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Be Heard Group PLC

Be Heard Group PLC - Half-year Results

RNS Number : 2968Q
Be Heard Group PLC
11 September 2017
 

 

Be Heard Group plc

("Be Heard", the "Company" or the "Group")

 

Half year results for the period to 30 June 2017

 

Strong revenue growth; 85% visibility on 2017 revenue; underpins confidence for full year expectations.

 

v Strong revenue growth, which is expected to accelerate further in H2 as new business wins feed through

Good organic growth at longest-serving partner companies, agenda21 and MMT Digital, with net revenue increasing 21% and 44% respectively

v Proof of concept firmly established 

23% of H1 revenue from clients served by two or more Be Heard companies

Eight clients now served by two or more companies within the Group with our first client working with three Group companies

v Progress with buy-and-build strategy

£2.1m raised to acquire Freemavens, a leading-edge analytics and insight consultancy, in February 2017

v Strong new business performance across the Group with 25 new client wins including Addison Lee, Coca-Cola, GSK, Unilever Food Solutions and Vodafone Enterprise

v Half year profit constrained by investment to deliver growth and headwinds at Kameleon

Increased headcount at MMT to support growth

Kameleon loss making in H1; expected to return to profit in the second half

 

Headline Financial results

 


HY 2017

HY 2016


£m

£m

Billings

16.0

14.7

Net Revenue      

8.3

3.3

Trading EBITDA1

1.2

0.7

Operating Profit (adjusted)2

0.1

0.0

Loss per share (diluted)     

(0.3)p

(0.6)p

 

1.   represents Operating Profit (adjusted) prior to central group costs.

2.   adjusted to exclude depreciation, amortisation and impairment of intangibles, acquisition & listing costs, share based payments and holiday pay accrual.

 

Current trading

v Continuing strong new business run.  Additional assignments from existing clients including Axelos, ComparetheMarket, Hodder, Unilever and Vodafone plus new client wins including Autotrader and Pittsburgh Paint Group

v Momentum and visibility on revenues underpins confidence for the full year

Over 85% of forecast 2017 revenue billed or confirmed

 

Peter Scott, Executive Chairman of Be Heard, said:

 

"Be Heard enjoyed exceptional revenue growth in the first half.  This reflects two long-term growth drivers:  first, increasing client demand for connected marketing services as digital disruption accelerates;  second, our pure play digital capabilities which are designed to help brands and marketers meet today's challenges across the customer journey.  While two factors held back profitability in the short term - increasing headcount at MMT to support growth and headwinds at Kameleon - momentum within the Group continues to be strong and we expect revenue in the second half of the year to be considerably above the first half as new business wins feed through.

 

"Current visibility on revenues and progress underpins the Board's confidence that the Group will deliver full year results in line with market expectations and strong run-rate profitability by the year end.  Since our listing in November 2015 we have acquired four exceptionally-talented businesses and continue to explore opportunities to broaden our offering to clients."

 

Be Heard Group plc

+44 20 3828 6269

Peter Scott, Executive Chairman 


Robin Price, Chief Financial Officer & Chief Operating Officer


N+1 Singer 

+44 20 7496 3000

Mark Taylor / Lauren Kettle


Dowgate

+44 20 3903 7715

James Serjeant


Bell Pottinger (Financial PR)

+44 20 3772 2557 / +44 20 3772 2591

Liz Morley / Jamie Ricketts / Celine MacDougall




Notes to Editors:

 

About Be Heard Group plc

 

Be Heard Group plc (AIM:BHRD) is a digital marketing services group helping clients solve the challenges they face in the connected world. To achieve this, we acquire and connect exceptionally-talented companies, providing management experience, access to deeper resources and a strong platform for growth.

