REG - Scholium Group PLC - Preliminary Results for the year 31 March 2023
27/07/2023 07:15
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RNS Number : 3127H Scholium Group PLC 27 July 2023
27 July 2023
Scholium Group plc
('Scholium' or the 'Group')
Preliminary Results for the year ended 31 March 2023
Scholium is pleased to announce the Group's audited results for the year ended
31 March 2023.
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
· An encouraging 12% increase in revenue to £9,060k from
£8,129k
· Profit before tax restored last year at £177k
increases to £231k this year
· Group net asset value per share continues to rise from
69p per share to 71p this year
· Group continues to trade profitably in the first three
months of the current year
Financial Highlights
Years ended 31 March (£'000) 2023 2022
Revenue 9,060 8,129
Gross Profit 3,447 3,071
Gross Margin 38.1% 37.8%
Profit before tax 231 177
Total earnings pence per share 1.70p 1.13p
NAV/Share 71p 69p
A copy of the 2022 Annual Report (including the notice of Annual General
Meeting ("AGM") will be sent to shareholders and 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 10.00am at 106 New Bond Street, London W1S
1DN on 26 September 2022.
David Harland, Chairman of Scholium, noted "The Board is delighted with the
continued turnaround and remains focused on further enhancing shareholder
value 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, Darshan Patel, Andrew de Andrade
Chairman's Statement
I am delighted to present my statement and to report that the Group's revenues
for the year ended 31 March 2023 increased by 12% to £9.1 million (2022:
£8.1 million). The Board's focus on driving revenue in both books and art has
been successfully pursued and has resulted in a second successive profitable
year, with a profit before tax of £231k (2022: £177k).
The Board is pleased with the continuing turnaround of the business and
remains focused on further enhancing shareholder value through evolving
revenue channels, keener cost management, incentivising its staff and
continuing to search for further opportunities in related areas.
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 initially improved in the year under review, particularly
for the first eight months. The trading environment then became far more
challenging for the last four. However, trading for the first three months of
the current year has been profitable, which is encouraging. Although the
global outlook continues to be challenging, we remain cautiously optimistic.
Strategy
I and my Board are certain that there is still significant value that is not
fully reflected in these financials which we are focused on quantifying and
exploiting in the coming year with, it is anticipated, enhanced shareholder
value. The first part of our 'job' which has been to secure the business and
stabilize its platform following its exit from the problematic Covid era is
nearing an end and now the second part, the drive towards that enhanced value,
is in progress.
We can never be certain of the continuing effects on our businesses of
Russia's war on Ukraine, or the general political and financial destablisation
of the world. Interest rates continue to rise and the effects on consumers
will be severe. But all of this is not necessarily bad for us, for our
position as a trader in what might be termed alternative investments could be
our salvation.
DAVID HARLAND
Chairman
27 July 2023
Chief Executive Officer's Report
This has been a year of achievement but also one that has presented its
challenges which I expand on below and I am most thankful for the excellent
team with whom I work and who have been so dedicated and proactive over the
year resulting in a second consecutive year of increased annual Group
profit.
Overview
Scholium Group has built upon the success of the financial year 2021/22 with
the highlights being;
- 12% increase in revenue;
- Group profitability increased for a second consecutive year;
- A return to a full calendar of major book and art fairs and
exhibitions; and
- The securing of our Bond Street offices and shop through to August
2024.
The Year 2022/23
Despite the war in Ukraine, the general state of the market for Books and Art
remained encouraging as the year progressed over the first eight months.
However, the market turned noticeably worse over the last four months,
particularly in Art. Overall revenue increased by a robust 12% to £9,060k
(2021: £8,129k) which could have been significantly higher but for the last
four months of the year.
The return to a full calendar year of fairs clearly benefitted sales but not
in all cases, and not without a major increase in distribution costs that were
severely impacted by inflationary pressures in associated costs of carriage,
insurance and others.
Taking all this into account, the Group recorded an increased profit before
tax of £231k (2022: £177k).
Looking forward
It is encouraging to report that the performance of the business in the first
three months of the new financial year has been in line with our expectations
and remains profitable. Global economic headwinds that really came to the fore
in the latter part of the financial year ended March 2023 still present major
challenges but a more forensic focus on costs, particularly around fairs and
marketing, and the promotion of our multi-channel sales routes of retail
premises, an extensive online presence and exhibitions at international trade
fairs will, I believe, maintain the positive momentum going forward, in the
current year.
