Final Results 2012

RNS Number : 1445A
M&C Saatchi PLC
18 March 2013
 



 

 

 

 

 

M&C SAATCHI PLC

 

 

FINAL RESULTS

 

 

YEAR ENDED

31 DECEMBER 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18 March 2013


M&C Saatchi PLC

Final Results for the year ended 31 December 2012

 

 

18 March 2013

Strong results, with continued revenue momentum and earnings growth



Financial Highlights 2012

Growth versus 2011

Revenue

+11% (2011: £153.1m)

 

Operating Profit

+11% (2011: £15.4m)

 

Profit Before Tax

+10% (2011: £15.6m)

 

EPS

+6% (2011: 14.30p)

 

Dividend

+10% (2011: 4.50p)

 

The highlights are headline results, see note on next page for definition.

 

Operational Highlights

·      Further strong growth in both revenue and earnings, driven by new business wins and new businesses

·      Global Network performed well across all geographies:

°           UK: revenues up 13%, with CRM and mobile performing particularly well, operating profit up 17%

°           Europe: revenues up 11%, operating profit up 14%, in spite of macro-economic challenges

°           Middle East and Africa: revenues up 121%, well positioned to take advantage of growing African market

°           Asia and Australasia: revenues up 8%, operating profit up 46%

°           Americas: revenues up 19% with our New York agency relaunched in Q4

°           Clear had a disappointing year and have restructured (resulting in a good start to the year)

·      We continue to invest and build for the future: three offices added (Abu Dhabi, Singapore and Stockholm) together with a relaunch of New York

·      Strong balance sheet maintained, focus on cash control with net cash of £17.9m

·      Final dividend increased 10% to 3.85p, which takes the full-year dividend up 10% to 4.95p

 

 

 

Commenting on the results, David Kershaw, Chief Executive, said:

 

"M&C Saatchi has made very good progress in 2012.  The Group returned double digit revenue and operating profit growth. This arose from new business success, increasingly international and integrated, the profitable growth of new businesses in the mature markets and the rolling out of proven models across the network. This was whilst continuing to invest in further new offices and businesses.

 

"Looking ahead, we are confident that we will continue to make progress in 2013 and beyond. The strategy continues to deliver. "

 

For further information please call:

M&C Saatchi                                     +44 (0)20-7543-4500

David Kershaw

 

Tulchan Communications                 +44 (0)20-7353-4200

Lucy Legh

Susanna Voyle

 

Numis Securities                               +44 (0)20-7260-1000

Nick Westlake, NOMAD

Charles Farquhar, Corporate Broking

 

 

Notes to Editors

Headline results

The term headline is not a defined term in IFRS. The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill, but excluding software) acquired in business combinations, changes to contingent and deferred consideration taken to the income statement; impairment of investment in associate; and fair value gains and losses on liabilities caused by our put and call option agreements (note 11).

 

 

 

SUMMARY OF RESULTS

 

 

2012 saw another good performance with further revenue momentum and earnings growth. Revenues increased 11% and we maintained a double digit headline operating margin of 10.1% (post central costs), notwithstanding an investment in the year of just under £1.5m in three offices (Abu Dhabi, Singapore and Stockholm) and the relaunch of our New York office. Excluding this investment, the like-for-like margin increased from 10.1% to 10.9%. These impressive results were despite a previously flagged disappointing performance from Clear whose PBT fell from £2m to £0.3m. We have restructured Clear, redefined their offer and taken out significant cost so that they are trading more buoyantly in 2013. The overall Group headline profit before tax advanced 10% to £17.2m. Headline net earnings rose 7% to £9.6m suppressed by an increased corporation tax rate (32.4% in 2012, compared with 31.0% in 2011), a function of non-deductible losses from the new office investments.

 

UK

Revenue in the UK was up 13% from £67.0m to £75.4m, with our CRM and Mobile businesses performing strongly. We also had a strong run of wins across all of our businesses, including Ballantine's, Center Parcs, National Trust, Harveys, Peroni, Intercontinental Hotels, Viking and Virgin Holidays. Importantly, we are seeing an increasing number of integrated wins across communication channels. We continue to roll out proven new channel models across the network. We are now exporting CRM and PR to our overseas offices, alongside Sport & Entertainment and Mobile. We are making further investment in new businesses. In January 2013, we acquired 60% of a UK-based talent management agency Merlin Elite. This will become part of the Group's successful Sport & Entertainment division. We maintain a tight control on costs and margins. This resulted in the headline operating margin increasing to 20.2% (2011: 19.5%, both margins exclude the impact of Group recharges). The UK headline operating profit improved a positive 17% on 2011.

