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H&T Group PLC (HAT)

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Tuesday 14 August, 2018

H&T Group PLC

Interim Results

RNS Number : 6728X
H&T Group PLC
14 August 2018
 

14 August 2018

H&T Group plc

("H&T" or "the Group" or "the Company")

 

UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

H&T Group plc today announces its interim results for the six months ended 30 June 2018.

The Group financial statements have been prepared, as required, for the first time under IFRS 9 ('Financial Instruments - Recognition and Measurement').

 

John Nichols, H&T chief executive, said:

 

"We have made a solid start to the year due to the resilient nature of our product set and our digital initiatives.

 

Revenue is up £10.8m, across all key product segments.  Profit before tax is up to £6.1m (H1 2017: £5.5m) on an IFRS 9 basis.

 

Steady pawnbroking growth, driven by increasing numbers of new customers and the continuing growth of the personal loans book, is pleasing. The personal lending book has increased by 19% since December 2017.  We have maintained this growth, while ensuring we remain disciplined around our credit-risk management practices.  The broadening of our product suite into lower APR categories has proven successful, with 54% of our personal lending now out of the High-Cost Short-Term credit category.  This is important as we strive towards our vision of helping our customers to rebuild their credit rating.

 

We have further developed our digital platforms by upgrading and revamping our retail site, www.est1897.co.uk and our main H&T site.  Our click-to-bricks retail and lending offering has been further expanded by introducing click-and-collect foreign currency.  We will continue to invest in digital technology as we refine the pawnbroking model and leverage our store estate."

 

KEY FINANCIAL RESULTS

·     Profit before tax up 10.9% to £6.1m (H1 2017: £5.5m)

·     Basic EPS of 13.51p (H1 2017: 11.70p)

·     Net pledge book, including accrued interest increased by 8.6% to £47.8m (30 June 2017: £44.0m)

·     Personal Loan book increased 78.0% to £17.8m (30 June 2017: £10.0m)

·     Net debt increased to £16.8m (30 June 2017: £11.5m) due to personal loan and other working capital increases

·     Interim dividend of 4.4p (2017 interim: 4.3p)

 

OPERATIONAL HIGHLIGHTS

·     Growth in pawnbroking customer lending and new customers

·     Development of our Expert Eye valuation system

·     Enhancement of the est1897.co.uk website with typically more than 2,000 high-end watches and jewellery pieces now available online or through click-and-collect

·     Growth of our personal loan product, in part driven by increasing numbers of customers being offered our lower APR products

 

Enquiries:

H&T Group plc 

Tel: 0870 9022 600

John Nichols, chief executive                 

Steve Fenerty, finance director                  

 

Numis Securities (broker and nominated adviser)          

Tel: 020 7260 1000

Mark Lander, corporate broking

Freddie Barnfield, nominated adviser

 

Haggie Partners (financial public relations)                                                                                                        

Tel: 020 7562 4444

Damian Beeley

Sarah Shephard

Chanice Smith

INTERIM REPORT

 

Introduction

 

We have continued to achieve growth from all core revenue streams because of our ongoing focus on in-store execution excellence alongside our continuing development in digital technology.  Bringing together enhanced digital offerings with our 182 stores is key.

 

The trading environment has become more challenging with high street footfall reductions and localised competitor activity. 

 

We increased our store estate via an acquisition of a single site business and continue to offer high-end lending through our office in Bond Street, London.

 

IFRS 9

 

These statements have been prepared under IFRS 9 'Financial instruments', with prior periods restated.  IFRS 9 introduced an expected loss model where impairment is recognised on initial recognition of a personal loan or pledge based on the probability and timing of default together with the expected loss.  The impact on H1 2017 and H1 2018 results is summarised below.

 

Revenue less Impairment






IFRS 9

IAS 39

Change



£'000

£'000

£'000

6 months ended 30 June:

2017






Pawnbroking


14,465

14,708

(243)

Personal Lending


1,849

2,184

(335)





(578)






6 months ended 30 June:

2018






Pawnbroking


16,182

15,471

711

Personal Lending


3,123

3,733

(610)





101

 

We have placed comparatives on the H&T website at  https://handt.co.uk/about/investor-relations/reports/announcements which explains the differences in accounting treatments between IAS 39 and IFRS 9 with the effect on full year 2017 as well as H1 2017 and H1 2018. 

