REG - CPPGroup Plc - Half-year Report for six months ended 30 June 2024
17/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240917:nRSQ4101Ea&default-theme=true
RNS Number : 4101E CPPGroup Plc 17 September 2024
CPPGroup Plc
("CPP Group"; "the Group"; or "the Company")
HALF YEAR REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2024
OPERATIONAL PRIORITIES DELIVERED AND ENCOURAGING PROGRESS AT BLINK
CPP Group (AIM: CPP), provider of real-time, digitally delivered assistance
products which reduce disruptions to everyday life for millions of people
across the world, is pleased to announce its half year results for the six
months ended 30 June 2024.
Financial Highlights:
· Group revenue decreased by 2% to £89.1 million (H1 2023
restated: £90.6 million).
· Group EBITDA at £1.1 million (H1 2023 restated: £2.1 million).
· Core business units(4) revenues increased by 1% to £88.2 million
(H1 2023: £87.0 million).
· EBITDA from Core business units(4) at £4.0 million (H1 2023:
£3.9 million)
· Loss before tax of £0.7 million (H1 2023 restated: £3.0 million
loss).
· Cash balance of £11.6 million at 30 June 2024 (H1 2023: £16.0
million; 31 December 2023: £19.0 million).
Operational Highlights:
· Group focused on three Core businesses (Blink Parametric
("Blink"); CPP India, and CPP Turkey).
· Core businesses:
o Blink secured five new contracts and maintained its 100% partner renewal
rate.
o CPP India and CPP Turkey performed in line with expectations, despite
currency headwinds.
· Change Management Programme ("CMP") completed ahead of schedule.
· Exit from Legacy businesses complete, with UK back book in active
run-off.
· Disposal of minority interest in KYND Limited ("KYND") completed
for £2.6 million.
Post period end:
· Subsequent to the reporting date:
o Blink has signed another two contracts, for its parametric flight
disruption services.
o CPP India has secured an extension of the Bajaj Finance Limited ("Bajaj")
contract to 31 December 2027.
o The Group has completed the accelerated disposal of its 51% interest in
Globiva Services Private Ltd ("Globiva") for a total consideration of
approximately £3.8 million of which, £1.1 million was received in January
2024.
Simon Pyper, CEO of CPP Group, commented:
"Our businesses in India and Turkey performed very much as expected during the
first half of the year despite currency headwinds and the transfer of part of
the LivCare book to locally based insurers in India. However, our primary
focus continues to be growing Blink - a global product - and we have made good
progress during 2024. Blink now provides travel disruption solutions to 19
partners across 12 geographies.
Following the completion of the CMP and exit from our Legacy operations, the
Group is now the business that it set out to become some two years ago, namely
an InsurTech business led by Blink."
Financial and non-financial highlights - continuing operations
£ millions Six months to 30 June 2024 Six months to 30 June 2023 Change
(Restated(1))
Financial highlights:
Group
Revenue 89.1 90.6 (2)%
EBITDA(2) 1.1 2.1 (47)%
Operating (loss)/profit
- Reported (1.0) (3.3) 69%
- Underlying(3) (0.5) 1.2 (143)%
(Loss)/profit before tax
- Reported (0.7) (3.0) 76%
- Underlying(3) (0.2) 1.4 (117)%
(Loss)/profit after tax
- Reported (2.0) (4.4) 55%
- Underlying(3) (1.5) - >(999)%
Basic loss per share (pence)
- Reported (24.28) (52.07) 53%
- Underlying(3) (18.66) (2.37) (687)%
Cash and cash equivalents 11.6 16.0 (27)%
Segmental
Revenue
- Core(4) 88.2 87.0 1%
- Legacy(5) 0.9 3.6 (75)%
EBITDA
- Core(4) 1.6 1.7 (3)%
- Legacy(5) (0.5) 0.4 (203)%
1. Restated to reflect Spain, Italy and Portugal as discontinued
operations (note 2).
2. EBITDA represents earnings before interest, taxation, depreciation,
amortisation, and exceptional items.
3. Underlying operating profit and underlying profit before tax
excludes exceptional items of £0.5 million (H1 2023 restated: £4.4 million
restated). The tax effect of the exceptional items is £nil (H1 2023 restated:
£0.1 million). Further detail of exceptional items is provided in note 4 of
the condensed consolidated interim financial statements.
4. Core business units comprises revenue and EBITDA from CPP India,
CPP Turkey, Blink Parametric and Globiva. Core total also includes central
costs of £2.4 million (H1 2023 restated: £2.2 million).
5. Legacy business reflects the UK business which is in run-off and is
principally Card Protection and Identity Protection policies.
Enquiries:
CPP Group plc
Simon Pyper, Chief Executive
Officer Tel: +44 (0)7917
795601
David Bowling, Chief Financial Officer
Panmure Liberum
(Nominated Adviser and Sole Broker)
Tel: +44 (0)20 3100 2000
Richard Lindley
Will King
About CPP Group:
CPP Group is a technology-driven assistance company that creates embedded,
ancillary, and real-time assistance products and resolution services that
reduce disruption to everyday life for millions of people across the world, at
the time and place they are needed, CPP Group is listed on AIM, operated by
the London Stock Exchange.
For more information on CPP visit https://corporate.cppgroup.com/
(https://corporate.cppgroup.com/)
Chief Executive Officer Statement
First Half Performance
With the completion of the CMP and exit from our Legacy operations, the Group
is now the business that it set out to become some two years ago, namely an
InsurTech business led by Blink and supported by CPP India and CPP Turkey.
From a trading perspective, our focus is to grow Blink by partnering with
large global and regional insurance companies, across multiple geographies and
multiple products. We have made good progress during the year in achieving
this, with Blink now providing travel disruption solutions to 19 partners
across 12 geographies. Blink's growth, despite the 100% renewal rate from
existing contracts, will for the foreseeable future be dependent on securing
new business, and new business, particularly with the scale and complexity of
partners we are targeting, takes time, application and patience.
Our businesses in India and Turkey performed very much as expected during the
first half. CPP India, despite currency headwinds and the transfer of part of
the Bajaj LivCare book to locally based insurance companies, saw revenues
decline by only 2%. CPP Turkey's performance was very good, with revenues
growing by 125%, offsetting adverse movements in both foreign exchange, and
local inflation rates.
Having completed the CMP and exited from its Legacy operations the Group has
moved to a new operating model, one which provides central functions at a
significantly reduced cost. This reduction in our central cost base has
allowed the Group to absorb the reduction in the LivCare business without
having to revise earnings forecasts.
