BEYOND THE UK
WHAT BONHILL REPRESENTS
EXPANDING
REDEFINING
ACQUIRING
DEVELOPING
RELYING
OUR FRANCHISES SUCCESSFULLY
WELL ESTABLISHED BUSINESSES
ON OUR PEOPLE
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Annual Report &
Financial Statements
2019
BONHILL GROUP PLC
COMMUNITIES
Bonhill Group plc is a leading B2B
media company providing Business
Insight, Events and Data & Analytics
propositions to international
Technology, Financial Services and
Diversity Business Communities.
The Company is passionate about
understanding its business communities’
needs, the result of which enables it to
create innovative, tailored, market-leading
products and services. Our aim is to deliver
an informed, authoritative voice and always
to exceed clients’ expectations.
We champion diversity and work
collaboratively, within our organisation
and across our communities, to build
long-term partnerships and networks
to represent and reflect our values.
We create exceptional value for our
communities, offer attractive rewards
for our employees and long-term,
market outperforming returns for
our shareholders.
We continually strive for excellence in
everything we do. We are entrepreneurial,
creative and thrive on generating new
innovative solutions. We set ourselves
the highest standards and are dedicated
to delivering the best possible results for
all our stakeholders.
We maximise the potential of our
employees. We aim to provide the support
necessary for each person to maximise
their potential and play their part in
an inspiring, community-centric and
responsible environment, underpinned
by a culture of respect, openness and
fairness to all. A place that is enjoyable
to work in and that celebrates success.
Neil Sachdev,
Non-executive Chairman
1 May 2020
FINANCIAL
SERVICES
Page 08
Financial Services
is a significant focus
for Bonhill. We serve
the global financial
community through a
range of brands including
InvestmentNews in the US
and Last Word Media's
portfolio of titles in the
UK, Europe and Asia.
DIVERSITY
Page 14
TECHNOLOGY
InvestmentNews
Last Word Media
What Investment
Growth Company
Investor
Small Business
Growth Business
Over the last four years,
we have developed
a portfolio of highly
successful digital sites
and live events for our
diversity community
including DiversityQ and
the Women in IT series.
DiversityQ
Women in IT Awards
Women in IT Awards USA
Future Stars of Tech
Women in Finance Awards
We serve the constantly
evolving global
technology market
with a combination
of digital and events.
Our proposition also
overlaps the importance
of technology within
Finance and is the
vanguard for change
in gender diversity.
Information Age
Tech Leaders Summit
Tech Leaders Awards
Data Leadership Summit
Data Leaders Awards
01
Bonhill Group plc
Strategic Report
Welcome
At a glance
Chairman’s statement
Business model and strategy
Our communities
Financial Services
Diversity
Chief Executive’s review
Group Finance Director’s review
Our stakeholders
Our responsible business
Principal risks and uncertainties
Governance
Board of Directors
Corporate Governance statement
Audit Committee report
Nomination Committee report
Remuneration Committee report
Directors’ report
Directors’ responsibilities in the
preparation of financial statements
Financial Statements
Independent auditor’s report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Company statement of financial position
Consolidated statement of changes in equity
Company statement of changes in equity
Consolidated statement of cash flows
Company statement of cash flows
Notes to the cash flow
Notes to the financial statements
Directors and advisers
<
02
04
06
08
14
18
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28
30
34
36
40
42
44
46
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48
53
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56
57
58
59
60
61
91
OUR OFFERING
EVENTS
DATA & ANALYTICS
BUSINESS INSIGHT
2019 Annual Report & Financial StatementsStrategic ReportGovernanceFinancial Statements
02
Bonhill Group plc
Bonhill at a glance
EXPANDING AND GROWING
INTERNATIONALLY
NORWAY
FINLAND
SWEDEN
ICELAND
LONDON
FRANCE
DENMARK
NETHERLANDS
BELGIUM
GERMANY
LUXEMBOURG
AUSTRIA
SWITZERLAND
MONACO
ANDORRA
PORTUGAL
SPAIN
ITALY
UAE
HONG KONG
HONG KONG
THAILAND
PHILIPPINES
MALAYSIA
SINGAPORE
CHICAGO
WASHINGTON
NEW YORK
CHICAGO
NEW YORK
WASHINGTON DC
Global presence
Events, Data & Analytics, Business Insight
Data & Analytics, Business Insight
Events, Business Insight
Offices
Countries
Global reach
Strategically we have
targeted fast growing
international markets.
The Group now operates
in five global locations and
has run 110 events in
28 international cities
during 2019.
We will continue to
develop our global reach
with our established
portfolio of brands.
Global locations
5
28
110
International cities
Events during the year
SOUTH AFRICA
Complementary acquisitions
How the acquisition of Last Word Media
complements InvestmentNews.
AMERICA
ASIA
UK
EUROPE
MIDDLE EAST
SOUTHERN AFRICA
Read more on page 10
2019 Annual Report & Financial Statements NORWAY
FINLAND
SWEDEN
ICELAND
DENMARK
LONDON
FRANCE
NETHERLANDS
GERMANY
BELGIUM
LUXEMBOURG
AUSTRIA
SWITZERLAND
MONACO
ANDORRA
PORTUGAL
SPAIN
ITALY
CHICAGO
WASHINGTON
NEW YORK
CHICAGO
NEW YORK
WASHINGTON DC
UAE
HONG KONG
HONG KONG
THAILAND
PHILIPPINES
MALAYSIA
SINGAPORE
SOUTH AFRICA
Our core proposition
The Company aims to support its chosen business
communities through the provision of three interrelated
and complementary core propositions.
C o mmunities
h t
ss Insig
e
in
s
u
B
E
v
e
n
t
s
C
o
m
m
u
n
iti
e
s
D
ata & An a l y ti c
s
s
nitie
mu
C o m
03
Bonhill Group plc
The future of Bonhill
During 2019, we have executed on the Board’s strategy by starting
to change the business and geographic mix. As the business develops
in the year ahead, we will see the mix change such that Events and
Data & Analytics will become a more significant part of our business.
Business shift
In 2019, the revenue
split was:
Over the course of the next two
years it is our intention to shift the
split to:
4
1
1
4
3
2
2
2019
40%
31%
24%
5%
2022
44%
37%
13%
6%
3
1. Events
2. Digital
3. Print
4. Data
Geographical shift
Our geographic split of revenue has changed such that
in the period our revenue by geography was:
US
UK
EUROPE
ASIA
66% 24% 6% 4%
Read more on page 06
Read more on page 06
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements
04
Bonhill Group plc
Chairman’s statement
A NEW DIRECTION
FOR BONHILL
NEIL SACHDEV
CHAIRMAN
FINANCIAL
HIGHLIGHTS
The year to 31 December 2019 saw
the Group make good progress with a
combination of organic and acquisitive
growth as well as the negative impact
from some strong external factors.
These external factors have continued
into 2020 with the ongoing impact of
COVID-19 across all our businesses
which will be covered in more detail in
the report but all necessitated the £2.5
million equity raise in April 2020 which
was approved at a General Meeting on
30 April 2020.
The Group increased its revenue to
£24.4 million from £8.0 million and
adjusted profit to £2.3 million from
£0.9 million. 2019 includes Last Word
Media for 8½ months from point of
ownership, and the prior period was a
short 9 month period which included
InvestmentNews for 4½ months.
24.4£M
Revenue of £24.4 million
(9 months ended 31 December
2018: £8.0 million)
InvestmentNews contributed
£13.9 million of revenue, 6% down
on the record same period last
year with second half performance
recovered to same levels
2.3£M
Adjusted EBITDA* of £2.3 million
(9 months ended 31 December
2019: £0.9 million)
7.8£M
Acquisition of Last Word Media
for £7.8 million, together with
£10 million fundraising
29.8£M
Net assets of £29.8 million
(31 December 2018: £22.9 million)
1.9£M
Cash of £1.9m at 31 December
2019 (31 December 2018:
£4.4 million)
0.28p
Payment of a maiden interim
dividend of 0.28p per share with
no final dividend recommended
* Adjusted EBITDA excludes adjusting
items, acquisition costs and amortisation
of intangible assets through business
combinations
2019 Annual Report & Financial Statements 05
Bonhill Group plc
BEST IN CLASS SOLUTIONS
Technology
development and
enhancement has
been a core part of
this year. Since our
capital raising during
August 2018, we
have been working
to develop the
wider technological
capability of the
business.
The Company had set aside
£1.2 million to develop a new
Company wide ‘tech stack’
and is on target in respects
of both budget and timing.
The opportunity this investment
brings for new product
development and offering
a better client experience
is essential if the Group is
to reach the levels it aspires to.
Post-year end, we are now on
a common CRM platform
across the business and are
in a much stronger position to
deliver “best in class” solutions.
This platform has enabled
us to trial new products and
currently we have seven new
product trials running which
is a step change in our new
product development capability.
We saw continued growth of 17% in
the original UK Bonhill business with
new events launched in new territories
in our core Women in IT and Finance
franchises, whilst UK media continued
to see growth in our SME operations.
InvestmentNews in its first full year of
ownership by the Group saw a modest
decline in revenue as we invested in the
business, changed the management team
and began to transition the activities from print
to digital and events. We are pleased with the
progress we have made and continue to see
great potential in this market-leading brand.
April 2019 saw the completion of the acquisition
of Last Word Media, which in conjunction with
InvestmentNews gives us a global footprint and
a broad offering to our core financial adviser/
asset management community.
The second half of the year saw particular
challenges in Hong Kong, with the civil unrest
in the region impacting our Events business
and the well-documented issues in the UK fund
management industry, coupled with the lack of
fund flows in UK Active Equities, hampering our
events and digital custom work in the UK.
Although this period impacted our revenue
and profitability, we did take the opportunity
to both invest in the business with a much-
needed technology refresh across the Group to
harmonise our technology offering as well as to
combine the UK teams and streamline some of
our operations. These changes have resulted in
a much stronger technology platform and £1.5
million of annualised savings. In the main these
investments and the changes in the personnel
structure are reflected in the higher than normal
level of exceptional costs (£5 million) in the year.
The acquisition of Last Word Media provided a
key component for our strategy of increasing
recurring revenues, owning and developing
market-leading brands and developing our
international footprint.
Last Word Media is 15 years old in 2020
and has developed a range of brands serving
the asset management community in the
UK, Europe, Middle East, Africa and Asia.
It has a strong events portfolio as well as a
growing digital and custom content offering.
The combination of Last Word Media and
InvestmentNews is extremely exciting and
despite all of the challenges in the year we
have progressed the plans to launch
a number of the core UK brands into the
US market.
InvestmentNews has seen a pleasing shift
in business with strong growth in its events
portfolio and a manageable decline in sales in
its print title offset by a successful size change
and new distribution strategy.
2020 has already seen a rebrand of the
business and a relaunch of the core website.
The changes throughout 2019 put the
business on a strong footing with an enhanced
offering to its core client base. As part of our
COVID-19 plan we have moved the print title to
a digital version which has delivered good cost
savings and an extended trial of a digital format
going forward.
We have expanded our geographic reach
with the Last Word Media acquisition but
also in our events portfolio, where we have
taken Women in IT to Singapore, Berlin,
Bucharest and Toronto and Women in
Finance to Toronto. We also launched
Women in Asset Management in the US.
The core awards offering has been
supplemented by a successful day summit
enabling an in-depth look at the specific
industry challenges. Our wider international
diversity activities are now some 15% of
Group revenues.
We have continued to invest in our people
during a difficult year of change and we
appreciate the effort the team have put-in to
make the necessary changes to the business.
We have invested in our offering and the
improved technology will enable us to develop
both our digital offering and data and product
strategy. The wider Group offers a range of
career opportunities for our employees and
we continually strive to provide a dynamic
working environment. I would like to thank
all of our team for their hard work during the
recent period of change and challenging
conditions and for their positive and flexible
approach to remote working in the current
COVID-19 environment.
COVID-19 started to impact our Asian business
in early January and now is impacting all our
operations. Thankfully, the business was able
to transition to remote working without any
impact on our offering and we can successfully
deliver all of our campaigns. We have had to
make some redundancies in all parts of the
business and place around 10% of our UK
workforce on Furlough as well as utilise the
various government initiatives available. This
action plus the £2.5 million equity raise has put
us in a stronger financial position to face the
coming period and we continue to adjust the
business both in terms of offering and costs
to reflect the current environment.
At the year end, the Group had £1.9 million
of cash, a new technology platform a reduced
costs base and a fresh team in most brands.
I am excited about the opportunities ahead
of us notwithstanding the current environment
and it is our intention to continue to develop
our business, people and offering during
these challenging times.
Neil Sachdev
Non-executive Chairman
1 May 2020
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 06
Bonhill Group plc
Business model and strategy
CREATING LONG-TERM
REVENUE STREAMS
OUR STRATEGY REMAINS
TO TRANSITION OUR
BUSINESS MODEL TO
LONG-TERM, MUST
HAVE, RECURRING
REVENUE STREAMS
Our strategy
Our corporate strategy is to transition
to long-term, “must have”, recurring
revenue streams through building
market leading brands within its
chosen business communities of
Technology, Financial Services and
Diversity, developing high value
propositions, and expanding beyond
the UK and into large, or fast growing,
international territories.
Our business model
As detailed on the right, this strategy
is underpinned by:
01
Core offerings which are high value
Business Insight, Events and Data
& Analytics propositions.
02
Building market leading brands within
their chosen business communities
of Financial Services, Diversity and
Technology.
03
Expanding beyond the UK into large,
or fast growing, international territories.
2019 Annual Report & Financial Statements
07
Bonhill Group plc
BUSINESS MODEL
01
Our core offerings
Our brands support our
business communities through
the provision of three inter-
connected and complementary
core propositions.
02
03
Our market leading brands
Highly respected in the communities they
represent, these brands are the foundation
of our business and reflect our passion for
quality content across multiple platforms
including digital, live events, social media,
video and print.
Expanding
beyond the UK
Through our acquisitions the
breadth of our key audiences has
grown to not only cover the UK
but also extend globally to the US,
Europe, Middle East and Asia.
Read more about our global
presence on page 02
Read more about our expansion
through acquisitions on page 20
EVENTS
DATA & ANALYTICS
BUSINESS INSIGHT
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 08
Bonhill Group plc
Our communities
FINANCIAL
SERVICES
Financial Services has been a significant
sector focus for Bonhill since the Company’s
formation. Today, we serve the global
financial services community through a
range of brands including InvestmentNews
in the US and Last Word Media’s portfolio of
titles in the UK, Europe and Asia.
