TIDMBONH
RNS Number : 6872M
Bonhill Group PLC
18 September 2019
18 September 2019
Bonhill Group plc
("Bonhill", the "Company" or the "Group")
HALF YEAR RESULTS FOR THE SIX MONTHSED 30 JUNE 2019
Bonhill Group plc (AIM: BONH), a leading B2B media business
specialising in three key areas: Business Insight, Live Events and
Data & Analytics, announces its unaudited interim results for
the six months ended 30 June 2019.
Financial Highlights
-- Revenue of GBP10.7m, up 4.6 times from GBP1.9m in the
comparable period in 2018, and organic Bonhill UK growth of
6.4%
-- EBITDA of GBP0.4m (2018: loss of GBP0.2m)
-- Fundraising of GBP10m to fund the acquisition of Last Word
Media and strengthen the balance sheet
-- As at 30 June 2019 cash balance of GBP5.7m (2018: GBP0.9m)
and net cash of GBP2.1m (2018: GBP0.9m)
-- Maiden dividend payable of 0.28p per share
-- Trading since release of the Company's pre-close update on 24
July 2019 has been more challenging for Last Word Media in the UK
and Hong Kong while Investment News has returned to more normal
trading patterns
Operational Highlights
-- Successful acquisition of Last Word Media, a leading provider
of business information, data and live events for the financial
advisor market in UK, Europe and Asia for a net initial
consideration of GBP7.8m in April 2019
-- Continued investment in people with, among others, Heads of
Operations, Marketing and Sales joining the UK Events team as well
as post-period end a new CEO of InvestmentNews and Simon Collin as
CPO
-- Continued progress in moving towards being a technology led,
'must have' provider of Business Insight, Events and Data &
Analytics propositions in our core sectors of Financial Services,
Diversity and Technology
-- Successful technology investment and implementation on time and on budget
-- Successful launch of Women in IT Singapore and Women Advisor
summits in Denver and Huntington Beach and Women in Asset
Management in New York
Commenting on the results, Simon Stilwell, Chief Executive of
Bonhill, said:
"It has been another period of tremendous progress on our
transformational journey which began in August 2017. Despite all
the disruption and changes, we now begin to see the Group emerge as
a strong organisation, able to compete at the highest level with a
new technology platform, people and market positioning which
provides a solid platform for long term growth."
Commenting on outlook he added:
"As we announced in the Company's pre-close update on 24 July
2019, a challenging US market impacted trading at InvestmentNews,
our US business, so creating greater bias to our group second half
performance. We have met and overcome these challenging conditions
and the InvestmentNews business has recovered its momentum and is
now trading at levels ahead of last year with great product and
strong leadership. However, as a board we are also cognisant of the
lack of fund flows in the UK fund management industry and the
issues in Hong Kong which will impact our performance. As a result,
the Board expects that for the year ending 31 December 2019 both
revenue and EBITDA will be approximately GBP1.0 million below
market expectations. However, our continued investment in people
and technology and the overall organisation gives us great
confidence that we will enter 2020 in a stronger position."
-ends-
For further enquiries please contact:
Bonhill Group plc +44 (0)20 7250 7035
Simon Stilwell, Chief Executive
David Brown, Group Finance Director
Shore Capital (Nominated Adviser and Joint
Broker) +44 (0)20 7408 4050
Tom Griffiths
David Coaten
Canaccord Genuity Limited (Joint Broker)
Bobbie Hilliam
Adam James
Georgina McCooke +44 (0)20 7523 8000
About Bonhill Group plc
Bonhill Group plc is a leading, AIM-quoted, B2B media company
providing Business Insight, Events and Data & Analytics
propositions to Financial Services, Diversity and Technology
business communities in 25 countries. Bonhill operates fifteen
information websites, publishes four regular print titles, hosts
120 events per annum, offers a portfolio of data & analytics
propositions and provides a range of content marketing
solutions.
The business creates content, sales and marketing opportunities,
networking events and transactional opportunities for its audiences
of entrepreneurs, business owners and managers, CTOs &
technology leaders, asset & wealth managers, and professional
women, in addition to its sponsors, advertising clients and
customers. Flagship brands include: InvestmentNews, Portfolio
Adviser, Fund Selector Asia, What Investment, SmallBusiness.co.uk,
GrowthBusiness.co.uk, Information Age, Women in... events series,
and DiversityQ.
For more information visit www.bonhillplc.com
Chairman's Statement
It has continued to be an extremely busy period of activity in
all areas of the business as we continue the transformation of the
Bonhill Group. During the period, we acquired Last Word Media, a
market leading brand which operates in the UK, Europe, Middle East,
Africa and Asia. It is extremely complementary to InvestmentNews
and we now have a global offering for asset managers and financial
advisers. We have continued to develop our core offerings of
business insight, events and data & analytics. We also
undertook a fundraising of GBP10m which, in part, was used to part
finance the acquisition of Last Word Media, but also to strengthen
our balance sheet. Our cash position at the period end was GBP5.7m
(2018: GBP0.9m).
This interim period is for the six months ended 30 June 2019
and, as a result of the change of the Company's year end at the
time of the InvestmentNews acquisition last August, we are showing
the six months ended 30 June 2018 for comparison. I am pleased to
announce the payment of our maiden interim dividend of 0.28p per
share for the period following the successful capital reduction
earlier in the year.
