REG - Scholium Group PLC - Preliminary Results for the year ended 31 March 24
25/07/2024 07:00
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RNS Number : 7329X Scholium Group PLC 25 July 2024
25 July 2024
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
Scholium Group plc
('Scholium' or the 'Group')
Preliminary Results for the year ended 31 March 2024
Scholium is pleased to announce the Group's audited results for the year ended
31 March 2024.
Scholium is engaged in the business of trading in rare books and modern
prints. 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 2% increase in revenue to £9,266k from
£9,060k
• Profit before tax increased by 30% to £300k from £231k
• Group net asset value per share continues to rise from 71p per
share to 73p this year
• Group continued to trade profitably in the first three months
of the current year
Financial Highlights
Years ended 31 March (£'000) 2024 2023
Revenue 9,266 9,060
Gross Profit 3,648 3,447
Gross Margin 39.4% 38.1%
Profit before tax 300 231
Total earnings pence per share 2.21p 1.70p
NAV/Share 73p 71p
A copy of the 2024 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 94 New Bond Street, London W1S
1SJ on Thursday, 26 September 2024.
David Harland, Chairman of Scholium, noted "the active strategic decisions
taken by the Board and Management accompanied by the ongoing assessment of
further strategic opportunities will, I am confident, lead to further progress
in the coming year."
For further information, please contact:
Scholium Group +44 (0)20 7493 0876
plc
David Harland, Chairman
Bernard Shapero, Chief Executive
Philip Tansey, Finance Director
Zeus Capital Limited - Nominated Adviser and
Broker
+44 (0)20 3829 5000
Chris Fielding, Isaac Hooper
Chairman's Statement
I am delighted to present my statement and to report that the Group's revenues
for the year ended 31 March 2024 increased by 2% to £9.3 million (2023: £9.1
million). The Board's focus on driving revenue in both books and art has been
successfully pursued and has resulted in a third successive profitable year,
with profits before tax increasing by 30% to £300k (2023: £231k).
The Board is pleased with the continuing turnaround of the business achieved
over the last three financial years and remains focused on further enhancing
shareholder value through the implementation of strategic changes including
developing new revenue channels, broadening our areas of expertise with
selective hires, incentivising 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, after a slow start, improved in the year under review,
particularly for the final four months and this has continued into the first
three months of the current year, which have been profitable, and which is
encouraging for the financial year ahead. The utilization of external funding
for securing art collections is reflected in the increases in stock as well as
borrowings which is anticipated to generate further revenues and profits in
the new financial year.
Although the global outlook continues to be challenging, our strategic plans,
including our new flagship property in Mayfair, the expansion of staff and the
proactive seeking of major collections of books and art, leads us to be
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 profitable platform is nearing an end and now the second part,
the drive towards that enhanced value, is in progress as is witnessed by the
seeking out of collections of books and art made in the year under review and
the active plan to widen sales of rare books and art through the selective
hire of sector leading experts.
We can never be certain of the continuing effects on our businesses of global
events, or the general political and financial destablisation of the world.
However, the active strategic decisions taken by the Board and Management,
accompanied by the ongoing assessment of further strategic opportunities,
will, I am confident, lead to further progress in the coming year.
DAVID HARLAND
Chairman
25 July 2024
Chief Executive Officer's Report
This has been another year of achievement but not without 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 third consecutive year of increasing annual Group profits.
Overview
Scholium Group has built upon the success of the prior financial year 2022/23
with the highlights being;
• 2% increase in revenue
• Group profitability increased year-on-year by 30% for a third
consecutive profitable year
• The consolidating of separate locations into our new flagship
Bond Street premises.
The Year 2023/24
Despite wars and other alarming events in the year, the market for Books and
Art remained encouraging and progressed, particularly in the second half of
the year, away from the sluggish activity witnessed in the last three months
of the prior financial year and the first months of the year under review. The
market turned noticeably better over the last four months, particularly in
Art.
We proactively acquired collections of art in the financial year, leveraging
external funding which is reflected in the additional stock and borrowing
levels. Part of that collection was sold within the year under review, but the
major impact will be felt in the year ahead, particularly in the first half.
Overall revenue increased by 2% to £9,266k (2023: £9,060k).
A full calendar year of fairs took place but on a far more selective basis
than in the past, as it was determined that we could focus our resources more
effectively, which has been borne out by the results.
