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Bonhill Group PLC
18 September 2019
 

18 September 2019

 

Bonhill Group plc

("Bonhill", the "Company" or the "Group")

 

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

Bonhill Group plc (AIM: BONH), a leading B2B media business specialising in three key areas: Business Insight, Live Events and Data & Analytics, announces its unaudited interim results for the six months ended 30 June 2019.

 

Financial Highlights

·      Revenue of £10.7m, up 4.6 times from £1.9m in the comparable period in 2018, and organic Bonhill UK growth of 6.4%

·      EBITDA of £0.4m (2018: loss of £0.2m)

·      Fundraising of £10m to fund the acquisition of Last Word Media and strengthen the balance sheet

·      As at 30 June 2019 cash balance of £5.7m (2018: £0.9m) and net cash of £2.1m (2018: £0.9m)

·      Maiden dividend payable of 0.28p per share

·      Trading since release of the Company's pre-close update on 24 July 2019 has been more challenging for Last Word Media in the UK and Hong Kong while Investment News has returned to more normal trading patterns

 

Operational Highlights

·      Successful acquisition of Last Word Media, a leading provider of business information, data and live events for the financial advisor market in UK, Europe and Asia for a net initial consideration of £7.8m in April 2019

·      Continued investment in people with, among others, Heads of Operations, Marketing and Sales joining the UK Events team as well as post-period end a new CEO of InvestmentNews and Simon Collin as CPO

·      Continued progress in moving towards being a technology led, 'must have' provider of Business Insight, Events and Data & Analytics propositions in our core sectors of Financial Services, Diversity and Technology

·      Successful technology investment and implementation on time and on budget

·      Successful launch of Women in IT Singapore and Women Advisor summits in Denver and Huntington Beach and Women in Asset Management in New York

 

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

"It has been another period of tremendous progress on our transformational journey which began in August 2017. Despite all the disruption and changes, we now begin to see the Group emerge as a strong organisation, able to compete at the highest level with a new technology platform, people and market positioning which provides a solid platform for long term growth."

 

Commenting on outlook he added:

"As we announced in the Company's pre-close update on 24 July 2019, a challenging US market impacted trading at InvestmentNews, our US business, so creating greater bias to our group second half performance. We have met and overcome these challenging conditions and the InvestmentNews business has recovered its momentum and is now trading at levels ahead of last year with great product and strong leadership. However, as a board we are also cognisant of the lack of fund flows in the UK fund management industry and the issues in Hong Kong which will impact our performance. As a result, the Board expects that for the year ending 31 December 2019 both revenue and EBITDA will be approximately £1.0 million below market expectations. However, our continued investment in people and technology and the overall organisation gives us great confidence that we will enter 2020 in a stronger position."

 

                                                                                           -ends-

 

 

For further enquiries please contact:

 

Bonhill Group plc

+44 (0)20 7250 7035

Simon Stilwell, Chief Executive

David Brown, Group Finance Director

 

 

Shore Capital (Nominated Adviser and Joint Broker)

+44 (0)20 7408 4050

Tom Griffiths

David Coaten

 

 

Canaccord Genuity Limited (Joint Broker)

Bobbie Hilliam

Adam James

Georgina McCooke

 

+44 (0)20 7523 8000

 

About Bonhill Group plc

Bonhill Group plc is a leading, AIM-quoted, B2B media company providing Business Insight, Events and Data & Analytics propositions to Financial Services, Diversity and Technology business communities in 25 countries. Bonhill operates fifteen information websites, publishes four regular print titles, hosts 120 events per annum, offers a portfolio of data & analytics propositions and provides a range of content marketing solutions.

 

The business creates content, sales and marketing opportunities, networking events and transactional opportunities for its audiences of entrepreneurs, business owners and managers, CTOs & technology leaders, asset & wealth managers, and professional women, in addition to its sponsors, advertising clients and customers. Flagship brands include: InvestmentNews, Portfolio Adviser, Fund Selector Asia, What Investment, SmallBusiness.co.uk, GrowthBusiness.co.uk, Information Age, Women in… events series, and DiversityQ.

 

For more information visit www.bonhillplc.com 

 

 

Chairman's Statement

 

It has continued to be an extremely busy period of activity in all areas of the business as we continue the transformation of the Bonhill Group. During the period, we acquired Last Word Media, a market leading brand which operates in the UK, Europe, Middle East, Africa and Asia. It is extremely complementary to InvestmentNews and we now have a global offering for asset managers and financial advisers. We have continued to develop our core offerings of business insight, events and data & analytics. We also undertook a fundraising of £10m which, in part, was used to part finance the acquisition of Last Word Media, but also to strengthen our balance sheet. Our cash position at the period end was £5.7m (2018: £0.9m).

 

This interim period is for the six months ended 30 June 2019 and, as a result of the change of the Company's year end at the time of the InvestmentNews acquisition last August, we are showing the six months ended 30 June 2018 for comparison. I am pleased to announce the payment of our maiden interim dividend of 0.28p per share for the period following the successful capital reduction earlier in the year.

