TIDMSCHO
RNS Number : 3127H
Scholium Group PLC
27 July 2023
27 July 2023
Scholium Group plc
('Scholium' or the 'Group')
Preliminary Results for the year ended 31 March 2023
Scholium is pleased to announce the Group's audited results for
the year ended 31 March 2023.
Scholium is engaged in the business of rare books, modern
prints, art and collectibles. Its wholly-owned operating
subsidiary, Shapero Rare Books Limited, is one of the leading UK
dealers trading internationally in rare and antiquarian books and
works on paper, and also trades as Shapero Modern, a leading UK
dealer in the growing marketplace for modern and contemporary
prints.
Operating Highlights
-- An encouraging 12% increase in revenue to GBP9,060k from GBP8,129k
-- Profit before tax restored last year at GBP177k increases to GBP231k this year
-- Group net asset value per share continues to rise from 69p per share to 71p this year
-- Group continues to trade profitably in the first three months of the current year
Financial Highlights
Years ended 31 March (GBP'000) 2023 2022
Revenue 9,060 8,129
Gross Profit 3,447 3,071
Gross Margin 38.1% 37.8%
Profit before tax 231 177
Total earnings pence per share 1.70p 1.13p
NAV/Share 71p 69p
A copy of the 2022 Annual Report (including the notice of Annual
General Meeting ("AGM") will be sent to shareholders and will also
be available on the Company's website in due course at
www.scholiumgroup.com .
The Company's AGM will be held at 10.00am at 106 New Bond
Street, London W1S 1DN on 26 September 2022.
David Harland, Chairman of Scholium, noted " The Board is
delighted with the continued turnaround and remains focused on
further enhancing shareholder value to build upon this pleasing
result. "
For further information, please contact:
Scholium Group plc
David Harland, Chairman
Bernard Shapero, Chief Executive
Philip Tansey, Finance Director +44 (0)20 7493 0876
WH Ireland Ltd - Nominated Adviser
Chris Fielding, Darshan Patel, Andrew de
Andrade +44 (0)20 7220 1666
Chairman's Statement
I am delighted to present my statement and to report that the
Group's revenues for the year ended 31 March 2023 increased by 12%
to GBP9.1 million (2022: GBP8.1 million). The Board's focus on
driving revenue in both books and art has been successfully pursued
and has resulted in a second successive profitable year, with a
profit before tax of GBP231k (2022: GBP177k).
The Board is pleased with the continuing turnaround of the
business and remains focused on further enhancing shareholder value
through evolving revenue channels, keener cost management,
incentivising its staff and continuing to search for further
opportunities in related areas.
Staff
The Group's operations continue to rely on the hard work and
dedication of our small number of employees and I would like to
take this opportunity of thanking them for their contribution and
effort, during the year.
Current Trading and Prospects
Trading conditions initially improved in the year under review,
particularly for the first eight months. The trading environment
then became far more challenging for the last four. However,
trading for the first three months of the current year has been
profitable, which is encouraging. Although the global outlook
continues to be challenging, we remain cautiously optimistic.
Strategy
I and my Board are certain that there is still significant value
that is not fully reflected in these financials which we are
focused on quantifying and exploiting in the coming year with, it
is anticipated, enhanced shareholder value. The first part of our
'job' which has been to secure the business and stabilize its
platform following its exit from the problematic Covid era is
nearing an end and now the second part, the drive towards that
enhanced value, is in progress.
We can never be certain of the continuing effects on our
businesses of Russia's war on Ukraine, or the general political and
financial destablisation of the world. Interest rates continue to
rise and the effects on consumers will be severe. But all of this
is not necessarily bad for us, for our position as a trader in what
might be termed alternative investments could be our salvation.
DAVID HARLAND
Chairman
27 July 2023
Chief Executive Officer's Report
This has been a year of achievement but also one that has
presented its challenges which I expand on below and I am most
thankful for the excellent team with whom I work and who have been
so dedicated and proactive over the year resulting in a second
consecutive year of increased annual Group profit.
Overview
Scholium Group has built upon the success of the financial year
2021/22 with the highlights being;
- 12% increase in revenue;
- Group profitability increased for a second consecutive year;
- A return to a full calendar of major book and art fairs and exhibitions; and
- The securing of our Bond Street offices and shop through to August 2024.
The Year 2022/23
Despite the war in Ukraine, the general state of the market for
Books and Art remained encouraging as the year progressed over the
first eight months. However, the market turned noticeably worse
over the last four months, particularly in Art. Overall revenue
increased by a robust 12% to GBP9,060k (2021: GBP8,129k) which
could have been significantly higher but for the last four months
of the year.
The return to a full calendar year of fairs clearly benefitted
sales but not in all cases, and not without a major increase in
distribution costs that were severely impacted by inflationary
pressures in associated costs of carriage, insurance and
others.
Taking all this into account, the Group recorded an increased
profit before tax of GBP231k (2022: GBP177k).
Looking forward
It is encouraging to report that the performance of the business
in the first three months of the new financial year has been in
line with our expectations and remains profitable. Global economic
headwinds that really came to the fore in the latter part of the
financial year ended March 2023 still present major challenges but
a more forensic focus on costs, particularly around fairs and
marketing, and the promotion of our multi-channel sales routes of
retail premises, an extensive online presence and exhibitions at
international trade fairs will, I believe, maintain the positive
momentum going forward, in the current year.