In summary, we are doing what we set out to do when we published our revised
strategy for the Group two years ago in September 2022.
Group Performance
EBITDA from our core business of £1.6 million was marginally lower than prior
year (H1 2023 restated: £1.7 million) reflecting the continued investment in
Blink, the reduction in CPP India LivCare sales, and £0.4 million adverse
currency movements. On the plus side, central overheads, before recharges to
business units, reduced by £0.6 million to £4.1 million reflecting the
benefits of the CMP and the move to a new and more efficient operating model.
1. Blink investment: Blink is the Group's only global product, focused
on delivering parametric InsurTech solutions to the worldwide travel
insurance, and consumer cyber-security markets. It forms an integral part of
the Group's strategy and needs sustained investment over the medium term if it
is to realise its substantial potential. Blink reported an EBITDA loss of
£1.0 million (H1 2023: £0.6 million loss).
2. CPP India: the transfer by Bajaj of part of the LivCare portfolio
to locally based insurers reduced first half revenues by £1.6 million, whilst
EBITDA improved by £0.4 million following a reduction in central recharges as
the new IT platform became fully operational. The gross profit margin improved
by 0.7 percentage points to 10.1% (H1 2023: 9.4%) reflecting a favourable
revenue mix change.
3. Currency headwinds: the Group derives 95% of its revenues in Indian
rupees which has seen a weakening against sterling of 4% for the period,
whilst the Turkish lira has depreciated by 60%. On a constant currency basis,
the Group would have reported an additional £0.4 million of EBITDA.
4. Central overheads: the cost of central functions before recharges
reduced by £0.6 million to £4.1 million (H1 2023 restated: £4.7 million)
reflecting the benefit of the completion of the CMP. The majority of the
reduction in costs relates to Group IT services. Net of recharges reported
central costs were £2.4 million (H1 2023 restated: £2.2 million). It is
expected that 2024 full year central costs after recharges will show a notable
reduction on the prior year.
The operating loss of £1.0 million (H1 2023 restated: £3.3 million loss)
includes exceptional items of £0.5 million (H1 2023 restated: £4.4 million)
which are associated with the CMP.
Outlook
We are confident about the outlook and growth prospects for our Core
operations and are pleased to have secured a contract extension with our
largest customer, Bajaj.
With the CMP now complete, we are fully focused on driving growth. Longer term
success, particularly for Blink, very much depends on how well we convert our
strong pipeline of opportunities into new business, and once converted, how
well we set about exceeding our partners expectations, and in so doing
building relationships which deliver long-term value for all stakeholders.
Whilst progress is never as fast as I would like, I remain confident that we
are travelling in the right direction and at an appropriate speed.
Business Unit Performance:
£ millions REVENUE EBITDA(1)
Continuing Operations H1 2024 H1 2023(2) CHANGE H1 2024 H1 2023(2) CHANGE
CPP India 76.4 78.0 (2)% 3.4 3.0 14%
Globiva 8.1 7.2 12% 0.9 1.2 (30)%
CPP Turkey 3.2 1.4 125% 0.7 0.3 143%
Blink 0.5 0.4 29% (1.0) (0.6) (63)%
Core business units 88.2 87.0 1% 4.0 3.9 2%
Central Functions - - n/a (2.4) (2.2) (6)%
Core total 88.2 87.0 1% 1.6 1.7 (3)%
Legacy(3) 0.9 3.6 (75)% (0.5) 0.4 (203)%
Group total 89.1 90.6 (2)% 1.1 2.1 (47)%
1. EBITDA represents earnings before interest, taxation,
depreciation, amortisation, and exceptional items.
2. Restated to reflect Spain, Italy and Portugal as discontinued
operations.
3. Legacy comprises the UK which is in active run-off.
Business Unit Performance
Blink: EBITDA loss of £1.0 million (H1 2023: £0.6 million loss)
Blink is the Group's only offering which can be sold, serviced, and ultimately
delivered profitably across multiple geographies.
Fundamentally, Blink is a B2B SaaS company, that exists to make a bad day
better for the customers (policyholders) of global insurance and financial
services organisations. The business creates innovative, scalable, white-label
products for a growing number of large global and regional partners. Across
its travel and cyber solutions Blink currently supports over 20 partners in 13
countries and, via its award-winning technology platform, services over one
million policyholders.
We are confident, that we have now "proved the concept" with Blink and that
there is a commercially attractive business, with real opportunities for
long-term profitable growth. This year, for example, we have increased the
number of partners and geographies serviced by 25% and 23% respectively, we
have maintained 100% renewals on our existing partner base, and moreover,
increased the number of customers we support at their time of need.
Nonetheless, Blink's growth will for the foreseeable future be dependent on
securing new business which takes time.
CPP India: EBITDA of £3.4 million (H1 2023: £3.0 million) and EBITDA margin
of 4.5% (H1 2023: 3.9%)
CPP India works closely with its business partners to drive value by growing
customer loyalty through the design and delivery of simple and innovative
products, which fit seamlessly into the everyday life of consumers.
First half revenue performance, despite the adverse impact of Bajaj
transferring part of their LivCare portfolio to locally based insurers, was
only marginally below prior year, which given the circumstances, is a
satisfactory outcome. The change in revenue mix brought about by the LivCare
transfer, coupled with improved revenues from higher margin products increased
CPP India's gross profit margin by 0.7 percentage points to 10.1% (H1 2023:
9.4%).
With regards to Bajaj, the business has agreed a contract extension to 31
December 2027, which reflects in part the value we help provide to Bajaj and
their customers. In addition, the contract extension will provide both parties
with some certainty over current and future commercial arrangements.
Operating costs increased marginally during the year reflecting the
profit-based incentive structure for the in-country executive team. EBITDA
margin has improved by 0.6 percentage points reflecting the increased gross
profit margin partly offset by the higher operating costs.
Operationally, the new IT platform is performing well and servicing all of CPP
India's nine million policies. The next phase of IT investment for CPP India
will be focused on helping the business transform from an "assistance company"
to a "technology led company focused on providing assistance services". There
is much work to be done before we have a fully considered plan, but it is a
statement of our intent and direction of travel.
Globiva: EBITDA of £0.9 million (H1 2023: £1.2 million) and EBITDA margin of
10.7% (H1 2023: 17.0%)
Globiva during the first half of 2024 was 51% owned by the Group and provides
outsourced customer relationship management, back-office functionality, and
automated human resource services to a predominately tech-focused client base.
