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Christie Group PLC (CTG)

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Monday 17 September, 2018

Christie Group PLC

Half-year Report

RNS Number : 8802A
Christie Group PLC
17 September 2018
 

17 September 2018


Christie Group plc

Interim Results for the six months ended 30 June 2018


 

Christie Group plc ('Christie' or the 'Group'), the leading provider of Professional Business Services and Stock & Inventory Systems & Services to the leisure, retail and care markets, is pleased to announce its Interim Results for the six months ended 30 June 2018.

 

Key points:

 

·      First half revenues up 10.0% to £38.4m (H1 2017: £34.9m)

 

·      First half operating profit of £2.0m (H1 2017: £1.1m)

 

·      Basic earnings per share of 5.18p (H1 2017: 1.53p per share)

 

·      Interim dividend increased to 1.25p per share (2017: 1.0p per share)

 

·      PBS revenues up 11.9% to £21.6m (H1 2017: £19.3m)

 

·      Enhanced performance from international operations

 

·      An increased pipeline of current and ongoing projects

 

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

"The first half saw progress in performance and our services remain in demand from sophisticated commercial audiences."


 

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

Stockdale Securities

Andy Crossley/Antonio Bossi

Nominated Adviser and Broker

 

020 7601 6100

 

 

 


Notes to Editors:

Christie Group plc, quoted on AIM, is a leading professional business services group with 44 offices across the UK, Europe and Canada, catering to its specialist markets in the leisure, retail and care sectors.

 

Christie Group operates in two complementary business divisions: Professional Business Services (PBS) and Stock & Inventory Systems & Services (SISS). These divisions trade under the brand names: PBS - 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 essential 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 Company to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014.

 

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






 

Chairman and Chief Executive's review

 

I am pleased to report an operating profit for our first half of £2.0m (H1 2017: £1.1m) from increased revenue of £38.4m (H1 2017: £34.9m).  As anticipated, this profit is significantly ahead of our performance for the same period in the previous year.  As I indicated at our AGM in June, this improvement was primarily attributable to an enhanced performance from our international operations.

 

As promised we have prepared a new Group strategy which can be viewed on our new Group website.  The next step is to align our trading companies' business plans within this overarching strategy.  This is now in process.  Our intention is that our aims and objectives become clearer to our staff, clients and investors. Constructive feedback will be welcome.

 

We have chosen to adopt the updated QCA Code for Corporate Governance and the extent of its application will be published on our website by 28th September.

 

I should like to thank Panmure Gordon & Co. for their service as Nomad and Broker to your Group. We welcome Stockdale Securities as Nomad and Broker and look forward to working with them to achieve wide interest in our Group.

 

During the period we completed the significant project of readying for the introduction of GDPR in late May. While the costs - which we estimate at £0.3m - were not insignificant, we believe the benefits of having cleansed and reorganised our records will be tangible in terms of increased operational efficiency.

 

We recognise an increasing demand for a more flexible approach to employee benefits to both recruit and retain the best people. Our recent investment in an integrated payroll & HR system will help us to facilitate this.

 

As reported in our 2017 Annual Report & Accounts, we indirectly own the freehold interest in Pinder House. A recently initiated rent review of the property as at May 2018, commissioned for internal purposes, indicates an additional £1.1m of shareholder equity that could be recognised, were we to formally revalue the property.

 

We recently completed the acquisition of the outstanding minority equity interest in Orridge Inventory Services GmbH.  This means that each of our trading subsidiaries are now 100% owned by our Group.

 

Professional Business Services


 

Across the past decade in Christie & Co, the value of the businesses we sell has increased significantly, resulting in the doubling of our average transaction fee.  As a consequence, the majority of the sales we broker are to existing operators and established investors.  For this reason, whilst not immune, we are less impacted from the weaker residential markets seen in the first half.

