TIDMCAU
RNS Number : 4820S
Centaur Media PLC
17 March 2021
17 March 2021
Centaur Media Plc
("Centaur")
Preliminary results for the year ended 31 December 2020
Resilient H2 performance provides confidence to reinstate
dividend
Strong balance sheet with net cash of GBP8.3m
Margin Acceleration Plan updated
Centaur, an international provider of business intelligence,
training and specialist consultancy, is pleased to present its
preliminary results for the year ended 31 December 2020.
Financial Highlights
2020 2019
GBPm ([1])
GBPm
----------------------------------- ------- --------
Revenue 32.4 39.6
Adjusted EBITDA ([2]) 3.8 4.0
Adjusted operating profit/(loss) 0.0 (1.2)
Statutory operating profit/(loss) (2.3) (7.8)
Group statutory profit/(loss)
after taxation (14.4) 1.9
----------------------------------- ------- --------
-- Revenues down 18% to GBP32.4m due to significant impact of Covid but grew internationally
-- Adjusted EBITDA only decreased by GBP0.2m, benefiting from 24% reduction in operating costs
-- Adjusted EBITDA margin grew from 10% to 12%, ahead of the Board's target
-- MAP strategy updated targeting 23% Adjusted EBITDA margin and
increasing revenues to more than GBP45m by 2023 (MAP23)
-- Proposing a final dividend of 0.5p per share
-- Net cash of GBP8.3m at year end
-- Non-cash goodwill impairment of GBP11.0m in the year relating
to the closure of MarketMakers
As previously announced, Covid had a significant impact on
Centaur during 2020 and we were pleased to see trading gradually
improve over the second half of the year in line with our
expectations and this trend is continuing into Q1 2021. Rapid
management action ensured that we quickly adapted to the pandemic
with the transfer of key revenue streams online combined with tight
cost and cash control. This enabled us to protect profits through
growing EBITDA margins ahead of target and maintaining a strong
balance sheet, to end the year with net cash of GBP8.3m.
Despite the impact of the pandemic, which resulted in a revenue
decline of 18% for the year, improvements in performance in the
second half provided management with sufficient confidence to
update the Group's strategy. The transformation of Centaur over the
last 5 years is evidenced by a higher value revenue mix with
premium content, marketing services and training and advisory
increasing to 76% (2016: 36%) and revenue from events, marketing
solutions and recruitment advertising reducing to 24% (2016: 64%).
Revenue from outside the United Kingdom has also increased to 31%
(2019: 24%) with a lift of 4% to GBP10.0m as Centaur extends its
international reach.
As a result, in January 2021 Centaur updated its Margin
Acceleration Plan with the aim of raising Adjusted EBITDA margins
to 23% and increasing revenue to more than GBP45m by 2023 (MAP23).
To support MAP23, we will focus investment and resource allocation
on our Flagship 4 brands - Econsultancy, Influencer Intelligence,
Mini MBA and The Lawyer - which we consider to be Centaur's key
drivers of organic revenue growth. They will be supported by Xeim's
wider portfolio of Core Brands.
At Xeim, which continues to represent 80% of Centaur's revenue
and includes three of our Flagship 4 brands (Mini MBA, Econsultancy
and Influencer Intelligence), we moved quickly to adapt training
and events to an online format. This allowed us to maintain
customer relationships and the provision of services throughout the
year. Mini MBA had a strong year, with delegate numbers and revenue
increasing by around 90%, as both the marketing and brand courses
in the spring and autumn cohorts achieved excellent growth, in
addition to delivering bespoke versions of the marketing course for
several blue chip customers. We also created a centre of sales
excellence to increase the focus on cross-selling across Xeim
brands which will play a key role as we deliver MAP23.
Unfortunately, the pandemic had a severe impact on MarketMakers,
Xeim's telemarketing business, which saw a sharp fall in revenue as
several major customers were hit by disruption in their own
markets. As a consequence, in July the Board took the decision to
close the business, incurring a non-cash goodwill impairment of
GBP11.0m and exceptional costs of GBP0.9m. While this was a
difficult and sensitive decision, it will assist in improving
Centaur's profit margins and support our MAP23 margin objective. We
have retained Really B2B, our award-winning demand generation
agency, which was part of the MarketMakers group.
Whilst the pandemic affected advertising and event revenues at
The Lawyer, we were encouraged to see it achieve a full-year
renewal rate for corporate subscriptions of 106%, reflecting its
status as the most trusted brand for the UK legal profession. The
Lawyer saw a substantial increase in digital engagement and
successfully executed over 120 virtual events.
Current trading
Trading for the first two months of 2021 is in line with the
Board's expectations and cash at the end of February 2021 was
GBP8.2m.
Dividend
Following the cancellation of the 2019 final and 2020 interim
dividends, Centaur's resilience has given the Board confidence to
propose a final dividend of 0.5p per share for the 2020 financial
year. The Board is also recommending a resumption of our normal
dividend policy which aims to distribute 40% of adjusted earnings
after taxation, subject to a minimum of 1p per share, and will also
consider resuming further returns of capital to shareholders once
the longer-term impact of Covid on the Group's cash flows becomes
clearer.
Swag Mukerji, Chief Executive Officer, commented:
"Whilst Covid had a significant impact on Centaur, I am pleased
with how the group performed during a year of unprecedented
uncertainty and disruption. We acted quickly and decisively to
adapt our business and ensure we could continue to serve our
customers during a uniquely challenging period. This has only been
possible due to the hard work and unwavering dedication of our
people and I would like to express my sincere thanks to them.
Despite the challenges presented to us in 2020 and the
inevitable uncertainties that will arise from the Covid pandemic
over the next few months, I am encouraged by the continued recovery
in trading and am confident in our MAP23 plan. The targets are
ambitious and achievable, with our robust balance sheet and
Flagship 4 brands leaving us well-placed to capitalise on future
opportunities. We will continue to focus on providing cutting-edge
insight, training and analysis, building strong and lasting
relationships with our customers and delivering long-term
sustainable returns to our shareholders as we emerge from the
pandemic."
Enquiries:
Centaur Media plc 020 7970 4000
Swag Mukerji, Chief Executive Officer
Simon Longfield, Chief Financial Officer
Teneo 07793 522824 / 07785 528363
Paul Durman / Matthew Thomlinson
Note to editors
Centaur is an international provider of business information,
training and specialist consultancy that inspires and enables
customers to excel at what they do, raise their aspirations and
deliver better performance.
Advise. Inform. Connect.
Our vision
We will be the 'go to' company in the international Marketing
Services and Legal sectors for:
-- Advising businesses on how to improve their performance and ROI;
-- Informing customers using data, content & insight with
the provision of business intelligence products;
-- Offering training and advisory services through digital
learning initiatives and on-line programmes; and
-- Connecting specific communities through media and events.
We will provide cutting-edge insight and analysis, building
strong and lasting relationships with our customers and aiming to
deliver long-term sustainable returns to our shareholders.
Our business
Centaur is an international provider of business information,
training and specialist consultancy that inspires and enables
people to excel at what they do within the marketing and legal
professions. Our Xeim and The Lawyer business units serve the
marketing and legal sectors respectively and, across both, our
customer centric approach enables us to offer a wide range of
products and services targeted at helping them add value.
Our reputation is based on the trust and confidence arising from
a deep understanding of these sectors and innovation to satisfy
what our customers need; we have developed a strong track record
for providing insight, content, data and training. Our key
strengths are the expertise of our people, the quality of our
brands and products, and our ability to harness technology to
innovate continually and develop our customer offering. This
enables us to help our customers raise their aspirations and
deliver better performance.
Highlights of the year
Strategic
-- Centaur performed well in the initial months of the year and
was on track to achieve the organic revenue growth set out under
our Margin Acceleration Plan 2022 (MAP22) in addition to the
benefit of 2019 cost savings.
-- We took immediate clear and decisive action to mitigate the
impact of Covid, protect the health and safety of our employees and
customers and to ensure the long-term financial security of the
business. This included improving our digital capabilities and
moving our face-to-face training sessions, and landmark events,
online . We also halted recruitment, reduced Board and senior
management remuneration, froze marketing expenditure and suspended
our dividend payment.
-- This allowed us to recover gradually over the course of the
second half of the year, to the point where we had sufficient
confidence to review and update our strategy to drive organic
revenue and profit growth over the next three years. In January
2021, we announced our Margin Acceleration Plan 2023 (MAP23). Our
aim is now to raise Adjusted ([3]) EBITDA margins to 23% by 2023
while increasing revenue to at least GBP45m.
-- As a fundamental part of MAP23, we will prioritise investment
and resource allocation for our Flagship 4 brands - Econsultancy,
Influencer Intelligence, Mini MBA and The Lawyer - with our wider
portfolio of Core Brands playing an important role in creating
opportunities for Centaur.
Operational
-- Our brands have proven resilient throughout the pandemic,
clearly demonstrating the benefit of our investment in digital
transformation in recent years.
-- At the onset of the pandemic, we moved quickly to adapt our
training and events to an online format, allowing us to deliver our
products and services and to maintain our customer
relationships.
-- While revenues at both Xeim and The Lawyer were severely
impacted by the initial stages of the pandemic, both business
segments recovered over the course of the second half of the year.
Highlights included:
o Mini MBA saw strong demand for its online courses, including
new bespoke offerings
o The Festival of Marketing was held online and attracted over
3,900 delegates
o The Lawyer achieved a full-year corporate subscription renewal
rate of 106%, demonstrating its continued value to UK and
international law firms.
-- The pandemic had a severe impact on the MarketMakers
telemarketing business which the Board took the difficult and
sensitive decision to close. We have retained Really B2B, the
award-winning demand generation agency.
Financial
-- Centaur reported revenues from continuing operations of
GBP32.4m (2019: GBP39.6m), reflecting the severe impact of the
pandemic on our customers and events.
-- Centaur posted an improved Adjusted EBITDA margin of 12%
(2019: 10%), which benefited from an increase in H2 2020 margin
compared with H1 2020.
-- The Group reported an improved adjusted operating profit of
GBPnil (2019: a loss of GBP1.2m). On a statutory basis the Group
made an operating loss of GBP2.3m (2019: a loss of GBP7.8m).
-- Through a focus on prudent financial management and
continuing tight control of costs, Centaur remains financially
strong wit h GBP8.3m in ca sh backed up by a new three-year GBP10m
revolving credit facility
-- In May 2020, Centaur suspended payment of its final 0.5p
dividend for the financial year 2019 in order to preserve cash
during the pandemic. Due to the encouraging second half
performance, Centaur is recommending a 0.5p final dividend for the
2020 financial year. From 2021, Centaur is recommending a
resumption of its normal dividend policy of 40% of adjusted
retained earnings, subject to a minimum of 1p per share.
Performance: CEO Review
Overview of 2020
This is my second report to you as Centaur CEO, and it comes on
the back of what has been an
extraordinary year. It is hard to underestimate how challenging
2020 was, with vast swathes of our customers, our industry and the
wider economy forced to shut down for extended periods. I am
pleased by the resilience and agility the Group has shown, driven
by the energy, commitment, drive and can-do tenacity of our people,
to whom we owe our sincere thanks.
Looking back to last January, Centaur made a strong start to the
year, building on the momentum that we carried over from the final
quarter of 2019. It meant that we were well on track to deliver
planned revenue growth, benefit from the 2019 cost savings and
achieve the margin target set out under MAP22, our Margin
Acceleration Plan strategy.
We started to feel the impact of Covid from March and took
immediate action to mitigate the effect on our clients and our
business, protect the health and safety of our employees and
customers and ensure Centaur's long-term financial stability.
The enforced closure of large parts of the UK economy had a
severe impact on our revenues in the second quarter, but the
measures we took significantly reduced the effect on our
profitability from the resulting revenue loss.
Over the second half of the year, trading saw a gradual
recovery, and this gave us sufficient confidence to review and
update our strategy. We now have new targets for our Margin
Acceleration Plan, now known as MAP23. As part of MAP23, we are
focused on raising Group Adjusted EBITDA margins to 23% by 2023
while increasing revenue to more than GBP45m.
MAP23 will be driven by our Flagship 4 brands - Econsultancy,
Influencer Intelligence, Mini MBA and The Lawyer - supported by our
wider portfolio of Core Brands. The Flagship 4 are all products
that did not exist in their current guise five years ago and are
each a clear demonstration that we can innovate and build growing
new products based on the trust and confidence in the editorial
content of our brands.
Results for the year
At the start of 2020, Centaur was emerging from a radical
transformation which saw it reshaped into a simpler business
focused on two sectors - marketing services through Xeim and legal
services through The Lawyer. We were well placed to achieve the
revenue growth set out under our MAP22 strategy, in addition to the
GBP6m of annualised cost savings that had already been delivered by
the end of 2019.
The disruption caused by Covid led to a significant impact on
revenues and EBITDA, but the investment we had made in digital
transformation in recent years ensured that we could continue to
serve our customers. We successfully moved our training and events
to an online format, as I will outline in greater depth below.
The upshot was that our Adjusted EBITDA margin was sustained.
Our brands remained resilient and this, combined with the impact of
our significant 2019 cost cutting measures and adaptation to the
new environment, gave us breathing space throughout the first
lockdown.
Over the second half of the year, our business saw a recovery
with growing momentum, providing us the confidence to put in place
our MAP23 strategy to guide Centaur over the coming years. The
transformation of Centaur over the last 5 years is evidenced with
higher value revenues from premium content, marketing services and
training and advisory increasing from 36% in 2016 to 76% in 2020
and revenue from events, marketing solutions and recruitment
advertising reducing from 64% to 24%. Revenue from outside the
United Kingdom has also increased to 31% from 24% in 2019 with a
lift of 4% to GBP10.0m as Centaur extends its international
reach.
Nonetheless, the severe impact of the pandemic on our customers
and events affected our results for 2020. Centaur posted a
break-even adjusted operating profit and a statutory operating loss
of GBP2.3m on revenues of GBP32.4m (2019: GBP39.6m), with Group
Adjusted EBITDA margin growing from 10% to 12%.
Through a focus on prudent financial cash management and
continuing tight control of costs, Centaur ended the year with a
cash balance of GBP8.3m (2019: GBP9.3m). This is after paying
GBP1.2m in exceptional costs in H2, mainly related to the closure
of MarketMakers, which will be outlined below. The Group also has
access to a new three-year revolving credit facility of GBP10m.
Dividend
On 27 May 2020, the Group announced that it was cancelling
payment of the final 0.5p dividend relating to the 2019 financial
year in order to preserve cash during the pandemic. The Board also
decided not to pay the 2020 interim dividend and kept the situation
under review. The Board now proposes a 0.5p final dividend relating
to the 2020 financial year and is recommending that Centaur resumes
its normal dividend policy of 40% of adjusted retained earnings,
subject to a minimum of 1p per share. The Board will also consider
resuming further returns of capital once the longer-term impact of
Covid on the Group's cash flow becomes clearer.
Operational Review
Centaur comprises two business units, Xeim and The Lawyer. Xeim
is Centaur's largest business and contributes 80% of Group
revenues, with The Lawyer making up the balance. Each business unit
is run on a stand-alone basis with dedicated management teams
supported by streamlined central functions.
Both Xeim and The Lawyer saw revenues decline over the course of
2020, which reflects the loss of event delegates and recruitment
advertising sales due to the pandemic. Our premium content revenues
were impacted to a lesser extent with some recovery of subscription
renewal rates being experienced in the second half of the year.
A key contributor to this was the investment we made in
developing our digital capabilities over recent years. As I will
touch upon below, our ability to harness technology to continue to
engage our existing customers and win new business has been a
crucial element in the resilience of our brands across both Xeim
and The Lawyer.
Looking forward, brands from Xeim and The Lawyer will play an
important role in the implementation of our MAP23 strategy.
Xeim
Xeim was formed in early 2019 and brings our marketing brands
into a single business unit, allowing us to manage them more
effectively, cross-sell our products more efficiently, eliminate
duplication of effort and enhance their margins. Xeim represented
80% of revenues in 2020 and posted a 14% decrease in underlying
revenue, a 40% decrease in Adjusted EBITDA and an Adjusted EBITDA
margin of 17%.
Xeim interacts with its customers by using the power of its
brands to generate different types of revenues, creating both
cross-selling opportunities and operational synergies. Xeim's
customer centric strategy is achieving success with its largest
customers as we create more tailored solutions and integrated
services across multiple brands.
In 2020, Xeim increased revenue from its top 50 customers to 34%
of total revenues (2019: 30%) with an average spend that only
reduced by 7%, compared with the 14% overall decline in underlying
revenue. In order to increase the strategic focus on cross-selling
Xeim brands to customers within this valuable customer segment, we
have recently created a centre of sales excellence in Xeim. In
addition, there are specific product teams for each of the Mini
MBA, Econsultancy and Influencer Intelligence Flagship brands with
a separate unit for the Core Brands.
Xeim brands will play an important role in the implementation of
our MAP23 strategy, with particular focus and investment being
placed on the Flagship brands Econsultancy, Influencer Intelligence
and the Mini MBA.
Econsultancy is our digital platform that provides online
training, insight and essential information to transform the
knowledge, skills and mindset of thousands of marketing, digital
and ecommerce professionals. It focuses on subject matter areas
which underpin digital excellence, defining "what good looks like"
and customers receive reports, webinars and analyst sessions as
part of their subscription package.
During 2020, Econsultancy initially experienced some disruption
and delays as a result of Covid, as companies cut costs and
deferred spend. The team transitioned swiftly and effectively to
instructor-led training to ensure they could deliver best practice,
in a virtual environment, rather than simply replicating
face-to-face workshops online. Over the course of the year, we put
greater emphasis on this "blended learning" offering and average
scores stayed at over 90%, very good or excellent, in this revised
format.
The transition made Econsultancy perfectly placed to meet the
demand for training in Digital Transformation and Ecommerce and
this has accelerated throughout 2020 . Demand for services has
increased over the last six months as companies focus more on
digital transformation and new ways of working, with a significant
number of new, global enterprise clients signing up for multi-year
capability programmes. As a result of the pandemic, subscription
renewal rates decreased significantly in Q2, but recovered in H2
such that the year-on-year renewal rate remained flat.
Influencer Intelligence is our market-leading data intelligence
search and measurement platform for influencer and talent-led
marketing campaigns, providing data-driven information, tools and
proprietary analysis.
Influencer Intelligence started 2020 with strong momentum, but
the pandemic badly impacted its target customer segments, primarily
in the fashion and retail sectors. As a result, we achieved renewal
rates for the year of 71%, a significant fall from 89% in 2019.
Despite this, we remained confident that the market would
recover and continued with our planned product development. Over
the course of 2020, Influencer Intelligence increased the volume of
influencers on its platform that are supported with full analytics
functionality. It also created a new design, look and feel to the
platform and a direct link to Xeim's Fashion & Beauty Monitor
service.
Additionally, Influencer Intelligence launched its new campaign
measurement tool in February 2021 which enables marketers to
measure the true impact of their influencer marketing investments
across Instagram, Facebook, YouTube, Twitter and TikTok. This is a
key driver in the future growth of the business.
The Mini MBA, our online MBA-level course in marketing developed
under the Marketing Week brand had a very strong year and continued
to build on its successful 2019 with delegate numbers and revenue
increasing by approximately 90%.
The Mini MBA is a good example of our product innovation over
recent years and responded quickly to the challenges posed by the
initial lockdown in Spring 2020. We swiftly implemented an
ecommerce strategy to attract single user MBA candidates, supported
by an enhanced marketing campaign targeted at employees working
from home. This proved very successful and contributed to a
doubling of delegates over the first half of 2020.
Since launch, there have been almost 11,000 global participants
with 86 different nationalities. The course has a Net Promoter
Score of +75 with customer satisfaction running at a commendable
98%.
The Mini MBA comprises two courses:
-- The Marketing Week Mini MBA in Marketing: A CPD accredited,
digital, MBA level course covering the same core marketing modules
as leading MBA programmes; and
-- The Mini MBA in Brand Management: A course which provides
participants with the knowledge required to become a fully trained
brand manager. It enables participants to take their career and the
success of the brands they run to the next level.
Over the course of the year, we have run add-on brand management
courses and bespoke work for companies such as Google, Flight
Centre, Coles Supermarkets in Australia, the Marketing Academy and
Westpac Bank.
Xeim's wider portfolio of Core Brands comprising Marketing Week,
the Festival of Marketing, Creative Review, Oystercatchers, Design
Week, Fashion Monitor, Foresight News, Really B2B and Xeim Labs,
will also continue to play an important role in creating
opportunities for Centaur by demonstrating the depth of our
business intelligence and our ability to connect and provide
valuable services to marketers and senior leaders.
The Festival of Marketing is a prime example of how our digital
capabilities allowed us to adapt to the 'new normal' of online and
virtual events. Not long into the pandemic it became clear that our
usual two-day format at Tobacco Dock would not be feasible in the
circumstances, so our team swiftly repositioned the Festival of
Marketing as a paid-for online learning, development and networking
experience in October 2020.
In some ways, it was our most ambitious event to date,
comprising 80 sessions across five days, with the biggest names in
marketing joining to address a different marketing issue each day.
Highlights included sessions with Nile Rodgers, the artist,
producer and songwriter responsible for some of the most
recognisable music in the pop era; Richard Curtis, the
internationally acclaimed writer and director; and the Chief
Marketing Officers of global brands such as Lego, GSK and GE. 2020
had similar delegate numbers to the previous year and the change to
an online format saw an increase in gross profit margin.
The Xeim Labs operation accelerates the effectiveness of
companies looking to target marketers and decision-makers. The team
provides a single access point to reach Xeim's unrivalled community
of marketing professionals with a multi-channel approach to
delivery. The team brings together content-led solutions, insights,
audiences and outcomes by working with our Flagship 4 and Core
brands.
Marketing Week continues to be at the centre of the marketing
industry and underpins Xeim's reach and reputation in the sector,
providing marketers with content of unrivalled authority and
integrity. Daily content delivered through our digital platform
provokes debate about the biggest questions in marketing and the
important issues that elevate marketing as a driving force in
business.
Following a challenging 2019, MarketMakers saw a further sharp
fall in revenue due to the crisis, as several major customers were
hit by disruption in their own markets. We took decisive action to
restructure MarketMakers, with the unfortunate loss of around 180
roles. Closing the telesales arm of MarketMakers and focusing on
the more profitable Really B2B arm will lead to short term
decreased revenues, but margins will improve as will the
profitability of the brand.
Towards the end of 2020, we appointed Will Johnston as Group
Commercial Director to lead the Xeim Sales Programme which will
drive a customer centric strategy to cross-sell our brands. Will is
a proven B2B commercial operator with considerable sales leadership
experience in high growth and subscription-based businesses and I
welcome him to Centaur.
Looking ahead to 2021, our strong and resilient Xeim brands will
all play an important role in our MAP23 strategy. While
Econsultancy, Influencer Intelligence and the Mini MBA will have
particularly important parts to play in achieving our targets, we
will also be looking to the rest of our core Xeim brands to make a
sizeable contribution.
The Lawyer
The Lawyer is a leading provider of intelligence to the global
legal market, generating revenue from digital subscriptions, live
and online events, and marketing solutions. The Lawyer represented
20% of revenues in 2020 and posted a 21% decrease in underlying
revenue, a 34% decrease in Adjusted EBITDA and an Adjusted EBITDA
margin of 33%. The fall in revenue and Adjusted EBITDA reflects the
impact of Covid on events and recruitment advertising revenues
partially offset by a 9% increase in underlying premium content
revenue.
Over the course of recent years, The Lawyer has successfully
moved to a multi-channel digital platform and was a key driver of
our growth at the start of 2020. As the pandemic took hold, The
Lawyer's strong digital presence allowed it to maintain its role as
the most trusted brand for the UK legal profession and a leading
provider of intelligence to the global legal market.
The Lawyer saw a substantial increase in its digital engagement
with subscribers over the course of the year. The number of
subscribers visiting TheLawyer.com per month increased by 17%
compared with 2019. Subscribers also increased the frequency of
their visits to the website, with the number of subscriber visits
per month increasing by 29%.
In the first quarter of the year, it launched Horizon, a daily
early morning email that draws on The Lawyer's data and research
capabilities to pinpoint emerging trends in the business of law and
was opened by 8,800 subscribers per day in 2020. While only
available to subscribers, users do not have to visit TheLawyer.com
to read Horizon as all the content is in their inbox, so
interaction is an additional source of strong subscriber digital
engagement. This strong digital engagement supported our highly
successful subscription renewal efforts, with a renewal rate of
106% for 2020 demonstrating the trust put in the brand by the
international legal market.
As with Xeim, we took an early decision to move our highest
profile events for The Lawyer online. After a swift turnaround from
our team, we launched a series of digital events at The Lawyer
through In-House Financial Services 2020 ("IHFS"), a virtual
conference attended by over 220 people and including exclusive
virtual roundtables with handpicked attendees and full plenary
sessions. The NPS from the event was +45, which is as high as the
equivalent face-to-face event. Over the course of 2020 we delivered
on more than 100 different virtual events, with over 6,000 total
attendees.
These capabilities were instrumental in seeing The Lawyer named
Business Information Product of the Year at the PPA Awards, the
industry Oscars, and it is well-positioned to build on this success
in 2021.
People and culture
Our executive committee is committed to ensuring we develop a
culture that supports, engages and empowers employees to fulfil
their potential. It is a culture that underpins our business
ambition and we continue to develop internal training plans and
communications processes to ensure our employees' success - and has
become even more important in an environment where our workforce
has been working from home.
Across the Group, the gender balance is a female:male ratio of
58:42. At Board level, 33% of our Directors are female, as is the
female representation on our senior leadership team. There is still
much work to be done to encourage and promote women and ethnic
minorities to senior leadership positions. We had 82% maternity
returners and part time working arrangements have increased to over
10% of our employees.
In 2019 we established a workforce advisory panel to cover
diversity, inclusion, culture and engagement (DICE) to ensure that
our culture supports and empowers our employees and promotes their
ongoing development. DICE reports to me and frequently meets with
the executive committee. There is also a nominated Non-Executive
Director, Carol Hosey, to oversee the working of DICE. In recent
months it has been instrumental in supporting our response to the
Black Lives Matter movement and in developing our Antiracism,
Inclusivity and LGBTQ+ pledges. A safe space has also been set up
by DICE to support colleagues.
Our policies and working practices underpin an inclusive working
environment and ensure that Centaur takes a proactive and
progressive approach to supporting diversity. I am extremely proud
of the fabulous achievements of DICE since it started. Our hiring
policy is focused on appointing the best person for the job
irrespective of race, gender, sexual orientation or disability. The
Company also offers a range of mental health, wellbeing and fitness
sessions.
During the pandemic, enhanced communication has been a key focus
of our activity to foster a culture of inclusion and to keep up
morale and focus. This has taken the form of weekly staff updates,
monthly all staff Q&A sessions, monthly business Town Hall
sessions, improvement project working groups, CEO breakfasts and
informal group catch up sessions. DICE has also organised a range
of social activities including a monthly quiz, book and film
groups, and virtual Summer and Christmas celebrations.
We have also enhanced the range of support available to support
mental and physical wellbeing. We have trained Mental Health First
Aiders across the business and a comprehensive Employee Assistance
Programme. 2020 saw the launch of an online GP App and a number of
webinars and initiatives to support coping with change and
uncertainty, building resilience and working from home effectively.
We have also arranged more than fifty 121 coaching sessions and
workshops for line managers to equip them to lead teams remotely.
We have 15 formal mentoring arrangements in place and are looking
to increase this during 2021. Reverse mentoring is also on the
agenda.
