TIDMCEPS
RNS Number : 0591M
CEPS PLC
16 September 2021
16 September 2021
CEPS PLC
("CEPS", "CEPS Group" "Group" or "Company")
HALF-YEARLY REPORT
The Board is pleased to announce its unaudited half-yearly
report for the six months ended 30 June 2021.
CHAIRMAN'S STATEMENT
Review of the period
I am pleased to say these interim accounts, unlike the accounts
for the past few years, are relatively simple with no goodwill
write-offs, no extraordinary expenses, no corporate reconstructions
and no subsidiaries being placed into administration.
However, whilst profitable, these results continue to show the
impact of the pandemic and the various lockdowns. The whole
six-month accounting period being reported on fell into a time of a
national lockdown which ended on 19 July 2021. In reality, because
of business seasonality, it might well be that in some of the CEPS
companies there may be little or no recovery in the current year.
We must, therefore, look to the future, and by that, I mean the
results for the year ending 31 December 2022, which will be
reported in May 2023, for a true representation of the real
potential of the CEPS Group.
As a Board we are confident of better returns for the CEPS Group
in the future as the UK economy continues to recover back to, and
in time, exceed its pre-pandemic level. Whilst the Company as a
stand-alone legal entity does have a high level of debt of some
GBP5.85m, this debt has been lent, firstly, by me personally,
secondly, from a corporate entity that my family controls and,
thirdly, from an individual for whom the sum advanced is guaranteed
by me. This debt will, in time, be repaid as the subsidiaries make
increasing profits, generate cash and repay loans advanced from
CEPS.
Aford Awards Limited ("Aford Awards") reported sales that
remained well down on the comparable period in pre-pandemic 2019,
but demonstrated a continuing recovery throughout the period,
reflecting the gradual opening of society and of more sporting
events taking place. Shareholders will have seen the recent,
complicated announcement about the acquisition of three small
business entities which will be incorporated into the current
operational unit in Maidstone from September 2021 onwards. As was
flagged in the 2020 Annual Report, this consolidation process is
being driven by the new management team introduced in the second
half of last year. Subject to prudent integration, it is the
intention to make a series of these types of acquisitions in the
future.
Friedman's Limited ("Friedman's"), including Milano
International Limited ("Milano International"), has reported a
decline in sales and profitability in the period as compared to
2020 because the first three months of 2021 were locked down and
the comparable three months in 2020 were not. As we know, the
majority of the six-month period to June 2021 was impacted by the
ongoing restrictions resulting from the third lockdown. Whilst in
H1 of 2021 sales in Friedman's started to gradually recover, the
sales in Milano International, a supplier of leotards and gymnastic
clothing, did not. The management team is not expecting any
improvement in Milano International's sales until gymnastics clubs
and schools are fully open and operational from September 2021
onwards.
The enlarged Hickton group has included Cook Brown Building
Control Limited and Cook Brown Energy Limited for a full six months
in H1 2021 as compared to only three months in H1 2020, and now
also includes the recent acquisition of Millington Lord, which
became part of the CEPS Group from 15 March 2021. The purchase of
Millington Lord Limited ("Millington Lord") was initially financed
by Hickton Group Limited ("Hickton Group") and subsequently
partially refinanced by the shareholders, with CEPS borrowing a
further GBP150,000 from Chelverton Asset Management Limited to
enable it to make a further investment in Hickton Group. The
shareholding of CEPS in Hickton Group, notwithstanding this further
investment, declined from 54.7% to 52.4% at the time of this
investment. The Board of Hickton Group is pleased with the
performance in the period but is concerned with the issue of
recruiting the necessary quality of staff needed to continue to
grow the business. This is a problem common to many industry
sectors and much reported on in the UK economy.
The new associate company, being the merger of the previously
85% subsidiary Davies Odell Limited ("Davies Odell") with Vale
Brothers Limited ("Vale Brothers") by the setting up of a new
holding company called Vale Brothers Group Limited, produced a
small profit contribution of GBP25,000. Whilst this is the first
positive contribution connected with Davies Odell for seven years,
it is still disappointing as this was effectively achieved from the
cost-cutting in Davies Odell, made possible by the merger with Vale
Brothers. We look forward to an improved performance from Vale
Brothers Group Limited in 2022.
