REG - Scholium Group PLC - Preliminary Results for the YE 31 March 2022
25/08/2022 07:01
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220825:nRSY1410Xa&default-theme=true
RNS Number : 1410X Scholium Group PLC 25 August 2022
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.
Scholium Group plc
('Scholium' or the 'Group')
Preliminary Results for the year ended 31 March 2022
Scholium is pleased to announce the Group's audited results for the year ended
31 March 2022.
Scholium is engaged in the business of rare books, modern prints, art and
collectibles. Its wholly-owned operating subsidiary, Shapero Rare Books
Limited, is one of the leading UK dealers trading internationally in rare and
antiquarian books and works on paper, and also trades as Shapero Modern, a
leading UK dealer in the growing marketplace for modern and contemporary
prints.
Operating Highlights
· A significant and encouraging increase in both physical
and online sales
· The Group's profitability restored, at £177k before
tax
· Profit before tax is stated after £240k of costs and provisions
due to the closure of Mayfair Philatelic
· Group net cash of £470k after deducting Covid bank
loan of £235k
· Group continues to trade profitably in the first four
months of the current year
Financial Highlights
Years ended 31 March (£'000) 2022 2021
Revenue 8,129 5,148
Gross Profit 3,071 1,691
Gross Margin 38% 33%
Profit / (Loss) before tax 177 (437)
Cash / (net borrowings) 470 (248)
NAV/Share 69p 68p
A copy of the 2022 Annual Report (including the notice of Annual General
Meeting ("AGM") will be sent to shareholders in due course. The Annual Report
will also be available on the Company's website in due course
at www.scholiumgroup.com (http://scholiumgroup.com/) .
The Company's AGM will be held at 10.30am at 106 New Bond Street, London W1S
1DN on 28 September 2022.
David Harland, Chairman of Scholium, noted "The Board is delighted with the
turnaround and remains focused on further enhancing shareholder value and
continuing to search for further opportunities in related areas to build upon
this pleasing result."
For further information, please contact:
Scholium Group +44 (0)20 7493 0876
plc
David Harland, Chairman
Bernard Shapero, Chief Executive
Philip Tansey, Finance Director
WH Ireland Ltd - Nominated Adviser +44 (0)20 7220 1666
Chris Fielding, Megan Liddell
Chairman's Statement
I am delighted to present my first statement as Chair and to report that the
Group's revenues for the year ended 31 March 2022 increased by 58% to £8.1
million (2021: £5.2 million) as a result of the return to some semblance of
normality following the adverse impact of Covid in the prior year. This is the
first profit in four years.
The Board is delighted with the turnaround and remains focused on further
enhancing shareholder value, incentivising its executive and staff and
continuing to search for further opportunities in related areas to build upon
this pleasing result.
The Group remains well capitalised with £9.6 million of stock, and net cash
of £470k after deducting the £235k of government Covid assistance loans. The
Group also has an undrawn overdraft facility of £500k available to it.
Results
Group revenue for the year of £8.1 million (2021: £5.2 million) generated a
profit before tax of £177k (2021: loss of £437k). The Group continues to not
recognise deferred tax assets and therefore the profit after tax for the year
to 31 March 2022 was also £177k (2021: loss of £437k).
Staff
The Group's operations continue to rely on the hard work and dedication of our
small number of employees and I would like to take this opportunity of
thanking them for their contribution and effort, during the year.
Current Trading and Prospects
Trading conditions have improved over the year and the Group's retail premises
have enjoyed at least a return to something approaching normality following
the closures of the prior Covid impacted year. Trading for the first four
months of the current year has been profitable, which is encouraging, and net
cash is positive. The current global political and economic environment is not
only depressing but challenging and it is difficult to forecast the future
prospects of the business though based on current trading we remain cautiously
optimistic.
Board
I want to place on record the gratitude of my fellow Board members and myself
to Jasper Allen for having steered the Group as Chairman for the last seven
years since its IPO and to Peter Floyd, who after five years retired as our
Finance Director in March this year. And it is with pleasure that I welcome
Bernard as Group CEO in addition to his role as CEO of Shapero Rare Books
Limited and to Philip Tansey as Finance Director.