 

FINANCIAL RESULTS

 

The Group has reported profit before tax of £6.1m (H1 2017: £5.5m), a 10.9% increase, reflecting a good operational performance. 

 

Gross profit increased by £5.4m, 14.5%, to £42.6m (H1 2017: £37.2m).  The average H1 2018 gold price has decreased 2.6% to £958 per troy ounce for H1 2018 (H1 2017: £984).

 

Total direct and administrative expenses increased by £4.6m, 14.6%, to £36.1m (H1 2017: £31.5m). Of this increase, £2.1m relates to additional loan impairment charges, due to the change in IFRS 9 accounting treatment, and in line with the growth in the personal loan book.  There has been £1.2m of cost increases because of store staff investment including the adoption of the living wage and increased London salary weighting and higher store operating costs, including higher utility costs and cash delivery expenditures.  £0.6m of the uplift is associated with additional staffing and marketing costs associated with the personal loans growth.  There has been £0.4m of one-off costs associated with staff settlement and recruitment fees and an increase of £0.3m in central staff costs.

 

The Group's balance sheet remains strong with net debt at £16.8m (30 June 2016: £11.5m) and a net debt to EBITDA ratio, calculated in accordance with bank covenant arrangements, of 0.97x (30 June 2017: 0.75x). The increased borrowings have principally been invested into working capital of the business, including growth of the personal loan book. The bank debt position is well within the covenant test of 3.0x.  The Group has £9.0m of headroom available on its debt facility of £35.0m at 30 June 2018. We do not anticipate this position materially changing by year end.

 

Dividend

 

The Board has approved an interim dividend of 4.4 pence (2017 interim: 4.3 pence). This will be payable on 5 October 2018 to all shareholders on the register at the close of business on 7 September 2018.

 

 

REVIEW OF OPERATIONS

 

Pawnbroking

 

Pawnbroking remains a core product for H&T and we are pleased to report that the gross pledge book increased to £47.8m, including accrued interest, (30 June 2017: £44.0m).  This growth has been achieved because of the following factors:

 

·     A consistently high redemption rate of 84%

·     The continued growth in customer lending sourced via our appointed introducers and online marketing activity has increased our new customer count

·     Our average number of customer visits has increased

·     The quality-watch segment of the book has improved with the support of the Expert Eye system and additional specialist valuation staff which has driven a 25% increase in this category of lending

Pawnbroking revenue less impairment increased £1.7m to £16.2m (H1 2017: £14.5m) resulting in an annualised risk-adjusted margin (RAM) of 67.6% (H1 2017: 66.5%). 

 

 

Pawnbroking summary:

6 months ended 30 June:


Restated for IFRS 9



2018

2017 *

 Change


£'000

£'000

%

Period-end net pledge book1

47,847

44,027

8.7%

Average monthly net pledge book

47,836

43,521

9.9%





Revenue less impairment

16,182

14,465

11.9%

Annualised Risk-adjusted margin2

67.7%

66.5%


Notes to table




1 - Includes accrued interest




2 - Revenue less impairment as a percentage of average loan book

 

 

Pawnbroking scrap

 

Pawnbroking scrap produced gross profits of £1.0m (H1 2017: £1.2m) for the half year, on sales of £8.0m (H1 2017: £5.9m).  The reduced margin from 20% to 13% is a result of the reduction in the gold price between H1 2017 and H1 2018. 

 

Retail

 

Retail sales increased 7.2% to £16.4m (H1 2017: £15.3m) and gross profits increased by 1.7% to £6.0m (H1 2017: £5.9m). Margin at 36.6% (H1 2017: 38.6%) reflects an increased proportion of new items to supplement unredeemed pledge stock.

 

Improvements have been made to both our www.handt.co.uk and www.est1897.co.uk websites. We typically hold more than 2,000 high-end pre-owned watches and jewellery items on our website, available online via our own websites and www.chrono24.co.uk.

