RNS Number : 0877V
Scholium Group PLC
19 July 2018
Scholium Group plc ('Scholium' or the 'Group')
Preliminary Results
This announcement contains inside information for the purposes of Article 7 of regulation 596/2014
Scholium is engaged in the business of rare books, art and collectibles. Its primary operating subsidiary is Shapero Rare Books which is one of the leading UK dealers trading internationally in rare and antiquarian books and works on paper. The Group also trades alongside other third party dealers in the broader arts and collectibles business via its subsidiary, Scholium Trading Limited and has now commenced dealing in and the auctioneering of stamps through its subsidiary Mayfair Philatelic Limited.
Operating Highlights
· Revenues up 10% to £6.7million
· Group restored to profit after absorbing start up costs of new philatelic division
· Overhead cost reductions of £225k achieved
· Shapero Rare Books profitable in both first and second half of the year
· Satisfactory trading in the first quarter of the new financial year
Financial Highlights
Years ended 31 March (£'000)
2018
2017
Revenue
6,715
6,120
Gross Profit
2,487
2,250
Gross Margin
37%
37%
Profit/(Loss) before tax
38
(224)
Cash
216
970
NAV/Share
73.2p
73.0p
Jasper Allen, Chairman of Scholium, noted "We are delighted to have returned the Group to profitability after implementing the cost reductions successfully during the year. The newly formed philatelic division has recorded some early successes and is now firmly established in the UK stamp marketplace. The Group continues to have an ungeared balance sheet and is now seeking to broaden its activities in its existing markets as well as considering new opportunities in related collectibles markets."
For further information, please contact
Scholium Group plc Jasper Allen, Chairman. Peter Floyd, Finance Director
Chairman's Statement
I am pleased to report that the Group has recorded a profit for the financial year, despite absorbing the start-up costs of establishing the new philatelic division, Mayfair Philatelic. The overhead cost reductions were implemented successfully, and the market in our core areas has remained relatively stable, while the re-admission to the Antiquarian Booksellers Association (ABA) has enabled Shapero Rare Books to market itself more effectively.
The Group has also made a satisfactory start to the current financial year.
The Group has made the important first steps in implementing its strategy of becoming a more widely based collectibles business. Mayfair Philatelic held its inaugural auction in March 2018 and held another auction in June. The Group remains well capitalised with £8.8 million of stock, £0.2 million in cash and no debt.
The Group also has an undrawn overdraft facility available to it. Furthermore, the Group is now well placed in the current financial year to benefit from the reduced overhead cost base as well as the more diversified revenue streams now available. The Group is also well positioned to consider acquisitions in line with its strategy.
Business Review
Shapero Rare Books (SRB) returned to profitability in the year ended 31 March 2018. The improvement in performance compared to the prior year was due both to higher sales, as well as the reduction in overhead costs. Expenditure on trade fairs and exhibitions increased from the prior year as a result of access to more fairs following the re-admission to ABA membership. Book fairs are important sources of customers, as well as providing potential buying opportunities. Catalogues have continued to be produced as our customers cannot all visit our retail premises in Mayfair. The SRB website was also modernized during the year with pleasing results and comments from our customers.
Scholium Trading performed well in the year and delivered a reasonable contribution to the Group's performance, particularly as the resources available to it in terms of management time and funding were reduced by comparison to the previous financial year as a consequence of the commencement of the new philatelic division.
Mayfair Philatelic commenced trading in November 2017 and held its inaugural auction in March 2018. It initially acquired a substantial stock of stamps and has since commenced the marketing and sale of this and other stock through both retail and auctions, with the predominant offering to date being through auction.
Group revenue for the year of £6.7 million (2017: £6.1 million) generated a profit before tax of £38,000 (2017: loss of £224,000). Excluding the first year loss attributable to Mayfair Philatelic, the Group profit was £84,000 compared to the loss of £224,000 in the prior year.
