RNS Number : 3213F
Mission Group PLC (The)
24 September 2024
 

24 September 2024

THE MISSION GROUP plc

 

("MISSION", "the Group") 

 

INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2024

Resilient organic revenue growth despite challenging trading environment

New business momentum underpins full year outlook, with trading in line with revenue and headline operating profit expectations

 

MISSION Group plc (AIM: TMG), creator of Work That CountsTM, comprising a group of digital marketing and communications Agencies, is pleased to announce its interim results for the six months ended 30 June 2024 ("the period" or "H1").

 

FINANCIAL HIGHLIGHTS

 

·     

Resilient revenue performance across most segments combined with diligent cost control delivered a robust headline operating profit outcome for the period, despite an unpredictable trading environment.

 


Six months ended 30 June

2024

2023

Continuing operations**

%

2023

All operations

%


Revenue

£42.2m

£41.4m

+2%

£41.8m

+1%


Headline Operating Profit*

£2.6m

£2.5m

+4%

£2.0m

+33%


Headline Profit Before Tax*

£1.3m

£1.6m

-19%

£1.0m

+27%


Reported Profit Before Tax      

£0.0m

£0.6m


£0.1m

-30%


Headline Earnings Per Share (pence)*

1.0

1.3

-23%

0.8

+22%


Headline Diluted Earnings Per Share * (pence)

1.0

 

 

1.3

-23%

0.8

 

 

+22%

 

 

 

·     

Net bank debt of £19.6m with £4.3m HMRC Time To Pay creditor repaid in full during the period (31 December 2023 equivalent: £19.7m being £15.4m net bank debt + £4.3m HMRC Time To Pay creditor).

·     

As a result of this, total debt*** reduced to £24.0m as at 30 June 2024 (£25.1m as at 31 December 2023).

·     

 Successful refinancing of the Group's debt facilities with long standing lender NatWest.



*Headline results are calculated before start-up costs, acquisition adjustments, goodwill and business impairment, bank refinancing, equity placing and restructuring costs.

** Continuing activities in 2023 exclude the results of the Group's 80% interest in Pathfindr which was sold in December 2023.

*** Total debt includes net bank debt and outstanding acquisitions obligations and any outstanding HMRC Time To Pay creditors.

     

 

 

 

 

 

BUSINESS HIGHLIGHTS

 

·     

H1 performance is in line with Board expectations, driven by organic revenue growth across the Group, particularly MISSION's Property and Sports & Entertainment Agencies.

 

·     

Notable new Client wins during the period include Mastercard, BNP Paribas, FatFace, GoHenry, Okta, Popeyes, England Cricket Board, Guinness Homes, Fonterra and McCarthy Stone.

 

·     

MISSION's global sports Agency, Influence Sports & Media, part of Mongoose, will open an office in Saudi Arabia to support significant new Client wins in the country. Mongoose has also been appointed as Global Sponsorship sales Agency for Formula E and brokered Southampton F.C.'s sponsorship with P&O Cruises.

 

·     

Bray Leino Events has won the contract for full operational service provision of the UK Pavilion at the upcoming Osaka World Trade Expo (Expo 2025) in Japan, comprising over 130 individual events, retail and hospitality.

 

·     

MISSION continues to make good progress against the Value Restoration Plan with the vast majority of the approximately £5m of annualised projected profit improvements already in place for the year. Planned cost savings and operating efficiency improvements are in total H2 weighted, but tracking to expectations for full delivery by the end of 2024.

 

·     

The Group continues to progress discussions on options to deleverage its balance sheet. A further update will be provided when appropriate.

 

OUTLOOK

 

·     

Post period-end developments underpin confidence for full year outlook and include significant additional Client wins comprising new, multinational US Technology Clients, alongside household brands including Pizza Hut, Danske Bank, Bensons for Beds and Bugatti.

 

·     

As in previous years, the Group expects the majority of its profit to be generated in the second half of the year.

 

·     

The Board remains cautiously optimistic that the Group is on track to deliver against full year revenue and headline operating profit expectations but is mindful of the continued unpredictable trading environment.

 

 

David Morgan, MISSION's Non-Executive Chair, commented: "Despite an unpredictable trading environment in the first half of the year, the Group has remained firmly focussed on the delivery of profit targets, deleveraging and strengthening the balance sheet.

 

"The creativity of our Agencies demonstrates our commitment to delivering work that underpins real business growth and in July we were pleased to update the market, reporting positive ongoing momentum across the Group as we entered the second half of the year. These latest strategic new Client wins announced today reflect the growing strength of MISSION's capabilities and underpin our confidence in the long-term outlook. I'm particularly pleased to announce our new office in Saudi Arabia to support our new Clients in the country, which also positions us well for wider opportunities in the region.

 

"We look forward to announcing further new Client wins in due course."

 

 

 

ENQUIRIES:  

 

Cat Davis - Group Marketing Director 

E: cdavis@themission.co.uk 

The MISSION Group PLC                                                                      Via Houston

 

Simon Bridges / Andrew Potts / Harry Rees 

E: missiongroup@cgf.com  

Canaccord Genuity Limited (Nominated Adviser and Broker)           020 7523 8000

 

Kate Hoare / Alexander Clelland / India Spencer 

E: mission@houston.co.uk 

Houston PR                                                                                          0204 529 0549

 

NOTES TO EDITORS  

   

The MISSION Group Plc. is The Brand Performance Group.  

 

Delivering measurable, results-driven campaigns as the preferred creative partner for real business growth. We offer top-tier agencies, strategic specialisms and global reach delivering outstanding performance for brands. We call it Work That Counts™ www.themission.co.uk

 

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

OVERVIEW

 

MISSION has continued to make good progress in the first half of 2024 against our key priorities. Whilst the wider trading environment has remained unpredictable, with ongoing macro-economic uncertainty and the early timing of the UK general election continuing to manifest general client caution throughout the period, our entrepreneurial Agencies have remained focussed on our plans to drive value creation for all our stakeholders.

 

Across the Group we have continued to leverage the investments made in previous years to enhance and evolve MISSION's service offering and capabilities. This underpinned success on several significant new business mandates in the first half of the year and has generated encouraging new business momentum as we enter H2.

 

The Group is encouraged to report like for like revenue growth of 2 percent to £42.2m (2023: £41.4m) for the period. Headline operating profit of £2.6m (2023: £2.0m reported, £2.5m from continuing operations), was driven by revenue growth across the majority of Group segments, particularly the Property and Sports & Entertainment segments, as well as profitable recovery in the Technology and Mobility segment from last year's slowdown in the US market.

