TIDMCTG
RNS Number : 6771M
Christie Group PLC
18 September 2023
18 September 2023
Christie Group plc
Interim Results for the six months ended 30 June 2023
Challenging H1 performance as PFS division is impacted by
decline in transactional volumes
Christie Group plc ('Christie Group' or the 'Group'), the
leading provider of Professional & Financial Services (PFS) and
Stock & Inventory Systems & Services (SISS) to the
hospitality, leisure, healthcare, medical, childcare &
education and retail sectors, today announces its Interim Results
for the six months ended 30 June 2023.
Overview
As reported in our most recent trading update, the Group
experienced a disappointing H1 as a result of delays in
transactions brokered by its agency and advisory business, Christie
& Co. This slowdown reflected lower activity levels and
sentiment in the wider market. While some uncertainty remains as to
the precise timing of transactions, the Group continues to expect a
more positive H2 trading performance.
Financial Headlines
-- Revenues down by 1.6% to GBP33.1m (2022: GBP33.7m),
principally due to a decline in transactional volumes in our agency
business
-- Operating loss of GBP1.4m (2022: GBP2.3m profit), as previously indicated
-- Employee costs up 8.0% to GBP25.2m (2022: GBP23.3m)
-- Other operating expenses up 15.8% to GBP9.4m (2022: GBP8.1m)
-- PFS revenues down by 8.1% to GBP20.4m (2022: GBP22.2m)
-- PFS operating loss of GBP0.4m compared to a GBP3.2m profit in H1 2022
-- SISS revenues up 11.1% to GBP12.8m (2022: GBP11.5m)
-- SISS operating loss of GBP1.0m (2022: GBP0.9m)
-- Borrowings reduced to GBP1.7m (2022: GBP5.4m) as CLBILS loan fully repaid
-- Pension liabilities reduced to GBP0.9m (2022: GBP8.0m) as
both defined benefit schemes remain in surplus
-- Cash and cash equivalents balance of GBP2.9m (2022: GBP6.2m)
-- Board declares an interim dividend of 0.5p; H1 2022: 1.25p per share
Operational Headlines
-- Transactional volumes decreased significantly in H1 of 2023
when compared to the previous two years
-- While transaction volumes during H1 have been disappointing,
our teams have been busy on a number of significant portfolio
assignments in the Dental, Healthcare, Hotels and Pubs sectors with
an encouraging number of exchanges having already occurred and more
anticipated in H2
-- More positive performances have been seen in the Valuation,
Business Appraisal and Finance Brokerage operations
-- Hospitality stocktaking business has continued its positive post-Covid recovery
-- Pharmacy and Supply Chain operations have traded well in H1
-- UK Retail stocktaking and visitor attraction businesses
require further revenue growth to achieve profitability
Current trading
-- We anticipate an improvement in transactional volumes by the
end of Q3 and into Q4, based on current levels of deal activity and
our pipelines of instructed work, but uncertainty remains as to the
timing of transactions which will exchange in 2023 as opposed to
2024
-- Early H2 performance in our valuation and appraisal
operations and our finance brokerage business have been strong
-- Within our SISS division, our hospitality, pharmacy, supply
chain and Benelux operations are all trading positively, while UK
retail stocktaking remains challenging
-- H2 has begun more positively for our visitor attraction
software business with a number of further new business wins and
increasing levels of upsells to existing clients.
Dan Prickett, Chief Executive, commented:
"An undoubtedly disappointing H1 performance which resulted in
an operating loss as was previously indicated in our 7(th) August
trading update. This was borne out of changing economic conditions
which have served to frustrate transactional activity. Nonetheless,
we have seen encouraging performance so far this year in other
parts of the Group, and we are now free of pension deficit repair
obligations and term loan repayments, with a positive cash balance.
We anticipate more positive transactional activity levels resuming
once the market has adjusted to changes in interest rates and
inflation."
Enquiries:
Christie Group plc
Daniel Prickett
Chief Executive 07885 813101
Simon Hawkins
Group Finance Director 07767 354366
Shore Capital
Patrick Castle/Iain Sexton
Nominated Adviser & Broker 020 7408 4090
Notes to Editors:
Christie Group plc (CTG.L), quoted on AIM, is a leading
professional business services group with 38 offices across the UK
and Europe, catering to its specialist markets in the hospitality,
leisure, healthcare, medical, childcare & education and retail
sectors.
Christie Group operates in two complementary business divisions:
Professional & Financial Services (PFS) and Stock &
Inventory Systems & Services (SISS). These divisions trade
under the brand names: PFS - Christie & Co, Pinders, Christie
Finance and Christie Insurance: SISS - Orridge, Venners and
Vennersys.
Tracing its origins back to 1846, the Group has a
long-established reputation for offering valued services to client
companies in agency, valuation services, investment, consultancy,
project management, multi-functional trading systems and online
ticketing services, stock audit and inventory management. The
diversity of these services provides a natural balance to the
Group's core agency business.
The information contained within this announcement is deemed by
the Company to constitute inside information for the purposes of
Article 7 of the UK Market Abuse Regulation (EU) No. 596/2014 which
is part of the UK law by virtue of the European Union (Withdrawal)
Act 2018.
