Baltic Classifieds Group PLC
Annual Report and Accounts 2023
Contents
STRATEGIC REPORT
3
Strategic Highlights
8
Chair's Statement
CEO's Statement
10
12 Market Overview
16
Our Business at a Glance
• Our business model
• Our market position
• Our strategy
• Our purpose and culture
18 Moving our Strategy Forward
19
20
24
26
Section 172(1) Statement
Financial Review
Operational Review
Sustainability Report
• The Task Force for Climate-Related Financial
Disclosure (“TCFD”) Report
• Non-financial and sustainability information
statement
46
Risk Management
• Principal risks and uncertainties
49
Viability Statement
GOVERNANCE REPORT
51
Corporate Governance Report
• Introduction by the Chair of the Board Trevor Mather
• Corporate Governance Statement 2023
• Board of Directors
• Senior Management
• Board Leadership and Company Purpose
• Division of Responsibilities
• Board Composition, Succession and Evaluation
• Audit, Risk and Internal Control
• Remuneration
72
76
82
91
Nomination Committee Report
Audit Committee Report
Directors' Remuneration Report
Directors' Report
FINANCIAL STATEMENTS
97
Independent Auditor's report to the members of Baltic
Classifieds Group PLC
103 Consolidated Statement of Profit or Loss and Other
Comprehensive Income
104 Consolidated Statement of Financial Position
105 Consolidated Statement of Changes in Equity
106 Consolidated Statement of Cash Flows
107 Notes to the consolidated financial statements
• Going concern
139 Company Statement of Financial Position
140 Company Statement of Changes in Equity
141 Notes to the Company financial statements
ADDITIONAL INFORMATION
149 Glossary
150 Shareholder Information
STRATEGIC REPORT
STRATEGIC REPORT
3
8
Strategic Highlights
Chair's Statement
10 CEO's Statement
12 Market Overview
16 Our Business at a Glance
• Our business model
• Our market position
• Our strategy
• Our purpose and culture
18 Moving our Strategy Forward
19 Section 172(1) Statement
20 Financial Review
24 Operational Review
26 Sustainability Report
• The Task Force for Climate-Related Financial Disclosure (“TCFD”) Report
• Non-financial and sustainability information statement
46 Risk Management
• Principal risks and uncertainties
49 Viability Statement
Strategic Highlights
The Group’s objective is to provide
trusted marketplaces to connect
sellers and buyers across the Baltic
region through “easy-to-use” and
“feature-rich” portals that result in
an efficient transaction experience
for all parties.
We believe the Group achieves this with its
portfolio of leading brands, individually strong
market positions and generally scalable
business model.
We aim to continue to deliver profitable growth
by further monetising our portfolio of leading
online classifieds portals through systematic
price increases of our core classifieds products,
supported by a strong value proposition and
new features and products (including listings
promotions), the development of ancillary
services and selective bolt-on acquisitions and
in-market consolidation in the Group’s existing
markets and beyond.
3
STRATEGIC REPORT
Strategic Highlights continued
Strategic Highlights continued
STRATEGIC REPORT
Financial highlights
Operational highlights
2021: €32.2m
2021: €15.7m
2021: €42.3m
EBITDA1
2023: €29.1m
2022: €13.6m
2023: €45.3m
2022: €38.5m
Revenue
2023: €60.8m
2022: €51.0m
Adjusted
Operating profit1
2023: €46.0m
2022: Adjusted EBITDA1 €39.3m
2021: Adjusted EBITDA1 €33.0m
+19%
Operating profit +113%
+17%
+17%
EBITDA margin1 76%
Basic EPS 4.7
€
cents
Adjusted basic EPS1 7.7
€
cents
operating activities +41%
Cash conversion1 99%
2023: 76%
2022: Adjusted EBITDA margin1 77%
2021: Adjusted EBITDA margin1 78%
Cash generated from
2023: 4.7 € cents
2022: 0.22 € cents2
2023: 7.7 € cents
2022: 6.4 € cents
2023: €48.0m
2022: €34.1m
2021: (0.02) € cents
2021: 3.4 € cents
2021: €33.1m
2023: 99%
2022: 99%
2021: 100%
4
2023: 1.0x
2022: 1.7x
2021: 6.0x
Leverage3 1.0x
61.9m
Traffic4
2023: 61.9m
2022: 65.1m
2021: 69.2m
Lead vs closest competitor
5.6
8.6
Autoplius
CVbankas
Auto24
Aruodas
Skelbiu
KV + City24
in Estonia
20.7
19.3
16.4
29.2
2023
20225
20215
Cultural highlights
Total
CO2 emissions 45%
2023: 100
2022: 183
decrease by
the total amount of CO2 emissions includes Scope 1
and Scope 2 (market-based), tonnes of carbon dioxide
equivalent
Employee
engagement
more
than
95%
% of employees who are proud to be part of the BCG team
Gender
diversity 51% : 49%
2023: 51%:49%
2022: 51%:49%
2021: 49%:51%
female : male, as at 30 April each year
1 Alternative performance measure (see Note 5 to the consolidated financial
statements on pages 118 to 119).
2 Restated, see note 3 to the consolidated financial statements on pages 109 to
110 for further details.
3 See note 5 to the consolidated financial statements.
4 Note: there were changes in the cookie consent policy (general obligation to
consent with all cookies that are not strictly necessary for website operation)
and internet browsers policy of more strict control of 3rd party cookies on
websites. Both mentioned reasons result in loss of data collected by web
analytics services like Google Analytics.
5 Historical data was updated after Similarweb released an improved Mobile
Web algorithm and rerun historical data last August.
The Group's six strategic priorities are listed below:
1. Drive monetisation of core services
The Group is considered to be at an early monetisation
stage. The primary growth driver and focus of the Group
is to drive increased monetisation of its core services, by
increasing average revenue per B2C lister and average
revenue from each C2C lister. Increased monetisation can
take different forms, including pricing actions and product
and packaging development (including listing promotions)
enabling upsell and cross-sell.
How we measure progress
• Revenue
• C2C yield1
• B2C ARPU
2023 progress
We ended our year 20232 with the highest ever yearly
revenue in all four business units, exceeding the guidance
of c.15% growth for the Group. Group’s revenue grew 19% to
€60.8 million (2022: €51.0 million).
It was a very healthy growth from all four business lines,
underpinned by strength in the core business. The growth
came from B2C and C2C which are the core revenue streams
and together represent almost 90% of BCG revenue. B2C
and C2C revenue grew 21% and 25% respectively.
Before the start of the period reported on, we increased
the yield from C2C ads across all of our business units and
ended this year with the following growth in yield:
+7%
in Auto3
+14%
in Real Estate
+51%
in Services4
+14%
in Generalist5
Improvements to our products and packages for B2C
customers towards the end of the first half of the period
reported supported price increases in our Auto, Real Estate
and Jobs & Services business lines and contributed to
revenue in the second half of the year. Monthly average
revenue per user (“ARPU”6) has grown:
+30%
in Auto
+22%
in Real Estate
+17%
in Jobs7
Associated risks
• Geopolitical risk
• Risk of disruption to our customer and / or supplier
operations
• Competition risk
• Laws & regulations risk
• Technology risks
2. Drive more listings and traffic across the Group’s portals
The Group will continue to leverage the existing strong
market positions of its portals, high brand recognition and
traffic to drive more listings and traffic across its portals.
As more listings are added, consumer audience traffic is
expected to increase, and the more traffic increases, the
more attractive the portals are, which again attracts more
listings. These network effects are expected to continue to
support more revenue growth through an increased income
from listing fees, subscription fees and other revenue
sources.
How we measure progress
• Audience lead versus closest competitor
• Traffic to our sites
2023 progress
During the last years, all our leading sites have either
increased or maintained their significant audience lead8
over the closest competitor. Leadership position in times
has remained very strong.
During 2023, the Group’s portals were visited on average
61.99 million times a month (Source: Google Analytics).
During the year 2022, it was 65.1 million monthly visits on
average.
Associated risks
• Geopolitical risk
• Risk of disruption to our customer and / or supplier
operations
• Competition risk
• Laws & regulations risk
1 "Yield" refers to the change in average monthly revenue per active (Auto or Real Estate) or listed (Generalist) C2C listing.
2 "2023" means the financial year (12 months) ended 30 April 2023, "2022" means the financial year ended 30 April 2022, "2021" means the financial year ended 30 April 2021.
3-7 See Financial review section.
8 Audience lead. Leadership position based on time on site except for Auto24. Auto24 has no significant vertical competitor; the next relevant player is Generalist portal;
therefore, relative market share is calculated based on time on site proportion relating to the number of active automotive listings as at the end of the reported period.
9 Note: there were changes in the cookie consent policy (general obligation to consent with all cookies that are not strictly necessary for website operation) and internet
browsers policy of more strict control of 3rd party cookies on websites. Both mentioned reasons result in loss of data collected by web analytics services like Google
Analytics.
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Strategic Highlights continued
Strategic Highlights continued
STRATEGIC REPORT
3. Grow ancillary revenue through existing and new partnerships
5. Pursue strategic opportunities through acquisitions
In addition to increasing monetisation of the core classifieds
services, the Group aims to grow revenue by offering
ancillary products and services, with the overall objective of
enhancing the transaction journey of consumers and listers
in the Baltic markets.
How we measure progress
• Developments
•
Innovations
• Partnerships
2023 progress
Auto: In Lithuania we have a new strategic partner for
our private label car financing offering, also improved
our offering by introducing two more business packages
providing more choice to the advertisers.
In Estonia we have also introduced a new B2C package and
ad activation limit to improve both the customer experience
and monetisation.
We have also further developed a virtual telephone numbers
service for C2C customers in Lithuania as virtual numbers
strongly contribute to the personal data privacy and
marketing of the service.
Jobs & Services: We have introduced a salary estimating
tool which now provides comprehensive salary statistics
for over 100 popular job positions across different cities in
Lithuania.
On our newly acquired Services marketplace GetaPro in
Latvia, we implemented a subscription based monetisation
model which we also apply in Services portal Paslaugos in
Lithuania.
Generalist: On our biggest generalist in Lithuania, in
automotive and real estate categories we implemented
value-based pricing.
We have also implemented upgrades in relation to fraud
prevention by introducing a two-factor authentication for
the advertisers.
t More details in our Operational Review (pages 24 to 25).
Real Estate: We introduced a fourth B2C package targeting
premium real estate agents. We also made authentication
of our business clients mandatory to improve content
quality and customer experience.
Associated risks
• Competition risk
• Technology risks
4. Continuously improve the Group’s scalability and maintain high levels of
operational efficiency while making necessary investments
While the Group already demonstrates high operating
leverage, operational and cost efficiency, it is committed
to continue optimising costs and maintaining high cash
conversion. However, the commitment to a lean and
efficient organisation does not prevent the Group from
making strategic investments, for example in technology,
to maintain its market-leading position and strong value
proposition for listers and consumers, and to support the
sustainability of a growing organisation. The Group has
a robust process of assessing business areas requiring
investments, and a streamlined approach to
further
implementing
internal change, with recent examples
including the increased investment in the technology team
and additional security infrastructure.
How we measure progress
• EBITDA1 and margin, adjusted EBITDA1 and margin
• Operating profit and adjusted operating profit2
• Cash generated from operating activities
• Cash conversion3
• Basic EPS and adjusted basic EPS4
2023 progress
We ended our year 2023 with the highest ever yearly
profitability, exceeding the guidance.
This year there were no add-backs to our EBITDA. We
compare this year's EBITDA to last year's adjusted EBITDA
because both reflect core operating profit before D&A (95%
of D&A is amortisation of acquired intangible assets) and in
the last year’s case also one-time IPO-related costs. Despite
the still growing cost base relating to being a public listed
company, this year our EBITDA grew 17% to €46.0 million
(€39.3 million adjusted EBITDA in 2022).
We ended our year with 76% EBITDA margin (77% adjusted
EBITDA margin in 2022).
Adjusted operating profit5 grew 17% to €45.3 million (€38.5
million in 2022).
Reported operating profit more than doubled: we ended
our year with €29.1 when last year it was €13.6 million,
reflecting IPO related expenses.
Cash generated from operating activities, when adjusted
for IPO fees in 2022, grew 18% - from €40.5 million in 2022
to €48.0 million in 2023. Reported cash generated from
operating activities grew 41% from €34.1 million in 2022.
Cash conversion maintained at 99% (99% in 2022).
Basic EPS for 2023 was 4.7 € cents (2022: 0.2 € cents6).
Adjusted basic EPS7 was 7.7 € cents (2022: 6.4 € cents).
Associated risks
• Geopolitical risk
• Risk of disruption to our customer and / or supplier
operations
• Technology risks
• Laws & regulations risk
1-5, 7 See note 5 to the consolidated financial statements.
6 The Company has restated a 2022 deferred tax amount as set out in note 3 to the financial statements. The amount was a non-cash item and related to the IPO refinancing,
therefore in 2022 we were adjusting our performance measures for this item to present the adjusted operating business profitability. Accordingly, the adjustment has
no impact on the prior year consolidated net cash flow, normalised business profitability or consolidated statement of financial position. However, there is a €1.3 million
reduction on 2022 accounting profit.
One of the capital policy priorities is to continue considering
value-creating M&A opportunities.
The Group constantly evaluates its portfolio to optimise
value creation and is continuing pursuit of attractive
options for inorganic growth, particularly through bolt-on
acquisitions and in-market consolidation within the Group’s
existing markets, and potentially new markets outside of
the Baltics with a strong focus on similarly high-quality,
market-leading businesses.
How we measure progress
• Filling in the “gaps” in the matrix of geographies and
business lines
2023 progress
In July 2022 a Group subsidiary, SIA City24, acquired certain
assets of SIA GetaPro ("GetaPro") as a business acquisition,
paying €1.6 million for it.
GetaPro is a Services classifieds portal operating in Latvia
and Estonia. We believe this acquisition will allow us to
increase our presence in the Services classifieds market in
the Baltics.
BCG also owns a Services vertical in Lithuania - Paslaugos.
lt - which almost doubled during the year. Therefore, the
acquisition of Services vertical GetaPro in Latvia and
Estonia, marked a strategic expansion of the fastest
growing segment into a new territory.
GetaPro business and strategy integration is progressing
well - now applying best practices from our existing Services
vertical in Lithuania.
Associated risks
• Acquisition risk
6. Promote circular economy and minimise our own impact on the environment
BCG is committed to being a responsible business and our
priority is to protect our people and continue to protect the
environment around us.
Climate change is treated as a Board-level governance
issue. The ESG working group that was formed in 2022
evidences our commitment to ensuring as a business we
keep progressing with our climate change agenda.
We are highly focused on providing a safe, happy, and
supportive working environment and we are continuously
looking for ways to improve internal communications to
ensure our employees stay connected and feel engaged.
How we measure progress
• Total CO2 emissions
• Employee engagement level
• Gender diversity
2023 progress
During 2023 we made progress in our net zero journey by
setting clear targets that will help us minimise our impact
on the environment. In addition to that, we submitted our
near-term targets to the Science Based Targets initiative
(SBTi) Business Ambition for 1.5°C. We have already made
steps towards our goal to become net zero:
• we reduced the total CO2 emissions
in direct
operations by 45% and
•
increased the portion of electricity used from
renewable sources from 63% to 73%, while
• emission-free electricity was increased from 66% to
87%.
During
the year we have conducted an employee
engagement survey and were pleased that more than 95%
of our employees answered YES to both questions
• “Do you feel proud to be part of the BCG team?” and
• “Would you recommend your friends to work here?”
We acknowledge the significance of gender diversity and
take pride in concluding the year with a nearly equal female-
to-male ratio of 51:49 (as of the end of 2022: 51:49).
Associated risks
• Climate change risk
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 STRATEGIC REPORT
Chair’s Statement continued
STRATEGIC REPORT
Chair’s Statement
“
I am delighted that our second year as a public company
has built on the previous year and continues to prove
that Baltic Classifieds Group is a highly profitable, high
growth business that continually achieves and frequently
exceeds the goals we set ourselves.
The Group has delivered its strongest ever
financial results with the outlook that we
set out in both our full and half year results
being exceeded.
Trevor Mather
Chair
Trevor Mather
Chair
Returns to Shareholders and dividends
Looking ahead
I continue to be enormously impressed by the progress
of BCG this year. We are still at a very early stage of our
monetisation journey and have a long and wide runway
for growth ahead. Whilst we are continually looking for
appropriate acquisitions to add to the Group, we believe
that by continuing to concentrate on the improvement and
monetisation of our core services we will continue to grow
both quickly and profitably.
Trevor Mather
Chair
28 June 2023
The Board is confident in our ability to continue our capital
policy that we initiated at the start of this year, returning all
of our surplus cash to shareholders, through a combination
of paying dividends, reducing the gross debt and share
buybacks.
I am delighted to report that the leverage of the Group has
now dipped below 1.0x net leverage (2.75x leverage at IPO)
demonstrating very high cash generation capability of the
Company. This has been done despite making our first small
acquisition after the IPO. As announced in the 2022 Annual
Report, we initiated a share buy-back program during the
year with the purpose of returning cash to Shareholders.
We are recommending a final dividend of 1.7 € cents per
share for 2023. The final dividend will be paid, subject to
Shareholder approval, on 13 October 2023. More details on
our capital policy can be found in the Financial review on
page 23.
The picture shows a "wolficorn" – a gift received from Vilnius municipality after
becoming the third official unicorn (a campany that is vallued over $1 billion)
in Lithuania (source: Dealroom). The "wolficorn" is a reference to a unicorn and
the symbol of Vilnius - iron wolf.
Overview
After our listing in the Premium Segment of the London
Stock Exchange in July 2021, the most important thing
we can do for the first few years of operating as a public
company, is to develop a track record of delivering on our
promises we made at IPO and the expectations we set at
our results presentations. I am delighted that our second
year as a public company has built on the previous year and
continues to prove that Baltic Classifieds Group is a highly
profitable, high growth business that continually achieves
and frequently exceeds the goals we set ourselves. Even
more so that the Company has done so in the face of almost
unprecedented uncertain macroeconomic conditions.
The year can be characterised as relentlessly focusing on
our core business. Ensuring that our lead over competing
portals is maintained, or in many cases extended, by
driving more listings and more traffic across each of the
Group’s portals. And by driving monetisation of our core
services through a variety of pricing, packaging and product
improvements.
This has enabled the Group to deliver its strongest ever
financial results with the outlook that we set out in both our
full and half year results being exceeded.
Employees
The Group is led by a deeply knowledgeable management
team, both at the Group level and the individual Portal level,
who are passionate, dedicated and committed to building
a long-lasting culture of rapid decision making, lean
operations, trust and fun. We completed our first employee
engagement survey this year and we believe this culture
has led directly to over 95% of our employees saying they
are proud to work at BCG. And that it directly leads to such
a high average tenure of 8 years, which is remarkable in
such a technology driven company.
We are proud of our employees and know the strength
they bring to our organisation. On behalf of the Board,
I want to thank all of our employees for their remarkable
contribution and dedication this year, and for serving both
our consumers and customers so well.
Board
On 17 May 2022, Jurgita Kirvaitienė joined the Board as an
Independent Non-Executive Director and all of the Board
Committees. Her 18 years of experience at PwC where she
served on the Management Board in Lithuania and on other
boards will bolster the finance and operational experience
on the Board. With this appointment we have brought all
our Committees into full compliance with the UK Corporate
Governance Code 2018.
During the year, the Board participated in its first external
Board Effectiveness Review, a process which, whilst
identifying a number of improvements we will take action
on, reinforced our belief that a small Board consisting
of very diverse backgrounds but with a set of consistent
values is the most effective for BCG. Accordingly, whilst we
anticipate that we will add to the Board over the next year or
two, we will do so in a very considered fashion with culture
fit, diversity and succession timing at the top of the list of
priorities.
Environmental, Social and Governance
There are some important differences that come with a
business listed in the UK with operations purely in the
Baltics region, so we do sometimes have to look at matters
such as diversity or remuneration through a different lens.
However, we are committed to being a responsible business.
Our priority is to protect and support our people, customers,
Stakeholders and the environment around us. During the
year we approved a 6th strategic aim for the company
which is to “Promote circular economy and minimise our
own impact on the environment”. This strategic aim is very
much at the heart of the work of the ESG working group.
During the year we submitted our near term targets to the
Based Targets initiative (SBTi) Business Ambition for 1.5°C
and reduced our total emissions from direct operations by
45%, exceeding the target required by the SBTi to reduce our
emissions across Scope 1 and 2 by at least 42% by 2030.
Our other near term targets involve making our company
fleet ultra-low emission by 2028 and
increasing the
percentage of electricity derived from renewable sources to
80% by 2025 and 100% by 2030. We are also committed to
achieving net zero by 2050.
Our charitable programme continues to evolve and we’re
pleased to have been able to donate €0.3 million since the
beginning of invasion to go in some small part to support the
struggle of the Ukraine and we have continued to develop a
number of mechanisms through our portals to ease the pain
for a Ukrainian refugee arriving in the Baltic regions.
Non-Executive Director Jurgita and myself sponsor the ESG
working group that is the driver of ESG initiatives and a
main tool for the Board to oversee progress in this area. The
Board recognises that there is always more to do but we are
unified in our approach to do so.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023 STRATEGIC REPORT
CEO’s Statement
“
This has been yet another very successful year
for BCG and a record year in terms of financial
performance.
Justinas Šimkus
CEO
STRATEGIC REPORT
I was delighted to see that the strongest growth came
from the core classifieds revenue streams of B2C and
C2C which represent close to 90% of BCG revenue share.
C2C performance is of particular note as it grew the most
at +25% year on year supported by both volume and
ARPA growth. We saw a recovery in C2C volumes due to
normalised selling period as well as an extraordinary growth
in Services. B2C growth was also very significant at +21%
year on year, driven by Auto at +33% and Real Estate at
+23% year on year.
During the year, we implemented successful pricing and
packaging changes across all of our business units, in
C2C and B2C. The excellent results achieved this year
have provided ongoing momentum moving us into the next
financial year.
• On average, a resident in the Baltics visits one of our
sites 11 times every month.
• Our site leadership positions1 are as strong as ever
for all of our largest sites: Autoplius at 5.6x (4.4x in
2022), Auto24 at 29.2x (34.8x in 2022), Aruodas at
20.7x (20.7x in 2022), Skelbiu at 19.3x (14.8x in 2022),
KV plus City24 in Estonia at 16.4x (13.1x in 2022) and
CVBankas at 8.6x (8.9x in 2022).
• We have more automotive dealers (+3%) utilising our
sites to advertise than ever before.
• The number of real estate brokers is stable and there
are slightly fewer customers in Jobs, noting that last
year was a record year (-4% but +42% compared with
2 years ago).
•
In all business lines we saw more active C2C ads: in
Auto +24%, Real Estate +14%, Services +24%. Listings
on our Generalist platforms grew 4%.
• The combination of increased prices of goods and
services being advertised on our sites, normalised
speed of sale and changes to our packages has led to
increased yields across all business units and in both
the B2C and C2C segments.
Market context
Similarly to other countries around the world, the Baltics
economies face high inflation. This results in higher real
estate and automotive prices, increasing the commission
pool of our customers which in turn, is supportive to our
Company’s growth, whilst being part of the Eurozone
secures our Shareholders' investment.
• Supply chain issues are easing. The number of used
car market transactions in the last 12 months was
stable at 2% below last year level and 2% above the
level two years ago. The average price per used car
increased by 19% year on year while the speed of sales
has normalised. This has resulted in a 13% increase
in the number of days a vehicle is advertised, having
tailwind for stock of vehicles on our sites.
• Real estate transactions number has declined year
on year, mainly due to higher construction costs
and low supply in the primary market. Most of our
customers work with the secondary market and so the
commission pool remained healthy.
In terms of the team motivation, the results of a recent
employee engagement survey supported our view that
the team’s motivation is higher than ever. Over 95% of
employees stated that they are proud to be part of BCG and
would recommend BCG as a good place to work.
We are excited for what the next year will bring. We are
looking forward to our monetisation concept changes for
RE new development. Additionally, if the macro environment
is right, we anticipate that our successes this year will
repeat, including healthy growth of B2C and C2C both in
terms of volumes and ARPU and continued strong growth
in Services. With an engaged and highly experienced team,
focusing on continuing to deliver outstanding products and
services to our customers.
Justinas Šimkus
Chief Executive Officer
28 June 2023
• After an unprecedented growth
last year,
the
employment market has been very active this year.
Companies continue to face a substantial labour
shortage. The number of employers using Cvbankas.
lt decreased by 4% from the peak when it grew 47%
in 2022. Average salaries have grown by 13%, leading
to companies increasing their investment in employee
search and selection.
• More and more people are looking for services online
which results in rapid Services verticals growth in our
portfolio. We have 24% more service provider ads on
our platforms and the yield grew by half.
• Continuous growth of eCommerce activities results
in more and more transactions moving online. This
has helped the growth of our Generalist platforms and
ancillary products such as deliveries.
1 Leadership position based on time on site except for Auto24. Auto24 has no significant vertical competitor; the next relevant player is Generalist portal; therefore, relative
market share is calculated based on time on site proportion relating to the number of active automotive listings as at the end of the reported period. Historical data was
updated after Similarweb released an improved Mobile Web algorithm and rerun historical data last August.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023 STRATEGIC REPORT
Market Overview continued
STRATEGIC REPORT
Market Overview
Macroeconomic Overview
The Group operates in the Baltic region, with 69.7%, 28.3%
and 2.0% of the Group’s revenue for the financial year ended
30 April 2023 coming from Lithuania, Estonia, and Latvia,
respectively.
As a reminder, the Baltics joined the European Union in May
2004 and the eurozone in January 2011 (Estonia), January
2014 (Latvia) and January 2015 (Lithuania), all adopting the
euro as their currency. All three countries also joined NATO
in 2004 and the OECD in 2010 (Estonia), 2016 (Latvia) and
2018 (Lithuania).
The region has a strong credit profile with some of the
lowest gross public debt to GDP ratios in Europe, which
averaged 38.4% in Lithuania, 18.4% in Estonia and 40.8%
in Latvia in calendar year 2022, significantly below the
Euro area average of 92% (source: Skandinaviska Enskilda
Banken (SEB), May 2023).
The Baltics have a total population of 5.8 million (Lithuania:
2.6 million, Estonia: 1.3 million and Latvia: 1.8 million (source:
Wordometers, April 2023)) and a nominal aggregate gross
domestic product (“GDP”) of approximately €142.0 billion in
calendar year 2022 (Lithuania: €66.8 billion, Estonia: €36.2
billion and Latvia: €39.1 billion (source: Eurostat).
The region’s economy has demonstrated resilience and
ability to grow since the global financial crisis of 2008, with
real GDP per capita growing at a compound annual growth
rate (“CAGR”) of 4.9% in Lithuania, 3.6% in Estonia and 4.3%
in Latvia in the period from 2000 to 2022, compared to 1.1%
European Union (source: Eurostat).
The Baltic economies continue to demonstrate impressive
resilience to multiple adverse shocks that either happened
recently or are still happening: COVID-19 pandemics,
Russian invasion of Ukraine, energy and food price shocks,
high inflation and rising interest rates.
The Baltic economic growth
is being supported by
exceptionally low unemployment. With real GDP growth
of 1.9% in Lithuania, 2.8% in Latvia and negative growth of
(1.3)% in Estonia, the unemployment decreased to 5.9% in
Lithuania, 5.5% in Estonia and 6.9% in Latvia in calendar
year 2022 – on average staying below the Euro area average
of 6.7% (source: Skandinaviska Enskilda Banken (SEB), May
2023).
Real GDP per capita CAGR during calendar years 2000-2022
4.9%
4.3%
3.6%
3.8%
Lithuania
Latvia
Estonia
Poland
European Union
United Kingdom*
Germany
France
Spain
1.1%
1.0%
1.0%
0.6%
0.6%
Italy 0.1%
Unemployment level and yearly changes
of consumer prices and wages
4.6%
4.5%
3.3%
2.6%
8.4%
9.0%
9.0%
9.0%
5.4%
2.6%
2.0%
2.9%
1.5%
Consumer prices,
YoY change
18.9%
19.4%
17.3%
Lithuania
Estonia
Latvia
Euro area
10.5%
6.9%
11.8%
Wages,
YoY change
4.1%
8.8%
7.5%
4.5%
13.4%
10.7%
9.5%
8.5%
5.2%
8.2%
6.5%
8.1%
4.3%
7.1%
6.2%
7.6%
7.7%
5.9%
5.5%
6.9%
6.7%
6.9%
6.9%
7.1%
7.0%
6.8%
6.5%
6.6%
7.8%
Lithuania
Estonia
Latvia
Euro area
Unemployment
Lithuania
Estonia
Latvia
Euro area
2021
2022
2023F
2024F
2021
2022
2023F
2024F
2021
2022
2023F
2024F
During 2022 inflation peaked in the Baltics, as energy prices
have gone up much faster for consumers in the Baltics than
the rest of Europe, and is projected to ease in 2023. As a
result, consumer prices increased by 18.9% in Lithuania,
19.4% in Estonia and 17.3% in Latvia in 2022 (source:
Skandinaviska Enskilda Banken (SEB), May 2023). However,
it is forecasted to decrease to 9.0% in all Baltic countries
in 2023. In 2024, it is projected to further decline to 2.6%,
2.0% and 2.9% in Lithuania, Estonia and Latvia respectively
(source: Skandinaviska Enskilda Banken (SEB), May 2023).
Higher wage inflation is no news to the Baltics and is a part
of increasing prosperity of the region. Low unemployment
and high inflation supported even stronger wage growth.
In 2022 wages increased by 13.4% in Lithuania, 8.8% in
Estonia and 7.5% in Latvia (source: Skandinaviska Enskilda
Banken (SEB), May 2023)
The home ownership rates1 in Lithuania, Estonia and Latvia
are some of the highest in Europe: 89% (17% with mortgage
or loan2), 82% (28% with mortgage or loan) and 83% (14%
with mortgage or loan) respectively (source: Statista, 2021).
Accordingly, secondary market transactions in the region
are popular and account for the majority of real estate
transactions.
It is worth noting, the region presents an attractive business
environment, with each of Estonia, Latvia and Lithuania
ranked among the top countries in the world with respect
to ease of doing business: Lithuania #11, Estonia #18, and
Latvia #19 according to the World Bank’s Doing Business
2020 report, while also benefiting from one of the lowest
average labour costs in Europe (Eurostat, 2022). All three
countries also ranked among the top 20 countries globally
with respect to the economic freedom enjoyed in the
respective countries (Lithuania #12, Estonia #8, and Latvia
#16) (Source: Economic Freedom of the World Annual
Report, 2022).
Automotive market
Baltic Classifieds Group currently operates its Auto portals
in Lithuania and Estonia. During the last 12 months, ending
April 2023, there were 49.7 thousand new and 421.3
thousand used car transactions in the Lithuanian and
Estonian automotive market, including local used car sales
and imports of used cars, primarily from Western Europe.
Over the past 12 months, the Lithuanian and Estonian used
car markets have witnessed a normalisation in consumer
demand. After the pandemic-induced fluctuations, the
demand has been gradually returning to pre-COVID levels.
The persisting supply constraints in the Western Europe,
stemming from the new car market, have continued to
impact the Baltic used car industry. The German market,
which serves as the primary source of used car imports to
the Baltic countries, has maintained elevated prices, still
restricting the availability of vehicles.
These underlying causes have resulted in a 13% increase
in the time it takes to sell a used car than last year (source:
Company’s information). It remains lower in comparison to
the same period 2 years ago.
As a result, the used car market has demonstrated a
decrease of 5% in the last 12 months, while new car sales
remain stable with a 1% decrease. The aforementioned
effects have resulted in rebounding used car inventory
levels on our marketplaces.
With vehicle acquisition costs remaining elevated, the
average used car price has continued to grow by 19% in
the last 12 months to €11,174. Although used car prices
keep demonstrating upward tendencies, the rate has been
comparatively lower than that of the previous year. Growing
prices help increase dealers' commission pool and balance
a decline in sold vehicle volumes.
Number of transactions in Lithuania and Estonia
New vehicles
Used vehicles
400K
200K
0
€12K
€8K
€4K
€0
44.0
433.8
50.2
445.7
49.7
421.3
2021
2022
2023
Source: Regitra, Autotyrimai and Maanteeamet
Average used car price in Lithuania and Estonia
Average used vehicle price
7,253
2021
9,357
2022
11,174
2023
Source: Company information
*CAGR in the United Kingdom showed for the period of the calendar
years 2000-2019. Source: Eurostat
Source: Skandinaviska Enskilda Banken (SEB), May 2023
1 The home ownership rate measures the share of dwellings that were owner-occupied.
2 Share of the population who are owner-occupants with a mortgage or loan.
12
13
Baltic Classifieds Group PLC Annual Report and Accounts 2023 STRATEGIC REPORT
Market Overview continued
Market Overview continued
STRATEGIC REPORT
Real Estate Market
Generalist market
Jobs market
its
The Group currently operates online classifieds portals in
the Jobs & Services markets of Lithuania. During the last
12 months, ending April 2023, the Russian war in Ukraine,
escalating inflation, and heightened energy prices were
the main obstacles for the Lithuanian economy, and by
extension
labour market. Employer activity, which
has been on a rapid growth path, started decreasing with
calendar 2023. However, towards the end of the financial
year, the negative growth decelerated and almost reached
previous year levels. It is critical to highlight that, despite
these obstacles, the number of
job advertisements
remained significantly higher than pre-2022 levels. This
indicates that despite the current challenges, there was still
a strong demand for workers, revealing a persistent labour
shortage in the Lithuanian job market.
The average unemployment rate in Lithuania has decreased
from 7.1% to 5.9% in calendar year 2022, marking the lowest
level since 2008.
High competition among employers persists, however
jobseekers' activity is showing a promising rebound from the
post-pandemic stagnation. Over the last 12 months, there
has been a significant surge in applicants on CVbankas.lt,
with a 20% increase compared to the previous year.
Tight labour market and high inflation supported strong
wage growth, which for the fourth consecutive year
remained in double-digit territory in Lithuania. The average
gross wage in Lithuania has increased by 13% during
calendar year 2022. Growing wages support the trend of
higher investment in employee search and selection.
Average unemployment rate in Lithuania
during calendar years 2022, 2021, 2020
Average unemployment rate
8.5%
2020
7.1%
2021
5.9%
2022
Source: The Lithuanian Department of Statistics
Average monthly gross wage in Lithuania
during calendar years 2022, 2021, 2020
Average monthly gross wage
1,429
2020
1,579
2021
1,785
2022
Source: The Lithuanian Department of Statistics
8%
4%
0%
€2K
€1K
€0
The Group currently operates online classifieds portals in
the real estate markets of Lithuania, Estonia and Latvia.
During the last 12 months, ending April 2023, there were
218.6 thousand real estate transactions, consisting of 99.7
thousand residential and 118.9 thousand non residential
real estate and land transactions.
The total number of transactions was 19% lower in
2023 compared to 2022. The number of transactions of
apartments for sale in Vilnius, Riga and Tallinn decreased
14% in 2023, compared to 2022.
During the last 12 months, ending April 2023, the real
estate market in the Baltics was impacted by various
factors, including supply-chain disruptions and increased
costs of construction materials for new developments
(particularly in the first half of the year) since the beginning
of the war in Ukraine, increasing home loan interest rates
and expectations about the decrease of real estate prices.
Despite this, the real estate market remains active and
customers continue to show interest in buying or renting
real estate.
Furthermore, the average price per square metre of an
apartment for sale has increased by 17% on average across
Baltic capital cities in the calendar year 2022. This larger
commission pool benefits our customers and helps to
balance a drop in transaction volumes.
Number of transactions in Lithuania, Latvia and Estonia,
during financial years 2023, 2022, 2021
Number of transactions
300K
200K
100K
0
€2K
€1K
€0
249.5
2021
271.3
2022
218.6
2023
Source: State Enterprise Centre of Registers Lithuania,
Land Register Latvia, Land Board Estonia
Average real estate prices per square metre
based on apartment prices in Vilnius, Riga and Tallinn,
during calendar years 2022, 2021, 2020
Average real estate prices
1,698
2020
1,875
2021
2,194
2022
The Group currently operates Generalist portals in Lithuania
and Estonia. E-commerce growth in Lithuania and Estonia
was accelerated by COVID-19 pandemic limitations on
physical retail in calendar years 2020 and 2021. Customer
habits evolved to increasingly shopping online which
translated into a higher number of online buyers, sellers and
transactions.
The Lithuanian and Estonian e-commerce markets have,
combined, grown at approximately 21% CAGR between
calendar years 2016 and 2019, 37% between calendar
years 2019 and 2021, and 17% between calendar years
2021 and 2022 (retail value RSP (retail selling price),
source: Euromonitor). Growth in calendar year 2022 slowed
compared to pandemic years (calendar years 2020 and
2021), but still remained at a high level and kept supporting
the growth of our Generalist platforms and ancillary
products for example, deliveries.
Retail value RSP during calendar years 2016-2027,
excluding sales tax, current prices
Lithuania, €m
Estonia, €m
Total, €m
2016
2017
2018
2019
2020
2021
2022
2023E
2024E
2025E
2026E
2027E
317
382
469
542
712
996
1,086
1,289
1,396
1,489
1,562
1,626
417
516
628
753
734
898
1,097
1,296
1,057
1,770
1,434
2,430
1,748
2,834
2,054
3,342
2,278
3,674
2,473
3,962
2,642
4,203
2,801
4,427
Source: Swedbank (prices per square metre); State Enterprise Centre of Registers
Lithuania, Land Register Latvia, Land Board Estonia (number of transactions)
Source: Euromonitor (values updated as per Euromonitor data)
14
15
STRATEGIC REPORT
Our Business at a Glance continued
STRATEGIC REPORT
Our Business at a Glance
We love transactions!
BCG is proud to be the leading online classifieds group in
the Baltics, owning and operating 14 online portals across a
range of sectors and industries, as shown in the Our brands
section on the following page. Since last year, our portfolio
has been supplemented with Services portals in Latvia and
Estonia - GetaPro.lv and GetaPro.ee.
Based on the number of user visits and the number of
online listings across the Group portals, BCG is foremost in
the online classifieds market. In 2023, the Group’s portals
were visited on average 61.91 million times per month which
means that on average, a resident in the Baltics visited one
of our sites 11 times every month.
Our portals are amongst the most visited sites in Lithuania
and Estonia. The vast majority of the Group’s traffic is direct
traffic. A combination of direct and organic unpaid search
channels to our websites comprise 86% of the traffic. Very
little search traffic is paid and total Group advertising and
marketing expenses are below 2% from Group revenue.
We consider using our portals as one of the easiest and most
effective ways to reach those interested via advertising and,
therefore, to transact real estate, auto, and other items, as
well as job seeking, recruiting or locating a service provider.
Our business model
Our market position
Our success is the result of a proactive and consumer-
focused business model incorporating both vertical and
generalist online portals as illustrated in the table on the
following page.
Our brands include vertical portals which serve particular
industries and facilitate promotion, advertisement and
sales within specific sectors. These portals attract a high
proportion of loyal and returning business customers (B2C
listers who have a subscription-based contract). In addition,
it is also highly used by individual customers and the general
population (C2C listers carrying out one-off transactions),
enriching our portals with content that is both unique and
difficult to duplicate.
We also operate horizontal or generalist portals, such as
general marketplace, online auction and price comparison
websites, used by individual customers and the general
population.
The benefits of this combined-offer business model are:
• a
large choice for prospective consumers and
maximum possible audience;
• ability to cross-list between the vertical and generalist
portals widens reach, increases available content and
provides opportunity to divert traffic from Generalist
portals to higher monetising vertical portals; and
• strong brand awareness across a wide network.
1 Note: there were changes in the cookie consent policy (general obligation to
consent within the framework of data protection for all cookies that are not
necessary for technical reasons).
2 Leadership position based on time on site except for Auto24. Auto24 has
no significant vertical competitor; next relevant player is Generalist portal;
therefore, relative market share is calculated based on time on site proportion
relating to the number of active automotive listings as at the end of the reported
period.
3 Historical data was updated after Similarweb released an improved Mobile
Web algorithm and rerun historical data last August.
The Group’s portals attract a large and highly engaged
consumer audience.
As of 30 April 2023, the Group’s portals were among the
most visited websites in Lithuania and Estonia. According
to April 2023 ratings from SimilarWeb, (which also include
websites such as Facebook, Youtube, local news portals)
Skelbiu was the 5th, Autoplius - 8th, Auto24 - 10th, Aruodas -
16th, Osta - 19th in their respective countries.
Our overall portals leadership position2 compared to the
closest competitor (in times) has been maintained very strong:
Autoplius
CVbankas
Auto24
Aruodas
Skelbiu
KV + City24
in Estonia
0
5.6
8.6
29.2
20.7
19.3
16.4
10
2023
20
30
20223
20213
The Baltics benefit from high levels of digital adoption,
underpinned by internet access and 4G mobile penetration.
The percentage of the population using the internet at
home stands at 88% in Lithuania, 92% in Estonia and 91%
in Latvia (source: Statista, 2022 data). The region also
performs highly in the fastest public Wi-Fi global ranking
with Lithuania ranked 1st, Estonia 3rd and Latvia 15th (based
on 2020 calendar year data). High level of digitalisation
supports the Group’s business and operations and its ability
to effectively execute its growth strategy.
Our brands
Automotive
Real Estate
Jobs &
Services
Generalist
Lithuania
Estonia
Latvia
(Services)
(Jobs)
(Services)
(Services)
% of BCG revenue
for 2023
37% 25% 19% 19%
Our strategy
Our purpose and culture
Our successful business model, based on the combined
offer of vertical and generalist platforms, has been
supported by strategic decisions to ensure its sustainability.
These include:
•
investing in fit-for-purpose, long-term technology
capability – all technology is developed in-house
and on a portal-specific basis. This allows an agile
approach while ensuring shared components and
applications across the platforms. This investment
has resulted in a scalable infrastructure that is
capable of handling increasing levels of traffic;
• focusing on cash generation with excellent margins –
BCG’s market leader position and strong brand identity
allow a low marketing spend and the organisational
structure supports shared corporate functions and
minimal capital expenditure; and
• concentrating
on
recruitment
and
talent
retention – BCG prides itself on attracting a highly
skilled and efficient workforce. The Group’s core
HR objective is to attract high potential and highly
motivated employees and give them room to grow
and develop.
We love transactions!
BCG exists to connect consumers with listers and help
them transact more easily. The Board is satisfied that
the Group’s purpose, values and strategy are aligned with
its culture. Our governance framework, organisational
structure and culture contribute significantly to the delivery
of our business model and the support of our purpose.
To achieve our purpose, we are focused on the following
strategic goals:
• to enhance the transaction experience
• to provide the easiest solution for the sellers and
buyers to find each other
• to ensure simple way of advertising for our consumers
and listers
• to be the main solution for our consumers and listers
transaction needs
t See pages 58 to 60 for information on our Stakeholders
and our approach to engagement.
t See pages 26 to 45 for information on our approach to
t For our strategic aims see Moving our Strategy Forward
Sustainability.
on page 18.
16
17
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 STRATEGIC REPORT
STRATEGIC REPORT
Moving our Strategy Forward
Section 172(1) Statement
“Promoting the success of the Company for the
benefit of all its stakeholders”.
In discharging their duty this year, the Directors (both
individually and collectively, confirm that during the year
under review, it has acted to promote the long-term success
of the Company for the benefit of Shareholders, whilst
having due regard to the matters set out in section 172(1)
(a) to (f) of the Companies Act 2006 (“Section 172(1)”).
Companies Act 2006, Section 172(1)
“A director of a company must act in the way, he
considers, in good faith, would be most likely to
promote the success of the company for the benefit
of its members as a whole, and in doing so have
regard (amongst other matters) to the following
factors:
The Board of Baltics Classifieds Group PLC recognise all the
duties codified in law, which includes Section 172(1).
(a) the likely consequences of any decision in the
long term;
The Board has direct engagement principally with our
employees and Shareholders but is also kept fully apprised
of the material issues of other Stakeholders through the
Executive Directors, reports from other members of Senior
Management and external advisors.
Pages 58 to 60 outline the ways in which we have engaged
with key Stakeholders and focuses on the following key
areas:
• Who the key Stakeholders are and what we value most
about them
•
Issues that matter the most to each Stakeholder group
(b) the interests of the company’s employees;
(c) the need to foster the company’s business
relationships with suppliers, customers and
others;
(d) the impact of the company’s operations on
the community and the environment;
(e) the desirability of the company maintaining
a reputation for high standards of business
conduct; and
(f) the need to act fairly as between members of
• How the Board engages with and has oversight of
the company.”
those Stakeholder groups
• Principal Board decisions and how they tie into
Section 172(1) (a) to (f)
• Difficulties for the Board and considerations in making
these decisions
The Board considers ‘Principal Decisions’ to be those
decisions which entail significant long-term implications
and consequences for the Company and/or its Stakeholders
– to distinguish these from the normal, ordinary course
decision-making processes that the Board engages in.
n e w
During the year, the Board introduced changes to its Board
paper process which ensures that Stakeholders and
S172(1) considerations are explicitly discussed in each
Board meeting.
t The Board’s Principle Decisions can be found on pages
58 to 60.
t Statement of Engagement with Employees on page 94.
t Statement of Engagement with Suppliers, Customers
and others on page 94.
We love transactions!
Our priority
Our Strategic aims
We are committed to being a responsible business. Our
priority is to protect and support our people, customers,
Stakeholders and the environment around us.
Our Company values and behaviours
For more than a decade, our CEO Justinas Šimkus and COO
Simonas Orkinas and their long-standing team have built a
collection of market-leading businesses and strong brands.
Every day we connect buyers and sellers and facilitate
transactions from cars and real estate, job offers to services
and consumer goods from professional and private listers.
The digital marketplaces we operate promote trust, fairness
and efficiency.
The values and behaviours that we believe in are:
• Trustworthiness
• Entrepreneurship
• Less is more
• Getting things done
• Marketplace is our hobby
• Work is fun
Our Stakeholders
•
Investors
• Customers
• Employees
• Suppliers
• Regulatory bodies
• Environment and community
Responsible business and
Environment, Social and Governance
(“ESG”)
The Sustainable Development Goals (“SDGs”) (also known
as the Global Goals), were adopted by the United Nations
in 2015. Our approach to responsible business aligns quite
naturally with the goals and we have identified five that are
most material to our business and where we contribute the
most:
• Responsible consumption and production
• Climate action
• Gender equality
• Decent work and economic growth
• Peace, justice, and a strong institution
Our strategic delivery is based on six strategic aims.
• Drive monetisation of core services. Through various
means,
including pricing actions, product and
packaging development, enable upsell and cross-sell.
• Drive more listings and traffic across the Group’s
portals. Using our market position and brand
recognition to drive traffic and increase listings,
resulting in more revenue growth through listing fees,
subscriptions fees and other sources.
• Grow ancillary revenue through existing and new
partnerships. The offer of ancillary products and
services will grow revenue and also help achieve the
overarching objective of enhancing the transaction
journey for consumers and listers.
• Pursue strategic opportunities through acquisitions.
The Group constantly evaluates
its portfolio to
optimise value creation and will continue its pursuit
of attractive options for inorganic growth, particularly
through
in-market
acquisitions
consolidation within the Group’s existing markets, and
potentially new markets outside of the Baltics with a
strong focus on similarly high-quality, market-leading
businesses.
bolt-on
and
• Continuously improve the Group’s scalability and
maintain high levels of operational efficiency while
making necessary investments. While the Group
already demonstrates high operating leverage and
operational and cost efficiency, it is committed to
continue optimising costs and maintain high cash
conversion.
• Promote a circular economy and minimise our own
impact on the environment. Continue to promote a
circular economy and help customers to make more
sustainable choices using the services provided by
our portals, while at the same time minimising our
own impact on the environment.
t For more on our culture see pages 38 to 41.
t For more on Engagement with our Stakeholders see
pages 58 to 60.
t For more on our ESG see pages 26 to 45.
18
19
Baltic Classifieds Group PLC Annual Report and Accounts 2023 STRATEGIC REPORT
Financial Review continued
STRATEGIC REPORT
Financial Review
“
We have delivered a robust set of financial results
this year, and in terms of revenue and profitability, we
are now a 40% larger entity compared to our IPO.
Lina Mačienė
CFO
Revenue
Group’s revenue grew 19% to €60.8 million (2022: €51.0
million).
It was a very healthy growth in all four business lines,
underpinned by strength in the core business:
• Auto business line grew 22%
• Real Estate business line grew 21%
• Jobs & Services business line grew 20%
• Generalist business line grew 13%
The growth came from the core classifieds revenue streams
- B2C and C2C - which represent 88% of BCG revenue. B2C
and C2C revenue grew 21% and 25% respectively.
Most of the percentage increase represents underlying
organic growth in revenue. A small part of the growth reflects
some disruption in the H2 2022, when due to the Russian
invasion of Ukraine the internet population was focused on
reading the news rather than shopping online / searching
for a property or a car, as we estimate that we lost around
1% of growth last year. This was an immediate and short-
term impact on revenue which bounced back in a few weeks
to pre-war levels and our normal run-rate.
The main drivers of revenue growth were an increase in the
number of advertisements/active C2C listings across all
our business sectors, an increasing number of advertisers
across our business sectors except Jobs and an increase
in the average spend per customer/advertisement across
all our businesses.
In April 2022, shortly before the period currently reported
on, we introduced C2C price changes for most of our
portals, reflected in the reported revenue numbers. In
September and October 2022, we introduced B2C price
and package changes for the Real Estate, Auto and Jobs
portals, reflecting improvements to our proposition. These
contributed to the second half of the year in both Real Estate
and Auto business lines and in Jobs, since the majority of
our contracts are year-long, it is rolling out throughout 12
months.
We continue seeing strengthening network effects across
all business units as a growing number of customers drive
content, which in turn encourages greater engagement for
our audience.
The number of B2C customers was stable:
• Automotive dealers grew by 3% (from 3,489 in 2022 to
3,586 in 2023) mainly due to small dealers switching to
B2C subscriptions rather than placing advertisements
as if they were C2C customers.
• Real Estate brokers grew marginally from 4,855 in
2022 to 4,877 in 2023.
• Jobs number of customers was 4% lower compared to
a year ago, but by 42% higher than 2 years ago (1,521
in 2021, 2,243 in 2022 and 2,162 in 2023).