 

Further enhancements to our www.est1897.co.uk and to our Customer Relationship Management system are planned for H2 2018 as we ensure that the customer experience is as good as it can be.

 

Personal Loans

Net revenue increased 72.2% to £3.1m (H1 2017: £1.8m), and the loan book increased 79.1% to £17.8m (30 June 2017: £10.0m).  The principal factor in the loan book growth has been the continuing development of the store business, supplemented by online and broker-to-store third-party relationships.

We have made progress in delivery of the longer-term strategy of helping our customers to rebuild their credit rating, with more customers obtaining access to one of the two lower interest rate and longer-term products launched in 2017.  As a result, the proportion of loans that fall under the definition of high-cost short-term credit in H1 2018 fell to 50% (H1 2017 71%).

The proportionate growth in the loan book, with the average monthly net book having doubled on H1 2017, is higher than revenue growth.  We do not anticipate this level of book growth to continue.  The reduction in the annualised risk-adjusted margin to 37% (H1 2017: 44%) is the result of the increased proportion of new customers and repeat customers being offered our lower APR products.  Returns and default levels are in line with management expectations for credit quality and collections performance. 

Organic traffic to our website www.handt.co.uk continues to increase and we believe having a direct online loan offering and the ability to direct applicants from online into store is an important part of our growth strategy.   The online loan book has increased from £0.9m to £1.1m since 30 June 2017 as we take a measured and prudent approach to our online lending scorecard.

Store lending remains the key driver for revenue growth, with the book having increased 85% since 30 June 2017.

We have continued to invest in our Customer Relations Management system so that we can more effectively engage with and redirect online and via broker loan enquiries to local branches where appropriate. The process of encouraging a potential customer from the website to a physical branch is an important component of our strategy, blending a digital offering with our store estate.



 

Personal Loans summary:

 

 

6 months ended 30 June:

 


2018

2017

 Change

 

£'000

£'000

%

Period-end net loan book

17,757

10,013

77.3%

Average monthly net loan book

16,639

8,316

100.1%

 




Interest before impairment

10,566

6,672

58.4%

Impairment

(7,443)

(4,823)

54.3%

Revenue less impairment

3,123

1,849

68.9%

Annualised Risk-adjusted margin1

37.5%

44.5%

 





Notes to table




1 - Revenue less impairment as a percentage of average loan book


 

Gold purchasing

 

Gold purchasing profits increased to £2.1m (H1 2017: £1.8m).  The additional profit was mainly the result of increased volumes of gold scrapped, up 29.3% to £10.6m (H1 2017: £8.2m).

 

Typically, the impact of a decrease in gold price to purchasing profits is relatively short lived.  There is a delay between purchasing gold in store and realising the value through the market; if the gold price falls during this period then margins are reduced.  As the gold price stabilises, the rate that is paid for gold in store increases and we return to normal margins.

 

Other services

Total revenues from other services increased to £2.8m (H1 2017: £2.7m) with a £0.3m increase in Foreign Currency (FX) transaction profit offset by reductions in cheque cashing and Western Union income.

FX profit increased by 23% to £1.6m while the value of currency traded increased by 30%.  This is a result of our strategy to ensure our rates remain competitive as we continue to raise customer awareness in the product. The product is relatively new to the business and we continue to optimise currency holdings in store, develop additional services such as the buy-back guarantee and improve customer awareness through development of marketing and point-of-sale materials, including digital boards.  We have recently extended our online FX click-and-collect capability.

Buyback gross profits were flat at £0.8m.  Customer transactions were down 19.5% on H1 2017, but the testing processes implemented during 2017 and reduction in the types of items we will accept has meant we are achieving improved value from disposition.

 

REGULATION

 

Assessing creditworthiness in consumer credit

 

In July 2017, the FCA published its consultation paper on changes to its rules and guidance on assessing creditworthiness in consumer credit. In particular they want to clarify:

·      the distinction between affordability and credit risk

·      the factors that should be used when deciding the proportionality of assessments

·      the role of income and expenditure information

·      the regulator's expectations around firms' policies and procedures

We have designed our Personal Loan policies and procedures to include a robust assessment both of affordability and creditworthiness, so we are well placed to ensure our compliance with the final policy statement from the FCA.

