REG - Quarto Group Inc - Half-year Report

QuartoAnnouncement

03/08/2021 13:30

RNS Number : 4450H
  
Quarto Group Inc
  
03 August 2021
  
 

The Quarto Group, Inc.
(the "Company", "Quarto", "Group")
 
Half-Year Results for the Six Months Ended 30 June 2021
 
The Quarto Group Inc. (LSE: QRT), the leading global illustrated book publisher, announces its unaudited half-year results for the six months ended 30 June 2021.
 




Results ($m)


H1 2021


H1 2020




Group Revenue


56.9


46.9




Adjusted1 Group Operating Profit/Loss


4.0


(1.8)




Group Operating Profit/Loss


4.0


(2.5)




Adjusted1 Profit/Loss before Tax


3.1


(3.3)




Profit/Loss before Tax


3.0


(4.0)




Profit/Loss after Tax


2.1


(3.0)




Net Debt2


16.4


37.4




 
1.     Adjusted measures are stated before amortization of acquired intangibles and exceptional items.
2.     The June 2020 figure has been restated to include Accrued Interest of $759k.
 
Headlines
•     Revenue up 21% at $56.9m against 2020.
•     Operating profit of $4m up from a loss of $1.8m, benefiting from the cost reduction program in 2018 and continued through 2020.
•     Net debt reduced in last 12 months by $21m (56%) to $16.4m driven by the cost reduction program, improved trading, dynamic inventory management and reduced finance costs.
 
•     Commenting on the results, Chief Executive, C.K. Lau said:
 
"This is an encouraging set of results following a year of challenge due to the Covid 19 pandemic. Revenue is 21% up year on year against a weak comparative in 2020. This has delivered an operating profit of $4m and net debt has reduced significantly during the period in what is seasonally our weak half of the year.
We are now focused on the critical second half as we expect the trading environment to be particularly challenging, especially with the volatility in freight, regarding capacity issues and freight costs. That said, we have the right plans in place to capture all possible opportunities and ensure a satisfactory year-end.
The Board remains focused on continuing its efforts to keep costs under control, drive sales, whilst maintaining the debt reduction and defining further growth strategies for 2022 and beyond."
- ENDS -
 
 
 
 
 
The Legal Identifier of the Company is 549300BJ2WPX3QUATW58.
 
For further information, please contact:
 
The Quarto Group Inc.                                   +44 (0)20 7700 6700
 
Daniel Logan, Group Finance Director
Michael Clarke, Company Secretary
 
About The Quarto Group
 
The Quarto Group (LSE: QRT) creates a wide variety of books and intellectual property products, with a mission to inspire life's experiences.  Produced in many formats for adults, children and the whole family, our products are visually appealing, information rich and stimulating.
 
The Group encompasses a diverse portfolio of imprints and businesses that are creatively independent and expert in developing long-lasting content across specific niches of interest.
 
Quarto sells and distributes its products globally in over 50 countries and 40 languages, through a variety of sales channels, partnerships and routes to market.
 
Quarto employs c.300 talented people in the US and the UK.  The group was founded in London in 1976. It is domiciled in the US and listed on the London Stock Exchange.
 
For more information, visit quarto.com or follow us on Twitter at @TheQuartoGroup.
 
 
 
 
CHIEF EXECUTIVE'S STATEMENT
 
 
SUMMARY
 
Trading was encouraging for the first six months of 2021.  Revenue was up 21% year on year at $56.9m against a weak comparative because of COVID 19 (H1 2020: $46.9m). Revenue was up 1% against 2019 ($56.4m).
 
Our Adult imprints performed strongly, with revenues up 24% year on year, and 3% ahead of 2019. Revenues from Children imprints was up 16% year on year, however against 2019, revenue was 4% down, with the US in particular seeing revenue decline. Gross profit margin was ahead of prior year at 31.8% (H1 2020: 22.7%) driven by a reduction in pre-publication amortization, by comparison, gross margin for H1 2019 was 21.5%.
 
The increased revenues and substantial benefits from the cost reduction program implemented in 2018 and which continued through 2020, has resulted in an adjusted group operating profit of $4.0m (H1 2020: loss of $1.8m). The adjusted profit before tax was $3.0m (H1 2020: loss of $3.3m). 
 
Both our US and UK reporting segments improved their trading performance year on year, resulting in a significant improvement in the Group's adjusted operating result, as shown in the table below.
 
