TIDMMRIT
RNS Number : 6917S
Merit Group PLC
08 November 2023
8 November 2023
Merit Group plc
("Merit", the "Company" or "the Group")
UNAUDITED INTERIM RESULTS TO 30 SEPTEMBER 2023
Merit Group plc (AIM: MRIT), the data and intelligence business,
announces its unaudited interim results for the half year ended 30
September 2023.
Financial Highlights
-- Accelerating revenue growth; Revenue from Continuing
Operations of GBP9.9m up 9.3% (H1 FY23: GBP9.1m) (1)
-- Adjusted EBITDA increased by 67% to GBP1.8m (H1 FY23: Adj
EBITDA GBP1.1m)
-- Adjusted EBITDA margin increased by six percentage points
from 12.1% to 18.5%
-- Net cash generated from continuing operating activities of
GBP0.7m (H1 FY23: GBP0.4m)
-- Return to profit before tax of GBP0.5m (H1 FY23: loss of
GBP0.3m) , representing 1.47 pence per share.
-- Net Debt (2) of GBP2.5m as at 30 September 2023, (31 March
2023: GBP2.6m) with total available debt facilities of GBP4.0m.
Continuing Operations (1)
H1 FY24 H1 FY23
30 Sep 23 30 Sep Change (6)
22 (1)
Revenue GBP9.9m GBP9.1m 9.3%
Gross profit GBP4.7m GBP4.3m 10.7%
Gross margin (3) 47.9% 47.4%
Adjusted EBITDA (4) GBP1.8m GBP1.1m 66.6%
Net margin (5) 18.5% 12.1%
Profit/(loss) before tax GBP0.5m (GBP0.3m)
Basic Earnings per share 1.47p (1.82p)
1. Comparative figures for the six-month period to 30 September
2022 have been restated to remove Discontinued Operations as
outlined in Note 5.
2. Net debt comprises the aggregate of gross debt, excluding
IFRS16 lease liabilities, and cash and cash equivalents as outlined
in Note 11.
3. Gross margin is Gross profit as a percentage of Revenue.
4. Adjusted EBITDA is calculated as earnings before interest,
tax, depreciation, amortisation of intangible assets, share-based
payments and non-recurring items.
5. Net margin is Adjusted EBITDA as a percentage of Revenue.
6. Year-on-year percentage change figures are calculated on
unrounded numbers.
Operational Highlights
-- Expanded sales team in Merit Data & Technology now
delivering new customers underpinning accelerating growth; 13.3%
revenue growth in H1 FY24 compared to 7.8% in the preceding half
year.
-- Margin improvement program within Merit Data & Technology
has already delivered a six percentage point improvement in EBITDA
margins to 19.5%.
-- Ongoing investment in AI initiatives, in which the business
has a five-year track record, is delivering both cost
competitiveness and further margin improvement opportunities.
-- Dods Political Intelligence has begun the acceleration of its
revenue growth, achieving 2.7%, up from 0.4% in the first half of
last year.
-- With GBP3.5m of revenue Dods PI delivered an Adjusted EBITDA
of GBP1.1m, up 20%, and an operating profit of GBP0.7m, up 175%,
demonstrating its strong operational gearing.
-- Group Adjusted EBIT was GBP0.9m in H1 FY24, up from a loss of
GBP0.3m in H1 FY23.
David Beck, CEO of Merit Group plc, said;
"We are pleased to able to announce further progress and a very
good set of first half numbers, including a return to profit before
tax. Despite challenging economic conditions, the Group is
accelerating its revenue growth whilst also increasing its margins.
Both operating businesses are working to detailed growth plans
which, when combined with their high levels of subscription or
recurring revenue and operational gearing, is helping to drive
profitability faster than revenue growth.
"The Group's deep technology skills and increasing use of AI to
drive both new revenue opportunities and operational efficiencies
gives the Board further confidence in the business' ability to
build on the progress already achieved."
Mark Smith, Chairman, commented;
"With the Group's restructuring complete the focus is now on
growth and driving shareholder value. Small listed companies do not
always see their value fully reflected in their share prices, the
Board of Merit recognises that it has a duty to all shareholders to
maximise value."
For further information, please contact:
Merit Group plc
David Beck - CEO 020 7593 5500
Philip Machray - CFO
www.meritgroupplc.com
Canaccord Genuity Limited (Nomad and Broker)
Bobbie Hilliam 020 7523 8150
Harry Pardoe
This announcement is released by Merit Group plc and contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) 596/2014 ("MAR"), and is disclosed in
accordance with the Group's obligations under Article 17 of MAR.
With the publication of this announcement, this information is now
considered to be in the public domain.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Group by David Beck, Chief Executive Officer.
BUSINESS AND OPERATIONAL REVIEW
The Group had a very good first half and is benefitting from the
restructuring of both its operations and cost base achieved in the
prior year. Despite challenging economic conditions, in the first
half year the Group has delivered revenue growth and an increase in
Adjusted EBITDA from Continuing Operations to GBP1.8m, compared to
GBP1.1m in the prior year. Both operating divisions, Merit Data
& Technology (Merit D&T) and Dods Political Intelligence
(Dods) performed strongly.
The revenue growth in both operating businesses combined with
cost efficiencies has helped drive an Adjusted EBITDA margin
improvement of six percentage points in Merit D&T and four
percentage points in Dods.
The Group has returned to a Profit before tax of GBP0.5m in the
half year (H1 FY23: loss before tax of GBP0.3m), a significant
improvement driven in part by the reduction in depreciation of
right-of-use assets following the successful disposal of the
Group's excess London office space at the end of the previous
financial year.
Merit Data & Technology
The Merit Data & Technology (Merit D&T) business has
long-standing customers that provide the business with high levels
of recurring revenue. We provide a range of data and intelligence
products and services, as well as data solutions to a loyal
customer base. The business uses its proprietary technology and AI
skills to gather and enhance industry intelligence and marketing
data.
Merit D&T saw strong and accelerating revenue growth in the
first half, up 13.3% to GBP6.4m from GBP5.6m in H1 FY23. Adjusted
EBITDA of GBP1.2m in the first half benefitted from t he recovery
in the Sterling/INR exchange rate and compares to the GBP0.7m in
the same period in the previous year .
The upgraded sales and marketing function within Merit D&T
that was recruited and expanded in FY23 is helping to generate new
customers and new revenue from existing customers across all areas
of the business. The business secured new clients in Pythian, Media
42, Hyve and ION, and has also secured additional work from
existing clients Jato, Lloyds List Intelligence and Wilmington
amongst others.
With the increasing acceptance of AI tools as a driver of
business efficiency Merit D&T is able to actively pursue new
revenue opportunities from customers seeking to implement AI
solutions. The business is also using increasing amounts of AI
within its own operations; reducing costs to make it even more
price competitive and to continue to deliver margin
improvements.
Dods Political Intelligence
Dods is a provider of mission critical UK and European policy
and political data and intelligence to approximately 800
subscribers. Dods is the UK's industry leader with an enviable
reputation for the comprehensiveness of its service and the quality
of its analysis and consultancy. The business benefits from
subscription revenues from a large, diverse and loyal subscriber
base of blue-chip customers.
