REG - Tribal Group PLC - Half-year Report <Origin Href="QuoteRef">TRBG.L</Origin> - Part 2
15/09/2016 07:06
- Part 2: For the preceding part double click ID:nRSO8818Ja
of Synergy (872) - -
Payment of deferred consideration for acquisitions net of cash acquired (2,907) (3,773) (4,510)
Net cash inflow/(outflow) from investing activities 14,379 (7,436) (11,278)
Financing activities
Interest paid (399) (364) (811)
Purchase of own shares (91) - -
Gross proceeds on issue of shares 22,117 - -
Costs associated with issue of shares (2,123) - -
Equity dividend paid - - (1,794)
Fees for waiver of loan covenant - - (200)
(Repayment)/draw down of borrowings and loan arrangement fees (33,000) 6,451 12,912
Net cash (outflow)/inflow from financing activities (13,496) 6,087 10,107
Net increase/(decrease) in cash and cash equivalents 5,516 (4,510) (7,387)
Cash and cash equivalents at beginning of period 1,736 9,345 9,345
Effect of foreign exchange rate changes (66) (336) (222)
Cash and cash equivalents at end of period 19 7,186 4,499 1,736
Condensed consolidated statement of changes in equity
For the six months to 30 June 2016
Sharecapital£'000 SharePremium£'000 Otherreserves£'000 Retained earnings £'000 TotalEquity £'000
Balance at 1 January 2015 (audited) 4,743 21 25,757 24,126 54,647
Total comprehensive expenses for the period - - - (7,438) (7,438)
Acquisition of own shares - - 1,970 - 1,970
Dividends - - - (1,138) (1,138)
Charge to equity for share-based payments - - (904) (1,366) (2,270)
Tax on charge to equity for share-based payments* - - - (218) (218)
Balance at 30 June 2015 (unaudited) 4,743 21 26,823 13,966 45,553
Total comprehensive expenses for the period - - - (38,933) (38,933)
Dividends - - - (656) (656)
Use of own shares to settle share-based payment vesting scheme - - - 2 2
Tax on charge to equity for share-based payments - - - 194 194
Transfer from Merger Reserve - - (6,320) 6,320 -
Balance at 31 December 2015 (audited) 4,743 21 20,503 (19,107) 6,160
Total comprehensive expense for the period - - - (1,483) (1,483)
Acquisition of own shares - - (91) - (91)
Issue of share capital 5,026 17,091 - - 22,117
Costs associated with issue of share capital - (2,123) - - (2,123)
Charge to equity for share-based payments - - 171 - 171
Tax on charge to equity for share-based payments - - - 21 21
Transfer from Merger Reserve - - (409) 409 -
Balance at 30 June 2016 (unaudited) 9,769 14,989 20,174 (20,160) 24,772
*The June 2015 prior period comparative has been restated to reclassify a
deferred tax charge of £218,000 on share option charges taken to equity
Notes to the condensed consolidated financial information
for the six months to 30 June 2016
1. General information
The condensed consolidated financial information for the six months ended 30
June 2016 was approved by the Board of Directors on 15th September 2016. This
condensed consolidated interim financial information does not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006.
Statutory accounts for the year ended 31 December 2015 were approved by the
board of directors on 16 March 2016. A copy of the statutory accounts for
that year has been delivered to the Registrar of Companies. The auditor
reported on those accounts: its report was unqualified, and did not contain a
statement under section 498(2) or (3) of the Companies Act 2006. However, the
auditor's report on those accounts did include an Emphasis of Matter paragraph
concluding that whilst the directors' use of the going concern basis of
accounting in the preparation of the financial statements was appropriate,
conditions existed at the date of approval of those accounts which indicated
the existence of a material uncertainty which may have given rise to a
significant doubt over the Group's ability to continue as a going concern. The
matters arising influencing the Group's going concern assumption and events
taking place during the six months ended 30 June 2016 are set out in note 3
below.
