TIDMAPP
RNS Number : 7644U
Appreciate Group PLC
27 November 2019
27 November 2019
APPRECIATE GROUP PLC
("Appreciate", "Appreciate Group" or "the Group")
Half Year Results
for the six months ended 30 September 2019
Continued strategic progress, with a resilient performance in
line with the Board's expectations
Summary
Appreciate Group plc (AIM: APP), the UK's leading
multi-retailer, multi-channel gift voucher and prepaid gift card
provider, is pleased to announce its half year results for the six
months ended 30 September 2019. Appreciate's business is highly
seasonal; the first half of the year sees an expected loss with the
majority of annual revenues and profit generated in the second half
of the year.
Financial Highlights
-- Billings increased by 10.3% to GBP120.2m (H1 2018: GBP109.0m)
-- Revenue increased by 21.3% to GBP33.2m (H1 2018: GBP27.4m)
-- Seasonal operating losses reduced to GBP2.0m (H1 2018: GBP2.3m)
-- Pre-tax losses reduced to GBP1.3m (H1 2018: GBP1.5m loss)
-- Proposed interim dividend of 1.05p (H1 2018: 1.05p)
-- Cash balances, including cash held in trust, at 30 September
2019 of GBP211.8m (H1 2018: GBP212.4m)
Operational Highlights
-- Corporate:
- Strong growth in billings of 9.3% to GBP80.1m (H1 2018: GBP73.3m)
- Revenues up 23.8% to GBP24.3m (H1 2018: GBP19.6m) benefiting
from increased demand and the addition of new clients
-- Consumer:
- Billings grew by 12.5% to GBP40.1m benefiting from
significantly increased customer numbers through
highstreetvouchers.com. Revenues increased by 14.9% to GBP8.9m (H1
2018: GBP7.8m).
- Christmas Savings benefited from earlier despatches than in the prior year
-- Added new redemption partners (high street and online
retailers, hospitality and leisure providers), focusing on brands
that are more relevant to our current customer base and future
target audience with greater online presence
Implementation of the strategic business plan during the half
year
-- Relocated our head office to Liverpool city centre
-- Changed the company name to Appreciate Group plc, which more
accurately describes our product range and helps to position the
Group to take advantage of its growth aspirations
-- Developed a Mastercard gifting product with digital
fulfilment and mobile wallet capability that is being tested
through the highstreetvouchers.com channel
-- Began trialling a new consumer digital gifting product,
Giftli, which appeals to a new millennial audience, ahead of a
planned soft launch before Christmas 2019
-- Invested in our technology, including initiating the first
phase of Microsoft Dynamics 365 as our core ERP system
-- Implemented Blue Venn as our new integrated digital marketing platform
Current trading:
-- Outlook for trading for the second half and the year as a whole is unchanged
-- Current year cost estimate of implementation of strategic
business plan unchanged at GBP2.0m
-- Good momentum in terms of implementing the remaining
milestones of the strategic business plan
Ian O'Doherty, Chief Executive Officer, commented:
"Appreciate Group performed well in the first half, consistent
with our expectations for the year as a whole, with strong
operational performances in both consumer and corporate divisions.
This was an extremely busy period for the Group as we continued to
implement our strategic business plan whilst optimising the
performance of the business.
"We continue to be encouraged by the significant progress we
have made on delivery of our strategic business plan, including the
development of new consumer products, and are optimistic about the
benefits this will realise in a growing market."
Appreciate will host a presentation for analysts at MHP
Communications' offices (6 Agar Street, London, WC2N 4HN) at 9.30am
this morning.
If you would like to attend, please contact MHP on 020 3128 8193
or AppreciateGroup@mhpc.com.
For further information please visit
https://www.appreciategroup.co.uk or contact:
Appreciate Group plc Liberum MHP Communications
(NOMAD and broker)
Ian O'Doherty, CEO Richard Crawley Reg Hoare
Tim Clancy, CFO Jamie Richards Katie Hunt
Patrick Hanrahan
Charles Hirst
Tel: 0151 653 1700 Tel: 020 3100 2222 Tel: 020 3128 8193
The information contained within this announcement is deemed by
Appreciate Group to constitute inside information as stipulated
under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Notes to editors:
The Company changed its name to Appreciate Group plc (from Park
Group plc) on 6 November 2019. The new name more accurately
describes its product range and helps to position the Group to take
advantage of the growth opportunities available in an expanding
market.
