REG - Mission Group PLC - FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024
25/03/2025 07:00
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RNS Number : 9501B Mission Group PLC (The) 25 March 2025
THE MISSION GROUP plc
("MISSION", "the Group")
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024
Successful completion of Value Restoration Plan drives profitable earnings and
margin recovery
Strong platform for growth in 2025
25 March 2025
The MISSION Group plc (AIM:TMG), the Brand Performance Group, comprising of
digital marketing and specialist communications Agencies, announces its final
results for the year ended 31 December 2024 ("FY2024" or "the year").
FINANCIAL HIGHLIGHTS
Year ended 31 December, 2024 2023 change
£m £m
Total operations
· REVENUE (OPERATING INCOME)* 87.7 86.6 1.3%
· HEADLINE OPERATING PROFIT* 9.1 5.0 80%
· REPORTED PROFIT BEFORE TAX* 2.9 (12.0) +14.9
Continuing operations**
· REVENUE (OPERATING INCOME)* 75.9 74.3 2.1%
· HEADLINE OPERATING PROFIT* 7.9 6.5 20%
· HEADLINE PROFIT MARGINS 10.4% 8.8% 1.6pts
· HEADLINE PROFIT BEFORE TAX* 5.1 4.2 19%
· REPORTED PROFIT/(LOSS) BEFORE TAX 1.9 (10.7) +12.7
· HEADLINE EARNINGS PER SHARE* 3.8p 3.3p +0.5p
· HEADLINE DILUTED EARNINGS PER SHARE* 3.8p 3.3p +0.5p
· NET BANK DEBT 9.5 15.4 +5.9
*Headline results are calculated before acquisition and disposal adjustments,
start-up costs, goodwill and business impairment, bank refinancing, equity
placing and restructuring costs (as set out in Note 3).
** Continuing operations excludes the disposal of April Six on 31 December
2024.
STRATEGIC AND OPERATIONAL HIGHLIGHTS
Successful completion of Group's Value Restoration Plan ("VRP") provides
strong platform for profitable growth in 2025.
The successful execution of the Group's VRP, as originally announced in
December 2023 and including the disposal of April Six and Pathfindr, has
strengthened the business for the future, ensuring MISSION moves forward as a
leaner and less complex business with a significantly stronger balance sheet.
Key areas of progress include:
· Delivered total Headline Operating Profit of £9.1m (2023: £5.0m), in line
with expectations.
· Improved profitability with Headline Operating Profit from continuing
operations up 20% to £7.9m (2023: £6.5m).
· A significant improvement in Headline operating margin from 8.8% in 2023 to
10.4% in 2024.
· Simplified business structure with the disposal of non-core Agencies April Six
for a total gross consideration of up to £17.4m with proceeds used to reduce
debt.
· Significantly strengthened balance sheet at 31 December 2024 following April
Six disposal with improvement in covenant package.
· Net bank debt of £9.5m (2023: £15.4m)
· Net total debt*** of £14.2m (2023: £25.2m)
· Post period end agreed a new, three year revolving credit facility with
long-term lender NatWest providing increased flexibility.
· Publication of Capital Allocation Policy
· Commitment to returning up to £1.5m through an on-market Share Buyback.
· Share Buyback programme began on 2 January 2025 and £0.36m has been returned
to date.
*** Net total debt includes deferred acquisition consideration and for 2023
HMRC time to pay obligations
Resilient trading performance across all segments, despite challenging and
uncertain market conditions, resulted in FY2024 Headline revenue (operating
income) on continuing operations up 2.1% to £75.9m (FY2023: £74.3m)
· Strong and enduring Client retention across Agencies with strong
focus on Client service supported by the Group's Agency-driven culture - 56%
revenue currently comes from Clients who have been with the Group for over 5
years
· Strategic new Client wins over the year included Mastercard, BNP
Paribas, FatFace, GoHenry, Okta, Popeyes, England Cricket Board, Southampton
FC, Guinness Homes, Fonterra, Neuro UK and McCarthy Stone.
Current trading and outlook remain in line with expectations
· Trading in the new financial year has started well and is in line
with expectations.
Mark Lund, Interim Chief Executive of MISSION, commented: "2024 represented
solid progress and there is a lot for our teams to feel proud about. Crucially
we have driven a necessary and ambitious Value Restoration Plan which has seen
us review all areas of the business with a commitment to restoring value to
shareholders. In addition, we have continued to deliver excellent work for our
Clients, underpinning a significant improvement in earnings and margin growth
on the prior year, despite a challenging and often uncertain trading
environment.
"Trading in 2025 has started in line with our expectations. We remain cautious
given the wider macro-economic uncertainty but I'm excited to see further
progress against a number of initiatives already underway in 2025. I firmly
believe these actions will further enhance the quality of the work we do and
the value we can bring to our Clients and look forward to seeing their impact
as the year develops."
Investor Presentation via Investor Meet Company
Interim Chief Executive Office, Mark Lund and Chief Financial Officer, Giles
Lee will provide a live presentation relating to the Group's Final Results for
the year ended 31 December 2024, via the Investor Meet Company platform on
25th March 2025 at 16:00 GMT.
Investors can sign up to Investor Meet Company for free and add to meet THE
MISSION GROUP PLC via:
https://www.investormeetcompany.com/the-mission-group-plc/register-investor
(https://www.investormeetcompany.com/the-mission-group-plc/register-investor)
ENQUIRIES
Mark Lund, Interim Chief Executive Officer
Giles Lee, Chief Financial Officer
The MISSION Group plc 020 7462 1415
Simon Bridges/Andrew Potts/Harry Rees
Canaccord Genuity Limited (Nominated Adviser and Broker) 020 7523 8000
Peter Tracey
Blackdown Partners (Financial Adviser) 020 3807 8484
Kate Hoare / India Spencer
HOUSTON (Financial PR and Investor Relations) 0204 529 0549
NOTES TO EDITORS
The MISSION Group Plc. is The Brand Performance Group.
Delivering measurable, results-driven campaigns as the preferred creative
partner for real business growth. We offer top-tier agencies, strategic
specialisms and global reach delivering outstanding performance for brands. We
call it Work That Counts™ www.themission.co.uk
(http://www.themission.co.uk/)
NON-EXECUTIVE CHAIR'S STATEMENT
I am delighted to report that not only have we delivered a resilient trading
performance in 2024 but MISSION has taken great strides to strengthen the
business for the future. I have been impressed by the management team who have
diligently and relentlessly reshaped the business throughout 2024 and in so
doing have maintained revenue growth, improved total headline operating
profits by 80%, increased total reported operating profits by £15m and
significantly reduced our debt. Furthermore, we have created a platform from
which our Agencies will continue to grow.
Revenue and Profit Growth
Once again Client retention and strategic new business wins have underpinned
performance and all credit must go to our Agencies who continue to punch above
their weight by being leaner, more nimble and creatively and commercially
astute to achieve outstanding results for our Clients. Ultimately, our Clients
pay us to help them be more successful and this is at the core of our
thinking.
Debt Reduction
Business growth and Agency realignments have played their part in our strive
to reduce debt. But so too have two strategic divestments of April Six and
Pathfindr, both of which have significantly improved the strength of our
balance sheet.
Our Platform For Growth
Under the stewardship of our interim CEO, Mark Lund, we have successfully
streamlined operations under four key business pillars headed by our lead
Agencies which has been warmly received within the Group. Mark's commitment to
performance and growth is helping those leaders develop at pace and his input
and guidance has been welcomed by all. Having had a successful career in
advertising and marketing, during which he co-founded leading independent
Agency DLKW (now Mullen Lowe) and most recently was President of McCann
Worldgroup UK & Europe, Mark stepped into the role following James
Clifton's decision to pursue a new opportunity. The Board would like to thank
James for his valuable contribution to the development of MISSION during his
tenure. We all wish him every success in his new venture.
Capital Allocation Policy and Dividend
Having delivered annualised cost savings and profit improvements alongside a
material reduction in the Group's debt burden through business disposals, on
the 2 January 2025 the Board outlined the Group's Capital Allocation policy in
order to provide shareholders with an update on the Board's intentions for
future uses of cash generated from operations.
As part of this policy the Board has made a commitment that surplus free
cashflow should be returned to shareholders either by share buybacks and/or
dividends (ordinary and/or special).
