TIDMCPP
RNS Number : 2494T
CPPGroup Plc
24 March 2021
24 March 2021
CPPGroup Plc
("CPP", "the Group" or "the Company")
FULL YEAR REPORT FOR THE YEARED 31 DECEMBER 2020
Resilient performance; continued strategic progress and
recommencement of dividends
CPP Group (AIM: CPP), the multinational provider of personal
protection and insurance products and services, is pleased to
announce its full year results for the 12 months ended 31 December
2020.
Highlights
-- Group revenue increased by 2% to GBP141.1 million (2019: GBP138.4 million)
-- Revenue from Ongoing Operations increased by 5% to GBP130.1
million (2019 restated: GBP123.9 million).
-- Adjusted EBITDA increased by 17% to GBP10.3 million (2019:
GBP8.7 million). Start-up losses from our investment in business
growth projects totalled GBP3.1 million (2019: GBP3.3 million)
resulting in an EBITDA of GBP7.2 million (2019: GBP5.4
million).
-- Operating profit increased to GBP3.3 million (2019: GBP1.6 million).
-- Profit before tax increased to GBP2.0 million (2019: GBP1.1 million).
-- Cash balance of GBP21.9 million as at 31 December 2020 (2019: GBP22.0 million).
-- Recommencement of dividend payment - the first since 2011,
with a proposed final dividend of 25 pence per ordinary share.
Strategic progress
-- Effective response to COVID-19 with continued new business
wins and pipeline growth in a challenging economic environment.
-- Strong recovery in India, the Group's main market, with a
better than expected return of partner and consumer confidence in
the second half.
-- Resilient performance of the renewal books in our UK and EU
markets, and an encouraging performance in our Turkish
operation.
-- Partner base grew 10%, demonstrating our value in times of wider economic uncertainty.
-- Customer numbers grew 11% to 11.7 million, showing continued
consumer demand for our products and services despite the impact of
COVID-19.
-- Operational restructuring commenced in Q1 2021 to generate
efficiencies in our Spain, Mexico and Malaysia businesses.
Financial and non-financial highlights
Constant
31 December 31 December currency
GBP millions 2020 2019 Change change(1)
----------------------------- ----------- ------------ ------ ----------
Financial highlights:
Group
Revenue 141.1 138.4 2% 7%
Adjusted EBITDA(2,3) 10.3 8.7 17% 26%
Investment in business
growth projects(4) (3.1) (3.3) 6% 6%
EBITDA(2) 7.2 5.4 32% 49%
Operating profit 3.3 1.6 103% 151%
Profit before tax 2.0 1.1 78% 139%
Basic loss per share(5)
(pence) (19.3) (11.7) (65)% n/a
Dividend per share 25.0 - n/a n/a
(pence)(6)
Net funds(7) 15.3 14.9 3% n/a
Segmental revenue
Ongoing Operations(8) 130.1 123.9 5% 11%
Restricted Operations(8) 11.0 14.5 (24)% (24)%
Non-financial highlights:
Customer numbers (millions) 11.7 10.6 11% n/a
============================= =========== ============ ====== ==========
1. The constant currency basis retranslates the previous year
measures at the average actual exchange rates used in the current
financial year. This approach is used as a means of eliminating the
effects of exchange rate movements on the year on year reported
results.
2. EBITDA represents earnings before interest, taxation,
depreciation, amortisation and exceptional items.
3. Adjusted EBITDA excludes costs associated with investments in business growth projects.
4. Investment in business growth projects of GBP3.1 million
(2019: GBP3.3 million) comprises start-up costs relating to the UK
GBP1.1 million (2019: GBP1.2 million), Blink GBP1.3 million (2019:
GBP1.2 million), Bangladesh GBP0.2 million (2019: GBP0.2 million),
Southeast Asia GBP0.2 million (2019: GBP0.4 million) and our share
of losses in KYND GBP0.3 million (2019: GBP0.3 million).
5. 2019 basic loss per share has been restated to reflect the
impact of the share consolidation completed on 29 May 2020. Further
details are provided in note 2 of the condensed consolidated
financial statements.
6. Final dividend proposed which is expected to be paid on 12
May 2021, with an ex-dividend date of 8 April 2021.
7. Net funds comprise cash and cash equivalents of GBP21.9
million (2019: GBP22.0 million), a borrowing asset of GBP0.1
million (2019: GBPnil) and net investment lease assets of GBPnil
(2019: GBP0.2 million) less lease liabilities of GBP6.7 million
(2019: GBP7.3 million).
8. 2019 has been restated for the transfer of an Italian renewal
book from Restricted Operations to Ongoing Operations. Refer to
note 2 of the condensed consolidated financial statements.
Jason Walsh, CEO of CPP Group, commented:
"While we saw major disruption from COVID-19 in the second
quarter, the response of our teams, resilience of our model, and
improving conditions in key markets meant we were able to deliver a
robust performance in the second half and solid numbers for the
full year.
The business is built on the strength of its partnerships and
during the year we were not only able to maintain our base but grow
it. This demonstrates the value large-scale firms attach to our
offering as a means to enhance their competitive advantage in times
of heightened economic uncertainty. The rate of recovery from the
pandemic will vary by territory and we recognise the need to
continue managing the situation with care. However, there are
positive signs across our key markets that give us confidence in
our ability to continue to deliver progress.
The reinstatement of the dividend is an important moment for
CPP. After many years of reorganisation and investment, the Group
is now positioned for what we expect to be a period of continued
growth, underpinned by our businesses in India, Turkey, and the UK.
With the support of a robust balance sheet and solid cash
generation, the Board are confident that the time is right for a
stronger focus on shareholder returns in which the dividend has a
key role.
While the Group currently does not generate positive EPS -
leading to an uncovered dividend on that basis - future profit
growth and progressive normalisation of the tax position will allow
movement towards conventional dividend cover to follow. The Board
has thus proposed the final dividend at a level which it is
confident can be grown in the years ahead ."
Enquiries:
CPPGroup Plc via Alma PR
Jason Walsh, CEO
Oliver Laird, CFO
Sarah Atherton, Group Company Secretary
Liberum Capital Limited (Nominated Adviser +44 (0)20 3100
& Sole Broker) 2000
Richard Lindley
Lauren Kettle
Kane Collings
Christopher Whitaker
+44 (0)20 3405
Alma PR (Financial PR Adviser) 0205
Josh Royston cpp @almapr.co.uk
Caroline Forde
David Ison
About CPP Group:
CPP Group takes away many of the stresses and strains of daily
life for millions of people across the globe. In collaboration with
selected partners in each country in which the Group operates, it
develops, aggregates, offers and supports a range of personal
protection and insurance products, which are sold alongside, or
packaged with, the core product offerings of the Group's partners.
CPP is listed on AIM, operated by the London Stock Exchange.
For more information on CPP visit
https://international.cppgroup.com
REGISTERED OFFICE
CPPGroup Plc
6 East Parade
Leeds
LS1 2AD
Registered number: 07151159
Chairman's Statement
I am pleased to present my first report as Chairman, having
joined the Board in mid-November and assumed this role at the end
of January 2021. In the time that I have been involved with the
business I see evidence of a strategy evolving, as well as
products, services, partners and operating capabilities that I am
confident will generate growth in the next few years, as well as
satisfactory returns to shareholders.
A year ago, few people had comprehended the implications of the
COVID-19 pandemic and its impact on companies and their customers.
It is to the considerable credit of the management and our people
that, having suffered from the impact of COVID-19, particularly in
the second quarter, the Group was able to recover and operate so
strongly in the latter part of the year; a performance that
provides encouragement when considering the outlook for 2021 and
beyond.
At the time of writing, we remain in the grip of the pandemic,
though news regarding vaccines provides hope that a return to a
more normal environment will take place over the next few months.
In the meantime, we remain focused on the health and safety of our
colleagues and we continue to follow government guidelines in each
of the countries in which we operate.
Results
The operational progress is reflected in the results considered
in this Full Year Report. Revenues increased to over GBP140
million, driven by a growth in customer numbers and I am also
pleased that, in the current climate, we continue to add new
partnerships such as Gallagher in the UK. Combined with improved
operational efficiency, this has resulted in EBITDA of GBP7.2
million (2019: GBP5.4 million). CPP retains a strong balance sheet,
with cash amounting to GBP21.9 million as at 31 December 2020
(2019: GBP22.0 million).
People
These achievements could not have been delivered had it not been
for the commitment and fortitude of our colleagues throughout the
organisation. On behalf of the Board, I offer my thanks to all of
them.
The Board has seen several changes with Simon Thompson joining
as a Non-Executive Director in June, prior to my own appointment in
November. After the financial year ended, Sir Richard Lapthorne
retired as Chairman, a role he had held since May 2016, and Nick
Cooper also left as a Non-Executive Director at the end of
February. I would like to thank them both for their service to the
Company and to wish them well.
Dividend
I am pleased to announce that the Board is recommending the
re-introduction of a dividend for the first time in almost ten
years. This reflects confidence in the future of the Group and the
prospect of rising profitability and cash generation. The proposed
final dividend for the year is 25 pence per ordinary share.
Whilst wholly contingent on financial results, the economic
climate in the countries in which we operate and there being no
material adverse and unforeseen developments, it is the Board's
intention to increase the dividend paid over the next few
years.
David Morrison
Chairman
23 March 2021
Chief Executive Officer's Statement
2020 was a year characterised by robust financial and
operational progress despite the disruption caused by the COVID-19
pandemic. We are growing the business and building value for
shareholders and, while the pandemic meant we had to adapt rapidly
to new ways of working as well as with changing consumer
behaviours, our organisational culture and focus on forging
long-lasting relationships with our partners meant we were able to
navigate its challenges, grow and end the year a stronger
business.
Revenues for the year were up 7%, on a constant currency basis,
to GBP141.1 million, underpinned by growth in our customer base of
11% to 11.7 million. This performance bodes well for what we can
achieve as trading conditions begin to normalise. India, the
Group's main market, was again the major contributor after a
stronger than anticipated recovery in the second half, supported by
a steady performance in our Globiva and Turkish operations and from
a solid performance in the renewal books in the UK and EU
markets.
The pandemic will have far-reaching impacts on the global
economy. We will need to monitor this closely, and further work
will be done from an organisational perspective to position the
business for sustainable and profitable long-term growth, but CPP
is a resilient and efficient business capable of delivering against
the most difficult of backdrops.
With the hard work that has gone into transforming the business
in recent years, signs of recovery from the pandemic across several
of our markets, favourable long-term market trends and continued
traction across our growth markets, there is a sense of optimism in
the business.
Crossing an inflexion point
In last year's results, we reported that adjusted EBITDA from
our Ongoing Operations was on a par with EBITDA from our Restricted
Operations. The former has now surpassed the latter, marking the
moment where the Group has overcome the decline in its UK renewal
book and is now on a growth trajectory underpinned by the progress
being made in India. Our legacy business remains an important part
of the Group, but the key measures of value from a profit and cash
perspective now lie within our ongoing business.
Our operating model across the Group is based on strong,
self-sustainable and largely independent country businesses with
vertical integration of people and systems, overseen by our central
team from a governance, assurance and finance perspective.
India
India remains the standout performer. While second quarter sales
activity fell to less than 30% of normal levels because of lockdown
conditions, we saw a better-than-expected return of partner and
consumer confidence in the second half, leading to sales levels
through Q4 surpassing the previous year. Alongside the resurgence
in demand for protection for mobile phones and household
appliances, we also saw encouraging uptake of our products tailored
to the largely untapped rural market.
Globiva, the Indian business process management company in which
we own a majority stake, saw a similar uptick in the second half as
government restrictions eased. The number of billable seats is back
up to over 2,000, having fallen to a low of 975 during the local
lockdown, from a high of 2,300 in the first quarter pre-pandemic.
In August, the founders of Globiva exercised their right to
repurchase 10% of the company's share capital, reducing CPP's
controlling interest to 51%, demonstrating the confidence they have
in the prospects of the business.
The long-term structural drivers around the growth of the Indian
middle class and their associated spending patterns remain intact,
and these factors alongside the fact that our two main partners in
India, Bajaj Finance Limited (Bajaj) and SBI Cards (SBI), have
outperformed the rest of the market, will ensure that CPP remains
well-placed to benefit from this expanding consumer segment.