For more information, please go to
https://www.christiegroup.com
Chief Executive's review
As reported in our most recent trading update, the Group
experienced a disappointing H1 as a result of delays in
transactions brokered by its agency and advisory business, Christie
& Co. This slowdown in revenue reflected lower activity levels
and sentiment in the wider market and was as already reported by a
number of competitors. T he Group continues to expect a more
positive H2 trading performance, as the market begins to adapt to
rising costs of debt. Nonetheless, uncertainty remains on the
precise timing of transactions reaching contractual exchange and
the degree to which transactions currently scheduled for 2023
exchange do reach that stage will be key to our full year outcome
and the strength of our H2 performance.
Financial Review
The Group reported revenues of GBP33.1m (2022: GBP33.7m) and an
operating loss of GBP1.4m (2022: GBP2.3m operating profit). The
GBP3.7m deterioration in H1 profitability from a year earlier was
attributable almost entirely to the changed performance of the
Professional and Financial Services ("PFS") division, which saw
revenues fall by 8.1% to GBP20.4m (2022: GBP22.2m) and the
operating result by GBP3.6m generating a H1 operating loss of
GBP0.4m (2022: GBP3.2m profit).
The Stock & Inventory Systems and Services ("SISS") division
saw revenues increase by 11.1% to GBP12.8m (2022: GBP11.5m) but
delivered an operating loss of GBP1.0m (2022: GBP0.9m), where cost
increases were not matched by the level of revenue growth.
Employee benefit expenses increased by GBP1.9m to GBP25.2m from
GBP23.3m reflecting headcount recruitment in those areas seen as
medium and long term growth opportunities in our PFS division,
while also reflecting strong inflationary pressures on salaries in
a competitive marketplace for our talent and the need to retain the
sector-leading expertise in our teams. At the same time, increased
activity levels in our stocktaking businesses have required
additional manning to facilitate that work.
Other operating expenses also increased from GBP8.1m to GBP9.4m,
with increased expenditure on marketing, PR and insurance cost
inflation.
Despite the H1 trading performance, the Group's balance sheet
debt position has improved from a year ago. The Group ended H1
having fully repaid the GBP6.0m Coronavirus Large Business
Interruption Loan it borrowed in June 2020 and no longer has any
term debt on its balance sheet.
The Group's two defined benefit pension schemes, which moved
into surplus during H2 of 2022, remained in significant surplus at
30(th) June 2023, meaning the Group has no deficit repair payment
obligations to meet. Deficit repair payments have represented a
considerable use of Group cash since 2006.
The combination of H1 trading performance and commissions and
bonuses payable in relation to 2022's performance, mean that the
Group's cash balance had decreased by the end of the period to
GBP3.6m (2022: GBP8.6m). The Group maintains all of its banking
facilities and traditionally experiences a stronger operating
cashflow inflow during H2.
In seeking to balance its recognition of a disappointing H1
performance with its current expectation of a more positive H2
trading performance, the Board has declared an interim dividend of
0.5p per share (H1 2022: 1.25p) which will be paid on 3 November
2023 to shareholders on the register on 6 October 2023.
Professional & Financial Services Division.
Transactional volumes decreased significantly in H1 of 2023
compared to the activity levels experienced in the previous two
years, as deal times lengthened reflecting the increased
complexities of the economic environment, higher financing costs
and inflationary pressures on businesses. These factors were
experienced across the range of sectors in which Christie & Co
operate.
Notwithstanding, Christie & Co's team have been busy on a
number of larger portfolio assignments in the Dental, Healthcare,
Hotels and Pubs sectors. Exchanges on those portfolio assignments
have already occurred with more expected to take place during H2
and potentially into the early part of 2024. As previously
indicated, those H2 revenue expectations have already been revised
to reflect a change in disposal strategy by certain vendors who
have opted to retain a number of assets in the near-term, where
previously Christie & Co had been mandated to market the full
estate.
Internationally, Christie & Co have been particularly active
in France during H1 of 2023 with a number of Hotel sales completed
during the period, and the team completed a successful operator
search in Venice in relation to the historical Hotel
Bonvecchiati.
Towards the end of H1, Christie & Co also signalled its
expansion ambitions on the continent by appointing a Head of
Healthcare in Germany as part of a wider strategy looking beyond a
single-sector focus in mainland Europe.
The Group's UK advisory teams have also been busy and are
expected to remain so through H2. Valuation enquiry and instruction
levels have remained robust in Christie & Co, and Pinders' own
business appraisal activity levels have been very encouraging after
a slower start to the year with its own appraisal pipelines
reaching record levels in the early part of H2.
The Group's finance brokerage operation, Christie Finance, also
experienced a slower start to the year but the uptick in activity
levels since then has been very positive. Lender underwriting has
involved increased levels of due diligence which has slowed the
process for loan offers being advanced. Nonetheless, the aggregate
value of loan offers secured during H1 by Christie Finance
increased by 16% and the business continued to invest in growing
its headcount of brokers, most notably in its growing Unsecured
division where the aggregate value of instructions increased
year-on-year by 120%.
Christie Finance ended H1 with a total pipeline across its Core,
Debt Advisory and Unsecured divisions up by 38% on a year earlier,
and up 26% on 31(st) December 2022.
Stock & Inventory Systems & Services
The Group's Hospitality stock audit business, Venners, has
continued its post-Covid recovery with a positive and encouraging
H1 performance. Strong demand for its services has been reflected
with continuing high levels of successful new business quotes, and
despite a continuing challenging recruitment market, the business
has been more successful in growing and retaining its stock auditor
headcount than during 2022. Alongside its core stock audit
activities, the business has also delivered successful outcomes for
clients through its Compliance and Consultancy services,
identifying over GBP0.5m of supply chain errors for one client.
