TIDMNWOR
RNS Number : 2331W
National World PLC
22 April 2021
National World plc
("National World," or the "Company")
Results for the year ended 31 December 2020
Notice of Annual General Meeting
National World, (LSE: NWOR.L), the investment business
established to create a modern platform for news publishing through
acquisition and transformation, announces its results for the year
ended 31 December 2020, together with details of its forthcoming
Annual General Meeting, ("AGM").
During the year, the Company continued to evaluate a number of
acquisition opportunities. F ollowing a three month due diligence
process, it completed the acquisition of JPIMedia Publishing
Limited and its subsidiaries, (the "JPI Group") on 2 January 2021
("the Acquisition). As the Acquisition was completed after the 2020
financial year end, the National World results for the year ended
31 December 2020 do not consolidate the results of JPI Group.
JPI Group was acquired for GBP10.2 million, on a debt free, cash
free basis with a normalised level of working capital, with GBP5.2
million paid in cash on completion of the Acquisition on 2 January
2021 ("Completion") (GBP500,000 for equity and GBP4.7 million
repayment of debt due to the previous vendors, JPIMedia Limited
("JPIMedia")) and two deferred payments of GBP2.5 million each on
31 March 2022 and 31 March 2023. Following Completion, a further
payment of GBP1.7 million to JPIMedia was made on 31 March 2021
representing the cash left in the business on Completion (GBP0.5
million) and working capital in the JPI Group on Completion being
higher than the normalised level of working capital. The initial
consideration was funded by the issue of GBP8.4 million convertible
secured loan notes and the Company's existing cash resources.
Following Completion, the Company issued a further GBP11.6 million
convertible secured loan notes and GBP1 million interest only
unsecured loan notes to provide working capital facilities and
headroom to explore further acquisitions and investments.
David Montgomery, Executive Chairman, said:
"We are pleased to have commenced the implementation of our
strategy with the acquisition of JPI Group. We have already made
progress with our Localise, Energise, Digitise, Monetise programme,
empowering local news teams and reenergising titles.
"In addition, we have launched NationalWorld.com, a website
serving the whole of the UK, edited outside London and drawing on
the quality of our regional publishing strength.
"We have exciting plans for the future and look forward to
continuing the development of the business on a UK wide footprint
and securing new acquisition opportunities as they become
available."
Since the acquisition of JPI Group, management has:
-- Streamlined the head office function, reorganising operations
into seven regional media divisions and providing commercial teams
with new digital marketing skills;
-- United P&L responsibility with regional editorial and commercial resources;
-- Enhanced existing news websites and developed launch plans in
contiguous markets to strengthen market share and grow
audience;
-- Increased unique local content to enhance the quality and
appeal of newspapers and websites;
-- Begun trialling a new subscription platform to drive daily
engagement with premium content; and
-- Management is confident that annualised savings of GBP5.0
million (GBP4.0 million annualised already secured) will be
delivered during 2021 with restructuring costs of GBP4.0
million.
Results for period ended 31 December 2020
The 2020 Annual Report is available on our website:
https://www.nationalworldplc.com/investors/reports-presentations-and-publications/year/2021
.
The consolidated financial statements of JPIMedia Publishing
Limited will be made available on our website (
https://www.nationalworldplc.com ) until such time as they are
available at Companies House.
Excerpts of the consolidated report and audited financial
statements of the Company for the year ended 31 December 2020 are
set out below.
Notice of AGM
A notice of the AGM of the Company, together with a form of
proxy, will be posted to shareholders in the coming days. The AGM
is to be held on 30 June 2021 at 11.00 am.
In light of efforts to prevent a new wave of COVID-19
infections, the Company will hold the AGM as a virtual meeting in
accordance with the provisions of its articles of association.
All voting at the resolutions at the AGM will be conducted on a
poll which means that shareholders should submit their proxy (by
post or online voting) as soon as possible. We ask that all
questions which shareholders wish to raise be submitted to
ir@nationalworld.com in advance.
Full details will be contained in the AGM documents to be sent
to shareholders and made available on the Company's website:
https://www.nationalworldplc.com/investors/reports-presentations-and-publications/year/2021
.
This announcement contains inside information for the purposes
of Article 7 of Regulation 2014/596/EU (which forms part of
domestic UK law pursuant to the European Union (Withdrawal) Act
2018 ("UK MAR"). Upon the publication of this announcement, this
inside information (as defined in UK MAR) is now considered to be
in the public domain. For the purposes of UK MAR, the person
responsible for arranging for the release of this announcement on
behalf of National World is Vijay Vaghela, Chief Operating
Officer.
- Ends -
For further information please contact:
National World plc
David Montgomery
Vijay Vaghela
c/o Montfort Communications
Montfort Communications
Nick Miles +44 (0)78 1234
Olly Scott 5205
Excerpts from the consolidated report and audited financial
statements of National World plc for the year ended 31 December
2020.
Chairman's statement
National World Plc was launched to create a modern platform for
news publishing through acquisition and transformation.
On 2 January 2021 the Company completed its first acquisition,
JPIMedia Publishing Limited and its subsidiaries, (the "JPI Group")
owner of 13 regional and city daily newspapers and over one hundred
other franchises in print and online. The historic titles purchased
include the Yorkshire Post, The Scotsman, The Portsmouth News and
The Sheffield Star stretch from the south of England to the north
of Scotland. In addition, the Northern Ireland titles include The
Newsletter, the oldest English language newspaper in the world, and
The Derry Journal.
