TIDMNBB
RNS Number : 7293D
Norman Broadbent PLC
28 June 2019
Norman Broadbent plc
("Norman Broadbent", the "Company" or the "Group")
Final Results and Annual Accounts
The board (the "Board") of Norman Broadbent (AIM: NBB) - - a
leading London listed Professional Services firm offering a
diversified portfolio of integrated Leadership Acquisition &
Advisory Services (Board & Leadership Search, Senior Interim
Management, Research & Insight, Leadership Consulting &
Assessment, and executive level Talent Solutions) - is pleased to
announce its final results and annual accounts for the year ended
31 December 2018.
Highlights
-- Group Revenues increased by GBP2.9m (+44%) to GBP9.4m, our
highest annual revenue in over 10 years
-- Group Net Fee Income ("NFI") increased by GBP1.6m (+32%) to GBP6.6m
-- 2018 Group operating performance (loss of GBP0.7m) a
significant improvement on 2017 (loss of GBP1.6m)
-- 2018 Group operating performance includes a one off charge of
GBP0.1m due to an increase in the provision for office
dilapidations relating to our former offices
-- Loss before tax reduced by GBP0.9m (-54%) to a 2018 loss before tax of GBP0.7m
-- 2018 NFI mix: Search (including Research & Insight) 48%;
Interim 23%; Solutions 26%; Consulting 3%. This further improved
NFI mix evidences the success of our ongoing diversification
strategy
-- Interim Management NFI increased by GBP0.8m (+109%) to GBP1.5m
-- Executive Search NFI increased by GBP0.7m (+22%) to GBP3.7m
-- Solutions NFI increased by GBP0.4m (+45%) to GBP1.2m
-- Phase 2 of transformation complete and significant progress
made towards a return to profitability
A copy of the audited 2018 Annual Report (including the notice
of Annual General Meeting ("AGM")) will be sent to shareholders
today. The Annual Report will be available on the Company's website
in due course,
https://www.normanbroadbent.com/investor-relations
The Company's 80th AGM will be held at 10am on the 10th Floor,
Portland House, Bressenden Place, London SW1E 5BH on 22 July
2019.
Mike Brennan, Group CEO of Norman Broadbent Group said:
"Our 2018 results evidence continued positive momentum. They
show positive trajectory in top line growth, and a further
significant reduction of losses. Our results have been driven by a
strong and collegiate culture delivering high quality, impactful,
and innovative solutions to clients.
Our long stated goal has been to diversify the business offering
clients a wider range of high-value services. The diversification
strategy is clearly working and is evidenced by the 2018 NFI mix
(see above). We have created a more balanced Group combining
recurring annuity revenue, with a range of consulting,
research-related and high-quality fully-retained Talent Acquisition
fees. Our market proposition not only benefits clients who can now
access a wider range of integrated services, but also the Company.
Importantly, it also strengthens our investor proposition as a more
balanced NFI mix should create greater resilience and generate
higher quality revenue.
With the Group delivering a significant set of results, I would
like to thank my colleagues for their hard work, innovation and
commitment, our clients for placing their continued trust in us,
and our supportive shareholders."
For further information, please contact:
Norman Broadbent plc
Mike Brennan / Will Gerrand 020 7484 0000
WH Ireland Limited
Adrian Hadden / Jessica Cave / Matthew
Chan 020 7220 1666
CEO's Review
RESULTS FOR THE FINANCIAL YEAR
The table below summarises the results of the Group:
Year ended Year ended
31-Dec 31-Dec
2018 2017
GBP000's GBP000's
---------- ----------
CONTINUING OPERATIONS
REVENUE 9,414 6,523
Cost of sales (2,770) (1,484)
---------- ----------
GROSS PROFIT 6,644 5,039
Operating expenses (7,308) (6,599)
---------- ----------
GROUP OPERATING LOSS (664) (1,560)
---------- ----------
Net finance cost (77) (42)
---------- ----------
LOSS BEFORE TAX (741) (1,602)
Income tax - -
---------- ----------
Profit/(Loss) from discontinued operation - -
---------- ----------
LOSS AFTER TAX (741) (1,602)
---------- ----------
Strategic review
I am pleased to report that the considerable progress of last
year has been reflected in our much improved 2018 financial
results.
Our 2018 results evidence our continued positive momentum, a
result of consistently delivering high quality innovative solutions
for clients. There is positive trajectory in top line growth and a
further significant reduction of losses.
Putting the needs of our clients first and foremost, we always
seek to leverage the synergies between our complementary service
lines to devise innovative solutions to drive positive outcomes.
Our results reflect that clients (both current and new) are
reacting positively to our approach. I'm delighted that after much
hard work and commitment, our efforts are slowly being rewarded and
we are increasingly seen as an agile, relevant, customer focused
Professional Services business.
We completed our office move on the 30(th) of April 2018 and, in
line with our strategy, the office reflects the "new" Norman
Broadbent Group.
I would like to personally thank and acknowledge the loyalty and
commitment of all of our employees during 2018. They have worked
extremely hard, adapted to the changing market and embraced the
"new" Norman Broadbent.
2018 trading and business review
As noted in 2017 we were (and remain) focussed on bringing in
further innovative and entrepreneurial talent into the Group. As
they became productive during 2018, they added to the already
established team enabling the Group to continue to grow and improve
our financial outlook.
Group turnover increased to GBP9,414,000 (2017: GBP6,523,000)
whilst overall net revenues after associate and interim costs in
the continuing businesses increased to GBP6,644,000 (2017:
GBP5,039,000). Operating expenses increased to GBP7,308,000 (2017:
GBP6,599,000), and operating losses from continuing operations
decreased to GBP664,000 (2017: GBP1,560,000).
In addition to the commentary below note 2 of the Consolidated
Financial Statements provides a detailed segmental breakdown of the
2018 Group results.
Norman Broadbent Executive Search ("NBES")
NBES remains the most significant part of the group and has
undergone the most change in the past two years. During 2018
revenue increased by 22% to GBP3,737,000 (2017: GBP3,061,000), and
the loss before tax reduced by 74% to GBP260,000 (2017: loss
GBP1,005,000). The process of change in NBES, subject to scale, is
now complete and the foundations for a return to profit have been
laid with increased activity evidenced by 2018's Q4 being the best
performance for a number of years. NBES is the leading contributor
of cross referrals in the Group. Our continued drive to move it
away from being a traditional and siloed business unit helped it
contribute significantly to this year's results.
Norman Broadbent Interim Management ("NBIM")
NBIM is now established in our key areas of market and
functional specialisations. Unlike many Interim providers NBIM is
increasingly operating in the less transactional/commoditised and
higher margin markets. As businesses are facing increasingly
complex short term challenges, NBIM is frequently mandated to find
and place senior level, high impact Interim professionals.
NBIM generated net revenues (after interim costs) of
GBP1,484,000 (2017: GBP711,000) resulting in a profit of GBP87,000
(2017: loss GBP237,000). We anticipate seeing continued growth in
this part of the business.