Turkey
In Turkey, we benefited from the diversity of our partner base
and product range in the period, faring well overall despite the
impact of the pandemic. We continued to expand our existing
relationships, most notably with Denizbank, and explore new ways to
grow our presence in the market through signing new partners and
introducing new products and services into the sector.
UK
We continued to make progress in the year in establishing our
new business in the UK. The integration of Business & Domestic
Insurance Services (B&D) is now complete. We have made
encouraging headway in signing new partners in our home market, and
the focus for 2021 will be on building those opportunities.
We have increasingly seen the new and legacy businesses in the
UK complementing each other and in 2021 we will be delivering
greater synergies and efficiencies between them under a single
business structure and leadership.
Operational changes
In line with our commitment to drive operational efficiency
across the Group and to maximise value from our assets, as
previously announced, we closed our small Southeast Asia office in
May. This activity has continued in Q1 2021 where we have further
restructured our EU Hub to provide operational focus and
efficiencies and ceased our new business efforts in Mexico where we
will instead focus on running the renewal book efficiently with a
smaller team. Having built the parametric platform along with an
innovative product set and strong pipeline the Blink founders have
decided it is the right time to look to new opportunities away from
CPP. We will bring the Blink operations under central management to
further leverage our expertise in distribution and drive growth in
the parametric product set. In addition, in Q2 2021 we intend to
close our Malaysian operation where the customer base has reduced
to a level that is economically unviable. We will continue to apply
strict resource allocation methodology to our operations, ensuring
we focus investment in the areas of the business that have the
strongest prospects for delivering strong, sustainable and
profitable medium to long-term growth.
Growing and strengthening our partner base
The fact we were not only able to maintain our partner base but
grow it demonstrates the value our business partners attach to our
services, even as their own priorities shifted and evolved in
response to the pandemic.
As the key route to market for our products, our partners are at
the heart of everything we do - the success of the business hinges
on our ability to understand their customers' needs and provide
products and services that meet them. Our strategy is to widen our
addressable market by adding new partners while strengthening our
relationships with existing ones, and expanding the products we
provide to them. The last year has both tested those relationships
and strengthened them, as we have been able to respond to the
impact of the pandemic on their businesses and customers.
In India, for example, we further strengthened our relationships
with Bajaj and SBI, two key regional partners. We have worked
closely with Bajaj through the pandemic which helped drive the
recovery in the second half, and with SBI we have tweaked our
product offering to better suit the needs of their customers during
this health crisis. Both Bajaj and SBI are excellent examples of
large-scale businesses with which we have established strong
partnerships and have incrementally built revenues over time.
We signed partnerships with Vakifbank, the third largest bank in
Turkey, Akbank and Türkiye Sigorta, a state-owned insurance
company, all of which we expect to develop in 2021. These and other
new partners reflect the very healthy levels of interest we are
seeing in Turkey from financial services businesses looking to add
additional revenue streams and bolster their competitive advantage
through complementary products and services.
In the UK, we signed several new partnerships including
Gallagher and RAC. Being trusted by organisations of this calibre
is a valuable endorsement of the quality of our offering in our
home market, and we look forward to continuing to deepen our
relationships with them while developing other opportunities
elsewhere.
Our culture
Our people are critical to the commercial success of the
business and we have worked hard in recent years to bring everyone
in the Group closer together and cultivate a supportive and
inclusive culture built on trust and clear communication. With the
sudden and widespread shift to remote working that took place in
the first half, I have no doubt that the investment that has been
made in our culture was a key factor in the success of the
transition and the high levels of productivity and service levels
that were subsequently achieved.
Our focus in 2020 has been on protecting the wellbeing of our
colleagues around the world. With most having worked from home for
the majority of the year, we have emphasised the importance of
connection and collaboration, and measured performance against
output and contribution rather than hours at a computer. Our
approach is epitomised by our global conversation initiative, in
which we spoke to colleagues from around the world to find out what
is important to them, what their concerns are and how we can help
them cope with change. From there, we were able to formulate new
ways of thinking and innovating that will be of benefit to the
Group for years to come.
I would like to take this opportunity to thank our colleagues
for the way they have responded to the pandemic and for their hard
work and dedication in driving the business forward in challenging
circumstances.
Financial performance
Group revenue increased by 7%, on a constant currency basis, to
GBP141.1 million (2019: GBP138.4 million) reflecting the strong
performance in our key growth market, India, both in our core
business and in Globiva. This was supported by a resilient
performance in our Turkish operation and the consistent performance
of our renewal portfolios in the UK and EU. This revenue
performance was underpinned by continued growth in our customer
numbers, which increased 11% to 11.7 million (2019: 10.6 million)
and a renewal rate of 68.9% (2019: 68.7%). The growth in our
customer base and the renewal rate remaining steady, despite the
impact of the pandemic, is an endorsement of the continued customer
demand for the products we create and distribute.
Our customer base of 11.7 million comprises cohorts of customers
that are different in nature: 3.4 million are via our traditional
customer model where the sale is typically made alongside the
partner's core product and we retain the right to renew the
customer at the end of the policy; 6.5 million are one-time
point-of-sale products (for example, sold alongside a loan for a
mobile phone or a consumer durable); and 1.8 million are wholesale
customers which typically attract a lower premium as they are
offered the product by partners as part of a larger package of
services.
EBITDA has increased 49%, on a constant currency basis, to
GBP7.2 million (2019: GBP5.4 million). The improvement reflects
growth in India along with a carefully managed and reducing central
cost base partially offset by the ongoing decline in our UK and EU
renewal books. Adjusted EBITDA, which excludes losses from
investments for business growth projects, has increased to GBP10.3
million (2019: GBP8.7 million). Operating profit has increased to
GBP3.3 million (2019: GBP1.6 million).
Profit before tax has increased to GBP2.0 million (2019: GBP1.1
million) however, our effective tax rate (ETR) remains high in 2020
at 179% (2019: 183%) which is driving the reported loss for the
Group of GBP1.6 million (2019: loss of GBP1.0 million). We expect
our ETR to reduce to less than 100% in the short to medium-term as
our loss-making operations reduce their losses through either
business development or restructuring activities, such as those
already undertaken in 2021, and volatility from one-off charges is
lowered. The ETR will remain higher than the UK statutory rate of
tax due to the jurisdictions in which profits are generated.
Our Restricted Operations are in natural decline. As announced
in last year's results, we decided to take more proactive action
with certain elements of the historic renewal book in the UK which
reduced renewals in 2020. As a result, and as expected, revenue and
EBITDA in this segment were 24% and 42% lower than in 2019
respectively. The proactive programme with our customers will
continue in 2021 which is expected to further accelerate the
decline in our customer base and revenues.
Current trading and outlook
During 2020, the COVID-19 pandemic presented us with unexpected
challenges. As a Group, we responded to these quickly and
effectively and as a result, we were able to deliver strong growth
in customer numbers, revenues and EBITDA, while being mindful at
all times of the safety and wellbeing of our colleagues
globally.
Although the pandemic persists, the ability to adapt and
innovate during 2020 in a variety of ways, as uniquely required by
each of the markets we operate in, gives us confidence that we will
achieve further solid progress in 2021. This is a view supported by
the trends we are seeing in the business in our trading performance
year-to-date, notably in our most important market, India.
Our balance sheet is strong and this, combined with our
confidence in the outlook, is reflected in our decision to
recommence dividend payments for the first time since 2011.
Jason Walsh
Chief Executive Officer
23 March 2021
Financial and Operational Review
Overview
The Group's financial performance in 2020 has shown good
progress on the previous year. This performance has been achieved
in the face of the pandemic where new sales in all of our markets
were curtailed in the early months of the crisis. The subsequent
recovery in these markets has been solid and is testament to the
value customers and business partners see in our products.
Group revenues increased 7% on a constant currency basis to
GBP141.1 million (2019: GBP138.4 million), with growth being driven
by our Indian market. EBITDA across the Group improved to GBP7.2
million which is a 49% constant currency increase on the previous
year (2019: GBP5.4 million). The improvement reflects growth in
India along with a carefully managed and reducing central cost
base. These advances are offset by the ongoing decline in our UK
and EU renewal books. The Group's adjusted EBITDA for 2020, which
excludes losses associated with business growth projects, is
GBP10.3 million (2019: GBP8.7 million). This trading progress has
led to operating profit more than doubling to GBP3.3 million (2019:
GBP1.6 million).
As our businesses develop this is driving an improvement in
EBITDA margins through a combination of profitable growth, reduced
losses and lower central costs. We expect this trend to continue
with EBITDA margins improving in the coming years. This will be
achieved through our loss-making businesses moving into breakeven
or profitable positions in the short to medium-term, and margins
being further augmented by increasing our share of the value chain
through investments like Globiva.
2020 2019
-------------------------------------------- ------ ------
Revenue (GBP millions) 141.1 138.4
-------------------------------------------- ------ ------
Gross profit (GBP millions) 37.0 40.5
-------------------------------------------- ------ ------
EBITDA (GBP millions)(1) 7.2 5.4
-------------------------------------------- ------ ------
Operating profit (GBP millions) 3.3 1.6
-------------------------------------------- ------ ------
Profit before tax (GBP millions) 2.0 1.1
-------------------------------------------- ------ ------
Taxation (GBP millions) (3.6) (2.1)
-------------------------------------------- ------ ------
Loss for the year (GBP millions) (1.6) (1.0)
-------------------------------------------- ------ ------
Basic loss per share (pence)(2) (19.3) (11.7)
-------------------------------------------- ------ ------
Cash generated by operations (GBP millions) 6.2 2.8
-------------------------------------------- ------ ------
Dividends (pence)(3) 25.0 -
-------------------------------------------- ------ ------
1. Excluding depreciation, amortisation and exceptional items.
2. 2019 has been restated to reflect the impact of the share
consolidation completed on 29 May 2020. Further details are
provided in note 2 of the condensed consolidated financial
statements.
3. Final dividend proposed
Gross profit has reduced by 9% to GBP37.0 million (2019: GBP40.5
million). As a result, our gross profit margin has reduced to 26%
(2019: 29%) reflecting the growth in our Indian business which has
higher costs of acquisition associated with sales than the UK and
EU renewal book businesses it is replacing. We expect our gross
profit margins to continue to reduce (albeit at a lower rate) in
the medium-term whilst growth is predominantly driven by India and
the legacy renewal books diminish.
The cost base continues to be proactively managed with
administrative expenses, before depreciation and exceptional items,
reducing by 15% in the year. This reduction follows strict controls
implemented on discretionary expenditure and the realisation of
savings from streamlining the EU Hub operation in 2019. The focus
on costs will be maintained in 2021 with further savings expected
to be driven by operational changes in our EU Hub and action being
taken on under-performing markets that continue to require central
support.
As a result, EBITDA has increased to GBP7.2 million (2019:
GBP5.4 million).
Depreciation charges have increased marginally to GBP3.5 million
(2019: GBP3.3 million) mainly due to Globiva's larger operational
footprint as it continued to grow throughout 2020.
Exceptional items charged to operating profit total GBP0.4
million (2019: GBP0.5 million) which include GBP0.8 million
goodwill write-off in Blink following the impact COVID-19 has had
on travel insurance which is its primary market and a GBP0.1
million goodwill impairment of Valeos. In addition, there were
GBP0.2 million of restructuring costs relating to the closure of
our Southeast Asia operation. These costs have been partly offset
by a GBP0.7 million credit relating to the reversal of historical
customer redress liabilities.
The growth in EBITDA, in conjunction with the exceptional items
and depreciation charges, results in operating profit increasing by
151% on a constant currency basis to GBP3.3 million (2019: GBP1.6
million).
Net interest and finance charges have decreased to net GBPnil
(2019: GBP0.5 million) due to foreign exchange movements. Other
gains and losses are a charge of GBP1.3 million (2019: GBPnil)
reflecting the one-time impact of cumulative foreign exchange
balances being reclassified from reserves to the income statement
following the closure of dormant overseas branches. Due to the
one-off nature this charge has been treated as an exceptional item
outside of operating profit.
As a result, the Group's profit before tax was GBP2.0 million
(2019: GBP1.1 million) and our loss after tax was GBP1.6 million
(2019: GBP1.0 million).
