TIDMPEBB

RNS Number : 9013K

Pebble Group PLC (The)

07 September 2021

7 September 2021

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

THE PEBBLE GROUP PLC

("The Pebble Group", the "Group" or the "Company")

UNAUDITED HALF YEAR RESULTS 2021

Strong recovery with positive outlook

The Pebble Group, a leading provider of technology, services and products to the global promotional products industry, announces its unaudited results for the six months ended 30 June 2021 ("HY 21" or the "Period"), which demonstrate a swift recovery. With strong progress in HY 21, the Board is confident that performance will be at least in line with market expectations for the year ending 31 December 2021 ("FY 21").

Financials

 
 Adjusted results                       HY 21       HY 20        HY 19      FY 20 
 
 Revenue                             GBP46.8m    GBP33.6m     GBP48.1m   GBP82.4m 
 Gross profit                        GBP17.2m    GBP13.6m     GBP17.4m   GBP31.0m 
 Gross profit margin                    36.8%       40.6%        36.1%      37.6% 
 Adjusted EBITDA(1)                   GBP4.4m     GBP2.6m      GBP5.3m    GBP9.8m 
 Adjusted operating profit(2)         GBP2.6m     GBP1.2m      GBP4.2m    GBP6.8m 
 Adjusted profit before tax(3)        GBP2.4m     GBP0.9m      GBP0.7m    GBP6.1m 
 Underlying operating cash         GBP(10.5)m   GBP(3.6)m      GBP3.0m    GBP7.2m 
  flow(4) 
 Net (debt) / cash(5)               GBP(4.2)m     GBP1.9m   GBP(63.7)m    GBP7.1m 
 Adjusted earnings per share(6)         1.08p     (0.05)p      (0.50)p      2.96p 
 
 
 Statutory results              HY 21     HY 20       HY 19     FY 20 
 
 Operating profit/(loss)      GBP2.2m   GBP0.9m   GBP(0.2)m   GBP5.7m 
 Profit/(loss) before tax     GBP1.9m   GBP0.6m   GBP(3.6)m   GBP5.0m 
 Basic profit/(loss) per 
  share                         0.85p   (0.18)p    (44.79)p     2.44p 
 Diluted profit/(loss) per 
  share                         0.84p   (0.18)p    (44.79)p     2.44p 
 
 
 (1)   Adjusted EBITDA means operating profit before depreciation, 
        amortisation, share-based payments charge and exceptional 
        items in note 4 
 (2)   Adjusted operating profit means operating profit before 
        amortisation of acquired intangible assets, share-based 
        payments charge and exceptional items 
 (3)   Adjusted profit before tax means profit before tax before 
        amortisation of acquired intangible assets, share-based 
        payments charge and exceptional items 
 (4)   Underlying operating cash flow is calculated as Adjusted 
        EBITDA less movements in working capital, capital expenditure 
        and lease payments excluding movements in transaction related 
        accruals and payments in respect of acquisitions 
 (5)   Net (debt)/cash is calculated as cash and cash equivalents 
        less borrowings (excluding lease liabilities) 
 (6)   Adjusted Earnings Per Share ("EPS") represents Adjusted 
        Earnings meaning profit after tax before amortisation of 
        acquired intangible assets, share-based payments charge 
        and exceptional items divided by a weighted average number 
        of shares 
 

Group highlights and outlook

 
 --   The recovery in HY 21 has been strong with Group revenues 
       at GBP46.8m being 39.3% ahead of HY 20 (GBP33.6m) and slightly 
       lower than HY 19 (GBP48.1m) 
 --   Facilisgroup US Dollar ("USD") Annual Recurring Revenue 
       ("ARR") was 27.0% ahead of HY 20 and 44.8% ahead of HY 19 
 --   Facilisgroup achieved Adjusted EBITDA margins of 54.6%, 
       with further investment in people and technology, as we 
       remain focused on our stated aspiration to grow ARR to $50m 
       by the end of FY 24 
 --   Brand Addition revenues for FY 21 are expected to be well 
       ahead of FY 20 and slightly ahead of FY 19, demonstrating 
       its ability to win, grow and retain major client contracts 
 --   Cash outflow in HY 21 has supported the high value of Brand 
       Addition Consumer Promotion revenue in HY 21 amplifying 
       the normal in-year cycle. Working capital is reducing as 
       expected as client receipts are collected to terms 
 --   Net debt at 6 September was GBP4.8m and we expect Net cash 
       at 31 December 2021 to be ahead of previous market expectations 
       at no less than GBP8.0m (31 December 2020: GBP7.1m) 
 --   The Board is very encouraged by the Group's performance 
       in HY 21 and expects FY 21 to be at least in line with market 
       expectations 
 

Facilisgroup

 
 --   FY 21 USD ARR growth over prior year is expected to be approaching 
       30% 
 --   190 Partners at 31 August 2021 with a further 7 contracted 
       awaiting implementation 
 --   The increase in purchases through Preferred Suppliers is 
       ahead of management expectations 
 --   H2 21 Gross Merchandise Value running at 136% of H2 20 and 
       141% of H2 19 
 --   New ecommerce solution launched in beta form with 51 Partners 
       in early access 
 

Brand Addition

 
 --   Total FY 21 revenues expected to be well ahead of FY 20 
       and slightly ahead of FY 19 
 --   Significant growth in Consumer Promotions revenue expected 
       in FY 21, compared to both FY 20 and FY 19 
 --   Growth in Corporate Programmes revenue expected in FY 21, 
       compared to FY 20, supported by new business wins from FY 
       20 and recovery continues against FY 19 
 --   Total orders invoiced or received to be invoiced in 2021 
       at 31 August amounted to GBP81.8m, being 153% of 2020 (GBP53.4m) 
       and 114% of 2019 (GBP71.3m) 
 

Enquiries:

 
 The Pebble Group plc 
  Chris Lee, Chief Executive Officer 
  Claire Thomson, Chief Financial 
  Officer                                            +44 (0) 161 786 0415 
 Grant Thornton UK LLP (Nominated 
  Adviser) 
  Samantha Harrison / Harrison Clarke 
  / Lukas Girzadas                                   +44 (0) 20 7184 4384 
 Berenberg (Corporate Broker) 
  Chris Bowman / Jen Clarke / Arnav 
  Kapoor                                             +44 (0) 20 3207 7800 
 Belvedere Communications (Financial     thepebblegrouppr@belvederepr.com 
  PR)                                                +44 (0) 7715 769 078 
  Cat Valentine                                      +44 (0) 7967 816 525 
  Keeley Clarke 
 

About The Pebble Group plc - www.thepebblegroup.com

The Pebble Group is a provider of technology, services and products to the global promotional products industry, comprising two differentiated businesses, focused on specific areas of the promotional products market:

Facilisgroup - www.facilisgroup.com

Facilisgroup focuses on supporting the growth of mid-sized Promotional Product businesses in North America by providing a technology platform, which enables those businesses to benefit from significant business efficiency and gain meaningful supply chain advantage from the ability to purchase from quality suppliers under preferred terms.

Brand Addition - www.brandaddition.com

Brand Addition focuses upon providing promotional products and related services under contract to some of the world's most recognisable brands. Its largest contracts are valued in the millions of pounds with the products and services supplied being used for brand building, customer engagement and employee rewards. Working in close collaboration with its clients, Brand Addition designs products and product ranges, hosts client-branded global web stores and provides international sourcing and distribution solutions.

We categorise our revenues into two divisions, Corporate Programmes, that supports our clients' general marketing activities, and Consumer Promotions, that supports our clients in driving their own sales volumes.

A copy of the Half Year Results 2021 Investor Presentation will be available on the Company's website later today https://www.thepebblegroup.com/investors/results-reports-and-presentations/.

CHIEF EXECUTIVE OFFICER'S REVIEW

Overview

The focus during HY 21 has been the continued investment in our people and technology to support the excellent growth prospects of Facilisgroup, alongside demonstrating the ability of Brand Addition to recover quickly from the revenue reduction suffered in 2020. We have made good progress on these objectives.

Our teams across Asia, Europe and North America continue to be incredibly flexible and adapt quickly to support their colleagues, clients, Partners and suppliers. Their dedication and talent has resulted in our Group recovering strongly from the end-market demand challenges of 2020. The promotional products industry is recovering, albeit with disruption remaining within the supply chain which we expect to continue until at least Q2 22. Here again, our teams continue to lean on their experience, working with our suppliers for the long-term benefit of all stakeholders.

