Half Yearly Report
Released : 20/09/2012 07:00
RNS Number : 6769M
M&C Saatchi PLC
20 September 2012
M&C SAATCHI PLC
INTERIM RESULTS
SIX MONTHS ENDED
30 JUNE 2012
20 September 2012
M&C Saatchi PLC
Interim Results for the six months ended 30 June 2012
20 September 2012
Excellent results, with strong revenue momentum and earnings growth
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Financial Highlights 2012 |
Growth versus 2011 |
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Revenue |
£82.8m |
+15% (2011: £71.9m) |
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Operating Profit |
£8.6m |
+13% (2011: £7.6m) |
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Profit Before Tax |
£8.7m |
+13% (2011: £7.7m) |
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EPS |
7.95p |
+11% (2011: 7.15p) |
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Dividend |
1.10p |
+10% (2011: 1.00p) |
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The highlights are headline results, see note on next page for definition.
Operational Highlights
· Successful first half with further strong growth in both revenue and earnings, driven by excellent new business wins and roll out of international offices and new businesses
· Global Network performed well across all geographies:
° UK: revenues up 16%, with CRM and mobile performing particularly well
° Europe: like-for-like revenues up 25%, operating profit up 31%, in spite of macro-economic challenges
° Asia and Australasia: like-for-like revenues up 12%, operating profit up 41%
° Middle East and Africa: like-for-like revenues up 146% to £2.8m, well positioned to take advantage of growing African market
° Americas: like-for-like revenues up 12% with our New York agency set to launch in Q4
° Clear had a disappointing first half and have reduced their cost base 15%
· We continue to invest and build for the future: two offices added (Abu Dhabi and Singapore) together with a new management team in New York
· Strong balance sheet maintained, focus on cash control with net cash of £14.4m
· Interim dividend increased 10% to 1.10p
Commenting on the results, David Kershaw, Chief Executive, said:
"M&C Saatchi has made further good progress over the first six months of 2012. This has resulted from new business success and successful new businesses.
"Our federation of entrepreneurs delivered double digit revenue and earnings growth. Meanwhile, we continue to invest in high-growth new businesses in mature markets, to scale up in new markets and to export proven models across the network.
"Looking ahead, we are confident that we will continue to make progress in 2012 and beyond. The strategy is working. "
For further information please call:
M&C Saatchi +44 (0)20-7543-4500
David Kershaw
Tulchan Communications +44 (0)20-7353-4200
Lucy Legh
Susanna Voyle
Numis Securities +44 (0)20-7260-1000
Nick Westlake, NOMAD
Charles Farquhar, Corporate Broking
Notes to Editors
Headline results
Headline results are stated before accounting for the amortisation of acquired intangibles (including goodwill), the fair value adjustment to minority put option liabilities, revisions to contingent consideration and call option revaluations. The reconciliation of the difference between the headline results and the reported results is set out in note 4 on page 16.
Like-for-like
The like-for-like revenue comparisons referred to in this report are stated after excluding the impact of foreign currency movements.
Periods compared
This report comments on the unaudited consolidated income statement of M&C Saatchi plc (the "Group") for the six months to 30 June 2012 compared with unaudited consolidated income statement for the same period in 2011.
SUMMARY OF RESULTS
The first six months of 2012 saw another strong performance with very good revenue momentum and earnings growth. Like-for-like revenues increased 15% and we maintain a double digit headline operating margin of 10%, in spite of first half investment in three offices (New York, Abu Dhabi and Singapore). The headline profit before tax advanced 13% to £8.7m and headline net earnings rose 13%.
UK
We experienced very good revenue growth in the UK of 16%, with our CRM and mobile businesses doing particularly well. We also had a strong run of wins across our family of businesses, including O₂, Loewe, National Trust, Harveys, Spotify, Twitter, Intercontinental Hotels, Saga, Viking and Virgin Holidays. We are seeing an increasing number of integrated wins across communication channels. We retain a close watch on costs as well as margins. This resulted in the headline operating margin holding at 20.7% (2011: 20.8%, both margins exclude the impact of Group recharges). The UK headline operating profit improved a positive 15% on 2011.
Europe
Despite the economic backdrop, we made outstanding progress in Europe. Like-for-like revenues increased 25%. Headline operating profit was up 31%. Germany and Switzerland both performed well, whilst Italy excelled. In France, new business continued to be sluggish on the advertising front but we benefited from digital and PR contributions. We retained La Banque Postale, a major client. Spain continued to underperform in a very difficult market but, as an associate, our investment there is just 25%.
Middle East and Africa
We experienced excellent growth in both Cape Town and Johannesburg. Revenues were up from £1.1m to £2.8m and key wins in the period were Edgars Department Stores and Nedbank's below-the-line account. The African headline operating profit was £330k, compared with a loss of £26k in the same period last year. Elsewhere in the region, we opened an Abu Dhabi office on the back of our Etihad win.
