Interim Results for six months ended 30 June 2020

Notes to Editors:

Christie Group plc (CTG.L), quoted on AIM, is a leading professional business services group with 41 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 Group to constitute inside information under the market Abuse Regulation (EU) No. 596/2014.

For more information, please go to www.christiegroup.com.

Chairman and Chief Executive's review

Our revenue for the six months ended 30 June 2020 amounted to £18.8m (H1 2019: £38.1m), approximately 50% of that generated in the first half of 2019. This reduction was entirely attributable to the business interruption caused by the Covid-19 pandemic, illustrating the scale of its impact.

We acted swiftly and decisively to mitigate its effects to the fullest extent possible and in doing so limited an unavoidable first half operating loss to £5.5m, which compares to a £1.5m operating profit reported for H1 2019.

While unprecedented, the first half loss was rather better than our revised projections for the period and I am pleased to advise that we have continued to trade ahead of those expectations in the third quarter.

We continue to avail ourselves of all government help and support. The additional gross profit from the £19m foregone Q2 revenue would if traded through, in the opinion of your board, have been more than sufficient to have offset the trading loss recorded plus the UK government's Covid-related support and the similar support received from foreign governments.

Cash collection and retention were strong with limited bad debt experience and we finished the half year with over £13.4m cash in hand, boosted by the drawdown of the Coronavirus Large Business Interruption Loan Scheme (CLBILS) loan in June.

Professional & Financial Services 

Our PFS division recorded an operating loss of £2.9m for the period (H1 2019: £2.3m profit), from depressed revenues of £11.5m (H1 2019: £21.3m).

The momentum for 2019 initially continued into 2020. Confidence flagged in mid-March as the pandemic took hold. Active users of our website increased by 46% from April to the end of June and user sessions increased by 63%. Notwithstanding our teams' inability to physically visit businesses or for new prospective purchasers to do so, we nonetheless received 757 offers to purchase, agreed 208 deals and contracted 98 sales during the lockdown period.

Certain sectors, most notably the pharmacy sector and food retailers, were impacted less than others and demand held up well. In March we launched the sale of a portfolio of 44 surplus Boots pharmacies to a receptive market.

In Hospitality, we sold the Chrysos Hotel, overlooking a garden square in London, Paddington, to Touriste Collection of Paris for £18 million in a cross-border deal and we acted as agents for the sale of The Mitre Hotel at Hampton Court which was sold for the first time in 30 years.

Internationally, we transacted with SAS Societe Vosgienne, Ibis Styles, Holiday Inn Calais Coquelles, Tryp Wolfsburg, Teikyo Campus and Schloss Reinfels.

In Care we arranged agreement for lease and forward-funded a number of investment sales at yields as keen as 4%. First half highlights, included our creation of the sale & leaseback of The Holmes Care Group for £47.5m to Impact Healthcare REIT plc, with the deal exchanging on 9 March, and more recently we acted on behalf of Legal & General who sold their investment in the BMI Woodlands Hospital, Darlington for £29.4 million.

In Childcare, a bumper start to the year included the sale of the Kids Allowed Group, comprising 8 locations across South Manchester and Cheshire, to Kids Planet. Whilst in Education, we completed the sale of the former Excel English college and Heathfield Knoll School, established in 1620. Many children were removed from day care and their home-working parents sought to provide home learning. These children are returning to external provision either near to home or near to the parents' place of employment, depending upon where their work is now based.

The furlough scheme allowed us to retain Business Valuers, Surveyors, Consultants & other Sector specialists during lockdown. The introduction of flexible furlough from July then enabled us to match their availability with the demand for our services.

Our Financial Services business continued on a par with prior year activity. CBILS, and Bounce Back ("BBLS") loans provided a new source of funding which gained in momentum as the year progressed.

Insurance rates, upon which our commissions are based, have hardened.

Stock & Inventory Systems & Services

Our SISS division achieved revenues of £7.4m in the period, a significant reduction compared to the £16.8m reported in H1 2019. The first half operating loss increased to £2.6m as a result (H1 2019: £0.7m).

Encouragingly, post-lockdown demand for our retail stocktaking services quickly ignited. Our food retailing clients have been trading briskly and most quickly sought our resumption. Our UK retail business has made a positive contribution in the third quarter, with reorganisation in progress. We quickly brought back our sales team to meet enquiries and re-engaged our supply chain management to handle new business.

Internationally, we faced few border closures. In Germany, we traded throughout where permitted and in Belgium and France have recommenced stocktaking activity.

Our licensed trades stocktaking business, Venners, endured a shutdown whilst Pubs, Hotels, Restaurants, Sports venues & theatres were closed. We are, since they reopened, back up and running.

Many businesses in London and other city centres have yet to reopen, including contributors to the night-time economy. Our trade is increasing, and we anticipate utilising the new Job Support Scheme to maintain our skilled workforce.

Vennersys, our cloud-based enterprise SaaS, enjoyed an extraordinary uptake in on-line sales once visitor attractions were able to re-open. Covid-19 necessitated the eradication of queues through the introduction of pre-sold and timed ticketing. Eight existing Venpos clients launched their venues on-line for the first time. New clients included Treasure Island, Bear Feet and Lincolnshire Wildlife Park.

Vennersys's web-based food & drink ordering system requires no app download by the customers. It can be used across any and every venue using our Venpos on-line element. For users of our enterprise system, food ordering comes fully integrated to existing point of sale, revenue & stock management systems and the accompanying reporting suite.

Director Change

Laurie Benson a Non-executive Director steps down from the board shortly after serving a three-year term. We have benefitted from Laurie's knowledge of digital systems, social media and remuneration structures, for which we are most grateful, and I thank her on your behalf.

Summary and Outlook

The ability of our field-based staff and workers to operate effectively has been largely unaffected by changing work practice. Our temporarily home-based staff mostly now look forward to returning to their offices. They have in the main coped magnanimously. I thank both these groups of colleagues and our central team for their unflagging efforts and enterprise.

In aggregate our pipelines of ongoing transactions were maintained throughout lockdown.  For those requesting funding, the lender requirement for a valuation has also been maintained. Reopened businesses require stocktaking. Open or closed, insurance is required.

In view of the necessary but disappointing localised lock downs and further Covid-19 related restrictions, we have prudently opted to forgo the declaration of an interim dividend this year (H1 2019: 1.25p per share).

We are well resourced and our third quarter trading has been encouraging.

I wish you well.

David Rugg

Chairman and Chief Executive