 

Geographically, our UK agency and advisory work is well spread, evidenced by us recording assignments in over 86% of the postal areas of the UK over the last twelve months.  Internationally we strive to operate as one team for each trade sector we serve.  Assignments are successfully completed both territorially - where we are physically located - and on a wider basis.  Our digital online presence, www.christie.com, is key to this capability.  This hosts 2,000 businesses for sale and 50,000 registered buyers. 

 

Our trusted advisor status provides the benefit of client continuity as we routinely assist with bigger and more complex assignments.

 

We continue to recruit to bring in further specialists as our markets and sectors evolve.

 

We announced the launch of the sale of 146 Wyevale Garden Centres in May.  We have already exchanged contracts or completed on 18 centres, including nine centres to Blue Diamond off an aggregate asking price of £36.6m.  The process has generated an exceptional level of interest and we have received offers to purchase the majority of sites either individually, or in sub-groups, along with offers to acquire the portfolio as a whole.

Our investment specialists have also been busy. For example, we have forward funded a new 73 bed Malmaison Hotel in Edinburgh on behalf of Associated British Foods.

 

Our team of RICS valuers specialising in the hotel market, provided (for reporting purposes) a valuation of GLH's hotel portfolio including The Tower Hotel at Tower Bridge and The Cumberland at Marble Arch. They also provided the Bank of Scotland valuation of part of the RF hotels portfolio, including Brown's Hotel Mayfair, the Balmoral Edinburgh, Hotel de Russie Rome, Hotel Amigo Brussels, The Charles Hotel Munich and Hotel Savoy Florence, all premier destinations in their respective cities.

 

The skills, knowledge and experience of our Childcare & Education team are increasingly being called upon by international operators and investors. Fuelled by demand, we have held a series of global seminars and meetings across Asia and the Far East. Thus far this year, across the day nursery, education and specialist childcare sectors, our team have been appointed on 118 new mandated sale projects, with the majority of portfolios being conducted via confidential processes.

 

In Leisure, the bounce has gone out of the trampoline market due to the haste of expansion and widely differing quality of facilities.  Expect closures.

 

For the Care sector we have launched four separate corporate disposal programmes which will monetize predominantly in 2019.

 

In the Pub sector we continue to act on behalf of Greene King, Wellington Pub Company, Marston's and British Country Inns, selling numerous pubs across the UK.

 

In Dentistry we brokered the acquisition of Dentapol for (August Equity backed) Dental Partners and the sale of Oradi Dental, a substantial multi-site dental business and an example of the continued consolidation in the dental sector.

 

Pharmacy operators are hoping for some respite to cashflow squeeze as the category M clawback comes to an end in July.

 

Our Restaurant consultancy division is developing rapidly, providing strategic advice and valuable opportunities in what is, for some, a troubled sector.

 

Our market intelligence reports continue to receive great acclaim, covering issues of relevance to investors in the Dentistry, Hotel and Care markets.  Launch events include key industry figures helping us to create 'Christie communities' within the sectors.

 

At Christie Insurance, we have completed a transition of our insurance provider.  We expect this move will result in a growth in our revenue through a combination of improved commercial terms, higher levels of business from existing clients and an increased gain of new business which will follow from a more proactive approach to new insurance sales.  As an example of our integrated services, Christie Insurance worked with Christie & Co in providing a pragmatic appraisal on the current and future insurance placement of an iconic golf club and leisure centre for the funder.

 

Christie Finance continued a focus on funding its specialisms in our niche sectors such as Medical (Dental and Pharmacy) and children's day nurseries.  Our lending market remained positive as new entrants continued to provide alternatives to traditional high street banks.  We procured an increasing level of unsecured finance for both corporate and private clients while also enjoy an increasing proportion of repeat business.  Our finance pipeline increased 32% over the period.