Taking all this into account, the Group recorded a 30% increase in profit
before tax to £300k (2023: £231k).
Looking forward
Encouragingly, the performance of the business in the first quarter of the new
financial year continued to be profitable. The active decision to seek out and
execute wider opportunities will continue this year with some additional
selective hires of new sector experts. Global economic headwinds present
challenges but the strategic review undertaken by the Board acted upon as
noted sees a greater focus on expanding the business in new specialty areas
with recently hired experts, more proactive securing of book and art
collections and a more forensic focus on costs.
Our new and exciting premises, in a refurbished flagship location which we
moved into in July, an extensive online presence and exhibitions at
international trade fairs, all supplemented by hires of some very focused
sector specific staff will, I believe, lead to continuing progress 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 and I look forward to welcoming our new hires in
the coming financial 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
25 July 2024
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 2024 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 and which incurs the central
costs of the group and its three wholly owned subsidiaries, Shapero Rare Books
Limited, 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 generates value through its expertise, astute buying
and the profitable sale of stock.
Shapero Rare Books is the larger part of the 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 £9.3m from £9.1m in the prior year as
sales in each of the constituent businesses increased. The Group's core
businesses were profit-making during both the first and second half of the
financial year. Gross profit increased by 30% compared with the prior year
ended 31 March 2023, and the margin made on sales rose from 38.1% last year to
39.4% in the year ended 31 March 2024 because of increased activity in the
market and the active drive by management to improve such margins.
Total expenses including direct costs, such as art fairs and accompanying
marketing costs, and administrative overheads rose 2% to £3,252k (2023:
£3,175k).
The Group's profit before tax for the year to 31 March 2024 increased by 30%
to £300k (2023: £231k).
An analysis of the Group's profit before tax for the year to 31 March 2024
between the two halves of the financial year is set out in the table below:
Full year
(£'000) H1* H2 total
Revenue 3,835 5,431 9,266
Gross Profit 1,511 2,137 3,648
Profit before tax 43 257 300
*H1 Unaudited figures published November 2023
The value of the Group's stock at 31 March 2024 was £10,955k compared with
the prior year's total of £9,812k and Group cash at 31 March 2024 was in net
overdraft at £(124)k. Furthermore, the original £250k Covid bank loan, taken
down in 2020, was reduced by repayment over the year from £187k to £137k.
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. An additional and specific loan
facility was taken in the final quarter of the year secured against a specific
collection of art works purchased as part of a joint venture agreement with a
fellow art dealer. The balance outstanding as at the year-end date was £634k.
(2023: £nil) - see note 22.
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;
• stock ageing and turnover; and
• cash position.
Key Performance Indicators (on continuing business)
Years ended 31 March (£'000) 2024 2023 Variance
Revenue 9,266 9,060 2%
Gross Profit 3,648 3,447 6%
Gross Margin 39.4% 38.1% 3%
Stock Turnover (months) 23.0 21.0 10%
Net (borrowings) / Net cash (896) (241) 9%
Net Profit before tax 300 231 30%
Group Performance
Shapero Rare Books
Shapero Rare Books Limited (SRB) traded profitably through the year ended 31
March 2024 off the back of increased activity in physical as well as on-line
sales and a full calendar of trade fairs. The year's sales were £9,266k, 2%
above the prior year's sales of £9,060k, and gross profit at £3,648k for the
year ended 31 March 2024 was 6% above the prior year total of £3,447k.
Direct costs, including the attendance at fairs, exhibitions, and catalogues,
decreased from £815k in the prior year to £778k in the year to 31 March 2024
as a result of the active approach to maximising the benefit from fewer but
more productive fairs taken by management. Administrative costs in total
increased 4% from £2,360k in the prior year to £2,474k in the year to 31
March 2024. Financial expenses for the year were £63k (2023: £41k).
SRB therefore recorded a profit before tax of £714k compared with the £565k
in the prior 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, before the non-operational accounting
charge for the employee option scheme of £32k, were £382k in the year to 31
March 2024, an increase of £48k from the prior year's total of £334k. The
inclusion of the costs of the option scheme take the total to £414k. These
costs include the cost of managing the Group, its audit, tax and professional
fees, financing costs and maintaining the AIM membership for the Company's
shares.