Quarterly performance
Q1 Q2 Q3 Q4 FY
2020 2020 2020 2020 2020
REVENUE GROWTH(1) GBP'm GBP'm GBP'm GBP'm GBP'm
--------------------------- --------- ------- ------- ------- -------
Ongoing Operations
India 74% (31)% 8% 22% 16%
EU Hub (20)% (16)% (15)% (15)% (16)%
Turkey 1% (5)% 15% 21% 9%
Rest of World 35% 12% 19% 17% 20%
--------------------------- --------- ------- ------- ------- -------
Total Ongoing Operations 53% (27)% 5% 18% 11%
Restricted Operations (34)% (25)% (21)% (13)% (24)%
--------------------------- --------- ------- ------- ------- -------
Group revenue 41% (26)% 2% 15% 7%
--------------------------- --------- ------- ------- ------- -------
1. Revenue growth is on a constant currency basis compared to
the corresponding quarter in 2019.
Tax
In 2020 the tax charge is GBP3.6 million (2019: GBP2.1 million)
which is an effective tax rate (ETR) of 179% (2019: 183%). The high
ETR reflects that losses in our developing markets currently reduce
the overall Group profit before tax to a level that is lower than
the tax charges recognised in our profitable markets. This is
further exacerbated by Group policy that deferred tax assets should
only be recognised when profit forecasts indicate tax losses will
be utilised in the short-term. By their very nature, our developing
markets are investments for growth and profit expectations in the
short-term lead us not to recognise deferred tax assets in these
markets. Whilst the overarching trend is a reduction in losses and
central overheads, the ETR continues to be impacted by the level of
losses in markets which remain in development at the end of 2020
for which we are unable to get tax benefits through recognition of
deferred tax assets.
The Group's ETR is further impacted by additional factors such
as local tax rates applying to our profitable countries which are
higher than the UK corporate income tax rate of 19%. As the most
profitable of our markets, India is a contributor to the high ETR
with a local tax rate of 25.2%. In total, the tax charge includes
GBP1.7 million of Indian tax (2019: GBP1.2 million). The tax rates
in Turkey and the EU Hub are also higher than the UK statutory rate
which further adversely impacts our ETR.
As cash is increasingly generated in our overseas markets
repatriation planning to the UK is important as we re-establish a
dividend policy. In 2020, the tax charge included a provision for
withholding taxes arising on dividend repatriations of GBP0.8
million (2019: GBP0.3 million). The charge included GBP0.5 million
provided on distributions paid in 2020 and an additional GBP0.3
million is provided through deferred tax on distributions expected
to be paid in 2021. The majority of the withholding taxes arise on
distributions made by our Indian operations, however withholding
taxes have also been provided on expected Turkish and Italian
distributions.
Adjusted ETR
2020 2019
-------------- ----------------------------------- -------------------------------------
Exceptional Exceptional
Reported items(1) Adjusted Reported items(1) Adjusted
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
-------------- ---------- ----------- ---------- ---------- ------------- ----------
Profit before
tax 2.0 1.7 3.7 1.1 0.5 1.6
Tax 3.6 - 3.6 2.1 0.1 2.2
ETR 179% 99% 183% 134%
-------------- ---------- ----------- ---------- ---------- ------------- ----------
1. Refer to note 5 of the condensed consolidated financial
statements.
The total exceptional charges arising in the year of GBP1.7
million also had an adverse effect on the ETR as they were not
available for tax relief. The effect of these charges has been a
reduction in profit without a corresponding tax credit. Without
these one-off items in 2020, the Group's ETR would have been 99%
(2019: 134%), which demonstrates the reducing nature of the Group's
underlying ETR.
The ETR is expected to remain higher than the UK statutory tax
rate in future years as we continue to make profits in territories
with higher tax rates than the UK, provide for withholding taxes on
overseas distributions and continue to generate losses in
developing markets against which we are not able to recognise
deferred tax assets. However, overall, we expect a progressive
reduction in our ETR as our loss-making operations reduce losses
through either business development or restructuring activities,
such as those already undertaken in 2021, distributions from
overseas countries stabilise and volatility arising from one-off
charges are reduced.
Dividend
The Group performed resiliently in 2020 and is confident in its
ability to grow its revenue and profits going forward. In addition,
CPP's restructuring phase is now nearing completion and the level
of investment expenditure required to operate the existing business
will be on a declining trend from this point.
These factors have led to a review of the Group's capital
allocation policy and the Directors have proposed a final dividend
of 25 pence per ordinary share. The proposed final dividend is
subject to approval by shareholders at the AGM and is expected to
be paid on 12 May 2021 to all shareholders on the Register of
Members on 9 April 2021 with the ex-dividend date being 8 April
2021.
Cash flow and net funds
2020 2019
GBP'm GBP'm
--------------------------------------------- ------ ------
EBITDA 7.2 5.4
Exceptional items(1) (0.3) (0.5)
Non-cash items 1.5 1.6
Working capital movements (2.2) (3.7)
--------------------------------------------- ------ ------
Cash generated by operations 6.2 2.8
Tax (3.0) (1.7)
--------------------------------------------- ------ ------
Operating cash flow 3.2 1.1
Capital expenditure (including intangibles) (1.8) (3.7)
Lease repayments (1.7) (1.6)
Proceeds from Globiva partial disposal 0.3 -
Net finance revenues 0.4 0.1
Costs of refinancing (0.1) -
Net movement in cash(2) 0.3 (4.1)
--------------------------------------------- ------ ------
Net funds(3) 15.3 14.9
--------------------------------------------- ------ ------
1. Exceptional items represent cash costs relating to
restructuring; all other exceptional costs in the year were
non-cash.
2. Excluding the effect of exchange rates.
3. Net funds comprise cash and cash equivalents of GBP21.9
million (2019: GBP22.0 million), a borrowing asset of GBP0.1
million (2019: GBPnil) and net investment lease assets of GBPnil
(2019: GBP0.2 million) less lease liabilities of GBP6.7 million
(2019: GBP7.3 million).
The net funds position has increased to GBP15.3 million (2019:
GBP14.9 million), which includes cash of GBP21.9 million (2019:
GBP22.0 million). The Group has generated additional cash of GBP0.3
million in the year with increased cash generated by operations and
lower capital expenditure being partly offset by increased tax
payments.
Cash generated by operations has increased to GBP6.2 million
(2019: GBP2.8 million) reflecting the growth reported in EBITDA and
a reduced working capital outflow following a net benefit in the
year from India. Cash generated by operations includes a cash
outflow of GBP3.5 million (2019: GBP2.3 million) as we continued to
build capability in our investment for growth projects.
Tax paid has increased to GBP3.0 million (2019: GBP1.7 million)
due to profitable growth in India which increases the tax paid and
the payment of withholding taxes on overseas dividends to the
UK.
Capital expenditure has reduced to GBP1.8 million (2019: GBP3.7
million). This reflects a reduction in IT development, the
completion of projects in the prior year, and the focus of IT
investment being concentrated on the Indian product platform which
is largely being developed in-country at a lower cost than in the
UK.
The acquisition of Globiva included provision for the founders
to repurchase 10% of the share capital at a pre-agreed value on the
successful achievement of certain business targets. The targets
were met in early 2020 with the founders exercising their right and
paying GBP0.3 million to the Group.
The broadly flat cash profile demonstrates that cash generation
in markets like India and Turkey and our Restricted Operations
renewal book, together with ongoing cost efficiencies, has now
reached the point where it is sufficient to fund the costs
associated with our investments for growth operations and our
central cost base including Group IT. This improving profile of
cash generation will continue as our key markets continue to grow
and we reduce losses in our other markets through either successful
business development or appropriate management action.
As the Group's growth has shifted to overseas markets a material
amount of the cash balance is generated in India and Turkey along
with cash generated by the EU renewal books. These markets are
profitable which enables repatriation of funds to the UK. There are
tax costs associated with returning these funds to the UK with our
blended cost being approximately 10%. As a result of accounting
recognition principles, cash generated in India exceeds the profits
generated and available to distribute and therefore careful cash
planning is in place. This along with our regulatory requirements
in the UK, result in GBP2.1 million cash not being immediately
available to the Group, albeit the Indian funds are fully available
for use by the Indian business.
During the year the Group renewed its GBP5.0 million revolving
credit facility (RCF) for a further three-year term which in the
current economic environment was a strong endorsement of our
financial stability. The RCF is not currently drawn.
Events after the balance sheet date
The Group has undertaken a series of restructuring activities in
Q1 2021 as it rebalances its resource allocation policy and
addresses markets where large-scale operational efficiencies are
available or there is no clear indication of medium to long-term
profitability. Action has been taken in our Blink, Spain, Mexico
and Malaysia businesses and is expected to result in total
restructuring costs in the range of GBP1.1 million to GBP1.4
million. The restructuring activity is expected to generate
annualised cost savings in the range GBP1.1 million to GBP1.4
million.
Foreign exchange
Uncertainty in the global economy increased volatility in
exchange rate movements in 2020. This has adversely impacted the
reported results when comparing to the prior year. The largest
impacts have been in our Indian and Turkish businesses where the
exchange rate has depreciated by 6% and 29% respectively in
2020.
The reported results compared to 2019 include the following
adverse foreign exchange movements: GBP6.8 million (2019: GBP0.1
million) within revenue; GBP0.6 million (2019: GBP0.1 million) at
an EBITDA level; and an exceptional foreign exchange loss of GBP1.3
million (2019: GBPnil) recognised through other gains and
losses.
Segmental performance
Constant
2020 2019 (restated)(1) currency
REVENUE GBP'm GBP'm Change change
--------------------------- -------- ------------------ -------- -----------
Ongoing Operations
India 108.4 99.6 9% 16%
EU Hub 14.0 16.5 (15)% (16)%
Turkey 3.8 4.4 (14)% 9%
Rest of World(2) 3.9 3.4 15% 20%
--------------------------- -------- ------------------ -------- -----------
Total Ongoing Operations 130.1 123.9 5% 11%
Restricted Operations 11.0 14.5 (24)% (24)%
--------------------------- -------- ------------------ -------- -----------
Group revenue 141.1 138.4 2% 7%
--------------------------- -------- ------------------ -------- -----------
Constant
2020 2019 (restated)(1) currency
EBITDA GBP'm GBP'm Change change
------------------------- ------ ------------------ ------ ---------
Ongoing Operations
India 7.7 5.5 38% 49%
EU Hub 3.2 3.4 (5)% (6)%
Turkey 0.9 0.7 29% 97%
Rest of World(2) (3.7) (4.1) 8% 8%
------------------------- ------ ------------------ ------ ---------
Total Ongoing Operations 8.1 5.5 44% 62%
Restricted Operations 3.8 6.6 (42)% (42)%
Central Functions (4.4) (6.4) 31% 31%
------------------------- ------ ------------------ ------ ---------
Segmental EBITDA 7.5 5.7 29% 45%
Share of loss in joint
venture (0.3) (0.3) 18% 18%
------------------------- ------ ------------------ ------ ---------
Group EBITDA 7.2 5.4 32% 49%
------------------------- ------ ------------------ ------ ---------
1. Restated for the transfer of an Italian renewal book from
Restricted Operations to the EU Hub in Ongoing Operations. See note
2 in the condensed consolidated financial statements.
2. Rest of World comprises China, Malaysia, Mexico, UK, Blink,
Bangladesh and Southeast Asia.
All percentage change figures in the segmental operating report
below are stated on a constant currency basis to eliminate the
effects of foreign exchange to enable better year on year
comparison.
Ongoing Operations (92% of Group revenue):
Revenue increased by 11% to GBP130.1 million (2019 restated:
GBP123.9 million) and EBITDA increased strongly to GBP8.1 million
(2019 restated: GBP5.5 million). This segment includes investments
in business growth projects, the costs of which have decreased year
on year to GBP2.8 million (2019: GBP3.0 million) following the
decision to close Southeast Asia in the early part of the year.
The continued growth and improvement in EBITDA performance in
our Ongoing Operations segment is an important part of the Group's
development as we become increasingly less dependent on our
naturally declining legacy business.
Our Indian business continues to drive the growth in this
segment with revenue increasing by 16% to GBP108.4 million (2019:
GBP99.6 million). The Indian government lockdown had a material
impact on new sales activity in Q2, however the recovery was strong
through the second half, with Q4 exceeding prior year sales. The
recovery and growth has been fuelled by our relationship with
Bajaj, particularly in sales of FoneSafe (mobile phone insurance)
and LivPlus (life insurance and wellness product).