Staff
I have a fabulous team around me without whom the positive
results for the year could not have been achieved and I thank them
for their dedication and hard work throughout the year.
Shareholders
I am delighted with the support and guidance received from my
fellow Board members and our major shareholders and look forward to
taking the Group to future success.
BERNARD SHAPERO
Group Chief Executive
27 July 2023
Strategic Report
This report provides an overview of the Group's strategy and
business model; gives a review of the performance of the operating
entities and of the financial position at 31 March 2023 and it sets
out the principal risks to which the Group is exposed. In addition,
it comments briefly on the future prospects of the business.
Principal Activities & Review of the Business
The Group comprises four legal entities; Scholium Group PLC (the
"Company") which is the publicly traded holding company which
incurs the central costs of the group and its three wholly owned
subsidiaries, Shapero Rare Books Limited which is the only trading
entity as detailed below and two dormant companies, Scholium
Trading Limited and Mayfair Philatelic Limited. The four together
are referred to as the "Group".
The Group is engaged in the business of dealing in rare books
and fine art. The majority of the business transacted is as a
dealer - buying, owning and selling items, either on its own or
together with third parties who also deal as principals. The Group
also conducts auctions where both its own stock and third-party
consignments are available for sale. The Group generates value
through its expertise, astute buying and the profitable sale of
stock.
Shapero Rare Books is the main business of the Group. It is a
leading international dealer in rare and collectible books and
works on paper with special expertise in Natural History,
Illustrated, Travel and Exploration and Literature trading under
the name of Shapero Rare Books. The business also trades as Shapero
Modern in modern and contemporary prints and limited editions by
established artists.
Strategy & Key Objectives
The Group's strategy is to:
-- build, organically or by acquisition, a portfolio of rare
books and art focused businesses to enable further growth of its
revenue and profit streams;
-- attract individuals or teams of specialists in markets
complementary to the Group's existing businesses;
-- optimise working capital in existing businesses to provide
funds for new business development; and,
-- trade alongside other dealers in high value rare books and
art and participate in the acquisition for onward sale of large
consignments.
Review of the year from continuing operations
The Group's revenues increased to GBP9.1m from GBP8.1m in the
prior year due to increased sales in each of the constituent
businesses. The Group's core business was profit making during the
both the first and second half of the financial year. Gross profit
increased by 12% compared with the prior year ended 31 March 2022,
and the margin made on sales rose from 37.8% last year to 38.1% in
the year ended 31 March 2023 as a result of increased activity in
the market and the active drive by management to improve such
margins.
Total expenses rose 22% to GBP3,175k (2022: GBP2,602k) driven by
direct costs with the return of art fairs and accompanying
marketing costs increasing over the year. Central costs, including
the costs of the Company's membership of AIM, were reduced on
account of the prior year incurring a one-off director payment.
The Group's profit before tax for the year to 31 March 2023 was
GBP231k (2022: GBP177k).
An analysis of the Group's profit before tax for the year to 31
March 2023 between the two halves of the financial year is set out
in the table below:
(GBP'000) H1* H2 Full year
total
Revenue 4,454 4,606 9,060
Gross Profit 1,731 1,716 3,447
Profit before tax 179 52 231
*H1 Unaudited figures published November 2022
The value of the Group's stock at 31 March 2023 was GBP9,812k
compared with the prior year's total of GBP9,584k and G roup cash
at 31 March 2023 was in net overdraft at GBP(54)k. Furthermore, the
original GBP250k Covid bank loan, that was taken in 2020, was
reduced by repayment over the year from GBP235k to GBP187k. The
Group's overdraft facility of GBP500k remains in place and from
time-to-time, depending on timing differences in significant
purchases and onward sales, was drawn during the year.
Key Performance Indicators
The Group is managed by and reports on a few key performance
indicators (KPIs).
The current principal KPIs are:
-- sales, gross profit, gross margin and profit before tax;
-- the breadth and distribution of the stock of rare books held by the Group;
-- stock turnover; and
-- cash position.
Key Performance Indicators (on continuing business)
Years ended 31 March (GBP'000) 2023 2022 Variance
Revenue 9,060 8,129 12%
Gross Profit 3,447 3,071 12%
Gross Margin 38.1% 37.8% 1%
Stock Turnover (months) 21.0 22.8 -8%
Net (borrowings) / Net cash (241) 466 n/a
Net Profit before tax 231 177 64%
Group Performance
Shapero Rare Books
Shapero Rare Books Limited (SRB) traded profitably through the
year ended 31 March 2023 off the back of increased activity in
physical as well as on-line sales and an increasingly busy and full
calendar of trade fairs. The year's sales were GBP9,060k, 12% above
the prior year's sales of GBP8,129k, and gross profit at GBP3,447k
for the year ended 31 March 2023 was, again, 12% above the prior
year of GBP3,071k.
Direct costs, including the attendance at fairs, exhibitions,
and catalogues, increased from GBP340k in the prior year to GBP815k
in the year to 31 March 2023. This reflected the increasing return
of exhibiting at fairs in the first full calendar year of events
since exiting Covid. Administrative costs increased 4% from
GBP1,853k in the prior year to GBP2,026k in the year to 31 March
2023. Financial expenses for the year were GBP41k (2022:
GBP33k).
