Interim Results for six months ended 30 June 2020

RNS Number : 5323D
Christie Group PLC
29 October 2020
 

29 October 2020


Christie Group plc

Interim Results for the six months ended 30 June 2020

 

 

Christie Group plc ('Christie Group' or the 'Group'), the leading provider of Professional & Financial Services and Stock & Inventory Systems & Services to the hospitality, leisure, healthcare, medical, childcare & education and retail sectors, is pleased to announce its interim results for the six months ended 30 June 2020.

 

H1 2020 Headlines:

 

· Revenues amounted to £18.8m (H1 2019: £38.1m)

 

· Operating loss of £5.5m (H1 2019: £1.5m profit)

 

· Prudently foregone an interim dividend this year (H1 2019: 1.25p per share)

 

· Strong cash balance at 30 June 2020 of £13.4m

 

· Stocktaking more than 50% back as businesses reopen

 

Commenting on the results, David Rugg, Chairman and Chief Executive of Christie Group, said:

 

"The Group's performance was impacted by the outbreak of Covid-19 and the subsequent difficult trading conditions associated with the lockdown. However, all businesses have resumed to the extent now possible. Our third quarter trading has been encouraging and, if it continues, should lead to a much improved second half."

 

 

Enquiries:

 

Christie Group plc

 

David Rugg

Chairman and Chief Executive

020 7227 0707

 

 

Daniel Prickett

Chief Operating Officer

 

 

 

020 7227 0700

Simon Hawkins

Group Finance Director

 

020 7227 0700

Shore Capital

Antonio Bossi

Nominated Adviser and Broker

 

020 7408 4090

 

 

 

 

Notes to Editors:

 

Christie Group plc (CTG.L), quoted on AIM, is a leading professional business services group with 41 offices across the UK and Europe, catering to its specialist markets in the hospitality, leisure, healthcare, medical, childcare & education and retail sectors.

 

Christie Group operates in two complementary business divisions: Professional & Financial Services (PFS) and Stock & Inventory Systems & Services (SISS). These divisions trade under the brand names: PFS - Christie & Co, Pinders, Christie Finance and Christie Insurance: SISS - Orridge, Venners and Vennersys.

 

Tracing its origins back to 1846, the Group has a long established reputation for offering valued services to client companies in agency, valuation services, investment, consultancy, project management, multi-functional trading systems and online ticketing services, stock audit and inventory management. The diversity of these services provides a natural balance to the Group's core agency business.

 

The information contained within this announcement is deemed by the Group to constitute inside information under the market Abuse Regulation (EU) No. 596/2014.

 

For more information, please go to www.christiegroup.com.

 

 

 

Chairman and Chief Executive's review

 

Our revenue for the six months ended 30 June 2020 amounted to £18.8m (H1 2019: £38.1m), approximately 50% of that generated in the first half of 2019. This reduction was entirely attributable to the business interruption caused by the Covid-19 pandemic, illustrating the scale of its impact.

We acted swiftly and decisively to mitigate its effects to the fullest extent possible and in doing so limited an unavoidable first half operating loss to £5.5m, which compares to a £1.5m operating profit reported for H1 2019.

While unprecedented, the first half loss was rather better than our revised projections for the period and I am pleased to advise that we have continued to trade ahead of those expectations in the third quarter.

We continue to avail ourselves of all government help and support. The additional gross profit from the £19m foregone Q2 revenue would if traded through, in the opinion of your board, have been more than sufficient to have offset the trading loss recorded plus the UK government's Covid-related support and the similar support received from foreign governments.

Cash collection and retention were strong with limited bad debt experience and we finished the half year with over £13.4m cash in hand, boosted by the drawdown of the Coronavirus Large Business Interruption Loan Scheme (CLBILS) loan in June.

 

Professional & Financial Services 

Our PFS division recorded an operating loss of £2.9m for the period (H1 2019: £2.3m profit), from depressed revenues of £11.5m (H1 2019: £21.3m).

