TIDMCAU
RNS Number : 5858G
Centaur Media PLC
18 March 2020
18 March 2020
Centaur Media Plc
Preliminary results for the year ended 31 December 2019
Excellent progress on business unit profitability and cost
reduction
Stronger balance sheet with cash balance of over GBP9m
Coronavirus risks and mitigation plans under continuous
review
Margin Acceleration Plan 2022 on track
Financial Highlights
GBPm 2019 2018
------------------------------- ------ -------
Statutory revenue 48.9 50.3
Adjusted(1) EBITDA 2.6 1.4
Adjusted(1) operating loss (1.1) (2.2)
Group statutory profit/(loss)
after taxation 1.9 (14.2)
------------------------------- ------ -------
-- Completion of disposal programme gave a profit on disposal of
GBP7.8m and has created a simpler business with two divisions, Xeim
focused on the marketing profession and The Lawyer focused on the
legal profession
-- Revenues fell 3% to GBP48.9m as management exited loss-making activities within Xeim
-- Adjusted EBITDA grew by 24% at Xeim and 16% at The Lawyer
-- Annualised reduction of GBP5m of overhead costs run-rate achieved on schedule
-- Group adjusted EBITDA(1) (pre-IFRS 16) increased to GBP2.6m (2018: GBP1.4m)
-- Proposing a final dividend of 0.5p per share in accordance with new dividend policy
-- Net cash of GBP9.3m at 31 December 2019
Centaur Media, an international provider of business
intelligence and specialist consultancy, is pleased to present its
preliminary results for the year ended 31 December 2019.
The markets remain challenging as the impact of coronavirus on
our clients and our business remains uncertain. Centaur is
continuously evaluating its risks as the situation develops and is
developing mitigating contingency plans to secure the business.
Notwithstanding this, Centaur will endeavour to achieve its target
of a double-digit Adjusted EBITDA margin in 2020 as it pushes ahead
with its Margin Acceleration Plan to increase EBITD margins to at
least 20% by 2022.
During the year, Centaur successfully sold its businesses in
engineering, financial services, human resources and travel and
meetings for gross proceeds of GBP21.75m. The completion of the
disposal programme in July 2019 created a simpler, more focused
Group with two businesses, Xeim in marketing services and The
Lawyer in the legal sector.
The simplification has made it possible for Centaur to reduce
its overhead costs run rate by an annualised GBP5m, the bulk of the
benefit of which will flow through in 2020. An increased focus on
profitability and cross-selling at Xeim and the continued growth of
The Lawyer has enabled both businesses to improve their adjusted
EBITDAs significantly.
Xeim is now managing and cross-selling marketing brands with
more effective customer focus. Influencer Intelligence has
developed its offering to remain at the forefront of its sector and
Marketing Week has added a new brand eLearning course and enhanced
its e-commerce capability. The Festival of Marketing attracted 48%
more visitors - a new record. Econsultancy subscriptions and
MarketMakers continue to face challenges.
The Lawyer continued its strong revenue and profit growth, with
a strong performance on premium content revenues, successful launch
of the Litigation Tacker and an encouraging debut for the Marketing
Leadership Summit.
Centaur is proposing a final dividend payment of 0.5p per share,
payable on 29(th) May 2020. The Board was intending to propose the
payment of another special dividend in May 2020 but has decided to
defer this decision until there is more visibility around the
impact of the coronavirus on the Group's cash flows. To date, we
have deferred two of our larger The Lawyer events from Q2 to Q4 and
the Festival of Marketing is expected to continue in October, as
planned.
Swag Mukerji, Chief Executive Officer, commented:
"The coronavirus impact affects us all and has given rise to
considerable uncertainty for the foreseeable future. Centaur has
made good progress since completing its disposal programme last
July, reducing our central overhead costs run-rate by GBP5m and
improving the profitability of both our marketing and legal
businesses, through an improved revenue mix, cross-selling and
elimination of duplicate costs.
We will endeavour to keep our MAP22 plan on track, to increase
EBITDA margins to at least 20% by 2022, as we focus on profitable
growth opportunities. We have a strong balance sheet, supported by
a GBP25m undrawn banking facility, and will continue to monitor our
cash position closely as the current uncertainty develops.
Global health concerns apart, Centaur has begun 2020 as a far
simpler and more focused Group, with new energy to address the many
opportunities we see in our markets ."
Enquiries
Centaur Media plc
Swag Mukerji, Chief Executive 020 7970 4000
Simon Longfield, Chief Financial Officer
Teneo
07793 522824/ 07876
Paul Durman/ Rebecca Hislaire 879856
Notes:
(1) Adjusted results exclude adjusting items, as detailed in
note 4 of the financial information. EBITDA is stated excluding the
impact of IFRS 16 in order to show a true comparison with 2018.
Advise. Inform. Connect
Our vision
We will be the "go to" company in the international Marketing
Services and Legal sectors to:
} Inform customers using data, content & insight with the
provision of business intelligence products;
} Provide advice to businesses on how to improve their
performance and ROI; and
} Connect specific communities through media and events.
We will provide cutting-edge insight and analysis, building
strong and lasting relationships with our customers and aiming to
deliver long-term sustainable returns to our shareholders.
Our business
Centaur is an international provider of business information and
specialist consultancy that inspires and enables people to excel at
what they do within the marketing and legal professions. Our Xeim
and The Lawyer business units serve the marketing and legal sectors
respectively and, across both, we offer our customers a wide range
of products and services targeted at helping them add value.
Our reputation is based on the trust and confidence arising from
a deep understanding of these sectors and we have developed a
strong track record for providing insight, content and data. Our
key strengths are the expertise of our people, the quality of our
brands and products, and our ability to harness technology to
innovate continually and develop our offering. This enables us to
help our customers raise their aspirations and deliver better
performance.
Highlights of the year
Strategic
-- Centaur concluded a radical transformation programme to
reshape the Group as a much simpler business focused on two
sectors: the marketing and legal professions.
-- We successfully completed the divestments of our non-core
legacy businesses in financial services, human resources, business
travel and meetings, and engineering for a gross consideration of
GBP21.75m.
-- The Group now consists of Xeim, the new name given to our
marketing businesses at the beginning of last year, and The
Lawyer.
-- The simplification enables the Group to focus on growth,
capitalise on synergies and deliver shareholder value.
-- As we look towards Centaur's next stage of development, we
announced our Margin Acceleration Plan 2022, MAP22. This is our
three-year plan to improve EBITDA margins to at least 20% by 2022
through a combination of profitable revenue growth and operating
cost efficiencies.
Operational
-- The formation of Xeim enabled significant cost reduction
during 2019, as duplicate brand management and processes were
eliminated. Additionally, the simplification of the Group
facilitated the reduction of central overhead costs by GBP5m on an
annualised basis. The benefits of this will be seen in 2020.
-- Xeim focused on growing its profitable revenue and
rationalised its portfolio of low margin/loss making businesses,
delivering a considerably enhanced margin:
o Influencer Intelligence continued to develop its international
offering to remain at the forefront of the fast-growing influencer
marketing sector;
o Marketing Week launched a digital subscription platform and
redesigned website; and
o We built on the success of the Mini-MBA programme and launched
a new marketing brand course.
-- The Lawyer continued its growth through the successful launch
of the Litigation Tracker and the Marketing Leadership Summit event
was a successful addition to The Lawyer's events portfolio.
Financial
-- The Group reported an adjusted(1) operating loss in 2019 of
GBP1.1m (2018: a loss of GBP2.2m). On a statutory basis the Group
made an operating loss in 2019 of GBP8.4m (2018: a loss of
GBP20.3m). The Group's performance improved during the year with
the benefit of trading seasonality and initial cost savings from
the Group's simplification
-- Xeim and The Lawyer combined have increased adjusted
EBITDA(1) by 21% due to cost savings in Xeim and revenue growth in
The Lawyer.
-- A final ordinary dividend of 0.5p per share is proposed,
which, together with the interim ordinary and special dividends of
3.5p per share, gives a total of GBP5.7m (4.0p per share) paid out
as dividends relating to 2019.
-- From 1 January 2020, Centaur has adopted a new progressive
dividend policy targeting a pay-out ratio of 40% of adjusted
earnings, subject to a minimum dividend of 1.0p per share.
(1) See financial performance review for explanation of adjusted
results and alternative performance measures
PERFORMANCE: CEO REVIEW
Overview of 2019
I am pleased to deliver my first report to you as Centaur's CEO,
having succeeded Andria Vidler in September. Having worked closely
with Andria since joining Centaur as CFO in 2016, I have a thorough
understanding of how the Group has undergone a profound
transformation in recent years and I have set the MAP22 strategy
going forward. I would like to thank Andria for her considerable
guidance and support over the last few years.
2019 marked the start of a new chapter in Centaur's evolution.
As described in the strategy section, the completion of our
divestment programme has made Centaur a much simpler business
focussed on two sectors: the marketing and legal professions.
These divestments were completed shortly before Centaur moved
into attractive modern offices close to London's Waterloo station.
Our new home was designed to foster collaboration, with 270
employees on a single floor, and I think I speak for all employees
in saying that the move has injected fresh energy and momentum into
our businesses.
The move is one example of how Centaur's simpler structure has
unlocked important benefits and efficiencies. Through the
elimination of costs needed to support the businesses sold last
year and other measures, the Group has reduced annualised central
overheads by the end of 2019 by GBP5m, as promised, and the full
year effect of this will be seen in 2020.
Results for the year
2019 was a complex year for Centaur with many moving parts and
the reporting requirements make it difficult to clearly articulate
what has fundamentally happened to the Group. We earned profits
from the disposed businesses until the day they were sold, and this
is reported under discontinued operations. During this period, we
maintained the full central overhead functions required to support
these businesses and this is shown in continuing operations. Once
they were sold, we continued to provide services to these
businesses generating income for the Group from Transitional
Service Agreements (TSA), the last of which expired at the end of
2019. We therefore could not eliminate a proportion of the overhead
costs immediately after the disposal, although they were removed by
the end of 2019 and will deliver the GBP5m annualised benefit in
2020.
While both Xeim and The Lawyer grew their profits in 2019, the
impact of the higher central overhead resulted in Centaur achieving
an adjusted operating loss of GBP1.1m and a statutory operating
loss of GBP8.4m on revenues of GBP48.9m. Group adjusted EBITDA(1)
margin has grown from 3% to 5%. It should be noted that the
seasonal trading pattern of the new simplified group will result in
the majority of profits arising in the last quarter of the
year.
Centaur ended the year with GBP9.3m of cash (2018: GBP0.1m),
having received net proceeds of GBP16.4m from the businesses sold
during the year.
Details of the trading performance are contained within the
Operational Review of my report.
The divestments encompassed the sale of our financial services
division, including titles such as Money Marketing, Mortgage
Strategy, Platforum, Taxbriefs and Headline Money to Metropolis
Group. Centaur Media Travel and Meetings Ltd, the owner of the
Business Travel Show and The Meetings Show, was sold to Northstar
Travel Media UK Limited. Centaur Human Resources Limited, which
includes Employee Benefits, was acquired by DVV Media International
and our engineering titles, including the Engineer and Subcon, were
sold to Mark Allen Group.
Dividend
The reshaping of the Group was a catalyst for the Board to
review its dividend policy, having distributed more than 100% of
cumulative earnings to shareholders over the previous three years.
In September, we announced a new progressive dividend policy which
targets a pay-out ratio of 40% of adjusted earnings, or 1.0p per
share, whichever is the higher. This came into force on 1 January
2020.
We also announced a distribution of GBP5.0m, comprising an
interim dividend of 1.5p per share and a special dividend of 2.0p
per share, paid in October 2019. Under the new dividend policy, we
will now pay a final ordinary dividend of 0.5p per share in May
2020. Dividends to shareholders, ordinary and special, relating to
2019 therefore total GBP5.7m (4.0p per ordinary share).
We had planned to pay a further special dividend alongside our
ordinary dividend in May. However, we have decided to defer this
decision until there is more visibility around the impact of
coronavirus on the Group's cash flows.
(1) Excluding the impact of IFRS 16 in order to show a
comparison to 2018
Operational review
Centaur now comprises two business units, Xeim and The Lawyer.
Xeim is Centaur's largest business and contributes 83% of Group
revenues, with The Lawyer making up the balance. Each business unit
is run on a stand-alone basis with dedicated management teams. As
explained above, the 2019 central overhead did not reflect the
simplified group and going forward, in 2020, there is a lean
central function, primarily focused upon external governance and
reporting, following the GBP5m overhead saving.
Xeim
Xeim was formed in early 2019 and brings our marketing brands
into a single business unit, allowing us to manage them more
effectively, cross-sell our products more efficiently, eliminate
duplication of effort and enhance their margins.
In 2019, Xeim delivered a turnover of GBP40.7m, a 4% decrease
from the previous year as a result of management action to reduce
low margin and loss-making revenue streams such as Marketing Week
Live, together with and disappointing performances from
MarketMakers and some parts of Econsultancy.
Xeim also identified further opportunities to eliminate costs
and improve our operational efficiency. As a result, Xeim increased
its adjusted EBITDA margin from 12% to 15%, achieving a business
unit adjusted EBITDA of GBP6.3m, which represents a pleasing growth
of 24% from the prior year. This growth was driven by the
introduction of new products such as the Mini-MBA Brand course,
growth in brand margins and eliminating duplicate costs in the
brand management structures.
As discussed earlier, we interact with customers by using the
power of our brands and generate different types of revenues from
this. This creates both cross-selling opportunities and operational
synergies and Xeim's customer centric strategy is achieving success
with its largest customers as we create more tailored solutions and
integrated services across multiple brands. Our Top 50 customers in
2019 renewed contracts on terms that were 35% higher than the prior
year reflecting the value created from the additional services that
we delivered. This reflects the new Xeim operational structure
which successfully cross-sold a wider portfolio of Xeim's products
and services and therefore increased the average value sold to each
customer.
In Xeim, Premium content revenues are generated, in the main,
from our Influencer Intelligence and Econsultancy brands. Creative
Review has been successfully put behind a paywall and the recent
move of Marketing Week to a digital platform, incorporating a
paywall, is showing good early signs.
The global influencer marketing market, currently worth an
estimated US$5.5bn, is projected to grow to US$22.3bn by 2024
(source: MarketsandMarkets 2019). Influencer Intelligence, our
market leading source of trusted information and analytics for
brands seeking to harness the power of global influencers,
continued to perform well, with revenue increasing 11% in 2019.
This underpins our growth strategy in a dynamic sector and is
one of our key subscription revenue growth drivers for MAP22. In
2020, we are adding c.100k international influencers to our content
and making significant improvement to our products such as extended
analytics on new social media networks, brand analytics, campaign
management and measurement functionality.
At Econsultancy, we launched a new platform which has two clear
and distinct customer offerings for subscribers:
-- Insight: Econsultancy's proprietary content now sits behind
an ecommerce-driven subscriber paywall as part of a fully
integrated, easy-to-navigate service which makes the content easier
to digest and more practical to use; and
-- Learning: The platform includes a dedicated "Econ Learn" section which brings together all Econsultancy's digital learning content. Users can assess their skills using the Digital Skills Index and follow a tailored learning journey based on their results, dip into learning modules or engage in Econsultancy's structured eLearning courses - all within a single intuitive product environment.
Econsultancy saw renewals by value increasing to 63% in 2019, up
from 54% in 2018. While still lower than desired, it is pleasing to
see that the downward trend from 2018 has been reversed.
Econsultancy is also a leading provider of training and has been
strengthened through the addition of Oystercatchers into the
Econsultancy brand. Our focus on blended learning underpins our
growth strategy and is supported by both improved product design
and an enhanced sales team. A key element of the Oystercatchers
business model is the relationship and chemistry between agencies
and clients and for 2019 we placed more emphasis on this important
dynamic. While its revenues have shrunk, the decision to pull back
the team responsible for selling and marketing Econsultancy in the
US to the UK has worked and is improving Econsultancy margins while
continuing to provide services to our US customers. Although the
overall revenues from Econsultancy did not grow in 2019, billings
and margins have, which will be reflected in improved performance
in 2020.
Marketing Week has shown early positive signs following the
launch of a new digital platform which incorporates a paywall to
enable e-commerce, improved search functionality, new navigation
and a cleaner design. It is possible to upgrade to a combined
Marketing Week and Econsultancy service via a single log-in, which
gives our customers an efficient way of accessing our products. The
new Marketing Week Knowledge Bank allows Xeim to generate
additional revenues from white papers and research on its
website.
The Festival of Marketing, Xeim's flagship event, delivered
another compelling line-up of speakers in 2019 and received
positive feedback from delegates and sponsors. Attendance was up by
48% in comparison with 2018 and there was a double-digit
improvement in e-commerce sales. The VIPs in attendance included
almost 200 senior management and CMO level guests. This gave the
Festival a palpable buzz and generated a positive experience for
our event sponsors and strategic partners. Speakers at the event
included Dave Lewis, CEO at Tesco, actress and activist Rose
McGowan, TV presenter Davina McCall and Marketing Week columnist
Mark Ritson who set the scene with a packed session on brand
excellence. This success puts the event in a strong position for
2020.
eLearning, which includes the Mini-MBA, a joint initiative with
Mark Ritson, has gone from strength to strength with revenue
growing 75% in 2019 underpinned by a 47% year-on-year increase in
delegates. The feedback is overwhelmingly positive across every
intake with an average net promoter score of +76. Building on this
success, in September 2019 we launched a new marketing brand course
with two further courses planned for 2020. The new Mini-MBA Brand
Management course is only available to Marketing Week Mini-MBA
alumni and aims to help marketers with the skills they need to
become brand managers.
MarketMakers had a challenging 2019 with marketing services
revenues at Really down 4% year-on-year and telemarketing services
down 3%. This was driven by increased customer churn within
telemarketing services in the SME sector, reduced spend from
certain key accounts and lower than anticipated renewals at Really
in the first half of the year. Due to the relatively low margins in
this business, the profit impact is limited.
At the end of 2019, Centaur announced the appointment of Jude
Bridge as managing partner of Oystercatchers and Darren McGill as
managing director of MarketMakers. Jude was an award-winning
marketing director at Marks & Spencer and Save the Children and
brings deep expertise in building some of the UK's strongest
brands. Darren has a wealth of experience in senior commercial
roles, most recently as chief revenue officer at Signal AI, the
leading media information business. Both are already having an
impact and will take on broader roles within Xeim. Jude will
develop and lead a marketing excellence programme to ensure
best-in-class marketing practice, while Darren will develop and
lead a sales excellence initiative to improve customer retention
and sales productivity.
The key drivers of Xeim going into 2020 are the growth of our
Influencer Intelligence and Econsultancy subscription revenues, the
continued success of the mini-MBA and building upon the success of
the Festival of Marketing by attracting new and repeat delegates
and sponsors. The disappointing performances of MarketMakers and
Econsultancy are being addressed and, whilst improved performances
are expected in 2020, they remain a challenge.
The Lawyer
The Lawyer is a leading provider of intelligence to the global
legal market, generating revenue from digital subscriptions, live
events and marketing solutions. The Lawyer represented 17% of Group
revenues in 2019 and achieved a 9% increase in underlying revenue,
a 16% increase in adjusted EBITDA and an adjusted EBITDA margin of
35%.
The successful move to a multi-channel digital platform
continues to support The Lawyer's growth. Alongside a 12% increase
in corporate clients since 2018, the website has seen a
double-digit year-on-year increase in the frequency of subscriber
visits and increased content consumption, with 50% of subscribers
now visiting on a daily or weekly basis.
We have continued to develop The Lawyer's premium content
business which represents just over 40% of its total revenue, with
a growth of 17% in underlying revenue over the year.
In January 2019, The Lawyer launched the Litigation Tracker, an
interactive tool that extends the functionality of The Lawyer's
current market insight products and provides real-time insight into
the UK litigation market. With over 40 corporate clients and
extremely positive feedback from users, we are pleased with its
reception and plan to build on this momentum, including the
addition of further data sets in 2020.
The Lawyer's events business also grew by 17%, propelled by the
first new event launches since 2016. This included the inaugural
Marketing Leadership Summit, which was well-received with a net
promoter score of +57 from attendees.
Encouragingly, our more established events also performed well
with particularly strong year-on-year growth achieved in our GC
Summit and In-House Financial Services conferences, our European
Awards and our roundtable events for individual clients.
Revenue from marketing and advertising solutions continued to be
a challenge and fell by 4% during the year, although the rate of
decline has slowed.
People and culture
Our executive committee is committed to ensuring we maintain a
culture that supports, engages and empowers employees to fulfil
their potential. It is this culture that underpins our business
ambitions and we continue to develop internal training plans and
communication processes to ensure our employees' success.
Across the Group, the gender balance is good with a male-female
ratio of 49:51. At Board level, half of our non-executive directors
are female, but there is more work to be done to encourage and
promote women onto our senior leadership team which only has a
one-third female representation.
As a company, we understand the importance of family and we
offer enhanced maternity and paternity leave. During 2019, we
introduced a wider range of flexible working arrangements to
coincide with our new office environment in London. We have a high
rate of maternity returners (85% in 2019) and 8% of our workforce
have part-time working arrangements.
In 2019 we established a workforce advisory panel to cover
diversity, inclusion, culture and engagement (DICE) to ensure that
our culture supports and empowers our employees and promotes their
ongoing development. DICE reports to me and frequently meets with
the executive committee. There is also a nominated non-executive
director to oversee the working of DICE. Our policies and working
practices embrace an inclusive working environment and takes a
proactive and progressive approach to supporting diversity. Our
hiring policy is focused on appointing the best person for the job
irrespective of race, gender, sexual orientation or disability. The
Company also offers a range of mental health, wellbeing and fitness
sessions.
In 2019 we continued with our formal mentoring programme which
was launched in 2018. We delivered face-to-face coaching sessions
to more than 100 staff at all levels and now have qualified Mental
Health First Aiders in the business. We ran workshops for line
managers to support flexible and remote working, and staff continue
to participate in and be advocates of our Mini-MBA programme.
Summary
In 2019, Centaur radically transformed the shape of our
business. In simplifying our portfolio and concentrating our
attention on two key markets, we have a more streamlined
customer-facing group that can direct its focus at developing its
product offerings and digital capabilities. Cross-selling,
technology platform enhancement and employee expertise will enhance
these product offerings and quality of revenue. The Lawyer,
Influencer Intelligence and eLearning will be key drivers of
revenue growth towards MAP22.
Coronavirus has brought uncertainty to global markets and whilst
our customers remain committed, some of their decisions are being
delayed. We have carried out detailed risk analysis across the
business and have postponed two of The Lawyer's key events from Q2
to Q4. The Festival of Marketing will go ahead in October, as
planned, and we shall keep our remaining events under review. We
have a strong balance sheet and an undrawn GBP25m credit facility.
We will be keeping a close eye on cash through these uncertain
times.
The dramatic scale and pace of change in Centaur has made this a
tough year for our employees. Centaur's transformation has only
been achievable through their expertise and commitment and I am
incredibly grateful for the energy, resilience and positive
approach they have demonstrated during this period of change. As we
now enter the next stage of the Group's development, I am confident
that we have the strategy and structure and people in place to
achieve our MAP22 goal. I look forward to building towards this in
2020.
Key performance indicators (financial and non-financial)
The Group has set out the following core financial and
non-financial metrics to measure the Group's performance. The KPIs
are monitored by the Board by reference to the annual budget and
the focus on these measures will support the successful
implementation of the MAP22 strategy. These indicators are
discussed in more detail in the CEO report and Financial
Review.
KPI Graph Commentary
Financial
Underlying revenue 2018: (1)%, 2019: The growth in total revenue adjusted
growth (2)% to exclude the impact of event timing
differences, as well as the revenue
contribution arising from acquired
or disposed businesses.
Adjusted EBITDA margin* 2018: 3%, 2019: Adjusted EBITDA as a percentage
5% of revenue where adjusted EBITDA
is defined as adjusted operating
profit before depreciation and impairment
of tangible assets, and amortisation
and impairment of intangible assets
other than those acquired through
a business combination. For comparative
purposes, the 2019 figure excludes
the impact of IFRS 16 (Leases) (see
Financial Review).
Adjusted diluted EPS 2018: 2.6p, 2019: Diluted earnings per share calculated
0.3p using the adjusted earnings, as
set out in note 9 of the financial
information.
Cash conversion 2018: 85%, 2019: The percentage by which adjusted
100% operating cash flow covers adjusted
EBITDA (on continuing and discontinued
operations) as set out in the financial
performance review.
Non-financial
Attendance at Festival 2018: 2,780; 2019: Number of unique delegates attending
of Marketing 4,119 the Festival of Marketing
Delegates on mini-MBA 2018: 1,960; 2019: Number of delegates on mini-MBA
course 2,875 and related eLearning courses in
the year
Xeim customers >GBP50k 2018: 109 (GBP18.4m); Number and value of Xeim customers
2019: 108 (GBP18.1m) that have sales in the year of greater
than GBP50,000
Top 250 law firm customers 2018: 159 (64%); Number and percentage of top 200
2019: 170 (68%) UK law forms and top 50 US law firms
=========================== ====================== ===========================================
*See definitions in Financial Review.
PERFORMANCE: FINANCIAL REVIEW
Overview
2019 was a significant year for Centaur as it completed its
restructuring through the divestment programme described in the
CEO's review. Despite the impact of the divestment programme on the
Group and its employees, I am delighted to report that both Xeim
and The Lawyer grew adjusted operating profit, adjusted EBITDA and
adjusted EBITDA margin in 2019. Combined with the annualised
overhead cost savings of GBP5m that we promised at our interim
results, the full year impact of which will be seen in 2020, this
performance has put Centaur well on the path to obtaining our MAP22
target of at least 20% adjusted EBITDA margin by 2022 (without the
benefit of the impact of IFRS 16).
2019 was dominated by the divestment programme in the first half
of the year with income generating transitional arrangements
continuing long into the second half of the year. The result of the
divestment programme is a simpler, more streamlined Group with
increased focus on its two core businesses. By removing non-core
assets, we have been able to achieve a significant reduction in
overhead costs and have recognised exceptional restructuring costs
in the income statement as a consequence of the cost reduction plan
of GBP2.5m.