We are just over two years on from the arrival of Simon Stilwell
as CEO in the Autumn of 2017 and the business continues on its
transformational journey. We now have a stronger position in
financial services with the acquisition of Last Word Media. We
continue to grow and broaden the scope of our Diversity activities
and the investment we have made over the last year in Group-wide
technology has put us on a strong, effective common platform that
will further develop our data and analytics offering as well as
provide a better service to our clients. I would like to thank all
our people, the vast majority of whom are new to the business, for
their contribution and to all our shareholders for their support
during the fundraising and acquisition of Last Word Media.
Neil Sachdev
Non-Executive Chairman
Chief Executive's Review
Introduction
It has been another period of progress at all levels as we
invest in and integrate InvestmentNews, develop its events
portfolio and product offering and improve all of its internal
process and systems through investment in technology. The Bonhill
UK business continues to flourish under new management. We have
further developed our small business franchise and are starting to
win substantial contracts from a new customer base. Our Diversity
business and, in particular the Women in... series, has been
extended further and we now have an improving mix of Summits and
Awards as well as a strong slate of new locations in the second
half of the year. Finally, the acquisition of Last Word Media
brings a global presence for our financial services brands.
Our investment in people continues and we have a rapidly
improving team from a variety of media industry backgrounds that we
are beginning to develop into a highly effective unit. We aspire to
be a destination for talented people in this industry to work. The
overall improvement in our people and culture will be of particular
focus in the coming year as we complete the integration of our
businesses and use the technology platform we have invested in to
greater effect.
The principal focus for the remainder of this year and beyond is
the integration of the Last Word Media business into the Group, the
continued development of our diversity brands and the development
of data and product initiatives that utilise our broader financial
services expertise. We are looking to launch our ESG clarity brand
into the US in December alongside our flagship ESG Impact forum
with the United Nations. The wider deployment of Last Word Media's
products into our key geographies will continue in 2020. Despite
all the changes, challenges and developments in the year to date, I
have great confidence that the business I could envisage back in
2017 is beginning to emerge and will be able to compete at the
highest level.
Transformational Period
It has been another period of quite dramatic change. Having
bought InvestmentNews in August 2018, we have expanded our position
in the global asset management/financial advisory space by buying
Last Word Media in April 2019. This well established business,
which operates in all the key geographies that InvestmentNews does
not, provides us with a global platform to service the asset
management and financial advisory industry. We believe that our
products and services for the financial advice industry and deep
knowledge of the global financial advisors market provide us with a
unique understanding of the core needs of the wider global asset
management community and its suppliers. As we integrate the
business and offer both businesses product sets across our expanded
geographies, we believe we will have a compelling offering of
global data and analytics, high quality content and a suite of
valuable industry events. Whilst fully combining these businesses
will take until early 2021, there is much to be done in the short
term.
We are also taking our Women in... Series into four new
geographies; with Singapore completed in the period, we will see
this global franchise launch in Berlin, Bucharest and Toronto in
the second half. We have also successfully developed an adjacent
summit to the awards programme which is rapidly becoming the must
attend event for tackling the issue of the lack of gender diversity
in the IT industry. InvestmentNews has also launched two new Women
Advisor summits in the US which takes us to 6 and we continue to
invest in developing this key US franchise. Post the period end, we
have also successfully launched Women in Asset Management in New
York. Elsewhere in the UK, we have changed the management and
operational teams and the process of running our events and are
confident that we now have a scaleable structure. This
professionalisation of the team and offering has already been well
received.
Technology development and enhancement has been a core part of
this period. Since our capital raising in 2018, we have been
working to develop the wider technological capability of the
business. We had set aside GBP1.2m to develop a new company wide
'tech stack' and we are on target in respects of both budget and
timing. The opportunity this investment brings for new product
development and offering a better client experience is essential if
we are to reach the levels we aspire to. Post-period end, we are
now on a common CRM platform across the business and are in a much
stronger position to deliver "best in class" solutions. This
platform has enabled us to trial new products and currently we have
7 new product trials running which is a step change in our new
product development capability.
Business model
Bonhill Group Plc's corporate strategy remains to transition its
business model to long-term, "must have", recurring revenue streams
through building market leading brands within its chosen business
communities of Financial Services, Diversity and Technology,
developing high value Business Insight, Events and Data &
Analytics propositions, and expanding beyond the UK into large, or
fast growing, international territories.
In the period, we have executed this strategy by starting to
change the business and geographic mix. As the business develops in
the full year, we will see the mix change such that Events and Data
& Analytics will become a more significant part of our
business. In the first half of 2019, the revenue split was 40%
Events, 30% Digital, 25% Print and 5% Data. Over the course of the
next two years, it is our intention to reduce print's contribution
to below 10% of total Group revenue and in three years to have a
20% contribution from Data & Analytics revenue. Additionally,
we are seeking to improve the level of subscription and repeat
revenues in all parts of the business. We will continue to report
on these changes.
Our geographic split of revenue has changed such that in the
period our revenue by geography was: 66% US, 24% UK, 6% Europe and
4% Asia.
Financial Services
On 10 April 2019, we completed the acquisition of Last Word
Media for a net initial consideration of GBP7.8m. The transaction,
which is in line with our strategy, brought us a market leading
brand, complementary to InvestmentNews, and exposure to fast
growing international markets.
