TIDMHAT
RNS Number : 7927I
H&T Group PLC
13 August 2019
13 August 2019
H&T Group plc
("H&T" or "the Group" or "the Company")
UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 JUNE 2019
H&T Group plc today announces its interim results for the
six months ended 30 June 2019.
The Group financial statements have been prepared, as required,
for the first time under IFRS 16 ('Leases').
FINANCIAL HIGHLIGHTS
-- Profit before tax up GBP0.5m, 7.9% to GBP6.8m (H1 2018:
GBP6.3m)
-- Operating profit before non-recurring expenses up 16.0%,
GBP1.2m to GBP8.7m (H1 2018: GBP7.5m), after GBP0.5m transaction
expenses up 9.3%, GBP0.7m to GBP8.2m (H1 2018: GBP7.5m)
-- Basic EPS of 15.00p (H1 2018: 13.85p)
-- Net pledge book, including accrued interest, increased
by 3.8% from FY18 to GBP53.8m (30 June 2018: GBP47.8m)
-- Personal Loan book Risk Adjusted Margin increased to 54.1%
(H1 2018: 37.5%)
-- Net debt reduced by GBP2.1m from FY18 to GBP11.6m (30 June
2018: GBP16.8m)
-- Interim dividend of 4.7p (2018 interim: 4.4p)
OPERATIONAL HIGHLIGHTS
-- Growth in pawnbroking, customer lending and new customers
-- Improved personal loan net profitability due to lower impairment
and focus on store initiated new business
-- Growth of our foreign currency product, driven by improved
systems and in-store displays
-- Improved management of our customer interactions and better
conversion of our online leads via the utilisation of our
integrated CRM and digital marketing platforms
-- Planned acquisition of 65 trading stores and 46 pledge
books from the Money Shop
John Nichols, H&T chief executive, said:
"We have made a good start to the year due to the resilient
nature of our product set, our investment in people, and our
digital initiatives. A strengthening gold price is helpful to our
business. PBT is up nearly 8% to GBP6.8m, and revenue is up
GBP1.5m, primarily driven by increased pawnbroking, personal
lending and retail activity.
"Against this solid background, in July 2019 we completed the
acquisition of 65 trading stores and bought 29 pledge books from
the Money Shop, all of which have been integrated into the Group
(we had previously acquired 17 books for GBP0.4m in the period). To
facilitate this acquisition, in July we raised GBP6.0m of
additional equity funding by way of an accelerated bookbuild
placing, having renewed our GBP35.0m credit facility with Lloyds.
The total acquisition price was GBP11.0m, which included taking
possession of GBP6.0m of pledged assets, GBP1.0m of cash, a
freehold property and trading fixtures and fittings, together with
241 employees.
"We can be confident of the success of this important
transaction as a result of the investment in people and processes
made over many years. The acquired stores conduct similar business
and will geographically complement our existing store estate. With
the application of H&T's appropriate capital, staffing support
and management, and with the expansion of pledge business and the
introduction of our personal lending products the investment will
provide significant value to shareholders.
"We will further leverage this expanded store estate by
continuing to develop and invest in digital multi-channel
capability."
Enquiries:
H&T Group plc
Tel: 0870 9022 600
John Nichols, chief executive
Richard Withers, interim finance director
Numis Securities (broker and nominated adviser)
Tel: 020 7260 1000
Luke Bordewich, nominated adviser
Haggie Partners (financial public relations)
Tel: 020 7562 4444
Caroline Klein
Vivian Lai
INTERIM REPORT
Introduction
We have continued to achieve revenue growth from all core
business activities through our ongoing focus on in-store execution
excellence alongside continuing development in digital
capabilities.
In July we increased our store estate by 65 sites, bringing our
estate to 248 stores, via the acquisition of certain assets from
the Money Shop. This growth allows us to expand our online to
in-store capability.
FINANCIAL RESULTS
The Group has reported profit before tax of GBP6.8m (H1 2018:
GBP6.3m), a 7.9% increase, reflecting a good operational
performance.
