
("Watchstone" or the "Company" or the "Group")
Results for the six months ended
Watchstone (AIM:WTG.L) today announces its results for the six months ended
·
· Completion of the disposal of Healthcare Services for
· Underlying EBITDA loss of
· Total continuing profit before tax of
· Group net assets of
· Group cash and term deposits, excluding amounts included within assets held for sale at
· Group cash at
For further information:
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Tel: 03333 448048 |
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Tel: 020 7220 1666 |
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Update
A full summary of actions and issues was presented in our Annual Report published in
Impact of COVID 19 the
Action was taken to reduce costs whilst the Stay at Home and related COVID-19 measures were in place in the
The Group experienced no material impact from the departure of the
A significant proportion of the Group's assets are held as cash and therefore the Group remains relatively insulated from macroeconomic factors.
Business review
The results of ingenie have improved significantly from H1 2019 despite the impact of COVID-19 restrictions, which included a temporary halt to driving tests in the
The Group is committed to a plan to dispose of its ingenie business and to primarily realise value from this business through sale. The assets and liabilities of the business have therefore been included within assets and liabilities held for sale and classified as Discontinued within the Condensed Consolidated Income Statement. Comparatives are restated on a consistent basis.
Remaining legal claims and other assets
Other than ingenie, the Group retains no material trading businesses and the assets of the Group are primarily in cash. Several non-trading entities remain within the Group which are primarily retained since they are party to legal action or, for example, hold onerous property leases (which are provided against). Additionally, there are three historic investments in unlisted entities, all impaired to nil.
Litigation in relation to the historic activities of the Group is being pursued where it is considered that we have a strong case and where the Board having taken advice, expects a successful outcome in favour of the Group. These include filed cases against
The Healthcare Services disposal included deferred contingent consideration although COVID-19 is likely to have a negative impact upon the post disposal trading of Healthcare Services which was not anticipated when the transaction completed. No deferred contingent consideration has been included within these financial results. As is customary, the Group has provided time bound warranties to the purchasers of Healthcare Services.
Financial update
The Group disposed of its Healthcare Services business in
Accordingly, the results of both the Healthcare Services business to the date of disposal (
Legal update
On
The resolution of litigation with Slater & Gordon during 2019 in relation to the disposal of the
Cash
Cash and term deposits totalled
As at
Principal risks and uncertainties
The principal risks and uncertainties to which the Group is exposed remain broadly as set out in section 4 of the Strategic Report included within the Annual Report and Financial Statements for the year ended
Outlook
We remain focussed on resolving the Group's remaining legacy matters as efficiently as possible and are confident of returning further cash sums to shareholders in due course.
Directors' Responsibility Statement
Responsibility statement of the Directors in respect of this interim report.
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the EU;
· the interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
Group Chief Executive Officer
On behalf of the Directors
Condensed Consolidated Income Statement
for the period ended
|
|
Six months ended |
Six months ended |
|
||||
|
|
2020 |
2020 |
2020 |
2019 |
2019 |
2019 |
|
|
|
Underlying |
Non-underlying* |
Total |
Underlying |
Non-underlying* |
Total |
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
||
|
|
|
|
|
|
|
|
|
Revenue |
|
- |
- |
- |
- |
- |
- |
|
|
|
( |
|
|
( |
|
|
|
Cost of sales |
|
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
Administrative expenses |
4 |
(1,406) |
1,853 |
447 |
(1,562) |
(3,173) |
(4,735) |
|
|
|
|
|
|
|
|
|
|
Group operating profit/(loss) |
|
(1,406) |
1,853 |
447 |
(1,562) |
(3,173) |
(4,735) |
|
|
|
|
|
|
|
|
|
|
Finance income |
|
248 |
- |
248 |
222 |
- |
222 |
|
Finance expense |
|
- |
- |
- |
(214) |
- |
(214) |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before taxation |
4 |
(1,158) |
1,853 |
695 |
(1,554) |
(3,173) |
(4,727) |
|
Taxation |
|
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) after taxation for the period from continuing operations |
|
(1,158) |
1,853 |
695 |
(1,554) |
(3,173) |
(4,727) |
|
|
|
|
|
|
- |
|
|
|
Net gain on disposal of discontinued operations |
9 |
- |
7,470 |
7,470 |
- |
- |
- |
|
Loss for the period from discontinued operations |
9 |
- |
(922) |
(922) |
- |
(2,553) |
(2,553) |
|
Profit/(loss) after taxation for the period |
|
(1,158) |
8,401 |
7,243 |
(1,554) |
(5,726) |
(7,280) |
|
Attributable to: |
|
|
|
|
|
|
|
|
Equity holders of the parent |
|
(1,158) |
8,401 |
7,243 |
(1,554) |
(5,726) |
(7,280) |
|
Non-controlling interests |
|
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
(1,158) |
8,401 |
7,243 |
(1,554) |
(5,726) |
(7,280) |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) per share (pence): |
|
|
|
|
|
|
|
|
Basic |
|
(2.5) |
|
15.7 |
(3.4) |
|
(15.8) |
|
Diluted |
|
(2.5) |
|
15.7 |
(3.4) |
|
(15.8) |
|
Profit/loss per share from continuing activities (pence): |
|
|
|
|
|
|
|
|
Basic |
|
|
|
1.5 |
|
|
(10.3) |
|
Diluted |
|
|
|
1.5 |
|
|
(10.3) |
|
* Non-underlying results have been presented separately to give a better guide to underlying business performance (see notes 1 and 5).