Against this backdrop, the Board is very encouraged by the Group's performance in HY 21.

In HY 21, Group revenue was GBP46.8m (HY 20: GBP33.6m, HY 19: GBP48.1m), generating Adjusted EBITDA of GBP4.4m (HY 20: GBP2.6m, HY 19: GBP5.3m) and Operating profit of GBP2.2m (HY 20: GBP0.9m, HY 19: GBP(0.2m)).

Below we summarise the results and progress of our businesses.

Facilisgroup

HY revenue and profit analysis Facilisgroup

 
                              HY 21    HY 20       HY 19 
 Recurring revenue          GBP5.4m  GBP4.8m     GBP4.1m 
 Other revenue              GBP0.2m  GBP0.3m     GBP0.5m 
                           --------  -------  ---------- 
 Total revenue              GBP5.6m  GBP5.1m     GBP4.6m 
 Gross profit               GBP5.6m  GBP5.1m     GBP4.6m 
 Gross profit margin           100%     100%        100% 
 Adjusted EBITDA            GBP3.1m  GBP2.9m     GBP2.4m 
 Operating profit/(loss)    GBP2.2m  GBP2.3m   GBP(2.2m) 
 

Our vision is to be the leading technology provider for the promotional products industry, using technology and services to propel forward the growth and efficiency of entrepreneurial distributors (Partners) and suppliers.

Our aspiration is to grow ARR to $50m by the end of 2024 through increasing user numbers and introducing new technology products into the promotional products industry.

We continue to be pleased with the progress made by the business. Total revenue in the Period has increased to GBP5.6m, 11.5% ahead of the same period in 2020 when measured in Sterling. Recurring revenue at $7.5m was encouragingly 27.0% ahead of HY 20, when measured in Facilisgroup's home currency of USD, and 44.8% ahead of HY 19.

We have made further investment in people and technology to support our aspirational growth plans. Alongside this investment, Facilisgroup delivered Adjusted EBITDA returns of 54.6% (HY 20: 57.8%, HY 19: 53.3%) and Operating profit of 39.2% (HY 20: 45.5%, HY 19: (48.5%)), demonstrating the highly profitable dynamics of the business model.

The number of Partners, a key value driver, has increased throughout the Period. Partner numbers today total 190 (31 December 2020: 175), with a further 7 contracted and awaiting implementation.

The Gross Merchandise Value (GMV) processed by Partners through Facilisgroup technology in the Period to 31 August 2021 was strong at $668m. This figure is comparable with HY 20, which included a small number of large value sales of personal protective equipment creating a spike in GMV.

To date in H2 21, GMV has been accelerating compared to prior years, running at 136% of H2 20 and 141% of H2 19, a positive reflection of the increasing Partner numbers and the recovering end markets of our Partners.

The fee structures within the business result in a very robust and predictable recurring revenue stream.

Our Management Fee (c.70% divisional income in FY 20) has grown in line with Partner numbers.

Our Marketing Fund (c.25% divisional income in FY 20) has benefited from an increase in the proportion of purchases made with Preferred Suppliers, which is returning towards FY 19 levels along with an underlying fee improvement from the delivery of additional efficiencies in the Preferred Supplier to Partner workflow.

As planned, our first ecommerce product, allowing for the easy implementation of online popup stores, was launched in beta form to our Partners in the Period. Uptake has been positive with 51 Partners utilising the product in early access. The revenue impact from this product is expected to start from Q2 22.

Integration of this ecommerce platform, which includes the online popup store, into our existing order workflow software is now expected to be in Q2 22, as recent development time has been focused on enhanced functionality following Partner feedback. The launch of this product into the wider promotional products market is expected in late 2022.

In order to clearly articulate our expanded offering to our target markets within the North American promotional products industry, we have rebranded our order workflow product, upon which the business has traded to date, from @ease to Syncore and our new ecommerce platform will go to market under the brand Commercio.

From the above activities, we expect to meet our FY 21 aspirational milestones, as set out in our Audited Final Results 2020 announcement of 23 March 2021, and USD ARR growth to be approaching 30% in FY 21.

Brand Addition

HY revenue and profit analysis Brand Addition

 
                               HY 21      HY 20      HY 19 
 Revenue                    GBP41.1m   GBP28.5m   GBP43.6m 
 Gross profit               GBP11.6m    GBP8.6m   GBP12.8m 
 Gross profit margin           28.2%      30.0%      29.4% 
 Adjusted EBITDA             GBP2.5m    GBP0.4m    GBP3.3m 
 Operating profit/(loss)     GBP1.2m  GBP(0.7)m    GBP2.5m 
 

Our vision is to be recognised as the supplier of choice for global brands that use creative merchandise as a key stakeholder engagement tool.

Our strategy is to grow revenues organically through long-term, contracted relationships, by expanding the spend of our existing clients, whilst attracting new client contracts.

Revenue for HY 21 has increased to GBP41.1m, being 144% of 2020 and 94.4% of 2019. This recovery over HY 20 and return towards HY 19 revenue reflects an excellent performance, underpinned by significant growth in our Consumer Promotions division (40% FY 20 divisional sales) as existing clients have consolidated their spend across geographies using Brand Addition as a preferred and trusted supplier.

Gross profit decreased slightly in the Period, as expected, to 28.2% (HY 20: 30.0%, HY 19: 29.4%), as the business successfully continues to manage its clients through the supply chain challenges resulting from Brexit and global freight and labour disruption together with implementing two significant new business wins from 2020. Our medium term aim remains a 30% Gross profit target.

The costs between Gross profit and Adjusted EBITDA are predominately people related. These costs have increased from HY 20, when we utilised the UK Job Retention Scheme and were supported by our team taking temporary salary reductions. Neither of these reductions to costs have been applicable in HY 21.

The above resulted in Adjusted EBITDA returns of 6.1% (HY 20: 1.2%, HY 19: 7.5%) and Operating profit returns of 2.9% (HY 20: (2.4%), HY 19: 5.7%).

Looking to FY 21, total orders invoiced or received to be invoiced in 2021 at 31 August amounted to GBP81.8m, being 153% of 2020 (GBP53.4m) and 114% of 2019 (GBP71.3m) against FY 20 revenue of GBP72.6m and FY 19 revenue of GBP97.9m.

Through the normal order receipt to invoice cycle, the majority of our Consumer Promotion orders that will be invoiced in FY 21 have now been received. Therefore, the revenue in the remainder of the year will be generated primarily from our Corporate Programmes division, which is recovering towards 2019 levels. Corporate Programme orders in the five weeks to the end of August were c.90% of the comparable period in 2019.

From the strong value of orders already received, alongside current activity, we expect FY 21 revenues in Brand Addition to be significantly ahead of FY 20 and slightly ahead of FY 19.

Added to the above, the business has continued to attract new client contracts which will positively impact sales in 2022.

Environmental, Social and Governance ("ESG")

We are pleased to announce that we will be publishing our first ESG Report in October 2021, which will set out the strategy and framework that underpins our approach. Details of how to access this report will be announced on publication.

Outlook

The highly recurring nature of the revenues at Facilisgroup and the value of orders received to date at Brand Addition lead the Board to be confident that FY 21 performance will be at least in line with market expectations.

We believe the prospects for the Group to be strong.