Chief Executive's Statement
I am delighted to present my first report as Chief Executive officer of the
public Group appointed as I was to the role in March 2022. This has been a
significant year in many ways which I expand on below and I am most thankful
for the excellent team with whom I work and who have laboured through the many
challenges of the recent years resulting in a Group profit.
Overview
Scholium Group has had a year of progress and we look to build upon the
success of the financial year 2021/22 the highlights being;
- A full return to work following the relaxation of the Covid-19
lockdown rules that so hampered our business;
- The securing of our Bond Street offices and shop through to August
2023;
- The Board decision to close the Mayfair Philatelic business; and,
- Group profitability restored.
The Year 2021/22
The general state of the market for Books and Art was encouraging as the year
progressed in both physical markets as well as on-line and particularly for
art which continues to enjoy high levels of retail interest at both the shop
and at fairs which are now returning with many taking place for the first time
in three years. The market in collectible stamps continued to be challenging
and the Board took the decision in the year to close the Mayfair Philatelic
business. This is now in run-down mode with the final stock being auctioned
and the remaining debtors being collected.
Revenue has increased by 58% to £8,129k (2021: £5,148k). The revenue figures
presented for this year and the prior financial year are for books and art
alone with the Mayfair Philatelic stamps revenue presented as a separate line
in the accounts. As a result of this increase in revenue, a keen focus on
costs and despite the losses taken on closing the Mayfair Philatelic business,
the Group recorded a profit of £177k (2021: loss of £437k).
Looking forward
It is encouraging to report that the performance of the business in the first
four months of the new financial year has been in line with our expectations,
with a profitable start. Clearly there are some global economic headwinds, but
with our multi-channel sales routes of retail premises, an extensive online
presence and exhibiting at international trade fairs; I feel we are well
placed to keep the positive momentum going forward, in the coming year.
Staff
I have a fabulous team around me without whom the turnaround in results last
year could not have been achieved and I thank them for their dedication and
hard work throughout the year.
Shareholders
I am delighted with the support and guidance received from our major
shareholders and look forward to taking the Group to future success.
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 2022; 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 dealing in 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 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 Philatelics is a dealer and auctioneer of stamps with a particular
focus on British and Commonwealth stamps which the Board has taken the
decision to close. Its estimated results up to and including closure, which
will finally take place within the new financial year to March 2023, have been
treated within the accounts for this year ended 31 March 2022 as Discontinued
Business.
Strategy & Key Objectives
The Group's strategy is to:
• build, either organically or by acquisition, a portfolio of
art and collectibles focused 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;
• optimise working capital in existing businesses to provide
funds for new business development; and,
• trade alongside other dealers in high value rare and
collectible items and participate in the acquisition for onward sale of large
consignments.
Review of the year from continuing operations
The Group's revenues increased to £8.1m from £5.2m in the prior year due to
increased sales in each of the constituent businesses. The Group's core
business was profit making during the both the first and second half of the
financial year. Gross profit increased by 85% compared with the prior year
ended 31 March 2021, and the margin made on sales rose from 33% last year to
38% in the year ended 31 March 2022 as a result of increased activity in the
market and the active drive by management to improve such margins.
Administrative expenses rose 20% to £2,262k (2021: £1,882k) with the return
of art fairs and accompanying marketing costs increasing. Central costs,
including the costs of the Company's membership of AIM, were also higher than
the prior year on account of a one-off director payment.
The Group incurred exceptional costs associated with the closure of the
Mayfair Philatelic business of £240k which include some costs incurred after
the end of the financial year and these are shown as discontinued business
with further detail set out in note 14.
The Group's profit before tax for the year to 31 March 2022 was £177k. (2021:
Loss of £437k)
6 months ended (£'000) H1* H2 Group Total Incl. Mayfair Mayfair results deducted Group stand alone total
Revenue 4,203 4,606 8,809 680 8,129
Gross Profit 1,443 1,934 3,377 306 3,071
Profit / (Loss) before tax 135 223 494 (317) 177
*H1 Unaudited figures
The Group's stock at 31 March 2022 was £9,584k comprising £9,470k for books
and art and £114k for the value of the Mayfair Philatelic stock compared with
the prior year's total of £9,025k. The stock of Mayfair Philatelic is in the
process of being run-down as the decision has been taken by the Board to exit
this business.
