REG - Christie Group PLC - Final Results
29/04/2024 07:00
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RNS Number : 2822M Christie Group PLC 29 April 2024
29 April 2024
Christie Group plc
Preliminary results for the 12 months ended 31 December 2023
A challenging 2023 but a more encouraging outlook for 2024
Christie Group plc ('Christie Group' or the 'Group'), the leading provider of
Professional & Financial Services (PFS) and Stock & Inventory Systems
& Services (SISS) to the hospitality, leisure, healthcare, medical,
childcare & education and retail sectors, is pleased to announce its
audited preliminary results for the 12 months ended 31 December 2023.
FY23 Headlines:
· Revenue down 4.8% to £65.9m (2022: £69.2m)
· Operating loss before non-recurring costs of £0.6m (2022: profit
£5.4m)
· Non-recurring costs attributable to board changes and
restructuring of £2.7m (2022: £nil)
· PFS revenues down £5.1m to £42.2m (2022: £47.4m) as
transactional brokerage incomes were impacted by rising interest rate rises
and inflation
· UK transactional pipelines have recovered and ended the year 27%
higher than the prior year
· SISS revenues up by 8.4% to £23.6m (2022: £21.8m) but division
remained loss-making
· The Group ended 2023 with net funds of £0.6m (2022: £7.2m)
· CLBILS loan was fully repaid in June 2023
· Elimination of pension deficits on both defined pension schemes
which both remain in surplus
· Final dividend reduced to 0.50p (2022: 2.50p) to give total in
year of 1.00p (2022: 3.75p) reflecting the challenging year but also the more
positive outlook for the business
2024 Outlook:
· The Group is well positioned for an improved performance in 2024
with opportunities for growth across all business sectors, in the UK and
internationally.
· Current activity levels are encouraging, with our UK
transactional brokerage pipelines strongly ahead of this time last year and
our finance brokerage business experiencing strong demand
Commenting on the results, Dan Prickett, Chief Executive of Christie Group
said:
"2023 was a challenging and extremely disappointing year for the Group as the
effects of continual increases in interest rates and high inflation led to a
significant reduction in the volume of business sales. However, our recovery
is in progress and activity levels are encouraging, with our UK transactional
brokerage pipelines now strongly ahead of this time last year and our finance
brokerage business experiencing strong demand. Nonetheless, the expected
timing of many of those transactions points to a second-half weighting to our
2024 performance."
Enquiries:
Christie Group plc
Daniel Prickett 07885 813101
Chief Executive
Simon Hawkins 07767 354366
Chief Financial Officer
Shore Capital
Patrick Castle 020 7408 4090
Nominated Adviser & Broker
Notes to Editors:
Christie Group plc (CTG.L), quoted on AIM, is a leading professional business
services group with 37 offices across the UK and Europe, catering to its
specialist markets in the hospitality, leisure, healthcare, medical, childcare
& education and retail sectors.
Christie Group operates in two complementary business divisions:
Professional & Financial Services (PFS) and Stock & Inventory Systems
& Services (SISS). These divisions trade under the brand names: PFS
- Christie & Co, Pinders, Christie Finance and Christie Insurance: SISS
- Orridge, Venners and Vennersys.
Tracing its origins back to 1846, the Group has a long-established reputation
for offering valued services to client companies in agency, valuation
services, investment, consultancy, project management, multi-functional
trading systems and online ticketing services, stock audit and inventory
management. The diversity of these services provides a natural balance to the
Group's core agency business.
The information contained within this announcement is deemed by the Company to
constitute inside information for the purposes of Article 7 of the UK Market
Abuse Regulation (EU) No. 596/2014 which is part of the UK law by virtue of
the European Union (Withdrawal) Act 2018.
For more information, please go to www.christiegroup.com
(https://url.avanan.click/v2/___http:/www.christiegroup.com___.YXAxZTpzaG9yZWNhcDphOm86OGUwZWI0NzYwYjgzOTNhZjM2MjBmMjc0ZWEyNjNiM2E6Njo2OTIxOjdkMzkwNTRhZjUwNDMyMThhNmUyOWMxYTczMTIwMTI1MWIwOGY2MGY1NzdkMjlmNTBmMDM1MDg1YmI2ZTExZTc6cDpU)
.
CHAIRMAN'S REVIEW OF THE YEAR
Having recovered strongly in 2022 from the effects of Covid in 2020 and 2021,
the Group's performance in 2023 was both disappointing and frustrating. The
2023 result was shaped by a sharp decline in transaction volumes in our main
agency business, as a result of rising interest rates and widespread decline
in business confidence in the UK economy following the mini budget of autumn
2022. The impact persisted until the end of the summer period before we saw
signs of a return to more normal conditions in the latter part of the year.
Consequently, we ended the year with far stronger forward-looking pipelines
than those at the beginning of the year.
In our stocktaking division, the departure from the high street of the Wilko
retail chain had a major impact on our Orridge business, although we made
encouraging progress in the continuing post-Covid recovery of our hospitality
stocktaking business.
As a result of this extremely challenging trading environment, our first half
performance was acutely affected. H1 revenue fell versus the previous year
which, combined with an increased operating cost base, meant that we reported
an operating loss over the first six months of £1.4m. This H1 loss was
partially mitigated by a better H2 performance, generating a £0.8m operating
profit pre non-recurring board changes and restructuring costs, reducing our
full-year loss to £0.6m.
The table below sets out a summary of the year's results. The Chief
Executive's Review provides a comprehensive commentary, but the headline
figures show that we achieved revenues of £65.9m, against £69.2m in the
prior year, delivering an operating loss pre non-recurring board changes and
restructuring costs of £0.6m, versus an operating profit of £5.5m in 2022.
Our loss before tax was £4.3m, in comparison to a profit before tax of £4.4m
last year.
