t
Christie Group plc announced its interim results for the six months ended 30 June 2021 on 20 September 2021. The Group reported revenues of £28.6 million, a 52% increase from H1 2020, and an operating profit of £1.8 million, compared to a £5.5 million loss in the prior year. An interim dividend of 1.0p per share was reinstated, payable on 29 October 2021 to shareholders registered on 1 October 2021.
| Date | 20 Sept 2021 |
| Time | 07:00:07 |
| Category | Results |
| ID | 2071M |
20 September 2021
Christie Group plc
Interim Results for the six months ended 30 June 2021
Christie Group plc ('Christie Group' or the 'Group'), the leading provider of Professional & Financial Services (PFS) and Stock & Inventory Systems & Services (SISS) to the hospitality, leisure, healthcare, medical, childcare & education and retail sectors, is pleased to announce its interim results for the six months ended 30 June 2021.
H1 2021 Highlights
|
· Revenues up by £9.8m (52%) to £28.6m (H1 2020: £18.8m)
· Operating profit improved to £1.8m up by £7.3m compared to the PY (H1 2020: £5.5m loss)
· Re-instatement of interim dividend of 1.0p (H1 2020: nil)
· Strong cash balance at 30 June 2021 of £9.8m
· Earnings per share 3.17p - H1 2020: (18.54p negative)
· Pension liability reduced by £5.1m, 26% in H1
· SISS division adversely affected by the lockdown
· We look forward to a strong and profitable H2 |
Commenting on the results, David Rugg, Chairman and Chief Executive of Christie Group, said:
"The Group's results reflect the continued recovery which began in the third quarter of 2020. The excellent performance in the PFS division was partially absorbed by the unavoidable losses in the SISS division as a result of the lockdown. Our third quarter trading has started well, and with the resurgence of demand in our hospitality activities in both the UK & Europe and barring further lockdowns, we look forward to a strong and profitable second half. If the current PFS division performance continues, we would expect to exceed the current market operating profit expectation for the year."
Enquiries:
|
Christie Group plc |
|
|
David Rugg Chairman and Chief Executive |
020 7227 0707 |
|
Daniel Prickett Chief Operating Officer
Simon Hawkins Group Finance Director
|
020 7227 0700
020 7227 0700 |
|
Shore Capital Patrick Castle Nominated Adviser & Broker
|
020 7408 4090 |
Notes to Editors:
Christie Group plc (CTG.L), quoted on AIM, is a leading professional business services group with 40 offices across the UK and Europe, catering to its specialist markets in the hospitality, leisure, healthcare, medical, childcare & education and retail sectors.
Christie Group operates in two complementary business divisions: Professional & Financial Services (PFS) and Stock & Inventory Systems & Services (SISS). These divisions trade under the brand names: PFS - Christie & Co, Pinders, Christie Finance and Christie Insurance: SISS - Orridge, Venners and Vennersys.
Tracing its origins back to 1846, the Group has a long-established reputation for offering valued services to client companies in agency, valuation services, investment, consultancy, project management, multi-functional trading systems and online ticketing services, stock audit and inventory management. The diversity of these services provides a natural balance to the Group's core agency business.
The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of Article 7 of the UK Market Abuse Regulation (EU) No. 596/2014 which is part of the UK law by virtue of the European Union (Withdrawal) Act 2018.
For more information, please go to www.christiegroup.com.
Chairman and Chief Executive's review
I am pleased to report a strong first half. Revenue for the six months ended 30 June 2021 increased by £9.8m to £28.6m (H1 2020: £18.8m), an increase of 52%.
In the same period we produced an operating profit of £1.8m (H1 2020: £5.5m loss) despite the restrictions to trade caused by the ongoing pandemic. The excellent results generated by our Professional & Financial Services (PFS) division were partially absorbed by unavoidable losses in our Stock & Inventory Systems & Services (SISS) division.
That rate of loss in SISS has already been significantly stemmed following the reopening of the hospitality sector. These results confirm our continued recovery which began in the third quarter of 2020.
We ended the first half with net cash in excess of £8m, having made repayments of debt and other deferred liabilities of £2.9m in the period. Indeed, during the period we repaid £1.0m of the CLBILS loan, taking the total repayment to £2.0m of a total £6.0m originally drawn down.
We are pleased to report a £5.1m reduction in the liability relating to our defined benefit pension schemes since the end of 2020. This improvement reflects actuarial gains in both asset values and scheme liabilities, aided by the movement in gilt yields and the positive impact on discount rates. Reflecting the defined benefit schemes' trustees' investment strategy, scheme assets are currently invested on a weighting of 83% in 'growth' assets and 17% in 'protection' assets. Within the growth assets classification, we consider 8% of the 83% to be intentionally defensive and low-volatility in their nature and by reference to the historic performance experience of those funds.