Staff
The successful implementation of the overhead cost reductions in the year would not have been possible without the dedication of our employees and I would like to take this opportunity of thanking them again for their hard work and effort in helping to restore the Group to profitability.
Current Trading and Prospects
The Group has made a satisfactory start to the new financial year. Each of the three trading entities has continued to make progress and sales have continued the momentum from the second half of the year ended 31 March 2018. The Group remains well capitalised with high quality stock and an ungeared balance sheet and is in a good position to continue its development of a broader based collectibles business.
Strategic Report
This report provides an overview of the Group's strategy and business model; gives a review of the performance of the operating entities and of the financial position at 31 March 2018; and sets out the principal risks to which the Group is exposed. In addition, it comments briefly on the future prospects of the business.
Principal Activities & Review of the Business
The Group is engaged in the business of rare books, fine art and collectibles. The majority of the business transacted is as a dealer - buying, owning and selling items, either on its own or together with third parties who also deal as principals. The Group also conducts auctions where both its own stock and third party consignments are available for sale. The Group maintains value from ownership of its stock and generates value through its expertise, astute buying and the profitable sale of stock.
Shapero Rare Books is the main business of the Group. It is a leading international dealer in rare and collectible books and works on paper with special expertise in Natural History, Illustrated, Travel and Exploration and Literature. The business also trades as Shapero Modern in modern and contemporary prints and limited editions by established artists.
Scholium Trading focuses on trading works of art in the wider art market using its own capital and the expertise of a small number of known third party dealers and their client bases.
Mayfair Philatelic is a dealer and auctioneer of stamps with a particular focus on British and Commonwealth stamps. Regular auctions are held in London and at Lingfield, Sussex, where both the company's own stock and third party consignments are sold.
Strategy & Key Objectives
The Group's strategy is to:
• build, either organically or by acquisition, a portfolio of collectibles businesses to enable further diversification of its revenue and profit streams;
• attract individuals or teams of specialists in markets complementary to the Group's existing businesses;
• optimize working capital in existing businesses to provide funds for new business development; and
• continue to develop all its entities by trading alongside other dealers in high value rare and collectible items and by participating in the acquisition for onward sale of large consignments.
The Directors intend, in due course, to provide an attractive level of dividends to shareholders along with stable asset-backed growth driven by the markets in which the Group operates.
Review of the year from continuing operations
The Group's businesses generally performed well in the year to 31 March 2018. The Group's businesses including the central overheads but excluding the philatelic division traded profitably in both the first and second half of the year. Revenue increased by 10% and gross profit increased by 10% compared with the prior year ended 31 March 2017, with a slightly higher gross margin percentage in spite of the sale of 50% of the Group's Russian stock at cost in September 2017. The Group recorded a loss of £23k for the second half of the year ended 31 March 2018, but this was after incurring net costs of £46k in the new Philatelic division.
The increase in the Group's profitability stems partly from the reduction in overhead costs due to the successful implementation of the cost reduction programme as set out in previous reports, as well as an increase in both sales and gross margin, particularly in the Group's rare books business.
The year to 31 March 2018 included the creation and commencement of trading in the Group's stamp division, where the recruitment of two senior individuals well known in the UK philatelic marketplace and the purchase of collections of British and Commonwealth stamps provided the catalyst to hold the inaugural auction of stamps in March 2018.
Group performance for the 12 months ended 31 March 2018 by half year
6 months ended (£'000)
H1 (unaudited)
H2
Variance
Revenue
3,323
3,392
2%
Gross Profit
1,048
1,439
37%
Profit/(loss) before tax
61
-23
n/a
The increase in margin reflects an improved margin in Shapero Rare Books as well as the inclusion of the margin from the inaugural auction of the Philatelic division.
As noted above, the establishment of Mayfair Philatelic required an investment in stock to commence trading. At 31 March 2018, Mayfair's stock was £636k (2017 £0k). This purchase of stock was the factor primarily responsible for the decrease in the Group's cash balances from £970k at 31 March 2017 to £216k at 31 March 2018. The Group also retains access to an overdraft facility.