Asia and Australasia
In Asia and Australasia, like-for-like revenue increased 12% in the six months and headline operating profit was up a very favourable 41%. The key driver for this was Australia, which stabilised after a turbulent 2011 on the client front. In the first six months of this year, we won Commonwealth Bank and retained Optus, two Group top ten accounts. We also won assignments from Opal and Slater & Gordon, lawyers. In February, we widened the office capability with the acquisition of Bang PR, a Sydney based consumer PR company which works with Optus and Woolworth.
New Zealand was impacted by two of their main clients suspending media spends. There was another excellent performance from Malaysia. China continued to be challenging, with severe pricing pressure and our lack of scale making for a more difficult market. Japan and India were both profitable, albeit relatively modest. We reopened our Singapore office in February 2012 with an experienced and promising team.
The regional headline operating margin was 7.0%, which compared with 2011's 5.6%.
Americas
In New York, we recruited a Chief Executive, Jeff Brooks, who joined in February to expand our offer in the US. He has hired a chief creative officer and will be hiring head of planning to complete the management team and will launch the agency in the last quarter. This investment meant a headline operating loss in the Americas of £445k for the first six months. Further investment will follow in the second half.
We made some progress in Los Angeles and Sao Paulo, which both continued to win new business.
Clear
Clear had a disappointing first half, with revenues slowing for a variety of reasons; budget cuts, restructuring programmes underway or the switching of spend into communications. We have taken action implementing a programme that reduced costs by 15%.
Outlook
M&C Saatchi has made further good progress over the first six months of 2012. This has resulted from new business success and successful new businesses.
Our federation of entrepreneurs delivered double digit revenue and earnings growth. Meanwhile, we continue to invest in high-growth new businesses in mature markets, to scale up in new markets and to export proven models across the network.
Looking ahead, we are confident that we will continue to make progress in 2012 and beyond. The strategy is working.
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT
ENDED 30 JUNE 2012
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Six months ended 30 June 2012
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Six months ended 30 June 2011
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Year ended 31 December 2011
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Note |
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£000 |
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|
£000 |
|
£000 |
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|
|
|
|
|
|
|
|
|
|
BILLINGS |
|
|
240,330 |
|
|
|
242,035 |
|
520,017 |
|
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|
|
|
|
|
|
|
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REVENUE |
4 |
|
82,846 |
|
|
|
71,906 |
|
153,133 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs |
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|
(74,494) |
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|
|
(64,404) |
|
(139,040) |
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|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT |
4 |
|
8,352 |
|
|
|
7,502 |
|
14,093 |
|
|
|
|
|
|
|
|
|
|
|
|
Share of results of associates |
|
|
13 |
|
|
|
105 |
|
115 |
|
Finance income |
6 |
|
196 |
|
|
|
171 |
|
2,199 |
|
Finance costs |
7 |
|
(2,593) |
|
|
|
(709) |
|
(370) |
|
|
|
|
|
|
|
|
|
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|
PROFIT BEFORE TAXATION |
4 |
|
5,968 |
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|
|
7,069 |
|
16,037 |
|
|
|
|
|
|
|
|
|
|
|
|
Taxation on profits |
8 |
|
(2,542) |
|
|
|
(2,395) |
|
(4,589) |
|
|
|
|
|
|
|
|
|
|
|
PROFIT FOR THE FINANCIAL PERIOD |
|
|
3,426 |
|
|
|
4,674 |
|
11,448 |
|
|
|
|
|
|
|
|
|
|
|
|
