TIDMEBQ
RNS Number : 9705M
Ebiquity PLC
24 September 2021
GENERAL TEXT AMMENT
The following non material amendment has been made to the
'Interim Results' announcement released on 23 September 2021 at
07:00 under RNS No 6871M.
The Company has amended selected client detail.
All other details remain unchanged.
The full amended text is shown below.
Ebiquity plc
Interim Results for the six months ended 30 June 2021
Strong recovery, building momentum
Ebiquity plc ("Ebiquity" or the "Company"), a world leader in
media investment analysis, announces interim results for the six
months ended 30 June 2021.
Financial Highlights
Group 2021 2020 Change
GBPm GBPm GBPm
------- ------- ------------
Revenue 32.0 26.8 +5.2m /+20%
------- ------- ------------
Underlying Operating Profit/(Loss)
(1) 2.3 (1.4) +3.7m
------- ------- ------------
Underlying Profit/(Loss)
before Tax (1) 2.0 (1.9) +3.9m
------- ------- ------------
Underlying Earnings/(Loss)
per Share (1) 1.4p (2.7)p +4.1p
------- ------- ------------
Statutory Operating Loss (0.9) (1.2) +0.3m
------- ------- ------------
Statutory Loss before Tax (1.1) (1.7) +0.6m
------- ------- ------------
Statutory Loss per Share (2.0)p (2.6)p +0.6p
------- ------- ------------
Note 1: Underlying operating profit is defined as the operating
profit excluding highlighted items. These include share-based
payments, amortisation of purchased intangibles and non-recurring
items. Underlying profit before tax and earnings per share are
calculated based on the underlying operating profit.
-- Revenue increased by GBP5.2m (20%) as the market recovery continues
-- Return to profitability with Underlying Operating Profit of
GBP2.3m (2020: Loss of GBP1.4m) and Underlying Operating Profit
margin of 7%
-- Statutory Loss after making accrual of GBP2.4m towards
deferred consideration for Digital Decisions B.V, payable in 2023
(based on its expected performance in 2021 and 2022)
-- Underlying cash inflow from operations of GBP3.4m
-- Financial position at 30 June 2021 remains strong: net bank
debt of GBP9.6m, cash balances of GBP9.3m and undrawn bank
facilities of GBP5.0m
Operational Performance and Highlights
-- All regions and business segments improved revenue and
profitability in H1 2021, compared to H1 2020
-- Significant new business wins including Amazon (US), MengNiu
(China), BMW and Ford of Europe (global projects)
-- Digital media solutions revenue grew to GBP1.6m and new
Governance and Audience Data Assessment services launched during
the period
Outlook
-- Progress expected to continue in the second half of the year,
although macro-environment remains uncertain
-- Digital media solutions continuing to grow their client base and revenue
-- Board expects full year underlying operating profit to be
slightly above previous expectations
Nick Waters, CEO, commented:
"Ebiquity has made a strong and rapid recovery from the
challenges of 2020 with client activity rising and a healthy new
business performance. The upturn has been broad based with all
regions and Service Lines improving revenue and profitability.
Revenue from digital services is growing in line with expectations
and the development of additional product solutions to the
portfolio is on track. Two new products have been added and further
launches are planned before the end of the year. We expect to
continue our progress in the second half of the year although the
macro-environment remains uncertain."
Enquiries:
Ebiquity
Nick Waters, CEO
Alan Newman, CFO & COO 020 7650 9600
Instinctif Partners
Matthew Smallwood 07831 379 122
Guy Scarborough 07917 178 920
Panmure Gordon (Financial Adviser, NOMAD & Broker)
Alina Vaskina (Corporate Advisory)
Charles Leigh-Pemberton (Corporate Broking) 020 7886 2500
Chief Executive's Review
The first half of the year marks a rapid recovery from the
challenges of 2020 and the first six months of implementing
Ebiquity's new strategy. Overall, the Group can be satisfied with
the pace of our performance improvement and strategic progress.
Group revenue growth has been strong with a 20% increase over
prior year with all regions and Service Lines improving both
revenue and profitability. This good performance builds on the
trends and momentum seen in H2 2020. It reflects new business wins
from Q4 of 2020, and during the first half of this year, including
the full year effect of those secured following Accenture's market
exit. Clients in most sectors have returned to more normalised
levels of activity, with the notable exceptions of travel and
entertainment, although there are signs of these now also picking
up.
Our business performance has been enhanced by buoyant agency
selection activity with high levels of media buying work put out
for tender following a quiet 2020. With global advertising markets
suffering a dislocation during the height of the pandemic,
advertisers are now reviewing their agency and technology partners
to support their activities in a realigned environment, and to
drive improved media price commitments. This has provided good
opportunities for Ebiquity which has performed well securing a wide
range of global media review mandates from major brand owners
including Unilever, Ferrero, BMW, and Daimler, as well as many
national advertisers through our network of overseas offices.
The Group has returned to first half year profitability with
costs maintained at stable levels and internal costs only increased
at the rate of inflation. Staffing numbers were maintained during
2020 to enable the Company to fulfil demand when it returned. This
has proved effective as Ebiquity continued to meet client
requirements as they re-engaged during the first half.
Revenue from digital media solutions is growing as planned and
contributing to profit in line with the higher margin opportunity
of productised services. The development of an enhanced portfolio
of digital product solutions is on track.
The Group continues to position itself as the global market
leader publishing white papers and hosting webinars on "Surviving
the Cookie Apocalypse", "A Guide to Advanced TV", and "The
Challenge of Attention". These have been well received with
attendance of the webinars and downloads of the white papers
achieving record levels for the Group and gaining greater
engagement through social media channels.
All offices closed at the height of the pandemic have re-opened
around the world but changing government guidance and policy by
market has meant at various times that staff have continued to work
from home, with Sydney for example currently being under lockdown.
In line with many companies, Ebiquity has now formally adopted
hybrid working practices with a mix of working from home and in the
office with a positive reaction from staff.
Progress in Delivery of the Strategy
The Company's objective is to increase revenue and improve
margins. We aim to achieve this through the clear positioning and
strategy that we set out in our 2020 annual report.
Ebiquity operates as an independent intermediary in the global
media advertising market advising brand owners on how to improve
media investment decisions in order to improve business outcomes.
We have clarified our positioning as a world leader in media
investment analysis operating as a deep specialist in the media
vertical, and have initiated a strategy:
i) to develop a portfolio of productised digital services
solving brand owners' problems of inefficiency, wastage and lack of
effectiveness in digital advertising channels. As productised
services they will be scalable and repeatable to deliver
sustainable revenue streams at enhanced margins
ii) to build on Ebiquity's extensive client base developing
higher value strategic clients by cross-selling more products and
services, and extending geographical reach
iii) to improve operational efficiency through a simplified
management structure, improved processes and use of technology,
greater automation, and increased offshoring.
