TIDMBONH
RNS Number : 2214M
Bonhill Group PLC
20 January 2021
20 January 2021
Bonhill Group plc
("Bonhill", the "Company" or the "Group")
Trading Update
Bonhill Group Plc (AIM: BONH), a leading B2B media business
specialising in three key areas: Business Information, Events and
Data & Analytics, provides the following trading update for the
year ended 31 December 2020 (the "Year"). All figures for the Year
included in this announcement remain subject to audit.
In what was undoubtedly a difficult year, the Company announces
that it delivered a strong second half of the Year ("H2") with
GBP10.1 million of revenue, versus GBP7.7 million reported in the
first half of the Year ("H1"), and adjusted EBITDA of approximately
GBP1.55 million (H1: GBP1.69 million loss). This was as a result of
the swift and positive action taken during the early months of the
pandemic. Revenue for the Year is therefore expected to be GBP17.8
million (2019: GBP24.4 million), which excludes Government support
of approximately GBP1.0 million, and adjusted EBITDA of
approximately GBP0.1 million (2019: GBP2.3 million) prior to an
adverse year end FX movement of GBP0.2 million. Following a
clarification regarding the accounting for Government financial
support, the GBP1.0 million received has been recognised as other
income, with GBP0.1 million of H1 revenue being reclassified as
such.
The result for the Year is in line with the Company's
expectations based on the assumptions made in its announcement of
the placing of new shares on 9 April 2020. At the time of the
release of the Company's unaudited interim results for the six
months ended 30 June 2020 on 15 September 2020, it was still
anticipated that the Company would have some live events in the UK
in the final quarter of the Year, which would have led to an
improved H2 performance. However, as a result of revised, tighter
Government restrictions (and a second national lockdown) all of
these events were converted to virtual and additional cost saving
measures were taken to manage contribution levels. Cash at 31
December 2020 is expected to be higher than expected at GBP1.3
million (2019: GBP1.9 million).
The Group will incur exceptional integration and restructuring
costs in the Year totalling approximately GBP1.4 million (2019:
GBP2.8 million), due mainly to the final integration into the Group
of each of InvestmentNews ("IN") and Last Word Media ("LWM"), which
were acquired by the Company in August 2018 and April 2019
respectively, other restructuring costs relating to COVID-19 in all
of the Group's businesses and the refinancing in April 2020.
COVID-19 cost management plan
In H2 2020, the Company put in place a new divisional structure,
new KPIs and incentives to focus on an increased level of recurring
revenue and new product development. During the Year, the Company
also undertook a restructuring programme and utilised the UK
Government's Coronavirus Job Retention Scheme. There are currently
no staff members on furlough and headcount across the Group at the
end of the Year was 124 (31 December 2019: 162). The annualised
impact of cost saving initiatives taken in 2020 is approximately
GBP1.0 million.
During 2021, the Company expects to see additional savings from
supplier agreements and reduced rental costs - both from the
renegotiated lease in the US and from exiting its head office,
Fleet House, in June 2021. The Group continues successfully to
operate remotely and although it is currently looking for a new
head office, it will be at a reduced annual cost.
In August 2020, the Company exited the Transitional Services
Agreement ("TSA") with Crain Communications, Inc ("Crain"), IN's
former owners, and, as set out above, in December 2020 renegotiated
a new lease in the US away from Crain. The final payment due to
Crain under the vendor loan agreement is payable in August 2021
and, as at 31 December 2020, $1.4m was outstanding.
