28 June
2024
Keywords Studios plc
("Keywords Studios", "Keywords", the "Group")
Change in
Presentational Currency
Keywords Studios,
the global provider of creative and
technology-enabled solutions to the video games and entertainment
industries, today announces that it has decided to
change its presentational currency from euro to US Dollar with effect from 1 January 2024.
The Company has historically
reported its results in euros due its revenues being solely euro
denominated in the early stages of its development. As the business
has grown into a global business, it now operates in a range of
currencies, with the proportion of the Group's revenues originating
in US dollars growing to c.60% in recent years. As such, the Board
believes that the change in presentational currency will provide
investors and other stakeholders with greater transparency of the
Group's performance and reduced foreign exchange
volatility.
Dividends will continue to be
declared in sterling and will continue to follow the existing
progressive dividend policy.
As noted above, the change in the
Group's presentational currency will be effective from 1 January
2024. Consequently, the Group's first half results for the
six-month period ending 30 June 2024, and all subsequent financial
information, will be prepared using US dollars as the
presentational currency.
The Group's primary consolidated
financial statements, together with alternative performance
measures, for the financial years ended 31 December 2022 and 31
December 2023, and for the half ended on 30 June 2023 (collectively
the 'Restated Financial Information'), has been re-presented in US
dollars and is set out herein for comparative purposes.
For
further information, please contact:
Keywords Studios
Giles Blackham
Director of Investor
Relations
+44 7714 134 681
gblackham@keywordsstudios.com
|
Deutsche Numis
Nomad & Joint Corporate
Broker
Stuart Skinner / Will
Baunton
+44 20 7260 1000
|
MHP
Group
Financial Communications
Katie Hunt / Eleni Menikou / Charles
Hirst
+44 7884 494 112 / +44 20 3128
8100
keywords@mhpgroup.com
|
Barclays
Joint Corporate Broker
Tom Macdonald / Stuart
Jempson
+44 20 7029 8000
|
|
|
|
|
|
|
About Keywords Studios
(www.keywordsstudios.com)
Keywords Studios is a global provider of creative and technology-enabled solutions
to the video games and entertainment industries. Established
in 1998, and now with over 70 facilities in 26 countries
strategically located in Asia, Australia, the Americas, and Europe,
it provides services across the entire content development life
cycle through its Create, Globalize and Engage Divisions to a large
blue-chip client base across the globe.
Keywords Studios has a strong market
position, providing services to 24 of the top 25 most prominent
games companies and contributing to over
70% of the 2023 Game Awards winners. Across
the games and entertainment industry, clients include Activision
Blizzard, Bandai Namco, Bethesda, Electronic Arts, Epic Games,
Konami, Microsoft, Netflix, Riot Games, Square Enix, Supercell,
Take-Two, Tencent and Ubisoft. Recent titles worked on include
Starfield, Baldur's Gate 3, Diablo IV, Hogwarts Legacy, Elden Ring,
Fortnite, Valorant, League of Legends and Clash Royale. Keywords
Studios is listed on AIM, the London Stock Exchange regulated
market (KWS.L).
