REG - Centaur Media PLC - Preliminary results for the year ended 31 Dec 2023
13/03/2024 07:00
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RNS Number : 5983G Centaur Media PLC 13 March 2024
Centaur Media plc
Incorporated in England and Wales
Registration number: 04948078
LEI: 2138005WK87G7DQRQI62
ISIN: GB0034291418
13 March 2024
Centaur Media Plc
Preliminary results for the year ended 31 December 2023
Comfortably exceeded MAP23 EBITDA margin objective
Strong growth in EBITDA and EBITDA margin
Centaur Media plc ("Centaur"), an international provider of business
information, training and specialist consultancy, is pleased to present its
preliminary results for the year ended 31 December 2023.
Swag Mukerji, Chief Executive Officer, commented:
"This year's performance is the culmination of our MAP23 strategy which
achieved its three clear objectives: to implement a simple, efficient and
scalable operating model, develop high quality, trusted products which are the
leaders in their markets, and build the credibility of Centaur's management
team for delivering on its strategic and financial commitments. We have
significantly grown our profitability and built a business with an impressive
proportion of higher quality revenue, providing us with a scalable platform
for long-term sustainable future growth.
Looking ahead, we are determined to keep driving performance beyond MAP23 to
become a customer-centric business intelligence and learning organisation with
growth from organic revenue, new product development and selective bolt-on
acquisitions. I firmly believe Centaur has the talent, strategy and financial
discipline to achieve its ambitious objectives and look forward to updating
the market on our next phase of growth at our upcoming Capital Markets Day."
Financial highlights
Margin Acceleration Plan 2023 (MAP23) highlights since 2020:
· Revenue from continuing operations grew by 27%
· Higher quality revenue grew by 38% and now represents 80% of total revenue
(2020: 67%)
· Adjusted(1) EBITDA grew 155% from £3.8m to £9.7m
· Adjusted(1) EBITDA margin more than doubled to 26%
· Total returns to shareholders as ordinary and special dividends of 8.9p per
share (£12.8m)
2023 trading:
£m 2023 2022
Statutory revenue 37.3 38.4
Adjusted(1) EBITDA margin 26% 21%
Adjusted(1) EBITDA 9.7 8.1
Adjusted(1) operating profit 7.6 4.9
Statutory operating profit 6.1 3.6
Group statutory profit after taxation 4.9 2.8
Net cash(2) 9.5 16.0
Ordinary dividend (pence per share) 1.8 1.1
Adjusted(1) diluted earnings per share (pence) 4.2 2.6
· Revenue from continuing operations declined by 3% to £37.3m while higher
quality revenue streams grew by 3%
· Adjusted(1) EBITDA grew 20% to £9.7m
· Adjusted(1) EBITDA margin improved to 26% from 21%
· Net cash(2) of £9.5m, after paying ordinary and special dividends during the
year of £8.9m, gives capacity to reinvest for growth
· Final ordinary dividend of 1.2p per share giving total ordinary dividends of
1.8p for the year (2022: 1.1p)
Financial and strategic highlights
This year marked the successful delivery of Centaur's MAP23, which targeted an
adjusted(1) EBITDA margin of 23% by 2023. Centaur recorded another year of
profitable growth building on the structures and processes that have been
implemented over the past three years, despite the continued macroeconomic and
geopolitical uncertainties.
Centaur generated an adjusted(1) EBITDA margin of 26% (up from 21% in 2022 and
12% in 2020), comfortably exceeding the MAP23 target and resulting in net
cash(2) of £9.5m at 31 December 2023 after paying ordinary and special
dividends of £8.9m in the year.
Centaur reported revenue of £37.3m (slightly down from £38.4m in 2022) after
a softening in the macroeconomic environment trading conditions and
inflationary pressures. Centaur recorded good performance across its higher
quality revenue streams in Premium Content and Training and Advisory, which
now collectively represent 80% of the business, up from 76% in 2022.
The higher quality revenue streams have driven the successful delivery of
MAP23. The demand for these products and services, across a range of
industries and sectors, are resilient in markets characterised by change
driven by technological advancement, structural transformation and
globalisation. These fundamentals provide Centaur with a clear opportunity to
use its competitive advantage, operational leverage and deep level of
expertise to further grow in these sectors.
The strategic objective across Centaur's suite of brands is to position them
for continued growth by investing in customer-centric business intelligence
and learning products and harnessing cross-selling opportunities, with the aim
of enabling customers to deliver better corporate outcomes through building
competitive advantage in their markets.
In 2023, Centaur's higher quality revenue streams continued to demonstrate
their resilience focused on The Lawyer, MW Mini MBA, Econsultancy and
Influencer Intelligence.
· The Lawyer Premium Content revenue grew by 9% due to corporate subscription
renewal rates of 108% supported by Signal and Litigation Tracker, its
data-driven paid-for products. However, Events revenue of £1.8m was down 11%
year-on-year due to shortfalls in sponsorship across several events dampening
the overall revenue growth to 1%.
· MW Mini MBA continued its growth with revenue up 8% driven by a 23% yield
increase, although delegate numbers declined by 12%. The new third MW Mini MBA
in Management course has contributed above management expectations.
· Econsultancy revenue declined 14% owing to delays in Training and Advisory on
the client side, due to budgetary caution. We expect to gain the revenue
benefit of these delays in 2024.
· Influencer Intelligence recorded a small decrease in renewal rates to 84%,
down from 90% in 2022, but saw reassuring momentum build through H2.
Due to the macroeconomic environment, performance at Really B2B and Design
Week was below management's expectations. As such we made the difficult
decision to close these businesses in December 2023. We are confident that
this will further enable Centaur to focus on its higher quality revenue
streams, which will drive improved profitability and provide the business with
a solid platform for further growth.
Centaur has a strong management team including recent appointments such as
Xeim's marketing director, a new MD for Mini MBA, a new Chief People Officer,
a CTO and a Data Director, who together with the hard work and determination
of everyone at Centaur have successfully delivered MAP23. Alongside this
progress, Centaur has taken clear operational and financial steps to focus on
organic growth and manage costs to reinforce the resilience of the business.
These steps will ensure that Centaur is best positioned to withstand any
continued macroeconomic uncertainty, building a platform for long-term,
sustainable growth beyond MAP23.
Outlook
Overall, the culmination of our three-year strategy sees Centaur having
undergone a significant transformation building a scalable platform for future
growth. While we start 2024 cautious of the macroeconomic environment's impact
on Centaur, we remain reassured by the foundations built during MAP23.
Centaur's strategic priority is to become a customer-centric business
intelligence and learning organisation and the next stage of the journey has
begun. We look forward to providing more detail on this at our Capital Markets
Day on 23 April (see enquiries below).
Dividend
Centaur's Board believes in the long-term fundamentals of the business,
recognising the importance of shareholder returns, and has been distributing
progressive dividend payments to investors throughout the MAP23 period.
Additionally, Centaur has paid significant special dividends in 2023 as the
success of the strategy has led to considerably stronger cash flows and a more
robust balance sheet. As a result of the special dividends paid in 2023,
Centaur's net cash(2) position reduced to £9.5m as at 31 December 2023 (2022:
£16.0m) but remains at a strong level.
In line with our normal dividend policy of distributing 40% of adjusted(1)
retained earnings, the Board has declared a final dividend of 1.2 pence per
share (£1.7m), which when added to the interim dividend provides a total
dividend for the year of 1.8 pence per share (£2.6m) for 2023. In total,
dividends of £12.8m (8.9 pence per share) have been paid over the course of
MAP23.
(1 ) Adjusted EBITDA is adjusted operating profit before
depreciation and amortisation. Adjusted results exclude adjusting items as
detailed in note 4 of the financial information.
(2 ) Net cash is the total of cash and cash equivalents and
short-term deposits.
Enquiries
Capital Markets Day at 9am on 23 April 2024 at WeWork office room 15A, 10 York
Road, London SE1 7ND. For details, please contact Teneo below or email
investor.relations@centaurmedia.com
Centaur Media plc
Swag Mukerji, Chief Executive Officer 020 7970 4000
Simon Longfield, Chief Financial Officer
Teneo
Zoë Watt / Oliver 07713 157561 / 07917 221748
Bell
Note to editors
Centaur is an international provider of business information, training and
specialist consultancy within the marketing and legal professions that
inspires and enables people to excel at what they do, to raise their
aspirations and to enable our clients to deliver better performance.
Advise. Inform. Connect.
Our purpose
We enable ambitious leaders to see around corners and deliver change
· We inspire and empower the world's most dynamic leaders in the marketing and
legal professions
· We are committed to the delivery of market-leading insight and tangible
outcomes to build long-term, sustainable growth
· Every article, every piece of research, every data point, every live event,
training programme, advisory opportunity and interaction turbo-charges leaders
and their teams to predict the future and then make it happen
Our vision
We aim to be the 'go to' company in the international marketing and legal
sectors to:
· Provide business information to customers using data, content and insight;
· Offer training services through digital initiatives and online programmes;
· Connect specific communities through digital media and events; and
· Advise businesses on how to improve their performance and return on
investments.
We will build strong and lasting relationships with our customers by providing
cutting-edge insight and analysis to deliver long-term sustainable returns for
our shareholders.
Our business
Centaur is an international provider of business information, training and
specialist consultancy in the marketing and legal professions that inspires
and enables people to excel at what they do. Our Xeim and The Lawyer business
units serve the marketing and legal sectors respectively and, across both, we
offer a wide range of products and services targeted at helping our customers
add value.
Our reputation is built on the trust and confidence arising from a deep
understanding of these sectors and a strong track record of providing our
customers with market-leading insight, content, data and training. Our key
strengths are the expertise of our people, the quality of our brands and
products, and our ability to harness technology to innovate continually and
develop our customer offering. This enables us to help our customers raise
their aspirations and deliver better performance.
Highlights of the year and during MAP23
Financial highlights
Revenue from continuing operations Adjusted(1 2) EBITDA
£37.3m £9.7m (26% margin)
2022: £38.4m 2022: £8.1m (21% margin)
2021: £35.4m 2021: £6.4m (16% margin)
2020: £29.3m 2020: £3.8m (12% margin)
Net Cash(3) Adjusted(1) diluted EPS
£9.5m 4.2p
2022: £16.0m 2022: 2.6p
2021: £13.1m 2021: 1.9p
2020: £8.3m 2020: 0.3p
(1) See alternative performance measures section for definition of
adjusted results
(2) Adjusted EBITDA is reconciled to Adjusted Operating Profit in note
1(b)
(3) Net Cash is the total of cash and cash equivalents and short-term
deposits
Strategic and operational highlights
· Strong performance exceeding the MAP23 EBITDA margin objective of 23% in 2023
· Clear operational and financial steps taken to focus on organic growth and
manage costs that have built a strong platform for future profitable revenue
growth
· Increase in higher quality revenue to 80% of revenue from continuing
operations
· New customer-centric products launched including MW Mini MBA in Management
course, additional learning courses on Econsultancy's LMS platform and Horizon
Live in The Lawyer
· Closure of two brands, Really B2B and Design Week, after revenue and profit
performance below expectations
· Strong balance sheet with net cash balance of £9.5m after a return of capital
to shareholders paid of £8.9m in ordinary and special dividends
Chief Executive's Statement
This is my fifth Annual Report as CEO of Centaur and I'm pleased with the
platform for growth that our ambitious Margin Acceleration Plan 2023 ("MAP23")
has provided the Group.
The last three years have been characterised by macroeconomic turbulence,
sector headwinds and extended impact of Covid-19. Centaur weathered these
challenges to deliver significant improvements to the quality of its
customers, products and profitability, aligning the business with resilient
demand for high-quality business information and digital training services.
This year, we succeeded in generating an Adjusted EBITDA margin of 26%,
reflecting our focus on higher quality revenue streams and the operational
leverage inherent within our business. This exceeded the ambitious
profitability target for 2023 set out three years ago of 23% and has been
achieved substantially through profitable revenue growth.
We are determined to keep driving performance and growth beyond MAP23,
strengthening our position as a leading customer-centric business intelligence
and learning organisation through organic revenue growth including new product
development, and inorganic revenue growth through acquisitions. We look
forward to providing more detail after the Group's preliminary results,
setting out our vision to deliver the specialist insights our customers need
to succeed.
Financial performance
In 2023, Centaur reported revenue from continuing operations of £37.3m (a
reduction of 3% from £38.4m in 2022), and a Group Adjusted EBITDA of £9.7m
(up from £8.5m in 2022). It was satisfying to see that the Adjusted EBITDA
margin for 2023 was 26% (up from 21% in 2022) which was well ahead of the 23%
target that we had set three years ago and more than double the margin of 12%
in 2020, when we started our Margin Acceleration Plan.
The Group ended the year with net cash of £9.5m, a reduction from £16.0m
last year after paying out significant ordinary and special dividends in 2023
totalling £8.9m. I am pleased with the contribution generated from the trust
and confidence that our customers have in all of our brands and that we have
continued to gain positive momentum over the past twelve months.
Strategic and operational steps have been taken to provide a scalable platform
for further organic profitable revenue growth to reinforce the resilience of
the business. These include developing our offer for customers, focusing on
blue-chip multinational clients, building our pipeline of new business,
conducting negotiations with suppliers at a Group level and implementing
flexible reward structures to retain and recruit top talent.
There has been a slight decrease in employee numbers on 2022, as increases in
growth areas were offset by the closure in December of Design Week and
ReallyB2B and reductions in other less strategically important areas of the
business. We have also reduced our central costs from 2022, along with our
related carbon footprint, aided by our move into a smaller London office at
the start of 2023 and will continue to control our cost base in 2024. These
steps will maintain our operational leverage and ensure that the business is
best positioned to withstand any wider macroeconomic uncertainty and build on
the achievements of MAP23.
Dividends
The Group has proposed a final dividend of 1.2 pence per ordinary share to
take our total ordinary dividends for 2023 to 1.8 pence, now significantly
above the 1.0 pence per share that we have as a de minimis under our dividend
policy. In addition to the special dividend of 3.0 pence per share paid in
February 2023, a further special dividend of 2.0 pence per share, was paid in
March 2023, bringing the total dividends paid out to shareholders during 2023
to £8.9m. The total dividends paid out to shareholders in relation to the
whole MAP23 period of 2021 to 2023 will have been 8.9 pence or £12.8m.
Operational review
Centaur comprises two business units, Xeim and The Lawyer. Xeim forms 78% of
our revenue and is focused on the marketing sector across a wide range of
industries. The Lawyer is focused on the legal sector and drives the other
22%. Both sectors continue to experience opportunities created from
significant disruption, driven by technological advances and artificial
intelligence, structural change and globalisation. This gives Centaur
substantial competitive advantages to build on the achievements of MAP23 and
grow in these sectors.
To enable the delivery of MAP23 and improve the quality of revenue streams,
Centaur had prioritised investment and resource allocation to the brands that
have been identified as key drivers of growth across the two business units.
The Lawyer is one of these key brands, while the other three form part of the
Xeim portfolio (MW Mini MBA, Econsultancy and Influencer Intelligence).
Over the course of MAP23, we made significant progress in developing these key
brands and the rest of our brand portfolio. Our aim has been to position each
of these for further growth, developing cross-selling opportunities and
enhancing their shared capabilities, to enable our customers to deliver better
business outcomes through building competitive advantage in their markets.
The MW Mini MBA successfully launched its third course in September, the MW
Mini MBA in Management, which exceeded expectations with 400 participants. The
brand delivered an 8% increase in revenue, although we saw lower volumes on
the two main courses, driven by a 23% increase in yield from discount
management, price rises at the start of the year and the launch of the third
course, which contributed above management expectations. We also launched a
new network, open to the alumni of all MW Mini MBA courses, creating an online
community to facilitate peer-to-peer connections and opportunities for
development. Strengthening the capabilities of the brand was a key focus in
the year with the recruitment of a new Managing Director, Tim Plyming, who has
joined from the Open University.
Econsultancy continued to show its resilience with several large blue-chip
multinational contract wins, including Sky, John Lewis Partnership and Jaguar
Land Rover. However, Training and Advisory revenue declined - we saw good new
customer wins and grew our digital and learning subscription services but
suffered overall slower growth due to customer-driven contractual and delivery
delays. A continued programme of improvements saw the brand develop its
eLearning content on the new platform, including four completely new eCommerce
courses, a new Omnichannel course for the Consumer Packaged Goods sector and
translation of all eLearning materials into 5 languages. This programme
extension built on the developments in 2022 that enabled the business to
combine its consultancy and online subscription learning, enhancing the offer
to customers.
Influencer Intelligence recorded a small decrease in renewal rates to 84%.
Although down from 90% levels in 2022, we were reassured by the momentum built
through the year, reaching 87% in H2. Informed by recent insights to the needs
of customers, the brand has developed a new product proposition of Discover
(the right influencers for you), Evaluate (how they fit with your brand
goals), Plan (your activations) and Contact (chosen brand ambassadors).
The Lawyer had another year of strong performance with Premium Content revenue
growing by 9% due to corporate subscription renewal rates of 108% supported by
Signal and Litigation Tracker, its data-driven paid-for products. However,
Events revenue of £1.8m was down 11% year-on-year due to shortfalls in
sponsorship across several events dampening the overall revenue growth to 1%.
In November, we launched Horizon Live, an interactive forum for our senior law
firm subscribers to get deeper insights from our content and data in a live
environment and saw strong uptake. We added 85 new corporate subscription
accounts in 2023, by developing new content for Europe, including our
"Passport" newsletter, and new content for law firms outside of the top 100,
as well as upgrading single subscriptions to corporate accounts. Further, our
podcast has gained good traction in 2023, enabling subscribers to listen to
lively debates on the most important issues in the market.
Looking at our portfolio of other brands, the strategic decision to close
Design Week and Really B2B has sharpened the overall focus of the Group, and
the brands that remain add to the customer proposition of Xeim's key brands.
Elsewhere, we were pleased with Oystercatchers' success advising customers
with agency review and selection, Marketing Week's platform and content
development and Festival of Marketing's sold-out October event at The Brewery
in London.
People
A key part of our strategy is ensuring that we have the right people in the
right positions to deliver our intended growth. Over the course of 2023,
Centaur continued to strengthen its management team. We made several excellent
new hires, including Tim Plyming who joined as Managing Director of the
Marketing Week Mini MBA, Agata Kreutzinger as Data Director and Nicola Moretti
who took over as Chief People Officer following the retirement of Jacquie
MacKenzie at the end of the year.
Following the delivery of MAP23, and replacing the existing Centaur Strategy
Group, we have set up a new Leadership Forum to focus on the strategy, targets
and delivery of the next phase of Centaur's growth.
Looking to 2024
MAP23 has delivered three years of higher quality revenue, EBITDA and EBITDA
margin growth. The increased share of repeatable and higher quality revenue
streams from a higher proportion of blue-chip customers has further reinforced
the resilience of the Group.
The Lawyer will accelerate its penetration of UK and European law firms with
new content, a new digital platform for subscribers, the launch of a
subscription intelligence service powered by proprietary data and the
expansion of face-to-face forums with Horizon Live. This will enable The
Lawyer to deliver industry leading sector intelligence in the UK market, as
well as the significantly larger opportunities internationally.
At Xeim, developing paid content and information via corporate packages,
subscriptions and partnerships will remain a strategic priority, alongside our
industry leading events. Xeim's brands will enhance their focus on addressing
the market demand in the UK creating solutions for the top 200 marketing spend
companies and identifying opportunities to provide solutions to blue-chip
multinational customers.
Alongside these strategic priorities, we will continue to extract value from
back-office synergies for Xeim and The Lawyer, across technology, facilities
and shared services.
Summary
I wanted to conclude by reflecting on the progress MAP23 has delivered over
the past three years and reiterate my thanks to everyone at Centaur for their
hard work and determination in delivering this strategy so successfully.