Professional & Financial Services
Our Professional & Financial Services division generated revenue of £20.6m for the period, contributing an operating profit of £3.1m. This compares with revenue of £11.5m and a significant operating loss of £2.9m for the corresponding period last year.
Our agency & advisory businesses have enjoyed strong demand for businesses coming to the market. This coupled with limited supply, has ensured some record prices achieved.
Christie & Co advised on the strategic investment by TriSpan in Scotland's second largest dental group, Real Good Dental, which serves 350,000 patients across 46 practices. Other notable transactions in which our Medical team were involved included the sale of two groups comprising 14 pharmacies to Mr Pickford's, creating a top 30 UK group.
In Healthcare, our team sold 13 homes in Northern Ireland to St Anne's Care on behalf of Four Seasons Health Care, while also successfully advising on the sale of a forward-funded investment with planning permission for a state-of-the-art care home in Market Harborough, pre-let to Care UK.
Our Childcare & Education team brokered the sale of Poppies Day Nurseries, increasing the national operator, Family First Nurseries' portfolio to a total of 17 nurseries. They also brokered the sale of three freehold therapeutic children's homes with on-site education.
Our Retail team have sold two service station forecourts to Ascona in 2021 so far, bringing their total portfolio to 59 of which 33 have been sold by Christie & Co.
Our pan-European Hotel team sold the Qbic London City hotel, London's leading 'green' hotel, comprising 183 bedrooms. In France they sold a portfolio of 9 hotels between the Ile-de-France & the Pays de la Loire and in Austria they sold the 'der Grune Baum Mountain Boutique Hotel' in the Zugspitze region to g2hotels, a German operator.
Our Pubs & Restaurants team sold several groups, including six pubs sold on behalf of the administrators, BDO, of Seafood Pub Company Holdings Ltd to The Oakman Group, as well as high volumes of individual pubs & restaurants.
Overall, we sold 535 businesses in the first half of 2021 and have been unable to identify any UK headquartered competitor which sells as many businesses.
Pinders, our business appraisal company, has achieved a 'V' shaped recovery and is now regularly valuing more businesses than in 2019 and at higher average fees. Patronage has been boosted by Pinders' development and inclusion of benchmark data covering, for example, dental practices and social care.
Christie Finance arranged funding for 79% more Christie & Co sales in the first half of 2021 compared to the same period in 2020 and its success rate has increased by 20%. Christie Finance also procured funding for the Fan Museum's installation of our Vennersys system, illustrating the potential for further cross selling between these two subsidiaries.
In some cases Christie Insurance foresee that clients will experience increasing fire insurance premiums or restricted cover, reflecting insurers' lack of confidence that fires will be contained within areas of buildings, as distinct from total loss.
Stock & Inventory Systems & Services
The division generated revenues of £8.0m for the first half of the year, an increase of 8% on the prior year (H1 2020: £7.4m). The comparable operating loss was reduced from £2.6m to £1.3m.
The majority of the loss was caused by the virtual closure of much of the hospitality sector for a significant period due to covid-related restrictions. The greatest business impact of the pandemic upon our Group has been the effect of the Hospitality industry lockdown on Venners, our food & beverage stocktaker.
Clients' business activities were significantly curtailed before 17th May this year. This in turn dictated that Venners' own activity was limited. Since the period end some 95% of our clients have returned or signified their intent to return to us as confidence gradually returns to the sector, but volumes of work are a little over 50% of pre pandemic levels and increasing as throughput grows. At this level Venners is currently profitable. Venners is also attracting new clients, converting over 70% of all quotations. New clients include Balfour Beatty, an international infrastructure group.
Orridge, our UK & European stocktaking business, has been returned to profit for the half year. Understandably, new business has been concentrated in the supply chain area of distribution warehouses and goods inward delivery checks. New wins include One Stop, Acelor Mittal, Clarins, Nicholas and I.D. Group.
Whilst we incentivise our own counting operatives enabling them to enhance their earnings, other industries are competing for hourly paid staff, and we expect market pay rates to rise.
Looking forward, we have entered the veterinary sector which complements our dispensary expertise in the Pharmacy sector.
Vennersys, our online visitor attractions SaaS business, has enjoyed a belated, but bumper season as venues reopened. Our timed ticketing is essential to enable our clients to safely spread occupancy and monitor the duration of visits. New sites won include Woodside Animal Farm, Hopetown, Great British Car Journey and Chiswick House. Our fastest 'go live' was achieved in just three days from the order being placed.
New developments will enable us to interface through platforms with a wide range of accommodation, travel, accounting, and other sites. This will keep our systems integral to our existing clients' growing businesses and generate further revenue from them. These developments are also key to attracting larger venues for 2022 & beyond.
