TIDMPTY
RNS Number : 0685B
Parity Group PLC
29 September 2022
PARITY GROUP PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2022
29 September 2022
Parity Group plc ("Parity" or the "Group"), the data and
technology focused professional services business, announces its
half year results for the six months ended 30 June 2022 ("H1
2022").
Headlines
-- Net fee income (NFI) 9% higher against H2 2021.
-- The first time in more than three years that the business has
increased NFI in sequential reporting periods.
-- Adjusted EBITDA(1) for H1 2022 of GBP0.3m.
-- Operating profit of GBP0.1m.
-- Improved operating performance in H1 2022 following actions
taken to refocus the business and streamline the cost base during
the prior year.
Key P&L Financials
For the six months ended 30 June 2022
Six months Six months Year
to 30.06.22 to 30.06.21 to 31.12.21
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
-------------------------------- -------------- ------------- -------------
Revenue 21,055 25,998 46,962
Net fee income 1,917 2,322 4,080
Adjusted EBITDA(1) 305 192 127
Operating profit/(loss) before
non-underlying items 101 18 (269)
Adjusted loss before tax(1) (59) (91) (550)
Loss before tax (82) (491) (1,103)
-------------------------------- -------------- ------------- -------------
(1) Adjusted EBITDA and adjusted loss before tax are non-IFRS
alternative performance measures, defined in Note 1 of the notes to
the interim results.
Mark Braund, Executive Chairman of Parity Group plc, said:
"Having successfully rebuilt the core recruitment business
platform within Parity, we are beginning to see this capability
make a positive impact on the performance of the business.
During the period, we materially improved customer relationships
alongside the size and quality of Parity's virtual bench of skilled
technology contractors, re-establishing it as one of the best of
its kind addressing the public sector market. With improvements in
mobility and skills transfer, Parity's access to these skilled
resources will be increasingly valuable as we focus more of our
attention on the commercial (private) sector.
The balance of the year is focused on maintaining our positive
momentum and positioning the business for further growth in
2023."
Contacts
Parity Group PLC www.parity.net
Mark Braund, Executive Chairman
Mike Johns, CFO + 44 (0) 208 171 1729
Allenby Capital Limited (Nominated
Adviser and Broker)
David Hart / Freddie Wooding
(Corporate Finance)
Tony Quirke (Sales and Corporate
Broking) +44 (0) 20 3328 5656
This announcement contains certain statements that are or may be
forward-looking with respect to the financial condition, results or
operations and business of Parity Group plc. By their nature
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. These
factors include, but are not limited to (i) adverse changes to the
current outlook for the UK IT recruitment and solutions market,
(ii) adverse changes in tax laws and regulations, (iii) the risks
associated with the introduction of new products and services, (iv)
pricing and product initiatives of competitors, (v) changes in
technology or consumer demand, (vi) the termination or delay of key
contracts and (vii) volatility in financial markets.
Overview
H1 2022 has been a period of stabilisation and development for
the Group. After realigning the strategy around its core
recruitment competencies in the second half of 2021, the Group has
re-established a stable platform for the business and in doing so
has successfully delivered upon its first objective since
refocusing on recruitment services, with a return to profitability
at both Adjusted EBITDA and Operating profit levels during the
period.
The Group has also seen 9% growth in net fee income against H2
2021.
In H1 2022, the Group has established a new permanent
recruitment team and added to its investment in new business
capability. Returns from these investments are expected to start to
be seen during the second half of 2022 and into 2023. Parity will
continue to invest in frontline resources to support growth
including in areas where there is an opportunity to develop higher
margin business utilising Parity's access to high value scarce
resources.
Despite the current economic conditions and uncertainties, the
contract recruitment market and, in particular, the public sector
continue to be resilient with high demand for skilled resources in
the Group's key areas of expertise (technology, data, and
transformation) driving up billing rates and margins.
With public sector recruitment predominantly delivered through
framework agreements, the Group is once again working with public
sector procurement bodies to tender for new and existing multiyear
frameworks. With 18 tenders so far this year, the Group has to date
been successful with nine and is awaiting the outcome from four
that will come later in the year/early in 2023. The new frameworks
give Parity access to new clients and roles within the public
sector that will support growth in H2 2022 and beyond.