2023 2022
£'000 £'000
Revenue 65,873 69,192
Operating (loss)/profit pre non-recurring board changes & restructuring (632) 5,452
costs
Non-recurring board changes and restructuring costs (2,723) -
Operating (loss)/profit post non-recurring board changes &restructuring (3,355) 5,452
costs
Finance costs (928) (1,028)
(Loss)/profit before tax (4,283) 4,424
Net assets 3,301 8,396
Cash and cash equivalents 1,336 8,839
(Losses)/earnings per share - Basic (14.79) 12.32
Final dividend (pence per share) 0.50 2.50
Full year dividend (pence per share) 1.00 3.75
Despite the volatility of 2023, we chose to keep our businesses well-resourced
based on the expectation that transaction volumes would recover to more
normalised levels in 2024. Early indications are proving this to have been the
right strategic decision. We ended the year with positive net cash funds,
without any term debt, having fully repaid the CLBILS loan taken out during
Covid and with our two defined benefit pension schemes in surplus.
We are confident that the Group and its businesses are well prepared to
deliver on our goals in the year ahead. Our fundamentals are sound, with a
robust balance sheet and proven track record of resilience in our businesses.
Our markets and clients need our services, with our Professional &
Financial Services ("PFS") clients requiring the best possible advice on areas
including property, finance, insurance, valuation and business management.
Likewise, as technological and geo-political factors transform and disrupt our
clients' supply chains and their own consumers' habits evolve further, we
anticipate growing demand for the dependability, speed, accuracy and
reliability of our Stock & Inventory Systems & Services ("SISS")
professionals and software.
Environmental, Social & Governance
The Board recognises the importance of strong corporate governance, and we
comply with the Quoted Companies Alliance (QCA) Governance Code. We agree with
the common listed company convention that governance is enhanced by the
separation of the roles of Chair and Chief Executive. The Board has therefore
taken the opportunity through the board changes in July to comply with listed
company market norms and is now committed to maintaining an independent
Non-Executive Chair and a Chief Executive as two sperate roles in the future.
On the wider subject of ESG, notably the Environment and Social aspects, we
are at an early stage of a process across our Group to assess our plans to
address our ESG issues in the context of what is meaningful to us, our
stakeholders and our business aspirations. As a collection of service
businesses, our environmental impact is relatively limited, but there are
undoubtedly improvements we can make to reduce our carbon footprint of our
teams during the years ahead by, for example changing the way we work and
travel. Socially, we are keen to further enhance our status as an employer of
the most talented individuals from diverse, international backgrounds. We
already support a wide range of sectors which are themselves vital to the
economy and wider society. Our businesses also increasingly recognise the
benefits of supporting employee wellbeing initiatives that are vital to
ensuring our teams can continue to provide our clients with the service and
skill levels that they have come to expect. Our Group and its businesses have
a long-standing track record of supporting a variety of charitable endeavours,
and we intend for this to continue.
I would personally like to thank the Board for their confidence in appointing
me as Interim Non-Executive Chair while the search to recruit a permanent
successor continues. My gratitude also goes to every member of the Christie
Group team for their continued commitment to the business during what has been
a difficult year, and I look forward to seeing them raise their game again to
deliver their plans and navigate the inevitable challenges ahead. The
extraordinary competence and commitment of our people and the strength of our
long-term client relationships are regularly endorsed by positive feedback and
the repeat use of our services.
On behalf of the Board, I would also like to congratulate Dan Prickett on his
promotion to Chief Executive of the Christie Group and we wish him every
success in his new role.
Looking ahead
We believe that the Group and our businesses are well positioned to improve
their performance during the coming year. We see opportunities for growth
across all business sectors, in the UK and internationally.
The Board is of course cognisant of the uncertainties resulting from external
factors such as inflation, interest rates, potential political changes and
heightened global geopolitical risk, particularly during 2024. These will
provide challenges for many companies, and Christie is not immune. However, we
believe that the diversified nature of services provided by the Christie Group
provide a defensive, resilient structure, which will better enable us to
manage and weather the macroeconomic challenges ahead. Broadening and
enhancing our strengths and capabilities across our international network will
also further assist us in this respect.
The Board believes that opportunities for stronger performance do lay ahead.
We have seen indications of improvement towards last year's end, a more
encouraging economic situation taking shape and positive indicators in several
of our target markets. We are therefore recommending a final dividend of
0.50p, to be approved at our AGM on Thursday 13 June 2024. Subject to that
approval, the dividend is set for payment on 12 July 2024 to those
shareholders on the register on 14 June 2024.
Simon Herrick
Non-executive Interim Chairman
26 April 2024
CHIEF EXECUTIVE'S REVIEW
2023 was clearly a very challenging year for the Group, with the final outcome
far below the aspirations we began the year with. The acutest impact was on
our transactional brokerage revenues within our Professional & Financial
Services ("PFS") division, where the effects of continual and rapid increases
in interest rates - combined with an uncomfortable inflationary environment
for vendors and prospective purchasers - meant that we saw the volume of
business sales significantly reduced from the previous year and the
expectations for 2023 curtailed accordingly.
Deals being delayed, repriced, paused or elongated on a scale not experienced
before - but in many cases without resulting in withdrawn instructions on
which we could form definitive views - made forecasting deal timing and
outcomes extremely challenging, arguably more so than at any time since the
global financial crisis. Similar challenges were reported by a number of
competitors during the year.
Encouragingly, we saw a much improved level of brokerage invoicing from
September onwards, while at the same time new instruction levels also
improved. As such, we ended 2023 with a UK transactional pipeline 27% above
the same point a year earlier, indicating cause for optimism as we began 2024.
Based upon management's view that 2023 was likely to be a transient period of
market adjustment, we retained and invested in our PFS division workforce, so
that we were positioned to take advantage of the opportunities we see in our
sectors and services moving forwards.