Profit attributable to: |
|
|
|
|
|
|
|
|
|
|
Equity shareholders of the Group |
4 |
|
2,345 |
|
|
|
3,845 |
|
9,599 |
|
Non controlling interest |
|
|
1,081 |
|
|
|
829 |
|
1,849 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,426 |
|
|
|
4,674 |
|
11,448 |
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE |
4 |
|
|
|
|
|
|
|
|
|
Basic |
|
|
3.73p |
|
|
|
6.20p |
|
15.39p |
|
Diluted |
|
|
3.63p |
|
|
|
6.08p |
|
15.07p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
ENDED 30 JUNE 2012
|
|
|
|
Six months ended 30 June 2012
|
|
|
|
Six months ended 30 June 2011
|
|
Year ended 31 December 2011
|
|
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
Profit for the period |
|
|
3,426 |
|
|
|
4,674 |
|
11,448 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations before tax |
|
|
(384) |
|
|
|
426 |
|
(189) |
|
Tax expense |
|
|
(40) |
|
|
|
- |
|
(40) |
|
Other comprehensive income for the period net of tax |
|
|
(424) |
|
|
|
426 |
|
(229) |
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
|
3,002
|
|
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|
5,100
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|
11,219 |
|
Total comprehensive income attributable to: |
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|
|
|
|
|
|
|
|
Equity shareholders of the Group |
|
|
1,921 |
|
|
|
4,271 |
|
9,370 |
|
Non controlling interests |
|
|
1,081 |
|
|
|
829 |
|
1,849 |
|
|
|
|
3,002 |
|
|
|
5,100 |
|
11,219 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2012
|
|
|
|
30 June 2012 |
|
|
|
30 June 2011 |
|
31 December 2011 |
|
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
NON CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
61,414 |
|
|
|
62,234 |
|
60,229 |
|
Investments in associates |
|
|
2,226 |
|
|
|
2,196 |
|
2,226 |
|
Plant and equipment |
|
|
7,033 |
|
|
|
5,884 |
|
6,941 |
|
Deferred tax assets |
|
|
1,419 |
|
|
|
651 |
|
1,098 |
|
Other non current assets |
|
|
5,562 |
|
|
|
5,255 |
|
4,987 |
|
|
|
|
77,654 |
|
|
|
76,220 |
|
75,481 |
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
|
73,027 |
|
|
|
67,597 |
|
89,585 |
|
Current tax assets |
|
|
539 |
|
|
|
873 |
|
322 |
|
Cash and cash equivalents |
|
|
18,066 |
|
|
|
17,420 |
|
18,779 |
|
|
|
|
91,632 |
|
|
|
85,890 |
|
108,686 |
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
|
(84,175) |
|
|
|
(82,831) |
|
(103,406) |
|
Current tax liabilities |
|
|
(2,138) |
|
|
|
(2,692) |
|
(2,270) |
|
Other financial liabilities |
|
|
(108) |
|
|
|
(97) |
|
(126) |
|
Deferred and contingent consideration |
|
|
- |
|
|
|
(260) |
|
(128) |
|
Minority shareholder put options liabilities |
|
|
(1,936) |
|
|
|
(1,551) |
|
(1,682) |
|
|
|
|
(88,357) |
|
|
|
(87,431) |
|
(107,612) |
|
|
|
|
|
|
|
|
|
|
|
|
NET CURRENT ASSETS / (LIABILITIES) |
|
|
3,275 |
|
|
|
(1,541) |
|
1,074 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS LESS CURRENT LIABILITIES |
|
|
80,929 |
|
|
|
74,679 |
|
76,555 |
|
|
|
|
|
|
|
|
|
|
|
|
NON CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
(918) |
|
|
|
(902) |
|
(813) |
|
Other financial liabilities |
|
|
(3,712) |
|
|
|
(2,614) |
|
(3,890) |
|
Contingent consideration |
|
|
- |
|
|
|
- |
|
- |
|
Minority shareholder put options liabilities |
|
|
(17,595) |
|
|
|
(18,152) |
|
(15,410) |
|
Other non current liabilities |
|
|
(411) |
|
|
|
(300) |
|
(396) |
|
|
|
|
(22,636) |
|
|
|
(21,968) |
|
(20,509) |
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS |
|
|
58,293 |
|
|
|
52,711 |
|
56,046 |
|
|
|
|
|
|
|
|
|
|
|
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED BALANCE SHEET (CONTINUED)
AT 30 JUNE 2012
|
|
|
|
30 June 2012 |
|
|
|
30 June 2011 |
|
31 December 2011 |
|
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
|
637 |
|
|
|
632 |
|
635 |
|
Share premium |
|
|
14,126 |
|
|
|
13,455 |
|
13,832 |
|
Merger reserve |
|
|
21,194 |
|
|
|
21,922 |
|
21,194 |
|
Treasury reserve |
|
|
(792) |
|
|
|
(792) |
|
(792) |
|
Minority interest put option reserve |
|
|
(14,305) |
|
|
|
(14,652) |
|
(14,305) |
|
Non controlling interest acquired |
|
|
(359) |
|
|
|
(130) |
|
(297) |
|
Foreign exchange reserve |
|
|
1,884 |
|
|
|
3,088 |