Share buybacks will be undertaken when they are at or below the Board's view
of the intrinsic value of the Company. Shares acquired through the share
buyback will be held in treasury and their use reviewed periodically,
including to offset the dilution effect from employee share option exercises
and share based deferred acquisition consideration payments.
On 2 January 2025 the Board confirmed that it intended to return up to £1.5m
to Shareholders via an on-market share buyback which will be undertaken when
the share price is at or below the Board's view of the intrinsic value of the
Company. To date £364,000 has been returned to shareholders, reducing the
Company's shares in issue by 1.3%.
As previously announced as part of our Capital Allocation policy, the Board
expects to return to paying ordinary dividends in 2026 and will maintain
dividend cover between 3x to 4x headline earnings per share.
Outlook
We are mindful of the overall macro environment and uncertainties that this
can bring to our markets but it is worth reminding ourselves that MISSION has
shown revenue growth year on year and now with our streamlined operations and
profit focused mindset we see a very bright future for the business.
Our people make us what we are and all around the Group I see dedicated,
fulgurant colleagues all working to be their best and deliver outstanding
results for our Clients, shareholders and community. I am proud to Chair the
MISSION Group.
David Morgan
Non-Executive Chair
INTERIM CHIEF EXECUTIVE'S REVIEW
2024 represented solid progress and there is a lot for our teams to feel proud
about. Crucially we have driven a necessary and ambitious Value Restoration
Plan which has seen us review all areas of the business with a commitment to
restoring value to shareholders. In addition, we have continued to deliver
excellent work for our Clients, underpinning a significant improvement in
earnings and margin growth on the prior year, despite a challenging trading
environment.
The ongoing macro-economic and political uncertainty throughout 2024 led to
Client caution and the significant drop in business confidence following the
Chancellor's statement in November compounded this uncertainty further.
Against this backdrop the entrepreneurial and creative culture of our Agencies
and the breadth of capabilities they can draw on across the Group has been
critical in our ability to grow existing relationships and compete in tough
markets to secure new Client wins.
Whilst the successful divestments of April Six and Pathfindr have ensured we
have a much stronger balance sheet; it has also provided us with an
opportunity to reassess the Group's business model as we focus on creating a
simpler and more accountable MISSION.
We enter 2025 with a simpler, stronger and more focussed Group. Our business
model will see us focus on four key Agency families, centred around each of
our largest Agencies Bray Leino (Business & Corporate), krow (Consumer),
Mongoose (Sports & Entertainment) and ThinkBDW (Property). Through the
work done as part of the Value Restoration Plan to reduce our cost base, we
move forward with a leaner and lighter commercial centre with our full focus
on supporting sustainable, profitable growth.
I am also very excited by our continuing investment in MISSION's shared AI
systems that will bring real benefits to all our Agencies in 2025 both
operationally and creatively.
Performance Review
MISSION has reported revenue growth from continuing operations of 2.1% to
£75.9m (2023: £74.3m) and total revenue growth of 1.3%. All growth was
organic and underpinned by strong performances across the Group's continuing
business segments, particularly in our Property and Business & Corporate
segments.
Additional Client wins secured across the business throughout the period
include Okta, Popeyes, FatFace, GoHenry, Mastercard, BNP Paribas, England
Cricket Board, Guinness Homes, Fonterra and McCarthy Stone. The second half of
the financial year also saw the Group awarded a prestigious and significant
Events assignment for the UK Pavilion at Expo 2025 in Osaka, Japan. This full
operational services contract comprises over 130 individual events, retail and
hospitality and is being led by Bray Leino Events.
MISSION's global sports Agency, Influence Sports & Media, part of
Mongoose, also won a significant new Client in Saudi Arabia in the second half
of the year and opened a small office in Riyadh to support the Client and will
also leverage its expertise to capitalise on opportunities across the region.
Mongoose has also been appointed as global sponsorship sales Agency for
Formula E and brokered Southampton F.C.'s shirt sponsorship with P&O
Cruises.
The second half of the year also saw the creation of the Group's AI steering
panel, chaired by me. We continue to see multiple examples of AI infused work
being created in our Agencies and as part of our plans to define and hone our
Group AI strategy we have prioritised three key pillars of focus; ensuring AI
literacy in every role to empower and enable everyone with AI learning;
provide specialist centralised AI support and resources to work alongside our
Agencies; and define guidelines to inform AI usage across the Group and ensure
compliance and best practice.
In the new financial year I'm pleased to announce that we have appointed a
Chief Transformation Director to lead this project across the Group. Good
progress has already been achieved in deploying AI tools on the areas which
can make the biggest difference to enhance operational excellence and creative
processes.
Making Positive Change
Following the launch of our Environmental, Social and Governance (ESG)
manifesto 'Making Positive Change' in 2020, we have continued to make progress
against our key commitments throughout 2024. While improved carbon reporting
and increased business activity led to a rise in overall emissions compared to
last year, our total emissions remain significantly lower (29% decrease) than
pre-pandemic levels.
A key focus has been refining our data collection to ensure a more accurate
understanding of our impact. This has highlighted areas for action, such as
energy use and commuting, while also revealing positive trends, including
reductions in waste-related emissions and business road travel. By enhancing
our sustainability initiatives and improving efficiency across operations, we
are committed to driving further progress in the years ahead.
Current Trading and Outlook
Trading in 2025 has started in line with our expectations. We remain cautious
given the wider macro-economic uncertainty and its continued impact on Client
budgets and confidence.
I'm excited to see further progress against a number of initiatives already
underway in 2025 including our investments in AI. I firmly believe these
actions will further enhance the quality of the work we do and the value we
can bring to our Clients and look forward to seeing their impact as the year
develops.
Mark Lund
Interim Group Chief Executive
CHIEF FINANCIAL OFFICER'S REVIEW
In 2024 we were able to complete the turnaround of the business through the
successful delivery of the Value Restoration Plan. The fundamental
concentration on transforming operating margins and reducing debt leverage is
evident in the financial statements as is the underlying resilience of our
core agency portfolio. We start 2025 with a simpler, stronger and more focused
Group.
Total headline operating profits of £9.1m increased by 80% when compared to
the 2023 equivalent. With operating income growing by 1.3% to £87.7m (2023
£86.6m), operating margins also increased significantly from 5.8% in 2023 to
10.3% in 2024.
On a continuing operations basis the financial recovery continues to shine
through, with headline operating profits of £7.9m increasing by 20% on 2023
(£6.5m), operating income growing 2.1% to £75.9m (2023 £74.3m) and
operating margins increasing from 8.8% to 10.4%.
Furthermore, net bank debt leverage at 31 December 2024 improved significantly
to 1.1x (31 December 2023, 2.0x) following a year of tight focus on capital
expenditure and the disposal of April Six Ltd at the end of 2024.
The Value Restoration Plan
In December 2023 the Board announced its Value Restoration Plan ('VRP'): a
plan designed to restore profitability and bank debt leverage to sustainable,
competitive levels in 2024. The plan consisted of two key elements:
1: reducing operating expenditure by £5.0m through annualised cost savings
and efficiency gains.
2: reducing 2023 run-rate net debt leverage through the disposal of non-core
assets.
The VRP has been successfully delivered, evidenced by the much-improved
margins and reduced leverage ratios reported in 2024 compared to 2023.
Following the sale of April Six and the reduction in bank debt, the Group
entered into discussions with Natwest to refinance the existing debt facility.
The Group has now successfully refinanced its debt facility, securing a new
three-year facility including a £15m revolving credit facility, a £5m
accordion option to increase this and a £3m overdraft. Further details of the
new debt facility are set out in Note 15 to the financial statements.
Billings and revenue
Turnover (billings) was 3% lower than the previous year, at £190.3m (2023:
£195.9m), but since billings include pass-through costs (e.g. TV companies'
charges for buying airtime), the Board does not consider turnover to be a key
performance measure for its Agencies. Instead, the Board views operating
income (turnover less third-party costs) as a more meaningful measure of
activity levels. Taken as a whole, the Group's operating income (referred to
as "revenue") from continuing operations for the year increased by 2.1% to
£75.9m (2023: £74.3m).
All revenue growth was organic and reflects a mixed performance across the
continuing business segments. Revenue growth was strong in Business &
Corporate (£0.9m increase in revenue) and also Property (£0.5m increase in
revenue) and in so doing mitigated reduced revenues in Health & Wellness
(£0.4m reduction in revenue).