Christopher Lee

Chief Executive Officer

7 September 2021

CHIEF FINANCIAL OFFICER'S REVIEW

 
                                        HY 21         HY 20         FY 20 
                                    Unaudited     Unaudited       Audited 
                                        GBP'm         GBP'm         GBP'm 
 Revenue                                 46.8          33.6          82.4 
 Gross profit                            17.2          13.6          31.0 
 Gross profit margin                    36.8%         40.6%         37.6% 
 Adjusted EBITDA                          4.4           2.6           9.8 
 Adjusted EBITDA margin                  9.5%          7.6%         11.8% 
 Depreciation and amortisation          (2.0)         (1.7)         (3.5) 
 Share-based payment charge             (0.2)             -             - 
 Exceptional items                          -             -         (0.6) 
 Operating profit                         2.2           0.9           5.7 
 Net finance costs                      (0.3)         (0.3)         (0.7) 
 Profit before tax                        1.9           0.6           5.0 
 Tax                                    (0.5)         (0.9)         (0.9) 
 Profit/(Loss) for the Period             1.4         (0.3)           4.1 
 
 Weighted average number of 
  shares                          167,450,893   167,450,893   167,450,893 
 Adjusted EPS                           1.08p       (0.05)p         2.96p 
 Basic EPS                              0.85p       (0.18)p         2.44p 
 

Revenue

Revenue for the Period to 30 June was GBP46.8m (HY 20: GBP33.6m), an increase of GBP13.2m (39.3%) compared to the same period in 2020. Of this increase, GBP12.6m relates to Brand Addition from growth in the Consumer Promotions division (GBP7.2m) and a recovery in the Corporate Programmes division (GBP5.4m). Facilisgroup total revenues increased GBP0.6m (11.5%) with the Sterling growth against prior year being reduced by the strength of Sterling against USD. Facilisgroup ARR growth when measured in its home currency of USD was 27.0%. This was achieved through increases in our Management Fees from additional Partner numbers and a growth in our Marketing Fund where we benefited from Partners returning towards normal purchasing patterns through our Preferred Suppliers and an underlying fee increase.

Gross profit

Gross profit as a percentage of revenue was 36.8% (HY 20: 40.6%). This largely reflects the impact of the increased weighting of Brand Addition sales as a proportion of the total Group, as the business recovers from the sales impact in 2020. In Brand Addition, there was also a 1.8 p.p.t reduction in margin as new business, which has lower than average initial margins, impacted the sales mix in the short term and the business navigating a period of increased costs associated with Brexit, freight rate pricing, and freight capacity challenges.

Adjusted EBITDA

Adjusted EBITDA was GBP4.4m (HY 20: GBP2.6m). The movement from HY 20 is made up as follows:

 
 -   Facilisgroup GBP0.2m increase from incremental revenue net 
      of the costs of investment in the team to support delivery 
      of the 2024 recurring revenue aspirations; 
 -   Brand Addition GBP2.1m increase driven by GBP3.0m incremental 
      sales volumes offset in part by GBP0.9m additional people 
      costs as HY 20 included contributions or savings from the 
      use of Government furlough or equivalent schemes, and temporary 
      salary and bonus reductions; and 
 -   Central costs increased by GBP0.5m in the period, GBP0.1m 
      from temporary salary savings in HY 20, the balance being 
      incremental costs through the growth of the team and the 
      Group's investment in ESG. 
 

The Adjusted EBITDA margin increased to 9.5% (HY 20: 7.6%) as revenues in Brand Addition return towards 2019 levels.

Depreciation and amortisation

The total charge for the Period was GBP2.0m (HY 20: GBP1.7m) of which GBP1.1m (HY 20: GBP0.9m) related to the amortisation of intangible assets. This increase is in line with expectation and reflects the Group's continued investment in its technology. GBP0.7m of the charge relates to depreciation on leases capitalised in accordance with IFRS 16, an increase of GBP0.2m on the previous year. Both increases reflect investment in the Group's infrastructure as it scales to meet its 2024 aspirations.

Share-based payments

The total charge for the Period under IFRS 2 "Share-based payments" was GBP0.2m (HY 20: nil). This charge related to the 2020 awards made under the 2019 Long Term Incentive Plan.

Operating profit

Operating profit for the Period was GBP2.2m (HY 20: GBP0.9m).

Taxation

The tax charge for the Period to 30 June was GBP0.5m (2020: GBP0.9m) and is based on full year Group expected tax rates for 2021 of c.25%. This is higher than the UK Corporation tax rate due to the proportion of Group profits earned overseas where the rates are higher than the UK.

Earnings per share

Adjusted weighted average earnings per share for the Period was 1.08p (HY 20: (0.05)p) reflecting the increase in Adjusted EBITDA for the Period as discussed above.

Basic earnings per share was 0.85p (HY 20: (0.18)p).

Dividends

On admission to AIM in December 2019, the Group's stated intention was to make dividend payments of c.30% of profit after tax. This policy remains in place. However, as we believe the opportunities ahead of us are significant, in particular investment in Facilisgroup, we have taken the decision to retain cash in the business and not to pay an interim dividend in 2021. The timing of implementing our stated dividend policy will be considered again against the Group's full year progress and an update provided at that time.

Cashflow

The Group had a cash balance of GBP3.6m at 30 June 2021 (30 June 2020: GBP10.2m), which included GBP7.7m drawn down from its GBP10.0m committed revolving credit facility (30 June 2020: GBP8.4m).

Cashflow for the Period is set out below

 
                                                  HY 21       HY 20     FY 20 
                                              Unaudited   Unaudited   Audited 
                                                  GBP'm       GBP'm     GBP'm 
 Adjusted EBITDA                                    4.4         2.6       9.8 
 Movement in working capital excluding 
  IPO related accruals                           (12.3)       (4.4)       1.7 
 Capital expenditure excluding acquisition 
  of intangible assets                            (2.0)       (1.3)     (3.1) 
 Leases                                           (0.6)       (0.5)     (1.2) 
                                             ----------  ----------  -------- 
 Underlying operating cash flow                  (10.5)       (3.6)       7.2 
 Movement in working capital IPO related 
  accruals                                        (0.4)       (3.4)     (3.5) 
 Acquisition of intangible assets                 (0.2)           -     (2.6) 
                                             ----------  ----------  -------- 
 Adjusted operating cash flow                    (11.1)       (7.0)       1.1 
 Tax paid                                         (0.1)       (0.2)     (1.3) 
 Net finance cash flows                             7.5         8.1     (0.7) 
 Exceptional items                                    -           -     (0.5) 
 Exchange loss                                      0.2         0.5     (0.4) 
                                             ----------  ----------  -------- 
 Net cash flow                                    (3.5)         1.4     (1.8) 
 

The movement in working capital in the Period was GBP(12.3m) (HY 20: GBP(4.4m)). The outflow has supported the high value of Brand Addition Consumer Promotion revenue in HY 21 amplifying the normal in-year cycle which peaks in Q3 as these orders are delivered and invoiced. The incremental outflow of GBP7.9m relates to the significant increased trading volumes principally (i) GBP2.5m Consumer Promotions orders in transit to the customer; and (ii) GBP5.4m trade receivables net of trade payables.

Capital expenditure in the Period was GBP2.0m (HY 20: GBP1.3m). The GBP0.7m additional spend relates to the ongoing investment in Facilisgroup technology products.

Lease payments relate to leases capitalised in accordance with IFRS 16. The increase arises as the Group entered into a new office for Facilisgroup in December 2020.

Net finance cash flows in the Period of GBP7.5m (HY 20: GBP8.1m) relate to utilisations on committed facilities less interest payments in respect of leases capitalised in accordance with IFRS 16.

Cash and liquidity

The Group's working capital cycle is unwinding as expected, the high point experienced in the period from June to August 2021 is reducing as we move through the year, with clients and Partners continuing to pay to agreed terms. The Group had Net debt of GBP4.8m at 6 September 2021. This includes a GBP9.2m drawdown from the GBP10.0m committed revolving credit facility. We expect Net cash at the full year end, 31 December 2021 to be ahead of previous expectation at no less than GBP8.0m (31 December 2020: GBP7.1m).

Claire Thomson

Chief Financial Officer

7 September 2021

CONSOLIDATED INCOME STATEMENT

 
                                                    Unaudited       Unaudited        Audited 
                                                 Period ended    Period ended     Year ended 
                                                      30 June         30 June    31 December 
                                        Notes            2021            2020           2020 
                                               --------------  --------------  ------------- 
                                                      GBP'000         GBP'000        GBP'000 
 
 Revenue                                               46,759          33,564         82,374 
 Cost of goods sold                                  (29,533)        (19,951)       (51,382) 
                                               --------------  --------------  ------------- 
 Gross profit                                          17,226          13,613         30,992 
 
 Operating expenses                                  (15,064)        (12,717)       (24,781) 
 Operating expenses - exceptionals       4                  -               -          (542) 
                                               --------------  --------------  ------------- 
 Total operating expenses                            (15,064)        (12,717)       (25,323) 
                                               --------------  --------------  ------------- 
 Operating profit                                       2,162             896          5,669 
 
 Analysed as: 
 Adjusted EBITDA(1)                                     4,448           2,564          9,755 
 Depreciation                            8              (986)           (719)        (1,567) 
 Amortisation                            7            (1,071)           (949)        (1,963) 
 Share-based payment charge             12              (229)               -           (14) 
 Exceptional items                       4                  -               -          (542) 
 Operating profit                                       2,162             896          5,669 
-----------------------------------  --------  --------------  -------------- 
 
 Finance expense                                        (269)           (303)          (700) 
                                               --------------  --------------  ------------- 
 Profit before taxation                                 1,893             593          4,969 
 
 Income tax expense                      5              (473)           (897)          (889) 
                                               --------------  --------------  ------------- 
 Profit/(loss) for the period                           1,420           (304)          4,080 
                                               ==============  ==============  ============= 
 
 Basic profit/(loss) per share           6              0.85p         (0.18)p          2.44p 
                                               ==============  ==============  ============= 
 
 Diluted profit/(loss) per 
  share                                  6              0.84p         (0.18)p          2.44p 
                                               ==============  ==============  ============= 
 

Note 1: Adjusted EBITDA, which is defined as operating profit before depreciation, amortisation, exceptional items and share-based payment charge is a non-GAAP metric used by management and is not an IFRS disclosure.

