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Bonhill Group PLC
29 November 2018
 

 

Strictly embargoed until: 7.00 a.m., 29th November 2018

 

 

Bonhill Group plc

("Bonhill" or the "Company")

 

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2018

 

Bonhill Group plc (AIM: BONH), a leading B2B media business specialising in three key areas: Business Information, Live Events and Data & Insight, today announces its unaudited interim results for the six months ended 30 September 2018.

 

Operational and Financial Highlights:

 

·      Name change to Bonhill Group plc, the first symbolic step in transforming the business into a new entity with a significantly updated strategy for growth

·      Successful fundraising of £19.2 million to provide the Company with a strong financial base from which to execute its new growth strategy with a radically improved and supportive shareholder base

·      Successful acquisition of InvestmentNews, the market leading brand for financial advisers in the US

·      Organic growth strategy driven by good progress in our existing events - up 42% on a like for like basis and the launch of new brands such as DiversityQ.com

·      Post-period end, the successful launch of Women in IT Dublin and San Francisco and Women in Finance Dublin

·      Recruitment of high calibre staff in both territories (UK and US) to support transformation into a leading media, data and events provider

·      Revenue increased to £2.7 million (2017: £1.0 million) with only six weeks' contribution in this period from InvestmentNews

·      Adjusted EBITDA loss of £0.4 million (2017: loss of £0.2 million), reflecting continued investment in the business in advance of the acquisition of InvestmentNews

·      Significantly improved balance sheet: healthy cash position of £5.0 million as at 30 September 2018 (30 September 2017: £2.1 million), to support future growth plans and proactive acquisition strategy

·      Net assets as at 30 September 2018 increased to £21.8 million (30 September 2017: £2.7 million)

·      Underlying revenue in line with expectations and on track to move into profit (pre-adjusting items) for the 9 month period ending 31 December 2018

 

Commenting on the results, Simon Stilwell, Chief Executive of Bonhill, said:

"It has been another period of quite dramatic change for Bonhill. The old underlying business is in a much better shape, growing in scale and reputation and delivering a combination of high quality events and content for its various communities. The acquisition of InvestmentNews is a major step forward in our strategy and brings a high quality, highly profitable market leading brand with further growth potential into the Company.

 

"We are discovering that the opportunities InvestmentNews affords us are even greater than we first thought. It has a number of positive effects, not least of all its revenue, profit and cash generation which provide a proper platform for us to continue our plans. The scale, nature and reach of our operations, the quality of the business we now undertake and the people we employ are transformed from the same period last year."

 

Commenting on outlook he added:

"While underlying revenue is in line with expectations for the 9 month period ending 31 December 2018, in the short term, our primary objective is to ensure that Bonhill moves back into profit. The loss in the six months ended 30 September 2018 reflects the scale of change and the investment required to restore the business onto a sensible platform. The acquisition of InvestmentNews, and the progress we have made with the existing businesses, should see the Company report a profit (before adjusting items) in the current financial period to 31 December 2018, a testament to the hard work done by every member of the team.

 

"We are confident that the new strategy, underpinned by investment into the robust core businesses, positions the Company well for the future. We look forward to driving the business forward over the coming years while at the same time creating value for shareholders."

 

-ends-

 

 

For further enquiries please contact:

 

Bonhill Group plc

+44 (0)20 7250 7035

Simon Stilwell, Chief Executive

David Brown, Group Finance Director

 

 

Stockdale Securities Limited (Nominated Adviser and Joint Broker)

+44 (0)20 7601 6100

Tom Griffiths

Ed Thomas

 

 

Canaccord Genuity Limited (Joint Broker)

Simon Bridges

Ben Griffiths

 

+44 (0)20 7523 8000

Belvedere Communications (Financial PR)

+44 (0)20 3687 2757

John West

Kim van Beeck

 

 

 

About Bonhill Group plc

 

Bonhill Group plc is an AIM-quoted leading B2B media business specialising in three key areas: Business Information, Live Events and Data & Insight in three key sectors: Technology, Financial Services and Diversity. Bonhill's ambition is to create content that informs, communities that engage and brands that inspire in order to enable a better business environment for our sponsors and clients.

 

Flagship titles include: InvestmentNews, SmallBusiness.co.uk, Growth Company Investor, Information Age, GrowthBusiness.co.uk and What Investment. Bonhill is also responsible for a growing portfolio of high-profile events, including The Quoted Company Awards, Women in IT Awards Global Series, Women in Finance Awards Global Series, British Small Business Awards, Women Advisor Summit, Women to Watch, Diversity & Inclusion Summit and Retirement Income Summit, amongst others.

 

For more information visit www.bonhillplc.com 

 

 

 

Chairman's Statement

 

As we announce these half year results, the Company is barely recognisable from the autumn of 2017 when the new management team took over. The now transformed Bonhill Group plc stands on a much better footing; with a clear strategy, a strong balance sheet, the necessary investment funds and an attractive market opportunity.