Future working model
Where permissible we have made each of our offices available for staff and prebooked client meetings. We are experiencing a gradual return to our offices.
There have been proven efficiency gains through the necessity of home working and the use of video conferencing & forums. We hope to retain such efficiencies, but also to encourage physical presence in our premises to protect the wellbeing of our people, engender team spirit and to facilitate recruitment, training & monitoring.
Each of our businesses continue to invest in technology.
Additionally, we will be making available central resource to ensure that we take full advantage of new technological availability & digital expertise to enable us to differentiate our leadership.
Dividend
In the light of current trading and our future prospects, your Board have declared a reinstated interim dividend of 1.0p per share (H1 2020: 0.0p) which will be paid on 29 October 2021 to shareholders on the register on 1 October 2021. We thank you for your forbearance as to dividends last year.
Summary and Outlook
The results today and those in prospect for the whole year result from the sterling efforts of those determined to function professionally both during lockdown periods & since.
We are indebted to all our people whom we appreciate and hold dear. I thank them both personally and for you all.
Our rampant performance through the end of our first half in business sales transactions, significant portfolio valuations and consultancy assignments already point to a strong third quarter performance. With the resurgence of demand in our hospitality activities in both the UK & Europe and barring further lockdowns, we look forward to a strong and profitable second half. If the current Professional & Financial Services division performance continues, we would expect to exceed the current market operating profit expectation for the year.
Stay well.
David Rugg
Chairman and Chief Executive
Independent Review Report to Christie Group plc for half year ended 30 June 2021
We have been engaged by Christie Group plc ("the Company") to review the financial information for the six months ended 30 June 2021 which comprises the consolidated interim income statement, the consolidated interim statement of comprehensive income, the consolidated interim statement of changes in shareholders' equity, the consolidated interim statement of financial position, the consolidated interim statement of cash flows and related notes 1 to 16. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.
This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing Practices Board and our Engagement Letter dated 2 September 2021. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.
Respective responsibilities of directors and auditor
The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting', and the AIM Rules issued by the London Stock Exchange, which requires that the interim report must be prepared and presented in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.
Our responsibility is to express to the Company a conclusion on the consolidated financial information in the interim report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the consolidated financial information in the interim report does not give a true and fair view of the financial position of the Company as at 30 June 2021 and of its financial performance and its cash flows for the six months then ended, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting', and the AIM Rules issued by the London Stock Exchange.
Stephen Eames (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
MK9 1FF
17 September 2021
Consolidated interim income statement
|
|
Note |
Half year to 30 June 2021 £'000 (Unaudited) |
Half year to 30 June 2020 £'000 (Unaudited) |
Year ended 31 December 2020 £'000 (Audited) |
|
Revenue |
5 |
28,587 |
18,844 |
42,224 |
|
Other income - government grants |
4 |
2,140 |
5,047 |
8,182 |
|
Employee benefit expenses |
|
(21,858) |
(21,209) |
(40,338) |
|
Other operating expenses |
|
(7,062) |
(8,160) |
(14,423) |
|
Operating profit/(loss) before restructuring costs |
|
1,807 |
(5,478) |
(4,355) |
|
Restructuring costs |
|
- |
- |
(672) |
|
Operating profit/(loss) after restructuring costs |
|
1,807 |
(5,478) |
(5,027) |
|
Finance costs |
|
(609) |
(522) |
(1,316) |
|
Finance income |
|
- |
- |
4 |
|
Total finance charge |
|
(609) |
(522) |
(1,312) |
|
Profit/(loss) before tax |
|
1,198 |
(6,000) |
(6,339) |
|
Taxation |
6 |
(367) |
1,140 |
1,277 |
|
Profit/(loss) for the period after tax |
|
831 |
(4,860) |
(5,062) |
|
|
||||
Profit/(loss) for the period after tax is wholly attributable to equity shareholders of the parent.
Earnings per share attributable to equity holders - pence
All amounts derive from continuing operations
|
Basic |
7 |
3.17 |
(18.54) |
(19.32) |
|
Diluted |
7 |
3.13 |
(18.54) |
(19.32) |
Consolidated interim statement of comprehensive income
|
|
|
Half year to 30 June 2021 £'000 (Unaudited) |
Half year to 30 June 2020 £'000 (Unaudited) |
Year ended 31 December 2020 £'000 (Audited) |
|
Profit/(loss) for the period after tax |
|
831 |
(4,860) |
(5,062) |
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
|
|
Exchange differences on translating foreign operations |
|
(32) |
7 |
(34) |
|
Net other comprehensive (losses)/income to be reclassified to profit or loss in subsequent periods |
|
(32) |
7 |
(34) |
|
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
Re-measurement gains/(losses) on defined benefit plans |
|
5,321 |
(4,748) |
(8,052) |
|
Income tax effect |
|
(1,011) |
903 |
1,770 |
|
Net other comprehensive income/(losses) not being reclassified to profit or loss in subsequent periods |
|
4,310 |
(3,845) |
(6,282) |
|
Other comprehensive income/(losses) for the period |
|
4,278 |
(3,838) |
(6,316) |
|
Total comprehensive income/(losses) for the period |
|
5,109 |
(8,698) |
(11,378) |
Total comprehensive income/(losses) for the period is wholly attributable to equity shareholders of the parent.