 

Headline reported profit before tax of £1.3m (2023: £1.0m reported, £1.6m from continuing operations) reflects the impact of both higher debt levels when compared to last year (increase in interest of £0.2m) and also the full period impact of notional interest charges against new property leases (£0.1m).

 

Value Restoration Plan

 

Significant progress has been made on the Group's Value Restoration Plan ("VRP") announced on 17 January, 2024. The cost reduction elements of the Value Restoration Plan ("VRP") of £3.6m have been successfully implemented and the benefits are being realised across the year. These included £2m from headcount reductions as reported at the full year 2023 results, supplemented by further savings of £1.6m of central expenditure savings including staff costs, property and recruitment charges. The planned operating efficiency elements of the VRP of £1.2m are also tracking to expectations for delivery by the end of 2024. The H1 2024 cost savings benefit from the VRP has been c£1.6m, with the balance expected to benefit H2.

 

On 28 March 2024, the Group was pleased to announce the successful refinancing of its previous debt facility with long-standing lender NatWest. The new NatWest debt facility is a £20m Revolving Credit Facility, and a £9m overdraft facility. On 1 July 2024, following continued disciplined cash management, the Group and NatWest agreed to reduce the overdraft facility limit to £7m. Alongside the refinancing the Group also continues to progress discussions regarding options to deleverage its balance sheet. A further update will be provided when appropriate.

 

Net bank debt stood at £19.6m as of 30 June 2024 (30 June 2023: £14.9m) versus £15.4m on 31 December 2023. The increase in net debt reflects the settlement of the HMRC Time To Pay debt of £4.3m as at 31 December 2023 which was fully repaid in the period. It is important to note that given the second half weighting of the Group's profits and a number of one-off expenses incurred in the first half year relating to refinancing and defending the unsolicited approach from Brave Bison, the Group would expect to see a reduction in the net debt position in the second half of the financial year.

 

Total debt has been reduced by £1.1m over the period to stand at £24.0m on 30 June 2024 (30 June 2023: £20.0m) in comparison with £25.1m on 31 December 2023. This reduction has been achieved alongside the settlement of £1.1m of outstanding acquisition obligations from prior years in the first half of the year of which £0.6m were in cash) and the settlement of the £4.3m Time To Pay creditor.

 

Performance and progress

 

MISSION has reported like for like revenue growth of 2%, guided by strong performances across most Group segments, particularly in our Property and Sports & Entertainment segments. As previously mentioned, the Group has benefited from the continued recovery of the Technology and Mobility segment, with profits improving by £0.4m on H1 2023.  This partially offset the lacklustre performance of the Group's Consumer & Lifestyle and Business & Corporate segments for the period, where profitability was impacted by the restrictions on Government spending in May and June as a result of the earlier than expected timing of the UK general election. Our Health & Wellness segment experienced a slower pick up in trading than forecast and there was the timing impact of a contract in our Sports & Entertainment segment that was secured after the end of H1.

 

Additional Client wins secured across the business throughout the period include Okta, Popeyes, FatFace, GoHenry, Mastercard, BNP Paribas, England Cricket Board, Guinness Homes, Fonterra and McCarthy Stone.

 

Since the period end, the Group has secured a number of notable new business wins with the robust new business pipeline for H2 demonstrating encouraging momentum despite broader macro-economic uncertainty and a challenging trading environment.

 

Alongside a series of new high-quality Client wins with major US Technology firms, the Group has been awarded a prestigious and significant Events assignment for the UK Pavilion at EXPO2025 in Osaka, Japan. This is a full operational services contract that will commence in 2024 and comprises of over 130 individual events, retail and hospitality that will be led by Bray Leino Events.

 

MISSION's global sports Agency, Influence Sports & Media, part of Mongoose, has also won a significant new Client in Saudi Arabia and will open an office in Jeddah later this year to support the client and to leverage its expertise to capitalise on opportunities across the region. Mongoose has also been appointed as Global Sponsorship sales Agency for Formula E and brokered Southampton F.C.'s shirt sponsorship with P&O Cruises.

 

 

Rejection of unsolicited, conditional proposal from Brave Bison plc

 

On 29 April 2024, the Board of MISSION received an unsolicited conditional proposal regarding a possible offer by Brave Bison for the Group. This proposal, together with a subsequent revised proposal, was unanimously rejected following consultation with its financial adviser and certain shareholders. Brave Bison confirmed on 9 June 2024 that it did not intend to make an offer.

 

MISSION believes this was an opportunistic approach that significantly undervalued the Group and its prospects, as well as being dilutive to its shareholders and resulted in exceptional costs which ultimately further impacted profitability and debt reduction. As previously announced, the Board of MISSION is open to proposals that it believes would enhance shareholder value and deliver benefits to MISSION's shareholders. The Board of MISSION did not consider the proposals to meet those criteria. The Board of MISSION remains confident in the Group's standalone prospects.

 

MISSION's focus remains firmly on deleveraging, restoring balance sheet strength and delivering performance that achieves our profit targets, demonstrates the creativity of our Agencies, and shows our commitment to delivering work that underpins real business growth.

 

 

FINANCIAL PERFORMANCE

 

Billings and Revenue

Turnover ("billings") for the six months ended 30 June 2024 increased by 2% to £94.4m (2023: £92.9m) while operating income ("revenue") increased by 1% to £42.2m (2023: £41.8m).

 

Profit, Margins and Earnings Per Share

The increased revenues demonstrate good progress. Firm, but future-focussed cost control alongside a continued commitment to sharing infrastructure through the MISSION Made and Shared Services initiatives, has enabled the Group to deliver an operating profit that is ahead of the prior year comparison.

 

Headline operating profits increased by 4% to £2.6m (H1 2023: £2.0m reported, £2.5m from continuing operations). Headline operating margins increased to 6.2% (H1 2023: 4.7%, 6.1% from continuing operations). Continuing activities in 2023 exclude the results of the Group's 80% interest in Pathfindr which was sold in December 2023.  

 

Financing costs increased to £1.5m (H1 2023: £1.0m), reflecting both a higher average level of debt in the period and also the full period impact of interest on new property leases. Financing costs for H2 are expected to remain at similar levels to H1 reflecting the net debt position and the effect of the accounting treatment of new property leases. Headline profit before tax increased to £1.3m (H1 2023: £1.0m).

 

Adjustments to headline profits before tax in the first half of 2024, at £1.2m, were higher than the prior year comparable period (H1 2023: £0.9m). After these adjustments, reported profit before tax was £0.0m (H1 2023: £0.1m).

