REG - Scholium Group PLC - Half-year Report
30/11/2023 07:00
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RNS Number : 1211V Scholium Group PLC 30 November 2023
Scholium Group plc
Interim Report & Financial Statements
Six Months ended 30 September 2023
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
The directors of Scholium Group plc ("Scholium", the "Company" or, together
with its subsidiaries, the "Group") present their report and financial
statements for the Group for the six months ended 30 September 2023.
Operating highlights
· Revenues of £3,835k for the period compared with £4,454k for the
prior corresponding period
· Gross profit of £1,511k compared to £1,731k of the prior
corresponding period
· Profit margin strength continues at 39% (2022: 39%)
· Fifth successive half-year of profitability, £43k (2022: profit of
£179k)
· Earnings per share on a diluted basis of 0.31p (2022: 1.32p per
share)
· NAV per issued share of 71.1p (2022: 70.4p)
· Cash position £(436)k (2022: £515k) including Covid loan of £162k
(2022: £213k)
Financial Summary
Six months ended September 2023 2022 Change
(£000 unless otherwise stated)
Revenue 3,835 4,454 (14)%
Gross Profit 1,511 1,731 (13)%
Gross Margin 39.4% 38.9%
Pre-Tax Profit 43 179 (76)%
Inventories 10,258 9,482 8%
Net Cash (436) (515)
Net Assets 9,673 9,578 1%
NAV/Share (pence per issued share) 71.1 70.4
David Harland, Chair of Scholium, noted:
"We are pleased with the performance of the Group in recording its fourth
consecutive profitable half-year period, given the deteriorating economic
environment. Action was taken on costs from December 2022 and whilst the
profit was reduced for the period this was expected as was noted in the annual
report for the period ended March 2023. The on-going difficult geo-political
situation naturally presents a difficult environment in which to plan but we
remain cautiously positive about the coming six-month period."
The person responsible for arranging the release of this announcement on
behalf of the Company is Philip Tansey, Chief Financial Officer of the
Company.
For further information, please contact:
Scholium Group plc +44 (0)20 7493 0876
David Harland, Chairman
Bernard Shapero, Chief Executive Officer
Philip Tansey, Chief Financial Officer
WH Ireland Ltd - Nominated Adviser +44 (020) 7220 1666
Chris Fielding
Isaac Hooper
Business Review
Scholium is engaged in the business of rare books, modern prints, art and
collectibles. Its primary operating subsidiary is Shapero Rare Books, one
of the leading UK dealers trading internationally in rare and antiquarian
books and works on paper, which also trades as Shapero Modern, a leading UK
dealer in the growing marketplace of modern and contemporary prints.
Revenue streams
The Group earned revenue in the six months to 30 September 2023 from the sale
of rare books, prints and works on paper through Shapero Rare Books.
Strategy and key performance indicators (KPIs)
The Group's strategy is to:
• provide stable asset-backed growth driven by the markets in
which the Group operates;
• build, either organically or by acquisition, a portfolio of
art and collectibles focused businesses to enable further diversification of
its revenue and profit streams; and,
• attract individuals or teams of specialists in markets
complementary to the Group's existing businesses.
The current principal KPIs are:
• sales, gross profit, gross margin and profit
before tax;
• the breadth and distribution of the stock of
rare books held by the Group;
• stock turnover;
• cash position;
• net assets per share; and,
• earnings per share.
Performance Review
Overall Performance
The Group made a profit before tax of £43k during the six months to 30
September 2023, a reduction from the profit of £179k for the corresponding
period last year though through intensive sales efforts margins were improved.
Overall turnover was lower by 14% compared to the same period in the prior
year. This was due to the expected more difficult environment for sales and
this was reflected in books sales of £2,900k (2022: £3,420k) whilst Gallery
sales of art through several initiatives and exhibitions improved to £858k
(2022: £808k). As a result, gross profit of £1,511k compared to the prior
period total of £1,731k.
Group costs, including Distribution and Administrative expenses, decreased by
4% to £1,456k (2022: £1,518k). This decrease resulted from the active
decision to target a reduction given the challenging markets, particularly in
trade fairs and exhibitions.
The Group result for the six months was a profit before tax of £43k (2022:
profit of £179k).