The momentum for 2019 initially continued into 2020. Confidence flagged in mid-March as the pandemic took hold. Active users of our website increased by 46% from April to the end of June and user sessions increased by 63%. Notwithstanding our teams' inability to physically visit businesses or for new prospective purchasers to do so, we nonetheless received 757 offers to purchase, agreed 208 deals and contracted 98 sales during the lockdown period.

Certain sectors, most notably the pharmacy sector and food retailers, were impacted less than others and demand held up well. In March we launched the sale of a portfolio of 44 surplus Boots pharmacies to a receptive market.

In Hospitality, we sold the Chrysos Hotel, overlooking a garden square in London, Paddington, to Touriste Collection of Paris for £18 million in a cross-border deal and we acted as agents for the sale of The Mitre Hotel at Hampton Court which was sold for the first time in 30 years.

Internationally, we transacted with SAS Societe Vosgienne, Ibis Styles, Holiday Inn Calais Coquelles, Tryp Wolfsburg, Teikyo Campus and Schloss Reinfels.

In Care we arranged agreement for lease and forward-funded a number of investment sales at yields as keen as 4%. First half highlights, included our creation of the sale & leaseback of The Holmes Care Group for £47.5m to Impact Healthcare REIT plc, with the deal exchanging on 9 March, and more recently we acted on behalf of Legal & General who sold their investment in the BMI Woodlands Hospital, Darlington for £29.4 million.

In Childcare, a bumper start to the year included the sale of the Kids Allowed Group, comprising 8 locations across South Manchester and Cheshire, to Kids Planet. Whilst in Education, we completed the sale of the former Excel English college and Heathfield Knoll School, established in 1620. Many children were removed from day care and their home-working parents sought to provide home learning. These children are returning to external provision either near to home or near to the parents' place of employment, depending upon where their work is now based.

The furlough scheme allowed us to retain Business Valuers, Surveyors, Consultants & other Sector specialists during lockdown. The introduction of flexible furlough from July then enabled us to match their availability with the demand for our services.

Our Financial Services business continued on a par with prior year activity. CBILS, and Bounce Back ("BBLS") loans provided a new source of funding which gained in momentum as the year progressed.

Insurance rates, upon which our commissions are based, have hardened.

 

Stock & Inventory Systems & Services

Our SISS division achieved revenues of £7.4m in the period, a significant reduction compared to the £16.8m reported in H1 2019. The first half operating loss increased to £2.6m as a result (H1 2019: £0.7m).

Encouragingly, post-lockdown demand for our retail stocktaking services quickly ignited. Our food retailing clients have been trading briskly and most quickly sought our resumption. Our UK retail business has made a positive contribution in the third quarter, with reorganisation in progress. We quickly brought back our sales team to meet enquiries and re-engaged our supply chain management to handle new business.

Internationally, we faced few border closures. In Germany, we traded throughout where permitted and in Belgium and France have recommenced stocktaking activity.

Our licensed trades stocktaking business, Venners, endured a shutdown whilst Pubs, Hotels, Restaurants, Sports venues & theatres were closed. We are, since they reopened, back up and running.

Many businesses in London and other city centres have yet to reopen, including contributors to the night-time economy. Our trade is increasing, and we anticipate utilising the new Job Support Scheme to maintain our skilled workforce.

Vennersys, our cloud-based enterprise SaaS, enjoyed an extraordinary uptake in on-line sales once visitor attractions were able to re-open. Covid-19 necessitated the eradication of queues through the introduction of pre-sold and timed ticketing. Eight existing Venpos clients launched their venues on-line for the first time. New clients included Treasure Island, Bear Feet and Lincolnshire Wildlife Park.

Vennersys's web-based food & drink ordering system requires no app download by the customers. It can be used across any and every venue using our Venpos on-line element. For users of our enterprise system, food ordering comes fully integrated to existing point of sale, revenue & stock management systems and the accompanying reporting suite.

 

Director Change

Laurie Benson a Non-executive Director steps down from the board shortly after serving a three-year term. We have benefitted from Laurie's knowledge of digital systems, social media and remuneration structures, for which we are most grateful, and I thank her on your behalf.

 

Summary and Outlook

The ability of our field-based staff and workers to operate effectively has been largely unaffected by changing work practice. Our temporarily home-based staff mostly now look forward to returning to their offices. They have in the main coped magnanimously. I thank both these groups of colleagues and our central team for their unflagging efforts and enterprise.