 

Europe

Despite the economic backdrop, positive progress was made in Europe with revenues up 11% and headline operating profit up 14%. Germany, Italy and Switzerland all performed well. Sport & Entertainment, launched in Germany and Switzerland, won some new business from Nestlé. In France, whilst advertising remains slow, we are benefiting from our diversification and were pleased to retain La Banque Postale, a major client. The headline operating margin was up from 14.1% to 14.4%, with some drag from our investment in Stockholm. Spain continued to underperform in a very difficult market but as an associate, our investment there is just 25%.

 

 

Middle East and Africa

We experienced further good growth in Cape Town and Johannesburg. Revenues more than doubled from £3.0m to £6.6m and key wins in the period were Edgars Department Stores and Nedbank's promotional account. Additionally, Sport & Entertainment and Mobile were both launched in Johannesburg in the second half. There was also some infrastructure investment needed in our offices to enhance systems and support for the larger clients we have been winning recently. Elsewhere in the region, we opened an Abu Dhabi office on the back of our Etihad win. With the investment in the new office and the new businesses, the headline operating margin consequently fell from 9.2% to 2.1% but will rebuild as these operations come on tap in profit terms.

 

Asia and Australasia

In Asia and Australasia, revenue increased 8% year-on-year and headline operating profit was up a very favourable 46%. The key driver for this was Australia. We won Commonwealth Bank early in the year and also retained Optus after a lengthy repitch; both are Group top ten accounts. New Zealand was impacted by two of their main clients suspending media spends for most of the year. There was another excellent performance from Malaysia. China underperformed but we have now agreed heads of terms and are already working with a respected partner, which will provide a more sustainable presence. Japan and India were both profitable, albeit relatively small. We reopened our Singapore office in February 2012 and they have achieved good new business momentum. The regional headline operating margin was 6.4%, compared with 2011's 4.7%.

 

Americas

In New York, we completed our executive management team line up in September and relaunched the operation in the fourth quarter. The office is now busy pitching and building relationships with new business intermediaries. Revenues were up 19% to £8.0m and the region overall broke even in profit terms, with our offices in Los Angeles and Sao Paulo and our other New York businesses (Mobile and PR), covering the advertising investment in New York.

 

 

Clear

Clear had a very tough year, with revenues slowing as nine of their top ten clients cut spending by 50% mainly due to budget cuts or restructuring programmes. Clear's headline operating profit reduced from £2m to £0.3m. We have significantly downsized Clear's New York and Asian operations, as well as undertaking some extensive cost cutting across the board, yielding a 31% cost saving. Clear's offering has been simplified and the new business programme boosted. New business wins came through in the fourth quarter including Bacardi, Novartis, Samsung and Pepsico and subsequently we expect the 2013 first quarter profitability to be much improved.

 

Outlook

M&C Saatchi has made very good progress in 2012.  The Group returned double digit revenue and operating profit growth. This arose from new business success, increasingly international and integrated, the profitable growth of new businesses in the mature markets and the rolling out of proven models across the network. This was whilst continuing to invest in further new offices and businesses.

 

Looking ahead, we are confident that we will continue to make progress in 2013 and beyond. The strategy continues to deliver.

 

 

 

 

 

 

M&C SAATCHI PLC

AUDITED CONSOLIDATED INCOME STATEMENT

 

 

Year ended 31 December







2012


2011


Note






£000


£000











Billings







502,738


520,017











Revenue

3






169,486


153,133











Operating costs

3






(153,731)


(139,040)











Operating profit

3






15,755


14,093











Share of results of associates

5






91


115

Impairment of associate







(1,552)


-

Finance income

6






422


2,199

Finance costs

7






(4,835)


(370)











Profit before taxation

3






9,881


16,037











Taxation

8






(5,357)


(4,589)











Profit for the year







4,524


11,448

Profit attributable to:










Equity shareholders of the Group

3






2,463


9,599

Non controlling interests







2,061


1,849


















4,524


11,448











Earnings per share

3









Basic







3.89p


15.39p

Diluted







3.59p


15.07p











Headline results

3









Operating profit







17,068


15,399

Profit before tax







17,182


15,562

Profit after tax attributable to equity shareholders







9,560


8,918

Headline basic earnings per share (pence)