Norman Broadbent Solutions ("NBS")
Having been significantly restructured, repositioned and
rebranded in 2016, NBS continues to successfully promote staff from
within and attract new talent from competitors. Revenue increased
to GBP1,196,000 (2017: GBP842,000) and NBS returned to a profit
before tax of GBP74,000 (2017: loss before tax of GBP14,000).
As with NBES, we see significant opportunities in this part of
the market as we blend service lines within our portfolio to
provide optimal client solutions ranging from single hires through
to longer-term team builds.
Research and Insight ("R&I")
During 2017 we began to invest in R&I, which, in addition to
serving our own internal requirements, has started to provide
complementary services to clients. R&I is an important
strategic differentiator and an enabler of follow-on work,
particularly Executive Search. Clients can be provided with
research, market insight and business intelligence enabling them to
make more informed 'people', organisational or commercial
decisions. We see this as an exciting addition to our portfolio and
it is a service we are increasingly offering to clients as part of
our overall Advisory offering. The revenue arising is included
within the Search business.
Norman Broadbent Leadership Consulting ("NBLC")
NBLC was not able to replicate the success of 2017, turnover
(after associate costs) reduced from GBP516,000 in 2017 to
GBP239,000 in 2018, resulting in a loss before tax of GBP38,000 in
2018 compared with a profit before tax of GBP294,000 in 2017. This
reflected a pause in the assessment and development programmes of
some of our larger customers.
Financial position
As at 31 December 2018, consolidated net assets were
GBP1,268,000 (2017: GBP1,990,000) with net current liabilities of
GBP454,000 (2017: Net Current Assets of GBP316,000). Group cash
amounted to GBP684,000 (2017: GBP678,000).
Net cash inflow from operations in 2018 was GBP354,000 (2017:
Outflow of GBP2,079,000). Net cash outflow from financing
activities amounted to (GBP103,000) (2017: Inflow of GBP1,851,000).
The 2017 inflow related primarily to the net funds received from
the 2017 Subscription and Secured Loan Notes.
At 31 December 2018 the Group had GBP776,000 of funds drawn down
against the revolving invoice discounting facility (2017:
GBP851,000) against UK trade receivables of GBP2,076,000 (2017:
GBP1,371,000).
The Directors continue to monitor and manage the Group's working
capital carefully.
Current trading
The ongoing reinvention of Norman Broadbent Group is
progressing. Our broader, more integrated service proposition is
landing well with clients, the business is increasingly
competitive, and culturally we are more innovative and collegiate.
In summary, the Group is now more relevant and competitive in terms
of pricing, proposition and people.
I am pleased to report that the Board is satisfied with the
trading performance of the Group against plan at the date of these
accounts. On behalf of the Board I would like to thank our
shareholders for their continuing support, our clients for placing
their trust in us, and finally our team. We are quite rightly proud
of what we are achieving, much of which is down to the hard work,
dedication and commitment of my colleagues.
MIKE BRENNAN
Group Chief Executive
27 June 2019
Strategic Report
THE BUSINESS MODEL
Norman Broadbent plc is a leading Professional Services firm
with a specific focus on Talent Acquisition & Advisory
Services. Since our formation nearly 40 years ago, we have
developed a range of complementary service lines consisting of
Board & Leadership/Executive Search, Senior Interim Management,
Research & Insight, Leadership Consulting & Assessment, and
executive level Recruitment Solutions.
The Group operates through independently managed service lines
which collaborate and go to market both separately and together,
and which share a set of core behavioural and brand values.
STRATEGY AND OBJECTIVES
The Group's strategy is focussed on further developing and
strengthening its complementary portfolio of Talent Acquisition and
Advisory services via further selective hires and concentrating on
driving synergies via cross selling.
RESULTS FOR THE FINANCIAL YEAR
Group revenue from continued operations increased in the year by
44% to GBP9,414,000 (2017: GBP6,523,000), with gross profit of
GBP6,644,000 (2017: GBP5,039,000). NBES fees increased by 22% to
GBP3,737,000 (2017: GBP3,061,000) reflecting the tenure increase of
fee earners. Net revenues from NBLC, NBS and NBIM were GBP2,919,000
(2017: GBP2,044,000), reflecting the significant development of NBI
and NBS brands during 2017.
Operating expenditure increased to GBP7,308,000 (2017:
GBP6,599,000), reflecting the increased cost of sales related
bonuses paid in 2018 and an increase in the dilapidation provision
for St James Square of GBP115,000.
The Group reported an operating loss from continued operations
in 2018 of GBP664,000 (2017: GBP1,560,000) and a retained loss of
GBP741,000 (2017: GBP1,602,000).
CASH FLOW AND BALANCE SHEET
Net cash inflow from operations in 2018 was GBP354,000 (2017:
GBP2,079,000 outflow). The inflow reflects improved revenues. Net
trade receivables at the year-end were GBP2,076,000 (2017:
GBP1,371,000).
Net cash outflow from financing activities was GBP103,000 (2017:
inflow of GBP1,851,000). The 2017 inflow related primarily to the
net funds received from the fundraising in September 2017. At 31
December 2018, the Group had GBP776,000 of funds drawn down against
the revolving invoice discounting facility (2017: GBP851,000)
against UK trade receivables of GBP2,076,000 (2017:
GBP1,371,000).
EARNINGS PER SHARE
The retained loss for 2018 has resulted in a reported loss per
share of 1.42 pence (2017: loss per share 3.52 pence). After adding
back the cost of share based payments the adjusted loss per share
was 1.38 pence (2017: loss per share 3.48 pence).
GOING CONCERN
In light of the current financial position of the Group and on
consideration of the business' forecasts and projections, taking
account of possible changes in trading performance, the directors
have a reasonable expectation that the Group has adequate available
resources to continue as a going concern for the foreseeable
future. For these reasons, they continue to adopt the going concern
basis in preparing their annual report and financial
statements.
MONITORING, RISK AND KPIs
The directors have a responsibility for identifying risks facing
each of the businesses and for putting in place procedures to
mitigate and monitor risks. Board meetings incorporate, amongst
other agenda items, a review of monthly management accounts,
operational and financial KPIs and major issues and risks facing
the business.
The most important KPIs used in monitoring the business are set
out in the following table:
Key performance indicators 2018 2017
------------ ------------
Revenue (continued operations) GBP9,414,000 GBP6,523,000
Operating loss (664,000) (1,560,000)
Debtor days 73 days 78 days
------------ ------------
The directors monitor revenue against annual targets, which are
adjusted each year to ensure the Group remains on target to achieve
its strategic growth plan. Further, given the significant
restructuring and refocus of the group, the directors expect Group
revenues and operating profits to improve over the next few
years.
The principal risks faced by the Group in the current economic
climate are considered to be financial, business environment and
people related.