In the first half the Continuing Operations of Dods grew revenue
by 2.7% to GBP3.5m and made Adjusted EBITDA of GBP1.1m against
GBP0.9m in the same period last year. An adjusted EBITDA margin of
30.9% was flattered by the inclusion of Other Operating Income (not
included in revenue) from the provision of transitional services to
the businesses that were disposed of in November 2022. Those
transitional services arrangements have largely come to an end and
will therefore not recur in the second half, a normalised first
half margin taking out the other operating income and associated
costs would be circa 25%.
The increased focus on, and investment in, the Dods business to
focus on growth commenced with the recruitment of a new Director of
Sales and Marketing at the end of the first half. The newly
restructured business now benefits from a three year growth plan
underpinned by new customer research and investment in further
product and service improvements. New customers in the period
include Drax, Thakeham Homes, The Royal College of Surgeons and the
German Animal Welfare Association.
Central
Central costs continue to be closely managed; despite some
inflationary pressures in the costs of professional fees and
insurance, central costs reduced by 8% year-on-year to GBP0.5m in
the first half.
In contrast to prior years, the Group reports no non-recurring
items in the period, reflecting the substantial completion of the
Group's restructuring.
Outlook
Despite challenging economic conditions, the Group is
accelerating its revenue growth whilst also increasing its margins.
Both operating businesses are delivering improved results by
working to detailed growth plans which, when combined with their
high levels of subscription or recurring revenue, maximises their
natural operational gearing.
The Group's deep technology skills and increasing use of AI to
drive both new revenue opportunities and operational efficiencies
gives the Board further confidence in the business' ability to
build on the progress already achieved.
David Beck
CEO
Merit Group plc
FINANCIAL REVIEW
On 30 November 2022, the Group completed the disposal of the
Media, Events and Training operations of its Dods segment
(together, the "MET Operations") for a cash consideration of GBP4.5
million to Political Holdings Limited.
On 12 January 2023, the Group completed the disposal of the
trade and assets of Le Trombinoscope SAS, the Paris-based
activities of the Dods segment ("Le Trombinoscope") to Trombimedia
Limited for GBP0.1 million cash consideration.
As a consequence of the disposals, the activities of the MET
Operations and Le Trombinoscope have been classified as
Discontinued Operations within the Consolidated Income Statement
and therefore excluded from the presentation of items on a
Continuing Operations basis in prior periods to provide a
like-for-like comparator.
Income Statement - Continuing Operations
The Group's revenue from Continuing Operations increased by 9.3%
to GBP9.9m (H1 FY23: GBP9.1m).
Revenues from Merit Data and Technology (MD&T) were GBP0.8m
higher than the equivalent prior half year (H1 FY24: GBP6.4m
compared to H1 FY23: GBP5.6m), representing an increase of 13%.
Dods revenues for the period increased by 3% to GBP3.5m (H1 FY23:
GBP3.4m).
Gross profit for the period increased to GBP4.7m compared to the
prior period (H1 FY23: GBP4.3m). Gross margin increased from 47% to
48%, driven by the Group's improving revenue growth and operational
gearing.
Adjusted EBITDA increased by GBP0.7m to GBP1.8m (H1 FY23:
GBP1.1m) due to strong revenue growth, operational gearing, and the
net GBP0.2m benefit of transitional services provided to the
disposed MET business during the period.
The return to operating profit, from a loss of GBP0.6m in H1
FY23 to a profit of GBP0.9m, reflects the increase in Adjusted
EBITDA, a reduction in depreciation following the disposal of the
Shard lease in the prior year and the lack of non-recurring
charges. The Group's operating profit is stated after a
right-of-use assets charge of GBP0.4m (H1 FY23: GBP0.7m), an
amortisation on acquired intangibles under business combinations of
GBP0.3m (H1 FY23: GBP0.3m), a charge for intangible assets
amortisation of GBP0.1m (H1 FY23: GBP0.2m) and a charge for
depreciation of tangible assets of GBP0.1m (H1 FY23: GBP0.3m).
The net finance expense for the year of GBP0.3m compares to a
net finance credit of GBP0.1m in H1 FY23, reflecting the increase
in interest rates and the impact of foreign exchange hedging.
The profit for the year from Continuing Operations, after a tax
charge of GBP0.2m (H1 FY23: GBP0.2m), amounted to GBP0.4m (H1 FY23:
GBP0.4m loss).
Earnings and Dividends
Earnings per share (basic and diluted) from Continuing
Operations in the period were 1.47 pence (H1 FY23: loss of 1.82
pence, basic and diluted) and were based on the profit for the
period of GBP0.4m (H1 FY23: GBP0.4m loss) with a weighted average
number of shares in issue during the period of 23,956,124.
Adjusted earnings per share, both basic and diluted, from
Continuing Operations in the period were 3.16 pence (H1 FY23: loss
of 0.49 pence) and were based on the adjusted profit after tax for
the period of GBP0.8m (H1 FY23: loss of GBP0.1m).
Total Earnings per share, both basic and diluted, in the period
were 1.47 pence (H1 FY23: loss of 4.17 pence) and were based on the
profit after tax for the period of GBP0.4m (H1 FY23: loss of
GBP1.0m).
Whilst the Company's focus remains on maintaining financial
flexibility and repositioning the business for future growth, the
Board is not proposing a dividend (H1 FY23: GBPnil).
Going Concern
The Directors have considered the position and projections of
the Group for the purpose of assessing Going Concern and remain
satisfied with the Group's funding and liquidity position.
Statement of Financial Position
Assets
Non-current assets of GBP37.7m (31 March 2023: GBP37.7m)
comprise goodwill of GBP26.9m (31 March 2023: GBP26.9m), intangible
assets of GBP7.6m (31 March 2023: GBP7.9m), property, plant and
equipment of GBP0.4m (31 March 2023: GBP0.3m), IFRS 16
rights-of-use assets of GBP2.2m (31 March 2023: GBP1.9m),
investments of GBP0.5m (31 March 2023: GBP0.4m) and deferred tax
assets amounting to GBP0.5m (31 March 2023: GBP0.5m). Movements in
the year reflect amortisation and depreciation charges in the
period offset by the addition of a new London premises lease
(GBP0.7m).
Current assets comprise Trade and other receivables of GBP5.5m
(31 March 2023: GBP5.5m) and cash balances.
The Group had a cash balance of GBP1.1m at the period end (31
March 2023: GBP2.1m), reduced as the group actively manages the
level of RCF drawing to minimise interest costs. Net debt amounted
to GBP2.5m at the period end (31 March 2023: GBP2.6m).
Total assets of the Group were GBP44.3m (31 March 2023:
GBP45.3m).
Liabilities
Current liabilities of GBP9.7m (31 March 2023 GBP10.8m) comprise
Trade and other payables of GBP6.1m (31 March 2023: GBP6.6m), bank
loans and borrowings of GBP2.9m (31 March 2023: GBP3.4m), IFRS16
lease liabilities of GBP0.6m (31 March 2023: GBP0.7m) and defined
benefit pension liabilities of GBP0.1m (31 March 2023:
GBP0.1m).