Group cash at 31 March 2022 was £705k. the Covid bank loan taken in 2020 has
been reduced over the year from £250k to £235k. All of this compares
favourably with the £2k cash of the prior year. The Group's overdraft
facility of £500k was undrawn at the year-end date.
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, gross margin and profit
before tax;
• the breadth and distribution of the stock of
rare books held by the Group;
• stock turnover; and
• cash position.
Key Performance Indicators (on continuing business) 2022 2021
Years ended 31 March (£'000)
Variance
Revenue 8,129 5,148 58%
Gross Profit 3,071 1,691 82%
Gross Margin 38% 33% 15%
Stock Turnover (months) 22.1 31.3 -29%
Net cash / (Net borrowings) 466 (248) n/a
Group Performance
Shapero Rare Books
Shapero Rare Books (SRB) traded profitably through the year ended 31 March
2022 off the back of increased activity in physical as well as on-line sales
and at trade fairs following the reduction in Covid restrictions. The year's
sales including books through Scholium Trading were £8,129k, over 50% above
the prior year's sales of £5,098k for SRB and £50k for Scholium Trading
totaling £5,148k and gross profit at £3,071k for the year ended 31 March
2022 was over 80% above the prior year of £1,691k.
Direct costs including the attendance at fairs, exhibitions, and catalogues
increased from £214k in the prior year to £340k in the year to 31 March
2022. This reflected the resumption, albeit partial, of exhibiting at fairs.
Overhead costs, increased from £1,882k in the prior year to £2,262k in the
year to 31 March 2022.
SRB therefore recorded a profit before tax of £850k compared with the loss of
£119k in the prior year.
Mayfair Philatelics
The Board determined that the market for stamps was not one that could
generate the success and profits in books and art and therefore the decision
was taken to close the business. The results of the business have been
presented and treated as discontinued business within these report and
accounts and the impact of this is fully explained in note 13 to these
accounts.
Central Costs
Central costs include the cost of all board members as well as those costs
associated with the Group's AIM public trading. The central costs were
£409k in the year to 31 March 2022, an increase of £95k from the prior
year's total of £314k. These costs include the cost of managing the Group,
its audit, tax and professional fees, as well as the costs of maintaining the
AIM membership for the Company's shares and for this year include a one-off
payment, including associated social security costs, to a former director of
£90k.
Year ended 31 March 2022 (£'000)
Shapero Rare Books Scholium Trading Central Continuing business
Revenue 7,911 218 - 8,129
Gross Profit 3,066 63 - 3,071
Gross Margin 38% 29% - 38%
Profit/(Loss) before tax 850 54 (409) 494
Year ended 31 March 2021 (£'000)
Shapero Rare Books Scholium Trading Central Continuing business
Revenue 5,098 50 - 5,148
Gross Profit 1,678 14 - 1,691
Gross Margin 33% 28% - 33%
Profit/(Loss) before tax (119) (1) (314) (434)
Dividend
The Board does not propose to declare a final dividend for the financial year
ended 31 March 2022. (2021: £Nil)
Alternative accounting presentation
The Board is focused on demonstrating shareholder return and as part of that
desire is the analysis of the core performance of the Group's trading business
without costs that are more concerned with 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.
Year ended 31 March (£'000) 2022 2021
Profit / (Loss) for the year 177 (434)
Add back:
Central costs 409 314
Mayfair Philatelic losses 317 3
Depreciation & amortisation (Note 6) 231 322
Finance expenses (Note 11) 33 30
Re-stated EBITDA for the year 1,167 235
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 Philatelics 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 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 uncertain the
Group could claim on 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 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 operates.
Although there is a risk that the increasing demand for online retail will
render 'high street' premises uneconomic, the Directors believe that a central
London location is 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 number 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 Group does 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 hedging contracts in respect of currency positions.