As well as the professional investor sector
in the UK, we focus on the UK’s 5.6 million
SMEs through Smallbusiness.co.uk and
Growthbusiness.co.uk, Growth Company
Investor and TaxGuide.co.uk; while the
UK private investor is served through
What Investment.
In 2019, the Group completed the acquisition of Last Word
Media, a leading international B2B media business which
addresses the content and marketing needs of the global
asset management industry and the information its wholesale
fund distribution partners such as wealth managers and fund
selectors utilise.
2019
Annual Report & Financial Statements
09
Bonhill Group plc
ACQUISITION OF
LAST WORD MEDIA
Since it launched in 2005, Last Word Media has been the final say for
first-to-market news, analysis and comment across the global wealth
management & fund selector markets. Invaluable insight is delivered to
our sophisticated audiences across multi-channel platforms including
print, digital, data, research and events.
We have expanded our position
in the global asset management/
financial advisory space by
acquiring Last Word Media in
April 2019. This well established
business, which operates in
all the key geographies that
InvestmentNews does not,
provides us with a global
platform to service the asset
management and financial
advisory industry.
We believe that our products
and services for the financial
advice industry and deep
knowledge of the global financial
advisers market provide us with
a unique understanding of the
core needs of the wider global
asset management community
and its suppliers.
As we integrate the business
and offer both businesses
product sets across our
expanded geographies,
we believe we will have a
compelling offering of global
data and analytics, high quality
content and a suite of valuable
industry events.
EXPANDING
GLOBALLY
LIVE
EVENTS
DEVELOPING OUR
CORE PROPOSITION
5
Operates in five key areas,
UK, Europe, Asia, Middle
East & South Africa
85
The brands collectively
hosted 85 scheduled
live events in 2019
7
Seven news and information
websites two of which have
associated print titles
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 10
Bonhill Group plc
Our communities continued
LAST WORD
MEDIA
South
Africa
Middle
East
Asia
Europe
24
Countries worldwide
Find out more on
www.lastwordmedia.com
UK
Print
Events
Digital
Research
Digital
Events
Digital
Events
Print
Events
Digital
Research
EXPERT INVESTOR
Expert Investor is aimed at an
exclusive group of fund selectors,
institutional investors and high net
worth advisers across continental
Europe, providing expert analysis
and insight.
FUND SELECTOR ASIA
Fund Selector Asia is aimed at
fund selectors, fund analysts, fund
influencers, wealth management
heads, investment councillors,
heads of sales and client-facing
wealth advisers across the
banking, insurance, fund of fund
and family office communities in
English-speaking Asia.
INTERNATIONAL ADVISER
International Adviser is the leading
brand for the global intermediary
market that uses cross-border
insurance, investment, banking
and pension products on behalf
of their high net-worth clients.
PORTFOLIO ADVISER
Portfolio Adviser is the leading
brand for wealth managers,
discretionary portfolio managers,
private bankers and advisers
specialising in investments across
the UK and Channel Islands.
2019 Annual Report & Financial Statements 11
Bonhill Group plc
Q. What is your US Strategy focused
A. To align our content around communities and
on in 2020?
core topics beyond News and offering premium
subscriptions to our content platform. By doing
so, we will create must-have content and
recurring revenue streams around that content.
Events will also continue to grow and expand
into new markets within financial services.
Q. What are some major milestones the
A. As I mentioned, we have a fantastic leadership
business has achieved since you’ve joined?
team in place, and are evolving every day. In
January, we underwent a tech migration and
unveiled a new look-and-feel, which will allow
us to garner data and insights from our users
that we never have before.
Q. How are you addressing the changes in
the adviser industry as a brand, including
an ageing adviser workforce, mergers
& acquisitions at an all-time high, and
technology disruption?
A. Technology for advisers is absolutely one of the
most important areas of impact for the industry
and for our brand. Other key trends are in ESG
investing along with diversity and inclusion.
InvestmentNews has a strong foundation in
all these core areas. We have the right content,
the audience and the relationships with key
companies so we can help provide solutions
to these areas of opportunities.
Q. What are some of the global opportunities
A. Bonhill’s portfolio lends itself to cross-
you have now that IN is part of Bonhill?
collaboration across regions. Last Word
Media, a leading publisher in the wealth
management space across the UK, EMEA
and APAC, and Bonhill’s suite of international
events complements InvestmentNews in the
US, and we are building strategy to leverage
each other in our respective regions. For
example, in Q2 2020, we will be introducing
ESG Clarity to the US market, which is already
part of Bonhill’s portfolio outside of the US.
This editorial-led site will continue to serve
fund selectors at scale who incorporate ESG
thinking into their workflow.
INVESTMENT
NEWS
2020 update
Development of the
InvestmentNews business will
be focused around developing
a broader range of offerings
away from the historical print
product. The weekly publication
will remain an integral part of the
business, but the investment
in technology, closure of the
Transitional Services Agreement
from Crain Communications
(during 2019), relaunch of the
InvestmentNews website (in
January 2020), renewed focus
on Events, restructuring of
the sales team and the recent
changes in management will see
a move to a more technology
led, digitally focused and product
focused offering.
Q&A with
Christine Shaw
Christine Shaw was named CEO
of InvestmentNews in July 2019.
Having more than 25 years of
experience in media, she comes
with a breadth of expertise across
digital, global events, and B2B
publishing. She has become a
champion for excellence, a fierce
advocate for working women,
and a media trailblazer
in international business.
CHRISTINE SHAW
CEO OF INVESTMENTNEWS
Q. Why did you join InvestmentNews,
A. I joined InvestmentNews because
and how has the culture and team
shifted since you joined?
I saw an amazing opportunity to
transform a traditional print-focused
brand into a data-driven media entity
and expand our opportunities into
four core pillars: Business Insights,
Events, Data & Analytics, and
Custom. Over the past eight months,
the culture has undergone a major
transformation, and I’m excited about
our new management team in place
who bring unique expertise.
Digital
Digital
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Bonhill Group plc
Our communities continued
A TRULY GLOBAL PARTNER
Putting our communities first
Our communities are at the centre of everything
that we do as a business. We have built our
three core propositions around them and
engage with them through Events, Business
Insight and Data & Analytics.
Audience
Relevant brands
Our product offering
GLOBAL
FINANCIAL
ADVISERS
US FINANCIAL
ADVISERS
Investment
News
Business
Insight
Events
Digital
International
Adviser
FUND SELECTORS
& FUND BUYERS
Portfolio
Adviser
Expert
Investor
Our global reach ensures that
each of our brands target a key
segment of the financial services
community with products that
specifically fit their needs.
Print
Data &
Analytics
Growth
Business
PRIVATE
INVESTORS
Small
Business
What
Investment
2019 Annual Report & Financial Statements 13
Bonhill Group plc
42%
31%
22%
5%
39%
32%
24%
5%
Events
Digital
Print
Data
* Proforma including
pre-acquisition Last
Word Media revenue.
Investments enhancing Bonhill
The new management team took over a
business in 2017 that was heavily weighted to
an UK events programme. The acquisition of
InvestmentNews brought a broader range of
products and a key market position in the USA.
25,000
20,000
15,000
10,000
5,000
35%
33%
27%
5%
47%
38%
15%
0%
74%
18%
8%
0%
March
2017
March
2018
December
2018
December
2019
December
2019*
The acquisition of Last Word
Media brought another
rebalancing of the business with
access to Asia and an increase
in data products and a broader
event portfolio. The two and a
half years have seen a much
improved reach and mix.
2019 RESULTS
39%
Events
32%
Digital
24%
Print
5%
Data
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 14
Bonhill Group plc
Our communities continued
DIVERSITY
Our DiversityQ.com brand
supports organisations in
creating a diverse and inclusive
workforce, working environment
and business culture, maximising
the benefits of diversity through
increased productivity, improved
staff satisfaction, creating a
more sustainable business model
and consequently enhancing
corporate returns.
In addition, over the last four years, we have
developed a portfolio of highly successful live events
for our diversity community including the Women in
IT series, the Women in Finance series and careers
fairs such as Tomorrow’s Tech Leaders Today.
At the end of 2019, we held our hugely successful
inaugural DiversityQ D&I Practitioners Summit for
board members, senior executives, HR professionals,
diversity and inclusion practitioners and talent
acquisition leads focused on moving the D&I
agenda from talking to action.
2019
Annual Report & Financial Statements
15
Bonhill Group plc
FIRST YEAR OF
DIVERSITYQ
DiversityQ has been running for a year and has made real progress in highlighting all
diversity issues and building direct relationships with the leaders of the D&I community
globally under the stewardship of editor Cheryl Cole.
Q. Why launch a platform
dedicated to diversity
and inclusion in the
workplace?
A. Diversity. Inclusion. To the
average person, these are just
words. However, at Bonhill
Group, these are the principles
on which we stand. They are
how we invigorate our teams,
cultivate our leaders, and
how we build a culture where
difference is celebrated.
Given we were so passionate
about raising the profile and
advancing the careers of women
through our ‘Women in...’
series, it made sense to launch
a platform that would not only
allow us to tell their stories but
also showcase what equality in
the workplace should look like
across all industries.
Q. What has been the
A. Overwhelmingly positive. Since
external response?
launch, we have had over 63,000
visitors to DiversityQ.com. We
are the only platform dedicated
to the subject matter in the UK,
and one of a handful globally.
Our readers – senior executives,
HR professionals, diversity and
inclusion practitioners, talent
acquisition leads and employees
– find value in the professional
guidance, tips, research, policy
and company insights we share,
as well as our role model profiles.
Q. What do the next
A. Improved accessibility. Coupled
few years hold?
with our diversity events there
is exponential room for growth
through podcasts, webinars,
online tools and consultancy
service. We aim to ensure
that everyone has access
to our platform.
Cheryl made the transition from
Ophthalmic Dispensing to a successful
award-winning career in journalism
and corporate communications, before
becoming a D&I champion in 2018.
Cheryl has continued to develop our
pioneering D&I platform, and the
underlying mission remains the same: to
highlight the significantly low percentage
of underrepresented groups in the
technology and finance industries; and to
challenge organisations that do not have
diversity and inclusion initiatives in place,
as well as enhance the effectiveness of
those that do. This is mainly achieved
through our thought-provoking editorial
content, best practice guidance, research
and summits.
CHERYL COLE
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements
16
Bonhill Group plc
Our communities continued
DIVERSITY
EVENTS
The Bonhill diversity events
portfolio aims to tackle
the gender gap within
the IT, finance and asset
management industries
globally.
We continue to see low numbers of female
representation in each of these dominating
industries.
» Women make up just 22% of the
STEM workforce in the UK and female
professionals face the pressures
of fighting twice as hard to achieve
progression.
» Just 26% of professional computing
jobs in the US were held by women in
2018 and only 9% by BAME women;
moving to senior and executive levels,
the statistics we see are even lower.
» A study by Catalyst 2019, shows that
women make up nearly half of the
financial services industry. However,
less than 13% of women in finance
make it into leadership roles like CFO
and they are less likely to get promoted
in this industry.
Our events are a platform to highlight and
celebrate female professionals in these
industries. We aim to highlight remarkable
tech talent, share case studies of exceptional
work, and elevate this community of strong,
inspirational role models. As a series, we
want to have a greater impact in the fight
for gender parity and we will continue to
strive for greater action.
‘Women in...’ series
The ‘Women in...’ series, is growing rapidly and is bigger
and better than ever. In 2019 the series across IT, finance
and asset management grew to 17 summit and awards
events from six awards events in 2018.
The combination of the summit and awards
events has increased the value proposition
for our attendees and sponsors. We are
able to offer more content, more networking
and also offer an ‘annual reunion’ between
top industry professionals, winners
and nominees. The feedback has been
extremely positive.
From left to right
» San Francisco
» Toronto
» New York
» Dublin
» London
» Berlin
» Romania
» Singapore
2019 key awards stats
2019 key summit stats
2,156
1,314
877
181
99
162
136
6
672
Total number
of entries
Entries
shortlisted
Companies
shortlisted
2019
winners
2019
judges
Number of expert
speakers
Companies
represented
Summits
launched
Total number
of attendees
2019 Annual Report & Financial Statements 17
Bonhill Group plc
DiversityQ
Diversity and Inclusion (D&I) are
more important than ever as
strategic priorities for companies
around the world.
Multiple studies prove that D&I investments
go hand-in-hand with profitability and
success. So much so and with companies
increasingly under the microscope, we are
seeing new initiatives and ways of working
emerge every week.
Over the last five years, Bonhill Group has
been highlighting the gender gap in the
technology and finance industries. Now, we
want to broaden the diversity and inclusion
debate and shine a light on the role of the
D&I professional and the topics, groups and
communities that require further support.
Together we aim to overcome the sense
of obligation and compliance and instead
have diversity, equity and inclusion seen
as the norm and as something that all
organisations believe in.
In 2019, with the support and work done by
DiversityQ, we were able to launch our first
D&I Practitioners Summit in London. This
event brought D&I professionals together to
establish the best D&I strategies for multiple
organisations and industries by breaking
down the principles, step-by-step.
We were delighted to welcome 104
attendees and 30 D&I expert speakers
to launch the series. In 2020 we will be
launching the summit in San Francisco
in March and we will add a new event –
LGBT Great Summit & Awards in asset
management in October.
We are seeing new
initiatives, and ways
of working emerge
every week.
2019 key awards stats
Total number of entries
Entries shortlisted
136
100
79
14
2019 winners
Companies shortlisted
Future Stars of Tech
It is widely acknowledged that
STEM careers are male dominated.
The percentage of women in STEM
statistics include just 15% of Engineering
graduates, 19% for Computer Studies
and 38% for Maths. Gender disparity
is also evident at university level, where
52% of males take STEM related
courses, in contrast to only 30% of
females. The influencers impacting female
representation are that there are relatively
few female STEM role models, that tech
is not being offered and encouraged as
much as it is to male students, they are
not shown opportunities beyond coding
and because employers do not actively
target female candidates. According to a
report by the National Center for Women
and Information Technology (NCWIT),
the turnover rate for women in the tech
industry is 41%, compared to just 17%
for men.
Among women who leave, 24%
completely quit the industry and take
up non-technical jobs, 22% opt for
self-employment within the tech industry,
20% take a break from being part of
the workforce, and 10% take up jobs
with start-up companies. These industry
statistics are disheartening, leaving a large
portion of the population uninspired.
