TIDMMCM
RNS Number : 7928S
Motivcom PLC
29 September 2014
29 September 2014
Motivcom plc
("Motivcom" or "the Group")
Interim Results for the six months ended 30 June 2014
Motivcom plc (AIM:MCM), a leading business services group
offering incentives & loyalty expertise and meetings &
event management services to major blue-chip corporate clients, is
pleased to announce its unaudited interim results for the six
months ended 30 June 2014.
Financial Highlights
Unaudited Interim Results for the period ended 30 June 2014
* Headline operating profit from continuing operations*
decreased by 34% to GBP828,000 (2013: GBP1,246,000)
* Headline profit before tax from continuing operations
decreased by 34% to GBP819,000 (2013: GBP1,244,000)
* Headline basic earnings per share from continuing
operations++ decreased by 27% to 2.52 pence (2013:
3.47 pence)
* Operating profit from continuing operations decreased
by 35% to GBP718,000 (2013: GBP1,104,000)
* Profit before tax from continuing operations
decreased by 35% to GBP686,000 (2013: GBP1,058,000)
* Basic earnings per share from continuing operations
decreased by 28% to 2.12 pence (2013: 2.94 pence)
* Net cash of GBP3,922,000 (2013: net cash of
GBP3,838,000 after April 2013 share buyback of
GBP3,311,000)
------------------------------------------------------------------
* Operating profit from continuing operations of GBP718,000
(2013: GBP1,104,000) plus amortisation of intangibles of GBP110,000
(2013: GBP142,000)
Profit before tax from continuing activities of GBP686,000
(2013: GBP1,058,000) plus amortisation of intangibles of GBP110,000
(2013: GBP142,000) and unwinding of discount relating to contingent
consideration liability of GBP23,000 (2013: GBP44,000)
++ See reconciliation in Note 5
Commenting on the results, Colin Lloyd, Chairman of Motivcom
plc, said: "As reported on 27 June 2014 trading in the first half
of this year was below the Board's expectations. Whilst the level
of the Group's order intake remains satisfactory, the delivery of
much of this work is heavily weighted into the second half of the
year. The variation in phasing between the first and second half
has been a regularly reported characteristic of the Group's
business and this industry. The Board views this matter mainly as a
timing issue.
I am also pleased to report that, following a strategic review
of the Group's activities, an offer for the business was received
on 12 September from Sodexo Motivation Solutions UK Ltd, part of
Sodexo SA. This offer values the business at GBP1.48 per share and
the board believes it is in the best interests of the Group's
shareholders to accept. The Board is therefore recommending the
offer to shareholders."
- Ends -
For further information:
Motivcom
Sue Hocken Tel: +44 (0) 845 053
5529
sue.hocken@motivcom.com www.motivcom.com
Grant Thornton UK LLP
Philip Secrett / Salmaan Tel: +44 (0)207 383
Khawaja / Jamie Barklem 5100
philip.j.secrett@uk.gt.com www.gtuk.com
Numis Securities Limited
David Poutney/Nick Westlake Tel: +44 (0)207 383
5100
CHAIRMAN'S STATEMENT
I am pleased to report the results for Motivcom for the six
months to 30 June 2014. As reported on 27 June 2014 trading in the
first half of this year was below the Board's expectations. Whilst
the level of the Group's order intake remains satisfactory, the
delivery of much of this work is heavily weighted into the second
half of the year. The variation in phasing between the first and
second half has been a regularly reported characteristic of the
Group's business and this industry. The Board views this matter
mainly as a timing issue.
I am also pleased to report that, following a strategic review
of the Group's activities, an offer for the business was received
on 12 September from Sodexo Motivation Solutions UK Ltd, part of
Sodexo SA. This offer values the business at GBP1.48 per share and
the board believes it is in the best interests of the Group's
shareholders to accept. The Board is therefore recommending the
offer to shareholders.
Financial update
The results of the entities to be acquired by Sodexo SA have
been classified as continuing operations. The results of
Summersault Communications Limited and Zibrant Limited which were
and will be respectively acquired by their Management are
classified as discontinued operations. Additionally, discontinued
operations include a loss of GBP180,000 arising from the sale of
Summersault Communications Limited and an estimated loss of
GBP10,418,000 arising in the main from goodwill impairment on the
sale of Zibrant Limited.
The Group's gross profit from continuing operations was 1% lower
at GBP7,905,000 (2013: GBP7,971,000) whilst overheads were 5%
higher at GBP7,077,000 (2013: GBP6,725,000). This flowed through
into a headline operating profit of GBP828,000 (2013:
GBP1,246,000). Trading volumes in p&mm sales promotion were
below expectations in the first half.
The Group's gross profit from discontinued operations was 20%
lower at GBP4,623,000 (2013: GBP5,774,000). Overheads were 8% lower
at GBP4,811,000 (2013: GBP5,213,000). This flowed through into a
headline operating loss of GBP188,000 (2013: profit GBP561,000).
Trading volumes in Zibrant events were below expectations in the
first half being heavily weighted into the second half.
In light of the offer referenced above the Board does not intend
to declare an interim dividend for the half year ended 30 June
2014.