Condensed Consolidated Statement of Comprehensive Income
for the period ended
|
Six months ended |
Six months ended |
|
£'000 |
£'000 |
|
|
|
Profit/(loss) after taxation |
7,243 |
(7,280) |
|
|
|
Items that may be reclassified in the Consolidated Income Statement |
|
|
Exchange differences on translation of foreign operations |
(471) |
549 |
|
|
|
|
|
|
Total comprehensive profit/(loss) for the period |
6,772 |
(6,731) |
Attributable to: |
|
|
Equity holders of the parent |
6,772 |
(6,745) |
Non-controlling interests |
- |
14 |
|
|
|
|
6,772 |
(6,731) |
Condensed Consolidated Statement of Financial Position
as at
|
|
At 30 June 2020 |
At |
|
Note |
£'000 |
£'000 |
Non-current assets |
|
|
|
Other intangible assets |
|
- |
819 |
Property, plant and equipment |
|
1 |
646 |
Other receivables |
|
- |
260 |
|
|
|
|
|
|
1 |
1,725 |
|
|
|
|
Current assets |
|
|
|
Inventories |
|
- |
435 |
Corporation tax |
|
- |
178 |
Trade and other receivables |
6 |
568 |
2,777 |
Term deposits |
|
15,000 |
15,000 |
Cash |
|
22,340 |
56,611 |
|
|
|
|
|
|
37,908 |
75,001 |
Assets of disposal group held for sale |
9 |
3,936 |
27,601 |
Total current assets |
|
41,844 |
102,602 |
Total assets |
|
41,845 |
104,327 |
|
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
7 |
(1,507) |
(4,719) |
Provisions |
8 |
(1,527) |
(4,147) |
|
|
(3,034) |
(8,866) |
Liabilities of disposal group held for sale |
9 |
(3,488) |
(17,749) |
Total current liabilities |
|
(6,522) |
(26,615) |
|
|
|
|
Non-current liabilities |
|
|
|
Provisions |
8 |
(19) |
(19) |
Deferred tax liabilities |
|
(1) |
(1) |
|
|
|
|
|
|
(20) |
(20) |
|
|
|
|
Total liabilities |
|
(6,542) |
(26,635) |
|
|
|
|
Net assets |
|
35,303 |
77,692 |
|
|
|
|
Equity |
|
|
|
Share capital |
12 |
4,604 |
4,604 |
Other reserves |
|
88,348 |
137,486 |
Retained earnings |
|
(57,653) |
(64,905) |
Equity attributable to equity holders of the parent |
|
35,299 |
77,185 |
Non-controlling interests |
|
4 |
507 |
|
|
|
|
Total equity |
|
35,303 |
77,692 |
Condensed Consolidated Cash Flow Statement
for the period ended
|
Note |
Six months ended |
Six months ended |
|
|
£'000 |
£'000 |
Cash flows from operating activities |
|
|
|
Cash outflows from operations before exceptional and non-underlying items, net finance expense and tax |
13 |
(1,386) |
(3,860) |
Non-underlying cash outflows excluding discontinued operations |
|
(83) |
(2,996) |
|
|
|
|
Cash used in operations before net finance expense and tax |
|
(1,469) |
(6,856) |
|
|
|
|
Corporation tax received |
|
178 |
- |
|
|
|
|
Net cash used by operating activities |
|
(1,291) |
(6,856) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment |
|
(516) |
(521) |
Purchase of intangible fixed assets |
|
(350) |
(387) |
Disposal of subsidiaries |
|
18,816 |
- |
Investment in term deposits |
|
(30,000) |
(30,000) |
Maturity of term deposits |
|
30,000 |
40,000 |
Interest income |
|
160 |
214 |
|
|
|
|
Net cash generated from investing activities |
|
18,110 |
9,306 |
|
|
|
|
Cash flows from financing activities |
|
|
|
Net finance expense |
|
(273) |
(567) |
Redemption of preference shares |
|
- |
(886) |
Dividends to minority interests |
|
(287) |
- |
Return of capital |
|
(50,518) |
- |
|
|
|
|
Net cash used by financing activities |
|
(51,078) |
(1,453) |
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
(34,259) |
997 |
Cash and cash equivalents at the beginning of the period |
|
57,176 |
10,113 |
Exchange losses on cash and cash equivalents |
|
(2) |
(32) |
|
|
|
|
Cash and cash equivalents at the end of the period |
|
22,915 |
11,078 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash to net funds |
|
|
|
Term deposits |
|
15,000 |
|
Cash |
|
22,340 |
|
Cash included within assets held for sale |
|
575 |
|
Net funds |
|
37,915 |
|
Notes to the Interim Statements
1. Preparation of the condensed consolidated financial information
Basis of preparation
The interim financial statements for the six months ended
The comparative figures for the financial year ended
The Group's business activities together with the factors that are likely to affect its future developments, performance and position are set out in the Update. The interim financial statements were approved by the Board of Directors on