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

 
                                                    Unaudited       Unaudited        Audited 
                                                 Period ended    Period ended     Year ended 
                                                      30 June         30 June    31 December 
                                                         2021            2020           2020 
                                               --------------  --------------  ------------- 
                                                      GBP'000         GBP'000        GBP'000 
 Items that may be subsequently reclassified 
  to profit and loss 
 Foreign operations - foreign currency 
  translation differences                               (218)           1,299          (708) 
                                               --------------  --------------  ------------- 
 Other comprehensive (expense)/income 
  for the period/year                                   (218)           1,299          (708) 
 
 Profit/(loss) for the period/year                      1,420           (304)          4,080 
                                               --------------  --------------  ------------- 
 Total comprehensive income for the 
  period/year                                           1,202             995          3,372 
                                               ==============  ==============  ============= 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
                                          Unaudited   Unaudited     Audited 
                                              As at       As at    As at 31 
                                            30 June     30 June    December 
                                  Notes        2021        2020        2020 
                                         ----------  ----------  ---------- 
                                            GBP'000     GBP'000     GBP'000 
 ASSETS 
 Non-current assets 
 Intangible assets                  7        54,387      51,140      54,017 
 Property, plant and equipment      8         8,460       6,182       9,102 
 Deferred tax asset                             316         167         493 
 Total non-current assets                    63,163      57,489      63,612 
                                         ----------  ----------  ---------- 
 
 Current assets 
 Inventories                        9        15,635      12,404      12,109 
 Trade and other receivables                 30,032      18,920      20,988 
 Cash and cash equivalents                    3,601      10,249       7,066 
 Current tax asset                              533           -         829 
                                         ----------  ----------  ---------- 
 Total current assets                        49,801      41,573      40,992 
                                         ----------  ----------  ---------- 
 
 TOTAL ASSETS                               112,964      99,062     104,604 
                                         ==========  ==========  ========== 
 
 LIABILITIES 
 Non-current liabilities 
 Lease liability                   10         7,068       5,388       7,645 
 Trade and other payables                         -           -         930 
 Deferred tax liability                       2,630       1,904       2,637 
 Total non-current liabilities                9,698       7,292      11,212 
                                         ----------  ----------  ---------- 
 
 Current liabilities 
 Borrowings                                   7,750       8,368           - 
 Lease liability                   10         1,422       1,003       1,334 
 Trade and other payables                    26,399      17,647      25,775 
 Current tax liability                            -         859           - 
 Total current liabilities                   35,571      27,877      27,109 
                                         ----------  ----------  ---------- 
 
 TOTAL LIABILITIES                           45,269      35,169      38,321 
                                         ==========  ==========  ========== 
 
 NET ASSETS                                  67,695      63,893      66,283 
                                         ==========  ==========  ========== 
 
 Share capital                                1,675       1,800       1,800 
 Share premium                               78,451      78,451      78,451 
 Capital reserve                                125           -           - 
 Merger reserve                           (103,581)   (103,581)   (103,581) 
 Translation reserve                        (1,822)         403     (1,604) 
 Share-based payments reserve                   223           -          13 
 Retained earnings                           92,624      86,820      91,204 
                                         ----------  ----------  ---------- 
 TOTAL EQUITY                                67,695      63,893      66,283 
                                         ==========  ==========  ========== 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
 
                                                                                     Share-based 
                               Share     Share    Capital     Merger    Translation     payments   Retained    Total 
                             capital   premium    reserve    reserve        reserve      reserve   earnings   equity 
                          ----------  --------  ---------  ---------  -------------  -----------  ---------  ------- 
                             GBP'000   GBP'000               GBP'000        GBP'000                 GBP'000  GBP'000 
 
At 1 January 2020              1,800    78,451          -  (103,581)          (896)            -     87,124   62,898 
                          ==========  ========  =========  =========  =============  ===========  =========  ======= 
 
Loss for the period                -         -          -          -              -            -      (304)    (304) 
Other comprehensive 
 income for the period             -         -          -          -          1,299            -          -    1,299 
Total comprehensive 
 income/(expense)                  -         -          -          -          1,299            -      (304)      995 
At 30 June 2020                1,800    78,451          -  (103,581)            403            -     86,820   63,893 
                          ----------  --------  ---------  ---------  -------------  -----------  ---------  ------- 
 
Profit for the period              -         -          -          -              -            -      4,384    4,384 
Other comprehensive 
 expense for the period            -         -          -          -        (2,007)            -          -  (2,007) 
                          ----------  --------  ---------  ---------  -------------  -----------  ---------  ------- 
Total comprehensive 
 income/(expense)                  -         -          -          -        (2,007)            -      4,384    2,377 
                          ----------  --------  ---------  ---------  -------------  -----------  ---------  ------- 
 
Employee share schemes 
 - value of employee 
 services                          -         -          -          -              -           13          -       13 
                          ----------  --------  ---------  ---------  -------------  -----------  ---------  ------- 
Total transactions 
 with owners recognised 
 in equity                         -         -          -          -              -           13          -       13 
                          ----------  --------  ---------  ---------  -------------  -----------  ---------  ------- 
At 31 December 2020            1,800    78,451          -  (103,581)        (1,604)           13     91,204   66,283 
                          ----------  --------  ---------  ---------  -------------  -----------  ---------  ------- 
 
Profit for the period              -         -          -          -              -            -      1,420    1,420 
Other comprehensive 
 expense for the period            -         -          -          -          (218)            -          -    (218) 
Total comprehensive 
 income/(expense)                  -         -          -          -          (218)            -      1,420    1,202 
Purchase of deferred 
 shares                        (125)         -        125          -              -            -          -        - 
Employee share schemes 
 - value of employee 
 services                          -         -          -          -              -          210          -      210 
Total transactions 
 with owners recognised 
 in equity                     (125)         -        125          -              -          210          -      210 
At 30 June 2021                1,675    78,451        125  (103,581)        (1,822)          223     92,624   67,695 
                          ----------  --------  ---------  ---------  -------------  -----------  ---------  ------- 
 

CONSOLIDATED CASH FLOW STATEMENT

 
                                                                      Unaudited       Unaudited        Audited 
                                                                   Period ended    Period ended     Year ended 
                                                                        30 June         30 June    31 December 
                                                          Notes            2021            2020           2020 
                                                                 --------------  --------------  ------------- 
                                                                        GBP'000         GBP'000        GBP'000 
 
 Operating profit                                                         2,162             896          5,669 
 Adjustments for: 
 
        *    Amortisation                                   7             1,071             949          1,963 
 
        *    Depreciation                                   8               986             719          1,567 
 
        *    Share-based payments charge                   12               229               -             13 
                                                                              -              10              - 
        *    Loss on disposal of fixed assets 
 Cash flows from operating activities 
  before changes in working capital                                       4,448           2,574          9,212 
 
 
        *    Change in inventories                                      (3,526)         (4,452)        (4,157) 
 
        *    Change in trade receivables                                (9,044)           6,624          4,556 
 
        *    Change in trade payables                                     (129)         (9,920)        (2,146) 
                                                                 --------------  --------------  ------------- 
 Cash flows (used in)/from operating 
  activities                                                            (8,251)         (5,174)          7,465 
 