 

We are just over two years on from the arrival of Simon Stilwell as CEO in the Autumn of 2017 and the business continues on its transformational journey. We now have a stronger position in financial services with the acquisition of Last Word Media. We continue to grow and broaden the scope of our Diversity activities and the investment we have made over the last year in Group-wide technology has put us on a strong, effective common platform that will further develop our data and analytics offering as well as provide a better service to our clients. I would like to thank all our people, the vast majority of whom are new to the business, for their contribution and to all our shareholders for their support during the fundraising and acquisition of Last Word Media.

 

 

Neil Sachdev

Non-Executive Chairman

 

 

Chief Executive's Review

 

Introduction

 

It has been another period of progress at all levels as we invest in and integrate InvestmentNews, develop its events portfolio and product offering and improve all of its internal process and systems through investment in technology. The Bonhill UK business continues to flourish under new management. We have further developed our small business franchise and are starting to win substantial contracts from a new customer base. Our Diversity business and, in particular the Women in… series, has been extended further and we now have an improving mix of Summits and Awards as well as a strong slate of new locations in the second half of the year. Finally, the acquisition of Last Word Media brings a global presence for our financial services brands.

 

Our investment in people continues and we have a rapidly improving team from a variety of media industry backgrounds that we are beginning to develop into a highly effective unit. We aspire to be a destination for talented people in this industry to work. The overall improvement in our people and culture will be of particular focus in the coming year as we complete the integration of our businesses and use the technology platform we have invested in to greater effect.

 

The principal focus for the remainder of this year and beyond is the integration of the Last Word Media business into the Group, the continued development of our diversity brands and the development of data and product initiatives that utilise our broader financial services expertise. We are looking to launch our ESG clarity brand into the US in December alongside our flagship ESG Impact forum with the United Nations. The wider deployment of Last Word Media's products into our key geographies will continue in 2020. Despite all the changes, challenges and developments in the year to date, I have great confidence that the business I could envisage back in 2017 is beginning to emerge and will be able to compete at the highest level.

 

Transformational Period

 

It has been another period of quite dramatic change. Having bought InvestmentNews in August 2018, we have expanded our position in the global asset management/financial advisory space by buying Last Word Media in April 2019. This well established business, which operates in all the key geographies that InvestmentNews does not, provides us with a global platform to service the asset management and financial advisory industry. We believe that our products and services for the financial advice industry and deep knowledge of the global financial advisors market provide us with a unique understanding of the core needs of the wider global asset management community and its suppliers. As we integrate the business and offer both businesses product sets across our expanded geographies, we believe we will have a compelling offering of global data and analytics, high quality content and a suite of valuable industry events. Whilst fully combining these businesses will take until early 2021, there is much to be done in the short term.

 

We are also taking our Women in… Series into four new geographies; with Singapore completed in the period, we will see this global franchise launch in Berlin, Bucharest and Toronto in the second half. We have also successfully developed an adjacent summit to the awards programme which is rapidly becoming the must attend event for tackling the issue of the lack of gender diversity in the IT industry. InvestmentNews has also launched two new Women Advisor summits in the US which takes us to 6 and we continue to invest in developing this key US franchise. Post the period end, we have also successfully launched Women in Asset Management in New York. Elsewhere in the UK, we have changed the management and operational teams and the process of running our events and are confident that we now have a scaleable structure. This professionalisation of the team and offering has already been well received.

 

Technology development and enhancement has been a core part of this period. Since our capital raising in 2018, we have been working to develop the wider technological capability of the business.  We had set aside £1.2m to develop a new company wide 'tech stack' and we are on target in respects of both budget and timing. The opportunity this investment brings for new product development and offering a better client experience is essential if we are to reach the levels we aspire to.  Post-period end, we are now on a common CRM platform across the business and are in a much stronger position to deliver "best in class" solutions. This platform has enabled us to trial new products and currently we have 7 new product trials running which is a step change in our new product development capability.

 

Business model

 

Bonhill Group Plc's corporate strategy remains to transition its business model to long-term, "must have", recurring revenue streams through building market leading brands within its chosen business communities of Financial Services, Diversity and Technology, developing high value Business Insight, Events and Data & Analytics propositions, and expanding beyond the UK into large, or fast growing, international territories.

 

In the period, we have executed this strategy by starting to change the business and geographic mix. As the business develops in the full year, we will see the mix change such that Events and Data & Analytics will become a more significant part of our business. In the first half of 2019, the revenue split was 40% Events, 30% Digital, 25% Print and 5% Data. Over the course of the next two years, it is our intention to reduce print's contribution to below 10% of total Group revenue and in three years to have a 20% contribution from Data & Analytics revenue. Additionally, we are seeking to improve the level of subscription and repeat revenues in all parts of the business. We will continue to report on these changes.

 

Our geographic split of revenue has changed such that in the period our revenue by geography was: 66% US, 24% UK, 6% Europe and 4% Asia.

 

 

Financial Services

 

On 10 April 2019, we completed the acquisition of Last Word Media for a net initial consideration of £7.8m. The transaction, which is in line with our strategy, brought us a market leading brand, complementary to InvestmentNews, and exposure to fast growing international markets.