As a consequence of the well-publicised global tech downturn the business,
which has a significant number of tech companies on its roster, has seen a
softening in seat occupancy rates and consequently revenues. In addition,
given the relatively high operational gearing of such businesses, the
softening in revenues has had an immediate, albeit modest, adverse impact on
first half reported EBITDA.
CPP Turkey: EBITDA of £0.7 million (H1 2023: £0.3 million) and EBITDA margin
of 21.1% (H1 2023: 19.5%)
CPP Turkey performed well in the first half with EBITDA increasing by 143%.
That the business has been able to deliver real growth not only from existing
partnerships but also new partnerships, reflects the strength and quality of
the proposition, the business partner relationships, and local management
team.
Legacy business: EBITDA loss of £0.5 million (H1 2023 restated: £0.4 million
profit)
With the exit or closure of our Spanish, Portuguese and Italian operations the
Group's only remaining Legacy business is its UK operations which are in
active run-off. The run-off will complete at the end of 2026.
Central costs: £2.4 million (H1 2023 restated: £2.2 million)
Central overheads before appropriate recharge to business units have reduced
by 13% to £4.1 million (H1 2023 restated: £4.7 million). The reduction
reflects the benefits of the CMP and move to a new and more efficient
operating model for central functions. The period-on-period benefit of the
reduced central structure is expected to increase in the second half of the
year. Net of recharges, our reported central costs have increased to £2.4
million (H1 2023 restated: £2.2 million) as the Group simplification and
decentralisation of IT has resulted in £0.8 million lower recharges to
business units. It is expected that 2024 full year central costs after
recharges will show a notable reduction on the prior year.
The purpose of the Centre is to set and agree strategic objectives, monitor
and review performance and allocate capital effectively. In addition, the
Centre is also responsible for governance, external reporting and managing
investor relations.
Taxation
The tax charge from continuing operations was £1.3 million (H1 2023 restated:
£1.3 million), which is an effective tax rate (ETR) of negative 171% (H1 2023
restated: negative 44%). The tax charge includes £0.9 million (H1 2023: £1.2
million) relating to India and £0.3 million (H1 2023: £0.1 million) relating
to Turkey. This includes withholding tax charges on dividends from both India
and Turkey. The increase in ETR, reflects increased investment in Blink as the
business is scaled, against which a deferred tax asset has not yet been
recognised.
Whilst the Group ETR is currently high and volatile it is expected to improve
in the medium-term as the UK Legacy business is exited, UK-based central costs
are reduced and Blink scales and moves towards profitability.
Financial position
The Group had cash balances at 30 June 2024 of £11.6 million (H1 2023: £16.0
million; 31 December 2023: £19.0 million). Although cash has benefitted from
the disposal of our investment in KYND, the balance has reduced by £7.4
million since the year end due to working capital payments and IT development
costs in India. In addition, there have been costs to run-off the UK legacy
book whilst cash collections have ceased, redundancy costs paid in Spain and
to the UK-based IT team, and ongoing investment in scaling Blink.
Whilst the Group's cash balances are healthy at £11.6 million, the Group's
principal source of cash generation has shifted to India. As a result, not all
of the cash resources are immediately available for on demand working capital
purposes around the Group. At 30 June 2024, approximately 40% of the cash
balance is considered 'restricted' either due to regulatory requirements in
the UK or available reserves in India. The proportion of cash that is
restricted is expected to increase in the medium-term.
Events after the balance sheet date
On 9 September 2024, the Group completed its exit from Globiva for total cash
consideration of £3.8 million (415.5 million rupees). The Group had
originally agreed to a phased divestment over three-years for aggregate
consideration of approximately £4.7 million (515.0 million rupees) which
was subject to certain performance criteria and a maximum adjustment of plus
or minus 10%.
Globiva's earnings outlook, due to a general slowdown in the Indian technology
market, has deteriorated. At the request of the Globiva Founders the Group
agreed to accelerate the disposal of its interest in Globiva, previously
scheduled to complete in Q1 2027, and in accordance with the original
agreement to apply the 10% reduction to price.
The revised consideration reflects the lower-end parameters of the original
agreement and is net of the benefit accruing (a net present value adjustment)
to the Group of receiving the cash consideration in full on completion rather
than over a three-year period.
Globiva has not been treated as a discontinued operation at the balance sheet
date. Excluding Globiva's results, the Group would have reported revenue of
£81.0 million and EBITDA of £0.2 million from its continuing operations.
Operational Highlights
From an operational perspective, the Group has now concluded its CMP. In the
last two years the Group has:
· Exited through sale or closure from all of its Legacy operations
with only the UK remaining in run-off;
· Closed expensive Legacy IT platforms;
· Implemented new or enhanced IT platforms for its Core operations
being Blink, CPP India and CPP Turkey; and
· Moved to a new operating model for central functions.
Whilst there is still much to do, our operational focus is now on supporting
continuous development and improvement to deliver quality outcomes for our
business partners and their end customers.
Our colleagues
The CMP, necessary as it was, unfortunately led to a number of roles being
made redundant and consequently we have seen long-serving colleagues leave the
business. The professionalism shown by those who have left and those who
remain, is beyond praise. Everyone has played their part, no one has shied
away from the hard decisions, and we have after almost two years, become the
business we set out to be.
I would like to express my warm and sincere gratitude to all of my colleagues
both past and present, for all that they have done and continue to do.