Non-current liabilities of GBP2.5m (31 March 2023 GBP2.8m)
comprise bank loans and borrowings of GBP0.6m (31 March 2023:
GBP1.3m), IFRS16 lease liabilities of GBP1.6m (31 March 2023:
GBP1.2m) and defined benefit pension liabilities of GBP0.3m (31
March 2023: GBP0.2m).
Movement in the year primarily reflect the repayment of GBP1.2m
of bank loans and borrowings, the repayment of GBP0.5m of IFRS16
lease liabilities and the addition of GBP0.7m of IFRS16 lease
liabilities in respect of the new London premises lease.
Capital and reserves
Total equity increased by GBP0.3m to GBP32.1m (31 March 2023:
GBP31.8m), reflecting the retained profit for the period.
Cash flows, liquidity and capital resources
Net cash generated by operations was an GBP0.8m inflow in the
period by comparison to an GBP0.0m in H1 FY23 (GBP0.6m from
Continuing operations). After tax, net cash used in operating
activities amounted to GBP0.7m (H1 FY23: outflow of GBP0.2m in
total of which Continuing Operations generated GBP0.4m and
Discontinued Operations used GBP0.6m).
Investing activities, primarily related to the addition of IT
equipment, leasehold improvements within the new London premises
and the internal development of software amounted to GBP0.2m in the
period, compared to GBP0.2m in the prior period which was offset by
GBP0.5m of proceeds from the disposal of Associates.
Total financing outflows were GBP1.4m in the period (H1 FY23;
GBP0.5m) as the group significantly reduced gross bank debt. This
comprised GBP1.9m used in the servicing of bank debt and interest
and capital repayments on leases, offset by the receipt of GBP0.5m
in the period in respect of recoverable VAT paid on the disposal of
the Shard lease in the prior period.
Net debt amounted to GBP2.5m at the period end (31 March 2023:
GBP2.6m).
At 30 September 2023, the Group had bank debt of GBP3.5m (31
March 2023: GBP4.7m) comprising amounts owed on term loans and
amounts drawn on a revolving credit facility (RCF).
The Group had a term loan with GBP0.8m outstanding (31 March
2023: GBP0.9m) taken out in July 2022 over a five-year period, with
interest at 4.75% over Bank of England interest rate. A further
GBP1.2m (31 March 2023: GBP1.8m) was outstanding on a GBP1.8m term
loan taken out in March 2023 over an 18-month period, to part-fund
disposal of the Shard lease. This loan has the same interest rates
and covenants as the Group's existing term loan.
In addition, the Group had a GBP2.0m RCF facility available
through to September 2027, of which GBP1.5m was drawn at the period
end (31 March; GBP2.0m). Due to its revolving nature, this loan is
all shown as due within one year.
Phil Machray
Chief Financial Officer
Condensed consolidated income statement
For the half year ended 30 September 2023
Unaudited
Unaudited Half year Audited
Half year ended Year ended
Continuing Operations (1) Note ended 30 Sept 31 Mar 2023
30 Sept 2022 GBP'000
2023 (restated
GBP'000 (1) )
GBP'000
----------------------------------------- -------- ------------ ----------- --------------
Revenue 3 9,899 9,055 18,585
Cost of sales (5,154) (4,767) (10,033)
------------------------------------------ ------- ------------ ----------- --------------
Gross profit 4,745 4,288 8,552
Administrative expenses (4,170) (4,861) (12,628)
Other operating income 293 - 416
Operating profit/(loss) from
Continuing Operations 868 (573) (3,660)
Memorandum:
Adjusted EBITDA(2) 3 1,829 1,098 2,652
Depreciation of property, plant
and equipment (88) (301) (620)
Depreciation of right-of-use
assets (406) (661) (1,313)
Amortisation of intangible assets
acquired through business combinations (294) (294) (587)
Amortisation of software intangible
assets (142) (161) (314)
------------ ----------- --------------
Adjusted EBIT(3) 899 (319) (182)
Share-based payments (31) (31) (63)
Non-recurring items 4
Loss on disposal of investments
in Associates - - (303)
Losses on disposal of Shard
lease - - (2,927)
People-related costs - (150) (123)
Other non-recurring items - (73) (62)
Operating profit/(loss) from
Continuing Operations 868 (573) (3,660)
Net finance credit/(expense) (339) 68 (249)
Share of profit of Associate - 252 252
------------------------------------------ ------- ------------ ----------- --------------
Profit/(loss) before tax from
Continuing Operations 529 (253) (3,657)
Income tax (charge)/credit (176) (182) 88
------------------------------------------ ------- ------------ ----------- --------------
Profit/(loss) for the period
from Continuing Operations 353 (435) (3,569)
Loss/(profit) from Discontinued
Operations - (564) 884
Profit/(loss) for the period 353 (999) (2,685)
------------------------------------------ ------- ------------ ----------- --------------
(1) Comparative figures for the half year ended 30 September
2022 have been restated to reflect Continuing Operations only as
outlined in Note 5.
(2) Adjusted EBITDA is defined as the operating profit/(loss)
after adding back depreciation, amortisation, share-based payments,
and non-recurring items.
(3) Adjusted EBIT is defined as the operating profit/(loss0
after adding back share-based payments and non-recurring items.
Earnings per share (pence)
Basic and Diluted p per share p per share p per share
Continuing Operations 6 1.47p (1.82p) (14.90p)
Discontinued Operations 6 - (2.35p) 3.69p
------------------------- ------------ ------------ ------------
Basic total 6 1.47p (4.17p) (11.21p)
------------------------- ------------ ------------ ------------
The notes on pages 13 to 27 form part of these unaudited interim
results.
Condensed consolidated statement of comprehensive income
For the half year ended 30 September 2023
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2023
30 Sept 30 Sept GBP'000
2023 2022
GBP'000 GBP'000
------------------------------------------- ----------- ----------- -------------
Profit/(loss) for the period 353 (999) (2,685)
Items that may be subsequently
reclassified
to Profit and loss:
Foreign currency translation:
Exchange differences on translation
of foreign operations 2 21 (27)
Loss reclassified to profit and
loss on disposal of foreign operations - - (48)
------------------------------------------- ----------- ----------- -------------
2 21 (75)
Remeasurement of defined benefits
obligation (31) 36 45
------------------------------------------- ----------- ----------- -------------
Other comprehensive income for
the period (29) 57 (30)
------------------------------------------- ----------- ----------- -------------
Total comprehensive profit/(loss)
for the period 324 (942) (2,715)
------------------------------------------- ----------- ----------- -------------
The notes on pages 13 to 27 form part of these unaudited interim
results.
