a reduction in revenue as they arise.
Where revenue is deferred it is held as a balance in deferred income on the
consolidated statement of financial position. At any given reporting date,
this deferred income is current in nature and is expected to be recognised
wholly in revenue in the following financial year, with the exception of
returns and credit notes, which have historically been low in volume and
immaterial in magnitude.
The Group recognises revenue earned from contracts as individual performance
obligations are met, on a stand-alone selling price basis. This is when value
and control of the product or service has transferred, being when the product
is delivered to the customer or the period in which the services are rendered
as set out in more detail below.
Premium Content
Revenue from subscriptions is deferred and recognised on a straight-line basis
over the subscription period, reflecting the continuous provision of paid
content services over this time. Revenue from individual publication sales is
recognised at the point at which the publication is delivered to the customer.
In general, the Group bills customers for premium content at the start of the
contract.
Training and Advisory
Revenue from training and advisory is deferred and recognised over the period
of the training or when a separately identifiable milestone of a contract has
been delivered to the customer. In general, the Group bills customers for
training and advisory up front or on a milestone basis as the service is
delivered.
Marketing Services
Revenue from campaign work and consultancy contracts is recognised when the
Group has obtained the right to consideration in exchange for its performance,
which is when a separately identifiable phase (milestone) of a contract has
been completed and the value and benefit of the services rendered have been
transferred to the customer. In general, the Group bills customers for
marketing services up front on a milestone basis.
Events
Consideration received in advance for events is deferred and revenue is
recognised at the point in time at which the event takes place. In general,
the Group bills customers for events before the event date.
Marketing Solutions
Marketing solutions revenue from display and bespoke campaigns is recognised
over the period that the service is provided. In general, the Group bills
customers for marketing solutions on delivery.
Recruitment Advertising
Sales of online recruitment advertising space are recognised in revenue over
the period during which the advertisements are placed. Sales of recruitment
advertising space in publications are recognised at the point at which the
publication occurs. In general, the Group bills customers for recruitment
advertising on delivery.
(f) Finance income
Interest income is recognised when it is probable that the economic benefits
will flow to the Group and the amount of income can be measured reliably.
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that asset's net carrying amount on initial
recognition.
(g) Finance costs
Finance costs are recognised in the consolidated statement of comprehensive
income in the period in which they are incurred.
(h) Investments
In the Company's financial information, investments in subsidiaries are stated
at cost less provision for impairment in value.
Investments are reviewed for impairment whenever events indicate that the
carrying value may not be recoverable. An impairment loss is recognised to the
extent that the carrying value exceeds the higher of the investments fair
value less cost of disposal and its value-in-use. An asset's value-in-use is
calculated by discounting an estimate of future cash flows by the pre-tax
weighted average cost of capital. Any impairment is recognised in the
statement of comprehensive income. If there has been a change in the estimates
used to determine the investment's recoverable amount, impairment losses that
have been recognised in prior periods may be reversed. This reversal is
recognised in the statement of comprehensive income.
(i) Income tax
The tax expense represents the sum of current and deferred tax.
Current tax is based on the taxable profit for the year. Taxable profit
differs from profit as reported in the consolidated statement of comprehensive
income because it excludes items of income or expense that are taxable or
deductible in other years, and it further includes items that are never
taxable or deductible. The Group and Company's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the reporting date.
Deferred tax is provided in full, using the liability method, on temporary
differences between the carrying amounts of assets and liabilities in the
consolidated financial information and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available to utilise those temporary differences and losses. Such assets and
liabilities are not recognised if the temporary difference arises from
goodwill or the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax is calculated at the enacted or substantively enacted tax rates
that are expected to apply in the year when the liability is settled, or the
asset is realised. Deferred tax is charged or credited to the consolidated
statement of comprehensive income, except when it relates to items charged or
credited directly to equity or other comprehensive income, in which case the
deferred tax is recognised in equity or other comprehensive income
respectively.
The carrying amount of deferred tax assets is reviewed at each reporting date
and is reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
(j) Leases
Lessee accounting
Under IFRS 16, leases are accounted for on a 'right-of-use model' reflecting
that, at the commencement date, the Group as a lessee has a financial
obligation to make lease payments to the lessor for its right to use the
underlying asset during the lease term. The financial obligation is recognised
as a lease liability, and the right to use the underlying asset is recognised
as a right-of-use ('ROU') asset. The ROU assets are recognised within
property, plant and equipment on the face of the consolidated statement of
financial position and are presented separately in note 11.
The lease liability is initially measured at the present value of the lease
payments using the rate implicit in the lease or, where that cannot be readily
determined, the incremental borrowing rate. The incremental borrowing rate is
estimated to discount future lease payments to measure the present value of
the lease liability at the lease commencement date. Such a rate is based on
what the Group estimates the lessee would have to pay a third party to borrow
the funds necessary to obtain an asset of a similar value to the right-of-use
asset, with similar terms, security and economic environment. Subsequently,
the lease liability is measured at amortised cost, with interest increasing
the carrying amount and lease payments reducing the carrying amount. The
carrying amount is remeasured to reflect any reassessment or lease
modifications, or to reflect revised in-substance fixed lease payments.
The ROU asset is initially measured at cost which comprises:
· the amount of the initial measurement of the lease liability;
· any lease payments made at or before the commencement date, less any lease
incentives received;
· any initial direct costs; and
· an estimate of costs to be incurred at the end of the lease term.
Subsequently, the ROU asset is measured at cost less accumulated depreciation
and impairment losses. Depreciation is calculated to write off the cost on a
straight-line basis over the lease term.
Using the exemption available under IFRS 16, the Group elects not to apply the
requirements above to:
· Short-term leases; and
· Leases for which the underlying asset is of a low value.
In these cases, the Group recognises the lease payments as an expense on a
straight-line basis over the lease term, or another systematic basis if that
basis is more representative of the agreement.
(k) Impairment of assets
Assets that are subject to depreciation or amortisation are reviewed for
impairment whenever events indicate that the carrying value may not be
recoverable. An impairment loss is recognised to the extent that the carrying
value exceeds the higher of the asset's fair value less cost of disposal and
its value-in-use. An asset's value-in-use is calculated by discounting an
estimate of future cash flows by the pre-tax weighted average cost of capital.
(l) Property, plant and equipment
See note 1(j) for right-of-use assets. All other property, plant and equipment
is stated at historical cost less accumulated depreciation and impairment
losses. The historical cost of property, plant and equipment is the purchase
cost together with any incidental direct costs of acquisition. Depreciation is
calculated to write off the cost, less estimated residual value, of assets, on
a straight-line basis over the expected useful economic lives to the Group
over the following periods:
Fixtures and fittings - 5 to 10 years
Computer equipment - 3 to 5 years
Right-of-use assets - over the lease term
The estimated useful lives, residual values and depreciation methods are
reviewed at the end of each reporting year, with the effect of any changes in
estimate accounted for on a prospective basis.
(m) Intangible assets
(i) Goodwill
Where the cost of a business acquisition exceeds the fair values attributable
to the separable net assets acquired, the resulting goodwill is capitalised
and allocated to the cash generating unit ('CGU') or groups of CGUs that are
expected to benefit from the synergies of the business combination. Goodwill
has an indefinite useful life and is tested for impairment annually on a Group
level or whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
Each segment is deemed to be a CGU. Goodwill and acquired intangible assets
are assessed for impairment in accordance with IAS 36 'Impairment of Assets'.
In assessing whether a write-down of goodwill and acquired intangible assets
is required, the carrying value of the segment is compared with its
recoverable amount. Recoverable amount is measured as the higher of fair value
less cost of disposal and value-in-use. Any impairment is recognised in the
consolidated statement of comprehensive income (in net operating expenses) and
is classified as an adjusting item. Impairment of goodwill is not subsequently
reversed.
In undertaking the impairment testing at 31 December 2022 management
considered its climate change risk and opportunity assessment, and after
taking account of the materiality of the expected impact, did not view there
to be any adjustment needed to the cash flow forecasts or long-term growth
rates used in the testing.
On the disposal of a CGU, the attributable amount of goodwill is included in
the determination of the profit or loss on disposal.
(ii) Brands and publishing rights and customer relationships
Separately acquired brands and publishing rights are shown at historical cost.
Brands and publishing rights and customer relationships acquired in a business
combination are recognised at fair value at the acquisition date. They have a
finite useful life and are subsequently carried at cost less accumulated
amortisation and impairment losses.
(iii) Software
Computer software that is not integral to the operation of the related
hardware is carried at cost less accumulated amortisation. Costs associated
with the development of identifiable and unique software products controlled
by the Group that will generate probable future economic benefits in excess of
costs are recognised as intangible assets when the criteria of IAS 38
'Intangible Assets' are met. They are carried at cost less accumulated
amortisation and impairment losses.
(iv) Amortisation methods and periods
Amortisation is calculated to write off the cost or fair value of intangible
assets on a straight-line basis over the expected useful economic lives to the
Group over the following periods:
Computer software - 3 to 5 years
Brands and publishing rights - 5 to 20 years
Customer relationships - 3 to 10 years or over the term of any specified contract
Separately acquired websites and content - 3 to 5 years
(n) Employee benefits
(i) Post-employment obligations
The Group and Company contribute to a defined contribution pension scheme for
the benefit of employees. The assets of the scheme are held separately from
those of the Group in an independently administered fund. Contributions to
defined contribution schemes are charged to the statement of comprehensive
income in net operating expenses when employer contributions become payable.
