TIDMCAU
RNS Number : 5800G
Centaur Media PLC
20 July 2023
20 July 2023
Centaur Media Plc
("Centaur" or "Group")
Interim results for the 6 months ended 30 June 2023
Successful execution of strategy driving higher quality
revenue
Strong EBITDA margin performance in line with Margin
Acceleration Plan (MAP23)
Centaur, an international provider of business intelligence,
learning and specialist consultancy presents its interim results
for the 6 months ended 30 June 2023.
Financial highlights
GBPm H1 2023 H1 2022 Change
------------------------------- -------- --------- -------
Reported revenue 19.3 19.8 -3%
Adjusted (1) EBITDA 3.5 3.4 +3%
Adjusted (1) EBITDA margin 18% 17% +1pp
Adjusted (1) operating profit 2.4 1.9 +26%
Reported operating profit 1.8 1.1 +64%
Group reported profit after
taxation 1.9 0.7 +171%
Adjusted(1) diluted EPS 1.6 0.9 +78%
Ordinary dividend (pence per
share) 0.6 0.5 +20%
Net cash(2) 8.8 14.2 -38%
------------------------------- -------- --------- -------
-- Revenue reduction of 3% to GBP19.3m primarily due to macroeconomic
related headwinds and f all in non-strategic advertising, recruitment
& marketing solutions revenues
deg Flagship 4 represents 74% of Group revenue and grew by 6% including
event timing(5)
deg 76% of Group revenue derived from higher quality revenue streams
-- Adjusted (1) EBITDA increased to GBP3.5m (H1 2022: GBP3.4m) delivering
an adjusted (1) EBITDA margin of 18% (H1 2022: 17%); driven by a focus
on profitable revenue, structured price rises and careful cost management
offsetting the margin loss from fall in non-strategic revenues
-- Interim ordinary dividend of 0.6 pence per share representing an increase
of 20% on the 2022 interim dividend
-- Robust balance sheet with net cash (2) of GBP8.8m (H1 2022: GBP14.2m),
following GBP8.0m of ordinary and special dividends paid in the period,
together with GBP10m undrawn RCF
-- Strong cash conversion (3) of 115% due to good cash collection and
increase in deferred revenue
-- Centaur remains well positioned to deliver profitable growth alongside
continued product investment in business intelligence and learning
where we have identified further opportunities to enhance market share
and accelerate growth and profits.
Strategic and operational highlights
-- Flagship 4 brands and higher quality revenue streams (Premium Content
and Training & Advisory) drove profitability over last 6 months
-- Strategic emphasis on building repeat and recurring revenue with improving
renewal rates and blue-chip customer base
-- Focus on profitable revenue, structured price rises and careful cost
management to reinforce the Group's resilience and maintain its operational
leverage
-- Well placed to generate full year revenue at last year's level whilst
achieving our MAP23 EBITDA objectives(4) to raise EBITDA to over GBP10m
at an adjusted(1) EBITDA margin of at least 23% by the end of 2023
Swag Mukerji, Chief Executive Officer, commented:
"We are proud to be on track to deliver our MAP23 EBITDA
objectives, despite the macroeconomic backdrop and remain
encouraged to see the growth in our Flagship 4 brands and Group
profitability.
We are positioning Centaur to deliver targeted connectivity with
timely and deeper insight to customers and we continue to develop
our learning and consultancy expertise in a market consistently
characterised by change. These underlying trends and our focus on
the Flagship 4 are driving improved profitability and give us a
solid platform for growth. Meanwhile, our resilient revenue streams
and balance sheet strength will ensure that Centaur is well
positioned to deliver MAP23 despite any wider macroeconomic
uncertainty."
Financial performance
Over the first six months of 2023, Centaur has continued to
drive margin acceleration in challenging market conditions.
Adjusted(1) EBITDA and adjusted(1) EBITDA margin both continued to
show growth, as did the Group's reported profit for the period.
First half reported revenue was GBP19.3m down 3% (H1 2022:
GBP19.8m), impacted by the fall in the advertising market and a
slowdown in customer decision making creating longer sales
pipelines seen across the industry. Nonetheless, the Group achieved
combined growth of 6% from the Flagship 4 brands of Econsultancy,
MW Mini MBA and Influencer Intelligence (all three of which are in
the Xeim business unit) and The Lawyer. This growth in H1 2023 was
primarily driven by the benefit of The Lawyer Awards, which took
place in June 2023 (vs. being held in July 2022). Without this
timing difference, underlying revenue(5) from the Flagship 4 brands
was flat year on year.
In line with Centaur's strategy, the focus on the higher quality
revenue streams of Premium Content and Training and Advisory now
represent 76% of Group revenue (H1 2022: 70%). These are valuable
because they are repeat and recurring revenues that we expect, and
have seen to date, to be more resilient to macroeconomic
conditions.
Adjusted(1) EBITDA increased by 3% to GBP3.5m (H1 2022: GBP3.4m)
as a result of the focus on profitable revenue, structured price
rises and careful cost management more than offsetting the
reduction in margin from lower revenue, delivering an adjusted(1)
EBITDA margin increase to 18% (H1 2022: 17%), in line with the
Board's expectations.
The resilience of Centaur's EBITDA illustrates the operational
leverage inherent within its business model. This, together with
the significantly higher EBITDA margin historically reported in H2
compared to H1, underpins management's confidence that its EBITDA
objectives can be achieved in line with MAP23.
With a small decline in revenue in the period, management has
carefully managed the cost base through clear operational and
financial steps to reinforce the resilience and efficiency of the
business. We believe that this will ensure that the business is
best positioned to withstand any further macroeconomic uncertainty
during the remainder of the year.
The increase in adjusted(1) EBITDA together with lower
depreciation and amortisation has resulted in an adjusted(1)
operating profit of GBP2.4m (H1 2022: GBP1.9m). Together with a tax
credit of GBP0.1m, the Group reported profit after taxation is
GBP1.9m, a 171% improvement from last year's profit to 30 June 2022
of GBP0.7m.
Centaur had a net cash(2) balance of GBP8.8m at 30 June, after
paying out GBP8.0m of special and ordinary dividends during the
period and strong cash conversion(3) at 115%.
Flagship 4 Performance ( Econsultancy, MW Mini MBA, Influencer
Intelligence and The Lawyer )
Centaur has continued to increase its profit margin under
"MAP23" with the primary aim of achieving its EBITDA objectives .
To achieve this, Centaur has focused investment and resource
allocation on its Flagship 4 brands, the key drivers of organic
growth, particularly through strategic investment in Econsultancy
and MW Mini MBA as well as increased marketing spend and is well
placed for continued organic revenue growth in the future.
Over the past six months, revenue from the Flagship 4 grew by 6%
to GBP14.2m, which now equates to 74% (H1 2022: 68%) of total Group
revenue:
-- Econsultancy - since launching its new multi-touch learning platform
in H2 last year, Econsultancy has seen increased renewal rates of
86% in H1 2023 (H1 2022: 73%) and strong demand for digital marketing
training. However, longer customer sales cycles resulting from a backdrop
of increased macro-economic uncertainty has delayed some of the revenue
anticipated in H1 into H2 resulting in a 9% year on year reduction
in H1 revenue for the brand;
-- MW Mini MBA - continued growth, with revenue up 7% vs H1 2022. Our
focus on sales to repeat corporate customers has embedded the benefit
of a significant price increase achieving a yield increase of 15%
with only a small decrease in delegate numbers;
-- Influencer Intelligence - satisfactory renewal rates in H1 2023 of
81% (H1 2022: 86%) due to some customers in the retail and fashion
sectors tightening budgets with an upward trend in new business during
H1 2023, resulting in a book of business and revenue marginally above
H1 2022; and
-- The Lawyer - delivered 11% growth in Premium Content due to a strong
renewal rate of 105% on its main corporate subscriptions and assisted
by its premium product Signal with a renewal rate of 100%. The Lawyer
also held a successful Awards event in June (2022: July) - excluding
the impact of the timing of this event, underlying revenue increased
1% compared to H1 2022 with the growth in Premium Content offset by
lower revenue from legacy advertising related Marketing Solutions
and other events.