2. Accounting policies
The condensed consolidated set of financial statements included in this
half-yearly financial report has been prepared in accordance with the
Disclosure and Transparency Rules of the Financial Services Authority and
International Accounting Standard 34 'Interim Financial Reporting', as adopted
by the European Union as if the company were listed on a market regulated
under EU law.
The condensed consolidated financial information should be read in conjunction
with the annual financial statements for the year ended 31 December 2015 which
have been prepared in accordance with IFRSs as adopted by the European Union.
In preparing these condensed interim financial statements, the significant
judgements made by management in applying the Group's accounting policies and
the key sources of estimation uncertainty were as stated within the
consolidated financial statements for the year ended 31 December 2015.
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 31 December 2015.
3. Going concern
The annual report of Tribal Group plc contained substantial disclosure on the
Directors' consideration of adopting the going concern basis in preparing the
financial statements as the successful completion of the sale of the Synergy
business and the Rights Issue and placing were critical assumptions in their
assessment.
Subsequent to the publication of the annual report and as disclosed in this
report, the Group completed the sale of its Synergy business generating net
proceeds of £18.5m. In addition, the Group has raised net proceeds of £20.0m
from the Rights Issue and placing. This has created a more appropriate
capital structure which has eliminated its indebtedness.
On 30 June 2016, the Group agreed amendments to the terms of its banking
facilities which remain committed until June 2018. The size of the overall
credit facility has been reduced from £50million to £25million, a level more
appropriate for the Group balance sheet, following the completion of the
rights issue and the sale of Synergy which resulted in a significant reduction
in the outstanding indebtedness, and consequently a reduction in the level of
debt finance required to support the business going forwards. The most
significant change to the agreement is that the maximum permissible leverage
ratio (measured as the ratio of net debt to EBITDA) must not exceed 2x
(previously 3x). The definition of EBITDA has also been defined to exclude
certain non-cash and one-off trading impacts that have unfavourable impacts on
the calculation. For the foreseeable future, the Group is forecast to operate
within the bank covenant requirements set out in the facility agreements,
amended with effect from 30 June 2016, after taking in to account reasonably
possible downside changes in trading performance.
The directors are satisfied that the Group has sufficient resources to
continue in operation for the foreseeable future, a period of not less than 12
months from the date of this report. Accordingly, they continue to adopt the
going concern basis in preparing the condensed financial statements.
4. Segmental analysis
In accordance with IFRS 8 'Operating Segments' information on segment assets
is not shown as this is not provided to the Chief Operating decision-maker.
Inter-segment sales are charged at prevailing market prices.
Geographical information: revenue from external customers Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Yearended31 December2015£'000
UK 25,770 40,184 72,350
Asia Pacific 14,460 12,350 23,699
North America and rest of world 4,986 5,514 10,676
45,216 58,048 106,725
The principal activities are as follows:
Product Development and Customer Services ("PD & CS"), representing revenues
from sales of software and subsequent maintenance revenues, and the costs of
developing and maintaining that software;
Implementation Services ("IS"), representing the results of activities through
which we deploy and configure our software for our customers;
Professional and Business Solutions ("PBS"), representing a portfolio of
performance improvement tools and services, including analytics, benchmarking
and transformation services; and
Quality Assurance Solutions ("QAS"), representing inspection and review
services which support the assessment of educational delivery.
Total Revenue Adjusted segment operating profit
Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Yearended31 December2015£'000 Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Yearended31 December2015£000
PD & CSIMP 23,9377,037 24,2178,508 46,13116,910 1,508116 1,296582 2,0231,140
PBSQAS 3,78210,460 7,39118,184 13,77130,482 61706 (143)2,605 2292,900
Inter-segment - (252) (569) - - -
Total 45,216 58,048 106,725 2,391 4,340 6,292
Unallocated corporate expenses (1,935) (1,895) (3,408)
Adjusted operating profit 456 2,445 2,884
Amortisation of IFRS 3 intangibles (see note 5) (891) (833) (1,686)
Other items (see note 5) (1,491) (6,847) (46,420)
Operating loss (1,926) (5,235) (45,222)
The accounting policies of the reportable segments are the same as the Group's
accounting policies. Segment profit represents the profit earned by each
segment, without the allocation of central administration costs, including
Directors' salaries, finance costs and income tax expense. This is the
measure reported to the Group's Chief Executive for the purpose of resource
allocation and assessment of segment performance.
