Final Results

RNS Number : 6532I

Bonhill Group PLC

20 April 2022

Bonhill Group plc

("Bonhill", the "Company" or the "Group")

Final Results

Bonhill Group Plc (AIM: BONH), a leading B2B media business specialising in three key areas: Business Information, Events and Data & Analytics, announces its audited final results for the year ended 31 December 2021.

Financial Highlights

· Revenue down 8% to £16.4 million (2020: £17.8 million) as Covid-19 continued to impact return to live events

· Breakeven EBITDA (2020 restated *: £0.4 million loss) after IAS38 accounting policy charge of £0.1 million (2020: £0.2m)

· Gross profit down by 14% to £12.3 million (2020: £14.3 million) due to change in product mix and return to some live events; Gross margin decreased to 75% (2020: 80%)

· Operating loss 8.3 million (2020: £10.7 million) after goodwill impairment of £6.2 million in relation to Investment News (2020: £6.6 million)

· Cash at 31 December 2021 at £1.4 million (2020: £1.3 million). As at 31 March 2022, cash was £1.0 million with net cash after debt of £0.9 million

* The results for the year ended 31 December 2020 and 31 December 2019 have been restated to reflect the impact of the IFRIC decision on configuration and customisation costs in a cloud computing arrangement relating to IAS 38 'Intangible Assets'. As a result of this accounting policy change some costs previously capitalised have now been expensed to the income Statement.

Operational Highlights

· Global recognition for business journalism with InvestmentNews winning a prestigious Neal Award; considered the highest editorial honour in the field of business-to-business journalism in the US

· Successful rebranding is our first step towards becoming a global financial services service provider

· Significant real estate savings in both the UK and US; flexible and hybrid working policy for all staff globally

· Return to in person events, prior to Omicron variant, as world began to return to normal post Covid-19

· Strengthened board and deepened shareholder engagement with the appointments of Richard Staveley and Laurie Benson as Non-executive Directors

Outlook

Our aim in 2022 is to further develop our position as a global partner for asset managers and financial advisors. A focus on a global offering, resolving our US digital issues and benefitting from improved operations and business efficiencies should lead to a better performance in 2022 and we have already seen a strong start to our revenues which are ahead of the prior year by 10% in Q1. We have the opportunity to establish a global market leadership position with ESG Clarity and with an improved events backdrop we should see a return to growth in this area. We have worked hard to rephase our revenues so that we are not so reliant on the fourth quarter and would expect to see a more balanced 45%/55% (2020: 32%/68%) split in revenues half year on half year. Over the course of the year, the year-end cash position should increase with no major capex projects, the end of the Crain loan repayments in 2021 and an improved operating performance.

With a strengthened balance sheet following completion of the fundraising announced separately today, an operating environment that allows us to hold in person events and a delivery of the turnaround in fortunes in the US business together with the various initiatives we have started across our portfolio of products makes us confident that 2022 will be a much-improved year for Bonhill.

Patrick Ponsford, Bonhill's Interim Chief Executive Officer, commented :

"We are pleased with the performance of the business in 2021 and look forward to a stronger 2022; the year has started well and we already have £9.4 million of contracted bookings for 2022."

Jonathan Glasspool, Bonhill's Interim Executive Chairman, commented :

"2021 was a challenging year for Bonhill given the continued impact of Covid-19 on the business and the wider global economy. However, this forced us to adapt and refine our approach, not least in reducing annual costs by £3.9m. This leaves us in a stronger position going forward. The fundraising announced separately today will allow the Group to continue focusing on its goal to deliver cutting edge analysis, insight, networking and data for business communities, and will leave us well placed to capture the many opportunities which lie ahead. With a 10% improvement year on year in revenues in Q1, the Board views prospects for 2022 with increasing confidence and looks forward to updating shareholders on progress throughout the year."

For further enquiries please contact:

Bonhill Group plc +44 (0)20 7250 7035

Jonathan Glasspool, Interim Executive Chairman

Shore Capital (Nominated Adviser and Broker) +44 (0)20 7408 4050

Tom Griffiths/David Coaten/John More

Houston (PR Adviser) +44 (0)204 529 0549

Alexander Clelland

About Bonhill Group Plc

Bonhill Group Plc is a leading, AIM-quoted, B2B media company providing Business Information, Events and Data & Insight propositions to Financial Services, Diversity and Technology business communities in the US, UK, Pan Europe, Middle East and Asia. Bonhill operates multiple digital platforms, has market leading media brands, hosts over 100 events per annum, offers a portfolio of data & analytics propositions and provides a range of content marketing solutions.

Bonhill operates primarily in the financial services space where its brands and services are acknowledged as market leaders. It specialises in enhancing the relationship and flow of information between the global community of financial services providers and the advisers who recommend their products. Bonhill was early to recognise the growing importance of ESG in asset allocation and fund selection and now owns the leading global platform in this space, serving the adviser community. ESG Clarity.

Additionally, the business creates content, sales and marketing opportunities, networking events and lead generation opportunities for its audiences of entrepreneurs, business owners and managers, CTOs and technology leaders, asset and wealth managers, and professional women. Flagship brands include: InvestmentNews, ESG Clarity, Portfolio Adviser, Fund Selector Asia, What Investment, SmallBusiness.co.uk, GrowthBusiness.co.uk, Information Age, Women in… events series and DiversityQ.

For more information visit www.bonhillplc.com .

Chairman's statement

Since joining the Bonhill Group in late May 2021, it has been a year of surprises. One of these was how well the Group did to navigate the unexpected challenge of a period of extended lockdown in the UK and US which continued to disrupt its global events business.

But despite a relatively stable first half and confidence for the year, the final quarter had two major disappointments with a poor performance from the US digital business and then a weaker than expected performance from events, which had moved back to in-person in the UK, but not to the level of expectations. The weak performance in the USA has meant we have had to take an impairment charge of £6.2m in relation to the purchase of Investment News. In this context, I have welcomed the opportunity to work with new leaders in our two biggest territories - in the USA, where John French joined us in October 2021 - and globally with Patrick Ponsford, who stepped up to lead the global business on an interim basis on 7 April 2022 while we look for a permanent successor to Simon Stilwell as Chief Executive of the Group. Patrick is very experienced in B2B publishing and Events Management across many industry sectors. He brings an in-depth knowledge of the Bonhill business and global financial services. He was the prime mover behind the growth in our ESG services, which we wish to expand globally.

During the year we saw the benefit of the reduction in our operating costs, down £3.9 million on the prior year, and we continue to target efficiencies in all areas so that we can continue to deliver the very best service on a global basis from an appropriate cost base.

The Company's successful rebranding in the summer of last year was our first step towards becoming a global financial services service provider. Our deep subject matter knowledge and creative approach is a clear point of difference in the marketplace and one which we can build on in the future. Our main aims for 2022 include the continued development of our global offering, the establishment of ESG Clarity as the leading ESG brand globally and improving our US digital offering and that region's profitability.

Other areas of focus are the development of our lead generation and content based marketing products in our Business Solutions division, and the launch of a new subscription-based platform for DiversityQ. With one global identity and a changing internal approach to selling the Group's services, I believe we can establish a leadership position in the coming years and become the preferred global partner for asset managers and financial advisors.

As a group, we managed an ever-changing event backdrop with 88 virtual events held in the year and 20 in-person events held in the final months. The concentration of events in the final quarter was a hangover from the postponement of events in 2020 into 2021 and we now have a much more balanced distribution of events in 2022.

This, combined with the development of our non-event activities, should lead to a more evenly balanced revenue split in the current year. The move back to in-person events led to a reduced gross margin for the year (75.2% (2020: 80.2%)) and as we continue to plan for more in-person events in 2022, I would expect that margin to fall further. The fundraising announced separately today will enable us to invest in a full programme of live events throughout the year.