Going Concern
The Group holds significant cash reserves and no material debt. The Group has concluded that its cash reserves together with ongoing operating cash flows will be sufficient to fund the ongoing operations of the Group's activities together with any future needs of those businesses, and the settlement of legacy matters.
On this basis, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Directors have not identified any material uncertainties that would cast significant doubt on the ability of the Group to continue as a going concern. Therefore the Directors continue to adopt the Going Concern basis of accounting in the preparation of the Financial Statements.
Statement of Directors' responsibilities
The Directors confirm that, to the best of their knowledge, this condensed set of consolidated financial statements have been prepared in accordance with the AIM Rules.
Significant Accounting Policies
The accounting policies applied by the Group in this condensed set of consolidated financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended
• Amendments to References to Conceptual Framework in IFRS Standards
• Definition of Material (Amendments to IAS 1 and IAS 8)
• Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
2. Critical accounting judgements and key sources of estimation uncertainty
In the process of applying the Group's accounting policies, management has made a number of judgements, and the preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.
The key management judgements together with assumptions concerning the future and other key sources of estimation uncertainty at
Judgement: Classification of businesses as discontinued and held for sale
At
In management's view both of these conditions have been met at the Statement of Financial Position date and consequently the assets and liabilities of these businesses have been included within assets and liabilities held for sale. By virtue of being held for sale, the results of these businesses are also classified as Discontinued within the Condensed Consolidated Income Statement. Comparatives are restated on a consistent basis.
Estimate and judgement: Provisions
The Group is aware of a number of legal and regulatory matters which, by their nature, are subject to significant judgement and uncertainty. This includes judgements around both the quantum of any related cash outflows and also the timing. The judgements are specific to the facts surrounding each case and often involve historical transactions. All such matters are periodically assessed with the assistance of external professional advisers, where appropriate, to determine the likelihood of the Group incurring a liability and to evaluate the extent to which a reliable estimate of any liability can be made.
Judgement: Classification of underlying and non-underlying results
Management is required to exercise its judgement in the classification of certain items as exceptional and outside of the Group's underlying results. The determination of whether an item should be separately disclosed as an exceptional item or other adjustments requires judgement on its nature and incidence, as well as whether it provides clarity on the Group's underlying trading performance. In exercising this judgement, Management take appropriate regard of IAS 1 "Presentation of financial statements'' as well as guidance issued by the
Estimate and judgement: Revenue (within discontinued operations)
The Group treats a number of contractual promises as single performance obligations since they are not capable of being distinct. Management must apply judgement in making this assessment which has the impact of changing the timing at which revenue is recognised. Furthermore, where performance obligations are recognised over time management have assessed that the most appropriate method is to apportion the revenue evenly over the duration of the agreement since this best represents the timing of the transfer of the benefits to the customer.