 
        *    Income taxes paid                                             (46)           (236)        (1,313) 
                                                                 --------------  --------------  ------------- 
 Net cash flows (used in)/from operating 
  activities                                                            (8,297)         (5,410)          6,152 
                                                                 --------------  --------------  ------------- 
 
 Cash flows from investing activities 
 
        *    Purchase of property, plant and equipment                    (257)           (236)          (806) 
 
        *    Purchase of intangible assets                              (1,983)         (1,054)        (4,871) 
 Net cash flows used in investing 
  activities                                                            (2,240)         (1,290)        (5,677) 
                                                                 --------------  --------------  ------------- 
 
 Cash flows from financing activities 
 
        *    Lease payments                                               (594)           (521)        (1,141) 
 
        *    Interest paid                                                (269)           (303)          (700) 
 
        *    Receipts from secured loan facilities                        7,750           8,368              - 
 Net cash flows from/(used in) financing 
  activities                                                              6,887           7,544        (1,841) 
                                                                 --------------  --------------  ------------- 
 
 NET CASH FLOWS                                                         (3,650)             844        (1,366) 
                                                                 ==============  ==============  ============= 
 
 Cash and cash equivalents at beginning 
  of period                                                               7,066           8,861          8,861 
 Effect of exchange rate fluctuations 
  on cash held                                                              185             544          (429) 
                                                                 --------------  --------------  ------------- 
 Cash and cash equivalents at end 
  of period                                                               3,601          10,249          7,066 
                                                                 --------------  --------------  ------------- 
 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL INFORMATION

   1.     GENERAL INFORMATION 

The principal activity of The Pebble Group plc (the "Company") is that of a holding company and the principal activity of the Company and its subsidiaries (the "Group") is the sale of products, services and technology to the promotional merchandise industry. The Group has two segments, Brand Addition and Facilisgroup. For Brand Addition this is the sale of promotional products internationally, to many of the world's best-known brands, and for Facilisgroup the provision of technology, consolidated buying power and community learning and networking events to SME promotional product distributors in North America, its Partners, through subscription-based services.

The Company was incorporated on 27 September 2019 in the United Kingdom and is a public company limited by shares registered in England and Wales. The registered office of the Company is Broadway House, Trafford Wharf Road, Trafford Park, Manchester, England M17 1DD. The Company registration number is 12231361.

   2.     BASIS OF PREPARATION 

These condensed consolidated interim financial statements of the Group are for the period ended 30 June 2021. They have been prepared on the basis of the policies set out in the 2020 annual financial statements and in accordance with UK adopted IAS 34. Financial information for the period ended 30 June 2020 included herein is derived from the condensed consolidated interim financial statements for that period.

The condensed consolidated interim financial statements have not been reviewed or audited, nor do they comprise statutory accounts for the purpose of Section 434 of the Companies Act 2006, and do not include all of the information or disclosures required in the annual financial statements and should therefore be read in conjunction with the Group's 2020 annual financial statements, which were prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

Financial information for the year ended 31 December 2020 included herein is derived from the statutory accounts for that year, which have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain a statement under Section 498 of the Companies Act 2006.

The condensed consolidated interim financial statements are presented in the Group's functional currency of pounds Sterling and all values are rounded to the nearest thousand (GBP'000) except when otherwise indicated.

Accounting Policies

The accounting policies adopted in the preparation of the condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2020 as described in the Group's Annual Report and full financial statements for that year and as available on the Group's website ( www.thepebblegroup.com ).

Taxation

Taxes on income in the interim periods are accrued using management's best estimate of the weighted average annual tax rate that would be applicable to expected total annual earnings.

Forward looking statements

Certain statement in these condensed consolidated interim financial statements are forward looking with respect to the operations, strategy, performance, financial condition and growth opportunities of the Group. The terms "expect", "anticipate", "should be", "will be", "is likely to" and similar expressions identify forward-looking statements. Although the Board believes that the expectations reflected in these forward-looking statements are reasonable, by their nature these statements are based on assumptions and are subject to a number of risks and uncertainties. Actual events could differ materially from those expressed or implied by these forward-looking statements. Factors which may cause future outcomes to differ from those foreseen in forward-looking statements include, without limitation: general economic conditions and business conditions in the Group's markets; customers' expectations and behaviours; supply chain developments; technology changes; the actions of competitors; exchange rate fluctuations; and legislative, fiscal and regulatory developments. Information contained in these condensed consolidated interim financial statements relating to the Group should not be relied upon as a guide to future performance.

Key risks and uncertainties

The Group has in place a structured risk management process which identifies key risks and uncertainties along with their associated mitigants. The key risks and uncertainties that could affect the Group's medium-term performance, and the factors that mitigate those risks have not substantially changed from those set out in the Group's Annual Report which can be found on the Group's website ( www.thepebblegroup.com ) and are summarised below.

 
 Market                              Strategic                        Financial                             Operational 
 
  *    Pandemic related disruption    *    Concentrated client base    *    Currency and foreign exchange    *    Retaining and attracting key personnel 
 
 
  *    Macroeconomic environment      *    Acquisition risk                                                  *    Reliance on IT systems 
 
 
                                                                                                             *    Breach of IT security 
 
 
                                                                                                             *    Climate Change 
                                    -------------------------------  ------------------------------------  --------------------------------------------- 
 

Going Concern statement

The Group meets its day-to-day working capital requirements through its own cash balances and committed banking facilities. In assessing the appropriateness of adopting the going concern basis in the preparation of these condensed consolidated interim financial statements, the Directors have prepared cash flow forecasts and projections up to 31 December 2022.

The forecasts and projections, which the Directors consider to be prudent, have been further sensitised by applying reductions to revenue growth and margin, to consider a severe but plausible downside. Under both the base and sensitised case the Group is expected to have headroom against covenants and a sufficient level of financial resources available through existing facilities when the future funding requirements of the Group are compared with the level of committed available facilities. Based on this, the Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements.

   3.     SEGMENTAL ANALYSIS 

The chief operating decision-maker has been identified as the Board of Directors. The Board of Directors reviews The Pebble Group Plc's internal reporting in order to assess performance and allocate resources. The Board of Directors has determined that the operating segments are those of Brand Addition and Facilisgroup.

Segment information about the above segments is presented below:

Income statement for the period ended 30 June 2021

 
                                                                                Period ended 
                                                                      Central        30 June 
                                  Brand Addition   Facilisgroup    operations           2021 
                                 ---------------  -------------  ------------  ------------- 
                                         GBP'000        GBP'000       GBP'000        GBP'000 
 
 Revenue                                  41,124          5,635             -         46,759 
 Cost of goods sold                     (29,533)              -             -       (29,533) 
                                 ---------------  -------------  ------------  ------------- 
 Gross profit                             11,591          5,635             -         17,226 
 
 Operating expenses                     (10,379)        (3,428)       (1,257)       (15,064) 
 Total operating expenses               (10,379)        (3,428)       (1,257)       (15,064) 
                                 ---------------  -------------  ------------  ------------- 
 Operating profit/(loss)                   1,212          2,207       (1,257)          2,162 
 
 Analysed as: 
 Adjusted EBITDA                           2,523          3,076       (1,151)          4,448 
 Depreciation                              (705)          (260)          (21)          (986) 
 Amortisation                              (533)          (538)             -        (1,071) 
 Share-based payment charge                 (73)           (71)          (85)          (229) 
 Operating profit/(loss)                   1,212          2,207       (1,257)          2,162 
-------------------------------  ---------------  -------------  ------------ 
 
 Finance expense                           (191)           (15)          (63)          (269) 
                                 ---------------  -------------  ------------  ------------- 
 Profit/(loss) before taxation             1,021          2,192       (1,320)          1,893 
 
 Income tax expense                        (255)          (548)           330          (473) 
                                 ---------------  -------------  ------------  ------------- 
 Profit/(loss) for the period                766          1,644         (990)          1,420 
                                 ===============  =============  ============  ============= 
 

Due to the timing on the delivery of orders, the Brand Addition segment of The Pebble Group Plc traditionally raises a higher number of invoices in the period July to December which results in The Pebble Group Plc's performance being weighted to the second half of the year.

All the above revenues are generated from contracts with customers.