Revenues of approximately 13% (31 December 2015: 18%) have arisen within our
QAS segment from the Group's largest customer and revenues of approximately 5%
(31 December 2015: 6%) have arisen within our PD&CS and Implementation
segments from the Group's second largest customer.
Included within other items is goodwill impairment of £19.1m which relates to
the disposal of the Synergy business, of which £14.2m arises in respect of the
PD&CS segment and £4.9m arises in respect of the Implementation segment (31
December 2015: £38.8m, of which £23.6m arises in respect of the PD&CS segment,
£9.7m arises in respect of the QAS segment, and £5.5m arises in respect of the
PBS segment).
5. Other items
Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Yearended31 December2015£'000
Profit on sale of Synergy 301 - -
- Acquisition costs - (218) (198)
- Gain on bargain purchase - 403 405
- Movement in deferred contingent consideration* (387) (86) 1,020
Acquisition related costs (387) 99 1,227
- Impairment of goodwill - (7,260) (38,802)
- Impairment of development costs and related charges - - (7,989)
Impairment charges - (7,260) (46,791)
- Onerous contracts 71 233 294
- Costs on closure of SLS business (33) - (823)
- Property related 91 81 210
- Restructuring and associated costs (1,534) - (537)
Other exceptional items (1,405) 314 (856)
Other administrative costs (1,491) (6,847) (46,420)
- Amortisation of IFRS 3 intangibles (891) (833) (1,686)
Total administrative costs (2,382) (7,680) (48,106)
- Unwinding of discount on deferred contingent consideration (169) (293) (585)
- Bank arrangement fees written off (244) - -
- Fees associated with waiver of loan covenant 51 - (456)
Exceptional financing items (362)(2,744) (293)(7,973) (1,041)(49,147)
Tax on other items 466 202 2,558
(2,278) (7,771) (46,589)
* Included in movement in deferred contingent consideration are £42k of
professional fees incurred in relation to valuation of contingent
consideration.
IAS1, paragraph 97, requires separate disclosure of such items that are
considered material by nature or value in the financial statements. As such,
'other item's are not part of the Group's underlying trading activities and
include the following for the six months ended 30 June 2016:
Profit on sale of Synergy; on 29 February 2016, the Group announced that it
had agreed to dispose of its Synergy children's services management
information systems business to Servelec Group plc for total consideration of
£20.25m (£19.4m after adjustments for working capital). Subsequent to the
allocation of goodwill of £19.1m and costs arising in respect of the disposal,
a profit on disposal of £0.3m was recognised in the period. Further
information is provided in note 16.
Acquisition costs: during the period, a final payment was made in respect of
deferred consideration payable on acquisition of iGraduate, which resulted in
a true up of the amounts provided (£0.6m additional charge) and has also been
impacted by other movements in the fair value of contingent deferred
consideration.
Other exceptional items: amounts principally reflect the costs arising in
respect of the restructuring of the Group's operations. The restructuring
program was executed in the first half of 2016 and associated costs provided
for. Amounts include provision for redundancy costs, consolidation of the
Group's office portfolio as well as the costs of termination of the previous
executive directors' employment contracts.
Amortisation of IFRS3 intangibles: amortisation arising on the fair value of
intangible assets acquired is separately disclosed as other items.