Staff
I have a fabulous team around me without whom the positive results for the
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 my fellow Board
members and our major shareholders and look forward to taking the Group to
future success.
BERNARD SHAPERO
Group Chief Executive
27 July 2023
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 2023 and it 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 comprises four legal entities; Scholium Group PLC (the "Company")
which is the publicly traded holding company which incurs the central costs of
the group and its three wholly owned subsidiaries, Shapero Rare Books Limited
which is the only trading entity as detailed below and two dormant companies,
Scholium Trading Limited and Mayfair Philatelic Limited. The four together are
referred to as the "Group".
The Group is engaged in the business of dealing in rare books and fine
art. 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 trading under the name of Shapero Rare Books. The business also
trades as Shapero Modern in modern and contemporary prints and limited
editions by established artists.
Strategy & Key Objectives
The Group's strategy is to:
• build, organically or by acquisition, a portfolio of rare
books and art focused businesses to enable further growth 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 books and art
and participate in the acquisition for onward sale of large consignments.
Review of the year from continuing operations
The Group's revenues increased to £9.1m from £8.1m 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 12% compared with the prior year
ended 31 March 2022, and the margin made on sales rose from 37.8% last year to
38.1% in the year ended 31 March 2023 as a result of increased activity in the
market and the active drive by management to improve such margins.
Total expenses rose 22% to £3,175k (2022: £2,602k) driven by direct costs
with the return of art fairs and accompanying marketing costs increasing over
the year. Central costs, including the costs of the Company's membership of
AIM, were reduced on account of the prior year incurring a one-off director
payment.
The Group's profit before tax for the year to 31 March 2023 was £231k (2022:
£177k).
An analysis of the Group's profit before tax for the year to 31 March 2023
between the two halves of the financial year is set out in the table below:
(£'000) H1* H2 Full year total
Revenue 4,454 4,606 9,060
Gross Profit 1,731 1,716 3,447
Profit before tax 179 52 231
*H1 Unaudited figures published November 2022
The value of the Group's stock at 31 March 2023 was £9,812k compared with the
prior year's total of £9,584k and Group cash at 31 March 2023 was in net
overdraft at £(54)k. Furthermore, the original £250k Covid bank loan, that
was taken in 2020, was reduced by repayment over the year from £235k to
£187k. The Group's overdraft facility of £500k remains in place and from
time-to-time, depending on timing differences in significant purchases and
onward sales, was drawn during the year.
Key Performance Indicators
The Group is managed by and reports on a few 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)
Years ended 31 March (£'000) 2023 2022
Variance
Revenue 9,060 8,129 12%
Gross Profit 3,447 3,071 12%
Gross Margin 38.1% 37.8% 1%
Stock Turnover (months) 21.0 22.8 -8%
Net (borrowings) / Net cash (241) 466 n/a
Net Profit before tax 231 177 64%
Group Performance
Shapero Rare Books
Shapero Rare Books Limited (SRB) traded profitably through the year ended 31
March 2023 off the back of increased activity in physical as well as on-line
sales and an increasingly busy and full calendar of trade fairs. The year's
sales were £9,060k, 12% above the prior year's sales of £8,129k, and gross
profit at £3,447k for the year ended 31 March 2023 was, again, 12% above the
prior year of £3,071k.
Direct costs, including the attendance at fairs, exhibitions, and catalogues,
increased from £340k in the prior year to £815k in the year to 31 March
2023. This reflected the increasing return of exhibiting at fairs in the first
full calendar year of events since exiting Covid. Administrative costs
increased 4% from £1,853k in the prior year to £2,026k in the year to 31
March 2023. Financial expenses for the year were £41k (2022: £33k).
SRB therefore recorded a profit before tax of £565k compared with the £904k
in the prior year.
Mayfair Philatelics - closed
The Board took the decision in the prior financial year to close the business.
The results of that business have been presented and treated as discontinued
business within these report and accounts and the impact of this treatment is
fully explained in note 14 to these accounts. The full provision against
future costs of closure taken in the prior year was sufficient to offset any
incurred actual costs and consequently, with the exception of some immaterial
items, there is no discontinued business impact in the results for this
financial year.