Business review for the six months ended 30 September 2019
Introduction
Appreciate Group performed well in the first half, consistent
with our expectations for the year as a whole. This was an
extremely busy period for the Group as we continued to implement
our strategic business plan whilst optimising the performance of
the business. We are pleased with progress to date on the multiple
initiatives being undertaken, many of which are now completed or
are close to completion. We are confident that the changes we are
making, combined with the underlying strength of the business, will
deliver enhanced growth rates and financial performance in the
future.
The business relocated its head office and main operations to
central Liverpool in September in line with our strategy to become
more efficient and effective. This involved approximately 250
employees moving into our fit-for-future offices and we are pleased
to report this occurred seamlessly without any business
interruption; we are already seeing the benefits of the move that
we expected of enhancing both our culture and our efficiency.
At our AGM, also in September, shareholders voted to change the
name of the company to Appreciate Group plc, a name that more
accurately describes our product range and helps to position the
Group to take advantage of the growth opportunities available in an
expanding market.
In the strategy section below, we set out progress we have made
on the important projects that are intended to enhance Appreciate
Group's operating and financial performance in future years.
Results for the half year
As we are a seasonal business, we typically report approximately
a quarter of our revenue in the first half, and three quarters of
revenue in the second half (commencing 1 October) and we have, as
expected, reported a loss for the half year, albeit a reduced loss
compared to prior year.
Billings increased 10.3% in the six months to 30 September 2019
to GBP120.2m (H1 2018: GBP109.0m) and Group revenue was ahead by
21.3% at GBP33.2m (H1 2018: GBP27.4m). As planned, we incurred
GBP1.0m of strategy implementation costs relating to relocation,
investment in technology and development of a new consumer product
in the first half (H1 2018: GBPnil). Despite this investment,
reported losses reduced with a loss before tax of GBP1.3m compared
with a loss of GBP1.5m in the prior year, demonstrating strong
underlying trading has been maintained during a transformative
period. Total cash balances, including cash held in trust at 30
September 2019, were GBP211.8m (H1 2018: GBP212.4m).
Interim dividend
The Board has declared an interim dividend of 1.05p per share,
in line with last year (H1 2018: 1.05p). The dividend will be paid
on 6 April 2020 to shareholders on the register on 28 February
2020. Appreciate Group's dividend policy is linked to the cash we
generate and business performance. Maintaining the dividend in a
period of transformation reflects the Board's confidence in the
strategic plan and the future financial benefits that it is
expected to realise.
Strategy and business plan
In December 2018, we set out our new strategic business plan; it
aims to build on the high regard in which the Group is held by
existing customers to capture more of the available market in the
future. We intend to deliver this through improving the customer
experience, simplifying our offering, making our products and
services available to a wider customer base, and developing our
digital platforms to meet the needs of our customers both now and
in the future.
The four principal pillars of the new strategic business plan
are set out below, alongside the progress we made in delivering the
plan during the first half year period:
1. Productivity: we will be more efficient and effective
Progress during the period:
-- We relocated our head office to Liverpool city centre. We are
already experiencing the collaboration benefits of working in a
modern, fit for future and better-equipped environment.
Furthermore, we are starting to attract new talent into the
organisation as a consequence of our new location.
-- We have invested in our technology including the first phase
of Microsoft Dynamics 365 as our core ERP system and further design
and planning for subsequent phases in 2020. Alongside this, we have
completely re-designed our data and infrastructure architecture
ready for progressive deployment to Cloud and managed service
provision to take advantage of the scalability, efficiency and
resiliency benefits these offer.
2. Appeal: we will broaden our customer appeal
Progress during the period:
-- We have put a new consumer digital gifting product, Giftli,
which appeals to a new millennial audience, into trial with
consumers ahead of a planned soft launch before Christmas 2019.
Giftli is the only gift card product with the ability to create a
personal story to share with the recipient, reimagining gifting for
the digital audience. This has followed an extensive research and
development project with an external digital product agency.
Initial reaction from consumers has been very positive with the
features and design proving attractive to the target audience using
social media in their everyday lives.
-- Significant core infrastructure improvements to support a
24/7 digital platform, including a new digital engine giving full
Application Programme Interfaces (API) integration with our
redemption partners which has transformed our e-commerce speed,
capability and breadth of offering.
-- In addition, the implementation of Blue Venn as our new
integrated digital marketing platform, delivers multi-channel
marketing capability and enhanced customer data insights that
allows us to develop these channels further.
3. Clarity: we will focus on our multi-retailer redemption proposition
Progress during the period:
-- We have changed the company name to Appreciate Group plc and
are nearing the completion of our full brand architecture
review.
-- The hamper business is operating separately under a discrete
management team (and remains located at Valley Road,
Birkenhead).