Consolidated interim statement of changes in shareholders' equity
|
|
Share capital £'000 |
Other reserves £'000 |
Cumulative translation reserve £'000 |
Retained earnings £'000 |
Total equity £'000 |
|
|
Half year to 30 June 2021 (unaudited) |
|
|
|
|
|
|
|
Balance at 1 January 2021 |
531 |
5,462 |
586 |
(17,972) |
(11,393) |
|
|
Profit for the period after tax |
- |
- |
- |
831 |
831 |
|
|
Items that will not be reclassified subsequently to profit or loss |
- |
- |
- |
4,310 |
4,310 |
|
|
Items that may be reclassified subsequently to profit or loss |
- |
- |
(32) |
- |
(32) |
|
|
Total comprehensive (losses)/income for the period |
- |
- |
(32) |
5,141 |
5,109 |
|
|
Movement in respect of employee share scheme |
- |
30 |
- |
- |
30 |
|
|
Employee share option scheme: |
|
|
|
|
|
|
|
- value of services provided |
- |
(229) |
- |
- |
(229) |
|
|
Balance at 30 June 2021 |
531 |
5,263 |
554 |
(12,831) |
(6,483) |
|
|
|
||||||
|
Half year to 30 June 2020 (unaudited) |
||||||
|
Balance at 1 January 2020 |
531 |
5,443 |
620 |
(6,628) |
(34) |
|
|
Loss for the period after tax |
- |
- |
- |
(4,860) |
(4,860) |
|
|
Items that will not be reclassified subsequently to profit or loss |
- |
- |
- |
(3,845) |
(3,845) |
|
|
Items that may be reclassified subsequently to profit or loss |
- |
- |
7 |
- |
7 |
|
|
Total comprehensive income/(losses) for the period |
- |
- |
7 |
(8,705) |
(8,698) |
|
|
Movement in respect of employee share scheme |
- |
18 |
- |
- |
18 |
|
|
Employee share option scheme: |
|
|
|
|
|
|
|
- value of services provided |
- |
(75) |
- |
- |
(75) |
|
|
Balance at 30 June 2020 |
531 |
5,386 |
627 |
(15,333) |
(8,789) |
|
|
|
|
|
|
|
|
|
|
Year ended 31 December 2020 (audited) |
||||||
|
Balance at 1 January 2020 |
531 |
5,443 |
620 |
(6,628) |
(34) |
|
|
Loss for the year after tax |
- |
- |
- |
(5,062) |
(5,062) |
|
|
Items that will not be reclassified subsequently to profit or loss |
- |
- |
- |
(6,282) |
(6,282) |
|
|
Items that may be reclassified subsequently to profit or loss |
- |
- |
(34) |
- |
(34) |
|
|
Total comprehensive losses for the year |
- |
- |
(34) |
(11,344) |
(11,378) |
|
|
Movement in respect of employee share scheme |
- |
(27) |
- |
- |
(27) |
|
|
Employee share option scheme: |
|
|
|
|
|
|
|
- value of services provided |
- |
46 |
- |
- |
46 |
|
|
Balance at 31 December 2020 |
531 |
5,462 |
586 |
(17,972) |
(11,393) |
|
|
|
Note |
At 30 June 2021 £'000 (Unaudited) |
At 30 June 2020 £'000 (Unaudited) |
At 31 December 2020 £'000 (Audited) |
|
Assets |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Intangible assets - Goodwill |
|
1,818 |
1,867 |
1,855 |
|
Intangible assets - Other |
|
1,014 |
1,147 |
1,038 |
|
Property, plant and equipment |
|
1,546 |
1,397 |
1,819 |
|
Right of use assets |
|
5,461 |
6,153 |
5,774 |
|
Deferred tax assets |
|
3,867 |
4,875 |
5,114 |
|
Other receivables |
|
2,263 |
1,900 |
2,263 |
|
|
|
15,969 |
17,339 |
17,863 |
|
Current assets |
|
|
|
|
|
Inventories |
|
14 |
24 |
24 |
|
Trade and other receivables |
9 |
11,895 |
7,697 |
10,624 |
|
Current tax assets |
|
1,005 |
240 |
976 |
|
Cash and cash equivalents |
14 |
9,785 |
13,415 |
10,284 |
|
|
|
22,699 |
21,376 |
21,908 |
|
Total assets |
|
38,668 |
38,715 |
39,771 |
|
Equity |
|
|
|
|
|
Capital and reserves attributable to the Company's equity holders |
|
|
||
|
Share capital |
10 |
531 |
531 |
531 |
|
Other reserves |
|
5,263 |
5,386 |
5,462 |
|
Cumulative translation reserve |
|
554 |
627 |
586 |
|
Retained earnings |
|
(12,831) |
(15,333) |
(17,972) |
|
Total equity |
|
(6,483) |
(8,789) |
(11,393) |
|