Orridge, the Group's retail stocktaking operation which operates
in the UK and Europe, has had a mixed performance during the
period. Challenges remain in UK retail stocktaking, where the
pipeline of new business opportunities is H2 weighted and a
long-standing and significant client entered administration in
H2.
Conversely, the Pharmacy and Supply Chain operations within
Orridge have both performed ahead of expectations in H1 and further
growth opportunities exist in both. On the continent, our Benelux
operation delivered a profitable H1 despite pressures on direct
costs and productivity from inflationary pressures and stocktaker
churn respectively, while our German operation, with a seasonal H2
weighting to its own business, has a positive outlook for the
months ahead.
Our visitor attraction software-as-a-service ("SaaS") business,
Vennersys, has continued to invest in the development of its
functionally-rich product. The volume of new client wins and
installations in H1 have been solid and much improved on the same
period in 2022, but with lower average revenue per client than
anticipated resulting from reduced online purchasing by client's
customers, a smaller client hardware profile and fewer visitors.
The business has also seen H1 2023 v H1 2022 revenues impacted by
some client attrition.
Outlook
The Group has experienced a challenging H1 as a result of market
conditions, having taken the strategic decision last year to
continue to invest in maintaining and growing its sector specialist
teams. The delays in transactional deals seen in H1 have continued
into the summer period, and the full year outcome will be
determined by the number of deals which can be brought to
contractual exchange in the remaining four months of 2023. As
vendors and buyers adjust to the changed economic environment, we
anticipate more normalised levels of activity resuming.
Transactional pipelines have recovered to levels similar to a
year ago. Within these pipelines, at 30(th) June the number of
deals in solicitors' hands was up markedly on six months
earlier.
Distressed activity is showing some signs of being on the
increase, but still remains at relatively modest levels when
compared historically. Our agency and advisory teams are ideally
placed to support owners and operators in our specialist sectors,
who are seeking to either expand existing portfolios, or dispose of
non-core and underperforming assets.
In our SISS division we have seen encouraging, profitable H1
performances from our Hospitality, Pharmacy and Supply Chain
stocktaking operations. Further growth is required in our Retail
stocktaking businesses and our software business, the latter of
which has begun in H2 well with a number of new client wins and
increased success in upselling to existing clients.
I am grateful to our excellent and committed teams across all of
our businesses, who have worked diligently throughout H1 and who
will continue to do so to deliver the best possible outcome for the
year.
We look forward to the remainder of 2023 and beyond with a
continuing confidence in the medium and long term potential of the
Group.
Dan Prickett
Chief Executive Officer
Independent Review Report to Christie Group plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six-month period ended 30 June 2023 which comprises the Interim
Consolidated Income Statement, the Interim Consolidated Statement
of Comprehensive Income, the Interim Consolidated Statement of
Financial Position, the Interim Consolidated Statement of Cash
Flows, the Interim Consolidated Statement of Changes in Equity and
the related Notes 1 to 16.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2023 is not prepared, in all material respects, in accordance
with International Accounting Standard ('IAS') 34 "Interim
Financial Reporting", as adopted for use in the United Kingdom and
the AIM Rules issued by the London Stock Exchange.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued for use in the United Kingdom. A review of interim
financial information consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
As disclosed in Note 2, the annual financial statements of the
group are prepared in accordance with International Financial
Reporting Standards adopted for use in the United Kingdom ("UK
adopted IFRS"). The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard ('IAS') 34
"Interim Financial Reporting", as adopted for use in the United
Kingdom.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis of Conclusion
section of this report, nothing has come to our attention to
suggest that management have inappropriately adopted the going
concern basis of accounting or that management have identified
material uncertainties relating to going concern that are not
appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with this ISRE, however future events or conditions may
cause the entity to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the with International
Accounting Standard ('IAS') 34 "Interim Financial Reporting", as
adopted for use in the United Kingdom and the AIM Rules issued by
the London Stock Exchange.
In preparing the half-yearly financial report, the directors are
responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statement in the half-yearly financial report. Our
conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
This report is made solely to the Company in accordance with
guidance contained in ISRE (UK) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. Our review work has been
undertaken so that we might state to the company those matters we
are required to state to them in a review report and for no other
purposes. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company, for our
work, for this report, or for the conclusions we have formed.
MHA, Statutory Auditor
Milton Keynes, United Kingdom
15 September 2023
MHA is the trading name of MacIntyre Hudson LLP, a limited
liability partnership in England and Wales (registered number
OC312313)
Consolidated interim income statement
Half year Half year
to 30 June to 30 June
Year ended
31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Note (Unaudited) (Unaudited) (Audited)
------------------------------------ ------ -------------- ------------- -------------
Revenue 4 33,124 33,653 69,192
Other income - government grants - - 34
Employee benefit expenses (25,159) (23,289) (47,390)
------------------------------------ ------ -------------- ------------- -------------
7,965 10,364 21,836
Other operating expenses (9,363) (8,087) (16,384)
------------------------------------ ------ -------------- ------------- -------------
Operating (loss)/profit (1,398) 2,277 5,452
Finance costs (527) (548) (1,077)
Finance income 62 - 49
Total finance costs (465) (548) (1,028)
------------------------------------ ------ -------------- ------------- -------------
(Loss)/profit before tax (1,863) 1,729 4,424
Taxation 5 470 (333) (1,213)
------------------------------------ ------ -------------- ------------- -------------
(Loss)/profit for the period after
tax (1,393) 1,396 3,211
------------------------------------ ------ -------------- ------------- -------------
Earnings per share attributable to equity holders - pence
Basic 6 (5.41) 5.36 12.32
Diluted 6 (5.41) 5.26 12.15
--------- ------- ----- ------
(Loss)/profit for the period after tax is wholly attributable to
equity shareholders of the parent.