In the last four months the JPI Group has been undergoing a
comprehensive overhaul in line with the Company's policy of
Localise, Energise, Digitise, Monetise in pursuit of a sustainable
news platform.
The centralised structure is in the process of being dismantled,
transferring resources to the local franchises to bring journalists
and sales staff closer to the communities and the advertisers they
serve. Content and commercial responsibility have been transferred
to the individual franchises, grouped in seven regions.
Many titles, print and online, are in the process of being
upgraded with richer and exclusive content. This accords with
National World's strategy to introduce payment for premium online
content at an early stage which recognises that original and unique
local content is highly prized by social media platforms. Those
platforms are now making payment for such content, including to JPI
Group, and this trend is likely to increase either through
voluntary arrangements or as seems possible through legislative
intervention.
The Company is also planning to leverage the JPI Group's market
position and talent to launch new online products and exploit its
UK wide footprint. The Company has liberated itself from the
traditional geographical restrictions of regional publishing by
launching nationalworld.com as a website serving the whole of the
UK. This has been facilitated by an expansion of high quality
content generated by our existing editorial team and exploiting
specialist knowledge in a number of key consumer areas.
NationalWorld.com is edited outside London but with the authority
and stance of a national newspaper and featuring an illustration of
the front page on the website each day. In parallel with this,
National World is expanding e-commerce operations across its
regional and national estate to take account of the attractive
demographics of its quality audience that some other publishers
lack.
Since inception, National World has been forging partnerships
with technology businesses in order to match content to audiences,
optimising sales and subscription revenue. The Company expects to
announce further launches and technology partnerships in the near
future. These will be accompanied by a rolling programme of product
enhancements and relaunches.
Since the completion of the acquisition, the pace of change has
been swift with a focus on preparing the business to deliver on the
revenue potential of the country emerging from lockdown in the
second quarter of 2021. National World's management team has
previous experience of many of the franchises and the regions in
which the JPI Group operates. This has been of assistance as the
acquisition and transformation to date has been conducted remotely
in accordance with COVID-19 pandemic restrictions.
Whilst trading in the first quarter of 2021 has been adversely
impacted by the lockdown arising from COVID-19, management has
taken appropriate steps to mitigate the impact to support profits
and cash flow.
On behalf of the Board, I thank the JPI Group's staff for the
enthusiasm with which they have supported the restructure and the
commitment shown to the publications and the communities
served.
National World expects to issue an update on trading after its
shares return to trading on the London Stock Exchange.
David Montgomery
Executive Chairman
22 April 2021
Strategic report
The Directors present the Strategic Report of National World Plc
for the year ended 31 December 2020.
Review of Business in the Period
Operational Review
The Company was set up by David Montgomery to pursue
opportunities in the news publishing and digital media sector
and/or in associated complementary technologies. Vijay Vaghela
joined the Company in July 2019 following his retirement from Reach
plc.
Upon admission on 19 September 2019, ("Admission") the Company
issued 50,000,000 ordinary shares at 10 pence per share and all
ordinary shares were admitted to Standard Listing on the Official
List in accordance with Chapter 14 of the Listing Rules of the FCA
and to trading on the Main Market of the London Stock Exchange.
Since September 2019, when the Company's shares started trading
on the London Stock Exchange, the Company evaluated several
potential acquisitions, a number of which were deemed unsuitable
due to either the outlook and/or valuation. Following a three month
due diligence process supported by our investment banking advisers,
brokers, lawyers and external accounting support, the Company
completed the acquisition of JPIMedia Publishing Limited and its
subsidiaries (the "JPI Group") on 2 January 2021. JPI Group was
acquired for GBP10.2 million, on a debt free, cash free basis with
a normalised level of working capital, with GBP5.2 million paid in
cash on Completion (GBP500,000 for equity and GBP4.7 million
repayment of debt due to the previous vendors, JPIMedia Limited)
and two deferred payments of GBP2.5 million each on 31 March 2022
and 31 March 2023. Following Completion, a further payment of
GBP1.7 million to the previous vendors was made on 31 March 2021
representing the cash left in the business on Completion (GBP0.5
million) and working capital in the JPI Group on Completion being
higher than the normalised level of working capital.
The acquisition was funded by the issue of GBP8.4 million
convertible secured loan notes issued on 31 December 2020 and cash
resources of GBP4.2 million held by the Company at that time.
During January and February 2021, the Group issued a further
GBP11.6 million convertible secured loan notes and GBP1.0 million
of interest only unsecured loan notes to provide working capital
facilities and headroom to explore further acquisitions and
investments. The convertible secured loan notes have a right to
elect to convert into new ordinary shares in the Company when its
shares are readmitted to trading on the London Stock Exchange. The
Company has received irrevocable elections from the holders of all
the convertible secured loan notes to convert their loan notes into
new ordinary shares at admission.
The JPI Group is the UK's third largest local news publisher and
its iconic titles and websites include: The Scotsman, The Yorkshire
Post, Belfast Newsletter, Sheffield Star, Edinburgh Evening News,
Portsmouth News and Lancashire Evening Post.
In the 52 week period ended 2 January 2021 the JPI Group had
revenue of GBP88.2 million and EBITDA (before non-recurring costs)
of GBP7.7 million.
The Board will continue to evaluate acquisitions and will update
the market on progress once exclusivity has been granted and/or
there is a high probability that a transaction can be
completed.
Since December 2019, the Company's ordinary shares have been
suspended from trading on the London Stock Exchange as it was
considering a potential acquisition. The Company anticipates the
publication of a prospectus by no later than May 2021 to seek
re-admission to a Standard Listing and trading on the Main Market
of the London Stock Exchange.