Unaudited (Restated) Consolidated statement of comprehensive
income
|
|
Year ended
|
Half
Year
|
Year
ended
|
|
|
31 December
|
30
June
|
31
December
|
|
|
2023
|
2023
|
2022
|
|
|
$'000
|
$'000
|
$'000
|
Revenue from contracts with
customers
|
|
842,609
|
413,274
|
725,817
|
Cost of sales
|
|
(519,696)
|
(256,743)
|
(445,027)
|
Gross profit
|
|
322,913
|
156,531
|
280,790
|
Other income
|
|
-
|
-
|
1,220
|
Share-based payments
expense
|
|
(23,743)
|
(10,177)
|
(19,689)
|
Costs of acquisition and
integration
|
|
(29,424)
|
(7,876)
|
(8,673)
|
Amortisation of intangible
assets
|
|
(28,150)
|
(13,771)
|
(17,725)
|
Total of items excluded from
adjusted profit measures
|
|
(81,317)
|
(31,824)
|
(46,087)
|
Other administration
expenses
|
|
(192,339)
|
(93,017)
|
(160,360)
|
Administrative expenses
|
|
(273,656)
|
(124,841)
|
(206,447)
|
Operating profit
|
|
49,257
|
31,690
|
75,563
|
|
|
|
|
|
Financing income
|
|
666
|
165
|
2,096
|
Financing cost
|
|
(13,453)
|
(6,789)
|
(6,121)
|
Profit before taxation
|
|
36,470
|
25,066
|
71,538
|
Taxation
|
|
(16,226)
|
(9,407)
|
(21,736)
|
Profit after taxation
|
|
20,244
|
15,659
|
49,802
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
Items that will not be reclassified subsequently to profit or
loss
|
|
|
|
|
Actuarial gain / (loss) on defined
benefit plans
|
|
17
|
(160)
|
300
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
Exchange gain / (loss) in net
investment in foreign operations
|
|
4,026
|
1,201
|
(12,081)
|
Exchange gain / (loss) on
translation of foreign operations
|
|
6,116
|
6,745
|
(18,726)
|
Non-controlling interest; recycled
on disposal of subsidiary
|
|
-
|
-
|
180
|
Tax related to items taken to other
comprehensive income
|
|
1,337
|
-
|
-
|
Total comprehensive income /
(expense)
|
|
31,740
|
23,445
|
19,475
|
|
|
|
|
|
Profit / (loss) for the period
attributable to:
|
|
|
|
|
Owners of the parent
|
|
20,244
|
15,659
|
49,850
|
Non-controlling interest
|
|
-
|
-
|
(48)
|
|
|
20,244
|
15,659
|
49,802
|
|
|
|
|
|
Total comprehensive income /
(expense) attributable to:
|
|
|
|
|
Owners of the parent
|
|
31,740
|
23,445
|
19,475
|
|
|
31,740
|
23,445
|
19,475
|
|
|
|
|
|
Earnings per share
|
|
$ cent
|
$
cent
|
$
cent
|
Basic earnings per ordinary
share
|
|
25.65
|
19.93
|
64.70
|
Diluted earnings per ordinary
share
|
|
25.31
|
19.20
|
61.88
|
Unaudited (Restated) Consolidated statement of financial
position
|
At 31
December
|
At 30
June
|
At 31
December
|
|
2023
|
2023
|
2022
|
|
$'000
|
$'000
|
$'000
|
Non-current assets
|
|
|
|
Intangible assets
|
697,772
|
624,354
|
501,286
|
Right of use assets
|
46,362
|
48,131
|
40,181
|
Property, plant and
equipment
|
55,458
|
58,191
|
47,766
|
Deferred tax assets
|
36,155
|
33,311
|
33,232
|
Investments
|
193
|
190
|
187
|
|
835,940
|
764,177
|
622,652
|
Current assets
|
|
|
|
Cash and cash equivalents
|
66,083
|
47,632
|
87,339
|
Trade receivables
|
99,275
|
103,345
|
87,001
|
Other receivables
|
91,992
|
98,185
|
65,468
|
Corporation tax
recoverable
|
6,614
|
6,392
|
6,937
|
|
263,964
|
255,554
|
246,745
|
Current liabilities
|
|
|
|
Trade payables
|
15,780
|
16,081
|
16,935
|
Other payables
|
172,168
|
175,100
|
148,636
|
Loans and borrowings
|
-
|
-
|
48
|
Corporation tax
liabilities
|
29,895
|
26,224
|
23,495
|
Lease liabilities
|
15,302
|
16,762
|
13,241
|
|
233,145
|
234,167
|
202,355
|
Net
current assets / (liabilities)
|
30,819
|
21,387
|
44,390
|
Non-current liabilities
|
|
|
|
Other payables
|
13,251
|
21,067
|
19,527
|
Employee defined benefit
plans
|
4,448
|
3,913
|
3,052
|
Loans and borrowings
|
140,618
|
59,997
|
7
|
Deferred tax liabilities