Divisional Reports
Motivation
The Motivation division has continued to deliver excellent
growth during the period with headline operating profits increasing
by 46% to GBP1,280,000 (2013: GBP876,000). New business intake from
both new and existing clients underpins this positive result and
reflects a more positive economic environment.
Motivation programme activity has benefited from both new and
existing client wins in 2014 which are at various stages of
implementation. The continued recognition by UK business that
Reward and Recognition initiatives positively impact overall
performance has resulted in an excellent pipeline of new
business.
Our voucher / gift card volumes are 7% up on the first half of
2013 and continue to benefit from the shift from paper vouchers to
plastic retailer gift cards. Improved functionality and lower
distribution costs deliver greater appeal to customers and drive
efficiencies into the operation.
Spree, our pre paid MasterCard product, has continued to grow
with transaction values in the first half reaching GBP92 million
(H1 2013: GBP88 million). Investment in cardholder marketing,
mobile solutions and product for the SME market continues to drive
growth in the cardholder base and improved profitability from
existing cardholders.
A steady stream of new business wins means that the division is
performing well and the Board anticipates that it will continue to
make good progress in the second half of 2014 and on into 2015.
Promotions
The Promotions division has performed below expectations in the
first half of 2014 with an overall headline operating loss of
GBP589,000 (2013: profit GBP201,000). Discontinued operations
contribute a headline operating loss of GBP91,000 (2013:
GBP108,000).
Employee Benefits
Growth continues to be strong within the p&mm employee
benefits division. Significant new business wins, combined with
excellent retention and new product integration for our existing
clients have resulted in a record half year. Client service levels,
product innovation and breadth of offer also continue to shine and
this has been recognised by several industry awards in recent
months.
Allsave have also performed very well and have established
several new Intermediary 'preferred partner' relationships,
resulting in a number of new client wins. In addition a new
Employee Benefits platform offering a range of sixteen services has
been developed and will be launched in the second half of 2014. The
strong reputation and relationship with existing clients, will
provide the opportunity to up-sell new products and services to
their extensive existing client base as well as attracting new
clients.
Sales Promotion
Performance in the first half of 2014 was below expectation. We
have seen promotions activity and opportunities loaded into the
second half. Whilst revenue expectations have been revised down we
have held back certain planned investment in this area that will
deliver cost savings that will help to compensate.
Events
The events division has performed below expectations in the
first half of 2014 with an overall headline operating profit of
GBP67,000 (2013: GBP805,000). Discontinued operations contribute a
headline operating loss of GBP97,000 (2013: headline operating
profit of GBP669,000).
2014 has been a year of investment and significant change in the
events environment within Motivcom. In January we launched the new
creative Zibrant LIVE! brand which has secured excellent levels of
new business which will be delivered in the second half of 2014. In
the first half of 2014 we also undertook major investment in
infrastructure updating our venues, event management, accommodation
booking, finance and HR systems, together with replacement of
certain computer hardware. The business is now in better shape and
we expect to see a significantly improved performance in the second
half of 2014.
In summary
As this is expected to be the final Chairman's report for the
Group can I thank our shareholders, our advisors, my board of
directors and the management and the staff of Motivcom for their
support over the ten years since our admission to Aim, and wish
them every success for the future.
Colin Lloyd
Chairman
26 September 2014
CONSOLIDATED INTERIM INCOME STATEMENT (UNAUDITED)
FOR THE PERIOD ENDED 30 JUNE 2014
Year ended
Six months Six months 31 December
ended ended 2013
30 30 June
June 2014 2013
Note GBP000 GBP000 GBP000
Revenue 3 40,280 35,159 77,335
Cost of sales (32,375) (27,188) (59,816)
------------- ------------- --------------
Gross profit 7,905 7,971 17,519
Administrative expenses (7,077) (6,725) (13,454)
Amortisation and impairment
of intangibles (110) (142) (283)
------------- ------------- --------------
Operating profit 3 718 1,104 3,782
Finance costs - net (32) (46) (83)
------------- ------------- --------------
Profit before income tax 686 1,058 3,699
Income tax expense (110) (210) (884)
------------- ------------- --------------
Profit for the period from
continuing operations 576 848 2,815
(Loss)/profit for the year
from discontinued operations 8 (10,598) 357 (894)
(Loss)/profit for the period (10,022) 1,205 1,921
============= ============= ==============