On behalf of all shareholders, I would like to thank all my
colleagues in the CEPS Group for what was achieved in the first six
months of this year. Each company has had to adapt its business to
face a whole series of different challenges and it is only through
the phenomenal collective effort across the CEPS Group at all
levels that this progress has been made.
Financial review
As a result of the CEPS Group restructuring that has taken place
over the last three years, the results for H1 2021 reflect the
performance of the continuing operations, namely Aford Awards,
Friedman's, including Milano International, and Hickton Group.
Revenue from continuing operations for the six months ended 30 June
2021 was GBP8,970,000 an increase on the very depressed level of
GBP6,299,000 in 2020, which included GBP5,414,000 of revenue from
continuing operations.
Aford Awards generated revenue of GBP515,000 for the first six
months of 2021 compared to GBP390,000 for the same period in 2020.
The segmental result presented as EBITDA before exceptional items
was GBP164,000, an improvement on H1 2020 (GBP57,000). However,
when compared to H1 2019, when revenue was GBP1,094,000 and EBITDA
was GBP285,000, the impact of the pandemic on the company's
performance becomes clear.
As already mentioned, sales of Milano International's products
continue to be diminished by the restrictions resulting from the
pandemic Revenue from Friedman's and Milano International was
GBP1,857,000 in H1 2021 compared to GBP2,149,000 in H1 2020 and
EBITDA before exceptional items was GBP82,000 compared to
GBP304,000 in the respective periods. Given that the latest
restrictions were only lifted on July 19, after the period end,
this was a creditable result in the circumstances.
A meaningful comparison between the results for Hickton Group in
H1 2021 and 2020 is more difficult as we are not comparing
like-with-like in terms of the group's component parts, as
described above. Suffice to say that the construction sector has
recovered more quickly than the leisure sector. Revenue was
GBP6,598,000 in the first half of 2021 compared to GBP2,875,000 in
H1 2020 and EBITDA before exceptional items was GBP1,026,000 for
the six-month period to 30 June 2021 compared to GBP515,000 for the
six months to 30 June 2020.
The operating profit before exceptional items for CEPS for H1
2021 was GBP855,000 and for H1 2020 was GBP213,000, split between
an operating profit before exceptional items from continuing
operations of GBP357,000 and an operating loss before exceptional
items of GBP144,000 from discontinued operations. Whilst
acknowledging that the profit improvement is largely due to the
growth of the Hickton group of companies and the recovery of the
construction sector, the Board is hopeful that this profit
improvement is an early indication that the CEPS Group
restructuring is proving to be successful.
Included within operating profit before exceptional items is
other operating income of GBP240,000 for the period to June 2021
and GBP563,000 for the six months to 30 June 2020, split between
continuing operations of GBP447,000 and discontinued operations of
GBP116,000. This income was derived from the Coronavirus Job
Retention Scheme grant and other similar government grants and the
fact that it has reduced so much when comparing the periods
reflects, not only the gradual withdrawal of this support, but also
the gradual return to work of the CEPS Group's employees.
Also included within operating profit before exceptional items
are CEPS Group costs. These have reduced from GBP254,000 for H1
2020 to GBP164,000 for H1 2021 primarily due to the reduction in
fees for the Dinkie Heel Defined Benefit Pension Scheme which are
being paid by the Scheme from its surplus for the time being.
Exceptional items represent expenses relating to the Millington
Lord acquisition in the six months to 30 June 2021 of GBP46,000 and
profit on disposal of subsidiaries arising in discontinued
operations in H1 2020. There was a restatement of the profit on
disposal of subsidiaries downwards from GBP2,555,000 to GBP825,000
which is explained in more detail in note 2 to the financial
information.
Net finance costs have remained roughly the same between the two
periods (H1 2021: GBP357,000; H1 2020: GBP375,000) and the
corporation tax charge of GBP137,000 (H1 2020: GBP1,000) is
primarily a provisional charge on the profits generated by Hickton
Group.
The profit after taxation for the first six months of 2021 was
GBP340,000 which compares to a profit of GBP664,000 for the same
period last year, split between a loss from continuing operations
of GBP17,000 and a profit from discontinued operations of
GBP681,000.