4. Experience: we will be easier to work with for all of our customers
Progress in the period:
-- We continue to drive product and customer innovation, while
all the time anchoring the organisation on digital. We have
developed a Mastercard gifting product with digital fulfilment and
mobile wallet capability that is being tested through the
highstreetvouchers.com channel.
-- We have improved productivity and customer experience through
extended hours of chat bot support with self-service capability. We
are developing AI, Machine Learning and Robotic Process Automation
solutions to drive better customer journeys, improve product
development and facilitate seamless engagement across the
business.
Operational review
All our business lines traded well in the first half. Analysed
by division, Corporate billings of GBP80.1m (H1 2018: GBP73.3m)
were 9.3% above prior year and Corporate revenue of GBP24.3m was
ahead of last year (H1 2018: GBP19.6m) by 23.8%. This reflected
increased demand and the impact of new clients that contributed
GBP3.2m of billings. Our Consumer business billings of GBP40.1m
were 12.5% above the comparative period reflecting strong growth in
our Other Consumer sector with significantly increased customer
numbers through highstreetvouchers.com following a customer
experience redesign. The Christmas Savers billings numbers reported
have benefited from earlier despatches than prior year but we still
expect this area to be marginally down by the end of the year.
Overall, our Consumer revenue of GBP8.9m was 14.9% above last year
(GBP7.8m).
We continue to develop our product proposition and in particular
move away from paper towards card and digital formats. As part of
the latter move, we have stopped purchasing third party paper
products and have redesigned our customer journey in order to
prioritise promotion of card and digital formats of our own
products. The benefits of this change have contributed to a higher
gross margin (GBP8.2m (24.8%) versus GBP6.3m (23.1%) in the prior
year). We have added to our redemption partners and in particular
have focussed on brands that are more relevant to our current
customer base and future target audience with much more online
presence. In the period, new redemption partners added include
Banana Republic, Perfume Direct and Zavvi. Overall, we now operate
with 246 redemption partners across high street, online, dining and
experience providers.
Administration costs increased from GBP8.0m in the prior year to
GBP9.6m in the first half of this year. Within this, as planned, we
incurred GBP1.0m of strategy implementation costs relating to
relocation, investment in technology and development of a new
consumer product. Additionally, we incurred costs relating to
branding, additional management and increased audit fees.
We have made improvements in our customer experience with focus
on an enhanced online and mobile customer journey. We have improved
this through faster connectivity and page loading, simplified
layout and navigation and optimised digital customer acquisition
methods. Our Consumer customer numbers through
highstreetvouchers.com increased by 49% compared with the prior
year, benefiting from these improvements.
Within our Christmas Savers business, we have refreshed the
brand and imagery across all assets making it more modern and
engaging. We have worked with two new agencies to create the Park
Christmas Savings TV advert as well as developing a new media
strategy that together target our new customer base more
effectively. We are also optimising the Park Christmas Savings
website through customer research and a programme of optimisation
experimentation. We expect these enhancements to provide benefits
to our performance in Christmas 2020.
We are pleased that following the relocation of our head office
to Liverpool, our production and distribution businesses remaining
in Birkenhead have benefited from improved layouts leading to
enhanced workflow generating further efficiencies. Focus on further
development of our people across all sites will also lead to
greater efficiencies and effectiveness in the future enabling our
team to support future business growth. Good progress is being made
in respect of a potential disposal of the Birkenhead site with
lease back arrangements for the space we continue to require.
Board and management
We were pleased to appoint Sally Cabrini as a Non-Executive
Director and Chair of the Remuneration Committee with effect from
September 2019, to succeed Michael de Kare-Silver. Sally brings
with her a record of relevant experience, as a board member, member
of Audit and Risk Committees and Chair of Remuneration Committee of
Lookers PLC. Her executive experience includes roles with
Interserve Group Limited, United Utilities PLC and Northern Foods
PLC.
Additionally, the business has strengthened its management in
the areas of Business Development, Marketing and Strategy to
support the effective implementation of our new strategic plan and
deliver future growth.
Outlook
Overall, our outlook for underlying trading for the second half
and the year as a whole is unchanged. Our Corporate business
continues to grow and our Consumer business continues to take
advantage of our refreshed marketing plans. The estimate of the
cost of the implementation of our strategic business plan for the
current financial year remains unchanged at GBP2.0m.
We have a real sense of momentum in terms of implementing the
remaining milestones of the strategic business plan; this includes
a planned soft launch before Christmas 2019 of our new consumer
digital gifting product, Giftli.