Attributable to:
Equity holders of the Company (10,022) 1,205 1,921
============= ============= ==============
Earnings per share for
profit attributable to
the equity holders of the
Company during the year
(expressed in pence)
Continuing operations -
basic 5 2.12 2.94 10.05
============= ============= ==============
Continuing operations -
diluted 5 2.10 2.92 9.98
============= ============= ==============
Discontinued operations
- basic 5 (38.95) 1.24 (3.19)
============= ============= ==============
Discontinued operations-
diluted 5 (38.62) 1.23 (3.17)
============= ============= ==============
CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
FOR THE PERIOD ENDED 30 JUNE 2014
Six months Six months
ended ended Year ended
30 30 31 December
June 2014 June 2013 2013
GBP000 GBP000 GBP000
(Loss)/profit for the period (10,022) 1,205 1,921
Other comprehensive income:
Deferred tax on property - - 52
------------- ------------- -------------
Other comprehensive income,
net of tax - - 52
------------- ------------- -------------
Total comprehensive income
for the period (10,022) 1,205 1,973
============= ============= =============
Attributable to:
Equity holders of the Company (10,022) 1,205 1,973
============= ============= =============
CONSOLIDATED INTERIM BALANCE SHEET (UNAUDITED)
AT 30 JUNE 2014
At 31
At 30 At 30 December
June June 2013
Note 2014 2013 GBP000
GBP000 GBP000
ASSETS
Non-current assets
Property, plant and equipment 4,077 4,490 4,433
Intangible assets 7 9,166 23,447 22,149
13,243 27,937 26,582
--------- --------- -----------
Current assets
Inventories 521 822 798
Trade and other receivables 14,744 29,782 24,241
Cash and cash equivalents 7,612 7,721 10,188
22,877 38,325 35,227
--------- --------- -----------
Assets included in disposal
group held for sale 8 11,622 - -
--------- --------- -----------
Total assets 47,742 66,262 61,809
========= ========= ===========
EQUITY
Capital and reserves attributable
to the Company's equity
holders
Share capital 9 140 140 140
Share premium account 9,944 9,944 9,944
Own shares (1,016) (1,073) (1,016)
Capital redemption reserve 9 15 15 15
Other reserves 75 75 75
Retained earnings (138) 10,599 10,872
Total equity 9,020 19,700 20,030
========= ========= ===========
LIABILITIES
Non-current liabilities
Borrowings - 1,690 1,594
Deferred income tax liabilities 444 294 362
444 1,984 1,956
--------- --------- -----------
Current liabilities
Trade and other payables 25,710 41,573 36,938
Current income tax liabilities 102 362 245
Borrowings 3,690 2,193 2,193
Provisions 470 450 447
29,972 44,578 39,823
--------- --------- -----------
Liabilities included in
disposal group held for
sale 8 8,306 - -
--------- --------- -----------
Total liabilities 38,722 46,562 41,779
========= ========= ===========
Total equity and liabilities 47,742 66,262 61,809
========= ========= ===========
CONSOLIDATED INTERIM CASH FLOW STATEMENT (UNAUDITED)
FOR THE PERIOD ENDED 30 JUNE 2014
Year
Six months Six months ended
ended ended 31 December
30 30 2013
June 2014 June 2013 GBP000
Note GBP000 GBP000
Cash flows from operating
activities
Cash generated from/(used
in) operations 11 1,594 (3,157) 636
Interest paid (43) (51) (97)
Income tax paid (220) (219) (752)
------------- ------------- --------------
Net cash generated from/(used
in) operating activities 1,331 (3,427) (213)
------------- ------------- --------------
Cash flows from investing
activities
Acquisition of subsidiary,
net of cash acquired and
dividends due to former
shareholders 8 - (308) (309)
Purchases of property,
plant and equipment (PPE) (381) (169) (401)
Interest received 37 32 68
------------- ------------- --------------
Net cash used in investing
activities (344) (445) (642)
------------- ------------- --------------
Cash flows from financing
activities
Repayment of borrowings (100) 1,900 1,800
Payments to acquire own
shares 9 - (3,347) (3,364)
Proceeds from issue of
shares - 10 67
Dividends paid (980) (903) (1,393)
------------- ------------- --------------
Net cash used in financing
activities (1,080) (2,340) (2,890)
------------- ------------- --------------
Net decrease in cash (93) (6,212) (3,745)
Cash at beginning of period 10,188 13,933 13,933
------------- ------------- --------------
10,095 7,721 10,188
Cash held for sale in disposal (2,483) - -
group
Cash at end of period 7,612 7,721 10,188
============= ============= ==============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
FOR THE PERIOD ENDED 30 JUNE 2014
Share Share Own Capital Other Retained Total
capital premium shares redemption reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
January 2013 155 9,944 (1,083) - 75 13,696 22,787
Dividends paid - - - - - (903) (903)
Share based
payments - - - - - 1 1
Purchase and
cancellation
of own shares (15) - - 15 - (3,347) (3,347)
Disposed of
on exercise
of options - - 10 - - - 10
Deferred tax
on equity share
based payments - - - - - (53) (53)
--------- --------- -------- ------------ ---------- ---------- ----------
Transactions
with owners (15) - 10 15 - (4,302) (4,292)
--------- --------- -------- ------------ ---------- ---------- ----------