Year ended 31 March 2024 (£'000)
Shapero Rare Books Continuing business
Books Gallery Central
Revenue 6,992* 2,274 - 9,266
Gross Profit 3,057 591 - 3,648
Gross Margin 44% 26% - 39%
Profit/(Loss) before tax 714 (414) 300
Year ended 31 March 2023 (£'000)
Shapero Rare Books Continuing business
Books Gallery Central
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
*The revenue for Books includes the small amounts of other income. See Note 5
- Revenue
Dividend
The Board does not propose to declare a dividend for the financial year ended
31 March 2024. (2023:
£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) 2024 2023
Pre-tax Profit for the year 300 231
Add back:
Central costs 414 334
Discontinued business losses - -
Depreciation & amortisation (Note 6) 374 347
Finance expenses (Note 11) 63 41
Re-stated Operational EBITDA for the year 1,151 953
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. The cessation of these fairs 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 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.
Future prospects
The Group has continued to trade profitably in the first three months of the
current year. The core businesses are Shapero Rare Books, one of the leading
UK rare book dealers, and Shapero Modern, one of the leading UK dealers in
modern art and prints, both with a solid international customer base. Further
attention will be required to continue to improve return on capital employed,
particularly to margins achieved and to stock turnover. The Board has
implemented several initiatives to target this.
The Board continues to review further strategic opportunities within a tightly
managed cost framework to improve the Group's profitability and create
improved shareholder value. During the year ending 31 March 2025 the Board
will implement initiatives regarding property, further 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
2024 2023
Note £000 £000
Revenue 5 9,266 9,060
Cost of Sales (5,618) (5,613)
Gross profit 3,648 3,447
Distribution expenses (778) (815)
Administrative expenses (2,476) (2,360)
Total expenses (3,252) (3,175)
Profit from operations 394 272
Charge for share options granted to employees (31) -
Financial (expense) 11 (63) (41)
Profit before taxation 300 231
Income tax (expense) 12 - -
Profit for the year from continuing operations and total comprehensive income 300 231
attributable to equity holders of the parent company
Profit for the year and total comprehensive income attributable to equity 300 231
holders of the parent company
Earnings per share (in pence): 13
From continuing operations 2.21 1.70
Total Earnings per share 2.21 1.70
Scholium Group Plc Company number 08833975
Consolidated Statement of Financial Position
31 Mar 31 Mar
2024 2023
Note £000 £000
Assets
Non-current assets
Property, plant and equipment 14 717 877
Deferred corporation tax asset 16 - -
717 877
Current assets
Inventories 17 10,569 9,812
Trade and other receivables 18 2,760 2,058
Cash and cash equivalents 20 245 216
13,574 12,086
Total assets 14,291 12,963
Current liabilities
Bank overdrafts 20 262 259
Trade and other payables 21 2,536 1,983
Loans and borrowings 22 523 47
Right-of-use asset lease liabilities 25 188 227
Total current liabilities 3,509 2,516
Non-current liabilities
Loans and borrowings 22 249 140
Right-of-use asset lease liabilities 25 572 676
Total non-current liabilities 821 816
Total liabilities 4,330 3,333
Net assets/liabilities 9,961 9,630
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 23 136 136
Share Premium 9,516 9,516
Merger reserve 2 82 82
Retained Profit / (loss) 227 (104)
Total equity 9,961 9,630
Consolidated Statement of Changes in Equity
Share Capital Share Premium Merger reserve Retained earnings Total equity
£000 £000 £000 £000 £000
Balance at 31 March 2021 136 9,516 82 (512) 9,222
Profit for the year from continued and discontinued operations
- - - 177 177
Total comprehensive income for the period - - - 177 177
Balance at 31 March 2022 136 9,516 82 (335) 9,399
Profit for the year from continued and discontinued operations
- - - 231 231
Total comprehensive income for the period - - - 231 231
Balance at 31 March 2023 136 9,516 82 (104) 9,630
Profit and total comprehensive income for the year
- - - 301 301
Employee share option scheme 31 31
Balance at 31 March 2024 136 9,516 82 227 9,961
There were no transactions with owners in the year.
The following describes the nature and purpose of each reserve within owners'
equity:
Share capital Amount subscribed for shares at nominal value.
Share premium Amount subscribed for share capital in excess of nominal value less
attributable share issue expenses.
Merger reserve Amounts attributable to equity in respect of merged subsidiary undertakings.
Retained earnings Cumulative profit/(loss) of the Group attributable to equity shareholders.