Profitably growing revenue whilst doubling the margins of a Group this size is
a considerable achievement and has taken a tremendous team effort -
particularly when set against the upheaval that has been experienced through
Covid-19 and other macroeconomic uncertainty.
As we look to 2024, Centaur remains entirely focused on growth. We want to
provide the most advanced and competitive offering in the marketplace - to do
that we will continue to build the quality of our expertise, focus on our
strategically important revenue streams and adapt to deliver productively and
profitably what our customers need and want.
Key Performance Indicators
The Group has set out the following core financial and non-financial metrics
to measure the Group's performance. The KPIs are monitored by the Board and
the focus on these measures will support the successful implementation of the
MAP23 strategy. These indicators are discussed in more detail in the CEO and
financial reviews.
KPI Commentary
Financial
Underlying revenue growth/(decline)(1) 2023: (3)% The growth/(decline) in revenue from continuing operations adjusted, if
applicable, to exclude the impact of event timing differences and the revenue
2022: 8% contribution arising from acquired or disposed businesses.
See Chief Executive Officer's Statement and the Financial Review for
explanation of this year's decline.
Adjusted EBITDA margin(1) 2023: 26% Adjusted EBITDA as a percentage of revenue where Adjusted EBITDA is defined as
Adjusted operating profit before depreciation and impairment of tangible
2022: 21% assets and amortisation and impairment of intangible assets other than those
acquired through a business combination.
The continued improvement in margin reflects the increase in higher quality
revenue streams together with the impact of the Group's operational leverage.
Adjusted diluted EPS(1) 2023: 4.2 pence Diluted earnings per share calculated using the Adjusted earnings, as set out
in note 9 to the financial information.
2022: 2.6 pence
The 62% increase in EPS reflects the increase in post-tax profitability.
Cash conversion(1) 2023: 80% The percentage by which Adjusted operating cash flow covers Adjusted EBITDA as
set out in the financial performance review.
2022: 99%
The cash conversion in 2023 was impacted by adverse movements in working
capital compared to the level achieved in 2022.
Non-financial
Attendance at Festival of Marketing 2023: 998 Number of unique delegates attending the Festival of Marketing event in
October.
2022: 920
This year's event reached the capacity of the venue. The number of paid
delegates increased compared to 2022.
Delegates on MW Mini MBA course 2023: 5,709 Number of delegates on MW Mini MBA courses.
2022: 6,490 There was a decrease in the number of delegates on the two main courses but
2023 also includes delegates on the new Management course launched in
September. Yield per delegate was however significantly higher in 2023.
Xeim customers >£50k 2023: 71 (£10.1m) Number and value of Xeim customers with sales greater than £50,000.
2022: 81 (£11.6m) The focus on higher value accounts continued in 2023, although reduced revenue
from advisory contracts relates to the decrease in the number of higher paying
customers. The average value of these accounts was maintained year on year.
Top 250 law firm customers 2023: 149 (£3.4m) Number and value of revenue from top 200 UK law firms and top 50 US law firms.
2022: 144 (£3.2m) The focus on higher value accounts continued in 2022 with a 24% increase in
the average value of these accounts.
(1 ) See definitions in Financial Review
Performance: Financial Review
Overview
2023 marks the final year of our three-year MAP23 strategy, which focused on
revenue and profit growth and the achievement of an Adjusted EBITDA margin of
23% in 2023. I am pleased to report that this margin objective was exceeded in
2023, where a 26% Adjusted EBITDA margin has been achieved, more than double
the margin of 12% in 2020 which was the base year for the strategy.
During the three-year strategy period, the Group has faced challenges posed by
the pandemic and wide-ranging economic uncertainties. However, through these
challenging times, Centaur has grown continuing revenue by 27% since 2020 and
the proportion of higher quality revenue from Premium Content and Training and
Advisory has now increased to 80%, compared to 67% at the start of MAP23. The
aim of reaching £45m of revenue during MAP23 was not realised due to the
closure of two businesses and the drag on growth from non-strategic
Recruitment Advertising and Marketing Solutions revenue.
During 2023 Centaur has increased its higher quality revenue from Premium
Content and Training and Advisory by 3%. However, macroeconomic headwinds
impacted the Group's non-strategic revenue, resulting in a decrease in revenue
from continuing operations of 3% from 2022.
A combination of careful cost management and the proportionally greater
contribution from higher quality revenue has contributed to a decrease of 11%
in the Group's operating expenses, resulting in Adjusted EBITDA of £9.7m at a
26% margin, up from £8.1m and 21% in 2022.
During 2023 the difficult decision was made to close our Really B2B and Design
Week businesses, which struggled to maintain their revenue and profitability
in an economic downturn. The results of these businesses have been presented
in discontinued operations. The Financial Review in this Annual Report focuses
on continuing operations, unless otherwise specified.
Performance
Group
Statutory revenue fell by £1.1m to £37.3m in 2023, a decrease of 3%. Xeim
decreased 4% whereas The Lawyer increased 1%. Revenue generated from outside
the UK remained steady at 38% (2022: 38%) with an increase of 25% in revenue
from the Rest of the World offset by decreases in all other regions.
Adjusted EBITDA increased by 19% from £8.1m to £9.7m at a margin of 26%
(2022: 21%). This improved margin was on slightly decreased revenue,
demonstrating the contribution provided by our higher quality revenue streams,
resolute cost control and improved efficiencies within the Group.
The Group posted an increase of 54% in adjusted operating profit to £7.6m
(2022: £4.9m) as a result of the increase in adjusted EBITDA in addition to a
lower IFRS 16 depreciation expense since the move to a smaller office in 2023.
The Group achieved an adjusted profit after taxation of £6.4m (2022: £3.7m)
resulting in an impressive 62% increase in fully diluted adjusted earnings per
share to 4.2 pence per share.
Despite an increase in EBITDA, a focus on cash management and healthy cash
collections from customers, during 2023 net cash balances decreased from
£16.0m to £9.5m, most significantly due to ordinary and special dividend
payments of £8.9m as well as payment of exceptional costs and lower working
capital balances.
Xeim
Xeim's revenue for 2023 was £28.9m, a decrease of 4% from £30.1m in 2022.
Premium Content in 2023 remained flat with modest growth in Econsultancy and
Marketing Week offset by slight declines in other brands in a tough
environment for both renewals and new business.
Revenue from Training and Advisory showed modest year-on-year growth of 3% as
a result of a robust trading performance by Oystercatchers and from a
continued increase in MW Mini MBA revenue. Conversely, delays by customers for
both engagement and delivery caused a significant year-on-year shortfall for
Econsultancy.
The planned return to one single physical Festival of Marketing Event in
October, after multiple virtual and hybrid events in prior years, caused an
expected decline in Events revenue of 18% year-on-year, although as a result
of this focus, the October event achieved a 37% increase in revenue.
Recruitment Advertising of £0.1m was weak throughout the year and fell 59%
from 2022. This has been a long-term non-strategic revenue stream for Xeim and
a decision has been made to exit this revenue stream going forward.
Marketing Solutions saw a year-on-year decline of 33% with low spend from
customers facing an increasingly tough market environment.
Xeim posted an Adjusted EBITDA of £9.0m for the year, an increase of 10% from
£8.1m in 2022. This was driven by improving revenue margins and a 10%
decrease in operating costs.
Econsultancy's momentum in 2022 met headwinds in 2023 particularly in Training
and Advisory after delays on the customer side, leading to a 14% revenue
decline year-on-year. We expect to gain the revenue benefit of these delays in
2024 as we continue to deliver valuable consultancy to our blue-chip
international customers. In Premium Content we continue to invest in
Econsultancy's blended multi-touch learning strategy to aid the recovery of
subscription renewal rates which stand at 72% (2022: 82%) and new business.
Influencer Intelligence benefitted in 2022 from the recovery of the retail and
fashion industries. In 2023 this improvement plateaued with a small decrease
in renewal rates to 84% (2022: 90%), partially upheld by maintaining the
performance of new business in line with 2022. The resulting revenue saw a
decline of 5% year-on-year.
The MW Mini MBA continued to grow with revenue up 8% driven by a 23% yield
increase, but total delegate numbers declining by 12%. MW Mini MBA retains
excellent Net Promoter Scores of over +65 on all four of the Marketing and
Brand course cohorts in 2023 and strong loyalty from recurring corporate
customers. A third MW Mini MBA in Management course was launched in 2023, with
its first cohort in September seeing 400 delegates and revenue performing well
above expectations.
Of our other Xeim brands, revenue declined by 6% year-on-year, with slightly
lower renewal rates for Fashion Monitor and a decline in Marketing Solutions
revenue for both Marketing Week and Creative Review, in addition to the
planned reduction to one Festival of Marketing event. These shortfalls were
partially offset by an extremely pleasing performance in Oystercatchers which
grew revenue by almost 50% as more branded customers reviewed their
advertising agencies.
During 2023 the difficult decision was made to close our Really B2B and Design
Week businesses, which saw lower revenue and profitability in an economic
downturn due to the loss of key customers. The results of these businesses
have been presented in discontinued operations.
The Lawyer
Revenue for The Lawyer grew by 1%. Premium Content revenue showed strong
growth of 9% primarily from TheLawyer.com corporate subscriptions performance
with an impressive renewal rate of 108% (2022: 116%) bolstered by new business
more than doubling from 2022. This resulted in the book of business growing by
16% and customer volume by 18%. The renewal rate for Signal remained strong at
97% (2022: 102%) and despite new business being lower than expectations the
book of business has grown 9% year-on-year.
The Lawyer retains a significant penetration of the top 100 law firms of 91%
(2022: 90%) demonstrating the value delivered to our customers and continues
to gain penetration into the next tier of top 150 UK law firms.
The Lawyer ran a series of successful conferences, roundtables and awards
during 2023, although Events revenue of £1.8m was down 11% year-on-year with
shortfalls in sponsorship across a number of conference events. Marketing
Solutions also had a difficult year with a 25% decline in revenue. Recruitment
advertising stayed materially flat year-on-year and although being a
non-strategic revenue stream for Centaur as a whole, remains valuable for The
Lawyer as a source of connectivity with its audience.
This led to a rise in adjusted EBITDA from £3.0m in 2022 to £3.4m in 2023 at
a margin of 41%. The underlying business is performing strongly with resilient
renewal rates and continued engagement by users indicating how important The
Lawyer is to leading law firms and their fee earners.
Measurement and non-statutory adjustments
The statutory results of the Group are presented in accordance with UK-adopted
International Accounting Standards (IFRS). The Group also uses alternative
reporting and other non-GAAP measures as explained below and as defined in the
table at the end of this section.
Adjusting items
Adjusted results are not intended to replace statutory results but are
prepared to provide a better comparison of the Group's core business
performance by removing the impact of certain items from the statutory
results. The Directors believe that adjusted results and adjusted earnings per
share are the most appropriate way to measure the Group's operational
performance because they are comparable to the prior year and consequently
management review the results of the Group on an adjusted basis internally.
Statutory operating profit from continuing operations reconciles to adjusted
operating profit and adjusted EBITDA as follows:
Note 2023 Re-presented
£m 2022
£m
Statutory operating profit 6.1 3.5
Adjusting items:
Exceptional costs 4 0.3 0.1
Amortisation of acquired intangible assets 11 0.1 0.5
Share-based payments 23 1.1 0.8
Adjusted operating profit 7.6 4.9
Depreciation and amortisation 3 2.1 3.2
Adjusted EBITDA 9.7 8.1
Adjusted EBITDA margin 26% 21%
Adjusting items from continuing operations of £1.5m in the year (2022:
£1.4m) are comprised as follows:
Adjusting Item Description
Exceptional costs Exceptional costs of £0.3m relate to strategic restructuring of the Group as
it prepares for the next phase of growth following MAP23. In 2022, exceptional
costs of £0.1m relate to the office lease termination fee less the gain on
remeasurement of the office lease.
Amortisation of acquired intangible assets Amortisation of acquired intangible assets of £0.1m (2022: £0.5m) has fallen
as certain assets have become fully amortised.
Share-based payments Share-based payments of £1.1m increased in the year due to an additional year
of LTIP issuance to members of the Centaur Strategy Group (2022: £0.8m).
Segment profit
Segmental profit is reported to improve clarity around performance and
consists of the gross contribution for the Xeim and The Lawyer Business Units
less specific overheads and allocations of the central support teams and
overheads that are directly related to each Business Unit. Any costs not
attributable to either Xeim or The Lawyer, remain as part of Central costs.
The table below shows the statutory revenue from continuing operations, which
is the same as the underlying revenue, for each Business Unit:
Re-presented(1)
Xeim The Total Xeim The Total
Lawyer Lawyer
2023 2023 2023 2022 2022 2022
£m £m £m £m £m £m
Revenue
Premium Content 10.0 5.2 15.2 10.0 4.7 14.7
Training and Advisory 14.8 - 14.8 14.4 - 14.4
Events 2.1 1.8 3.9 2.6 2.0 4.6
Marketing Solutions 1.9 0.4 2.3 2.9 0.6 3.5
Recruitment Advertising 0.1 1.0 1.1 0.2 1.0 1.2
Total statutory revenue 28.9 8.4 37.3 30.1 8.3 38.4
Revenue growth (4)% 1% (3)%
1 See note 1(a) for description of the prior year re-presentation.
The table below reconciles the adjusted operating profit/(loss) for each
segment to the adjusted EBITDA:
Re-presented(1)
Xeim The Lawyer Central Total Xeim The Lawyer Central Total
2023 2023 2023 2023 2022 2022 2022 2022
£m £m £m £m £m £m £m £m
Revenue 28.9 8.4 - 37.3 30.1 8.3 - 38.4
Adjusted net operating expenses (21.4) (5.4) (2.9) (29.7) (24.3) (5.9) (3.3) (33.5)
Adjusted operating profit/(loss) 7.5 3.0 (2.9) 7.6 5.8 2.4 (3.3) 4.9
Adjusted operating margin 26% 36% 20% 19% 29% 13%
Depreciation and amortisation 1.5 0.4 0.2 2.1 2.3 0.6 0.3 3.2
Adjusted EBITDA 9.0 3.4 (2.7) 9.7 8.1 3.0 (3.0) 8.1
Adjusted EBITDA margin 31% 40% 26% 27% 36% 21%
(1 ) See note 1(a) for description of the prior year
re-presentation.
Net finance costs
Net finance costs were £nil (2022: £0.1m). The Group held positive cash
balances throughout the year and therefore, in both 2023 and 2022, finance
costs mainly relate to the commitment fee payable for the revolving credit
facility and interest on lease payments for right-of-use assets. In 2023 this
was offset by interest income of £0.3m (2022: £0.1m) on cash and short-term
deposits.
Taxation
A tax charge of £0.8m (2022 re-presented: £0.9m) has been recognised on
continuing operations for the year. The adjusted tax charge was £1.2m (2022
re-presented: £1.2m). The Company's profits were taxed in the UK at a blended
rate of 23.5% (2022: 19.0%), but the resulting adjusted tax charge is at an
effective tax rate of 16% due mainly to a tax credit in respect of prior years
of £0.4m on tax losses for which the deferred tax asset has now been
recognised at a rate of 25%, being the future rate of tax in the UK from April
2023. See note 7 for a reconciliation between the statutory reported tax
charge and the adjusted tax charge.
Discontinued operations
In 2023, discontinued operations relate to the closure of Really B2B and
Design Week due to the economic downturn and loss of key customers. The 2022
comparatives include the re-presentation of Really B2B and Design Week into
discontinued operations within the reported statutory results for the Group.
See note 8 for further details.
Discontinued Discontinued Continuing As reported
2023 2022 2022 2022
£m £m £m £m
Revenue 2.0 3.2 38.4 41.6
Adjusted net operating expenses (2.0) (2.8) (33.5) (36.3)
Adjusted operating profit - 0.4 4.9 5.3
Adjusting items (0.5) (0.1) (1.3) (1.4)
Operating (loss)/profit (0.5) 0.3 3.6 3.9
Net finance costs - - (0.1) (0.1)
(Loss)/profit before tax (0.5) 0.3 3.5 3.8
Taxation - (0.1) (0.9) (1.0)
(Loss)/profit after tax (0.5) 0.2 2.6 2.8
Earnings per share
The Group has delivered adjusted diluted earnings per share for the year of
4.2 pence (2022: 2.6 pence). Diluted earnings per share for the year were 3.2
pence (2022: 1.8 pence). Full details of the earnings per share calculations
can be found in note 9 to the financial information.
Dividends
Under the Group's dividend policy, Centaur targets a pay-out ratio of 40% of
adjusted retained earnings, subject to a minimum dividend of 1.0 pence per
share per annum.
Therefore, the Group has proposed a final dividend of 1.2 pence per ordinary
share in respect of 2023. This brings the total ordinary dividends relating to
2023 to 1.8 pence (2022: 1.1 pence) per ordinary share, the second year in a
row that we will have paid above the 1.0 pence per share minimum due to the
increasing profitability of the Group.
The final ordinary dividend is subject to shareholder approval at the Annual
General Meeting and, if approved, will be paid on 24 May 2024 to all ordinary
shareholders on the register at the close of business on 10 May 2024.
Cash flow
2023 2022
£m £m
Adjusted operating profit 7.6 5.3
Depreciation and amortisation 2.1 3.2
Movement in working capital (1.9) (0.1)
Adjusted operating cash flow 7.8 8.4
Capital expenditure (2.1) (1.4)
Cash impact of adjusting items (0.5) (0.2)
Taxation (1.6) -
Repayment of lease obligations and net interest paid (0.8) (1.9)
Free cash flow 2.8 4.9
Purchase of own shares and payments on share options exercised (0.4) (0.6)
Dividends paid to Company's shareholders (8.9) (1.4)
(Decrease)/increase in net cash(1) (6.5) 2.9
Opening net cash(1) 16.0 13.1
Closing net cash(1) 9.5 16.0
Cash conversion 80% 99%
(1 ) Net cash is the total of cash and cash equivalents and
short-term deposits.
Adjusted operating cash flow is not a measure defined by IFRS. Centaur defines
adjusted operating cash flow as cash flow from operations excluding the impact
of adjusting items. The Directors use this measure to assess the performance
of the Group as it excludes volatile items not related to the core trading of
the Group and includes the Group's management of capital expenditure.
A reconciliation between cash flow from operations and adjusted operating
cash flow is shown in note 1(b) to the financial information.
The cash conversion of 80% (2022: 99%) has been adjusted to exclude these
one-off items. The cash conversion in 2023 decreased from historical levels as
a result of negative working capital movements for lower accrued costs, lower
deferred revenue balances and the timing of cash payments, although the
conversion rate is expected to return to normal historical levels going
forward. Over the MAP23 period, Centaur has generated £14.2m of free cash
flow with a cash conversion rate of 109%.
Financing and bank covenants
On 16 March 2021 the Group signed a revolving credit facility with NatWest
which allows the Group to borrow up to £10m and has a three-year duration
with the option of two further one-year periods. On 5 December 2022,
management exercised the option to extend for the first further one-year
period. On 19 February 2024, management exercised the option to extend for the
second further one-year period until 31 March 2026. The Group has not drawn
down any borrowings under the facility.
Balance sheet
2023 2022
£m £m
Goodwill and other intangible assets 44.7 43.8
Property, plant and equipment 2.2 0.4
Deferred taxation 1.9 1.6
Deferred income (8.4) (8.9)
Other current assets and liabilities (4.0) (4.1)
Non-current assets and liabilities (0.8) -
Net assets before cash 35.6 32.8
Net cash(1) 9.5 16.0
Net assets 45.1 48.8
(1 ) Net cash is the total of cash and cash equivalents and
short-term deposits.
Goodwill and other intangibles have increased by £0.9m as a result of
investment in capital expenditure to support profitable revenue growth
initiatives. Property, plant and equipment has increase by £1.8m
predominantly due to the cessation of the previous property lease on 31
December 2022 meaning the right-of-use asset was disposed of, with the
right-of-use asset for the new lease being recognised on 1 January 2023.