Earnings per share attributable to the owners of the parent on a
basic and diluted basis was 0.73p for H1 2021 and 3.63p for H1
2020, split between a loss per share of 0.38p for continuing
operations and an earnings per share from discontinued operations
of 4.01p.
In terms of the Consolidated Statement of Financial Position,
the figures relating to the acquisition of Millington Lord are
provisional at this stage and will be confirmed at the financial
year end, but are not expected to differ materially.
The cash generation from operations in H1 2021 was GBP515,000
which compares to GBP696,000 for the same period last year. Net
debt, excluding acquisition loan notes, increased between the
periods from GBP5,597,000 at 30 June 2020 to GBP6,158,000 at 30
June 2021. The additional cash was primarily used to finance the
new acquisitions and the restructuring over the year.
On 21 January 2021 I loaned the Company a further GBP100,000
interest free and with no fixed repayment date for general working
capital for the Company during the pandemic, taking the Company's
total indebtedness owed to me to GBP750,000. On 15 April 2021,
Hickton Group Limited drew down on a four year GBP500,000, secured
Coronavirus Business Interruption Loan with Santander UK plc
available for general corporate purposes. In May 2021, the Company
entered into a loan agreement with a third party for GBP2,000,000.
The loan was used to repay an existing GBP2,000,000 loan from
another third party which fell due for repayment on 30 June 2021.
Finally, as already mentioned, in June 2021 CEPS borrowed a further
GBP150,000 from Chelverton Asset Management Limited to enable it to
make a further investment in Hickton Group, taking the total amount
loaned by Chelverton Asset Management limited to GBP3,100,000.
2021 outlook
We have been encouraged by the determination of the people at
the subsidiary companies to get on and ensure that their businesses
continued to develop and provide product and services to their
customers.
It remains very difficult to predict the outlook and the exact
performance of the businesses. We recognise the possibility of
further regional lockdowns in the winter season. However, another
national lockdown would be disastrous. The consistent message we
have given is that we do not expect normalisation of trading until
perhaps 2022. After prior economic shocks, it has taken about 18 to
24 months for confidence to fully return.
The CEPS Group is now better positioned than it was three years
ago, and each company has a clear strategy as to how it will grow
its businesses over time. This will be by a combination of
acquisition of related companies to both broaden and deepen
activities with the intention of capturing a greater market share
by more efficient processes and marketing. In addition, where
possible and appropriate, CEPS will look to increase its
shareholdings in the underlying subsidiaries.
David Horner
Chairman
16 September 2021
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (which forms part of
domestic UK law pursuant to the European Union (Withdrawal) Act
2018).
The directors of the Company accept responsibility for the
content of this announcement.
Enquiries
CEPS PLC
David Horner, Chairman +44 1225 483030
Cairn Financial Advisers LLP
James Caithie / Sandy Jamieson
/ Ludovico Lazzaretti +44 20 7213 0880
Caution Regarding Forward Looking Statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on
historical facts but rather on the directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements re ect the directors' current beliefs
and assumptions and are based on information currently available to
the directors .