Engagement and motivation are tracked on a weekly basis using
our in-house engagement tool and there has been increased focus on
performance development.
Summary
If 2019 marked a new chapter in Centaur's evolution, then 2020
was a year of testing our new structure to its limits.
I am pleased that Centaur emerged from last year a more
resilient and agile business, something which can be attributed to
three things - the investment in digital and subsequent adaptation
of our brands to the new environment; cost-cutting and cash
management measures we put in place both prior to and during the
pandemic and, most importantly, the expertise, the commitment and
tenacity shown by our employees in extremely challenging
circumstances.
As I look to 2021 and beyond, while uncertainty remains, our
strong balance sheet and growing momentum give me confidence for
the future. We have the strategy and resources in play to achieve
organic growth and the targets set out under our MAP23 strategy,
and both our Flagship 4 and other Core Brands will have important
roles to play in hitting those targets.
Key Performance Indicators
The Group has set out the following core financial and
non-financial metrics to measure the Group's performance. The KPIs
are monitored by the Board and the focus on these measures will
support the successful implementation of the MAP23 strategy. These
indicators are discussed in more detail in the CEO and financial
reviews.
KPI Graph Commentary
Financial
Underlying revenue 2020: (14)%, 2019: The growth/(decline) in total revenue
decline* (2)% adjusted to exclude the impact of
event timing differences, as well
as the revenue contribution arising
from acquired or disposed businesses.
Adjusted EBITDA margin* 2020: 12%, 2019: Adjusted EBITDA as a percentage
10% of revenue where Adjusted EBITDA
is defined as adjusted operating
profit before depreciation and impairment
of tangible assets, and amortisation
and impairment of intangible assets
other than those acquired through
a business combination.
Adjusted diluted EPS* 2020: 0.3p, 2019: Diluted earnings per share calculated
0.3p using the adjusted earnings, as
set out in note 9 to the financial
information.
Cash conversion* 2020: 100%, 2019: The percentage by which adjusted
100% operating cash flow covers Adjusted
EBITDA (on continuing and discontinued
operations) as set out in the financial
performance review.
Non-financial
=========================== ===================== ===========================================
Attendance at Festival 2020: 3,938, 2019: Number of unique delegates attending
of Marketing 4,119 the Festival of Marketing
Delegates on Mini 2020: 4,813, 2019: Number of delegates on Mini MBA
MBA course 2,512 and related eLearning courses in
the year
Xeim customers >GBP50k 2020: 77 (GBP10.4m), Number and value of Xeim customers
that have sales in the year of greater
than GBP50,000
2019: 89 (GBP12.1m)
Top 250 law firm customers 2020: 160 (64%), Number and percentage of top 200
UK law forms and top 50 US law firms
2019: 170 (68%)
=========================== ===================== ===========================================
*See definitions in Financial Review.
Performance: Financial Review
Overview
2020 has been a year of unprecedented challenges emanating from
the pandemic. It has been challenging for Centaur with all physical
events severely impacted by the social and governmental
restrictions imposed as well as declines in most other revenue
streams across our key brands, with the notable exception of
training and advisory.
However, Centaur arguably moves into 2021 in a stronger position
than in previous years. 2020 has seen the full benefit of over
GBP6m in annualised cost savings from the programme announced in
2019, resulting in an improved adjusted operating profit
performance this year over the prior year. This is despite lower
profits from our Xeim and Lawyer businesses. 2020 has also
encouraged bold thinking - the Group moved quickly to close the
low-margin telemarketing business at MarketMakers and also
responded quickly to the opportunity to offer events and training
in a virtual, rather than face-to-face, format. Having reduced our
dependence on events revenue (37% of revenue in 2018 but only 13%
in 2019) and generated significant cash proceeds from the disposal
programme, Centaur had the flexibility and made good managerial
decisions to exit 2020 in a strong position.
In our 2019 Annual Report and Accounts, we announced a 0.5p per
ordinary share dividend to be paid in May 2020. We cancelled
payment of that dividend shortly after the onset of the pandemic
due to significant uncertainty about how the Group's cash profile
would respond. I am delighted to report that, despite these
worries, operating cash performance has remained very strong and
the Group closed 2020 with GBP8.3m in the bank (2019: GBP9.3m). The
Board is therefore pleased to be able to recommend the payment of a
final dividend of 0.5p per share for the year 2020. In 2021, we
will revert to our dividend policy of payment of either 40% of
adjusted retained earnings or 1.0p per share - whichever is
greater.
We are also pleased to announce the reassessment of our Margin
Acceleration Plan ("MAP22") which targeted 20% Adjusted EBITDA in
2022 (without the benefit of the impact of IFRS 16). Following the
pandemic of this year, we have now amended this target to MAP23
which targets an Adjusted EBITDA margin of 23% in 2023. This is
combined with a minimum revenue target of GBP45m for that year. Our
future reporting will demonstrate our progress to achieving this
target.
Performance
Group
Statutory revenue fell by GBP7.2m in 2020 - a fall of 18%. Xeim
declined 17% and The Lawyer 22%. Underlying revenue for Xeim,
excluding the impact of Marketing Week Live that was closed in
2019, fell 14% giving a consolidated fall in the Group's underlying
revenue of 16%.
The Group posted an adjusted operating profit of GBPnil in the
year (2019: a loss of GBP1.2m) and has therefore improved its
like-for-like trading performance for the continuing business
despite the impact of the pandemic in 2020. The Group has seen a
full year's benefit of the cost savings programme reported in its
2019 Annual Report and has achieved an annualised cost reduction of
over GBP6m. This has enabled the Group to outperform 2019 despite
reduced revenues in various business lines during the year
primarily as a result of the pandemic. The Group received payments
from the government's Job Retention Scheme (JRS) during the period
from April to September 2020 totaling GBP0.8m in relation to
approximately 130 furloughed employees. Of this amount GBP0.5m
related to the MarketMakers telemarketing business in Portsmouth
which, as described later in this review, we closed in August. The
remaining GBP0.3m of the grant has therefore been recognised within
the adjusted operating profit from continuing operations.
As a result of this performance, Adjusted EBITDA margin
increased from 10% in 2019 to 12% in 2020 showing progress towards
our MAP23 targets, albeit on reduced revenues. The Group is
reporting a statutory loss after taxation of GBP14.4m (2019: a
profit of GBP1.9m) primarily due to the closure of the MarketMakers
telemarketing business in the year with impairment of GBP11.0m of
goodwill.
Xeim
Xeim's underlying revenue for 2020 was GBP26.0m, a reduction
from GBP30.3m in 2019. Premium content fell 13% as some of our
major brands (Econsultancy, Influencer Intelligence and Fashion
Monitor) were impacted by economic uncertainty. Marketing Services,
which represents our Really business, saw a more significant fall
of 33% partially as a result of the issues experienced at
MarketMakers.
Underlying revenue from Xeim events halved to GBP1.6m with the
vast majority of the reduction being driven by the move to a
virtual event at the Festival of Marketing following the
introduction of social distancing measures.
Training and advisory revenue saw strong growth of 12% on the
back of continued excellent performance in eLearning revenues from
both the Mini MBA and Brand courses, partially offset by reductions
in training and advisory provided by Econsultancy and lower pitch
revenues for the Oystercatchers business.
As highlighted, Xeim's telemarketing business, MarketMakers, was
closed in 2020 and its results and prior-year comparatives are now
re-presented as discontinued operations in line with accounting
standards. Its results therefore do not form part of the commentary
on continuing operations below.
Xeim reports an Adjusted EBITDA of GBP4.3m for the year, a
reduction from GBP7.2m in 2019. Despite responding quickly to the
economic downturn by cutting business unit costs significantly, the
reduction in statutory revenue of GBP5.4m has impacted Xeim's
result for the year.
Xeim contains three of the Group's Flagship 4 brands -
Econsultancy, Influencer Intelligence and Mini MBA.
Econsultancy revenues fell 12% in the year driven primarily by a
17% reduction in premium content revenues and 14% fall in training
revenues. New business was severely impacted by the economic
downturn for the period of March to May but picked up strongly in
the final four months of the year so that overall, year-on-year new
business subscription sales increased 21%. Renewals struggled
during the first half of the year as the pandemic created
uncertainty in our customer base but recovered in the second half
such that a subscription renewal rate of 64% was achieved, a flat
performance compared to 2019. Renewal rates will be driven upwards
in 2021 through our blended learning strategy increasing usage as a
result of better content format, together with improved account
management processes.
Econsultancy's face-to-face training and advisory contracts were
significantly impacted by the restrictions imposed due to the
pandemic. The shifts to virtual training partially mitigated this
fall with some sizeable digital transformation advisory contracts
being executed and delivered in the second half of the year.
Through continued improvement in its blended learning proposition,
the introduction of Econsultancy Live events and building on our
market-leading position as digital transformation specialists, we
anticipate that Econsultancy revenues will return to growth in
2021.
Influencer Intelligence revenue has fallen 6% in the year on the
back of a reduction in new business as many of our potential
customers in the retail and fashion sectors struggled. Renewals
fell, in terms of both volume and value, during the first four
months of the pandemic but picked up strongly from the summer. We
anticipate significant billings growth in 2021 from the combination
of increasing renewal rates, an uplift in new business, customer
upselling relating to new campaign management tools and a new
ecommerce product for SME customers.
The Mini MBA has had an exceptional year with delegate numbers
up 92% year-on-year and NPS scores of +75. Both the marketing and
brand courses in the spring and autumn cohorts achieved excellent
growth and in addition we delivered a bespoke version of the
marketing course for several customers. Overall, revenue increased
89% on 2019 and growth is anticipated to continue into 2021 due to
improvements in the course, the launch of a new marketing website
and through targeted marketing campaigns.
Of our core Xeim brands, Festival of Marketing saw a significant
downturn in revenue due to the restrictions of the pandemic and as
a consequence, we moved swiftly to launch it as a virtual event in
2020. Although delegate numbers only fell by 4% year-on-year, the
yield was significantly lower. Sponsorship was also hit as a large
decline in individual sponsors was only partially offset by an
improved average yield. We will continue to monitor the Covid
situation with a view to only returning to a physical format when
it is safe to do so.
MarketMakers business model became unsustainable after the onset
of the pandemic and lost numerous large contracts. The Group made
the difficult and sensitive decision to terminate its telemarketing
business. However, the related Really marketing services business
has now been fully merged into Xeim and is expected to return to
revenue growth in 2021 after a difficult year.
The Lawyer
The Lawyer continued to show growth (9%) in underlying premium
content revenue as yield and renewal rates remained strong,
primarily in corporate subscriptions, which grew 11%. Overall,
underlying revenues for The Lawyer fell 21% due to the impact of
Covid. The cancellation of face-to-face events, partially mitigated
by a move to virtual events, led to a 57% reduction in event
revenue. High-margin recruitment advertising fell 40% as economic
uncertainty grew in 2020 and law firms delayed hiring.
This led to a fall in Adjusted EBITDA from GBP3.2m in 2019 to
GBP2.1m in 2020. The underlying business continues to perform
strongly and the ability of the business to grow premium content
during a severe recession indicates how important it has become to
leading law firms and their fee earners.
Measurement and non-statutory adjustments
The statutory results of the Group are presented in accordance
with International Financial Reporting Standards ("IFRS"). The
Group also uses alternative reporting and other non-GAAP measures
as explained below and as defined in the 'Alternative Performance
Measures' table below.
Adjusting items
Adjusted results are not intended to replace statutory results
but are prepared to provide a better comparison of the Group's core
business performance by removing the impact of certain items from
the statutory results. The Directors believe that adjusted results
and adjusted earnings per share are the most appropriate way to
measure the Group's operational performance because they are
comparable to the prior year and consequently review the results of
the Group on an adjusted basis internally. Statutory operating loss
from continuing operations reconciles to adjusted operating loss
and Adjusted EBITDA as follows:
Note 2020 Re-presented
GBPm 2019
GBPm
-------------------------------------- -------- --- ------ --------------
Statutory operating loss (2.3) (7.8)
Adjusting items:
Exceptional operating costs 4 0.2 4.7
Amortisation of acquired intangible
assets 11 1.5 1.7
Share based payments 24 0.5 0.1
Loss on disposal of assets and
liabilities 11,12,19 0.1 -
Loss on disposal of subsidiary 8,14 - 0.1
--- -----
2.3 6.6
------ -------
Adjusted operating loss - (1.2)
Depreciation, software amortisation
and impairment 3 3.8 5.2
------ -------
Adjusted EBITDA 3.8 4.0
Adjusted EBITDA margin 12% 10%
-------------------------------------- -------- --- ------ ----- -------
Adjusting items from continuing operations of GBP2.3m in the
year (2019: GBP6.6m) are comprised as follows:
Adjusting Item Description
--------------------------- -------------------------------------------------------
Exceptional operating Exceptional costs of GBP0.2m relate primarily
costs to staff restructuring costs following the
onset of the pandemic. 2019 included GBP2.5m
of staff restructuring costs and GBP2.2m of
costs related to the divestment programme.
Amortisation of acquired Amortisation of acquired intangible assets
intangible assets of GBP1.5m has fallen slightly (2019: GBP1.7m)
as certain assets have fully unwound. GBP0.4m
(2019: GBP0.7m) of amortisation relating to
MarketMakers was reallocated to discontinued
operations.
Share based payments Share based payments of GBP0.5m were higher
than the 2019 comparative of GBP0.1m. 2019
contained a significant number of forfeitures
and lapses of share options which resulted
in reversals of charges previously recorded.
Loss on disposal GBP0.1m relates primarily to small write-offs
of assets and liabilities of software development costs and computer
equipment as well as the ROU asset offset by
the disposal of lease liability on exit of
the Portsmouth lease.
Loss on disposal In 2019, a loss of GBP0.1m on disposal of subsidiaries
of subsidiary was reported relating to the sale of Venture
Business Research.
--------------------------- -------------------------------------------------------
Underlying revenue and profit
The Group also measures and presents performance in relation to
various other non-GAAP measures, such as underlying revenue. These
have been presented to provide users with additional information
and analysis of the Group's performance, consistent with how the
Board monitors results. The Group's activities are predominantly
UK-based and therefore currency movements do not have a material
impact on results.
In 2019, the Group disposed of VBR which was included in The
Lawyer business unit. Due to its size, it has not been treated as
discontinued and its revenues (2020 GBPnil; 2019: GBP0.1m) were
reported as part of the Group's continuing revenue in 2019.
Marketing Week Live, which was included in Xeim, was closed in 2019
and therefore its revenue has also been excluded for underlying
reporting purposes (2020 GBPnil; 2019: GBP1.1m).
No other underlying revenue adjustments have been made to the
statutory revenue numbers.
Segment Profit
In 2019, we improved clarity around our business units'
performance by introducing the concept of segmental profit which
consists of gross contribution for a business unit minus specific
overheads and also specific allocations of the central support
teams and overheads that are directly related to each business
unit. Any costs not attributable to either Xeim or The Lawyer,
remain as part of central costs.
The table below shows the statutory and underlying revenue for
each business unit:
Re-presented
---------------------------
Xeim The Lawyer Total Xeim The Lawyer Total
2020 2020 2020 2019 2019 2019
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------ ----------- ------ ------ ----------- ------
Underlying revenue
Premium Content 9.5 3.7 13.2 10.9 3.4 14.3
Marketing Services 2.9 - 2.9 4.3 - 4.3
Training and Advisory 8.5 - 8.5 7.6 - 7.6
Events 1.6 0.9 2.5 3.2 2.1 5.3
Marketing Solutions 3.3 0.9 4.2 3.5 1.1 4.6
Recruitment Advertising 0.2 0.9 1.1 0.8 1.5 2.3
Total underlying revenue 26.0 6.4 32.4 30.3 8.1 38.4
Underlying revenue growth (14)% (21)% (16)%
Revenue from closed or disposed
businesses - - - 1.1 0.1 1.2
-------------------------------- ------ ----------- ------ ------ ----------- ------
Total statutory revenue 26.0 6.4 32.4 31.4 8.2 39.6
-------------------------------- ------ ----------- ------ ------ ----------- ------
The table below reconciles the adjusted operating profit/(loss)
for each segment to the Adjusted EBITDA:
Re-presented
------------------------------------
Xeim The Central Total Xeim The Central Total
Lawyer Lawyer
2020 2020 2020 2020 2019 2019 2019 2019
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------- -------- -------- ------- ------- -------- -------- -------
Revenue 26.0 6.4 - 32.4 31.4 8.2 - 39.6
Other income - - - - - - 1.6 1.6
Operating costs (24.1) (5.0) (3.3) (32.4) (27.4) (5.9) (9.1) (42.4)
---------------------------------- ------- -------- -------- ------- ------- -------- -------- -------
Adjusted operating profit/(loss) 1.9 1.4 (3.3) - 4.0 2.3 (7.5) (1.2)
Adjusted operating margin 7% 22% 0% 13% 28% (3)%
Depreciation, amortisation
and impairment 2.4 0.7 0.7 3.8 3.2 0.9 1.1 5.2
---------------------------------- ------- -------- -------- ------- ------- -------- -------- -------
Adjusted EBITDA 4.3 2.1 (2.6) 3.8 7.2 3.2 (6.4) 4.0
Adjusted EBITDA margin 17% 33% 12% 23% 39% 10%
---------------------------------- ------- -------- -------- ------- ------- -------- -------- -------
Net finance costs
Net finance costs were GBP0.3m (2019: GBP0.3m). The Group held
positive cash balances throughout the year and therefore in both
2020 and 2019 the vast majority of finance costs relate to the
commitment fee payable for the revolving credit facility as well as
interest on lease payments for right-of-use assets.
Taxation
A tax credit of GBP0.9m (2019 re-presented: GBP0.6m) has been
recognised on continuing operations for the year. The adjusted tax
credit was GBP0.6m (2019: an expense of GBP0.5m). The Company's
profits were taxed in the UK at a blended rate of 19.0% (2019:
19.0%). On a reported basis, the effective tax rate is 35%
(re-presented 2019: 7%). The 35% rate is driven by the revaluation
of deferred tax balances to 19% from 17% and the timing of
tax-deductible items relating to the 2019 disposal programme. See
note 7 for a reconciliation between the statutory reported tax
charge and the adjusted tax charge.
Discontinued operations
In 2020, discontinued operations relate to the closure of the
MarketMakers telemarketing business that was terminated due to a
significant reduction in revenue following the onset of the
pandemic and include GBP11.0m of goodwill impairment. The 2019
comparatives include the re-presentation of the MarketMakers
telemarketing business into discontinued operations within the
reported statutory results for the Group.
Discontinued Discontinued Continuing As reported
2020 2019 2019 2019
GBPm GBPm GBPm GBPm
----------------------- ------------ ------------ ---------- -----------
Revenue 3.6 9.3 39.6 48.9
Other operating income - - 1.6 1.6
Net operating expenses (15.9) (9.9) (49.0) (58.9)
Loss on disposal (0.7) - - -
----------------------- ------------ ------------ ---------- -----------
Operating loss (13.0) (0.6) (7.8) (8.4)
Finance costs - - (0.3) (0.3)
----------------------- ------------ ------------ ---------- -----------
Loss before tax (13.0) (0.6) (8.1) (8.7)
Taxation 0.3 0.1 0.6 0.7
Loss after tax (12.7) (0.5) (7.5) (8.0)
----------------------- ------------ ------------ ---------- -----------
Earnings/losses per share
The Group has delivered adjusted diluted earnings per share for
the year of 0.3 pence (2019: 0.3 pence). Diluted earnings per share
for the year were a loss of 10.0 pence (2019: earnings of 1.3
pence). Full details of the earnings per share calculations can be
found in note 9 to the financial information.
Dividends
In 2019 the Group announced a new dividend policy, applicable
from 1 January 2020 such that Centaur will target a pay-out ratio
of 40% of adjusted retained earnings, subject to a minimum dividend
of 1.0p per share per annum.
In light of this, the Group proposed a final dividend in March
2020 of 0.5p per ordinary share in respect of 2019. However,
following the onset of the pandemic and the uncertain impact on
cash, the Group announced in May 2020 that it was prudent to cancel
the payment of that final dividend.
Following the relatively robust performance of the Group over
the last year and strong cash balances, the Board is pleased to
announce its intention to reinstate the payment of dividends and is
proposing a final dividend of 0.5p per ordinary share in respect of
the 2020 year.
This dividend is subject to shareholder approval at the Annual
General Meeting and, if approved, will be paid on 28 May 2021 to
all ordinary shareholders on the register at the close of business
on 14 May 2021.
Cash flow
2020 2019
GBPm GBPm
-------------------------------------------- ----- -----
Adjusted operating profit (1) - 1.8
Depreciation, amortisation and impairment 4.0 5.5
Movement in working capital 2.5 -
-------------------------------------------- ----- -----
Adjusted operating cash flow 6.5 7.3
Capital expenditure (0.8) (1.6)
Cash impact of adjusting items (4.6) (2.7)
Taxation - 0.1
Repayment of lease obligations and interest (2.1) (2.5)
Free cash flow (1.0) 0.6
Acquisitions - (0.1)
Disposal of subsidiaries (0.1) 16.4
Disposal of intangible assets 0.1 -
Share repurchases - (0.6)
Dividends paid to Company's shareholders - (7.1)
-------------------------------------------- ----- -----
(Decrease)/increase in net cash (1.0) 9.2
Opening net cash 9.3 0.1
-------------------------------------------- ----- -----
Closing net cash 8.3 9.3
-------------------------------------------- ----- -----
Cash conversion 100% 100%
-------------------------------------------- ----- -----
(1) Adjusted operating profit for the purposes of the cash flow
includes the adjusted operating profit from discontinued operations
of GBPnil (2019: GBP3.0m).
Adjusted operating cash flow is not a measure defined by IFRS.
Centaur defines adjusted operating cash flow as cash flow from
operations excluding the impact of adjusting items, which are
defined above. The Directors use this measure to assess the
performance of the Group as it excludes volatile items not related
to the core trading of the Group and includes the Group's
management of capital expenditure. A reconciliation between cash
flow from operations and adjusted operating cash flow is shown in
note 1(b) to the financial information.
The movement in working capital in 2020 includes GBP1.0m
relating to the deferral of VAT payments under the government's
Covid VAT payment deferral scheme, which is planned to be re-paid
in 2021, and the receipt of GBP1.5m relating to the lease incentive
on the Wells Street office that was vacated in early 2020. The cash
conversion has been adjusted to exclude these one-off items. The
cash impact of adjusting items primarily relates to exceptional
restructuring costs in both years.
MAP23
In 2019, the Group introduced its Margin Acceleration Plan
(MAP22) which targeted an Adjusted EBITDA margin of at least 20% by
2022, excluding the benefit of IFRS 16. Due to the impact of Covid,
the Group has now re-assessed its three-year plan and in January
2021 announced "MAP23" under which the Group would raise Group
Adjusted EBITDA margins to 23% (including the impact of IFRS 16) by
2023, while increasing revenues to GBP45m.
Financing and bank covenants
During the first half of 2020, with great uncertainty around
trading and cash flows, the Group agreed a temporary alteration in
the terms of its revolving credit facility of GBP25m. Until
September 2021, it was agreed that the facility would be limited to
GBP10m but with a waiving of leverage/interest cover covenants. The
waiver was subject to a minimum liquidity test of GBP3m combining
the GBP10m revolving credit facility limit and the Group's GBP1.7m
overdraft facility.
On 16 March 2021, the Group signed a new revolving credit
facility with NatWest that replaces the GBP25m facility signed with
NatWest and Lloyds in 2018. The new facility is for up to GBP10m
and a three-year duration with the option of two further one-year
periods. The covenants regarding leverage and interest cover are
identical to those of the facility it replaces.
Balance sheet
2020 2019
GBPm GBPm
------------------------------------- ----- -----
Goodwill and other intangible assets 46.1 61.2
Property, plant and equipment 3.3 4.3
Deferred taxation 2.2 1.0
Deferred income (7.0) (8.7)
Other current assets and liabilities (4.8) (4.2)
Non-current assets and liabilities (0.9) (1.8)
------------------------------------- ----- -----
Net assets before cash 38.9 51.8
Net cash 8.3 9.3
------------------------------------- ----- -----
Net assets 47.2 61.1
------------------------------------- ----- -----
In 2020, goodwill and other intangibles have fallen by GBP15.1m
primarily due to the impact of terminating operations at the
MarketMakers telemarketing business and the related impairment and
elimination of GBP11.0m of goodwill. Property, plant and equipment
has fallen by GBP1.0m primarily due to the disposal of the
MarketMakers' right-of-use asset pertaining to its offices in
Portsmouth following the closure of that business. Deferred income
has fallen by GBP1.7m primarily due to the closure of the
MarketMakers telemarketing business in 2020. Xeim deferred income
is flat year on year with strong growth in deferred income for
training offset by lower levels of premium content at Fashion
Monitor, Influencer Intelligence and Econsultancy. The Lawyer's
deferred income levels have fallen slightly due to the impact of
event cancellations and deferrals.
Going concern
After due consideration, as required under IAS 1 Presentation of
Financial Information, including consideration of the Group's net
current liability position, the Group's forecasts for at least
twelve months from the date of this report, and the effectiveness
of risk management processes, the Directors have concluded that it
is appropriate to continue to adopt the going concern basis in the
preparation of the consolidated financial information for the year
ended 31 December 2020. As detailed under the Risk Management
section, the Directors have assessed the viability of the Group
over a three-year period to March 2024 and the Directors have a
reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over that
period.
Conclusion
Centaur performed robustly in 2020 despite unprecedented
external circumstances. The resilience of our brands, combined with
our cost-cutting initiatives, management action to address
MarketMakers, and our strong cash balance mean that we are well-set
to achieve the targets set out in our MAP23 strategy.
Alternative performance measures
Measure Definition
------------------ ------------------------------------------------------
Adjusted EBITDA Adjusted operating profit before depreciation
and impairment of tangible assets and amortisation
and impairment of intangible assets other than
those acquired through a business combination,
after the impact of IFRS 16 to remove property
rental charges.
Adjusted EBITDA Adjusted EBITDA as a percentage of revenue.
margin
Adjusted effective Adjusted tax charge as a percentage of Adjusted
tax rate profit before tax.
Adjusted EPS EPS calculated using Adjusted profit for the
period.
Adjusting items Items as set out in the statement of consolidated
income and notes 1(b) and 4 of the financial
information including exceptional items, amortisation
of acquired intangible assets, profit/(loss)
on disposal of assets, share based payment
expense, volatile items predominantly relating
to investment activities and other separately
reported items.
Adjusted operating Operating profit/(loss) excluding Adjusting
profit/(loss) items.
Adjusted profit Profit before tax excluding Adjusting items.
before tax
Cash conversion Adjusted operating cash flow (excluding any
one-off significant cash flows) / Adjusted
EBITDA (including discontinued operations).
Exceptional items Items where the nature of the item, or its
magnitude, is material and likely to be non-recurring
in nature as shown in note 4.
Free cash flow Increase/decrease in cash for the year before
the impact of debt, acquisitions, disposals,
dividends and share repurchases.
Segment profit Adjusted operating profit of a segment after
allocation of central support teams and overheads
that are directly related to each segment or
business unit.
Underlying revenue Statutory revenue adjusted to exclude the impact
of revenue arising from acquired businesses,
disposed businesses that do not meet the definition
of discontinued operations per IFRS 5, and
closed business lines ("excluded revenue").
------------------ ------------------------------------------------------
Risk Management
Risk management approach
The Board has overall responsibility for the effectiveness of
the Group's system of risk management and internal controls, and
these are regularly monitored by the Audit Committee.