Inventories increased by £776k to £10,258k (2022: £9,482k) in active
preparation for major sales initiatives in the months following the end of
this period. Group cash balances continue to fluctuate monthly in line with
stock purchases and trade debtors with net overdrafts and loan balances of
£(436)k at 30 September 2023 (2022: £(515k).
Summary Group Financials
Six months ended September (all figures £'000) 2023 2022 Change
Revenue 3,835 4,454* (14)%
Gross Profit 1,511 1,731 (13)%
Gross Margin 39.4% 38.9%
Distribution Expenses (245) (368) (33)%
Administrative Expenses (1,211) (1,150) 5%
Pre-Tax Profit 43 179 (76)%
Inventories 10,258 9,482 8%
Net Cash (436) (515)
Net Assets 9,673 9,578 1%
NAV/Issued Share (pence) 71.1 70.4 1%
* Total includes £25k of revenue generated by Scholium Trading
Alternative accounting presentation
The Board is focused on demonstrating shareholder return and part of that
desire is the analysis of the core performance of the Group's trading business
without costs that are related to the non-trading elements such as public
company status and other non-directly related or one-off costs not typically
expected to be incurred in a 'normal' year.
Six months ended September (£'000) 2023 2022
Profit 43 179
Add back:
Central costs of the public group 197 162
Mayfair Philatelic losses - 15
Depreciation & amortisation 182 171
Finance expenses 32 19
Operating EBITDA 455 546
Financial Position
The Group retains a strong balance sheet. Net assets of £9,673k (2022:
£9,578k) include £10,258k of stock (2022: £9,482k) and an overdrawn cash
balance of £(436)k (2022: £(515)k). The Covid loan, drawn down in October
2020 of £250k, has been further reduced by repayment to the current £162k
(2022: £213k). As a result, there is an increase to 71.1p of net assets per
ordinary share currently in issue (2022: 70.4p).
Shapero Rare Books & Shapero Modern
Shapero Rare Books operates from its first-floor bookshop at 106 New Bond
Street, its retail premises on the ground floor of 105 New Bond Street and a
separate gallery for modern prints nearby at 43 Maddox Street. The lease for
both premises in New Bond Street were extended during the period though for a
period of less than 12 months and consequently the Board is focused on
securing suitable alternative premises in the near future.
Summary Performance, Shapero businesses
Six months ended September (all figures £'000) 2023 2022 Change
Revenue 3,835 4,429 (13)%
Gross Profit 1,511 1,731 (14)%
Gross Margin 39% 39%
Pre-Tax Profit before Central costs 240 341
Group resources are balanced between its stock of rare books and prints in
order to maximise sales and profit opportunities.
Sales in the period have, as presented in Note 3, been challenging for rare
books though the Gallery has increased its sales above the corresponding prior
period.
Distribution costs have decreased significantly as the decision, taken in
December 2022, was to rationalise trade fairs and exhibitions given the
expectation of more challenging times ahead. The central costs of the business
include all board directors and other Group level costs including those
associated with membership of the AIM market. The central costs were £197k
(2022: £162k).
Outlook
The Group continues to focus on its two profitable businesses, rare books and
modern prints, having discontinued the distraction of stamps and Scholium
Trading and is looking to continue the profitable performance of the recent
twenty-four months into the second half of the current financial year.
Looking forward, the Group is viewing its trading for the second half of the
year with cautious optimism.
Key Risks
Like all businesses, the Group faces risks and uncertainties that could impact
on the Group's strategy. The Board recognises the nature and scope of these
risks can change and regularly reviews the risks faced by the Group and the
systems and processes to mitigate such risks.
The principal risks and uncertainties affecting the continuing business
activities of the Group were outlined in detail in the Strategic Report
section of the annual report covering the full year ended 31 March 2023.
In preparing this interim report for the six months ended 30 September 2023,
the Board has reviewed these risks and uncertainties and considers that there
have been no changes since the publication of the 2023 Annual Report.