Having achieved its initial goal to refocus around recruitment
and demonstrated its ability to deliver this profitably, the Group
is now focused on developing new business from both the public and
private sectors to drive NFI upwards and delivering an increased
bottom line performance.
Financial review
H1 2022 has seen the Group continue its journey to re-establish
its focus around recruitment services and headline financial
performance for H1 2022 has benefited from the decisions made in H2
2021. The realignment of resources in 2021 has created a lower cost
base for the business and, combined with market conditions
supporting increased billable rates and the benefit from additional
non recruitment revenues in H1, the business has delivered both
growth and profitability during H1 2022.
The Group has benefited from continuing demand within the
contract recruitment market for skilled resources in the Group's
key areas of expertise (technology, data, and transformation) and
this has contributed to a modest lift in net fee income. Core
recruitment net fee income has increased by 5% over H2 2021 and
with the addition of income from other activities, total net fee
income for H1 2022 was 9% higher than H2 2021. The increase in net
fee income combined with lower costs has enabled the Group to post
a positive adjusted EBITDA of GBP305k for H1 2022 (H1 2021:
GBP192k, FY 2021: GBP127k).
Net fee income
Net fee income for H1 2022 was GBP1.92m. Whilst lower than H1
2021, this represents a 9% increase on Net fee income of GBP1.76m
in H2 2021 and is the first time in more than three years that the
business has increased NFI in sequential reporting periods.
NFI for the period from recruitment activities of GBP1.6m was
flat against the second half of FY21. A reduction in average
contractors (384 for H1 2022 vs 415 for H1 2021) was offset by an
increase in average billable day rate by 4% and higher utilisation
during H1 2022.
Non recruitment NFI increased from GBP264k in H2 2021 to GBP400k
in H1 2022, driving up the total NFI performance. Included within
the total NFI for FY22 is GBP69k of revenue from permanent hires by
the new permanent recruitment team. In addition, the negotiation of
the conclusion of the BAT contract that ended on 31(st) March 2022
yielded additional managed service fees during the period.
Operating costs
During H2 2022, the business realigned its costs base,
streamlining management and non-recruitment costs, enabling the
business to re-invest in its core recruitment activities during H1
2022. The net impact has been a reduction in operating costs to
GBP1.8m, 11% lower than the prior half year and 27% lower than H1
2021. This reduced cost was achieved despite an investment of
GBP80k during H1 2022 in the development of small permanent
recruitment team.
Result before tax
As a result of the actions taken by the Group in the second half
of 2021 to realign its costs and focus its activities on
recruitment, the Group has been able to reduce its overall cost
base and this has enabled it to deliver an adjusted EBITDA of
GBP305k (H1 2021: GBP192k, FY 2021: GBP127k).
During the period, the business incurred GBP23k of
non-underlying costs as a result of the conclusion of a contract
with BAT in March 2022.
After the inclusion of non-underlying items, the Group posted a
much reduced loss before tax of GBP82k for H1 2022, compared to a
loss before tax of GBP491k in H1 2021 and GBP1,103k in FY 2021.
Cash & net debt
Net debt as at 30 June 2022, excluding adjustments for IFRS 16
lease liabilities, was GBP4.5m (30 June 2021: net debt of GBP1.1m,
31 December 2021: net debt of GBP1.1m).
The Group continues to utilise its GBP9m asset-based lending
(ABL) debt facility. The current facility is in place until April
2024 and is secured against billed and unbilled receivables to
manage both intra month and inter month movements in working
capital. Over the last 15 months since switching the facility to
Leumi ABL, the Group has benefited from the increased flexibility
the Leumi facility provides.