 

Finally, within the PBS division, our appraisal business Pinders saw an increase in volume of 17% in the first half compared to the same period a year earlier.  Instructions come directly from a range of lenders including Lloyds, Barclays, HSBC, Clydesdale and Metro bank and more recently from AIB and Atom Bank, the result of newer panel appointments.  The 'White Coat' sector was a star performer with instructions up 71% on H1 of the prior year.


Stock & Inventory Systems & Services

 

Our stocktaking businesses serve the Retail, Hospitality, Leisure, Pharmacy and Supply Chain markets.  Of these five markets, the UK retail market has continued to be a difficult market place. This year administrations and C.V.A.'s have been widespread. 

 

In July, we instigated a plan to return our UK retail stocktaking operation within Orridge to profit.  We have brought in impartial external expertise to achieve this. Our focus is on returning our UK retail stocktaking operation - itself part of a pan-European retail stocktaking business generating revenues of approximately £20m - to operating profit. Key to this is restoring job profitability to levels previously achieved, where gross profit margins in excess of 30% have previously proved achievable.

 

To improve counter retention, key for maximising operational efficiency, we opted to pay our UK staff under age 25 at the upper rate of national minimum wage.

 

Encouragingly at our current prices we continue to win retail clients such as Primark, Hugo Boss, Polo and Birkenstock.

 

In Venners, we recruited and trained higher levels of starters than in previous years enabling us to capture peak summer revenue with a record income level for each month in H1.

 

Our consultancy division is at record level as clients increasingly look to Venners to fix the issues it identifies.  Given the size of the hospitality, leisure and catering industries, we foresee a strong demand.

 

Following the sale of Principle Hotels to IHG (Intercontinental Hotel Group) we have been retained to continue to supply stocktaking services.  With local and regional business wins at an all-time high, new clients include Top Golf, TLC Inns, Elite pubs and John Fowler Holidays (a returning client).

 

For Vennersys, having successfully migrated established system users such as Blenheim, Burghley and Aspro to its new Venpos Cloud Enterprise system, those customers, through dialogue with us, have each identified areas in their businesses which our system can be further extended to serve.  We will work with each client through our consultancy and development teams to increase our clients' revenues and thereby our own.

 

Our product is, by design, ideal for Family Entertainment Centres ("FECs") where we have won business including Adventure Land in Lincolnshire and the Edinburgh-based family experience attraction, Dynamic Earth.  Product enhancements have included group and party bookings, consumer gate capacity control, additional pay and gateway options and remote scanning and redemption.  Our new customers coming on stream start to impact our revenues in their first full year of operation which, because of the seasonal nature of many FECs, is from the next season onwards.


 

Summary

 

In conclusion, the first half saw progress in performance while our services remain in demand from sophisticated commercial audiences.  Looking at the second half we anticipate a more balanced year than 2017. With an increased pipeline of both current and ongoing projects we intend to deliver a solid set of results for the year.

 

I take this opportunity to congratulate our management and staff who rise to the challenges and opportunities presented by change.  We have good people.

 

The Board has declared an interim dividend of 1.25p (2017: 1.0p per share) which will be paid on 19 October 2018 to shareholders on the register on 28 September 2018.

 

 

David Rugg

Chairman and Chief Executive




Note

Half year to 30 June

2018

£'000

(Unaudited)

Restated (*)

Half year to 30 June

2017

£'000

(Unaudited)

Year ended 31 December 2017

£'000

(Audited)

 


Revenue

4

38,404

34,925

71,635

 


Employee benefit expenses


(26,224)

(23,733)

(48,978)

 




12,180

11,192

22,657

 


Depreciation and amortisation


(509)

(435)

(902)

 


Impairment charge


-

-

61

 


Other operating expenses


(9,661)

(9,666)

(18,048)

 


Operating profit


2,010

1,091

3,768

 


Finance costs


(64)

(93)

(162)

 


Finance income


2

2

3

 


Pension scheme finance costs


(158)

(235)

(463)

 


Total finance charge


(220)

(326)

(622)

 


Profit before tax


1,790

765

3,146

 


Taxation

5

(442)

(396)

(699)

 


Profit for the period after tax


1,348

369

2,447

 


 

 

Consolidated interim income statement

Profit for the period after tax attributable to:

Equity shareholders of the parent


1,366

404

2,496

Non-controlling interest


(18)

(35)

(49)



1,348

369

2,447

 

Earnings per share attributable to equity holders - pence

- Basic

6

5.18

1.53

9.47

- Fully diluted

6

5.12

1.51

9.43

 

All amounts derive from continuing operations.