 

The Group estimates an effective tax rate on headline profits before tax of 25% (H1 2023: 24%), resulting in an increase in headline earnings to £0.9m for the six months (H1 2023: £0.8m) and reported profit after tax of £0.0m (H1 2023: £0.0m). Fully diluted EPS decreased to a loss of 0.1 pence (H1 2023: 0.0 pence), while headline diluted EPS increased to 1.0 pence (H1 2023: 0.8 pence).

 

 

Balance Sheet and Cash Flow

The key balance sheet ratio measured and monitored by the Board is the ratio of debt to headline EBITDA ("leverage ratio"). The Group closed the half year at 2.7x (30 June 2023: 1.7x, 31 December 2023: 2.0x). Whilst higher than prior comparators, the ratio offers significant headroom against the facility limit of 3.5x for the period.

 

The Board also monitors the ratio of total debt, including remaining acquisition obligations, to EBITDA and this ratio has increased to 3.2x (30 June 2023: 2.2x, 31 December 2023: 2.7x). Again, there is significant headroom against the facility limit of 4.0x for the period.

 

The headroom afforded by the covenant tests for the period ensures that the Group will avoid the highest level of interest rates for the period.

 

The Group spent £nil on acquisitions during the period (2023 £0.3m) and a total of £1.1m of acquisition obligations from prior years were settled in the first half of the year of which £0.6m were in cash (30 June 2023: £0.4m all of which were cash). After adjustments to estimated future contingent consideration payments the total estimated acquisition liability at 30 June 2024 totalled £4.4m (30 June 2023: £5.1m). Of this £0.2m is due for payment in the second half of 2024.

 

Capital expenditures have been strictly controlled and as such spend of £0.3m is reduced on H1 2023 (£2.0m).

 

Trade and other receivables increased marginally against last year to £54.3m (30 June 2023: £53.7m), while trade and other payables decreased slightly to £51.2m (30 June 2023: £52.2m). These movements, alongside an increase in stock of £0.5m and increased lease payables of £0.7m have driven the increase in net working capital in comparison to June 2023.

 

Consequently, the Group's net bank debt on 30 June 2024 of £19.6m has increased against the positions on both 30 June 2023 (£14.9m) and 31 December 2023 (£15.4m). However, the increase in net debt since the start of the new financial year ultimately reflects the settlement of the HMRC Time To Pay creditor which stood at £4.3m as at 31 December 2023 and has now been fully repaid.

 

As a result, total debt (being net bank debt plus outstanding acquisition obligations) closed at £24.0m (30 June 2023: £20.0m), down from £25.1m on 31 December 2023.

 

Dividend

The Board has made the decision to pause dividend payments alongside other major capital allocations until balance sheet strength is restored and net debt is reduced (2023: 0 pence per share). The Board will keep this decision under regular review.

 

OUTLOOK

 

MISSION has a significant second-half weighting with respect to profitability. Post period-end developments underpin confidence for full year outlook and include significant additional Client wins. Revenue growth is anticipated across all the Group's sectors with monthly run rates from the Technology and Mobility segment being monitored carefully and continuing to improve. The Board remains cautiously optimistic that the Group is on track to deliver against full year revenue and headline operating profit expectations but is mindful of the continued unpredictable trading environment.


Condensed Consolidated Income Statement for the six months ended 30 June 2024

 

 


 

 

 

Six months to

 

Continuing operations

Six months to

 

Discontinued operations

Six months to

 

 

Total

Six months to

 

Continuing operations Year ended

 

Discontinued operations

Year ended

 

 

Total

Year ended

 


30 June

2024*

30 June

2023

30 June

2023

30 June 2023

31 December 2023

31 December 2023

31 December 2023

 

 

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Audited

Audited

 

Note

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 







TURNOVER

2

94,392

92,480

428

92,908

195,450

438

195,888

 

 

 







Cost of sales

 

(52,160)

(51,032)

(78)

(51,110)

(109,130)

(208)

(109,338)

 

OPERATING INCOME

2

 

42,232

 

41,448

 

350

 

41,798

 

86,320

 

230

 

86,550


 

 







Headline operating expenses

 

(39,608)

(38,925)

(907)

(39,832)

(79,840)

(1,668)

(81,508)

HEADLINE OPERATING PROFIT / (LOSS)

 

 

2,624

 

2,523

 

(557)

 

1,966

 

6,480

 

(1,438)

 

5,042

 


 







Start-up costs

3

(86)

(512)

-

(512)

(1,818)

-

(1,818)

Acquisition adjustments

4

(626)

(418)

-

(418)

(1,652)

-

(1,652)

Bank refinancing and equity raise costs

 

(242)

-

-

-

(475)

-

(475)

Goodwill, business and intangible impairment

3

-

-

-

-

(10,409)

-

(10,409)

Restructuring costs

3

(203)

-

-

-

(715)

-

(715)

Profit on sale of Pathfindr

 

-

-

-

-

-

308

308

 

OPERATING PROFIT / (LOSS)

 

 

1,467

 

1,593

 

(557)

 

1,036

 

(8,589)

 

(1,130)

 

(9,719)


 

 







Share of results of associates and joint ventures

 

 

75

 

75

 

-

 

75

 

150

 

-

 

150

 

PROFIT / (LOSS) BEFORE INTEREST AND TAXATION

 

 

 

1,542

 

 

1,668

 

 

(557)

 

 

1,111

 

 

(8,439)

 

 

(1,130)

 

 

(9,569)


 

 







Net finance costs

5

(1,494)

(1,042)

-

(1,042)

(2,472)

-

(2,472)

 

PROFIT / (LOSS) BEFORE TAXATION

 

 

 

48

 

 

626

 

 

(557)

 

 

69

 

 

(10,911)

 

 

(1,130)

 

 

(12,041)

 

 

 







Taxation

6

(86)

(166)

131

(35)

(225)

387

162

 

(LOSS) / PROFIT FOR THE PERIOD

 

 

(38)

 

460

 

(426)

 

34

 

(11,136)

 

(743)

 

(11,879)

 

 

 







Attributable to:

 

 







Equity holders of the parent

 

(88)

429

(426)

3

(11,283)

(743)

(12,026)

Non-controlling interests

 

50

31

-

31

147

-

147


 

(38)

460

(426)

34

(11,136)

(743)

(11,879)


 

 







Basic earnings per share (pence)

7

(0.1)

0.5

(0.5)

0.0

(12.6)

(0.8)

(13.4)

Diluted earnings per share (pence)

7

(0.1)

0.5

(0.5)

0.0

(12.6)

(0.8)

(13.4)

Headline basic earnings per share (pence)

7

 

1.0

 

1.3

 

(0.5)

 

0.8

 

3.1

 

(1.2)

 

1.9

Headline diluted earnings per share (pence)