Financial performance summary
The result was full year total revenue of £65.9m, which represented a 4.7%
reduction from the prior year (2022: £69.2m), and an operating loss pre
non-recurring board changes and restructuring costs of £0.6m (2022: £5.5m
operating profit).
Within this, the £5.1m fall in PFS revenues to £42.3m (2022: £47.4m)
combined with a continuing investment to both retain and strengthen our teams
and capabilities for the medium and longer term, meant that PFS operating
profit fell from £7.6m in 2023 to £1.3m pre non-recurring board changes and
restructuring costs.
Stock & Inventory Systems & Services ("SISS") revenues grow by 8.4% to
£23.6m (2022: £21.8m). This growth was driven by a strong and continued
recovery by our hospitality stock audit business, which grew its own revenues
by nearly 15%. Unfortunately, this positive performance was offset by further
challenges in our retail stocktaking operations and the delayed revenue impact
of new business wins otherwise achieved in a more positive year for our SaaS
business, Vennersys. As such SISS operating losses pre non-recurring board
changes and restructuring costs were only reduced slightly to £2.0m (2022:
£2.1m), but with an expectation that the division will perform far more
strongly in 2024, operating from a more efficient cost base.
In addition to the costs associated with the Board changes previously reported
in July, we have incurred further non-recurring board changes and
restructuring costs in H2. In our PFS division, we have exited from our
Finland operation where the changed political environment and reduced Baltic
investment opportunities meant that we could not see potential for scalable
agency or advisory operations in the region. In our UK retail stocktaking
business, we reacted to the administration of one larger client, Wilkos, by
streamlining our operating cost base, and we also completed the exit from the
legacy office of our now-ceased Canadian ticketing software activities. Total
non-recurring board changes and restructuring costs in the period therefore
amounted to £2.7m (2022: £nil).
Cash and balance sheet
We ended the year with net funds and free of any term-debt, having completed
the full repayment in June 2023 of the £6.0m CLBILS loan we borrowed in
mid-2020. Our working capital management remains robust, both in terms of our
own collection of amounts due to us and timely payment of our own suppliers.
We are pleased to have followed the elimination of both defined benefit
schemes' deficits with decisive changes in investment strategy adopted by the
two sets of trustees. These changes, implemented across the year end, are
intended to ensure the Group is protected from being required to make deficit
repair payments in future through a greater level of investment in high grade
bonds and gilts, whose own value measurement should more closely correspond to
any change in scheme liabilities. We are optimistic this will avoid any future
funding shortfall while we continue to explore further de-risking options.
Professional & Financial Services Division
As the effects of fourteen consecutive increases in the UK base rate took
effect, our agency and advisory business, Christie & Co, saw transactional
volumes reduce by 22% on the previous year. Those same economic conditions
also served to subdue the value of businesses in our sectors and therefore
created downward pressure on the related agency fees for our brokerage
services.
The business carried some momentum into the early part of the year from a
pipeline of work largely created prior to the October 2022 mini-budget, but
after those deals were brought to exchange in the first quarter, we
experienced a fallow second and third quarters before activity levels began to
normalise post-summer. We are optimistic that period is now behind us, with
transactional pipelines restored to far healthier levels by the end of 2023.
Work remains ongoing on a number of significant multi-asset disposal
campaigns, selling packages of between 30 and 100 properties on a break-up
basis, at which Christie & Co excels. We also made further progress in the
development of our newer sector specialisms, notably our Garden Centres and
Caravan & Holiday Park teams.
Distressed instructions began to return as a more prominent feature of our
assignments. Approximately 10% of all agency instructions received in 2023 by
our UK business had some form of distress and we expect to see that continue
into 2024.
Our international network benefitted from an excellent year by our French
team, who completed 23 hotel transactions in the year as our standout
performer. We established a Healthcare transactional team in Frankfurt and we
aim to expand this outside of Germany, as we seek to evolve our European
operations into operations of applicable multi-sector capability where for
over 20 years we have been Hotels focused on the continent.
Our Business Appraisal operation, Pinders, delivered an excellent full year
outcome after a slow start to the year. Activity picked up sharply in the
spring, with demand for valuations in the white coat sector particularly
strong, aided by instructions connected to the disposal by LloydsPharmacy of
its retail arm. The number of pharmacies valued by Pinders in 2023 was 77%
higher than the previous year, but the increased concentration on White Coat
sector assignments had the effect of subduing average fee growth. Pinders also
had an encouraging and progressive year in terms of recruitment and graduate
training, and it continues to focus on growing its Building Services and
Dispute Resolution fee income.
In aggregate, Christie & Co and Pinders valued assets worth £9.4bn in the
year (2022: £10.1bn). Both businesses' reputations among lenders remain very
strong, sustaining all of their lender panel positions and achieving service
delivery times that most competitors cannot rival.
Our finance brokerage business, Christie Finance, delivered increased deal
volume and turnover, but itself suffered from similar conditions to Christie
& Co where commercial mortgage lending was subdued at the start of the
year and gathered momentum gradually amidst the continual changes in lending
conditions, before a frustrating end to the year saw some expected offers of
finance - the trigger point at which we recognise brokerage commission - being
delayed into 2024 in both our Core and Corporate divisions. This more subdued
activity level at the start of 2023 was illustrated by a 13% reduction in the
number of loan offers secured, but this was offset by a higher ratio of
secured offers being converted into drawn-down borrowing by clients.
Nonetheless, the total value of debt secured for clients across the Christie
Finance business increased by 20% to over £183m, with the strongest growth
coming in its Unsecured lending team who increased completed deal volumes by
48% on 2022 levels. Christie Finance also established a specialist Real Estate
division to offer finance for bridging, property investment and development
funding and we are encouraged by the initial levels of activity achieved with
plans to further expand that team in 2024.
