REG - Ebiquity PLC - Interim Results <Origin Href="QuoteRef">EBQ.L</Origin> - Part 2
27/01/2016 07:10
- Part 2: For the preceding part double click ID:nRSa0833Na
Unallocated costs comprise central costs that are not considered attributable
to the segments.
3. Highlighted items
Highlighted items comprise items which are highlighted in the income statement
because separate disclosure is considered relevant in understanding the
underlying performance of the business.
Unaudited 6 months ended31 October 2015 Unaudited 6 months ended31 October 2014 Audited12 months ended30 April 2015
£'000s £'000s £'000s
Recurring:
Share option charge 294 642 1,355
Amortisation of purchased intangibles 1,019 999 2,030
1,313 1,641 3,385
Non-recurring:
Acquisition and integration costs 56 1,029 1,730
Refinancing costs - 338 404
Property costs - - 394
56 1,367 2,528
Total highlighted items before tax 1,369 3,008 5,913
Deferred tax on tax losses - - -
Taxation credit (311) (467) (1,155)
Total highlighted items after tax 1,058 2,541 4,758
Share option charges include the non-cash IFRS 2 charge (£132,000) along with
the cash element in relation to the exercising of share options (£162,000).
Amortisation of purchased intangibles of £1,019,000 relates to acquisitions
made in prior years.
Acquisition costs represent professional fees incurred in relation to
acquisitions (£172,000) and adjustments to the fair value of deferred
consideration (a credit of £504,000; 2014: £545,000 debit) resulting primarily
from a downward revision of deferred consideration in relation to one
acquisition and discounting all deferred consideration balances to net present
value, partially offset by the related foreign exchange impacts (£42,000).
Integration costs include certain one-off costs incurred whilst integrating
the acquisitions made in the prior financial years including severance costs
arising from the restructure of senior management following these acquisitions
(£150,000). Also included are fees in relation to the appointment and ongoing
succession planning in relation to the new Group CEO (£193,000).
4. Dividends
Unaudited 6 months ended31 October 2015 Unaudited 6 months ended31 October 2014 Audited12 months ended30 April 2015
£'000s £'000s £'000s
Dividends to equity holders of the parent
Ordinary final dividend for the year ended 30 April 2015 of 0.4p per share 291 - -
Total 291 - -
No interim dividend is being proposed (2014: nil).
5. Earnings per share
The calculation of basic and diluted earnings per share is based on the
following data:
Unaudited6 months ended 31 October 2015 Unaudited6 months ended 31 October 2014 Audited12 months ended 30 April 2015
£'000s £'000s £'000s
Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent 1,631 (206) 3,623
Adjustments:
Impact of highlighted items (net of tax)1 1,047 2,522 4,723
Earnings for the purpose of underlying earnings per share 2,678 2,316 8,346
Number of shares:
Weighted average number of shares during the period
- Basic 76,914,760 75,491,111 75,820,669
-Dilutive effect of share options 2,025,736 1,750,017 2,084,430
78,940,496 77,241,128 77,905,099
Basic earnings per share 2.12p (0.27)p 4.78p
Diluted earnings per share 2.07p (0.27)p 4.65p
Underlying basic earnings per share 3.48p 3.07p 11.01p
Underlying diluted earnings per share 3.39p 3.00p 10.71p
1 Highlighted items (see note 3), stated net of their total tax and
non-controlling interest impact.
It is assumed that all contingent deferred consideration will be settled in
cash and therefore there is no dilutive effect.
6. Goodwill
£'000
Cost and net book value
At 1 May 2014 55,121
Foreign exchange differences 297
At 31 October 2014 55,418
Adjustments in respect of a pre-acquisition period 3
Acquisitions 2,787
Foreign exchange differences (112)
At 30 April 2015 58,096
Adjustments in respect of a pre-acquisition period (181)
Foreign exchange differences (500)
At 31 October 2015 57,415
7. Other intangible assets
Capitalised development costs Computer software Purchased intangible assets Total intangible assets
£'000s £'000s £'000s £'000s
Cost
At 1 May 2015 2,997 2,194 23,259 28,450
Additions 503 148 - 651
Foreign exchange (27) (1) (232) (260)
At 31 October 2015 3,473 2,341 23,027 28,841
Amortisation
At 1 May 2015 (1,136) (1,120) (11,016) (13,272)
Charge for the period (133) (137) (1,019) (1,289)
Foreign exchange - 1 82 83
At 31 October 2015 (1,269) (1,256) (11,953) (14,478)
Net book value
At 31 October 2015 2,204 1,085 11,074 14,363
At 31 October 2014 1,245 1,030 11,756 14,031
At 30 April 2015 1,861 1,074 12,243 15,178
15,178
The capitalised development costs are internally generated.
Purchased intangible assets consist principally of customer relationships with
a typical useful life of 10 years.
Amortisation is charged within administrative expenses so as to write off the
cost of the intangible assets over their estimated useful lives. The
amortisation of purchased intangible assets is included as a highlighted
administrative expense.