We also aim to strengthen our position and accelerate growth in
the North American and Asia Pacific regions, reflecting the
importance of these markets for brand owners.
Product
The development of a portfolio of digital product solutions by
the Digital Innovation Centre is on track and progressing well. The
initial "Sourcing and Monitoring" product is delivering to plan
with strong revenue growth and improving margins as it scales. Two
new solutions were launched in July 2021.
The "Governance" solution tracks and monitors a range of key
principles for digital media management through an automated
ingestion and reporting process on an "always on" basis.
The "Audience Data Assessment" solution addresses a critical
need for clarity around targeting options when third party cookies
are deprecated by Google, and with Apple's removal of identifiers
for advertising.
We are also piloting a "Responsible Media Investment" product to
help advertisers understand the Environmental, Social and
Governance ("ESG") standards of the recipients of their media
investments against a range of criteria.
There are further product launches planned for the Autumn and
the first quarter of 2022.
Clients
Our focus on building higher value strategic clients is
progressing well. A Chief Client Officer was appointed at the end
of 2020 and a universe of high value and high potential clients
identified. Specific client relationship management attention has
been directed at this universe which has contributed to revenue
growth ahead of expectations. We continue to invest into this
potential by recruiting additional global Client Partners. One was
added in the Netherlands in 2020, a second in the USA early in 2021
and a third will join the Group in October based in Paris. This
improves our geographic coverage of major international brand
owners and strengthens our bench of senior talent.
Operational efficiency
We have made progress improving operational efficiency through a
simplified management structure. We have moved away from a
"Practice Management" approach of individual vertical P&Ls and
implemented horizontal P&L management by geography (country and
region) to enhance client relationship management and to facilitate
the cross-sell and upsell of services.
We have clarified our service offering which is now provided
through five Service Lines:- Media Management, Media Performance,
Marketing Effectiveness, Technology Advisory and Contract
Compliance.
Strong progress has been made improving automation in the US
operation and in FirmDecisions' processes. We have continued to
move more work offshore from several countries with project hours
served by our Madrid-based Media Operations Centre up 28% versus
prior year.
As we seek to accelerate growth of our business in North America
and Asia Pacific we have strengthened the management teams in both
regions, recruiting new Managing Directors for the US and China.
Both started in January and have made an immediate positive
impact.
Our US team has won work for a global food and beverage group
which now represents one of our largest clients in that market.
This builds on the global win of Amazon assignments led out of the
USA. In China, we have won significant business from major domestic
corporates including Huawei and MengNiu, and new business from
international advertisers such as LVMH and Pernod Ricard.
In the second half of this year, Ebiquity will start to offer
media services in India, in addition to contract compliance which
we launched in that market last year. India is a top 10 global
advertising market, with a strong growth trajectory, and is highly
complex. It is a challenging market for multinationals to navigate,
supporting demand for our services.
Operational metrics - measuring progress
As previously flagged, we are pleased to introduce a set of
operational metrics to guide our strategic progress, and now report
the baseline figures as at 31 December 2020. We will report
progress against these metrics on an annual basis, beginning with
the 2021 annual report.
Operational Metric Baseline measure
in 2020
No. of clients buying two or more Service Lines 59 clients
-----------------
No. of clients buying one or more products from 10 clients
the new digital solutions portfolio
-----------------
Volume of digital impressions processed, analysed 112 billion
and reported on the platform impressions
-----------------
Value of digital advertising spend processed, US$ 0.46 billion
analysed and reported on the platform
-----------------
Proportion of revenue relating to digital media
(for media performance & media management service
lines) 25%
-----------------
Following the proof of concept in 2020 of the new "Source Data
Monitoring" product the Group has developed scalable infrastructure
to expand the portfolio of digital product solutions and extend
these to more clients. This will accelerate the Group's transition
to a data led, technology enabled, digital first business.
At the half year, the number of clients buying one or more
products from the new digital solutions portfolio was ahead of
expectations. This is translating to significant growth in the
volume of impressions analysed which increases the depth and
breadth of our understanding of the digital market, enhancing the
robustness of our analysis. As clients see the benefits to their
business more brands and geographies are added to our assignments
increasing the value of advertising investments under our review,
demonstrating the trust and value advertisers see in our products.
This in turn will enhance our ability to attract new clients to the
service.
Both the volume of impressions analysed and the value of spend
reviewed are ahead of our expectations as is the number of
countries served with the new solutions. This demonstrates our
ability to create value for our clients wherever they advertise,
and positions Ebiquity as the preferred partner for major
multinational advertisers.
The number of clients buying two or more Service Lines is in
line with our plans for the first half of the year, as is the
percentage of digital revenues for the Group.
Outlook
We are pleased with the progress made during the first half
which capitalised on the improving trends in the marketplace and on
the development of our new higher-margin digital solutions. We have
built on and extended existing relationships as well as winning
significant new business in this and the prior year. In the second
half, we expect to see our digital media solutions continuing to
grow their client base and revenue. The anticipated strong
performance in 2021 and 2022 of the Digital Decisions acquisition
is reflected in the provision made in these financial statements
for its earn-out consideration. Following the good start to 2021,
we expect an underlying full year profit slightly above the Board's
previous expectations.
Review of Performance
Revenue
H1 21 H1 20 Variance
------ ------ --------- ----
GBPm GBPm GBPm %
------ ------ --------- ----
Media 26.8 21.9 4.9 22%
------ ------ --------- ----
Analytics and Tech 5.2 4.9 0.3 7%
------ ------ --------- ----
Total 32.0 26.8 5.2 20%
------ ------ --------- ----
Media
Media revenue increased by 22% from the prior year to GBP26.8
million, reflecting the market recovery and our new business wins.
Within this, the revenue from Media Performance services - which
help clients to assess and optimise their media buying performance
- increased by 15%. Revenue from Media Management services, and
notably agency selection advice, increased by almost 90% reflecting
the high level of selection exercises conducted by major
advertisers in the period, although this is still a minority
element of our overall Media revenue. Revenue from our digital
media solutions increased significantly with 18 clients using the
core Source Data Monitoring service by the end of the period. Both
the growth of agency selection and digital solutions contributed to
an increase of 28% in the revenue of our specialist unit focussing
on global, multi-market Media projects.
Contract Compliance revenue (branded as FirmDecisions) increased
by 31%, facilitated by agencies' re-opening of their offices and
restarting the supply of data to its audit teams, which had been
constrained during the height of the Covid-19 restrictions.