Central Costs
Central costs, which are incurred by the holding company, Scholium Group PLC,
include the Board members as well as those costs associated with the Group's
AIM public status. The central costs were £334k in the year to 31 March
2023, a decrease of £75k from the prior year's total of £409k on account of
a one-off payment in the prior year, including associated social security
costs, to a former director of £90k. 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.
Year ended 31 March 2023 (£'000)
Shapero Rare Books Scholium Trading* Central Continuing business
Books Gallery
Revenue 7,283 1,777 - - 9,060
Gross Profit 2,841 606 - - 3,447
Gross Margin 39% 34% - - 38%
Profit/(Loss) before tax 565 - (334) 231
*Following the closure of the legal entity in 2020 the trading name of
Scholium Trading was discontinued with any residual sales and costs being
taken through the results of Shapero Rare Books.
Year ended 31 March 2022 (£'000)
Shapero Rare Books Scholium Trading Central Continuing business
Books Gallery
Revenue 6,088 1,823 218 - 8,129
Gross Profit 2,418 648 63 - 3,071
Gross Margin 39% 35% 29% - 38%
Profit/(Loss) before tax 850 54 (409) 494
Dividend
The Board does not propose to declare a dividend for the financial year ended
31 March 2023. (2022: £Nil)
Alternative accounting presentation
The Board is focused on enhancing shareholder return. It is important
therefore for an analysis of the core performance of the Group's trading
business to be prepared excluding those costs that are more concerned with the
non-trading elements such as the costs of maintaining its 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) 2023 2022 2021
Pre-tax Profit / (Loss) for the year 231 177 (434)
Add back:
Central costs 334 409 314
Discontinued business losses - 317 3
Depreciation & amortisation (Note 6) 347 231 322
Finance expenses (Note 11) 41 33 30
Re-stated EBITDA for the year 953 1,167 235
Principal Risks & Uncertainties
Continuing supply of rare books, works on paper and prints.
By definition, rare books and other works on paper and prints 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 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.
When works become available for sale or purchase, they 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.
Reliance on key international trade fairs
A significant proportion of the Group's sales are made at international trade
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 the Group have been exhibiting at these fairs for many years,
there can be no certainty that it will continue to secure places in the
future.
Competition
The market in the books and works on paper and prints in which the Group
trades is competitive and the Group faces various competitive pressures from
auctioneers as well as a wide range 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 the markets in which it operates, it could
lead to a material adverse effect on the Group's business, financial
condition, and operations.
Co-owned 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 trades in rare 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 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 publicly
accessible galleries in Mayfair, London from where it operates and sells both
books and works of art. 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
In the past, 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.
There is 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 regarding 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, and in particular the
Chief Executive Officer, for their knowledge and the reliance customers place
on their integrity and service. If a key employee was 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 conducts certain transactions other than in Pounds Sterling, its
functional currency. 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
The recent Covid-19 pandemics led to the closure of the Group's retail
premises for several months and the cancellation of all fairs and exhibitions.
The Group has other ways to market, 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 three 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 continue to improve its return on capital employed,
particularly stock turnover. The Board has implemented several initiatives to
target this.
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 2024 the Board will assess opportunities for
future property, enhanced selling channels and improving the sales of
slower-moving and aged stock.