 

Our strategy to evolve the Personal Loans product to lower interest rates allows existing customers to move away from high-cost credit where possible.  Ensuring that we adequately assess creditworthiness and affordability and customers are provided with loans they can afford is in the best interests of our customers and is a more sustainable product for our business.

 

STRATEGY AND OUTLOOK

 

The demand for small-sum, short-term cash loans remains strong.  The Company continues to focus and seek strategies to grow its pawnbroking offering while expanding its unsecured lending product and retail offering by focusing on digital and online strategies to complement its store estate. 

 

We will continue to work towards our vision of helping our customers to rebuild their credit history by expanding the proportion of them on products that falls outside high cost short term lending.  We will achieve this by continuing to focus on operational effectiveness aligned with the training, development and progression of our valuable staff.

 

Current trading is in line with management's expectations. 

Interim Condensed Financial Statements

 

Unaudited statement of comprehensive income

For the 6 months ended 30 June 2018

 





6 months ended 30 June 2018

6 months ended 30 June 2017

12 months ended 31 December 2017


Note



Total

Total

Total





Unaudited

 

Unaudited

Restated*

Restated*





£'000

£'000

£'000

 








 

Revenue

2



68,486

57,706

124,689

 

Cost of sales




(25,915)

(20,529)

(46,567)

 





________

________

________

 

Gross profit

 

2



42,571

37,177

78,122

 








 

Other direct expenses




(28,783)

(25,413)

(53,440)

 

Administrative expenses




(7,341)

(6,052)

(12,233)

 





________

________

________

 

Operating profit

 

3



6,447

5,712

12,449

 








 

Investment revenues




3

-

-

 

Finance costs

5



(348)

(261)

(567)

 





________

________

________

 

Profit before taxation




6,102

5,451

11,882

 








 

Tax on profit

6



(1,126)

(1,193)

(2,400)

 





________

________

________

 

Total comprehensive income for the period




4,976

4,258

9,482

 





________

________

________

 








 





Pence

Pence

 Pence

 








 

Earnings per ordinary share - basic

7



13.51

11.70

25.99

 

Earnings per ordinary share - diluted

7



13.45

11.67

25.88

 








 

 

All results derive from continuing operations.

 

*IFRS 9 restated

 

 



Unaudited condensed consolidated statement of changes in equity

 

For the 6 months ended 30 June 2018

 


Note  

6 months

 ended

30 June
2018

6 months

 ended

30 June
2017

12 months

ended

31 December

2017



Unaudited

 

Unaudited

Restated*

Audited

Restated*



£'000

£'000

£'000






 

Opening total equity


99,689

92,768

92,768

 






 

Total comprehensive income for the period


4,976

4,258

9,482

 

Issue of share capital


523

337

907

 

Share option movement taken directly to equity


(13)

(18)

96

 

Dividends paid

9

(2,329)

(1,964)

(3,564)

 



 

 

 

 

Closing total equity


102,846

95,381

99,689

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



Unaudited condensed consolidated balance sheet

 

At 30 June 2018

 



At 30 June

2018

At 30 June

2017

At 31 December

2017



Unaudited

 

Unaudited

Restated*

Restated*


Note

£'000

£'000

£'000

Non-current assets





Goodwill


17,643

17,676

17,643

Other intangible assets


449

429

331

Property, plant and equipment


6,660

6,417

6,381

Deferred tax assets


1,373

1,168

1,313



 

 

 



26,125

25,690

25,668

Current assets





Inventories


33,035

33,175

34,102

Trade and other receivables


68,535

56,453

64,470

Other current assets


841

1,192

665

Cash and cash equivalents


9,272

9,496

8,676



 

 

 



111,683

100,316

107,913



 

 

 

Total assets


137,808

126,006

133,581



 

 

 

Current liabilities





Trade and other payables


(7,086)

(7,227)

(9,731)

Current tax liabilities


(726)

(1,163)

(1,038)



 

 

 



(7,812)

(8,390)

(10,769)



 

 

 

Net current assets


103,871

91,926

97,144



 

 

 

