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Bonhill Group PLC - Interim Results

RNS Number : 9579Y
Bonhill Group PLC
15 September 2020
 

15 September 2020

 

Bonhill Group plc

("Bonhill", the "Company" or the "Group")

 

Interim Results for the Six Months Ended 30 June 2020

 

Bonhill Group plc (AIM: BONH), a leading B2B media business specialising in three key areas: Business Information, Events and Data & Insight, announces its unaudited interim results for the six months ended 30 June 2020.

 

Financial Highlights

-     Revenue down by 28% to £7.8m (H1 19: £10.7m)

-     Gross margin improved significantly to 77.8% (H1 19: 62.9%)

-     Unadjusted EBITDA loss of £3.1m (H1 19: loss of £1.3m)

-     Operating loss of £11.1m including £6.6m impairment of intangible assets (H1 19: £2.2m)

-     Equity fundraising of £2.5m to secure financial stability

-     $1.1m financial support from the US Paycheck Protection Programme ("PPP")

-     Cash balance at 30 June 2020 was £3.4m (30 June 19: £5.7m); £1.9m at 31 August 2020

 

Operational Highlights

-    Significant increase YoY in digital audiences - with greater numbers of attendees to the Group's virtual events and higher audience numbers to the Group's online titles

-     Successful transition to Virtual Events with 27 completed and 27 planned pre-year end

-     Successful roll-out of multi-day virtual events, such as the Women in IT 3-day virtual summit and 2-day Women in Asset Management summit

-     Greater emphasis on product development delivering customer value through use of the Group's expert and unique analysis and data, leading to new recurring revenue streams

-     New operational structure to deliver continued shift from transactional revenue streams to repeat subscription-led online revenue sources

-     Moved off all Group legacy technology platforms onto new standard Bonhill platform and technology stack, reducing time-to-market and costs

-     Successful move to global remote working which will continue into 2021

 

Commenting on the results, Simon Stilwell, Chief Executive of Bonhill, said:

"COVID-19 created an extremely challenging period that we have been able to navigate through utilising the dynamism and expertise of our global teams to successfully work together and reposition the business to deliver long-term profitability despite having 39% of historic Group revenue at risk. We took swift and decisive action to restructure all of our business units to ensure that we are well-positioned for the future. We now have a more agile business with solid foundations for growth from our continued investment in the technology platform."

 

Commenting on the outlook, he added:

"The Group continues to trade ahead of the expectations released on 9 April 2020. This is driven by strong monthly revenues and the positive impact of the various cost-saving initiatives undertaken. Consequently, the Group will enter the final quarter of the year in a position of greater strength, underpinned by a new management structure, with a focus on product and subscription revenues and final implementation of all of our first-phase technology investment."

 

For further enquiries please contact:

 

Bonhill Group plc

+44 (0)20 7250 7035

Simon Stilwell, Chief Executive

Sarah Thompson, Chief Financial Officer

 

 

Shore Capital (Nominated Adviser and Joint Broker)

+44 (0)20 7408 4080

Tom Griffiths

David Coaten

 

 

Canaccord Genuity Limited (Joint Broker)

Bobbie Hilliam

Adam James

Georgina McCooke

 

+44 (0)20 7523 8000

Houston (PR Adviser) 

Alexander Clelland

+44 (0)20 3701 7660

 

About Bonhill Group plc

Bonhill Group plc is a leading, AIM-quoted, B2B media company providing Business Information, Events and Data & Insight propositions to Financial Services, Diversity and Technology business communities in 25 countries. Bonhill operates fifteen information websites, publishes three regular print titles, hosts 120 events per annum, offers a portfolio of data & analytics propositions and provides a range of content marketing solutions.

 

The business creates content, sales and marketing opportunities, networking events and transactional opportunities for its audiences of entrepreneurs, business owners and managers, CTOs & technology leaders, asset & wealth managers, and professional women, in addition to its sponsors, advertising clients and customers. Flagship brands include: InvestmentNews, Portfolio Adviser, Fund Selector Asia, What Investment, SmallBusiness.co.uk, GrowthBusiness.co.uk, Information Age, Women in… events series, and DiversityQ.

 

For more information visit  www.bonhillplc.com  

 

 

 

 

 

Chairman's Statement

Bonhill had a very challenging first half of 2020. H1 revenue was down by 28% to £7.8m with an operating loss of £4.4m before impairment (2019: £2.2m loss).

 

During the first quarter we started to see the work of previous years beginning to pay off and momentum was building, but then the world went into lockdown and we had to adapt. Across the Group, we saw event revenue reduce by 85% Q1 to Q2, but encouragingly, Business Information increased by 7% Q1 to Q2. The Board was pleased to see how well the team rose to the challenge, using the investment we had made in technology to change how we deliver to our customers quickly and productively.  The wider team took decisive action to conserve cash by making radical changes in staffing and using innovative approaches to keep our customers engaged.