6. Finance costs
Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Yearended31 December2015£'000
Interest on bank overdrafts and loans 297 285 695
Amortisation and write off of loan arrangement fees 50 116 272
Other interest payable 177 77 116
Financing costs 524 478 1,083
Unwinding of discount on deferred contingent consideration 169 293 585
Bank arrangement fees written off 244 - -
Fees associated with waiver of loan covenants (51) - 456
Other financing costs 362 293 1,041
Total financing costs 886 771 2,124
7. Tax
Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Yearended31 December2015£'000
Current tax
UK corporation tax - (41) 354
Overseas tax 482 371 173
Adjustments in respect of prior periods - (325) (1,262)
Deferred tax 482 5 (735)
Current period (725) 93 (2,125)
Adjustments in respect of prior periods - 176 999
(725) 269 (1,126)
Tax (credit)/charge on losses (243) 274 (1,861)
In addition to the amount charged to the income statement, a current tax
credit of £nil (30 June 2015: £nil; 31 December 2015: credit of £195,000) and
a deferred tax credit of £21,000 (30 June 2015: charge of £218,000; 31
December 2015: charge of £219,000) has been recognised directly in equity in
relation to share schemes. A deferred tax credit of £212,000 (30 June 2015:
£nil; 31 December 2015: £34,000) has been recognised in the Consolidated
Statement of Comprehensive Income in relation to Defined Benefit pension
schemes.
The Group continues to hold an appropriate corporation tax provision in
relation to the Group relief claimed from Care UK for the year ended 31 March
2007.
Taxes on income in the interim periods are accrued using the tax rate that
would be applicable to expected total annual earnings.
8. Earnings per share
Earnings per share and diluted earnings per share are calculated by reference
to a weighted average of ordinary shares calculated as follows:
Six monthsended30 June2016000 Six monthsended30 June2015000 Yearended31 December2015000
Basic weighted average number of shares in issue 142,383 94,435 94,435
Employee share options - - -
Weighted average number of shares outstanding for dilution calculations 142,383 94,435 94,435
Diluted earnings per share only reflects the dilutive effect of share options
for which performance criteria have been met. The maximum number of
potentially dilutive shares, based on options that have been granted but have
not yet met vesting criteria is 6,186,216 (December 2015: 1,531,955).
The adjusted basic and diluted earnings per share figures shown on the
condensed consolidated income statement are included as the directors believe
that they provide a better understanding of the underlying trading performance
of the Group.
A reconciliation of how these figures are calculated is set out below.
Six months ended 30 June 2016 Six months ended 30 June 2015 Year ended 31 December 2015
Continuing£'000 Discontinued£'000 Total£'000 Continuing£'000 Discontinued£'000 Total£'000 Continuing£'000 Discontinued£'000 Total£'000
Net loss (2,551) - (2,551) (6,278) (81) (6,359) (45,436) (80) (45,516)
Earnings per share
Basic and diluted (1.8)p - (1.8)p (6.6)p (0.1)p (6.7)p (48.1)p (0.1)p (48.2)p
Adjusted earnings per share
Basic and diluted (1.8)p 1.6p 1.2p
(Loss)/profit for the period Earnings per share
Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Year ended31 December2015£'000 Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Year ended31 December2015£'000
Loss for the period attributable to equity share holders (2,551) (6,359) (45,516) (1.8)p (6.7)p (48.2)p
Add back: discontinued operations - 81 80 - 0.1p 0.1p
Loss for the year from continuing operations (2,551) (6,278) (45,436) (1.8)p (6.6)p (48.1)p
Add back:
Amortisation of IFRS 3 intangibles (net of tax) 633 593 1,197
Impairment of goodwill - 7,260 38,802
Disposal of Synergy (301) - -
Gain on bargain purchase - (403) (405)
Impairment of development costs (net of tax) - - 6,323
Unwinding of discount on deferred consideration and onerous contracts 169 293 585
Other items (net of tax) 1,390 (58) 1,107
Movement in deferred contingent consideration 387 86 (1,020)
Total adjusted items (net of tax) 2,278 7,771 46,589 (1.6)p 8.2p 49.3p
Adjusted earnings (273) 1,493 1,153 (0.2)p 1.6p 1.2p
9. Dividends
Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Yearended31 December2015£'000
Amounts recognised as distributions to equity holders in the period:
Interim dividend for the year ended 31 December 2015 of 0.70 pence per share - - 661
Final dividend for the year ended 31 December 2015 of nil pence per share (2014: 1.20 pence per share) - 1,138 1,133
- 1,138 1,794
No final dividend was paid for the year ended 31 December 2015 and no interim
dividend for 2016 has been proposed.