A short delay in receipt of cash from clients across the period
end meant that, at the end of the first half, debtors increased in
the period. The increased borrowing reflects only timing
differences across the period end and the position was normalised
within the first week of July. The Group had no bad debt during the
period. After adjusting for the timing difference on debtor
payments, a normalised net debt for end of the period would have
been GBP1.9m. This represents an increase of GBP800k over the
position as at 31(st) December 2021. The increase in net debt can
be attributed to:
Adjusted Net Debt movement GBPm
31/12 2022 (1.1)
Timing on contractor payments (0.5)
Deferred VAT repayment (0.1)
FY21 Exceptional items
paid in FY22 (0.1)
Pension (0.2)
------
30/06/2022 (Adj. for
debtors) (1.9)
Timing of debtor payments (2.6)
------
30/06/2022 (4.5)
------
Defined benefit pension
The final salary pension scheme surplus was GBP0.8m on 30 June
2022 (30 June 2021: surplus of GBP1.3m; 31 December 2021: surplus
of GBP1.9m). With volatile investment markets during the period and
inflationary pressures, both pension liabilities and pension assets
fell over the period. A rise in long dated gilt yields caused both
liabilities and LDI funds to fall in value. Growth assets that had
been the driver of surpluses in recent periods also fell during the
first half. The net impact has been a fall in the surplus at the
end of the period. Despite the fall in the surplus, the scheme
remains well positioned and the trustees and Group continue to
explore opportunities that would enable a buyout of the scheme in
the future and relieve the Group of future obligations for this
legacy scheme.
During the period, the Group made GBP166k of contributions to
the pension scheme.
Outlook
Parity is now a much simpler business than it has been for many
years and, having focused itself around delivering recruitment
solutions, is now well positioned to build long-term value.
The last nine months or so have seen significant change in the
make-up, focus and strength of the team. The enthusiasm,
commitment, and tenacity of all my colleagues is at the core of
Parity's turnaround. For this and on behalf of the Board, we say a
heartfelt "thank you".
The next goal is to leverage Parity's brand and reputation to
convert new business opportunities in both contract and permanent
and across both public and private sectors, providing a platform
for growth and an opportunity to consider other options to enhance
shareholder value.
The Group has a strong client base, committed employees, a
reputation in the market for providing contractors with rewarding
opportunities, and clients with the best resources to deliver upon
their technology, data, and transformation projects.
Consolidated condensed income statement
For the six months ended 30 June 2022
Six months Six months Year
to 30.06.22 to 30.06.21 to 31.12.21
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
--------------------------------------- ------- -------------- ------------- -------------
Revenue 3 21,054 25,998 46,962
Contractor costs (19,137) (23,676) (42,882)
--------------------------------------- ------- -------------- ------------- -------------
Net fee income 1,917 2,322 4,080
--------------------------------------- ------- -------------- ------------- -------------
Operating costs before non-underlying
items (1,816) (2,304) (4,349)
--------------------------------------- ------- -------------- ------------- -------------
Operating profit/(loss) before
non-underlying items 101 18 (269)
--------------------------------------- ------- -------------- ------------- -------------
Non-underlying items 4 (23) (400) (553)
--------------------------------------- ------- -------------- ------------- -------------
Operating profit/(loss) 78 (382) (822)
--------------------------------------- ------- -------------- ------------- -------------
Analysed as:
Adjusted EBITDA(1) 305 192 127
Share based payment (charge)/income (20) 59 64
Depreciation and amortisation (184) (233) (460)
Non-underlying items 4 (23) (400) (553)
--------------------------------------- ------- -------------- ------------- -------------
Finance costs 5 (160) (109) (281)
--------------------------------------- ------- -------------- ------------- -------------
Loss before tax (82) (491) (1,103)
--------------------------------------- ------- -------------- ------------- -------------
Analysed as:
Adjusted loss before tax(1) (59) (91) (550)
Non-underlying items 4 (23) (400) (553)
--------------------------------------- ------- -------------- ------------- -------------
Tax (charge)/credit 6 (213) (34) 467
--------------------------------------- ------- -------------- ------------- -------------
Loss for the period attributable
to owners of the parent (295) (525) (636)
--------------------------------------- ------- -------------- ------------- -------------
Loss per share
Basic 7 (0.29p) (0.51p) (0.62p)
Diluted 7 (0.29p) (0.51p) (0.62p)
---------------- ---- ---------- --------- ---------
All activities comprise continuing operations.
(1) Adjusted EBITDA and adjusted loss before tax are non-IFRS
alternative performance measures, defined in Note 1 of the notes to
the interim results.