Recognising the potential for growth in our finance brokerage operation, we
grew fee earning headcount in the business by 24% in the year and will seek to
continue that trend in the year ahead.
As part of our commitment to the further development and growth of our
financial services capabilities, we also took the decision to invest in our
insurance brokerage business, Christie Insurance, to enable us to fully
benefit from the strong levels of cross referral potential which remain
inherent in the wider Christie Group companies' client base. We completed the
process to achieve full FCA approval for conducting directly regulated
insurance brokerage business in June 2023, and that enabled us to move away
from the brokerage outsourcing model we had used since 2013 and better align
our service and growth culture with those seen elsewhere in our PFS division.
As a result, we commenced our directly regulated insurance activities on 1
October 2023. As part of this strategy, we have invested in expanding our
insurance brokerage team in the second half and expect to have completed our
initial recruitment program by the end of H1 2024, better enabling us to
achieve our ambitions of sustainably growing our book of recurring renewal
general insurance clients while also being able to provide customers with a
suite of life assurance and other protection products.
PFS divisional KPIs 2023 2022
Total businesses sold 820 1,057
% Increase / (decrease) in average fee per business sold (2.04)% 14.4%
Total value of businesses sold (£m) 1,037 1,493
Total valuations carried out (units) 5,291 5,515
% increase in average fee per valuation 5.6% 0.7%
Value of businesses valued (£m) 9,417 10,057
% (decrease) / increase in number of loan offers secured (12.8%) 4.2%
Average loan size (£'000) 624 440
Stock & Inventory Systems & Services Division
Our hospitality stock audit and consultancy business, Venners, performed well.
Strong progress was made in expanding its stocktaker resources through a
successful recruitment and training effort. This was as part of a holistic
focus on staff retention and development aimed at ensuring its recruitment
needs are not exacerbated by retention challenges. The business ended 2023
with its stocktaker headcount increased by 16% from a year earlier. As the
recruitment success was more second-half weighted, the annualised benefit of
this growth will only be fully seen in 2024.
Further recruitment is planned for the current year to enable the business to
continue to address healthy levels of demand for its services.
The strength of demand for Venners' services was reflected by a record year in
terms of new business quoting activity, exceeding what had previously been a
record year in 2022. Average fees were increased by over 8%, necessitated by
the continued inflationary pressures on operating costs, but excellence of
service and a market-leading reputation meant the business was successful
converting over 50% of all quotes issued into new business wins. Notable
additions in the year to our client portfolio included Rangers FC, The Savoy
Hotel, London and Popeye's Louisiana Kitchen franchise operation.
Encouragingly the business also made good progress in increasing its
higher-margin Consultancy and Compliance revenues. The latter saw a
year-on-year growth in volume of work undertaken of 15%, while the former had
a record year in terms of revenues and more than doubled its 2022 revenue
levels.
Our pan-European retail and pharmacy stocktaking business, Orridge,
experienced a mixed year. In our UK retail operation, the largest constituent
of the Orridge group of businesses, new business sales were much improved on
recent years and saw clients such as The British Heart Foundation, Iceland,
Hamleys of London and Gym Shark added. However, the administration of Wilkos
in August meant the business lost a valued client from its portfolio and we
sought to mitigate that effect and better align our operating cost base with
future expected revenues by completing appropriate restructuring in the second
half of the year.
Conversely, our Pharmacy stocktaking business had an excellent year,
increasing revenues 60% on 2022 levels and improving its margins in the
process as it benefitted from growth in its recurring client base and its
ability to carry out stock valuations in an eventful year for the UK Pharmacy
sector.
Our Supply Chain business also grew revenues by over 40% year-on-year while
achieving similar margin levels to Pharmacy. In our European operations, we
made good progress in Germany with 21% revenue growth, but found it more
challenging in our Benelux operation where cost inflation and higher levels of
staff churn were disruptive.
Vennersys, our Software-As-A-Service ("SaaS") provider to UK visitor
attractions, delivered a significantly improved 2023 compared to 2022 in terms
of new client wins, securing over 30 new wins, albeit with some of those
installations scheduled for 2024. It also began 2024 with a pipeline of
actively engaged opportunities that provides the visible potential to match or
exceed that level of new business growth in the year ahead.
Disappointingly, the business suffered some client attrition, albeit very
limited in terms of client numbers, but which prevented it from growing its
revenues overall. Encouragingly, the percentage of visitors to our clients
choosing to purchase their tickets online increased slightly year-on-year.
We have continued to invest in the VenPos Cloud product, developing it in
several areas which include the addition of Digital Wallets, Kiosk facilities
for food & beverage outlets within attractions and an improved on-line
journey for customers.
SISS divisional KPIs 2023 2022
Total stocktakes & audits carried out (number of jobs) 54,199 53,818
% increase in average income per job 7.9% 4.7%
% of visitor attraction client admissions purchased online 47.7% 45.3%
Looking ahead
We ended 2023 disappointed by the full year performance, but encouraged by the
improved activity that we saw as we moved through the final quarter of the
year and by the recovery in the transactional pipelines being carried into
2024. Despite the wider market difficulties, our businesses continue to
attract notable instructions from clients across our sectors who recognise and
value the quality of the service we provide and the outcomes we can deliver.
We will continue to build on those strengths. Activity across all of our
sector teams at the start of 2024 has been positive, as we look to bounce back
swiftly from a challenging twelve months. In our agency and advisory business,
UK transactional pipelines have continued to strengthen and compare favourably
at the end of Q1 2024 to the same point a year ago, but the expected timeline
against many of those transactions points once again to a second-half
weighting to our PFS revenues.
We have broadened our international agency and advisory business through the
addition of a second sector capability in Germany, and we will look to
replicate that multi-sector strategy across our international network. As with
our UK transactional income, we anticipate income levels improving as we move
through the year, following on from softer invoicing on the continent in the
first quarter.