(ii) Share-based payments
The Group operates several equity-settled share-based payment plans, under
which the Group receives services from employees in consideration for equity
instruments (share options and shares) of the Company. Information relating to
these plans is set out in note 22.
Equity-settled share-based payments are measured at fair value at the date of
grant. Fair value is measured using either a Monte Carlo simulation
(stochastic) model or Black-Scholes option pricing model. The fair value of
the employee services received in exchange for the grant of share awards and
options is recognised as an expense on a straight-line basis over the vesting
period, based on the Group's estimate of the number of options or shares that
will eventually vest. Non-market-based performance or service vesting
conditions (for example profitability and remaining as an employee of the
entity over a specified time period) are included in assumptions about the
number of share awards and options that are expected to vest. Market-based
performance criteria is reflected in the measurement of fair value at the date
of grant.
The impact of the revision to original estimates, if any, is recognised in the
consolidated statement of comprehensive income, with a corresponding
adjustment to equity, such that the cumulative expense reflects the revised
estimate. The cumulative share-based payment expense held in reserves is
recycled into retained earnings when the share awards or options lapse or are
exercised. When options are exercised, shares are either transferred to the
employee from the Employee Benefit Trust or by issuing new shares. The social
security contributions payable in connection with the grant of share awards is
treated as a cash-settled transaction.
The award by the Company of share-based payment awards over its equity
instruments to the employees of subsidiary undertakings in the Group is
treated as a capital contribution only if it is left unsettled. The fair value
of employee services received, measured by reference to the grant date fair
value, is recognised over the vesting period as an increase to investment in
subsidiary undertakings, with a corresponding credit to equity.
A deferred tax asset is recognised on share options based on the intrinsic
value of the options, which is calculated as the difference between the fair
value of the shares under option at the reporting date and exercise price of
the share options. The deferred tax asset is utilised when the share options
are exercised or released when share options lapse. The accounting policy
regarding deferred tax is set out above in note 1(i).
(o) Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources will be required to settle the obligation and the obligation can be
reliably estimated.
(p) Equity
(i) Share capital and share premium
Ordinary and deferred shares are classified as equity. The excess of
consideration received in respect of shares issued over the nominal value of
those shares is recognised in the share premium account. Incremental costs
directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Company's equity instruments, for
example as the result of a share buyback or share-based payment plan, the
consideration paid, including any directly attributable incremental costs (net
of income taxes) is deducted from equity attributable to the owners of the
Company as treasury shares until the shares are cancelled or reissued. Where
such ordinary shares are subsequently reissued, any consideration received,
net of any directly attributable incremental transaction costs and the related
income tax effects, is included in equity attributable to the owners of the
Company.
Shares held by the Employee Benefit Trust are disclosed as own shares and
deducted from equity.
(ii) Own shares
Own shares consist of treasury shares and shares held within the Employee
Benefit Trust.
Own shares are recognised at cost as a deduction from equity shareholders'
funds. Subsequent consideration received for the sale of such shares is also
recognised in equity, with any excess of consideration received between the
sale proceeds and the original cost being recognised in share premium. No gain
or loss is recognised in the financial information on transactions in treasury
shares.
(q) Dividends
Dividends are recognised in the year in which they are paid or, in respect of
the Company's final dividend for the year, approved by the shareholders in the
Annual General Meeting.
(r) Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The Executive
Committee has been identified as the chief operating decision-maker, reviewing
the Group's internal reporting on a monthly basis in order to assess
performance and allocate resources. Refer to note 2 for the basis of
segmentation.
(s) Financial instruments
The Group has applied IFRS 9 'Financial Instruments' as outlined below:
(i) Financial assets
The Group classifies and measures its financial assets in line with one of the
three measurement models under IFRS 9: at amortised cost, fair value through
profit or loss, and fair value through other comprehensive income. Management
determines the classification of its financial assets based on the
requirements of IFRS 9 at initial recognition.
They are included in current assets, except for maturities greater than 12
months after the reporting date. These are classified as non-current assets.
The Group's financial assets comprise trade and other receivables, short-term
deposits and cash and cash equivalents in the consolidated statement of
financial position. Please see the following sections.
(ii) Trade receivables
Trade receivables are accounted for under IFRS 9, being recognised initially
at fair value and subsequently at amortised cost less any allowance for
expected lifetime credit losses under the 'expected credit loss' model. As
mandated by IFRS 9, the expected lifetime credit losses are calculated using
the 'simplified' approach.
A provision matrix is used to calculate the allowance for expected lifetime
credit losses on trade receivables which is based on historical default rates
over the expected life of the trade receivables and is adjusted for
forward-looking estimates. The allowance for expected lifetime credit losses
is established by considering, on a discounted basis, the cash shortfalls it
would incur in various default scenarios for prescribed future periods and
multiplying those shortfalls by the probability of each scenario occurring.
The historical loss rates are adjusted to reflect current and forward-looking
information on macroeconomic factors affecting the ability of the customers to
settle the receivables. The allowance is the sum of these probability weighted
outcomes. The allowance and any changes to it are recognised in the
consolidated statement of comprehensive income within net operating expenses.
When a trade receivable is uncollectible, it is written off against the
allowance account for trade receivables. Subsequent recoveries of amounts
previously written off are credited against net operating expenses in the
consolidated statement of comprehensive income. The Group defines a default as
failure of a debtor to repay an amount due as this is the time at which our
estimate of future cash flows from the debtor is affected.
(iii) Short-term deposits
Short-term deposits include cash held on deposit for a term of greater than 90
days or not readily convertible to known amounts of cash.
(iv) Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand and deposits
repayable on demand or maturing within three months from the date of
acquisition.
(v) Financial liabilities
Debt and trade and other payables are recognised initially at fair value based
on amounts exchanged, net of transaction costs, and subsequently at amortised
cost.
Interest expense on debt is accounted for using the effective interest method
and is recognised in finance costs.
(vi) Trade and other payables
Trade and other payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method.
(vii) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs
incurred and carried subsequently at amortised cost. Costs of borrowings,
including commitment fees on undrawn facilities, are recognised in the
consolidated statement of comprehensive income as incurred or, where
appropriate, across the term of the related borrowing.
(viii) Receivables from and payables to subsidiaries and the Employee Benefit
Trust
The Company has amounts receivable from and payable to subsidiaries and the
receivable from the Employee Benefit Trust which are recognised at fair value.
Amounts receivable from subsidiaries and the Employee Benefit Trust are
assessed annually for recoverability under the requirements of IFRS 9.
(t) Key accounting assumptions, estimates and judgements
The preparation of financial information under IFRS requires the use of
certain key accounting assumptions and requires management to exercise its
judgement and to make estimates. Those that have the most significant effect
on the amounts recognised in the consolidated financial information or have
the most risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Key sources of estimation uncertainty
(i) Carrying value of goodwill, other intangible assets and Company investment
estimate
In assessing whether goodwill, other intangible assets and the Company's
investment are impaired, the Group uses a discounted cash flow model which
includes forecast cash flows and estimates of future growth. If the results of
operations in future periods are lower than included in the cash flow model,
impairments may be triggered. A sensitivity analysis has been performed on the
value-in-use calculations. Further details of the assumptions and
sensitivities in the discounted cash flow model are included in notes 9 and
12.
Critical accounting judgements
(ii) Adjusting items judgement
The term 'adjusted' is not a defined term under IFRS. Judgement is required to
ensure that the classification and presentation of certain items as adjusting,
including exceptional costs, is appropriate and consistent with the Group's
accounting policy. Further details about the amounts classified as adjusting
are included in notes 1(b) and 4.
Other areas of judgement and accounting estimates
The consolidated financial information includes other areas of judgement and
accounting estimates. While these areas do not meet the definition under IAS 1
of significant accounting estimates or critical accounting judgements, the
recognition and measurement of certain material assets and liabilities are
based on assumptions and/or are subject to longer-term uncertainties. The
other areas of judgement and accounting estimates are:
· Deferred tax (estimation of forecasted future taxable profits) refer to notes
1(i) and 13;
· Lease liabilities (lease term judgement) refer to notes 1(j) and 18;
· Lease liabilities (IBR rate estimate) refer to notes 1(j) and 18; and
· Share-based payment expense (estimation of fair value) refer to notes 1(n)(ii)
and 22.
2 Segmental reporting
The Group is organised around two reportable market-facing segments: Xeim and
The Lawyer. These two segments derive revenues from a combination of premium
content, training and advisory, marketing services, events, marketing
solutions and recruitment advertising. Overhead costs are allocated to these
segments on an appropriate basis, depending on the nature of the costs,
including in proportion to revenues 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
primarily comprise trade payables, accruals and deferred income.
Corporate assets and liabilities primarily comprise property, plant and
equipment, intangible assets, current and deferred tax balances, cash and cash
equivalents, short-term deposits and lease liabilities.
Capital expenditure comprises purchases of additions to property, plant and
equipment and intangible assets.