 

Our four partner companies today are:

 

Agenda 21 Digital Limited ('agenda21'), a digital media and analytics agency, which became a partner on admission in November 2015 www.agenda21digital.com

 

MMT Limited ('MMT Digital'), a user experience ("UX"), design and build agency, which became a partner in May 2016 www.mmtdigital.co.uk

 

Kameleon Worldwide Limited ('Kameleon'), a content marketing agency, which became a partner in December 2016 www.kameleon.co.uk

 

Freemavens Limited ('Freemavens'), a data-driven analytics and insight consultancy, which became a partner in February 2017 www.freemavens.com

 

www.beheardgroup.com

@Be_Heard_Group

 

 

EXECUTIVE CHAIRMAN'S STATEMENT

 

Less than two years into the Be Heard journey, we are particularly pleased with our partners' success in collaborating to deliver simpler, faster and more powerful ways to connect with customers, encouraging an increasing number of our clients to work with two or more of our companies.

 

Our thesis has always rested on two key trends:  first, the increasing complexity of the digital customer journey requiring new ideas and approaches; second, the growing demand for connected solutions which help clients maximise their return on investment from digital marketing.  Eight clients - delivering 23% of H1 revenue - have now made the decision to work with two or more of our companies.  We believe that this trend will continue as we add more skills and resources to the Group.

 

To aid and accelerate cross Group client relationships we appointed Richard Costa D'Sa as Chief Growth Officer in June 2017, reflecting our ambition of growing both our and our clients' businesses by delivering quicker, smarter, more cost-efficient and broader solutions.  Richard was previously Global CEO at Deep Focus, a digital creative agency, prior to which he was one of the founding team at Deep Focus' predecessor, Jam.

 

At board level, we appointed David Morrison as Non-Executive Director on 2 August 2017.  David brings a wealth of experience in identifying and developing early stage growth companies. 

 

Operations review

We now have four operating companies and over 240 digital specialists in the Group.  I was particularly pleased that, from a standing start less than two years ago, Be Heard generates 23% of its revenue from cross-Group work - meaning at least two of our companies.  We see this as affirmation of our business model, and are delighted with this early 'proof of concept'. 

 

agenda21 

Be Heard's digital media planning and buying agency performed well in H1. Net revenue increased by 21% over the prior year to £3.0 million.  The company rolled out a new in-house AI-powered programmatic buying solution and soft-launched Content Compass, its new proprietary product enabling companies to optimise search and website performance.  New client wins include Addison Lee, BDO, Brakes Brothers and Vodafone Enterprise (alongside MMT).  agenda21's transparent approach to media buying, investment in analytics and recent senior appointments mean that it is well positioned for growth in the second half.

 

MMT Digital

The Group's UX, design and build operation has enjoyed rapid growth, driven by its expansion into digital transformation and UX and increasing collaboration with agenda21.  Net revenue in H1 increased by 44% to £4.2 million over the prior year.  New client wins include Forestry Commission, Gowling WLG and Pittsburgh Paint Group and Save the Children with additional projects from Axelos, ComparetheMarket and Hodder and Vodafone.  Having started the year with 65 talented people, the company is on track to end the year with 125 or more.  While managing this level of growth has inevitably brought challenges, MMT has continued to deliver high quality work on time and on budget - one highlight being the development and launch for Vodafone of Tobi, the first AI-powered chatbot for a UK telecoms company.  MMT has an excellent new business pipeline going into the second half and 2018.

 

Kameleon

Be Heard's content agency had a difficult first half.  As noted in our trading update on 2 August 2017, two clients suspended activity and the snap election brought all Government work to an abrupt halt - though this has now restarted.  Added to this Steve Butterworth, COO, was incapacitated by injury for some months.  This severely suppressed activity in the first half, but we are encouraged by their response and resilience with a number of new client wins in recent weeks including The AA, Autotrader, Britain is Great and Vodafone and a growing new business pipeline.  We expect Kameleon to return to profitability in the second half.

 

Freemavens

Be Heard's data and analytics business has flourished since we acquired it. Net revenue in H1 was up 20% to £1.0 million versus the same period a year earlier. Freemavens secured a major contract with Unilever, the company's largest client, for its People Data Centre (PDC) to provide consumer and market insights through an onsite team of analysts. The company won several new clients including GSK, Unilever Food Services and Pepsi Lipton.  It also launched Trend Rider, a new proprietary tool enabling early identification of emerging trends, which has a wide range of applications from market analysis to new product development.