Consolidated condensed statement of comprehensive income
For the six months ended 30 June 2022
Six months Six months Year
to 30.06.22 to 30.06.21 to 31.12.21
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
------------------------------------------- -------------- ------------- -------------
Loss for the period (295) (525) (636)
Other comprehensive income
Items that will never be reclassified
to profit or loss
Remeasurement of defined benefit pension
scheme (783) 985 1,620
Deferred taxation on remeasurement
of defined benefit pension scheme 274 (187) (567)
------------------------------------------- -------------- ------------- -------------
Other comprehensive income for the
period after tax (509) 798 1,053
------------------------------------------- -------------- ------------- -------------
Total comprehensive income for the
period attributable to owners of the
parent (804) 273 417
------------------------------------------- -------------- ------------- -------------
Consolidated condensed statement of changes in equity
For the six months ended 30 June 2022
Six months to 30.06.22 (Unaudited)
Share Capital
Share premium redemption Other Retained
capital reserve reserve reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- --------- ------------ ---------- ---------- ---------
At 1 January 2022 2,062 33,270 14,319 34,560 (77,184) 7,027
Share options - value of
employee services - - - - 20 20
---------------------------- --------- --------- ------------ ---------- ---------- ---------
Transactions with owners - - - - 20 20
---------------------------- --------- --------- ------------ ---------- ---------- ---------
Loss for the period - - - - (295) (295)
Other comprehensive income
for the period - - - - (509) (509)
At 30 June 2022 2,062 33,270 14,319 34,560 (77,968) 6,243
---------------------------- --------- --------- ------------ ---------- ---------- ---------
Six months to 30.06.21 (Unaudited)
Share Capital
Share premium redemption Other Retained
capital reserve reserve reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- --------- ------------ ---------- ---------- ---------
At 1 January 2021 2,053 33,244 14,319 34,560 (77,537) 6,639
Share options - value of
employee services - - - - (59) (59)
---------------------------- --------- --------- ------------ ---------- ---------- ---------
Transactions with owners - - - - (59) (59)
---------------------------- --------- --------- ------------ ---------- ---------- ---------
Loss for the period - - - - (525) (525)
Other comprehensive income
for the period - - - - 798 798
At 30 June 2021 2,053 33,244 14,319 34,560 (77,323) 6,853
---------------------------- --------- --------- ------------ ---------- ---------- ---------
Year to 31.12.21 (Audited)
Share Capital
Share premium redemption Other Retained
capital reserve reserve reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- --------- ------------ ---------- ---------- ---------
At 1 January 2021 2,053 33,244 14,319 34,560 (77,537) 6,639
Shares issued in the period 9 26 - - - 35
Share options - value of
employee services (64) (64)
----------------------------- --------- --------- ------------ ---------- ---------- ---------
Transactions with owners 9 26 - - (64) (29)
----------------------------- --------- --------- ------------ ---------- ---------- ---------
Loss for the year - - - - (636) (636)
Other comprehensive income
for the year - - - - 1,053 1,053
At 31 December 2021 2,062 33,270 14,319 34,560 (77,184) 7,027
----------------------------- --------- --------- ------------ ---------- ---------- ---------
Consolidated condensed statement of financial position
As at 30 June 2022
As at As at As at
30.06.22 30.06.21 31.12.21
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
------------------------------- ------ -------------- ------------- -----------
Assets
Non-current assets
Goodwill 4,594 4,594 4,594
Other intangible assets 136 4 84
Property, plant and equipment 13 17 15
Right-of-use assets 97 76 149
Trade and other receivables - 58 29
Deferred tax assets 557 405 528
Retirement benefit asset 8 1,243 1,280 1,939
------------------------------- ------ -------------- ------------- -----------
Total non-current assets 6,640 6,434 7,338
------------------------------- ------ -------------- ------------- -----------
Current assets
Trade and other receivables 7,803 7,733 4,768
Cash and cash equivalents 150 904 1,121
Total current assets 7,953 8,637 5,889
------------------------------- ------ -------------- ------------- -----------
Total assets 14,593 15,071 13,227
------------------------------- ------ -------------- ------------- -----------
Liabilities
Current liabilities
Loans and borrowings (4,657) (2,016) (2,279)
Lease liabilities (173) (147) (242)
Trade and other payables (3,478) (5,895) (3,608)
Provisions - (40) -
Total current liabilities (8,308) (8,098) (6,129)
------------------------------- ------ -------------- ------------- -----------
Non-current liabilities