SRB therefore recorded a profit before tax of GBP565k compared
with the GBP904k in the prior year.
Mayfair Philatelics - closed
The Board took the decision in the prior financial year to close
the business. The results of that business have been presented and
treated as discontinued business within these report and accounts
and the impact of this treatment is fully explained in note 14 to
these accounts. The full provision against future costs of closure
taken in the prior year was sufficient to offset any incurred
actual costs and consequently, with the exception of some
immaterial items, there is no discontinued business impact in the
results for this financial year.
Central Costs
Central costs, which are incurred by the holding company,
Scholium Group PLC, include the Board members as well as those
costs associated with the Group's AIM public status. The central
costs were GBP334k in the year to 31 March 2023, a decrease of
GBP75k from the prior year's total of GBP409k on account of a
one-off payment in the prior year, including associated social
security costs, to a former director of GBP90k. These costs include
the cost of managing the Group, its audit, tax and professional
fees, as well as the costs of maintaining the AIM membership for
the Company's shares.
Year ended 31 March 2023 (GBP ' 000)
Shapero Rare Books Scholium Continuing
Books Gallery Trading* Central business
Revenue 7,283 1,777 - - 9,060
Gross Profit 2,841 606 - - 3,447
Gross Margin 39% 34% - - 38%
Profit/(Loss)
before tax 565 - (334) 231
*Following the closure of the legal entity in 2020 the trading
name of Scholium Trading was discontinued with any residual sales
and costs being taken through the results of Shapero Rare
Books.
Year ended 31 March 2022 (GBP'000)
Shapero Rare Books Scholium Continuing
Books Gallery Trading Central business
Revenue 6,088 1,823 218 - 8,129
Gross Profit 2,418 648 63 - 3,071
Gross Margin 39% 35% 29% - 38%
Profit/(Loss)
before tax 850 54 (409) 494
Dividend
The Board does not propose to declare a dividend for the
financial year ended 31 March 2023. (2022: GBPNil)
Alternative accounting presentation
The Board is focused on enhancing shareholder return. It is
important therefore for an analysis of the core performance of the
Group's trading business to be prepared excluding those costs that
are more concerned with the non-trading elements such as the costs
of maintaining its public company status and other non-directly
related or one-off costs not typically expected to be incurred in a
'normal' year.
Year ended 31 March (GBP ' 000) 2023 2022 2021
Pre-tax Profit / (Loss) for the year 231 177 (434)
----- ------ ------
Add back:
----- ------ ------
Central costs 334 409 314
----- ------ ------
Discontinued business losses - 317 3
----- ------ ------
Depreciation & amortisation (Note 6) 347 231 322
----- ------ ------
Finance expenses (Note 11) 41 33 30
----- ------ ------
Re-stated EBITDA for the year 953 1,167 235
----- ------ ------
Principal Risks & Uncertainties
Continuing supply of rare books, works on paper and prints.
By definition, rare books and other works on paper and prints
are not commonly available. The availability of fresh stock of such
items onto the market is often driven by major life events, such as
inheritance, unrecovered debt, divorce or downsizing due to
economic malaise. The business of Shapero Rare Books is reliant
upon individual works and collections of works coming onto the
market and upon the Group being able to access those business
opportunities. There is no guarantee that fresh stock will come
onto the market in sufficient quantities to meet the Group's plans
for continued growth.
When works become available for sale or purchase, they are often
dealt with privately and discretely and, accordingly, there is no
guarantee that the Group's employees will be able to access such
business opportunities or to negotiate successfully the purchase of
fresh stock coming onto the market.
Reliance on key international trade fairs
A significant proportion of the Group's sales are made at
international trade fairs. If these fairs were to be discontinued
it would have a material effect on the ability of the Group to sell
its stock. There are a limited number of stands at international
trade fairs and as a result places are highly sought after. Whilst
the Group have been exhibiting at these fairs for many years, there
can be no certainty that it will continue to secure places in the
future.
Competition
The market in the books and works on paper and prints in which
the Group trades is competitive and the Group faces various
competitive pressures from auctioneers as well as a wide range of
dealers and smaller operators.
The Group is likely to face continued and/or increased
competition in the future both from established competitors and/or
from new entrants to the market. The Group's competitors include
businesses with greater financial and other resources than the
Group. Such competitors may be in a better position than the Group
to compete for future business opportunities. If the Group is
unable to compete effectively in the markets in which it operates,
it could lead to a material adverse effect on the Group's business,
financial condition, and operations.
Co-owned goods
In the case of high value items or collections, the Group will
often acquire the items jointly with another third-party bookseller
or dealer and if not expressly provided for there is a risk that
the Group will not be able to sell the entire asset without the
agreement of all joint owners. In this and other respects the Group
relies on the honesty and integrity of other dealers. Whilst the
Group takes care to deal only with established counterparties and
experienced dealers who are well known to senior management and/or
the Directors, there can be no guarantee that co-owners will comply
with the agreed terms (including, for example not changing the
items) or that such co-owners will not enter into administration or
other insolvency procedure, and in the event there is a loss of the
co-owned goods it is uncertain the Group could claim on its
insurance policy in relation thereto.