15.10p


14.30p


M&C SAATCHI PLC

AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

Year ended 31 December







2012


2011








£000


£000

 

Profit for the year







4,524


11,448

Other comprehensive income:










Exchange differences on translating foreign operations before tax


(518)


(189)

Tax benefit / (expense)







56


(40)

Other comprehensive income for the year net of tax




(462)


(229)











Total comprehensive income for the year







4,062


11,219

 

Total comprehensive income attributable to:










Equity shareholders' of the Group







2,001


9,370

Non controlling interests







2,061


1,849








4,062


11,219

 


M&C SAATCHI PLC

AUDITED CONSOLIDATED BALANCE SHEET

At 31 December







2012


2011


Note






£000


£000

NON CURRENT ASSETS










Intangible assets







60,540


60,229

Investments in associates







756


2,226

Plant and equipment







7,237


6,941

Deferred tax assets







1,612


1,098

Other non current assets







5,041


4,987








75,186


75,481











CURRENT ASSETS










Trade and other receivables







95,248


89,585

Current tax assets







881


322

Cash and cash equivalents







22,332


18,779








118,461


108,686











CURRENT LIABILITIES










Bank overdraft







(84)


-

Trade and other payables







(106,872)


(103,406)

Current tax liabilities







(3,809)


(2,270)

Other financial liabilities







(131)


(126)

Deferred and contingent consideration







-


(128)

Minority shareholder put option liabilities

11






(2,549)


(1,682)








(113,445)


(107,612)











Net currenT Assets (liabilities)







5,016


1,074











Total assets less current liabilities







80,202


76,555











Non current liabilities










Deferred tax liabilities







(669)


(813)

Other financial liabilities







(4,322)


(3,890)

Minority shareholder put options liabilities

11






(17,933)


(15,410)

Other non current liabilities







(1,092)


(396)








(24,016)


(20,509)











Total Net assets







56,186


56,046













M&C SAATCHI PLC

AUDITED CONSOLIDATED BALANCE SHEET (CONTINUED)

At 31 December







2012


2011








£000


£000

Equity










Equity attributable to shareholders of the Group




















Share capital







641


635

Share premium







14,625


13,832

Merger reserve







20,669


21,194

Treasury reserve







(792)


(792)

Minority interest put option reserve







(13,675)


(14,305)

Non controlling interest acquired







(1,085)


(297)

Foreign exchange reserve







1,846


2,308

Retained earnings







31,373


30,808








53,602


53,383











Non controlling interest







2,584


2,663











TOTAL EQUITY







56,186


56,046

 


M&C SAATCHI PLC

AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


Share
Capital
£000

Share
premium
£000

Merger
reserve
£000

Treasury
reserve
£000

MI put option
reserve
£000

Non controlling
interest
acquired
£000

Foreign
exchange
reserves
£000

Retained
earnings
£000

Subtotal
£000

Non controlling
interest
in equity
£000

Total
£000

At 1 January 2011

625

12,822

21,922

(792)

(10,466)

(130)

2,662

23,053

49,696

1,375

51,071

Acquired non controlling interest

2

262

-

-

158

(166)

-

-

256

-

256

Issues of shares to minorities

-

-

-

-

-

-

-

-

-

166

166

Impairment of M&C Saatchi (Hong Kong) Ltd*

-

-

(728)

-

-

-

-

728

-

-

-

Exchange rate movements

-

-

-

-

-

(1)

-

-

(1)

87

86

Release on company deletion

-

-

-

-

-

-

(125)

125

-

-

-

Issue of minority put options

-

-

-

-

(4,186)

-

-

-

(4,186)

-

(4,186)

Cancellation of minority put options

-

-

-

-

189

-

-

(133)

56

-

56

Option exercise

8

748

-

-

-

-

-

(756)

-

-

-

Reclassification of share to cash based option

-

-

-

-

-

-

-

(372)

(372)

-

(372)

Share option charge

-

-

-

-

-

-

-

1,087

1,087

-

1,087

Dividends

-

-

-

-

-

-

-

(2,523)

(2,523)

(814)

(3,337)

Total transactions with owners

10

1,010

(728)

-

(3,839)

(167)

(125)

(1,844)

(5,683)

(561)

(6,244)