 

Group data and analytics capabilities

We see data and analytics underpinning the Be Heard proposition: Freemavens and agenda21 are collaborating with our development team and other partner companies to develop a full suite of in-house and proprietary analytics capabilities. Across the Group we now have over 30 data scientists and analysts delivering better insights and optimising performance for our clients.  Key developments in the first half included the launch of Content Compass and Trend Rider with several innovative and proprietary data-driven products and services in development for the second half of the year.

 

Summary and outlook

 

With every day that passes we see more and more evidence that by connecting our companies we are better placed to deliver better, faster and more cost-effective solutions across each stage of the digital customer journey - from market analysis to identifying and connecting with key customer groups, to developing compelling campaigns and content and creating smarter websites and applications.

 

Our partner companies have settled in well and are benefitting from access to broader thinking, wider skill sets and increased business opportunities across the Group.

 

We have firmly established proof of concept, attracting larger, blue chip clients with a growing number of clients buying the services of at least two Group companies. Expanding capabilities in areas such as analytics and key Group level hires including Richard Costa-D'Sa as Chief Growth Officer will further accelerate organic growth and improve efficiency.

 

We expect performance in the second half of the year to outperform the first half, with new business wins feeding through, increasing cross-fertilisation and the rollout of new proprietary products and services such as Content Compass and Trend Rider.  Over 85% of forecast 2017 revenue is billed or confirmed.

 

The scale of the opportunity remains huge and we look forward to exploiting this in the interests of all our stakeholders - clients, staff, shareholders and partners - in the months and years ahead. 

 

Be Heard is still be in the early stages of its development, but the Board is encouraged by the levels of revenue growth, and by client cross referrals. Current visibility on revenues and progress underpins the Board's confidence that the Group will deliver full year results in line with market expectations, and deliver strong run-rate profitability by the year end. 

 

Peter Scott

Executive Chairman

11 September 2017

 

 

FINANCIAL REVIEW

Group companies

 

The results for the period comprise the trading of group companies for the full six months, with the exception of Freemavens Limited who were acquired on 6 February 2017 and therefore are included for 21 weeks since acquisition.

 

Headline results

 

Group billings for the period were £16.0m (2016: £14.7m).

Group net revenue for the period was £8.3m (2016: £3.3m).

Operating profit before acquisition and non-cash items was £0.1m (2016: £0.04m).

 

Acquisition and non-cash items of £3.1m (2016: £2.2m) comprised:

Depreciation

£0.06m (2016: £0.02m)

Amortisation and impairment of intangibles               

£2.5m (2016: £1.1m)

Acquisition & listing costs               

£0.2m (2016: £0.8m)

Share based payments

Holiday pay accrual

£0.2m (2016: £0.3m)

£0.1m (2016: £0.06m)

 

resulting in an operating loss of £3.0m (2016: loss £2.2m).

 

Cash flow & banking

 

Net cash inflow from operating activities was £6k (2016: outflow £2,395k) and net funds raised by the issue of shares on AIM were £1,966k (2016: £7,660k).

 

Net cash outflows on acquisition-related payments (inclusive of working capital and loan note payments) totalled £1,616k (2016: £7,555k)

 

In July 2017, Be Heard entered into an agreement with Barclays Bank in respect of a £3m Revolving Credit Facility maturing in June 2020.

 

Acquisitions

 

On 9 February 2017, the Group acquired a 75% stake in Freemavens Limited, a marketing analytics and innovation consultancy specialising in the use of big data, for an initial consideration of £0.9m plus assumed debt of £0.8m.  The management of Freemavens between them hold 9.3m shares in Be Heard Group Plc and retain the remaining 25% holding in Freemavens that is subject to put & call options, not to be exercised before 1st January 2021, that are subject to a maximum value of £6.0m.  The transaction was funded by the placement of shares in the market to the value of £2.1m at 3.6p per share.