 

It has been an extremely busy period of activity in all areas of the Company as it continues the transformation and development of the old business into the new, but I am delighted that the strategy presented post-autumn 2017 is working.

 

Since then, we have acquired InvestmentNews in the US, the market leading brand which directs the communication between global asset managers and the wider US financial adviser community. The title launched in 1997 as a weekly publication and now comprises an award winning website and a range of events and data products. We believe there is a major opportunity to develop the brand further. The management team has already made substantial progress in this regard, with changes to pricing strategies, culture, recruitment, data products and event development. There is still much to do to fully realise its potential, but the early signs are very promising and it is on track to exceed our expectations at the time of acquisition.

 

During the reported period, we also completed a successful £19.2 million fundraising, the proceeds of which, in part, were used for the acquisition of InvestmentNews, but also for the VCT qualifying element, which will be used to invest and develop our other business areas. In particular, the Company will use these proceeds to strengthen our technology offering, data products and sales and marketing capabilities.

 

In order to cement Bonhill in its new corporate identity and to merge with our US base, we have changed our year end to align ourselves with InvestmentNews and to give a more balanced first half/second half split. Furthermore, we also undertook a 40:1 consolidation of the shares.

 

To that end, our year end is now 31 December, which will result in the second "half" of the current financial "year" being a short three month period and the full "year" being only a nine month period (both to 31 December 2018 respectively). While we have not declared a dividend for the six months ended 30 September 2018, as an indication of the Company's success, we intend to declare a maiden dividend in respect of the interim results for the six months ending 30 June 2019 and the process for us to be able to pay that dividend has already begun.

 

I would like to take this opportunity to thank the team, the vast majority of which are new to the business, for their contribution to the success of Bonhill, as well as to all to our shareholders (new and old), for their support during the fundraising and acquisition of InvestmentNews and finally our communities and stakeholders.

 

We look forward to the next year with enthusiasm and optimism for our industry, our customers, our employees and our brand partners around the world.

 

Neil Sachdev

Non-Executive Chairman

 

 

Chief Executive's Statement

 

Introduction: A Transformational Period

It has been another period of quite dramatic change for Bonhill, as the refreshed strategy that the newly strengthened Board presented in late 2017 comes to fruition. Importantly, the experienced management team, along with the Board, is really starting to influence the business at all levels as they action and integrate the new direction of the Company.

 

In May 2018, we announced the appointment of David Brown as Group Finance Director. David brings a wealth of complementary experience to the new and refreshed management team. He has proven execution capability in acquisitions, understands the plc environment and we are very pleased to have appointed somebody of his calibre.

 

The old underlying business is now in a much better shape, growing in scale and reputation and delivering a combination of high quality events and new refreshed content for its various communities. There is still work to do here, but with the various changes we have made and in progress we have seen a marked uplift in site traffic and a better sales pipeline.

 

Acquisition strategy in action: InvestmentNews

Significantly, this is the first set of results that incorporates InvestmentNews, albeit only six weeks' contribution in the period. The acquisition is a major step forward in our strategy and brings a high quality, highly profitable market leading brand into the Company.

 

It has a number of positive effects, not least of all its revenue, profit and cash generation which provide a proper platform for us to continue our plans. We are discovering that the opportunities it affords us are even greater than we first thought with opportunity in live events, data and research.

 

We look forward to 2019 with confidence, as we have recently recruited a new and talented head of Digital, who will oversee the largest part of the business. We have already expanded the events portfolio, best evidenced by the growth in the "Women Adviser" summit series from four in 2018, to six planned for 2019 and an expanded events team will help continue the growth in all event activities.

 

With a new head of Digital and an improved technology platform, we are currently looking at how to augment InvestmentNews' data products with our own data sources and third party suppliers. This is likely to have a positive impact in the second half of 2019. Custom research products are growing extremely well and will be a big feature in 2019 and beyond. There is a new energy in the InvestmentNews brand and a renewed invigorated purpose, all of which bodes well.

 

Operational Highlights

The scale, nature and reach of our operations, the quality of the business we now undertake, and the people we employ are barely recognisable from the same period last year.

 

Not only has it been a period of rapid change, but it has also been a busy stage as the business successfully implements its new plans. As we have continued to build Bonhill, it is important to note some of the following important operational and strategic milestones that we have achieved:

 

·      The internal operational and financial platform is largely in place to facilitate future growth;

·      The business strategy is clear and being implemented to grow market share in our chosen Technology, Financial and Diversity sectors;

·      We are developing the quality and range of Business Information, Live Events and Data & Insight propositions for business communities both in the UK and US;

·      Existing brands have been refocused and reinvigorated (e.g. Information Age) while new brands have been launched e.g. DiversityQ.com;

·      The investment in a new technology platform at the heart of our business strategy has started with product selection complete and vendor selection and implementation partner negotiations underway;

·      Our acquisition strategy to support the organic business growth strategy began with the purchase of InvestmentNews and new opportunities are being actively discussed and considered; and

·      The internal development of existing teams and the recruitment of new talent, as well as initiatives to improve corporate culture are successfully underway.