Consolidated Statement of Comprehensive Income
Year ended Year ended
31 Mar 31 Mar
2023 2022
Note £000 £000
Revenue 5 9,060 8,129
Cost of Sales (5,613) (5,058)
Gross profit 3,447 3,071
Distribution expenses (815) (340)
Administrative expenses (2,360) (2,262)
Total expenses (3,175) (2,602)
Profit from operations 272 469
Financial (expense) 11 (41) (33)
Other income 12 - 58
Profit before taxation 231 494
Income tax (expense) 13 - -
Profit for the year from continuing operations and total comprehensive income 231 494
attributable to equity holders of the parent company
Loss from discontinued operations 14 - (317)
Profit for the year and total comprehensive income attributable to equity 231 177
holders of the parent company
Earnings per share (in pence): 15
From continuing operations 1.70 3.63
From discontinued operations - (2.33)
Total Earnings per share 1.70 1.30
Scholium Group Plc Company number 08833975
Consolidated Statement of Financial Position
31 Mar 31 Mar
2023 2022
Note £000 £000
Assets
Non-current assets
Property, plant and equipment 16 877 970
Intangible assets 17 - 4
Deferred corporation tax asset 19 - -
877 974
Current assets
Inventories 20 9,812 9,584
Trade and other receivables 21 2,058 2,219
Cash and cash equivalents 23 110 705
11,980 12,508
Total assets 12,857 13,482
Current liabilities
Bank overdrafts 23 164 -
Trade and other payables 24 1,973 2,868
Loans and borrowings 25 47 47
Right-of-use asset lease liabilities 28 227 193
Total current liabilities 2,411 3,108
Non-current liabilities
Loans and borrowings 25 140 188
Right-of-use asset lease liabilities 28 676 787
Total non-current liabilities 816 975
Total liabilities 3,217 4,083
Net assets/liabilities 9,630 9,399
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 26 136 136
Share Premium 9,516 9,516
Merger reserve 27 82 82
Retained (loss) (104) (335)
Total equity 9,630 9,399
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 (75) 9,659
Balance at 31 March 2020
(Loss) for the year from continued and discontinued operations - - - (437) (437)
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
- - - 231 231
Profit for the year from continued and discontinued operations
Total comprehensive income for the period - - - 231 231
136 9,516 82 (45) 9,630
Balance at 31 March 2023
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
2023 2022
£000 £000
Cash flows from operating activities
profit before tax 231 177
Depreciation of property, plant and equipment 353 231
Amortisation of intangible assets 4 4
Interest paid 41 33
629 445
(Increase)/decrease in inventories (228) (559)
Decrease/(increase) in trade and other receivables 161 (530)
Increase/(decrease) in trade and other payables (895) 1,560
Net cash generated from operating activities (333) 916
Cash flows from investing activities
Purchase of property, plant and equipment (21) (26)
Purchase of right-to -use assets (239) -
Net cash (used) in investing activities (260) (26)
Cash flows from financing activities
Lease repayments for right-of-use assets (77) (165)
Bank loan (48) (15)
Interest paid (41) (7)
Net cash (used) from financing activities (166) (187)
Net increase/(decrease) in cash and cash equivalents (759) 703
Cash and cash equivalents at the beginning of the year 705 2
Cash and cash equivalents at the end of the year (54) 705
Scholium Group Plc Company number 08833975
Company Statement of Financial Position
31 Mar 31 Mar
2023 2022
Note £000 £000
Assets
Non-current assets
Group Investments 18 2,391 2,391
Deferred tax asset - -
2,391 2,391
Current assets
Trade and other receivables 21 7,559 7,115
Cash and cash equivalents 22 (164) (160)
7,395 6,955
Total assets 9,786 9,346
Current liabilities
Trade and other payables 24 143 59
Loans and borrowings 25 47 47
Total current liabilities 190 106
Non-current liabilities
Loans and borrowings 25 140 188
Total liabilities 330 294
Net assets/liabilities 9,456 9,052
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 26 136 136
Share Premium 9,516 9,516
Merger reserve 27 - -
Retained earnings/(deficit) (196) (600)
Total equity 9,456 9,052
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 2020 136 9,516 - 40 9,962
Loss for the year - - - (231) (231)
Total comprehensive income for the period - - - (231) (231)
Write-off of merger reserve - - (2,809) - (2,809)
Write-off of merger reserve
Balance at 31 March 2021 136 9,516 - (191) 9,461
(Loss) for the year - - - (409) (409)
Total comprehensive income for the period - - - (231) (231)
Balance at 31 March 2022 136 9,516 - (600) 9,052
Profit for the year - - - 404 404
Total comprehensive income for the period - - - 404 404
136 9,516 - (196) 9,456
Balance at 31 March 2023
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
2023 2022
£000 £000
Cash flows from operating activities
Profit/(Loss) before tax 404 (409)
Interest paid - 7
404 (402)
Decrease/(increase) in trade and other receivables (444) 349
(Decrease)/increase in trade and other payables 84 (26)
Net cash generated from operating activities 44 (79)
Cash flows from investing activities
Dividends receivable from subsidiary undertakings - -
Net cash generated from investing activities - -
Cash flows from financing activities
Bank loan (48) (22)
Net cash (used)/generated from financing activities (48) (22)
Net (decrease) in cash and cash equivalents (4) (101)
Cash and cash equivalents at the beginning of the year (160) (59)
(Overdraft)/cash and cash equivalents at the end of the year (164) (160)
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
limited by shares 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 2023 and 31 March 2022 are set out below. These policies have been
consistently applied to all periods presented.