 

7

 

1.0

 

1.3

 

(0.5)

 

0.8

 

3.1

 

(1.2)

 

1.9

 

 

*All results for 2024 relate to continuing operations

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Comprehensive Income for the six months ended 30 June 2024

 

 

 

 

Six months to

 

Continuing operations

Six months to

 

Discontinued operations

Six months to

 

 

Total

Six months to

 

Continuing operations Year ended

 

Discontinued operations

Year ended

 

 

Total

Year ended

 

30 June

2024

30 June

2023

30 June

2023

30 June 2023

31 December 2023

31 December 2023

31 December 2023

 

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Audited

Audited

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 







(LOSS) / PROFIT FOR THE PERIOD

(38)

460

(426)

34

(11,136)

(743)

(11,879)

 

 







Other comprehensive income - items that may be reclassified separately to profit or loss:

 







Exchange differences on translation of foreign operations

(93)

(153)

-

(153)

(271)

-

(271)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

 

(131)

 

307

 

(426)

 

(119)

 

(11,407)

 

(743)

 

(12,150)


 







Attributable to:

 







Equity holders of the parent

(181)

267

(426)

(159)

(11,561)

(743)

(12,304)

Non-controlling interests

50

40

-

40

154

-

154


(131)

307

(426)

(119)

(11,407)

(743)

(12,150)

 

 

 

 

 




Condensed Consolidated Balance Sheet as at 30 June 2024  

 

 

 

As at  

As at  

As at

 

 

30 June 2024

30 June 2023

31 December 2023

 

 

Unaudited

Unaudited

Audited

 

Note

£'000

£'000

£'000

FIXED ASSETS

 

 



Intangible assets

8

90,223

101,704

90,628

Property, plant and equipment

 

2,951

3,599

3,209

Right of use assets

9

15,534

19,033

16,432

Investments, associates and joint ventures

 

 

662

 

512

 

587

 

 

109,370

124,848

110,856

CURRENT ASSETS

 

 



Stock

 

2,928

2,400

2,981

Trade and other receivables

 

54,280

53,732

44,676

Corporation tax receivable

 

856

75

447

Cash and short term deposits

 

226

5,096

4,632

 

 

58,290

61,303

52,736

CURRENT LIABILITIES

 

 



Trade and other payables


(51,207)

(52,219)

(45,388)

Bank loans

10

(21)

(23)

(21)

Acquisition obligations

11

(3,508)

(1,873)

(1,745)



(54,736)

(54,115)

(47,154)

NET CURRENT ASSETS

 

3,554

7,188

5,582

TOTAL ASSETS LESS CURRENT LIABILITIES

 

112,924

132,036

116,438

 

NON CURRENT LIABILITIES

 

 

 

 

 


Bank loans

10

(19,833)

(19,960)

(19,973)

Lease liabilities

    9

(15,047)

(18,226)

(15,768)

Acquisition obligations

11

(890)

(3,180)

(3,720)

Deferred tax liabilities

 

(433)

(704)

(524)

 

 

(36,203)

(42,070)

(39,985)

NET ASSETS

 

76,721

89,966

76,453

 

 

 



CAPITAL AND RESERVES

 

 



Called up share capital

 

9,224

9,102

9,102

Share premium account

 

46,081

45,928

45,928

Own shares

 

(217)

(983)

(942)

Share-based incentive reserve

 

1,107

1,069

1,107

Foreign currency translation reserve

 

(981)

(772)

(888)

Retained earnings

 

21,380

35,531

21,967

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

 

 

76,594

 

89,875

 

76,274

Non-controlling interests

 

127

91

179

TOTAL EQUITY

 

76,721

89,966

76,453



 


Condensed Consolidated Cash Flow Statement for the six months ended 30 June 2024

 


 

 

 

Six months to

 

Continuing operations

Six months to

 

Discontinued operations

Six months to

 

 

Total

Six months to

 

Continuing operations Year ended

 

Discontinued operations

Year ended

 

 

Total

Year ended

 


30 June

2024

30 June

2023

30 June

2023

30 June 2023

31 December 2023

31 December 2023

31 December 2023

 

 

Unaudited

Unaudited

Unaudited

Unaudited

Audited

Audited

Audited

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 


 

 

 

 





 

Operating profit / (loss)

 

1,467

1,593

(557)

1,036

(8,589)

(1,130)

(9,719)

Depreciation, amortisation and impairment charges

 

 

2,346

 

2,192

 

15

 

2,207

 

15,343

 

31

 

15,374

Increase in the fair value of contingent consideration

 

 

48

 

22

 

-

 

22

 

434

 

-

 

434

Profit on sale of Pathfindr Ltd

 

-

-

-

-

-

(308)

(308)

(Profit) / loss on disposal of property, plant and equipment and software and intellectual property

 

 

-

 

(1)

 

-

 

(1)

 

94

 

-

 

94

Non-cash charge for share options, growth shares and shares awarded, net of awards settled in cash

 

 

-

 

40

 

-

 

40

 

79

 

-

 

79

Increase in receivables

 

(9,604)

(11,735)

(374)

(12,109)

(2,945)

(67)

(3,012)

Decrease / (increase) in stock

 

53

(172)

(43)

(215)

(1,125)

(43)

(1,168)

Increase / (decrease) in payables

 

5,313

10,731

797

11,528

5,803

(1,277)

4,526

OPERATING CASH FLOWS

 

(377)

2,670

(162)

2,508

9,094

(2,794)

6,300

Net finance costs paid

 

(1,628)

(1,063)

-

(1,063)

(2,471)

-

(2,471)

Tax paid

 

(586)

(1,141)

88

(1,053)

(2,411)

637

(1,774)

Net cash inflow / (outflow) from operating activities

 

(2,591)

466

(74)

392

4,212

(2,157)

2,055

INVESTING ACTIVITIES

 

 







Proceeds on disposal of property, plant and equipment

 

 

7

 

5

 

-

 

5

 

2

 

-

 

2

Purchase of property, plant and equipment

 

 

(297)

 

(2,020)

 

(1)

 

(2,021)

 

(2,340)

 

(3)

 

(2,343)

Investment in software and product development

 

 

(8)

 

(3)

 

-

 

(3)

 

(111)

 

-

 

(111)

Acquisitions of, or investments in, businesses

 

 

-

 

(397)

 

-

 

(397)

 

(397)

 

-

 

(397)

Payment relating to acquisitions made in prior years

 

 

(614)

 

(393)

 

-

 

(393)

 

(393)

 

-

 

(393)

Cash acquired with subsidiaries

 

-

71

-

71

71

-

71

Proceeds on disposal of Pathfindr

 