We have made good progress in 2023 and the early part of 2024 in strengthening
our finance and insurance brokerage capabilities, and we have continued a
strong level of recovery in our hospitality stock audit business with further
growth expected.
We took decisive action in the second half of 2023 to address the cost base in
our UK retail stocktaking operation, as well as restructuring our sales team
as we look to move the retail stocktaking components of Orridge into profit,
alongside the already-profitable Pharmacy and Supply Chain divisions. We have
no desire to continue to record operating losses in that business and we are
encouraged by the UK element of our Orridge operations having recorded an
aggregated first-quarter operating profit in 2024. On the continent, our
German operation continues to derive a strong proportion of its own revenues
from Q4 activity.
Our SaaS business began 2024 solidly, with some early new client wins
following on from a much improved 2023 in that respect. Nonetheless, there is
more to do. Our software product has continued to be developed and is
increasingly proving attractive to clients wishing to switch from competitors
choosing to under-invest in their own offering and where their functionality
demands cannot then be met. We do not anticipate the business unit achieving
profitability in 2024, but if we can achieve a repeat of 2023 in terms of the
number and profile of new clients signed, it would be significant in moving
that ambition onto the horizon.
Dan Prickett
Chief Executive
26 April 2024
CHIEF FINANCIAL OFFICER'S REVIEW
Undoubtably 2023 was a challenging, frustrating and ultimately disappointing
year for the Group, following strong progress made in 2021 & 2022 after
the impact of the Covid pandemic.
In 2023, we experienced a sharp decline in our PFS division transactional
volumes particularly in the first half of 2023, as the impact of continued
interest rate rises together with the inflationary and cost of living
pressures impacted M&A activity. As a result, we endured a significant
reduction in transitional volumes compared to 2022.
Despite the result, the Group continued to invest in the business and made
good progress across a number of its brands. Moreover, we exited 2023 with
positive net funds, lower borrowings and a strong balance sheet to support our
future growth ambitions.
Income statement
Revenue for the full year decreased by 4.8% to £65.9m (2022: £69.2m),
resulting in an operating loss pre non-recurring board changes and
restructuring costs of £0.6m (2022: profit £5.5m).
We achieved an improved second half year performance with an operating profit
pre non-recurring board changes and restructuring costs of £0.8m against a
£1.4m operating loss in the first half.
Compared to 2022 - where certain businesses in the Group were still impacted
by Covid restrictions - we returned to more normalised levels of travel,
marketing & exhibitions following reduced activity and spend during the
pandemic. This, together with high market driven salary inflationary levels
increased our cost base. Going forward, we would anticipate that wage growth
will return to more controlled levels in a more normalised inflationary
environment.
Cash and net debt
We ended the year with net funds of £0.6m (2022: £7.2m), measured as cash
& cash equivalents less total borrowings, whilst we reduced overall
borrowings by £0.9m to £0.7m (2022: £1.6m) at the end of 2023.
The significant reduction of net funds of £6.6m, was attributable to the
trading performance from operating activities, our continued investment in
capital expenditure most notably in terms of continued product investment and
development in our SaaS business, repayment of the final amount of the CLBILS
loan which now leaves us free of any term debt, and payment of £0.8m of
dividends. The Board maintained dividend payments despite the losses in the
year, reflecting the Board's confidence in the Group's future prospects and
resilience to rebound from what we see as short term market disruptions.
At the year end, the Group's invoice discounting facility was £0.7m (2022:
£0.6m).
Capital investment
As a Group, we invested £0.9m (2022: £0.8m) in capital expenditure. As noted
above, this included £0.5m (2022: £0.5m) applied to the ongoing development
of our SaaS visitor attraction software business. 2023 was a far more
positive and encouraging year in terms of new client wins for our SaaS
business, which we believe endorses our commitment to ongoing development of
our product, on which we fully hold all proprietary rights.
Pension schemes
As a Group, we have endeavoured to mitigate pension risk exposure with our two
defined benefit schemes closed to new members since 1999 and 2000
respectively. Active employee membership of those two schemes stands at less
than 1% of our average total number of employees employed, whilst the
remaining eligible employees are members of our defined contribution schemes.
The pension liability as measured at the balance sheet date in accordance with
IAS 19 & IFRIC 14 was £0.9m and this has considerably improved over
recent years with a reduction in the liability of over £19.0m since 2020. In
fact, at the balance sheet date there was a surplus of £16.8m in the defined
benefit schemes although accounting standards prevent us from being able to
recognise this.
Moreover, the trustees of both schemes have made significant investment
strategy changes, which are intended to mitigate the need as fully as possible
for the Group to make further deficit repair payments in the future. Ongoing
cash obligations for the Group should be minimal going forward, whilst we
continue to explore further de-risking options.
Key performance indicators (KPIs)
In addition to the non-financial KPIs included in the Chief Executive report,
the principal financial KPIs for the Group and the individual operating
divisions are set out in the table below.
· Revenue movement % - is a key indicator that the Group monitor.
· Operating result % - an important part of our strategy is the
profitable growth of our businesses and one measure of this is the operating
profit % margin. This is measured as operating result (pre non-recurring board
changes and restructuring costs) as a percentage of revenue.
· Earnings per share (EPS) growth - an important part of our
strategy is the growth in our EPS. This is measured both in absolute terms and
year-on-year % growth.
· Net funds/(debt) - a key metric for the Group is its cash and
debt resources. Net funds/(debt) position is closely monitored.
· Pension liability - a key metric for the Group is the defined
benefit pension scheme liability.