Pandemics and government imposed trading restrictions
Pandemics such as Covid-19 in the prior financial year resulted in the closure
of the Group's retail premises for several months and the cancellation of all
fairs and exhibitions, together with restrictions on the mobility of its
staff, customers and suppliers. The Group has other avenues to market
available to it, including the internet, telephone and post, but it may be
difficult for the Group to trade profitably while such a pandemic is present.
Future prospects
The Group has traded profitably in the first four months of the current year.
The core business of Shapero Rare Books is one of the leading UK rare book
dealers, with a solid international customer base. Further attention will be
required in order to improve its return on capital employed, particularly
stock turnover. The Board has implemented several online initiatives to manage
this.
Scholium Trading has an established position with several other dealers, and
in addition, the current stock includes some items with potentially high
levels of return. The Board is not intending to increase the capital available
to this business, until the market conditions improve.
The Board continues to review the opportunity for further cost savings to
improve the Group's profitability and create improved shareholder value.
During the year ending 31 March 2023 the Board will assess opportunities for
future property, enhanced selling channels and improving the sales of
slow-moving and aged stock.
Consolidated Statement of Comprehensive Income
Year ended Year ended
31 Mar 31 Mar
2022 2021
Note £000 £000
Revenue 3 8,129 5,148
Cost of Sales (5,058) (3,456)
Gross profit 3,071 1,691
Distribution expenses (340) (214)
Administrative expenses (2,262) (1,882)
Total administrative expenses (2,262) (1,882)
Profit/(loss) from operations 469 (404)
Financial (expense) (33) (30)
Other income 58 -
Profit/(loss) before taxation 494 (434)
Income tax (expense) 7 - -
Profit / (Loss) for the year from continuing operations and total 494 (434)
comprehensive income attributable to equity holders of the parent company
Loss from discontinued operations 8 (317) (3)
Profit/(Loss) for the year and total comprehensive income attributable to 177 (437)
equity holders of the parent company
Earnings per share (in pence): 9
From continuing operations 3.63 (3.19)
From discontinued operations (2.33) (0.02)
Total Earnings per share 1.30 (3.21)
Consolidated Statement of Financial Position
31 Mar 31 Mar
2022 2021
Note £000 £000
Assets
Non-current assets
Property, plant and equipment 970 1,175
Intangible assets 10 4 8
Deferred corporation tax asset 12 - -
974 1,183
Current assets
Inventories 13 9,584 9,025
Trade and other receivables 14 2,219 1,689
Cash and cash equivalents 705 2
12,508 10,716
Total assets 13,482 11,899
Current liabilities
Trade and other payables 2,868 1,308
Loans and borrowings 15 47 250
Right-of-use asset lease liabilities 17 193 1,119
Total current liabilities 3,108 2,677
Non-current liabilities
Loans and borrowings 15 188 -
Right-of-use asset lease liabilities 787 -
Total non-current liabilities 975 -
Total liabilities 4,083 2,677
Net assets/liabilities 9,399 9,222
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 16 136 136
Share Premium 9,516 9,516
Merger reserve 82 82
Retained (loss) (335) (512)
Total equity 9,399 9,222
Consolidated Statement of Changes in Equity
Share Share Merger Retained Total
Capital Premium reserve earnings equity
£000 £000 £000 £000 £000
136 9,516 82 177 9,911
Balance at 1 April 2019
(Loss) for the year from continued and discontinued operations - - - (252) (252)
Total comprehensive income for the period - - - (252) (252)
136 9,516 82 (75) 9,659
Balance at 31 March 2020
- - - (437) (437)
(Loss) for the year from continued and discontinued operations
Total comprehensive income for the period - - - (437) (437)
136 9,516 82 (512) 9,222
Balance at 31 March 2021
- - - 177 177
Profit for the year from continued and discontinued operations
Total comprehensive income for the period - - - 177 177
136 9,516 82 (335) 9,399
Balance at 31 March 2022
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 Cumulative profit/(loss) of the Group attributable to equity shareholders.