2022 Note Xeim The Lawyer Central Group
£'000 £'000 £'000 £'000
Revenue 33,292 8,301 - 41,593
Adjusted operating profit / (loss) 1(b) 6,198 2,474 (3,375) 5,297
Amortisation of acquired intangibles 10 (521) - - (521)
Gain on remeasurement of lease 18 118 27 6 151
Lease termination fee 11,18 (190) (43) (10) (243)
Share-based payment expense 22 (260) (72) (474) (806)
Operating profit / (loss) 5,345 2,386 (3,853) 3,878
Finance income 6 85
Finance costs 6 (158)
Profit before tax 3,805
Taxation 7 (1,005)
Profit for the year 2,800
Segment assets 34,343 17,391 - 51,734
Corporate assets 15,649 15,649
Consolidated total assets 67,383
Segment liabilities (11,139) (2,778) - (13,917)
Corporate liabilities (4,640) (4,640)
Consolidated total liabilities (18,557)
Other items
Capital expenditure (tangible and intangible assets) 1,143 147 67 1,357
2021 Note Xeim The Lawyer Central Group
£'000 £'000 £'000 £'000
Revenue 32,108 6,972 - 39,080
Adjusted operating profit / (loss) 1(b) 4,469 2,110 (3,347) 3,232
Amortisation of acquired intangibles 10 (1,091) - - (1,091)
Impairment of acquired intangibles 10 (25) - - (25)
Share-based payments 22 (113) (2) (380) (495)
Operating profit / (loss) 3,240 2,108 (3,727) 1,621
Finance income 6 1
Finance costs 6 (261)
Profit before tax 1,361
Taxation 7 56
Profit for the year 1,417
Segment assets 38,167 18,216 - 56,383
Corporate assets 12,491 12,491
Consolidated total assets 68,874
Segment liabilities (13,251) (2,795) - (16,046)
Corporate liabilities (5,720) (5,720)
Consolidated total liabilities (21,766)
Other items
Capital expenditure (tangible and intangible assets) 401 188 168 757
Supplemental information
Revenues by geographical location
The Group's revenues from external customers by geographical location are
detailed below:
Xeim The Lawyer Total Xeim The Lawyer Total
2022 2022 2022 2021 2021 2021
£'000 £'000 £'000 £'000 £'000 £'000
United Kingdom 19,573 6,882 26,455 19,057 5,662 24,719
Europe (excluding United Kingdom) 5,726 609 6,335 4,567 675 5,242
North America 4,639 628 5,267 4,954 445 5,399
Rest of world 3,354 182 3,536 3,530 190 3,720
33,292 8,301 41,593 32,108 6,972 39,080
Substantially all of the Group's net assets are located in the United Kingdom.
The Directors therefore consider that the Group currently operates in a single
geographical segment, being the United Kingdom. Refer to note 12 for the
location of the Group's subsidiaries.
Revenues by type
The Group's revenues by type are as follows:
Xeim The Lawyer Total Xeim The Lawyer Total
2022 2022 2022 2021 2021 2021
£'000 £'000 £'000 £'000 £'000 £'000
Premium Content 9,980 4,748 14,728 9,006 3,882 12,888
Training and Advisory 14,431 - 14,431 12,542 18 12,560
Marketing Services 2,850 - 2,850 3,301 - 3,301
Events 2,703 1,998 4,701 2,751 1,071 3,822
Marketing Solutions 2,948 565 3,513 4,145 840 4,985
Recruitment Advertising 380 990 1,370 363 1,161 1,524
33,292 8,301 41,593 32,108 6,972 39,080
The accounting policies for each of these revenue streams is disclosed in note
1(e), including the timing of revenue recognition. There are some contracts
for which revenue has not yet been recognised and is being held in deferred
income, see note 19. This deferred income is all current and is expected to be
recognised as revenue in 2023.
3 Net operating expenses
Operating profit / (loss) is stated after charging:
Note Adjusted Adjusting Statutory Adjusted Adjusting Statutory
Results(1) Items(1) Results Results(1) Items(1) Results
2022 2022 2022 2021 2021 2021
£'000 £'000 £'000 £'000 £'000 £'000
Employee benefits expense 5 19,034 - 19,034 19,272 - 19,272
Depreciation of property, plant and equipment 4,11 2,028 243 2,271 1,808 - 1,808
Amortisation of intangible assets 4,10 1,136 521 1,657 1,335 1,091 2,426
Impairment of intangible assets 10 - - - 55 25 80
Gain on remeasurement of lease 4,18 - (151) (151) - - -
Share-based payment expense 4,22 - 806 806 - 495 495
Net impairment of trade receivables 25 (31) - (31) (39) - (39)
IT expenditure 2,645 - 2,645 2,563 - 2,563
Marketing expenditure 1,685 - 1,685 1,399 - 1,399
Other staff-related costs 233 - 233 618 - 618
Other operating expenses 9,566 - 9,566 8,837 - 8,837
36,296 1,419 37,715 35,848 1,611 37,459
Cost of sales 15,434 - 15,434 15,082 - 15,082
Distribution costs 60 - 60 62 - 62
Administrative expenses 20,802 1,419 22,221 20,704 1,611 22,315
36,296 1,419 37,715 35,848 1,611 37,459
(1) Adjusted results exclude adjusting items, as detailed in note 1(b).
Services provided by the Company and Group's auditor
2022 2021
£'000 £'000
Fees payable for the audit of Company and Group consolidated financial 120 109
information
Fees payable for the interim financial statement review 11 10
Total fees paid to the Company and Group's auditor 131 119
4 Adjusting items
As discussed in note 1(b), certain items are presented as adjusting. These are
detailed below:
Note 2022 2021
£'000 £'000
Amortisation of acquired intangible assets 10 521 1,091
Impairment of acquired intangible assets 10 - 25
Gain on remeasurement of lease 18 (151) -
Lease termination fee 11,18 243 -
Share-based payment expense 22 806 495
Adjusting items to profit / (loss) before tax 1,419 1,611
Tax relating to adjusting items 7 (270) (195)
Total adjusting items after tax 1,149 1,416
Termination of lease
As a result of the termination of the London property lease, a net gain of
£151,000 was recognised on remeasurement of the lease liability and
respective proportionate adjustment to the ROU asset. The termination fee was
included in the measurement of the ROU asset at the time of the remeasurement,
therefore the £243,000 is recognised in depreciation. Refer to note 18 for
further details.
Other adjusting items
Other adjusting items relate to the amortisation and impairment of acquired
intangible assets (see note 10) and share-based payment costs (see note 22).
5 Directors and employees
Note 2022 2021 2022 2021
Group Group Company Company
£'000 £'000 £'000 £'000
Wages and salaries 16,102 16,652 1,464 1,057
Social security costs 2,018 1,946 221 105
Other pension costs 914 674 50 42
Employee benefits expense 19,034 19,272 1,735 1,204
Share-based payment expense 22 806 495 424 325
19,840 19,767 2,159 1,529
The average number of employees employed during the year, including Executive
Directors, was:
2022 2021 2022 2021
Group Group Company Company
Number Number Number Number
Xeim 201 202 - -
The Lawyer 58 52 - -
Central 10 10 4 4
269 264 4 4
The Group's employees are employed and paid by Centaur Communications Limited,
a Group company, with the exception of the Company's Directors and Company
Secretary who are employed by the Company. As the employees provide services
to other Group companies, their costs are recharged.
Key management compensation
2022 Re-presented(2)
£'000 2021
£'000
Salaries and short-term employment benefits 1,583 1,736
Post-employment benefits 78 74
Share-based payment expense 590 401
2,251 2,211
(2) See note 1(a) for description of prior year re-presentation.
Key management is defined as the Executive Directors and Executive Committee
members.
201,355 shares were exercised by Directors during the year at a share price of
40.0 pence. (2021: no Directors exercised share options during the year).
Details of Directors' remuneration are included in the Remuneration Committee
Report.
6 Finance income and costs
2022 2021
£'000 £'000
Note
Finance income
Interest income from short-term deposits 16 68 -
Interest income from cash and cash equivalents 17 1
85 1
Finance costs
Commitment fees and amortisation of arrangement fee in respect of revolving (105) (194)
credit facility
Interest on lease 18 (51) (67)
Other finance costs (2) -
(158) (261)
Net finance costs (73) (260)
Interest income from short-term deposits
Interest income from short-term deposits is calculated using the effective
interest method and is recognised in profit or loss. Finance income in
relation to these short-term deposits resulted in cash inflows to the Group of
£46,000 during the year (2021: £nil). Refer to note 16 for further details.
Fees on revolving credit facility
These finance costs are in relation to the £10m revolving credit facility,
none of which was drawn down at 31 December 2022 (2021: £nil). As indicated
by the consolidated cash flow statement, there were no drawdowns from this
facility during the current and prior year. Finance costs in relation to this
facility resulted in cash outflows by the Company and Group of £71,000 during
the year (2021: £194,000).
Lease interest
A lease liability was recognised for the Group's property lease. £51,000 of
interest on this lease was incurred during the year (2021: £67,000). Refer to
notes 1(j) and 18 for further details.
7 Taxation
Note 2022 2021
£'000 £'000
Analysis of charge / (credit) for the year
Current tax 20
Overseas tax (3) 14
Adjustments in respect of prior years 68 (38)
65 (24)
Deferred tax 13
Current period 913 (175)
Adjustments in respect of prior years 27 143
940 (32)
Taxation charge / (credit) 1,005 (56)
The taxation charge / (credit) for the year can be reconciled to the profit in
the consolidated statement of comprehensive income as follows:
'000 '000
2022 2021
£'000 £'000
Profit before tax 3,805 1,361
Tax at the UK rate of corporation tax of 19.0% (2021: 19.0%) 723 259
Effects of:
Expenses not deductible for tax purposes 18 69
Additional deduction for capital allowances (86) -
Share-based payments 2 47
Effects of changes in tax rate on deferred tax balances 253 (538)
Different tax rates of subsidiaries in other jurisdictions - 2
Adjustments in respect of prior years 95 105
Taxation charge / (credit) 1,005 (56)
In the Spring Budget 2021, the UK Government announced that from 1 April 2023
the corporation tax rate would increase to 25% (rather than remaining at 19%,
as previously enacted). This new law was substantively enacted on 24 May 2021.