 

(*) Refer to note 13 for full details of the restatement of June 2017 figures.



 

Consolidated interim statement of comprehensive income



 

 

 

 

 

 

Half year to 30 June

2018

£'000

(Unaudited)

Restated (*)

Half year to 30 June

2017

£'000

(Unaudited)

Year ended 31 December 2017

£'000

(Audited)


Profit for the period after tax


1,348

369

2,447








Other comprehensive income:






Items that may be reclassified subsequently to profit or loss:






Other comprehensive income/(losses) for the period


1,515

(312)

2,688


Total comprehensive income for the period


2,863

57

5,135

 

Total comprehensive income attributable to:

Equity shareholders of the parent


2,881

92

5,184

Non-controlling interest


(18)

(35)

(49)



2,863

57

5,135

 

(*) Refer to note 13 for full details of the restatement of June 2017 figures.

 



Consolidated interim statement of changes in shareholders' equity

 

Share capital

£'000

Fair value and other reserves £'000

Cumulative

translation

adjustments

£'000

Retained earnings

£'000

Non - controlling interest

£'000

Total equity

£'000

Half year to 30 June 2017 (unaudited)

Balance at 1 January 2017

531

5,465

656

(15,543)

(329)

(9,220)

Profit/(loss) for the period after tax

-

-

-

404

(35)

369

Items that will not be reclassified subsequently to profit or loss

 

-

-

-

(314)

-

(314)

Items that may be reclassified subsequently to profit or loss

 

-

-

2

-

-

2

Total comprehensive income/(losses) for the period

-

-

2

90

(35)

57

Movement in respect of employee share scheme

-

33

-

-

-

33

Employee share option scheme:







- value of services provided

-

100

-

-

-

100

Dividends paid

-

-

-

(398)

-

(398)

Balance at 30 June 2017 (*)

531

5,598

658

(15,851)

(364)

(9,428)








Year ended 31 December 2017 (audited)

Balance at 1 January 2017

531

5,465

656

(15,543)

(329)

(9,220)

Profit/(loss) for the year after tax

-

-

-

2,496

(49)

2,447

Items that will not be reclassified subsequently to profit or loss

-

-

-

2,685

-

2,685

Items that may be reclassified subsequently to profit or loss

-

-

3

-

-

3

Total comprehensive income/(losses) for the year

-

-

3

5,181

(49)

5,135

Movement in respect of employee share scheme

 

-

(82)

-

-

 

-

(82)

Employee share option scheme:







-value of services provided

-

229

-

-

-

229

Dividends paid

-

-

-

(657)

-

(657)

Balance at 31 December 2017

531

5,612

659

(11,019)

(378)

(4,595)








Half year to 30 June 2018 (unaudited)







 

Balance at 1 January 2018

531

5,612

659

(11,019)

(378)

(4,595)

 

Profit/(loss) for the period after tax

-

-

-

1,366

(18)

1,348

 

Items that will not be reclassified subsequently to profit or loss

 

-

-

-

1,494

-

1,494

 

Items that may be reclassified subsequently to profit or loss

 

-

-

21

-

-

21

 

Total comprehensive income/(losses) for the period

-

-

21

2,860

(18)

2,863

 

Movement in respect of employee share scheme

-

32

-

-

-

32

 

Employee share option scheme:







 

- value of services provided

-

(127)

-

-

-

(127)

 

Acquisition of non-controlling interest




(396)

396

-

 

Dividends payable

-

-

-

(462)

-

(462)

 

Balance at 30 June 2018

531

5,517

680

(9,017)

-

(2,289)

 

(*) Refer to note 13 for full details of the restatement of June 2017 figures.