 

Earn-outs

 

On 25 August 2017, the terms of the earnout for MMT Limited were changed from a performance basis to a fixed annual payment of £3.233m for each of the years 2017, 2018 and 2019, subject to MMT's revenue in each of the respective years being greater than that of 2015, with such amounts remaining payable as to 65% in cash, 35% in shares.  Any shares due to be issued will be priced at the higher of 3.55 pence and the average of the middle market closing prices in the 12-month period prior to the relevant payment date.  Consideration paid to date totals £7.8m, comprising initial consideration of £5.1m paid upon original completion of the acquisition and an additional payment of £2.7m.  The effect of the amendment of the earnout is to bring the total deal cap down from a maximum potential consideration of £20.5m to a fixed consideration of £17.5m. Further details are contained in note 12.

 

Robin Price

Chief Financial Officer & Chief Operating Officer

11 September 2017

 

 

 

 

 

 



 

INTERIM CONSOLIDATED INCOME STATEMENT

for the six months ended 30 June 2017

 


Unaudited

Unaudited

Audited


Six months to

Six months to

Period to


30 June 17

30 June 16

31 December 16


£'000

£'000

£'000

 





 

Billings

16,002

14,707

28,854

 

Cost of sales

(7,673)

(11,399)

(19,364)

 


_______

_______

______

 

Net Revenue

8,329

3,308

9,490

 





 

Administrative expenses

(11,350)

(5,472)

(13,127)

 


_______

_______

______

 





 

Loss from operations

(3,021)

(2,164)

(3,637)

 





 

Operating profit before acquisition costs and non-cash items

 

121

 

 

810

 

Depreciation

(61)

(19)

(67)

 

Amortisation

(1,364)

(1,082)

(2,036)

 

Impairment of intangibles

(1,181)

-

(824)

 

Acquisition/listing costs

(186)

(795)

(1,012)

 

Share based payments

(212)

(256)

(508)

 

Holiday pay accrual

(138)

(56)

-

 


______

______

______

 

Loss from operations

(3,021)

(2,164)

(3,637)

 




 

Finance income

Finance costs

-

(5)

1

(18)

6

(30)

 


______

______

______

 





 

Loss before taxation

(3,026)

(2,181)

(3,661)

 





 

Tax credit

428

-

762

 


______

______

_____

 





 

Loss for the period

(2,598)

(2,181)

(2,899)

 


______

______

______

 





 

TOTAL COMPREHENSIVE EXPENSE FOR THE

(2,598)

(2,181)

(2,899)

 

PERIOD

========

========

========

 





 

Loss and Total Comprehensive Expense for the Period attributable to:

Non-Controlling Interest

Equity holders of the parent

 

 

(10)

(2,588)

 

 

-

(2,181)

 

 

-

(2,899)

 


______

______

______

 


(2,598)

========

(2,181)

========

(2,899)

========

 

Loss per share (see below)




 

Basic

(0.3)p

(0.6)p

(0.5)p

 

Diluted

(0.3)p

(0.6)p

(0.5)p

 

 

 

 

 

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 June 2017

(unaudited)

 



Share


Equity

Non-


 


Share

premium

Retained

Attributable

controlling


 


capital

reserve

earnings

to Owners of

Interests

Total

 





Parent Company




£'000

£'000

£'000

£'000

£'000

£'000

 








 

Balance at 30 June 2015

1,283

2,165

(123)

3,325

-

3,325

 








 

Total comprehensive expense for the period

-

-

(1,043)

(1,043)

-

(1,043)

 








 

Issue of new shares

2,046

4,605

-

6,651

-

6,651

 

Issue costs deducted from equity

-

(406)

-

(406)

-

(406)

 








 

Share based payment expense

-

-

40

40

-

40

 


_____

_____

_____

_____

_____

_____

 

Balance at 31 December 2015

3,329

6,364

(1,126)

8,567

-

8,567

 








 

Total comprehensive expense for the period

-

-

(2,181)