Geographically, all regions experienced good revenue growth with
USA up 58% and Europe up 22%, reflecting recent wins in these
territories, especially ex-Accenture clients. APAC revenue
increased by 10% overall and UK revenue was static, due in part to
activity in hospitality and retail sectors remaining below normal
levels due to the pandemic.
Analytics and Tech
Overall revenue from Analytics and Tech increased by 7%. Within
this, our Analytics service line, whose advanced analytical
techniques help brands to plan and optimise their investment in
media, increased revenue by 10% with the key sectors served
including telecoms, automotive and retail. The AdTech practice
which helps brand owners to manage their digital eco-system,
increased revenue by 41% through a combination of new clients
(notably Lenovo) and existing clients increasing their activity.
Digital Balance, based in Australia, increased revenue by 7%.
Operating Profit Analysis
Underlying Operating Profit Underlying Operating
Profit Margin
H1 21 H1 20 Variance H1 21 H1 20
------- ------- ---------------- ----------- ----------
GBPm GBPm GBPm % % %
------- ------- ------- ------- ----------- ----------
Media 5.3 2.4 2.9 124% 20% 11%
------- ------- ------- ------- ----------- ----------
Analytics and Tech 0.4 (0.7) 1.1 (160%) 8% (15%)
------- ------- ------- ------- ----------- ----------
Unallocated costs (3.4) (3.0) (0.4) 14% - -
------- ------- ------- ------- ----------- ----------
Total 2.3 (1.4) 3.7 (266%) 7% (5%)
------- ------- ------- ------- ----------- ----------
The Media segment achieved an underlying operating margin of
20%, approaching the performance in pre-Covid periods, after
falling to 11% in 2020. This reflected the increase in revenue
which was delivered while maintaining stable operating costs and
staff levels, compared to the prior year. Analytics and Tech
returned to profitability after being loss-making in H1 2020 with
its margin of 8% exceeding the level achieved in H1 2019.
Unallocated costs, which comprise corporate and support costs,
increased by GBP0.4 million mainly due to negative foreign exchange
variances on debtor balances (compared to positive variances in the
prior year) and higher executive directors' costs, as the CEO role
was vacant in the first half of 2020.
Financial Review
Revenue for the half year ended 30 June 2021 of GBP32.0 million
was GBP5.2 million higher than the comparable period in 2020.
The underlying operating profit (statutory operating profit
excluding highlighted items) of GBP2.3 million represented an
improvement of GBP3.7 million from the prior year loss of GBP1.4
million. Project-related costs (which comprise external partner and
production costs) increased by 31% to GBP4.0 million from GBP3.0
million, due to more projects including markets not served directly
by Ebiquity's own offices. However, total operating expenses,
including cost of sales and administrative expenses, increased by
only 3% to GBP25.8 million from GBP25.1 million, as our internal
staff resources were kept stable. This contributed to the
underlying operating profit uplift and to the profit margin
improving to 7% compared to a loss of 5% in the prior year.
There was an underlying profit before tax of GBP2.0 million
compared to a loss of GBP1.9 million for the six months ended 30
June 2020. Net finance costs were GBP0.3 million in 2021, a
reduction of GBP0.3 million (49%) compared to the prior year, due
to a foreign exchange gain on intercompany loan balances.
The statutory operating loss (after highlighted items) reduced
to a loss of GBP0.9 million, from a loss of GBP1.2 million in the
prior year. This reflected the improved underlying performance,
offset by an increase in highlighted items (before tax) of GBP3.3
million, due mainly to the accrual for the Digital Decisions
post-date remuneration. There was a statutory loss before tax of
GBP1.1 million in this period, compared to a loss of GBP1.7 million
in the prior year.
Highlighted items
Highlighted items after tax in the period totalled a charge of
GBP2.9 million (2020: profit of GBP0.1 million) and include the
following:
-- GBP2.4 million charge to accrue for post-date remuneration
payable relating to the acquisition of Digital Decisions B.V in
January 2020 (June 2020: GBP0.1 million)
-- GBP0.5 million for purchased intangibles asset amortisation
(June 2020: GBP0.6 million) and GBP0.2 million charge relating to
share options (June 2020: GBP1.9 million credit)
The contingent consideration relating to Digital Decisions B.V.
is being accounted for as post-date remuneration as payment is
dependent upon the principal vendor remaining in employment with
the Group. This will be payable in 2023 and the amount due will be
calculated as six times the average profit generated in the two
years ended 31 December 2022 from digital media products developed
by the Digital Innovation Centre, less the initial consideration of
GBP700,000 paid in January 2020. The current estimate of the amount
payable is GBP10.2 million which is being accrued on a
straight-line basis over the two years to which it relates, less
the discount to fair value. This amount will be revised at each
half year, based on the latest projections, with any adjustments
being treated as a highlighted item. This consideration is payable
in a mixture of cash and/or Ebiquity shares which the Company will
determine at the time of payment, having regard to its overall
capital structure, debt facilities and the vendor's option to
request that a certain proportion be paid in cash.
Taxation
The underlying tax charge for the period is GBP0.5 million
compared to GBP0.2 million in the prior year. This is in line with
the increase in underlying profit before tax in the current period.
The tax credit included in highlighted items of GBP0.3 million
(2020: charge of GBP0.1 million) arose due to the deferred tax
impact of share options issued in the period and on the reduction
in the intangible asset net book value at the period end.
Earnings per share
There was an underlying basic earnings per share of 1.4p
compared to a loss per share of 2.7p in the prior period. The
diluted earnings/loss per share was the same as the basic figure in
both reporting periods. There was a statutory basic loss per share
of 2.0p (2020: loss per share of 2.6p).
Dividend
No dividend has been declared for the six months ended 30 June
2021 (2020: GBPnil).
Equity
During the six months to 30 June 2021, nil shares were issued
upon the exercise of employee share options. As a result, the total
share capital remained at 82,583,254 ordinary shares (31 December
2020: 82,583,254).
Cash conversion
Six months ended Six months ended
30 June 2021 30 June 2020
GBP'000 GBP'000
Reported cash from operations 2,886 4,310
Underlying cash from operations 3,399 5,439
Underlying operating profit/(loss) 2,282 (1,375)
Underlying cash from operations represents the cash flows from
operations excluding the impact of highlighted items. The
underlying net cash inflow from operations was GBP3.4 million
during 2021 (2020: GBP5.4 million). The decrease is due to the
working capital outflow of GBP1.3 million compared to an inflow of
GBP4.5 million, partially offset by the reduced loss in the current
period.
Cash conversion in the period was 149% demonstrating strong cash
management.