 

Business model: utilising all our assets and maximising data cross-overs

Our combination of live events and owned media assets mean that we can deliver a high-quality, fully rounded offering for our clients meeting their objectives. As a key B2B media partner, we can help businesses engage at the right level, and with the right audience, but importantly also maintain that engagement over a longer time frame.

 

It is our belief that the life cycle of an event has lengthened and this gives our brand partners, sponsors and clients greater exposure to the market and people they are seeking to address. We can help control that access with our websites, publications and communities. It is likely that many of our new event launches will be more focused on summits and conferences to run alongside our awards programmes, as we believe that there are some clear and interesting opportunities in this area, whilst also generating higher margins over the longer term.

 

The collection, processing and utilisation of data remains a key focus and, in conjunction with our technology investment, we are seeking to make material progress in the coming year on our wider data offering. It has been helped in the short term by the acquisition of InvestmentNews which already has a range of data products. We are looking to recruit a new Head of Products to drive our strategy in this area. Data should be the foundation for our business decisions and we have already seen the benefit of its use in the targeted roll out of our growing events portfolio.

 

As a part of that progress, our various UK based websites have been undergoing various forms of enhancement either by way of editorial direction, content management or brand refresh. The collective results are all very encouraging and we have seen a positive increase in traffic and dwell times on all of our websites compared to last year. For instance, total website users during the reported period increased to 2.73 million (2017: 2.07 million).

 

Growth in our business communities and core propositions

At the time of the acquisition of InvestmentNews, we presented a clear strategy to provide Business Information, Live Events and Data & Insight services to three business communities: Technology, Financial Services and Diversity.

 

We are developing for each of these communities a range of live events and media assets to deliver Business Information as well as other revenue generating activities.

 

As experts in their particular areas, our teams are well positioned to grow and develop their sectors, supported by a central resource of event knowledge, editorial and financial support.

 

Our ambition is to develop all of these areas by creating high quality content that informs and engages our communities, so that we can further interact with them through our Live Events and data products. Over time, we will grow these communities, sharing best practice across them and improve our understanding of how to effectively access our audiences.

 

We have focused on key sponsors in the period as we roll out our Events portfolio which has been helped by the move to multi-year and multi-location sponsorship. 'Women in IT', in particular, has enabled us to secure greater visibility on revenue by offering longer term partnerships with key sponsors in a range of geographies. We have conducted extensive research in this area and believe that there is a major opportunity to develop our offering and revenue streams. The flagship Women in IT Awards which will be held in London on 30 January 2019 is proving a huge success and we are already seeing attendance levels and sponsorship packages in excess of last year. We recently held our inaugural Women in IT - Dublin event, attended by 475 people which, as a launch event, was bigger than our launch event in London 4 years ago. It had an amazing reception and an exceptional list of sponsors. Tonight sees the launch of 'Women in IT' - Silicon Valley with attendance likely to be in excess of 400 people. The successful launch of these two events confirms that we have a global event series and we are planning the next phase of its global expansion.

 

Similarly, the Women in Finance Awards, which was launched in June 2017 to address a lack of diversity in that community, has continued to grow in popularity. The second event was held in June 2018 with increased attendance and revenue. We also recently held our inaugural Women in Finance - Dublin event which was attended by 300 people and again had a terrific array of sponsors.

 

We believe the gender diversity issue is not just related to these two industries and our growth plan is twofold; to grow and launch these events internationally, but also to look at other sectors and other diversity issues outside of gender, including social mobility, ethnicity, disability and LGBTQ. We are looking to Asia in 2019 and the recent success in two new countries supports my view that this is a global brand which gives me tremendous confidence that we can continue to export its offering.

 

During the period, we have also refreshed our financial services titles, which include InvestmentNews, What Investment and Growth Company Investor. What Investment has had an editorial change and a rebranding that has seen a marked improvement in readership and better advertising returns. It is encouraging to see the response to our efforts in reinvigorating the product from its loyal subscription base.

 

As well as our titles, we also have awards that support the community. In particular, the Grant Thornton Quoted Company Awards, which focuses on the people behind the businesses in the quoted company arena, continues to do well and is scheduled for its 20th year in February 2019.