Due to the divestment programme, the Group is required to report
its current year, and also restate its prior year, results in line
with IFRS 5 (Non-current assets held for sale and discontinued
operations), so that only the results of the continuing business
are reported as part of revenue and adjusted operating profit. The
results of the disposed businesses up to the date of their
divestment are therefore shown in net income from discontinued
operations. However, as most of the GBP5m cost reduction took place
in the second half of the year, the lost contribution of the
disposed assets was not immediately offset by the cost savings.
This caused the Group to report an adjusted operating loss for the
year, albeit reduced compared to 2018 due to increases in business
unit EBITDA.
The Group received total cash consideration of GBP20.4m from the
divestment programme. After transaction costs of GBP2.3m and
working capital adjustments of GBP1.7m, net cash received from the
divestment programme was GBP16.4m.
The Group adopted IFRS 16 but took the exemption not to re-state
comparatives for the prior year. As a result, year-on-year business
unit profitability is not directly comparable except at a pre-IFRS
16 adjusted EBITDA level, reflected in the discussion below.
Performance
Group
The Group is reporting a statutory profit after taxation of
GBP1.9m (2018: a loss of GBP14.2m) primarily due to the profit on
disposal of GBP7.8m from the divestment programme. The Group's
adjusted operating loss of GBP1.1m is an improvement from the
restated adjusted operating loss of GBP2.2m for 2018. This was
driven by significant cost reductions within Xeim resulting in a
24% increase in Xeim's adjusted EBITDA, together with adjusted
EBITDA growth of 16% in The Lawyer. The adjusted EBITDA for the two
business units is therefore 21% higher than 2018 despite a revenue
decline of 3%.
Reported revenue of GBP48.9m represents a decline of 3% over
2018. On an underlying(1) basis, Group revenue fell 2% from
GBP48.5m in 2018 to GBP47.7m in 2019. Xeim underlying revenue fell
by 4% - increases in eLearning and Influencer Intelligence revenues
were more than offset by reductions due to the withdrawal from
public training within Econsultancy, and lower revenues at
Oystercatchers, Really and MarketMakers. The Lawyer showed strong
underlying revenue growth, up 9%, driven by growth in its
subscriptions and events business.
Xeim
Influencer Intelligence was merged with Year Ahead during the
year and saw strong revenue growth of 11%. Xeim substantially grew
its eLearning revenues in 2019 which saw 75% revenue growth year on
year, driven by the success of the Mini-MBA and the launch of the
new marketing brand course. The mini-MBA saw volume growth of 47%
with a pleasing corresponding increase in yield.
Econsultancy's training revenue fell in the year due to the
decision to restructure its global sales operation in the US and
withdraw from public training replacing this with a new set of
courses. As planned, the loss in revenue was more than offset by
cost savings and margin improvement. Econsultancy subscription
products had a difficult period with lower volumes in the year
partially offset by strong improvement in yields, especially on new
business. Renewal rates continue to improve, both in terms of
volume and yield, but the revenue benefits will not be felt until
2020, as the deferred income unwinds.
MarketMakers had a challenging year. Marketing services revenues
at Really remained flat from the half year and consequently ended
4% down year on year. However, our telemarketing operations
struggled in the second half of the year, with revenue declining 3%
in 2019 due to lower realised revenue on some key contracts and
lower than expected campaign renewals from its smaller clients.
We consider profitable revenue growth to be a key pillar to our
future success and accordingly we decided to close Marketing Week
Live and end public training in our Econsultancy business to focus
on more profitable revenue streams and remove duplicate brand and
management costs of GBP2.4m. The impact of this has been that
adjusted business unit EBITDA (before the impact of IFRS 16) in
Xeim has grown by 24% in the year despite a 4% reduction in
underlying revenue.
(1) Underlying is a non-GAAP measure - see Measurements and
non-statutory adjustments section of Financial Review for further
explanation
The Lawyer
The Lawyer showed strong underlying revenue growth, up 9%,
driven by:
-- growth of 17% in its premium content business due in part to
the launch of new products, such as Digital Litigation Tracker, and
increases in corporate subscriptions; and
-- excellent performance in its events business, up 17%,
resulting from development of the new Marketing Leadership Summit
and higher revenues across most of the other events.
Revenue from Marketing and Advertising Solutions fell by 4%,
although this is a lower decline than in 2018. Adjusted EBITDA has
increased by 16% from GBP2.5m to GBP2.9m with a healthy increase in
adjusted EBITDA margin from 32% to 35%.
New Accounting Standards
IFRS 16 has been adopted for the current reporting period and
the Group has elected to apply the modified retrospective
transition approach where comparative periods are not restated. The
reclassifications and the adjustments arising from the new leasing
rules are therefore recognised in the opening balance sheet on 1
January 2019.
As at 31 December 2019, the right of use assets have been
included in property, plant and equipment at a value of GBP3.7m and
lease liabilities of GBP4.3m have been presented on the
consolidated statement of financial position. This is after GBP1.6m
depreciation expense and GBP0.2m impairment charge in the year. The
overall impact of IFRS 16 on the income statement was an additional
expense of GBP0.1m, with expenses now classified as depreciation on
the right of use asset and interest expense on the finance
liability.
Adjusted EBITDA in 2019 after applying IFRS 16 (post-IFRS 16) of
GBP4.4m is GBP1.8m higher than if the new standard had not been
applied giving an adjusted EBITDA (pre-IFRS 16) of GBP2.6m. For the
purposes of comparison, the Adjusted EBITDA (pre-IFRS 16) and
related margin have been compared to 2018 in this commentary. For
further details of the transition to IFRS 16 please refer to note
20.
Measurement and non-statutory adjustments
The statutory results of the Group are presented in accordance
with International Financial Reporting Standards ("IFRS"). The
Group also uses alternative reporting and other non-GAAP measures
as explained below and as defined in the 'Alternative Performance
Measures' table below.
Adjusting items
Adjusted results are not intended to replace statutory results
but are prepared to provide a better comparison of the Group's core
business performance by removing the impact of certain items from
the statutory results. The Directors believe that adjusted results
and adjusted earnings per share are the most appropriate way to
measure the Group's operational performance because they are
comparable to the prior year and consequently review the results of
the Group on an adjusted basis internally.
Statutory operating loss from continuing operations reconciles
to adjusted operating loss and adjusted EBITDA as follows:
Note 2019 2018
GBPm GBPm
-------------------------------------- ---- --- ----- ---- ------
Statutory operating loss (8.4) (20.3)
Adjusting items:
Exceptional operating costs 4 4.7 2.0
Impairment of goodwill 10 - 12.8
Amortisation of intangible assets 11 2.4 2.5
Share based payments 25 0.1 0.8
Loss on disposal of subsidiary 14 0.1 -
--- ----
7.3 18.1
-------------------------------------- ---- --- ----- ---- ------
Adjusted operating loss (1.1) (2.2)
Depreciation, software amortisation
and impairment 3 5.5 3.6
Adjusted EBITDA (post-IFRS 16) 4.4 1.4
Adjusted EBITDA margin (post-IFRS
16) 9% 3%
-------------------------------------- ---- --- ----- ---- ------
Adjusted EBITDA (pre-IFRS 16) 2.6 1.4
Adjusted EBITDA margin (pre-IFRS
16) 5% 3%
-------------------------------------- ---- --- ----- ---- ------
Adjusting items from continuing operations generated a loss
before tax of GBP7.3m (2018: GBP18.1m) as follows:
Adjusting item Description
-------------------------- ------------------------------------------------------------
Exceptional operating Exceptional costs of GBP4.7m (2018: GBP2.0m) include
costs GBP2.5m (2018: GBP0.4m) of staff restructuring costs
related to the Group's cost reduction plan following
the completion of the divestment programme in 2019, GBP2.2m
(2018: GBP1.3m) of divestment programme related costs
and GBPnil (2018: GBP0.3m) of costs relating to strategic
corporate restructuring initiatives.
Impairment of goodwill In 2019, GBPnil (2018: GBP12.8m) relates to the impairment
of goodwill. The 2018 charge primarily related to the
Xeim portfolio.
Amortisation of intangible Amortisation of acquired intangible assets of GBP2.4m
assets (2018: GBP2.5m) has decreased in the year following the
full amortisation of certain intangible assets.
Share based payments Share based payments in 2019 of GBP0.1m (2018: GBP0.8m)
have decreased significantly due to the reduction in
the number of share options from 10.6m to 7.6m. Forfeitures
and lapses of 0.5m and 5.6m share options respectively
resulted in a reversal of charges previously recognised.
This was offset by an expense recognised for 3.6m new
share options granted during the year and an additional
charge recognised on 1.6m share options that vested during
the year.
Loss on disposal The loss on disposal of subsidiaries of GBP0.1m (2018:
of subsidiary GBPnil) relates to the sale of Venture Business Research
Limited ("VBR").
-------------------------- ------------------------------------------------------------
Underlying revenue and profit
The Group also measures and presents performance in relation to
various other non-GAAP measures, such as underlying revenue. These
have been presented to provide users with additional information
and analysis of the Group's performance, consistent with how the
Board monitors results. The Group's activities are predominantly
UK-based and therefore currency movements do not have a material
impact on results.
In the year, the Group disposed of VBR which was included in The
Lawyer business unit. Due to its size it has not been treated as
discontinued and its revenues are therefore reported as part of the
Group's continuing revenue. However, for underlying reporting
purposes, its revenue (2019: GBP0.1m 2018: GBP0.3m) has been
excluded. Marketing Week Live, which was included in Xeim, has been
closed and therefore its revenue has also been excluded for
underlying reporting purposes.
CAP and segment profit
At the half year we disclosed our internal profitability
performance measure by segment - contribution after portfolio costs
("CAP"). We reported CAP for three different segments - Xeim, The
Lawyer and Central. CAP was an interim measure so that we could
illustrate the contributions of the business units while the Group
was transitioning to the new simplified model.
In order to increase clarity over the underlying profitability
of our business units, Xeim and The Lawyer, we are now reporting
the "segment profit" of our business units, being the adjusted
operating profit of each segment. Segment profit builds upon and
replaces the concept of CAP by including specific allocations of
the central support teams and overheads that are directly related
to each business unit, in order to demonstrate the stand-alone
profitability. Any costs not specifically attributable to either
Xeim or The Lawyer, remain as part of central costs. This is
different from the concept of segmental reporting used in prior
years when central overheads were fully allocated on a revenue
basis to the operating segments.
The table below shows the statutory and underlying revenue for
each business unit:
Restated
------------------------
Xeim The Total Xeim The Total
Lawyer Lawyer
2019 2019 2019 2018 2018 2018
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------ -------- ------ ------ -------- ------
Underlying revenue
Premium Content 11.0 3.4 14.3 11.2 2.9 14.1
Marketing Services 4.3 - 4.3 4.5 - 4.5
Training and Advisory 7.6 - 7.6 8.0 - 8.0
Events 3.1 2.1 5.3 3.2 1.8 5.0
Marketing and Advertising
Solutions 4.3 2.6 6.9 4.6 2.7 7.3
Telemarketing Services 9.3 - 9.3 9.6 - 9.6
Total underlying revenue 39.6 8.1 47.7 41.1 7.4 48.5
Underlying revenue growth (4)% 9% (2)%
Revenue from closed or disposed
businesses 1.1 0.1 1.2 1.5 0.3 1.8
-------------------------------- ------ -------- ------ ------ -------- ------
Total statutory revenue 40.7 8.2 48.9 42.6 7.7 50.3
-------------------------------- ------ -------- ------ ------ -------- ------
The table below reconciles the adjusted operating profit/(loss)
for each segment to the adjusted EBITDA:
Xeim The Central Total Xeim The Central Total
Lawyer Lawyer
2019 2019 2019 2019 2018 2018 2018 2018
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ------- -------- -------- ------- ------- -------- -------- -------
Revenue 40.7 8.2 - 48.9 42.6 7.7 - 50.3
Other income - - 1.6 1.6 - - 0.8 0.8
Operating costs (36.6) (5.9) (9.1) (51.6) (39.3) (5.7) (8.3) (53.3)
---------------------------------- ------- -------- -------- ------- ------- -------- -------- -------
Adjusted operating profit/(loss) 4.1 2.3 (7.5) (1.1) 3.3 2.0 (7.5) (2.2)
Adjusted operating margin 10% 28% (2)% 8% 26% (4)%
Depreciation, amortisation
and impairment 3.5 0.9 1.1 5.5 1.8 0.5 1.3 3.6
---------------------------------- ------- -------- -------- ------- ------- -------- -------- -------
Adjusted EBITDA (post-IFRS16) 7.6 3.2 (6.4) 4.4
Adjusted EBITDA margin
(post-IFRS16) 19% 39% 9%
Adjusted EBITDA (pre-IFRS
16) 6.3 2.9 (6.6) 2.6 5.1 2.5 (6.2) 1.4
Adjusted EBITDA margin
(pre-IFRS16) 15% 35% 5% 12% 32% 3%
---------------------------------- ------- -------- -------- ------- ------- -------- -------- -------
As described above, the Group adopted IFRS 16 in 2019 but took
the exemption not to re-state the comparatives for the prior year.
As a result, year-on-year business unit profitability between 2019
and 2018 is not directly comparable except at a pre-IFRS 16
adjusted EBITDA level which for both years includes property rent
charges. Both pre-IFRS 16 and post-IFRS 16 adjusted EBITDA for each
business unit for 2019 are provided in the table above.
Depreciation, amortisation and impairment for 2019 includes the
higher depreciation charge arising from the application of IFRS
16.
Net finance costs
Net finance costs were GBP0.3m (2018: GBP0.2m). The Group
reported an opening cash position at 1 January 2019 of GBP0.1m and
has held more significant cash balances following the divestment
programme. Consequently, the vast majority of finance costs in 2019
are as a result of the commitment fee payable for the revolving
credit facility.
Taxation
A tax credit of GBP0.7m (2018: GBP1.1m) has been recognised on
continuing operations for the year. The adjusted tax charge was
GBP0.5m (2018: a credit of GBP0.4m) giving an adjusted effective
tax rate (compared to adjusted profit before tax) of nil% (2018:
17%). The Company's profits were taxed in the UK at a blended rate
of 19.0% (2018: 19.0%). On a reported basis, the effective tax rate
is 8% (2018: 5%). See note 7 for a reconciliation between the
statutory reported tax charge and the adjusted tax charge.
Discontinued operations
Discontinued operations relate to the four divestments made
during the first half of the year as described in the CEO's report.
The profit from discontinued operations in 2019 and a
reconciliation of the 2018 results compared to the results reported
last year is as follows:
Discontinued Discontinued Continuing As reported
2019 2018 2018 2018
GBPm GBPm GBPm GBPm
------------------------ ------------ ------------ ---------- -----------
Revenue 7.0 20.2 50.3 70.5
Other operating income - - 0.8 0.8
Net operating expenses (4.3) (13.9) (71.4) (85.3)
Profit on disposal 7.8 0.1 - 0.1
------------------------ ------------ ------------ ---------- -----------
Operating profit/(loss) 10.5 6.4 (20.3) (13.9)
Finance costs - - (0.2) (0.2)
------------------------ ------------ ------------ ---------- -----------
Profit/(loss) before
tax 10.5 6.4 (20.5) (14.1)
Taxation (0.6) (1.2) 1.1 (0.1)
Profit/(loss) after tax 9.9 5.2 (19.4) (14.2)
------------------------ ------------ ------------ ---------- -----------
Earnings/losses per share
The Group has delivered adjusted diluted earnings per share for
the year of 0.3 pence (2018: 2.6 pence). Diluted earnings per share
for the year were 1.3 pence (2018: a loss of 9.9 pence). Full
details of the earnings per share calculations can be found in note
9 of the financial information.
Dividends
In October 2019, an interim dividend of 1.5p per share was paid
relating to 2019 (2018: 1.5p). A return of cash of 2.0p per share,
in the form of a special dividend, was also announced as part of
the interim results and paid along with the interim dividend.
At the time of the interim results, the Group confirmed a new
dividend policy, applicable from 1 January 2020, such that Centaur
will target a pay-out ratio of 40% of adjusted earnings, subject to
a minimum dividend of 1.0p per share per annum.
In light of this new policy, a final ordinary dividend of 0.5p
per share is proposed by the Directors in respect of 2019 (2018:
1.5p), giving a total ordinary dividend for the year ended 31
December 2019 of 2.0p (2018: 3.0p). This brings the total of
ordinary and special dividends paid to shareholders relating to
2019 to GBP5.7m (4.0p per share), which is GBP4.3m (3.0p per share)
more than the dividends that would have been paid under the new
policy.
The final dividend in respect of the year is subject to
shareholder approval at the Annual General Meeting and, if
approved, will be paid on 29 May 2020 to all ordinary shareholders
on the register at the close of business on 11 May 2020.
After starting the year with only GBP0.1m of cash, the GBP16.4m
net proceeds from divestments have been spent on the excess
dividends of GBP4.3m and exceptional costs relating to the Group's
central cost reductions and divestment programme of GBP4.7m, while
retaining an acceptable minimum level of liquidity for the Group.
The Board was planning a further return of cash as a special
dividend alongside the ordinary dividend in May. However, the
uncertainty resulting from coronavirus pandemic has caused the
Board to take a prudent approach and there will be a delay in any
further special dividends until we have better clarity of the
potential impact on Centaur, if any. The Group closed 2019 with
cash of GBP9.3m (2018: GBP0.1m).
Cash flow
2019 2018
GBPm GBPm
------------------------------------------ ----- -----
Adjusted operating loss 1.8 5.2
Depreciation, amortisation and impairment 5.5 3.7
Movement in working capital (0.0) (1.3)
------------------------------------------ ----- -----
Adjusted operating cash flow 7.3 7.6
Capital expenditure (1.6) (2.8)
Cash impact of adjusting items (2.7) (0.8)
Taxation 0.1 (1.2)
Repayment of lease obligations (2.3) -
Interest and finance leases (0.2) (0.4)
Loan arrangement fees - (0.2)
Free cash flow 0.6 2.2
Acquisitions (0.1) (1.8)
Disposal of subsidiaries 16.4 0.3
Share repurchases (0.6) (0.4)
Dividends paid to Company's shareholders (7.1) (4.3)
------------------------------------------ ----- -----
Increase/(decrease) in net cash 9.2 (4.0)
Opening net cash 0.1 4.1
------------------------------------------ ----- -----
Closing net cash 9.3 0.1
------------------------------------------ ----- -----
Cash conversion 100% 85%
------------------------------------------ ----- -----
Adjusted operating cash flow is not a measure defined by IFRS.
Centaur defines adjusted operating cash flow as cash flow from
operations excluding the impact of adjusting items, which are
defined above. The Directors use this measure to assess the
performance of the Group as it excludes volatile items not related
to the core trading of the Group and includes the Group's
management of capital expenditure. A reconciliation between cash
flow from operations and adjusted operating cash flow is shown in
note 1(b) of the financial information. The cash impact of
adjusting items primarily relates to exceptional restructuring
costs in both years.
MAP22
As referred to in the CEO's report and our interim results
presentation, the Group introduced its Margin Acceleration
Programme (MAP22) in September 2019 which targets an adjusted
EBITDA margin of at least 20% by 2022 (excluding the impact of IFRS
16). This will be achieved by the targeted costs savings of GBP5m
per annum together with profitable revenue growth. Targeted cost
savings represent roughly half of the increase in EBITDA required
to meet the targeted 20% EBITDA margin. This cost saving target had
been achieved on an annualised basis by the end of December 2019
and the full benefit will be reflected in the 2020 financial
performance.
Financing and bank covenants
In November 2018, the Group agreed an amendment and extension of
the existing GBP25 million revolving credit facility which had been
signed in 2015. The facility's terms include quarterly testing of
leverage and interest cover ratios and security has been granted
over the Group's assets. The initial period of the extension was
three years until November 2021 with the option to extend by two
further single years subject to bank approval.
The principal financial covenants under the facility are: the
ratio of net debt to adjusted EBITDA shall not exceed 2.5:1, and
the ratio of EBITDA to net finance charges shall not be less than
4:1. The Group remained well within its banking covenants during
the year and had not drawn down any of its GBP25 million revolving
credit facility at the end of 2019.
Balance sheet
A summary of the Group's balance sheet as at 31 December 2019
and 2018 is set out below:
2019 Restated
GBPm 2018
GBPm
------------------------------------- ------ --------
Goodwill and other intangible assets 61.2 78.1
Property, plant and equipment 4.3 1.3
Deferred taxation 1.0 0.3
Deferred income (8.7) (15.0)
Other current assets and liabilities (3.7) 2.0
Non-current liabilities (2.3) (0.1)
------------------------------------- ------ --------
Net assets before cash 51.8 66.6
Net cash 9.3 0.1
------------------------------------- ------ --------
Net assets 61.1 66.7
------------------------------------- ------ --------
It should be noted that the prior year balance sheet, unlike the
income statement, is not adjusted to reflect the divestment
programme that occurred in 2019. However, trade receivables and
other payables in 2018 have been restated to gross up credits of
GBP0.8m which had been previously reported in trade receivables as
described in note 1 (a) (ii).
In 2019, goodwill and other intangibles have reduced by GBP16.9m
mainly due to the impact of the divestment programme (GBP12.8m).
Property, plant and equipment have increased mainly as a result of
the right-of-use property assets of GBP3.7m recognised under IFRS
16. Other current assets and liabilities have been significantly
reduced year-on-year by the divestment programme as shown in note
14 of the financial information.
Going concern
After due consideration, as required under IAS 1 Presentation of
Financial Statements, including consideration of the Group's net
current liability position, the Group's forecasts for at least
twelve months from the date of this report, and the effectiveness
of risk management processes, the Directors have concluded that it
is appropriate to continue to adopt the going concern basis in the
preparation of the consolidated financial statements for the year
ended 31 December 2019. As detailed under the Risk Management
section, the Directors have assessed the viability of the Group
over a three-year period to December 2022 and the Directors have a
reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period
to December 2022.
Conclusion
The Group has successfully completed its strategic divestment
programme and is now leaner and fitter for the future as its
focuses on Xeim and The Lawyer. Our balance sheet is stronger than
before with over GBP9m of cash in the bank at year end and a GBP25
banking facility that the Group is not intending to draw down in
the foreseeable future. Notwithstanding the impact of coronavirus,
we stand in a strong place to execute MAP22 having met our targeted
annualised cost reduction programme of GBP5m. I would like to thank
all the employees of Centaur for their commitment and patience as
the Group has completed its divestment and restructuring
programmes.
Alternative performance measures
Measure Definition
-------------------------- --------------------------------------------------------------
Adjusted EBITDA (pre-IFRS Adjusted operating profit before depreciation and impairment
16) of tangible assets and amortisation and impairment of
intangible assets other than those acquired through
a business combination, before the impact of IFRS 16
to remove property rent charges.
Adjusted EBITDA (post-IFRS Adjusted operating profit before depreciation and impairment
16) of tangible assets and amortisation and impairment of
intangible assets other than those acquired through
a business combination, after the impact of IFRS 16
to remove property rental charges. This measure is new,
reflecting the adoption of IFRS 16.
Adjusted EBITDA margin Adjusted EBITDA (pre-IFRS 16) as a percentage of revenue.
Adjusted effective Adjusted tax charge as a percentage of Adjusted profit
tax rate before tax.
Adjusted EPS EPS calculated using Adjusted profit for the period.
Adjusting items Items as set out in the statement of consolidated income
and notes 1(b) and 4 of the financial information including
exceptional items, and volatile items predominantly
relating to investment activities and other separately
reported items.
Adjusted operating Operating profit/(loss) excluding Adjusting items.
profit/(loss)
Adjusted profit before Profit before tax excluding Adjusting items.
tax
CAP Revenue generated by a segment less its costs of sales
and all costs attributable to marketing, selling, content
production and delivery of that revenue.
Cash conversion Adjusted operating cash flow / adjusted EBITDA (post-IFRS
16).
Exceptional items Items where the nature of the item, or its magnitude,
is material and likely to be non-recurring in nature
as shown in note 4.
Free cash flow Increase/decrease in cash for the year before the impact
of debt, acquisitions, disposals, dividends and share
repurchases.
Segment profit Adjusted operating profit of a segment after allocation
of central support teams and overheads that are directly
related to each segment or business unit. As explained
in the Financial Review, central costs were fully allocated
in prior years.
Underlying revenue Revenue adjusted to exclude the impact of revenue contribution
arising from acquired, disposed or closed businesses
("excluded revenue").
-------------------------- --------------------------------------------------------------
RISK MANAGEMENT
RISK MANAGEMENT APPROACH
The Board has overall responsibility for the effectiveness of
the Group's system of risk management and internal controls, and
these are regularly monitored by the Audit Committee.
The Executive Committee, Company Secretary and the Head of Legal
are responsible for identifying, managing and monitoring material
and emerging risks in each area of the business and for regularly
reviewing and updating the risk register, as well as reporting to
the Audit Committee in relation to risks, mitigations and controls.
As the Group operates principally from one office and with
relatively short management reporting lines, members of the
Executive Committee are closely involved in day-to-day matters and
are able to identify areas of increasing risk quickly and respond
accordingly. The responsibility for each risk identified is
assigned to a member of the Executive Committee. The Audit
Committee considers risk management and controls regularly and the
Board formally considers risks to the Group's strategy and plans as
well as the risk management process as part of its strategic
review.
The risk register is the core element of the Group's risk
management process. The register is maintained by the Company
Secretary with input from the Executive Committee and the Head of
Legal. The Executive Committee initially identifies the material
risks and emerging risks facing the Group and then collectively
assesses the severity of each risk (by ranking both the likelihood
of its occurrence and its potential impact on the business) and the
related mitigating controls.
As part of its risk management processes, the Board considers
both strategic and operational risks, as well as its risk appetite
in terms of the tolerance level it is willing to accept in relation
to each principal risk, which is recorded in the Company's risk
register. This approach recognises that risk cannot always be
eliminated at an acceptable cost and that there are some risks
which the Board will, after due and careful consideration, choose
to accept. The Group's risk register, its method of preparation and
the operation of the key controls in the Group's system of internal
control are regularly reviewed and overseen by the Audit Committee
with reference to the Group's strategic aims and its operating
environment. The register is also reviewed and considered by the
Board.
As part of the ongoing enhancement of the Group's risk
monitoring activities, we reviewed and updated the procedures by
which we evaluate principal risks and uncertainties during the
year.