Net debt and banking facilities As at As at
30 June 30 June
2021 2020
GBP'000 GBP'000
Cash and cash equivalents net of
bank overdrafts 9,268 14,519
Bank debt (19,000) (19,000)
Prepaid loan arrangement fees 128 143
---------------------------------- --------- ---------
Bank net debt (9,604) (4,339)
US PPP Loan (1) (724) (804)
---------------------------------- --------- ---------
Net debt (10,328) (5,143)
(1) This represents a loan received under the US Paycheck
Protection Program. Loan forgiveness was applied for in relation to
this balance and was granted in August 2021. Therefore, this will
be treated as a grant rather than a loan and released to the income
statement in H2 2021.
All bank borrowings are held jointly with Barclays and NatWest.
The RCF facility agreement totals GBP24.0 million and has a
maturity period of four years, expiring in September 2023 with an
option for the Company to extend for one further year. The
committed RCF facility at 30 June 2021 totals GBP24.0 million, of
which GBP19.0 million was drawn (2020: the RCF of GBP24.0 million,
of which GBP19.0 million was drawn).
During the year, the Group continued to trade within the limits
of its banking facilities and associated covenants. Modified
covenants were agreed with the lenders with effect from July 2020.
These require the Group to maintain minimum liquidity of at least
GBP5.0 million, increasing to GBP7.0 million from September 2021,
at the end of every month during that period. From September 2021
an interest cover covenant will be re-introduced at > 4.0 and an
adjusted leverage covenant will be re-introduced, initially at <
4.0, increasing to < 4.25 in December 2021 and again to < 4.5
in March 2022, then reducing to < 3.5 in June 2022. The
quarterly covenants previously in force (based on EBITDA multiples:
interest cover > 4.0; adjusted leverage < 2.5; and adjusted
deferred consideration leverage < 3.0) will apply again from
September 2022 onwards.
Statement of financial position and net assets
Debtor days have increased to 68 days from 58 days at 31
December 2020. This is partly due to revenue phasing with high
levels of invoicing in May and June 2021 and to the comparative
figure having benefited from strong cash receipts in December
2020.
Net current assets at 30 June 2021 totalled GBP12.2 million.
These have decreased by GBP1.2 million from 31 December 2020 due
mainly to a reduction in the cash balance partially offset by
reduced tax liabilities.
Net assets at 30 June 2021 are GBP28.4 million, a decrease of
GBP2.3 million since 31 December 2020.
Events after the reporting period
Subsequent to the period end, on 10 August 2021, confirmation
was received that the US Small Business Administration had
authorised full forgiveness of GBP0.7 million (US$1.0 million) for
the Paycheck Protection Program (PPP) Loan received in 2020.
Therefore, in accordance with IAS 20 Accounting for Government
Grants and Disclosure of Government Assistance, the PPP loan
balance included as a liability in the statement of financial
position as at 30 June 2021 will be released and credited to
operating expenses in the income statement in the second half of
2021.
Alternative Performance Measures
In these results we refer to 'underlying' and 'statutory'
results, as well as other non-GAAP Alternative Performance
Measures.
Alternative Performance Measures ('APMs') used by the Group as
defined in the Annual Report are:
-- Net revenue;
-- Like-for-like revenue growth;
-- Underlying operating profit;
-- Underlying operating margin;
-- Underlying profit before tax;
-- Underlying effective rate of tax;
-- Underlying earnings per share;
-- Underlying cash from operations; and
-- Underlying operating cash flow conversion.
Net revenue is the result when project-related costs, comprising
external production costs, are deducted from revenue.
Underlying results are not intended to replace statutory results
but remove the impact of highlighted items in order to provide a
better understanding of the underlying performance of the business.
The above APMs are consistent with how business performance is
measured internally by the Group.
Underlying profit is not recognised under IFRS and may not be
comparable with underlying profit measures used by other
companies.
Highlighted items comprise non-cash charges and non-recurring
items which are highlighted in the consolidated income statement as
their separate disclosure is considered by the Directors to be
relevant in understanding the underlying performance of the
business. The non-cash charges include share option charges and
amortisation of purchased intangibles.
The non-recurring items include the costs associated with
potential and completed acquisitions and disposals, adjustments to
the estimates of contingent consideration on acquired entities,
asset impairment charges, management restructuring and other
significant one-off items. Costs associated with acquisition
identification and early stage discussions with acquisition targets
are reported in underlying administrative expenses.
Further detail of highlighted items are set out within the
financial statements and the notes to the financial statements.
Consolidated Income Statement
for the six months ended 30 June 2021
Unaudited 6 months ended Unaudited 6 months ended
30 June 2021 30 June 2020
------------------------------------- -------------------------------------
Before Highlighted Before Highlighted
highlighted items highlighted items
items (note 3) Total items (note 3) Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ----- ------------ ------------ --------- ------------ ------------ ---------
Revenue 2 32,009 - 32,009 26,757 - 26,757
Project-related
costs (3,963) - (3,963) (3,029) - (3,029)
----------------- ----- ------------ ------------ --------- ------------ ------------ ---------
Net revenue 28,046 - 28,046 23,728 - 23,728
Cost of sales (13,047) - (13,047) (12,811) - (12,811)
----------------- ----- ------------ ------------ --------- ------------ ------------ ---------
Gross profit 14,999 - 14,999 10,917 - 10,917
Administrative
expenses 3 (12,717) (3,153) (15,870) (12,292) 181 (12,111)
----------------- ----- ------------ ------------ --------- ------------ ------------ ---------
Operating
profit/(loss) 2,282 (3,153) (871) (1,375) 181 (1,194)
Finance income 10 - 10 6 - 6
Finance expenses (448) - (448) (448) - (448)
Foreign exchange 175 - 175 (81) - (81)
----------------- ----- ------------ ------------ --------- ------------ ------------ ---------
Net finance