The Executive Committee, Company Secretary and the Head of Legal
are responsible for identifying, managing and monitoring material
and emerging risks in each area of the business and for regularly
reviewing and updating the risk register, as well as reporting to
the Audit Committee in relation to risks, mitigations and controls.
As the Group operates principally from one office and with
relatively flat management reporting lines, members of the
Executive Committee are closely involved in day-to-day matters and
are able to identify areas of increasing risk quickly and respond
accordingly. The responsibility for each risk identified is
assigned to a member of the Executive Committee. The Audit
Committee considers risk management and controls regularly and the
Board formally considers risks to the Group's strategy and plans as
well as the risk management process as part of its strategic
review.
The risk register is the core element of the Group's risk
management process. The register is maintained by the Company
Secretary with input from the Executive Committee and the Head of
Legal. The Executive Committee initially identifies the material
risks and emerging risks facing the Group and then collectively
assesses the severity of each risk (by ranking both the likelihood
of its occurrence and its potential impact on the business) and the
related mitigating controls.
As part of its risk management processes, the Board considers
both strategic and operational risks, as well as its risk appetite
in terms of the tolerance level it is willing to accept in relation
to each principal risk, which is recorded in the Company's risk
register. This approach recognises that risk cannot always be
eliminated at an acceptable cost and that there are some risks
which the Board will, after due and careful consideration, choose
to accept. The Group's risk register, its method of preparation and
the operation of the key controls in the Group's system of internal
control are regularly reviewed and overseen by the Audit Committee
with reference to the Group's strategic aims and its operating
environment. The register is also reviewed and considered by the
Board.
As part of the ongoing enhancement of the Group's risk
monitoring activities, we reviewed and updated the procedures by
which we evaluate principal risks and uncertainties during the
year.
Principal risks
The Group's risk register currently includes operational and
strategic risks. The principal risks faced by the Group in 2020,
taken from the register, together with the potential effects and
mitigating factors, are set out below. The Directors confirm that
they have undertaken a robust assessment of the principal and
emerging risks facing the Group. Financial risks are shown in note
27 to the financial information.
Rank Risk Description of risk Risk mitigation/control Movement
and impact procedure in risk
---- ------------------------- -------------------------------- --------------------------------- ----------
1 Sensitivity The world economy Most of the risk impacts The Board
to UK/sector has been severely Centaur from our customers. considers
economic conditions. impacted by the pandemic We have demonstrated this
and UK GDP fell 18.3% we can mitigate the risk risk
in April 2020, recovering by increased digitalisation, to have
to a 9.9% fall for running virtual events increased
the whole of 2020. and offering more e-learning. since
This, combined with Part of the strategic the prior
the end of the transition plan for Centaur is to year.
deal with the EU at increase international
the end of 2020, has organic growth in the
significantly increased mid to longer term, focusing
the Group's sensitivity on the US and Asia in
to UK/sector volatility particular, in order
and economic conditions. to mitigate this risk.
The impact was acute We are also increasing
on some of Centaur's our focus on targeting
target market segments larger scale multinational
eg fashion and retail businesses which have
and entertainment. a more diversified risk
The likelihood of profile.
ongoing volatility Many of the Group's products
will be high in 2021 are market-leading in
and there are varying their respective sectors
views as to the timing and are an integral part
and extent of a recovery. of our customers' operational
processes, which mitigates
the risk of reduced demand
for our products.
The Group regularly reviews
the political and economic
conditions and forecasts
for the UK, including
specific risks such as
Covid, and the main sectors
in which it operates
to assess whether changes
to its product offerings
or pricing structures
are necessary.
---- ------------------------- -------------------------------- --------------------------------- ----------
2 Failure to Centaur's success There has been a significant The Board
deliver a depends on growing focus on employee communication considers
high growth the business and completing this year. This has included this
performance the MAP23 strategy. CEO Breakfasts, Weekly risk
culture. In order to do this, Updates, Local Town Halls, to be
The risk that it depends in large monthly all Company Q&A broadly
Centaur is part on its ability sessions, staff welfare the same
unable to to recruit, motivate calls. as for
attract, develop and retain highly We regularly review measures the prior
and retain experienced and qualified aimed at improving our year.
an appropriately employees in the face ability to recruit and
skilled, diverse of often intense competition retain employees and
and responsible from other companies, to track employee engagement.
workforce especially in London. Weekly "check-ins" via
and leadership Investment in training, Engage ensure we have
team, and development and pay a "mood" of the business
maintain a awards needs to be and an understanding
healthy culture compelling but will of any key risks or challenges
which encourages be challenging in as they arise.
and supports the current economic Our employee engagement
ethical high-performance and operating climate. team, DICE, focus on
behaviours Implementing a diverse Diversity, Inclusion,
and decision and inclusive working Culture and Engagement
making. environment that allows along with other key
Difficulties for agile and remote issues and opportunities
in recruiting delivery is necessary that can challenge the
and retaining to keep the "millennial" business played an important
staff could workforce engaged role this year in driving
lead to loss and enabled us to forward initiatives relating
of key senior cope well with the to diversity, sending
staff. transition to homeworking. regular communications
High staff churn (a and arranging virtual
challenge for many social functions and
companies in our sector) events. This is sponsored
has not been an issue by the CEO and a Non-Executive
during 2020 but we Director.
will need to keep A review takes place
our policies and practices annually to ensure flight
under review as and risks and training needs
when a return to the are identified which
office becomes a reality. become the focus for
Developing the MAP23 pay, reward and development
business strategy areas. All London based
and changes required staff continue to be
in skill set and culture paid at or above the
are challenging and London Living Wage.
costly. Our HR processes include
exit interviews for all
leavers to resolve areas
of concern.
---- ------------------------- -------------------------------- --------------------------------- ----------
3 Fraudulent A serious occurrence Appropriate IT security The Board
or accidental of a loss, theft or is undertaken for all considers
breach of misuse of personal key processes to keep this
our security, data or sensitive the IT environment safe. risk
or ineffective or confidential information Websites are hosted by to be
operation could result in reputational specialist third-party broadly
of IT and damage, a breach of providers who provide the same
data management data protection requirements warranties relating to as the
systems leads or direct financial security standards. All prior
to loss, theft impact. See risk 4: of our websites have year.
or misuse GDPR, PECR below. been migrated onto a
of personal Centaur collects and new and more secure platform
data or confidential processes personal which is cloud hosted.
information data and confidential External access to data
or other breach information from some is protected and staff
of data protection of its customers, are instructed to password
requirements. users and other third protect or encrypt where
parties. appropriate.
Centaur is at risk Following the simplification
from a serious occurrence of the Group in 2019,
of a loss, theft or the data team has simplified
misuse of personal the warehouse structure
data or confidential with stringent data retention
information on our processes. The Group
software/hardware Head of Data ensures
due to the actions that rigorous controls
of a Centaur employee, are in place so that
partner or third party. only the data team can
download warehouse data.
Cross-system data integrations
are all performed under
secure transfer protocols.
Centaur has a business
continuity plan which
includes its IT systems
and there is daily, overnight
back-up of data, stored
off-site.
Please see risk 4 below
for specifics relating
to the GDPR compliance/data.
---- ------------------------- -------------------------------- --------------------------------- ----------
4 Regulatory; The UK General Data Centaur has taken a wide The Board
GDPR, PECR Protection Regulation range of measures aimed considers
and other ('GDPR'), the Data at complying with the this
similar legislation Protection Act 2018 key aspects of the GDPR, risk
involve strict ('DPA') and the Privacy DPA and PECR. to be
requirements and Electronic Communications In March 2020, a Data broadly
regarding Regulations ('PECR') Protection Compliance the same
how Centaur involve strict requirements Committee was formed as the
handles personal for Centaur regarding (overseen by the CFO) prior
data, including its handling of personal in order to monitor Centaur's year.
that of customers data. Centaur's obligations ongoing compliance with
and the risk under the GDPR are these data protection
of a fine complex meaning this laws.
from the ICO, area requires ongoing ICO guidance relating
third party focus. to the use of cookies
claims (eg PECR includes specific published in 2019, and
from customers) obligations for businesses further changes to the
as well as like Centaur regarding laws relating to data
reputational how they conduct electronic privacy, ad tech and
damage if marketing calls, emails, electronic marketing
we do not texts, and on their expected in the near
comply. use of cookies and future, will further
similar technologies, increase the regulatory
among other things. burden for businesses
In the event of a like Centaur, and the
serious breach of requirements in this
the data legislation, regard will need to be
Centaur could be subject kept under review.
to a significant fine Staff are required to
from the regulator undertake online data
(the ICO) and claims protection awareness
from third parties and data security awareness
including customers training annually.
as well as reputational Centaur's in-house lawyer
damage. keeps abreast of material
The maximum fines developments in data
for breaches are GBP17.5 protection law and regulation
million (GDPR) and and advice from external
GBP500,000 (PECR) specialist law firms
respectively and directors is sought where appropriate.
can have liability Given the increasingly
for serious breaches global nature of our
of PECR's marketing business and our customers
rules. Centaur's approach to
Other countries (e.g. complying with data protection
USA) and jurisdictions laws in other jurisdictions
worldwide are also should be kept under
reviewing and updating review. In 2020, Centaur
their own laws relating implemented various measures
to data and privacy. to mitigate against risk
Where Centaur is required in respect of the CCPA,
to comply with the a new Californian privacy
laws in non-UK jurisdictions law, and also appointed
there is a risk that an 'EU representative'
Centaur may not be under the GDPR ahead
compliant with all of Brexit.
such laws and could
therefore be subject
to regulatory action
and fines from the
relevant regulators
and data subjects.
5 Serious systems Centaur relies on Centaur has invested The Board
failure (affecting its IT network to significantly in its considers
core systems conduct its operations. IT systems and where this
and multiple The IT network is services are outsourced risk
products or at risk of a serious to suppliers, contingency to be
functions) systems failure or planning is carried out broadly
or breach breach of its security to mitigate risk of supplier the same
of IT network controls. This could failure. as the
security (as result from deliberate Centaur continues to prior
a result of cyber-attacks or unintentional develop its CRM, ecommerce year.
a deliberate events and may include and finance systems and
cyber-attack third parties gaining following the divestments
or unintentional unauthorised access in 2019 has removed a
event). to Centaur's IT network number of legacy systems
and systems resulting reducing the Group's
in misappropriation cyber risk.
of its financial assets, Our IT and information
proprietary or sensitive security-related policies
information, corruption were upgraded in 2018
of data, or operational to further ensure our
disruption, such as staff understand their
unavailability of responsibilities in relation
our websites and our to IT and information
digital products to security and are accountable
users or unavailability for their compliance
of support platforms. with our policies. We
If Centaur suffers review these policies
a serious cyber-attack, at least once annually
whether as a result to ensure that they remain
of a third party or fit for purpose.
insider, any operational Centaur has also implemented
disruption may directly a number of security
affect our revenues improvements to better
or collection activities. protect and monitor our
Centaur could incur network, systems and
significant costs data.
and suffer other negative All employees are required
consequences, such to undertake online training
as remediation costs on data security awareness
(including liability and data protection awareness
for stolen assets annually.
or information, and We have taken additional
repair of any damage insurance cover in respect
caused to Centaur's of a serious failure
IT network infrastructure of IT network security
and systems). Centaur controls.
could also suffer
reputational damage
and loss of investor
confidence resulting
from any operational
disruption.
---- ------------------------- -------------------------------- --------------------------------- ----------
Viability Statement
In accordance with provision 31 of the UK Corporate Governance
Code 2018, the Directors have assessed the viability of the Group
over a three-year period from signing of this Annual Report to
March 2024, taking account of the Group's current position, the
Group's strategy, the Board's risk appetite and, as documented
above, the principal risks facing the Group and how these are
managed. Based on the results of this analysis, the Directors have
a reasonable expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over the
period to March 2024.
The Board has determined that the three-year period to March
2024 is an appropriate period over which to provide its viability
statement because the Board's financial planning horizon covers a
three-year period. In making their assessment, the Directors have
taken account of the Group's new GBP10m three-year revolving credit
facility (which allows extensions to 2026 on similar terms), cash
flows, dividend cover and other key financial ratios over the
period.
The covenants of the facility are a maximum interest cover ratio
of 4 and net leverage shall not exceed the last twelve months'
Adjusted EBITDA, excluding the impact of IFRS 16, by more than 2.5
times. In none of the scenarios run for the viability statement is
the Group expected to breach any of these covenants.
The base scenario assumes that the Group's MAP23 targets are
met. These targets were built, bottom-up during 2020 once the
impact of Covid had become clear. The Group's events and
recruitment advertising revenues have been hardest hit by the
pandemic and this impact has been factored into MAP23, including
the conservative assumption that no revenue will be realised from
physical events in 2022. Revenue growth in MAP23 is therefore
focused on continued growth in the Mini MBA, albeit at a lower
growth rate than its historical trend, and improvements in premium
content revenue from the rest of the Flagship 4 brands.
The metrics in the base case are subject to stress testing which
involves sensitising key assumptions underlying the forecasts both
individually and in unison. The assumption sensitised included a
scenario under which the Group's forecast Adjusted EBITDA dropped
by approximately 30%. In this scenario, the impact is more severe
with new virtual event formats being less successful than the base
case and Mini MBA growth significantly below historical trends.
Premium content billings growth would be weaker in this scenario
and working capital generation is also assumed to be less
strong.
Under no sensitised circumstances would the Group be required to
rely on the revolving credit facility to fund its daily operations.
Sensitising the model for changes in the assumptions and risks
affirmed that the Group would remain viable over the three-year
period to March 2024.
Going concern basis of accounting
In accordance with provision 30 of the UK Corporate Governance
Code 2018, the Directors' statement as to whether they consider it
appropriate to adopt the going concern basis of accounting in
preparing the financial information and their identification of any
material uncertainties, including the principal risks outlined
above, to the Group's ability to continue to do so over a period of
at least twelve months from the date of approval of the financial
information and for the foreseeable future, being the period as
discussed in the viability statement above.
Statement of Directors' Responsibilities in respect of the
financial information
The Directors are responsible for preparing the Annual Report
and the financial information in accordance with applicable law and
regulation.
Company law requires the Directors to prepare financial
information for each financial year. Under that law the Directors
have prepared the Group financial information in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and Company financial information in accordance
with International Financial Reporting Standards (IFRSs) as adopted
by the European Union. Under company law the Directors must not
approve the financial information unless they are satisfied that
they give a true and fair view of the state of affairs of the Group
and Company and of the profit or loss of the Group and Company for
that period. In preparing the financial information, the Directors
are required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRSs as adopted by the European
Union have been followed for the Group financial information and
IFRSs as adopted by the European Union have been followed for the
Company financial information, subject to any material departures
disclosed and explained in the financial information;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial information on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are also responsible for safeguarding the assets
of the Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial information and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regards the Group financial information, Article 4 of the IAS
Regulation.
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
information may differ from legislation in other jurisdictions.
Directors' confirmations
The Directors consider that the annual report and accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group and
Company's position and performance, business model and
strategy.
Each of the Directors, whose names and functions are listed in
the Governance Report confirm that, to the best of their
knowledge:
-- the Company financial information, which have been prepared
in accordance with IFRSs as adopted by the European Union, give a
true and fair view of the assets, liabilities, financial position
and result of the Company;
-- the Group financial information, which have been prepared in
accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group; and
-- the Directors' Report includes a fair review of the
development and performance of the business and the position of the
Group and Company, together with a description of the principal
risks and uncertainties that it faces.
In the case of each Director in office at the date the
Directors' Report is approved:
-- so far as the Director is aware, there is no relevant audit
information of which the Group and Company's auditors are unaware;
and
-- they have taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Group and Company's
auditors are aware of that information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2020
Re-presented(2) Re-presented(2) Re-presented(2)
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
Results(1) Items(1) Results Results(1) Items(1) Results
2020 2020 2020 2019 2019 2019
Note GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Continuing operations
Revenue 2 32.4 - 32.4 39.6 - 39.6
Other operating income 2 - - - 1.6 - 1.6
Net operating expenses 3 (32.4) (2.3) (34.7) (42.4) (6.6) (49.0)
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Operating profit / (loss) - (2.3) (2.3) (1.2) (6.6) (7.8)
Finance costs 6 (0.3) - (0.3) (0.3) - (0.3)
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Loss before tax (0.3) (2.3) (2.6) (1.5) (6.6) (8.1)
Taxation 7 0.6 0.3 0.9 (0.5) 1.1 0.6
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Profit / (loss) for the
period from
continuing operations 9 0.3 (2.0) (1.7) (2.0) (5.5) (7.5)
Discontinued operations
Profit / (loss) for the
year from
discontinued operations
after tax 8,14 0.1 (12.8) (12.7) 2.4 7.0 9.4
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Profit / (loss) for the
year attributable
to owners of the parent
after tax 0.4 (14.8) (14.4) 0.4 1.5 1.9
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Total comprehensive income
/ (loss)
attributable to owners of
the parent 0.4 (14.8) (14.4) 0.4 1.5 1.9
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Earnings / (loss) per
share attributable
to owners of the parent 9
Basic from continuing
operations 0.2p (1.4p) (1.2p) (1.4p) (3.9p) (5.3p)
Basic from discontinued
operations 0.1p (8.9p) (8.8p) 1.7p 4.9p 6.6p
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Basic from profit / (loss)
for the
year 0.3p (10.3p) (10.0p) 0.3p 1.0p 1.3p
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Fully diluted from
continuing operations 0.2p (1.4p) (1.2p) (1.4p) (3.9p) (5.3p)
Fully diluted from
discontinued
operations 0.1p (8.9p) (8.8p) 1.7p 4.9p 6.6p
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
Fully diluted from profit
/ (loss)
for the year 0.3p (10.3p) (10.0p) 0.3p 1.0p 1.3p
-------------------------- ---- ----------- --------- --------- --------------- --------------- ---------------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
(2) See note 1 (a) for description of the prior year
re-presentation
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2020
Attributable to owners of the Company
Reserve
for shares
Share Own Share to be Deferred Foreign currency Retained Total
capital shares premium issued shares reserve earnings equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------- ---- -------- ------- -------- ----------- -------- ------------------- --------- -------
At 1 January 2019 15.1 (6.9) 1.1 1.8 0.1 - 55.5 66.7
Profit for the year
and total
comprehensive
income - - - - - - 1.9 1.9
Transactions with
owners in their
capacity as owners:
Dividends 25 - - - - - - (7.1) (7.1)
Acquisition of
treasury shares 23 - (0.6) - - - - - (0.6)
Exercise of share
awards 24 - 0.3 - (0.1) - - (0.2) -
Fair value of
employee services 24 - - - 0.1 - - - 0.1
Foreign currency on
translation - - - - - 0.1 - 0.1
------------------- ---- -------- ------- -------- ----------- -------- ------------------- --------- -------
As at 31 December
2019 15.1 (7.2) 1.1 1.8 0.1 0.1 50.1 61.1
------------------- ---- -------- ------- -------- ----------- -------- ------------------- --------- -------
Loss for the year
and total
comprehensive loss - - - - - - (14.4) (14.4)
Transactions with
owners in their
capacity as owners:
Exercise of share
awards 24 - 1.3 - (0.7) - - (0.6) -
Fair value of
employee services 24 - - - 0.5 - - - 0.5
Lapsed share awards 23 - - - (1.0) - - 1.0 -
As at 31 December
2020 15.1 (5.9) 1.1 0.6 0.1 0.1 36.1 47.2
------------------- ---- -------- ------- -------- ----------- -------- ------------------- --------- -------
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2020
Attributable to owners of the Company
Reserve
for shares
Share Own Share to be Deferred Retained Total
capital shares premium issued shares earnings equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
At 1 January 2019 15.1 (6.3) 1.1 1.8 0.1 63.4 75.2
Loss for the year and total
comprehensive loss - - - - - (40.2) (40.2)
Transactions with owners in their
capacity
as owners:
Dividends 25 - - - - - (7.1) (7.1)
Exercise of share awards 24 - - - (0.1) - (0.1) (0.2)
Fair value of employee services 24 - - - 0.1 - - 0.1
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
As at 31 December 2019 15.1 (6.3) 1.1 1.8 0.1 16.0 27.8
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
Profit for the year and total
comprehensive income - - - - - 12.2 12.2
Transactions with owners in their
capacity as owners:
Transfer of treasury shares 23 - 2.2 - - - (1.6) 0.6
Exercise of share awards 24 - - - (0.7) - 0.2 (0.5)
Fair value of employee services 24 - - - 0.5 - - 0.5
Lapsed share awards 23 - - - (1.0) - 1.0 -
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
As at 31 December 2020 15.1 (4.1) 1.1 0.6 0.1 27.8 40.6
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
Registered number 04948078
Restated(2)
31 December 31 December
2020 2019
Note GBPm GBPm
--------------------------------------------------- ---- ----------- ------------
Non-current assets
Goodwill 10 41.2 52.2
Other intangible assets 11 4.9 9.0
Property, plant and equipment 12 3.3 4.3
Deferred tax assets 15 2.4 1.4
Other receivables 16 0.5 0.5
--------------------------------------------------- ---- ----------- ------------
52.3 67.4
--------------------------------------------------- ---- ----------- ------------
Current assets
Trade and other receivables 16 5.8 10.3
Cash and cash equivalents 17 8.3 9.3
Current tax assets 21 0.2 0.1
--------------------------------------------------- ---- ----------- ------------
14.3 19.7
--------------------------------------------------- ---- ----------- ------------
Total assets 66.6 87.1
--------------------------------------------------- ---- ----------- ------------
Current liabilities
Trade and other payables 18 (8.8) (12.5)
Lease liabilities 19 (2.0) (2.1)
Deferred income 20 (7.0) (8.7)
(17.8) (23.3)
--------------------------------------------------- ---- ----------- ------------
Net current liabilities (3.5) (3.6)
--------------------------------------------------- ---- ----------- ------------
Non-current liabilities
Lease liabilities 19 (1.4) (2.2)
Provisions 22 - (0.1)
Deferred tax liabilities 15 (0.2) (0.4)
--------------------------------------------------- ---- ----------- ------------
(1.6) (2.7)
--------------------------------------------------- ---- ----------- ------------
Net assets 47.2 61.1
--------------------------------------------------- ---- ----------- ------------
Capital and reserves attributable to owners of the
Company
Share capital 23 15.1 15.1
Own shares (5.9) (7.2)
Share premium 1.1 1.1
Other reserves 0.7 1.9
Foreign currency reserve 0.1 0.1
Retained earnings 36.1 50.1
--------------------------------------------------- ---- ----------- ------------
Total equity 47.2 61.1
--------------------------------------------------- ---- ----------- ------------
(2) See note 1 (a) for description of prior year restatement
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
Registered number 04948078
Restated(2)
31 December 31 December
2020 2019
Note GBPm GBPm
--------------------------------------------------- ---- ----------- ------------
Non-current assets
Investments 13 65.0 90.1
Deferred tax assets 0.1 0.1
Other receivables 16 0.2 0.3
--------------------------------------------------- ---- ----------- ------------
65.3 90.5
--------------------------------------------------- ---- ----------- ------------
Current assets
Trade and other receivables 16 35.7 0.7
35.7 0.7
--------------------------------------------------- ---- ----------- ------------
Total assets 101.0 91.2
--------------------------------------------------- ---- ----------- ------------
Current liabilities
Trade and other payables 18 (60.4) (63.4)
--------------------------------------------------- ---- ----------- ------------
Net current liabilities (24.7) (62.7)
--------------------------------------------------- ---- ----------- ------------
Net assets 40.6 27.8
--------------------------------------------------- ---- ----------- ------------
Capital and reserves attributable to owners of the
Company
Share capital 23 15.1 15.1
Own shares (4.1) (6.3)
Share premium 1.1 1.1
Other reserves 0.7 1.9
Retained earnings 27.8 16.0
--------------------------------------------------- ---- ----------- ------------
Total equity 40.6 27.8
--------------------------------------------------- ---- ----------- ------------
(2) See note 1 (a) for description of prior year restatement
The Company has taken advantage of the exemption available under
section 408 of the Companies Act 2006 and has not presented its own
statement of comprehensive income in this financial information.
The profit for the year of GBP12.2m (2019: loss of GBP40.2m)
includes an impairment of GBP25.4m (2019: GBP35.7m) (note 13) and
dividends received from the Company's subsidiary Centaur
Communications Limited of GBP40.0m (2019: GBPnil) (note 30). No
dividends were paid in the year (2019: GBP7.1m). The other
movements in retained earnings are shown in the Company's Statement
of Changes in Equity.
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2020
Year ended Year ended
31 December 31 December
2020 2019
Note GBPm GBPm
-------------------------------------------------------- ---- ------------ ------------
Cash flows from operating activities
Cash generated from operations 26 2.1 4.6
Tax refund - 0.1
-------------------------------------------------------- ---- ------------ ------------
Net cash generated from operating activities 2.1 4.7
-------------------------------------------------------- ---- ------------ ------------
Cash flows from investing activities
Cash consideration received on disposal of subsidiaries
less cash and cash equivalents disposed of 14 - 18.7
Directly attributable costs of disposal of subsidiaries 14 (0.1) (2.3)
Proceeds from disposal of intangible assets 11 0.1 -
Purchase of property, plant and equipment 12 (0.2) (0.2)
Purchase of intangible assets 11 (0.6) (1.4)
Acquisition of subsidiary 22 - (0.1)
-------------------------------------------------------- ---- ------------ ------------
Net cash flows (used in) / generated from investing
activities (0.8) 14.7
-------------------------------------------------------- ---- ------------ ------------
Cash flows from financing activities
Payment for shares bought back 23 - (0.6)
Interest paid 6 (0.2) (0.2)
Repayment of obligations under lease arrangements 19 (1.9) (2.3)
Termination of finance lease 19 (0.2) -
Dividends paid to Company's shareholders 25 - (7.1)
Proceeds from borrowings 27 - 2.8
Repayment of borrowings 27 - (2.8)
-------------------------------------------------------- ---- ------------ ------------
Net cash flows used in financing activities (2.3) (10.2)
-------------------------------------------------------- ---- ------------ ------------
Net (decrease) / increase in cash and cash equivalents (1.0) 9.2
-------------------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at beginning of the year 9.3 0.1
-------------------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at end of year 17 8.3 9.3
-------------------------------------------------------- ---- ------------ ------------
COMPANY CASH FLOW STATEMENT
for the year ended 31 December 2020
Year ended Year ended
31 December 31 December
2020 2019
Note GBPm GBPm
--------------------------------------------------- ---- ------------ ------------
Cash flows from operating activities
Cash generated from operating activities 26 0.2 7.3
--------------------------------------------------- ---- ------------ ------------
Cash flows from investing activities
Net cash flows used in investing activities - -
--------------------------------------------------- ---- ------------ ------------
Cash flows from financing activities
Interest paid 6 (0.2) (0.2)
Dividends paid to Company's shareholders 25 - (7.1)
Proceeds from borrowings 27 - 2.8
Repayment of borrowings 27 - (2.8)
--------------------------------------------------- ---- ------------ ------------
Net cash flows used in financing activities (0.2) (7.3)
--------------------------------------------------- ---- ------------ ------------
Net increase in cash and cash equivalents - -
--------------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at beginning of the year - -
--------------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at end of year 17 - -
--------------------------------------------------- ---- ------------ ------------
NOTES TO THE FINANCIAL INFORMATION
1 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of
these consolidated and Company financial information are set out
below. These policies have been consistently applied to all the
periods presented, unless otherwise stated. The financial
information is for the Group consisting of Centaur Media Plc and
its subsidiaries, and the Company, Centaur Media Plc. Centaur Media
Plc is a public company limited by shares and incorporated in
England and Wales.