Principal risks
The Group's risk register currently includes operational and
strategic risks. The principal risks faced by the Group in 2019,
taken from the register, together with the potential effects and
mitigating factors, are set out below. The Directors confirm that
they have undertaken a robust assessment of the principal and
emerging risks facing the Group. Financial risks are shown in note
28 of the financial information.
Risk number 1 has been updated from last year's Annual Report to
include the wider risk of failure to deliver a high growth
performance culture. Risk number 2 has been updated from last
year's Annual Report to include the wider risk of sensitivity to
the UK/sector economic conditions, instead of just the risk related
to print products.
Description of risk and Risk mitigation/control Movement
Rank Risk impact procedure in risk
---- ------------------------- ------------------------------- ------------------------------- -------------------
1 Failure to deliver Centaur's success depends We regularly review measures The Board
a high growth on growing the business aimed at improving our considers
performance and completing the MAP22 ability to recruit and this risk
culture. strategy. In order to retain employees and to be broadly
The risk that do this, it depends in to track employee engagement. the same
Centaur is unable large part on its ability The move to WeWork in as the
to attract, to recruit, motivate Waterloo, a bright, modern prior year,
develop and and retain highly experienced and flexible workspace, following
retain an appropriately and qualified employees and with good transport the simplification
skilled, diverse in the face of often connections should be programme.
and responsible intense competition from a compelling environment Risk unchanged
workforce and other companies; especially for staff and improve
leadership team, in London. our ability to recruit
and maintain In 2019 it was exacerbated and retain employees
a healthy culture by: and to track employee
which encourages a) the simplification engagement. Weekly "check-ins"
and supports programme; via ENGAGE ensure we
ethical high-performance b) the formation of the have a weekly "mood"
behaviours and Xeim group; and of the business and an
decision-making. c) the reduction of overheads. understanding of any
Difficulties Investment in training, key risks or challenges
in recruiting development and pay awards as they arise. An employee
and retaining needs to be compelling engagement team has been
staff could but will be challenging set up, known as DICE
lead to loss in the current economic to focus on Diversity,
of key senior climate. Inclusion, Culture and
staff. Implementing a working Engagement along with
Failure to implement environment that allows other key issues and
the simplification for agile and remote opportunities that can
programme. delivery is necessary challenge the business.
to keep the "millennial" This is sponsored by
workforce engaged. the CEO and a Non-Executive
High staff churn (a challenge Director. Key senior
for all media and events leaders have had their
companies) affects budget, reward packages reviewed
productivity and continuity and, where appropriate,
for customers. increased notice periods
Developing the 2022 business and restrictive covenants
strategy and changes have been introduced.
required in skill set A review takes place
and culture are challenging annually to ensure flight
and costly. risks and training needs
are identified which
become the focus for
pay, reward and development
areas. All London based
staff continue to be
paid at or above the
London Living Wage. Our
HR processes include
exit interviews for all
leavers to resolve areas
of concern.
---- ------------------------- ------------------------------- ------------------------------- -------------------
2 Sensitivity Centaur's UK focus makes Most of the risk impacts The Board
to UK/sector Centaur highly sensitive Centaur indirectly from considers
economic conditions. to UK/sector economic our customers. Part of this risk
conditions. This risk the strategic plan for to have
remained high during Centaur is to increase increased
2019 and continues while international organic since the
the terms of the UK growth in the mid to prior year.
leaving longer term, focusing Risk increased
the EU are uncertain. on the US and Asia in
The current uncertainties particular, in order
caused by coronavirus to mitigate this risk.
have also increased the Many of the Group's products
short-term risk to the are market-leading in
Group. their respective sectors
and are an integral part
of our customers' operational
processes, which mitigates
the risk of reduced demand
for our products. The
Group regularly reviews
the political and economic
conditions and forecasts
for the UK, including
specific risks such as
coronavirus, and the
main sectors in which
it operates to assess
whether changes to its
product offerings or
pricing structures are
necessary.
---- ------------------------- ------------------------------- ------------------------------- -------------------
3 Fraudulent or A serious occurrence Appropriate IT security The Board
accidental breach of a loss, theft or is undertaken for all considers
of our security, misuse key processes to keep this risk
or ineffective of personal data or the IT environment safe. to be broadly
operation of sensitive Websites are hosted by the same
IT and data or confidential specialist third-party as the
management systems information providers who provide prior year.
leads to loss, could result in warranties relating to Risk unchanged
theft or misuse reputational security standards. All
of personal damage, a breach of data of our websites have
data or confidential protection requirements been migrated onto a
information or direct financial new and more secure platform
or other breach impact. which is cloud hosted
of data protection See risk 4: GDPR, PECR and databases have been
requirements. below. Centaur collects cleansed and upgraded.
and processes personal External access to data
data and confidential is protected and staff
information from some are instructed to password
of its customers, users protect or encrypt where
and other third parties. appropriate. The Group
Centaur is at risk from Head of Data ensures
a serious occurrence that rigorous controls
of a loss, theft or are in place to ensure
misuse that warehouse data can
of personal data or only be downloaded by
confidential the data team. Integration
information on our of the warehouse with
software/hardware current databases and
due to the actions of data captured and stored
a Centaur employee, elsewhere is ongoing.
partner Centaur has a business
or third party. continuity plan which
includes its IT systems
and there is daily, overnight
back-up of data, stored
off-site. Please see
risk 4 below for specifics
relating to GDPR
compliance/data.
---- ------------------------- ------------------------------- ------------------------------- -------------------
4 Regulatory; The General Data Centaur has taken a wide The Board
GDPR, PECR and Protection range of measures aimed considers
other similar Regulation ('GDPR'), at complying with the this risk
legislation which is the data key aspects of GDPR. to be broadly
both involve protection The measures taken include: the same
strict requirements law that came into force -- updating the marketing as the
regarding how in May 2018, involves permissions on our websites prior year.
Centaur handles much stricter and event registration Risk unchanged
personal data, requirements pages to ensure language
including that for Centaur regarding is specific/unambiguous;
of customers its handling of personal -- updating the unsubscribe
and the risk data. process; -- improving
of a fine from This includes: our data complaints
the ICO, third -- customers and procedures;
party claims employees -- improving our procedures
(e.g. from customers) having greater rights for removing individuals
as well as reputational on how we use their data; from databases where
damage if we -- Centaur having to details are inaccurate/not
do not comply. provide specific needed; -- updating our
information standard terms and
to our customers on how conditions
we use their personal across all products;
data; -- strict rules -- updating our privacy
around how we conduct and cookies policy and
our direct marketing website terms and
activities; -- personal conditions;
data being kept more and -- amending our
securely (time and contracts
access); with suppliers who provide
-- contracts with us with personal data
suppliers (ie lists) or who handle
that handle our data data on our behalf. More
to include GDPR compliant recent measures taken
clauses; -- new rules to improve the Company's
about notifying the ICO compliance with the laws
in the event of a breach on electronic marketing
of GDPR; -- a short time include:ta deletion
period for responding exercise
to "subject access in order to ensure data
requests maintained is in line
"from customers and with our data retention
employees; policy. -- outsourcing
-- a requirement to CPTS screening to a
demonstrate third-party
how we comply with GDPR, supplier for specific
which means more onerous list screening; --
internal record-keeping quarterly
obligations; -- a training for sales and
requirement marketing staff; and
to carry out data impact -- a newly formed Data
assessments for new types Protection Compliance
of personal data Committee is responsible
processing for monitoring Centaur's
undertaken; and -- a ongoing compliance with
requirement to keep under data protection laws.
review the need for a Recent guidance published
Data Protection Officer. by the ICO relating to
The Privacy and the use of cookies, and
Electronic further changes to the
Communications laws relating to data
Regulations privacy, ad tech and
(PECR) implements the electronic marketing
EU "E-Privacy" Directive expected in late 2019/20.
and sits alongside the will further increase
GDPR. PECR includes the regulatory burden
specific for businesses like
obligations for Centaur,
businesses and the requirements
like Centaur regarding in this regard will need
how they conduct to be kept under review.
electronic The business has taken
marketing calls, emails, advice on what it needs
texts and on their use to mitigate its risk
of cookies and similar in respect of the CCPA
technologies, among other and has a plan in place
things. for actioning this. Staff
In the event of a serious training will be provided
breach of the GDPR and in-house on key
or PECR, Centaur could legislation,
be subject to a and any changes to it,
significant where appropriate including
fine from the regulator PECR. Centaur's in-house
(the ICO) and claims lawyer keeps abreast
from third parties of material developments
including in data protection law
customers as well as and regulation and advice
reputational damage. from external law firms
The maximum fine of 20 is sought where
million Euro for breach appropriate.
of GDPR is much higher Given the increasingly
than fines under the global nature of our
old UK data protection business and our customers
legislation. Centaur's approach to
The maximum fine for complying with data
breaches of PECR is protection
GBP500,000, laws in other jurisdictions
and directors' liability should be kept under
for serious breaches review.
of marketing rules has
recently been introduced.
The obligations for
Centaur
under the GDPR and PECR
ae complex and
continuing,
meaning this area
requires
continued focus.
Following the adoption
of the GDPR by EU member
states, certain other
countries and
jurisdictions
worldwide are also
reviewing
and updating their own
laws relating to data
and privacy. The extent
to which Centaur is
required
to comply with the laws
in each of these
jurisdictions
depends on the
circumstances,
and there is a risk that
Centaur may not be
compliant
with all such laws and
could therefore be
subject
to regulatory action
and fines from the
relevant
regulators and data
subjects.
---- ------------------------- ------------------------------- ------------------------------- -------------------
5 Serious systems Centaur relies on its Centaur has invested The Board
failure (affecting IT network to conduct significantly in its considers
core systems its operations. The IT IT systems and where this risk
and multiple network is at risk of services are outsourced to be broadly
products or a serious systems failure to suppliers, contingency the same
functions) or or breach of its security planning is carried out as the
breach of IT controls. This could to mitigate risk of supplier prior year.
network security result from deliberate failure. The ongoing Risk unchanged
(as a result cyber-attacks or development of CRM (PCI
of a deliberate unintentional compliance) and finance
cyber-attack events and may include systems. Lockton's, our
or unintentional third parties gaining insurance advisor, has
event). unauthorised access to advised us in relation
Centaur's IT network to additional cover that
and systems resulting is appropriate to insure
in misappropriation of against a serious failure
its financial assets, of IT network security
proprietary or sensitive controls. Our policies
information, corruption were upgraded in 2018
of data, or operational to further ensure our
disruption, such as staff are clear and accountable
unavailability for their IT compliance.
of our websites and our This is checked on an
digital products to users ongoing basis. In 2019
or unavailability of Centaur also implemented
support platforms. If a number of security
Centaur suffers serious improvements to better
cyber-attacks, whether protect and monitor our
by a third party or network, systems and
insider, data eg CloudStrike.
any operational New starters receive
disruption both Terms and Conditions
may directly affect our plus the staff IT policy.
revenues or collection
activities. Centaur may
incur significant costs
and suffer other negative
consequences, such as
remediation costs
(including
liability for stolen
assets or information,
and repair of any damage
caused to Centaur's IT
network infrastructure
and systems). Centaur
may also suffer
reputational
damage and loss of
investor
confidence resulting
from any operational
disruption.
---- ------------------------- ------------------------------- ------------------------------- -------------------
Viability statement
In accordance with provision 31 of the UK Corporate Governance
Code 2018, the Directors have assessed the viability of the Group
over a three-year period to December 2022, taking account of the
Group's current position, the Group's strategy, the Board's risk
appetite and, as documented above, the principal risks facing the
Group and how these are managed. Based on the results of this
analysis, the Directors have a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due over the period to December 2022.
The Board has determined that the three-year period to December
2022 is an appropriate period over which to provide its viability
statement because the Board's financial planning horizon covers a
three-year period. In making their assessment, the Directors have
taken account of the Group's existing financing arrangements to
2022 (which allows extensions to 2023 on similar terms), cash
flows, dividend cover and other key financial ratios over the
period.
These metrics are subject to stress testing which involves
sensitising a number of the main assumptions underlying the
forecasts both individually and in unison. The main assumption
sensitised included a scenario where the Group's forecast EBITDA
dropped by 50%, as well as short term cash conversion issues.
Scenarios relating to the current immediate risk relating to
coronavirus were also considered. In a scenario where the Group's
EBITDA fell by 86% over the three-year financial planning horizon,
and without management taking mitigating actions, the Group would
breach its banking covenants in the fourth quarter of 2022. Where
appropriate, this analysis is carried out to evaluate the potential
impact of the Group's principal risks actually occurring, such as
failure to deliver a high growth performance culture, UK economic
conditions, breach of security, data compliance and systems
failure. Sensitising the model for changes in the assumptions and
risks affirmed that the Group would remain viable over the
three-year period to December 2022.
Going concern basis of accounting
In accordance with provision 30 of the UK Corporate Governance
Code 2018, the Directors' consider it appropriate to adopt the
going concern basis of accounting in preparing the financial
statements and their identification of any material uncertainties,
including the principal risks outlined above, to the Group's
ability to continue to do so over a period of at least twelve
months from the date of approval of the financial information and
for the foreseeable future.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE
FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and Company financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted
by the European Union. Under company law the Directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group
and Company and of the profit or loss of the Group and company for
that period. In preparing the financial statements, the Directors
are required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRSs as adopted by the European
Union have been followed for the Group financial statements and
IFRSs as adopted by the European Union have been followed for the
company financial statements, subject to any material departures
disclosed and explained in the financial statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and company
will continue in business.
The Directors are also responsible for safeguarding the assets
of the Group and company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and company and enable
them to ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regards the Group financial statements, Article 4 of the IAS
Regulation.
The Directors are responsible for the maintenance and integrity
of the company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Directors' confirmations
The Directors consider that the annual report and accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group and
company's position and performance, business model and
strategy.
Each of the Directors, whose names and functions are listed in
Governance Report confirm that, to the best of their knowledge:
-- the company financial statements, which have been prepared in
accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
result of the company;
-- the Group financial statements, which have been prepared in
accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group; and
-- the Directors' Report includes a fair review of the
development and performance of the business and the position of the
Group and company, together with a description of the principal
risks and uncertainties that it faces.
In the case of each director in office at the date the
Directors' Report is approved:
-- so far as the director is aware, there is no relevant audit
information of which the Group and company's auditors are unaware;
and
-- they have taken all the steps that they ought to have taken
as a director in order to make themselves aware of any relevant
audit information and to establish that the Group and the Company's
auditors are aware of that information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2019
Restated(2) Restated(2) Restated(2)
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
Results(1) Items(1) Results Results(1) Items(1) Results
2019 2019 2019 2018 2018 2018
Note GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Continuing operations
Revenue 2 48.9 - 48.9 50.3 - 50.3
Other operating income 2 1.6 - 1.6 0.8 - 0.8
Net operating expenses 3 (51.6) (7.3) (58.9) (53.3) (18.1) (71.4)
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Operating loss (1.1) (7.3) (8.4) (2.2) (18.1) (20.3)
Finance costs 6 (0.3) - (0.3) (0.2) - (0.2)
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Loss before tax (1.4) (7.3) (8.7) (2.4) (18.1) (20.5)
Taxation 7 (0.5) 1.2 0.7 0.4 0.7 1.1
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Loss for the period from continuing
operations 9 (1.9) (6.1) (8.0) (2.0) (17.4) (19.4)
Discontinued operations
Profit / (loss) for the year from
discontinued operations after tax 8,14 2.3 7.6 9.9 6.0 (0.8) 5.2
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Profit / (loss) for the year
attributable
to owners of the parent after tax 0.4 1.5 1.9 4.0 (18.2) (14.2)
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Total comprehensive income / (loss)
attributable to owners of the parent 0.4 1.5 1.9 4.0 (18.2) (14.2)
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Earnings / (loss) per share
attributable
to owners of the parent 9
Basic from continuing operations (1.3p) (4.3p) (5.6p) (1.4p) (12.1p) (13.5p)
Basic from discontinued operations 1.6p 5.3p 6.9p 4.2p (0.6p) 3.6p
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Basic from profit / (loss) for the
year 0.3p 1.0p 1.3p 2.8p (12.7p) (9.9p)
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Fully diluted from continuing
operations (1.3p) (4.3p) (5.6p) (1.4p) (12.1p) (13.5p)
Fully diluted from discontinued
operations 1.6p 5.3p 6.9p 4.0p (0.4p) 3.6p
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Fully diluted from profit / (loss)
for the year 0.3p 1.0p 1.3p 2.6p (12.5p) (9.9p)
-------------------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
(2) See note 1 (a) for description of prior year restatement
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2019
Attributable to owners of the Company
Reserve
for shares
Share Own Share to be Deferred Foreign currency Retained Total
capital shares premium issued shares reserve earnings Equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------- ---- -------- ------- -------- ----------- -------- ------------------- --------- -------
At 1 January 2018 15.1 (6.5) 1.1 1.1 0.1 - 74.0 84.9
Loss for the year
and total
comprehensive loss - - - - - - (14.2) (14.2)
Transactions with
owners in their
capacity as owners:
Dividends 26 - - - - - - (4.3) (4.3)
Acquisition of
treasury shares 24 - (0.4) - - - - - (0.4)
Fair value of
employee services 25 - - - 0.7 - - - 0.7
------------------- ---- -------- ------- -------- ----------- -------- ------------------- --------- -------
As at 31 December
2018 15.1 (6.9) 1.1 1.8 0.1 - 55.5 66.7
------------------- ---- -------- ------- -------- ----------- -------- ------------------- --------- -------
Profit for the year
and total
comprehensive
income - - - - - - 1.9 1.9
Transactions with
owners in their
capacity as owners:
Dividends 26 - - - - - - (7.1) (7.1)
Acquisition of
treasury shares 24 - (0.6) - - - - - (0.6)
Exercise of share
awards 25 - 0.3 - (0.1) - - (0.2) -
Fair value of
employee services 25 - - - 0.1 - - - 0.1
Foreign currency on
translation - - - - - 0.1 - 0.1
------------------- ---- -------- ------- -------- ----------- -------- ------------------- --------- -------
As at 31 December
2019 15.1 (7.2) 1.1 1.8 0.1 0.1 50.1 61.1
------------------- ---- -------- ------- -------- ----------- -------- ------------------- --------- -------
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2019
Attributable to owners of the Company
Reserve
for shares
Share Own Share to be Deferred Retained Total
capital shares premium issued shares earnings equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
At 1 January 2018 15.1 (6.3) 1.1 1.1 0.1 81.4 92.5
Loss for the year and total
comprehensive loss - - - - - (13.7) (13.7)
Transactions with owners in their
capacity
as owners:
Dividends 26 - - - - - (4.3) (4.3)
Fair value of employee services 25 - - - 0.7 - - 0.7
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
As at 31 December 2018 15.1 (6.3) 1.1 1.8 0.1 63.4 75.2
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
Loss for the year and total
comprehensive loss - - - - - (40.2) (40.2)
Transactions with owners in their
capacity as owners:
Dividends 26 - - - - - (7.1) (7.1)
Exercise of share awards 25 - - - (0.1) - (0.1) (0.2)
Fair value of employee services 25 - - - 0.1 - - 0.1
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
As at 31 December 2019 15.1 (6.3) 1.1 1.8 0.1 16.0 27.8
---------------------------------------- ---- -------- ------- -------- ----------- -------- --------- -------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2019
Registered number 04948078
Restated(2)
31 December 31 December
2019 2018
Note GBPm GBPm
--------------------------------------------------- ---- ----------- ------------
Non-current assets
Goodwill 10 52.2 62.6
Other intangible assets 11 9.0 15.5
Property, plant and equipment 12 4.3 1.3
Deferred tax assets 15 1.4 0.8
--------------------------------------------------- ---- ----------- ------------
66.9 80.2
--------------------------------------------------- ---- ----------- ------------
Current assets
Inventories 16 - 1.4
Trade and other receivables 17 10.8 13.7
Cash and cash equivalents 18 9.3 0.1
Current tax assets 22 0.1 0.2
--------------------------------------------------- ---- ----------- ------------
20.2 15.4
--------------------------------------------------- ---- ----------- ------------
Total assets 87.1 95.6
--------------------------------------------------- ---- ----------- ------------
Current liabilities
Trade and other payables 19 (12.5) (13.2)
Lease liabilities 20 (2.1) -
Deferred income 21 (8.7) (15.0)
Provisions 23 - (0.1)
--------------------------------------------------- ---- ----------- ------------
(23.3) (28.3)
--------------------------------------------------- ---- ----------- ------------
Net current liabilities (3.1) (12.9)
--------------------------------------------------- ---- ----------- ------------
Non-current liabilities
Lease liabilities 20 (2.2) -
Provisions 23 (0.1) (0.1)
Deferred tax liabilities 15 (0.4) (0.5)
--------------------------------------------------- ---- ----------- ------------
(2.7) (0.6)
--------------------------------------------------- ---- ----------- ------------
Net assets 61.1 66.7
--------------------------------------------------- ---- ----------- ------------
Capital and reserves attributable to owners of the
parent
Share capital 24 15.1 15.1
Own shares (7.2) (6.9)
Share premium 1.1 1.1
Other reserves 1.9 1.9
Foreign currency reserve 0.1 -
Retained earnings 50.1 55.5
--------------------------------------------------- ---- ----------- ------------
Total equity 61.1 66.7
--------------------------------------------------- ---- ----------- ------------
(2) See note 1 (a) for description of prior year restatement
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 December 2019
Registered number 04948078
31 December 31 December
2019 2018
Note GBPm GBPm
--------------------------------------------------- ---- ----------- -----------
Non-current assets
Investments 13 90.1 125.8
Deferred tax assets 0.1 0.1
--------------------------------------------------- ---- ----------- -----------
90.2 125.9
--------------------------------------------------- ---- ----------- -----------
Current assets
Trade and other receivables 17 1.0 3.1
Cash and cash equivalents 18 - -
--------------------------------------------------- ---- ----------- -----------
1.0 3.1
--------------------------------------------------- ---- ----------- -----------
Total assets 91.2 129.0
--------------------------------------------------- ---- ----------- -----------
Current liabilities
Trade and other payables 19 (63.4) (53.8)
--------------------------------------------------- ---- ----------- -----------
Net current liabilities (62.4) (50.7)
--------------------------------------------------- ---- ----------- -----------
Net assets 27.8 75.2
--------------------------------------------------- ---- ----------- -----------
Capital and reserves attributable to owners of the
parent
Share capital 24 15.1 15.1
Own shares (6.3) (6.3)
Share premium 1.1 1.1
Other reserves 1.9 1.9
Retained earnings 16.0 63.4
--------------------------------------------------- ---- ----------- -----------
Total equity 27.8 75.2
--------------------------------------------------- ---- ----------- -----------
The Company has taken advantage of the exemption available under
section 408 of the Companies Act 2006 and has not presented its own
statement of comprehensive income in this financial information.
The movement in retained earnings is the Company's loss for the
year of GBP40.2m (2018: GBP13.7m) and dividends of GBP7.1m (2018:
GBP4.3m).
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2019
Year ended Year ended
31 December 31 December
2019 2018
Note GBPm GBPm
-------------------------------------------------------- --------------------- ------------ ------------
Cash flows from operating activities
Cash generated from operations 27 4.6 6.8
Tax refund / (paid) 0.1 (1.2)
-------------------------------------------------------- --------------------- ------------ ------------
Net cash generated from operating activities 4.7 5.6
-------------------------------------------------------- --------------------- ------------ ------------
Cash flows from investing activities
Cash consideration received on disposal of subsidiaries
less cash and cash equivalents disposed of 14 18.7 0.3
Directly attributable costs of disposal of subsidiaries 14 (2.3) -
Purchase of property, plant and equipment 12 (0.2) (0.5)
Purchase of intangible assets 11 (1.4) (2.3)
Acquisition of subsidiary 23 (0.1) (1.8)
-------------------------------------------------------- --------------------- ------------ ------------
Net cash flows generated from / (used in) investing
activities 14.7 (4.3)
-------------------------------------------------------- --------------------- ------------ ------------
Cash flows from financing activities
Payment for shares bought back 24 (0.6) (0.4)
Loan arrangement fees 6 - (0.2)
Interest paid 6 (0.2) (0.4)
Repayment of obligations under lease arrangements 20 (2.3) -
Dividends paid to Company's shareholders 26 (7.1) (4.3)
Proceeds from borrowings 28 2.8 4.5
Repayment of borrowings 28 (2.8) (4.5)
-------------------------------------------------------- --------------------- ------------ ------------
Net cash flows used in financing activities (10.2) (5.3)
-------------------------------------------------------- --------------------- ------------ ------------
Net increase / (decrease) in cash and cash equivalents 9.2 (4.0)
-------------------------------------------------------- --------------------- ------------ ------------
Cash and cash equivalents at beginning of the year 0.1 4.1
-------------------------------------------------------- --------------------- ------------ ------------
Cash and cash equivalents at end of year 18 9.3 0.1
-------------------------------------------------------- --------------------- ------------ ------------
COMPANY CASH FLOW STATEMENT
for the year ended 31 December 2019
Year ended Year ended
31 December 31 December
2019 2018
Note GBPm GBPm
--------------------------------------------------- ---- ------------ ------------
Cash flows from operating activities
Cash generated from operating activities 27 7.3 4.7
--------------------------------------------------- ---- ------------ ------------
Cash flows from investing activities
Net cash flows used in investing activities - -
--------------------------------------------------- ---- ------------ ------------
Cash flows from financing activities
Interest paid 6 (0.2) (0.4)
Dividends paid to Company's shareholders 26 (7.1) (4.3)
Proceeds from borrowings 28 2.8 4.5
Repayment of borrowings 28 (2.8) (4.5)
--------------------------------------------------- ---- ------------ ------------
Net cash flows used in financing activities (7.3) (4.7)
--------------------------------------------------- ---- ------------ ------------
Net increase in cash and cash equivalents - -
--------------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at beginning of the year - -
--------------------------------------------------- ---- ------------ ------------
Cash and cash equivalents at end of year 18 - -
--------------------------------------------------- ---- ------------ ------------
1 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of
these consolidated and Company financial information are set out
below. These policies have been consistently applied to all the
periods presented, unless otherwise stated. The financial
information is for the Group consisting of Centaur Media Plc and
its subsidiaries, and the Company, Centaur Media Plc. Centaur Media
Plc is a public company limited by shares and incorporated in
England and Wales.