Globiva was similarly impacted by the Indian lockdown which
checked the rate of growth the business was achieving. However,
despite the economic backdrop Globiva has increased both revenue
and EBITDA year on year. This performance included successfully
winning and onboarding a number of new partners. Globiva is an
integral part of the margin enhancement opportunity available to
the Group coupled with growing revenue generation.
Our Turkish business performed strongly in the year, growing
revenue by 9% and EBITDA by 97%. This has been achieved through
expanding distribution with existing partners (including new
product variants), and by establishing relationships with new
partners that provides our Turkish business with a wider platform
for growth. On a reported basis this performance was tempered by
the Turkish lira which has devalued by 29% in the year.
Revenue in our EU Hub reduced by 16% as new revenue generation
is not yet at a level to offset the reduction in the renewal books.
The performance of the renewal books continues to be strong with
renewal rates of 83.3% (2019: 82.9%). In Spain we have seen some
new sales progress in the year, however, the financial performance
of these campaigns has been disappointing. Consequently, the EU Hub
profitability in the year has reduced by 6% with the cost
efficiencies from previous restructuring being offset by reducing
profit from the declining renewal books and cost inefficiencies in
new campaigns. The high upfront costs associated with the
under-performing telemarketing channel has led to a review of the
operating model and in early 2021 we will refocus to alternative
sales channels. This will also enable additional cost efficiencies
to be generated.
Within Rest of World, the UK has made good progress in the year,
successfully embedding its acquisition of B&D and commencing
new deals with Gallagher and the RAC both of whom offer further
opportunities in 2021. In Mexico we were disappointed to lose the
Coppel campaign at the end of the year and following a review of
future prospects and the ongoing funding requirement of the
business it was decided to reduce new business development
activities. From the beginning of 2021 Mexico will be run
predominantly as a renewal book operation with a slimmed-down local
team managed from the corporate centre. China focused on enhancing
its product suite with a new digital travel solution launched in
late 2020 and digital solutions for the health sector in
development. Blink's progress was heavily impacted by the effect of
the pandemic on the travel sector. Bangladesh, which operates from
a low cost base, launched a new mobile phone insurance product
which is expected to develop in 2021.
Restricted Operations (8% of Group revenue)
Revenue decreased by 24% to GBP11.0 million (2019 restated:
GBP14.5 million) reflecting the natural decline in the historic
renewal books of Card Protection Plan Limited (CPPL) and Homecare
Insurance Limited (HIL) along with an increase in revenue deferral
following contractual changes to the UK products. EBITDA fell by
42% to GBP3.8 million (2019 restated: GBP6.6 million) which
reflects the lost profit from the revenue decline together with a
cost base that cannot be lowered in line with the reducing customer
base as a core level of operational capability is required to
service the remaining book.
Renewal rates remained strong at 81.3% (2019: 83.6%) which is
key in managing the rate of decline in the book.
The focus in our Restricted Operations is to ensure that the
best customer outcomes are delivered in the most cost-effective
way. We continue to proactively review the make-up of our UK
customer renewal book and have a programme in place to address
certain customers to ensure the best outcomes are achieved for
them. This programme commenced at the beginning of 2020 and is
expected to continue to result in greater non-renewals in years to
come which will increase the current rate of revenue decline. In
addition, the decision has been taken to close the small renewal
book in Malaysia during 2021 where the customer base has reduced to
a level that is no longer economically viable to run.
Central Functions:
Our central cost base has reduced by 31% to GBP4.4 million
(2019: GBP6.4 million) as we continue to benefit from supplier
contract reviews, streamlining of our UK-based IT function and cost
control measures implemented.
Adjusted EBITDA
Investment
in business 2019 adjusted 2019 adjusted
growth 2020 adjusted 2020 adjusted EBITDA margin
2020 projects(2) EBITDA margin(3) (Restated)(1) (Restated)(1)
Constant
currency
GBP'm GBP'm GBP'm % GBP'm % Change change
-------------- ------- ------------ ------------- ------------- -------------- -------------- ------ ---------
Ongoing
Operations 8.1 2.8 10.9 8% 8.5 7% 27% 37%
Restricted
Operations 3.8 - 3.8 34% 6.6 45% (42)% (42)%
Central
Functions (4.4) - (4.4) (100)% (6.4) (100)% 31% 31%
-------------- ------- ------------ ------------- ------------- -------------- -------------- ------ ---------
Segmental
EBITDA 7.5 2.8 10.3 7% 8.7 6% 17% 26%
Share of loss
in joint
venture (0.3) 0.3 - n/a - n/a n/a n/a
-------------- ------- ------------ ------------- ------------- -------------- -------------- ------ ---------
Group EBITDA 7.2 3.1 10.3 7% 8.7 6% 17% 26%
-------------- ------- ------------ ------------- ------------- -------------- -------------- ------ ---------
1. Restated for the transfer of an Italian renewal book from
Restricted Operations to the EU Hub in Ongoing Operations. See note
2 in the condensed consolidated financial statements.
2. The business growth projects in Ongoing Operations are UK
GBP1.1 million (2019: GBP1.2 million), Blink GBP1.3 million (2019:
GBP1.2 million), Bangladesh GBP0.2 million (2019: GBP0.2 million)
and Southeast Asia GBP0.2 million (2019: GBP0.4 million). These
projects are disclosed within Rest of World.
3. Adjusted margin is defined as adjusted EBITDA divided by revenue.
Adjusted EBITDA excludes investments in business growth
projects. The Group's adjusted EBITDA has increased to GBP10.3
million (2019: GBP8.7 million), reflecting the progress made in our
key markets within Ongoing Operations, where adjusted EBITDA has
increased to GBP10.9 million (2019 restated: GBP8.5 million).
Investments in business growth projects represent start-up
businesses that the Group has funded to contribute to the future
growth and sustainability of the Group. Naturally businesses
progress from start-up to developing status with the expectation
that the level of funding to that business reduces over time. After
an initial cycle of three years it is considered appropriate to
transfer the UK, Blink and Bangladesh to developing status in 2021.
As a result, this year represents the final year that these
businesses will be excluded from the adjusted measure.
Oliver Laird
Chief Financial Officer
23 March 2021
Consolidated income statement
For the year ended 31 December 2020
2020 2019
Note GBP'000 GBP'000
Revenue 4 141,144 138,362
================================ ===== ========== ========
Cost of sales (104,190) (97,874)
-------------------------------- ----- ---------- --------
Gross profit 36,954 40,488
================================ ===== ========== ========
Administrative expenses (33,381) (38,541)
================================ ===== ========== ========
Share of loss of joint venture (264) (320)
-------------------------------- ----- ---------- --------
Operating profit 3,309 1,627
-------------------------------- ----- ---------- --------
Analysed as:
-------------------------------- ----- ---------- --------
EBITDA 4 7,160 5,442
-------------------------------- ----- ---------- --------
Depreciation and amortisation (3,495) (3,305)
-------------------------------- ----- ---------- --------
Exceptional items 5 (356) (510)
-------------------------------- ----- ---------- --------
Investment revenues 412 508
-------------------------------- ----- ---------- --------
Finance costs (415) (1,003)
-------------------------------- ----- ---------- --------
Other gains and losses 5 (1,294) -
-------------------------------- ----- ---------- --------
Profit before taxation 2,012 1,132
================================ ===== ========== ========
Taxation 6 (3,609) (2,076)
-------------------------------- ----- ---------- --------
Loss for the year (1,597) (944)
-------------------------------- ----- ---------- --------
Attributable to:
------------------------------- -------- --------
Equity holders of the Company (1,680) (1,009)
================================ ======== ========
Non-controlling interests 83 65
-------------------------------- -------- --------
(1,597) (944)
------------------------------- -------- --------
Restated*
Loss per share Pence Pence
------------------- -------- ----------
Basic and diluted 8 (19.28) (11.69)
------------------- -------- ----------
*Restated for the share consolidation. See note 2 for further
detail.
Consolidated statement of comprehensive income
For the year ended 31 December 2020
2020 2019
GBP'000 GBP'000
--------------------------------------------------------------------- -------- --------
Loss for the year (1,597) (944)
====================================================================== ======== ========
Items that may be reclassified subsequently to profit or loss:
===================================================================== ======== ========
Exchange differences on translation of foreign operations (809) (219)
====================================================================== ======== ========
Exchange differences reclassified on disposal of foreign operations 1,294 -
--------------------------------------------------------------------- -------- --------
Other comprehensive income/(expense) for the year net of taxation 485 (219)
---------------------------------------------------------------------- -------- --------
Total comprehensive expense for the year (1,112) (1,163)
---------------------------------------------------------------------- -------- --------
Attributable to:
--------------------------------------------------------------------- -------- --------
Equity holders of the Company (1,145) (1,188)
---------------------------------------------------------------------- -------- --------
Non-controlling interests 33 25
---------------------------------------------------------------------- -------- --------
(1,112) (1,163)
--------------------------------------------------------------------- -------- --------
Consolidated balance sheet
As at 31 December 2020
2020 2019
Note GBP'000 GBP'000
-------------------------------------- ---- --------- ---------
Non-current assets
====================================== ==== ========= =========
Goodwill 9 612 1,492
====================================== ==== ========= =========
Other intangible assets 10 3,741 3,533
====================================== ==== ========= =========
Property, plant and equipment 11 1,670 2,362
====================================== ==== ========= =========
Right-of-use assets 12 6,097 6,496
====================================== ==== ========= =========
Investment in joint venture 450 714
====================================== ==== ========= =========
Deferred tax asset 858 1,152
====================================== ==== ========= =========
Net investment lease assets - 16
====================================== ==== ========= =========
Contract assets 426 709
-------------------------------------- ---- --------- ---------
13,854 16,474
-------------------------------------- ---- --------- ---------
Current assets
====================================== ==== ========= =========
Insurance assets 46 42
====================================== ==== ========= =========
Inventories 145 87
====================================== ==== ========= =========
Net investment lease assets - 140
====================================== ==== ========= =========
Contract assets 4,853 6,108
====================================== ==== ========= =========
Trade and other receivables 16,379 17,778
====================================== ==== ========= =========
Cash and cash equivalents 21,856 21,957
-------------------------------------- ---- --------- ---------
43,279 46,112
-------------------------------------- ---- --------- ---------
Total assets 57,133 62,586
-------------------------------------- ---- --------- ---------
Current liabilities
====================================== ==== ========= =========
Insurance liabilities (935) (756)
====================================== ==== ========= =========
Income tax liabilities (974) (601)
====================================== ==== ========= =========
Trade and other payables (20,387) (23,922)
====================================== ==== ========= =========
Lease liabilities 12 (882) (1,371)
====================================== ==== ========= =========
Contract liabilities (10,889) (12,169)
-------------------------------------- ---- --------- ---------
(34,067) (38,819)
====================================== ==== ========= =========
Net current assets 9,212 7,293
-------------------------------------- ---- --------- ---------
Non-current liabilities
====================================== ==== ========= =========
Borrowings 98 50
====================================== ==== ========= =========
Deferred tax liabilities (579) (373)
====================================== ==== ========= =========
Provisions - (309)
====================================== ==== ========= =========
Lease liabilities 12 (5,756) (5,895)
====================================== ==== ========= =========
Contract liabilities (1,094) (1,248)
-------------------------------------- ---- --------- ---------
(7,331) (7,775)
-------------------------------------- ---- --------- ---------
Total liabilities (41,398) (46,594)
-------------------------------------- ---- --------- ---------
Net assets 15,735 15,992
-------------------------------------- ---- --------- ---------
Equity
====================================== ==== ========= =========
Share capital 13 24,153 24,056
====================================== ==== ========= =========
Share premium account 45,225 45,225
====================================== ==== ========= =========
Merger reserve (100,399) (100,399)
====================================== ==== ========= =========
Translation reserve 834 299
====================================== ==== ========= =========
ESOP reserve 17,490 16,999
====================================== ==== ========= =========
Retained earnings 27,327 28,928