Deferred income has decreased by £0.5m mainly as a result of slower renewals
and new business on premium content subscriptions. Other current and
non-current liabilities have increased by £0.7m predominately due to the
recognition of the new lease liability on 1 January 2023.
Going concern
After due consideration, as required under IAS 1 Presentation of Financial
Statements, of the Group's forecasts for at least twelve months from the date
of this report and the effectiveness of risk management processes, the
Directors have concluded that it is appropriate to continue to adopt the going
concern basis in the preparation of the consolidated financial information for
the year ended 31 December 2023.
As detailed under the Risk Management section, the Directors have assessed the
viability of the Group over a three-year and nine-month period to December
2027 and the Directors have a reasonable expectation that the Company will be
able to continue in operation and meet its liabilities as they fall due over
that period.
Conclusion
Centaur has exceeded its adjusted EBITDA margin objective set out under MAP23
for 2023, despite a difficult trading environment for revenue growth. The
culmination of our three-year Margin Acceleration Plan strategy sees Centaur
with a solid platform for future growth, a very high proportion of higher
quality revenue, a controlled cost base, effective cash management and
efficient processes. The next stage of Centaur's journey to become a
customer-centric business intelligence and learning organisation is about to
get under way and we look forward to providing more detail on this following
the preliminary results.
Alternative performance measures
Measure Definition
Adjusted EBITDA Adjusted operating profit before depreciation and impairment of tangible
assets and amortisation and impairment of intangible assets other than those
acquired through a business combination.
Adjusted EBITDA margin Adjusted EBITDA as a percentage of revenue.
Adjusted EPS EPS calculated using adjusted profit for the period.
Adjusting items Items as set out in the statement of consolidated income and notes 1(b) and 4
of the financial information including exceptional items, amortisation of
acquired intangible assets, profit/(loss) on disposal of assets, share-based
payment expense, volatile items predominantly relating to investment
activities and other separately reported items.
Adjusted net operating expenses Net operating expenses excluding adjusting items.
Adjusted operating profit Operating profit excluding adjusting items.
Adjusted profit before tax Profit before tax excluding adjusting items.
Adjusted retained earnings Profit for the year excluding adjusting items.
Adjusted tax charge Tax charge excluding the tax charge on adjusted items.
Cash conversion Adjusted operating cash flow (excluding any one-off significant cash flows) /
adjusted EBITDA.
Exceptional items Items where the nature of the item, or its magnitude, is material and likely
to be non-recurring in nature as shown in note 4.
Free cash flow Increase/decrease in cash for the year before the impact of debt,
acquisitions, disposals, dividends and share repurchases.
Net cash The total of cash and cash equivalents and short-term deposits.
Segment profit Adjusted operating profit of a segment after allocation of centrally managed
overheads that are directly related to each segment or business unit.
Underlying revenue Statutory revenue adjusted to exclude the impact of revenue arising from
acquired businesses, disposed businesses that do not meet the definition of
discontinued operations per IFRS 5, and closed business lines ("excluded
revenue").
Risk Management
Risk management approach
The Board has overall responsibility for the effectiveness of the Group's
system of risk management and internal controls, and these are regularly
monitored by the Audit Committee.
The Executive Committee, Company Secretary and the Head of Legal are
responsible for identifying, managing and monitoring material and emerging
risks in each area of the business and for regularly reviewing and updating
the risk register, as well as reporting to the Audit Committee in relation to
risks, mitigations and controls. As the Group operates principally from one
office and with relatively flat management reporting lines, members of the
Executive Committee are closely involved in day-to-day matters and are able to
identify areas of increasing risk quickly and respond accordingly.
The responsibility for each risk identified is assigned to a member of the
Executive Committee. The Audit Committee considers risk management and
controls regularly and the Board formally considers risks to the Group's
strategy and plans as well as the risk management process as part of its
strategic review.
The risk register is the core element of the Group's risk management process.
The register is maintained by the Company Secretary with input from the
Executive Committee and the Head of Legal. The Executive Committee initially
identifies the material risks and emerging risks facing the Group and then
collectively assesses the severity of each risk (by ranking both the
likelihood of its occurrence and its potential impact on the business) and the
related mitigating controls.
As part of its risk management processes, the Board considers both strategic
and operational risks, as well as its risk appetite in terms of the tolerance
level it is willing to accept in relation to each principal risk, which is
recorded in the Company's risk register. This approach recognises that risk
cannot always be eliminated at an acceptable cost and that there are some
risks which the Board will, after due and careful consideration, choose to
accept.
The Group's risk register, its method of preparation and the operation of the
key controls in the Group's system of internal control are regularly reviewed
and overseen by the Audit Committee with reference to the Group's strategic
aims and its operating environment. The register is also reviewed and
considered by the Board.
As part of the ongoing enhancement of the Group's risk monitoring activities,
we reviewed and updated the procedures by which we evaluate principal risks
and uncertainties during the year including the consideration of
climate-related risks as described in the ESG report.
Principal risks
The Group's risk register currently includes operational and strategic risks.
The principal risks faced by the Group in 2023, taken from the register,
together with the potential effects and mitigating factors, are set out below.
The Directors confirm that they have undertaken a robust assessment of the
principal and emerging risks facing the Group. Financial risks are shown in
note 26 to the financial information.
Rank Risk Description of risk and impact Risk mitigation/control procedure Movement in risk
1 Sensitivity to UK/sector economic conditions. The world economy has been severely impacted by the Covid-19 pandemic, the We will mitigate the risk relating to our customers by adapting content to The Board considers this risk to be broadly the same as for the prior year.
conflict in Ukraine and the resulting impact with inflation having peaked at help them manage in the economic environment, focus on adding value to our
over 10% and UK interest rates over 5%. In addition, the UK economy has not subscription and eLearning products and improving user experience and customer
been growing. The Group continues to have sensitivity to UK/sector volatility service to protect renewal rates and new business. We will also continue to
and economic conditions. The impact has been acute on some of Centaur's target manage our cost base and utilise technology such as AI and machine learning to
market segments and corporate marketing budgets. improve our cost effectiveness.
The likelihood of ongoing volatility in 2024 is expected to be high despite Centaur continues to increase international organic growth to mitigate this
lowering inflation rates and there are varying views as to the timing and risk. We are also increasing our focus targeting larger scale multinational
extent of any recovery. businesses which have a more diversified risk profile.
Many of the Group's products are market-leading in their respective sectors
and are an integral part of our customers' operational processes, which
mitigates the risk of reduced demand for our products.
The Group regularly reviews the political and economic conditions and
forecasts for UK, including specific risks such as inflation, to assess
whether changes to its product offerings or pricing structures are necessary.
Rank Risk Description of risk and impact Risk mitigation/control procedure Movement in risk
2 Failure to achieve a high growth performance culture. Having completed the MAP23 strategy, Centaur's continued success depends on In January 2024, we are launching a refreshed approach to objective setting The Board considers this risk to be broadly the same as the prior year.
growing the business. In order to do this, it depends in large part on its and managing performance. Colleagues will agree a personal development plan
The risk that Centaur is unable to attract, develop and retain an ability to recruit, motivate and retain high quality experienced and qualified and annual objectives with their manager, linked to Centaur's overall 2024
appropriately skilled, diverse and responsible workforce and leadership team, employees in the face of often intense competition from other companies, objectives.
and maintain a healthy culture which encourages and supports ethical especially in London.
high-performance behaviours and decision-making.
Colleagues will have regular check ins with their manager to ensure they are
Investment in training, development and pay awards needs to be compelling but on track to clarify accountabilities, provide focus and build a high growth
Difficulties in recruiting and retaining staff could lead to loss of key will be challenging in the current economic and operating climate. performance culture.
senior staff.
Implementing a diverse and inclusive working environment that allows for agile There continues to be a significant focus on employee communication including
and remote delivery is necessary to keep the workforce engaged. It is also weekly updates, all company town hall and Q&A meetings and staff welfare
required for a flexible hybrid working model. calls.
Staff churn (a challenge for many companies in our sector) has been at lower Over the course of Q4 2023, the CSG and DICE have worked together to develop
levels during 2023, but we are continuing to improve our policies and Centaur's values. These will be launched in January 2024. The values will be
practices. included in the new performance management process and embedded in our
culture.
Developing the future business strategy beyond MAP23 and changes required in
skill set and culture are challenging and costly. We regularly review measures aimed at improving our ability to recruit,
onboard and retain employees. We continue to focus on bringing in higher
quality employees to replace leavers or in new roles to enhance our strategy
particularly in areas such as marketing, technology and data analytics.
We track employee engagement through weekly "check-ins" via our ENGAGE system
to gauge colleague sentiment and gain an understanding of key risks or
challenges.
DICE has helped to drive forward initiatives relating to diversity and
inclusion, through communication and social functions. This is sponsored by
the CEO and a Non-Executive Director and chaired by the CPO.
The CEO has held employee breakfasts with the objective of generating a
continuous performance improvement culture within the Group. This has
identified six continuous improvement projects which have delivered process
improvements in 2023. This will continue in 2024.
An annual review ensures staff flight risks and training needs are identified
with a focus on reward and development areas. All London based staff continue
to be paid at or above the London Living Wage.
Our HR team hold exit interviews for all leavers to identify and resolve areas
of concern.
Rank Risk Description of risk and impact Risk mitigation/control procedure Movement in risk
3 Fraudulent or accidental breach of our IT network, major systems failure or 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, our users' digital products and support platforms with disruption to Centaur continues to develop its CRM, e-commerce and finance systems and has
our revenue collection activities. removed a number of legacy systems in recent years reducing the Group's cyber
risk. To improve staff awareness, Centaur continues to train staff on cyber
Centaur could incur significant costs and suffer negative consequences as a security and phishing with regular testing and online learning.
result of this, such as remediation costs (including liability for stolen
assets or information, and repair of any damage caused to Centaur's IT network Centaur has a business continuity plan which includes its IT systems and there
infrastructure and systems) as well as reputational damage and loss of is daily, overnight back-up of data, stored off-site.
investor confidence resulting from any operational disruption.
Websites are hosted by specialist third-party providers who typically provide
A serious occurrence of a loss, theft or misuse of personal data could also warranties relating to security standards. All of our websites are hosted on a
result in a breach of data protection requirements and the effects of this. secure platform which is cloud hosted and databases have been cleansed and
See Risk 4: Regulatory compliance. upgraded.
The Data Director ensures that rigorous controls are in place to ensure that
warehouse data can only be downloaded by the data team. Integration of the
warehouse with current databases and data captured and stored elsewhere is
ongoing.
In an ever-increasing sophisticated environment of Cyber incidents, Centaur
has significantly improved protection, creating a dedicated cross-technology
cyber workgroup to review processes, systems and access. As a result, Centaur
has strengthened access across all critical systems and improved monitoring.
In addition, Centaur has been externally audited and certified ISO/IEC
27001:2013 "Information Security Management". Given the advanced nature and
complexity of Cyber incidents, security is kept under constant review.
Please see risk 4: Regulatory compliance for specific mitigations relating to
the security of personal data and GDPR compliance.
Rank Risk Description of risk and impact Risk mitigation/control procedure Movement in risk
4 Regulatory compliance (GDPR, PECR and other similar legislation) includes Centaur has strict requirements in respect of its handling of personal data 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.
under UK General Data Protection Regulation ('GDPR'), the Data Protection Act aspects of GDPR, DPA and PECR.
strict requirements regarding how Centaur handles personal data, including 2018 ('DPA'), the Privacy and Electronic Communications Regulations ('PECR')
that of customers. There is the risk of a fine from the ICO, third party and related law and regulation ('Data Protection Law'). Centaur's The Data Compliance Committee (overseen by the CFO) monitors Centaur's ongoing
claims, as well as reputational damage if we do not comply. obligations under Data Protection Law are continuously evolving meaning this compliance with data protection laws.
area requires ongoing focus.
Staff are required to undertake online data protection awareness and data
PECR includes specific obligations for businesses like Centaur regarding how security awareness training annually.
they conduct electronic marketing calls, emails, texts and use cookies and
similar technologies, among other things. Centaur has appointed a DPO (Wiggin LLP) to oversee its compliance with data
protection laws. Further, Centaur's in-house legal team keeps abreast of
In the event of a serious breach of the GDPR and / or PECR, Centaur could be material developments in data protection law and regulation and advice from
subject to a significant fine from the regulator, the ICO and claims from external law firms is sought where appropriate.
third parties, including customers, as well as reputational damage.
Given the increasingly global nature of our business and our customers
The maximum fines for breaches are £17.5 million (GDPR) and £500,000 (PECR) Centaur's approach to complying with data protection laws in other
respectively and directors can be liable for serious breaches of PECR's jurisdictions is kept under review.
marketing rules.
Other countries and jurisdictions worldwide have their own laws relating to
data and privacy. Where Centaur is required to comply with the laws in non-UK
jurisdictions there is a risk that Centaur may not be compliant with all such
laws and could therefore be subject to regulatory action and fines from the
relevant regulators and data subjects.
ICO guidance relating to use of cookies, and further changes to the laws
relating to data privacy, ad tech and electronic marketing expected in the
future, will further increase the regulatory burden for businesses like
Centaur and the requirements in this regard will need to be kept under review.
Viability Statement
In accordance with provision 31 of the UK Corporate Governance Code 2018, the
Directors have assessed the viability of the Group over a three-year and
nine-month period from signing of this Annual Report to December 2027, taking
account of the Group's current position, the Group's strategy, the Board's
risk appetite and, as documented above, the principal risks facing the Group
and how these are managed. Based on the results of this analysis, the
Directors have a reasonable expectation that the Group and the Company will be
able to continue in operation and meet its liabilities as they fall due over
the period to December 2027.
The Board has determined that the three-year and nine-month period to December
2027 is an appropriate period over which to provide its viability statement
because the Board's financial planning horizon covers a four-year period. In
making their assessment, the Directors have taken account of the Group's £10m
three-year revolving credit facility (which allows extensions to March 2026 on
similar terms), cash flows, dividend cover and other key financial ratios over
the period.
The covenants of the facility require a minimum interest cover ratio of 4 and
net leverage not exceeding 2.5 times. In the calculation of net leverage
Adjusted EBITDA excludes the impact of IFRS 16. The Group is not expected to
breach any of these covenants in any of the scenarios run for the viability
statement and is not forecasting that the facility will be utilised during the
viability period.
The base scenario uses a four-year forecast to December 2027. The four-year
forecast was built, bottom-up from the budget for 2024 together with
appropriate growth factors for 2025 to 2027.
The metrics in the base case are subject to stress testing which involves
sensitising key assumptions underlying the forecasts both individually and in
unison. The key sensitivity is on Adjusted EBITDA which is the primary driver
of performance in the viability assessment. This sensitised scenario assumes
that Adjusted EBITDA is lowered by 10% in every period that the viability
statement covers.
In both the base case and sensitised scenarios, the Group would not be
required to rely on the revolving credit facility in order to fund its daily
operations. Sensitising the model for changes in the assumptions and risks
affirmed that the Group and the Company would remain viable over the
three-year and nine-month period to December 2027.
Going concern basis of accounting
In accordance with provision 30 of the UK Corporate Governance Code 2018, the
Directors' statement as to whether they consider it appropriate to adopt the
going concern basis of accounting in preparing the financial information and
their identification of any material uncertainties, including the principal
risks outlined above, to the Group's ability to continue to do so over a
period of at least twelve months from the date of approval of the financial
information and for the foreseeable future, being the period as discussed in
the viability statement above.
Statement of Directors' Responsibilities in respect of the financial
information
The Directors are responsible for preparing the Annual Report and the
financial information in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial information for each
financial year. Therefore, the Directors have prepared the Group financial
information in accordance with UK-adopted International Accounting Standards
(IFRS) and Company financial information in accordance with IFRS. Under
company law the Directors must not approve the financial information unless
they are satisfied that they give a true and fair view of the state of affairs
of the Group and Company and of the profit or loss of the Group and Company
for that period. In preparing the financial information, the Directors are
required to:
· select suitable accounting policies and then apply them consistently;
· state whether applicable IFRS have been followed for the Group financial
information and applicable IFRS have been followed for the Company financial
information, subject to any material departures disclosed and explained in the
financial information;
· make judgements and accounting estimates that are reasonable and prudent; and
· prepare the financial information on the going concern basis unless it is
inappropriate to presume that the Group and Company will continue in business.
The Directors are also responsible for safeguarding the assets of the Group
and Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the financial information and
the Directors' Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial information may differ from legislation in
other jurisdictions.
Directors' confirmations
The Directors consider that the annual report and accounts, taken as a whole,
is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Group and Company's position and performance,
business model and strategy.
Each of the Directors, whose names and functions are listed in the Governance
Report confirm that, to the best of their knowledge:
· the Company financial information, which have been prepared in accordance with
UK-adopted IASs, give a true and fair view of the assets, liabilities,
financial position and result of the Company;
· the Group financial information, which have been prepared in accordance with
UK-adopted IASs, give a true and fair view of the assets, liabilities,
financial position and profit of the Group; and
· the Directors' Report includes a fair review of the development and
performance of the business and the position of the Group and Company,
together with a description of the principal risks and uncertainties that it
faces.
In the case of each Director in office at the date the Directors' Report is
approved:
· so far as the Director is aware, there is no relevant audit information of
which the Group and Company's auditors are unaware; and
· they have taken all the steps that they ought to have taken as a Director in
order to make themselves aware of any relevant audit information and to
establish that the Group and Company's auditors are aware of that information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2023
Note Adjusted Adjusting Statutory Re-presented(2) Re-presented(2)
Results(1) Items(1) Results Re-presented(2) Adjusting Statutory
2023 2023 2023 Adjusted Items(1) Results
£'000 £'000 £'000 Results(1) 2022 2022
2022 £'000 £'000
£'000
Continuing operations
Revenue 2 37,329 - 37,329 38,384 - 38,384
Net operating expenses 3 (29,725) (1,491) (31,216) (33,441) (1,388) (34,829)
Operating profit / (loss) 7,604 (1,491) 6,113 4,943 (1,388) 3,555
Finance income 6 266 - 266 85 - 85
Finance costs 6 (245) - (245) (158) - (158)
Net finance income / (costs) 21 - 21 (73) - (73)
Profit / (loss) before tax 7,625 (1,491) 6,134 4,870 (1,388) 3,482
Taxation 7 (1,217) 410 (807) (1,194) 264 (930)
Profit / (loss) for the year from continuing operations 6,408 (1,081) 5,327 3,676 (1,124) 2,552
Discontinued operations
(Loss) / profit for the year from discontinued operations after tax 8 (63) (414) (477) 273 (25) 248
Profit / (loss) for the year attributable to owners of the parent 6,345 (1,495) 4,850 3,949 (1,149) 2,800
Total comprehensive income / (loss) attributable to owners of the parent 6,345 (1,495) 4,850 3,949 (1,149) 2,800
Earnings / (loss) per share attributable to owners of the parent 9
Basic from continuing operations 4.4p (0.7p) 3.7p 2.6p (0.8p) 1.8p
Basic from discontinued operations - (0.3p) (0.3p) 0.1p - 0.1p
Basic 4.4p (1.0p) 3.4p 2.7p (0.8p) 1.9p
Fully diluted from continuing operations 4.2p (0.7p) 3.5p 2.5p (0.8p) 1.7p
Fully diluted from discontinued operations - (0.3p) (0.3p) 0.1p - 0.1p
Fully diluted 4.2p (1.0p) 3.2p 2.6p (0.8p) 1.8p
(1) Adjusted results exclude adjusting items, as detailed in note 1(b).