CEPS PLC
Consolidated Statement of Comprehensive Income
Six months ended 30 June 2021
Note Continuing Continuing Discontinued
Operations Operations Operations Audited
Unaudited Unaudited Unaudited Unaudited 12 months
6 months 6 months 6 months
to 30 to 30 6 months to 30 to 31
June June to 30 June June December
2021 2020 2020 2020 2020
restated restated restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 5 8,970 5,414 885 6,299 13,952
Cost of sales (5,255) (3,018) (698) (3,716) (9,328)
------------ ------------ ------------- ---------- ----------
Gross profit 3,715 2,396 187 2,583 4,624
Administration expenses (3,100) (2,486) (447) (2,933) (5,473)
Other operating income 240 447 116 563 861
------------ ------------ ------------- ---------- ----------
Operating profit/(loss) 855 357 (144) 213 12
Exceptional items (46) - 825 825 (191)
Impairment of intangible
assets - - - - (354)
Adjusted operating profit/(loss) 809 357 681 1,038 (533)
Analysis of adjusted
operating profit/(loss)
------------ ------------ ------------- ---------- ----------
Trading 779 164 (260) (96) 442
Exceptional items 4 (46) - 825 825 (191)
Impairment of intangible
assets - - - - (354)
Other operating income 240 447 116 563 -
Group costs 5 (164) (254) - (254) (430)
------------ ------------ ------------- ---------- ----------
809 357 681 1,038 (533)
------------ ------------ ------------- ---------- ----------
Profit on disposal of
discontinued operations - - - - 626
Share of associate profit 25 - - - -
Net finance costs 5 (357) (375) - (375) (738)
Profit/(loss) before
tax 477 (18) 681 663 (645)
Taxation 5 (137) 1 - 1 (20)
------------ ------------ ------------- ---------- ----------
Profit/(loss) for the
period 340 (17) 681 664 (665)
------------ ------------ ------------- ---------- ----------
Other comprehensive
loss
Items that will not
be reclassified to profit
or loss
------------ ---------- ----------
Actuarial loss on defined
benefit pension plans - - - - (13)
------------ ------------ ------------- ---------- ----------
Other comprehensive
loss for the period,
net of tax - - - - (13)
Total comprehensive
income/(loss) for the
period 340 (17) 681 664 (678)
------------ ------------ ------------- ---------- ----------
Income/(loss) attributable
to:
Owners of the parent 124 (64) 681 617 (624)
Non-controlling interest 216 47 - 47 (41)
------------ ------------ ------------- ---------- ----------
340 (17) 681 664 (665)
------------ ------------ ------------- ---------- ----------
Total comprehensive
income/(loss) attributable
to:
Owners of the parent 124 (64) 681 617 (637)
Non-controlling interest 216 47 - 47 (41)
------------ ------------ ------------- ---------- ----------
340 (17) 681 664 (678)
------------ ------------ ------------- ---------- ----------
Earnings per share attributable
to owners of the parent
during the period
basic and diluted 6 0.73p (0.38p) 4.01p 3.63p (3.67p)
------------ ------------ ------------- ---------- ----------
CEPS PLC
Consolidated Statement of Financial Position
As at 30 June 2021
Note Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2021 2020 2020
restated
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 651 860 633
Right-of-use assets 948 1,150 976
Intangible assets 10,364 10,033 9,208
Investment in associate 25 - -
11,988 12,043 10,817
---------- ---------- ------------
Current assets
Inventories 1,284 2,386 1,441
Trade and other receivables 3,150 2,423 1,883
Cash and cash equivalents
(excluding bank overdrafts) 2,114 2,048 2,332
6,548 6,857 5,656
---------- ---------- ------------
Total assets 5 18,536 18,900 16,473
========== ========== ============
Equity
Capital and reserves attributable
to owners of the parent
Called up share capital 8 1,700 1,700 1,700
Share premium 5,841 5,841 5,841
Retained earnings (8,299) (6,548) (8,402)
---------- ---------- ------------
(758) 993 (861)
Non-controlling interest in equity 2,199 2,209 1,954
Total equity 1,441 3,202 1,093
---------- ---------- ------------
Liabilities
Non-current liabilities
Borrowings 6,948 8,827 6,415
IFRS lease liability 882 1,040 887
Deferred tax liability 150 216 51
7,980 10,083 7,353
---------- ---------- ------------
Current liabilities
Borrowings 4,119 1,260 3,861
IFRS lease liability 191 235 248
Trade and other payables 3,357 3,142 2,909
Current tax liabilities 1,448 978 1,009
9,115 5,615 8,027
---------- ---------- ------------
Total liabilities 5 17,095 15,698 15,380
---------- ---------- ------------
Total equity and liabilities 18,536 18,900 16,473
========== ========== ============
CEPS PLC
Consolidated Statement of Cash Flows
Six months ended 30 June 2021