In aggregate our pipelines of ongoing transactions were maintained throughout lockdown.  For those requesting funding, the lender requirement for a valuation has also been maintained. Reopened businesses require stocktaking. Open or closed, insurance is required.

In view of the necessary but disappointing localised lock downs and further Covid-19 related restrictions, we have prudently opted to forgo the declaration of an interim dividend this year (H1 2019: 1.25p per share).

 

We are well resourced and our third quarter trading has been encouraging.

 

I wish you well.


David Rugg

Chairman and Chief Executive

 

 

 

Consolidated interim income statement

 

 

Note

Half year to 30 June

2020

£'000

(Unaudited)

Half year to 30 June

2019

£'000

(Unaudited)

Year ended 31 December 2019

£'000

(Audited)

 

 

Revenue

 

18,844

38,140

78,041

 

 

Other income - government grant

4

5,047

-

-

 

 

Employee benefit expenses

 

(21,209)

(27,179)

(53,754)

 

 

 

 

2,682

10,961

24,287

 

 

Depreciation and amortisation

 

(1,274)

(1,115)

(2,405)

 

 

Impairment reversal

 

-

-

22

 

 

Gain on sale and leaseback of property

 

-

-

1,531

 

 

Other operating expenses

 

(6,886)

(8,331)

(17,664)

 

 

Operating (loss)/profit

 

(5,478)

1,515

5,771

 

 

Finance costs

 

(522)

(624)

(1,351)

 

 

Finance income

 

-

-

2

 

 

Total finance charge

 

(522)

(624)

(1,349)

 

 

(Loss)/profit before tax

 

(6,000)

891

4,422

 

 

Taxation

6

1,140

(187)

(409)

 

 

(Loss)/profit for the period after tax

 

(4,860)

704

4,013

 

 

 

 

 

(Loss)/profit for the period after tax attributable to:

Equity shareholders of the parent

 

(4,860)

704

4,013

 

Earnings per share attributable to equity holders - pence

Basic

7

(18.54)

2.68

15.30

Diluted

7

(18.54)

2.63

14.87

 

All amounts derive from continuing operations.

 

 

Consolidated interim statement of comprehensive income

 

 

 

 

 

 

 

 

Half year to 30 June

2020

£'000

(Unaudited)

Half year to 30 June

2019

£'000

(Unaudited)

Year ended 31 December 2019

£'000

(Audited)

 

(Loss)/profit for the period after tax

 

(4,860)

704

4,013

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

 

 

 

Exchange differences on translating foreign operations

 

7

(6)

(145)

 

Net other comprehensive income/(losses) to be reclassified to profit or loss in subsequent periods

 

7

(6)

(145)

 

 

 

 

 

 

 

Items that will not be reclassified to profit or loss:

 

 

 

 

 

Re-measurement (losses)/gains on defined benefit plans

 

(4,748)

1,105

1,207

 

Income tax effect

 

903

(187)

(205)

 

Net other comprehensive (losses)/income not being reclassified to profit or loss in subsequent periods

 

(3,845)

918

1,002

 

Other comprehensive (losses)/income for the period

 

(3,838)

912

857

 

Total comprehensive (losses)/income for the period

 

(8,698)

1,616

4,870

 

Total comprehensive (losses)/income attributable to:

Equity shareholders of the parent

 

(8,698)

1,616

4,870

 

 

 

Consolidated interim statement of changes in shareholders' equity

 

Share capital

£'000

Other reserves £'000

Cumulative

translation

reserve

£'000

Retained earnings

£'000

Total equity

£'000

Half year to 30 June 2020 (unaudited)

 

 

 

 

 

Balance at 1 January 2020

531

5,443

620

(6,628)

(34)

Loss for the period after tax

-

-

-

(4,860)

(4,860)

Items that will not be reclassified subsequently to profit or loss

 

-

-

-

(3,845)

(3,845)

Items that may be reclassified subsequently to profit or loss

 

-

-

7

-

7

Total comprehensive income/(losses) for the period

-

-

7

(8,705)