Centaur has seen lower revenue across its suite of Core Brands
primarily due to :
-- a reduction of 36% in Xeim's legacy advertising related Marketing
Solutions revenue impacted by tough economic conditions in the media
market;
-- a reduction of 22% in Marketing Services revenue resulting from Really
B2B's lower renewal rates in H2 2022; and
-- the decision to focus on one annual Festival of Marketing event in
October 2023 (2022 also included a lower profit hybrid March event).
The negative effects of the above were partially offset by
revenue growth of 37% in Oystercatchers - our industry-leading
consultancy with expertise in delivering marketing agency search
and selection due to an increase in the number of blue-chip
customers assessing and pitching their marketing agencies.
Going forward, Centaur's aim is to continue to position its
Flagship 4 for growth, broadening cross-selling opportunities and
enhancing shared capabilities, with the support of the Core
Brands.
Dividend
Centaur's Board has approved an increased interim ordinary
dividend for 2023 of 0.6p per share (H1 2022: 0.5p). This is in
line with Centaur's dividend policy that aims to distribute 40% of
adjusted(1) earnings after taxation, subject to a minimum aggregate
total of 1p per share per year.
Outlook
Centaur has met the Board's expectations under its Margin
Acceleration Plan of increasing adjusted(1) EBITDA and adjusted(1)
EBITDA margin over the course of the first half of 2023. Trading is
currently in line with the Board's expectations for the second half
of the year, which, in keeping with historical trends, will have a
greater weighting of revenue and profit than the first half,
primarily due to the Festival of Marketing and higher revenue from
MW Mini MBA falling in H2.
Despite the uncertain macroeconomic environment which has driven
a broader sector slowdown and a fall in the advertising market, the
resilient performance of our higher quality revenues leads us to
expect full-year revenue to be flat year on year (2022: GBP41.6m).
The Board remains confident in the successful delivery of Centaur's
MAP23 EBITDA objectives(4) and execution of the strategy set out
three years ago. Centaur will continue to invest in improving the
quality of its revenue mix across the Flagship 4, while the Group's
balance sheet strength will allow for adaptability and investment
in its future.
(1) Adjusted EBITDA is adjusted operating profit before
depreciation and amortisation. Adjusted results exclude adjusting
items as detailed in note 4 of this Interim Report.
(2) Net cash is the total of cash and cash equivalents and
short-term deposits. There are no overdrafts or borrowings in the
Group.
(3) Cash conversion is calculated as adjusted operating cash
flow (excluding any one-off significant cash flows) / adjusted
EBITDA.
(4) Centaur's MAP23 EBITDA objectives are to raise EBITDA to
over GBP10m (based on our original target of 23% of GBP45m revenue)
at an adjusted EBITDA Margin of at least 23% by 2023.
(5) Event timing relates to the impact of The Lawyer Awards
timing in June 2023 compared to July 2022.
Enquiries
Centaur Media plc
Swag Mukerji, Chief Executive
Officer 020 7970 4000
Simon Longfield, Chief Financial
Officer
Teneo
Zoë Watt / Oliver Bell 07713 157561 / 07917 221748
Note to editors
Centaur is an international provider of business intelligence,
learning and specialist consultancy that inspires and enables
people to excel at what they do within the marketing and legal
professions.
Centaur's Flagship 4 brands are Econsultancy, enabling customers
to achieve excellence in digital marketing and ecommerce; MW Mini
MBA, taking marketing and brand skills to the next level;
Influencer Intelligence, helping global brands find and engage with
the right influencers; and The Lawyer, the most trusted brand for
the legal profession, providing data-rich business intelligence and
insight.
Overview of Group Performance
Centaur has continued to perform well off the back of the
revenue and profit growth in 2022. However, reported revenue in H1
2023 declined 3% compared to H1 2022, with Xeim reporting an 8%
decrease partially offset by The Lawyer which achieved an increase
of 21%. Excluding the impact of the timing of The Lawyer Awards
held in July 2022, underlying revenue in The Lawyer increased 1%
compared with the same period last year.
Within the headline revenue growth of 6% from the Flagship 4
brands, the higher quality revenue streams of Premium Content and
Training and Advisory accounted for 76% of Group revenue in H1
2023, an increase of 6 percentage points from H1 2022. The Flagship
4 now account for 74% of Group revenue (H1 2022: 68%) and this has
boosted the Group's profitability in H1 2023.
The Group is half-way through the final year of its three-year
strategy ("MAP23") that is targeting its EBITDA objectives. Given
the challenging macroeconomic environment, particularly in the
advertising sector, the Group expects revenue for the year to be
flat on FY2022. However, the growth in EBITDA margin (increasing
from 17% in H1 2022 to 18% in H1 2023) and the expected seasonal
increase in H2 revenue and EBITDA margin underpins our belief that
the EBITDA objectives are realistic and achievable.
Trading Summary
Six months ended Six months ended
Unaudited 30 June 2023 30 June 2022 Movement
------------------------------------------- ----------------- ----------------- ---------
Revenue (GBPm) 19.3 19.8 -3%
Adjusted(1) EBITDA (GBPm) 3.5 3.4 +3%
Adjusted(1) operating profit (GBPm) 2.4 1.9 +26%
Reported operating profit (GBPm) 1.8 1.1 +64%
Group reported profit after tax (GBPm) 1.9 0.7 +171%
Adjusted(1) diluted EPS (pence) 1.6 0.9 +78%
Adjusted(1) operating cash flow(2) (GBPm) 4.0 4.2 -5%
Cash conversion(3) 115% 125% -10pp
------------------------------------------- ----------------- ----------------- ---------
The adjusted(1) operating profit of GBP2.4m (H1 2022: GBP1.9m)
was achieved despite the year-on-year decrease in revenue with
structured price rises and careful cost management. As a result of
the increased adjusted(1) operating profit, a reduction in the
charge for adjusting items to GBP0.6m (H1 2022: GBP0.8m) and a tax
credit of GBP0.1m (H1 2022: a charge of GBP0.3m), the Group
reported a profit for the period of GBP1.9m (H1 2022: GBP0.7m).
As a result of the uplift in profitability, adjusted(1) diluted
earnings per share for the reporting period increased to 1.6 pence
(H1 2022: 0.9 pence). Diluted earnings per share for the period on
a reported basis was 1.3 pence (H1 2022: 0.5 pence).
Net cash (4) decreased from GBP16.0m at the end of 2022 to
GBP8.8m at the end of June 2023. Cash performance was strong in the
period, mainly due to continued focus on cash collection resulting
in a reduction in trade receivables of GBP0.4m. This, combined with
a GBP1.8m increase in deferred income, but offset by a decrease in
creditors and an increase in prepayments and accrued income,
resulted in strong cash conversion(3) in the period of 115% (H1
2022: 125%).
The Group generated GBP4.0m of cash from operations and, in
addition to capital expenditure and taxation outflows, paid out
GBP8.0m of special and ordinary dividends, GBP0.3m for purchase of
own shares and GBP0.5m of lease obligations, net interest and other
payments.
Six months ended Six months ended
30 June (unaudited) 30 June (unaudited)
2023 2022
GBPm GBPm
------------------------------------------- --------------------- ---------------------
Adjusted (1) operating profit 2.4 1.9
Depreciation and amortisation 1.1 1.5
Movement in working capital 0.5 0.8
Adjusted (1) operating cash flow(2) 4.0 4.2
Capital expenditure (0.8) (0.8)
Taxation (1.6) -
Lease obligations, net interest and other (0.5) (1.0)
------------------------------------------- --------------------- ---------------------
Free cash flow 1.1 2.4
Dividends paid to Company's shareholders (8.0) (0.7)
Purchase of own shares (0.3) (0.6)
------------------------------------------- --------------------- ---------------------
(Decrease)/increase in net cash(4) (7.2) 1.1
Opening net cash(4) 16.0 13.1
------------------------------------------- --------------------- ---------------------
Closing net cash(4) 8.8 14.2
------------------------------------------- --------------------- ---------------------
Cash conversion (3) 115% 125%
------------------------------------------- --------------------- ---------------------
Segmental Review
Revenue for the six months ended 30 June, together with reported
and underlying(5) growth rates across each segment, are set out
below.