Stock valuation and liquidity
The Group trades in rare items, which may be highly illiquid.
The value of goods acquired is difficult to assess and it may not
be possible for the Group to sell the assets at or above the price
for which they were acquired. The value of assets may not always
represent the actual resale value achievable.
Theft, loss or damage
Rare and collectible items are highly mobile goods. Furthermore,
such goods are frequently transported internationally for trade
shows or other marketing opportunities. Whilst precautions are
taken to ensure safe passage, the Group's assets may be lost,
damaged or stolen. While the Group carries specialist insurance,
there is no guarantee that the Group's insurance cover will be
adequate in all circumstances. Assets of the Group will be placed
with third parties for sale on commission. While the Group intends
to take appropriate precautions when placing assets with third
parties, there is a risk that these assets outside of the Group's
direct control may be stolen or replaced by unscrupulous third
parties with fakes or forgeries.
Authenticity and export authority
The Directors of the Group will ensure that due diligence is
undertaken on the authenticity of the assets acquired for sale.
Nonetheless fakes and forgeries do exist in the market and despite
due diligence the Group may acquire these believing them to be
authentic. Further, the attribution of works to a writer or artist
is not always an exact science, and there can be no guarantee that
assets of the Group will not have been mistakenly attributed in
this way. Lack of authenticity is not covered by the Group's
insurance. Whilst the Group takes appropriate care when acquiring
works which may be of material importance in the state of origin,
there can be no guarantee that works acquired by the Group are not
subject to restrictions on export or sale.
Insurance
The Group carries a specialist insurance policy under the
Antiquarian Booksellers Association Insurance Scheme which covers
each of the businesses. The Directors believe that the Group
carries appropriate insurance for a business of its size and nature
but there can be no guarantee that the extent or value of the cover
will be sufficient, in relation to stock in transit or on
consignment. The Directors review the Group's insurance
arrangements on an annual basis and endeavour to insure its stock
adequately, but there is no certainty that future claims will not
fall within the exclusions under the policy or that the insurer
will pay out any claim if made. Further, there can be no guarantee
that the necessary insurance will be available to the Group in the
future at an acceptable cost or at all.
Premises
Like many of the established dealers in the market, the Group
has publicly accessible galleries in Mayfair, London from where it
operates and sells both books and works of art. Although there is a
risk that the increasing demand for online retail will render 'high
street' premises uneconomic, the Directors believe that a central
London location is an important factor in the success of the
business as a whole.
Terms of sale
In the past, the contractual arrangements which the Group has
entered into with clients, customers and other dealers have not
always included (amongst other things) terms dealing specifically
with:
1. transfer of ownership and risk,
2. contract formation,
3. price and payment,
4. limitations and exclusions of liability, and
5. governing law and jurisdiction.
There is no guarantee that the Group's arrangements with its
customers will not be terminated on short notice or that the Group
will not at some future time face challenges or disputes regarding
the contractual or other arrangements with its clients.
If the Group became involved in a contractual dispute and/or a
third party was successful in any contractual dispute with the
Group, any resultant loss of revenues or exposure to litigation
costs or other claims could have a material adverse effect on the
Group's reputation, business, financial condition and/or operations
or financial results. The Group has revised its standard terms of
sale to seek to ensure that, henceforth, the arrangements with
clients, customers, dealers and others will include terms dealing
with each of the aforementioned areas.
Employees
The Group is reliant on a small number of key employees, and in
particular the Chief Executive Officer, for their knowledge and the
reliance customers place on their integrity and service. If a key
employee was to leave, the business may suffer a short term
decrease in performance whilst it adjusts to the level of resources
available to it.
Currency risk
The Group conducts certain transactions other than in Pounds
Sterling, its functional currency. Movements in foreign exchange
rates may impact the Group's performance. The Group does not enter
into any hedging contracts in respect of currency positions.
Pandemics and government-imposed trading restrictions
The recent Covid-19 pandemics led to the closure of the Group's
retail premises for several months and the cancellation of all
fairs and exhibitions. The Group has other ways to market,
including the internet, telephone and post, but it may be difficult
for the Group to trade profitably while such a pandemic is
present.
Future prospects
The Group has traded profitably in the first three months of the
current year. The core business of Shapero Rare Books is one of the
leading UK rare book dealers, with a solid international customer
base. Further attention will be required in order to continue to
improve its return on capital employed, particularly stock
turnover. The Board has implemented several initiatives to target
this.
The Board continues to review the opportunity for further cost
savings to improve the Group's profitability and create improved
shareholder value. During the year ending 31 March 2024 the Board
will assess opportunities for future property, enhanced selling
channels and improving the sales of slower-moving and aged
stock.