Liabilities |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Trade and other payables |
|
50 |
464 |
50 |
|
Retirement benefit obligations |
11 |
14,997 |
16,727 |
20,136 |
|
Borrowings |
|
2,000 |
4,000 |
3,000 |
|
Lease liabilities |
|
7,750 |
8,365 |
7,999 |
|
Provisions |
|
1,027 |
593 |
1,004 |
|
|
|
25,824 |
30,149 |
32,189 |
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
12 |
12,186 |
12,585 |
13,316 |
|
Current tax liabilities |
|
- |
43 |
- |
|
Borrowings |
|
4,751 |
2,322 |
3,206 |
|
Lease liabilities |
|
1,219 |
1,122 |
1,296 |
|
Provisions |
|
1,171 |
1,283 |
1,157 |
|
|
|
19,327 |
17,355 |
18,975 |
|
Total liabilities |
|
45,151 |
47,504 |
51,164 |
|
Total equity and liabilities |
|
38,668 |
38,715 |
39,771 |
|
|
Note |
Half year to 30 June 2021 £'000 (Unaudited) |
Half year to 30 June 2020 £'000 (Unaudited) |
Year ended 31 December 2020 £'000 (Audited) |
|
Cash flow from operating activities |
|
|
|
|
|
Cash generated from operations |
13 |
362 |
3,819 |
2,503 |
|
Interest paid |
|
(478) |
(421) |
(1,081) |
|
Tax paid |
|
(127) |
(150) |
(197) |
|
Net cash generated (used in)/from operating activities |
|
(243) |
3,248 |
1,225 |
|
Cash flow from investing activities |
|
|
|
|
|
Purchase of property, plant and equipment |
|
(32) |
(140) |
(899) |
|
Proceeds from sale of property, plant and equipment |
|
- |
- |
15 |
|
Interest received |
|
- |
- |
4 |
|
Intangible assets expenditure |
|
(161) |
(99) |
(184) |
|
Net cash used in investing activities |
|
(193) |
(239) |
(1,064) |
|
Cash flow from financing activities |
|
|
|
|
|
Proceeds from loan |
|
- |
6,000 |
6,000 |
|
Repayment of bank borrowings |
|
(1,000) |
- |
(1,000) |
|
Repayment of other loan |
|
- |
(910) |
(910) |
|
Proceeds/(repayment) from invoice discounting |
|
671 |
(641) |
(476) |
|
Repayment of lease liabilities |
|
(599) |
(672) |
(825) |
|
Net cash generated (used in)/from financing activities |
|
(928) |
3,777 |
2,789 |
|
Net (decrease)/increase in cash |
|
(1,364) |
6,786 |
2,950 |
|
Cash and cash equivalents at beginning of period |
|
9,565 |
6,625 |
6,625 |
|
Exchange (losses)/gain on euro bank accounts |
|
(9) |
4 |
(10) |
|
Cash and cash equivalents at end of period |
14 |
8,192 |
13,415 |
9,565 |
Notes to the consolidated interim financial statements
Christie Group plc is a public limited company incorporated in and operating from England. The Company ordinary shares are traded on the AIM Market operated by the London Stock Exchange. Christie Group plc is the parent undertaking of a group of companies covering a range of related activities. These fall into two divisions - Professional & Financial Services and Stock & Inventory Systems & Services. Professional & Financial Services principally covers business valuation, consultancy & agency, business mortgages & insurance services and business appraisal. Stock & Inventory Systems & Services covers stock audit & counting, consulting, compliance, inventory preparation & valuation and hospitality & software solutions.
The interim financial information in this report has been prepared using accounting policies consistent with United Kingdom adopted IFRS. The financial information has been prepared on the basis of IFRS that the Directors expect to be endorsed by the UKEB as at the date of approval of the 31 December 2021 accounts.
The interim financial statements have been prepared in accordance with IAS 34 and the accounting policies applied in the financial statements for the year ended 31 December 2020. Taxes on income in the interim periods are accrued using the effective tax rate that would be applicable to expected total annual earnings.