Last Word Media currently operates seven investor facing brands.
These include seven news and information websites, two of which
have associated print titles. In H1 2019, the brands collectively
hosted 54 scheduled live events. Last Word Media operates a further
three brands targeting asset managers with event services, content
marketing solutions and research data products. The business
creates content, sales and marketing opportunities, networking
events and transactional opportunities for its clients and
audiences with the key objective to assist asset managers with
increasing assets under management. In our period of ownership
during the six months ended 30 June 2019, 56% of total revenues
from Last Word were generated in the UK, 16% in Asia, 8% in Europe
and the balance in the rest of the world. Of total revenues
generated in the period ended 30 June 2019, Events accounted for
56%, Business Insight accounted for 39% and Data & Analytics
and content marketing together accounted for 5%.
Bonhill has a market leading position in the US asset
management/financial adviser sector with InvestmentNews. Last Word
Media is a similar business, servicing the same asset management
clients, addressing similar financial adviser, fund selector and
wealth manager audiences and creating comparable news, information
and analysis focused on the asset management/financial adviser
industry. However, Last Word Media is currently not active in the
US being focused on entirely complementary territories of the UK,
Europe and Asia. Bringing the two businesses together within the
Group will enable Bonhill to provide a truly global partner to the
international asset management community.
In the coming year, the Board's growth plans for Last Word Media
comprise continued expansion of the Portfolio Adviser/Expert
Investor/Fund Selector events portfolios, development of
interactive and expanded versions of the Future Flows Data product
and our highly regarded Radius event business. We are also seeking
to further develop the ESG Clarity brand and launch a Fund Selector
America product.
Last Word Media has faced more challenging trading conditions
over the summer as a result of the widely publicised issues in the
UK fund management industry and the civil unrest in Hong Kong. At
the time of the release of the Company's pre-close update in late
July 2019, the business was trading ahead of its earn out target,
but has subsequently fallen behind that number. The Board believes
that the Company is unlikely to pay any additional consideration
for the business under the earn out arrangements, but importantly
also believes that the business will grow revenue, profit and
margin in the current year. As a result, the integration strategy
has been identified, employing best practice and learning from
InvestmentNews and is well underway.
Development of the InvestmentNews business will be focused
around developing a broader range of offerings away from the
historical print product. The weekly publication will remain an
integral part of the business, but the investment in technology,
closure of the Transitional Services Agreement from Crain
Communications (during 2019), relaunch of the InvestmentNews
website (in January 2020), renewed focus on Events, restructuring
of the sales team and the recent changes in management will see a
move to a more technology led, digitally focused and product
focused offering.
As previously announced in the Company's pre-close update on 24
July 2019, InvestmentNews had a difficult three month trading
period in February, March and April 2019. This situation created by
the extreme volatility in equity markets in the US at the end of
2018 impacted revenues primarily in the print business. The
business returned to more normal trading in May and June with May
being a strong month which outperformed every month in 2018, which
was the record trading year for the business. Trading has returned
to a more normal pattern with second half bookings ahead of this
time last year and we still expect to see revenue growth in the
current year.
Post-period end, we announced the appointment of Christine Shaw
as the new CEO of InvestmentNews. Christine joined from Future Plc
where she was MD of Global Events and B2B managing a team of 175
people, 55 events, 15 magazines and 16 websites. Prior to that, she
was a senior vice president at PennWell Corporation, a privately
held global B2B media business where in her last role she led the
technology division after a career there spanning 18 years. She has
extensive experience in all of our core offerings as well as change
management, building an international business and developing high
performing teams.
We are already seeing the benefits of this new leadership and
Christine was joined on 16 September 2019 by a new Chief Revenue
Officer, Scott Miller, who brings a wealth of financial services
experience across all of our core disciplines.
Of total revenues generated from Financial Services in the six
months ended 30 June 2019, Events accounted for 22%, Business
Insight accounted for 70% and Data & Analytics and content
marketing together accounted for 8%.
Diversity
Our Diversity franchise continues to develop. DiversityQ has
been running for a year and has made real progress in highlighting
all diversity issues and building direct relationships with the
leaders of the D&I community globally. Our flagship events
portfolio continues to develop and the underlying mission remains
the same: to highlight the significantly low percentage of female
professionals in the technology and finance industries; and to
challenge organisations that do not have diversity and inclusion
initiatives in place, as well as enhance the effectiveness of those
that have diversity initiatives in place. This is mainly achieved
through our editorial content and summits.
Our extensive awards programmes seek to showcase the
achievements of female professionals in these industries and to
create a community of high achievers, thought leaders and industry
role models and we want to be the high-profile platform and leader
with the ambition to move the dial on gender parity.
We have achieved much in this period by revising the event
proposals and expanding the team. Technology has enabled us to
build out our database and provide a more tailored offering and
increase brand awareness. Looking forward, we seek to prolong
client engagement, create an alumni of awards winners and continue
to expand our international reach and look beyond technology and
finance and our existing areas of expertise.
We have set ourselves some ambitious targets in the second half
and for next year, but we are confident that this high growth area
will continue as we better utilise technology, the new team and our
expanded geographic reach to launch new initiatives. We are seeking
to broaden our offering in this area to offer information and
support on a broader range of governance issues.