-

-

-

-

-

1,050

1,050

Costs of disposal of Pathfindr

 

-

-

-

-

-

(187)

(187)

Net cash (outflow) / inflow from investing activities

 

(912)

(2,737)

(1)

(2,738)

(3,168)

860

(2,308)

FINANCING ACTIVITIES

 

 







Dividends paid

 

-

-

-

-

(1,495)

-

(1,495)

Dividends paid to non-controlling interests

 

(102)

(130)

-

(130)

(156)

-

(156)

Payment of lease liabilities

 

(698)

(913)

-

(913)

(1,820)

-

(1,820)

(Repayment of) / increase in bank loans

 

(10)

2,485

-

2,485

2,474

-

2,474

Net cash (outflow) / inflow from financing activities

 

(810)

1,442

-

1,442

(997)

-

(997)

 

(Decrease) / increase in cash and cash equivalents

 

 

(4,313)

 

(829)

 

(75)

 

(904)

 

47

 

(1,297)

 

(1,250)

Exchange differences on translation of foreign subsidiaries

 

 

(93)



 

(153)


 

 

 

(271)

Cash and cash equivalents at beginning of year

 

 

4,632



 

6,153



 

6,153

Cash and cash equivalents at end of year

 

 

226



 

5,096



 

4,632

 


Condensed Consolidated Statement of Changes in Equity for the six months ended 30 June 2024

 

 

 

 

 

Share

capital

£'000

 

 

 

 

Share premium

£'000

 

 

 

 

Own shares

£'000

 

 

Share-based incentive reserve

£'000

 

 

Foreign currency translation reserve

 £'000

 

 

 

 

Retained earnings

£'000

 

Total attributable to equity holders of parent

£'000

 

 

 

Non-controlling interest

£'000

 

 










 

At 1 January 2023

9,102

45,928

(994)

1,010

(610)

35,558

89,994

181

90,175

Profit for period

-

-

-

-

-

3

3

31

34

Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

-

 

(162)

 

-

 

(162)

 

9

Total comprehensive (loss) / income for period

 

-

 

-

 

-

 

-

 

(162)

 

3

 

(159)

 

40

 

(119)

Growth share charge

-

-

-

59

-

-

59

-

59

Shares awarded and sold from own shares

-

-

11

-

-

(30)

(19)

-

(19)

Dividend paid

-

-

-

-

-

-

-

(130)

(130)

At 30 June 2023

9,102

45,928

(983)

1,069

(772)

35,531

89,875

91

89,966

(Loss) / profit for period

-

-

-

-

-

(12,029)

(12,029)

116

(11,913)

Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

-

 

(116)

 

-

 

(116)

 

(2)

Total comprehensive (loss) / income for period

 

-

 

-

 

-

 

-

 

(116)

 

(12,029)

 

(12,145)

 

114

 

(12,031)

Share option charge

-

-

-

17

-

-

17

-

17

Growth share charge

-

-

-

21

-

-

21

-

21

Shares awarded and sold from own shares

-

-

41

-

-

(40)

1

-

1

Dividend paid

-

-

-

-

-

(1,495)

(1,495)

(26)

(1,521)

At 31 December 2023

9,102

45,928

(942)

1,107

(888)

21,967

76,274

179

76,453

(Loss) / profit for period

-

-

-

-

-

(88)

(88)

50

(38)

Exchange differences on translation of foreign operations

 

-

 

-

 

-

 

-

 

(93)

 

-

 

(93)

 

-

Total comprehensive (loss) /  income for period

 

-

 

-

 

-

 

-

 

(93)

 

(88)

 

(181)

 

50

 

(131)

New shares issued

122

153

-

-

-

-

275

-

275

Shares awarded and sold from own shares

-

-

725

-

-

(499)

226

-

226

Dividend paid

-

-

-

-

-

-

-

(102)

(102)

At 30 June 2024

9,224

46,081

(217)

1,107

(981)

21,380

76,594

127

76,721


 

Notes to the unaudited Interim Report for the six months ended 30 June 2024

 

1.   Accounting Policies

 

Basis of preparation

 

The condensed consolidated interim financial statements for the six months ended 30 June 2024 have been prepared in accordance with the IAS 34 "Interim Financial Reporting" and the Group's accounting policies.

 

The Group's accounting policies are in accordance with International Financial Reporting Standards as adopted by the United Kingdom and are set out in the Group's Annual Report and Accounts 2023 on pages 68-72. These are consistent with the accounting policies which the Group expects to adopt in its 2024 Annual Report. The Group has not early-adopted any Standard, Interpretation or Amendment that has been issued but is not yet effective.

 

The information relating to the six months ended 30 June 2024 and 30 June 2023 is unaudited and does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006. The comparative figures for the year ended 31 December 2023 have been extracted from the Group's Annual Report and Accounts 2023, on which the auditors gave an unqualified opinion and did not include a statement under section 498 (2) or (3) of the Companies Act 2006. The Group Annual Report and Accounts for the year ended 31 December 2023 have been filed with the Registrar of Companies.

 

Going concern

 

The Directors have considered the financial projections and cash flow projections for the Group alongside the availability of renewed committed bank facilities of £20m (expiring 5 April 2026), an overdraft facility of £7m (which will reduce to £3m in the event there is a deleveraging event - further information in Note 31 to the 2023 year end financial statements), and the headroom afforded against the covenant tests for the coming 12 months. The Directors have also considered and understood the mitigating actions that would be required in the event of reduced revenue profiles and any consequential difficulties with covenant compliance. Such potential mitigating actions would include a review of headcount, particularly in the areas impacted by any downturn. Furthermore the Group have considered actions that can be taken should increased headroom be required. This would most likely be the disposal of non-core or high value agency assets. Against these scenarios, the Group has adequate headroom against the facilities described above. This leads the Directors to become satisfied that, taking account of reasonably possible changes in trading performance, it is appropriate to adopt the going concern basis in preparing the financial statements.

 

Accounting estimates and judgements

 

The Group makes estimates and judgements concerning the future and the resulting estimates may, by definition, vary from the actual results. The Directors considered the critical accounting estimates and judgements used in the interim financial statements and concluded that the main areas of judgement are:

 

·      Potential impairment of goodwill;

·      Contingent payments in respect of acquisitions;

·      Revenue recognition policies in respect of contracts which straddle the period end;

·      Valuation of intangible assets on acquisitions; and

·      Intangible development costs.

 

 

2.   Segmental Information

 

Business segmentation

 

For management purposes the Board monitors the performance of its individual agencies and groups them into service segments based on the sectors in which they operate. Each reportable segment therefore includes a number of agencies with similar characteristics.