Business Strategy
The Company's objective is:
"To create a modern platform for news publishing through the
implementation of a new operating model across multiple brands and
platforms by acquiring a number of media and digital technology
assets and leveraging its portfolio to launch new media brands
across the UK."
Key pillars of transformation
In a world of media commoditisation and increasing domination by
a handful of tech behemoths, National World's strategy is to create
a new publishing business model that enables us to "localise,
energise, digitise and monetise" relevant and unique content:
-- Localise - Our publishing assets provide compelling content
for local communities; both consumers and businesses. A greater
sense of community awareness has also been generated during the
COVID-19 pandemic as more consumers have lived their lives in a
smaller locale. With this new spirit of localism, we will ensure
our journalists and commercial teams are more connected with the
local communities they serve.
-- Energise - Enhance users' experience of our products and
services to increase engagement and provide a strong platform to
leverage our unique quality content to launch new products and
services across multiple platforms. While our print news-brands
will be managed creatively and profitably, our strategic focus is
on growing local, regional and national online audiences who are
deeply engaged with our content.
-- Digitise - Enhance our digital infrastructure to improve
responsiveness, engagement, data analytics, AI content generation
and user insights.
-- Monetise - Create enhanced first party data and use the
latest available digital technology to more effectively define
audiences to drive multiple digital revenue streams: digital
display advertising - targeting growth in higher yielding video
content and local digital advertising, digital subscription -
targeting both consumers and businesses and e-commerce -focusing on
specific categories of content.
National World will retain, recruit and develop talented people,
appropriately incentivised and motivated, and provide them with the
pre-requisite digital skills that will aid the execution of it's
strategy.
The Company's strategy will involve consolidation and change by
combining acquired digital technology innovation and traditional
print assets in a new industry model designed to grow revenue by
aggregation of audiences and maximising efficiencies.
As the operating model can be applied to many territories, the
Company will not be limited to particular geographic regions.
However, the initial focus will be to invest in the UK.
Implementation plans
National World will deliver its vision through a clear set of
strategic initiatives:
-- Materially reduce the size of the central infrastructure -
Minimise central infrastructure for the key functions of editorial
and commercial to ensure all parts of the organisation have full
clarity and responsibility for the delivery of product and
performance enhancements. The central function will provide
efficient back office functions (IT, Finance, HR, etc) and will
have editorial and commercial expertise to support local management
to drive engagement and revenue;
-- Significantly strengthen local management to prioritise the
generation of unique local content and building revenue supported
by a focused central expertise;
-- Focused portfolio management to ensure the right titles on
the appropriate platforms are serving the right local communities
and businesses. The titles in both print and digital need to be
energised through relaunch with enhancements to content, layout and
commercial appeal increasing engagement with consumers and
providing advertisers with an improved response on their marketing
spend;
-- Capitalise on opportunities to launch new products and
services by , leveraging the strong base of editorial and
commercial expertise initially across the UK; and
-- Continue to evaluate acquisitions, investments and strategic
partnerships to build scale, accelerate digitisation, product
enhancement and drive efficiencies.
Key deliverables
To monitor progress, the Board will assess the appropriate KPIs
which will be actively monitored and reported and will cover:
-- Digital audience . Including unique users, page views and registrations;
-- Digital revenue. Build through display, subscriptions, video and e-commerce;
-- Revenue trends. Improve revenue trends with KPIs that monitor
a transition from dependency on print sales to an accelerating
digital performance; and
-- Cash generation and financial flexibility . Provide headroom
for investment and the return of capital to shareholders through
either dividends and/or share buy backs. Management are keen to
ensure financial flexibility will be a key KPI.
During the first half of 2021 the Board has and will focus on
stabilising the JPI Group and establishing the appropriate
organisation structure. It will present detailed KPIs for
monitoring performance in the 2021 interim results.
Acquisition strategy
In selecting acquisition opportunities, the Board will focus
on:
-- media assets where opportunities exist to implement its new strategy and add value; and
-- new technologies to enable and accelerate implementation of the change strategy.
The acquisition of the JPI Group provides a strong base from
which to build the strategy. As the acquisition of the JPI Group is
a reverse takeover, the Company anticipates the publication of a
prospectus by no later than May 2021 to seek re-admission to a
Standard Listing and trading on the Main Market of the London Stock
Exchange.
The Company's investments or acquisitions may be in companies,
partnerships, special purpose vehicles, joint ventures or direct
interests in new digital applications or traditional publishing
media assets where the Directors believe the opportunity exists to
apply the strategy and achieve improved financial returns. The
Company will be focused on those acquisitions that offer either a
material shareholding and/or management control.
Events since the year end
-- The acquisition of JPI Group announced on 31 December 2020, completed on 2 January 2021.
-- On 1 January 2021, Mark Hollinshead was appointed Chief
Commercial Officer and Daniel Cammiade was appointed as a
non-executive director.
-- On 4 January 2021, the Company paid GBP4,717,000 to JPI Media
Limited representing the outstanding borrowing due at
Completion.
-- On 21 January 2021, the Company issued a further GBP5.7
million convertible secured loan notes.
-- On 8 February 2021, the Company issued a further GBP5.9
million secured convertible loan notes, bringing the total
convertible secured loan notes issued to GBP20 million.
-- On 12 February 2021, the Company issued GBP1 million interest only unsecured loan notes.