 

Last Word Media currently operates seven investor facing brands. These include seven news and information websites, two of which have associated print titles. In H1 2019, the brands collectively hosted 54 scheduled live events. Last Word Media operates a further three brands targeting asset managers with event services, content marketing solutions and research data products. The business creates content, sales and marketing opportunities, networking events and transactional opportunities for its clients and audiences with the key objective to assist asset managers with increasing assets under management. In our period of ownership during the six months ended 30 June 2019, 56% of total revenues from Last Word were generated in the UK, 16% in Asia, 8% in Europe and the balance in the rest of the world. Of total revenues generated in the period ended 30 June 2019, Events accounted for 56%, Business Insight accounted for 39% and Data & Analytics and content marketing together accounted for 5%.

 

Bonhill has a market leading position in the US asset management/financial adviser sector with InvestmentNews. Last Word Media is a similar business, servicing the same asset management clients, addressing similar financial adviser, fund selector and wealth manager audiences and creating comparable news, information and analysis focused on the asset management/financial adviser industry. However, Last Word Media is currently not active in the US being focused on entirely complementary territories of the UK, Europe and Asia. Bringing the two businesses together within the Group will enable Bonhill to provide a truly global partner to the international asset management community.

 

In the coming year, the Board's growth plans for Last Word Media comprise continued expansion of the Portfolio Adviser/Expert Investor/Fund Selector events portfolios, development of interactive and expanded versions of the Future Flows Data product and our highly regarded Radius event business. We are also seeking to further develop the ESG Clarity brand and launch a Fund Selector America product.

 

Last Word Media has faced more challenging trading conditions over the summer as a result of the widely publicised issues in the UK fund management industry and the civil unrest in Hong Kong. At the time of the release of the Company's pre-close update in late July 2019, the business was trading ahead of its earn out target, but has subsequently fallen behind that number. The Board believes that the Company is unlikely to pay any additional consideration for the business under the earn out arrangements, but importantly also believes that the business will grow revenue, profit and margin in the current year. As a result, the integration strategy has been identified, employing best practice and learning from InvestmentNews and is well underway.

 

Development of the InvestmentNews business will be focused around developing a broader range of offerings away from the historical print product. The weekly publication will remain an integral part of the business, but the investment in technology, closure of the Transitional Services Agreement from Crain Communications (during 2019), relaunch of the InvestmentNews website (in January 2020), renewed focus on Events, restructuring of the sales team and the recent changes in management will see a move to a more technology led, digitally focused and product focused offering.

 

As previously announced in the Company's pre-close update on 24 July 2019, InvestmentNews had a difficult three month trading period in February, March and April 2019. This situation created by the extreme volatility in equity markets in the US at the end of 2018 impacted revenues primarily in the print business. The business returned to more normal trading in May and June with May being a strong month which outperformed every month in 2018, which was the record trading year for the business. Trading has returned to a more normal pattern with second half bookings ahead of this time last year and we still expect to see revenue growth in the current year.

 

Post-period end, we announced the appointment of Christine Shaw as the new CEO of InvestmentNews. Christine joined from Future Plc where she was MD of Global Events and B2B managing a team of 175 people, 55 events, 15 magazines and 16 websites. Prior to that, she was a senior vice president at PennWell Corporation, a privately held global B2B media business where in her last role she led the technology division after a career there spanning 18 years. She has extensive experience in all of our core offerings as well as change management, building an international business and developing high performing teams.

 

We are already seeing the benefits of this new leadership and Christine was joined on 16 September 2019 by a new Chief Revenue Officer, Scott Miller, who brings a wealth of financial services experience across all of our core disciplines.

 

Of total revenues generated from Financial Services in the six months ended 30 June 2019, Events accounted for 22%, Business Insight accounted for 70% and Data & Analytics and content marketing together accounted for 8%.

 

Diversity

 

Our Diversity franchise continues to develop. DiversityQ has been running for a year and has made real progress in highlighting all diversity issues and building direct relationships with the leaders of the D&I community globally. Our flagship events portfolio continues to develop and the underlying mission remains the same: to highlight the significantly low percentage of female professionals in the technology and finance industries; and to challenge organisations that do not have diversity and inclusion initiatives in place, as well as enhance the effectiveness of those that have diversity initiatives in place. This is mainly achieved through our editorial content and summits.

 

Our extensive awards programmes seek to showcase the achievements of female professionals in these industries and to create a community of high achievers, thought leaders and industry role models and we want to be the high-profile platform and leader with the ambition to move the dial on gender parity.

 

We have achieved much in this period by revising the event proposals and expanding the team. Technology has enabled us to build out our database and provide a more tailored offering and increase brand awareness. Looking forward, we seek to prolong client engagement, create an alumni of awards winners and continue to expand our international reach and look beyond technology and finance and our existing areas of expertise.