Where management have reviewed an agreement and consider that it contains multiple performance obligations the total transaction price is allocated to each performance obligation, this allocation may be different to amounts specified in a contract. Where possible this allocation is made with reference to separate selling prices. This estimate impacts the timing of recognition of revenue for these agreements.
In instances where further agreements are made with a customer, or changes to existing agreements are made, management must apply judgement in determining if the changes are distinct and therefore represent a new contract or instead, a contract amendment. The outcome of this judgement results in the additional revenues either being recognised entirely prospectively or retrospectively from the start of the existing agreement.
Judgement: Identifying performance obligations within contracts with customers
The Group must identify the performance obligations within its contracts against which revenue is subsequently recognised. Judgement is applied in determining if the related good or service is capable of being distinct or if it is distinct in the context of the contract. In particular, this applies to telematics services and devices and one-off fees in relation to licences and system delivery to B2B customers.
It is management's judgement that the telematics device and the related service represent a single performance obligation delivered over time and the set-up fees with the related license represent a single performance obligation recognised over time. The consequence of this judgement is to spread revenues relating to elements of the contract over longer periods than if the goods and services were deemed to be separate performance obligations.
Judgement: Recognition of liabilities arising under the Distribution Incentive Scheme
As discussed in note 14 and the Directors' Remuneration Report of the 2019 Annual Report and Financial Statements the Group Chief Executive Officer is entitled to 5.43% of any distribution over and above a prescribed distribution hurdle ("DIS Hurdle"). No amounts have been recognised in these Condensed Consolidated Financial Statements in respect of this liability despite a distribution being planned at
3. Key performance indicators
|
|
Six months ended 30 June 2020 |
Six months ended |
|
|
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Underlying EBITDA (Note 4) |
|
(1,405) |
(1,537) |
|
|
|
|
|
|
|
|
|
|
|
|
Underlying group operating loss (Note 4) |
|
(1,406) |
(1,562) |
|
|
|
|
Cash and term deposits (continuing business) |
|
37,340 |
71,611* |
*At
Reconciliation of Alternative Performance Measures to nearest GAAP equivalents
|
|
Six months ended 30 June 2020 |
Six months ended |
|
|
£'000 |
£'000 |
Underlying EBITDA |
|
(1,405) |
(1,537) |
Underlying depreciation and amortisation |
|
(1) |
(25) |
Underlying group operating loss |
|
(1,406) |
(1,562) |
Non-underlying group operating profit/(loss) |
|
1,853 |
(3,173) |
Group operating profit/(loss) |
|
447 |
(4,735) |
Further detail regarding non-underlying results is provided in note 5.
4. Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. At
A reconciliation of alternative performance measure to nearest GAAP equivalents is presented in note 3.
|
|
|
Central |
Total |
|
|
|
£'000 |
£'000 |
Six months ended |
|
|
|
|
Underlying administrative expenses excluding depreciation and amortisation |
|
|
(1,405) |
(1,405) |
|
|
|
|
|
Underlying EBITDA |
|
|
(1,405) |
(1,405) |
Depreciation and amortisation |
|
|
|
(1) |
|
|
|
|
|
Underlying group operating loss |
|
|
|
(1,406) |
Net finance income |
|
|
|
248 |
|
|
|
|
|
Underlying group loss before tax |
|
|
|
(1,158) |
Non-underlying profit before tax |
|
|
|
1,853 |
|
|
|
|
|
Total group profit before tax from continuing operations |
|
|
|
695 |
|
|
|
Central |
Total |
|
|
|
£'000 |
£'000 |
Six months ended |
|
|
|
|
Administrative expenses excluding depreciation and amortisation |
|
|
(1,537) |
(1,537) |
|
|
|
|
|
Underlying EBITDA |
|
|
(1,537) |
(1,537) |
Depreciation and amortisation |
|
|
|
(25) |
|
|
|
|
|
Underlying group operating loss |
|
|
|
(1,562) |
Net finance income |
|
|
|
8 |
|
|
|
|
|
Underlying group loss before tax |
|
|
|
(1,554) |
Non-underlying profit before tax |
|
|
|
(3,173) |
|
|
|
|
|
Total group profit before tax from continuing operations |
|
|
|
(4,727) |
5. Non-underlying administrative expenses
|
Six months ended 30 June 2020 |
Six months ended |
|
£'000 |
£'000 |
|
|
|
Exceptional items: |
|
|
- Legal expenses |
(1,371) |
2,942 |
- Tax related matters |
(467) |
- |
- Restructuring |
(15) |
231 |
|
|
|
Total exceptional items |
(1,853) |
3,173 |
|
|
|
Total non-underlying administrative expenses |
(1,853) |
3,173 |
The credit to legal expense includes the release of unused provisions of
The credit to tax related matters relates to a receipt from a former director as detailed in note 11.