(2,181)

-

(2,181)

 








 

Issue of new shares

3,192

7,175

-

10,367

-

10,367

 

Issue costs deducted from equity

-

(439)

-

(439)

-

(439)

 








 

Share based payment expense

-

-

256

256

-

256

 


_____

_____

_____

_____

_____

_____

 

Balance at 30 June 2016

6,521

13,100

(3,051)

16,570

-

16,570

 








 

Total comprehensive expense for the period

-

-

(718)

(718)

-

(718)

 








 

Issue of new shares

624

1,465

-

2,089

-

2,089

 








 

Share based payment expense

-

-

252

252

-

252

 


_____

_____

_____

_____

_____

_____

 

Balance at 31 December 2016

7,145

14,565

(3,517)

18,193

-

18,193

 








 

Total comprehensive expense for the period

-

-

(2,588)

(2,588)

(10)

(2,598)

 








 

Issue of new shares

986

2,561

-

3,547

-

3,547

 

Issue costs deducted from equity

-

(127)

-

(127)

-

(127)

 








 

Share based payment expense

-

-

212

212

-

212

 








 

Non controlling interests on acquisition of subsidiary

-

-

-

-

64

64

 


_____

_____

_____

______

_____

_____

 

Balance at 30 June 2017

8,131

16,999

(5,893)

19,237

54

19,291

 


_____

_____

_____

______

_____

_____

 



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 June 2017

 

 


Unaudited

      Unaudited

 Audited


as at

as at

as at


30 June 17

30 June 16

31 December 16


£'000

£'000

£'000

ASSETS




NON-CURRENT ASSETS




Property, plant and equipment

163

98

93

Intangible assets

36,532

34,230

40,272


______

______

_______

TOTAL NON-CURRENT ASSETS

36,695

34,328

40,365


______

______

_______





CURRENT ASSETS




Trade and other receivables

7,065

6,365

7,723

Corporation tax

121

-

-

Deferred tax asset

-

796

82

Cash and cash equivalents

1,220

8,649

2,812


______

______

_______

TOTAL CURRENT ASSETS

8,406

15,810

10,617


______

______

_______

TOTAL ASSETS

45,101

50,138

50,982


______

______

_______

LIABILITIES




CURRENT LIABILITIES




Trade and other payables

(7,605)

(11,483)

(11,069)

Loan notes

-

(700)

(175)

Corporation tax liabilities

-

(92)

-

Provision for liabilities

(5,530)

(2,300)

-


_______

_______

________

TOTAL CURRENT LIABILITIES

(13,135)

(14,575)

(11,244)


_______

_______

________

NON-CURRENT LIABILITIES




Trade and other payables

(184)

(451)

(307)

Deferred tax liability

(724)

(1,251)

(988)

Provision for liabilities

(11,767)

(17,291)

(20,250)


_______

_______

________

TOTAL NON-CURRENT LIABILITIES

(12,675)

(18,993)

(21,545)


_______

_______

________

TOTAL LIABILITIES

(25,810)

(33,568)

(32,789)


_______

_______

________

TOTAL NET ASSETS

19,291

16,570

18,193


_______

_______

________

CAPITAL AND RESERVES

ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT




Share capital

8,131

6,521

7,145

Share premium reserve

16,999

13,100

14,565

Retained earnings

(5,893)

(3,051)

(3,517)


_______

_______

_______

Equity attributable to owners of parent company

19,237

16,570

18,193

Non-controlling interests

54

-

-


_______

_______

_______

TOTAL EQUITY

19,291

16,570

18,193


_______

______

_______







CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 30 June 2017

 


Unaudited

    Unaudited

Audited


Six months to

Six months to

Period to


30 June 17

30 June 16

31 December 16


£'000

£'000

£'000

OPERATING ACTIVITIES




Net loss from ordinary activities before taxation

(3,026)

(2,181)

(3,661)





Adjustments for: Depreciation

60

19

67

Amortisation

1,364

1,082

2,036

Other intangible impairment

1,181

-

824

Share based payment expense

212

256

508

Finance costs

5

17

24


_____

_____

_____

Operating loss before changes in working capital and provisions

(204)