(a) Basis of preparation
The financial information in this preliminary announcement has
been extracted from the audited Group Financial Statements for the
year ended 31 December 2020 and does not constitute statutory
accounts within the meaning of section 434 of the Companies Act
2006. The Group Financial Statements for 2019 were delivered to the
registrar of companies, and those for 2020 will be delivered in due
course. The auditor's report on the Group Financial Statements for
2019 and 2020 were both unqualified and unmodified. The auditors'
report was signed on 16 March 2021. The Group Financial Statements
and this preliminary announcement were approved by the Board of
Directors on 16 March 2021.
The consolidated and Company financial information has been
prepared in accordance with International Financial Reporting
Standards ('IFRS') as adopted by the European Union and IFRS
Interpretations Committee ('IFRS IC') and with those parts of the
Companies Act 2006 applicable to companies reporting under
IFRS.
The financial information has been prepared on a historical cost
basis except where stated otherwise within the accounting
policies.
Going concern
The financial information has been prepared on a going concern
basis. The Directors have carefully assessed the Group's ability to
continue trading and have a reasonable expectation that the Group
and Company have adequate resources to continue in operational
existence for at least twelve months from the date of approval of
these financial information and for the foreseeable future, being
the period as discussed in the viability statement.
Net cash (see note 1 (b)) at 31 December 2020 amounted to
GBP8.3m (2019: GBP9.3m). In November 2018, the Group renewed its
GBP25m multi-currency revolving credit facility with NatWest and
Lloyds, which was due to run to November 2021. None of this was
drawn down at 31 December 2020. Our cash conversion rate for the
year was 100% (2019: 100%). On 16 March 2021, the Group signed a
new multi-currency revolving credit facility with NatWest that
replaced the GBP25m facility signed with NatWest and Lloyds in
2018. The new revolving credit facility consists of a committed
GBP10m facility and an additional uncommitted GBP15m accordion
option, both of which can be used to cover the Group's working
capital and general corporate needs. The facility runs to March
2024 with the option to extend for two periods of one year each.
The covenants regarding leverage and interest cover are identical
to those of the facility it replaces.
The Group has net current liabilities at 31 December 2020
amounting to GBP3.5m (2019: GBP3.6m). In both the current and prior
year these primarily arose from its normal high levels of deferred
income relating to performance obligations to be delivered in the
future rather than an inability to service its liabilities, as
deferred income will not result in a cash outflow. An assessment of
cash flows for the next three financial years, which has taken into
account the factors described above, has indicated an expected
level of cash generation which would be sufficient to allow the
Group to fully satisfy its working capital requirements and the
guarantee given in respect of its UK subsidiaries, to cover all
principal areas of expenditure, including maintenance, capital
expenditure and taxation during this year, and to meet the
financial covenants under the revolving credit facility. The
Company has net current liabilities at 31 December 2020 amounting
to GBP24.7m (2019: GBP62.7m). In the prior year, these almost
entirely arise from unsecured payables to subsidiaries which have
no fixed date of repayment. In the current year, net current
liabilities are lower due to an increase in receivables from
subsidiaries arising from the declaration of a dividend from the
Company's subsidiary Centaur Communications Limited.
The preparation of financial information in accordance with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial information and the reported amounts of revenues and
expenses during the year. Although these estimates are based on
management's best knowledge of the amount, events or actions, the
actual results may ultimately differ from those estimates.
Having assessed the principal risks and the other matters
discussed in connection with the viability statement which
considers the Group's viability over a three-year period to March
2024, the Directors consider it appropriate to adopt the going
concern basis of accounting in preparing its consolidated financial
information.
New and amended standards adopted by the Group
No new standards or amendments to standards that are mandatory
for the first time for the financial year commencing 1 January 2020
affected any of the amounts recognised in the current year or any
prior year and is not likely to affect future periods.
New standards and interpretations not yet adopted
There are no standards that are not yet effective and that would
be expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future
transactions.
Prior year re-presentation and restatements
i) Discontinued operations
Where the requirements of IFRS 5 have been met, the operational
results of subsidiaries disposed of have been presented in
discontinued operations in the current period and re-presented to
discontinued in the comparative period. See notes 8 and 14 for more
details.
ii) Correction of prior period accounting errors
A restatement has been made to prior year comparatives for the
value of disposals of software which are presented in other
intangible assets on the face of the consolidated statement of
financial position. The restatement is in respect of a GBP0.6m
gross up of the cost and accumulated amortisation of software
assets with a GBPnil net book value that were disposed during 2019.
The restatement has been reflected in note 11. As the restatement
is of the same value in both cost and accumulated amortisation,
there is no impact to the gain or loss on disposal reported within
the consolidated statement of comprehensive income. There is also
no impact to the balance of other intangible assets reported on the
face of the consolidated statement of financial position. This was
identified after the authorisation of the 2019 Annual Report and
therefore the balances are being retrospectively restated. This
restatement has no impact to periods prior to 2019.
iii) Correction of prior period presentation errors
A restatement has been made to the prior year comparatives to
split other receivables between those due within one year and those
due after one year. The restatement decreased other receivables in
current assets by GBP0.5m for the Group and GBP0.3m for the Company
and increased the non-current assets by the same amount as detailed
in note 16. On the face of the statement of financial position,
trade and other receivables has reduced under current assets and
other receivables has been added under non-current assets.
Comparative numbers
Certain prior year comparatives have been updated to reflect
current year disclosures.
(b) Presentation of non-statutory measures
In addition to IFRS statutory measures, the Directors use
various non-GAAP key financial measures to evaluate the Group's
performance and consider that presentation of these measures
provides shareholders with an additional understanding of the core
trading performance of the Group. The measures used are explained
and reconciled to their IFRS statutory headings below.
Adjusted operating profit and adjusted earnings per share
The Directors believe that adjusted results and adjusted
earnings per share, split between continuing and discontinued
operations, provide additional useful information on the core
operational performance of the Group to shareholders, and review
the results of the Group on an adjusted basis internally. The term
'adjusted' is not a defined term under IFRS and may not therefore
be comparable with similarly titled profit measurements reported by
other companies. It is not intended to be a substitute for, or
superior to, IFRS measurements of profit.
Adjustments are made in respect of:
-- Exceptional items - the Group considers items of income and
expense as exceptional and excludes them from the adjusted results
where the nature of the item, or its magnitude, is material and
likely to be non-recurring in nature so as to assist the user of
the financial information to better understand the results of the
core operations of the Group. Details of exceptional items are
shown in note 4.
-- Amortisation of acquired intangible assets - the amortisation
charge for those intangible assets recognised on business
combinations is excluded from the adjusted results of the Group
since they are non-cash charges arising from investment activities.
As such, they are not considered reflective of the core trading
performance of the Group. Details of amortisation of intangible
assets are shown in note 11.
-- Share-based payments - share-based payment expenses or
credits are excluded from the adjusted results of the Group as the
Directors believe that the volatility of these charges can distort
the user's view of the core trading performance of the Group.
Details of share-based payments are shown in note 24.
-- Impairment of goodwill - the Directors believe that non-cash
impairment charges in relation to goodwill are triggered by factors
external to the core trading of the business, and therefore exclude
any such charges from the adjusted results of the Group. Previous
impairment charges were presented as exceptional items. Details of
the goodwill impairment analysis are shown in note 10.
-- Profit or loss on disposal of assets or subsidiaries - profit
or loss on disposals of businesses are excluded from adjusted
results of the Group as they are unrelated to core trading and can
distort a user's understanding of the performance of the Group due
to their infrequent and volatile nature. See note 4.
-- Other separately reported items - certain other items are
excluded from adjusted results where they are considered large or
unusual enough to distort the comparability of core trading results
year on year. Details of these separately disclosed items are shown
in note 4.
The tax related to adjusting items is the tax effect of the
items above that are allowable deductions for tax purposes
(primarily exceptional items), calculated using the standard rate
of corporation tax. See note 7 for a reconciliation between
reported and adjusted tax charges.
Further details of adjusting items are included in note 4. A
reconciliation between adjusted and statutory earnings per share
measures is shown in note 9.
Loss before tax reconciles to adjusted operating profit / (loss)
as follows:
Re-presented(2)
2020 2019
Note GBPm GBPm
-------------------------------------------------- --- ---- ----- ---------------
Loss before tax (2.6) (8.1)
Adjusting items
Exceptional operating costs 4 0.2 4.7
Amortisation of acquired intangible assets 11 1.5 1.7
Share-based payment expense 24 0.5 0.1
Loss on disposal intangible assets 11 0.1 -
Loss on disposal of subsidiary (Venture Business
Research Limited) 14 - 0.1
------------------------------------------------------- ---- ----- ---------------
Adjusted loss before tax (0.3) (1.5)
Finance costs 6 0.3 0.3
------------------------------------------------------- ---- ----- ---------------
Adjusted operating profit / (loss) - (1.2)
------------------------------------------------------- ---- ----- ---------------
(2) See note 1 (a) for description of the prior year
re-presentation
Adjusted operating cash flow
Adjusted operating cash flow is not a measure defined by IFRS.
It is defined as cash flow from operations excluding the impact of
adjusting items, which are defined above, and including capital
expenditure. The Directors use this measure to assess the
performance of the Group as it excludes volatile items not related
to the core trading of the Group and includes the Group's
management of capital expenditure. Statutory cash flow from
operations reconciles to adjusted operating cash as below:
2020 2019
Note GBPm GBPm
--------------------------------------------- ---- ----- -----
Reported cash flow from operating activities 26 2.1 4.6
Adjusting items from operations 1.0 4.8
Working capital impact of adjusting items
from operations 3.4 (2.1)
---------------------------------------------- ---- ----- -----
Adjusted operating cash flow 6.5 7.3
Capital expenditure (0.8) (1.6)
---------------------------------------------- ---- ----- -----
Post capital expenditure cash flow 5.7 5.7
---------------------------------------------- ---- ----- -----
Underlying revenue growth
The Directors review underlying revenue growth in order to allow
a like-for-like comparison of revenues between years. Underlying
revenues therefore exclude the impact of revenue contribution
arising from acquired or disposed businesses and other revenue
streams that are not expected to be ongoing in future years.
Statutory revenue growth reconciles to underlying revenue growth
as follows:
Xeim The Lawyer Total
GBPm GBPm GBPm
------------------------------------------------------ ----- ---------- -----
Reported revenue 2019 31.4 8.2 39.6
Disposed business - Venture Business Research ('VBR') - (0.1) (0.1)
Closed event - Marketing Week Live (1.1) - (1.1)
Underlying revenue 2019 30.3 8.1 38.4
------------------------------------------------------ ----- ---------- -----
Reported revenue 2020 26.0 6.4 32.4
------------------------------------------------------ ----- ---------- -----
Underlying revenue 2020 26.0 6.4 32.4
------------------------------------------------------ ----- ---------- -----
Reported revenue growth (17)% (22)% (18)%
------------------------------------------------------ ----- ---------- -----
Underlying revenue growth (14)% (21)% (16)%
------------------------------------------------------ ----- ---------- -----
Adjusted EBITDA
Adjusted EBITDA is not a measure defined by IFRS. It is defined
as adjusted operating profit before depreciation and impairment of
tangible assets and amortisation and impairment of intangible
assets other than those acquired through a business combination. It
is used by the Directors as a measure to review performance of the
Group and forms the basis of some of the Group's financial
covenants under its revolving credit facility. Adjusted EBITDA is
calculated as follows:
Re-presented(2)
2020 2019
Note GBPm GBPm
---------------------------------------------- --- ---- ----- ---------------
Adjusted operating profit / (loss) (as above) - (1.2)
Depreciation of property, plant and equipment 12 2.0 2.0
Impairment of property, plant and equipment 12 - 0.4
Amortisation of computer software 11 1.8 2.5
Impairment of computer software 11 - 0.3
--------------------------------------------------- ---- ----- ---------------
Adjusted EBITDA 3.8 4.0
--------------------------------------------------- ---- ----- ---------------
(2) See note 1 (a) for description of the prior year
re-presentation
Net cash/(debt)
Net cash/(debt) is not a measure defined by IFRS. Net
cash/(debt) is calculated as cash less overdrafts and bank
borrowings under the Group's financing arrangements. The Directors
consider the measure useful as it gives greater clarity over the
Group's liquidity as a whole. Net cash consists entirely of cash
and cash equivalents as overdrafts and bank borrowings are GBPnil
as at 31 December 2020 (2019: GBPnil). Refer to note 17.
(c) Principles of consolidation
The consolidated financial information incorporates the
financial information of Centaur Media Plc and all of its
subsidiaries after elimination of intercompany transactions and
balances.
(i) Subsidiaries
Subsidiaries are all entities controlled by the Group. The Group
controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group until the
date that the Group ceases to control them. In the statement of
comprehensive income, the results of subsidiaries for which control
has ceased are presented separately as discontinued operations in
the year in which they have been disposed of and in the comparative
year.
On the disposal of a subsidiary, assets and liabilities of that
subsidiary are de-recognised from the consolidated statement of
financial position, earnings up to the date of loss of control are
retained in the Group, and a profit/(loss) on disposal is
recognised, measured as consideration received less the fair value
of assets and liabilities disposed of.
Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated. The accounting
policies of subsidiaries are consistent with the policies adopted
by the Group.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial information of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional
currency'). The consolidated financial information is presented in
Pounds Sterling, which is the Group and Company's functional and
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at year end exchange
rates are recognised in the consolidated statement of comprehensive
income.
(iii) Group companies
The results and financial position of the Group entities that
have a functional currency different from the presentation
currency, as disclosed in note 13, are translated into the
presentation currency as follows:
-- Assets and liabilities for each statement of financial
position presented are translated at the closing rate at the date
of that statement of financial position;
-- Income and expenses for each statement of comprehensive
income are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the rate on the dates of the
transactions); and
-- All resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign operations and of
borrowings are recognised in other comprehensive income. When a
foreign operation is sold, exchange differences that were recorded
in equity are recognised in the statement of comprehensive income
as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
(e) Revenue recognition
Revenue is measured at the transaction price, which is the
amount of consideration to which Centaur expects to be entitled in
exchange for transferring promised goods or services to the
customer. Judgement may arise in timing and allocation of
transaction price when there are multiple performance obligations
in one contract, however, an annual impact assessment is performed
which has confirmed that the impact is immaterial in both the
current year and comparative year. Revenue arises from the sales of
premium content, marketing services, training and advisory, events,
marketing solutions, recruitment advertising, and telemarketing
services in the normal course of business, net of discounts and
value added tax. Goods and services exchanged as part of a barter
transaction are recognised in revenue at the fair value of the
goods and services provided. Returns, refunds and other similar
allowances, which have historically been low in volume and
immaterial in magnitude, are accounted for as a reduction in
revenue as they arise.
Where revenue is deferred it is held as a balance in deferred
income on the consolidated statement of financial position. At any
given balance date, this deferred income is current in nature and
is expected to be recognised wholly in revenue in the following
financial year, with the exception of returns and credit notes,
which have historically been low in volume and immaterial in
magnitude.
Additionally, in the current year, deferred income held in a
subsidiary at the point of its disposal will not have been
recognised in revenue for the Group for the year.
The Group recognises revenue earned from contracts as individual
performance obligations are met, on a stand-alone selling price
basis. This is when value and control of the product or service has
transferred, being when the product is delivered to the customer or
the period in which the services are rendered as set out in more
detail below.
Premium Content
Revenue from subscriptions is deferred and recognised on a
straight-line basis over the subscription period, reflecting the
continuous provision of paid content services over this time.
Revenue from individual publication sales is recognised at the
point at which the publication is delivered to the customer. In
general, the Group bills customers for premium content at the start
of the contract.
Marketing Services
Revenue from campaign work and consultancy contracts is
recognised when the Group has obtained the right to consideration
in exchange for its performance, which is when a separately
identifiable phase (milestone) of a contract has been completed and
the value and benefit of the services rendered have been
transferred to the customer. In general, the Group bills customers
for marketing services up front on a milestone basis.
Training and Advisory
Revenue from training and advisory is deferred and recognised
over the period of the training or when a separately identifiable
milestone of a contract has been delivered to the customer. In
general, the Group bills customers for training and advisory up
front or on a milestone basis as the service is delivered.
Events
Consideration received in advance for events is deferred and
revenue is recognised at the point in time at which the event takes
place. In general, the Group bills customers for events before the
event date.
Marketing Solutions
Marketing solutions revenue from display and bespoke campaigns
is recognised over the period that the service is provided. In
general, the Group bills customers for marketing solutions on
delivery.
Recruitment Advertising
Sales of online recruitment advertising space are recognised in
revenue over the period during which the advertisements are placed.
Sales of recruitment advertising space in publications are
recognised at the point at which the publication occurs. In
general, the Group bills customers for recruitment advertising on
delivery.
Telemarketing Services
Revenue from telemarketing services is deferred and recognised
over the period that the service is delivered, generally according
to the number of hours expended as a proportion of the total hours
contracted. In general, the Group bills customers for telemarketing
services in advance. All revenue from telemarketing services ceased
during the year following the closure of the MarketMakers'
telemarketing business in August 2020 and is therefore presented
within discontinued operations.
(f) Other operating income
Other operating income includes income from all other operating
activities which are not related to the principal activities of the
Group.
Included in other operating income is rental income and
transitional services agreement income.
Rental income is for the sub-lease of properties under lease,
which is recognised on a straight-line basis over the lease term
using the exemption available for short-term leases under IFRS 16,
see note 1(j). All arrangements in which the Group sub-leased
properties under lease ceased during the prior year.
Transitional services agreement income relates to services
provided to the buyers of the Group companies disposed of during
2019, which is recognised at the point in time at which the service
is delivered. The costs associated with this income are included
within net operating expenses on the consolidated statement of
comprehensive income. All transitional services agreements ceased
during the prior year.
(g) Government grants
Grants from the government are recognised at their fair value
where there is a reasonable assurance that the grant will be
received, and the Group will comply with all attached conditions.
Government grants are recognised in the profit or loss and deducted
from the related expense within net operating expenses in the
consolidated statement of comprehensive income. Note 3 provides
further information on how the Group accounts for government
grants.
(h) Investments
In the Company's financial information, investments in
subsidiaries are stated at cost less provision for impairment in
value.
Investments are reviewed for impairment whenever events indicate
that the carrying value may not be recoverable. An impairment loss
is recognised to the extent that the carrying value exceeds the
higher of the investments fair value less cost of disposal and its
value-in-use. An asset's value-in-use is calculated by discounting
an estimate of future cash flows by the pre-tax weighted average
cost of capital. Any impairment is recognised in the statement of
comprehensive income. If there has been a change in the estimates
used to determine the investment's recoverable amount, impairment
losses that have been recognised in prior periods may be reversed.
This reversal is recognised in the statement of comprehensive
income.
(i) Income tax
The tax expense represents the sum of current and deferred
tax.
Current tax is based on the taxable profit for the year. Taxable
profit differs from profit as reported in the consolidated
statement of comprehensive income because it excludes items of
income or expense that are taxable or deductible in other years,
and it further includes items that are never taxable or deductible.
The Group and Company's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by
the balance date.
Deferred tax is provided in full, using the liability method, on
temporary differences between the carrying amounts of assets and
liabilities in the consolidated financial information and the
corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
to utilise those temporary differences and losses. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the enacted or substantively
enacted tax rates that are expected to apply in the year when the
liability is settled, or the asset is realised. Deferred tax is
charged or credited to the consolidated statement of comprehensive
income, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is recognised in
other comprehensive income.
(j) Leases
Lessee accounting
Under IFRS 16, leases are accounted for on a 'right-of-use
model' reflecting that, at the commencement date, the Group as a
lessee has a financial obligation to make lease payments to the
lessor for its right to use the underlying asset during the lease
term. The financial obligation is recognised as a lease liability,
and the right to use the underlying asset is recognised as a
right-of-use ('ROU') asset. The ROU assets are recognised within
property, plant and equipment on the face of the consolidated
statement of financial position and are presented separately in
note 12.
The lease liability is initially measured at the present value
of the lease payments using the rate implicit in the lease or,
where that cannot be readily determined, the incremental borrowing
rate. Subsequently, the lease liability is measured at amortised
cost, with interest increasing the carrying amount and lease
payments reducing the carrying amount. The carrying amount is
remeasured to reflect any reassessment or lease modifications, or
to reflect revised in-substance fixed lease payments.
The ROU asset is initially measured at cost which comprises:
-- the amount of the initial measurement of the lease liability;
-- any lease payments made at or before the commencement date,
less any lease incentives received;
-- any initial direct costs; and
-- an estimate of costs to be incurred at the end of the lease term.
Subsequently, the ROU asset is measured at cost less accumulated
depreciation and impairment losses. Depreciation is calculated to
write off the cost on a straight line-basis over the lease
term.
Using the exemption available under IFRS 16, the Group elects
not to apply the requirements above to:
-- Short-term leases; and
-- Leases for which the underlying asset is of a low value.
In these cases, the Group recognises the lease payments as an
expense on a straight-line basis over the lease term, or another
systematic basis if that basis is more representative of the
agreement.
Lessor accounting
The Group had contracts for the sub-lease of areas of its Wells
Street property lease. These arrangements were exempt from the
requirements of IFRS 16 under the short-term lease exemption as
they all had a lease term of under twelve months from the date of
transition. As such, the income derived from these sub-leasing
arrangements is recognised on a straight-line basis and is
presented in the consolidated statement of comprehensive income in
'other operating income'. All arrangements in which the Group acted
as a lessor ceased during the prior year.
(k) Impairment of assets
Assets that are subject to depreciation or amortisation are
reviewed for impairment whenever events indicate that the carrying
value may not be recoverable. An impairment loss is recognised to
the extent that the carrying value exceeds the higher of the
asset's fair value less cost of disposal and its value-in-use. An
asset's value in use is calculated by discounting an estimate of
future cash flows by the pre-tax weighted average cost of
capital.
(l) Inventories
Inventories are stated at the lower of cost and net realisable
value. Work in progress comprises costs incurred relating to
publications and exhibitions prior to the publication date or the
date of the event. Cost is measured as all costs of purchase and
other costs incurred in bringing the inventories to their present
location and condition.
(m) Property, plant and equipment
See note 1(j) for right-of-use assets. All other property, plant
and equipment is stated at historical cost less accumulated
depreciation and impairment losses. The historical cost of
property, plant and equipment is the purchase cost together with
any incidental direct costs of acquisition. Depreciation is
calculated to write off the cost, less estimated residual value, of
assets, on a straight line-basis over the expected useful economic
lives to the Group over the following periods:
Leasehold improvements - 10 years or the expected length of the lease
if shorter
Fixtures and fittings - 5 to 10 years
Computer equipment - 3 to 5 years
Right-of-use assets - over the lease term
The estimated useful lives, residual values and depreciation
methods are reviewed at the end of each reporting year, with the
effect of any changes in estimate accounted for on a prospective
basis.
(n) Intangible assets
(i) Goodwill
Where the cost of a business acquisition exceeds the fair values
attributable to the separable net assets acquired, the resulting
goodwill is capitalised and allocated to the cash-generating unit
('CGU') or groups of CGUs that are expected to benefit from the
synergies of the business combination. Goodwill has an indefinite
useful life and is tested for impairment annually on a Group level
or whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
Each segment is deemed to be a CGU. Goodwill and acquired
intangible assets are assessed for impairment in accordance with
IAS 36. In assessing whether a write-down of goodwill and acquired
intangible assets is required, the carrying value of the segment is
compared with its recoverable amount. Recoverable amount is
measured as the higher of fair value less cost of disposal and
value-in-use. Any impairment is recognised in the consolidated
statement of comprehensive income (in net operating expenses) and
is classified as an adjusting item. Impairment of goodwill is not
subsequently reversed.
On the disposal of a CGU, the attributable amount of goodwill is
included in the determination of the profit or loss on
disposal.
(ii) Brands and publishing rights, customer relationships and
non-compete arrangements
Separately acquired brands and publishing rights are shown at
historical cost. Brands and publishing rights, customer
relationships and non-compete arrangements acquired in a business
combination are recognised at fair value at the acquisition date.
They have a finite useful life and are subsequently carried at cost
less accumulated amortisation and impairment losses.
(iii) Software
Computer software that is not integral to the operation of the
related hardware is carried at cost less accumulated amortisation.
Costs associated with the development of identifiable and unique
software products controlled by the Group that will generate
probable future economic benefits in excess of costs are recognised
as intangible assets when the criteria of IAS 38 'Intangible
Assets' are met. They are carried at cost less accumulated
amortisation and impairment losses.
(iv) Amortisation methods and periods
Amortisation is calculated to write off the cost or fair value
of intangible assets on a straight-line basis over the expected
useful economic lives to the Group over the following periods:
Computer software - 3 to 5 years
Brands and publishing rights - 5 to 20 years
Customer relationships - 3 to 10 years or over the term of any specified
contract
Separately acquired websites - 3 to 5 years
and content
(o) Employee benefits
(i) Post-employment obligations
The Group and Company contribute to a defined contribution
pension scheme for the benefit of employees. The assets of the
scheme are held separately from those of the Group in an
independently administered fund. Contributions to defined
contribution schemes are charged to the statement of comprehensive
income in net operating expenses when employer contributions become
payable.
(ii) Share-based payments
The Group operates a number of equity-settled share-based
compensation plans for its employees. The fair value of the
share-based compensation expense is estimated using either a Monte
Carlo or Black-Scholes option pricing model and is recognised in
the consolidated statement of comprehensive income over the vesting
period with a corresponding increase in equity. The total amount to
be expensed is determined by reference to the fair value of the
awards granted:
-- Including any market performance conditions;
-- Excluding the impact of any service and non-market
performance vesting conditions (for example, profitability, sales
growth targets, cash flow performance and remaining an employee of
the entity over a specified time period); and
-- Including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
The total expense is recognised over the vesting period, which
is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each reporting year, the Group
revises its estimates of the number of options that are expected to
vest based on the non-market vesting and service conditions. It
recognises the impact of the revision to original estimates, if
any, in the consolidated statement of comprehensive income, with a
corresponding adjustment to equity. The Company issues new shares
or transfers shares from treasury shares to settle share-based
compensation awards.
The award by the Company of share-based compensation awards over
its equity instruments to the employees of subsidiary undertakings
in the Group is treated as a capital contribution, only if it is
left unsettled. The fair value of employee services received,
measured by reference to the grant date fair value, is recognised
over the vesting period as an increase to investment in subsidiary
undertakings, with a corresponding credit to equity.
A deferred tax asset is recognised on share options based on the
intrinsic value of the options, which is calculated as the
difference between the fair value of the shares under option at the
reporting date and exercise price of the share options. The
deferred tax asset is utilised when the share options are exercised
or released when share options lapse.
(p) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources will be required to settle
the obligation and the obligation can be reliably estimated.
(q) Equity
(i) Share capital and share premium
Ordinary and deferred shares are classified as equity. The
excess of consideration received in respect of shares issued over
the nominal value of those shares is recognised in the share
premium account. Incremental costs directly attributable to the
issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
Where any Group company purchases the Company's equity
instruments, for example as the result of a share buyback or
share-based payment plan, the consideration paid, including any
directly attributable incremental costs (net of income taxes) is
deducted from equity attributable to the owners of the Company as
treasury shares until the shares are cancelled or reissued. Where
such ordinary shares are subsequently reissued, any consideration
received, net of any directly attributable incremental transaction
costs and the related income tax effects, is included in equity
attributable to the owners of the Company.