|
2,308 |
|
Retained earnings |
|
|
33,243 |
|
|
|
26,530 |
|
30,808 |
|
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE GROUP |
|
|
55,628 |
|
|
|
50,053 |
|
53,383 |
|
|
|
|
|
|
|
|
|
|
|
|
NON CONTROLLING INTERESTS |
|
|
2,665 |
|
|
|
2,658 |
|
2,663 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY |
|
|
58,293 |
|
|
|
52,711 |
|
56,046 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
SIX MONTHS ENDED 30 JUNE 2012
|
|
Share Capital £000 |
Share premium £000 |
Merger reserve £000 |
Treasury reserve £000 |
MI put option reserve £000 |
Non controlling interest acquired |
Foreign exchange £000 |
Retained earnings £000 |
Subtotal £000 |
Non controlling interest in equity £000 |
Total £000 |
|
At 1 January 2011 |
625 |
12,822 |
21,922 |
(792) |
(10,466) |
(130) |
2,662 |
23,053 |
49,696 |
1,375 |
51,071 |
|
Reserve movement for year ending 31 December 2011 |
|
|
|
|
|
|
|
||||
|
Acquired non controlling interest |
2 |
262 |
- |
- |
158 |
(166) |
- |
- |
256 |
- |
256 |
|
Issues of shares to minorities |
- |
- |
- |
- |
- |
- |
- |
- |
- |
166 |
166 |
|
Exchange rate movements |
- |
- |
- |
- |
- |
(1) |
- |
- |
(1) |
87 |
86 |
|
Release on company deletion |
- |
- |
- |
- |
- |
- |
(125) |
125 |
- |
- |
- |
|
Issue of minority put options |
- |
- |
- |
- |
(4,186) |
- |
- |
- |
(4,186) |
- |
(4,186) |
|
Cancellation of minority put options |
- |
- |
- |
- |
189 |
- |
- |
(133) |
56 |
- |
56 |
|
Released against Hong Kong Investment provision |
- |
- |
(728) |
- |
- |
- |
- |
728 |
- |
- |
- |
|
Option exercise |
8 |
748 |
- |
- |
- |
- |
- |
(756) |
- |
- |
- |
|
Reclassification of share to cash based option |
- |
- |
- |
- |
- |
- |
- |
(372) |
(372) |
- |
(372) |
|
Share option charge |
- |
- |
- |
- |
- |
- |
- |
1,087 |
1,087 |
- |
1,087 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
(2,523) |
(2,523) |
(814) |
(3,337) |
|
Total comprehensive income for the year |
- |
- |
- |
- |
- |
- |
(229) |
9,599 |
9,370 |
1,849 |
11,219 |
|
At 1 December 2011 |
635 |
13,832 |
21,194 |
(792) |
(14,305) |
(297) |
2,308 |
30,808 |
53,383 |
2,663 |
56,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2012 |
635 |
13,832 |
21,194 |
(792) |
(14,305) |
(297) |
2,308 |
30,808 |
53,383 |
2,663 |
56,046 |
|
Reserve movement for six months ending 30 June 2012 |
|
|
|
|
|
|
|
|
|||
|
Issue of shares to minorities |
- |
- |
- |
- |
- |
- |
- |
- |
- |
11 |
11 |
|
Exchange rate movements |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(2) |
(2) |
|
Options exercise |
2 |
294 |
- |
- |
- |
- |
- |
(296) |
- |
- |
- |
|
Non Controlling interest acquired |
- |
- |
- |
- |
- |
(62) |
- |
- |
(62) |
- |
(62) |
|
Share option charge |
- |
- |
- |
- |
- |
- |
- |
386 |
386 |
- |
386 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(1,088) |
(1,088) |
|
Total comprehensive income for year |
- |
- |
- |
- |
- |
- |
(424) |
2,345 |
1,921 |
1,081 |
3,002 |
|
At 30 June 2012 |
637 |
14,126 |
21,194 |
(792) |
(14,305) |
(359) |
1,884 |
33,243 |
55,628 |
2,665 |
58,293 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
SIX MONTHS ENDED 30 JUNE 2012
|
|
Share Capital £000 |
Share premium £000 |
Merger reserve £000 |
Treasury reserve £000 |
MI put option reserve £000 |
Non controlling interest acquired |
Foreign exchange £000 |
Retained earnings £000 |
Subtotal £000 |
Non controlling interest in equity £000 |
Total £000 |
|
At 1 January 2011 |
625 |
12,822 |
21,922 |
(792) |
(10,466) |
(130) |
2,662 |
23,053 |
49,696 |
1,375 |
51,071 |
|
Reserve movement for six months ending 30 June 2011 |
|
|
|
|
|
|
|
|
|||
|
Issues of shares to minorities |
- |
- |
- |
- |
- |
- |
- |
- |
- |
707 |
707 |
|
Exchange rate movements |
- |
- |
- |
- |
- |
- |
- |
- |
- |
49 |
49 |
|
Issue of minority put options |
- |
- |
- |
- |
(4,316) |
- |
- |
- |
(4,316) |
- |
(4,316) |
|
Cancellation of minority put options |
- |
- |
- |
- |
130 |
- |
- |
55 |
185 |
- |
185 |
|
Option exercise |
7 |
633 |
- |
- |
- |
- |
- |
(640) |
- |
- |
- |
|
Reclassification of share to cash based option |
- |
- |
- |
- |
- |
- |
- |
(239) |
(239) |
- |
(239) |
|
Share option charge |
- |
- |
- |
- |
- |