Consolidated interim statement of financial position


 

 

 

Note

 

At 30 June 2018

£'000

(Unaudited)

Restated (*)

At 30 June 2017

£'000

(Unaudited)

At 31 December 2017

£'000

(Audited)

Assets





Non-current assets





Intangible assets - Goodwill


1,843

1,837

1,841

Intangible assets - Other


1,370

1,353

1,368

Property, plant and equipment


3,687

3,607

3,565

Deferred tax assets


2,681

3,781

3,142

Available-for-sale financial assets


635

635

635

Other receivables


182

182

182



10,398

11,395

10,733

Current assets





Inventories


30

16

25

Trade and other receivables


17,090

14,956

14,873

Current tax assets


1

178

4

Cash and cash equivalents

11

3,977

3,385

4,692



21,098

18,535

19,594

Total assets


31,496

29,930

30,327

Equity





Capital and reserves attributable to the Company's equity holders



Share capital

8

531

531

531

Fair value and other reserves


5,517

5,598

5,612

Cumulative translation reserve


680

658

659

Retained earnings


(9,017)

(15,851)

(11,019)



(2,289)

(9,064)

(4,217)

Non-controlling interest


-

(364)

(378)

Total equity


(2,289)

(9,428)

(4,595)

Liabilities





Non-current liabilities





Trade and other payables


134

-

436

Retirement benefit obligations

9

12,000

18,167

14,241

Borrowings


692

743

734

Provisions


161

218

188



12,987

19,128

15,599

Current liabilities





Trade and other payables


13,318

11,275

11,703

Current tax liabilities


275

346

230

Borrowings


6,365

7,780

6,526

Provisions


840

829

864



20,798

20,230

19,323

Total liabilities


33,785

39,358

34,922

Total equity and liabilities


31,496

29,930

30,327

 

(*) Refer to note 13 for full details of the restatement of June 2017 figures.


 



 

Consolidated interim statement of cash flows


 

 

 

 

 

Note

 

Half year to 30 June 2018

£'000

(Unaudited)

Restated (*)

Half year to 30 June 2017

£'000

(Unaudited)

 

Year ended

31 December 2017

£'000

(Audited)

Cash flow from operating activities





Cash generated from operations

10

782

1,248

5,171

Interest paid


(64)

(93)

(162)

Tax paid


(267)

(30)

(160)

Net cash generated from operating activities


451

1,125

4,849

Cash flow from investing activities





Purchase of property, plant and equipment (PPE)


(437)

(295)

(575)

Proceeds from sale of PPE


10

-

3

Interest received


2

2

3

Intangible assets expenditure


(196)

(268)

(460)

Net cash used in investing activities


(621)

(561)

(1,029)

Cash flow from financing activities





Repayment of bank borrowings


(41)

(9)

(17)

Proceeds from invoice discounting


(1)

779

(12)

Payment of finance lease liabilities


(1)

(1)

(6)

Net payments to ESOP


(321)

-

-

Dividends paid


-

-

(657)

Net cash (used in)/generated from financing activities


(364)

769

(692)

Net (decrease)/increase in cash and cash equivalents


(534)

1,333

3,128

Cash and cash equivalents at beginning of period


176

(2,933)

(2,932)

Exchange (losses)/gain on Euro bank accounts


(21)

9

(20)

Cash and cash equivalents at end of period

11

(379)

(1,591)

176

 

(*) Refer to note 13 for full details of the restatement of June 2017 figures.