Technology
Our core proposition, www.informationage.com, is the leading
intelligence resource for IT decision-makers and technologists in
the information age. Since launch in 1995, 'InformationAge' has
helped millions of businesses achieve success through a
market-leading website and calendar of events for technology
leaders.
The site serves its audience with news, analysis, buyers' guides
and research to help in managing business-critical issues and in
identifying new technologies to enable business efficiencies,
security and growth.
Our community of readers and event delegates range from software
engineers and sysadmins through to CIOs, CTOs and IT Directors -
all of whom are involved in the application of technology for
strategic, competitive advantage and improved efficiencies.
Alongside its online presence, the brand has an extensive,
international range of live events and awards schemes to facilitate
networking between CTOs and technology leaders.
Although currently the smallest part of our business, it is a
vital channel for the continuing growth in our technology diversity
events and its global audience will be a key part of our future
data and analytics and product strategy.
Data & Analytics
We have historically talked about the need to develop our own
product data sets and associated analytics. We are now in a
position to meaningfully develop these opportunities. Ongoing
across our global portfolio of brands, we will seek to provide
essential information and analysis for professionals making key
decisions in the investment world, diversity and technology.
Over the last year, the investments in the Group's technology
have allowed us to focus on future growth as we develop an agile
approach to product development with the first of our suite of new
data-driven commercial products now being trialled. In parallel,
these investments have allowed us to deliver best-of-breed
e-commerce and marketing platforms that provide a flexible position
and for us to optimise online sales.
The driver behind these new product developments is the
alignment of our unique and comprehensive data sets and the team
with the relevant experience. This is now showing great potential
across our three audience groups, as we start to deliver on an
exciting near-term future that provides the prospect of delivering
data-driven solutions that help our customers better understand
their clients, work more effectively, make the right buying
decisions, and understand their social impact.
These new commercial propositions are being tested with
customers across our portfolio to deliver real-time insight to our
core audiences in the UK, USA, and Asia. For investment
professionals, we are enhancing our news analysis to offer enhanced
insight to trends and future implications of regulatory actions,
news events, and market actions. For our technology brands helping
smaller businesses, we continue to enhance our guides that provide
smart buying decisions; and for our ESG portfolio we help companies
of all sizes understand, manage, and benchmark their environmental,
social and diversity impact.
As we build our agile product delivery capability, we continue
our focus on delivering innovative and commercially successful
products, together with the continued focus on optimising our
existing product range for customer experience and revenue
generation. This gives us confidence in an expected positive impact
on traffic, customer experience, and revenue as these changes allow
us to build a best-practice delivery team working on must-have data
products that are monetised by subscription, by outcome
(lead-generation), and with events that together leverage our
global brands.
Opportunity
Bonhill is in a much stronger position than last year. We have
the necessary scale in our Financial Services business to compete
globally. Our Diversity business has moved from a local to a global
franchise and the underlying investment in people and technology
and improvement in all processes has put us in a much stronger
position to develop our Data & Analytics business. We have had
some local challenges, particularly in the US market, but our focus
on developing 'must have' products and moving to owning market
leading brands and a recurring revenue model remains intact and our
primary focus. This will be achieved by developing the existing
stable of assets and looking at selective acquisitions. I have no
doubt that our offering will continue to improve as our new team
develops and we continue to attract new talent and maximise the new
technology at our disposal. We will continue to refine our
processes and culture to reach the levels we aspire to.
Dividend
As previously announced, the Board has committed to a
progressive dividend policy, with the intention that the Company
will, on an on-going basis, pay an interim and a final dividend of
one-third and two-thirds of the annual dividend payable. In each
case, the Directors will take account of the current and
prospective financial and trading position of the Group, including
its level of cash reserves and cash requirements, at the relevant
time.
The Board has declared a maiden interim dividend of 0.28 pence
per share. This will be paid on 25 October 2019 to shareholders on
the register at the close of business on 27 September 2019.
Outlook
The business now has better people, processes, technology and
scale from which to grow in its core markets. This ongoing
professionalisation of the Group will continue into the coming year
with an emphasis on people and products. We are confident that our
investment into all areas over the last year will drive growth and
deliver returns for our shareholders over the coming years. We have
had some local difficulties in our markets that have made it harder
to achieve the shorter-term returns we had been expecting. As a
result, the Board expects that for the year ending 31 December 2019
both revenue and EBITDA will be approximately GBP1.0 million below
market expectations. However, fundamentally we have three
businesses in InvestmentNews, Last Word Media and the Bonhill UK
events business that are growing and are now better placed than
they were a year ago to capitalise on their market position.
Simon Stilwell
Chief Executive
Financial Review
Income statement
In these results, we refer to adjusted results as well as the
equivalent statutory measures. Adjusted results are prepared to
provide additional relevant information on our future or past
performance where equivalent information cannot be presented using
financial measures under IFRS. Adjusted results exclude adjusting
items, acquisition costs and amortisation of intangible assets
acquired through business combinations, as set out in Note 3
below.