(8,698)

Movement in respect of employee share scheme

-

18

-

-

18

Employee share option scheme:

 

 

 

 

 

- value of services provided

(75)

-

-

(75)

Balance at 30 June 2020

531

5,386

627

(15,333)

(8,789)

 

Half year to 30 June 2019 (unaudited)

Balance at 1 January 2019

531

5,357

765

(9,032)

(2,379)

 

Restated impact of IFRS 16

-

-

-

(1,821)

(1,821)

 

Restated adjusted balance at 1 January 2019

531

5,357

765

(10,853)

(4,200)

 

Profit for the period after tax

-

-

-

704

704

 

Items that will not be reclassified subsequently to profit or loss

 

-

-

-

918

918

 

Items that may be reclassified subsequently to profit or loss

 

-

-

(6)

-

(6)

 

Total comprehensive income/(losses) for the period

-

-

(6)

1,622

1,616

 

Movement in respect of employee share scheme

-

29

-

-

29

 

Employee share option scheme:

 

 

 

 

 

 

- value of services provided

-

(45)

-

-

(45)

 

Dividends payable

-

-

-

(462)

(462)

 

Balance at 30 June 2019

531

5,341

759

(9,693)

(3,062)

 

 

 

 

 

 

 

Year ended 31 December 2019 (audited)

Balance at 1 January 2019

531

5,357

765

(9,032)

(2,379)

 

Impact of IFRS 16

-

-

-

(1,821)

(1,821)

 

Adjusted balance at 1 January 2019

531

5,357

765

(10,853)

(4,200)

 

Profit for the year after tax

-

-

-

4,013

4,013

 

Items that will not be reclassified subsequently to profit or loss

-

-

-

1,002

1,002

 

Items that may be reclassified subsequently to profit or loss

-

-

(145)

-

(145)

 

Total comprehensive income/(losses) for the year

-

-

(145)

5,015

4,870

 

Movement in respect of employee share scheme

-

27

-

-

27

 

Employee share option scheme:

 

 

 

 

 

 

- value of services provided

-

59

-

-

59

 

Dividends paid

-

-

-

(790)

(790)

 

Balance at 31 December 2019

531

5,443

620

(6,628)

(34)

 

             
 

 

Consolidated interim statement of financial position

 

 

 

 

Note

 

 

At 30 June 2020

£'000

(Unaudited)

 

At 30 June 2019

£'000

(Restated and

unaudited)

 

At 31 December 2019

£'000

(Audited)

Assets

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets - Goodwill

 

1,867

1,856

1,810

Intangible assets - Other

 

1,147

1,320

1,243

Property, plant and equipment

 

1,397

3,639

1,557

Right of use assets

 

6,153

5,671

6,649

Deferred tax assets

 

4,875

2,822

2,649

Other receivables

 

1,900

1,913

1,901

 

 

17,339

17,221

15,809

Current assets

 

 

 

 

Inventories

 

24

15

35

Trade and other receivables

9

7,697

16,610

14,914

Current tax assets

 

240

158

240

Cash and cash equivalents

14

13,415

2,394

9,807

 

 

21,376

19,177

24,996

Total assets

 

38,715

36,398

40,805

Equity

 

 

 

 

Capital and reserves attributable to the Company's equity holders

 

 

Share capital

10

531

531

531

Other reserves

 

5,386

5,341

5,443

Cumulative translation reserve

 

627

759

620

Retained earnings

 

(15,333)

(9,693)

(6,628)

Total equity

 

(8,789)

(3,062)

(34)

Liabilities

 

 

 

 

Non-current liabilities

 

 

 

 

Trade and other payables

 

464

134

464

Retirement benefit obligations

11

16,727

12,641

12,011

Borrowings

 

4,000

546

-

Lease liabilities

 

8,365

6,314

8,737

Provisions

 

593

399

590

 

 

30,149

20,034

21,802

Current liabilities

 

 

 

 

Trade and other payables

12

12,585

10,367

11,574

Current tax liabilities

 

43

67

43

Borrowings

 

2,322

6,895

5,055

Lease liabilities

 

1,122

1,228

1,122

Provisions

 