In summary, we continue to be encouraged by the significant
progress we have made on delivery of our strategic business plan
and are optimistic about the benefits this will realise in a
growing market.
Laura Carstensen, Chairman
Ian O'Doherty, Chief Executive
APPRECIATE GROUP PLC
APPRECIATE GROUP PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE HALF YEAR TO 30 SEPTEMBER 2019
Half Year Half Year Year to
Notes to 30.09.19 to 30.09.18 31.03.19
GBP'000 GBP'000 GBP'000
Billings 120,213 108,964 426,901
-------------- ------------- ----------
Revenue
* Goods - Single retailer redemption products 19,904 15,086 55,624
* Other goods 67 70 7,511
* Services - Multi-retailer redemption products 10,083 9,094 41,111
* Other services 3,106 3,122 6,119
* Other 70 23 29
-------------- ------------- ----------
33,230 27,395 110,394
Cost of sales (24,988) (21,074) (79,117)
-------------- ------------- ----------
Gross profit 8,242 6,321 31,277
Distribution costs (709) (637) (2,934)
Administrative expenses (9,577) (7,988) (17,401)
-------------- ------------- ----------
Operating (loss)/profit before
exceptional item (2,044) (2,304) 10,942
Impairment of property, plant
and equipment - - (1,210)
Operating (loss)/profit (2,044) (2,304) 9,732
Finance income 789 778 1,572
Finance costs (25) - -
-------------- ------------- ----------
(Loss)/profit before taxation (1,280) (1,526) 11,304
Taxation 4 243 290 (2,422)
-------------- ------------- ----------
(Loss)/profit for the period
attributable to equity holders
of the parent (1,037) (1,236) 8,882
-------------- ------------- ----------
(Loss)/earnings per share 5
- basic (p) (0.56) (0.67) 4.78
- diluted (p) (0.56) (0.67) 4.77
All activities derive from continuing operations.
APPRECIATE GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF YEAR TO 30 SEPTEMBER 2019
Half Year Half Year Year to
to 30.09.19 to 30.09.18 31.03.19
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period (1,037) (1,236) 8,882
Other comprehensive (expense)/income
Items that will not be reclassified to
profit or loss:
Remeasurement of defined benefit pension
schemes - - (1,009)
Deferred tax on defined benefit pension
schemes - - 172
- - (837)
Items that may be reclassified subsequently
to profit or loss:
Foreign exchange translation differences 13 - (3)
Other comprehensive income/(expense) for
the period net of tax 13 - (840)
------------ ------------ ---------
Total comprehensive (expense)/income for
the period attributable to equity holders
of the parent (1,024) (1,236) 8,042
------------ ------------ ---------
APPRECIATE GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2019
Notes 30.09.19 30.09.18 31.03.19
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Goodwill 2,168 2,185 2,168
Other intangible assets 2,617 2,218 2,295
Property, plant and equipment 2,105 7,607 6,216
Right of use asset 5,202 - -
Deferred tax assets - 388 -
Retirement benefit asset 1,923 3,047 1,927
14,015 15,445 12,606
---------- ---------- ----------
Current assets
Inventories 20,452 18,596 4,574
Trade and other receivables 10,790 10,841 12,582
Tax receivable 1,269 221 -
Other financial assets - - 200
Monies held in trust 205,448 179,895 99,251
Cash and cash equivalents 7,679 34,544 36,868
Assets held for sale 3 4,966 - -
250,604 244,097 153,475
---------- ---------- ----------
Total assets 264,619 259,542 166,081
---------- ---------- ----------
Liabilities
Current liabilities
Trade and other payables (182,595) (192,209) (89,952)
Tax payable - - (580)
Provisions (66,357) (60,008) (58,286)
---------- ---------- ----------
(248,952) (252,217) (148,818)
---------- ---------- ----------
Non-current liabilities
Trade and other payables (5,266) - -
Deferred tax liability (553) - (553)
---------- ---------- ----------
(5,819) - (553)
---------- ---------- ----------
Total liabilities (254,771) (252,217) (149,371)
---------- ---------- ----------
Net assets 9,848 7,325 16,710
---------- ---------- ----------
Equity attributable to equity holders of the parent
Share capital 3,727 3,723 3,727
Share premium 6,470 6,373 6,470
Retained earnings (38) (2,460) 6,824
Other reserves (311) (311) (311)
---------- ---------- ----------
Total equity 9,848 7,325 16,710
---------- ---------- ----------
APPRECIATE GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Other Retained Total
capital premium reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April 2019 3,727 6,470 (311) 6,824 16,710
Total comprehensive expense
for the period
Loss for the period - - - (1,037) (1,037)
Other comprehensive income
Foreign exchange translation
adjustments - - - 13 13
--------- --------- ---------- ---------- ----------
Total other comprehensive
income - - - 13 13
--------- --------- ---------- ---------- ----------
Total comprehensive expense
for the period - - - (1,024) (1,024)
--------- --------- ---------- ---------- ----------
Transactions with owners,