-------------------------------------- ---- --------- ---------
Equity attributable to equity holders
of the Company 14,630 15,108
====================================== ==== ========= =========
Non-controlling interests 1,105 884
-------------------------------------- ---- --------- ---------
Total equity 15,735 15,992
-------------------------------------- ---- --------- ---------
Consolidated statement of changes in equity
For the year ended 31 December 2020
Share
Share premium Merger Translation ESOP Retained Non-controlling Total
capital account reserve reserve reserve earnings Total interests equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
At 31 December
2018 24,021 45,225 (100,399) 478 15,884 30,323 15,532 734 16,266
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
Change of
accounting
policy - IFRS
16 - - - - - (203) (203) - (203)
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
At 1 January
2019 24,021 45,225 (100,399) 478 15,884 30,120 15,329 734 16,063
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Loss for the
year - - - - - (1,009) (1,009) 65 (944)
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Other
comprehensive
expense for the
year - - - (179) - - (179) (40) (219)
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
Total
comprehensive
expense for the
year - - - (179) - (1,009) (1,188) 25 (1,163)
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
Equity-settled
share-based
payment charge 14 - - - - 1,115 - 1,115 - 1,115
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Deferred tax on
intangible
asset 6 - - - - - (58) (58) - (58)
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Exercise of
share options 35 - - - - - 35 - 35
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Movement in
non-controlling
interests - - - - - (125) (125) 125 -
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
At 31 December
2019 24,056 45,225 (100,399) 299 16,999 28,928 15,108 884 15,992
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Loss for the
year - - - - - (1,680) (1,680) 83 (1,597)
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Other
comprehensive
income for the
year - - - 535 - - 535 (50) 485
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
Total
comprehensive
expense for the
year - - - 535 - (1,680) (1,145) 33 (1,112)
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
Equity-settled
share-based
payment charge 14 - - - - 491 - 491 - 491
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Deferred tax on
intangible
asset 6 - - - - - 58 58 - 58
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Exercise of
share options 13 97 - - - - (97) - - -
================ ==== ======= ======= ========= =========== ======= ========= ======= =============== =======
Movement in
non-controlling
interests - - - - - 118 118 188 306
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
At 31 December
2020 24,153 45,225 (100,399) 834 17,490 27,327 14,630 1,105 15,735
---------------- ---- ------- ------- --------- ----------- ------- --------- ------- --------------- -------
Consolidated cash flow statement
For the year ended 31 December 2020
2020 2019
Note GBP'000 GBP'000
------------------------------------------ ---- ------- -------
Net cash from operating activities 15 3,162 1,138
========================================== ==== ======= =======
Investing activities
========================================== ==== ======= =======
Interest received 410 499
========================================== ==== ======= =======
Purchases of property, plant and
equipment 11 (356) (1,477)
========================================== ==== ======= =======
Purchases of intangible assets 10 (1,408) (2,184)
========================================== ==== ======= =======
Receipts from net investment lease
assets 117 157
========================================== ==== ======= =======
Net cash used in investing activities (1,237) (3,005)
------------------------------------------ ---- ------- -------
Financing activities
========================================== ==== ======= =======
Costs of refinancing the bank facility (110) -
========================================== ==== ======= =======
Repayment of the lease liabilities (1,783) (1,770)
========================================== ==== ======= =======
Proceeds on disposal of partial
interest in subsidiary 329 -
========================================== ==== ======= =======
Interest paid (60) (444)
========================================== ==== ======= =======
Issue of ordinary share capital - 35
------------------------------------------ ---- ------- -------
Net cash used in financing activities (1,624) (2,179)
------------------------------------------ ---- ------- -------
Net decrease in cash and cash equivalents 301 (4,046)
========================================== ==== ======= =======
Effect of foreign exchange rate
changes (402) 48
========================================== ==== ======= =======
Cash and cash equivalents at 1 January 21,957 25,955
------------------------------------------ ---- ------- -------
Cash and cash equivalents at 31
December 21,856 21,957
------------------------------------------ ---- ------- -------
Notes to condensed financial statements
1. General information
While the financial information included in this annual results
announcement has been computed in accordance with the recognition
and measurement criteria in conformity with International Financial
Reporting Standards ('IFRS') and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS, this
announcement does not itself contain sufficient information to
comply with IFRS. The Company will publish full financial
statements that comply with IFRS in March 2021.
The financial information set out above does not constitute the
Company's statutory financial statements for the years ended 31
December 2020 or 31 December 2019, but is derived from the 2020
financial statements. Statutory financial statements for 2019 for
the Company prepared under IFRS have been delivered to the
Registrar of Companies and those for 2020 for the Company will be
delivered following the Company's Annual General Meeting. The
Auditor, Deloitte LLP, has reported on these financial statements;
their report was unqualified, did not draw attention to any matters
by way of emphasis and did not contain statements under s498 (2) or
(3) of the Companies Act 2006. These 2020 financial statements were
approved by the Board of Directors on 23 March 2021.
2. Accounting policies
The same accounting policies, presentation and methods of
computation are followed in the condensed financial statements as
were applied in the Group's audited financial statements for the
year ended 31 December 2019. The IFRS 16 practical expedient is
effective for periods beginning on or after 1 June 2020 and has
therefore been early adopted by the Group (see note 12). The
following Standards and Interpretations have become effective and
have been adopted in these condensed financial statements. No other
Standards or Interpretations have been adopted early in these
condensed financial statements.
Standard/Interpretation Subject
------------------------------ --------------------------------------------------------------
IFRS 3 (amendments) Business combinations - definition of a business
IAS 1 (amendments) Presentation of financial statements - definition of material
IAS 8 (amendments) Accounting estimates - definition of material
IFRS 16 (practical expedient) COVID-19 related rent concessions
------------------------------ --------------------------------------------------------------
Restatement of disclosures
In December 2019, the Card Protection policy book in the Italian
branch of Card Protection Plan Limited (CPPL) was transferred to
CPP Italia Srl, an Italian legal entity in the Ongoing Operations
segment. The Italian branch of CPPL has subsequently been closed in
2020. The revenue and EBITDA associated with the policy book is
material and in 2020 has been recognised in Ongoing Operations. As
a result, in accordance with IFRS 8 Operating Segments, the Group
has restated the comparative information to transfer the relevant
Italian results from Restricted Operations to Ongoing Operations.
The transfer recognised between segments in the comparative
information for revenue is GBP2,913,000 and for EBITDA is
GBP1,035,000. See note 4.
On 29 May 2020, a share consolidation was undertaken on the
basis of one new ordinary share of GBP1 issued for every 100 former
ordinary shares of 1 penny. Refer to note 13 for further details.
In accordance with IAS 33 Earnings per Share, the share
consolidation and change in nominal value of ordinary shares has
resulted in a restatement of the comparative information. See note
8.
Going concern
In reaching their view on the preparation of the Group's
financial statements on a going concern basis, the Directors are
required to consider whether the Group can continue in operational
existence for a period of at least 12 months from the date of this
report.
The Group has a formalised process of budgeting, reporting and
review along with procedures to forecast its profitability and cash
flows. The plans provide information to the Directors which are
used to ensure the adequacy of resources available for the Group to
meet its business objectives, both in the short-term and in
relation to its strategic priorities. The Group's revenue, profit
and cash flow forecasts are subject to robust downside stress
testing which involves modelling the impact of a combination of
plausible adverse scenarios focused on crystallisation of the
Group's key operational risks. The assessment fully considers the
Group's modelling of the risks associated with COVID-19. This is
done to identify risks to liquidity and covenant compliance and
enable management to formulate appropriate and timely mitigation
strategies.
Taking the analysis into consideration, the Directors are
satisfied that the Group has the necessary resources to continue in
operational existence for at least the next 12 months from the date
of this report. Accordingly, they continue to adopt the going
concern basis in preparing the financial statements.
3. Critical accounting judgements and key sources of estimation
uncertainty
Critical judgements
Revenue recognition
The Group recognises revenue either immediately on inception of
a policy or over the duration of a policy where there are ongoing
obligations to fulfil to a customer. Certain of the Group's
contractual structures relating to product features require
judgement in determining whether the Group carries an obligation to
the customer over the term of the policy or if the exposure to that
obligation has been transferred to a third party on inception. This
judgement determines when the Group has completed the performance
obligation to the customer and can recognise revenue.
The Group allocates revenue on a cost plus margin basis. The
cost base may vary over time as product features are enhanced,
suppliers changed or underlying costs move. Judgement is applied in
determining if the resulting changes to the cost base represent a
temporary or permanent adjustment in the allocation of revenue to
performance obligations. If a change is considered temporary, or
within a materiality threshold, revenue recognition principles are
not amended to aid consistency.
Classification of exceptional items
Exceptional items are those items that are required to be
separately disclosed by virtue of their size or incidence or have
been separately disclosed on the income statement in order to
improve a reader's understanding of the financial statements.
Consideration of what should be included as exceptional requires
judgement to be applied. Exceptional items are considered to be
ones which are material and outside of the normal operating
practice of the Group.
Assumptions and estimation uncertainties
Contractual matters
The Group has made certain commercial and contractual decisions
that are not yet agreed with all affected parties. The Group is
satisfied with its position from both a legal and regulatory
perspective. Appropriate financial provisions are in place in
respect of these matters and are included in trade and other
payables. The Group has applied the reduced disclosures available
within IAS 37 as it does not consider it appropriate to disclose
the detail of contractual matters as it may prejudice any future
discussions.
The appropriate level of financial provision may vary and impact
the consolidated income statement depending on the outcome of any
future discussions with those parties affected.
Current tax
The Group operates in countries with complex tax regulations,
where filed tax positions may remain open to challenge by local tax
authorities for several years. Corporation taxes are recognised by
assessment of the specific tax law and likelihood of settlement.
Where the Group has uncertain tax treatments it has recognised
appropriate provisions reflecting the expected value calculated by
the sum of the probability-weighted amounts in a range of possible
outcomes.
Changes to the Group's assessment of uncertain tax treatments
would be reflected through the consolidated income statement.
4. Segmental analysis
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the Board of Directors to allocate resources
to the segments and to assess their performance. The Group's
operating segments are:
Ongoing Operations: India, China, Turkey, Spain, Germany,
Portugal, Italy, Mexico, Malaysia, the UK, Bangladesh, Blink and
Southeast Asia. These businesses have no regulatory restrictions on
new sales activity. These markets represent a combination of
businesses in which we continue to invest and drive new
opportunities as well as ones that have been strategically assessed
and wound down or exited.
-- Restricted Operations: historic renewal books of our UK
regulated entities; CPPL, including its overseas branch in
Malaysia; and HIL. As a result of regulatory restrictions we are
not permitted to undertake new sales in these businesses.
-- Central Functions: central cost base required to provide
expertise and operate a listed group. Central Functions is stated
after the recharge of certain central costs that are appropriate to
transfer to both Ongoing Operations and Restricted Operations for
statutory purposes.
In December 2019, the Italian renewal book was transferred from
Restricted Operations to the EU Hub in Ongoing Operations. In
accordance with IFRS 8 the comparatives have been restated for this
segment reallocation . See note 2.