Consolidated Statement of Cash Flows
31 Mar 31 Mar
2022 2021
£000 £000
Cash flows from operating activities
(Loss)/profit before tax 177 (437)
Depreciation of property, plant and equipment 231 322
Amortisation of intangible assets 4 4
Interest paid 33 -
445 (111)
(Increase)/decrease in inventories (559) (122)
Decrease/(increase) in trade and other receivables (530) (70)
Increase/(decrease) in trade and other payables 1,560 1,068
Net cash generated from operating activities 916 765
Cash flows from investing activities
Purchase of property, plant and equipment (26) (56)
Purchase of right-to -use assets - (920)
Net cash (used) in investing activities (26) (976)
Cash flows from financing activities
Lease repayments for right-of-use assets (165) (288)
Bank loan (15) 250
Interest paid (7) (30)
Net cash (used) from financing activities (187) (68)
Net increase/(decrease) in cash and cash equivalents 703 (279)
Cash and cash equivalents at the beginning of the year 2 281
Cash and cash equivalents at the end of the year 705 2
Company Statement of Financial Position
31 Mar 31 Mar
2022 2021
Note £000 £000
Assets
Non-current assets
Group Investments 11 2,391 2,391
Deferred tax asset - -
2,391 2,391
Current assets
Trade and other receivables 14 7,115 7,464
Cash and cash equivalents (160) -
6,955 7,464
Total assets 9,346 9,855
Current liabilities
Trade and other payables 59 85
Loans and borrowings 15 47 309
Total current liabilities 106 394
Non-current liabilities
Loans and borrowings 15 188 -
Total liabilities 294 394
Net assets/liabilities 9,052 9,461
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 16 136 136
Share Premium 9,516 9,516
Merger reserve - -
Retained earnings/(deficit) (600) (191)
Total equity 9,052 9,461
Statement of Changes in Company Equity
Share Share Merger Retained Total
Capital Premium reserve earnings equity
£000 £000 £000 £000 £000
Balance at 1 Apr 2019 136 9,516 2,809 368 12,829
Loss for the year - - - (328) (328)
Total comprehensive income for the period - - - (328) (328)
Write-off of merger reserve - - (2,809) - (2,809)
Write-off of merger reserve
Balance at 31 March 2020 136 9,516 - 40 9,962
(Loss) for the year - - - (231) (231)
Total comprehensive income for the period - - - (231) (231)
Balance at 31 March 2021 136 9,516 - (191) 9,461
(Loss) for the year - - - (409) (409)
Total comprehensive income for the period - - - (409) (409)
136 9,516 - (600) 9,052
Balance at 31 March 2022
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 Cumulative profit/(loss) of the Group attributable to equity shareholders.
Company Cashflow
31 Mar 31 Mar
2022 2021
£000 £000
Cash flows from operating activities
(Loss)/profit before tax (409) (231)
Interest paid 7 -
(402) (231)
Decrease/(increase) in trade and other receivables 349 (100)
(Decrease)/increase in trade and other payables (26) 15
Net cash generated from operating activities (79) (316)
Cash flows from investing activities
Dividends receivable from subsidiary undertakings - -
Net cash generated from investing activities - -
Cash flows from financing activities
Bank loan (22) 250
Net cash (used)/generated from financing activities (22) 250
Net (decrease) in cash and cash equivalents (101) (66)
Cash and cash equivalents at the beginning of the year (59) 7
(Overdraft)/cash and cash equivalents at the end of the year (160) (59)
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 106 New Bond Street, London W1S 1DN.
2 Basis of preparation and accounting policies
The financial statements have been prepared in accordance with International
Financial Reporting Standards 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 consolidated and Company financial statements have been prepared on an
historical cost basis.
The preparation of financial statements in conformity with IFRSs requires the
use of certain accounting estimates. It also requires management to exercise
its judgement in the process of applying the Group's accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated financial
statements are disclosed in note 3 below.
The functional and presentational currency of the Group and the Company is
pounds sterling. The financial information is shown to the nearest £1,000.
The principal accounting policies applied by the Group in the preparation of
these consolidated financial statements for the years ended 31 March 2022 and
31 March 2021 are set out below. These policies have been consistently
applied to all periods presented.