1,283

869

1,243

 

 

17,355

19,428

19,037

Total liabilities

 

47,504

39,460

40,839

Total equity and liabilities

 

38,715

36,398

40,805

 

 

 

 

 

Consolidated interim statement of cash flows

 

 

 

 

 

 

Note

 

Half year to 30 June 2020

£'000

(Unaudited)

 

Half year to 30 June 2019

£'000

(Unaudited)

 

Year ended

31 December 2019

£'000

(Audited)

Cash flow from operating activities

 

 

 

 

Cash generated from/(used in) operations

13

3,819

(1,103)

6,535

Interest paid

 

(421)

(115)

(992)

Tax paid

 

(150)

(230)

(361)

Net cash generated from/(used in) operating activities

 

3,248

(1,448)

5,182

Cash flow from investing activities

 

 

 

 

Purchase of property, plant and equipment

 

(140)

(322)

(540)

Proceeds from sale of property, plant and equipment

 

-

-

5,082

Interest received

 

-

-

2

Intangible assets expenditure

 

(99)

(155)

(326)

Net cash (used in)/generated from investing activities

 

(239)

(477)

4,218

Cash flow from financing activities

 

 

 

 

Proceeds from loan

 

6,000

-

-

Repayment of bank borrowings

 

(910)

(56)

(653)

(Repayment)/proceeds from invoice discounting

 

(641)

705

37

Repayment of lease liabilities

 

(672)

(829)

(1,596)

Dividends paid

 

-

-

(790)

Net cash generated from/(used in) financing activities

 

3,777

(180)

(3,002)

Net increase/(decrease) in cash

 

6,786

(2,105)

6,398

Cash and cash equivalents at beginning of period

 

6,625

201

201

Exchange gain/(losses) on euro bank accounts

 

4

(6)

26

Cash and cash equivalents at end of period

14

13,415

(1,910)

6,625

 

 

 

 

Notes to the consolidated interim financial statements

1. General information

Christie Group plc is a company incorporated in and operating from England. Christie Group plc is the parent undertaking of a group of companies covering a range of related activities.  These fall into two divisions - Professional & Financial Services and Stock & Inventory Systems & Services.  Professional & Financial Services principally covers business valuation, consultancy & agency, business mortgages & insurance services and business appraisal.  Stock & Inventory Systems & Services covers stock audit & counting, consulting, compliance, inventory preparation & valuation and hospitality & software solutions.

2. Basis of preparation

The interim financial information in this report has been prepared using accounting policies consistent with IFRS as adopted by the European Union. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Directors expect to be adopted by the European Union and applicable as at 31 December 2020. 

 

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2019, except for those noted below and except for the adoption of new standards and interpretations effective as of 1 January 2020. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

 

Going concern

Having reviewed the Group's budgets, projections and funding requirements to 31st December 2021, and taking account of reasonable possible changes in trading performance over this period, particularly in light of Covid-19 risks and counter measures, the Directors believe they have reasonable grounds for stating that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing these interim accounts.

 

The forecasts for the combined Group projections, taking account of reasonably possible changes in trading performance, indicate that the Group has sufficient facilities and headroom to continue in operational existence to 31st December 2021. As a consequence, the Board believes that the Group is well placed to manage its business risks, and longer-term strategic objectives.

 

Non-statutory accounts

These consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The financial information for the year ended 31 December 2019 set out in this interim report does not constitute the Group's statutory accounts for that period. The statutory accounts for the year ended 31 December 2019 have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.  The financial information for the periods ended 30 June 2020 and 30 June 2019 is unaudited.

 

Prior period restatement

The prior period restatement was after reassessing the adoption of the implementation of IFRS 16 on the opening reserves for 1 January 2019, in light of information which was available at the year end. This assessment reduced opening reserves on 1 January 2019 by £760,000. There was no impact of the profit for the period.

3. Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will by definition, seldom equal the related actual results.  The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

 

(a) Estimated impairment of goodwill and investments

Goodwill and investments are subject to an impairment review both annually and when there are indications that the carrying value may not be recoverable. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations.  These calculations require the use of estimates.