(a) Basis of preparation
The financial information in this preliminary announcement has
been extracted from the audited Group Financial Statements for the
year ended 31 December 2019 and does not constitute statutory
accounts within the meaning of section 434 of the Companies Act
2006. The Group Financial Statements and this preliminary
announcement were approved by the Board of Directors on 17 March
2020.
The consolidated and Company financial information has been
prepared in accordance with International Financial Reporting
Standards ('IFRS') as adopted by the European Union and IFRS
Interpretations Committee ('IFRS IC') and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS.
The financial information has been prepared on the historical cost
basis.
Going concern
The financial information has been prepared on a going concern
basis. The Directors have carefully assessed the Group's ability to
continue trading and have a reasonable expectation that the Group
and Company have adequate resources to continue in operational
existence for at least twelve months from the date of approval of
this financial information and for the foreseeable future.
Net cash (see reconciliation in note 27) at 31 December 2019
amounted to GBP9.3m (2018: GBP0.1m). In November 2018, the Group
renewed its GBP25m multi-currency revolving credit facility with
the Royal Bank of Scotland and Lloyds, which runs to November 2021
with the option to extend for 2 periods of 1 year each. None of
this was drawn-down at 31 December 2019. Our reported cash
conversion rate for the year was 100% (2018: 85%).
The Group has net current liabilities at 31 December 2019
amounting to GBP3.1m (2018: GBP12.9m). In the prior year these
primarily arose from its normal high levels of deferred income
relating to events in the future rather than an inability to
service its liabilities, as deferred income will not result in a
cash outflow. In the current year net liabilities is at a lower
level due to the disposal of businesses with high levels of
deferred income during the year. An assessment of cash flows for
the next three financial years, which has taken into account the
factors described above, has indicated an expected level of cash
generation which would be sufficient to allow the Group to fully
satisfy its working capital requirements and the guarantee given in
respect of its UK subsidiaries, to cover all principal areas of
expenditure, including maintenance, capital expenditure and
taxation during this year, and to meet the financial covenants
under the revolving credit facility. The Company has net current
liabilities at 31 December 2019 amounting to GBP62.4m (2018:
GBP50.7m). These almost entirely arise from unsecured payables to
subsidiaries which have no fixed date of repayment.
The preparation of financial information in accordance with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial information and the reported amounts of revenues and
expenses during the year. Although these estimates are based on
management's best knowledge of the amount, events or actions, the
actual results may ultimately differ from those estimates.
Having assessed the principal risks and the other matters
discussed in connection with the viability statement above, the
Directors consider it appropriate to adopt the going concern basis
of accounting in preparing its consolidated financial
information.
New and amended standards adopted by the Group
The following new standards that are mandatory for the first
time for the financial year commencing 1 January 2019 have been
adopted by the Group:
IFRS 16 'Leases'
IFRS 16 sets out the requirements for lessee and lessor lease
accounting. The new standard replaces IAS 17, and eliminates the
classification of leases as either operating leases or finance
leases as required by IAS 17 and instead introduces a single
accounting model for leases which requires lessees to recognise
assets and liabilities for most leases.
Impact
The Group has performed an impact assessment on its existing and
any expected upcoming lease arrangements. On adoption the Group has
taken advantage of the 'short term lease' (lease term 12 months or
under) and 'low value items' (those deemed to be immaterial)
exemptions. The Group has also applied the practical expedient on
transition where only contracts that were previously identified as
leases applying IAS 17 are assessed for the purposes of IFRS 16,
however the Group does not believe that any contracts other than
those falling in scope after the practical expedient is applied
would be deemed to contain a lease arrangement under IFRS 16.
The Group has elected to apply the modified retrospective
transition approach where comparative periods are not restated, but
the cumulative impact of applying IFRS 16 is reflected as an
adjustment to the opening balance sheet at 31 December 2019.
Arrangements already constituting finance leases under IAS 17are
not impacted by the transition to IFRS 16. At adoption on 1 January
2019 there were three existing lease arrangements captured by IFRS
16 that were previously accounted for as operating leases under IAS
17. During the year, one contract commenced that constitutes a
lease arrangement under IFRS 16.
Each lease arrangement has been accounted for over its lease
term as outlined in the contract. Where options to extend or
terminate exist in these contracts, the recognition of the lease
liabilities and ROU assets represent the Directors understanding of
likely future cash flows under these contracts. The assets and
liabilities will continue to be reviewed and will be revalued where
a change in the future cash flows is indicated.
Right-of-use assets with a value of GBP5.5m were recognised
(GBP2.3m for existing leases transitioning on adoption of IFRS 16
and GBP3.2m for a new lease commencing on 1 October 2019). Lease
liabilities with a value of GBP6.5m were recognised (GBP3.3m for
existing leases transitioning on adoption of IFRS 16 and GBP3.2m
for a new lease commencing on 1 October 2019). The value of the
IFRS 16 impact to the P&L is immaterial, however the expenses
are now classified as depreciation expense on the right-of-use
asset and interest expense on the lease liability. Please see note
20 for details of these assets, liabilities and expenses. There is
no impact to cash flow. All leases discussed here are property
leases.
Disclosures
Disclosures have been made in line with IFRS 16 requirements.
The accounting policy for leases is set out in note 1(i) and the
use of the incremental borrowing rate as an accounting estimate in
calculating the present value of leases is set out in note
1(t)(vii). Further disclosures on right-of-use assets and lease
liabilities can be found in notes 12 and 20.
Other
No other new standards or amendments to standards (including the
Annual Improvements (2015) to existing standards) that are
mandatory for the first time for the financial year commencing 1
January 2019 affected any of the amounts recognised in the current
year or any prior year and is not likely to affect future
periods.
New standards and interpretations not yet adopted
There are no standards that are not yet effective and that would
be expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future
transactions.
Prior year restatements
i) Discontinued operations
Where the requirements of IFRS 5 have been met, the operational
results of subsidiaries disposed of have been presented in
discontinued operations in the current period and restated to
discontinued in the comparative period. See notes 8 and 14 for more
details.
ii) Correction of prior period accounting errors
Where indicated, restatements have been made to prior year
comparatives for trade receivables and other payables (presented in
trade and other receivables and trade and other payables on the
face of the consolidated statement of financial position). The
restatement is in respect of credit balances which were reported in
trade receivables in 2018, with the result of lowering the balances
of both trade receivables and other payables by GBP0.8m. This was
identified after the authorisation of the 2018 Annual Report, and
therefore the balances are being retrospectively reclassified. This
restatement has impacted the balances on the consolidated statement
of financial position and notes 18, 20 and 28. This restatement has
no impact to periods prior to 2018.
Comparative numbers
Certain prior year comparatives have been updated to reflect
current year disclosures.
(b) Presentation of non-statutory measures
In addition to statutory measures, the Directors use various
non-GAAP key financial measures to evaluate the Group's performance
and consider that presentation of these measures provides
shareholders with an additional understanding of the core trading
performance of the Group. The measures used are explained and
reconciled to their equivalent statutory headings below.
Adjusted operating profit and adjusted earnings per share
The Directors believe that adjusted results and adjusted
earnings per share, split between continuing and discontinued
operations, provide additional useful information on the core
operational performance of the Group to shareholders, and review
the results of the Group on an adjusted basis internally. The term
'adjusted' is not a defined term under IFRS and may not therefore
be comparable with similarly titled profit measurements reported by
other companies. It is not intended to be a substitute for, or
superior to, IFRS measurements of profit.
Adjustments are made in respect of:
-- Exceptional items - the Group considers items of income and
expense as exceptional and excludes them from the adjusted results
where the nature of the item, or its magnitude, is material and
likely to be non-recurring in nature so as to assist the user of
the financial information to better understand the results of the
core operations of the Group. Details of exceptional items are
shown in note 4.
-- Amortisation of acquired intangible assets - the amortisation
charge for those intangible assets recognised on business
combinations is excluded from the adjusted results of the Group
since they are non-cash charges arising from investment activities.
As such, they are not considered reflective of the core trading
performance of the Group. Details of amortisation of intangible
assets are shown in note 11.
-- Share-based payments - share-based payment expenses or
credits are excluded from the adjusted results of the Group as the
Directors believe that the volatility of these charges can distort
the user's view of the core trading performance of the Group.
Details of share-based payments are shown in note 25.
-- Impairment of goodwill - the Directors believe that non-cash
impairment charges in relation to goodwill are generally volatile
and material, and therefore exclude any such charges from the
adjusted results of the Group. Previous impairment charges were
presented as exceptional items. Details of the goodwill impairment
analysis are shown in note 10.
-- Profit or loss on disposal of assets or subsidiaries - profit
or loss on disposals of businesses are excluded from adjusted
results of the Group as they are unrelated to core trading and can
distort a user's understanding of the performance of the Group due
to their infrequent and volatile nature. See note 4.
-- Other separately reported items - certain other items are
excluded from adjusted results where they are considered large or
unusual enough to distort the comparability of core trading results
year on year. Details of these separately disclosed items are shown
in note 4.
The tax related to adjusting items is the tax effect of the
items above that are allowable deductions for tax purposes
(primarily exceptional items), calculated using the standard rate
of corporation tax. See note 7 for a reconciliation between
reported and adjusted tax charges.
Further details of adjusting items are included in note 4. A
reconciliation between adjusted and statutory earnings per share
measures is shown in note 9.
Loss before tax reconciles to adjusted operating loss as
follows:
Restated(2)
2019 2018
Note GBPm GBPm
-------------------------------------------------- --- ---- ----- -----------
Loss before tax (8.7) (20.5)
Adjusting items
Exceptional operating costs 4 4.7 2.0
Impairment of goodwill 10 - 12.8
Amortisation of acquired intangible assets 11 2.4 2.5
Share-based payment expense 25 0.1 0.8
Loss on disposal of subsidiary (Venture Business
Research Limited) 14 0.1 -
------------------------------------------------------- ---- ----- -----------
Adjusted loss before tax (1.4) (2.4)
Finance costs 6 0.3 0.2
------------------------------------------------------- ---- ----- -----------
Adjusted operating loss (1.1) (2.2)
------------------------------------------------------- ---- ----- -----------
Cash impact of adjusting items (2.7) (0.8)
------------------------------------------------------- ---- ----- -----------
Tax impact of adjusting items 7 (1.2) (0.7)
------------------------------------------------------- ---- ----- -----------
(2) See note 1 (a) for description of prior year restatement
Adjusted operating cash flow
Adjusted operating cash flow is not a measure defined by IFRS.
It is defined as cash flow from operations excluding the impact of
adjusting items, which are defined above, and including capital
expenditure. The Directors use this measure to assess the
performance of the Group as it excludes volatile items not related
to the core trading of the Group and includes the Group's
management of capital expenditure. Statutory cash flow from
operations reconciles to adjusted operating cash as below:
2019 2018
Note GBPm GBPm
--------------------------------------------- ---- ----- -----
Reported cash flow from operating activities 27 4.6 6.8
Adjusting items from operations 4.8 2.5
Working capital impact of adjusting items
from operations (2.1) (1.7)
---------------------------------------------- ---- ----- -----
Adjusted operating cash flow 7.3 7.6
Capital expenditure (1.6) (2.8)
---------------------------------------------- ---- ----- -----
Post capital expenditure cash flow 5.7 4.8
---------------------------------------------- ---- ----- -----
Underlying revenue growth
The Directors review underlying revenue growth in order to allow
a like for like comparison of revenues between years. Underlying
revenues therefore exclude the impact of event timing differences,
revenue contribution arising from acquired or disposed businesses
and other revenue streams that are not expected to be ongoing in
future years.
Statutory revenue growth reconciles to underlying revenue growth
as follows:
Xeim The Lawyer Total
GBPm GBPm GBPm
------------------------------------------------------ ----- ---------- -----
Reported revenue 2018 42.6 7.7 50.3
Disposed business - Venture Business Research ('VBR') - (0.3) (0.3)
Closed event - Marketing Week Live (1.5) - (1.5)
Underlying revenue 2018 41.1 7.4 48.5
------------------------------------------------------ ----- ---------- -----
Reported revenue 2019 40.7 8.2 48.9
Disposed business - Venture Business Research ('VBR') - (0.1) (0.1)
Closed event - Marketing Week Live (1.1) - (1.1)
------------------------------------------------------ ----- ---------- -----
Underlying revenue 2019 39.6 8.1 47.7
------------------------------------------------------ ----- ---------- -----
Reported revenue growth (4%) 6% (3%)
Underlying revenue growth (4%) 9% (2%)
------------------------------------------------------ ----- ---------- -----
Adjusted EBITDA
Adjusted EBITDA is not a measure defined by IFRS. It is defined
as adjusted operating profit before depreciation and impairment of
tangible assets and amortisation and impairment of intangible
assets other than those acquired through a business combination. It
is used by the Directors as a measure to review performance of the
Group and forms the basis of some of the Group's financial
covenants under its revolving credit facility. Adjusted EBITDA is
calculated as follows:
Restated(2)
2019 2018
Note GBPm GBPm
---------------------------------------------- --- ---- ----- -----------
Adjusted operating loss (as above) (1.1) (2.2)
Depreciation of property, plant and equipment 12 2.3 0.9
Impairment of property, plant and equipment 12 0.4 -
Amortisation of computer software 11 2.5 2.7
Impairment of computer software 11 0.3 -
--------------------------------------------------- ---- ----- -----------
Adjusted EBITDA 4.4 1.4
--------------------------------------------------- ---- ----- -----------
(2) See note 1 (a) for description of prior year restatement
Net cash/(debt)
Net cash/(debt) is not a measure defined by IFRS. Net
cash/(debt) is calculated as cash less overdrafts and bank
borrowings under the Group's financing arrangements. The Directors
consider the measure useful as it gives greater clarity over the
Group's liquidity as a whole. A reconciliation between net debt and
statutory measures is shown in note 27.
(c) Principles of consolidation
The consolidated financial information incorporate the financial
information of Centaur Media Plc and all of its subsidiaries after
elimination of intercompany transactions and balances.
(i) Subsidiaries
Subsidiaries are all entities controlled by the Group. The Group
controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group until the
date that the Group ceases to control them. In the statement of
comprehensive income, the results of subsidiaries for which control
has ceased are presented separately as discontinued operations in
the year in which they have been disposed of and in the comparative
year.
On the disposal of a subsidiary, assets and liabilities of that
subsidiary are de-recognised from the consolidated statement of
financial position, earnings up to the date of loss of control are
retained in the Group, and a profit/(loss) on disposal is
recognised measured as consideration received less the fair value
of assets and liabilities disposed of.
Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated. The accounting
policies of subsidiaries are consistent with the policies adopted
by the Group.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial information of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional
currency'). The consolidated financial information is presented in
Pounds Sterling, which is the Group and Company's functional and
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at year end exchange
rates are recognised in the statement of comprehensive income.
Non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange rates at the date when
the fair value was determined.
(iii) Group Companies
The results and financial position of the Group entities that
have a functional currency different from the presentation currency
are translated into the presentation currency as follows:
-- Assets and liabilities for each statement of financial
position presented are translated at the closing rate at the date
of that statement of financial position;
-- Income and expenses for each statement of comprehensive
income are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the rate on the dates of the
transactions); and
-- All resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign operations and of
borrowings are recognised in other comprehensive income. When a
foreign operation is sold, exchange differences that were recorded
in equity are recognised in the statement of comprehensive income
as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
(e) Revenue recognition
Revenue is recognised in accordance with IFRS 15. Revenue is
measured at the transaction price, which is the amount of
consideration to which Centaur expects to be entitled in exchange
for transferring promised goods or services to the customer.
Judgement may arise in timing and allocation of transaction price
when there are multiple performance obligations in one contract,
however an annual impact assessment is performed which has
confirmed that the impact is immaterial in both the current year
and comparative year. Revenue arises from the sales of premium
content, marketing services, training and advisory, events,
marketing and advertising solutions, and telemarketing services in
the normal course of business, net of discounts and value added
tax. Goods and services exchanged as part of a barter transaction
are recognised in revenue at the fair value of the goods and
services provided. Returns, refunds and other similar allowances,
which have historically been low in volume and immaterial in
magnitude, are accounted for as a reduction in revenue as they
arise.
Where revenue is deferred it is held as a balance in deferred
income on the consolidated statement of financial position. At any
given statement of financial position date, this deferred income is
current in nature and is expected to wholly be recognised in
revenue in the following financial year, with the exception of
returns and credit notes, which have historically been low in
volume and immaterial in magnitude. Additionally, in the current
year, deferred income held in a subsidiary at the point of its
disposal will not have been recognised in revenue for the Group for
the year.
The Group recognises revenue earned from contracts as individual
performance obligations are met, on a stand-alone selling price
basis. This is when value and control of the product or service has
transferred, being when the product is delivered to the customer or
the period in which the services are rendered as set out in more
detail below.
Premium Content
Revenue from subscriptions is deferred and recognised on a
straight-line basis over the subscription period reflecting the
continuous provision of paid content services over this time.
Revenue from individual publication sales is recognised at the
point at which the publication is delivered to the customer. In
general the Group bills customers for premium content at the start
of the contract.
Marketing Services
Revenue from campaign work and consultancy contracts is
recognised when the Group has obtained the right to consideration
in exchange for its performance, which is when a separately
identifiable phase (milestone) of a contract has been completed and
the value and benefit of the services rendered have been
transferred to the customer. In general the Group bills customers
for marketing services up front on a milestone basis.
Training and Advisory
Revenue from training and advisory is deferred and recognised
over the period of the training or when a separately identifiable
milestone of a contract has been delivered to the customer. In
general the Group bills customers for training and advisory up
front on a milestone basis.
Events
Consideration received in advance for events is deferred and
revenue is recognised at the point in time at which the event takes
place. In general, the Group bills customers for events before the
event date.
Marketing and Advertising Solutions
Marketing Solutions revenue from display and bespoke campaigns
is recognised over the period that the service is provided. Sales
of online advertising space are recognised over the period during
which the advertisements are placed. Sales of advertising space in
publications are recognised at the point at which the publication
occurs. In general the Group bills customers for marketing and
advertising solutions on delivery.
Telemarketing Services
Revenue from telemarketing services is deferred and recognised
over the period that the service is delivered generally according
to the number of hours expended as a proportion of the total hours
contracted. In general the Group bills customers for telemarketing
services in advance.
(f) Other operating income
Other operating income includes revenue from all other operating
activities which are not related to the principal activities of the
Group.
Included in other operating income is rental income and
transitional services agreement income.
Rental income is for the sub-lease of properties under lease,
which is recognised on a straight-line basis over the lease term
using the exemption available for short-term leases under IFRS 16,
see note 1(i).
Transitional services agreement income relates to services
provided to the buyers of the Group companies disposed of during
the year, which is recognised at the point in time at which the
service is delivered. The costs associated with this income are
included within net operating expenses on the consolidated
statement of comprehensive income.
(g) Investments
In the Company's financial information, investments in
subsidiaries are stated at cost less provision for impairment in
value.
Investments are reviewed for impairment whenever events indicate
that the carrying value may not be recoverable. An impairment loss
is recognised to the extent that the carrying value exceeds the
higher of the investments fair value less cost of disposal and its
value-in-use. An asset's value-in-use is calculated by discounting
an estimate of future cash flows by the pre-tax weighted average
cost of capital. Any impairment is recognised in the statement of
comprehensive income. If there has been a change in the estimates
used to determine the investment's recoverable amount, impairment
losses that have been recognised in prior periods may be reversed.
This reversal is recognised in the statement of comprehensive
income.
(h) Income tax
The tax expense represents the sum of current and deferred
tax.
Current tax is based on the taxable profit for the year. Taxable
profit differs from profit as reported in the statement of
comprehensive income because it excludes items of income or expense
that are taxable or deductible in other years, and it further
includes items that are never taxable or deductible. The Group and
Company's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the statement of
financial position date.
Deferred tax is provided in full, using the liability method, on
temporary differences between the carrying amounts of assets and
liabilities in the consolidated financial information and the
corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
to utilise those temporary differences and losses. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the enacted or substantively
enacted tax rates that are expected to apply in the year when the
liability is settled or the asset is realised. Deferred tax is
charged or credited to the statement of comprehensive income,
except when it relates to items charged or credited directly to
equity, in which case the deferred tax is recognised in other
comprehensive income.
(i) Leases
Lessee accounting
Under IFRS 16, leases are accounted for on a 'right-of-use
model' reflecting that, at the commencement date, the Group as a
lessee has a financial obligation to make lease payments to the
lessor for its right to use the underlying asset during the lease
term. The financial obligation is recognised as a lease liability,
and the right to use the underlying asset is recognised as a
right-of-use ('ROU') asset. The ROU assets are recognised within
property, plant and equipment on the face of the consolidated
statement of financial position, and are presented separately in
note 12.
The lease liability is initially measured at the present value
of the lease payments using the rate implicit in the lease or,
where that cannot be readily determined, the incremental borrowing
rate (see note 1(t)(vii)). Subsequently the lease liability is
measured at amortised cost, with interest increasing the carrying
amount and lease payments reducing the carrying amount. The
carrying amount is remeasured to reflect any reassessment or lease
modifications, or to reflect revised in-substance fixed lease
payments.
The ROU asset is initially measured at cost which comprises:
-- the amount of the initial measurement of the lease liability;
-- any lease payments made at or before the commencement date,
less any lease incentives received;
-- any initial direct costs; and
-- an estimate of costs to be incurred at the end of the lease term.
Subsequently the ROU asset is measured at cost less accumulated
depreciation and impairment losses. Depreciation is calculated to
write off the cost on a straight line-basis over the lease
term.
Using the exemption available under IFRS 16 the Group elects not
to apply the requirements above to:
-- Short-term leases; and
-- Leases for which the underlying asset is of a low value.
In these cases, the Group recognises the lease payments as an
expense on a straight-line basis over the lease term, or another
systematic basis if that basis is more representative of the
agreement.
Lessor accounting
The Group had contracts for the sub-lease of areas of its Wells
Street property lease. These arrangements were exempt from the
requirements of IFRS 16 under the short-term lease exemption as
they all had a lease term of under twelve months from the date of
transition. As such, the income derived from these sub-leasing
arrangements is recognised on a straight-line basis and is
presented in the consolidated statement of comprehensive income in
'other operating income'. All arrangements in which the Group acted
as a lessor ceased during the year.
(j) Impairment of assets
Assets that are subject to depreciation or amortisation are
reviewed for impairment whenever events indicate that the carrying
value may not be recoverable. An impairment loss is recognised to
the extent that the carrying value exceeds the higher of the
asset's fair value less cost of disposal and its value-in-use. An
asset's value in use is calculated by discounting an estimate of
future cash flows by the pre-tax weighted average cost of
capital.
(k) Inventories
Inventories are stated at the lower of cost and net realisable
value. Work in progress comprises costs incurred relating to
publications and exhibitions prior to the publication date or the
date of the event. Cost is measured as all costs of purchase and
other costs incurred in bring the inventories to their present
location and condition.
(l) Property, plant and equipment
See note 1(i) for right-of-use assets. All other property, plant
and equipment is stated at historical cost less accumulated
depreciation and impairment losses. The historical cost of
property, plant and equipment is the purchase cost together with
any incidental direct costs of acquisition. Depreciation is
calculated to write off the cost, less estimated residual value, of
assets, on a straight line-basis over the expected useful economic
lives to the Group over the following periods:
Leasehold improvements - 10 years or the expected length of the lease
if shorter
Fixtures and fittings - 5 to 10 years
Computer equipment - 3 to 5 years
Right-of-use assets - over the lease term
The estimated useful lives, residual values and depreciation
methods are reviewed at the end of each reporting year, with the
effect of any changes in estimate accounted for on a prospective
basis.
(m) Intangible assets
(i) Goodwill
Where the cost of a business acquisition exceeds the fair values
attributable to the separable net assets acquired, the resulting
goodwill is capitalised and allocated to the cash-generating unit
('CGU') or groups of CGUs that are expected to benefit from the
synergies of the business combination. Goodwill has an indefinite
useful life and is tested for impairment annually on a Group level
or whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
Each segment is deemed to be a CGU. Goodwill and acquired
intangible assets are assessed for impairment in accordance with
IAS 36. In assessing whether a write-down of goodwill and acquired
intangible assets is required, the carrying value of the segment is
compared with its recoverable amount. Recoverable amount is
measured as the higher of fair value less cost of disposal and
value-in-use. Any impairment is recognised in the statement of
comprehensive income (in net operating expenses) and is classified
as an adjusting item. Impairment of goodwill is not subsequently
reversed.
On the disposal of a CGU, the attributable amount of goodwill is
included in the determination of the profit or loss on
disposal.
(ii) Brands and publishing rights, customer relationships and
non-compete arrangements
Separately acquired brands and publishing rights are shown at
historical cost. Brands and publishing rights, customer
relationships and non-compete arrangements acquired in a business
combination are recognised at fair value at the acquisition date.
They have a finite useful life and are subsequently carried at cost
less accumulated amortisation and impairment losses.
(iii) Software
Computer software that is not integral to the operation of the
related hardware is carried at cost less accumulated amortisation.
Costs associated with the development of identifiable and unique
software products controlled by the Group that will generate
probable future economic benefits in excess of costs are recognised
as intangible assets when the criteria of IAS 38 'Intangible
Assets' are met. They are carried at cost less accumulated
amortisation and impairment losses.
(iv) Amortisation methods and periods
Amortisation is calculated to write off the cost or fair value
of intangible assets on a straight-line basis over the expected
useful economic lives to the Group over the following periods:
Computer software - 3 to 5 years
Brands and publishing - 5 to 20 years
rights
Customer relationships - 3 to 10 years or over the term
of any specified contract
Separately acquired websites - 3 to 5 years
and content
Non-compete arrangements - Over the term of the arrangement
(n) Employee benefits
(i) Post-employment obligations
The Group and Company contribute to a defined contribution
pension scheme for the benefit of employees. The assets of the
scheme are held separately from those of the Group in an
independently administered fund. Contributions to defined
contribution schemes are charged to the statement of comprehensive
income in net operating expenses when employer contributions become
payable.