|
11,378
|
17,138
|
18,151
|
Lease liabilities
|
36,549
|
37,186
|
32,110
|
|
206,244
|
139,301
|
72,847
|
Net
assets
|
660,515
|
646,263
|
594,195
|
Equity
|
|
|
|
Share capital
|
1,155
|
1,153
|
1,139
|
Share capital - to be
issued
|
349
|
2,849
|
2,462
|
Share premium
|
64,956
|
64,906
|
56,795
|
Merger reserve
|
352,504
|
347,573
|
330,645
|
Foreign exchange reserve
|
(31,180)
|
(33,376)
|
(41,322)
|
Shares held in Employee Benefit
Trust ("EBT")
|
(7,251)
|
(1,050)
|
-
|
Share-based payments
reserve
|
90,005
|
79,580
|
73,786
|
Retained earnings
|
189,977
|
184,628
|
170,690
|
Total equity
|
660,515
|
646,263
|
594,195
|
Unaudited (Restated) Consolidated statement of cash
flows
|
Year Ended
|
Half
Year
|
Year
Ended
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
|
$'000
|
$'000
|
$'000
|
Cash flows from operating activities
|
|
|
|
Profit after taxation
|
20,244
|
15,659
|
49,802
|
Income and expenses not affecting operating cash
flows
|
|
|
|
Depreciation and impairment -
property, plant and equipment
|
31,225
|
11,769
|
19,241
|
Depreciation and impairment - right
of use assets
|
17,205
|
8,422
|
15,133
|
Amortisation and impairment of
intangible assets
|
28,150
|
13,771
|
17,725
|
Taxation
|
16,226
|
9,407
|
21,736
|
Share-based payments
expense
|
23,743
|
10,177
|
19,689
|
Fair value movements in deferred and
contingent consideration
|
9,945
|
4,668
|
2,369
|
Non-cash movements included in costs
of acquisition and integration
|
2,899
|
-
|
-
|
Unwinding of discounted liabilities
- deferred consideration
|
3,543
|
1,963
|
3,085
|
Unwinding of discounted liabilities
- lease liabilities
|
1,562
|
680
|
1,005
|
Interest receivable
|
(666)
|
(165)
|
(326)
|
Fair value adjustments to employee
defined benefit plans
|
1,243
|
721
|
538
|
Interest expense
|
6,235
|
2,408
|
1,336
|
Unrealised foreign exchange (gain) /
loss
|
(1,201)
|
(3,762)
|
(681)
|
|
140,109
|
60,059
|
100,850
|
Changes in operating assets and liabilities
|
|
|
|
Decrease / (increase) in trade
receivables
|
(228)
|
(9,994)
|
(12,466)
|
Decrease / (increase) in MMTC and
VGTR receivable
|
(12,159)
|
(17,917)
|
(3,779)
|
Decrease / (increase) in other
receivables
|
(7,672)
|
(12,397)
|
(6,497)
|
(Decrease) / increase in accruals,
trade and other payables
|
8,206
|
2,697
|
19,754
|
|
(11,853)
|
(37,611)
|
(2,988)
|
Taxation paid
|
(22,645)
|
(8,575)
|
(18,285)
|
Settlement of deferred and
contingent consideration related to continuous
employment
|
(4,222)
|
-
|
-
|
Net cash generated by / (used in)
operating activities
|
121,633
|
29,532
|
129,379
|
Cash flows from investing activities
|
|
|
|
Current year acquisition of
subsidiaries net of cash acquired
|
(174,479)
|
(82,183)
|
(91,280)
|
Settlement of deferred liabilities
on acquisitions
|
(33,020)
|
(10,943)
|
(27,655)
|
Acquisition of property, plant and
equipment
|
(33,204)
|
(20,350)
|
(28,211)
|
Investment in intangible
assets
|
(3,305)
|
(1,428)
|
(523)
|
Interest received
|
666
|
165
|
326
|
Net cash generated by / (used in)
investing activities
|
(243,342)
|
(114,739)
|
(147,343)
|
Cash flows from financing activities
|
|
|
|
Cash proceeds, where EBT shares were
utilised for the exercise of share-based payments
|
1,240
|
323
|
544
|
Repayment of loans
|
(105,176)
|
(35,047)
|
(89)
|
Drawdown of loans
|
244,804
|
95,000
|
-
|
Payments of principal on lease
liabilities
|
(16,476)
|
(7,351)
|
(11,788)
|
Interest paid on principal of lease
liabilities
|
(1,562)
|
(680)
|
(1,005)
|
Dividends paid
|
(2,311)
|
(1,561)
|
(2,053)
|
Company funded acquisition of shares
by EBT
|
(15,991)
|
(5,075)
|
-
|
Shares issued for cash