 

(b) Retirement benefit obligations

The assumptions used to measure the expense and liabilities related to the Group's defined benefit pension plans are reviewed annually by professionally qualified, independent actuaries, trustees and management as appropriate. Management base their assumptions on their understanding and interpretation of applicable scheme rules which prevail at the statement of financial position date.  The measurement of the expense for a period requires judgement with respect to the following matters, among others:

 

-  the probable long-term rate of increase in pensionable pay;

 

-  the discount rate; and

 

-  the estimated life expectancy of participating members.

 

The assumptions used by the Group, may differ materially from actual results, and these differences may result in a significant impact on the amount of pension expense recorded in future periods.  In accordance with IAS 19, the Group recognises all actuarial gains and losses immediately in other comprehensive income.

 

(c) Deferred taxation

Deferred tax assets are recognised to the extent that the Group believes it is probable that future taxable profit will be available against which temporary timing differences and losses from previous periods can be utilised. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

4. Other income - government grant

The Group has benefited from Government support across its UK and European entities, utilising the furlough scheme from its commencement which has provided financial assistance towards employee salaries.  Government grants have been recognised in the Consolidated Interim Income Statement, under the category 'Other income - government grants', as they are incurred.

 

 

 

5. Segment information

The Group is organised into two main business segments: Professional & Financial Services (PFS) and Stock & Inventory Systems & Services (SISS).

 

The segment results for the period ended 30 June 2020 are as follows:

 

 

PFS

£'000

 

SISS

£'000

 

Other

£'000

 

Group

£'000

Total gross segment revenue

11,492

7,407

1,535

20,434

Inter-segment revenue

(55)

-

(1,535)

(1,590)

Revenue

11,437

7,407

-

18,844

Operating loss

(2,863)

(2,615)

-

(5,478)

Finance costs

(416)

(106)

-

(522)

Loss before tax

(3,279)

(2,721)

-

(6,000)

Taxation

 

 

 

1,140

Loss for the period after tax

 

 

(4,860)

 

The segment results for the period ended 30 June 2019 are as follows:

 

 

PFS

£'000

 

SISS

£'000

 

Other

£'000

 

Group

£'000

Total gross segment revenue

21,348

16,847

1,638

39,833

Inter-segment revenue

(55)

-

(1,638)

(1,693)

Revenue

21,293

16,847

-

38,140

Operating profit/(loss)

2,284

(769)

-

1,515

Finance costs

(502)

(122)

-

(624)

Profit/(loss) before tax

1,782

(891)

-

891

Taxation

 

 

 

(187)

Profit for the period after tax

 

 

704

 

The segment results for the year ended 31 December 2019 are as follows:

 

 

PFS

£'000

 

SISS

£'000

 

Other

£'000

 

Group

£'000

Total gross segment revenue

46,063

32,088

3,333

81,484

Inter-segment revenue

(110)

-

(3,333)

(3,443)

Revenue

45,953

32,088

-

78,041

Operating profit/(loss)

6,224

(1,984)

1,531

5,771

Finance costs

(915)

(382)

(52)

(1,349)

Profit/(loss) before tax

5,309

(2,366)

1,479

4,442

Taxation

 

 

 

(409)

Profit for the year after tax

 

 

4,013

 

Revenue recognised in the period has been derived from the provision of services provided when the performance obligation has been satisfied.

 

 

 

6. Taxation

Deferred tax assets have been recognised in respect of tax losses and other temporary differences giving rise to deferred tax assets where it is probable that these assets will be recovered.

7. Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, which excludes the shares held in the Employee Share Ownership Plan (ESOP) trust.

 

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. The Company has only one category of potential dilutive ordinary shares: share options. Where a loss for the year has been recognised the share options are considered anti-dilutive and so not included in the calculation of diluted earnings per share.