Temporary differences are remeasured using the enacted tax rates that are
expected to apply when the liability is settled or the asset realised.
In prior year, tax losses were remeasured using the enacted tax rate (25%).
However, the Group has utilised £2,775,000 of tax losses this year at the
current UK corporation tax rate of 19%, with the remaining £2,935,000
expected to be utilised in 2023 at the blended tax rate of 23.5%. In the
current year, the remaining losses have been remeasured at this blended tax
rate to reflect this.
A reconciliation between the reported tax charge / (credit) and the adjusted
tax charge taking account of adjusting items as discussed in note 1(b) and 4
is shown below:
2022 2021
£'000 £'000
Reported tax charge / (credit) 1,005 (56)
Effects of:
Amortisation of acquired intangible assets 108 112
Gain on remeasurement of lease (36) -
Share-based payments 198 83
Adjusted tax charge 1,275 139
8 Earnings / (loss) per share
Basic earnings per share ('EPS') is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of shares
in issue during the year. 3,112,784 (2021: 2,064,185) shares held in the
Employee Benefit Trust and 4,550,179 (2021: 4,550,179) shares held in treasury
(see note 21) have been excluded in arriving at the weighted average number of
shares.
For diluted earnings per share the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all deferred shares and dilutive
potential ordinary shares. This comprises share options and awards granted to
Directors and employees under the Group's share-based payment plans where the
exercise price is less than the average market price of the Company's ordinary
shares during the year.
Basic and diluted earnings per share have also been presented on an adjusted
basis, as the Directors believe that these measures are more reflective of the
underlying performance of the Group. These have been calculated as follows:
2022 2022 2022 2021 2021 2021
Adjusted Results(1) Adjusted Items(1) Statutory Results Adjusted Results(1) Adjusted Items(1) Statutory Results
£'000 £'000 £'000 £'000 £'000 £'000
Profit / (loss) per share attributable to owners 3,949 (1,149) 2,800 2,833 (1,416) 1,417
Profit / (loss) for the year
Number of shares (thousands)
Basic weighted average number of shares 143,813 143,813 143,813 144,927 144,927 144,927
Effect of dilutive securities - options 7,638 - 7,638 7,947 - 7,947
Diluted weighted average number of shares 151,451 143,813 151,451 152,874 144,927 152,874
Earnings / (loss) per share (pence)
Basic earnings per share 2.7 (0.8) 1.9 2.0 (1.0) 1.0
Fully diluted earnings per share 2.6 (0.8) 1.8 1.9 (1.0) 0.9
(1) Adjusted results exclude adjusting items, as detailed in notes 1(b) and 4.
9 Goodwill
Group
£'000
Cost
At 1 January 2021, 31 December 2021 and 31 December 2022 81,109
Accumulated impairment
At 1 January 2021, 31 December 2021 and 31 December 2022 39,947
Net book value
At 1 January 2021, 31 December 2021 and 31 December 2022 41,162
At 31 December 2022 a full impairment assessment has been carried out. No
impairment is required for the carrying value of goodwill. (2021: £nil).
Goodwill by segment
Each brand is deemed to be a cash generating unit ('CGU'), being the lowest
level at which cash flows are separately identifiable. Goodwill is attributed
to individual CGUs and has historically been reviewed at the operating segment
level for the purposes of the annual impairment review as this is the level at
which management monitors goodwill.
Xeim The Lawyer Total
£'000 £'000 £'000
At 1 January 2021, 31 December 2021 and 31 December 2022 25,188 15,974 41,162
Impairment testing of goodwill and acquired intangible assets
At 31 December 2022, goodwill and acquired intangible assets (see note 10)
were tested for impairment in accordance with IAS 36. In assessing whether an
impairment of goodwill and acquired intangible assets is required, the
carrying value of the segment is compared with its recoverable amount.
Recoverable amounts are measured based on value-in-use ('VIU').
The Group estimates the VIU of its CGUs using a discounted cash flow model,
which adjusts the cash flows for risks associated with the assets and
discounts these using a pre-tax rate of 9.9% (2021: 10.3%). The discount rate
used is consistent with the Group's weighted average cost of capital and is
used across all segments, which are all based predominantly in the UK and
considered to have similar risks and rewards.
The key assumptions used in calculating VIU are revenue growth, margin,
Adjusted EBITDA growth, discount rate and the terminal growth rate. These have
been derived from a combination of experience and management's expectations of
future growth rates in the business. The Group has used the three-year plan
forecast to 2025 for the first three years of the calculation and applied a
terminal growth rate of 2.5% (2021: 2.5%). This timescale and the terminal
growth rate are both considered appropriate given the nature of the Group's
revenues. The three-year plan forecast to 2025 has been prepared brand by
brand on a bottom-up basis following a review of the business where management
have identified the key growth and focus areas which will deliver the
forecasted targets, and conversely which areas of the business will be
de-prioritised over that period. Overall the three-year plan forecast to 2025
assumes continued profit growth reflecting top line expansion in flagship
brands, while managing the impact of projected inflationary pressures.
The key assumptions and variables in this plan are sensitised in isolation and
in combination. The main sensitivities applied to the key drivers are outlined
below. As required by IAS 36, these sensitivities are applied in order to
assess the effect of reasonably possible changes in the assumptions.
Sensitivity analysis has been performed on the VIU calculations, holding all
other variables constant, to:
I. apply a 10% reduction to forecast Adjusted EBITDA in each year of the modelled
cash flows. No impairment would occur in either of the segments.
II. apply a 2 percentage point increase in discount rate from 9.9% to 11.9%. No
impairment would occur in either of the segments.
III. reduce the terminal value growth rate from 2.5% to 1.5%. No impairment would
occur in either of the segments.
The results of the impairment assessment and sensitivities applied indicate
that no impairment to the goodwill or acquired intangible assets of either CGU
is required for the year ended 31 December 2022.
10 Other intangible assets
Computer software Brands and publishing rights Customer relationships Separately acquired websites and content Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2021 18,983 1,558 11,321 3,216 35,078
Additions - separately acquired 396 - - - 396
Additions - internally generated 298 - - - 298
Disposals (48) (178) - - (226)
Exchange differences 2 - - - 2
At 31 December 2021 19,631 1,380 11,321 3,216 35,548
Additions - separately acquired 763 - - - 763
Additions - internally generated 403 - - - 403
Disposals (197) - - - (197)
Exchange differences 21 - - - 21
At 31 December 2022 20,621 1,380 11,321 3,216 36,538
Accumulated amortisation
At 1 January 2021 16,221 808 9,922 3,216 30,167
Amortisation charge for the year 1,335 114 977 - 2,426
Impairment charge for the year 55 25 - - 80
Disposals (48) (178) - - (226)
Exchange differences (1) - - - (1)
At 31 December 2021 17,562 769 10,899 3,216 32,446
Amortisation charge for the year 1,136 99 422 - 1,657
Disposals (197) - - - (197)
Exchange differences 21 - - - 21
At 31 December 2022 18,522 868 11,321 3,216 33,927
Net book value at 31 December 2022 2,099 512 - - 2,611
Net book value at 31 December 2021 2,069 611 422 - 3,102
Net book value at 1 January 2021 2,762 750 1,399 - 4,911
Amortisation and impairment of intangible assets is included in net operating
expenses in the consolidated statement of comprehensive income. The current
year amortisation charge is £1,657,000 (2021: £2,426,000). Acquired
intangible assets from business combinations represents the asset groups
'Brands and publishing rights', 'Customer relationships' and 'Separately
acquired websites and content'. The amortisation on acquired intangible assets
is £521,000 (2021: £1,091,000). This is presented as an adjusting item in
note 4 (see note 1(b) for further information).
Other intangible assets are tested annually for impairment in accordance with
IAS 36 at a segment level by comparing the carrying value with its recoverable
amount. Refer note 9 for further details. During the prior year, the Group
impaired intangible assets totalling a net book value of £80,000. The
£80,000 impairment charge related to computer software and brand and
publishing rights no longer in use by the business. There was no impairment of
other intangibles incurred in the current year.
The Company has no intangible assets (2021: £nil).
11 Property, plant and equipment
Fixtures Computer ROU assets - property
and fittings equipment £'000 Total
£'000 £'000 £'000
Cost
At 1 January 2021 68 1,049 5,077 6,194
Additions - separately acquired 5 51 978 1,034
Disposals - (2) - (2)
Exchange differences - - 2 2
At 31 December 2021 73 1,098 6,057 7,228
Additions - separately acquired 21 273 - 294
Remeasurement - - (120) (120)
Disposals - (21) (5,937) (5,958)
Exchange differences - 2 - 2
At 31 December 2022 94 1,352 - 1,446
Accumulated depreciation
At 1 January 2021 40 704 2,192 2,936
Depreciation charge for the year 21 138 1,649 1,808
Disposals - (2) - (2)
Exchange differences - - 2 2
At 31 December 2021 61 840 3,843 4,744
Depreciation charge for the year 7 170 2,094 2,271
Disposals - (21) (5,937) (5,958)
Exchange differences - 2 - 2
At 31 December 2022 68 991 - 1,059
Net book value at 31 December 2022 26 361 - 387
Net book value at 31 December 2021 12 258 2,214 2,484
Net book value at 1 January 2021 28 345 2,885 3,258
Depreciation of property, plant and equipment is included in net operating
expenses in the consolidated statement of comprehensive income.
The current year depreciation charge is £2,271,000 (2021: £1,808,000).