Lease liabilities - (78) (29)
Provisions (42) (42) (42)
Total non-current liabilities (42) (120) (71)
------------------------------- ------ -------------- ------------- -----------
Total liabilities (8,350) (8,218) (6,200)
------------------------------- ------ -------------- ------------- -----------
Net assets 6,243 6,853 7,027
------------------------------- ------ -------------- ------------- -----------
Shareholders' equity
Called up share capital 2,062 2,053 2,062
Share premium account 33,270 33,244 33,270
Capital redemption reserve 14,319 14,319 14,319
Other reserves 34,560 34,560 34,560
Retained earnings (77,968) (77,323) (77,184)
------------------------------- ------ -------------- ------------- -----------
Total shareholders' equity 6,243 6,853 7,027
------------------------------- ------ -------------- ------------- -----------
Consolidated condensed statement of cash flows
For the six months ended 30 June 2022
Six months Six months Year
to 30.06.22 to 30.06.21 to 31.12.21
(Unaudited) (Unaudited) (Audited)
Notes GBP'000 GBP'000 GBP'000
-------------------------------------- ------- -------------- ------------- -------------
Cash flows from operating activities
Loss for the period (295) (525) (636)
Adjustments for:
Net finance expense 5 160 109 281
Share-based payment expense/(income) 20 (59) (64)
Income tax charge/(credit) 6 213 34 (467)
Amortisation of intangible assets 0 2 3
Shares issued in lieu of Directors
fees - - 35
Depreciation of property, plant
and equipment 7 6 12
Depreciation and impairment
of right-to-use assets 177 225 414
Loss on write down of lease
assets - - 31
282 (208) (391)
Working capital movements
(Increase)/decrease in trade
and other receivables (3,036) (1,642) 1,352
(Decrease)/increase in trade
and other payables (130) 1,038 (1,249)
Decrease in provisions - (99) (139)
Payments to retirement benefit
plan 8 (166) (161) (322)
-------------------------------------- ------- -------------- ------------- -------------
Net cash flow used in operating
activities (3,050) (1,072) (749)
-------------------------------------- ------- -------------- ------------- -------------
Investing activities
Purchase of property, plant
and equipment (4) - (4)
Development of intangible assets (54) - (81)
-------------------------------------- ------- -------------- ------------- -------------
Net cash flow used in investing
activities (58) - (85)
-------------------------------------- ------- -------------- ------------- -------------
Financing activities
Drawdown/(repayment) of finance
facility 2,377 (925) (662)
Principal repayment of lease
liabilities (190) (238) (490)
Interest paid 5 (50) (33) (65)
-------------------------------------- ------- -------------- ------------- -------------
Net cash from/ (used in) financing
activities 2,137 (1,196) (1,217)
-------------------------------------- ------- -------------- ------------- -------------
Net decrease in cash and cash
equivalents (971) (2,268) (2,051)
-------------------------------------- ------- -------------- ------------- -------------
Cash and cash equivalents at the
beginning of the period 1,121 3,172 3,172
----------------------------------------------- -------------- ------------- -------------
Cash and cash equivalents at the
end of the period 150 904 1,121
----------------------------------------------- -------------- ------------- -------------
Notes to the interim results
1 Accounting policies
Basis of preparation
The condensed interim financial statements comprise the
unaudited results for the six months to 30 June 2022 and 30 June
2021 and the audited results for the year ended 31 December 2021.
The financial information for the year ended 31 December 2021
herein does not constitute the full statutory accounts for that
period. The 2021 Annual Report and Accounts have been filed with
the Registrar of Companies. The Independent Auditor's Report on the
Annual Report and Financial Statements for 2021 was unqualified and
did not contain a statement under 498(2) or 498(3) of the Companies
Act 2006.
The condensed financial statements for the period ended 30 June
2022 have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with IAS
34 'Interim Financial Reporting'. The information in these
condensed financial statements does not include all the information
and disclosures made in the annual financial statements.
The condensed financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
in a manner consistent with the accounting policies set out in the
Group financial statements for the year ended 31 December 2021.
Going concern
The interim financial statements have been prepared on a going
concern basis. The Directors have reviewed the Group's cash flow
forecasts for the period to 31 December 2023, taking account of
reasonably possible changes in trading performance. Downside
sensitivities have included reduced levels of new business and in
these scenarios, headroom under the Group's financing facility
meets the Group's funding requirements.