Income statement for the period ended 30 June 2020

 
                                                                                Period ended 
                                                                      Central        30 June 
                                  Brand Addition   Facilisgroup    operations           2020 
                                 ---------------  -------------  ------------  ------------- 
                                         GBP'000        GBP'000       GBP'000        GBP'000 
 
 Revenue                                  28,511          5,053             -         33,564 
 Cost of goods sold                     (19,951)              -             -       (19,951) 
                                 ---------------  -------------  ------------  ------------- 
 Gross profit                              8,560          5,053             -         13,613 
 
 Operating expenses                      (9,251)        (2,752)         (714)       (12,717) 
 Total operating expenses                (9,251)        (2,752)         (714)       (12,717) 
                                 ---------------  -------------  ------------  ------------- 
 Operating profit/(loss)                   (691)          2,301         (714)            896 
 
 Analysed as: 
 Adjusted EBITDA                             355          2,923         (714)          2,564 
 Depreciation                              (612)          (107)             -          (719) 
 Amortisation                              (434)          (515)             -          (949) 
 Exceptional items                             -              -             -              - 
                                                  -------------  ------------  ------------- 
 Operating profit/(loss)                   (691)          2,301         (714)            896 
-------------------------------  ---------------  -------------  ------------  ------------- 
 
 Finance expense                           (219)           (15)          (69)          (303) 
                                 ---------------  -------------  ------------  ------------- 
 Profit/(loss) before taxation             (910)          2,286         (783)            593 
 
 Income tax expense                        (303)          (594)             -          (897) 
                                 ---------------  -------------  ------------  ------------- 
 Profit/(loss) for the period            (1,213)          1,692         (783)          (304) 
                                 ===============  =============  ============  ============= 
 

Income statement for the year ended 31 December 2020

 
                                                                                     Year ended 
                                                                         Central    31 December 
                                     Brand Addition   Facilisgroup    operations           2020 
                                    ---------------  -------------  ------------  ------------- 
                                            GBP'000        GBP'000       GBP'000        GBP'000 
 
 Revenue                                     72,608          9,766             -         82,374 
 Cost of goods sold                        (51,382)              -             -       (51,382) 
                                    ---------------  -------------  ------------  ------------- 
 Gross profit                                21,226          9,766             -         30,992 
 
 Operating expenses                        (18,233)        (5,077)       (1,471)       (24,781) 
 Operating expenses - exceptional             (429)           (42)          (71)          (542) 
 Total operating expenses                  (18,662)        (5,119)       (1,542)       (25,323) 
 Operating profit/(loss)                      2,564          4,647       (1,542)          5,669 
 
 Analysed as: 
 Adjusted EBITDA                              5,209          5,994       (1,448)          9,755 
 Depreciation                               (1,316)          (242)           (9)        (1,567) 
 Amortisation                                 (900)        (1,063)             -        (1,963) 
 Share-based payment charge                       -              -          (14)           (14) 
 Exceptional items                            (429)           (42)          (71)          (542) 
 Total operating profit/(loss)                2,564          4,647       (1,542)          5,669 
----------------------------------  ---------------  -------------  ------------ 
 
 Finance expense                              (433)           (29)         (238)          (700) 
                                    ---------------  -------------  ------------  ------------- 
 Profit/(loss) before taxation                2,131          4,618       (1,780)          4,969 
 
 Income tax expense                           (176)        (1,182)           469          (889) 
                                    ---------------  -------------  ------------  ------------- 
 Profit/(loss) for the year                   1,955          3,436       (1,311)          4,080 
                                    ===============  =============  ============  ============= 
 

Statement of Financial Position as at 30 June 2021

 
                                                                                   As at 
                                                                      Central    30 June 
                                  Brand Addition   Facilisgroup    operations       2021 
                                 ---------------  -------------  ------------  --------- 
                                         GBP'000        GBP'000       GBP'000    GBP'000 
 ASSETS 
 Non-current assets 
 Intangible assets                        37,744         16,643             -     54,387 
 Property, plant and equipment             5,146          3,215            99      8,460 
 Deferred tax asset                           41             19           256        316 
 Total non-current assets                 42,931         19,877           355     63,163 
                                 ---------------  -------------  ------------  --------- 
 
 Current assets 
 Inventories                              15,635              -             -     15,635 
 Trade and other receivables              27,524          2,456            52     30,032 
 Cash and cash equivalents                 2,967            394           240      3,601 
 Current tax asset                         (193)            194           532        533 
                                 ---------------  -------------  ------------  --------- 
 Total current assets                     45,933          3,044           824     49,801 
                                 ---------------  -------------  ------------  --------- 
 
 TOTAL ASSETS                             88,864         22,921         1,179    112,964 
                                 ===============  =============  ============  ========= 
 
 LIABILITIES 
 Non-current liabilities 
 Lease liability                           4,630          2,438             -      7,068 
 Deferred tax liability                        -          2,630             -      2,630 
 Total non-current liabilities             4,630          5,068             -      9,698 
                                 ---------------  -------------  ------------  --------- 
 
 Current liabilities 
 Borrowings                                7,750              -             -      7,750 
 Lease liability                           1,100            322             -      1,422 
 Trade and other payables                 23,462          2,405           532     26,399 
 Total current liabilities                32,312          2,727           532     35,571 
                                 ---------------  -------------  ------------  --------- 
 
 TOTAL LIABILITIES                        36,942          7,795           532     45,269 
                                 ===============  =============  ============  ========= 
 
 NET ASSETS                               51,922         15,126           647     67,695 
                                 ===============  =============  ============  ========= 
 

Statement of Financial Position as at 30 June 2020

 
                                                                                   As at 
                                                                      Central    30 June 
                                  Brand Addition   Facilisgroup    operations       2020 
                                 ---------------  -------------  ------------  --------- 
                                         GBP'000        GBP'000       GBP'000    GBP'000 
 ASSETS 
 Non-current assets 
 Intangible assets                        37,313         13,827             -     51,140 
 Property, plant and equipment             5,440            742             -      6,182 
 Deferred tax asset                          167              -             -        167 
 Total non-current assets                 42,920         14,569             -     57,489 
                                 ---------------  -------------  ------------  --------- 
 
 Current assets 
 Inventories                              12,404              -             -     12,404 
 Trade and other receivables              17,044          1,746           130     18,920 
 Cash and cash equivalents                 3,101          2,412         4,736     10,249 
                                 ---------------  -------------  ------------  --------- 
 Total current assets                     32,549          4,158         4,866     41,573 
                                 ---------------  -------------  ------------  --------- 
 
 TOTAL ASSETS                             75,469         18,727         4,866     99,062 
                                 ===============  =============  ============  ========= 
 
 LIABILITIES 
 Non-current liabilities 
 Lease liability                           5,082            306             -      5,388 
 Deferred tax liability                        -          1,904             -      1,904 
 Total non-current liabilities             5,082          2,210             -      7,292 
                                 ---------------  -------------  ------------  --------- 
 
 Current liabilities 
 Borrowings                                8,368              -             -      8,368 
 Lease liability                             879            124             -      1,003 
 Trade and other payables                 14,837          2,004           806     17,647 
 Current tax liability                       372            532          (45)        859 
 Total current liabilities                24,456          2,660           761     27,877 
                                 ---------------  -------------  ------------  --------- 
 
 TOTAL LIABILITIES                        29,538          4,870           761     35,169 
                                 ===============  =============  ============  ========= 
 
 NET ASSETS                               45,931         13,857         4,105     63,893 
                                 ===============  =============  ============  ========= 
 

Statement of financial position as at 31 December 2020

 
                                                                                 As at 31 
                                                                      Central    December 
                                  Brand Addition   Facilisgroup    operations        2020 
                                 ---------------  -------------  ------------  ---------- 
                                         GBP'000        GBP'000       GBP'000     GBP'000 
 ASSETS 
 Non-current assets 
 Intangible assets                        37,839         16,178             -      54,017 
 Property, plant and equipment             5,558          3,424           120       9,102 
 Deferred tax asset                           23              -           470         493 
 Total non-current assets                 43,420         19,602           590      63,612 
                                 ---------------  -------------  ------------  ---------- 
 
 Current assets 
 Inventories                              12,109              -             -      12,109 
 Trade and other receivables              19,353          1,571            64      20,988 
 Cash and cash equivalents                 5,677            538           851       7,066 
 Current tax asset                           310            474            45         829 
 Total current assets                     37,449          2,583           960      40,992 
                                 ---------------  -------------  ------------  ---------- 
 