Going concern
The Group's trading was severely disrupted due to the restrictions imposed
internationally as a result of the onset of Covid-19 during March 2020, and
which remained in place for much of the year ended 31 March 2021. All Covid-19
restrictions have been lifted and this was much the case for the majority of
the current year ended 31 March 2022.
The Group remained throughout the lockdown period in 20/21 in a reasonably
strong position with nearly £9 million of stock and with only a £250,000
Covid bank loan. Despite the closure of the Group's retail premises and the
cancellation of all of the trade fairs both in the UK and overseas in the
current financial year to date, sales continued on the internet, by telephone
and by post. Whilst sales in total were reduced to the point where the Group
made a loss for the year-ended 31 March 2021 the relatively robust nature of
the Group's finances not allowed it to survive but resume active business in
the year to March 2021 and generate its first profit in a number of years. At
the year-end net cash exceeds £400k after taking into account the now
reducing Government Covid loan and the £0.5 million overdraft facility
remains undrawn.
The Directors have reviewed the activities of the Group since 1 April 2021
with a view to determining whether there are any material uncertainties which
may impact whether the Group can be considered to be a going concern. The
Group's primary activities can be classified as retail, and therefore the
Directors have considered the Group's position in the light of the retail
industry as a whole as well as the Group's own circumstances. The Group's
leases on its retail premises are at relatively low rents, and in the case of
the New Bond Street lease, having an term date of August 2023. The Group
therefore does not have any exposure to any onerous leases. The Group has an
international customer base, and is not dependent on footfall generating sales
from its London premises, or its presence at international fairs.
The Group has only a £250,000 Covid bank loan, which at the year-end date is
now £235k, repayable over five years and therefore is not exposed to any
liabilities where the terms of repayment may change as a result of the
lender's response to Covid-19. The Group has no creditors over one year, and
no liabilities to a defined benefit pension scheme.
The Group has enjoyed a successful year and continues to expand sales channels
with its own online auctions. The Directors have prepared revised "stressed"
forecasts taking account of the results to date, current expected demand, and
cost savings identified. This has been conducted together with an assessment
of the liquidity headroom against the cash and bank facilities including the
new Covid loan.
Part of this review resulted in the decision to close the Mayfair Philatelic
stamp business which was loss-making and unable, in the view of the Board, to
be turned around.
The Directors recognise that the current difficult geo-political and resulting
economic environment could impact business but have concluded that there are
no material uncertainties over the Group and Company's ability to continue as
a going concern. The Directors have a reasonable expectation that the Group
has adequate resources to continue in operational existence for the next 12
months, therefore it is appropriate to adopt a going concern basis for the
preparation of the Financial Statements. Accordingly, these financial
statements do not include any adjustments to the carrying amount or
classification of assets and liabilities that would result if the Group and
Company were unable to continue as a going concern.
3 Revenue
31 Mar 31 Mar
2022 2021
Group Group
£000 £000
Sales of Stock 7,839 4,857
Commissions 279 275
Other income 11 16
8,129 5,148
All revenues are derived from a single operating segment, collectibles.
4 Profit Before Taxation
Profit / (Loss) before taxation is after charging/(crediting): 31 Mar 31 Mar
2022 2021
Group Group
£000 £000
Depreciation of property, plant and equipment 231 322
Amortisation of intangible assets 4 4
Foreign currency losses/(gains) 2 14
Employee costs 936 878
Fees payable to the Company's auditors 41 41
5 Employee costs including Directors
31 Mar 31 Mar
2022 2021
Group Group
£000 £000
Wages 819 752
Social security costs 70 75
Pension costs 32 31
Other employee benefits 15 20
936 878
All employee costs are included in administrative expenses.
The Group received £nil (2021: £112k) in grants relating to the Coronavirus
Job Retention Scheme.
Defined contribution pension schemes.
The Group operates defined contribution retirement benefit schemes for
qualifying employees. The total cost charged to income of £32k (2021: £31k)
represents contributions payable to those schemes by the Group at rates
specified in the rules of the plans. As at 31 March 2022, contributions due in
respect of the current reporting period of £3k (2021: £3k) had not been paid
over to the schemes and are included within payables.