In C2C, the number of active ads and listings grew across
all business lines. In Real Estate, Auto and Generalist the
growth was primarily driven by the underlying market
conditions, i.e. longer selling time (which means each advert
is active for more time). The growth in Services active ads
number was driven by the growing client base using our
platform and the recent acquisition of GetaPro.
Revenue by business line
+19%
+21%
+13%
+20%
2023
2022
+22%
€70m
€60m
€50m
€40m
€30m
€20m
€10m
€0m
Auto
Real
Estate
Generalist
Jobs &
Services
Total
Revenue
B2C - Number of Dealers/Brokers/Customers by business line
C2C - Number of Active Ads/Listings by business line
+0%
+3%
2023
2022
(4)%
Auto
No. of Dealers
Real Estate
No. of Brokers
Jobs1
No. of Customers
B2C - ARPU5
+17%
2023
2022
+30%
+22%
5K
4K
3K
2K
1K
0
€400
€300
€200
€100
€0
+4%
2023
2022
24%
+14%
+24%
Auto
No. of
Active Ads2
Real Estate
No. of
Active Ads
Services3
No. of
Active Ads
Generalist4
No. of
Listings
C2C - Revenue per Ad/Listing
+14%
+51%
+7%
2023
2022
+14%
100K
80K
60K
40K
20K
0
€25
€20
€15
€10
€5
€0
Auto
ARPU
Real Estate
ARPU
Jobs1
ARPU
Auto
Monthly Rev.
per Ad2
Real Estate
Monthly Rev.
per Ad
Services3
Monthly Rev.
per Ad
Generalist4
Revenue per
Listing
In terms of ARPU in our B2C segment:
In terms of ARPU in our C2C segment:
• Auto ARPU was up 30% due to price and packaging
changes implemented mid-2022 (in September and
October 2021) and most recent price and packaging
changes done in mid-2023 (in September and October
2022). We expect further upside from the price
changes in the longer-term when inventory levels
recover in full, and dealers increase their packages.
• Real Estate ARPU was up 22% due to subscription
fee and packaging changes which took place mid-
2022 and mid-2023. The changes implemented from
September 2021 to January 2022 were aimed at
both growth in ARPU and incentivising customers
to choose individual and more premium accounts
for brokers. This year's annual pricing event was
implemented during September and October 2022 and
was rolled out during the period to January 2023.
• Jobs ARPU was up 17% due to increased prices.
Revenue-wise, our jobs portal CVbankas is 13% bigger
than it was a year ago and 130% bigger than it was
2 years ago. CVbankas, being the market leader,
is well-positioned to take advantage of a vibrant
employment market with low unemployment rates,
ensuring continued revenue growth. Increased prices
were implemented on new and renewing customers in
September 2021 and were rolling out to the customers
through the 12-month cycle until Autumn this year.
This year the new prices were introduced in September
2022 and like last year are rolling out to the customers
through the 12-month cycle.
• Auto
average monthly
active
advertisement was up 7% due to price changes and
rising average transaction values (the average car
price on our portals grew 19%).
revenue
per
• Real Estate average monthly revenue per active
advertisement was up 14% due to price changes and
rising average transaction values (apartment prices
per square metre in Baltic capitals have increased by
17%6).
• Services average monthly
revenue per active
advertisement was up 51% mainly due to price
changes and an increased usage of our value-added
services.
• Generalist average revenue per listing was up 14% due
to price changes, rising average transaction values
and the introduction of a value-based pricing in the
automotive and real estate categories.
Operating costs
The Group has operated in a higher inflation environment
for several years and average yearly inflation in calendar
2022 in the Baltics was 19%7. However, our costs represent
a relatively small proportion of our revenue and, due to
continued cost management, this did not significantly
affect our profitability.
The majority of our operating costs are people costs. Our
team grew from 127 FTEs in April 2022 to 134 FTEs in April
2023, including 5 GetaPro employees who joined BCG in
1 CVbankas.lt only.
2 The group presents the average monthly revenue per active C2C auto listing on the basis of the C2C revenue generated by auto listings only, excluding any C2C revenue
generated from vehicle parts, vehicles other than autos and other C2C listings.
3 Services include Paslaugos.lt and GetaPro.lv.
4 Skelbiu.lt only.
5 ARPU is the monthly average revenue per user (in Auto – per dealer, in Real Estate – per broker, in Jobs – per client).
6 Average apartment price change per square metre in Baltic capitals is calculated based on Swedbank Research & Macrobond data.
7 Swedbank Economic Outlook, April 2023: CPI (average annual %) in 2022: Lithuania 19.6, Estonia 17.3, Latvia 19.4.
20
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Financial Review continued
Financial Review continued
STRATEGIC REPORT
July 2022 with the GetaPro acquisition. Excluding one-off
costs from the comparative period, investment into our
people increased by 28% to €9.6 million (2022: €7.5 million).
We appreciate and invest in talent, therefore the majority of
the increase in people costs was driven by annual salary
reviews and the cost of a performance share plan (“PSP”) in
the amount of €1.6 million (2022: €0.6 million).
Other Group costs comprise marketing, IT and general
administrative expenses. We have supported several non-
governmental organisations (NGOs) assisting Ukraine and
Ukrainians fleeing the war in their country by donating €0.1
million (€0.2 million in 2022). This has not been treated as
an adjusting item.
Net finance expense
Our finance costs comprise mainly of interest costs (2%
margin plus Euribor until the 2022 annual results release on
the 7th of July 2022, reducing the margin to 1.75% since
then) in the amount of €2.6 million and the commitment
fees relating to the €10.0 million unsecured and undrawn
Revolving Credit Facility (“RCF”). Due to the IPO related one
off debt refinancing costs in the comparative period, there
is a significant decrease in reported net finance costs (from
€11.2 million in 2022 to €2.7 million in 2023).
Net debt and leverage
During 2023, €14.0 million of the existing debt has been
voluntarily repaid. Compared to the end of 2022, net debt1
was reduced by €21.1 million to €45.3 million (as at 30 April
2022: €66.4 million) with leverage1 at 1.0x (as at 30 April
2022: 1.7x).
€m, unless stated otherwise
30-Apr-23
30-Apr-22
Bank Loan principal amount
Customer credit balances2
Total Debt
Cash
Net Debt
Adjusted EBITDA LTM
(see note 5 to the consolidated
financial statements)
70.0
2.4
72.4
27.1
84.0
2.3
86.3
19.9
45.3
66.4
46.0
39.3
Leverage
1.0x
1.7x
Tax
The Group tax charge of €3.2 million (2022: €1.4 million3)
represented an effective tax rate of 12% (55% in 2022). The
Group tax charge is a net of:
• current tax expense of €4.9 million (2022: €3.1 million);
and
• change in deferred tax which is positive €1.8 million
and includes €1.4 million deferred tax from acquired
intangibles (2022: €1.7 million included €1.4 million
deferred tax from acquired intangibles).
€m, unless stated otherwise
Revenue
Operating cost excluding D&A
Add back: IPO related costs
(see note 5 to the consolidated financial statements)
EBITDA (non-IFRS)
EBITDA margin % (non-IFRS)
D&A
Add back: Amortisation of acquired intangibles
Operating Profit
Net finance costs
Add back: IPO related financing costs
(see note 5 to the consolidated financial statements)
Profit before tax
Income tax expense
Add back: Deferred tax impact of amortisation of
acquired intangibles
Net income (Profit for the period)
WANS, million
EPS, € cents
IFRS
Measures
2023
60.8
(14.8)
Adjusted
Measures
2023
60.8
(14.8)
IFRS
Measures
2022
51.0
(20.4)
46.0
76%
46.0
76%
30.5
60%
Adjusted
Measures
2022
51.0
(20.4)
8.8
39.3
77%
(17.0)
(17.0)
(16.9)
(16.9)
29.1
(2.7)
26.4
(3.2)
23.2
496.1
4.7
16.2
45.3
(2.7)
42.6
(3.2)
(1.4)
38.0
496.1
7.7
13.6
(11.2)
2.4
(1.4)4
1.14
488.5
0.24
16.1
38.5
(11.2)
6.7
34.1
(1.4)
(1.5)
31.2
488.5
6.4
IFRS
Measures
change
Adjusted
Measures
change
19%
19%
51%
17%
16% pts
(1% pts)
113%
17%
n.m.
25%
n.m.
22%
n.m.
20%
1 Alternative performance measure, see note 5 to the consolidated financial statements for more detail.
2 Customer credit balances relate to amounts held by customers in e-wallets and are included within trade and other payables as well as cash and cash equivalents.
3 The Company has restated a 2022 deferred tax amount as set out in note 3 to the financial statements. The amount was a non-cash item and related to the IPO
refinancing, therefore in 2022 we were adjusting our performance measures for this item to present the normalised operating business profitability. Accordingly, the
adjustment has no impact on the prior year consolidated net cash flow, adjusted business profitability or consolidated statement of financial position. However, there is
a €1.3 million reduction on 2022 accounting profit.
4 Restated, see note 3 for further details.
Profitability and Alternative
Performance Measures
The Group has identified certain Alternative Performance
Measures (“APMs”) that it believes provide additional
useful information on the performance of the Group. These
APMs are not defined within IFRS and are not considered
to be a substitute for, or superior to, IFRS measures. These
APMs may not be necessarily comparable to similarly titled
measures used by other companies.
Directors use these APMs alongside IFRS measures when
budgeting and planning, and when reviewing business
performance.
t For alternative performance measure descriptions
and reconciliation to IFRS measures, see note 5 to the
consolidated financial statements.
For clarity, since the IPO, where share-based payment
charges arise because of the operation of the Group’s post-
IPO Remuneration Policy, such as the PSP plan, these are
not treated as adjusting items.BCG intends to return one
third of adjusted net income each year via an interim and
final dividend. For this purpose, we show amortisation of
acquired intangibles and the tax effect on it together with
the adjusting items in the table above. Adjusted net income
grew 22% and reached €38.0 million (€31.2 million in 2022).
Profit for the period grew to €23.2 million (€1.1 million in
20221) due to the fact the comparative period was affected
by IPO related costs.
Operating profit and adjusted operating profit is used to
review business performance. Adjusted operating profit
grew 17% to €45.3 million (€38.5 million in 2022) and
reported operating profit more than doubled to €29.1 million
in the year 2023 (€13.6 million in 2022).
This year there were no add-backs to our EBITDA. We
compare this year's EBITDA to last year's adjusted EBITDA
because both reflect core operating profit before D&A (95%
of D&A is amortisation of acquired intangible assets) and
in the last year’s case also one-time IPO-related costs. Our
EBITDA grew 17% to €46.0 million (adjusted EBITDA in 2022
was €39.3 million).
The EBITDA margin was 76% despite growing public listed
company related costs, operating in a higher inflation
environment and our support to NGOs. Adjusted EBITDA
margin in 2022 was 77%.
Earnings per Share (“EPS”)
Basic EPS was 4.7 € cents based on the weighted average
number of shares during 2023 of 496,082,891. (0.2 € cents
for 20221 based on weighted average number of shares of
488,467,552).
Adjusted basic EPS for 2023 grew 20% and was 7.7 € cents
(6.4 € cents for 2022).
The dilution effect on EPS from the employee share
arrangements this year was minor.
Cash flow and cash conversion
Cash generated from operating activities grew 18% if we
adjust the comparatives with IPO fees paid (from €40.5
million in 2022 to €48.0 million in 2023). Reported cash
generated from operating activities grew 41% from €34.1
million in 2022.
Generated cash was used to reduce the loan liability by
partially paying down the debt. We also bought Company
shares to Employee Benefit Trust (“EBT”) for future
employee awards (the number of options granted in our
second year was 1.5 million shares).
Cash conversion2 maintained at 99%. 2022 cash conversion
was also 99%.
Capital allocation
In addition to operating purposes, the generated cash was
used to the below:
•
In July 2022 we acquired a Services vertical GetaPro
for €1.6 million.
• The first final dividend for the year ended 30 April 2022
of 1.4 € cents per share was paid on 14 October 2022,
totalling €7.0 million.
• For 2023, the Board has declared an interim dividend
of 0.8 € cents per share, which was paid on 25 January
2023, totalling €4.0 million.
• We reduced the loan liability by partially paying down
the debt in the amount of €14.0 million (2022: €14.0
million).
• We bought 1.5 million of Company shares (paying €2.8
million) to Employee Benefit Trust (“EBT”) for future
employee awards.
• Post-AGM we have started buying back Company
shares and by the end of the reporting period we had
bought 3.4 million of Company shares for cancellation
(paying €5.8 million for it).
We intend to use all the cash we generate in a year, within
that same year or shortly thereafter for the below:
• BCG intends to return one third of adjusted net income
each year via an interim and final dividend, split
approximately one third and two thirds, respectively.
If approved at the AGM, the final dividend for the year
2023 will be paid on 13 October 2023 to members on
the register on 8 September 2023.
• We will continue considering value-creating M&A
opportunities. All options for financing attractive
acquisition opportunities remain open, including using
cash, increasing our debt and even seeking additional
equity capital. However, using cash is the most likely
and this would most likely not affect dividends but
might reduce capacity for share buy-backs.
• We intend using a combination of share buy-backs
and debt repayment from the balance of cash.
We also intend to keep our capital policy under review and
may revise it from time to time.
Going concern
The Group generated significant cash from operations
during the period. As at 30 April 2023 the Group had drawn
none of the €10.0 million unsecured Revolving Credit
Facility (“RCF”) and had cash balances of €27.1 million. The
€10.0 million RCF is committed until July 2026.
Lina Mačienė
Chief Financial Officer
28 June 2023
1 The Company has restated a 2022 deferred tax amount as set out in note 3 to the financial statements. The amount was a non-cash item and related to the IPO
refinancing, therefore in 2022 we were adjusting our performance measures for this item to present the normalised operating business profitability. Accordingly, the
adjustment has no impact on the prior year consolidated net cash flow, adjusted business profitability or consolidated statement of financial position. However, there is
a €1.3 million reduction on 2022 accounting profit.
2 Alternative performance measure, see note 5 to the consolidated financial statements for more detail.
22
23
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023
STRATEGIC REPORT
STRATEGIC REPORT
Operational Review
“
Our second successful year as a public company
has passed. We continue to learn the nuances of
being a publicly listed company whilst continuing
to do what we do best – operating our business in
an entrepreneurial, agile, and pragmatic way.
Simonas Orkinas
COO
Our second successful year as a public company has
passed. We continue to learn the nuances of being a publicly
listed company whilst continuing to do what we do best
– operating our business in an entrepreneurial, agile, and
pragmatic way. At BCG we now operate a hybrid working
culture, a mix of office and remote working. We found this
method to be a healthy balance of working effectively and
being social, ultimately leading to a happy team.
In 2023, industries emerged from a substantial period of
pandemic restrictions, but entered a high inflation and a
growing interest rate environment. This created challenges
and opportunities for BCG. We have continued supporting
industries by continuously developing products and
features in all our business lines.
Let’s take a brief look at our key product developments in
2023 by business line:
Auto
We signed a contract with a new strategic partner for
our private label car financial intermediation offering on
Autoplius.lt. The new cooperation provides us with better
commercial conditions and higher growth possibilities as
well as a more integrated product development to improve
our offering towards end consumers.
We improved our B2C offering on Autoplius.lt by introducing
four packages for dealers to replace the existing two. This
provides customers with more choice on the services
and ad activation limits that suit their business. The
introduction of activation limits in dealer subscription plans
meant to improve monetisation of those clients that receive
more value due to higher stock turnover. This also improves
buyers' experience by limiting the number of relisted ads.
On Auto24.ee we introduced a new B2C package and
ad activation limit. Similarly to Autoplius.lt, the goal is to
improve monetisation and buyer experience. In addition, our
car financing product was upgraded to offer better terms
for car buyers and the car lease ceiling price was raised.
These developments broaden the addressable market. To
give more exposure to financing products, we provide the
option for buyers to search for a car by monthly payment
instead of a total price.
Real Estate
introduced a fourth B2C package on Aruodas.lt
We
following the“pay more - get more” principle. This package
is targeting premium agents who want to stand out, get
the best branding and maximum exposure of their ads. We
also made agent authentication mandatory. This way we
prevent multiple agents from using a single account which
translates into a higher content quality and better buyer
experience.
On both Aruodas.lt and KV.ee we introduced a new product
for real estate developers. New developments are presented
on a platform in a more prominent way, providing more
relevant information for buyers as well as more branding for
developers. A new monetisation model has been applied for
the product on a per-development basis.
We further developed a virtual telephone numbers service
for C2C customers on Aruodas.lt. Sellers are provided with
the logs of answered and missed calls enabling them to
manage phone leads more easily and maximise the value
our platform provides. Virtual numbers strongly contribute
to the privacy of personal data and the marketing of our
service.
Jobs & Services
On CVbankas.lt we introduced a salary estimator tool. This
new feature provides comprehensive salary statistics for
over 100 popular job positions across different cities in
Lithuania. Users can access various salary metrics such
as average and median salary expectations of jobseekers,
changes over a 6-month period, and average salaries
offered by employers.
To facilitate the usage of CVbankas.lt for big clients, we
developed role-based access management. Companies
can now create individual logins for their employees. This
allows employers to manage access to job ads and set
limits on the number of ads each employee can post, as well
as control the usage of the resumes' database.
On our newly acquired Services marketplace Getapro.lv we
implemented a subscription based monetisation model.
Our experience of operating a Services marketplace in
Lithuania shows that this is the best monetisation model
at the moment.
Generalist
On the Skelbiu.lt automotive and real estate categories
we implemented value-based pricing. This is the same
C2C pricing model as on verticals. This model maximises
revenue by utilising the price elasticity of sellers selling
items of very different value.
Several upgrades were implemented on Skelbiu.lt in the
fraud prevention and content quality areas. We introduced
two factor authentication for high risk logins and upgraded
moderation tool to
improve work automation of the
moderation team and minimise human errors.
We introduced packages for business customers on Osta.
ee. This step improves monetisation and helps to control
the amount of B2C content on the platform and prevents
C2C content from being flooded by B2C.
Aside from all the consumer facing developments,
substantial progress has been made ‘under the hood’. In
2023, we successfully tested disaster recovery plans for
our biggest Estonian websites. Websites were switched
to be served from a different datacenter in a different
geographical location. This development is very important
to ensure business continuity.
Simonas Orkinas
Chief Operating Officer
28 June 2023
24
25
Baltic Classifieds Group PLC Annual Report and Accounts 2023 STRATEGIC REPORT
Sustainability Report continued
STRATEGIC REPORT
Sustainability Report
Contents
Pages
Overview of our ESG strategy
• Alignment with wider global goals
26-27
Overview of our ESG
strategy
Overview of our ESG strategy BCG is committed to being
a responsible business and our priority is to protect our
people, support our customers and Stakeholders and
continue to protect the environment around us.
Our Environmental, Social and Governance (“ESG”) strategy
can be split into two main components:
•
being a sustainable business by limiting our impact
on the environment, providing a secure and diverse
workplace for our employees and ensuring strong
governance; and
• helping customers to make more sustainable choices
and encouraging a circular economy through four of
our business lines: Real Estate, Auto, Jobs & Services
and Generalist.
The Board has reviewed and approved BCG’s ESG strategy.
Our ESG working group makes sure we follow and continue
to evolve our strategy and make progress towards our
goals. We have expanded the ESG working group this year
to include two more employees and the group now consists
of five members, three Executive Directors and two other
employees. The Chair, together with Non-Executive Director
Jurgita Kirvaitiene, serve as sponsors to the ESG working
group and are actively involved in its activities. The Board
fully supports the initiatives of the ESG working group and
gives Board-level oversight on environmental, social and
governance issues to look over our progress in fulfilling our
ESG goals. For more information on the ESG working group,
see the TCFD Report on page 31.
Alignment with wider global goals
The Sustainable Development Goals (“SDGs”), also known
as the Global Goals, were adopted by the United Nations
in 2015 as a universal call to action to end poverty, protect
the planet, and ensure that by 2030 all people enjoy peace
and prosperity. Our approach to responsible business aligns
quite naturally with these goals and we have identified
five that are most material to our business and where we
contribute the most.
• ESG materiality assessment
• Our ESG progress during 2023
Environment
• Helping customers to make more
sustainable choices
• The Task Force on Climate-related Financial
Disclosures (“TCFD”) Report
• TCFD compliance statement and
disclosure index
• Sustainability governance
• Climate strategy - risks and
opportunities
• Climate-related risk management
27
27
28-29
30-37
30
31
31-34
34
• Energy and Greenhouse Gas Report
35-36
• Carbon neutrality
• Science Based Targets initiative
• Environmental targets
People and culture
• Culture and values
• Diversity and inclusion
• Talent attraction and retention
• Employee engagement and wellbeing
• Access and affordability
• Social and community issues
• Social targets
Governance and compliance
• Data security and privacy
• Compliance
• Governance targets
37
37
37
38
38
39
39
40
41
41
42
42-43
43
Sustainability Accounting Standards Board (SASB)
disclosure topics & accounting metrics
• Disclosure index
44
Non-financial and sustainability information statement
• Disclosure index
45
Gender
equality
Decent work and
economic growth
Responsible consumption
and production
We believe in the power of diversity to
establish a creative workplace. The Group
actively supports women choosing careers
in the technology industry. As of 30 April
2023, 51% of employees were female.
We are highly focused to provide a
safe, happy and supportive working
environment. The Group seeks to treat
all of its employees equally, regardless of
gender, age, disability, health, nationality,
ethnic origin, religion, political belief, gender
identity, family status or lifestyle, including
when evaluating performance and making
hiring and promotion decisions.
Many of the Group’s portals, by their
nature, play a key part in facilitating the
circular economy, in promoting the reuse
and repair of unwanted assets, whether
they be vehicles or vehicle parts traded
through our Auto portals, or used goods
traded through our Generalist portals.
Climate
action
Peace, justice, and a
strong institution
We seek to minimise the environmental impact of our business, that
is why we set a goal to become net zero by 2050. During 2023 we
made progress in our net zero journey by setting clear targets that will
help us minimise our impact on the environment. In addition to that,
we submitted our near-term targets to the Science Based Targets
initiative (SBTi) Business Ambition for 1.5°C. We have already made
steps towards our goal to become net zero: in 2023 we reduced our
total CO2 emissions in direct operations by 45% and increased the
portion of electricity used from renewable sources from 63% to 73%.
ESG materiality assessment
In order to have a successful sustainability strategy in the
long run, we decided to perform a materiality assessment
and identify the most material ESG topics for BCG. We
considered various topics raised by investors, ESG rating
agencies, Senior Management and employees to determine
the ESG issues relevant to our business and industry where
we may be able to have the biggest impact. We reviewed
We run our business in a responsible manner and being trustworthy
is one of our top priorities. We are committed to preventing slavery
and human trafficking, we require the highest standards of honesty
and integrity in all our business relationships, and we are committed
to supporting human rights through our compliance with national
laws and internal policies.
several ESG reporting frameworks and ultimately selected
the SASB Standards based on its industry-specific alignment
to what we believe are material ESG issues to BCG. The six
most material sustainability issues which were agreed by the
Board as focus areas for BCG are listed below, together with
other sustainability matters that we care about:
Environmental
• GHG Emissions
• Air Quality
• Energy Management
• Water & Wastewater
Management
Social
Governance
• Labor Practices
• Employee Health & Safety
• Employee Engagement, Diversity &
Inclusion
• Access & Affordability
• Human Rights & Community
Relations
• Customer Privacy
• Data Security
• Business Ethics
• Waste & Hazardous Materials
• Product Quality & Safety
• Competitive Behaviour
Management
• Ecological Impacts
• Physical Impacts of Climate
Change
• Customer Welfare
• Selling Practices & Product Labelling
• Product Design & Lifecycle
Management
• Business Model Resilience
• Supply Chain Management
• Materials Sourcing & Efficiency
• Management of the Legal &
Regulatory Environment
• Critical Incident Risk
Management
• Systemic Risk Management
Our ESG progress during 2023
Environmental
Social
Governance
• Set goals in our net zero journey
• Set our social goals
• Submitted our near term targets to
• Maintained our employee tenure
Science Based Targets initiative (SBTi)
Business Ambition for 1.5°C
• Materiality assessment for
sustainability completed
• Reduced our emissions by 45%
•
Increased the portion of electricity used
from renewable sources from 63% to
73%, while emission-free electricity was
increased from 66% to 87%
• Updated our ESG risk register
at 8 years
• Completed employee engagement
survey that showed that more
than 95% of employees are proud
to be a part of BCG team
• Maintained gender diversity with a
split of women/men: 51:49
• Set our governance and
compliance goals
• First SASB report completed
•
Introduced modifications to the
Whistle-Blowing Policy, including
the installation of a local inbox
for the office and communication
to staff about the option of
contacting the Audit Committee
Chair for whistle-blowing reasons
26
27
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Sustainability Report continued
Sustainability Report continued
STRATEGIC REPORT
Environment
Helping customers to
make more sustainable
choices
We take pride in the fact that many of the Group's portals,
whether they be used products traded via our Generalist
portals or automobiles or vehicle parts exchanged through
our Auto portals, play an important role in encouraging the
circular economy and the reuse and repair of undesirable
assets. As a result, they offer a green commerce channel
that allows consumers and businesses to become more
environmentally conscious while also preventing secondary
items from being disposed of, being recycled, or being put
out of use.
Additionally, the online nature of the transactions facilitated
by the Group and in particular the Jobs & Services portal,
which links local employees and service providers with
those in need of their services, all contribute to minimising
greenhouse gas ("GHG") emissions related to unnecessary
travel.
Real Estate
Generalist
In the Baltics, which have some of the highest home
ownership rates in Europe, residential real estate is a
significant industry. The Group's Real Estate online listings
portals play a vital role in the Baltic real estate market, which
enables us to significantly improve the real estate industry's
environmental performance. By enabling our consumers
to publish high quality photos, video tours, floor plans, and
property descriptions online, our Real Estate platforms
assist to decrease needless trips to estate agents' offices
and inappropriate houses.
We also continuously create new tools for our platforms to
assist clients in saving time and resources. At the moment,
many elements are incorporated into the advertisements
so that consumers may conserve resources and benefit
the environment. The ads provide the opportunity to verify
a location on a map, providing both a route and street view
option, in order to save wasted time and travel. Moreover, by
offering 3D tours and films to house buyers, our clients are
able to cut down on in-person viewings and travel-related
emissions.
Several of our Real Estate websites have included a function
that allows house seekers to check the typical heating
costs in a particular building, together with the energy
class and air quality, including information on ambient air
pollutants, nitrogen dioxide (NO2) and coarse particulate
matter (PM10).
Auto
We place a high priority on promoting environmentally
friendly new technologies and introducing cleaner, more
effective fuel kinds. To make it simpler for car consumers
to look for more ecologically friendly automobiles, our Auto
websites have made certain steps.
For electric cars ("EVs"), we have included extra fields like
range and battery capacity. Also, we add information on
emissions, the rate of the pollution levy, and fuel usage
to automobile advertisements. This makes it simple for
automobile purchasers to determine which models are
more ecologically friendly and to base their judgements on
that information.
In order to inform people about more environmentally
friendly car alternatives, we also produce a series of articles
for consumers on EVs and videos about the models that are
currently on the market.
Our online classifieds and marketplace portals not only
offer one of the best ways for consumers to advertise and
find goods and services across the Baltics, but they also
direct clients towards environmentally friendly options. By
purchasing used goods on our Generalist portals rather
than brand-new ones, whether it be a laptop or a bicycle,
fewer products need to be made and end up in landfills.
Also, we provide a platform for easy shipment of purchased
goods. Time, gasoline, and other resources are saved in this
way. All of this encourages a circular economy and results
in reduced GHG emissions and material waste.
Also, we enhanced the pets category by requiring more
specific
information about pets, such as the seller's
registration number and the pet's microchip number, and
we work with local authorities to promote ethical and pet-
friendly breeding. Based on this information, the buyer may
choose more wisely. He or she might decide to get a pet
from a recognized breeder to ensure that the animal was
bred responsibly.
The addition of a new category for rubbish collection
services is another enhancement that aids our clients in
making more environmentally friendly decisions. Rubbish
collection services can only be offered by
licensed
providers. It's conceivable that unlicensed suppliers harm
nature by discarding trash in a forest or another arbitrary
location. In order to control the content and combat illegal
rubbish collectors who seriously harm the environment, we
also work with local authorities.
Jobs & Services
Customers may locate the services they require online
through the Group's Jobs & Services websites, enabling
them to make more environmentally friendly decisions.
Online job searchers and recruiters may connect through
our Jobs site, and those in need of local employees' and
service providers' services can connect through Services
portals. This reduces GHG emissions brought on by
pointless travel. By including a remote interview tag on the
post, the employment portals encourage recruiters to set
up such interviews and let job searchers more easily locate
positions with a remote interview potential.
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The Task Force for Climate-Related Financial Disclosure
(“TCFD”) Report
TCFD compliance statement
We support the Task Force on Climate-related Financial
Disclosures (‘TCFD’) and its recommendations and are
committed to assessing the impacts of climate risks and
opportunities across our operations and supply chains.
This year we focused on evolving our sustainability targets
that are critical in our decarbonisation journey.
the
four overarching
The following material climate-related financial disclosures
are consistent with
thematic
recommendations, supported by the 11 recommended
disclosures.
the TCFD additional guidance
“Implementing the Recommendations of the Task Force on
Climate-related Financial Disclosures” (2021 TCFD Annex)
which was released in October 2021.)
(As per
TCFD disclosure index
The following table shows where recommended TCFD disclosures can be found:
TCFD recommended disclosure
Compliance
Governance
1. Describe the board’s oversight of climate-related risks
and opportunities
2. Describe management’s role in assessing and managing
climate-related risks and opportunities
Strategy
The Board’s oversight of climate-related
risks and
opportunities and Senior Management’s role in assessing
and managing climate-related risks and opportunities are
described in the Governance section of this TCFD Report.
3. Describe the climate-related risks and opportunities the
organisation has identified over the short, medium and
long-term
The material climate-related risks and opportunities and the
impact they may have on the Group have been identified and
are disclosed in the Strategy section of this TCFD Report.
4. Describe the
impact of climate-related risks and
opportunities on the organisation’s businesses, strategy
and financial planning
5. Describe the resilience of the organisation’s strategy,
taking into consideration different climate scenarios
The climate-related risks and opportunities were stress-
tested in three different climate scenarios and the resilience
of our strategy is described in the Strategy section of this
TCFD Report.
Risk Management
6. Describe the organisation’s processes for identifying
and assessing climate-related risks
7. Describe the organisation’s processes for managing
climate-related risks
8. Describe how processes for identifying, assessing and
managing climate-related risks are integrated into the
organisation’s overall risk management
The Group’s processes for identifying, assessing and
managing climate-related risks are described in the Risk
management section of this TCFD Report.
Climate-related risks are captured and documented in
the Group’s Risk Register in the same manner other risks
are documented. This process is described in the Risk
management section of this TCFD Report and the Risk
management section of the Strategic Report on pages 46
to 48.
Metrics and Targets
9. Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process
10. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
GHG emissions, and the related risks
11. Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets
Our environmental targets are described in the Climate-
related Targets section of this TCFD Report.
Scope 1 and 2 GHG emissions, energy consumption, water
consumption and information on electricity are disclosed in
the Energy and Greenhouse Gas Report on pages 35 to 36.
Sustainability governance
Board oversight and Senior Management’s role
The Board has overall responsibility for the Group’s
preparedness for adapting to climate change. To ensure
the Board has sufficient oversight of BCG’s sustainable
business strategy and performance, including climate-
related targets, the Board has assigned climate-related
responsibilities to the ESG working group.
The ESG working group was established in January 2022. In
2023 two more employees supplemented the ESG working
group and it now consists of the CEO, CFO, COO and two
other employees. The Chair, together with Non-Executive
Director Jurgita Kirvaitiene, are actively involved in ESG
activities and attend ESG working group meetings on
demand.
“
Areas of focus for the ESG working group in the next
financial year will be:
• tracking our progress against environmental targets;
• tracking the environmental impact by the Group,
including carbon emissions; and
• continuous monitoring and analysis of climate-related
risks and opportunities.
During the year ended 30 April 2023, the Board was regularly
issues facing the Group,
updated on climate-related
including the areas covered in the ESG group meetings.
At the February 2023 Board meeting, the Board reviewed
and approved the most material ESG focus areas for BCG.
At the April 2023 Board meeting, the Board received and
approved changes to climate change issues listed on the
Risk Register, approved BCG’s sustainability targets and a
new strategic sustainability aim.
Because of the business specifics, during the financial year
there were no other material changes to business activities
nor additional expenditure, acquisitions or divestitures
budgeted for the next year, regarding climate issues.
In 2023 two more employees
supplemented the ESG working group.
Climate strategy
During the Board meetings, the Board is updated on climate-
related risks and opportunities, environmental metrics,
including the Group’s carbon footprint, environmental
reporting obligations and progress towards our climate-
related goals.
During 2023, the ESG working group met five times. Also,
the ESG working group organised a discussion with
Senior Management to go through, discuss and to update
the ESG Risk Register, including climate-related risks
and opportunities. Portal managers as risk owners, are
responsible for assessing and managing climate-related
risks for their respective business areas. They follow and
prepare for new environmental regulations, changing
market tendencies and increasing customer environmental
awareness. The ESG working group is responsible for
assessing and managing climate-related risks that are
general to the Group and monitoring emerging regulatory
requirements.
“
The ESG working group met 5 times in
2023.
Climate-related areas which have been discussed by the
ESG working group during the year included:
• governance and strategy around climate-related
issues;
• climate-related target setting;
•
• environmental reporting.
impact on the environment by the Group; and
Climate-related risks and opportunities
Due to BCG’s business model, the Group operates in a low-
carbon environment, where the environmental impact of the
Group is low. However, the accelerating climate change may
have an impact on BCG’s business. The Group has updated
the list of physical and transition risks as well as climate-
related opportunities that may arise in the future.
Physical risks resulting from climate change can be
event driven or longer-term shifts in climate patterns.
Transitioning to a
lower-carbon economy may entail
extensive policy, legal, technology, and market changes to
address mitigation and adaptation requirements related to
climate change.
The Group considered climate-related physical and
transitional risks and opportunities that could potentially
arise during three different time horizons:
• Short term (now-2025)
• Medium term (2026-2035)
• Long term (2036-2050)
The Group also considered the risks and opportunities
across the four main business lines:
• Real Estate
• Auto
• Generalist
• Jobs & Services
Senior Management also discussed the potential impact
of the identified climate-related risks and opportunities
in relation to financial planning, business and strategy,
including impact on products and services, supply chain
and adaptation to climate change.
See the following tables where we discuss: physical risks,
transition risks, opportunities and time horizons in which
they are most likely to arise.
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Specific risk
Description of risk and its impact
Business line & Time horizon
Short term
Medium term
Long term
Physical risks
Increased severity of extreme
weather events
Increased severity of extreme weather events due to accelerating global warming
may disrupt commercial customers' behaviour, affect the availability of websites
and result in disruption to the provision of services from our service providers. These
consequences may lead to a decrease in revenue.
All business lines
Rising mean temperatures
Rising mean temperatures may result in heatwaves, which would increase cooling
costs in offices and data centres.
All business lines
Extreme variability in weather
patterns
Extreme weather patterns may increase heating costs in our offices in the winters and
cooling costs in our offices and data centres in the summers.
All business lines
Transitional risks
Internal combustion engine
vehicles ban
Internal combustion engine car ban in the Baltics may lead to reduced volume of ads.
The new law in the EU envisions a total ban on the sale of new diesel and gasoline
cars by 2035.
Higher taxation on transactions
of internal combustion engine
vehicles
Increasing the current taxation on transactions of internal combustion engine vehicles
may reduce the volume of adverts, which would result in lower revenue from the Auto
segment.
Auto
Auto
Consumers switching to
electric vehicles
If consumers shift to electric vehicles, we will have to tailor our business by adding
additional filters and features to improve the search and sales of electric vehicles.
Auto
New regulations reduce stock
on the market
If stock is reduced on the market due to increasing environmental regulations, the
volume of transactions and ads will decrease, leading to decrease in revenue from the
real estate segment.
Real Estate
In addition to that, if property detail reporting becomes more onerous for non-
professionals/privates due to increasing environmental regulations, the volume of ads
from privates may decrease, leading to decrease in revenue of real estate segment.
Opportunities
Opening of new market
segments, such as advertising
EV charging infrastructure
Increasing environmental regulations and awareness may create new market
segments, such as electric vehicle charging infrastructure. This would allow us to
develop and launch services in the Auto segment, for instance, integrating charging
station offerings into electric vehicle ads, which may result in higher revenue.
Introduction of yearly internal
combustion engine vehicle
ownership tax
While increasing the current taxation on transactions of internal combustion engine
vehicles may reduce the volume of ads, the introduction of yearly internal combustion
engine vehicle ownership tax may lead to willingness to switch to less polluting
vehicles which would result in higher volumes of ads on our platforms. This would
increase revenue in the Auto segment.
Auto
Auto
New environmental regulations
reduce mortgage availability
Reduced mortgage availability due to environmental regulations may decrease the
number of transactions and increase the length of ads being advertised, leading to
higher revenue in the Real Estate segment.
Real Estate
Increased cost of materials
Climate change and environmental regulations may result in increasing raw material
prices. Increased prices in the primary market may increase the activity in the
secondary market and consequently increase the number of ads and revenue in
Generalist portals.
Generalist
Increased climate awareness
Increased climate awareness and people shifting to a circular economy may increase
the activity in the secondary market and consequently increase the number of ads and
revenue in Generalist portals.
Generalist
Fulfilling environmental
reporting and sustainability
goals
Achieving our climate-related goals and being an environmentally responsible business
may lead to enhanced reputation with Shareholders, customers and investors, an
increase in share price and revenue. Improved investor relations may also result in
higher availability and lower cost of capital.
All business lines
Short term
Medium term
Long term
Climate scenarios
After the climate-related risks and opportunities were
identified and assessed, they were also stress-tested in the
selected three climate scenarios based on assumptions of
NGFS (Network for Greening the Financial System) climate
scenarios:
Orderly: this scenario assumes early, ambitious action to a
net zero CO2 emissions economy.
Disorderly: this scenario assumes action that is late,
disruptive, sudden and/or unanticipated.
Hot house world: this scenario assumes limited action leads
to a hot house world with significant global warming and, as
a result, strongly increased exposure to physical risks.
The assumptions of the scenarios are summarised in the
following table:
Scenario 1
"Orderly"
Scenario 2
"Disorderly"
Scenario 3
"Hot house world"
Policy action
Early policy action
Late policy action (from 2030)
No policy action
Transition
Smooth transition
Disruptive transition
Business as usual
Time horizons
Now-2025
2026-2035
2036-2050
Temperature
Global temperatures increase
to between 1.5-2 degrees
above pre-industrial levels
Global temperatures increase
to between 1.5-2 degrees
above pre-industrial levels
Global temperatures increase
to over 3 degrees above pre-
industrial levels
Sea level rise
Low
Low
High
Risks
Low physical and transition
risks
Higher transition risk
Higher physical risks
Estimated carbon
prices
Estimated range – $135-
$5,550 USD/tCO2e in 2030,
$245-$13,000 USD/tCO2e in
2050 (IPCC SR1.5)
Estimated range – $135-
$5,550 USD/tCO2e in 2030,
$245-$13,000 USD/tCO2e in
2050 (IPCC SR1.5)
Estimated range – $10-$200
USD/tCO2e in 2030, $45-$960
USD/tCO2e in 2050 (IPCC
SR1.5)
The financial impact on the Group’s financial planning was assessed by the Senior Management based on the Group’s past
experience. The financial impact is summarised in the following table:
Scenario 1
"Orderly"
Now-2025
Scenario 2
"Disorderly"
2026-2035
Scenario 3
"Hot house
world"
2036-2050
Type of risk /
opportunity
Physical risks
Transitional
risks
Specific risk / opportunity
Changing weather patterns and increased severity of extreme weather
events
Internal combustion engine vehicles ban
Higher taxation on transactions of internal combustion engine vehicles
Consumers switching to electric vehicles
New regulations reduce stock on the market
Opportunities
Opening of new market segments, such as advertising EV charging
infrastructure
Introduction of yearly internal combustion engine vehicle ownership tax
New environmental regulations reduce mortgage availability
Increased cost of materials
Increased climate awareness
Fulfilling environmental reporting and sustainability goals
Immaterial financial impact
Low financial impact
Medium financial impact
High financial impact
Catastrophic financial impact
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Climate-related risk management
The Board has overall responsibility for risk management
and the ESG working group is responsible for identifying,
analysing and agreeing the mitigation, transfer, acceptance
or control of climate-related risks.
We continually develop our capacity and capability to
manage risk and uncertainty to build and maintain long-term
resilience. Climate-related risks are identified, assessed and
managed according to our Risk Management framework
(page 46). Risks are assessed based on their likelihood and
potential impact with the combination of the two measures
defining the overall score of each risk so that they could be
rated. Climate-related risks are captured and documented in
the Group’s Risk Register, identifying the risk category, the
likelihood of the risk occurring, the impact if it does occur,
a specific owner, the risk trend and the mitigation plan for
each risk.
During 2023, we reviewed and updated the Group’s risk
register with climate-related risks and opportunities. These
risks and opportunities are disclosed in the Strategy section
of this Sustainability Report. Each member of the Senior
Management has endorsed the risk management framework
and, as risk owners, are responsible for assessing and
managing climate-related risks for their respective business
areas. The ESG working group is responsible for assessing
and managing climate-related risks that are general to the
Group and monitoring emerging regulatory requirements.
Senior Management has concluded that the climate-related
risks and opportunities could have an immaterial impact on
the Group’s revenues and costs in scenario “Orderly” and
immaterial or low impact in scenario “Disorderly”. Under
the scenario “Hot house world”, physical risks could have a
medium financial impact.
Given the “Hot house world” scenario assumptions,
Management believes that increased severity of extreme
weather events due to accelerating global warming may
have a medium financial impact on capital expenditures,
operating costs and revenues:
• extreme weather events may cause floodings in
the areas of our data centres, that would disrupt
the operation of our servers and temporarily affect
revenues, operating costs and capital expenditures;
• extreme weather events may disrupt the internet
connection and temporarily affect the availability of
our websites, leading to financial impact on revenues;
and
• extreme weather events may temporarily impact
commercial customers’ behaviour during such events,
leading to fewer new ads on our websites and a
decrease in revenue.
Management has considered the potential impact on
financial planning that may arise in the future. For the next
financial year, Management does not foresee any material
impact on the financial planning that may arise from
climate-related issues.
Given the uncertainty of the transition to a low-carbon
economy and the temperature increase limits achieved,
the results of the scenario analysis enable us to better
understand, build resilience and to prepare for the potential
worst case impacts of climate change. From our analysis
we know that transition risks could potentially be most
significant under Scenario 1 “Orderly” and Scenario 2
”Disorderly” though there are differences in their timings and
materiality of financial impacts. On the other hand, Scenario
3 “Hot house world” could have the biggest financial impact
due to the physical climate-related risks. To ensure we are
building long-term resilience as a business, we will use the
outputs of this phase of the TCFD programme to improve
our strategies and decision making.
The ESG working group will continue to monitor and analyse
climate-related risks with the oversight of the Board.
Energy and Greenhouse Gas Report
We recognise that businesses have a responsibility to protect the environment and understand the impact their operations have.
In order to better evaluate the impact our Company has on the environment we have started reporting GHG emissions.
The following table summarises the Group’s GHG emissions for this financial year.
Scope 1 direct emissions
Combustion of fuel and operation of
facilities
20231
43.7
20221
restated
48.6
Units
Tonnes CO2e
Scope 2 indirect emissions2
Purchased electricity, heating and cooling
(location-based)
151.4
324.3
Tonnes CO2e
Purchased electricity, heat and cooling
(market-based)
56.8
134.23
Tonnes CO2e
Scope 1 & 2 total CO2e (location-based)
Scope 1 & 2 total CO2e (market-based)
CO2e per employee4 (location based)
CO2e per million revenue5 (location-based)
CO2e per employee4 (market-based)
CO2e per million revenue5 (market-based)
195.1
100.5
372.9
182.83
Tonnes CO2e
Tonnes CO2e
1.5
3.2
0.8
1.7
3.0
7.3
1.5
3.6
Tonnes CO2e
Tonnes CO2e
Tonnes CO2e
Tonnes CO2e
Global energy consumption
670.6
692.8
MWh
Methodologies
Scope 1
The calculations of GHG emissions align with the UK
‘Environmental Reporting Guidelines:
Government’s
Including Streamlined Energy and Carbon Reporting
Guidance’. The GHG reporting period is aligned to this
financial reporting year. The methodology used to calculate
emissions is based on the financial consolidation approach,
as defined in the Greenhouse Gas Protocol, A Corporate
Accounting and Reporting Standard.
Direct emissions data have been converted into CO2
factors
equivalent using 2022 emission conversion
published by the Department for Environment, Food and
Rural Affairs (Defra) and the Department for Business,
Energy &
Industrial Strategy (BEIS) (2021 emission
conversion factors were used for emission calculations
location-based electricity emissions
in 2022). Indirect
data was converted into CO2 equivalent using conversion
factors published by The Joint Research Centre (JRC) - the
European Commission's science and knowledge service
(v. 2020) (v. 2018 was used for emission calculations in
2022). Indirect market-based electricity emissions data
was converted into CO2 equivalent using European Residual
Mixes 2022 published by Association of Issuing Bodies
(European Residual Mixes 2018 published by Association of
Issuing Bodies was used for emission calculations in 2022).
Scope 1 emissions cover natural gas combustion within
boilers and road fuel combustion within owned/leased
vehicles across all the Group companies. During 2023, we
reported road fuel combustion from 9 Company owned/
leased vehicles (2022 - 11 owned/leased vehicles).
Scope 2
Scope 2 emissions cover purchased electricity, heat and
cooling for own use across all the Group offices located in
Vilnius, Tallinn, Tartu and Riga, as well as electricity from
data centres falling under Scope 2. In accordance with the
UK Government’s
‘Environmental Reporting Guidelines:
Including Streamlined Energy and Carbon Reporting
Guidance’, location-based and market-based methods for
purchased electricity emissions were used. All electricity,
heat and cooling purchased was outside of the UK: in
Lithuania, Latvia, Estonia and Poland.
1 All emissions incurred by the Group were Global, there were no emissions incurred in the UK.
2 Including the electricity of data centres.
3 2022 amounts restarted after receiving green electricity certificates for 2022.
4 Carbon emissions divided by average number of FTEs during the year - 131 (2022 - 126).
5 Carbon emissions divided by revenue in millions - €60.8 million (2022 - €51.0 million).
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Intensity ratio
Emissions have also been calculated using an ‘intensity
metric’, which will enable the Group to monitor how well we
are controlling emissions on an annual basis, independent
of fluctuations in the levels of their activity. In respect of
Scope 1 and 2, our use of energy is driven by our people and
therefore we consider ‘Emissions per employee’ to be the
most suitable metric, based on the average number of FTEs
during the year. The emissions have also been calculated in
relation to our turnover – ‘Emissions per million revenue’,
which determines cost efficiency based on comparing
carbon emissions to overall business revenue. The
reduction in emissions helped us to decrease emissions per
employee to 0.8 tonnes of CO2e (2022: 1.5 tonnes of CO2e)
and emissions per million revenue to 1.7 tonnes of CO2e
(2022: 3.6 tonnes of CO2e).
Electricity consumption
The total electricity consumption in 2023, for Scope 2 was
363.0 MWh (2022 - 336.3 MWh). In 2023, we had no energy
supply agreements for which we were directly responsible.
However, we continuously lead a conversation with our
service providers to find possibilities to switch to more
sustainable energy. Towards the end of the year 2023 our
data centre in Poland started using 100% electricity from
renewable sources, while the office in Tallinn switched to
renewable electricity at the end of 2022.
We are proud to announce that we increased the amount
of renewable energy used in our offices and data centres to
73% from 63% in 2022. 49% of electricity used in our data
centres is from renewable energy (76% is emission-free)
and 98% of electricity used in our offices is from renewable
energy (98% is emission-free). 100% electricity used was
from the grid.
Energy efficiency
We are conscious of the energy consumption in our offices
and thus we try to make energy consumption as efficient
as possible. The year we moved into our Vilnius office we
installed smart lighting with motion detectors to keep the
light on only when employees are around. Also, during 2021
and 2022, we replaced the vast majority of our stationary
computers with newer and more efficient laptops that use
less energy for employees working both in offices and at
home.
Water
Our total water consumption during 2023 increased to 471
cubic metres due to a higher number of days of employees
working from the offices (2022 - 323 cubic metres). The
water usage is derived from our offices in Vilnius, Tallinn,
Tartu and Riga.
“
We are proud to announce that we increased the amount of
renewable energy used in our offices and data centres to 73%
from 63% in 2022. 49% of electricity used in our data centres
is from renewable energy (76% is emission-free) and 98% of
electricity used in our offices is from renewable energy
(98% is emission-free).
“
STRATEGIC REPORT
During the year we submitted our near
term targets to the Science Based
Targets initiative (SBTi). Because we
are using more renewable electricity
in our offices and data centres, we
were able to exceed the 42% target
and reduce our emissions in direct
operations by 45% during 2023.
Carbon neutrality
Last year we set a goal to be carbon neutral across our
direct operations and achieved it in 2023 and 2022 by
offsetting our carbon footprint through UNFCCC-certified
climate friendly projects that reduce, avoid or remove GHG
emissions from the atmosphere.
In collaboration with the United Nation Carbon offset
platform, we offset 106 tCO2e to neutralise our 2023 carbon
footprint, including our Scope 1, Scope 2 and additional 5%
of our total emissions. To achieve carbon neutrality across
scope 1 and 2 we have funded a wind park in Asia, which
contributes to the global effort of GHG emission reduction.
Science Based Targets initiative
During the year we submitted our near term target to the
Science Based Targets initiative (SBTi) Business Ambition
for 1.5°C, which was approved in June 2023. The targets
committed us to reduce our absolute emissions by at
least 42% by 2030. Because we are using more renewable
electricity in our offices and data centres, we were able
to exceed the target and reduce our emissions in direct
operations by 45% during 2023. Our other near term targets
involve making our company fleet ultra-low emission by
2028 and increasing the percentage of electricity derived
from renewable sources to 80% by 2025 and 100% by 2030,
which will allow us to further reduce our emissions.
Environmental targets
Target
Status
Description and progress towards our goals
Scope 1. All company vehicles to be
EV or ultra low emission by 2028
Initiated All new company vehicles will be EVs or ultra low emission vehicles (ULEVs),
emitting 75g/km emissions or less.