 

The calculation is performed for the share options to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

 

 

 

Half year to

30 June 2020

£'000

Half year to

30 June 2019

£'000

Year ended 31 December 2019

£'000

(Loss)/profit attributable to the equity holders

(4,860)

704

4,013

 

 

 

30 June 2020

Thousands

30 June 2019

Thousands

 

31 December 2019

Thousands

Weighted average number of ordinary shares in issue

26,211

26,226

26,220

Adjustment for share options

1,809

564

755

Weighted average number of ordinary shares for diluted earnings per share

28,020

26,790

26,975

 

30 June 2020

Pence

30 June 2019

Pence

 

31 December 2019

Pence

Basic earnings per share

(18.54)

2.68

15.30

Diluted earnings per share

(18.54)

2.63

14.87

 

 

8. Dividends

No dividends were declared or paid in the period to 30 June 2020.  An interim dividend in respect of 2019 of 1.25p per share, amounting to a dividend of £326,000 was paid to shareholders on the record on 11 October 2019. The dividend was paid on 1 November 2019.

 

 

 

9. Trade and other receivables

 

Half year to

 30 June 2020

£'000

Half year to 

30 June 2019

£'000

Year ended

31 December 2019

£'000

Trade receivables

3,097

9,937

8,922

Less: provision for impairment of receivables

(861)

(634)

(561)

Other debtors

2,075

1,985

1,512

Prepayments and accrued income

3,386

5,322

5,041

 

7,697

16,610

14,914

 

10. Share capital

 

30 June 2020

30 June 2019

31 December 2019

Ordinary shares of 2p each

Number

£'000

Number

£'000

Number

£'000

Allotted and fully paid:

 

 

 

 

 

 

At beginning and end of period

26,526,729

  531

26,526,729

26,526,729

531

 

The Company has one class of ordinary shares which carry no right to fixed income.

 

Investment in own shares

The Group has established an Employee Share Ownership Plan (ESOP) trust to meet its future contingent obligations under the Group's share option schemes.  The ESOP purchases shares in the market for distribution at a later date in accordance with the terms of the Group's share option schemes. The rights to dividend on the shares held have been waived.

11. Retirement benefit obligations

The Group operates two defined benefit schemes (closed to new members) providing pensions on final pensionable pay. The contributions are determined by qualified actuaries based on triennial valuations using the projected unit method.

 

When a member retires, the pension and any spouse's pension is either secured by an annuity contract or paid from the managed fund. Assets of the schemes are reduced by the purchase price of any annuity purchase and the benefits no longer regarded as liabilities of the scheme.

 

The obligation outstanding of £16,727,000 (30 June 2019: £12,641,000; 31 December 2019: £12,011,000) includes £1,359,000 (30 June 2019: £1,254,000; 31 December 2019: £1,324,000) payable to David Rugg by Christie Group plc. The increase in the pension liability attributable to David Rugg's pension arises entirely from a change in the actuarial assumptions used and the discount rate applied. There have been no changes to the amounts payable to Mr Rugg.

 

The defined benefit obligation as at 30 June 2020 is calculated on a year-to-date basis, using the latest actuarial valuation as at 30 June 2020. There have been no significant market fluctuations and significant one-off events, such as plan amendments, curtailments and settlements that have resulted in an adjustment to the actuarially determined pension cost since the end of the prior financial year. The defined benefit plan assets have been updated to reflect their market value at 30 June 2020. However, significant market fluctuations have caused a change in the discount rate applied to the defined benefit obligation resulting in an increase liability

 

The amounts recognised in the statement of comprehensive income and the movement in the liability recognised in the statement of financial position have been based on the forecast position for the year ended 31 December 2020 after adjusting for the actual contributions to be paid in the period.

 

 

 

In addition, the Group operates a defined contribution scheme for participating employees. Payments to the scheme are charged as an employee benefit as they fall due. The Group has no further payment obligations once the contributions have been paid.