30 June 30 June
2019 2018
6 months 6 months
GBP'000 GBP'000
------------------------------------------- ---------- ---------
Revenue 10,743 1,943
Adjusted EBITDA profit/(loss) 387 (192)
Depreciation / amortisation of internally
generated intangibles (301) (34)
Share option charge (70) -
------------------------------------------- ---------- ---------
Adjusted operating profit/(loss) 16 (226)
Finance costs (204) -
------------------------------------------- ---------- ---------
Adjusted loss before tax (188) (226)
Adjusted tax 32 -
------------------------------------------- ---------- ---------
Adjusted loss (156) (226)
Adjusting items (after tax) (2,226) (586)
------------------------------------------- ---------- ---------
Statutory loss (2,382) (812)
------------------------------------------- ---------- ---------
Adjusted loss per share (0.38p) (5.24p)
Statutory loss per share (5.85p) (18.86p)
------------------------------------------- ---------- ---------
The existing Bonhill UK business grew 6.4%, and acquisitions
delivered a further GBP8.7m of revenue, increasing overall revenue
by 4.6 times. InvestmentNews contributed a full 6 months while Last
Word contributed 2 1/2 months' trade.
InvestmentNews generated GBP6.8 million of revenue and GBP1.2m
EBITDA in the first half. Revenue was 11% lower than the
record-breaking pre-acquisition comparable period last year, with
February, March and April revenues affected by sponsor uncertainty
following the pre-Christmas volatility in US markets. Trading since
May has been ahead of last year and bookings for the second half of
the year are ahead of the same point last year.
Bonhill UK grew revenues 6.4%, with both Business Information
and Events ahead of last year. The core Women in... series saw
underlying growth, as well as successfully launching Women in IT
Singapore, which more than compensated for a weak legacy technology
event. Last year's restructuring of the UK media business is
starting to pay dividends as the segment moves to growth, which
reinforces our greater confidence in its future.
Last Word delivered GBP1.9m of revenue and a small EBITDA loss
in the 2 1/2 months since its acquisition. On a proforma basis,
sales were up 3% to GBP4.9m.
Adjusted earnings before interest, depreciation and amortisation
("EBITDA") is a measure of earnings and cash generative capacity. A
reconciliation of adjusted EBITDA to statutory earnings is set out
in Note 4 below. An adjusted EBITDA gain of GBP0.4 million (2018:
GBP0.2 million loss) was comprised of a GBP1.2 million contribution
from InvestmentNews and a GBP0.8m loss from the UK business which
carries the central overheads for the Group.
Adjusting items comprised GBP0.8 million (2018: GBP0.2 million)
of acquisition costs, GBP0.7 million of integration costs (2018:
GBPnil), GBP0.1 million relating to senior management
reorganisation (2018: GBPnil) together with GBP0.6 million (2018:
GBPnil) relating to amortisation of intangible assets acquired.
On an adjusted basis, the retained loss was GBP0.2 million
(2018: loss of GBP0.2 million), equivalent to 0.38p loss per share
(2018: 5.24p loss per share). The statutory loss for the period was
GBP2.4 million (2018: GBP0.8 million), equivalent to 5.85p per
share (2018: 18.86p per share).
Cash flow
30 June 30 June
2019 2018
6 months 6 months
GBP'000 GBP'000
-------------------------------------------- ----------- ---------
Adjusted EBITDA 387 (192)
Working capital movement 97 (103)
Interest paid (180) -
Tax paid (38) -
Foreign exchange gains 94 -
Purchases of property, plant and equipment
and intangible assets (64) (79)
--------------------------------------------- ---------- ---------
Free cash inflow/(outflow) 296 (374)
Acquisition of Last Word Media (5,840) -
Acquisition costs (815) (184)
Integration costs (732) -
Reorganisation costs (100) -
Proceeds from issue of ordinary shares 9,484 -
Repayment of borrowings (949) -
Net cash inflow/(outflow) 1,344 (558)
--------------------------------------------- ---------- ---------
Working capital showed an inflow as our trading mix moves
towards the more favourable events model where sponsors and
attendees pay prior to the event, and after GBP0.2m of interest
left a free cash inflow for the period of GBP0.3m (2018: outflow of
GBP0.4m).
GBP9.5m of share placing proceeds (net of GBP0.5m of costs) were
raised in the period (30 June 2018: GBPnil), of which GBP5.8m was
used as cash consideration to acquire Last Word Media and GBP0.8m
to pay associated costs.
Our integration of InvestmentNews continued as planned with
GBP0.7m being spent in the first half with the remainder of the
project spend to be completed in the second half.
Overall, there was a net cash inflow of GBP1.3m in the period
(2018: GBP0.6 million outflow).
Balance sheet
30 June 30 June
2019 2018
GBP'000 GBP'000
-------------------------- --------- --------
Intangibles 30,706 1,113
Tangible fixed assets 183 41
Working capital 1,667 (453)
Lease asset 1,479 -
Lease liability (1,549) -
Deferred and current tax (2,455) -
Cash 5,711 881
Debt (3,647) -
-------------------------- --------- --------
Net assets 32,095 1,582
-------------------------- --------- --------
The net initial consideration for Last Word Media was GBP7.8m
which included GBP2.0m of equity. An earn-out mechanism based on
delivering EBITDA of GBP1.5m in 2019 and EBITDA of GBP3.5m in 2020
could lead to a further GBP12m of deferred contingent consideration
being payable, but based on current forecasts, the Board expects
that the earn-out will not be reached and as such no deferred
consideration has been provided.