Scope 2. At least 80% electricity to
be from renewable energy sources
by 2025 and 100% by 2030
On track
73% of our Scope 2 electricity in 2023 is from renewable energy and 87% is
emission-free.
98% of electricity used in our offices is from renewable energy, 49% of
electricity used in our data centres is from renewable energy.
Reduce our emissions by at least
42% by 2030
Achieved We succeeded in meeting the Science Based Targets initiative's requirement
that we cut our absolute emissions by 42% from the base year of 2022.
Because we are using more renewable electricity in our offices and data
centres, we have reduced the amount of emissions. We can continue to cut
our emissions by increasing the amount of emission-free electricity and
moving to EVs.
To be carbon neutral1 across our
direct operations
Achieved We offset our Scope 1 and 2 emissions through environmental initiatives.
Net zero2 by 2050
On track We will reach net zero by 2050 by reducing our emissions by at least 90% and
neutralising any residual emissions.
1 Carbon neutrality is achieved by measures that companies take to remove carbon from the atmosphere and permanently store it to counterbalance the impact of
emissions that remain unabated (source: Science Based Targets initiative).
2 Setting corporate net-zero targets aligned with meeting societal climate goals means: (a) reducing scope 1, 2 and 3 emissions to zero or a residual level consistent with
reaching net-zero emissions at the global or sector level in eligible 1.5°C scenarios or sector pathways and (b) neutralising any residual emissions at the netzero target
date – and any GHG emissions released into the atmosphere thereafter (source: Science Based Targets initiative).
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People and culture
Culture and values
Our culture is a big part of our success story. Our people
are our superpower. Supported by our recent engagement
survey, we know that our employees also love working with
us. We're proud of the dedication, ambition and motivation
of our employees and we strive to create an inclusive
environment where everyone can feel listened to and are
supported in contributing to the long-term sustainable
success of the Group.
Diversity and inclusion
We are highly focused on providing a safe, happy, and
supportive working environment. For this reason, we do not
tolerate any discrimination related to gender, age, sexual
orientation, social status, disability, race, ethnicity, religion,
or personal beliefs in our workplace.
“
We are highly focused on providing a
safe, happy, and supportive working
environment.
The Group is committed to recruiting employees based
only on experience, competence, qualification, and the
right abilities for the position and seeks to provide equal
including, training,
opportunities to work conditions,
recruitment and redundancy, security, and equal pay.
Applications for employment by people with disabilities
are given full and fair consideration bearing in mind
the respective aptitudes and abilities of the applicant
concerned and our ability to make reasonable adjustments
to the role and the work environment. In the event of
existing employees becoming disabled, all reasonable
effort is made to ensure that appropriate training is given
and their employment within the Group continues. Training,
career development and promotion of a disabled person is,
as far as possible, identical to that of an able bodied person.
Trustworthiness
Entrepreneurship
Work is fun
Our
values
Less is more
Gender diversity
Marketplace
is our hobby
Getting
things done
The Group also believes in the power of diversity to establish
a creative workplace. The Group actively supports women
choosing careers in the technology industry.
The Board is keen to strengthen and maintain female
in senior roles and BCG has been a
representation
contributor to the FTSE Women Leaders Review, an
initiative which aims to increase female leadership within
the FTSE 350. We are proud to be acknowledged and ranked
as 18th of the best performers within the FTSE 250 and to
be number two within the technology sector of the FTSE
350 with 45% of women in leadership positions.
Ethnic diversity
BCG cares about creating a diverse and inclusive work
community. In order to better understand the ethnic
diversity across our workforce, this year we conducted
a diversity and inclusion survey which gave us a better
understanding of ethnicity across our workforce.
Given that national minorities are recognised in Lithuania,
Estonia and Latvia and the Office for National Statistics
states that Nationality is an aspect of ethnicity, this is the
distribution of our people across different ethnic groups
relevant to the Baltics. Please see the current ethnicity
distribution of total population in each of Lithuania, Latvia
and Estonia on page 74.
Talent attraction and retention
The competence and commitment of the Group’s employees
are important factors for the Group’s success. Our success
also depends on the ability to attract, train, motivate
and retain highly qualified individuals, whilst building
our corporate culture. The Group faces significant and
increasing competition for qualified personnel, including
those in information technology positions. The Group
has historically offered the Senior Management and key
employees investment opportunities in the Group in order to
attract and retain highly qualified individuals. As of 30 April
2023, we had an average of 8 years of tenure per employee
and average 14 years of tenure per Senior Management
employee.
Employee engagement and wellbeing
We are continuously looking for ways to improve internal
communications to ensure our employees stay connected
and feel engaged.
Currently we are still applying a hybrid working model in
some of our offices. Therefore, it is crucial for us to keep in
touch over virtual channels. Our employees use Skype, Zoom
and Slack applications for our internal communications and
these have proved to be great and efficiency improving
tools for people to communicate.
In addition, we organise different activities for employees
to stay connected. During the year, we introduced a games
night for employees every last Tuesday of the month.
We hold CEO-led virtual updates whenever we have news
for employees to ensure our people are updated on key
business activities, business performance or any strategic
changes.
In order to contribute to our employees' health and
wellbeing, the vast majority of our employees are awarded
with a healthcare plan scheme for employees’ medical
needs. Also, employees in our biggest offices in Lithuania
and Estonia are given a free yearly gym subscription.
To keep the Board informed on workforce related issues,
the CEO, CFO and COO provide updates at every Board
meeting which includes relevant workforce updates. This
engagement method is effective due to the management
structure of the Group. The Board is particularly hands-on,
engaged and committed to ensuring that it understands
the composition and views of employees. During the
year, designated Non-Executive Board members met with
employees where people could ask questions or express
relevant concerns. We are planning to hold these meetings
regularly.
Employee engagement survey
In order to get a better understanding of the current
employee morale, satisfaction, and engagement at BCG, we
conducted an employee engagement survey in 2023. We
welcome open and honest feedback from our employees
and will be conducting employee surveys on a regular basis.
Gender diversity of employees
49% 51%
65% 45%
All Employees
by Gender
Senior
Management by
Gender*
Male
Female
*Based on the figures for
the FTSE Women Leaders
Review 2022
t For gender figures for the Board and the Senior
Management see page 68
Ethnic diversity of employees
All Employees
by ethnicity*
Senior
Management by
ethnicity
Lithuanian 55%
Estonian 32%
Latvian 8%
Russian 2%
Polish 2%
Other 1%
*except Senior Management by ethnicity
Lithuanian 59%
Estonian 25%
Latvian 8%
Russian/Jewish 8%
Average Employee Tenure
8 years
14 years
Average tenure per
employee
Average tenure per
Senior Management
employee
Average Salary Increase
15%
2022
13%
2023
38
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We were pleased that in the 2023 survey more than 95% of
our employees answered YES to both questions: “Do you
feel proud to be part of the BCG team?” and “Would you
recommend your friends to work here?”.
“
In the 2023 survey more than 95% of our employees
answered YES to both questions: “Do you feel
proud to be part of the BCG team?” and “Would you
recommend your friends to work here?”.
Summary results were presented to the Board and were
made available to employees. The feedback from employees
enabled Senior Management to make the necessary
conclusions on the employee morale, satisfaction and
engagement, which will help to make positive improvement
in each of these areas.
Employee share incentive scheme
We want our employees to benefit directly from their
contribution to the Group’s success. The Group currently
operates a Performance Share Plan (“PSP”) that is subject
to service and performance conditions. The PSP scheme
consists of share options for Executive Directors and
certain key employees with a vesting period of three years.
The Group awarded 1,221,592 share options under the
PSP scheme in 2023 and 1,041,475 share options in 2022.
During 2023, the Group also granted a retention award in the
form of 244,318 share options to two new joiners as part of
GetaPro acquisition. These awards have a vesting period of
one year. For more information on PSP, see Remuneration
Committee Report on page 85.
t See more on the Employee share incentive scheme in the
Notes to the consolidated financial statements on pages
135 to 136.
Fair pay
Since we are operating in a highly competitive labour market
segment, it is crucial to us that our employees receive a
competitive salary for the work they perform. All employees
receive fair pay according to their qualification, level of
responsibility, work results, experience, and other objective
criteria. To make sure the salaries of our employees stay
competitive, they are reviewed yearly, taking into account
market data, the skill set and experience of employees. The
salaries on average increased by 13% during 2023 and 15%
during 2022.
As opposed to the UK, the Baltics lack a generally recognised
real living wage standard. However, all our employees are
paid significantly above the national minimum wage and we
are committed to paying a fair salary for all our employees.
Access and affordability
On average each resident in the Baltics visited BCG sites
11 times per month during 2023, making BCG the leading
online classifieds group in the Baltics. It is important for
us to ensure that the most needy parts of our society can
access affordable services on our site in a convenient and
free way.
Currently, the Group’s portals offer consumers free access
to search for a wide range of products and services listed
by B2C and C2C listers, portal-specific ancillary services,
such as financial intermediation and data services (such
as vehicle history and fraud checks on the Group’s Auto
portals, salary data per different job category on the Jobs
portal). Consumers can search the portal with or without
prior registration and have access to a large volume of
listings across the portals in numerous categories including
real estate, automotive, jobs (blue and white collar), home
furnishing, clothing, construction materials, agricultural
equipment and pets.
Our Generalist platforms allow private users to list general
items for sale entirely for free. Applying for a job on our Jobs
platform is also free of charge. Our vertical platforms offer
private users ad listing fees that relate to the value of the
item listed - as a result, people who list lower value items,
can list them for a significantly lower price. Searching for
an employee on our job portal varies by location, so it costs
less in smaller cities where the average salary is lower.
Social and community issues
Since the beginning of the war in Ukraine, the Group has
donated €0.3 million to support the struggle of Ukrainians.
€0.1 million was donated to the Red Cross and €0.1 million
was donated to a local non-government organisation
“Blue&Yellow” which provides nonlethal supplies to Ukraine.
An additional €0.1 million was donated to other initiatives,
that help civilians who are forced to leave their homeland
and flee from the war zone.
“
Since the beginning of the war in Ukraine
the Group has donated €0.3 million to
support the struggle of Ukrainians.
In addition to these donations, we try to ease the challenges
faced by Ukrainian refugees and the people of Ukraine in
any other ways that we can, especially because since the
start of the war, tens of thousands of Ukrainian refugees
have become part of our local communities in the Baltics.
Some of the developments done in order to ease the
challenges faced by Ukrainian refugees:
•
In order to make the accommodation search easier
for Ukrainians, our Real Estate portal Aruodas.lt has
implemented the label "Help for Ukrainians". This
label allows customers to advertise that they offer
more flexible conditions to refugees and also enables
Ukrainians to find the ads they need more easily.
• Due to the scarcity of housing available for rent, we took
a step further and organised promotional campaigns
for real estate owners to allocate their vacant houses
and apartments for the accommodation of Ukrainians,
if possible.
• Together with the legal consultancy, we prepared
an overview and basic recommendations for real
estate owners on renting houses and apartments
to Ukrainian refugees, integrated rental agreement
templates and translated them into English, Ukrainian
and Russian languages.
• Another
face
refugees
issue Ukrainian
in our
communities is finding jobs. We try to make it easier
for them by introducing a new feature in our Jobs
port - a label "Ukrainians are welcome" that employers
can add to their ads. The label means that for that
particular job position, Lithuanian language is not
necessary and it is suitable for refugees from Ukraine.
These ads can be filtered through job search which is
helpful for Ukrainians to find jobs more easily.
• Our Jobs portal CVbankas.lt was translated into
Ukrainian language so that site visitors may view
the portal’s content, including job ads information
in Ukrainian language. This makes job search even
easier. Applicants' resumes can also be created in
Ukrainian language.
• Our services portal Paslaugos.lt offers free placement
of ads for professional services offered by Ukrainians,
helping them to find clients in Lithuania and earn
money for the services provided.
• Another Service portal, Getapro.lv gives a €20 bonus
for each registered Ukrainian who has been verified
with Ukrainian ID.
• To help Ukrainian refugees find items needed for
settling in, we created a dedicated category "For
Ukraine" in our Generalist portal Skelbiu.lt. People can
list clothes, furniture, appliances or any other items
free of charge to give away for free.
• Our portal Osta.ee was also involved in a lot of charity
auctions during the year, where the portal users could
donate the total or a portion of the value of sold
items to helping Ukrainian refugees. In total, more
than €30 thousand were collected and sent to charity
organisations.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023
41
Social targets
Target
Status
Description and progress towards our goals
Maintain average employee tenure above 5
years
Achieved
In 2023 the average employee tenure was 8 years.
Maintain employee engagement above 90%
Achieved
In 2023 we conducted our first employee engagement survey
which showed that more than 95% of employees are proud
to work at BCG.
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Governance and compliance
Data security
Human rights
In order to ensure our portals are secure, we have
implemented technical measures, including distributed
denial-of-service (DDoS) protection, bot management and
strict firewall rules. All critical parts of the infrastructure are
secured from the public and our software is up-to-date with
critical security patches applied. We conduct penetration
testing and content moderation to ensure security and
mitigation of cyber crime risk.
Security incidents are detected via security tools such
internal monitoring systems.
as Cloudflare WAF and
Additionally, we
implement public media monitoring
and react to feedback from customers to ensure we are
proactive in dealing with cyber threats.
Data privacy
We are committed to ensuring that the personal information
we collect and use is appropriate for the purpose, does
not constitute an invasion of privacy and is held securely,
responsibly and transparently. We have adopted the EU and
UK Data Protection Act 2018 as our benchmark for data
protection. Where required, users have to consent with
our terms of services, Privacy Policy and Cookies consent
management platform.
To protect the personal data of the sellers who advertise
on our platforms we hide part of their contact data and
provide virtual numbers. In addition, all of our employees
and all Board members have been trained for GDPR. We are
planning to run additional training in autumn 2023.
In the summer of 2022, we introduced a Group-wide GDPR
policy covering all jurisdictions, rather than having separate
documents for each country. We intend to centralise
the most important processes and guarantee that the
fundamental rights and interests of each person are equally
secured and respected across the BCG Group.
BCG is committed to acting in an ethical manner with integrity
and transparency in all business dealings and to investing
in the creation of effective systems and controls across the
Group to safeguard against adverse human rights impacts.
BCG’s policy is to engage only with suppliers who meet our
ethical standards. Potential suppliers are assessed based
on their geographical location, nature of services provided
and their reputation. We safeguard our employees through
a framework of policies and statements including Modern
Slavery, Whistle-Blowing, Privacy, Document Retention and
GDPR policies.
Modern slavery
We are committed to addressing the potential risks of
modern slavery and human rights abuses within the Group
and in its supply chain and we will take steps to review
and, where appropriate, further improve our processes to
ensure that we mitigate these risks appropriately. Should
any instances of modern slavery be identified, we believe
the Group is well positioned to deal with and address these.
Anti-bribery and anti-corruption
The Group has an employee handbook to ensure a
consistent standard of behaviour across the Group which
includes its Mission Statement and Values and an Anti-
Bribery and Corruption Policy (among other policies). All
employees and Board members are trained to identify and
avoid the risks related to corruption and bribery.
“
We introduced a Group-wide GDPR policy
covering all jurisdictions, rather than having
separate documents for each country.
Whistle-blowing
Competitive behaviour
BCG competes in highly competitive markets with low
entry barriers. Due to rapid technological change, evolving
industry standards and changing needs and preferences
of customers and users, the competitive landscape is
extremely dynamic. Our portals face intense competition
from both traditional and new online classified portals such
as Facebook Marketplace and Linkedin.
We also put a strong focus on compliance with competition
laws. Our pricing strategy
includes the assessment
of whether the planned pricing is fair and reflects the
economic value of the product offered. This was once
verified by the competent authorities in Lithuania, whereby
Group real-estate portal was accused of adopting unfair
prices. Lithuanian Competition Council and later the court
confirmed that prices were fair compared to selected
benchmarks. It gives the credibility to assess the pricing
limits and the legality of the planned actions.
BCG has adopted a Group-wide Whistle-Blowing Policy
designed to provide our employees with an effective and
available mechanism to help prevent malpractice occurring
across our working environment, which includes a way for
employees to raise their concerns anonymously.
Employees can express a problem via a local inbox set up in
the office, their manager, the Executive Team, or the General
Counsel if they have any. An employee can get in touch
with the Chair of the Audit Committee if they want to talk to
someone outside of BCG. Every effort will be made to keep
the identity of an individual who makes a disclosure under
this Policy confidential. All BCG employees have access to
all contact details and information on the whistle-blowing
procedure.
The CFO of Baltic Classifieds Group has Board
responsibility for monitoring and evaluating whistle-blowing
arrangements. The CFO will update the Audit Committee as
and when whistle-blowing concerns have been received,
the investigations completed and any actions arising as
a result. From time to time, the CFO will also review the
organisation’s whistle-blowing arrangements and ensure
they are subject to independent retrospective review. There
were no whistle-blowing reports made during the financial
year. The implementation and effectiveness of the Group’s
compliance function and policies is reviewed periodically by
the Audit Committee and is supported by periodic reviews
and risk assessments performed by the Group’s finance and
legal teams.
Governance targets
Target
Status
Description and progress towards our targets
Complying with tax, data protection, human
rights, bribery, corruption and other related
rules and regulations in Lithuania, Latvia and
Estonia
Achieved
BCG is committed to paying its fair share of tax. The Group’s
effective tax rate for 2023 was 12% (2022: 55%) with income
tax of €3.2m (2022: €1.4m).
We had no reportable data protection incidents or bribery
and corruption breaches during 2023 and 2022.
42
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Sustainability Accounting Standards Board (SASB)
disclosure topics & accounting metrics
Non-financial and sustainability information
statement
Disclosure index
Disclosure index
SASB standards enable businesses around the world to identify, manage and communicate financially material
sustainability information to their investors. The SASB standards are industry specific and identify the minimum set
of financially material sustainability topics and their associated metrics for the typical company in an industry. SASB
assigns BCG to the Internet & Media Services sector and the following disclosure sets out our progress according to the
SASB standard for that sector.
The table below summarises the recommended SASB disclosures. Where we have provided the information, the location
in the Annual Report is indicated below.
Topic
Accounting metric
Location
Environmental
footprint of hardware
infrastructure
• Total energy consumed
• Percentage grid electricity
• Percentage renewable
• Total water consumed
• Discussion of the integration of
environmental considerations into
strategic planning for data centre needs
• Total energy consumed, percentage grid
electricity and percentage renewable are
disclosed in the Greenhouse Gas report on
pages 35 to 36.
• Water usage disclosed in Greenhouse Gas
report on page 36.
• We have raised a goal to move to 100%
renewable electricity by 2030 including our
data centres. Please see page 37.
Data privacy,
advertising standards
and freedom of
expression
• Description of policies and practices
• Governance and compliance – our data
relating to behavioural advertising and
user privacy
security and data privacy sections of the
Sustainability Report on page 42.
• Total amount of monetary losses as a
result of legal proceedings associated
with user privacy
Data security
• Number of data breaches
• Description of approach to identifying and
addressing data security risks
Employee
recruitment, inclusion
and performance
• Employee engagement as a percentage
• Gender and ethnic group representation
Intellectual
property protection
and competitive
behaviour
• Total amount of monetary losses as a
result of legal proceedings associated
with anti competitive behaviour
regulations
•
•
•
•
•
In 2023 we had no monetary losses as a
result of legal proceedings associated with
user privacy.
In 2023 we had no reportable data breaches.
Information on data security can be found
in the Sustainability Report on page 42 and
Principal risks and uncertainties section on
page 48.
Information on employee engagement,
gender diversity and ethnicity can be found in
the Sustainability Report on pages 38 to 40.
In 2023 we had no monetary losses as a
result of legal proceedings associated with
anti competitive behaviour regulations.
The following table sets out where Stakeholders can find relevant non-financial information within this Annual Report,
further to the Financial Reporting Directive requirements contained in Sections 414CA and 414CB of the Companies Act
2006. Where possible, it also states where additional information can be found that supports these requirements
Reporting topic
Environmental matters,
including the impact
of the business on the
environment and climate
related disclosures
Employees
Policies and standards
which govern our approach
Annual Report and Accounts
section reference
Page
• N/A
• Whistle-Blowing Policy
• Disciplinary Rules and
Procedures Policy
t Sustainability Report
t TCFD Report
t Principal risks and uncertainties
t Engagement with our Stakeholders
t Sustainability Report
t Engagement with our Stakeholders
t Directors’ Remuneration Report
Social and community
matters
• Modern Slavery Statement
• Diversity Policy
t Sustainability Report
t Engagement with our Stakeholders
Respect for human rights
• Modern Slavery Statement
• Privacy Policy
• Document Retention Policy
• GDPR Policy
t Sustainability Report
t Engagement with our Stakeholders
Anti-bribery and
corruption
• Anti-Bribery and Corruption Policy
• Gifts and Entertainment Policy
t Sustainability Report
t Board Leadership and Company Purpose
t Audit Committee Report
Business model
• N/A
t Our Business at a Glance
Principal risks and
uncertainties
Non-financial KPIs
• Risk register
t Principal risks and uncertainties
t Strategic Highlights
t Our Business at a Glance
t Sustainability Report
26
30
46
58
26
58
82
26
58
26
58
26
56
76
16
46
3
16
26
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45
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Risk Management
Risk management framework
The Company does not have a separate risk committee
and the Board has overall responsibility for determining the
nature and extent of the principal risks it is willing to take
and for ensuring that risks are effectively managed across
the Group. The Group operates a cautious attitude to risk
and its risk appetite is low.
The Board performs a robust review and assessment of
the risks, and considers potential emerging risks. Risks
are then assessed based on their likelihood and potential
impact with the combination of the two measures defining
the overall score of each risk so they can be rated.
Risks are all captured and documented in a Risk Register,
identifying the risk category, the likelihood of the risk
occurring, the impact if it does occur, a specific owner for
each risk, the risk trend and the mitigation plan for each
risk. The CFO is ultimately responsible for maintaining
this register, with inputs from the CEO and the COO. The
register forms the basis for monitoring risks and ongoing
risk discussions within the Board. The Board reviewed the
Risk Register in December 2022 and April 2023.
The Company’s internal control framework is based on
a three lines of defence model. The first line of defence
comprises operational management, which is responsible
for the direct management of risk. This includes ensuring
appropriate mitigating controls are in place and that they
are operating effectively. The second line of defence is made
up of the Company’s internal compliance and oversight
functions such as company secretarial, finance and legal.
The third line of defence includes internal auditors’ reporting
to the Audit Committee.
Principal risks and uncertainties
The Board has carried out a robust assessment of the
emerging and principal risks facing the Group. This included
an assessment of the likelihood and impact of each risk
identified, and the mitigating actions being taken. The
principal risks and uncertainties identified, along with the
potential impact and key mitigations, are detailed in this
section. We recognise that the Group is exposed to risks
wider than those listed, however we have disclosed those
that we believe are likely to have the greatest impact on the
Group’s performance and those that have been the subject
of discussion at Board meetings this year.
Emerging and principal risks
Emerging risks are defined by the Group as potential but
not actual future risks that are often difficult to quantify but
may materially affect the Group.
An explanation of how the Company manages financial
risks is also provided in note 22 to the consolidated financial
statements.
Geopolitical risk
Political and
macroeconomic situation
Description & impact
Description & impact
Further escalation of the war in Ukraine could result in the
unrest and instability in the Baltic countries. Such situations
could impact consumer behaviour (e.g. reducing spending
/ investing), seller activity (e.g. disruption in retailing), or
impact investor perception of the business.
Mitigation
• Monitoring the situation in the region and changes in
consumer behaviour
• Maintaining a flexible cost base that can respond to
changing conditions
Developments in 2023
The temporary drop in the traffic of the Group’s portals at
the start of the war in 2022 has not repeated again and the
Group’s results in 2023 exceeded pre-invasion levels. This
shows that our Company as well as Baltic economies in
general are resilient to the increased geopolitical tension in
the region.
Economic conditions (whether due to economic cycle or
supply chain disruption) could lead to a retraction in the
underlying markets, a reduction in stock, consumer wallets
and a reduction in listers budgets / appetite to spend,
which all have the potential to reduce revenue. Economic
conditions can also impact the cost pressures (such as
wage growth, price inflation, interest rates, etc.)
Mitigation
• Monitoring economic situation and economic
forecasts for the region
• Maintaining a flexible cost base that can respond to
changing conditions
Developments in 2023
Inflation remained high through the year and the speed of
sales have normalised, both of which had a positive impact
on the Group’s performance due to higher commission pool
and an increase of active ads or our portals.
Disruption to our customer
and / or supplier operations
Laws & regulations
Description & impact
Disruption to the Group’s customers’ and / or suppliers’
operations conducting day-to-day business may impact on
the Group's ability to deliver desired results.
Mitigation
• Remaining market leaders in respective verticals
while offering value-adding products and packages
• Continual improvements to our platforms
• Developing our product proposition to continue
meeting our customers’ needs and evolving business
models
• Maintaining a healthy liquidity headroom with the
yet unused revolving credit facility of €10 million as
at 30 April 2023, together with a significant forecast
headroom versus its covenant
• Diversifying revenue streams through acquisition of
classifieds portals
Developments in 2023
The Group continued to strengthen its offering as well as
entered the Services classifieds market in Estonia and
Latvia through the acquisition of GetaPro portals which
further diversifies our customer base.
Competition
Description & impact
The Group might be affected by new competitors in existing
markets or new spheres of activities. Also, changes in
technology or consumer behaviour affect the way that
people search for cars, real estate, jobs or generalist
products, which may lead to a loss of consumer audience.
There is a risk of a new entrant to the market with a new
business model (for example, providing services free
of charge), affecting the Group’s audience, content and
revenue. Furthermore, as the Group diversifies into new and
adjacent markets, the competitor set widens.
Mitigation
• Constant monitoring of major competitors in adjacent
business areas
• Continuous investment into customer experience
• Continuous development of cross-linkages between
Group's horizontals and verticals
• Continuous development of our offering to provide
value-for-money and differentiated service to listers
Developments in 2023
During 2023 Group’s
leading portal's overall position
continued to strengthen against the closest competitors.
The number of listers was increasing year on year except
for Jobs, where the number of business clients have slightly
decreased after very significant growth last year.
Description & impact
The Group is subject to certain competition and antitrust
laws. Antitrust laws may limit the market power and pricing
or other actions of any particular firm.
Companies can be subject to legal action or investigations
and proceedings by national and supranational competition
and antitrust authorities and claims from its clients and
business partners for alleged infringements of competition
and antitrust laws, which could result in fines or other forms
of liability or otherwise damage the companies' reputation.
Such laws and regulations could limit or prohibit the ability
to grow in certain markets.
Future acquisitions by the Group could be impacted by
applicable antitrust laws and could be unsuccessful if the
necessary competition approvals by competition authorities
are not obtained.
Mitigation
• Having a dedicated internal expertise within the
business, responsible for identifying, assessing
and responding to upcoming changes in laws and
regulations, and the use of external specialists where
necessary
Developments in 2023
In addition to the two ongoing supervisory proceedings,
the Estonian Competition Authority initiated supervisory
proceedings in relation to the pricing of the Group’s
automotive portal in Estonia. The proceedings cannot lead
to imposition of fines to any Group company, however, a
precept ordering the Group companies to end any ongoing
infringements could be imposed or the Estonian Competition
initiate misdemeanour
Authority
proceedings that would entitle the imposition of a fine of up
to €400 thousand per case. See note 26 to the consolidated
financial statements for further detail.
could potentially
At the end of May, 2023, Estonian Ministry of Justice
registered the new draft law of the Law on Competition
implementing the ECN+ Directive ((EU) 2019/1). The draft
law is subject to further discussions in the Parliament, but
it is strongly likely that the current law will be amended,
and it might be relevant for the proceedings against the
Group companies. Under §12 of the draft, if passed, it
would enter into force on 1 July 2024. Per § 871(4) of
the draft the supervisory proceedings ongoing on 1 June
2024 concerning a potential competition infringement will
continue as competition supervision proceedings (new
administrative fine proceedings). This means that if the
relevant proceedings against Allepal are still ongoing on
1 June 2024, the Competition Authority could (together
with the precept) have the power to impose a fine of 10%
of the whole Group's turnover. At the same time, not all of
the evidence collected during the proceedings up to that
moment would continue to be admissible and given the
delays in the procedure, it is questionable if the Estonian
Competition Authority would attempt to impose a fine under
the new procedural rules.
Key
Stable risk trend
Decreasing risk trend
Increasing risk trend
Key
Stable risk trend
Decreasing risk trend
Increasing risk trend
46
47
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 STRATEGIC REPORT
Risk Management continued
STRATEGIC REPORT
Technology
Acquisition risk
Description & impact
Cyber-attacks. The Group is at greater risk from cyber threats
due to its large scale and prominence. As the business is
entirely dependent on information technology to provide its
services, successful attacks have the potential to directly
affect revenue.
Major data breach. Cyber-attack or the Group's own failures,
resulting in disabling of platforms or systems, or resulting
in a major data breach, could have an adverse impact on the
Group’s reputation, loss of trust and loss of revenue and / or
profits. Data breaches, a common form of cyber-attack, can
have a massive negative business impact and often arise
from insufficiently protected data.
Disruption to availability of services. The availability
and reliability of services to the Group’s customers is of
paramount importance. Any downtime or disruption to
consumer or advertiser services can have an adverse impact
on the business (complaints and credits for customers,
consumer usage, and potential reputational impact).
Therefore, the availability of third-party services, which are
necessary when using the services provided by the Group,
such as internet provision, mobile communication, are also
crucial.
Mitigation
• Ongoing investment in security systems to ensure our
systems remain robust
• Ongoing monitoring of external threats
• Regular testing of the security of the IT systems and
platforms including penetration testing
• Disaster recovery and business continuity plan in
place and reviewed and tested regularly
•
Internal audit review of cyber security
Developments in 2023
Two years ago, the Group performed a review of its
technology systems, data protection environment and
disaster recovery plans. Following this review, the Group
significantly improved its cybersecurity by implementing
DDOS protection and bot management systems, migrated
all services to a revised infrastructure and set up a new
infrastructure to accommodate a disaster recovery site.
During the 2023 cyber security assessment was performed
by the Group’s outsourced internal auditors. The Group
continues to work on the recommendations of the auditors
to further improve its systems and processes.
Description & impact
The Group might make an unsuccessful acquisition or
integration of an acquisition which in turn could lead to
reduced profits, impairment charge.
Mitigation
• Acquisitions are focused on those businesses which
operate in known sectors where the Group has or can
develop competitive advantage and have good growth
opportunities
• Detailed pre-acquisition due diligence by in house
personnel as well as external advisers
• Retention and motivation of key personnel
Developments in 2023
The automotive portal acquired in 2020 as well as the
Services business acquired this year are performing in line
with expectations.
Climate change
Description & impact
From a long-term perspective, the Group is subject to
physical climate risks directly related to climate change
and transitional climate risks, which may arise due to
transitioning to a lower-carbon economy. Increased severity
of extreme weather events due to accelerating global
warming may result in disruption to provision of services
from our service providers, affect the availability of websites
and change commercial customers’ behaviour.
New regulations relating to the reduction of carbon
emissions and
increasing customer climate change
awareness may affect the Group’s operations and the
volume of listings and encourage us to adapt our business
to the new regulations and changing market tendencies.
Mitigation
• The Group is committed to contributing to the climate
change cause by being environmentally responsible,
reducing carbon emissions, shifting to renewable
energy and offsetting carbon emissions
• We are already taking actions to adapt to the
increasing customer climate change awareness and
are ready to adjust if new environmental regulations
arise: adopt the platforms for eco-friendly products,
introduce necessary filters, educate visitors, enrich ad
data with environmental impact related information
Developments in 2023
In 2023, we set clear targets in our net zero journey,
submitted our near-term targets for Science Based Targets
initiative (SBTi) Business Ambition for 1.5°C, increased
the percentage of electricity from renewable sources to
73%, carbon-free electricity to 87% and reduced our total
emissions by 45%.
Viability Statement
Based on the going concern assessment discussed in note 2
of the financial statements, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the 12 months from
the date of approval of the financial statements. For this
reason, we continue to adopt the going concern basis in
preparing the financial statements.
As required by the UK Corporate Governance Code 2018 (the
“Code”), the Directors have assessed the long-term viability
of the Group over a period significantly longer than 12
months from the approval of these financial statements. The
Directors have assessed the Group’s prospects considering
its current financial position, its recent historical financial
performance and the principal and emerging risks and
uncertainties on pages 46 to 48.
The Directors have determined that a period of five years
to April 2028, which was previously a period of three
years, is the most appropriate period over which to provide
its viability statement as it allows consideration of the
longer-term viability of the Group and reflects reasonable
expectations in terms of the reliability and accuracy of
operational forecasts. This process includes an annual
review of the ongoing plan, led by the Group Executive
directors in conjunction with the Group portal managers.
The latest updates to the plan were finalised in April 2023.
The base case financial projections start with the Group’s
2024 budget and look ahead over the assessment period
to include an expected level of growth. The Group’s funding
position is also considered, with focus on the ongoing
compliance with the covenants attached to the Group’s
external debt.
testing which
The strategic plan has been subject to robust downside
stress
involved flexing several main
assumptions underlying the plan to assess the impact of
severe but plausible scenarios. Analysis was performed to
evaluate the potential financial impact over the period of the
Group’s principal risks occurring, including:
• the impact of any major data breach as a result of a
cyber-attack;
• adverse changes to the business environment
including due to competition or disruption to our
customer and / or supplier operations; and
• a continuing geopolitical tension in the neighbouring
countries.
Specific scenarios that have been modelled
downside scenarios in relation to:
include
• growth of revenues: either limited or flat growth rate;
and
• effect on operating costs: data breach related fines,
increased marketing costs.
A plausible combination of these scenarios was also
assessed.
The objective of the scenario modelling was to project cash
flows generated by the Group to ensure the Group remains
cash positive during the assessment period and to project
a total leverage ratio to make sure a healthy covenant
headroom is maintained during this period. It was taken
into account that the Group’s term loan of €70 million is
due in July 2026 and the Group has access to a revolving
credit facility that amounts to €10 million which is available
until July 2026. Even after repayment of external debt in all
scenarios tested, the Group remained cash positive and with
a significant covenant headroom over the five-year period.
Other factors providing comfort to the Directors about the
Group’s long-term viability in the face of adverse economic
conditions include that the Group has high margins,
significant free cash flow generation and an ability to adjust
the discretionary dividend to enhance liquidity. Therefore
the Directors have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities
as they fall due over the period of the assessment.
The Company’s Strategic report, set out on pages 2
to 49, was approved by the Board on 28 June 2023
and signed on its behalf by:
Justinas Šimkus
Chief Executive Officer
28 June 2023
Key
Stable risk trend
Decreasing risk trend
Increasing risk trend
48
49
Baltic Classifieds Group PLC Annual Report and Accounts 2023 GOVERNANCE REPORT
Corporate Governance Report
GOVERNANCE REPORT
“
During the year the Group increased its female
gender representation on the Board from 28.5%
to 37.5%. We are also proud to have had a female
Chief Financial Officer in situ since before the IPO.
Trevor Mather
Chair
Governance Highlights
Appointed Jurgita Kirvaitienė as Independent Non-Executive
Director
Board succession planning
Setting strategic objectives
Robust assessment of the Group’s internal systems of
controls
Introduction by the Chair of the Board Trevor Mather
Dear Shareholder
On behalf of the Board, I am pleased to present the Group’s
Corporate Governance Report.
This Corporate Governance Report explains the key features
of the Group’s governance framework and how it complies
with the Financial Reporting Council’s UK Corporate
Governance Code 2018 (the “Code”).
The Board recognises that a good governance structure is
not static but allows the Group to grow and develop. In the
time since our listing on the London Stock Exchange, the
Board has been committed to raising the standards of its
governance framework and to ensuring that the Company
Purpose is at the heart of its decision making. Our business
and its success is inextricably linked with its people and its
culture and the motto of “we love transactions” is evident
across the Group.
UK Corporate Governance Code 2018
(the “Code”)
In the following pages we are pleased to disclose how the
Group complies with the principles and provisions of the
Code. As such, the Governance report is laid out in the
following sections:
Board leadership and Company purpose
Division of responsibilities
Composition, succession and evaluation
Audit, risk and internal control
Remuneration
Page
56
62
67
71
71
51
51 Corporate Governance Report
• Introduction by the Chair of the Board Trevor Mather
• Corporate Governance Statement 2023
• Board of Directors
• Senior Management
• Board Leadership and Company Purpose
• Division of Responsibilities
• Board Composition, Succession and Evaluation
• Audit, Risk and Internal Control
• Remuneration
72 Nomination Committee Report
76 Audit Committee Report
82 Directors' Remuneration Report
91 Directors' Report
Baltic Classifieds Group PLC Annual Report and Accounts 2023 GOVERNANCE REPORT
GOVERNANCE REPORT
Strategy
The Board held its inaugural strategy away day during
the year in which it focused on the Company’s strategic
objectives and in particular driving monetisation of core
services. Through various means including pricing actions,
product and packaging developing, enabling upsell and
cross-sell. During the year, the Company built upon its
five strategic objectives by adding a sixth objective with
more emphasis on ESG factors, namely: “Promote circular
economy and minimise our own impact on the environment”.
Board effectiveness review
The Board participated in its first externally facilitated Board
Effectiveness Review earlier in the year. The focus was very
much on the Code and FCA requirements of a listed Board
and had a practical focus. The Board has approved an
action plan against the recommendations and will report on
the outcome of these in the next financial year. For more on
this process and recommendations see page 75.
Group’s internal systems of controls
During the year, the Audit Committee spent its time
focusing on the Group’s internal systems of controls,
including developing and implementing a formal policy on
the engagement of the external auditor to supply non-audit
services; reviewing the effectiveness of the external audit
process and the internal audit function and reviewing the
Group’s internal controls systems, compliance function,
anti-money
laundering systems and controls, as well
as procedures for detecting fraud and whistle-blowing
procedures, see page 43 for further details.
Future outlook
The Board believes in the value of a sound governance
framework from which it can operate and ensure the long-
term sustainable success of the business. As we continue
our journey of formalising policies and practices, the Board
is committed to establishing an annual cycle of review and
monitoring to ensure our governance evolves alongside our
business.
2023 Annual General Meeting
Our 2023 Annual General Meeting (“AGM”) will be held
at 11:00 am local time on 27 September 2023 in the
headquarters of Baltic Classifieds Group at Saltoniškių
9B, Vilnius, LT-08105 Lithuania. Myself and other Directors
will join the meeting either in person or via teleconference.
We strongly encourage all Shareholders to cast their votes
by proxy, and to send any questions in respect of AGM
business to cosec@balticclassifieds.com.
Trevor Mather
Chair
28 June 2023
Corporate Governance
Statement 2023
This Corporate Governance Statement as required by the
UK Financial Conduct Authority’s Disclosure Guidance and
Transparency Rules 7.2 (“DTR 7.2”), together with the rest
of the Corporate Governance Report and the Committee
Reports forms part of the Directors’ Report and has been
prepared in accordance with the principles of the Financial
Reporting Council’s UK Corporate Governance Code 2018
(the “Code”).
A copy of the Code can be found on the Financial Reporting
Council’s website: www.frc.org.uk.
Additional requirements under the DTR 7.2 are covered in
greater detail throughout the Annual Report for which we
provide reference as follows:
t The Group’s Risk management and internal control are
found on pages 46 to 48
t Information with regards to share capital is presented in
the Directors’ Report on page 93
t Information on Board and Committee composition can be
found on pages 54 to 55
t Information on Board diversity including the Board
diversity policy can be found on pages 68 to 69
The Company’s obligation is to state whether it has complied
with the relevant principles and provisions of the Code, or to
explain why it has not done so up to the date of this Annual
Report.
The Company has applied the principles of the Code and
has complied with the Principles and Provisions of the Code
during the financial year, except for as outlined below:
Code Principle
and Provision
Provision 11
Area
Explanation
At least half the
board, excluding
the chair, should
be non-executive
directors whom the
board considers to
be independent
During the year and on 17 May 2022, the Board appointed Jurgita Kirvaitienė as
an additional Independent Non-Executive Director. Following this appointment,
the Company has one Chair, three Independent Non-Executive Directors, one Non-
Independent Non-Executive Director and three Executive Directors. Excluding the Chair,
42.9% of the Board is independent.
The Company continually reviews the skills, experience and diversity of its Board and
believes that the Board composition is optimum for its current strategy and does not
think it is in the best interest of the Company to recruit an additional Director at this
point in time.
Provision 24
Audit Committee
with minimum
membership of
three
During the year and on 17 May 2022, the Board appointed Jurgita Kirvaitienė as
an additional Independent Non-Executive Director and invited her to join all Board
Committees, including the Audit Committee. Following this appointment, the Company
is compliant with Provision 24.
The FCA Listing Rule 9.8.6 requires companies to provide a statement as to whether it meets the following targets:
Target
Comply or Explain
At least 40% of the board should be women
At least one of the senior board positions (Chair, Chief
Executive Officer (CEO), Chief Financial Officer (CFO) or
Senior Independent Director (SID)) should be a woman
At least one member of the board should be from an ethnic
minority background excluding white ethnic groups (as set
out in categories used by the Office for National Statistics)
The Board currently has 37.5% female representation. Please
see the Nomination Committee report on pages 73 to 74 for a
detailed explanation of this.
The Group is pleased to have a female CFO, Lina Mačienė.
The current Board does not have one Board member from an
ethnic minority group (excluding white ethnic groups). Please
see the Nomination Committee report on pages 73 to 74 for a
detailed explanation of this.
52
53
GOVERNANCE REPORT
Board of Directors & Senior Management continued
GOVERNANCE REPORT
Board of Directors
The Directors have skills and experience relevant to the sector in which the Group operates in order to effectively set the
strategic direction and purpose of the Group.
Trevor Mather
Chair
Appointed: 2021
Justinas Šimkus
Chief Executive Officer
Appointed: 2021
Lina Mačienė
Chief Financial Officer
Appointed: 2021
Simonas Orkinas
Chief Operating Officer
Appointed: 2021
Nationality: British
Nationality: Lithuanian
Nationality: Lithuanian
Nationality: Lithuanian
Independent: No
Independent: No
Independent: No
Experience: Justinas joined
the Group in 2005 as CEO of
Diginet LTU. Justinas holds
a BSc in Management and
Business administration from
Vilnius University and an MSc in
International Business from Vilnius
University.
Key external appointments: Justinas
holds directorships in the following
companies: UAB EIKA Real Estate
Fund; UAB EIKA Development Fund;
and UAB EIKA Residential Fund.
Committee membership: None
Experience: Lina joined the Group
in 2017 as CFO. She previously
worked at PwC in its audit and
assurance services department
from 2010 until 2017. Lina holds
a BSc in Economics from Kaunas
University of Technology and an
MSc in Management and Business
Administration from ISM University
of Management and Economics.
Key external appointments: None
Committee membership: None
Experience: Simonas joined the
Group in 2007 as Skelbiu.lt Portal
Manager, in 2009 was appointed
COO of the Group and was
appointed CEO of Diginet LTU in
August 2019. Simonas holds a BSc
in Business Management from
Vilnius University.
Key external appointments: None
Committee membership: None
Independent: Independent on
appointment
Experience: Trevor was Chief
Executive of Autotrader from
June 2013 until February 2020.
Previously, Trevor was President
and CEO of ThoughtWorks, a
global IT and software consulting
company. Before his time at
ThoughtWorks, Trevor spent almost
ten years at Andersen Consulting
(now Accenture). Trevor holds
an M.Eng. in Aeronautics and
Astronautics from Southampton
University.
Key external appointments: Trevor
holds directorships in the following
companies: Mather Property
Limited; Mather Consultancy
Services Limited; and Mather
Charitable Foundation.
Committee membership: Nomination
Committee (Committee Chair),
Remuneration Committee (until 17
March 2023).
Senior Management
Ed Williams
Senior Independent
Non-Executive Director
Appointed: 2021
Nationality: British
Independent: Yes
Experience: Ed was appointed Chair
of Autotrader prior to its flotation
on the London Stock Exchange
in March 2015. He served as an
independent director of idealista,
the privately owned Spanish
property portal from 2015 to 2020.
Ed was founding Chief Executive of
Rightmove, serving in that capacity
from 2000 until his retirement from
the business in 2013.
Key external appointments: Chair of
the Board of Autotrader Group PLC
Committee membership:
Remuneration Committee
(Committee Chair) Audit Committee,
Nomination Committee
Tom Hall
Non-Executive Director
Appointed: 2021
Kristel Volver
Non-Executive Director
Appointed: 2021
Jurgita Kirvaitienė
Non-Executive Director
Appointed: 2022
Nationality: British
Independent: No
Nationality: Estonian
Independent: Yes
Nationality: Lithuanian
Independent: Yes
Experience: Tom joined the Group
in July 2019. He leads the Internet/
Consumer team in Europe for Apax,
where he has worked for over 20
years. He has led many of Apax’s
marketplace investments, including
Autotrader, idealista and SouFun.
Key external appointments: Tom
holds directorships in the following
companies: Apax Partners LLP,
idealista Global S.A., NEXT plc,
MF Midco Limited, MF Topco
Limited, Takko Fashion GmbH,
Wehkamp Management Pooling
Company BV, Wehkamp Holding
BV, Stichting Administratiekantoor
Co-Investment STAK, Stichting
Administratiekantoor Sweet Equity
STAK, and Tinka Holding BV.
Committee membership: Nomination
Committee.
Experience: Kristel worked in the
audit department at KPMG from
2012 to 2015, was deputy head of
Group Finance Estonia for Nordea
from 2015 to 2017 and from 2017
to 2019 Group CFO for Eesti Meedia
(Postimees Grupp). Since 2019
she has been a board member
at MM Grupp, one of the largest
Estonian private equity investment
companies. She holds a BSc and
MSc in Finance from the University
of Tartu and has been a certified
auditor since 2016.
Key external appointments: Since
2019, Kristel has been a board
member of MM Grupp OÜ and
is currently a member of the
supervisory boards of Postimees
Grupp AS, Magnum AS, Apollo Group
OÜ, iDeal Group AS, 15min UAB,
AS Kroonpress and TVNET Latvia.
Kristel also holds directorships in
the following companies: Semetron
AS; Beinita Kodu AS; Leta SIA; Balti
Meediamonitooringu Grupp OÜ;
Linnamäe Lihatööstus AS, Skeleton
Technologies Group OÜ and Confido
Healthcare Group.
Committee membership: Audit
Committee (Committee Chair),
Remuneration Committee,
Nomination Committee
Experience: Jurgita joined the Group
in 2022 as an independent Non-
Executive Director. Jurgita built her
career at PwC from 1997 to 2015
where she progressed to become
a Director and a member of the
Management Board for Lithuania.
Subsequently she became General
Manager, and Board member, of a
FinTech startup, and supplemented
this with being a member of the
Audit Committee at Maxima Grupe.
Jurgita has experience in provision
of outsourced internal audit
services to FinTech companies.
Jurgita has a BSc in Business
Administration and an MSc in
International Business from
Vilnius University, completed an
International EMBA at the Baltic
Management Institute, is a fellow
member of ACCA, is a Certified
Internal Auditor, has been a certified
statutory auditor since 2003 and
was President of the Lithuanian
Chamber of Auditors from 2010 to
2014.
Key external appointments: None
Committee membership: Audit
Committee, Remuneration
Committee, Nomination Committee
In addition to the three Executive Directors, the Senior Management is made up of the following individuals:
t More information see on our corporate website at: balticclassifieds.com
Artūras Mizeras
Head of Autoplius.lt
Viktorija Steponavičiūtė
Head of Aruodas.lt
Tomas Toleikis
Head of CVbankas.lt
Daumantas Kirkutis
Head of Kainos.lt and
Paslaugos.lt
(until May 2023)
Gvidas Borisas
Head of Kainos.lt and
Paslaugos.lt
(from May 2023)
Tarvo Teslon
Head of KV.ee, Osta.ee and
KuldneBörs.ee
Karin Noppel-kokerov
Head of City24.ee
Maksis Karlins
Head of City24.lv
Daniel Skornjakov
Head of Auto24.ee
Jurijs Fridkins
Head of GetaPro.lv and
GetaPro.ee
54
55
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 GOVERNANCE REPORT
GOVERNANCE REPORT
Board Leadership and Company Purpose
Code Principle
A Effective Board
B Purpose, strategy, values and culture
C Prudent and effective controls and Board
resources
D Stakeholder engagement
E Workforce policies and practices
56
56
57
57
61
Effective Board
The Board understands that a successful company is led
by an effective and entrepreneurial board, whose role is to
promote the long-term sustainable success of the Company,
generating value for Shareholders and contributing to wider
society. Entrepreneurs Justinas Šimkus (CEO) and Simonas
Orkinas (COO) and their long-standing team have spent over
10 years building a collection of market-leading businesses
and strong brands.
Composed of industry stalwarts, the Board is formed of
Executive and Non-Executive Directors whose impressive
breadth of industry experience and knowledge complements
each other. Each Director operates with the utmost of
respect for the others and each holds a clear vision of the
purpose of the Company.
The Board was subject to an external Board Effectiveness
Review during the year and was found to be a high-
performing and effective Board which acts with great
integrity. The Board recognises that a good governance
structure is not static but allows the Group to grow and
develop.
Most Board members are also investors in the Company,
therefore promoting success is in their best interest.
Purpose, strategy, values and culture
The Group has an entrepreneurial, team-focused and
ambitious culture, firmly based in principles of equality and
inclusivity. The Board recognises the contribution of this
culture to the success of the business and is satisfied that it
is aligned with the Company’s purpose, values and strategy.
Indeed, the Board describes this as the Company’s “super-
power”.
The Board is responsible for setting the Group’s strategy
and for determining the Group’s purpose which is to connect
consumers with listers and help them transact more easily.
For more on the Board’s in-depth strategy session held in
September 2022 see page 52. The Board has committed
to an annual review of its vertical strategies (namely Real
Estate, Auto and Jobs & Services).
The digital marketplaces we operate promote trust, fairness
and efficiency which is a clear message conveyed by the
Board.
Company values:
Our values shape our culture and embody what we stand
for. Our culture is an important part of our strategy and
we believe that these values support our priority to be a
responsible business.
• Trustworthiness
• Entrepreneurship
• Less is more
• Getting things done
• Marketplace is our hobby
• Work is fun
The Board monitors the culture of the Group through
updates at each Board meeting from the CEO, CFO and COO
who are directly responsible for workforce issues. These
updates cover people, culture, inclusivity and talent.
t For more information on Board Activity and Culture see
page 65.