Group stock at 31 March 2018 was £8,841k, an increase £968k compared with £7,873k at 31 March 2017. £636k of this increase is attributable to Mayfair Philatelic, and the remaining increase is primarily book and trading stock. The Group is focussed on managing its stock more effectively in line with normal retail practice.
Key Performance Indicators
The Group is managed by and reports on a number of key performance indicators (KPIs).
The current principal KPIs are:
• Sales, gross profit and gross margin, profit before tax;
• the breadth and distribution of the stock of rare books held by the Group;
• stock turnover; and
• cash flow.
Key Performance Indicators Years ended 31 March (£'000)
2018
2017
Variance
Revenue
6,715
6,120
+9.7%
Gross Profit
2,487
2,250
+10.5%
Gross Margin
37%
37%
-
Stock Turnover (months)
22.8
23.9
+4.8%
Cash at bank
216
970
-77.7%
Group Performance
Shapero Rare Books
Shapero Rare Books (SRB) returned to profitability during the year ended 31 March 2018. The year's sales were £5,756k, above the prior year's sales of £5,183k and gross profit likewise at £2,237k for the year ended 31 March 2018 compared with the prior year of £1,981k. The increase in the gross profit for the year was particularly pleasing given the sale of a 50% interest in the stock of Russian books in September 2017 at cost.
Direct costs including the attendance at fairs, exhibitions, and catalogues increased from £421k in the prior year to £487k in the year to 31 March 2018. This reflected the increased presence at fairs as a result of re-joining the Antiquarian Booksellers Association. Overhead costs reduced from £1,629k in the prior year to £1,523k in the year to 31 March 2018 which reflected the cost savings implemented during the year.
SRB therefore recorded a profit before tax of £228k compared with a loss of £69k in the prior year.
Scholium Trading
Scholium Trading performed reasonably well in the year ended 31 March 2018 with a contribution to profit of £162k compared to £241k for the prior year. The reduction in profitability was the result of lower sales as the timing of sales is dependent on individual sections of the art market and the activity and emphasis placed on the item by the third party dealer responsible for marketing the item.
Group costs are not allocated to Scholium Trading and, as such, this division has not had any associated cost reductions.
Mayfair Philatelic
The Philatelic division commenced trading in November 2017 and held its inaugural auction in March 2018. Sales for the division in the year to 31 March 2018 amounted to £324k, with a gross profit of £88k. Direct costs including holding the auction, and the overheads for the division amounted to £134k resulting in a loss for the period to 31 March 2018 of £46k.
Central Costs
Central costs include the cost of all board members as well as those costs associated with the Group's AIM listing. The central costs were £303k in the year to 31 March 2018, a net reduction of £93,000 from the prior year's total of £396k, and reflected the overhead cost reduction programme introduced successfully during the year under review.
Year ended 31 March 2018 (£'000)
Shapero Rare Books
Scholium Trading
Mayfair
Central
Consolidated
Revenue
5,756
635
324
-
6,715
Gross Profit
2,237
162
88
-
2,487
Gross Margin
39%
26%
27%
0%
37%
Profit/(Loss) before tax
228
159
(46)
(303)
38
Year ended 31 March 2017 (£'000)
Shapero Rare Books
Scholium Trading
Central
Consolidated
Revenue
5,197
923
0
6,120
Gross Profit
1,981
269
0
2,250
Gross Margin
38%
29%
0%
37%
(Loss)/Profit before tax
(69)
241
(396)
(224)
Dividend
The Board does not propose to declare a final dividend for the financial year ended 31 March 2018.