Shares held by the Centaur Employees' Benefit Trust are
disclosed as treasury shares and deducted from contributed
equity.
(ii) Own shares
Own shares consist of treasury shares and shares held within an
employee benefit trust. The Company has an employee benefit trust
for the granting of shares to applicable employees.
Own shares are recognised at cost as a deduction from equity
shareholders' funds. Subsequent consideration received for the sale
of such shares is also recognised in equity, with any difference
between the sale proceeds and the original cost being taken to
retained earnings. No gain or loss is recognised in the financial
information on transactions in treasury shares.
(r) Dividends
Dividends are recognised in the year in which they are paid or,
in respect of the Company's final dividend for the year, approved
by the shareholders in the Annual General Meeting.
(s) Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The Executive Committee has been identified as the chief operating
decision-maker, reviewing the Group's internal reporting on a
monthly basis in order to assess performance and allocate
resources. Refer to note 2 for the basis of segmentation.
(t) Financial instruments
The Group has applied IFRS 9 'Financial Instruments' as outlined
below:
(i) Financial assets
The Group classifies and measures its financial assets in line
with one of the three measurement models under IFRS 9: at amortised
cost, fair value through profit or loss, and fair value through
other comprehensive income. Management determines the
classification of its financial assets based on the requirements of
IFRS 9 at initial recognition.
They are included in current assets, except for maturities
greater than 12 months after the balance date. These are classified
as non-current assets. The Group's financial assets comprise trade
and other receivables and cash and cash equivalents in the
consolidated statement of financial position. Please see the
following sections.
(ii) Trade receivables
Trade receivables are accounted for under IFRS 9, being
recognised initially at fair value and subsequently at amortised
cost less any allowance for expected lifetime credit losses under
the 'expected credit loss' model. As mandated by IFRS 9, the
expected lifetime credit losses are calculated using the
'simplified' approach.
A provision matrix is used to calculate the allowance for
expected lifetime credit losses on trade receivables which is based
on historical default rates over the expected life of the trade
receivables and is adjusted for forward-looking estimates. The
allowance for expected lifetime credit losses is established by
considering, on a discounted basis, the cash shortfalls it would
incur in various default scenarios for prescribed future periods
and multiplying those shortfalls by the probability of each
scenario occurring. The historical loss rates are adjusted to
reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle the
receivables. The allowance is the sum of these probability weighted
outcomes. The allowance and any changes to it are recognised in the
consolidated statement of comprehensive income within net operating
expenses. When a trade receivable is uncollectible, it is written
off against the allowance account for trade receivables. Subsequent
recoveries of amounts previously written off are credited against
net operating expenses in the consolidated statement of
comprehensive income. The Group defines a default as failure of a
debtor to repay an amount due as this is the time at which our
estimate of future cash flows from the debtor is affected.
(iii) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits
repayable on demand or maturing within three months from the date
of acquisition.
(iv) Financial liabilities
Debt and trade payables are recognised initially at fair value
based on amounts exchanged, net of transaction costs, and
subsequently at amortised cost.
Interest expense on debt is accounted for using the effective
interest method and is recognised in income.
(v) Trade payables
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
(vi) Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred and carried subsequently at amortised
cost. Costs of borrowings, including commitment fees on undrawn
facilities, are recognised in the consolidated statement of
comprehensive income as incurred or, where appropriate, across the
term of the related borrowing.
(vii) Receivables from and payables to subsidiaries
The Company has amounts receivable from and payable to
subsidiaries which are recognised at fair value. Amounts receivable
from subsidiaries are assessed annually for recoverability under
the requirements of IFRS 9.
(u) Key accounting assumptions, estimates and judgements
The preparation of financial information under IFRS requires the
use of certain key accounting assumptions and requires management
to exercise its judgement and to make estimates. The areas where
assumptions and estimates are significant to the consolidated
financial information are as follows:
(i) Carrying value of goodwill, other intangible assets and
Company investment estimate
In assessing whether goodwill, other intangible fixed assets and
the Company's investment are impaired, the Group uses a discounted
cash flow model which includes forecast cash flows and estimates of
future growth. If the results of operations in future periods are
lower than included in the cash flow model, impairments may be
triggered. A sensitivity analysis has been performed on the
value-in-use calculations. Further details of the assumptions and
sensitivities in the discounted cash flow model are included in
notes 10 and 13.
Intangible assets arising on business combinations are
identified based on the Group's understanding of the acquired
business and previous experience of similar businesses. Consistent
methods of valuation for similar types of intangible asset are
applied where possible and appropriate, using information reviewed
at Board level where available. Discount rates applied in
calculating the values of intangible assets arising on the
acquisition of subsidiaries are calculated specifically for each
acquisition and adjusted to reflect the respective risk profile of
each individual asset based on the Group's past experience of
similar assets.
(ii) Recoverability of trade receivables estimate
The allowance for expected lifetime credit losses for trade
receivables is calculated in line with IFRS 9. This is established
by considering on a discounted basis the cash shortfalls it would
incur in various default scenarios for prescribed future periods
and multiplying the shortfalls by the probability of each scenario
occurring. The historical loss rates are adjusted to reflect
current and forward-looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables.
Further details about trade receivables are included in note 16 and
information about the credit risk and expected lifetime credit
losses are shown in note 27.
(iii) Share-based payments estimate
The fair value of the share-based compensation expense
recognised in the consolidated statement of comprehensive income
requires the use of estimates. Details regarding the determination
of fair value of these costs are set out in note 1(o)(ii).
(iv) Valuation of intangibles estimate
Intangibles assets acquired in a business combination are
required to be recognised separately from goodwill and amortised
over their useful life. The Group has separately recognised
computer software, brands and customer relationships in the
acquisitions made (see note 11).
The fair value of these acquired intangibles is based on
valuation techniques that require inputs based on assumptions about
the future and estimates related to current market conditions.
The Group also makes assumptions about the useful life of the
acquired intangibles as outlined in note 1(n)(iv).
(v) Deferred tax judgement and estimate
The calculation of deferred tax assets and liabilities requires
judgement. Where the ultimate tax treatment is uncertain, the Group
recognises deferred tax assets and liabilities based on an estimate
of future taxable income and recoverability. Where a change in
circumstances occurs, or the final tax outcome is different from
the amounts that were initially recorded, such differences will
impact the income tax and deferred tax balances in the year in
which that change, or outcome, is known. The accounting policy
regarding deferred tax is set out above in note 1(i).
(vi) Adjusting items judgement
The term 'adjusted' is not a defined term under IFRS. Judgement
is required to ensure that the classification and presentation of
certain items as adjusting, including exceptional items, is
appropriate and consistent with the Group's accounting policy.
Further details about the amounts classified as adjusting are
included in notes 1(b) and 4.
(vii) IFRS 16 reassessment of lease term judgement
Leases are required to be recognised at the present value of the
lease payments not yet paid for the duration of the lease term. The
lease term is defined by IFRS 16 as the non-cancellable period of
the lease, and any period covered by an option to extend or
terminate that the lessee is reasonably certain to exercise. The
assessment of the lease term requires judgement when considering
the option to extend or terminate in a contract.
During the year, one of the Group's property leases has been
remeasured upon reassessment of the lease term, where a judgement
has been taken that an option to extend will be exercised. The
remeasurement of the lease, and the corresponding adjustment to the
ROU asset are presented in notes 19 and 12 respectively.
2 Segmental reporting
The Group is organised around two reportable market-facing
segments: Xeim and The Lawyer. These two segments derive revenues
from a combination of premium content, marketing services, training
and advisory, events, marketing solutions and recruitment
advertising. Overhead costs are allocated to these segments on an
appropriate basis, depending on the nature of the costs, including
in proportion to revenues or headcount. Corporate income and costs
have been presented separately as 'Central'. The Group believes
this is the most appropriate presentation of segmental reporting
for the user to understand the core operations of the Group. There
is no inter-segmental revenue.
Segment assets consist primarily of property, plant and
equipment, intangible assets including goodwill and trade
receivables. Segment liabilities comprise trade payables, accruals
and deferred income.
Corporate assets and liabilities primarily comprise property,
plant and equipment, intangible assets, current and deferred tax
balances, cash and cash equivalents, borrowings and lease
liabilities.
Capital expenditure comprises additions to property, plant and
equipment, intangible assets and includes additions resulting from
acquisitions through business combinations.
Core operations Continuing Discontinued
Xeim The Lawyer GBPm Central operations operations Group
2020 Note GBPm GBPm GBPm GBPm GBPm GBPm
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Revenue 26.0 6.4 32.4 - 32.4 3.6 36.0
Other operating - - - - - - -
income
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Adjusted operating
profit / (loss) 1 (b) 1.9 1.4 3.3 (3.3) - - -
Exceptional
operating costs 4 (0.2) (0.1) (0.3) 0.1 (0.2) (0.9) (1.1)
Amortisation of
acquired
intangibles 11 (1.5) - (1.5) - (1.5) (0.4) (1.9)
Share-based
payments 24 (0.3) - (0.3) (0.2) (0.5) - (0.5)
Loss on disposal
of assets and
liabilities 11 - - - (0.1) (0.1) (0.7) (0.8)
Impermanent of
goodwill 10 - - - - - (11.0) (11.0)
Operating (loss) /
profit (0.1) 1.3 1.2 (3.5) (2.3) (13.0) (15.3)
Finance costs 6 (0.3) - (0.3)
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Loss before tax (2.6) (13.0) (15.6)
Taxation 7 0.9 0.3 1.2
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Loss for the year (1.7) (12.7) (14.4)
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Segment assets 40.6 17.7 58.3 - 58.3 - 58.3
Corporate assets 8.3 8.3 - 8.3
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Consolidated total
assets 66.6 - 66.6
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Segment
liabilities (13.8) (3.1) (16.9) - (16.9) (0.3) (17.2)
Corporate
liabilities (2.2) (2.2) - (2.2)
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Consolidated total
liabilities (19.1) (0.3) (19.4)
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Other items
Capital
expenditure
(tangible and
intangible
assets) 0.2 - 0.2 0.5 0.7 0.1 0.8
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Re-presented(2) Xeim The Lawyer Core operations Central Continuing operations Discontinued operations Group
2019 Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Revenue 31.4 8.2 39.6 - 39.6 16.3 55.9
Other operating
income - - - 1.6 1.6 - 1.6
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Adjusted
operating
profit / (loss) 1 (b) 4.0 2.3 6.3 (7.5) (1.2) 3.0 1.8
Exceptional
operating costs 4 (0.5) (1.0) (1.5) (3.2) (4.7) (0.1) (4.8)
Amortisation of
acquired
intangibles 11 (1.7) - (1.7) - (1.7) (0.8) (2.5)
Share-based
payments 24 - - - (0.1) (0.1) - (0.1)
Loss on disposal
of subsidiary 14 - (0.1) (0.1) - (0.1) - (0.1)
Profit on
disposal of
subsidiaries 14 - - - - - 7.8 7.8
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Operating profit
/ (loss) 1.8 1.2 3.0 (10.8) (7.8) 9.9 2.1
Finance costs 6 (0.3) - (0.3)
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
(Loss) / profit
before tax (8.1) 9.9 1.8
Taxation 7 0.6 (0.5) 0.1
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
(Loss) / profit
for the year (7.5) 9.4 1.9
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Segment assets 55.5 18.7 74.2 - 74.2 2.3 76.5
Corporate assets 10.6 10.6 - 10.6
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Consolidated
total assets 84.8 2.3 87.1
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Segment
liabilities (14.8) (3.8) (18.6) - (18.6) (2.6) (21.2)
Corporate
liabilities (4.8) (4.8) - (4.8)
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Consolidated
total
liabilities (23.4) (2.6) (26.0)
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Other items
Capital
expenditure
(tangible and
intangible
assets) 0.7 0.1 0.8 0.6 1.4 0.1 1.5
---------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
(2) See note 1 (a) for description of the prior year
re-presentation
Supplemental Information
Revenue by Geographical Location
The Group's revenues from continuing operations from external
customers by geographical location are detailed below:
Re-presented(2) Re-presented(2)
Xeim The Lawyer Total Xeim The Lawyer Total
2020 2020 2020 2019 2019 2019
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ----- ---------- ----- --------------- ------------ ---------------
United Kingdom 17.2 5.2 22.4 23.4 6.6 30.0
Europe (excluding United Kingdom) 2.5 0.6 3.1 2.6 0.9 3.5
North America 4.1 0.4 4.5 4.4 0.4 4.8
Rest of world 2.2 0.2 2.4 1.0 0.3 1.3
---------------------------------- ----- ---------- ----- --------------- ------------ ---------------
26.0 6.4 32.4 31.4 8.2 39.6
---------------------------------- ----- ---------- ----- --------------- ------------ ---------------
(2) See note 1 (a) for description of the prior year
re-presentation
Substantially all of the Group's net assets are located in the
United Kingdom. The Directors therefore consider that the Group
currently operates in a single geographical segment, being the
United Kingdom. Refer to note 13 for the location of the Group's
subsidiaries.
Revenue by type
The Group's revenue from continuing operations by type is as
follows:
Re-presented(2) Re-presented(2)
Xeim The Lawyer Total Xeim The Lawyer Total
2020 2020 2020 2019 2019 2019
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------ ----- ---------- ----- --------------- ------------ ---------------
Premium Content 9.5 3.7 13.2 10.9 3.5 14.4
Marketing Services 2.9 - 2.9 4.3 - 4.3
Training and Advisory 8.5 - 8.5 7.6 - 7.6
Events 1.6 0.9 2.5 4.3 2.1 6.4
Marketing Solutions 3.3 0.9 4.2 3.5 1.1 4.6
Recruitment Advertising 0.2 0.9 1.1 0.8 1.5 2.3
26.0 6.4 32.4 31.4 8.2 39.6
------------------------ ----- ---------- ----- --------------- ------------ ---------------
(2) See note 1 (a) for description of the prior year
re-presentation
The accounting policies for each of these revenue streams is
disclosed in note 1 (e), including the timing of revenue
recognition. There are some contracts for which revenue has not yet
been recognised and is being held in deferred income, see note 20.
This deferred income is all current and is expected to be
recognised as revenue in 2021.
Other operating income
The Group's other operating income from continuing operations by
type is as follows:
2020 2019
GBPm GBPm
---------------------------------------- ----- -----
Sale of goods and services
Rental income - 0.8
Transitional services agreement income - 0.8
- 1.6
---------------------------------------- ----- -----
Rental income in the prior year related to the sublease of part
of the Group's rented property in London. This property was vacated
in December 2019.
Transitional services agreement income in the prior year related
to services provided to the buyers of the Group companies disposed
of in 2019. All transitional services agreements ceased in
2019.
3 Net operating expenses
Continuing operating profit / (loss) is stated after
charging:
Re-presented(2) Re-presented(2) Re-presented(2)
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
Results(1) Items(1) Results Results(1) Items(1) Results
2020 2020 2020 2019 2019 2019
Note GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- -------- ----------- --------- --------- --------------- --------------- ---------------
Employee benefits
expense 5 17.2 0.2 17.4 20.7 3.4 24.1
Government grants (0.3) - (0.3) - - -
---------------------- -------- ----------- --------- --------- --------------- --------------- ---------------
Net employee benefits
expense 16.9 0.2 17.1 20.7 3.4 24.1
Depreciation of
property,
plant and equipment 12 2.0 - 2.0 2.0 - 2.0
Impairment of
property,
plant and equipment 12 - - - 0.4 - 0.4
Loss on disposal of
assets and
liabilities 11,12,19 - 0.1 0.1 - - -
Amortisation of
intangible
assets 11 1.8 1.5 3.3 2.5 1.7 4.2
Impairment of
intangible
assets 11 - - - 0.3 - 0.3
Loss on disposal of
subsidiary (3) 4 - - - - 0.1 0.1
Other exceptional
operating costs 4 - - - - 1.3 1.3
Impairment of trade
receivables 27 0.3 - 0.3 - - -
Share-based payment
expense 24 - 0.5 0.5 - 0.1 0.1
IT expenditure 2.5 - 2.5 2.9 - 2.9
Other staff related
costs 0.7 - 0.7 2.3 - 2.3
Marketing expenditure 0.7 - 0.7 1.6 - 1.6
Other operating
expenses 7.5 - 7.5 9.7 - 9.7
---------------------- -------- ----------- --------- --------- --------------- --------------- ---------------
32.4 2.3 34.7 42.4 6.6 49.0
---------------------- -------- ----------- --------- --------- --------------- --------------- ---------------
Cost of sales 10.7 - 10.7 17.1 - 17.1
Distribution costs 0.1 - 0.1 0.1 - 0.1
Administrative
expenses 21.6 2.3 23.9 25.2 6.6 31.8
---------------------- -------- ----------- --------- --------- --------------- --------------- ---------------
32.4 2.3 34.7 42.4 6.6 49.0
---------------------- -------- ----------- --------- --------- --------------- --------------- ---------------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
(2) See note 1 (a) for description of the prior year
re-presentation
(3) Loss on disposal of subsidiary (Venture Business Research
Limited)
Government grants
The Group applied for government grants of GBP0.8m relating to
the current year for furloughed employees based at both the London
and Portsmouth offices (2019: GBPnil). This was received in full
during the year. Government grants have been deducted from the
related employee benefit expenses and presented within net
operating expenses in the consolidated statement of comprehensive
income.
The government grants in continuing operations is GBP0.3m (2019:
GBPnil) and in discontinued operations is GBP0.5m (2019:
GBPnil).
Property costs
Property costs have been grouped in other costs as they are no
longer significant following the transition to IFRS16.
Services provided by the Company's auditors
2020 2019
GBP'000 GBP'000
---------------------------------------------------------------- -------- --------
Fees payable to the Company's auditors for the audit of the
Company and consolidated financial information 105 -
Fees payable to the Company's predecessor auditors for the
audit of the Company and consolidated financial information 31 238
Fees payable to the Company's predecessor auditors and its
associates for other services:
The audit of the Company's subsidiaries pursuant to legislation - 44
---------------------------------------------------------------- -------- --------
Total audit fees 136 282
---------------------------------------------------------------- -------- --------
Audit related assurance services provided by the predecessor
auditors 50 22
Total non-audit fees 50 22
---------------------------------------------------------------- -------- --------
Total fees 186 304
---------------------------------------------------------------- -------- --------
Fees payable to the Company's predecessor auditors for the audit
of the Company and consolidated financial information include
non-recurring fees of GBP31,000 (2019: GBP72,000).
Prior year fees payable to the Company's predecessor auditors
for the audit of the Company's subsidiaries relates to Market
Makers Incorporated Limited and includes GBP14,000 included in
discontinued operations.
4 Adjusting items
As discussed in note 1(b), certain items are presented as
adjusting. These are detailed below:
Re-presented(2)
2020 2019
Note GBPm GBPm
---------------------------------------------------------- -------- ----- ---------------
Continuing operations
Exceptional operating costs
Staff related restructuring costs (including external
employment advice costs) 5 0.2 2.5
Divestment programme related costs - 2.2
---------------------------------------------------------- -------- ----- ---------------
Exceptional operating costs 0.2 4.7
Amortisation of acquired intangible assets 11 1.5 1.7
Share-based payment expense 24 0.5 0.1
Loss on disposal of assets and liabilities 11,12,19 0.1 -
Loss on disposal of subsidiary 8,14 - 0.1
Adjusting items to profit before tax 2.3 6.6
Tax relating to adjusting items 7 (0.3) (1.1)
---------------------------------------------------------- -------- ----- ---------------
Total adjusting items after tax for continuing operations 2.0 5.5
---------------------------------------------------------- -------- ----- ---------------
Discontinued operations
Profit on disposal of subsidiaries 8,14 - (7.8)
Exceptional costs 8, 22 0.9 0.1
Impairment of goodwill 10 11.0 -
Amortisation of acquired intangible assets 11 0.4 0.8
Loss on disposal of assets and liabilities 11,12,19 0.7 -
Tax relating to adjusting items 7 (0.2) (0.1)
---------------------------------------------------------- -------- ----- ---------------
Total adjusting items after tax for discontinued
operations 12.8 (7.0)
---------------------------------------------------------- -------- ----- ---------------
Total adjusting items after tax 14.8 (1.5)
---------------------------------------------------------- -------- ----- ---------------
(2) See note 1 (a) for description of the prior year
re-presentation
Exceptional costs
Staff related restructuring costs (including external employment
advice costs)
In the current year staff related restructuring costs of GBP0.8m
in discontinued operations related to restructuring of the
MarketMakers business and GBP0.2m in continuing operations related
to restructuring parts of the wider Centaur Group due to the
adverse impact of Covid. Refer to note 22 for further details.
In the prior year staff related restructuring costs of GBP2.4m
in continuing operations and GBP0.1m in discontinued operations
related to the Group's cost reduction plan following the completion
of the divestment programme in 2019. There was also GBP0.1m of
costs related to external employment advice in continuing
operations.
Divestment programme related costs
In the prior year, divestment programme related costs included
professional fees incurred related to the sales process for The
Lawyer of GBP1.2m and management incentives of GBP1.0m related to
that programme. These management incentives sit in 'Employee
benefits expense' in note 3 along with staff related restructuring
costs (excluding external employment advice costs).
Other exceptional costs
In the current year, GBP0.1m in discontinued operations related
to the exit of the Portsmouth lease upon cessation of MarketMakers'
telemarketing business. Refer to further details in note 22.
Other adjusting items
Other adjusting items relate to the amortisation of acquired
intangible assets (see note 11) and share-based payment costs (see
note 24) as well as the items discussed below:
Goodwill impairment
An impairment of GBP11.0m against goodwill relating to the
MarketMakers business was recognised in the current year. There
were no impairments recognised in the prior year. See note 10 for
further details.
Loss on disposal of assets and liabilities
In the current year the loss on disposal of assets and
liabilities in continuing operations of GBP0.1m consists of a loss
on disposal of software assets of GBP0.1m (see note 11), a loss on
disposal of computer equipment of GBP0.1m (see note 12), a loss on
disposal of the MarketMakers ROU asset of GBP0.1m (see note 12)
which represented the proportion of the asset attributable to the
continuing Really B2B business, offset by a GBP0.2m gain on
disposal of the corresponding lease liability (see note 19).
The loss on disposal of assets and liabilities in discontinued
operations of GBP0.7m consists of the disposal of intangible assets
totalling a net book value of GBP0.8m (see note 11), with proceeds
of disposal of GBP0.1m creating a loss on disposal of GBP0.7m (see
note 11). Additionally, there is a loss on disposal of computer
equipment of GBP0.1m and the MarketMakers ROU asset of GBP0.5m (see
note 12) which represented the proportion of the asset attributable
to the discontinued telemarketing business. This is offset by a
GBP0.6m gain on disposal of the corresponding lease liability (see
note 19).
Loss on disposal of subsidiaries
In the prior year the loss on disposal of a subsidiary in
continuing operations of GBP0.1m related to the disposal of Venture
Business Research Limited ('VBR'). This is not presented in
discontinued operations as it does not represent a separate major
line of business and therefore has been included in continuing
operations.
The prior year profit on disposal of subsidiaries in
discontinued operations related to the subsidiaries sold in the
divestment programme in 2019. See note 14 for further details.
5 Directors and employees
Re-presented(2) Re-presented(2)
Re-presented(2) 2019 2019
2020 2020 2020 2019 Discontinued Total 2020 2019
Continuing Discontinued Total Continuing Group Group Total Total
Group Group Group Group GBPm GBPm Company Company
Note GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ---- ----------- -------------- ------- --------------- --------------- --------------- ----------- ---------
Wages and
salaries 15.0 3.1 18.1 18.6 7.9 26.5 1.0 1.4
Social security
costs 1.6 0.3 1.9 2.4 0.7 3.1 0.1 0.1
Other pension
costs 0.6 0.1 0.7 0.7 0.2 0.9 - 0.1
--------------- ---- ----------- -------------- ------- --------------- --------------- --------------- ----------- ---------
Adjusted staff
costs 17.2 3.5 20.7 21.7 8.8 30.5 1.1 1.6
Government
grants 3 (0.3) (0.5) (0.8) - - - - -
Exceptional
staff related
restructuring
costs(3) 4 0.2 0.8 1.0 2.4 0.1 2.5 - 0.8
Equity-settled
share-based
payments 24 0.5 - 0.5 0.1 - 0.1 - 0.1
--------------- ---- ----------- -------------- ------- --------------- --------------- --------------- ----------- ---------
17.6 3.8 21.4 24.2 8.9 33.1 1.1 2.5
--------------- ---- ----------- -------------- ------- --------------- --------------- --------------- ----------- ---------
(2) See note 1 (a) for description of the prior year
re-presentation
(3) Excluding external employment advice costs
The average monthly number of employees employed during the
year, including Directors, was:
Re-presented(2)
2020 2019 2020 2019
Group Group Company Company
Number Number Number Number
------------- ------- --------------- ------------ --------
Xeim 216 255 - -
The Lawyer 56 52 - -
Central 10 10 4 4
Discontinued 134 344 - -
416 661 4 4
------------- ------- --------------- ------------ --------
(2) See note 1 (a) for description of the prior year
re-presentation
The Group's employees are employed and paid by Centaur
Communications Limited, a Group company. As the employees provide
services to the Company, their costs are recharged, and the
relevant disclosures are made in the financial information. The
employees relating to discontinued operations were employed and
paid by MarketMakers Incorporated Limited.
Key management compensation
2020 2019
GBPm GBPm
-------------------------------------------- ----- -----
Salaries and short-term employment benefits 1.2 2.9
Termination benefits - 0.4
Post-employment benefits 0.1 0.1
1.3 3.4
-------------------------------------------- ----- -----
Key management is defined as the Executive Directors and
Executive Committee members.
Aggregate Directors' remuneration
2020 2019
GBPm GBPm
--------------------------------------------- ----- -----
Salaries, fees, bonuses and benefits in kind 0.8 1.8
Termination benefits - 0.4
Post-employment benefits - 0.1
---------------------------------------------- ----- -----
0.8 2.3
--------------------------------------------- ----- -----
Highest paid Director's remuneration
2020 2019
GBPm GBPm
--------------------------------------------- ----- -----
Salaries, fees, bonuses and benefits in kind 0.4 0.8
Termination benefits - 0.4
0.4 1.2
--------------------------------------------- ----- -----
One director and one former director exercised share options
during the year (2019: no shares options were exercised). One
Director was paid compensation in respect of loss of office during
the prior year. Further details of Directors' remuneration are
included in the Remuneration Committee Report.
6 Finance costs
2020 2019
Note GBPm GBPm
---------------------------------------------------- ---- ----- -----
Commitment fees and amortisation of arrangement fee
in respect of revolving credit facility 0.2 0.2
Lease interest 19 0.1 0.1
---------------------------------------------------- ---- ----- -----
0.3 0.3
---------------------------------------------------- ---- ----- -----
Interest and fees on revolving credit facility
These finance costs are in relation to the GBP25m revolving
credit facility, none of which was drawn down at 31 December 2020
(2019: GBPnil). As indicated by the consolidated cash flow
statement, there were no drawdowns from this facility during the
year and all drawdowns in the prior year were also repaid within
the prior year. Finance costs in relation to this facility resulted
in cash outflows by the Company and Group of GBP0.2m during the
year (2019: GBP0.2m).
Lease interest
Lease liabilities are recognised for the Group's property lease
arrangements. GBP0.1m of interest on these leases was incurred
during the year (2019: GBP0.1m). Please refer to notes 1 (j) and 19
for further details.