To combat these statistics and to expand
the great work already being done within
the ‘Women In…’ series, the Future stars
of Tech Awards was created. This event is
geared at boosting visibility of female talent
within their first eight years of their career.
It provides a platform to highlight, motivate
and encourage young people in tech to
overcome the statistics, stay in tech and
to challenge the issues holding back
diversity. We are investing in the leaders
of tomorrow!
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 18
Bonhill Group plc
Chief Executive’s review
EMERGING AS A
STRONG ORGANISATION
SIMON STILWELL
CHIEF EXECUTIVE
OPERATIONAL
HIGHLIGHTS
It has been an extremely busy
and productive but, in many ways
frustrating reporting year. We saw
good organic growth from the core
Bonhill business, as well as through
acquisition with Last Word Media
and the continued development
of InvestmentNews.
We have, however, had to contend
with the political instability in the
Asian market, which has impacted
our events revenue.
Investing in people
Significant investment in new
people at all levels to bring new
skills and industry best practice
to the Group
Expanding event
series
Continued success in the
expansion of the ‘Women in ...’
series with new events launched
in Toronto, Berlin, Singapore
and Bucharest
Technology
investment
Significant investment
in technology to provide
common technology platform
which enables the continued
development of our data and
product strategy
COVID-19
As previously announced
COVID-19 is having a material
impact on our 2020 global
event activities
2019 Annual Report & Financial Statements 19
Bonhill Group plc
Introduction
The UK saw difficult trading conditions in the
second half with the well-documented issues
in the active UK fund management industry
that hampered fund flows in the second half
of the year.
However, these conditions, which improved
markedly post the UK General Election and
into the first quarter of 2020, have been
superseded by the impact of the COVID-19
pandemic. This impact has been felt in all of
our operations and currently our workforce is
working remotely. We have also seen delay,
postponement and cancellation in our events
business. We have largely completed our
technology infrastructure spend to give us the
necessary global IT platform going forward
and thankfully this timely investment has
enabled us to continue operationally during
the pandemic. We have made operational
progress, but there is still much to be done
to develop on the market position we have.
Approximately 80% of the current business
sits in the prime position as a key partner to
the global asset management/financial adviser
market and our events, business information
and increasing research and data products
help facilitate business in that arena and we
seek to enhance our offering to clients with
new products. Our core ‘Women in…' series
expanded internationally to four new countries
in 2019 and the new Diversity and Inclusion
Summit series, alongside our growing Women
Adviser Summit brand in the USA, gives us a
strong platform going forward.
Since the period end, we have been tackling
the challenges of operating in the COVID-19
world and although this will have a material
impact on the events operations, we are
utilising alternative formats and using the time
to improve all parts of the business.
I am pleased that we now have a profitable
(on an adjusted basis) business of increased
scale. The current international situation
has created a business hiatus that will need
careful handling, but when we emerge the
next step will be to enhance the opportunities,
revenue and margin of the Group by building
on our technology investment and new
product initiatives, as well as expanding the
geographic footprint of our existing product
set. I believe that we have the platform,
people and resources to do so. Our brands
serve communities and play an important
role in distributing information, educating
participants and most importantly, connecting
people and enabling business. We are using
all appropriate methods to continue this
engagement and help our clients stay close
to their communities. Like others, we do not
know how long this crisis will last. However,
we are positioning ourselves to respond
quickly when the end is in sight, for there will
be no greater need by business for community
events, forums, meetings and business
networks, than when we emerge from this
global crisis.
Financial information
For the year ended 31 December 2019,
we reported revenues of £24.4 million
(9 months to 31 December 2018: £8.0 million)
and adjusted EBITDA of £2.3 million (9 months
ended 31 December 2018: £0.9 million).
The increased revenues are partly as a result
of the acquisition of Last Word Media in April
2019 and a full year of InvestmentNews, which
was acquired in August 2018. We ended the
year with £1.9 million of cash (31 December
2018: £4.4 million). During the year, the
Company paid its maiden interim dividend of
0.28p for the six months ended 30 June 2019.
Our revenues comprise 40% Live Events, 55%
Business Information and 5% Data & Insights.
Geographically we are split 59% US, 2% Asia
and 39% EMEA.
Fund-raising since the year end
Since the balance sheet date and following
shareholder approval, as part of our response
to COVID-19 referred to above, the Company
undertook a capital raise which was approved
at a General Meeting on 30 April 2020, As a
result, the Company, in aggregate, has issued
50.0 million new shares at a placing price
of 5p per share, generating net proceeds of
£2.3 million. We saw a good level of support
from new and existing shareholders and the
funding provides us greater flexibility through
the coming months.
COVID-19
The business has been dealing with the impact
of the coronavirus since January in our Asian
business and then more recently across all our
operations. Currently all of our staff are able to
operate remotely, and we continue to offer a
full range of services. The biggest impact has
been on our global events businesses that
have been heavily disrupted in the first and
second quarters of this year. We have moved
most of our event activity into the second half
of the year should the conditions allow these
events to be run. We have taken swift action
to develop a webinar format and currently
have 20 webinars planned for the coming
months either to supplement or replace
existing events. The webinars which have
been held to date have been well received
with positive feedback from clients and good
attendance numbers. We have moved our
US print activity to a digital magazine which
has allowed clients to continue to access their
core audience and we have also offered some
new digital packages. Generally, we have been
pleased with the continuing level of support for
our digital, research, content marketing and
editorially led products.
To mitigate for the overall expected reduction
in revenues we have taken action on the cost
base with redundancies in all regions as well
as placing around 10% of the UK workforce
on furlough. In other areas we have reduced
working hours, enacted a hiring freeze and
not filled open positions.
These initiatives amount to savings of £2.5
million a year and other reductions in travel
and entertainment, print production costs and
least payment holidays have reduced costs by
another £1.3 million. We have also utilised PAYE,
VAT and tax deferrals to conserve cash and
we are continuing to explore other government
lending initiatives. This in conjunction with the
completion of our recent capital fund raising
puts us in a stronger financial position to see out
the crises. We continue to monitor the situation
on a daily basis.
Strategic review
We will continue with our strategy to focus
on the provision of Business Information, Live
Events and Data & Insight in our three chosen
sectors and with a growing geographic reach.
We aspire to build, manage and own market-
leading brands with ‘must have’ products,
that provide greater financial visibility via
recurring revenue streams and strong cash
generation. We operate in three clearly
defined global business sectors: Technology,
Financial Services and Diversity, all of which
are growing, constantly evolving and are
extremely complementary. Increasingly
we have seen a focus on ESG both in
the investment community but also within
operating businesses. We believe this theme
will be a core element of our offering across
all of our communities and so we will develop
products and offerings to reflect that change.
Acquisition of Last Word Media
In April 2019, we completed the acquisition of
Last Word Media for a total net consideration
of £7.8 million (see note 20). The transaction
was in line with our strategy to own market-
leading brands, it is complementary to
InvestmentNews and brought us exposure
to fast growing international markets. It is
expected that no deferred consideration will be
payable for the acquisition of Last Word Media.
Last Word Media operates seven investor-
facing brands. These include seven news
and information websites, two of which have
associated print titles. In 2019, the brands
collectively hosted 98 live events, all designed
to connect asset managers with their core
discretionary fund manager clients. Last
Word Media operates a further three brands
targeting asset managers with event services,
content marketing solutions and research
data products. We have already taken steps
to further develop these offerings. The
overall business creates content, sales and
marketing opportunities, networking events
and transactional opportunities for its clients
and audiences with the key objective to assist
asset managers with increasing assets under
management, as well as brand positioning and
delivering pre-agreed marketing objectives.
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 20
Bonhill Group plc
Chief Executive’s review continued
CREATING
OPPORTUNITIES
FOR ALL OF OUR
STAKEHOLDERS
Our stakeholders
Our
Communities
Engagement
Our
Investors
BONHILL
Investment
Our
People
Development
Our
Partners
Read more about how we are creating opportunities for our stakeholders on page 26
During the summer and second half of
the year, the business suffered challenging
trading conditions as a result of the political
situation in Hong Kong and domestically
with the well-documented issues in UK active
fund management. These challenges led to
a worse than expected performance, such
that it fell below its earn out targets. As a
result, we made some key changes to the
senior management which led to the cost
base being reduced by £1.0 million. Following
the UK General Election in December 2019,
there has been an early flow of funds back
into the UK active equity market and we have
also launched a series of other initiatives that
broaden our asset class offering, including our
first fixed income congress and events around
alternative investments and specific ESG
activities. Looking to 2020, we will invest more
into our ESG brands as we see tremendous
demand for our product in this key area, as
well as develop our nascent content marketing
offering. Within Last Word Media, there is
a developing asset class research business
that in time should provide greater insight
and direction not only to our clients but to
the business itself.
In the coming year, it is the Board’s intention
to launch two of Last Word Media’s brands
in the US, including ESG Clarity and Future
Flows USA. These established brands will
help broaden the InvestmentNews offering
and align us more to the trends we are seeing
in the US.
Despite the challenges of the second half
of 2019, and the current situation, I am
greatly encouraged by the support from
clients and the value they see in our core
financial services offering.
Diversity and the ‘Women in…’
series
I am delighted that we have continued to see
growth in our ‘Women in…’ series. We have
had successful launches in Berlin, Bucharest,
Singapore and Toronto and we now operate
in eight cities in three continents. Women
in Finance has also seen good growth and
launched in Toronto and this franchise now
operates in four cities in Europe and North
America. During the year, we also successfully
launched Women in Asset Management in
New York and four Diversity and Inclusion
summits alongside dramatically growing our
DiversityQ brand in key geographies. Within
InvestmentNews, we have expanded our
successful Women Advisor Summit series
to six cities and this key educational day for
the growing female financial adviser market
will be enhanced with greater network
opportunities and continued learning modules
in 2020. There is still much to be done to
address diversity, especially in the finance and
technology industries, and the scope of our
activities will increase in 2020.
UK media assets
2019 was a breakthrough year for our UK
media assets. We now have these titles
working effectively under their new leadership
and clearer assessment of the audience
needs. It is in this area that we have seen
the most change in the customer base and
our developing new product area. With an
increased focus on the audience and a tailored
editorial approach, we have seen a greatly
improved readership, up 17%, and successful
trials for three different new products that have
allowed us to broaden the customer base and
better fulfil client needs. The year also saw
the successful launch of ‘the venturers club’ a
community for entrepreneurs and advisers and
this initiative will provide an ongoing range of
events and products for this group.
2019 Annual Report & Financial Statements During the recent turmoil in the UK market,
www.smallbusiness.co.uk has seen a five-fold
increase in its audience as the UK SME seeks
answers to the many issues they currently
face. It highlights to me that the new team
approach to sales, marketing, editorial and
investment in technology and SEO capabilities
is working.
InvestmentNews
We acquired InvestmentNews in late summer
2018, a 21-year old US title that is the market-
leading provider of news and information to
the growing US financial advisor community.
It is a key partner for both advisers and asset
managers. On acquisition, it was our ambition
to invest in the business to further develop
the events and data propositions, which we
believe had been under exploited previously.
2018 was a record year for the Company and
although we saw a modest revenue decline in
2019, we made a lot of the structural progress
required to further develop the business.
We have completed our first phase technology
investment and we now have a modern
effective digital platform and a recently
relaunched core website. The print revenues
have declined as predicted and we have
resized our print offering and distribution to
protect its contribution, whilst continuing to
make it an effective route to market for our
clients. InvestmentNews sits strategically
between the key constituents of the large US
professional investment market, an industry
that continues to change through regulation,
acquisition, product launches, changing
demographics, ESG, evolving technology and
the changing nature of advice. This complex
and dynamic environment provides a strong
backdrop for InvestmentNews’ services. In
2019, we saw the launch of new events
around the ‘future of advice’ and also the
hugely successful Impact forum in conjunction
with the United Nations. The restructuring of
the sales and senior leadership teams has
brought fresh thinking and a broadening
product offering to better reflect client needs.
We have successfully transitioned from a
‘print first’ mentality to a much broader
business-to- business service provider.
In August 2019, Christine Shaw joined as
the company’s new CEO and has rebuilt the
leadership team to bring a broader range of
skills and outside industry specialisms. This
change will also see the launch of a broader
financial services portal in 2020 so that we
can play a fuller part in the core US financial
advisor market and InvestmentNews will be
part of a broader offering. In a year that has
seen many changes and challenges, I would
like to thank the wider InvestmentNews team
for their commitment in both helping this
transition, but also handling it during a major
technology overhaul.
The best evidence of our strategy in action
post-acquisition has been the greatly
expanded events portfolio. On acquisition,
there was a small two-person team and $1.6
million of historic revenues. In 2019, it had
a team of six and $3.6 million of revenues.
Despite the current environment, we continue
to see good growth potential in this area and
look forward to building out the team and the
offering to serve the industry needs. In that
regard, the highly successful Impact forums,
held in December 2019 at, and in conjunction
with, the United Nations epitomise our focus
on key industry areas as well as bringing our
own data, research, creativity and outstanding
multimedia skills together in one unique event.
There is a new energy and new skills in the
InvestmentNews brand and a renewed
purpose, all of which bodes well. We take
great comfort from the feedback and support
from major clients especially during a year
of change and look forward to bringing them
a host of new products and opportunities in
the coming years.
Data
We have highlighted our ambition to build a
much stronger data business out of our titles
and audience. 2019 saw the first meaningful
steps in executing this part of our strategy.
The keys steps were twofold – firstly invest in
a common technology platform that enables
us to effectively capture and analyse our
data and second, the recruitment of a Chief
Product Officer in the summer to give us
to a dedicated resource to look at product
development. As previously mentioned, we
have been running new product trials in
financial services, small business and diversity
and we have had success in all areas. We
will continue to develop these trials as well as
continue to assess with key customers where
we can best apply our audience knowledge.
We have also looked at enhancing our
existing data and product sets with ongoing
investment and enhancement to our research
studies in the US and our Future Flows
product in the UK, Europe and Asia. We
expect to roll out a US version in the next
12 months and to develop our internal asset
class research offering.
Personnel
We have continued to see change in our
people resulting in an abnormally high level
of staff turnover during the year, especially
in the US and in Last Word Media. Although
in the short-term it will see some disruption,
it is entirely necessary as we align Group
roles and skills and continue to develop and
enhance the product. We will continue to
attract fresh talent that can have a material
impact on our business areas. We are
working hard to improve our culture with
some good results from our initial staff survey
and recently implemented initiatives around
internal communication and collaboration.