6 Directors' remuneration
31 Mar 31 Mar
2022 2021
Group Group
£000 £000
Salaries and fees 192 174
Social security costs 26 10
Pension costs 6 -
Other employee benefits 8 8
One-off payments to ex-Directors 79 -
311 192
Information regarding the highest paid Director, Jasper Allen:
Salary 120 70
Benefits 5 7
Total 125 77
There are two (2021 - one) director accruing a defined contribution pension
liability.
The Directors are considered to be the Company's key management personnel.
7 Income tax
31 Mar 31 Mar
2022 2021
£000 £000
Current tax (credit)/expense
Current tax - -
Deferred tax - -
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
2022 2021
£000 £000
Profit / (Loss) before tax 177 (437)
Applied corporation tax rates: 19% 19%
Tax at the UK corporation tax rate of 19% (2021: 19%): 34 (83)
Tax payable covered by available tax losses (34) -
Tax losses not recognised as deferred tax assets 83
Origination and reversal of temporary differences - -
Taxation charge - -
8 Discontinued Operations
The Board conducted a review of the Mayfair Philatelic business and determined
that the business was not key to the future of the Group and unlikely to
become profitable on an ongoing basis. In accordance with IFRS5 - Non-current
assets held for sale and discontinued business, the results for Mayfair
Philatelic are shown as Discontinued operations in the income statement
of both the current and the prior period; its assets and liabilities have
been recorded at the lower of the carrying value and fair value less costs to
sell in the financial statements for this financial year. An analysis of the
individual line items are shown below.
2022 2021
Group Group
£000 £000
Revenue 680 882
Cost of sales 374 501
Gross Profit 306 381
Distribution expenses 74 68
Administrative expenses 409 316
Impairment charge re Debtors 40 -
Impairment charge re Stock 100 -
Profit / (Loss) before tax (317) (3)
Tax - -
Profit / (Loss) from discontinued operations (317) (3)
Year ended
31 March 2022
£000
Net cash (used in) / Generated from operations (77)
Assets and liabilities of discontinued business
The following assets and liabilities relating to Mayfair Philatelic 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 at 31 March 2022:
31 March 2022
Assets £000
Fixed assets 5
Intangible assets 4
Current assets - Stocks 114
Current assets - Debtors & Prepayments 458
Total assets of Discontinued business 581
31 March 2022
Liabilities £000
Trade creditors 236
Accruals 141
Total liabilities of Discontinued business 377
9 Profit / (Loss) per share
31 Mar 31 Mar
2022 2021
Group Group
£000 £000
Profit / (Loss) used in calculating basic and diluted earnings per share
attributable to the owners of the parent
Continuing operations 494 (434)
Discontinued operations (317) (3)
Total 177 (437)
Number of shares
Weighted average number of shares for the purpose of basic and diluted 13.6m 13.6m
earnings per share
Basic earnings/(loss) per share from continuing operations (pence per share) 3.63 (3.19)
Basic (loss) per share from discontinued operations (pence per share) (2.33) (0.02)
Total basic and diluted earnings/(loss) pence per share 1.30 (3.21)
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.
10 Intangible Assets
31 Mar 31 Mar
2022 2021
Group Group
£000 £000
Cost at the beginning and end of the year 20 20
Amortisation at the beginning of the year 12 8
Amortisation during the year 4 4
Amortisation at the end of the year 16 12
Net book value at the end of the year 4 8
The intangible assets comprise a mailing list.
11 Investment in subsidiaries
31 Mar
2022
Company
£000
At 7 January 2014: nominal value of shares issued 28
Fair-value adjustment taken to merger reserve 2,809
Write-off of merger reserve on 31 March 2020 (2,809)
Deferred consideration 2,363
Balance at 31 March 2022 2,391
Balance at 31 March 2021 2,391
The investments in Group undertakings are originally recorded at cost which is
the fair-value of the consideration paid. At 31 March 2019 the amount was
£5,200,000. The Company's merger reserve was written off as at 31 March 2020
due to the assessment of the subsidiary company's value following the adverse
impact of Covid-19. As such, the investment is now valued at £2,391,000.