Financial instruments
Unless otherwise indicated, the carrying amounts of the Group's
financial assets and liabilities are a reasonable approximation of
their fair values.
Alternative performance measures
The Group uses certain alternative performance measures to
report its results as stated before non-underlying items. These are
non-IFRS alternative performance measures which the Directors
consider can assist with an understanding of the underlying
performance of the Group and comparison of performance across
periods. They are not a substitute for and are not superior to any
IFRS measure.
Adjusted profit/loss before tax is defined as profit/loss before
tax and non-underlying items. Adjusted EBITDA is defined as
operating profit before finance costs, tax, depreciation,
amortisation, share based payments and non-underlying items.
Non-underlying items
The presentation of the alternative performance measures of
adjusted EBITDA and adjusted profit/loss before tax excludes
non-underlying items. The Directors consider that an underlying
profit measure can assist with an understanding of the underlying
performance of the Group and comparison of performance across
periods. Items are classified as non-underlying by nature of their
magnitude, incidence or unpredictable nature and their separate
identification results in a calculation of an underlying profit
measure that is consistent with that reviewed by the Board in their
monitoring of the performance of the Group. Events which may give
rise to the classification of items as non-underlying include gains
or losses on the disposal of a business, restructuring of a
business, transaction costs, litigation and similar settlements,
asset impairments and onerous contracts.
Accounting policies: new standards, amendments and
interpretations
At the date of authorisation of these interim financial
statements, several new, but not yet effective, standards,
amendments to existing standards and interpretations have been
published. None of these have been adopted early by the Group. New
standards, amendments and interpretations not adopted in the
current year have not been disclosed as they are not expected to
have a material impact on the Group.
2 Segmental information
The basis by which the Group is organised and its operating
model is structured, is by customer sectors, being the public
sector and the private sector. The reporting of financial
information presented to the Chief Operating Decision Maker, being
the Group board of directors, is consistent with these reporting
segments. As these reporting segments are supported by a combined
back office, there is no allocation of overheads.
Six months to 30.06.22 (Unaudited)
Public Private Total
sector sector
GBP'000 GBP'000 GBP'000
Revenue 12,137 8,917 21,054
Contractor costs (11,137) (8,000) (19,137)
------------------------------------ --------- ---------- ---------
External contribution 1,000 917 1,917
------------------------------------ --------- ---------- ---------
Six months to 30.06.21 (Unaudited)
Public sector Private Total
sector
GBP'000 GBP'000 GBP'000
Revenue 18,700 7,298 25,998
Contractor costs (17,034) (6,642) (23,676)
------------------------------------ ---------------- ---------- ---------
External contribution 1,666 656 2,322
------------------------------------ ---------------- ---------- ---------
Year to 31.12.21 (Audited)
Public sector Private Total
sector
GBP'000 GBP'000 GBP'000
Revenue 32,544 14,418 46,962
Contractor costs (29,691) (13,191) (42,882)
---------------------------- ---------------- ---------- ---------
External contribution 2,853 1,227 4,080
---------------------------- ---------------- ---------- ---------
3 Revenue
The Group's revenue disaggregated by pattern of revenue
recognition is as follows:
Six months Six months Year to
to 30.06.22 to 30.06.21 31.12.21
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
--------------------------------- -------------- ------------- -----------
Services transferred over time 20,985 25,981 46,934
Services transferred at a point
in time 69 17 28
Revenue 21,054 25,998 46,962
--------------------------------- -------------- ------------- -----------
4 Non-underlying items
Six months Six months Year to
to to 31.12.21
30.06.22 30.06.21 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
------------------------------ -------------- ------------- -----------
Restructuring
- Costs related to employees 23 366 502
- Costs related to premises - 34 31
- Other costs - - 20
23 400 553
------------------------------ -------------- ------------- -----------
Items are classified as non-underlying by nature of their
magnitude, incidence or unpredictable nature and their separate
identification results in a calculation of an underlying profit
measure that is consistent with that reviewed by the Board in their
monitoring of the performance of the Group.