 

We have set ourselves some ambitious targets in the second half and for next year, but we are confident that this high growth area will continue as we better utilise technology, the new team and our expanded geographic reach to launch new initiatives. We are seeking to broaden our offering in this area to offer information and support on a broader range of governance issues.

 

Technology

 

Our core proposition, www.informationage.com, is the leading intelligence resource for IT decision-makers and technologists in the information age. Since launch in 1995, 'InformationAge' has helped millions of businesses achieve success through a market-leading website and calendar of events for technology leaders.

 

The site serves its audience with news, analysis, buyers' guides and research to help in managing business-critical issues and in identifying new technologies to enable business efficiencies, security and growth.

 

Our community of readers and event delegates range from software engineers and sysadmins through to CIOs, CTOs and IT Directors - all of whom are involved in the application of technology for strategic, competitive advantage and improved efficiencies.

 

Alongside its online presence, the brand has an extensive, international range of live events and awards schemes to facilitate networking between CTOs and technology leaders.

 

Although currently the smallest part of our business, it is a vital channel for the continuing growth in our technology diversity events and its global audience will be a key part of our future data and analytics and product strategy.

 

Data & Analytics

 

We have historically talked about the need to develop our own product data sets and associated analytics. We are now in a position to meaningfully develop these opportunities.  Ongoing across our global portfolio of brands, we will seek to provide essential information and analysis for professionals making key decisions in the investment world, diversity and technology.

 

Over the last year, the investments in the Group's technology have allowed us to focus on future growth as we develop an agile approach to product development with the first of our suite of new data-driven commercial products now being trialled. In parallel, these investments have allowed us to deliver best-of-breed e-commerce and marketing platforms that provide a flexible position and for us to optimise online sales.

 

The driver behind these new product developments is the alignment of our unique and comprehensive data sets and the team with the relevant experience. This is now showing great potential across our three audience groups, as we start to deliver on an exciting near-term future that provides the prospect of delivering data-driven solutions that help our customers better understand their clients, work more effectively, make the right buying decisions, and understand their social impact.

 

These new commercial propositions are being tested with customers across our portfolio to deliver real-time insight to our core audiences in the UK, USA, and Asia. For investment professionals, we are enhancing our news analysis to offer enhanced insight to trends and future implications of regulatory actions, news events, and market actions. For our technology brands helping smaller businesses, we continue to enhance our guides that provide smart buying decisions; and for our ESG portfolio we help companies of all sizes understand, manage, and benchmark their environmental, social and diversity impact.

 

As we build our agile product delivery capability, we continue our focus on delivering innovative and commercially successful products, together with the continued focus on optimising our existing product range for customer experience and revenue generation. This gives us confidence in an expected positive impact on traffic, customer experience, and revenue as these changes allow us to build a best-practice delivery team working on must-have data products that are monetised by subscription, by outcome (lead-generation), and with events that together leverage our global brands.

 

Opportunity

 

Bonhill is in a much stronger position than last year. We have the necessary scale in our Financial Services business to compete globally. Our Diversity business has moved from a local to a global franchise and the underlying investment in people and technology and improvement in all processes has put us in a much stronger position to develop our Data & Analytics business. We have had some local challenges, particularly in the US market, but our focus on developing 'must have' products and moving to owning market leading brands and a recurring revenue model remains intact and our primary focus. This will be achieved by developing the existing stable of assets and looking at selective acquisitions. I have no doubt that our offering will continue to improve as our new team develops and we continue to attract new talent and maximise the new technology at our disposal. We will continue to refine our processes and culture to reach the levels we aspire to.

 

Dividend

 

As previously announced, the Board has committed to a progressive dividend policy, with the intention that the Company will, on an on-going basis, pay an interim and a final dividend of one-third and two-thirds of the annual dividend payable.  In each case, the Directors will take account of the current and prospective financial and trading position of the Group, including its level of cash reserves and cash requirements, at the relevant time.

 

The Board has declared a maiden interim dividend of 0.28 pence per share. This will be paid on 25 October 2019 to shareholders on the register at the close of business on 27 September 2019.

 

Outlook

The business now has better people, processes, technology and scale from which to grow in its core markets. This ongoing professionalisation of the Group will continue into the coming year with an emphasis on people and products. We are confident that our investment into all areas over the last year will drive growth and deliver returns for our shareholders over the coming years. We have had some local difficulties in our markets that have made it harder to achieve the shorter-term returns we had been expecting. As a result, the Board expects that for the year ending 31 December 2019 both revenue and EBITDA will be approximately £1.0 million below market expectations. However, fundamentally we have three businesses in InvestmentNews, Last Word Media and the Bonhill UK events business that are growing and are now better placed than they were a year ago to capitalise on their market position.

 

 

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 3 below.

