REG - Pebble Group (The) - UNAUDITED HALF YEAR RESULTS 2024
09/09/2024 07:00
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RNS Number : 3285D Pebble Group PLC (The) 09 September 2024
9 September 2024
THE PEBBLE GROUP PLC
("The Pebble Group" or the "Group")
UNAUDITED HALF YEAR RESULTS 2024
Strong operational progress with performance for FY 24 expected to be in line
with market expectations
Appointment of new Non-Executive Chair
The Pebble Group (AIM: PEBB, OTCQX: PEBBF), a leading provider of digital
commerce, products and related services to the global promotional products
industry, announces its unaudited results for the six months ended 30 June
2024 ("HY 24" or the "Period").
Having achieved satisfactory results in HY 24, the Board expects that for the
year ending 31 December 2024 ("FY 24") the Group's results will be in line
with market expectations.
Commenting, Chris Lee, Chief Executive Officer of The Pebble Group said: "We
expect our full year performance to be in line with market expectations and
have made strong operational progress in the period. The Group's robust
financial profile and market leading businesses leave us well-placed to gain
market share in the circa $50bn global promotional products market.
"I am also delighted to welcome Anne de Kerckhove to The Pebble Group as our
Non-Executive Chair. Anne's significant experience will further strengthen the
Board's expertise and be particularly valuable as we push to deliver
Facilisgroup's technology and product innovation strategy."
Financials
Statutory results HY 24 HY 23 Change FY 23
Revenue £60.8m £63.3m -4% £124.2m
Gross profit margin 44.7% 42.8% +1.9ppt 43.6%
Operating profit £3.2m £3.3m -3% £8.0m
Profit before tax £2.9m £3.1m -6% £7.4m
Basic earnings per share 1.36p 1.37p -1% 3.46p
Other financial highlights HY 24 HY 23 Change FY 23
Adjusted EBITDA(1) £7.4m £7.5m -1% £16.0m
Net cash(2) £4.9m £4.2m +£0.7m £15.9m
Adjusted basic earnings per share(3) 1.87p 2.08p -10% 4.60p
Financial highlights
· Group Adjusted EBITDA in line with prior year at £7.4m
· Gross profit margins continue to expand, up 1.9 percentage points to
44.7%, driven by improved margins at Brand Addition of 35.3% (HY 23: 33.2%)
· Customer retention remains excellent across the Group as our services
continue to resonate well with our customers, underpinning growth
opportunities
· Facilisgroup: Revenue, in home currency, for HY 24 of USD11.3m (HY
23: USD11.3m) generating USD5.4m Adjusted EBITDA, slightly ahead of prior year
· Brand Addition: Revenue for HY 24 of £51.9m (HY 23: £54.2m)
generating £4.6m Adjusted EBITDA, slightly ahead of prior year
· Balance sheet remains strong with cash generated funding the Group's
capital investment to support its growth strategy whilst continuing to
increase shareholder returns
· On 6 September 2024, £0.8m of up to £5.0m has been returned to
Shareholders under the Share Buyback Programme launched in May 2024 and the
Group grew its dividend paid in in HY 24 by 100% to £2.0m (HY 23: £1.0m)
Business highlights
· In Facilisgroup:
· Appointed our first Chief Product Officer, focused on the refinement
and delivery of our technology strategy which follows on from the leadership
change in late 2023
· At 6 September 2024, Partner numbers were 240 (31 December 2023: 242)
with 12 quality new Partners added to date in 2024. Underlying Partner
retention rate remains excellent at circa 98%
· Key indicators of Gross Merchandise Value ("GMV") (+5%) and spend
through our Preferred Suppliers (+6%) have returned to growth
· Capitalised investment into new Facilisgroup technology products
reducing in the year with further reduction planned for 2025 as the major new
product investment cycle is now behind us
· In Brand Addition:
· Revenue has recovered well following a challenging second half in
2023
· High client retention levels continue
· Gross margin strength and disciplined cost management is supporting
the Group's profitability in uncertain market conditions
· Appointed a Global Marketing Director to evolve the business's
approach to new client acquisition
Outlook and Post Period update
· The Board expects FY 24 results to deliver on its market expectations
· Appointment of Anne de Kerckhove as Non-Executive Chair, bringing
significant experience and further strengthening the Board's technology
expertise following the appointment of Non-Executive Director, David Moss in
June 2023
(1) Adjusted EBITDA means operating profit before depreciation, amortisation and
share-based payment charge/credit
(2) Net cash is calculated as cash and cash equivalents less borrowings (excluding
lease liabilities)
(3) Adjusted basic earnings per share ("EPS") represents Adjusted Earnings meaning
profit after tax before amortisation of acquired intangible assets and
share-based payment charge/credit divided by a weighted average number of
shares
Presentation for Analysts and Investors
A presentation for analysts and investors with Q&A will take place at
8:00am today by webinar.
Please register to attend via this link:
The Pebble Group HY 24 Results Presentation
(https://events.teams.microsoft.com/event/e4c2b36e-70f8-4639-a76e-b59eb67bb49f@d78da0af-dec0-4c18-b3dc-54c78f21f08f)
A copy of the presentation is available on the Investors section of The Pebble
Group's website at https://www.thepebblegroup.com/investors/
(https://www.thepebblegroup.com/investors/)
Presentation for retail investors
The management team is hosting a separate online presentation for retail
investors with Q&A at 1:00pm on Wednesday 11 September 2024. To
participate, please register with PI World:
https://bit.ly/PEBB_H124_results_webinar
(https://bit.ly/PEBB_H124_results_webinar)
A recording of this presentation will be made available on the Investors
section of The Pebble Group's website at
https://www.thepebblegroup.com/investors/
(https://www.thepebblegroup.com/investors/)
Enquiries:
The Pebble Group +44 (0) 750 012 4121
Chris Lee, Chief Executive Officer
Claire Thomson, Chief Financial Officer
Panmure Liberum (Nominated Adviser and Broker) +44 (0) 20 3100 2000
Edward Mansfield
Will King
Josh Moss
Temple Bar Advisory (Financial PR) +44 (0) 207 183 1190
Alex Child-Villiers pebble@templebaradvisory.com (mailto:pebble@templebaradvisory.com)
Alistair de Kare-Silver
Sam Livingstone
About The Pebble Group
The Pebble Group is a provider of digital commerce, products and related
services to the global promotional products industry, comprising two
differentiated businesses, Facilisgroup and Brand Addition, focused on
specific areas of the promotional products market. For further information,
please visit www.thepebblegroup.com (http://www.thepebblegroup.com/) .
CHIEF EXECUTIVE OFFICER'S REVIEW
Summary of results
We are satisfied with the Group's financial performance in HY 24 achieving
Revenue of £60.8m (HY 23: £63.3m), Adjusted EBITDA of £7.4m (HY 23: £7.5m)
and Operating profit of £3.2m (HY 23: £3.3m).
The Group continues to have a strong balance sheet and our working capital
cycle remains disciplined and in a consistent cycle with prior years. As a
result of the Group's strong cash generation, net cash at 30 June 2024 was
£4.9m (30 June 2023: £4.2m, 31 December 2023: £15.9m) following cash
distributions of £2.6m in HY 24 (HY 23: £1.0m) through the previously
announced dividend (£2.0m) and Share Buyback Programme (£0.6m).