Gross profit increased by GBP1.5m, 3.5%, to GBP44.1m (H1 2018:
GBP42.6m). Operating profit before non-recurring expenses increased
by GBP1.2m, 16.0%, to GBP8.7m (H1 2018: GBP7.5m). The group
incurred GBP0.5m of transaction related costs in respect of the
acquisition of certain assets of the Money Shop which have been
expensed in full.
The average H1 2019 gold price has increased 5.4% to GBP1,010
per troy ounce for H1 2019 (H1 2018: GBP958).
Total direct and administrative expenses increased by GBP0.3m,
reflecting a GBP0.2m reduction in impairment charges despite
aggregate increases in our lending books and a GBP0.5m, 3.5%
increase in wage-related costs, as a result of increases in pension
and living wage costs.
The Group's balance sheet remains strong with net debt at
GBP11.6m (30 June 2018: GBP16.8m) and a net debt to EBITDA ratio,
calculated in accordance with bank covenant arrangements, of 0.64x
(30 June 2018: 0.97x).
The reduced borrowings reflected the cash generative nature of
the Group and a relative slow-down in the growth of our personal
lending offering. The bank debt position is well within the
covenant test of 3.0x. The Group had GBP14.0m (30 June 2018:
GBP9.0m) of headroom available on its debt facility of GBP35.0m at
30 June 2019. The credit facility was renewed with Lloyds on
principally the same terms for a period of up to five years,
expiring in June 2024.
Dividend
The Board has approved an interim dividend of 4.7 pence (2018
interim: 4.4 pence). This will be payable on 4 October 2019 to all
shareholders on the register at the close of business on 6
September 2019.
IFRS 16
IFRS 16, applicable for accounting periods beginning on or after
1 January 2019 has been adopted by the Group and prior periods
restated using the fully retrospective approach. The standard
introduces the identification of lease arrangements and the impact
on the Group's financial statements is shown in detail at note
10.
As at 30 June 2019 the Group has non-cancellable operating lease
commitments of GBP22.0m (30 June 2018: GBP25.3m). The new
accounting requirement results in a reduction in retained earnings
of GBP3.1m, primarily resulting from the Group recognising a
right-of-use asset capitalised at a net book value of GBP18.4m (30
June 2018: GBP21.5m) offset by a lease liability of GBP20.7m (30
June 2018: GBP24.0m). The impact on the Group's statement of
comprehensive income for H1 2019 is GBP0.1m (H1 2018: GBP0.1m).
REVEW OF OPERATIONS
Pawnbroking
Pawnbroking remains a core product for H&T and we report
that the gross pledge book increased to GBP53.8m, including accrued
interest (30 June 2018: GBP47.8m). This growth has been achieved
due to the following factors:
-- Increase in number of customer transactions by 6.5% on
H1 2018
-- Higher carat lending, principally 14ct and 22ct, driving
a GBP0.9m increase in book value from this category on
31 December 2018
-- Improvement in the quality-watch segment of the book, with
the support of the Expert Eye system and additional specialist
valuation staff, which has seen a GBP0.5m book increase
on 31 December 2018
-- Consistently high redemption rate of 84% (H1 2018: 84%)
-- Continued growth in customer lending sourced via our appointed
introducers
Pawnbroking-revenue less impairment increased GBP0.6m to
GBP16.8m (H1 2018: GBP16.2m) resulting in an annualised
risk-adjusted margin (RAM) of 62.9% (H1 2018: 67.9%). The was a
consequence of a change in mix towards lending on higher value
(higher carat gold and premium watches) items.
Pawnbroking summary:
6 months ended 30 June: 2019 2018 Change
GBP'000 GBP'000 %
----------------------------- -------- -------- -------
Year-end net pledge book(1) 53,799 47,847 12.4%
Average monthly net pledge
book 53,422 47,665 12.1%
Revenue less impairment 16,793 16,182 3.8%
Annualised Risk-adjusted
margin(2) 62.9% 67.9%
Notes to table
1 - Includes accrued
interest
2 - Revenue less impairment as a percentage
of average pledge book
Pawnbroking scrap
Pawnbroking scrap produced gross profits of GBP0.4m (H1 2018:
GBP1.0m) for the half year, on sales of GBP5.9m (H1 2018: GBP8.0m).