Prudent and effective controls and
Board resources
The Board provides leadership within a framework of
prudent and effective controls. The Board has clear Board
roles and divisions of responsibility. The framework of the
Board and its Committees provides clearly-stated duties
and responsibilities and clear lines of accountability and
effective oversight. These controls ensure timely decision-
making at the correct level. The Board continues to monitor
the framework so it remains appropriate to the business.
During the year, the Board participated in an external board
effectiveness review. The Committee Terms of Reference
were reviewed as was the role and function of each
Committee.
The Board provides support to Senior Management in
implementing strategic priorities, as well as oversight and
constructive challenge.
Board materials, quality of information and resources as a
whole were discussed by the Board during the year and it
was identified that whilst the Board and Committee papers
provide a solid grounding for their respective meetings,
there is now scope to further build upon the detail within
the agendas.
All of the Directors have the right to have their opposition to,
or concerns over, any Board decision noted in the minutes.
Directors are entitled to take independent professional
advice at the Company’s expense in the furtherance of their
duties, where considered necessary.
During the year, no Director raised any concerns about the
operation of the Board or the management of the Company.
Stakeholder engagement
The Board recognises the importance of understanding
the Company’s different Stakeholder groups. Through
understanding them, the Board can make sure that it
represents them both on the Board and throughout the
workforce. During the year, the Executive Directors carried
out a review of the Company’s Stakeholders with a particular
emphasis on understanding what matters are important to
them and understanding how the Board engages with them.
Stakeholders and S172(1)
considerations
By thoroughly understanding our key Stakeholder groups,
the Board can factor their needs and concerns into
boardroom discussions.
The following table, which should be read in conjunction with
the Section 172(1) Statement on page 19, the Statement of
Engagement with Employees on page 94 and the Statement
of Engagement with Other Business Relationships on page
94, summarises the key Stakeholder groups and matters
that are of the most importance to them.
The Stakeholder analysis workshop:
• The Executive determined that there had been no
significant change to the Stakeholder base.
• The workshop drilled down into material interests,
engagement methods and Board decisions
relating to each recognised Stakeholder group.
• The resulting Stakeholder matrix was reviewed
and approved by the Board.
• The Stakeholder analysis provides the Board
with assurance that the potential impacts on our
Stakeholders are being carefully considered by
Management when developing plans for Board
approval.
Key Stakeholder groups:
Investors: Allow us to strive to be the best for all our
Stakeholder groups
Consumers and Advertisers: Are at the heart of our
purpose
Our People: We all work together to ensure the long-
term success of our business
Suppliers: We view our suppliers as partners who
help us deliver our purpose
Regulatory bodies: We prioritise ensuring that we
meet all regulatory requirements
Environment and Community: We think about the
future and what condition we leave the Earth in for
future generations
56
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GOVERNANCE REPORT
Board Leadership and Company Purpose continued
Board Leadership and Company Purpose continued
GOVERNANCE REPORT
Engagement with our Stakeholders
following
table summarises
The
the Group’s key
stakeholders and highlights what issues matter the most to
them. It goes on to further illustrate how the Board engages
with each stakeholder group and ties in Principle decision
making against the Section 172(1) factors a) to f).
This should be read in conjunction with the Section 172(1)
Statement on page 19.
Companies Act 2006, Section 172(1)
“A director of a company must act in the way, he considers,
in good faith, would be most likely to promote the success of
the company for the benefit of its members as a whole, and in
doing so have regard (amongst other matters) to the following
factors:
(a) the likely consequences of any decision in the long term;
(b) the interests of the company’s employees;
(c) the need to foster the company’s business relationships
with suppliers, customers and others;
(d) the
impact of the company’s operations on the
community and the environment;
(e) the desirability of the company maintaining a reputation
for high standards of business conduct; and
(f) the need to act fairly as between members of the
company.”
Stakeholder
Principal issues
that matter to the Stakeholder
Board oversight
and engagement mechanisms
Principal decision
S172(1)(a) to (f)
INVESTORS
What we value the
most
Knowledge and
support
Ongoing investment
Key driver of our
strategy
• Business operations
• Sustainable, profitable growth
runway
• Returns on their investment
• Dividend and capital policies
• Share price
• Risks to the business
• Risk management
• Transparency
• Responsible business
(demonstrated through
Environmental, Social and
Corporate Governance)
• Values and culture of the
Company
•
Internal and external audit
processes
Investor Roadshows
•
• Regular personal meetings
with potential investors in
response
• Fireside chats with brokers
• RNS newswires
• Annual Report and Accounts
• Relevant updates on
corporate website
• Annual General Meeting
• Electronic communications
to Shareholders
• Views of voting agencies
• Agreed a 6th Company
strategic objectives
(a), (b), (c), (d), (e), (f)
• Approved the declaration
of a dividend
(a), (b), (e), (f)
• Approved the return of
capital to shareholders
via the share buyback
programme
(a), (b), (e), (f)
• Reviewed the ESG
strategy (a), (b), (d)
Difficulties and
considerations
• The Company spoke to Investors about potential expansion towards ancillary business, having
considered the views of the Investors, the Board made the decision not to pursue this expansion
at this moment.
• Views of voting agencies has led to a greater understanding of Shareholder interest and has fed
into key policies such as our Board diversity policy.
• The Board balances the expectations of long term investors on dividends and the return of capital
to shareholders via the share buyback programme with the need for capital expenditure for
operational expenses; potential investments and value adding M&As.
ENVIRONMENT
AND
COMMUNITY
What we value the
most
Having a positive
environmental and
social impact
• Recognised environmental
and societal standards
• Environmental and social
issues, including climate
change, carbon emissions,
human rights, waste
management, and recycling
• Having a positive impact on
the community
• Environmental and socially
responsible business
practices and credentials
• ESG working group
• Board involvement in the
preparation of the ESG
reporting in the Annual Report
and Accounts
• Senior Management reports
to the Board on social and
environmental concerns
arising within their business
units
• Bi-lateral cooperation
agreement
• Materiality assessment
for sustainability
completed (a), (b), (c),
(d), (e)
• Agreed to focus on eight
ESG targets (a), (b), (c),
(d), (e)
• Agreed to widen the remit
and membership of the
ESG working group (a),
(c), (d), (e)
• Agreed the sixth Strategic
objective with an ESG
focus (a), (b), (c), (d), (e)
Difficulties
• Following both European and United Kingdom legislation
• Ethnicity reporting requirements
Stakeholder
Principal issues
that matter to the Stakeholder
Board oversight
and engagement mechanisms
Principal decision
S172(1)(a) to (f)
• Board focus is
on improving
the customer
experience in all of
its decision making
(a), (c)
• Reviewed and
approved new
products or
changes to existing
ones (a), (c)
CONSUMERS (C)
AND
ADVERTISERS (A)
What we value the
most
Drive growth and
reputation
Are the foundation of
our purpose
• Market reach (A)
• Breadth of network
• Competitive rates (A)
• Functionality and intuition of sites
• Reputation
• Pragmatism
• Customer service (A)
• Training on new
functionalities (A)
• Credibility of sellers (C)
• Measures to protect customers (C)
• Data protection
• Health and safety standards
• C2C or B2C price rise (primary
effect on advertisers and a
secondary on consumers)
• Access to portal manager
• Portal managers engage with
Executive Directors daily
• Portal Managers feed
customer relationship
information back to the Board
• Portal Managers rotate
attending Board meetings
• The Board intentionally drive
strategy and decision-making
to improve the customer
experience
• C2C and B2C pricing events
•
Informal feedback from
customers which is then fed
back to the Board in meetings
Difficulties and
considerations
• Supply chain issues - particularly in the auto business line
• Balancing customer needs and expectations
• Being alert to data protection risks and challenges on a consistent basis
• Customer protection (e.g. protection against third-party fraud)
OUR PEOPLE
What we value the
most
Bring ambition,
expertise and fresh
perspectives
Contribute to the
values and culture
Essential for the
delivery of strategic
objectives
• The impacts of the war in Ukraine
• How the Board of a listed company
operates
• An inclusive and diverse working
environment
• Positive culture, team spirit
• Opportunities for career and
personal development
• Having a voice
• A safe and secure workplace
• Good pay and benefits
• Gender equal pay
• Whistle-Blowing Policy and
procedure for raising concerns
• Good working practices
• Safe working environment
• Modern slavery policy
•
Initial “Meet the Board”
session
• Employee engagement
questionnaire
• Regular and scheduled
meetings within Business
Units where employees
have the opportunity to
ask questions of Senior
Management; the feedback
from these sessions is fed
back to the Board during
vertical strategy sessions
• CEO, CFO and COO update at
every board meeting which
includes relevant workforce
updates
• Regular social activities for
example, virtual beer tasting,
a Christmas party
• Reviewed
and approved
the updated
Whistleblowing
procedures (b)
• Reviewed and
approved the
Performance Share
Plan (a), (b)
Difficulties and
considerations
• Jurisdictional difficulties for the Non-Executive Directors to spend significant time with
its employees. Face to face time is being factored into the Board's annual schedule where
opportunities arise.
SUPPLIERS
What we value the
most
Support our business
infrastructure
Smooth operational
performance
• Prompt and accurate payment
• Long-term partnerships
• Collaboration
• Responsible sourcing
• Regulatory compliance
• The company's financial
performance
• Growth prospects
• Reputation
Difficulties
• Supplier cost increases
• Performance reports
• Reviewed and
discussed and considered at
Board
• Continuous development of
our supplier management
framework to strengthen
our collaboration with
strategic suppliers who are
instrumental in enabling the
realisation of our strategic
objectives
approved larger
supplier contracts
based on authority
matrix (for
example Financial
intermediation
contracts - Auto
portals) (c), (e)
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Board Leadership and Company Purpose continued
GOVERNANCE REPORT
Stakeholder
Principal issues
that matter to the Stakeholder
Board oversight
and engagement mechanisms
Principal decision
S172(1)(a) to (f)
REGULATORY
BODIES
• Legal and safe operations
with compliance with relevant
regulations
• Board oversight and approval
of filings with Companies
House
What we value the
most
Ensure we understand
changing regulatory
requirements
Difficulties and
considerations
• Worker pay and conditions
• Waste management and
environmentally sound
practices
• Board receives updates
on legal matters at Board
meetings
• Reviews communications with
the FRC
• Consumer protection
• Product safety
• Health and safety
• Privacy and security
• Gender equal pay
• The ongoing supervisory proceedings initiated by the Estonian Competition Authority
• Reviewed and approved
full and half-yearly
results (a), (e), (f)
• Board reviewed and
responded to the FRC
letter to the Chair of the
Audit Committee and
made a subsequent
restatement (c), (d),
(e), (f)
The Board acknowledges that not every decision it makes will necessarily result in a positive outcome for all of our stakeholders.
But by understanding our stakeholders, and by considering their diverse needs, the Board considers the potential impact of the
decisions on the different stakeholder groups.
Further information as to how the Board has had regard to S172(1)(a) to (f) can be found in the following pages:
Section 172(1)(a) to (f)
Where can you find more in our Annual Report
Page
S172(1)(a) Consequence of any decision in the
long-term
Moving our strategy forward
Risk Management
S172(1)(b)
Interests of employees
Board leadership and Company purpose
Section 172(1) Statement
Engagement with our Stakeholders
Sustainability report
Board leadership and Company purpose
Statement of engagement with employees
Board activity and culture
Board activity throughout the year
Non-financial and sustainability information statement
S172(1)(c) Fostering business relationships with
suppliers, customers and others
Moving our strategy forward
Section 172(1) Statement
Engagement with our Stakeholders
Board leadership and Company purpose
Statement of engagement with other business relationships
Non-financial and sustainability information statement
S172(1)(d) Impact of operations on the
community and the environment
Moving our strategy forward
Section 172(1) Statement
Engagement with our Stakeholders
Board leadership and Company purpose
Non-financial and sustainability information statement
S172(1)(e) Maintaining high standard of business
conduct
Moving our strategy forward
Section 172(1) Statement
Engagement with our Stakeholders
Board leadership and Company purpose
Non-financial and sustainability information statement
S172(1)(f) Acting fairly between members
Section 172(1) Statement
Engagement with our Stakeholders
Division of Responsibilities
18
46
56
19
58
26
56
94
65
64
45
18
19
58
56
94
45
18
19
58
56
45
18
19
58
56
45
19
58
62
Workforce policies and practices
The Board takes responsibility for all workforce policies and
practices which are consistent with the Company values
and supports its long-term sustainable success.
The Board reviews and approves all significant policies that
impact our workforce. The Executive Directors take direct
responsibility for all workforce related issues to ensure that
they align with the Group’s values and purpose.
The Board understands that a diverse range of experience,
expertise and perspectives contributes to the success of
the Company. In its workforce strategy, the Company set
out that it aims to attract high potential, highly motivated
employees and that upon appointment, these employees
will be given the space to develop and grow. The workforce
is currently 49% male and 51% female.
Policies are published on the Company intranet. Our
employees are required to confirm their understanding of
these policies upon recruitment and on a periodic basis.
Where relevant, training is given to the workforce such as
for whistle-blowing and anti-bribery and corruption.
All employees (and the Board) are required to notify the
Company as soon as they become aware of a situation that
could give rise to a conflict or potential conflict of interest.
The register of potential conflicts of interest is regularly
reviewed to ensure it remains up to date. The Board is
satisfied that potential conflicts have been effectively
managed throughout the year. For more on conflicts of
interest see page 66.
The Board approves the Remuneration Policy for the
Executive Directors and, via the Remuneration Committee,
has oversight of the wider workforce remuneration
practices. The Remuneration Report can be found on page
82.
As a business, we seek to conduct ourselves with honesty
and integrity and believe that it is our duty to take appropriate
measures to identify and remedy any malpractice within or
affecting the Company. Our employees embrace our high
standards of conduct and are encouraged to speak out if
they witness any wrongdoing which falls short of those
standards. We have a Board approved Whistle-Blowing
Policy. To date, there have been no reports made under this
policy.
n e w
During the year, the Whistle-Blowing Policy and the Capital
Allocation Policy were reviewed and updated.
t For more information on workforce policies and practices
see the Non-financial and sustainability information
statement on page 45.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023 GOVERNANCE REPORT
Division of Responsibilities continued
GOVERNANCE REPORT
Division of Responsibilities
Code Principle
F Board roles
G Independence
H External commitments
I Board efficiency: Key Board activities
62
68
66
64
Responsibilities of the Board
The Board is committed to the highest standards of
corporate governance. The Board is collectively responsible
for the long-term success of the Group. The business of
the Group is managed by the Board who may exercise all
the powers of the Company. The Board delegates certain
matters to the Board Committees and delegates the
detailed implementation of matters approved by the Board
and the day-to-day operational aspects of the business to
its Executive Management.
The Board comprises the Chair, the CEO, the CFO, the COO, a
Non-Executive Director appointed by the Major Shareholder
(the “Nominee Director”), a Senior Independent Non-Executive
Independent Non-Executive
two
Director
Directors. See pages 54 to 55 for Board biographies.
(“SID”) and
The Board sets the Group’s purpose, values and strategy
and satisfies itself that these are aligned with culture;
provides entrepreneurial leadership, promoting long-term
sustainable success and Shareholder value creation; and
oversees the Group’s risk management processes and
internal control environment.
The Board remains confident that individual members
will continue to devote sufficient time to undertake their
responsibilities effectively.
There is a clear division between Executive and Non-
Executive responsibilities. The Statement of Division of
Responsibilities between the Chair and the CEO and the
role of the SID is available on the Company website. The
Schedule of matters reserved for the Board is also available
on the Company website. Both were reviewed during the
year as part of the Board effectiveness process.
Board roles
Chair
• Leads the Board and is responsible for the overall
effectiveness of Board governance
• Sets the Board’s agenda, with emphasis on strategy,
performance and value creation
• Ensures good governance
• Shapes the culture of the Board, promoting openness
and debate
Chief Executive Officer
• Develops strategies, plans and objectives
for
proposing to the Board
• Leads the organisation to ensure the delivery of the
strategy agreed by the Board
Chief Financial Officer
• Provides strategic financial leadership of the Group
and runs the finance function on a day-to-day basis
• Runs the Group on a day-to-day basis and implements
the Board’s decisions
Chief Operating Officer
• Runs the Group on a day-to-day basis and implements
the Board’s decisions
• Heads the IT Team
Senior Independent Non-Executive Director
• Acts as a sounding board for the Chair
• Available to Shareholders if they require contact both
generally and when the normal channels of Chair, CEO
or CFO are not appropriate
• Leads the annual appraisal of the Chair’s performance
and the search for a new Chair, when necessary
Non-Executive Directors
• Demonstrate independence and impartiality (other
than the Nominee Director)
• Bring experience and special expertise to the Board
• Constructively challenge the Executive Directors
• Monitor the delivery of the strategy within the risk and
control framework set by the Board
• Monitor the
integrity and effectiveness of the
Group’s financial reporting, internal controls and risk
management systems
Company Secretary
• Responsible for advising the Board and assisting the
Chair in all corporate governance matters
Leadership structure
Executive Management
Executive Management (the three Executive Directors)
is responsible for the day-to-day running of the business,
carrying out and overseeing operational management and
implementing the strategies the Board has set.
Senior Management
The Senior Management is small and agile and is made up
of the three Executive Directors and nine portal managers.
The Senior Management meets regularly and no less than
weekly. Portal managers come to any Board meetings
where their area is being discussed and are encouraged to
stay for the whole Board meeting.
ESG working group
We have expanded the ESG working group this year to
include two more employees and the group now consists of
five members, the three Executive Directors and two other
employees. The Chair, together with Non-Executive Director
Jurgita Kirvaitiene, serve as sponsors to the ESG working
group and are actively involved in its activities. The working
group met five times during the year and the key areas of
responsibility are:
• Climate change and business impact
• Energy management
• Environmental reporting requirements
• Culture and values
• Employee engagement and well-being
• Talent attraction and retention
• Diversity and Inclusion
• Access and affordability
• Local communities
• Data security
• Customer privacy
• Corporate governance and integrity
The Board is responsible for providing leadership to the
Group. The structure of the Board, its Committees and the
Executive Management ensures controls and oversight
with a balanced approach to risk aligned with the Group’s
culture.
The Board delegates certain matters to its three permanent
Committees, the Terms of Reference of which are available
on the Company website. The following shows the role of
each of the Board Committees:
Board Committees
Audit Committee
• Assists the Board in discharging its financial reporting
responsibilities
• External and internal audits and controls, including
reviewing and monitoring the integrity of the Group’s
Annual and Interim financial statements
• Reviewing and monitoring the extent of the non-audit
work undertaken by external auditors
• Advising on the appointment of external auditors
• Overseeing the Group’s relationship with its external
auditors
• Reviewing the effectiveness of the external audit
process
• Reviewing the effectiveness of the Group’s internal
audit, internal controls, whistle-blowing and fraud
systems
Remuneration Committee
• Assists the Board in determining its responsibilities in
relation to Executive Directors’ remuneration
• Makes recommendations to the Board on the
Company’s policy on Executive remuneration
• Determines the individual remuneration and benefits
package of each of the Executive Directors, the Chair
and members of the Executive Management team
(being the first layer of management below the level
of the Board and reporting to the CEO, including the
Company Secretary)
Nomination Committee
• Assists the Board in discharging its responsibilities
relating to the composition and make-up of the Board
and any Committees of the Board
• Responsible for periodically reviewing the Board’s
structure and identifying potential candidates to be
appointed as Directors or Committee members as the
need may arise
• Ensuring a diverse pipeline
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Division of Responsibilities continued
Division of Responsibilities continued
GOVERNANCE REPORT
Board activities throughout the year
The following table sets out some of the Board’s key activities during the financial year:
To be read in conjunction with the Section 172(1) table on page 19.
Area
Key Actions
Strategy and
operations
• Reviewed and approved the Company’s purpose, motto, values and strategic aims
• B2C and C2C pricing actions
• Reviewed peer pricing model – implications for future price and packaging actions
• Reviewed and approved M&A opportunities, including GetaPro acquisition
Links to1
S172(1)(a) to (f)
Stakeholder
group
(a), (b), (e), (f)
Investors
Suppliers
Consumers
and
Advertisers
Employees
Leadership and
employees
Finance and
Investor Relations
• Appointed Independent Non-Executive Director
(b)
Employees
• Approved the 2023 forecast
• Approved the Group’s Capital Allocation Policy
• Received reports and updates on investor relations activities
• Approved the report and financial statements for the year ending 2022
• Approved the final dividend payment for the year ending 2022
• Approved the interim dividend payment during 2023
• Approved the decision to enter into a Share buy-back programme
• Voluntary lending repayments
(a), (c), (e)
Investors
Suppliers
Consumers
and
Advertisers
Risk management
• Reviewed the risk register and suggested an approach for embedding risk
assessment into day-to-day thinking
• Reviewed the effectiveness of the external audit process and the internal audit
function
• Reviewed the Group’s internal controls systems, compliance function, anti-money
laundering systems and controls, as well as procedures for detecting fraud and
whistle-blowing procedures
Business
performance
• Reviewed strategic and operational performance
• Reviewed financial performance against budget
• Considered value-creating M&A opportunities
Governance
• Approved the Board effectiveness review action plan
• Approved the appointment of Company Secretary Egle Sadauskiene
• Reviewed and approved committees’ Terms of Reference, Matters Reserved for
the Board and Division of Responsibilities
• Approved changes to Whistle-Blowing Policy
ESG
• Approved six material areas of focus from the SASB Standards
• Approved a sixth strategic aim based on ESG
• Agreed to expand the remit and membership of the ESG working group
• Approved the Modern Slavery Statement
• Reviewed Gender Pay Gap
(a), (b), (c), (d),
(e)
(a), (c) (d), (e)
Investors
Suppliers
Consumers
and
Advertisers
(b), (c), (e), (f)
Investors
Employees
Suppliers
Consumers
and
Advertisers
Employees
Suppliers
Consumers
and
Advertisers
Investors
The following table summarises some of the Board activity and how it links to the culture of the organisation. For more
information on Board activity, Stakeholders and Section 172(1) Statement see page 19:
Board activity
Link to culture
Employee engagement survey
n e w
n e w
Chair and NED engagement sessions
CEO, CFO and COO directly responsible for workforce issues
To gain a deeper understanding of the perspective of the
employees and to learn more on what matters the most to
them.
The Chair and NEDs attended an in person employee
engagement session during the year and answered
questions set by the employees.
is
Ensuring the Board
intrinsically connected to the
employees. The Executive Directors work alongside the
workforce who have a direct connection to the Board and
understand that the culture is set from the top.
Employee matters including recruitment, retention, well-being
and diversity
Enables the Board to gauge the culture and to identify areas
where change is necessary to improve the culture.
Employee remuneration and rewards
Purpose and values
Open culture
Strategy of each of the four vertical business areas
Modern Slavery Statement and monitors the Gender Pay Gap
Discussions
in the Remuneration Committee enables
assessment and oversight to ensure that employees
remuneration and rewards are supportive of employees’
motivation.
Working with the team to build a collection of market-leading
businesses and strong brands. The digital marketplaces we
operate promote trust, fairness and efficiency.
The Board supports an open culture. BCG has a dynamic
and motivated team. We like to have fun and enjoy working
together and that is our superpower.
Gives the Board a chance to engage with the portal
managers directly to discuss all things in their business
areas including their markets, customer and employee
needs which enables knowledge sharing, motivation and
team building.
Enables assessment of the broader culture of the Group and
its relationships with suppliers and employees.
Key workforce-related policies including whistle-blowing and
conflicts of interest
Gives the Board oversight to ensure that policies reflect the
values and desired behaviours of employees.
Companies Act 2006, Section 172(1)
A director of a company must act in the way, he
considers, in good faith, would be most likely to
promote the success of the company for the benefit of
its members as a whole, and in doing so have regard
(amongst other matters) to the following factors:
(a) the likely consequences of any decision in the
long-term;
(b) the interests of the company’s employees;
(c) the need to foster the company’s business
relationships with suppliers, customers and
others;
(d) the impact of the company’s operations on the
community and the environment;
(e) the desirability of the company maintaining
a reputation for high standards of business
conduct; and
(f) the need to act fairly as between members of the
company.
1 Except for Senior Management
64
t For more on purpose, values and strategy see the
Strategic Report pages 17 to 18.
t For more on engagement with the workforce see
Engagement with our Stakeholders on page 59 and the
Statement of Engagement with employees on page 94.
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Division of Responsibilities continued
GOVERNANCE REPORT
Board and Committee meetings and
attendance
Board and Committee meetings are held either in person or
virtually.
The table below sets out attendance at the scheduled
meetings during the year. Attendance is expressed as the
number of scheduled meetings attended out of the number
of such meetings possible or applicable for the Director to
attend.
Board Director Board
Audit
Committee
Nomination
Committee
Remuneration
Committee
Trevor
Mather
Justinas
Šimkus
Lina
Mačienė
Simonas
Orkinas
10 / 10
5 / 51
3 / 3
4/ 4
10 / 10
5/ 51
3 / 31
4 / 41
10 / 10
5 / 51
3 / 31
4 / 41
10 / 10
5 / 51
3 / 31
4/ 41
obligations that may affect the time they are able to commit
to the Company. Each Director is responsible for informing
the Board of any external appointments or significant
commitments as they arise and these are considered and
monitored by the Chair.
The Chair’s approval is required prior to a Director taking on
any additional external appointment. The Chair’s approval
will only be given once the Chair is satisfied and the Director
confirms that, as far as they are aware, there are no conflicts
of interest.
Non-Executive Director Tom Hall is a partner of Apax Partners
and a director of other entities in which the funds advised
by Apax Partners have an interest. The Major Shareholder is
controlled by funds advised by Apax Partners.
Each Director’s biographical details and significant time
commitments outside of the Company are set out in the
Board biographies on pages 54 to 55.
Change in Directors’ commitments
Jurgita ceased working as an Internal Audit Consultant at
Baltic Economist UAB on 17 February 2023.
Ed Williams 10 / 10
5 / 5
3 / 3
4 / 4
Conflicts of interest
Tom Hall
9 / 10
5 / 51
2 / 3
4 / 41
Kristel
Volver
Jurgita
Kirvaitienė
10 / 10
5 / 5
3 / 3
4 / 4
9 / 92
5 / 5
2 / 22
4 / 4
During the period, the Non-Executive Directors held a
number of informal get togethers. In the event a Director
was unable to attend a meeting they still received all the
papers for the meeting and were updated on matters
discussed at the meeting.
External commitments
The Company is mindful of the time commitment required
from Non-Executive Directors in order to effectively fulfil
their responsibilities on the Board, particularly providing
constructive challenge and holding Management
to
account and utilising their diverse skills and experience to
benefit the Company and provide strategic guidance.
As part of any appointment process, prospective Directors
are asked to provide details of any other roles or significant
The Companies Act 2006 provides that Directors must
avoid a situation where they have, or can have, a direct or
indirect interest that conflicts, or possibly may conflict,
with the Company’s interests. Boards of public companies
may authorise conflicts and potential conflicts, where
appropriate, if their company’s articles of association
permit, which the Articles do.
The Board has established formal procedures for the
declaration, review and authorisation of any conflicts of
interest of Board members. As part of the induction process,
a newly appointed Director will be required to disclose
any conflicts of interest to the Company. Thereafter, each
Director has an opportunity to disclose conflicts at the
beginning of each Board and Committee meeting and as
part of an annual effectiveness review.
During the year, no Directors declared to the Company any
actual or potential conflicts of interest between any of their
duties to the Company and their private interests and/or
other duties, except in the case of the Executive Directors,
each of whom holds the position of Director of the Company
and director of a number of Group subsidiary companies.
1 Attended by invitation.
2 Jurgita Kirvaitienė appointed to Board 17 May 2022.
66
Board Composition, Succession and
Evaluation
Appointments to the Board
The Board is collectively responsible for the long-term
success of the Group. The business of the Group is
managed by the Board who may exercise all the powers
of the Company. The Board delegates certain matters
to the Board Committees and delegates the detailed
implementation of matters approved by the Board and the
day-to-day operational aspects of the business to its Senior
Management.
During the period under review, the Board was composed of
three Executive Directors and five Non-Executive Directors.
One Non-Executive Director represents a Major Shareholder,
for details on this see page 68. Biographies for each Director
are available on pages 54 to 55.
Code Principle
J Appointments to the Board
K Board composition
L Annual Board evaluation
67
67
70
Director appointment process:
During the year, the Board appointed Jurgita Kirvaitienė
as Independent Non-Executive Director. The appointment
process included the following stages:
Evaluate Board composition
and determine ideal capabilities of
proposed appointee
Evaluate the Board’s skills, experience, independence, diversity and knowledge
and utilise this to develop a specification which reflects the role and specific
capabilities required.
Advertise role and determine long list
of potential candidates
Advertise the role using open advertising and identify a long list of potential
candidates based on, amongst other things, experience, merit and diversity.
Refine short list of potential
candidates and complete interviews
Determine a short-list and invite the potential candidates to complete a formal
interview process. Interview process facilitated by various Board members but
specifically the Chair, Chief Executive Officer and Audit Committee Chair.
Consideration and approval by
Nomination Committee
Nomination Committee to consider the short-listed candidates and feedback
from the interview process from both interviewers and interviewee. Determine
the preferred candidate and recommend their appointment to the Board for
approval.
Consideration and approval by Board
Board to consider, and if thought fit, approve the proposed appointment of the
preferred candidate. Market announcement is made by the end of the next
working day following the Board’s decision.
Succession planning
Board composition
The Nomination Committee is responsible for succession
planning and continues to focus both on the optimal
composition of the Board and for emergency situation
planning.
For more on the Nomination Committee’s responsibilities to
succession planning, see page 73.
During the year, each Director participated in a diversity,
skills and experience analysis as part of a process to ensure
that the composition of the Board has the appropriate
balance of skills and experience to support its strategy and
purpose and to reflect its stakeholder base.
Factors that are taken into account when assessing the
composition of the Board include a broad range of diversity
characteristics as indicated below and particular skills
and experience considered to be relevant to this particular
Group in this sector. Board independence and tenure is also
considered.
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Board Composition, Succession and Evaluation continued
Board Composition, Succession and Evaluation continued
GOVERNANCE REPORT
Diversity characteristics
Age
3
1
30-35
35-40
45-50
55-60
1
3
Highest level of
education
7
1
Masters
Bachelors
Nationality
4
1
Lithuanian
British
Estonian
3
Figures above taken as at 30 April 2023
Gender Diversity
The Board is satisfied that it has the appropriate range of
skills, experience, independence and knowledge of the
Group to enable it to effectively discharge its duties and
responsibilities.
The matrix below details some of the key skills and
experience that the Board has identified as valuable to
the effective oversight of the Group and execution of its
strategy:
Board tenure
The Non-Executive Directors post IPO, were all appointed
on 2 June 2021, and Jurgita Kirvaitienė was appointed on
17 May 2022. The Chair will continue to monitor the tenure
of Board members and consider this as part of the broader
succession planning.
Full Board
Non-Executive
Directors
Executive
Directors
Independence
37.5%
62.5%
40.0%
60.0%
33.3%
66.7%
Male
Female
Male
Female
Male
Female
Figures above taken as at 30 April 2023
t See page 69 for the Listing Rule LR 9.8.6R(10) table on the
Diversity of the Board and Executive Management
Combination of skills and experience
as identified by the Board
Knowledge of operating
classifieds businesses
Pricing and packaging
Finance
M&A
8/8
6/8
5/8
7/8
Technology and innovation
4/8
Digital business
ESG
Cyber security
7/8
7/8
2/8
Figures above taken as at 30 April 2023
Independence
4
1
30 April
2023
Chair
Independent NED
Non-Independent Director
3
Figures above taken
as at 30 April 2023
The Code recommends that at least half the board of
directors of a company, excluding the Chair, should comprise
non-executive directors whom the board considers to be
independent. Noting that the Chair is only independent
upon appointment. As at the year-end date, the Company
did not comply with the Code requirement to have at least
half of the Board members as independent (Provision
11). We are confident that the current Board composition
provides a solid basis for our Board and is sufficient for
providing constructive challenge and an independent view
on the running of the Company. We will continue to monitor
the composition and diversity of the Board.
The balance of independence is in favour of the ‘Non-
Independent’ due to the role of Non-Executive Director
Tom Hall. Pursuant to the Relationship Agreement, the
Major Shareholder may appoint one Non-Executive Director
to the Board for so long as it (together with any of its
Associates) holds voting rights over 10% or more of the
Company’s issued share capital. The Major Shareholder’s
first appointed representative Director is Tom Hall. Tom Hall
is therefore not an Independent Non-Executive Director. If
the Major Shareholder’s shareholding fell below 10% then
Tom Hall would no-longer serve on the Board and the
Independent and Non-Independent Directors would equal 3
and 3 respectively plus the Chair.
The Major Shareholder will consult in advance with the
Nomination Committee regarding the identity of any Director
proposed to be nominated by it. In addition, for so long as
the Major Shareholder (together with any of its Associates)
holds voting rights over 10% or more of the Company’s
issued share capital, the Major Shareholder’s representative
Director shall be a member of the Nomination Committee
and shall be entitled to attend as an observer, all meetings
of the Audit Committee and the Remuneration Committee.
independence
The Company has complied with the
provisions included in the Relationship Agreement and, as
far as the Company is aware, the Major Shareholder has
complied with the independence provisions too.
Board diversity policy
Further to DTR 7.2.8A, the Board approved its Diversity
Policy in April 2022. The main objectives are, that:
1. The Board composition is sufficiently diverse and reflects
an appropriate balance of skills, knowledge, independence
and experience to enable it to meet its responsibilities and
duties and strategic objectives effectively.
2. Both appointments and succession plans should be
based on merit and objective criteria and, within this
context, should promote diversity of gender, social and
ethnic backgrounds, nationalities, cognitive and personal
strengths.
3. The Board will support workforce initiatives that promote
a culture of inclusion and diversity.
4. The Board will support the Committee in identifying
women and other underrepresented groups for promotion
into senior management roles.
The following pages outline how the diversity policy has
been implemented during the year and the progress made
during this financial year.
Diversity and inclusion progress during
the year
The Board considers a truly diverse Board, representative
of its Stakeholders, leads to better outcomes and improved
decision making. The Nomination Committee Report details
the context behind challenges the Company faces around
diversity and in particular, ethnic diversity. Please read this
on pages 73 to 74.
During the year the Group increased its female gender
representation on the Board from 28.5% to 37.5%.
We are also proud to have had a female Chief Financial
Officer in situ since before the IPO.
t For more on the Listing Rules comply or explain targets on
diversity and the Parker review recommendations, see the
Nomination Committee Report on pages 73 to 74.
During the year, the Company contributed to the FTSE
Women Leaders Review 2022, an initiative which aims to
increase female leadership within the FTSE 350. The Group
is proud to be acknowledged and ranked as 18th of the
Best Performers within the FTSE 250 and to be number two
within the Technology sector of the FTSE 350.
We continue to be an equal opportunities employer and we
recruit based on talent, skill and experience. For more on
our approach to diversity and inclusion see the Nomination
Committee Report on pages 73 to 74.
Board engagement with diversity and inclusion:
• Board skills and experience analysis and review
• Reviewed and approved the Board Diversity Policy
• Monitoring diversity levels across the organisation
t For more information on diversity and inclusion in the
workforce, see pages 38 to 39 in the Strategic Report.
Diversity of the Board and Executive
Management1 under Listing Rule LR
9.8.6R(10)
The following data was obtained by asking the Board and
Executive Management targeted questions relating to
gender and ethnicity.
Each individual was asked the same questions and was
asked to identify which category applied to them from ‘Table
a) Gender’ and from ‘Table b) Ethnic background’ below.
t For more information on the Company and diversity
targets, see the Nomination Committee report on pages
73 to 74.
The Board is satisfied that it has the appropriate range of
skills, experience, independence, and knowledge of the
Group to enable it to effectively discharge its duties and
responsibilities.
No of Board
members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
Executive
management1
Percentage
of Executive
Management1
Gender
Men
Women
Not specified/prefer not to say
Ethnic background
White British or other White
(including minority-white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/ prefer not to say
5
3
0
8
0
0
0
0
0
62.5
37.5
0
100
0
0
0
0
0
3
1
0
4
0
0
0
0
0
2
2
0
4
0
0
0
0
0
50
50
0
100
0
0
0
0
0
Figures above taken as at 30 April 2023
1 Executive management is defined here as the three Executive Directors and the Company Secretary.
68
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Board Composition, Succession and Evaluation continued
GOVERNANCE REPORT
Board training and professional
development
The Chair is responsible for ensuring that all of the Directors
are appropriately briefed on matters arising at Board
meetings and that they have full and timely access to
accurate and relevant information.
To enable the Board to discharge its duties, all Directors
receive sufficient information, including briefing papers
distributed in advance of their meetings.
The Committees of the Board have access to sufficient
resources to discharge their duties, including external
advisers and access to internal resources and personnel.
Where they judge it to be necessary to discharge their
responsibilities, Directors may obtain
independent
professional advice at the Company’s expense.
All Directors also have access to the advice of the Company
Secretary, who is responsible for advising the Board on all
governance matters.
Board Directors regularly receive updates to improve their
understanding and knowledge about the business and the
environment in which it operates. As part of the year end
reporting process, each Director is asked to identify skills
and experience areas where they excel and also those areas
where they feel they would benefit from additional training.
For more on this see page 68.
Board meetings generally include one or more presentations
from Senior Management on areas of strategic focus.
Specific business-related presentations are given to the
Board by Senior Management and external advisors when
appropriate. During the year the Board received Board
defence training from BAML.
Chair effectiveness
The Code states that, led by the Senior Independent Director
(the “SID”), the Non-Executive Directors should meet without
the Chair present at least annually to appraise the Chair’s
performance, and on other occasions as necessary. During
the year, the SID met with the Board members to discuss the
performance of the Chair and found no areas of concern.
Board Committees
The evaluation of Board Committee performance found
that all Committees were considered to be well chaired and
operating effectively. Further details of the composition,
role and activities of each Committee can be found on
pages 54 to 55 and page 63.
Annual General Meeting and Director
re-election
The Company’s Articles of Association specify that a
Director appointed by the Board must stand for election
at the first AGM subsequent to such appointment and at
each AGM thereafter, every Director shall retire from office
and seek re-election by Shareholders. This is in line with the
Code, which recommends that Directors should be subject
to annual re-election.
All Directors, having been appointed during the period under
review, will stand for election at the Company’s 2023 AGM.
The Board therefore recommends that Shareholders approve
the resolutions to be proposed at the Annual General
Meeting 2023 relating to the election of the Directors.
t The Board induction process and the Board effectiveness
review are discussed in the Nomination Committee
Report on page 75.
Audit, Risk and Internal Control
The Board’s objective is to give Shareholders a fair, balanced
and understandable assessment of the Group’s position and
prospects for the business model and strategy and it has
responsibility for preparing the Annual Report. The Board
is also responsible for maintaining adequate accounting
records and seeks to ensure compliance with statutory
and regulatory obligations. You can find an explanation
from the Directors about their responsibility for preparing
the financial statements in the Statement of Directors’
responsibilities in the Directors’ Report.
The Board, with the assistance of the Audit Committee,
monitors and oversees the Group’s risk management
process. At least twice a year the Board reviews and
approves the risks identified and the mitigation plan
suggested by the Executive Management.
The Board has established a management structure with
defined lines of responsibility and clear delegation of
authority. This includes controls relating to the financial
reporting process.
During the year, the main focus of the Audit Committee
was on the review of the effectiveness of both the internal
and external audit as well as reviewing the adequacy and
effectiveness of certain controls and procedures within the
Group.
Code Principle
M Effectiveness of external auditor and internal
audit and integrity of accounts
N Fair, balanced and understandable
assessment of Company’s prospects
O Internal financial controls and Risk
management
80
49
71
Key activities included:
• assessment of the Group’s going concern and viability
statements for 2022;
• reviewing and discussing key areas of financial
judgement in both ARA 2022 and HY report 2023;
• approval of updated GDPR policies;
• developing and implementing a formal policy on the
engagement of the external auditor to supply non-
audit services;
• reviewing the effectiveness of the external audit
process and the internal audit function; and
• reviewing the Group’s
internal controls systems,
compliance function, anti-money laundering systems
and controls, as well as procedures for detecting fraud
and whistle-blowing procedures.
t To see the full Audit Committee Report see page 76.
t For more on how the Board has assessed the Group’s longer-term viability see page 49.
t For more on the Going Concern and Viability Statement see page 78.
t For more on the Directors’ assessment of whether the Annual Report and Accounts is fair, balanced and understandable,
see page 79.
Remuneration
The Board is conscious that remuneration policies and
practices must be designed to support strategy and
promote the long-term sustainable success of the Group.
It delegates responsibility to the Remuneration Committee
to ensure that there are formal and transparent procedures
for developing policy on Executive remuneration and
determining Director and Executive Manager remuneration.
t To see the full Remuneration Committee Report see
page 82.
Code Principle
P Linking remuneration with purpose and
strategy
Q A formal and transparent procedure for
developing policy
R Independent judgment and discretion
82
82
82
70
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Baltic Classifieds Group PLC Annual Report and Accounts 2023 GOVERNANCE REPORT
Nomination Committee Report continued
GOVERNANCE REPORT
Nomination Committee Report
“
We are pleased to have been ranked
number two within the Technology
sector by the 2022 FTSE Women
Leaders Review.
Trevor Mather
Chair of the Nomination Committee
Nomination Committee membership
Trevor Mather - Chair - Appointed on 2 June 2021
Non-Executive Director
Kristel Volver - Appointed on 2 June 2021
Independent Non-Executive Director
Ed Williams - Appointed on 2 June 2021
Senior Independent Non-Executive Director
Tom Hall - Appointed on 2 June 2021
Non-Executive Director
Jurgita Kirvaitienė - Appointed on 17 May 2022
Independent Non-Executive Director
t Committee meeting attendance can be found on page 66.
t Committee Terms of Reference can be found on our corporate
website at: balticclassifieds.com/corporate-governance.
Key responsibilities
Main activities during the Year
Board and Executive Management Composition:
• review the structure, size and composition of the
Board, its committees and the Senior Management;
and
• evaluate the combination of skills, experience,
diversity, independence and knowledge on the Board,
its Committees and the Senior Management.
Succession planning:
• review the leadership needs of the organisation, both
Executive and Non-Executive Directors with a view to
ensuring the continued ability of the organisation to
compete effectively in the marketplace;
• ensure plans are in place for orderly succession to the
Board and the Senior Management positions, taking
into account the challenges and opportunities facing
the Group and the skills and expertise needed on the
Board and in the Senior Management team in the
future;
• have oversight over talent development with a view
to monitoring and overseeing the development of a
diverse pipeline within the Group; and
•
identify and nominate potential candidates for
Board vacancies as and when they arise, in line with
succession planning.
Board effectiveness:
• review the independence and time commitment of the
Non-Executive Directors;
• review and act upon the results of the Board
performance evaluation process and assess how
effectively members work
to achieve
objectives; and
together
• review the interaction between the Board and its
Committees.
Diversity and Inclusion:
• oversee diversity and inclusion across the Group and
monitor progress made against objectives.
Dear Shareholders
On behalf of the Board, I am pleased to present the
Company’s Nomination Committee Report, for the financial
year ending 30 April 2023.
Board gender and ethnicity
The appointment of Jurgita Kirvaitienė during the year
strengthened our female representation on the Board from
28.6% to 37.5%, including the Audit Chair, the CFO and one
Non-Executive Director. Jurgita’s appointment also brought
the number of
Independent Non-Executive Directors
(excluding the Chair) from two to three. We feel this is a
good foundation for offering constructive challenges and
independent oversight of the running of the Company.
During the year, the Committee has met three times and its
key activities were:
• appointment and induction of a new Independent
Non-Executive Director. For further detail about
the principles and process of our new Director
appointments, please see the ‘Appointment to the
Board’ section of the Corporate Governance Report on
page 67;
• to consider the external Board effectiveness review
recommendations and create an action plan;
• succession planning for the Board;
• reviewing the gender and ethnic diversity of the Board
and Senior Management;
• review and discussion of the gender pay gap and
measures required to reduce the gap; and
• review and recommendation of the Committee’s
Terms of Reference for approval by the Board.
Planning for the year ahead:
• considering Senior Management ethnic diversity
targets as proposed by the Parker Review;
• oversee the implementation of the selected Board
effectiveness review recommendations;
• continued succession planning of Board and Senior
Management team; and
• continued activities and monitoring around diversity.
With the introduction of Listing Rule 9.8.6, the Group must
comply or explain on three diversity targets. For more
on our compliance with this please see the Governance
Report on page 53 and specifically the table prescribed
by LR 9.8.6R(10) on page 69. We are already familiar with
the existing targets to have 40% female representation
on the Board by 2025 (FTSE Women Leaders target) and
to have one director from a minority ethnic group (as set
out in categories used by the Office for National Statistics
(“ONS”) by 2024 (the Parker Review). These factors are at
the forefront of our minds in terms of succession planning
and recruitment.
At this point in time, the Board is satisfied that it has the
appropriate range of skills, experience, independence, and
knowledge of the Group to enable it to effectively discharge
its duties and responsibilities. As we consider the potential
expansion of the Board we also need to consider:
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Nomination Committee Report continued
Nomination Committee Report continued
GOVERNANCE REPORT
The breadth of Board and Senior Management representation
has continued to be a focus for the Committee.
Estonia
• The ethnicity of the Board and its Senior Management
within the context of a Group which operates
throughout the Baltic region
• The succession planning for the Directors over a
longer period of time. We believe a small Board
is appropriate for an organisation of this size, and
ensuring that we induct new members at a rate that
ensures we do not create a problem for ourselves in
the future such that the tenure of Directors all come to
an end at similar times.
The technology sector is traditionally one which has difficulty
attracting female representation, and we are pleased to
have been ranked number two within the Technology sector
by the 2022 FTSE Women Leaders Review.
Senior Management and ethnic
diversity
The Parker review 2023 has asked all FTSE 350 companies
to set their own target for the percentage of their senior
management group who self-identify as being in an ethnic
minority group. Noting that the Parker review has asked for
these targets to be disclosed outside of our current financial
year in December 2023 and to be achieved in 2027, this
subject will be on the Nomination Committee agenda over
the coming months. Our aim is to report our intentions to the
Parker review by 31 December 2023 and to provide further
details in our Annual Report for the year ending 2024.
Ethnic diversity and the Baltic region:
Context and explanation
Ethnic diversity is an identifier for a minority population
sub-group which is broadly accepted to be a combination of
national origin, racial origin, and cultural identity. It is clear
that the minority or majority sub-groups of any population
will vary by country and region. Given that the Group
operates all business in the Baltic region, due consideration
should be given to the differences between the population
of the Baltic region and the diverse populations of the UK or
the US, for example.
National minorities are recognised in Lithuania, Estonia and
Latvia, and the ONS states that nationality is an aspect of
ethnicity, especially where significant migration has taken
place. See Figure 1 for the current ethnicity distribution in
each of Lithuania, Latvia and Estonia which are countries
relevant to the Group in terms of employees and Directors.
Here we can clearly see the ethnic diversity of these
countries includes principally white ethnic groups. In
terms of openness and transparency of our diversity and
inclusion, we feel this data is important to demonstrate
both the context and the pool of resources available to
the Group. Compliance with ethnic diversity targets is not
as straight-forward for the Group as it might be for those
entities located in the United Kingdom by comparison.
The Group will continue opening up the discussion around
diversity as is relevant for the Baltic region and will continue to
take into account its diversity targets when considering Board
appointments and hiring or promoting to leadership positions.
Figure 1.
Population by ethnicity
Lithuania
Latvia
Lithuanian 85%
Polish 5%
Russian 7%
Other 3%
Latvian 62%
Russian 24%
Belarussian 3%
Ukrainian 3%
Other 8%
Estonian 68%
Russian 22%
Ukrainian 4%
Other 6%
Source: Official Statistics Portal in Lithuania, Official
Statistics of Latvia, Statistics Estonia
t For more on this appointment process, see page 69.
t For information on the Board Diversity Policy, see page
69.
t Biographies for each Director are available on pages 54
to 55.
t For more information on the appointment of Jurgita
Kirvaitienė see page 67.
t Details of the key skills and experience that the Board
has identified as valuable to the effective oversight of
the Group and execution of its strategy can be found on
page 68.
Board Independence
The FRC UK Corporate Governance Code 2018 (the “Code”)
recommends that at least half the board of directors of
a company, excluding the Chair, should comprise Non-
Executive Directors whom the board considers to be
independent. At the year-end, excluding the Chair, our Board
was composed of three Executive Directors and four Non-
Executive Directors, three of whom are Independent.
t For Board training and development see the Governance
Report on page 70.
• explanation of the investor base and share register;
Key Action
Induction of Non-Executive Director
On joining the Board, it is the responsibility of the Chair and
the Company Secretary to ensure that all newly appointed
Directors receive a full and formal induction which is
tailored to their individual needs based on experience and
background.
For our newest Board member Jurgita Kirvaitienė, an
induction plan was implemented that included:
• a comprehensive overview of the business, company
culture and finances;
• detailed analysis of the existing governance
framework, including those documents prepared for
the IPO;
• presentation of the key legal and regulatory duties of
a Non-Executive Director;
•
•
introduction to key internal stakeholders including
Executive Directors and Portal Managers;
introduction to key external stakeholders;
and
• provision of Board and Committee meeting
constitutional documents including Terms of
Reference, Matters Arising and Minutes for the
previous 12 months.
Board Effectiveness Review
During the financial year, the Board participated in its first
externally facilitated Board effectiveness review carried
out by Round Governance Services (the “Reviewer”). The
Board is committed to an annual review of its own and
its Committees’ performance, with a formal externally-
facilitated effectiveness review carried out at least every
three years in compliance with the Code.
The Directors consider the evaluation of the Board and its
Committees and members to be an important aspect of
corporate governance.
1. Agreeing the parameters for the review: the Reviewer
met with key internal stakeholders to discuss
the context for the review; the objectives of the
Company; to finalise the approach for the review and
to agree the framework for the questions.
2. Review process:
a.
Document review: Included a full review of the
disclosures in the Annual Report and Accounts;
access to all Board and Committee meeting
minutes and Board governance documents
including Schedule of Matters Reserved for the
Board and Committees’ Terms of Reference.
b.