Net debt at 30 June 2021 was $16.4m (H1 2020: $37.4m*) a decrease of $21m over the twelve-month period and a reduction of $3.4m in the six month period.  *See note 7. 
 
This strong cash generation has been driven by the cost reduction program, improved trading, dynamic inventory management and reduced finance costs. 
 
The book trade market in the first six months of 2021 proved to be resilient, recovering from the setback of 2020 and trading ahead of 2019, however the co-edition market is flat year on year, with the impact of COVID being felt. 
 
OPERATING REVIEW
 




Revenue ($m)


H1 2021


H1 2020


H1 2019




United States


36.3


29.2


36.7




United Kingdom


7.9


6.3


7.6




Rest of the World


6.6


5.1


5.0




Europe


6.1


6.3


7.1




Total Revenue


56.9


46.9


56.4




 


 


 


 




Adjusted Operating Profit / (Loss) ($m)


H1 2021


H1 2020


H1 2019




US Publishing


3.8


(0.4)


1.3




UK Publishing


1.0


(0.6)


(1.5)




Group overhead


(0.8)


(0.8)


(0.7)




Total adjusted operating profit / (loss)


4.0


(1.8)


(0.9)




 
Note: Revenue is shown by destination; adjusted operating profit / (loss) is shown by segment.
 
Whilst the number of published titles is in line with prior year, as a result of the actions taken during the pandemic, the Group's revenue increased year on year, driven by backlist sales and the re-opening of bricks and mortar bookstores.
 
UK-based Frances Lincoln Children's Books imprint continues to drive forward, with the Little People, Big Dreams series continuing to be a highlight, with over 4.6 million copies sold in the English language to date. We have expanded the list to include inspirational role models, such as RuPaul, David Attenborough and Captain Tom. US-based SmartLab continues to perform, with sales of Squishy Human Body selling over 112k units.
 
Revenues from Adult imprints were up across all imprints. In the US, our Beverly-based Adult imprints, especially Fair Winds Press and Cool Spring Press, continue to perform strongly led by our Gardening and Cookery titles. 
 
Co-edition sales are in line with prior year both in English and foreign language, however this is a drop on 2019, as our publishing partners eased back on H1 2021 acquisitions. We are starting to see these sales pick up; however, we are expecting this to be a challenging market. 
 
We have seen new opportunities in custom publishing driving revenue growth, and we expect this to become a larger part of our business-to-business revenue in the coming years.
 
International English language sales are up year on year, driven by Australia and Canada.
 
We continue to see a reduction in our financing costs, as we drive down the Group's net debt. 
 
OUTLOOK
 
As we move into H2 2021, and as the global economy continues to unlock, we expect to see online sales return to more normal volumes with sales from traditional books stores building, albeit from a lower base. Business to business sales are starting to show signs of green shoots, in particular through the custom channel. 
 
One area of concern is the volatility in freight, with capacity issues and freight costs increasing 3 to 4-fold since the turn of the year. We are also seeing pressure on print prices. We continue to look to mitigate these costs by using local printer suppliers and reviewing our inventory policy to ensure we print in the most efficient quantities. We expect this pressure on print and freight to increase our costs significantly. 
 
That said, the Group has the right plans in place to capture all possible opportunities and deliver a satisfactory second half. The Board remains focused on continuing its efforts to keep costs under control, drive sales, whilst maintaining the debt reduction and defining further growth strategies for 2022 and beyond.
 
On behalf of the Board, I would like to thank all our staff, readers, customers, suppliers and shareholders, across the world, for their continued commitment and support.
 
C.K. Lau
Chief Executive Officer
 
 
THE QUARTO GROUP, INC.
Condensed Consolidated Income Statement
For the six months ended 30 June 2021




 


Note


Six months to 
30 June 2021
Unaudited
 
$'000


Six months to 
30 June 2020
Unaudited
 
$'000


Year ended
31 December 2020
Audited
 
$'000




 


 


 


 


 




Continuing operations


 


 


 


 




Revenue


3


56,864


46,865


126,883




Cost of sales


 


(38,775)


(36,232)


(89,298)




 


 


 


 


 




Gross profit


 


18,089


10,633


37,585




 


 


 


 


 




Distribution costs


 


(3,562)


(2,937)


(7,132)




Impairment of financial assets


 


(689)


(696)


(1,571)




Administrative expenses 


 


(9,858)


(8,753)


(18,264)




 


 


 


 


 




 


 


 


 


 




Operating profit/(loss) before amortisation of acquired intangibles and exceptional items