|
1,647
|
1,618
|
7,029
|
Interest paid
|
(6,796)
|
(1,887)
|
(879)
|
Net cash generated by / (used in)
financing activities
|
99,379
|
45,340
|
(8,241)
|
Increase / (decrease) in cash and cash
equivalents
|
(22,330)
|
(39,867)
|
(26,205)
|
Exchange gain / (loss) on cash and
cash equivalents
|
1,074
|
160
|
(6,187)
|
Cash and cash equivalents at
beginning of the period
|
87,339
|
87,339
|
119,731
|
Cash and cash equivalents at end of
the period
|
66,083
|
47,632
|
87,339
|
Notes forming part of the unaudited (restated) consolidated
financial statements
1
Basis of Preparation
The unaudited (restated) financial
information should be read in conjunction with the Annual Report
and Accounts for the year ended 31 December 2023; and the interim
financial information for the six months ended 30 June 2023 all of
which have been prepared in accordance with International Financial
Reporting Standards ('IFRS'). The statutory accounts for the year
ended 31 December 2023 were approved by the directors on 13 March
2024.
2
Presentation Currency
Keywords Studios plc (the "Group")
will present its consolidated financial statements for the year
ending 31 December 2024 in US Dollars. In accordance with IAS 8,
Accounting Policies, Changes in Accounting Estimates and Errors,
this change in presentation currency will be applied
retrospectively.
The unaudited (restated) financial
information included herein will form the basis of the comparative
financial information to be included in the Annual Report and
Accounts of the Group for the year ending 31 December 2024 and all
published financial information from 1 January 2024
onwards.
In accordance with the provisions of
IAS 21, the Effects of Changes in Foreign Exchange Rates, in
respect of changes in presentational currency, financial
information has been restated from Euro to US Dollars as
follows:
• assets and
liabilities in non-US denominated currencies were translated into
US dollars at the rates of exchange ruling at the relevant balance
sheet date;
• non-US
dollar income statements and cash flows were translated into US
dollars at average rates of exchange for the relevant
period;
• share
capital, share premium and all other equity items were translated
at the historical rates prevailing at 1 January 2013, the date of
transition to IFRS, or the subsequent rates prevailing on the date
of each relevant transaction; and
•
the cumulative foreign exchange translation
reserve was set to zero on 1 January 2013, the date of transition
to IFRS and this reserve has been restated on the basis that the
Group has reported in US dollars since that date.
|
|
Year Ended
|
Half
Year
|
Year
Ended
|
|
|
31 December
|
30
June
|
31
December
|
Average
|
|
2023
|
2023
|
2022
|
Euro
|
|
1.08
|
1.08
|
1.06
|
Sterling
|
|
1.23
|
1.23
|
1.31
|
Canadian Dollar
|
|
0.74
|
0.74
|
0.79
|
|
|
|
|
|
Period end
|
|
|
|
|
Euro
|
|
1.10
|
1.09
|
1.07
|
Sterling
|
|
1.27
|
1.27
|
1.20
|
Canadian Dollar
|
|
0.75
|
0.75
|
0.74
|
Restated
Alternative Performance Measures
The
Group reports a number of alternative performance measures ("APMs")
to present the financial performance of the business, that are not
GAAP measures as defined under IFRS. The Directors believe that
these measures, in conjunction with the IFRS financial information,
provide the users of the financial statements with additional
information to provide a more meaningful understanding of the
underlying financial and operating performance of the Group. The
measures are also used in the Group's internal strategic planning
and budgeting processes and for setting internal management
targets.