Introduction
The Pebble Group's core competency is to use its technology and sustainability
expertise, deep industry understanding and global footprint to create
long-term relationships and grow its market share in the circa $50 billion
promotional products market. Our two businesses, Facilisgroup and Brand
Addition, hold market leading and differentiated positions in this industry,
delivering strong margins and cash generation.
The Group has significantly enhanced its senior talent pool over the last year
and today we welcome the appointment of Anne de Kerckhove as our new
Non-Executive Chair. Anne brings a wealth of relevant skills to the Group and
further advances the technology sector expertise that was added to the Board
in 2023 by the appointment of Non-Executive Director David Moss, co-founder of
Blue Prism.
At Facilisgroup, following a change of leadership in late 2023, strong
operational progress has been made. We are pleased to have appointed our first
Chief Product Officer, focused on the refinement and delivery of our
technology and product innovation strategy, a crucial part of advancing
towards our medium-term aspirations. I have continued to directly lead the
business, deepening my connection with its Partners (customers), Preferred
Suppliers and team. These important relationships have strengthened over this
time and leave the business well positioned for sustainable growth. The Board
is currently carefully considering next steps regarding the leadership of
Facilisgroup, to ensure it has the required depth and breadth of expertise for
the next stage of its development.
At Brand Addition, we have appointed a Global Marketing Director to evolve the
business's approach to new client acquisition alongside supporting the
development of existing client relationships.
Our approach to the market and the financial performance in the Period of both
Facilisgroup and Brand Addition is described below.
Facilisgroup: providing a digital commerce platform for promotional products
businesses in North America
Revenue and profit analysis
HY 24 HY 23 FY 23
Recurring revenue £8.5m £8.6m £17.0m
Other revenue £0.4m £0.6m £0.9m
Total revenue £8.9m £9.2m £17.9m
Gross profit margin 100% 100% 100%
Adjusted EBITDA £4.2m £4.3m £8.9m
Adjusted EBITDA margin 47% 47% 50%
Facilisgroup revenue in USD, the home currency of the business, was in line
with HY 23. In GBP, the Group's reporting currency, there was a decrease of
£0.3m (3% on HY 23) due to foreign exchange rates compared to prior year.
Facilisgroup's growth record since the Group listed on AIM in late 2019 is
robust, with a 4-year CAGR to 30 June 2024 of 15%. The reduced Annual
Recurring Revenue ("ARR") growth in HY 24 compared to prior periods reflects
that our fee model is underpinned by the GMV value that is placed through our
technology and the attention that has been placed on significant operational
progress in the last 12 months.
To recap, the income model for our ARR has two elements:
1. Technology Subscription Fee: Fixed annually and paid monthly by our Partners
based on the GMV in the prior calendar year; and
2. Preferred Supplier Activity Fee: Accrued monthly and paid twice yearly by our
Preferred Suppliers based upon the in-month purchases through these contracted
Preferred Suppliers.
In 2023, GMV was in line with the prior year due to a broader market slowdown,
indicating that our Technology Subscription Fee for existing Partners will be
broadly flat in 2024. Growth in 2024 will be predominantly driven by
additional Partner wins from 2023 and 2024, plus increasing purchases through
our Preferred Suppliers compared to prior year.
The activity on these key forward indicators in HY 24 has improved compared to
prior year as GMV in HY 24 increased by 5% to USD724m (HY 23: USD688m) and
Preferred Supplier Purchases increased by 6% to USD240m (HY 23: USD227m). This
increase is predominantly from the contribution of recently added new
Partners. Improvements in the macroeconomic environment would be expected to
contribute to further increasing GMV and Preferred Supplier Purchases
supporting future income growth when Technology Subscription Fees are renewed
in January 2025.
Partner numbers at 6 September 2024 were 240 (31 December 2023: 242) including
12 new quality Partner wins. Strong Partner retention rates continue. Within
our Partner attrition, 9 Partners were acquired by other businesses and 1
Partner was exited by Facilisgroup, leaving underlying attrition of 4 and a
retention rate of 98%. A key area of operational focus in the last 12 months
has been improvements in our sales organisation and go-to-market strategy
where we have an identified target list of 1,600 businesses and a growing
pipeline.
Our strategy to scale Facilisgroup is focused on driving GMV through our
technology, delivering services that provide value to support the "Attach
Rate" percentage derived from the amount of income earned against this GMV.
Below we share the four principal strategies for growth to unlock the large
value opportunity and alongside each, summarise the operational progress that
has been made.
Strategy for growth Progress in last 12 months
1. Retain existing Partners through supporting their workflow efficiency and · Improved relationships, supporting retention
growth and consequently the GMV throughput of their businesses
· Investment in technology to maintain a market leading Product
proposition
· Learning and education initiatives to influence Partner GMV
2. Winning more Partners, gaining market share within our existing Total · Refocussed on a higher quality and scale of new Partner additions
Addressable Market ("TAM")
· More knowledgeable, experienced sales team, increasing the new
Partner pipeline
3. Concentrating Partner purchases through our Preferred Suppliers · Deepening relationships with top-tier Preferred Suppliers including
fewer, higher quality events
· Utilising large data sources created by USD1.4bn of GMV to improve
the Preferred Supplier purchases
4. New product development, bringing additional technology to market to grow the · Stores: eCommerce Platform
services to our existing Partners and increase our TAM within the North
American promotional products market Through its most significant capital investment period.
Contributing to new Partner acquisition and retention
Currently: 54 customers
Focus is on targeting existing Partners as our principal route to additional
product uptake
· Orders: Order workflow for small sized distributors
Through its most significant capital investment period.
Currently: 45 beta customers
Focus is on integration with our Preferred Suppliers to support product usage
We have chosen to invest capital into new product development (Stores and
Orders) over the last three years. In 2025, our aim is for Facilisgroup's
total capitalised product development to continue to reduce.
We believe that Facilisgroup has made strong operational progress and with its
leading market position, growth potential and excellent profit margins is
well-placed to continue to gain market share and drive value for the Group.
Brand Addition: providing promotional products and related services under
contract to many of the world's most recognisable brands
Revenue and profit analysis
HY 24 HY 23 FY 23
Revenue £51.9m £54.2m £106.3m
Gross profit £18.3m £18.0m £36.3m
Gross profit margin 35.3% 33.2% 34.1%
Adjusted EBITDA £4.6m £4.5m £9.5m
Adjusted EBITDA margin 8.9% 8.3% 8.9%
Brand Addition revenue has recovered well in HY 24 following the previously
announced lower than expected revenues in the last six months of 2023, driven
primarily by challenging macroeconomic conditions leading to a reduction in
promotional marketing spend by our clients in the Technology and Consumer
sectors.
HY 24 revenue was £51.9m, 4.2% behind HY 23. In HY 24, there has been some
recovery in our Technology clients which are slightly ahead of HY 23. Clients
in our Consumer sector represent most of the difference in total revenue
compared to HY 23.