recorded directly in equity
Equity settled share-based
payment transactions - - - 125 125
Dividends - - - (5,963) (5,963)
--------- --------- ---------- ---------- ----------
Total contributions by and
distribution to owners - - - (5,838) (5,838)
--------- --------- ---------- ---------- ----------
Balance at 30 September 2019 3,727 6,470 (311) (38) 9,848
--------- --------- ---------- ---------- ----------
Balance at 1 April 2018 3,711 6,137 (311) 4,488 14,025
Total comprehensive expense
for the period
Loss for the period - - - (1,236) (1,236)
Total comprehensive expense
for the period - - - (1,236) (1,236)
--------- --------- ---------- ---------- ----------
Transactions with owners,
recorded directly in equity
Equity settled share-based
payment transactions - - - (41) (41)
Exercise of share options 9 236 - - 245
LTIP shares awarded 3 - - (3) -
Dividends - - - (5,668) (5,668)
--------- --------- ---------- ---------- ----------
Total contributions by and
distribution to owners 12 236 - (5,712) (5,464)
--------- --------- ---------- ---------- ----------
Balance at 30 September 2018 3,723 6,373 (311) (2,460) 7,325
--------- --------- ---------- ---------- ----------
Balance at 1 April 2018 3,711 6,137 (311) 4,488 14,025
Total comprehensive income
for the year
Profit for the year - - - 8,882 8,882
Other comprehensive expense
Remeasurement of defined
benefit pension schemes - - - (1,009) (1,009)
Tax on defined benefit pension
schemes - - - 172 172
Foreign exchange translation
adjustments - - - (3) (3)
--------- --------- ---------- ---------- ----------
Total other comprehensive
expense - - - (840) (840)
--------- --------- ---------- ---------- ----------
Total comprehensive income
for the year - - - 8,042 8,042
--------- --------- ---------- ---------- ----------
Transactions with owners,
recorded directly in equity
Equity settled share-based
payment transactions - - - 11 11
Tax on equity settled share-based
payment transactions - - - (45) (45)
Exercise of share options 12 333 - - 345
LTIP shares awarded 4 - - (4) -
Dividends - - - (5,668) (5,668)
--------- --------- ---------- ---------- ----------
Total contributions by and
distribution to owners 16 333 - (5,706) (5,357)
--------- --------- ---------- ---------- ----------
Balance at 31 March 2019 3,727 6,470 (311) 6,824 16,710
--------- --------- ---------- ---------- ----------
APPRECIATE GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF YEAR TO 30 SEPTEMBER 2019
Half Year Half Year Year to
Notes to 30.09.19 to 30.09.18 31.03.19
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Cash (used in)/generated from
operations 6 (20,261) 4,053 6,874
Interest received 888 569 1,497
Tax paid (1,606) (786) (1,576)
------------- ------------- ----------
Net cash (used in)/generated
from operating activities (20,979) 3,836 6,795
------------- ------------- ----------
Cash flows from investing activities
Purchase of intangible assets (720) (307) (781)
Purchase of property, plant and
equipment (1,101) (230) (371)
Net cash used in investing activities (1,821) (537) (1,152)
------------- ------------- ----------
Cash flows from financing activities
Property receipt 360 - -
Payment of lease liabilities (37) - -
Proceeds from exercise of share
options - 245 345
Dividends paid to shareholders (5,769) (5,307) (5,668)
------------- ------------- ----------
Net cash used in financing activities (5,446) (5,062) (5,323)
------------- ------------- ----------
Net (decrease)/increase in cash
and cash equivalents (28,246) (1,763) 320
------------- ------------- ----------
Cash and cash equivalents at
beginning of period 34,563 34,243 34,243
------------- ------------- ----------
Cash and cash equivalents at
end of period 6,317 32,480 34,563
------------- ------------- ----------
Cash and cash equivalents comprise:
Cash 7,679 34,544 36,868
Bank overdrafts (1,362) (2,064) (2,305)
------------- ------------- ----------
6,317 32,480 34,563
------------- ------------- ----------
APPRECIATE GROUP PLC
SEGMENTAL REPORTING
FOR THE HALF YEAR TO 30 SEPTEMBER 2019
Restated*
Half Year Half Year Year to
to 30.09.19 to 30.09.18 31.03.19
GBP'000 GBP'000 GBP'000
Billings
Consumer 40,126 35,682 232,096
Corporate 80,087 73,282 194,805
--------------- -------------- -----------
Total billings 120,213 108,964 426,901
--------------- -------------- -----------
Revenue
Consumer 8,926 7,770 58,886
Corporate 24,304 19,625 51,508
--------------- -------------- -----------
Total revenue 33,230 27,395 110,394
--------------- -------------- -----------
Operating (loss)/profit
Consumer (3,126) (3,025) 6,809
Corporate 2,742 2,363 7,789
All other segments (1,660) (1,642) (4,866)
--------------- -------------- -----------
Operating (loss)/profit (2,044) (2,304) 9,732
--------------- -------------- -----------
*There has been a movement from the corporate segment to the
consumer segment in respect of our website highstreetvouchers.com.
