REG - Scholium Group PLC - Interim Results
28/11/2024 07:00
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RNS Number : 9202N Scholium Group PLC 28 November 2024
Scholium Group plc
Interim Report & Financial Statements
Six Months ended 30 September 2024
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 2024.
Financial Summary
Six months ended September 2024 2023 Change
(£000 unless otherwise stated)
Revenue 4,970 3,835 30%
Gross Profit 2,000 1,511 32%
Gross Margin 40.3% 39.4%
Distribution Expenses (202) (231) 13%
Administrative Expenses (1,489) (1,205) (24)%
Employee share option scheme charge (18) - -
Finance expenses (70) (32) (119)%
Pre-Tax Profit before exceptional items 221 43 414%
Exceptional items (54) - -
Profit before tax 167 43 288%
Inventories 10,623 10,258 4%
Net Cash (433) (274) (58)%
Net Assets 10,146 9,673 5%
NAV/Issued Share (pence) 74.6 71.1 5%
Earnings per share on a diluted basis (pence) 1.23 0.31 297%
NAV/Issued Share (pence) 74.6 71.1 5%
David Harland, Chair of Scholium, noted:
"We are very pleased with the performance of the Group in recording its
seventh consecutive profitable half-year period, a period that included the
transition to our new single flagship property in Bond Street for both books
and art which understandably created the exceptional costs incurred in the six
month period. The on-going difficult geo-political situation naturally
presents a difficult environment in which to plan but we are pleased with the
on-going sales at the new property and remain positive about the coming
six-month period.
We are announcing immediately after these results a proposal to seek
shareholder authority to cancel the admission of our shares to AIM. The value
attributed to our shares by the market, relative to the underlying net asset
value, has made it difficult to benefit from being quoted, and the Board feels
the costs of maintaining that quotation are no longer justified."
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
Zeus Capital Markets Ltd - Nominated Adviser +44 (020) 7220 1666
Chris Fielding
Isaac Hooper
Business Review
Scholium is engaged in the business of rare books and modern prints. 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 2024 from the sale
of rare books, prints and works on paper through its wholly owned subsidiary,
Shapero Rare Books Limited.
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; 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 and exceptional items of £221k during the
six months to 30 September 2024, a 413% increase from the profit of £43k for
the corresponding period last year with overall margins continuing to improve.
Overall turnover was 30% higher compared to the same period in the prior year.
This was felt across both books and art and the increasingly important shop
whose contribution has continued to improve. Books sales were significantly
improved at £3,853k (2023: £2,900k) whilst Gallery sales of art through
several initiatives and exhibitions improved to £1,086k (2023: £858k). As a
result, gross profit of £2,000k compared to the prior period total of
£1,511k.
Group costs, including Distribution and Administrative expenses, increased by
18% to £1,691k (2023: £1,436k). This increase resulted from the active
decision to increase our number of specialist subject team members in order to
raise revenues.
The Group result for the six months was a profit before tax and extraordinary
items of £221k (2023: profit of £43k).
Inventories increased by £365k to £10,623k (2023: £10,258k) in line with
our expectations with regard to sales activities as witnessed by the increase
in revenue. Group cash balances continue to fluctuate monthly in line with
stock purchases and trade debtors with net overdraft balances of £(433)k at
30 September 2024 (2023: £(274k)).
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 quoted
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) 2024 2023
Profit before exceptional items 221 43
Add back:
Employee share option scheme 18 -
Central costs of the quoted group 178 197
Depreciation & amortisation* 323 182
Finance expenses 71 32
Operating EBITDA 811 455
*inflated in this period on account of the two property leases being
surrendered and consolidated into the new single property lease.
The impact of costs associated with our quoted status are the principal reason
behind our proposal to shareholders being announced today to approve the
cancellation of the trading of our shares on AIM.
Financial Position
The Group retains a strong balance sheet. Net assets of £10,146k (2023:
£9,673k) include £10,623k of stock (2023: £10,258k) and a bank position of
£(433)k (2023: £(274)k). The Covid loan, drawn down in October 2020 of
£250k, has been further reduced by repayment to the current £112k (2023:
£162k). As a result, there is an increase to 74.6p of net assets per ordinary
share currently in issue (2023: 71.1p).