(807)

(202)

Decrease/(increase) in trade and other receivables

230

(1,208)

(994)

Decrease in trade and other payables

(20)

(440)

(282)

Decrease/(increase) in provisions

-

61

(84)


_____

_____

_____





Cash generated/(consumed) by operations

6

(2,394)

(1,562)

Income taxes recovered

-

-

12


___

___

_____

Cash flows from operating activities

6

(2,394)

(1,550)


___

___

_____

INVESTING ACTIVITIES




Purchase of property, plant and equipment

(109)

(63)

(98)

Consideration paid on acquisition of subsidiaries

(1,441)

(7,555)

(9,841)

Deferred consideration

(2,186)

-

(3,931)

Payment to buy out shareholders

(175)

-

(850)

Cash with subsidiaries over which control has been obtained

347

2,735

3,163

Finance income

-

1

6


_____

_____

_____

Cash consumed by investing activities

(3,564)

(4,882)

(11,551)






(3,558)

(7,276)

(13,101)


_____

_____

_____

FINANCING ACTIVITIES




Issue of ordinary shares

1,971

7,678

7,678

Finance costs

(5)

(18)

(30)

 

Cash generated by financing activities

_____

1,966

_____

7,660

_____

7,648





INCREASE/(DECREASE) IN CASH AND CASH

EQUIVALENTS

(1,592)

---------------

384

---------------

(5,453)

---------------





Cash and cash equivalents brought forward

2,812

8,265

8,265


_____

_____

_____





CASH AND CASH EQUIVALENTS CARRIED FORWARD

1,220

8,649

2,812


_____

_____

_____

Represented by:




Cash at bank and in hand

1,220

8,649

2,812


_____

_____

_____


1,220

8,649

2,812


_____

_____

_____



NOTES TO THE INTERIM REPORT

for the six months ended 30 June 2017

1.     Corporate information

 

The interim consolidated financial statements of the group for the period ended 30 June 2017 were authorised for issue in accordance with a resolution of the directors on 6 September 2017.  Be Heard Group plc is a Public Limited Company listed on AIM, registered in England and Wales and domiciled in the UK.

 

The interim consolidated financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006, and should be read in conjunction with the 2016 annual financial statements.  The statutory audited accounts for the year ended 31 December 2016 have been delivered to the Registrar of Companies in England and Wales.  The auditors' report on these accounts was unqualified and did not contain statements under section 498 of the Companies Act 2006.

 

2.     Statement of Accounting policies

 

2.1  Basis of Preparation

The interim consolidated financial statements of the group for the period ended 30 June 2017 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union.

 

The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the group's annual financial statements for the year ended 31 December 2016, which were prepared in accordance with IFRS's as adopted by the European Union.

 

The directors are satisfied that, at the time of approving the consolidated interim financial statements, it is appropriate to continue to adopt a going concern basis of accounting.

 

2.2  Accounting Policies

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the group's annual financial statements for the year ended 31 December 2016.

 

The principal accounting policies adopted in the preparation of the financial statements are set out below.  The policies have been consistently applied to all the years presented, unless otherwise stated.

 

These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations issued by the International Accounting Standards Board as adopted by the European Union ("IFRSs") and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRSs.  The consolidated financial statements have been prepared under the historical cost convention.

 

Standards and amendments and interpretations to published standards not yet effective

 

Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the group's accounting periods beginning on or after 1 July 2017 or later periods and which the group has decided not to adopt early are:

 

IFRS 9 Financial Instruments (effective for accounting periods on or after 1 January 2018)

 

IFRS 15 Revenue from Contracts with Customers (effective for accounting periods beginning on or after 1 January 2018)

 

IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)

 

Amendments to IFRS 2 Share Based Payments (effective for accounting periods on or after 1 January 2018)

 

The implementation of these standards is not expected to have any material effect on the Group's financial statements, with the exception of IFRS 16. The impact that the implementation of IFRS 16 will have on the financial statements is currently being assessed.