Business Information
Overall revenues were impacted by approximately 26% in the Year
(including LWM for a full 12-month period as opposed to the 8
months of ownership in 2019 post-acquisition). We have seen a
strong digital performance in our core titles outperforming the
reforecast carried out at the start of the pandemic. IN saw digital
revenues achieve pre-COVID budgeted levels for the Year,
benefitting from the investment in the core website in January
2020. Portfolio Adviser saw a 3% increase in digital revenues
compared with the previous year and Small Business titles saw 36%
growth in revenues benefitting from a subscriber base that grew
fivefold during the Year as the UK SME community managed the impact
of COVID-19. The recently relaunched Fund Selector Asia website saw
a strong digital performance compared to prior years. Print
revenues in IN were impacted, but this created the opportunity to
develop a digital magazine that was launched in April 2020. We
achieved cost savings as a result of a reduced print run and, in
response to customer demand, reinstated a print edition in July
2020. We continue to run the magazine in both a digital and print
format.
Events
All business areas moved swiftly to a virtual event platform in
the summer of 2020 and during the Year, the Company delivered a
total of 102 virtual events ranging from 12 to 400 people and from
a simple 1-hour format to a number of multi-day flagship events.
The Company's decision to partner with best-in-class solutions gave
it the confidence to transfer the majority of its planned live
events to virtual. The pandemic resulted in a 39% decline in event
revenue year-on-year from GBP9.6 million in 2019 to GBP5.9 million
for the Year, but, due to the move to virtual events, at a much
improved gross margin of 71% from 54%. Despite the ongoing
restrictions on events, the Company is confident that it can
continue to deliver high quality virtual events in 2021, building
on its current offering. We expect a return to live events in a
modest way in late 2021.
ESG
A strong feature of the Year was the variety of ESG initiatives
the Company has developed in response to interest from both
investors and providers in the area. We launched ESG Clarity in
both the US and Asia and this global platform is well placed for
the coming years. Approximately 50% of all current RFPs received by
the Company have an ESG component and our events portfolio,
research and data offerings and product set have been adjusted to
reflect this fast growing trend.
Technology
The Group has completed its initial technology investment
programme, which provides it with a stable open platform with the
ability to expand and greatly improve the features which can be
delivered for customers. The Company is already seeing the benefits
of this Group-wide platform and the capability it brings.
Outlook
As a result of the actions taken by the Company in 2020 to
address its cost base, operating structure and implement a digital
first product set and, in light of the current operating
environment, the Board expects to see revenue growth of
approximately 12% in 2021 and to report EBITDA of approximately
GBP1.2 million, excluding any Government support. The Board does
not anticipate there being any adjusting items this year. The
improvement in working capital management seen in H2, strong cash
conversion and the better than expected year end cash position
should lead to a further strengthening of the Company's balance
sheet in 2021.
The Company expects to release its audited final results for the
year ended 31 December 2020 in late March 2021, when it will
provide a further update on current trading and prospects.
Simon Stilwell, Bonhill's Chief Executive, commented:
"2020 was a difficult year for the Group with the impact of
COVID-19. I am pleased that the business has responded well with a
strong virtual events portfolio and an enhanced digital offering.
The pandemic forced a reassessment of the business lines and we
enter 2021 with our investment programmes and restructuring
complete, improved and more efficient internal processes and strong
customer relationships.
We have seen a promising start to 2021 and, with the challenges
of 2020 behind us, remain confident that we will deliver an
improved financial performance despite the continuing impact on
live events."
For further enquiries please contact:
Bonhill Group plc +44 (0)20 7250 7035
Simon Stilwell, Chief Executive
Sarah Thompson, Chief Financial Officer
Shore Capital (Nominated Adviser and Joint Broker) +44 (0)20 7408 4050
Tom Griffiths/David Coaten (Corporate Advisory)
Fiona Conroy (Corporate Broking)
Canaccord Genuity Limited (Joint Broker) +44 (0)20 7523 8000
Bobbie Hilliam
Adam James
Georgina McCooke
Houston (PR Adviser) +44 (0)204 529 0549
Alexander Clelland
About Bonhill Group plc
Bonhill Group plc is a leading, AIM-quoted, B2B media company
providing Business Information, Events and Data & Insight
propositions to Financial Services, Diversity and Technology
business communities in 25 countries. Bonhill operates fifteen
information websites, publishes three 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.
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