Financial - The main financial risks arising from the Group's
operations are the adequacy of working capital, interest rate,
liquidity and credit risk. These are monitored regularly by the
Board and are disclosed further in notes 2 and 17 of the financial
statements.
The business is in the later stages of the turnaround process
and is budgeted to be self-funding. In turnarounds there is always
a risk that the process could take longer than anticipated which
could lead to short term working capital pressures. In the event of
such an occurrence the company anticipates working closely with its
supportive shareholders to access short term working capital
funding.
Business Environment - Demand for services is affected by global
and UK specific economic conditions and the level of economic
activity in the regions and industries in which the Group operates.
When conditions in the economy deteriorate or economic activity
slows, many companies hire fewer permanent employees or rely on
internal human resource departments to recruit staff. Whilst it
appears that the global economy is still growing and the impact of
Brexit on the UK economy is lower than expected, should conditions
deteriorate in the future then demand for the services offered by
the Group could weaken resulting in lower cash flows.
The Group attempts to mitigate this risk by operating across
various diverse sectors where demand for such services is
stronger.
People - The Group's most vital resource remains its employees
and the directors remain committed to retaining and recruiting
quality staff who share the Group's culture and values. In a people
intensive business, the resignation of key staff, which could lead
to them taking clients, candidates and colleagues to another
employer, is a significant risk. The Group aims to mitigate this
risk by offering competitive remuneration structures, whilst also
insisting on employment contracts that contain restrictive
covenants that limit a leaver's ability to approach existing
clients, candidates and employees.
CAUTIONARY STATEMENT
The Group's Strategic Report has been prepared solely to provide
additional information to shareholders to assess the Company's
strategies and the potential for those strategies to succeed.
The Strategic Report contains certain forward-looking
statements. These statements are made by the directors in good
faith based on the information available to them up to the time of
their approval of this report and such statements should be treated
with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such
forward-looking information.
The directors, in preparing this Strategic Report, have complied
with s414C of the Companies Act 2006. The Strategic Report has been
prepared for the Group as a whole and therefore gives greater
emphasis to those matters which are significant to Norman Broadbent
plc and its subsidiary undertakings when viewed as a whole.
Mike Brennan Will Gerrand
Director Director
27 June 2019 27 June 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2018
2018 2017
Note GBP'000 GBP'000
------- -------------
CONTINUING OPERATIONS
Revenue 1 9,414 6,523
Cost of sales (2,770) (1,484)
------- -------------
Gross profit 2 6,644 5,039
Operating expenses (7,308) (6,599)
------- -------------
Operating loss from continued operations (664) (1,560)
Net finance cost 6 (77) (42)
------- -------------
LOSS ON ORDINARY ACTIVITIES BEFORE INCOME
TAX 3 (741) (1,602)
Income tax expense 5 - -
------- -------------
LOSS FROM CONTINUING OPERATIONS (741) (1,602)
------- -------------
LOSS FOR THE PERIOD (741) (1,602)
------- -------------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (741) (1,602)
------- -------------
Loss attributable to:
- Owners of the Company (763) (1,543)
- Non-controlling interests 22 (59)
------- -------------
Loss for the year (741) (1,602)
------- -------------
Total comprehensive income attributable
to:
- Owners of the Company (763) (1,543)
- Non-controlling interests 22 (59)
------- -------------
(741) (1,602)
------- -------------
Total comprehensive income for the year
Loss per share
- Basic 7 (1.42)p (3.52)p
- Diluted (1.42)p (3.52)p
Adjusted loss per share
- Basic 7 (1.38)p (3.48)p
- Diluted (1.38)p (3.48)p
Loss per share - continuing operations
- Basic 7 (1.42)p (3.52)p
- Diluted (1.42)p (3.52)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
2018 2017
Notes GBP'000 GBP'000
-------- --------
Non-Current Assets
Intangible assets 9 1,363 1,363
Property, plant and equipment 10 155 47
Prepayments and accrued income 12 135 195
Deferred tax assets 5 69 69
-------- --------
TOTAL NON-CURRENT ASSETS 1,722 1,674
-------- --------
Current Assets
Trade and other receivables 12 2,175 2,093
Cash and cash equivalents 13 684 678
-------- --------
TOTAL CURRENT ASSETS 2,859 2,771
-------- --------
TOTAL ASSETS 4,581 4,445
-------- --------
Current Liabilities
Trade and other payables 14 2,025 1,179
Loan notes 15 272 300
Bank overdraft and interest bearing loans 15 776 851
Provisions 20 240 125
Corporation tax liability - -
-------- --------
TOTAL CURRENT LIABILITIES 3,313 2,455
-------- --------
NET CURRENT LIABILITES (454) 316
-------- --------
Non-Current Liabilities
Provisions 20 - -
-------- --------
TOTAL LIABILITIES 3,313 2,455
-------- --------
TOTAL ASSETS LESS TOTAL LIABILITIES 1,268 1,990
-------- --------
EQUITY
Issued share capital 17 6,266 6,266
Share premium account 17 13,706 13,706
Retained earnings (18,667) (17,923)
-------- --------
EQUITY ATTRIBUTABLE TO OWNERS OF THE
COMPANY 1,305 2,049
Non-controlling interests (37) (59)
-------- --------
TOTAL EQUITY 1,268 1,990
-------- --------
These financial statements were approved by the Board of
Directors on 27 June 2019
Signed on behalf of the Board of Directors
M Brennan W Gerrand
Director Director
Company No 00318267
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
CONSOLIDATED GROUP
Attributable to owners of the Company
----------------------------------------------------------------
Share Share Retained Total Non-controlling Total
Capital Premium Earnings Equity interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- --------- ------- --------------- -------
Balance at 1st January
2017 6,143 12,685 (16,394) 2,434 - 2,434
Loss for the year - - (1,543) (1,543) (59) (1,602)
Total comprehensive income
for the year (1,543) (1,543) (59) (1,602)
-------- -------- --------- ------- --------------- -------
Transactions with owners
of the Company, recognised
directly in equity:
Issue of ordinary shares 123 1,021 - 1,144 - 1,144
Credit to equity for share
based payments - - 14 14 - 14
-------- -------- --------- ------- --------------- -------
Total transactions with
owners of the Company,
recognised directly in
equity 123 1,021 14 1,158 - 1,158
-------- -------- --------- ------- --------------- -------
Total transactions with
owners of the Company 123 1,021 14 1,158 - 1,158
-------- -------- --------- ------- --------------- -------
Balance at 31st December
2017 6,266 13,706 (17,923) 2,049 (59) 1,990
-------- -------- --------- ------- --------------- -------
Balance at 1st January
2018 6,266 13,706 (17,923) 2,049 (59) 1,990
-------- -------- --------- ------- --------------- -------
Loss for the year (763) (763) 22 (741)
Total comprehensive income
for the year (763) (763) 22 (741)
-------- -------- --------- ------- --------------- -------
Transactions with owners
of the Company, recognised
directly in equity:
Issue of ordinary shares - - - - - -
Credit to equity for share
based payments 19 19 19
-------- -------- --------- ------- --------------- -------
Total transactions with
owners of the Company,
recognised directly in
equity - - 19 19 - 19
-------- -------- --------- ------- --------------- -------
Total transaction with
owners of the Company - - 19 19 - 19
-------- -------- --------- ------- --------------- -------
Balance at 31st December
2018 6,266 13,706 (18,667) 1,305 (37) 1,268
-------- -------- --------- ------- --------------- -------
Share Capital
This represents the nominal value of shares that have been
issued by the Company.