 


3,980


(1,753)


10,618




 


 


 


 


 




Amortisation of acquired intangibles


 


(7)


(323)


(890)




Exceptional items


4


-


(421)


(446)




 


 


 


 


 




 


 


 


 


 




Operating profit/(loss)


3


3,973


(2,497)


9,282




 


 


 


 


 




Finance costs


 


(929)


(1,506)


(2,693)




 


 


 


 


 




Profit/(loss) before tax


 


3,044


(4,003)


6,589




 


 


 


 


 




Taxation


5


(895)


1,000


(2,020)




 


 


 


 


 




 


 


 


 


 




Profit/(loss) for the period


 


2,149


(3,003)


4,569




 


 


 


 


 




Attributable to:


 


 


 


 




 


 


 


 


 




Owners of the parent


 


2,149


(3,003)


4,569




 


 


 


 


 




Earnings/(loss) per share (cents)


 


 


 


 




 


 


 


 


 




From continuing operations


 


 


 


 




Basic


6


5.3


(8.1)


11.7




Diluted


6


5.3


(8.1)


11.6




 


 


 


 


 




 


 


 


 


 




 
 
 
THE QUARTO GROUP, INC.
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2021




 


Six months to 
30 June 2021
Unaudited
 
$'000


Six months to 
30 June 2020
Unaudited
 
$'000


Year ended
31 December 2020
Audited
 
$'000




 


 


 


 




Profit/(loss) for the period


2,149


(3,003)


4,569




 


 


 


 




Other comprehensive income which may be reclassified to profit or (loss)


 


 


 




Foreign exchange translation differences


255


(1,922)


1,087




Tax relating to items that may be reclassified to profit or loss


-


-


54




 


 


 


 




Total comprehensive income/(expense) for the period


2,404


(4,925)


5,710




 


 


 


 




Attributable to:


 


 


 




 


 


 


 




Owners of the parent


2,404


(4,925)


5,710




 
 
 
 
THE QUARTO GROUP, INC.
Condensed Consolidated Balance Sheet




At 30 June 2021


Note


30 June 2021
Unaudited
 
 


30 June 2020
Unaudited
*Restated
 


31 December 2020
Audited
 
 




 


 


$'000


$'000


$'000




Non-current assets


 


 


 


 




Goodwill


 


19,429


18,765


19,381




Other intangible assets


 


101


834


159




Property, plant and equipment


 


6,112


9,503


6,818




Intangible assets: Pre-publication costs


 


39,958


44,335


40,913




Deferred tax assets


 


3,604


3,331


3,604




Total non-current assets


 


69,204


76,768


70,875




 


 


 


 


 




Current assets


 


 


 


 




Inventories


 


17,366


16,813


15,465




Trade and other receivables


 


34,473


35,506


44,519




Cash and cash equivalents


7


19,044


11,547


22,079




 


 


 


 


 




Total current assets


 


70,883


63,866


82,063




 


 


 


 


 




Total assets


 


140,087


140,634


152,938




 


 


 


 


 




Current liabilities


 


 


 


 




Short term borrowings 


7


(3,905)


(5,000)


(41,819)




Trade and other payables  


 


(41,992)


(40,723)


(50,064)




Lease liabilities


 


(1,426)


(1,839)


(1,968)




Tax payable


 


(4,117)


(1,718)


(4,355)




 


 


 


 


 




Total current liabilities


 


(51,440)


(49,280)


(98,206)




 


 


 


 


 




Non-current liabilities


 


 


 


 




Medium and long-term borrowings


7


(31,498)


(43,940)


-




Deferred tax liabilities


 


(6,347)


(6,808)


(6,323)




Tax payable 


 


(386)


(441)


(386)




Lease liabilities


 


(4,289)


(6,995)


(4,310)




 


 


 


 


 




Total non-current liabilities


 


(42,520)


(58,184)


(11,019)




 


 


 


 


 




Total liabilities


 


(93,960)


(107,464)


(109,225)




 


 


 


 


 




Net assets


 


46,127


33,170


43,713




 


 


 


 


 




Equity


 


 


 


 




Share capital


 


4,089


4,089


4,089




Paid in surplus


 


48,701


48,701


48,701




Retained earnings and other reserves


 


(6,663)


(19,620)


(9,077)




Total equity


 


46,127


33,170


43,713




 
*See note 7 
 
 
THE QUARTO GROUP, INC.
 