Simon Pyper
Chief Executive Officer
16 September 2024
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
6 months ended 30 June 2024 6 months ended 30 June 2023 (Restated*) (Unaudited) Year ended 31 December 2023 (Restated*) (Audited)
(Unaudited)
Note Core Legacy Total £'000 Core Legacy Total Core Legacy Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Revenue 3 88,199 914 89,113 87,030 3,606 90,636 181,010 6,960 187,970
Cost of sales (76,817) (190) (77,007) (76,818) (727) (77,545) (159,031) (1,490) (160,521)
Gross profit 11,382 724 12,106 10,212 2,879 13,091 21,979 5,470 27,449
Administrative expenses (11,686) (1,426) (13,112) (10,072) (6,290) (16,362) (23,016) (9,466) (32,482)
Operating (loss)/profit (304) (702) (1,006) 140 (3,411) (3,271) (1,037) (3,996) (5,033)
Analysed as:
EBITDA 3 1,610 (484) 1,126 1,669 469 2,138 2,735 795 3,530
Depreciation and amortisation (1,634) (1) (1,635) (903) (57) (960) (2,407) (177) (2,584)
Exceptional items 4 (280) (217) (497) (626) (3,823) (4,449) (1,365) (4,614) (5,979)
Investment revenues 385 109 494 333 96 429 521 228 749
Finance costs (153) (69) (222) (187) 2 (185) (471) (1) (472)
(Loss)/profit before taxation (72) (662) (734) 286 (3,313) (3,027) (987) (3,769) (4,756)
Taxation 5 (1,256) - (1,256) (1,290) (56) (1,346) (1,761) (108) (1,869)
Loss for the period from continuing operations (1,328) (662) (1,990) (1,004) (3,369) (4,373) (2,748)
(3,877) (6,625)
Discontinued operations
Profit /(loss) for the period from discontinued operations - 1,804 1,804 - (698) (698) - (1,474) (1,474)
6
(Loss)/profit for the period (1,328) 1,142 (186) (1,004) (4,067) (5,071) (2,748) (5,351) (8,099)
Attributable to:
Equity holders of the Company (1,486) 1,142 (344) (1,236) (4,067) (5,303) (3,304) (5,351) (8,655)
Non-controlling interests 158 - 158 232 - 232 556 - 556
(1,328) 1,142 (186) (1,004) (4,067) (5,071) (2,748) (5,351) (8,099)
Basic & diluted (loss)/earnings per share Pence Pence Pence Pence Pence Pence Pence Pence Pence
Continuing operations 7 (16.80) (7.48) (24.28) (13.96) (38.11) (52.07) (37.35) (43.83) (81.18)
Discontinued operations 7 - 20.39 20.39 - (7.88) (7.88) - (16.66) (16.66)
7 (16.80) 12.91 (3.89) (13.96) (45.99) (59.95) (37.35) (60.49) (97.84)
* Restated to reflect Italy, Spain and Portugal as discontinued operations.
See note 2.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months ended 30 June 2024 6 months ended 30 June 2023 Year ended
31 December 2023
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Loss for the period (186) (5,071) (8,099)
Items that may be reclassified subsequently to profit or loss:
Fair value gain on equity investment - - 610
Exchange differences on translation of foreign operations (353) (484) (696)
Exchange differences reclassified on disposal of foreign operations (2,005) - 68
Other comprehensive expense for the period net of taxation (2,358) (484) (18)
Total comprehensive expense for the period (2,544) (5,555) (8,117)
Attributable to:
Equity holders of the Company (2,708) (5,722) (8,571)
Non-controlling interests 164 167 454
(2,544) (5,555) (8,117)
CONSOLIDATED BALANCE SHEET
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
Note (Unaudited) (Unaudited) (Audited)
Non-current assets
Goodwill 514 524 513
Other intangible assets 6,746 5,728 6,619
Property, plant and equipment 829 1,103 932
Right-of-use assets 2,657 3,567 3,122
Equity investment - 2,041 -
Deferred tax assets 707 536 693
Contract assets 201 211 208
11,654 13,710 12,087
Current assets
Contract assets 6,211 6,948 6,716
Trade and other receivables 13,060 14,819 13,770
Cash and cash equivalents 11,636 15,959 19,001
30,907 37,726 39,487
Assets classified as held for sale - - 2,631
30,907 37,726 42,118
Total assets 3 42,561 51,436 54,205
Current liabilities
Income tax liabilities (999) (1,023) (1,004)
Trade and other payables (19,126) (19,849) (25,696)
Provisions 8 (1,576) (947) (1,877)
Lease liabilities (953) (946) (907)
Contract liabilities (10,230) (12,146) (11,581)
(32,884) (34,911) (41,065)
Net current (liabilities)/assets (1,977) 2,815 1,053
Non-current liabilities
Borrowings 86 125 105
Deferred tax liabilities (644) (699) (646)
Provisions 8 (1,011) (2,685) (1,588)
Lease liabilities (2,463) (3,380) (2,892)
Contract liabilities (429) (629) (604)
(4,461) (7,268) (5,625)
Total liabilities (37,345) (42,179) (46,690)
Net assets 5,216 9,257 7,515
Equity
Share capital 9 24,257 24,256 24,257
Share premium account 45,225 45,225 45,225
Merger reserve (100,399) (100,399) (100,399)
Translation reserve (3,715) (1,244) (1,351)
ESOP reserve 18,659 17,567 18,334
Retained earnings 18,768 21,882 19,192
Equity attributable to equity holders of the Company 2,795 7,287 5,258
Non-controlling interests 2,421 1,970 2,257
Total equity 5,216 9,257 7,515
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium account Merger reserve Translation reserve ESOP reserve Retained earnings Total Non-controlling interests Total equity
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
6 months ended
30 June 2024
(Unaudited)
At 1 January 2024 24,257 45,225 (100,399) (1,351) 18,334 19,192 5,258 2,257 7,515
(Loss)/profit for the period - - - - - (344) (344) 158 (186)
Other comprehensive expense for the period - - - (2,364) - - (2,364) 6 (2,358)
Total comprehensive expense for the period - - - (2,364) - (344) (2,708) 164 (2,544)
Equity-settled share-based payment charge - - - - 325 - 325 - 325
Effects of hyperinflation - - - - - (80) (80) - (80)
At 30 June 2024 24,257 45,225 (100,399) (3,715) 18,659 18,768 2,795 2,421 5,216
6 months ended
30 June 2023
(Unaudited)
At 1 January 2023 24,256 45,225 (100,399) (825) 17,212 27,201 12,670 1,803 14,473
(Loss)/profit for the period - - - - - (5,303) (5,303) 232 (5,071)
Other comprehensive expense for the period - - - (419) - - (419) (65) (484)
Total comprehensive expense for the period - - - (419) - (5,303) (5,722) 167 (5,555)
Equity-settled share-based payment charge - - - - 355 - 355 - 355
Effects of hyperinflation - - - - - (16) (16) - (16)
At 30 June 2023 24,256 45,225 (100,399) (1,244) 17,567 21,882 7,287 1,970 9,257
Year ended
31 December 2023 (Audited)
At 1 January 2023 24,256 45,225 (100,399) (825) 17,212 27,201 12,670 1,803 14,473
(Loss)/profit for the year - - - - - (8,655) (8,655) 556 (8,099)
Other comprehensive expense for the year - - - (526) - 610 84 (102) (18)
Total comprehensive expense for the period - - - (526) - (8,045) (8,571) 454 (8,117)
Equity-settled share-based payment charge - - - - 1,122 - 1,122 - 1,122
Exercise of share options 1 - - - - (1) - - -
Effects of hyperinflation - - - - - 37 37 - 37
At 31 December 2023 24,257 45,225 (100,399) (1,351) 18,334 19,192 5,258 2,257 7,515
CONSOLIDATED CASH FLOW STATEMENT
Note 6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Net cash (used in)/from operating activities 10 (8,641) (2,429) 3,610
Investing activities
Interest received 494 429 749
Purchases of property, plant and equipment (170) (162) (335)
Purchases of intangible assets 3 (1,282) (1,643) (3,551)
Sale of equity investment 2,651 - -
Cash consideration in respect of sale of discontinued operations 434 - -
Costs associated with disposal of discontinued operations (20) - -
Cash disposed of with discontinued operations (151) - -
Net cash from/(used in) investing activities 1,956 (1,376) (3,137)
Financing activities
Costs of refinancing the bank facility - - (128)
Repayment of the lease liabilities (638) (742) (1,396)
Interest paid (32) (37) (69)
Net cash used in financing activities (670) (779) (1,593)
Net decrease in cash and cash equivalents (7,355) (4,584) (1,120)
Effect of foreign exchange rate changes (10) (441) (863)
Cash and cash equivalents at start of period 19,001 20,984 20,984
Cash and cash equivalents at end of period 11,636 15,959 19,001
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1 General information
The condensed consolidated interim financial statements for the six months
ended 30 June 2024 do not constitute statutory accounts as defined under
Section 434 of the Companies Act 2006. The Annual Report and Financial
Statements (the 'Financial Statements') for the year ended 31 December 2023
were approved by the Board on 25 March 2024 and have been delivered to the
Registrar of Companies. The Auditor, PKF Littlejohn LLP, reported on these
financial statements; their report was unqualified, did not contain an
emphasis of matter paragraph and did not contain statements under s498 (2) or
(3) of the Companies Act 2006.