Questionnaires: A bespoke interactive
questionnaire was produced for the Company
which was shared with all Board members for
completion.
c.
d.
Individual interviews: Using the questionnaire
responses to guide the meetings (which were
held virtually), the Reviewer had meaningful
conversations with all Board members.
Report and recommendation: The initial report
was provided to the Company Secretary and the
Chair for comment. The report was accompanied
by a list of recommendations which were RAG
rated. The Company Secretary put an action plan
together based on these recommendations. The
report, the recommendations and the action plan
were presented to the Nomination Committee by
the Reviewer.
Key areas of focus following the Board
Effectiveness Review
Progress against the following recommendations will be
made during the next financial year and will be reported in
the next Annual Report and Accounts:
Who will take
responsibility
Board
Build upon the strategic objectives and
to ensure that purpose and strategic
objectives are considered in greater detail
against Board decision making
Board and Senior Management succession
planning with a particular focus on diversity
Nomination
Committee
Review the appropriateness of Director
development
Review the forthcoming agenda items to
ensure appropriate depth and breadth is
covered
Chair and
Company
Secretary
Chair and
Company
Secretary
Election and re-election of Directors
In accordance with the Code, all Directors will offer
themselves for re-election by Shareholders at the AGM. Both
the Committee and the Board are satisfied that all Directors
continue to be effective in, and demonstrate commitment
to, their respective roles on the Board and that each makes
a valuable contribution to the leadership of the Company.
The Board therefore recommends that Shareholders
approve the resolutions to be proposed at the 2023 AGM
relating to the election of the Directors.
I will be available at the AGM to answer any questions about
the work of the Nomination Committee.
The Nomination Committee Report is approved by the
Board and signed on its behalf by:
Trevor Mather
Chair of the Nomination Committee
28 June 2023
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Audit Committee Report continued
GOVERNANCE REPORT
Audit Committee Report
“
The Annual Report explains the Group’s
strategy, financial performance and
position in a way which is fair, balanced
and understandable.
Kristel Volver
Chair of the Audit Committee
Audit Committee membership
Kristel Volver - Chair - Appointed on 2 June 2021
Independent Non-Executive Director
Ed Williams - Appointed on 2 June 2021
Independent Non-Executive Director
Jurgita Kirvaitienė - Appointed on 17 May 2022
Independent Non-Executive Director
The Group’s external auditor is KPMG.
n e w
Deloitte is providing internal audit services.
t Committee meeting attendance can be found on page 66.
t Committee Terms of Reference can be found on our
corporate website at:
balticclassifieds.com/corporate-governance.
Key responsibilities
• Financial reporting:
• monitoring the integrity of the Group’s financial
reporting and the significant judgements contained
therein; and
• providing advice to the Board on whether the Annual
Report, taken as a whole, is fair, balanced and
understandable.
• Internal control and risk management:
• reviewing effectiveness of the Company’s internal
internal control and risk
financial controls and
management systems.
• Internal audit:
• overseeing the Company’s internal audit activities;
and
• monitoring and reviewing the effectiveness of the
internal audit function.
• External audit:
• conducting
the
tender process and making
recommendations to the Board about the appointment,
re-appointment and removal of external auditor;
• approving fees and terms of engagement of external
auditor;
• reviewing
and monitoring
external
auditor’s
independence and objectivity;
• reviewing the effectiveness of the external audit
process; and
• developing and
the
engagement of the external auditor to supply non-
audit services.
implementing policy on
Dear Shareholders
I am pleased to present my second Audit Committee
report to shareholders since the IPO of Baltic Classifieds
Group PLC in 2021. This report provides a summary of the
Committee’s role and activities for the financial year ended
30 April 2023 and sets out the work that the Committee has
performed in respect of this Annual Report.
Jurgita Kirvaitienė joined the Board and its Committees in
May 2022 and since her appointment and in accordance
with the FRC’s Corporate Governance Code (the “Code”),
the Committee is composed of three Independent Non-
Executive Directors. Both myself and Jurgita fulfil the
requirement for a Committee member to have recent and
relevant financial experience, and all three members (and
therefore the Committee as a whole) have competence in
consumer and digital businesses. The biographies of each
member of the Committee are set out on pages 54 to 55
with specific skills referenced on pages 68.
During the financial year ended 30 April 2023, there were five
Audit Committee meetings. All meetings were attended by
all three Committee members. The Group’s external auditor,
KPMG, attended all of the Audit Committee meetings held
during the financial year. The rest of the Board attended
the meetings by invitation. The external auditor has direct
access to me as the Audit Committee Chair to raise any
concerns outside of formal Committee meetings. The
Committee also periodically sets time aside to seek the
views of the external auditor, without the presence of
management.
Main activities during the year
During the financial year ended 30 April 2023 the Committee
met five times and its key activities were:
• assessing the Group’s going concern and viability
statements;
• reviewing and discussing key areas of financial
judgement in annual and half year reporting;
• approving updated GDPR policies;
• developing and implementing a formal policy on the
engagement of the external auditor to supply non-
audit services;
• reviewing the effectiveness of the external audit
process and the internal audit function;
• reviewing the Group’s
internal controls systems,
compliance function, anti-money laundering systems
and controls, as well as procedures for detecting fraud
and whistle-blowing procedures;
• considering a letter from the FRC’s Supervision
Committee relating to its review of the Company’s
Annual Report for 2022;
• approved ESG
targets and climate scenario
assessment for climate-related reporting; and
• reviewing the internal audit work programme for the
coming year.
Planning for financial year ahead
• review Company’s systems and controls for prevention
of bribery;
• approve the framework of responsibilities and policies
in regard to tax compliance and review effectiveness
of procedures for managing tax compliance risk; and
• consider the impact and timing of the BEIS Audit
regulatory changes or
Reform and any other
implications.
The Committee’s Terms of Reference include: monitoring the
integrity of the Group’s financial reporting, effectiveness of
the internal control and internal audit, and the independence
and effectiveness of external audit. The internal audit
function is outsourced to Deloitte, who provides the Group
with specialist expertise in delivering a risk-based review
programme.
During the year, the main focus of the Committee was on the
review of the effectiveness of both the internal and external
audit as well as reviewing the adequacy and effectiveness
of certain controls and procedures within the Group.
The Committee has reviewed the content in this Annual
Report and considers that it explains the Group’s strategy,
financial performance and position in a way which we
believe to be fair, balanced and understandable. Whilst
this Audit Committee Report contains some of the matters
addressed during the year, it should be read in conjunction
with the external auditor’s report on pages 97 to 102 and the
financial statements in general.
At the 2023 AGM, Shareholders will vote on the Board’s
recommendation to re-appoint KPMG as the Group’s
external auditor.
I will be available at the 2023 AGM to answer any questions.
Kristel Volver
Chair of the Audit Committee
28 June 2023
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Financial reporting
The Committee
the
responsible
appropriateness of the Group’s half-year report and annual
financial statements.
reviewing
for
is
In the preparation of the Group’s financial statements for
2023, the Committee assessed the accounting principles
and policies adopted, Alternative Performance Measures
used and whether management had made appropriate
estimates and judgments. In doing so, the Committee
into
discussed management
reports and enquired
judgments made. The Committee reviewed the reports
prepared by the external auditor on the 2023 Annual Report.
A special attention was paid to the accounting treatment of
the GetaPro acquisition. The external auditor was asked to
prioritise this area during their interim audit procedures so
the Committee would have confidence the accounting for
this acquisition was appropriate in the H1 2023 report.
The Committee, together with management, identified
significant areas of financial statement risk and judgement
as described below:
Significant area
Audit Committee action
Revenue recognition
As more fully described in note 7 to the financial statements,
the Group’s revenue is derived from listing fees on the
Group’s platforms, advertising, and financial intermediation
services. There are a number of different duration service
packages available for customers. In line with IFRS 15, the
Group recognises this revenue over time based on service
usage.
Revenue is an area of focus given its high value in the
financial statements, however there is no critical estimation
or judgement involved. The Group’s revenue is accounted
over time based on service usage.
The Committee reviewed the rationale and the process
implemented to account for the revenue based on usage
and disclosure around revenue recognition made by
management.
The Committee was satisfied with the explanations provided
and conclusions reached in relation to revenue recognition.
Recoverability of parent Company’s investment
in subsidiaries
The carrying amount of the parent Company’s investment
in its subsidiaries represents a significant majority of the
Company’s total assets.
The investment is not considered at risk of material
misstatement or subject to significant judgement, however
it is considered significant due to its size in relation to the
Company balance sheet.
Going concern and viability statement
The Directors must satisfy themselves as to the Group’s
viability and confirm that they have a reasonable expectation
that it will continue to operate and meet its liabilities as
they fall due. The period over which the Directors have
determined it is appropriate to assess the prospects of
the Group has been defined as five years. In addition, the
Directors must consider if the going concern assumption
is appropriate.
Carrying amount of goodwill
The Group has a significant balance of goodwill that arose
during acquisitions and it is considered to be a significant
estimate.
The Committee reviewed the assumptions made by
management, including the strong track record of profitable
growth and cash generation and was satisfied with the
assumptions made.
In assessing the validity of the viability and going concern
statements detailed on pages 49 and 108, the Committee
reviewed the work undertaken by management to assess
the Group’s resilience to the principal risks set out on pages
46 to 48 under various stress test scenarios.
The Committee discussed and agreed with management’s
proposal to extend the viability time period to five years. The
Committee was satisfied that sufficient rigour was built into
the process to assess going concern and viability over the
designated period.
An impairment review is performed of goodwill balances
by management on a ‘value in use’ basis. This requires
judgement in estimating the future cash flows and the time
period over which they occur, arriving at an appropriate
discount rate to apply to the cash flows as well as an
appropriate long-term growth rate. Each of these judgments
has an impact on the overall value of cash flows expected
and therefore the headroom between the cash flows and
carrying values of the cash generating units.
The Committee has reviewed the assumptions made
and judgments applied by management and, after due
discussion, was content with the outcome of the impairment
review.
Fair, balanced and understandable
At the request of the Board, the Committee has reviewed
the content of the Annual Report and considered whether,
taken as a whole, it is fair, balanced and understandable,
and provides the information necessary for Shareholders
to assess the Company’s position, performance, business
model and strategy. The Committee was provided with a
draft of the Annual Report and the opportunity to comment
where further clarity or information should be added. The
final draft was then recommended for approval by the
Board. When forming its opinion, the Committee had regard
to discussions held with management and reports received
from the external auditor.
Is the report fair?
•
Is the whole story presented and has any sensitive material been omitted that should have
been included?
• Are key messages in the narrative aligned with the KPIs and are they reflected in the financial
reporting?
Is the report balanced?
• Do you get the same messages when reading the front end and back end of the Annual
Report independently?
• Are threats identified and appropriately highlighted?
• Are the Alternative Performance Measures explained clearly with appropriate prominence?
• Are the key judgments referred to in the narrative reporting and significant issues reported
in this Committee Report consistent with disclosures of key estimation uncertainties and
critical judgments set out in the financial statements?
• How do these judgments compare with the risks that KPMG are planning to include in their
Auditor’s Report?
Is the report understandable?
•
Is there a clear and cohesive framework for the Annual Report?
• Are the important messages highlighted appropriately throughout the Annual Report?
•
•
Is the Annual Report written in easy-to-understand language and are the key messages
clearly drawn out?
Is the Annual Report free of unnecessary clutter?
Conclusion
Following its review, the Committee is of the opinion that the Annual Report, taken as a whole, is
fair, balanced and understandable and provides the information necessary for Shareholders to
assess the Group’s position, performance, business model and strategy.
Internal controls
The Committee’s responsibilities include assisting the
Board in its oversight of the Company’s system of internal
controls. This includes:
• reviewing annually the effectiveness of the Group’s
internal control framework;
• reviewing reports from the external auditors on any
issues identified in the course of their work, including
any
internal control reports received on control
weaknesses and ensuring that there are appropriate
responses from management; and
• reviewing reports from the Group’s outsourced internal
audit function and ensuring recommendations are
implemented where appropriate.
During 2023, the Audit Committee reviewed the Group’s
internal controls systems, compliance function, anti-money
laundering systems and controls, as well as procedures
for detecting fraud and whistle-blowing procedures and
recommended an improvement to the whistle-blowing
procedures which has already been implemented. The
Committee also reviewed the reports on control deficiencies
received from the external and internal auditors. A few
control weaknesses identified by the external auditors
were largely addressed by management and the Committee
received a periodic update on the progress of solving these
weaknesses. The management is also working on a plan
to address the recommendations from IT and revenue
recognition process internal audits.
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Internal audit
External auditor
Non-audit service
Policy
Deloitte provides an outsourced internal audit function to
the Group. They are accountable to the Audit Committee
and use a risk-based approach to provide independent
assurance over the adequacy and effectiveness of the
control environment.
During the year ended 30 April 2023 the internal audit
concentrated on IT systems audit. No significant failings
or weaknesses were identified however it was noted that
in some cases the control environment was not formal
enough. The Committee has discussed the findings and
recommendations with internal auditors and is working
with management on the best action plan. Internal auditors
also assessed the revenue recognition process and controls
around it. No major risks were identified, however it was
noted that several procedures are not formalised.
The Committee reviewed an internal audit plan for 2024
which will cover a range of core financial and operational
processes and controls, focusing on specific risk areas. The
Committee is reviewing Deloitte’s performance annually as
internal auditor with the first review having taken place in
March 2023.
FRC review
During the year the Financial Reporting Council (‘FRC’)
reviewed the Group’s 2022 Annual Report as part of its
routine monitoring of corporate reporting. The Company
received a letter from the FRC asking for a response
to tax disclosure-related questions. The
letter also
included suggestions concerning areas where the FRC
believes users of the accounts would benefit from minor
improvements to the Company’s existing disclosures. The
FRC’s Corporate Reporting Review team question led us to
review historic accounting of deferred tax amounts. As a
result, the Company has amended prior year comparisons
for deferred tax amounts as set out in note 3 to the financial
statements. The adjustment has no impact on the prior year
consolidated statement of financial position, consolidated
net cash flow or adjusted profitability. However, there is a
reduction of €1.3 million on reported profit for the previous
year.The Committee reviewed all correspondence between
the Company and the FRC and also discussed the matter
with our external auditor.
The FRC’s enquiries regarding the above are now complete.
It must be noted that the FRC review is limited to the
2022 Annual Report and it does not benefit from detailed
knowledge of our business or an understanding of the
into. Accordingly, the
underlying transactions entered
review and comments received from the FRC provide no
assurance that the Annual Report is correct in all material
respects.
One of the Committee’s roles is to oversee the relationship
with the external auditor, KPMG, and to evaluate the
effectiveness of the service provided and their ongoing
independence. The Committee received and discussed
KPMG’s audit report of the financial statements for the
financial year ended 30 April 2023. The Committee Chair
met with representatives from KPMG without management
present and also with management without representatives
of KPMG present, to ensure that there were no issues in the
relationship between management and the external auditor
to be addressed. There were none.
The Committee places great importance on ensuring that
the external audit is both high quality and effective. The
effectiveness of the external audit process is dependent on
several factors, including the quality, continuity, experience
and training of audit personnel; understanding of the
business model, strategy and risks; technical knowledge
and degree of rigour applied in the review processes of
the work undertaken; communication of key accounting
and audit judgements; together with appropriate audit risk
identification at the start of the audit cycle.
The first such formal evaluation of the performance and
effectiveness of the external auditor was carried out in
autumn of 2022. The Committee evaluated the effectiveness
of the audit process using a questionnaire, together with
input from management. Areas considered in the review
included the quality of audit planning and execution,
engagement with the Committee and management, quality
of key audit reports and the capability and experience of
the audit team. The Committee was satisfied that there
had been appropriate focus and challenge on the primary
areas of audit risk and concluded that the performance of
KPMG remained efficient and effective in its role. The next
evaluation is planned for autumn of 2023.
The recommendation to reappoint KPMG beyond the
financial year ending 30 April 2024 will depend on continuing
satisfactory performance and value for money.
Non-audit services provided by the
external auditor
The external auditor is primarily engaged to carry out
statutory audit work. There may be other services where
the external auditor is considered to be the most suitable
supplier by reference to their skills and experience. It is the
Group’s practice to seek quotes from more than one firm,
which may include KPMG, before engagements for non-
audit projects are awarded. Contracts are awarded based
on individual merits.
A formal policy on the engagement of the external auditor
to supply non-audit services was adopted by the Committee
in the autumn of 2022 to ensure that the provision of such
services does not impair the external auditor’s independence
or objectivity and will be assessed in line with FRC Ethical
and Auditing Standards.
Permitted services not subject to cap
Reporting required by law or regulation or where the
authority/regulator specified the auditor to provide the
service; reporting on iXBRL tagging of financial statements;
other services where time is critical and the nature of the
service would not compromise independence.
Permitted services subject to cap
Audit related services, e.g. review of interim financial
information; reporting on covenant or loan agreements and
government grants;
Prohibited services
In line with the FRC ethical standards, these are services
where the auditor’s objectivity and independence may be
compromised. Prohibited services are detailed in the FRC
Revised Ethical Standards 2019 and include tax services,
accounting services, internal audit services and valuation
services and financial systems consultancy.
The Audit Committee assesses threats to independence
and the safeguards applied in accordance with FRC’s
Revised Ethical Standard (2019) and approves all non-audit
services work which is not deemed “trivial”.
The Audit Committee assesses threats to independence
and the safeguards applied in accordance with FRC’s
Revised Ethical Standard (2019) and approves all non-audit
services work which is not deemed “trivial”.
A cap on the aggregate amount in any financial year of 70%
of the average audit fees paid to the audit firm in the last
three consecutive years applies.
Prohibited, with the exception of certain services which are
subject to derogation if certain conditions are met and will
be assessed going forward in line with the new FRC Ethical
and Auditing Standards.
No non-audit services were procured from KPMG during the financial year ended 30 April 2023.
Statement of compliance: The Statutory Audit Services for
Large Companies Market Investigation (Mandatory Use
of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014 (the “CMA Order”)
A competitive tender was carried out in 2019 and KPMG
was first appointed as statutory auditor of Group’s top
holding company preceding Baltic Classifieds Group PLC
for the year ended 30 April 2020. KPMG was contracted in
2021 to provide offering and Admission related reporting
accountant’s services and was also appointed as a statutory
auditor of the Company following its Admission to listing.
The current external audit engagement partner is Kate Teal.
The CMA Order has applied to the Company since
September 2021, when Baltic Classifieds Group PLC entered
the FTSE 250 index. The Company confirms it complied
with the requirement that the external audit contract is
tendered within the 10 years prescribed by UK legislation
and the Code’s recommendation. The Group confirms that
it complied with the provisions of the Competition and
Markets Authority’s Order for the financial year under review.
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GOVERNANCE REPORT
Directors’ Remuneration Report
“
The Committee believes that BCG
continues to be well served by its
simple, transparent and objective
remuneration arrangements
established at the IPO in 2021.
Ed Williams
Chair of the Remuneration Committee
Remuneration Committee membership
Ed Williams - Chair - Appointed on 2 June 2021
Independent Non-Executive Director
Kristel Volver - Appointed on 2 June 2021
Independent Non-Executive Director
Jurgita Kirvaitienė - Appointed on 17 May 2022
Independent Non-Executive Director
•
In line with the FRC UK Corporate Governance Code 2018 (the
“Code”), all three members of the Committee have relevant
business experience.
• The Chair of the Committee has previous experience chairing
the Remuneration Committee of another (at the time) FTSE 250
business and has attended dozens of Remuneration Committee
meetings in his capacities as CEO of Rightmove PLC and Chair
of Autotrader PLC.
• Board Chair, Executive Directors, Tom Hall (Non-Executive
Director) and third-party remuneration consultants attend
meetings by invitation.
• No individual takes part in any decision relating to their own
remuneration.
t Committee meeting attendance can be found on page 66.
t Committee Terms of Reference can be found on our corporate
website at: balticclassifieds.com/corporate-governance.
Key responsibilities
• Determines the policy for rewarding Directors and the
rest of the Senior Management (the “Remuneration
Policy”) and oversees how the Group implements the
Remuneration Policy.
• Oversees the level and structure of remuneration
arrangements for Senior Management, approves
share incentive plans and recommends them to the
Board and Shareholders.
• Reviews workforce remuneration and related policies
with the alignment of incentives and rewards with
culture.
In 2021 Deloitte was appointed as a remuneration advisor.
Deloitte
is a founding member of the Remuneration
Consultants Group and adheres to its Code in relation
to executive remuneration consulting in the UK. The
Committee is satisfied that the Deloitte engagement team,
which provided remuneration advice to the Committee,
does not have connections with Baltics Classified Group
PLC or its Directors. The Committee is satisfied that the
advice received is objective, independent and free of
undue influence. Deloitte’s fees are charged on a time and
materials basis. During the year, there were €8,234 fees
incurred (€35,523 in 2022) for advice provided by Deloitte
to the Committee. Deloitte also provides Internal Audit
services (see Audit Committee Report).
Dear Shareholders
On behalf of the Board, I am pleased to present the Directors’
Remuneration report for the financial year ended 30 April
2023.
The Directors’ Remuneration report comprises two sections:
Part 1: Annual statement: this statement being my annual
report on the activities of the Remuneration
Committee during the year; and
Part 2: Annual Remuneration Report: which explains how
the Directors have been rewarded during the financial
year ended 30 April 2023 and any other matters not
covered in the previous part. It will be subject to an
advisory vote at the 2023 AGM.
Remuneration compliance
This report complies with Schedule 8 of the Large and
Medium-sized Companies and Group (Accounts and
Reports) Regulations, the 2018 UK Corporate Governance
Code and the Listing Rules.
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Part 1: Annual Statement
As Chair of the Remuneration Committee and on behalf of
the Board, I am pleased to present our report on Directors’
remuneration for the financial year ended 30 April 2023.
The Directors’ Remuneration Policy was supported by
99.44% of our shareholders at our AGM in 2022. We take
this as support for key aspects of the policy including pay
set to reflect the local market norms, the absence of an
annual bonus, incentives aligned to shareholders through
the LTIP, alignment of benefits with the wider workforce, best
practice in relation to malfeasance, clawbacks, termination
of employment etc. An overview of the policy is set out in
the summary below.
Base salary
• Originally set (in 2021) as lower quartile of non-financial companies ranked 251 to 350 in the
FTSE350, adjusted downward to reflect the difference in purchasing power in Lithuania as
compared to the UK
• Phasing in of this base salary starting from approximately 70% of the target base salary at
IPO and increasing in four equal annual increments to reach the target salary by 2026
• Expectation of annual increases to base salary no higher than the average basic pay rise
for employees (likely to be significantly higher than among UK-based companies, as Baltic
standards of living converge on the average across the EU), plus the phasing in as described
above
Pensions
• The Company does not operate a pension scheme
Other benefits
• Other benefits are minimal and available on an equal basis to all employees
Annual bonus
• The Company does not operate an annual bonus scheme
Long Term Incentive Plan
(LTIP)
• Performance Share Plan. The executives each year will receive awards of €700,000 for the
CEO, €500,000 for the COO and €300,000 for the CFO, though awards may be made of up to
200% of the target base salary
• Vesting of awards is subject to the achievement of EPS targets announced at grant
• Scheme is designed to ensure the particular approach to capital return does not affect the
outcome for executives
• Shares required to be held for a further two years from the first date of vesting
Shareholdings, employment
contracts, malus and
clawback
• The CEO is required to hold €1m and the other Executive Directors €0.5m worth of shares,
with half of any vested shares needing to be retained by the executives should they be below
this level
• Conform to all governance requirements and best practice
the consistent
Our work during 2023 has been
implementation of the policy rather than making changes
or exercising discretion. The most notable aspects of
this have been (i) deciding an appropriate increase to
base salaries for the Chair and Executive Directors in the
context of lower local pay but significantly higher local
market pay rises and inflation (ii) setting the quantum of
the performance required to achieve any or all of the LTIP.
These are discussed below.
Pay and performance outcome for the
year ended 30 April 2022
Total remuneration
The Committee believes that BCG continues to be well
served by its simple, transparent and objective remuneration
arrangements established at the IPO in 2021.
Setting remuneration in general, and performance targets
in particular, has been challenging in many businesses in
recent years. In the case of BCG that has been exacerbated
with the war in Ukraine. Though we did not know it at the
time, the impact of world events has had remarkably limited
impact on the continued growth of the business though it
has undoubtedly had an impact on other KPIs, not least the
share price.
Fortunately, our policy, including choice of performance
targets, has stood up well. As a result, during the last
year, the Remuneration Committee has seen no reason to
change its policy in any regard nor to exercise discretion
in relation to past awards or any other historic aspects of
remuneration. All changes to remuneration for 2023 and
2024 therefore reflect the simple application of our policy
as approved by shareholders in 2022.
The company does not operate an annual bonus scheme.
The Long Term Incentive Plan (LTIP) is at an early stage,
with no prior awards having vested nor reached the end of
their performance period.
Key remuneration decisions
Non-Executive Director fees
The Board, excluding the Non-Executive Directors, undertook
a review of non-executive fees during the year. It was agreed
that fees for the non-executive director were reasonable but
should be increased by the same base percentage as for
Executive Directors and the Chair (though excluding any
increases relating to the five-year transition of Executive
Director base salaries referenced above).
Shareholder engagement
(all shareholders with more
largest 15
The Committee contacted the Company’s
shareholders
than 1%
ownership stake in the Company) explaining the proposed
Remuneration Policy in detail and offering the opportunity for
further discussion. Feedback was limited and characterised
by support for the simplicity of the arrangements (including
the absence of an annual bonus plan) and recognition of
the relatively unique Lithuanian context. A comment was
received regarding whether the performance targets set for
the previous awards were sufficiently stretching, feedback
which we hope we have addressed with the performance
targets for the latest LTIP awards.
2023 AGM
The Committee has continued to be mindful of the
requirements of the UK Corporate Governance Code
when developing and applying remuneration policy. The
Committee believes the current policy serves the interests
of the Company and shareholders well and looks forward
to receiving your support at the 2023 AGM for this
remuneration report.
Our Chair of the Board has served on the Remuneration
Committee since the IPO in order that the Committee
consisted of three independent non-executive directors
as required by the Governance Code. Now that the
Remuneration Committee has three other independent non-
executive directors, he has stood down from the Committee,
making the Committee’s membership consistent with
normal practice in FTSE 250 companies.
I would like to thank my fellow Committee members and the
Chair for their commitment and contribution.
Ed Williams
Chair of the Remuneration Committee
28 June 2023
Annual base salary review for the year ended 30
April 2024
Average pay rises within the Group (excluding the Directors)
were 12% in 2023. Given the inflation in the Baltics remains
high, a similar pay rise is planned for a considerable majority
of employees in 2024 as well.
The base salary or fee for each Director was increased from
1st May 2023 by 10%, which is lower than the average salary
increase across the business. It is high by UK standards,
reflecting the much higher level of inflation in Lithuania (all
Director salaries and fees are based on the considerably
lower rates of pay in Lithuania as compared to the UK).
In addition, Executive Director remuneration increased
according to the formula set out in the Remuneration Policy
as part of a planned, progress five-year unwinding of the
salary discount of the previous private company as we
move to normal, though modest, levels of public company
salaries (see Remuneration Policy summary on page 86).
Share awards and performance
conditions
Awards to Executive Directors for 2023 and planned for
2024 were made at the levels indicated in the Company’s
Remuneration Policy. Performance was and will continue
in 2024 to be based on an adjusted EPS1 metrics (see
Remuneration Policy summary on page 86 or page 91 of the
2022 Annual Report for full details).
In setting the targets the Remuneration Committee took
the view that, particularly at the top end, they should be
more demanding as compared to the three-year business
forecasts, than those set in our first two years as a public
company. Outside the Executive Directors, awards under
the LTIP in 2021 and then in 2022 were made to largely
separate groups of executives and key personnel with a view
to achieving relatively widespread employee involvement
but keeping the dilution impact on shareholders modest.
Based on this decision and the performance of the business
against targets over the last two years, we now have a
significant group of executives and key personnel who
can have a reasonable expectation that their awards under
previous LTIPs will be of value, with the first group able to
realise those potential benefits in 2024 and the Executive
Directors from 2026. Hence we believe that the LTIP is
achieving the retention objectives for which it was, in part,
designed.
Remuneration outside the Directors
The Remuneration Committee reviewed the CEO’s list of
proposed members of the LTIP and the levels of individual
awards. The Committee also reviewed senior management
remuneration generally, for internal consistency, and the
remuneration arrangements in relation to recently acquired
employees.
1 Adjusted EPS in the Director's Remuneration Report is basic EPS adjusted for M&A and other impacts as determined by the Committee and is different from adjusted EPS
measure described in the APMs note 5 on pages 118 to 119.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 GOVERNANCE REPORT
Directors’ Remuneration Report continued
Directors’ Remuneration Report continued
GOVERNANCE REPORT
Part 2: Annual Remuneration Report
The Remuneration Committee presents
the Annual
Remuneration Report, which together with the Chair’s
introduction on page 83, will be put to shareholders for an
advisory (non-binding) vote at the AGM to be held on 27
September 2023. Sections which have been subject to audit
are noted accordingly.
Pay and benefits
The Committee has implemented the Remuneration Policy
in accordance with the policy approved by shareholders
at the AGM on 28 September 2022. The table below sets
out the way the policy was implemented in 2023 and any
material changes in the way it will be implemented in 2024.
The Remuneration Committee reviewed the base salaries
for Executive Directors and the fees for the Chair with regard
to 2024. Inflation in Lithuania at the time of the review was
14.5% (April 2023). The Lithuanian Department of Statistics
only
inflation measures every
three months, the most recent rate was 13.1% (October -
December 2022 compared to the same period in 2021).
issues average wage
The considerable majority of employees in the business will
receive a pay rise of at least 10% for 2024.
The Remuneration Committee agreed to a 10% pay rise for
Executive Directors on top of the phased increase in base
salary explained previously. The Remuneration Committee
also agreed to a 10% pay rise for the Chair. The Board
proposed and agreed a 10% increase in all fees for Non-
Executive Directors.
Summary of approach to executive remuneration
Component of pay
Implementation for FY 2023
Implementation for FY 2024
Base salaries
PSP
• CEO: €302,500
• CFO: €181,500
• COO: €242,000
• CEO: €363,000
• CFO: €217,800
• COO: €290,400
•
In 2023 the Executives were awarded the
below values of three-year nominal cost share
options each:
• CEO: €700,000
• CFO: €300,000
• COO: €500,000
• Performance will be measured based on
adjusted EPS1 for 2025 of 7.5 € cents for 25%
to vest and then straight line to 8.5 € cents for
100% to vest
•
In 2024 the Executives will be awarded the
below values of three-year nominal cost share
options each:
• CEO: €700,000
• CFO: €300,000
• COO: €500,000
• Performance will be measured based on
adjusted EPS1 for 2026 of 9.5 € cents for 25%
to vest and then straight line to 12.0 € cents
for 100% to vest
NED fees
• Chair fee: €132,000
• Non-Executive Director base fee: €33,000
• Senior Independent Director: €2,750
• Audit and Remuneration Committee Chairs:
• Chair fee: €145,200
• Non-Executive Director base fee: 36,300
• Senior Independent Director: €3,025
• Audit and Remuneration Committee Chairs:
€8,250
€9,075
As a consequence, the future base salaries for Executive Directors as they transition to public company levels, will further be
increased by 10% for years 2025 to 2026 and may be subject to further market adjustment.
Migration route to standard
FY2022 (€ thousands)
FY2023 (€ thousands)
FY2024 (€ thousands)
FY2025 (€ thousands)
FY2026 (€ thousands)
Salary
LTIP
Max
rem
Salary
LTIP
Max
rem
Salary
LTIP
Max
rem
Salary
LTIP
Max
rem
Salary
LTIP
Max
rem
CEO
250
700
950
303
700
1,003
363
700
1,063
393
700
1,093
424
700
1,124
CFO
150
300
450
182
300
482
218
300
518
236
300
536
254
300
554
COO 200
500
700
242
500
742
290
500
790
315
500
815
339
500
839
1 Adjusted EPS in the Director's Remuneration Report is basic EPS adjusted for M&A and other impacts as determined by the Committee and is different from adjusted EPS
measure described in the APMs section on pages 118 to 119.
Single total figure for remuneration (audited)
The remuneration of the Directors of the Company during the financial year ended 30 April 2023 for time served as a Director is
as follows:
Base salary
and fees
(€ thousands)
PSP
(€ thousands)
Total
remuneration
(€ thousands)
Total fixed
remuneration
(€ thousands)
Total variable
remuneration
(€ thousands)
Executive Directors
Justinas Šimkus
Lina Mačienė
Simonas Orkinas
Non-Executive Directors
Trevor Mather
Ed Williams
Kristel Volver
Tom Hall
Jurgita Kirvaitienė
301
181
241
132
44
41
-
32
-
-
-
-
-
-
-
-
301
181
241
132
44
41
-
32
301
181
241
132
44
41
-
32
-
-
-
-
-
-
-
-
The remuneration of the Directors of the Company during the financial year ended 30 April 2022 for time served as a Director1
was as follows:
Base salary
and fees2
(€ thousands)
PSP
(€ thousands)
Total
remuneration2
(€ thousands)
Total fixed
remuneration2
(€ thousands)
Total variable
remuneration
(€ thousands)
Executive Directors
Justinas Šimkus
Lina Mačienė
Simonas Orkinas
Non-Executive Directors
Trevor Mather
Ed Williams
Kristel Volver
Tom Hall
220
152
183
99
33
31
-
-
-
-
-
-
-
-
220
152
183
99
33
31
-
220
152
183
99
33
31
-
-
-
-
-
-
-
-
PSP awards during the year (audited)
Nominal cost share options granted in the year under the PSP scheme are shown below.
Date of grant
No. of
shares
granted
Share
price used3
(€)
Face value
of award4
(€ thousands)
CEO
CFO
COO
12 July 2022
427,557
12 July 2022
183,239
12 July 2022
305,398
1.64
1.64
1.64
700
300
500
Multiple
of salary
231%
165%
207%
% award
vesting
at threshold
(% maximum)
Performance period5
25%
25%
25%
1 May 2022 - 30 April 2025
1 May 2022 - 30 April 2025
1 May 2022 - 30 April 2025
1 Executive Directors entered into service contracts on 3 June 2021 while Non-Executive Directors were appointed on 2 June 2021. Salary and fees in the table above are
provided for the whole financial year.
2 The figures shown in relation to 2022 for base salary and fees have been restated from those figures shown in the 2022 Annual Report to exclude employer’s social
security costs. The annual base salaries for the CEO, COO and CFO were €250,000, €200,000 and €150,000 respectively from the Admission only.
3 A 3-month average share price of £ 1.39 / € 1.64 was used.
4 Awards are determined based on a fixed monetary value.
5 PSP awards will normally be eligible to vest three years from grant (12 July 2025) based on performance over the three years to 30 April 2025 and continued employment.
Performance targets starting at adjusted EPS for 2025 of 7.5 € cents per share for 25% of the award and then in a straight line to 8.5 € cents per share for 100% vesting.
Adjusted EPS in the Director's Remuneration Report is basic EPS adjusted for M&A and other impacts as determined by the Committee and is different from adjusted EPS
measure described in the APMs section on pages 118 to 119.
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Directors’ Remuneration Report continued
Directors’ Remuneration Report continued
GOVERNANCE REPORT
Share options under PSP held by the Executive Directors and not exercised as at 30
April 2023 (audited)
Date granted
PSP awards
held as at 30
April 2022
Granted
Exercise
price (£)
PSP awards
held as at 30
April 2023
Vesting date
Expiry date
Justinas
Šimkus
PSP 2021
27 July 2021
364,611
PSP 2022
12 July 2022
Total:
Lina
Mačienė
-
364,611
PSP 2021
27 July 2021
156,262
PSP 2022
12 July 2022
Total:
Simonas
Orkinas
-
156,262
PSP 2021
27 July 2021
260,436
PSP 2022
12 July 2022
Total:
-
260,436
-
427,557
427,557
-
183,239
183,239
-
305,398
305,398
All the above PSP awards have a three-year service
condition attached and a performance condition that is
based on adjusted EPS measure:
• PSP 2021: performance target period 1 May 2023 - 30
April 2024 with a target of 4 € cents per share for 25%
of the award and then in a straight line to 5 € cents per
share for 100% vesting; and
• PSP 2022: performance target period 1 May 2024 - 30
April 2025 with a target of 7.5 € cents per share for
25% of the award and then in a straight line to 8.5 €
cents per share for 100% vesting.
Given that the first PSP awards have not yet vested, none
of the above awards have been exercised or have expired.
No variation was made to the share options already granted
during 2023.
Dilution of share capital by employee
share plans
All existing PSP awards can be satisfied from shares held
in the Baltic Classifieds Group PLC’s Employee Benefit Trust
(EBT). It is intended that the 2023 PSP awards will also be
settled from shares currently held in the EBT or planned to
be purchased into the EBT without any requirement to issue
further shares.
0.01
0.01
0.01
0.01
0.01
0.01
364,611
27 July 2024
27 July 2031
427,557
12 July 2025
12 July 2032
792,168
156,262
27 July 2024
27 July 2031
183,239
12 July 2025
12 July 2032
339,501
260,436
27 July 2024
27 July 2031
305,398
12 July 2025
12 July 2032
565,834
Share interests (audited)
Executive Directors are required to maintain a certain
minimum level of shareholding in the Company: €1 million
Euros for the CEO and €0.5 million Euros for other Executive
Directors. In relation to existing Executive Directors, the
minimum value of shareholding acts as a restriction on
selling shares to the extent that doing so would cause
the shareholding to fall below the minimum shareholding
guideline. All existing Executive Directors meet their
shareholding guideline. In the event of the appointment of
a new Executive Director with no shares or fewer shares
than the minimum shareholding guideline applied to them,
they will be expected to retain at least half of any award
of shares made to them by the Company that vest until
the guideline is met. Non-Executive Directors do not have
shareholding guidelines.
Awards held under the PSP are subject to a holding period
of two years after vesting.
The following table sets out the number of shares held or
potentially held by Directors (including their connected
persons where relevant) as at 30 April 2023, or at the date of
retiring from the Board.
Beneficially
owned shares
as at 30 April 20231
Number of awards
held as at 30 April
2023 under the
PSP conditional on
performance
Number of vested
but unexercised
nominal cost
options
Target
shareholding
guideline
(€ m)
Shareholding
value as
at 30 April 20232
(€ m)
Executive Directors
Justinas Šimkus
Lina Mačienė
Simonas Orkinas
Non-Executive Directors
Trevor Mather
Ed Williams
Kristel Volver
Tom Hall
Jurgita Kirvaitienė
20,000,000
1,940,128
2,500,000
4,614,418
4,910,936
515,151
-
-
792,168
339,501
565,834
-
-
-
-
-
TSR Performance
The following graph shows the TSR performance of the
Company for the financial year ended on 30 April 2023,
against the FTSE All-Share index. This peer group was
selected as it represents a broad equity market index, of
which the Company is a constituent. The TSR graph shows
the growth in the value of a hypothetical holding of £100
invested on 30 June 2021 and will be updated yearly with
the intention to build up to a 10-year rolling period in future
annual reports.
Baltic Classifieds Group PLC
FTSE All-Share
1
2
0
2
e
n
u
J
9
2
t
a
d
e
t
s
e
v
n
i
0
0
1
£
f
o
e
u
l
a
v
£
150
120
90
60
Aug
21
Dec
21
Apr
22
Aug
22
Dec
22
Apr
23
CEO remuneration
The following table summarises the CEO single figure. This
table outlines the proportion of PSP awards vesting in that
year as a percentage of the maximum opportunity. Like the
TSR chart, this table will be updated annually to build up to
a 10-year rolling period.
CEO single figure
CEO total remuneration (€ thousands)
PSP vesting (% of maximum)3
2023
301
-
2022
220
-
-
-
-
-
-
-
-
-
1.0
0.5
0.5
-
-
-
-
-
38.4
4.2
5.7
8.5
9.1
1.0
-
-
Percentage change in the remuneration
2022 was a transition year for the Group as it moved from
being a private to a listed company. The percentage changes
set out above are partly as a result of lower remuneration
(nil in the case of non-executive directors) in the first two
months of 2022 prior to IPO. Change in remuneration based
on annualised emoluments after IPO was 21% for Executive
Directors and 10% for Non-executive Directors.
The table below sets out the percentage change in the
remuneration of all the Directors of the Company compared
with the average of all employees between 2022 and 2023,
based on the figures shown in the single total figure for
remuneration tables above.
Change in salary and fees (%) 2023
Executive Directors
Justinas Šimkus
Lina Mačienė
Simonas Orkinas
Non-Executive Directors
Trevor Mather
Ed Williams
Kristel Volver
Tom Hall4
Jurgita Kirvaitienė5
Average employee
37%
19%
32%
34%
34%
34%
n/a
n/a
12%
1 Includes shares owned by connected persons. Only beneficially owned shares count towards the shareholding guideline. There have been no changes in share ownership
between 1 May 2023 and 29 June 2023.
2 Based on the share price at close of business on 28 April 2023 of £1.624 / €1.849.
3 No PSP awards vested during 2022 and 2023.
4 Tom Hall’s directorship is unpaid.
5 Jurgita Kirvaitienė started her directorship in 2023 (17 May 2022).
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GOVERNANCE REPORT
Directors’ Remuneration Report continued
GOVERNANCE REPORT
Relative importance of spend on pay
The following table shows the Group’s actual spend
on pay for all employees compared to distributions to
shareholders. The average number of full time equivalent
employees has also been included for context. Revenue and
Adjusted EBITDA have also been disclosed as these are two
key measures of Group performance.
2023
2022
(€ thousands)
Non-Executive Directors’ terms of
appointment
The NEDs do not have service contracts with the Company
but instead have letters of appointment. The date of
appointment and the most recent reappointment and the
length of service for each NED are shown in the following
table:
Date of appointment
Length of service
as at 2023 AGM
Employee costs
(refer to note 9 to the consolidated financial statements)
9,327
8,886
Trevor Mather
Dividends paid to shareholders
(refer to note 19 to the consolidated financial statements)
10,918
Purchase of own shares
(refer to note 18 to the consolidated financial statements)
5,775
-
-
Ed Williams
Kristel Volver
Tom Hall
2 June 2021
2 June 2021
2 June 2021
2 June 2021
Jurgita Kirvaitienė
17 May 2022
2 year
2 year
2 year
2 year
1 year
Average number of full time equivalent employees
(refer to note 9 to the consolidated financial statements)
131
126
Revenue
(refer to Consolidated statement of profit or loss and
other comprehensive income)
60,814 50,959
Adjusted EBITDA
(refer to note 5 to the consolidated financial statements)
46,045 39,281
CEO pay ratio
The Company has less than 250 employees in the UK and
therefore is not required to disclose the CEO pay ratio.
Pension entitlements
Payments for loss of office and/or
payments to former Directors (audited)
No payments for loss of office, nor payments to former
Directors were made during 2023 or 2022.
Executive Directors’ external
appointments
External appointments are listed on pages 54 to 55.
The Company does not operate a pension scheme.
Voting outcomes at AGMs
Executive Directors’ service contracts
The details of each Executive Director’ service contract are
noted in the following table:
Date of service contract
Notice period
Justinas Šimkus
3 June 2021
12 months
Lina Mačienė
3 June 2021
6 months
Simonas Orkinas
3 June 2021
6 months
The table below shows full details of the voting outcomes for
the Directors’ Remuneration Report and the Remuneration
Policy at the 2022 AGM:
Votes for
% Votes for
Votes against
% Votes against
Votes withheld1
Directors’
Remuneration Report
Remuneration Policy
295,996,665
289,702,212
99.44
97.77
1,678,577
6,618,726
0.56
0
2.23
1,354,304
The Remuneration Policy is unchanged from that appearing
on pages 79 to 94 of our 2022 Annual Report.
A shareholder vote on Remuneration Policy is not required
in 2023 AGM.
On behalf of the Board
Ed Williams
Chair of the Remuneration Committee
28 June 2023
1A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes cast ‘For’ and ‘Against’ a resolution.
Directors’ Report
The Directors of Baltic Classifieds Group PLC present their
report, together with the audited accounts for the year
ended 30 April 2023.
Directors’ Report disclosures
As permitted by Section 414C(11) of the Companies Act
2006, some matters required to be included in the Directors’
Report in accordance with the Companies Act 2006 ,
Listing Rule 9.8.4R of the Financial Conduct Authority’s
Listing Rules and the Large and Medium sized Companies
and Groups (Accounts and Report) Regulations 2008 (as
amended in 2013), have instead been included elsewhere in
this Annual Report.
These matters are cross referenced in the following table
and are incorporated by reference into this Directors’ Report:
Topic
Section of the report
Page
Fair review of the
Company’s business
Management Report, as defined
in the Directors’ Report
Principal risks and
uncertainties
Management Report, as defined
in the Directors’ Report
Strategy
Strategic Report
Business Model
Strategic Report
Gender Breakdown
Sustainability Report
Corporate Governance Report
Important events
impacting the business
Strategic Report
Likely future developments Strategic Report
Financial key performance
indicators
Financial review
Non-financial key
performance indicators
Financial review
Sustainability Report
16
46
18
16
39
68
10
18
20
20
26
Financial instruments
Notes to the consolidated
financial statements
131
Environmental matters
Sustainability Report
Employees with
disabilities
Employee engagement
Engagement with
suppliers, customers
and others in a business
relationship with the
Company
Sustainability Report
Strategic report
• Section 172(1) Statement
Corporate Governance Report
• Statement of engagement
with employees
• Engagement with our
Stakeholders
Strategic report
• Section 172(1) Statement
Social, community and
human rights issues
Strategic report
• Section 172(1) Statement
Natural Resources
Sustainability Report
Board activity and culture
Corporate Governance Report
Board diversity
Corporate Governance Report
• Nomination Committee
Report
Directors' induction and
training
Corporate Governance report
• Board Composition,
Succession and Evaluation
• Nomination Committee
Report
28
38
19
94
58
19
19
35
65
73
70
75
Topic
Section of the report
Page
Information required by Listing Rules 9.8.4(R)
Directors’ interests in
Shares
Going concern and
viability statements
Long-term incentive
schemes
Directors’ Remuneration Report
89
Strategic Report
49
Directors’ Remuneration Report
88
Information required by Listing Rules 9.8.6R(8)
Climate-related
disclosures
The Task Force for Climate-
Related Financial Disclosure
Report
30
Board diversity
Corporate Governance Report
69
Information required by Disclosure Guidance and
Transparency Rule 7.2
Corporate Governance
Statement 2023
Corporate Governance Report
53
Information required by Disclosure
Guidance and Transparency Rule 4.1.8
The Strategic Report and the Directors’ Report (or parts
thereof), together with sections of this Annual Report
incorporated by reference, are the “Management Report” for
the purposes of DTR 4.1.8
The Directors are required under the Companies Act 2006
to prepare a Strategic Report for the Company and Group.
The Strategic Report contains the Directors’ explanation of
the basis on which the Group preserves and creates value
over the longer term and the strategy for delivering the
objectives of the Group.
The Companies Act 2006 requires that the Strategic Report:
• contain a fair review of the Group’s business and
contain a description of the principal risks and
uncertainties facing the Group; and
• be a balanced and comprehensive analysis of the
development and performance of the Group’s business
during the financial year and the position of the Group’s
business at the end of that year, consistent with the
size and complexity of the business. The information
that fulfils the strategic report requirements is set out
in the Strategic Report on pages 2 to 49.
The Non-financial and sustainability information statement
on page 45 forms part of the Strategic Report.
The Strategic Report and the Directors’ Report, together
with the sections of this Annual Report incorporated by
reference, have been drawn up and presented in accordance
with and in reliance upon applicable English company law
and the liabilities of the Directors in connection with that
report shall be subject to the limitations and restrictions
provided by such law.
Corporate governance arrangements
During the financial year ended 30 April 2023, we have
applied the principles of good governance contained in
the UK Corporate Governance Code 2018 (the “Code”). Our
Compliance Statement for this financial year 2023 is on
page 53. Further details on how we have applied the Code
can be found in the Corporate Governance Report on pages
51 to 71.
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Directors’ Report continued
Directors’ Report continued
GOVERNANCE REPORT
Results and dividends
The financial statements set out the results of the Group
for the financial year ended 30 April 2023 and are shown
on page 103.
The Company declared an interim dividend on 7 December
2022 of 0.8 € cents per Ordinary Share which was paid on
25 January 2023. The Directors recommend a final dividend
of 1.7 € cents per Ordinary Share, bringing the total dividend
per Ordinary Share of 2.5 € cents for the year ended 30
April 2023. Subject to final approval by Shareholders of the
recommended final dividend, the dividend to Shareholders
for 2023 will total approximately €8.4 million. If approved,
the Company will pay the final dividend on 13 October 2023
to Shareholders on the register of members on 8 September
2023.
Antler EquityCo S.à r.l.
BlackRock, Inc
Kayne Anderson Rudnick Investment Management, LLC
Justinas Šimkus
These figures represent the number of shares and
percentage held as at the date of notification to the
Company.
No other notifications have been received between 30 April
2023 and 27 June 2023.
Board of Directors
Details of the Directors of the Company who were in office
during the year under review are set out on pages 54 and 55.
On 17 May 2022, the Board appointed Jurgita Kirvaitienė.
There were no resignations from the Board during the
financial year.
Powers of the Directors
Subject to the Company’s Articles of Association (the
“Articles”), the Companies Act 2006 and any special
resolution of the Company, the business of the Company is
managed by the Board, who may exercise all the powers of
the Company. In particular, the Board may exercise all the
powers of the Company to borrow money, to guarantee, to
indemnify, to mortgage or charge any of its undertakings,
property, assets and uncalled capital and to
issue
debentures and other securities and to give security for any
debt, liability or obligation of the Company or of any third
party.
Appointment and replacement of
Directors
The appointment and replacement of Directors is governed
by the Articles, the Code, the Companies Act 2006 and
related legislation.
Directors may be appointed by ordinary resolution of the
Shareholders, or by the Board. Appointment of a Director
from outside the Group is on the recommendation of
the Nomination Committee, whilst
internal promotion
is a matter decided by the Board unless it is considered
appropriate for a recommendation to be requested by the
Nomination Committee.
Substantial Shareholders
The table below shows the holdings in the Company’s issued
share capital which had been notified to the Company
pursuant to the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules. The information below
was correct at the date of notification. It should be noted
that these holdings may have changed since the Company
was notified.