ESG remains the dominant theme across our business both internally and externally and was a significant contributor to new business in the year. It is great to see ESG Clarity operating as a global platform with plenty of potential in the US. COP26 was a key event for the Group, and we created a range of activities, events and content around this important global conference.

We will continue to run activities around key industry events and seek to broaden the knowledge of sustainable investing across all elements of the investment community. I am also pleased that we established our internal ESG committee, that I chair, with full staff participation. This has resulted in a multi-year plan to measure, monitor, and improve both our internal ESG activities and those within our broader stakeholder group. As a practical first step, the annual report includes our Gender Pay Gap survey results. This demonstrates our commitment to practising what we publish. The results compare reasonably well with the rest of media sector, but we have no cause for complacency and the report itemises some of the actions we are taking.

Our staff have excelled themselves through their commitment and flexibility as they continue to navigate the everchanging landscape. They continue to work successfully remotely and, with a new global flexible working policy in place, we continue to deliver for our client base. We worked hard in the year to create the optimal conditions for our staff and have provided a high level of support and training to enhance and preserve their well-being and mental health. We have surveyed our staff regularly through the year which, when combined with a new HR system and a hugely successful employee recognition programme, demonstrates our commitment to continue to put our people first.

We were delighted to welcome two new non-executive directors in the year. We were joined by Richard Staveley as a non-independent non-executive director on 16 December 2021 and, post year end, we have been joined by Laurie Benson who replaced Anne Donoghue who left on 30 September 2021 as an independent non-executive director (appointed 18 January 2022). Finally, on 7 April 2022, we announced the resignation of Simon Stilwell as Chief Executive after 4 ½ years with the Group.

I would like to thank our shareholders for their continued support and our broad customer base for their continued support and engagement. The fully-underwritten fundraising announced separately today provides us with a good level of working capital to take advantage of the big increase in events we are undertaking this year. We are also actively reviewing our product portfolio to ensure areas of growth are supported appropriately so that they can grow to their full potential.

Jonathan Glasspool

Interim Executive Chairman

Interim CEO review

2021 was as challenging a year as 2020, not only with the ongoing trading conditions caused by the pandemic, but also with a disappointing end to the year with a poor performance particularly in the US digital business and a lower-than-expected level of event contribution in the UK in the fourth quarter. These, combined with campaign cancellation and postponement, meant that a year that was on track until October to meet market expectations ended delivering £16.4 million of revenue (2020: £17.8 million) and breakeven EBITDA (2020 restated loss: £0.4 million). Thankfully, our actions in prior years to reduce the Group's operating costs have helped to mitigate the above while allowing us to end the year with our cash position flat on 2020.

In response to the poor performance in the final quarter, we have a new management team in the US and some clear priorities in the early months of 2022 to resolve the US digital issues. We have made continued progress in our ESG activities globally as well as content marketing offering, both of which diversify our revenue streams and better align us to the core asset management and financial advisor market. Positively, Asia had a strong performance after some difficult years, and we also successfully moved back to the live event environment in the final quarter of the year which should help rephase the revenues in 2022 away from the prior year's fourth quarter concentration.

Financial performance

Revenues for the year ended 31 December 2021 were £16.4 million (2020: £17.8 million). The Company delivered a stronger second half of the year ("H2") with £9.6 million of revenue, compared to £6.8 million reported in the first half ("H1"), and EBITDA for the year of breakeven (2020 restated: £0.4 million loss). This was a result mostly of the actions taken in 2020 and the constant reshaping of the business in 2021 to reflect the changing backdrop. These revenue numbers exclude any UK Government support. After several years of adjusting items, it is pleasing to report that there were no adjustments in 2021.

Overall, the Group saw gross margins at 75%, a 5% reduction on last year, reflecting the fall off in US digital activity. This margin remains relatively high reflecting the nine months of virtual event activity and it is likely that if in person events dominate for 2022 then this is likely to fall back further.

In the year, our Business Solutions divisions grew revenues by 3.6% to £2.65 million (2020: £2.55 million) and maintained its 65% gross margin. UK, EMEA and Asia financial services grew revenues by 1.7% to £6.33 million (2020: £6.23 million) and with an 80% gross margin (2020: 82%) whilst US financial services saw revenues fall by 18.3% to £7.4 million (2020: £9.0 million) and gross margins fell to 75% (2020: 84%).

Revenue by activity saw Business Information fall by 4% to £10.3 million (2020: £10.7 million), the fall in US digital being partially offset by good growth in our content marketing business and ESG Clarity. Events revenues fell by 13% from £6.1 million to £5.3 million reflecting the late switch back to in person events in the fourth quarter of the year and the poor performance in late November and December as a result of the Omicron variant. Data and Insight revenue was down year-on-year by 22% from £1.0 million to £0.8 million reflecting the postponement of a research project.

We participated in the US Small Business Administration's second Paycheck Protection Program ('PPP2') which is part of the Coronavirus Aid Relief and Economic Security Act ('CARES Act') and received loans totalling $1.3 million (£0.9 million) in March 2021. As was the case with the first PPP loan of $1.1m received by the Group in May 2020 ("PPP1"), as announced on 5 November 2021, the PPP2 loan was forgiven in full.

The final payment due to Crain Communications under the vendor loan agreement entered into in August 2018 as part of the consideration payable for the Company's acquisition of InvestmentNews was made in August 2021 which completes all of the Company's 2018 post-acquisition commitments.

Covid-19 impact

The impact of Covid-19 was felt in our events business, with the continued restrictions in the first three quarters of 2021 preventing the hosting of any live events in all regions (H1 2020: 16). The final six weeks of the year were impacted by Omicron which dented sponsor and attendee appetite. With the proliferation of events in the final quarter of the year, this led to full year event revenues being £0.8m lower than for the comparable period in 2020 at £5.3 million (2020: £6.1 million). 17 in person events were held in the final quarter, mainly in the UK. The event calendar for 2022 is more balanced between the halves and has started well with event bookings being up 42% on 2021.

During 2021, the Company utilised a range of measures to help navigate the Covid-19 operating environment. After the restructuring in 2020, and the implementation of a new divisional structure, external support included PPP2 in the US and two bounce back loans totalling £100,000 in the UK. No staff members were on furlough during the year and headcount across the Group at the end of the year was 133 (31 December 2020: 136). All outstanding VAT and PAYE deferrals were paid in the year and there are no ongoing liabilities outside the ordinary course of business.

During 2021, we saw additional savings from supplier agreements, including print, IT suppliers and services, and reduced rental costs, both from the new lease in the US and from exiting the Company's head office, Fleet House, in May 2021. The Group continues successfully to operate with a global hybrid working model and approximately 15% of the workforce are in the office at any given time. This policy is reviewed quarterly.

Bonhill - Be Informed

The Group undertook a rebranding exercise to consolidate and define its identity following a period of acquisition and integration as one global brand with two divisions - Bonhill Financial Services and Bonhill Business Solutions. This launch not only features a new visual identity, but also a simplification of the Group structure and a new offering across our global financial services business. The last three years have seen the unification of three businesses and, having worked harder and closer together during the pandemic, it seemed right to formalise that global collaboration and emerge from these challenging conditions as a more defined entity.

We are looking to achieve three things with this rebranding:

·to make our broadest possible offering available to our global client base;

·to deliver the highest level of service and experience to our clients; and

·to establish an inclusive, open-minded working environment creating a true platform for opportunity.

In addition to this external rebranding, we have streamlined the Company structure with the closure of the Growth Company Investor and Information Age statutory entities (Information Age continues as a brand under Business Solutions). With effect from January 2022 all UK trading activities have been combined into one legal entity, Bonhill Media UK Limited.

The rebranding is working well and the next phase will see an emphasis on selling more group products internationally.

Two of the key objectives in 2022 are to sell on a global basis and move ESG Clarity to a global site. In 2022, we have already seen the benefit of this approach with an increase in sales of global packages and a change in the working practices of the sales teams to offer more group services to clients.