(2) See note 1(a) for description of the prior year re-presentation.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
Attributable to owners of the Company
Note Share 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 2022 15,141 (5,471) 1,101 471 80 143 35,643 47,108
Profit for the year and total comprehensive income - - - - - - 2,800 2,800
Currency translation adjustment - - - - - 1 - 1
Transactions with owners in their capacity as owners:
Dividends 24 - - - - - - (1,436) (1,436)
Purchase of own shares 23 - (604) - - - - - (604)
Exercise of share awards 22,23 - 212 - (54) - - (158) -
Lapsed share awards 23 - - - (14) - - 14 -
Fair value of employee services 23 - - - 724 - - - 724
Tax on share-based payments 14 - - - - - - 233 233
As at 31 December 2022 15,141 (5,863) 1,101 1,127 80 144 37,096 48,826
Profit for the year and total comprehensive income - - - - - - 4,850 4,850
Currency translation adjustment - - - - - (17) - (17)
Transactions with owners in their capacity as owners:
Dividends 24 - - - - - - (8,916) (8,916)
Purchase of own shares 23 - (322) - - - - - (322)
Exercise of share awards 22,23 - 1,276 - (396) - - (880) -
Fair value of employee services 23 - - - 939 - - - 939
Tax on share-based payments 14 - - - - - - (292) (292)
As at 31 December 2023 15,141 (4,909) 1,101 1,670 80 127 31,858 45,068
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
Attributable to owners of the Company
Note Share 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 2022 15,141 (4,135) 1,101 471 80 24,149 36,807
Loss for the year and total comprehensive loss - - - - - (4,619) (4,619)
Transactions with owners in their capacity
as owners:
Dividends 24 - - - - - (1,436) (1,436)
Exercise of share awards 23 - - - (54) - (27) (81)
Lapsed share awards 23 - - - (14) - 14 -
Fair value of employee services 23 - - - 724 - - 724
Tax on share-based payments 14 - - - - - 101 101
As at 31 December 2022 15,141 (4,135) 1,101 1,127 80 18,182 31,496
Loss for the year and total comprehensive loss - - - - - (4,521) (4,521)
Transactions with owners in their capacity as owners:
Dividends 24 - - - - - (8,916) (8,916)
Exercise of share awards 23 - - - (396) - (312) (708)
Fair value of employee services 23 - - - 939 - - 939
Tax on share-based payments 14 - - - - - (159) (159)
As at 31 December 2023 15,141 (4,135) 1,101 1,670 80 4,274 18,131
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
Registered number 04948078
Note 31 December 31 December
2023 2022
£'000 £'000
Non-current assets
Goodwill 10 41,162 41,162
Other intangible assets 11 3,522 2,611
Property, plant and equipment 12 2,226 387
Deferred tax assets 14 2,177 1,673
Other receivables 15 166 27
49,253 45,860
Current assets
Trade and other receivables 15 5,089 5,357
Cash and cash equivalents 16 1,996 7,501
Short-term deposits 17 7,500 8,500
Current tax assets 21 379 165
14,964 21,523
Total assets 64,217 67,383
Current liabilities
Trade and other payables 18 (8,589) (9,652)
Lease liabilities 19 (952) -
Deferred income 20 (8,352) (8,885)
(17,893) (18,537)
Net current (liabilities) / assets (2,929) 2,986
Non-current liabilities
Lease liabilities 19 (1,025) -
Deferred tax liabilities 14 (231) (20)
(1,256) (20)
Net assets 45,068 48,826
Capital and reserves attributable to owners of the Company
Share capital 22 15,141 15,141
Own shares (4,909) (5,863)
Share premium 1,101 1,101
Other reserves 1,750 1,207
Foreign currency reserve 127 144
Retained earnings 31,858 37,096
Total equity 45,068 48,826
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
Registered number 04948078
Note 31 December 31 December
2023 2022
£'000 £'000
Non-current assets
Investments 13 66,081 65,529
Deferred tax assets 14 1,082 375
Other receivables 15 879 1,225
68,042 67,129
Current assets
Trade and other receivables 15 136 136
136 136
Total assets 68,178 67,265
Current liabilities
Trade and other payables 18 (50,047) (35,769)
(50,047) (35,769)
Net current liabilities (49,911) (35,633)
Net assets 18,131 31,496
Capital and reserves attributable to owners of the Company
Share capital 22 15,141 15,141
Own shares (4,135) (4,135)
Share premium 1,101 1,101
Other reserves 1,750 1,207
Retained earnings 4,274 18,182
Total equity 18,131 31,496
The Company has taken advantage of the exemption available under section 408
of the Companies Act 2006 and has not presented its own statement of
comprehensive income in this financial information. The Company's loss for the
year was £4,521,000 (2022: loss of £4,619,000).
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2023
Note 2023 2022
£'000 £'000
Cash flows from operating activities
Cash generated from operations 25 7,303 8,402
Tax paid 7 (1,589) (30)
Interest paid 6 (50) -
Net refund of lease deposit 19 116 -
Net cash generated from operating activities 5,780 8,372
Cash flows from investing activities
Purchase of property, plant and equipment 12 (111) (284)
Purchase of intangible assets 11 (1,944) (1,073)
Interest received 6 220 63
Investment in short-term deposits 17 1,000 (8,500)
Net cash flows used in investing activities (835) (9,794)
Cash flows from financing activities
Finance costs paid 6 (73) (71)
Repayment of obligations under lease 19 (973) (1,921)
Termination of lease 19 - (243)
Purchase of own shares 22 (322) (604)
Share options exercised 23 (97) -
Dividends paid to Company's shareholders 24 (8,916) (1,436)
Extension fee on revolving credit facility 25 (20) -
Net cash flows used in financing activities (10,401) (4,275)
Net decrease in cash and cash equivalents (5,456) (5,697)
Cash and cash equivalents at beginning of the year 7,501 13,065
Effects of foreign currency exchange rate changes (49) 133
Cash and cash equivalents at end of the year 16 1,996 7,501
COMPANY CASH FLOW STATEMENT
for the year ended 31 December 2023
Note 2023 2022
£'000 £'000
Cash flows from operating activities
Cash generated from operating activities 25 9,085 1,507
Cash flows from financing activities
Finance costs paid 6 (73) (71)
Share options exercised 23 (76) -
Dividends paid to Company's shareholders 24 (8,916) (1,436)
Extension fee on revolving credit facility 25 (20) -
Net cash flows used in financing activities (9,085) (1,507)
Net increase in cash and cash equivalents - -
Cash and cash equivalents at beginning of the year - -
Cash and cash equivalents at end of the year 16 - -
NOTES TO THE FINANCIAL INFORMATION
1 Summary of material accounting policies
The principal accounting policies adopted in the preparation of these
consolidated and Company financial information are set out below. These
policies have been consistently applied to all of the periods presented,
unless otherwise stated. The financial information is for the Group consisting
of Centaur Media Plc and its subsidiaries, and the Company, Centaur Media Plc.
Centaur Media Plc is a public company limited by shares and incorporated in
England and Wales.
(a) Basis of preparation
The financial information in this preliminary announcement has been extracted
from the audited Group Financial Statements for the year ended 31 December
2023 and does not constitute statutory accounts within the meaning of section
434 of the Companies Act 2006. The Group Financial Statements for 2022 were
delivered to the registrar of companies, and those for 2023 will be delivered
in due course. The auditor's report on the Group Financial Statements for 2022
and 2023 were both unqualified and unmodified. The auditors' report was signed
on 12 March 2024. The Group Financial Statements and this preliminary
announcement were approved by the Board of Directors on 12 March 2024.
The consolidated and Company financial information has been prepared in
accordance with UK-adopted International Accounting Standards (IFRS) and with
the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The financial information has been prepared
on a historical cost basis except where stated otherwise within the accounting
policies.
In preparing the consolidated and Company financial information management has
considered the impact of climate change, taking into account the relevant
disclosures in the Strategic Report, including those made in accordance with
the recommendations of the Taskforce on Climate-related Financial Disclosures.
This included an assessment of assets with indefinite and long lives as well
as impairment assessments of CGUs (including forecasted cash flows), and how
they could be impacted by measures taken to address global warming.
Recognising that the environmental impact of the Group's operations, and the
use of the Group's services, is relatively low, no issues were identified that
would impact the carrying values of such assets or have any other impact
on the financial information.
Going concern
The financial information has been prepared on a going concern basis. The
Directors have carefully assessed the Group's ability to continue trading and
have a reasonable expectation that the Group and Company have adequate
resources to continue in operational existence for at least twelve months from
the date of approval of this financial information and for the foreseeable
future, being the period in the viability statement.
At 31 December 2023, the Group had cash and cash equivalents of £1,996,000
(2022: £7,501,000) and short-term deposits of £7,500,000 (2022:
£8,500,000). Since March 2021, the Group has had a multi-currency revolving
credit facility with NatWest. The facility consists of a committed £10m
facility and an additional uncommitted £15m accordion option, both of which
can be used to cover the Group's working capital and general corporate needs.
In February 2024, the Group took the option to extend the facility for one
year and the facility now runs to 31 March 2026. £nil of this was drawn down
at 31 December 2023.
The Group has net current liabilities at 31 December 2023 amounting to
£2,929,000 (2022: net current assets £2,986,000). The net current liability
position primarily arose from its normal high levels of deferred income
relating to performance obligations to be delivered in the future rather than
an inability to service its liabilities. In the prior year, there were the
normal high levels of deferred income, however the higher levels of net cash
in 2022 of £16,001,000 (note 1(b)) and the termination of a property lease
resulting in nil lease liabilities at the balance sheet date resulted in
achieving a net current asset position. A lease agreement for new office space
was signed during the prior year, with a commencement date of 1 January 2023,
and has been recognised in lease liabilities as at 31 December 2023. An
assessment of cash flows for the next four financial years, which has taken
into account the factors described above, has indicated an expected level of
cash generation which would be sufficient to allow the Group to fully satisfy
its working capital requirements and the guarantee given in respect of its UK
subsidiaries, to cover all principal areas of expenditure, including
maintenance, capital expenditure and taxation during this year, and to meet
the financial covenants under the revolving credit facility. The Company has
net current liabilities at 31 December 2023 amounting to £49,911,000 (2022:
£35,633,000). In both the current and prior year, these almost entirely arose
from unsecured payables to subsidiaries which have no fixed date of repayment.
The preparation of financial information in accordance with IFRS requires the
use of estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial information and the reported
amounts of revenue and expenses during the year. Although these estimates are
based on management's best knowledge of the amount, events or actions, the
actual results may ultimately differ from those estimates.
Having assessed the principal risks and the other matters discussed in
connection with the Viability Statement which considers the Group and
Company's viability over a three-year period to March 2027, the Directors
consider it appropriate to adopt the going concern basis of accounting in
preparing both the consolidated financial information of the Group and the
financial information of the Company.
New and amended standards adopted by the Group
The Group has applied the following standards and amendments for the first
time for its annual reporting period commencing 1 January 2023:
· Disclosure of Accounting Policies - amendments to IAS 1 and IFRS Practice
Statement 2;
· Definition of Accounting Estimates - amendments to IAS 8; and
· Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - amendments to IAS 12.
The amendments listed above did not have any impact on the amounts recognised
in prior periods and are not expected to significantly affect the current or
future period.
New standards and interpretations not yet adopted
Certain amendments to accounting standards have been published that are not
mandatory for 31 December 2023 reporting periods and have not been early
adopted by the group. These amendments are not expected to have a material
impact on the entity in the current or future reporting periods and on
foreseeable future transactions.
Prior year re-presentation
Discontinued operations
Where the requirements of IFRS 5 have been met, the operational results of
closed brands have been presented in discontinued operations in the current
period and re-presented as discontinued in the comparative period. See note 8
for more details.
(b) Presentation of non-statutory measures
In addition to IFRS statutory measures, the Directors use various non-GAAP key
financial measures to evaluate the Group's performance and consider that
presentation of these measures provides shareholders with an additional
understanding of the core trading performance of the Group. The measures used
are explained and reconciled to their IFRS statutory headings below.
Adjusted operating profit and adjusted earnings per share
The Directors believe that adjusted results and adjusted earnings per share,
split between continuing and discontinued operations, provide additional
useful information on the core operational performance of the Group to
shareholders, and review the results of the Group on an adjusted basis
internally. The term 'adjusted' is not a defined term under IFRS and may not
therefore be comparable with similarly titled profit measurements reported by
other companies. It is not intended to be a substitute for, or superior to,
IFRS measurements of profit.
Adjustments are made in respect of:
· Exceptional costs - the Group considers items of income and expense as
exceptional and excludes them from the adjusted results where the nature of
the item, or its magnitude, is material and likely to be non-recurring in
nature so as to assist the user of the financial information to better
understand the results of the core operations of the Group. Details of
exceptional items are shown in note 4.
· Amortisation of acquired intangible assets - the amortisation charge for those
intangible assets recognised on business combinations is excluded from the
adjusted results of the Group since they are non-cash charges arising from
investment activities. As such, they are not considered reflective of the core
trading performance of the Group. Details of amortisation of acquired
intangible assets are shown in note 11.
· Share-based payments - share-based payment expenses or credits are excluded
from the adjusted results of the Group as the Directors believe that the
volatility of these charges can distort the user's view of the core trading
performance of the Group. Details of share-based payments are shown in note
23.
· Profit or loss on disposal of assets or subsidiaries - profit or loss on
disposals of businesses are excluded from adjusted results of the Group as
they are unrelated to core trading and can distort a user's understanding of
the performance of the Group due to their infrequent and volatile nature. See
note 4.
· Other separately reported items - certain other items are excluded from
adjusted results where they are considered large or unusual enough to distort
the comparability of core trading results year-on-year. Details of these
separately disclosed items are shown in note 4.
The tax related to adjusting items is the tax effect of the items above that
are allowable deductions for tax purposes, calculated using the standard rate
of corporation tax. See note 7 for a reconciliation between reported and
adjusted tax charges.
Further details of adjusting items are included in note 4. A reconciliation
between adjusted and statutory earnings per share measures is shown in note 9.
Profit before tax reconciles to adjusted operating profit as follows:
Note 2023 Re-presented(2)
£'000 2022
£'000
Profit before tax 6,134 3,482
Adjusting items
Exceptional operating costs 4 349 -
Amortisation of acquired intangible assets 11 47 490
Gain on remeasurement of lease 19 - (151)
Lease termination fee 12,19 - 243
Share-based payment expense 23 1,095 806
Adjusted profit before tax 7,625 4,870
Finance income 6 (266) (85)
Finance costs 6 245 158
Adjusted operating profit 7,604 4,943
(2) See note 1(a) for description of the prior year re-presentation.
Adjusted operating cash flow
Adjusted operating cash flow is not a measure defined by IFRS. It is defined
as cash flow from operations excluding the impact of adjusting items, which
are defined above, and including capital expenditure. The Directors use this
measure to assess the performance of the Group as it excludes volatile items
not related to the core trading of the Group and includes the Group's
management of capital expenditure. Statutory cash flow from operations
reconciles to adjusted operating cash as below:
Note 2023 2022
£'000 £'000
Reported cash flow from operating activities 25 7,303 8,402
Cash outflow of adjusting items from operations 472 -
Adjusted operating cash flow 7,775 8,402
Capital expenditure (2,055) (1,357)
Post capital expenditure cash flow 5,720 7,045
Our cash conversion rate for the year was 80% (2022: 99%).
Underlying revenue growth
The Directors review underlying revenue growth in order to allow a
like-for-like comparison of revenue between years. Underlying revenue
therefore excludes the impact of revenue contribution arising from acquired or
disposed businesses and other revenue streams that are not expected to be
ongoing in future years. There were no exclusions for underlying revenue in
the current or prior year. Statutory revenue growth is equal to underlying
revenue growth and is as follows:
Xeim The Lawyer Total
£'000 £'000 £'000
Reported and underlying revenue 2022 (re-presented(2)) 30,083 8,301 38,384
Reported and underlying revenue 2023 28,968 8,361 37,329
Reported and underlying revenue growth (4)% 1% (3)%
(2) See note 1(a) for description of the prior year re-presentation.
Adjusted EBITDA
Adjusted EBITDA is not a measure defined by IFRS. It is defined as adjusted
operating profit before depreciation and impairment of tangible assets and
amortisation and impairment of intangible assets other than those acquired
through a business combination. It is used by the Directors as a measure to
review performance of the Group and forms the basis of some of the Group's
financial covenants under its revolving credit facility. Adjusted EBITDA is
calculated as follows:
Note 2023
£'000 Re-presented(2)
2022
£'000
Adjusted operating profit (as above) 7,604 4,943
Depreciation of property, plant and equipment 3,12 1,133 2,028
Amortisation of computer software 3,11 930 1,136
Adjusted EBITDA 9,667 8,107
(2) See note 1(a) for description of the prior year re-presentation.
Net cash
Net cash is not a measure defined by IFRS. Net cash is calculated as cash and
cash equivalents, plus short-term deposits less overdrafts and bank borrowings
under the Group's financing arrangements. The Directors consider the measure
useful as it gives greater clarity over the Group's liquidity as a whole.
Group net cash is calculated as follows:
Note 2023
£'000 2022
£'000
Cash and cash equivalents 16 1,996 7,501
Short-term deposits 17 7,500 8,500
Net cash 9,496 16,001
(c) Principles of consolidation
The consolidated financial information incorporates the financial information
of Centaur Media Plc and all of its subsidiaries after elimination of
intercompany transactions and balances. The consolidated financial information
is presented in Pounds Sterling, which is the Group and Company's functional
and presentation currency.
(i) Subsidiaries
Subsidiaries are all entities controlled by the Group. The Group controls an
entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group
until the date that the Group ceases to control them.
(ii) Employee Benefit Trust
The Centaur Employees' Benefit Trust ('Employee Benefit Trust') is a trust
established by Trust deed in 2006 for the granting of shares to applicable
employees. Its assets and liabilities are held separately from the Company and
are fully consolidated in the consolidated statement of financial position.
Holdings of Centaur Media Plc shares by the Employee Benefit Trust are shown
within the 'own shares' reserve as a deduction from consolidated equity.
(d) Revenue recognition
Revenue is measured at the transaction price, which is the amount of
consideration to which the Group expects to be entitled in exchange for
transferring promised goods or services to the customer. Judgement may arise
in timing and allocation of transaction price when there are multiple
performance obligations in one contract. However, an annual impact assessment
is performed which has confirmed that the impact is immaterial in both the
current year and comparative year. Revenue arises from the sales of premium
content, training and advisory, events, marketing solutions and recruitment
advertising in the normal course of business, net of discounts and relevant
sales tax. Goods and services exchanged as part of a barter transaction are
recognised in revenue at the fair value of the goods and services provided.
Returns, refunds and other similar allowances, which have historically been
low in volume and immaterial in magnitude, are accounted for as a reduction in
revenue as they arise.
Where revenue is deferred it is held as a balance in deferred income on the
consolidated statement of financial position. At any given reporting date,
this deferred income is current in nature and is expected to be recognised
wholly in revenue in the following financial year, with the exception of
returns and credit notes, which have historically been low in volume and
immaterial in magnitude.
The Group recognises revenue earned from contracts as individual performance
obligations are met, on a stand-alone selling price basis. This is when value
and control of the product or service has transferred, being when the product
is delivered to the customer or the period in which the services are rendered
as set out in more detail below.
Premium Content
Revenue from subscriptions is deferred and recognised on a straight-line basis
over the subscription period, reflecting the continuous provision of paid
content services over this time. Revenue from individual publication sales is
recognised at the point at which the publication is delivered to the customer.
In general, the Group bills customers for premium content at the start of the
contract.
Training and Advisory
Revenue from training and advisory is deferred and recognised over the period
of the training or when a separately identifiable milestone of a contract has
been delivered to the customer. In general, the Group bills customers for
training and advisory up front or on a milestone basis as the service is
delivered.
Events
Consideration received in advance for events is deferred and revenue is
recognised at the point in time at which the event takes place. In general,
the Group bills customers for events before the event date.