The Group has reviewed and restructured its operations as part of the Value
Restoration Plan and as a result the Board made the decision to divest of its
Technology agency, April Six Ltd along with the US based subsidiary, a
transaction that completed at the end of 2024. It is these divested revenues
that constitute the 'discontinued operations' of 2024 whilst 2023 also
comprises the disposal of Pathfindr Ltd.
One of the differentiating features of MISSION is the longevity and loyalty of
its Client base exemplified by over 56% of 2024 total operating income coming
from Clients with whom MISSION has worked for more than five years. We believe
this is due to the dynamic and Agency-driven culture which ensures Clients
receive a tailored level of Client service but supported by the resources of a
multi-national Group.
Profit and margins
The Directors measure and report the Group's performance primarily by
reference to headline results in order to avoid the distortions created by the
one-off events and non-cash accounting adjustments relating to acquisitions
that are detailed below. Headline results are therefore calculated before
acquisition adjustments, exceptional items and losses from new ventures (as
set out in Note 3).
The Group reported an operating profit across all operations this year of
£5.8m compared to a £9.7m loss in 2023.
Reported profit before tax increased by £14.9m, from a £12.0m loss in 2023
to a £2.9m profit in 2024.
Adjustments to reported profits, detailed further in Note 3, totalled £3.2m
(2023: £14.8m) a significant decrease on a previous year that had included a
£10.3m impairment of the Story (£5.2m) and Krow (£5.1m) intangible assets.
There were no intangible impairments in 2024.
In addition to this the Group invested £0.5m in new ventures (2023: £1.8m)
most notably Influence US and Saudi Arabia operations as well as performance
marketing joint venture Turbine and investment in the MISSION Hubs venture.
Acquisition and disposal related costs of £2.1m compared to £1.7m in 2023.
The 2024 charge consists primarily of the amortisation of intangibles
recognised on acquisitions of £0.7m (2023: £0.9m) as well as professional
fees incurred in order to defend an unsolicited bid for the Group (£0.3m).
There was an increase in fair value of contingent consideration of £0.8m in
2024 (2023 £0.4m) following the strong performance of recently acquired
agencies.
Finally, the Group recorded a profit on the disposal of the April Six
operation of £1.2m, countered by realisation of non-cash, historical foreign
currency translation reserves of £1.4m. (2023: £0.3m profit on sale of
Pathfindr Ltd).
Adjusting for these items delivers a headline operating profit from all
operations of £9.1m (2023 £5.0m). Headline operating profit from continuing
operations was £7.9m (2023: £6.5m).
A key focus of the VRP has been improving operational effectiveness and
therefore margin. As a result the headline operating expenditure base from all
operations decreased in the year by 4% (from £81.5m in 2023 to £78.6m in
2024). Expenditure within continuing operations held flat at £68.0m.
Whilst operating expenditure grew in the Business & Corporate segment to
support revenue growth (£0.9m increase), the actions of the VRP are evident
in reductions of spend in Consumer & Lifestyle (£0.3m) and Property
(£0.7m). Expenditure in Sports & Entertainment increased by £0.5m in the
year.
The result of this is strong year on year headline operating profit
improvements in the Property (+£1.2m), Consumer & Lifestyle (£+0.4m) and
Central (+£0.6m) business segments, all of which outweighed smaller headline
operating profit reductions in Sports & Entertainment (£0.4m reduction)
and Health & Wellness (£0.3m reduction).
As a consequence, headline operating margins from all activities increased
from 5.8% to 10.3% and margins from continuing activities increased from 8.8%
to 10.4%.
Interest charges of £3.0m were £0.5m higher than 2023 (£2.5m) reflecting
the increased net debt levels the Group faced during this restructuring
period.
The resultant reported profit before tax from continuing operations for 2024
was £1.9m, an increase of £12.7m on 2023 (£10.7m loss).
Taxation
The headline tax rate increased marginally to 28% (2023: 27%).
On a reported basis in 2024 the impact of foreign tax payments in the year in
relation to April Six resulted in a total tax charge of £1.7m on a reported
profit before tax of £2.9m, an effective rate of 58.8%. This compares to the
1.3% rate in 2023 resulting from the impact of the large one-off
non-deductible expenditure primarily in relation to impairment of goodwill
which resulted in a tax credit of £0.2m on a reported loss before tax of
£12.0m.
The tax rate is generally expected to be consistently higher than the
statutory rate (25.0% in 2024, an increase from the 23.5% in 2023) when the
Group is profit making, since the amortisation of acquisition-related
intangibles is not deductible for tax purposes and tax rates on our US
operations are substantially higher than the UK corporation tax rate.
Earnings Per Share
After tax, the reported profit for the year was £1.2m (2023: £11.9m loss)
and undiluted and diluted EPS was 1.2 pence (2023: -13.4 pence).
However, after adjustments, Headline EPS from continuing operations on both an
undiluted an diluted basis was 3.8 pence (2023: 3.3 pence).
Dividend
The Board has historically adopted a progressive dividend policy, aiming to
grow dividends each year in line with earnings but always balancing the desire
to reward shareholders via dividends with the need to fund the Group's growth
ambitions and maintain a strong balance sheet and healthy distributable
reserves (2024: £30.5m, 2023: £33.7m).
The Board has made the decision to continue to pause dividend payments and
expects to return to paying ordinary dividends in 2026. In so doing it plans
to maintain dividend cover between 3x to 4x headline earnings per share.
Balance sheet
In common with other marketing communications groups the main features of our
balance sheet are the goodwill and other intangible assets resulting from
acquisitions made over the years and the debt taken on in connection with
those acquisitions.
The Board undertakes an annual assessment of the value of all goodwill,
explained further in Note 10. At 31 December 2024 the Board concluded that no
impairment adjustments would be required and that the position would continue
to be reviewed on a regular basis.
The level of intangible assets relating to acquisitions and internal
investments decreased by £11.0m in the year. This movement being primarily a
function of the divestment of April Six.
The Group's acquisition obligations at the end of 2024 were £4.7m (2023:
£5.5m), to be satisfied by a mix of shares and cash in some instances at the
Group's discretion. All of this is dependent on post-acquisition earn-out
profits. £3.4m is expected to fall due for payment in cash within 12 months
and a further £1.2m which can be satisfied by a mix of shares and cash in the
subsequent 12 months.
The Board continue to closely monitor all capital spends and have paused
dividend payments for the short term.
The Directors therefore believe that the Group's current balance sheet can
comfortably accommodate these acquisition obligations alongside the Group's
commitments to routine capital expenditure.
Consolidated Net Current Assets closed at £17.0m, an increase of £11.4m on
2023 (£5.6m). This was in part the result of the increase in cash of £5.8m
and a reduction in trade creditors of £9.4m, netted off against a £1.7m
increase in current acquisition obligations. Acquisition obligations are
dependent on performance and the Company has the option to settle a proportion
of the total in shares.
At the end of the year the Group's net bank debt stood at £9.5m (2023:
£15.4m). On an adjusted basis (pre IFRS16) the leverage ratio of net bank
debt to headline EBITDA was 1.1x at 31 December 2024 (2023: 2.0x). The Group's
adjusted ratio of total debt, including remaining acquisition obligations, to
EBITDA at 31 December 2024 was 1.7x (2023: 2.7x). A pre-IFRS16 basis is used
as this in the definition of the Group's bank covenants.
Cash flow
Cash and cash equivalents improved by £5.8m over the course of 2024.
The primary reason for the improvement came from the divestment of April Six
and the resulting net increase in cash and cash equivalents from discontinued
operations of £7.3m.
In addition to this, capital allocations in 2024 were very closely controlled.
This resulted in significant year on year reductions to both capital
expenditure (£0.7m, 2023 £2.5m) and dividends payable (£0.1m, 2023 £1.7m).
Similarly, expenditure on new acquisitions was £Nil (2023, £0.4m) and the
settlement of contingent obligations relating to the profits generated by
previous acquisitions totalled £0.7m (2023: £0.4m). Bank loans were in line
with 2023 at £20.0m.
In 2023 total working capital movements were somewhat distorted as a result of
£4.3m of delayed VAT and PAYE payments, a payment plan having been agreed
with HMRC whereby all delayed payments would be repaid by the end of May 2024.