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 Philatelics Ltd, all of which are wholly
owned.
12 Deferred Corporation Tax
31 Mar 31 Mar
2022 2021
Group Group
£000 £000
Balance at the beginning of the year - -
Income statement - -
____ ____
Balance at the end of the year - -
The deferred tax asset comprises:
Origination and reversal of temporary differences - -
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
£282,000 (2021: £460,000) of which £nil has been recognised (2021: £nil
recognised).
In adopting IFRIC 23 - Uncertainty over tax treatments during the year ended
31 March 2022, a review has been carried out of the Group's ability to
generate future profits that could utilise the accumulated losses. Whilst
profitable in the year it has been concluded that it is appropriate to
continue to not recognise any deferred tax assets until sustainable profits
are observed
13 Inventories
31 Mar 31 Mar
2022 2021
Group Group
£000 £000
Finished goods 9,584 9,025
Finished goods expensed in the year 5,058 3,456
14 Trade & other receivables
31 Mar 31 Mar 31 Mar 31 Mar
2022 2021 2022 2021
Group Group Company Company
£000 £000 £000 £000
Trade debtors 1,700 1,421 - -
Other debtors 24 36 2 6
Amounts due from Group undertaking - - 7,102 7,437
Prepayments and accrued income 495 232 11 21
2,219 1,689 7,115 7,464
The age profile of trade debtors comprises: £000
Current 547
One month past due 463
Two months past due 50
Over three months past due 798
Provision for doubtful debts (158)
1,700
As at 31 March 2022, trade receivables of £158k (31 March 2021 £nil, 31
March 2020 £nil) 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. Some receivables
will be settled against trade payables in due course.
Amounts due from Group undertakings are unsecured, interest-free, have no
fixed date of repayment and are repayable on demand.
15 Loans and Borrowings
31 Mar 31 Mar
2022 2021
Group and Company Group and Company
£000 £000
Bank loan
At the beginning of the year 250
Drawn during the year - 250
(Repaid) in the year (15) -
At the end of the year 235 250
Bank loan liabilities maturity analysis
Due within one year 47 250
Due after more than one year 188 -
Total loans and borrowings 235 250
16 Share Capital
31 Mar 31 Mar
2022 2021
Group and Company Group and Company
£000 £000
Ordinary shares of £0.01 each
At the beginning of the year 136 136
At the end of the year 136 136
Number of shares 31 Mar 31 Mar
2022 2021
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
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.
17 Right of use Asset lease Liabilities
31 Mar 31 Mar
2022 2021
Group Group
£000 £000
Land and buildings 980 1,119
Lease liability maturity analysis
Due within one year 193 1,119
Due after more than one year 787 -
Total right-of-use lease liabilities 980 1,119
18 Post balance sheet date events
Mayfair Philatelic
The Board determined in the financial year-ended 31 March 2022 that the
continuing losses from the Mayfair business were unsustainable and following
an assessment of the available options the Board made the decision to close
the business. Its last major auction was conducted in March 2022 and since
then the business has been operating in an orderly wind-down mode with the
remaining stock being sold on an as and when basis and debtors collected.
Costs, primarily staff and property, are being released with the majority of
these having ceased within three months of the financial year-end date.
Property Leases
Following the year-end date the leases for the Group's property at 105 and 106
New Bond Street were renegotiated with the result that the previous separate
leases were replaced by a single lease covering both properties with a term
end date of 31 August 2023.
There have been no other material events directly affecting the Group since
the end of the financial year date.
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR SEMFWLEESEEARecent news on Scholium
See all newsREG - Scholium Group PLC - TR-1
AnnouncementREG - Scholium Group PLC - Half-year Report
AnnouncementREG - Scholium Group PLC - Results of Annual General Meeting
AnnouncementREG - Scholium Group PLC - Preliminary Results for the year 31 March 2023
AnnouncementREG - Scholium Group PLC - Grant of Share Options & PDMR dealing
Announcement