Depreciation of the ROU asset includes £243,000 termination fee which was
included in the cost of the ROU asset in the remeasurement on the agreement of
the lease termination (see note 18). This £243,000 is presented as an
adjusting item in note 4 and the remaining depreciation charge of £2,028,000
is in Adjusted Results.
The Company has no property, plant and equipment at 31 December 2022 (2021:
£nil).
12 Investments
Investments
in subsidiary
undertakings
Company £'000
Cost
At 1 January 2021 151,385
Additions 163
At 31 December 2021 151,548
Additions 374
At 31 December 2022 151,922
Accumulated impairment
At 1 January 2021, 31 December 2021 and 31 December 2022 86,393
Net book value at 31 December 2022 65,529
Net book value at 31 December 2021 65,155
Net book value at 1 January 2021 64,992
Impairment testing of the investment
The carrying value of the investment represents the Company's direct ownership
of Centaur Communications Limited ('CCL'). At 31 December 2022, the investment
was tested for impairment in accordance with IAS 36. In assessing whether an
impairment of the investment is required, the carrying value of the investment
is compared with its recoverable amount. The recoverable amount is measured
based on value-in-use ('VIU'). Although the Company only has direct ownership
of CCL, CCL in turn directly or indirectly controls the rest of the Group's
subsidiaries. Therefore, the VIU of the Company's investment in CCL is
supported by the operations of the entire Group.
In the prior year, the ongoing global pandemic and its impact on the economy
and directly on the Group was identified as an indication of impairment of the
Company's investment carrying value. Therefore, a full impairment assessment
was performed. The results of the impairment assessment and sensitivities
applied indicated that no impairment to the Company's investment in CCL was
required for the year ended 31 December 2021 as the carrying value of the
investment was supported by the underlying trade of the Group.
In the current year, the UK's economic uncertainty throughout 2022 has been
identified as an indication of impairment of the Company's investment carrying
value. Therefore, a full impairment assessment has been performed.
The Group estimates the VIU using a discounted cash flow model, which adjusts
the cash flows for risks associated with the assets and discounts these using
a pre-tax rate of 9.9% (2021: 10.3%). The discount rate used is consistent
with the Group's weighted average cost of capital.
The key assumptions used in calculating VIU are revenue growth, margin,
Adjusted EBITDA growth, discount rate and the terminal growth rate. These have
been derived from a combination of experience and management's expectations of
future growth rates in the business. The Group has used the three-year plan
forecast to 2025 for the first three years of the calculation and applied a
terminal growth rate of 2.5% (2021: 2.5%). This timescale and the terminal
growth rate are both considered appropriate given the nature of the Group's
revenues. The three-year plan forecast to 2025 has been prepared brand by
brand on a bottom-up basis following a review of the business where management
have identified the key growth and focus areas which will deliver the
forecasted targets, and conversely which areas of the business will be
de-prioritised over that period. Overall the three-year plan forecast to 2025
assumes continued profit growth reflecting top line expansion in flagship
brands, while managing the impact of projected inflationary pressures.
Sensitivities are applied to each of the key assumptions and variables in
isolation and in combination, in line with those sensitivities applied for
goodwill impairment testing as outlined in note 9. As required by IAS 36,
these sensitivities are applied in order to assess the effect of reasonably
possible changes in the assumptions.
The results of the impairment assessment and sensitivities applied indicate
that no impairment to the Company's investment in CCL is required for the year
ended 31 December 2022.
Additions of £374,000 (2021: £163,000) related to capital contributions for
share-based payments recharged to the Company's subsidiaries.
In order to simplify the Group structure, the process to close dormant
companies commenced during the prior year.
The Group dissolved the following subsidiaries during the current year:
Name Proportion of ordinary shares and voting rights held (%) Principal activities Country of incorporation Date of closure
Pro-Talk Ltd 100 Dormant United Kingdom 20 December 2022
Taxbriefs Limited 100 Dormant United Kingdom 20 December 2022
At 31 December 2022, the Group has control over the following subsidiaries:
Name Proportion of ordinary shares and voting rights held (%) Principal activities Country of incorporation
Centaur Communications Limited(1) 100 Holding company and agency services United Kingdom
Centaur Media USA Inc.(2) 100 Digital information services United States
Chiron Communications Limited(3) 100 In liquidation United Kingdom
E-consultancy LLC(2) 100 Holding company United States
E-consultancy.com Limited 100 Digital information services United Kingdom
Market Makers Incorporated Limited 100 In liquidation United Kingdom
Taxbriefs Holdings Limited(4) 100 Holding company United Kingdom
TheLawyer.com Limited 100 Digital information services United Kingdom
Xeim Limited 100 Digital information services United Kingdom
(1) Directly owned by Centaur Media Plc.
(2) Registered address is 244 Fifth Avenue, Suite 1297, New York, NY
10001, USA. Functional currency is USD.
(3) Chiron Communications Limited was liquidated on 11 January 2023.
(4) The process to strike off Taxbriefs Holdings Limited commenced in
January 2023.
The registered address of all subsidiary companies, except for those
identified above, is 10 York Road, London, SE1 7ND, United Kingdom. The
functional currency of all subsidiaries is GBP except for those identified
above. The consolidated financial information incorporates the financial
information of all entities controlled by the Company at 31 December 2022.
13 Deferred tax
The movement on the deferred tax account for the Group is shown below:
Accelerated Other Tax Total
capital temporary losses £'000
allowances differences £'000
£'000 £'000
Net asset / (liability) at 1 January 2021 683 (14) 1,541 2,210
Adjustments in respect of prior periods (42) (55) (46) (143)
Recognised in the consolidated statement of comprehensive income 69 110 (4) 175
Recognised in the consolidated statement of changes in equity - 118 - 118
Net asset at 31 December 2021 710 159 1,491 2,360
Adjustments in respect of prior periods 13 23 (63) (27)
Recognised in the consolidated statement of comprehensive income (443) 268 (738) (913)
Recognised in the consolidated statement of changes in equity - 233 - 233
Net asset at 31 December 2022 280 683 690 1,653
Deferred tax assets and liabilities are only offset where there is a legally
enforceable right of offset and there is an intention to settle the balances
net.
2022 2021
£'000 £'000
Deferred tax assets 1,673 2,488
Deferred tax liabilities (20) (128)
1,653 2,360
At the year end, the Group has unused tax losses of £2,935,000 (2021:
£5,961,000) available for offset against future profits. A deferred tax asset
of £690,000 (2021: £1,491,000) has been recognised in respect of £2,935,000
(2021: £5,961,000) of such tax losses.
Following the Group's disposals in previous years, the transformed Group is
now more focused and streamlined in order to deliver higher margins and
profits and this is reflected in the current year results and continuation of
this profitable position is reflected in the Group's three-year plan forecast
to 2025. The Group has concluded that the deferred tax asset will be
recoverable using the estimated future taxable profit based on the three-year
plan forecast to 2025. This forecast was used in the impairment assessments
performed for goodwill and investments. Refer to notes 9 and 12 for further
details. The Group generated taxable profits in 2022 and is expected to
generate taxable profits from 2023 onwards. The losses can be carried forward
indefinitely and have no expiry date as long as the companies that have the
losses continue to trade.
The Company had deferred tax assets on share options under long-term incentive
plans of £375,000 at 31 December 2022 (2021: £190,000).
Deferred tax assets and liabilities are expected to be materially utilised
after 12 months.
14 Trade and other receivables
Note 2022 2021 2022 2021
Group Group Company Company
£'000 £'000 £'000 £'000
Amounts falling due within one year
Trade receivables 25 4,348 5,475 - -
Less: expected credit loss 25 (537) (564) - -
Trade receivables - net 3,811 4,911 - -
Other receivables 430 92 34 34
Prepayments 916 981 102 127
Accrued income 200 75 - -
5,357 6,059 136 161
2022 2021 2022 2021
Group Group Company Company
£'000 £'000 £'000 £'000
Amounts falling due after one year
Other receivables 27 319 27 41
Receivable from Employee Benefit Trust - - 1,198 1,156
27 319 1,225 1,197
The receivable from Employee Benefit Trust is unsecured, has no fixed due date
and does not bear interest.
Other receivables falling due within one year include £278,000 (2021:
£278,000 amount falling due after one year) in relation to a deposit on the
London property lease which is fully refundable at the end of the lease term.
The current London property lease ended on 31 December 2022. From 1 January,
the Group will be fully refunded for this deposit. The Group has signed a new
lease agreement commencing 1 January 2023, for which a deposit of £162,000
will be recognised in other receivables falling due after one year. The new
lease deposit will be fully refundable at the end of the lease term. Refer to
note 18 and 27 for further detail.
15 Cash and cash equivalents
2022 2021
Group Group
£'000 £'000
Cash at bank and in hand 7,501 13,065
The Company had no cash and cash equivalents at 31 December 2022 (2021:
£nil).
16 Short-term deposits
2022 2021
Group Group
£'000 £'000
Short-term deposits 8,500 -
In October 2022, £3,500,000 was placed in a short-term deposit for a
four-month fixed term, accruing interest at a fixed annual rate of 2.50%. In
December 2022 a further £5,000,000 was placed in a short-term deposit for a
five-month fixed term, accruing interest at a fixed annual rate of 2.85%.
Interest for both short-term deposits is to be paid on maturity (2021: £nil).
These amounts remain in deposit at year end. Refer to note 6 for further
detail.