 

Our SME assets, which include SmallBusiness.co.uk and GrowthBusiness.co.uk, continue to reach an audience of over 240,000 monthly active users. As a way to utilise this client and readership base, we also run the British Small Business Awards, and this year saw the Festival of Small Business which saw good support from the Minister for Small Business, Kelly Tolburst MP. We believe that UK based SMEs will continue to be a key part of the UK economy and, therefore, we will be holding more activities to help small businesses both at a national and a regional level. Our Small Business Grants Initiative, which makes a monthly £5,000 grant to a qualifying business continues to grow and is an example of how we can help build a stronger community of small businesses. This year has already seen specific issues around GDPR, Brexit and changes in the high street banking system all of which have put additional pressures on smaller companies and we strive to provide informative solutions and ideas for business owners.

 

Technology Infrastructure and Investment

We have earmarked £1.2 million for our technology investment which will see us migrate away from the current InvestmentNews vendors' infrastructure and create an efficient solution across the wider group. The first steps have already been taken with a global supplier of IT support, the architectural plans are ready and vendor selection is now complete. The technical build out will commence shortly alongside some short-term tactical fixes to improve revenue.

 

Conclusion and outlook

After some years of instability and change, the new Bonhill Group is now in a much stronger position. The changes in strategy and sector focus, and with a new Board and management team in place, have enabled us to change the path of the business towards growth and profitability.

 

We have a more robust balance sheet which has enabled us to launch new events and rapidly develop our leadership in specific sectors, as well as to further develop our existing brands.

 

The acquisition of InvestmentNews is the first step in changing the reach and scale of the business and gives an early indication of the ambition of the management team as we look forward to developing the mix and reach of the business further.

 

We are proactively exploring other acquisition opportunities and our key criteria remain aligned with our existing sectors, complementary to our focus on Business Information, Live Events and Data & Insight and also aligned to our geographic plans. We have identified a number of opportunities that would fit extremely well with the Company.

 

While underlying revenue is in line with expectations for the 9 month period ending 31 December 2018, in the short term, our primary objective is to ensure that Bonhill moves back into profit. The loss in the six months ended 30 September 2018 reflects the scale of change and the investment required to restore the business onto a sensible footing. The acquisition of InvestmentNews and the progress we have made with the existing businesses should see the group return to profit (before adjusting items) in the current financial period to 31 December 2018, a testament to the hard work done by every member of the team.

 

We are confident that the new strategy, underpinned by investment into the robust core business, positions the Company well for the future.

 

We look forward to driving the business forward over the coming years while at the same time creating value for our shareholders and our communities.

 

 

Simon Stilwell

Chief Executive

 

 

 

Financial Review

 

Income statement

In these results, we refer to adjusted results as well as the equivalent statutory measures. Adjusted results are prepared to provide additional relevant information on our future or past performance where equivalent information cannot be presented using financial measures under IFRS. Adjusted results exclude adjusting items, acquisition costs and amortisation of intangible assets acquired through business combinations, as set out in note 5 below.

 

 

Sept 2018

6 months

(unaudited)

£'000

Sept 2017

6 months

(unaudited)

£'000

Revenue

2,661

1,009

 

 

 

Adjusted EBITDA loss

(415)

(194)

Depreciation / amortisation of internal generated intangibles

(64)

(17)

Share option charge

(26)

(1)

Adjusted operating loss

(505)

(212)

Finance costs

(45)

(1)

Adjusted loss before tax

(550)

(213)

Adjusted tax credit

17

-

Adjusted loss

(533)

(213)

Adjusting items

(1,956)

(29)

Statutory loss

(2,489)

(242)

Adjusted loss per share

(4.50)p

(12.62)p

Statutory loss per share

(21.01)p

(14.34)p

 

Revenue grew 164% to £2.661m (2017: £1.009m). This included 6 weeks of trade from InvestmentNews which contributed £1.708m.

 

Bonhill UK revenues comprised three like-for-like events which grew 42%, and the launch of the new Future Stars of Tech event which contributed £0.096m of new revenue. The Investor Allstars event which was run after the period end had contributed £0.243m of revenue in 2017. In total, Events delivered £0.648m of revenue, up 3% on the comparable period in the prior year. Other UK activities continued at the same rate as the second half of last year, but lower than the first half of last year, generating revenue of £0.305m (2017: £0.378m).

 

Adjusted earnings before interest, depreciation and amortisation ("EBITDA") is a measure of earnings and cash generative capacity. A reconciliation of adjusted EBITDA to statutory earnings is set out in note 6. An adjusted EBITDA loss of £0.415m (2017: £0.194m loss) was driven by the reduced level of higher margin media sales generated, and the continued investment made to strengthen the Company's management team.

 

Adjusting items comprised £1.823m (2017: £nil) of acquisition related costs and £0.165m (2017: £0.029m) relating to amortisation of intangible assets acquired, together with tax on these items of £0.032m.