Total comprehensive income for the year

-

-

-

-

-

-

(229)

9,599

9,370

1,849

11,219

At 1 January 2012

635

13,832

21,194

(792)

(14,305)

(297)

2,308

30,808

53,383

2,663

56,046

At 1 January 2012

635

13,832

21,194

(792)

(14,305)

(297)

2,308

30,808

53,383

2,663

56,046

Acquisitions

-

-

-

-

-

-

-

-

-

71

71

Acquired non controlling interest

1

115

-

-

73

(120)

-

-

69

(18)

51

Issues of shares to minorities

-

-

-

-

-

-

-

(11)

(11)

26

15

Impairment of New Zealand*

-

-

(525)

-

-

-

-

525

-

-

-

Subsidiary Share buyback of own equity from a non controlling shareholder

-

-

-

-

-

(668)

-

-

(668)

(632)

(1,300)

Exchange rate movements

-

-

-

-

-

-

-

-

-

(61)

(61)

Issue of minority put options

-

-

-

-

(480)

-

-

-

(480)

-

(480)

Cancellation of minority put options

-

-

-

-

1,037

-

-

329

1,366

-

1,366

Option exercise

5

678

-

-

-

-

-

(686)

(3)

-

(3)

Share option charge

-

-

-

-

-

-

-

855

855

-

855

Dividends

-

-

-

-

-

-

-

(2,910)

(2,910)

(1,526)

(4,436)

Total transactions with owners

6

793

(525)

-

630

(788)

-

(1,898)

(1,782)

(2,140)

(3,922)

Total comprehensive income for the year

-

-

-

-

-

-

(462)

2,463

2,001

2,061

4,062

At 1 December 2012

641

14,625

20,669

(792)

(13,675)

(1,085)

1,846

31,373

53,602

2,584

56,186

 

* Amounts were released from merger reserve to retained earnings as an impairment charge was posted in respect of the investments that create the related merger reserve.


M&C SAATCHI PLC

AUDITED CONSOLIDATED CASH FLOW STATEMENT

 

Year ended 31 December

Note

2012

£000

2011

£000

 

 




 

Revenue


153,133

 

Operating expenses


(153,731)

(139,040)

 

OPERATING PROFIT


15,755

14,093

 

ADJUSTMENTS FOR:
Depreciation of plant and equipment


2,289

1,929

 

Loss on sale of plant and equipment


38

 

Loss on sale of software intangibles


-

 

Amortisation of acquired intangible assets


714

 

Impairment of goodwill


902

 

Amortisation of capitalised software intangible assets


188

 

Non cash share based incentive plans


855

1,087

 

OPERATING CASH FLOW BEFORE MOVEMENTS IN WORKING CAPITAL


20,487

18,951

 

Increase in debtors


(5,717)

(10,250)

 

Increases / (decrease) in creditors


4,194

(9,775)

 

Cash generated / (consumed) from operations


18,964

(1,074)

 

Tax paid


(5,178)

(4,159)

 

Net cash flow from operating activities


13,786

(5,233)

 

Investing activities




 

Acquisitions net of cash acquired

10

(1,773)

 

Proceeds from sale of plant and equipment


9

 

Purchase of plant and equipment


(3,389)

 

Purchase of capitalised software


(173)

 

Dividends from associate


-

 

Interest earned


422

345

 

Net cash consumed by investing activities


(5,564)

(4,981)

 

Net cash generated / (consumed) by Operating and Investing activities


8,222

(10,214)

 

 

 

AUDITED CONSOLIDATED CASH FLOW STATEMENT CONTINUED

 

Year ended 31 December


2012
£000

2011
£000

 

 

Net cash consumed by Operating and investing activities


8,222

(10,214)

 

Financing activities




 

Dividends paid to equity holders of the Company


(2,910)

(2,523)

 

Dividends paid to non controlling interest


(1,526)

(814)

 

Subsidiaries sale of own shares to non controlling interest


30

58

 

Repayment of finance leases


(214)

(62)

 

Inception of bank loans


5,416

2,117

 

Repayment of bank loans


(4,755)

(786)

 

Interest paid


(390)

(297)

 

Net cash Consumed by financing activities


(4,349)

(2,307)

 

Net (decrease) / Increase in cash and cash equivalents


3,873

(12,521)

 

Cash and cash equivalents at the beginning of the year


18,779

31,388

 

Effect of exchange rate changes


(404)

(88)

 

Cash and cash equivalents at the end of the year


22,248

18,779

 

 

 


M&C SAATCHI PLC

NOTES TO THE PRELIMINARY STATEMENTS

YEAR ENDED 31 DECEMBER 2012

 

1.   GENERAL INFORMATION

 

The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 36 Golden Square, London W1F 9EE.