Condensed Consolidated Statement of Changes in Equity for the six months ended 30 June 2021
 




 


Share capital


Paid in surplus


             Translation

reserve


 Retained earnings


Equity attributable to owners of the parent




 


$000


$000


$000


$000


$000




 


 


 


 


 


 




Balance at 1 January 2020


2,045


33,764


(6,748)


(8,007)


21,054




 


 


 


 


 


 




Loss for the period


-


-


-


(3,003)


(3,003)




Foreign exchange translation differences


-


-


(1,922)


-


(1,922)




 


 


 


 


 


 




Total comprehensive (expense)/income for the period


-


-


(1,922)


(3,003)


(4,925)




 


 


 


 


 


 




Share based raised


2,044


16,307


-


-


18,351




Costs of raising share capital


-


(1,370)


-


-


(1,370)




Share based payment charge


-


-


-


60


60




Transactions with owners


2,044


14,937


-


60


17,041




 
 
 


 


 


 


 


 




Balance at 30 June 2020


4,089


48,701


(8,670)


(10,950)


33,170




 


 


 


 


 


 




Balance at 1 January 2021


4,089


48,701


(5,607)


(3,470)


43,713




 


 


 


 


 


 




Profit for the period


-


-


-


2,149


2,149




Foreign exchange translation differences


-


-


255


-


255




 


 


 


 


 


 




Total comprehensive income for the period


-


-


255


2,149


2,404




 


 


 


 


 


 




Share based payment charge


-


-


-


10


10




 
 
 


 


 


 


 


 




Balance at 30 June 2021
 


4,089


48,701


(5,352)


(1,311)


46,127




 
 
 
THE QUARTO GROUP, INC.
Condensed Consolidated Statement of Changes in Equity for the year ended 31 December 2020
 




 


Share capital


Paid in surplus


             Translation

reserve


 Retained earnings


Equity attributable to owners of the parent




 


$000


$000


$000


$000


$000




 


 


 


 


 


 




Balance at 1 January 2020


2,045


33,764


(6,748)


(8,007)


21,054




 


 


 


 


 


 




Profit for the year


-


-


-


4,569


4,569




Foreign exchange translation differences


-


-


1,087


-


1,087




Cash flow hedge: losses arising during the year


-


-


-


-


-




Tax relating to items that may be reclassified to profit or loss


-


-


54


-


54




Total comprehensive income for the year


-


-


1,141


4,569


5,710




 


 


 


 


 


 




Share based raised


2,044


16,307


-


-


18,351




Costs of raising share capital


-


(1,370)


-


-


(1,370)




Share based payment credit


-


-


-


(32)


(32)




Transactions with owners


2,044


14,937


-


(32)


16,949




 


 


 


 


 


 




Balance at 31 December 2020


4,089


48,701


(5,607)


(3,470)


43,713




 


 


 


 


 


 




 
 
 
THE QUARTO GROUP, INC.
Condensed Consolidated Cash Flow Statement
For the six months ended 30 June 2021




 


 


Six months to 
30 June 2021
Unaudited
 
 


Six months to 
30 June 2020
Unaudited
*Restated


Year ended
31 December 2020
Audited
 
 




 


 


$'000


$'000


$'000




 


 


 


 


 




Profit/(loss) for the period


 


2,149


(3,003)


4,569




Adjustments for:


 


 


 


 




Net finance costs


 


929


1,506


2,693




Depreciation of property, plant and equipment


 


766


1,062


2,160




Software amortization


 


51


123


231




Tax charge/(credit)


 


895


(1,000)


2,020




Profit on disposal of right-of-use assets


 


-


-


(35)




Share based payments


 


10


60


(32)




Amortisation and amounts written off acquired intangibles 


 


7


323


890




Amortisation and amounts written off pre-publication costs


 


 
12,026


13,084


28,646




 


 


 


 


 




 


 


 


 


 




Operating cash flows before movements in working capital


 


16,833


12,155


41,142




(Increase)/decrease in inventories


 


(1,867)


2,204


4,023




Decrease in receivables


 


10,239


9,672


2,721




(Decrease) in payables


 


(7,371)


(16,349)


(9,205)




 


 


 


 


 




Cash generated by operations


 


17,834


7,682


38,681




 


 


 


 


 




Income taxes paid


 


(1,156)


(65)


(1,760)




 


 


 


 


 




Net cash from operating activities


 


16,678


7,617


36,921




 


 


 


 


 




Investing activities


 


 