Therefore, the working capital movements in 2024 are impacted in an equal and
opposite way as these repayments were completed.
The working capital movement is defined as the aggregate movement in
receivables, stock and payables and was at an overall level reported as an
outflow of £4.1m (2023: £0.3m inflow). However, adjusting for the HMRC
repayments noted above reveals an underlying working capital inflow of £0.2m.
The closing net bank debt position for 2024 was £9.5m. This represents a
decrease in net debt of £5.9m on the 2023 year-end net bank debt of £15.4m.
Headline operating profit from continuing operations of £7.9m (2023: £6.5m)
converted into £1.4m (2023: £4.2m) of 'free cash flow' (defined as net cash
inflow from operating activities less tangible and intangible capital
expenditure) and dividends of £0.1m (2023: £1.7m).
Working capital days
Trade creditor days and work in progress days both increased and trade debtors
days decreased when compared to last year. Overall, the Group's total working
capital days of 23.8 represents an increase from the 2023 equivalent (16.8
days).
Going concern
The Board believe that, through the actions taken during 2024 and described
above, the Group is well placed to deliver profitable growth, cash generation
and facility headroom. However, further scenario modelling has been undertaken
of the Group's net debt position into the reasonably foreseeable future. This
modelling included cautious assumptions about trading performance, investment
plans and acquisition consideration obligations. The principal uncertainty in
the projections is the continued growth of the trading agencies in an
unpredictable macro-economic environment and potential increases in cost base
that are not proportionate to revenue growth.
The Directors have considered the resulting financial and cash flow
projections for the Group alongside the availability of renewed committed bank
facilities of £15m (expiring 21 March 2028), an overdraft facility of £3m
and the headroom afforded against Total Debt Leverage and Bank Debt Leverage
covenant tests for the coming 12 months.
The Directors have also considered and understood the mitigating actions that
would be required in the event of reduced revenue profiles and any further
consequential difficulties with covenant compliance. Such potential mitigating
actions would include a review of headcount, particularly in the areas
impacted by any downturn.
Furthermore the Group have considered actions that can be taken should
increased headroom be required. This would most likely be the disposal of
non-core or high value agency assets.
Against these scenarios, the Group was demonstrated to have adequate headroom
against the facilities described above. This leads the Directors to become
satisfied that, taking account of reasonably possible changes in trading
performance, it is appropriate to adopt the going concern basis in preparing
the financial statements.
Key Performance Indicators
KPIs are designed to monitor the Group's revenue and profit growth, within a
safe capital structure. The targets, along with the outcome for 2024 are as
follows:
• Achieve organic revenue growth of at least 2% per year (delivered
+2%);
• Increase headline operating profit margins to 14% (delivered 10%);
• Grow headline profit before tax by 10% year-on-year; and (delivered
+19%)
• Maintain the ratio of net bank debt to EBITDA* at or below 1.5x
(delivered 1.1x) and the ratio of total debt (including both bank debt and
deferred acquisition consideration) to EBITDA at or below 2.0x (delivered
1.7x).
*EBITDA is headline operating profit before depreciation and amortisation
charges.
At the individual Agency level, the Group's financial KPIs comprise revenue
and controllable profitability measures, predominantly based on the
achievement of the annual budget. More detailed KPIs are applied within
individual Agencies. In addition to financial KPIs, the Board periodically
monitors the length of Client relationships, the forward visibility of revenue
and the retention of key staff.
Outlook
We enter 2025 with a plan for continued, profitable growth across our business
segments.
The year has started well and prospects for organic progress are good. We also
expect to drive additional margin improvements in spite of the cost pressures
impacting our sector as we focus on our core operations, offerings and
capabilities. Additionally, and as a result of the actions taken in 2024 this
growth is well set to be highly cash generative.
Giles Lee
Group Chief Financial Officer
Consolidated Income Statement
For the year ended 31 December 2024
Continuing operations Discontinued operations* Continuing operations Discontinued operations**
2024 2024 Total 2024 2023 2023 Total 2023
Note £'000 £'000 £'000 £'000 £'000 £'000
TURNOVER 2 158,662 31,650 190,312 161,388 34,500 195,888
Cost of sales (82,746) (19,882) (102,628) (87,052) (22,286) (109,338)
OPERATING INCOME 2 75,916 11,768 87,684 74,336 12,214 86,550
Headline operating expenses (68,059) (10,555) (78,614) (67,813) (13,695) (81,508)
HEADLINE OPERATING PROFIT / (LOSS) 7,857 1,213 9,070 6,523 (1,481) 5,042
Goodwill, business and intangible impairment 3 - - - (10,409) - (10,409)
(Loss) / profit on sale of subsidiaries (Note 17.2) - (209) (209) - 308 308
Start-up costs 3 (458) - (458) (1,818) - (1,818)
Acquisition and disposal adjustments
3 (2,090) - (2,090) (1,652) - (1,652)
Restructuring costs 3 (243) - (243) (620) (95) (715)
Bank refinancing and equity raise costs
3 (242) - (242) (475) - (475)
OPERATING PROFIT / (LOSS)
4,824 1,004 5,828 (8,451) (1,268) (9,719)
Share of results of associates and joint ventures
80 - 80 150 - 150
PROFIT / (LOSS) BEFORE INTEREST AND TAXATION
4,904 1,004 5,908 (8,301) (1,268) (9,569)
Net finance costs 5 (2,962) (35) (2,997) (2,424) (48) (2,472)
PROFIT / (LOSS) BEFORE TAXATION 6 1,942 969 2,911 (10,725) (1,316) (12,041)
Taxation 7 (1,008) (703) (1,711) (171) 333 162
PROFIT / (LOSS) FOR THE YEAR 934 266 1,200 (10,896) (983) (11,879)
Attributable to:
Equity holders of the parent 787 266 1,053 (11,043) (983) (12,026)
Non-controlling interests 147 - 147 147 - 147
934 266 1,200 (10,896) (983) (11,879)
Basic earnings per share (pence) 9 0.9 0.3 1.2 (12.3) (1.1) (13.4)
Diluted earnings per share (pence) 9 0.9 0.3 1.2 (12.3) (1.1) (13.4)
Headline basic earnings per share (pence) 9 3.8 (0.1) 3.8 3.3 (1.4) 1.9
Headline diluted earnings per share (pence) 9 3.8 (0.1) 3.7 3.3 (1.4) 1.9
* Discontinued operations in 2024 consist of the results of April Six, sold on
31 December 2024 (see note 17.2)
** Discontinued operations in 2023 include the results of Pathfindr, sold in
2023, and the results of April Six.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
Total Total
Continuing operations 2024 Discontinuing operations 2024 Year to 31 December 2024 Continuing operations 2023 Discontinuing operations 2023 Year to 31 December 2023
£'000 £'000 £'000 £'000 £'000 £'000
PROFIT / (LOSS) FOR THE YEAR 934 266 1,200 (10,896) (983) (11,879)
Other comprehensive income - items that may be reclassified separately to
profit or loss:
Exchange differences on translation of foreign operations
(85) (413) (498) (8) (263) (271)
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR
849 (147) 702 (10,904) (1,246) (12,150)
Attributable to:
Equity holders of the parent 725 (147) 578 (11,058) (1,246) (12,304)
Non-controlling interests 124 - 124 154 - 154
849 (147) 702 (10,904) (1,246) (12,150)
Consolidated Balance Sheet
As at 31 December 2024
As at As at
31 December 31 December
2024 2023
Note £'000 £'000
FIXED ASSETS
Intangible assets 10 79,622 90,628
Property, plant and equipment 2,702 3,209
Right of use assets 11 14,494 16,432
Investments, associates and joint ventures 12 667 587
97,485 110,856
CURRENT ASSETS
Stock 2,394 2,981
Trade and other receivables 13 44,378 44,676