Xeim The Lawyer Total Xeim The Lawyer Total
2023 2023 2023 2022 2022 2022
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------- ------ ----------- ------ ------ ----------- ------
Revenue
Premium Content 5.1 2.5 7.6 4.9 2.3 7.2
Training and Advisory 7.0 - 7.0 6.7 - 6.7
Events 0.5 1.2 1.7 1.3 0.5 1.8
Marketing Services 1.3 - 1.3 1.6 - 1.6
Marketing Solutions 0.9 0.2 1.1 1.4 0.3 1.7
Recruitment Advertising 0.1 0.5 0.6 0.2 0.6 0.8
Total reported revenue 14.9 4.4 19.3 16.1 3.7 19.8
Reported revenue growth (%) (8)% 21% (3)%
Underlying(5) revenue adjustment:
Events - - - - 0.7 0.7
----------------------------------- ------ ----------- ------ ------ ----------- ------
Total underlying(5) revenue 14.9 4.4 19.3 16.1 4.4 20.5
Underlying(5) revenue growth (%) (8)% 1% (6)%
----------------------------------- ------ ----------- ------ ------ ----------- ------
The table below reconciles the adjusted(1) operating
profit/(loss) for each segment to the adjusted(1) EBITDA:
Xeim The Lawyer Central Total Xeim The Lawyer Central Total
2023 2023 2023 2023 2022 2022 2022 2022
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ ------- ----------- -------- ------- ------- ----------- -------- -------
Revenue 14.9 4.4 - 19.3 16.1 3.7 - 19.8
Adjusted (1) operating costs (12.3) (2.8) (1.8) (16.9) (13.3) (2.8) (1.8) (17.9)
------------------------------------ ------- ----------- -------- ------- ------- ----------- -------- -------
Adjusted(1) operating profit/(loss) 2.6 1.6 (1.8) 2.4 2.8 0.9 (1.8) 1.9
Adjusted(1) operating margin 17% 36% - 12% 17% 24% - 10%
Depreciation and amortisation 0.8 0.2 0.1 1.1 1.1 0.3 0.1 1.5
------------------------------------ ------- ----------- -------- ------- ------- ----------- -------- -------
Adjusted(1) EBITDA 3.4 1.8 (1.7) 3.5 3.9 1.2 (1.7) 3.4
Adjusted(1) EBITDA margin 23% 41% - 18% 24% 32% - 17%
------------------------------------ ------- ----------- -------- ------- ------- ----------- -------- -------
Xeim
Xeim's revenue decreased by 8% for the first half of 2023.
Adjusted(1) EBITDA reduced by GBP0.5m to GBP3.4m on the back of the
lower revenue partially offset by a reduction in operating costs
from careful management, resulting in a 1% decrease in EBITDA
margin to 23%.
Xeim contains three of the Group's Flagship 4 brands -
Econsultancy, MW Mini MBA and Influencer Intelligence - which have
contributed to this performance:
-- Econsultancy revenue reduced by 9%, mainly because of a fall in advertising
related Marketing Solutions revenue and customer-driven delays on
execution and delivery of Training and Advisory contracts, offset
by a marginal increase in subscription revenue from increased renewal
rates of 86% in H1 2023 (H1 2022: 73%) ;
-- The MW Mini MBA grew 7% due to a 15% increase in yields from price
rises and tighter management of discounts to corporate customers for
our spring Marketing and Brand courses with only a small reduction
of 4% in volumes to 3,200 delegates; and
-- Influencer Intelligence renewal rates in H1 2023 of 81% were lower
than last year (H1 2022: 86%), but a good result due to difficult
trading conditions in our main customer sectors of retail and fashion
. Together with an increasing trend on new business sales, this resulted
in a book of business and revenue marginally above H1 2022.
In addition, on our Core brands:
-- Marketing Week continues to lead the marketing community and drive
audiences that support our Core Brands such as the Festival of Marketing.
However, the macro-economic uncertainty, particularly in the advertising
sector, has resulted in a 36% reduction in non-strategic Marketing
Solutions revenue;
-- Oystercatchers' revenue has increased 37% compared to the comparative
period as a result of new business wins and repeat customer business
in the blue-chip corporate market;
-- Really B2B, our award-winning demand generation agency, is showing
a 22% reduction in Marketing Services revenue compared to H1 2022
due to lower repeat business, but is in line with the revenue achieved
in H2 2022 after some significant new business wins; and
-- Fashion and Beauty Monitor has flat revenue compared to H1 2022 due
to a small decrease in renewal rates compared to 2022 offset by an
increase in new business.
The Lawyer
Revenue for The Lawyer increased 21% on a reported basis.
Excluding the timing of The Lawyer Awards that took place in June
(2022: July), underlying revenue increased 1% compared to H1 2022
with an increase in higher quality revenue from Premium Content
offset by a decrease in Marketing Solutions revenue of 32% and
lower revenue from other events.
Adjusted(1) EBITDA increased by GBP0.6m to GBP1.8m on the back
of the higher revenue while operating costs were flat year-on-year
from careful management, resulting in an increase in EBITDA margin
to 41% (H1 2022: 32%).
The Lawyer achieved corporate subscription renewal rates by
value of 105%, which together with good renewal rates of 100% on
Signal (the subscription service offering in-depth strategic
insight and benchmarking of markets, clients and competitors) and a
consistent flow of new business, has resulted in 11% growth of
Premium Content revenue.
The Lawyer achieved a significant increase to GBP1.2m of Events
revenue in H1 2023 following the re-instatement of The Lawyer
Awards to its historical timing in June.
Central
Central operating costs are flat compared to H1 2022 after
careful cost management.
Dividends
In line with the Group's dividend policy to distribute a minimum
of 40% of adjusted(1) retained earnings or 1.0 pence per share per
annum, the Board has announced an increased interim dividend for
2023 of 0.6 pence per share (H1 2022: 0.5 pence). This will be paid
on 20 October 2023 to all shareholders on the register as at close
of business on 6 October 2023.
Balance Sheet
The balance sheet of the Group remains strong albeit with
reduced levels of net cash after paying out GBP8.0m in special and
ordinary dividends during the period. Healthy cash collection
during the period has resulted in a decrease in days sales
outstanding. Non-current assets have increased since 31 December
2022 in relation to the new office lease with a right of use asset
and related lease liability of GBP2.9m being recognised on 1
January 2023 and an increase in the deferred tax assets in relation
to losses carried forward (see note 5).
Principal Risks and Uncertainties
The principal risks and uncertainties currently faced by the
Group are reviewed regularly by the Board. The principal risks
faced by the Group are set out below and the Board considers the
risk levels to have remained the same since December 2022, except
where stated otherwise.
-- The world economy has been severely impacted by the Covid pandemic
and the conflict in Ukraine. The UK is forecast to be in recession
and the inflation rate is c.8%. The Group continues to have sensitivity
to UK/sector volatility and economic conditions. The impact has been
acute on some of Centaur's target market segments including fashion,
retail and entertainment sectors and is also having some impact on
in-person events. The Board considers this risk to have increased.
-- Failure to deliver and maintain a high growth performance culture.
Centaur's success depends on growing the business and completing the
MAP23 strategy. To do this, it is reliant in large part on its ability
to recruit, motivate and retain highly experienced and qualified employees
in the face of often intense competition from other companies, especially
in London.
-- Fraudulent or accidental breach of IT network, major systems failure
or ineffective operation of IT and data management systems leads to
loss, theft or misuse of financial assets, proprietary or sensitive
information and / or inoperative core products, services, or business
functions.
-- Regulatory: GDPR, PECR and other similar legislation include strict
requirements regarding how Centaur handles personal data, including
that of customers. There is risk of a fine from the ICO, third-party
claims as well as reputational damage if we do not comply.
Forward Looking Statements
Certain statements in this interim report are forward looking.
Although the Group believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no
assurance that these expectations will prove to be correct. Because
these statements involve risks and uncertainties, actual results
may differ materially from those expressed or implied by these
forward-looking statements. It undertakes no obligation to update
any forward-looking statements whether because of new information,
future events or otherwise.
Statement of Directors' Responsibilities
The Directors confirm that the condensed consolidated interim
financial statements for the six-month period ended 30 June 2023
have been prepared in accordance with the Disclosure Guidance and
Transparency Rules (DTR) of the Financial Conduct Authority and
with International Financial Reporting Standards ('IFRSs') and IAS
34, 'Interim financial reporting', in line with UK-adopted
international accounting standards.