 

 

30 June 2019

6 months

£'000

30 June 2018

6 months

£'000

Revenue

10,743

1,943

 

 

 

Adjusted EBITDA profit/(loss)

387

(192)

Depreciation / amortisation of internally generated intangibles

(301)

(34)

Share option charge

(70)

-

Adjusted operating profit/(loss)

16

(226)

Finance costs

(204)

-

Adjusted loss before tax

(188)

(226)

Adjusted tax

32

-

Adjusted loss

(156)

(226)

Adjusting items (after tax)

(2,226)

(586)

Statutory loss

(2,382)

(812)

Adjusted loss per share

(0.38p)

(5.24p)

Statutory loss per share

(5.85p)

(18.86p)

 

 

The existing Bonhill UK business grew 6.4%, and acquisitions delivered a further £8.7m of revenue, increasing overall revenue by 4.6 times.  InvestmentNews contributed a full 6 months while Last Word contributed 2½ months' trade. 

 

InvestmentNews generated £6.8 million of revenue and £1.2m EBITDA in the first half. Revenue was 11% lower than the record-breaking pre-acquisition comparable period last year, with February, March and April revenues affected by sponsor uncertainty following the pre-Christmas volatility in US markets.  Trading since May has been ahead of last year and bookings for the second half of the year are ahead of the same point last year.

 

Bonhill UK grew revenues 6.4%, with both Business Information and Events ahead of last year.  The core Women in… series saw underlying growth, as well as successfully launching Women in IT Singapore, which more than compensated for a weak legacy technology event.  Last year's restructuring of the UK media business is starting to pay dividends as the segment moves to growth, which reinforces our greater confidence in its future.

 

Last Word delivered £1.9m of revenue and a small EBITDA loss in the 2½ months since its acquisition.  On a proforma basis, sales were up 3% to £4.9m.

 

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 4 below. An adjusted EBITDA gain of £0.4 million (2018: £0.2 million loss) was comprised of a £1.2 million contribution from InvestmentNews and a £0.8m loss from the UK business which carries the central overheads for the Group.

 

Adjusting items comprised £0.8 million (2018: £0.2 million) of acquisition costs, £0.7 million of integration costs (2018: £nil), £0.1 million relating to senior management reorganisation (2018: £nil) together with £0.6 million (2018: £nil) relating to amortisation of intangible assets acquired.

 

On an adjusted basis, the retained loss was £0.2 million (2018: loss of £0.2 million), equivalent to 0.38p loss per share (2018: 5.24p loss per share). The statutory loss for the period was £2.4 million (2018: £0.8 million), equivalent to 5.85p per share (2018: 18.86p per share).

 

 

Cash flow

 

30 June 2019

6 months

£'000

30 June 2018

6 months

£'000

Adjusted EBITDA

387

(192)

Working capital movement

97

(103)

Interest paid

(180)

-

Tax paid

(38)

-

Foreign exchange gains

94

-

Purchases of property, plant and equipment and intangible assets

(64)

(79)

Free cash inflow/(outflow)

296

(374)

Acquisition of Last Word Media

(5,840)

-

Acquisition costs

(815)

(184)

Integration costs

(732)

-

Reorganisation costs

(100)

-

Proceeds from issue of ordinary shares

9,484

-

Repayment of borrowings

(949)

-

Net cash inflow/(outflow)

1,344

(558)

       

 

 

Working capital showed an inflow as our trading mix moves towards the more favourable events model where sponsors and attendees pay prior to the event, and after £0.2m of interest left a free cash inflow for the period of £0.3m (2018: outflow of £0.4m).

 

£9.5m of share placing proceeds (net of £0.5m of costs) were raised in the period (30 June 2018: £nil), of which £5.8m was used as cash consideration to acquire Last Word Media and £0.8m to pay associated costs. 

 

Our integration of InvestmentNews continued as planned with £0.7m being spent in the first half with the remainder of the project spend to be completed in the second half. 

 

Overall, there was a net cash inflow of £1.3m in the period (2018: £0.6 million outflow).

 

 

Balance sheet

 

30 June 2019

£'000

30 June 2018

£'000

Intangibles

30,706

1,113

Tangible fixed assets

183

41

Working capital

1,667

(453)

Lease asset

1,479

-

Lease liability

(1,549)

-

Deferred and current tax

(2,455)

-

Cash

5,711

881

Debt

(3,647)

-

Net assets

32,095

1,582

 

 

The net initial consideration for Last Word Media was £7.8m which included £2.0m of equity.  An earn-out mechanism based on delivering EBITDA of £1.5m in 2019 and EBITDA of £3.5m in 2020 could lead to a further £12m of deferred contingent consideration being payable, but based on current forecasts, the Board expects that the earn-out will not be reached and as such no deferred consideration has been provided.

 

A provisional fair value exercise has been undertaken, and we have recognised £1.9m of intangible assets together with £6.0m of goodwill.

 

At 30 June 2019, the Group had a healthy cash balance of £5.7m (2018: £0.9m).  Last year's acquisition of InvestmentNews was, in part, financed by a vendor loan of £4.7m, which had been reduced to £3.6m by the balance sheet date.  The loan is repayable in equal monthly instalments until 31 August 2021. The Group held net cash of £2.1m at 30 June 2019 (2018: £0.9m).

 

The capital reduction process has been completed which has created distributable reserves and allows the payment of our £0.1 million maiden interim dividend.