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2021 2020 2020
restated
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) for the financial
period 340 664 (665)
Adjustments for:
Depreciation and amortisation 253 312 601
Loss on disposal of fixed assets 1 - -
Profit on disposal of subsidiaries - (825) (626)
Share of associate profit (25) - -
Impairment of intangible assets - - 354
Pension contributions less than
administrative charge - - 9
Net finance costs 357 375 738
Taxation charge 137 (1) 20
Changes in working capital
Movement in inventories 157 (142) 375
Movement in trade and other receivables (341) (190) 325
Movement in trade and other payables (305) 476 377
---------- ---------- ------------
Cash generated from operations 574 669 1,508
Corporation tax (paid)/received (59) 27 (241)
Net cash generated from operating
activities 515 696 1,267
---------- ---------- ------------
Cash flows from investing activities
Interest received 6 - 2
Acquisition of subsidiaries, net
of cash acquired (740) (1,870) (866)
Acquisition of minority shareholdings
in subsidiaries - (1,313) (1,366)
Disposal of subsidiaries, net of
cash - (4) (4)
Purchase of property, plant and
equipment (41) (142) (95)
Proceeds from sale of assets 35 - 1
Purchase of intangible fixed assets (3) (229) (24)
Net cash from investing activities (743) (3,558) (2,352)
---------- ---------- ------------
Cash flows from financing activities
Proceeds from borrowings 2,978 3,485 3,174
Repayment of borrowings (2,485) - (904)
Loan issue costs paid - - (86)
Proceeds from subsidiary share
issue 5 - 26
Interest paid (315) (319) (432)
Lease liability payments (173) (277) (319)
Net cash flow generated from financing
activities 10 2,889 1,459
---------- ---------- ------------
Net (decrease)/increase in cash
and cash equivalents (218) 27 374
Cash and cash equivalents at the
beginning of the period 2,332 1,958 1,958
Cash and cash equivalents at the
end of the period 2,114 1,985 2,332
========== ========== ============
Cash and cash equivalents
Cash at bank and in hand 2,114 2,048 2,332
Bank overdrafts repayable on demand - (63) -
2,114 1,985 2,332
========== ========== ============
CEPS PLC
Consolidated Statement of Changes in Equity
Six months ended 30 June 2021
Share Share Retained Attributable Non-controlling Total
capital premium earnings to owners interest equity
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- ---------- ------------- ---------------- --------
At 1 January 2020 1,700 5,841 (6,808) 733 2,018 2,751
(audited)
--------- --------- ---------- ------------- ---------------- --------
Profit and total comprehensive
income for the period
(restated) - - 617 617 47 664
--------- --------- ---------- ------------- ---------------- --------
Changes in ownership
interest in a subsidiary
(restated) - - (357) (357) (882) (1,239)
--------- --------- ---------- ------------- ---------------- --------
Disposal of subsidiaries - - - - 1,026 1,026
--------- --------- ---------- ------------- ---------------- --------
At 30 June 2020 (unaudited) 1,700 5,841 (6,548) 993 2,209 3,202
--------- --------- ---------- ------------- ---------------- --------
Actuarial loss - - (13) (13) - (13)
--------- --------- ---------- ------------- ---------------- --------
Loss for the period - - (1,241) (1,241) (88) (1,329)
--------- --------- ---------- ------------- ---------------- --------
Total comprehensive
loss for the financial
period - - (1,254) (1,254) - (1,342)
--------- --------- ---------- ------------- ---------------- --------
Changes in ownership
interest
in subsidiaries - - (600) (600) (167) (767)
--------- --------- ---------- ------------- ---------------- --------
At 31 December 2020
(audited) 1,700 5,841 (8,402) (861) 1,954 1,093
--------- --------- ---------- ------------- ---------------- --------
Profit and total comprehensive
income for the financial
period - - 124 124 216 340
--------- --------- ---------- ------------- ---------------- --------
Changes in ownership
interest
in a subsidiary - - (21) (21) 29 8
--------- --------- ---------- ------------- ---------------- --------
At 30 June 2021 (unaudited) 1,700 5,841 (8,299) (758) 2,199 1,441
--------- --------- ---------- ------------- ---------------- --------
Notes to the financial information
1. General information
The Company is a limited liability company incorporated and
domiciled in the UK. The address of its registered office is 11
Laura Place, Bath BA2 4BL and the registered number of the company
is 00507461.
The Company is quoted on AIM.
This condensed consolidated half-yearly financial information
was approved by the directors for issue on 16 September 2021.