5 Finance costs
Six months Six months Year to
to to 31.12.21
30.06.22 30.06.21 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
--------------------------------------- -------------- ------------- -----------
Interest expense on financial
liabilities 50 33 65
Interest expense on lease liabilities 4 4 8
Interest income on lease assets (1) (2) (3)
Net finance costs in respect of
post-retirement benefits 107 74 211
160 109 281
--------------------------------------- -------------- ------------- -----------
The interest expense on financial liabilities represents
interest paid on the Group's asset-based financing facilities.
6 Taxation
Six months Six months Year to
to to 31.12.21
30.06.22 30.06.21 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
------------------------------------ -------------- ------------- -----------
Recognised in the income statement
Current tax charge - - -
Deferred tax charge/(credit) 213 34 (467)
------------------------------------ -------------- ------------- -----------
Total tax charge/(credit) 213 34 (467)
------------------------------------ -------------- ------------- -----------
Recognised in other comprehensive
income
Deferred tax (credit)/charge (274) 187 567
------------------------------------ -------------- ------------- -----------
7 Earnings per ordinary share
Basic earnings per share is calculated by dividing the basic
earnings for the period by the weighted average number of fully
paid ordinary shares in issue during the period. Diluted earnings
per share is calculated on the same basis as the basic earnings per
share with a further adjustment to the weighted average number of
fully paid ordinary shares to reflect the effect of all dilutive
potential ordinary shares.
Six months to 30.06.22 Six months to 30.06.21 Year to 31.12.21
(Unaudited) (Unaudited) (Audited)
------------------- ------------------------------- ------------------------------- -------------------------------
Weighted Weighted Weighted
average average average
number Loss number Loss number Loss
Loss of per Loss of per Loss of per
GBP'000 shares share GBP'000 shares share GBP'000 shares share
000's Pence 000's Pence 000's Pence
------------------- ---------- --------- -------- ---------- --------- -------- ---------- --------- --------
Basic loss
per share (295) 103,076 (0.29) (525) 102,624 (0.51) (636) 102,854 (0.62)
Effect of dilutive - - - - - - - - -
options
Diluted loss
per share (295) 103,076 (0.29) (525) 102,624 (0.51) (636) 102,854 (0.62)
As at 30 June 2022, the number of ordinary shares in issue was
103,075,633 (30 June 2021: 102,624,020 and 31 December 2021:
103,075,633).
8 Pension commitments
The Group provides employee benefits under various arrangements,
through defined benefit and defined contribution pension plans, the
details of which are disclosed in the 2021 Annual Report and
Accounts. At the interim balance sheet date, the major assumptions
used in assessing the defined benefit pension scheme liability have
been reviewed and updated based on a roll-forward of the last
formal actuarial valuation, which was carried out as at April
2018.
The following estimates have been applied to the IAS 19
valuation:
30.06.22 30.06.21 31.12.21
--------------------------------- --------- --------- ---------
Rate of increase in pensions in 3.7-4.0% 3.7-4.0% 3.8-4.0%
payment
Discount rate 3.8% 1.8% 1.9%
Retail price inflation 3.4% 3.4% 3.6%
Consumer price inflation 2.4% 2.4% 2.6%
--------------------------------- --------- --------- ---------
The surplus has reduced by GBP783k since 31 December 2021,
primarily as a result of volatility and weakness in the investment
markets during the period.
9 Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are
therefore not disclosed.
In 2021, the Group engaged the marketing services of CRM Squad.
The Executive Chairman Mark Braund is an owner and Director of CRM
Squad. The total value of services received from CRM Squad in the
six months to 30 June 2022 was GBP31,500 (Six months to 30 June
2021: none, Year to 31 December 2021: GBP12,180).
10 Events after the reporting period
There are no events after the reporting period not reflected in
the interim financial statements.
Statement of directors' responsibilities
The directors confirm, to the best of their knowledge:
-- The condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting';
-- The interim management report includes a fair review of the
information required by DTR 4.2.7R of the Disclosure and
Transparency Rules of the United Kingdom's Financial Services
Authority, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the year, and gives a true and fair view of
the assets, liabilities, financial position and profit for the
period of the Group; and
-- The interim management report includes a fair review of the
information required by DTR 4.2.8R of the Disclosure and
Transparency Rules of the United Kingdom's Financial Services
Authority, being a disclosure of related party transactions and
changes therein since the previous annual report.
By order of the Board
Mark Braund
Executive Chairman
29 September 2022
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END
IR UWVNRUWUKUAR
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