Going concern
The Directors have reviewed the activities of the Group since 1 April 2022
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, has a relatively short term date of August 2023
which is currently subject to a negotiated 12 month short-term lease
extension. 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 in 2020 made use of a government £250,000 Covid loan, which at the
year-end date, following repayments made during the year, has £187,500k
outstanding. This is repayable over five years and therefore is not exposed to
any liabilities where the terms of repayment may change. The Group has no
creditors over one year, and no liabilities to a defined benefit pension
scheme.
The Group has enjoyed a second consecutive 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.
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
2023 2022
Group Group
£000 £000
Sales of Stock - Books 7,042 6,016
Sales of Stock - Gallery 1,777 1,823
Commissions 177 279
Other income 64 11
9,060 8,129
4 Profit Before Taxation
Profit before taxation is after charging/(crediting): 31 Mar 31 Mar
2023 2022
Group Group
£000 £000
Depreciation of property, plant and equipment (note 16) 347 231
Amortisation of intangible assets 4 4
Foreign currency losses - 2
Employee costs (note 7) 736 936
Fees payable to the Company's auditors (note 9) 38 38
5 Employee costs including Directors
31 Mar 31 Mar
2023 2022
Group Group
£000 £000
Wages 663 819
Social security costs 50 70
Pension costs 15 32
Other employee benefits 8 15
736 936
All employee costs are included in administrative expenses.
Defined contribution pension schemes.
The Group operates a defined contribution retirement benefit scheme for
qualifying employees. The total cost charged of £38k (2022: £32k) represents
contributions payable to the scheme by the Group at rates specified in the
plan rules. As at 31 March 2023, contributions due in respect of the current
reporting period of £3k (2022: £3k) not paid over to the schemes are
included within payables.
6 Directors' remuneration
31 Mar 31 Mar
2023 2022
Group
Group
£000 £000
Salaries and fees 375 192
Social security costs 43 26
Pension costs 23 6
Other employee benefits 15 8
One-off payments to an ex-Director - 79
Total 456 311
Information regarding the highest paid Director, Bernard Shapero (2022: Jasper Allen):
Salary 204 120
Benefits 28 5
Total 232 125
There are two (2022 - two) directors 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
2023 2022
£000 £000
Current tax (credit)/expense
Current tax - -
Deferred tax - -
Total tax expense - -
The charge for the year can be reconciled to the profit per the income
statement as follows:
31 Mar 31 Mar
2023 2022
£000 £000
Profit before tax 291 177
Applied corporation tax rates: 19% 19%
Tax at the UK corporation tax rate of 19% (2022: 19%): 44 34
Tax payable covered by available tax losses (44) (34)
Tax losses not recognised as deferred tax assets
Origination and reversal of temporary differences - -
Taxation charge - -
8 Discontinued Operations
In the year ended 31 March 2022 the Board determined 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 business, the
results for Mayfair Philatelic were shown as Discontinued operations in the
income statement of the 2022 year-end and the prior period; its assets
and liabilities were recorded at the lower of the carrying value and fair
value less costs to sell in the financial statements for that financial year.
The provisions taken in the accounts for the year-ended 31 March 2022 were
sufficient to absorb losses incurred in closing the business in financial year
ended 2022. An analysis of the individual line items are shown below,
Financial performance and cash flow information
31 Mar 31 Mar
2023 2022
Group Group
£000 £000
Revenue - 680
Cost of sales - 374
Gross profit - 306
Distribution expenses - (74)
Administration expenses - (409)
Impairment charge - debtors - (40)
Impairment charge - stock - (100)
Profit / (loss) before tax - (317)
Tax - -
Loss from discontinued operations - (317)
Net cash generated / (used) by the discontinued business was £nil (2022:
(£77))
Assets and liabilities of discontinued business
No assets or liabilities relating to Mayfair Philatelic are included within
the relevant line of the Group Consolidated statement of financial position as
at 31 March 2023.