The Company has its primary listing on the AIM market of the London Stock Exchange.

These 2012 audited preliminary financial statements were approved for issue on 15 March 2013.

The financial information set out below does not constitute the company's statutory accounts for 2011 or 2012. Statutory accounts for the years ended 31 December 2011 and 31 December 2012 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for 2011 and 2012 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.

Statutory accounts for the year ended 31 December 2011 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2012 will be delivered to the Registrar in due course.

Headline results

The directors believe that the headline results and headline earnings per share provide additional useful information on the underlying performance of the business. In addition, the headline results are used for internal performance management, the calculation of rewards in the Group's Long Term Incentive Plan (LTIP) schemes and minority shareholder put option liabilities. The term headline is not a defined term in IFRS.

Our segmental reporting reflects our headline results in accordance with IFRS 8.

The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill, but excluding software) acquired in business combinations, changes to contingent and deferred consideration taken to the income statement; impairment of investment in associate; and fair value gains and losses on liabilities caused by our put and call option agreements.

2.   Accounting policies

The financial information set out in these final results has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The accounting policies adopted in these final results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the period ended 31 December 2012. The principal accounting policies adopted are unchanged from those used in the preparation of the statutory accounts for the period ended 31 December 2011.


3.   Earnings per share and reconciliation between headline and statutory results

 

Year ended
31 December 2012


Reported results

£000

Amortisation of acquired intangibles

£000

Impairment of Goodwill

£000

Impairment of associate

£000

Fair value adjustments to minority
put option liabilities

£000

Headline & segmental results

£000

Revenue


169,486

-

-

-

-

169,486

Operating profit


15,755

705

608

-

-

17,068

Share of results of associates


91

-

-

-

-

91

Impairment of associate


(1,552)

-

-

1,552

-

-

Finance income


422

-

-

-

-

422

Finance cost


(4,835)

-

-

-

4,436

(399)

Profit before taxation


9,881

705

608

1,552

4,436

17,182

Taxation


(5,357)

(185)

-

-

-

(5,542)

Profit after taxation


4,524

520

608

1,552

4,436

11,640

Non controlling interests


(2,061)

(19)

-

-

-

(2,080)

Profit attributable to equity holders of the Group

2,463

501

608

1,552

4,436

9,560

Basic earnings per share








Weighted average number of shares (thousands)


63,317

-

-

-

-

63,317

Basic EPS


3.89p

-

-

-

-

15.10p

Diluted earnings per share








Weighted average number of shares (thousands) as above


63,317

-

-

-

-

63,317

Add








- UK growth shares


1,581

-

-

-

-

1,581

- Options


128

-

-

-

-

128

- LTIP


111

-

-

-

-

111

- New LTIP


3,547

-

-

-

-

3,547

Total


68,684





68,684

Diluted earnings per share


3.59p





13.92p

 

 

Year ended
31 December 2011


Reported results

£000

Amortisation of acquired intangibles

£000

Impairment of Goodwill

£000

Contingent liability revaluation

£000

Fair value adjustments to minority
put option liabilities

£000

Headline & segmental results

£000

Revenue


153,133

-

-

-

-

153,133

Operating profit


14,093

714

902

(310)

-

15,399

Share of results of associates


115

-

-

-

-

115

Impairment of associate


-

-

-

-

-

-

Finance income


2,199

-

-

-

(1,781)

418

Finance cost


(370)

-

-

-

-

(370)

Profit before taxation


16,037

714

902

(310)

(1,781)

15,562

Taxation


(4,589)

(206)

-

-

-

(4,795)

Profit after taxation


11,448

508

902

(310)

(1,781)

10,767

Non controlling interests


(1,849)

-

-

-

-

(1,849)

Profit attributable to equity holders of the Group

9,599

508

902

(310)

(1,781)

8,918

Basic earnings per share








Weighted average number of shares (thousands)


62,355

-

-

-

-

62,355

Basic EPS


15.39p

-

-

-

-

14.30p

Diluted earnings per share








Weighted average number of shares (thousands) as above


62,355

-

-

-

-

62,355

Add








- UK growth shares


1,102

-

-

-

-

1,102

- Options


128

-

-

-

-

128

- LTIP


111

-

-

-

-

111

- New LTIP


-

-

-

-

-

-

Total


63,696





63,696

Diluted earnings per share


15.07p





14.00p

 

 


4.   SEGMENTAL INFORMATION

This segmental information is reconciled to the statutory results in Note 3.