 

On an adjusted basis, the retained loss was £0.533m (2017: £0.213m), equivalent to 4.50p per share (2017: 12.62p per share). The statutory loss for the year was £2.489m (2017: £0.242m), equivalent to 21.01p per share (2017: 14.34p per share).

 

Cash flow

 

 

Sept 2018

6 months (unaudited)

£'000

Sept 2017

6 months

(unaudited)

£'000

Adjusted EBITDA

(415)

(194)

Working capital movement

(296)

237

Interest paid

(41)

(1)

Foreign exchange gains or losses

9

-

Purchases of property, plant and equipment and intangible assets

(78)

(11)

Free cash (outflow)/inflow

(821)

31

Acquisition of InvestmentNews

(12,867)

-

Acquisition costs

(1,560)

-

Proceeds from issue of ordinary shares

19,247

2,051

Repayment of invoice discounting and other borrowing

-

(93)

Net cash inflow

3,999

1,989

 

Working capital was well controlled, with a £0.296m increase as a result of working capital requirements following the acquisition of InvestmentNews.

 

Net of £1.3m of costs, £19.2m of share placing proceeds were raised in the period (2017: £2.051m), of which £12.9m was used as part consideration to acquire InvestmentNews, and £1.4m paid out relating to acquisition costs, leading to a net cash inflow of £3.999m (2017: £1,989m).

 

Balance sheet

Accounting policies and treatments were thoroughly reviewed last year, which led to a number of prior period adjustments (detailed in note 8), the most significant of which is the commencement of amortisation of publishing rights. Together, these adjustments have reduced the reported profit for the six months ended 30 September 2017 by £0.029m, and the opening balance sheet as at 1 April 2017 by £0.566m.

 

At 30 September 2018, the business had a healthy cash balance of £5.003m (2017: £2.105m).

 

Trading update

InvestmentNews continues to perform ahead of our expectations at the time of its acquisition, and in the 10 months to 31 October 2018 had delivered unaudited sales of $15.9m, up 18% on the same period last year - a trend that we would expect to see continued to the end of the 9 month period ending 31 December 2018.  In the UK, live events continue to grow over last year, with encouraging sales already booked for the first quarter of 2019.  UK media sales, the smallest part of our business, remains flat against last year but with recent investment we are seeing growth in website traffic which is encouraging for the 2019 outlook.

 

Given the strong performance of InvestmentNews, we have taken the opportunity to accelerate our investment plans to grow our sales, marketing and support functions to enable continued growth in 2019 and beyond.

 

 

 

David Brown

Group Finance Director

 

 

 

Consolidated statement of comprehensive income

for the six month period ended 30 September 2018

 

 

6 month period ended 30 September 2018

(unaudited)

6 month period

ended 30 September 2017

(unaudited)

 

Adjusted results

£'000

Adjusting items

£'000

Statutory results

£'000

Adjusted results

£'000

Adjusting items

£'000

Statutory results

£'000

 

 

 

 

 

 

 

Revenue

2,661

-

2,661

1,009

-

1,009

Net operating expenses

(3,102)

(1,823)

(4,925)

(1,204)

-

(1,204)

Depreciation

(33)

-

(33)

(4)

-

(4)

Amortisation

(31)

(165)

(196)

(13)

(29)

(42)

Net operating loss

(505)

(1,988)

(2,493)

(212)

(29)

(241)

Finance costs

(45)

-

(45)

(1)

-

(1)

Loss before tax

(550)

(1,988)

(2,538)

(213)

(29)

(242)

Income tax credit

17

32

49

-

-

-

Loss for the period

(533)

(1,956)

(2,489)

(213)

(29)

(242)

 

 

 

 

 

 

 

Basic loss per share attributable to the owners of the parent

(4.50p)

 

(21.01p)

(12.62p)

 

(14.34p)

 

 

 

 

Consolidated statement of financial position

at 30 September 2018

 

 

30 September 2018

(unaudited)

£'000

30 September 2017

(unaudited)

£'000

NON-CURRENT ASSETS

 

 

Goodwill

13,605

729

Other intangible assets

9,515

839

Property, plant and equipment

84

8

Deferred tax asset

79

-

Right-of-use asset

1,009

-

 

24,292

1,576

 

 

 

CURRENT ASSETS

 

 

Trade and other receivables

5,070

319

Cash and cash equivalents

5,003

2,105

 

10,073

2,424

TOTAL ASSETS

34,365

4,000

 

 

 

NON-CURRENT LIABILITIES

 

 

Deferred tax liability

(2,383)

-

Financial liability

(387)

-

 

(2,770)

-

 

 

 

CURRENT LIABILITIES

 

 

Trade and other payables

(4,467)

(1,253)

Income tax liability

(30)

-

Borrowings

(4,607)

(55)

Financial liability

(658)

-

 