Consolidated Statement of Cash Flows
31 Mar 31 Mar
2024 2023
£000 £000
Cash flows from operating activities
Profit before tax 301 231
Employee share option scheme charge 31 -
Depreciation of property, plant and equipment 374 353
Amortisation of intangible assets - 4
Interest paid 63 41
769 629
(Increase)/decrease in inventories (757) (228)
Decrease/(increase) in trade and other receivables (702) 161
Increase/(decrease) in trade and other payables 553 (885)
Net cash generated from operating activities (906) (952)
Cash flows from investing activities
Purchase of property, plant and equipment (21) (21)
Purchase of right-to -use assets (194) (239)
Net cash (used) in investing activities (215) (260)
Cash flows from financing activities
Lease repayments for right-of-use assets (143) (77)
Non-bank loan financing 634 -
Bank loan (49) (48)
Interest paid (63) (41)
Net cash generated / (used) from financing activities 379 (166)
Net increase / (decrease) in cash and cash equivalents 27 (749)
Cash and cash equivalents at the beginning of the year (44) 705
Cash and cash equivalents at the end of the year (17) (44)
Components of cash and cash equivalents
Cash at bank and in hand 245 216
Bank overdrafts (262) (260)
Total cash and cash equivalents (17) (44)
Scholium Group Plc Company number 08833975
Company Statement of Financial Position
31 Mar 31 Mar
2024 2023
Note £000 £000
Assets
Non-current assets
Group Investments 15 2,391 2,391
Deferred tax asset - -
2,391 2,391
Current assets
Trade and other receivables 18 7,623 7,559
Cash and cash equivalents 20 - -
7,623 7,559
Total assets 10,014 9,950
Current liabilities
Overdrafts 20 190 164
Trade and other payables 21 184 143
Loans and borrowings 22 47 47
Total current liabilities 421 354
Non-current liabilities
Loans and borrowings 22 91 140
Total liabilities 512 494
Net assets/liabilities 9,502 9,456
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 23 136 136
Share Premium 9,516 9,516
Merger reserve 24 - -
Retained earnings/(deficit) (150) (196)
Total equity 9,502 9,456
Statement of Changes in Company Equity
Share Capital Share Premium Retained earnings Total equity
£000 £000 £000 £000
Balance at 1 Apr 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
Balance at 31 March 2023 136 9,516 (196) 9,456
Profit for the year - - 46 46
Total comprehensive income for the period - - 46 46
Balance at 31 March 2024 136 9,516 (150) 9,502
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
2024 2023
£000 £000
Cash flows from operating activities
Profit/(Loss) before tax 46 404
Decrease/(increase) in trade and other receivables (64) (444)
(Decrease)/increase in trade and other payables 41 84
Net cash generated from operating activities 23 44
Cash flows from investing activities
Dividends receivable from subsidiary undertakings - -
Net cash generated from investing activities - -
Cash flows from financing activities
Bank loan (49) (48)
Net cash (used)/generated from financing activities (49) (48)
Net (decrease) in cash and cash equivalents (26) (4)
Cash and cash equivalents at the beginning of the year (164) (160)
(Overdraft)/cash and cash equivalents at the end of the year (190) (164)
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 94 New Bond Street,
London W1S 1SJ.
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 are 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 2024 and
31 March 2023 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 2023
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 94 New Bond Street lease, has a relatively short term date of April 2029
and which is subject to a break-clause that can be exercised in three years in
July 2027. The Group therefore does not have any exposure to any onerous
leases. The Group has an international customer base and is not dependent
solely 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 £137,500 (2023:
£187,500) 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 third consecutive successful year and continues to
expand sales channels and sector types. 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
2024 2023
Group Group
£000 £000
Sales of Stock - Books 6,887 7,042
Sales of Stock - Gallery 2,274 1,777
Commissions 20 177
Other income 85 64
9,266 9,060
4 Profit Before Taxation
Profit before taxation is after charging/(crediting): 31 Mar 31 Mar
2024 2023
Group Group
£000 £000
Depreciation of property, plant and equipment (note 14) 372 347
Amortisation of intangible assets - 4
Foreign currency losses - -
Employee costs (note 7) 840 736
Fees payable to the Company's auditors (note 9) 46 38
5 Employee costs including Directors
31 Mar 31 Mar
2024 2023
Group Group
£000 £000
Wages 756 663
Social security costs 60 50
Pension costs 19 15
Other employee benefits 5 8
840 736
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 £44k (2023: £38k) represents
contributions payable to the scheme by the Group at rates specified in the
plan rules. As at 31 March 2024, contributions due in respect of the current
reporting period of £10k (2023: £3k) not paid over to the schemes are
included within payables..