These measures can have limitations
as analytical tools and therefore should not be considered in
isolation, or as a substitute for IFRS measures. APM's may not be
calculated uniformly by all companies and therefore may not be
directly comparable with similarly titled measures and disclosures
of other companies. As these measures frequently exclude
significant recurring transactions that impact financial
performance (e.g. share-based payments expense), the adjusted
measures will typically be higher than the corresponding IFRS
measures and should not be regarded as a complete picture of the
Group's financial performance, which is presented in the Total
comprehensive income / (expense) of the Group.
The Restated Alternative performance
measures should be read in conjunction with the Annual Report and
Accounts for the year ended 31 December 2023; and the interim
financial information for the six months ended 30 June
2023.
Divisional analysis
The following table presents revenue
growth by division at actual exchange rates ("AER").
|
Full Year
|
Half
Year
|
Full
Year
|
Full Year
|
Half
Year
|
Full
Year
|
|
31 December
|
30
June
|
31
December
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
2023
|
2023
|
2022
|
|
Revenue
|
Revenue
|
Revenue
|
Growth
|
Growth
|
Growth
|
|
AER
|
AER
|
AER
|
AER
|
AER
|
AER
|
|
$m
|
$m
|
$m
|
%
|
%
|
%
|
Create
|
363.0
|
175.5
|
290.1
|
25.1%
|
28.5%
|
29.6%
|
Globalize
|
301.6
|
156.8
|
316.0
|
(4.6%)
|
0.8%
|
14.6%
|
Engage
|
178.0
|
81.0
|
119.7
|
48.7%
|
33.2%
|
9.3%
|
|
842.6
|
413.3
|
725.8
|
16.1%
|
17.1%
|
19.2%
|
Pro forma revenue
Pro forma revenue is calculated by
adding pre-acquisition revenues of current year acquisitions to the
current year revenue numbers, to illustrate the size of the Group
had the acquisitions been included from the start of the financial
year.
|
Full Year
|
Full Year
|
Full Year
|
|
31 December
|
31 December
|
31 December
|
|
2023
|
2023
|
2023
|
|
Revenue
|
Pre-acquisition
revenue
|
Pro forma
Revenue
|
|
AER
|
AER
|
AER
|
|
$m
|
$m
|
$m
|
Create
|
363.0
|
47.2
|
410.2
|
Globalize
|
301.6
|
1.1
|
302.7
|
Engage
|
178.0
|
6.9
|
184.9
|
|
842.6
|
55.2
|
897.8
|
Organic revenue at constant
exchange rates
Organic revenue at constant exchange
rates is calculated by adjusting the prior year revenues, adding
pre-acquisition revenues for the corresponding period of ownership,
and applying the prior period foreign exchange rates to the current
periods, when translating studio results into the US Dollar
reporting currency.