The latter part of 2019 saw a much higher
level of interaction between sales, marketing
and multimedia and research between the US
and the UK operations. The period also saw
the majority of the UK operations combine in
one location, a process that was completed
in early 2020.
We continue to evolve our internal and
external processes to ensure we can deliver
the highest levels of customer service and
efficient internal working. We always strive for
best practice and believe that we have now
built a solid foundation in order to uphold the
highest standards of governance and process
in every aspect of our business. We have with
our technology platform and greater focus
begun to work on improving the key operating
metrics within the business to drive efficiencies
and service levels.
As the wider B2B market has developed,
we have evolved our thinking. We remain
attracted by the long-term prospects of the
wider B2B arena. We have learnt more about
our customer needs and this has highlighted
the potential to build a global solutions
provider in our chosen areas with a more
rounded partnership offering. Our sectors are
rapidly evolving and the constant need for
information and insight ensures we have a
role to play with our high quality, content led
solutions across Business Information, Live
Events and Data & Insight.
21
Bonhill Group plc
Technology
The additional VCT and EIS funds raised in
2018, to invest in the Company’s infrastructure
and technology platform, have now been
utilised. 2019 saw the implementation of our
technology plans to deliver a broad open
extensible technology platform across the
whole business. We now have a common
content management system and the recently
launched improved InvestmentNews website
will allow an improved experience now and in
the future. We are excited that we now have
an excellent platform for us to communicate
with our audiences, undertake greater analysis
of our business and deliver better solutions for
our clients. The technology refresh was much
needed for all the business and we can now
look to develop it further in the latter part of
the year with “phase two” enhancements. One
simple demonstration of this change has been
the ability of the Company to move seamlessly
to remote working very recently. Having
conducted team trials in the early days of the
virus, and having experienced the early impact
of widespread office closure in Asia, we
moved quickly to protect our staff and enable
them to work remotely.
Outlook
The COVID-19 crisis began at the start of the
Company’s financial year and its impact is only
now being fully felt. It is still too early to judge
its impact on the year ending 31 December
2020 with any degree of certainty. As a
result, it is no longer possible for the Board to
provide financial guidance for the year ending
31 December 2020. Across the Group, costs
are being tightly managed, and we are taking
actions to conserve cash balances. Given
the lack of certainty on the outcome of the
year ending 31 December 2020, the Board is
not recommending a final dividend payment
for the year ended 31 December 2019 and
is suspending dividend payments until the
outlook is clearer and more normal trading
conditions have resumed.
Notwithstanding these challenges, the
underlying business has better people,
processes, structure, technology, products
and a strong client base from which to
progress. We are confident that over time we
can rebuild investor confidence in the Group
by demonstrating that we can obtain the
required returns from our acquisitions and
continue to grow the business.
The integration and collaboration of Last Word
Media with InvestmentNews is a clear path
to creating new incremental revenues for
the Group and establishing ourselves as the
partner of choice in our key markets. There
are clearly major opportunities to develop and
broaden the brands further, which we will do
in the years ahead. We are also looking to
further develop our product and data strategy
and also our diversity events portfolio as there
are clear opportunities in both those areas.
Subject to a clearer outlook, we will continue
to invest across the business in the latter part
of the year to further enhance our technology
which we believe will help generate the
required returns.
Simon Stilwell
Chief Executive
1 May 2020
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 22
Bonhill Group plc
Group Finance Director’s review
BALANCE SHEET
STRENGTHENED TO DEAL
WITH CHALLENGES AHEAD
DAVID BROWN
GROUP FINANCE
DIRECTOR
In the same way as last year, the
Group has prepared adjusted results
to provide a clear indication of the
Group’s core business performance.
This removes the impact of certain
items which the Group classifies as
exceptional due to their materiality
and non-recurring nature, and also
other separately reported items.
KEY
PERFORMANCE
INDICATORS
EBITDA*
(2019: £0.9m)
EBIT*
(2019: £0.7m)
Revenue
(2019: £8.0m)
24.4£M
2.3£M
1.4£M
2.24p
(0.2)£M
29.8£M
Free cash flow – outflow
(2019: £(0.8)m)
EPS*
(2019: (2.69)p)
Net assets
(2019: £22.9m)
* Adjusted EBITDA excludes adjusting
items, acquisition costs and amortisation
of intangible assets through business
combinations as set out in note 5.
2019 Annual Report & Financial Statements 23
Bonhill Group plc
InvestmentNews generated £13.9 million
of revenue in the year which was down 6%
on the record revenue of £14.7 million for
the calendar year 2018. There has been
significant change within the business
during the year – a new CEO and sales
team, investment in technology and a move
to more custom offerings and consultative
selling. This has led to the planned shift in
mix away from traditional print and digital
towards events and research. For 2019,
EBITDA was £3.2 million compared to
£3.8 million in the prior year, with a healthy
23% margin.
The UK based Events business generated
total sales of £3.0 million which is 11%
higher than the sales in the corresponding
12-month period in 2018 of £2.7 million
(unaudited).
UK Media sales also saw improved
performance year on year, with sales of £0.8
million compared to £0.6 million in the 2018
calendar year (unaudited).
Adjusted earnings before interest, tax,
depreciation and amortisation (“EBITDA”) is
a measure of earnings and cash generative
capacity. A reconciliation of adjusted EBITDA
to statutory earnings is set out in note 5 of
the financial statements.
An adjusted EBITDA profit of £2.3 million
(9 months ended 31 December 2018:
£0.9 million profit) comprised a £3.2 million
contribution from InvestmentNews,
£0.9 million from Last Word Media and
a £1.8 million loss from the UK business
which carries the central overheads for
the Group.
Reflecting the scale of the investments we
have made in the business, and the magnitude
of the changes we have made to the teams,
adjusting items comprised £0.8 million
(31 December 2018: £1.9 million) of acquisition
related costs, £1.6 million of integration costs
(31 December 2018: £0.3 million), £1.2 million
of restructuring costs (31 December 2018:
£nil) and £1.4 million (31 December 2018:
£0.5 million) relating to amortisation or write
off of intangible assets acquired, together with
tax relief on these items of £nil (31 December
2018: £0.3 million).
On an adjusted basis, the retained profit
was £1.0 million (31 December 2018: loss
of £0.5 million), equivalent to 2.24p per share
(31 December 2018: 2.69 per share). The
statutory loss for the period was £4.1 million
(31 December 2018: £1.8 million), equivalent
to 9.28p per share (31 December 2018:
9.51p per share).
Revenue
Adjusted EBITDA profit
Depreciation / amortisation of internally generated intangibles
Share option charge
Adjusted operating profit
Finance costs
Adjusted profit before tax
Adjusted tax
Adjusted profit
Adjusting items (after tax)
Statutory loss
Adjusted profit per share
Statutory loss per share
31 Dec 2019
12 months
£’000
31 Dec 2018
9 months
£’000
24,429
2,312
(776)
(149)
1,387
(491)
896
106
1,002
(5,148)
(4,146)
2.24p
(9.28)p
7,991
889
(155)
(68)
666
(146)
520
—
520
(2,360)
(1,840)
2.69p
(9.51)p
Income statement
The adjusted results are shown
in the statement of consolidated
income and below, with further
details given in notes 4 and 5 of
the financial statements.
The Group chooses to measure and present
its performance in various other non-GAAP
measures such as underlying revenue
growth, adjusted cash flow, adjusted
EBITDA and net assets.
These measures and the adjusted statement
of consolidated income are not intended
to replace statutory results and measures.
The Group feels that they give a clearer
indication of the underlying results and are
consistent with how the Board monitors
results. In note 5 of the financial statements
is a reconciliation of the numbers to their
statutory equivalents.
Last Word Media generated £6.7 million of
revenue in the eight and a half months since
it was acquired on 10 April 2019. Looking
at the calendar year for 2019, including
pre-acquisition revenue, Last Word Media
delivered 3% revenue growth in the first half,
before a particularly tough second half due
to the well documented issues in UK fund
management and the political unrest in Hong
Kong in the latter part of 2019 led to overall
revenue for the calendar year being down
5% on 2018.
Income statement
Earnings per share
(2019: (2.69)p)
2.24p
24.4£M
Revenue
(2019: £8.0m)
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 24
Bonhill Group plc
Group Finance Director’s review continued
Adjusted EBITDA
Working capital movement
Interest paid
Tax
Foreign exchange gains or losses
Purchases of property, plant and
equipment and intangible assets
Free cash outflow before adjusting items
Acquisition of subsidiary
Adjusting items
Dividends paid
Proceeds from issue of ordinary shares
Repayment of borrowings
Net cash (outflow)/inflow
Intangibles
Tangible fixed assets
Working capital
Lease asset
Lease liability
Deferred and current tax
Cash
Debt
Net assets
31 Dec 2019
12 months
£’000
31 Dec 2018
9 months
£’000
2,312
(1,087)
(345)
(107)
(29)
(946)
(202)
(5,840)
(3,646)
(136)
9,484
(2,136)
(2,476)
889
(1,290)
(267)
—
8
(134)
(794)
(12,867)
(1,774)
—
19,247
(449)
3,363
31 Dec 2019
£'000
31 Dec 2018
(restated)
£'000
27,501
343
2,805
1,493
(1,600)
(28)
1,891
(2,614)
29,791
20,970
125
1,554
968
(1,018)
260
4,367
(4,323)
22,903
Cash flow
(0.2)£M
Free cash outflow before adjusting items
(2019: £(0.8)m).
Net of £0.5 million of costs, £9.5 million of
share placing proceeds were raised in the
year (31 December 2018: £19.2 million),
of which £5.8 million was used as part
consideration for the acquisition of Last
Word Media (after the cash acquired of £0.7
million) and £0.8 million paid out relating to
acquisition costs. We continued to invest in
building the right team and infrastructure,
with £1.2 million relating to restructuring and
£1.6 million relating to the integration of the
acquired businesses, which together with
the acquisition costs, brought total cash
adjusting items to £3.6 million.
After repaying outstanding loan note
commitments and lease payments, the net
cash outflow for the period was £2.5 million.
Balance sheet
29.8£M
Net assets
(2019: £22.9m)
At 31 December 2019, the business had a
cash balance of £1.9 million (31 December
2018: £4.4 million).
Last Word Media was acquired for a net
£7.8 million which comprised £6.5 million
in cash, £2.0 million in shares less £0.7
million cash acquired with the business.
No deferred consideration will be paid in
respect of the 2019 performance. Deferred
consideration is due at 5.63 times any 2020
EBITDA in excess of £3.5 million, which the
Board considers to be extremely unlikely to
be reached.
The borrowings are a vendor loan from
the acquisition of InvestmentNews of £4.7
million, which had been reduced to £2.6
million by the balance sheet date. The loan
is repayable in equal monthly instalments
until 31 August 2021 and attracts interest
at 8% per annum.
2019 Annual Report & Financial Statements 25
Bonhill Group plc
COVID-19 and current trading
As announced in its trading update released
on 20 January 2020, the Company started
2020 well with particularly strong forward
bookings in the UK and US following the
decisive UK General Election result, greater
clarity on Brexit and the well-publicised issues
in UK fund management caused by a high-
profile fund failure.
As announced in the update released on
23 March 2020, COVID-19 is having a
material impact on all parts of our business.
In 2020, we have run 16 events, but as the
impact of COVID-19 has increased this has
scaled down, particularly in March, and we
have no events scheduled until May 2020
at the earliest.
The vast majority of our UK, US, European
and Asian events have been postponed until
May 2020 at the earliest or more commonly
to the third and fourth quarters of 2020;
specifically the events deferred to the second
half were expected to generate total revenues
of £5.0 million, comprising approximately
£1.8 million in the US, £1.7 million in the UK,
£1.2 million in Europe and £0.3 million in Asia.
A very small number of events generating a
total revenue of approximately £0.2 million
have been cancelled but are expected to
return in 2021. The impact of the various
postponed and cancelled events will vary by
geography, but the Company will incur one-off
cancellation fees of approximately £0.3 million.
The combined impact of COVID-19 on our
Events business will be to lower expected
revenue by £5.2 million and gross profit by
£3.1 million for the first half of the Company’s
financial year ending 31 December 2020
(“FY2020”). As previously described, revenues
of £5.0 million have been postponed until the
second half of FY2020.
Last year, we made annualised cost savings
of £1.5 million and in response to COVID-19
we have had to undertake further significant
cost savings across the Group resulting
in a 15%. reduction in roles in the UK and
European businesses. This will result in further
annualised savings of £1.5 million.
Across the Group, costs are being tightly
managed, and we are taking actions to
conserve cash. As at 20 March 2020, the
Group had a total cash balance of £1.6 million
and a vendor loan of $3.1 million repayable
in monthly instalments until August 2021.
Other than those referred to above, all of
our remaining events are currently expected
to go ahead as planned in Q3 or Q4 2020.
The situation is evolving on a daily basis,
and we will continue to work hard to mitigate
the impact that the outbreak is having on
the Company. We would like to thank all of
our sponsors, suppliers and delegates for
their support.
Given the lack of certainty on the outcome
of FY2020 and our actions to conserve cash,
the Board is suspending dividend payments
until the outlook is clearer and more normal
trading conditions have resumed. In the short
term, the Board will consult with and update
shareholders and seek to explore the various
support measures recently proposed by the
UK Government.
Fund-raising since the
year end
Since the balance sheet date, the Group has
issued 50.0 million shares at a placing price
of 5p per share, generating gross proceeds of
£2.5 million before issue costs of £0.2 million.
Going concern
The Group's business activities, together
with the factors likely to affect its future
development, performance and position,
are set out in the Chairman's statement
and the Chief Executive’s review.
The Directors regularly review detailed
forecasts of sales, costs and cash flows,
and regularly project forwards 12 months
ahead or more. The assumptions underlying
the budget are challenged, varied and tested
to establish the likelihood of a range of
possible outcomes, including reasonable cash
flow sensitivities. The expected figures are
carefully monitored against actual outcomes
each month and variances are highlighted
and discussed at Board level.
However, the uncertain impact of COVID-19
introduces more risks and uncertainty into
this review. To this end a highly sensitised
model has been run which takes into account
the post balance sheet fund-raising and the
following assumptions:
» While it is currently envisaged that many
of the events rescheduled from H1 to H2
will proceed, the model assumes that all
of these events will be cancelled, resulting
in a loss of £5 million revenue and
£3 million EBITDA
» Despite current encouraging media sales,
a 30% decline in media spend compared to
last year from 1 April 2020 to 31 December
2020, and a 15% decline compared to
2019 thereafter has been modelled
» Further cost savings of £0.5 million from US
print costs, £1.3 million of further overhead
savings, £0.3 million of UK staff furlough costs
Together this model achieves 2020 revenue
of £20 million and break-even EBITDA before
returning to 2019 levels in 2021.