Profit for the
period - - - - - 1,205 1,205
Other comprehensive
income:
Deferred tax
on property - - - - - - -
--------- --------- -------- ------------ ---------- ---------- ----------
Total comprehensive
income for the
period - - - - - 1,205 1,205
--------- --------- -------- ------------ ---------- ---------- ----------
At 30 June 2013 140 9,944 (1,073) 15 75 10,599 19,700
Dividends paid - - - - - (490) (490)
Share based
payments - - - - - 7 7
Disposed of
on exercise
of options - - 57 - - - 57
Purchase and
cancellation
of own shares - - - - - (17) (17)
Deferred tax
on equity share
based payments - - - - - 5 5
--------- --------- -------- ------------ ---------- ---------- ----------
Transactions
with owners - - 57 - - (495) (438)
--------- --------- -------- ------------ ---------- ---------- ----------
Profit for the
period - - - - - 716 716
Other comprehensive
income:
* Deferred tax on property - - - - - 52 52
--------- --------- -------- ------------ ---------- ---------- ----------
Total comprehensive
income for the
period - - - - - 768 768
--------- --------- -------- ------------ ---------- ---------- ----------
Balance at 31
December 2013 140 9,944 (1,016) 15 75 10,872 20,030
Dividends paid - - - - - (980) (980)
Share based
payments - - - - - 7 7
Deferred tax
on equity share
based payments - - - - - (15) (15)
--------- --------- -------- ------------ ---------- ---------- ----------
Transactions
with owners - - - - - (988) (988)
--------- --------- -------- ------------ ---------- ---------- ----------
Loss for the
period - - - - - (10,022) (10,022)
Other comprehensive
income:
Deferred tax
on property - - - - - - -
--------- --------- -------- ------------ ---------- ---------- ----------
Total comprehensive
income for the
period - - - - - (10,022) (10,022)
At 30 June 2014 140 9,944 (1,016) 15 75 (138) 9,020
========= ========= ======== ============ ========== ========== ==========
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2014
1 General information
Motivcom plc ("the Company") and its subsidiaries (together
"Motivcom plc" or "the Group") are involved in (1) the development
and administration of third party motivation and incentive
programmes (2) the provision of incentive travel, live events and
venue finding and (3) the provision of trade and consumer sales
promotions, employee benefits products and communication
programmes.
The Company is a public limited liability company incorporated
and domiciled in England. The address of its registered office is
Avalon House, Breckland, Linford Wood, Milton Keynes MK14 6LD. The
Company has its primary and only listing on Aim, London Stock
Exchange's international market for smaller growing companies.
These unaudited condensed consolidated interim financial
statements (the interim financial statements) have been approved
for issue by the Board of Directors on 26 September 2014.
2 Basis of preparation
These interim financial statements of Motivcom plc are for the
six months ended 30 June 2014. They have been prepared in
accordance with IAS 34, Interim Financial Reporting. They do not
constitute statutory accounts as defined in Section 435 of the
Companies Act 2006. They should be read in conjunction with the
consolidated financial statements of the Group for the year ended
31 December 2013 which are available on the Group's website
(www.motivcom.com) and have been filed with The Registrar of
Companies. The auditors report on those financial statements was
unqualified and did not contain a statement made under Section
498(3) of the Companies Act 2006.
These interim financial statements have been prepared in
accordance with the accounting policies adopted in the last
financial statements for the year ended 31 December 2013.
The accounting policies have been applied consistently
throughout the Group in preparing these interim financial
statements.
The financial statements are prepared on a going concern basis.
In considering going concern, the directors have reviewed the
Group's future cash requirements and earnings projections. The
directors believe these forecasts have been prepared on a prudent
basis and have also considered the impact of a range of potential
changes to trading performance. The directors have concluded that
the Group should be able to operate within its current facilities
and comply with its banking covenants for the foreseeable future
and therefore believe it is appropriate to prepare the financial
statements of the Group on a going concern basis. This is supported
by the Group's liquidity position at 30 June 2014.
The Group's financial risk management policies are described in
its financial statements for the year ended 31 December 2013.
3 Segment Information
At 30 June 2014 the Group is organised into three main operating
segments - (1) development and administration of third party
motivation and incentive programmes ("Motivation") - (2) the
provision of incentive travel, live events and venue finding
("Events") - (3) trade and consumer sales promotions, employee
benefit products and communications ("Promotions"). Unallocated
costs represent corporate and share-based payment expenses.