Percentage of voting
right attached to Ordinary
Shares of £0.01
Nature of
holding
Date of notification
of interest
35.290000
Direct
25 January 2022
8.420000
Indirect
1 March 2023
9.945300
4.020784
Direct
Direct
23 December 2022
24 March 2023
Pursuant to the Relationship Agreement, the Major
Shareholder will be able to appoint one Non-Executive
Director to the Board for so long as it (together with any
of its Associates) holds voting rights over 10% or more of
the Company’s issued share capital. The Major Shareholder
will consult in advance with the Nomination Committee
regarding the identity of any Director proposed to be
nominated by it. The Major Shareholder’s first appointed
representative Director is Tom Hall.
A Director appointed by the Board holds office only until the
next annual general meeting of the Company and is then
eligible for reappointment. At every annual general meeting
of the Company, each Director shall retire from office and
may offer himself or herself for reappointment by the
members.
The Company may, by special resolution, remove any
Director before the expiration of their period of office.
The office of a Director shall be vacated if: (i) they resign;
(ii) their resignation is requested by all of the other Directors
(not fewer than three in number); (iii) they have been
suffering from mental or physical ill health and the Board
resolves that their office be vacated; (iv) they are absent
without the permission of the Board from meetings of the
Board (whether or not an alternative Director appointed by
them attends) for six consecutive months and the Board
resolves their office is vacated; (v) they become bankrupt;
(vi) they are prohibited by law from being a Director; (vii)
they cease to be a Director by virtue of the Companies Act
2006; or (viii) they are removed from office pursuant to the
Articles.
Directors’ indemnities and insurance
The Company maintains appropriate Directors’ and Officers’
liability insurance cover in respect of any potential legal
action brought against its Directors. The Company has also
indemnified each Director to the extent permitted by law
against any liability incurred in relation to acts or omissions
arising in the ordinary course of their duties. The indemnity
arrangements are qualifying indemnity provisions under the
Companies Act 2006 and were in force throughout the year.
Significant related party agreements
At no time during the financial year ended 30 April 2023,
did any of the Directors, any close members of a Director’s
family or any controlling Shareholder of the Company, have
a material interest in any contract with the Company or any
of its subsidiaries. There is no person with whom the Group
has a contractual or other arrangement that is essential to
the business of the Company.
Share capital
The Company’s authorised and issued Ordinary Share
capital as at 30 April 2023 comprised a single class of
Ordinary Shares of £0.01 each. As at 30 April 2023, the
Company had 496,963,165 Ordinary Shares in issue (net
of shares pending cancellation) and 3,600,000 were held
in Employee Benefit Trust. As at 27 June 2023, being the
last practicable date prior to publication of this report, the
Company’s issued share capital (net of shares pending
cancellation) comprised 496,045,965 fully paid Ordinary
Shares and 3,600,000 shares were held in Employee Benefit
Trust.
The Company was authorised by its shareholders at the
2022 AGM to purchase its own shares. During the financial
year the Company purchased and cancelled 3,429,240
Ordinary Shares (none of which were purchased off-market),
at a total cost of €5,776 thousand and representing 0.7% of
its issued share capital at the start of the year.
Details of the Ordinary Share capital and shares cancelled
during the year can be found in note 17 to the financial
statements.
Rights and restrictions attaching to
shares
The Company’s shares when issued are credited as fully paid
and free from all liens, equities, charges, encumbrances and
other interests. All shares have the same rights (including
voting and dividend rights and rights on return of capital)
and restrictions as set out in the Articles, described below.
Except in relation to dividends that may have been declared
and rights on liquidation of the Company, the Shareholders
have no rights to share in the profits of the Company.
The Company’s shares are not redeemable. However, the
Company may purchase or contract to purchase any of the
shares on market, subject to the Companies Act 2006 and
the requirements of the Listing Rules.
Subject to the Articles of Association, the Companies Act
2006 and other Shareholders’ rights, shares in the Company
may be issued with such rights and restrictions as the
Shareholders may by ordinary resolution decide, or if there
is no such resolution, as the Board may decide provided
it does not conflict with any resolution passed by the
Shareholders.
These rights and restrictions will apply to the relevant
shares as if they were set out in the Articles of Association.
Subject to the Articles of Association, the Companies Act
2006 and other Shareholders’ rights, unissued shares are at
the disposal of the Board.
Restrictions on transfer of securities in
the Company
There are no specific restrictions on the transfer of
securities in the Company, which is governed by its Articles
of Association and prevailing legislation, save as set out
below.
The transferor of a share is deemed to remain the holder
until the transferee’s name is entered in the register. The
Board can decline to register any transfer of any share that
is not a fully paid share. The Company does not currently
have any partially paid shares.
The Board may also decline to register a transfer of a
certified share unless the instrument of transfer: (i) is duly
stamped or certified or otherwise shown to be exempt
from stamp duty and is accompanied by a relevant share
certificate; (ii) is in respect of only one class of share; and
(iii) if to joint transferees, is in favour of not more than four
such transferees. Registration of a transfer of an uncertified
share may be refused in the circumstances set out in the
Uncertified Securities Regulations 2001.
The Company is not aware of any agreements between
Shareholders that may result in restrictions on the transfer
of securities.
Voting rights
Shareholders will be entitled to vote at a general meeting
whether on a show of hands or a poll, as provided in the
Companies Act.
Where a proxy is given discretion as to how to vote on a
show of hands, this will be treated as an instruction by the
relevant Shareholder to vote in the way in which the proxy
decides to exercise the discretion. This is subject to any
special rights or restrictions as to voting which are given
to any shares or upon which any shares may be held at the
relevant time and to the Articles of Association.
If more than one joint holder votes (including voting by
proxy), the only vote which will count is the vote of the
person whose name is listed first on the register for the
share.
Restrictions on voting
Unless the Directors decide otherwise, a Shareholder cannot
attend or vote at any general meeting of the Company
or upon a poll or exercise any other right conferred by
membership in relation to general meetings or polls if they
have not paid all amounts relating to those shares which
are due at the time of the meeting, or if they have been
served with a restriction notice (as defined in the Articles
of Association) after failure to provide the Company with
information concerning interests in those shares required
to be provided under the Companies Act 2006.
The Company is not aware of any agreements between
Shareholders that may result in restrictions of voting rights.
Change of control
The Group’s term loan and credit facility arrangements
contain provisions that, where the parties are unable
to agree the implications of any change of control, on
notice being given to the Group, the lenders may exercise
their discretion to require repayment of a loan under the
agreement concerned.
Post-balance sheet events
Details of post-balance sheet events are given in note 28 of
the consolidated financial statements.
Articles of Association
The Company has not adopted any special rules regarding
the appointment and replacement of Directors or the
amendment of the Articles of Association, other than as
provided for under UK company law.
The Company’s Articles may be amended by a Special
Resolution of the Company’s Shareholders. The existing
Articles of Association were adopted on 29 June 2021.
92
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Directors’ Report continued
Directors’ Report continued
GOVERNANCE REPORT
Company status and branches
Baltic Classifieds Group PLC is the holding company of the
Baltic Classifieds group of companies and has no branches.
It is listed on the London Stock Exchange main market with
a premium listing, and is registered in England and Wales
(company number 13357598).
Key Stakeholders
The long-term success of the Group is dependent on its
relationships with its key Stakeholders. On pages 58 to 60
we outline the ways in which we have engaged with key
Stakeholders, the material issues they have raised with us,
and how these issues have been taken into account in the
Board’s decision-making processes.
Statement of Engagement with Employees - Sch 7.11(1)(b)
Companies (Miscellaneous Reporting) Regulations 2018, –
Employee engagement
The engagement method used by the Board for the purposes
of Provision 5 of the Code is that the Executive Directors
take direct responsibility for workforce related issues and
the CEO, CFO and COO provide updates at every Board
meeting which includes relevant workforce updates. This
engagement method is effective due to the management
structure of the Group, the Board is particularly hands-on,
engaged and committed to ensuring that it understands the
composition and views of employees.
We have a dynamic and motivated team that likes to
have fun and enjoy working together. We believe this is
the cornerstone to our strength and continued long-term
success. It is vital for the Group’s long-term success that
we nurture an environment where people feel valued,
motivated, and able to develop.
At the year end, the Group had 148 employees (on a
headcount basis) and an experienced Senior Management
team with an average tenure at BCG of 14 years.
The Company is an equal opportunities employer and
we are working hard to create an environment for our
employees that is free from discrimination, harassment,
and victimisation, reflecting our commitment to creating
a diverse workforce and an inclusive environment that
supports all individuals irrespective of their gender, age,
race, disability, sexual orientation, or religion.
This statement should be read
in conjunction with
Engagement with our Stakeholders on page 58, the Non-
Financial information and sustainability statement on page
45 and Board principal decisions on page 58.
Statement of Engagement with Other Business
Relationships - Sch 7.11B(1) Companies (Miscellaneous
Reporting) Regulations 2018
The Directors have regard for the need to foster the
Company’s business
suppliers,
customers and others, and the effect of that regard,
including on the principal decisions taken by the Company
during the financial year.
relationships with
This statement should be read
in conjunction with
our Section 172(1) Statement of Engagement with
our Stakeholders on page 58, the Non-financial and
sustainability information statement on page 45 and Board
principal decisions on page 58.
Political donations
There were no political donations made during the financial
year (£nil in previous financial year).
Research and development activities
The Company has dedicated in-house software design
and development teams, with primary focus on IT and
improvements to customer interfaces.
Greenhouse Gas Emissions
In line with our commitment to transparent and best practice
reporting, we have included a Sustainability Report on page
26. This includes our Task Force on Climate-related Financial
Disclosures (“TCFD”) and our Streamlined Energy and
Carbon Reporting (“SECR”) disclosures on pages 30 to 37,
along with our annual GreenHouse Gas (“GHG”) emissions
footprint and an intensity ratio appropriate for our business,
which fulfil the requirements of the Companies Act 2006
(Strategic and Directors’ Report) Regulations 2013.
Future developments of the business
The Group’s likely future developments including its strategy
are described in the Strategic Report on page 18.
Going concern and viability
The Group’s Going Concern Statement is contained within
the consolidated financial statements on pages 108 to 109.
The long-term Viability Statement is set out on page 49.
Update statement
At the 2022 Annual General Meeting held in September
2022, all resolutions were successfully passed with the
requisite majority. However, there was a significant vote
against Resolution 17 relating to the waiver granted by
the Panel on Takeovers and Mergers in relation to share
buyback authority.
Since the AGM, the Company's Executive Management have
contacted all major investors inviting them to discuss this
resolution and to share any concerns they had in relation to
it. The management held discussions with a few investors
that expressed their wish to engage and clarified their
reasons for voting against. Management will continue to
take into consideration all regulatory, legal and governance
code requirements when making decisions that are in the
best interest of the Company.
Annual General Meeting
Baltic Classifieds Group PLC’s 2023 AGM will be held
at Saltoniškių st. 9B, LT-08105 Vilnius, Lithuania on 27
September 2023 at 11.00 am local time. The Notice of the
Meeting together with explanatory notes is contained in
the circular to Shareholders that accompanies the Annual
Report and Accounts.
In the event we receive 20% or more votes against a
recommended resolution at a general meeting, we would
announce the actions we intend to take to engage with
our Shareholders to understand the result in accordance
with the Code. We would follow this announcement with
a further update within six months of the meeting, with an
overview of our Shareholders’ views on the resolutions and
the remedial actions we have taken.
The Company will, at the AGM, continue to seek authority
to allot shares on the basis of the authorities sought in the
2022 General Meeting.
Power for the Company to buy-back its
shares
The Company proposes to seek authorisation from
its Shareholders at its AGM on 27 September 2023 to
purchase in the market up to 10% of its issued Ordinary
Shares (excluding any treasury shares), subject to certain
conditions laid out in the authorising resolution. This
standard authority is renewable annually.
Disclosure of information to the auditor
KPMG LLP was re-appointed as the Group’s auditor
(pursuant to the passing of Resolution 13 at the 2022 AGM).
In accordance with Section 418 of the Companies Act
2006, the Directors who held office at the date of approval
of this Directors’ Report confirm that, so far as they are
each aware, there is no relevant audit information of which
the Company’s auditor is unaware and that each Director
has taken all the steps that they ought to have taken as a
Director to make themselves aware of any relevant audit
information and ensure that the auditor is aware of such
information.
Statement of Directors’ responsibilities
in respect of the Annual Report and
Accounts
The Directors are responsible for preparing this Annual
Report and Accounts and for the Group and parent Company
financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare Group and
parent Company financial statements for each financial
year. Under that law they are required to prepare the Group
financial statements
in accordance with UK-adopted
international accounting standards and applicable law
and have elected to prepare the parent Company financial
statements in accordance with UK accounting standards
and applicable law, including FRS 102 The Financial
Reporting Standard applicable in the UK and Republic of
Ireland.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
parent Company and of the Group’s profit or loss for that
period. In preparing each of the Group and parent Company
financial statements, the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgments and estimates that are reasonable,
relevant, reliable and prudent;
• for the Group financial statements, state whether they
have been prepared in accordance with UK-adopted
international accounting standards;
• for the parent Company financial statements, state
whether applicable UK accounting standards have
been followed, subject to any material departures
disclosed and explained in the parent Company
financial statements;
• assess the Group and parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and
• use the going concern basis of accounting unless
they either intend to liquidate the Group or the parent
Company or to cease operations, or have no realistic
alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report and Corporate
Governance Statement that complies with that law and
those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency
Rule 4.1.14R, the financial statements will form part of the
annual financial report prepared using the single electronic
reporting format under the TD ESEF Regulation. The
auditor’s report on these financial statements provides no
assurance over the ESEF format.
Directors’ confirmations
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance
with the applicable set of accounting standards, give
a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the
undertakings included in the consolidation taken as a
whole; and
• the Strategic Report includes a fair review of the
development and performance of the business and the
position of the issuer and the undertakings included
in the consolidation taken as a whole, together with
a description of the principal risks and uncertainties
that they face.
We consider the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for Shareholders to assess the
Group’s position and performance, business model and
strategy.
The Directors’ Report is approved by the Board and signed
on its behalf by
Justinas Šimkus
Chief Executive Officer
28 June 2023
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97
Independent Auditor's report to the members of Baltic Classifieds Group PLC
103 Consolidated Statement of Profit or Loss and Other Comprehensive Income
104 Consolidated Statement of Financial Position
105 Consolidated Statement of Changes in Equity
106 Consolidated Statement of Cash Flows
107 Notes to the consolidated financial statements
• Going concern
139 Company Statement of Financial Position
140 Company Statement of Changes in Equity
141 Notes to the Company financial statements
FINANCIAL STATEMENTS
Independent auditor’s report to the
members of Baltic Classifieds Group PLC
1. Our opinion is unmodified
We have audited the financial statements of Baltic
Classifieds Group PLC (“the Company”) for the year
ended 30 April 2023 which comprise the Consolidated
Statement of Profit or Loss and Other Comprehensive
Income, Consolidated and Company Statement of Financial
Position, Consolidated and Company Statement of Changes
in Equity, Consolidated Statement of Cash Flows, and the
related notes, including the accounting policies in note 4.
In our opinion:
• the financial statements give a true and fair view of
the state of the Group’s and of the parent Company’s
affairs as at 30 April 2023 and of the Group’s profit for
the year then ended;
• the Group financial statements have been properly
prepared in accordance with UK-adopted international
accounting standards;
• the parent Company financial statements have been
properly prepared in accordance with UK accounting
standards, including FRS 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland;
and
• the financial statements have been prepared
in
accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities are described below. We believe
that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on 17
August 2021. The period of total uninterrupted engagement
is for the two financial years ended 30 April 2023. We have
fulfilled our ethical responsibilities under, and we remain
independent of the Group in accordance with, UK ethical
requirements including the FRC Ethical Standard as applied
to listed public interest entities. No non-audit services
prohibited by that standard were provided.
Overview
Materiality:
group financial
statements as a whole
€0.90m (2022:€0.60m)
3.4% (2022: 3.4%)
of Group profit before tax (2022:
Normalised profit before tax)
Coverage
98% (2022:87%)
of Group profit before tax
Key audit matters
vs 2022
Recurring risks
New:
Advertising and
Listings revenue
New:
Recoverability of parent
Company’s investment
in subsidiaries
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional
judgement, were of most significance in the audit of the
financial statements and include the most significant
assessed risks of material misstatement (whether or not
due to fraud) identified by us, including those which had the
greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit
matters, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit
procedures to address those matters and, as required for
public interest entities, our results from those procedures.
These matters were addressed, and our results are based on
procedures undertaken, in the context of, and solely for the
purpose of, our audit of the financial statements as a whole,
and in forming our opinion thereon, and consequently are
incidental to that opinion, and we do not provide a separate
opinion on these matters.
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FINANCIAL STATEMENTS
The risk
Our response
Advertising and
Listings revenue
(€57.48 million; 2022:
€47.46 million)
t Refer to page 78
Audit Committee
Report, pages 110-111
accounting policy
and pages 120-121
note 7 of financial
disclosures.
2023 Sales:
The key revenue streams, being Advertising
and Listings, consist of fees for advertising
and listings of products and services on the
Group’s portals. There are a high volume of
transactions, no significant concentration
of customers and a variety of set packages.
Customers have the ability to select the
combination of products they receive.
There are pressures on achieving external
expectations of results and therefore a risk
of fraudulent revenue recognition around
the financial year date.
consider
addition, we
In
revenue
recognition from advertising and listings
fees to be a key audit matter as it is the
main driver of the Group’s results and its
size is reflected in the allocation of our
resources in planning and executing the
audit.
Recoverability of
parent Company’s
investment in
subsidiaries
(€509.6 million; 2022:
€508.1m)
t Refer to page 78 Audit
Committee Report,
page 142 accounting
policy and page 143
note 4 of financial
disclosures.
Low risk, high value:
The parent Company holds a direct
investment in BCG Holdco Limited and an
indirect investment in the Group’s trading
subsidiaries. The carrying amount of
the parent Company’s investment in its
subsidiary represents 83.7% (2022: 81.5%)
of the Company’s total assets.
Their recoverability is not at high risk of
significant misstatement or subject to
judgement. However, due
a significant
to their materiality in the context of the
parent Company financial statements,
this is considered to be the area that had
the greatest effect on our overall parent
Company audit.
We issued audit instructions to component auditors
to perform the following tests below rather than
seeking to rely on the Group's controls, because our
knowledge of related IT controls indicated that we
would be unlikely to obtain the required evidence to
support reliance on controls.
Our procedures around the financial year end date
included:
• tests of detail: inspecting a sample of credit
notes raised post year end to confirm that
revenue recognised in the year is not reversed
subsequent to the year end; and
• tests of detail: performed cut-off testing for
a sample of revenue items recognised in the
month prior to year-end to determine that
revenue was recognised in the correct period in
which the performance obligation was fulfilled.
Additional procedures included:
• analytic sampling: obtaining all journals posted
to revenue and analysing those entries with
unusual attributes or those with corresponding
postings to unexpected accounts. Agreeing
any journals identified to relevant supporting
documentation; and
• analytical procedure: comparing
revenue
recorded in the year to cash received, trade
receivables (including accrued income) and
contract liabilities outstanding at the year end.
Our results
We found the amount of Advertising and Listings
revenue recognised to be acceptable.
We did not seek to place reliance on the Company’s
controls in our response due to the nature of the
balance and of the risk.
Our procedures included:
• Comparing valuations: Comparing the carrying
investment to the market
amount of the
capitalisation of the Group to identify any
indicators of impairment.
Our results
We found the Company’s conclusion that there is no
impairment of the investment in subsidiaries to be
acceptable.
The Key Audit Matters in the prior year relating to Initial Public Offering (“IPO”) and Group restructure is no longer a Key Audit
Matter as it related to one off transactions in 2022.
3. Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole
was set at €0.90m (2022: €0.60m), determined with
reference to a benchmark of Group profit before tax (of
which it represents 3.4% (2022: 3.4%)). Group profit before
tax in 2022 was normalised to exclude non-recurring costs
relating to free share awards, the IPO costs and Senior
Facility Agreement early repayment fine and upfront fee
write off (note 8).
Materiality for the parent company financial statements
as a whole was set at €0.25m (2022: €0.21m), which is the
component materiality for the parent company determined
by the Group audit engagement team. This is lower than
the materiality we would otherwise have determined with
reference to parent company total assets, of which it
represents less than 1%.
In
line with our audit methodology, our procedures
on individual account balances and disclosures were
performed to a lower threshold, performance materiality, so
as to reduce to an acceptable level the risk that individually
immaterial misstatements in individual account balances
add up to a material amount across the financial statements
as a whole.
Performance materiality was set at 65% of materiality for the
financial statements as a whole, which equates to €0.59m
(2022: €0.39m) for the Group and €0.16m (2022: €0.13m)
for the parent company. We applied this percentage in our
determination of performance materiality based on the level
of identified misstatements and entity and process control
deficiencies during the period.
We agreed to report to the Audit Committee any corrected
or uncorrected identified misstatements exceeding €0.05m
(2022: €0.03m), in addition to other identified misstatements
that warranted reporting on qualitative grounds.
Of the group's 8 reporting components, we subjected 3
(2022: 3) to full scope audits for Group purposes and 1
(2022: 1) to specified risk-focused audit procedures. The
latter was not financially significant enough to require a full
scope audit for group purposes, however we included to
increase our audit coverage of Group profit before tax.
The components within the scope of our work accounted
for the percentages illustrated opposite.
For the residual components, we performed analysis at an
aggregated group level to re-examine our assessment that
there were no significant risks of material misstatement
within these.
The Group team instructed component auditors as to the
significant areas to be covered, including the relevant risks
detailed above and the information to be reported back.
The Group team approved the component materialities
which ranged from €0.70m to €0.25m (2022: €0.50m to
€0.21m), having regard to the mix of size and risk profile of
the Group across the components.
The Group team visited two (2022: nil) component locations
in Lithuania and Estonia, to evaluate the adequacy of the
component auditors audit documentation. Video and
telephone conference meetings were also held with these
in scope component auditors. These meetings involved
explanation of Group audit instructions, involvement in
planning audit procedures, discussing progress updates
and emerging findings, reviewing outcomes of testing
performed and discussing audit findings. The Group audit
team reviewed the audit documentation of component
audits through various stages of their audits. The Group
team also attended component virtual closing meetings.
At these visits and meetings, the findings reported to the
Group team were discussed in more detail, and any further
work required by the Group team was then performed by the
component auditor.
The work on 2 of the 3 components (2022: 2 of the 3
components) was performed by component auditors and
the audit of the parent company was performed by the
Group team.
The scope of the audit work performed was predominately
substantive as we placed limited reliance upon the Group's
internal control over financial reporting.
Group profit before tax
€26.37m (2022 Normalised Group
profit before tax: €17.91m)
Group materiality
€0.90m (2022: €0.60m)
€26.37m
(2022:€17.91m)
Normalised PBT
Group materiality
€0.90m
Whole financialstatements materiality
(2022: €0.60m)
€0.59m
Whole financialstatements performance
materiality (2022: €0.39m)
€0.70m
Range of materiality at 3 components
(€0.25m to €0.70m)
(2022: (€0.21m - €0.50m)
€0.05m
Misstatements reported to the Audit
Committee (2022: €0.03m)
Group revenue
Group profit before tax
24
33
98%
(2022: 87%)
54
74
95%
(2022: 94%)
95
94
Group total assets
99%
(2022: 99%)
99
99
Full scope for group audit purposes 2023
Specified risk-focused audit procedures 2023
Full scope for group audit purposes 2022
Specified risk-focused audit procedures 2022
Residual components
4. The impact of climate change on our audit
We have considered the potential impacts of climate
change on the financial statements as part of planning our
audit. We performed a risk assessment of the impact of
climate change risk and of the Group’s processes in place
to identify and assess risks relevant to the Group and its
financial reporting.
Taking into account the nature of the business operations,
our risk assessment of climate change to long term assets
and the solvency of the Group we did not identify any risks
that significantly impact the financial statements of the
Group or our audit.
We read the disclosure of climate related information in the
front half of the annual report and considered consistency
with the financial statements and our audit knowledge.
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FINANCIAL STATEMENTS
5. Going concern
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the
Group or the Company or to cease their operations, and as
they have concluded that the Group’s and the Company’s
financial position means that this is realistic. They have
also concluded that there are no material uncertainties
that could have cast significant doubt over their ability to
continue as a going concern for at least a year from the date
of approval of the financial statements (“the going concern
period”).
We used our knowledge of the Group, its industry, and the
general economic environment to identify the inherent risks
to its business model and analysed how those risks might
affect the Group’s and Company’s financial resources or
ability to continue operations over the going concern period.
The risks that we considered most likely to adversely affect
the Group’s and Company’s available financial resources
and metrics relevant to debt covenants over this period
were:
• Lower than forecast revenues arising from reduced
customer demand
in specific verticals due to
geopolitical factors and the competitive environment;
and
• Major data breach caused by cyber attacks.
We considered whether these risks could plausibly affect
the liquidity or covenant compliance in the going concern
period by comparing severe, but plausible downside
scenarios that could arise from these risks individually and
collectively against the level of available financial resources
and covenants indicated by the Group’s financial forecasts.
Our procedures also included a critical assessment of
the assumptions in the Group’s base case and downside
scenarios, and our knowledge of the entity and the sector in
which it operates. We also compared past budgets to actual
results to assess the directors’ track record of budgeting
accurately.
We considered whether the going concern disclosure in
note 1 to the financial statements gives a full and accurate
description of the directors’ assessment of going concern,
including the identified risks.
Our conclusions based on this work:
• we consider that the directors’ use of the going
concern basis of accounting in the preparation of the
financial statements is appropriate;
• we have not identified, and concur with the directors’
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
collectively, may cast significant doubt on the Group’s
or Company's ability to continue as a going concern
for the going concern period;
• we have nothing material to add or draw attention
to in relation to the directors’ statement in Note 2
to the Group and Note 1 to the Company financial
statements on the use of the going concern basis of
accounting with no material uncertainties that may
cast significant doubt over the Group and Company’s
use of that basis for the going concern period, and we
found the going concern disclosure in those notes to
be acceptable; and
• the related statement under the Listing Rules set out
on pages 108 to 109 is materially consistent with the
financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions
and as subsequent events may result in outcomes that
are inconsistent with judgements that were reasonable at
the time they were made, the above conclusions are not a
guarantee that the Group or the Company will continue in
operation.
6. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material
misstatement due to fraud
To identify risks of material misstatement due to fraud
(“fraud risks”) we assessed events or conditions that could
indicate an incentive or pressure to commit fraud or provide
an opportunity to commit fraud. Our risk assessment
procedures included:
• Enquiring of directors, the audit committee, internal
audit, Group’s legal counsel and inspection of policy
documentation as to the Group’s high-level policies
and procedures to prevent and detect fraud, including
the internal audit function, and the Group’s channel
for “whistleblowing”, as well as whether they have
knowledge of any actual, suspected or alleged fraud.
• Reading Board and audit committee minutes.
• Considering remuneration incentive schemes and
performance targets for management, directors and
other staff.
• Using analytical procedures to identify any unusual or
unexpected relationships.
We communicated identified fraud risks throughout the
audit team and remained alert to any indications of fraud
throughout the audit. This included communication from
the Group audit team to full scope component audit teams
of relevant fraud risks identified at the Group level and
request to full scope component audit teams to report to
the Group audit team any instances of fraud that could give
rise to a material misstatement at the Group level.
As required by auditing standards, and taking into account
possible pressures to meet revenue targets, we perform
procedures to address the risk of management override of
controls and the risk of fraudulent revenue recognition, in
particular:
• the risk that Group and component management may
be in a position to make inappropriate accounting
entries; and
• the risk that Advertising Fees and Listings revenues
are overstated through recording fictitious revenues or
premature revenue around the financial year end date.
We did not identify any additional fraud risks.
in respect of fraud risk over revenue
Further detail
recognition is set out in the key audit matter disclosures in
section 2 of this report.
We also performed procedures including:
•
Identifying journal entries and other adjustments to
test for all full scope components based on risk criteria
and comparing the identified entries to supporting
documentation. These
included those posted to
unusual accounts, those posted by senior finance
management and those posted to expense accounts
in April 2023 with rounded numbers or ending in ‘999.
Identifying and responding to risks of material
misstatement due to non-compliance with laws
and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
financial statements from our general commercial and
sector experience, through discussion with the directors
and other management (as required by auditing standards),
and discussed with the directors and other management
the policies and procedures regarding compliance with laws
and regulations.
identified
laws and
We communicated
regulations
throughout our team and remained alert to any indications
of non-compliance throughout the audit. This included
communication from the Group audit team to full scope
component audit teams of relevant laws and regulations
identified at the Group level, and a request for full scope
component auditors to report to the Group audit team any
instances of non-compliance with laws and regulations that
could give rise to a material misstatement at the Group
level.
The potential effect of these laws and regulations on the
financial statements varies considerably.
legislation
Firstly, the Group is subject to laws and regulations that
directly affect the financial statements including financial
reporting
companies
(including
legislation), distributable profits legislation and taxation
legislation, and we assessed the extent of compliance with
these laws and regulations as part of our procedures on the
related financial statement items.
related
Secondly, the Group is subject to many other laws and
regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in the
financial statements, for instance through the imposition of
fines or litigation. We identified the following areas as those
most likely to have such an effect: data protection laws,
anti-competition, anti-bribery, employment law, consumer
protection and certain aspects of company legislation
recognising the nature of the Group’s activities. Auditing
standards limit the required audit procedures to identify
non-compliance with these laws and regulations to enquiry
of the directors and other management and inspection of
regulatory and legal correspondence, if any. Therefore if
a breach of operational regulations is not disclosed to us
or evident from relevant correspondence, an audit will not
detect that breach.
Context of the ability of the audit to detect fraud
or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our audit
in accordance with auditing standards. For example, the
further removed non-compliance with laws and regulations
is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk
of non-detection of fraud, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal controls. Our audit procedures are
designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and
cannot be expected to detect non-compliance with all laws
and regulations.
7. We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does
not cover the other information and, accordingly, we do
not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether, based on our financial
statements audit work, the information therein is materially
misstated or inconsistent with the financial statements or
our audit knowledge. Based solely on that work we have not
identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the
strategic report and the directors’ report;
•
•
in our opinion the information given in those reports
for the financial year is consistent with the financial
statements; and
in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance
with the Companies Act 2006.
Disclosures of emerging and principal risks and
longer-term viability
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
disclosures in respect of emerging and principal risks and
the viability statement, and the financial statements and our
audit knowledge.
Based on those procedures, we have nothing material to
add or draw attention to in relation to:
• the directors’ confirmation within Viability statement
page 49 that they have carried out a robust assessment
of the emerging and principal risks facing the Group,
including those that would threaten its business
model, future performance, solvency and liquidity;
• the Emerging and Principal Risks disclosures
describing these risks and how emerging risks are
identified, and explaining how they are being managed
and mitigated; and
• the directors’ explanation in the Viability statement
of how they have assessed the prospects of the
Group, over what period they have done so and why
they considered that period to be appropriate, and
their statement as to whether they have a reasonable
expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over
the period of their assessment, including any related
disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the Viability Statement, set
out on page 49 under the Listing Rules. Based on the above
procedures, we have concluded that the above disclosures
are materially consistent with the financial statements and
our audit knowledge.
Our work is limited to assessing these matters in the
context of only the knowledge acquired during our financial
statements audit. As we cannot predict all future events
or conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the absence of
anything to report on these statements is not a guarantee
as to the Group’s and Company’s longer-term viability.
100
101
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Independent auditor’s report to the members of Baltic Classifieds Group PLC continued
FINANCIAL STATEMENTS
Corporate governance disclosures
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
corporate governance disclosures and
the financial
statements and our audit knowledge.
Based on those procedures, we have concluded that each
of the following is materially consistent with the financial
statements and our audit knowledge:
• the directors’ statement that they consider that the
annual report and financial statements taken as
a whole is fair, balanced and understandable, and
provides the information necessary for shareholders
to assess the Group’s position and performance,
business model and strategy;
• the section of the annual report describing the work of
the Audit Committee, including the significant issues
that the audit committee considered in relation to
the financial statements, and how these issues were
addressed; and
• the section of the annual report that describes
the review of the effectiveness of the Group’s risk
management and internal control systems.
We are required to review the part of the Corporate
Governance Statement relating to the Group’s compliance
with the provisions of the UK Corporate Governance Code
specified by the Listing Rules for our review. We have
nothing to report in this respect.
8. We have nothing to report on the other matters on which we are required to report
by exception
Under the Companies Act 2006, we are required to report to
you if, in our opinion:
• adequate accounting records have not been kept by
the parent Company, or returns adequate for our audit
have not been received from branches not visited by
us; or
• the parent Company financial statements and the part
of the Directors’ Remuneration Report to be audited
are not in agreement with the accounting records and
returns; or
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page
95, the directors are responsible for: the preparation of the
financial statements including being satisfied that they give
a true and fair view; such internal control as they determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error; assessing the Group and parent Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the
going concern basis of accounting unless they either intend
to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
• certain disclosures of directors’
specified by law are not made; or
• we have not received all the
remuneration
information and
explanations we require for our audit.
We have nothing to report in these respects.
to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
is required to
The Company
include these financial
statements in an annual financial report prepared using the
single electronic reporting format specified in the TD ESEF
Regulation. This auditor’s report provides no assurance
over whether the annual financial report has been prepared
in accordance with that format.
10. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s
members, as a body, for our audit work, for this report, or for
the opinions we have formed.
Kate Teal (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
66 Queen Square
Bristol
BS1 4BE
28 June 2023
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 April 2023
Note
2023
(€ thousands)
2022
Restated1
(€ thousands)
7
8
10
10
11
60,814
9
(31,767)
29,056
7
(2,698)
(2,691)
50,959
6
(37,349)
13,616
138
(11,309)
(11,171)
26,365
2,445
(3,150)
23,215
-
23,215
(1,353)
1,092
-
1,092
23,215
1,092
12
4.68
0.22
Revenue
Other income
Expenses
Operating profit
Finance income
Finance expenses
Net finance costs
Profit before tax
Income tax expense
Profit for the year
Other comprehensive income/(loss)
Total comprehensive income for the year
Attributable to:
Owners of the Company
Earnings per share (€ cents)
Basic and diluted
1 See note 3 for further details.
102
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
At 30 April 2023
For the year ended 30 April 2023
Assets
Property, plant and equipment
Intangible assets and goodwill
Right-of-use assets
Deferred tax assets
Non-current assets
Trade and other receivables
Prepayments
Cash and cash equivalents
Current assets
Total Assets
Equity
Share capital
Own shares held
Capital reorganisation reserve
Other reserves
Retained earnings
Total equity
Loans and borrowings
Deferred tax liabilities
Non-current liabilities
Current tax liabilities
Loans and borrowings
Payroll related liabilities
Trade and other payables
Contract liabilities
Current liabilities
Total liabilities
Total equity and liabilities
13
14
11
15
16
17
18
17
20
11
11
20
21
7
Note
2023
(€ thousands)
2022
(€ thousands)
2021
Restated1
(€ thousands)
211
416,909
761
-
502
385,633
884
153
474
400,489
457
-
387,172
401,420
417,881
3,347
175
27,070
30,592
2,970
189
19,914
23,073
2,571
46
17,115
19,732
417,764
424,493
437,613
5,783
(6,252)
(286,904)
39
619,986
332,652
69,231
4,223
73,454
1,784
462
1,021
4,509
3,882
11,658
85,112
417,764
5,822
(3,418)
(286,904)
-
611,877
327,377
82,478
5,844
88,322
4
323
866
4,458
3,143
8,794
97,116
424,493
506,509
-
(287,033)
27
(9,922)
209,581
210,413
7,594
218,007
1,293
2,713
770
3,601
1,648
10,025
228,032
437,613
Share
Capital
(€ thousands)
Note
Share
premium
(€ thousands)
Own
shares
held
(€ thousands)
Capital
reorganisation
reserve
(€ thousands)
Other
reserves
(€ thousands)
Retained
earnings
(€ thousands)
Total
Equity
(€ thousands)
Balance at 30 April 2021
(As reported)
Prior year restatement
Balance at 30 April 2021
(As restated)
Profit for the year
(restated)
Other comprehensive
income
Total comprehensive
income
Transactions with owners:
506,509
-
506,509
3
3
-
-
-
-
-
-
-
-
-
Group restructure and IPO
17
75,265
43,143
(575,956)
(43,143)
Transfer arising from
capital reduction
Share issue post IPO
Share-based payments
Purchase of shares for
performance share plan
17
17
25
18
4
-
-
Balance at 30 April 2022
5,822
Profit for the year
Other comprehensive
income
Total comprehensive
income
Transactions with owners:
Share-based payments
25
Tax impact of employee
share schemes
Purchase of shares for
performance share plan
Purchase of shares for
cancellation
Dividends
18
17
19
-
-
-
-
-
-
(39)
-
-
-
-
-
-
-
-
-
-
-
(3,418)
(287,033)
27
(11,229)
208,274
-
-
1,307
1,307
(287,033)
27
(9,922)
209,581
-
-
-
-
-
-
1,092
1,092
-
-
1,092
1,092
129
(27)
-
118,510
-
-
-
-
(3,418)
(286,904)
-
-
-
-
-
(2,834)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
619,099
(4)
-
-
1,612
1,612
-
(3,418)
611,877
327,377
23,215
23,215
-
-
-
23,215
23,215
-
-
-
1,567
1,567
20
20
-
(2,834)
39
(5,775)
(5,775)
-
(10,918)
(10,918)
These financial statements were approved by the board of directors on 28 June 2023 and were signed on its behalf by:
Balance at 30 April 2023
5,783
-
(6,252)
(286,904)
39
619,986
332,652
Justinas Šimkus
Director
Company registered number: 13357598
1 See note 3 for further details.
104
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Consolidated Statement of Cash Flows
For the year ended 30 April 2023
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation and amortisation
Amortisation and write off of up-front fee and borrowing costs
Impairment loss on trade receivables
(Profit) / Loss on property, plant and equipment disposals
Taxation
Net finance costs
Share-based payments
Other non-cash items
Working capital adjustments:
(Increase) in trade and other receivables
Decrease / (increase) in prepayments
Increase in trade and other payables
Increase in contract liabilities
Cash generated from operating activities
Corporate income tax paid
Interest and commitment fees paid
Net cash inflow from operating activities
Cash flows from investing activities
Acquisition of intangible assets and property, plant and equipment
Proceeds from sale of property, plant and equipment
Acquisition of business
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of share capital
Proceeds from loans and borrowings
Repayment of loans and borrowings
Capitalised borrowing costs
Payment of lease liabilities
Share issue related expenses
Purchase of own shares for cancellation
Purchase of own shares for performance share plan
Dividends paid
Net cash used in financing activities
Net cash inflow from operating, investing and financing activities
Differences on exchange
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Note
2023
(€ thousands)
2022 Restated1
(€ thousands)
23,215
1,092
8
10
15
11
10
25
27
17
20
20
17
18
16,989
-
-
(4)
3,150
2,691
1,567
1
(464)
16
91
739
47,991
(3,122)
(2,208)
42,661
(251)
4
(1,600)
(1,847)
-
-
(14,000)
-
(247)
-
(5,663)
(2,834)
(10,918)
(33,662)
7,152
4
7,156
19,914
27,070
16,894
5,580
59
-
1,353
5,606
1,612
93
(521)
(128)
966
1,495
34,101
(4,403)
(8,870)
20,828
(433)
-
-
(433)
121,339
96,650
(228,295)
(677)
(305)
(2,874)
-
(3,418)
-
(17,580)
2,815
(16)
2,799
17,115
19,914
Notes to the consolidated financial
statements
1. General information
Baltic Classifieds Group PLC (the “Company”) is a Company incorporated in the United Kingdom and its registered office is
Highdown House, Yeoman Way, Worthing, West Sussex, United Kingdom, BN99 3HH (Company no. 13357598). The consolidated
financial statements as at and for the year ended 30 April 2023 comprise the Company and its subsidiaries (together referred to
as the “Group”). The principal business of the Group is operating leading online classifieds portals for automotive, real estate,
jobs and services, and general merchandise in the Baltics.
2. Principles of preparation of consolidated financial
statements
These consolidated financial statements have been prepared as at, and for the year ended 30 April 2023. These consolidated
financial statements, which have been audited, have been prepared in accordance with UK-adopted international accounting
standards (“UK-adopted IFRS”) and the applicable legal requirements of the Companies Act 2006.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”).
The parent company financial statements present information about the Company as a separate entity and not about its group.
The Group financial statements have been prepared and approved by the directors in accordance with UK-adopted IFRS. The
Company has elected to prepare its parent company financial statements in accordance with FRS 102; these are presented on
pages 139 to 147.
Baltic Classifieds Group PLC was incorporated on 26 April 2021 and on 5 July 2021 was admitted to trading on the London Stock
Exchange. At the same time as the admission, the Company acquired 88.42 per cent of the share capital of ANTLER TopCo S.à r.l
and 100% of ANTLER Management S.A. that owned the residual 11.58% of the share capital of ANTLER TopCo S.à r.l in a share
for share exchange, thereby inserting Baltic Classifieds Group PLC as the Parent Company of the Group that includes ANTLER
MidCo S.à r.l.
These are the second set of consolidated financial statements of the Company. By applying the principles of common control
accounting, this group reorganisation has been accounted for as a business combination outside of the scope of a business
combination as defined under IFRS 3 in 2022. Book value accounting has been adopted, meaning that the carrying values of
assets and liabilities of the parties to the combination were not adjusted to fair value on consolidation, and the results and
cashflows of ANTLER TopCo S.à r.l. and Baltic Classifieds Group PLC were brought into the consolidated financial statements of
Baltic Classifieds Group PLC as if Baltic Classifieds Group PLC had always owned ANTLER TopCo S.à r.l.
Baltic Classifieds Group PLC has adopted the financial reporting framework of the group below it, which has previously presented
financial statements under EU adopted International Financial Reporting Standards and given there are no differences between
the UK and EU adopted International Financial Reporting Standards, the Group did not consider itself to be a first time adopter
of UK-adopted IFRS when preparing the first set of consolidated financial statements in 2022.
Basis of measurement
These consolidated financial statements have been prepared on the historical cost basis, unless otherwise stated in the
accounting policies below.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has existing rights that give it the ability to direct
the relevant activities of an entity and has the ability to affect the returns the Group will receive as a result of its involvement
with the entity. In assessing control, potential voting rights are taken into account. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the date that control ceases.
Functional and presentation currency
These consolidated financial statements are presented in Euro (€), which is the Company’s functional currency. All amounts are
rounded to the nearest thousand (€ 000), except where otherwise indicated.
1 See note 3 for further details.
106
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
2. Principles of preparation of consolidated financial statements continued
Notes to the consolidated financial statements continued
2. Principles of preparation of consolidated financial statements continued
FINANCIAL STATEMENTS
The Group companies use Euro (€) as a functional currency considering the nature of the Group companies’ revenue, costs, and
debt instruments. The Company and its direct subsidiary BCG Holdco Limited are UK based companies with their share capital
denominated in British pound (£). All equity transactions of these companies as well as a majority of operating expenses the
companies incurred are in British pound (£). However, while being the ultimate holding companies, Baltic Classifieds Group PLC
and BCG Holdco Limited follow the functional currency of their operating subsidiaries, i.e. Euro (€), as that is the currency they
are most exposed to.
Use of estimates and judgements
The preparation of the consolidated financial statements, in accordance with UK-adopted IFRS, requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised or in any future periods affected.
Estimates
As at 30 April 2023, there were no significant estimates that would have a significant risk of material adjustment to the carrying
amounts of assets within the next financial year.
Other estimates:
• Carrying values of goodwill. An impairment review is performed of goodwill balances by the Group on a ‘value in use’ basis.
This requires making assumptions and estimates in calculating the future cash flows, the time period over which they
occur, and in arriving at an appropriate discount rate to apply to the cashflows as well as an appropriate long term growth
rate. Each of these assumptions and estimates has an impact on the overall value of cashflows expected and therefore the
headroom between the cashflows and carrying values of the cash generating units. Key assumptions and uncertainties
for impairment are disclosed in note 13.
• Useful lives of intangible assets. A useful life is assigned to an acquired intangible asset based on the estimated period of
time an asset is likely to remain in service. This estimate has an impact on the amortisation expense for any given period.
Useful lives of intangible assets are disclosed in note 4.
Judgements
As at 30 April 2023, there were no significant judgements that would have a significant risk of material adjustment to the
carrying amounts of assets within the next financial year.
Other judgements:
• Deferred tax asset. An unrecognised deferred tax asset of €3,934 thousand (30 April 2022: €3,934 thousand) has not been
recognised in relation to tax losses incurred by the Company's indirect subsidiary UAB Antler Group. Deferred tax assets
are recognised only to the extent that it is probable that future taxable profits will be available against which the temporary
differences can be utilised. Recognition, therefore, involves judgement regarding the probability of future taxable profit of
the indirect subsidiary being available. Taxable losses carried forward for which no deferred tax asset is recognised are
discussed in note 11 (d).
Going concern
The Directors have made an assessment of the Group’s ability to continue as a going concern covering a period of at least 12
months from the date of approval of these consolidated financial statements and has a reasonable expectation that the Group
has adequate resources to continue in operational existence over this period.
The Group meets its day-to-day working capital requirements from cash balances, if needed the Group also has access to a
revolving credit facility that amounts to €10,000 thousand and is available until July 2026. As at 30 April 2023 no amounts of
the revolving credit facility were drawn down. The bank loan matures in July 2026 and its availability is subject to continued
compliance with certain covenants, it becomes repayable on demand in the case of a change in control. The Group voluntarily
repaid €14,000 thousand of the loan during the 2023, the outstanding balance at the year ends amounts to €70,000 thousand.
The Group had cash balances of €27,070 thousand at the year end. After 30 April 2023, the Group has made a further voluntary
repayment of debt of €7,000 thousand.
During the financial year ended 30 April 2023 the Group has generated a profit of €23,215 thousand. The Directors also
prepared detailed cash flow forecasts for the period ending 12 months from the date of approval of these consolidated financial
statements. The future growth assumptions used in the cash flow forecasts are based on the Group’s historical performance
and the Directors’ experience of the industry and take into account both internal and external factors.
Stress case scenarios have been modelled to make the assessment of going concern to take into account severe but plausible
potential impacts of a major data breach, adverse changes to the competitive environment and a continuing geopolitical
tensions in the neighbouring countries. The stress testing indicates that the Group would be able to withstand the impact,
remain cash generative and be able to continue to comply with debt covenants for the assessment period.
Consequently, the Directors are confident that the Group will have sufficient funds to continue to meet its liabilities as they fall
due for at least 12 months from the date of approval of these consolidated financial statements and therefore have prepared
these consolidated financial statements on a going concern basis.
Effective new standards as at 1 May 2022
The following amendments to standards have been adopted by the Group for the first time for the financial year beginning on
1 May 2022:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendment to IAS 37);
• Annual Improvements to IFRS Standards 2018-2020;
• Reference to the Conceptual Framework (Amendments to IFRS 3);
• Property, Plant and Equipment – Proceeds before Intended Use (Amendments to IAS 16).
The adoption of these amendments has had no material effect on the Group’s consolidated financial statements.
Standards issued but not yet effective
There are a few amendments to IFRS that have been issued by the IASB that become mandatory in a subsequent accounting
periods including:
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts;
• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1);
•
• Definition of Accounting Estimates (Amendments to IAS 8);
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) (not yet endorsed
by EU);
• Amendments to IFRS 16 impacting Lease Liabilities in a Sale and Leaseback arrangement.
The Group has evaluated these changes (with an exception of IFRS 17, which impact has not yet been evaluated), and none are
expected to have a significant impact on these consolidated financial statements.
3. Prior year restatement
During 2022, a deferred tax liability of €1,307 thousand was released following a write-off of upfront commission fees incurred
on long term borrowings to which it related. After an enquiry by the FRC ’s Corporate Reporting Review team (refer to the Audit
Committee Report on page 80), the Directors reviewed historic accounting of deferred tax amounts and found that the deferred
tax liability of €1,307 thousand which was recognised in 2020 and released in 2022 should have been released in 2021.
The opening retained earnings and income tax expense were restated resulting in a change to profit for the comparative period
and EPS. The impact of the restatement is shown below:
Impact on consolidated Statement of Profit and Loss and Other Comprehensive
Income for the year ended 30 April 2022
Income tax expense
Profit / (loss) for the period
Other comprehensive income/(loss)
Total comprehensive income/(loss) for the year
Attributable to:
Owners of the Company
Earnings / (loss) per share (€ cents)
Basic and diluted
2022 As reported
(€ thousands)
Restatement
(€ thousands)
2022 As restated
(€ thousands)
(46)
2,399
-
2,399
2,399
(1,307)
(1,307)
-
(1,307)
(1,307)
(1,353)
1,092
-
1,092
1,092
0.49
(0.27)
0.22
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Notes to the consolidated financial statements continued
3. Prior year restatement
Notes to the consolidated financial statements continued
4. Significant accounting policies continued
FINANCIAL STATEMENTS
Impact on consolidated Statement of Financial Position
There is no impact on the Statement of Financial Position as at 30 April 2022.
The impact on Statement of Financial Position as at 1 May 2021 is presented below:
Retained earnings
Total equity
Deferred tax liabilities
Non-current liabilities
Total liabilities
Total equity and liabilities
2021 As reported
(€ thousands)
Restatement
(€ thousands)
2021 As restated
(€ thousands)
(11,229)
208,274
8,901
219,314
229,339
437,613
1,307
1,307
(1,307)
(1,307)
(1,307)
-
(9,922)
209,581
7,594
218,007
228,032
437,613
The Group applies a fixed price to all listings, both C2C and B2C.
One of the Group’s general merchandise platforms, Osta.ee allows a customer to fill an e-wallet with money that can then be
used to pay for services provided by the Group. The customer can cash out at any time. This cash balance is therefore accounted
for as a financial liability labelled ‘customer credit balances’ within trade and other payables in the consolidated statement of
financial position and as cash within cash and cash equivalents. This cash is physically separated from the rest in a dedicated
bank account and, although there is no formal restriction on this cash, the Group’s policy is to keep the cash balance at a level
not lower than the e-wallet balance. No revenue is recognised unless the customer purchases a product provided by the Group
using money from their e-wallet. Revenue is then recognised in accordance with the product purchased.
Advertising
Advertising revenue comprises fees (net of rebates) from business customers for banner advertising on the Group’s platforms.