Gross margins have increased over the last two years to 35.3% in HY 24 (HY 23:
33.2%, HY 22: 29.9%) reflecting the value being created by the business for
its clients. Alongside this, careful cost management has resulted in EBITDA of
£4.6m (HY 23: £4.5m), slightly ahead of prior year.
Brand Addition supports its clients - which include many of the best-known
brands in the world - by providing a range of complex services to deliver
promotional merchandise strategies. These services are underpinned by
technology, creative product solutions with a strong and consistent
sustainability focus, delivered across multiple geographies. We believe that
Brand Addition is one of the few businesses with the skills, knowledge and
experience to provide this level of service at scale and this supports its
high client retention levels.
The majority of Brand Addition's revenue is generated through approximately 70
client contracts and, with a new business development target list of 800
companies, Brand Addition has a large addressable market to grow into. Current
new business tendering activity is in line with previous periods, albeit final
decision making for the appointment of new contracts has been slower than
historically experienced.
In such an environment, we are focussed on protecting our profitability
through strengthening our gross margin and prudently managing our cost base.
Throughout the period, client retention has remained strong which supports the
long-term growth and success of the business as market conditions improve.
At the end of August 2024 revenues are broadly in line with the same period in
2023.
Environmental, Social and Governance ("ESG")
In alignment with our four ESG cornerstones, during 2024 we have continued to
drive action to measure and reduce carbon emissions and implement sustainable
practices. We have conducted our first Carbon Disclosure Project submission,
enhancing transparency around our climate change initiatives. Following the
achievement of the Race Equality Code Quality Mark award in 2023, we have
maintained focus on Diversity, Equality and Inclusion with Brand Addition
receiving the Living Wage Foundation accreditation and Facilisgroup
relaunching its Women's Empower initiative.
The Group is expected to publish its next ESG report in 2025 alongside its
2024 Annual Report and Accounts, providing a detailed update on our actions
and progress.
Group outlook
From our assessment of recent sales activity, gross margin run rates and cost
commitments, the Board expects FY 24 Group results to be in line with market
expectations.
Good operational progress has been made in the last 12 months, delivering a
solid foundation to support growth opportunities in the substantial market in
which the Group operates. This is underpinned by a robust balance sheet and
strong cash generation.
Whilst concentrating on our stated growth strategies, the Group will continue
to focus on driving shareholder returns, including the current Share Buyback
Programme.
Christopher Lee
Chief Executive Officer
9 September 2024
CHIEF FINANCIAL OFFICER'S REVIEW
HY 24 Results
HY 24 HY 23 FY 23
Unaudited Unaudited Audited
£'m £'m £'m
Revenue 60.8 63.3 124.2
Gross profit 27.2 27.1 54.2
Gross profit margin 44.7% 42.8% 43.6%
Adjusted EBITDA 7.4 7.5 16.0
Adjusted EBITDA margin 12.2% 11.8% 12.9%
Depreciation and amortisation (5.0) (3.4) (7.4)
Share-based payment credit/(charge) 0.8 (0.8) (0.6)
Operating profit 3.2 3.3 8.0
Net finance costs (0.3) (0.2) (0.6)
Profit before tax 2.9 3.1 7.4
Tax (0.6) (0.8) (1.6)
Profit for the Period 2.3 2.3 5.8
Weighted average number of shares 166,890,909 167,450,893 167,412,949
Adjusted Basic EPS 1.87p 2.08p 4.60p
Basic EPS 1.36p 1.37p 3.46p
Revenue
Revenue for the Period to 30 June was £60.8m (HY 23: £63.3m), a decrease of
£2.5m (3.9%) compared to the same period in 2023. Facilisgroup's total
revenues decreased £0.3m (3% on HY 23), flat when measured on a constant
currency basis. ARR growth when measured in USD was 1.4%. This is lower than
historic growth rates as the challenging economic backdrop to H2 23 impacted
partner GMV and consequently the Net Revenue Retention ("NRR") percentage
achieved on technology subscription fees which for FY 24 were 102% (FY 23:
110%). The balance of the movement relates to Brand Addition where overall, we
have seen a stabilisation of order intake trends when compared to those
experienced in H2 23.
Gross profit
Gross profit as a percentage of revenue continued to increase and was 44.7%
(HY 23: 42.8%). This 1.9 ppt increase relates principally to Brand Addition
where the business has successfully maintained the pricing increases
introduced in FY 23.
Adjusted EBITDA
Adjusted EBITDA was £7.4m (HY 23: £7.5m) made up as follows:
- Facilisgroup £4.2m (HY 23: £4.3m) maintaining excellent EBITDA margins of
47.2% (HY: 23 46.7%);
- Brand Addition £4.6m (HY 23: £4.5m) as improvements in gross margin offset
the impact of movements in sales; and
- Central costs £1.4m (HY 23: £1.3m). Increase of £0.1m.
The Adjusted EBITDA margin increased to 12.2% (HY 23: 11.8%) as a result of
improved margins at Brand Addition.
Depreciation and amortisation
The total charge for the Period was £5.0m (HY 23: £3.4m) of which £3.9m (HY
23: £2.2m) was the amortisation of intangible assets. The amortisation of
intangible assets charge in HY 24 includes a one-off amount of £1.3m to align
the amortisation period for acquired intangible software assets (previously 5
years) with that of those which are internally generated (3 years). The charge
for the amortisation of acquired intangible assets in FY 24 is expected to be
£2.2m and for FY 25 circa £0.6m.
Share-based payments
The total credit for the Period under IFRS 2 "Share-based payments" was £0.8m
(HY 23: charge of £0.8m) and relates to the 2022, 2023 and 2024 awards made
under The Pebble Group Long Term Incentive Plan ("LTIP") and Sharesave Plan.
The credit reflects the decrease in the number of equity instruments expected
to vest under the non market based performance conditions of the 2022 and 2023
LTIP awards.
Operating profit
Operating profit for the Period was £3.2m (HY 23: £3.3m).
Taxation
The tax charge for the Period was £0.6m (HY 23: £0.8m) and is based on the
full year Group expected tax rate for 2024.
Basic Earnings per share
The earnings per share analysis in note 5 covers both adjusted earnings per
share (profit attributable to equity shareholders before amortisation of
acquired intangibles and share-based payment charge/credit divided by the
weighted average number of shares in issue during the Period), and basic
earnings per share (profit attributable to equity holders divided by the
weighted average number of shares in issue during the Period). Adjusted
earnings were £3.1m (HY 23: £3.5m) meaning adjusted basic earnings per
share was 1.87 pence per share (FY 23: 2.08 pence per share), a decrease
of 0.21 pence per share. Basic earnings per share was 1.36 pence per share
(FY 23: 1.37 pence per share), a decrease of 0.01 pence per share.
Dividends
In March 2024, the Board announced a final dividend payment in respect of FY
23 confirming its intention to maintain a progressive dividend policy of
making dividend payments of circa 30% of profit after tax. The Board remains
committed to this decision but does not consider the introduction of an
interim dividend payment necessary at this time. An update on the dividend
payment in respect of FY 24 will be provided at the time of the full year
announcement in March 2025.
Cash Flow
The Group had a cash balance of £4.9m at 30 June 2024 (30 June
2023: £4.2m) after distributions of £2.6m (HY 23: £1.0m) through the
previously announced dividend and Share Buyback Programme.