The 2019 restructuring costs relate to the exit of the former Group Finance Director
6. Trade and other receivables
|
30 June 2020 |
31 December 2019 |
|
£'000 |
£'000 |
|
|
|
Trade receivables (net of impairment provision) |
- |
244 |
Other receivables |
505 |
1,931 |
Prepayments |
63 |
602 |
|
|
|
|
568 |
2,777 |
7. Trade and other payables
|
30 June 2020 |
31 December 2019 |
|
£'000 |
£'000 |
Current liabilities |
|
|
Trade payables |
372 |
729 |
Payroll and other taxes including social security |
19 |
84 |
Accruals |
1,073 |
2,003 |
Contract liabilities |
- |
1,453 |
Other liabilities |
43 |
450 |
|
|
|
|
1,507 |
4,719 |
8. Provisions
|
Tax related matters |
Legal disputes |
Onerous contracts |
Other |
Total |
|
|||||
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|||||
At |
1,700 |
8,207 |
87 |
1,410 |
11,404 |
|
|||||
Additional provisions |
- |
2,691 |
47 |
100 |
2,838 |
|
|||||
Unused amounts released |
- |
(127) |
- |
- |
(127) |
|
|||||
Used during the year |
- |
(4,028) |
(20) |
(459) |
(4,507) |
|
|||||
Exchange movements |
- |
- |
6 |
- |
6 |
|
|||||
|
|
|
|
|
|
|
|||||
At |
1,700 |
6,743 |
120 |
1,051 |
9,614 |
|
|||||
|
|
|
|
|
|
|
|||||
At |
- |
3,803 |
88 |
275 |
4,166 |
|
|||||
Additional provisions |
- |
- |
- |
831 |
831 |
|
|||||
Unused amounts released |
- |
(2,246) |
- |
- |
(2,246) |
|
|||||
Used during the year |
- |
(85) |
(15) |
(693) |
(793) |
|
|||||
Transferred to liabilities held for sale |
- |
- |
- |
(413) |
(413) |
|
|||||
Exchange movements |
- |
- |
1 |
- |
1 |
|
|||||
|
|
|
|
|
|
|
|||||
At |
- |
1,472 |
74 |
- |
1,546 |
|
|||||
|
|
|
|
|
|
||||||
Split:
Non-current |
- |
- |
19 |
- |
19 |
|||||
Current |
- |
1,472 |
55 |
- |
1,527 |
|||||
|
|
|
|
|
|
|||||
Legal disputes and regulatory matters
In legal cases where the Group is (or would be) the defendant, such as those set out below and in note 10, defence costs are provided as the Group is committed to defending the actions. Such costs are provided for taking into account the range of possible eventualities given the uncertainty of the outcome. If the Group is successful in defending such actions, then the final costs may be lower than the total provision recognised above. No amounts have been provided for the costs of any settlement, fine or award of damages.
On
As detailed in note 10, the Company received a notice of intended claim during 2019. No further response has been received from the purported claimants and therefore
As a consequence of the facts above
In legal cases where the Group is the claimant (or counter claimant), costs are not provided as there is no obligation to proceed and the Group is not contractually committed to incur costs.
Onerous contracts
At
Other
Provisions have been established for expected costs where a commitment has been made at the balance sheet date and for which no future benefit is anticipated. These primarily relate to policy cancellations within the ingenie business which are based upon historic experience within the business and is limited to one year from policy inception. These amounts have been transferred to liabilities held for sale along with the other assets and liabilities of ingenie at
9. Discontinued operations and disposals
Loss for the period from discontinued operations:
|
2020 |
2019 |
|
£'000 |
£'000 |
|
|
|
Healthcare Services |
(236) |
(781) |
Ingenie |
(671) |
(1,810) |
Hubio |
(15) |
38 |
|
|
|
Loss for the period from discontinued operations net of tax |
(922) |
(2,553) |
The sale of Healthcare Services completed in
Rights around certain potential claims and recoveries remain with the Group however no amounts are recognised within the results presented.