The segment results for the six months ended 30 June 2014 are as
follows:
Motivation Events Promotions Unallocated Group
GBP000 GBP000 GBP000 GBP000 GBP000
Continuing operations
Revenue from external
clients 18,664 7,888 13,728 - 40,280
929 2,467 81 (3,477) -
----------- -------- ----------- ------------ ---------
Inter-segment revenues
----------- -------- ----------- ------------ ---------
Total revenue 19,593 10,355 13,809 (3,477) 40,280
=========== ======== =========== ============ =========
Gross profit 3,497 1,036 3,372 - 7,905
Administrative expenses (2,217) (872) (3,870) (118) (7,077)
---------
Headline operating
profit/(loss) 1,280 164 (498) (118) 828
=========== ======== =========== ============
Amortisation and
impairment of intangibles (110)
Operating profit 718
Net interest expense (32)
Profit before tax
- Continuing 686
=========
Discontinued operations
Total revenue - 8,035 218 - 8,253
=========== ======== =========== ============ =========
Gross profit - 4,457 166 - 4,623
Administrative expenses - (4,554) (257) - (4,811)
---------
Headline operating
loss - (97) (91) - (188)
=========== ======== =========== ============
Amortisation and
impairment of intangibles (10,230)
Loss on disposal (180)
---------
Operating loss (10,598)
Net interest expense -
Loss before tax -
Discontinued (10,598)
=========
The segment results for the six months ended 30 June 2013 are as
follows:
Motivation Events Promotions Unallocated Group
GBP000 GBP000 GBP000 GBP000 GBP000
Continuing Operations
Revenue from external
clients 15,479 7,397 12,283 - 35,159
2,108 1,676 743 (4,527) -
----------- -------- ----------- ------------ --------
Inter-segment revenues
----------- -------- ----------- ------------ --------
Total revenue 17,587 9,073 13,026 (4,527) 35,159
=========== ======== =========== ============ ========
Gross profit 3,001 974 3,996 - 7,971
Administrative expenses (2,125) (838) (3,687) (75) (6,725)
--------
Headline operating
profit 876 136 309 (75) 1,246
=========== ======== =========== ============
Amortisation and
impairment of intangibles (142)
--------
Operating profit 1,104
Net interest expense (46)
Profit before tax
- Continuing 1,058
========
Motivation Events Promotions Unallocated Group
GBP000 GBP000 GBP000 GBP000 GBP000
Discontinued operations
Total revenue - 10,404 750 - 11,154
============ ======== =========== ============ ========
Gross profit - 5,221 553 - 5,774
Administrative expenses - (4,552) (661) - (5,213)
--------
Headline operating
profit/(loss) - 669 (108) 561
============ ======== =========== ============
Amortisation and
impairment of intangibles (60)
Operating profit 501
Net interest expense -
Profit before tax
- Discontinued 501
========
The segment results for the year ended 31 December 2013 are as
follows:
Motivation Events Promotions Unallocated Group
GBP000 GBP000 GBP000 GBP000 GBP000
Continuing operations
Revenue from external
clients 33,270 15,801 27,962 302 77,335
3,422 377 67 (3,866) -
----------- -------- ----------- ------------ ---------
Inter-segment revenues
----------- -------- ----------- ------------ ---------
Total revenue 36,692 16,178 28,029 (3,564) 77,335
=========== ======== =========== ============ =========
Gross profit 6,903 1,984 8,330 302 17,519
Administrative expenses (4,307) (1,677) (7,282) (188) (13,454)
---------
Headline operating
profit 2,596 307 1,048 114 4,065
=========== ======== =========== ============
Amortisation and
impairment of intangibles (283)
---------
Operating profit 3,782
Net interest expense (83)
Profit before tax
- Continuing 3,699
=========
Discontinued operations
Total revenue - 17,276 1,379 - 18,655
=========== ======== =========== ============ =========
Gross profit - 10,248 950 - 11,198
Administrative expenses - (9,663) (1,225) - (10,888)
---------
Headline operating
profit/(loss) - 585 (275) - 310
=========== ======== =========== ============
Contingent consideration
adjustment 25
Amortisation and
impairment of intangibles (1,217)
Operating loss (882)
Net interest expense -
Loss before tax -
Discontinued (882)
=========
IFRS 8 requires that an entity reports a measure of assets and
liabilities for each reportable segment only if such an amount is
regularly provided to the Chief Operating Decision Maker. As no
such amounts are regularly provided to the Chief Operating Decision
Maker, segment assets and liabilities are not disclosed.
The Group's business is divided into two main streams -
Incentives and Loyalty ("Incentives") and Meetings and Event
Management ("Meetings"). Incentives comprises the segment results
of Motivation and Promotions but also includes the motivation
business of AYMTM Limited included in Events. Meetings comprises
the segment results of Events less the motivation business of AYMTM
Limited. The Group recognises that this additional information
enables its shareholders to better appreciate the nature of its
business.