Consolidated Statement of Comprehensive Income
Year ended Year ended
31 Mar 31 Mar
2023 2022
Note GBP000 GBP000
Revenue 5 9,060 8,129
Cost of Sales (5,613) (5,058)
Gross profit 3,447 3,071
----------- -----------
Distribution expenses (815) (340)
----------- -----------
Administrative expenses (2,360) (2,262)
Total expenses (3,175) (2,602)
----------- -----------
Profit from operations 272 469
Financial (expense) 11 (41) (33)
Other income 12 - 58
Profit before taxation 231 494
Income tax (expense) 13 - -
Profit for the year from continuing operations and total comprehensive income
attributable
to equity holders of the parent company 231 494
----------- -----------
Loss from discontinued operations 14 - (317)
Profit for the year and total comprehensive income attributable to equity
holders of the
parent company 231 177
----------- -----------
Earnings per share (in pence): 15
From continuing operations 1.70 3.63
From discontinued operations - (2.33)
----------- -----------
Total Earnings per share 1.70 1.30
----------- -----------
Scholium Group Plc Company number 08833975
Consolidated Statement of Financial Position
31 Mar 31 Mar
2023 2022
Note GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 16 877 970
Intangible assets 17 - 4
Deferred corporation tax asset 19 - -
877 974
------- -------
Current assets
Inventories 20 9,812 9,584
Trade and other receivables 21 2,058 2,219
Cash and cash equivalents 23 110 705
11,980 12,508
------- -------
Total assets 12,857 13,482
------- -------
Current liabilities
Bank overdrafts 23 164 -
Trade and other payables 24 1,973 2,868
Loans and borrowings 25 47 47
Right-of-use asset lease liabilities 28 227 193
Total current liabilities 2,411 3,108
------- -------
Non-current liabilities
Loans and borrowings 25 140 188
Right-of-use asset lease liabilities 28 676 787
------- -------
Total non-current liabilities 816 975
------- -------
Total liabilities 3,217 4,083
------- -------
Net assets/liabilities 9,630 9,399
------- -------
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 26 136 136
Share Premium 9,516 9,516
Merger reserve 27 82 82
Retained (loss) (104) (335)
Total equity 9,630 9,399
------- -------
Consolidated Statement of Changes in Equity
Share Share Merger Retained Total
Capital Premium reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
-------- -------- -------- --------- -------
Balance at 31 March 2020 136 9,516 82 (75) 9,659
(Loss) for the year from continued
and discontinued operations - - - (437) (437)
Total comprehensive income
for the period - - - (437) (437)
-------- -------- -------- --------- -------
Balance at 31 March 2021 136 9,516 82 (512) 9,222
Profit for the year from continued
and discontinued operations - - - 177 177
Total comprehensive income
for the period - - - 177 177
-------- -------- -------- --------- -------
Balance at 31 March 2022 136 9,516 82 (335) 9,399
Profit for the year from continued
and discontinued operations - - - 231 231
-------- -------- -------- --------- -------
Total comprehensive income for
the period - - - 231 231
-------- -------- -------- --------- -------
Balance at 31 March 2023 136 9,516 82 (45) 9,630
-------- -------- -------- --------- -------
There were no transactions with owners in the year.
The following describes the nature and purpose of each reserve within owners' equity:
Share capital Amount subscribed for shares at nominal value.
Share premium Amount subscribed for share capital in excess of nominal value less attributable share issue
expenses.
Merger reserve Amounts attributable to equity in respect of merged subsidiary undertakings.
Retained earnings Cumulative profit/(loss) of the Group attributable to equity shareholders.
Consolidated Statement of Cash Flows
31 Mar 31 Mar
2023 2022
GBP000 GBP000
Cash flows from operating activities
profit before tax 231 177
Depreciation of property, plant and equipment 353 231
Amortisation of intangible assets 4 4
Interest paid 41 33
629 445
(Increase)/decrease in inventories (228) (559)
Decrease/(increase) in trade and other receivables 161 (530)
Increase/(decrease) in trade and other payables (895) 1,560
Net cash generated from operating activities (333) 916
------- -------
Cash flows from investing activities
Purchase of property, plant and equipment (21) (26)
Purchase of right-to -use assets (239) -
Net cash (used) in investing activities (260) (26)
------- -------
Cash flows from financing activities
Lease repayments for right-of-use assets (77) (165)
Bank loan (48) (15)
Interest paid (41) (7)
Net cash (used) from financing activities (166) (187)
------- -------
Net increase/(decrease) in cash and cash equivalents (759) 703
Cash and cash equivalents at the beginning of the year 705 2
Cash and cash equivalents at the end of the year (54) 705
------- -------
Scholium Group Plc Company number 08833975
Company Statement of Financial Position
31 Mar 31 Mar
2023 2022
Note GBP000 GBP000
------- -------
Assets
Non-current assets
Group Investments 18 2,391 2,391
Deferred tax asset - -
2,391 2,391
------- -------
Current assets
Trade and other receivables 21 7,559 7,115
Cash and cash equivalents 22 (164) (160)
7,395 6,955
------- -------
Total assets 9,786 9,346
------- -------
Current liabilities
Trade and other payables 24 143 59
Loans and borrowings 25 47 47
Total current liabilities 190 106
Non-current liabilities
Loans and borrowings 25 140 188
Total liabilities 330 294
------- -------
Net assets/liabilities 9,456 9,052
------- -------
Equity and liabilities
Equity attributable to owners of the parent
Ordinary shares 26 136 136
Share Premium 9,516 9,516
Merger reserve 27 - -
Retained earnings/(deficit) (196) (600)
Total equity 9,456 9,052
------- -------
Statement of Changes in Company Equity
Share Share Merger Retained Total
Capital Premium reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
-------- -------- -------- ------------- --------
Balance at 1 Apr 2020 136 9,516 - 40 9,962
Loss for the year - - - (231) (231)
Total comprehensive income for the period - - - (231) (231)
-------- -------- -------- ------------- --------
Write-off of merger reserve
Write-off of merger reserve - - (2,809) - (2,809)
Balance at 31 March 2021 136 9,516 - (191) 9,461
(Loss) for the year - - - (409) (409)
--------
Total comprehensive income for the period - - - (231) (231)
-------- -------- -------- ------------- --------
Balance at 31 March 2022 136 9,516 - (600) 9,052
Profit for the year - - - 404 404
Total comprehensive income for the period - - - 404 404
-------- -------- -------- ------------- --------
Balance at 31 March 2023 136 9,516 - (196) 9,456
-------- -------- -------- ------------- --------
The following describes the nature and purpose of each reserve within owners' equity:
Share capital Amount subscribed for shares at nominal value.