 


 




Investment in pre-publication costs


 


(10,911)


(10,306)


(20,324)




Purchases of property, plant and equipment


 


(56)


(11)


(34)




 


 


 


 


 




 


 


 


 


 




Net cash used in investing activities


 


(10,967)


(10,317)


(20,358)




 


 


 


 


 




Financing activities


 


 


 


 




Interest payments


 


(1,923)


(819)


(1,297)




New Share Capital


 


-


18,351


18,351




Cost of raising share capital


 


-


(1,370)


(1,370)




Lease payments


 


(712)


(954)


(1,995)




External loans repaid


 


(31,567)


(21,626)


(28,413)




External loans drawn


 


25,118


5,259


4,520




 


 


 


 


 




Net cash used in financing activities


 


(9,084)


(1,159)


(10,204)




 


 


 


 


 




Net (decrease)/increase in cash and cash equivalents


 


(3,373)


(3,859)


6,359




 


 


 


 


 




Cash and cash equivalents at beginning of period


 


22,079


15,621


15,621




 


 


 


 


 




Foreign currency exchange differences on cash and cash equivalents


 


338


(215)


99




 


 


 


 


 




Cash and cash equivalents at end of period


 


19,044


11,547


22,079




 
*See note 7 
 
THE QUARTO GROUP, INC.
 
Notes to the condensed financial statements
 

1. Interim Statement

 
These interim consolidated financial statements are for the half year to 30 June 2021. They were approved by the board on 3 August 2021. These results are unaudited and have not been reviewed by the Group's auditor. The comparative figures for the six months to 30 June 2020 were unaudited and derived from the interim financial statements for that period.
 
The information for the year ended 31 December 2020 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.
 
Basis of preparation
These interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, "Interim Financial Reporting".
 
The Group's forecast and projections, taking account of reasonably possible changes in trading performance, show that the Group will be able to operate well within the level of its current banking facilities. The Directors have therefore adopted a going concern basis in preparing the Interim Information. 
 
2. Accounting policies 
 
The accounting policies, significant judgements and key sources of estimation adopted in the preparation of this Interim Report are consistent with those applied by the Group in its consolidated financial statements for the year ended 31 December 2020.
 
 
 
 
THE QUARTO GROUP, INC.
Notes to the condensed financial statement
 
3. Segmental analysis




Six months to 30 June 2021


 
 US Publishing


 
UK Publishing


 
Total




 


$000


$000


$000




Revenue


32,085


24,779


56,864




 


 


 


 




Operating profit before amortisation of acquired intangibles and exceptional items


3,792


1,029


4,821




Amortisation of acquired intangibles


(7)


-


(7)




Segment result


3,785


1,029


4,814




Unallocated corporate expenses


 


 


(841)




Exceptional items


 


 


-




Operating profit


 


 


3,973




Finance costs


 


 


(929)




Profit before tax


 


 


3,044




Tax charge


 


 


(895)




Profit after tax


 


 


2,149




 




Six months to 30 June 2020


US Publishing


UK Publishing


Total




 


$000


$000


$000




Revenue


24,989


21,876


46,865




 


 


 


 




Operating loss before amortisation of acquired intangibles and exceptional items


(439)


(551)


(990)




Amortisation of acquired intangibles


(285)


(38)


(323)




Segment result


(724)


(589)


(1,313)




Unallocated corporate expenses


 


 


(763)




Exceptional items


 


 


(421)




Operating loss


 


 


(2,497)




Finance costs


 


 


(1,506)




Loss before tax


 


 


(4,003)




Tax credit


 


 


1,000




Loss after tax


 


 


(3,003)




 




Year ended 31 December 2020


US Publishing


UK Publishing


Total




 


$000


$000


$000




Revenue


63,137


63,746


126,883




 


 


 


 




Operating profit before amortisation of acquired intangibles and exceptional items


3,249


8,360


11,609




Amortisation of acquired intangibles


(851)


(39)


(890)




Segment result


2,398


8,321


10,719




Unallocated corporate expenses


 


 


(991)




Corporate exceptional items


 


 


(446)




Operating profit


 


 


9,282




Finance costs


 


 


(2,693)




Profit before tax


 


 


6,589




Tax


 


 


(2,020)




Profit after tax


 


 


4,569




 
THE QUARTO GROUP, INC.
Notes to the condensed financial statements
 
3.   Segmental analysis (continued)
 




Geographical revenue


 


 


 