The reduced margin from 13% to 7% results primarily from delay in
the realisation of diamond sales yet to be auctioned.
Retail
Retail sales increased 12.8% to GBP18.5m (H1 2018: GBP16.4m)
while gross profits reduced by 10.0% to GBP5.4m (H1 2018: GBP6.0m).
Margin at 29.2% (H1 2018: 36.6%) is reflected by an increased
proportion of lower-margin watches sold in store and online and
higher watch repair and refurbishment costs. The Group has also
reduced its stock holding of aged items, requiring higher level of
sales discounting. As a result, retail stock has reduced by GBP2.3m
to GBP31.6m (30 June 2018: GBP33.9m).
Our online retail site continues to grow, with online generated
sales reaching GBP2.0m (H1 2018: GBP1.1m). Our www.est1897.co.uk
website typically holds more than 2,000 high-end pre-owned watches
and jewellery items.
Electronic item sales are a necessary consequence of buyback fee
income. Revenue from electronic items was GBP1.9m (H1 2018:
GBP1.5m). In the period, losses from these items were GBP0.4m (H1
2018: profit GBP0.1m). Our online sales process only became
operational end H1 2019. As a result, a higher proportion of items
were disposed of at auction, as opposed to online or in-store where
we achieve a higher price, resulting in these net losses and
depressing the overall retail margin.
Personal Loans
Net revenue increased 74.2% to GBP5.4m (H1 2018: GBP3.1m), while
the loan book decreased 5.3% from 31 December 2018 to GBP19.4m (30
June 2018: GBP17.8m). Organic store lending increased 2.1% vs H1
2018.
We have improved the annualised risk-adjusted margin to 54% (H1
2018: 37%) by taking proactive action in areas identified as not
economically viable. Since the end of 2018 we have been refocusing
on the quality of our lending.
Marketing activities have been stepped up to leverage our
investment in our Customer Relations Management system so that we
can more effectively engage with and redirect loan enquiries to
local branches. The process of encouraging a potential customer
from the website to a physical branch is now an important component
of our strategy, blending a digital offering with our store
estate.
We have made further 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. As a result, the proportion
of loans that fall under the definition of high-cost short-term
credit fell to 36% (H1 2018: 50%).
Personal Loans summary:
6 months ended 30 June: 2019 2018 Change
GBP'000 GBP'000 %
---------------------------- --------- -------- --------
Period-end net loan book 19,363 17,757 9.0 %
Average monthly net loan
book 20,050 16,639 20.5%
Revenue 11,620 10,566 10.0%
Impairment (6,196) (7,443) (16.8%)
Revenue less impairment 5,424 3,123 73.7%
Annualised Risk-adjusted
margin(1) 54.1% 37.5%
Notes to table
1 - Revenue less impairment as a percentage
of average loan book
Gold purchasing
Gold purchasing profits reduced to GBP1.5m (H1 2018: GBP2.1m) on
sales of GBP8.4m (H1 2018: GBP10.1m). The reduced margin from 21%
to 18% is a result of timings differences in the sales of purchased
gold together with diamonds awaiting auction as at 30 June 2019.
Gold held in stock for melting was GBP1.7m (30 June 2018:
GBP1.4m).
Other services
Total revenues from other services increased to GBP3.3m (H1
2018: GBP2.8m) with a GBP0.3m increase in Foreign Currency (FX)
transaction profit partially offset by reductions in buyback
income.
FX profit increased by 18.8% to GBP1.9m (H1 2018: GBP1.6m) while
the value of currency traded increased by 14.0% from GBP71.9m to
GBP82.0m. We continue to maintain competitive rates as we raise
customer awareness in the product. The product is still relatively
new to the business and we have seen trading uplift due to a new
system deployment that optimises currency holdings in store. We
continue to see improved customer awareness through development of
marketing and point-of-sale materials.