The ESG Clarity team were in the US in February 2022 to create content for the site but also to promote the positioning of this core ESG brand to the fast-growing US ESG market.

Business Solutions

Our Business Solutions division saw a strong media performance in the year, with revenues up 21% on 2020 from £0.9 million to £1.2 million. The core Small Business and Growth Business sites saw a tail off in traffic in the final quarter as UK SMEs searched less for Government support and information dealing with the pandemic. This, coupled with the planned relaunch in September 2021, made for a difficult final quarter of the year, but pleasingly the business delivered ahead of budget. The diversity events portfolio had a modest return to live events in the final quarter with one held. This led to a 9% reduction in revenue vs 2020 which had live event activity in the first quarter. A successful virtual event model was operating for most of the year, but we are planning on running most events in person in 2022 starting with the Women in IT - London which was successfully held on 28 February 2022 with 650 people in attendance.

There has been a focus on marketing and our extensive data base in the year. This exercise included data de-duplication and the enhancement and cleansing of all divisional data. The result has seen a 55% increase in the 'Women In …' database. This process of data enhancement will continue into 2022.

The outlook for the division is positive in 2022 with a full year of live event activity planned, the return of some key initiatives for the small business community that were mothballed during the pandemic, the continued development of lead generation products, a broadening of the offering away from core advertising and broadening the client base.

Financial Services

Financial Services UK (Last Word Media) traded well, with a 1.7% increase in revenues despite an uncertain events outlook. ESG Clarity has been the stand-out performer alongside Bonhill Create, our content marketing business, both of which are now being sold globally. Asia has seen a strong performance across media and events after a difficult couple of years and has been a key contributor to our global ESG series. Business information revenues grew by 27% in the year reflecting the growth of non-event activity.

Live event activity restarted in the second half of 2021, specifically from September in the UK and Asia, reflecting the easing of Covid-19 restrictions. Event revenues were down 20% in the year with the lack of live events mitigated with the launch of some new Global ESG summits.

COP26 was an important event in the year for the Group which created a full set of virtual events, content packages and marketing aligned to the event for a range of global asset managers.

2022 has started positively and the live event calendar is booking well with our congress activity better distributed throughout the year. We continue to see good growth in our content marketing business with some interesting new ESG related events sold out already for July.

Financial Services US (InvestmentNews) had a weaker year where digital sales were down 15% compared to 2020. The first half was impacted by a shift in market messaging by customers following the election of President Biden and US financial advice firms reducing advertising budget to rebuild profitability while there was some disruption from M&A activity. Unfortunately, the new initiatives put in place to mitigate that fall did not have any meaningful impact in the second half of the year. Various steps have been taken to address the situation with a change of management and a staged digital remediation programme now in place that should address the issues. Digital sales in the first quarter are up on last year by 9%.

Print revenue declined in the year by 20% on 2020 from £2.3 million to £1.8 million. We were delighted that InvestmentNews won a prestigious Neal Award for business journalism, considered the highest editorial honour in the field of business-to-business journalism in the US. In addition, InvestmentNews was a finalist in five other categories , including best media brand/overall editorial excellence and best Covid-19 industry coverage. We have continued to see a strong performance in print in the US in 2022 and our recent content survey highlights the role print plays for the core US financial adviser market.

The in-person event market in the US was impacted by Covid-19 and the Delta variant in the third quarter and Omicron in the fourth quarter. This backdrop necessitated last minute event changes from in person back to virtual and undermined the short-term planning for the events business. Importantly, despite this environment, event revenue was only down 3% in the year. We have reviewed the event schedule for 2022 and this will involve holding less events and a greater focus on profitability.

The US financial advice market still holds enormous potential for the Group and the work we have done on rebranding, global collaboration and becoming one global financial service offering, should allow us to target a broader audience with our content and data led strategy.

One of the delays in the fourth quarter was the launch of Investment Strategy. This new initiative for the US asset management community seeks to replicate several of the Group's existing products that have been successful in the UK, Europe and Asia. The site was launched on 15 March 2022 and is a good example of our focus on a global offering.

With the new management team in place in the US, we are already seeing the benefits of this greater global unity in both sales, account management and best practice across the Group.

ESG

We continue to see sustained interest in ESG-related topics from customers across the Group. This has been particularly strong in the UK and Asia and is building momentum in the US. We have seen continued growth of our core brand, ESG Clarity, which moved onto one global platform in late September 2021. Our wider group ESG platform includes ESG Clarity, our 'Women In…' series, DiversityQ, InvestmentNews' Women Adviser Summit series, Diversity, Equity and Inclusion awards and the US Sustainable Development Goals podcast series and Bonhill Intelligence, our research business. In addition, Bonhill Create, our content marketing business, co-ordinated the two global ESG events held in conjunction with the United Nations. COP26 was a highlight of the year and a range of events and marketing initiatives were conducted globally and we have plans for several other global and regional activities helping clients promote their credentials.

In May, we were delighted to host our inaugural Global ESG Summit, in partnership with the United Nations Capital Development Fund, a flagship event for the Group, that further establishes our credentials in this area of critical importance to our customer base. The event had over 1,000 registered attendees and was streamed live across Asia, the UK, Europe and the US. Our second global ESG event was held in December 2021, just after COP 26, and again brought together a global audience to see what direct action fund groups were taking in tackling climate change.

We have plans for continued growth in this area, utilising our deep subject knowledge, audience reach and innovative solutions to highlight fund group credentials and providing key data and information to all parts of the investment community. We expect to broaden our reach outside of the core audience with planned activities for the wider adviser market.

Internal ESG Committee

Reflecting the importance of ESG to the Group, we convened an internal ESG committee, involving 32 employees from across the business to look at the three strands. This team has created a multi-year project to assess, monitor, set benchmarks and measure progress in key areas.

Key achievements include:

· The creation of new company values, gender pay gap analysis and reporting

· Mental health awareness programmes and mental health first aider training completed

· Standardised benefits across the UK

· Hybrid working policy based off company survey on working practices

· Bamboo satisfaction survey as part of reviews (data in HR board pack) % of supportive employees

· Regular Bonhill talks to highlight key social issues

· Wellness week in February to highlight health in the workplace

· Financial literacy training in UK

· 2021 staff surveys to keep in touch with themes and trends and staff attitudes

· Bonhill All-Stars - employee recognition programme

· Standardised UK policies on maternity and parental leave

· Event playbook - standardised policy

· Launch of the campaign for better governance

· The impact of DiversityQ and ESG Clarity

Operations

The Group is creating efficiencies and costs savings through the development of group central services, across technology, finance, HR and Ad operations, with production and marketing planned as next steps.

The successful completion of the UK office move resulted in significant cash benefits in H2 2021 and the new US office lease delivered cost and cash savings with a six-month rent-free period. We believe that we have the right mix of space and flexibility to support our global flexible hybrid working policy.

Our People

Our people and the values which the Company espouses are paramount to our success. They have been fundamental to the development of the Group's recent re-branding, which is a true reflection of the evolved culture and operational style of Bonhill. We are grateful for the commitment of our employees during the pandemic and our ongoing response to the challenges it presents has been successful largely due to their positive approach and determination. Remote working has been a success and we have recently implemented a flexible working policy to continue this and better support the wellbeing of all our employees. Our working practices will continue to be shaped across all regions by the continuous engagement with our people and an assessment of the changing work environment to ensure that we maintain the balance between meeting the needs of our clients and the safety of our employees. We have also focused on initiatives for staff retention, enhanced benefits and additional training, as well as the Bonhill Allstars employee recognition programme.

The wellbeing of our employees is critical to the success of the Group, and we have now implemented our own team of trained Mental Health First Aiders, run five days of awareness during Mental Health Week, provided wellbeing talks and training and support to ensure our employees are fully supported in their working lives and beyond. We have extensively surveyed our employees to ensure that we are alive to any changes in circumstances, trends or feelings when they are working remotely.