This movement amounted to GBP1,425,000 of billings, GBP985,000
of revenue and GBP60,000 of operating profit.
NOTES TO THE HALF YEAR RESULTS
(1) Basis of preparation
The financial information in this interim report has been
prepared in accordance with the International Financial Reporting
Standards as adopted by the EU and the AIM rules of the London
Stock Exchange and on the basis of the accounting policies
described in the Group's annual report and accounts for the year
ended 31 March 2019, other than those in relation to leases,
details of which can be found in note 2, and Assets held for Sale,
details of which can be found in note 3. These accounting policies
have been based on the current standards and interpretations
expected to be effective at 31 March 2020. The Group does not
expect there to be a significant impact on the results from
standards, amendments or interpretations which are available for
early adoption but which have not yet been adopted.
The financial statements have been prepared under the historical
cost convention, as modified by the accounting for financial
instruments at fair value. In addition, this interim financial
report does not comply with IAS34 Interim Financial Reporting,
which is not currently required to be applied under AIM rules.
The Directors are of the opinion that the financial information
should be prepared on a going concern basis, in the light of
current trading and the forecast positive cash balances for the
foreseeable future, taking into account reasonably possible changes
in trading performance and customer behaviour.
The financial information included in this interim financial
report for the six months ended 30 September 2019 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006 and is unaudited. A copy of the Group's
statutory accounts for the year ended 31 March 2019, on which the
auditors gave an unqualified opinion and did not make a statement
under section 498 of the Companies Act 2006, has been filed with
the registrar of companies.
(2) New standards adopted by the Group
With effect from 1 April 2019 the Group has adopted IFRS 16,
Leases which supercedes IAS 17: Leases, IFRIC 4: Determining
Whether an Arrangement Contains a Lease, SIC 15: Operating Leases -
Incentives and SIC 27: Evaluating the Substance of Transactions in
the Legal Form of a Lease. The Group has applied a modified
retrospective approach when transitioning to the new standard.
Under this approach, the cumulative effect of initial application
of the standard is recognised at the date of adoption, ie 1 April
2019 and no restatements have been made in respect of prior
periods.
The Group is a party to lease contracts for, amongst others:
- Office space; and
- Plant and machinery.
Leases are recognised, measured and presented in line with
IFRS16. The Group implemented a single accounting model, requiring
the Group to recognise assets and liabilities for all leases,
excluding exceptions listed in the standard.
Based on the accounting policy applied, the Group recognises a
"right-of-use asset" (ROUA) and a Lease Liability (LL) at the
commencement date of the contract for all leases conveying the
right to control the use of an identified asset for a period of
time. The commencement date is the date on which a lessor makes an
underlying asset available for use by the Group.
The ROUAs are initially measured at cost which comprises:
- The amount of the initial measurement of the LL;
- Any lease payments made at or before the commencement date, less any lease incentives;
- Any initial direct cost incurred by the Group;
- An estimate of costs to be incurred by the Group in restoring
the site on which the assets are located.
After the commencement date the ROUAs are measured at cost less
any accumulated depreciation and any accumulated impairment losses
and adjusted for any remeasurement of the LL.
Depreciation is calculated using the straight line method over
the estimated useful lives as follows:
Term in Years
* Land and buildings 2-15
* Plant and machinery 3 - 4
The Group depreciates the ROUA from the commencement date to the
earlier of the end of useful life of the ROUA or to the end of the
lease term.
The LL is initially measured at the present value of the lease
payments that are not paid at that date. These include:
- Fixed payments less any lease incentives received; and
- Variable lease payments that depend on an index or rate,
initially measured using the index or rate as at the commencement
date; and
- Amounts expected to be payable by the Group under residual value guarantees.