This condensed consolidated half-yearly financial information
does not comprise statutory accounts within the meaning of section
434 of the Companies Act 2006. Statutory accounts for the year
ended 31 December 2020 were approved by the Board of directors on
24 May 2021 and delivered to the Registrar of Companies. The report
of the auditor on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
This condensed consolidated half-yearly financial information
has not been reviewed or audited.
There is no specific seasonality in relation to the condensed
consolidated half-yearly financial information, although the impact
of COVID-19 has had a profound effect on the subsidiaries and their
performance in H1 2020 and to a lesser overall degree in H2 2020
and into 2021.
Basis of preparation
This condensed consolidated half-yearly financial information
for the six months ended 30 June 2021 has been prepared in
accordance with IAS 34, 'Interim Financial Reporting' as adopted by
the European Union. The condensed consolidated half-yearly
financial information should be read in conjunction with the annual
financial statements for the year ended 31 December 2020, which
have been prepared in accordance with IFRSs as adopted by the
United Kingdom.
Accounting policies
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 31 December 2020, as
described in those annual financial statements.
2. Restatement
The Consolidated Statement of Comprehensive Income for the
period ended 30 June 2020 and the Consolidated Statement of
Financial Position as at that date together with the related
segmental notes have been restated for the error identified in the
preparation of the full year 2020 financial statements and to
reclassify the results of Davies Odell Limited, disposed of in
December 2020, from continuing to discontinued operations. The
profit on disposal of subsidiaries, shown as GBP2,555,000 in the
2020 Half-Yearly Report to Shareholders is now shown as GBP825,000
with the debit to equity on change of ownership interest and
movements in non-controlling interest adjusted by corresponding
amounts. This did not impact cash flows with the cash flow
statement restated only to show the lower profit for the period and
adjustment to this for the reduced profit on disposal.
3. Acquisitions in the current period
Hickton Group Limited, the Company's subsidiary, acquired the
entire issued share capital of Millington Lord Limited ("MLL") on
15 March 2021 from GT Realisations Limited (formerly Gas Tag
Limited). MLL is a holding company, with two wholly owned trading
subsidiaries; Morgan Lambert Limited ("ML") and Qualitas Compliance
Limited ("QC"). The MLL group, which is based out of Selby, North
Yorkshire, is a gas and electrical safety consultancy, providing
auditing, consulting and training services.
The acquisition had the following provisional effect on the
Group's assets and liabilities.
GBP'000
Customer relationship assets 350
Property, plant and equipment 12
Trade and other receivables 926
Cash and cash equivalents 110
Trade and other payables (798)
Borrowings (198)
Taxation balances (135)
--------
Fair value of net identifiable assets
and liabilities acquired 267
Goodwill 833
--------
1,100
--------
Cash consideration transferred 700
Deferred consideration 300
Contingent consideration 100
--------
1,100
--------
The cash outflow, net of cash acquired, at the date of
acquisition was GBP590,000 with GBP150,000 of deferred
consideration paid in June 2021, a further GBP150,000 of deferred
consideration paid in August 2021 and GBP100,000 of contingent
consideration confirmed and being paid post period end.
4. Exceptional items
Non-recurring items disclosed as
exceptional in the results are
as follows: Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2021 2020 2020
restated
GBP'000 GBP'000 GBP'000
Profit on disposal of subsidiaries - 825 825
Acquisition expenses 46 - 101
Other restructuring costs - - 90
---------- ---------- ------------
5. Segmental analysis
All activities, apart from those relating to CEM Press and
Davies Odell disposed of in 2020, are classed as continuing.
The chief operating decision maker of the Group is its Board.
Each operating segment regularly reports its performance to the
Board which, based on those reports, allocates resources to and
assesses the performance of those operating segments.
Operating segments and their principal activities are as
follows:
- Aford Awards, a sports trophy and engraving company.
- Friedman's, a convertor and distributor of specialist lycra,
including Milano International (trading as Milano Pro-Sport), a
designer and manufacturer of leotards.
- Hickton Group, comprising Hickton Consultants, BRCS, Cook
Brown Building Control, Cook Brown Energy, Morgan Lambert and
Qualitas Compliance, providers of services in the construction
industry.