The profit recognised in the Condensed Consolidated Income Statement arising upon the sale of Healthcare Services in February 2020 is as follows:
|
|
£'000 |
|
|
|
Sales proceeds |
|
21,713 |
Net assets at disposal |
|
(11,569) |
Expenses and other costs of sale |
|
(804) |
|
|
|
Profit arising on sale |
|
9,340 |
Cumulative foreign exchange losses recognised through OCI |
|
(1,870) |
Net profit arising on sale to be recognised in profit and loss |
|
7,470 |
Up to a further CDN $800,000 becomes payable should the business generate target revenues in the year after disposal. This amount is not included within the proceeds above.
10. Contingent liabilities
The Group routinely enters into a range of contractual arrangements in the ordinary course of business which can give rise to claims or potential litigation against Group companies. It is the Group's policy to make specific provisions at the Statement of Financial Position date for all liabilities which, in the opinion of the Directors, are expected to result in a loss.
On 14 December 2015, the Group received a letter of claim from a law firm ("Claimant Firm") threatening to commence an action against the Company under the Financial Services and Markets Act 2000. No proceedings have been commenced to date in respect of this matter and the last correspondence from the Claimant Firm was received in June 2016. We therefore believe this purported action has been discontinued.
Separately, a firm purporting to act for a group of twelve individuals (some of whom participated in the original threatened litigation) submitted a "Notice of intended claim" to the Company during the year ended 31 December 2019 ("Notice"). The Notice related to the potential pursuit of a claim arising under section 90A and Schedule 10A of the Financial Services and Markets Act 2000. However, it provided no information to support the validity or valuation of the individual prospective claimants' claims, which they would be required to prove in due course in any litigation. The Company responded fully to the Notice, outlining its view that the purported claim had no legal merit, because the legal tests for bringing a claim of this sort were not satisfied. The Company will vigorously defend all such claims if so brought. Having taken external advice, no liability has been recognised at the balance sheet date as it is not possible to reliably estimate a provision (if any) in respect of this matter. Defence costs in respect of this matter have been provided for as set out in note 8.
11. Related party transactions
Transactions with a supplier
As disclosed in note 33 of the 2019 Annual Report and Financial Statements one of the Group's subsidiaries has entered into an arms-length agreement with a Company of which
Transactions with former management
On 18 June 2020, £467,000 was received from
12. Share capital
|
Number |
Nominal value fully paid |
Nominal value unpaid |
Nominal value total |
|
000's |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
at 31 December 2019 and 30 June 2020 |
46,038 |
4,593 |
11 |
4,604 |
|
|
|
|
|
13. Cash flow from operating activities
|
Six months ended 30 June 2020 |
Six months ended 30 June 2019 |
|
|
|
|
|
|
Profit/(loss) after tax |
7,243 |
(7,280) |
Tax |
- |
10 |
Finance expense |
273 |
600 |
Finance income |
(248) |
(222) |
|
|
|
Operating profit/(loss) |
7,268 |
(6,892) |
Adjustments for: |
|
|
Non underlying cash out flows excluding discontinued operations |
83 |
2,996 |
Depreciation of property, plant and equipment |
734 |
1,782 |
Amortisation of intangible assets |
265 |
747 |
Loss on disposal of plant, property and equipment |
102 |
3 |
Profit on disposal of subsidiary undertakings and operations |
(7,470) |
- |
|
|
|
Operating cash flows before movements in working capital and provisions |
982 |
(1,364) |
Decrease/(increase) in inventories |
435 |
(40) |
Decrease/(increase) in trade and other receivables |
17,302 |
(405) |
(Decrease) in trade and other payables |
(20,105) |
(2,051) |
|
|
|
Cash outflows from operations before exceptional and non-underlying items, net finance expense and tax |
(1,386) |
(3,860) |
14. Post balance sheet events
On 21 July 2020, the High Court of Justice in
On 7 August 2020, the Company filed and served a claim against PwC in the High Court. The Particulars of Claim are available on written application to the Commercial Court, alternatively online at the HM Courts & Tribunals e-filing Service.
Officers and Advisors
Directors
Mr R Rose (Chairman)
Rt. Hon. Lord M Howard
Mr D Young
Mr S Borson
Company Secretary
Mr S Borson
Registered Office
Highfield Court
Tollgate, Chandler's
Company Registration No. 05542221
Bankers
Royal Bank of Scotland Plc
Abbey Gardens
4
Reading, RG1 3BA
Broker and Nominated Advisor
WH Ireland Limited
24
Auditor
Arcadia House
Maritime Walk
Solicitors
199 Bishopsgate
Exchange House
Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, BR3 4TU
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