Segment revenue and performance for the current and comparative
periods are presented below:
Ongoing Operations Restricted Operations Central Functions Total
2020 2020 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- ------------------- ---------------------- ------------------ ----------
Year ended 31 December 2020
========================================= =================== ====================== ================== ==========
Revenue - external sales 130,076 11,068 - 141,144
========================================= =================== ====================== ================== ==========
Cost of sales (102,815) (1,375) - (104,190)
----------------------------------------- ------------------- ---------------------- ------------------ ----------
Gross profit 27,261 9,693 - 36,954
========================================= =================== ====================== ================== ==========
Administrative expenses excluding
depreciation, amortisation and
exceptional items (19,231) (5,887) (4,412) (29,530)
----------------------------------------- ------------------- ---------------------- ------------------ ----------
Segmental EBITDA 8,030 3,806 (4,412) 7,424
========================================= =================== ====================== ================== ==========
Share of loss of joint venture (264)
----------------------------------------- ------------------- ---------------------- ------------------ ----------
EBITDA 7,160
========================================= =================== ====================== ================== ==========
Depreciation and amortisation (3,495)
----------------------------------------- ------------------- ---------------------- ------------------ ----------
Exceptional items (note 5) (356)
----------------------------------------- ------------------- ---------------------- ------------------ ----------
Operating profit 3,309
========================================= =================== ====================== ================== ==========
Investment revenues 412
========================================= =================== ====================== ================== ==========
Finance costs (415)
========================================= =================== ====================== ================== ==========
Other gains or losses (1,294)
----------------------------------------- ------------------- ---------------------- ------------------ ----------
Profit before taxation 2,012
========================================= =================== ====================== ================== ==========
Taxation (3,609)
----------------------------------------- ------------------- ---------------------- ------------------ ----------
Loss for the year (1,597)
----------------------------------------- ------------------- ---------------------- ------------------ ----------
Ongoing Operations (Restated*) Restricted Operations (Restated*) Central Functions Total
2019 2019 2019 2019
GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------------------------------- ---------------------------------- ------------------ ---------
Year ended 31
December 2019
================== =============================== ================================== ================== =========
Revenue -
external sales 123,875 14,487 - 138,362
================== =============================== ================================== ================== =========
Cost of sales (97,018) (856) - (97,874)
------------------ ------------------------------- ---------------------------------- ------------------ ---------
Gross profit 26,857 13,631 - 40,488
================== =============================== ================================== ================== =========
Administrative
expenses
excluding
depreciation,
amortisation and
exceptional
items (21,282) (7,023) (6,421) (34,726)
------------------ ------------------------------- ---------------------------------- ------------------ ---------
Segmental EBITDA 5,575 6,608 (6,421) 5,762
================== =============================== ================================== ================== =========
Share of loss of
joint venture (320)
------------------ ------------------------------- ---------------------------------- ------------------ ---------
EBITDA 5,442
================== =============================== ================================== ================== =========
Depreciation and
amortisation (3,305)
================== =============================== ================================== ================== =========
Exceptional items
(note 5) (510)
------------------ ------------------------------- ---------------------------------- ------------------ =========
Operating profit 1,627
================== =============================== ================================== ================== =========
Investment
revenues 508
================== =============================== ================================== ================== =========
Finance costs (1,003)
------------------ ------------------------------- ---------------------------------- ------------------ ---------
Profit before
taxation 1,132
------------------ ------------------------------- ---------------------------------- ------------------ ---------
Taxation (2,076)
------------------ ------------------------------- ---------------------------------- ------------------ ---------
Loss for the year (944)
------------------ ------------------------------- ---------------------------------- ------------------ ---------
* Restated for a change in the composition of operating
segments. See note 2.
Segment assets
2019
2020 (Restated*)
GBP'000 GBP'000
--------------------------- --------- ------------
Ongoing Operations 42,536 43,874
=========================== ========= ============
Restricted Operations 7,564 11,278
=========================== ========= ============
Central Functions 5,113 4,076
--------------------------- --------- ------------
Total segment assets 55,213 59,228
=========================== ========= ============
Unallocated assets 1,920 3,358
--------------------------- --------- ------------
Consolidated total assets 57,133 62,586
--------------------------- --------- ------------
* Restated for a change in the composition of operating
segments. See note 2.
Goodwill, deferred tax and investment in joint venture are not
allocated to segments.
Capital expenditure
Intangible assets Property, plant and equipment Right-of-use assets
2020 2019 2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- --------- -------------- --------------- ---------- ---------
Ongoing Operations 1,055 1,857 255 1,069 1,568 3,065
======================= ========= ========= ============== =============== ========== =========
Restricted Operations 352 32 18 145 - -
======================= ========= ========= ============== =============== ========== =========
Central Functions 1 295 83 263 523 -
----------------------- --------- --------- -------------- --------------- ---------- ---------
Total 1, 408 2,184 356 1,477 2,091 3,065
----------------------- --------- --------- -------------- --------------- ---------- ---------
Revenues from major products
2020 2019
GBP'000 GBP'000
---------------------------- --------- --------
Retail assistance policies 131,022 128,300
============================ ========= ========
Retail insurance policies 85 97
============================ ========= ========
Wholesale policies 2,738 3,859
============================ ========= ========
Non-policy revenue 7,299 6,106
---------------------------- --------- --------
Consolidated total revenue 141,144 138,362
---------------------------- --------- --------
Major product streams are disclosed on the basis monitored by
senior management. For the purpose of this product analysis,
'retail assistance policies' are those which may be insurance
backed but contain a bundle of assistance and other benefits;
'retail insurance policies' are those which protect against a
single insurance risk; 'wholesale policies' are those which are
provided by business partners to their customers in relation to an
ongoing product or service which is provided for a specified period
of time; and 'non-policy revenue' is that which is not in
connection with providing an ongoing service to policyholders for a
specified period of time. The Group derives its revenue from
contracts with customers for the transfer of goods and services
which is consistent with the revenue information that is disclosed
for each reportable segment under IFRS 8.
Timing of revenue recognition
The Group derives revenue from the transfer of goods and
services over time and at a point in time as follows:
2020 2019
GBP'000 GBP'000
-------------------- --------- --------
At a point in time 117,903 115,014
==================== ========= ========
Over time 23,241 23,348
-------------------- --------- --------
Total 141,144 138,362
-------------------- --------- --------
Geographical information
The Group operates across a wide number of territories, of which
India, the UK and Spain are considered individually material.
Revenue from external customers and non-current assets (excluding
investment in joint venture and deferred tax) by geographical
location are detailed below:
External revenues Non-current assets
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
------- --------- --------- --------- ---------
India 108,406 99,613 8,071 7,791
======= ========= ========= ========= =========
UK 12,082 14,176 2,062 3,490
======= ========= ========= ========= =========
Spain 7,538 8,608 256 481
======= ========= ========= ========= =========
Other 13,118 15,965 2,157 2,846
------- --------- --------- --------- ---------
141,144 138,362 12,546 14,608
------- --------- --------- --------- ---------
Information about major customers
Revenue from the customers of one business partner in the
Group's Ongoing Operations segment represented approximately
GBP73,739,000 (2019: GBP69,832,000) of the Group's total
revenue.
5. Exceptional items
2020 2019
Note GBP'000 GBP'000
------------------------------------------------------------ ----- --------- --------
Restructuring costs 161 510
============================================================ ===== ========= ========
Impairment of goodwill 880 -
============================================================ ===== ========= ========
Customer redress and associated costs (685) -
------------------------------------------------------------ ----- --------- --------
Exceptional charge included in operating profit 356 510
============================================================ ===== ========= ========
Other gains and losses - foreign exchange reclassification 1,294 -
------------------------------------------------------------ ----- --------- --------
Total exceptional charge included in profit before tax 8 1,650 510
------------------------------------------------------------ ----- --------- --------
Tax on exceptional items - (125)
------------------------------------------------------------ ----- --------- --------
Total exceptional charge after tax 8 1,650 385
------------------------------------------------------------ ----- --------- --------
Restructuring costs of GBP161,000 primarily relate to redundancy
costs and onerous contracts associated with the closure of the
Southeast Asia operation. The prior year restructuring of
GBP510,000 relates to redundancy programmes in Spain and the
UK-based central IT function.
Impairment of goodwill of GBP880,000 (2019: GBPnil) comprises
the write down of goodwill relating to CPP Innovation Limited
(Blink) of GBP776,000 and Valeos (2013) Limited (Valeos) of
GBP104,000. The Directors decided to write down the goodwill
following an assessment of discounted cash flow forecasts of each
business. Blink's primary product, Travel, has been severely
impacted by COVID-19 with market uncertainty continuing.
Customer redress and associated costs are a credit of GBP685,000
(2019: GBPnil) and relate to the reversal of certain redress
payments made in prior years. The credit is considered exceptional
as it is a reversal of exceptional charges recognised in previous
years.
Other gains and losses in the year reflects a reclassification
of cumulative translation adjustments of GBP1,294,000 (2019:
GBPnil) from the translation reserve to the income statement. This
related to the closure of overseas branches in Hong Kong and
Italy.
6. Taxation
2020 2019
GBP'000 GBP'000
------------------------------------------------ --------- ---------
Current tax charge:
================================================ ========= =========
UK corporation tax 156 71
================================================ ========= =========
Foreign tax 2,926 1,836
================================================ ========= =========
Adjustments in respect of prior years (29) (103)
------------------------------------------------ --------- ---------
Total current tax 3,053 1,804
------------------------------------------------ --------- ---------
Deferred tax charge:
================================================ ========= =========
Origination and reversal of timing differences 546 254
================================================ ========= =========
Impact of change in UK tax rates 10 (10)
================================================ ========= =========
Adjustments in respect of prior years - 28
------------------------------------------------ --------- ---------
Total deferred tax 556 272
------------------------------------------------ --------- ---------
Total tax charge 3,609 2,076
------------------------------------------------ --------- ---------
The following is a segmental review of the tax charge, in which
withholding taxes arising on distributions are attributed to the
country paying the distribution:
2020 2019
GBP'000 GBP'000
-------------------------- --------- ---------
Ongoing Operations:
========================== ========= =========
India 2,428 1,438
========================== ========= =========
EU Hub 584 431
========================== ========= =========
Turkey 340 166
-------------------------- --------- ---------
Rest of World 7 -
-------------------------- --------- ---------
Total Ongoing Operations 3,359 2,035
========================== ========= =========
Restricted Operations - -
========================== ========= =========
Central Functions 250 41
========================== ========= =========
Total tax charge 3,609 2,076
-------------------------- --------- ---------
Overall, UK profits chargeable to corporation tax are offset by
group relief surrendered from fellow UK entities.
UK corporation tax is calculated at 19% (2019: 19%) of the
estimated assessable profit for the year. The March 2021 Budget
announced an increase to the main rate of corporation tax to 25%
from April 2023. This rate has not been substantively enacted at
the balance sheet date, as a result deferred tax balances as at 31
December 2020 continue to be measured at 19%. If all of the
deferred tax was to reverse at the amended rate the impact to the
closing deferred tax position would be to increase the deferred tax
asset by GBP15,000.
Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions - India 25.2% inclusive
of surcharges (2019: 25.2%); Spain 25% (2019: 25%); Turkey 22%
(2019: 22%) which is reducing to 20% in 2021; and Italy 27.5%
(2019: 27.5%). Non-UK deferred tax is provided at the local
prevailing tax rate.
The charge for the year can be reconciled to the profit per the
consolidated income statement as follows:
2020 2019
GBP'000 GBP'000
----------------------------------------------------------------- --------- ---------
Profit before tax 2,012 1,132
----------------------------------------------------------------- --------- ---------
Effects of:
================================================================= ========= =========
Tax at the UK corporation tax rate of 19% (2019: 19%) 382 215
================================================================= ========= =========
Unprovided deferred tax arising on losses(1) 699 440
================================================================= ========= =========
Other movement in unprovided deferred tax 185 141
================================================================= ========= =========
Recurring expenses not deductible for tax 304 339
================================================================= ========= =========
One-off costs not deductible for tax(2) 395 -
================================================================= ========= =========
Provision for withholding tax on future distributions(3) 789 250
================================================================= ========= =========
Other expense not chargeable for tax purposes 171 71
================================================================= ========= =========
Higher tax rates on overseas earnings(4) 552 521
================================================================= ========= =========
Adjustments in respect of prior years (29) (75)
================================================================= ========= =========
Impact of change in future tax rates on deferred tax 10 (10)
================================================================= ========= =========
Surplus of share option charge compared to tax allowable amount 151 184
----------------------------------------------------------------- --------- ---------
Total tax charged to income statement 3,609 2,076
----------------------------------------------------------------- --------- ---------
Effective tax charge
The net tax charge of GBP3,609,000 on a profit before tax of
GBP2,012,000 results in an effective tax rate of 179% (2019: 183%)
which is higher than the UK standard rate of 19%. Additional
information is provided below:
1. Deferred tax has not been recognised on the losses arising in
developing markets as the short-term profit expectations do not
support the recognition of deferred tax assets in these areas;
2. There are one-off consolidation adjustments which are not tax
deductible and therefore increase the tax charge, such as the
impairment of Blink goodwill and foreign exchange losses arising on
the closure of overseas branches;
3. There is a withholding tax charge arising on repatriation of
funds from overseas countries; and
4. Tax is chargeable at the local statutory rate in our
profitable countries, which are higher than the UK corporate income
tax rate of 19%.
The Group's effective tax rate is expected to be considerably
higher than the UK statutory tax rate in future years as profits
continue to be generated in territories with higher than UK tax
rates, withholdings taxes are provided on overseas distributions
and deferred tax credits are not taken on losses arising in
developing markets. The Group expects the rate to reduce from the
current level.