 

The Board assesses the performance of each segment by looking at turnover, operating income and headline operating profit. The headline operating profit shown below is after the reallocation to the agencies of certain head office costs relating to the Shared Services function. These costs include a significant portion of the total operating costs which are now centrally managed.

 

The Board does not review the assets and liabilities of the Group on a segmental basis. A segmental breakdown of assets and liabilities is therefore not disclosed.

 

 


Business & Corporate

Consumer & Lifestyle

Health & Wellness

Property

Sports & Entertainment

Technology & Mobility

MISSION Advantage & Central

Investments

Total

 

Six months to 30 June 2024

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

Turnover

 

 

35,569

 

12,784

 

1,948

 

16,015

 

4,023

 

16,629

 

7,424

 

-

 

94,392

 

Operating income

 

10,219

 

9,117

 

1,659

 

7,477

 

3,327

 

7,339

 

3,094

 

-

 

42,232

 

Headline operating profit

 

995

 

653

 

(2)

 

995

 

371

 

640

 

(1,028)

 

-

 

2,624

 

 


Business & Corporate

Consumer & Lifestyle

Health & Wellness

Property

Sports & Entertainment

Technology & Mobility

MISSION Advantage & Central

Investments

Total

 

Six months to 30 June 2023

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

34,725

12,874

2,165

14,973

4,032

17,494

6,217

-

92,480

Discontinued operations

-

-

-

-

-

-

-

428

428

 

Total Group

 

34,725

 

12,874

 

2,165

 

14,973

 

4,032

 

17,494

 

6,217

 

428

 

92,908

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

10,127

9,180

2,032

6,821

3,000

7,849

2,439

-

41,448

Discontinued operations

-

-

-

-

-

-

-

350

350

 

Total Group

 

10,127

 

9,180

 

2,032

 

6,821

 

3,000

 

7,849

 

2,439

 

350

 

41,798

 

Headline operating profit / (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

1,350

868

216

585

357

273

(1,126)

-

2,523

Discontinued operations

-

-

-

-

-

-

-

(557)

(557)

 

Total Group

 

1,350

 

868

 

216

 

585

 

357

 

273

 

(1,126)

 

(557)

 

1,966

 

 


Business & Corporate

Consumer & Lifestyle

Health & Wellness

Property

Sports & Entertainment

Technology & Mobility

MISSION Advantage & Central

Investments

Total

 

Year to 31 December 2023

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

67,215

26,128

4,438

30,983

10,373

40,876

15,437

-

195,450

Discontinued operations

-

-

-

-

-

-

-

438

438

 

Total Group

 

67,215

 

26,128

 

4,438

 

30,983

 

10,373

 

40,876

 

15,437

 

438

 

195,888

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

20,785

18,195

3,949

15,038

6,675

15,084

6,594

-

86,320

Discontinued operations

-

-

-

-

-

-

-

230

230

 

Total Group

 

20,785

 

18,195

 

3,949

 

15,038

 

6,675

 

15,084

 

6,594

 

230

 

86,550

 

Headline operating profit / (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

2,831

1,322

712

2,303

1,368

165

(2,221)

-

6,480

Discontinued operations

-

-

-

-

-

-

-

(1,438)

(1,438)

 

Total Group

 

2,831

 

1,322

 

712

 

2,303

 

1,368

 

165

 

(2,221)

 

(1,438)

 

5,042

 

 

 

Geographical segmentation

 

The following table provides an analysis of the Group's operating income by region of activity:

 

 

Six months to

Six months to

Year ended

 

30 June

2024

30 June

2023

31 December

 2023

 

Unaudited

Unaudited

Audited

 

£'000

£'000

£'000

 

 



UK

37,905

35,828

75,278

USA

3,083

4,203

7,688

Asia

1,130

1,643

3,340

Rest of Europe

114

124

244


42,232

41,798

86,550

 

 

 

 

 

3.   Reconciliation of Headline Profit to Reported Profit

 

The Board believes that headline profits, which eliminate certain amounts from the reported figures, provide a better understanding of the underlying trading of the Group.

 

 

Six months to

30 June

 2024

Unaudited

 

£'000

Six months to

30 June

 2023

Unaudited

 

£'000

Year ended

31 December

 2023

Audited

£'000

 

 

PBT

PAT

PBT

PAT

PBT

PAT

 

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

From continuing operations

 

 


 

Headline profit

1,264

948

1,556

1,185

4,158

2,953

Acquisition-related items (Note 4)

(626)

(492)

(418)

(341)

(1,652)

(1,453)

Bank refinancing and equity raise costs

(301)

(226)

-

-

(475)

(356)

Restructuring costs

(203)

(203)

-

-

(715)

(536)

Start-up costs

(86)

(65)

(512)

(384)

(1,818)

(1,363)

Goodwill, business and intangible impairment

-

-

-

-

(10,409)

(10,381)

Reported profit / (loss)

48

(38)

626

460

(10,911)

(11,136)

 

From discontinued operations

 

 


 

Headline profit

-

-

(557)

(426)

(1,438)

(1,098)

Profit on sale of Pathfindr

-

-

-

-

308

355

Reported loss

-

-

(557)

(426)

(1,130)

(743)


 

 





From continuing and discontinued operations

 

 





Headline profit

1,264

948

999

759

2,720

1,855

Acquisition-related items (Note 4)

(626)

(492)

(418)

(341)

(1,652)

(1,453)

Bank refinancing and equity raise costs

(301)

(226)

-

-

(475)

(356)

Restructuring costs

(203)

(203)

-

-

(715)

(536)

Start-up costs

(86)

(65)

(512)

(384)

(1,818)

(1,363)

Goodwill, business and intangible impairment

-

-

-

-

(10,409)

(10,381)

Profit on sale of Pathfindr

-

-

-

-

308

355

Reported profit / (loss)

48

(38)

69

34

(12,041)

(11,879)

 

 

Bank refinancing and equity raise costs in 2023 consisted of various professional fees incurred in connection with the bank refinancing, and other related costs associated with this process. Costs in 2024 consist of further such expenses, accelerated bank debt arrangement fees (see note 5) and fees from various consulting and legal firms advising and assisting in the Board's consideration of an equity issue.

 

Restructuring costs in 2023 consisted of costs of closing down the April Six Singapore office, and redundancy, PILON and TUPE related costs associated with restructuring and right sizing of various business units in the last quarter of the year following the downgraded full year profit expectation announced to the market. Restructuring costs in 2024 consist of costs of closing down the MISSION China office.