 

The Company has refined the Group's model and has refocused its efforts within its sectors, so that in addition to Financial Services, Technology was developed into a more solutions-focused business and re-branded as Business Solutions and Diversity has broadened to a wider Governance channel. These changes reflect the continuing drive to develop long-term recurring revenues, increased subscription revenues and greater customer needs-based product sales.

 

As a Group, we had a high dependency on the events business (39% of 2019's total revenues) which were unfortunately all either postponed or cancelled between April and June 2020. The team was able to respond quickly to these challenges, evidenced by the fact that approximately 45% of the proposed remaining live events for the year were replaced with a robust high-quality virtual platform that has seen great success in terms of revenues and contribution as well as being well received by attendees and sponsors.

 

In the first half, and subsequently, we have seen some changes to the composition of the Board. Fraser Gray was replaced in late June 2020 by Jon Kempster as a Non-Executive Director and Chair of the Audit Committee and, as separately announced today, Sarah Thompson has been appointed as Chief Financial Officer with immediate effect, having previously been Director of Finance since David Brown stood down as Group Finance Director in July 2020. I would like to take this opportunity to thank both Fraser and David for their contributions and wish them well in their future endeavours, and to welcome Jon and Sarah to the Board.

 

Our staff have excelled themselves through their commitment, flexibility and determination to succeed during such a challenging period. The investment in technology enabled all our global teams to work remotely. I would finally like to thank our shareholders for their support in the fundraising and our broad customer base for their continued support and engagement.

 

Neil Sachdev

Non-Executive Chairman

 

 

 

 

 

Chief Executive's Review

 

Introduction

 

The first half was an extremely challenging period for the Group, but one which we have weathered, overcoming many obstacles. Despite the global pandemic, we have managed to complete the first half in a robust position with a refined business model, improved propositions for customers, a tighter team spirit and a stronger group identity. The biggest direct impact of COVID-19 on the Group was the loss of revenue from live events due to cancellations and postponements, showing a 58% reduction in revenue H1 20 vs H1 19. Despite this, overall Group revenue in the first half was only down 28% against the comparable period last year. Additionally, we have seen gross margin increase by 15% compared to the first half of last year as the Company transitions towards a more digital product offering.

 

Much of 2019 was spent setting up the framework for our agile technology stack, our product strategy and a move to recurring subscription revenue streams, whilst successfully developing a larger global Events business. COVID-19 required a wholesale change in our Events proposition, and I am pleased that although we have had to cancel all of our global live awards events, we have converted our offering to virtual in the vast majority of cases and have seen excellent support from attendees and sponsors. The net result is that the Group's Events revenue which was £9.6m (representing 39% of total revenue) in the year ended 31 December 2019 is expected to be £7.5m in the year ending 31 December 2020 (FY 2020) with only a 10% reduction in margin.

 

Our work on developing new foundations has helped us counter this reduction in revenue as we have also worked hard to develop new product pipelines, have delivered a range of new products in our various titles and seen good growth in SmallBusiness.co.uk, part of our re-branded Business Solutions division, and in our Content Marketing business, Last Word Create, that was only launched in January 2020. These activities reflect the ongoing need to provide solutions for clients and are testament to the strength of our brands and relationships with clients, which have enabled us to be innovative. Now, more than ever, we are seeing clients seeking to understand better their communities and to find more effective ways to communicate with them.

 

New divisional structure

 

The pandemic forced us to look at every part of the business and assess our market positioning, brand strength and future opportunities. This led us to make wholesale changes to the Group's model and operating structure.

 

Strategically, we continue to build long-term sustainable revenues, targeting high growth sectors and fast-growing international markets. We remain focused on Financial Services with our strong presence in the UK, US and Asia.

 

InvestmentNews is run by Christine Shaw and, in July 2020, Patrick Ponsford took over responsibility for running Last Word Media in the UK, Europe and Asia leaving me to concentrate on being Chief Executive of the Group.

 

Our Technology business, led by Jon Seymour, which principally comprised Information Age, has been combined with Small Business and Growth Business, and rebranded as Business Solutions.

 

The newly formed Governance business (formerly Diversity), also led by Jon Seymour, is based on our leading Gender Diversity franchise the 'Women in…' series and the website DiversityQ. We have broadened our activities to include all aspects of governance, particularly Environmental, Social and Governance (ESG).

 

The leaders of these businesses are joined on my executive committee by Sarah Thompson, newly appointed Chief Financial Officer, Suzanne Tomlinson, Head of HR, and Simon Collin, Chief Technology Officer/Chief Product Officer.

 

This newly constructed team has been tasked with a number of key items:

 

-     Change the business mix to replace lost event revenue with a growing level of subscription or recurring revenues;

-     Increase the business areas' operating margin to achieve a blended Group operating margin (before depreciation and amortisation) of 15% by the end of 2023;

-     Create a more stable employee base and recruit high quality individuals while retaining and developing existing staff; and

-     Create engaging content that keeps us at the heart of our communities.