All amounts derive from continuing operations.
Consolidated interim statement of comprehensive income
Half year Half year
to 30 June to 30 June
Year ended
31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
--------------------------------------------- ---- -------------- ------------- -------------
(Loss)/profit for the period after
tax (1,393) 1,396 3,211
--------------------------------------------------- -------------- ------------- -------------
Other comprehensive (losses)/income:
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translating
foreign operations (11) 75 (119)
--------------------------------------------------- -------------- ------------- -------------
Net other comprehensive (losses)/income
to be reclassified to profit or loss
in subsequent periods (11) 75 (119)
--------------------------------------------------- -------------- ------------- -------------
Items that will not be reclassified
to profit or loss:
Re-measurement gains on defined benefit
plans 5,340 6,338 20,616
Effect of asset ceiling (5,332) (5,517) (13,896)
--------------------------------------------------- -------------- ------------- -------------
8 821 6,720
-------------------------------------------------- -------------- ------------- -------------
Tax effect on defined benefit plans (2) (1,585) (3,759)
Tax effect of asset ceiling - 1,380 1,748
--------------------------------------------------- -------------- ------------- -------------
(2) (205) (2,011)
-------------------------------------------------- -------------- ------------- -------------
Net other comprehensive income not
being reclassified to profit or loss
in subsequent periods 6 616 4,709
--------------------------------------------------- -------------- ------------- -------------
Other comprehensive income for the
period net of tax 6 691 4,590
--------------------------------------------------- -------------- ------------- -------------
Total comprehensive (losses)/income
for the period (1,398) 2,087 7,801
--------------------------------------------------- -------------- ------------- -------------
Total comprehensive (losses)/income for the period is wholly
attributable to equity shareholders of the parent.
Consolidated interim statement of changes in shareholders'
equity
Cumulative
Share Other translation Retained Total
capital reserves reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- --------- ---------- ------------- ---------- ---------
Half year to 30 June 2023 (unaudited)
--------------------------------------- --------- ---------- ------------- ---------- ---------
Balance at 1 January 2023 531 5,128 567 2,170 8,396
--------------------------------------- --------- ---------- ------------- ---------- ---------
Loss for the period after tax - - - (1,393) (1,393)
Other comprehensive (losses)/income - - (11) 6 (5)
Total comprehensive losses for
the period - - (11) (1,387) (1,398)
Movement in respect of employee
share scheme - (506) - - (506)
Employee share option scheme:
- value of services provided - 34 - - 34
Dividends payable - - - (663) (663)
Transfer from share option reserve - (896) - 896 -
--------------------------------------- --------- ---------- ------------- ---------- ---------
Transactions with shareholders - (1,368) - 233 (1,135)
--------------------------------------- --------- ---------- ------------- ---------- ---------
Balance at 30 June 2023 531 3,760 556 1,016 5,863
--------------------------------------- --------- ---------- ------------- ---------- ---------
Half year to 30 June 2022 (unaudited)
Balance at 1 January 2022 531 5,246 686 (4,906) 1,557
--------------------------------------- --------- ---------- ------------- ---------- ---------
Profit for the period after tax - - - 1,396 1,396
Other comprehensive income - - 75 616 691
Total comprehensive income for
the period - - 75 2,012 2,087
Movement in respect of employee
share scheme - 30 - - 30
Employee share option scheme:
- value of services provided - (30) - - (30)
Dividends payable - - - (520) (520)
--------------------------------------- --------- ---------- ------------- ---------- ---------
Transactions with shareholders - - - (520) (520)
--------------------------------------- --------- ---------- ------------- ---------- ---------
Balance at 30 June 2022 531 5,246 761 (3,414) 3,124
--------------------------------------- --------- ---------- ------------- ---------- ---------
Year ended 31 December 2022 (audited)
----------------------------------------------------------------------------------------------------
Balance at 1 January 2022 531 5,462 686 (4,906) 1,557
--------------------------------------- --------- ---------- ------------- ---------- ---------
Profit for the year after tax - - - 3,211 3,211
Other comprehensive income - - (119) 4,709 4,590
--------------------------------------- --------- ---------- ------------- ---------- ---------
Total comprehensive (losses)/income
for the year - - (119) 7,920 7,801
--------------------------------------- --------- ---------- ------------- ---------- ---------
Movement in respect of employee
share scheme - (184) - - (184)
Employee share option scheme:
- value of services provided - 66 - - 66
Dividends paid - - - (844) (844)
--------------------------------------- --------- ---------- ------------- ---------- ---------
Transactions with shareholders - (118) - (844) (962)
--------------------------------------- --------- ---------- ------------- ---------- ---------
Balance at 31 December 2022 531 5,128 567 2,170 8,396
--------------------------------------- --------- ---------- ------------- ---------- ---------
Consolidated interim statement of financial position
At 31 December
2022
At 30 June At 30 June GBP'000
2023 2022
GBP'000 GBP'000 (Audited)
(Unaudited) (Unaudited)
Note
-------------------------------- ---------- ------------------ ----------------- ---------------
Assets
Non-current assets
Intangible assets - Goodwill 1,819 1,819 1,843
Intangible assets - Other 1,138 1,032 1,104
Property, plant and equipment 1,167 1,289 1,178
Right of use assets 6,049 4,962 6,397
Deferred tax assets 2,024 2,927 1,565
Other receivables 2,811 2,555 2,811