Principal Risks & Uncertainties
Supply of rare books, works on paper, prints and stamps and other items
By definition, rare books and other works on paper, prints and stamps are not commonly available. The availability of fresh stock of such items onto the market is often driven by major life events, such as inheritance, unrecovered debt, divorce or downsizing due to economic malaise. The business of Shapero Rare Books, Scholium trading and Mayfair Philatelic is reliant upon individual works and collections of works coming onto the market and upon the Group being able to access those business opportunities. There is no guarantee that fresh stock will come onto the market in sufficient quantities to meet the Group's plans for continued growth, or that third parties will choose to consign their items for sale at the Group's auctions.
When works become available for sale or purchase, such sales are often dealt with privately and discretely and, accordingly, there is no guarantee that the Group's employees will be able to access such business opportunities or to negotiate successfully the purchase of fresh stock coming onto the market or successfully compete for the mandate to auction such items.
Reliance on key international trade fairs
A significant proportion of the Group's sales are made at international trade fairs, and in particular the major fairs. If these fairs were to be discontinued it would have a material effect on the ability of the Group to sell its stock. There are a limited number of stands at international trade fairs and as a result places are highly sought after. Whilst members of the Group have been exhibiting at these fairs for many years, there can be no certainty that they will continue to secure places in the future.
Competition
The market in the books and other items in which the Group trades is competitive. In the market for rare books and other items in which Shapero Rare Books trades, the Group faces various competitive pressures including from the major auctioneers, Sotheby's, Christie's, Bonhams and Spink as well as smaller auctioneers and a large number of dealers and smaller operators.
The Group is likely to face continued and/or increased competition in the future both from established competitors and/or from new entrants to the market. The Group's competitors include businesses with greater financial and other resources than the Group. Such competitors may be in a better position than the Group to compete for future business opportunities. If the Group is unable to compete effectively in any of the markets in which it operates, it could lead to material adverse effect on the Group's business, financial condition, and operations.
Co-owned rare and collectible goods
In the case of high value items or collections, the Group will often acquire the items jointly with another third party bookseller or dealer and if not expressly provided for there is a risk that the Group will not be able to sell the entire asset without the agreement of all joint-owners. In this and other respects the Group relies on the honesty and integrity of other dealers. Whilst the Group takes care to deal only with established counterparties and experienced dealers who are well known to senior management and/or the Directors, there can be no guarantee that co-owners will comply with the agreed terms (including, for example not changing the items) or that such co-owners will not enter into administration or other insolvency procedure, and in the event there is a loss of the co-owned goods it is not certain that the Group could claim under its insurance policy in relation thereto.
Stock valuation and liquidity
The Group will trade in rare and collectible items, which may be highly illiquid. The value of goods acquired is difficult to assess and it may not be possible for the Group to sell the assets at or above the price for which they were acquired. The value of assets in the balance sheet may not always represent the actual resale value achievable.
Theft, loss or damage
Rare and collectible items are highly mobile goods. Furthermore, such goods are frequently transported internationally for trade shows or other marketing opportunities. Whilst precautions are taken to ensure safe passage, the Group's assets may be lost, damaged or stolen. While the Group carries specialist insurance, there is no guarantee that the Group's insurance cover will be adequate in all circumstances. Assets of the Group will be placed with third parties for sale on commission. While the Group intends to take appropriate precautions when placing assets with third parties, there is a risk that these assets outside of the Group's direct control may be stolen or replaced by unscrupulous third parties with fakes or forgeries.
Authenticity and export authority
The Directors of the Group will ensure that due diligence is undertaken on the authenticity of the assets acquired for sale. Nonetheless fakes and forgeries do exist in the market and despite due diligence the Group may acquire these believing them to be authentic. Further, the attribution of works to a writer or artist is not always an exact science, and there can be no guarantee that assets of the Group will not have been mistakenly attributed in this way. Lack of authenticity is not covered by the Group's insurance. Whilst the Group takes appropriate care when acquiring works which may be of material importance in the state of origin, there can be no guarantee that works acquired by the Group are not subject to restrictions on export or sale.