The customer pays fees to advertise on the Group’s platforms. Revenue is deferred until the customer obtains control over the
services. Control is obtained by the customers over the life of the advertisement. Customers are typically invoiced monthly and
have a 7-60 days settlement term.
Impact on consolidated Statement of Cash Flows for the year ended 30 April 2022
Ancillary
2022 As reported
(€ thousands)
Restatement
(€ thousands)
2022 As restated
(€ thousands)
Cash flows from operating activities
Profit / (loss) for the period
2,399
(1,307)
1,092
Adjustments for:
Taxation
Cash generated from operating activities
46
34,101
1,307
-
1,353
34,101
4. Significant accounting policies
The Group has consistently applied the accounting policies to all the periods presented in these consolidated financial
statements.
Revenue
Revenue is measured based on the consideration specified in a contract with a customer and is recognised at the point when
the performance obligations are satisfied. The Group applies the five-step revenue recognition model in accordance with IFRS
15 as follows.
a) Identification of the contract with a customer
b) Identification of performance obligations
c) Determination of the transaction price
d) Allocating the transaction price to individual performance obligations
e) Recognition of revenue when performance obligations are satisfied
The Group’s revenue streams include listings revenue, advertising revenue, financial intermediation and ancillary revenue. The
different types of services offered to customers along with the nature and timing of satisfaction of performance obligations are
set as follows:
Listing fees
The Group operates leading online classifieds portals for automotive, real estate, jobs and services, and general merchandise.
Listing fees revenue is generated from both private (“C2C”) and business customers (“B2C”).
Private customers pay a fee in advance to advertise their product (automotive, real estate, general merchandise) on the Group’s
platform for a specified period. Revenue is deferred until the customer obtains control over the services. Control is obtained by
customers across the life of the contract as their product is continuously listed, or the period of service, if shorter. Contracts for
these services are typically entered into for a period of between a day and a year.
Business customers pay fees to obtain a “service pack” which allows the customer to advertise a set number of listings during
a period, unused listings cannot be rolled over. Revenue is deferred until the customer obtains control over the services. Control
is obtained by the customers across the life of the performance obligation being provided, which is either the set period in the
contract, or the period of service, if shorter. Any unused listings at the end of the contract period are invoiced at the end of the
contract period. B2C typically invoice monthly, although some contracts are annual contracts and have 7-60 days settlement
terms.
Ancillary revenue comprises revenue from financial intermediation, subscription services and other.
Ancillary revenue is recognised as the Group satisfies its performance obligation by bringing leads to a customer or by providing
other agreed services. Financial intermediation revenue comprises commission fees from financial institutions for directing
potential customers from the Group’s portals to financing offers such institutions provide. At the beginning of each month the
Group agrees certain traffic metrics with financial institutions and issues invoices for the commission or a minimum agreed fee.
Revenue is recognised as the Group satisfies its performance obligation by directing potential customer traffic to the financial
institutions.
The revenue accounting policy across business lines is the same for each revenue stream, i.e. advertising revenue is accounted
for the same in both automotive and real estate business lines.
The timing of the satisfaction of performance obligations usually is the same as the typical timing of payment or recognition of
trade receivable; when it is not, a contract liability is recognised.
Other income and expenses
Other income and expenses comprise gains or losses from disposal of property, plant and equipment, intangible assets, as well
as other income and costs not directly related to the primary activities of the Group.
Finance income and finance costs
Finance income and expenses comprise interest receivable and payable, realised and unrealised exchange gains and losses
regarding trade receivables, trade payables and loans denominated in foreign currencies.
Interest income is recognised as it accrues in profit or loss, using the effective interest method.
Finance costs comprise interest expense on borrowings and unwinding of discounts on provisions. Borrowing costs that are
not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using
the effective interest method.
Foreign currency gains and losses are reported on a net basis.
Income tax
Income tax on the profit or loss for the period comprises current and deferred tax. Income tax is recognised in profit or loss
except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantially enacted at
the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on
laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax liabilities and assets, and if they relate to income taxes levied by the same tax
authority.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
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Notes to the consolidated financial statements continued
4. Significant accounting policies continued
Notes to the consolidated financial statements continued
4. Significant accounting policies continued
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Segment information
Operating segment information is reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker (CODM). The CODM, who is responsible for allocating resources, assessing performance of the operating
segment and making strategic decisions, has been identified as the Board of Baltic Classifieds Group PLC.
Earnings per share
Basic earnings per share and diluted earnings per share are presented for ordinary shares.
Basic earnings per share is calculated by dividing profit / (loss) attributable to owners of the Company by the weighted average
number of shares outstanding.
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account the
weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.
Consolidation
a) Business combinations
Business combinations are accounted for using the acquisition method when control is transferred to the Group. The
consideration transferred in the acquisition is measured at fair value, as are the identifiable net assets acquired. Any goodwill
that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately.
Transaction costs are expensed as incurred, except if related to the issuance of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts
are recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If the obligation to pay contingent consideration
meets the definition of a financial instrument and is classified as equity, it is not remeasured, and settlement is accounted for
within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent
changes in the fair value of the contingent consideration are recognised in profit or loss.
b) Non-controlling interests (hereinafter - NCI)
NCI are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes
in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
c) Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI
and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former
subsidiary is measured at fair value when control is lost.
d) Transactions eliminated on consolidation
All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are
eliminated in full.
Acquisitions from entities under common control
A “business combination involving entities or businesses under common control” is a business combination in which all of the
combining entities or businesses are ultimately controlled by the same party or parties both before and after the combination,
and that control is not transitory. Business combinations under common control are excluded from the scope of IFRS 3 Business
Combinations. For business combinations among entities under common control, the Group elects to apply the common control
exclusion in IFRS 3 and where this is the case applies an accounting policy reflecting the “predecessor value method” or “book
value accounting method”. Under this method, rather than acquisition accounting in accordance with IFRS 3, the acquired
assets and liabilities of the acquired business are recorded at their existing carrying “book” values, as such no goodwill is
recorded.
Foreign currency
Transactions in foreign currencies are translated to the functional currency of Group entities at the foreign exchange rate ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are
retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on
translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and
liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign
exchange rates ruling at the dates the fair value was determined.
Intangible assets and goodwill
a) Recognition and measurement
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.
Other intangible assets, including customer relationships, software and trademarks, that are acquired by the Group and have
finite useful lives, are measured at cost less accumulated amortisation and any accumulated impairment losses.
b) Research and development
Costs associated with maintaining software programmes are recognised as an expense as incurred. Material development
costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group
are recognised as intangible assets where the following criteria are met:
•
it is technically feasible to complete the software so that it will be available for use
• management intends to complete the software and use or sell it
• there is an ability to use or sell the software
•
it can be demonstrated how the software will generate probable future economic benefits
• adequate technical, financial and other resources to complete the development and to use or sell the software are available,
and
• the expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software include employee costs. Capitalised development costs
are recorded as intangible assets and amortised from the point at which the asset is ready for use.
Research expenditure and development expenditure that do not meet the criteria above are recognised as an expense as
incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
c) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to
which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit
or loss as incurred.
d) Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line
method over their estimated useful lives and is recognised in profit or loss. Goodwill is not amortised. Estimated useful lives
are as follows:
Trademarks and domains
Relationship with clients
Other intangible assets
10 years
5-7 years
3-7 years
Property, plant and equipment
a) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the asset.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal
with the carrying amount of the property, plant and equipment, and is recognised within other operating income/other operating
expenses in profit or loss.
b) Subsequent expenditure
The expenditure of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item
if it is probable that the future economic benefits within the part will flow to the Group, and its costs can be measured reliably.
The carrying amount of the replaced part is derecognised. The cost of the day-to-day servicing of property, plant and equipment
are recognised in profit or loss as incurred.
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4. Significant accounting policies continued
Notes to the consolidated financial statements continued
4. Significant accounting policies continued
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
c) Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less
its residual value. Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part
of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future
economic benefits embodied in the asset. Depreciation is calculated from the first day of the next month when the asset is
available for use, using the straight-line method.
Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the
Group will obtain ownership by the end of the lease term. Land is not depreciated. The estimated useful lives of property, plant
and equipment for current and comparative periods are as follows:
Buildings
15-20 years
Vehicles
4-10 years
Other
3-6 years
Impairment of non-financial assets
At each reporting date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any
indication of impairment. If any such indications exist, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from
continuing use, that are largely independent of the cash inflows of other assets (the “cash-generating unit, or CGU”).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is
based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses
are recognised in profit or loss. Impairment loss is reversed to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had been
recognised.
The useful lives, residual values and depreciation method are reviewed annually to ensure that the depreciation period and other
estimates are consistent with the expected pattern of economic benefits from items in property, plant and equipment.
Cash and cash equivalents
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To
assess whether a contract conveys the right to control the use of the identified asset, the Group uses the definition of a lease
in IFRS 16 Leases.
As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in
the contract to each lease component on the basis of its relative stand-alone prices.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end
of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or
the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset
will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property
and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental
borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and
makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
• Fixed payments, including in-substance fixed payments
• Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement
date
• Amounts expected to be payable under a residual value guarantee
• The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a
lease unless the Group is reasonably certain not to terminate early
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in
the future lease payments arising from a change in an index or rate, if there is a change in the Group‘s and the Group’s estimate
of the amount expected to be payable under a residual value guarantee, if the Group’s changes its assessment of whether it will
exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in `Right-of-use assets’ and lease
liabilities in `long-term lease liabilities` and `short-term lease liabilities` in the statement of financial position.
Cash includes cash at banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value.
In the statement of cash flows, cash and cash equivalents include cash at banks.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument
of another entity.
a) Financial assets
i) Initial recognition and measurement
The Group qualifies financial assets to one of the following categories:
• measured at amortised cost
• measured at fair value through other comprehensive income
• measured at fair value through profit or loss
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics
and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant
financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are
measured at the transaction price determined under IFRS 15.
The Group’s business model for managing financial assets refers to how the Group manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows,
selling the financial assets, or both.
Purchases or sales of financial assets are recognised on the trade date, i.e., the date that the Group commits to purchase or
sell the asset.
ii) Subsequent measurement
After initial recognition, the Group measures a financial asset at amortised cost (debt instruments).
iii) Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual
cash flows and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to
impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Group’s financial assets at amortised cost includes trade, other current and non-current receivables and contract assets.
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Notes to the consolidated financial statements continued
4. Significant accounting policies continued
Notes to the consolidated financial statements continued
4. Significant accounting policies continued
FINANCIAL STATEMENTS
iv) Impairment of financial assets
As relevant for:
• Financial assets measured at amortised cost
• Contract assets
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at
12-month ECLs:
• debt securities that are determined to have low credit risk at the reporting date
• other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the
financial instrument) has not increased significantly since initial recognition
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience
and informed credit assessment, and includes forward-looking information.
The Group considers a financial asset to be in default when the financial asset is more than 180 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
Payroll related liabilities
Short-term payroll related liabilities are expensed as the related service is provided. These include salaries and wages, social
security contributions, vacation payouts, compensation for illness, bonuses, allowances, severance payments, vacation
accruals, all of which are recognised as costs when an employee has fulfilled his duties in exchange for the received allowance.
Share-based payments
Equity-settled awards are valued at the grant date, and the fair value is charged as an expense in the income statement spread
over the vesting period. Fair value of the awards are measured using Black-Scholes pricing model. The credit side of the entry is
recorded in equity. Cash-settled awards are revalued at each reporting date with the fair value of the award charged to the profit
and loss account over the vesting period and the credit side of the entry recognised as a liability.
Provisions
Provisions on obligations are accounted for only when the Group has legal obligation or irrevocable commitment as a result
of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle it, and
the amount of obligation can be measured reliably. Provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The
unwinding of the discount is recognised as finance expenses.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting
date (or a shorter period if the expected life of the instrument is less than 12 months).
Share capital
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed
to credit risk.
v) Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group
expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
vi) Presentation of allowance for ECL in the statement of financial position
Incremental costs directly attributable to the issue of ordinary shares are recognised as deductions from equity. Income tax
relating to transaction costs of equity transactions is accounted for in accordance with IAS 12.
Where the Group purchases its own equity share capital, the consideration paid is deducted from equity attributable to the
Group’s shareholders. Where such shares are subsequently cancelled, the nominal value of the shares repurchased is deducted
from share capital and transferred to a capital redemption reserve.
Own shares held
The Employee Benefit Trust (‘EBT’) provides for the issue of shares to Group employees principally under Performance Share Plan
scheme. The Group has control of the EBT and therefore consolidates the EBT in the Group financial statements. Accordingly,
shares in the Company held by the EBT are included in the balance sheet at cost as a deduction from equity.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
vii) Write-off
Capital reorganisation reserve
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering
a financial asset in its entirety or a portion thereof. For individual and corporate customers, the Group individually makes an
assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery.
The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still
be subject to enforcement activities in order to comply with the procedures for recovery of amounts due.
b) Financial liabilities
i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings and payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables,
loans and borrowings, lease liabilities and financial liabilities measured at fair value with changes recognised in profit or loss.
ii) Subsequent measurement
The measurement of financial liabilities depends on their classification.
After initial recognition, the Group’s loans, borrowings and other payables are subsequently measured at amortised cost using
the EIR method. Gains and losses are recognised in profit or loss, when the liabilities are derecognised as well as through the
EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included as finance expenses in profit or loss.
c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, i.e. to
realize the assets and settle the liabilities simultaneously.
The capital reorganisation reserve arose on consolidation as a result of the share for share exchange transactions that took
place on 5 July 2021 (note 17). It represents the difference between the nominal value of shares issued by Baltic Classifieds
Group PLC in this transaction and the share capital and other capital reserves of ANTLER TopCo S.a.r.l.
Capital redemption reserve
The capital redemption reserve arises from the purchase and subsequent cancellation of the Group’s own equity share capital.
Dividends
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period
in which the dividend is approved by the Company’s shareholders in the case of final dividends, or the date at which they are
paid in the case of interim dividends.
Contingencies
Contingent liabilities are not recognised in the consolidated financial statements but are disclosed unless the possibility of an
outflow of resources embodying economic benefits is remote.
Contingent assets are not recognised in the consolidated financial statements, unless the realisation of income is virtually
certain. They are disclosed in the consolidated financial statements when an inflow of economic benefit is probable.
Subsequent events
Events that provide additional evidence on conditions that existed at the end of the reporting period (the adjusting events) are
recognised in the final statements. Other subsequent events are not adjusting events and are disclosed in the notes if material.
116
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
Notes to the consolidated financial statements continued
5. Alternative performance measures (APMs) continued
FINANCIAL STATEMENTS
5. Alternative performance measures (APMs)
In the analysis of the Group’s financial performance, certain information disclosed in the financial statements may be prepared
on a non-GAAP basis or has been derived from amounts calculated in accordance with IFRS but are not themselves an expressly
permitted GAAP measure. These measures are reported in line with the way in which financial information is analysed by
management and designed to increase comparability of the Group’s year-on-year financial position, based on its operational
activity. These measures are not designed to be a substitute for any of the IFRS measures of performance and may not be
directly comparable with other companies’ alternative performance measures. The key alternative performance measures
presented by the Group are:
• Adjusted operating profit which is Operating profit after adding back acquired intangibles amortisation and one-off IPO
related costs. This measure helps to provide an indication of the Group’s ongoing business performance.
• EBITDA which is Operating profit after adding back depreciation and amortisation. This measure is used internally to
assess business performance and in budgeting and forecasting.
• EBITDA margin which is EBITDA as a percentage of revenue. Progression in EBITDA margin is an important indicator of
the Group’s operating efficiency.
• Adjusted EBITDA which is EBITDA after one-off IPO related costs. This is one of the key metrics used by management to
assess operating performance of the business and is used in assessing covenant compliance for the Group’s loan facility.
• Adjusted EBITDA margin which is Adjusted EBITDA as a percentage of revenue. Progression in EBITDA margin is an
important indicator of the Group’s operating efficiency.
• Adjusted net income which is Profit for the period after adding back post-tax impact of acquired intangibles amortisation
and one-off costs related to IPO, including IPO refinancing arrangement. It is used to arrive at Adjusted basic EPS and in
applying the Group’s capital allocation policy.
• Adjusted basic EPS which is Adjusted net income divided by the weighted average number of ordinary shares in issue. This
measure helps to provide an indication of the Group’s ongoing business performance.
• Net Debt which is calculated as total debt (bank loans principal and Osta.ee customer credit balances) less cash and cash
equivalents. See Revenue subsection of note 4 for more information on Osta.ee credit balances. Net debt is used to arrive
at the leverage ratio.
• Leverage which is calculated as Net Debt as a percentage of Adjusted EBITDA over last twelve months (LTM). This measure
is used in assessing covenant compliance for the Group’s loan facility which includes a Total Leverage Ratio covenant
(see note 20).
• Cash conversion which is EBITDA (or adjusted EBITDA in comparative periods) after deducting acquisition of intangible
assets and property, plant and equipment as a percentage of EBITDA (or adjusted EBITDA in comparative periods). This
measure is used to monitor the Group’s operational efficiency.
Reconciliation of alternative performance measures
Adjusted operating profit
Operating Profit
Acquired intangibles amortisation
IPO related fees
IPO related free share awards to employees (note 25)
Adjusted Operating Profit
EBITDA
Operating Profit
Depreciation and amortisation1
EBITDA
Adjusted EBITDA
and Adjusted EBITDA margin
EBITDA
IPO related fees
IPO related free share awards to employees (note 25)
Adjusted EBITDA
Adjusted EBITDA margin
1 Including acquired intangibles amortisation of €16,198 thousand (€16,147 thousand in 2022).
118
2023
(€ thousands)
2022
(€ thousands)
29,056
16,198
-
-
45,254
2023
(€ thousands)
29,056
16,989
46,045
2023
(€ thousands)
46,045
-
-
46,045
76%
13,616
16,147
7,393
1,378
38,534
2022
(€ thousands)
13,616
16,894
30,510
2022
(€ thousands)
30,510
7,393
1,378
39,281
77%
Adjusted net income
Profit for the year
Acquired intangibles amortisation
Deferred tax effect of acquired intangibles
amortisation
IPO related fees
Tax effect of IPO related fees
IPO related free share awards to employees (note 25)
Senior Facility Agreement related early repayment
penalty (note 20)
Senior Facility Agreement related upfront fee write off
(note 20)
Adjusted net income
Adjusted basic EPS
Adjusted net income (€ thousands)
Weighted average number of ordinary shares (note 12)
Adjusted basic EPS (€ cents)
Net debt
Bank loan principal amount (note 20)
Customer credit balances
Total Debt
Cash and cash equivalents
Net Debt
Leverage
Net debt
Adjusted EBITDA
Total Debt
Cash conversion
Adjusted EBITDA
Acquisition of intangible assets and property, plant
and equipment
Cash conversion
6. Operating segments
2023
(€ thousands)
23,215
16,198
(1,434)
-
-
-
2022 Restated1
(€ thousands)
1,092
16,147
(1,434)
7,393
(70)
1,378
-
1,618
-
37,979
2023
37,979
496,082,891
7.66
30/04/2023
(€ thousands)
70,000
2,363
72,363
27,070
45,293
30/04/2023
(€ thousands)
45,293
46,045
5,075
31,198
2022
31,198
488,467,552
6.39
30/04/2022
(€ thousands)
84,000
2,289
86,289
19,914
66,375
30/04/2022
(€ thousands)
66,375
39,281
0.98
1.69
2023
(€ thousands)
46,045
(251)
2022
(€ thousands)
39,281
(433)
45,794
38,848
99%
99%
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by
the chief operating decision maker (“CODM”) in order to allocate resources to the segments and to assess their performance.
The CODM has been identified as the Board of Baltic Classifieds Group PLC.
The main focus of the Group is operating leading online classifieds platforms for automotive, real estate, jobs and services, and
general merchandise in the Baltics. The Group’s business is managed on a consolidated level. The Board views information
for each classified platform at a revenue level only and therefore the platforms are considered products but not a separate
line of business or segment. The Group considers itself a classified business operating in a well-defined and economically
similar geographical area, the Baltic countries. And therefore the Board views detailed revenue information but only views costs
and profit information at a Group level. As such, management concluded that BCG has one operating segment, which also
represents one reporting segment.
The revenue break-down is disclosed by primary geographical markets, key revenue streams and revenue by business lines in
accordance with IFRS 15 in note 7.
Of the total intangible assets and goodwill, 69% (70% in 2022) is located in Lithuania, 30% (29% in 2022) in Estonia and 1% (1%
in 2022) in Latvia.
1 See note 3 for further details.
119
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
Notes to the consolidated financial statements continued
7. Revenue continued
FINANCIAL STATEMENTS
7. Revenue
In the following tables, revenue from contracts with customers is disaggregated by primary geographical markets, key revenue
streams and revenue by business lines.
Primary geographic markets
2023
(€ thousands)
2022
(€ thousands)
Lithuania
Estonia
Latvia
Total
Key revenue streams
Advertising revenue
Listings revenue
- Listings revenue: B2C
- Listings revenue: C2C
Ancillary revenue1
Total
Revenue by business lines
Automotive
- Advertising revenue
- Listings revenue: B2C
- Listings revenue: C2C
- Ancillary revenue
Real Estate
- Advertising revenue
- Listings revenue: B2C
- Listings revenue: C2C
- Ancillary revenue
Generalist
- Advertising revenue
- Listings revenue: B2C
- Listings revenue: C2C
- Ancillary revenue
Jobs & Services
- Advertising revenue
- Listings revenue: B2C
- Listings revenue: C2C
- Ancillary revenue
Total
42,407
17,203
1,204
60,814
35,236
14,620
1,103
50,959
2023
(€ thousands)
2022
(€ thousands)
3,728
53,750
29,765
23,985
3,336
60,814
2023
(€ thousands)
22,236
1,101
9,908
8,167
3,060
15,044
1,836
8,653
4,494
61
11,744
764
1,229
9,536
215
11,790
27
9,975
1,788
-
60,814
3,731
43,725
24,590
19,135
3,503
50,959
2022
(€ thousands)
18,293
1,122
7,432
6,507
3,232
12,451
1,903
7,052
3,439
57
10,397
701
1,282
8,200
214
9,818
7
8,822
988
1
50,959
Contract liabilities
Contract liabilities1 include consideration received in advance of the satisfaction of performance obligations. The movement in
contract liabilities is provided below:
2023 (€ thousands)
2022 (€ thousands)
Opening balance
Recognised in revenue in the period
Advance consideration received
Closing balance
8. Operating profit
Operating profit is after charging the following:
Labour costs2
Depreciation and amortisation
Advertising and marketing services
IT expenses
Impairment (loss) / reversal on trade receivables and
contract assets
Other3
2,982
(5,620)
6,352
3,714
1,464
(4,333)
5,851
2,982
2023 (€ thousands)
2022 (€ thousands)
(9,605)
(16,989)
(971)
(725)
(79)
(3,398)
(31,767)
(8,886)
(16,894)
(841)
(692)
(59)
(9,977)
(37,349)
Services provided by the Company’s auditors
2023 (€ thousands)
2022 (€ thousands)
Fees payable for audit services:
Audit of the Company and consolidated financial
statements4
Audit of the Company’s subsidiaries pursuant to
legislation
Total audit remuneration
Fees payable for other services:
- Audit related assurance services
- Transaction related services5
- Other assurance services5
- Tax advisory services
Total non-audit remuneration
Total
(563)
(197)
(760)
-
-
-
-
-
(760)
(244)
(103)
(347)
(110)
(532)
(267)
-
(909)
(1,256)
Due to the large number of customers the Group serves, there are no individual customers whose revenue is greater than 10%
of the Group’s total revenue in all periods presented in these financial statements.
1 Ancillary revenue includes revenue from financial intermediation, subscription services, and other. Financial intermediation revenue accounts for 91% of the total ancillary
revenue for the year ending 30 April 2023 and 94% of the total ancillary revenue for the year ending 30 April 2022.
1 Contract liabilities amount in the statement of financial position also include prepayments received from customers.
2 For the year ended 30 April 2022 labour costs include €1,378 thousand IPO related free share awards expenses (note 25).
3 Other expenses for the year ended 30 April 2022 include €7,393 thousand fees and costs incurred in relation to the Initial Public Offering (IPO).
4 In 2023, fees payable for audit of the Company and consolidated financial statements consist of audit fees for current financial year €461 thousand and previous financial
year €102 thousand.
5 Transaction related and other assurance services provided by the Company’s auditors during the year ended 30 April 2022 relate to the IPO.
120
121
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
Notes to the consolidated financial statements continued
11. Income taxes continued
FINANCIAL STATEMENTS
2023 (€ thousands)
2022 (€ thousands)
Summary of taxation rates by country is presented below:
9. Employee numbers and costs
The average number of persons employed (including Executive Directors but excluding 5 Non-Executive Directors) during the
year was 147 (139 in 2022).
The average number of full-time equivalent persons employed (including Executive Directors but excluding 5 Non-Executive
Directors) during the year, analysed by category, was as follows:
Administration
Key Management Personnel (note 24)
Total
The aggregate payroll costs of these persons were as follows:
2023 (number)
2022 (number)
125
6
131
120
6
126
Wages and salaries
Social security costs
Share-based payment costs (note 25)
Total
10. Net finance costs
Other financial income
Total finance income
Interest expenses1
Commitment and agency fees
Other financial expenses2
Interest unwind on lease liabilities
Total finance expenses
Net finance costs recognised in profit or loss
11. Income taxes
(a) Tax recognised in profit or loss
Current tax expense
Current year
Deferred tax expense
Change in deferred tax
Tax expense
(7,034)
(726)
(7,760)
(1,567)
(9,327)
(6,219)
(645)
(6,864)
(2,022)
(8,886)
2023 (€ thousands)
2022 (€ thousands)
7
7
(2,602)
(80)
(1)
(15)
(2,698)
(2,691)
138
138
(9,426)
(132)
(1,734)
(17)
(11,309)
(11,171)
2023
(€ thousands)
2022 Restated3
(€ thousands)
(4,904)
1,754
(3,150)
(3,102)
1,749
(1,353)
Tax losses can be transferred between companies within the same tax group effectively reducing consolidated income tax
expense.
1 Interest expense for the year ended 30 April 2022 contains €5,075 thousand of upfront fee that was written off upon the repayment of Senior Facility Agreement in July
2021.
(b) Factors affecting the tax expense for the year
The table below explains the differences between the expected tax expense and the Group’s total tax expense for each year.
2023
(€ thousands)
2022 Restated1
(€ thousands)
Profit before tax
Tax at the domestic rates applicable to profits in the coun-
tries concerned2
Non-deductible expenses
Tax on distributions by subsidiary
Recognition of previously unrecognised (derecognition of
previously recognised) deductible temporary differences
Prior year adjustments
United Kingdom3
Lithuania
Latvia4
Estonia4
Luxembourg
26,365
(2,988)
(127)
(85)
50
(3,150)
2023
25%
15%
20%
20%
-
2,445
369
(1,664)
(58)
-
-
(1,353)
2022
19%
15%
20%
20%
25%
(c) Movement in deferred tax balances
For the year ended
30 April 2022:
Intangible assets
amortisation
Other temporary
differences
Tax assets (liabilities)
before set-off
Set-off of tax6
Net tax assets
(liabilities)
Net balance
at 30 April 2021
Restated1
(€ thousands)
Recognised
in profit or loss
Restated1
(€ thousands)
(7,952)
1,691
358
59
(7,594)
1,750
-
-
(7,594)
1,750
Recognised
in equity
(€ thousands)
Net balance at
30 April 2022
(€ thousands)
Deferred
tax asset
(€ thousands)
Deferred
tax liability
(€ thousands)
-
-
-
-
-
(6,261)
417
(5,844)
-
417
417
-
(417)
(6,261)
-
(6,261)
417
(5,844)
-
(5,844)
For the year ended
30 April 2023:
Net balance
at 30 April 2022
(€ thousands)
Recognised
in profit or loss
(€ thousands)
Recognised
in equity5
(€ thousands)
Net balance at
30 April 2023
(€ thousands)
Deferred
tax asset
(€ thousands)
Deferred
tax liability
(€ thousands)
Intangible assets
amortisation
Capitalized borrowing
costs
Tax losses
Other temporary
differences
Tax assets (liabilities)
before set-off
Set-off of tax6
Net tax assets
(liabilities)
1 See note 3 for further details.
(6,261)
1,434
-
-
417
(64)
153
231
(5,844)
1,754
-
-
(5,844)
1,754
-
-
-
20
20
-
20
(4,827)
(64)
153
668
(4,070)
-
-
153
668
821
-
(668)
(4,827)
(64)
-
-
(4,891)
668
(4,070)
153
(4,223)
2 For the year ended 2022, the expected tax amount, being the tax at the domestic rates applicable to profits in the countries concerned, is a tax credit overall due to the
losses incurred by the parent company domiciled in the United Kingdom as a result of IPO related costs, which has a higher corporate income tax rate than the countries
in which the profits were generated.
3 19% until 31 March 2023.
4 0% income tax rate applies in Estonia and Latvia if there are no profit distributions.
5 Taxation on items taken directly to equity of €20 thousand (nil in 2022) relates to share-based payments.
2 Other financial expenses for the year ended 30 April 2022 contain €1,618 thousand of Senior Facility Agreement related early repayment fee.
6 Set-off is allowed as it is the same jurisdiction (Lithuania).
3 See note 3 for further details.
122
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
11. Income taxes continued
Notes to the consolidated financial statements continued
12. Earnings per share continued
FINANCIAL STATEMENTS
(d) Unrecognised deferred tax assets and liabilities
The reconciliation of the weighted average number of shares is provided below:
Deferred tax assets have not been recognised in respect to the tax losses incurred by UAB Antler Group, because it is not
probable that future taxable profit will be available in UAB Antler Group against which the Group can use the benefits therefrom.
Tax losses
2023 (€ thousands)
2022 (€ thousands)
Gross amount
Tax effect
Gross amount
Tax effect
(26,229)
(26,229)
3,934
3,934
(26,229)
(26,229)
3,934
3,934
The aggregate amount of temporary differences associated with investments in subsidiaries for which deferred tax liabilities
have not been recognised is €7,270 thousand (€6,109 thousand in 2022). No deferred tax liability has been recognised as the
Company is able to control the timing of distributions from these subsidiaries and is not expected to distribute these profits in
the foreseeable future.
(e) Tax losses carried forward
2023
2022
Number of shares
Number of shares
Issued ordinary shares at 1 May less ordinary shares held by EBT
498,292,405
435,265,078
Weighted effect of issued ordinary shares
Weighted effect of ordinary shares purchased by EBT
Weighted effect of own shares purchased for cancellation
-
(1,114,685)
(1,094,829)
53,415,350
(212,877)
-
Weighted average number of ordinary shares at 30 April
496,082,891
488,467,552
13. Intangible assets and goodwill
Goodwill
(€ thousands)
Trademarks
and domains
(€ thousands)
Relationship
with clients
(€ thousands)
Other
intangible
assets
(€ thousands)
Total
(€ thousands)
Tax losses carried forward for which no deferred tax asset has been recognised were incurred by the Company’s indirect
subsidiary UAB Antler Group prior to being eligible for transfer to other Group companies.
Cost
According to Lithuanian legislation, deductible tax losses carried forward can be used to reduce the taxable income earned
during the reporting year by maximum 70% of respective legal entity with no Group relief benefit. Tax losses can be carried
forward for an indefinite period, except for the losses incurred as a result of disposal of securities and/or derivative financial
instruments. Such carrying forward is disrupted if the Group and the Company stops its activities due to which these losses
were incurred except when the Group and the Company does not continue its activities due to reasons which do not depend on
the Company itself. The losses from disposal of securities and/or derivative financial instruments can be carried forward for 5
consecutive years and can only be used to reduce the taxable income earned from transactions of the same nature.
Tax losses carried forward by expiration:
Do not expire
Total
12. Earnings per share
2023 (€ thousands)
2022 (€ thousands)
(26,229)
(26,229)
(26,229)
(26,229)
Weighted average number of shares outstanding
496,082,891
488,467,552
Dilution effect on the weighted average number of shares
279,681
-
Diluted weighted average number of shares outstanding
496,362,572
488,467,552
Profit / (loss) attributable to owners of the Company (€ thousands)
Basic earnings per share (€ cents)
Diluted earnings per share (€ cents)
23,215
4.68
4.68
1,092
0.22
0.22
2023
2022 Restated1
Basic earnings per share (EPS) amounts are calculated by dividing net profit for the year attributable to ordinary equity holders
of the parent by the weighted average number of ordinary shares outstanding during the year. The weighted average number of
shares for the comparative period has been stated as if the Group share for share exchange (see note 17) has occurred at the
beginning of the comparative period.
In calculating diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of
all potentially dilutive shares. The Group’s potentially dilutive instruments are in respect of share-based incentives granted
to employees. Options under the Performance Share Plan (note 25) are contingently issuable shares and are therefore only
included within the calculation of diluted EPS if the performance conditions are satisfied.
The average market value of the Group’s shares for the purposes of calculating the dilutive effect of share-based incentives was
based on quoted market prices during the period which the share-based incentives were outstanding.
Balance at 1 May 2021
328,732
63,220
50,710
1,347
444,009
Disposals
-
-
-
Balance at 30 April 2022
328,732
63,220
50,710
(23)
1,324
(23)
443,986
Balance at 1 May 2022
328,732
63,220
50,710
1,324
443,986
Acquisitions
Disposals
1,229
-
120
-
250
-
-
(33)
1,599
(33)
Balance at 30 April 2023
329,961
63,340
50,960
1,291
445,552
Accumulated amortisation and impairment losses
Balance at 1 May 2021
Amortisation
Disposals
Balance at 30 April 2022
Balance at 30 April 2022
Amortisation
Disposals
Balance at 30 April 2023
Carrying amounts
Balance at 30 April 2021
Balance at 30 April 2022
Balance at 30 April 2023
-
-
-
-
-
-
-
10,693
16,132
6,323
9,824
17,016
25,956
17,016
6,332
25,956
9,866
23,348
35,822
275
273
(23)
525
525
257
(33)
749
27,100
16,420
(23)
43,497
43,497
16,455
(33)
59,919
328,732
52,527
34,578
1,072
416,909
328,732
329,961
46,204
39,992
24,754
15,138
799
542
400,489
385,633
Impairment testing for cash generating units containing goodwill
The following carrying amounts of goodwill are allocated to each cash-generating unit within the Group:
Diginet LTU UAB
AllePal OU
Kinnisvaraportaal OU
City24 SIA
VIN Solutions OU
2023 (€ thousands)
2022 (€ thousands)
228,515
82,297
13,976
3,998
1,175
329,961
228,515
82,027
13,976
3,039
1,175
328,732
1 See note 3 for further details.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
13. Intangible assets and goodwill continued
Notes to the consolidated financial statements continued
FINANCIAL STATEMENTS
The smallest groups of assets that generate cash inflows from continuing use are legal entities based in Lithuania, Estonia and
Latvia. The recoverable amounts of each cash generating unit as at 30 April 2023 and 2022 were determined based on the value
in use calculations that use cash flow projections based on the five-year financial forecasts. The first year in the forecasts is the
official budget approved by the Board, with the remaining years forecast prepared by management. The post-tax discount rates
applied to the post-tax cashflows are derived from the post-tax weighted cost of capital. The discount rate takes into account
the risk-free rate of return, the market risk premium and beta factor reflecting the average beta for the Group. The assumptions
used in the calculation of the Group’s weighted average cost of capital are benchmarked to externally available data. Terminal
value growth rate was set for each CGU with reference to the long-term growth rate for the market and territory in which the
CGU operates. Budgeted revenues and expenses were estimated based on past performance and management’s expectation of
growth from pricing, volume and product development. Due, in part, to rapid technological changes, evolving industry standards
and changing needs and preferences of listers and consumers, the Group’s competitive landscape is changing rapidly. It is,
therefore, difficult for the Group to accurately assess or predict the Group’s future competitors and the competitive threats the
Group may be facing.
The key assumptions used for the value in use calculations are as follows:
2023
In percent
Diginet LTU
UAB
AllePal OÜ
Kinnisvara-
portaal OÜ
City24 SIA
VIN
SolutionsOÜ
Discount rate (pre-tax)
Terminal value growth rate
12%
2.5%
13%
2.5%
13%
2.5%
14%
2.5%
13%
2.5%
2022
In percent
Diginet LTU
UAB
AllePal OÜ
Kinnisvara-
portaal OÜ
City24 SIA
VIN
SolutionsOÜ
Discount rate (pre-tax)
Terminal value growth rate
9%
2.0%
9%
2.0%
9%
2.0%
10%
2.0%
9%
2.0%
The value in use forecasts assume growth in revenue in the initial five-year period. Key drivers to future growth rates are
dependent on the Group’s ability to maintain and grow income streams. The level of headroom may change if different growth
rate assumptions or a different pre-tax rates were used in the cashflow projections. Therefore, revenue growth and discount
rate are considered to be key assumptions. The discount rate has increased compared to last year reflecting an increase in the
risk-free rate of return and market risk premium.
Having completed the impairment review for the year ended 30 April 2023, no impairment has been recognised in relation to any
of the CGU’s (for the period ended 30 April 2022: no impairment).
Sensitivity in changes to key assumptions
Management has considered reasonably possible although not currently expected changes in three key assumptions being
revenue growth, pre-tax discount rate and terminal growth. There are no changes to the key assumptions that are considered
by the Directors to be reasonably possible, which give rise to an impairment of goodwill relating to any of the CGU’s, except for
Vin Solutions OÜ CGU.
Vin Solutions OÜ CGU
The estimated Vin Solutions OÜ CGU recoverable amount exceeds the CGU’s carrying amount by €313 thousand. Vin Solutions
revenue is forecasted to grow 65% in the initial five-year period as a result of a project together with Autoplius whereby car
history reports service will be sold to customers in Lithuania. If the forecasted revenue growth in the initial five-year period
used in the value-in-use calculation for Vin Solutions OÜ CGU had been 15pp lower than management’s estimate (50% instead
of 65%), the group would have had to recognise an impairment against the carrying amount goodwill of €379 thousand. If the
revenue growth in the initial five-year period was 6pp lower than management’s estimate, VIN Solutions OÜ CGU recoverable
amount would equal its carrying amount.
If the pre-tax discount rate used in the value-in-use calculation for Vin Solutions OÜ CGU had been 3pp higher than management’s
estimate (13% instead of 10%), the group would have had to recognise an impairment against the carrying amount goodwill of
€149 thousand. If the pre-tax discount rate was 2pp higher than the management’s estimate, VIN Solutions OÜ CGU recoverable
amount would equal its carrying amount.
If the forecasted revenue growth in the initial five-year period used in the value-in-use calculation for Vin Solutions OÜ CGU had
been 10pp lower and pre-tax discount rate was 1pp higher than management’s estimate, the group would have had to recognise
an impairment against the carrying amount goodwill of €310 thousand. If the revenue growth in the initial five-year period was
3pp lower and pre-tax discount rate was 1pp higher than management’s estimates, VIN Solutions OÜ CGU recoverable amount
would equal its carrying amount.
There are no changes to the terminal growth rate that are considered to be reasonably possible, that would give rise to an
impairment of VIN Solutions OÜ CGU.
14. Right-of-use assets
Buildings
(€ thousands)
Vehicles
(€ thousands)
Other
(€ thousands)
Total
(€ thousands)
Cost
Balance at 30 April 2021
Acquisitions
Disposals
Re-assessment
Balance as at 30 April 2022
Acquisitions
Disposals
Re-assessment
Balance as at 30 April 2023
Accumulated depreciation and impairment losses
Balance at 30 April 2021
Depreciation
Disposals
Balance as at 30 April 2022
Depreciation
Disposals
Balance as at 30 April 2023
Carrying amounts
Balance at 30 April 2021
Balance at 30 April 2022
Balance at 30 April 2023
996
-
-
30
1,026
56
(159)
731
1,654
420
256
-
676
260
(109)
827
576
350
827
255
22
(89)
-
188
-
-
1
189
85
43
(26)
102
37
-
139
170
86
50
29
15
-
-
44
-
-
-
44
14
9
-
23
14
-
37
15
21
7
1,280
37
(89)
30
1,258
56
(159)
732
1,887
519
308
(26)
801
311
(109)
1,003
761
457
884
Certain lease rentals include extension options. In 2023, the Group extended the term of the existing lease of Vilnius office space
which resulted in a lease-reassessment.
15. Trade and other receivables
Trade receivables
Expected credit loss on trade receivables
Other short-term receivables
Total
2023 (€ thousands)
2022 (€ thousands)
3,322
(45)
70
3,347
3,002
(71)
39
2,970
Trade and other receivables are non-interest bearing. The Group has recognized impairment losses in the amount of €45
thousand as at 30 April 2023 (€71 thousand as at 30 April 2022). Change in impairment losses for trade receivables, netted with
recoveries, for financial year amounted to €79 thousand as at 30 April 2023 and €59 thousand as at 30 April 2022. As at 30 April
2023 and 30 April 2022, there are no pledges on trade receivables.
Reconciliation of changes in impairment allowance for trade receivables:
Balance at 30 April 2021
Recoveries
Write offs
Changes in allowance and allowance recognised for new financial assets originated
Balance as at 30 April 2022
Recoveries
Write offs
Changes in allowance and allowance recognised for new financial assets originated
Balance as at 30 April 2023
(€ thousands)
(84)
77
72
(136)
(71)
70
105
(149)
(45)
126
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
Notes to the consolidated financial statements continued
FINANCIAL STATEMENTS
16. Cash and cash equivalents
19. Dividends
The balance of the Group’s cash and cash equivalents as at 30 April 2023 and 30 April 2022 comprises of cash in banks. The
credit rating of banks the Group holds its cash and cash equivalents varies from A1 to Baa3 as per Moody’s ratings.
As at 30 April 2023 and 30 April 2022, there are no restrictions on cash in Group’s bank accounts.
17. Equity
Balance as at 1 May 2021
Group restructure:
• Redeemable preference share redeemed
• Share issue for IPO
• Share issue related transaction costs
Nominal value of ordinary shares reduced and share premium
cancelled to create distributable reserves
Shares issued to satisfy IPO related free share awards (note 25)
392,405
Balance as at 30 April 2022
Purchase and cancellation of own shares
Balance as at 30 April 2023
500,392,405
(3,429,240)
496 963 165
Number
of shares
Share capital
amount
(€ thousands)
Share premium
amount
(€ thousands)
435,265,079
506,509
-
64,734,921
-
-
(57)
75,322
-
-
-
48,959
(5,816)
(575,956)
(43,143)
4
5,822
(39)
5,783
-
-
-
-
On 5 July 2021 BCG was inserted into the Group’s holding structure via a share for share exchange with the shareholders of a
previous top holding entity, ANTLER TopCo S.a.r.l:
1) BCG issued 38,740,076 ordinary shares at £1 (€1.16) each in the share for share exchange to acquire ANTLER Management
S.A. that was a minority shareholder of ANTLER TopCo S.a.r.l.
2) BCG issued 396,525,002 ordinary shares at £1 (€1.16) each in the share for share exchange to acquire the rest of ANTLER
TopCo S.a.r.l.
3) 1 redeemable preference share with a value of £49,999 (€57,487) per share was redeemed.
On 5 July 2021 BCG issued 64,734,921 ordinary shares with a value of £1 (€1.16) each that were listed at £1.65 (€1.92) on the
London Stock Exchange.
Share issue related expenses amounting to €5,816 thousand were set against the share premium that arose during the listing,
out of which €2,942 thousand relate to the underwriting fee that reduced the cash received from the IPO proceeds.
On 23 September 2021 BCG undertook a Court approved capital reduction to create distributable reserves. The entire amount
standing to the credit of BCG share premium account was cancelled and the nominal value of each ordinary share in issue in the
capital of BCG was reduced from £1 (€1.15) to £0.01 (€0.01). This created a total of €619,100 thousand in distributable reserves.
On 19 October 2021 BCG issued 392 405 shares with a value of £0.01 (€0.01) each to be gifted, on an unrestricted basis, to all
employees other than the Executive Directors and the rest of the Senior Management team.
Share capital and share premium in the comparative periods have been stated as if the Group share for share exchange has
occurred at the beginning of the comparative periods. For this reason, a capital reorganisation reserve has been created which
comprises a difference between the recalculated share capital amount and the total of share capital and share premium of
ANTLER TopCo S.a.r.l.
Included within shares in issue at 30 April 2023 are 3,600,000 (2,100,000 in at 30 April 2022) shares held by the Employee Benefit
Trust (“EBT”) (note 18).
18. Own shares held
Balance as at 1 May 2021
Purchase of shares for performance share plan1
Balance as at 30 April 2022
Purchase of shares for performance share plan1
Balance as at 30 April 2023
Shares held by EBT
Amount (€ thousands)
-
3,418
3,418
2,834
6,252
Number
-
2,100,000
2,100,000
1,500,000
3,600,000
1 Shares were purchased on 29 July 2022 at a price of £1.54 (€1.84) per share and on 2 August 2022 at a price of £1.62 (€1.93) per share. Stamp duty reserve tax and
commissions amounting to €12 thousand were capitalised in the year (€16 thousand in 2022).
€ cents per share
€ thousands
€ cents per share
€ thousands
2023
2022
2022 final dividend paid
1.4
6,955
2023 interim dividend paid
0.8
3,963
Total
2.2
10,918
-
-
-
-
-
-
The proposed final dividend for the year ended 30 April 2023 of 1.7 € cents per share is subject to approval by Company
shareholders at the Annual General Meeting (‘AGM’) and hence has not been included as a liability in the financial statements.
The 2023 final dividend will be paid on 13 October 2023 to shareholders on the register at the close of business on 8 September
2023 and the payment will comprise approximately €8,400 thousand of cash.
The Directors intend to return one third of Adjusted net income (as defined and reconciled in note 5) each year via an interim and
final dividend, split one third and two thirds, respectively. Adjusted net income (as reconciled in note 5) for 2023 was €37,979
thousand (€31,198 in 2022).
20. Loans and borrowings
Non-current liabilities
Bank loan
Lease liabilities
Current liabilities
Bank loan
Lease liabilities
Bank loan:
2023 (€ thousands)
2022 (€ thousands)
68,716
515
69,231
82,311
167
82,478
2023 (€ thousands)
2022 (€ thousands)
180
282
462
121
202
323
Period end
Maturity
Loan currency
Effective interest rate Amount (€ thousands)
Bank Loan
Bank Loan
30 April 2023
30 April 2022
2026 July
2026 July
€
€
2.91%
4.04%1
68,896
82,432
In July 2021 the Group drew down a new loan consisting of Facility B (€98,000 thousand) and agreed on a new revolving credit
facility of €10,000 thousand. The previous loan was fully repaid in July 2021. Due to early repayment the Group paid an early
repayment fee that amounted to €1,618 thousand (included within other financial expenses for the year ended 30 April 2022).
The Group also wrote-off a capitalised upfront fee that amounted to €5,075 thousand (included within interest expenses for the
year ended 30 April 2022).
As at 30 April 2023 the loan comprised of Facility B (outstanding balance: €70,000 thousand as €14,000 thousand was repaid
during the financial year), the undrawn revolving credit facility amounted to €10,000 thousand. As at 30 April 2022 the loan
comprised of Facility B (outstanding balance: €84,000 thousand), the undrawn revolving credit facility amounted to €10,000
thousand.
Capitalised debt issue costs amounted to €1,284 thousand and €1,689 thousand for the year ended 30 April 2023 and 30 April
2022 respectively. Interest payable amounted to €180 thousand and €121 thousand for the year ended 30 April 2023 and 30
April 2022 respectively.
The loan agreement prescribes a Total Leverage Ratio covenant. Total Leverage Ratio is calculated as Net Debt over last twelve
months (LTM) of Adjusted EBITDA and shall not exceed 5.50:1. As at 30 April 2023 and 30 April 2022, the Group complied with
the covenant prescribed in the loan agreement.
As per the same agreement, the interest margin for each facility is tied to the Total Leverage Ratio at each interest calculation
date on a semi-annual basis:
1 Effective interest rate for the year ended 30 April 2022 includes 2 months’ worth of interest on a pre-IPO higher margin loan that was repaid in July 2021. Since IPO the
interest rate margin has reduced to 2.0% due to lower leverage and even further reduced to 1.75% after publishing the first set of annual financial statements, however the
positive impact of the reduction was partly offset by the increase in EURIBOR.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Total Leverage Ratio
Greater than 4.50:1
Equal to or less than 4.50:1 but greater than 4.00:1
Equal to or less than 4.00:1 but greater than 3.50:1
Equal to or less than 3.50:1 but greater than 3.00:1
Equal to or less than 3.00:1 but greater than 2.75:1
Equal to or less than 2.75:1 but greater than 2.50:1
Equal to or less than 2.50:1
Notes to the consolidated financial statements continued
20. Loans and borrowings continued
Facility B Margin (% p.a.)
Revolving Facility Margin (% p.a.)
3.50
3.00
2.75
2.50
2.25
2.00
1.75
3.50
3.00
2.75
2.50
2.25
2.00
1.75
The following pledges and securities were granted as of 30 April 2023 and 30 April 2022: group companies shares. The carrying
amount of pledged assets is as follows:
Pledged assets
Group companies shares1
2023 (€ thousands)
2022 (€ thousands)
332,227
332,227
332,227
332,227
Reconciliation of movements of liabilities to cashflows arising from financing
activities
Balance as at 1 May 2021
Changes from financing cash flows
• Proceeds from loans and borrowings
• Repayment of borrowings
• Payment of lease liabilities
Total changes from financing cash flows
Other liability related changes
• New leases
• Lease disposal
• Capitalised borrowing costs
• Capitalised borrowing costs write off
•
•
Interest expenses
Interest paid
Total other liability related changes
Balance as at 30 April 2022
Borrowings
(€ thousands)
212,463
Lease liabilities
(€ thousands)
Total
(€ thousands)
663
213,126
96,650
(228,295)
-
(131,645)
-
-
(676)
5,075
4,351
(7,136)
1,614
82,432
-
-
(305)
(305)
67
(56)
-
-
17
(17)
11
369
96,650
(228,295)
(305)
(131,950)
67
(56)
(676)
5,075
4,368
(7,153)
1,625
82,801
Balance as at 1 May 2022
82,432
369
82,801
Changes from financing cash flows
• Repayment of borrowings
• Payment of lease liabilities
Total changes from financing cash flows
Other liability related changes
• New leases and lease reassessments
• Lease disposal
•
•
Interest expenses
Interest paid
Total other liability related changes
Balance as at 30 April 2023
(14,000)
-
(14,000)
-
-
2,602
(2,138)
464
68,896
-
(247)
(247)
721
(46)
15
(15)
675
797
(14,000)
(247)
(14,247)
721
(46)
2,617
(2,153)
1,139
69,693
1 As defined in the loan agreement, the pledged assets include the shares held by Group companies (see the full list of subsidiaries in note 28):
• the shares of UAB Antler Group that are held by BCG HoldCo Limited;
• the shares of Baltics Classifieds Group OÜ and UAB Diginet LTU that are held by UAB Antler Group;
• the shares of AllePal OÜ that are held by Baltics Classifieds Group OÜ.