Share Premium
This reserve records the amount above the nominal value received
for shares issued by the Company. Share premium may only be
utilised to write-off any expenses incurred or commissions paid on
the issue of those shares, or to pay up new shares to be allotted
to members as fully paid bonus shares.
Retained Earnings
This reserve comprises all current and prior period retained
profits and losses after deducting any distributions made to the
Company's shareholders.
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2018
2018 2017
Notes GBP'000 GBP'000
------- -------
Net cash used in operating activities (i) 354 (2,079)
Cash flows from investing activities
and servicing of finance
Net finance cost (77) (42)
Payments to acquire tangible fixed assets 10 (168) (16)
Net cash used in investing activities (245) (58)
------- -------
Cash flows from financing activities
Proceeds/(Repayment) of borrowings 15 (28) 300
Net cash inflows from equity placing 17 - 1,144
Increase/(Repayment) in invoice discounting 15 (75) 407
------- -------
Net cash from financing activities (103) 1,851
------- -------
Net (decrease)/increase in cash and cash
equivalents 6 (286)
Net cash and cash equivalents at beginning
of period 678 963
Effects of exchange rate changes on cash
balances held in foreign currencies - 1
------- -------
Net cash and cash equivalents at end
of period 684 678
------- -------
Analysis of net funds
Cash and cash equivalents 684 678
Borrowings due within one year (1,048) (1,151)
Borrowings due within more than one year - -
------- -------
(Net debt)/cash (ii) (364) (473)
------- -------
Note (i)
Reconciliation of operating loss to net cash from operating
activities
2018 2017
GBP'000 GBP'000
------- -------
Operating loss from continued operations (664) (1,560)
Depreciation/impairment of property, plant and
equipment 60 37
Share based payment charge 19 14
Decrease/(Increase) in trade and other receivables (22) (707)
(Decrease)/Increase in trade and other payables 846 137
(Decrease)/Increase Provisions 115 -
Taxation paid - -
------- -------
Net cash used in operating activities 354 (2,079)
------- -------
Note (ii)
Reconciliation of movement of debt
2018 2017
GBP'000 GBP'000
------- -------
Net (decrease)/increase in cash and cash equivalents 6 (286)
New Borrowings - (300)
Repayment of Borrowings 28 -
(Increase)/Repayment in invoice discounting 75 (407)
Exchange difference on cash and cash equivalents - 1
----------------------------------------------------- ------- -------
Movement in Borrowings for the Period 109 (992)
Net Borrowings at the Start of the Period (473) 519
------- -------
Net Borrowings at the end of the Period (364) (473)
------- -------
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
1. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies have
been consistently applied to both years presented unless otherwise
stated.
1.1 Basis of preparation
The consolidated financial statements of Norman Broadbent plc
("Norman Broadbent" or "the Company") have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union (IFRS as adopted by the EU), IFRIC
interpretations and the Companies Act 2006 applicable to Companies
reporting under IFRS. The consolidated financial statements have
been prepared under the historical cost convention, as modified by
the revaluation of financial assets and liabilities (including
derivative instruments) at fair value through profit or loss. The
consolidated financial statements are presented in pounds and all
values are rounded to the nearest thousand (GBP000), except when
otherwise indicated.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 1.21 of the published
annual accounts.
1.1.1 Going concern
The Group reported an operating loss from continued operations
in the year to 31 December 2018 of GBP0.7m compared with an
operating loss of GBP1.6m in 2017. In September 2017 the Group
raised GBP1.2m of new equity (before expenses) from existing
institutional shareholders which has enabled the business to
restructure further, to hire additional fee generating staff across
the Group and to provide a more stable working capital
position.
The Consolidated Statement of Financial Position shows a net
asset position at 31 December 2018 of GBP1.3m (2017: GBP2m) with
cash at bank of GBP0.7m (2017: GBP0.7m). At the date that these
financial statements were approved the Group had no overdraft
facility, and secured loan notes of GBP0.3m and its receivable
finance (Leumi ABL) which is 100% secured by the Group's trade
receivables.
In light of the current financial position of the Group and on
consideration of the business' forecasts and projections, taking
account of possible changes in trading performance, the directors
have a reasonable expectation that the Group has adequate available
resources to continue as a going concern for the foreseeable
future. For these reasons, they continue to adopt the going concern
basis in preparing their annual report and financial
statements.
2 SEGMENTAL ANALYSIS
Management has determined the operating segments based on the
reports reviewed regularly by the Board for use in deciding how to
allocate resources and in assessing performance. The Board
considers Group operations from both a class of business and
geographic perspective. Each class of business derives its revenues
from the supply of a particular recruitment related service, from
retained executive search through to executive assessment and
coaching. Business segment results are reviewed primarily to
operating profit level, which includes employee costs, marketing,
office and accommodation costs and appropriate recharges for
management time.
Group revenues are primarily driven from UK operations, however
when revenue is derived from overseas business the results are
presented to the Board by geographic region to identify potential
areas for growth or those posing potential risks to the Group.
i) Class of Business:
The analysis by class of business of the Group's turnover and
profit before taxation is set out below:
2018
NBES NBLC NBS NBIM Disc Operation Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- ------- -------------- ----------- -------
Revenue 3,737 345 1,196 4,136 - - 9,414
Cost of sales (12) (106) - (2,652) - - (2,770)
------- ------- ------- ------- -------------- ----------- -------
Gross profit 3,725 239 1,196 1,484 - - 6,644
Operating expenses (3,908) (272) (1,115) (1,384) - (569) (7,248)
Depreciation and
amort. (57) - (2) (1) - - (60)
Finance costs (20) (5) (5) (12) - (35) (77)
------- ------- ------- ------- -------------- ----------- -------
Profit/(Loss) before
tax (260) (38) 74 87 - (604) (741)
------- ------- ------- ------- -------------- ----------- -------
2017
NBES NBLC NBS NBIM Disc Operation Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- ------- -------------- ----------- -------
Revenue 3,061 728 842 1,892 - - 6,523
Cost of sales (66) (212) (25) (1,181) - - (1,484)
------- ------- ------- ------- -------------- ----------- -------
Gross profit 2,995 516 817 711 - - 5,039
Operating expenses (3,954) (215) (824) (942) - (627) (6,562)
Depreciation and
amort. (31) (1) (4) (1) - - (37)
Finance costs (15) (6) (3) (5) - (13) (42)
Profit/(Loss) before
tax (1,005) 294 (14) (237) - (640) (1,602)
------- ------- ------- ------- -------------- ----------- -------
ii) Revenue and gross profit by geography
2018 2017 2018 2017
Revenue Revenue Gross Profit Gross Profit
------- ------- ------------ ------------
United Kingdom 8,671 6,196 5,901 4,712
Rest of the world 743 327 743 327
------- ------- ------------ ------------
Total 9,414 6,523 6,644 5,039
------- ------- ------------ ------------
3 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION
2018 2017
GBP'000 GBP'000
------- -------
Loss on ordinary activities before taxation is
stated after charging:
Depreciation and impairment of property, plant
and equipment 60 37
Gain on foreign currency exchange - -
Staff costs (see note 4) 5,332 4,652
Operating lease rentals:
Land and buildings 270 409
Auditors' remuneration:
Audit work 47 45
Non-audit work - -
------- -------
The Company audit fee in the year was GBP47,000 (2017:
GBP45,000).