 

 

COVID-19 Response

 

At the outset of the pandemic, we undertook a series of actions to mitigate the impact of COVID-19 on our operations. As part of this process, we participated in governments' plans to support business and closely examined our cost base above and beyond existing plans to increase operational efficiency.  

 

As part of this process, during H1 20, we reduced overall headcount across the Group with 26 redundancies and furloughed 16 employees from April to August at a total salary saving of approximately £0.3m. The Company received £0.1m from the UK Government under the Job Retention Scheme.

 

Other cost-saving measures included reduced print costs for three months providing a saving of £0.3m, both from production and postage, and an overall reduction in other supplier agreements. In total, these measures saved approximately £0.7m in the period.

 

We also participated in the PPP and, as a result, headcount in the US has remained stable at 46 people. The PPP loan is expected to be fully forgiven and converted to a grant in Q4 2020 once the application process is opened by the lending bank. As previously announced, while the Company sought further financial support under the UK Coronavirus Business Interruption Loans Scheme, it was unsuccessful with the application.

These measures have been complemented by the execution of existing plans to increase operational efficiency as part of the ongoing integration process. The Transitional Service Agreement terminated in mid-August 2020 and its costs which were running at £30,000 a month, and services have been replaced with internal headcount. Overall headcount across the Group in the period reduced by 17 and by another 11 as of today. Total Group headcount at the end of August 2020 was 148 (August 2019: 164).

 

The combination of the response to COVID-19 and ongoing integration efficiencies have contributed to reinforcing the financial strength of the Group during this challenging time.

 

The current operating environment

 

Financial Services

Our Financial Services division comprises two businesses, namely InvestmentNews and Last Word Media.

  

InvestmentNews 

During the period, InvestmentNews focused primarily on driving recurring revenue through subscriptions and building a broader customer base through key vertical market segments. It has launched three new products since June 2020:  ESG Clarity US, a website focused on ESG investing; a Fin Tech virtual event; and RPA Convergence, a website focused on retirement planners.   

 

In the six months ended 30 June 2020, revenues were down 44% year-on-year, principally driven by the lack of any event activity between April and June due to COVID-19.  Most were originally rescheduled to the second half, but in July 2020 the decision was taken to move all to virtual events due to restrictions now in place at US venues. 

 

During the period, revenue increased by 11% Q1 to Q2 and there has been encouraging growth in digital activity as a result of the investment in its website.  Currently, digital revenues for the year are expected to be in excess of the original pre-COVID-19 budget. InvestmentNews is currently booked 82% to its revised post-COVID revenue budget for FY2020 with a qualified pipeline in excess of that.

 

Of total revenues generated by InvestmentNews in the six months ended 30 June 2020, Business Information accounted for 86%, Events 1% and Data & Insight 12%. 

 

The decision to stop production of InvestmentNews' weekly print magazine and replace it with a digital version was taken in March 2020. Overall, there has been £0.3m of savings from reduced print production and postage. Due to customer demand, a print version was restarted in July.

 

In August 2020, the Company formally exited the two-year Transitional Services Agreement that was put in place with the vendors on acquisition. While this exit will see direct costs reduce by $0.2m in H2 2020, the services have been absorbed by the wider Group, including finance, ad ops, technology and associated operations.

 

With a completed technology investment, new enhanced core website, developing portal strategy and continued strong engagement with a broadening client base, InvestmentNews is well placed to enter 2021 primed for growth. 

 

Last Word Media

Last Word Media (LWM) saw revenues impacted due to its historic focus on large live events. Total revenues in the period were down 44% (on a like-for-like basis) reflecting the lack of live event activity between March and June. The direct impact of COVID-19 has seen all of LWM's planned Q2 events move into the second half of this year in both live and virtual formats.

 

Prior to the onset of lockdown, we took the decision to restructure the European business to better align our product offering to the broad European audience. This reduced headcount by 12, which, combined with the removal of the print version of Expert Investor has created annualised cost savings of £0.7m.

 

Another round of restructuring was taken post period-end to reflect the current outlook for live events and the end of furlough and this has resulted in a further seven redundancies creating annualised savings of £0.3m.

 

The split of revenue by proposition generated by LWM in the period was Business Information 55%, Events 39% and Data & Insight 6%. 

 

Despite the challenges, LWM is currently booked 86% to its post-COVID revenue budget for FY2020. We have worked hard to develop innovative formats with virtual events and new business areas. Three notable successes have been the sustainability title ESG Clarity, the Content Marketing business LastWord Create and the Last Word research business.

 

 

Governance

Governance (formally known as Diversity) supports organisations with their policies, processes, systems and behaviours to ensure that they align with legislation. There has been an increased level of activity and confirmed activity in the Events business, which now has a proven revised product set for H2 2020. The media team continues to perform well.