Cash flow for the Period is set out below:
HY 24 HY 23 FY 23
Unaudited Unaudited Audited
£'m £'m £'m
Adjusted EBITDA 7.4 7.5 16.0
Movement in working capital (9.4) (9.7) 0.7
Capital expenditure (3.7) (4.0) (8.6)
Leases (0.8) (0.9) (1.6)
Operating cash flow (6.5) (7.1) 6.5
Tax paid (1.6) (1.5) (2.5)
Net finance cash flows (0.3) (0.3) (0.6)
Dividend paid (2.0) (1.0) (1.0)
Purchase of own shares (0.6) - -
Purchase of own shares by EBT (0.1) - (0.4)
Exchange gain/(loss) 0.1 (1.0) (1.2)
Net cash flow (11.0) (10.9) 0.8
The outflow in working capital in the Period was £9.4m (HY 23: £9.7m). This
is in line with the normal in-year cycle which peaks in Q3.
Capital expenditure in the Period was £3.7m (HY 23: £4.0m). This spend
relates principally to investment in the Facilisgroup digital commerce
platform. This reduction aligns with our previous statements that FY 23 would
be the peak of capital investment into new product development.
Lease payments relate to leases capitalised in accordance with IFRS 16
"Leases".
Cash and liquidity
The Group's working capital cycle is unwinding as expected. The high point
experienced in the period from June to August 2024 is reducing, as we progress
towards the year end, with clients and Partners continuing to pay to agreed
terms.
The Group had Net cash of £6.6m at 6 September 2024 and continues to
demonstrate an attractive profit to cash conversion. At the full year end, 31
December 2024 we expect Net cash to be circa £15m after a Dividend payment of
£2.0m and assumed full year returns to Shareholders under the ongoing Share
Buyback Programme of £2.0m (31 December 2023: £15.9m, Dividend £1.0m, Share
Buyback Programme £Nil).
Claire Thomson
Chief Financial Officer
9 September 2024
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
Notes £'000 £'000 £'000
Revenue 60,753 63,317 124,171
Cost of goods sold (33,573) (36,188) (69,988)
Gross profit 27,180 27,129 54,183
Operating expenses (23,991) (23,810) (46,185)
Operating profit 3,189 3,319 7,998
Analysed as:
Adjusted EBITDA(1) 6 7,354 7,480 15,978
Depreciation 9 (1,127) (1,115) (2,248)
Amortisation 8 (3,853) (2,224) (5,184)
Share-based payment credit/(charge) 13 815 (822) (548)
Total operating profit 3,189 3,319 7,998
Finance expense (281) (266) (589)
Profit before taxation 2,908 3,053 7,409
Income tax expense 4 (640) (751) (1,614)
Profit for the period 2,268 2,302 5,795
Basic earnings per share 5 1.36p 1.37p 3.46p
Diluted earnings per share 5 1.36p 1.37p 3.45p
1 Adjusted EBITDA, which is defined as operating profit before depreciation,
amortisation and share-based payment credit/charge, is a non-GAAP metric used
by management and is not an IFRS disclosure.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Profit for the period 2,268 2,302 5,795
Items that may be subsequently reclassified to profit and loss
Currency translation differences 130 (1,901) (2,068)
Other comprehensive income/(expense) for the period 130 (1,901) (2,068)
Total comprehensive income for the period 2,398 401 3,727
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
As at As at As at 31 December
30 June 30 June 2023
2024 2023
Notes £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 8 61,070 60,353 61,307
Property, plant and equipment 9 7,765 8,729 8,306
Deferred tax asset 281 270 282
Total non-current assets 69,116 69,352 69,895
Current assets
Inventories 15,472 14,788 11,852
Trade and other receivables 32,595 36,901 30,158
Current tax asset 250 - -
Cash and cash equivalents 4,909 4,184 15,898
Total current assets 53,226 55,873 57,908
Total assets 122,342 125,225 127,803
Liabilities
Non-current liabilities
Lease liability 10 5,650 6,795 6,130
Deferred tax liability 1,926 2,370 2,365
Total non-current liabilities 7,576 9,165 8,495
Current liabilities
Lease liability 10 1,559 1,496 1,494
Trade and other payables 25,708 28,403 28,965
Current tax liability 118 397 381
Total current liabilities 27,385 30,296 30,840
Total liabilities 34,961 39,461 39,335
Net assets 87,381 85,764 88,468
Equity
Share capital 11 1,665 1,675 1,675
Share premium 11 78,451 78,451 78,451
Own share reserve (255) - (227)
Capital reserve 135 125 125
Merger reserve (103,581) (103,581) (103,581)
Translation reserve (1,075) (1,038) (1,205)
Share-based payment reserve 1,098 2,671 2,005
Retained earnings 110,943 107,461 111,225
Total equity 87,381 85,764 88,468
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium Own share reserve Capital reserve Merger reserve Translation reserve Share-based payment reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 1,675 78,451 - 125 (103,581) 863 1,892 106,164 85,589
Profit for the period - - - - - - - 2,302 2,302
Other comprehensive expense for the period - - - - - (1,901) - - (1,901)
Total comprehensive (expense)/income - - - - - (1,901) - 2,302 401
Employee share schemes - value of employee services - - - - - - 743 - 743
Deferred tax on employee share schemes - - - - - - 36 - 36
Dividend paid - - - - - - - (1,005) (1,005)
Total transactions with owners recognised in equity - - - - - - 779 (1,005) (226)
At 30 June 2023 1,675 78,451 - 125 (103,581) (1,038) 2,671 107,461 85,764
Profit for the period - - - - - - - 3,493 3,493
Other comprehensive expense for the period - - - - - (167) - - (167)
Total comprehensive (expense)/income - - - - - (167) - 3,493 3,326
Purchase of own shares by EBT - - (395) - - - - - (395)
Employee share schemes - value of employee services - - 168 - - - (607) 271 (168)
Deferred tax on employee share schemes - - - - - - (59) - (59)
Total transactions with owners recognised in equity - - (227) - - - (666) 271 (622)
At 31 December 2023 1,675 78,451 (227) 125 (103,581) (1,205) 2,005 111,225 88,468
Profit for the period - - - - - - - 2,268 2,268
Other comprehensive income for the period - - - - - 130 - - 130
Total comprehensive income - - - - - 130 - 2,268 2,398
Purchase of own shares (10) - - 10 - - - (589) (589)
Purchase of own shares by EBT - - (109) - - - - - (109)
Employee share schemes - value of employee services - - 81 - - - (910) 44 (785)
Deferred tax on employee share schemes - - - - - - 3 - 3
Dividend paid - - - - - - - (2,005) (2,005)
Total transactions with owners recognised in equity (10) - (28) 10 - - (907) (2,550) (3,485)
At 30 June 2024 1,665 78,451 (255) 135 (103,581) (1,075) 1,098 110,943 87,381
The Group has an Employee Benefit Trust (EBT) to administer share plans and to
acquire shares, using funds contributed by the Group, to meet commitments to
employee share schemes. At 30 June 2024, the EBT held 458,382 shares (30 June
2023: nil, 31 December 2023: 412,637 shares).