The Group generates its revenue in the following geographical areas:


 


 




 


 


 


 




 


Six months to 
30 June 2021
Unaudited
$'000


Six months to 
30 June 2020
Unaudited
$'000


Year ended
31 December 2020
Audited
$'000




United States


36,315


28,713


76,061




United Kingdom


7,851


6,349


18,250




Europe


6,611


6,233


17,446




Rest of the World


6,087


5,570


15,126




Total


56,864


46,865


126,883




 
 
 

4.   Exceptional items





 


Six months to 
30 June 2021
Unaudited
$'000


Six months to 
30 June 2020
Unaudited
$'000


Year ended
31 December 2020
Audited
$'000




Exceptional items comprised:


 


 


 




Restructuring costs


-


228


251




Refinancing costs


-


193


195




 


 


 


 




Total


-


421


446




 

5.   Taxation

 
Taxation for the six months to 30 June 2021 is based on the Group estimated underlying tax rate for the year.   
 
 
 
THE QUARTO GROUP, INC.
Notes to the condensed financial statements
 

6.   Earnings per share

 




 


Six months to 
30 June 2021
Unaudited
 
$'000


Six months to 
30 June 2020
Unaudited
 
$'000


Year ended
31 December 2020
Audited
 
$'000




From continuing operations


 


 


 




Profit/(loss) for the purposes of basic and diluted earnings per share, being net profit/(loss) attributable to owners of the parent


2,149


(3,003)


4,569




Amortisation of acquired intangibles (net of tax)


5


242


626




Exceptional items (net of tax)


-


316


349




Earnings/(loss) for the purposes of adjusted earnings per share


2,154


(2,445)


5,544




 


 


 


 




 


Number


Number


Number




Weighted average number of shares


40,889,000


37,069,606


39,185,388




Dilutive outstanding options awards


43,482


157,659


123,037




Diluted weighted average number of shares


40,932,482


37,227,265


39,308,425




 


 


 


 




 


 


 


 




Earnings/(loss) per share (cents)


Cents


Cents


Cents




From continuing operations


 


 


 




Basic


5.3


(8.1)


11.7




Diluted


5.3


(8.1)


11.6




 


 


 


 




Adjusted basic


5.3


(6.6)


14.1




Adjusted diluted


5.3


(6.6)


14.1




 


 


 


 




7.   Net debt 
 




 


30 June 2021
Unaudited
 
$'000


30 June 2020
Unaudited
*Restated
$'000


31 December 20
Audited
 
$'000




Net debt comprised:
 


 


 


 




Cash and cash equivalents


19,044


11,547


22,079




Short term borrowings


(3,905)


(5,000)


(41,819)




Medium and long-term borrowings


(31,498)


(43,940)


-




Net debt


(16,359)


(37,393)


(19,740)




 
* The June 2020 figure has been restated to include Accrued Interest of $759k moved from other payables.
 
At 30 June 2021, the Group has a $18m syndicated facility, comprising a term loan, revolving credit facility and overdraft. These facilities expire on 16 July 2024 and are subject to covenants, which were all met in the current period. In addition, the Group has $23.0m of sub-ordinated loans with related parties, repayable on 31 August 2024 and a loan of $2.4m relating to government support given under the Coronavirus Aid, Relief and Economic Security Act of the USA.
 

8.   Principal risks and uncertainties facing the Group

 
There have been no changes to the principal risks and uncertainties facing the Group since the year-end. These are disclosed on pages 19 to 21 of the 2020 Annual Report.
 
 
 
THE QUARTO GROUP, INC.
Notes to the condensed financial statements
 
 
9.   Financial instruments
 
There are no material differences between the fair value of financial instruments and their carrying value.
 

10. Management Statement

 
This Interim Management Report (IMR) has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed.  The IMR should not be relied on by any other party or for any other purpose.
 
The IMR contains certain forward-looking statements.  These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
 
Responsibility statement
We confirm that to the best of our knowledge:
a)    the condensed set of financial statements, which has been prepared in accordance with IAS 34 "Interim Financial Reporting", gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole as required by DTR 4.2.4R;
b)    the interim management report includes a fair review of the information required by DTR 4.27R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
c)     the interim management report includes a fair review of the information required by DTR 4.28R (disclosure of related party transactions and changes therein).
 
By the order of the board
 
 
 




Chuk Kin Lau
Chief Executive Officer


Andrew Cumming
Chairman




 


 




3 August 2021


3 August 2021




 

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