17 Trade and other payables
2022 2021 2022 2021
Group Group Company Company
£'000 £'000 £'000 £'000
Trade payables 727 1,070 - -
Payables to subsidiaries - - 34,744 29,397
Accruals 7,590 8,112 1,002 496
Social security and other taxes 577 886 - -
Other payables 758 1,340 23 3
9,652 11,408 35,769 29,896
Payables to subsidiaries are unsecured, have no fixed date of repayment and
bear interest at an annual rate of 5.68% (2021: 3.45%).
The Directors consider that the carrying amount of the trade payables
approximates their fair value.
18 Lease liabilities
The lease liability reflected below relates to a property lease, for which a
corresponding right-of-use ('ROU') asset is held on the consolidated statement
of financial position within property, plant and equipment and detailed in
note 11.
2022 2021
Group Group
£'000 £'000
At 1 January 2,384 3,375
Remeasurement of lease liability (271) 978
Interest expense 51 67
Cash outflow - lease payments (1,921) (2,036)
Cash outflow - termination fee (243) -
At 31 December - 2,384
Current - 1,884
Non-current - 500
At 31 December - 2,384
The Group had one lease agreement in place during the year. In June an option
to extend the lease was exercised, resulting in an increase to the lease
liability and a corresponding increase to the ROU asset. Subsequently, in
October, an agreement to terminate the lease was signed, bringing the end date
forward to 31 December 2022. This changed the lease term judgement previously
made, and the lease liability was therefore remeasured. These two
remeasurements resulted in the net decrease in lease liability of £271,000.
The remeasurement upon agreement to terminate resulted in a proportionate
adjustment to the ROU asset and lease liability based on the carrying values
at the effective date, resulting in a gain on remeasurement of £151,000. In
exiting the lease, the Group incurred a £243,000 termination fee. These are
both recognised as adjusting items in the consolidated statement of
comprehensive income. Refer to note 1(b) and 4 for further details.
A new lease agreement has been entered into with a commencement date of 1
January 2023, and therefore a lease liability and corresponding ROU asset will
be 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. Refer to note
27 for further details.
During the prior year, the lease liability for the Group's property in London
was remeasured upon reassessment of the lease term, resulting in an increase
of £978,000. The amount of the remeasurement of the lease liability was
recognised as an adjustment to the ROU asset.
19 Deferred income
2022 2021
Group Group
£'000 £'000
Deferred income 8,885 7,846
Deferred income arises on contracts with customers where revenue recognition
criteria has not yet been met. See note 1(e) for further details. During the
year ended 31 December 2022, £7,831,000 (2021: £7,023,000) of the deferred
income balance of £7,846,000 at 31 December 2021 (£7,048,000 at 31 December
2020) was recognised as revenue in the consolidated statement of comprehensive
income.
20 Current tax assets
2022 2021
Group Group
£'000 £'000
Corporation tax receivables 165 195
The Company had no corporation tax receivables or payables at 31 December 2022
(2021: £nil).
21 Equity
Ordinary shares of 10 pence each Nominal value Number of shares
£'000
Authorised share capital - Group and Company
At 1 January 2021, 31 December 2021 and 31 December 2022 20,000 200,000,000
Issued and fully paid share capital - Group and Company
At 1 January 2021, 31 December 2021 and 31 December 2022 15,141 151,410,226
Deferred shares reserve
The deferred shares reserve represents 800,000 (2021: 800,000) deferred shares
of 10 pence each, which carry restricted voting rights and have no right to
receive a dividend payment in respect of any financial year.
Reserve for shares to be issued
The reserve for shares to be issued is in respect of equity-settled
share-based payment plans. The movements in the reserve for shares to be
issued represent the total charges for the year relating to equity-settled
share-based payment transactions with employees as accounted for under IFRS 2
less transfers from this reserve to retained earnings for shares exercised or
lapsed during the year.
Own shares reserve
The own shares reserve represents the value of shares held as treasury shares
and in the Employee Benefit Trust. At 31 December 2022, 4,550,179 (2021:
4,550,179) 10 pence ordinary shares are held in treasury and 3,112,784 (2021:
2,064,185) 10 pence ordinary shares are held in the Employee Benefit Trust.
The Employee Benefit Trust issued 201,355 (2021: 981,783) shares to meet
obligations arising from share-based rewards to employees that had vested and
were exercised in the current year (2021: vested and exercised in 2021). The
shares were issued at a historical weighted average cost of 105.3 pence (2021:
92.9 pence) per share. The total cost of £212,000 (2021: £912,000) has been
recognised as a reduction in the own shares reserve in other reserves in
equity.
During 2022, the Employee Benefit Trust purchased 1,249,954 (2021: 1,097,476)
ordinary shares in order to meet future obligations arising from share-based
rewards to employees. The shares were acquired at an average price of 48.3
pence per share, with prices ranging from 47.7 pence to 49.4 pence. The total
cost of £604,000 (2021: £481,000) has been recognised in the own shares
reserve in equity.
22 Share-based payments
The Group's share-based payment expense for the year by plan:
2022 2021
£'000 £'000
Share-based payment expense 806 495
The share-based payment expense is presented as an adjusting item in note 4
(see note 1(b) for further information) and is included in net operating
expenses in the consolidated statement of comprehensive income.
The Group's share-based payment plans upon vesting are equity-settled.
The share-based payment expense includes social security contributions which
are settled in cash upon exercise. £75,000 (2021: £132,000) was charged to
the consolidated statement of comprehensive income in relation to employers NI
on share-based payment plans and included in accruals on the consolidated
statement of financial position.
Long-Term Incentive Plan
The Group operates a Long-Term Incentive Plan ('LTIP') for Executive Directors
and selected senior management. This is an existing incentive policy and was
approved by shareholders at the 2016 AGM. Full details on how the plan
operates are included in the Remuneration Report.
During the year LTIP awards were granted to Executive Directors and selected
senior management. Details of the performance conditions of these awards are
disclosed in the Remuneration Report.
A reconciliation of the movements in LTIP awards is shown below.
2022 2021
Number of awards
At 1 January 7,664,075 7,503,258
Granted 2,870,942 2,985,565
Exercised (201,355) (981,776)
Forfeited (166,057) (596,093)
Lapsed (2,832,868) (1,246,879)
At 31 December 7,334,737 7,664,075
Exercisable at 31 December - -
Weighted average share price at date of exercise (pence) 40.00 42.01
The awards granted during the year were priced using the following models and
inputs:
Grant date 24.03.2022
Share price at grant date (pence) 48.00
Fair value (pence) 29.44
Vesting date 24.03.2025
Exercise price (pence) £nil
Expected volatility (%) 42.76
Expected dividend yield (%) 2.08
Risk free interest rate (%) 1.36
Valuation of model used Stochastic
Options exercised during the year related to the proportion of the 2019 LTIP
awards that vested during the year (2021: 2018 LTIP awards).
Options forfeited during the year were due to the participants leaving before
the vesting date of the options. Options that lapsed in the year did not meet
the performance conditions and related to the 2019 LTIP awards (2021: 2018
LTIP awards). No options expired during the year (2021: nil).
The share awards outstanding at 31 December 2022 had a weighted average
exercise price of £nil (2021: £nil) and a weighted remaining life of 1.4
years (2021: 1.3 years).
Deferred Share Bonus Plan
The Deferred Share Bonus Plan ('DSBP') was approved by the Board in May 2022
and applies to Executive Directors. Under the plan, the portion of the annual
bonus greater than 75% of basic salary is deferred in accordance with the
Group's remuneration policy into awards in Centaur Media Plc shares. Awards
under the DSBP are not subject to further performance conditions and vest
after three years, subject to continued employment. Dividend equivalents may
be awarded in respect of the DSBP awards on vesting. Further details on how
the plan operates is included in the Remuneration Report.
A reconciliation of the movements in DSBP awards is shown below.
2022
Number of awards
At 1 January -
Granted 60,593
At 31 December 60,593
Exercisable at 31 December -
Weighted average share price at date of exercise (pence) -
In May 2022, 60,593 shares were awarded to Executive Directors under the DSBP,
representing the portion of the 2021 bonus to Executive Directors greater than
75% of their basic salary.
The awards granted during the year were priced using the following models and
inputs:
Grant date 12.05.2022
Share price at grant date and fair value (pence) 47.00
Vesting date 24.03.2025
Exercise price (pence) £nil
No options were exercised, forfeited or expired during the year.
The share awards outstanding at 31 December 2022 had a weighted average
exercise price of £nil and a weighted remaining life of 2.2 years.
Senior Executive Long-Term Incentive Plan
The Centaur Media Plc 2010 Senior Executive Long-Term Incentive Plan (the
'SELTIP') was introduced during 2011 and was approved by shareholders at the
2010 AGM. This is not an HMRC approved plan and vests over a three-year period
with service and performance conditions. Awards were granted under this plan
in 2011 for no consideration and no exercise price. This plan is closed to new
awards.
2022 2021
Number of awards
At 1 January 6,862 6,862
Expired (6,862) -
At 31 December - 6,862
Exercisable at 31 December - 6,862
Weighted average share price at date of exercise (pence) - -
There were no grants, exercises or forfeitures during the current and prior
year.
All options expired during the current year (2021: no options expired). The
shares outstanding at 31 December 2021 had a weighted average exercise price
of £nil and a weighted remaining life of 0.7 years.
Share Incentive Plan
The Centaur Media Plc Share Incentive Plan (the 'SIP') is an HMRC approved
Tax-Advantaged plan, which provides employees with the opportunity to purchase
shares in the Company. This plan is open to all employees who have been
employed by the Group for more than three months. Employees may invest up to
£1,800 per annum (or 10% of their salary if less) in ordinary shares in the
Company, which are held in trust. The shares are purchased in open market and
are held in trust for each employee. The shares can be withdrawn with tax paid
at any time, or tax-free after five years. The Group matches the contribution
with a ratio of one share for every two purchased. Other than continuing
employment, there are no other performance conditions attached to the plan.