- Discontinued operations represent the activities of Davies
Odell, a manufacturer and distributor of protection equipment,
matting and footwear components, until disposal in December 2020
and of the CEM Press companies including Travelfast (trading as
Sampling International), a manufacturer of fabric, carpet and
wallpaper pattern books, swatches and shade cards, until these went
into administration in January 2020.
The United Kingdom is the main country of operation from which
the Group derives its revenue and operating profit and is the
principal location of the assets of the Group. The Group
information provided below, therefore, also represents the
geographical segmental analysis. Of the GBP8,970,000
(2020: GBP6,299,000) of revenue, GBP8,463,000 (2020:
GBP5,189,000) is derived from UK customers.
The Board assesses the performance of each operating segment by
a measure of adjusted earnings before interest, tax, depreciation
and amortisation and Group costs. Other information provided to the
Board is measured in a manner consistent with that in the financial
statements.
i) Results by segment
Unaudited 6 months to 30 June 2021
Aford Hickton Total
Awards Friedman's Group Group
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 515 1,857 6,598 8,970
-------- ----------- ---------- --------
Segmental result (EBITDA) before
exceptional items 164 82 1,026 1,272
Exceptional item - - (46) (46)
-------- ----------- ---------- --------
Segmental result (EBITDA) after
exceptional items 164 82 980 1,226
-------- ----------- ----------
Right of use depreciation charge (22) (70) (40) (132)
Depreciation and amortisation
charge (3) (82) (36) (121)
-------- ----------- ----------
Group costs (164)
Share of associate profit 25
Net finance costs (357)
Profit before taxation 477
Taxation (137)
--------
Profit for the period 340
========
Unaudited 6 months to 30 June 2020 (restated)
Aford Hickton Continuing Discontinued Total
Awards Friedman's Group operations operations Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 390 2,149 2,875 5,414 885 6,299
-------- ----------- ---------- ------------ --------------- --------
Segmental result (EBITDA)
before exceptional
items 57 304 515 876 (97) 779
Exceptional item - - - - 825 825
-------- ----------- ---------- ------------ --------------- --------
Segmental result (EBITDA)
after exceptional items 57 304 515 876 728 1,604
-------- ----------- ----------
Right of use depreciation
charge (23) (70) (34) (127) (17) (144)
Depreciation and amortisation
charge (4) (102) (32) (138) (30) (168)
-------- ----------- ----------
Group costs (254) - (254)
Net finance costs (375) - (375)
------------
(Loss)/profit before
taxation (18) 681 663
Taxation 1 - 1
------------ --------------- --------
(Loss)/profit for the
period (17) 681 664
============ =============== ========
Audited 12 months to 31 December 2020
Aford Hickton Continuing Discontinued Total
Awards Friedman's Group operations operations Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 844 3,878 7,139 11,861 2,091 13,952
-------- ----------- ---------- ------------ --------------- --------
Segmental result (EBITDA)
before exceptional
items 111 124 929 1,164 (120) 1,044
Exceptional items - - (481) (481) 562 81
-------- ----------- ---------- ------------ --------------- --------
Segmental result (EBITDA)
after exceptional items 111 124 448 683 442 1,125
-------- ----------- ----------
Right of use depreciation
charge (47) (139) (63) (249) (34) (283)
Depreciation and amortisation
charge (7) (209) (40) (256) (63) (319)
-------- ----------- ----------
Group costs (430) - (430)
Net finance costs (708) (30) (738)
------------
(Loss)/profit before
taxation (960) 315 (645)
Taxation (20) - (20)
------------ --------------- --------
(Loss)/profit for the
year (980) 315 (665)
============ =============== ========
ii) Assets and liabilities by segment
Unaudited as at Segment assets Segment liabilities Segment net assets/(liabilities)
30 June
2021 2020 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Continuing operations:
CEPS 119 141 (6,246) (5,370) (6,127) (5,229)
Aford Awards 1,599 1,717 (511) (524) 1,088 1,193
Friedman's 7,141 7,822 (2,114) (2,414) 5,027 5,408
Hickton Group 9,677 7,960 (8,224) (6,517) 1,453 1,443
Discontinued:
Davies Odell - 1,260 - (873) - 387
Total - Group 18,536 18,900 (17,095) (15,698) 1,441 3,202
======== ======== ========== ========== ================= =================
Segment assets Segment liabilities Segment net assets/(liabilities)
Audited as at 31
December 2020
GBP'000 GBP'000 GBP'000
Continuing operations:
CEPS 57 (5,995) (5,938)
Aford Awards 1,661 (601) 1,060
Friedman's 7,363 (2,227) 5,136
Hickton Group 7,393 (6,558) 835
Total - Group 16,474 (15,381) 1,093
================== ====================== ====================================
6. Earnings per share
Basic earnings per share is calculated on the profit after
taxation for the period attributable to owners of the Company of
GBP124,000 (2020: profit of GBP617,000) and on 17,000,000 (2020:
17,000,000) ordinary shares, being the weighted number in issue
during the period.