Condensed consolidated statement of financial position
As at 30 September 2023
Unaudited
Unaudited 30 Sept 2022 Audited
Note 30 Sept 2023 (restated*) 31 Mar 2023
GBP'000 GBP'000 GBP'000
--------------------------------- ------- ---------------- -------------- --------------
Non-current assets
Goodwill 8 26,919 27,642 26,919
Intangible assets 9 7,566 8,679 7,908
Property, plant and equipment 10 381 1,673 341
Right-of-use assets 2,198 4,869 1,874
Investments 474 997 450
Deferred tax assets 184 346 184
Total non-current assets 37,722 44,206 37,676
Current assets
Trade and other receivables 5,503 4,102 5,502
Loan receivable - 140 -
Cash and cash equivalents 1,069 1,834 2,144
6,572 6,076 7,646
Assets held for resale - 3,591 -
--------------------------------- ------- ---------------- -------------- --------------
Total current assets 6,572 9,667 7,646
--------------------------------- ------- ---------------- -------------- --------------
Total assets 44,294 53,873 45,322
--------------------------------- ------- ---------------- -------------- --------------
Current liabilities
Trade and other payables 6,085 6,168 6,648
Defined benefit pension
obligation 77 84 76
Bank loan/RCF 11 2,910 2,200 3,373
Lease liability 11 597 1,640 678
Liabilities directly associated - 3,101 -
with assets classified as
held for resale
Total current liabilities 9,669 13,193 10,775
Non-current liabilities
Deferred tax liability - - -
Pension obligation 312 232 249
Bank loan/RCF 11 621 2,800 1,342
Lease liability 11 1,583 4,153 1,202
Total non-current liabilities 2,516 7,185 2,793
--------------------------------- ------- ---------------- -------------- --------------
Capital and reserves
Issued capital 12 6,708 6,708 6,708
Share premium 1,067 1,067 1,067
Retained profit/(loss) 10,700 12,033 10,347
Redemption reserve 13,680 13,680 13,680
Translation reserve (122) (28) (124)
Other reserves (28) (6) 3
Share option reserve 104 41 73
Total equity 32,109 33,495 31,754
Total equity and liabilities 44,294 53,873 45,322
--------------------------------- ------- ---------------- -------------- --------------
* Comparative figures for the financial position as at 30
September 2022 have been restated to present deferred tax assets
within Non-current assets as outlined in Note 16.
The notes on pages 13 to 27 form part of these unaudited interim
results.
Condensed consolidated statement of changes in equity
For the half year ended 30 September 2023
Share Capital Share Total
Share premium Retained redemption Translation Other option shareholders'
capital reserve(1) earnings reserve(2) reserve(3) reserves reserve(4) funds
Unaudited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------- ------------ ---------- ------------ ------------- ---------- ------------ ---------------
At 1 April 2022 6,708 1,067 13,032 13,680 (49) (42) 10 34,406
Total
comprehensive
income:
Loss for the
six-month
period
to 30
September
2022 - - (999) - - - (999)
Currency
translation
differences - - - - 21 - - 21
Remeasurement
of defined
benefits
obligations - - - - - 36 - 36
Share-based
payments - - - - - - 31 31
At 30 September
2022 6,708 1,067 12,033 13,680 (28) (6) 41 33,495
----------------- --------- ------------ ---------- ------------ ------------- ---------- ------------ ---------------
Total
comprehensive
income:
Loss for the
six-month
period
to 31 March
2023 - - (1,686) - - - (1,686)
Currency
translation
differences - - - - (96) - - (96)
Remeasurement
of defined
benefits
obligations - - - - - 9 - 9
Share-based
payments - - - - - - 32 32
At 31 March 2023 6,708 1,067 10,347 13,680 (124) 3 73 31,754
----------------- --------- ------------ ---------- ------------ ------------- ---------- ------------ ---------------
Total
comprehensive
income:
Profit for the
six-month
period
to 30
September
2023 - - 353 - - - 353
Currency
translation
differences - - - - 2 - - 2
Remeasurement
of defined
benefits
obligations - - - - - (31) - (31)
Share-based
payments - - - - - - 31 31
----------------- --------- ------------ ---------- ------------ ------------- ---------- ------------ ---------------
At 30 September
2023 6,708 1,067 10,700 13,680 (122) (28) 104 32,109
----------------- --------- ------------ ---------- ------------ ------------- ---------- ------------ ---------------
1 The share premium reserve represents the amount paid to the
Company by shareholders above the nominal value of shares
issued.
2 The capital redemption reserve is a non-distributable reserve
created on cancellation of deferred shares.
3 The translation reserve comprises foreign currency translation
differences arising from the translation of financial statements of
the Group's foreign entities into Sterling.
4 The share option reserve represents the cumulative expense
recognised in relation to equity-settled share-based payments.
The notes on pages 13 to 27 form part of these unaudited interim
results.
Condensed consolidated statement of cash flows
For the half year ended 30 September 2023
Unaudited Unaudited Audited
Half year Half year Year ended
Note ended ended 31 Mar 2023
30 Sept 30 Sept GBP'000
2023 2022
GBP'000 GBP'000
Cash generated by operations 7 836 6 1,325
Taxation paid (181) (163) (429)
-------------------------------------- ------- ----------- ----------- -------------
Net cash (used in)/generated
from operating activities 655 (157) 896
-------------------------------------- ------- ----------- ----------- -------------
Cash flows from investing
activities
Interest and similar income
received 18 40 77
Additions to intangible assets (94) (108) (175)
Additions to property, plant
and equipment (128) (132) (69)
Acquisition of investments (24) - -
Proceeds from disposal of Associates - 410 654
Proceeds on disposal of operations - - 3,846
Repayment of long-term loan
by Associate - 70 210
-------------------------------------- ------- ----------- ----------- -------------
Net cash raised/(used) in
investing activities (228) 280 4,543
-------------------------------------- ------- ----------- ----------- -------------
Cash flows from financing
activities
Interest and similar expenses
paid (215) (153) (378)
Payment of lease liabilities (494) (967) (1,901)
Payment on disposal of lease
liabilities 462 - (3,683)
Net drawdowns/(repayments)
of bank facility (1,184) 622 337
Net cash raised/(used) in
financing activities (1,431) (498) (5,625)
-------------------------------------- ------- ----------- ----------- -------------
Net decrease in cash and cash
equivalents (1,004) (375) (186)
Opening cash and cash equivalents 2,144 2,321 2,321
Effect of exchange rate fluctuations
on cash held (71) (112) 9
-------------------------------------- ------- ----------- ----------- -------------
Closing cash at bank 1,069 1,834 2,144
-------------------------------------- ------- ----------- ----------- -------------
Comprised of:
Cash and cash equivalents 1,069 1,834 2,144
Closing cash at bank 1,069 1,834 2,144
-------------------------------------- ------- ----------- ----------- -------------
The notes on pages 13 to 27 form part of these unaudited interim
results.
1. General information
Nature of operations
The principal activities of Merit Group plc and its subsidiaries
(the "Group") is the creation and aggregation of high-quality data
and intelligence information and the provision of data technology
services.
The Group operates primarily in the UK, Europe and India.
Merit Group plc is a Company incorporated in England and Wales
and listed on the Alternative Investment Market (AIM) in London.