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
Notes £'000 £'000 £'000
Profit before taxation 2,908 3,053 7,409
Adjustments for:
Depreciation 9 1,127 1,115 2,248
Amortisation 8 3,853 2,224 5,184
Share-based payment (credit)/charge 13 (815) 822 548
Loss on disposal of fixed assets - 3 (18)
Finance expense 281 266 589
Cash flows from operating activities before changes in working capital
7,354 7,483 15,960
Change in inventories (3,645) 659 3,595
Change in trade receivables (2,561) (2,208) 4,535
Change in trade payables (3,184) (8,089) (7,422)
Cash flows (used in)/from operating activities (2,036) (2,155) 16,668
Income taxes paid (1,593) (1,545) (2,517)
Net cash flows (used in)/from operating activities (3,629) (3,700) 14,151
Cash flows from investing activities
Purchase of property, plant and equipment 9 (194) (349) (882)
Purchase of intangible assets 8 (3,491) (3,687) (7,648)
Net cash flows used in investing activities (3,685) (4,036) (8,530)
Cash flows from financing activities
Lease payments - capital (810) (919) (1,600)
Lease payments - interest (188) (199) (399)
Interest paid (42) (67) (190)
Dividend paid 7 (2,005) (1,005) (1,005)
Share-based payments - cash-settled (7) - -
Purchase of own shares 11 (589) - -
Purchase of own shares by EBT 11 (109) - (395)
Net cash flows used in financing activities (3,750) (2,190) (3,589)
Net cash flows (11,064) (9,926) 2,032
Cash and cash equivalents at beginning of period 15,898 15,058 15,058
Effects of exchange rate changes 75 (948) (1,192)
Cash and cash equivalents at end of period 4,909 4,184 15,898
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The principal activity of The Pebble Group plc (the "Company") is that of a
holding company and the principal activity of the Company and its subsidiaries
(the "Group") is the sale of digital commerce, products and related services
to the promotional merchandise industry. The Group has two segments: Brand
Addition; and Facilisgroup. For Brand Addition, this is the sale of
promotional products internationally, to many of the world's best-known
brands. For Facilisgroup, this is the provision of digital commerce,
consolidated buying power and community learning and networking events to SME
promotional product distributors in North America, its Partners, through
subscription-based services.
The Company was incorporated on 27 September 2019 in the United Kingdom and is
a public company limited by shares registered in England and Wales. The
registered office of the Company is Broadway House, Trafford Wharf Road,
Trafford Park, Manchester, England M17 1DD. The Company registration number is
12231361.
2. BASIS OF PREPARATION
These Condensed consolidated interim financial statements of the Group are for
the 6 months ended 30 June 2024. They have been prepared on the basis of the
accounting policies set out in the 2023 annual financial statements and in
accordance with the requirements of UK-adopted IAS 34 "Interim Financial
Reporting".
The Condensed consolidated interim financial statements are unaudited and do
not comprise statutory accounts within the meaning of Section 434 of the
Companies Act 2006. They should be read in conjunction with the Group's 2023
Annual report and financial statements which were prepared in accordance with
UK-adopted international accounting standards in conformity with the
requirements of the Companies Act 2006. The 2023 Annual report and financial
statements have been filed with the Registrar of Companies. The auditors'
report on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain a statement under Section 498 of the
Companies Act 2006.
The Condensed consolidated interim financial statements are presented in the
Group's functional currency of Sterling and all values are rounded to the
nearest thousand (£'000) except when otherwise indicated.
Accounting Policies
The accounting policies adopted in the preparation of the Condensed
consolidated interim financial statements are consistent with those followed
in the preparation of the Group's annual financial statements for the year
ended 31 December 2023 as described in the Group's Annual report and financial
statements for that year and as available on the Group's website
(www.thepebblegroup.com (http://www.thepebblegroup.com) ).
Taxation
Taxes on income in the interim periods are accrued using management's best
estimate of the weighted average annual tax rate that would be applicable to
expected total annual earnings.
Forward looking statements
Certain statements in this report are forward looking with respect to the
operations, strategy, performance, financial condition and growth
opportunities of the Group. The terms "expect", "anticipate", "should be",
"will be", "is likely to", and similar expressions, identify forward-looking
statements. Although the Board believes that the expectations reflected in
these forward-looking statements are reasonable, by their nature these
statements are based on assumptions and are subject to a number of risks and
uncertainties. Actual events could differ materially from those expressed or
implied by these forward-looking statements. Factors which may cause future
outcomes to differ from those foreseen in forward-looking statements include,
without limitation: general economic conditions and business conditions in the
Group's markets, customers' expectations and behaviours, supply chain
developments, technology changes, the actions of competitors, exchange rate
fluctuations and legislative, fiscal and regulatory developments. Information
contained in these financial statements relating to the Group should not be
relied upon as a guide to future performance.
Alternative performance measures
Throughout the report, we refer to a number of alternative performance
measures (APMs). APMs are used internally by management to assess the
operating performance of the Group. These are non-GAAP measures and so other
entities may not calculate these measures in the same way and hence are not
directly comparable. The APMs that are not recognised under UK-adopted
international accounting standards are:
· Adjusted EBTIDA;
· Adjusted operating profit;
· Adjusted operating profit less finance expense; and
· Adjusted earnings.
A reconciliation of the APMs can be found in note 6.
The Board considers that the above APMs provide useful information for
stakeholders on the underlying trends and performance of the Group and
facilitate meaningful year-on-year comparisons.
Key risks and uncertainties
The Group has in place a structured risk management process which identifies
key risks and uncertainties along with their associated mitigants. The key
risks and uncertainties that could affect the Group's medium-term performance
and the factors that mitigate those risks are set out in the Group's Annual
Report which can be found on the Group's website (www.thepebblegroup.com
(http://www.thepebblegroup.com) ). These have not substantially changed in the
period, with the exception of the strategic risk associated with share price
performance, volatility and liquidity where, in its latest review, the Board
has increased the level of risk in response to the extended period of low
share price performance.
Going Concern statement
The Group meets its day-to-day working capital requirements through its own
cash balances and committed banking facilities. The Group has a £10m
Revolving Credit Facility to January 2026. In assessing the appropriateness of
adopting the going concern basis in the preparation of these financial
statements, the Directors have prepared cash flow forecasts and projections up
to 31 December 2025.
The forecasts and projections, which the Directors consider to be prudent,
have been further sensitised by applying reductions to revenue growth and
margin, to consider a severe but plausible downside. Under both the base and
sensitised case, the Group is expected to have headroom against covenants,
which are based on interest cover and net leverage, and a sufficient level of
financial resources available through existing facilities when the future
funding requirements of the Group are compared with the level of committed
available facilities. Based on this, the Directors are satisfied that the
Group has adequate resources to continue in operational existence for at least
12 months from the date of signing the financial statements. For this reason,
they continue to adopt the going concern basis in preparing the consolidated
interim financial statements.
3. SEGMENTAL ANALYSIS
The Chief Operating Decision Maker (CODM) has been identified as the Executive
Directors. The Directors have determined that the operating segments, based on
these financial statements, are: Brand Addition; Facilisgroup; and Central
operations.