In addition, the interim management report herein includes a
fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
-- An indication of important events that have occurred during the period
and their impact on the condensed consolidated interim financial statements,
and a description of the principal risks and uncertainties for the
remaining period of the financial year; and
-- Material related party transactions in the period and any material
changes in the related party transactions described in the last annual
report.
The Directors of Centaur Media Plc are listed in the Centaur
Media Plc Annual Report for the year ended 31 December 2022. A list
of current directors is maintained on the Centaur Media Plc
website.
Going Concern
In assessing the going concern status, the Directors considered
the Group's activities, the financial position of the Group and
their identification of any material uncertainties and the
principal risks to the Group. The Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for at least 12 months from the date of this
report and for this reason, they continue to adopt the going
concern basis in preparing the condensed consolidated interim
financial statements.
The interim report was approved by the Board of Directors and
authorised for issue on 19 July 2023 and signed on behalf of the
Board by:
Swag Mukerji, Chief Executive Officer
Notes:
(a) The maintenance and integrity of the Centaur Media plc website is
the responsibility of the directors; the work carried out by the auditor
does not involve consideration of these matters and, accordingly,
the auditor accepts no responsibility for any changes that may have
occurred to the condensed consolidated interim financial statements
since they were initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and dissemination
of the condensed consolidated interim financial statements may differ
from legislation in other jurisdictions.
Footnotes:
(1) Adjusted EBITDA is adjusted operating profit before
depreciation and amortisation. Adjusted results exclude adjusting
items, as detailed in note 4 of this Interim Report.
(2) For reconciliation of adjusted operating cash flow see note
1 of this Interim Report.
(3) Cash conversion is calculated as adjusted operating cash
flow (excluding any one-off significant cash flows) / adjusted
EBITDA.
(4) Net cash is the total of cash and cash equivalents and
short-term deposits. There are no overdrafts or borrowings in the
Group.
(5) Underlying revenue is adjusted for the impact of The Lawyer
Awards timing in 2022. There are no underlying revenue adjustments
relating to Xeim.
INDEPENT AUDITOR'S REVIEW REPORT TO CENTAUR MEDIA PLC
On the interim financial information for the six months ended 30
June 2023
Conclusion
We have been engaged by Centaur Media Plc (the "Group"), to
review the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2023 which
comprise the condensed consolidated statement of comprehensive
income, condensed consolidated statement of changes in equity,
condensed consolidated statement of financial position, condensed
consolidated cash flow statement and the related notes 1 to 19.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2023 is not prepared in all material aspects, in accordance
with UK-adopted International Accounting Standard 34 and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 - "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued for use in the United Kingdom. A review of interim
financial information consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with UK-adopted international
accounting standards. The condensed set of financial statements
included in this half-yearly report has been prepared in accordance
with UK-adopted International Accounting Standard 34 "Interim
Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
Conclusion section of this report, nothing has come to our
attention to suggest that management have inappropriately adopted
the going concern basis of accounting or that management have
identified material uncertainties relating to going concern that
are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE(UK) 2410, however future events or conditions
may cause the entity to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly
financial report in accordance with UK adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority .
In preparing the half-yearly financial report, the directors are
responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Group a conclusion on the condensed set of
financial statements in the half-yearly financial report. Our
conclusion, including our Conclusion Relating to Going Concern, are
based on procedures that are less extensive than audit procedures,
as described in the Basis for Conclusion paragraph of this
report.
Use of our report
This report is made solely to the Group in accordance with
International Standard on Review Engagements (UK) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council. Our work
has been undertaken so that we might state to the Group those
matters we are required to state to it in an independent review
report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than
the Group, for our review work, for this report, or for the
conclusions we have formed.
Crowe U.K. LLP
Statutory Auditor
London, United Kingdom
19 July 2023
Condensed consolidated Statement of Comprehensive Income
for the six months ended 30 June 2023
Six months ended 30 June (unaudited)
-----------------------------------------------------------------------------
Adjusted Adjusting Reported Adjusted Adjusting Reported
results(1) items(1) results results(1) items(1) results
2023 2023 2023 2022 2022 2022
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 2 19,289 - 19,289 19,793 - 19,793
Net operating
expenses 3 (16,873) (606) (17,479) (17,916) (787) (18,703)
Operating profit/(loss) 2,416 (606) 1,810 1,877 (787) 1,090
Finance income 114 - 114 6 - 6
Finance costs (142) - (142) (79) - (79)
Net finance
costs (28) - (28) (73) - (73)
Profit/(loss)
before tax 2,388 (606) 1,782 1,804 (787) 1,017
Taxation 5 (27) 145 118 (454) 180 (274)
Profit/(loss)
for the period
attributable to
owners of the
parent 2,361 (461) 1,900 1,350 (607) 743
Total comprehensive
income/(loss)
attributable to
owners of the
parent 2,361 (461) 1,900 1,350 (607) 743
Earnings/(loss)
per share attributable
to owners of the
parent 6
Basic 1.6p (0.3p) 1.3p 0.9p (0.4p) 0.5p
Fully diluted 0.9p 1.6p (0.3p) 1.3p 0.9p (0.4p)
------------------------------------- ------------ ---------- --------- ------------ ---------- --------------
(1) Adjusting items are disclosed in note 4.
Condensed consolidated Statement of Changes in Equity
for the six months ended 30 June 2023
Reserve
for Foreign
Share Own Share shares Deferred currency Retained Total
to
capital shares premium be issued shares reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- ---------- --------- --------- --------- --------
Unaudited
At 1 January 2022 15,141 (5,471) 1,101 471 80 143 35,643 47,108
Profit for the period
and
total comprehensive
income - - - - - - 743 743
Currency translation
adjustment - - - - - (37) - (37)
Transactions with
owners:
Dividends (note 13) - - - - - - (724) (724)
Purchase of own shares - (604) - - - - - (604)
Fair value of employee
services - - - 299 - - - 299
Tax on share-based
payments - - - - - - (21) (21)
As at 30 June 2022 15,141 (6,075) 1,101 770 80 106 35,641 46,764
Unaudited
At 1 January 2023 15,141 (5,863) 1,101 1,127 80 144 37,096 48,826
Profit for the period
and
total comprehensive
income - - - - - - 1,900 1,900
Currency translation
adjustment - - - - - (6) - (6)
Transactions with
owners:
Dividends (note 13) - - - - - - (8,046) (8,046)
Purchase of own shares
(note 14) - (322) - - - - - (322)
Fair value of employee
services - - - 435 - - - 435
Tax on share-based
payments - - - - - - (169) (169)
As at 30 June 2023 15,141 (6,185) 1,101 1,562 80 138 30,781 42,618
-------------------------- -------- -------- -------- ---------- --------- --------- --------- --------
Condensed consolidated Statement of Financial Position as at 30
June 2023
Registered number 04948078
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
Note GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 7 41,162 41,162 41,162
Other intangible assets 8 3,114 2,611 2,748
Property, plant and equipment 2,751 387 3,613
Deferred tax assets 3,287 1,673 2,153
Other receivables 9 176 27 302
50,490 45,860 49,978
------------------------------------------------------------ ------ ---------- ------------ ------------
Current assets
Trade and other receivables 9 5,735 5,357 6,745
Short-term deposits 10 6,000 8,500 3,500
Cash and cash equivalents 2,839 7,501 10,738
Current tax asset 105 165 176
14,679 21,523 21,159
------------------------------------------------------------ ------ ---------- ------------ ------------
Total assets 65,169 67,383 71,137
------------------------------------------------------------ ------ ---------- ------------ ------------
Current liabilities
Trade and other payables 11 (9,411) (9,652) (10,203)
Lease liability 12 (918) - (1,900)
Deferred income (10,648) (8,885) (10,748)
(20,977) (18,537) (22,851)
------------------------------------------------------------ ------ ---------- ------------ ------------
Net current (liabilities)/assets (6,298) 2,986 (1,692)
------------------------------------------------------------ ------ ---------- ------------ ------------
Non-current liabilities
Lease liability 12 (1,505) - (1,488)
Deferred tax liabilities (69) (20) (34)
(1,574) (20) (1,522)
------------------------------------------------------------ ------ ---------- ------------ ------------
Net assets 42,618 48,826 46,764
------------------------------------------------------------ ------ ---------- ------------ ------------
Capital and reserves attributable to owners of the Company
Share capital 15,141 15,141 15,141
Own shares (6,185) (5,863) (6,075)
Share premium 1,101 1,101 1,101
Other reserves 1,642 1,207 850
Foreign currency reserve 138 144 106
Retained earnings 30,781 37,096 35,641
------------------------------------------------------------ ------ ---------- ------------ ------------
Total equity 42,618 48,826 46,764
------------------------------------------------------------ ------ ---------- ------------ ------------
The notes are an integral part of these condensed consolidated
interim financial statements. The condensed consolidated interim
financial statements were approved by the Board of Directors on 19
July 2023 and were signed on its behalf by:
Simon Longfield
Chief Financial Officer
Condensed consolidated Cash Flow Statement
for the six months ended 30 June 2023
Six months ended 30 June (unaudited)
-----------------------------------------
Re-presented(2)
2023 2022
Note GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 16 3,990 4,200
Tax paid (1,556) (30)
Interest paid (40) -
Net refund of lease deposit 9 116 -
Net cash generated from operating activities 2,510 4,170
-------------------------------------------------------------- ----- -------------------- -------------------
Cash flows from investing activities
Purchase of property, plant and equipment (72) (173)
Purchase of intangible assets 8 (763) (601)
Interest received 10 105 -
Proceeds from/(investment in) short-term deposits 10 2,500 (3,500)
-------------------------------------------------------------- ----- -------------------- -------------------
Net cash flows generated from/(used in) investing activities 1,770 (4,274)
-------------------------------------------------------------- ----- -------------------- -------------------
Cash flows from financing activities
Finance costs paid (37) (35)
Extension fee on revolving credit facility (20) -
Repayment of obligations under lease 12 (486) (947)
Purchase of own shares 14 (322) (604)
Dividends paid to Company's shareholders 13 (8,046) (724)
Net cash flows used in financing activities (8,911) (2,310)
-------------------------------------------------------------- ----- -------------------- -------------------
Net decrease in cash and cash equivalents (4,631) (2,414)
-------------------------------------------------------------- ----- -------------------- -------------------
Cash and cash equivalents at beginning of period 7,501 13,065
Effect of foreign currency exchange rate changes (31) 87
-------------------------------------------------------------- ----- -------------------- -------------------
Cash and cash equivalents at end of period 2,839 10,738
-------------------------------------------------------------- ----------- -------------- -------------------
(2) See note 1 for description of prior period
re-presentation.