2 Accounting policies
Basis of preparation
The unaudited condensed consolidated interim financial statements for the six
months ended 30 June 2024 have been prepared in accordance with IAS 34 Interim
Financial Reporting. They do not include all the information required for full
annual financial statements and should be read in conjunction with the Group's
consolidated financial statements for the year ended 31 December 2023 which
were prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 and UK-adopted
International Accounting Standards (UK IASs). The condensed consolidated
interim financial statements were approved for release on 16 September 2024.
The accounting policies adopted in the preparation of the condensed
consolidated interim financial statements are consistent with those followed
in the preparation of the Group's consolidated financial statements for the
year ended 31 December 2023, except as detailed below.
New standards
Amendments to IFRS 16, IAS 1 and IAS 7 are applicable for the first time in
the current period. There has been no material impact to the Group on
adoption.
Restatement of disclosures
On 14 June 2024, the Group completed the sale of its wholly owned subsidiary
CPP Italia Srl (Italy).
In line with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations, Spain and Portugal operations met our accounting policy to be
classified as abandoned. As at 30 June 2024 there were no employees, no
servicing obligations and no revenue contracts. Post period end, the
liquidation of Spain and Portugal has been completed.
Therefore, Italy, Spain and Portugal have been classified as discontinued
operations from June 2024. Accordingly, in these interim financial statements
the comparative consolidated income statement information for the six months
ended 30 June 2023 and year ended 31 December 2023 and appropriate disclosure
notes have been restated (see note 6). The adjustments relating to the
restatement have not been audited.
Hyperinflation
The Group has operations within Turkey, which continue to meet the criteria to
be classified as a hyperinflationary economy, whereby inflation has continued
to be over 100% over the past three years. The three year inflation rate as at
30 June 2024 is 325%. Therefore, the results of our Turkish subsidiary have
been adjusted for the changes in inflation in each reporting period shown and
are stated at the exchange rate at the end of each reporting period. The price
index in Turkey (source: Turkish Statistical Institute) has shown inflation
for the six month period to 30 June 2024 of 25% (H1 2023: 20%; and year ended
31 December 2023: 65%).
Going concern
In reaching their view on the preparation of the condensed consolidated
interim financial statements on a going concern basis, the Directors are
required to consider whether the Group can continue in operational existence
for a period of at least 12 months from the date of this report.
The Group has a formalised process of budgeting, reporting and review along
with procedures to forecast its profitability and cash flows. The plans
provide information to the Directors which are used to ensure the adequacy of
resources available for the Group to meet its business objectives, both in the
short-term and in relation to its strategic priorities. The Group's revenue,
profit and cash flow forecasts are subject to robust downside stress testing
which involves modelling the impact of a combination of plausible adverse
scenarios focused on crystallisation of the Group's key operational risks,
taking into account the changing economic back drop. This is done to identify
risks to liquidity and covenant compliance and enable management to formulate
appropriate and timely mitigation strategies.
Taking the analysis into consideration, the Directors are satisfied that the
Group has the necessary resources to continue in operational existence for a
period of at least 12 months from the date of this report. Accordingly, they
continue to adopt the going concern basis in preparing the condensed
consolidated interim financial statements.
3 Segmental analysis
IFRS 8 Operating Segments requires operating segments to be identified on the
basis of internal reports about components of the Group that are regularly
reviewed by the Board of Directors to allocate resources to the segments and
to assess their performance.
The Group is managed on the basis of five broad business units:
• India (CPP India and Globiva);
• Turkey;
• Blink;
• Central Functions - central cost base required to provide expertise and
operate a listed group. Central Functions is stated after the recharge of
certain central costs that are appropriate to transfer to the relevant
geographies for statutory purposes; and
• Legacy (UK Legacy and UK MGA)
Certain exceptional items recognised within the Central Functions business
unit, have been reclassified to Legacy, where they relate to costs specific to
the closure of the Legacy business and decommissioning of the Group's legacy
IT systems. In June 2024, Italy, Spain and Portugal were reclassified as
discontinued, having previously been part of the Legacy segment; accordingly,
the interim comparatives have been restated.