This sensitised cash flow forecasts
demonstrates that the Group will be able to
pay its debts as they fall due for the period
to at least 30 June 2021. The Directors
are, therefore, satisfied that the financial
statements should be prepared on the going
concern basis.
In the event that the COVID-19 impact is
worse than modelled, then further measures
would be required to relieve any short-term
cash pressures which may arise. These
could include Government backed loans
or subsidies from either the UK, the US or
both, increased staff furloughs, increased
cost savings and tougher working capital
management. Given the lack of certainty
that COVID-19 has had on the Group's
operations and the international markets in
which it operates, these conditions indicate
the existence of a material uncertainty which
may cast significant doubt on the Group's and
the Company's ability to continue as a going
concern.
David Brown
Group Finance Director
1 May 2020
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 26
Bonhill Group plc
Our stakeholders
ADDING VALUE
FOR EVERYONE
OUR STAKEHOLDERS
ARE INTEGRAL TO ALL
AREAS OF OUR BUSINESS
AND ENSURE THAT WE
CONTINUE TO THRIVE AS
A SOCIALLY RESPONSIBLE
ORGANISATION
2019 Annual Report & Financial Statements 27
Bonhill Group plc
The Directors have ongoing engagement with all our key
stakeholders: Our People. Our Communities, Our Investors and
Our Partners. The Directors continually review the impact that
any decisions will have on these key stakeholders.
» We aim to work responsibly with our stakeholders, including
suppliers. The Board has recently reviewed its anti-corruption
and anti-bribery, equal opportunities and whistleblowing
policies.
» The Board regularly reviews the Company’s principal
The key Board decisions made in the year are set out below:
stakeholders and how it engages with them. This is achieved
through information provided by management and by direct
engagement with stakeholders themselves.
Significant events/
decisions
Stakeholders
impacted
Considerations
Acquisition of Last Word
Media
Restructuring
All
All
Investment in technology
People and partners
» Shareholders were consulted on the transaction
» Expose current employees to a larger, diverse company
with synergies of the existing group
» Ability to provide more products in wider geographic region
for our communities and our partners
» Impacted departments were consulted in respect
of changes to job descriptions
» Where possible staff were consulted to re-deploy
to available roles
» Delivering a better and more efficient product for our
customers and communities
» Allowing our employees to be as efficient as possible
using technology
Responses to COVID-19
People, partners and
customers and shareholders
» Extensive engagement with our People to ensure safety
and safeguard jobs to the fullest extent possible
» Engaged with shareholders to ensure sufficient working
capital in the business
» Working with our customers to provide relevant products
throughout the disruption caused by COVID-19
OUR PEOPLE
We engage with our
people through a variety
of means including,
employee surveys, staff
meetings, quarterly
Company updates,
knowledge sharing and
open-door leadership.
OUR COMMUNITIES
Our communities are at
the centre of everything
that we do as a business.
We have built our three
core propositions around
them and engage with
them through Events,
Business Insight and
Data & Analytics.
OUR INVESTORS
We engage with our
investors through
AGMs, formal quarterly
review meetings
and regular updates.
OUR PARTNERS
Formal meetings are
regularly conducted
to present business
and product updates
and share insights and
research. Day-to-day
contact is maintained for
ongoing partnerships.
Frequency of
engagement
Ongoing
Impact on our
business
High
Frequency of
engagement
Ongoing
Impact on our
business
High
Frequency of
engagement
Monthly/Quarterly
Impact on our
business
High
Frequency of
engagement
Ongoing
Impact on our
business
High
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 28
Bonhill Group plc
Our responsible business
OUR COMMITMENT
TO A BETTER WORLD
INTEGRATING ESG
CONSIDERATIONS
ACROSS OUR BUSINESS
ESG
OFFERINGS
ESG CLARITY
Our dedicated, editorial driven
ESG channel, designed for global
fund buyers and fund selectors
who incorporate ESG thinking
into their investment practices.
DIVERSITYQ
DiversityQ supports board
members setting and enacting
their D&I strategy, HR directors
implementing D&I best practice
and brand advocates ensuring
their company has the right
reputation and communications
to attract top talent from a
diverse pool.
IMPACT
FORUM
Our annual InvestmentNews event
for investment professionals
to translate global ESG and
impact investing perspectives
into strategies that resonate with
investors and produce desired
outcomes.
ESG EVENT
SERIES
Across our brands, we host
several ESG events (e.g. ESG
Congress) for fund buyers &
fund selectors with the aim of
raising awareness, educating,
and unravelling the biggest
factors affecting sustainable
investing, whilst also examining
best practices for integrating
ESG factors.
2019 Annual Report & Financial Statements ESG
COMMITMENT
ENVIRONMENT
SOCIAL
GOVERNANCE
29
Bonhill Group plc
Our biggest changes have
been within our event
operations. For events,
we use myclimate.org to
compensate for our delegates’
flights carbon footprint as
well as using Olio in the UK to
ensure that any leftover food is
not wasted. We’re dedicated
to partnering with more
sustainable venues (i.e. LED
lighting, recycling stationery,
local food suppliers) and are
working hard to ensure that
our events are paperless
through: recycling delegate
badges, substituting printed
programmes with our events
app, and replacing printed
banners with digital signage.
The Board of Directors is responsible
for the overall governance of the Group.
This is then passed down to the various
Committees which oversee Audit,
Nomination, Remuneration and in 2020
will include an ESG Committee. Risk
is also covered separately by the risk
committee, a part of the regular Audit
meetings. This includes the identification,
measurement, control and monitoring
of relevant risks across the Group and
making recommendations to the Board.
These Committees sit a minimum of twice
a year and the Board looks at all of the
operating businesses on a monthly basis
as well as holding ‘deep dive’ information
sessions on specific business areas on a
rolling basis. Dialogue with managers and
employees is encouraged to make sure
that all information can be ‘triangulated’
to ensure of its accuracy.
A strong employee risk aware culture is
promoted within the business so that
anyone is capable of highlighting any
areas of concern and often employees
meet with the non-executive Board
to help understand specific issues or
business areas.
The Board recognises the importance
of its role in promoting the Company’s
desired culture and ensuring it aligns
with our values: Passionate about our
communities, creating exceptional
value, striving for excellence and
maximising the potential of our people.
The management are responsible for
developing the policies and procedures
to ensure the values driving the
Company’s culture are implemented
throughout the business.
Separate employee-run ESG, culture,
charity and social groups help shape
the Group's efforts in these areas.
We are proud of the work that our Social & Charity
Committee are involved in, managing charity events
and holding fundraisers throughout the year to support
our chosen charities. We have also recently held our
inaugural ESG Committee meeting. These individuals
will meet on a regular basis to discuss, innovate,
manage and support our Company’s ESG ethos. This
should ensure that we continue to challenge tradition
and keep Bonhill positioned as a diverse company
with strong ESG credentials.
A new initiative for 2020 will see Bonhill offer work
experience and apprenticeships to young people
from disadvantaged backgrounds. We believe that
everybody should enjoy equal opportunity and hope
that this programme will help give these young people
the platform and experience that they deserve.
Group age
1
2
11
12
10
9
8
7
6
3
5
4
Group gender
3
4
1
2
Group ethnicity
1
6
5
4
3
2
1. 16-19
2. 20-24
3. 25-29
4. 30-34
5. 35-39
6. 40-44
7. 45-49
8. 50-54
9. 55-60
10. 60-64
11. 65+
2
12
31
18
22
21
16
16
9
2
0
12. Not specified 16
1. Male
2. Female
3. Other
76
76
1
4. Not specified 12
1. White
109
2. Black/African 12
3. Asian
11
4. Mixed/Multiple 6
5. Other
Ethnic Group
6
6. Not specified 21
2019 Annual Report & Financial StatementsStrategic ReportGovernanceFinancial Statements 30
Bonhill Group plc
Principal risks and uncertainties
MANAGING RISKS RESPONSIBLY
MANAGING OUR RISKS
EFFECTIVELY
Our approach to risk and
risk management
The Board has overall responsibility for ensuring
that there is a robust assessment of the principal
risks facing the Group. The Audit Committee,
which has delegated responsibility for reviewing
the effectiveness of the Group’s risk management
processes, reviews the risk management processes
for the business, reviewing presentations from
management and challenging their analyses.
Executive Directors and other senior management
are responsible for the implementation of risk
management and internal control systems.
They maintain, review and regularly update
a risk register to assist in this process.
Given that some risks are external and not
fully within our control, the risk management
processes are designed to manage risks
which may have a material impact on our
business, rather than to fully mitigate all risks.
Ensuring robust
assessment of risks
BOARD OF DIRECTORS
Reviewing the
effectiveness of
the processes
Implementation
and management
Risk management
framework
AUDIT COMMITTEE
EXECUTIVE DIRECTORS
IDENTIFY
MEASURE
MANAGE
MONITOR
REPORT
2019 Annual Report & Financial Statements 31
Bonhill Group plc
The Board sets out below the principal risks and
uncertainties that the Directors consider could impact the
business. The Board continually reviews the potential risks
facing the Group and the controls in place to mitigate any
potential adverse impact. The Board also recognises that
the nature and scope of risks can change and that there
may be other risks to which the Group is exposed and
so the list is not intended to be exhaustive.
Directional change
Stable
Decrease
Increase
Risk
1
COVID-19
1 2 3
Economic
environment
1 2 3
Market risk
1 2 3
2
3
4
Link to strategy
1 Building market
leading brands within
its chosen business
communities of Financial
Services, Diversity and
Technology.
2 Developing high value
Business Insight, Events
and Data & Analytics
propositions.
3 Expanding beyond the
UK into large, or fast
growing, international
territories.
Impact
Mitigation
The majority of the Company’s events
scheduled for the first half of the year have
had to be postponed and are intended to
be run as far as possible in the second half
of the year. The present environment makes
any further assumptions more uncertain than
previously. The ability to run large events will
be significantly impacted by continued social
distancing and travel restrictions.
The Group has already started looking at ways to host
virtual events, holding its first large virtual event in May.
Alongside changes to the way the business operates,
costs are being tightly controlled and actions are being
taken to conserve cash.
A slowdown in the Global, US or UK
economies or a prolonged downturn in the
US stock market could adversely impact the
Group's revenue as discretionary revenues
from subscribers, attendees, advertisers,
sponsors and other discretionary spend may
decline.
The Group services three significant, high growth and
global sectors. It is in the process of continuing to
strengthen its brands and improving and broadening
its suite of products and is expanding its presence
overseas into Europe and the Far East. Strategic focus
on developing must-have brands and recurring multi-
year revenue streams.
Customer demand for the Group's products
and services is affected by competition and
the business may not be able to develop
products, services and brands to ensure
that they remain relevant to customers.
The Group has invested in senior management
capabilities to develop innovative products and services
that meet changing customer requirements. The Group
does not have any reliance on specific major clients,
having focused on developing a diverse client base.
Refer to mitigation for Risk 1 for the Group's growth
strategy.
Exchange
rate risk
3
Adverse movements in the UK exchange
rate with the US could erode the value of
net assets held in the US, and the cash
flows arising from our US operations.
Our US business is hedged with dollar denominated
debt, with surplus funds remitted promptly to the
UK. InvestmentNews has naturally hedged costs and
revenues with both denominated in US dollars.
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements
32
Bonhill Group plc
Principal risks and uncertainties continued
Directional change
Stable
Decrease
Increase
Link to strategy
1 Building market
leading brands within
its chosen business
communities of Financial
Services, Diversity and
Technology.
2 Developing high value
Business Insight, Events
and Data & Analytics
propositions.
3 Expanding beyond the
UK into large, or fast
growing, international
territories.
Risk
5
Acquisition risk
1 2
Impact
Mitigation
Acquisitions may not perform as expected
financially, reducing profit contribution
or integration plans may not execute as
expected creating operational instability.
Rigorous acquisition criteria are applied before
proceeding with an acquisition, and thorough due
diligence is undertaken during any transaction. Board
consent is required for every acquisition. Post-
acquisition transition teams and plans will be put in
place and monitoring carried out monthly to assess
against KPIs and give early warning of integration or
finance issues. Any significant migration project costs
will require Board consent.
6
7
8
9
Ineffective change
management
1 2
Change through innovation or acquisition
may not be managed effectively and could
result in unrealised opportunities and poor
and costly project delivery.
Detailed change management plans and project teams
are/will be put in place. Clear KPIs will be established
and regularly monitored.
Specific
country risk
2
Operations expanding into new countries
bring specific risk, through potentially
adverse political, financial or regulatory
changes in the relevant country.
Breach of data
protection
legislation
2
Customer data held for our online titles,
other data held for customers, suppliers and
employees may be inadequately protected
or inappropriately used, in breach of
legislation. This could lead to fines, customer
dissatisfaction and reputational damage.
Target countries for expansion have established and
stable economies and political regimes. The Group's
business is not likely to be subject to a high degree of
regulation. As the Group expands into new countries
it will establish best practice financial and operational
KPIs and monitoring processes. The Group is adopting
best in class Standards of Conduct.
The Group has carried out a full GDPR review assisted
by an accredited GDPR consultancy. No significant
deficiencies have been highlighted and where issues
have been identified a plan has been developed to
bring those issue areas into GDPR compliance.
All staff have undertaken mandatory GDPR training and
certification.
As news systems and platforms are implemented
further reviews are planned.
Technology failure,
data loss and cyber
security
1 2
Prolonged loss of critical systems could
inhibit the ability to deliver websites, publish
magazines and/or hold events potentially
leading to lost revenue/increased costs,
regulatory fines and/or adversely affecting
the Group's reputation.
Current platforms have been reviewed by specialists in
their field. A new technology platform for the Group is
in the process of being implemented, which will provide
a best in class technology solution including up-to-date
integrity and security protection.
2019 Annual Report & Financial Statements
33
Bonhill Group plc
Risk
10
11
12
13
14
15
Impact
Mitigation
Recruitment
and retention
of key staff
1 2 3
Increased competition or acquisition
integration issues may result in the inability
to retain, attract and recruit key members
of staff.