7 Taxation
Re-presented(2) Re-presented(2)
2020 2020 2020 2019 2019 2019
Continuing Discontinued Total Continuing Discontinued Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ---- ----------- ------------- ------ --------------- --------------- ------
Analysis of charge for the year
Current tax 21
UK Corporation Tax 0.1 (0.1) - - 0.6 0.6
Overseas tax - - - - - -
0.1 (0.1) - - 0.6 0.6
---------------------------------- ---- ----------- ------------- ------ --------------- --------------- ------
Deferred tax 15
Current period (0.7) (0.2) (0.9) (0.7) - (0.7)
Adjustments in respect of prior
years (0.3) - (0.3) 0.1 (0.1) -
---------------------------------- ---- ----------- ------------- ------ --------------- --------------- ------
(1.0) (0.2) (1.2) (0.6) (0.1) (0.7)
---------------------------------- ---- ----------- ------------- ------ --------------- --------------- ------
Taxation (credit) / charge (0.9) (0.3) (1.2) (0.6) 0.5 (0.1)
---------------------------------- ---- ----------- ------------- ------ --------------- --------------- ------
(2) See note 1 (a) for description of the prior year
re-presentation
The tax charge for the year can be reconciled to the (loss) /
profit in the consolidated statement of comprehensive income as
follows:
Re-presented(2) Re-presented(2)
2020 2020 2020 2019 2019 2019
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------- ----------- ------------- ------ --------------- --------------- ------
(Loss) / profit before tax (2.6) (13.0) (15.6) (8.1) 9.9 1.8
Tax at the UK rate of corporation tax of
19.0% (2019: 19.0%) (0.5) (2.5) (3.0) (1.5) 1.9 0.4
Effects of:
Expenses not deductible for tax purposes 0.1 2.1 2.2 0.7 - 0.7
Profit on disposal - - - - (1.5) (1.5)
Effects of changes in tax rate on
deferred tax balances (0.2) 0.1 (0.1) 0.1 - 0.1
Deferred tax adjustment on business
disposal - - - 0.1 0.1 0.2
Adjustments in respect of prior years (0.3) - (0.3) - - -
Taxation (credit) / charge (0.9) (0.3) (1.2) (0.6) 0.5 (0.1)
---------------------------------------- ----------- ------------- ------ --------------- --------------- ------
(2) See note 1 (a) for description of the prior year
re-presentation
The Finance Act 2020 included legislation to keep the rate of
corporation tax at 19% from 1 April 2020 and for financial year
2021. This change had been substantively enacted at the balance
date. The government announced on 3 March 2021 that the rate of
corporation tax will increase from 19% to 25% from 1 April 2023 for
companies with annual taxable profits of over GBP250,000 but this
has not yet been enacted and therefore, the Group's deferred tax
balances continue to be recorded at 19%.
A reconciliation between the reported tax expense and the
adjusted tax expense taking account of adjusting items as discussed
in note 1(b) and 4 is shown below:
Re-presented(2) Re-presented(2)
2020 2020 2020 2019 2019 2019
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ ----------- ------------- ------ --------------- --------------- ------
Reported tax (credit) / charge (0.9) (0.3) (1.2) (0.6) 0.5 (0.1)
Effects of:
Amortisation of acquired intangible
assets 0.2 0.1 0.3 0.4 0.1 0.5
Exceptional costs - 0.1 0.1 0.7 - 0.7
Share-based payments 0.1 - 0.1 - - -
Adjusted tax (credit) / charge (0.6) (0.1) (0.7) 0.5 0.6 1.1
------------------------------------ ----------- ------------- ------ --------------- --------------- ------
(2) See note 1 (a) for description of the prior year
re-presentation
8 Discontinued operations
A significant restructuring of the MarketMakers business was
executed during the year following an adverse impact on the
performance of the telemarketing business following the onset of
Covid. This led to the closure of the MarketMakers' telemarketing
business ('MM') in August 2020. MarketMakers' Really brand
continues to operate and its performance is reported as part of
continuing operations.
A loss on disposal of GBP0.7m arose on the disposal of assets
relating to the MarketMakers' telemarketing business being the
difference between the proceeds of disposal and the carrying amount
of the net assets. Details of the disposal can be found in note
4.
In the prior year, the Group disposed of the following
subsidiaries:
- Centaur Financial Platforms Limited ('FIN') on 31 March 2019;
- Centaur Media Travel and Meetings Limited ('T&M') on 30 April 2019;
- Centaur Human Resources Limited ('HR') on 30 April 2019; and
- Centaur Engineering Limited ('ENG') on 31 May 2019.
The disposals were affected in line with the Group's strategy to
simplify its structure, to improve operational execution and to
focus attention on leading brands.
A profit of GBP7.8m arose on the disposal of these subsidiaries,
being the difference between the proceeds of disposals and the
carrying amount of the subsidiaries' net assets and attributable
goodwill, less transaction costs. Details of these disposals can be
found in note 14.
In addition to the above-named subsidiaries, the Group disposed
of its Venture Business Research Limited ('VBR') subsidiary in the
prior year on 13 May 2019 to an employee of VBR. A loss on disposal
of GBP0.1m arose on this disposal as detailed in note 14. The loss
on disposal, as well as the operational results of VBR, were not
included in discontinued operations as it did not represent a
separate major line of business and these were therefore included
in continuing operations.
The results of the discontinued operations, which were included
in the consolidated statement of comprehensive income and
consolidated cash flow statement, were as follows:
MM FIN T&M HR ENG Total MM FIN T&M HR ENG Total
------------------------ -------- ----- ----- ----- ----- ------- --------- ----- ----- ----- -----
For the year ended 31 December 2020 For the year ended 31 December 2019
Statement of GBPm GBPm GBPm GBPm GBPm GBPm
comprehensive income GBPm GBPm GBPm GBPm GBPm GBPm
------------------------ -------- ----- ----- ----- ----- ------- --------- ----- ----- ----- ----- ------
Revenue 3.6 - - - - 3.6 9.3 2.1 3.8 0.7 0.4 16.3
Expenses (15.9) - - - - (15.9) (9.9) (1.1) (2.2) (0.6) (0.4) (14.2)
(Loss) / profit on
disposal (0.7) - - - - (0.7) - (0.8) 3.0 3.8 1.8 7.8
------------------------ -------- ----- ----- ----- ----- ------- --------- ----- ----- ----- ----- ------
(Loss) / profit before
tax (13.0) - - - - (13.0) (0.6) 0.2 4.6 3.9 1.8 9.9
Attributable tax credit
/ (expense) 0.3 - - - - 0.3 0.1 (0.2) (0.3) (0.1) - (0.5)
------------------------ -------- ----- ----- ----- ----- ------- --------- ----- ----- ----- ----- ------
Statutory (loss) /
profit after tax (12.7) - - - - (12.7) (0.5) - 4.3 3.8 1.8 9.4
Loss / (profit) on
disposal 0.7 - - - - 0.7 - 0.8 (3.0) (3.8) (1.8) (7.8)
Exceptional costs 0.9 - - - - 0.9 - - - 0.1 - 0.1
Impairment of goodwill 11.0 - - - - 11.0 - - - - - -
Amortisation of acquired
intangible assets 0.4 - - - - 0.4 0.7 0.1 - - - 0.8
Tax relating to
adjusting items(1) (0.2) - - - - (0.2) (0.1) - - - - (0.1)
------------------------ -------- ----- ----- ----- ----- ------- --------- ----- ----- ----- ----- ------
Total adjusting items(1) 12.8 - - - - 12.8 0.6 0.9 (3.0) (3.7) (1.8) (7.0)
------------------------ -------- ----- ----- ----- ----- ------- --------- ----- ----- ----- ----- ------
Adjusted profit(1)
attributable to
discontinued operations
after tax 0.1 - - - - 0.1 0.1 0.9 1.3 0.1 - 2.4
------------------------ -------- ----- ----- ----- ----- ------- --------- ----- ----- ----- ----- ------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
MM FIN T&M HR ENG Total MM FIN T&M HR ENG Total
--------------------- ------- ------ ------ ----- ----- ------ ------- ------ ------ ----- ----- ------
For the year ended 31 December 2020 For the year ended 31 December 2019
Cash flows GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ------- ------ ------ ----- ----- ------ ------- ------ ------ ----- ----- ------
Operating cash flows 0.3 - - - - 0.3 0.3 0.6 0.3 0.4 0.4 2.0
Investing cash flows 0.1 - - - - 0.1 (0.1) - - - - (0.1)
Financing cash flows (0.4) - - - - (0.4) (0.2) - - - - (0.2)
--------------------- ------- ------ ------ ----- ----- ------ ------- ------ ------ ----- ----- ------
Total cash flows - - - - - - - 0.6 0.3 0.4 0.4 1.7
--------------------- ------- ------ ------ ----- ----- ------ ------- ------ ------ ----- ----- ------
The attributable tax expense stated in the table above is
derived from the profit of discontinued operations. No income tax
expense arose on the profit or loss on disposals.
9 Earnings / (loss) per share
Basic earnings per share ('EPS') is calculated by dividing the
earnings attributable to ordinary shareholders by the weighted
average number of shares in issue during the year. 1,948,492 (2019:
1,573,134) shares held in the employee benefit trust and 4,550,179
(2019: 6,964,613) shares held in treasury (see note 23) have been
excluded in arriving at the weighted average number of shares.
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potentially dilutive ordinary shares. This comprises share options
and awards (including those granted under the share save plan)
granted to Directors and employees where the exercise price is less
than the average market price of the Company's ordinary shares
during the year.
Basic and diluted earnings per share have also been presented on
an adjusted continuing and discontinued basis, as the Directors
believe that these measures are more reflective of the underlying
performance of the Group. These have been calculated as
follows:
Re-presented(2)
2019
2020 Earnings Earnings / Re-presented(2) Re-presented(2)
/ (loss) 2020 2020 (loss) 2019 2019
attributable Weighted Earnings / attributable to Weighted Earnings /
to owners of average number (loss) per owners of the average number (loss) per
the parent of shares share parent of shares share
Note GBPm millions pence GBPm millions pence
-------------- ---- ------------- -------------- -------------- --------------- --------------- ---------------
Basic
Continuing
operations (1.7) 144.3 (1.2) (7.5) 142.8 (5.3)
Continuing and
discontinued
operations (14.4) 144.3 (10.0) 1.9 142.8 1.3
Effect of
dilutive
securities
Options: - - - - - -
Continuing
operations
Options: - - - - 8.1 -
Continuing and
discontinued
operations
Diluted
Continuing
operations (1.7) 144.3 (1.2) (7.5) 142.8 (5.3)
Continuing and
discontinued
operations (14.4) 144.3 (10.0) 1.9 150.9 1.3
-------------- ---- ------------- -------------- -------------- --------------- --------------- ---------------
Adjusted(1)
Continuing
operations
Basic (1.7) 144.3 (1.2) (7.5) 142.8 (5.3)
Other
exceptional
costs 4 0.2 - 0.1 4.7 - 3.3
Amortisation
of acquired
intangibles 11 1.5 - 1.0 1.7 - 1.2
Share-based
payments 24 0.5 - 0.4 0.1 - 0.1
Loss on
disposal of
subsidiary 14 - - - 0.1 - 0.1
Loss on
disposal of
assets and
liabilities 11 0.1 - 0.1 - - -
Tax effect of
above
adjustments 7 (0.3) - (0.2) (1.1) - (0.8)
Discontinued
operations
Basic 12.7 144.3 (8.8) 9.4 142.8 6.6
Profit on
disposal of
subsidiaries 14 - - - (7.8) - (5.5)
Other
exceptional
costs 4 0.9 - 0.6 0.1 - 0.1
Amortisation
of acquired
intangibles 11 0.4 - 0.3 0.8 - 0.6
Impairment of
goodwill 10 11.0 - 7.6 - - -
Loss on
disposal of
assets and
liabilities 11 0.7 - 0.5 - - -
Tax effect of
above
adjustment 7 (0.2) - (0.1) (0.1) - (0.1)
-------------- ---- ------------- -------------- -------------- --------------- --------------- ---------------
Adjusted(1)
basic
Continuing
operations 0.3 144.3 0.2 (2.0) 142.8 (1.4)
Continuing and
discontinued
operations 0.4 144.3 0.3 0.4 142.8 0.3
Effect of
dilutive
securities
Options:
Continuing
operations - 7.3 - - - -
Options:
Continuing
and
discontinued
operations - 7.3 - - 8.1 -
Adjusted(1)
diluted
Continuing
operations 0.3 151.6 0.2 (2.0) 142.8 (1.4)
Continuing and
discontinued
operations 0.4 151.6 0.3 0.4 150.9 0.3
-------------- ---- ------------- -------------- -------------- --------------- --------------- ---------------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
(2) See note 1 (a) for description of the prior year
re-presentation
Re-presented(2) Re-presented(2) Re-presented(2)
Adjusted Adjusted Statutory Adjusted Adjusted Statutory
Results(1) Items(1) Results Results(1) Items(1) Results
2020 2020 2020 2019 2019 2019
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ----------- --------- --------- --------------- --------------- ---------------
Earnings / (loss) per share
attributable to owners
of the parent
Fully diluted from continuing
operations 0.2p (1.4p) (1.2p) (1.4p) (3.9p) (5.3p)
Fully diluted from discontinued
operations 0.1p (8.9p) (8.8p) 1.7p 4.9p 6.6p
-------------------------------- ----------- --------- --------- --------------- --------------- ---------------
Fully diluted from continuing
and discontinued 0.3p (10.3p) (10.0p) 0.3p 1.0p 1.3p
-------------------------------- ----------- --------- --------- --------------- --------------- ---------------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
(2) See note 1 (a) for description of the prior year
re-presentation
In 2019 there was no difference in the weighted average number
of shares used for the calculation of basic and diluted loss per
share for continuing operations as the effect of all potentially
dilutive shares outstanding was anti-dilutive.
10 Goodwill
Group
Note GBPm
------------------------- ---- ------
Cost
At 1 January 2019 159.5
Disposal of subsidiaries 14 (48.4)
At 31 December 2019 111.1
Closure of business (11.0)
Elimination of goodwill (19.0)
At 31 December 2020 81.1
------------------------- ---- ------
Accumulated impairment
At 1 January 2019 96.9
Disposal of subsidiaries 14 (38.0)
------------------------- ---- ------
At 31 December 2019 58.9
Impairment 11.0
Elimination of goodwill (30.0)
At 31 December 2020 39.9
------------------------- ---- ------
Net book value
At 31 December 2020 41.2
------------------------- ---- ------
At 31 December 2019 52.2
------------------------- ---- ------
At the half year 30 June 2020, an impairment of GBP11.0m was
recognised in the Xeim CGU, entirely related to the MarketMakers
('MM') business within that CGU. This followed the impact that
Covid had on the operations of MM and was a full impairment of the
goodwill balance relating to MM. Since this impairment was
recognised, the MM telemarketing business has ceased operations,
and the goodwill cost and accumulated impairment has been
eliminated. The impairment is included within discontinued
operations as disclosed in note 8.
In addition to the impairment and subsequent elimination of
goodwill relating to MM, the Group also eliminated of GBP19.0m of
goodwill that has been fully impaired in previous financial years
relating to legacy brands and businesses that the Group no longer
operates.
At 31 December 2020 a full impairment assessment has been
carried out. No impairment further to the GBP11.0m detailed above
is required for the remaining carrying value of goodwill.
Disposals in the prior year relate to the disposal of Centaur
Financial Platforms Limited (net book value GBP4.8m), Centaur Media
Travel and Meetings Limited (net book value GBP5.6m), Centaur Human
Resources Limited (net book value GBPnil) and Centaur Engineering
Limited (net book value GBPnil). See note 14 for further
details.
Goodwill by segment
Each brand is deemed to be a Cash Generating Unit ('CGU'), being
the lowest level at which cash flows are separately identifiable.
Goodwill is attributed to individual CGUs and has historically been
reviewed at the operating segment level for the purposes of the
annual impairment review as this is the level at which management
monitors goodwill.
Financial Services Other Professional
Xeim The Lawyer GBPm GBPm Total
Note GBPm GBPm GBPm
------------------------- ------ ------ ---------- ------------------ ------------------ ------
At 1 January 2019 36.2 16.0 4.8 5.6 62.6
Disposal of subsidiaries 14 - - (4.8) (5.6) (10.4)
------------------------- ------ ------ ---------- ------------------ ------------------ ------
At 31 December 2019 36.2 16.0 - - 52.2
Impairment charge (11.0) - - - (11.0)
At 31 December 2020 25.2 16.0 - - 41.2
------------------------- ------ ------ ---------- ------------------ ------------------ ------
Impairment testing of goodwill and acquired intangible
assets
The detailed impairment assessment described below has been
performed after the GBP11.0m impairment already identified in the
Xeim CGU relating to the MM business.
At 31 December 2020, goodwill and acquired intangible assets
(see note 11) were tested for impairment in accordance with IAS 36.
In assessing whether an impairment of goodwill and acquired
intangible assets is required, the carrying value of the segment is
compared with its recoverable amount. Recoverable amounts are
measured based on value-in-use ('VIU').
The Group estimates the VIU of its CGUs using a discounted cash
flow model, which adjusts the cash flows for risks associated with
the assets and discounts these using a pre-tax rate of 12.8% (2019:
12.8%). The discount rate used is consistent with the Group's
weighted average cost of capital and is used across all segments,
which are all based predominantly in the UK and considered to have
similar risks and rewards.
The key assumptions used in calculating VIU are revenue growth,
margin, Adjusted EBITDA growth, discount rate and the terminal
growth rate. The Group has used the MAP23 forecast for the first
three years of the calculation and applied a terminal growth rate
of 2.5% (2019: 2.5%). This timescale and the terminal growth rate
are both considered appropriate given the nature of the Group's
revenues. The key drivers and targets of MAP23 are discussed in the
Strategic Report.
The key assumptions used in the calculations of VIU for each
segment have been derived from a combination of experience and
management's expectations of future growth rates in the business.
The forecasts have been prepared following a review of the business
where management has identified the key growth and focus areas
which will deliver the targets, and conversely which areas of the
business will be de-prioritised over that period. The forecasts
reflect the transformed Group which is more focused and streamlined
in order to deliver higher margins and profits.
The key assumptions and variables in this plan are sensitised in
isolation and in combination. The main sensitivities applied to the
key drivers are outlined below. As required by IAS 36, these
sensitivities are applied in order to assess the effect of
reasonably possible changes in the assumptions.
Sensitivity analysis has been performed on the VIU calculations,
holding all other variables constant, to:
I. apply a 10% reduction to forecast Adjusted EBITDA in each
year of the modelled cash flows. No impairment would occur in
either of the segments.
II. apply a 2% increase in discount rate from 12.8% to 14.8%. No
impairment would occur in either of the segments.
III. reduce the terminal value growth rate from 2.5% to 1.5%. No
impairment would occur in either of the segments.
IV. in combination reduce the terminal value growth rate from
2.5% to 2.0% and apply a 30% reduction to forecast Adjusted EBITDA
in the terminal year of the modelled cash flows. No impairment
would occur in either of the segments.
After the GBP11.0m impairment recognised in the Xeim CGU
relating to the MM business, the results of the impairment
assessment and sensitivities applied indicate that no further
impairment to the goodwill of either CGU is required.
11 Other intangible assets
Separately
Brands and Customer acquired websites
Computer software publishing rights relationships and content Total
Note GBPm GBPm GBPm GBPm GBPm
-------------------- ---- ------------------ -------------------- -------------------- ------------------- -----
Cost
At 1 January 2019 18.6 5.6 15.4 4.7 44.3
Additions -
separately acquired 0.8 - - - 0.8
Additions -
internally
generated 0.4 - - - 0.4
Disposal of
subsidiaries
(restated (2) ) 14 (0.6) (3.5) (2.4) (1.5) (8.0)
-------------------- ---- ------------------ -------------------- -------------------- ------------------- -----
At 31 December 2019
(restated (2) ) 19.2 2.1 13.0 3.2 37.5
Additions -
separately acquired 0.3 - - - 0.3
Additions -
internally
generated 0.3 - - - 0.3
Disposals (0.9) (0.5) (1.7) - (3.1)
At 31 December 2020 18.9 1.6 11.3 3.2 35.0
-------------------- ---- ------------------ -------------------- -------------------- ------------------- -----
Accumulated
amortisation
At 1 January 2019 12.4 2.3 9.4 4.7 28.8
Amortisation charge
for the year 2.6 0.3 2.1 - 5.0
Impairment charge
for the year 0.3 - - - 0.3
Disposals of
subsidiaries
(restated (2) ) 14 (0.5) (1.7) (1.9) (1.5) (5.6)
-------------------- ---- ------------------ -------------------- -------------------- ------------------- -----
At 31 December 2019
(restated (2) ) 14.8 0.9 9.6 3.2 28.5
Amortisation charge
for the year 1.9 0.2 1.7 - 3.8
Disposals (0.5) (0.2) (1.5) - (2.2)
At 31 December 2020 16.2 0.9 9.8 3.2 30.1
-------------------- ---- ------------------ -------------------- -------------------- ------------------- -----
Net book value at 31
December 2020 2.7 0.7 1.5 - 4.9
-------------------- ---- ------------------ -------------------- -------------------- ------------------- -----
Net book value at 31
December 2019 4.4 1.2 3.4 - 9.0
-------------------- ---- ------------------ -------------------- -------------------- ------------------- -----
Net book value at 1
January 2019 6.2 3.3 6.0 - 15.5
-------------------- ---- ------------------ -------------------- -------------------- ------------------- -----
(2) See note 1 (a) for description of prior year restatement
Amortisation on acquired intangible assets from business
combinations is presented as an adjusting item in note 4 (see note
1(b) for further information). Total amortisation of GBP1.9m (2019:
GBP2.5m) on such assets is all amortisation on assets in the asset
groups 'Brands and publishing rights', 'Customer relationships' and
'Separately acquired websites and content' of GBP1.9m (2019:
GBP2.4m) in addition to GBPnil (2019: GBP0.1m) of amortisation on
acquired intangible assets in the asset group 'Computer software'.
These total amounts relate to continuing operations GBP1.5m (2019:
GBP1.7m) and discontinued operations GBP0.4m (2019: GBP0.8m) as
shown in note 4.
During the current year, the Group disposed of intangible assets
totalling a net book value of GBP0.9m. GBP0.1m of this is
recognised in the consolidated statement of comprehensive income in
continuing operations. The GBP0.1m loss on disposal of intangible
assets in continuing operations relates to software assets that
were no longer in use by the business.
The remaining GBP0.8m of assets disposed have been recognised in
discontinued operations, along with proceeds of disposal of
GBP0.1m, resulting in a loss on disposal of GBP0.7m in discontinued
operations. The GBP0.7m loss on disposal of intangible assets in
discontinued operations resulted from the disposal relating to the
MarketMakers ('MM') business. On 24 August 2020, the Group disposed
of the MM branding and website with a net book value of GBP0.3m for
proceeds of GBP0.1m, resulting in a loss of GBP0.2m. Customer
relationships recognised on the acquisition of the MM business in
2017 with a net book value of GBP0.2m were disposed resulting in a
loss of GBP0.2m. MM software assets were disposed at a net book
value of GBP0.3m resulting in a loss of GBP0.3m.These disposals
were affected in line with the closure of the MM telemarketing
business following an adverse impact on trading performance caused
by Covid.
Amortisation and impairment of intangible assets is included in
net operating expenses in the consolidated statement of
comprehensive income. The amortisation charge in continuing
operations is GBP3.3m (2019 re-presented: GBP4.2m) and in
discontinued operations is GBP0.5m (2019 re-presented: GBP0.8m).
The impairment charge in the prior year is wholly in continuing
operations and relates to obsolete software.
Other intangible assets are tested annually for impairment in
accordance with IAS 36 at a segment level by comparing the carrying
value with its recoverable amount. Please see note 10 for further
details.
The Company has no intangible assets (2019: GBPnil).
12 Property, plant and equipment
Leasehold Fixtures Computer ROU assets - property
improvements and fittings equipment GBPm Total
Note GBPm GBPm GBPm GBPm
------------------------------------- ----- ------------- ------------- ---------- --------------------- -------
Cost
At 1 January 2019 2.2 0.7 1.7 - 4.6
Recognised on adoption of IFRS 16 (1 January
2019) - - - 2.3 2.3
Additions - separately acquired - - 0.2 3.2 3.4
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
At 31 December 2019 2.2 0.7 1.9 5.5 10.3
Additions - separately acquired - - 0.3 1.7 2.0
Disposals (2.2) (0.6) (1.1) (2.1) (6.0)
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
At 31 December 2020 - 0.1 1.1 5.1 6.3
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
Accumulated depreciation
At 1 January 2019 1.6 0.5 1.2 - 3.3
Depreciation charge for the year 0.4 0.1 0.2 1.6 2.3
Impairment charge for the year 0.2 - - 0.2 0.4
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
At 31 December 2019 2.2 0.6 1.4 1.8 6.0
Depreciation charge for the year - 0.1 0.2 1.9 2.2
Disposals (2.2) (0.6) (0.9) (1.5) (5.2)
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
At 31 December 2020 - 0.1 0.7 2.2 3.0
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
Net book value at 31 December 2020 - - 0.4 2.9 3.3
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
Net book value at 31 December 2019 - 0.1 0.5 3.7 4.3
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
Net book value at 1 January 2019 0.6 0.2 0.5 - 1.3
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
During the current year the Group disposed of tangibles assets
totalling a net book value of GBP0.8m, resulting in a loss on
disposal of tangible assets of GBP0.8m (GBP0.2m in continuing
operations and GBP0.6m in discontinued operations, see note 4).
The GBP0.2m loss on disposal of tangible assets in continuing
operations relates to computer equipment assets that were no longer
in use by the business (GBP0.1m), and a proportion of the disposal
of the MarketMakers' ROU asset that related to the continuing
Really B2B business (GBP0.1m).
The GBP0.6m loss on disposal of tangible assets in discontinued
operations relates to disposal of computer equipment (GBP0.1m) and
a proportion of the disposal of the MarketMakers' ROU asset that
related to the discontinued telemarketing business (GBP0.5m). These
disposals were affected in line with the closure of the MM
telemarketing business following an adverse impact on trading
performance caused by Covid.
Depreciation and impairment of property, plant and equipment is
included in net operating expenses in the consolidated statement of
comprehensive income.
The depreciation charge in continuing operations is GBP2.0m
(2019 re-presented: GBP2.0m) and in discontinued operations is
GBP0.2m (2019 re-presented: GBP0.3m).
The impairment charge in the prior year related to leasehold
improvements in the Wells Street office which was vacated by
December 2019 and is presented in continuing operations.
The Company has no property, plant and equipment at 31 December
2020 (2019: GBPnil).
13 Investments
Investments
in subsidiary
undertakings
Company GBPm
--------------------------------------- --------------
Cost
At 1 January 2019 and 31 December 2019 151.1
Additions 0.3
--------------------------------------- --------------
At 31 December 2020 151.4
--------------------------------------- --------------
Accumulated impairment
At 1 January 2019 25.3
Impairment charge for the year 35.7
--------------------------------------- --------------
At 31 December 2019 61.0
Impairment charge for the year 25.4
--------------------------------------- --------------
At 31 December 2020 86.4
--------------------------------------- --------------
Net book value at 31 December 2020 65.0
--------------------------------------- --------------
Net book value at 31 December 2019 90.1
--------------------------------------- --------------
Net book value at 1 January 2019 125.8
--------------------------------------- --------------
Impairment testing of the investment
As outlined in the tables below, the carrying value of the
investment represents the Company's direct ownership of Centaur
Communications Limited ('CCL'). At 31 December 2020, the investment
was tested for impairment in accordance with IAS 36. In assessing
whether an impairment of the investment is required, the carrying
value of the investment is compared with its recoverable amount.