|
Full Year
|
Half
Year
|
Full
Year
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
|
Organic revenue
growth
|
Organic
revenue growth
|
Organic
revenue growth
|
|
%
|
%
|
%
|
Create
|
17.3%
|
22.1%
|
25.9%
|
Globalize
|
(4.3%)
|
4.7%
|
23.4%
|
Engage
|
2.3%
|
-
|
9.7%
|
|
5.6%
|
10.4%
|
21.8%
|
Adjusted operating costs
This comprises Administrative
expenses as reported in the Consolidated statement of comprehensive
income, adding back share-based payments expense, costs of
acquisition and integration, amortisation of intangible assets,
depreciation and impairment, and deducting bank
charges.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Administrative expenses
|
(273,656)
|
(124,841)
|
(206,447)
|
Share-based payments
expense
|
23,743
|
10,177
|
19,689
|
Costs of acquisition and
integration
|
29,424
|
7,876
|
8,673
|
Amortisation of intangible
assets
|
28,150
|
13,771
|
17,725
|
Depreciation - property, plant and
equipment
|
24,995
|
11,769
|
19,241
|
Depreciation - right of use
assets
|
14,995
|
8,422
|
15,133
|
Bank charges
|
(781)
|
(380)
|
(695)
|
Adjusted operating costs
|
(153,130)
|
(73,206)
|
(126,681)
|
Adjusted operating costs as a % of revenue
|
18.2%
|
17.7%
|
17.5%
|
Adjusted operating profit
The Adjusted operating profit
consists of the Operating profit as reported in the Consolidated
statement of comprehensive income, adjusted for share-based
payments expense, costs of acquisition and integration, and
amortisation of intangible assets. In order to present the measure
consistently year-on-year, the impact of other income is also
excluded.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Operating profit
|
49,257
|
31,690
|
75,563
|
Share-based payments
expense
|
23,743
|
10,177
|
19,689
|
Costs of acquisition and
integration
|
29,424
|
7,876
|
8,673
|
Amortisation of intangible
assets
|
28,150
|
13,771
|
17,725
|
Other income
|
-
|
-
|
(1,220)
|
Adjusted operating profit
|
130,574
|
63,514
|
120,430
|
Adjusted operating profit as a % of revenue
|
15.5%
|
15.4%
|
16.6%
|
EBITDA
EBITDA comprises Operating profit as
reported in the Consolidated statement of comprehensive income,
adjusted for amortisation of intangible assets, depreciation and
impairment, and deducting bank charges.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Operating profit
|
49,257
|
31,690
|
75,563
|
Amortisation of intangible
assets
|
28,150
|
13,771
|
17,725
|
Depreciation - property, plant and
equipment
|
24,995
|
11,769
|
19,241
|
Depreciation - right of use
assets
|
14,995
|
8,422
|
15,133
|
Bank charges
|
(781)
|
(380)
|
(695)
|
EBITDA
|
116,616
|
65,272
|
126,967
|
Adjusted EBITDA
Adjusted EBITDA comprises EBITDA,
adjusted for share-based payments expense, and costs of acquisition
and integration. In
order to present the measure consistently year-on-year, the impact
of other income is also excluded.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
EBITDA
|
116,616
|
65,272
|
126,967
|
Share-based payments
expense
|
23,743
|
10,177
|
19,689
|
Costs of acquisition and
integration
|
29,424
|
7,876
|
8,673
|
Other income
|
-
|
-
|
(1,220)
|
Adjusted EBITDA
|
169,783
|
83,325
|
154,109
|
Adjusted EBITDA as a % of revenue
|
20.1%
|
20.2%
|
21.2%
|
Adjusted profit before tax
Adjusted profit before tax comprises
Profit before taxation as reported in the Consolidated statement of
comprehensive income, adjusted for share-based payments expense,
costs of acquisition and integration, amortisation of intangible
assets, foreign exchange gains and losses, and unwinding of
discounted liabilities. In order to present the measure
consistently year-on-year, the impact of other income is also
excluded.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Profit before taxation
|
36,470
|
25,066
|
71,538
|
Share-based payments
expense
|
23,743
|
10,177
|
19,689
|
Costs of acquisition and
integration
|
29,424
|
7,876
|
8,673
|
Amortisation of intangible
assets
|
28,150
|
13,771
|
17,725
|
Foreign exchange (gain) /
loss
|
1,332
|
1,358
|
(1,770)
|
Unwinding of discounted liabilities
- deferred consideration
|
3,543
|
1,963
|
3,085
|
Other income
|
-
|
-
|
(1,220)
|
Adjusted profit before tax
|
122,662
|
60,211
|
117,720
|
Adjusted profit before tax as a % of revenue
|
14.6%
|
14.6%
|
16.2%
|
Adjusted effective tax rate
The Adjusted effective tax rate is
the Taxation expense as reported in the Consolidated statement of
comprehensive income, adjusted for the tax impact of the adjusting
items in arriving at Adjusted profit before tax, as a percentage of
the Adjusted profit before tax.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Adjusted profit before
tax
|
122,662
|
60,211
|
117,720
|
Taxation
|
16,226
|
9,407
|
21,736
|
Effective tax rate before tax on adjusting
items
|
13.2%
|
15.6%
|
18.5%
|
Tax arising on bridging items to
Adjusted profit before tax
|
11,382
|
3,733
|
4,267
|
Adjusted taxation
|
27,608
|
13,140
|
26,003
|
Adjusted effective tax rate
|
22.5%
|
21.8%
|
22.1%
|
Adjusted earnings per share
The Adjusted profit after tax
comprises the Adjusted profit before tax, less the Taxation expense
as reported in the Consolidated statement of comprehensive income,
adjusted for the tax impact of the adjusting items in arriving at
Adjusted profit before tax.