-- On 31 March 2021, the Company paid GBP1,686,000 (including
GBP472,000 cash retained in the business on Completion) to JPI
Media Limited representing the amount by which the working capital
in the JPI Group on Completion was greater than normalised working
capital.
-- On 20 April 2021, Steve Barber was appointed as Senior Independent Director.
Loan notes of GBP21 million, (GBP20 million convertible secured
and GBP1 million interest only unsecured) have been issued to fund
the acquisition of the JPI Group, future investment and ongoing
working capital requirements. As at 22April 2021 the Company had
received irrevocable elections to convert all GBP20 million of
convertible secured loan notes into new ordinary shares conditional
upon the Company's shares being admitted to trading on the London
Stock Exchange.
From the beginning of 2021, the Company has commenced the
transformation process for the JPI Group and has made good progress
on:
-- streamlining a large head office function and transformation
of the operating structure with the creation of seven regional
media divisions covering commercially homogeneous geographical
markets;
-- realigning local and regional editorial and commercial
resource, with P&L responsibility vested with local
management;
-- enhancement of existing news websites and development of
launch plans in contiguous markets to strengthen market share and
grow audience;
-- enhancing the quality and appeal of newspapers and websites
with increased unique local content;
-- development and launch of a new national news website which
will have a particular emphasis on promoting life outside
London;
-- trialling of a new subscription platform to engage on our
website for premium content on a daily basis;
-- training and development of commercial teams in digital marketing skills; and
-- the delayering and flattening of the management structures
and other efficiencies is expected to deliver annualised savings of
GBP5.0 million (GBP4.0 million annualised already secured) during
2021 with restructuring costs of GBP4.0 million.
The reorganisation of the operations will provide a strong base
to drive shareholder value.
Financial review
Results for the year ended 31 December 2020
The Company incurred a loss for the year ended 31 December 2020
of GBP1.1 million (2019: GBP0.3 million loss). The loss for the
year results from: the on-going administrative expenses of GBP0.2
million ( 2019 : GBP0.2 million) required to operate the Company;
and non-recurring costs related to the acquisition of the JPI Group
of GBP0.8 million.
Cash flow
Net cash inflow for 2020 was GBP8.3 million (2019: inflow GBP4.4
million). This represents the GBP8.4 million raised through the
issue of convertible secured loan notes partially offset by net
cash outflows of GBP0.1 million in relation to ongoing
administration costs, working capital and interest receipts.
As at 31 December 2020, the Company held GBP12.7 million (2019:
GBP4.4 million) of cash.
Key Performance Indicators
Other than continued monitoring and minimisation of all
operating costs expenditure, there are no key performance
indicators for the year ended 31 December 2020 as the Company had
not completed an acquisition.
During the first half of 2021 the Board has and will focus on
stabilising and establishing the appropriate organisation structure
of the JPI Group and will present detailed KPIs for monitoring
performance in the 2021 interim results.
Position of Company's Business
As at 31 December 2020 the Company's Statement of Financial
Position shows net assets totalling GBP3.3 million (2019: GBP4.4
million). The Company has minimal liabilities apart from the
convertible secured loan notes and is considered to have a strong
cash position of GBP12.7 million at 31 December 2020.
The Board contains personnel with a good history of running
businesses that have been compliant with all relevant laws and
regulations and there have been no instances of non-compliance in
respect of environmental matters.
The Company endeavours to ensure that its employment practices
consider the necessary diversity requirements and compliance with
all employment laws. The Board has experience in dealing with such
issues and sufficient training and qualifications to ensure they
meet all requirements.
The government of the United Kingdom has issued guidelines
setting out appropriate procedures for companies to follow to
ensure that they are compliant with the UK Bribery Act 2010. The
Company has conducted a review into its operational procedures to
consider the impact of the UK Bribery Act 2010 and the Board has
adopted an anti-corruption and anti-bribery policy.
Statement of Comprehensive Income
31 Dec 20 29 May 19
to 31 Dec
19
Note GBP'000 GBP'000
------------------------------------- ----- ---------- -----------
Continuing operations
Non-recurring costs to establish
National World - (88)
Listing expenses 6 - (81)
Acquisition costs 7 (839) -
Administrative expenses 8 (244) (167)
Operating loss (1,083) (336)
---------- -----------
Finance income 9 12 1
Finance expense 10 (2) -
---------- -----------
Loss before tax (1,073) (335)
---------- -----------
Taxation 11 - -
---------- -----------
Total comprehensive loss for the
period attributable to the equity
owners (1,073) (335)
========== ===========
Loss per share
Basic and diluted (pence per share) 12 (2.0) (1.2)
---------- -----------
The notes form part of these financial statements.
Statement of Financial Position
As at As at
31 Dec 31 Dec
20 19
Note GBP'000 GBP'000
----------------------------- ----- -------- ---------
ASSETS
Current assets
Trade and other receivables 13 8 128
Cash and cash equivalents 14 12,693 4,383
-------- ---------
Total current assets 12,701 4,511
-------- ---------
Total assets 12,701 4,511
-------- ---------
LIABILITIES
Current liabilities
Trade and other payables 15 904 68
Total current liabilities 904 68
-------- ---------
Non-Current Liabilities
Borrowings 16 8,427 -
Total liabilities 9,331 68
-------- ---------
NET ASSETS 3,370 4,443
======== =========
EQUITY
Share capital 17 54 54
Share premium 18 4,724 4,724
Accumulated losses 18 (1,408) (335)
-------- ---------
Total equity 3,370 4,443
======== =========
The financial statements were approved by the Board of Directors
and authorised for issue on 22April 2021.