 

We have restructured the division in order to better align the teams and improve efficiency. This has resulted in a reduction in headcount of five people due to the drop in live awards-based events in H2 2020.

 

This division is 99% booked to budget for FY 2020 with a modest risk of having to repurpose some revenues into 2021 which were booked pre-COVID-19. Event venue liabilities have been further reduced, from a peak of £0.4m to a current level of £0.2m. It is planned that most of this will be utilised in H2 2020 or in 2021.

 

The Women in IT London virtual summit was the success story of the period in terms of engagement and in proving the new digital platform. Although it had modest revenues, it proved our new template and was a tremendous showcase for our virtual platform going forward. 11 virtual events are planned for H2 2020.

 

Business Solutions

Our Business Solutions division consists of SmallBusiness.co.uk, GrowthBusiness.co.uk, www.information-age.com and www.whatinvestment.co.uk.

 

The impact of new leadership introduced in 2019 is demonstrated by the enormous growth in interest in SmallBusiness.co.uk and GrowthBusiness.co.uk during the early days of the pandemic. The audience increased fivefold in the first weeks of lockdown as people sought information on all aspects of the various government initiatives.

 

Media will be ahead of budget again in Q3 2020 (and is £50,000 ahead of its underlying FY20 budget), due mainly to diversification of revenue streams in the last 18 months. Whilst year-on-year display revenues are down, lead-generation and content-based partnerships are ahead. Website traffic across the Group is returning at pre-COVID-19 levels.

 

What Investment magazine continues to perform well and is 34% above budget in the year to date (and 44% year-on-year).

 

Information Age had a strong Q2 2020 with revenue up fourfold from Q1 2020. This is a result of pre-COVID-19 changes feeding through and the broadening of revenue streams to include lead generation products, webinars and premium gated content.

 

Across Governance and Business Solutions, the combined revenue split by proposition in the period was Business Information 45%, Events 55% and Data & Insight 0%.

 

Technology Investment

Our investment in technology continues as we look to protect and grow revenues as well as to enhance operational efficiency. We have made significant upgrades to key websites and have implemented key changes to our technology to simplify and centralise operations with additional control processes. This includes a shift from using external agencies to FTE resources.

 

Dividend

Last year saw Bonhill pay its maiden interim dividend for the six months ended 30 June 2019. In light of the prevailing operating environment, and the Company's financial situation, the decision was taken not to recommend the payment of a final dividend with the Company's results for the year ended 31 December 2019 and we will not be proposing the payment of an interim dividend for the six months ended 30 June 2020. It is very much the Board's intention that the Company should return to paying a dividend when it is appropriate to do so.

 

Outlook

The Group continues to trade ahead of the expectations released on 9 April 2020. This is driven by a better-than-expected performance of virtual events and the positive impact of the various cost-saving initiatives undertaken. Consequently, the Group will enter the final quarter of the year in a position of greater strength, underpinned by a new management structure, with a focus on product and subscription revenues and final implementation of all of its first-phase technology investment.

 

 

Simon Stilwell

Chief Executive

 

 

Financial Review

 

Income statement

 

Overall unaudited Group revenue for the first half ("H1 20") was £7.8m (2019: £10.7m), showing a reduction of 28%. Gross margin, however, has significantly increased year-on-year to 78% (2019: 63%). Operating loss (pre-impairment) in the six months to 30 June 2020 was £4.4m (2019: loss of £2.2m), which reflects the impact of COVID-19 and that the Group has had to rely solely on digital and media revenue for three months of the first half as all live events were cancelled or postponed.

 

InvestmentNews' revenue for H1 20 was £3.8m (2019: £6.8m) showing a reduction year-on-year of 44%. Whilst being heavily impacted by COVID-19, this segment of the business has seen good growth quarter-on-quarter in the half and there was encouraging growth in digital activity as a result of the investment in InvestmentNews' website. Currently, InvestmentNews' digital revenues for the year are likely to be in excess of the original pre- COVID-19 budget.

 

Last Word Media's revenue in H1 20 of £2.7m was also down 44% when compared with H1 2019 (on a like-for-like basis), as it has suffered similar impacts to InvestmentNews in relation to live events.

 

The Bonhill UK segment covers three areas, being the newly formed Governance and Business Solutions channels, as well as the central and corporate costs of the Group. Bonhill UK's revenue has seen similar declines year-on-year to the other parts of the Group, with revenue in H1 20 down by 41% at £1.2m (2019: £2.1m). Despite the H1 impact, this segment of the business has seen a really encouraging level of new business from a range of clients and there has been an increased level of activity and confirmed orders across the events team.