Non-current liabilities





Borrowings

4

(25,831)

(20,762)

(21,810)

Provisions


(1,319)

(1,473)

(1,313)



 

 

 



(27,150)

(22,235)

(23,123)



 

 

 

Total liabilities


(34,962)

(30,625)

(33,892)



 

 

 

Net assets


102,846

95,381

99,689



 

 

 






EQUITY





Share capital

8

1,883

1,860

1,872

Share premium account


27,153

26,082

26,641

Employee Benefit Trust share reserve


(35)

(35)

(35)

Retained earnings


73,845

67,474

71,211



 

 

 

Total equity attributable to equity holders of the parent


102,846

95,381

99,689



 

 

 

 

 

 

 



Unaudited condensed consolidated cash flow statement

For the 6 months ended 30 June 2018


 

Note

6 months

ended

30 June

2018

6 months

ended

30 June

2017

12 months ended

31 December 2017



Unaudited

 

Unaudited

Restated*

Restated*



£'000

£'000

£'000

Cash flows from operating activities





Profit for the period


4,976

4,258

9,482

Adjustments for:





Investment revenues


(3)

-

-

Finance costs


348

261

567

Movement in provisions


6

(23)

(184)

Income tax expense


1,126

1,193

2,400

Depreciation of property, plant and equipment


1,160

1,231

2,428

Amortisation of intangible assets


72

101

200

Loss on disposal of fixed assets


81

124

69



 

 

 

Operating cash inflows before movements in working capital


7,766

7,145

14,962






Decrease/(increase) in inventories


1,112

(3,383)

(4,311)

(Increase)/decrease in other current assets


(176)

(344)

184

Increase in receivables


(3,756)

(3,946)

(11,982)

(Decrease)/Increase in payables


(2,590)

(1,869)

618



 

 

 

Cash generated from/(used in) operations


2,356

(2,397)

(529)






Income taxes paid


(1,512)

(1,144)

(2,508)

Debt restructuring cost


(34)

-

-

Interest paid


(279)

(207)

(456)



 

 

 

Net cash generated from/(used in) operating activities


531

(3,748)

(3,493)



 

 

 

Investing activities





Interest received


3

-

-

Purchases of property, plant and equipment

(1,563)

(723)

(1,768)

Proceeds on disposal of trade

-

7

7

Acquisition of trade and assets of business

(569)

(21)

(21)


 

 

 

Net cash used in investing activities

(2,129)

(737)

(1,782)


 

 

 




Dividends paid   

9

(2,329)

(1,964)

(3,564)

Net increase in borrowings

4,000

6,000

7,000

Issue of shares

523

337

907


 

 

 

2,194

4,373

4,343


 

 

 





596

(112)

(932)





8,676

9,608

9,608

 

 

 

9,272

9,496

8,676


 

 

 

 



Unaudited notes to the condensed interim financial statements

For the 6 months ended 30 June 2018

 

Note 1 Basis of preparation

 

The interim financial statements of the group for the six months ended 30 June 2018, which are unaudited, have been prepared in accordance with the International Financial Reporting Standards ('IFRS') accounting policies adopted by the group and set out in the annual report and accounts for the year ended 31 December 2017, except for the adoption of IFRS 9.  The group does not anticipate any change in these accounting policies for the year ended 31 December 2018. As permitted, this interim report has been prepared in accordance with the AIM rules but not in accordance with IAS 34 "Interim financial reporting". While the financial figures included in this preliminary interim earnings announcement have been computed in accordance with IFRSs applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as that term is defined in IFRSs.

The financial information contained in the interim report also does not constitute statutory accounts for the purposes of section 434 of the Companies Act 2006. The financial information for the year ended 31 December 2017, prior to the restatement as a result of the adoption of IFRS 9, is based on the the statutory accounts for the year ended 31 December 2017. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

After conducting a further review of the group's forecasts of earnings and cash over the next twelve months and after making appropriate enquiries as considered necessary, the directors have a reasonable expectation that the company and group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half yearly condensed financial statements.