The registered office of the Company and head office of the Group
is 9(th) Floor, The Shard, 32 London Bridge Street, London SE1
9SG.
Basis of preparation
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the UK. The annual financial statements of the Group are prepared
in accordance with International Financial Reporting Standards
(IFRSs) in conformity with the requirements of the Companies Act
2006. As required by AIM Rules, the condensed set of financial
statements has been prepared applying accounting policies and
presentation that were applied in the preparation of the Group's
published consolidated financial statements for the year ended 31
March 2023.
The condensed consolidated financial statements are neither
audited in accordance with International Standards on Auditing (UK)
nor subject to review as per International Standard on Review
Engagements (ISRE) 2410. The comparative figures for the year ended
31 March 2023 have been extracted from the Group's statutory
accounts for that financial period. Those accounts have been
reported on by the Company's auditor and delivered to the registrar
of companies. The report of the auditor was (i) unqualified, (ii)
did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying their report,
and (iii) did not contain a statement under section 498(2) or (3)
of the Companies Act 2006.
Going concern
The Directors have considered the financial projections of the
Group, including cash flow forecasts and the availability of
committed bank facilities for the coming 12 months. They are
satisfied that the Group has adequate resources for the foreseeable
future and that it is appropriate to continue to adopt the going
concern basis in preparing these interim financial statements.
Approval date
The condensed set of interim financial statements have been
prepared on a going concern basis and were approved by the Board on
7 November 2023.
2. Critical accounting estimates and judgements
When preparing financial statements, the Group makes estimates
and judgements concerning the future. These estimates and
judgements are typically based on historical experience and
expectations of future events that are believed to be reasonable at
the time. In the future, by definition, actual events and
experience may deviate from these estimates and judgements.
The Directors considered the critical accounting judgements and
estimates applied in the condensed consolidated financial
statements were the same as those applied in the Group's last
statutory accounts for the year ended 31 March 2023.
3. Segmental information
Business segments
The Group considers that it has two operating business segments,
Merit Data & Technology (MD&T) and Dods, plus a
(non-revenue generating) central corporate segment.
The Merit Data & Technology business segment focuses on the
provision of data and intelligence, including marketing data, and
the provision of data-related technology, including data
engineering, machine learning, software development, and technology
resourcing.
The Dods business segment concentrates on the provision of key
information and insights into the political and public policy
environments around the UK and the European Union.
The central corporate segment contains the activities and costs
associated with the Group's head office and PLC listing.
The following table provides an analysis of the Group's segment
revenue by business segment.
Unaudited
Unaudited Half year Audited
Half year ended Year ended
Continuing Operations(1) ended 30 Sept 31 Mar 2023
30 Sept 2022 GBP'000
2023 (restated(1)
GBP'000 )
GBP'000
---------------------------- ------------ -------------- --------------
Merit Data & Technology 6,376 5,626 11,644
Dods 3,523 3,429 6,941
9,899 9,055 18,585
---------------------------- ------------ -------------- --------------
No client accounted for more than 10 percent of total
revenue.
Unaudited
Group Revenue by stream Unaudited Half year Audited
Half year ended Year ended
Continuing Operations(1) ended 30 Sep 2022 31 Mar 2023
30 Sep 2023 (restated(1) GBP'000
GBP'000 )
GBP'000
---------------------------- -------------- -------------- --------------
Data and Intelligence 3,414 2,981 6,743
Data Technology 2,962 2,645 4,901
Political Intelligence 3,523 3,429 6,941
9,899 9,055 18,585
---------------------------- -------------- -------------- --------------
(1) Prior periods have been restated to present Continuing
Operations only as outlined in Note 5.
Unaudited half year ended MD&T Dods Central Total
30 Sep 2023 30 Sep 30 Sep 30 Sep 30 Sep
Business segment profit before 2023 2023 2023 2023
tax GBP'000 GBP'000 GBP'000 GBP'000
Continuing Operations
------------------------------------- ---------- ---------- ---------- ----------
Adjusted EBITDA 1,241 1,087 (499) 1,829
Depreciation of property,
plant and equipment (55) (33) - (88)
Depreciation of right-of-use
assets (260) (146) - (406)
Amortisation of intangible
assets acquired through business
combinations (255) (39) - (294)
Amortisation of software intangible
assets - (142) - (142)
Share based payments - - (31) (31)
Operating profit/(loss) 671 727 (530) 868
Net finance income/(expense) (80) (45) (214) (339)
------------------------------------- ---------- ---------- ---------- ----------
Profit/(loss) before tax
from Continuing Operations 591 682 (744) 529
------------------------------------- ---------- ---------- ---------- ----------
Unaudited half year ended Dods Total
30 Sep 2022
Business segment profit before MD&T 30 Sep Central 30 Sep
tax
30 Sep 2022 30 Sep 2022
Continuing Operations(1) 2022 (restated(1) 2022 (restated(1)
) )
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- ---------- --------------- ---------- ----------------
Adjusted EBITDA 733 907 (542) 1,098
Depreciation of property,
plant and equipment (140) (161) - (301)
Depreciation of right-of-use
assets (281) (211) (169) (661)
Amortisation of intangible
assets acquired through business
combinations (255) (39) - (294)
Amortisation of software intangible
assets - (161) - (161)
Share based payments - - (31) (31)
Non-recurring items
People-related costs (34) (23) (93) (150)
Other non-recurring items - (48) (25) (73)
------------------------------------- ---------- --------------- ---------- ----------------
Operating profit/(loss) 23 264 ( 860) (573)
Net finance income/(expense) 45 11 12 68
Share of profit of Associate - - 252 252
------------------------------------- ---------- --------------- ---------- ----------------
Profit/(loss) before tax
from Continuing Operations 68 275 ( 596) (253)
------------------------------------- ---------- --------------- ---------- ----------------
(1) Prior periods have been restated to present Continuing
Operations only as outlined in Note 5.
Audited year ended 31 Mar MD&T Dods Central Total
2023 31 Mar 31 Mar 31 Mar 31 Mar
Business segment profit before 2023 2023 2023 2023
tax GBP'000 GBP'000 GBP'000 GBP'000
Continuing Operations
------------------------------------- ---------- ---------- ---------- ----------
Adjusted EBITDA 1,809 1,838 (995) 2,652
Depreciation of property,
plant and equipment (252) (368) - (620)
Depreciation of right-of-use
assets (552) (517) (244) (1,313)
Amortisation of intangible
assets acquired through business
combinations (510) (77) - (587)
Amortisation of software intangible
assets - (314) - (314)
Share based payments - - (63) (63)
Non-recurring items
Profits and losses on disposals - - (3.230) (3,230)
People-related costs (35) 10 (98) (123)
Other non-recurring items - - (62) (62)
------------------------------------- ---------- ---------- ---------- ----------
Operating profit/(loss) 460 572 (4,692) (3,660)
Net finance income/(expense) 83 (226) (106) (249)
Share of profit of Associate - - 252 252
------------------------------------- ---------- ---------- ---------- ----------
Profit/(loss) before tax
from Continuing Operations 543 346 (4,546) (3,657)
------------------------------------- ---------- ---------- ---------- ----------
4. Non-recurring items
Unaudited
Unaudited Half year Audited
Half year ended Year ended
ended 30 Sep 2022 31 Mar 2023
Continuing Operations(1) 30 Sep 2023 (restated(1) GBP'000
GBP'000 )
GBP'000
------------------------------------------- --------------- -------------- --------------
Transaction-related non-recurring
items:
Loss on disposal of investments
in Associates - - (303)
Loss on disposal of Shard lease - - (2,927)
--------------- -------------- --------------
Profits and losses on disposals - - (3,230)
People-related costs - (150) (123)
Other:
- Professional services and consultancy - (73) (62)
- (223) (3,415)
----------------------------------------------------------- -------------- --------------
(1) Prior periods have been restated to present Continuing
Operations only as outlined in Note 5.