 

 


Notes to the consolidated interim financial statements

1. General information

Christie Group plc is the parent undertaking of a group of companies covering a range of related activities. These fall into two divisions - Professional Business Services and Stock & Inventory Systems & Services. Professional Business Services principally covers business valuation, consultancy and agency, mortgage and insurance services, and business appraisal. Stock & Inventory Systems & Services covers stock audit and counting, compliance and food safety audits and inventory preparation and valuation, hospitality and cinema software.

 

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 2018. 

 

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2017, except for those noted below and except for the adoption of new standards and interpretations effective as of 1 January 2018. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

 

A number of amendments apply for the first time in 2018, specifically IFRS9: 'Financial Instruments' and IFRS15: 'Revenue from Customers with Contracts'. However, they do not materially impact the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group.

 

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 2017 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 2017 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 2018 and 30 June 2017 is unaudited. 

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 consistent with those applied to the consolidated financial statements for the year ended 31 December 2017.



 

4. Segment information

The Group is organised into two main business segments: Professional Business Services and Stock & Inventory Systems & Services.

 

The reportable segment results for continuing operations for the period ended 30 June 2018 are as follows:


 

Professional Business Services

£'000

 

Stock & Inventory Systems & Services

£'000

 

 

Other

£'000

 

 

Group

£'000

Total gross segment revenue

21,640

16,819

1,810

40,269

Inter-segment revenue

(55)

-

(1,810)

(1,865)

Revenue

21,585

16,819

-

38,404

Operating profit/(loss)

2,452

(581)

139

2,010

Net finance charge




(220)

Profit before tax




1,790

Taxation




(442)

Profit for the period after tax



1,348

 

The reportable segment results for continuing operations for the period ended 30 June 2017 are as follows:


 

Professional Business Services

£'000

 

Stock & Inventory Systems & Services

£'000

 

 

Other

£'000

 

Restated (*)

Group

£'000

Total gross segment revenue

19,351

15,628

1,451

36,430

Inter-segment revenue

(54)

-

(1,451)

(1,505)

Revenue

19,297

15,628

-

34,925

Operating profit/(loss)

1,408

(558)

241

1,091

Net finance charge




(326)

Profit before tax




765

Taxation




(396)

Profit for the period after tax



369

 

(*) Refer to note 13 for full details of the restatement of June 2017 figures.

 

The reportable segment results for continuing operations for the year ended 31 December 2017 are as follows:


 

Professional Business Services

£'000

 

Stock & Inventory Systems & Services

£'000

 

 

Other

£'000

 

Restated (*)

Group

£'000

Total gross segment revenue

40,726

31,018

2,992

74,736

Inter-segment revenue

(109)

-

(2,992)

(3,101)

Revenue

40,617

31,018

-

71,635

Operating profit/(loss)

5,298

(1,085)

(445)

3,768

Net finance charge




(622)

Profit before tax




3,146

Taxation




(699)

Profit for the year after tax



2,447

 

The Group is not reliant on any key customers.



 


5. 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.

 

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the standard rate of corporation tax in the UK of 19% based on the Group's profit before tax and pension scheme finance costs, due to £nil arising from the reduction in the value of the brought forward deferred tax asset and £54,000 arising from other movements in the deferred tax asset.

6. 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 2018

£'000

Restated (*)

Half year to

30 June 2017

£'000

Year ended 31 December 2017

£'000

Profit from total operations attributable to equity holders of the Company

1,366

404

2,496

 

 

 

30 June 2018

Thousands

30 June 2017

Thousands

 

31 December 2017

Thousands

Weighted average number of ordinary shares in issue

26,351

26,351

26,346

Adjustment for share options

306

344

100

Weighted average number of ordinary shares for diluted earnings per share

26,657

26,695

26,446

 

30 June 2018

pence

30 June 2017

pence

 

31 December 2017

pence

Basic earnings per share

5.18

1.53

9.47

Fully diluted earnings per share

5.12

1.51

9.43

 

(*) Refer to note 13 for full details of the restatement of June 2017 figures.