Share premium Amount subscribed for share capital in excess of nominal value less attributable share-issue
expenses.
issue expenses.
Merger reserve Amounts attributable to equity in respect of merged subsidiary undertakings.
Retained earnings Cumulative profit/(loss) of the Group attributable to equity shareholders.
Company Cashflow
31 Mar 31 Mar
2023 2022
GBP000 GBP000
Cash flows from operating activities
Profit/(Loss) before tax 404 (409)
Interest paid - 7
404 (402)
Decrease/(increase) in trade and other receivables (444) 349
(Decrease)/increase in trade and other payables 84 (26)
Net cash generated from operating activities 44 (79)
------- -------
Cash flows from investing activities
Dividends receivable from subsidiary undertakings - -
Net cash generated from investing activities - -
------- -------
Cash flows from financing activities
Bank loan (48) (22)
Net cash (used)/generated from financing activities (48) (22)
------- -------
Net (decrease) in cash and cash equivalents (4) (101)
Cash and cash equivalents at the beginning of the year (160) (59)
(Overdraft)/cash and cash equivalents at the end of the year (164) (160)
------- -------
Notes to the Consolidated Financial Statements
1 General information
Scholium Group plc and its subsidiaries (together 'the Group')
are engaged in the trading and retailing of rare books, works on
paper and stamps primarily in the United Kingdom. The Company is a
public company limited by shares domiciled and incorporated in
England and Wales (registered number 08833975). The address of its
registered office is 106 New Bond Street, London W1S 1DN.
2 Basis of preparation and accounting policies
The financial statements have been prepared in accordance with
International Financial Reporting Standards including standards and
interpretations issued by the International Accounting Standards
Board and in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006.
The consolidated and Company financial statements have been
prepared on an historical cost basis.
The preparation of financial statements in conformity with IFRSs
requires the use of certain accounting estimates. It also requires
management to exercise its judgement in the process of applying the
Group's accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements are
disclosed in note 3 below.
The functional and presentational currency of the Group and the
Company is pounds sterling. The financial information is shown to
the nearest GBP1,000.
The principal accounting policies applied by the Group in the
preparation of these consolidated financial statements for the
years ended 31 March 2023 and 31 March 2022 are set out below.
These policies have been consistently applied to all periods
presented.
Going concern
The Directors have reviewed the activities of the Group since 1
April 2022 with a view to determining whether there are any
material uncertainties which may impact whether the Group can be
considered to be a going concern. The Group's primary activities
can be classified as retail, and therefore the Directors have
considered the Group's position in the light of the retail industry
as a whole as well as the Group's own circumstances. The Group's
leases on its retail premises are at relatively low rents, and in
the case of the New Bond Street lease, has a relatively short term
date of August 2023 which is currently subject to a negotiated 12
month short-term lease extension. The Group therefore does not have
any exposure to any onerous leases. The Group has an international
customer base and is not dependent on footfall generating sales
from its London premises, or its presence at international
fairs.
The Group in 2020 made use of a government GBP250,000 Covid
loan, which at the year-end date, following repayments made during
the year, has GBP187,500k outstanding. This is repayable over five
years and therefore is not exposed to any liabilities where the
terms of repayment may change. The Group has no creditors over one
year, and no liabilities to a defined benefit pension scheme.
The Group has enjoyed a second consecutive successful year and
continues to expand sales channels with its own online auctions.
The Directors have prepared revised "stressed" forecasts taking
account of the results to date, current expected demand, and cost
savings identified. This has been conducted together with an
assessment of the liquidity headroom against the cash and bank
facilities including the new Covid loan.
The Directors recognise that the current difficult geo-political
and resulting economic environment could impact business but have
concluded that there are no material uncertainties over the Group
and Company's ability to continue as a going concern. The Directors
have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the next 12 months,
therefore it is appropriate to adopt a going concern basis for the
preparation of the Financial Statements. Accordingly, these
financial statements do not include any adjustments to the carrying
amount or classification of assets and liabilities that would
result if the Group and Company were unable to continue as a going
concern.