Segment revenue and performance for the current and comparative periods are
presented below:
India Turkey Central Functions Legacy Total
Blink
Six months ended 30 June 2024 (Unaudited) £'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Revenue - external sales 84,516 3,178 505 - 914 89,113
Cost of sales (75,062) (1,667) (88) (190) (77,007)
-
Gross profit 9,454 1,511 417 - 724 12,106
Administrative expenses excluding depreciation, amortisation, and exceptional (5,143) (841) (1,419) (2,369) (1,208) (10,980)
items
EBITDA 4,311 670 (484) 1,126
(1,002) (2,369)
Depreciation and amortisation (1,403) (76) (59) (96) (1) (1,635)
Exceptional items (note 4) - - (44) (236) (217) (497)
Operating (loss)/profit 2,908 594 (1,105) (2,701) (702) (1,006)
Investment revenues 494
Finance costs (222)
Loss before taxation (734)
Taxation (1,256)
Loss for the period from continuing operations (1,990)
Discontinued operations
Profit for the period from discontinued operations
Loss for the period
1,804
(186)
India Turkey Legacy Total
Blink Central Functions
Six months ended 30 June 2023 (Restated*) (Unaudited) £'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Revenue - external sales 85,224 1,413 393 - 3,606 90,636
Cost of sales (76,167) (612) (39) (727) (77,545)
-
Gross profit 9,057 801 354 - 2,879 13,091
Administrative expenses excluding depreciation, amortisation, and exceptional (4,817) (525) (967) (2,234) (2,410) (10,953)
items
EBITDA 4,240 276 469 2,138
(613) (2,234)
Depreciation and amortisation (664) (56) (57) (126) (57) (960)
Exceptional items (note 4) - (210) - (416) (3,823) (4,449)
Operating (loss)/profit (3,271)
3,576 10 (670) (2,776) (3,411)
Investment revenues 429
Finance costs (185)
Loss before taxation (3,027)
Taxation (1,346)
Loss for the period from continuing operations (4,373)
Discontinued operations
Loss for the period from discontinued operations (698)
Loss for the period (5,071)
* Restated to reflect Italy, Spain and Portugal as discontinued operations.
See note 2.
India Turkey Total
Central Functions Legacy
Blink
Year ended 31 December 2023 (Restated)* (Audited) £'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Revenue - external sales 175,519 4,675 187,970
816 - 6,960
Cost of sales (157,118) (1,834) (79) - (1,490) (160,521)
Gross profit 18,401 2,841 27,449
737 - 5,470
Administrative expenses excluding depreciation, amortisation, and exceptional (10,353) (1,689) (2,529) (4,673) (4,675) (23,919)
items
EBITDA 8,048 1,152 (1,792) (4,673) 795 3,530
Depreciation and amortisation (1,851) (139) (162) (255) (177) (2,584)
Exceptional items (note 4) - (223) - (1,142) (4,614) (5,979)
Operating (loss)/profit 6,197 790 (1,954) (6,070) (3,996) (5,033)
Investment revenues 749
Finance costs (472)
Loss before taxation (4,756)
Taxation (1,869)
Loss for the period from continuing operations (6,625)
Discontinued operations
Loss for the period from discontinued operations (1,474)
Loss for the period (8,099)
* Restated to reflect Italy, Spain and Portugal as discontinued operations.
See note 2.
Segmental assets
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
India 31,977 32,513 36,677
Turkey 2,750 1,570 2,293
Blink 928 503 873
Central Functions 1,831 2,008 958
Legacy 3,854 11,741 9,567
Total segment assets 41,340 48,335 50,368
Unallocated assets 1,221 3,101 1,206
Assets classified as held for sale - - 2,631
Consolidated total assets 42,561 51,436 54,205
Goodwill, deferred tax assets, and the equity investment (classified as held
for sale at 31 December 2023) are not allocated to segments. The Legacy asset
balance includes £3,349,000 at 30 June 2023 and £2,469,000 at 31 December
2023 of assets held in Italy, Spain and Portugal.
Capital expenditure
Other intangible assets
6 months ended 30 June 2024 6 months ended 30 June 2023 Year ended
31 December 2023
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Continuing operations
India 1,028 1,368 2,970
Turkey 5 14 14
Blink 203 52 251
Central Functions 46 31 138
Legacy - 178 178
Total additions 1,282 1,643 3,551
In the period to 30 June 2024 £1,231,000 (30 June 2023: £1,419,000, 31
December 2023: £3,221,000) of the total other intangible asset additions
related to internally generated software assets. These reflect the
capitalisation of staff and contractor costs in IT development projects. The
final phase of the India IT platform was successfully delivered and fully
deployed in May 2024.
Information about major customers
Revenue from customers of one business partner in our India segment
represented approximately £64,725,000 (H1 2023: £65,389,000; year ended 31
December 2023: £134,637,000) of the Group's total revenue.
4 Exceptional items
6 months ended 30 June 2024 6 months ended 30 June 2023 (Restated*) (Unaudited) Year ended 31 December 2023 (Restated*) (Audited)
(Unaudited)
Core £'000 Legacy £'000 Total £'000 Core £'000 Legacy £'000 Total £'000 Core £'000 Legacy £'000 Total £'000
Continuing operations
Restructuring and closure costs 67 308 375 271 497 768 299 1,197 1,496
Onerous contracts (91) (91) - 3,148 3,148 - 3,239 3,239
DBP charges 213 - 213 355 - 355 1,066 - 1,066
IT asset impairment - - - - 178 178 - 178 178
Exceptional charge included in operating profit 280 217 497 626 3,823 4,449 1,365 4,614 5,979
Tax on exceptional items - - - (53) - (53) (56) - (56)
Total exceptional charge after tax for continuing operations 280 217 497 573 3,823 4,396 1,309 4,614 5,923
Discontinued operations
Exceptional (gain)/charge from discontinued operations net of tax - (1,877) (1,877) - 1,179 1,179 - 2,240 2,240
Total exceptional (gain)/charge after tax 280 (1,660) (1,380) 573 5,002 5,575 1,309 6,854 8,163
* Restated to reflect Italy, Spain and Portugal as discontinued operations.
See note 2.
Total exceptional costs of £497,000 from continuing operations comprises:
· Restructuring and closure costs of £375,000 (H1 2023 restated:
£768,000) which primarily relate to Legacy closure activities. Redundancy and
associated costs have been recognised in UK Legacy and Central Functions.
Restructuring costs include necessary retention provisions as part of the
closure process.
· Onerous contract provision release of £91,000 (H1 2023 restated:
£3,148,000 charge) is based on the latest estimates for the Legacy business.
· The Deferred Bonus Plan (DBP) charges of £213,000 (H1 2023:
£355,000) relates to a share-based payment retention plan put in place to
retain key EMC colleagues for the duration of the CMP. The DBP charges will
cease on 31 December 2024.
5 Taxation
The tax charge is calculated by aggregating the tax arising in each
jurisdiction based on estimated profits chargeable to corporation tax and
withholding taxes arising in H1 2024 at the local statutory rate of tax. This
has led to a tax charge on continuing operations of £1,256,000 (H1 2023
restated: £1,346,000; year ended 31 December 2023 restated: £1,869,000).
These tax charges result in an effective tax rate (ETR) for continuing
operations for the six months to 30 June 2024 of negative 171% (H1 2023
restated: negative 44%; year ended 31 December 2023 restated: negative 39%).