(ii) Share-based payments
The Group operates a number of equity-settled share-based
compensation plans for its employees. The fair value of the
share-based compensation expense is estimated using either a Monte
Carlo or Black-Scholes option pricing model and is recognised in
the statement of comprehensive income over the vesting period with
a corresponding increase in equity. The total amount to be expensed
is determined by reference to the fair value of the awards
granted:
-- Including any market performance conditions;
-- Excluding the impact of any service and non-market
performance vesting conditions (for example, profitability, sales
growth targets, cash flow performance and remaining an employee of
the entity over a specified time period); and
-- Including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
The total expense is recognised over the vesting period, which
is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each reporting year, the Group
revises its estimates of the number of options that are expected to
vest based on the non-market vesting and service conditions. It
recognises the impact of the revision to original estimates, if
any, in the statement of comprehensive income, with a corresponding
adjustment to equity. The Company issues new shares or transfers
shares from treasury shares to settle share-based compensation
awards.
The award by the Company of share-based compensation awards over
its equity instruments to the employees of subsidiary undertakings
in the Group is treated as a capital contribution, only if it is
left unsettled. The fair value of employee services received,
measured by reference to the grant date fair value, is recognised
over the vesting period as an increase to investment in subsidiary
undertakings, with a corresponding credit to equity.
(o) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources will be required to settle
the obligation and the obligation can be reliably estimated.
Provisions for deferred contingent consideration are measured at
fair value. Where the deferred consideration is contingent on the
continued employment of the vendors, such arrangements are
recognised in the consolidated statement of comprehensive income on
a straight line basis over the period of the arrangement.
(p) Equity
Share capital and share premium
Ordinary and deferred shares are classified as equity. The
excess of consideration received in respect of shares issued over
the nominal value of those shares is recognised in the share
premium account. Incremental costs directly attributable to the
issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
Where any Group company purchases the Company's equity
instruments, for example as the result of a share buyback or
share-based payment plan, the consideration paid, including any
directly attributable incremental costs (net of income taxes) is
deducted from equity attributable to the owners of the Company as
treasury shares until the shares are cancelled or reissued. Where
such ordinary shares are subsequently reissued, any consideration
received, net of any directly attributable incremental transaction
costs and the related income tax effects, is included in equity
attributable to the owners of the Company.
Shares held by the Centaur Employees' Benefit Trust are
disclosed as treasury shares and deducted from contributed equity.
The Company also holds a non-distributable reserve representing the
fair value of unvested share-based compensations plans.
Own shares
Own shares consist of treasury shares and shares held within an
employee benefit trust. The Company has an employee benefit trust
for the granting of shares to applicable employees.
Own shares are recognised at cost as a deduction from equity
shareholders' funds. Subsequent consideration received for the sale
of such shares is also recognised in equity, with any difference
between the sale proceeds and the original cost being taken to
retained earnings. No gain or loss is recognised in the financial
information on transactions in treasury shares.
(q) Dividends
Dividends are recognised in the year in which they are paid or,
in respect of the Company's final dividend for the year, approved
by the shareholders in the Annual General Meeting.
(r) Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The Executive Committee has been identified as the chief operating
decision-maker, responsible for allocating resources and assessing
performance of the operating segments. In light of the disposals of
subsidiaries, the reportable segments of the Group have changed
since the year ended 31 December 2018. In the year then ended (and
in previous years) the three reportable segments of the Group, each
of which were allocated a proportion of corporate income and costs,
were:
-- Marketing (renamed to Xeim);
-- Financial Services (disposed 31 March 2019); and
-- Professional, which comprised the following portfolios:
o Legal, which consisted of The Lawyer and Venture Business
Research ('VBR') (VBR was disposed on 13 May 2019);
o Human Resources (disposed 30 April 2019);
o Travel & Meetings (disposed 30 April 2019); and
o Engineering (disposed 31 May 2019).
Consequently, the core operations are now organised around the
two continuing reportable market-facing segments Xeim and The
Lawyer (the remaining component of the previous Legal portfolio),
with corporate income and costs presented separately as
"Central".
Certain prior year comparatives have been updated to reflect
current year presentation.
(s) Financial instruments
The Group has applied IFRS 9, Financial Instruments as outlined
below:
(i) Financial assets
The Group classifies and measures its financial assets in line
with one of the three measurement models under IFRS 9: at amortised
cost, fair value through profit or loss, and fair value through
other comprehensive income. Management determines the
classification of its financial assets based on the requirements of
IFRS 9 at initial recognition.
They are included in current assets, except for maturities
greater than 12 months after the statement of financial position
date. These are classified as non-current assets. The Group's
financial assets comprise trade and other receivables and cash and
cash equivalents in the statement of financial position. Please see
the following sections.
(ii) Trade receivables
Trade receivables are accounted for under IFRS 9 being
recognised initially at fair value and subsequently at amortised
cost less any allowance for expected lifetime credit losses under
the "expected credit loss" model. As mandated by IFRS 9, the
expected lifetime credit losses are calculated using the
'simplified' approach.
The allowance for expected lifetime credit losses for trade
receivables is established by considering, on a discounted basis,
the cash shortfalls it would incur in various defaults scenarios
for prescribed future periods and multiplying those shortfalls by
the probability of each scenario occurring. The historical loss
rates are adjusted to reflect current and forward-looking
information on macroeconomic factors affecting the ability of the
customers to settle the receivables. The allowance is the sum of
these probability weighted outcomes. The allowance and any changes
to it are recognised in the statement of comprehensive income
within net operating expenses. A provision matrix is used to
calculate the allowance for expected lifetime credit losses on
trade receivables which is based on historical default rates over
the expected life of the trade receivables and is adjusted for
forward looking estimates. When a trade receivable is
uncollectible, it is written off against the allowance account for
trade receivables. Subsequent recoveries of amounts previously
written off are credited against net operating expenses in the
statement of comprehensive income. The Group defines a default as
failure of a debtor to repay an amount due as this is the time at
which our estimate of future cash flows from the debtor is
affected.
(iii) Cash and cash equivalents
Cash and cash equivalents includes cash in hand and deposits
repayable on demand or maturing within three months of the
statement of financial position date.
(iv) Financial liabilities
Debt and trade payables are recognised initially at fair value
based on amounts exchanged, net of transaction costs, and
subsequently at amortised cost.
Interest expense on debt is accounted for using the effective
interest method and is recognised in income.
(v) Trade payables
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
(vi) Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred and carried subsequently at amortised
cost. Costs of borrowings are recognised in the statement of
comprehensive income as incurred or, where appropriate, across the
term of the related borrowing.
(vi) Receivables from and payables to subsidiaries
The Company has amounts receivable from and payable to
subsidiaries which are recognised at fair value. Amounts receivable
from subsidiaries are assessed annually for recoverability under
the requirements of IFRS 9.
(vii) Derivative financial instruments
The Group does not hold derivative financial instruments either
for trading purposes or designated as hedges.
(t) Key accounting assumptions, estimates and judgements
The preparation of financial information under IFRS requires the
use of certain key accounting assumptions and requires management
to exercise its judgement and to make estimates. The areas where
assumptions and estimates are significant to the consolidated
financial information are as follows:
i) Carrying value of goodwill, other intangible assets and
Company investment estimate
In assessing whether goodwill, other intangible fixed assets and
the Company's investment are impaired, the Group uses a discounted
cash flow model which includes forecast cash flows and estimates of
future growth. If the results of operations in future periods are
lower than included in the cash flow model, impairments may be
triggered. A sensitivity analysis has been performed on the
value-in-calculations. Further details of the assumptions and
sensitivities in the discounted cash flow model are included in
notes 10 and 13.
Intangible assets arising on business combinations are
identified based on the Group's understanding of the acquired
business and previous experience of similar businesses. Consistent
methods of valuation for similar types of intangible asset are
applied where possible and appropriate, using information reviewed
at Board level where available. Discount rates applied in
calculating the values of intangible assets arising on the
acquisition of subsidiaries are calculated specifically for each
acquisition and adjusted to reflect the respective risk profile of
each individual asset based on the Group's past experience of
similar assets.
ii) Recoverability of trade receivables estimate
The allowance for expected lifetime credit losses for trade
receivables is calculated in line with IFRS 9. This is established
by considering on a discounted basis the cash shortfalls it would
incur in various default scenarios for prescribed future periods
and multiplying the shortfalls by the probability of each scenario
occurring. The historical loss rates are adjusted to reflect
current and forward-looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables.
Further details about trade receivables are included in note 17 and
information about the credit risk and expected lifetime credit
losses are shown in note 28.
iii) Adjusting items judgement
The term 'adjusted' is not a defined term under IFRS. Judgement
is required to ensure that the classification and presentation of
certain items as adjusting, including exceptional items, is
appropriate and consistent with the Group's accounting policy.
Further details about the amounts classified as adjusting are
included in notes 1(b) and 4.
iv) Share based payments estimate
The fair value of the share-based compensation expense
recognised in the statement of comprehensive income requires the
use of estimates. Details regarding the determination of fair value
of these costs are set out in note 1(n)(ii).
v) Deferred tax judgement and estimate
The calculation of deferred tax assets and liabilities requires
judgement. Where the ultimate tax treatment is uncertain, the Group
recognises deferred tax assets and liabilities based on an estimate
of future taxable income and recoverability. Where a change in
circumstances occurs, or the final tax outcome is different from
the amounts that were initially recorded, such differences will
impact the income tax and deferred tax balances in the year in
which that change or outcome is known. The accounting policy
regarding deferred tax is set out above in note 1(h).
vi) Valuation of intangibles estimate
Intangibles assets acquired in a business combination are
required to be recognised separately from goodwill and amortised
over their useful life. The Group has separately recognised
computer software, brands and customer relationships in the
acquisitions made (see note 11).
The fair value of these acquired intangibles is based on
valuation techniques that require inputs based on assumptions about
the future and estimates related to current market conditions.
The Group also makes assumptions about the useful life of the
acquired intangibles as outlined in note 1(m)(iv).
vii) Lease incremental borrowing rate estimate
The adoption of IFRS 16 on 1 January 2019 requires the use of an
incremental borrowing rate ('IBR') to discount minimum future lease
payments to present value. The IBR is an estimate used in
accounting for leases under IFRS 16 where the interest rate
implicit in the lease cannot be readily determined. The IBR is the
rate of interest that a lessee would have to pay to borrow over a
similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in a
similar economic environment. This is calculated by using LIBOR as
a reference rate and adjusting for the Group's specific borrowing
rate on its existing revolving credit facility. Additionally, for
each individual contract a lease specific adjustment is made where
necessary by using market yields on similar assets as a data
point.
2 Segmental reporting
The Executive Committee has been identified as the chief
operating decision-maker, reviewing the Group's internal reporting
on a monthly basis in order to assess performance and allocate
resources.
In light of the disposals of subsidiaries in the current year,
the reportable segments of the Group have changed since the year
ended 31 December 2018. In the year then ended (and in previous
years) the three reportable segments of the Group were as follows,
with corporate income and costs allocated to each on an appropriate
basis:
-- Marketing (renamed Xeim);
-- Financial Services (disposed 31 March 2019); and
-- Professional, the aggregate of the following portfolios:
o Legal (which consists of The Lawyer and VBR (until disposal of
VBR on 13 May 2019));
o Human Resources (disposed 30 April 2019);
o Travel & Meetings (disposed 30 April 2019); and
o Engineering (disposed 31 May 2019).
Consequently, the core operations are now organised around the
two continuing reportable market-facing segments: Xeim and The
Lawyer (the remaining component of the previous Legal portfolio).
Corporate income and costs have been presented separately as
"Central". The Group believes this is the most appropriate
presentation of segmental reporting in order for the user to
understand the core operations of the Group. There is no
inter-segmental revenue.
Segment assets consist primarily of property, plant and
equipment, intangible assets including goodwill, inventories and
trade receivables. Segment liabilities comprise trade payables,
accruals and deferred income.
Corporate assets and liabilities primarily comprise property,
plant and equipment, intangible assets, current and deferred tax
balances, cash and cash equivalents, borrowings and lease
liabilities.
Capital expenditure comprises additions to property, plant and
equipment, intangible assets and includes additions resulting from
acquisitions through business combinations.
Core operations Continuing Discontinued
Xeim The Lawyer GBPm Central operations operations Group
2019 Note GBPm GBPm GBPm GBPm GBPm GBPm
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Revenue 40.7 8.2 48.9 - 48.9 7.0 55.9
Other operating
income - - - 1.6 1.6 - 1.6
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Adjusted operating
profit / (loss) 1 (b) 4.1 2.3 6.4 (7.5) (1.1) 2.9 1.8
Exceptional
operating costs 4 (0.5) (1.0) (1.5) (3.2) (4.7) (0.1) (4.8)
Amortisation of
acquired
intangibles 11 (2.4) - (2.4) - (2.4) (0.1) (2.5)
Share-based
payments 25 - - - (0.1) (0.1) - (0.1)
Loss on disposal
of subsidiary 14 - (0.1) (0.1) - (0.1) - (0.1)
Profit on disposal
of subsidiaries 14 - - - - - 7.8 7.8
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Operating profit /
(loss) 1.2 1.2 2.4 (10.8) (8.4) 10.5 2.1
Finance costs 6 (0.3) - (0.3)
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
(Loss) / profit
before tax (8.7) 10.5 1.8
Taxation 7 0.7 (0.6) 0.1
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
(Loss) / profit
for the year (8.0) 9.9 1.9
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Segment assets 57.8 18.7 76.5 - 76.5 - 76.5
Corporate assets 10.6 10.6 - 10.6
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Consolidated total
assets 87.1 - 87.1
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Segment
liabilities (17.4) (3.8) (21.2) - (21.2) - (21.2)
Corporate
liabilities (4.8) (4.8) - (4.8)
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Consolidated total
liabilities (26.0) - (26.0)
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Other items
Capital
expenditure
(tangible and
intangible
assets) 0.8 0.1 0.9 0.6 1.5 - 1.5
------------------ ----- ------ ---------- --------------- ------- ------------------ ----------------- ------
Restated(2) Xeim The Lawyer Core operations Central Continuing operations Discontinued operations Group
2018 Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Revenue 42.6 7.7 50.3 - 50.3 20.2 70.5
Other
operating
income - - - 0.8 0.8 - 0.8
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Adjusted
operating
profit 1 (b) 3.3 2.0 5.3 (7.5) (2.2) 7.4 5.2
Exceptional
operating
costs 4 (0.3) (0.3) (0.6) (1.4) (2.0) (0.5) (2.5)
Impairment of
goodwill 10 (12.8) - (12.8) - (12.8) (0.3) (13.1)
Amortisation
of acquired
intangibles 11 (2.4) (0.1) (2.5) - (2.5) (0.3) (2.8)
Share-based
payments 25 (0.2) - (0.2) (0.6) (0.8) - (0.8)
Profit on
disposal of
subsidiary 14 - - - - - 0.1 0.1
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Operating
(loss) /
profit (12.4) 1.6 (10.8) (9.5) (20.3) 6.4 (13.9)
Finance costs 6 (0.2) - (0.2)
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
(Loss) /
profit before
tax (20.5) 6.4 (14.1)
Taxation 7 1.1 (1.2) (0.1)
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
(Loss) /
profit for
the year (19.4) 5.2 (14.2)
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Segment assets 56.6 17.7 74.3 - 74.3 18.4 92.7
Corporate
assets 2.9 2.9 - 2.9
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Consolidated
total assets 77.2 18.4 95.6
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Segment
liabilities (11.4) (2.4) (13.8) - (13.8) (8.4) (22.2)
Corporate
liabilities (6.7) (6.7) - (6.7)
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Consolidated
total
liabilities (20.5) (8.4) (28.9)
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
Other items
Capital
expenditure
(tangible and
intangible
assets) 1.9 0.3 2.2 0.8 3.0 - 3.0
-------------- ----- ------ ---------- --------------- ------- --------------------- ----------------------- ------
(2) See note 1 (a) for description of prior year restatement
Supplemental Information
Revenue by Geographical Location
The Group's revenues from continuing operations from external
customers by geographical location are detailed below:
Restated(2) Restated(2) Restated(2)
Xeim The Lawyer Total Xeim The Lawyer Total
2019 2019 2019 2018 2018 2018
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ----- ---------- ----- ----------- ----------- -----------
United Kingdom 32.7 6.6 39.3 34.5 6.1 40.6
Europe (excluding United Kingdom) 2.6 0.9 3.5 1.7 0.7 2.4
North America 4.4 0.4 4.8 4.2 0.4 4.6
Rest of world 1.0 0.3 1.3 2.2 0.5 2.7
---------------------------------- ----- ---------- ----- ----------- ----------- -----------
40.7 8.2 48.9 42.6 7.7 50.3
---------------------------------- ----- ---------- ----- ----------- ----------- -----------
(2) See note 1 (a) for description of prior year restatement
Substantially all of the Group's net assets are located in the
United Kingdom. The Directors therefore consider that the Group
currently operates in a single geographical segment, being the
United Kingdom.
Revenue by type
The Group's revenue from continuing operations by type is as
follows:
Restated(2) Restated(2) Restated(2)
Xeim The Lawyer Total Xeim The Lawyer Total
2019 2019 2019 2018 2018 2018
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ ----- ---------- ----- ----------- ----------- -----------
Premium Content 11.0 3.5 14.5 11.2 3.2 14.4
Marketing Services 4.3 - 4.3 4.5 - 4.5
Training and Advisory 7.6 - 7.6 8.0 - 8.0
Events 4.2 2.1 6.3 4.7 1.8 6.5
Marketing and Advertising Solutions 4.3 2.6 6.9 4.6 2.7 7.3
Telemarketing Services 9.3 - 9.3 9.6 - 9.6
40.7 8.2 48.9 42.6 7.7 50.3
------------------------------------ ----- ---------- ----- ----------- ----------- -----------
(2) See note 1 (a) for description of prior year restatement
The accounting policies for each of these revenue streams is
disclosed in note 1 (e), including the timing of revenue
recognition. There are some contracts for which revenue has not yet
been recognised and is being held in deferred income, see note 21.
This deferred income is all current and is expected to be
recognised as revenue in 2020.
Other operating income
The Group's other operating income from continuing operations by
type is as follows:
2019 2018
GBPm GBPm
---------------------------------------- ----- -----
Sale of goods and services
Rental income 0.8 0.8
Transitional services agreement income 0.8 -
1.6 0.8
---------------------------------------- ----- -----
Rental income relates to the sublease of part of the Group's
rented property in London. There is not expected to be income in
respect of this going forward as this property has been vacated in
December 2019. See note 29 for further details.
Transitional services agreement income relates to services
provided to the buyers of the Group companies disposed of during
the year. There is not expected to be income in respect of this
going forward as all transitional services agreements have ceased
during the year.
3 Net operating expenses
Continuing operating loss is stated after charging:
Restated(2) Restated(2) Restated(2)
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
Results(1) Items(1) Results Results(1) Items(1) Results
2019 2019 2019 2018 2018 2018
Note GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Employee benefits
expense 5 28.0 3.4 31.4 30.3 1.6 31.9
Depreciation of property,
plant and equipment 12 2.3 - 2.3 0.9 - 0.9
Impairment of property,
plant and equipment 12 0.4 - 0.4 - - -
Amortisation of intangible
assets 11 2.5 2.4 4.9 2.7 2.5 5.2
Impairment of intangible
assets 11 0.3 - 0.3 - - -
Impairment of goodwill 10 - - - - 12.8 12.8
Loss on disposal of
subsidiary (Venture
Business Research
Limited) - 0.1 0.1 - - -
Other exceptional
operating costs 4 - 1.3 1.3 - 0.4 0.4
Property costs 2.1 - 2.1 3.3 - 3.3
Repairs and maintenance
expenditure 0.1 - 0.1 0.1 - 0.1
Impairment of trade
receivables 28 0.4 - 0.4 0.2 - 0.2
Share-based payment
expense 25 - 0.1 0.1 - 0.8 0.8
IT expenditure 3.1 - 3.1 3.1 - 3.1
Other staff related
costs 2.5 - 2.5 2.5 - 2.5
Marketing expenditure 2.0 - 2.0 2.1 - 2.1
Other operating expenses 7.9 - 7.9 8.1 - 8.1
--------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
51.6 7.3 58.9 53.3 18.1 71.4
--------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
Cost of sales 22.6 - 22.6 19.6 - 19.6
Distribution costs 0.1 - 0.1 0.1 - 0.1
Administrative expenses 28.9 7.3 36.2 33.6 18.1 51.7
--------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
51.6 7.3 58.9 53.3 18.1 71.4
--------------------------- ---- ----------- --------- --------- ----------- ----------- -----------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
(2) See note 1 (a) for description of prior year restatement
Services provided by the Company's auditors
2019 2018
GBP'000 GBP'000
---------------------------------------------------------------- -------- --------
Fees payable to the Company's auditors for the audit of the
Company and consolidated financial statements 238 214
Fees payable to the Company's auditors and its associates
for other services:
The audit of the Company's subsidiaries pursuant to legislation 44 58
---------------------------------------------------------------- -------- --------
Total audit fees 282 272
---------------------------------------------------------------- -------- --------
Audit related assurance services 22 25
Total non-audit fees 22 25
---------------------------------------------------------------- -------- --------
Total fees 304 297
---------------------------------------------------------------- -------- --------
Fees payable to the Company's auditors for the audit of the
Company and consolidated financial statements include non-recurring
fees of GBP72,000 (2018: GBP34,000).
4 Adjusting items
As discussed in note 1(b), certain items are presented as
adjusting. These are detailed below:
Restated(2)
2019 2018
Continuing operations Note GBPm GBPm
---------------------------------------------------------- ----- ----- -----------
Exceptional operating costs
Staff related restructuring costs (including external
employment advice costs) 5 2.5 0.4
Costs relating to strategic corporate restructuring
initiatives - 0.3
Divestment programme related costs 2.2 1.3
---------------------------------------------------------- ----- ----- -----------
Exceptional operating costs 4.7 2.0
Impairment of goodwill 10 - 12.8
Amortisation of acquired intangible assets 11 2.4 2.5
Share-based payment expense 25 0.1 0.8
Loss on disposal of subsidiary 8,14 0.1 -
Adjusting items to profit before tax 7.3 18.1
Tax relating to adjusting items 7 (1.2) (0.7)
---------------------------------------------------------- ----- ----- -----------
Total adjusting items after tax for continuing operations 6.1 17.4
---------------------------------------------------------- ----- ----- -----------
Discontinued operations
Profit on disposal of subsidiaries 8,14 (7.8) (0.1)
Exceptional costs 8 0.1 0.5
Impairment of goodwill 10 - 0.3
Amortisation of acquired intangible assets 11 0.1 0.3
Tax relating to adjusting items 7 - (0.2)
---------------------------------------------------------- ----- ----- -----------
Total adjusting items after tax for discontinued
operations (7.6) 0.8
---------------------------------------------------------- ----- ----- -----------
Total adjusting items after tax (1.5) 18.2
---------------------------------------------------------- ----- ----- -----------
(2) See note 1 (a) for description of prior year restatement
Exceptional costs
Staff related restructuring costs (including external employment
advice costs)
In the current year staff related restructuring costs of GBP2.4m
related to the Group's cost reduction plan following the completion
of the divestment programme in 2019 and GBP0.1m of related external
employment advice. During 2018, staff related restructuring costs
of GBP0.2m related to the closure of the E-consultancy Asia Pacific
office, GBP0.1m related to restructuring of the Xeim portfolio and
GBP0.1m related to the restructuring of the in-house production
function.
Costs relating to strategic corporate restructuring
initiatives
In the prior year, these relate to professional fees for the
corporate simplification programme to restructure the Group ahead
of the divestment programme announced in October 2018.
Divestment programme related costs
In both the current and the prior year, divestment programme
related costs include professional fees incurred relating to the
sales process for The Lawyer of GBP1.2m (2018: GBP0.1m) and
management incentives of GBP1.0m (2018: GBP1.2m) related to that
programme. These management incentives sit in 'Employee benefits
expense' in Note 3 along with staff related restructuring costs
(excluding external employment advice costs).
Other adjusting items
Other adjusting items relate to the amortisation of acquired
intangible assets (see note 11) and share-based payment costs (see
note 25) as well as the items discussed below:
Goodwill impairment
In the prior year, an impairment of GBP13.1m (GBP12.8m and
GBP0.3m in continuing and discontinued operations respectively) has
been recognised against goodwill primarily relating to events to be
closed and other businesses within the Xeim portfolio. See note 10
for further details.
Loss / profit on disposal of subsidiaries
In the current year the loss on disposal of a subsidiary in
continuing operations of GBP0.1m related to the disposal of Venture
Business Research Limited ('VBR'). This is not presented in
discontinued operations as it does not represent a separate major
line of business and therefore has been included in continuing
operations.
The profit on disposal of subsidiaries in discontinued
operations relates to the subsidiaries sold in the divestment
programme. See note 14 for further details. In the prior year
GBP0.1m profit on disposal arose in relation to the 2017 disposal
of the Group's Home Interest segment following the agreement of
final completion accounts.
5 Directors and employees
Restated(2)
2019 2018 2019 2018
Group Group Company Company
Note GBPm GBPm GBPm GBPm
----------------------------------------------------------------------- ---- ------ ----------- -------- --------
Wages and salaries 25.3 27.6 1.4 1.0
Social security costs 2.9 3.1 0.1 0.2
Other pension costs 0.8 0.8 0.1 0.1
----------------------------------------------------------------------- ---- ------ ----------- -------- --------
Adjusted staff costs 29.0 31.5 1.6 1.3
Exceptional staff related restructuring costs (excluding external
employment advice costs) 4 2.4 0.4 0.8 -
Equity-settled share-based payments 25 0.1 0.8 0.1 0.8
----------------------------------------------------------------------- ---- ------ ----------- -------- --------
31.5 32.7 2.5 2.1
----------------------------------------------------------------------- ---- ------ ----------- -------- --------
(2) See note 1 (a) for description of prior year restatement
The staff costs presented above are for continuing operations
and exclude all staff costs relating to the disposed subsidiaries
as specified in note 14, which are presented in discontinued
operations.