KPIs Group PFS SISS
Revenue movement (%)
2023 on 2022 (4.8%) (10.9%) 8.4%
2022 on 2021 13.0% 8.2% 24.8%
2021 on 2020 45.1% 67.0% 9.2%
2020 on 2019 (45.9%) (43.0%) (50.1%)
2019 on 2018 2.6% 5.9% (1.9%)
Group PFS SISS
Operating profit/(loss) as % of revenue
2023 (1.0%) 3.2% (8.4%)
2022 7.9% 16.0% (9.7%)
2021 8.5% 17.3% (13.6%)
2020 (11.9%) (7.1%) (19.8%)
2019 7.4% 13.6% (6.2%)
EPS (pence) Group YOY mve YOY %
2023 (14.79p) (27.11p) (220.0%)
2022 12.32p (1.39p) (10.1%)
2021 13.71p 33.03p 171.0%
2020 (19.32p) (34.62p) (226.3%)
2019 15.30p 4.07p 36.2%
Net funds (£'000) Group Movement
2023 615 (6,601)
2022 7,216 2,617
2021 4,599 521
2020 4,078 (674)
2019 4,752 7,040
Group Movement
Pension liability (£'000)
2023 883 70
2022 953 8,044
2021 8,997 11,139
2020 20,136 (8,125)
2019 12,011 2,108
Group
At a Group level, it was a disappointing year against the KPIs. Revenue
decreased by 4.8%, following a 13.0% increase in 2022. Net funds remain
positive at £0.6m, however this was a significant reduction on 2022 position
of £7.2m. Encouragingly, the two defined pension benefit schemes remain in
surplus and the pension liability has significantly reduced by £11.1m in the
period listed above, which has significantly strengthened the balance sheet.
PFS
In the PFS division, revenue decreased by 10.9% following a sharp decline in
M&A activity particularly in the first half of 2023. Operating profit
margin fell to 3.2%. Our ambitions for the division remain unaltered;
profitable growth through the strategic expansion of our service offerings
where we can replicate our UK business models and services while remaining
focused on our specialist sectors. The investment we have made and continue to
make has created an international infrastructure, capacity and operational
gearing which make improvement of these KPIs a realistic objective.
SISS
As noted in the preceding Chief Executive review, the SISS division
performance had an improved performance particularly in our Hospitality stock
audit & consultancy business and our Pharmacy & Supply Chain
divisions, with year-on-year revenue growth in the SISS division of 8.4%.
Taxation
The absolute tax position for the year was a credit of £0.5m (2022: charge
£1.2m), principally as a result of the loss for the year. In addition, we
have unutilised tax losses to carry forward which will benefit future years
income statement and cashflow.
Deferred tax asset increased in the year to £2.1m (2022: £1.6m) and this is
principally reflective of losses during the year.
Earnings per share (EPS)
Given the loss for the full year, EPS was negative at (14.79p). However, the
Board believe that with the progress we have made in 2023 across a number of
our brands, together with the increased activity in the second half of the
year, should permit the Group to return to more normalised EPS levels going
forward.
Simon Hawkins
Chief Financial Officer
26 April 2024
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2023
2023 2022
£'000 £'000
Revenue 65,873 69,192
Other income - government grants - 34
Employee benefit expenses (47,769) (47,390)
18,104 21,836
Other operating expenses (18,736) (16,384)
Operating (loss)/profit pre non-recurring board changes and restructuring (632) 5,452
costs
Non-recurring board changes and restructuring costs (2,723) -
Operating (loss)/profit post non-recurring board changes and restructuring (3,355) 5,452
costs
Finance costs (1,043) (1,077)
Finance income 115 49
Total finance costs (928) (1,028)
(Loss)/profit before tax (4,283) 4,424
Taxation 484 (1,213)
(Loss)/profit after tax (3,799) 3,211
Earnings per share
Basic (14.79) 12.32
Diluted (14.79) 12.15
All amounts derive from continuing activities.
All profit after tax is attributable to the equity shareholders of the parent.
The accompanying notes are an integral part of these preliminary results.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
2023 2022
£'000 £'000
(Loss)/profit after tax (3,799) 3,211
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations (42) (119)
Net other comprehensive loss to be reclassified to profit or loss in (42) (119)
subsequent years
Items that will not be reclassified subsequently to profit or loss:
Actuarial gains on defined benefit plans 2,892 20,616
Effect of asset ceiling (2,882) (13,896)
10 6,720
Income tax effect on defined benefit plans (723) (3,759)
Income tax effect of asset ceiling 721 1,748
(2) (2,011)
Net other comprehensive income not being reclassified to profit or loss in 8 4,709
subsequent years
Other comprehensive (loss)/income for the year net of tax (34) 4,590
Total comprehensive (loss)/income for the year (3,833) 7,801
Total comprehensive income is attributable to the equity shareholders of the
parent.