costs (263) - (263) (523) - (523)
Profit/(loss)
before
taxation 2,019 (3,153) (1,134) (1,898) 181 (1,717)
Taxation
(charge)/credit (761) 283 (478) (181) (52) (233)
----------------- ----- ------------ ------------ --------- ------------ ------------ ---------
Profit/(loss)
for
the period 1,258 (2,870) (1,612) (2,079) 129 (1,950)
Attributable to:
Equity holders
of
the parent 1,180 (2,868) (1,688) (2,201) 135 (2,066)
Non-controlling
interests 78 (2) 76 122 (6) 116
----------------- ----- ------------ ------------ --------- ------------ ------------ ---------
1,258 (2,870) (1,612) (2,079) 129 (1,950)
----------------- ----- ------------ ------------ --------- ------------ ------------ ---------
Earnings per
share
- continuing
operations
Basic 4 1.43p (2.04)p (2.73)p (2.57)p
Diluted 4 1.41p (2.04)p (2.73)p (2.57)p
----------------- ----- ------------ ------------ --------- ------------ ------------ ---------
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2021
Unaudited
6 months
ended 30
June 2021
GBP'000
Unaudited
6 months
ended 30
June 2020
GBP'000
-----------
(Loss) for the period (1,612) (1,950)
Other comprehensive (expense)/income:
Items that may be reclassified subsequently
to profit or loss statement:
Exchange differences on translation of overseas
subsidiaries (704) 1,159
Total other comprehensive (expense)/income
for the period (704) 1,159
------------------------------------------------- ----------- -----------
Total comprehensive expense for the period (2,316) (791)
------------------------------------------------- ----------- -----------
Attributable to:
Equity holders of the parent (2,392) (907)
Non-controlling interests 76 116
------------------------------------------------- ----------- -----------
(2,316) (791)
------------------------------------------------- ----------- -----------
Consolidated Statement of Financial Position
as at 30 June 2021
Unaudited Audited
as at as at
30 June 31 December
2021 2020
Note GBP'000s GBP'000s
Non-current assets
Goodwill 5 28,220 28,563
Other intangible assets 6 5,505 6,135
Property, plant and equipment 1,676 1,962
Right of use assets 5,197 6,237
Lease receivables 232 280
Deferred tax asset 1,129 1,145
---------- -------------
Total non-current assets 41,959 44,322
Current assets
Trade and other receivables 25,083 24,318
Lease receivables 140 171
Cash and cash equivalents 7 9,268 11,121
---------- -------------
Total current assets 34,491 35,610
Total assets 76,450 79,932
---------- -------------
Current liabilities
Trade and other payables (5,262) (6,096)
Accruals and contract liabilities (12,686) (9,890)
Financial liabilities 8 (492) (1,912)
Current tax liabilities (1,074) (1,703)
Lease liabilities (2,490) (2,338)
Deferred tax liability (250) (250)
---------- -------------
Total current liabilities (22,254) (22,189)
Non-current liabilities
Financial liabilities 8 (19,655) (19,675)
Provisions (406) (412)
Lease liabilities (4,744) (5,820)
Deferred tax liability (990) (1,090)
---------- -------------
Total non-current liabilities (25,795) (26,997)
Total liabilities (48,049) (49,186)
---------- -------------
Total net assets 28,401 30,746
========== =============
Equity
Ordinary shares 20,646 20,646
Share premium 255 255
Other reserves 4,757 5,461
Retained earnings 2,318 3,942
---------- -------------
Equity attributable to the owners
of the parent 27,976 30,304
Non-controlling interests 425 442
---------- -------------
Total equity 28,401 30,746
========== =============
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2021
Non-controlling
Ordinary Share Other Retained interests Total
shares premium reserves earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 December 2019 (as
reported) 20,029 46 4,428 12,958 37,461 1,179 38,640
Impact of restatement
at 31 December 2019
(1) - - - (748) (748) - (748)
----------- ---------- ----------- ----------- ---------- ---------------- ----------
31 December 2019 (as
restated) (1) 20,029 46 4,428 12,210 36,713 1,179 37,892
(Loss)/profit for the
period - - - (2,066) (2,066) 116 (1,950)
Other comprehensive
income - - 1,159 - 1,159 - 1,159
----------- ---------- ----------- ----------- ---------- ---------------- ----------
Total comprehensive
income/(expense) for
the period - - 1,159 (2,066) (907) 116 (791)
----------- ---------- ----------- ----------- ---------- ---------------- ----------
Shares issued for cash 3 - - (3) - - -
Share options credit - - - (1,609) (1,609) - (1,609)
Acquisition of
non-controlling
interests 609 209 - (2,739) (1,921) (348) (2,269)
Dividends paid to
shareholders - - - - - (90) (90)
30 June 2020 (as
restated)
(1) 20,641 255 5,587 5,793 32,276 857 33,133
(Loss)/profit for the
period - - - (1,637) (1,637) 70 (1,567)
Other comprehensive
expense - - (126) - (126) - (126)
----------- ---------- ----------- ----------- ---------- ---------------- ----------
Total comprehensive
(expense)/income for
the period - - (126) (1,637) (1,763) 70 (1,693)
----------- ---------- ----------- ----------- ---------- ---------------- ----------
Shares issued for cash 5 - - (5) - - -
Share options charge - - - (236) (236) - (236)
Acquisition of
non-controlling
interests - - - 27 27 (431) (404)
Dividends paid to
non-controlling
interests - - - - - (54) (54)
31 December 2020 20,646 255 5,461 3,942 30,304 442 30,746
(Loss)/profit for the
period - - - (1,688) (1,688) 76 (1,612)
Other comprehensive
expense - - (704) - (704) - (704)
----------- ---------- ----------- ----------- ---------- ---------------- ----------
Total comprehensive
(expense)/income for
the period - - (704) (1,688) (2,392) 76 (2,316)
----------- ---------- ----------- ----------- ---------- ---------------- ----------
Shares issued for cash - - - - - - -
Share options charge - - - 64 64 - 64
Acquisition of
non-controlling - - - - - - -
interests
Dividends paid to
shareholders - - - - - (93) (93)
30 June 2021 20,646 255 4,757 2,318 27,976 425 28,401
=========== ========== =========== =========== ========== ================ ==========
(1.) During 2020 a misstatement was discovered in the balance
sheet of FirmDecisions ASJP LLC as at 31 December 2019. The error
related to the misstatement of accrued income and revenue balances.
In accordance with IAS 8, the financial statements for 2019 have
been restated to reflect this adjustment. The impact was a
reduction of GBP600,000 in Group revenue, a reduction of GBP148,000
in retained earnings brought forward as at 1 January 2019, and a
reduction of GBP748,000 in accrued income as at 31 December
2019.