 

The movement in the liability recognised in the statement of financial position is as follows:

 

Half year to

 30 June 2020

£'000

Half year to 

30 June 2019

£'000

Year ended

31 December 2019

£'000

Beginning of the period

12,011

14,119

14,119

Expenses included in the employee benefit expense

211

197

386

Contributions paid

(326)

(717)

(1,579)

Finance costs

110

175

346

Pension paid

(27)

(28)

(54)

Actuarial losses/(gains) recognised

4,748

(1,105)

(1,207)

End of the period

16,727

12,641

12,011

 

The amounts recognised in the income statement and statement of comprehensive income are as follows:

as

Half year to

 30 June 2020

£'000

Half year to 

30 June 2019

£'000

Year ended

31 December 2019

£'000

Current service cost

211

197

386

Total included in employee benefit expenses

211

197

386

Net interest cost

110

175

346

Total included in finance costs

110

175

346

Actuarial losses/(gains)

4,748

(1,105)

(1,207)

Total included in other comprehensive income

4,748

(1,105)

(1,207)

 

The principal actuarial assumptions used were as follows:

 

 

 

Half year to 30 June 2020

%

Half year to 30 June 2019

%

Year ended 31 December 2019

%

Discount rate

1.60

2.30

2.05

Inflation rate

2.80

3.20 - 3.30

2.95

Future salary increases

1.00 - 2.00

1.00 - 2.00

1.00 - 2.00

Future pension increases

2.05 - 3.50

2.20 - 3.50

2.10 - 3.30

 

Assumptions regarding future mortality experience were consistent with those disclosed in the financial statements for the year ended 31 December 2019.

 

12. Trade and other payables

 

Half year to

 30 June 2020

£'000

Half year to 

30 June 2019

£'000

Year ended

31 December 2019

£'000

Trade payables

2,067

1,686

2,487

Other taxes and social security

6,796

3,246

3,398

Accruals and other creditors

3,722

5,742

5,689

 

12,585

10,367

11,574

 

13.  Note to the cash flow statement

 

Cash generated from operations

 

Half year to

 30 June 2020

£'000

 

Restated

Half year to

30 June 2019

£'000

Year ended

31 December 2019

£'000

Continuing operations

 

 

 

(Loss)/profit for the period

(4,860)

704

4,013

Adjustments for:

 

 

 

- Taxation

(1,140)

187

409

- Finance costs

412

115

1,000

- Depreciation

938

885

1,936

- Amortisation of intangible assets

337

230

469

- Profit on sale of property, plant and equipment

-

-

(1,531)

- Foreign currency translation

7

6

12

- Increase/(decrease) in provisions

43

(61)

504

- Movement in share option charge

33

27

59

- Movement in retirement benefits obligation

(142)

(548)

(900)

- Movement in non-current other receivable

1

-

12

Movement in working capital:

 

 

 

- Decrease/(increase) in inventories

11

14

(6)

- Decrease/(increase) in trade and other receivables

7,216

(1,737)

(54)

- Increase/(decrease) in trade and other payables

963

(925)

612

Cash generated from/(used in) operations

3,819

(1,103)

6,535

 

14. Cash and cash equivalents

 

Half year to

 30 June 2020

£'000

Half year to

30 June 2019

£'000

Year ended

31 December 2019

£'000

Cash and cash equivalents

13,415

2,394

9,807

Bank overdrafts

-

(4,304)

(3,182)

 

13,415

(1,910)

6,625

 

The Group is operating within its existing banking facilities.

 

On the 1 June 2020, the Group drew down a £6.0m CLBILS loan. This is repayable over 3 years.

15. Related-party transactions

There is no controlling interest in the Group's shares.

 

During the period rentals of £239,000 (30 June 2019: £233,000; 31 December 2019: £468,000) were payable to Carmelite Property Limited, a company incorporated in England and Wales, and jointly owned by The Christie Group Pension and Assurance Scheme, The Venners Retirement Benefit Fund and The Fitzroy Square Pension Fund, by Christie Group plc in accordance with the terms of a long-term lease agreement.

 

 

16. Contingent liabilities

At 30 June 2020 a subsidiary undertaking remained subject to an ongoing enquiry by HMRC to ensure continued compliance of National Minimum Wage Regulations. This subsidiary has previously been subject to enquiries in 2015 and 2017, both of which concluded with confirmation of compliance having examined a period from 2009 to 2017. The subsidiary's advisor, PwC, have very recently advised them that, following verbal confirmation from HMRC, a closure notice is expected to be issued imminently confirming that no minimum wage underpayments have been identified.

17. Publication of Interim Report

The 2020 Interim Financial Statements are available on the Company's website www.christiegroup.com

 

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