Independent Review Report to Scholium Group plc
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2023 which comprises the condensed consolidated statement of
comprehensive income, the consolidated statement of changes in equity, the
condensed consolidated statement of financial position, the consolidated
statement of cash flows and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2023 is not prepared,
in all material respects, in accordance with UK adopted International
Accounting Standard 34 and the AIM Rules.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued for use in the United Kingdom. A
review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with UK adopted IFRSs. The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with UK adopted International Accounting Standard 34, "Interim
Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed in an audit as
described in the Basis of Conclusion section of this report, nothing has come
to our attention to suggest that management have inappropriately adopted the
going concern basis of accounting or that management have identified material
uncertainties relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of Directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the AIM rules.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the Review of Financial Information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of Our Report
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Financial Reporting Council. Our work has been undertaken so
that we might state to the Company those matters we are required to state to
it in an independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company, for our review work, for this report, or for the
conclusions we have formed.
Ajay Bahl BA BFP FCA
For and on behalf of
Wenn Townsend Chartered Accountants
Oxford, United Kingdom
29 November 2023
Consolidated statement of total comprehensive income (unaudited)
Six-month Period Ended (Unaudited) Six-month Period Ended (Unaudited) Year Ended (Audited)
30 Sept 30 Sept 31 Mar
2023 2022 2023
Note £000 £000 £000
Revenue 3 3,835 4,454 9,060
Cost of Sales (2,324) (2,723) (5,613)
Gross profit 1,511 1,731 3,447
Distribution costs (245) (368) (815)
Administrative expenses (1,211) (1,150) (2,360)
Total costs and expenses (1,456) (1,518) (3,175)
Profit from operations 55 213 272
Financial income - - -
Financial expense 4 (32) (19) (41)
Other income -
Profit before taxation 43 194 231
Income tax (expense) 5 - - -
Profit for the period from continuing operations 43 194 231
Loss from discontinued operations 6 - (15) -
Profit for the period and total comprehensive income attributable to equity 43 179 231
holders of the parent company
Earnings per share in share:
From continued operations - pence 7
Basic 0.32 1.43 1.70
Diluted 0.31 1.43 1.70
From discontinued operations - pence
Basic - (0.11) -
Total earnings per share - Basic 0.32 1.32 1.70
Total earnings per share - Diluted 0.31 1.32 1.70
Consolidated statement of financial position
30 Sept 30 Sept 31 Mar
2023 2022 2023
Note £000 £000 £000
Unaudited Unaudited Audited
Assets
Non-current assets
Property, plant and equipment 934 980 877
Intangible assets - 4 -
934 984 877
Current assets
Inventories 10,258 9,482 9,812
Trade and other receivables 8 2,101 2,677 2,058
Cash and cash equivalents - - 110
12,359 12,159 11,980
Total assets 13,293 13,143 12,857
Current liabilities
Bank overdrafts 274 302 164
Trade and other payables 9 2,164 2,053 1,973
Loans and borrowings 10 44 44 47
Right-of-use asset lease liabilities 11 345 322 227
Total current liabilities 2,827 2,721 2,411
10 118 169 140
Liabilities due over one year
Loans and borrowings
Right-of-use asset lease liabilities 11 675 675 676
Total liabilities due over one year 793 844 816
Total liabilities 3,620 3,565 3,217
Net assets 9,673 9,578 9,630
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 136 136 136
Share premium 9,516 9,516 9,516
Merger reserve 82 82 82
Retained earnings (61) (156) (104)