7. Dividends

 

A final dividend in respect of the year ended 31 December 2017 of 1.75p per share, amounting to a total dividend of £462,000, was approved and paid to the Christie Group plc registrar on 30 June 2018.  The funds were transferred to shareholders on 6 July 2018.

 

An interim dividend in respect of 2018 of 1.25p per share, amounting to a dividend of £332,000, was declared by the directors at their meeting on 11 September 2018. These financial statements do not reflect this dividend payable.

The dividend of 1.25p per share will be payable to shareholders on the record on 28 September 2018. The dividend will be paid on 19 October 2018.

 

8. Share capital

 

30 June 2018

30 June 2017

31 December 2017

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

531

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.

 

At 30 June 2018 the total payments by the Group to the ESOP to finance the purchase of ordinary shares were £3,035,000 (30 June 2017: £2,639,000; 31 December 2017: £2,714,000). This figure is inclusive of shares purchased and subsequently issued to satisfy employee share awards. The market value at 30 June 2018 of the ordinary shares held in the ESOP was £350,000 (30 June 2017: £129,000; 31 December 2017: £235,000). The investment in own shares represents 219,000 shares (30 June 2017: 139,000; 31 December 2017: 178,000) with a nominal value of 2p each.

9. Retirement benefit obligations

The obligation outstanding of £12,000,000 (30 June 2017: £18,167,000; 31 December 2017: £14,241,000) includes £956,000 (30 June 2017: £965,000; 31 December 2017: £981,000) payable to David Rugg by Christie Group plc.

 

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 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 2018 after adjusting for the actual contributions to be paid in the period.


 



 

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

 

Half year to

 30 June 2018

£'000

Year ended

31 December 2017

£'000

Beginning of the period

14,241

18,106

18,106

Expenses included in the employee benefit expense

207

219

438

Contributions paid

(780)

(746)

(1,482)

Finance costs

158

235

463

Pension paid

(26)

(25)

(51)

Actuarial (gains)/losses recognised

(1,800)

378

(3,233)

End of the period

12,000

18,167

14,241

 

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

 

Half year to

 30 June 2018

£'000

Half year to 

30 June 2017

£'000

Year ended

31 December 2017

£'000

Current service cost

207

219

438

Total included in employee benefit expenses

207

219

438

Net interest cost

158

235

463

Total included in finance costs

158

235

463

Actuarial (gains)/losses

(1,800)

378

(3,233)

Total included in other comprehensive income

(1,800)

378

(3,233)

 

The principal actuarial assumptions used were as follows:


 

 

Half year to 30 June 2018

%

 Half year to 30 June 2017

%

 Year ended 31 December 2017

%

Inflation rate

3.00 - 3.10

3.30

3.10 - 3.30

Discount rate

2.00 - 2.70

2.80

2.50

Future salary increases

1.00 - 2.00

1.00 - 2.00

1.00 - 2.00

Future pension increases

2.00 - 3.40

2.30 - 3.50

2.10 - 3.50

 


Assumptions regarding future mortality experience were consistent with those disclosed in the financial statements for the year ended 31 December 2017.


10.  Note to the cash flow statement

 

Cash generated from operations


Half year to

 30 June 2018

£'000

Restated (*)

Half year to

30 June 2017

£'000

Year ended

31 December 2017

£'000

Continuing operations




Profit for the period

1,348

369

2,447

Adjustments for:




- Taxation

442

396

699

- Finance costs

62

91

159

- Depreciation

315

278

569

- Amortisation of intangible assets

194

157

333

- Profit on sale of property, plant and equipment

-

-

(3)

- Foreign currency translation

21

(26)

16

- (Decrease)/increase in provisions

(51)

19

24

- Movement in share option charge

(127)

117

229

- Retirement benefits

(441)

(317)

(632)

- Movement in reserves

(79)

-

-

Changes in working capital (excluding the effects of exchange differences on consolidation):




- Increase in inventories

5

13

3

- Increase in trade and other receivables

(2,217)

(1,710)

(1,647)

- Increase in trade and other payables

1,310

1,861

2,974

Cash generated from operations

782

1,248

5,171

 

(*) Refer to note 13 for full details of the restatement of June 2017 figures.