8. Cash, cash equivalents and bank overdrafts
Cash, cash equivalents and bank overdrafts include the following for the
purposes of the cash flow statement:
31 October 2015 31 October 2014 30 April 2015
£'000 £'000 £'000
Cash and cash equivalents 6,808 5,010 9,295
Bank overdraft (note 9) (1,978) - (1,411)
Cash, cash equivalents and bank overdrafts 4,830 5,010 7,884
9. Financial liabilities
31 October 2015 31 October 2014 30 April 2015
£'000 £'000 £'000
Current
Bank overdraft 1,978 - 1,411
Bank borrowings 2,410 2,410 2,411
Finance lease liabilities 4 4 4
Derivative financial instrument - interest rate swaps - 12 -
Contingent deferred consideration 3,044 2,441 4,935
7,436 4,867 8,761
Non-current
Bank borrowings 33,251 32,679 31,880
Finance lease liabilities 8 17 13
Contingent deferred consideration 1,381 3,174 4,064
34,640 35,870 35,957
Total financial liabilities 42,076 40,737 44,718
All bank borrowings are held jointly with Barclays and Royal Bank of Scotland
('RBS'). The committed facility, totalling £40,000,000, comprises a term loan
of £10,000,000 (of which £6,875,000 remains outstanding at 31 October 2015
(2014: £9,375,000)), and a revolving credit facility ('RCF') of £30,000,000
(of which £29,026,000 was drawn down at 31 October 2015 (2014: £26,044,000)).
Both the term loan and the RCF have a maturity date of 2 July 2018. The
£10,000,000 term loan is being repaid on a quarterly basis to maturity, and
the drawn RCF and any further drawings under the RCF are repayable on maturity
of the facility. The facility may be used for deferred consideration payments
on past acquisitions, to fund future potential acquisitions, and for general
working capital requirements.
Loan arrangement fees of £240,000 (2014: £330,000) are offset against the term
loan, and are being amortised over the period of the loan.
The facility bears variable interest of LIBOR plus a margin of 2.50%. The
margin rate is able to be lowered each quarter end from April 2015 depending
on the Group's net debt to EBITDA ratio.
The undrawn amount of the revolving credit facility is liable to a fee of 40%
of the prevailing margin. The Group may elect to prepay all or part of the
outstanding loan subject to a break fee, by giving 5 business days' notice.
All amounts owing to the banks are guaranteed by way of fixed and floating
charges over the current and future assets of the Group. As such, a composite
guarantee has been given by all significant subsidiary companies in the UK,
USA and Germany.
Contingent deferred consideration represents additional amounts that are
expected to be payable for acquisitions made by the Group and is held at fair
value at the Statement of Financial Position date. All amounts are expected to
be fully paid by August 2017.
10. Cash generated from operations
Unaudited6 months ended 31 October 2015 Unaudited6 months ended 31 October 2014 Audited12 months ended 30 April 2015
£'000 £'000 £'000
Profit before taxation 2,494 577 4,657
Adjustments for:
Depreciation 561 657 1,249
Amortisation (note 7) 1,289 1,225 2,515
Profit on disposal - (1) (1)
Loan fees written off - 131 131
Interest rate swap closure - 29 29
Unrealised foreign exchange loss/(gain) 384 (19) 208
Share option charges (note 3) 132 642 1,215
Finance income (10) (2) (8)
Finance expenses 608 571 1,179
Share of profit of associates (4) (8) (12)
Contingent deferred consideration revaluations (462) 545 548
4,992 4,347 11,710
Decrease/(increase) in trade and other receivables 945 3,216 (2,270)
Decrease in trade and other payables (3,314) (5,168) (1,040)
Movement in provisions (37) (415) (473)
Cash generated from operations 2,586 1,980 7,927
11. Events after the reporting period
Subsequent to the period end, the Group acquired the remaining 35% in its
subsidiary undertaking, Fairbrother Iberica and Partners SL, from the minority
shareholder for cash consideration of E60,000 (£44,000). Subsequently
Fairbrother Iberica and Partners SL was liquidated and its business and assets
were transferred to Media Value SL.
INDEPENDENT REVIEW REPORT TO EBIQUITY PLC
Report on the consolidated interim results
Our conclusion
We have reviewed Ebiquity plc's consolidated interim results (the "interim
financial statements") in the interim results of Ebiquity plc for the 6 month
period ended 31 October 2015. Based on our review, nothing has come to our
attention that causes us to believe that the interim financial statements are
not prepared, in all material respects, in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted by the
European Union and the AIM Rules for Companies.
What we have reviewed
The interim financial statements comprise:
· the consolidated statement of financial position as at 31 October
2015;
· the consolidated income statement and consolidated statement of
comprehensive income for the period then ended;
· the consolidated statement of cash flows for the period then ended;
· the consolidated statement of changes in equity for the period then
ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the interim results have been
prepared in accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the AIM Rules for
Companies.
As disclosed in note 1 to the interim financial statements, the financial
reporting framework that has been applied in the preparation of the full
annual financial statements of the Group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The interim results, including the interim financial statements, is the
responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the interim results in accordance with the AIM Rules
for Companies which require that the financial information must be presented
and prepared in a form consistent with that which will be adopted in the
company's annual financial statements.
Our responsibility is to express a conclusion on the interim financial
statements in the interim results based on our review. This report, including
the conclusion, has been prepared for and only for the company for the purpose
of complying with the AIM Rules for Companies and for no other purpose. We do
not, in giving this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in
writing.
What a review of interim financial statements involves
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and, consequently,
does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information contained in the interim results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
26 January 2016
a) The maintenance and integrity of the Ebiquity plc website is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred to the interim
financial statements since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
This information is provided by RNS
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