A provisional fair value exercise has been undertaken, and we
have recognised GBP1.9m of intangible assets together with GBP6.0m
of goodwill.
At 30 June 2019, the Group had a healthy cash balance of GBP5.7m
(2018: GBP0.9m). Last year's acquisition of InvestmentNews was, in
part, financed by a vendor loan of GBP4.7m, which had been reduced
to GBP3.6m by the balance sheet date. The loan is repayable in
equal monthly instalments until 31 August 2021. The Group held net
cash of GBP2.1m at 30 June 2019 (2018: GBP0.9m).
The capital reduction process has been completed which has
created distributable reserves and allows the payment of our GBP0.1
million maiden interim dividend.
Current Trading
UK events have started the second half well, with revenue 52%
higher than in the comparable period in the prior year.
InvestmentNews has recovered its momentum and is now trading at
levels ahead of last year with a strong pipeline also ahead of the
same period last year. While recent trading has been more
challenging for Last Word in the UK and Hong Kong, it continues to
show sales growth ahead of last year across the majority of its
core brands.
Despite the economic outlook, change in management team and
regional challenges in Asia, we believe the continued investment in
people, process, technology and scale will drive continued growth
both for the remainder of this year and beyond.
David Brown
Group Finance Director
Consolidated statement of comprehensive income
for the 6 month period ended 30 June 2019
6 month period ended 6 month period ended
30 June 2019 30 June 2018
(unaudited) (unaudited)
Note Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 2 10,743 - 10,743 1,943 - 1,943
Net operating expenses 3 (10,426) (1,639) (12,065) (2,135) (184) (2,319)
Depreciation (63) - (63) (8) - (8)
Amortisation and
impairment 3 (238) (615) (853) (26) (402) (428)
--------- ---------- ---------- --------- ---------- ----------
Net operating profit/(loss) 16 (2,254) (2,238) (226) (586) (812)
Finance costs (204) - (204) - - -
--------- ---------- ---------- --------- ---------- ----------
Loss before tax (188) (2,254) (2,442) (226) (586) (812)
Tax 32 28 60 - - -
--------- ---------- ---------- --------- ---------- ----------
Loss for the period (156) (2,226) (2,382) (226) (586) (812)
--------- ---------- ---------- --------- ---------- ----------
Other comprehensive
income:
Items that may be
reclassified subsequently
to profit or loss:
Exchange differences
on translating foreign
operations 5 - 5 - - -
Total comprehensive
loss for the period (151) (2,226) (2,377) (226) (586) (812)
--------- ---------- ---------- --------- ---------- ----------
Basic loss per share
attributable to the
owners of the parent 5 (0.38p) (5.85p) (5.24p) (18.86p)
Consolidated statement of financial position
at 30 June 2019
Note 30 June 2019 30 June 2018
GBP'000 GBP'000
(unaudited) (unaudited)
NON-CURRENT ASSETS
Goodwill 20,016 564
Other intangible assets 10,690 549
Property, plant and equipment 183 41
Deferred tax asset 326 -
Right-of-use asset 7 1,479 -
------------- -------------
32,694 1,154
------------- -------------
CURRENT ASSETS
Trade and other receivables 7,641 145
Cash and cash equivalents 5,711 881
------------- -------------
13,352 1,026
------------- -------------
TOTAL ASSETS 46,046 2,180
------------- -------------
NON-CURRENT LIABILITIES
Deferred tax liability (2,738) -
Borrowings (1,891) -
Financial lease liability 7 (947) -
------------- -------------
(5,576) -
------------- -------------
CURRENT LIABILITIES
Trade and other payables (5,974) (598)
Current tax liability (43) -
Borrowings (1,756) -
Financial lease liability 7 (602) -
------------- -------------
(8,375) (598)
------------- -------------
TOTAL LIABILITIES (13,951) (598)
------------- -------------
NET ASSETS 32,095 1,582
------------- -------------
EQUITY
Share capital 6 486 4,025
Share premium - 4,315
Share option reserve 138 118
Other reserves 104 104
Retained earnings 31,327 (6,980)
Foreign exchange reserve 40 -
------------- -------------
TOTAL EQUITY ATTRIBUTABLE TO OWNERS
OF THE PARENT 32,095 1,582
------------- -------------
Consolidated statement of changes in equity
for the 6 month period ended 30 June 2019
Share Foreign
Share Share option Other Retained exchange
capital premium reserve reserves earnings reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
31 December
2017 4,025 4,315 118 104 (6,168) - 2,394
Total comprehensive
loss for the
period - - - - (812) - (812)
Balance as at
30 June 2018 4,025 4,315 118 104 (6,980) - 1,582
Loss for the
period - - - - (1,459) - (1,459)
Other comprehensive
income - - - - - 35 35
Issue of share
capital 300 23,699 - - - - 23,999
Share issue
costs - (1,299) (1,299)
Cancellation
of deferred
shares (3,982) - - 3,982 - - -
Removal of share
option scheme - - (118) - 118 - -
Share option
charge - - 68 - - - 68
Balance as at
31 December
2018 343 26,715 68 4,086 (8,321) 35 22,926
Loss for the
period - - - - (2,382) - (2,382)
Other comprehensive
income - - - - - 5 5
Issue of share
capital 143 11,857 - - - - 12,000
Share issue
costs - (524) - - - - (524)
Capital reduction - (38,048) - (3,982) 42,030 - -
Share option
charge - - 70 - - - 70
Balance as at
30 June 2019 486 - 138 104 31,327 40 32,095
--------- --------- --------- ---------- ---------- ---------- ---------
Consolidated statement of cash flows
for the 6 month period ended 30 June 2019
6 month period 6 month period
ended ended
30 June 2019 30 June 2018
(unaudited) (unaudited)
GBP'000 GBP'000
CASH GENERATED FROM/ (USED IN) OPERATIONS 484 (295)
Interest paid (180) -
Tax paid (38) -
--------------- ---------------
NET CASH GENERATED FROM / (USED IN)
OPERATING ACTIVITIES 266 (295)
--------------- ---------------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (51) (61)