David Montgomery
Executive Chairman
Statement of Changes in Equity
Share Capital Share Premium Accumulated Total Equity
Losses
GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------------- -------------- ------------ -------------
As at 29 May 2019 - - - -
Comprehensive income
Loss for the period - - (335) (335)
-------------- -------------- ------------ -------------
Transactions with
owners
Issue of ordinary
shares 54 5,046 - 5,100
Cost to issue shares - (322) - (322)
As at 31 December
2019 54 4,724 (335) 4,443
============== ============== ============ =============
As at 1 January 2020 54 4,724 (335) 4,443
Comprehensive income
Loss for the period - - (1,073) (1,073)
-------------- -------------- ------------ -------------
As at 31 December
2020 54 4,724 (1,408) 3,370
============== ============== ============ =============
Statement of Cash Flows
31 Dec 20 31 Dec 19
Note GBP'000 GBP'000
---------------------------------------- ----- ---------- ----------
Cash flow from operating activities
Operating loss (1,073) (335)
Adjustments for non-cash/non-operating
items:
Finance income 9 (12) (1)
Finance expense 10 2 -
---------- ----------
Cash outflow from operating activities (1,083) (336)
Changes in working capital
Decrease/(Increase) in trade and
other receivables 13 121 (128)
Increase in trade and other payables 15 897 68
---------- ----------
Net cash used in operating activities (125) (396)
---------- ----------
Cash flows from investing activities
Interest received 9 12 1
---------- ----------
Net cash generated from investing
activities 12 1
---------- ----------
Cash flows from financing activities
Proceeds from issue of shares,
net of issue costs - 4,778
Issue of convertible loan notes 16 8,423 -
---------- ----------
Net cash generated from financing
activities 8,423 4,778
---------- ----------
Net increase in cash and cash
equivalents 8,310 4,383
Cash and cash equivalents at the 4,383 -
beginning of the period
---------- ----------
Cash and cash equivalents at the
end of the period 12,693 4,383
========== ==========
Notes
1 Company information
National World Plc (the "Company" or "National World") is a
public company listed on the London Stock Exchange in England and
Wales. The Company is domiciled in England and its registered
office is 201 Temple Chambers, 3-7 Temple Avenue, London, United
Kingdom, EC4Y 0DT.
The principal activity of the Company is to operate in the news
publishing sector.
The prior period was from incorporation on 29 May 2019 to 31
December 2019. Therefore, the comparative figures are not directly
comparable.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of
these financial statements are set out below. The policies have
been consistently applied to all the years presented, unless
otherwise stated.
2.1 Basis of preparation
These financial statements of the Company have been prepared on
a going concern basis in accordance with International Financial
Reporting Standards (IFRS) and IFRIC interpretations issued by the
International Accounting Standards Board (IASB) and adopted by the
European Union, in accordance with the Companies Act 2006.
Measurement bases
The financial statements have been prepared under the historical
cost convention. Historical cost is generally based on the fair
value of the consideration given in exchange for assets.
The preparation of the financial statements in compliance with
adopted IFRS requires the use of certain critical accounting
estimates and management judgements in applying the accounting
policies. The significant estimates and judgements that have been
made and their effect is disclosed in note 3.
2.2 Going concern
The Company had GBP 12.7 million cash as at 31 December 2020 and
raised a further GBP11.6 million through the issue of convertible
secured loan notes and GBP1.0 million through the issue of interest
only unsecured loan notes during January and February 2021
providing significant headroom to fund operating expenses and costs
associated with evaluating acquisitions and investments, including
due diligence. On this basis, the Board considers the Company to
have sufficient resources to remain in operational existence for
the foreseeable future.
2.3 Functional and presentation currency
The financial information is presented in the functional
currency, pounds sterling ("GBP") except where otherwise
indicated.
2.4 New standards, amendments and interpretations
New standards, interpretations and amendments
The following standards have been endorsed by the EU and are
effective in the Company's accounting year beginning 1 January
2020:
-- Definition of Material (Amendments to IAS 1 and IAS 8); and
-- Definition of a Business (Amendments to IFRS 3).
-- These standards have no material impact on the Company.
Standards, interpretations and amendments in issue but not yet
effective and not early adopted
-- There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Company has decided
not to adopt early. The most significant of these are as follows,
which are all effective for the period beginning 1 January
2022:
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
-- Annual Improvements to IFRS Standards 2018-2020 (Amendments
to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
-- References to Conceptual Framework (Amendments to IFRS 3).
National World is currently assessing the impact of these new
accounting standards and amendments; however, they are not expected
to have a material impact on the Company.
2.5 Segment reporting
Identifying and acquiring investment projects was the only
activity the Company was involved in during 2020 and is therefore
considered as the only operating segment.
The financial information therefore of the single segment is the
same as that set out in the Statement of Comprehensive Income,
Statement of Financial Position, Statement of Changes in Equity and
the Statement of Cash Flows.
2.6 Net finance costs
Finance income
Finance income comprises interest receivable on funds invested
and other interest receivable. Interest income is recognised in
profit or loss as it accrues using the effective interest
method.
Finance expense
Finance expense comprises interest on convertible debt.
2.7 Financial assets
Classification
The Company classifies all its financial assets at amortised
cost. Financial assets do not comprise prepayments. Management
determines the classification of its financial assets at initial
recognition.
Amortised cost
The Company's financial assets held at amortised cost comprise
solely of cash and cash equivalents in the statement of financial
position.