 

 

Current Trading

UK events have started the second half well, with revenue 52% higher than in the comparable period in the prior year.  InvestmentNews has recovered its momentum and is now trading at levels ahead of last year with a strong pipeline also ahead of the same period last year. While recent trading has been more challenging for Last Word in the UK and Hong Kong, it continues to show sales growth ahead of last year across the majority of its core brands.

 

Despite the economic outlook, change in management team and regional challenges in Asia, we believe the continued investment in people, process, technology and scale will drive continued growth both for the remainder of this year and beyond.

 

 

David Brown

Group Finance Director

 

 

Consolidated statement of comprehensive income

for the 6 month period ended 30 June 2019

 

 

 

6 month period ended

30 June 2019

(unaudited)

6 month period ended

30 June 2018

(unaudited)

 

Note

Adjusted

results

£'000

Adjusting items

£'000

Statutory results

£'000

Adjusted results

£'000

Adjusting items

£'000

Statutory results

£'000

 

 

 

 

 

 

 

 

Revenue

2

10,743

-

10,743

1,943

-

1,943

Net operating expenses

3

(10,426)

(1,639)

(12,065)

(2,135)

(184)

(2,319)

Depreciation

 

(63)

-

(63)

(8)

-

(8)

Amortisation and impairment

3

(238)

(615)

(853)

(26)

(402)

(428)

Net operating profit/(loss)

 

16

(2,254)

(2,238)

(226)

(586)

(812)

Finance costs

 

(204)

-

(204)

-

-

-

Loss before tax

 

(188)

(2,254)

(2,442)

(226)

(586)

(812)

Tax

 

32

28

60

-

-

-

Loss for the period

 

(156)

(2,226)

(2,382)

(226)

(586)

(812)

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

 

 

 

 

 

Exchange differences on translating foreign operations

 

5

-

5

-

-

-

 

 

 

 

 

 

 

 

Total comprehensive loss for the period

 

(151)

(2,226)

(2,377)

(226)

(586)

(812)

 

 

 

 

 

 

 

 

Basic loss per share attributable to the owners of the parent

5

(0.38p)

 

(5.85p)

(5.24p)

 

(18.86p)

 

 

Consolidated statement of financial position

at 30 June 2019

 

Note

30 June 2019

£'000

(unaudited)

30 June 2018

£'000

(unaudited)

NON-CURRENT ASSETS

 

 

 

Goodwill

 

20,016

564

Other intangible assets

 

10,690

549

Property, plant and equipment

 

183

41

Deferred tax asset

 

326

-

Right-of-use asset

7

1,479

-

 

 

32,694

1,154

 

 

 

 

CURRENT ASSETS

 

 

 

Trade and other receivables

 

7,641

145

Cash and cash equivalents

 

5,711

881

 

 

13,352

1,026

TOTAL ASSETS

 

46,046

2,180

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

Deferred tax liability

 

(2,738)

-

Borrowings

 

(1,891)

-

Financial lease liability

7

(947)

-

 

 

(5,576)

-

 

 

 

 

CURRENT LIABILITIES

 

 

 

Trade and other payables

 

(5,974)

(598)

Current tax liability

 

(43)

-

Borrowings

 

(1,756)

-

Financial lease liability

7

(602)

-

 

 

(8,375)

(598)

TOTAL LIABILITIES

 

(13,951)

(598)

NET ASSETS

 

32,095

1,582

 

 

 

 

EQUITY

 

 

 

Share capital

6

486

4,025

Share premium

 

-

4,315

Share option reserve

 

138

118

Other reserves

 

104

104

Retained earnings

 

31,327

(6,980)

Foreign exchange reserve

 

40

-

TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT

 

32,095

1,582

 

 

Consolidated statement of changes in equity

for the 6 month period ended 30 June 2019

 

 

Share capital

£'000

Share premium

£'000

Share option reserve

£'000

Other reserves

£'000

Retained earnings

£'000

Foreign exchange reserve

£'000

Total

£'000

 

 

 

 

 

 

 

 

Balance as at 31 December 2017

4,025

4,315

118

104

(6,168)

-

2,394

 

 

 

 

 

 

 

 

Total comprehensive loss for the period

-

-

-

-

(812)

-

(812)

 

 

 

 

 

 

 

 

Balance as at 30 June 2018

4,025

4,315

118

104

(6,980)

-

1,582

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

(1,459)

-

(1,459)

Other comprehensive income

-

-

-

-

-

35

35

Issue of share capital

300

23,699

-

-

-

-

23,999

Share issue costs

-

(1,299)

 

 

 

 

(1,299)

Cancellation of deferred shares

(3,982)

-

-

3,982

-

-

-

Removal of share option scheme

-

-

(118)

-

118

-

-

Share option charge

-

-

68

-

-

-

68

 

 

 

 

 

 

 

 

Balance as at 31 December 2018

343

26,715

68

4,086

(8,321)

35

22,926

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

(2,382)

-

(2,382)

Other comprehensive income

-

-

-

-

-

5

5

Issue of share capital

143

11,857

-

-

-

-

12,000

Share issue costs

-

(524)