 TOTAL ASSETS                             80,869         22,185         1,550     104,604 
                                 ===============  =============  ============  ========== 
 
 LIABILITIES 
 Non-current liabilities 
 Lease liability                           4,893          2,661            91       7,645 
 Trade and other payables                      -            930             -         930 
 Deferred tax liability                        -          2,637             -       2,637 
 Total non-current liabilities             4,893          6,228            91      11,212 
                                 ---------------  -------------  ------------  ---------- 
 
 Current liabilities 
 Lease liability                           1,096            218            20       1,334 
 Trade and other payables                 22,995          2,181           599      25,775 
 Total current liabilities                24,091          2,399           619      27,109 
                                 ---------------  -------------  ------------  ---------- 
 
 TOTAL LIABILITIES                        28,984          8,627           710      38,321 
                                 ===============  =============  ============  ========== 
 
 NET ASSETS                               51,885         13,558           840      66,283 
                                 ===============  =============  ============  ========== 
 
   4.     OPERATING EXPENSES - EXCEPTIONAL 
 
                                          Unaudited        Unaudited        Audited 
                                       Period ended     Period ended     Year ended 
                                            30 June          30 June    31 December 
                                               2021             2020           2020 
                                    ---------------  ---------------  ------------- 
                                            GBP'000          GBP'000        GBP'000 
 Reorganisation and restructuring                 -                -            430 
 Transaction costs                                -                -            112 
               -                                                   -            542 
 ===============  ==================================================  ============= 
 

Exceptional items relate to the following:

-- reorganisation and restructuring - costs were incurred in Brand Addition as a result of changes made to headcount to align people costs with anticipated ongoing sales volumes; and

-- transaction costs - incremental external costs related to the acquisition of software assets and a license.

   5.     INCOME TAX EXPENSE 

The income tax expense for the period ended 30 June 2021 is based upon management's best estimate of the weighted average annual tax rate expected for the full year ending 31 December 2021. The income tax expense is higher than the standard rate of 19% due to higher standard income tax rates in overseas territories, overseas losses carried forward and non-deductible expenses. The income tax expense for the year ended 31 December 2020 was lower than the standard rate due to the benefit in year from corporate interest rate deductions that were previously disallowed for taxation purposes.

   6.     EARNINGS PER SHARE 

Basic and diluted earnings per share are calculated by dividing the earnings attributable to equity shareholders by the weighted average number of ordinary shares in issue during the year. As at 30 June 2020, no instruments with a potential or actual dilutive impact were in issue and therefore diluted EPS was the same as basic EPS. The impact of the potentially dilutive share options issued under The Pebble Group Plc Long-Term Incentive Plan on 21 December 2020 and 8 June 2021 as detailed in note 12 is 0.01p for the period ended 30 June 2021.

When calculating diluted earnings per share, the weighted average number of shares is adjusted to assume conversion of 1,363,350 (2019: nil) of dilutive options granted to employees.

The calculation of basic and diluted profit per share is based on the following data:

Statutory EPS

 
                                                       Unaudited       Unaudited        Audited 
                                                          Period          Period     Year ended 
                                                           ended           ended    31 December 
                                                         30 June         30 June           2020 
                                                            2021            2020 
                                                    ------------  --------------  ------------- 
 Earnings (GBP'000) 
 Earnings/(loss) for the purposes of basic 
  and diluted earnings per share 
  being profit/(loss) for the period attributable 
  to equity shareholders                                   1,420           (304)          4,080 
                                                    ------------  --------------  ------------- 
 Number of shares 
 Weighted average number of shares for 
  the purposes of basic earnings/(loss) 
  per share                                          167,450,893     167,450,893    167,450,893 
 Weighted average dilutive effects of conditional 
  share awards                                         1,363,350               -              - 
 Weighted average number of shares for 
  the purposes of diluted earnings/(loss) 
  per share                                          168,814,243     167,450,893    167,450,893 
                                                    ------------  --------------  ------------- 
 Profit/(loss) per ordinary share (pence) 
 Basic profit/(loss) per ordinary share                     0.85          (0.18)           2.44 
 Diluted profit/(loss) per ordinary share                   0.84          (0.18)           2.44 
                                                    ------------  --------------  ------------- 
 
 

Adjusted EPS

The calculation of adjusted earnings per share is based on the after tax adjusted operating profit after adding back certain costs as detailed in the table below. Adjusted earnings per share figures are given to exclude the effects of amortisation of acquired intangible assets, share based payment charges and exceptional items, all net of taxation, and are considered to show the underlying performance of the Group.

 
                                                       Unaudited       Unaudited        Audited 
                                                          Period          Period     Year ended 
                                                           ended           ended    31 December 
                                                         30 June         30 June           2020 
                                                            2021            2020 
                                                    ------------  --------------  ------------- 
 Earnings (GBP'000) 
 Earnings/(loss) for the purposes of basic 
  and diluted earnings per share being adjusted 
  earnings/(loss)                                          1,808            (83)          4,965 
                                                    ------------  --------------  ------------- 
 Number of shares 
 Weighted average number of shares for the 
  purposes of basic earnings/(loss) per share        167,450,893     167,450,893    167,450,893 
 Weighted average dilutive effects of conditional 
  share awards                                         1,363,350               -              - 
 Weighted average number of shares for the 
  purposes of diluted earnings/(loss) per 
  share                                              168,814,243     167,450,893    167,450,893 
                                                    ------------  --------------  ------------- 
 Adjusted earnings/(loss) per ordinary share 
  (pence) 
 Basic adjusted earnings/(loss) per ordinary 
  share                                                     1.08          (0.05)           2.96 
 Diluted adjusted earnings/(loss) per ordinary 
  share                                                     1.07          (0.05)           2.96 
                                                    ------------  --------------  ------------- 
 

The calculation of basic adjusted earnings per share is based on the following data:

 
                                                  Unaudited      Unaudited        Audited 
                                                     Period         Period     Year ended 
                                                      ended          ended    31 December 
                                                    30 June        30 June           2020 
                                                       2021           2020 
                                              -------------  -------------  ------------- 
                                                    GBP'000        GBP'000        GBP'000 
 Profit/(loss) for the period attributable 
  to equity shareholders                              1,420          (304)          4,080 
                                              -------------  -------------  ------------- 
 Add back/(deduct): 
 Amortisation charge on acquired intangible 
  assets                                                250            273            537 
 Share-based payments charge                            229              -             14 
 Exceptional items                                        -              -            542 
 Tax effect of the above                               (91)           (52)          (208) 
                                              -------------  -------------  ------------- 
 Adjusted earnings/(loss)                             1,808           (83)          4,965 
                                              =============  =============  ============= 
 
   7.      INTANGIBLE ASSETS 
 
                                                                     Software 
                                                  Customer    and Development     Work in 
                                 Goodwill    relationships              costs    progress     Total 
                                ---------  ---------------  -----------------  ----------  -------- 
                                  GBP'000          GBP'000            GBP'000     GBP'000   GBP'000 
 Cost 
 Balance at 31 December 
  2019                             35,882           10,437             11,156         336    57,811 
                                ---------  ---------------  -----------------  ----------  -------- 
 FX difference on translation         184              658                142           -       984 
 Additions                              -                -                920         134     1,054 
 Disposals                              -                -              (278)           -     (278) 
 Reclassifications                      -                -                 35        (35)         - 
 Balance at 30 June 
  2020                             36,066           11,095             11,975         435    59,571 
                                ---------  ---------------  -----------------  ----------  -------- 
 FX difference on translation       (264)            (951)              (163)           -   (1,378) 
 Additions                              -                -              4,946         159     5,105 
 Reclassifications                      -                -                372       (372)         - 
                                ---------  ---------------  -----------------  ----------  -------- 
 Balance at 31 December 
  2020                             35,802           10,144             17,130         222    63,298 
                                ---------  ---------------  -----------------  ----------  -------- 
 FX difference on translation        (86)            (183)               (76)           -     (345) 
 Additions                              -                -              1,612         174     1,786 
 Balance at 30 June 
  2021                             35,716            9,961             18,666         396    64,739 
                                ---------  ---------------  -----------------  ----------  -------- 
 