The Group maintains appropriate provisions in respect of tax
uncertainties arising from operating in multiple overseas
jurisdictions.
Income tax charged to reserves during the year was as
follows:
2020 2019
GBP'000 GBP'000
--------------------------------------------------- --------- ---------
Deferred tax (credit)/charge
=================================================== ========= =========
Timing differences on business partner intangible (58) 58
=================================================== ========= =========
Total deferred tax (credit)/charge (58) 58
--------------------------------------------------- --------- ---------
Total tax (credited)/charged to reserves (58) 58
--------------------------------------------------- --------- ---------
7. Dividends
After 31 December 2020, the Directors have proposed a final
dividend of 25 pence per ordinary share. The proposed final
dividend is subject to approval by shareholders at the AGM and has
not been included as a liability in these financial statements. The
proposed dividend is expected to be paid on 12 May 2021 to all
shareholders on the Register of Members on 9 April 2021 with the
ex-dividend date being 8 April 2021.
8. Loss per share
Basic and diluted loss per share have been calculated in
accordance with IAS 33 Earnings per Share. Underlying loss per
share have also been presented in order to give a better
understanding of the performance of the business. In accordance
with IAS 33, potential ordinary shares are only considered dilutive
when their conversion would decrease the earnings per share or
increase the loss per share attributable to equity holders. The
diluted loss per share is therefore equal to the basic loss per
share in the current and prior year.
Loss
2020 2019
GBP'000 GBP'000
---------------------------------------------------------------------- --------- --------
Loss for the purposes of basic and diluted loss per share (1,680) (1,009)
====================================================================== ========= ========
Exceptional items (net of tax) 1,650 385
====================================================================== ========= ========
Loss for the purposes of underlying basic and diluted loss per share (30) (624)
---------------------------------------------------------------------- --------- --------
Number of shares
2019
2020 (Restated*)
Number Number
(thousands) (thousands)
---------------------------------------------------------------------------------------- ------------- -------------
Weighted average number of ordinary shares for the purposes of basic and diluted loss
per
share and basic and diluted underlying loss per share 8,713 8,629
---------------------------------------------------------------------------------------- ------------- -------------
2019
2020 (Restated*)
Pence Pence
Basic and diluted loss per share (19.28) (11.69)
--------------------------------------------- -------- -------------
Basic and diluted underlying loss per share (0.34) (7.23)
--------------------------------------------- -------- -------------
*Restated for the share consolidation completed on 29 May 2020.
See note 2.
The Group has 171,650,000 deferred shares which have no rights
to receive dividends and only very limited rights on a return of
capital. The deferred shares have not been admitted to trading on
AIM or any other stock exchange. Accordingly, these shares have not
been considered in the calculation of loss per share.
9. Goodwill
2020 2019
GBP'000 GBP'000
------------------------- --------- --------
Cost and carrying value
========================= ========= ========
At 1 January 1,492 1,492
========================= ========= ========
Impairment charge (880) -
------------------------- --------- --------
At 31 December 612 1,492
------------------------- --------- --------
Goodwill acquired in a business combination is allocated, at
acquisition, to the cash generating units (CGUs) that are expected
to benefit from that business combination. The carrying amount of
goodwill has been allocated as follows:
2020 2019
GBP'000 GBP'000
---------------- --------- --------
Blink - 776
================ ========= ========
Valeos - 104
================ ========= ========
Globiva 612 612
---------------- --------- --------
At 31 December 612 1,492
---------------- --------- --------
During the financial year ended 31 December 2020 a total
impairment charge of GBP880,000 was recognised against goodwill
held (2019: GBPnil). This was in relation to the acquired goodwill
of Blink and Valeos, which have been written down in full, see note
5.
The Group tests goodwill annually for impairment or more
frequently if there is indication goodwill may be impaired.
10. Other intangible assets
Business partner Internally generated Externally acquired
relationships software software Total
GBP'000 GBP'000 GBP'000 GBP'000
=========================== ========================= ========================= ========================= ========
Cost:
--------------------------- ------------------------- ------------------------- ------------------------- --------
At 1 January 2019 304 1,600 3,345 5,249
--------------------------- ------------------------- ------------------------- ------------------------- --------
Additions 340 1,237 607 2,184
--------------------------- ------------------------- ------------------------- ------------------------- --------
Disposals - - (7) (7)
--------------------------- ------------------------- ------------------------- ------------------------- --------
Exchange adjustments - (76) (149) (225)
=========================== ========================= ========================= ========================= ========
At 31 December 2019 644 2,761 3,796 7,201
--------------------------- ------------------------- ------------------------- ------------------------- --------
Additions - 1,267 141 1,408
--------------------------- ------------------------- ------------------------- ------------------------- --------
Disposals - - (265) (265)
--------------------------- ------------------------- ------------------------- ------------------------- --------
Exchange adjustments - (79) (23) (102)
--------------------------- ------------------------- ------------------------- ------------------------- --------
At 31 December 2020 644 3,949 3,649 8,242
=========================== ========================= ========================= ========================= ========
Accumulated amortisation:
--------------------------- ------------------------- ------------------------- ------------------------- --------
At 1 January 2019 - 505 1,956 2,461
--------------------------- ------------------------- ------------------------- ------------------------- --------
Provided during the year 88 339 564 991
--------------------------- ------------------------- ------------------------- ------------------------- --------
Disposals - - (1) (1)
--------------------------- ------------------------- ------------------------- ------------------------- --------
Impairment - - 322 322
--------------------------- ------------------------- ------------------------- ------------------------- --------
Exchange adjustments (1) (7) (97) (105)
=========================== ========================= ========================= ========================= ========
At 31 December 2019 87 837 2,744 3,668
--------------------------- ------------------------- ------------------------- ------------------------- --------
Provided during the year 142 501 428 1,071
--------------------------- ------------------------- ------------------------- ------------------------- --------
Disposals - - (211) (211)
--------------------------- ------------------------- ------------------------- ------------------------- --------
Exchange adjustments (6) (4) (17) (27)
--------------------------- ------------------------- ------------------------- ------------------------- --------
At 31 December 2020 223 1,334 2,944 4,501
=========================== ========================= ========================= ========================= ========
Carrying amount:
--------------------------- ------------------------- ------------------------- ------------------------- --------
At 31 December 2019 557 1,924 1,052 3,533
=========================== ========================= ========================= ========================= ========
At 31 December 2020 421 2,615 705 3,741
--------------------------- ------------------------- ------------------------- ------------------------- --------
Amortisation of intangible assets totalling GBP1,071,000 (2019:
GBP991,000) is recognised through administrative expenses in the
consolidated income statement.
Internally generated software additions of GBP1,267,000 (2019:
GBP1,237,000) reflect the capitalisation of staff costs in IT
development projects.
Internally generated software includes GBP622,000 (2019:
GBP765,000) relating to assets in development which are not yet
operational and are not amortised. The anticipated delivery date of
the project in development is 2022.
11. Property, plant and equipment
Leasehold improvements Computer systems Furniture and equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
=========================== ====================== ================ ======================= ========
Cost:
--------------------------- ---------------------- ---------------- ----------------------- --------
At 1 January 2019 919 3,461 938 5,318
--------------------------- ---------------------- ---------------- ----------------------- --------
Additions 174 1,178 125 1,477
--------------------------- ---------------------- ---------------- ----------------------- --------
Disposals (33) (262) (309) (604)
--------------------------- ---------------------- ---------------- ----------------------- --------
Exchange adjustments (54) (193) (59) (306)
=========================== ====================== ================ ======================= ========
At 31 December 2019 1,006 4,184 695 5,885
--------------------------- ---------------------- ---------------- ----------------------- --------
Additions 103 223 30 356
--------------------------- ---------------------- ---------------- ----------------------- --------
Disposals (150) (776) (213) (1,139)
--------------------------- ---------------------- ---------------- ----------------------- --------
Exchange adjustments (27) (44) (33) (104)
--------------------------- ---------------------- ---------------- ----------------------- --------
At 31 December 2020 932 3,587 479 4,998
=========================== ====================== ================ ======================= ========
Accumulated depreciation:
--------------------------- ---------------------- ---------------- ----------------------- --------
At 1 January 2019 385 2,605 611 3,601
--------------------------- ---------------------- ---------------- ----------------------- --------
Provided during the year 197 409 84 690
--------------------------- ---------------------- ---------------- ----------------------- --------
Disposals (33) (244) (293) (570)
--------------------------- ---------------------- ---------------- ----------------------- --------
Exchange adjustments (34) (130) (34) (198)
=========================== ====================== ================ ======================= ========
At 31 December 2019 515 2,640 368 3,523
--------------------------- ---------------------- ---------------- ----------------------- --------
Provided during the year 222 582 108 912
--------------------------- ---------------------- ---------------- ----------------------- --------
Disposals (136) (761) (212) (1,109)
--------------------------- ---------------------- ---------------- ----------------------- --------
Exchange adjustments (19) 31 (10) 2
--------------------------- ---------------------- ---------------- ----------------------- --------
At 31 December 2020 582 2,492 254 3,328
=========================== ====================== ================ ======================= ========
Carrying amount:
--------------------------- ---------------------- ---------------- ----------------------- --------
At 31 December 2019 491 1,544 327 2,362
=========================== ====================== ================ ======================= ========
At 31 December 2020 350 1,095 225 1,670
=========================== ====================== ================ ======================= ========
12. Leases
The Group's right-of-use assets are as follows:
Motor
Property vehicles Equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------- --------- --------- --------
Cost:
-------------------------------- -------- --------- --------- --------
At 1 January 2019 - on adoption
of IFRS 16 4,617 196 310 5,123
-------------------------------- -------- --------- --------- --------
Additions 3,024 41 - 3,065
-------------------------------- -------- --------- --------- --------
Exchange adjustments (421) (19) - (440)
-------------------------------- -------- --------- --------- --------
At 31 December 2019 7,220 218 310 7,748
-------------------------------- -------- --------- --------- --------
Additions 2,062 29 - 2,091
-------------------------------- -------- --------- --------- --------
Disposals (1,344) (29) (20) (1,393)
-------------------------------- -------- --------- --------- --------
Exchange adjustments (297) (9) - (306)
-------------------------------- -------- --------- --------- --------
At 31 December 2020 7,641 209 290 8,140
-------------------------------- -------- --------- --------- --------
Accumulated depreciation:
-------------------------------- -------- --------- --------- --------
At 1 January 2019 - on adoption
of IFRS 16 - - - -
-------------------------------- -------- --------- --------- --------
Provided during the year 1,137 89 76 1,302
-------------------------------- -------- --------- --------- --------
Exchange adjustments (46) (4) - (50)
-------------------------------- -------- --------- --------- --------
At 31 December 2019 1,091 85 76 1,252
-------------------------------- -------- --------- --------- --------
Provided during the year 1,323 73 75 1,471
-------------------------------- -------- --------- --------- --------
Disposals (637) (14) (12) (663)
-------------------------------- -------- --------- --------- --------
Impairment 41 - - 41
-------------------------------- -------- --------- --------- --------
Exchange adjustments (52) (6) - (58)
-------------------------------- -------- --------- --------- --------
At 31 December 2020 1,766 138 139 2,043
-------------------------------- -------- --------- --------- --------
Carrying amount:
-------------------------------- -------- --------- --------- --------
At 31 December 2019 6,129 133 234 6,496
-------------------------------- -------- --------- --------- --------
At 31 December 2020 5,875 71 151 6,097
-------------------------------- -------- --------- --------- --------
The corresponding lease liabilities in line with IFRS 16 are as
follows:
2020 2019
GBP'000 GBP'000
------------------------ -------- --------
Year 1 1,396 1,925
------------------------ -------- --------
Year 2 1,317 1,344
------------------------ -------- --------
Year 3 1,250 1,183
------------------------ -------- --------
Year 4 1,139 1,127
------------------------ -------- --------
Year 5 1,132 1,028
------------------------ -------- --------
After 5 years 2,628 3,137
------------------------ -------- --------
8,862 9,744
------------------------ -------- --------
Less: unearned interest (2,224) (2,478)
------------------------ -------- --------
Total lease liabilities 6,638 7,266
------------------------ -------- --------
2020 2019
GBP'000 GBP'000
------------------------------ -------- --------
Non-current lease liabilities 5,756 5,895
------------------------------ -------- --------
Current lease liabilities 882 1,371
------------------------------ -------- --------
Total lease liabilities 6,638 7,266
------------------------------ -------- --------
As a result of the COVID-19 pandemic the Group has benefited
from lease payment holidays on certain of its lease agreements and
extensions on two leases. The Group has applied the practical
expedient to these rent concession agreements. The payment holidays
have reduced the payment in the year to 31 December 2020 by
GBP132,000 and the extensions have increased the payments in the
year to 31 December 2024 and 31 December 2025 by GBP21,000 and
GBP26,000 respectively. The Group has re-measured the lease
liability using the revised lease payments and the discount rate
originally applied to the lease, resulting in a decrease in the
lease liability of GBP86,000 which has been recognised in the
income statement as a credit to variable lease expense.