-

-

-

-

(524)

Capital reduction

-

(38,048)

-

(3,982)

42,030

-

-

Share option charge

-

-

70

-

-

-

70

 

 

 

 

 

 

 

 

Balance as at 30 June 2019

486

-

138

104

31,327

40

32,095

 

 

 

 

 

 

 

 

 

 

Consolidated statement of cash flows

for the 6 month period ended 30 June 2019

 

 

 

6 month period ended

30 June 2019

(unaudited)

£'000

6 month period ended

30 June 2018

(unaudited)

£'000

 

 

 

 

CASH GENERATED FROM/ (USED IN) OPERATIONS

 

484

(295)

Interest paid

 

(180)

-

Tax paid

 

(38)

-

NET CASH GENERATED FROM / (USED IN) OPERATING ACTIVITIES

 

266

(295)

 

 

 

 

INVESTING ACTIVITIES

 

 

 

Purchases of property, plant and equipment

 

(51)

(61)

Purchases of intangible assets

 

(13)

(18)

Net cash consideration for acquisition

 

(5,840)

-

Acquisition costs

 

(815)

(184)

Integration costs

 

(732)

-

Reorganisation costs

 

(100)

-

NET CASH USED IN INVESTING ACTIVITIES

 

(7,551)

(263)

 

 

 

 

FINANCING ACTIVITIES

 

 

 

Proceeds from issue of ordinary shares

 

9,484

-

Repayment of invoice discount facility and other borrowings

 

(949)

-

NET CASH GENERATED FROM FINANCING ACTIVITIES

 

8,535

-

 

 

 

 

FOREIGN EXCHANGE MOVEMENT

 

94

-

 

 

 

 

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS

 

1,344

(558)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD

 

4,367

1,439

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

 

5,711

881

 

 

Notes to the cashflow

 

 

 

6 month period ended

30 June 2019

(unaudited)

£'000

6 month period ended

30 June 2018

(unaudited)

£'000

 

 

 

Loss after tax

(2,382)

(812)

Adjustments for:

 

 

Tax

(60)

-

Finance costs

204

-

Amortisation and impairment

853

428

Depreciation or property, plant and equipment

63

8

Share option charge

70

-

Other exceptional costs

1,639

184

Operating cash flows before movements in working capital

387

(192)

Movement in receivables

666

183

Movement in payables

(569)

(286)

CASH FLOWS GENERATED FROM / (USED IN) OPERATIONS

484

(295)

 

Notes to the accounts

 

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.

 

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 9 month period ended 31 December 2018 and are consistent with those that the Company has applied in its financial statements for the 9 month period ended 31 December 2018.  

 

The financial information set out above does not constitute the Company's statutory accounts for the 6 month period ended 30 June 2019 or the 6 month period ended 30 June 2018. Statutory accounts for the 9 month period ended 31 December 2018 have been reported on by the Independent Auditor.  The Independent Auditor's Report on the Annual Report and Financial Statements for December 2018 and March 2018 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 9 month period ended 31 December 2018 have been filed with the Registrar of Companies.

 

 

2.      Revenue and segmental analysis

For executive management purposes, the business has three reportable segments being the Bonhill UK business, the InvestmentNews business and the Last Word Media business. Further analysis of revenue has been performed by core proposition and country.

 

 

6 month period ended 30 June 2019

(unaudited)

£'000

6 month period ended 30 June 2018

(unaudited)

£'000

Analysis of revenue by core propositions

 

 

Business Insight

5,888

312

Events

4,251

1,631

Data & Analytics

604

-

Total

10,743

1,943

 

Analysis of revenue by country

 

 

United Kingdom

2,604

1,550

United States

7,098

294

Europe

606

99

Asia Pacific

435

-

Total

10,743

1,943

 

Of the above total Group revenue, £6.804m relates to revenue generated by InvestmentNews and £1.872m relates to revenue generated by Last Word Media.

 

 

6 months ended 30 June 2019

Bonhill UK

(unaudited)

£'000

InvestmentNews

(unaudited)

£'000

Last Word Media

(unaudited)

£'000

Total

(unaudited)

£'000

Reportable segmental income statement

 

 

 

 

Revenue

2,067

6,804

1,872

10,743

Adjusted EBITDA

(790)

1,180

(3)

387

Adjusted operating profit/(loss)

(909)

1,034

(109)

16

Statutory operating profit/(loss)

(2,386)

292

(144)

(2,238)

Statutory profit/(loss)

(2,387)

124

(119)

(2,382)

 

 

 

 

 

 

6 months ended 30 June 2018

Bonhill UK

(unaudited)

£'000

InvestmentNews

(unaudited)

£'000

Last Word Media

(unaudited)

£'000

Total

(unaudited)

£'000

Reportable segmental income statement

 

 

 

 

Revenue

1,943

-

-

1,943

Adjusted EBITDA

(192)

-

-

(192)

Adjusted operating profit/(loss)

(226)

-

-

(226)

Statutory operating profit/(loss)

(812)

-

-

(812)

Statutory profit/(loss)