Notes to the condensed consolidated interim financial
statements
1 Summary of explanatory information and significant accounting
policies
General information
Centaur Media Plc ('the Company') is a public company limited by
shares and incorporated and domiciled in England and Wales. The
address of the Company's registered office is 10 York Road, London,
SE1 7ND, United Kingdom. The Company is listed on the London Stock
Exchange.
These condensed consolidated interim financial statements were
approved for issue on 19 July 2023.
These condensed consolidated interim financial statements are
unaudited and do not constitute the statutory accounts within the
meaning of Section 434 of the Companies Act 2006. The Group's most
recent statutory financial statements, which comprise the Annual
Report and audited Financial Statements for the year ended 31
December 2022 were approved by the Board of Directors on 14 March
2023 and delivered to the Registrar of Companies. The report of the
auditor on those financial statements was not qualified, did not
contain an emphasis of matter paragraph and did not contain any
statement under Section 498 of the Companies Act 2006.
The consolidated financial statements of the Group as at and for
the year ended 31 December 2022, are available upon request from
the Company's registered office or at www.centaurmedia.com .
Accounting policies and estimates
The accounting policies adopted by the Group in the condensed
consolidated interim financial statements are consistent with those
applied by the Group in its consolidated financial statements for
the year ended 31 December 2022.
The preparation of the condensed consolidated interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements as at and for the year ended 31
December 2022.
New and amended standards adopted by the Group
'Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2)' was adopted by the Group for the financial
period beginning 1 January 2023. This amendment has revised that an
entity is now required to disclose its material accounting policy
information instead of its significant accounting policies. This
does not impact these consolidated interim financial
statements.
New standards and interpretations not yet adopted
There are no standards that are not yet effective and that would
be expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future
transactions.
Prior period re-presentation
Prior period comparative numbers have been updated to reflect
current period presentation and disclosures. Cash flows relating to
investment in short-term deposits have been reclassified from
financing cash flows to investment cash flows in the prior period.
This has been reflected within the condensed consolidated interim
cash flow statement. There is no impact on the face of the
condensed consolidated statement of comprehensive income or net
assets as a result of this change.
Basis of preparation
The condensed consolidated interim financial statements for the
six-month period ended 30 June 2023 have been prepared in
accordance with the Disclosure and Transparency rules of the
Financial Conduct Authority and with UK-adopted International
Accounting Standards and IAS 34, 'Interim Financial Reporting'. The
condensed consolidated financial statements should be read in
conjunction with the Annual Report and Financial Statements for the
year ended 31 December 2022, which have been prepared in accordance
with UK-adopted International Accounting Standards.
Going concern
The condensed consolidated interim financial statements have
been prepared on a going concern basis.
At 30 June 2023, the Group has cash and cash equivalents of
GBP2,839,000 (2022: GBP10,738,000), short-term deposits of
GBP6,000,000 (2022: GBP3,500,000) and has net current liabilities
of GBP6,298,000 (2022: net current liabilities GBP1,692,000). In
both periods net current liabilities primarily arose from the
Group's normal high levels of deferred income relating to
performance obligations to be delivered in the future and is not a
liability that is likely to be paid in cash.
The Directors have assessed the Group's activities, the
financial position of the Group, and their identification of any
material uncertainties and the principal risks to the Group. The
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for at least twelve
months from the date of approval of this report and for the
foreseeable future. Therefore, the Directors consider it
appropriate to adopt the going concern basis of accounting in
preparing the condensed consolidated interim financial
statements.
Presentation of non-statutory measures
In addition to IFRS statutory measures, the Directors use
various non-GAAP key financial measures to evaluate the Group's
performance and consider that presentation of these measures
provides shareholders with an additional understanding of the core
trading performance of the Group. The basis of the principal
adjustments is comparable with that presented in the consolidated
financial statements for the year ended 31 December 2022, and as
described in those financial statements. The measures used are
explained and reconciled to their IFRS statutory headings
below.
The Directors believe that adjusted results and adjusted
earnings per share provide additional useful information on the
core operational performance of the Group to shareholders and
review the results of the Group on an adjusted basis for management
purposes. The term 'adjusted' is not a defined term under IFRS and
may not therefore be comparable with similarly titled profit
measurements reported by other companies. It is not intended to be
a substitute for, or superior to, IFRS measurements of profit.
The basis of the principal adjustments is consistent with that
presented in the consolidated financial statements for the year
ended 31 December 2022, and as described in those financial
statements.
For the six-month periods ended 30 June 2023 and 30 June 2022,
adjustments were made in respect of:
-- Amortisation of acquired intangible assets - the amortisation charge
for those intangible assets recognised on business combinations is
excluded from the adjusted results of the Group since they are non-cash
charges arising from investment activities. As such, they are not
considered reflective of the core trading performance of the Group.
Details of amortisation of intangible assets are shown in note 8.
-- Share-based payments - share-based payment expenses or credits are
excluded from the adjusted results of the Group as the Directors believe
that the volatility of these charges can distort the user's view of
the core trading performance of the Group. Details of share-based
payments are shown in note 15.
The tax related to adjusting items is the tax effect of the
items above that are allowable deductions for tax purposes,
calculated using the standard rate of corporation tax.
Further details of adjusting items are included in note 4. A
reconciliation between adjusted and reported earnings per share is
shown in note 6.
Adjusted operating profit
Profit before tax reconciles to adjusted operating profit as
follows:
Six months ended 30 June (unaudited)
---------------------------------------
2023 2022
GBP'000 GBP'000
Profit before tax 1,782 1,017
Adjusting items:
Amortisation of acquired intangibles 39 438
Share-based payment expense 567 349
----------------------------------------- ------------------- ------------------
Adjusted profit before tax 2,388 1,804
Finance income (114) (6)
Finance costs 142 79
Adjusted operating profit 2,416 1,877
----------------------------------------- ------------------- ------------------
Adjusted operating cash flow
Adjusted operating cash flow is not a measure defined by IFRS.