Going concern
Having reviewed the Group's budgets, projections and funding requirements to 31st December 2022, and taking account of reasonable possible changes in trading performance over this period, particularly in light of Covid-19 risks and counter measures, the Directors believe they have reasonable grounds for stating that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing these interim accounts.
The forecasts for the combined Group projections, taking account of reasonably possible changes in trading performance, indicate that the Group has sufficient facilities and headroom to continue in operational existence to 31st December 2022. As a consequence, the Board believes that the Group is well placed to manage its business risks, and longer-term strategic objectives.
Non-statutory accounts
These consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The financial information for the year ended 31 December 2020 set out in this interim report does not constitute the Group's statutory accounts for that period. The statutory accounts for the year ended 31 December 2020 have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis. The financial information for the periods ended 30 June 2021 and 30 June 2020 is unaudited.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(a) Estimated impairment of goodwill
Goodwill are subject to an impairment review both annually and when there are indications that the carrying value may not be recoverable. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates.
(b) Retirement benefit obligations
The assumptions used to measure the expense and liabilities related to the Group's defined benefit pension plans are reviewed biannually at the statement of financial position date by professionally qualified, independent actuaries, trustees and management as appropriate. Management base their assumptions on their understanding and interpretation of applicable scheme rules which prevail at the statement of financial position date. The measurement of the expense for a period requires judgement with respect to the following matters, among others:
- the probable long-term rate of increase in pensionable pay;
- the discount rate; and
- the estimated life expectancy of participating members.
The assumptions used by the Group, may differ materially from actual results, and these differences may result in a significant impact on the amount of pension expense recorded in future periods. In accordance with IAS 19, the Group recognises all actuarial gains and losses immediately in other comprehensive income.
(c) Deferred taxation
Deferred tax assets are recognised to the extent that the Group believes it is probable that future taxable profit will be available against which temporary timing differences and losses from previous periods can be utilised. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
The Group has benefited from Government support due to the Covid-19 business disruption, utilising the furlough scheme from its commencement which has provided financial assistance towards employee salaries. Government grants have been recognised in the Consolidated Interim Income Statement, under the category Other income - government grants.
5. Segment information
The Group is organised into two main business segments: Professional & Financial Services (PFS) and Stock & Inventory Systems & Services (SISS).
The segment results for the period ended 30 June 2021 are as follows:
|
|
PFS £'000 |
SISS £'000 |
Other £'000 |
Group £'000 |
|
Total gross segment revenue |
20,624 |
8,018 |
1,700 |
30,342 |
|
Inter-segment revenue |
(55) |
- |
(1,700) |
(1,755) |
|
Revenue |
20,569 |
8,018 |
- |
28,587 |
|
Operating profit/(loss) |
3,092 |
(1,285) |
- |
1,807 |
|
Finance costs |
(527) |
(82) |
- |
(609) |
|
Profit/(loss) before tax |
2,565 |
(1,367) |
- |
1,198 |
|
Taxation |
|
|
|
(367) |
|
Profit for the period after tax |
|
|
831 |
|
The segment results for the period ended 30 June 2020 are as follows:
|
|
PFS £'000 |
SISS £'000 |
Other £'000 |
Group £'000 |
|
Total gross segment revenue |
11,492 |
7,407 |
1,535 |
20,434 |
|
Inter-segment revenue |
(55) |
- |
(1,535) |
(1,590) |
|
Revenue |
11,437 |
7,407 |
- |
18,844 |
|
Operating loss |
(2,863) |
(2,615) |
- |
(5,478) |
|
Finance costs |
(416) |
(106) |
- |
(522) |
|
Loss before tax |
(3,279) |
(2,721) |
- |
(6,000) |
|
Taxation |
|
|
|
1,140 |
|
Loss for the period after tax |
|
|
(4,860) |
|
The segment results for the year ended 31 December 2020 are as follows:
|
|
PFS £'000 |
SISS £'000 |
Other £'000 |
Group £'000 |
|
Total gross segment revenue |
26,320 |
16,014 |
3,123 |
45,457 |
|
Inter-segment revenue |
(110) |
- |
(3,123) |
(3,233) |
|
Revenue |
26,210 |
16,014 |
- |
42,224 |
|
Operating loss |
(1,863) |
(3,164) |
- |
(5,027) |
|
Finance costs |
(824) |
(227) |
(261) |
(1,312) |
|
Loss before tax |
(2,687) |
(3,391) |
(261) |
(6,339) |
|
Taxation |
|
|
|
1,277 |
|
Loss for the year after tax |
|
|
(5,062) |
|
Revenue recognised in the period has been derived from the provision of services provided when the performance obligation has been satisfied.