The lease payments exclude variable elements which are dependent
on external factors such as periodic rent reviews. Variable lease
payments not included in the initial measurement of the LL are
recognised directly in the profit and loss.
The lease payments are discounted using the Group's incremental
borrowing rate (2%) or the rate implicit in the lease contract.
The application of IFRS16 requires the Group to make judgments
that affect the valuations of the LL, and the ROUA. These include
determining contracts in the scope of IFRS16, determining the
contract term and determining the interest rate used for
discounting of future cash flows.
The lease term determined by the Group comprises:
- Non-cancellable period of lease contracts; and
- Periods covered by an option to extend the lease if the Group
is reasonably certain to exercise that option; and
- Periods covered by an option to terminate the lease if the
Group is reasonably certain not to exercise that option.
After the commencement date the Group measures the LL by:
- increasing the carrying amount to reflect interest on the LL; and
- reducing the carrying amount to reflect lease payments made; and
- Re-measuring the carrying amount to reflect any reassessment or lease modification.
The present value of the lease payment is determined using the
discount rate representing the rate of interest of entities with a
rating similar to the Group's rating, observed in the period when
the lease contract commences or is modified.
ROUA
Land and buildings Plant and
equipment Total
GBP'000 GBP'000 GBP'000
Cost
As at 1 April 2019 113 8 121
Increases 5,150 70 5,220
------------------- ----------- --------
At 30 September 2019 5,263 78 5,341
------------------- ----------- --------
Accumulated depreciation
As at 1 April 2019 - - -
Charge in period 133 6 139
------------------- ----------- --------
At 30 September 2019 133 6 139
------------------- ----------- --------
Net book amount
At 30 September 2019 5,130 72 5,202
------------------- ----------- --------
The increase in property ROUA's in the period result from the
lease of floors 3 and 4, 20 Chapel Street Liverpool. The increase
in plant and machinery ROUA's in the period result from the leasing
of fork lift trucks for our Valley Road warehouse facilities.
The cost relating to variable lease payments that do not depend
on an index or a rate amounted to GBPNil for the six months ended
30 September 2019. There were no leases with residual value
guarantees or leases not yet commenced to which the Group is
committed.
The expenses relating to leases for which the Group applied the
exemption described in paragraph 5a of IFRS16 (leases with the
contract term of less than 12 months) amounted to GBP10,152. The
expenses relating to leases for which the Group applied the
exemption described in paragraph 5b of IFRS16 (leases for which the
underlying asset is of low value) amounted to GBP627.
Reconciliation of operating lease commitments to leases initially
recognised
Land and Plant and
buildings equipment Total
GBP'000 GBP'000 GBP'000
Operating lease commitments
at 31 March 2019 127 119 246
Lease payments made pre 31 March
relating to post 31 March period (12) - (12)
Value of future interest charges (2) - (2)
Commitments recorded as at 31
March 2019 for which underlying
assets were made available to
the group subsequent to that
date - (96) (96)
Maintenance costs in lease commitments - (7) (7)
Leases terminated post 31 March
2019 - (8) (8)
Leases initially recognised
at 1 April 2019 113 8 121
----------- ----------- --------
Trade and other payables - lease liabilities
30.09.19
GBP'000
Short term lease liabilities (less
than one year)
Land and buildings 58
Plant and machinery 25
83
---------
Long term lease liabilities (more than one year but
less than five years)
Land and buildings 725
Plant and machinery 47
772
---------
Long term lease liabilities (more than
five years)
Land and buildings 4,494
Plant and machinery -
4,494
---------
Net book amount
At 30 September 2019 5,349
---------
Changes in Financial
Liabilities
Land and buildings Plant and
equipment Total
GBP'000 GBP'000 GBP'000
As at 1 April 2019 113 8 121
New leases 5,170 70 5,240
Interest accrued 25 - 25
Lease payments (31) (6) (37)
At 30 September 2019 5,277 72 5,349
------------------- ----------- --------
(3) Assets held for sale
On initial classification as held for sale, assets are measured
at the lower of their present carrying amount and the fair value
less costs to sell, with any adjustments taken to the profit or
loss account. These assets are not depreciated.