The average monthly number of employees employed during the
year, including Directors, was:
2019 2018 2019 2018
Group Group Company Company
Number Number Number Number
------------- ------- ------- -------- --------
Xeim 514 605 - -
The Lawyer 52 55 - -
Central 10 10 4 4
Discontinued 85 88 - -
661 758 4 4
------------- ------- ------- -------- --------
With the exception of MarketMakers, a brand under Xeim, the
Group's employees have contracts of service with Centaur
Communications Limited and are paid by Chiron Communications
Limited, both of which are Group companies. As the employees
provide services to the Company, their costs are recharged and the
relevant disclosures are made in the financial statements. The
MarketMakers' employees are employed and paid by MarketMakers
Incorporated Limited.
Key management compensation
2019 2018
GBPm GBPm
-------------------------------------------- ----- -----
Salaries and short-term employment benefits 2.9 1.8
Termination benefits 0.4 0.1
Post-employment benefits 0.1 0.1
Share-based payments - 0.6
3.4 2.6
-------------------------------------------- ----- -----
Key management is defined as the Executive Directors and
Executive Committee members.
Aggregate Directors' remuneration
2019 2018
GBPm GBPm
--------------------------------------------- ----- -----
Salaries, fees, bonuses and benefits in kind 1.8 0.9
Termination benefits 0.4 -
Charge under long term incentive schemes - 0.3
Post-employment benefits 0.1 0.1
---------------------------------------------- ----- -----
2.3 1.3
--------------------------------------------- ----- -----
Highest paid Director's remuneration
2019 2018
GBPm GBPm
--------------------------------------------- ----- -----
Salaries, fees, bonuses and benefits in kind 0.8 0.4
Termination benefits 0.4 -
Charge under long term incentive schemes - 0.2
---------------------------------------------- ----- -----
1.2 0.6
--------------------------------------------- ----- -----
No Directors exercised share options during the current or prior
year. One Directors was paid compensation in respect of loss of
office during the year (2018 - Nil).
6 Finance costs
2019 2018
Note GBPm GBPm
---------------------------------------------------- ---- ----- -----
Interest payable on revolving credit facility - -
Commitment fees and amortisation of arrangement fee
in respect of revolving credit facility 0.2 0.2
Lease interest 20 0.1 -
---------------------------------------------------- ---- ----- -----
Total finance costs 0.3 0.2
---------------------------------------------------- ---- ----- -----
Interest and fees on revolving credit facility
These finance costs are in relation to the GBP25m revolving
credit facility, none of which is drawn-down at 31 December 2019
(2018: GBPnil). As indicated by the consolidated cash flow
statement, all draw-downs from this facility during the year were
also repaid within the year. Finance costs in relation to this
facility resulted in cash outflows by the Company and Group of
GBP0.2m during the year (2018: GBP0.4m).
Lease interest
On the adoption of IFRS 16 on 1 January 2019, lease liabilities
were recognised for the Group's property lease arrangements.
GBP0.1m of interest on these leases was incurred during the year.
There was no interest on lease liabilities in the prior year when
these leases were accounted for under IAS 17 as operating leases.
Please refer to notes 1 (a) and 20 for further details.
7 Taxation
2019 2019 2019 2018 2018 2018
Continuing Discontinued Total Continuing Discontinued Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------------- ---- ----------- ------------- ------ ----------- ------------- ------
Analysis of charge for the year
Current tax 22
UK Corporation Tax - 0.6 0.6 (0.6) 1.4 0.8
Overseas tax - - - 0.3 - 0.3
- 0.6 0.6 (0.3) 1.4 1.1
--------------------------------------- ---- ----------- ------------- ------ ----------- ------------- ------
Deferred tax 15
Current period (0.8) 0.1 (0.7) (0.7) (0.2) (0.9)
Adjustments in respect of prior years 0.1 (0.1) - (0.1) - (0.1)
--------------------------------------- ---- ----------- ------------- ------ ----------- ------------- ------
(0.7) - (0.7) (0.8) (0.2) (1.0)
--------------------------------------- ---- ----------- ------------- ------ ----------- ------------- ------
Taxation (credit) / charge (0.7) 0.6 (0.1) (1.1) 1.2 0.1
--------------------------------------- ---- ----------- ------------- ------ ----------- ------------- ------
The tax charge for the year can be reconciled to the (loss) /
profit in the statement of comprehensive income as follows:
2019 2019 2019 2018 2018 2018
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------------- ----------- ------------- ------ ----------- ------------- ------
(Loss) / profit before tax (8.7) 10.5 1.8 (20.5) 6.4 (14.1)
Tax at the UK rate of corporation tax of
19.00% (2018: 19.00%) (1.6) 2.0 0.4 (3.9) 1.2 (2.7)
Effects of:
Expenses not deductible for tax purposes 0.7 - 0.7 2.7 - 2.7
Profit on disposal - (1.5) (1.5) - - -
Effects of changes in tax rate on deferred tax
balances 0.1 - 0.1 - - -
Deferred tax adjustment on business disposal 0.1 0.1 0.2 - - -
Deferred tax not recognised - - - 0.1 - 0.1
Adjustments in respect of prior years - - - (0.1) - (0.1)
Different tax rates of subsidiaries in other
jurisdictions - - - 0.1 - 0.1
---------------------------------------------- ----------- ------------- ------ ----------- ------------- ------
Taxation (credit) / charge (0.7) 0.6 (0.1) (1.1) 1.2 0.1
---------------------------------------------- ----------- ------------- ------ ----------- ------------- ------
The Finance Act 2015 included legislation to reduce the rate of
corporation tax from 20% to 19% from 1 April 2017 and to 17% from 1
April 2020. This change had been substantively enacted at the
balance sheet date, The government has announced that the rate of
corporation tax will not be reduced from 1 April 2020 and that it
will remain at 19%, but this has not yet been enacted and
therefore, the Group's deferred tax balances continue to be
recorded at 17%.
A reconciliation between the reported tax expense and the
adjusted tax expense taking account of adjusting items as discussed
in note 1(b) and 4 is shown below:
2019 2019 2019 2018 2018 2018
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ ----------- ------------- ------ ----------- ------------- ------
Reported tax (credit) / expense (0.7) 0.6 (0.1) (1.1) 1.2 0.1
Effects of:
Amortisation of acquired intangible
assets 0.5 - 0.5 0.3 0.1 0.4
Share-based payments - - - 0.1 - 0.1
Exceptional expenses 0.7 - 0.7 0.3 0.1 0.4
------------------------------------ ----------- ------------- ------ ----------- ------------- ------
Adjusted tax expense / (credit) 0.5 0.6 1.1 (0.4) 1.4 1.0
------------------------------------ ----------- ------------- ------ ----------- ------------- ------
8 Discontinued operations
In the current year the Group disposed of the following
subsidiaries:
- Centaur Financial Platforms Limited ('FIN') on 31 March 2019;
- Centaur Media Travel and Meetings Limited ('T&M') on 30 April 2019;
- Centaur Human Resources Limited ('HR') on 30 April 2019; and
- Centaur Engineering Limited ('ENG') on 31 May 2019.
The disposals were effected in line with the Group's strategy to
simplify its structure, to improve operational execution and to
focus attention on leading brands.
A profit of GBP7.8m arose on the disposal of these subsidiaries
being the difference between the proceeds of disposals and the
carrying amount of the subsidiaries' net assets and attributable
goodwill, less transaction costs. Details of these disposals can be
found in note 14.
In addition to the above named subsidiaries, the Group disposed
of its Venture Business Research Limited ('VBR') subsidiary on 13
May 2019 to an employee of VBR. A loss on disposal of GBP0.1m arose
on this disposal as detailed in note 14. The loss on disposal, as
well as the operational results of VBR, have not been included in
discontinued operations as it does not represent a separate major
line of business and these have therefore been included in
continuing operations.
In the prior year GBP0.1m profit on disposal arose in relation
to the 2017 disposal of the Group's Home Interest segment ('HI')
following the agreement of final completion accounts.
The results of the discontinued operations, which were included
in the consolidated statement of comprehensive income and
consolidated cash flow statement, were as follows:
FIN T&M HR ENG HI Total FIN T&M HR ENG HI Total
------------------------------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------
Year ended Year ended
31 December 2019 31 December 2018
Statement of comprehensive income GBPm GBPm
------------------------------------ ------------------------------------- -----------------------------------------
Revenue 2.1 3.8 0.7 0.4 - 7.0 8.3 6.4 3.2 2.3 - 20.2
Expenses (1.1) (2.2) (0.6) (0.4) - (4.3) (5.4) (4.8) (2.2) (1.5) - (13.9)
(Loss) / profit on disposal (0.8) 3.0 3.8 1.8 - 7.8 - - - - 0.1 0.1
------------------------------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------
Profit before tax 0.2 4.6 3.9 1.8 - 10.5 2.9 1.6 1.0 0.8 0.1 6.4
Attributable tax expense (0.2) (0.3) (0.1) - - (0.6) (0.6) (0.3) (0.2) (0.1) - (1.2)
------------------------------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------
Statutory profit after tax - 4.3 3.8 1.8 - 9.9 2.3 1.3 0.8 0.7 0.1 5.2
Loss / (profit) on disposal 0.8 (3.0) (3.8) (1.8) - (7.8) - - - - (0.1) (0.1)
Exceptional costs - - 0.1 - - 0.1 0.3 0.1 0.1 - - 0.5
Impairment of goodwill - - - - - - 0.3 - - - - 0.3
Amortisation of acquired intangible
assets 0.1 - - - - 0.1 0.2 - 0.1 - - 0.3
Tax relating to adjusting items(1) - - - - - - (0.2) - - - - (0.2)
------------------------------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------
Total adjusting items(1) 0.9 (3.0) (3.7) (1.8) - (7.6) 0.6 0.1 0.2 - (0.1) 0.8
------------------------------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------
Adjusted profit(1) attributable to
discontinued operations 0.9 1.3 0.1 - - 2.3 2.9 1.4 1.0 0.7 - 6.0
------------------------------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
FIN T&M HR ENG HI Total FIN T&M HR ENG HI Total
--------------------- --- --- --- --- ----- --- --- --- -----
Year ended Year ended
31 December 2019 31 December 2018
Cash Flows GBPm GBPm
--------------------- ----------------------------- ----------------------------
Operating cash flows 0.6 0.3 0.4 0.4 - 1.7 - - - - - -
Investing cash flows - - - - - - - - - - - -
Financing cash flows - - - - - - - - - - - -
--------------------- --- --- --- --- ----- --- --- --- -----
Total cash flows 0.6 0.3 0.4 0.4 - 1.7 - - - - - -
--------------------- --- --- --- --- ----- --- --- --- -----
The attributable tax expense stated in the table above is
derived from the profit of discontinued operations. No income tax
expense arose on the profit or loss on disposals.
9 Earnings/(loss) per share
Basic earnings per share ('EPS') is calculated by dividing the
earnings attributable to ordinary shareholders by the weighted
average number of shares in issue during the year. 1,573,134 (2018:
857,991) shares held in the employee benefit trust and 6,964,613
(2018: 6,964,613) shares held in treasury have been excluded in
arriving at the weighted average number of shares.
For diluted earnings per share the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potentially dilutive ordinary shares. This comprises share options
and awards (including those granted under the share save plan)
granted to Directors and employees where the exercise price is less
than the average market price of the Company's ordinary shares
during the year.
Basic and diluted earnings per share have also been presented on
an adjusted continuing and discontinued basis, as the Directors
believe that these measures are more reflective of the underlying
performance of the Group. These have been calculated as
follows:
Restated(2)
2018
2019 Earnings Earnings / Restated(2) Restated(2)
/ (Loss) 2019 2019 (Loss) 2018 2018
attributable Weighted Earnings / attributable Weighted Earnings /
to owners of average number (Loss) per to owners of average number (Loss) per
the parent of shares share the parent of shares share
Note GBPm millions Pence GBPm millions Pence
Basic
Continuing
operations (8.0) 142.8 (5.6) (19.4) 143.9 (13.5)
Continuing and
discontinued
operations 1.9 142.8 1.3 (14.2) 143.9 (9.9)
Effect of
dilutive
securities
Options: - - - - - -
Continuing
operations
Options:
Continuing and
discontinued
operations - 8.1 - - - -
Diluted
Continuing
operations (8.0) 142.8 (5.6) (19.4) 143.9 (13.5)
Continuing and
discontinued
operations 1.9 150.9 1.3 (14.2) 143.9 (9.9)
--------------- ---- -------------- -------------- -------------- -------------- -------------- ---------------
Adjusted(1)
Continuing
operations
Basic (8.0) 142.8 (5.6) (19.4) 143.9 (13.5)
Other
exceptional
costs 4 4.7 - 3.3 2.0 - 1.4
Impairment of
goodwill 10 - - - 12.8 - 8.9
Amortisation of
acquired
intangibles 11 2.4 - 1.7 2.5 - 1.7
Share-based
payments 25 0.1 - 0.1 0.8 - 0.6
Loss on
disposal of
subsidiary 14 0.1 - 0.1 - - -
Tax effect of
above
adjustments 7 (1.2) - (0.9) (0.7) - (0.5)
Discontinued
operations
Basic 9.9 142.8 6.9 5.2 143.9 3.6
Profit on
disposal of
subsidiaries 14 (7.8) - (5.5) (0.1) - (0.1)
Other
exceptional
costs 4 0.1 - 0.1 0.5 - 0.4
Impairment of
goodwill 10 - - - 0.3 - 0.2
Amortisation of
acquired
intangibles 11 0.1 - 0.1 0.3 - 0.2
Tax effect of
above
adjustment 7 - - - (0.2) - (0.1)
--------------- ---- -------------- -------------- -------------- -------------- -------------- ---------------
Adjusted(1)
basic
Continuing
operations (1.9) 142.8 (1.3) (2.0) 143.9 (1.4)
Continuing and
discontinued
operations 0.4 142.8 0.3 4.0 143.9 2.8
Effect of
dilutive
securities
Options: - - - - - -
Continuing
operations
Options:
Continuing and
discontinued
operations - 8.1 - - 10.8 (0.2)
Adjusted(1)
diluted
Continuing
operations (1.9) 142.8 (1.3) (2.0) 143.9 (1.4)
Continuing and
discontinued
operations 0.4 150.9 0.3 4.0 154.7 2.6
--------------- ---- -------------- -------------- -------------- -------------- -------------- ---------------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
(2) See note 1 (a) for description of prior year restatement
Restated(2) Restated(2) Restated(2)
Adjusted Adjusted Statutory Adjusted Adjusted Statutory
Results(1) Items(1) Results Results(1) Items(1) Results
2019 2019 2019 2018 2018 2018
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ----------- --------- --------- ------------ ----------- -----------
Earnings / (loss) per share
attributable to owners
of the parent
Fully diluted from continuing
operations (1.3p) (4.3p) (5.6p) (1.4p) (12.1p) (13.5p)
Fully diluted from discontinued
operations 1.6p 5.3p 6.9p 4.0p (0.4p) 3.6p
-------------------------------- ----------- --------- --------- ------------ ----------- -----------
Fully diluted from continuing
and discontinued 0.3p 1.0p 1.3p 2.6p (12.5p) (9.9p)
-------------------------------- ----------- --------- --------- ------------ ----------- -----------
(1) Adjusted results exclude adjusting items, as detailed in
note 1 (b)
(2) See note 1 (a) for description of prior year restatement
In 2019 and 2018, there was no difference in the weighted
average number of shares used for the calculation of basic and
diluted loss per share for continuing operations as the effect of
all potentially dilutive shares outstanding was anti-dilutive.
10 Goodwill
Group
Cost Note GBPm
------------------------- ---- ------
At 1 January 2018 159.4
Additions in the year 0.1
At 31 December 2018 159.5
Disposal of subsidiaries 14 (48.4)
------------------------- ---- ------
At 31 December 2019 111.1
------------------------- ---- ------
Accumulated impairment
At 1 January 2018 83.8
Impairment for the year 13.1
------------------------- ---- ------
At 31 December 2018 96.9
Disposal of subsidiaries 14 (38.0)
At 31 December 2019 58.9
------------------------- ---- ------
Net book value
At 31 December 2019 52.2
------------------------- ---- ------
At 31 December 2018 62.6
------------------------- ---- ------
Additions in the prior year relate to the additional
consideration paid for the acquisition of MarketMakers in 2017
following the finalisation of contingent consideration paid during
the year.
In the prior year, the largest adjusting item of GBP12.8m
relates to the impairment of goodwill which primarily related to
events to be closed and other businesses within the Xeim portfolio.
Following a review of expected cash flows from the Financial
Services portfolio, the carrying value of its goodwill was impaired
by GBP0.3m.
Disposals in the current year relate to the disposal of Centaur
Financial Platforms Limited (net book value GBP4.8m), Centaur Media
Travel and Meeting Limited (net book value GBP5.6m), Centaur Human
Resources Limited (net book value GBPnil) and Centaur Engineering
Limited (net book value GBPnil). See note 14 for further
details.
Goodwill by segment
Each brand is deemed to be a Cash Generating Unit ('CGU'), being
the lowest level at which cash flows are separately identifiable.
Goodwill is attributed to individual CGUs and has historically been
reviewed at the operating segment level for the purposes of the
annual impairment review as this is the level at which management
monitors goodwill. In light of our simplification plan, Financial
Services and Other Professional segments have been disposed of and
the remaining segments are Xeim and The Lawyer:
Financial Services Other Professional
Xeim The Lawyer GBPm GBPm Total
Note GBPm GBPm GBPm
------------------------- ------ ------ ---------- ------------------ ------------------ ------
At 1 January 2018 48.9 16.0 5.1 5.6 75.6
Additions 0.1 - - - 0.1
Impairment charge (12.8) - (0.3) - (13.1)
------------------------- ------ ------ ---------- ------------------ ------------------ ------
At 31 December 2018 36.2 16.0 4.8 5.6 62.6
Disposal of subsidiaries 14 - - (4.8) (5.6) (10.4)
------------------------- ------ ------ ---------- ------------------ ------------------ ------
At 31 December 2019 36.2 16.0 - - 52.2
------------------------- ------ ------ ---------- ------------------ ------------------ ------
Impairment testing of goodwill and acquired intangible
assets
At 31 December 2019, goodwill and acquired intangible assets
(see note 11) were tested for impairment in accordance with IAS 36.
In assessing whether a write-down of goodwill and acquired
intangible assets is required, the carrying value of the segment is
compared with its recoverable amount. Recoverable amounts are
measured based on value-in-use ('VIU').
The Group estimates the VIU of its CGUs using a discounted cash
flow model, which adjusts the cash flows for risks associated with
the assets and discounts these using a pre-tax rate of 12.8% (2018:
11.3%). The discount rate used is consistent with the Group's
weighted average cost of capital and is used across all segments,
which are all based predominantly in the UK and considered to have
similar risks and rewards.
The key assumptions used in calculating VIU are revenue growth,
margin, adjusted EBITDA growth, discount rate and the terminal
growth rate. The Group has used formally approved forecasts for the
first three years of the calculation and applied a terminal growth
rate of 2.5% (2018: 2.5%). This timescale and the terminal growth
rate are both considered appropriate given the cyclical nature of
the Group's revenues.
The assumptions used in the calculations of VIU for each segment
have been derived based on a combination of past experience and
management's expectations of future growth rates in the business.
The forecasts have been prepared following a review of the business
where management have identified the key growth and focus areas
which will deliver the targets, and conversely which areas of the
business will be de-prioritised over that period. The forecasts
reflect the transformed Group which is more focussed and
streamlined in order to deliver higher margins and profits.
In the prior year, before impairment testing, goodwill of
GBP48.9m, GBP21.6m and GBP5.1m was allocated to the Xeim,
Professional, and Financial Services segments respectively. Prior
to a full impairment test, the goodwill of each segment was
reviewed. This led to an impairment in 2018 of GBP12.8m to be
recognised in Xeim primarily relates to events to be closed and
other businesses within the portfolio, and an impairment of GBP0.3m
in the Financial Services segment following a review of expected
cash flows.
In the current year, the goodwill and acquired intangible assets
carrying values of the two continuing segments, Xeim and The
Lawyer, have been compared with their recoverable amount in the
impairment tests. The forecast used in the calculation is the
Group's MAP22 plan which is discussed in the CEO's Review. The key
assumptions and variables in this plan are sensitised in isolation
and in combination. The main sensitivities applied to the key
drivers are outlined below.
Sensitivity analysis has been performed on the VIU calculations,
holding all other variables constant, to:
I. apply a 10% reduction to forecast adjusted EBITDA in each
year of the modelled cash flows. No impairment would occur in
either of the segments.
II. apply a 1% increase in discount rate from 12.8% to 13.8%. No
impairment would occur in either of the segments.
III. reduce the terminal value growth rate from 2.5% to 1.5%. No
impairment would occur in either of the segments.
A key sensitivity is EBITDA growth in both Xeim and The Lawyer,
which is driven by a combination of segment profit growth and the
Group's disclosed annualised overhead cost savings target of GBP5m.
As the Group has already achieved the run-rate savings for this
target by the end of December 2019, further sensitivities have been
performed only over the profitable revenue growth from Xeim and The
Lawyer:
Xeim - In the base case the CAGR of EBITDA for the forecast
period of 2019 to 2022 is 16%. VIU exceeds the carrying amount by
GBP29.2m. EBITDA CAGR would have to fall by 9% to 7% in order for
the VIU to equal the carrying amount.
The Lawyer - In the base case the CAGR of EBITDA for the
forecast period of 2019 to 2022 is 12%. VIU exceeds the carrying
amount by GBP13.8m. EBITDA CAGR would have to fall by 12% to nil in
order for the VIU to equal the carrying amount.
11 Other intangible assets
Separately
Brands and Customer acquired websites
Computer software* publishing rights* relationships* and content* Total
Note GBPm GBPm GBPm GBPm GBPm
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
Cost
At 1 January 2018 16.1 5.6 15.4 4.7 41.8
Additions -
separately acquired 1.8 - - - 1.8
Additions -
internally
generated 0.7 - - - 0.7
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
At 31 December 2018 18.6 5.6 15.4 4.7 44.3
Additions -
separately acquired 0.8 - - - 0.8
Additions -
internally
generated 0.4 - - - 0.4
Disposal of
subsidiaries 14 (1.2) (3.5) (2.4) (1.5) (8.6)
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
At 31 December 2019 18.6 2.1 13.0 3.2 36.9
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
Accumulated
amortisation
At 1 January 2018 9.5 1.9 7.2 4.6 23.2
Amortisation charge
for the year 2.9 0.4 2.2 0.1 5.6
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
At 31 December 2018 12.4 2.3 9.4 4.7 28.8
Amortisation charge
for the year 2.6 0.3 2.1 - 5.0
Impairment charge
for the year 0.3 - - - 0.3
Disposals of
subsidiaries 14 (1.1) (1.7) (1.9) (1.5) (6.2)
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
At 31 December 2019 14.2 0.9 9.6 3.2 27.9
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
Net book value at 31
December 2019 4.4 1.2 3.4 - 9.0
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
Net book value at 31
December 2018 6.2 3.3 6.0 - 15.5
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
Net book value at 1
January 2018 6.6 3.7 8.2 0.1 18.6
-------------------- ---- ------------------- ------------------- -------------------- ------------------- -----
* Amortisation on acquired intangible assets from business
combinations is presented as an adjusting item in note 4 (see note
1(b) for further information). Total amortisation of GBP2.5m (2018:
GBP2.8m) on such assets is all amortisation on assets in the asset
groups 'Brands and publishing rights', 'Customer relationships' and
'Separately acquired websites and content' of GBP2.4m (2018:
GBP2.7m) in addition to GBP0.1m (2018: GBP0.1m) of amortisation on
acquired intangible assets in the asset group 'Computer software'.
These total amounts have been split between continuing and
discontinued operations in note 4.
Amortisation and impairment of intangible assets is included in
net operating expenses in the statement of comprehensive
income.
The amortisation charge in continuing operations is GBP4.9m
(2018: GBP5.2m) and in discontinued operations is GBP0.1m (2018:
GBP0.4m). The impairment charge for the year is wholly in
continuing operations and relates to obsolete software.
Other intangible assets are tested annually for impairment in
accordance with IAS 36 at a segment level by comparing the carrying
value with its recoverable amount. Please see note 10 for further
details.
The Company has no intangible assets (2018: GBPnil).
12 Property, plant and equipment
Leasehold Fixtures Computer ROU assets - property
improvements and fittings equipment Total
Note GBPm GBPm GBPm GBPm
------------------------------------- ----- ------------- ------------- ---------- --------------------- -------
Cost
At 1 January 2018 2.2 0.6 1.3 - 4.1
Additions - separately acquired - 0.1 0.4 - 0.5
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
At 31 December 2018 2.2 0.7 1.7 - 4.6
Recognised on adoption of IFRS 16 (1 January
2019) - - - 2.3 2.3
Additions - separately acquired - - 0.2 3.2 3.4
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
At 31 December 2019 2.2 0.7 1.9 5.5 10.3
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
Accumulated depreciation
At 1 January 2018 1.3 0.3 0.8 - 2.4
Depreciation charge for the year 0.3 0.2 0.4 - 0.9
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
At 31 December 2018 1.6 0.5 1.2 - 3.3
Depreciation charge for the year 0.4 0.1 0.2 1.6 2.3
Impairment charge for the year 0.2 - - 0.2 0.4
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
At 31 December 2019 2.2 0.6 1.4 1.8 6.0
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
Net book value at 31 December 2019 - 0.1 0.5 3.7 4.3
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
Net book value at 31 December 2018 0.6 0.2 0.5 - 1.3
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
Net book value at 1 January 2018 0.9 0.3 0.5 - 1.7
-------------------------------------------- ------------- ------------- ---------- --------------------- -------
Depreciation and impairment of property, plant and equipment is
included in net operating expenses in the statement of
comprehensive income.
The depreciation and impairment charge for the year is wholly in
continuing operations. The impairment relates to leasehold
improvements in the Wells Street office which was vacated by
December 2019.
The Company has no property, plant and equipment at 31 December
2019 (2018: GBPnil).