Corporation tax receivable - 447
Cash and short term deposits 10,385 4,632
57,157 52,736
CURRENT LIABILITIES
Trade and other payables 14 (35,964) (45,388)
Corporation tax payable (745) -
Bank loans 15 (11) (21)
Acquisition obligations 17.1 (3,420) (1,745)
(40,140) (47,154)
NET CURRENT ASSETS 17,017 5,582
TOTAL ASSETS LESS CURRENT LIABILITIES 114,502 116,438
NON CURRENT LIABILITIES
Bank loans 15 (19,872) (19,973)
Lease liabilities 16 (14,041) (15,768)
Acquisition obligations 17.1 (1,239) (3,720)
Deferred tax liabilities (397) (524)
(35,549) (39,985)
NET ASSETS 78,953 76,453
CAPITAL AND RESERVES
Called up share capital 18 9,224 9,102
Share premium account 46,081 45,928
Own shares 19 (191) (942)
Share-based incentive reserve 1,107 1,107
Foreign currency translation reserve 64 (888)
Retained earnings 22,507 21,967
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
78,792 76,274
Non-controlling interests 161 179
TOTAL EQUITY 78,953 76,453
Consolidated Cash Flow Statement
For the year ended 31 December 2024
Continuing operations 2024 Discontinued operations 2024 Continuing operations 2023 Discontinued operations 2023
Total 2024 Total 2023
£'000 £'000 £'000 £'000 £'000 £'000
Operating profit / (loss) 4,824 1,004 5,828 (8,451) (1,268) (9,719)
Depreciation, amortisation and impairment charges 4,244 307 4,551 15,008 366 15,374
Increase in the fair value of contingent consideration on acquisitions
751 - 751 434 - 434
Decrease in in the fair value of contingent consideration on disposals of
subsidiaries
213 - 213 - - -
Loss / (profit) on sale of subsidiaries - 209 209 - (308) (308)
(Profit) / loss on disposal of property, plant and equipment and software and
intellectual property
(3) - (3) 94 - 94
Non-cash charge for share options, growth shares and shares awarded, net of
awards settled in cash
- - - 79 - 79
(Increase) / decrease in receivables (2,263) 1,479 (784) (1,529) (1,483) (3,012)
Decrease / (increase) in stock 587 - 587 (1,125) (43) (1,168)
(Decrease) / increase in payables (2,944) (981) (3,925) 5,707 (1,181) 4,526
OPERATING CASH FLOWS 5,409 2,018 7,427 10,217 (3,917) 6,300
Net finance costs paid (3,051) (35) (3,086) (2,423) (48) (2,471)
Tax paid (279) (544) (823) (1,105) (669) (1,774)
Net cash inflow / (outflow) from operating activities 2,079 1,439 3,518 6,689 (4,634) 2,055
INVESTING ACTIVITIES
Proceeds on disposal of property, plant and equipment 24 - 24 2 - 2
Purchase of property, plant and equipment (582) - (582) (2,340) (3) (2,343)
Investment in software and product development (87) - (87) (111) - (111)
Acquisitions of, or investments in, businesses - - - (397) - (397)
Payment relating to acquisitions made in prior years (740) - (740) (393) - (393)
Cash acquired with subsidiaries - - - 71 - 71
Proceeds on disposal of subsidiaries - 10,813 10,813 - 1,050 1,050
Cash of subsidiaries disposed of - (2,379) (2,379) - - -
Costs of disposal of subsidiaries - (2,207) (2,207) - (187) (187)
Net cash (outflow) / inflow from investing activities (1,385) 6,227 4,842 (3,168) 860 (2,308)
FINANCING ACTIVITIES
Dividends paid - - - (1,495) - (1,495)
Dividends paid to non-controlling interests (142) - (142) (156) - (156)
Payment of lease liabilities (1,584) (349) (1,933) (1,295) (525) (1,820)
(Repayment of) / increase in bank loans (34) - (34) 2,474 - 2,474
Net cash outflow from financing activities (1,760) (349) (2,109) (472) (525) (997)
(Decrease) / increase in cash and cash equivalents (1,066) 7,317 6,251 3,049 (4,299) (1,250)
Exchange differences on translation of foreign subsidiaries
(85) (413) (498) (8) (263) (271)
Cash and cash equivalents at beginning of year 4,632 6,153
Cash and cash equivalents at end of year 10,385 4,632
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Total attributable to equity holders of parent
Share- based incentive Foreign currency translation reserve
reserve £'000 Non-controlling interest
Share Share premium Own shares £'000 Retained earnings Total equity
capital £'000 £'000
£'000 £'000 £'000 £'000
£'000
At 1 January 2023
9,102 45,928 (994) 1,010 (610) 35,558 89,994 181 90,175
(Loss) / profit for the year - - - - - (12,026) (12,026) 147 (11,879)
Exchange differences on translation of foreign operations
- - - - (278) - (278) 7 (271)
Total comprehensive (loss) / income for the year
- - - - (278) (12,026) (12,304) 154 (12,150)
Share option charge - - - 17 - - 17 - 17
Growth share charge - - - 80 - - 80 - 80
Shares awarded and sold from own shares
- - 52 - - (70) (18) - (18)
Dividend paid - - - - - (1,495) (1,495) (156) (1,651)
At 31 December 2023
9,102 45,928 (942) 1,107 (888) 21,967 76,274 179 76,453
Profit for the year - - - - - 1,053 1,053 147 1,200
Exchange differences on translation of foreign operations
- - - - (475) - (475) (23) (498)
Total comprehensive (loss) / income for the year
- - - - (475) 1,053 578 124 702
Realisation on disposal of subsidiary
- - - - 1,427 - 1,427 - 1,427
New shares issued 122 153 - - - - 275 - 275
Shares awarded and sold from own shares
- - 751 - - (513) 238 - 238
Dividend paid - - - - - - - (142) (142)
At 31 December 2024
9,224 46,081 (191) 1,107 64 22,507 78,792 161 78,953
Notes to the Consolidated Financial Statements
1. Principal Accounting Policies
Basis of preparation
The results for the year to 31 December 2024 have been extracted from the
audited consolidated financial statements, which are expected to be published
by 25 March 2025.
The financial information set out above does not constitute the Company's
statutory accounts for the years to 31 December 2024 or 2023 but is derived
from those accounts. Statutory accounts for the year ended 31 December 2023
were delivered to the Registrar of Companies following the Annual General
Meeting on 17 June 2024 and the statutory accounts for 2024 are expected to be
published on the Group's website (www.themission.co.uk
(http://www.themission.co.uk/) ) shortly, posted to shareholders at least 21
days ahead of the Annual General Meeting ("AGM") on 16 June 2025 and, after
approval at the AGM, delivered to the Registrar of Companies.
The auditors, PKF Francis Clark, have reported on the accounts for the years
ended 31 December 2024 and 31 December 2023; their reports in both years were
(i) unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under Section 498 (2) or (3) of the
Companies Act 2006 in respect of those accounts.
2. Segmental Information
IFRS 15: Revenue from Contracts with Customers requires the disaggregation of
revenue into categories that depict how the nature, amount, timing and
uncertainty of revenue and cash flows are affected by economic factors. The
Board has considered how the Group's revenue might be disaggregated in order
to meet the requirements of IFRS 15 and has concluded that the segmentation
disclosures set out below represent the most appropriate categories of
disaggregation. The Board considers that neither differences between sales
channels and markets nor differences between contract duration and the timing
of transfer of goods or services are sufficiently significant to require
further disaggregation.
For management purposes the Board monitors the performance of its individual
agencies and groups them into service segments based on the sectors in which
they operate. Each reportable segment therefore includes a number of agencies
with similar characteristics.
The Board assesses the performance of each segment by looking at turnover,
operating income and headline operating profit. The headline operating profit
shown below is after the reallocation to the agencies of certain head office
costs relating to the Shared Services function. These costs include a
significant portion of the total operating costs which are now centrally
managed.
The Board does not review the assets and liabilities of the Group on a
segmental basis. A segmental breakdown of assets and liabilities is therefore
not disclosed.