Technology

Our historic investment in creating a global technology platform is paying dividends with the creation of a global data lake, global ESG platform and global website standards. In addition, we continue to invest in Search Engine Optimisation (SEO) and Data & Analytics to further improve our audience knowledge and propositions.

We are making continual improvements to online advertising formats, reducing invalid traffic for better client campaign success as well as creating customer personas through data enrichment to provide a better customer experience, more accurate marketing, and new sales opportunities. This greater customer insight has been enhanced with the first phase of the implementation of our global data lake to store all our key data elements and support improved analytics and reporting.

The release of our first major website using our global framework has also improved website performance, allowed new features to be deployed faster, and reduced the total cost of ownership.

Dividend

Considering the prevailing operating environment, and the Company's financial situation, we will not be recommending the payment of a final dividend for the year ended 31 December 2021. It is very much the Board's intention that the Company should return to paying a dividend when it is appropriate to do so.

Summary

2021 was a year of surprises and constant change for the Group, but one which we have managed to navigate, while improving our overall offering and remaining an important partner to our clients. For nine months of the year, we continued to deliver virtual events, far longer than ever envisaged at the start of the year and in person events only really hit their stride in the final two months of the year. While the all-important final quarter was impacted by weaker than anticipated sales in the US, we managed to complete the year with a positive EBITDA contribution on an unadjusted basis and had some real successes despite the overall outturn not being as positive as originally expected. The group rebranding provides a strong platform for us to move forward and I firmly believe that a global financial services business with a leading position in ESG is an achievable objective for 2022.

Outlook

Our aim in 2022 is to further develop our position as a global partner for asset managers and financial advisors. A focus on a global offering, resolving our US digital issues and benefitting from improved operations and business efficiencies should lead to a better performance in 2022 and we have already seen a strong start to our revenues which are ahead by 10% in Q1. We have the opportunity to establish a global market leadership position with ESG Clarity and with an improved events backdrop we should see a return to growth in this area. We have worked hard to rephase our revenues so that we are not so reliant on the fourth quarter and would expect to see a more balanced 45%/55% (2020: 32%/68%) split in revenues half year on half year. Over the course of the year, the year-end cash position should increase with no major capex projects, the end of the Crain loan repayments in 2021 and an improved operating performance.

We are now positioned with a strengthened balance sheet following completion of the fundraising announced separately today, an operating environment that allows us to hold in person events, and a turnaround in the fortunes in the US business. These factors, together with the various initiatives we have started across our portfolio of products, makes me confident that 2022 will be a much-improved year for Bonhill.

Patrick Ponsford

Interim Chief Executive Officer

Interim Chief Financial Officer's review

Financial Headlines

Key Financials (£'ks)	Year ended 31 Dec 2021	Restated Year ended 31 Dec 2020	Change £	Change %
Revenue	16,360	17,812	(1,452)	(8)%
Gross Profit	12,296	14,334	(2,038)	(14)%
Gross Margin	75%	80%	-	(5)%
Adjusted EBITDA*	23	(387)	410	106%
Adjusted operating loss	(8,329)	(8,441)	122	1%
Statutory operating loss	(8,329)	(10,758)	2,429	23%
Cash	1,372	1,343	29	2%
Adjusted basic (loss) per share	(8.2p)	(10.50p)
Statutory basic (loss) per share	(8.2p)	(13.33p)

*Adjusted EBITDA does not include the impact of share-based payments.

The results for the year ended 31 December 2020 have been restated to reflect the impact of the IFRIC decision on configuration and customisation costs in a cloud computing arrangement relating to IAS 38 'Intangible Assets'. As a result of this accounting policy change some costs previously capitalised have now been expensed to the income Statement.

Following the IFRS Interpretations Committee (IFRIC) Agenda Decision on IAS 38 'Intangible Assets' which determined that configuration and customisation of Software as a Service (SaaS) solutions should be expensed rather than capitalised unless they meet the definition of separate intangible assets, the Group has reviewed its treatment of its SaaS costs. The new treatment is applicable immediately and retrospectively.

At a Group level in 2021 the new treatment results in a net charge of £90k to the income statement and a reduction in adjusted operating profit and adjusted profit before tax, reflecting the reversal of in-year capitalised expense of £98k partly offset by lower in-year amortisation of £8k. Free cash flow is not affected by the change. The impact of this accounting policy change on the Group's 2019 and 2020 income statements are shown below:

		2019			2020
		2019 Reported £'000	Adjustment £'000	2019 Restated £'000	2020 Reported £'000	Adjustment £'000	2020 Restated £'000
Consolidated Income Statement	Adjusted EBITDA	2,312	(589)	1,723	(146)	(241)	(387)
	Operating Loss	(3,655)	(572)	(4,227)	(10,660)	(98)	(10,758)
	Tax Expense	-	109	109	(3)	21	18
	Adjusted Basic EPS	2.24p	(1.03p)	1.21p	(10.41p)	(0.09p)	(10.50p)
	Diluted EPS	(9.28p)	(1.04p)	(10.32p)	(11.26p)	(0.08p)	(11.34p)

2021 started with optimism and positivity and was a welcome relief after the turbulence of 2020. However, as the year progressed, there were two areas of the business that did not see the bounce back that we had originally expected. The return to live events in the summer was a sign that things might be returning to normal and, whilst the appetite, attendance and feedback from clients was positive, ultimately the revenue was not as high as forecast due to last minute cancellations from sponsors and delegates. InvestmentNews' digital advertising was the other area that did not return to previous levels as hoped; this has resulted in the Board making a further £6.2 million impairment charge (2020: £6.6 million) to reflect the reduction in value of the assets held in our US operations . With the change in administration in the United States and the emergence of new Covid-19 variants, advertising spend was much reduced in the first half as key clients were waiting for stability before rolling out their advertising campaigns.

Still, there is much to be positive about and we achieved much during the year. Financially, these include:

- Paying back deferred VAT of £0.4 million from 2020

- Final payment made of the $6 million vendor loan from Crain, the previous owner of InvestmentNews

- New office lease for New York office, including a 6-month rent-free period

- Office move in the UK, downsizing whilst realising flexible working during these uncertain times

- Second PPP loan received and fully forgiven in the year

- Two successful R&D tax credit claims amounting to £0.5 million received for FY19 and FY20

- No adjusting items as post-acquisition integration all complete

- Continued evolution and improvement of financial control processes, policies and procedures to comply with best practice

- Forward-looking focus on ESG and how we can ensure this is at the heart of what we do every day

Financially, our key focus is on long term liquidity and how our day-to-day operations can support the business into long term steady growth.

Revenue and gross margin

Revenue reduced year-on-year by £1.4 million (8%) to £16.4 million with the movements being felt across both Business Information and Events.

Business Information revenue reduced year-on-year by 4% in 2021 to £10.3 million and, within this, there is a continued reduction in print revenue of £0.7 million, as we see the effects of the migration from traditional print magazines to our digital offerings. Digital revenue increased by £0.3 million year on year. As noted above in earlier sections, digital revenue (particularly in the US) was much slower than forecast, mostly due to ongoing socio-economic factors affecting our customers' appetite to spend.

Overall, events revenue reduced by £0.8 million year on year with Covid-19 restrictions resulting in a continued virtual offering for the first six months. In the second half of the year, there was a return to live events, but ongoing uncertainty and change in government guidance with the rise of the Omicron variant in the UK led to last minute sponsor cancellation and reduced delegate attendance. The Events margin reduced from 71% to 60% which is reflective of the change in mix of the portfolio with more live events held in 2021 than in 2020.

Data & Insight saw a reduction in revenue of 22% to £0.8 million in 2021, mainly due to ongoing reductions in customer spending.