Buyback customer transactions were up 14.4% on H1 2018, driving
an additional GBP0.1m in fees with revenue at GBP0.9m (H1 2018:
GBP0.8m).
Cheque cashing revenue was flat at GBP0.4m (H1 2018:
GBP0.4m).
REGULATION
Continued focus on affordability and creditworthiness in
consumer credit
Our historic approach to affordability and creditworthiness
ensured we were in a positive position to be able to meet all new
requirements with minimal changes to our policies or procedures. In
November 2018 the FCA's new rules and guidance on assessing
affordability and creditworthiness in consumer credit came into
force. The Group's strategy is to evolve the Personal Loans product
to lower interest rates.
Senior Managers & Certification Regime
The FCA is extending the Senior Managers & Certification
Regime (SM&CR) to all firms from the 9(th) December 2019. The
Group has always adopted a robust approach to governance and
internal controls and is well placed to meet the additional demands
of the SM&CR.
STRATEGY AND OUTLOOK
We are excited about the opportunity to achieve uplift and
return from our newly enlarged store estate. We will continue to
focus on people development and transfer the Group's success
factors into the 65 newly acquired ex-Money Shop stores. We will
also look at opportunities where the Money shop excelled (for
example Western Union, FX, cheque cashing) and transfer knowledge
and synergies where relevant.
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 sensibly expanding its unsecured
personal 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 giving them access to
more affordable lending products. We will also maintain our
relentless 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 2019
6 months 6 months 12 months
ended 30 ended 30 ended 31 December
June 2019 June 2018 2018
Note Total Total Total
Unaudited Restated*
Unaudited Restated*
GBP'000 GBP'000 GBP'000
Revenue 2 69,999 68,486 143,025
Cost of sales (25,929) (25,915) (54,781)
________ ________ ________
Gross profit 2 44,070 42,571 88,244
Other direct expenses (28,013) (27,740) (58,736)
Administrative expenses (7,384) (7,341) (13,272)
________ ________ ________
Operating profit before non-operating
expenses 8,673 7,490 16,236
________ ________ ________
Non-recurring expenses 11 (500) - -
________ ________ ________
Operating profit 3 8,173 7,490 16,236
Investment revenues - 3 3
Finance costs 5 (1,342) (1,196) (2,468)
________ ________ ________
Profit before taxation 6,831 6,297 13,771
Tax on profit 6 (1,275) (1,197) (2,818)
________ ________ ________
Total comprehensive income for
the period 5,556 5,100 10,953
________ ________ ________
Pence Pence Pence
Earnings per ordinary share
- basic 7 15.00 13.85 29.69
Earnings per ordinary share
- diluted 7 14.97 13.78 29.59
All results derive from continuing operations.
* Certain comparative information has been restated as a result
of the initial application of IFRS 16 as set out in note 10.