The recoverable amount is measured based on value-in-use ('VIU').
Although the Company only has direct ownership of CCL, CCL in turn
directly or indirectly controls the rest of the Group's
subsidiaries. Therefore, the VIU of the Company's investment in CCL
is supported by the operations of the entire Group.
In the prior year, due to the disposals of the Group's
subsidiaries noted below, the Group's cash flows and therefore its
VIU was reduced. This was identified as an indication of impairment
of the Company's investment carrying value and a full impairment
assessment was carried out. An impairment of GBP35.7m was
identified and recognised in the Company's statement of
comprehensive income. After this impairment at 31 December 2019,
the carrying value of the investment was fully supported by the
future cash flows of the continuing operations of the Group.
In the current year, the ongoing global pandemic and its impact
on the economy and directly on the Group was identified as an
indication of impairment of the Company's investment carrying
value, particularly following the closure of the MarketMakers
('MM') telemarketing business. Therefore, a full impairment
assessment has been performed.
The Group estimates the VIU using a discounted cash flow model,
which adjusts the cash flows for risks associated with the assets
and discounts these using a pre-tax rate of 12.8% (2019: 12.8%).
The discount rate used is consistent with the Group's weighted
average cost of capital.
The key assumptions used in calculating VIU are revenue growth,
margin, Adjusted EBITDA growth, discount rate and the terminal
growth rate. The Group has used its MAP23 forecast for the first
three years of the calculation and applied a terminal growth rate
of 2.5% (2019: 2.5%). This timescale and the terminal growth rate
are both considered appropriate given the nature of the Group's
revenues. The key drivers and targets of MAP23 are discussed in the
Strategic Report.
The assumptions used in the calculations of VIU have been
derived based on a combination of experience and management's
expectations of future growth rates in the business. The forecasts
have been prepared following a review of the business where
management has identified the key growth and focus areas which will
deliver the targets, and conversely which areas of the business
will be de-prioritised over that period. The forecasts reflect the
transformed Group which is more focused and streamlined in order to
deliver higher margins and profits.
Sensitivities are applied to each of the key assumptions and
variables in isolation and in combination, in line with those
sensitivities applied for goodwill impairment testing as outlined
in note 10. As required by IAS 36, these sensitivities are applied
in order to assess the effect of reasonably possible changes in the
assumptions.
As a result of the impairment assessment and sensitivities
applied, an impairment of GBP25.4m has been identified and
recognised in the Company's statement of comprehensive income. This
level of impairment specifically reflects the fourth sensitivity
case outlined in note 10 where the terminal growth rate is reduced
from 2.5% to 2.0% in addition to an EBITDA miss in the terminal
year of 30%. The remaining balance is supported by the underlying
trade of the continuing Group.
Additions of GBP0.3 in the year relate to capital contributions
for share based payments recharged to the Company's
subsidiaries.
The Group disposed of its interest in the following subsidiaries
during the prior year:
Proportion of ordinary
shares and voting
Name rights held (%) Principal activities Country of incorporation Date of disposal
----------------------- ----------------------- ------------------------ ------------------------ ----------------
Centaur Engineering 100 Other publishing United Kingdom 31 May 2019
Limited activities
Centaur Financial 100 Research data and United Kingdom 31 March 2019
Platforms Limited analysis
Centaur Human Resources 100 Events and information United Kingdom 30 April 2019
Limited services
Centaur Media Travel 100 Other publishing United Kingdom 30 April 2019
and Meetings Limited activities
Venture Business 100 Research data and United Kingdom 13 May 2019
Research Limited analysis
----------------------- ----------------------- ------------------------ ------------------------ ----------------
The net profit on disposals of these subsidiaries was GBP7.7m
(GBP0.1m loss on the disposal of VBR and GBP7.8m profit on the
disposal of the other four subsidiaries). See note 14 for further
details.
In order to simplify the group structure, the process to close
dormant companies was started for E-consultancy Asia Pacific Pty
Limited, E-consultancy Australia Pty Limited, Pro-Talk Limited,
Taxbriefs Limited and Your Business Magazine Limited. The process
is ongoing at the date of signing the annual report.
Centaur Newco 2018 Limited was dissolved during the year. The
company did not trade since incorporation.
At 31 December 2020, the Group has control over the following
subsidiaries:
Proportion
of ordinary
shares and
voting rights Country of
Name held (%) Principal activities incorporation
--------------------------- -------------- ------------------------------------ --------------
Centaur Communications 100 Holding company and agency services United Kingdom
Limited (1)
Centaur Media USA Inc.(2) 100 Digital information, training and United States
events
Chiron Communications 100 Holding company United Kingdom
Limited
E-consultancy Asia Pacific 100 Dormant Singapore
Pte Limited (3)
E-consultancy Australia 100 Dormant Australia
Pty Limited (4)
E-consultancy LLC (5) 100 Digital information, training and United States
events
E-consultancy.com Limited 100 Digital information, training and United Kingdom
events
MarketMakers Incorporated 100 Telemarketing and Research United Kingdom
Limited (6)
Mayfield Publishing Limited 100 Dormant United Kingdom
Pro-Talk Ltd 100 Dormant United Kingdom
Taxbriefs Holdings Limited 100 Holding company United Kingdom
Taxbriefs Limited 100 Dormant United Kingdom
Thelawyer.com Limited 100 Publishing of consumer and business United Kingdom
journals and periodicals
Xeim Limited 100 Digital information services United Kingdom
Your Business Magazine 100 Dormant United Kingdom
Limited
--------------------------- -------------- ------------------------------------ --------------
(1) Directly owned by Centaur Media Plc
(2) Registered address is 251 Little Falls Drive, Wilmington,
DE19808, USA. Functional currency is USD.
(3) Registered address is 30 Cecil Street, #19-08 Prudential
Tower, Singapore 049712. Functional currency is USD.
(4) Registered address is Level 17, 383 Kent Street, Sydney,
NSW, 2000, Australia. Functional currency is AUD.
(5) Registered address is 251 Little Falls Drive, Wilmington,
DE19808, USA. Functional currency is USD.
(6) Registered address changed from 1000 Lakeside North Harbour
Western Road, Portsmouth, Hampshire, PO6 3EN to Floor M, 10 York
Road, London, SE1 7ND on 13 January 2020.
The registered address of all subsidiary companies, except for
those identified above, is Floor M, 10 York Road, London, SE1 7ND,
United Kingdom. The functional currency of all subsidiaries is GBP
except for those identified above. The consolidated financial
information incorporates the financial information of all entities
controlled by the Company at 31 December 2020.
14 Disposal of subsidiaries
In the prior year the Group disposed of the following
subsidiaries:
- Centaur Financial Platforms Limited ('FIN') on 31 March 2019;
- Centaur Media Travel and Meetings Limited ('T&M') on 30 April 2019;
- Centaur Human Resources Limited ('HR') on 30 April 2019; and
- Centaur Engineering Limited ('ENG') on 31 May 2019.
The disposals were effected in line with the Group's strategy to
simplify its structure, to improve operational execution and to
focus attention on leading brands. All disposals were executed by
way of sale of 100% of the equity shares. The results of these
subsidiaries have been included in discontinued operations as
detailed in note 8.
The net assets of the subsidiaries at the date of disposal were
as follows:
FIN T&M HR ENG Total
31 March 2019 30 April 2019 30 April 2019 31 May 2019
GBPm GBPm GBPm GBPm GBPm
-----------------------------------------------------
Goodwill 4.8 5.6 - - 10.4
Other intangible assets 1.1 - 1.1 - 2.2
Inventories - 1.2 0.1 0.4 1.7
Trade and other receivables 1.0 1.1 0.4 0.2 2.7
Intercompany 1.3 2.2 0.7 - 4.2
Cash and cash equivalents 0.6 0.3 0.4 0.4 1.7
Trade and other payables (0.8) (0.6) (0.4) (0.1) (1.9)
Deferred income (1.3) (2.9) (1.0) (1.2) (6.4)
Current tax liability (0.1) (0.3) - - (0.4)
----------------------------------------------------- ------------- ------------- ------------- ----------- -----
Net assets/(liabilities) disposed attributable to
Shareholders of the Company 6.6 6.6 1.3 (0.3) 14.2
Directly attributable costs of disposal 0.8 0.6 0.6 0.6 2.6
(Loss) / gain on disposal (0.8) 3.0 3.8 1.8 7.8
----------------------------------------------------- ------------- ------------- ------------- ----------- -----
Fair value of consideration 6.6 10.2 5.7 2.1 24.6
----------------------------------------------------- ------------- ------------- ------------- ----------- -----
Satisfied by:
Cash and cash equivalents 5.3 8.0 5.0 2.1 20.4
Settlement of intercompany balances 1.3 2.2 0.7 - 4.2
----------------------------------------------------- ------------- ------------- ------------- ----------- -----
6.6 10.2 5.7 2.1 24.6
----------------------------------------------------- ------------- ------------- ------------- ----------- -----
The net cash flow arising on the disposals was as follows:
FIN T&M HR ENG Total
31 March 2019 30 April 2019 30 April 2019 31 May 2019
GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------
Net cash flow arising on disposal:
Consideration received in cash and cash equivalents 5.3 8.0 5.0 2.1 20.4
Less:
Directly attributable costs of disposal (0.6) (0.6) (0.6) (0.5) (2.3)
Cash and cash equivalents disposed (0.6) (0.3) (0.4) (0.4) (1.7)
4.1 7.1 4.0 1.2 16.4
---------------------------------------------------- ------------- ------------- ------------- ----------- -----
During the current year, GBP0.1m of directly attributable costs
related to the prior year disposals was paid in cash.
In addition to the above-named subsidiaries, the Group disposed
of its Venture Business Research Limited ('VBR') subsidiary in the
prior year on 13 May 2019 to an employee of VBR for GBP1 settled by
cash and GBP31k settlement of intercompany balances. Net assets of
GBP0.2m, consisting wholly of other intangible assets were disposed
of, resulting in a loss of GBP0.1m.
The loss on disposal, as well as the operational results of VBR
were not included in discontinued operations as it did not
represent a separate major line of business and these were
therefore included in continuing operations.
15 Deferred tax
The movement on the deferred tax account for the Group is shown
below:
Accelerated Other
capital temporary Tax
allowances differences losses Total
GBPm GBPm GBPm GBPm
--------------------------------------------- ----------- ------------ ------- -----
Net asset / (liability) at 1 January 2019 0.7 (0.5) 0.1 0.3
Recognised in the statement of comprehensive
income (0.1) 0.1 0.7 0.7
--------------------------------------------- ----------- ------------ ------- -----
Net asset / (liability) at 31 December 2019 0.6 (0.4) 0.8 1.0
Adjustments in respect of prior periods 0.1 0.2 - 0.3
Recognised in the statement of comprehensive
income - 0.2 0.7 0.9
Net asset / (liability) at 31 December 2020 0.7 - 1.5 2.2
--------------------------------------------- ----------- ------------ ------- -----
Deferred tax assets and liabilities are only offset where there
is a legally enforceable right of offset and there is an intention
to settle the balances net.
2020 2019
Group Group
GBPm GBPm
------------------------- ------ ------
Deferred tax assets 2.4 1.4
Deferred tax liabilities (0.2) (0.4)
------------------------- ------ ------
2.2 1.0
------------------------- ------ ------
At the year-end, the Group has unused tax losses of GBP8.1m
(2019: GBP4.2m) available for offset against future profits. A
deferred tax asset of GBP1.5m (2019: GBP0.8m) has been recognised
in respect of GBP8.1m (2019: GBP4.2m) of such tax losses. The Group
has concluded that the deferred tax asset will be recoverable using
the estimated future taxable profit based on the approved MAP23
forecast (see Strategic Report). The Group is expected to generate
taxable profits from 2021 onwards. The losses can be carried
forward indefinitely and have no expiry date as long as the
companies that have the losses continue to trade.
The Company had deferred tax assets on share options under long
term incentive plans of GBP0.1m at 31 December 2020 (2019:
GBP0.1m).
Deferred tax assets and liabilities are expected to be
materially utilised after 12 months.
16 Trade and other receivables
Restated(2) Restated(2)
2020 2019 2020 2019
Group Group Company Company
Note GBPm GBPm GBPm GBPm
--------------------------------------- ---- ------ ----------- --------- -----------
Amounts falling due within one year
Trade receivables 5.2 7.9 - -
Less: expected credit loss 27 (1.0) (1.1) - -
--------------------------------------- ---- ------ ----------- --------- -----------
Trade receivables - net 4.2 6.8 - -
Receivables from subsidiaries - - 34.9 -
Receivable from Employee Benefit Trust - - 0.6 0.6
Other receivables 0.2 1.8 0.1 -
Prepayments 1.2 1.3 0.1 0.1
Accrued income 0.2 0.4 - -
5.8 10.3 35.7 0.7
--------------------------------------- ---- ------ ----------- --------- -----------
Restated(2) Restated(2)
2020 2019 2020 2019
Group Group Company Company
GBPm GBPm GBPm GBPm
------------------------------------------------------------- --- ------ ----------- --------- -----------
Amounts falling due after one year
Other receivables 0.5 0.5 0.2 0.3
0.5 0.5 0.2 0.3
----------------------------------------------------------------- ------ ----------- --------- -----------
(2) See note 1 (a) for description of prior year restatement
Trade receivables and the expected credit loss include GBP0.1m
and GBP(0.1m) respectively, in relation to discontinued
operations.
Receivables from subsidiaries are unsecured, have no fixed due
date and bear interest at an annual rate of 2.49% (2019:
2.53%).
Other receivables due within one year in the prior year included
GBP1.5m in relation to the lease which was received in the current
year on the exit of the Wells Street property.
Other receivables due after one year include GBP0.3m (2019:
GBP0.3m) in relation to a deposit on the Waterloo property lease
which is fully refundable at the end of the lease term.
17 Cash and cash equivalents
2020 2019
Group Group
GBPm GBPm
------------------------- ------ ------
Cash at bank and in hand 8.3 9.3
------------------------- ------ ------
The Company had no cash and cash equivalents at 31 December 2020
(2019: GBPnil).
18 Trade and other payables
2020 2019 2020 2019
Group Group Company Company
GBPm GBPm GBPm GBPm
-------------------------------- ------ ------ -------- --------
Trade payables 0.2 1.1 - -
Payables to subsidiaries - - 60.0 62.0
Social security and other taxes 1.3 1.0 - -
Other payables 1.6 1.7 - -
Accruals 5.7 8.7 0.4 1.4
-------------------------------- ------ ------ -------- --------
8.8 12.5 60.4 63.4
-------------------------------- ------ ------ -------- --------
Payables to subsidiaries are unsecured, have no fixed date of
repayment and bear interest at an annual rate of 2.49% (2019:
2.53%).
During the year, in response to Covid the Government allowed
payments of VAT between 20 March 2020 and 30 June 2020 to be
deferred until 31 March 2021. Under this scheme the Group deferred
a total of GBP1.0m VAT payments, which is included in 'social
security and other taxes' above. This is planned to be re-paid in
2021.
Trade payables and other payables include GBP0.1m and GBP0.2m
respectively, relating to discontinued operations.
The Directors consider that the carrying amount of the trade
payables approximates their fair value.
19 Lease liabilities
All lease liabilities currently held by the Group relate to
property leases, for which corresponding right-of-use ('ROU')
assets are held on the consolidated statement of financial position
within property, plant and equipment and detailed in note 12.
2020 2019
Group Group
GBPm GBPm
----------------------------------- ------ ------
At 1 January 4.3 3.3
Additions - 3.2
Remeasurement of lease liabilities 1.7 -
Interest expense 0.1 0.1
Cash outflow (1.9) (2.3)
Disposal on exit of lease (0.8) -
----------------------------------- ------ ------
At 31 December 3.4 4.3
----------------------------------- ------ ------
Current 2.0 2.1
Non-current 1.4 2.2
----------------------------------- ------ ------
At 31 December 3.4 4.3
----------------------------------- ------ ------
The lease liability for one of the Group's property leases was
remeasured during the year upon reassessment of the lease term, and
renegotiation of payment terms due to Covid. The amount of the
remeasurement of the lease liability has been recognised as an
adjustment to the ROU asset.
During 2020, in response to Covid, the International Accounting
Standards Board ('IASB') issued amendments to IFRS 16 'Leases' to
allow lessees not to account for rent concessions as lease
modifications requiring a remeasurement if they are a direct
consequence of Covid and meet certain conditions. As described
above, there was a renegotiation of payment terms on one of the
Group's leases due to the pandemic. Due to the effect of the
renegotiation impacting months outside of the specified conditions,
the Group has not applied this practical expedient and has
therefore remeasured the lease in respect of this.
The lease liability for the Group's property in Portsmouth,
which was the office for the MarketMakers business, has been fully
released during the year upon the cessation of the MarketMakers
telemarketing business.
The gain on disposal of the lease liability has been recognised
in the consolidated statement of comprehensive income, with GBP0.2m
recognised in continuing operations for the proportion of the
liability that relates to the continuing Really B2B business, and
GBP0.6m recognised in discontinued operations relating to the
proportion of the liability that relates to the discontinued
telemarketing business. The corresponding ROU asset was also
disposed of (see note 12), with the resulting net gain on disposal
of GBP0.2m being materially offset by the exit penalty
incurred.
20 Deferred income
2020 2019
Group Group
GBPm GBPm
---------------- ------ ------
Deferred income 7.0 8.7
---------------- ------ ------
Deferred income arises on contracts with customers where revenue
recognition criteria has not yet been met. See note 1 (e) for
further details.
21 Current tax assets
2020 2019
Group Group
GBPm GBPm
---------------------------- ------ ------
Corporation tax receivables 0.2 0.1
---------------------------- ------ ------
The Company had no corporation tax receivables or payables at 31
December 2020 (2019: GBPnil).
22 Provisions
Deferred
Restructuring consideration Other Total
Group GBPm GBPm GBPm GBPm
--------------------- ------------- -------------- ----- -----
At 1 January 2019 - 0.1 0.1 0.2
Utilised in the year - (0.1) - (0.1)
--------------------- ------------- -------------- ----- -----
At 31 December 2019 - - 0.1 0.1
--------------------- ------------- -------------- ----- -----
Additions 1.0 - - 1.0
Utilised in the year (1.0) - (0.1) (1.1)
--------------------- ------------- -------------- ----- -----
At 31 December 2020 - - - -
--------------------- ------------- -------------- ----- -----
Restructuring
During the current year, a restructuring provision of GBP0.8m
was recognised in relation to restructuring the MarketMakers
business following a sharp fall in revenue as several major
customers were hit by disruption in their own markets. A further
GBP0.2m was provided in relation to restructuring other parts of
the wider Centaur group due to the adverse impact of Covid. The
provision was fully utilised in the second half of 2020. The
associated expense has been recognised within exceptional costs and
presented as adjusting items as disclosed within note 4. The staff
related restructuring costs in continuing operations is GBP0.2m
(2019: nil) and in discontinued operations is GBP0.8m (2019:
nil).
Deferred consideration
Deferred consideration at 1 January 2019 of GBP0.1m related to
the 2017 acquisition of MarketMakers. This was settled in cash
during 2019.
Other
The other provision relates to the dilapidation provision which
was acquired on the acquisition of MarketMakers in relation to the
building leased by the company in Portsmouth. This provision was
utilised during the current year as part of the exit of the
Portsmouth lease upon cessation of MarketMakers' telemarketing
business. The associated expense has been recognised within
discontinued exceptional costs and presented as adjusting items as
disclosed within note 4.
All amounts represent the Directors' best estimate of the
balance to be paid at the statement of financial position date.
23 Equity
Nominal
value Number
Ordinary shares of 10p each GBPm of shares
--------------------------------------------------------- ------- -----------
Authorised share capital - Group and Company
At 1 January 2019, 31 December 2019 and 31 December 2020 20.0 200,000,000
--------------------------------------------------------- ------- -----------
Issued and fully paid share capital - Group and Company
At 1 January 2019, 31 December 2019 and 31 December 2020 15.1 151,410,226
--------------------------------------------------------- ------- -----------
Deferred shares reserve
The deferred shares reserve represents 800,000 (2019: 800,000)
deferred shares of 10p each, which carry restricted voting rights
and have no right to receive a dividend payment in respect of any
financial year.
Reserve for shares to be issued
The reserve for shares to be issued is in respect of
equity-settled share-based compensation plans. The changes to the
reserve for shares to be issued represent the total charges for the
year relating to equity-settled share-based payment transactions
with employees as accounted for under IFRS 2.
During the year a transfer of GBP1.0m was made from the reserve
to retained earnings for lapsed share awards relating to the TSR
performance condition of long-term incentive plans. GBP0.2m relates
to the current year, GBP0.1m relates to 2019 and GBP0.7m relates to
schemes which lapsed before 2019. A prior year restatement has not
been made as the adjustment is not material to the users of the
annual report and financial information.
Own shares reserve
The own shares reserve represents the value of shares held as
treasury shares and in an employee benefit trust. At 31 December
2020, 4,550,179 (31 December 2019: 6,964,613) 10p ordinary shares
are held in treasury and 1,948,492 (31 December 2019: 1,573,134)
10p ordinary shares are held in an employee benefit trust.
During 2020, 2,414,434 shares were transferred out of treasury
to the employee benefit trust in order to meet future obligations
arising from share-based rewards to employees. The shares were
transferred from treasury at the historical weighted average cost
of GBP2.2m (90.88p per share) and acquired by the employee benefit
trust at the market value of GBP0.6m (25p per share). The
difference between the historical weighted average cost and the
market value of GBP1.6m has been eliminated on consolidation.
During the prior year, the employee benefit trust purchased
1,247,205 ordinary shares held in the employee benefit trust in
order to meet future obligations arising from share-based rewards
to employees. The shares were acquired at an average price of 51.7p
per share, with prices ranging from 45.6p to 54p. The total cost of
GBP0.6m was recognised in other reserves in the own shares reserve
in equity.
The employee benefit trust also issued 2,038,736 (2019: 532,062)
shares to meet obligations arising from share-based rewards to
employees that had vested in both the current and prior year and
were exercised in the year. The shares were issued at a historical
weighted average cost of 61.3p (2019: 50.3p) per share. The total
cost of GBP1.3m (2019: GBP0.3m) has been recognised as a reduction
in the own shares reserve in other reserves in equity.
24 Share-based payments
The Group's share-based payment expense for the year by
scheme:
2020 2019
GBPm GBPm
Equity-settled plans
LTIP 0.5 0.1
------------------------------------------------------------- ----- -----
Total equity-settled incentive plans and share based payment
expense 0.5 0.1
------------------------------------------------------------- ----- -----
The Group's share-based payment schemes upon vesting are
equity-settled.
Share-based payment charge in 2020 of GBP0.5m (2019 GBP0.1m)
increased year on year due to several reasons. Most of the increase
is driven by 5.9 million less forfeitures and lapses in the current
year resulting in GBP0.4m less credits to the income statement for
the reversal of charges previously taken. There was also an overall
increase in the charge of GBP0.1m following the true-up for a
scheme that vested in the year and the true-up of a number of
schemes for the amount of shares expected to vest compared to the
prior year. This was offset by a lower charge of GBP0.1m relating
to a reduction of 1.5 million new share options granted compared to
prior year.
There is an immaterial amount of national insurance payable on
equity settled-share-based schemes in the current and prior year
which is included in liabilities as it is to be settled in
cash.
Long-Term Incentive Plan
The Group operates a Long-Term Incentive Plan ('LTIP') for
Executive Directors and selected senior management. This is an
existing incentive policy and was approved by shareholders at the
2016 AGM. The share awards are valued at date of grant and the
consolidated statement of comprehensive income is charged over the
vesting period, considering the number of shares expected to vest.
Full details on how the scheme operates are included in the
Remuneration Report.
During the period, 1,057,321 (2019: 478,472) share options were
exercised in relation to LTIPs that vested in 2019. Further details
are shown below.
On 6 April 2020, 50% of the LTIP granted on 6 April 2018 to
selected senior management vested upon meeting the performance
conditions of two years continued employment. All 981,415 of these
share options were exercised during the year. Further details are
shown below.
On 30 June 2020, LTIPs were granted to Executive Directors and
selected senior management. This grant was made at 75% of the
normal award allowed for under the Remuneration Policy to reflect
the current low level of the share price as a result of Covid.
Further details are shown below.
In the prior year 53,590 shares granted on 25 July 2018 vested
and were exercised upon completion of the performance conditions of
continued employment. Details below.
Long-Term Incentive Plan
These awards were priced using the following models and
inputs:
LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016
---------- ---------- ---------- ---------- ---------- ----------
Grant date 30.06.2020 03.10.2019 25.10.2019 25.07.2019 25.07.2018 06.04.2018
Share price at grant date 24.00 41.50 32.50 46.00 44.40 50.20
Fair value 14.77 22.77 16.25 23.00 22.20 28.65
Exercise date 29.06.2023 02.10.2022 05.04.2022 05.04.2022 24.07.2019 06.04.2021
Exercise price (p) GBPnil GBPnil GBPnil GBPnil GBPnil GBPnil
---------- ---------- ---------- ---------- ---------- ----------
Number of awards
Balance at 1 January 2020 - 995,259 128,133 2,236,640 - 1,246,879
Granted during the year 2,074,782 - - - - -
Forfeited during the year - - (80,083) (80,128) - -
Exercised during the year - - - - - -
Lapsed during the year - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
Balance at 31 December 2020 2,074,782 995,259 48,050 2,156,512 - 1,246,879
---------- ---------- ---------- ---------- ---------- ----------
Exercisable at 31 December 2020 - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
Average share price at date of exercise (p) - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
Balance at 1 January 2019 - - - - 53,590 1,246,879
Granted during the year - 995,259 128,133 2,482,366 - -
Forfeited during the year - - - (245,726) - -
Exercised during the year - - - - (53,590) -
Lapsed during the year - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
Balance at 31 December 2019 - 995,259 128,133 2,236,640 - 1,246,879
---------- ---------- ---------- ---------- ---------- ----------
Exercisable at 31 December 2019 - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
Average share price at date of exercise (p) - - - - 51.25 -
---------- ---------- ---------- ---------- ---------- ----------
Grant date 30.06.2020 03.10.2019 25.10.2019 25.07.2019 25.07.2018 6.04.2018
---------- ---------- ---------- ---------- ---------- ----------
Expected volatility (%) 47.0 40.0 - - - 43.5
Expected dividend yield (%) - - - - - -
Risk free interest rate (%) (0.09) 0.34 - - - 0.86
Valuation of model used Stochastic Stochastic * * * Stochastic
---------- ---------- ---------- ---------- ---------- ----------
LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2006
------------- ---------- ----------- ---------- ---------- -----------
Grant date 06.04.2018 24.04.2017 07.04.2017 04.10.2016 22.09.2016 30.03.2016
Share price at grant date 50.20 45.75 40.75 44.00 41.00 49.00
Fair value 25.10 24.46 21.08 18.04 16.81 20.92
Exercise date 06.04.2021 24.04.2020 07.04.2020 04.10.2019 22.09.2019 30.03.2019
Exercise price (p) GBPnil GBPnil GBPnil GBPnil GBPnil GBPnil
------------- ---------- ----------- ---------- ---------- -----------
Number of awards
Balance at 1 January 2020 1,963,191 675,764 381,557 - - -
Granted during the year - - - - - -
Forfeited during the year - - - - - -
Exercised during the year (981,415) (675,764) (381,557) - - -
Lapsed during the year - - - - - -
------------- ---------- ----------- ---------- ---------- -----------
Balance at 31 December 2020 981,776 - - - - -
------------- ---------- ----------- ---------- ---------- -----------
Exercisable at 31 December 2020 - - - - - -
------------- ---------- ----------- ---------- ---------- -----------
Average share price at date of exercise
(p) 24.19 25.50 26.65 - - -
------------- ---------- ----------- ---------- ---------- -----------
Balance at 1 January 2019 2,104,890 1,351,528 2,958,786 573,395 366,667 1,983,489
Granted during the year - - - - -
Forfeited during the year (141,699) - (92,035) - - -
Exercised during the year - - (478,472) - - -
Lapsed during the year - (675,764) (2,006,722) (573,395) (366,667) (1,983,489)
------------- ---------- ----------- ---------- ---------- -----------
Balance at 31 December 2019 1,963,191 675,764 381,557 - - -
------------- ---------- ----------- ---------- ---------- -----------
Exercisable at 31 December 2019 - 675,764 381,557 - - -
------------- ---------- ----------- ---------- ---------- -----------
Average share price at date of exercise
(p) - - 39.49 - - -
------------- ---------- ----------- ---------- ---------- -----------
Grant date 6.04.2018 24.04.2017 07.04.2017 04.10.2016 22.09.2016 30.03.2016
------------- ---------- ----------- ---------- ---------- -----------
Expected volatility (%) 43.5 45.4 45.4 43.8 43.8 31.8
Expected dividend yield (%) 6.47 - - - - -
Risk free interest rate (%) 0.86 0.12 0.12 0.06 0.06 0.48
Valuation of model used Black-Scholes Stochastic Stochastic Stochastic Stochastic Stochastic
------------- ---------- ----------- ---------- ---------- -----------
*Shares granted on 25 October 2019, 25 July 2019 and 25 July
2018 were nil-cost options with non-market-based performance
conditions. These schemes were valued based on the estimated
vesting value of the non-market-based conditions and expected
forfeiture rates.