- |
- |
456 |
456 |
- |
456 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(302) |
(302) |
|
Total comprehensive income for the year |
- |
- |
- |
- |
- |
- |
426 |
3,845 |
4,271 |
829 |
5,100 |
|
At 30 June 2011 |
632 |
13,455 |
21,922 |
(792) |
(14,652) |
(130) |
3,088 |
26,530 |
50,053 |
2,658 |
52,711 |
M&C SAATCHI PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
SIX MONTHS ENDED 30 JUNE 2012
|
|
|
Six months ended |
|
|
|
Six months ended |
|
Year Ended |
|
|
Notes |
£000 |
|
|
|
£000 |
|
£000 |
|
|
|
|
|
|
|
|
|
|
|
CASH GENERATED FROM OPERATIONS |
10 |
5,757 |
|
|
|
(9,762) |
|
(1,074) |
|
Tax paid |
|
(2,247) |
|
|
|
(1,088) |
|
(4,159) |
|
NET CASH (OUT) / IN FLOW FROM OPERATING ACTIVITIES |
|
3,510 |
|
|
|
(10,850) |
|
(5,233) |
|
|
|
|
|
|
|
|
|
|
|
Acquisitions |
11 |
(1,720) |
|
|
|
(1,598) |
|
(1,773) |
|
Proceeds from sale of plant and equipment |
|
- |
|
|
|
- |
|
9 |
|
Purchase of plant and equipment |
|
(1,142) |
|
|
|
(1,197) |
|
(3,389) |
|
Purchase of capitalised software |
|
(95) |
|
|
|
(72) |
|
(173) |
|
Dividends received from associates |
|
- |
|
|
|
- |
|
- |
|
Interest earned from cash held by trading entities |
|
196 |
|
|
|
139 |
|
345 |
|
NET CASH CONSUMED BY INVESTING ACTIVITIES |
|
(2,761)
|
|
|
|
(2,728)
|
|
(4,981) |
|
|
|
|
|
|
|
|
|
|
|
Dividends paid |
|
- |
|
|
|
- |
|
(2,523) |
|
Dividends paid to non controlling interest |
|
(1,088) |
|
|
|
(302) |
|
(814) |
|
Subsidiaries' sale of own shares to minorities |
|
11 |
|
|
|
2 |
|
58 |
|
Repayment of finance leases |
|
(41) |
|
|
|
(27) |
|
(62) |
|
Inception of bank loans |
|
1,186 |
|
|
|
355 |
|
2,117 |
|
Repayment of bank loans |
|
(1,272) |
|
|
|
(365) |
|
(786) |
|
Interest paid |
|
(154) |
|
|
|
(139) |
|
(297) |
|
NET CASH CONSUMED FROM FINANCING ACTIVITIES |
|
(1,358)
|
|
|
|
(476)
|
|
(2,307) |
|
|
|
|
|
|
|
|
|
|
|
NET DECREASEIN CASH AND CASH EQUIVALENTS |
|
(609)
|
|
|
|
(14,054)
|
|
(12,521) |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the period |
|
18,779 |
|
|
|
31,388 |
|
31,388 |
|
Effect of exchange rate changes |
|
(104) |
|
|
|
86 |
|
(88) |
|
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD |
|
18,066
|
|
|
|
17,420
|
|
18,779 |
|
|
|
|
|
|
|
|
|
|
1. GENERAL INFORMATION
The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 36 Golden Square, London W1F 9EE.
The Company has its primary listing on the AIM market of the London Stock Exchange.
This consolidated half-yearly financial information was approved for issue on
19 September 2012.
These results do not constitute the Group's statutory accounts. The information presented in relation to 31 December 2011 is extracted from the statutory financial statements for the year then ended and which have been delivered to the Registrar of Companies. The auditor's report on the statutory financial statements for the year ended 31 December 2011 was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report(s) and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.
2. BASIS OF PREPARATION
This consolidated half-yearly financial information for the half-year ended 30 June 2012 has been prepared in accordance with the AIM Rules for companies. The half-yearly consolidated financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2011.
3. ACCOUNTING POLICIES
The financial information in these interim results is that of the holding company and all of its subsidiaries (the Group). It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2011 and which will form the basis of the 2012 financial statements.
4. EARNINGS PER SHARE AND RECONCILIATION BETWEEN HEADLINE AND STATUTORY RESULTS
|
Six months ended |
|
Reported results |
Amortisation |
Fair value adjustments to minority put option liabilities |
Revised estimate of contingent consideration |
Headline & Segmental results |
|
|
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
REVENUE |
|
82,846 |
- |
- |
- |
82,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT |
|
8,352 |
303 |
- |
- |
8,655 |
|
|
|
Share of results of associates |
|
13 |
- |
- |
- |
13 |
|
|
|
Finance income |
|
196 |
- |
- |
- |
196 |
|
|
|
Finance expense |
|
(2,593) |