Purchases of intangible assets (13) (18)
Net cash consideration for acquisition (5,840) -
Acquisition costs (815) (184)
Integration costs (732) -
Reorganisation costs (100) -
--------------- ---------------
NET CASH USED IN INVESTING ACTIVITIES (7,551) (263)
--------------- ---------------
FINANCING ACTIVITIES
Proceeds from issue of ordinary shares 9,484 -
Repayment of invoice discount facility (949) -
and other borrowings
NET CASH GENERATED FROM FINANCING ACTIVITIES 8,535 -
--------------- ---------------
FOREIGN EXCHANGE MOVEMENT 94 -
NET INCREASE / (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,344 (558)
CASH AND CASH EQUIVALENTS AT THE BEGINNING
OF THE PERIOD 4,367 1,439
--------------- ---------------
CASH AND CASH EQUIVALENTS AT THE
OF THE PERIOD 5,711 881
--------------- ---------------
Notes to the cashflow
6 month period 6 month period
ended ended
30 June 2019 30 June 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Loss after tax (2,382) (812)
Adjustments for:
Tax (60) -
Finance costs 204 -
Amortisation and impairment 853 428
Depreciation or property, plant and
equipment 63 8
Share option charge 70 -
Other exceptional costs 1,639 184
Operating cash flows before movements
in working capital 387 (192)
Movement in receivables 666 183
Movement in payables (569) (286)
CASH FLOWS GENERATED FROM / (USED IN)
OPERATIONS 484 (295)
--------------- ---------------
Notes to the accounts
1. Basis of preparation
The financial information presented in this announcement has
been prepared in accordance with the recognition and measurement
requirements of EU Endorsed International Financial Reporting
Standards and IFRIC interpretations ("IFRS") and the Companies Act
2006 applicable to companies reporting under IFRS. The financial
statements have been prepared under the historical cost
convention.
The principal accounting policies adopted in the preparation of
the financial information in this announcement are unchanged from
those used in the Company's financial statements for the 9 month
period ended 31 December 2018 and are consistent with those that
the Company has applied in its financial statements for the 9 month
period ended 31 December 2018.
The financial information set out above does not constitute the
Company's statutory accounts for the 6 month period ended 30 June
2019 or the 6 month period ended 30 June 2018. Statutory accounts
for the 9 month period ended 31 December 2018 have been reported on
by the Independent Auditor. The Independent Auditor's Report on the
Annual Report and Financial Statements for December 2018 and March
2018 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 9 month
period ended 31 December 2018 have been filed with the Registrar of
Companies.
2. Revenue and segmental analysis
For executive management purposes, the business has three
reportable segments being the Bonhill UK business, the
InvestmentNews business and the Last Word Media business. Further
analysis of revenue has been performed by core proposition and
country.
6 month period 6 month period
ended 30 June ended 30 June
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Analysis of revenue by core propositions
Business Insight 5,888 312
Events 4,251 1,631
Data & Analytics 604 -
--------------- ---------------
Total 10,743 1,943
--------------- ---------------
Analysis of revenue by country
United Kingdom 2,604 1,550
United States 7,098 294
Europe 606 99
Asia Pacific 435 -
--------------- ---------------
Total 10,743 1,943
--------------- ---------------
Of the above total Group revenue, GBP6.804m relates to revenue
generated by InvestmentNews and GBP1.872m relates to revenue
generated by Last Word Media.
6 months ended 30 June Bonhill Last Word
2019 UK InvestmentNews Media Total
(unaudited) (unaudited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000 GBP'000
Reportable segmental income
statement
Revenue 2,067 6,804 1,872 10,743
Adjusted EBITDA (790) 1,180 (3) 387
Adjusted operating profit/(loss) (909) 1,034 (109) 16
Statutory operating profit/(loss) (2,386) 292 (144) (2,238)
Statutory profit/(loss) (2,387) 124 (119) (2,382)
------------- --------------- ------------- -------------
6 months ended 30 June Bonhill Last Word
2018 UK InvestmentNews Media Total
(unaudited) (unaudited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000 GBP'000
Reportable segmental income
statement
Revenue 1,943 - - 1,943
Adjusted EBITDA (192) - - (192)
Adjusted operating profit/(loss) (226) - - (226)
Statutory operating profit/(loss) (812) - - (812)
Statutory profit/(loss) (812) - - (812)
------------- --------------- ------------- -------------
3. Operating loss
(a) Operating loss for the period has been arrived at after charging the following items:
6 month period 6 month period
ended 30 June ended 30 June
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Depreciation of property, plant
and equipment (63) (8)
Amortisation of purchased or internally
generated intangible assets (238) (26)
Share based payment charge (70) -
--------------- ---------------
(b) Adjusting items
The Group incurred certain costs in 2018 and 2019 which the
Directors believe should be disclosed as adjusting items as set out
below:
6 month period 6 month period
ended 30 June ended 30 June
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Write off relating to intangible
assets - (373)
Acquisition costs (807) (184)
Integration costs (732) -
Reorganisation costs (100) -
Profit on disposal of historic property, - -
plant and equipment
Amortisation of intangibles acquired
through business combination (615) (29)
--------------- ---------------
(2,254) (586)
--------------- ---------------
4. Reconciliation of adjusted EBITDA to statutory earnings
Earnings before interest, depreciation and amortisation
("EBITDA") is a measure of earnings and cash generative capacity.