The ETR is reflective of the tax charges in our profitable markets in India
and Turkey, which includes withholding taxes applied to funds repatriated from
these operations which further increases the ETR. This is against losses in
our Legacy Operations, Central Functions and Blink, which as yet is unable to
recognise any tax relief against its losses. As Blink moves to profitability
and the central costs reduce, this is expected to improve the ETR in the
medium term. The ETR deterioration since H1 2023 reflects increased investment
in Blink.
6 Discontinued operations
On 14 June 2024, the Group completed the sale of its 100% shareholding in CPP
Italy SRL for a cash consideration of £434,000 (€512,000). Additionally, in
line with IFRS 5 Non-current assets held for sale and discontinued operation,
as at 30 June 2024, Spain and Portugal have met our accounting policy criteria
to be classified as abandoned.
Therefore, these operations have been presented as discontinued.
Profit from discontinued operations comprises the following:
Six months ended 30 June 2024 Italy Spain Total
(Unaudited) £'000 £'000 £'000
Revenue 687 53 740
Cost of sales (309) (2) (311)
Gross profit 378 51 429
Administrative expenses (317) (647) (964)
Operating (loss)/profit 61 (596) (535)
Analysed as:
EBITDA 98 (131) (33)
Depreciation and amortisation (37) - (37)
Exceptional costs - (465) (465)
Finance costs (1) (2) (3)
Other gains and losses - 1,959 1,959
Profit before taxation 60 1,361 1,421
Taxation - - -
Profit after taxation 60 1,361 1,421
Profit on disposal 383 - 383
Total profit 443 1,361 1,804
Portugal had no result for the period.
Six months ended 30 June 2023 Italy Spain Portugal Total
(Unaudited) £'000 £'000 £'000 £'000
Revenue 941 1,822 122 2,885
Cost of sales (412) (514) (60) (986)
Gross profit 529 1,308 62 1,899
Administrative expenses (429) (2,043) (118) (2,590)
Operating (loss)/profit 100 (735) (56) (691)
Analysed as:
EBITDA 156 590 (1) 745
Depreciation and amortisation (56) (58) (3) (117)
Exceptional costs - (1,267) (52) (1,319)
Finance costs (2) (6) - (8)
(Loss)/profit before taxation 98 (741) (56) (699)
Taxation (7) 9 (1) 1
(Loss)/profit after taxation 91 (732) (57) (698)
Year ended 31 December 2023 Italy Spain Portugal Total
(Unaudited) £'000 £'000 £'000 £'000
Revenue 1,806 3,127 133 5,066
Cost of sales (803) (712) (55) (1,570)
Gross profit 1,003 2,415 78 3,496
Administrative expenses (752) (3,999) (114) (4,865)
Operating (loss)/profit 251 (1,584) (36) (1,369)
Analysed as:
EBITDA 317 952 (16) 1,253
Depreciation and amortisation (66) (116) (4) (186)
Exceptional costs - (2,420) (16) (2,436)
Finance costs (11) (3) - (14)
(Loss)/profit before taxation 240 (1,587) (36) (1,383)
Taxation (45) (46) - (91)
(Loss)/profit after taxation 195 (1,633) (36) (1,474)
The Group has recognised a profit on the disposal of Italy in the current
period:
Total
£'000
(Unaudited)
Proceeds 434
Net assets sold (5)
Costs associated with disposal (72)
Currency translation differences on disposal 26
Profit on disposal 383
On 15 February 2024, the Group completed its disposal of its equity investment
in KYND Limited ("KYND") to V Acquisition Limited for a cash consideration of
£2,651,000 and costs to sell of £20,000. This was classified as held for
sale as at 31 December 2023 and had been revalued through 'other comprehensive
income' to the fair value being sales price less costs to sell. As a result,
there has been no gain or loss on disposal in H1 2024.
7 (Loss)/earnings per share
Basic and diluted (loss)/earnings per share (EPS) has been calculated in
accordance with IAS 33 Earnings per share. Underlying (loss)/earnings per
share has also been presented to give a better understanding of the
performance of the business. In accordance with IAS 33, potential ordinary
shares are only considered dilutive when their conversion would decrease the
EPS or increase the loss per share attributable to equity holders.
Continuing operations Discontinued operations Total
Six months ended 30 June 2024 (Unaudited)
(Loss)/earnings £'000 £'000 £'000
(Loss)/earnings for the purposes of basic and diluted loss per share (2,148) 1,804 (344)
Exceptional items (net of tax) 497 (1,877) (1,380)
Loss for the purposes of basic and diluted underlying earnings per share (1,651) (73) (1,724)
Loss attributable to Core and Legacy Core Legacy Continuing operations
£'000 £'000 £'000
Loss for the purposes of basic and diluted loss per share (1,486) (662) (2,148)
Exceptional items (net of tax) 280 217 497
Loss for the purposes of basic and diluted underlying loss per share (1,206) (445) (1,651)
Number of shares Number
(thousands)
Weighted average number of ordinary shares for the purposes of basic and 8,847
diluted loss per share and basic and diluted underlying earnings per share
(Loss)/earnings per share Continuing operations Discontinued operations Total
pence pence Pence
Basic and diluted (loss)/earnings per share (24.28) 20.39 (3.89)
Basic and diluted underlying loss per share (18.66) (0.83) (19.49)
Core Legacy Continuing operations
pence pence Pence
Basic and diluted loss per share (16.80) (7.48) (24.28)
Basic and diluted underlying loss per share (13.63) (5.03) (18.66)
Continuing operations Discontinued operations Total
Six months ended 30 June 2023 (Restated*) (Unaudited)
Earnings/(loss) £'000 £'000 £'000
Loss for the purposes of basic and diluted (loss)/earnings per share (4,605) (698) (5,303)
Exceptional items (net of tax) 4,396 1,179 5,575
Earnings/(loss) for the purposes of underlying basic and diluted (209) 481 272
earnings/(loss) per share
(Loss)/earnings attributable to Core and Legacy Core Legacy Continuing operations
£'000 £'000 £'000
(Loss)/earnings for the purposes of basic and diluted (loss)/earnings per (1,236) (3,369) (4,605)
share
Exceptional items (net of tax) 573 3,823 4,396
(Loss)/earnings for the purposes of basic and diluted underlying (663) 454 (209)
(loss)/earnings per share
Number of shares Number
(thousands)
Weighted average number of ordinary shares for the purposes of basic and 8,846
diluted loss per share and basic and diluted underlying earnings/(loss) per
share
Earnings/(loss) per share Continuing operations Discontinued operations Total
Pence pence pence
Basic and diluted loss per share (52.07) (7.88) (59.95)
Basic and diluted underlying earnings/(loss) per share (2.37) 5.44 3.07
Core Legacy Continuing operations
Pence pence pence
Basic and diluted loss per share (13.96) (38.11) (52.07)
Basic underlying (loss)/earnings per share (7.48) 5.11 (2.37)
* Restated to reflect Italy, Spain and Portugal as discontinued operations.