10. Goodwill
£'000
Cost
At 1 January 2016 119,542
Exchange differences 1,545
At 30 June 2016 121,087
Accumulated impairment losses
At 1 January 2016 81,231
Allocation of goodwill to disposal of Synergy 19,107
At 30 June 2016 100,338
Net book value
At 30 June 2016 20,749
At 31 December 2015 38,311
On 1 April 2016 The Group disposed of its Synergy children's services
management information system business to Servelec Group plc. As part of
the calculation of the profit on disposal, goodwill associated with the
Synergy business has been allocated to the profit. This amounted to £19.1m
(see also note 16).
The Group tests annually for impairment, or more frequently if there are
indicators that goodwill could be impaired. At the half year, a review has
been undertaken to ascertain if any indicators have arisen of potential
impairments. Based on the review performed, no impairment indicators that
would require an impairment review have been noted.
11. Other intangible assets
Software£'000 Customercontracts andrelationships£'000 Developmentcosts£'000 Business systems£'000 Software licences£'000 Total£'000
Cost
At 1 January 2016 6,634 6,613 30,015 5,688 - 48,950
Transfers - - - - 1,369 1,369
Additions - - 494 555 12 1,061
Disposals - - (3,153) - (36) (3,189)
Exchange differences 908 387 257 12 - 1,564
At 30 June 2016 7,542 7,000 27,613 6,255 1,345 49,755
Amortisation
At 1 January 2016 2,128 3,800 23,831 4,407 - 34,166
Transfers - - - - 1,084 1,084
Charge for the period 664 227 562 69 105 1,627
Disposals - - (2,664) - (25) (2,689)
Exchange differences 351 121 89 5 - 566
At 30 June 2016 3,143 4,148 21,818 4,481 1,164 34,754
Carrying amount
At 30 June 2016 4,399 2,852 5,795 1,774 181 15,001
At 31 December 2015 4,506 2,813 6,184 1,281 - 14,784
Software and customer contract and relationships have arisen from
acquisitions, and are amortised over their estimated useful lives, which are
3-6 years and 3-12 years respectively. The amortisation period for development
costs incurred on the Group's product development is three to seven years,
based on the expected life-cycle of the product. Amortisation of development
costs is included within cost of sales; the amortisation for software,
customer contracts and relationships and business systems is included within
administrative expenses.
Disposals in development costs correspond to the sale of the Synergy business
(see note 16).
12. Trade and other receivables
30 June2016£'000 30 June2015£'000 31 December2015£'000
Amounts receivable for the sale of services 15,350 15,815 17,700
Allowance for doubtful debts (722) (284) (655)
14,628 15,531 17,045
Amounts recoverable on contracts 28 111 42
Other receivables 280 341 263
Prepayments 2,963 3,591 2,845
17,899 19,574 20,195
13. Trade and other payables
30 June2016£'000 30 June2015£'000 31 December2015£'000
Trade payables 2,118 4,121 2,274
Other taxation and social security 3,082 4,509 3,405
Other payables 1,999 3,157 1,364
7,199 11,787 7,043
14. Provisions
Property related£'000 Deferred consideration£'000 Onerous contracts£'000 Legal claims£'000 Restructuring£'000 Total£'000
At 1 January 2016 617 4,717 444 158 - 5,936
Increase/(release) in provision 11 345 (69) 215 811 1,313
Utilisation of provision (243) (2,907) (179) - - (3,329)
Unwind of discount - 169 - - - 169
Exchange rate movement 7 411 - - 9 427
At 30 June 2016 392 2,735 196 373 820 4,516
The provisions are split as follows:
Property related£'000 Deferred consideration£'000 Onerous contracts£'000 Legal claims£'000 Restructuring£'000 Total£'000
Within one year 392 1,375 196 373 820 3,156
More than one year - 1,360 - - - 1,360
392 2,735 196 373 820 4,516
Property related provisions reflect costs associated with exiting properties
leased by businesses now discontinued or closed. Costs are expected to be
incurred over a period of up to one year.