(9,762)

(1,308)

TOTAL LIABILITIES

(12,532)

(1,308)

 

 

 

NET ASSETS

21,833

2,692

 

 

 

EQUITY

 

 

Share capital

4,325

4,025

Share premium

26,715

4,315

Share option reserve

26

118

Other reserves

104

104

Accumulated losses

(8,970)

(5,870)

Foreign exchange reserve

(367)

-

TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT

21,833

2,692

 

 

 

 

Consolidated statement of changes in equity

for the six month period ended 30 September 2018

 

(Unaudited)

Share capital

 

£'000

Share premium

 

£'000

Share option reserve

£'000

Other reserves

 

£'000

Accumulated losses

 

£'000

Foreign exchange reserve

£'000

Total

 

 

£'000

 

 

 

 

 

 

 

 

Balance as at 31 March 2017 as reported

2,950

3,369

118

104

(5,072)

-

1,469

Prior year adjustments (note 8)

-

-

-

-

(556)

-

(556)

Balance as at 31 March 2017 as restated

2,950

3,369

118

104

(5,628)

-

913

Total comprehensive loss for the period

-

-

-

-

(242)

-

(242)

Issue of share capital

1,075

946

-

-

-

-

2,021

Balance as at 30 September 2017

4,025

4,315

118

104

(5,870)

-

2,692

Total comprehensive loss for the period

-

-

-

-

(729)

-

(729)

Issue of share capital

-

-

-

-

-

-

-

Balance as at 31 March 2018

4,025

4,315

118

104

(6,599)

-

1,963

Total comprehensive loss for the period

-

-

-

-

(2,489)

-

(2,489)

Issue of share capital

300

22,400

-

-

-

-

22,700

Removal of share option scheme

-

-

(118)

-

118

-

-

Share option charge

-

-

26

-

-

-

26

Foreign currency translations

-

-

-

-

-

(367)

(367)

Balance as at 30 September 2018

4,325

26,715

26

104

(8,970)

(367)

21,833

 

 

 

 

Consolidated statement of cash flows

for the six month period ended 30 September 2018

 

 

6 month period ended

30 September 2018

(unaudited)

£'000

6 month period ended

30 September 2017

(unaudited)

£'000

CASH (USED IN) / GENERATED FROM OPERATIONS

(812)

43

Interest paid

(41)

(1)

NET CASH (USED IN) / GENERATED FROM OPERATING ACTIVITES

(853)

42

 

 

 

INVESTING ACTIVITES

 

 

Purchases of property, plant and equipment

(64)

(5)

Purchases of intangible assets

(14)

(6)

Cash paid for acquisition

(12,867)

-

Exceptional costs

(1,560)

-

NET CASH USED IN INVESTING ACTIVITIES

(14,505)

(11)

 

 

 

FINANCING ACTIVITIES

 

 

Proceeds from issue of ordinary shares

19,247

2,051

Repayment of invoice discounting facility and other borrowings

-

(93)

NET CASH GENERATED FROM FINANCING ACTIVITIES

19,247

1,958

 

 

 

FOREIGN EXCHANGE MOVEMENT

110

-

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

3,999

1,989

 

 

 

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD

1,004

116

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

5,003

2,105

 

 

 

 

1. Basis of preparation

 

The financial information presented in this announcement has been prepared in accordance with the recognition and measurement requirements of EU Endorsed International Financial Reporting Standards and IFRIC interpretations ("IFRS") and the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

 

With the exception of the standards outlined in note 2, the principal accounting policies adopted in the preparation of the financial information in this announcement are unchanged from those used in the Company's financial statements for the year ended 31 March 2018 and are consistent with those that the Company has applied in its financial statements for the year ended 31 March 2018.  

 

The financial information set out above does not constitute the Company's statutory accounts for the six month period ended 30 September 2018 or the six month period ended 30 September 2017. Statutory accounts for the year ended 31 March 2018 have been reported on by the Independent Auditor.  The Independent Auditor's Report on the Annual Report and Financial Statements for 2018 and 2017 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.   Statutory accounts for the year ended 31 March 2018 have been filed with the Registrar of Companies.

 

2. Changes in accounting policy

 

The following relevant standards, amendments and interpretations to existing standards have been published and are mandatory for accounting periods beginning after 1 January 2018:

 

• IFRS 9 Financial Instruments

• IFRS 15 Revenue from Contracts with Customers

 

It is not anticipated that the above standards will have a material impact on the Group financial statements in the period of initial application.

 

The following standard has been published and is mandatory for accounting periods beginning after 1 January 2019:

 

• IFRS 16 Leases

 

This standard has been early adopted by the group and therefore the lease held by InvestmentNews to rent their US office has been accounted for in line with IFRS 16. The consolidated statement of comprehensive income for the six month period to 30 September 2018 includes £4,961 of interest and £31,103 of amortisation of the right to use asset in line with IFRS 16. Refer to note 10 for further details on the lease.