Marketing Solutions
Marketing solutions revenue from display and bespoke campaigns is recognised
over the period that the service is provided. In general, the Group bills
customers for marketing solutions on delivery.
Recruitment Advertising
Sales of online recruitment advertising space are recognised in revenue over
the period during which the advertisements are placed. Sales of recruitment
advertising space in publications are recognised at the point at which the
publication occurs. In general, the Group bills customers for recruitment
advertising on delivery.
(e) Investments
In the Company's financial information, investments in subsidiaries are stated
at cost less provision for impairment in value.
Investments are reviewed for impairment whenever events indicate that the
carrying value may not be recoverable. An impairment loss is recognised to the
extent that the carrying value exceeds the higher of the investments fair
value less cost of disposal and its value-in-use. An asset's value-in-use is
calculated by discounting an estimate of future cash flows by the pre-tax
weighted average cost of capital. Any impairment is recognised in the
statement of comprehensive income. If there has been a change in the estimates
used to determine the investment's recoverable amount, impairment losses that
have been recognised in prior periods may be reversed. This reversal is
recognised in the statement of comprehensive income.
(f) Income tax
The tax expense represents the sum of current and deferred tax.
Current tax is based on the taxable profit for the year. Taxable profit
differs from profit as reported in the consolidated statement of comprehensive
income because it excludes items of income or expense that are taxable or
deductible in other years, and it further includes items that are never
taxable or deductible. The Group and Company's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the reporting date.
Deferred tax is provided in full, using the liability method, on temporary
differences between the carrying amounts of assets and liabilities in the
consolidated financial information and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available to utilise those temporary differences and losses. Such assets and
liabilities are not recognised if the temporary difference arises from
goodwill or the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax is calculated at the enacted or substantively enacted tax rates
that are expected to apply in the year when the liability is settled, or the
asset is realised. Deferred tax is charged or credited to the consolidated
statement of comprehensive income, except when it relates to items charged or
credited directly to equity or other comprehensive income, in which case the
deferred tax is recognised in equity or other comprehensive income
respectively.
The carrying amount of deferred tax assets is reviewed at each reporting date
and is reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
(g) Leases
Lessee accounting
Under IFRS 16, leases are accounted for on a 'right-of-use model' reflecting
that, at the commencement date, the Group as a lessee has a financial
obligation to make lease payments to the lessor for its right to use the
underlying asset during the lease term. The financial obligation is recognised
as a lease liability, and the right to use the underlying asset is recognised
as a right-of-use ('ROU') asset. The ROU assets are recognised within
property, plant and equipment on the face of the consolidated statement of
financial position and are presented separately in note 12.
The lease liability is initially measured at the present value of the lease
payments using the rate implicit in the lease or, where that cannot be readily
determined, the incremental borrowing rate ('IBR'). The incremental borrowing
rate is estimated to discount future lease payments to measure the present
value of the lease liability at the lease commencement date. Such a rate is
based on what the Group estimates the lessee would have to pay a third party
to borrow the funds necessary to obtain an asset of a similar value to the
right-of-use asset, with similar terms, security and economic environment.
Subsequently, the lease liability is measured at amortised cost, with interest
increasing the carrying amount and lease payments reducing the carrying
amount. The carrying amount is remeasured to reflect any reassessment or lease
modifications, or to reflect revised in-substance fixed lease payments.
The ROU asset is initially measured at cost which comprises:
· the amount of the initial measurement of the lease liability;
· any lease payments made at or before the commencement date, less any lease
incentives received;
· any initial direct costs; and
· an estimate of costs to be incurred at the end of the lease term.
Subsequently, the ROU asset is measured at cost less accumulated depreciation
and impairment losses. Depreciation is calculated to write off the cost on a
straight-line basis over the lease term.
Using the exemption available under IFRS 16, the Group elects not to apply the
requirements above to:
· Short-term leases; and
· Leases for which the underlying asset is of a low value.
In these cases, the Group recognises the lease payments as an expense on a
straight-line basis over the lease term, or another systematic basis if that
basis is more representative of the agreement.
(h) Impairment of assets
Assets that are subject to depreciation or amortisation are reviewed for
impairment whenever events indicate that the carrying value may not be
recoverable. An impairment loss is recognised to the extent that the carrying
value exceeds the higher of the asset's fair value less cost of disposal and
its value-in-use. An asset's value-in-use is calculated by discounting an
estimate of future cash flows by the pre-tax weighted average cost of capital.
(i) Intangible assets
(i) Brands and publishing rights and customer relationships
Separately acquired brands and publishing rights are shown at historical cost.
Brands and publishing rights and customer relationships acquired in a business
combination are recognised at fair value at the acquisition date. They have a
finite useful life and are subsequently carried at cost less accumulated
amortisation and impairment losses.
(ii) Software
Computer software that is not integral to the operation of the related
hardware is carried at cost less accumulated amortisation. Costs associated
with the development of identifiable and unique software products controlled
by the Group that will generate probable future economic benefits in excess of
costs are recognised as intangible assets when the criteria of IAS 38
'Intangible Assets' are met. They are carried at cost less accumulated
amortisation and impairment losses.
(iv) Amortisation methods and periods
Amortisation is calculated to write off the cost or fair value of intangible
assets on a straight-line basis over the expected useful economic lives to the
Group over the following periods:
Computer software - 3 to 5 years
Brands and publishing rights - 5 to 20 years
Customer relationships - 3 to 10 years or over the term of any specified contract
Goodwill has an indefinite life and is tested for impairment annually at a
Group level or whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
(j) Property, plant and equipment
See note 1(g) for right-of-use assets. All other property, plant and equipment
is stated at historical cost less accumulated depreciation and impairment
losses. The historical cost of property, plant and equipment is the purchase
cost together with any incidental direct costs of acquisition. Depreciation is
calculated to write off the cost, less estimated residual value, of assets, on
a straight-line basis over the expected useful economic lives to the Group
over the following periods:
Fixtures and fittings - 5 to 10 years
Computer equipment - 3 to 5 years
Right-of-use assets - over the lease term
The estimated useful lives, residual values and depreciation methods are
reviewed at the end of each reporting year, with the effect of any changes in
estimate accounted for on a prospective basis.
(k) Employee benefits
(i) Share-based payments
The Group operates several equity-settled share-based payment plans, under
which the Group receives services from employees in consideration for equity
instruments (share options and shares) of the Company. Information relating to
these plans is set out in note 23.
Equity-settled share-based payments are measured at fair value at the date of
grant. Fair value is measured using either a Monte Carlo simulation
(stochastic) model or Black-Scholes option pricing model. The fair value of
the employee services received in exchange for the grant of share awards and
options is recognised as an expense on a straight-line basis over the vesting
period, based on the Group's estimate of the number of options or shares that
will eventually vest. Non-market-based performance or service vesting
conditions (for example profitability and remaining as an employee of the
entity over a specified time period) are included in assumptions about the
number of share awards and options that are expected to vest. Market-based
performance criteria is reflected in the measurement of fair value at the date
of grant.
The impact of the revision to original estimates, if any, is recognised in the
consolidated statement of comprehensive income, with a corresponding
adjustment to equity, such that the cumulative expense reflects the revised
estimate. The cumulative share-based payment expense held in reserves is
recycled into retained earnings when the share awards or options lapse or are
exercised. When options are exercised, shares are either transferred to the
employee from the Employee Benefit Trust or by issuing new shares. The social
security contributions payable in connection with the grant of share awards is
treated as a cash-settled transaction.
The award by the Company of share-based payment awards over its equity
instruments to the employees of subsidiary undertakings in the Group is
treated as a capital contribution only if it is left unsettled. The fair value
of employee services received, measured by reference to the grant date fair
value, is recognised over the vesting period as an increase to investment in
subsidiary undertakings, with a corresponding credit to equity.
A deferred tax asset is recognised on share options based on the intrinsic
value of the options, which is calculated as the difference between the fair
value of the shares under option at the reporting date and exercise price of
the share options. The deferred tax asset is utilised when the share options
are exercised or released when share options lapse. The accounting policy
regarding deferred tax is set out above in note 1(f).
(l) Equity
(i) Share capital
Ordinary and deferred shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Company's equity instruments, for
example as the result of a share buyback or share-based payment plan, the
consideration paid, including any directly attributable incremental costs (net
of income taxes) is deducted from equity attributable to the owners of the
Company as treasury shares until the shares are cancelled or reissued. Where
such ordinary shares are subsequently reissued, any consideration received,
net of any directly attributable incremental transaction costs and the related
income tax effects, is included in equity attributable to the owners of the
Company.
Shares held by the Employee Benefit Trust are disclosed as own shares and
deducted from equity.
(ii) Own shares
Own shares consist of treasury shares and shares held within the Employee
Benefit Trust.
Own shares are recognised at cost as a deduction from equity shareholders'
funds. Subsequent consideration received for the sale of such shares is also
recognised in equity, with any excess of consideration received between the
sale proceeds and the original cost being recognised in share premium. No gain
or loss is recognised in the financial information on transactions in treasury
shares.
(m) Financial instruments
The Group has applied IFRS 9 'Financial Instruments' as outlined below:
(i) Financial assets
The Group classifies and measures its financial assets in line with one of the
three measurement models under IFRS 9: at amortised cost, fair value through
profit or loss, and fair value through other comprehensive income. Management
determines the classification of its financial assets based on the
requirements of IFRS 9 at initial recognition.
(ii) Trade receivables
Trade receivables are accounted for under IFRS 9, being recognised initially
at fair value and subsequently at amortised cost less any allowance for
expected lifetime credit losses under the 'expected credit loss' model. As
mandated by IFRS 9, the expected lifetime credit losses are calculated using
the 'simplified' approach.
A provision matrix is used to calculate the allowance for expected lifetime
credit losses on trade receivables which is based on historical default rates
over the expected life of the trade receivables and is adjusted for
forward-looking estimates. The allowance for expected lifetime credit losses
is established by considering, on a discounted basis, the cash shortfalls it
would incur in various default scenarios for prescribed future periods and
multiplying those shortfalls by the probability of each scenario occurring.
The historical loss rates are adjusted to reflect current and forward-looking
information on macroeconomic factors affecting the ability of the customers to
settle the receivables. The allowance is the sum of these probability weighted
outcomes. The allowance and any changes to it are recognised in the
consolidated statement of comprehensive income within net operating expenses.
When a trade receivable is uncollectible, it is written off against the
allowance account for trade receivables. Subsequent recoveries of amounts
previously written off are credited against net operating expenses in the
consolidated statement of comprehensive income. The Group defines a default as
failure of a debtor to repay an amount due as this is the time at which our
estimate of future cash flows from the debtor is affected.
(iii) Financial liabilities
Debt and trade and other payables are recognised initially at fair value based
on amounts exchanged, net of transaction costs, and subsequently at amortised
cost.
(iv) Receivables from and payables to subsidiaries and the Employee Benefit
Trust
The Company has amounts receivable from and payable to subsidiaries and the
receivable from the Employee Benefit Trust which are recognised at fair value.
Amounts receivable from subsidiaries and the Employee Benefit Trust are
assessed annually for recoverability under the requirements of IFRS 9.
(n) Key accounting assumptions, estimates and judgements
The preparation of financial information under IFRS requires the use of
certain key accounting assumptions and requires management to exercise its
judgement and to make estimates. Those that have the most significant effect
on the amounts recognised in the consolidated financial information or have
the most risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Key sources of estimation uncertainty
(i) Carrying value of goodwill, other intangible assets and Company investment
estimate
In assessing whether goodwill, other intangible assets and the Company's
investment are impaired, the Group uses a discounted cash flow model which
includes forecast cash flows and estimates of future growth. If the results of
operations in future periods are lower than included in the cash flow model,
impairments may be triggered. A sensitivity analysis has been performed on the
value-in-use calculations. Further details of the assumptions and
sensitivities in the discounted cash flow model are included in notes 10 and
13.
Critical accounting judgements
(ii) Adjusting items judgement
The term 'adjusted' is not a defined term under IFRS. Judgement is required to
ensure that the classification and presentation of certain items as adjusting,
including exceptional costs, is appropriate and consistent with the Group's
accounting policy. Further details about the amounts classified as adjusting
are included in notes 1(b) and 4.
Other areas of judgement and accounting estimates
The consolidated financial information includes other areas of judgement and
accounting estimates. While these areas do not meet the definition under IAS 1
of significant accounting estimates or critical accounting judgements, the
recognition and measurement of certain material assets and liabilities are
based on assumptions and/or are subject to longer-term uncertainties. The
other areas of judgement and accounting estimates are:
· Deferred tax (estimation of forecasted future taxable profits) refer to notes
1(f) and 14;
· Lease liabilities (lease term judgement) refer to notes 1(g) and 19;
· Lease liabilities (IBR estimate) refer to notes 1(g) and 19; and
· Share-based payment expense (estimation of fair value) refer to notes 1(k)(i)
and 23.
2 Segmental reporting
The Group is organised around two reportable market-facing segments: Xeim and
The Lawyer. These two segments derive revenue from a combination of premium
content, training and advisory, events, marketing solutions and recruitment
advertising. Overhead costs are allocated to these segments on an appropriate
basis, depending on the nature of the costs, including in proportion to
revenue or headcount. Corporate income and costs have been presented
separately as 'Central'. The Group believes this is the most appropriate
presentation of segmental reporting for the user to understand the core
operations of the Group. There is no inter-segmental revenue. Refer to note 8
for details on the discontinued operations.
Segment assets consist primarily of property, plant and equipment, intangible
assets (including goodwill) and trade receivables. Segment liabilities
primarily comprise trade payables, accruals and deferred income.
Corporate assets and liabilities primarily comprise property, plant and
equipment, intangible assets, current and deferred tax balances, cash and cash
equivalents, short-term deposits and lease liabilities.
Capital expenditure comprises purchases of additions to property, plant and
equipment and intangible assets.
2023 Note Xeim The Lawyer Central Continuing operations Discontinued operations Group
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 28,968 8,361 - 37,329 2,006 39,335
Adjusted operating profit / (loss) 1(b) 7,447 3,022 (2,865) 7,604 42 7,646
Exceptional operating costs 4 (297) - (52) (349) (454) (803)
Amortisation of acquired intangibles 11 (47) - - (47) (31) (78)
Loss on disposal of assets 4 - - - - (56) (56)
Share-based payment expense 23 (369) (117) (609) (1,095) - (1,095)
Operating profit / (loss) 6,734 2,905 (3,526) 6,113 (499) 5,614
Finance income 6 266 - 266
Finance costs 6 (245) - (245)
Profit / (loss) before tax 6,134 (499) 5,635
Taxation 7 (807) 22 (785)
Profit / (loss) for the year 5,327 (477) 4,850
Segment assets 35,345 17,911 - 53,256 70 53,326
Corporate assets - - 10,891 10,891 - 10,891
Consolidated total assets 64,147 70 64,217
Segment liabilities (11,391) (3,780) - (15,171) (196) (15,367)
Corporate liabilities - - (3,782) (3,782) - (3,782)
Consolidated total liabilities (18,953) (196) (19,149)
Other items
Capital expenditure (tangible and intangible assets) 1,870 104 73 2,047 8 2,055
Re-presented(2) Note Xeim The Lawyer Central Continuing operations Discontinued operations Group
2022 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 30,083 8,301 - 38,384 3,209 41,593
Adjusted operating profit / (loss) 1(b) 5,771 2,474 (3,302) 4,943 354 5,297
Amortisation of acquired intangibles 11 (490) - - (490) (31) (521)
Gain on remeasurement of lease 19 118 27 6 151 - 151
Lease termination fee 12,19 (190) (43) (10) (243) - (243)
Share-based payment expense 23 (260) (72) (474) (806) - (806)
Operating profit / (loss) 4,949 2,386 (3,780) 3,555 323 3,878
Finance income 6 85 - 85
Finance costs 6 (158) - (158)
Profit before tax 3,482 323 3,805
Taxation 7 (930) (75) (1,005)
Profit for the year 2,552 248 2,800
Segment assets 33,550 17,391 - 50,941 793 51,734
Corporate assets 15,649 15,649 - 15,649
Consolidated total assets 66,590 793 67,383
Segment liabilities (10,666) (2,778) - (13,444) (473) (13,917)
Corporate liabilities (4,640) (4,640) - (4,640)
Consolidated total liabilities (18,084) (473) (18,557)
Other items
Capital expenditure (tangible and intangible assets) 1,143 147 67 1,357 - 1,357
2 See note 1(a) for description of the prior year re-presentation.
Supplemental information
Revenue by geographical location
The Group's revenue from continuing operations from external customers by
geographical location is detailed below:
Xeim The Lawyer Total Re-presented(2) The Lawyer Re-presented(2)
2023 2023 2023 Xeim 2022 Total
£'000 £'000 £'000 2022 £'000 2022
£'000 £'000
United Kingdom 15,766 7,203 22,969 17,033 6,882 23,915
Europe (excluding United Kingdom) 4,743 503 5,246 5,162 609 5,771
North America 4,210 495 4,705 4,534 628 5,162
Rest of world 4,249 160 4,409 3,354 182 3,536
28,968 8,361 37,329 30,083 8,301 38,384
(2) See note 1(a) for description of the prior year re-presentation.
Substantially all of the Group's net assets are located in the United Kingdom.
The Directors therefore consider that the Group currently operates in a single
geographical segment, being the United Kingdom. Refer to note 13 for the
location of the Group's subsidiaries.
Revenue by type
The Group's revenue from continuing operations by type is as follows:
Xeim The Lawyer Total Re-presented(2) The Lawyer Re-presented(2)
2023 2023 2023 Xeim 2022 Total
£'000 £'000 £'000 2022 £'000 2022
£'000 £'000
Premium Content 9,998 5,156 15,154 9,980 4,748 14,728
Training and Advisory 14,858 - 14,858 14,431 - 14,431
Events 2,096 1,780 3,876 2,548 1,998 4,546
Marketing Solutions 1,912 426 2,338 2,870 565 3,435
Recruitment Advertising 104 999 1,103 254 990 1,244
28,968 8,361 37,329 30,083 8,301 38,384
(2) See note 1(a) for description of the prior year re-presentation.
The accounting policies for each of these revenue streams is disclosed in note
1(d), including the timing of revenue recognition. There are some contracts
for which revenue has not yet been recognised and is being held in deferred
income, see note 20. This deferred income is all current and is expected to be
recognised as revenue in 2024.
3 Net operating expenses
Operating profit / (loss) is stated after charging:
Note Adjusted Adjusting Statutory Re-presented(2) Re-presented(2) Re-presented(2)
Results(1) Items(1) Results Adjusted Adjusting Statutory
2023 2023 2023 Results(1) Items(1) Results
£'000 £'000 £'000 2022 2022 2022
£'000 £'000 £'000
Employee benefits expense 5 17,121 - 17,121 17,413 - 17,413
Capitalised employee benefits 5,11 (435) - (435) (403) - (403)
Exceptional operating costs 4 - 349 349 - - -
Depreciation of property, plant and equipment 4,12 1,133 - 1,133 2,028 243 2,271
Amortisation of intangible assets 4,11 930 47 977 1,136 490 1,626
Gain on remeasurement of lease 4,19 - - - - (151) (151)
Share-based payment expense 4,23 - 1,095 1,095 - 806 806
Net impairment of trade receivables 26 (106) - (106) (29) - (29)
IT expenditure 2,336 - 2,336 2,463 - 2,463
Marketing expenditure 1,489 - 1,489 1,618 - 1,618
Other staff-related costs 275 - 275 412 - 412
Other operating expenses 6,982 - 6,982 8,803 - 8,803
29,725 1,491 31,216 33,441 1,388 34,829
Cost of sales 13,686 - 13,686 14,149 - 14,149
Distribution costs 28 - 28 60 - 60
Administrative expenses 16,011 1,491 17,502 19,232 1,388 20,620
29,725 1,491 31,216 33,441 1,388 34,829
(1) Adjusted results exclude adjusting items, as detailed in note 1(b).