13 Investments
Investments
in subsidiary
undertakings
Company GBPm
--------------------------------------------------- --------------
Cost
--------------------------------------------------- --------------
At 1 January 2018 146.2
Transfer from amounts receivable from subsidiaries 4.9
--------------------------------------------------- --------------
At 31 December 2018 and 31 December 2019 151.1
Accumulated impairment
At 1 January 2018 12.2
Impairment charge for the year 13.1
--------------------------------------------------- --------------
At 31 December 2018 25.3
Impairment charge for the year 35.7
--------------------------------------------------- --------------
At 31 December 2019 61.0
--------------------------------------------------- --------------
Net book value at 31 December 2019 90.1
--------------------------------------------------- --------------
Net book value at 31 December 2018 125.8
--------------------------------------------------- --------------
Net book value at 1 January 2018 134.0
--------------------------------------------------- --------------
Following an internal corporate restructure in the prior year,
GBP4.9m of intercompany balances due from subsidiaries of Centaur
Media plc were capitalised.
Impairment testing of the investment
In assessing whether an impairment of the investment is
required, the carrying value of the investment is compared with its
recoverable amount. The recoverable amount is measured based on
value-in-use ('VIU'). As outlined in the tables below the carrying
value of the investment represents the Company's direct ownership
of Centaur Communications Limited ('CCL'). CCL in turn directly or
indirectly controls the rest of the Group's subsidiaries.
Therefore, the VIU of the Company's investment in CCL is supported
by the operations of the entire Group.
In the prior year the Company impaired its investment following
an impairment test which identified the VIU no longer supported the
carrying value of the investment. After this impairment at 31
December 2018, the carrying value of the investment was fully
supported by the future cash flows of all of the subsidiaries owned
by the Group at that date.
In the current year, due to the disposals of the Group's
subsidiaries noted below, the Group's cash flows and therefore its
VIU was reduced. This was identified as an indication of impairment
of the Company's investment carrying value and a full impairment
assessment was carried out. An impairment of GBP35.7m was
identified and recognised in the Company's statement of
comprehensive income. The remaining balance is supported by the
underlying trade of the Group.
The Group estimates the VIU using a discounted cash flow model,
which adjusts the cash flows for risks associated with the assets
and discounts these using a pre-tax rate of 12.8% (2018: 11.3%).
The discount rate used is consistent with the Group's weighted
average cost of capital.
The key assumptions used in calculating VIU are revenue growth,
margin, adjusted EBITDA growth, discount rate and the terminal
growth rate. The Group has used formally approved forecasts for the
first three years of the calculation and applied a terminal growth
rate of 2.5% (2018: 2.5%). This timescale and the terminal growth
rate are both considered appropriate given the cyclical nature of
the Group's revenues.
The assumptions used in the calculations of VIU have been
derived based on a combination of past experience and management's
expectations of future growth rates in the business. The forecasts
have been prepared following a review of the business where
management have identified the key growth and focus areas which
will deliver the targets, and conversely which areas of the
business will be de-prioritised over that period. The forecasts
reflect the transformed Group which is more focussed and
streamlined in order to deliver higher margins and profits.
Sensitivities are applied to each of the key assumptions and
variables in isolation and in combination, in line with those
sensitivities applied for goodwill impairment testing as outlined
in note 10.
EBITDA growth is driven by a combination of profit growth and
the Group's disclosed annualised overhead cost savings target of
GBP5m. As the Group has already achieved the run-rate savings for
this target by the end of December 2019, further sensitivities have
been performed only over the profitable revenue growth from Xeim
and The Lawyer. In the forecast applied to derive the VIU which had
resulted in the impairment noted above, EBITDA CAGR for the Group
is 11%. If the EBITDA CAGR for the Group were to fall by 5% to 6%
then the additional impairment indicated would be GBP22.6m.
The Group disposed of its interest in the following subsidiaries
during the year:
Proportion of ordinary
shares and voting
Name rights held (%) Principal activities Country of incorporation Date of disposal
----------------------- ----------------------- ------------------------ ------------------------ ----------------
Centaur Engineering 100 Other publishing United Kingdom 31 May 2019
Limited activities
Centaur Financial 100 Research data and United Kingdom 31 March 2019
Platforms Limited analysis
Centaur Human Resources 100 Events and information United Kingdom 30 April 2019
Limited services
Centaur Media Travel 100 Other publishing United Kingdom 30 April 2019
and Meetings Limited activities
Venture Business 100 Research data and United Kingdom 13 May 2019
Research Limited analysis
----------------------- ----------------------- ------------------------ ------------------------ ----------------
The net profit on disposals of these subsidiaries was GBP7.7m
(GBP0.1m loss on the disposal of VBR and GBP7.8m profit on the
disposal of the other four subsidiaries). See note 14 for further
details.
At 31 December 2019, the Group has control over the following
subsidiaries:
Proportion
of ordinary
shares and
voting rights Country of
Name held (%) Principal activities incorporation
--------------------------- -------------- ------------------------------------ --------------
Centaur Communications 100 Holding company and agency services United Kingdom
Limited (1)
Centaur Media USA Inc.(2) 100 Digital information, training and United States
events
Centaur Newco 2018 Limited 100 Media representation services United Kingdom
Chiron Communications 100 Digital information, training and United Kingdom
Limited events
E-consultancy Asia Pacific 100 Dormant Singapore
Pty Limited (3)
E-consultancy Australia 100 Digital information, training and Australia
Pty Limited (4) events
E-consultancy LLC (5) 100 Digital information, training and United States
events
E-consultancy.com Limited 100 Digital information, training and United Kingdom
events
MarketMakers Incorporated 100 Telemarketing and Research United Kingdom
Limited (6)
Mayfield Publishing Limited 100 Investment company United Kingdom
Pro-talk Ltd 100 Digital Publishing United Kingdom
Taxbriefs Holdings Limited 100 Holding company United Kingdom
Taxbriefs Limited 100 Digital and print publishing United Kingdom
Thelawyer.com Limited 100 Publishing of consumer and business United Kingdom
journals and periodicals
Xeim Limited 100 Digital information services United Kingdom
Your Business Magazine 100 Investment company United Kingdom
Limited
--------------------------- -------------- ------------------------------------ --------------
1 Directly owned by Centaur Media Plc
2 Registered address is 2711 Centerville Road, Suite 400
Wilmington, DE19808, USA. Functional currency is USD.
3 Registered address is 30 Cecil Street, #19-08 Prudential
Tower, Singapore 049712. Functional currency is USD.
4 Registered address is Level 17, 383 Kent Street, Sydney, NSW,
2000, Australia. Functional currency is AUD.
5 Registered address is 41 East, 11 Street, 11FI, New York, NY
10003, USA. Functional currency is USD.
6 Registered address is 1000 Lakeside North Harbour Western
Road, Portsmouth, Hampshire, PO6 3EN
The registered address of all subsidiary companies, with the
exception of those identified above, changed from 79 Wells Street,
London, W1T 3QN, United Kingdom to Floor M, 10 York Road, London,
SE1 7ND, United Kingdom on 2 December 2019. The functional currency
of all subsidiaries is GBP except for those identified above. The
consolidated financial information incorporates the financial
information of all entities controlled by the Company at 31
December 2019.
14 Disposal of subsidiaries
In the current year the Group disposed of the following
subsidiaries:
- Centaur Financial Platforms Limited ('FIN') on 31 March 2019;
- Centaur Media Travel and Meetings Limited ('T&M') on 30 April 2019;
- Centaur Human Resources Limited ('HR') on 30 April 2019; and
- Centaur Engineering Limited ('ENG') on 31 May 2019.
The disposals were effected in line with the Group's strategy to
simplify its structure, to improve operational execution and to
focus attention on leading brands. All disposals were executed by
way of sale of 100% of the equity shares. The results of these
subsidiaries have been included in discontinued operations as
detailed in note 8.
The net assets of the subsidiaries at the date of disposal were
as follows:
FIN T&M HR ENG Total
31 March 2019 30 April 2019 30 April 2019 31 May 2019
GBPm GBPm GBPm GBPm GBPm
-----------------------------------------------------
Goodwill 4.8 5.6 - - 10.4
Other intangible assets 1.1 - 1.1 - 2.2
Inventories - 1.2 0.1 0.4 1.7
Trade and other receivables 1.0 1.1 0.4 0.2 2.7
Intercompany 1.3 2.2 0.7 - 4.2
Cash and cash equivalents 0.6 0.3 0.4 0.4 1.7
Trade and other payables (0.8) (0.6) (0.4) (0.1) (1.9)
Deferred income (1.3) (2.9) (1.0) (1.2) (6.4)
Current tax liability (0.1) (0.3) - - (0.4)
----------------------------------------------------- ------------- ------------- ------------- ----------- -----
Net assets/(liabilities) disposed attributable to
Shareholders of the Company 6.6 6.6 1.3 (0.3) 14.2
Directly attributable costs of disposal 0.8 0.6 0.6 0.6 2.6
(Loss) / gain on disposal (0.8) 3.0 3.8 1.8 7.8
----------------------------------------------------- ------------- ------------- ------------- ----------- -----
Fair value of consideration 6.6 10.2 5.7 2.1 24.6
Satisfied by:
Cash and cash equivalents 5.3 8.0 5.0 2.1 20.4
Settlement of intercompany balances 1.3 2.2 0.7 - 4.2
----------------------------------------------------- ------------- ------------- ------------- ----------- -----
6.6 10.2 5.7 2.1 24.6
----------------------------------------------------- ------------- ------------- ------------- ----------- -----
The net cash flow arising on the disposals was as follows:
FIN T&M HR ENG Total
31 March 2019 30 April 2019 30 April 2019 31 May 2019
GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------
Net cash flow arising on disposal:
Consideration received in cash and cash equivalents 5.3 8.0 5.0 2.1 20.4
Less:
Directly attributable costs of disposal (0.6) (0.6) (0.6) (0.5) (2.3)
Cash and cash equivalents disposed of (0.6) (0.3) (0.4) (0.4) (1.7)
4.1 7.1 4.0 1.2 16.4
---------------------------------------------------- ------------- ------------- ------------- ----------- -----
In addition to the above named subsidiaries, the Group disposed
of its Venture Business Research Limited ('VBR') subsidiary on 13
May 2019 to an employee of VBR for GBP1 settled by cash and GBP31k
settlement of intercompany balances. Net assets of GBP0.2m,
consisting wholly of other intangible assets were disposed of,
resulting in a loss of GBP0.1m.
The loss on disposal, as well as the operational results of VBR
have not been included in discontinued operations as it does not
represent a separate major line of business and these have
therefore been included in continuing operations.
In the prior year GBP0.1m profit on disposal arose in relation
to the 2017 disposal of the Group's Home Interest segment ('HI')
following the agreement of final completion accounts.
15 Deferred tax
The movement on the deferred tax account is shown below:
Accelerated Other
capital temporary Tax
allowances differences losses Total
GBPm GBPm GBPm GBPm
--------------------------------------------- ----------- ------------ ------- -----
Net asset / (liability) at 1 January 2018 0.5 (1.4) 0.2 (0.7)
Adjustments in respect of prior period 0.1 - - 0.1
Recognised in the statement of comprehensive
income 0.1 0.9 (0.1) 0.9
--------------------------------------------- ----------- ------------ ------- -----
Net asset / (liability) at 31 December 2018 0.7 (0.5) 0.1 0.3
Recognised in the statement of comprehensive
income (0.1) 0.1 0.7 0.7
Net asset / (liability) at 31 December 2019 0.6 (0.4) 0.8 1.0
--------------------------------------------- ----------- ------------ ------- -----
Deferred tax assets and liabilities are only offset where there
is a legally enforceable right of offset and there is an intention
to settle the balances net.
2019 2018
Group Group
GBPm GBPm
----------------------------------------- ------ ------
Deferred tax assets within one year 1.4 0.8
Deferred tax liabilities within one year (0.4) (0.5)
----------------------------------------- ------ ------
Total 1.0 0.3
----------------------------------------- ------ ------
At the statement of financial position date, the Group has
unused tax losses of GBP4.2m (2018: GBP1.2m) available for offset
against future profits. A deferred tax asset of GBP0.8m (2018:
GBP0.1m) has been recognised in respect of GBP4.2m (2018: GBP0.6m)
of such tax losses. Deferred tax assets and liabilities are
expected to be materially utilised after 12 months.
16 Inventories
2019 2018
Group Group
GBPm GBPm
----------------- ------ ------
Work in progress - 1.4
----------------- ------ ------
Work in progress comprises costs incurred relating to
publications and exhibitions prior to the publication date or the
date of the event. Inventories recognised as an expense during the
year amounted to GBP0.9m (2018: GBP1.1m). These were included in
cost of sales and employee benefits expense.
The Company had no inventory at 31 December 2019 (2018:
GBPnil).
There are no provision amounts in respect of inventories (2018:
GBPnil) and there were no write-downs of inventory in the year
(2018: GBPnil).
17 Trade and other receivables
Restated(2)
2019 2018 2019 2018
Group Group Company Company
Note GBPm GBPm GBPm GBPm
--------------------------------------- ---- ------ ----------- -------- --------
Amounts falling due within one year
Trade receivables 7.9 11.0 - -
Less: expected credit loss 28 (1.1) (1.2) - -
--------------------------------------- ---- ------ ----------- -------- --------
Trade receivables - net 6.8 9.8 - -
Receivables from subsidiaries - - - 2.0
Receivable from Employee Benefit Trust - - 0.6 0.4
Other receivables 2.3 1.7 0.3 0.4
Prepayments 1.3 1.7 0.1 0.1
Accrued income 0.4 0.5 - -
Social security and other taxes - - - 0.2
--------------------------------------- ---- ------ ----------- -------- --------
10.8 13.7 1.0 3.1
--------------------------------------- ---- ------ ----------- -------- --------
(2) See note 1 (a) for description of prior year restatement
Receivables from subsidiaries are unsecured, have no fixed due
date and bear interest at an annual rate of 2.53% (2018:
2.67%).
Trade receivables are accounted for under IFRS 9 using the
expected credit loss model, recognised initially at fair value and
subsequently at amortised cost less any allowance for expected
lifetime credit losses. For further detail refer to note
1(s)(ii).
Other receivables includes GBP1.5m in relation to the lease
incentive receivable on exit of the Wells Street property in 2019
and GBP0.3m in relation to a deposit on the Waterloo property lease
which is fully refundable at the end of the lease term.
18 Cash and cash equivalents
2019 2018
Group Group
GBPm GBPm
------------------------- ------ ------
Cash at bank and in hand 9.3 0.1
------------------------- ------ ------
The Company had no cash and cash equivalents at 31 December 2019
(2018: GBPnil).
19 Trade and other payables
Restated(2)
2019 2018 2019 2018
Group Group Company Company
GBPm GBPm GBPm GBPm
-------------------------------- ------ ----------- -------- --------
Trade payables 1.1 2.7 - -
Payables to subsidiaries - - 62.0 53.3
Social security and other taxes 1.0 2.1 - -
Other payables 1.7 1.6 - -
Accruals 8.7 6.8 1.4 0.5
-------------------------------- ------ ----------- -------- --------
12.5 13.2 63.4 53.8
-------------------------------- ------ ----------- -------- --------
(2) See note 1 (a) for description of prior year restatement
Payables to subsidiaries are unsecured, have no fixed date of
repayment and bear interest at an annual rate of 2.53% (2018:
2.67%).
The Directors consider that the carrying amount of the trade
payables approximates their fair value.
20 Leases
This note explains the impact of the adoption of IFRS 16 Leases
on the Group's financial information and discloses the new
accounting policies that have been applied from 1 January 2019.
The Group has adopted IFRS 16 retrospectively from 1 January
2019 but has not restated comparatives for the 2018 period, as
permitted under the specific transitional provisions in the
standard. The reclassifications and adjustments arising from the
new leasing rules are therefore recognised in the opening balance
sheet on 1 January 2019.
(a) The Group's leasing activities and how these are accounted for
The Group leases office spaces. Prior to the adoption of IFRS 16
these leases were classified as operating leases. Payments made
under operating leases (net of any incentives received from the
lessor) were charged to the profit or loss on a straight-line basis
over the period of lease.
From 1 January 2019 relevant leases (i.e. excluding those to
which a practical expedient has been applied) are recognised as a
lease liability and a corresponding right-of-use ('ROU') asset at
the date at which the leased asset is available for use by the
Group.
Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to profit or loss over
the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period.
The ROU asset is depreciated over the shorter of the asset's useful
life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include the
net present value ('NPV') of future lease payments discounted using
the interest rate implicit in the lease. If that rate cannot be
determined, the lessee's incremental borrowing rate ('IBR') is
used, being the rate that the lessee would have to pay to borrow
the funds necessary to obtain an asset of similar value in a
similar economic environment with similar terms and conditions.
Adjustments are made to the NPV for the initial measurement of
the ROU asset. These adjustments are for any rental accrual or
prepayments on the balance sheet at 31 December 2018 relating to
the asset that arose under the previous accounting standard IAS 17.
A further adjustment has been made in relation to a lease incentive
receivable on the exit of a London property that had been fully
vacated by 31 December 2019. The lease incentive receivable is in
other receivables.
All ROU assets currently held by the Group relate to property
leases. They are presented on the consolidated statement of
financial positions within property, plant and equipment and are
split out from other fixed assets in note 12. Lease liabilities are
presented as a separate line on the face of the consolidated
statement of financial position, split between current and
non-current.
(b) Adjustments recognised on adoption of IFRS 16 at 1 January 2019
On adoption of IFRS 16, the Group recognised lease liabilities
in relation to leases which had previously been classified as
'operating leases' under the principles of IAS 17 Leases. These
liabilities were measured at the present value of the remaining
lease payments, discounted using the IBR as of 1 January 2019. The
weighted average lessee's IBR applied to the lease liabilities on 1
January 2019 was 3.8%.
The Group did not have any material leases previously classified
as finance leases.
Lease liabilities
1 January
2019
GBPm
--------------------------------------------------------------------- ---------
Operating lease commitments disclosed as at 31 December 2018 7.3
Less operating leases commitments related to contracts with future
commencement dates (3.4)
--------------------------------------------------------------------- ---------
Operating lease commitments transitioning to IFRS 16 as at 1 January
2019 3.9
--------------------------------------------------------------------- ---------
Impact of discounting using the lessee's IBR at the date of initial
application (0.6)
--------------------------------------------------------------------- ---------
Lease liabilities recognised as at 1 January 2019 3.3
--------------------------------------------------------------------- ---------
Current 2.3
Non-current 1.0
--------------------------------------------------------------------- ---------
As at 1 January 2019 3.3
--------------------------------------------------------------------- ---------
Right-of-use assets
The recognised ROU assets were measured at an amount equal to
that of the lease liabilities at 1 January 2019 and adjusted for
items as outlined above.
1 January
2019
GBPm
---------------------- ---------
ROU assets - property 2.3
---------------------- ---------
Additional information
As detailed in the table above, GBP3.4m of operating lease
commitments in relation to a contract with a commencement date of 1
October 2019 were disclosed as at 31 December 2018. The lease
liability and corresponding ROU asset was recognised as an addition
during the year on commencement, see section (b) below. The
commitments under this contract discounted at the IBR gave rise to
a lease liability and corresponding ROU asset of GBP3.2m,
recognised on 1 October 2019.
The change in accounting policy did not affect any other items
on the consolidated statement of financial position at 1 January
2019 other than those discussed in this note.
The Group derived income from sub-leasing one of the properties
during the year. This has not been included in the value of the ROU
asset in accordance with the short-term lease practical expedient
permitted by IFRS 16. The rental income generated in the period of
GBP0.8m is presented in the consolidated statement of comprehensive
income in 'other operating income' and is recognised on a
straight-line basis. This source of income ceased in the current
year, and no rental income is expected in 2020.
Each lease arrangement has been accounted for over its lease
term as outlined in the contract. Where options to extend or
terminate exist in these contracts, the recognition of the lease
liabilities and ROU assets represent the Directors understanding of
likely future cash flows under these contracts. The assets and
liabilities will continue to be reviewed and will be revalued where
a change in the future cash flows is indicated.
(c) As at 31 December 2019
The lease liability and ROU assets presented in the consolidated
statement of financial position as at 31 December 2019 were as
follows:
Lease liabilities
31 December
2019
GBPm
---------------------------------------------------- -----------
Recognised on adoption of IFRS 16 at 1 January 2019 3.3
Additions 3.2
Interest expense 0.1
Cash outflow (2.3)
---------------------------------------------------- -----------
As at 31 December 2019 4.3
---------------------------------------------------- -----------
Current 2.1
Non-current 2.2
---------------------------------------------------- -----------
As at 31 December 2019 4.3
---------------------------------------------------- -----------
ROU assets
31 December
2019
GBPm
---------------------------------------------------- -----------
Cost
Recognised on adoption of IFRS 16 at 1 January 2019 2.3
Additions 3.2
---------------------------------------------------- -----------
As at 31 December 2019 5.5
---------------------------------------------------- -----------
Accumulated depreciation
Depreciation charge for the period 1.6
Impairment charge for the period 0.2
---------------------------------------------------- -----------
As at 31 December 2019 1.8
---------------------------------------------------- -----------
Recognised on adoption of IFRS 16 at 1 January 2019 2.3
As at 31 December 2019 3.7
---------------------------------------------------- -----------
21 Deferred income
2019 2018
Group Group
GBPm GBPm
---------------- ------ ------
Deferred income 8.7 15.0
---------------- ------ ------
Deferred income arises on contracts with customers where revenue
recognition criteria has not yet been met. See note 1 (e) for
further details.
22 Current tax assets
2019 2018
Group Group
GBPm GBPm
---------------------------- ------ ------
Corporation tax receivables 0.1 0.2
---------------------------- ------ ------
The Company had no corporation tax receivables or payables at 31
December 2019 (2018: GBPnil).
23 Provisions
Deferred
consideration Other Total
GBPm GBPm GBPm
--------------------- -------------- ----- -----
Group
At 1 January 2018 1.8 0.1 1.9
Acquisition related 0.1 - 0.1
Utilised in the year (1.8) - (1.8)
--------------------- -------------- ----- -----
At 31 December 2018 0.1 0.1 0.2
--------------------- -------------- ----- -----
Utilised in the year (0.1) - (0.1)
--------------------- -------------- ----- -----
At 31 December 2019 - 0.1 0.1
--------------------- -------------- ----- -----
Current - - -
Non-current - 0.1 0.1
--------------------- -------------- ----- -----
Total - 0.1 0.1
--------------------- -------------- ----- -----
Deferred consideration
Deferred consideration at 1 January 2018 related to the
acquisition of MarketMakers. An additional amount of GBP0.1m
contingent consideration was provided for during 2018 due to
MarketMakers achieving a higher EBITDA than expected. GBP1.8m was
settled in cash during 2018. The remaining GBP0.1m was settled in
cash during the current year.
Other
The other provision relates to the dilapidation provision which
was acquired on the acquisition of MarketMakers in relation to the
building leased by the company in Portsmouth.
All amounts represent the Directors' best estimate of the
balance to be paid at the statement of financial position date.
24 Equity
Nominal
value Number
Ordinary shares of 10p each GBPm of shares
--------------------------------------------------------- ------- -----------
Authorised share capital - Group and Company
At 1 January 2018, 31 December 2018 and 31 December 2019 20.0 200,000,000
--------------------------------------------------------- ------- -----------
Issued and fully paid share capital - Group and Company
At 1 January 2018, 31 December 2018 and 31 December 2019 15.1 151,410,226
--------------------------------------------------------- ------- -----------
Deferred shares reserve
The deferred shares reserve represents 800,000 (2018: 800,000)
deferred shares of 10p each, which carry restricted voting rights
and have no right to receive a dividend payment in respect of any
financial year.
Reserve for shares to be issued
The reserve for shares to be issued is in respect of
equity-settled share-based compensation plans. The changes to the
reserve for shares to be issued represent the total charges for the
year relating to equity-settled share-based payment transactions
with employees as accounted for under IFRS 2.
Own shares reserve
The own shares reserve represents the value of shares held as
treasury shares and in an employee benefit trust. At 31 December
2019, 6,964,613 (2018: 6,964,613) 10p ordinary shares are held in
treasury and 1,573,134 (2018: 857,991) 10p ordinary shares are held
in an employee benefit trust.
During 2019, the employee benefit trust purchased 1,247,205
(2018: 766,800) ordinary shares in order to meet future obligations
arising from share-based rewards to employees. The shares were
acquired at an average price of 51.7p per share (2018: 45.9p), with
prices ranging from 45.6p to 54p. The total cost of GBP0.6m (2018:
GBP0.4m) has been recognised in other reserves in the own shares
reserve in equity.
25 Share-based payments
The Group's share-based payment expense for the year by
scheme:
2019 2018
GBPm GBPm
Equity-settled plans
LTIP 0.1 0.8
------------------------------------------------------------- ----- -----
Total equity-settled incentive plans and share based payment
expense 0.1 0.8
------------------------------------------------------------- ----- -----
The Group's share-based payment schemes upon vesting are
equity-settled.
The prior year charge of GBP0.8m includes GBP0.1m in relation to
national insurance payable on equity settled share-based schemes.
This was included in liabilities as it was to be settled in
cash.
The current year charge of GBP0.1m (2018: GBP0.8m) includes an
immaterial amount of national insurance (2018: GBP0.1m) payable on
equity settled share-based schemes and is included in liabilities
as it is to be settled in cash.
Share based payments in 2019 of GBP0.1m (2018: GBP0.8m) have
decreased significantly due to the overall reduction in the number
of share options from 10.6m to 7.6m. This is due to forfeitures and
lapses of 0.5m and 5.6m share options respectively resulting in a
reversal of charges previously recognised since granted, mainly in
2016 and 2017. This was offset by an expense recognised for 3.6m
new share options granted during the year and an additional charge
recognised on truing up the expense for 1.6m share options that
vested during the year.