It is defined as cash flow from operations excluding the impact of
adjusting items, which are defined above. The Directors use this
measure to assess the performance of the Group as it excludes
volatile items not related to the core trading of the Group.
Reported cash flow from operations reconciles to adjusted operating
cash as follows:
Six months ended 30 June (unaudited)
---------------------------------------
2023 2022
GBP'000 GBP'000
Reported cash flow from operating activities 3,990 4,200
Adjusted operating cash flow 3,990 4,200
Capital expenditure (835) (774)
----------------------------------------------- ------------------- ------------------
Post capital expenditure cash flow 3,155 3,426
----------------------------------------------- ------------------- ------------------
Our cash conversion rate for the period was 115% (2022: 125%).
It is calculated as adjusted operating cash flow (excluding any
one-off significant cash flows) / adjusted EBITDA.
Underlying revenue growth
The Directors review underlying revenue growth in order to allow
a like-for-like comparison of revenue between years. Statutory
revenue growth reconciles to underlying revenue growth as
follows:
Xeim The Lawyer Total
30 June 30 June 30 June
Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Reported revenue 2022 16,138 3,655 19,793
Events - The Lawyer Awards - 750 750
------------------------------- ----- ------------- ------------- ------------
Underlying revenue 2022 16,138 4,405 20,543
------------------------------- ----- ------------- ------------- ------------
Reported revenue 2023 14,858 4,431 19,289
Underlying revenue 2023 14,858 4,431 19,289
------------------------------- ----- ------------- ------------- ------------
Reported revenue growth (8%) 21% (3%)
Underlying revenue growth (8%) 1% (6%)
------------------------------- ----- ------------- ------------- ------------
Underlying revenue for 2022 includes an adjustment to reported
revenue in relation to The Lawyer Awards, which was held in the
second half of 2022 after postponement from its normal timing in
the first half of the year.
Adjusted EBITDA
Adjusted EBITDA is not a measure defined by IFRS. It is defined
as adjusted operating profit before depreciation and amortisation
of intangible assets other than those acquired through a business
combination. It is used by the Directors as a measure to review
performance of the Group and forms the basis of some of the Group's
financial covenants under its revolving credit facility. Adjusted
EBITDA is calculated as follows:
Six months ended 30 June (unaudited)
---------------------------------------
2023 2022
GBP'000 GBP'000
Adjusted operating profit (as above) 2,416 1,877
Depreciation of property, plant and equipment 569 969
Amortisation of computer software 488 512
------------------------------------------------ ------------------- ------------------
Adjusted EBITDA 3,473 3,358
------------------------------------------------ ------------------- ------------------
Net cash
Net cash is not a measure defined by IFRS. Net cash is the total
of cash and cash equivalents and short-term deposits. There are no
overdrafts or borrowings in the Group. The Directors consider the
measure useful as it gives greater clarity over the Group's
liquidity as a whole. A reconciliation between net cash and
statutory measures is shown below:
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
GBP'000 GBP'000 GBP'000
Cash and cash equivalents 2,839 7,501 10,738
Short-term deposits 6,000 8,500 3,500
Net cash 8,839 16,001 14,238
------------------------------ ---------- ------------ ----------
Financial risk factors
The Group's activities expose it to a variety of financial
risks: interest rate risk, credit risk, liquidity risk, capital
risk and currency risk. The condensed consolidated interim
financial statements do not include all financial risk management
information and disclosures that are required in the annual
consolidated financial statements; they should be read in
conjunction with the Group's annual consolidated financial
statements for the year ended 31 December 2022.
There have been no changes in risk management processes or
policies since the year end.
Seasonality
In line with the historical seasonal performance of the
business, there is an expected greater weighting of revenue and
profit derived in the second half of each financial year. This
weighting is mainly driven by the Festival of Marketing Event in
October, growth in Premium Content revenue and timing of Training
and Advisory revenue such as from MW Mini MBA. During the year
ended 31 December 2022, 48% (2021: 47%) of revenue and 39% (2021:
33%) of EBITDA occurred in the first half of the year.
2 Segmental reporting
The Group is organised around two reportable market-facing
segments: Xeim and The Lawyer. These two segments derive revenue
from a combination of premium content, training and advisory,
events, marketing solutions, marketing services and recruitment
advertising. Overhead costs are allocated to these segments on an
appropriate basis, depending on the nature of the costs, including
in proportion to revenue or headcount. Corporate income and costs
have been presented separately as "Central". The Group believes
this is the most appropriate presentation of segmental reporting
for the user to understand the core operations of the Group. There
is no inter-segmental revenue.
Segment assets consist primarily of property, plant and
equipment, intangible assets (including goodwill) and trade
receivables. Segment liabilities comprise trade payables, accruals,
lease liability and deferred income.
Corporate assets and liabilities primarily comprise property,
plant and equipment, intangible assets, current and deferred tax
balances, cash and cash equivalents, short-term deposits,
borrowings.
Capital expenditure comprises additions to property, plant and
equipment and intangible assets.
Xeim The Lawyer Central Group
GBP'000 GBP'000 GBP'000 GBP'000
Six months ended 30 June 2023
Unaudited
Revenue 14,858 4,431 - 19,289
-------------------------------------------------- ----------- ------------- -------- ---------
Adjusted operating profit/(loss) 2,565 1,640 (1,789) 2,416
Amortisation of acquired intangibles (39) - - (39)
Share-based payment expense (167) (60) (340) (567)
Operating profit/(loss) 2,359 1,580 (2,129) 1,810
Finance income 114
Finance costs (142)
-------------------------------------------------- ----------- ------------- -------- ---------
Profit before tax 1,782
Taxation 118
-------------------------------------------------- ----------- ------------- -------- ---------
Profit for the period 1,900
-------------------------------------------------- ----------- ------------- -------- ---------
Segment assets 34,759 18,457 - 53,216
Corporate assets 11,953 11,953
-------------------------------------------------- ----------- ------------- -------- ---------
Consolidated total assets 65,169
-------------------------------------------------- ----------- ------------- -------- ---------
Segment liabilities (13,230) (4,657) - (17,887)
Corporate liabilities (4,664) (4,664)
Consolidated total liabilities (22,551)
-------------------------------------------------- ----------- ------------- -------- ---------
Other items
Capital expenditure (tangible and intangible) 755 45 35 835
-------------------------------------------------- ----------- ------------- -------- ---------
Xeim The Lawyer Central Group
GBP'000 GBP'000 GBP'000 GBP'000
Six months ended 30 June 2022
Unaudited
Revenue 16,138 3,655 - 19,793
-------------------------------------- --------- ----------- -------- ---------
Adjusted operating profit/(loss) 2,759 939 (1,821) 1,877
Amortisation of acquired intangibles (438) - - (438)
Share-based payments (97) (22) (230) (349)
Operating profit/(loss) 2,224 917 (2,051) 1,090
Finance income 6
Finance costs (79)
-------------------------------------- --------- ----------- -------- ---------
Profit before tax 1,017
Taxation (274)
-------------------------------------- --------- ----------- -------- ---------
Profit for the period 743
-------------------------------------- --------- ----------- -------- ---------
Segment assets 37,137 21,513 - 58,650
Corporate assets 12,487 12,487
-------------------------------------- --------- ----------- -------- ---------
Consolidated total assets 71,137
-------------------------------------- --------- ----------- -------- ---------
Segment liabilities (13,763) (5,246) - (19,009)
Corporate liabilities (5,364) (5,364)
Consolidated total liabilities (24,373)
-------------------------------------- --------- ----------- -------- ---------
Other items
Capital expenditure (tangible and
intangible) 654 75 45 774
-------------------------------------- --------- ----------- -------- ---------
Supplemental information
Revenue by geographical location
The Group's revenue from external customers by geographical
location is detailed below:
Six months ended 30 June (unaudited)
------------------------------------------------------------------------
Xeim The Lawyer Total Xeim The Lawyer Total
2023 2023 2023 2022 2022 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 8,499 3,880 12,379 9,805 2,991 12,796
Europe (excluding United
Kingdom) 2,323 187 2,510 2,687 303 2,990
North America 2,116 281 2,397 2,082 283 2,365
Rest of world 1,920 83 2,003 1,564 78 1,642
--------------------------- --------- ----------- --------- ---------- ----------- --------------
14,858 4,431 19,289 16,138 3,655 19,793
--------------------------- --------- ----------- --------- ---------- ----------- --------------
Substantially all of the Group's net assets are located in the
United Kingdom. The Directors therefore consider that the Group
currently operates in a single geographical segment, being the
United Kingdom.