See note 2.
Continuing operations Discontinued operations Total
Year ended 31 December 2023 (Restated*) (Unaudited)
Earnings/(loss) £'000 £'000 £'000
Loss for the purposes of basic and diluted (loss)/earnings per share (7,181) (1,474) (8,655)
Exceptional items (net of tax) 5,923 2,240 8,163
(Loss)/earnings for the purposes of basic and diluted underlying (1,258) 766 (492)
(loss)/earnings per share
(Loss)/earnings attributable to Core and Legacy Core Legacy Continuing operations
£'000 £'000 £'000
Loss for the purposes of basic and diluted loss per share (3,304) (3,877) (7,181)
Exceptional items (net of tax) 1,309 4,614 5,923
(Loss)/earnings for the purposes of basic and diluted underlying (1,995) 737 (1,258)
(loss)/earnings per share
Number of shares Number
(thousands)
Weighted average number of ordinary shares for the purposes of basic and 8,846
diluted loss per share and basic and diluted underlying (loss)/earnings per
share
(Loss)/earnings per share Continuing operations Discontinued operations Total
pence Pence pence
Basic and diluted loss per share (81.18) (16.66) (97.84)
Basic and diluted underlying (loss)/earnings per share (14.22) 8.66 (5.56)
Core Legacy Continuing operations
pence Pence pence
Basic and diluted loss per share (37.35) (43.83) (81.18)
Basic and diluted underlying (loss)/earnings per share (22.55) 8.33 (14.22)
* Restated to reflect Italy, Spain and Portugal as discontinued operations.
See note 2.
8 Provisions
30 June 2024 30 June 2023 31 December 2023
Note
£'000 £'000 £'000
At 1 3,465 369 369
January
(Released)/charged to the income (91) 3,313 3,388
statement 4
Utilised in the period (855) (50) (292)
Interest unwind 68 - -
Total 2,587 3,632 3,465
At the balance sheet date there are provisions for onerous contracts due to
the close down of the Legacy business. The provisions are expected to be
settled as follows:
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
Within one year 1,576 947 1,877
Outside of one year 1,011 2,685 1,588
Total 2,587 3,632 3,465
9 Share capital
Share capital at 30 June 2024 is £24,257,000 (30 June 2023: £24,256,000; 31
December 2023: £24,257,000).
The total number of ordinary shares in issue at 30 June 2024 is 8,847,145 of
which 8,842,145 are fully paid and 5,000 are partly paid.
10 Reconciliation of operating cash flows
6 months ended 30 June 2024 6 months ended Year ended
30 June 2023 31 December 2023
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Loss for the period (186) (5,071) (8,099)
Adjustments for:
Depreciation and amortisation 1,672 1,075 2,770
Share-based payment charge 354 355 1,134
Impairment loss on intangible assets - 178 178
Impairment loss on property, plant and equipment - - 40
Loss on disposal of intangible assets - - 31
Loss on disposal of property, plant and equipment - 2 24
Profit on disposal of discontinued operations (383) - -
Other gains and losses (1,959) - -
Effects of hyperinflation (207) (61) (82)
Investment revenues (494) (429) (749)
Finance costs 225 193 486
Income tax charge 1,256 1,345 1,960
Operating cash flows before movement in working capital 278 (2,413) (2,307)
Decrease in inventories 5 68 78
Decrease/(increase) in contract assets 259 (1,361) (1,259)
(Increase)/decrease in receivables (856) 3,231 4,270
(Decrease)/increase in payables (4,881) (5,685) 832
(Decrease)/increase in contract liabilities (1,018) 1,196 833
Decrease in insurance liabilities (77) (7) (6)
(Decrease)/increase in provisions (946) 3,263 3,096
Cash (used in)/from operations (7,236) (1,708) 5,537
Income taxes paid (1,405) (721) (1,927)
Net cash (used in)/from operating activities (8,641) (2,429) 3,610
11 Related party transactions
Transactions with associated undertakings
Prior to the disposal of the Group's interest in KYND (see note 6), the Group
incurred fees of £1,000 plus VAT (30 June 2023: £9,000 plus VAT; and year
ended 31 December 2023: £10,000 plus VAT) for services rendered from KYND,
which was payable under 14 day credit terms.
Transactions with related parties
There have been no related party transactions in the current period.
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the
Group, is set out below:
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
(Unaudited) (Unaudited) (Audited)
Short-term employee benefits 613 692 1,412
Post-employment benefits 11 10 20
Termination benefits - - -
Share-based payments 176 187 593
800 889 2,025
12 Events after the balance sheet date
On 9 September 2024, the Group completed its exit from Globiva for total cash
consideration of £3.8 million (415.5 million rupees). The Group had
originally agreed to a phased divestment over three-years for aggregate
consideration of approximately £4.7 million (515.0 million rupees) which was
subject to certain performance criteria and a maximum adjustment of plus or
minus 10%.
Globiva's earnings outlook, due to a general slowdown in the Indian technology
market, has deteriorated. At the request of the Globiva Founders the Group
agreed to accelerate the disposal of its interest in Globiva, previously
scheduled to complete in Q1 2027, and in accordance with the original
agreement to apply the 10% reduction to price.
The revised consideration reflects the lower-end parameters of the original
agreement and is net of the benefit accruing (a net present value adjustment)
to the Group of receiving the cash consideration in full on completion rather
than over a three-year period.
Globiva has not been treated as a discontinued operation at the balance sheet
date. Excluding Globiva's results, the Group would have reported revenue of
£81.0 million and EBITDA of £0.2 million from its continuing operations.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR QKABBFBKDKCDRecent news on CPPGroup
See all newsREG - CPPGroup Plc - Block listing Interim Review
AnnouncementREG - CPPGroup Plc - Posting of Annual Report and Notice of AGM
AnnouncementREG - CPPGroup Plc - FULL YEAR RESULTS FOR YEAR ENDED 31 DECEMBER 2024
AnnouncementREG - CPPGroup Plc - Holding(s) in Company
AnnouncementREG - CPPGroup Plc - Trading Update for Financial Year 2024
Announcement