- |
2,438 |
- |
(155) |
|
|
|
PROFIT BEFORE TAXATION |
|
5,968 |
303 |
2,438 |
|
8,709 |
|
|
|
Taxation |
|
(2,542) |
(81) |
- |
- |
(2,623) |
|
|
|
PROFIT AFTER TAXATION |
|
3,426 |
222 |
2,438 |
|
6,086 |
|
|
|
Non controlling interest |
|
(1,081) |
- |
- |
- |
(1,081) |
|
|
|
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE GROUP |
|
|
||||||
|
|
|
2,345 |
222 |
2,438 |
|
5,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER SHARE |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (thousands) |
|
62,930 |
|
|
|
62,930 |
|
|
|
BASIC EPS |
|
3.73p |
|
|
|
7.95p |
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (thousands) as above |
|
62,930 |
|
|
|
62,930 |
|
|
|
Add |
|
|
|
|
|
|
|
|
|
- UK growth shares |
|
1,620 |
|
|
|
1,620 |
|
|
|
- Float options |
|
128 |
|
|
|
128 |
|
|
|
Total |
|
64,678 |
|
|
|
64,678 |
|
|
|
DILUTED EARNINGS PER SHARE |
|
3.63p |
|
|
|
7.74p |
|
|
|
Six months ended |
|
Reported results |
Amortisation |
Fair value adjustments to minority put option liabilities |
Revised estimate of contingent consideration |
Headline & Segmental results |
|
|
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
REVENUE |
|
71,906 |
- |
- |
- |
71,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT |
|
7,502 |
292 |
- |
(158) |
7,636 |
|
|
|
Share of results of associates |
|
105 |
- |
- |
- |
105 |
|
|
|
Finance income |
|
171 |
- |
- |
- |
171 |
|
|
|
Finance expense |
|
(709) |
- |
538 |
- |
(171) |
|
|
|
PROFIT BEFORE TAXATION |
|
7,069 |
292 |
538 |
(158) |
7,741 |
|
|
|
Taxation |
|
(2,395) |
(83) |
- |
- |
(2,478) |
|
|
|
PROFIT AFTER TAXATION |
|
4,674 |
209 |
538 |
(158) |
5,263 |
|
|
|
Non controlling interest |
|
(829) |
- |
- |
- |
(829) |
|
|
|
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE GROUP |
|
|
||||||
|
|
|
3,845 |
209 |
538 |
(158) |
4,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER SHARE |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (thousands) |
|
61,992 |
|
|
|
61,992 |
|
|
|
BASIC EPS |
|
6.20p |
|
|
|
7.15p |
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (thousands) as above |
|
61,992 |
|
|
|
61,992 |
|
|
|
Add |
|
|
|
|
|
|
|
|
|
- UK growth shares |
|
818 |
|
|
|
818 |
|
|
|
- Float options |
|
128 |
|
|
|
128 |
|
|
|
- LTIP options |
|
307 |
|
|
|
307 |
|
|
|
Total |
|
63,245 |
|
|
|
63,245 |
|
|
|
DILUTED EARNINGS PER SHARE |
|
6.08p |
|
|
|
7.01p |
|
|
|
Year ended 31 December 2011 |
|
Reported results |
Amortisation of acquired |
Impairment |
Contingent liability revaluation |
Fair value adjustments to minority |
Headline & segmental results |
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
REVENUE |
|
153,133 |
- |
- |
- |
- |
153,133 |
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT |
|
14,093 |
714 |
902 |
(310) |
- |
15,399 |
|
Share of results of associates |
|
115 |
- |
- |
- |
- |
115 |
|
Finance income |
|
2,199 |
- |
- |
- |
(1,781) |
418 |
|
Finance cost |
|
(370) |
- |
- |
- |
- |
(370) |
|
PROFIT BEFORE TAXATION
|
16,037 |
714 |
902 |
(310) |
(1,781) |
15,562 |
|
|
Taxation |
|
(4,589) |
(206) |
- |
- |
- |
(4,795) |
|
PROFIT FOR THE YEAR |
|
11,448 |
508 |
902 |
(310) |
(1,781) |
10,767 |
|
Non controlling interests |
|
(1,849) |
- |
- |
- |
- |
(1,849) |
|
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE GROUP |
|
||||||
|
|
|
9,599 |
508 |
902 |
(310) |
(1,781) |
8,918 |
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER SHARE |
|
||||||
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares (thousands) |
|
62,355 |
- |
- |
- |
- |
62,355 |
|
BASIC EPS |
|
15.39p |
- |
- |
- |
- |
14.30p |
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
||||||
|
Weighted average number of shares (thousands) as above |
|
|
|
|
|
|
|
|
62,355 |
- |
- |
- |
- |
62,355 |
||
|
Add |
|
|
|
|
|
|
|
|
- UK growth shares |
|
1,102 |
- |
- |
- |
- |
1,102 |
|
- Options |
|
128 |
- |
- |
- |
- |
128 |
|
- LTIP options 2011 |
|
111 |
- |
- |
- |
- |
111 |
|
Total |
|
63,696 |
|
|
|
|
63,696 |
|
DILUTED EARNINGS PER SHARE |
15.07p |
|
|
|
|
14.00p |
|
5. SEGMENTAL INFORMATION
This segmental information is reconciled to the statutory results in Note 4.