The Remuneration Committee implemented a
management incentive strategy to incentivise key
members of staff to drive performance and aid
retention. New recruitment, employee training and
compensation & benefits guidelines, KPIs and
procedures have been implemented.
Major incident
1 2
Major incidents could cause harm and injury
to people and venues and premises and/or
severely interrupt business. If the Group's
response is not adequate, this could cause
reputational damage.
The Group has a comprehensive crisis management
policy as well as localised plans for live events which
include comprehensive risk assessments. The Group
maintains comprehensive, up to date, insurance.
Regulatory change
1 2
The Group is at risk of any regulatory change
which affects the financial services industry.
Governance risk
1 2
As a Plc we could potentially fail to adhere
to best practice in the Audit, Remuneration
and Nomination Committees. This could
lead to a lack of confidence by the investing
institutions which impacts the share price.
The Group regularly monitors upcoming regulation
changes, and the Group continues to move away from
advertising revenue which will continue to suffer from
increased regulation, to the creation of owned product
or data sets.
The Group ensures that there is effective use of
committee structures and external advice is obtained
as requested.
Environmental,
Social and
Governance (ESG)
1 2
As a key supporter of ESG initiatives and
in particular diversity in the workplace,
the Group needs to ensure we uphold the
highest standards.
The Group has effective values and a code of
conduct and it constantly monitors its adherences
to the highest standards.
Climate change
1 2
An increasing regulatory focus on
carbon footprint may reduce the ability
of participants to travel to events, thereby
reducing events revenues.
The Group has invested in its IT infrastructure and
is increasingly moving its products to an online
environment. The use of virtual events is already being
explored as a result of COVID-19 and this will also help
mitigate climate change risk.
Strategic ReportGovernanceFinancial Statements2019 Annual Report & Financial Statements 34
Bonhill Group plc
Board of Directors
CAPABILITY, DELIVERY
AND SECTOR EXPERIENCE
DAVID BROWN
GROUP FINANCE DIRECTOR
David joined Bonhill Group in May 2018 as
the Group Finance Director. David originally
qualified as a chartered accountant with
KPMG before joining Greene King plc in
1998. At Greene King plc he held a number
of senior executive roles focusing on
finance and acquisitions including Interim
Group Finance Director between February
and October 2014 and then subsequently
Corporate Finance Director.
Most recently he was Chief Financial Officer
of Market Tech Holdings Limited from
March 2016 until its acquisition by LabTech
Investments Limited, a deal which resulted
in the company de-listing in July 2017.
NEIL SACHDEV
NON-EXECUTIVE CHAIRMAN
SIMON STILWELL
CHIEF EXECUTIVE
Simon was, until 2015, chief executive of
Liberum, the investment bank that he co-
founded in 2007 and grew from a start up
to £55 million of revenue and 170 people in
seven profitable years. Prior to Liberum, he
served as head of sales, small companies,
at Collins Stewart plc and was also a director
at Beeson Gregory Limited.
Simon was commissioned into the
Gloucestershire Regiment in 1992 and
served in a variety of countries and roles
before starting his City career in 1996.
He graduated with a BSc in Geological
Sciences from Durham University.
Neil Sachdev MBE is an experienced
Chairman with a strong track record of
corporate governance, strategy and change
management. He was Chairman of Sirius
Real Estate Limited until December 2017,
Chairman of Martin’s Properties Limited until
December 2018 and Chairman of Market
Tech Holdings Limited until June 2017. Neil
stepped down as a Non-Executive Director of
Intu Properties plc (formerly Capital Shopping
Centres) during 2016 after ten years’ service.
Previously, Neil held the post of Property Director
of J Sainsbury and before that served for 28
years with Tesco, responsible for property and
operations for the entire UK business. He also
holds a number of public sector positions and
was awarded an MBE for his work in relation
to Energy Efficiency & Sustainability in the Retail
sector. Neil is currently the Chair of CakeBox
Holdings plc, and NED at Nuffield Health as
well as Chair of the Advisory Board of Warwick
Business School.
COMMITTEE
A R N
2019 Annual Report & Financial Statements 35
Bonhill Group plc
Board diversity
Board composition
1
3
1. Chairman
2. Executive Directors
3. Non-executive Directors
Gender balance
2
1. Male
2. Female
Length of tenure
1
1
ANNE DONOGHUE
NON-EXECUTIVE DIRECTOR
FRASER GRAY
NON-EXECUTIVE DIRECTOR
Anne Donoghue ACIB spent her career in
Retail Banking, including the Co-operative
Bank and NatWest/RBS; latterly as
International Director at Tesco Personal
Finance, the joint venture between Tesco and
RBS, where Anne was responsible for Tesco’s
retail financial services businesses in Asia,
Central and Eastern Europe, and Ireland.
Anne’s experience includes large-scale
operations and change management. At
NatWest Anne was Head of UK Telephony
Operations and this role included operational
lead for the RBS/NatWest IT platform
integration programme.
Since leaving banking Anne has worked for
business newspaper CityAM. and supports
charities and City of London Livery Companies
with events and communications outreach.
Fraser Gray is an ICAS chartered accountant,
licensed insolvency practitioner and accredited
mediator and sits on a number of advisory
boards. He is experienced in a wide variety of
corporate activity supporting SME companies
on growth and strategic matters.
Fraser was a Managing Director at AlixPartners
in London until December 2016 following its
acquisition of Zolfo Cooper Europe in February
2015. Fraser became a founding partner of
Zolfo Cooper Europe in October 2008, which
was set up to acquire Kroll Corporate Advisory
& Restructuring Group where Fraser had
worked since October 1996 and was a partner
and leader of the Scottish practice. Fraser is also
a Non-Executive Director of Maven Income and
Growth VCT 4 PLC, Denholm Energy Services
Group Ltd and Richard Irvine FM Ltd.
A
R N
A
R
N
1. 3 to 15 years
2. <3 years
Committee key
A Audit Committee
R Remuneration Committee
N Nomination Committee
Chair
Member
2
2
1
2
2
4
1
1
4
GovernanceFinancial Statements2019 Annual Report & Financial Statements 36
Bonhill Group plc
Corporate Governance statement
NEIL SACHDEV
NON-EXECUTIVE
CHAIRMAN
In this section of our Report
we have set out our approach
to governance and provided further
information on how the Board
and its Committees operate.
2020
Annual Report & Financial Statements
10 PRINCIPLES OF
CORPORATE GOVERNANCE
Deliver growth
1. Establish a strategy and business
model which promote long-term
value for shareholders.
2. Seek to understand and meet
shareholder needs and
expectations.
3. Take into account wider
stakeholder and social
responsibilities and their
implications for longer-term
success.
4. Embed effective risk
management, considering
both opportunities and threats,
throughout the organisation.
Maintain a dynamic
management framework
5. Maintain the Board as a well-
functioning, balanced team
led by the Chair.
6. Ensure that between them the
Directors have the necessary
up-to-date experience, skills
and capabilities.
7. Evaluate Board performance
based on clear and relevant
objectives, seeking continuous
improvement.
8. Promote a corporate culture
that is based on ethical values
and behaviours.
9. Maintain governance structures
and processes.
Build trust
10. Communicate how the Company
is governed and is performing
by maintaining a dialogue with
shareholders and other relevant
stakeholders.
2019 Annual Report & Financial Statements 37
Bonhill Group plc
Board effectiveness
The skills and experience of the Board are
set out in their biographical details on pages
34 to 35. The experience and knowledge of
each of the Directors gives them the ability
to constructively challenge strategy and to
scrutinise performance.
Simon Stilwell brings leadership and
experience of substantially growing small
businesses, and David Brown and Fraser
Gray have extensive financial and acquisition
experience. Neil Sachdev, Anne Donoghue
and Fraser Gray bring additional strategic,
commercial, transaction and leadership
experience which will be invaluable as
we pursue the Company’s growth strategy
and continue to transform the Company
and its Group.
A MESSAGE FROM
OUR CHAIRMAN
The Board recognises the importance of
sound corporate governance and has therefore
adopted policies and procedures reflecting the
principles of the UK Corporate Governance
Code that are consistent with the Corporate
Governance Guidelines for Smaller Quoted
Companies published in 2018 by the Quoted
Companies Alliance (the “QCA Code”).
The Board have also agreed
to set up a new committee
to focus on the Company’s
social and environmental
agenda from 2020.
The Audit Committee, Remuneration
Committee and Nomination Committee have
been operating in accordance with their
terms of reference throughout the year and
details of each are outlined in this Report.
The Board have also agreed to set up a new
committee to focus on the Company’s social
and environmental agenda from 2020. This
new Environmental, Social and Governance
Committee will be chaired by the Chairman
and membership will include staff from
various divisions.
The Board continues to review and monitor its
corporate governance and, following its first
internal Board review, recognises that there
remain opportunities for improvement. The
Board have carried out a second review in
2020 to look at progress from the prior review.
Neil Sachdev
Non-executive Chairman
1 May 2020
QCA Code compliance
The Board continues its adoption of and
compliance with the Corporate Governance
Guidelines for Smaller Quoted Companies
published in 2018 by the Quoted Companies
Alliance (the “QCA Code”) and the Company
has continued to be compliant with the
QCA Code since publishing the statement.
The Directors recognise the value and
importance of high standards of corporate
governance and anticipate that the
Company will continue to comply with the
QCA Code. Given the Group’s size and plans
for the future, it will also endeavour to have
regard to the provisions of the UK Corporate
Governance Code as best practice guidance
to the extent appropriate for a company of
its size and nature. Outlined in this report are
the 10 key governance principles as defined
in the QCA Code.
The composition of the Board
The Board is responsible to the shareholders
and sets the Group’s strategy for achieving
long-term success. It is also ultimately
responsible for the management, governance,
controls, risk management, direction and
performance of the Group.
The Board consists of three Non-executive
Directors and two Executive Directors.
Nicola Dowdall resigned in the year and this
was the only change in composition.
The Board considers that Neil Sachdev, Anne
Donoghue and Fraser Gray are independent,
in character and in judgement, and have no
business relationships which impact on their
independence. In making this judgement, the
Board took into account that all hold shares,
but bearing in mind the small percentage
held, the Board determined that Anne and
Fraser have both been independent since
their appointments as Directors.
GovernanceFinancial Statements2019 Annual Report & Financial Statements 38
Bonhill Group plc
Corporate Governance statement continued
Corporate Governance statement continued
HOW THE BOARD OPERATES
Remuneration
Committee
Page 44
Anne
Donoghue
Simon
Stilwell
Neil
Sachdev
BOARD OF
DIRECTORS
Page 34
Audit
Committee
Page 40
Nomination
Committee
Page 42
Fraser
Grey
David Brown
The Board is responsible for
the Group’s strategy and for
its overall management.
The operation of the Board
is documented in a formal
schedule of matters reserved
for its approval, which is
reviewed annually. These
include matters relating to:
The Group’s
strategic aims
and objectives
The structure and
capital of the Group
Financial reporting,
financial controls
and dividend policy
Internal control, risk
and the Group’s
risk appetite
Raising new capital, budgets and
granting of security over material
Group assets
The approval of
significant contracts
and expenditure
Effective
communication with
shareholders
Any changes to
Board membership
or structure
Delegation of authority and establishing
Board Committees and receiving reports
from the Board Committees
Corporate
governance
2019
Annual Report & Financial Statements
39
Bonhill Group plc
BOARD DECISIONS AND
ACTIVITY DURING THE PERIOD
The Board has a schedule of regular
business, financial and operational matters,
and each Board Committee has compiled
a schedule of work, to ensure that all areas
for which the Board has responsibility are
addressed and reviewed during the course
of the year.
The Chairman is responsible for ensuring
that the Directors receive accurate and timely
information and ensures that any feedback
or suggestions for improvement on Board
papers are fed back to management. Minutes
of each meeting are produced and circulated.
Each Director is aware of the right to have
any concerns minuted.
BOARD COMMITTEES
The Board has delegated specific
responsibilities to the Audit, Remuneration
and Nomination Committees, details of which
are set out below. Each Committee reports
back to the Board and has written terms of
reference setting out its duties, authority and
reporting responsibilities. Copies of all the
Committee terms of reference are available on
the Company’s website www.bonhillplc.com
or on request from the Company Secretary.
The terms of reference of each Committee
have already been reviewed by the Board
during the year and it is intended that these
will be kept under continuous review to
ensure they remain appropriate and reflect
any changes in legislation, regulation or best-
practice. Each Committee is comprised of
Non-executive Directors of the Company.
BOARD MEETINGS
The Board met 11 times during the year to
31 December 2019. Non-executive Directors
communicate directly with Executive
Directors and senior management between
formal Board meetings.
Directors are expected to attend all
meetings of the Board, and the Committees
on which they sit, and to devote sufficient
time to the Group’s affairs to enable them
to fulfil their duties as Directors.
In the event that Directors are unable
to attend a meeting, their comments on
papers to be considered at the meeting
will be discussed in advance with the
Chairman so that their contribution can
be included in the wider Board discussion.
The table below shows Directors’
attendance at scheduled Board meetings
during the year.
Neil Sachdev
Neil Sachdev attended all Board
meetings and Committee meetings.
11/11
11/11
Simon Stilwell
Simon Stilwell attended all Board meetings.
He also attended Committee meetings
by invitation.
2/2Nicola Dowdall
Nicola Dowdall resigned on 21 March 2019.
She attended all Board meetings.
11/11
David Brown
David Brown attended all Board meetings.
He also attended Committee meetings
by invitation.
Anne Donoghue
Anne Donoghue attended all Board
meetings and Committee meetings.
11/11
11/11
Fraser Gray
Fraser Gray attended all Board meetings
and Committee meetings.
GovernanceFinancial Statements2019 Annual Report & Financial Statements 40
Bonhill Group plc
Audit Committee report
AUDIT
COMMITTEE
FRASER GRAY
CHAIR
The Audit Committee is chaired by Fraser
Gray, its other members are Anne Donoghue
and Neil Sachdev. Fraser Gray, Neil Sachdev
and Anne Donoghue are independent
Non-executive Directors.
100%
Board attendance
Fraser Gray
Neil Sachdev
Anne Donoghue
5/5
5/5
5/5
2019 Annual Report & Financial Statements
41
Bonhill Group plc
The terms of reference were reviewed by
the Committee during the year and were
deemed to still be appropriate for the
Committee's role and responsibilities.
The Group incurred a high level of
exceptional costs during the year as it
implemented a significant technology
change project and restructured some
of the key functions within the business.
The Committee reviewed and agreed the
composition of the exceptional costs
with the finance team and liaised with
the Group’s auditors during the year
end process.