The cash and cash equivalents in the statement of financial
position is entirely made up of deposits held with Barclays Bank
Plc, a counterparty with independent credit ratings of a minimum of
A-.
2.8 Financial Liabilities
The Company classifies its financial liabilities in the category
of financial liabilities at amortised cost. All financial
liabilities are recognised in the statement of financial position
when the Company becomes a party to the contractual provision of
the instrument. Trade and other payables and borrowings are
included in this category.
Trade and other payables
Trade and other payables are initially recognised at fair value
and subsequently measured at amortised cost using the effective
interest rate method. Accounts payable are classified as current
liabilities if payment is due within one year or less. If not, they
are presented as non-current liabilities.
Convertible debt
The proceeds received on issue of the Company's convertible debt
are allocated into their liability and equity components. The
amount initially attributed to the debt component equals the
discounted cash flows using a market rate of interest that would be
payable on a similar debt instrument that does not include an
option to convert.
Subsequently, the debt component is accounted for as a financial
liability measured at amortised cost until extinguished on
conversion or maturity of the bond. The remainder of the proceeds
is allocated to the conversion option and are recognised in other
reserves.
2.9 Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Company after deducting all of its
liabilities. Equity instruments issued by the Company are recorded
at the proceeds received net of direct issue costs.
2.10 Income tax
Income tax for the period presented comprises current and
deferred tax. Income tax is recognised in profit or loss except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Deferred income tax is recognised on temporary differences
arsing between the tax bases of assets and liabilities and their
carrying amounts only to the extent that it is likely that they
will be recovered in the foreseeable future.
2.11 Share-based payments
Where share options are awarded to directors or employees, the
fair value of the options at the date of grant is charged to the
statement of comprehensive income over the vesting period.
Non-market vesting conditions are considered by adjusting the
number of equity instruments expected to vest at each balance sheet
date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of options that eventually
vest. Market vesting conditions are factored into the fair value of
the options granted. The cumulative expense is not adjusted for
failure to achieve a market vesting condition. No charge was made
for the Value Creation Plan as the Company had not completed an
acquisition in the reporting period.
2.12 Non-recurring costs
Non-recurring costs are disclosed separately in the financial
statements where it is necessary to do so to provide further
understanding of the financial performance of the Company. They are
items that are material, either because of their size or their
nature and are presented within the line items to which they best
relate.
3 Significant judgements and estimates
The preparation of the Company's financial statements under IFRS
as endorsed by the EU requires the Directors to make estimates and
assumptions that affect the reported amounts of assets and
liabilities at the reporting date, amounts reported for revenues
and expenses during the period, and the disclosure of contingent
liabilities, at the reporting date.
Estimates and judgements are continually evaluated and are based
on historical experiences and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Directors consider that there are no critical accounting
judgements or estimates relating to the financial information of
the Company.
4 Directors and employees
Average monthly number of people (including all directors)
employed by activity:
31 Dec 20 31 Dec 19
No. No.
------------------------------- ---------- ----------
Directors 5 5
Management and administration - -
---------- ----------
5 5
========== ==========
Directors' emoluments:
31 Dec 20 31 Dec 19
GBP'000 GBP'000
------------------------ ---------- ----------
Directors' emoluments:
Salaries and fees 19 5
Other pension costs - -
---------- ----------
19 5
========== ==========
31 Dec 20 31 Dec 19
GBP'000 GBP'000
------------------------ ---------- ----------
Highest paid director:
Salaries and fees 5 1
Other pension costs - -
---------- ----------
5 1
========== ==========
There are no other employees other than the directors of the
Company.
5 Loss before income tax
The loss before income tax is stated after charging:
31 Dec 31 Dec 19
20
GBP'000 GBP'000
------------------------------------------- -------- ----------
Fees payable to the Company's auditors
- audit of the Company's annual accounts 18 18
Fees payable to the Company's auditors
- non-statutory audit in relation to
the Company's re-registration as a plc. - 3
Fees payable to the Company's auditors
- Reporting Accountant fees - 15
======== ==========
6 Listing Expenses
During the year ended 31 December 2020, the Company incurred
GBPnil (2019: GBP81,268) in IPO costs and other fees.
7 Acquisition costs
The Company incurred costs of GBP839,038 which were considered
to be one-off in relation to the acquisition of the JPI Group that
completed on 2 January 2021, therefore these costs have been
disclosed separately in the Statement of Comprehensive Income.
8 Analysis of expenses by nature
The breakdown by nature of administrative expenses is as
follows:
31 Dec 20 31 Dec 19
GBP'000 GBP'000
--------------------------------------------------------------- ---------- ----------
Staff costs 19 5
Accounting fees 29 8
Audit fees 18 18
Tax fees 2 -
Professional fees 17 97
Other costs, including financial PR, insurance and other fees 159 39
---------- ----------
Total administrative expenses 244 167
========== ==========
9 Finance income
31 Dec 20 31 Dec 19
GBP'000 GBP'000
---------------------- ---------- ----------
Bank interest 12 1
---------- ----------
Total finance income 12 1
========== ==========
10 Finance expense
31 Dec 20 31 Dec 19
GBP'000 GBP'000
----------------------------------- ---------- ----------
Interest on convertible loan notes 2 -
---------- ----------
Total finance expense 2 -
========== ==========
11 Taxation
31 Dec 20 31 Dec 19
GBP GBP
------------------------------------------ ---------- ----------
Analysis of charge in period
Loss before tax on continuing operations (1,073) (335)
---------- ----------
Tax at the UK corporation tax rate
of 19% (204) (64)
Effects of:
Expenses not allowable 159 32
Deferred tax asset not recognised
for tax losses 45 32
---------- ----------
Tax charge for the period - -
========== ==========
The standard rate of corporation tax applicable for the period
was 19 per cent.