Shapero Rare Books & Shapero Modern
Shapero Rare Books operates from its new flagship store, gallery and offices
at 94 New Bond Street.
Summary Performance
Six months ended September (all figures £'000) 2024 2023 Change
Revenue 4,970 3,835 30%
Gross Profit 2,000 1,511 32%
Gross Margin 40% 39%
Pre-Tax Profit before central costs & exceptional items 417 240
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, shown a healthy rise versus
the same period in the prior year across both books and the gallery.
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 before exceptional items incurred in the period on account
of the property relocation of £14k (2023: £nil) were £196k (2023:
£197k).
Total Group Exceptional expense items of £54k (2023: £nil) have been
incurred as a result of the fit-out of our new premises into which we moved
over the summer months.
The significant increase in the Right of Use asset to 2,488k (2023: £934k)
and the corresponding Right-of-use lease liability of less than one year of
£426k (2023: £345k) and Right-of-use lease liability of more than one year
of £1,493k (2023: £675k) were also on account of the move into our new
flagship store, gallery and offices.
Outlook
The Group continues to focus on its two profitable businesses, rare books and
modern prints and is looking to continue the profitable performance of the
recent years 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.
In the event that shareholders approve the Board's proposal to cancel the
admission of the trading of the shares on AIM, we would expect annual savings
in excess of £100k.
Key Risks
Like all businesses, the Group faces risks and uncertainties that could impact
on the Group's strategy. The Board recognises that 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 2024.
In preparing this interim report for the six months ended 30 September 2024,
the Board has reviewed these risks and uncertainties and considers that there
have been no changes since the publication of the 2024 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 2024 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 2024 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) 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
28 November 2024
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
2024 2023 2024
Note £000 £000 £000
Revenue 3 4,970 3,835 9,266
Cost of Sales (2,970) (2,324) (5,618)
Gross profit 2,000 1,511 3,648
Distribution costs (202) (231) (778)
Administrative expenses (1,489) (1,205) (2,476)
Total costs and expenses (1,691) (1,436) (3,252)
Profit from operations 309 75 394
Charge for share options granted to employees (18) - (31)
Financial income - - -
Financial expense 4 (70) (32) (63)
Other income -
Profit before exceptional items 221 43 300
Exceptional items - New property refit (54) - -
Profit before taxation 167 43 300
Income tax (expense) 5 - - -
Profit for the period and total comprehensive income attributable to equity 167 43 300
holders of the parent company
Total earnings per share in pence 6 1.15 0.31 2.21
Consolidated statement of financial position
30 Sept 30 Sept 31 Mar
2024 2023 2024
Note £000 £000 £000
Unaudited Unaudited Audited
Assets
Non-current assets
Property, plant and equipment 2,488 934 717
Intangible assets - - -
2,488 934 717
Current assets
Inventories 10,623 10,258 10,569
Trade and other receivables 7 2,374 2,101 2,760
Cash and cash equivalents 4 - 245
13,001 12,359 13,574
Total assets 15,489 13,293 14,291
Current liabilities
Bank overdrafts 437 274 262
Trade and other payables 8 2,548 2,164 2,536
Loans and borrowings 9 284 44 523
Right-of-use asset lease liabilities 10 426 345 188
Total current liabilities 3,695 2,827 3,509
9 155 118 249
Liabilities due over one year
Loans and borrowings
Right-of-use asset lease liabilities 10 1,493 675 572
Total liabilities due over one year 1,648 793 821
Total liabilities 5,343 3,620 4,330
Net assets 10,146 9,673 9,961
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 412 (61) 227
Total equity 10,146 9,673 9,961
Net Asset Value per Share in Issue 74.6p 71.1p 73.3p
These interim financial statements were approved by the Board of Directors on
28 November 2024 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
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
Total comprehensive income for the period - - - 43 43
Balance at 30 September 2023 136 9,516 82 (61) 9,673