 

Year ended
31 December 2012

UK

£000

Europe

£000

Middle East & Africa
£000

Asia and Australasia

£000

Americas

£000

Clear

£000

Total

£000

Revenue

75,401

16,164

6,604

53,798

8,031

9,488

169,486

Operating profit excluding Group costs

15,252

2,331

237

3,443

66

276

21,605

Group costs

4,269

71

 -

110

87

 -

4,537

Operating profit

10,983

2,260

237

3,333

(21)

276

17,068

Share of results of associates

77

(88)

102

 -

 -

 -

91

Financial income & cost

75

(45)

15

14

(38)

2

23

Profit before taxation

11,135

2,127

354

3,347

(59)

278

17,182

Taxation

(2,956)

(743)

(167)

(1,566)

(52)

(58)

(5,542)

Profit for the year

8,179

1,384

187

1,781

(111)

220

11,640

Non controlling interests

(1,231)

(435)

(98)

(565)

255

(6)

(2,080)

Profit attributable to equity shareholders of the Group

6,948

949

89

1,216

144

214

9,560









Headline basic EPS







15.10p









Non cash costs included in operating profit:






Depreciation

(1,118)

(250)

(144)

(527)

(79)

(171)

(2,289)

Amortisation of software

(1)

(30)

(25)

(61)

(24)

 -

(141)

Share option charges

(855)

 -

 -

-

-

 -

(855)

Office location

 

 

 

 

 

 

 

 

 

 

London

 

 

 

 

 

 

 

 

 

 

Paris

Berlin

Madrid

Geneva

Milan
Moscow

Stockholm

 

 

 

 

Beirut

Cape Town

Johannesburg

Abu Dhabi

 

 

 

 

 

 

 

Sydney

Melbourne

Auckland

Wellington

New Delhi

Mumbai

Kuala Lumpur

Hong Kong

Beijing

Shanghai

Tokyo

Singapore

Los Angeles

São Paulo

New York

 

 

 

 

 

 

 

 

London

Hong Kong

New York

Sydney

Singapore

 

 

 

 

 


 

 

 

 

 

Year ended
31 December 2011

UK

£000

Europe

£000

Middle East & Africa
£000

Asia and Australasia

£000

Americas

£000

Clear

£000

Total

£000

Revenue

66,974

14,540

2,987

49,700

6,736

12,196

153,133

Operating profit excluding Group costs

13,031

2,053

276

2,358

77

2,016

19,811

Group costs

4,175

70

-

79

88

-

4,412

Operating profit

8,856

1,983

276

2,279

(11)

2,016

15,399

Share of results of associates

(13)

93

35

-

-

-

115

Financial income & cost

(31)

(46)

1

124

(4)

4

48

Profit before taxation

8,812

2,030

312

2,403

(15)

2,020

15,562

Taxation

(2,768)

(706)

118

(883)

29

(585)

(4,795)

Profit for the year

6,044

1,324

430

1,520

14

1,435

10,767

Non controlling interests

(618)

(443)

(113)

(541)

(4)

(130)

(1,849)

Profit attributable to equity shareholders of the Group

5,426

881

317

979

10

1,305

8,918









Headline basic EPS







14.30p









Non cash costs included in operating profit:






Depreciation

(882)

(215)

(69)

(584)

(57)

(122)

(1,929)

Amortisation of software

(56)

(48)

(8)

(56)

(20)

-

(188)

Share option charges

(1,048)

-

-

(37)

(2)

-

(1,087)

Office location

 

 

 

 

 

 

 

 

 

 

London

 

 

 

 

 

 

 

 

 

 

Paris

Berlin

Madrid

Geneva

Milan
Moscow

 

 

 

 

 

Beirut

Cape Town

Johannesburg

 

 

 

 

 

 

 

 

Sydney

Melbourne

Auckland

Wellington

New Delhi

Mumbai

Kuala Lumpur

Hong Kong

Beijing

Shanghai

Tokyo

Los Angeles

São Paulo

New York

 

