REG - Mission Marketing - Audited results for the year to 31 December 2016 <Origin Href="QuoteRef">TMMG.L</Origin> - Part 2
23/03/2017 07:06
- Part 2: For the preceding part double click ID:nRSW2613Aa
£'000 £'000
Amounts recognised as distributions to equity holders in the year:
Interim dividend of 0.50 pence (2015: 0.30 pence) per share 414 247
Prior year final dividend of 0.90 pence (2015: 0.85 pence) per share 744 701
1,158 948
A final dividend of 1.0 pence per share is to be paid in July 2017 should it
be approved by shareholders at the AGM. In accordance with IFRS this final
dividend will be recognised in the 2017 accounts.
10. 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 December2016 31 December2015
£'000 £'000
Earnings
Reported profit for the year 4,511 4,102
Attributable to:
Equity holders of the parent 4,434 4,011
Non-controlling interests 77 91
4,511 4,102
Headline earnings (Note 3) 5,559 5,157
Attributable to:
Equity holders of the parent 5,482 5,066
Non-controlling interests 77 91
5,559 5,157
Number of shares
Weighted average number of Ordinary shares for the purpose of basic earnings per share 82,651,400 82,479,427
Dilutive effect of securities:
Employee share options 2,862,471 3,269,681
Weighted average number of Ordinary shares for the purpose of diluted earnings per share 85,513,871 85,749,108
Reported basis:
Basic earnings per share (pence) 5.36 4.86
Diluted earnings per share (pence) 5.19 4.68
Headline basis:
Basic earnings per share (pence) 6.63 6.14
Diluted earnings per share (pence) 6.41 5.91
Basic earnings per share includes shares to be issued subject only to time as
if they had been issued at the beginning of the period.
A reconciliation of the profit after tax on a reported basis and the headline
basis is given in Note 3.
11. Intangible Assets
Goodwill Year to Year to
31 December2016 31 December2015
£'000 £'000
Cost
At 1 January 83,606 79,326
Recognised on acquisition of subsidiaries 457 4,315
Adjustment to consideration / net assets acquired (11) (35)
At 31 December 84,052 83,606
Impairment adjustment
At 1 January 4,273 4,273
Impairment during the year - -
At 31 December 4,273 4,273
Net book value at 31 December 79,779 79,333
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"). For all CGUs, the Directors assessed the
sensitivity of the impairment test results to changes in key assumptions (in
particular expectations of future growth) and concluded that a reasonably
possible change to the key assumptions would not cause the carrying value of
goodwill to exceed the net present value of its projected cash flows.
Other intangible assets
Software development and licences Trade names Customer relationships Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2015 51 669 2,661 3,381
Additions - 230 990 1,220
At 31 December 2015 51 899 3,651 4,601
Transfer from property, plant and equipment* 1,467 - - 1,467
Additions 777 - - 777
Disposals (234) - - (234)
At 31 December 2016 2,061 899 3,651 6,611
Amortisation and impairment
At 1 January 2015 9 20 1,229 1,258
Charge for the year 8 - 566 574
At 31 December 2015 17 20 1,795 1,832
Transfer from property, plant and equipment* 853 - - 853
Charge for the year 217 77 568 862
Disposals (232) - - (232)
At 31 December 2016 855 97 2,363 3,315
Net book value at 31 December 2016 1,206 802 1,288 3,296
Net book value at 31December 2015 34 879 1,856 2,769
*As software development costs have become increasingly significant, they have
been transferred from computer equipment and reported separately within
intangible assets.
Additions of £777,000 in the year include costs associated with the
development of identifiable software products that are expected to generate
economic benefits in excess of the costs of development. In 2015 the additions
of £1,220,000 included Client relationships and trade names acquired relating
to the Chapter acquisition, all of which are being amortised over finite
useful lives.
12. Trade and Other Receivables
31 December 2016 31 December 2015
£'000 £'000
Gross trade receivables 23,843 23,661
Less: Provision for doubtful debts (234) (201)
23,609 23,460
Other receivables 670 718
Prepayments 2,524 1,257
Accrued income 5,808 5,912
32,611 31,347
An allowance has been made for estimated irrecoverable amounts from the
provision of services of £234,000 (2015: £201,000). The Directors consider
that the carrying amount of trade and other receivables approximates their
fair value.
13. Trade and Other Payables
31 December 2016 31 December 2015
£'000 £'000
Trade creditors 10,924 9,999
Finance leases 83 91
Other creditors 378 244
Other tax and social security payable 3,734 3,698
15,119 14,032
Trade and other creditors principally comprise amounts outstanding for trade
purchases and on-going costs. The Directors consider that the carrying amount
of trade payables approximates their fair value.