Revenue
	Year ended 31 Dec 2021								Year ended 31 Dec 2020
	BSG		LWM		IN		Group				Change
Business information	1,432		3,882		4,957		10,271		10,695		(4)%
Events	1,215		2,220		1,837		5,272		6,074		(13)%
Data & Insight	-		234		583		817		1,043		(22)%
Total	2,647		6,336		7,377		16,360		17,812		(8)%
Gross Margin
		Year ended 31 Dec 2021								Year ended 31 Dec 2020
		BSG		LWM		IN		Group				Change
Business information		66%		93%		81%		83%		86%		(3)%
Events		66%		60%		57%		60%		71%		(11)%
Data & Insight		-		63%		83%		71%		81%		(10)%
Total		64%		80%		75%		75%		80%		(5)%

BSG - Business Solutions and Governance, LWM - Last Word Media, IN - InvestmentNews.

As has been explained in the earlier sections, we have rebranded and restructured the Company so that in future, both financial and operational performance will be measured in terms of Financial Services (FS) and Business Solutions (BS). Additionally, to give greater clarity on product areas, we will further split out the propositions.

To help aid comparison, the above revenue and gross margin tables have been restated to reflect this revised structure:

Revenue
	Year ended 31 Dec 2021			Year ended 31 Dec 2020
	FS	BS	Group	Year ended 31 Dec 2020	Change
Print	2,343	-	2,343	3,061	(23)%
Digital	6,779	1,149	7,928	7,634	4%
Events	4,057	1,215	5,272	6,074	(13)%
Other	817	-	817	1,043	(22)%
Total	13,996	2,364	16,360	17,812	(8)%

Gross Margin
	Year ended 31 Dec 2021			Year ended 31 Dec 2020	% PT
	FS	BS	Group	Year ended 31 Dec 2020	Change
Print	86%	-	86%	89%	(3)%
Digital	92%	96%	82%	85%	(3)%
Events	58%	66%	60%	71%	(11)%
Other*	21%	(100)%	(26)%	81%	(107)%
Total	77%	66%	75%	80%	(5)%

*Other Gross Margin includes cost of sales that are not directly attributable to a proposition e.g. direct marketing and platform/hosting costs.

Operating costs (excl. depreciation, amortisation, lease payments under IFRS16 and share based payments)

We have continued to build on the work done in 2020 to right-size the cost base and we can see the impact of this work in the below table. As mentioned last year, all adjusting items were closed off in 2020 signifying the end of the historic acquisition and integration projects and I am pleased to report that there were no adjusting items in 2021. The reduction in the "other costs" line shows the annualised impact of the cuts to discretionary spend that was started last year and demonstrates the better cost management controls that we have implemented in the business. Year-on-year, the underlying cost base of the business has reduced by £3.9 million.

	Year ended 31 Dec 2021	Year ended 31 Dec 2020	Change £	Change %
Staff Costs	11,540	12,472	(932)	(7)%
IT	523	974	(451)	(46)%
Legal & Professional	410	610	(200)	(33)%
T&E	72	115	(43)	(38)%
Office costs (excl. IFRS 16 rent)	213	327	(114)	(35)%
Other costs	265	1,007	(742)	(74)%
Total operating costs excl. adjusting items	13,023	15,505	(2,482)	(16)%

Adjusting items	-	1,429	(1,429)	(100)%

Total operating costs	13,023	16,934	(3,911)	(23)%

As can be seen above, the biggest area of cost reduction has been in staff costs where the full year cost is £0.9 million lower than in the prior year. Whilst overall headcount has only reduced by 3 across the year, where leavers have been in senior roles, we have looked to promote internally, realising savings. Additionally, where possible, we have looked to harness opportunities that arose through natural attrition, creating global roles where possible rather than just backfilling every role directly.

Headcount¹	BUK²	LWM	IN	Group
Opening (restated)	47	45	44	136
Starters	22	11	12	45
Leavers	(18)	(10)	(20)	(48)
Closing	51	46	36	133

¹defined as number of people paid via monthly payroll ² BUK equates to Business Solutions & Governance plus centralised, Group functions.

Cash flow

As with in 2020, the biggest focus within Finance throughout 2021 was cash management. Cash has remained tight, yet stable, across the year with the 2020 year-end balance being £1.3 million, the interim 2021 balance also being £1.3 million and the final year-end balance for 2021 being £1.4 million. The key items that helped to maintain our cash position over and above day-to-day working capital management include:

· Further progressing credit control processes and procedures to keep our debtor days as low as possible

· Second US Paycheck Protection Programme loan (and subsequent grant) of £0.9m

· New NY and London office leases which resulted in cash savings of £0.5m year on year

· Final payment made on the US vendor loan in August, freeing up $0.7m in the second half of the year

· Two successful R&D tax credit claims for FY19 and FY20 totalling £0.5m.

All of these actions combined resulted in a cash balance at 31 December 2021 of £1.4 million (2020: £1.3 million).

Cash and net debt

At the year end, we had a net debt position of £1.0 million, including IFRS16 lease liabilities (2020: net cash £0.1 million). The biggest movement is the recognition of the lease liabilities on the new offices, particularly in New York which has a lease period until January 2028.

	Year ended 31 Dec 2021	Year ended 31 Dec 2020
Cash	1,372	1,343
Borrowings	(100)	(1,060)
Lease liabilities under IFRS16	(2,305)	(184)
Net cash/(debt)	(1,033)	99

Trade debtors

	Year ended 31 Dec 2021	Year ended 31 Dec 2020
Current/not due	1,063	1,862
30-60 days past due	1,059	404
60-120 days past due	427	332
120+ days past due	211	769
Gross trade receivables	2,761	3,367
Provision	(160)	(440)
Net trade receivables	2,601	2,927

Net trade receivables as a % of revenue	16%	16%

The overall net trade receivables balance has reduced by 11% year-on-year, and the percentage of gross debt greater than 60 days past due has further reduced this year to 23% (2020: 33%).

Going concern

The Group's business activities, together with the risk factors likely to affect its future development, performance and position, are set out in the Chairman's statement and the Interim Chief Executive's review.

The Directors regularly review detailed forecasts of sales, costs and cash flows, and project forward 12 months or more. The assumptions underlying these forecasts are challenged, varied and tested to establish the likelihood of a range of possible outcomes, including reasonable cash flow sensitivities. The expected figures are carefully monitored against actual outcomes each month and variances are highlighted and discussed at Board level.

The Group's trading has continued to be affected by the Covid-19 pandemic as described in the Interim Chief Executive's review. Given the disruption to trading, the Directors have completed a comprehensive going concern review and, in adopting the going concern basis for preparing the financial statements, the Directors have considered the future trading prospects of the Group's businesses, the Group's available liquidity alongside the Group's principal risks as set out in "Our approach to risk and risk management".

The Group meets its day-to-day financing and working capital requirements through ongoing operating cash flows and available cash.

The Group's forecasts and projections, taking account of possible changes in trading performance, show that the Group will be able to continue to operate in this way.

Cashflows have been modelled in both base case forecast and downside scenarios. In the downside scenario, certain mitigating actions will be required to ensure that the Company can continue to operate as a going concern.

The base case scenario presumes an improvement in trading conditions during 2022 and into 2023 compared to 2021, with revenue projected to grow by 20% from 2021 to 2022, and by 6% from 2022 into 2023. The Directors anticipate a stronger performance in 2022 and into 2023 on the assumption that there will not be another full Covid-19-related lockdown. The Group expects to run a full calendar of events during 2022 along with expected new business wins and confirmed bookings; bookings for 2022 are promising and ahead of the same period in 2021.

The downside scenario assumes a reduction in revenues of 16% compared with the base case. The downside scenario would deliver revenue at the same level as 2021, which in effect reduces events revenue by £2.4 million to £5.6 million and other revenue by £0.8 million to £11.1 million. A drop in events revenue would have a corresponding reduction in costs; if this scenario were to happen, then the Directors would look at making costs savings were possible, primarily focused on staff costs. This would be achieved by a mixture of freezing any active recruitment and reducing the number of current employees. For the reasons noted above, the Directors do anticipate some growth, hence the downside scenario modelled is considered to be at the bottom end of expectations and an extremely remote possibility.