Unaudited condensed consolidated statement of changes in
equity
For the 6 months ended 30 June 2019
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
Note 2019 2018 2018
Unaudited Restated*
Unaudited Restated*
GBP'000 GBP'000 GBP'000
Opening total equity 103,821 96,404 96,404
Total comprehensive income for the
period 5,556 5,100 10,953
Issue of share capital 328 522 522
Share option movement taken directly
to equity 368 (12) (72)
Dividends paid 9 (2,496) (2,329) (3,986)
________ ________ ________
Closing total equity 107,577 99,685 103,821
________ ________ ________
Unaudited condensed consolidated balance sheet
At 30 June 2019
At 30 June At 30 June At 31 December
2019 2018 2018
Unaudited
Unaudited Restated* Restated*
Note GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 17,643 17,643 17,643
Other intangible assets 280 449 343
Property, plant and equipment 6,497 6,660 6,032
Deferred tax assets 1,760 2,015 1,683
Right-of-use assets 10 18,408 21,529 20,159
44,588 48,296 45,860
Current assets
Inventories 30,653 33,035 29,262
Trade and other receivables 74,315 67,219 73,379
Other current assets 947 841 877
Cash and cash equivalents 9,501 9,272 11,414
115,416 110,367 114,932
Total assets 160,004 158,663 160,792
Current liabilities
Lease liability 10 (4,830) (4,657) (4,779)
Trade and other payables (9,031) (7,086) (7,384)
Current tax liabilities (722) (759) (842)
(14,583) (12,502) (13,005)
Net current assets 100,833 97,865 101,927
Non-current liabilities
Borrowings 4 (20,656) (25,831) (24,888)
Lease liability 10 (15,890) (19,326) (17,825)
Provisions (1,298) (1,319) (1,253)
(37,844) (46,476) (43,966)
Total liabilities (52,427) (58,978) (56,971)
Net assets 107,577 99,685 103,821
EQUITY
Share capital 8 1,891 1,883 1,883
Share premium account 27,472 27,153 27,152
Employee Benefit Trust share
reserve (35) (35) (35)
Retained earnings 78,249 70,684 74,821
Total equity attributable to
equity holders of the parent 107,577 99,685 103,821
* Certain comparative information has been restated as a result
of the initial application of IFRS 16 as set out in note 10.
Unaudited condensed consolidated cash flow statement
For the 6 months ended 30 June 2019
6 months 6 months 12 months
Note ended ended ended
30 June 30 June 31 December
2019 2018 2018
Unaudited
Unaudited Restated* Restated*
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit for the period 5,556 5,100 10,953
Adjustments for:
Investment revenues - (3) (3)
Finance costs 1,342 1,196 2,468
Increase/(decrease) in provisions 45 6 (60)
Income tax expense 1,275 1,197 2,818
Depreciation of property, plant
and equipment 1,045 1,160 2,333
Depreciation of right-of-use assets 2,004 2,092 4,188
Amortisation of intangible assets 71 72 150
Loss on disposal of property, plant
and equipment 5 81 133
Share based payment expense 146 - -
Operating cash flows before movements
in working capital 11,489 10,901 22,980
(Increase)/decrease in inventories (1,391) 1,112 4,884
Increase in other current assets (70) (176) (212)
Increase in receivables (517) (3,821) (9,947)
Decrease in payables (259) (4,264) (5,405)
Cash generated from operations 9,252 3,752 12,300
Income taxes paid (1,248) (1,511) (2,776)
Interest paid (1,206) (1,128) (2,344)
Net cash generated from operating
activities 6,798 1,113 7,180
Investing activities
Interest received - 3 3
Purchases of property, plant and equipment (1,520) (1,563) (2,101)
Acquisition of right-of-use assets (253) (548) (1,275)
Acquisition of trade and assets of business (419) (569) (575)
Net cash used in investing activities (2,192) (2,677) (3,948)
Financing activities
Dividends paid 9 (2,497) (2,329) (3,986)
(Decrease)/increase in borrowings (4,000) 4,000 3,000
Debt restructuring cost (350) (34) (31)
Proceeds on Issue of shares 328 523 523
Net cash (used in)/generated from financing
activities (6,519) 2,160 (494)
Net (decrease)/increase in cash and cash
equivalents (1,913) 596 2,738
Cash and cash equivalents at beginning
of period 11,414 8,676 8,676
Cash and cash equivalents at end of period 9,501 9,272 11,414
Unaudited notes to the condensed interim financial
statements
For the 6 months ended 30 June 2019
Note 1 Basis of preparation
The interim financial statements of the group for the six months