(2) See note 1(a) for description of the prior year re-presentation.
Services provided by the Company and Group's auditor
2023 2022
£'000 £'000
Fees payable for the audit of Company and consolidated financial statements 128 120
Fees payable for the interim financial statement review 12 11
Total fees paid to the Company and Group's auditor 140 131
4 Adjusting items
As discussed in note 1(b), certain items are presented as adjusting. These are
detailed below:
Note 2023 Re-presented(2)
£'000 2022
£'000
Continuing operations
Exceptional operating costs 349 -
Amortisation of acquired intangible assets 11 47 490
Gain on remeasurement of lease 19 - (151)
Lease termination fee 12,19 - 243
Share-based payment expense 23 1,095 806
Adjusting items before tax 1,491 1,388
Tax relating to adjusting items 7 (410) (264)
Total adjusting items after tax for continuing operations 1,081 1,124
Discontinued operations 8
Exceptional operating costs 454 -
Amortisation of acquired intangible assets 11 31 31
Loss on disposal of assets 11 56 -
Tax relating to adjusting items 7 (127) (6)
Total adjusting items after tax for discontinued operations 414 25
Total adjusting items after tax 1,495 1,149
(2) See note 1(a) for description of the prior year re-presentation.
Exceptional operating costs
In the current year, exceptional operating costs in continuing operations of
£349,000 relate to strategic restructuring of the Group as it prepares for
the next phase of growth following MAP23. This includes £317,000 of staff
related restructuring costs and £32,000 of associated professional fees.
Exceptional operating costs in discontinued operations of £454,000 were
incurred during the year due to the closure of the Really B2B and Design Week
brands within Xeim. This includes £393,000 of staff related restructuring
costs and £61,000 relating to professional fees and onerous contracts.
Loss on disposal of assets
In the current year the loss on disposal of assets in discontinued operations
of £56,000 consists of a loss on disposal of computer software of £7,000 and
a loss on disposal of acquired intangibles relating to the Really B2B brand of
£49,000. Refer to note 11 for further details.
Termination of lease
As a result of the termination of the London property lease in the prior year,
a net gain of £151,000 was recognised on remeasurement of the lease liability
and respective proportionate adjustment to the ROU asset. The termination fee
was included in the measurement of the ROU asset at the time of the
remeasurement, therefore the £243,000 was recognised in depreciation in 2022.
Refer to note 19 for further details.
Other adjusting items
Other adjusting items relate to the amortisation of acquired intangible assets
(see note 11) and share-based payment costs (see note 23).
5 Directors and employees
Group Note Re-presented(2) Re-presented(2) Re-presented(2)
2023 2023 2023 2022 2022 2022
Continuing Discontinued Total Continuing Discontinued Total
Group Group Group Group Group Group
£'000 £'000 £'000 £'000 £'000 £'000
Wages and salaries 14,522 1,126 15,648 14,723 1,379 16,102
Social security costs 1,696 129 1,825 1,863 155 2,018
Other pension costs 903 83 986 827 87 914
Employee benefits expense 17,121 1,338 18,459 17,413 1,621 19,034
Capitalised employee benefits 11 (435) - (435) (403) - (403)
Exceptional staff related restructuring costs 4 317 393 710 - - -
Share-based payment expense 23 1,095 - 1,095 806 - 806
18,098 1,731 19,829 17,816 1,621 19,437
(2) See note 1(a) for description of the prior year re-presentation.
Company Note 2023 2022
Company Company
£'000 £'000
Wages and salaries 1,499 1,464
Social security costs 205 221
Other pension costs 47 50
Employee benefits expense 1,751 1,735
Share-based payment expense 23 534 424
2,285 2,159
The average number of employees employed during the year, including Executive
Directors, was:
2023 Re-presented(2) 2023 2022
Group 2022 Company Company
Number Group Number Number
Number
Xeim 167 169 - -
The Lawyer 56 58 - -
Central 10 10 4 4
Discontinued 24 32 - -
257 269 4 4
(2) See note 1(a) for description of the prior year re-presentation.
The Group's employees are employed and paid by Centaur Communications Limited,
a Group company, with the exception of the employees directly employed by
the Company.
Key management compensation
2023 2022
£'000 £'000
Salaries and short-term employment benefits 1,680 1,583
Post-employment benefits 100 78
Share-based payment expense 691 590
2,471 2,251
Key management is defined as the Executive Directors and Executive Committee
members.
1,485,000 shares were exercised by Directors during the year at a share price
of 37.0 pence. (2022: 201,355 shares were exercised by Directors at a share
price of 40.0 pence). Details of Directors' remuneration are included in the
Remuneration Committee Report.
6 Finance income and costs
2023 2022
£'000 £'000
Note
Finance income
Interest income from short-term deposits 17 235 68
Interest income from cash and cash equivalents 31 17
266 85
Finance costs
Commitment fees and amortisation of arrangement fee in respect of revolving (106) (105)
credit facility
Interest on lease 19 (89) (51)
Other finance costs (50) (2)
(245) (158)
Net finance income / (costs) 21 (73)
Interest income from short-term deposits
Interest income from short-term deposits is calculated using the effective
interest method and is recognised in profit or loss. Finance income in
relation to these short-term deposits resulted in cash inflows to the Group of
£189,000 during the year (2022: £46,000).
Fees on revolving credit facility
These finance costs are in relation to the Group's £10m revolving credit
facility, none of which was drawn down at 31 December 2023 (2022: £nil). As
indicated by the consolidated cash flow statement, there were no drawdowns
from this facility during the current and prior year. Finance costs in
relation to this facility resulted in cash outflows by the Company and Group
of £73,000 during the year (2022: £71,000).
Lease interest
A lease liability was recognised for the Group's property lease. £89,000 of
interest on this lease was incurred during the year (2022: £51,000). Refer to
notes 1(g) and 19 for further details.
7 Taxation
Note 2023 2023 2023 Re-presented(2) Re-presented(2) Re-presented(2)
Continuing Discontinued Total 2022 2022 2022
£'000 £'000 £'000 Continuing Discontinued Total
£'000 £'000 £'000
Analysis of charge / (credit) for the year
Current tax 21
Overseas tax 24 - 24 (3) - (3)
Adjustments in respect of prior years 1,346 - 1,346 68 - 68
1,370 - 1,370 65 - 65
Deferred tax 14
Current period 1,193 (22) 1,171 838 75 913
Adjustments in respect of prior years (1,756) - (1,756) 27 - 27
(563) (22) (585) 865 75 940
Taxation charge / (credit) 807 (22) 785 930 75 1,005
(2) See note 1(a) for description of the prior year re-presentation.
The taxation charge / (credit) for the year can be reconciled to the profit /
(loss) before tax in the consolidated statement of comprehensive income as
follows:
2023 2023 2023 Re-presented(2) Re-presented(2) Re-presented(2)
Continuing Discontinued Total 2022 2022 2022
£'000 £'000 £'000 Continuing Discontinued Total
£'000 £'000 £'000
Profit / (loss) before tax 6,134 (499) 5,635 3,482 323 3,805
Tax at the UK rate of corporation tax of 23.5% (2022: 19.0%) 1,441 (117) 1,324 662 61 723
Effects of:
Expenses not deductible for tax purposes 14 3 17 18 - 18
Additional deduction for capital allowances (8) - (8) (86) - (86)
Share-based payments (52) - (52) 2 - 2
Effects of changes in tax rate on deferred tax balances (82) (1) (83) 239 14 253
Use of losses (93) 93 - - - -
Different tax rates of subsidiaries in other jurisdictions (3) - (3) - - -
Adjustments in respect of prior years (410) - (410) 95 - 95
Taxation charge / (credit) 807 (22) 785 930 75 1,005
(2) See note 1(a) for description of the prior year re-presentation.
In the Spring Budget 2021, the UK Government announced that from 1 April 2023
the corporation tax rate would increase to 25% (rather than remaining at 19%,
as previously enacted). This new law was substantively enacted on 24 May 2021.
For the financial year ended 31 December 2023, the current weighted averaged
tax rate was 23.5%. Temporary differences are remeasured using the enacted tax
rates that are expected to apply when the liability is settled or the asset
realised.
During the current year, the Group's tax losses from 31 December 2021 were
carried forward rather than being surrendered by way of group relief against
the 2022 taxable profits. This contrasts with the position that was reflected
in the financial statements for the year ended 31 December 2022. This results
in additional taxable profits of £6,926,000 in 2022 and a corresponding
increase in tax losses brought forward at 1 January 2023. Therefore in the
current period, adjustments in respect of prior year have been made to current
tax (£1,346,000) and deferred tax (£1,872,000) to reflect the recognition of
these tax losses as a deferred tax asset instead of reducing the current tax
charge relating to 2022.
A reconciliation between the reported tax charge / (credit) and the adjusted
tax charge taking account of adjusting items as discussed in note 1(b) and 4
is shown below:
2023 2023 2023 Re-presented(2) Re-presented(2) Re-presented(2)
Continuing Discontinued Total 2022 2022 2022
£'000 £'000 £'000 Continuing Discontinued Total
£'000 £'000 £'000
Reported tax charge / (credit) 807 (22) 785 930 75 1,005
Effects of:
Exceptional operating costs 82 107 189 - - -
Amortisation of acquired intangible assets - 9 9 102 6 108
Loss on disposal of assets - 11 11 - - -
Gain on remeasurement of lease - - - (36) - (36)
Share-based payments 328 - 328 198 - 198
Adjusted tax charge 1,217 105 1,322 1,194 81 1,275
(2) See note 1(a) for description of the prior year re-presentation.
8 Discontinued operations
In December 2023, the Group closed the Really B2B ('Really) and Design Week
('DW') brands within Xeim in line with the Group's strategy to prioritise
higher quality revenue and profit margin growth.
The results of the discontinued operations, which were included in the
consolidated statement of comprehensive income and consolidated cash flow
statement, were as follows:
Really DW Total Really DW Total
2023 2023 2023 2022 2022 2022
Statement of comprehensive income £'000 £'000 £'000 £'000 £'000 £'000
Revenue 1,787 219 2,006 2,850 359 3,209
Expenses (2,181) (268) (2,449) (2,679) (207) (2,886)
Loss on disposal of assets (56) - (56) - - -
(Loss) / profit before tax (450) (49) (499) 171 152 323
Attributable tax credit / (charge) 22 - 22 (39) (36) (75)
Statutory (loss) / profit after tax (428) (49) (477) 132 116 248
Add back adjusting items(1):
Exceptional operating costs 402 52 454 - - -
Amortisation of acquired intangible assets 31 - 31 31 - 31
Loss on disposal of assets 56 - 56 - - -
Tax relating to adjusting items(1) (115) (12) (127) (6) - (6)
Total adjusting items(1) 374 40 414 25 - 25
Adjusted profit / (loss)(1) attributable to discontinued operations after tax (54) (9) (63) 157 116 273
(1) Adjusted results exclude adjusting items, as detailed in note 1(b).
Really DW Total Really DW Total
2023 2023 2023 2022 2022 2022
Cash flows £'000 £'000 £'000 £'000 £'000 £'000
Net operating cash flows 8 - 8 - - -
Investing cash flows (8) - (8) - - -
Financing cash flows - - - - - -
Total cash flows - - - - - -
The operating cash flows of discontinued operations largely follow the trade
activities of these operations. There were no material investing or financing
cash flows in 2022 and 2023.
9 Earnings / (loss) per share
Basic earnings per share ('EPS') is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of shares
in issue during the year. 1,878,628 (2022: 3,112,784) shares held in the
Employee Benefit Trust and 4,550,179 (2022: 4,550,179) shares held in treasury
(see note 22) have been excluded in arriving at the weighted average number of
shares.
For diluted earnings per share the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all deferred shares and dilutive
potential ordinary shares. This comprises share options and awards granted to
Directors and employees under the Group's share-based payment plans where the
exercise price is less than the average market price of the Company's ordinary
shares during the year.
Basic and diluted earnings per share have also been presented on an adjusted
basis, as the Directors believe that these measures are more reflective of the
underlying performance of the Group. These have been calculated as follows:
2023 2023 2023 Re-presented(2) Re-presented(2) Re-presented(2)
Adjusted Results(1) Adjusting Statutory Results 2022 2022 2022
£'000 Items(1) £'000 Adjusted Results(1) Adjusting Statutory Results
£'000 £'000 Items(1) £'000
£'000
Continuing operations (£'000) 6,408 (1,081) 5,327 3,676 (1,124) 2,552
Profit / (loss) for the year from continuing operations
Number of shares (thousands)
Basic weighted average number of shares 143,789 143,789 143,789 143,813 143,813 143,813
Effect of dilutive securities - options 8,591 8,591 8,591 7,638 7,638 7,638
Diluted weighted average number of shares 152,380 152,380 152,380 151,451 151,451 151,451
Earnings / (loss) per share from continuing
operations (pence)
Basic from continuing operations 4.4 (0.7) 3.7 2.6 (0.8) 1.8
Fully diluted from continuing operations 4.2 (0.7) 3.5 2.5 (0.8) 1.7
Discontinued operations (£'000) (63) (414) (477) 273 (25) 248
Profit / (loss) for the year from discontinued operations
Number of shares (thousands)
Basic weighted average number of shares 143,789 143,789 143,789 143,813 143,813 143,813
Effect of dilutive securities - options 8,591 8,591 8,591 7,638 7,638 7,638
Diluted weighted average number of shares 152,380 152,380 152,380 151,451 151,451 151,451
Earnings / (loss) per share from discontinued operations (pence)
Basic from discontinued operations - (0.3) (0.3) 0.1 - 0.1
Fully diluted from discontinued operations - (0.3) (0.3) 0.1 - 0.1
Continuing and discontinued operations (£'000) 6,345 (1,495) 4,850 3,949 (1,149) 2,800
Profit / (loss) for the year attributable to owners of parent
Number of shares (thousands)
Basic weighted average number of shares 143,789 143,789 143,789 143,813 143,813 143,813
Effect of dilutive securities - options 8,591 8,591 8,591 7,638 7,638 7,638
Diluted weighted average number of shares 152,380 152,380 152,380 151,451 151,451 151,451
Earnings / (loss) per share from continuing and discontinued operations
(pence)
Basic earnings per share 4.4 (1.0) 3.4 2.7 (0.8) 1.9
Fully diluted earnings per share 4.2 (1.0) 3.2 2.6 (0.8) 1.8
(1) Adjusted results exclude adjusting items, as detailed in notes 1(b) and 4.
(2) See note 1(a) for description of the prior year re-presentation.
10 Goodwill
Group
£'000
Cost
At 1 January 2022, 31 December 2022 and 31 December 2023 81,109
Accumulated impairment
At 1 January 2022, 31 December 2022 and 31 December 2023 39,947
Net book value
At 1 January 2022, 31 December 2022 and 31 December 2023 41,162
At 31 December 2023 a full impairment assessment has been carried out. No
impairment is required for the carrying value of goodwill. (2022: £nil).
Goodwill by segment
Each brand is deemed to be a cash generating unit ('CGU'), being the lowest
level at which cash flows are separately identifiable. Goodwill is attributed
to individual CGUs and has historically been reviewed at the operating segment
level for the purposes of the annual impairment review as this is the level at
which management monitors goodwill.
Xeim The Lawyer Total
£'000 £'000 £'000
At 1 January 2022, 31 December 2022 and 31 December 2023 25,188 15,974 41,162
Impairment testing of goodwill and acquired intangible assets
At 31 December 2023, goodwill and acquired intangible assets (see note 11)
were tested for impairment in accordance with IAS 36. In assessing whether an
impairment of goodwill and acquired intangible assets is required, the
carrying value of the segment is compared with its recoverable amount.
Recoverable amounts are measured based on value-in-use ('VIU').
The Group estimates the VIU of its CGUs using a discounted cash flow model,
which adjusts the cash flows for risks associated with the assets and
discounts these using a pre-tax rate of 10.8% (2022: 9.9%). The discount rate
used is consistent with the Group's weighted average cost of capital and is
used across all segments, which are all based predominantly in the UK and
considered to have similar risks and rewards.
The key assumptions used in calculating VIU are revenue growth, margin,
adjusted(1) EBITDA growth, discount rate and the terminal growth rate. These
have been derived from a combination of experience and management's
expectations of future growth rates in the business. The Group has used the
four-year plan forecast to 2027 for the first four years of the calculation
and applied a terminal growth rate of 2.5% (2022: 2.5%). This timescale and
the terminal growth rate are both considered appropriate given the nature of
the Group's revenue. The four-year plan forecast to 2027 has been prepared
brand by brand on a bottom-up basis following a review of the business where
management has identified higher quality revenue streams for growth and focus,
which will deliver the targets set out below, and conversely which areas of
the business will be de-prioritised. Overall the four-year plan forecast to
2027 assumes continued profit growth reflecting top line expansion in key
brands, while managing the impact of projected inflationary pressures.
The key assumptions and variables in this plan are sensitised in isolation and
in combination. The main sensitivities applied to the key drivers are outlined
below. As required by IAS 36, these sensitivities are applied in order to
assess the effect of reasonably possible changes in the assumptions.
Sensitivity analysis has been performed on the VIU calculations, holding all
other variables constant, to:
I. apply a 10% reduction to forecast adjusted(1) EBITDA in each year of the
modelled cash flows. No impairment would occur in either of the segments.
II. apply a 2 percentage point increase in discount rate from 10.8% to 12.8%. No
impairment would occur in either of the segments.
III. reduce the terminal value growth rate from 2.5% to 1.5%. No impairment would
occur in either of the segments.
The results of the impairment assessment and sensitivities applied indicate
that no impairment to the goodwill or acquired intangible assets of either CGU
is required for the year ended 31 December 2023.
11 Other intangible assets
Computer software Brands and publishing rights Customer relationships Separately acquired websites and content Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2022 19,631 1,380 11,321 3,216 35,548
Additions - separately acquired 763 - - - 763
Additions - internally generated 403 - - - 403
Disposals (197) - - - (197)
Exchange differences 21 - - - 21
At 31 December 2022 20,621 1,380 11,321 3,216 36,538
Additions - separately acquired 1,541 - - - 1,541
Additions - internally generated 435 - - - 435
Disposals (10,464) (247) (1,904) - (12,615)
At 31 December 2023 12,133 1,133 9,417 3,216 25,899
Accumulated amortisation
At 1 January 2022 17,562 769 10,899 3,216 32,446
Amortisation charge for the year 1,136 99 422 - 1,657
Disposals (197) - - - (197)
Exchange differences 21 - - - 21
At 31 December 2022 18,522 868 11,321 3,216 33,927
Amortisation charge for the year 931 78 - - 1,009
Disposals (10,457) (198) (1,904) - (12,559)
At 31 December 2023 8,996 748 9,417 3,216 22,377
Net book value at 31 December 2023 3,137 385 - - 3,522
Net book value at 31 December 2022 2,099 512 - - 2,611
Net book value at 1 January 2022 2,069 611 422 - 3,102
During the year, the Group performed a detailed review of the fixed asset
register which identified a number of historical fully amortised assets that
are no longer in use by the business, and therefore these assets were disposed
of in continuing operations. The disposed assets had a net book value of £nil
(2022: £nil).
During the year, the Group disposed of intangible assets totalling a net book
value of £56,000, resulting in a loss on disposal of £56,000 in discontinued
operations. This has been recognised in the consolidated statement of
comprehensive income in discontinued operations.
The £56,000 loss on disposal of intangible assets in discontinued operations
resulted from the disposal relating to the Really B2B business. In December
2023, the Group disposed of the Really B2B branding with a net book value of
£49,000 for £nil proceeds, resulting in a loss of £49,000. Customer
relationships recognised on the acquisition of the Really B2B business in 2017
with a net book value of £nil were disposed. Really B2B computer software
assets were disposed at a net book value of £7,000 resulting in a loss of
£7,000. These disposals were effected in line with the closure of the Really
B2B brand within Xeim in line with the Group's strategy to prioritise higher
quality revenue and profit margin growth.