Consolidated Cash Flow Statement
for the six months ended 30 June 2021
Unaudited Unaudited
6 months 6 months
ended ended
30 June 30 June
2021 2020
Note GBP'000s GBP'000s
Cash flows from operating activities
Cash generated from operations 10 2,886 4,310
Finance expenses paid (295) (269)
Finance income received 3 6
Income taxes paid (1,071) (1,259)
Net cash from operating activities 1,523 2,788
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired - (597)
Disposal of division - 18
Payments to acquire non-controlling interests (1,291) (155)
Payment of contingent consideration (123) -
Purchase of property, plant and equipment (50) (76)
Purchase of intangible assets (579) (564)
Net cash flow from investing activities (2,043) (1,374)
Cash flows from financing activities
Proceeds from bank borrowings - 5,000
Bank loan fees paid (36) -
Proceeds from government borrowings - 803
Repayments of lease liabilities (897) (925)
Dilapidation payments - (300)
Dividends paid to shareholders - -
Dividends paid to non-controlling interests (92) (90)
Net cash flow from financing activities (1,025) 4,488
Net (decrease)/increase in cash, cash equivalents and bank overdrafts (1,545) 5,902
Cash, cash equivalents and bank overdrafts at beginning of period (as at 31
December 2020) 11,121 8,237
Effect of exchange rate changes on cash and cash equivalents (308) 380
---------- ----------
Cash, cash equivalents and bank
overdrafts at end of period 7 9,268 14,519
========== ==========
Notes to the interim financial statements for the six months
ended 30 June 2021
1. Accounting policies
Basis of preparation
The condensed consolidated interim financial statements for the
six months ended 30 June 2021 have been prepared in accordance with
UK adopted International Accounting Standard 34, 'Interim Financial
Reporting'. These interim financial statements should be read in
conjunction with the Group's Annual Report and Accounts for the
year ended 31 December 2020, which have been prepared in accordance
with International Accounting Standards in conformity with the
requirements of the Companies Act 2006 ('IFRS') and the applicable
legal requirements of the Companies Act 2006.
The condensed consolidated interim financial statements have
been prepared on a going concern basis. The Group meets its
day-to-day working capital requirements through its cash reserves
and borrowings, described in note 8. As at 30 June 2021, the Group
had cash balances of GBP9,268,000 and undrawn bank facilities
available of GBP5,000,000, and was cash generative and within its
banking covenants.
The lenders, Barclays and NatWest Bank, have agreed covenant
modifications where required in order to negate the risk of any
future covenant breaches.
During the year, the Group continued to trade within the limits
of its banking facilities and associated covenants. Modified
covenants were agreed with the lenders with effect from July 2020.
These require the Group to maintain minimum liquidity of at least
GBP5 million, increasing to GBP7 million from September 2021, at
the end of every month during that period. From September 2021, an
interest cover covenant will be re-introduced at > 4.0 and an
adjusted leverage covenant will also be re-introduced, initially at
< 4.0, increasing to < 4.25 in December 2021 and again to
< 4.5 in March 2022, then reducing to < 3.5 in June 2022. The
quarterly covenants previously in force (based on EBITDA multiples:
interest cover > 4.0; adjusted leverage < 2.5; and adjusted
deferred consideration leverage < 3.0) will apply again from
September 2022 onwards.
In assessing the going concern status of the Group and Company,
the Directors have considered the Group's forecasts and
projections, taking account of reasonably possible changes in
trading performance and the Group's cash flows, liquidity and bank
facilities. Specifically, the Directors have prepared a model to
forecast covenant compliance and liquidity to 31 December 2022 that
includes a base case and a severe but plausible downside case.
The base case assumes growth in revenue and EBITDA when compared
to the outturn of 2020 and assumes that trading will recover to
2019 levels by 31 December 2022. The severe but plausible case
assumes a downside adjustment to revenue of 7%, without the offset
of any mitigating factors within the control of the Directors.
Under both of these cases, there is headroom on covenant compliance
and liquidity throughout the going concern period.
The Directors have also considered a scenario that leads to a
breach in covenants; a form of reverse stress test. Actual trading
in 2021 to date and the proportion of secured revenue at this time,
is well ahead of last year and whilst there is inherent uncertainty
in trading for Q4 of 2021 and into 2022, revenue in 2022 would need
to show a slight contraction on revenue in 2021, without any cost
mitigating factors within the control of the Directors, for there
to be a breach in covenants. These scenarios are not deemed
plausible by the Directors.
New Accounting Standards issued but not yet applied
The following new standard has been published that is mandatory
to the Group's future accounting periods but has not been adopted
early in these financial statements:
-- Annual Improvements to IFRS Standards 2018-2020 Cycle effective on or after 1 January 2022.
The adoption of the standard noted above is not expected to
significantly affect future periods.
2. Segmental reporting
In accordance with IFRS 8 the Group's operating segments are
based on the reports reviewed by the Executive Directors that are
used to make strategic decisions.
The Group reports its results in two business practices (Media
and Analytics & Tech), as this most accurately reflects the way
the Group is being managed.
The Executive Directors are the Group's chief operating
decision-makers. They assess the performance of the operating
segments based on operating profit before highlighted items. This
measurement basis excludes the effects of expenditure such as
restructuring costs, purchased intangible amortisation and
equity-settled share-based payments from the operating segments.
Interest income and expenditure are not allocated to segments, as
this type of activity is driven by the central treasury function,
which manages the cash position of the Group.
The segment information provided to the Executive Directors for
the reportable segments for the period ended 30 June 2021 is as
follows:
Unaudited 6 months ended 30 June 2021
Analytics Reportable
Media & Tech Segments Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 26,810 5,199 32,009 - 32,009
Operating profit/(loss)
before highlighted
items 5,274 431 5,705 (3,423) 2,282
======== ============ ============= ============== ========
Included within operating profit before highlighted items is a
credit of GBP178,000 relating to government assistance measures
implemented as a result of the pandemic. These measures have been
in place from April 2020 and have run until June 2021. They include
job retention schemes, reduced payroll tax liabilities, waivers of
payroll tax and cash flow boosts.
Unaudited 6 month period ended 30 June 2020
Analytics Reportable
Media & Tech Segments Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 21,907 4,850 26,757 - 26,757
Operating profit/(loss)
before highlighted
items 2,354 (718) 1,636 (3,011) (1,375)
======== ============ ============= ============== ========
Included within operating profit before highlighted items is a
credit of GBP495,000 relating to government assistance measures
implemented as a result of the pandemic. These measures were in
place from April 2020 onwards. The measures include job retention
schemes, reduced payroll tax liabilities, waivers of payroll tax
and cash flow boosts.
A reconciliation of segment operating profit/(loss) before
highlighted items to total (loss) before tax is provided below:
Unaudited Unaudited
6 months 6 months
ended ended
30 June 2021 30 June 2020
GBP'000 GBP'000
Reportable segment operating profit
before highlighted items 5,705 1,636
Unallocated costs:
Staff costs (2,010) (1,752)
Property costs (292) (669)
Exchange rate movements (172) 198
Other administrative expenses (949) (788)
Operating profit/(loss) before highlighted
items 2,282 (1,375)
Highlighted items (note 3) (3,153) 181
------------------------- -------------------
Operating (loss) (871) (1,194)
Net finance costs (263) (523)
(Loss) before tax (1,134) (1,717)
========================= ===================
3. Highlighted items
Highlighted items comprise items which are highlighted in the
income statement because separate disclosure is considered relevant
in understanding the underlying performance of the business.