4 STAFF COSTS
The average number of full time equivalent persons (including
directors) employed by the Group during the period was as
follows:
2018 2017
No. No.
---- ----
Sales and related services 37 32
Administration 18 17
---- ----
55 49
---- ----
Staff costs (for the above persons):
GBP'000 GBP'000
------- -------
Wages and salaries 4,746 4,037
Social security costs 567 458
Defined contribution pension cost 142 143
Share based payment expense 19 14
------- -------
5,474 4,652
------- -------
The emoluments of the directors are disclosed as required by the
Companies Act 2006 in the Published accounts in the Directors'
Remuneration Report. The table of directors' emoluments has been
audited and forms part of these financial statements. This also
includes details of the highest paid director.
5 TAX EXPENSE
(a) Tax charged in the income statement
Taxation is based on the loss for the year and comprises:
2018 2017
GBP'000 GBP'000
------- -------
Current tax:
United Kingdom corporation tax at 19% (2017:
19%) based on loss for the year - -
Foreign Tax - -
------- -------
Total current tax - -
------- -------
Deferred tax:
Origination and reversal of temporary differences - -
------- -------
Tax charge/(credit) - -
------- -------
(b) Reconciliation of the total tax charge
The difference between the current tax shown above and the
amount calculated by applying the standard rate of UK corporation
tax to the profit before tax is as follows:
2018 2017
GBP'000 GBP'000
------- -------
Loss on ordinary activities before taxation (763) (1,602)
------- -------
Tax on loss on ordinary activities at standard
UK corporation tax rate of 19% (2017: 19%) (145) (305)
Effects of:
Expenses not deductible 17 23
Substantial shareholding exemption
Capital allowances in excess of depreciation 6 4
Provision Movement 1 -
Pension accrual movement (2) (3)
Losses bought forward utilised (30) (56)
Adjustment to losses carried forward 153 337
------- -------
Current tax charge for the year - -
------- -------
(c) Deferred tax
Tax losses Total
GBP'000 GBP'000
---------- -------
At 1 January 2018 (69) (69)
---------- -------
At 31 December 2018 (69) (69)
---------- -------
Credited to the income statement in 2018
At 31 December 2018 (69) (69)
---------- -------
At 31 December 2018 the Group had capital losses carried forward
of GBP8,130,000 (2017: GBP8,130,000). A deferred tax asset has not
been recognised for the capital losses as the recoverability in the
near future is uncertain. The Group also has GBP14,133,106 (2017:
GBP13,510,042 ) trading losses carried forward, which includes
GBP8,987,000 losses transferred from BNB Recruitment Consultancy
Ltd in 2011. A deferred tax asset of GBP1,285,075 (2017:
GBP1,288,061) has not been recognised in the financial statements
due to the inherent uncertainty as to the quantum and timing of its
utilisation.
The analysis of deferred tax in the consolidated balance sheet
is as follows:
2018 2017
GBP'000 GBP'000
------- -------
Deferred tax assets:
Tax losses carried forward 69 69
------- -------
Total 69 69
------- -------
6 NET FINANCE COST
2018 2017
GBP'000 GBP'000
------- -------
Interest payable on Loan Notes and Invoicing
facility 77 42
------- -------
Total 77 42
------- -------
7 EARNINGS PER SHARE
i) Basic earnings per share
This 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:
2018 2017
------------ ------------
Loss attributable to owners of the company (763,000) (1,543,350)
------------ ------------
Weighted average number of ordinary shares 53,885,570 43,882,363
------------ ------------
Total 53,885,570 43,882,363
------------ ------------
ii) Diluted earnings per share
This is calculated by adjusting the weighted average number of
ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The Company has one category of dilutive
potential ordinary shares in the form of employee share options.
For these options a calculation is done to determine the number of
shares that could have been acquired 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
the outstanding 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.
The grants of options in 2018 and 2017 have both profitability
and share price exercise criteria.
2018 2017
---------- -----------
Loss attributable to owners of the company (763,000) (1,543,350)
---------- -----------
Weighted average number of ordinary shares 53,885,570 43,882,363
---------- -----------
Total 53,885,570 43,882,363
---------- -----------
iii) Adjusted earnings per share
An adjusted earnings per share has also been calculated in
addition to the basic and diluted earnings per share and is based
on earnings adjusted to eliminate the effects of charges for share
based payments. It has been calculated to allow shareholders to
gain a clearer understanding of the trading performance of the
Group.
2018 2018 2018 2017 2017 2017
Diluted Diluted
Basic pence pence per Basic pence pence per
GBP'000 per share share GBP'000 per share share
------- ----------- ---------- ------- ----------- ----------
Basic earnings
Loss after tax (763) (1.42) (1.42) (1,543) (3.52) (3.52)
------- ----------- ---------- ------- ----------- ----------
Adjustments
Share based payment
charge 19 0.04 0.04 14 0.04 0.04
------- ----------- ---------- ------- ----------- ----------
Adjusted earnings (744) (1.38) (1.38) (1,529) (3.48) (3.48)
------- ----------- ---------- ------- ----------- ----------
8 PROFIT OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the
income statement of the parent company is not presented as part of
these accounts. The parent company's loss for the year amounted to
GBP605,000 (2017: GBP875,000).