Deferred consideration reflects amounts in respect of the acquisitions of
subsidiary undertakings, payable over a period of up to 3 years. Certain
amounts are contingent upon the performance of the acquired entities, with
amounts reflecting management's best estimate of the future profitability of
those entities and the resultant payments due under the terms of the Sale and
Purchase Agreements. Deferred consideration is measured at fair value with
gains and losses going through the income statement.
Onerous contracts represent costs anticipated from contracts, where we have
withdrawn from markets but are committed to multiyear maintenance deals which
necessitate a minimum level of staffing which will not be covered by contract
revenues.
Legal claims reflect provisions recognised in respect of disputes arising on
previously disposed of businesses, and anticipated costs to resolve other
contractual disputes.
Restructuring provisions represent amounts provided in respect of the Group's
restructuring and reorganisation. Amounts principally reflect redundancy
costs and amounts provided in respect of the consolidation of the Group's
office portfolio.
15. Share capital
Six monthsended30 June2016number Six monthsended30 June2016£'000 Six monthsended30 June2015number Six monthsended30 June2015£'000 Year ended31 December 2015number Year ended31 December2015£'000
Allotted , called up and fully paid
At beginning of the period 94,849,241 4,743 94,849,241 4,743 94,849,241 4,743
Issued during the period 100,531,058 5,026 - - - -
At end of the period 195,380,299 9,769 94,849,241 4,743 94,849,241 4,743
On 4 April 2016 94,849,241 Rights Issue shares were issued and on 19 April
2016 5,681,817 Subscriptions shares were issued.
16. Disposal of Synergy
On 1 April 2016 The Group disposed of its Synergy children's services
management information system business to Servelec Group plc.
The net assets of the Synergy business at the date of disposal were as
follows:
£'000
Intangible assets 489
Tangible assets 220
Trade and other receivables 1,785
Trade and other payables (3,364)
Attributable goodwill 19,107
Net assets 18,237
Cash consideration 19,421
Costs associated with the disposal (883)
Gain on disposal 301
Two of the Group's directors, Richard Last and Roger McDowell are also
directors of Servelec Group plc; given the conflict arising in respect of the
disposal of Synergy to Servelec, neither director participated in the Board's
consideration of the disposal of Synergy.
Additionally, the Group has provided warranties and indemnities against
certain liabilities as part of the disposal. The Group believes that a
material liability arising from such warranties provided is remote.
During 2016, the Synergy business generated revenues of £1.5m (2015: £6.3m),
of which £1.3m (2015: £5.2m) related to the Product Development and Customer
Services segment, and included £1.0m (2015: £4.1m) of recurring software
maintenance revenues. Other revenue generated by the Synergy business of £0.3m
(2015: £1.1m) related to the Implementation Services segment.
The Synergy business delivered an operating profit £0.7m in 2016 (2015:
£2.7m), stated before allocation of costs of central support services which
have not transferred to Servelec Group plc. These non-transferring activities
include IT services, HR, finance, legal, marketing and head office costs.
Additionally, the operating profit for 2016 is stated before exceptional
charges of £nil (2015: £1.0m).
17. Retirement Benefit Schemes
Following the UK's decision to leave the EU, the Group has reviewed its
defined benefit schemes with the assistance of its actuaries resulting in the
net defined assets of the scheme reducing from £88,000 to net defined
liabilities of £1,090,000. As a result an actuarial loss of £1,178,000 has
been recognised in the consolidated statement of comprehensive income and
expense.