ended 30 June 2019, 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 2018,
except for the adoption of IFRS 16. The group does not anticipate
any change in these accounting policies for the year ended 31
December 2019. 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 2018, prior to the restatement as a result
of the adoption of IFRS 16, is based on the statutory accounts for
the year ended 31 December 2018. 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 2019
Note 2 Segmental Reporting
Consolidated
for the
6 months
ended
Gold Pawnbroking Personal Other 30 June
2019 Pawnbroking purchasing Retail scrap Loans Services 2019
Revenue GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
External
revenue 21,790 8,752 18,511 6,040 11,620 3,286 69,999
___________ __________ _______ __________ ______ __________ ___________
Total revenue 21,790 8,752 18,511 6,040 11,620 3,286 69,999
Gross profit 21,790 1,495 5,432 447 11,620 3,286 44,070
Impairment (4,997) - - - (6,196) - (11,193)
Segment result 16,793 1,495 5,432 447 5,424 3,286 32,877
Other direct expenses excluding impairment (16,820)
Administrative expenses (7,384)
Operating profit before non-recurring
expenses 8,673
Non recurring expenses (500)
Operating profit 8,173
Investment revenue -
Finance costs (1,342)
Profit before taxation 6,831
Tax charge on profit (1,275)
Profit for the period and total comprehensive
income 5,556
Consolidated
for the
6 months
ended
Gold Pawnbroking Personal Other 30 June
2018 Pawnbroking purchasing Retail scrap Loans Services 2018
Revenue GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 (16,387)
Administrative expenses (7,341)
Operating profit 7,490
Investment revenue 3
Finance costs (1,196)
Profit before taxation 6,297
Tax charge on profit (1,197)
Profit for the period and total comprehensive
income 5,100
Unaudited notes to the condensed interim financial statements
(continued)
For the 6 months ended 30 June 2019
Note 2 Segmental Reporting (continued)
For the
Personal Other year
Pawnbroking Gold Pawnbroking Loans Services ended 2018
2018 Restated* purchasing Retail scrap Restated* Restated* Restated*
Revenue GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
External
revenue 41,278 20,745 38,338 14,059 22,472 6,133 143,025
Total revenue 41,278 20,745 38,338 14,059 22,472 6,133 143,025
Gross profit 41,278 3,757 13,203 1,401 22,472 6,133 88,244
Impairment (10,366) - - - (15,515) - (25,881)
Segment result 30,912 3,757 13,203 1,401 6,957 6,133 62,363
Other direct expenses excluding
impairment (32,855)
Administrative expenses (13,272)
Operating profit 16,236
Investment revenue 3
Finance costs (2,468)
Profit before taxation 13,771
Tax charge on profit (2,818)
Profit for the financial year and
total comprehensive income 10,953
Note 3 Operating profit and 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 2019 6 months 6 months 12 months
Unaudited ended ended ended
30 June 30 June 31 December
2019 2018 2018
Restated* Restated*
Unaudited Unaudited Audited
Total Total Total
GBP'000 GBP'000 GBP'000
Operating profit 8,173 7,490 16,236
Depreciation and amortisation 1,116 1,232 2,483
Depreciation of right-of-use assets 2,004 2,092 4,188
EBITDA 11,293 10,814 22,907
See note 10 for impact of IFRS 16 ('leases').
Unaudited notes to the condensed interim financial statements
(continued)
For the 6 months ended 30 June 2019
Note 4 Borrowings
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Long term portion of bank loan 21,000 26,000 25,000
Unamortised issue costs (344) (169) (112)
--------- --------- ------------
Amount due for settlement after more
than one year 20,656 25,831 24,888
========= ========= ============
Note 5 Finance costs
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Interest payable on bank loans and overdraft 331 294 657
Other interest 1 1 1
Amortisation of debt issue costs 118 53 109
Interest on right-of-use assets 892 848 1,701
Total finance costs 1,342 1,196 2,468
Note 6 Tax on profit
The taxation charge for the 6 months ended 30 June 2019 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 2019. The underlying effective full year tax charge is
estimated to be 19% (six months ended 30 June 2018: 19%).