9 INTANGIBLE ASSETS
Goodwill
arising
on consolidation
GBP'000
-----------------
Group
Balance at 1 January 2017 3,690
Balance at 31 December 2017 3,690
-----------------
Balance at 31 December 2018 3,690
-----------------
Provision for impairment
Balance at 1 January 2017 2,327
Balance at 31 December 2017 2,327
-----------------
Balance at 31 December 2018 2,327
Net book value
At 1 January 2017 1,363
-----------------
At 31 December 2017 1,363
-----------------
At 31 December 2018 1,363
-----------------
Goodwill acquired through business combinations is allocated to
cash-generating units (CGU) identified at entity level. The
carrying value of intangibles allocated by CGU is shown below:
Norman Broadbent
Leadership
Norman Broadbent Consulting Total
GBP'000 GBP'000 GBP'000
---------------- ---------------- -------
At 1 January 2017 1,303 60 1,363
---------------- ---------------- -------
At 31 December 2017 1,303 60 1,363
---------------- ---------------- -------
At 31 December 2018 1,303 60 1,363
---------------- ---------------- -------
In line with International Financial Reporting Standards,
goodwill has not been amortised from the transition date, but has
instead been subject to an impairment review by the directors of
the Group. As set out in accounting policy note 1, the directors
test the goodwill for impairment annually. The recoverable amount
of the Group's CGUs are calculated on the present value of their
respective expected future cash flows, applying a weighted average
cost of capital in line with businesses in the same sector. Pre-tax
future cash flows for the next five years are derived from the
approved forecasts for the 2018 financial year.
The key assumption applied to the forecasts for the business is
that return on sales for Norman Broadbent is expected to be a
minimum of 10% per annum for the foreseeable future (2017: 10%) and
19% for Norman Broadbent Leadership Consulting (2017: 19%). Return
on sales defined as the expected profit before tax on net revenue.
There are only minimal non cash flows included in profit before
tax. The rate used to discount the forecast cash flows is 9% (2017:
9%).
The five year forecasts have been prepared using conservative
revenue growth rates to reflect the uncertainty that is still
present in the economy. Based on the above assumptions, at 31
December 2018 the recoverable value of the Norman Broadbent CGU is
GBP1,563,000 and the Norman Broadbent Leadership Consulting CGU is
GBP299,000.
10. PROPERTY, PLANT AND EQUIPMENT
Land and Office and
buildings computer Fixtures
- leasehold equipment and fittings Total
GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------- ------------- -------
Group
Cost
Balance at 1 January 2017 84 146 57 287
Additions - 16 - 16
Disposals - - - -
------------ ---------- ------------- -------
Balance at 31 December 2017 84 162 57 303
------------ ---------- ------------- -------
Additions - 14 154 168
Disposals - - - -
------------ ---------- ------------- -------
Balance at 31 December 2018 84 176 211 471
------------ ---------- ------------- -------
Accumulated depreciation
Balance at 1 January 2017 62 110 47 219
Charge for the year 16 18 3 37
Disposals - - - -
------------ ---------- ------------- -------
Balance at 31 December 2017 78 128 50 256
------------ ---------- ------------- -------
Charge for the year 5 14 41 60
Disposals - - - -
------------ ---------- ------------- -------
Balance at 31 December 2018 83 142 91 316
------------ ---------- ------------- -------
Net book value
At 1 January 2017 22 36 10 68
------------ ---------- ------------- -------
At 31 December 2017 6 34 7 47
------------ ---------- ------------- -------
At 31 December 2018 1 34 120 155
------------ ---------- ------------- -------
The Group had no capital commitments as at 31 December 2018
(2017: GBPNil).
The above assets are owned by Group companies; the Company has
no fixed assets.
11 INVESTMENTS
Shares in
subsidiary
undertakings
GBP'000
-------------
Company
Cost
Balance at 1 January 2017 5,802
-------------
Disposals (see note below) (6)
-------------
Balance at 31 December 2017 5,796
-------------
Disposals -
-------------
Balance at 31 December 2018 5,796
-------------
Provision for impairment
Balance at 1 January 2017 3,926
Impairment for the year 227
-------------
Balance at 31 December 2017 4,153
-------------
Impairment for the year -
-------------
Balance at 31 December 2018 4,153
-------------
Net book value
At 1 January 2017 1,876
-------------
At 31 December 2017 1,643
-------------
At 31 December 2018 1,643
-------------
In 2017, the Company wrote off the value of dormant overseas
subsidiaries.
At 31 December 2018 the Company held the following ownership
interests:
Description and
Country of incorporation proportion of
Principal Group or registration shares held by
investments: and operation Principal activities the Company
----------------------- ------------------------- --------------------- --------------------
Norman Broadbent England and Wales Executive search 100% ordinary
Executive Search shares
Ltd
Norman Broadbent England and Wales Executive search 100% ordinary
Overseas Ltd shares
Norman Broadbent England and Wales Assessment, coaching 100% ordinary
Leadership Consulting and talent mgmt. shares
Limited
Norman Broadbent England and Wales Mezzanine level 100% ordinary
Solutions Ltd search shares
Bancomm Ltd ** England and Wales Dormant 100% ordinary
shares
Norman Broadbent Republic of Ireland Dormant 100% ordinary
Ireland Ltd* ** shares
Norman Broadbent England and Wales Interim Management 75% ordinary shares
Interim Management
Ltd
* 100 % of the issued share capital of this company is owned by Norman Broadbent Overseas Ltd.
** These companies are exempt from audit by virtue of provisions
in the Companies Act 2006. Where required limited assurance
procedures have been completed.
The registered office for the subsidiaries are Portland House,
Bressenden Place London SW1E 5BH with the exception of Norman
Broadbent Ireland Limited.
12 TRADE AND OTHER RECEIVABLES
Group Company
---------------- ----------------
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Trade receivables 2,076 1,371 - -
Less: provision for impairment - - - -
------- ------- ------- -------
Trade receivables - net 2,076 1,371 - -
Other debtors 98 334 5
Prepayments and accrued income 136 583 208 283
Due from Group undertakings - - 5,050 5,344
------- ------- ------- -------
Total 2,310 2,288 5,258 5,632
------- ------- ------- -------
Non-Current 135 195 135 195
Current 2,175 2,093 5,123 5,437
------- ------- ------- -------
2,310 2,288 5,258 5,632
------- ------- ------- -------
Non-current trade receivables is in relation to the cash
consideration due from the sale of SMS in 2016.
As at 31 December 2018, Group trade receivables of GBP1,885,000
(2017: GBP838,000), were past their due date but not impaired. They
relate to customers with no default history. The aging profile of
these receivables is as follows:
Group Company
------------------ -----------------
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- ------- --------
Up to 3 months 1,747 820 - -
3 to 6 months 120 18 - -
6 to 12 months 18 - - -
-------- -------- ------- --------
Total 1,885 838 - -
-------- -------- ------- --------
The largest amount due from a single trade debtor at 31 December
2018 represents 8% (2017: 14%) of the total trade receivables
balance outstanding.
As at 31 December 2018, no group trade receivables (2017: no
group trade receivables) were considered impaired. No provision for
impairment has been recognised in the financial statements.
Movements on the Group's provision for impairment of trade
receivables are as follows:
2018 2017
GBP'000 GBP'000
------- -------
At 1 January - 14
Provision for receivable impairment - -
Receivables written-off as uncollectable - (14)
------- -------
At 31 December - -
------- -------
There are no material difference between the carrying value and
the fair value of the Group's and parent Company's trade and other
receivables.