The Executive Directors are eligible to participate in the Share Incentive
Plan, as are all employees of the Group.
2022 2021
Number of matching shares
Outstanding at 1 January 57,495 58,117
Awarded 18,413 15,498
Transferred to participants - (8,144)
Forfeited - (7,976)
Outstanding at 31 December 75,908 57,495
23 Dividends
2022 2021
£'000 £'000
Equity dividends
Final dividend for 2020: 0.5 pence per 10 pence ordinary share - 726
Interim dividend for 2021: 0.5 pence per 10 pence ordinary share - 724
Final dividend for 2021: 0.5 pence per 10 pence ordinary share 718 -
Interim dividend for 2022: 0.5 pence per 10 pence ordinary share 718 -
1,436 1,450
A final dividend for the year ended 31 December 2022 of £862,000 (0.6 pence
per share) is proposed by the Directors and, subject to shareholder approval
at the Annual General Meeting, will be paid on 26 May 2023 to all ordinary
shareholders on the register at the close of business on 12 May 2023.
A special dividend of £4,312,000 (3.0 pence per share) was announced by the
Directors and was paid on 10 February 2023 to all ordinary shareholders on the
register at the close of business on 27 January 2023.
A further special dividend of £2,875,000 (2.0 pence per share) is announced
by the Directors to be paid on 31 March 2023 to all ordinary shareholders on
the register at the close of business on 17 March 2023.
The interim, special and final dividends together result in a total dividend
pertaining to 2022 of £8,767,000.
The final dividend for the year end 2021 of 0.5 pence per share was proposed
by the Directors to all ordinary shareholders on the register at the close of
business 13 May 2022. This was estimated to be £725,000 in the 2021 Annual
Report. The actual dividend payment in respect of this in May 2022 was
£718,000.
24 Notes to the cash flow statement
Reconciliation of profit / (loss) for the year to cash generated from
operating activities:
'000 '000 '000 '000
Note 2022 2021 2022 2021
Group Group Company Company
£'000 £'000 £'000 £'000
Profit / (loss) for the year 2,800 1,417 (4,619) (2,325)
Adjustments for:
Taxation charge / (credit) 7 1,005 (56) (1,106) (512)
Finance income 6 (85) (1) - -
Finance costs 6 158 261 2,001 1,182
Depreciation of property, plant and equipment 11 2,271 1,808 - -
Amortisation of intangible assets 10 1,657 2,426 - -
Impairment of intangible assets 10 - 80 - -
Gain on remeasurement of lease 18 (151) - - -
Share-based payment expense 22 806 495 424 325
Dividends waived - 2 - 2
Unrealised foreign exchange differences (145) (65) - -
Changes in working capital:
Decrease / (increase) in trade and other receivables 1,002 (259) (17) 34,359
(Decrease) / increase in trade and other payables (1,955) 2,615 4,824 (31,389)
Increase in deferred income 1,039 798 - -
Cash generated from operating activities 8,402 9,521 1,507 1,642
Reconciliation of movements of liabilities and associated assets to cash flows
arising from financing activities:
Note Group and Company Group
Net borrowings Lease
£'000 liability
£'000
At 1 January 2021 72 (3,375)
Changes from financing cash flows:
Loan arrangement fee 107 -
Finance costs paid 6 87 -
Repayment of obligations under finance leases 18 - 2,036
194 2,036
Other changes:
Finance costs 6 (194) (67)
Remeasurement of lease liability 18 - (978)
(194) (1,045)
Balance at 31 December 2021 72 (2,384)
Changes from financing cash flows:
Finance costs paid 6 71 -
Repayment of obligations under finance leases 18 - 1,921
Termination of lease 18 - 243
71 2,164
Other changes:
Finance costs 6 (105) (51)
Remeasurement of lease liability 18 - 271
Extension fee on revolving credit facility 25 20 -
(85) 220
Balance at 31 December 2022 58 -
Net borrowings is comprised of a loan arrangement fee debtor of £61,000
(2021: £75,000) presented within other receivables and a commitment fee
creditor of £3,000 presented within other payables (2021: £3,000). The
movements of this asset and liability together give rise to cash flows from
financing activities relating to the £10m revolving credit facility.
25 Financial instruments and financial risk management
Financial risk management
The Board has overall responsibility for the determination of the Group's risk
management policies. The Board receives monthly reports from the Chief
Financial Officer through which it reviews the effectiveness of policies and
processes put in place to manage risk. The Board sets policies that reduce
risk as far as possible without unduly affecting the operating effectiveness
of the Group.
The Group's activities expose it to a variety of financial risks, including
interest rate risk, credit risk, liquidity risk, capital risk and currency
risk. Of these, credit risk and liquidity risk are considered the most
significant. This note presents information about the Group's exposure to each
of the above risks.
Categories of financial instruments
Details of the 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(s).
All financial assets and liabilities are measured at amortised cost.
Note 2022 2021
£'000 £'000
Financial assets
Cash and cash equivalents 15 7,501 13,065
Short-term deposits 16 8,500 -
Trade receivables - net 14 3,811 4,911
Other receivables 14 457 411
20,269 18,387
Financial liabilities
Lease liability 18 - 2,384
Trade payables 17 727 1,070
Accruals 17 7,590 8,112
Other payables 17 758 1,340
9,075 12,906
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The carrying
amount of financial assets recorded in the financial information, which is net
of impairment losses, represents the Group's maximum exposure to credit risk
in relation to financial assets. Credit risk is managed on a Group basis. The
Group does not consider that it is subject to any significant concentrations
of credit risk.
Trade receivables
Trade receivables consist of a large number of customers, of varying sizes and
spread across diverse industries and geographies. The Group does not have
significant exposure to credit risk in relation to any single counterparty or
group of counterparties having similar characteristics. The Group's exposure
to credit risk is influenced predominantly by the circumstances of individual
customers as opposed to industry or geographic trends.
The business assesses the credit quality of customers based on their financial
position, past experience and other qualitative and quantitative factors. The
Group's policy requires customers to pay in accordance with agreed payment
terms, which are generally 30 days from the date of invoice. Under normal
trading conditions, the Group is exposed to relatively low levels of risk and
potential losses are mitigated as a result of a diversified customer base and
the requirement for events and certain premium content subscription invoices
to be paid in advance of service delivery.
The credit control function within the Group's finance department monitors the
outstanding debts of the Group and trade receivable balances are analysed by
the age and value of outstanding balances.
Any trade receivable balance which is objectively determined to be
uncollectible is written off the ledger, with a charge taken through the
consolidated statement of comprehensive income. The Group also records an
allowance for the lifetime expected credit loss on its trade receivables
balances under the simplified approach as mandated by IFRS 9. The impairment
model for trade receivables, under IFSR 9, requires the recognition of
impairment provisions based on expected lifetime credit losses rather than
only incurred ones. All balances are reviewed with those greater than 90 days
past due considered to carry a higher level of credit risk. Refer to note
1(s)(ii) for further details on the approach to allowance for expected credit
losses on trade receivables.
The allowance for expected lifetime credit losses, and changes to it, are
taken through administrative expenses in the consolidated statement of
comprehensive income.
The ageing of trade receivables according to their original due date is
detailed below:
2022 2022 2021 2021
Gross Provision Gross Provision
£'000 £'000 £'000 £'000
Not due 2,971 (45) 3,488 (43)
0-30 days past due 488 (15) 972 (25)
31-60 days past due 141 (9) 161 (9)
61-90 days past due 74 (9) 146 (16)
Over 90 days past due 674 (459) 708 (471)
4,348 (537) 5,475 (564)
In making the assessment that unprovided trade receivables are not impaired,
the Directors have considered the quantum of gross trade receivables which
relate to amounts not yet included in income, including amounts in deferred
income and amounts relating to VAT. The credit quality of trade receivables
not impaired has been assessed as acceptable.
The movement in the allowance for expected credit losses on trade receivables
is detailed below:
2022 2021
Total Total
£'000 £'000
Balance at 1 January 564 993
Utilised (18) (390)
Release (31) (39)
Exchange differences 22 -
Balance at 31 December 537 564
The Group's policy requires customers to pay in accordance with agreed payment
terms which are generally 30 days from the date of invoice or in the case of
live events related revenue no less than 30 days before the event. All credit
and recovery risk associated with trade receivables has been provided for in
the consolidated statement of financial position. The Group's policy for
recognising an impairment loss is given in note 1(s)(ii). Impairment losses
are taken through administrative expenses in the consolidated statement of
comprehensive income.
The Directors consider the carrying value of trade and other receivables
approximates to their fair value.
Cash and cash equivalents and short-term deposits
Banks and financial institutions are independently rated by credit rating
agencies. We choose only to deal with those with a minimum 'A' rating. We
determine the credit quality for cash and cash equivalents and short-term
deposits to be strong.
Other receivables
Other receivables are neither past due nor impaired. These are primarily made
up of sundry receivables, including employee-related debtors and receivables
in respect of distribution arrangements.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group manages liquidity risk by
maintaining adequate reserves and working capital credit facilities, and by
continuously monitoring forecast and actual cash flows. Since March 2021, the
Group has had its multi-currency revolving credit facility with NatWest. The
facility consists of a committed £10m facility and an additional uncommitted
£15m accordion option, both of which can be used to cover the Group's working
capital and general corporate needs. In December 2022, the Group took the
option to extend the facility for one year and the facility now runs to March
2025, with the remaining option to extend for one further year. As at 31
December 2022, the Group had cash of £7,501,000 (2021: £13,065,000) and
short-term deposits of £8,500,000 (2021: £nil) with a full undrawn loan
facility of £25,000,000 (2021: full undrawn loan facility of £25,000,000).