 

 

 

30-Jun-20

30-Jun-19

30-Jun-19 *

 

6 months

6 months

6 months

 

£'000

£'000

£'000

Revenue

7,760

10,743

13,777

Cost of sales

(1,725)

(3,981)

(4,867)

Net operating expenses

(17,032)

(9,001)

(10,833)

Operating profit/(loss)

(10,996)

(2,238)

(1,923)

Finance costs

(146)

(204)

(207)

Loss before tax

(11,142)

(2,442)

(2,130)

Tax

1,232

60

(26)

Loss

(9,910)

(2,382)

(2,156)

 

 

 

 

Statutory loss per share

(15.13p)

(5.85p)

 

*Proforma numbers include pre-acquisition results for Last Word Media as if it had been owned for the six months

 

Operating loss in the period was £11.1m, which includes an impairment of intangible assets, specifically goodwill, of £6.6m.  The impact of COVID-19 in 2020 has had a significant effect on the profitability of the Group and the Board has taken the view that current forecasts for the business will not support the asset values of the Group and therefore we have made an impairment.

 

Additionally, when comparing against H1 19, Last Word Media only contributed to two and a half months of trading post-acquisition in April 2019. H1 20 reflects the full six months of trading for all Group entities.

 

A further breakdown of net operating expenses is shown below.

 

 

30-Jun-20

30-Jun-19

 

6 months

6 months

 

£'000

£'000

Staff costs

6,965

5,155

IT costs

496

117

Legal and professional costs

1,005

1,572

Office costs

187

281

Travel and expenses

105

362

Other operating expenses

460

528

Share based payments

(79)

70

Depreciation

73

63

Amortisation

1,228

853

Impairment of intangible assets

6,593

-

Net operating expenses

17,032

9,001

 

 

Cash flow

 

 

 

30-Jun-20

30-Jun-19

 

 

6 months

6 months

 

 

£'000

£'000

Operating cash flows before working capital

(3,182)

387

Working capital movement

3,079

97

Interest paid

(146)

(180)

Tax paid

-

(38)

Foreign exchange gains or losses

42

94

Purchases of property, plant and equipment and intangible assets

(171)

(64)

Free cash outflow

(377)

296

Acquisition of Last Word Media

-

(5,840)

Acquisition costs

-

(815)

Integration costs

-

(732)

Re-organisation costs

-

(100)

Proceeds from issue of ordinary shares

2,259

9,484

Net repayment of borrowings and lease liabilities

(326)

(949)

Net cash inflow

1,555

1,344

 

During the six months to 30 June 2020, the net cash inflow of the Group was £1.6m (2019: £1.3m).

 

£2.3m of share placing net proceeds were received in the first half of 2020 (2019: £9.5m) to help mitigate the impacts of COVID-19 on the business, in particular the reduction in live events revenue.

 

The Group has seen a positive working capital movement of £3.0m (2019: £0.1m). This is partly due to a targeted focus on debtor collections, but also increased levels of deferred revenue as events were postponed from H1 into H2. Additionally, under the UK Government's schemes, £0.9m of payable PAYE has been deferred to the second half of the year, and £0.4m of payable VAT has been deferred until March 2021.

 

During the COVID-19 lockdown, the Company furloughed 16 people in the UK and, therefore received £0.1m from the UK Government support scheme. InvestmentNews also benefited from a PPP loan of $1.2m (£0.9m), which is expected to be fully forgiven and converted to a grant in Q4 2020 once the application process is opened by the lending bank.

 

Financial position

 

 

30-Jun-20

 

30-Jun-19

£'000

 

£'000

Intangibles

21,413

 

30,706

Tangible fixed assets

268

 

183

Lease asset

1,107

 

1,479

Lease liability

(1,190)

 

(1,549)

Working capital

(351)

 

1,667

Deferred and current tax

1,221

 

(2,455)

Cash

3,446

 

5,711

Debt

(2,888)

 

(3,647)

Net assets

23,024

 

32,095

 

As at 30 June 2020, the Group had a cash balance of £3.4m (2019: £5.7m) and net assets of £28.4m (2019: £32.1m). At 31 August 2020, the Group's cash balance was £1.9m.

The debt balance of £2.9m (2019: £3.6m) mostly relates to a vendor loan that part-financed the acquisition of InvestmentNews in August 2018. This will continue to be repaid in equal monthly instalments until 31 August 2021.

At 30 June 2020, due to reduced actual and forecast revenues resulting from the COVID-19 pandemic, an indicator of impairment was identified in respect of goodwill. As a result, a review for impairment was performed and an impairment of £6.6m, was recognised on a value in use basis. In estimating value in use, a discount rate of 16% (31 December 2019, 14%) was used. The movement in the intangible asset value as a result of the impairment gives the Group a net deferred tax asset position of £1.2m.

 

Principal risks and COVID-19

 

The COVID-19 pandemic and measures taken to contain it have had an unprecedented impact on the UK and US economy. The business took immediate action to mitigate the impact of the pandemic on the Group, its employees, customers and other stakeholders. Key measures included:

 

-     All live events were cancelled across all countries in which Bonhill operates.