 Accumulated amortisation 
 Balance at 31 December 
  2019                                  -              635              7,009           -     7,644 
                                ---------  ---------------  -----------------  ----------  -------- 
 FX difference on translation           -               33                 80           -       113 
 Charge for the period                  -              273                676           -       949 
 Disposals                              -                -              (275)           -     (275) 
                                ---------  ---------------  -----------------  ----------  -------- 
 Balance at 30 June 
  2020                                  -              941              7,490           -     8,431 
                                ---------  ---------------  -----------------  ----------  -------- 
 FX difference on translation           -             (48)              (116)           -     (164) 
 Charge for the period                  -              264                750           -     1,014 
                                ---------  ---------------  -----------------  ----------  -------- 
 Balance at 31 December 
  2020                                  -            1,157              8,124           -     9,281 
                                ---------  ---------------  -----------------  ----------  -------- 
 Charge for the period                  -              250                821           -     1,071 
 Balance at 30 June 
  2021                                  -            1,407              8,945           -    10,352 
                                ---------  ---------------  -----------------  ----------  -------- 
 
 Net book value 
                                ---------  ---------------  -----------------  ----------  -------- 
 At 31 December 2019               35,882            9,802              4,147         336    50,167 
                                ---------  ---------------  -----------------  ----------  -------- 
 At 30 June 2020                   36,066           10,154              4,485         435    51,140 
                                ---------  ---------------  -----------------  ----------  -------- 
 At 31 December 2020               35,802            8,987              9,006         222    54,017 
                                ---------  ---------------  -----------------  ----------  -------- 
 At 30 June 2021                   35,716            8,554              9,721         396    54,387 
                                =========  ===============  =================  ==========  ======== 
 

The Group tests annually for impairment, or more frequently if there are indicators that goodwill might be impaired.

   8.     PROPERTY, PLANT AND EQUIPMENT 
 
                               Leasehold        Fixtures    Computer   Right-of-use 
                                property    and fittings    hardware         Assets     Total 
                              ----------  --------------  ----------  -------------  -------- 
                                 GBP'000         GBP'000     GBP'000        GBP'000   GBP'000 
 Cost 
 Balance at 31 December 
  2019                             1,250           2,604       2,275         10,506    16,635 
                              ----------  --------------  ----------  -------------  -------- 
 Impact of foreign exchange 
  translation                         17             110          58            374       559 
 Additions                            19              72         145            379       615 
 Disposals                             -           (340)       (133)          (969)   (1,442) 
 Balance at 30 June 2020           1,286           2,446       2,345         10,290    16,367 
                              ----------  --------------  ----------  -------------  -------- 
 Impact of foreign exchange 
  translation                       (45)           (115)        (71)          (401)     (632) 
 Additions                            71              79         434          3,474     4,058 
 Disposals                             -             (9)           -          (568)     (577) 
 Balance at 31 December 
  2020                             1,312           2,401       2,708         12,795    19,216 
                              ----------  --------------  ----------  -------------  -------- 
 Impact of foreign exchange 
  translation                        (7)            (28)        (18)          (129)     (182) 
 Additions                             -              20         237            269       526 
 Disposals                             -               -           -          (175)     (175) 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 30 June 2021           1,305           2,393       2,927         12,760    19,385 
                              ----------  --------------  ----------  -------------  -------- 
 
 Accumulated depreciation 
 Balance at 31 December 
  2019                             1,036           2,108       1,865          5,545    10,554 
                              ----------  --------------  ----------  -------------  -------- 
 Impact of foreign exchange 
  translation                          7              88          44            208       347 
 Charge for the period                21              81          94            523       719 
 Disposals                             -           (354)       (120)          (961)   (1,435) 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 30 June 2020           1,064           1,923       1,883          5,315    10,185 
                              ----------  --------------  ----------  -------------  -------- 
 Impact of foreign exchange 
  translation                       (29)            (89)        (47)          (178)     (343) 
 Charge for the period                21              45         141            641       848 
 Disposals                             -               -           -          (576)     (576) 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 31 December 
  2020                             1,056           1,879       1,977          5,202    10,114 
                              ----------  --------------  ----------  -------------  -------- 
 Impact of foreign exchange 
  translation                        (2)            (20)         (9)           (30)      (61) 
 Charge for the period                23              70         161            732       986 
 Disposals                             -               -           -          (114)     (114) 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 30 June 2021           1,077           1,929       2,129          5,790    10,925 
                              ----------  --------------  ----------  -------------  -------- 
 
 Net book value 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 31 December 
  2019                               214             496         410          4,961     6,081 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 30 June 2020             222             523         462          4,975     6,182 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 31 December 
  2020                               256             522         731          7,593     9,102 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 30 June 2021             228             464         798          6,970     8,460 
                              ==========  ==============  ==========  =============  ======== 
 
 Right-of-use assets - net 
  book value 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 31 December 
  2019                             4,800              21         140              -     4,961 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 30 June 2020           4,855               -         120              -     4,975 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 31 December 
  2020                             7,267             227          99              -     7,593 
                              ----------  --------------  ----------  -------------  -------- 
 Balance at 30 June 2021           6,710             184          76              -     6,970 
                              ----------  --------------  ----------  -------------  -------- 
 

9. INVENTORIES

Inventory levels are higher at the June period end compared to December predominantly due to higher levels of stock in transit to satisfy higher sales activity in the second half of the financial year to December.

10. LEASES

Amounts recognised in the Consolidated Statement of Financial Position

In addition to the right-of-use assets included within Note 8 above, the Consolidated Statement of Financial Position shows the following amounts relating to leases:

 
                                                 Unaudited   Unaudited        Audited 
                                                    Period      Period     Year ended 
                                                     ended       ended    31 December 
                                                   30 June     30 June           2020 
 Lease liabilities                                    2021        2020 
                                                ----------  ----------  ------------- 
                                                   GBP'000     GBP'000        GBP'000 
 Maturity analysis - contractual undiscounted 
  cash flows: 
 Less than one year                                  1,818       1,404          1,761 
 More than one year, less than two years             1,529       1,230          1,703 
 More than two years, less than three 
  years                                              1,330       1,053          1,403 
 More than three years, less than four 
  years                                              1,173         988          1,204 
 More than four years, less than five 
  years                                              1,193         926          1,185 
 More than five years                                2,872       2,467          3,513 
                                                ----------  ----------  ------------- 
 Total undiscounted lease liabilities 
  at period end                                      9,915       8,068         10,769 
 Finance costs                                     (1,425)     (1,677)        (1,790) 
                                                ----------  ----------  ------------- 
 Total discounted lease liabilities 
  at period end                                      8,490       6,391          8,979 
                                                ----------  ----------  ------------- 
 
 Lease liabilities included in the statement 
  of financial position 
 Current                                             1,422       1,003          1,334 
 Non-current                                         7,068       5,388          7,645 
                                                ----------  ----------  ------------- 
                                                     8,490       6,391          8,979 
                                                ----------  ----------  ------------- 
 

Amounts recognised in the Consolidated Income Statement

The Consolidated Income Statement shows the following amounts relating to leases:

 
                                                Unaudited   Unaudited        Audited 
                                                   Period      Period     Year ended 
                                                    ended       ended    31 December 
                                                  30 June     30 June           2020 
                                                     2021        2020 
                                               ----------  ----------  ------------- 
                                                  GBP'000     GBP'000        GBP'000 
 Depreciation charge - leasehold property             670         485          1,069 
 Depreciation charge - fixtures and fittings           40          16             51 
 Depreciation charge - computer hardware               22          22             44 
                                               ----------  ----------  ------------- 
                                                      732         523          1,164 
                                               ==========  ==========  ============= 
 
 Interest expense (within finance expense)            197         222            433 
                                               ==========  ==========  ============= 
 
 

11. FINANCIAL INSTRUMENTS

The fair values of all financial instruments included in the Consolidated Statement of Financial Position are a reasonable approximation of their carrying values.

12. SHARE-BASED PAYMENTS

The Group operates an equity-settled share-based payment plan for certain employees of the Group under The Pebble Group Plc Long-Term Incentive Plan (the 'LTIP').

On 8(th) June 2021, under the LTIP, the Group made awards of 960,510 conditional shares to certain Directors and employees.

The Group recognised total expenses of GBP229,000 (period ending 30 June 2020: GBPnil) in respect of equity-settled share-based payment transactions for the period ended 30 June 2021.

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September 07, 2021 02:00 ET (06:00 GMT)

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