Long-Term Incentive Plan
The Group operates a Long-Term Incentive Plan ('LTIP') for
Executive Directors and selected senior management. This is an
existing incentive policy and was approved by shareholders at the
2016 AGM. The share awards are valued at date of grant and the
consolidated statement of comprehensive income is charged over the
vesting period, taking into account the number of shares expected
to vest. Full details of how the scheme operates are included in
the Remuneration Report. These awards were priced using the
following models and inputs:
LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016
---------- ---------- ---------- ---------- ---------- -------------
Grant date 03.10.2019 25.10.2019 25.07.2019 25.07.2018 6.04.2018 6.04.2018
Share price at grant date 41.50 32.50 46.00 44.40 50.20 50.20
Fair value 22.77 16.25 23.00 22.20 28.65 25.10
Exercise date 02.10.2022 5.04.2022 5.04.2022 24.07.2019 06.04.21 06.04.21
Exercise price (p) GBPnil GBPnil GBPnil GBPnil GBPnil GBPnil
---------- ---------- ---------- ---------- ---------- -------------
Number of awards
Balance at 1 January 2019 - - - 53,590 1,246,879 2,104,890
Granted during the year 995,259 128,133 2,482,366 - - -
Forfeited during the year - - (245,726) - - (141,699)
Exercised during the year - - - (53,590) - -
Lapsed during the year - - - - - -
---------- ---------- ---------- ---------- ---------- -------------
Balance at 31 December
2019 995,259 128,133 2,236,640 - 1,246,879 1,963,191
---------- ---------- ---------- ---------- ---------- -------------
Exercisable at 31 December
2019 - - - - - -
---------- ---------- ---------- ---------- ---------- -------------
Average share price at
date of exercise (p) - - - 51.25 - -
---------- ---------- ---------- ---------- ---------- -------------
Balance at 1 January 2018 - - - - - -
Granted during the year - - - 53,590 1,246,879 2,145,375
Forfeited during the year - - - - - (40,485)
Exercised during the year - - - - - -
Lapsed during the year - - - - - -
---------- ---------- ---------- ---------- ---------- -------------
Balance at 31 December
2018 - - - 53,590 1,246,879 2,104,890
---------- ---------- ---------- ---------- ---------- -------------
Exercisable at 31 December
2018 - - - - - -
---------- ---------- ---------- ---------- ---------- -------------
Average share price at
date of exercise (p) - - - - - -
---------- ---------- ---------- ---------- ---------- -------------
Grant date 03.10.2019 25.10.2019 25.07.2019 25.07.2018 6.04.2018 6.04.2018
---------- ---------- ---------- ---------- ---------- -------------
Expected volatility (%) 40.0 - - - 43.5 43.5
Expected dividend yield
(%) - - - - - 6.47
Risk free interest rate
(%) 0.34 - - - 0.86 0.86
Valuation of model used Stochastic * * * Stochastic Black-Scholes
---------- ---------- ---------- ---------- ---------- -------------
*Schemes granted on the 25 October 2019, 25 July 2019 and 25
July 2018 were nil-cost options with non-market based performance
conditions. These schemes were valued based on the estimated
vesting value of the non-market based conditions and expected
forfeiture rates.
LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2006
---------- ----------- ---------- ---------- -----------
Grant date 24.04.17 07.04.17 04.10.16 22.09.16 30.03.16
Share price at grant date 45.75 40.75 44.00 41.00 49.00
Fair value 24.46 21.08 18.04 16.81 20.92
Exercise date 24.04.20 07.04.20 04.10.19 22.09.19 30.03.19
Exercise price (p) GBPnil GBPnil GBPnil GBPnil GBPnil
---------- ----------- ---------- ---------- -----------
Number of awards
Balance at 1 January 2019 1,351,528 2,958,786 573,395 366,667 1,983,489
Granted during the year - - - -
Forfeited during the year - (92,035) - - -
Exercised during the year - (478,472) - - -
Lapsed during the year (675,764) (2,006,722) (573,395) (366,667) (1,983,489)
---------- ----------- ---------- ---------- -----------
Balance at 31 December
2019 675,764 381,557 - - -
---------- ----------- ---------- ---------- -----------
Exercisable at 31 December
2019 675,764 381,557 - - -
---------- ----------- ---------- ---------- -----------
Average share price at
date of exercise (p) - 39.49 - - -
---------- ----------- ---------- ---------- -----------
Balance at 1 January 2018 1,351,528 3,589,405 573,395 366,667 2,059,390
Granted during the year - - - - -
Forfeited during the year - (630,619) - - (75,901)
Exercised during the year - - - - -
Lapsed during the year - - - - -
---------- ----------- ---------- ---------- -----------
Balance at 31 December
2018 1,351,528 2,958,786 573,395 366,667 1,983,489
---------- ----------- ---------- ---------- -----------
Exercisable at 31 December
2018 - - - - -
---------- ----------- ---------- ---------- -----------
Average share price at
date of exercise (p) - - - - -
---------- ----------- ---------- ---------- -----------
Grant date 24.04.17 07.04.17 04.10.16 22.09.16 30.03.16
---------- ----------- ---------- ---------- -----------
Expected volatility (%) 45.4 45.4 43.8 43.8 31.8
Expected dividend yield
(%) - - - - -
Risk free interest rate
(%) 0.12 0.12 0.06 0.06 0.48
Valuation of model used Stochastic Stochastic Stochastic Stochastic Stochastic
---------- ----------- ---------- ---------- -----------
The shares outstanding at 31 December 2019 had a weighted
average exercise price of GBPnil (2018: GBPnil) and a weighted
remaining life of 1.6 years (2018: 1.4 years).
Shares outstanding and exercisable at the end of the year had an
initial expiry date of 25 March 2020, which has been extended to 30
June 2020.
The two schemes granted in 2017 were assessed for early vesting
following the sale of four business units resulting in a
significant change in the business. As a result the options related
to the TSR performance conditions vested and options related to all
other performance conditions lapsed.
Senior Executive Long-Term Incentive Plan ('SELTIP')
The Centaur Media Plc 2010 Senior Executive Long-Term Incentive
Plan (the 'SELTIP') was introduced during 2011 and was approved by
shareholders at the 2010 AGM. This is not an HMRC approved scheme
and vests over a three-year period with service and performance
conditions. Awards were granted under this scheme in 2011 for no
consideration and no exercise price. This scheme has closed to new
awards.
Awards of bonus units were made in 2013 as summarised in the
following table:
Number
of shares
Total awarded
Financial Threshold PBTA Profit SELTIP bonus Bonus pool in
year profit achieved growth contribution pool allocated* total**
---------- ---------- ---------- -------- -------------- ------- ----------- ----------
2013 GBP8.0m GBP8.6m GBP0.6m 30% GBP0.1m GBP0.1m 118,851
---------- ---------- ---------- -------- -------------- ------- ----------- ----------
* The Remuneration Committee did not allocate the entire bonus pool in 2013.
** Awards were only made to participants with continuing employment.
Senior Executive Long-Term Incentive Plan
These awards were priced using the following models and
inputs:
SELTIP
2013
-------------------------------------------- --------
Grant date 15.09.11
Share price at grant date 33.88
Fair value 23.76
Exercise date 17.09.14
Exercise price (p) GBPnil
Number of awards
Balance at 1 January 2019 6,862
Granted during the year -
Forfeited during the year -
Exercised during the year -
-------------------------------------------- --------
Balance at 31 December 2019 6,862
-------------------------------------------- --------
Exercisable at 31 December 2019 6,862
-------------------------------------------- --------
Average share price at date of exercise (p) -
-------------------------------------------- --------
Balance at 1 January 2018 6,862
Granted during the period -
Forfeited during the period -
Exercised during the period -
-------------------------------------------- --------
Balance at 31 December 2018 6,862
-------------------------------------------- --------
Exercisable at 31 December 2018 6,862
-------------------------------------------- --------
Average share price at date of exercise (p) -
-------------------------------------------- --------
The shares outstanding at 31 December 2019 had a weighted
average exercise price of GBPnil (2018: GBPnil) and a weighted
remaining life of 2.7 years (2018: 3.7 years).
These awards were priced using the following models and
inputs:
SELTIP 2013
-------------
Grant date 15.09.11
Expected volatility (%) 54.00
Expected dividend yield (%) 5.26
Risk free interest rate (%) 0.57
Valuation of model used Black-Scholes
Share Incentive Plan
The Group has a Share Incentive Plan, which is a HRMC approved
Tax-Advantaged plan, which provides employees with the opportunity
to purchase shares in the Company. This plan is open to all
employees who have been employed by the Group for more than 12
months. Employees may invest up to GBP1,800 per annum (or 10% of
their salary if less) in ordinary shares in the Company, which are
held in trust. The shares are purchased in open market and are held
in trust for each employee. The shares can be withdrawn with tax
paid at any time, or tax-free after five years. The Group matches
the contribution with a ratio of one share for every two purchased.
Other than continuing employment, there are no other performance
conditions attached to the plan.
The Executive Directors are eligible to participate in the Share
Incentive Plan, as are all employees of the Group.
2019 2018
Group Group
-------------------------------------- ------ ------
Number of outstanding matching shares 48,071 57,298
--------------------------------------- ------ ------
26 Dividends
2019 2018
GBPm GBPm
--------------------------------------------------------- ---- ----
Equity dividends
Final dividend for 2017: 1.5p per 10p ordinary share - 2.2
Interim dividend for 2018: 1.5p per 10p ordinary share - 2.1
Final dividend for 2018: 1.5p per 10p ordinary share 2.1 -
Interim dividend for 2019: ordinary dividend of 1.5p and
special dividend of 2.0p per 10p ordinary share 5.0 -
--------------------------------------------------------- ---- ----
7.1 4.3
--------------------------------------------------------- ---- ----
In the current year the Board announced a new progressive
dividend policy. An interim dividend payment of GBP5.0m was paid in
October 2019. This comprised a GBP2.1m ordinary dividend at 1.5p
per share and a GBP2.9m special dividend at 2.0p per share.
For the year ended 31 December 2019 the Board is recommending a
final dividend payment of GBP0.7m at 0.5p per share. The dividend
proposed by the Directors, subject to shareholder approval at the
Annual General Meeting, will be paid on 29 May 2020 to all
shareholders on the Register of Members on 11 May 2020.
The interim and final dividends of GBP5.0m and GBP0.7m together
result in a total dividend pertaining to 2019 of GBP5.7m.
27 Notes to the cash flow statement
Reconciliation of (loss)/profit for the year to net cash inflow
from operating activities:
2019 2018 2019 2018
Group Group Company Company
Note GBPm GBPm GBPm GBPm
---------------------------------------------- ---- ------ ------ -------- --------
Profit/(loss) for the year 1.9 (14.2) (40.2) (13.7)
Adjustments for:
Tax 7 (0.1) 0.1 1.4 (3.2)
Interest expense 6 0.3 0.2 1.7 1.6
Depreciation 12 2.3 0.9 - -
Impairment of property, plant and
equipment 12 0.4 - - -
Amortisation of intangible assets 11 5.0 5.6 - -
Impairment of intangible assets 11 0.3 - -
Impairment of goodwill 10 - 13.1 - -
Loss on disposal of subsidiary 14 0.1 - - -
Gain on disposal of subsidiaries 14 (7.8) (0.1) - -
Loss on impairment of investment 13 - - 35.7 13.1
Share-based payment charge 25 0.1 0.8 0.1 0.3
Unrealised foreign exchange differences - - - -
Other - - - -
Changes in working capital (excluding
effects of
acquisitions and disposals of subsidiaries):
Decrease / (increase) in trade and
other receivables 0.5 (1.3) 1.8 (2.3)
Increase in trade and other payables 1.3 1.4 6.8 8.9
Increase in deferred income 0.3 0.3 - -
---------------------------------------------- ---- ------ ------ -------- --------
Cash generated from operating activities 4.6 6.8 7.3 4.7
---------------------------------------------- ---- ------ ------ -------- --------
Analysis of changes in net cash/(debt)
At At
31 December Net 31 December
2018 cash flow 2019
Group Note GBPm GBPm GBPm
-------------------------- ---- ------------ ---------- ------------
Cash and cash equivalents 18 0.1 9.2 9.3
-------------------------- ---- ------------ ---------- ------------
Net cash 0.1 9.2 9.3
-------------------------- ---- ------------ ---------- ------------
At At
31 December Net 31 December
2018 cash flow 2019
Company Note GBPm GBPm GBPm
-------------------------- ---- ------------ ---------- ------------
Cash and cash equivalents 18 - - -
-------------------------- ---- ------------ ---------- ------------
Net cash - - -
-------------------------- ---- ------------ ---------- ------------
28 Financial instruments and financial risk management
Financial risk management
The Board has overall responsibility for the determination of
the Group's risk management policies. The Board receives monthly
reports from the Chief Financial Officer through which it reviews
the effectiveness of policies and processes put in place to manage
risk. The Board sets policies that reduce risk as far as possible
without unduly affecting the operating effectiveness of the
Group.
The Group's activities expose it to a variety of financial
risks, including interest rate risk, credit risk, liquidity risk,
capital risk and currency risk. Of these, credit risk and liquidity
risk are considered the most significant. This note presents
information about the Group's exposure to each of the above
risks.
Categories of financial instruments
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised in respect of each class of financial asset, financial
liability and equity instrument are disclosed in note 1(s). All
financial assets and liabilities are measured at amortised
cost.
Restated(2)
2019 2018
Note GBPm GBPm
---------------------------- ---- ----- -----------
Financial assets
Cash and bank balances 18 9.3 0.1
Trade receivables - net 17 6.8 9.8
Other receivables 17 2.3 1.7
---------------------------- ---- ----- -----------
Total financial assets 18.4 11.6
---------------------------- ---- ----- -----------
Financial liabilities
Lease liabilities 20 4.3 -
Trade payables 19 1.1 2.7
Accruals 19 8.7 6.8
Provisions 23 0.1 0.2
Other payables 19 1.7 1.6
---------------------------- ---- ----- -----------
Total financial liabilities 15.9 11.3
---------------------------- ---- ----- -----------
(2) See note 1 (a) for description of prior year restatement
Credit risk
The Group's principal financial assets are trade and other
receivables (note 17). Credit risk refers to the risk that a
counterparty will default on its contractual obligations resulting
in financial loss to the Group. The carrying amount of financial
assets recorded in the financial information, which is net of
impairment losses, represents the Group's maximum exposure to
credit risk in relation to financial assets. Credit risk is managed
on a Group basis. The Group does not consider that it is subject to
any significant concentrations of credit risk.
Trade receivables
Trade receivables consist of a large number of customers, of
varying sizes and spread across diverse industries and geographies.
The Group does not have significant exposure to credit risk in
relation to any single counterparty or group of counterparties
having similar characteristics. The Group's exposure to credit risk
is influenced predominantly by the circumstances of individual
customers as opposed to industry or geographic trends.
The business assesses the credit quality of customers based on
their financial position, past experience and other qualitative and
quantitative factors. The Group's policy requires customers to pay
in accordance with agreed payment terms, which are generally 30
days from the date of invoice. Under normal trading conditions, the
Group is exposed to relatively low levels of risk, and potential
losses are mitigated as a result of a diversified customer base and
the requirement for events and certain premium content subscription
invoices to be paid in advance of service delivery.
The credit control function within the Group's finance
department monitors the outstanding debts of the Group, and trade
receivables balances are analysed by the age and value of
outstanding balances.
Any trade receivable balance which is objectively determined to
be uncollectible is written off the ledger, with a charge taken
through the statement of comprehensive income. The Group also
records an allowance for the lifetime expected credit loss on its
trade receivables balances under the simplified approach as
mandated by IFRS 9. The impairment model for trade receivables,
under IFSR 9, requires the recognition of impairment provisions
based on expected lifetime credit losses, rather than only incurred
ones as was the case under IAS 39. All balances past due are
reviewed, with those greater than 90 days past due considered to
carry a higher level of credit risk. Refer to note 1 (s) for
further details on the approach to allowance for expected credit
losses on trade receivables.
The allowance for expected lifetime credit losses, and changes
to it, are taken through administrative expenses in the statement
of comprehensive income.
The ageing of trade receivables according to their original due
date is detailed below:
Restated(2)
2019 2019 2018 2018
Gross Provision Gross Provision
GBPm GBPm GBPm GBPm
---------------------- ------ ---------- ----------- ----------
Not due 3.7 - 5.3 (0.1)
0-30 days past due 1.5 - 2.3 -
31-60 days past due 0.5 - 0.9 (0.1)
61-90 days past due 0.4 (0.1) 0.4 -
Over 90 days past due 1.8 (1.0) 2.1 (1.0)
---------------------- ------ ---------- ----------- ----------
7.9 (1.1) 11.0 (1.2)
---------------------- ------ ---------- ----------- ----------
(2) See note 1 (a) for description of prior year restatement
Trade receivables that are less than 3 months past due are
generally not considered to be impaired, except where specific
credit issues or delinquency in payments have been identified. In
making the assessment that unprovided trade receivables are not
impaired, the Directors have considered the quantum of gross trade
receivables which relate to amounts not yet included in income,
including pre-event invoices in deferred income and amounts
relating to VAT. The credit quality of trade receivables not yet
due nor impaired has been assessed as acceptable.
The movement in the allowance for expected credit losses on
trade receivables is detailed below:
2019 2019 2019 2018 2018 2018
Continuing Discontinued Total Continuing Discontinued Total
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------------- ----------- ------------- ------ ----------- ------------- ------
Balance at 1 January 1.1 0.1 1.2 1.5 - 1.5
Utilised (0.4) - (0.4) (0.6) - (0.6)
Additional provision charged to the statement
of comprehensive income 0.4 - 0.4 0.3 - 0.3
Disposal of subsidiaries (0.1) (0.1) -
---------------------------------------------- ----------- ------------- ------ ----------- ------------- ------
Balance at 31 December 1.1 - 1.1 1.2 - 1.2
---------------------------------------------- ----------- ------------- ------ ----------- ------------- ------
The Group's policy requires customers to pay in accordance with
agreed payment terms, which are generally 30 days from the date of
invoice or, in the case of live events related revenue, no less
than 30 days before the event. All credit and recovery risk
associated with trade receivables has been provided for in the
statement of financial position. The Group's policy for recognising
an impairment loss is given in note 1 (s)(ii). Impairment losses
are taken through administrative expenses in the statement of
comprehensive income.
The Directors consider the carrying value of trade and other
receivables approximates to their fair value.
Cash and cash equivalents
Banks and financial institutions are independently rated by
credit rating agencies. We choose only to deal with those with a
minimum 'A' rating. We determine the credit quality for cash and
cash equivalents to be strong.
Other receivables
Other receivables are neither past due nor impaired. These are
primarily made up of sundry receivables, including employee-related
debtors and receivables in respect of distribution
arrangements.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group manages
liquidity risk by maintaining adequate reserves and working capital
credit facilities, and by continuously monitoring forecast and
actual cash flows. In November 2018 the Group renewed its GBP25m
multi-currency revolving credit facility with the Royal Bank of
Scotland and Lloyds which runs to November 2021 with the option to
extend for two periods of one year each. As at 31 December 2019,
the Group had cash of GBP9.3m (2018: GBP0.1m) with a full undrawn
loan facility of GBP25.0m (2018: full undrawn loan facility of
GBP25.0m).
The following tables detail the financial maturity for the
Group's financial liabilities:
Less than
Book value Fair value 1 year 2-5 years
GBPm GBPm GBPm GBPm
------------------------------------ ---------- ---------- --------- ---------
At 31 December 2019
Financial liabilities
Interest bearing 4.3 4.3 2.1 2.2
Non-interest bearing 11.6 11.6 11.5 0.1
------------------------------------ ---------- ---------- --------- ---------
15.9 15.9 13.6 2.3
------------------------------------ ---------- ---------- --------- ---------
At 31 December 2018 (restated (2) )
Financial liabilities
Interest bearing - - - -
Non-interest bearing 11.3 11.3 11.2 0.1
------------------------------------ ---------- ---------- --------- ---------
11.3 11.3 11.2 0.1
------------------------------------ ---------- ---------- --------- ---------
(2) See note 1 (a) for description of prior year restatement
The Directors consider that book value is materially equal to
fair value.
The book value of primary financial instruments approximates to
fair value where the instrument is on a short maturity or where
they bear interest at rates that approximate to the market.
The following table details the level of fair value hierarchy
for the Group's financial asset and liabilities:
Financial Asset Financial Liabilities
----------------------- ---------------------
Level 1 Level 3
Cash and Bank balances Lease liabilities
Level 3 Trade Payables
Trade receivables - net Accruals
Other receivables Provisions
Other payables
Borrowings*
*Borrowings are purely in relation to the Group's revolving
credit facility which is discussed above. The amount drawn down
from this facility at 31 December 2019 was GBPnil (2018:
GBPnil).
All trade and other payables are due in one year or less, or on
demand.
Interest rate risk
The Group has no significant interest-bearing assets but is
exposed to interest rate risk when it borrows funds at floating
interest rates through its revolving credit facility. Borrowings
issued at variable rates expose the Group to cash flow interest
rate risk. The Group evaluates its risk appetite towards interest
rate risks regularly, and may undertake hedging activities,
including interest rate swap contracts, to manage interest rate
risk in relation to its revolving credit facility if deemed
necessary.
The Group did not enter into any hedging transactions during the
current or prior year and as at 31 December 2019, the only floating
rate to which the Group is exposed was LIBOR. The Group's exposure
to interest rates on financial assets and financial liabilities is
detailed in the liquidity risk section of this note.
Interest rate sensitivity
The Group has exposure to interest rate risk, and sensitivity
analysis has been performed based on exposure to variable interest
rates at the reporting date.
If interest rates had been 50 basis points higher or lower and
all other variables were held constant, the Group's net profit
after tax would increase / decrease by GBPnil (2018: GBPnil) and
equity by GBPnil (2018: GBPnil)
Capital risk
The Group manages its capital to ensure that all entities in the
Group will be able to continue as a going concern while maximising
return to stakeholders, as well as sustaining the future
development of the business.
The capital structure of the Group consists of net debt/cash,
which includes cash and cash equivalents (note 18), and equity
attributable to the owners of the parent, comprising issued share
capital (note 24), other reserves and retained earnings. The Board
also considers the levels of own shares held for employee share
schemes, and the ability to issue new shares for acquisitions, in
managing capital risk in the business.
The Group continues to benefit from its banking facilities (as
renewed during November 2018), which features both a working
capital facility, to assist in managing the Group's liquidity risk,
and an acquisition facility to support the Group's acquisition
strategy. The facility, available until November 2021 with an
option to extend for a further 2 periods of 1 year each, allows for
a maximum drawdown of GBP25m.
Interest is calculated on LIBOR plus a margin dependent on the
Group's net leverage position, which is re-measured quarterly in
line with covenant testing. The Group's borrowings are subject to
financial covenants tested quarterly. The principal financial
covenants under the facility are that the ratio of net debt to
adjusted EBITDA (see note 1(b) for explanation and reconciliation
of adjusted EBITDA) shall not exceed 2.5:1 and the ratio of EBITDA
to net finance charges shall not be less than 4:1. At 31 December
2019 and throughout 2019 all these covenants were achieved.
Currency risk
Substantially all the Group's net assets are located in the
United Kingdom. The majority of revenue and profits is generated in
the United Kingdom and consequently foreign exchange risk is
limited. The Group continues to monitor its exposure to currency
risk, particularly as the business expands into overseas
territories such as North America, however the results of the Group
are not currently considered to be sensitive to movements in
currency rates.
29 Operating lease commitments - minimum lease payments
Due to the adoption of IFRS 16 at 1 January 2019, the Group's
future lease commitments are recognised as lease liabilities and
ROU assets. The movement from the commitments of GBP7.3m at 31
December 2018 to the recognition of the lease liabilities and ROU
assets are detailed in note 20.
2019 2018
Commitments payable under non-cancellable operating leases GBPm GBPm
----------------------------------------------------------- ----- -----
Within one year - 2.5
Later than one year and less than five years - 4.8
----------------------------------------------------------- ----- -----
- 7.3
----------------------------------------------------------- ----- -----
At 31 December 2018, the Group had contracted with tenants to
receive payments in respect of operating leases on land and
buildings. These arrangements were excluded from the requirements
of IFRS 16 under the short-term lease exemption (see note 20 for
further details). All sub-leasing arrangements ceased during the
year.
2019 2018
Commitments receivable under non-cancellable subleases GBPm GBPm
------------------------------------------------------- ----- -----
Within one year - 0.5
Later than one year and less than five years - -
------------------------------------------------------- ----- -----
- 0.5
------------------------------------------------------- ----- -----
The Company does not have any operating lease commitments.
30 Pension schemes
The Group contributes to individual and collective money
purchase pension schemes in respect of Directors and employees once
they have completed the requisite period of service. The charge for
the year in respect of these defined contribution schemes is shown
in note 5. Included within other payables is an amount of GBP0.1m
(2018: GBP0.1m) payable in respect of the money purchase pension
schemes.
31 Capital commitments
At 31 December 2019, the Group had no capital commitments. At 31
December 2018, the Group had capital commitments totalling GBP0.1m
in relation to fit-out costs for the new WeWork property lease.
32 Related party transactions
Group
Key management compensation is disclosed in note 5. There were
no other material related party transactions for the Group in the
current or prior year.
Company
During the year, interest was recharged from subsidiary
companies as follows:
2019 2018
----------------- ---- ----
GBPm GBPm
Interest payable 1.7 1.3
----------------- ---- ----
There were no borrowings at the year end.
The balances outstanding with subsidiary companies are disclosed
in notes 17 and 19.
There were no other material related party transactions for the
Company in the current or prior year.
Audit exemption
For the year ended 31 December 2019 the Company has provided a
guarantee pursuant to sections 479A-C of Companies Act 2006 over
the liabilities of the following subsidiaries and, as such, they
are exempt from the requirements of the Act relating to the audit
of individual financial statements, or preparation of individual
financial statements, as appropriate, for this financial year.
Outstanding
Company liabilities
Name Number GBPm
------------------------------- -------- ------------
Centaur Communications Limited 01595235 42.8
Centaur Newco 2018 Limited 11725322 -
Chiron Communications Limited 01081808 67.5
Econsultancy.com Limited 04047149 2.9
Mayfield Publishing Limited 02034820 0.4
Pro-Talk Limited 03939119 0.3
Taxbriefs Holdings Limited 03572069 -
Taxbriefs Limited 01247331 0.7
Thelawyer.com Limited 11491880 3.0
Xeim Limited 05243851 11.3
Your Business Magazine Limited 01707331 0.3
------------------------------- -------- ------------
See note 13 for changes to subsidiary holdings during the
year.
MarketMakers Incorporated Limited will have its statutory audit
for the year ended 31 December 2019 performed by PwC.
33 Post balance date events
No material events have occurred after the reporting date.
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 GZGMFVRNGGZG
(END) Dow Jones Newswires
March 18, 2020 03:00 ET (07:00 GMT)
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