Deferred tax assets have been recognised in respect of tax losses and other temporary differences giving rise to deferred tax assets where it is probable that these assets will be recovered.
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, which excludes the shares held in the Employee Share Ownership Plan (ESOP) trust.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares, once performance conditions are met. The Company has only one category of potential dilutive ordinary shares: share options.
The calculation is performed for the share options to determine the number of shares that could have been issued at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
|
|
Half year to 30 June 2021 £'000 |
Half year to 30 June 2020 £'000 |
Year ended 31 December 2020 £'000 |
|
Profit/(loss) attributable to the equity holders |
831 |
(4,860) |
(5,062) |
|
|
30 June 2021 Thousands |
30 June 2020 Thousands |
31 December 2020 Thousands |
|
Weighted average number of ordinary shares in issue |
26,220 |
26,211 |
26,220 |
|
Adjustment for share options |
340 |
1,809 |
843 |
|
Weighted average number of ordinary shares for diluted earnings per share |
26,560 |
28,020 |
27,063 |
|
|
30 June 2021 Pence |
30 June 2020 Pence |
31 December 2020 Pence |
|
Basic earnings per share |
3.17 |
(18.54) |
(19.32) |
|
Diluted earnings per share |
3.13 |
(18.54) |
(19.32) |
8. Dividends
An interim dividend in respect of 2021 of 1.00p per share, amounting to a dividend of £265,000, was declared by the directors at their meeting on 14 September 2021. These financial statements do not reflect this dividend payable.
The dividend of 1.00p per share will be payable to shareholders on the record on 1 October 2021. The dividend will be paid on 29 October 2021.
No dividend in respect of 2020 was declared or made in respect in 2020.
9. Trade and other receivables
|
|
Half year to 30 June 2021 £'000 |
Half year to 30 June 2020 £'000 |
Year ended 31 December 2020 £'000 |
|
Trade receivables |
7,272 |
3,097 |
4,985 |
|
Less: provision for impairment of receivables |
(704) |
(861) |
(681) |
|
Other debtors |
2,973 |
2,075 |
2,930 |
|
Prepayments and accrued income |
2,354 |
3,386 |
3,390 |
|
|
11,895 |
7,697 |
10,624 |
The fair value of trade and other receivables approximates to the carrying value as detailed above
|
|
30 June 2021 |
30 June 2020 |
31 December 2020 |
|||
|
Ordinary shares of 2p each |
Number |
£'000 |
Number |
£'000 |
Number |
£'000 |
|
Allotted and fully paid: |
|
|
|
|
|
|
|
At beginning and end of period |
26,526,729 |
531 |
26,526,729 |
531 |
26,526,729 |
531 |
The Company has one class of ordinary shares which carry no right to fixed income.
Investment in own shares
The Group has established an Employee Share Ownership Plan (ESOP) trust to meet its future contingent obligations under the Group's share option schemes. The ESOP purchases shares in the market for distribution at a later date in accordance with the terms of the Group's share option schemes. The rights to dividend on the shares held have been waived.
The Group operates two defined benefit schemes (closed to new members) providing pensions on final pensionable pay. The contributions are determined by qualified actuaries based on triennial valuations using the projected unit method.
When a member retires, the pension and any spouse's pension is either secured by an annuity contract or paid from the managed fund. Assets of the schemes are reduced by the purchase price of any annuity purchase and the benefits no longer regarded as liabilities of the scheme.
The obligation outstanding of £14,997,000 (30 June 2020: £16,727,000; 31 December 2020: £20,136,000) includes £1,353,000 (30 June 2020: £1,359,000; 31 December 2020: £1,449,000) payable to David Rugg by Christie Group plc. The movement in the pension liability attributable to David Rugg's pension arises entirely from a change in the actuarial assumptions used and the discount rate applied. There have been no changes to the amounts payable to Mr Rugg.
The defined benefit obligation as at 30 June 2021 is calculated on a year-to-date basis, using the latest actuarial valuation as at 30 June 2021. There have been no significant market fluctuations and significant one-off events, such as plan amendments, curtailments and settlements that have resulted in an adjustment to the actuarially determined pension cost since the end of the prior financial year. The defined benefit plan assets have been updated to reflect their market value at 30 June 2021. However, significant market fluctuations have caused a change in the discount rate applied to the defined benefit obligation resulting in a decrease in the liability.
The amounts recognised in the statement of comprehensive income and the movement in the liability recognised in the statement of financial position have been based on the forecast position for the year ended 31 December 2021 after adjusting for the actual contributions to be paid in the period.
In addition, the Group operates a defined contribution scheme for participating employees. Payments to the scheme are charged as an employee benefit as they fall due. The Group has no further payment obligations once the contributions have been paid.