6 Directors' remuneration
31 Mar 31 Mar
2024 2023
Group Group
£000 £000
Salaries and fees 424 375
Social security costs 50 43
Pension costs 24 23
Other employee benefits 26 15
Total 524 456
Information regarding the highest paid Director, Bernard Shapero (2023:
Bernard Shapero):
Salary 234 204
Benefits 10 28
Total 244 232
There are two (2023 - 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
2024 2023
£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
2024 2023
£000 £000
Profit before tax 300 177
Applied corporation tax rates: 25% 19%
Tax at the UK corporation tax rate of 25% (2023: 19%): 75 44
Tax payable covered by available tax losses (75) (44)
Tax losses not recognised as deferred tax assets
Origination and reversal of temporary differences - -
Taxation charge - -
9 earnings per share
31 Mar 31 Mar
2024 2023
Group Group
£000 £000
Profit used in calculating basic and diluted earnings per share attributable
to the owners of the parent
Continuing operations 300 231
Total 300 231
Number of shares
Weighted average number of shares for the purpose of basic and diluted
earnings per share
13.6m 13.6m
Basic earnings per share from continuing operations (pence per share)
2.21 1.70
Total basic and diluted earnings pence per share 2.21 1.70
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
2024
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 2024 2,391
Balance at 31 March 2023 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
2024 2023
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
25%. The deferred tax had arisen in past periods due to the availability of
trading losses. The Group, on account of recent profits, has £163,000
unutilised tax allowances available at expected tax rates for use in future
periods at the year-end date (2023: £238,000).
12 Inventories
31 Mar 31 Mar
2024 2023
Group Group
£000 £000
Finished goods 10,569 9,812
Finished goods expensed in the year 5,618 5,613
Note that the cost of sales incurred in the year ended 31 March 2024 was £5.6million (2021: £5.6million) and there were no impairment charges taken in either year. The value of finished goods at 31 March 2024 include approximately £634k attributable to art collections acquired as part of an equal risk-sharing joint venture agreement with a fellow dealer financed by non-bank loans detailed in Note 22.
13 Trade & other receivables
31 Mar 31 Mar 31 Mar 31 Mar
2024 2023 2024 2023
Group Group Company Company
£000 £000 £000 £000
Trade debtors 2,389 1,713 - -
Other debtors - 25 - -
Amounts due from Group undertaking - - 7,611 7,460
Prepayments and accrued income 371 320 12 99
2,760 2,058 7,623 7,559
The age profile of trade debtors comprises: £000
Current 988
One month past due 476
Two months past due 176
Over three months past due 749
Provision for doubtful debts -
2,389
At 31 March 2024, trade receivables of £nil (31 March 2023 £nil, 31 March
2022 £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 31 Mar 31 Mar
2024 2023 2024 2023
Group Group Company Company
£000 £000 £000 £000
At the beginning of the year 187 235 187 235
Non-bank loan taken out in year 634 - - -
Bank loans (repaid) in the year (49) (48) (49) (48)
At the end of the year 772 187 138 187
loan liabilities maturity analysis
Due within one year 523 47 47 47
Due after more than one year 249 140 91 140
Total loans and borrowings 772 187 138 187
On 7 February 2024 a US$800k (in sterling, £681k) loan was drawn down from a
non-bank lender that was secured on certain specific art assets acquired as
part of a joint venture with a partnering art firm. The loan is repayable by 6
August 2025. As at 30(th) June 2024 the amount outstanding was $565k
15 Share Capital
31 Mar 31 Mar
2024 2023
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
2024 2023
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
2024 2023
Group Group
£000 £000
Land and buildings and motor vehicle 760 903
Lease liability maturity analysis
Due within one year 188 227
Due after more than one year 572 676
Total right-of-use lease liabilities 760 903
See also note 14 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 (2023: £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 2024, was determined
by the landlord in line with an early break clause and terminated on 30 June
2024.
A new five year lease, for an improved retail and office location, again in
New Bond Street, commenced on 26 April 2024 with a term date of 26 April 2029
and a mutual break clause that could be determined in July 2027.
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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