14.Bank Overdrafts, Loans and Net Debt
31 December 2016 31 December 2015
£'000 £'000
Bank loan outstanding 12,375 12,875
Unamortised bank debt arrangement fees (102) (165)
Carrying value of loan outstanding 12,273 12,710
Less: Cash and short term deposits (1,002) (1,784)
Net bank debt 11,271 10,926
The borrowings are repayable as follows:
Less than one year 2,250 1,500
In one to two years 2,500 2,250
In more than two years but less than three years 7,625 2,500
In more than three but less than four years - 6,625
12,375 12,875
Unamortised bank debt arrangement fees (102) (165)
12,273 12,710
Less: Amount due for settlement within 12 months (shown under current liabilities) (2,250) (1,500)
Amount due for settlement after 12 months 10,023 11,210
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.
At 31 December 2016, the Group had a term loan facility of £5.4m due for
repayment by February 2019 on a quarterly basis, and a revolving credit
facility of up to £7.0m, expiring on 3 February 2019. Interest on both the
term loan and revolving credit facilities is based on 3 month LIBOR plus
2.25%, payable in cash on loan rollover dates.
In addition to its committed facilities, the Group had available an overdraft
facility of up to £3.0m with interest payable by reference to National
Westminster Bank plc Base Rate plus 2.5%.
At 31 December 2016, 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 Royal Bank of Scotland plc.
All borrowings are in sterling.
On 16 March 2017 the Group agreed an increase of £5.0m in the revolving credit
facility and an extension to the maturity date for the revolving credit
facility to 30 April 2019. All other terms of the existing credit facilities
remain unchanged.
15. Acquisitions
15.1 Acquisition Obligations
The terms of an acquisition may provide that the value of the purchase
consideration, which may be payable in cash or shares or other securities 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 that may be due is as follows:
31 December 2016 31 December 2015
Cash£'000 Shares £'000 Total£'000 Cash£'000 Shares £'000 Total£'000
Less than one year 1,645 - 1,645 2,902 301 3,203
Between one and two years 1,703 - 1,703 2,009 - 2,009
In more than two years but less than three years 750 - 750 1,715 - 1,715
In more than three years but less than four years 561 - 561 710 - 710
In more than four years but less than five years - - - 520 - 520
4,659 - 4,659 7,856 301 8,157
15.2 Acquisitions during the year
A total of £502,000 was invested in other acquisitions during the year,
comprising initial cash consideration of £466,000 and deferred contingent
consideration of £36,000.
15.3 Pro-forma results including acquisitions
The Directors estimate that the turnover, operating income and headline
operating profit of the Group would have been approximately £144.9m, £66.4m
and £7.4m had the Group consolidated the results of the acquisitions made
during the year, from the beginning of the year.
16. Share Capital
31 December 2016 31 December 2015
£'000 £'000
Allotted and called up:
84,120,234Ordinary shares of 10p each (2015: 83,608,331Ordinary shares of 10 p each) 8,412 8,361
Options
The Group has the following options in issue:
At start of year Granted Waived/lapsed Exercised At end of year
TMMG Long Term Incentive Plan 2,983,500 1,070,000 (1,416,930) - 2,636,570
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
the Remuneration Committee of the Board and vest three years later only if the
profit performance of the Group in the intervening period is sufficient to
meet predetermined criteria (always subject to Remuneration Committee
discretion). During the year, no options were exercised and at the end of the
year none of the outstanding options are exercisable.
Shares held in an Employee Benefit Trust will be used to satisfy share options
exercised under The Mission Marketing Group Long Term Incentive Plan.
17. Own Shares
No. of shares £'000
At 31 December 2014 910,984 260
Own shares purchased during the year 551,373 317
Awarded to employees during the year (183,433) (122)
At 31 December 2015 1,278,924 455
Own shares purchased during the year 527,234 212
Awarded or sold during the year (410,228) (111)
At 31 December 2016 1,395,930 556
Shares are held in an Employee Benefit Trust to meet certain requirements of
The Mission Marketing Group Long Term Incentive Plan.
18. Post Balance Sheet Events
After the end of the financial year, a new company, The Mission Marketing
Holdings Ltd ("TMMH"), was incorporated as a wholly owned subsidiary of the
Company. On 21 February 2017, all the Company's shareholdings in subsidiaries
were transferred to TMMH in return for the issuance of 20,000,002 Ordinary
shares. On the same day, various individuals subscribed for a total of
5,720,171 A Ordinary shares in TMMH as part of the Growth Share Scheme
referred to in the Corporate Governance Report.
On 16 March 2017 the Directors agreed an increase and an extension to the
maturity date for the revolving credit facility. Further details of these
facilities are set out in Note 14.
This information is provided by RNS
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