Insurance
The Group carries a specialist insurance policy under the Antiquarian Booksellers Association Insurance Scheme which covers each of the businesses. The Directors believe that the Group carries appropriate insurance for a business of its size and nature but there can be no guarantee that the extent or value of the cover will be sufficient, in relation to stock in transit or on consignment. The Directors review the Group's insurance arrangements on an annual basis and endeavour to insure its stock adequately, but there is no certainty that future claims will not fall within the exclusions under the policy or that the insurer will pay out any claim if made. Further, there can be no guarantee that the necessary insurance will be available to the Group in the future at an acceptable cost or at all.
Premises
Like many of the established dealers in the market, the Group has a publicly accessible gallery in Mayfair, London from where Shapero Rare Books and Mayfair Philatelic operate. The Directors believe that the location is highly desirable and an important factor in the success of the business as a whole.
Terms of sale
To date, the contractual arrangements which the Group has entered into with clients, customers and other dealers have not always included (amongst other things) terms dealing specifically with
1. transfer of ownership and risk,
2. contract formation,
3. price and payment,
4. limitations and exclusions of liability, and
5. governing law and jurisdiction.
In light of the foregoing, there can be no guarantee that the Group's arrangements with its customers will not be terminated on short notice or that the Group will not at some future time face challenges or disputes in relation to the contractual or other arrangements with its clients.
If the Group became involved in a contractual dispute and/or a third party was successful in any contractual dispute with the Group, any resultant loss of revenues or exposure to litigation costs or other claims could have a material adverse effect on the Group's reputation, business, financial condition and/or operations or financial results. The Group has revised its standard terms of sale to seek to ensure that, henceforth, the arrangements with clients, customers, dealers and others will include terms dealing with each of the aforementioned areas.
Employees
The Group is reliant on a small group of key employees for their knowledge and the reliance customers place on their integrity and service. In the event that a key employee were to leave, the business may suffer a short term decrease in performance whilst it adjusts to the level of resources available to it.
Currency risk
The Directors anticipate that the Group will conduct certain of its transactions other than in Pounds Sterling, the Group's functional currency. As a result, movements in foreign exchange rates may impact the Group's performance. The Group does not enter into any contracts for any hedging arrangements in respect of currency positions.
Future prospects
The Group remains well capitalised with high quality stock and an ungeared balance sheet, and an overdraft facility and is in a good position to continue its development of a broader based collectibles business.
Consolidated Statement of Comprehensive Income
Year ended
Year ended
31 Mar
31 Mar
2018
2017
Note
£000
£000
Revenue
3
6,715
6,120
Cost of Sales
(4,228)
(3,870)
Gross profit
2,487
2,250
Distribution expenses
(512)
(427)
Administrative expenses
(1,937)
(2,048)
Total administrative expenses
(1,937)
(2,048)
Profit/(Loss) from operations
38
(225)
Financial income
-
1
Profit/(loss) before taxation
38
(224)
Income tax credit/(expense)
7
-
-
Profit/(loss) for the year from continuing operations and total comprehensive income attributable to equity holders of the parent company
38
(224)
Basic and diluted profit/(loss) per share:
From continuing operations - pence
8
0.27
(1.66)
Total diluted profit/(loss) per share - pence
0.27
(1.66)
Consolidated Statement of Financial Position
31 Mar
31 Mar
2018
2017
Note
£000
£000
Assets
Non-current assets
Property, plant and equipment
74
55
Deferred corporation tax asset
10
277
277
351
332
Current assets
Inventories
11
8,841
7,873
Trade and other receivables
12
2,231
2,050
Cash and cash equivalents
216
970
11,288
10,893
Total assets
11,639
11,225
Current liabilities
Trade and other payables
1,678
1,302
Loans and borrowings
-
-
Current corporation tax liabilities
-
-
Total current liabilities
1,678
1,302
Total liabilities
1,678
1,302
Net assets/liabilities
9,961
9,923
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares
13
136
136
Share Premium
9,516
9,516
Merger reserve
82
82
Retained earnings
227
189
Total equity
9,961
9,923
Consolidated Statement of Changes in Equity
Share
Share
Merger
Retained
Total
Capital
Premium
reserve
deficit
equity
£000
£000
£000
£000
£000
Balance at 1 Apr 2015
136
9,516
82
429
10,163
Loss for the year from continued and discontinued operations
-
-
-
(16)
(16)
Total comprehensive income for the period
-
-
-
(16)
(16)
Balance at 31 Mar 2016
136
9,516
82
413
10,147
Loss for the year from continued and discontinued operations
-
-
-
(224)
(224)
Total comprehensive income for the period
-
-
-
(224)
(224)
Balance at 31 March 2017
136
9,516
82
189
9,923
Profit for the year from continued and discontinued operations
-
-
-
38
38
Total comprehensive income for the period
-
-
-
38
38
Balance at 31 March 2018
136
9,516
82
227
9,961
There were no transactions with owners in the year.