(812)

-

-

(812)

 

 

3.      Operating loss

 

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

 

6 month period ended 30 June 2019

(unaudited)

£'000

6 month period ended 30 June 2018

(unaudited)

£'000

Depreciation of property, plant and equipment

(63)

(8)

Amortisation of purchased or internally generated intangible assets

(238)

(26)

Share based payment charge

(70)

-

 

(b)    Adjusting items

The Group incurred certain costs in 2018 and 2019 which the Directors believe should be disclosed as adjusting items as set out below:

 

6 month period ended 30 June 2019

(unaudited)

£'000

6 month period ended 30 June 2018

(unaudited)

£'000

Write off relating to intangible assets

-

(373)

Acquisition costs

(807)

(184)

Integration costs

(732)

-

Reorganisation costs

(100)

-

Profit on disposal of historic property, plant and equipment

-

-

Amortisation of intangibles acquired through business combination

(615)

(29)

 

(2,254)

(586)

 

 

4.      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 June 2019

(unaudited)

£'000

6 month period ended 30 June 2018

(unaudited)

£'000

Adjusted EBITDA

387

(192)

Adjusting items

(1,639)

(184)

EBITDA

(1,252)

(376)

Depreciation

(63)

(8)

Amortisation and impairment

(853)

(428)

Share option charge

(70)

-

Operating loss

(2,238)

(812)

Net finance costs

(204)

-

Loss before tax

(2,442)

(812)

Taxation

60

-

Loss after tax

(2,382)

(812)

 

 

5.      Earnings per share

 

Basic earnings 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 period.

 

Based on statutory earnings

6 month period ended 30 June 2019

(unaudited)

£'000

6 month period ended 30 June 2018

(unaudited)

£'000

Loss attributable to owners of the parent

(2,382)

(812)

Weighted average number of ordinary shares in issue

40,693,032

4,301,541

Basic earnings per share (pence per share)

(5.85p)

(18.86p)

 

 

 

 

 

 

Based on adjusted earnings

6 month period ended 30 June 2019

(unaudited)

£'000

6 month period ended 30 June 2018

(unaudited)

£'000

Loss attributable to owners of the parent

(156)

(226)

Weighted average number of ordinary shares in issue

40,693,032

4,301,541

Basic earnings per share (pence per share)

(0.38p)

(5.24p)

 

 

 

 

 

6.      Called up share capital

Issued and fully paid ordinary shares of 1p each

 

Number

£'000

As at 31 December 2017 and 30 June 2018

172,061,632

1,721

Administrative issue of shares

8

-

Impact of 40:1 share reorganisation

(167,760,099)

(1,678)

Shares issued during the 6 month period

29,998,437

300

As at 31 December 2018

34,299,978

343

Shares issued during the 6 month period

14,285,714

143

As at 30 June 2019

48,585,692

486

 

Deferred shares of 9p each

 

 

Number

£'000

As at 31 December 2017 and 30 June 2018

25,603,787

2,304

Impact of 40:1 share reorganisation

18,640,011

1,678

Cancellation of deferred shares

(44,243,798)

(3,982)

As at 31 December 2018 and 30 June 2019

-

-

 

 

7.      Lease

The Group recognises a right-of-use asset and lease liability under IFRS 16.

Right-of-use asset

£'000

Carrying value as at 1 January 2019

968

Additions to right-of-use assets

721

Amortisation charged

(208)

Foreign exchange impact of revaluation

(2)

Carrying value as at 30 June 2019

1,479

 

 

Lease liability

 

Carrying value as at 1 January 2019

1,018

Additions to lease liability

721

Interest charged

25

Repayments made

(213)

Foreign exchange impact of revaluation

(2)

Carrying value as at 30 June 2019

1,549

 

 

 

8.      Acquisition of Last Word Media

On 10 April 2019, the Group completed the acquisition of Last Word Media. Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows:

 

 

 

Book value

Fair value adjustments

 

Total

Fair value of assets acquired

 

£'000

£'000

£'000

Property, plant and equipment

 

70

-

70

Intangibles

 

47

1,826

1,873

Right of use asset

 

-

721

721

Cash and cash equivalents

 

656

-

656

Trade and other receivables

 

3,128

(78)

3,050

Trade and other payables

 

(2,431)

(376)

(2,807)

Corporation tax payable

 

(36)

-

(36)

Financial lease liability

 

-

(721)

(721)

Deferred tax liability

 

(12)

(347)

(359)

Fair value of net assets acquired

 

1,422

1,025

2,447

Goodwill

 

 

 

6,049

Consideration

 

 

 

8,496

 

Consideration consists of cash consideration and consideration taken as equity. Intangibles includes brands and customer relationships.

 

The consideration comprised:

 

£'000

Cash consideration

6,496

Shares

2,000

 

8,496

 

9.      Post balance sheet events

Interim dividend 

An interim dividend of 0.28p per share (2018: nil) amounting to a dividend of £0.136m (2018: £nil) was declared by the directors at their meeting on 17 September 2019. These financial statements do not reflect this dividend payable.


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