 

Start-up costs derive from organically started businesses or loss-making businesses acquired and comprise the trading losses of such entities until the earlier of two years from commencement or when they show evidence of becoming sustainably profitable. Start-up costs in 2023 related to Livity, the launch of Turbine, an integrated Growth Media agency, specialising in owned, earned and paid media for consumer facing brands, the trading losses of BLS China launched in 2023, as well as costs associated with the early-stage foundation of performance marketing and data science capabilities. Start-up costs in 2024 consist of the launch of the US office of the Influence business.

 

In 2023, goodwill, business and intangible impairment costs related to the impairment of Story UK Ltd, Story Agency Ltd, Krow Agency Ltd and Krow Communications Ltd goodwill and the write off of the Mission Brand Bonding Index intangible asset.

 

4.   Acquisition Adjustments

 


Six months to

30 June

2024

Unaudited

Six months to

30 June

2023

Unaudited

Year ended

31 December 2023

Audited

 


£'000

£'000

£'000

 


 



Amortisation of intangible assets

recognised on acquisitions

 

(382)

 

(259)

 

(942)

Movement in fair value of contingent consideration

 

(48)

 

(22)

 

(434)

Acquisition transaction costs expensed

(196)

(137)

(276)

 


(626)

(418)

(1,652)

 

The movement in fair value of contingent consideration relates to a revision in the estimate payable to vendors of businesses acquired in prior years. Acquisition transaction costs relate to professional fees in connection with acquisitions made or contemplated, including reverse acquisitions.

 

5.   Net Finance Costs

 


Six months to

Six months to

Year ended    


30 June

2024

30 June

2023

31 December 2023


Unaudited

Unaudited

Audited


£'000

£'000

£'000

 

 


 

Net interest on bank loans, overdrafts and deposits

 

(988)

 

(742)

 

(1,795)

Amortisation of bank debt arrangement fees

 

(21)

 

(23)

 

(45)

Interest expense on leases liabilities

(425)

(277)

(632)

Headline net finance costs

(1,434)

(1,042)

(2,472)

 

 



Accelerated amortisation of debt arrangement fees

(60)

-

-

Net finance costs

(1,494)

(1,042)

(2,472)

 

The increase in net interest on bank loans, overdrafts and deposits in the period is driven primarily by an increase in the interest rate payable on the bank debt following general increases in interest rates by the BOE and higher margins payable on the new revolving credit facility entered into on 27 March 2024.

 

The increase in interest expense on lease liabilities in the period is the result of the general increase in interest rates and increase in Right of Use Assets and Lease Liabilities following the entering into of new leases, most notably the new London office.

 

Following the reduction in full year profit expectations announced to the market last year, the Group agreed a new revolving credit facility on 27 March 2024 and incurred additional bank debt arrangement fees that are being amortised over the period of the new facility. In addition, the remaining unamortised bank debt arrangement fees relating to the replaced facility were fully written off during the period. These additional bank debt arrangement fees, over and above what would have been amortised had the Group not refinanced, amounting to £60,000, have been classified as a headline adjustment.

 

6.   Taxation

 

The taxation charge for the period ended 30 June 2024 has been based on an estimated effective tax rate on headline profit on ordinary activities of 25% (30 June 2023: 24%).

 

7.   Earnings Per Share

 

The calculation of the basic and diluted earnings per share is based on the following data, determined in accordance with the provisions of IAS 33: "Earnings per Share".

 


Six months to

Six months to

Year to


30 June

2024

30 June

2023

31 December

2023


Unaudited

Unaudited

Audited


 




£'000

£'000

£'000


 



Earnings

 



 

 



Reported profit for the period

 




 



From continuing operations

 



Attributable to:

 



Equity holders of the parent

(88)

429

(11,283)

Non-controlling interests

50

31

147


(38)

460

(11,136)


 



From discontinued operations

 



Attributable to:

 



Equity holders of the parent

-

(426)

(743)

Non-controlling interests

-

-

-


-

(426)

(743)

 

 



From continuing and discontinued operations

 



Attributable to:

 



Equity holders of the parent

(88)

3

(12,026)

Non-controlling interests

50

31

147


(38)

34

(11,879)

 

Headline earnings (Note 3)

 




 



From continuing operations

 



Attributable to:

 



Equity holders of the parent

898

1,154

2,806

Non-controlling interests

50

31

147


948

1,185

2,953


 



From discontinued operations

 



Attributable to:

 



Equity holders of the parent

-

(426)

(1,098)

Non-controlling interests

-

-

-


-

(426)

(1,098)


 



From continuing and discontinued operations

 



Attributable to:

 



Equity holders of the parent

898

728

1,708

Non-controlling interests

50

31

147


948

759

1,855

Number of shares

 



Weighted average number of Ordinary shares for the purpose of basic earnings per share

 

90,357,314

 

89,531,712

 

89,549,143

Dilutive effect of securities:

 



Employee share options

248,391

370,183

341,144

Weighted average number of Ordinary shares for the purpose of diluted earnings per share

 

90,605,705

 

89,901,895

 

89,890,287

 

Reported basis:

 



 

 



From continuing operations

 



Basic earnings per share (pence)

(0.1)

0.5

(12.6)

Diluted earnings per share (pence)

(0.1)

0.5

(12.6)

From discontinued operations

 



Basic earnings per share (pence)

-

(0.5)

(0.8)

Diluted earnings per share (pence)

-

(0.5)

(0.8)

From continuing and discontinued operations

 



Basic earnings per share (pence)

(0.1)

0.0

(13.4)

Diluted earnings per share (pence)

(0.1)

0.0

(13.4)

 

Headline basis:

 



 

 



From continuing operations

 



Basic earnings per share (pence)

1.0

1.3

3.1

Diluted earnings per share (pence)

1.0

1.3

3.1

From discontinued operations

 



Basic earnings per share (pence)

-

(0.5)

(1.2)

Diluted earnings per share (pence)

-

(0.5)

(1.2)

From continuing and discontinued operations

 



Basic earnings per share (pence)

1.0

0.8

1.9

Diluted earnings per share (pence)

1.0

0.8

1.9

 

 

Basic earnings per share includes shares to be issued subject only to time as if they had been issued at the beginning of the period. 

 

A reconciliation of the profit after tax on a reported basis and the headline basis is given in Note 3.