Business & Corporate Consumer & Lifestyle Health & Wellness Property Sports & Entertainment Technology & Mobility MISSION Advantage & Central Investments Total
Year to 31 December 2024 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Turnover
Continuing operations 65,883 24,256 4,412 33,019 8,374 5,503 17,215 - 158,662
Discontinued operations - - - - - 31,650 - - 31,650
Total Group 65,883 24,256 4,412 33,019 8,374 37,153 17,215 - 190,312
Operating income
Continuing operations 21,676 18,289 3,539 15,554 6,801 2,675 7,382 - 75,916
Discontinued operations - - - - - 11,768 - - 11,768
Total Group 21,676 18,289 3,539 15,554 6,801 14,443 7,382 - 87,684
Headline operating profit / (loss)
Continuing operations 2,806 1,761 437 3,536 1,010 83 (1,776) - 7,857
Discontinued operations - - - - - 1,213 - - 1,213
Total Group 2,806 1,761 437 3,536 1,010 1,296 (1,776) - 9,070
Business & Corporate Consumer & Lifestyle Health & Wellness Property Sports & Entertainment Technology & Mobility MISSION Advantage & Central Investments Total
Year to 31 December 2023 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Turnover
Continuing operations 67,215 26,128 4,438 30,983 10,373 6,814 15,437 - 161,388
Discontinued operations - - - - - 34,062 - 438 34,500
Total Group 67,215 26,128 4,438 30,983 10,373 40,876 15,437 438 195,888
Operating income
Continuing operations 20,785 18,195 3,949 15,038 6,675 3,100 6,594 - 74,336
Discontinued operations - - - - - 11,984 - 230 12,214
Total Group 20,785 18,195 3,949 15,038 6,675 15,084 6,594 230 86,550
Headline operating profit / (loss)
Continuing operations 2,831 1,322 712 2,303 1,368 326 (2,339) - 6,523
Discontinued operations - - - - - (43) - (1,438) (1,481)
Total Group 2,831 1,322 712 2,303 1,368 283 (2,339) (1,438) 5,042
As contracts typically have an original expected duration of less than one
year, the full amount of the accrued income balance at the beginning of the
year is recognised in revenue during the year. The vast majority of turnover
is recognised over time.
Geographical segmentation
The following table provides an analysis of the Group's operating income by
region of activity:
Year to 31 Year to 31
December December
2024 2023
£'000 £'000
UK 77,345 75,278
USA 7,551 7,688
Asia 2,609 3,340
Rest of Europe 179 244
87,684 86,550
3. Reconciliation of Headline Profit to Reported Profit
The Board believes that headline profits, which eliminate certain amounts from
the reported figures, provide a better understanding of the underlying trading
of the Group.
Year ended Year ended
31 December 31 December
2024 2023
PBT PAT PBT PAT
£'000 £'000 £'000 £'000
From continuing and discontinued operations
Headline profit 6,243 3,570 2,720 1,855
Goodwill, business and intangible impairment - - (10,409) (10,381)
(Loss) / profit on sale of subsidiary (Note 17.2) (209) 343 308 355
Start-up costs (458) (390) (1,818) (1,363)
Acquisition and disposal related items (Note 4) (2,090) (1,831) (1,652) (1,453)
Restructuring costs (243) (243) (715) (536)
Bank refinancing and equity raise costs (332) (249) (475) (356)
Reported profit / (loss) 2,911 1,200 (12,041) (11,879)
From continuing operations
Headline profit 5,065 3,647 4,249 3,122
Goodwill, business and intangible impairment - - (10,409) (10,381)
Start-up costs (458) (390) (1,818) (1,363)
Acquisition and disposal related items (Note 4) (2,090) (1,831) (1,652) (1,453)
Restructuring costs (243) (243) (620) (465)
Bank refinancing and equity raise costs (332) (249) (475) (356)
Reported profit / (loss) 1,942 934 (10,725) (10,896)
From discontinued operations
Headline profit / (loss) 1,178 (77) (1,529) (1,267)
Restructuring costs - - (95) (71)
(Loss) / profit on sale of subsidiary (Note 17.2) (209) 343 308 355
Reported profit / (loss) 969 266 (1,316) (983)
In 2023, goodwill, business and intangible impairment costs related to the
impairment of Story UK Ltd, Story Agency Ltd, Krow Agency Ltd and Krow
Communications Ltd goodwill and the write off of the MISSION Brand Bonding
Index intangible asset.
Start-up costs derive from organically started businesses or loss-making
businesses acquired and comprise the trading losses of such entities until the
earlier of two years from commencement or when they show evidence of becoming
sustainably profitable. Start-up costs in 2023 related the trading losses of
the Livity youth-marketing offer acquired in 2022, the launch of Turbine, an
integrated Growth Media agency, specialising in owned, earned and paid media
for consumer facing brands, the trading losses of BLS China launched in 2023,
as well as costs associated with the early-stage foundation of performance
marketing and data science capabilities. Start-up costs in 2024 consist of
further costs relating to the launch of Turbine and the launch of the US and
Saudi offices of the Influence business.
Restructuring costs in 2023 comprised costs of closing down the April Six
Singapore office, and redundancy, PILON and TUPE related costs associated with
restructuring and right sizing of various business units in the last quarter
of the year following the downgraded full year profit expectation announced to
the market. In 2024, restructuring costs consist of the costs of shutting down
the BLS China office.
Bank refinancing and equity raise costs in 2023 consisted of fees from various
consulting and legal firms used to assist and advise the bank in the
refinancing process, and other related costs associated with this process.
Costs in 2024 consist of further such expenses, accelerated bank debt
arrangement fees (see note 5) and fees from various consulting and legal firms
advising and assisting in the Board's consideration of an equity issue.
4. Acquisition and Disposal Adjustments
Year to Year to
31 December 2024 31 December 2023
£'000 £'000
Movement in fair value of contingent consideration on acquisitions (751) (434)
Movement in fair value of consideration on disposals (213) -
Amortisation of other intangibles recognised on acquisitions (685) (942)
Acquisition transaction costs expensed (441) (276)
(2,090) (1,652)
The movement in fair value of contingent consideration on acquisitions relates
to a net upward (2023: upward) revision in the estimate payable to vendors of
businesses acquired. This upward revision is driven by improved performance by
the recent acquisitions. The movement in fair value of consideration on
disposals relates to a net downward revision in the estimate receivable from
the sale of Pathfindr. Acquisition transaction costs relate to professional
fees in connection with acquisitions made or contemplated, including reverse
acquisitions.
5. Net Finance Costs
Year to Year to
31 December 2024 31 December 2023
£'000 £'000
Net interest on bank, overdrafts, and deposits (2,020) (1,795)
Amortisation of bank debt arrangement fees (44) (45)
Interest expense on lease liabilities (843) (632)
Headline net finance costs (2,907) (2,472)
Accelerated amortisation of debt arrangement fees (Note 3)
(90) -
Net Finance Costs (2,997) (2,472)
The increase in net interest on bank loans, overdrafts and deposits in the
period is driven primarily by an increase in the interest rate payable on the
bank debt following general increases in interest rates by the BOE and higher
margins payable on the new revolving credit facility entered into on 27 March
2024.
The increase in interest expense on lease liabilities in the period is the
result of the general increase in interest rates and increase in Right of Use
Assets and Lease Liabilities following the entering into of new leases, most
notably the new London office.
Following the reduction in full year profit expectations announced to the
market last year, the Group agreed a new revolving credit facility on 27 March
2024 and incurred additional bank debt arrangement fees that are being
amortised over the period of the new facility. In addition, the remaining
unamortised bank debt arrangement fees relating to the replaced facility were
fully written off during the period. These additional bank debt arrangement
fees, over and above what would have been amortised had the Group not
refinanced, amounting to £90,000, have been classified as a headline
adjustment.