The movement in the liability recognised in the statement of financial position is as follows:
|
Half year to 30 June 2021 £'000 |
Half year to 30 June 2020 £'000 |
Year ended 31 December 2020 £'000 |
|
|
Beginning of the period |
20,136 |
12,011 |
12,011 |
|
Expenses included in the employee benefit expense |
208 |
211 |
375 |
|
Contributions paid |
(128) |
(326) |
(463) |
|
Finance costs |
130 |
110 |
216 |
|
Pension paid |
(28) |
(27) |
(55) |
|
Actuarial (gains)/losses recognised |
(5,321) |
4,748 |
8,052 |
|
End of the period |
14,997 |
16,727 |
20,136 |
The amounts recognised in the income statement and statement of comprehensive income are as follows:
|
Half year to 30 June 2021 £'000 |
Half year to 30 June 2020 £'000 |
Year ended 31 December 2020 £'000 |
|
|
Current service cost |
208 |
211 |
375 |
|
Total included in employee benefit expenses |
208 |
211 |
375 |
|
Net interest cost |
130 |
110 |
216 |
|
Total included in finance costs |
130 |
110 |
216 |
|
Actuarial (gains)/losses |
(5,321) |
4,748 |
8,052 |
|
Total included in other comprehensive income |
(5,321) |
4,748 |
8,052 |
The principal actuarial assumptions used were as follows:
|
|
Half year to 30 June 2021 % |
Half year to 30 June 2020 % |
Year ended 31 December 2020 % |
|
Discount rate |
1.90 |
1.60 |
1.40 |
|
Inflation rate |
3.20 |
2.80 |
2.95 |
|
Future salary increases |
1.00 - 2.00 |
1.00 - 2.00 |
1.00 - 2.00 |
|
Future pension increases |
2.20 - 3.40 |
2.05 - 3.50 |
2.10 - 3.30 |
Assumptions regarding future mortality experience were consistent with those disclosed in the financial statements for the year ended 31 December 2020.
12. Trade and other payables
|
|
Half year to 30 June 2021 £'000 |
Half year to 30 June 2020 £'000 |
Year ended 31 December 2020 £'000 |
|
Trade payables |
1,222 |
2,067 |
2,568 |
|
Other taxes and social security |
5,040 |
6,796 |
6,358 |
|
Accruals and other creditors |
5,924 |
3,722 |
4,390 |
|
|
12,186 |
12,585 |
13,316 |
Cash generated from operations
|
|
Half year to 30 June 2021 £'000 |
Half year to 30 June 2020 £'000 |
Year ended 31 December 2020 £'000 |
|
Continuing operations |
|
|
|
|
Profit/(loss) for the period |
831 |
(4,860) |
(5,062) |
|
Adjustments for: |
|
|
|
|
- Taxation |
367 |
(1,140) |
(1,277) |
|
- Finance costs |
479 |
412 |
1,096 |
|
- Depreciation |
839 |
938 |
1,818 |
|
- Amortisation of intangible assets |
186 |
337 |
390 |
|
- Profit on sale of property, plant and equipment |
- |
- |
(5) |
|
- Foreign currency translation |
36 |
7 |
45 |
|
- Increase in provisions |
37 |
43 |
328 |
|
- Movement in share option charge |
30 |
33 |
46 |
|
- Movement in retirement benefits obligation |
(52) |
(142) |
(143) |
|
- Movement in non-current other receivable |
- |
1 |
(362) |
|
Movement in working capital: |
|
|
|
|
- Decrease in inventories |
10 |
11 |
11 |
|
- (Increase)/decrease in trade and other receivables |
(1,271) |
7,216 |
4,290 |
|
- (Decrease)/increase in trade and other payables |
(1,130) |
963 |
1,328 |
|
Cash generated from operations |
362 |
3,819 |
2,503 |
|
|
Half year to 30 June 2021 £'000 |
Half year to 30 June 2020 £'000 |
Year ended 31 December 2020 £'000 |
|
Cash and cash equivalents |
9,785 |
13,415 |
10,284 |
|
Bank overdrafts |
(1,593) |
- |
(719) |
|
|
8,192 |
13,415 |
9,565 |
The Group is operating within its existing banking facilities.
There is no controlling interest in the Group's shares.
During the period rentals of £242,000 (30 June 2020: £239,000; 31 December 2020: £478,000) were payable to Carmelite Property Limited, a company incorporated in England and Wales, and jointly owned by The Christie Group Pension and Assurance Scheme, The Venners Retirement Benefit Fund and The Fitzroy Square Pension Fund, by Christie Group plc in accordance with the terms of a long-term lease agreement.
The 2021 Interim Financial Statements are available on the Company's website www.christiegroup.com