- - - 257 257
Profit and total comprehensive income for the period
Employee share option scheme 31 31
Balance at 31 March 2024 136 9,516 82 227 9,961
- - - 167 167
Profit and total comprehensive income for the period
Employee share option scheme 18 18
Balance at 30 September 2024 136 9,516 82 412 10,146
Consolidated statements of cashflows
30 Sept 30 Sept 31 Mar
2024 2023 2024
£000 £000 £000
Cash flows from operating activities
Profit before tax 167 43 301
Employee share option scheme charge 18 - 31
Depreciation of property, plant and equipment 323 182 374
Gain of disposal of lease (82) - -
Finance expense 70 33 63
496 258 769
(Increase) / Decrease in inventories (54) (446) (757)
(Increase) in trade and other receivables 386 (43) (702)
Increase/(decrease) in trade and other payables 12 191 553
Net cash generated/(used) from operating activities 344 (298) (906)
Cash flows from investing activities
Purchase of property, plant and equipment (451) (11) (21)
Net purchase of right to use assets (140) - -
Net cash used in investing activities (591) (11) (21)
Cash flows from financing activities
Lease repayments for right-of-use assets (296) (111) (337)
Non-Bank loan financing (437) - 634
Loans and borrowings 105 (25) (49)
Interest paid (37) (33) (63)
Net cash generated/(used) from financing activities (665) (169) 185
Net (decrease) / increase in cash and cash equivalents (416) (220) 27 (220)
Cash and cash equivalents at the beginning of the period (17) (54) (44) (54)
Cash and cash equivalents at the end of the period (433) (274) (17)
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 94 New Bond Street, London W1S 1DJ.
2. Basis of preparation
These condensed interim financial statements of the Group for the six months
ended 30 September 2024 (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 2024. 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 2024. 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
2024 2023 2024
Group Group Group
£000 £000 £000
Sales of stock - Books 3,853 2,900 6,887
Sales of stock - Gallery 1,086 858 2,274
Commissions 22 15 20
Other income 9 62 85
4,970 3,835 9,266
4. Financial (expense)
30 Sept 30 Sept 31 Mar
2024 2023 2024
Group Group Group
£000 £000 £000
Interest payable (37) (13) (41)
Unwinding of discount on right-to-use liabilities (34) (19) (22)
Total financial (expense) (71) (32) (63)
5. Income Tax
30 Sept 30 Sept 31 Mar
2024 2023 2024
£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
2024 2023 2024
£000 £000 £000
Profit before tax 167 43 300
Applied corporation tax rates: 25% 19% 25%
Tax at the UK corporation tax rate of 25%: 42 8 75
Utilisation of tax losses (42) (8) (75)
Current and deferred tax charge - - -
6. Earnings per Share - pence
30 Sept 30 Sept 31 Mar
2024 2023 2024
Group Group Group
£000 £000 £000
Profit used in calculating basic and diluted earnings per share attributable
to the owners of the parent
Total 167 43 300
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 1.00 - -
Total diluted average number of shares 14.6 13.6 13.6
Total basic earnings per share 1.23 0.32 2.21
Total diluted earnings per share 1.15 0.31 2.21
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 (subject to 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.
7. Trade and Other Receivables
30 Sept 30 Sept 31 Mar
2024 2023 2024
Group Group Group
£000 £000 £000
Trade debtors 2,003 1,616 2,389
Other debtors 70 8 -
Prepayments and accrued income 301 477 371
2,374 2,101 2,760
8. Trade and Other Payables
30 Sept 30 Sept 31 Mar
2024 2023 2024
Group Group Group
£000 £000 £000
Trade creditors 1,158 1,379 1,451
Other taxes and social security 41 32 37
Accruals and deferred income 1,324 727 917
Other creditors 25 26 131
2,548 2,164 2,536
9. Loans and Borrowings
30 Sept 30 Sept 31 Mar
2024 2023 2024
Group Group Group
£000 £000 £000
Loans due in less than one year
Bank loans 87 44 47
Non-Bank loans 197 476
Total loans due in less than one year 284 44 523
Loan due in more than one year
Bank loans 155 118 91
Non-Bank loans - - 158
155 118 249
Total loans due in more than one year
10. Right-of-use asset lease liabilities
30 Sept 30 Sept 31 Mar
2024 2023 2024
Group Group Group
£000 £000 £000
Current liabilities 426 345 188
Liabilities due in more than one year 1,493 675 572
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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