 

-     All employees have been working from home since the lockdown was announced in March 2020. The transition to remote working has had no significant impact on the operational performance of the business and productivity and engagement has increased as a result.

 

-     Deferral of VAT payments of £0.4m and PAYE payments of £0.9m. The PAYE payments will be made in H2 20 and the VAT in H1 21.

 

-     Furloughing 16 employees, predominantly in roles relating to live events, from 6 April under the Coronavirus Job Retention Scheme.

Due to the uncertainty surrounding COVID-19, business risk is expected to continue into the second half of 2020. In order to further mitigate the impact of this, and to allow the Company to return to its previous performance levels, the decision has been made to convert all future event for 2020 to virtual.

 

Additionally, we have increased our credit checks for both new and existing customers. This will allow us to maintain up-to-date information on our customer base and protect our working capital should a credit rating deteriorate.

 

Other than COVID-19 related risks, the directors do not consider that the principal risks and uncertainties described in the Company's annual report for the year ended 31 December 2019 have changed. A detailed explanation of the risks summarised above, and how the Group seeks to mitigate the risks, can be found on pages 30 to 33 of the Company's annual report which is available at www.bonhillplc.com.

 

Sarah Thompson

Chief Financial Officer

 

 

 

Condensed consolidated statement of comprehensive income

For the 6 month period ended 30 June 2020

 

 

6 month period ended 30 June

Year ended 31 December 2019

 

2020

2019

Statutory results

 

£'000

£'000

£'000

 

(unaudited)

(unaudited)

(audited)

 

 

 

 

Revenue

7,760

10,743

24,429

Cost of sales

(1,725)

(3,981)

(8,156)

 

 

 

 

Gross Profit

6,036

6,762

16,273

 

77.8%

62.9%

66.6%

 

 

 

 

Net operating expenses

(9,217)

(8,015)

(17,598)

Depreciation

(73)

(63)

(104)

Amortisation

(1,228)

(853)

(2,077)

Impairment of intangible assets

(6,593)

-

-

Share based payments

79

(70)

(149)

 

 

 

 

Operating Loss

(10,995)

(2,238)

(3,654)

 

 

 

 

Finance costs

(146)

(204)

(491)

 

 

 

 

Loss before tax

(11,141)

(2,442)

(4,145)

 

 

 

 

Tax

1,232

60

-

 

 

 

 

Loss after tax

(9,909)

(2,382)

(4,145)

 

Other comprehensive income:

 

 

 

Exchange differences on translating foreign operations

954

6

(455)

 

 

 

 

Total comprehensive income/(loss) for the year

(8,955)

(2,376)

(4,600)

Basic loss per share attributable to the owners of the parent

(15.13p)

(5.85p)

(9.28p)

 

 

 

Consolidated statement of financial position

At 30 June 2020

 

 

 

30 June 2020
(Unaudited)

 

30 June 2019
(Unaudited)

 

 

 

 

£'000

 

£'000

 

 

£'000

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

Goodwill

 

11,525

 

20,016

 

 

17,109

Other intangible assets

 

9,887

 

10,690

 

 

10,392

Property, plant and equipment

 

268

 

183

 

 

343

Deferred tax asset

 

1,238

 

326

 

 

459

Right-of-use asset

 

1,107

 

1,479

 

 

1,493

 

 

24,025

 

32,694

 

 

29,796

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Trade and other receivables

 

7,173

 

7,641

 

 

8,070

Cash and cash equivalents

 

3,446

 

5,711

 

 

1,891

 

 

10,620

 

13,352

 

 

9,961

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

34,645

 

46,046

 

 

39,757

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

Lease liability

 

(321)

 

(947)

 

 

(712)

Deferred tax liability

 

-

 

(2,738)

 

 

(464)

Borrowings

 

(278)

 

(1,891)

 

 

(1,046)

 

 

(599)

 

(5,576)

 

 

(2,222)

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Lease liability

 

(869)

 

(602)

 

 

(23)

Trade and other payables

 

(7,525)

 

(5,974)

 

 

(5,265)

Income tax liability

 

(17)

 

(43)

 

 

(1,568)

Borrowings

 

(2,610)

 

(1,756)

 

 

(888)

 

 

(11,021)

 

(8,375)

 

 

(7,744)

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

(11,621)

 

(13,951)

 

 

(9,966)

 

 

 

 

 

 

 

 

NET ASSETS

 

23,024

 

32,095

 

 

29,791

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

Share capital

 

986

 

486

 

 

486

Share premium account

 

1,759

 

-

 

 

-

Share option reserve

 

147

 

138

 

 

217

Merger reserve

 

1,976

 

-

 

 

1,976

Other reserves

 

104

 

104

 

 

104

Retained earnings

 

17,519

 

31,327

 

 

27,429

Foreign exchange reserve

 

533

 

40

 

 

(421)

TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT

 

23,024

 

32,095

 

 

29,791

 

 

 

Consolidated statement of changes in equity

For the 6 month period ended 30 June 2020

 