Amortisation of intangible assets is included in net operating expenses in the
consolidated statement of comprehensive income. The amortisation charge in
continuing operations is £977,000 (2022: £1,626,000) and in discontinued
operations is £32,000 (2022: £31,000). Amortisation on acquired intangible
assets from business combinations is presented as an adjusting item in note 4
(see note 1(b) for further information). Total amortisation of £78,000 (2022:
£521,000) on such assets is all amortisation on assets in the asset groups
'Brands and publishing rights' and 'Customer relationships'. These total
amounts relate to continuing operations £47,000 (2022: £490,000) and
discontinued operations £31,000 (2022: £31,000) as shown in note 4.
Other intangible assets are tested annually for impairment in accordance with
IAS 36 at a segment level by comparing the carrying value with its recoverable
amount (see note 10 for further details). No impairment was recognised in the
current year or prior year.
The Company has no intangible assets (2022: £nil).
12 Property, plant and equipment
Fixtures Computer ROU assets - property
and fittings equipment £'000 Total
£'000 £'000 £'000
Cost
At 1 January 2022 73 1,098 6,057 7,228
Additions - separately acquired 21 273 - 294
Remeasurement - - (120) (120)
Disposals - (21) (5,937) (5,958)
Exchange differences - 2 - 2
At 31 December 2022 94 1,352 - 1,446
Additions - separately acquired 40 71 2,861 2,972
Disposals (64) (504) - (568)
At 31 December 2023 70 919 2,861 3,850
Accumulated depreciation
At 1 January 2022 61 840 3,843 4,744
Depreciation charge for the year 7 170 2,094 2,271
Disposals - (21) (5,937) (5,958)
Exchange differences - 2 - 2
At 31 December 2022 68 991 - 1,059
Depreciation charge for the year 9 170 954 1,133
Disposals (64) (504) - (568)
At 31 December 2023 13 657 954 1,624
Net book value at 31 December 2023 57 262 1,907 2,226
Net book value at 31 December 2022 26 361 - 387
Net book value at 1 January 2022 12 258 2,214 2,484
In the current year, the Group disposed of computer equipment and fixtures and
fittings that are no longer in use by the business. The disposed assets had a
net book value of £nil (2022: £nil).
Depreciation of property, plant and equipment is included in net operating
expenses in the consolidated statement of comprehensive income. The current
year depreciation charge is £1,133,000 (2022: £2,271,000).
In the prior year, depreciation of the ROU asset included £243,000
termination fee which was included in the cost of the ROU asset in the
remeasurement on the agreement of the lease termination (see note 19). This
£243,000 was presented as an adjusting item in note 4 and the remaining
depreciation charge of £2,028,000 was in Adjusted Results.
The Company has no property, plant and equipment at 31 December 2023 (2022:
£nil).
13 Investments
Investments
in subsidiary
undertakings
Company £'000
Cost
At 1 January 2022 151,548
Additions 374
At 31 December 2022 151,922
Additions 552
At 31 December 2023 152,474
Accumulated impairment
At 1 January 2022, 31 December 2022 and 31 December 2023 86,393
Net book value at 31 December 2023 66,081
Net book value at 31 December 2022 65,529
Net book value at 1 January 2022 65,155
Impairment testing of the investment
The carrying value of the investment represents the Company's direct ownership
of Centaur Communications Limited ('CCL'). At 31 December 2023, the investment
was tested for impairment in accordance with IAS 36. In assessing whether an
impairment of the investment is required, the carrying value of the investment
is compared with its recoverable amount. The recoverable amount is measured
based on value-in-use ('VIU'). Although the Company only has direct ownership
of CCL, CCL in turn directly or indirectly controls the rest of the Group's
subsidiaries. Therefore, the VIU of the Company's investment in CCL is
supported by the operations of the entire Group.
In the prior year, the UK's economic uncertainty throughout 2022 was
identified as an indication of impairment of the Company's investment carrying
value. Therefore, a full impairment assessment was performed. The results of
the impairment assessment and sensitivities applied indicated that no
impairment to the Company's investment in CCL was required for the year ended
31 December 2022 as the carrying value of the investment was supported by the
underlying trade of the Group.
In the current year, the UK's ongoing economic uncertainty throughout 2023 has
been identified as an indication of impairment of the Company's investment
carrying value. Therefore, a full impairment assessment has been performed.
The Group estimates the VIU using a discounted cash flow model, which adjusts
the cash flows for risks associated with the assets and discounts these using
a pre-tax rate of 10.8% (2022: 9.9%). The discount rate used is consistent
with the Group's weighted average cost of capital.
The key assumptions used in calculating VIU are revenue growth, margin,
adjusted(1) EBITDA growth, discount rate and the terminal growth rate. These
have been derived from a combination of experience and management's
expectations of future growth rates in the business. The Group has used the
four-year plan forecast to 2027 for the first four years of the calculation
and applied a terminal growth rate of 2.5% (2022: 2.5%). This timescale and
the terminal growth rate are both considered appropriate given the nature of
the Group's revenue. The four-year plan forecast to 2027 has been prepared
brand by brand on a bottom-up basis following a review of the business where
management has identified higher quality revenue streams for growth and focus,
which will deliver the targets set out below, and conversely which areas of
the business will be de-prioritised. Overall the four-year plan forecast to
2027 assumes continued profit growth reflecting top line expansion in key
brands, while managing the impact of projected inflationary pressures.
Sensitivities are applied to each of the key assumptions and variables in
isolation and in combination, in line with those sensitivities applied for
goodwill impairment testing as outlined in note 10. As required by IAS 36,
these sensitivities are applied in order to assess the effect of reasonably
possible changes in the assumptions.
The results of the impairment assessment and sensitivities applied indicate
that no impairment to the Company's investment in CCL is required for the year
ended 31 December 2023.
Additions of £552,000 (2022: £374,000) related to capital contributions for
share-based payments recharged to the Company's subsidiaries.
In order to simplify the Group structure, the process to close dormant
companies commenced during 2021.
The Group dissolved the following subsidiaries during the current year:
Name Proportion of ordinary shares and voting rights held (%) Principal activities Country of incorporation Date of closure
Chiron Communications Limited 100 Dormant United Kingdom 11 January 2023
Taxbriefs Holdings Limited 100 Dormant United Kingdom 4 April 2023
At 31 December 2023, the Group has control over the following subsidiaries:
Name Proportion of ordinary shares and voting rights held (%) Principal activities Country of incorporation
Centaur Communications Limited (1) 100 Holding company and agency services United Kingdom
Centaur Media USA Inc.(2) 100 Digital information services United States
E-consultancy LLC (2) 100 Holding company United States
E-consultancy.com Limited 100 Digital information services United Kingdom
Market Makers Incorporated Limited(3) 100 In liquidation United Kingdom
TheLawyer.com Limited 100 Digital information services United Kingdom
Xeim Limited 100 Digital information services United Kingdom
(1) Directly owned by Centaur Media Plc.
(2) Registered address is 244 Fifth Avenue, Suite 1297, New York, NY
10001, USA. Functional currency is USD.
(3) Market Makers Incorporated Limited was liquidated on 14 January
2024.
The registered address of all subsidiary companies, except for those
identified above, is 10 York Road, London, SE1 7ND, United Kingdom. The
functional currency of all subsidiaries is GBP except for those identified
above. The consolidated financial information incorporates the financial
information of all entities controlled by the Company at 31 December 2023.
14 Deferred tax
The movement on the deferred tax account for the Group is shown below:
Accelerated Other Tax Total
capital temporary losses £'000
allowances differences £'000
£'000 £'000
Net asset at 1 January 2022 710 159 1,491 2,360
Adjustments in respect of prior periods 13 23 (63) (27)
Recognised in the consolidated statement of comprehensive income (443) 268 (738) (913)
Recognised in the consolidated statement of changes in equity - 233 - 233
Net asset at 31 December 2022 280 683 690 1,653
Adjustments in respect of prior periods (115) (1) 1,872 1,756
Recognised in the consolidated statement of comprehensive income (396) 173 (948) (1,171)
Recognised in the consolidated statement of changes in equity - (292) - (292)
Net asset at 31 December 2023 (231) 563 1,614 1,946
Deferred tax assets and liabilities are only offset where there is a legally
enforceable right of offset and there is an intention to settle the balances
net.
2023 2022
£'000 £'000
Deferred tax assets 2,177 1,673
Deferred tax liabilities (231) (20)
1,946 1,653
At the year end, the Group has unused tax losses of £6,454,000 (2022:
£2,935,000) available for offset against future profits. A deferred tax asset
of £1,614,000 (2022: £690,000) has been recognised in respect of £6,454,000
(2022: £2,935,000) of such tax losses.
In line with the Group's strategy to focus on profit margin growth, the Group
has been profitable since 2021 and continuation of this profitable position is
reflected in the Group's four-year plan forecast to 2027. The Group has
concluded that the deferred tax asset will be recoverable using the estimated
future taxable profit based on the four-year plan forecast to 2027. This
forecast was used in the impairment assessments performed for goodwill and
investments. Refer to notes 10 and 13 for further details. The Group generated
taxable profits in 2023 and is expected to generate taxable profits from 2024
onwards. The losses can be carried forward indefinitely and have no expiry
date as long as the companies that have the losses continue to trade.
The Company has deferred tax assets on share options under long-term incentive
plans and unused tax losses totalling £1,082,000 at 31 December 2023 (2022:
£375,000).
Deferred tax assets and liabilities are expected to be materially utilised
after 12 months.
15 Trade and other receivables
Note 2023 2022 2023 2022
Group Group Company Company
£'000 £'000 £'000 £'000
Amounts falling due within one year
Trade receivables 26 3,744 4,348 - -
Less: expected credit loss 26 (188) (537) - -
Trade receivables - net 3,556 3,811 - -
Other receivables 126 430 23 34
Prepayments 1,107 916 113 102
Accrued income 300 200 - -
5,089 5,357 136 136
2023 2022 2023 2022
Group Group Company Company
£'000 £'000 £'000 £'000
Amounts falling due after one year
Other receivables 166 27 4 27
Receivable from Employee Benefit Trust - - 875 1,198
166 27 879 1,225
The receivable from Employee Benefit Trust is unsecured, has no fixed due date
and does not bear interest.
Other receivables falling due after one year include £162,000 (2022:
£278,000 amount falling due within one year) in relation to a deposit on the
London property lease which is fully refundable at the end of the lease term.
The previous London property lease ended on 31 December 2022 and the Group was
fully refunded for this deposit in 2023. The Group signed a new lease
agreement commencing 1 January 2023. Refer to note 19 for further detail.
16 Cash and cash equivalents
2023 2022
Group Group
£'000 £'000
Cash at bank and in hand 1,996 7,501
The Company had no cash and cash equivalents at 31 December 2023 (2022:
£nil).
17 Short-term deposits
2023 2022
Group Group
£'000 £'000
Short-term deposits 7,500 8,500
The fixed term for these deposits is four months (2022: between four and five
months). Interest for these short-term deposits is paid on maturity. Refer to
note 6 for further detail.
18 Trade and other payables
2023 2022 2023 2022
Group Group Company Company
£'000 £'000 £'000 £'000
Trade payables 1,198 727 - -
Payables to subsidiaries - - 49,056 34,744
Accruals 5,713 7,590 988 1,002
Social security and other taxes 1,003 577 - -
Other payables 675 758 3 23
8,589 9,652 50,047 35,769
Payables to subsidiaries are unsecured, have no fixed date of repayment and
bear interest at an annual rate of 7.44% (2022: 5.68%).
The Directors consider that the carrying amount of the trade payables
approximates their fair value.
19 Lease liabilities
The lease liability reflected below relates to a property lease, for which a
corresponding right-of-use ('ROU') asset is held on the consolidated statement
of financial position within property, plant and equipment and detailed in
note 12.
2023 2022
Group Group
£'000 £'000
At 1 January - 2,384
Addition of lease liability 2,861 -
Remeasurement of lease liability - (271)
Interest expense 89 51
Cash outflow - lease payments (973) (1,921)
Cash outflow - termination fee - (243)
At 31 December 1,977 -
Current 952 -
Non-current 1,025 -
At 31 December 1,977 -
A new lease agreement was entered into with a commencement date of 1 January
2023, and therefore a lease liability and corresponding ROU asset has been
recognised on 1 January 2023. This lease has a term of three years until 31
December 2025, with lease payments/cash outflows of £973,000 for the first
year of the lease term, increasing by 3.5% annually thereafter.
The Group had one lease agreement in place during the prior year. In June 2022
an option to extend the lease was exercised, resulting in an increase to the
lease liability and a corresponding increase to the ROU asset. Subsequently,
in October 2022, an agreement to terminate the lease was signed, bringing the
end date forward to 31 December 2022. This changed the lease term judgement
previously made, and the lease liability was therefore remeasured. These two
remeasurements resulted in the net decrease in lease liability of £271,000.
The remeasurement upon agreement to terminate resulted in a proportionate
adjustment to the ROU asset and lease liability based on the carrying values
at the effective date, resulting in a gain on remeasurement of £151,000. In
exiting the lease, the Group incurred a £243,000 termination fee. These were
both recognised as adjusting items in the consolidated statement of
comprehensive income. Refer to note 1(b) and 4 for further details.
20 Deferred income
2023 2022
Group Group
£'000 £'000
Deferred income 8,352 8,885
Deferred income arises on contracts with customers where revenue recognition
criteria has not yet been met. See note 1(d) for further details. During the
year ended 31 December 2023, £8,824,000 (2022: £7,831,000) of the deferred
income balance of £8,885,000 at 31 December 2022 (£7,846,000 at 31 December
2021) was recognised as revenue in the consolidated statement of comprehensive
income.
21 Current tax assets
2023 2022
Group Group
£'000 £'000
Corporation tax receivables 379 165
The Company had no corporation tax receivables or payables at 31 December 2023
(2022: £nil).
22 Equity
Ordinary shares of 10 pence each Nominal value Number of shares
£'000
Authorised share capital - Group and Company
At 1 January 2022, 31 December 2022 and 31 December 2023 20,000 200,000,000
Issued and fully paid share capital - Group and Company
At 1 January 2022, 31 December 2022 and 31 December 2023 15,141 151,410,226
Deferred shares reserve
The deferred shares reserve represents 800,000 (2022: 800,000) deferred shares
of 10 pence each, which carry restricted voting rights and have no right to
receive a dividend payment in respect of any financial year.
Reserve for shares to be issued
The reserve for shares to be issued is in respect of equity-settled
share-based payment plans. The movements in the reserve for shares to be
issued represent the total charges for the year relating to equity-settled
share-based payment transactions with employees as accounted for under IFRS 2
less transfers from this reserve to retained earnings for shares exercised or
lapsed during the year.
Own shares reserve
The own shares reserve represents the value of shares held as treasury shares
and in the Employee Benefit Trust. At 31 December 2023, 4,550,179 (2022:
4,550,179) 10 pence ordinary shares were held in treasury and 1,878,628 (2022:
3,112,784) 10 pence ordinary shares were held in the Employee Benefit Trust.
The Employee Benefit Trust issued 1,887,510 (2022: 201,355) shares to meet
obligations arising from share-based rewards to employees that had vested and
were exercised in the current year (2022: vested and exercised in 2022). The
shares were issued at a historical weighted average cost of 67.6 pence (2022:
105.3 pence) per share. The total cost of £1,276,000 (2022: £212,000) has
been recognised as a reduction in the own shares reserve in other reserves in
equity.
During 2023, the Employee Benefit Trust purchased 653,354 (2022: 1,249,954)
ordinary shares in order to meet future obligations arising from share-based
rewards to employees. The shares were acquired at an average price of 49.4
pence per share. The total cost of £322,000 (2022: £604,000) has been
recognised in the own shares reserve in equity.
23 Share-based payments
The Group's share-based payment expense for the year:
2023 2022
£'000 £'000
Share-based payment expense 1,095 806
The share-based payment expense is presented as an adjusting item in note 4
(see note 1(b) for further information) and is included in net operating
expenses in the consolidated statement of comprehensive income.
The Group's share-based payment plans are equity-settled upon vesting.
The share-based payment expense includes social security contributions which
are settled in cash upon exercise. £146,000 (2022: £75,000) was charged to
the consolidated statement of comprehensive income in relation to employers NI
on share-based payment plans and included in accruals on the consolidated
statement of financial position.
Long-Term Incentive Plan
The Group operates a Long-Term Incentive Plan ('LTIP') for Executive Directors
and selected senior management. This is an existing incentive policy and was
approved by shareholders at the 2016 AGM. Full details on how the plan
operates are included in the Remuneration Report.
During the year LTIP awards were granted to Executive Directors and selected
senior management. Details of the performance conditions of these awards are
disclosed in the Remuneration Report.
A reconciliation of the movements in LTIP awards is shown below.
2023 2022
Number of awards
At 1 January 7,334,737 7,664,075
Granted 2,579,381 2,870,942
Exercised (1,887,510) (201,355)
Forfeited (434,081) (166,057)
Lapsed - (2,832,868)
At 31 December 7,592,527 7,334,737
Exercisable at 31 December - -
Weighted average share price at date of exercise (pence) 37.44 40.00
The awards granted during the year were priced using the following models and
inputs:
Grant date 12.04.2023
Share price at grant date (pence) 49.00
Weighted average fair value of options (pence) 47.31
Vesting date 12.04.2026
Exercise price (pence) -
Expected volatility (%) 28.14
Expected dividend yield (%) -
Risk free interest rate (%) 3.75
Valuation model used Stochastic
Options exercised during the year related to the 2020 LTIP awards that vested
during the year (2022: 2019 LTIP awards).
Options forfeited during the year were due to the participants leaving before
the vesting date of the options. No options lapsed during the year. Options
that lapsed in the prior year did not meet the performance conditions and
related to a portion of the 2019 LTIP awards. No options expired during the
year (2022: nil).
The share awards outstanding at 31 December 2023 had a weighted average
exercise price of £nil (2022: £nil) and a weighted remaining life of 1.2
years (2022: 1.4 years).
Deferred Share Bonus Plan
The Deferred Share Bonus Plan ('DSBP') was approved by the Board in May 2022
and applies to Executive Directors. Under the plan, the portion of their
annual bonus greater than 75% of basic salary is deferred in accordance with
the Group's remuneration policy into awards in Centaur Media Plc shares.
Awards under the DSBP are not subject to further performance conditions and
vest after three years, subject to continued employment. Dividend equivalents
may be awarded in respect of the DSBP awards on vesting. Further details on
how the plan operates is included in the Remuneration Report.
A reconciliation of the movements in DSBP awards is shown below.
2023 2022
Number of awards
At 1 January 60,593 -
Granted - 60,593
At 31 December 60,593 60,593
Exercisable at 31 December - -
Weighted average share price at date of exercise (pence) - -
No options were granted during the year. In May 2022, 60,593 shares were
awarded to Executive Directors under the DSBP, representing the portion of the
2021 bonus to Executive Directors greater than 75% of their basic salary.
No options were exercised, forfeited or expired during the current and prior
year.
The share awards outstanding at 31 December 2023 had a weighted average
exercise price of £nil (2022: £nil) and a weighted remaining life of 1.2
years (2022: 2.2 years).
Senior Executive Long-Term Incentive Plan
The Centaur Media Plc 2010 Senior Executive Long-Term Incentive Plan (the
'SELTIP') was introduced during 2011 and was approved by shareholders at the
2010 AGM. This is not an HMRC approved plan and vests over a three-year period
with service and performance conditions. Awards were granted under this plan
in 2011 for no consideration and no exercise price. This plan closed to new
awards in the prior year.