The segment results for the six months ended 30 June 2014 are as
follows:
Incentives Meetings Unallocated Group
GBP000 GBP000 GBP000 GBP000
Continuing Operations
Revenue from external
clients 36,591 3,689 - 40,280
1,010 2,467 (3,477) -
----------- --------- ------------ ---------------
Inter-segment revenues
----------- --------- ------------ ---------------
Total revenue 37,601 6,156 (3,477) 40,280
=========== ========= ============ ===============
Gross profit 7,402 503 - 7,905
Administrative expenses (6,568) (391) (118) (7,077)
---------------
Headline operating profit 834 112 (118) 828
=========== ========= ============
Amortisation and impairment
of intangibles (110)
Operating profit 718
Net interest expense (32)
Profit before tax -
Continuing 686
===============
Discontinued Operations
Total revenue 218 8,035 - 8,253
=========== ========= ============ ===============
Gross profit 166 4,457 - 4,623
Administrative expenses (257) (4,554) - (4,811)
---------------
Headline operating loss (91) (97) - (188)
=========== ========= ============
Amortisation and impairment
of intangibles (10,230)
Loss on disposal of
subsidiary (180)
---------------
Operating loss (10,598)
Net interest expense -
Loss before tax - Discontinued (10,598)
===============
The segment results for the six months ended 30 June 2013 are as
follows:
Incentives Meetings Unallocated Group
GBP000 GBP000 GBP000 GBP000
Continuing Operations
Revenue from external
clients 32,124 3,035 - 35,159
2,851 1,676 (4,527) -
----------- --------- ------------ --------
Inter-segment revenues
----------- --------- ------------ --------
Total revenue 34,975 4,711 (4,527) 35,159
=========== ========= ============ ========
Gross profit 7,639 332 - 7,971
Administrative expenses (6,286) (364) (75) (6,725)
--------
Headline operating profit 1,353 (32) (75) 1,246
=========== ========= ============
Amortisation and impairment
of intangibles (142)
--------
Operating profit 1,104
Net interest expense (46)
Profit before tax -
Continuing 1,058
========
Discontinued Operations
Total revenue 750 10,404 - 11,154
=========== ========= ============ ========
Gross profit 553 5,221 - 5,774
Administrative expenses (661) (4,552) - (5,213)
--------
Headline operating (loss)/profit (108) 669 - 561
=========== ========= ============
Amortisation and impairment
of intangibles (60)
--------
Operating profit 501
Net interest expense -
Profit before tax -
Discontinued 291
========
The segment results for the year ended 31 December 2013 are as
follows:
Incentives Meetings Unallocated Group
GBP000 GBP000 GBP000 GBP000
Continuing Operations
Revenue from external
clients 70,920 6,113 302 77,335
3,489 377 (3,866) -
----------- --------- ------------ ---------
Inter-segment revenues
----------- --------- ------------ ---------
Total revenue 74,409 6,490 (3,564) 77,335
=========== ========= ============ =========
Gross profit 16,480 737 302 17,519
Administrative expenses (12,540) (726) (188) (13,454)
---------
Headline operating profit 3,940 11 114 4,065
=========== ========= ============
Amortisation and impairment
of intangibles (283)
---------
Operating profit 3,782
Net interest expense (83)
Profit before tax - Continuing 3,699
=========
Incentives Meetings Unallocated Group
GBP000 GBP000 GBP000 GBP000
Discontinued Operations
Total revenue 1,379 17,276 - 18,655
=========== ========= ============ =========
Gross profit 950 10,248 - 11,198
Administrative expenses (1,225) (9,663) - (10,888)
---------
Headline operating (loss)/profit (275) 585 - 310
=========== ========= ============
Contingent consideration
adjustment 25
Amortisation and impairment
of intangibles (1,217)
---------
Operating loss (882)
Net interest expense -
Loss before tax - Discontinued (882)
=========
4 Income tax expenses
Six months Six months
ended ended
30 30 Year ended
June 2014 June 31 December
GBP000 2013 2013
GBP000 GBP000
Current tax (continuing activities) 92 294 885
Overprovision of tax for prior
year - - 21
Deferred tax (continuing activities) 18 (84) (22)
110 210 884
============= ============= =============
5 Earnings per share and dividends
Basic
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Year
Six months Six months ended
ended ended 31 December
30 30 2013
June 2014 June 2013 GBP000
GBP000 GBP000
Profit attributable to equity
holders of the company
Continuing operations 576 848 2,815
------------- ------------- --------------
Discontinued operations (10,598) 357 (894)
------------- ------------- --------------
Weighted average number of
ordinary shares in issue (thousands) 27,212 28,829 28,002
Basic earnings per share (in pence)
Continuing operations 2.12 2.94 10.05
======== ===== =======
Discontinued operations (38.95) 1.24 (3.19)
======== ===== =======
Diluted
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all contracted dilutive potential ordinary shares.
The Company has only one category of dilutive potential ordinary
shares, share options.
The calculation is performed for the share options to determine
the number of shares that could have been acquired at fair value
(determined as the average annual market share price of the
Company's shares) based on the monetary value of the subscription
rights attached to outstanding share options and taking account of
the yet unexpensed share based payment charge relating to those
options. The number of shares calculated as above is compared with
the number of shares that would have been issued assuming the
exercise of the share options. Tranches two to four of the options
granted to C T Lloyd have been excluded from this calculation as
all the conditions attaching to the proposed options had not been
met at 30 June 2014.
Year ended
Six months Six months 31 December
ended ended 2013
30 30 GBP000
June 2014 June 2013
GBP000 GBP000
Profit attributable to equity
holders of the company
Continuing operations 576 848 2,815
------------- ------------- --------------
Discontinued operations (10,598) 357 (894)
------------- ------------- --------------
Weighted average number of
ordinary shares in issue (thousands) 27,212 28,829 28,002
Adjustment for share options
(thousands) 232 178 212
------------- ------------- --------------
Weighted average number of
ordinary shares for diluted
earnings per share (thousands) 27,444 29,007 28,214
------------- ------------- --------------
Diluted earnings per share (in pence)
Continuing operations 2.10 2.92 9.98
======== ===== =======
Discontinued operations (38.62) 1.23 (3.17)
======== ===== =======
Headline basic
Headline basic earnings per share is calculated by dividing the
profit attributable to equity holders of the Company plus the
amortisation of intangible assets by the weighted average number of
ordinary shares in issue during the period.