Assets are classified as held for sale when they satisfy the
following criteria:
-- management is committed to a plan to sell
-- the asset is available for immediate sale
-- an active programme to locate a buyer is initiated
-- the sale is highly probable, within 12 months of
classification as held for sale (subject to limited exceptions)
-- the asset is being actively marketed for sale at a sales
price reasonable in relation to its fair value
-- actions required to complete the plan indicate that it is
unlikely that plan will be significantly changed or withdrawn
30.09.19
GBP'000
Property 4,966
Subsequent to a valuation of the Valley Road property conducted
in early 2019 an assessment was made whether the property asset was
an Asset held for sale at 31 March 2019. As the sale of the
property was not highly probable within 12 months the property
continued to be classified as a Non-current asset but was impaired
to the level of the valuation. As at 30 September 2019 a
reassessment of this position took place and as all of the above
criteria have now been met an assessment has been made to transfer
the property as an Assets held for sale.
(4) Taxation
The taxation credit for the six months to 30 September 2019 has
been calculated using an overall effective tax rate of 19.0% which
has been applied to the taxable income (half year to 30 September
2018 - 19.0%).
(5) Earnings per share
Basic earnings per share (EPS) is calculated by dividing the
earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the
period.
For diluted EPS, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential
ordinary shares.
The calculation of basic and diluted EPS is based on the
following figures:
Half Year Half Year Year to
to 30.09.19 to 30.09.18 31.03.19
GBP'000 GBP'000 GBP'000
Earnings
(Loss)/profit before exceptional
item (1,037) (1,236) 10,092
Impairment of property, plant
and equipment - - (1,210)
--------------- --------------- -------------
Total (loss)/earnings for period (1,037) (1,236) 8,882
--------------- --------------- -------------
Half Year Half Year Year to
to 30.09.19 to 30.09.18 31.03.19
Weighted average number of
shares
Basic EPS - weighted average
number of shares 186,347,228 185,709,925 185,964,433
Diluting effect of employee
share options - - 112,540
--------------- --------------- -------------
Diluted EPS - weighted average
number of shares 186,347,228 185,709,925 186,076,973
--------------- --------------- -------------
Basic EPS
Weighted average number of
ordinary shares in issue 186,347,228 185,709,925 185,964,433
--------------- --------------- -------------
EPS (p) (0.56) (0.67) 4.78
--------------- --------------- -------------
Underlying basic EPS
Weighted average number of
ordinary shares in issue 186,347,228 185,709,925 185,964,433
--------------- --------------- -------------
EPS (p) (0.56) (0.67) 5.43
--------------- --------------- -------------
Diluted EPS
Weighted average number of
ordinary shares 186,347,228 185,709,925 186,076,973
--------------- --------------- -------------
EPS (p) (0.56) (0.67) 4.77
--------------- --------------- -------------
Diluted EPS
Weighted average number of
ordinary shares 186,347,228 185,709,925 186,076,973
--------------- --------------- -------------
EPS (p) (0.56) (0.67) 5.42
--------------- --------------- -------------
(6) Reconciliation of net (loss)/profit to net cash
(outflow)/inflow from operating activities
Half Year Half Year Year
to 30.09.19 to 30.09.18 to 31.03.19
GBP'000 GBP'000 GBP'000
Net (loss)/profit (1,037) (1,236) 8,882
Adjustments for:
Tax (243) (290) 2,422
Interest income (789) (778) (1,572)
Interest expense 25 - -
Research and development tax
credit - - (54)
Depreciation and amortisation 734 675 1,394
Impairment of property, plant
and equipment - - 1,210
Impairment of goodwill - - 17
Decrease in other financial
assets 200 200 -
Increase in inventories (15,878) (14,788) (766)
Decrease/(increase) in trade
and other receivables 1,333 284 (1,589)
Increase/(decrease) in trade
and other payables 93,378 101,260 (877)
Increase in provisions 8,071 11,996 10,274
Increase in monies held in
trust (106,197) (92,903) (12,259)
Decrease/(increase) in retirement
benefit asset 4 (326) (215)
Translation adjustment 13 - (3)
Taxes paid on share-based payments - - (116)
Share-based payments 125 (41) 126
Net cash (outflow)/inflow from
operating activities (20,261) 4,053 6,874
------------- ------------- -------------
(7) Approval
This statement was approved by the board on 25 November
2019.
(8) Reports
A copy of this announcement will be available on the Group's
website from today www.appreciategroup.co.uk and will be mailed to
shareholders on or before 18 December 2019. Copies will also be
available for members of the public at the Company's registered
office - Valley Road, Birkenhead CH41 7ED and also at the offices
of the Company's registrars, Computershare Investor Services PLC, P
O Box 82, The Pavilions, Bridgwater Road, Bristol BS99 7NH.
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
IR BCBDBXGDBGCL
(END) Dow Jones Newswires
November 27, 2019 02:00 ET (07:00 GMT)
Appreciate (LSE:APP)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Appreciate (LSE:APP)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