2023 2022
Number of awards
At 1 January - 6,862
Expired - (6,862)
At 31 December - -
Exercisable at 31 December - -
Weighted average share price at date of exercise (pence) - -
No options were granted, exercised, forfeited or lapsed during the current and
prior year.
All options expired during the prior year.
Share Incentive Plan
The Centaur Media Plc Share Incentive Plan (the 'SIP') is an HMRC approved
Tax-Advantaged plan, which provides employees with the opportunity to purchase
shares in the Company. This plan is open to all employees who have been
employed by the Group for more than three months. Employees may invest up to
£1,800 per annum (or 10% of their salary if less) in ordinary shares in the
Company, which are held in trust. The shares are purchased in open market and
are held in trust for each employee. The shares can be withdrawn with tax paid
at any time, or tax-free after five years. The Group matches the contribution
with a ratio of one share for every two purchased. Other than continuing
employment, there are no other performance conditions attached to the plan.
The Executive Directors are eligible to participate in the Share Incentive
Plan, as are all employees of the Group.
2023 2022
Number of matching shares
Outstanding at 1 January 75,908 57,495
Awarded 19,752 18,413
Forfeited (4,941) -
Sold (436) -
Outstanding at 31 December 90,283 75,908
24 Dividends
2023 2022
£'000 £'000
Equity dividends
Final dividend for 2021: 0.5 pence per 10 pence ordinary share - 718
Interim dividend for 2022: 0.5 pence per 10 pence ordinary share - 718
Special dividend for 2022: 3.0 pence per 10 pence ordinary share 4,312 -
Special dividend for 2022: 2.0 pence per 10 pence ordinary share 2,875 -
Final dividend for 2022: 0.6 pence per 10 pence ordinary share 859 -
Interim dividend for 2023: 0.6 pence per 10 pence ordinary share 870 -
8,916 1,436
An interim dividend for the six months ended 30 June 2023 of £870,000 (0.6
pence per ordinary share) was paid on 20 October 2023 to all ordinary
shareholders on the register as at close of business on 6 October 2023.
A final dividend for the year ended 31 December 2023 of £1,740,000 (1.2 pence
per ordinary share) is proposed by the Directors and, subject to shareholder
approval at the Annual General Meeting, will be paid on 24 May 2024 to all
ordinary shareholders on the register at the close of business on 10 May 2024.
The interim, special and final dividends together resulted in a total dividend
pertaining to 2022 of £8,764,000.
25 Notes to the cash flow statement
Reconciliation of profit / (loss) for the year to cash generated from
operating activities:
'000 '000 '000 '000
Note 2023 2022 2023 2022
Group Group Company Company
£'000 £'000 £'000 £'000
Profit / (loss) for the year 4,850 2,800 (4,521) (4,619)
Adjustments for:
Taxation charge / (credit) 7 785 1,005 (1,871) (1,106)
Finance income 6 (266) (85) - -
Finance costs 6 245 158 3,538 2,001
Depreciation of property, plant and equipment 12 1,133 2,271 - -
Amortisation of intangible assets 11 1,009 1,657 - -
Loss on disposal of assets 11 56 - - -
Gain on remeasurement of lease 19 - (151) - -
Share-based payment expense 23 1,095 806 534 424
Unrealised foreign exchange differences 29 (145) - -
Changes in working capital:
Decrease / (increase) in trade and other receivables 25 1,002 311 (17)
(Decrease) / increase in trade and other payables (1,125) (1,955) 11,094 4,824
(Decrease) / increase in deferred income (533) 1,039 - -
Cash generated from operating activities 7,303 8,402 9,085 1,507
Reconciliation of movements of liabilities and associated assets to cash flows
arising from financing activities:
Note Group and Company Group
Net borrowings Lease
£'000 liability
£'000
At 1 January 2022 72 (2,384)
Changes from financing cash flows:
Finance costs paid 6 71 -
Repayment of obligations under finance leases 19 - 1,921
Termination of lease 19 - 243
71 2,164
Other changes:
Finance costs 6 (105) (51)
Remeasurement of lease liability 19 - 271
Extension fee on revolving credit facility 26 20 -
(85) 220
Balance at 31 December 2022 58 -
Changes from financing cash flows:
Finance costs paid 6 73 -
Extension fee on revolving credit facility 26 20
Repayment of obligations under finance leases 19 - 973
93 973
Other changes:
Finance costs 6 (106) (89)
Addition of lease liability 19 - (2,861)
Extension fee on revolving credit facility 26 (20) -
(126) (2,950)
Balance at 31 December 2023 25 (1,977)
Net borrowings is comprised of a loan arrangement fee debtor of £28,000
(2022: £61,000) presented within other receivables and a commitment fee
creditor of £3,000 presented within other payables (2022: £3,000). The
movements of this asset and liability together give rise to cash flows from
financing activities relating to the £10m revolving credit facility.
26 Financial instruments and financial risk management
Financial risk management
The Board has overall responsibility for the determination of the Group's risk
management policies. The Board receives monthly reports from the Chief
Financial Officer through which it reviews the effectiveness of policies and
processes put in place to manage risk. The Board sets policies that reduce
risk as far as possible without unduly affecting the operating effectiveness
of the Group.
The Group's activities expose it to a variety of financial risks, including
interest rate risk, credit risk, liquidity risk, capital risk and currency
risk. Of these, credit risk and liquidity risk are considered the most
significant. This note presents information about the Group's exposure to each
of the above risks.
Categories of financial instruments
Details of the material accounting policies and methods adopted, including the
criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised in respect of each class of financial
asset, financial liability and equity instrument are disclosed in note 1(m).
All financial assets and liabilities are measured at amortised cost.
Note 2023 2022
£'000 £'000
Financial assets
Cash and cash equivalents 16 1,996 7,501
Short-term deposits 17 7,500 8,500
Trade receivables - net 15 3,556 3,811
Other receivables 15 292 457
13,344 20,269
Financial liabilities
Lease liability 19 1,977 -
Trade payables 18 1,198 727
Accruals 18 5,713 7,590
Other payables 18 675 758
9,563 9,075
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The carrying
amount of financial assets recorded in the financial information, which is net
of impairment losses, represents the Group's maximum exposure to credit risk
in relation to financial assets. Credit risk is managed on a Group basis. The
Group does not consider that it is subject to any significant concentrations
of credit risk.
Trade receivables
Trade receivables consist of a large number of customers, of varying sizes and
spread across diverse industries and geographies. The Group does not have
significant exposure to credit risk in relation to any single counterparty or
group of counterparties having similar characteristics. The Group's exposure
to credit risk is influenced predominantly by the circumstances of individual
customers as opposed to industry or geographic trends.
The business assesses the credit quality of customers based on their financial
position, past experience and other qualitative and quantitative factors. The
Group's policy requires customers to pay in accordance with agreed payment
terms, which are generally 30 days from the date of invoice. Under normal
trading conditions, the Group is exposed to relatively low levels of risk and
potential losses are mitigated as a result of a diversified customer base and
the requirement for events and certain premium content subscription invoices
to be paid in advance of service delivery.
The credit control function within the Group's finance department monitors the
outstanding debts of the Group and trade receivable balances are analysed by
the age and value of outstanding balances.
Any trade receivable balance which is objectively determined to be
uncollectible is written off the ledger, with a charge taken through the
consolidated statement of comprehensive income. The Group also records an
allowance for the lifetime expected credit loss on its trade receivables
balances under the simplified approach as mandated by IFRS 9. The impairment
model for trade receivables, under IFRS 9, requires the recognition of
impairment provisions based on expected lifetime credit losses rather than
only incurred ones. All balances are reviewed with those greater than 90 days
past due considered to carry a higher level of credit risk. Refer to note
1(m)(ii) for further details on the approach to allowance for expected credit
losses on trade receivables.
The allowance for expected lifetime credit losses, and changes to it, are
taken through administrative expenses in the consolidated statement of
comprehensive income.
The ageing of trade receivables according to their original due date is
detailed below:
2023 2023 2022 2022
Gross Provision Gross Provision
£'000 £'000 £'000 £'000
Not due 2,656 (4) 2,971 (45)
0-30 days past due 390 (2) 488 (15)
31-60 days past due 138 (2) 141 (9)
61-90 days past due 82 (2) 74 (9)
Over 90 days past due 478 (178) 674 (459)
3,744 (188) 4,348 (537)
In making the assessment that unprovided trade receivables are not impaired,
the Directors have considered the quantum of gross trade receivables which
relate to amounts not yet included in income, including amounts in deferred
income and amounts relating to VAT. The credit quality of trade receivables
not impaired has been assessed as acceptable.
The movement in the allowance for expected credit losses on trade receivables
is detailed below:
Re-presented(2) Re-presented(2) Re-presented(2)
2023 2023 2023 2022 2022 2022
Continuing Discontinued Total Continuing Discontinued Total
Group Group Group Group Group Group
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 405 132 537 427 137 564
Utilised (167) (66) (233) (15) (3) (18)
Release (106) (5) (111) (29) (2) (31)
Exchange differences (5) - (5) 22 - 22
Balance at 31 December 127 61 188 405 132 537
The Group's policy requires customers to pay in accordance with agreed payment
terms which are generally 30 days from the date of invoice or in the case of
live events related revenue no less than 30 days before the event. All credit
and recovery risk associated with trade receivables has been provided for in
the consolidated statement of financial position. The Group's policy for
recognising an impairment loss is given in note 1(m)(ii). Impairment losses
are taken through administrative expenses in the consolidated statement of
comprehensive income.
The Directors consider the carrying value of trade and other receivables
approximates to their fair value.
Cash and cash equivalents and short-term deposits
Banks and financial institutions are independently rated by credit rating
agencies. We choose only to deal with those with a minimum 'A' rating. We
determine the credit quality for cash and cash equivalents and short-term
deposits to be strong.
Other receivables
Other receivables are neither past due nor impaired. These are primarily made
up of sundry receivables, including employee-related debtors and receivables
in respect of distribution arrangements.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group manages liquidity risk by
maintaining adequate reserves and working capital credit facilities, and by
continuously monitoring forecast and actual cash flows. Since March 2021, the
Group has had a multi-currency revolving credit facility with NatWest. The
facility consists of a committed £10m facility and an additional uncommitted
£15m accordion option, both of which can be used to cover the Group's working
capital and general corporate needs. In February 2024, the Group took the
option to extend the facility for one year and the facility now runs to 31
March 2026. As at 31 December 2023, the Group had cash of £1,996,000 (2022:
£7,501,000) and short-term deposits of £7,500,000 (2022: £8,500,000) with a
full undrawn loan facility of £25,000,000 (2022: full undrawn loan facility
of £25,000,000).
The following tables detail the financial maturity for the Group's financial
liabilities:
Book value Fair value Less than 2-5 years
£'000 £'000 1 year £'000
£'000
At 31 December 2023
Financial liabilities
Interest bearing 1,977 1,977 952 1,025
Non-interest bearing 7,586 7,586 7,586 -
9,563 9,563 8,538 1,025
At 31 December 2022
Financial liabilities
Non-interest bearing 9,075 9,075 9,075 -
9,075 9,075 9,075 -
The Directors consider that book value is materially equal to fair value.
The book value of primary financial instruments approximates to fair value
where the instrument is on a short maturity or where they bear interest at
rates that approximate to the market.
The following table details the level of fair value hierarchy for the Group's
financial assets and liabilities:
Financial Assets Financial Liabilities
Level 1 Level 3
Cash and cash equivalents Lease liabilities
Short-term deposits Trade payables
Level 3 Accruals
Trade receivables - net Other payables
Other receivables Borrowings*
*Borrowings are purely in relation to the Group's revolving credit facility
which is discussed above. The amount drawn down from this facility at 31
December 2023 was £nil (2022: £nil).
All trade and other payables are due for payment in one year or less, or on
demand.
Interest rate risk
The Group's financial assets are not significant interest-bearing assets. The
Group is exposed to interest rate risk when it borrows funds at floating
interest rates through its revolving credit facility. Borrowings issued at
variable rates expose the Group to cash flow interest rate risk. The Group
evaluates its risk appetite towards interest rate risks regularly to manage
interest rate risk in relation to its revolving credit facility if deemed
necessary.
The Group did not enter any hedging transactions during the current or prior
year and as at 31 December 2023 the only floating rate to which the Group was
exposed was SONIA. The Group's exposure to interest rates on financial assets
and financial liabilities is detailed in the liquidity risk section of this
note.
Interest rate sensitivity
The Group has not drawn down from its revolving credit facility in the current
year or prior year therefore a sensitivity analysis has not been performed.
Capital risk
The Group manages its capital to ensure that all entities in the Group will be
able to continue as a going concern while maximising return to shareholders,
as well as sustaining the future development of the business.
The capital structure of the Group consists of net cash, which includes cash
and cash equivalents (note 16), short-term deposits (note 17) and equity
attributable to the owners of the parent, comprising issued share capital
(note 22), other reserves and retained earnings. The Board also considers the
levels of own shares held for employee share plans and the ability to issue
new shares for acquisitions, in managing capital risk in the business.
Since March 2021, the Group has benefited from its banking facility with
NatWest, which featured a committed £10m facility and an additional
uncommitted £15m accordion option, both of which can be used to cover the
Group's working capital and general corporate needs. In February 2024, the
Group took the option to extend the facility for one year and the facility now
runs to 31 March 2026. Interest is calculated on SONIA plus a margin dependent
on the Group's net leverage position, which is re-measured quarterly in line
with covenant testing. The Group's borrowings are subject to financial
covenants tested quarterly. The principal financial covenants under the
facility are that the ratio of net debt to EBITDA shall not exceed 2.5:1 and
the ratio of EBITDA to net finance charges shall not be less than 4:1. At no
point during the current year or prior year did the Group breach its
covenants.
Currency risk
Substantially all the Group's net assets are in the United Kingdom. Most of
the revenue and profits are generated in the United Kingdom and consequently
foreign exchange risk is limited. The Group continues to monitor its exposure
to currency risk, particularly as the business expands into overseas
territories such as North America, however the results of the Group are not
currently considered to be sensitive to movements in currency rates.
27 Pension schemes
The Group contributes to individual and collective money purchase pension
schemes in respect of Directors and employees once they have completed the
requisite period of service. The charge for the year in respect of these
defined contribution schemes is shown in note 5. Included within other
payables is an amount of £90,000 (2022: £92,000) payable in respect of the
money purchase pension schemes.
28 Capital commitments
At 31 December 2022, the Group had signed a lease agreement for a London
property with a commencement date of 1 January 2023. This lease has a term of
three years until 31 December 2025, with lease payments/cash outflows of
£973,000 for the first year of the lease term, increasing by 3.5% annually
thereafter. There is a deposit for the new London property lease which will be
payable from the commencement date of 1 January 2023 of £162,000. This is
fully refundable at the end of the lease term. This lease has now been
recognised in the consolidated statement of financial position as at 31
December 2023 accordingly within property, plant and equipment (note 12),
trade and other receivables (note 15) and lease liabilities (note 19).
There are no capital commitments as at 31 December 2023.
29 Related party transactions
Group
Key management compensation is disclosed in note 5. There were no other
material related party transactions for the Group in the current or prior
year.
Company
The Company had the following transactions with subsidiaries and related
parties during the year.
i) Interest
During the year, interest was recharged from subsidiary companies as follows:
2023 2022
£'000 £'000
Net interest payable 3,432 1,896
There were no borrowings at the end of the year (2022: £nil).
The balances outstanding with subsidiary companies are disclosed in note 18.
ii) Dividends
During both the current and prior year, the Company did not receive any
dividends from its subsidiaries.
iii) Employee Benefit Trust
The assets and liabilities of the Employee Benefit Trust are comprised in the
consolidated statement of financial position. Transactions between the
Employee Benefit Trust and the Company are detailed in notes 22 and 23.
Details of the Company's receivable from the Employee Benefit Trust is in note
15.
There were no other material related party transactions for the Company in the
current or prior year.
Audit exemption
For the year ended 31 December 2023, the Company has provided a guarantee
pursuant to sections 479A-C of Companies Act 2006 over the liabilities of the
following subsidiaries and, as such, they are exempt from the requirements of
the Act relating to the audit of individual financial statements, or
preparation of individual financial statements, as appropriate, for this
financial year.
Name Company number Outstanding liabilities
£'000
Centaur Communications Limited 01595235 24,696
Econsultancy.com Limited 04047149 201
Market Makers Incorporated Limited(1) 05063707 -
TheLawyer.com Limited 11491880 3,027
Xeim Limited 05243851 8,480
(1) Market Makers Incorporated Limited was liquidated on 14 January 2024.
See note 13 for changes to subsidiary holdings during the year.
30 Events after the reporting date
No material events have occurred after the reporting date.
FIVE YEAR RECORD (UNAUDITED)
2019* 2021* Re-presented(2) 2023
2020* 2022
Revenue (£m) 39.6 32.4 39.1 38.4 37.3
Operating (loss) / profit (£m) (7.8) (2.3) 1.6 3.5 6.1
Adjusted operating (loss) / profit (£m) (1.2) - 3.2 4.9 7.6
Adjusted operating (loss) / profit margin (3%) - 8% 13% 20%
(Loss) / profit before tax (£m) (8.1) (2.6) 1.4 3.5 6.1
Adjusted (loss) / profit before tax (£m) (1.5) (0.3) 3.0 4.9 7.6
Adjusted diluted EPS (pence) 0.3 0.3 1.9 2.5 4.2
Ordinary dividend per share (pence) 1.5 0.5 1.0 1.1 1.8
Special dividend per share (pence) 2.0 - - 5.0 -
Net operating cash flow (£m) 4.7 2.1 9.5 8.4 5.8
Average permanent headcount (FTE) 317 282 264 237 233
Revenue per head (£'000) 125 115 148 162 160
Revenue from continuing operations by type 2019* 2020* 2021* Re-presented(2) 2023
£m £m £m 2022 £m
£m
Premium Content 14.4 13.2 12.9 14.7 15.2
Training and Advisory 7.6 8.5 12.6 14.4 14.8
Marketing Services 4.3 2.9 3.3 - -
Events 6.4 2.5 3.8 4.6 3.9
Marketing Solutions 4.6 4.2 5.0 3.5 2.3
Recruitment Advertising 2.3 1.1 1.5 1.2 1.1
39.6 32.4 39.1 38.4 37.3
Other 2019* 2020* 2021* Re-presented(2) 2023
£m £m £m 2022 £m
£m
Goodwill and other intangible assets 61.2 46.1 44.2 43.8 44.7
Other assets and liabilities (9.4) (7.2) (10.2) (11.0) (9.1)
Net assets before net cash 51.8 38.9 34.0 32.8 35.6
Net cash 9.3 8.3 13.1 16.0 9.5
Total equity 61.1 47.2 47.1 48.8 45.1
(2) See note 1(a) for description of the prior year re-presentation.
* 2019 - 2021 have not been re-presented with regards to discontinued
operations relating to the closure of the Really B2B and Design Week brands in
2023. 2022 has been re-presented for discontinued operations in line with the
comparatives disclosed in this financial information.
DIRECTORS, ADVISERS AND OTHER CORPORATE INFORMATION
Company registration number
04948078
Incorporated / domiciled in
England and Wales
Registered office
10 York Road
London
SE1 7ND
United Kingdom
Directors
Colin Jones (Chair)
Swagatam Mukerji (Chief Executive Officer)
Simon Longfield (Chief Financial Officer)
William Eccleshare
Carol Hosey
Leslie-Ann Reed
Richard Staveley
Company Secretary
Helen Silver
Independent Auditor
Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
Registrars
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
External Lawyers
Dechert LLP
160 Queen Victoria Street
London
EC4V 4QQ
Brokers
Investec Bank plc
Singer Capital Markets
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. END FR KZGMFRZKGDZMRecent news on Centaur Media
See all newsREG - Singer Capital Centaur Media PLC - Form 8.5 (EPT/RI)
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