The accompanying notes are an integral part of these preliminary results.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
As at 31 December 2023
For the year ended 31 December 2022 Share capital Cumulative translation reserve Retained earnings Total equity £'000
£'000 Other reserves £'000 £'000
£'000
Balance at 1 January 2022 531 5,246 686 (4,906) 1,557
Profit for the year after tax - - - 3,211 3,211
Other comprehensive (loss)/income - - (119) 4,709 4,590
Total comprehensive (loss)/income for the year - - (119) 7,920 7,801
Movement in respect of employee share scheme - (184) - - (184)
Employee share option scheme
- value of services provided - 66 - - 66
Dividends paid - - - (844) (844)
Transactions with shareholders - (118) - (844) (962)
Balance at 31 December 2022 531 5,128 567 2,170 8,396
For the year ended 31 December 2023 Share capital Cumulative translation reserve Retained earnings Total equity £'000
£'000 Other reserves £'000 £'000
£'000
Balance at 1 January 2023 531 5,128 567 2,170 8,396
(Loss)/profit for the year after tax - - - (3,799) (3,799)
Other comprehensive (loss)/income - - (42) 8 (34)
Total comprehensive (loss)/income for the year - - (42) (3,791) (3,833)
Movement in respect of employee share scheme - (571) - - (571)
Employee share option scheme
- value of services provided - 76 - - 76
Dividends paid - - - (767) (767)
Transfer from share option reserve - (954) - 954 -
Transactions with shareholders - (1,449) - 187 (1,262)
Balance at 31 December 2023 531 3,679 525 (1,434) 3,301
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2023
2023 2022
£'000 £'000
Assets
Non-current assets
Intangible assets - Goodwill 1,826 1,843
Intangible assets - Other 1,249 1,104
Property, plant and equipment 1,013 1,178
Right of use assets 6,294 6,397
Deferred tax assets 2,102 1,565
Other receivables 2,984 2,811
15,468 14,898
Current assets
Inventories 17 25
Trade and other receivables 9,442 9,349
Other current assets 3,186 3,088
Current tax assets - 238
Cash and cash equivalents 1,336 8,839
13,981 21,539
Total assets 29,449 36,437
Equity
Share capital 531 531
Other reserves 3,679 5,128
Cumulative translation reserve 525 567
Retained earnings (1,434) 2,170
Total equity 3,301 8,396
Liabilities
Non-current liabilities
Trade and other payables 814 620
Retirement benefit obligations 883 953
Lease liabilities 8,322 8,731
Provisions 1,243 1,383
11,262 11,687
Current liabilities
Trade and other payables 9,834 11,463
Lease liabilities 1,296 1,297
Current tax liabilities 72 840
Borrowings 721 1,623
Provisions 2,963 1,131
14,886 16,354
Total liabilities 26,148 28,041
Total equity and liabilities 29,449 36,437
The accompanying notes are an integral part of these preliminary results.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
2023 2022
£'000 £'000
Cash flow from operating activities
Cash (used in)/generated from operations (1,809) 6,306
Interest paid (1,043) (975)
Tax paid (612) (200)
Net cash (used in)/generated from operating activities (3,464) 5,131
Cash flow from investing activities
Purchase of property, plant and equipment (368) (334)
Proceeds from sale of property, plant and equipment - 1
Intangible asset expenditure (544) (454)
Interest received 115 49
Net cash used in investing activities (797) (738)
Cash flow from financing activities
Repayment of bank loan (1,000) (2,000)
Net drawdown of invoice finance 10 55
Repayment of lease liabilities (1,565) (925)
Dividends paid (767) (844)
Net cash used in generated financing activities (3,322) (3,714)
Net (decrease)/increase in cash (7,583) 679
Cash and cash equivalents at beginning of year 8,839 8,167
Exchange gains on euro bank accounts (8) (7)
Cash and cash equivalents at end of year 1,248 8,839
The accompanying notes are an integral part of these preliminary results.
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. BASIS OF PREPARATION
The financial information set out in this announcement does not comprise the
Company's statutory accounts for the years ended 31 December 2023 or 31
December 2022.
The financial information has been extracted from the statutory accounts of
the Company for the years ended 31 December 2023 and 31 December 2022. The
auditors reported on those accounts; their reports were unqualified.
The statutory accounts for the year ended 31 December 2022 have been delivered
to the Registrar of Companies, whereas those for the year ended 31 December
2023 will be delivered to the Registrar of Companies following the Company's
Annual General Meeting.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRSs), this announcement does
not itself contain sufficient information to comply with IFRSs. The Company
expects to publish full financial statements that comply with IFRSs in June
2023.
These policies have been consistently applied to all years presented, unless
otherwise stated.
2. SEGMENT INFORMATION
The Group is organised into three main operating segments: Professional
& Financial Services (PFS), Stock & Inventory Systems & Services
(SISS) and Other.
The segment results for the year ended 31 December 2023 are as follows:
PFS SISS Other Group
£'000 £'000 £'000 £'000
Total gross segment sales 42,351 23,638 - 65,989
Inter-segment sales (116) - - (116)
Revenue 42,235 23,638 - 65,873
Operating profit/(loss) pre non-recurring board changes and restructuring 1,345 (1,977) - (632)
costs
Non-recurring board changes and restructuring costs (314) (262) (2,147) (2,723)
Operating profit/(loss) post non-recurring board changes and restructuring 1,031 (2,239) (2,147) (3,355)
costs
Finance costs (530) (252) (146) (928)
Profit/(loss) before tax 501 (2,491) (2,293) (4,283)
Taxation 484
Loss for the year after tax (3,799)
The segment results for the year ended 31 December 2022 are as follows:
PFS SISS Other Group
£'000 £'000 £'000 £'000
Total gross segment sales 47,487 21,815 - 69,302
Inter-segment sales (110) - - (110)
Revenue 47,377 21,815 - 69,192
Operating profit/(loss) 7,570 (2,118) - 5,452
Finance costs (554) (292) (182) (1,028)
Profit/(loss) before tax 7,016 (2,410) (182) 4,424
Taxation (1,213)
Profit for the year after tax 3,211
Revenue is allocated below based on the entity's country of domicile.
2023 2022
£'000 £'000
Revenue
Europe 65,862 69,176
Rest of the World 11 16
65,873 69,192
3. DIVIDENDS
A final dividend in respect of the year ended 31 December 2023 of 0.50p per
share (2022: 2.50p), amounting to a payment of £126,000 (2022: £663,000) is
to be proposed at the Annual General Meeting on 13 June 2024.
In the year the Group paid an interim dividend of 0.50p per share (2022:
1.25p) totalling £126,000 (2022: £324,000).
4. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of ordinary
shares in issue during the year, which excludes the shares held in the
Employee Share Ownership Plan (ESOP) trust.