Unaudited notes to the condensed interim financial statements
(continued)
For the 6 months ended 30 June 2019
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 6 months ended 30 12 months ended 31
June 2019 June 2018 December 2018
Earnings Weighted Per-share Earnings Weighted Per-share Earnings Weighted Per-share
GBP'000 average amount GBP'000 average amount GBP'000 average amount
number pence number pence number pence
of shares of shares of shares
Earnings
per share
-
basic 5,556 37,039,443 15.00 5,100 36,832,563 13.85 10,953 36,895,316 29.69
Effect of
dilutive
securities
Options - 70,999 (0.03) - 165,465 (0.07) - 126,277 (0.10)
Earnings
per share
diluted 5,556 37,110,442 14.97 5,100 36,998,028 13.78 10,953 37,021,593 29.59
Note 8 Share capital
At At At
30 June 2019 30 June 2018 31 December
2018
Unaudited Unaudited Audited
Allotted, called up and fully
paid
(Ordinary Shares of GBP0.05
each)
GBP'000 Sterling 1,891 1,883 1,883
Number 37,827,501 37,658,511 37,658,511
Note 9 Dividends
On 9 August 2019, the directors approved a 4.7 pence interim
dividend (30 June 2018: 4.4 pence) which equates to a dividend
payment of GBP1,866,000 (30 June 2018: GBP1,657,000), which
incorporates additional shares issued on 4 July 2019 (see note 11).
The dividend will be paid on 4 October 2019 to shareholders on the
share register at the close of business on 6 September 2019 and has
not been provided for in the 2019 interim results. The shares will
be marked ex-dividend on 5 September 2019.
On 2 May 2019, the shareholders approved the payment of a 6.6
pence final dividend for 2018 (2017: 6.4 pence) which equates to a
dividend payment of GBP2,450,000 (2018: GBP2,329,000). The dividend
was paid on 31 May 2019.
Unaudited notes to the condensed interim financial statements
(continued)
For the 6 months ended 30 June 2019
Note 10 Explanation of adoption of IFRS 16
The table below shows the impact of adopting IFRS 16 on each
financial statement line item affected.
Impact on profit or loss, other comprehensive As at As at As at
income and total comprehensive income 30 June 30 June 31 December
2019 2018 2018
Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Decrease in Operating expenses 3,052 3,135 6,126
Increase in Depreciation (2,004) (2,092) (4,189)
Increase in Finance costs (892) (848) (1,701)
Increase in Tax charged on profit (64) (71) (112)
----------- ----------- -----------
Increase in Profit for the year 92 124 124
Impact on assets, liabilities and As at As at As at As at
equity 31 December 30 June 30 June 31 December
2017 2019 2018 2018
Unaudited Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000 GBP'000
Increase in Right-of-use assets (NBV) 23,073 18,408 21,529 20,159
Increase in Deferred tax assets 675 574 641 608
Decrease in Trade and other receivables (1,389) (1,269) (1,324) (1,291)
Increase in Trade and other payables (25,656) (20,720) (23,983) (22,604)
Increase in Current tax liabilities - (74) (37) (45)
------------ ------------ ------------ -----------
Total reduction in net assets (3,297) (3,081) (3,174) (3,173)
Retained earnings (3,297) (3,081) (3,174) (3,173)
Note 11 Subsequent events
On 1 July 2019 the Group completed the acquisition of 65 trading
stores and 29 pledge books from the Money Shop, all of which have
been integrated into the Group, having previously acquired 17 books
for GBP0.4m in the period. To facilitate this acquisition, the
Group raised GBP6.0m of additional equity funding by way of an
accelerated bookbuild Placing. The total acquisition price was
GBP11.0m, which included taking possession of GBP6.0m of pledged
assets, GBP1.0m of cash, a freehold property and trading fixtures
and fittings, together with 241 employees.
The group incurred GBP0.5m of transaction related costs in the
form of legal and professional fees in respect of the acquisition
of assets from the Money Shop which have been expensed in full in
the period.
Movement in share capital as a result of the Placing Allotted,
called up
and fully
paid
(Ordinary
Shares of
GBP0.05 each)
At 30 June 2019 37,827,501
Shares issued (placing priced at GBP3.16 and issued
4 July 2019) 1,882,925
------------
At 4 July 2019 39,710,426
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 UUURRKNAWAUR
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