The following tables detail the financial maturity for the Group's financial
liabilities:
Book value Fair value Less than 2-5 years
£'000 £'000 1 year £'000
£'000
At 31 December 2022
Financial liabilities
Non-interest bearing 9,075 9,075 9,075 -
9,075 9,075 9,075 -
At 31 December 2021
Financial liabilities
Interest bearing 2,384 2,384 1,884 500
Non-interest bearing 10,522 10,522 10,522 -
12,906 12,906 12,406 500
The Directors consider that book value is materially equal to fair value.
The book value of primary financial instruments approximates to fair value
where the instrument is on a short maturity or where they bear interest at
rates that approximate to the market.
The following table details the level of fair value hierarchy for the Group's
financial assets and liabilities:
Financial Assets Financial Liabilities
Level 1 Level 3
Cash and cash equivalents Lease liabilities
Short-term deposits Trade payables
Level 3 Accruals
Trade receivables - net Provisions
Other receivables Other payables
Borrowings*
*Borrowings are purely in relation to the Group's revolving credit facility
which is discussed above. The amount drawn down from this facility at 31
December 2022 was £nil (2021: £nil).
All trade and other payables are due for payment in one year or less, or on
demand.
Interest rate risk
The Group's financial assets are not significant interest-bearing assets. The
Group is exposed to interest rate risk when it borrows funds at floating
interest rates through its revolving credit facility. Borrowings issued at
variable rates expose the Group to cash flow interest rate risk. The Group
evaluates its risk appetite towards interest rate risks regularly to manage
interest rate risk in relation to its revolving credit facility if deemed
necessary.
The Group did not enter any hedging transactions during the current or prior
year and as at 31 December 2022 the only floating rate to which the Group was
exposed was SONIA. The Group's exposure to interest rates on financial assets
and financial liabilities is detailed in the liquidity risk section of this
note.
Interest rate sensitivity
The Group has not drawn down from its revolving credit facility in the current
year or prior year therefore a sensitivity analysis has not been performed.
Capital risk
The Group manages its capital to ensure that all entities in the Group will be
able to continue as a going concern while maximising return to shareholders,
as well as sustaining the future development of the business.
The capital structure of the Group consists of net cash, which includes cash
and cash equivalents (note 15), short-term deposits (note 16) and equity
attributable to the owners of the parent, comprising issued share capital
(note 21), other reserves and retained earnings. The Board also considers the
levels of own shares held for employee share plans and the ability to issue
new shares for acquisitions, in managing capital risk in the business.
Since March 2021, the Group has benefited from its banking facility with
NatWest, which featured a committed £10m facility and an additional
uncommitted £15m accordion option, both of which can be used to cover the
Group's working capital and general corporate needs. In December 2022, the
Group took the option to extend the facility for one year and the facility now
runs to March 2025, with the remaining option to extend for one further year.
Interest is calculated on SONIA plus a margin dependent on the Group's net
leverage position, which is re-measured quarterly in line with covenant
testing. The Group's borrowings are subject to financial covenants tested
quarterly. The principal financial covenants under the facility are that the
ratio of net debt to EBITDA shall not exceed 2.5:1 and the ratio of EBITDA to
net finance charges shall not be less than 4:1. At no point during the current
year or prior year did the Group breach its covenants.
Currency risk
Substantially all the Group's net assets are in the United Kingdom. Most of
the revenue and profits are generated in the United Kingdom and consequently
foreign exchange risk is limited. The Group continues to monitor its exposure
to currency risk, particularly as the business expands into overseas
territories such as North America, however the results of the Group are not
currently considered to be sensitive to movements in currency rates.
26 Pension schemes
The Group contributes to individual and collective money purchase pension
schemes in respect of Directors and employees once they have completed the
requisite period of service. The charge for the year in respect of these
defined contribution schemes is shown in note 5. Included within other
payables is an amount of £92,000 (2021: £76,000) payable in respect of the
money purchase pension schemes.
27 Capital commitments
At 31 December 2022, the Group had signed a lease agreement for a London
property with a commencement date of 1 January 2023. This lease has a term of
three years until 31 December 2025, with lease payments/cash outflows of
£972,000 for the first year of the lease term, increasing by 3.5% annually
thereafter. There is a deposit for the new London property lease which will be
payable from the commencement date of 1 January 2023 of £162,000. This is
fully refundable at the end of the lease term.
No additional capital commitments as at 31 December 2022 (2021: £nil).
28 Related party transactions
Group
Key management compensation is disclosed in note 5. There were no other
material related party transactions for the Group in the current or prior
year.
Company
The Company had the following transactions with subsidiaries and related
parties during the year.
i) Interest
During the year, interest was recharged from subsidiary companies as follows:
2022 2021
£'000 £'000
Net interest payable 1,896 988
There were no borrowings at the end of the year (2021: £nil).
The balances outstanding with subsidiary companies are disclosed in note 17.
ii) Dividends
During both the current and prior year, the Company did not receive any
dividends from its subsidiaries.
iii) Employee Benefit Trust
The assets and liabilities of the Employee Benefit Trust are comprised in the
consolidated statement of financial position. Transactions between the
Employee Benefit Trust and the Parent are detailed in notes 21 and 22. Details
of the Company's receivable from the Employee Benefit Trust is in note 14.
There were no other material related party transactions for the Company in the
current or prior year.
Audit exemption
For the year ended 31 December 2022, the Company has provided a guarantee
pursuant to sections 479A-C of Companies Act 2006 over the liabilities of the
following subsidiaries and, as such, they are exempt from the requirements of
the Act relating to the audit of individual financial information, or
preparation of individual financial information, as appropriate, for this
financial year.
Name Company number Outstanding liabilities
£'000
Centaur Communications Limited 01595235 16,013
Chiron Communications Limited(1) 01081808 -
Econsultancy.com Limited 04047149 2
Market Makers Incorporated Limited 05063707 -
Taxbriefs Holdings Limited(2) 03572069 -
TheLawyer.com Limited 11491880 2,581
Xeim Limited 05243851 10,077
(1) Chiron Communications Limited was liquidated on 11 January 2023.
(2) The process to strike off Taxbriefs Holdings Limited commenced in January
2023.
See note 12 for changes to subsidiary holdings during the year.
29 Events after the reporting date
No material events have occurred after the reporting date except the
commencement of the new office lease from 1 January 2023 as disclosed in notes
18 and 27.
FIVE YEAR RECORD (UNAUDITED)
2018* 2020 2021 2022
2019
Revenue (£m) 50.3 39.6 32.4 39.1 41.6
Operating (loss) / profit (£m) (20.3) (7.8) (2.3) 1.6 3.9
Adjusted operating (loss) / profit (£m) (2.2) (1.2) - 3.2 5.3
Adjusted operating (loss) / profit margin (4%) (3%) - 8% 13%
(Loss) / profit before tax (£m) (20.5) (8.1) (2.6) 1.4 3.8
Adjusted (loss) / profit before tax (£m) (2.4) (1.5) (0.3) 3.0 5.2
Adjusted diluted EPS (pence) (1.4) 0.3 0.3 1.9 2.6
Ordinary dividend per share (pence) 3.0 1.5 0.5 1.0 1.1
Special dividend per share (pence) - 2.0 - - 5.0
Net operating cash flow (£m) 5.6 4.7 2.1 9.5 8.4
Average permanent headcount (FTE) 758 317 282 264 269
Revenue per head (£'000) 66 125 115 148 155
Revenue from continuing operations by type 2018* 2019 2020 2021 2022
£m £m £m £m £m
Premium Content 14.4 14.4 13.2 12.9 14.7
Training and Advisory 8.0 7.6 8.5 12.6 14.4
Marketing Services 4.5 4.3 2.9 3.3 2.9
Events 6.5 6.4 2.5 3.8 4.7
Marketing Solutions 4.6 4.6 4.2 5.0 3.5
Recruitment Advertising 2.7 2.3 1.1 1.5 1.4
Telemarketing Services 9.6 - - - -
50.3 39.6 32.4 39.1 41.6
Other 2018* 2019 2020 2021 2022
£m £m £m £m £m
Goodwill and other intangible assets 78.1 61.2 46.1 44.2 43.8
Other assets and liabilities (11.5) (9.4) (7.2) (10.2) (11.0)
Net assets before net cash 66.6 51.8 38.9 34.0 32.8
Net cash 0.1 9.3 8.3 13.1 16.0
Total equity 66.7 61.1 47.2 47.1 48.8
* 2018 has not been re-presented with regards to discontinued operations
relating to the cessation of the MarketMakers telemarketing business in 2020.
DIRECTORS, ADVISERS AND OTHER CORPORATE INFORMATION
Company registration number
04948078
Incorporated / domiciled in
England and Wales
Registered office
10 York Road
London
SE1 7ND
United Kingdom
Directors
Colin Jones (Chair)
Swagatam Mukerji (Chief Executive Officer)
Simon Longfield (Chief Financial Officer)
William Eccleshare
Carol Hosey
Leslie-Ann Reed
Richard Staveley
Company Secretary
Helen Silver
Independent Auditor
Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
Registrars
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
External Lawyers
Dechert LLP
160 Queen Victoria Street
London
EC4V 4QQ
Brokers
Investec Bank plc
Singer Capital Markets
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