Cash

Cash levels are stable due to managing the cash position tightly during 2020 and 2021 and during the period under review cash balances remain at adequate levels to fund the Group's planned activities.

The Group has also undertaken a reverse stress test exercise to consider the circumstances under which the Group would run out of cash and therefore not be able to pay creditors as they fall due. If revenues fell 7% below the downside scenarios in the going concern period and no further cost mitigations were put in place, then the Group could potentially run out of cash in Q2 of 2023. In light of current trading, and considering the Group already has £9.4 million of contracted bookings for 2022, the Directors feels this scenario is highly unlikely. These levels of revenue would be lower than 2021 which was the Group's worst ever year. The Group is now able to run live in person events, which were predominantly virtual in 2021. Whilst the costs incurred in live events are significantly more than virtual events, the revenue and profit from such events is also much higher. Additionally, the expected media revenue growth in 2022 is mainly driven by our US business, and whilst this is growth on 2021, it is not against 2019/2020 levels, it is felt this is achievable with new management in place along with new product offerings. Accordingly, the Board considers this scenario is extreme in nature and very unlikely to occur.

On 7 April 2022, the Company announced that, at the same time as these results are released, it proposed to raise approximately £1.1 million for working capital purposes, using its existing share authorities, by way of a firm placing and open offer to qualifying shareholders through the issue of new ordinary shares at an issue price of 5.5 pence per share which represents a discount of approximately 18.5% to the closing mid-market price of a Bonhill share on 6 April 2022.

Going concern basis

The Directors recognise the low level of liquidity and headroom that would result from the downside scenarios or other economic disruption or uncertainty. The proposed fundraising serves to protect the business from such shocks and disruption and provides additional working capital to support growth initiatives where possible.

The continued impact of Covid-19 is uncertain and the Directors acknowledge that, whilst they are comfortable that uncertainties in respect of cash flows referred to above, are not material uncertainties which may cast significant doubt about the ability of the Company to continue as a going concern, the impact of the pandemic on trading conditions could be more prolonged or severe than currently forecast by the Directors. If this were to prove to be the case, the Group may need to implement additional operational or financial measures to ensure that the Group is prevented from running out of cash and continues to pay its creditors as they fall due.

Based on the scenarios modelled and the underwritten £1.1 million equity fundraising referred to above, the Directors believe that the Group is well placed to manage its financing and other business risks satisfactorily and have been able to form a reasonable expectation that the Group has adequate cash resources to continue in operation for at least twelve months from the signing of these consolidated financial statements.

The Directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

Simon Bullock

Interim Chief Financial Officer

Consolidated statement of comprehensive income

for the year ended 31 December 2021

	Year ended 31 December 2021			Restated Year ended 31 December 2020
	Adjusted results £'000	Adjusting items £'000	Statutory results £'000	Adjusted results £'000	Adjusting items £'000	Statutory results £'000
Revenue	16,360	-	16,360	17,812	-	17,812

Net operating expenses	(16,264)	-	(16,264)	(17,741)	(1,429)	(19,170)
Impairment relating to expected credit losses	(160)	-	(160)	(440)	-	(440)
Depreciation	(130)	-	(130)	(153)	-	(153)
Amortisation and impairment	(8,135)	-	(8,135)	(7,919)	(888)	(8,807)
Net operating loss	(8,329)	-	(8,329)	(8,441)	(2,317)	(10,758)

Finance costs	(146)	-	(146)	(211)	(5)	(216)
Loss before tax	(8,475)	-	(8,475)	(8,652)	(2,322)	(10,974)
Tax	395	-	395	18	-	18
Loss for the period	(8,080)	-	(8,080)	(8,634)	(2,322)	(10,956)

Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations	129	-	129	(251)	-	(251)

Total comprehensive loss for the year	(7,951)	-	(7,951)	(8,885)	(2,322)	(11,207)
Basic loss per share attributable to the owners of the parent	(8.2p)		(8.2p)	(10.50p)		(13.33p)
Diluted loss per share attributable to the owners of the parent			(7.24p)			(11.34p)

Consolidated statement of financial position

as at 31 December 2021

	31 December 2021 £'000	Restated 31 December 2020 £'000	Restated 31 December 2019 £'000
Non-current assets
Goodwill	4,810	10,760	17,109
Other intangible assets	6,624	7,941	9,820
Property, plant and equipment	103	190	343
Deferred tax asset	292	316	459
Right-of-use asset	2,140	158	1,493
	13,969	19,365	29,224

Current assets
Trade and other receivables	3,288	4,596	8,070
Cash and cash equivalents	1,372	1,343	1,891
	4,660	5,939	9,961

Total assets	18,629	25,304	39,185

Non-current liabilities
Deferred tax liability	(348)	(297)	(355)
Borrowings	(81)	(50)	(1,046)
Lease financial liability	(1,686)	-	(712)
	(2,115)	(347)	(2,113)

Current liabilities
Trade and other payables	(3,366)	(3,354)	(5,265)
Borrowings	(19)	(1,010)	(1,568)
Lease financial liability	(619)	(184)	(888)
Current tax liability	(1)	-	(23)
	(4,005)	(4,548)	(7,744)

Total liabilities	(6,120)	(4,895)	(9,857)

Net assets	12,509	20,409	29,328

Equity
Share capital	986	986	486
Share premium account	1,759	1,759	-
Share-based payment reserve	346	245	217
Merger reserve	1,976	1,976	1,976
Other reserves	104	104	104
Retained earnings	7,881	16,011	26,966
Foreign exchange reserve	(543)	(672)	(421)
Total equity attributable to owners of the parent	12,509	20,409	29,328

The results for the year ended 31 December 2020 and 31 December 2019 have been restated to reflect the impact of the IFRIC decision on configuration and customisation costs in a cloud computing arrangement relating to IAS 38 'Intangible Assets'. As a result of this accounting policy change some costs previously capitalised have now been expensed to the income Statement.

Consolidated statement of changes in equity

for the year ended 31 December 2021

	Share capital £'000	Share premium £'000	Share- based payment reserve £'000	Merger reserve £'000	Other reserves £'000	Retained earnings £'000	Foreign exchange reserve £'000	Total £'000
Balance as at 31 December 2019 (reported)	486	-	217	1,976	104	27,429	(421)	29,791
Restatement (note 1)	-	-	-	-	-	(463)	-	(463)

Balance as at 31 December 2019 (restated)	486	-	217	1,976	104	26,966	(421)	29,328

Loss for the period	-	-	-	-	-	(10,956)	-	(10,956)
Other comprehensive income	-	-	-	-	-	-	(251)	(251)
Total comprehensive loss for the period	-	-	-	-	-	(10,956)	(251)	(11,207)

Transactions with owners in their capacity as owners:
Issue of share capital	500	2,000	-	-	-	-	-	2,500
Share issue costs	-	(241)	-	-	-	-	-	(241)
Share option charge	-	-	28	-	-	-	-	28
Other movements						1		1
Balance as at 31 December 2020 (restated)	986	1,759	245	1,976	104	16,011	(672)	20,409

Loss for the year	-	-	-	-	-	(8,080)	-	(8,080)
Other comprehensive income	-	-	-	-	-	-	129	129
Total comprehensive loss for the year	-	-	-	-	-	(8,080)	129	(7,951)

Transactions with owners in their capacity as owners:
Issue of share capital	-	-	-	-	-	-	-	-
Share issue costs	-	-	-	-	-	-	-	-
Share option charge	-	-	101	-	-	-	-	101
Other movements	-	-	-	-	-	(50)	-	(50)
Balance as at 31 December 2021	986	1,759	346	1,976	104	7,881	(543)	12,509

Consolidated statement of cash flows

for the year ended 31 December 2021

	Year ended 31 December 2021 £'000	Restated Year ended 31 December 2020 £'000
Cash generated from operations	426	699
Interest (paid)	(123)	(243)
Taxation received	476	-
Integration costs	-	(1,627)
Net cash generated from / (used in) operating activities	779	(1,171)

Investing activities
Purchases of property, plant and equipment	(49)	(35)
Purchases of intangible assets	(24)	(58)
Net cash used in investing activities	(73)	(93)

Financing activities
Proceeds from issue of ordinary shares	-	2,259
Repayment of borrowings	(988)	(1,604)
Lease repayments	(629)	(860)
Government (C-19 & PPP) funding received	920	939
Bank Borrowing drawn	50	50
Net cash (used in) / generated from financing activities	(647)	784

Foreign exchange revaluation loss	(30)	(68)

Net increase/ (decrease) in cash and cash equivalents	29	(548)
Cash and cash equivalents at the beginning of the period	1,343	1,891
Cash and cash equivalents at the end of the period	1,372	1,343

The Group consists of entities with functional currencies of GBP, USD, SGD and HKD.