2023 2022
£'000 £'000
(Loss)/profit attributable to equity holders of the Company (3,799) 3,211
Thousands Thousands
Weighted average number of ordinary shares in issue 25,694 26,062
Adjustment for share options 235 361
Weighted average number of ordinary shares for diluted earnings per share 25,929 26,423
Pence Pence
Basic earnings per share (14.79) 12.32
Diluted earnings per share (14.79) 12.15
5. NOTES TO THE CASH FLOW STATEMENT
Cash generated from operations 2023 2022
£'000 £'000
(Loss)/profit for the year after tax (3,799) 3,211
Adjustments for:
Taxation (484) 1,213
Finance costs 928 1,028
Depreciation 1,591 1,463
Amortisation of intangible assets 399 388
(Loss)/profit on sale of property, plant and equipment (64) -
Increase in provisions 1,692 62
Payments to ESOT (375) (284)
Foreign currency translation 88 (437)
Share option charge 76 66
Movement in non-current other receivables (173) (256)
Movement in working capital:
Decrease/(increase) in inventories 8 (10)
(Increase)/decrease in trade and other receivables (191) 65
Decrease in trade and other payables (1,505) (203)
Cash (used in)/generated from operations (1,809) 6,306
Report and Accounts
Copies of the 2023 Annual Report and Accounts will be posted to shareholders
in May. Further copies may be obtained by contacting the Company Secretary
at the registered office. Alternatively, the 2023 Annual Report and Accounts
will be available to download from the investors section on the Company's
website www.christiegroup.com
Key dates
The Annual General Meeting of the Company is scheduled to take place at
10.00am on Thursday 13 June 2024 at Whitefriars House, 6 Carmelite Street,
London, EC4Y 0BS.
Group Companies
Professional & Financial Services
Christie & Co
Christie & Co is the leading specialist firm providing business intelligence in the hospitality, leisure, healthcare, medical, childcare & education and retail sectors. A leader in its specialist markets, it employs the largest team of sector experts in the UK & Europe providing professional agency, valuation and consultancy services.
www.christie.com (https://url.avanan.click/v2/___http:/www.christie.com___.YXAxZTpzaG9yZWNhcDphOm86OGUwZWI0NzYwYjgzOTNhZjM2MjBmMjc0ZWEyNjNiM2E6Njo2NTM4OmE0ZGEyOGQ3YjBmMTc0NzE5YTBjZWI2NzZmY2I2OTI1YWJiYTg4MzdkODhiNzQ1Y2ZkZGNjYmY2NzBiNzE4ZDk6cDpU)
Christie Finance
Christie Finance has 45 years' experience in financing businesses in the hospitality, leisure, healthcare, medical, childcare & education, retail and medical sectors. Christie Finance prides itself on its speed of response to client opportunities and its strong relationships with finance providers.
www.christiefinance.com (https://url.avanan.click/v2/___http:/www.christiefinance.com___.YXAxZTpzaG9yZWNhcDphOm86OGUwZWI0NzYwYjgzOTNhZjM2MjBmMjc0ZWEyNjNiM2E6Njo2MTZmOjVmY2Y0YWMyYWYxMTExZDZlZDNlMTAzMmVmNTlhNGIxY2I5MTM2ODhiNjZiZTc3MmM5YTdkODQ1MGQzOGYwOGI6cDpU)
Christie Insurance
Christie Insurance has over 45 years' experience arranging business insurance in the hospitality, leisure, healthcare, medical, childcare & education and retail sectors. It delivers and exceeds clients' expectations in terms of the cost of their insurance and the breadth of its cover.
www.christieinsurance.com (https://url.avanan.click/v2/___http:/www.christieinsurance.com___.YXAxZTpzaG9yZWNhcDphOm86OGUwZWI0NzYwYjgzOTNhZjM2MjBmMjc0ZWEyNjNiM2E6NjpiMmE4OmRhNTg5MzZmZGMxODEyM2IzYTFkYTNkOWIwYmQ1MWM3YTE0NDg0OTFiMWY0N2RiMGJiOTgwMWYwMzNlNGYwNWM6cDpU)
Pinders
Pinders is the UK's leading specialist business appraisal, valuation and
consultancy company, providing professional services to the licensed, leisure,
retail and care sectors, and also the commercial and corporate business
sectors. Its Building Consultancy Division offers a full range of project
management, building monitoring and building surveying services. Pinders staff
use business analysis and surveying skills to look at the detail of the
businesses to arrive at accurate assessments of their trading potential and
value.
www.pinders.co.uk
(https://url.avanan.click/v2/___http:/www.pinders.co.uk___.YXAxZTpzaG9yZWNhcDphOm86OGUwZWI0NzYwYjgzOTNhZjM2MjBmMjc0ZWEyNjNiM2E6NjpmMDZlOmJhZTJhMWI3MGVmNjYwZjgzNzNjZWMxZDA2MWUwYzQyNDc3NjdkOTljOGY5Yzk0NTY5MzIyMDM1Nzg4MDBmYzQ6cDpU)
Stock & Inventory Systems & Services
Orridge
Orridge is Europe's longest established stocktaking business specialising in a range of valued services to the Retail and Pharmacy sections, and supply chain auditing services that elevate customers' operations where they are concentrated. Its specialised pharmacy business provides trusted valuation and stocktaking services throughout the healthcare sector. Orridge prides itself in its ability to produce dependable data and deliver high-quality management information to its clients, effectively and conveniently.
www.orridge.eu
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Venners
Venners is the leading supplier of stocktaking, inventory, consultancy &
compliance services and related stock management systems to the hospitality
sector. Consultancy & compliance services include control audits and live
event stock taking. Bespoke software and systems enable real-time management
reporting to customers using the best available technologies. Venners is the
largest and longest established stock audit company in the sector in the UK.
www.venners.com
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Vennersys
Vennersys operates in the UK and deliveries online cloud-based ticketing sales
and admission systems to visitor attractions such as historic houses and
estates, museums, zoos, safari parks, aquaria and cinemas. It has over 30
years' experience delivering purpose-designed solutions for clients'
ticketing, admissions, EPoS and food and beverages sales requirements.
www.vennersys.co.uk
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