 

Share capital

Share premium

Share option reserve

Merger Reserve

Other reserves

Retained earnings

Foreign exchange reserve

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

Balance as at 1 January 2019

343

26,715

68

 

4,086

(8,343)

34

22,903

 

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

 

 

(2,382)

 

(2,382)

Other comprehensive income

 

 

 

 

 

 

6

6

Issue of share capital

143

11,857

 

 

 

 

 

12,000

Share issue costs

 

(524)

 

 

 

 

 

(524)

Capital reduction

 

(38,048)

 

 

(3,982)

42,030

 

-

Share option charge

 

 

70

 

 

 

 

70

 

 

 

 

 

 

 

 

 

Balance as at 30 June 2019

486

-

138

-

104

31,305

40

32,073

 

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

 

 

(1,764)

 

(1,764)

Other comprehensive income

 

 

 

 

 

 

(461)

(461)

Issue of share capital

 

(1,976)

 

1,976

 

 

 

-

Capital reduction

 

1,976

 

 

 

(1,976)

 

-

Share option charge

 

 

79

 

 

 

 

79

Dividend paid

 

 

 

 

 

(136)

 

(136)

 

 

 

 

 

 

 

 

 

Balance as at 31 December 2019

486

-

217

1,976

104

27,429

(421)

29,790

 

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

 

 

(9,909)

 

(9,909)

Other comprehensive income

 

 

 

 

 

 

954

954

Issue of share capital

500

1,759

 

 

 

 

 

2,259

Share option charge

 

 

(70)

 

 

 

 

(70)

 

 

 

 

 

 

 

 

 

Balance as at 30 June 2020

986

1,759

147

1,976

104

17,519

533

23,024

 

 

 

Consolidated statement of cash flows

For the 6 month period ended 30 June 2020

 

 

 

6 month period ended 30 June 2020
(unaudited)

 

6 month period ended 30 June 2019
(unaudited)

 

 

 

 

 

 

 

£'000

 

£'000

 

 

 

 

 

CASH USED IN OPERATIONS

 

(103)

 

484

Interest paid

 

(146)

 

(180)

Taxation paid

 

-

 

(38)

 

 

 

 

 

NET CASH GENERATED FROM OPERATING ACTIVITIES

 

(249)

 

266

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

Purchases of property, plant and equipment

 

(28)

 

(51)

Purchases of intangible assets

 

(143)

 

(13)

Net cash consideration for acquisition

 

-

 

(5,840)

Acquisition costs

 

-

 

(815)

Integration costs

 

-

 

(732)

Re-organisation costs

 

-

 

(100)

 

 

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

 

(171)

 

(7,551)

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

Repayment of borrowings

 

(816)

 

(949)

Repayment of lease liabilities

 

(449)

 

-

PPP Loan

 

939

 

-

Proceeds from issue of ordinary shares

 

2,259

 

9,484

 

 

 

 

 

NET CASH (USED IN)/GENERATED FROM FINANCING ACTIVITIES

 

1,933

 

8,535

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

1,555

 

1,344

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD

 

1,891

 

4,367

 

 

 

 

 

Non-cash foreign exchange movement

 

42

 

94

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

 

3,446

 

5,711

 

 

 

Notes to the cashflow statement

 

 

 

 

 

6 month period ended 30 June 2020

 

6 month period ended 30 June 2019

 

 

 

 

£'000

 

£'000

 

 

 

 

 

 

 

Loss after tax

(11,141)

 

(2,382)

 

 

 

 

Adjustments for:

 

 

 

Tax

 

 

 

-

 

(60)

Finance costs

146

 

204

Amortisation and impairment

7,821

 

853

Depreciation of property, plant and equipment

73

 

63

Share-based payment charge

(79)

 

70

Other exceptional costs

 

 

-

 

1,639

 

 

 

 

Operating cash flows before movements in working capital

(3,181)

 

387

 

 

 

 

Movement in receivables

978

 

666

Movement in payables

2,100

 

(569)

 

 

 

 

 

 

 

CASH FLOWS USED IN OPERATIONS

 

(103)

 

484

 

 

 

 

 

 

 

 

 

Notes to the accounts

 

1. General information

The financial information set out above does not constitute the Company's statutory accounts for the 6-month period ended 30 June 2020 or the 6-month period ended 30 June 2019. Statutory accounts for the year ended 31 December 2019 have been reported on by the Independent Auditor.  The Independent Auditor's Report on the Annual Report and Financial Statements for the year ended 31 December 2019 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.   Statutory accounts for the year ended 31 December 2019 have been filed with the Registrar of Companies.

 

2. Accounting policies

Basis of preparation

The financial information presented in this announcement has been prepared in accordance with the recognition and measurement requirements of EU Endorsed International Financial Reporting Standards and IFRIC interpretations ("IFRS") and the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

 

The principal accounting policies adopted in the preparation of the financial information in this announcement are unchanged from those used in the Company's financial statements for the year ended 31 December 2019 and are consistent with those that the Company is expected to adopt in the preparation of its financial statements for the year ending 31 December 2020.