Adjusted EBITDA, which excludes non-recurring items, facilitates an
understanding of underlying earnings and cash generative capacity.
A reconciliation of Adjusted EBITDA to statutory earnings is set
out below.
6 month period 6 month period
ended 30 June ended 30 June
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Adjusted EBITDA 387 (192)
Adjusting items (1,639) (184)
--------------- ---------------
EBITDA (1,252) (376)
Depreciation (63) (8)
Amortisation and impairment (853) (428)
Share option charge (70) -
--------------- ---------------
Operating loss (2,238) (812)
Net finance costs (204) -
--------------- ---------------
Loss before tax (2,442) (812)
Taxation 60 -
--------------- ---------------
Loss after tax (2,382) (812)
--------------- ---------------
5. Earnings per share
Basic earnings per share is calculated by dividing the loss
attributable to owners of the parent by the weighted average number
of ordinary shares in issue during the period.
Based on statutory earnings 6 month period 6 month period
ended 30 June ended 30 June
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Loss attributable to owners of the
parent (2,382) (812)
Weighted average number of ordinary
shares in issue 40,693,032 4,301,541
Basic earnings per share (pence per
share) (5.85p) (18.86p)
Based on adjusted earnings 6 month period 6 month period
ended 30 June ended 30 June
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Loss attributable to owners of the
parent (156) (226)
Weighted average number of ordinary
shares in issue 40,693,032 4,301,541
Basic earnings per share (pence per
share) (0.38p) (5.24p)
6. Called up share capital
Issued and fully paid ordinary shares of 1p each
Number GBP'000
As at 31 December 2017 and 30 June
2018 172,061,632 1,721
Administrative issue of shares 8 -
Impact of 40:1 share reorganisation (167,760,099) (1,678)
Shares issued during the 6 month period 29,998,437 300
-------------- --------
As at 31 December 2018 34,299,978 343
Shares issued during the 6 month period 14,285,714 143
-------------- --------
As at 30 June 2019 48,585,692 486
-------------- --------
Deferred shares of 9p each
Number GBP'000
As at 31 December 2017 and 30 June
2018 25,603,787 2,304
Impact of 40:1 share reorganisation 18,640,011 1,678
Cancellation of deferred shares (44,243,798) (3,982)
------------- --------
As at 31 December 2018 and 30 June - -
2019
------------- --------
7. Lease
The Group recognises a right-of-use asset and lease liability
under IFRS 16.
Right-of-use asset GBP'000
Carrying value as at 1 January 2019 968
Additions to right-of-use assets 721
Amortisation charged (208)
Foreign exchange impact of revaluation (2)
--------
Carrying value as at 30 June 2019 1,479
--------
Lease liability
Carrying value as at 1 January 2019 1,018
Additions to lease liability 721
Interest charged 25
Repayments made (213)
Foreign exchange impact of revaluation (2)
--------
Carrying value as at 30 June 2019 1,549
--------
8. Acquisition of Last Word Media
On 10 April 2019, the Group completed the acquisition of Last
Word Media. Details of the fair value of identifiable assets and
liabilities acquired, purchase consideration and goodwill are as
follows:
Fair value
Book value adjustments Total
Fair value of assets acquired GBP'000 GBP'000 GBP'000
Property, plant and equipment 70 - 70
Intangibles 47 1,826 1,873
Right of use asset - 721 721
Cash and cash equivalents 656 - 656
Trade and other receivables 3,128 (78) 3,050
Trade and other payables (2,431) (376) (2,807)
Corporation tax payable (36) - (36)
Financial lease liability - (721) (721)
Deferred tax liability (12) (347) (359)
------------- ------------- --------
Fair value of net assets
acquired 1,422 1,025 2,447
Goodwill 6,049
--------
Consideration 8,496
--------
Consideration consists of cash consideration and consideration
taken as equity. Intangibles includes brands and customer
relationships.
The consideration comprised:
GBP'000
Cash consideration 6,496
Shares 2,000
8,496
--------
9. Post balance sheet events
Interim dividend
An interim dividend of 0.28p per share (2018: nil) amounting to
a dividend of GBP0.136m (2018: GBPnil) was declared by the
directors at their meeting on 17 September 2019. These financial
statements do not reflect this dividend payable.
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 rns@lseg.com or visit www.rns.com.
END
IR LFFFIAAIDLIA
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