13. Share capital
Ordinary Ordinary Deferred
shares of shares shares of
1 penny of 9 pence
each GBP1 each each Total
(thousands) (thousands) (thousands) (thousands)
------------------------------ ------------ ------------ ------------ ------------
Called-up and allotted
------------------------------ ------------ ------------ ------------ ------------
At 1 January 2020 864,650 - 171,650 1,036,300
------------------------------ ------------ ------------ ------------ ------------
Issue of shares in connection
with:
------------------------------ ------------ ------------ ------------ ------------
Exercise of share options
(pre-consolidation) 9,485 - - 9,485
------------------------------ ------------ ------------ ------------ ------------
Share consolidation (874,135) 8,741 - (865,394)
------------------------------ ------------ ------------ ------------ ------------
Exercise of share options
(post-consolidation) - 2 - 2
------------------------------ ------------ ------------ ------------ ------------
At 31 December 2020 - 8,743 171,650 180,393
------------------------------ ------------ ------------ ------------ ------------
Ordinary Ordinary Deferred
shares of shares shares of
1 penny of 9 pence
each GBP1 each each Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ---------- ---------- ---------- --------
Called-up and allotted
------------------------------ ---------- ---------- ---------- --------
At 1 January 2020 8,643 - 15,413 24,056
------------------------------ ---------- ---------- ---------- --------
Issue of shares in connection
with:
------------------------------ ---------- ---------- ---------- --------
Exercise of share options
(pre-consolidation) 95 - - 95
------------------------------ ---------- ---------- ---------- --------
Share consolidation (8,738) 8,738 - -
------------------------------ ---------- ---------- ---------- --------
Exercise of share options
(post-consolidation) - 2 - 2
------------------------------ ---------- ---------- ---------- --------
At 31 December 2020 - 8,740 15,413 24,153
------------------------------ ---------- ---------- ---------- --------
On 29 May 2020, a share consolidation was undertaken on the
basis of one new ordinary share of GBP1 issued for every 100 former
ordinary shares of 1 penny. The share consolidation exercise has
reduced the total number of ordinary shares in issue by 865,394,000
whilst the equity value has remained unchanged. The new ordinary
shares carry the same rights as the former ordinary shares. The
deferred shares were not subject to the share consolidation.
14. Share-based payment
Equity-settled share-based payments
Share-based payment charges comprise 2016 LTIP charges of
GBP491,000 (2019: GBP1,115,000) which are disclosed within
administrative expenses. No options have been granted in the
current year as part of the 2016 LTIP (2019: 18,092,000 options
granted).
The share consolidation which completed on 29 May 2020 led to
outstanding share options being reduced in the ratio of one option
over a GBP1 ordinary share for 100 options over a 1 penny ordinary
share. As a result, the number of outstanding 2016 LTIP share
options has reduced by 32,769,000.
2020 2019
----------------------- -----------------------
Weighted Weighted
Number average Number average
of share exercise of share exercise
options price options price
(thousands) (GBP) (thousands) (GBP)
-------------------------------- ------------ --------- ------------ ---------
2016 LTIP
-------------------------------- ------------ --------- ------------ ---------
Outstanding at 1 January 44,187 - 37,981 -
-------------------------------- ------------ --------- ------------ ---------
Granted during the year - - 18,092 -
-------------------------------- ------------ --------- ------------ ---------
Share consolidation in the year (32,769) - - -
-------------------------------- ------------ --------- ------------ ---------
Exercised during the year (9,487) - - -
-------------------------------- ------------ --------- ------------ ---------
Lapsed during the year (1,602) - (7,417) -
-------------------------------- ------------ --------- ------------ ---------
Forfeited during the year - - (4,469) -
-------------------------------- ------------ --------- ------------ ---------
Outstanding at 31 December 329 - 44,187 -
-------------------------------- ------------ --------- ------------ ---------
Exercisable at 31 December 14 - - -
-------------------------------- ------------ --------- ------------ ---------
Nil-cost options and conditional shares granted under the 2016
LTIP normally vest after three years, lapse if not exercised within
ten years of grant and will lapse if option holders cease to be
employed by the Group. Vesting of 2016 LTIP options and shares are
also subject to achievement of certain performance criteria
including Group financial targets and non-financial events measured
within the vesting period.
The options outstanding at 31 December 2020 had a weighted
average remaining contractual life of one year (2019: one year) in
the 2016 LTIP.
Realisation proceeds plan (RPP)
The RPP is a new share-based payment award scheme implemented
during the current year. This scheme can be treated as cash- or
equity-settled dependent upon the distributable proceeds arising
from a realisation event. The RPP scheme has been issued to certain
employees and vests once a realisation event occurs. At 31 December
2020, there has been no realisation event and the expectation of
one occurring is uncertain, accordingly no fair value has been
attributed to the awards at the balance sheet date and there are no
charges recognised in relation to this scheme in the consolidated
income statement.
Cash-settled share-based payments
In 2019, the Group granted certain employees with notional share
options that require the Group to pay the intrinsic value of the
notional share to the employee at the date of exercise. The
notional share options have the same requirements and conditions as
the 2016 LTIP. There have been no similar awards in 2020. The Group
has recorded a total expense in relation to cash-settled awards in
2020 of GBP8,000 (2019: GBP105,000) which are disclosed within
administrative expenses. The Group has recorded liabilities for its
cash-settled awards of GBP129,000 (2019: GBP121,000) which are
included in trade creditors and accruals.
15. Reconciliation of operating cash flows
2020 2019
GBP'000 GBP'000
---------------------------------------------------------- --------- --------
Loss for the year (1,597) (944)
========================================================== ========= ========
Adjustments for:
========================================================== ========= ========
Depreciation and amortisation 3,454 2,983
========================================================== ========= ========
Share-based payment expense 499 1,220
========================================================== ========= ========
Impairment loss on goodwill 880 -
========================================================== ========= ========
Impairment loss on intangible assets - 322
========================================================== ========= ========
Impairment loss on right-of-use assets 41 -
========================================================== ========= ========
Loss on disposal of intangible assets 54 6
========================================================== ========= ========
Loss on disposal of property, plant and equipment 30 34
========================================================== ========= ========
Share of loss in joint venture 264 320
========================================================== ========= ========
Lease concessions (86) -
========================================================== ========= ========
Investment revenues (412) (508)
========================================================== ========= ========
Finance costs 415 1,003
========================================================== ========= ========
Other gains and losses 1,294 -
========================================================== ========= ========
Income tax charge 3,609 2,076
---------------------------------------------------------- --------- --------
Operating cash flows before movements in working capital 8,445 6,512
========================================================== ========= ========
(Increase)/decrease in inventories (58) 72
========================================================== ========= ========
Decrease/(increase) in contract assets 1,272 (2,133)
========================================================== ========= ========
Decrease/(increase) in receivables 663 (4,970)
========================================================== ========= ========
Increase in insurance assets (4) (18)
========================================================== ========= ========
(Decrease)/increase in payables (3,049) 1,556
========================================================== ========= ========
(Decrease)/increase in contract liabilities (953) 2,245
========================================================== ========= ========
Increase in insurance liabilities 179 139
========================================================== ========= ========
Decrease in provisions (309) (553)
---------------------------------------------------------- --------- --------
Cash from operations 6,186 2,850
========================================================== ========= ========
Income taxes paid (3,024) (1,712)
---------------------------------------------------------- --------- --------
Net cash from operating activities 3,162 1,138
---------------------------------------------------------- --------- --------
Reconciliation of net funds
Foreign
exchange
At and other At
1 January non-cash 31 December
2020 Cash flow movements 2020
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- ---------- --------- ---------- ------------
Net cash per cash flow statement 21,957 301 (402) 21,856
--------------------------------- ---------- --------- ---------- ------------
Investing activities:
--------------------------------- ---------- --------- ---------- ------------
Net investment lease assets 156 (117) (39) -
--------------------------------- ---------- --------- ---------- ------------
Total movement from investing
activities 156 (117) (39) -
--------------------------------- ---------- --------- ---------- ------------
Financing activities:
--------------------------------- ---------- --------- ---------- ------------
Lease liabilities (7,266) 1,783 (1,155) (6,638)
--------------------------------- ---------- --------- ---------- ------------
Borrowings due outside of
one year
--------------------------------- ---------- --------- ---------- ------------
* Unamortised issue costs 50 110 (62) 98
--------------------------------- ---------- --------- ---------- ------------
Total movement from financing
activities (7,216) 1,893 (1,217) (6,540)
--------------------------------- ---------- --------- ---------- ------------
Total net funds 14,897 2,077 (1,658) 15,316
--------------------------------- ---------- --------- ---------- ------------
16. Related party transactions
Transactions with associated parties
The Group has a balance receivable from its joint venture, KYND,
in the amount of GBP150,000 (2019: GBPnil). The loan by the Group
to KYND forms part of KYND's participation in the UK Government's
'Future Fund Scheme' and falls due for repayment on 26 June
2023.
Transactions with related parties
ORConsulting Limited (ORCL) is an organisation used by the Group
for consulting services in relation to leadership coaching.
Organisation Resource Limited (ORL), a company owned by Mark
Hamlin, who is the Senior Independent Director in the Group,
retains intellectual property in ORCL for which it is paid a
licence fee. The fee paid to ORCL by the Group in 2020 was
GBP63,000 plus VAT (2019: GBP100,000) and was payable under 30-day
credit terms.
Mark Hamlin is the Chairman of Globiva. The fees for this role
are paid to his consultancy company, ORL. The fee paid to ORL by
the Group in 2020 was GBP73,000 (2019: GBP75,000) and was payable
under 25-day credit terms.
Certain bank loans taken out by Group entities are secured
against the assets of the Company. There were no amounts
outstanding on these loans at 31 December in either the current or
prior year. The GBP5,000,000 facility commitment remains
available.
Remuneration of key management personnel
The remuneration of the Directors and senior management team,
who are the key management personnel of the Group, is set out
below:
2020 2019
GBP'000 GBP'000
------------------------------ --------- --------
Short-term employee benefits 2,442 2,412
============================== ========= ========
Post-employment benefits 89 87
============================== ========= ========
Share-based payments 423 893
------------------------------ --------- --------
2,954 3,392
------------------------------ --------- --------
17. Events after the balance sheet date
In the first quarter of 2021 the Group has undertaken a review
of the operational effectiveness of its business units. The Group
has supported a number of its operations in recent years as part of
its plan to develop and organically grow the business. As the Group
re-balances its resource allocation policy these operations have
been assessed and restructuring activities initiated where it is
considered large-scale operational efficiencies are available or
there is not a clear pathway to profitable performance in the
medium to long-term.
As a result, the Group has restructured its Blink, Spanish,
Mexican and Malaysian businesses. This activity has resulted in
costs associated with colleagues leaving the business, professional
costs to support the activity and office closure costs. The total
costs associated with the restructuring is expected to be in the
range of GBP1.1 million to GBP1.4 million.
Cautionary statement
This announcement has been prepared solely to provide additional
information to shareholders as a body to meet the relevant
requirements of the UK Listing Authority. The announcement should
not be relied on by any other party or for any other purpose.
The announcement contains certain forward-looking statements.
These statements are made by the Directors in good faith based on
the information available to them up to the time of approval of the
announcement but such statements should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying any such forward-looking information.
Subject to the requirements of the UK Listing Authority, CPP
undertakes no obligation to update these forward-looking statements
and it will not publicly release any revisions it may make to these
forward-looking statements that may result from events or
circumstances arising after the date of this announcement.
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END
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