NOTES TO THE INTERIM REPORT

for the six months ended 30 June 2017

 

3.     Segment Information

 

The Group's primary reporting format for segment information is business segments which reflect the management reporting structure in the Group.

 



Be Heard Group

Media Planning & Buying

Design, Build &UX

Content Management

Data Analytics

Consolidation

Total



£'000

£'000

£'000

£'000

£'000

£'000

£'000


Billings









External

-

10,158

4,317

811

716

-

16,002


Intercompany

227

1,142

-

13

-

(1,382)

-



----------------

----------------

---------------

---------------

---------------

---------------

--------------------



227

11,300

4,317

824

716

(1,382)

16,002











Profit/(loss) before tax

(1,283)

447

961

(570)

99

(2,680)

(3,026)











Balance sheet









Assets

47,139

12,991

6,136

857

475

(22,497)

45,101


Liabilities

(26,548)

(4,980)

(918)

(543)

(954)

8,133

(25,810)



----------------

----------------

-------------

-------------

-------------

---------------

--------------------


Net assets/(liabilities)

20,591

8,011

5,218

314

(479)

(14,364)

19,291



----------------

----------------

------------

------------

------------

---------------

--------------------


Other









Capital expenditure









- Tangible fixed assets

4

22

67

3

11

-

107


Depreciation, amortisation and









other non cash expenses

4

13

20

2

21

2,546

2,606


Interest paid

4

1

-

-

-

-

5










Included within Media Planning & Buying is turnover of £5,658k relating to income from two major customers which each account for more than 10% of the Group's turnover in the period.

 

4.     Earnings per share



2017



£


The earnings per share is based on the following:






Earnings

(2,497,661)



==========





Weighted average number of shares

781,964,545


Diluted number of shares

876,795,448





Earnings per share

(0.3)p


Diluted earnings per share

(0.3)p



======

Earnings per ordinary share has been calculated using the weighted average number of shares in issue during the year. The weighted average number of equity shares in issue was 781,964,545.

The diluted earnings per share is the same as the earnings per share due to the consolidated group loss.

NOTES TO THE INTERIM REPORT

for the six months ended 30 June 2017

 

 

5.     Business Combinations

 

On 9 February 2017, the Group acquired 75% of the ordinary shares in Freemavens Limited for a consideration of £942,538.  This investment is included in the Parent company's balance sheet at its fair value at the date of acquisition.  Freemavens is a data and analytics business.

 

The completion accounts show a breakdown of the assets and liabilities of the acquired company to be as follows:

 




Book value

Fair value adjustment

Fair value to Group

 

Intangible fixed assets



£'000

-

£'000 

1,005

£'000

1,005

Tangible fixed assets



22

-

22

Receivables



284

-

284

Cash and cash equivalents



347

-

347

Payables



(375)

-

(375)

Loan from BHG



(858)

-

(858)

Deferred tax



-

(171)

(171)




-----------------------

-----------------------

-----------------------

Net assets on acquisition



(580)

834

254

Non-controlling interest





(64)

Goodwill on acquisition



752






----------------------

Total consideration





942






==========

 

Discharged by:





              £'000

Cash paid

Shares in Be Heard Group plc


583

359



---------------------



942



==========

 

The non-controlling interest in Freemavens Limited is calculated as 25% of the fair value of Freemavens at acquisition.

 

The intangible fixed assets are in relation to brand and customer relationships.

 

The billings and profit included in the Consolidated Statement of Comprehensive Income since the acquisition of Freemavens Limited on 9 February 2017 was £716k and £99k respectively.

 

Acquisition costs of approximately £186k were written off as overheads in the period.

 

6.     Remeasurement of Goodwill

 

Kameleon Worldwide Limited was reviewed according to reasonable estimates of its projected growth rates, and it was assessed that the amount of consideration payable will be less than originally provided for.  Accordingly, a £2.952m revision has been made to goodwill and contingent consideration.