-------------------------------- ---------- ------------------ ----------------- ---------------
15,008 14,584 14,898
-------------------------------- ---------- ------------------ ----------------- ---------------
Current assets
Inventories 28 23 25
Trade and other receivables 8 12,818 13,455 12,437
Current tax assets 399 876 238
Cash and cash equivalents 13 3,646 8,565 8,839
-------------------------------- ---------- ------------------ ----------------- ---------------
16,891 22,919 21,539
-------------------------------- ---------- ------------------ ----------------- ---------------
Total assets 31,899 37,503 36,437
-------------------------------- ---------- ------------------ ----------------- ---------------
Equity
Capital and reserves attributable to the Company's
equity holders
Share capital 9 531 531 531
Other reserves 3,760 5,246 5,128
Cumulative translation reserve 556 761 567
Retained earnings 1,016 (3,414) 2,170
-------------------------------- ---------- ------------------ ----------------- ---------------
Total equity 5,863 3,124 8,396
-------------------------------- ---------- ------------------ ----------------- ---------------
Liabilities
Non-current liabilities
Trade and other payables 620 625 620
Retirement benefit obligations 10 915 7,989 953
Lease liabilities 8,295 7,401 8,731
Provisions 1,410 1,344 1,383
-------------------------------- ---------- ------------------ ----------------- ---------------
11,240 17,359 11,687
-------------------------------- ---------- ------------------ ----------------- ---------------
Current liabilities
Trade and other payables 11 10,271 9,227 11,463
Current tax liabilities 359 220 840
Borrowings 1,707 5,409 1,623
Lease liabilities 1,313 1,048 1,297
Provisions 1,146 1,116 1,131
-------------------------------- ---------- ------------------ ----------------- ---------------
14,796 17,020 16,354
-------------------------------- ---------- ------------------ ----------------- ---------------
Total liabilities 26,036 34,379 28,041
-------------------------------- ---------- ------------------ ----------------- ---------------
Total equity and liabilities 31,899 37,503 36,437
-------------------------------- ---------- ------------------ ----------------- ---------------
Consolidated interim statement of cash flows
Half year
to 30 June
Year ended
Half year 31 December
to 30 June 2022 2022
2023 GBP'000 GBP'000
GBP'000
Note (Unaudited) (Unaudited) (Audited)
------------------------------------------- ------ -------------- ------------- -------------
Cash flow from operating activities
Cash (used in)/generated from operations 12 (2,769) (58) 6,306
Interest paid (528) (496) (975)
Tax paid (664) (9) (200)
------------------------------------------- ------ -------------- ------------- -------------
Net cash (used in)/generated from
operating activities (3,961) (563) 5,131
------------------------------------------- ------ -------------- ------------- -------------
Cash flow from investing activities
Purchase of property, plant and equipment (251) (202) (334)
Proceeds from sale of property, plant
and equipment - - 1
Interest received 62 - 49
Intangible asset expenditure (233) (185) (454)
Net cash used in investing activities (422) (387) (738)
------------------------------------------- ------ -------------- ------------- -------------
Cash flow from financing activities
Repayment of bank borrowings (1,000) (1,000) (2,000)
Proceeds from invoice discounting 316 454 55
Repayment of lease liabilities (898) (488) (925)
Dividends paid - - (844)
Net cash used in financing activities (1,582) (1,034) (3,714)
------------------------------------------- ------ -------------- ------------- -------------
Net (decrease)/increase in cash (5,965) (1,984) 679
Cash and cash equivalents at beginning
of period 8,839 8,167 8,167
Exchange gains/(losses) on euro bank
accounts 4 (5) (7)
------------------------------------------- ------ -------------- ------------- -------------
Cash and cash equivalents at end
of period 13 2,878 6,178 8,839
------------------------------------------- ------ -------------- ------------- -------------
Notes to the consolidated interim financial statements
1. General information
Christie Group plc is a public limited company incorporated in
and operating from England. The Company's ordinary shares are
traded on the AIM Market operated by the London Stock Exchange.
Christie Group plc is the parent undertaking of a group of
companies covering a range of related activities. These fall into
two divisions - Professional & Financial Services and Stock
& Inventory Systems & Services. Professional &
Financial Services principally covers business valuation,
consultancy & agency, business mortgages & insurance
services and business appraisal. Stock & Inventory Systems
& Services covers stock audit & counting, consulting,
compliance, inventory preparation & valuation and hospitality
& software solutions.
2. Basis of preparation
The interim financial statements have been prepared in
accordance with International Accounting Standard ('IAS') 34
"Interim Financial Reporting", as adopted for use in the United
Kingdom and the accounting policies applied in the financial
statements for the year ended 31 December 2022. Taxes on income in
the interim periods are accrued using the effective tax rate that
would be applicable to expected total annual earnings.
There are no new standards, amendments or interpretations that
have been published and are mandatory from 1 January 2023 that have
a material effect on the 31 December 2023 accounts.
Going concern
Having reviewed the Group and Company's detailed budgets,
projections and funding requirements to 31 December 2024, taking
account of reasonable possible changes in trading performance over
this period, the Directors believe they have reasonable grounds for
stating that the Group and Company have adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, the Directors continue to adopt the going concern
basis in preparing these interim accounts .
Non-statutory accounts
These consolidated interim financial statements have been
prepared in accordance with IAS 34 'Interim Financial Reporting'.