Segment information about the above businesses is presented below.
Income statement for the 6 months ended 30 June 2024
Brand Addition Facilisgroup Central operations Total Group
£'000 £'000 £'000 £'000
Revenue 51,852 8,901 - 60,753
Cost of goods sold (33,573) - - (33,573)
Gross profit 18,279 8,901 - 27,180
Operating expenses (14,809) (7,910) (1,272) (23,991)
Operating profit/(loss) 3,470 991 (1,272) 3,189
Analysed as:
Adjusted EBITDA 4,559 4,245 (1,450) 7,354
Depreciation (793) (294) (40) (1,127)
Amortisation (671) (3,182) - (3,853)
Share-based payment credit 375 222 218 815
Total operating profit/(loss) 3,470 991 (1,272) 3,189
Finance expense (157) (30) (94) (281)
Profit/(loss) before taxation 3,313 961 (1,366) 2,908
Income tax (expense)/income (729) (211) 300 (640)
Profit/(loss) for the period 2,584 750 (1,066) 2,268
Due to the timing on the delivery of orders, the Brand Addition segment of The
Pebble Group plc traditionally raises a higher number of invoices in the
period July to December which results in The Pebble Group plc's performance
being weighted to the second half of the year.
All the above revenues are generated from contracts with customers.
Income statement for the 6 months ended 30 June 2023
Brand Addition Facilisgroup Central operations Total Group
£'000 £'000 £'000 £'000
Revenue 54,153 9,164 - 63,317
Cost of goods sold (36,188) - - (36,188)
Gross profit 17,965 9,164 - 27,129
Operating expenses (15,300) (7,002) (1,508) (23,810)
Operating profit/(loss) 2,665 2,162 (1,508) 3,319
Analysed as:
Adjusted EBITDA 4,457 4,272 (1,249) 7,480
Depreciation (783) (295) (37) (1,115)
Amortisation (670) (1,554) - (2,224)
Share-based payment charge (339) (261) (222) (822)
Operating profit/(loss) 2,665 2,162 (1,508) 3,319
Finance expense (176) (22) (68) (266)
Profit/(loss) before taxation 2,489 2,140 (1,576) 3,053
Income tax (expense)/income (612) (526) 387 (751)
Profit/(loss) for the period 1,877 1,614 (1,189) 2,302
Income statement for the year ended 31 December 2023
Brand Addition Facilisgroup Central operations Total Group
£'000 £'000 £'000 £'000
Revenue 106,276 17,895 - 124,171
Cost of goods sold (69,988) - - (69,988)
Gross profit 36,288 17,895 - 54,183
Operating expenses (30,084) (13,514) (2,587) (46,185)
Operating profit/(loss) 6,204 4,381 (2,587) 7,998
Analysed as:
Adjusted EBITDA 9,491 8,851 (2,364) 15,978
Depreciation (1,640) (571) (37) (2,248)
Amortisation (1,335) (3,849) - (5,184)
Share-based payment charge (312) (50) (186) (548)
Total operating profit/(loss) 6,204 4,381 (2,587) 7,998
Finance expense (345) (67) (177) (589)
Profit/(loss) before taxation 5,859 4,314 (2,764) 7,409
Income tax expense (891) (700) (23) (1,614)
Profit/(loss) for the year 4,968 3,614 (2,787) 5,795
Statement of financial position as at 30 June 2024
Brand Addition Facilisgroup Central operations Total Group
£'000 £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 38,602 22,468 - 61,070
Property, plant and equipment 4,863 2,632 270 7,765
Deferred tax asset 171 - 110 281
Total non-current assets 43,636 25,100 380 69,116
Current assets
Inventories 15,472 - - 15,472
Trade and other receivables 27,067 5,298 230 32,595
Current tax asset (67) - 317 250
Cash and cash equivalents 3,435 994 480 4,909
Total current assets 45,907 6,292 1,027 53,226
Total assets 89,543 31,392 1,407 122,342
Liabilities
Non-current liabilities
Lease liability 3,579 1,921 150 5,650
Deferred tax liability - 1,926 - 1,926
Total non-current liabilities 3,579 3,847 150 7,576
Current liabilities
Lease liability 1,228 282 49 1,559
Trade and other payables 23,386 1,807 515 25,708
Current tax liability (192) 310 - 118
Total current liabilities 24,422 2,399 564 27,385
Total liabilities 28,001 6,246 714 34,961
Net assets 61,542 25,146 693 87,381
Statement of financial position as at 30 June 2023
Brand Addition Facilisgroup Central operations Total Group
£'000 £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 38,095 22,258 - 60,353
Property, plant and equipment 5,744 2,750 235 8,729
Deferred tax asset 92 - 178 270
Total non-current assets 43,931 25,008 413 69,352
Current assets
Inventories 14,788 - - 14,788
Trade and other receivables 32,039 4,568 294 36,901
Cash and cash equivalents 2,477 1,555 152 4,184
Total current assets 49,304 6,123 446 55,873
Total assets 93,235 31,131 859 125,225
Liabilities
Non-current liabilities
Lease liability 4,618 2,177 - 6,795
Deferred tax liability - 2,370 - 2,370
Total non-current liabilities 4,618 4,547 - 9,165
Current liabilities
Lease liability 1,179 255 62 1,496
Trade and other payables 26,185 1,605 613 28,403
Current tax liability (56) 770 (317) 397
Total current liabilities 27,308 2,630 358 30,296
Total liabilities 31,926 7,177 358 39,461
Net assets 61,309 23,954 501 85,764
Statement of financial position as at 31 December 2023
Brand Addition Facilisgroup Central operations Total Group
£'000 £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 38,472 22,835 - 61,307
Property, plant and equipment 5,269 2,803 234 8,306
Deferred tax asset 158 - 124 282
Total non-current assets 43,899 25,638 358 69,895
Current assets
Inventories 11,852 - - 11,852
Trade and other receivables 24,956 4,921 281 30,158
Cash and cash equivalents 12,906 1,607 1,385 15,898
Total current assets 49,714 6,528 1,666 57,908
Total assets 93,613 32,166 2,024 127,803
Liabilities
Non-current liabilities
Lease liability 4,161 1,969 - 6,130
Deferred tax liability - 2,365 - 2,365
Total non-current liabilities 4,161 4,334 - 8,495
Current liabilities
Lease liability 1,195 299 - 1,494
Trade and other payables 26,519 2,006 440 28,965
Current tax liability (202) 583 - 381
Total current liabilities 27,512 2,888 440 30,840
Total liabilities 31,673 7,222 440 39,335
Net assets 61,940 24,944 1,584 88,468
4. INCOME TAX EXPENSE
The income tax expense for the 6 months ended 30 June 2024 is based upon
management's best estimate of the weighted average annual tax rate expected
for the full year ending 31 December 2024. The income tax expense is lower
than the standard rate of 25.0% due to tax relief that the Group is claiming
in relation to research and development costs it incurs. The income tax
expense for the year ended 31 December 2023 was also lower than the standard
rate of 23.5% due to lower standard income tax rates in overseas territories
as well as tax relief for research and development costs.
5. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the earnings attributable
to equity shareholders by the weighted average number of Ordinary Shares in
issue during the period.
For diluted earnings per share, the weighted average number of Ordinary Shares
in issue is adjusted to assume conversion of all potentially dilutive Ordinary
Shares. The Company has potentially dilutive Ordinary Shares arising from
share options granted to employees. Options are dilutive under the Group
Sharesave Plan where the exercise price together with the future IFRS 2 charge
of the option is less than the average market price of the Company's Ordinary
Shares during the period. Options under The Pebble Group plc Long Term
Incentive Plan, as defined by IFRS 2, are contingently issuable shares and are
therefore only included within the calculation of diluted earnings per share
if the performance conditions are satisfied at the end of the reporting
period, irrespective of whether this is the end of the vesting period or not.
The impact of the potentially dilutive share options issued under the LTIP on
29 March 2022, 28 March 2023 and 26 March 2024 and the SAYE on 6 October 2021
and 25 April 2023 is: nil for the 6 months ended 30 June 2024 (6 months ended
30 June 2023: nil, year ended 31 December 2023: 0.01p) in respect of statutory
earnings per share; and 0.01p for the 6 months ended 30 June 2024 (6 months
ended 30 June 2023: 0.01p, year ended 31 December 2023: 0.01p) in respect of
adjusted earnings per share.
The calculation of basic earnings per share is based on the following data:
Statutory earnings per share
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
Earnings (£'000)
Earnings for the purposes of basic and diluted earnings per share being profit 2,268 2,302 5,795
for the period attributable to equity shareholders
Number of shares
Weighted average number of shares for the purposes of basic earnings per share 166,890,909 167,450,893 167,412,949
Weighted average dilutive effects of conditional share awards 424,313 600,871 445,904
Weighted average number of shares for the purposes of diluted earnings per 167,315,222 168,051,764 167,858,853
share
Earnings per Ordinary Share
Basic earnings per Ordinary Share (pence) 1.36 1.37 3.46
Diluted earnings per Ordinary Share (pence) 1.36 1.37 3.45
Adjusted earnings per share
The calculation of adjusted earnings per share is based on the after-tax
adjusted profit after adding back certain costs as detailed in the table in
note 6. Adjusted earnings per share figures are given to exclude the effects
of amortisation of acquired intangible assets and share-based payment
charge/credit, all net of taxation, and are considered to show the underlying
performance of the Group.
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
Earnings (£'000)
Earnings for the purposes of basic and diluted adjusted earnings per share 3,116 3,479 7,708
being adjusted earnings
Number of shares
Weighted average number of shares for the purposes of basic adjusted earnings 166,890,909 167,450,893 167,412,949
per share
Weighted average dilutive effects of conditional share awards 424,313 600,871 445,904
Weighted average number of shares for the purposes of diluted adjusted 167,315,222 168,051,764 167,858,853
earnings per share
Adjusted earnings per Ordinary Share
Basic adjusted earnings per Ordinary Share (pence) 1.87 2.08 4.60
Diluted adjusted earnings per Ordinary Share (pence) 1.86 2.07 4.59
6. ALTERNATIVE PERFORMANCE MEASURES
Throughout the consolidated interim financial statements, we refer to a number
of alternative performance measures (APMs). A reconciliation of the APMs used
are shown below.
Adjusted EBTIDA
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Operating profit 3,189 3,319 7,998
Add back/(deduct):
Depreciation 1,127 1,115 2,248
Amortisation 3,853 2,224 5,184
Share-based payment (credit)/charge (815) 822 548
Adjusted EBITDA 7,354 7,480 15,978
Adjusted operating profit
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Operating profit 3,189 3,319 7,998
Add back/(deduct):
Amortisation charge on acquired intangible assets 1,847 709 1,901
Share-based payment (credit)/charge (815) 822 548
Adjusted operating profit 4,221 4,850 10,447
Adjusted operating profit less finance expense
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Adjusted operating profit 4,221 4,850 10,447
Deduct:
Finance expense (281) (266) (589)
Adjusted operating profit less finance expense 3,940 4,584 9,858
Adjusted earnings
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Profit for the period attributable to equity shareholders 2,268 2,302 5,795
Add back/(deduct):
Amortisation charge on acquired intangible assets 1,847 709 1,901
Share-based payment (credit)/charge (815) 822 548
Tax effect of the above (184) (354) (536)
Adjusted earnings 3,116 3,479 7,708
7. DIVIDENDS PAID AND PROPOSED
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Declared and paid during the period
Final dividend for 2023 of 1.2p per share (2022: 0.6p per share) 2,005 1,005 1,005
Proposed for approval at AGM (not recognised in the period)
Final dividend for 2023 of 1.2p per share 2,005
As per the Trust Deed, the EBT waived its entitlement to the dividend on the
shares held of 367,942 shares.
8. INTANGIBLE ASSETS
Goodwill Customer relationships Software and development costs Work in progress Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 36,139 11,322 24,877 4,085 76,423
Additions - - 401 3,286 3,687
Reclassifications - - 3,644 (3,644) -
Exchange differences (168) (530) (655) (188) (1,541)
At 30 June 2023 35,971 10,792 28,267 3,539 78,569
Additions - - 260 3,701 3,961
Disposals - - (186) - (186)
Reclassifications - - 556 (556) -
Exchange differences (7) (24) (17) (7) (55)
At 31 December 2023 35,964 10,768 28,880 6,677 82,289
Additions - - 145 3,346 3,491
Disposals - - (14) - (14)
Reclassifications - - 3,315 (3,315) -
Exchange differences 25 78 (43) 40 100
At 30 June 2024 35,989 10,846 32,283 6,748 85,866
Accumulated amortisation
At 1 January 2023 - 2,372 14,049 - 16,421
Charge for the period - 277 1,947 - 2,224
Exchange differences - (113) (316) - (429)
At 30 June 2023 - 2,536 15,680 - 18,216
Charge for the period - 273 2,687 - 2,960
Disposals - - (155) - (155)
Exchange differences - (10) (29) - (39)
At 31 December 2023 - 2,799 18,183 - 20,982
Charge for the period - 271 3,582 - 3,853
Disposals - - (14) - (14)
Exchange differences - 20 (45) - (25)
At 30 June 2024 - 3,090 21,706 - 24,796
Net book value
At 31 December 2022 36,139 8,950 10,828 4,085 60,002
At 30 June 2023 35,971 8,256 12,587 3,539 60,353
At 31 December 2023 35,964 7,969 10,697 6,677 61,307
At 30 June 2024 35,989 7,756 10,577 6,748 61,070
Within software and development costs, the amortisation charge for the 6
months ended 30 June 2024 includes £1,576,000 (6 months ended 30 June 2023:
£432,000, year ended 31 December 2023: £1,351,000) in respect of acquired
intangible assets. This includes a charge of £1,260,000 (6 months ended 30
June 2023: £nil, year ended 31 December 2023: £494,000) which has been
accelerated to align the useful lives of certain acquired intangible assets
with those that are internally generated.
The Group tests annually for impairment, at the year end, or more frequently
if there are indicators that goodwill might be impaired. There were no such
indicators as at 30 June 2024.