Notes to the cashflow statement

Reconciliation of loss after tax to cash flows used in operations

	Group		Company
	Year ended 31 December 2021 £'000	Year ended 31 December 2020 £'000	Year ended 31 December 2021 £'000	Year ended 31 December 2020 £'000
Loss after tax	(8,080)	(10,956)	(4,687)	(13,352)
Adjustments for:
Tax	(395)	(18)	(509)	194
Finance costs	146	216	19	2
Amortisation and impairment	8,135	8,807	7,717	8,249
Depreciation of property, plant and equipment	130	153	71	67
Share-based payment charge	101	(18)	101	(18)
PPP loan forgiveness	(931)	(863)	-
Other exceptional costs	-	1,429	-	824
Operating cash flows before movements in working capital	(894)	(1,250)	2,712	(4,034)

Movement in receivables	1,308	3,784	1,640	(4)
Movement in payables	12	(1,835)	(4,479)	2,816
Cash flows generated from / (used in) operations	426	699	(127)	(1,222)

Notes to the financial statements

for the year ended 31 December 2021

1. Basis of preparation

The financial statements of Bonhill Group plc have been prepared in accordance with International Financial Reporting Standards as adopted by the United Kingdom and IFRIC interpretations (IFRS) and the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process pf applying the accounting policies.

The financial information for the years ended 31 December 2021 and 2020 does not constitute the Company's statutory accounts for those years.

Statutory accounts of the year ended 31 December 2020 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 31 December 2021 will be delivered to the Registrar of Companies in due course.

The auditor's reports on the accounts for the year ended 31 December 2021 and for the year ended 31 December 2020 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

Going concern

The Group meets its day-to-day financing and working capital requirements through ongoing operating cash flows and available cash.

The Group's forecasts and projections, taking account of possible changes in trading performance, show that the Group will be able to continue to operate in this way.

Cash

The Group has also undertaken a reverse stress test exercise to consider the circumstances under which the Group would run out of cash and therefore not be able to pay creditors as they fall due. If revenues fell 7% below the downside scenarios in the going concern period and no further cost mitigations were put in place, then the Group could potentially run out of cash in Q2 of 2023. In light of current trading, and considering the Group already has £9.1 million of contracted bookings for 2022, the Directors feels this scenario is highly unlikely. These levels of revenue would be lower than 2021 which was the Group's worst ever year. The Group is now able to run live in person events, which were predominantly virtual in 2021. Whilst the costs incurred in live events are significantly more than virtual events, the revenue and profit from such events is also much higher. Additionally, the expected media revenue growth in 2022 is mainly driven by our US business, and whilst this is growth on 2021, it is not against 2019/2020 levels, it is felt this is achievable with new management in place along with new product offerings. Accordingly, the Board consider this scenario is extreme in nature and very unlikely to occur.

Going concern basis

The Directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

2. Segmental analysis

For executive management purposes, the business has three reportable segments being Bonhill UK, InvestmentNews and Last Word Media. Further analysis of revenue has been performed by core proposition and country.

	Year ended 31 December 2021 £'000	Year ended 31 December 2020 £'000
Analysis of revenue by core propositions
Business information	10,279	10,695
Live events	5,263	6,074
Data and insight	819	1,043
Total	16,360	17,812

Analysis of revenue by country
United Kingdom	7,727	7,880
North America	7,377	9,029
Asia Pacific	1,256	903
Total	16,360	17,812

Year ended 31 December 2021	Last Word Media £'000	Bonhill UK £'000	InvestmentNews £'000	Total £'000
Reportable segmental income statement
Revenue	6,336	2,647	7,377	16,360
Adjusted EBITDA	566	(1,107)	564	23
Adjusted operating profit/(loss)	302	(1,665)	(6,966)	(8,329)
Statutory operating profit/(loss)	302	(1,665)	(6,966)	(8,329)
Statutory profit/(loss) before tax	299	(934)	(7,840)	(8,475)

Year ended 31 December 2020 (restated)	Last Word Media £'000	Bonhill UK £'000	InvestmentNews £'000	Total £'000
Reportable segmental income statement
Revenue	6,228	2,555	9,029	17,812
Adjusted EBITDA	506	(2,827)	1,934	(387)
Adjusted operating loss	47	(6,362)	(2,126)	(8,441)
Statutory operating loss	56	(7,416)	(3,398)	(10,758)
Statutory loss before tax	34	(6,624)	(4,384)	(10,974)

Segmental assets and liabilities

	Asset 2021 £'000	Liabilities 2021 £'000	Assets 2020 (restated) £'000	Liabilities 2020 (restated) £'000
Bonhill UK	6,928	(1,927)	6,464	(1,647)
InvestmentNews	9,801	(2,998)	16,572	(1,771)
Last Word Media	1,900	(1,195)	2,268	(1,516)
Total Group	18,629	(6,120)	25,304	(4,895)

In September 2021, the Group announced a Company rebrand which will change the reporting segments from 1 January 2022 to Financial Services and Business Solutions. To aid financial comparison next year, 2021 has been restated into these new segments:

Year ended 31 December 2021	Business Solutions £'000	Financial Services £'000	Total £'000
Reportable segmental income statement
Revenue	1,463	14,897	16,360
Adjusted EBITDA	(1,192)	1,215	23
Adjusted operating profit/(loss)	(1,750)	(6,579)	(8,329)
Statutory operating profit/(loss)	(1,750)	(6,579)	(8,329)
Statutory profit/(loss) before tax	(1,019)	(7,456)	(8,475)

3. Operating loss

(a) Operating loss for the year has been arrived at after charging the following items:

	Year ended 31 December 2021 £'000	Year ended 31 December 2020 (restated) £'000
Depreciation of property, plant and equipment	130	153
Amortisation of purchased or internally generated intangible assets	1,271	600
Impairment of intangible assets	6,191	6,601
Lease amortisation	673	718
Foreign exchange (gain) or loss	13	180
Operating lease rentals in respect of land and buildings	32	24
Staff costs	9,127	10,012
Directors' remuneration	482	542
Events costs	2,108	1,769
Print/digital related costs	1,717	1,513
Grant income related to Covid-19	(931)	(1,025)
Other costs	3,876	5,166
Adjusting operating costs	24,689	26,253
Adjusting items	-	2,317
Statutory operating costs	24,689	28,570

Other costs include freelancers, contractors, distribution costs, technology costs, travel expenses, marketing costs and professional fees.

(b) Adjusting items

The Group incurred no costs in the year ended 31 December 2021 which the Directors believe should be disclosed as adjusting items (2020: £2.3 million). Adjusted results are prepared to provide additional relevant information on our future or past performance where equivalent information cannot be presented using financial measures under IFRS.