The going concern assessment has
been particularly difficult this year due
to the increased uncertainty in preparing
financial forecasts as a result of COVID-19.
The Group has made reasonable downside
assumptions to reflect the potential impact
of continued social distancing and travel
restrictions. While material uncertainty
remains around forecasting future events,
the Committee has worked with the finance
team and the Group's auditors to ensure
that the underlying assumptions and
potential mitigating actions are sufficient
to support a going concern approach to
the Group’s accounts.
The Audit Committee is responsible for
reviewing the risk management and internal
control framework and ensuring it operates
effectively. It is considered that there
are adequate controls and segregation
of duties in place and the Committee is
satisfied that the internal control systems in
place are significantly robust and operating
effectively. The risk register was reviewed
and updated to reflect the main risks
presently facing the Group.
A COVID-19 risk has been included this year,
reflecting the significant and material impact
of this specific risk on the Group’s activities.
The Audit Committee is
responsible for reviewing
the risk management and
internal control framework and
ensuring it operates effectively.
The Committee met seven times between
the start of the year and the signing of this
report. The Chair of the Audit Committee
has also met with the external auditors
without Executive Directors or management
present.
The Audit Committee monitors the nature
and extent of non-audit services provided
by the external auditor the BDO LLP
transaction services team were selected as
the reporting accountant on the acquisition
of Last Word Media during the year and
consequently, the non-audit fees to audit
fees are a factor of 1-1 in the year. The
Committee agreed that, this situation was
justifiable and, in addition, agreed that BDO
LLP had adequate safeguards in place to
preserve its independence in both roles.
On an ongoing basis it is expected that
the fees for non-audit services will reduce
significantly. A summary of the remuneration
paid to BDO LLP for audit and non-audit
services appears on page 73.
Having reviewed the auditor’s independence
and performance, the Audit Committee
recommends that BDO LLP be re-appointed.
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Dear Shareholder
The Committee has primary responsibility
for monitoring the quality of internal
controls and ensuring that the financial
performance of the Group is properly
measured and reported. It receives
and reviews reports from the Group’s
management and auditor relating to the
annual accounts and the accounting and
internal control systems in use throughout
the Group. It also advises the Board on
the appointment of the auditor, reviews its
fees and discusses the nature, scope and
results of the audit with the auditor. The
Audit Committee meets at least three times
a year and has unrestricted access to the
Group’s auditor. The Chief Executive and
the Group Finance Director attend the Audit
Committee meetings by invitation to ensure
the Committee is fully informed of material
events within the business.
The Chief Executive and the
Group Finance Director attend
the Audit Committee meetings
by invitation to ensure the
Committee is fully informed
of material events within the
business.
The Board believes that the current
members have sufficient skill, qualifications
and experience to discharge their duties in
accordance with the Committee's terms of
reference and, as a Committee, have the
competence in the sector within which the
Company operates.
The Committee adopted new terms of
reference on 27 June 2018 and given the
size of the organisation, the Committee
decided to also cover risk management
and internal controls and that a risk
register be created.
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2019
Annual Report & Financial Statements
42
Bonhill Group plc
Nomination Committee report
NOMINATION
COMMITTEE
NEIL SACHDEV
CHAIR
The Nomination Committee is chaired by
Neil Sachdev and its other members are
Fraser Gray and Anne Donoghue. Fraser
Gray and Anne Donoghue are independent
Non-executive Directors.
100%
Board attendance
Neil Sachdev
Fraser Gray
Anne Donoghue
1/1
1/1
1/1
2019 Annual Report & Financial Statements Dear Shareholder
The Nomination Committee is responsible
for reviewing the structure, size and
composition (including the skills, knowledge,
experience and diversity) of the Board and
making recommendations to the Board
with regard to any changes. The Committee
considered succession planning, taking into
account the challenges and opportunities
facing the Company and the skills and
expertise needed on the Board in the
future, in addition to the leadership needs
of the organisation, especially following the
acquisition of InvestmentNews.
The Committee adopted new terms of
reference on 27 June 2018 under these
terms of reference, the Committee met
formally once during the year.
Time commitments
All Directors have been advised of the time
required to fulfil the role prior to appointment
and were asked to confirm that they can
make the required commitment before they
were appointed. This requirement is also
included in their letters of appointment.
The Board is satisfied that the Chairman
and each of the Non-executive Directors are
able to devote sufficient time to the Group’s
business. There has been no significant
change in the Chairman’s other time
commitments since his appointment.
Evaluation
No Board evaluation was undertaken
during the period ended 31 December
2019. An internal Board evaluation
will be conducted in 2020 by way of a
questionnaire and interviews. In addition,
the Non-executive Directors met, without
the Chairman present, to evaluate his
performance. The Board was satisfied
that it was well run, whilst acknowledging
areas for improvement as a Board and
as individuals. Part of the questionnaire
asked about the strategic direction of the
Company and the Company Secretary
ensured these items were taken forward
to the agenda for the next Board strategy
day. The Board considers that the use
of external consultants to facilitate the
Board evaluation process is likely to be of
significant benefit to the process, and this
is planned to take place every three years,
with the first such external evaluation to
take place during the year ending
31 December 2021.
Development
The Company Secretary ensures that all
Directors are kept abreast of changes in
relevant legislation and regulations, with
the assistance of the Company’s advisers
where appropriate, and it is a standing
item on the Board’s agenda. Executive
Directors are subject to the Company’s
performance development review process
through which their performance against
predetermined objectives is reviewed
and their personal and professional
development needs considered. Non-
executive Directors are encouraged to
raise any personal development or
training needs with the Chairman.
External appointments
In the appropriate circumstances, the
Board may authorise Executive Directors
to take non-executive positions in other
companies and organisations, provided
the time commitment does not conflict
with the Director’s duties to the Company,
since such appointments should broaden
their experience.
The acceptance of appointment to such
positions is subject to the approval of the
Chairman.
Conflicts of interest
At each meeting the Board considers
Directors’ conflicts of interest. The
Company’s Articles of Association provide
for the Board to authorise any actual or
potential conflicts of interest.
Independent professional advice
Directors have access to independent
professional advice at the Company’s
expense. In addition, they have access to
the advice and services of the Company
Secretary who is responsible for advice on
corporate governance matters to the Board.
Directors’ and officers’ liability
insurance
The Company has purchased Directors’ and
officers’ liability insurance during the period
as allowed by the Company’s Articles.
Election of Directors
In accordance with the provisions of the
Code, Simon Stilwell will submit himself for
re-election at the Annual General Meeting.
Promotion of a corporate culture
that is based on ethical values and
behaviours
The Board monitors and promotes a healthy
corporate culture and has considered how
the culture is consistent with the Company’s
objectives, strategy and business model and
with the description of principal risks and
uncertainties.
The Board has considered and assessed the
culture as being inclusive, transparent and
collaborative with appropriate behaviours.
The Board is satisfied that the Company
has a “speak up” culture and the Directors
have observed this occurring in practice
during the period ended 31 December
2019. The Group has a Code of Conduct,
an Anti-bribery and Corruption policy, a
Modern Slavery Statement and policies
and procedures relating to whistleblowing
stating the Company’s commitment to
conducting its business with honesty
and integrity, its expectation that staff will
maintain high standards, and encouraging
prompt disclosure of any suspected
wrong doing. The terms of reference of
the Audit Committee include reviewing the
adequacy and security of the Company's
arrangements for its employees and
contractors to raise concerns, in confidence,
about possible wrongdoing in financial
reporting or other matters and keeping
under review the Company's procedures for
handling allegations from whistleblowers.
The Directors follow the guidance set out by
Rule 21 of the AIM Rules relating to dealings
by Directors in the Company’s securities
and, to this end, the Company has adopted
an appropriate share dealing code.
Risk management and internal
control
The Board is responsible for determining
the nature and extent of significant risks
that have an impact on the Group’s
operations, and for maintaining a risk
management framework and internal control
system. The Board is responsible for the
management of risk and has carried out
a robust assessment of the principal risks
and uncertainties affecting the Group’s
business, discussed how these affect
operations, performance and solvency and
what mitigating actions, if any, can be taken.
During the year the Audit Chair carried out
a risk workshop to evaluate and understand
all the risks and uncertainties faced by the
business. Further discussion on the principal
risks relating to the Group is detailed at
page 30.
43
Bonhill Group plc
The Board is satisfied that effective risk
management is embedded in the Group’s
business and effective risk management
and related control systems are in place.
The Board has ultimate responsibility for
the Group’s system of internal control and
for reviewing its effectiveness. However,
any such system of internal control can
provide only reasonable, but not absolute,
assurance against material misstatement or
loss. The Board considers that the internal
controls in place are appropriate for the size,
complexity and risk profile of the Group.
The principal elements of the Group’s
internal control system include:
» A schedule of matters reserved for the
Board;
» Close management of the day to day
activities of the Group by the Executive
Directors and other members of senior
management;
» Monthly reports to the Board;
» An organisational structure with defined
levels of responsibility, which promotes
entrepreneurial decision making and rapid
implementation whilst minimising risks;
» A comprehensive annual budgeting
process producing a detailed integrated
profit and loss, balance sheet and cash
flow, which is approved by the Board;
» Detailed monthly reporting of performance
against budget; and
» Central control over key areas such as
capital expenditure authorisation and
banking facilities.
The Group continues to review its system of
internal control to ensure compliance with
best practice, whilst also having regard to
its size and the resources available. The
Board considers that the introduction of an
internal audit function is not appropriate at
this juncture.
Relations with shareholders
The Directors seek to develop their
understanding of the expectations and
motivations of the Company’s shareholders
through effective communication with them.
The Board encourages regular interaction
and communication with both private and
institutional shareholders and responds
to shareholder queries in a timely manner.
The Group maintains communication
with institutional shareholders through
individual meetings with Executive Directors,
particularly following publication of the
Group’s interim and full year results. Private
shareholders are encouraged to attend
the Annual General Meeting at which the
Group’s activities are considered and
questions answered. General information
about the Group is also available on the
Group’s website (www.bonhillplc.com).
This includes an overview of activities of
the Group and details of all recent Group
announcements. Where voting decisions are
not in line with the Company’s expectations,
the Board will engage with those
shareholders to understand and address any
issues. The Company Secretary is the main
point of contact for such matters and the
Chief Executive Officer, CEO, is principally
responsible for such communication. The
Chairman and independent Non-executive
Directors are available to discuss any matter
stakeholders might wish to raise, and the
Chairman and independent Non-executive
Directors will attend meetings with investors
and analysts as required. Investor relations
activity and a review of the share register are
standing items on the Board’s agenda.
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Annual Report & Financial Statements
44
Bonhill Group plc
Remuneration Committee report
REMUNERATION
COMMITTEE
ANNE DONOGHUE
CHAIR
The Remuneration Committee is chaired
by Anne Donoghue; its other members
are Fraser Gray and Neil Sachdev. Fraser
Gray and Anne Donoghue are independent
Non-executive Directors.
100%
Board attendance
Fraser Gray
Neil Sachdev
Anne Donoghue
2/2
2/2
2/2
2019 Annual Report & Financial Statements
Dear Shareholder
Committee terms of reference
The Committee adopted new terms of
reference on 27 June 2018 and under these
terms of reference, the Committee meets at
least twice a year.
The Remuneration Committee has
responsibility for making recommendations
to the Board on the Company’s policy on
the remuneration of the Company’s Chief
Executive, Executive Directors and other
senior employees, and for the determination,
within agreed terms of reference, of specific
remuneration packages for each of the
Executive Directors.
The remuneration and terms and conditions
of appointment of the Non-executive
Directors of the Company is set by the
Chairman and the Executive Directors.
The terms of reference of the Committee
cover such issues as membership and
frequency of meetings, together with the
role of the Company Secretary and the
requirements of notice of, and quorum for,
and the right to attend, meetings, including
the ability of the Committee to invite
non-members to attend meetings of the
Committee, and, if considered appropriate,
the appointment of independent
remuneration consultants.
The duties of the Remuneration Committee
include determining and monitoring policy
on, and setting levels of, remuneration,
contracts of employment, early termination,
performance-related pay and bonuses,
pension arrangements, share incentive
schemes, grants of awards under any
share option scheme adopted by the
Company, reporting and disclosure. The
terms of reference also set out the reporting
responsibilities and the authority of the
Committee to exercise its duties. The
Committee is required to conduct an annual
assessment of its compliance with its terms
of reference and of its effectiveness. The
annual report sets out the remuneration paid
to Directors, including bonus payments and
long-term incentives during the year ending
31 December 2019, on page 75.
Our people
A primary objective of the past year has
been integrating the InvestmentNews,
Bonhill UK, and Last Word Media teams.
All of the UK operations are now in one
location, providing a much-improved
environment for team-working, cross
fertilisation of ideas and efficiencies.
A staff survey was carried out in 2019
with the feedback and findings presented
to the Board and ongoing actions
incorporated within our forward planning.
This ongoing annual survey and report
will continue to inform the Board and
Remuneration Committee.
In addition to setting remuneration for
senior employees, the Remuneration
Committee has responsibility for reviewing
employee benefit structures throughout
the Group. During the year the Committee
undertook a review of staff reward and
benefits across the enlarged Group
to ensure fairness and consistency of
approach where appropriate, taking
account of local jurisdiction. Following the
review, employer pension contributions
were aligned across the UK businesses.
A new role of Group Head of Human
Resources was created in December 2019,
and Suzanne Tomlinson was appointed into
the role, ensuring a focus for the ongoing
creation and dissemination of Group Human
Resources policy.
Executive reward scheme
The reward scheme for the Company is
designed to be performance focused,
whereby management’s objectives are
fully aligned to shareholders’ interests in
achieving growth and shareholder value.
The reward scheme aspires to attract and
retain the highest quality individuals who will
contribute fully to the success of the Group.
The scheme includes salary, bonus and
participation in the share option scheme.
Salaries were reviewed in June 2019. A
bonus scheme offering a maximum bonus
opportunity of up to 150% of salary was
agreed for Executive Directors and senior
management in 2018. Reflecting Company
performance, the threshold performance
targets were not met and no bonus was
payable for the year to 31 December 2019.
Bonus
Share Option Scheme
The Share Option Scheme assists to recruit,
retain and provide incentives to selected
employees and Executive Directors of the
Group whose performance is paramount for
the growth of the Group and for the benefit
of shareholders. No awards were granted to
the Executive Directors in the financial year.