13 CASH AND CASH EQUIVALENTS
Group Company
---------------- ----------------
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Cash at bank and in hand 684 678 280 588
------- ------- ------- -------
Total 684 678 280 588
------- ------- ------- -------
There is no material difference between the carrying value and
the fair value of the Group's and parent Company's cash at bank and
in hand.
14 TRADE AND OTHER PAYABLES
Group Company
---------------- ----------------
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Trade payables 650 602 80 51
Due to Group undertakings - - 1,437 1,521
Other taxation and social security 765 292 - -
Other payables 35 21 - -
Accruals 575 264 45 58
------- ------- ------- -------
Total 2,025 1,179 1,562 1,630
------- ------- ------- -------
There is no material difference between the carrying value and
the fair value of the Group's and parent company's trade and other
payables.
15 BORROWINGS
Group Company
---------------- ----------------
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Maturity profile of borrowings
Current
Bank overdrafts and interest
bearing loans:
Invoice discounting facility
(see note (a) below) 776 851 - -
Secured Loan notes 272 300 272 300
------- ------- ------- -------
Total 1,048 1,151 272 300
------- ------- ------- -------
The carrying amounts and fair value of the Group's borrowings,
which are all denominated in sterling, are as follows:
Carrying amount Fair value
----------------- ----------------
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
-------- ------- ------- -------
Bank overdrafts and interest
bearing loans:
Invoice discounting facility 776 851 776 851
Secured Loan notes 272 300 272 300
-------- ------- ------- -------
Total 1,048 1,151 1,048 1,151
-------- ------- ------- -------
a) Invoice discounting facilities:
Norman Broadbent Executive Search Limited, NBS, NBIM and NBLC
operate independent invoice discounting facilities, provided by
Leumi ABL Limited. Leumi ABL Ltd holds all assets debentures for
each company (fixed and floating charges) and also a cross
corporate guarantee and indemnity deed dated 20 July 2011. The
financial terms of the facilities are outlined below:
Norman Broadbent Executive Search Limited:
Funds are available to be drawn down at an advance rate of 75%
against trade receivables of Norman Broadbent Executive Search
Limited that are aged less than 120 days, with the facility capped
at GBP1,500,000. At 31 December 2018, the outstanding balance on
the facility of GBP369,969 (2017: GBP456,291) was secured by trade
receivables of GBP860,137 (2017: GBP555,244). Interest is charged
on the drawn down funds at a rate of 2.40% (2017: 2.40%) above the
bank base rate.
Norman Broadbent Solutions Limited:
Funds are available to be drawn down at an advance rate of 75%
against trade receivables of Norman Broadbent Solutions Limited
that are aged less than 120 days, with the facility capped at
GBP750,000. At 31 December 2018, the outstanding balance on the
facility of GBP139,813 (2017: GBP136,271) was secured by trade
receivables of GBP263,604 (2017: GBP166,500). Interest is charged
on the drawn down funds at a rate of 2.40% (2016: 2.40%) above the
bank base rate.
Norman Broadbent Interim Management Limited:
Funds are available to be drawn down at an advance rate of 75%
against trade receivables of Norman Broadbent Interim Management
Limited that are aged less than 120 days, with the facility capped
at GBP750,000. At 31 December 2018, the outstanding balance on the
facility of GBP246,441 (2017: GBP225,454) was secured by trade
receivables of GBP701,821 (2017: GBP251,076). Interest is charged
on the drawn down funds at a rate of 2.40% (2016: 2.40%) above the
bank base rate.
Norman Broadbent Leadership Consulting
Funds are available to be drawn down at an advance rate of 75%
against trade receivables of Norman Broadbent Leadership Consulting
Limited that are aged less than 120 days, with the facility capped
at GBP500,000. At 31 December 2018 the outstanding balance on the
facility of GBP19,861 (2017: GBP33,113) was secured by trade
receivables of GBP50,474 (2017: GBP38,659). Interest is charged on
the drawn down funds at a rate of 2.40% above the bank base
rate.
b) Secured Loan Notes
The GBP300,000 loan note was issued in August 2017 with an
interest rate of 12% up to its 31 October 2018 redemption date.
With effect from 1 November 2018 the interest rate is 20%
16 FINANCIAL INSTRUMENTS
The principal financial instruments used by the Group, from
which financial instrument risk arises, are summarised below. All
financial assets and liabilities are measured at amortised cost
which is not considered to be materially different to fair
value.
Amortised Cost
----------------
2018 2017
GBP'000 GBP'000
------- -------
Group
Financial Assets
Trade and other receivables 2,204 1,965
------- -------
Financial Liabilities
Trade and other payables 2,027 1,179
Secured loan notes 272 300
Invoice discounting facility 776 851
------- -------
Amortised Cost
----------------
2018 2017
GBP'000 GBP'000
------- -------
Company
Financial Assets
Trade and other receivables 5,058 5,609
------- -------
Financial Liabilities
Trade and other payables 1,562 1,630
Secured loan notes 272 300
------- -------
In common with all other businesses, the Group is exposed to
risks that arise from its use of financial instruments. Details on
these risks and the policies set out by the Board to reduce them
can be found in the published annual accounts.
17 SHARE CAPITAL AND PREMIUM
2018 2017
GBP'000 GBP'000
------- -------
Allotted and fully paid:
Ordinary Shares:
53,885,570 Ordinary shares of 1.0p each (2017:
53,885,570) 539 539
------- -------
Deferred Shares:
23,342,400 Deferred A shares of 4.0p each (2017:
23,342,400) 934 934
907,118,360 Deferred shares of 4.0p each (2017:
907,118,360) 3,628 3,628
1,043,566 Deferred B shares of 42.0p each (2017:
1,043,566) 438 438
2,504,610 Deferred shares of 29.0p each (2017:
2,504,610) 727 727
------- -------
5,727 5,727
------- -------
Total 6,266 6,266
------- -------
Deferred A Shares of 4.0p each
The Deferred A Shares carry no right to dividends or
distributions or to receive notice of or attend general meetings of
the Company. In the event of a winding up, the shares carry a right
to repayment only after the holders of Ordinary Shares have
received a payment of GBP10,000 per Ordinary Share. The Company
retains the right to cancel the shares without payment to the
holders thereof. The rights attaching to the shares shall not be
varied by the creation or issue of shares ranking parri passu with
or in priority to the Deferred A Shares.
Deferred Shares of 4.0p each
The Deferred Shares carry no right to dividends, distributions
or to receive notice of or attend general meetings of the Company.
In the event of a winding up, the shares carry a right to repayment
only after payment of capital paid up on Ordinary Shares plus a
payment of GBP10,000 per Ordinary Share. The Company retains the
right to transfer or cancel the shares without payment to the
holders thereof.
Deferred B Shares of 42.0p each
The Deferred B Shares carry no right to dividends or
distributions or to receive notice of or attend general meetings of
the Company. In the event of a winding up, the shares carry the
right to repayment only after the holders of Ordinary Shares have
received a payment of GBP10 million per Ordinary Share. The Company
retains the right to cancel the shares without payment to the
holders thereof. The rights attaching to the shares shall not be
varied by the creation or issue of shares ranking parri passu with
or in priority to the Deferred B Shares.