The shares outstanding at 31 December 2020 had a weighted
average exercise price of GBPnil (2019: GBPnil) and a weighted
remaining life of 1.3 years (2019: 1.6 years).
In the prior year, the shares granted under two schemes in 2017
were assessed for early vesting following the sale of four business
units resulting in a significant change in the business. As a
result, the shares related to the TSR performance conditions vested
and shares related to all other performance conditions lapsed.
Senior Executive Long-Term Incentive Plan ('SELTIP')
The Centaur Media Plc 2010 Senior Executive Long-Term Incentive
Plan (the 'SELTIP') was introduced during 2011 and was approved by
shareholders at the 2010 AGM. This is not an HMRC approved scheme
and vests over a three-year period with service and performance
conditions. Awards were granted under this scheme in 2011 for no
consideration and no exercise price. This scheme has closed to new
awards.
Awards of bonus units were made in 2013 as summarised in the
following table:
Number
of shares
Total awarded
Financial Threshold PBTA Profit SELTIP bonus Bonus pool in
year profit achieved growth contribution pool allocated* total**
---------- ---------- ---------- -------- -------------- ------- ----------- ----------
2013 GBP8.0m GBP8.6m GBP0.6m 30% GBP0.1m GBP0.1m 118,851
---------- ---------- ---------- -------- -------------- ------- ----------- ----------
* The Remuneration Committee did not allocate the entire bonus pool in 2013.
** Awards were only made to participants with continuing employment.
Senior Executive Long-Term Incentive Plan
These awards were priced using the following models and
inputs:
SELTIP
2013
-------------------------------------------- --------
Grant date 15.09.11
Share price at grant date 33.88
Fair value 23.76
Exercise date 17.09.14
Exercise price (p) GBPnil
-------------------------------------------- --------
Number of awards
Balance at 1 January 2020 6,862
Granted during the year -
Forfeited during the year -
Exercised during the year -
-------------------------------------------- --------
Balance at 31 December 2020 6,862
-------------------------------------------- --------
Exercisable at 31 December 2020 6,862
-------------------------------------------- --------
Average share price at date of exercise (p) -
-------------------------------------------- --------
Balance at 1 January 2019 6,862
Granted during the period -
Forfeited during the period -
Exercised during the period -
-------------------------------------------- --------
Balance at 31 December 2019 6,862
-------------------------------------------- --------
Exercisable at 31 December 2019 6,862
-------------------------------------------- --------
Average share price at date of exercise (p) -
-------------------------------------------- --------
The shares outstanding at 31 December 2020 had a weighted
average exercise price of GBPnil (2019: GBPnil) and a weighted
remaining life of 1.7 years (2019: 2.7 years).
Share Incentive Plan
The Group has a Share Incentive Plan, which is a HRMC approved
Tax-Advantaged plan, which provides employees with the opportunity
to purchase shares in the Company. This plan is open to all
employees who have been employed by the Group for more than 12
months. Employees may invest up to GBP1,800 per annum (or 10% of
their salary if less) in ordinary shares in the Company, which are
held in trust. The shares are purchased in open market and are held
in trust for each employee. The shares can be withdrawn with tax
paid at any time, or tax-free after five years. The Group matches
the contribution with a ratio of one share for every two purchased.
Other than continuing employment, there are no other performance
conditions attached to the plan.
The Executive Directors are eligible to participate in the Share
Incentive Plan, as are all employees of the Group.
2020 2019
GBP GBP
Number of outstanding matching shares 58,117 48,071
--------------------------------------- ------ ------
25 Dividends
2020 2019
GBPm GBPm
--------------------------------------------------------- ---- ----
Equity dividends
Final dividend for 2018: 1.5p per 10p ordinary share - 2.1
Interim dividend for 2019: ordinary dividend of 1.5p and
special dividend of 2.0p per 10p ordinary share - 5.0
--------------------------------------------------------- ---- ----
- 7.1
--------------------------------------------------------- ---- ----
At the time of the 2019 results announcement on 18 March 2020, a
final dividend relating to 2019 at 0.5p per share was proposed. Due
to the uncertainty posed by the Covid outbreak, the Board decided
that is was prudent not to pay this final dividend of GBP0.7m. The
total dividend pertaining to 2019 was therefore the interim
dividend of GBP5.0m, comprising a GBP2.1m ordinary dividend at 1.5p
per share and a GBP2.9m special dividend at 2.0p per share. This
dividend was paid on 18 October 2019.
A final dividend for the year ended 31 December 2020 of GBP0.7m
(0.5p share) is proposed by the Directors and, subject to
shareholder approval at the Annual General Meeting, will be paid to
all shareholders on the Register of Members on 28 May 2021.
During the year, the Company received a dividend of GBP40.0m
from Centaur Communications Limited (2019: GBPnil).
26 Notes to the cash flow statement
Reconciliation of (loss) / profit for the year to net cash
inflow from operating activities:
2020 2019 2020 2019
Group Group Company Company
Note GBPm GBPm GBPm GBPm
------------------------------------------- ---- ------ ------ -------- --------
(Loss) / profit for the year (14.4) 1.9 (27.7) (40.2)
Adjustments for:
Tax 7 (1.2) (0.1) (0.4) 1.4
Net interest expense 6 0.3 0.3 0.8 1.7
Depreciation 12 2.2 2.3 - -
Impairment of property, plant and
equipment 12 - 0.4 - -
Amortisation of intangible assets 11 3.8 5.0 - -
Impairment of intangible assets 11 - 0.3 - -
Impairment of goodwill 10 11.0 - - -
Loss on disposal of assets and liabilities 11 0.8 - - -
Loss on disposal of subsidiary 14 - 0.1 - -
Gain on disposal of subsidiaries 14 - (7.8) - -
Loss on impairment of investment 13 - - 25.4 35.7
Share-based payment charge 24 0.5 0.1 - 0.1
Dividends received from subsidiaries 25 - - 40.0 -
Unrealised foreign exchange differences 0.1 - - -
Changes in working capital (excluding
effects of disposals of subsidiaries):
Decrease / (increase) in trade and
other receivables 4.4 0.5 (34.1) 1.8
(Decrease) / increase in trade and
other payables (3.7) 1.3 (3.8) 6.8
(Decrease) / increase in deferred
income (1.7) 0.3 - -
------------------------------------------- ---- ------ ------ -------- --------
Cash generated from operating activities 2.1 4.6 0.2 7.3
------------------------------------------- ---- ------ ------ -------- --------
Reconciliation of movements of liabilities to cash flows arising
from financing activities:
Group and
Company Group
borrowings Lease liabilities
Note GBPm GBPm
---------------------------------------------- ---- ----------- ------------------
At 1 January 2019 - 3.3
Changes from financing cash flows:
Interest paid 6 (0.2) -
Repayment of obligations under finance leases 19 - (2.3)
Proceeds from borrowings 27 2.8 -
Repayment of borrowings 27 (2.8) -
---------------------------------------------- ---- ----------- ------------------
Total changes from financing cash flows (0.2) (2.3)
Other changes:
Interest expense 6 0.2 0.1
Additions on commencement of new lease 19 - 3.2
---------------------------------------------- ---- ----------- ------------------
Total other changes 0.2 3.3
---------------------------------------------- ---- ----------- ------------------
Balance at 31 December 2019 - 4.3
Changes from financing cash flows:
Interest paid 6 (0.2) -
Repayment of obligations under finance leases 19 - (1.9)
Total changes from financing cash flows (0.2) (1.9)
Other changes:
Interest expense 6 0.2 0.1
Remeasurement of lease liabilities 19 - 1.7
Disposal on exit of lease 19 - (0.8)
---------------------------------------------- ---- ----------- ------------------
Total other changes 0.2 1.0
---------------------------------------------- ---- ----------- ------------------
Balance at 31 December 2020 - 3.4
---------------------------------------------- ---- ----------- ------------------
27 Financial instruments and financial risk management
Financial risk management
The Board has overall responsibility for the determination of
the Group's risk management policies. The Board receives monthly
reports from the Chief Financial Officer through which it reviews
the effectiveness of policies and processes put in place to manage
risk. The Board sets policies that reduce risk as far as possible
without unduly affecting the operating effectiveness of the
Group.
The Group's activities expose it to a variety of financial
risks, including interest rate risk, credit risk, liquidity risk,
capital risk and currency risk. Of these, credit risk and liquidity
risk are considered the most significant. This note presents
information about the Group's exposure to each of the above
risks.
Categories of financial instruments
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised in respect of each class of financial asset, financial
liability and equity instrument are disclosed in note 1(t). All
financial assets and liabilities are measured at amortised
cost.
2020 2019
Note GBPm GBPm
------------------------ ---- ----- -----
Financial assets
Cash and bank balances 17 8.3 9.3
Trade receivables - net 16 4.2 6.8
Other receivables 16 0.7 2.3
------------------------ ---- ----- -----
13.2 18.4
------------------------ ---- ----- -----
Financial liabilities
Lease liabilities 19 3.4 4.3
Trade payables 18 0.2 1.1
Accruals 18 5.7 8.7
Provisions 22 - 0.1
Other payables 18 1.6 1.7
------------------------ ---- ----- -----
10.9 15.9
------------------------ ---- ----- -----
Credit risk
The Group's principal financial assets are trade and other
receivables (note 16). Credit risk refers to the risk that a
counterparty will default on its contractual obligations resulting
in financial loss to the Group. The carrying amount of financial
assets recorded in the financial information, which is net of
impairment losses, represents the Group's maximum exposure to
credit risk in relation to financial assets. Credit risk is managed
on a Group basis. The Group does not consider that it is subject to
any significant concentrations of credit risk.
Trade receivables
Trade receivables consist of a large number of customers, of
varying sizes and spread across diverse industries and geographies.
The Group does not have significant exposure to credit risk in
relation to any single counterparty or group of counterparties
having similar characteristics. The Group's exposure to credit risk
is influenced predominantly by the circumstances of individual
customers as opposed to industry or geographic trends.
The business assesses the credit quality of customers based on
their financial position, past experience and other qualitative and
quantitative factors. The Group's policy requires customers to pay
in accordance with agreed payment terms, which are generally 30
days from the date of invoice. Under normal trading conditions, the
Group is exposed to relatively low levels of risk, and potential
losses are mitigated as a result of a diversified customer base and
the requirement for events and certain premium content subscription
invoices to be paid in advance of service delivery.
The credit control function within the Group's finance
department monitors the outstanding debts of the Group, and trade
receivables balances are analysed by the age and value of
outstanding balances.
Any trade receivable balance which is objectively determined to
be uncollectible is written off the ledger, with a charge taken
through the consolidated statement of comprehensive income. The
Group also records an allowance for the lifetime expected credit
loss on its trade receivables balances under the simplified
approach as mandated by IFRS 9. The impairment model for trade
receivables, under IFSR 9, requires the recognition of impairment
provisions based on expected lifetime credit losses, rather than
only incurred ones. All balances past due are reviewed, with those
greater than 90 days past due considered to carry a higher level of
credit risk. Refer to note 1 (t) for further details on the
approach to allowance for expected credit losses on trade
receivables.
The allowance for expected lifetime credit losses, and changes
to it, are taken through administrative expenses in the
consolidated statement of comprehensive income.
The ageing of trade receivables according to their original due
date is detailed below:
2020 2020 2019 2019
Gross Provision Gross Provision
GBPm GBPm GBPm GBPm
---------------------- ------ ---------- ------ ----------
Not due 3.3 (0.1) 3.7 -
0-30 days past due 0.6 - 1.5 -
31-60 days past due 0.1 - 0.5 -
61-90 days past due 0.2 (0.1) 0.4 (0.1)
Over 90 days past due 1.0 (0.8) 1.8 (1.0)
---------------------- ------ ---------- ------ ----------
5.2 (1.0) 7.9 (1.1)
---------------------- ------ ---------- ------ ----------
Trade receivables that are less than 3 months past due are
generally not considered to be impaired, except where specific
credit issues or delinquency in payments have been identified. In
making the assessment that unprovided trade receivables are not
impaired, the Directors have considered the quantum of gross trade
receivables which relate to amounts not yet included in income,
including pre-event invoices in deferred income and amounts
relating to VAT. The credit quality of trade receivables not yet
due nor impaired has been assessed as acceptable.
The movement in the allowance for expected credit losses on
trade receivables is detailed below:
Re-presented(2) Re-presented(2)
2020 2020 2020 2019 2019 2019
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------- ----------- ------------- ------ --------------- --------------- ------
Balance at 1 January 0.7 0.4 1.1 1.1 0.1 1.2
Utilised (0.1) - (0.1) (0.4) - (0.4)
Additional provision charged to the
statement of comprehensive income 0.3 - 0.3 - 0.4 0.4
Release - (0.3) (0.3)
Disposal of subsidiaries - - - - (0.1) (0.1)
Balance at 31 December 0.9 0.1 1.0 0.7 0.4 1.1
(2) See note 1 (a) for description of the prior year
re-presentation
The Group's policy requires customers to pay in accordance with
agreed payment terms, which are generally 30 days from the date of
invoice or, in the case of live events related revenue, no less
than 30 days before the event. All credit and recovery risk
associated with trade receivables has been provided for in the
consolidated statement of financial position. The Group's policy
for recognising an impairment loss is given in note 1 (t)(ii).
Impairment losses are taken through administrative expenses in the
consolidated statement of comprehensive income.
The remaining provision of GBP0.1m for discontinued operations
relates to MarketMakers trade debtors which have been fully
provided for.
The Directors consider the carrying value of trade and other
receivables approximates to their fair value.
Cash and cash equivalents
Banks and financial institutions are independently rated by
credit rating agencies. We choose only to deal with those with a
minimum 'A' rating. We determine the credit quality for cash and
cash equivalents to be strong.
Other receivables
Other receivables are neither past due nor impaired. These are
primarily made up of sundry receivables, including employee-related
debtors and receivables in respect of distribution
arrangements.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group manages
liquidity risk by maintaining adequate reserves and working capital
credit facilities, and by continuously monitoring forecast and
actual cash flows. In March 2021, the Group terminated its existing
GBP25m multi-currency revolving credit facility with NatWest and
Lloyds which was due to run to November 2021. It is replaced by a
new multi-currency revolving credit facility with NatWest which
runs to March 2024 with the option to extend for two periods of one
year each. The new facility consists of a GBP10m committed facility
and an additional uncommitted GBP15m accordion option, both of
which can be used to cover the Group's working capital and general
corporate needs. As at 31 December 2020, the Group had cash of
GBP8.3m (2019: GBP9.3m) with a full undrawn loan facility of
GBP25.0m (2019: full undrawn loan facility of GBP25.0m).
The following tables detail the financial maturity for the
Group's financial liabilities:
Less than
Book value Fair value 1 year 2-5 years
GBPm GBPm GBPm GBPm
---------------------- ---------- ---------- --------- ---------
At 31 December 2020
Financial liabilities
Interest bearing 3.4 3.4 2.0 1.4
Non-interest bearing 7.5 7.5 7.5 -
---------------------- ---------- ---------- --------- ---------
10.9 10.9 9.5 1.4
---------------------- ---------- ---------- --------- ---------
At 31 December 2019
Financial liabilities
Interest bearing 4.3 4.3 2.1 2.2
Non-interest bearing 11.6 11.6 11.5 0.1
15.9 15.9 13.6 2.3
---------------------- ---------- ---------- --------- ---------
The Directors consider that book value is materially equal to
fair value.
The book value of primary financial instruments approximates to
fair value where the instrument is on a short maturity or where
they bear interest at rates that approximate to the market.
The following table details the level of fair value hierarchy
for the Group's financial asset and liabilities:
Financial Asset Financial Liabilities
Level 1 Level 3
Cash and bank balances Lease liabilities
Level 3 Trade payables
Trade receivables - net Accruals
Other receivables Provisions
Other payables
Borrowings*
*Borrowings are purely in relation to the Group's revolving
credit facility which is discussed above. The amount drawn down
from this facility at 31 December 2020 was GBPnil (2019:
GBPnil).
All trade and other payables are due in one year or less, or on
demand.
Interest rate risk
The Group has no significant interest-bearing assets but is
exposed to interest rate risk when it borrows funds at floating
interest rates through its revolving credit facility. Borrowings
issued at variable rates expose the Group to cash flow interest
rate risk. The Group evaluates its risk appetite towards interest
rate risks regularly to manage interest rate risk in relation to
its revolving credit facility if deemed necessary.
The Group did not enter any hedging transactions during the
current or prior year and as at 31 December 2020, the only floating
rate to which the Group is exposed was LIBOR. The Group's exposure
to interest rates on financial assets and financial liabilities is
detailed in the liquidity risk section of this note.
Interest rate sensitivity
The Group has exposure to interest rate risk, and sensitivity
analysis has been performed based on exposure to variable interest
rates at the reporting date.
If interest rates had been 50 basis points higher or lower and
all other variables were held constant, the Group's net profit
after tax would increase / decrease by GBPnil (2019: GBPnil) and
equity by GBPnil (2019: GBPnil)
Capital risk
The Group manages its capital to ensure that all entities in the
Group will be able to continue as a going concern while maximising
return to stakeholders, as well as sustaining the future
development of the business.
The capital structure of the Group consists of net debt/cash,
which includes cash and cash equivalents (note 17), and equity
attributable to the owners of the parent, comprising issued share
capital (note 23), other reserves and retained earnings. The Board
also considers the levels of own shares held for employee share
schemes, and the ability to issue new shares for acquisitions, in
managing capital risk in the business.
For the whole of 2020, the Group benefited from its banking
facilities, renewed in November 2019 which ran until November 2021
with an option to extend for a further 2 periods of 1 year each.
Interest was calculated on LIBOR plus a margin dependent on the
Group's net leverage position, which was re-measured quarterly in
line with covenant testing. The Group's borrowings were subject to
financial covenants tested quarterly. The principal financial
covenants under the facility were the ratio of net debt to Adjusted
EBITDA (see note 1(b) for explanation and reconciliation of
Adjusted EBITDA) would not exceed 2.5:1 and the ratio of EBITDA to
net finance charges would not be less than 4:1. In July 2020, the
Group agreed with the banks to waive leverage and interest cover
covenants up to, and including, the testing periods to 30 September
2021. This was subject to minimum liquidity tests which were
reported monthly. At no point during the year did the Group breach
its covenants or its minimum liquidity tests.
From March 2021, the Group benefits from a new banking facility
with NatWest, which features a committed GBP10m facility and an
additional uncommitted GBP15m accordion option, both of which can
be used to cover the Group's working capital and general corporate
needs. The facility is available until March 2024 with an option to
extend for a further two periods of one year each. Interest is
calculated on SONIA plus a margin dependent on the Group's net
leverage position, which is re-measured quarterly in line with
covenant testing. The Group's borrowings are subject to financial
covenants tested quarterly. The principal financial covenants under
the facility are that the ratio of net debt to Adjusted EBITDA (see
note 1 (b) for explanation and reconciliation of Adjusted EBITDA)
shall not exceed 2.5:1 and the ratio of EBITDA to net finance
charges shall not be less than 4:1.
Currency risk
Substantially all the Group's net assets are in the United
Kingdom. Most of the revenue and profits is generated in the United
Kingdom and consequently foreign exchange risk is limited. The
Group continues to monitor its exposure to currency risk,
particularly as the business expands into overseas territories such
as North America, however the results of the Group are not
currently considered to be sensitive to movements in currency
rates.
28 Pension schemes
The Group contributes to individual and collective money
purchase pension schemes in respect of Directors and employees once
they have completed the requisite period of service. The charge for
the year in respect of these defined contribution schemes is shown
in note 5. Included within other payables is an amount of GBP0.1m
(2019: GBP0.1m) payable in respect of the money purchase pension
schemes.
29 Capital commitments
At 31 December 2020, the Group had no capital commitments (2019:
GBPnil).
30 Related party transactions
Group
Key management compensation is disclosed in note 5. There were
no other material related party transactions for the Group in the
current or prior year.
Company
The Company had the following transactions with subsidiaries
during the year.
i) Interest
During the year, interest was recharged from subsidiary
companies as follows:
2020 2019
GBPm GBPm
--------------------- ---- ----
Net interest payable 0.6 1.7
--------------------- ---- ----
There were no borrowings at the year end.
The balances outstanding with subsidiary companies are disclosed
in notes 16 and 18.
ii) Dividends
During the year the Company received GBP40.0m (2019: GBPnil) of
dividends from its subsidiary, Centaur Communications Limited.
There were no other material related party transactions for the
Company in the current or prior year.
Audit exemption
For the year ended 31 December 2020, the Company has provided a
guarantee pursuant to sections 479A-C of Companies Act 2006 over
the liabilities of the following subsidiaries and, as such, they
are exempt from the requirements of the Act relating to the audit
of individual financial information, or preparation of individual
financial information, as appropriate, for this financial year.
Outstanding
Company liabilities
Name Number GBPm
---------------------------------- -------- ------------
Centaur Communications Limited 01595235 52.6
Chiron Communications Limited 01081808 60.9
E-consultancy.com Limited 04047149 8.2
Mayfield Publishing Limited 02034820 0.4
MarketMakers Incorporated Limited 05063707 2.2
Pro-Talk Limited 03939119 -
Taxbriefs Holdings Limited 03572069 -
Taxbriefs Limited 01247331 -
Thelawyer.com Limited 11491880 2.4
Xeim Limited 05243851 27.6
Your Business Magazine Limited 01707331 -
---------------------------------- -------- ------------
See note 13 for changes to subsidiary holdings during the
year.
31 Post balance date events
No material events have occurred after the reporting date.
FIVE YEAR RECORD (UNAUDITED)
Re-presented(2)
2016* 2017* 2018* 2019 2020
------------------------------------ ----- ----- ------ --------------- ------
Revenue (GBPm) 71.9 64.7 50.3 39.6 32.4
Operating loss (GBPm) (3.9) (0.3) (20.3) (7.8) (2.3)
Adjusted operating profit / (loss)
(GBPm) 9.1 4.1 (2.2) (1.2) -
Adjusted operating profit / (loss)
margin 13% 6% (4%) (3%) -
Loss before tax (GBPm) (4.4) (0.7) (20.5) (8.1) (2.6)
Adjusted profit / (loss) before tax
(GBPm) 8.6 3.7 (2.4) (1.5) (0.3)
Adjusted diluted EPS (pence) 4.5 1.8 (1.4) 0.3 0.3
Ordinary dividend per share (pence) 3.0 3.0 3.0 1.5 0.5
Net operating cash flow (GBPm) 14.0 12.1 5.6 4.7 2.1
Average permanent headcount (FTE) 554 589 758 317 282
Revenue per head (GBP'000) 131 110 66 125 115
----- ----- ------ --------------- ------
Re-presented(2)
2016* 2017* 2018* 2019 2020
Revenue by type GBPm GBPm GBPm GBPm GBPm
------------------------ ----- ----- ----- --------------- -----
Premium Content 20.9 19.1 14.4 14.4 13.2
Marketing Services - 1.9 4.5 4.3 2.9
Training and Advisory 5.1 8.0 8.0 7.6 8.5
Events 25.7 18.7 6.5 6.4 2.5
Marketing Solutions 15.7 9.3 4.6 4.6 4.2
Recruitment Advertising 4.5 3.5 2.7 2.3 1.1
Telemarketing Services - 4.2 9.6 - -
------------------------ ----- ----- ----- --------------- -----
71.9 64.7 50.3 39.6 32.4
----- ----- ----- --------------- -----
Re-presented(2)
2016* 2017* 2018* 2019 2020
Other GBPm GBPm GBPm GBPm GBPm
------------------------------------- ------ ------ ------ --------------- ------
Goodwill and other intangible assets 88.8 94.2 78.1 61.2 46.1
Other assets and liabilities (7.6) (13.4) (11.5) (9.4) (7.2)
------------------------------------- ------ ------ ------ --------------- ------
Net assets before net debt 81.2 80.8 66.6 51.8 38.9
Net (debt) / cash (14.1) 4.1 0.1 9.3 8.3
------------------------------------- ------ ------ ------ --------------- ------
Total equity 67.1 84.9 66.7 61.1 47.2
------ ------ ------ --------------- ------
(2) See note 1 (a) for description of the prior year
re-presentation
* 2016 - 2018 have not been re-presented with regards to
discontinued operations relating to the cessation of the
MarketMakers telemarketing business in 2020. 2019 has been
re-presented for discontinued operations in line with the
comparatives disclosed in this financial information.
Marketing and Advertising Solutions revenue was split into
Marketing Solutions and Recruitment Advertising in the current
year.
Directors, Advisers and Other Corporate Information
Company registration number
04948078
Incorporated / domiciled in
England and Wales
Registered office
Floor M
10 York Road
London
SE1 7ND
United Kingdom
Directors
Colin Jones (Chairman)
Swagatam Mukerji (Chief Executive Officer)
Simon Longfield (Chief Financial Officer)
William Eccleshare
Carol Hosey (appointed 5 February 2020)
Leslie-Ann Reed (appointed 1 March 2020)
Company Secretary
Helen Silver
Independent Auditor
Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
Registrars
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
External Lawyers
Dechert LLP
160 Queen Victoria Street
London
EC4V 4QQ
Brokers
Investec
N+1 Singer
[1] Re-presented for the closure of MarketMakers which is now
presented within discontinued operations.
[2] Adjusted EBITDA is adjusted operating profit before
depreciation and amortisation. Adjusted results exclude adjusting
items, such as exceptional items, including those detailed in note
4 of the financial information.
[3] See financial performance review for definition of adjusted
results and alternative performance measures
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END
FR FLFEAVIIRLIL
(END) Dow Jones Newswires
March 17, 2021 03:00 ET (07:00 GMT)
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