Total equity 9,673 9,578 9,630
Net Asset Value per Share in Issue 71.1p 70.4p 71.0p
These interim financial statements were approved by the Board of Directors on
29 November 2023 and signed on its behalf by Philip Tansey.
Statement of changes in equity
Share Share Merger Retained Total
Capital Premium reserve earnings equity
£000 £000 £000 £000 £000
136 9,516 82 (512) 9,222
Balance at 31 March 2021
- - - 164 164
Profit for the period from continued operations
Loss for the period from discontinued operations (29) (29)
Total comprehensive income for the period - - - 135 135
Balance at 30 September 2021 136 9,516 82 (377) 9,357
Profit for the period from continued operations 330 330
Loss for the period from discontinued operations - - - (288) (288)
Total comprehensive income for the period - - - 42 42
Balance at 31 March 2022 136 9,516 82 (335) 9,399
- - - 194 194
Profit for the period from continued operations
Loss for the period from discontinued operations (15) (15)
Total comprehensive income for the period - - - 179 179
Balance at 30 September 2022 136 9,516 82 (156) 9,578
- - - 37 37
Profit for the period from continued operations
Profit for the period from discontinued operations 15 15
Total comprehensive income for the period 42 42
Balance at 31 March 2023 136 9,516 82 (104) 9,630
- - - 43 43
Profit for the period from continued operations
Profit for the period from discontinued operations - -
Total comprehensive income for the period - - - 43 43
Balance at 30 September 2023 136 9,516 82 (61) 9,673
Consolidated statements of cashflows
30 Sept 30 Sept 31 Mar
2023 2022 2023
£000 £000 £000
Cash flows from operating activities
Profit before tax 43 179 231
Depreciation of property, plant and equipment 182 171 353
Amortisation of intangible assets - - 4
Finance expense 33 19 41
258 369 629
(Increase) / Decrease in inventories (446) 102 (228)
(Increase) in trade and other receivables (43) (458) 161
Increase/(decrease) in trade and other payables 191 (815) (895)
Net cash generated from operating activities (40) (802) (333)
Cash flows from investing activities
Purchase of property, plant and equipment (11) (16) (21)
Net purchase of right to use assets (228) (54) (239)
Net cash used in investing activities (239) (70) (260)
Cash flows from financing activities
Lease repayments for right-of-use assets 117 (107) (77)
Loans and borrowings (25) (22) (48)
Interest paid (33) (6) (41)
Net cash (used)/generated from financing activities 59 (135) (166)
Net (decrease) / increase in cash and cash equivalents (220) (1,007) (759)
Cash and cash equivalents at the beginning of the period (54) 705 705
Cash and cash equivalents at the end of the period (274) (302) (54)
Notes
1. General information
Scholium Group plc and subsidiaries (together 'the Group') are engaged in the
trading and retailing of rare and antiquarian book and, prints and works on
paper primarily in the United Kingdom. The Company is a public company
domiciled and incorporated in England and Wales (registered number 08833975).
The registered address is 106 New Bond Street, London W1S 1DN.
2. Basis of preparation
These condensed interim financial statements of the Group for the six months
ended 30 September 2023 (the 'Period') have been prepared using accounting
policies consistent with International Financial Reporting Standards (IFRSs)
including standards and interpretations issued by the International Accounting
Standards Board and in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006. The same
accounting policies, presentation and methods of computation are followed in
these condensed set of financial statements as applied in the Group's latest
audited financial statements for the year ended 31 March 2023. While the
financial figures included within this half-yearly report have been computed
in accordance with IFRS applicable to interim periods, this half-yearly report
does not contain sufficient information to constitute an interim financial
report as set out in International Accounting Standard 34 Interim Financial
Reporting. These condensed interim financial statements have not been audited,
do not include all of the information required for full annual financial
statements, and should be read in conjunction with the Group's consolidated
annual financial statements for the year ended 31 March 2023. The auditors'
opinion on these Statutory Accounts was unqualified, did not draw attention to
any matters by way of emphasis and did not contain a statement under s498 (2)
or s498 (3) of the Companies Act 2006.
3. Revenue
30 Sept 30 Sept 31 Mar
2023 2022 2023
Group Group Group
£000 £000 £000
Sales of stock - Books 2,900 3,420 7,042
Sales of stock - Gallery 858 808 1,777
Commissions 15 163 177
Other income 62 63 64
3,835 4,454 9,060
4. Financial (expense)
30 Sept 30 Sept 31 Mar
2023 2022 2023
Group Group Group
£000 £000 £000
Interest payable (13) (6) (16)
Unwinding of discount on right-to-use liabilities (19) (13) (25)
Total financial (expense) (32) (19) (41)
5. Income Tax
30 Sept 30 Sept 31 Mar
2023 2022 2023
£000 £000 £000
Current and deferred tax expense
Current tax - - -
Deferred tax - - -
Total tax expense - - -
The charge for the year is reconciled to the
profit per the income statement as follows:
30 Sept 30 Sept 31 Mar
2023 2022 2023
£000 £000 £000
Profit before tax 43 179 291
Applied corporation tax rates: 19% 19% 19%
Tax at the UK corporation tax rate of 19%: 8 34 44
Utilisation of tax losses (8) (34) (44)
Current and deferred tax charge - - -
6. Discontinued Operations
The Board determined in the year ended 31 March 2022 that the Mayfair
Philatelic business was not key to the future of the Group and in accordance
with IFRS5 - Non-current assets held for sale and discontinued operations, the
results for Mayfair Philatelic were shown as Discontinued operations in the
income statement of both the current and the prior period. The assets and
liabilities were recorded at the lower of the carrying value and fair value
less costs to sell in the financial statements. An analysis of the individual
line items is shown below.