Notes to the consolidated financial statements continued
FINANCIAL STATEMENTS
21. Trade and other payables
Trade payables
Accrued expenses
Other tax
Customer credit balances
Other payables
2023 (€ thousands)
2022 (€ thousands)
299
391
1,326
2,363
130
4,509
235
344
1,578
2,289
12
4,458
22. Financial risk management
In its activities, the Group is exposed to various financial risks: market risk (including interest rate risk), credit risk and liquidity
risk. The Directors are responsible for creation and control of overall risk management policy in the Group.
Risk management policies are established to identify and analyse the risks faced by the Group, and to set appropriate risk
limits and controls. Risk management policies and systems are reviewed on a regular basis to reflect changes in the market
conditions and the Group‘s activities. The Group, through its training and management standards and procedures, aims to
develop a disciplined and constructive control environment in which all employees understand their roles and obligations. From
time to time, the Group may use derivative financial instruments in order to hedge against certain risks.
The note below presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing the risk, and the Group’s management of capital.
(a) Credit risk
Credit risk is the risk of Group's financial loss if a customer or counterparty fails to comply with contractual obligations. Credit risk
is controlled by applying credit limits depending on the risk profile of the customer and monitoring debt collection procedures.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was as follows:
Trade receivables
Other short term receivables
Cash and cash equivalents
Note
2023 (€ thousands)
2022 (€ thousands)
15
15
16
3,277
70
27,070
30,417
2,931
39
19,914
22,884
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management
also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the
industry and country in which customers operate.
Credit risk related to loans receivable is managed by monitoring counterparty’s profitability and their cash flow projections.
Credit risk related to cash and cash equivalent balances is managed by monitoring credit ratings of the Group’s banks.
Expected credit loss assessment for trade receivables
The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss
(including but not limited to external ratings, audited consolidated financial statements, management accounts and cash flow
projections and available press information about customers) and applying experienced credit judgement.
Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are aligned
to external credit rating definitions from agencies.
An ECL rate is calculated based on delinquency status and actual credit loss experience over the past three years. These
rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which the
historical data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of
the receivables.
The trade receivables do not have a significant financing component. The Group’s credit terms on sales to business customers
are 7-60 days from receipt of the invoice by the customer. For sales to private customers, the Group collects payments instantly
at the time of the transaction and is not exposed to credit risk.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
22. Financial risk management continued
Notes to the consolidated financial statements continued
22. Financial risk management continued
FINANCIAL STATEMENTS
The Group applies the simplified approach for trade receivables.
The Group has elected to use a provision matrix to calculate lifetime ECLs, which is based on:
• Historical default rates over the expected life of the trade receivables
• Adjustment for forward-looking estimates
Impairment allowance – analysis as at 30 April 2023:
Not past due
1 – 30 days past due
31 – 60 days past due
61 – 90 days past due
> 90 days past due
Impairment allowance – analysis as at 30 April 2022:
Not past due
1 – 30 days past due
31 – 60 days past due
61 – 90 days past due
> 90 days past due
ECL rate
(0.1%)
(0.7%)
(3.0%)
(6.0%)
(16.8%)
(1.4%)
ECL rate
(0.4%)
(0.3%)
(1.1%)
(2.0%)
(19.2%)
(2.4%)
Trade receivables
(€ thousands)
Impairment allowance
(€ thousands)
2,701
313
72
26
210
3,322
(4)
(2)
(2)
(2)
(35)
(45)
Trade receivables
(€ thousands)
Impairment allowance
(€ thousands)
2,101
378
147
71
305
3,002
(9)
(1)
(2)
(1)
(58)
(71)
For the movement in impairment allowance see note 15.
(b) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group‘s policy is to maintain sufficient amounts of cash and cash equivalents via operations, borrowings and credit facilities
to meet its commitments at a given date. This policy excludes the potential impact of extreme circumstances that cannot be
reasonably predicted, such as natural disasters.
Cash flow budgeting is performed by the Group’s management and the Group’s liquidity requirements are monitored to ensure
it has sufficient cash to meet operational needs.
The Group has access to a credit facility with the current lender at a total of €80,000 thousand. All of the commitment matures
in July 2026. At 30 April 2023, €70,000 thousand was drawn under the credit facilities available. The undrawn revolving credit
facility amounted to €10,000 thousand. The covenant of this credit facility is discussed in note 20.
The table below summarises the remaining contractual maturities of financial liabilities as at 30 April of 2023, including
estimated interest payments:
Financial
liabilities
Carrying
amount
(€ thousands)
Contractual
cash flows
(€ thousands)
Up to 1 year
(€ thousands)
1-2 years
(€ thousands)
2-5 years
(€ thousands)
More than
5 years
(€ thousands)
Bank loan
68,896
(80,828)
(3,340)
Lease liabilities
Trade payables
Other payables
797
299
2,493
72,485
(895)
(299)
(2,493)
(84,515)
(286)
(299)
(2,493)
(6,418)
(3,345)
(198)
(74,143)
(411)
-
-
-
-
(3,543)
(74,554)
-
-
-
-
-
The table below summarises the remaining contractual maturities of the Group’s financial liabilities as at 30 April of 2022,
including estimated interest payments:
Financial
liabilities
Carrying
amount
(€ thousands)
Contractual
cash flows
(€ thousands)
Up to 1 year
(€ thousands)
1-2 years
(€ thousands)
2-5 years
(€ thousands)
More than
5 years
(€ thousands)
Bank loan
82,432
(91,501)
(1,764)
Lease liabilities
Trade payables
Other payables
369
235
2,301
85,337
(472)
(235)
(2,301)
(94,509)
(273)
(235)
(2,301)
(4,573)
(1,769)
(134)
-
-
(87,968)
(65)
-
-
(1,903)
(88,033)
-
-
-
-
-
(c) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Group's
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimizing the return.
i) Currency risk
EUR is the functional currency of each legal entity comprising the Group, as well as the Group’s reporting currency. The Group is
exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than EUR.
The Group is not using any financial instruments to hedge against the foreign currency exchange risk.
As at 30 April 2023, the Group has no significant monetary assets and liabilities denominated in other currencies. As at 30 April
2022, the Group had no significant monetary assets and liabilities denominated in other currencies than EUR except for €1.7m
cash held in GBP.
ii) Interest rate risk
The Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group has
no significant interest-bearing assets.
At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was as follows:
Carrying amount
Instruments with a variable interest rate
Bank loan
2023 (€ thousands)
2022 (€ thousands)
68,716
68,716
82,311
82,311
Cash flow sensitivity analysis for variable rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity
and profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant.
2023
Impact of financial instruments on profit before tax
Financial instruments by class
Variable rate instruments
Increase
+100 bp
Impact to finance costs
(€ thousands)
(700)
Decrease
-100 bp
Impact to finance costs
(€ thousands)
700
2022
Impact of financial instruments on profit before tax
Financial instruments by class
Variable rate instruments
Increase
+100 bp
Impact to finance costs
(€ thousands)
(840)
Decrease
-100 bp
Impact to finance costs
(€ thousands)
840
132
133
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023
Notes to the consolidated financial statements continued
22. Financial risk management continued
Notes to the consolidated financial statements continued
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
c) Capital management
Equity in combination with net debt is considered to be capital for capital management purposes. The Group’s policy is to
maintain the confidence of creditors and the market, to fund business development opportunities in the future and comply with
external capital requirements.
d) Fair value of financial instruments
The Group’s principal financial instruments not carried at fair value are trade and other receivables, trade and other payables,
non-current and current borrowings.
The management of the Group is of the opinion that carrying amount of trade and other receivables, trade and other payables is
a reasonable approximation of fair value due to their short-term nature.
Based on the discounted cash flow analysis performed, management considers that the borrowings carrying amount is a
reasonable approximation of fair value. The discounted cash flow analysis was performed using a market rate of interest and
principal payments discounted to a present value using interest rate as a discount rate.
A number of the Group’s accounting policies and disclosures require determination of fair value, for both financial and non-
financial assets and liabilities.
Fair value hierarchy
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values
are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Group recognised transfers between the fair value hierarchy from the end of the reporting period in which the change
occurred. Below listed are financial assets and financial liabilities:
2023
Trade and other receivables
Cash and cash equivalents
Loans and borrowings
Trade and other payables
2022
Trade and other receivables
Cash and cash equivalents
Loans and borrowings
Trade and other payables
Carrying amount
(€ thousands)
Level 1
(€ thousands)
Level 2
(€ thousands)
Level 3
(€ thousands)
Total
(€ thousands)
3,347
27,070
(68,896)
(4,509)
(42,988)
-
-
-
-
-
-
-
(68,896)
-
(68,896)
-
-
-
-
-
-
-
(68,896)
-
(68,896)
Carrying amount
(€ thousands)
Level 1
(€ thousands)
Level 2
(€ thousands)
Level 3
(€ thousands)
Total
(€ thousands)
2,970
19,914
(82,432)
(4,458)
(64,006)
-
-
-
-
-
-
-
(82,432)
-
(82,432)
-
-
-
-
-
-
-
(82,432)
-
(82,432)
23. Related party transactions
During the period ended 30 April 2023 the transactions with related parties outside the consolidated Group consisted of
remuneration of key management personnel (note 24), including share option awards under the PSP scheme (note 25);
During the period ended 30 April 2022 the transactions with related parties outside the consolidated Group included:
• remuneration of key management personnel (note 24), including share option awards under the PSP scheme (note 25);
• before the IPO a part of ANTLER Management S.A. shares were acquired by the three Executive Directors together with
other key employees as part of management incentive program that existed since BCG acquisition by funds advised by
Apax Partners (“Apax”) in FY 2020; shares were purchased at a value equal to the price paid by Apax in FY 2020;
• at the IPO three Non-Executive Directors purchased shares of ANTLER TopCo Sàrl outside the Offer at the IPO price;
• share for share exchange transaction during the reorganisation for the IPO (note 17) where three Executive Directors, three
Non-Executive Directors and Directors of Group Companies exchanged the shares they held in ANTLER Management S.A.
and ANTLER TopCo Sàrl for the like-for-like amount of shares in Baltic Classifieds Group PLC.
24. Remuneration of key management personnel and
other payments
Key management personnel comprises 3 Executive directors (CEO, CFO, COO), 5 Non-Executive Directors and Directors of Group
companies. Remuneration of key management personnel in the reporting year, including social security and related accruals,
amounted to €1,257 thousand for the period ended 30 April 2023 and €969 thousand for the period ended 30 April 2022. Share-
based payments amounted to €1,031 thousand for the period ended 30 April 2023 and €509 thousand for the period ended 30
April 2022.
During the period ended 30 April 2023 the Executive directors of the Group were granted a set number of share options under
the PSP scheme. See note 25 for further detail.
During the year ended 30 April 2023 and 30 April 2022, key management personnel of the Group did not receive any loans,
guarantees, no other payments or property transfers occurred and no pension or retirement benefits were paid.
25. Share-based payments
Performance Share Plan
The Group currently operates a Performance Share Plan (PSP) that is subject to a service and a non-market performance
condition. The estimate of the fair value of the PSP is measured using Black-Scholes pricing model.
The total charge in the period relating to the PSP scheme was €1,567 thousand (€644 thousand in the period ended 30 April
2022).
The PSP plan consists of share options for Executive Directors and certain key employees with a vesting period of 3 years.
If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Furthermore, options are
forfeited if the employee leaves the Group before the options vest, unless under exceptional circumstances.
On 12 July 2022, the Group awarded 1,221,592 share options under the PSP scheme. For these awards, the Group’s performance
is measured by reference to the Group's Earnings per Share in FY2025. These awards have a service condition and vest in 3
years. On 12 July 2022 the Group also granted a retention award in a form of 244,318 share options to two new joiners as part
of GetaPro acquisition. These awards have a service condition only and vest in 1 year.
The fair value of the 2022 award was determined to be €1.40 (€1.46 for GetaPro employees) per option using a Black-Scholes
pricing model. The resulting share-based payments charge is being spread evenly over the period between the grant date and
the vesting date.
The assumptions used in the measurement of the fair value at grant date of the PSP awards are as follows:
Grant
date
Condition
Share price at
grant date (€)
Exercise
price (€)
Expected
volatility (%)
Vesting
period (years)
Risk-free
rate (%)
Dividend
yield (%)
Fair value
per option (€)
12 July
2022
EPS performance
condition, service condition
1.49
0.01
69%
12 July
2022
Service condition
1.49
0.01
69%
27 July
2021
EPS performance
condition, service condition
2.62
0.01
53%
3
1
3
1.37%
1.96%
1.40
1.37%
1.96%
1.46
(0.20)%
0.78%
2.56
The expected volatility was determined using UK listed peers’ historical volatility average as at the date of option valuation own
data was not available due to a relatively recent Admission.
134
135
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
25. Share-based payments continued
Notes to the consolidated financial statements continued
FINANCIAL STATEMENTS
The number of options outstanding and exercisable as at 30 April 2023 was as follows:
Outstanding at beginning of period
Options granted in the period
Options exercised in the period
Options forfeited in the period
Outstanding at period ending
IPO Related Free Share Awards
2023 (number)
2022 (number)
1,041,475
1,465,911
-
(23,439)
2,483,947
-
1,041,475
-
-
1,041,475
In 2022, as part of IPO and in addition to the PSP scheme, 392,405 of free shares were awarded to all employees of the Group
with the number per employee based on length of service with the business and ranging between €3,000 and €15,000 in value.
The total value of the shares awarded amounted to €968 thousand. Fringe benefit tax was paid by the Group, it amounted to
€410 thousand.
Executive Directors and the rest of Senior Management team did not receive free shares under this arrangement.
26. Enquiries by Competition Authorities
As at 30 April 2023, the Group had three open enquiries from Competition Authorities, however the Directors’ view is that the
likelihood of any material outflow of resources in respect of these enquiries is remote, and therefore no provision or contingent
liability has been recognised in the financial statements in respect of these matters (no provision or liability in 2022).
On March 2019 the Estonian Competition Authority ("ECA”) initiated supervisory proceedings against the AllePal OÜ and
Kinnisvaraportaal OÜ, the operators of two real estate online classified portals, based on the complaint filed by various real
estate companies and portals ("Claimants"). The Claimants alleged that the Group had abused its position by unfairly limiting
the conditions for XML data exchange and applying excessively high prices. On 12 November 2021 the ECA terminated the
supervisory proceedings with regard to the part that concerned the conditions of XML data exchange. The Group is co-operating
with the ECA and although the Group expects that the supervisory proceedings will be terminated without any material effect
to the financial position or operations of the Group, the Group cannot make any assurances that the ECA will not find any
infringements. As the ECA or any other Estonian authorities have not initiated any misdemeanour (or criminal) proceedings
against any Group company, the ongoing supervisory proceedings cannot lead to any imposition of fines to any Group company,
however, if the ECA concludes that AllePal OÜ and Kinnisvaraportaal OÜ abused their position, the ECA could issue a precept
ordering these Group companies to end any ongoing infringements.
On 4 February 2022 the ECA initiated supervisory proceedings against AllePal OÜ, the operator of real estate online classified
portal, based on the complaint filed by Reales OÜ. Reales OÜ had entered into service agreement with AllePal OÜ for the insertion
of real estate ads on both of real estate online classified portals, and according to the complaint, AllePal OÜ unfairly refused
to provide the service to Reales OÜ by terminating the agreement. According to AllePal OÜ, service agreement was terminated
because the claimant used the services to provide real estate ads brokerage or aggregation services and did not engage in
real estate brokerage, for which the real estate online classifieds portals are intended. AllePal OÜ actively co-operates with the
ECA and provides all necessary information and holds negotiations with Reales OÜ in order to develop a suitable contract and
the pricing for the service needed by the claimant. On 15 March 2022, Reales OÜ submitted an additional complaint to initiate
additional supervisory proceedings against the AllePal OÜ, which alleges that the pricing difference between the prices offered
to the business and private customers indicates the abuse of a dominant position. On 1 April 2022 the ECA decided not to
initiate additional proceedings and investigate the raised question within the ongoing supervisory proceedings. As the ECA or
any other Estonian authorities have not initiated any misdemeanour (or criminal) proceedings against any Group company, the
ongoing supervisory proceedings cannot lead to any imposition of fines to any Group company, however, if the ECA concludes
that AllePal OÜ and Kinnisvaraportaal OÜ abused their position, the ECA could issue a precept ordering these Group companies
to end any ongoing infringements.
On 7 November 2022, the ECA initiated supervisory proceedings against the AllePal OÜ, the operator of online classifieds portal
for automotive Auto24.ee (“Auto24”), based on the signals from the market that Auto24 increased the prices to both business
and private customers to levels which may be excessive from the competition law perspective. The Group is co-operating with
the ECA and although the Group expects that the supervisory proceedings will be terminated without any material effect to the
financial position or operations of the Group, the Group cannot make any assurances that the ECA will not find any infringements.
As the ECA or any other Estonian authorities have not initiated any misdemeanour (or criminal) proceedings against the Auto24,
the ongoing supervisory proceedings cannot lead to imposition of fines to AllePal OÜ, however, if the ECA concludes that AllePal
OÜ abused their position, the ECA could issue a precept ordering these Group companies to end any ongoing infringements.
136
27. Business combinations
On 1 July 2022, the Group's subsidiary City24 SIA acquired a 100% control of GetaPro business. The business combination
included an acquisition of SIA GetaPro assets consisting of getapro.lv and getapro.ee portals, business processes and
employees. No liabilities were acquired. The acquired assets meet the definition of a business as per IFRS 3 therefore an
acquisition accounting exercise was performed.
Getapro.lv and getapro.ee are services portals operating in Latvia and Estonia. The acquisition provided the Group with increased
share of Latvian and Estonian classifieds markets.
For the ten months ended 30 April 2023, GetaPro portals contributed revenue of €132 thousand and loss of €545 thousand
to Group’s result. If the acquisition had occurred on 1 May 2022, management estimates that consolidated revenue would
have been higher by €26 thousand, and consolidated profit for the financial year would have been lower by approximately €42
thousand.
Consideration
Cash
Total consideration transferred
Acquisition related costs
Acquisition-related costs (legal fees, due diligence costs and other) are included
in other expenses for the twelve months ended 30 April 2023
Recognised amounts of identifiable assets acquired:
Property, plant and equipment
Intangible assets
Total identifiable net assets
Recognised amounts of identifiable intangible assets acquired and their useful economic lives:
Internet domains
Contracts and relationships
Total identifiable intangible assets
UEL
10 years
5 years
€ thousands
1,600
1,600
€ thousands
43
€ thousands
1
370
371
€ thousands
120
250
370
The relief-from-royalty method and multi-period excess earnings method were used for determination of the fair value of the
intangible assets. The relief-from-royalty method considers the discounted estimated royalty payments that are expected to be
avoided as a result of the internet domains being owned. Fair value of the internet domains amounts to €120 thousand. The
multi-period excess earnings method considers the present value of net cash flows expected to be generated by the customer
contracts and relationships, by excluding any cash flows related to contributory assets. Fair value of the customer contracts
and relationships amounts to €250 thousand.
Goodwill arising from the acquisition has been recognised as follows:
Consideration transferred
Fair value of identifiable net assets
Goodwill
€ thousands
1,600
(371)
1,229
The goodwill recognised on acquisition relates to the fair value of the going concern element of the acquired entity existing
business, including plans to generate cash flows from the new clients and new business opportunities, probability of prolonging
customer contracts even further than considered in the valuation, assembled workforce and other items, which are not possible
to recognise as separate intangible assets.
Net cash flow on acquisition:
Consideration in cash
Less cash and cash equivalents of the acquiree
Net cash flow on acquisition
€ thousands
1,600
-
1,600
137
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FINANCIAL STATEMENTS
28. List of subsidiaries
Company Statement of Financial Position
Company name
Registered office
Registration
Number
Activity
Share in
capital
Held
directly?
As at 30 April 2023
13415193
Acquiring
participations
100%
Yes
Notes
2023
(€ thousands)
2022
(€ thousands)
BCG HOLDCO Limited
ANTLER Management SA
ANTLER TopCo Sàrl
ANTLER PiKCo Sàrl
ANTLER MidCo Sàrl
ANTLER HoldCo Sàrl
UAB Antler Group
UAB Diginet LTU
OÜ AllePal
OÜ Kinnisvaraportaal
Highdown House,
Yeoman Way, Worthing,
West Sussex, United
Kingdom, BN99 3HH
1-3 Boulevard de la Foire,
Luxembourg
1-3 Boulevard de la Foire,
Luxembourg
1-3 Boulevard de la Foire,
Luxembourg
1-3 Boulevard de la Foire,
Luxembourg
1-3 Boulevard de la Foire,
Luxembourg
V. Nagevičiaus 3, Vilnius,
Lithuania
Saltoniškių 9B-1, Vilnius,
Lithuania
Pärnu mnt. 141, Tallinn,
Estonia
Pärnu mnt. 141, Tallinn,
Estonia
B235771
B235647
B235730
B235872
B234342
Liquidated on 21
April 2022
Liquidated on 21
April 2022
Liquidated on 31
March 2022
Liquidated on 10
March 2022
Liquidated on 24
February 2022
-
-
-
-
-
305147427
Management and
consulting services
100%
126222639
Online classifieds
100%
12209337
Online classifieds
100%
10680295
Online classifieds
100%
OÜ VIN Solutions
Turu 2, Tartu, Estonia
14071883
Information
services
100%
OÜ Baltic Classifieds
Group
Pärnu mnt. 141, Tallinn,
Estonia
SIA City24
Gustava Zemgala 78 - 1,
Rīga, Latvia
14608656
Online classifieds
100%
40003692375
Online classifieds
100%
BCG HOLDCO Limited is exempt from the requirement to file audited accounts for the year ended 30 April 2023 by virtue of
section 479A of the Companies Act 2006.
29. Subsequent events
A voluntary repayment of debt of €7,000 thousand was made on 2 June 2023 reducing the outstanding principal amount of bank
borrowings to €63,000 thousand.
-
-
-
-
-
No
No
No
No
No
No
No
Fixed assets
Investments
Current assets
Debtors: amounts falling due within one year
Cash at bank or in hand
Creditors: amounts falling due within one year
Amounts due to subsidiary undertakings
Other creditors
Net current assets
Total assets less current liabilities
Capital and reserves
Called up share capital
Retained earnings
Capital redemption reserve
Own shares held
Profit and loss for the period
Total Capital and reserves
4
5
6
7
7
10
11
509,631
508,064
98,854
103
(6,189)
(336)
92,432
113,181
1,979
(4,988)
(842)
109,330
602,063
617,394
5,783
599,863
39
(6,252)
2,630
5,822
620,707
-
(3,418)
(5,717)
602,063
617,394
The accompanying notes form part of these financial statements.
The financial statements of Baltic Classifieds Group PLC, company number 13357598, were approved and authorized for issue
by the board and were signed on its behalf on 28 June 2023.
Justinas Šimkus
Director
Baltic Classifieds Group PLC
Registered number 13357598
138
139
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Company Statement of Changes in Equity
Notes to the Company financial statements
Called up
share capital
(€ thousands)
Share premium
(€ thousands)
Own
shares held
(€ thousands)
Capital
redemption
reserve
(€ thousands)
Retained
earnings
(€ thousands)
Total
equity
(€ thousands)
Balance
at 26 April 2021
Profit / (loss) for the
period
Other comprehensive
income
Total comprehensive
income
Transactions with
owners:
Group restructure
and IPO
Transfer arising from
capital reduction
Share issue post IPO
Share-based
payments
Acquisition of
treasury shares
Balance
at 30 April 2022
Profit / (loss) for the
period
Other comprehensive
income
Total comprehensive
income
Transactions with
owners:
Share-based
payments
Acquisition of
treasury shares
Purchase of shares
for cancellation
Dividends paid
Balance
at 30 April 2023
-
-
-
-
-
-
-
-
581,774
43,143
(575,956)
(43,143)
4
-
-
5,822
-
-
-
-
-
-
(39)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,418)
(3,418)
-
-
-
-
-
(2,834)
-
-
5,783
-
(6,252)
For the period from 1 May 2022 to 30 April 2023
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,717)
(5,717)
-
-
(5,717)
(5,717)
-
624,917
619,099
(4)
-
-
1,612
1,612
-
(3,418)
614,990
617,394
2,630
2,630
-
-
2,630
2,630
-
-
1,567
1,567
-
(2,834)
39
-
39
(5,775)
(5,775)
(10,918)
(10,918)
602,493
602,063
The accompanying notes form part of these financial statements.
1. Accounting policies
Baltic Classifieds Group PLC ("the Company") is a public company limited by shares, incorporated in England, United Kingdom on
the 26th of April 2021 with registration number 13357598 and listed on the London Stock Exchange. The Company is registered
and domiciled in the UK. Principal place of the business is Highdown House, Yeoman Way, Worthing, West Sussex, United
Kingdom, BN99 3HH.
Statement of compliance and basis of preparation
These financial statements of Baltic Classifieds Group PLC were prepared in accordance with the Financial Reporting Standard
102 The Financial Reporting Standard applicable in the UK and the Republic of Ireland ("FRS 102") and the Companies Act 2006.
The Company financial statements have been prepared under the historical cost convention, as modified for the revaluation of
certain financial assets and liabilities through profit or loss. The current year financial information presented is from 1 May 2022
to 30 April 2023.
The Company uses the Euro (EUR) as functional currency and presentation currency. Foreign currency transactions are
translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at month-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognized in the profit or loss for the period. Non-
monetary items measured at fair value are measured using the exchange rate when fair value was determined. The Company
financial statements have been rounded to the nearest thousand except where otherwise indicated.
As permitted by Section 408 of the Companies Act 2006, an entity profit and loss account is not included as part of the published
consolidated financial statements Baltic Classifieds Group PLC. The profit for the financial period dealt with in the financial
statements of the parent company was €2,630 thousand (2022: loss €5,717 thousand).
The consolidated financial statements of Baltic Classifieds Group PLC are prepared in accordance with the UK adopted
International Financial Reporting Standards and are available to the public. In these financial statements, the Company
is considered to be a qualifying entity and has applied the exemptions available under FRS 102 in respect of the following
disclosures:
• statement of comprehensive income with related notes;
• cash flow statement with related notes; and
• key management personnel compensation.
Going concern
The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the
following reasons.
The Directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements
which indicate that, taking account of reasonably possible Company will have sufficient funds to meet its liabilities as they fall
due for that period.
In making this assessment the Directors have considered the fact that the Company’s activities are principally as a holding
company with long-term investments in subsidiaries funded by equity. The Company’s assets consist of investments in
subsidiary undertakings, and intercompany loan receivable balances.
Consequently, the Directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they
fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial
statements on a going concern basis.
Significant accounting judgements and key sources of estimation uncertainty
In preparing the financial statements, management is required to make estimates and assumptions that affect the application
of policies and reported income, expenses, assets, and liabilities. Estimates and judgements are continually reviewed and are
based on historical experience and other factors, including expectations of future events that are believed to be reasonable under
the current circumstances. Actual results may differ from the initial estimate or judgement and any subsequent changes are
accounted for with and effect on the financial statements at the time such updated information becomes available. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period
in which the estimates are revised or in any future periods affected. There are no significant judgements or key sources of
estimation uncertainty for the Company.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these
financial statements.
140
141
Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the Company financial statements continued
1. Accounting policies continued
Notes to the Company financial statements continued
1. Accounting policies continued
FINANCIAL STATEMENTS
Share-based payment transactions
Dividend distribution
Equity-settled awards are valued at the grant date. Fair value of the awards are measured using Black-Scholes pricing model. In
the consolidated financial statements, on the assumption that the arrangement is equity-settled, the transaction is treated as
an equity-settled share-based payment, as the group has received services in consideration for the group’s equity instruments.
An expense is recognised in the group income statement for the grant date fair value of the share-based payment over the
vesting period, with a credit recognised in equity. In the parent Company’s separate financial statements, there is no share-based
payment charge, as no employees are providing services to the parent. The parent would therefore record a debit, recognising an
increase in the investment in the subsidiaries as a capital contribution from the parent and a credit to equity. In the subsidiaries’
financial statements, the award is treated as an equity-settled share-based payment. An expense for the grant date fair value
of the award is recognised over the vesting period, with a credit recognised in equity. The credit to equity is treated as a capital
contribution, as the parent is compensating the subsidiaries’ employees with no cost to the subsidiaries.
Investment in subsidiaries
These are separate financial statements of the Company. The cost method is applied to investments in other companies. The
cost price increases when funds are added through capital increase or when group contributions are made to subsidiaries.
Cash and cash equivalents
Cash includes cash at banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value.
Taxation
The Company's profit for the period arises mostly from the receipt of BCG Holdco Limited intercompany loan interest income.
Any interest income received by the company is taxable as a loan relationship. However, the corresponding expense on BCG
Holdco Limited should be deductible for tax purposes. Group relief allows losses to be surrendered from loss-making companies
to profitable companies in the same group. Given BCG Holdco Limited and Baltic Classifieds Group PLC are in the same group
for group relief purposes and BCG Holdco Limited would be able to surrender its losses to Baltic Classifieds Group PLC, there is
no net tax payable as a result of the loan. In addition, Baltic Classifieds Group PLC provides taxable supplies for management
service to UAB Antler Group based on management agreement, however incurred administration costs cover revenue and as a
result, no provision for Corporation tax is needed in these financial statements.
Own shares held by ESOP trust
Transactions of the Company-sponsored ESOP trust are treated as being those of the Company and are therefore reflected in the
Company financial statements. In particular, the trust’s purchases and sales of shares in the Company are debited and credited
directly to equity.
Capital redemption reserve
The capital redemption reserve arises from the purchase and subsequent cancellation of the Group’s own equity share capital.
Financial instruments
The Company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.
a) Financial assets
Basic financial assets, including trade and other receivables, cash and bank balances, loans to Group companies are initially
recognized at transaction price (unless the arrangement constitutes a financing transaction) and are subsequently carried at
amortized cost using the effective interest method.
b) Financial liabilities
Basic financial liabilities, including trade and other payables that are classified as debt, are initially recognized at transaction
price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value
of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortized cost, using
the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade payables are recognized initially at transaction price and subsequently measured at amortized
cost using the effective interest method.
Dividend distribution to the Company’s shareholders is recognized as a liability in the Group’s financial statements in the period
in which the dividend is approved by the Company’s shareholders in the case of final dividends, or the date at which they are
paid in the case of interim dividends.
2. Services provided by the Company’s auditor
Fees payable for audit services:
Audit of the Company and consolidated financial
statements
Fees payable for other services:
• Audit related assurance services
• Transaction related services
• Other assurance services
Total
2023 (€ thousands)
2022 (€ thousands)
(563)
-
-
-
(563)
(244)
(104)
(532)
(267)
(1,147)
Current year fees payables for audit of the Company and consolidated financial statements consist of audit fees for current
financial year €461 thousand and previous financial year €102 thousand. Transaction related and other assurance services
provided by the Company’s auditors during the year ended 30 April 2022 relate to the IPO. Refer to Audit Committee Report on
page 76 in consolidated financial statements for further detail.
3. Directors’ remuneration
The Company has no employees other than the Directors. Full details of the Directors’ remuneration and interests are set out
in the Directors’ remuneration report on pages 82 to 90 and Employee numbers and costs Note 9 and Remuneration of key
management personnel and other payments Note 24 to the consolidated financial statements.
4. Investment in subsidiaries
Investment in subsidiaries at 30 April 2022
Share-based payments
Investment in subsidiaries at 30 April 2023
(€ thousands)
508,064
1,567
509,631
Additions to share-based payments in the year and prior year relate to equity-settled share-based payments granted to the
employees of subsidiary companies. Subsidiary undertakings are disclosed within Note 25 to the consolidated financial
statements.
On 3 June 2021 BCG Group undertook a group reorganisation whereby the Company in exchange for the allotment of ordinary
shares acquired ANTLER Management S.A 38,740,076 ordinary shares at £1 (€1.16) and Antler TopCo 396,525,002 ordinary
shares at £1 (€1.16). Therefore, the Company incorporated on 26 April 2021, became the ultimate parent of the trading group
immediately controlled by Antler Group UAB. Subsequently, BCG Holdco Limited acquired Antler TopCo from the Company and
ANTLER Management S.A in exchange for shares in BCG Holdco Limited. Closing balance of the Investment in subsidiaries at
30 April 2022 consists of €506,452 thousand investment in BCG Holdco Limited and share-based payments in amount to €1,612
thousand.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the Company financial statements continued
Notes to the Company financial statements continued
FINANCIAL STATEMENTS
5. Debtors: amounts falling due within one year
8. Financial instruments
Intercompany loan to BCG HoldCo Limited
Amounts owed by subsidiary undertakings
Other short-term receivables
2023 (€ thousands)
2022 (€ thousands)
98,733
-
121
98,854
112,915
180
86
113,181
Terms, repayment of intercompany loan
The loan was used to finance the repayment of the indebtedness of ANTLER HoldCo S.a.r.l. and its subsidiaries. The loan is
repayable immediately on demand by the lender. The borrower may prepay or repay any or all of the Loan at any time and bear
interest at rate of 2.5% plus 1 month EURIBOR (2022: 6 months EURIBOR) The loan is not expected to be paid within 1 year in
the course of the normal operating cycle.
6. Cash and cash equivalents
Cash at bank
2023 (€ thousands)
2022 (€ thousands)
103
103
1,979
1,979
There were no restrictions on cash and cash equivalents held at 30 April 2023 and 2022.
7. Creditors: amounts falling due within one year
Trade creditors
Taxation and social security
Share buybacks liability
Accruals
2023 (€ thousands)
2022 (€ thousands)
(11)
(6)
-
(590)
(113)
-
(212)
(246)
Intercompany loan from Antler Group UAB
(6,189)
-
Subsidiary undertakings
-
(4,988)
(6,525)
(5,830)
The loan is repayable immediately on demand by the lender, Antler Group UAB. The borrower may prepay or repay any or all of
the loan at any time and bear interest at a rate of 2.5% plus 1 month EURIBOR. The loan is not expected to be paid within 1 year
in the course of a normal operating cycle.
Financial instruments utilized by the Company during the year ended 30 April 2023 may be analyzed as follows:
Financial assets measured at amortised cost
Financial assets specified and detailed disclosed in Notes 5 and 6.
Financial liabilities measured at amortised cost
Financial liabilities specified and detailed disclosed in Note 7.
Current assets and liabilities
2023 (€ thousands)
2022 (€ thousands)
98,957
98,957
115,160
115,160
2023 (€ thousands)
2022 (€ thousands)
(6,525)
(6,525)
(5,830)
(5,830)
Financial instruments included within current assets and liabilities (excluding cash and borrowings) are generally short term in
nature and accordingly their fair values approximate to their book values.
9. Financial risk management
In its activities, the Company is exposed to various financial risks: market risk (including interest rate risk), credit risk and
liquidity risk. The Board of Directors is responsible for creation and control of overall risk management policy in the Company.
Credit risk is the current or prospective risk to earnings and capital arising from a debtor’s BCG Holdco Limited failure to meet
the terms of intercompany loan with the Company or if a debtor otherwise fails to perform.
The credit risk on cash in banks is limited because the counterparties are banks with high credit-ratings assigned by international
credit-rating agencies. Cash in banks is the only financial asset exposed to credit risk. Barclays Bank UK PLC had a credit rating
of Fitch A+, Moody's A1 as at 30 April 2023.
The Company can take on exposure to market risk, which means the risk for the Company to incur losses due to the adverse
fluctuations in the market parameters such as interest rates (interest rate risk) and currency exchange rates (foreign currency
risk).
Interest rate risk is the risk of experiencing losses because of unfavorable changes of interest rate. A company granting a loan
with a fixed interest will experience supposed losses (i.e., will get less income than it could get), if the interest rate on the market
is going up, and the company which has taken a loan will experience the supposed losses, if the interest rate goes down. In case
a floating interest rate is established in the contract, market fluctuations will have an impact on the financial income/expenses
earned/incurred by the parties involved. Since a floating interest rate is applied to the loan granted by The Company to BCG
Holdco Limited, The Company and BCG Holdco Limited bear the interest rate risk. Also a floating interest rate is applied to the
loan granted to the Company by Antler group UAB, The Company and Antler group UAB bear the interest rate risk.
Foreign currency exchange risk is associated with potential profit variability, which may be caused by fluctuations of foreign
currencies exchange rates. EUR is the functional currency of the Company. The Company is exposed to currency risk on sales,
purchases and borrowings that are denominated in a currency other than EUR. As at 30 April 2023 the Company has 105
thousand liabilities and 4 thousand cash at bank account in GBP currency. As at 30 April 2022, the Company has no significant
monetary assets and liabilities denominated in currencies other than EUR except for €297 thousand cash held in GBP and one-
off payable VAT €589 thousand regarding IPO transaction costs of non-recoverable VAT part.
Liquidity risk is understood as incapability to fulfil undertaken obligations in due time without experiencing unacceptable losses.
Bearing in mind that the Company, BCG Holdco Limited and Antler group UAB are related parties, the Company assumes liquidity
risk to the limited extent.
144
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 FINANCIAL STATEMENTS
Notes to the Company financial statements continued
Notes to the Company financial statements continued
FINANCIAL STATEMENTS
10. Share capital and share premium
Number of shares
Share capital
(€ thousands)
Capital
redemption reserve
(€ thousands)
As at 30 April 2022
500,392,405
5,822
Purchase and cancellation of own shares
(3,429,240)
(39)
As at 30 April 2023
496,963,165
5,783
-
39
39
In October 2022 the Company initiated its share buyback program. As at 30 April 2023 the Company purchased 3,429,240
(2022: nil) ordinary shares with a par value of £ 0.01 for cancellation. For this reason, a capital redemption reserve was formed
in amount of €39 thousand.
Fully paid ordinary shares, which have a par value of £0.01, carry one vote per share and carry a right to dividends.
Baltic Classifieds Group PLC was incorporated on 26 April 2021 with 1 ordinary share with a value of £1 (€1.15) per share
allotted. On 27 April 2021 the company issued 1 redeemable preference share with a value of £49,999 (€57,487) per share.
On 5 July 2021 BCG was inserted into the Group’s holding structure via a share for share exchange with the shareholders of a
previous top holding entity, ANTLER TopCo S.a.r.l:
1) BCG issued 38,740,076 ordinary shares at £1 (€1.16) each in the share for share exchange to acquire ANTLER Management
S.A. that was a minority shareholder of ANTLER TopCo S.a.r.l.
2) BCG issued 396,525,002 ordinary shares at £1 (€1.16) each in the share for share exchange to acquire the rest of ANTLER
TopCo S.a.r.l..
3) 1 redeemable preference share with a value of £49,999 (€57,487) per share was redeemed.
On 5 July 2021 BCG issued 64,734,921 ordinary shares with a value of £1 (€1.16) each that were listed at £1.65 (€1.92) on the
London Stock Exchange.
Share issue related expenses amounting to €5,820 thousand were set against the share premium that arose during the listing.
On 23 September 2021 BCG undertook a Court approved capital reduction to create distributable reserves. The entire amount
standing to the credit of BCG share premium account was cancelled and the nominal value of each ordinary share in issue in
the capital of BCG was reduced from £1 (€1.15) to £0.01 (€0.012). This created a total of €619,100 thousand in distributable
reserves.
On 19 October 2021 BCG issued 392,405 shares with a value of £0.01 (€0.012) each to be gifted, on an unrestricted basis, to all
subsidiaries’ employees other than the executive directors and senior management team.
11. Own shares held
Balance as at 1 May 2021
Purchase of shares for performance share plan
Balance as at 30 April 2022
Balance as at 1 May 2022
Purchase of shares for performance share plan
Balance as at 30 April 2023
Shares held by EBT
Amount (€ thousands)
Number
(3,418)
(3,418)
(3,418)
(2,834)
(6,252)
2,100,000
2,100,000
2,100,000
1,500,000
3,600,000
Shares were purchased on 25 March 2022 at a price of £1.346 (€1.616) per share. Stamp duty reserve tax and broker commissions
amounting to 24€ thousand were capitalized to the cost.
Shares were purchased on 29 July 2022 and 2 August 2022 at a price of £1.54 (€1.842) and £1.619 (€1.943) per share respectively.
Stamp duty reserve tax and broker commission amounting to €18 thousand were capitalized to the cost.
12. Dividends
Dividends declared and paid by the Company were as follows:
Year ended 30 April 2023
Year ended 30 April 2022
€ cents per share
(€ thousands)
€ cents per share
(€ thousands)
2022 final dividend paid
2023 interim dividend paid
1.4
0.8
6,955
3,963
10,918
-
-
-
-
-
The proposed final dividend for the year ended 30 April 2023 of 1.7 € cents per share, totaling approximately €8,400 thousand,
is subject to approval by Shareholders at the Annual General Meeting (“AGM”) and hence has not been included as a liability in
the financial statements. Dividends will be paid in euros however Shareholders will have an opportunity to opt for a payment in
British pounds.
The 2022 final dividend of €6,955 thousand (1.4 € cents per qualifying share) was paid on 14 October 2022.
After the HY2022-2023 end the Board approved an interim dividend of €0.8 cents per share, totaling €3,963 thousand (31 October
2021: nil). The interim dividend has been paid out on 25 January 2023 to shareholders on the register at the close of business
on 16 December 2022.
The terms of the EBT provide that dividends payable on the ordinary shares held by the EBT are waived.
Dividends are paid out of the available distributable reserves of the company.
13. Related party transactions
During the year, a management charge of €474 thousand (2022: €274.7 thousand) was provided to UAB Antler group in respect
of services rendered. At the year end, balances outstanding with other Group undertakings were €98,733 thousand (2022:
€113,095 thousand) for debtors as set out in note 5 and €6,189 thousand (2022: €4,988 thousand) for creditors as set out in note
7. Related party transactions for remuneration of key management personnel are disclosed within Note 24 to the consolidated
financial statements.
14. Ultimate parent company and parent company of larger group
The Company is a parent and the ultimate controlling party. The largest group in which the results of the Company are consolidated
is that headed by Baltic Classifieds Group PLC with registered office in Highdown House, Yeoman Way, Worthing, West Sussex,
United Kingdom, BN99 3HH. No other group financial statements include the results of the Company. The consolidated financial
statements of Baltic Classifieds Group are available to the public and may be obtained from www.balticclassifieds.com.
Subsidiary BCG Holdco Limited is exempt from the Companies Act 2006 requirements relating to the audit of its individual
accounts by virtue of Section 479A of the Act as Baltic Classifieds Group PLC has guaranteed the subsidiary company under
Section 479C of the Act.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023Baltic Classifieds Group PLC Annual Report and Accounts 2023 ADDITIONAL INFORMATION
149 Glossary
150 Shareholder Information
Additional Information
Glossary
2021 – means the financial year ended 30
April 2021.
2022 – means the financial year ended 30
April 2022.
2023 – means the financial year ended 30
April 2023.
AGM – means Annual General Meeting.
Apax – means funds advised by Apax
Partners
ARPU – means average revenue per user.
Admission – means the admission of the
ordinary shares of the Company to the
premium listing segment of the Official
List and to trading on the London Stock
Exchange’s main market for listed securities
which occurred on 5 July 2021.
B2C listers – means listers that have a
subscription-based contract with the Group
for online classifieds services and products.
C2C listers – means listers that transact
with the Group through one-off transactions
for online classifieds services and products
and do not have a subscription-based
contract with the Group for online classifieds
services and products.
CEO – means chief executive officer.
CFO – means chief financial officer.
Code – means the UK Corporate Governance
Code published by the FRC in 2018.
COO – means chief operating officer.
Deloitte – means Deloitte LLP or Deloitte
Lietuva, UAB both being members of the
Deloitte organisation, a global network of
independent firms.
Executive Directors – means Justinas
Šimkus, Lina Mačienė and Simonas Orkinas.
Generalist portals - means portals with
no specialisation, listing a wide range of
products and services to consumers.
KPI – Key performance indicator.
KPMG – means KPMG LLP, a UK limited
liability partnership and a member firm of the
KPMG global organisation of independent
member firms.
Listers – means C2C and B2C listers.
Listing – means an ad posted on a portal.
Management Incentive Programme (MIP) –
means an equity incentive plan designed to
reward and incentivise eligible employees.
Major Shareholder – means ANTLER
EquityCo S.à r.l., an entity controlled by funds
advised by Apax Partners.
Marketplace – means a place where
products and/or services are bought and
sold.
Performance Share Plan – means the long-
term incentive arrangement for the Executive
Directors and other eligible employees.
Portals – means online classifieds websites.
Prospectus – means the Company’s
prospectus dated June 2021 and prepared in
connection with the Company’s Admission.
Relationship Agreement – means an
agreement governing the relationship
between the Company and the Major
Shareholder.
Senior Management – means the Executive
Directors and all portal managers.
Verticals – means specialised portals, listing
products and services of a specific market,
such as automotive, real estate and jobs and
services.
Shareholder Information
Share capital
The Company’s authorised and issued Ordinary Share capital as at 30 April 2023 comprised a single class of Ordinary Shares. As
at 30 April 2023 there were 496,963,165 Ordinary Shares of £0.01 each in issue (net of shares pending cancellation).
As at 27 June 2023, being the last practicable date prior to publication of this report, the Company’s issued share capital (net of
shares pending cancellation) comprised 496,045,965 fully paid Ordinary Shares of £0.01 each.
Details of the Ordinary Share capital and shares issued during the year can be found in note 17 to the consolidated financial
statements.
AGM
The AGM will be held at Saltoniškių st. 9B, LT-08105 Vilnius, Lithuania on 27 September 2023 at 11.00 am local time. Further
details can be found in the Notice of Meeting sent to Shareholders, which is also available at www.balticclassifieds.com.
Shareholder queries
Please contact our Registrar, Equiniti Limited, directly for all enquiries about your shareholding:
Online:
By post:
https://help.shareview.co.uk
Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA
By telephone:
0371 384 2030
International callers:
+44 (0)371 384 2030
Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Lines are open 8.30 am to 5.30 pm, Monday to Friday excluding public holidays in England and Wales.
Electronic Shareholder communication
We encourage our Shareholders to opt for electronic communications as opposed to hardcopy documents by post. This has a
number of advantages for the Company and its Shareholders. Increased use of electronic communications will deliver savings
to the Company in terms of administration, printing and postage costs, as well as increasing the speed of communication and
provision of information in a convenient form. Less paper also reduces our impact on the environment.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023 Additional Information
Shareholder Information continued
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If you would like to receive notifications by email, you can register your email address by the Share Portal https://help.shareview.
co.uk or by writing to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA. Please note that if you
hold your shares corporately or in a CREST account, you are not able to use the Share Portal to inform us of your preferred
method of communication and should instead write to Equiniti Limited.
Warning about share fraud
Shareholders should be aware that they may be targeted by certain organisations offering unsolicited investment advice or
the opportunity to buy or sell worthless or non-existent shares. Should you receive any unsolicited calls or documents to this
effect, you are advised not to give out any personal details or to hand over any money without ensuring that the organisation is
authorised by the United Kingdom Financial Conduct Authority (“FCA”) and doing further research.
If you are unsure or think you may have been targeted you should report the organisation to the FCA. For further information,
please visit the FCA’s website at www.fca.org.uk/scamsmart/share-bond-boiler-room-scams, email consumer.queries@fca.org.
uk or call the FCA consumer helpline on 0800 111 6768 if calling from the United Kingdom or +44 20 7066 1000 if calling from
outside the United Kingdom.
Share price information
The Company’s Ordinary Shares are listed on the London Stock Exchange. The price of the Company’s shares is available on the
Corporate Website at www.balticclassifieds.com.
Financial calendar1
29 June 2023
Dividend announcement date
8 September 2023
Dividend record date
27 September 2023
Annual General Meeting
13 October 2023
Dividend payment date
December 20231
Half-year results announcement
Company Information
Registered office:
Highdown House, Yeoman Way, Worthing, West Sussex, United Kingdom, BN99 3HH
Company number:
13357598
Company Secretary: Miglė Pranaitytė to 17 February 2023
Egle Sadauskiene from 17 February 2023
Independent Auditor:
KPMG LLP
Forward-looking Statements
Certain Statements made in this Annual Report are Forward-looking Statements. Such Statements are based on current
expectations, forecasts and assumptions and are subject to a number of risks and uncertainties that could cause actual events or
results to differ materially from any expected future events or results expressed or implied in these Forward-looking Statements.
They appear in a number of places throughout this Annual Report and include Statements regarding the intentions, beliefs or
current expectations of the Directors concerning, amongst other things, the Group’s results of operations, financial condition,
liquidity, prospects, growth, objectives, strategies and the business. Nothing in this Annual Report should be construed as a
profit forecast. All Forward-looking Statements in this Annual Report are made by the Directors in good faith based on the
information and knowledge available to them as at the time of their approval of this Annual Report. Persons receiving this report
should not place undue reliance on Forward-looking Statements. Unless otherwise required by applicable law, regulation or
accounting standard, the Group does not undertake any obligation to update or revise publicly any Forward-looking Statements,
whether as a result of new information, future events, future developments or otherwise.
All Intellectual Property Rights in the content and materials in this Annual Report vests in and are owned absolutely by Baltic
Classifieds Group PLC unless otherwise indicated, including in respect of or in connection with but not limited to all trademarks
and the Report’s design, text, graphics, its selection and arrangement.
1 Dates are provisional and may be subject to change.
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Baltic Classifieds Group PLC Annual Report and Accounts 2023
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152
Baltic Classifieds Group PLC Annual Report and Accounts 2023
This document is printed
on sustainably sourced paper
Head office
Saltoniškių st. 9b,
LT-08105 Vilnius,
Lithuania
+ 370 5 207 5061
Registered in England and Wales.
Registered office address:
Highdown House, Yeoman Way,
Worthing, West Sussex,
United Kingdom,
BN99 3HH.
balticclassifieds.com
Company number: 13357598