3 Revenue
31 Mar 31 Mar
2023 2022
Group Group
GBP000 GBP000
Sales of Stock - Books 7,042 6,016
Sales of Stock - Gallery 1,777 1,823
Commissions 177 279
Other income 64 11
9,060 8,129
------- -------
4 Profit Before Taxation
Profit before taxation is after charging/(crediting): 31 Mar 31 Mar
2023 2022
Group Group
GBP000 GBP000
Depreciation of property, plant and equipment (note 16) 347 231
Amortisation of intangible assets 4 4
Foreign currency losses - 2
Employee costs (note 7) 736 936
Fees payable to the Company's auditors (note 9) 38 38
5 Employee costs including Directors
31 Mar 31 Mar
2023 2022
Group Group
GBP000 GBP000
Wages 663 819
Social security costs 50 70
Pension costs 15 32
Other employee benefits 8 15
736 936
------- -------
All employee costs are included in administrative expenses.
Defined contribution pension schemes.
The Group operates a defined contribution retirement benefit
scheme for qualifying employees. The total cost charged of GBP38k
(2022: GBP32k) represents contributions payable to the scheme by
the Group at rates specified in the plan rules. As at 31 March
2023, contributions due in respect of the current reporting period
of GBP3k (2022: GBP3k) not paid over to the schemes are included
within payables.
6 Directors' remuneration
31 Mar 31 Mar
2023 2022
Group Group
GBP000 GBP000
Salaries and fees 375 192
Social security costs 43 26
Pension costs 23 6
Other employee benefits 15 8
One-off payments to an ex-Director - 79
------- -------
Total 456 311
------- -------
Information regarding the highest paid Director,
Bernard Shapero (2022: Jasper Allen):
Salary 204 120
Benefits 28 5
------- -------
Total 232 125
------- -------
There are two (2022 - two) directors accruing a defined
contribution pension liability.
The Directors are considered to be the Company's key management
personnel.
7 Income tax
31 Mar 31 Mar
2023 2022
GBP000 GBP000
Current tax (credit)/expense
Current tax - -
Deferred tax - -
Total tax expense - -
---------- ---------
The charge for the year can be reconciled to the profit per the income statement as follows:
31 Mar 31 Mar
2023 2022
GBP000 GBP000
Profit before tax 291 177
---------- ---------
Applied corporation tax rates: 19% 19%
Tax at the UK corporation tax rate of 19% (2022: 19%): 44 34
Tax payable covered by available tax losses (44) (34)
Tax losses not recognised as deferred tax assets
Origination and reversal of temporary differences - -
Taxation charge - -
---------- ---------
8 Discontinued Operations
In the year ended 31 March 2022 the Board determined that the
Mayfair Philatelic business was not key to the future of the Group
and in accordance with IFRS5 - Non-current assets held for sale and
discontinued business, the results for Mayfair Philatelic were
shown as Discontinued operations in the income statement of the
2022 year-end and the prior period; its assets and liabilities were
recorded at the lower of the carrying value and fair value less
costs to sell in the financial statements for that financial year.
The provisions taken in the accounts for the year-ended 31 March
2022 were sufficient to absorb losses incurred in closing the
business in financial year ended 2022. An analysis of the
individual line items are shown below,
Financial performance and cash flow information
31 Mar 31 Mar
2023 2022
Group Group
GBP000 GBP000
Revenue - 680
Cost of sales - 374
Gross profit - 306
Distribution expenses - (74)
Administration expenses - (409)
Impairment charge - debtors - (40)
Impairment charge - stock - (100)
Profit / (loss) before tax - (317)
Tax - -
Loss from discontinued operations - (317)
------- -------
Net cash generated / (used) by the discontinued business was
GBPnil (2022: (GBP77))
Assets and liabilities of discontinued business
No assets or liabilities relating to Mayfair Philatelic are
included within the relevant line of the Group Consolidated
statement of financial position as at 31 March 2023.
9 earnings per share
31 Mar 31 Mar
2023 2022
Group Group
GBP000 GBP000
Profit used in calculating basic and diluted earnings
per share attributable to the owners of the parent
Continuing operations 231 494
Discontinued operations - (317)
Total 231 177
Number of shares
Weighted average number of shares for the purpose
of basic and diluted earnings per share 13.6m 13.6m
------- -------
Basic earnings per share from continuing
operations (pence per share) 1.70 3.63
Basic (loss) per share from discontinued
operations (pence per share) - (2.33)
------- -------
Total basic and diluted earnings pence
per share 1.70 1.30
------- -------
All shares shown above are authorised, issued and fully paid up.
Ordinary shares carry the right to one vote per share at general
meetings of the Company and the rights to share in any distribution
of profits or returns of capital and to share in any residual
assets available for distribution in the event of a winding up.
10 Investment in subsidiaries
31 Mar
2023
Company
GBP000
At 7 January 2014: nominal value of shares issued 28
Fair-value adjustment taken to merger reserve 2,809
Write-off of merger reserve on 31 March 2020 (2,809)
Deferred consideration 2,363
----------------------------------
Balance at 31 March 2023 2,391
Balance at 31 March 2022 2,391
The investments in Group undertakings are originally recorded at cost which is the fair-value
of the consideration paid. At 31 March 2019 the amount was GBP5,200,000. The Company's merger
reserve was written off as at 31 March 2020 due to the assessment of the subsidiary company's
value following the adverse impact of Covid-19. As such, the investment is now valued at GBP2,391,000.