People-related costs incurred in prior periods include deferred
cash consideration on the acquisition of Meritgroup Limited. Also
included are redundancy costs reflecting the effect of Group
initiatives to appropriately restructure the business.
Other non-recurring costs incurred in prior periods relate to
one-off consultancy and professional fees associated with the
rental review of the London premises.
5. Disposal
On 30 November 2022, the Group completed the disposal of the
Media, Events and Training operations of its Dods segment
(together, the "MET Operations") for a cash consideration of GBP4.5
million to Political Holdings Limited. These activities were
treated as Discontinued Operations within the unaudited interim
results for the period to 30 September 2022, as reported on 1
December 2022.
On 12 January 2023, the Group completed the disposal of the
trade and assets of Le Trombinoscope SAS, the Paris-based
activities of the Dods segment ("Le Trombinoscope"), to Trombimedia
Limited for GBP0.1 million cash consideration. These activities are
also treated as Discontinued Operations.
The activities of the MET Operations and Le Trombinoscope have
been classified as Discontinued Operations within the Consolidated
income statement and therefore excluded from the presentation of
items on a Continuing Operations basis. The unaudited half year for
the period to 30 September 2022, which included 6 months of both
MET operations and Le Trombinoscope, was previously presented to
exclude the MET Operations as Discontinued. It has now been further
restated to also exclude Le Trombinoscope as Discontinued
Operations.
The results of the Discontinued Operation for the year ended 31
March 2023, which include the results of the MET operations for 8
months and Le Trombinoscope for 9.5 months, are unchanged from
previously reported on 6 September 2023.
The results of the Discontinued Operations are as follows:
Unaudited
Unaudited Half year Audited
Half year ended Year ended
Discontinued Operations ended 30 Sept 2022 31 Mar 2023
30 Sept (restated*) GBP'000
2023 GBP'000
GBP'000
----------------------------------------- ------------- -------------- --------------
Revenue - 4,944 6,913
Cost of sales - (4,154) (5,861)
----------------------------------------- ------------- -------------- --------------
Gross profit - 790 1,052
Administrative expenses - (1,325) (1,450)
Operating loss - (535) (398)
Memorandum:
Adjusted EBITDA - (287) (69)
Depreciation of property, plant
and equipment - (45) (58)
Depreciation of right-of-use
assets - (19) (25)
Amortisation of intangible assets
acquired through business combinations - (137) (183)
Amortisation of software intangible
assets - (2) (8)
Non-recurring items: people-related
costs - (45) (55)
Operating loss - (535) (398)
Net finance expense - (29) (66)
Loss before tax - (564) (464)
Income tax credit - - 58
----------------------------------------- ------------- -------------- --------------
Loss for the period from Discontinued
Operations - (564) (406)
Profit on disposal of Discontinued
Operations after tax - - 1,290
----------------------------------------- ------------- -------------- --------------
(Loss)/Profit from Discontinued
Operations for the period - (564) 884
----------------------------------------- ------------- -------------- --------------
* Comparative figures for the half year ended 30 September 2022
have been restated to remove Discontinued Operations as above.
Cashflows generated by the Discontinued Operation for the period
were as follows:
Unaudited
Unaudited Half year Audited
Half year ended Year ended
Discontinued Operations ended 30 Sept 2022 31 Mar 2023
30 Sept (restated*) GBP'000
2023 GBP'000
GBP'000
---------------------------------------- ------------- -------------- --------------
Net cash (outflow) from operating
activities - (594) (1,621)
Net cash (outflow)/inflow from
investing activities - (2) 3,846
Net cash (outflow) from financing
activities - (48) (95)
---------------------------------------- ------------- -------------- --------------
Net increase/(decrease) in cash,
cash equivalents and bank overdrafts
from Discontinued Operations - (644) 2,130
---------------------------------------- ------------- -------------- --------------
* Comparative figures for the half year ended 30 September 2022
have been restated as above.
6. Earnings per share
Unaudited
Unaudited Half year Audited
Half year ended Year ended
ended 30 Sep 2022 31 Mar 2023
Continuing Operations(1) 30 Sep 2023 (restated(1) GBP'000
GBP'000 )
GBP'000
------------------------------------------- -------------- -------------- --------------
Profit/(loss) attributable
to shareholders 353 (435) (3,569)
Add: non-recurring items - 223 3,415
Add: amortisation of intangible
assets acquired through business
combinations 294 294 587
Add: net exchange losses/(gains) 79 (230) (297)
Add: share-based payment (credit)/expense 31 31 63
------------------------------------------- -------------- -------------- --------------
Adjusted post-tax profit/(loss)
from Continuing Operations
attributable to shareholders 757 (117) 199
------------------------------------------- -------------- -------------- --------------
(1) Comparative figures for the half year ended 30 September
2022 have been restated to present Continuing Operations only as
outlined in Note 5.
Unaudited
Unaudited Half year Audited
Half year ended Year ended
ended 30 Sep 2022 31 Mar 2023
Discontinued Operations 30 Sep 2023 (restated*) GBP'000
GBP'000 GBP'000
----------------------------------- --------------- ------------- --------------
(Loss)/profit attributable to
shareholders - (564) 884
Add: non-recurring items - 45 (2,019)
Add: amortisation of intangible
assets acquired through business
combinations - 137 183
Adjusted post-tax profit/(loss)
from Discontinued Operations
attributable to shareholders - (382) (952)
----------------------------------- --------------- ------------- --------------
* Comparative figures for the half year ended 30 September 2022
have been restated as outlined in Note 5.
Unaudited Unaudited Audited
Half year ended Half year Year ended
30 Sept 2023 ended 31 Mar 2023
Ordinary shares 30 Sept 2022 Ordinary
Ordinary shares
shares
------------------------------ ----------------- -------------- -------------
Weighted average number
of shares
In issue during the period
- basic 23,956,124 23,956,124 23,956,124
Adjustment for share options - - -
In issue during the period
- diluted 23,956,124 23,956,124 23,956,124
------------------------------ ----------------- -------------- -------------
Performance Share Plan (PSP) options over 1,420,791 Ordinary
shares have not been included in the calculation of diluted EPS for
any of the above dates because their exercise is contingent on the
satisfaction of certain criteria that had not been met at those
dates.