The Adjusted earnings per share
comprises the Adjusted profit after tax divided by the either the
basic or diluted weighted average number of equity shares, as
reported in note 8 of the 2023 Annual Report and Accounts and in
the interim financial information for the 6 months ended 30 June
2023.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Adjusted profit before
tax
|
122,662
|
60,211
|
117,720
|
Taxation
|
(16,226)
|
(9,407)
|
(21,736)
|
Tax arising on bridging items to
Adjusted profit before tax
|
(11,382)
|
(3,733)
|
(4,267)
|
Adjusted profit after tax
|
95,054
|
47,071
|
91,717
|
|
|
|
|
Weighted average number of equity
shares
|
Number
|
Number
|
Number
|
Basic
|
78,910,471
|
78,558,801
|
76,979,596
|
Diluted
|
79,995,267
|
81,552,510
|
80,481,897
|
|
|
|
|
Adjusted earnings per share
|
$ c
|
$
c
|
$
c
|
Basic
|
120.46
|
59.92
|
119.14
|
Diluted
|
118.82
|
57.72
|
113.96
|
Return on capital employed (ROCE)
ROCE represents the Adjusted profit
before tax (excluding net interest costs, unwinding of discounted
lease liabilities and bank charges, and also adjusted to include
pre-acquisition profits of current-year acquisitions), expressed as
a percentage of the capital employed. As the Group continues to
make multiple acquisitions each year, the calculation further
adjusts the Adjusted profit before tax and the capital employed as
if all the acquisitions made during each year were made at the
start of that year.
Capital employed represents Total
equity as reported on the Consolidated statement of financial
position, adding back employee defined benefit plan liabilities,
cumulative amortisation of intangible assets (customer
relationships), acquisition-related liabilities (deferred and
contingent consideration), together with loans and borrowings,
while deducting cash and cash equivalents.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Adjusted profit before
tax
|
122,662
|
60,211
|
117,720
|
Interest received
|
(666)
|
(165)
|
(326)
|
Bank charges
|
781
|
380
|
695
|
Interest expense
|
6,235
|
2,408
|
1,336
|
Unwinding of discounted liabilities
- lease liabilities
|
1,562
|
680
|
1,005
|
Pre-acquisition profits of current
year acquisitions
|
10,427
|
1,355
|
1,689
|
Adjusted profit before tax including
pre-acquisition profit excluding interest for the period
|
141,001
|
64,869
|
122,119
|
Rolling 12 month
adjustment
|
-
|
69,164
|
-
|
Adjusted profit before tax including pre-acquisition profit
and excluding net interest
|
141,001
|
134,033
|
122,119
|
|
|
|
|
Total equity
|
660,515
|
646,263
|
594,195
|
Employee defined benefit
plans
|
4,448
|
3,913
|
3,052
|
Cumulative amortisation of
intangible assets (customer relationships)
|
84,579
|
73,335
|
62,182
|
Deferred and contingent
consideration
|
61,627
|
83,281
|
67,465
|
Loans and borrowings
|
140,618
|
59,997
|
55
|
Cash and cash equivalents
|
(66,083)
|
(47,632)
|
(87,339)
|
Capital employed
|
885,704
|
819,157
|
639,610
|
Return on capital employed
|
15.9%
|
16.4%
|
19.1%
|
Free
cash flow
Free cash flow represents Net cash
generated by / (used in) operating activities as reported in the
Consolidated statement of cash flows, adjusted for acquisition and