Year ended
Six months Six months 31 December
ended ended 2013
30 30 GBP000
June 2014 June 2013
GBP000 GBP000
Continuing operations
Profit attributable to equity
holders of the Company 576 848 2,815
Amortisation of intangibles
(after deduction of tax) 86 108 217
Unwinding of discount relating
to contingent consideration
liability (after deduction
of tax) 23 44 67
------------- ------------- --------------
Headline profit attributable
to equity holders of the
Company - Continuing operations 685 1,000 3,099
------------- ------------- --------------
Discontinued operations
(Loss)/profit attributable
to equity holders of the Company (10,598) 357 (894)
Amortisation of intangibles
(after deduction of tax) 10,216 46 1,180
Unwinding of discount relating
to contingent consideration - - -
liability (after deduction
of tax)
Contingent consideration adjustment - - (25)
Loss on disposal of Summersault 180 - -
Communications Limited
--------- ---- ------
Headline profit/(loss) attributable
to equity holders of the
Company - Discontinued operations (202) 403 261
--------- ---- ------
Weighted average number of
ordinary shares in issue (thousands) 27,212 28,829 28,002
Headline basic earnings per share (in pence)
Continuing operations 2.52 3.47 11.07
======= ===== =======
Discontinued operations (0.74) 1.40 (0.93)
======= ===== =======
Dividends
During the first six months of 2014 Motivcom plc paid a final
dividend in respect of 2013 of GBP979,636 to its equity
shareholders (2013: GBP903,000). This represents a payment of 3.60
pence per share (2013: 3.00 pence).
6 Share-based payments
The Group has six contracted share option schemes, as disclosed
in the Group's most recent financial statements. The Group has not
entered into a new Sharesave scheme in the period. The following
options have been valued in accordance with the provisions of IFRS
2.
Date
of original Number Option Vesting Life
Scheme grant of options price conditions of Fair
option Value
EMI Option Scheme 21/11/2005 26,455 GBP0.945 3 Years 10 GBP0.11
Years
Sharesave Scheme 02/06/2011 49,772 GBP1.14 3 Years 3 Years GBP0.42
7
Sharesave Scheme 01/06/2012 227,293 GBP0.745 3 Years 3 Years GBP0.14
8
Sharesave Scheme 03/06/2013 174,974 GBP0.855 3 Years 3 years GBP0.08
9
CSOP 23/01/2009 60,000 GBP0.33 3 Years 10 GBP0.11
Years
Each
GBP20m
growth
C T Lloyd Option in market 10
Scheme 21/06/2007 617,425 GBP0.005 value Years GBP0.12
The fair value of services received in return for share options
granted to employees is measured by reference to the fair value of
share options granted. The estimate of fair value of the services
received is measured based on a binomial lattice model for the EMI,
CSOP and Sharesave Schemes and a Monte Carlo model for the C T
Lloyd Option Scheme. The vesting period is used as an input to
those models.
The following additional assumptions were used for the EMI
Option Schemes and the CT Lloyd Option Scheme:
- Expected volatility of 24% based on the average volatility of
the Company since flotation in August 2004
- A dividend yield of 1.20%
- Risk free interest rate of 5.31%
The following additional assumptions were used for CSOP:
- Expected volatility of 62% based on the average volatility of
the Company since flotation in August 2004
- A dividend yield of 4.79%
- Risk free interest rate of 2.49%
The following additional assumptions were used for Sharesave
Scheme 7:
- Expected volatility of 62% based on the average volatility of
the Company since flotation in August 2004
- A dividend yield of 2.32%
- Risk free interest rate of 1.06%
The following additional assumptions were used for Sharesave
Scheme 8:
- Expected volatility of 38% based on the average volatility of
the Company since flotation in August 2004
- A dividend yield of 4.37%
- Risk free interest rate of 0.34%
The following additional assumptions were used for Sharesave
Scheme 9:
- Expected volatility of 35% based on the average volatility of
the Company since flotation in August 2004
- A dividend yield of 4.00%
- Risk free interest rate of 0.71%
7 Intangible assets
Year ended
Six months Six months 31 December
ended ended 2013
30 30 GBP000
June 2014 June 2013
GBP000 GBP000
Goodwill
Balance at beginning of period 20,939 21,999 21,999
Amortisation and impairment (9,817) - (1,060)
Reclassified as asset held (2,643) - -
for disposal (note 8)
Balance at end of period 8,479 21,999 20,939
============= ============= ==============
Other intangibles
Balance at beginning of period 1,210 1,650 1,650
Amortisation and impairment (523) (202) (440)
Balance at end of period 687 1,448 1,210
============= ============= ==============
Total
Balance at beginning of period 22,149 23,649 23,649
Amortisation and impairment (10,340) (202) (1,500)
Reclassified as asset held (2,643) - -
for disposal
Balance at end of period 9,166 23,447 22,149
============= ============= ==============
An impairment of intangibles of GBP10,054,000 has been
recognised in connection with the proposed disposal of Zibrant (see
note 8) after measurement at market value less disposal costs.
8 Acquisitions and disposals
The Group did not make any acquisitions during the period, nor
in the six months ended 30 June 2013.