 

 

 

 

 

 

 

London

Hong Kong

New York

Amsterdam
Sydney

Singapore

 

 

 

 

 


 

 

 

 

Segmental income statement translated at 2011 exchange rates

It is normal practice in our industry to provide like-for-like results. In the year we had not acquired any significant new businesses therefore the only difference in our like-for-like results is the impact from movements in exchange rates. Had our 2012 results been translated at 2011 exchange rate then our results would have been:

 

Year ended
31 December 2012

UK

£000

Europe

£000

Middle East & Africa
£000

Asia and Australasia

£000

Americas

£000

Clear

£000

Total

£000

Revenue

75,401

17,278

7,290

53,129

8,508

9,426

171,032

Operating profit excluding Group costs

15,252

2,506

296

3,427

65

275

21,821

Group costs

4,269

76

-

110

100

-

4,555

Operating profit

10,983

2,430

296

3,317

(35)

275

17,266

Share of results of associates

77

(96)

100

-

-

-

81

Financial income & cost

75

(45)

16

10

(44)

2

14

Profit before taxation

11,135

2,289

412

3,327

(79)

277

17,361

Taxation

(2,956)

(800)

(185)

(1,546)

(49)

(60)

(5,596)

Profit for the year

8,179

1,489

227

1,781

(128)

217

11,765

Increase/(decrease) in 2012 results caused by translation differences

-

(105)

(40)

-

17

3

(125)

 

 

 

5.   Share of associates

Year ended 31 December






2012


2011







£000


£000


Share of associates' profit before taxation






120


133

Share of associates' taxation






(29)


(18)







91


115





 

 

6.   Finance Income

Year ended 31 December






2012


2011







£000


£000











Bank interest receivable






398


401

Other interest receivable






24


17

Total interest receivable






422


418










Fair value adjustments to minority shareholder put option liabilities






-


1,781

Total finance income






422


2,199

 

 

 

 

7.   Finance costs

 

Year ended 31 December






2012


2011







£000


£000

Finance costs










Bank interest payable






(390)


(369)

Other interest payable






(9)


(1)

Total interest payable






(399)


(370)










Fair value adjustments to minority shareholder put option liabilities






(4,436)


-

Total finance costs






(4,835)


(370)

 

 

 

 

8.   Taxation

Year ended 31 December






2012


2011







£000


£000


Current taxation









Taxation in the year









- UK






3,123


2,858

- Overseas






2,916


2,308

Utilisation of previously unrecognised tax losses






(147)


 

(141)

Adjustment for over / (under) provisions in prior periods




354


(10)







6,246


5,015










Deferred taxation









Origination and reversal of temporary differences






(877)


 

(571)

Recognition of previously unrecognised tax losses






(11)


 

145

Effect of changes in tax rates






(1)


-







(889)


(426)

Total taxation






5,357


4,589


 

 

9.   Dividends

 

Year ended 31 December






2012


2011







£000


£000











2011 final dividend 3.50p (2010: 3.03p)






2,213


1,895

2012 interim dividend 1.10p (2011: 1.00p)






697


628
















2,910


2,523

 

Proposed final dividend of 3.85p totalling £2,577k. Subject to shareholders approval on 12 June 2013,

the dividend is payable on 5 July 2013 to shareholders on the register 7 June 2013.

 

The dividend relates to the following years:

 

Year ended 31 December






2012


2011







£000


£000











First interim dividend






697


628

Final dividends






2,577


2,313










Total dividend that relates to the year






3,274


2,841










The headline dividend cover is:


















Headline profit after tax attributable to equity shareholders






9,560


8,918

Total dividend that relates to the year






3,274


2,841

Headline dividend cover






2.9


3.1










 

Headline dividend cover is calculated by taking headline profit after tax attributable to equity shareholders and dividing it by the total dividends that relate to that year's profits. The Group seeks to maintain a long term headline dividend cover of between 3 and 4.