	Year ended 31 December 2021 £'000	Year ended 31 December 2020 £'000
Restructuring	-	805
Integration costs	-	624
Amortisation of intangibles acquired through business combination	-	888
	-	2,317

4. Reconciliation of Adjusted EBITDA to statutory earnings

Earnings before interest, depreciation and amortisation ("EBITDA") is a measure of earnings and cash generative capacity. Adjusted EBITDA, which excludes non-recurring items, is a non-GAAP financial measure which facilitates an understanding of underlying earnings and cash generative capacity. A reconciliation of Adjusted EBITDA to statutory earnings is set out below.

	Year ended 31 December 2021 £'000	Year ended 31 December 2020 (restated) £'000
Adjusted EBITDA	23	(387)
Adjusting items	-	(1,429)
EBITDA	23	(1,816)
Depreciation	(130)	(153)
Amortisation and impairment	(8,135)	(8,807)
Share option (charge)/credit	(87)	18
Operating loss	(8,329)	(10,758)
Net finance costs	(146)	(216)
Loss before tax	(8,475)	(10,974)
Taxation	395	18
Loss after tax	(8,080)	(10,956)

5. Earnings per share

Basic earnings per share

Basic loss per share is calculated by dividing the loss attributable to owners of the parent by the weighted average number of ordinary shares in issue during the year.

Based on statutory earnings

	Year ended 31 December 2021 £'000	Year ended 31 December 2020 (restated) £'000
Loss attributable to owners of the parent	(8,080)	(10,956)
Weighted average number of ordinary shares in issue	98,585,692	82,196,705
Basic loss per share (pence per share)	(8.20p)	(13.33p)

Based on adjusted earnings	Year ended 31 December 2021 £'000	Year ended 31 December 2020 (restated) £'000
Loss attributable to owners of the parent	(8,080)	(8,634)
Weighted average number of ordinary shares in issue	98,585,692	82,196,705
Basic loss per share (pence per share)	(8.20p)	(10.50p)

Diluted earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

Based on statutory earnings	Year ended 31 December 2021 £'000	Year ended 31 December 2020 (restated) £'000
Loss attributable to owners of the parent	(8,080)	(10,956)
Weighted average number of ordinary shares in issue	98,585,692	82,196,705
Dilutive effect of "in the money" share options	12,951,762	14,451,762
Diluted ordinary shares	111,537,454	96,648,467
Diluted loss per share (pence per share)	(7.24p)	(11.34p)

6. Investments

Company	Subsidiary undertakings £'000
Cost
1 January 2020	26,455
Additions	-
31 December 2020	26,455
Additions	-
31 December 2021	26,455

Impairment
1 January 2020	(10)
Impairment	(7,883)
31 December 2020	(7,893)
Impairment	(7,423)
31 December 2021	(15,316)

Net book value
31 December 2021	11,139
31 December 2020	18,562

During the year, the decision was made to recognise an impairment of £7.4 million against the Company investments in order to better reflect the NBV of the intangible assets held post acquisitions.

7. Right-of-use asset

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

· Leases of low value assets; and

· Leases with a term of 12 months or less.

In applying the modified retrospective approach, the Group has taken advantage of the following practical expedients:

· Leases with a remaining term of 12 months or less from the date of application have been accounted for as short-term leases (i.e. not recognised on the balance sheet) even though the initial term of the leases from lease commencement date may have been more than 12 months.

	Group
Right-of-use asset	2021 £'000	2020 £'000
Carrying value as at start of the period	158	1,493
Additions to right-of-use assets	2,637	(2)
Amortisation charged	(673)	(820)
Termination of leases	-	(508)
Foreign exchange impact of revaluation	18	(5)
Carrying value as at the end of the period	2,140	158

	Group
Lease liability	2021 £'000	2020 £'000
Carrying value as at start of the period	184	1,600
Additions to lease liability	2,573	2
Interest charged	91	3
Repayments made	(565)	(902)
Termination of leases	-	(508)
Foreign exchange impact of revaluation	22	(11)
Carrying value as at the end of the period	2,305	184

Lease liability current/non-current split	£'000	£'000
Current lease liability	619	184
Non-current lease liability	1,686	-
Total lease liability	2,305	184

	Company
Right-of-use asset	2021 £'000	2020 £'000
Carrying value as at start of the period	-	261
Additions to right-of-use assets	537	-
Amortisation charged	(207)	(185)
Termination of lease	-	(76)
Foreign exchange impact of revaluation	-	-
Carrying value as at the end of the period	330	-

Lease liability	£'000	£'000
Carrying value as at start of the period	-	260
Additions to lease liability	473	-
Interest charged	9	3
Repayments made	(182)	(156)
Termination of lease	-	(107)
Foreign exchange impact of revaluation	-	-
Carrying value as at the end of the period	300	-

Lease liability current/non-current split	£'000	£'000
Current lease liability	300	-
Non-current lease liability	-	-
Total lease liability	300	-

During the year the Group signed a new lease for London premises at 29 Clerkenwell Road, London and extended the lease on its office in Hong Kong.

8. Called up share capital

Issued and fully paid ordinary shares of 1p each

	Number	£'000
As at 1 January 2020	48,585,692	486
Shares issued during the year	50,000,000	500
As at 1 January 2021	98,585,692	986
Shares issued during the year	-	-
As at 31 December 2021	98,585,692	986

Issue of shares

No shares were issued during the year.

Rights of shares

Dividends and income - Ordinary shares are entitled to receive dividends as approved by the Board of Directors.

Voting rights - Ordinary shares are entitled to one share per vote at General Meetings. Deferred shares cannot be transferred.

Distribution - Upon liquidation of the Company, once all liabilities have been met, ordinary shareholders will receive the value paid up per share plus £100.

The Company has granted options to subscribe for ordinary shares of 1p each, as follows:

			Number of shares for which rights are exercisable
Grant date	Subscription price per share	Period within which options are exercisable	31 December 2021	31 December 2020
16.08.2018	80.0p	16/08/2021 - 16/08/2028	14,880	14,880
16.08.2018	80.0p	16/08/2022 - 16/08/2028	14,882	14,882
16.08.2018	1.0p	16/08/2021 - 16/02/2022	451,000	451,000
16.08.2018	1.0p	16/08/2022 - 16/02/2023	451,000	451,000
26.10.2021	1.0p	25/10/2023 - 25/10/2030	6,010,000	6,760,000
26.10.2021	1.0p	25/10/2024 - 25/10/2030	6,010,000	6,760,000
			12,951,762	14,451,762

During the year, 1.5 million share options were forfeited (year ended 31 December 2020: 1,569,996).

Share premium

The share premium account shows the amount subscribed for share capital in excess of nominal value, net of share issue costs.

	£'000
Share premium as at 31 December 2020	1,759
Subscription of share capital in excess of nominal value (net of issue costs)	-
Share premium as at 31 December 2021	1,759

Merger reserve

Consideration for the acquisition of Last Word Media included £2.0m of shares. The Group applied merger relief under the UK Companies Act s615 and so the value of the shares issued as consideration above their nominal value is included in a merger reserve.

9. Events after the reporting date

On 7 April 2022 the Company announced that it proposed to raise approximately £1.1 million for working capital purposes through the issue of new ordinary shares in the Company at an issue price of 5.5 pence per share, using its existing share authorities, by way of a firm placing and open offer to qualifying shareholders. The issue price represents a discount of approximately 18.5% to the closing mid-market price of a Bonhill share on 6 April 2022, being the business day preceding the date of the announcement.

The Company has received written commitments from two of its largest institutional shareholders and a letter of intent from a third to subscribe for new ordinary shares in the placing and effectively to underwrite the open offer for, in aggregate, the requisite £1.1 million. The commitments of the institutional shareholders are conditional on certain events, including the circular relating to the open offer being published not later than 30 April 2022. In addition, the commitment of one of the institutional shareholders is conditional on no adverse trading update announcement being released by the Company prior to the close of the open offer.

10. Availability of this announcement

Copies of this announcement are available from the Company's website, www.bonhillplc.com

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Bonhill Group (BONH)

Friday, 26th April 2024

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