 

 



 

Unaudited notes to the condensed interim financial statements

For the 6 months ended 30 June 2018

 

Note 2 Segmental Reporting

 

2018

Revenue

Pawnbroking

£'000

Gold

purchasing

£'000

Retail

£'000

Pawnbroking scrap

£'000

Personal

Loans

£'000

Other

Services

£'000

Consolidated

for the 6 months ended

30 June 2018

£'000









External revenue

20,092

10,611

16,420

7,954

10,566

2,843

68,486


 

 

 

 

 

 

 

Total revenue

20,092

10,611

16,420

7,954

10,566

2,843

68,486


 

 

 

 

 

 

 

Gross profit

20,092

2,107

5,965

998

10,566

2,843

42,571


 

 

 

 

 

 

 

 

Impairment

(3,910)

-

-

-

(7,443)

-

(11,353)


 

 

 

 

 

 

 

Segment result

16,182

2,107

5,965

998

3,123

2,843

31,218


 

 

 

 

 

 

 

Other direct expenses excluding impairment




(17,430)

Administrative expenses




(7,341)





 

Operating profit




6,447

Investment revenue




3

Finance costs




(348)





 

Profit before taxation




6,102

Tax charge on profit




(1,126)





 

Profit for the financial year and total comprehensive income




4,976





 

 

2017

Revenue

 

Pawnbroking

Restated*

£'000

Gold

Purchasing

£'000

Retail

£'000

Pawnbroking scrap

£'000

Personal

loans

Restated*

£'000

Other

Services

Restated*

£'000

Consolidated

for the 6 months ended

30 June 2017

Restated*

£'000









External revenue

18,874

8,241

15,254

5,940

6,672

2,725

57,706


 

 

 

 

 

 

 

Total revenue

18,874

8,241

15,254

5,940

6,672

2,725

57,706


 

 

 

 

 

 

 

Gross profit

18,874

1,820

5,928

1,158

6,672

2,725

37,177


 

 

 

 

 

 

 

 

Impairment

(4,409)

-

-

-

(4,823)

-

(9,232)


 

 

 

 

 

 

 

Segment result

14,465

1,820

5,928

1,158

1,849

2,725

27,945


 

 

 

 

 

 

 

Other direct expenses excluding impairment




(16,181)

Administrative expenses




(6,052)





 

Operating profit




5,712

Investment revenue




-

Finance costs




(261)





 

Profit before taxation




5,451

Tax charge on profit




(1,193)





 

Profit for the financial year and total comprehensive income




4,258





 

 

 

Unaudited notes to the condensed interim financial statements (continued)

For the 6 months ended 30 June 2018

 

Note 2 Segmental Reporting (continued)

 

 

2017

Revenue

 

Pawnbroking

Restated*

£'000

Gold

purchasing

£'000

Retail

£'000

Pawnbroking scrap

£'000

Personal

Loans

Restated*

£'000

Other

Services

Restated*

£'000

For the year

ended 2017

Restated*

£'000









External revenue

38,465

17,651

35,407

11,696

15,574

5,896

124,689


 

 

 

 

 

 

 

Total revenue

38,465

17,651

35,407

11,696

15,574

5,896

124,689


 

 

 

 

 

 

 

Gross profit

38,465

3,397

12,859

1,931

15,574

5,896

78,122


 

 

 

 

 

 

 

 

Impairment

(9,167)

-

-

-

(11,679)

-

(20,846)


 

 

 

 

 

 

 

Segment result

29,298

3,397

12,859

1,931

3,895

5,896

57,276


 

 

 

 

 

 

 

Other direct expenses excluding impairment




(32,594)

Administrative expenses




(12,233)





 

Operating profit




12,449

Finance costs




(567)





 

Profit before taxation




11,882

Tax charge on profit




(2,400)





 

Profit for the financial year and total comprehensive income




9,482





 

 

 

 

Note 3 Operating profit and EBITDA

EBITDA

 

The Board consider EBITDA to be a key performance measure as the Group borrowing facility includes a number of loan covenants based on it.