The principal subsidiaries of the Company, all of which are incorporated in the UK and wholly
owned have been included in the consolidated financial information, are: Shapero Rare Books
Ltd (a dealer in rare books and art), Scholium Trading Ltd and Mayfair Philatelics Ltd. Scholium
Trading Ltd and Mayfair Philatelics Ltd. are dormant companies, their activities having been
transferred in to Shapero Rare Books Limited in 2020.
11 Deferred Corporation Tax
31 Mar 31 Mar
2023 2022
Group Group
GBP000 GBP000
Balance at the beginning of the year - -
Income statement - -
Balance at the end of the year - -
------- -------
Deferred tax has historically been calculated in full on
temporary differences under the liability method using the tax
rates expected for future periods of 19%. The deferred tax had
arisen in past periods due to the availability of trading losses.
The Group, on account of recent profits, has GBP238,000 unutilised
tax allowances available at expected tax rates for use in future
periods at the year-end date (2022: GBP282,000).
12 Inventories
31 Mar 31 Mar
2023 2022
Group Group
GBP000 GBP000
Finished goods 9,812 9,584
Finished goods expensed in the year 5,613 5,058
------- -------
Note that the cost of sales incurred in the year ended 31 March
2023 was GBP5.6million (2021: GBP5.1million) and there were no
impairment charges taken in either year.
13 Trade & other receivables
31 Mar 31 Mar 31 Mar 31 Mar
2023 2022 2023 2022
Group Group Company Company
GBP000 GBP000 GBP000 GBP000
Trade debtors 1,713 1,700 - -
Other debtors 25 24 - 2
Amounts due from Group undertaking - - 7,460 7,102
Prepayments and accrued income 320 495 99 11
2,058 2,219 7,559 7,115
------- ------- -------- --------
The age profile of trade debtors comprises: GBP000
Current 700
One month past due 152
Two months past due 355
Over three months past due 506
Provision for doubtful debts -
1,713
------------
At 31 March 2023, trade receivables of GBPnil (31 March 2022 GBP158k, 31 March 2021 GBPnil)
were considered past due and impaired. The other debtor balances are categorised as loans
and receivables. All amounts shown under trade and receivables are due for payment within
one year. Some receivables will be settled against trade payables in due course.
Amounts due from Group undertakings are unsecured,
interest-free, have no fixed date of repayment and are repayable on
demand.
14 Loans and Borrowings
31 Mar 31 Mar
2023 2022
Group and Company Group and Company
GBP000 GBP000
Bank loan
At the beginning of the year 235 250
(Repaid) in the year (48) (15)
At the end of the year 187 235
------------------ ------------------
Bank loan liabilities maturity analysis
Due within one year 47 47
Due after more than one year 140 188
Total loans and borrowings 187 235
---- ----
15 Share Capital
31 Mar 31 Mar
2023 2022
Group and Company Group and Company
GBP000 GBP000
Ordinary shares of GBP0.01 each
At the beginning of the year 136 136
------------------ ------------------
At the end of the year 136 136
------------------ ------------------
Number of shares 31 Mar 31 Mar
2023 2022
Group and Company Group and Company
Ordinary shares of GBP0.01 each Number Number
At the beginning of the year 13,600,000 13,600,000
------------------ ------------------
At the end of the year 13,600,000 13,600,000
------------------ ------------------
All shares shown above are authorised, issued and fully paid up.
Ordinary shares carry the right to one vote per share at general
meetings of the Company and the rights to share in any distribution
of profits or returns of capital and to share in any residual
assets available for distribution in the event of a winding up.
16 Right of use Asset lease Liabilities
31 Mar 31 Mar
2023 2022
Group Group
GBP000 GBP000
Land and buildings and motor vehicle 903 980
------- -------
Lease liability maturity analysis
Due within one year 227 193
Due after more than one year 676 787
Total right-of-use lease liabilities 903 980
---- ----
See also note 16 for the corresponding asset. All right-of-use
liabilities were classified as current in the previous period. The
charge for the year for depreciation of right of use assets was
GBP317k (2021: GBP198k).
17 Post balance sheet date events
Property Leases
Following the year-end, the lease for the Group's property at
105 and 106 New Bond Street, which were due to come to an end in
August 2023, were renegotiated with a revised term date of 31
August 2024.
Employee Option Scheme
In June 2023 the Company granted options under the Company's
Enterprise Management Incentive Share Option Scheme ("EMI Option
Scheme") over a total of 1,000,000 ordinary shares of 1 penny in
the Company ("Option Shares") to certain employees of which 700,000
were granted to Directors as detailed within the Remuneration
report. The Option Shares have an exercise price of 37.5p per share
(being the closing mid-market share price on 16 June 2023), vest
over the three years from the date of grant (ensuring the employees
remain in continuous employment within the Group) and once vested,
are exercisable at any time up to ten years after the date of
grant.
There have been no other material events directly affecting the
Group since the end of the financial year date.
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END
FR FLFIRDAIRFIV
(END) Dow Jones Newswires
July 27, 2023 02:00 ET (06:00 GMT)
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