6. Profit Before Taxation
Profit or loss on ordinary activities before taxation is stated after charging
/ (crediting):
Year to Year to
31 December 2024 31 December 2023
£'000 £'000
Depreciation of owned tangible fixed assets 1,067 1,171
Depreciation expense on right of use assets 2,513 2,612
Amortisation of intangible assets recognised on acquisitions 685 942
Amortisation of other intangible assets 286 353
Expense relating to short term leases 86 388
Expense relating to low value leases 27 29
Income from subleasing right of use assets (95) (153)
Staff costs 61,485 63,095
Bad debts and net movement in provision for bad debts 187 (5)
Auditors' remuneration 420 267
(Profit) / loss on foreign exchange (208) 589
Auditors' remuneration may be analysed by:
Year to Year to
31 December 2024 31 December 2023
£'000 £'000
Audit of Group's annual report and financial statements 71 62
Audit of subsidiaries 168 138
Audit related assurance services 7 6
Corporate finance 174 61
420 267
7. Taxation
Year to Year to
31 December 2024 31 December 2023
£'000 £'000
Current tax:
UK corporation tax at 25.00% (2023: 23.52%) 522 (123)
Adjustment for prior periods 91 45
Foreign tax on profits of the period 1,225 135
1,838 57
Deferred tax:
Current year originating temporary differences (127) (219)
Tax charge / (credit) for the year 1,711 (162)
Factors Affecting the Tax Charge for the Current Year:
The tax assessed for the year is higher (2023: higher) than the standard rate
of corporation tax in the UK. The differences are:
Year to Year to
31 December 2024 31 December 2023
£'000 £'000
Profit / (loss) before taxation 2,911 (12,041)
Profit on ordinary activities before tax at the standard rate of corporation 728 (2,832)
tax of 25.00% (2023: 23.52%)
Effect of:
Rate changes - (11)
Non-deductible expenses / income not taxable 331 2,696
Depreciation (lower than) / in excess of capital allowances - (5)
Differences in overseas tax rates 682 (23)
Adjustments in respect of prior periods 91 45
Other differences (121) (32)
Actual tax charge / (credit) for the year 1,711 (162)
8. Dividends
Year to Year to
31 December 2024 31 December 2023
£'000 £'000
Amounts recognised as distributions to equity holders in the year:
Interim dividend of nil (2023: nil) per share - -
Final dividend of nil (2023: 1.67 pence) per share - 1,495
- 1,495
The Board has made the decision to pause further dividend payments until
balance sheet strength is restored.
9. Earnings Per Share
The calculation of the basic and diluted earnings per share is based on the
following data, determined in accordance with the provisions of IAS 33:
Earnings Per Share.
Year to Year to
31 December 31 December
2024 2023
£'000 £'000
Earnings
Reported profit / (loss) for the year
From continuing and discontinued operations 1,200 (11,879)
Attributable to:
Equity holders of the parent 1,053 (12,026)
Non-controlling interests 147 147
1,200 (11,879)
From continuing operations 934 (10,896)
Attributable to:
Equity holders of the parent 787 (11,043)
Non-controlling interests 147 147
934 (10,896)
From discontinued operations 266 (983)
Attributable to:
Equity holders of the parent 266 (983)
Non-controlling interests - -
266 (983)
Headline earnings (Note 3)
From continuing and discontinued operations 3,570 1,855
Attributable to:
Equity holders of the parent 3,423 1,708
Non-controlling interests 147 147
3,570 1,855
From continuing operations 3,647 3,122
Attributable to:
Equity holders of the parent 3,500 2,975
Non-controlling interests 147 147
3,647 3,122
From discontinued operations (77) (1,267)
Attributable to:
Equity holders of the parent (77) (1,267)
Non-controlling interests - -
(77) (1,267)
Number of shares
Weighted average number of Ordinary shares for the purpose of basic earnings
per share
91,140,375 89,549,143
Dilutive effect of securities:
Employee share options 242,121 341,144
Weighted average number of Ordinary shares for the purpose of diluted earnings
per share
91,382,496 89,890,287
Reported basis
From continuing and discontinued operations
Basic earnings per share (pence) 1.2 (13.4)
Diluted earnings per share (pence) 1.2 (13.4)
From continuing operations
Basic earnings per share (pence) 0.9 (12.3)
Diluted earnings per share (pence) 0.9 (12.3)
From discontinued operations
Basic earnings per share (pence) 0.3 (1.1)
Diluted earnings per share (pence) 0.3 (1.1)
Headline basis:
From continuing and discontinued operations
Basic earnings per share (pence) 3.8 1.9
Diluted earnings per share (pence) 3.7 1.9
From continuing operations
Basic earnings per share (pence) 3.8 3.3
Diluted earnings per share (pence) 3.8 3.3
From discontinued operations
Basic earnings per share (pence) (0.1) (1.4)
Diluted earnings per share (pence) (0.1) (1.4)
A reconciliation of the profit after tax on a reported basis and the headline
basis is given in Note 3.
10. Intangible Assets
31 December 31 December
2024 2023
£'000 £'000
Goodwill 77,752 87,857
Other intangible assets 1,870 2,771
79,622 90,628
In accordance with the Group's accounting policies, an annual impairment test
is applied to the carrying value of goodwill. The review performed assesses
whether the carrying value of goodwill is supported by the net present value
of projected cash flows derived from the underlying assets for each
cash-generating unit ("CGU"), discounted using an appropriate discount rate.
It is the Directors' judgement that each distinct Agency represents a CGU. The
initial projection period of three years includes the annual budget for each
CGU, based on insight into Clients' planned marketing expenditure and targets
for net new business growth derived from historical experience, and
extrapolations of the budget in subsequent years based on known factors and
estimated trends. The key assumptions used by each CGU concern revenue growth
and staffing levels and different assumptions are made by different CGUs based
on their individual circumstances. These assumptions are arrived at after
considering factors such as historical client spend and levels of client
retention, client wins secured and historical ratios of staff costs to
revenue. Beyond this initial projection period, a generic long term growth
rate of 2.0% is assumed for all units based on information published by market
analysts. The resulting pre-tax cash flow forecasts were discounted using the
Group's estimated pre-tax Weighted Average Cost of Capital ("WACC"), which is
8.3% (2023: 9.9%).
The conclusion from using the above methodology was that no impairment in
goodwill was required. No change to this conclusion is reached as a result of
the following independent changes in assumptions: nil growth in 2025 and a one
year delay in the achievement of 2025 budgets; any reduction in short term
growth rates beyond 2025; nil long term growth rates; a 1% increase in
discount rate; a 5% reduction in 2025 profits with standard growth rates
applied to these lower 2025 profits to arrive at later years' forecasts. The
only change in assumptions that would result in a material impairment in the
carrying value of the Group's goodwill is an increase in discount rate of 3%,
which management do not believe is a reasonably possible change in key
assumption. This would result in an impairment in goodwill of £0.9m.
11. Right of Use Assets
The Group leases several assets including property, office equipment, computer
equipment and motor vehicles.
Property Office equipment, computer equipment and motor vehicles Total
£'000 £'000 £'000
Cost
At 1 January 2023 15,168 2,399 17,567
Additions 9,256 252 9,508
Disposals (1,540) (243) (1,783)
At 31 December 2023 22,884 2,408 25,292
Additions 181 417 598
Disposals (1,430) (769) (2,199)
At 31 December 2024 21,635 2,056 23,691
Depreciation
At 1 January 2023 6,164 1,867 8,031
Charge for the year 2,259 353 2,612
Disposals (1,540) (243) (1,783)
At 31 December 2023 6,883 1,977 8,860
Charge for the year 2,200 313 2,513
Disposals (1,407) (769) (2,176)
At 31 December 2024 7,676 1,521 9,197
Net book value at 31 December 2024 13,959 535 14,494
Net book value at 31 December 2023 16,001 431 16,432
12. Investments, Associates and Joint Ventures
Year to Year to
31 December 31 December
2024 2023
£'000 £'000
At 1 January 587 437
Profit during the year 80 150
At 31 December 667 587
13. Trade and Other Receivables
31 December 2024 31 December 2023
£'000 £'000
Trade receivables 21,119 26,858
Accrued income 16,050 13,476
Prepayments 4,208 3,005
Other receivables 3,001 1,337
44,378 44,676
An allowance has been made for estimated irrecoverable amounts from the
provision of services of £137,000 (2023: £25,000).
The estimated irrecoverable amount is arrived at by considering the historical
loss rate and adjusting for current expectations, Client base and economic
conditions. Both historical losses and expected future losses being very low,
the Directors consider it appropriate to apply a single average rate for
expected credit losses to the overall population of trade receivables and
accrued income. Accrued income relates to unbilled work in progress and has
substantially the same risk characteristics as the trade receivables for the
same types of contracts. In 2024, the provision for doubtful debts has
increased as a result of a number of specific debtors going into liquidation.
31 December 2024 31 December 2023
£'000 £'000
Gross trade receivables 21,256 26,883
Gross accrued income 16,050 13,476
Total trade receivables and accrued income 37,306 40,359
Expected loss rate 0.4% 0.1%
Provision for doubtful debts 137 25
Trade receivables include £5.0m (2023: £8.8m) that is past due but not
impaired, of which £0.5m (2023: £1.0m) is greater than 3 months past due.