 

8.   Intangible Assets


 30 June

2024

 30 June

2023

31 December 2023


Unaudited

Unaudited

Audited


£'000

£'000

£'000


 



Goodwill

87,975

98,123

87,857

Other intangible assets

2,248

3,581

2,771


90,223

101,704

90,628

 

Goodwill


Six months to 30 June

2024

Six months to 30 June

2023

Year ended 31 December 2023


Unaudited

Unaudited

Audited


£'000

£'000

£'000


 



Cost

 



At 1 January

104,426

102,486

102,486

Recognised on acquisition of subsidiary

-

1,910

1,920

Adjustment to consideration / net assets acquired

118

-

20

At 30 June / 31 December

104,544

104,396

104,426

 

Impairment adjustment




At 1 January

16,569

6,273

6,273

Impairment during the period

-

-

10,296

At 30 June / 31 December

16,569

6,273

16,569

 

 



Net book value

87,975

98,123

87,857

 

The increase in goodwill during the period relates to an adjustment to the net assets acquired of Mezzo Labs Ltd.

 

In accordance with the Group's accounting policies, an annual impairment test is applied to the carrying value of goodwill, unless there is an indication that one of the cash generating units has become impaired during the year, in which case an impairment test is applied to the relevant asset. The next impairment test will be undertaken at 31 December 2024. In 2023, as a result of the performance and restructuring of the operations of Story Agency Ltd, Story UK Ltd, Krow Agency Ltd and Krow Communications Ltd, and having calculated the net present value of projected cash flows derived from these operations, goodwill relating to these CGUs was impaired by £10,296,000.

 

Other Intangible Assets

 


Six months to

Six months to

Year ended 

 


30 June

2024

30 June

2023

31 December 2023

 


Unaudited

Unaudited

Audited

 


£'000

£'000

£'000

 

 

 



 

Cost

 



At 1 January

11,797

11,575

11,575

 

Additions

8

522

629

 

Transfer from property, plant and equipment

14

-

-

 

Disposals

(10)

-

(407)

 

At 30 June / 31 December

11,809

12,097

11,797

 

 

 

 



 

Amortisation and impairment

 



 

At 1 January

9,026

8,047

8,047

 

Charge for the period

532

469

1,295

 

Transfer from property, plant and equipment

13

-

-

 

Disposals

(10)

-

(316)

 

At 30 June / 31 December

9,561

8,516

9,026

 

 

 



 

Net book value

2,248

3,581

2,771

 

 

Other intangible assets consist of Client relationships, trade names, and software and product development costs.

 

9.   Right of Use Assets and Lease Liabilities

 

The Group leases several assets including property, office equipment, computer equipment and motor vehicles. Under IFRS 16, the Group recognises Right of Use Assets and Lease Liabilities in relation to these leases. Assets and liabilities reduce over the period of the lease and increase when a lease is renewed, or a new lease entered into.

 

 

Property

Office equipment, computer equipment and motor vehicles

Total

 

 


 

 

£'000

£'000

£'000

Cost

 

 

 

At 1 January 2023

15,168

2,399

17,567

Additions

10,481

227

10,708

Disposals

(790)

(243)

(1,033)

At 30 June 2023

24,859

2,383

27,242

Additions

-

25

25

Disposals

(1,975)

-

(1,975)

At 31 December 2023

22,884

2,408

25,292

Additions

66

303

369

Disposals

(1,365)

(769)

(2,134)

At 30 June 2024

21,585

1,942

23,527

 

 

 

 

Depreciation

 

 

 

At 1 January 2023

6,164

1,867

8,031

Charge for the period

1,039

172

1,211

Disposals

(790)

(243)

(1,033)

At 30 June 2023

6,413

1,796

8,209

Charge for the period

1,220

181

1,401

Disposals

(750)

-

(750)

At 31 December 2023

6,883

1,977

8,860

Charge for the period

1,116

151

1,267

Disposals

(1,365)

(769)

(2,134)

At 30 June 2024

6,634

1,359

7,993


 

 

 

Net book value at 30 June 2023

18,446

587

19,033

Net book value at 31 December 2023

16,001

431

16,432

Net book value at 30 June 2024

14,951

583

15,534

 

 

Obligations under leases are due as follows:

 


 30 June

2024

 30 June

2023

31 December 2023


Unaudited

Unaudited

Audited


£'000

£'000

£'000


 



In one year or less (shown in trade and other payables)

2,375

1,632

1,983

In more than one year

15,047

18,226

15,768


17,422

19,858

17,751

 

10.  Bank Loans and Net Bank Debt


30 June

2024

30 June

2023

31 December 2023


Unaudited

Unaudited

Audited


£'000

£'000

£'000


 



Bank loan outstanding

20,039

20,060

20,049

Adjustment to amortised cost

(185)

(77)

(55)

Carrying value of loan outstanding

19,854

19,983

19,994

Less: Cash and short term deposits

(226)

(5,096)

(4,632)

Net bank debt

19,628

14,887

15,362


 



The borrowings are repayable as follows:

 



Less than one year

21

23

21

In one to two years

20,018

21

20,023

In two to three years

-

20,016

5


20,039

20,060

20,049

Adjustment to amortised cost

(185)

(77)

(55)


19,854

19,983

19,994

Less: Amount due for settlement within 12 

months (shown under current liabilities)

 

(21)

 

(23)

 

(21)

Amount due for settlement after 12 months

19,833

19,960

19,973

 

At 30 June 2024, the Group's committed bank facilities comprised a revolving credit facility of £20.0m, expiring on 5 April 2026. Interest on the facility is based on SONIA (sterling overnight index average) plus a margin of between 2.25% and 4.90% depending on the Group's debt leverage ratio, payable in cash on loan rollover dates.

 

In addition to its committed facilities, the Group had available an overdraft facility of up to £9.0m until 30 June 2024, reducing to £7.0m from 1 July 2024, with interest payable by reference to National Westminster Bank plc Base Rate plus 2.25%.

 

Included in the above is £39,000 of bank loans owing by Populate Social Ltd, one of the companies acquired in 2022. These borrowings are repayable over a two year period.

 

11.  Acquisitions Obligations

 

The terms of an acquisition may provide that the value of the purchase consideration, which may be payable in cash or shares or other securities at a future date, depends on uncertain future events such as the future performance of the acquired company. The Directors estimate that the liability for payments that may be due is as follows:

 


Cash

£'000

Shares

£'000

Total

£'000

 

30 June 2024

Less than one year

3,473

35

3,508

Between one and two years

890

-

890

 

4,363

35

4,398

 

A reconciliation of acquisition obligations during the period is as follows:

 


Cash

£'000

Shares

£'000

Total

£'000





At 31 December 2023

5,465

-

5,465

Adjustments to estimates of obligations

(488)

536

48

Obligations settled in the period

(614)

(501)

(1,115)

At 30 June 2024

4,363

35

4,398

 

During the period certain acquisition obligations previously expected to be settled in cash were actually settled in shares.

 

12. Post balance sheet events

 

There have been no material post balance sheet events.

 

 

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