 

 

NOTES TO THE INTERIM REPORT

for the six months ended 30 June 2017

 

7.    

Intangible Assets







Goodwill

Other




Development

On

Intangible




Costs

consolidation

Assets

Total



£'000

£'000

£'000

£'000


Cost












31 December 2016

 

Acquisition of subsidiary

499

 

-

37,539

 

752

8,596

 

1,004

46,634

 

1,756



----------------

---------------------

------------------

---------------------


30 June 2017

499

38,291

9,600

48,390



----------------

---------------------

------------------

--------------------


Amortisation

 






31 December 2016

474

3,000

2,888

6,362








Charge for the period

25

-

1,339

1,364


Impairment

-

-

1,181

1,181


Remeasurement

-

2,951

-

2,951



----------------

-----------------

-----------------

-----------------


30 June 2017

499

5,951

5,408

11,858



----------------

------------------

------------------

-----------------


Net book value

 

30 June 2017

 

 

 

-

---------------

 

 

32,340

---------------

 

 

4,192

---------------

 

 

36,532

---------------


31 December 2016

25

34,539

5,708

40,272



---------------

---------------

---------------

---------------

 

The cost of other intangible assets comprises the estimated net present value of £7,138k of customer relationships and £2,462k of brand value at the date of acquisition.

 

The development costs relate to Amplify, a data analytics tool developed in-house by Agenda21.

 

8.     Share capital

 

Allotted, issued and fully paid

 


No


Value

£

 Ordinary shares of 1p each


813,049,493


8,130,495



===========


==========

 

At 30 June 2017, the number of shares covered by option agreements amounted to 58,752,033 plus an undetermined number with respect to Peter Scott's share options (see 2016 financial statements for details).



 

NOTES TO THE INTERIM REPORT

for the six months ended 30 June 2017

 

Shares issued in the period:

 

Date

Description

No shares

Price/ share

Gross share value

Cash received




p

£

£

9 February 2017

Consideration for Freemavens

9,303,766

3.863

359,404

-

9 February 2017

Share placing

58,300,000

3.600

2,098,800

2,098,800

31 March 2017

Agenda 21 earnout payment

22,909,784

3.516

805,508

-

31 March 2017

Kameleon additional consideration

8,059,642

3.516

283,377




-----------------------


---------------------

---------------------


Totals

98,573,192


3,547,089

2,098,800



===========


==========

=========

 

9.     Related party transactions

 

There were no material related party transactions in the period.

 

10.  Seasonality

 

The Group's activities are not subject to significant seasonal variation.

 

11.  Holiday Pay Accrual

 

To comply with International Financial Reporting Standards, a holiday pay accrual has been included across all Group companies, to provide for any staff holidays accrued but not taken during the period.  As all companies within the Group have a holiday year which is coterminous with the Group's financial year, this accrual is expected to reverse out by the financial year-end.

 

12.  Earn-outs

 

The total value of earn out consideration (cash and shares) contained within the Balance Sheet is made up as follows:

 

Years payable:

2018

2019

2020


Cash (£'000)

Shares (£'000)

Cash (£'000)

Shares (£'000)

Cash (£'000)

Shares (£'000)

Agenda21(1)

1,496

805

1,496

805

-

-

MMT(2)

2,101

1,132

2,101

1,132

2,101

1,132

Kameleon(1)

-

-

650

350

1,300

700


£3,597

£1,937

£4,247

£2,287

£3,401

£1,832

 

(1)   Shares issued will be priced at the average of the middle market closing prices in the 20-day period prior to the relevant payment date, subject to being no more than 15% above/below the price at which the immediately preceding shares were issued.  For any shares issued in 2018 the immediately preceding price is 3.516 pence.

(2)   Shares issued will be priced at the higher of 3.55 pence and the average of the middle market closing prices in the 12-month period prior to the relevant payment date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Further copies of this document are available both at the registered office of the Company and from the offices of the Company at 53 Frith Street, London W1D 4SN. The statement will also be available to download on the Company's website.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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