9 earnings per share
31 Mar 31 Mar
2023 2022
Group Group
£000 £000
Profit used in calculating basic and diluted earnings per share attributable
to the owners of the parent
Continuing operations 231 494
Discontinued operations - (317)
Total 231 177
Number of shares
Weighted average number of shares for the purpose of basic and diluted 13.6m 13.6m
earnings per share
Basic earnings per share from continuing operations (pence per share) 1.70 3.63
Basic (loss) per share from discontinued operations (pence per share) - (2.33)
Total basic and diluted earnings pence per share 1.70 1.30
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 Investment in subsidiaries
31 Mar
2023
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 2023 2,391
Balance at 31 March 2022 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 are incorporated in
the UK and wholly owned have been included in the consolidated financial
information, are: Shapero Rare Books Ltd (a dealer in rare books and art),
Scholium Trading Ltd and Mayfair Philatelics Ltd. Scholium Trading Ltd and
Mayfair Philatelics Ltd. are dormant companies, their activities having been
transferred in to Shapero Rare Books Limited in 2020.
11 Deferred Corporation Tax
31 Mar 31 Mar
2023 2022
Group Group
£000 £000
Balance at the beginning of the year - -
Income statement - -
Balance at the end of the year - -
Deferred tax has historically been calculated in full on temporary differences
under the liability method using the tax rates expected for future periods of
19%. The deferred tax had arisen in past periods due to the availability of
trading losses. The Group, on account of recent profits, has £238,000
unutilised tax allowances available at expected tax rates for use in future
periods at the year-end date (2022: £282,000).
12 Inventories
31 Mar 31 Mar
2023 2022
Group Group
£000 £000
Finished goods 9,812 9,584
Finished goods expensed in the year 5,613 5,058
Note that the cost of sales incurred in the year ended 31 March 2023 was
£5.6million (2021: £5.1million) and there were no impairment charges taken
in either year.
13 Trade & other receivables
31 Mar 31 Mar 31 Mar 31 Mar
2023 2022 2023 2022
Group Group Company Company
£000 £000 £000 £000
Trade debtors 1,713 1,700 - -
Other debtors 25 24 - 2
Amounts due from Group undertaking - - 7,460 7,102
Prepayments and accrued income 320 495 99 11
2,058 2,219 7,559 7,115
The age profile of trade debtors comprises: £000
Current 700
One month past due 152
Two months past due 355
Over three months past due 506
Provision for doubtful debts -
1,713
At 31 March 2023, trade receivables of £nil (31 March 2022 £158k, 31 March
2021 £nil) were considered past due and impaired. The other debtor 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.
14 Loans and Borrowings
31 Mar 31 Mar
2023 2022
Group and Company Group and Company
£000 £000
Bank loan
At the beginning of the year 235 250
(Repaid) in the year (48) (15)
At the end of the year 187 235
Bank loan liabilities maturity analysis
Due within one year 47 47
Due after more than one year 140 188
Total loans and borrowings 187 235
15 Share Capital
31 Mar 31 Mar
2023 2022
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
2023 2022
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.
16 Right of use Asset lease Liabilities
31 Mar 31 Mar
2023 2022
Group Group
£000 £000
Land and buildings and motor vehicle 903 980
Lease liability maturity analysis
Due within one year 227 193
Due after more than one year 676 787
Total right-of-use lease liabilities 903 980
See also note 16 for the corresponding asset. All right-of-use liabilities
were classified as current in the previous period. The charge for the year for
depreciation of right of use assets was £317k (2021: £198k).
17 Post balance sheet date events
Property Leases
Following the year-end, the lease for the Group's property at 105 and 106 New
Bond Street, which were due to come to an end in August 2023, were
renegotiated with a revised term date of 31 August 2024.
Employee Option Scheme
In June 2023 the Company 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 penny in the Company ("Option Shares") to
certain employees of which 700,000 were granted to Directors as detailed
within the Remuneration report. 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.
There have been no other material events directly affecting the Group since
the end of the financial year date.
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