Revenue by type
The Group's revenue by type is as follows:
Six months ended 30 June (unaudited)
------------------------------------------------------------------------
Xeim The Lawyer Total Xeim The Lawyer Total
2023 2023 2023 2022 2022 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Premium Content 5,040 2,514 7,554 4,939 2,256 7,195
Marketing Services 7,025 - 7,025 6,703 - 6,703
Training and Advisory 525 1,179 1,704 1,236 545 1,781
Events 1,248 - 1,248 1,596 - 1,596
Marketing Solutions 914 215 1,129 1,418 317 1,735
Recruitment Advertising 106 523 629 246 537 783
-------------------------- --------- ----------- --------- ---------- ----------- --------------
14,858 4,431 19,289 16,138 3,655 19,793
-------------------------- --------- ----------- --------- ---------- ----------- --------------
3 Net operating expenses
Operating profit/(loss) is stated after
charging/(crediting):
Six months ended 30 June (unaudited)
------------------------------------------------------------------------
Adjusted Adjusting Reported Adjusted Adjusting Reported
results(1) items(1) results results(1) items(1) results
2023 2023 2023 2022 2022 2022
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Employee benefits expense 9,853 - 9,853 9,658 - 9,658
Depreciation of property,
plant and equipment 569 - 569 969 - 969
Amortisation of intangible
assets 8 488 39 527 512 438 950
Impairment of trade
receivables (75) - (75) (37) - (37)
Share-based payment
expense 15 - 567 567 - 349 349
IT expenditure 1,315 - 1,315 1,194 - 1,194
Marketing expenditure 1,092 - 1,092 928 - 928
Other staff related
costs 108 - 108 292 - 292
Other operating expenses 3,523 - 3,523 4,400 - 4,400
--------------------------------- --- ----------- ---------- --------- ----------- ---------- ---------------
16,873 606 17,479 17,916 787 18,703
---------------------------- --- ----------- ---------- --------- ----------- ---------- ---------------
Cost of sales 7,543 - 7,543 7,436 - 7,436
Distribution costs 16 - 16 32 - 32
Administrative expenses 9,314 606 9,920 10,448 787 11,235
16,873 606 17,479 17,916 787 18,703
---------------------------- --- ----------- ---------- --------- ----------- ---------- ---------------
(1) Adjusting items are disclosed in note 4.
4 Adjusting items
Certain items are presented as adjusting. These are detailed
below.
Six months ended 30 June (unaudited)
---------------------------------------
2023 2022
GBP'000 GBP'000
Amortisation of acquired intangible assets 39 438
Share-based payment expense 567 349
Adjusting items to profit before tax 606 787
Tax relating to adjusting items (145) (180)
--------------------------------------------- ------------------- ------------------
Total adjusting items after tax 461 607
--------------------------------------------- ------------------- ------------------
5 Taxation
Six months ended 30 June (unaudited)
---------------------------------------
2023 2022
GBP'000 GBP'000
Analysis of (credit)/charge for the period
Current tax 1,615 53
Deferred tax (1,733) 221
--------------------------------------------- ------------------- ------------------
(118) 274
--------------------------------------------- ------------------- ------------------
The tax (credit)/charge is based on the estimated effective tax
rate for the year ended 31 December 2023 of 23.5% (2022: 22.0%).
During the current period, the Group's tax losses from 31 December
2021 were carried forward rather than being surrendered by way of
group relief against the 2022 taxable profits. This contrasts with
the position that was reflected in the financial statements for the
year ended 31 December 2022. This results in additional taxable
profits of GBP6,926,000 in 2022, and a corresponding increase in
tax losses brought forward at 1 January 2023. Therefore in the
current period, adjustments in respect of prior period have been
made to current tax (GBP1,395,000) and deferred tax (GBP1,753,000)
to reflect the recognition of these tax losses as a deferred tax
asset instead of reducing the current tax charge relating to
2022.
6 Earnings/(loss) per share
Basic earnings per share ('EPS') is calculated by dividing the
earnings attributable to ordinary shareholders by the weighted
average number of shares in issue duri ng the period. 3,766,138
(2022: 3,314,139) shares held in the Employee Benefit Trust and
4,550,179 (2022: 4,550,179) shares held in treasury have been
excluded in arriving at the weighted average number of shares.
For diluted earnings per share the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. This comprises shares relating
to awards granted to Directors and employees under the Group's
share-based payment plans where the exercise price is less than the
average market price of the Company's ordinary shares during the
period.
Basic and diluted earnings per share have also been presented on
an adjusted basis, as the Directors believe that these measures are
more reflective of the underlying performance of the Group. These
have been calculated as follows:
Six months ended 30 June (unaudited)
-------------------------------------------------------------------------
Adjusted Adjusting Reported Adjusted Adjusting Reported
results(1) items(1) results results(1) items(1) results
2023 2023 2023 2022 2022 2022
Profit/(loss) for the period
attributable to owners of
the parent (GBP'000)
( 461 ( 607
Profit/(loss) for the period 2,361 ) 1,900 1, 350 ) 743
------------------------------- -------------- ---------- --------- ------------ ---------- ------------
Number of shares (thousands)
Basic weighted average number
of shares 143,421 143,421 143,421 144,013 144,013 144,013
Effect of dilutive securities
- awards 8,655 - 8,655 8,185 - 8,185
Diluted weighted average
number of shares 152,076 143,421 152,076 152,198 144,013 152,198
------------------------------- -------------- ---------- --------- ------------ ---------- ------------
Earnings/(loss) per share
(pence)
Basic earnings/(loss) per (0. (0. 4
share 1.6 3 ) 1.3 0. 9 ) 0. 5
Fully diluted earnings/(loss) (0. (0. 4
per share 1.6 3 ) 1.3 0. 9 ) 0. 5
------------------------------- -------------- ---------- --------- ------------ ---------- ------------
(1) Adjusting items are disclosed in note 4.
7 Goodwill
2023 2022
GBP'000 GBP'000
Cost
At 1 January and 30 June 81,109 81,109
--------------------------------------------------- --------------- --------
Accumulated impairment
At 1 January and 30 June 39,947 39,947
--------------------------------------------------- --------------- --------
Net book value
--------------------------------------------------- --------------- --------
At 1 January (audited) and 30 June (unaudited) 41,162 41,162
--------------------------------------------------- --------------- --------
At 31 December 2022, a full impairment assessment was performed
over the Group's goodwill, with no impairment required.
At 30 June 2023, the reported interim results remain ahead of
the analysis scenarios used to assess impairment at the year ended
31 December 2022, for which there was no impairment. As such no
indication of impairment has been identified and a full impairment
assessment will be performed on the Group's goodwill and acquired
intangible assets at the year ending 31 December 2023, in line with
IAS 36 'Impairment of Assets'.
8 Other intangible assets
Brands and publishing
Computer software rights* Customer relationships* Total
GBP'000 GBP'000 GBP'000 GBP'000
Net book value
At 1 January 2023 2,099 512 - 2,611
Additions
Separately acquired 849 - - 849
Internally generated 181 - - 181
Amortisation for the period (488) (39) - (527)
At 30 June 2023 (unaudited) 2,641 473 - 3,114
----------------------------- ------------------- ----------------------------- ------------------------- --------
Net book value
At 1 January 2022 2,069 611 422 3,102
Additions
Separately acquired 376 - - 376
Internally generated 220 - - 220
Amortisation for the period (512) (53) (385) (950)
At 30 June 2022 (unaudited) 2,153 558 37 2,748
----------------------------- ------------------- ----------------------------- ------------------------- --------
* Amortisation of acquired intangibles is presented as an
adjusting item.