Financial performance and cash flow information
Results in £'000 30 Sept 30 Sept 31 Mar
2023 2022 2023
Revenue - - -
Cost of sales - - -
Gross Profit - - -
Distribution expenses - - -
Administration expenses - - -
Offset against brought forward provision - - -
(Loss) before impairment charges - - -
Impairment charges against debtors and stock - (15) -
(Loss) before tax - (15) -
Tax - - -
(Loss) from discontinued operations - (15) -
There have been no sales or costs in the six months ended 30 September 2023
that had not already been provided for in prior periods.
Assets and liabilities of discontinued business
The assets and liabilities relating to a discontinued business are included
within the relevant line of the Group Consolidated statement of financial
position at the lower of the carrying value and fair value less costs to sell.
These amounted to nil in the current period:
£'000 30 Sept 30 Sept 31 Mar
Assets 2023 2022 2023
Fixed assets - 2 -
Intangible assets - 4 -
Current assets - Stock - 27 -
Current assets - debtors and prepayments - 79 -
Total assets of Discontinued business - 112 -
Liabilities
Trade creditors - 2 -
Accruals - 94 -
Total Liabilities of Discontinued business - 96 -
7. Earnings per Share - pence
30 Sept 30 Sept 31 Mar
2023 2022 2023
Group Group Group
£000 £000 £000
Profit used in calculating basic and diluted earnings per share attributable
to the owners of the parent
Continuing 43 194 231
Discontinued (Note 6) - (15) -
Total 43 179 231
Number of shares (millions)
for the calculation of earnings per share:
Weighted average number of shares - basic 13.6
13.6 13.6
Weighted average number of shares - options 0.25 - -
Total diluted average number of shares 13.85 13.6 13.6
Basic earnings per share from continuing operations 0.32 1.21 1.70
Basic loss per share from discontinued operations - (0.22) -
Total basic earnings per share 0.32 1.32 1.70
Total basic and diluted earnings per share 0.31 1.32 1.70
The Company announced on 16 June 2023 that it had granted options under the
Company's Enterprise Management Incentive Share Option Scheme ("EMI Option
Scheme") over a total of 1,000,000 ordinary shares of 1 pence in the Company
("Option Shares") to certain employees including 700,000 to directors of the
Company. The Option Shares have an exercise price of 37.5p per share (being
the closing mid-market share price on 16 June 2023), vest over the three years
from the date of grant (ensuring the employees remain in continuous employment
within the Group) and once vested, are exercisable at any time up to ten years
after the date of grant.
Basic and diluted earnings per share amounts are calculated by dividing net
profit for the year or period attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares outstanding during
the period or year and, the weighted average number of ordinary shares
outstanding during the period combined with the weighted average number of
ordinary shares subject to option outstanding during the period or year
respectively. No new shares were issued during the period, and the Company had
13.6 million shares in issue and 1.0 million shares subject to option at the
end of the period.
8. Trade and Other Receivables
30 Sept 30 Sept 31 Mar
2023 2022 2023
Group Group Group
£000 £000 £000
Trade debtors 1,616 2,262 1,713
Other debtors 8 - 25
Prepayments and accrued income 477 415 320
2,101 2,677 2,058
9. Trade and Other Payables
30 Sept 30 Sept 31 Mar
2023 2022 2023
Group Group Group
£000 £000 £000
Trade creditors 1,379 1,158 1,253
Other taxes and social security 32 (18) 32
Accruals and deferred income 727 890 664
Other creditors 26 23 24
2,164 2,053 1,973
10. Loans and Borrowings
30 Sept 30 Sept 31 Mar
2023 2022 2023
Group Group Group
£000 £000 £000
44 44 47
Bank loan due in less than one year
Bank loan due in more than one year 118 169 140
162 213 187
Total bank loan
11. Right-of-use asset lease liabilities
30 Sept 30 Sept 31 Mar
2023 2022 2023
Group Group Group
£000 £000 £000
Current liabilities 345 322 227
liabilities due in more than one year 675 675 676
These liabilities represent the future lease payments due under the Group's
leases of its Mayfair premises and a motor vehicle.
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