The statutory accounts for the year ended 31 December 2022 have
been delivered to the Registrar of Companies. The auditors reported
on these accounts reported the following:
(1) their report was unqualified;
(2) did not contain a statement under either section 498(2) or section 498(3) of the Companies
Act 2006; and
(3) did not include references to any matters to which the auditor drew attention by way of
emphasis.
The financial information for the periods ended 30 June 2023 and
30 June 2022 is unaudited.
3. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will by definition, seldom equal
the related actual results. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are discussed below.
(a) Estimated impairment of goodwill and investments
Goodwill and investments are subject to an impairment review
both annually and when there are indications that the carrying
value may not be recoverable. The recoverable amounts of
cash-generating units have been determined based on value-in-use
calculations.
(b) Retirement benefit obligations
The assumptions used to measure the expense and liabilities
related to the Group's defined benefit pension plans are reviewed
annually by professionally qualified, independent actuaries,
trustees and management as appropriate. Management base their
assumptions on their understanding and interpretation of applicable
scheme rules which prevail at the statement of financial position
date. The measurement of the expense for a period requires
judgement with respect to the following matters, among others:
- the probable long-term rate of increase in pensionable pay;
- the discount rate; and
- the estimated life expectancy of participating members.
The assumptions used by the Group, may differ materially from
actual results, and these differences may result in a significant
impact on the amount of pension expense recorded in future periods.
In accordance with IAS 19, the Group recognises all actuarial gains
and losses immediately in other comprehensive income.
Where the present value of the minimum funding contributions
exceeds the present value of the defined benefit obligation and the
amounts are not available as a refund or reduction in future
payments, the Company will adjust the retirement benefit obligation
to match the present value of the minimum funding contributions.
The liability recognised in the Statement of Financial Position,
will reflect the present value of the minimum funding
contributions. A corresponding charge will be recognised in other
comprehensive income, as 'effect of asset ceiling' in the period
which they arise.
Critical accounting judgements and assumptions
The critical judgements made in the process of applying the
Group's accounting policies during the year that have the most
significant effect on the amounts recognised in the financial
statements are set out below.
(a) Deferred taxation
Deferred tax assets are recognised to the extent that the Group
believes it is probable that future taxable profit will be
available against which temporary timing differences and losses
from previous periods can be utilised. Management judgement is
required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and the level of future
taxable profits together with future tax planning strategies.
(b) Revenue recognition
In determining the amount to be recognised on incomplete
contracts it is necessary to estimate the stage of completion. An
element of judgement and estimate is inherent in this process.
3. Critical accounting estimates and judgements (continued)
(c) Property, plant and equipment
Depreciation is derived using estimates of its expected useful
life and residual value, which are reviewed annually. Management
determines useful lives and residual values based on experience
with similar assets.
(d) Leases - estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in
the lease. Therefore, it uses its incremental borrowing rate (IBR)
to measure lease liabilities. The IBR therefore reflects what the
Group 'would have to pay', which requires an estimate when no
observable rates are available.
4. Segment information
The Group is organised into two main business segments:
Professional & Financial Services (PFS) and Stock &
Inventory Systems & Services (SISS).
The segment results for the period ended 30 June 2023 are as
follows:
PFS SISS Other Group
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ---------- ---------- ---------- ----------
Total gross segment
revenue 20,393 12,789 - 33,182
Inter-segment revenue (58) - - (58)
----------------------- ---------- ---------- ---------- ----------
Revenue 20,335 12,789 - 33,124
----------------------- ---------- ---------- ---------- ----------
Operating loss (384) (1,014) - (1,398)
Finance costs (178) (101) (186) (465)
----------------------- ---------- ---------- ---------- ----------
Loss before tax (562) (1,115) (186) (1,863)
Taxation 470
----------------------- ---------- ---------- ---------- ----------
Loss for the period after tax (1,393)
----------------------------------- ---------- ---------- ----------
The segment results for the period ended 30 June 2022 are as
follows:
PFS SISS Other Group
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ---------- ---------- ---------- ----------
Total gross segment
revenue 22,196 11,512 1,904 35,612
Inter-segment revenue (55) - (1,904) (1,959)
------------------------- ---------- ---------- ---------- ----------
Revenue 22,141 11,512 - 33,653
------------------------- ---------- ---------- ---------- ----------
Operating profit/(loss) 3,211 (934) - 2,277
Finance costs (284) (112) (152) (548)
------------------------- ---------- ---------- ---------- ----------
Profit/(loss) before
tax 2,927 (1,046) (152) 1,729
Taxation (333)
------------------------- ---------- ---------- ---------- ----------
Profit for the period after tax 1,396
------------------------------------- ---------- ---------- ----------
4. Segment information (continued)
The segment results for the year ended 31 December 2022 are as
follows:
PFS SISS Other Group
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ---------- ---------- ---------- ----------
Total gross segment
revenue 47,487 21,815 - 63,902
Inter-segment revenue (110) - - (110)
------------------------- ---------- ---------- ---------- ----------
Revenue 47,377 21,815 - 69,192
------------------------- ---------- ---------- ---------- ----------
Operating profit/(loss) 7,570 (2,118) - 5,452
Finance costs (554) (292) (182) (1,028)
------------------------- ---------- ---------- ---------- ----------
Profit/(loss) before
tax 7,016 (2,410) (182) 4,424
Taxation (1,213)
------------------------- ---------- ---------- ---------- ----------
Profit for the year after tax 3,211
------------------------------------- ---------- ---------- ----------
Revenue recognised in the period has been derived from the
provision of services provided when the performance obligation has
been satisfied.