9. PROPERTY, PLANT AND EQUIPMENT
Fixtures and fittings Computer hardware Right-of-use assets Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2023 3,555 2,671 13,798 20,024
Additions 194 145 472 811
Disposals - (7) (345) (352)
Exchange differences (115) (77) (624) (816)
At 30 June 2023 3,634 2,732 13,301 19,667
Additions 51 481 44 576
Disposals - (343) (132) (475)
Exchange differences (3) 3 230 230
At 31 December 2023 3,682 2,873 13,443 19,998
Additions 79 115 404 598
Disposals - - (497) (497)
Exchange differences 6 (10) (18) (22)
At 30 June 2024 3,767 2,978 13,332 20,077
Accumulated depreciation
At 1 January 2023 2,640 1,572 6,320 10,532
Charge for the period 245 205 665 1,115
Disposals - (4) (345) (349)
Exchange differences (92) (48) (220) (360)
At 30 June 2023 2,793 1,725 6,420 10,938
Charge for the period 33 260 840 1,133
Disposals - (341) (126) (467)
Exchange differences 11 - 77 88
At 31 December 2023 2,837 1,644 7,211 11,692
Charge for the period 131 233 763 1,127
Disposals - - (497) (497)
Exchange differences 5 (5) (10) (10)
At 30 June 2024 2,973 1,872 7,467 12,312
Net book value
At 31 December 2022 915 1,099 7,478 9,492
At 30 June 2023 841 1,007 6,881 8,729
At 31 December 2023 845 1,229 6,232 8,306
At 30 June 2024 794 1,106 5,865 7,765
Right-of-use assets - net book value
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Leasehold property 5,506 6,655 5,943
Fixtures and fittings 177 43 100
Computer hardware 182 183 189
Total right-of-use assets - net book value 5,865 6,881 6,232
10. LEASES
Amounts recognised in the consolidated statement of financial position
In addition to the right-of-use assets included within note 9, the
consolidated statement of financial position shows the following amounts
relating to leases:
Lease liability
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Maturity analysis - contractual undiscounted cash flows:
Less than one year 1,862 1,912 1,807
More than one year, less than two years 1,818 1,688 1,729
More than two years, less than three years 1,597 1,684 1,722
More than three years, less than four years 1,080 1,465 1,165
More than four years, less than five years 921 1,019 1,004
More than five years 724 1,611 1,106
Total undiscounted lease liability at period end 8,002 9,379 8,533
Finance expense (793) (1,088) (909)
Total discounted lease liability at period end 7,209 8,291 7,624
Current 1,559 1,496 1,494
Non-current 5,650 6,795 6,130
7,209 8,291 7,624
Amounts recognised in the consolidated income statement
The consolidated income statement shows the following amounts relating to
leases:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Depreciation charge - leasehold property 700 602 1,365
Depreciation charge - fixtures and fittings 36 42 86
Depreciation charge - computer hardware 27 21 54
763 665 1,505
Interest expense (within finance expense) 188 199 399
11. SHARE CAPITAL
The authorised, issued and fully paid number of shares are set out below.
Ordinary Share Share
Shares 2024 capital premium
Number £ £
Ordinary Shares of 1p each:
At 1 January 2023, 30 June 2023 and 31 December 2023 167,450,893 1,674,509 78,451,312
Purchase of own shares (985,256) (9,853) -
At 30 June 2024 166,465,637 1,664,656 78,451,312
In May 2024, the Group commenced a share buyback programme to repurchase up to
£5 million of its own shares. During the 6 months ended 30 June 2024, 985,256
Ordinary Shares with a total nominal value of £9,853 were bought back by the
Company for a total consideration, including transaction costs, of £588,711,
charged to retained earnings. The Company subsequently cancelled these shares
which resulted in a reduction in share capital of £9,853, with a
corresponding increase in the capital reserve.
In the 6 months ended 30 June 2024, the EBT purchased a total of 194,085
Ordinary Shares at an average price of £0.56 per share, which were used to
satisfy the exercise of 148,340 LTIP options. The EBT did not sell any shares
and the remaining 458,382 shares are held by the Trust.
12. FINANCIAL INSTRUMENTS
The fair values of all financial instruments included in the consolidated
statement of financial position are a reasonable approximation of their
carrying values.
13. SHARE-BASED PAYMENTS
In the 6 months ended 30 June 2024, the Group operated equity-settled
share-based payment plans as described below.
The Group recognised total a total credit of £826,000 in respect of
equity-settled share-based payment transactions for the 6 months ended 30 June
2024 (6 months ended 30 June 2023: expense of £822,000, year ended 31
December 2023: expense of £548,000).
The Pebble Group plc Long Term Incentive Plan (LTIP)
Certain employees of the Company, along with other Group employees, have been
granted share options on 29 March 2022 28 March 2023 and 26 March 2024 under
the LTIP.
Details of the maximum total number of Ordinary Shares which may be issued in
future periods in respect of LTIP awards outstanding at 30 June 2024 are shown
below.
Number of shares
At 1 January 2023 3,357,530
Granted in the period 1,655,496
Lapsed in the period (60,789)
At 30 June 2023 4,952,237
Exercised in the period (303,558)
Lapsed in the period (1,433,726)
At 31 December 2023 3,214,953
Granted in the period 3,009,191
Exercised in the period (148,340)
Lapsed in the period (229,186)
Outstanding at 30 June 2024 5,846,618
Exercisable at 30 June 2024 424,313
The fair value at grant date is independently determined using an adjusted
form of the Black-Scholes model which includes a Monte Carlo simulation model
that takes into account the exercise price, the term of the option, the share
price at grant date, the expected price volatility of the underlying share
based on the AIM Price Index over the past 3 years, the expected dividend
yield and the risk-free interest rate for the term of the option. This
information in respect of the 2024 award in the period is shown below.
2024 award 2024 award
TSR condition AEPS condition
Share price at start of performance period 60.2p 60.2p
Share price at grant date 67.0p 67.0p
Exercise price £nil £nil
Expected volatility 12.14% -
Expected life 3 years 3 years
Expected dividend yield 1.78% -
Risk-free interest rate 4.11% -
Fair value per option 16.5p 67.0p
The vesting of these awards is subject to the Group achieving certain
performance targets under the LTIP. The options are split into two parts with
the amount of Part 1 options that will vest depending on achievement of the
Group's Basic Adjusted EPS (AEPS), which comprises 70% of the award, whilst
Part 2 depends on absolute total shareholder return (TSR) that will vest
depending on performance of the Company's Absolute TSR, which comprises 30% of
the award.
The Pebble Group plc Group Sharesave Plan
Certain eligible employees of the Company, along with other Group employees,
have been granted share options on 6 October 2021 and 25 April 2023 under the
SAYE.
Details of the maximum total number of Ordinary Shares which may be issued in
future periods in respect of SAYE awards outstanding at 30 June 2024 are shown
below.
Number of shares
At 1 January 2023 742,065
Lapsed in the period (245,839)
At 30 June 2023 496,226
Granted in the period 417,932
Lapsed in the period (235,811)
At 31 December 2023 678,347
Lapsed in the period (127,679)
Outstanding at 30 June 2024 550,668
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