9 Trade and other receivables
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
GBP'000 GBP'000 GBP'000
Amounts falling due within one year
Trade receivables 3,816 4,348 5,251
Less: expected credit loss (373) (537) (531)
-------------------------------------- ---------- ------------ ----------
Trade receivables - net 3,443 3,811 4,720
Prepayments 1,800 916 1,464
Other receivables 214 430 158
Accrued income 278 200 403
-------------------------------------- ---------- ------------ ----------
5,735 5,357 6,745
------------------------------------- ---------- ------------ ----------
Amounts falling due after one year
Other receivables 176 27 302
-------------------------------------- ---------- ------------ ----------
176 27 302
------------------------------------- ---------- ------------ ----------
As at 30 June 2023, other receivables due after one year
includes GBP162,000 in relation to a deposit on the new London
property lease which is fully refundable at the end of the lease
term. GBP278,000 was included in other receivables due after one
year at 30 June 2022 and included in other receivables due within
one year at 31 December 2022. This was in relation to a deposit for
the previous London property lease which was terminated on 31
December 2022. The lease deposit has decreased from prior year due
to the move to a smaller office space from 1 January 2023.
10 Short-term deposits
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
GBP'000 GBP'000 GBP'000
Short-term deposits 6,000 8,500 3,500
----------------------- ---------- ------------ ----------
In May 2023, GBP6,000,000 was placed in three short-term
deposits. The fixed terms for these deposits range between four to
six months, accruing interest at fixed annual rates between 3.66%
to 3.80%. Interest for these short-term deposits is to be paid on
maturity. These amounts remain on deposit at 30 June 2023.
11 Trade and other payables
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
GBP'000 GBP'000 GBP'000
Amounts falling due within one year
Trade payables 482 727 567
Accruals 7,118 7,590 7,420
Social security and other taxes 1,153 577 1,230
Other payables 658 758 986
-------------------------------------- ---------- ------------ ----------
9,411 9,652 10,203
------------------------------------- ---------- ------------ ----------
12 Lease liability
The lease liability currently held by the Group relates to a
property lease, for which a corresponding right-of-use ('ROU')
asset is held on the condensed consolidated statement of financial
position within property, plant and equipment.
GBP'000
At 1 January 2023 -
Addition of lease liability 2,861
Interest expense 48
Cash outflow (486)
At 30 June 2023 2,423
---------------------------------------------- -------------------
At 1 January 2022 2,384
Interest expense 26
Cash outflow (947)
Addition on remeasurement of lease liability 1,925
At 30 June 2022 3,388
---------------------------------------------- -------------------
Current 918
Non-current 1,505
---------------------------------------------- -------------------
At 30 June 2023 2,423
---------------------------------------------- -------------------
Current 1,900
Non-current 1,488
At 30 June 2022 3,388
---------------------------------------------- -------------------
In June 2022 an option to extend the London office lease was
exercised, resulting in an increase to the lease liability and a
corresponding increase to the ROU asset. Subsequently, in October
2022, an agreement to terminate the lease was signed, bringing the
end date forward to 31 December 2022.
A new lease agreement was entered into with a commencement date
of 1 January 2023 and therefore a lease liability and corresponding
ROU asset were recognised on 1 January 2023. This lease has a term
of three years until 31 December 2025, with lease payments/cash
outflows of GBP972,000 for the first year of the lease term,
increasing by 3.5% annually thereafter.
13 Dividends
Six months ended 30 June (unaudited)
---------------------------------------
2023 2022
GBP'000 GBP'000
Equity dividends
Final dividend for 2021: 0.5 pence per 10 pence ordinary share - 718
Special dividend for 2022: 3.0 pence per 10 pence ordinary share 4,312 -
Special dividend for 2022: 2.0 pence per 10 pence ordinary share 2,875 -
Final dividend for 2022: 0.6 pence per 10 pence ordinary share 859 -
--------------------------------------------------------------------- ------------------- ------------------
8,046 718
----------------------------------------------------------------- ------------------- ------------------
An interim dividend for the six months ended 30 June 2023 of
GBP859,000 (0.6 pence per ordinary share) will be paid on 20
October 2023 to all shareholders on the register as at close of
business on 6 October 2023.
14 Own shares reserve
During the period, the Employee Benefit Trust purchased 653,354
ordinary shares in order to meet future obligations arising from
share-based rewards to employees. The shares were acquired at an
average price of 49.4 pence per share. The total cost of GBP322,000
has been recognised in the own shares reserve in equity.
15 Share-based payments
Six months ended 30 June (unaudited)
---------------------------------------
2023 2022
GBP'000 GBP'000
Share-based payment expense 567 349
--------------------------------- ------------------- ------------------
The Group's share-based payment plans are equity-settled upon
vesting.
The share-based payment expense includes social security
contributions which are settled in cash upon exercise.
A reconciliation of movements in share awards under the
Long-Term Incentive Plan ('LTIP') during the period is shown below.
There were no movements in any other plans therefore they have not
been disclosed. See note 22 in the Group Annual Report for the year
ended 31 December 2022 for details of all plans.
Number of awards
At 1 January 2023 7,334,737
Granted 2,579,381
Forfeited (180,344)
At 30 June 2023 9,733,744
----------------------------- ---------------------
Exercisable at 30 June 2023 1,887,510
----------------------------- ---------------------
During the period LTIP awards were granted to Executive
Directors and selected senior management. The awards granted during
the period were priced using the following model and inputs:
Grant date 12.04.2023
----------------------------------------------- ----------------------
Share price at grant date (pence) 49.00
Weighted average fair value of awards (pence) 47.31
Vesting date 12.04.2026
Exercise price (pence) -
----------------------------------------------- ----------------------
Expected volatility (%) 28.14
Expected dividend yield (%) -
Risk free interest rate (%) 3.75
Valuation model used Stochastic
----------------------------------------------- ----------------------
The LTIP awards granted in 2020 vested and became exercisable on
30 June 2023 as all performance conditions were met. Awards
outstanding and exercisable at 30 June 2023 have an expiry date of
31 December 2023.
16 Cash flow generated from operating activities
Six months ended 30 June (unaudited)
---------------------------------------
2023 2022
Note GBP'000 GBP'000
Profit for the period 1,900 743
Adjustments for:
Tax (credit)/charge 5 (118) 274
Finance income (114) (6)
Finance costs 142 79
Depreciation of property, plant and equipment 569 969
Amortisation of intangible assets 8 527 950
Share-based payment expense 15 567 349
Unrealised foreign exchange differences 31 (84)
Changes in working capital:
Increase in trade and other receivables (663) (656)
Decrease in trade and other payables (614) (1,240)
Increase in deferred income 1,763 2,822
Cash generated from operating activities 3,990 4,200
----------------------------------------------------- ----- ------------------- ------------------
17 Financial instruments
Categories of financial instruments
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised in respect of each class of financial asset, financial
liability and equity instrument are disclosed in note 1(t) in the
Annual Report for the year ended 31 December 2022. All financial
assets and liabilities are measured at amortised cost.
30 June 31 December 30 June
2023 2022 2022
Unaudited Audited Unaudited
GBP'000 GBP'000 GBP'000
Financial assets
Cash and cash equivalents 2,839 7,501 10,738
Short-term deposits 6,000 8,500 3,500
Trade receivables - net 3,443 3,811 4,720
Other receivables 390 457 460
12,672 20,269 19,418
--------------------------- ---------- ------------ ----------
Financial liabilities
Lease liability 2,423 - 3,388
Trade payables 482 727 567
Accruals 7,118 7,590 7,420
Other payables 658 758 986
---------------------------- ---------- ------------ ----------
10,681 9,075 12,361
--------------------------- ---------- ------------ ----------
The Directors consider the carrying value of the Group's
financial assets and liabilities measured at amortised cost is
approximately equal to their fair value.
The following tables detail the level of fair value hierarchy
for the Group's financial assets and liabilities:
Financial assets Financial liabilities
------------------------------------- ---------------------------------
Level 1 Level 3
Cash and cash equivalents Lease liability
Short-term deposits Trade payables
Level 3 Accruals
Trade receivables - net Other payables
Other receivables
------------------------------------- ---------------------------------
All trade and other payables are due in one year or less, or on
demand.
18 Related party transactions
Transactions between Group Companies, which are related parties,
have been eliminated on consolidation and therefore do not require
disclosure. The Group has not entered into any other related party
transactions in the period which require disclosure in these
interim statements.
19 Events after the reporting date
No material events have occurred after the reporting date.
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END
IR NKCBBFBKDFOD
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July 20, 2023 02:00 ET (06:00 GMT)
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