18. Notes to the cash flow statement
Six monthsended30 June2016£'000 Six monthsended30 June2015£'000 Yearended31 December2015£'000
Operating loss from continuing operations (1,926) (5,235) (45,222)
Operating loss from discontinued operations - (30) (80)
Gain on disposal of Synergy (301) - -
Depreciation of property, plant and equipment 756 748 1,532
Impairment of goodwill - 7,260 38,802
Amortisation and impairment of other intangible assets 1,627 2,834 13,437
Other non cash items 1,735 450 (1,834)
Operating cash flows before movements in working capital 1,891 6,027 6,635
(Increase)/decrease in inventories (50) (206) 478
Decrease in receivables 1,341 182 5,701
Increase/(decrease) in payables 1,137 (8,793) (17,203)
Net cash from/(used in) operating activities before tax 4,319 (2,790) (4,389)
Tax receipts/(paid) 314 (371) (1,827)
Net cash from/(used in) operating activities 4,633 (3,161) (6,216)
Net cash from/(used in) operating activities before tax can be analysed as follows:
Continuing operations (excluding restricted cash) 4,369 3,097 2,045
Decrease in restricted cash (50) (5,865) (6,354)
4,319 (2,768) (4,309)
Discontinued operations - (22) (80)
4,319 (2,790) (4,389)
19. Analysis of net cash/net debt
30 June2016£'000 30 June2015£'000 31 December2015£'000
Cash and cash equivalents 7,186 4,499 3,896
Overdrafts - - (2,160)
Syndicated bank facility (net of bank arrangement fees) (1,500) (27,589) (34,207)
Net cash/(net debt) 5,686 (23,090) (32,471)
Analysis of changes in net cash/net debt.
30 June2016£'000 30 June2015£'000 31 December2015£'000
Opening net debt (32,471) (11,678) (11,678)
Net increase/(decrease) in cash and cash equivalents 5,516 (4,510) (7,387)
Effect of foreign exchange rate changes (66) (336) (222)
Decrease/(increase) in bank loans and overdrafts 33,000 (6,450) (12,912)
Amortisation of loan arrangement fees and similar charges (293) (116) (272)
Closing net cash/(net debt) 5,686 (23,090) (32,471)
As at 30 June 2016, cash and cash equivalents included restricted advance cash
receipts in relation to customer programmes of £0.2m (30 June 2015: £0.8m, 31
December 2015: £0.2m).
20. Contingent liabilities
The Group is subject to various claims which arise in the ordinary course of
business. At any time, the Group is overseeing a portfolio of customer
implementation projects. Such projects may be complex, multi-phase projects
giving rise to significant operational risks which the Group must manage. Such
risks may, in certain instances, lead to potential negotiations or disputes
with customers which may give rise to consequential financial or commercial
obligations or liabilities arising.
A cross-guarantee exists between Group companies in respect of bank facilities
totalling £nil (30 June 2015: £28.0m, 31 December 2015: £36.2m).
In addition, the Company and its subsidiaries have provided performance
guarantees issued by their banks on their behalf, in the ordinary course of
business totally £6.9m (30 June 2015: £8.0m, 31 December 2015: £8.5m). These
are not expected to result in any material financial loss.
21. Related party disclosures
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
As part of the Rights Issue, a CEO Subscription by Ian Bowles (the Company's
Chief Executive) to raise £250,000, a NED Subscription by Richard Last and
Roger McDowell (the Company's Chairman and Senior Independent Director,
respectively) to raise a total of £1,000,000 and a Share Matching Plan to be
entered into between the Company and Richard Last and Roger McDowell were
executed. The Subscription Shares were admitted to listing on the Official
List and admitted to trading on the Main Market on 19 April 2016.
On 28 June 2016, Tribal Group plc ("the Company") granted nil-cost options
over a total of 3,591,020 ordinary shares (representing approximately 1.84% of
the Company's issued shares) to its executive directors and members of the
senior management team under the terms of its 2010 Long Term Incentive Plan.
This included nil-cost options over 2,454,546 ordinary shares granted to Ian
Bowles, the Group's Chief Executive Officer. All of the awards are subject to
a performance condition measured over a maximum of a 3 year period ending on
27 June 2019.
In addition, the Company granted nil cost options to Mark Pickett, Group Chief
Financial Officer, under the terms of its 2010 Long Term Incentive Plan, over
a total of 1,223,241 ordinary shares (representing approximately 0.63% of the
Company's issued shares). This award is subject to a performance condition
measured over
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