|
Six months to 30 June 2012 |
|
UK |
Europe |
Middle East & Africa |
Asia & Australasia |
Americas |
Clear |
Total |
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Revenue |
|
36,315 |
7,825 |
2,800 |
26,999 |
3,193 |
5,714 |
82,846 |
|
|
|
|
|
|
|
|
|
|
|
Operating profit excluding group costs |
7,512 |
1,115 |
330 |
1,880 |
(445) |
489 |
10,881 |
|
|
Group costs |
|
(2,039) |
(36) |
- |
(112) |
(39) |
- |
(2,226) |
|
Operating profit |
|
5,473 |
1,079 |
330 |
1,768 |
(484) |
489 |
8,655 |
|
Share of result of associate |
75 |
(93) |
31 |
- |
- |
- |
13 |
|
|
Finance income |
|
65 |
11 |
6 |
82 |
30 |
2 |
196 |
|
Finance costs |
|
(19) |
(31) |
(3) |
(48) |
(54) |
- |
(155) |
|
Profit before taxation |
|
5,594 |
966 |
364 |
1,802 |
(508) |
491 |
8,709 |
|
Taxation |
|
(1,315) |
(386) |
(108) |
(768) |
82 |
(128) |
(2,623) |
|
Profit for the period |
|
4,279 |
580 |
256 |
1,034 |
(426) |
363 |
6,086 |
|
Non controlling interest |
|
(518) |
(178) |
(121) |
(381) |
116 |
1 |
(1,081) |
|
Profit attributable to equity holders of the group |
3,761 |
402 |
135 |
653 |
(310) |
364 |
5,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEADLINE BASIC EPS |
|
|
|
|
7.95p |
|||
|
|
|
|
|
|
|
|
|
|
|
COSTS INCLUDED IN OPERATING PROFIT
PROFIT |
|
|
|
|||||
|
Depreciation and amortisation of software |
536 |
137 |
71 |
299 |
53 |
87 |
1,183 |
|
|
Share option charges |
|
378 |
- |
- |
- |
- |
- |
378 |
|
OFFICE LOCATION |
London |
Paris
|
Beirut
|
Sydney Melbourne Auckland Wellington |
Los Angeles |
London Amsterdam New York |
|
|
|
Six months to 30 June 2011 |
|
UK |
Europe |
Middle East & Africa |
Asia & Australasia |
Americas |
Clear |
Total |
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Revenue |
|
31,366 |
6,609 |
1,137 |
23,641 |
2,978 |
6,175 |
71,906 |
|
|
|
|
|
|
|
|
|
|
|
Operating profit excluding group costs |
6,520 |
851 |
(26) |
1,335 |
(96) |
1,231 |
9,815 |
|
|
Group costs |
|
(1,952) |
(34) |
- |
(159) |
(34) |
- |
(2,179) |
|
Operating profit |
|
4,568 |
817 |
(26) |
1,176 |
(130) |
1,231 |
7,636 |
|
Share of result of associate |
- |
118 |
(13) |
- |
- |
- |
105 |
|
|
Finance income |
|
95 |
5 |
2 |
66 |
- |
3 |
171 |
|
Finance costs |
|
(97) |
(28) |
- |
(31) |
(15) |
- |
(171) |
|
Profit before taxation |
|
4,566 |
912 |
(37) |
1,211 |
(145) |
1,234 |
7,741 |
|
Taxation |
|
(1,381) |
(219) |
(16) |
(441) |
(14) |
(407) |
(2,478) |
|
Profit for the period |
|
3,185 |
693 |
(53) |
770 |
(159) |
827 |
5,263 |
|
Non controlling interest |
|
(286) |
(167) |
43 |
(352) |
(3) |
(64) |
(829) |
|
Profit attributable to equity holders of the group |
2,899 |
526 |
(10) |
418 |
(162) |
763 |
4,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEADLINE BASIC EPS |
|
|
|
|
7.15p |
|||
|
|
|
|
|
|
|
|
|
|
|
COSTS INCLUDED IN OPERATING PROFIT
PROFIT |
|
|
|
|||||
|
Depreciation and amortisation of software |
375 |
131 |
35 |
320 |
29 |
61 |
951 |
|
|
Share option charges |
|
402 |
- |
- |
59 |
2 |
- |
463 |
|
OFFICE LOCATION |
London |
Paris
|
Beirut
|
Sydney Melbourne Auckland Wellington |
Los Angeles |
London Amsterdam New York |
|
|
|
Year ended |
UK |
Europe |
Middle East & Africa |
Asia and Australasia |
Americas |
Clear |
Total |
|
|||||||
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|||||||
|
Revenue |
|
66,974 |
14,540 |
2,987 |
49,700 |
6,736 |
12,196 |
153,133 |
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
Operating profit excluding group costs |
13,031 |
2,053 |
276 |
2,358 |
77 |
2,016 |
19,811 |
||||||||
|
Group costs |
|
(4,175) |
(70) |
- |
(79) |
(88) |
- |
(4,412) |
|||||||
|
Operating profit |
8,856 |
1,983 |
276 |
2,279 |
(11) |
2,016 |
15,399 |
||||||||
|
Share of results of associates |
(13) |
93 |
35 |
- |
- |
- |
115 |
||||||||
|
Finance income |
|
192 |
17 |
4 |
176 |
25 |
4 |
418 |
|||||||
|
Finance cost |
|
(223) |
(63) |
(3) |
(52) |
(29) |
- |
(370) |
|||||||
|
Profit before taxation |
|
8,812 |
2,030 |
312 |
2,403 |
(15) |
2,020 |
15,562 |
|||||||
|
Taxation |
|
(2,768) |
(706) |
118 |
(883) |
29 |
(585) |
(4,795) |
|||||||
|
Profit for the year |
|
6,044 |
1,324 |
430 |
1,520 |
14 |
1,435 |
10,767 |
|||||||
|
Non controlling interests |
|
(618) |
(443) |
(113) |
(541) |
(4) |
(130) |
(1,849) |
|||||||
|
Profit attributable to equity holders of the group |
5,426 |
881 |
317 |
979 |
10 |
1,305 |
8,918 |
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
HEADLINE BASIC EPS |
|
|
|
|
|
14.30p |
|||||||||
|
Costs included in operating profit: |
|
|
|
|
|
||||||||||
|
Depreciation |
(882) |
(215) |
(69) |
(584) |
(57) |
(122) |
(1,929) |
||||||||
|
Amortisation of software |
(56) |
(48) |
(8) |
(56) |
(20) |
- |
(188) |
||||||||
|
Share option charges |
|
(1,048) |
- |
- |
(37) |
(2) |
- |
(1,087) |
|||||||
|
OFFICE LOCATION |
London |
Paris Berlin Madrid Geneva Milan |
Beirut Cape Town Jo'burg
|
Sydney Melbourne Auckland Wellington New Delhi Mumbai Kuala Lumpur Hong Kong Beijing Shanghai Tokyo |
Los Angeles São Paulo New York |
London Hong Kong New York Sydney Singapore |
|
||||||||
.
