REG - CPPGroup Plc - Annual Financial Report <Origin Href="QuoteRef">CPPG.L</Origin> - Part 3

CPPGroupAnnouncement

24/03/2016 13:40

- Part 3: For the preceding part double click  ID:nRSX1208Tb 

have been 38,010,000 options granted in the current year as part of the MSP;
the plan was not in operation in the prior year. 
 
                             2015                                2014                                
                             Number of share options(thousands)  Weighted average exercise price(£)  Number of share options(thousands)  Weighted average exercise price(£)  
 MSP                                                                                                                                                                         
 Outstanding at 1 January    -                                   -                                   -                                   -                                   
 Granted during the year     38,010                              0.01                                -                                   -                                   
 Forfeited during the year   (1,875)                             0.01                                -                                   -                                   
 Outstanding at 31 December  36,135                              0.01                                -                                   -                                   
 
 
Options granted under the MSP have an exercise price of 1 penny and they vest
over a three year period, with 25% vesting on the first anniversary of the
grant date, 25% vesting on the second anniversary and 50% vesting on the third
anniversary. Options lapse if not exercised within ten years of the grant date
and will lapse if option holders cease to be employed by the Group or sell any
of their investment shares. 
 
The options outstanding at 31 December 2015 had a weighted average remaining
contractual life of two years. 
 
The principal assumptions underlying the valuation of the options granted
during the year at the date of grant are as follows: 
 
                                  MSP 2015  
 Weighted average share price     £0.09     
 Weighted average exercise price  £0.01     
 Expected volatility              140.93%   
 Expected life                    2 years   
 Risk-free rate                   0.76%     
 Dividend yield                   n/a       
 
 
There have been 38,010,000 share options granted in the current year. The
aggregate estimated fair value of the options and shares granted in the
current year under the MSP was £3,208,000. 
 
14. Reconciliation of operating cash flows 
 
                                                                         2015£'000  2014 £'000  
 Profit/(loss) for the year                                              20,837     (6,749)     
 Adjustment for:                                                                                
 Depreciation and amortisation                                           856        4,155       
 Equity settled share based payment expense                              1,466      203         
 Impairment loss on intangible assets and property, plant and equipment  21         86          
 Loss on disposal of property, plant and equipment                       16         43          
 Profit on disposal of discontinued operations                           -          (311)       
 Commission deferral compromise and associated costs                     (19,388)   744         
 Share of loss of joint venture                                          -          1,096       
 Investment revenues                                                     (282)      (432)       
 Finance costs                                                           1,523      2,296       
 Income tax expense/(credit)                                             3,017      (1,698)     
 Operating cash flows before movements in working capital                8,066      (567)       
 Decrease in inventories                                                 50         56          
 Decrease in receivables                                                 2,234      5,202       
 Decrease in insurance assets                                            276        2,794       
 Decrease in payables                                                    (4,410)    (9,892)     
 Decrease in insurance liabilities                                       (830)      (1,970)     
 Decrease in provisions                                                  (5,574)    (29,384)    
 Cash used in operations                                                 (188)      (33,761)    
 Income taxes (paid)/repaid                                              (1,172)    855         
 Net cash used in operating activities                                   (1,360)    (32,906)    
 
 
15. Related party transactions and control 
 
Ultimate controlling party 
 
Following the equity raise in February 2015, Mr Hamish Ogston's holding in the
Company has reduced and currently represents 42.3%, resulting in the Group no
longer having a controlling party. Mr Hamish Ogston's family investment
vehicle, Milton Magna Limited, is an investment client of the Schroder group
of companies, of which Schroder Investment Management Limited is part.
Schroder Investment Management Limited has a holding of 10.0% in the Company. 
 
Transactions with related parties 
 
As part of the placing of 666,666,667 ordinary shares by the Company on 11
February 2015, Mr Hamish Ogston acquired 264,144,352 ordinary shares through
his family investment vehicle Milton Magna Limited for consideration of
£7,924,000 and Schroder Investment Management Limited acquired 61,437,285
ordinary shares for consideration of £1,843,000. Both parties were substantial
shareholders in the Group prior to the placing. 
 
As part of the MSP, key management personnel of the Group purchased investment
shares on 25 June 2015 and 24 November 2015 for total consideration of
£433,000. 
 
On 23 December 2015, Ruth Evans, a Non-Executive Director of the Group at the
time, purchased 208,571 ordinary shares in the Company for total cash
consideration of £25,000. 
 
Remuneration of key management personnel 
 
The remuneration of the Directors and senior management team, who are the key
management personnel of the Group, is set out below: 
 
                               2015£'000  2014 £'000  
 Short term employee benefits  4,098      2,133       
 Post employment benefits      121        100         
 Termination benefits          239        -           
 Share-based payments          1,128      8           
                               5,586      2,241       
 
 
In 2015, the remuneration of key management personnel includes an expansion of
the senior management team, settlements to former Directors and senior
management and provision for bonuses reflective of the turnaround in the
Group's performance. 
 
16. Events after the balance sheet date 
 
As announced on 21 March 2016, Schroder Investment Management Limited
(Schroders) has filed a notice requisitioning a general meeting of the
Company's shareholders (the Requisition). The Requisition proposes resolutions
to remove the CEO and current Non-Executive Directors from the Board and to
replace them with individuals proposed by Schroders. It is believed that
Schroders are working with Mr Hamish Ogston, one of the Group's major
shareholders and founder of the Company. 
 
The intention is to call the general meeting within 21 days of receipt of the
Requisition and to provide for such meeting to be held not more than 28 days
after the date of notice. 
 
Cautionary statement 
 
This announcement has been prepared solely to provide additional information
to shareholders as a body to meet the relevant requirements of the UK Listing
Authority. The announcement should not be relied on by any other party or for
any other purpose. 
 
The announcement contains certain forward-looking statements. These statements
are made by the Directors in good faith based on the information available to
them up to the time of approval of the announcement but such statements should
be treated with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such forward-looking
information. Subject to the requirements of the UK Listing Authority, CPP
undertakes no obligation to update these forward-looking statements and it
will not publicly release any revisions it may make to these forward-looking
statements that may result from events or circumstances arising after the date
of this announcement. 
 
This information is provided by RNS
The company news service from the London Stock Exchange