The Company has tax losses carried forward of GBP400,139 (2019
GBP166,184). The unutilised tax losses have not been recognised as
a deferred tax asset due to the uncertainty over the timing of
future profits and gains.
12 Loss per share
The loss per share has been calculated using the loss for the
period and the weighted average number of ordinary shares entitled
to dividend rights which were outstanding during the period, as
follows:
31 Dec 20 31 Dec 19
Loss for the period attributable to
equity holders of the Company (GBP'000) (1,073) (335)
Weighted average number of ordinary
shares ('000) 54,000 26,813
---------- ----------
Loss per share (pence) (2.0) (1.2)
========== ==========
13 Trade and other receivables
31 Dec 20 31 Dec 19
GBP'000 GBP'000
-------------------------------------- ---------- ----------
Amounts falling due within one year:
Prepayments 4 42
Other receivables 4 86
---------- ----------
8 128
========== ==========
It is the Company's policy to assess receivables for
recoverability based on historical data available to management in
addition to forward looking information utilising management's
knowledge. The Directors consider that the carrying amount of trade
and other receivables is approximately equal to their value.
14 Cash and cash equivalents
31 Dec 20 31 Dec 19
GBP'000 GBP'000
-------------------------------- ---------- ----------
Cash at bank 6,693 4,383
Cash held in escrow by Lawyers 6,000 -
---------- ----------
12,693 4,383
========== ==========
GBP6.0 million of cash was held in escrow by the Company's
lawyers at year end in advance of the completion of the acquisition
of the JPI Group on 2 January 2021. On 4 January 2021 and 5 January
2021, the Company advanced GBP7.9 million and GBP2.6 million
respectively to the JPI Group for working capital purposes and to
fund the repayment of GBP4.7 million of debt payable to the former
vendors.
All bank balances are denominated in pounds sterling with GBP4.2
million held on a term deposit with Barclays Bank plc which
requires 30 days' notice for any withdrawal. Notice was given on 24
December 2020 to withdraw the funds from this account, and it was
received by the Company on 23 January 2021.
15 Trade and other payables
31 Dec 20 31 Dec 19
GBP'000 GBP'000
------------------------------------ ---------- ----------
Amounts falling due in one year:
Other taxation and social security - 1
Trade payables 4 32
Other payables - 1
Accruals 900 34
---------- ----------
904 68
========== ==========
16 Borrowings
31 Dec 20 31 Dec 19
GBP'000 GBP'000
------------------------------- ---------- ----------
Non-current
Convertible secured loan notes 8,427 -
---------- ----------
8,427 -
========== ==========
On 31 December 2020, the Company issued 8,425,000 convertible
secured loan notes at a face value of GBP1 each with interest of
10%. The loans are repayable in 3 years from the issue date on 31
December 2023 at the total face value of GBP8,425,000 or can be
converted into shares when the Company relists on the London Stock
Exchange at a rate of 1 share per GBP0.11 of loan. Under the terms
of the convertible secured loan, circumstances can arise where a
variable number of shares are issued, on this basis the instrument
fails the fixed for fixed criteria under IAS 32 and therefore the
instrument is recorded as a liability. A fair value exercise was
performed on the conversion option but has not been disclosed
separately as it is not material to the financial statements. One
day's interest of GBP2,308 has been accrued on the loan balance of
GBP8,425,000 at year end.
A maturity analysis of the Company's borrowings is shown
below:
31 Dec 20 31 Dec 19
GBP'000 GBP'000
------------------------------------ ---------- ----------
Less than one year - -
One to two years - -
Two to five years 8,427 -
---------- ----------
Total including interest cash flows 8,427 -
---------- ----------
Less: interest cash flows (2) -
---------- ----------
Total principal cash flows 8,425 -
========== ==========
17 Share capital
2020 2019
Number GBP'000 Number GBP'000
---------------------------------------------------- ----------- -------- ----------- --------
Issued and fully paid Ordinary shares of 0.1p each
At 31 December 54,000,000 54 54,000,000 54
=========== ======== =========== ========
No Ordinary shares were issued by the Company during the year
ended 31 December 2020.
Voting rights
The holders of ordinary shares are entitled to one voting right
per share.
Dividends
The holders of ordinary shares are entitled to dividends out of
the profits of the Company available for distribution.
18 Reserves
Share premium
Includes all premiums in excess of the nominal value of shares
received on issue of share capital.
Accumulated losses
Includes all losses incurred in the period.
19 Financial instruments
Financial assets
Financial assets measured at amortised cost comprise cash and
cash equivalents, as follows:
31 Dec 20 31 Dec 19
GBP'000 GBP'000
-------------------------------- ---------- ----------
Cash at bank 6,693 4,383
Cash held in escrow by lawyers 6,000 -
---------- ----------
12,693 4,383
========== ==========
Financial liabilities
Financial liabilities measured at amortised cost comprise trade
and other payables and borrowings, as follows:
31 Dec 20 31 Dec 19
GBP'000 GBP'000
-------------------------------- ---------- ----------
Trade payables 4 32
Other payables - 1
Accruals 900 34
Convertible secured loan notes 8,427 -
---------- ----------
9,331 67
========== ==========
The Company's major financial instruments include bank balances
and amounts payables to suppliers. The risks associated with these
financial instruments, and the policies on how to mitigate these
risks are set out below. Risk management is carried out by the
Board. The Company uses financial instruments to provide
flexibility regarding its working capital requirements and to
enable it to manage specific financial risks to which it is
exposed.