5. Taxation
Deferred tax assets have been recognised in respect of tax
losses and other temporary differences giving rise to deferred tax
assets where it is probable that these assets will be
recovered.
6. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period, which
excludes the shares held in the Employee Share Ownership Plan
(ESOP) trust.
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares, once
performance conditions are met. The Company has only one category
of potential dilutive ordinary shares: share options.
The calculation is performed for the share options to determine
the number of shares that could have been issued at fair value
(determined as the average annual market share price of the
Company's shares) based on the monetary value of the subscription
rights attached to outstanding share options. The number of shares
calculated as above is compared with the number of shares that
would have been issued assuming the exercise of the share
options.
Half year
to Half year Year ended
30 June to 31 December
2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------------- ---------- -------------- -------------
(Loss)/profit attributable to the
equity holders (1,393) 1,396 3,211
----------------------------------- ---------- -------------- -------------
6. Earnings per share (continued) 30 June 31 December
2023 30 June 2022 2022
Thousands Thousands Thousands
---------------------------------------- ----------- ------------- --------------
Weighted average number of ordinary
shares in issue 25,725 26,065 26,062
Adjustment for share options 373 483 361
---------------------------------------- ----------- ------------- --------------
Weighted average number of ordinary
shares for diluted earnings per share 26,098 26,548 26,423
---------------------------------------- ----------- ------------- --------------
30 June 31 December
2023 30 June 2022 2022
pence pence Pence
---------------------------------------- ----------- ------------- --------------
Basic earnings per share (5.41) 5.36 12.32
Diluted earnings per share (5.41) 5.26 12.15
---------------------------------------- ----------- ------------- --------------
7. Dividends
A final dividend in respect of 2022 of 2.50p per share,
amounting to a dividend of GBP663,000, was proposed by the
directors and approved by the shareholders at the Annual General
Meeting on 14 June 2023, with the funds paid to the registrar on 3
July 2023. The funds were transferred to shareholders on 7 July
2023.
An interim dividend in respect of 2023 of 0.50p per share,
amounting to a dividend of GBP133,000, was declared by the
directors at their meeting on 12 September 2023. These financial
statements do not reflect this dividend payable.
The dividend of 0.50p per share will be payable to shareholders
on the record on 6 October 2023. The dividend will be paid on 3
November 2023.
As at the 31 December 2022, the parent company had distributable
reserves of GBP10,069,000.
8. Trade and other receivables
Half year to Half year to Year ended
30 June 2023 30 June 2022 31 December 2022
GBP'000 GBP'000 GBP'000
----------------------------------------------- -------------- -------------- ------------------
Trade receivables 8,111 8,956 6,945
Less: provision for impairment of receivables (733) (629) (454)
Work in progress 1,631 2,007 1,364
Contract assets 400 466 198
Other debtors 1,110 1,228 1,296
Prepayments 2,299 1,427 3,088
12,818 13,455 12,437
----------------------------------------------- -------------- -------------- ------------------
The fair value of trade and other receivables approximates to
the carrying value as detailed above.
9. Share capital
30 June 2023 30 June 2022 31 December
2022
Ordinary shares of 2p each Number GBP'000 Number GBP'000 Number GBP'000
-------------------------------- ----------- -------- ----------- -------- ----------- --------
Allotted and fully paid:
At beginning and end of period 26,526,729 531 26,526,729 531 26,526,729 531
-------------------------------- ----------- -------- ----------- -------- ----------- --------
The Company has one class of ordinary shares which carry no
right to fixed income.
Investment in own shares
The Group has established an Employee Share Ownership Plan
(ESOP) trust to meet its future contingent obligations under the
Group's share option schemes. The ESOP purchases shares in the
market for distribution at a later date in accordance with the
terms of the Group's share option schemes. The rights to dividend
on the shares held have been waived.
10. Retirement benefit obligations
The Group operates two defined benefit schemes (closed to new
members) providing pensions on final pensionable pay. The
contributions are determined by qualified actuaries based on
triennial valuations using the projected unit method.
When a member retires, the pension and any spouse's pension is
either secured by an annuity contract or paid from the managed
fund. Assets of the schemes are reduced by the purchase price of
any annuity purchase and the benefits no longer regarded as
liabilities of the scheme.
The defined benefit obligation as at 30 June 2023 is calculated
on a year-to-date basis, using the latest actuarial valuation as at
30 June 2023. There have been no significant market fluctuations
and significant one-off events, such as plan amendments,
curtailments and settlements that have resulted in an adjustment to
the actuarially determined pension cost since the end of the prior
financial year. The defined benefit plan assets have been updated
to reflect their market value at 30 June 2023.
The amounts recognised in the statement of comprehensive income
and the movement in the liability recognised in the statement of
financial position have been based on the forecast position for the
year ended 31 December 2023 after adjusting for the actual
contributions to be paid in the period.
The obligation outstanding of GBP915,000 (30 June 2022:
GBP7,989,000; 31 December 2022: GBP953,000) includes GBP915,000 (30
June 2022: GBP1,100,000; 31 December 2022: GBP953,000) payable to
David Rugg by Christie Group plc. The movement in the pension
liability attributable to David Rugg's pension arises from a change
in the actuarial assumptions used and the discount rate applied.
There have been no changes to the amounts payable to Mr Rugg.