14. Trade and Other Payables
31 December 2024 31 December 2023
£'000 £'000
Trade creditors 11,861 14,026
Deferred income 4,937 8,533
Other creditors and accruals 12,779 11,163
Other tax and social security payable 4,035 9,683
Lease liabilities (Note 16) 2,352 1,983
35,964 45,388
Other tax and social security decreased as a result of the delayed VAT and
PAYE payments in 2023, with a payment plan having been agreed with HMRC
whereby all delayed payments were repaid by the end of May 2024.
15. Bank Overdrafts, Loans and Net Bank Debt
31 December 2024 31 December 2023
£'000 £'000
Bank loan outstanding 20,015 20,049
Unamortised bank debt arrangement fees (132) (55)
Carrying value of loan outstanding 19,883 19,994
Less: Cash and short term deposits (10,385) (4,632)
Net bank debt 9,498 15,362
The borrowings are repayable as follows:
Less than one year 11 21
In one to two years 20,004 20,023
In two to three years - 5
20,015 20,049
Unamortised bank debt arrangement fees (132) (55)
19,883 19,994
Less: Amount due for settlement within 12 months (shown under current
liabilities)
(11) (21)
Amount due for settlement after 12 months 19,872 19,973
Bank debt arrangement fees, where they can be amortised over the life of the
loan facility, are included in finance costs. The unamortised portion is
reported as a reduction in bank loans outstanding.
Included in the above is £15,000 of bank loans owing by Populate Social Ltd,
one of the companies acquired during 2022. These borrowings are repayable over
a two year period.
At 31 December 2024, the Group's committed bank facilities comprised a
revolving credit facility of £20.0m, with an option to increase the facility
by £5.0m, expiring on 5 April 2026. The sale of April Six on 31 December 2024
resulted in an agreement with Natwest to decrease the revolving credit
facility by £6.0m to £14.0m in early January 2025. Interest on the facility
is based on SONIA (sterling overnight index average) plus a margin of between
2.25% and 4.90% depending on the Group's debt leverage ratio, payable in cash
on loan rollover dates.
On 21 March 2025, the Group agreed a new revolving credit facility of £15m,
expiring on 21 March 2028, with an option to increase the facility by £5m. In
addition, there is an option to extend the facility by 1 year, and a further
option to extend it by another year. Interest on the new facility is based on
SONIA (sterling overnight index average) plus a margin of between 1.75% and
2.25% depending on the Group's debt leverage ratio, payable in cash on loan
rollover dates.
In addition to its committed facilities, the Group had available an overdraft
facility of up to £7.0m at 31 December 2024 with interest payable by
reference to National Westminster Bank plc Base Rate plus 2.25%. This facility
was reduced to £3.0m in early January following the sale of April Six.
At 31 December 2024, there was a cross guarantee structure in place with the
Group's bankers by means of a fixed and floating charge over all of the assets
of the Group companies in favour of National Westminster Bank plc.
All borrowings are in sterling.
16. Lease Liabilities
Obligations under leases are due as follows:
31 December 2024 31 December 2023
£'000 £'000
In one year or less (shown in trade and other payables) 2,352 1,983
In more than one year 14,041 15,768
16,393 17,751
17. Acquisitions and Disposals
17.1 Acquisition Obligations
The terms of an acquisition provide that the value of the purchase
consideration, which may be payable in cash or shares at a future date,
depends on uncertain future events such as the future performance of the
acquired company. The Directors estimate that the liability for contingent
consideration payments is as follows:
31 December 2024 31 December 2023
Cash Shares Total Cash Shares Total
£'000 £'000 £'000 £'000 £'000 £'000
3,396 24 3,420 1,745 - 1,745
Less than one year
Between one and two years 1,239 - 1,239 2,830 - 2,830
In more than two years but less than three years
- - - 890 - 890
4,635 24 4,659 5,465 - 5,465
A reconciliation of acquisition obligations during the period is as follows:
Cash Shares Total
£'000 £'000 £'000
At 31 December 2023 5,465 - 5,465
Obligations settled in the period (740) (513) (1,253)
Adjustments to estimates of obligations (90) 537 447
At 31 December 2024 4,635 24 4,659
17.2 Sale of April Six Ltd and April Six Inc
On 31 December 2024, as part of the Group's value restoration plan to
deleverage and restore strength to the balance sheet, the Group disposed of
the entire issued share capital of April Six Ltd and its subsidiary April Six
Inc (together referred to as "April Six"). The fair value of the consideration
for the disposal was £12,813,000 comprising initial cash consideration and
deferred contingent consideration. Maximum contingent consideration of
£4,200,000 is dependent on April Six's profit over the period 1 December 2024
to 28 February 2025. The Group has recognised contingent consideration of
£2,000,000 to date. This estimate is based on the Directors' judgement of
April Six's likely profit over the earnout period, using the latest financial
projections from detailed budgeting and reforecasting processes. Should the
actual profit of April Six vary from the Directors' estimate, the impact to
the contingent consideration will be 7x the change in earnings. For example,
should the profit be £100,000 higher than the forecasted amount, the
consideration will be £700,000 higher, and should the actual profit of April
Six be £100,000 lower than the forecasted amount, the consideration will be
£700,000 lower.
The consideration, assets disposed of and costs of disposal were as follows:
£'000
Upfront cash consideration received 10,813
Estimated earnout consideration 2,000
Total consideration 12,813
Net assets disposed of:
Fixed assets 18
Trade and other receivables 2,869
Corporation tax asset 177
Cash 2,379
Trade and other payables (6,042)
(599)
Goodwill of April Six 9,987
Total net assets disposed of 9,388
Disposal and related costs 2,207
Total cost of disposal 11,595
Profit on sale of April Six prior to realisation of foreign currency 1,218
translation reserve
Realisation of foreign currency translation reserve*
(1,427)
Total loss on sale of April Six (209)
* Cumulative translation differences previously held in equity and recycled to
the income statement on disposal of foreign operations.
17.3 Pro-forma results including acquisitions
No businesses were acquired during the year. Therefore, no proforma results,
which include the results of acquisitions made during the year as if they were
owned from the beginning of the year, are presented.
18. Share Capital
31 December 2024 31 December 2023
£'000 £'000
Allotted and called up:
92,238,119 Ordinary shares of 10p each (2023: 91,015,897 Ordinary shares of 9,224 9,102
10p each)
Share-based incentives
The Group has the following share-based incentives in issue:
At start of year Granted/ Waived/ At end of year
acquired lapsed Exercised
TMMG Long Term Incentive Plan 260,192 - - (26,000) 234,192
Growth Share Scheme 2,621,234 - - - 2,621,234
The TMMG Long Term Incentive Plan ("LTIP") was created to incentivise senior
employees across the Group. Nil-cost options are awarded at the discretion of,
and vest based on criteria established by, the Remuneration Committee. During
the year, 26,000 options were exercised at an average share price of 21.2p and
at the end of the year 234,192 of the outstanding options are exercisable.
Shares held in an Employee Benefit Trust (see Note 19) will be used to satisfy
share options exercised under the Long Term Incentive Plan.
A Growth Share Scheme was implemented in June 2021. Participants in the scheme
subscribed for Ordinary B shares in The Mission Marketing Holdings Limited
(the "growth shares") at a nominal value. If the share price of The MISSION
Group plc equalled or exceeded 150p for at least 15 consecutive days during
the period ending on the date the Group's financial results for the year ended
31st December 2023 were announced, these growth shares could be exchanged for
an equivalent number of Ordinary Shares in The MISSION Group plc. If not, they
have no value. The share price did not equal or exceed 150p for the required
period and therefore these growth shares cannot be exchanged for an equivalent
number of Ordinary Shares in The MISSION Group plc and therefore have no
value.
19. Own Shares
No. of shares £'000
At 1 January 2023 1,495,538 994
Awarded or sold during the year (98,317) (52)
At 31 December 2023 1,397,221 942
Awarded or sold during the year (1,074,217) (751)
At 31 December 2024 323,004 191
Shares are held in an Employee Benefit Trust to meet certain requirements of
the Long Term Incentive Plan. Shares can also be used to settle outstanding
acquisition consideration.
20. Post Balance Sheet Events
On 2 January 2025 the Board confirmed that it intended to return up to £1.5m
to Shareholders via an on-market share buyback. To date £364,000 has been
returned to shareholders, reducing the Company's shares in issue by 1.3%.
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