 

EBITDA is defined as Earnings Before Interest, Taxation, Depreciation and Amortisation. It is calculated by adding back depreciation and amortisation to the operating profit as follows:

 

6 months ended 30 June 2018

Unaudited

6 months ended

 30 June

 2018

 

Unaudited

6 months ended

 30 June

 2017

Restated*

Unaudited

12 months ended

 31 December 2017

Restated*

Audited


 

Total

 

Total

 

Total


£'000

£'000

£'000





Operating profit

6,447

                5,712

12,449

Depreciation and amortisation

1,232

1,332

2,628


 

 

 

EBITDA

7,679

7,044

15,077


 

 

 

 

 

 



 

Unaudited notes to the condensed inter          im financial statements (continued)

For the 6 months ended 30 June 2018

 

Note 4 Borrowings

 


6 months

ended

 30 June
2018

6 months

ended

 30 June
2017

12 months

ended

 31 December

 2017


Unaudited

Unaudited

Audited


£'000

£'000

£'000









Long term portion of bank loan

26,000

21,000

22,000

Unamortised issue costs

(169)

(238)

(190)





Amount due for settlement after more than one year

25,831

20,762

21,810









 

Note 5 Finance costs


6 months

ended

 30 June

 2018

6 months

ended

 30 June

 2017

12 months

ended

 31 December

 2017


Unaudited

Unaudited

Audited


£'000

£'000

£'000





Interest payable on bank loans and overdraft

                    294

213

472

Other interest

1

1

1

Amortisation of debt issue costs

53

47

94


 

 

 

Total finance costs

348

261

567


 

 

 

 

 



Unaudited notes to the condensed interim financial statements (continued)

For the 6 months ended 30 June 2018

 

Note 6 Tax on profit

 

The taxation charge for the 6 months ended 30 June 2018 has been calculated by reference to the expected effective corporation tax and deferred tax rates for the full financial year to end on 31 December 2018. The underlying effective full year tax charge is estimated to be 19% (six months ended 30 June 2017: 19.25%).

 

 

Note 7 Earnings per share

Basic earnings per share is calculated by dividing the profit for the period attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period.

 

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.  With respect to the group these represent share options granted to employees where the exercise price is less than the average market price of the company's ordinary shares during the period.

 

Reconciliations of the earnings per ordinary share and weighted average number of shares used in the calculations are set out below:

 


Unaudited

Unaudited (Restated*)

(Restated*)


6 months ended 30 June 2018

6 months ended 30 June 2017

12 months ended 31 December 2017


                                                              

                                                                   

                                                                  


Earnings

£'000

Weighted average number of shares

Per-share amount pence

Earnings

£'000

Weighted average number of shares

Per-share amount pence

Earnings

£'000

Weighted average number of shares

Per-share amount pence











Earnings per share -

basic

4,976

36,832,563

13.51

4,258

36,383,440

11.70

9,482

36,479,426

25.99











Effect of dilutive securities










Options

-

165,465

(0.06)

-

83,299

(0.03)

-

155,374

(0.11)


 

 

 

 

 

 

 

 

 

Earnings per share diluted

4,976

36,998,028

13.45

4,258

36,466,739

11.67

9,482

36,634,800

25.88


 

 

 

 

 

 

 

 

 



Unaudited notes to the condensed interim financial statements (continued)

For the 6 months ended 30 June 2018

 

Note 8 Share capital

 

 


At

 30 June 2018

At

30 June 2017

At

31 December 2017


Unaudited

Unaudited

Audited

Allotted, called up and fully paid

(Ordinary Shares of £0.05 each)




£'000 Sterling

1,883

1,860

1,872


 

 

 

Number

37,658,511

37,199,944

37,437,760


 

 

 

 

 

Note 9 Dividends

 

On 9 August 2018, the directors approved a 4.4 pence interim dividend (30 June 2017: 4.3 pence) which equates to a dividend payment of £1,657,000 (30 June 2017: £1,600,000). The dividend will be paid on 5 October 2018 to shareholders on the share register at the close of business on 7 September 2018 and has not been provided for in the 2018 interim results. The shares will be marked ex-dividend on 6 September 2018.

 

On 3 May 2018, the shareholders approved the payment of a 6.2 pence final dividend for 2017 which equates to a dividend payment of £2,329,000 (2016: £1,964,000). The dividend was paid on 1 June 2018.

 

 


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