 

If the lease had been accounted for according to IAS 17, it would have been treated as an operating lease and so the impact on the consolidated statement of comprehensive income for the six month period to 30 September 2018 would have been a rental expense of £46,735. Therefore, the total impact of early adoption is to reduce the loss for the period by £10,671 with an improvement of £46,735 to EBITDA.

 

3. Revenue

 

For executive management purposes, the business has one reportable segment. No analysis is made below the revenue line and no further analysis of the income statement or financial position is carried out.

 

 

6 month period ended

30 September 2018

(unaudited)

£'000

6 month period ended

30 September 2017

(unaudited)

£'000

Analysis of revenue by core propositions

 

 

Business Information

1,659

376

Live Events

835

633

Data & Insight

167

-

Total

2,661

1,009

 

 

 

Analysis by country

 

 

United Kingdom

953

1,009

United States

1,708

-

Total

2,661

1,009

 

 

 

 

4. Operating loss

 

Operating loss for the period has been arrived at after charging the following items:

 

 

6 month period ended

30 September 2018

(unaudited)

£'000

6 month period ended

30 September 2017

(unaudited)

£'000

Depreciation of property, plant and equipment

(33)

(4)

Amortisation of purchased or internally generated intangible assets

(31)

(13)

Share option charge

(26)

(1)

Foreign exchange gain or loss

(15)

-

 

 

5. Adjusting items

 

The group incurred certain costs in 2017 and 2018 which the Directors believe should be disclosed as adjusting items as set out below.

 

 

6 month period ended

30 September 2018

(unaudited)

£'000

6 month period ended

30 September 2017

(unaudited)

£'000

Acquisition costs

1,823

-

Amortisation of intangibles acquired through business combination

165

29

 

1,988

29

 

 

 

The tax effect of the adjusting items is a credit of £32,064.

 

6. Reconciliation of adjusted EBITDA to statutory earnings

 

Earnings before interest, depreciation and amortisation ("EBITDA") is a measure of earnings and cash generative capacity. Adjusted EBITDA, which excludes non-recurring items, facilitates an understanding of underlying earnings and cash generative capacity. A reconciliation of Adjusted EBITDA to statutory earnings is set out below.

 

 

6 month period ended

30 September 2018

(unaudited)

£'000

6 month period ended

30 September 2017

(unaudited)

£'000

Adjusted EBITDA

(415)

(194)

Adjusting items

(1,823)

-

EBITDA

(2,238)

(194)

Depreciation

(33)

(4)

Amortisation and impairment

(196)

(42)

Share option charge

(26)

(1)

Operating loss

(2,493)

(241)

Net finance costs

(45)

(1)

Loss before tax

(2,538)

(242)

Taxation

49

-

Loss after tax

(2,489)

(242)

 

 

7. Earnings per share

 

Basic loss per share is calculated by dividing the loss attributable to owners of the parent by the weighted average number of ordinary shares in issue during the year.

 

Based on statutory earnings

6 month period ended

30 September 2018

(unaudited)

£'000

6 month period ended

30 September 2017

(unaudited)

£'000

Loss attributable to owners of the parent

(2,489)

(242)

Weighted average number of ordinary shares in issue

11,842,132

1,687,470

Basic earnings per share (pence per share)

(21.01p)

(14.34p)

Basic earnings per share (pence per share) - as previously stated

 

(0.32p)

Effect of prior period adjustments and share re-organisation

 

(14.02p)

 

 

 

Based on adjusted earnings

6 month period ended

30 September 2018

(unaudited)

£'000

6 month period ended

30 September 2017

(unaudited)

£'000

Loss attributable to owners of the parent

(533)

(213)

Weighted average number of ordinary shares in issue

11,842,132

1,687,470

Basic earnings per share (pence per share)

(4.50p)

(12.62p)

Basic earnings per share (pence per share) - as previously stated

 

(0.32p)

Effect of prior period adjustments and share re-organisation

 

(12.30p)

 

 

8. Prior period adjustments

 

Adjustments have been made to the comparative period 1 April 2017 to 30 September 2017 compared to the interim announcement made last year based on adjustments identified in the 31 March 2018 Annual Report.

 

The following adjustments have been included in earlier periods, affecting profit and therefore the brought forward reserves. All of these adjustments were identified and included in the 31 March 2018 Annual Report.