Basic earnings per share for continuing operations is calculated
on the profit for the year after taxation attributable to owners of
the Company of GBP124,000 (2020: loss of GBP64,000) and on
17,000,000 ordinary shares, being the weighted number in issue
during the year. Basic earnings per share for discontinued
operations is calculated on the profit for the year after taxation
attributable to owners of the Company of GBPnil (2020: profit of
GBP681,000) and on 17,000,000 (2020: 17,000,000) ordinary shares,
being the weighted number in issue during the period.
7. Net debt and gearing
Gearing ratios at 30 June 2021, 30 June 2020 and 31 December
2020 are as follows:
Group Group Group audited
unaudited unaudited 31 December
30 June 2021 30 June 2020 2020
GBP'000 GBP'000 GBP'000
Total borrowings 8,272 7,645 7,552
Less: cash and cash equivalents (2,114) (2,048) (2,332)
-------------- -------------- --------------
Net debt 6,158 5,597 5,220
-------------- -------------- --------------
Total equity 1,441 3,202 1,093
-------------- -------------- --------------
Gearing ratio 427% 175% 478%
In order to provide a more meaningful gearing ratio, total
borrowings are the sum of bank borrowings and third-party debt,
excluding loan notes used to finance the Group's acquisitions.
8. Share capital and premium
Number Share capital Share premium Total
of shares GBP'000 GBP'000 GBP'000
At 1 January 2021 and 30 June
2021 17,000,000 1,700 5,841 7,541
----------- -------------- -------------- ---------
9. Related-party transactions
During the period the Company entered into the following
transactions with its subsidiaries:
Aford Awards
Group Holdings
Limited Davies Odell Signature Hickton Group
GBP'000 Limited Fabrics Limited Limited
GBP'000 GBP'000 GBP'000
Loan note interest receivable
- 6 months to 30 June
2021 24 - 30 89
- 6 months to 30 June
2020 8 19 30 64
- For the year to 31
December 2020 (audited) 26 35 60 154
Management charge income
receivable
- 6 months to 30 June
2021 10 - 18 6
- 6 months to 30 June
2020 10 8 18 6
- For the year to 31
December 2020 (audited) 20 11 35 13
Amount owed to the Company
- 30 June 2021 685 - 1,105 2,416
- 30 June 2020 210 886 1,044 2,297
- For the year to 31
December 2020 (audited) 735 - 1,075 2,342
Loans and investments
written-off or impaired
- 30 June 2021 - - - -
- 30 June 2020 - 73 - -
- For the year to 31 - 19 - -
December 2020 (audited)
The Company is under the control of its shareholders and not any
one individual party.
Statement of directors' responsibility
The directors confirm that, to the best of their knowledge,
these condensed consolidated half--yearly financial statements have
been prepared in accordance with IAS 34 as adopted by the United
Kingdom. The interim management report includes a fair review of
the information required by DTR 4.2.7R and DTR 4.2.8R, namely:
-- an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements; and
-- material related-party transactions in the first six months
of the financial year and any material changes in the related-party
transactions described in the last Annual Report.
A list of current directors is maintained on the CEPS PLC
website: www.cepsplc.com
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END
IR FLFIEAEIRLIL
(END) Dow Jones Newswires
September 16, 2021 11:34 ET (15:34 GMT)
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