The following describes the nature and purpose of each reserve within owners' equity:
Share capital
Amount subscribed for shares at nominal value.
Share premium
Amount subscribed for share capital in excess of nominal value less attributable share-issue expenses.
Merger reserve
Amounts attributable to equity in respect of merged subsidiary undertakings.
Retained earnings/(deficit)
Cumulative profit/(loss) of the Group attributable to equity shareholders.
Consolidated Statement of Cash Flows
31 Mar
31 Mar
2018
2017
£000
£000
Cash flows from operating activities
Profit/(loss) before tax
38
(224)
Depreciation of property, plant and equipment
27
27
Reclassification of intangible assets
-
19
65
(178)
Decrease/(increase) in inventories
(968)
(323)
Decrease/(increase) in trade and other receivables
(151)
(16)
Increase/(decrease) in trade and other payables
346
186
Net cash generated from operating activities
(708)
(331)
Cash flows from investing activities
-
-
Purchase of property, plant and equipment
(46)
(8)
Interest received
-
-
Disposal of discontinued operation
-
-
Net cash used in investing activities
(46)
(8)
Cash flows from financing activities
Net cash (used)/generated from financing activities
-
-
Net increase/(decrease) in cash and cash equivalents
(754)
(339)
Cash and cash equivalents at the beginning of the year
970
1,309
Cash and cash equivalents at the end of the year
216
970
Consolidated Statement of Cash Flows
Company Statement of Financial Position
31 Mar
31 Mar
2018
2017
Note
£000
£000
Assets
Non-current assets
Group Investments
9
5,200
5,200
Deferred tax asset
108
62
5,308
5,262
Current assets
Trade and other receivables
12
6,802
6,524
Cash and cash equivalents
-
452
6,802
6,976
Total assets
12,110
12,238
Current liabilities
Borrowings
23
-
Trade and other payables
95
78
Current corporation tax liabilities
-
-
Total current liabilities
118
78
Total liabilities
118
78
Net assets/liabilities
11,992
12,160
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares
13
136
136
Share Premium
9,516
9,516
Merger reserve
2,809
2,809
Retained earnings/(deficit)
(469)
(301)
Total equity
11,992
12,160
Statement of Changes in Company Equity
Share
Share
Merger
Retained
Total
Capital
Premium
reserve
deficit
equity
£000
£000
£000
£000
£000
Balance at 1 Apr 2015
136
9,516
2,809
152
12,613
(Loss) for the year
-
-
-
(269)
(269)
Total comprehensive income for the period
-
-
-
(269)
(269)
Balance at 31 March 2016
136
9,516
2,809
(117)
12,344
Loss for the year
-
-
-
(184)
(184)
Total comprehensive income for the period
-
-
-
(184)
(184)
Balance at 31 March 2017
136
9,516
2,809
(301)
12,160
Profit for the year
-
-
-
(168)
(168)
Total comprehensive income for the period
-
-
-
(168)
(168)
Balance at 31 March 2018
136
9,516
2,809
(469)
11,992
The following describes the nature and purpose of each reserve within owners' equity:
Share capital
Amount subscribed for shares at nominal value.