Unaudited Unaudited
6 months 6 months
ended ended
30 June 2021 30 June 2020
GBP'000s GBP'000s
Share option charge/(credit) 164 (1,651)
Amortisation of purchased intangibles 549 556
Post-acquisition remuneration charges
contingent on performance 2,420 146
Severance and reorganisation costs - 367
Acquisition, integration and strategic
costs 20 401
Total highlighted items before tax 3,153 (181)
Taxation (credit)/charge (283) 52
Total highlighted items after tax 2,870 (129)
Share option charges include the non-cash IFRS 2 charge of
GBP64,000 (June 2020: credit of GBP1,609,000) along with the cash
element in relation to the exercising of share options, a charge of
GBP100,000 (June 2020: credit of GBP42,000). The IFRS 2 credit
arose in the prior period predominantly due to the lapse of
4,200,000 options awarded under an Executive Incentive Plan in
2010.
Amortisation of purchased intangibles relates to acquisitions
made in prior years of GBP549,000 (June 2020: GBP545,000) and in
the current period of GBPnil (June 2020: GBP11,000).
Severance and reorganisation costs in the prior period of
GBP367,000 relate to restructuring within the UK, US and France
businesses.
Post-acquisition remuneration charges contingent on performance
of GBP2,420,000 (June 2020: GBP146,000) relates to an accrual for
post-date remuneration relating to the prior year acquisition of
Digital Decisions B.V.
The table below shows the movement in the post-date remuneration
accrual in the current period:
Total '000
--------------------------------------------------- -----------
At 1 January 2021 -
Charged to the income statement 2,567
Discounting credited to the income statement (128)
Foreign exchange released to the income statement (20)
-----------
At 30 June 2021 2,420
===========
This contingent consideration is payable based on the
performance in the two years ended 31 December 2022. This will be
calculated as 6 times the average profit generated in those two
years from digital media products developed by the Digital
Innovation Centre, less the initial consideration of GBP700,000
paid in January 2020.
Payment of the deferred contingent consideration is dependent
upon the principal vendor remaining in employment with the Group.
Therefore, as required under IFRS 3, this payment is to be
accounted for as post-date remuneration with the total amount
expected to be payable in 2023 being accrued on a straight-line
basis over the earn-out period.
The current estimate of the amount expected to be payable in
2023 is GBP10.2m of which 25% has been accrued as at 30 June 2021.
Discounting of GBP0.1m has been applied and therefore the resulting
fair value accrual is GBP2.4m.
This consideration is payable in a mixture of cash and/or
Ebiquity shares, with the mix to be determined by Ebiquity, subject
to the vendor's option to request that a certain proportion be paid
in cash.
This amount will be revised at each half year, based on the
latest projections, with any adjustments being treated as a
highlighted item.
The acquisition, integration and strategic costs of GBP20,000
(June 2020: GBP401,000) relates to financial restructuring of
GBP12,000 (June 2020: GBP50,000) and the remaining GBP8,000 (June
2020: GBP245,000) was incurred relating to the adjustment to the
fair value of contingent consideration in relation to prior year
acquisitions to the latest prevailing exchange rates.
Also included in the acquisitions, integration and strategic
costs in the prior year was GBP42,000 in relation to the subleasing
arrangement of the Chicago office which was more than offset by the
rental income from the subleasing arrangement of GBP70,000. In
addition, GBP54,000 was incurred in relation to the acquisitions of
Digital Decisions B.V. and the Italian minority buyout. The final
portion in the prior year related to the movement in the period of
the impairment to the right-of-use assets of GBP80,000 in
accordance with IFRS 16.
4. Earnings per share
The calculation of basic and diluted earnings per share is based
on the following data:
Unaudited Unaudited
6 months 6 months
ended ended
30 June 30 June
2021 2020
GBP'000s GBP'000s
Earnings for the purpose of basic earnings per
share being net profit
attributable to equity holders of the parent (1,688) (2,066)
Adjustments:
Impact of highlighted items (net of tax) (1) 2,868 135
------------------------------------------------ ---------- ----------
Earnings for the purpose of underlying earnings
per share 1,180 (2,201)
------------------------------------------------ ---------- ----------
Number of shares:
Weighted average number of shares during the
period
- basic 82,583,254 80,565,910
- dilutive effect of share options 828,817 573,149
------------------------------------------------ ---------- ----------
- diluted 83,412,071 81,139,059
------------------------------------------------ ---------- ----------
Basic (loss) per share (2) (2.04)p (2.57)p
Diluted (loss) per share (3) (2.04)p (2.57)p
Underlying basic earnings/(loss) per share (4) 1.43p (2.73)p
Underlying diluted earnings/(loss) per share
(5) 1.41p (2.73)p
------------------------------------------------ ---------- ----------
(1) Highlighted items (see note 3), stated net of their total
tax and non-controlling interest impact.
(2) Basic earnings per share is calculated by dividing profit
attributable to shareholders by the basic average number of
shares
(3) Diluted earnings per share is calculated by dividing profit
attributable to shareholders by the basic average number of shares
and also including the dilutive impact of share options
(4) Underlying basic earnings per share is calculated by
dividing underlying profit attributable to shareholders by the
basic average number of shares
(5) Underlying diluted earnings per share is calculated by
dividing underlying profit attributable to shareholders by the
basic average number of shares and also including the dilutive
impact of share options
5. Goodwill
GBP'000
Cost
At 1 January 2021 37,751
Foreign exchange differences (579)
At 30 June 2021 37,172
===================
Accumulated impairment
At 1 January 2021 (9,188)
Foreign exchange differences 236
-------------------
At 30 June 2021 (8,952)
===================
Net book value
At 30 June 2021 28,220
-------------------
At 31 December 2020 28,563
===================
6. Other intangible assets
Capitalised Computer software Purchased Total
development intangible intangible assets
costs assets (1)
GBP'000s GBP'000s GBP'000s GBP'000s
Cost
At 1 January 2021 4,891 2,542 16,581 24,014
Additions 568 12 - 580
Foreign exchange (50) (27) (336) (413)
------------- ------------------ ------------ -------------------
At 30 June 2021 5,409 2,527 16,245 24,181
============= ================== ============ ===================
Amortisation
At 1 January 2021 (1,745) (2,147) (13,987) (17,879)
Charge for the period (2) (458) (109) (549) (1,116)
Foreign exchange 32 26 261 319
------------- ------------------ ------------ -------------------
At 30 June 2021 (2,171) (2,230) (14,275) (18,676)
============= ================== ============ ===================
Net book value
At 30 June 2021 (3) 3,238 297 1,970 5,505
============= ================== ============ ===================
At 31 December 2020 3,146 395 2,593 6,064
============= ================== ============ ===================
(1) Purchased intangible assets consist principally of customer
relationships with a typical useful life of three to 10 years.