 

 

10. Cash consumed by acquisitions

 

2012

£000

2011

£000

Cash consideration



- M&C Saatchi Mobile Ltd

(1,300)

-

- M&C Saatchi GAD SAS (Part of 4% put)

(45)

-

- Clear USA LLC (20%)

(64)

-

- Bang Pty Ltd (85%)

(1,666)

-

- Direct One SAS (final payments for 70%)

(126)

(283)

- Brazilian Client list

-

(912)

- M&C Saatchi Communications Pvt Ltd (2012: 5%, 2011: 20%)

(5)

(17)

- M&C Saatchi Export Ltd (2011: Part of 2.8% put)

-

(27)


(3,206)

(1,239)

Less cash and cash equivalents acquired

7

-


(3,199)

(1,239)

Purchase of associates

-

(534)


(3,199)

(1,773)

 

 

 

 

11. Minority shareholder put option liabilities

 

Some of our subsidiaries' minorities have the right to a put option. The put options give the minorities a right 
to exchange their minority holdings in the subsidiary into shares in M&C Saatchi plc or cash (as per the agreement).

Year ended 31 December







2012


2011








£000


£000











Amounts falling within one year










- Cash







(847)


(234)

- Equity







(1,702)


(1,448)








(2,549)


(1,682)

Amounts falling after one year










- Cash







(2,450)


-

- Equity







(15,483)


(15,410)








(17,933)


(17,092)


















(20,482)


(17,092)

 

 

Year ended 31 December







2012


2011








£000


£000











At 1 January







(17,092)


(15,035)

Exchange difference







(1)


-

Additions







(480)


(4,133)

Exercises







161


295

Termination







1,366


-

Income statement charge due to










- Change in estimates







2,627


517

- Change in share price







(6,932)


1,979

- Time







(131)


(715)

Total income statement charge







(4,436)


1,781

At 31 December







(20,482)


(17,092)













 

 

The movements in the year relating to the minority interest put options that are payable in cash and in equity are as follows:







2012


2011

Cash Based







£000


£000











At 1 January







(234)


(216)

Reclassified from share based







(2,863)


-

Income statement charge due to










- Change in estimates







(71)


(44)

- Change in share price







(129)


26

At 31 December







(3,297)


(234)

 

 





2012


2012


2011

Equity Based





Equity*


£000


£000











At 1 January





(14,471)


(16,858)


(14,819)

Exchange difference





-


(1)


-

Additions





(266)


(480)


(4,134)

Exercises





107


161


295

Reclassified to cash based





2,458


2,863



Terminations





1,173


1,366



Income statement charge due to










- Change in estimates





1,495


2,698


561

- Change in share price





59


(6,803)


1,953

- Time





(72)


(131)


(715)

At 31 December





(9,517)


(17,185)


(16,858)

* The estimated number of M&C Saatchi plc shares that will be issued, in thousands, to fulfil.

 

 

 

 

Put options are exercisable from:

Subsidiary

Year

% of Subsidiaries shares

exchangeable

M&C Saatchi LA Inc

2013

16.0

M&C Saatchi Marketing Arts Ltd

2013

50.0

M&C Saatchi (M) SDN BHD

2013

20.0

M&C Saatchi Sports and Entertainment Ltd

2013

2.8

Influence Communications Ltd

2013

5.0

M&C Saatchi Europe Holdings Ltd

2013

4.0

M&C Saatchi German Holdings Ltd

2013

4.0

M&C Saatchi Communications Pty Ltd

2013

13.0

M&C Saatchi Berlin GmbH

2013

10.0

Talk PR Audience Ltd

2013

17.0

M&C Saatchi GAD SAS**

2013

39.0

FCINQ SAS

2013

18.0

M&C Saatchi PR LLP (US)

2014

35.0

M&C Saatchi Berlin GmbH

2014

5.0

Clear Ideas Consulting LLP

2014

12.5

Clear Ideas Consulting LLP

2015

12.5

M&C Saatchi Agency Pty Ltd

2015

20.0

M&C Saatchi Sport & Entertainment Pty Ltd

2015

49.0

Talk PR Ltd

2015

49.0

M&C Saatchi UK PR LLP

2015

35.0

M&C Saatchi Corporate SAS*

2015

29.8

M&C Saatchi (Switzerland) SA

2016

40.0

M&C Saatchi Mobile Ltd**

2016

25.0

The Source (London) Ltd

2016

30.0

Direct One SAS*

2016

10.0

Direct One SAS*

2017

10.0

M&C Saatchi Berlin GmbH*

2017

5.0

M&C Saatchi Brazil Cominicação LTDA

2017

49.9

Direct One SAS*

2018

10.0

*New or amended options in 2012.

** Holding changed or shares put in 2012.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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