6. FINANCE INCOME
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Bank interest receivable |
|
174 |
|
|
|
150 |
|
401 |
|
Other interest receivable |
|
22 |
|
|
|
21 |
|
17 |
|
Total interest receivable |
|
196 |
|
|
|
171 |
|
418 |
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustments to minority shareholder put option liabilities |
|
- |
|
|
|
- |
|
1,781 |
|
Total finance income |
|
196 |
|
|
|
171 |
|
2,199 |
7. FINANCE COSTS
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
Finance costs |
||||||||
|
|
|
|
|
|
|
|
|
|
|
Bank interest payable |
|
(134) |
|
|
|
(146) |
|
(369) |
|
Other interest payable |
|
(21) |
|
|
|
(25) |
|
(1) |
|
Total interest payable |
|
(155) |
|
|
|
(171) |
|
(370) |
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustments to minority shareholder put option liabilities |
|
(2,438) |
|
|
|
(538) |
|
- |
|
Total |
|
(2,593) |
|
|
|
(709) |
|
(370) |
8. TAXATION
Income tax expenses are recognised based on management's estimate of the average annual income tax expected for the full financial year.
The estimated effective annual tax rate for the period to 30 June 2012 is 42.6% (30 June 2011: 33.9%).
The estimated headline effective annual tax rate (excluding associates) used for the period to 30 June 2012 is 30.2% (30 June 2011: 32.5%).
The decrease in the headline tax rate utilisation of historic tax losses and the reduction in UK tax rates.
The difference between the headline and statutory tax rates is caused by a difference in the profit before tax due to the impact of fair value adjustments to minority shareholder put option liabilities has no effect on the tax charge.
9. DIVIDENDS
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
2010 final dividend 3.03p (2009: Nil) |
|
- |
|
|
|
- |
|
1,895 |
|
2011 interim dividend 1.00p (2010: 0.87p) |
|
- |
|
|
|
- |
|
628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
2,523 |
The directors propose an interim dividend of 1.10p per share (2011: 1.00p per share) payable on 16 November 2012 to shareholders who are on the register at 2 November 2012. This interim dividend, amounting to £697k (2011: £628k) has not been recognised as a liability in this half-yearly financial report.
10. CASH GENERATED FROM OPERATIONS
|
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
82,846 |
|
|
|
71,906 |
|
153,133 |
|
Operating cost |
|
|
(74,494) |
|
|
|
(64,404) |
|
(139,040) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit |
|
|
8,352 |
|
|
|
7,502 |
|
14,093 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
Depreciation of plant and equipment |
|
|
1,114 |
|
|
|
885 |
|
1,929 |
|
Losses on sale of plant and equipment |
|
|
- |
|
|
|
- |
|
38 |
|
Impairment and amortisation on acquired intangible assets |
|
|
303 |
|
|
|
292 |
|
714 |
|
Impairment of Goodwill |
|
|
- |
|
|
|
- |
|
902 |
|
Amortisation of capitalised software intangible assets |
|
|
69 |
|
|
|
66 |
|
188 |
|
Non-cash share based incentive plans |
|
|
378 |
|
|
|
456 |
|
1,087 |
|
Operating cash flow before movements in working capital and provisions |
|
|
10,216
|
|
|
|
9,201
|
|
18,951 |
|
Decrease / (increase) in trade and other receivables |
|
|
15,212 |
|
|
|
12,599 |
|
(10,250) |
|
Decrease in trade and other payables |
|
|
(19,671) |
|
|
|
(31,562) |
|
(9,775) |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (outflow) / inflow from operating activities |
|
|
5,757 |
|
|
|
(9,762) |
|
(1,074) |
|
|
|
|
|
|
|
|
|
|
|
11. CASH CONSUMED BY ACQUISITIONS
|
|
|
|
Six months |
|
|
|
Six months |
|
Year |
|
|
|
|
£000 |
|
|
|
£000 |
|
£000 |
|
Acquisitions |
|
|
|
|
|
|
|
|
|
|
Initial cash consideration paid |
|
|
(1,743) |
|
|
|
(1,598) |
|
(1,773) |
|
Cash and cash equivalents acquired |
|
|
23 |
|
|
|
- |
|
- |
|
Total payments made in the period relating to acquisitions |
|
|
(1,720) |
|
|
|
(1,598) |
|
(1,773) |
|
|
|
|
|
|
|
|
|
|
|
This information is provided by RNS
The company news service from the London Stock Exchange
END