Unaudited
Unaudited Half year Audited
Half year ended ended Year ended
30 Sep 2023 30 Sep 2022 31 Mar 2023
Continuing Operations(1) Pence per share (restated(1) Pence per
) share
Pence per
share
--------------------------------- ------------------- -------------- --------------
Earnings per share - Continuing
Operations
Basic 1.47 (1.82) (14.90)
Diluted 1.47 (1.82) (14.90)
Adjusted earnings per share -
Continuing Operations
Basic 3.16 (0.49) 0.83
Diluted 3.16 (0.49) 0.83
---------------------------------- ------------------ -------------- --------------
(1) Comparative figures for the half year ended 30 September
2022 have been restated to present Continuing Operations only as
outlined in Note 5.
Unaudited
Unaudited Half year Audited
Discontinued Operations Half year ended ended Year ended
30 Sep 2023 30 Sep 2022 31 Mar 2023
Pence per share (restated*) Pence per
Pence per share
share
-------------------------------------------- --------------------- ------------- --------------
Earnings per share - Discontinued
Operations
Basic - (2.35) 3.69
Diluted - (2.35) 3.69
Adjusted earnings per share - Discontinued
Operations
Basic - (1.59) (3.97)
Diluted - (1.59) (3.97)
---------------------------------------------- ------------------- ------------- --------------
* Comparative figures for the half year ended 30 September 2022
have been restated as outlined in Note 5.
Unaudited Unaudited Audited
Half year ended Half year Year ended
30 Sep 2023 ended 31 Mar 2023
TOTAL Pence per share 30 Sep 2022 Pence per
Pence per share
share
----------------------------- ----------------- ------------- -------------
Earnings per share
Basic 1.47 (4.17) (11.21)
Diluted 1.47 (4.17) (11.21)
Adjusted earnings per share
Basic 3.16 (2.08) (3.14)
Diluted 3.16 (2.08) (3.14)
----------------------------- ----------------- ------------- -------------
7. Cash generated by operations
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2023
30 Sept 30 Sept GBP'000
2023 2022
GBP'000 GBP'000
-------------------------------------- ----------- ----------- -------------
Cash flows from operating
activities
Profit/(loss) for the period 353 (999) (2,685)
Depreciation of property, plant
and equipment 88 346 678
Depreciation of right-of-use
assets 406 680 1,338
Amortisation of intangible
assets acquired through business
combinations 294 431 770
Amortisation of other intangible
assets 142 163 322
Share-based payments charge/(credit) 31 31 63
Share of profit of Associate - (252) (252)
Lease interest expense 64 161 298
Profit on disposal of operations
(before tax) - - (2,074)
Loss on disposal of IFRS16
finance lease - - 2,927
Loss on disposal and impairment
of investments in associates - - 303
Interest income (18) (40) (77)
Interest expense 215 153 378
Foreign exchange on operating
items 4 24 1
Income tax charge/(credit) 176 182 638
--------------------------------------- ----------- ----------- -------------
Operating cash flows before
movement in working capital 1,755 880 2,628
(Increase)/decrease in inventories 14 (16)
(Increase)/decrease in trade
and other receivables (463) (422) (1,520)
Decrease in trade and other
payables (456) (466) 233
--------------------------------------- ----------- ----------- -------------
Cash generated by operations 836 6 1,325
--------------------------------------- ----------- ----------- -------------
8. Goodwill
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2023
30 Sep 2023 30 Sep 2022 GBP'000
GBP'000 GBP'000
----------------------------- ------------- ------------- -------------
Cost and net book value
Opening balance 26,919 28,911 28,911
Disposals in the year - - (1,992)
Reclassified as assets held - (1,269) -
for resale
----------------------------- ------------- ------------- -------------
Closing balance 26,919 27,642 26,919
----------------------------- ------------- ------------- -------------
9. Intangible assets
Assets acquired Under
through business Construction
combinations Software Capitalised Total
costs
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------------------ ----------- -------------- ---------
Cost
At 1 April 2022 28,042 6,074 - 34,116
Transferred from tangible
fixed assets - - 70 70
Additions - internally
generated - 101 74 175
Disposals (16,833) (3,999) - (20,832)
At 31 March 2023 11,209 2,176 144 13,529
Additions - internally
generated - - 94 94
At 30 September 2023 11,209 2,176 238 13,623
--------------------------- ------------------ ----------- -------------- ---------
Accumulated amortisation
At 1 April 2023 20,145 4,145 - 24,290
Charge for the year 770 322 - 1,092
Disposals (15,825) (3,936) - (19,761)
-------------------------- --------- -------- ---------
At 31 March 2023 5,090 531 - 5,621
Charge for the period 294 142 - 436
At 30 September 2023 5,384 673 - 6,057
-------------------------- --------- -------- ---------
Net book value
At 31 March 2022 - audited 7,897 1,929 - 9,826
At 31 March 2023 - audited 6,119 1,645 144 7,908
---------------------------- ------ ------ ---- ------
At 30 September 2023
- unaudited 5,825 1,503 238 7,566
---------------------------- ------ ------ ---- ------
10. Property, plant and equipment
IT Equipment
Leasehold and Fixtures
Improvements and Fittings Total
GBP'000 GBP'000 GBP'000
------------------------------ --------------- -------------- --------
Cost
At 1 April 2022 2,037 2,521 4,558
Transferred to tangible
fixed assets - (70) (70)
Additions - 69 69
Foreign exchange differences - (1) (1)
Disposals (2,037) (1,070) (3,107)
At 31 March 2023 - 1,449 1,449
Additions 21 107 128
At 30 September 2023 21 1,556 1,577
------------------------------- --------------- -------------- --------
Accumulated depreciation
At 1 April 2022 1,128 1,623 2,751
Charge for the year 209 469 678
Disposals (1,337) (984) (2,321)
At 31 March 2023 - 1,108 1,108
Charge for the period 2 86 88
At 30 September 2023 2 1,194 1,196
--------------------------- -------- ------ --------
Net book value
At 31 March 2022 - audited 909 898 1,807
At 31 March 2023 - audited - 341 341
At 30 September 2023 -
unaudited 19 362 381
----------------------------- ---- ---- ------
11. Net debt
Net debt comprises the aggregate of loans and borrowings,
excluding IFRS16 lease liabilities, and cash and cash equivalents,
as follows:
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2023
30 Sep 2023 30 Sep 2022 GBP'000
GBP'000 GBP'000
------------------------------- ------------- ------------- -------------
Bank loan / RCF due within
one year 2,910 2,200 3,373
Bank loan due after more than
one year 621 2,800 1,342
------------------------------- ------------- ------------- -------------
3,531 5,000 4,715
Cash and cash equivalents (1,069) (1,834) (2,144)
------------------------------- ------------- ------------- -------------
Net Debt 2,462 3,166 2,571
------------------------------- ------------- ------------- -------------
Interest-bearing loans and borrowings
On 22 July 2022, the Company agreed new secured loan facilities
with Barclays which include:
-- Term Loan: a GBP3 million, five-year term loan, amortising on
a straight-line basis at GBP150,000 per quarter;
-- RCF: a GBP2 million non-amortising, revolving credit facility
for the five-year duration of the Term Loan;
-- Both the Term Loan and RCF accruing interest at 4.75% above
Bank of England base rate.