 

Impact on statement of profit or loss

Earlier

£'000

30 September 2017

£'000

Amortisation

(484)

(29)

Administrative expenses

(72)

-

Total

(556)

(29)

 

 

 

Impact on equity for the group

 

 

Intangibles

(484)

(29)

Trade and other payables

(72)

(30)

Net impact on equity

(556)

(59)

 

Amortisation - change of accounting policy

During the year ended 31 March 2018, the Board reviewed the accounting approach to intangible assets, and adopted an accounting policy of amortising publishing rights. The Board estimated a useful economic life of 20 years. As no amortisation was provided previously, this resulted in an additional amortisation charge and a corresponding cumulative reduction in intangible assets.

 

VAT control accounts

The Group also reviewed the historical balances on VAT control accounts and found VAT costs, largely relating to surcharges, that had been deferred to the VAT debtor in the 2017 balance sheet. An adjustment of £31,268 has been made to increase administrative expenses with a corresponding increase in the VAT creditor.

 

Directors' salary accruals

During the year ended 31 March 2018, the Group paid Non-executive Directors fees relating to prior years which had not been accrued in the 2017 balance sheet. A prior year adjustment has been made to increase 2016 Directors' fees by £41,158 with a corresponding increase in payables.

 

Equity adjustments

During the year ended 31 March 2018, fees relating to the issue of share capital were noted that were missed in the interim statement to 30 September 2017. Consequently, an adjustment of £30,000 has been made to reduce the share premium as at 30 September 2017 with a corresponding increase in payables. Similarly, a £99,000 adjustment has been made to increase other reserves and correspondingly reduce share premium due to a misallocation of costs related to the share issue made as at 30 September 2017.

 

9. Called up share capital

 

Issued and fully paid ordinary shares of 1p each.

 

 

Number

£'000

As at 31 March 2017

64,561,632

646

Shares issued during the 6 month period

107,500,000

1,075

As at 30 September 2017

172,061,632

1,721

Shares issued during the 6 month period

-

-

As at 31 March 2018

172,061,632

1,721

Administrative issue of shares

8

-

Impact of 40:1 share re-organisation

(167,760,099)

(1,678)

Shares issued during the 6 month period

29,998,437

300

As at 30 September 2018

34,299,978

343

 

 

Deferred shares of 9p each.

 

 

Number

£'000

As at 31 March 2017, 30 September 2017 and 31 March 2018

25,603,787

2,304

Impact of 40:1 share re-organisation

18,640,011

1,678

As at 30 September 2018

44,243,798

3,982

 

 

 

 

 

10. Lease

 

The group has chosen to early adopt IFRS 16 and therefore recognise a right-of-use asset and lease liability.

 

Right-of-use asset

£'000

Carrying value as at 1 April 2018

-

Additions to right-of-use assets

1,065

Amortisation charged

(31)

Foreign exchange impact of revaluation

(25)

Carrying value as at 30 September 2018

1,009

 

 

Lease liability

 

Carrying value as at 1 April 2018

-

Additions to lease liability

1,065

Interest charged

(5)

Repayments made

-

Foreign exchange impact of revaluation

(15)

Carrying value as at 30 September 2018

1,045

 

 

11. Notes to the cash flow

 

 

6 month period ended

30 September 2018

(unaudited)

£'000

6 month period ended

30 September 2017

(unaudited)

£'000

 

 

 

Loss before tax

(2,538)

(242)

 

 

 

Adjustments for:

 

 

Finance costs

45

1

Amortisation and impairment

196

42

Depreciation or property, plant and equipment

33

4

Share option charge

26

1

Other exceptional costs

1,823

-

Foreign exchange movement

(101)

-

Operating cash flows before movements in working capital

(516)

(194)

Movement in receivables

(1,110)

63

Movement in payables

2,777

174

Working capital due from Crain

(1,963)

-

CASH FLOWS (USED IN) / GENERATED FROM OPERATIONS

(812)

43

 

12. Acquisition of InvestmentNews

 

On 17 August 2018 the Group completed the acquisition of InvestmentNews.

 

Fair value of assets acquired

£'000

Property, plant and equipment

19

Intangibles

9,338

Trade receivables

2,217

Other receivables/prepayments

84

Trade receivables

(581)

Other payables/accruals

(1,299)

Provisions

(40)

Deferred tax liability

(2,442)

Fair value of net assets acquired

7,296

Goodwill

13,343

Consideration

20,639

 

 

 

Consideration comprised cash consideration, a vendor loan and consideration taken as equity. Due to the proximity of the acquisition date to the interim announcement the fair values attributed to the acquisition have been determined provisionally.  The goodwill that arose on the acquisition can be attributed to the existing workforces' skills and experience, sector knowledge, future profitability and synergies expected through the acquisition. The fair value of intangibles, comprising brand and customer lists, was determined through discounted cash flow modelling, and taking into account industry practice. The fair value of the property, plant and equipment was determined through consideration of the cost and age of the computer equipment owned.

 

The consideration comprised:

 

 

£'000

Cash consideration

12,867

Shares

3,052

Vendor loan

4,720

 

20,639

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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