Deferred Shares of 29.0p each
The Deferred Shares carry no right to dividends or distributions
or to receive notice of or attend general meetings of the Company.
In the event of a winding up, the shares carry the right to
repayment only after the holders of Ordinary Shares have received a
payment of GBP10,000 per Ordinary Share. The Company retains the
right to cancel the shares without payment to the holders
thereof.
A reconciliation of the movement in share capital and share
premium is presented below:
No. of
ordinary Ordinary Deferred Share
shares shares shares premium Total
(000s) (000s) (000s) (000s) (000s)
--------- -------- -------- -------- -------
At 1 January 2017 41,633 416 5,727 12,685 18,828
Proceeds from share placing
(note (a) below) 12,252 123 - 1,021 1,144
--------- -------- -------- -------- -------
At 31 December 2017 53,885 539 5,727 13,706 19,972
--------- -------- -------- -------- -------
At 31 December 2018 53,885 539 5,727 13,706 19,972
--------- -------- -------- -------- -------
a) Share placing September 2017
On 29 September 2017, the Company issued 12,252,250 new ordinary
1.0p shares for a total cash consideration of GBP1,225,225.
Transaction costs of GBP81,444 were incurred resulting in net cash
proceeds of GBP1,143,781.
18 SHARE BASED PAYMENTS
18.1 Share Options
The Company has an approved EMI share option scheme for full
time employees and directors. The exercise price of the granted
options is equal to the market price of the shares on the date of
the grant. The Company has no legal or constructive obligation to
repurchase or settle the options or warrants in cash.
Options under the Company EMI scheme are conditional on the
employee completing three years' service (the vesting period). The
EMI options vest in three equal tranches on the first, second and
third anniversary of the grant. The options have a contractual
option term of either seven or ten years.
Movements in the number of share options and their related
weighted average exercise prices are as follows:
Approved EMI
share option scheme
--------------------------
Avg. exercise
price per Number of
share (p) options
------------- -----------
At 1 January 2017 16.21 4,217,887
Granted 13.50 380,951
Forfeited 18.95 (1,500,327)
------------- -----------
At 31 December 2017 14.54 3,098,511
------------- -----------
Granted 13.50 1,054,191
Forfeited 13.50 (603,555)
------------- -----------
At 31 December 2018 14.41 3,549,147
------------- -----------
Share options outstanding at the end of the year have the
following expiry date and exercise prices:
Share options
---------- --------------------
Exercise
Expiry date price per
share
(p) 2018 2017
---------- --------- ---------
2021 65.5 62,153 62,153
2023 13.5 2,051,852 3,036,358
2024 13.5 380,951 -
2025 13.5 1,054,191 -
---------- --------- ---------
Total 3,549,147 3,098,511
---------- --------- ---------
Out of the 3,549,147 outstanding options (2017: 3,098,511), no
options were exercisable at the year end (2017: None) as they were
all 'underwater'.
The significant inputs into the model in valuing the 2018 option
grant were weighted average share price of 12 pence at the grant
date, exercise price of 13.5p, volatility of 28%, dividend yield of
0% (2017 and 2016: 0%), an expected option life of 10 years (2017
and 2016: 10 years) and an annual risk-free interest rate of
0.652%. The expected volatility was estimated by reference to the
historical volatility of the Company's share price and those of UK
quoted companies in a similar business sector. The risk-free
interest rate is estimated as the yield on zero coupon UK
government bonds of a term consistent with the contractual life of
the options granted. Minimal share options were granted during
2018, therefore the same assumptions were used as per the prior
year. There was no significant change in the company or
shareholding during 2018.
19 LEASES
Operating leases
The Group leases its premises and the lease is tenant
repairing.
As at 31 December 2018, the total future value of minimum lease
payments due are as follows:
Land and Buildings
--------------------
2018 2017
GBP'000 GBP'000
--------- ---------
Within one year 160 82
Later than one year and not later than five years 32 -
--------- ---------
Total 192 82
--------- ---------
20 PROVISIONS
Group
2018 2017
GBP'000 GBP'000
------- -------
At 1 January 125 125
Provisions made during the year 115 -
------- -------
At 31 December 240 125
------- -------
Current liability 240 125
Non-current liability - -
------- -------
At 31 December 240 125
------- -------
The Company moved its head office in April 2018. Under the terms
of the previous lease the Company is obliged to return vacant
possession to the landlord with the office returned to its original
state. The Company is currently in negotiations with the Landlord
as to the value of a settlement.
21 PENSION COSTS
The Group operated several defined contribution pension schemes
for the business. The assets of the schemes were held separately
from those of the Group in independently administered funds. The
pension cost represents contributions payable by the Group to the
funds and amounts to GBP141,000 (2017: GBP142,000). At the year end
GBP19,000 of contributions were outstanding (2017: GBP10,000).
22 RELATED PARTY TRANSACTIONS
The following transactions were carried out with related
parties:
(a) Purchase of services:
2018 2017
GBP000 GBP000
------ ------
Brian Stephens & Company Ltd 20 24
Total 20 24
------ ------
Brian Stephens & Company Ltd invoiced the Group for the
provision of services of B Stephens of GBP20,000 (2017 total:
GBP24,000). B Stephens is a director of Brian Stephens &
Company Ltd.
All related party expenditure took place via "arms-length"
transactions.
(b) Key management compensation:
Key management includes Executive and Non-Executive Directors.
The compensation paid or payable to the directors can be found in
the Directors' Remuneration Report.
(c) Year-end payables arising from the purchases of services:
2018 2017
GBP000 GBP000
------ ------
Brian Stephens & Company Ltd 2 6
------ ------
Total 2 6
------ ------
Payables to related parties arise from purchase transactions and
are due one month after date of purchase. Payables bear no
interest.
23 CONTINGENT LIABILITY
The Company is a member of the Norman Broadbent plc Group VAT
scheme. As such it is jointly accountable for the combined VAT
liability of the Group. The total VAT outstanding in the Group at
the year-end was GBP377,000 (2017: GBP122,000).
24 AVAILIABILITY OF ACCOUNS AND NOTICE OF ANNUAL GENERAL MEETING
Copies of the Final Report and Annual Accounts (including the
notice of Annual General Meeting) will be posted to shareholders on
28(th) of June 2019 and will shortly be available to view on the
Company's website
(www.normanbroadbent.com/information/investor-relations).
Notice is hereby given that the 80th Annual General Meeting
("AGM") of Norman Broadbent plc will be held at 10am on the 10th
Floor, Portland House, Bressenden Place, London SW1E 5BH on 22 July
2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SEAFMWFUSEEM
(END) Dow Jones Newswires
June 28, 2019 02:00 ET (06:00 GMT)
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