Share premium
Amount subscribed for share capital in excess of nominal value less attributable share-issue expenses.
Issue expenses.
Merger reserve
Amounts attributable to equity in respect of merged subsidiary undertakings.
Retained earnings/(deficit)
Cumulative profit/(loss) of the Group attributable to equity shareholders.
Statement of Company Cash Flows
31 Mar
31 Mar
2018
2017
£000
£000
Cash flows from operating activities
(Loss)/profit before tax
(214)
(246)
(214)
(246)
Decrease/(increase) in trade and other receivables
(278)
(202)
Increase/(decrease) in trade and other payables
17
(13)
Net cash generated from operating activities
(475)
(461)
Cash flows from investing activities
Net cash used in investing activities
-
-
Cash flows from financing activities
Net cash (used)/generated from financing activities
-
-
Net increase/(decrease) in cash and cash equivalents
(475)
(461)
Cash and cash equivalents at the beginning of the year
452
913
Cash and cash equivalents at the end of the year
(23)
452
Notes to the Consolidated Financial Statements
1 General information
Scholium Group plc and its subsidiaries (together 'the Group') are engaged in the trading and retailing of rare books, works on paper and stamps primarily in the United Kingdom. The Company is a public company domiciled and incorporated in England and Wales (registered number 08833975). The address of its registered office is 32 St George Street, London W1S 2EA.
2 Basis of preparation and accounting policies
The consolidated financial information, which represents the results of the Company and its subsidiaries, has been prepared in accordance with International Financial Reporting Standards and IFRC Interpretations issued by the International Accounting Standards Board (together "IFRSs") as adopted by the European Union (EU) and as applied in accordance with the provisions of the Companies Act 2006. The Company financial statements have also been prepared in accordance with IFRSs.
The consolidated and Company financial statements have been prepared on an historical cost basis.
3 Revenue
31 Mar
31 Mar
2018
2017
Group
Group
£000
£000
Sales of Stock
6,551
6,106
Commissions
156
12
Other income
8
2
6,715
6,120
All revenues are derived from a single operating segment, collectibles.
4 Profit Before Taxation
Profit before taxation is after charging/(crediting):
31 Mar
31 Mar
2018
2017
Group
Group
£000
£000
Depreciation of property, plant and equipment
26
27
Operating lease rentals
320
316
Foreign currency losses
8
3
Employee costs (note 5)
888
1,029
Fees payable to the Company's auditor
37
27
5 Employee costs including Directors
31 Mar
31 Mar
2018
2017
Group
Group
£000
£000
Wages
776
912
Social security costs
76
96
Pension costs
26
12
Other employee benefits
10
9
888
1,029
All employee costs are included in administrative expenses.
6 Directors' remuneration
31 Mar
31 Mar
2018
2017
Group
Group
£000
£000
Salaries and fees
182
234
Social security costs
8
17
Pension costs
1
-
Other employee benefits
4
5
195
256
Information regarding the highest paid Director which comprises
salary and benefits as follows
60
75
Simon Southwood received £11,000 compensation for loss of office in the year to 31 March 2018 (2017 - £nil)
7 Income tax
31 Mar
31 Mar
2018
2017
£000
£000
Current tax (credit)/expense
Current tax
-
-
Deferred tax
-
-
Impact of change in UK Corporation tax rate
19
Origination and reversal of temporary differences
-
(19)
Total tax expense
-
-
The charge for the year can be reconciled to the profit/(loss) per the income statement as follows:
31 Mar
31 Mar
2018
2017
£000
£000
Profit/(loss) before tax
38
(224)
Applied corporation tax rates:
19%
20%
Tax at the UK corporation tax rate of 19% (2017: 20%):
7
(45)
Expenses not deductible for tax purposes
-
3
Utilisation of previously unrecognised tax losses
15
35
Origination and reversal of temporary differences
(22)
7
Current tax charge
-
-
8 Profit/ (Loss) per share
31 Mar
31 Mar
2018
2017
Group
Group
£000
£000
Profit/(loss) used in calculating basic and diluted earnings per share attributable to the owners of the parent
38
(224)
Number of shares
Weighted average number of shares for the purpose of basic and diluted earnings per share
13.6m
13.6m
Basic earnings/(loss) per share from continuing operations (pence per share)
0.27
(1.66)
Total basic and diluted earnings per share - pence
0.27
(1.66)
All shares shown above are authorised, issued and fully paid up. Ordinary shares carry the right to one vote per share at general meetings of the Company and the rights to share in any distribution of profits or returns of capital and to share in any residual assets available for distribution in the event of a winding up.