(2) Amortisation is charged within administrative expenses so as
to write off the cost of the intangible assets over their estimated
useful lives. The amortisation of purchased intangible assets is
included as a highlighted administrative expense.
(3) Of the net book value of capitalised development costs,
GBP2,267,000 remains in development at 30 June 2021.
7. Cash, cash equivalents and bank overdrafts
Cash, cash equivalents and bank overdrafts include the following
for the purposes of the cash flow statement:
30 June 31 December
2021 2020
GBP'000 GBP'000
Cash and cash equivalents 9,268 11,121
Bank overdraft (note 8) - -
Cash, cash equivalents and bank
overdrafts 9,268 11,121
======== ============
8. Financial liabilities
30 June 31 December
2021 2020
GBP'000 GBP'000
Current
Bank overdraft - -
Loan fees (1) (59) (45)
Contingent consideration 551 1,957
----------- ---------------------------
492 1,912
Non-current
Bank borrowings 19,000 19,000
Government borrowings 724 750
Loan fees (1) (69) (75)
19,655 19,675
Total financial liabilities 20,147 21,587
=========== ===========================
(1) Loan fees were payable on amending the banking facility and
are being recognised in the income statement on a straight-line
basis to the maturity date of the facility, this being September
2023.
Bank Government Contingent
borrowings borrowings consideration Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------- ------------ ----------- -------------- -----------
At 1 January 2021 18,880 750 1,960 21,590
Paid (36) - (1,414) (1,450)
Charged to the income statement 28 - 41 69
Discounting charged to the
income statement - - 45 45
Foreign exchange recognised
in the translation reserve - (26) - (26)
Foreign exchange released
to the income statement - - (81) (81)
At 30 June 2021 18,872 724 551 20,147
=============================================== =========== =========== ============== ===========
All bank borrowings are held jointly with Barclays and NatWest.
The committed facility, totalling GBP24 million, comprises a
revolving credit facility ('RCF') of GBP23 million (of which GBP19
million was drawn as at 30 June 2021 (31 December 2020: GBP19
million)) and GBP1 million available as an overdraft for working
capital purposes. The RCF has a maturity date of 20 September 2023.
The drawn RCF and any further drawings under the RCF are repayable
on maturity of the facility. The facility may be used for deferred
consideration payments on past acquisitions, to fund future
potential acquisitions, and for general working capital
requirements.
Loan arrangement fees of GBP128,000 (31 December 2020:
GBP120,000) are offset against the term loan and are being
amortised over the period of the loan. GBP59,000 of loan
arrangement fees have been included within creditors due within one
year and the balancing GBP69,000 have been included within
creditors due after more than one year.
The facility bears variable interest of LIBOR plus a margin of
2.50%. The margin rate is able to be lowered each quarter end
depending on the Group's net debt to EBITDA ratio.
The undrawn amount of the revolving credit facility is liable to
a fee of 40% of the prevailing margin. The Group may elect to
prepay all or part of the outstanding loan subject to a break fee,
by giving five business days' notice.
All amounts owing to the bank are guaranteed by way of fixed and
floating charges over the current and future assets of the Group.
As such, a composite guarantee has been given by all significant
subsidiary companies in the UK, US, Germany and Australia.
Government borrowings represent an amount received as a part of
the US Paycheck Protection Programme. Loan forgiveness was applied
for after the period end and it was subsequently confirmed that
this application was successful. Therefore, in the annual results
to December 2021 this balance will be treated as a grant rather
than a loan and will be released to the income statement.
Contingent consideration represents additional amounts that are
expected to be payable for acquisitions made by the Group and is
held at fair value at the statement of financial position date. All
amounts were fully paid by July 2021.
9. Dividends
No dividend was paid in respect of the year ending 31 December
2020. No dividend is being declared for the six months ended 30
June 2021. Dividends were paid to non-controlling interests as
shown in the consolidated statement of changes in equity.
10. Cash generated from operations
Unaudited Unaudited
6 months 6 months
ended ended
30 June 30 June
2021 2020
GBP'000 GBP'000
(Loss) before taxation (1,134) (1,717)
Adjustments for:
Depreciation 1,295 1,383
Amortisation (note 6) 1,116 994
Gain on disposal 4 (1)
Impairment of right-of-use assets - 80
Unrealised foreign exchange gain 343 (54)
Share option charge/(credit) (note 3) 64 (1,609)
Finance income (10) (6)
Finance expenses 448 448
Contingent consideration revaluations 2,429 245
---------- ----------
4,555 (237)
(Increase)/decrease in trade and other
receivables (665) 4,837
(Decrease) in trade and other payables
(including accruals and contract liabilities) (1,004) (290)
Movement in provisions - -
---------- ----------
Cash generated by operations 2,886 4,310
11. Events after the reporting period
Subsequent to the period end, on 10 August 2021, confirmation
was received that the Small Business Administration had authorised
full forgiveness of $999,707 for our Paycheck Protection Program
(PPP) Loan. As a result, the PPP Loan (plus accrued interest) has
been converted to a grant and will not be repayable.
The amount of GBP724,000 ($999,707) included in the statement of
financial position as a liability as at 30 June 2021 will therefore
be released to the income statement in H2 2021 within salary costs,
in accordance with IAS 20 Accounting for Government Grants and
Disclosure of Government Assistance.
INDEPENDENT REVIEW REPORT TO EBIQUITY PLC
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Ebiquity plc's condensed consolidated interim
financial statements (the "interim financial statements") in the
interim report of Ebiquity plc for the 6 month period ended 30 June
2021 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the AIM Rules for Companies.
What we have reviewed
The interim financial statements comprise:
-- the consolidated statement of financial position as at 30 June 2021;
-- the consolidated income statement and consolidated statement
of comprehensive income for the period then ended;
-- the consolidated cash flow statement for the period then ended;
-- the consolidated statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the interim report
have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the AIM
Rules for Companies.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The interim report, including the interim financial statements,
is the responsibility of, and has been approved by the directors.
The directors are responsible for preparing the interim report in
accordance with the AIM Rules for Companies which require that the
financial information must be presented and prepared in a form
consistent with that which will be adopted in the company's annual
financial statements.
Our responsibility is to express a conclusion on the interim
financial statements in the interim report based on our review.
This report, including the conclusion, has been prepared for and
only for the company for the purpose of complying with the AIM
Rules for Companies and for no other purpose. We do not, in giving
this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior
consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
23 September 2021
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