The terms of the schemes are that the Group does not have an
unconditional right to a refund of any surplus. Therefore there is
an asset ceiling that prevents an asset being recognised. The asset
ceiling at 30 June 2023 was GBP20.0m unrecognised asset (30 June
2022: GBP5.5m, 31 December 2022: GBP13.9m).
The Group continues to work closely with the Trustee in managing
pension risks, with the defined benefit schemes closed to new
members since 1999 & 2000.
In addition, the Group operates a defined contribution scheme
for participating employees. Payments to the scheme are charged as
an employee benefit as they fall due. The Group has no further
payment obligations once the contributions have been paid.
10. Retirement benefit obligations (continued)
The movement in the liability recognised in the statement of
financial position is as follows:
Half year Year ended
Half year to to 31 December
30 June 2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
-------------------------------------------------- -------------- -------------
Beginning of the period 953 8,997 8,997
Expenses included in the employee benefit
expense - 215 201
Contributions paid - (425) (1,567)
Finance costs - 52 102
Pension paid (30) (29) (60)
Actuarial gains recognised (8) (821) (6,720)
End of the period 915 7,989 953
------------------------------------------- ----- -------------- -------------
The amounts recognised in the income statement and statement of
comprehensive income are as follows:
Half year Year ended
Half year to to 31 December
30 June 2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------------- -------------
Current service cost 83 215 201
Total included in employee benefit
expenses 83 215 201
--------------------------------------- -------- -------------- -------------
Net interest cost - 52 102
--------------------------------------- -------- -------------- -------------
Total included in finance costs - 52 102
--------------------------------------- -------- -------------- -------------
Actuarial gains 5,340 6,338 20,616
Effect of asset ceiling (5,332) (5,517) (13,896)
Total included in other comprehensive
income 8 821 6,720
--------------------------------------- -------- -------------- -------------
The principal actuarial assumptions used were as follows:
Half year Half year to Year ended
to 30 June 2022 31 December
2022
30 June % %
2023
%
-------------------------- ----------- -------------- -------------
Discount rate 5.30 3.80 4.80
Inflation rate 3.25 3.30 3.15
Future salary increases 1.00 - 1.00 - 2.00 1.00 - 2.00
3.25
Future pension increases 1.85 - 2.25 - 3.50 1.80 - 3.45
3.60
-------------------------- ----------- -------------- -------------
Assumptions regarding future mortality experience were
consistent with those disclosed in the financial statements for the
year ended 31 December 2022.
11. Trade and other payables
Half year to Half year to Year ended
30 June 2023 30 June 2022 31 December 2022
GBP'000 GBP'000 GBP'000
--------------------------------- -------------- -------------- ------------------
Trade payables 1,126 944 1,311
Other taxes and social security 2,594 2,825 2,729
Other creditors 1,357 1,227 639
Contract liabilities 281 282 217
Accruals 4,913 3,949 6,567
10,271 9,227 11,463
--------------------------------- -------------- -------------- ------------------
12. Note to the cash flow statement
Cash generated from operations
Half year
to Year ended
30 June Half year to 31 December
2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
------------------------------------- ---------- -------------- -------------
Continuing operations
(Loss)/profit for the period (1,393) 1,396 3,211
Adjustments for:
- Taxation (470) 333 1,213
- Finance costs 465 548 1,028
- Depreciation 758 742 1,463
- Amortisation of intangible assets 195 195 388
- Loss/(profit) on sale of PP&E - 6 -
- Foreign currency translation 169 112 (437)
- Increase in provisions 42 8 62
- Payments to ESOT (300) (60) (284)
- Movement in share option charge 34 30 66
- Movement in non-current other
receivable - - (256)
Movement in working capital:
- Increase in inventories (3) (8) (10)
- (Increase)/decrease in trade
& other receivables (381) (953) 65
- (Decrease) in trade & other
payables (1,885) (2,407) (203)
------------------------------------- ---------- -------------- -------------
Cash (used in)/generated from
operations (2,769) (58) 6,306
------------------------------------- ---------- -------------- -------------
13. Cash and cash equivalents
Half year
to Year ended
30 June Half year to 31 December
2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
--------------------------- ---------- -------------- -------------
Cash and cash equivalents 3,646 8,565 8,839
Bank overdrafts (768) (2,387) -
--------------------------- ---------- -------------- -------------
2,878 6,178 8,839
--------------------------- ---------- -------------- -------------
The Group is operating within its existing banking
facilities.
14. Related-party transactions
There is no controlling interest in the Group's shares.
During the period rentals of GBP282,000 (30 June 2022:
GBP256,000; 31 December 2022: GBP514,000) were payable to Carmelite
Property Limited by Christie Group plc in accordance with the terms
of a long-term lease agreement. Carmelite Property Limited is a
company incorporated in England and Wales, and jointly owned by The
Christie Group Pension and Assurance Scheme, The Venners Retirement
Benefit Fund and The Fitzroy Square Pension Fund, by Christie Group
plc in accordance with the terms of a long-term lease
agreement.
15. Subsequent event
On 11 July 2023, the Group announced that David Rugg was
stepping down from the Board with immediate effect. The Group
expects to incur some one-off exceptional costs this financial year
relating to Mr Rugg's departure and his contract of employment, and
as such a provision of GBP2.0m has been made by the company
following the first-half period end.
16. Publication of Interim Report
The 2023 Interim Financial Statements are available on the
Company's website https://www.christiegroup.com
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END
IR SFAFWIEDSEIU
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September 18, 2023 02:00 ET (06:00 GMT)
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