9 Investment in subsidiaries
31 Mar
2018
Company
£000
At 7 January 2014
Nominal value of shares issued
28
Fair-value adjustment take to merger reserve
2,809
Deferred consideration
2,363
At 31 March 2015, 31 March 2016, 31 March 2017 and 31 March 2018
5,200
The investments in Group undertakings are recorded at cost which is the fair-value of the consideration paid.
The principal subsidiaries of the Company, all of which have been included in the consolidated financial information, are as follows: Shapero Rare Books Ltd, Scholium Trading Ltd and Mayfair Philatelic Ltd, all of which are wholly owned.
10 Deferred Corporation Tax
31 Mar
31 Mar
2018
2017
Group
Group
£000
£000
Balance at the beginning of the year
(277)
(277)
Income statement
-
-
Balance at the end of the year
(277)
(277)
The deferred tax asset comprises:
Origination and reversal of temporary differences
(277)
(277)
Deferred tax is calculated in full on temporary differences under the liability method using the tax rates expected for future periods of 19%. The deferred tax has arisen due to the availability of trading losses. The Group has unutilised tax allowances, at expected tax rates in future periods, of £370,000 (2017: £357,000) of which £277,000 has been recognised (2017 £277,000 recognised).
11 Inventories
31 Mar
31 Mar
2018
2017
Group
Group
£000
£000
Finished goods
8,841
7,873
Finished goods expensed in the year
4,418
4,215
12 Trade & other receivables
31 Mar
31 Mar
31 Mar
31 Mar
2018
2017
2018
2017
Group
Group
Company
Company
£000
£000
£000
£000
Trade debtors
1,962
1,779
-
-
Other debtors
20
30
5
-
Amounts due from Group undertaking
-
-
6,797
6,510
Prepayments and accrued income
249
241
14
2,231
2,050
6,802
6,524
The age profile of trade and other receivables comprise:
£000
Current
730
One month past due
296
Two months past due
113
Over three months past due
823
Provision for doubtful debts
-
1,962
As at 31 March 2018, trade receivables of £nil (31 March 2017, 31 March 2016 £nil, 31 March 2015 £nil and 31 March 2014 £4,000) were considered past due and impaired. The other debtors balances are categorised as loans and receivables. All amounts shown under trade and receivables are due for payment within one year.
Amounts due from Group undertakings are unsecured, interest-free, have no fixed date of repayment and are repayable on demand.
13 Share Capital
31 Mar
31 Mar
2018
2017
Group and Company £000
Group and Company £000
Ordinary shares of £0.01 each
At the beginning of the year
136
136
Issued in the year
-
-
At the end of the year
136
136
Number of shares
31 Mar
31 Mar
2018
2017
Group and Company
Group and Company
Ordinary shares of £0.01 each
Number
Number
At the beginning of the year
13,600,000
13,600,000
Issued in the year
-
-
At the end of the year
13,600,000
13,600,000
All shares shown above are authorised, issued and fully paid up. Ordinary shares carry the right to one vote per share at general meetings of the Company and the rights to share in any distribution of profits or returns of capital and to share in any residual assets available for distribution in the event of a winding up.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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