integration cash outlay, capital expenditure, settlement of
deferred consideration related to continuous employment, net
interest paid, payments of principal on lease liabilities and is
presented both before and after taxation paid. In order to present
the measure consistently year-on-year, the impact of other income
is also excluded.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Net cash generated by / (used in)
operating activities
|
121,633
|
29,532
|
129,379
|
Acquisition and integration cash
outlay:
|
|
|
|
Costs of acquisition and
integration
|
29,424
|
7,876
|
8,673
|
Fair value adjustments to contingent
consideration
|
(334)
|
-
|
(2,369)
|
Non-cash movements in Deferred and
contingent
consideration related to continuous employment
|
(9,611)
|
(4,668)
|
(3,240)
|
Fair value adjustments to property,
plant
and equipment
|
(6,231)
|
-
|
-
|
Fair value adjustments to right of
use assets
|
(2,210)
|
-
|
-
|
Other fair value movements within
Cost of acquisition and integration
|
(2,899)
|
-
|
-
|
Acquisition of property, plant and
equipment
|
(33,204)
|
(20,350)
|
(28,211)
|
Investment in intangible
assets
|
(3,305)
|
(1,428)
|
(523)
|
Other income
|
-
|
-
|
(1,220)
|
Settlement of deferred and
contingent consideration related to continuous
employment
|
4,222
|
-
|
-
|
Interest received
|
666
|
165
|
326
|
Interest paid
|
(8,358)
|
(2,567)
|
(1,884)
|
Payments of principal on lease
liabilities
|
(16,476)
|
(7,351)
|
(11,788)
|
Free cash flow after tax
|
73,317
|
1,209
|
89,143
|
Taxation paid
|
22,645
|
8,575
|
18,285
|
Free cash flow before tax
|
95,962
|
9,784
|
107,428
|
Adjusted free cash flow
Adjusted free cash flow is a measure
of cash flow adjusting for capital expenditure that is supporting
growth in future periods (as measured by capital expenditure in
excess of maintenance capital expenditure).
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Free cash flow before tax
|
95,962
|
9,784
|
107,428
|
Capital expenditure in excess of
depreciation:
|
|
|
|
Acquisition of property, plant and
equipment
|
33,204
|
20,350
|
28,211
|
Depreciation - property, plant and
equipment
|
(24,995)
|
(11,769)
|
(19,241)
|
Capital expenditure in excess of
depreciation
|
8,209
|
8,581
|
8,970
|
Adjusted free cash flow
|
104,171
|
18,365
|
116,398
|
Adjusted cash conversion rate
The Adjusted cash conversion rate is
the Adjusted free cash flow as a percentage of the Adjusted profit
before tax:
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Adjusted free cash flow
|
104,171
|
18,365
|
116,398
|
Adjusted profit before
tax
|
122,662
|
60,211
|
117,720
|
Adjusted cash conversion ratio
|
84.9%
|
30.5%
|
98.9%
|
Net
debt
The Group manages capital by
monitoring debt to capital and net debt ratios. Net debt is
calculated as Loans and borrowings (as shown in the Consolidated
statement of financial position) less Cash and cash equivalents,
and excludes Lease liabilities.
|
Year End
|
Half
Year
|
Year
End
|
|
31 December
|
30
June
|
31
December
|
|
2023
|
2023
|
2022
|
Calculation
|
$'000
|
$'000
|
$'000
|
Loans and borrowings
|
140,618
|
59,997
|
55
|
Cash and cash equivalents
|
(66,083)
|
(47,632)
|
(87,339)
|
Net
debt / (net cash) position
|
74,535
|
12,365
|
(87,284)
|