On 11 May 2014 the Group completed the sale of its subsidiary
Summersault Communications Limited to its management. No
consideration was payable. On 12 September 2014 the Group announced
that it had entered into an agreement for the sale of its
subsidiary Zibrant Limited to its management for consideration of
GBP2,924,000. The Group's directors consider that both of these
businesses meet the criteria under IFRS 5 for being classified as
discontinued operations, and the assets and liabilities of Zibrant
Limited have been classified as a disposal group held for sale. The
results from the discontinued operations of Summersault
Communications Limited and Zibrant Limited included in the income
statement are set out below:
Year ended
Six months Six months 31 December
ended ended 2013
30 30 GBP000
June 2014 June 2013
GBP000 GBP000
Revenue 8,253 11,154 18,655
Cost of sales (3,630) (5,380) (7,457)
------------- ------------- --------------
Gross profit 4,623 5,774 11,198
Administrative expenses (4,811) (5,213) (10,888)
Contingent consideration adjustment - - 25
Amortisation and impairment
of intangibles (10,230) (60) (1,217)
------------- ------------- --------------
Operating (loss)/profit on
discontinued operations (10,418) 501 (882)
Taxation on discontinued operations - (144) (12)
------------- ------------- --------------
(Loss)/profit after taxation
on discontinued operations (10,418) 357 (894)
------------- ------------- --------------
The net loss on the disposal of Summersault Communications
Limited is set out below:
Year ended
Six months Six months 31 December
ended ended 2013
30 30 GBP000
June 2014 June 2013
GBP000 GBP000
Consideration on disposal - - -
Net assets on disposal (152) - -
Other disposal costs (28) - -
------------- ------------- --------------
Loss on business disposal before (180) - -
taxation
Taxation on business disposal - - -
------------- ------------- --------------
Loss on business disposal after (180) - -
taxation
------------- ------------- --------------
The total result for the year after taxation on the discontinued
operations of Summersault Communications Limited and Zibrant
Limited is set out below:
(Loss)/profit after taxation
on discontinued operations (10,418) 357 (894)
Loss on business disposal after (180) - -
taxation
--------- ---- ------
(Loss)/profit for the year
from discontinued operations (10,598) 357 (894)
--------- ---- ------
The assets and liabilities classified under the disposal group
for Zibrant Limited are set out below:
Year ended
Six months Six months 31 December
ended ended 2013
30 30 GBP000
June 2014 June 2013
GBP000 GBP000
Assets classified as disposal
group
Goodwill 2,643 - -
Property, plant and equipment 440 - -
Current assets 8,574 - -
------------- ------------- --------------
Total assets classified as 11,622 - -
disposal group
------------- ------------- --------------
Liabilities classified as disposal
group
Current liabilities 8,306 - -
------------- ------------- --------------
Total liabilities classified 8,306 - -
as disposal group
------------- ------------- --------------
Net assets of disposal group 3,316 - -
------
9 Share Capital
There were no changes to share capital in the period. On 15
April 2013 the Company purchased 3,010,181 of its own shares at a
price per share of 110 pence for a total cost of GBP3,311,000 by
means of a Tender Offer to all shareholders. Additionally, costs of
GBP53,000 were incurred. The shares were immediately cancelled on
15 April 2013 and GBP15,051 transferred from share capital to
capital redemption reserve.
10 Fair value hierarchy
IFRS 7 Improving Disclosures about Financial Instruments
requires the Group to present certain information about financial
instruments measured at fair value in the balance sheet. At 30 June
2013 and 30 June 2014 the only financial instruments measured at
fair value through profit and loss were contingent consideration.
The fair value is estimated using a valuation technique.
Significant inputs into the model are based on management's
assumptions of the cash outflow and appropriate discount rates. The
fair value measurements in respect of deferred consideration are
classified as level 3 in the fair value hierarchy as inputs for the
asset or liability are not based on observable market data
(unobservable inputs).
The losses (after deduction of tax) recognised in profit and
loss account are disclosed in the table for headline basic earnings
per share in Note 5.
11 Cash generated from operations
Six months Six months
ended ended Year ended
30 30 31 December
June 2014 June 2013 2013
GBP000 GBP000 GBP000
Profit before income
tax from continuing
operations 686 1,058 3,699
Adjustments for:
- depreciation 178 186 357
- loss on disposal of
property, plant and
equipment - 3 8
- net interest payable 32 46 83
- share based payments 7 1 8
- amortisation and impairment
of intangibles 110 142 283
- write-back of deferred
consideration - - (25)
Changes in working capital
(excluding the effects
of acquisitions and
exchange differences
on consolidation):
- inventories 277 (79) (55)
- trade and other receivables 3,441 (7,307) (1,766)
- trade and other payables (2,888) 2,118 (2,517)
------------- ------------- -------------
Net cash from/(used
in) continuing operations 1,843 (3,832) 75
Net cash (used in)/from
discontinued operations (249) 675 561
Cash generated/(used
in) operations 1,594 (3,157) 636
============= ============= =============
This information is provided by RNS
The company news service from the London Stock Exchange
END
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