 

Going concern

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

 

3. Revenue and segmental analysis

For executive management purposes, the business has three reportable segments being the Bonhill UK business, which comprises Governance and Business Solutions, the InvestmentNews business and the Last Word Media business. Further analysis of revenue has been performed by core proposition and country.

 

 

 

 

 

 

 

 

 

6 month period ended 30 June 2020

 

6 month period ended 30 June 2019

 

£'000

 

£'000

 

 

 

 

Analysis of revenue by core propositions

 

 

 

 

 

 

 

Business information

5,345

 

6,100

Live Events

1,779

 

4,258

Data and Insight

636

 

385

Total

7,760

 

10,743

 

 

6 month period ended 30 June 2020

 

6 month period ended 30 June 2019

Analysis by country

£'000

 

£'000

 

 

 

 

United Kingdom

3,380

 

2,604

United States

3,825

 

7,098

Europe

108

 

606

Asia

447

 

435

Total

7,760

 

10,743

 

 

 

6 months ended

Bonhill UK

InvestmentNews

Last Word Media

Total

30 June 2020

Unaudited

Unaudited

Unaudited

Unaudited

 

£'000

£'000

£'000

£'000

Reportable segmental income statement

 

 

 

 

Revenue

1,211

3,827

2,722

7,760

Gross profit

816

3,171

2,049

6,036

Operating loss

(2,052)

(1,442)

(908)

(4,403)

Loss before tax

(1,653)

(1,977)

(918)

(4,549)

 

 

 

 

 

6 months ended 30 June 2019

Bonhill UK

InvestmentNews

Last Word Media

Total

 

Unaudited

Unaudited

Unaudited

Unaudited

 

£'000

£'000

£'000

£'000

Reportable segmental income statement

 

 

 

 

Revenue

2,067

6,804

1,872

10,743

Gross profit

959

4,484

1,319

6,762

Operating profit /(loss)

(2,386)

292

(144)

(2,238)

Profit/(loss) before tax

(2,387)

124

(119)

(2,382)

 

 

4. Earnings per share

Basic earnings per share is calculated by dividing the loss attributable to owners of the parent by the weighted average number of ordinary shares in issue during the period.

 

 

Based on statutory earnings

6 month period ended 30 June 2020

 

6 month period ended 30 June 2019

 

£'000

 

£'000

 

 

 

 

Loss attributable to owners of the parent

(9,909)

 

(2,382)

 

 

 

 

Weighted average number of ordinary shares in issue

65,513,564

 

40,693,032

 

 

 

 

Basic loss per share (pence per share)

(15.13p)

 

(5.85p)

 

 

 

 

 

 

5. Share capital

 

 

Issued and fully paid ordinary share of 1p each

 

Number

 

£'000

 

 

 

 

As at 31 December 2018

                 34,299,978

 

                             343

Shares issued during the 6 month period

                 14,285,714

 

                             143

As at 30 June 2019 and 31 December 2019

                 48,585,692

 

                             486

Shares issued during the 6 month period

                 50,000,000

 

                             500

As at 30 June 2020

                 98,585,692

 

                             986

 

Share capital as at 30 June 2020 amounted to £1.0 million. During the period, the Group issued 50 million shares at nominal value of 1p per share at a consideration of £0.5m.

 

 

 

6. Lease

 

The Group recognises a right-of-use asset and lease liability under IFRS 16.

 

 

 

 

 

 

 

Right-of-use asset

 

 

 

£'000

Carrying value as at 30 June 2019

 

 

 

1,479

Additions to right-of-use assets

 

 

 

418

Amortisation charged

 

 

 

(385)

Foreign exchange impact of revaluation

 

 

(19)

Carrying value as at 30 June 2019

 

 

 

1,493

Additions to right-of-use assets

 

 

 

-

Amortisation charged

 

 

 

(425)

Foreign exchange impact of revaluation

 

 

39

Carrying value as at 30 June 2019

 

 

 

1,107

 

 

 

 

 

 

 

 

 

 

 

 

Lease liability

 

 

 

 

£'000

Carrying value as at 30 June 2019

 

 

 

1,549

Additions to lease liability

 

 

 

418

Interest charged

 

 

 

 

35

Repayments made

 

 

 

(370)

Foreign exchange impact of revaluation

 

 

(32)

Carrying value as at 31 December 2019

 

 

1,600

Additions to lease liability

 

 

 

-

Interest charged

 

 

 

 

28

Repayments made

 

 

 

(463)

Foreign exchange impact of revaluation

 

 

25

Carrying value as at 30 June 2020

 

 

 

1,190

 

 

 

 

7. Availability

Further copies of this announcement are available on the Company's website, www.bonhillplc.com

 

 

 

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