Liquidity risk
Liquidity risk arises from the Company's management of working
capital.
The Company regularly reviews its major funding positions to
ensure that it has adequate financial resources in meeting its
financial obligations. The Directors have considered the liquidity
risk as part of their going concern assessment (note 2). Controls
over expenditure are carefully managed in order to maintain its
cash reserves whilst it targets a suitable transaction. Trade and
other payables are all due within one year, a maturity analysis of
borrowings is shown in note 16.
The COVID-19 pandemic resulted in a significant fall in the
value of global stock markets during March 2020. The pandemic has
created a unique environment, which adds additional challenges for
any companies seeking future funding from the capital markets.
Credit risk
The Company's credit risk is wholly attributable to its cash
balance. The credit risk from its cash and cash equivalents is
limited because the counter parties are banks with high credit
ratings and have not experienced any losses in such accounts.
Interest risk
The Company's exposure to interest rate risk is the interest
received on the cash held, which is immaterial.
Capital risk management
The Company's objective when managing capital is to safeguard
the Company's ability to continue as a going concern, in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure. In order
to maintain or adjust the capital structure, the Company may adjust
the amount of dividends paid to shareholders, return capital to
shareholders or issue new shares.
Currency risk
The Company is not exposed to any currency risk at present.
20 Related party transactions
The related parties are considered to be the Directors who each
have shares in the Company. Their remuneration is as follows:
31 Dec 20 31 Dec 19
GBP'000 GBP'000
---------------------------------- ---------- ----------
Directors' emoluments, including
salary and fees:
D Montgomery 5 1
V Vaghela 5 1
M Hollinshead 3 1
J Rowe 3 1
S Barber 3 1
---------- ----------
19 5
========== ==========
Of this amount, GBPNil was payable at 31 December 2020. (2019:
GBP1,000).
21 Ultimate controlling party
The Company has no ultimate controlling party.
22 Subsequent events
The acquisition of JPIMedia Publishing Limited and its
subsidiaries announced on 31 December 2020 completed on 2 January
2021. The principal reason for this acquisition is that the JPI
Group's portfolio of iconic brands provides a strong base from
which to implement the Company's strategy of creating a modern
platform for news publishing with a new operational model
supporting local sites across the entire UK. The Company obtained
control of the JPI Group by acquiring 100% of the share capital.
The acquisition was a reverse takeover. However, as the Company was
incorporated as a special purpose acquisition vehicle, the
acquisition meets the definition of a business combination and will
be accounted for using the acquisition accounting method in
accordance with the Company's accounting policies.
Details of the provisional fair value of identifiable assets and
liabilities acquired purchase consideration and goodwill are as
follows:
Provisional
fair values
GBP'000
-------------------------------------------- -------------
Publishing and Digital Intangible assets -
provisional 10,968
Property, plant and equipment 4,614
Trade and other receivables 13,251
Inventory 16
Cash 472
Trade and other payables (13,772)
Provisions (500)
Lease obligations (3,179)
Borrowings due to JPIMedia Limited (4,717)
---------------------------------------------- -------------
Net assets 7,153
Goodwill - provisional 33
---------------------------------------------- -------------
Total purchase consideration 7,186
---------------------------------------------- -------------
GBP'000
------------------------------------------------- --------
Initial cash consideration for equity 500
Working capital in excess of normalised working
capital on Completion 1,686
Deferred cash consideration* 5,000
--------------------------------------------------- --------
Total purchase consideration 7,186
--------------------------------------------------- --------
Initial cash consideration for equity 500
Working capital in excess of normalised working
capital on Completion 1,686
Cash acquired (472)
Cash outflow on acquisition (net of cash acquired) 1,714
------------------------------------------------------ ------
*Deferred consideration of GBP5.0 million payable in two
instalments, GBP2.5m on 31 March 2022 and GBP2.5m on 31 March
2023.
The goodwill represents the potential growth opportunities and
synergy effects from the acquisition. The goodwill is not
deductible for tax purposes. The initial accounting for the
business combination is incomplete as the identifiable intangible
assets, expected to be publishing titles and digital assets and
have not yet been measured. During the measurement period in 2021,
the Company will identify and measure the identifiable intangible
assets and adjust the provisional amounts recognised at the
acquisition date.
On 1 January 2021, Mark Hollinshead was appointed Chief
Commercial Officer and Daniel Cammiade was appointed as a
Non-Executive director.
On 4 January 2021, the Company paid GBP4,717,000 to JPIMedia
Limited representing the outstanding borrowing due at
Completion.
On 21 January 2021, the Company issued a further GBP5.7 million
convertible secured loan notes.
On 8 February 2021, the Company issued a further GBP5.9 million
convertible secured loan notes, bringing the total convertible
secured loan notes issued to GBP20 million.
On 12 February 2021, the Company issued GBP1 million interest
only unsecured loan notes.
On 31 March 2021, the Company paid GBP1,686,000 (including
GBP472,000 cash retained in the business on Completion) to JPIMedia
Limited representing the amount by which the working capital in JPI
Group on Completion was greater than normalised working
capital.
On 20 April 2021, Steve Barber was appointed as Senior
Independent Director.
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END
FR UARRRAAUSUUR
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