11. Cash and cash equivalents include the following for the purposes of the cash flow statement:


Half year to

 30 June 2018

£'000

Restated (*)

Half year to

30 June 2017

£'000

Year ended

31 December 2017

£'000

Cash and cash equivalents

3,977

3,385

4,692

Bank overdrafts

(4,356)

(4,976)

(4,516)


(379)

(1,591)

176

 

(*) Refer to note 13 for full details of the restatement of June 2017 figures.

12. Related-party transactions

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

 

During the period rentals of £280,000 (30 June 2017: £393,000; 31 December 2017: £435,000) were paid 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.

 

For the six months ended 30 June 2018, Christie Group plc incurred expenses of £50,000 (30 June 2017: £nil; 31 December 2017: £25,000) in relation to the engagement of Philip Gwyn for consultancy work.




13. Prior year restatement

The Board have reviewed their previously adopted accounting treatment in relation to two indirectly held subsidiary entities, which were previously not consolidated by virtue of being considered to be immaterial contingent net assets.

Having considered the requirements of IFRS 10 (incorporating the requirements of SIC 12) the Board have restated the Consolidated Statement of Financial Position as at 30 June 2017, the Consolidated Income Statement for the period ended 30 June 2017, and all other elements of the financial statements so affected. In doing so, the consolidated financial statements are now prepared recognising Atrium Holdings Limited and P.H. UK Limited as indirectly but wholly owned subsidiaries of Christie Group plc and recognise that indirect beneficial ownership of both entities has vested with Christie Group plc since 30 April 2015.

 

The effect on the Consolidated Income Statement for June 2017 is set out below:

 

 

 

Previously reported
June 2017

£'000


Restated
June 2017

£'000


Impact of restatement
£'000

Revenue

 

34,925

34,925

-

Operating expenses

 

(33,897)

(33,834)

63

Operating profit

 

1,028

1,091

63

Finance costs

 

(296)

(326)

30

Profit before tax

 

732

765

33

Taxation

 

(376)

(396)

(20)

Profit after tax

 

356

369

13

 

 

 

 

 

Earnings per share attributable to equity holders - pence

 

 

 

 

-          Basic

 

1.49

1.53

0.04

-          Fully diluted

 

1.47

1.51

0.04


The effect on the Statement of Financial Position as at 30 June 2017 was as follows:

 

 

 

Previously reported
June 2017

£'000


Restated
June 2017

£'000


Impact of restatement
£'000

Property, plant and equipment

 

1,536

3,607

2,071

Other receivables

 

451

182

(269)

Trade and other receivables

 

14,568

14,956

388

Trade and other payables

 

(10,891)

(11,275)

(384)

Current tax liabilities

 

(335)

(346)

(11)

Current borrowings

 

(6,807)

(7,780)

(973)

Non-current borrowings

 

-

(743)

(743)

Other assets and liabilities (net)

 

(8,029)

(8,029)

-

Net (liabilities)/assets

 

(9,507)

(9,428)

79

 

Property, plant and equipment has been restated to recognise P.H. UK Limited's ownership of the freehold property of Pinder House, 249 Upper Third Street, Milton Keynes, MK9 1DS.

 

Current and non-current borrowings are restated to include amounts payable by Atrium Holdings Limited and its immediate and wholly owned subsidiary undertaking, P.H. UK Limited. Borrowings within these companies are without direct recourse to any other Group company, including Christie Group plc, in the event of any non-repayment or default. The bank loan is secured against the freehold property noted above.

 

14. Publication of Interim Report

The 2018 Interim Financial Statements are available on the Company's website www.christiegroup.com


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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