On 1 December 2022, the Company repaid and cancelled GBP2
million of the Term Loan following receipt of the proceeds of
disposals.
On 22 March 2023, the Company secured a further GBP1.8 million
18-month Term Loan, amortising on a straight-line basis at
GBP300,000 per quarter, in order to fund the disposal of the
Company's Shard lease.
12. Leases
Right-of-use Lease
assets liabilities
GBP'000 GBP'000
------------------------- ------------- -------------
As at 1 April 2022 5,660 (6,721)
Depreciation (1,338) -
Lease Interest - (298)
Lease payments(1) - 1,897
Disposal (2,448) 3,242
As at 31 March 2023 1,874 (1,880)
Addition 730 (730)
Depreciation (406) -
Lease Interest - (64)
Lease payments(1) - 494
As at 30 September 2023 2,198 (2,180)
Current (597)
Non-current (1,583)
-------------------------- ------------- -------------
The Consolidated income statement includes the following amounts
relating to leases:
Unaudited Unaudited Audited
Half year ended Half year Year ended
30 Sep 2023 ended 31 Mar 2023
GBP'000 30 Sep 2022 GBP'000
GBP'000
--------------------------------------------- ------------- ---------------
Depreciation charge of right-of-use
assets 406 680 1,338
Interest expense (included in finance
cost) 64 161 298
---------------------------------------- ---- ------------- -------------
The right-of-use assets relate to office space in four locations
and at the balance sheet date have remaining terms ranging up to 7
years.
There were GBPnil of expenses relating to diminutive payments
not included in the measurement of lease liabilities (H1 FY23:
GBPnil).
Lease liabilities includes liabilities in respect of IT
equipment with a cost of GBP77,000 (31 March 2023: GBP77,000).
These assets are capitalised within IT equipment (see Note 10).
13. Issued Share Capital
28p ordinary
shares Total
Number GBP'000
----------------------------------------- ------------- ----------
Issued share capital as at 30 September
2022 23,956,124 6,708
----------------------------------------- ------------- ----------
Issued share capital as at 31 March
2023 23,956,124 6,708
----------------------------------------- ------------- ----------
Issued share capital as at30 September
2023 23,956,124 6,708
----------------------------------------- ------------- ----------
14. Related party transactions
MET operations
The disposal of the MET Operations on 30 November 2022 was to
Political Holdings Limited. Political Holdings Limited is
considered a related party as it is controlled by Lord Ashcroft
KCMG PC, a substantial shareholder in the Company and Angela
Entwistle, a non-executive director of the Company, is a director
of Political Holdings Limited.
As part of the disposal of the MET Operations, the Group agreed
to provide transitional services to the Political Holdings Limited
group of companies covering areas such as occupancy, IT systems and
support and finance and accounting services. In total, the group
charged GBP293,364 for these services during the period (H1 FY23:
GBPnil), which has been recognised as Other Operating Income within
the Income Statement. At 30 September 2023, a balance of GBP14,563
(31 March 2023: GBP145,991) was outstanding in respect of invoicing
for these services.
Since its acquisition of the MET operations, the Political
Holdings Limited group has been a customer of MD&T and was
billed GBP56,476 (H1 FY23: GBPnil) during the period for marketing
and data services. At 30 September 2023, there was a balance of
GBP30,688 (31 March 2023: GBP16,094) due.
Further, as part of the disposal, the Group has continued to act
as agent for the Political Holdings Limited group, invoicing
customers, collecting book debts and paying for services under
contracts which were pending legal novation to Political Holdings
Limited group companies. During the period, revenue of GBP887,393
(H1 FY23: GBPnil) was invoiced, cash of GBP1,968,961 (H1 FY23:
GBPnil) was collected and payments for purchases and payroll
amounting to GBP769,009 (H1 FY23: GBPnil) were made by the Group on
behalf of Political Holdings Limited group companies. None of these
revenues or costs, all of which arises post disposal are recognised
within the Income Statement of the Group. At 30 September 2023,
GBP38,957 (31 March 2023: GBP233,053) of funds were held on trust
for Political Holdings Limited group companies.
Investments and Associates
During the period, the Group billed GBP125,800 (H1 FY23:
GBP131,000) for technology services to Acolyte Resource Group
Limited, a company in which the Group had a 13.5% investment, and
of which Cornelius Conlon is a Director. At 30 September 2023,
there was a balance of GBP78,400 (31 March 2023: GBP64,000)
due.
Meritgroup Limited acquisition
On acquisition of Meritgroup Limited, an arm's length
non-repairing 7-year lease was entered into between a Merit
subsidiary (Letrim Intelligence Services Private Limited) and Merit
Software Services Private Limited. Cornelius Conlon, a Director of
the Group, is the beneficial owner of Merit Software Services
Private Limited. The lease relates to the Chennai office of
MD&T. During the period, payments of GBP366,800 (H1 FY23:
GBP400,900) were made to Merit Software Services Private Limited in
relation to the lease and other property-related costs.
Other related party transactions
During the current and previous period, Deacon Street Partners
Limited, a company related by virtue of Angela Entwistle, a
Director of the Company also being a Director, invoiced GBP15,000
(H1 FY23: GBP15,000) to the Company for the services of Angela
Entwistle as a Non-Executive Director. At 30 September 2023 the
balance outstanding was GBP2,500 (31 March 2023: GBP2,500).
System1 Group plc, a company related by virtue of Philip
Machray, a Director of the Company also being a Director, is a
customer of MD&T and was billed GBP76,700 (H1 FY23: GBP55,900)
for Technology Resourcing Services. At 30 September 2023 the
balance outstanding was GBP12,100 (31 March 2023: GBP44,400).
15. Subsequent events
On 20 October 2023, the Group received GBP450,000 from Political
Holdings Limited, being the deferred consideration receivable on
the disposal of the MET Operations on 30 November 2022.
16. Prior period restatement
The consolidated statement of financial position for the period
ended 30 September 2022 has been restated to correctly classify
deferred tax assets of GBP346,000 as non-current assets. These were
previously included within Current assets as part of Trade and
other receivables.
The reclassification has no impact on Total assets, Total equity
and liabilities or Capital and reserves as at the 30 September
2022, nor the Comprehensive income for the period ended 30
September 2022.
The impact of the reclassification on items within the
Consolidated statement of financial position is as follows:
As previously
reported Change As restated
At 30 September 2022 GBP'000 GBP,000 GBP'000
Total non-current assets 43,860 346 44,206
Current assets 6,422 (346) 6,076
Assets held for resale 3,591 - 3,591
-------------------------- -------------- --------- ------------
Total current assets 10,013 (346) 9,667
Total assets 53,873 - 53,873
-------------------------- -------------- --------- ------------
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END
IR BRBFTMTAMBAJ
(END) Dow Jones Newswires
November 08, 2023 02:00 ET (07:00 GMT)
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