45
Bonhill Group plc
To date, senior employees have received
two types of awards under the scheme:
» Market value options, up to the
limits permitted under the Enterprise
Management Scheme rules. These
options are subject to a total shareholder
return performance condition. No vesting
is permitted for total shareholder return
of less than 7% per annum over the
performance period.
» A Value Creation Plan, under which
participants receive unapproved share
options. The awards will entitle the
individuals as a whole to 10% of total
shareholder returns over the compound
annual hurdle of 10%, as disclosed in last
year’s report.
Vesting under both types of award occurs
50% after three years and 50% after four
years. No retesting of performance is
permitted.
The Remuneration Committee had intended
to restart awards under the Share Option
Scheme in 2020. In view of the impact of
COVID-19 this will not now take place at the
current time and the matter will be reviewed
again in due course.
The Committee has appointed FIT
Remuneration Consultants LLP (“FIT”)
to provide independent advice to the
Remuneration Committee and to assist
the Committee in reviewing the operation
of the scheme. FIT is a member of the
Remuneration Consultants Group and a
signatory to its Code of Conduct. FIT has no
connection to the Group that could impair
its independence.
Details of Directors’ interests in share
options are presented at note 7 to the
financial statements.
Directors’ remuneration in the year
to 31 December 2019
Details of Executive Directors’ and
Non-executive Directors’ emoluments
in the year are presented at note 7 to
the financial statements. No Director
participated in any discussion or decision
on their own remuneration.
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Annual Report & Financial Statements
46
Bonhill Group plc
Directors’ report
The Directors submit their report and the audited financial statements of Bonhill Group Plc for the year ended 31 December 2019.
Results and dividends
The results for the year are set out on page 53. The Directors do not recommend the payment of a dividend.
Future developments
Future developments of the Group are disclosed in the strategic report on pages 2 to 21.
Financial risk management
Financial risks are considered and disclosed in note 2 on page 67 onwards.
Directors
The following Directors have held office since 1 January 2019:
Neil Sachdev, Non-executive Chairman
Anne Donoghue, Non-executive Director
Fraser Gray, Non-executive Director
Simon Stilwell, Chief Executive
David Brown, Group Finance Director
Nicola Dowdall, Managing Director of Events and Marketing
(resigned 21 March 2019)
Capital structure
Refer to note 15 of the accounts for details on the capital structure of the Company.
Directors’ interests in ordinary shares
Interests of Directors who held office as at 31 December 2019 in the ordinary shares of the Company were as follows:
N Sachdev
A Donoghue
F Gray
S Stilwell
D Brown
As at 31 December 2019
Ordinary shares of 1p each
Number
As at 31 December 2018
Ordinary shares of 1p each
Number
48,810
4,534
20,068
720,973
983,973
25,000
4,534
13,902
562,500
375,000
Employees
The Group recognises the importance of its employees and encourages internal communications with all staff. The Group has regular updates
to advise employees regarding the Group’s objectives and performance. The Group operates an open-door policy to encourage all staff to discuss
with management any concerns they may have relating to the business.
Corporate Governance
The Corporate Governance statement is set out on page 37.
Directors’ and officers’ liability insurance
The Company maintains liability insurance covering the Directors and officers of the Company.
Statement as to disclosure of information to the auditor
So far as the Directors are aware, there is no relevant audit information of which the Company’s auditor is unaware, and 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 to establish that the
Company’s auditor is aware of that information.
Auditor
The auditor, BDO LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
On behalf of the Board
Simon Stilwell
Chief Executive
1 May 2020
2019 Annual Report & Financial Statements
Directors’ responsibilities in the preparation of the financial statements
47
Bonhill Group plc
The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare
the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European
Union. 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 Company and of the profit or loss of the Group and Company for that period. The Directors are also required
to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.
In preparing these financial statements, the Directors are required to:
» select suitable accounting policies and then apply them consistently;
» make judgements and accounting estimates that are reasonable and prudent;
» state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures
disclosed and explained in the financial statements;
» prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements
comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements
are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination
of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the
responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
GovernanceFinancial Statements2019 Annual Report & Financial Statements 48
Bonhill Group plc
Independent auditor’s report to the members of Bonhill Group plc
Opinion
We have audited the financial statements of
Bonhill Group Plc (the ‘Parent Company’)
and its subsidiaries (the ‘Group’) for the year
ended 31 December 2019 which comprise
the consolidated statement of comprehensive
income, consolidated statement of financial
position, company statement of financial
position, consolidated statement of changes
in equity, company statement of changes
in equity, consolidated statement of cash
flows, company statement of cash flows and
notes to the financial statements, including a
summary of significant accounting policies.
The financial reporting framework that
has been applied in the preparation of the
financial statements is applicable law and
International Financial Reporting Standards
(IFRSs) as adopted by the European Union
and, as regards the Parent Company financial
statements, as applied in accordance with the
provisions of the Companies Act 2006.
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
31 December 2019 and of the Group’s
loss for the year then ended;
» the Group financial statements have been
properly prepared in accordance with IFRSs
as adopted by the European Union;
» the Parent Company financial statements
have been properly prepared in accordance
with IFRSs as adopted by the European
Union and as applied in accordance with the
provisions of the Companies Act 2006; 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
under those standards are further described
in the Auditor’s responsibilities for the audit of
the financial statements section of our report.
We are independent of the Group and the
Parent Company in accordance with the ethical
requirements that are relevant to our audit of
the financial statements in the UK, including
the FRC’s Ethical Standard as applied to
listed entities, and we have fulfilled our other
ethical responsibilities in accordance with
these requirements. We believe that the audit
evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going
concern
Material uncertainty related to going
concern
We draw attention to note 1 to the financial
statements which indicates that the Group
may need to raise further funds should the
impact of COVID-19 be worse or more
prolonged than the Directors’ expectations.
As stated in note 1, these events or conditions
indicate that a material uncertainty exists that
may cast significant doubt on the Group’s
and the Company’s ability to continue as a
going concern. Our opinion is not modified
in respect of this matter.
The Group’s ability to continue as a going
concern has been subject to increased audit
scrutiny in light of the potential financial
impact of COVID-19, its potential impact
on the markets as a whole and the Group
in specific as it holds media activities i.e.
holding of events etc. As the full economic
effect on the Group and the overall economic
environment are still uncertain there is a
significant level of judgement involved in
assessing the group’s ability to continue as
a going concern and as such we considered
going concern to be a key audit matter.
Our audit procedures involved:
» Discussing with management their
assessment of the Group’s ability to
continue as a going concern;
» Critically evaluating each revenue stream
projections for the underlying model with
reference to market information, actual
results to 31 March 2020 as well as past
performance of the Group;
» Critically evaluating the related cost
projections underlying the model with
reference to the market information as well
as past performance of the group;
» Verifying the bank statements as at
31 March and 24 April 2020 to corroborate
the actual cash at bank balances to compare
against projected cash on these dates;
» Reviewing the reasonableness of
projected cash flows and working capital
assumptions i.e. revenue, gross margins
and other measures in light of our
knowledge of the business;
» Assessing the impact of COVID-19 on
the cash-flow projections as well as the
assumptions and sensitivities relating to
this. These were challenged with probing
questions and corroborated with supporting
evidence; and
» Assessing management’s plans to
safeguard the Group’s ability to continue as
a going concern including securing future
sources of funding and corroborating to
supporting evidence where available.
Key audit matters
In addition to the matter described in the
material uncertainty related to going concern
section, key audit matters are those matters
that, in our professional judgment, were of
most significance in our audit of the financial
statements of the current period and include
the most significant assessed risks of material
misstatement (whether or not due to fraud)
we identified, 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.
These matters were addressed in the context
of our audit of the financial statements as a
whole, and in forming our opinion thereon,
and we do not provide a separate opinion
on these matters.
2019 Annual Report & Financial Statements 49
Bonhill Group plc
Key audit matter
How we addressed the matter in our audit
Accounting for the acquisition of Last Word
Media UK Limited (“LWM”)
As explained in note 20 and note 1, relating to
accounting policy on consolidation and subsidiaries
of the financial statements, the Group completed its
acquisition of LWM on 10 April 2019.
In line with the accounting standards, acquired assets
and liabilities are required to be measured at their fair
value on the date of acquisition. Acquired intangible
assets are required to be identified and measured at
fair value irrespective of whether the asset had been
recognised prior to acquisition.
Given the level of judgement involved in assessing the
fair value of the assets and liabilities acquired, we have
identified the acquisition accounting surrounding this
transaction as one of the matters of most significance
in the audit of the financial statements of the current
period.
The acquisition of LWM and fair valuation of acquired
intangible assets is also disclosed in the Chairman’s
statement, Chief Executive and Group Finance
Director’s Review. Valuation of acquired intangible
assets is also identified by management as a key
source of estimation uncertainty in note 1.
Impairment of Goodwill, intangible assets and
investments
Accounting standards require annual impairment tests
to be conducted for goodwill and other indefinite
life intangible assets or if indications of impairment
are identified. Note 1 Intangible assets explains that
management is required to calculate the recoverable
amount of each cash generating unit (CGU) and
compare this total to the carrying value of the identified
CGUs to determine if impairment exists.
Determining if an impairment charge is required for
Goodwill and Intangible assets involves significant
judgements about the future results and cash flows
of the business, including but not limited to forecast
growth in future revenues and operating profit margins,
as well as the discount factor and long term growth rate.
Management have assessed that there is no
requirement to impair any of the identified CGUs
during the year. In making this assessment
management have utilised the key judgements
as described in note 11.
Due to the high level of judgement involved in
the impairment calculation there exists a risk that
inappropriate assumptions might be utilised in the
calculation of the recoverable amount of the CGUs.
Our audit procedures included assessing the appropriateness of the
accounting treatment adopted and challenging the directors’ assessment
of the fair value of the assets acquired and liabilities assumed with reference
to a Purchase price allocation (“PPA”) provided by management.
We used our own valuation specialists to evaluate and conclude on the
results of management’s procedures and PPA to determine the fair value
of the intangible assets acquired. This included:
» Evaluating the completeness and existence of intangible assets
recognised by tracing to purchase agreement and consulting with
specialists;
» Assessment of the valuation methodologies applied;
» Assessment of the key assumptions made by management, such
as discount rates and growth rates compared to our independently
calculated range;
» Benchmarking the assumptions used with other transactions in the
sector; and
» Performing sensitivity analysis to understand the extent to which changes
in key assumptions i.e. discount rate and growth rates etc. may give rise
to a materially different valuation for the intangible asset.
» Assessing the sufficiency of the disclosures relating to the acquisition
taking into account the requirements of the accounting standards and
testing the completeness and accuracy of the disclosures.
Key observations noted
We found that the judgements and estimates made by management were
reasonable and the acquisition accounting treatment and disclosures were
reasonable and in line with the requirements of the accounting standards.
We considered whether management’s impairment review methodology is
compliant with IAS 36 Impairment of Assets. We challenged management’s
assumptions used in the impairment assessment for goodwill and
other intangible assets. Our audit work on the assumptions used in the
impairment model focused on:
» Consideration as to whether the model complied with the provisions of
IAS 36 and appropriate to the Group’s situation;
» Agreed the projections underlying the model to the board approved
budget;
» Compared current year performance against prior year budgets to assess
the accuracy of the budgeting process;
» Considering the appropriateness of the CGUs identified by management
and the allocation of assets to these;
» Testing a sample of corporate costs allocations to specific CGUs;
» With reference to independent support calculated an appropriate range of
discount factors i.e. calculated a range of discount rates using the Capital
asset pricing model and independent inputs;
» Tested long term growth rates against independent market data; and
» Conducted a range of sensitivity tests on discount rate, revenue growth
as well as the expenditure to assess the sensitivity of the model to
changes in the underlying assumptions.
Key observations noted
We found that the assumptions used in the impairment model were
reasonable and concur with management’s view that there are no indicators
of impairment at the balance sheet date.
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Annual Report & Financial Statements
50
Bonhill Group plc
Independent auditor’s report to the members of Bonhill Group plc continued
Key audit matter
Revenue recognition
The group’s revenue recognition policy can be found
in note 1 to the financial statements.
Several revenue streams exist across the group
involving different timings and recognition entailing
a degree of complexity. We consider a significant risk
of material misstatement to arise from the recognition
of revenue throughout the year or that the revenue is
recognised in the incorrect accounting period.
Therefore the key audit matter is the existence of
revenue throughout the year and cut off around the
year end.
Classification of exceptional items (“adjusting
items”) of £5 million (31 December 2018: £2.6
million)
The Group’s accounting policy (as set out in note 1)
is to report items of income and expense as adjusting
items where they related to an event which falls
outside of the ordinary activities of the business and
where individually or in aggregate they have a material
impact on the financial statements.
In 2019 these items principally relate to integration
projects, restructuring of the Group’s operations,
acquisition of LWM and impairment of acquired
Intangibles.
The identification of adjusting items and their
presentation on financial statements presents a risk in
order to determine whether costs are in line with policy
and are consistently applied year-on year.
Due to the judgement involved in assessing what
represents an exceptional cost there exists a risk
that results may be artificially distorted through the
inappropriate classification of costs as exceptional.
How we addressed the matter in our audit
A summary of procedures performed to address the risk include:
» For a sample of subscription revenue, our testing included inspection of
the subscription forms where available, proof of payments, confirmation
of subscription date and recalculation of the deferred element of the
subscription.
» For all other revenue streams, revenue recognition was tested by tracing
a sample to receipts and other corroborative evidence i.e. proof of event
etc. supporting the recognition thereof. We confirmed that the appropriate
trigger event had occurred in order to check that the revenue recognition
criteria had been met.
» The completeness of revenue was corroborated by testing a sample of
deferred income and deferred events costs to check that the invoice
or payment related to an event in 2020 and was therefore correctly
accounted for as deferred.
» Reviewed a sample of sales invoices raised before and after year end to
check that these were accounted for in the correct period and accrued
for appropriately.
Key observations noted
Based on the procedures undertaken we did not find any evidence to
suggest that revenue has not been recognised appropriately.
A summary of procedures performed to address the risk include:
» Considering whether the Group’s accounting policy for adjusting items is
consistent with the accounting standards;
» Testing the classification of selected adjusting items to underlying
supporting information such as third party contracts and invoices
etc. to confirm the nature of the item and whether it represents an
exceptional cost;
» Considering whether the policy for adjusting Items has been applied
consistently between periods by comparing both the policy and the
nature of these items in the two years ended 31 December 2019 and on
the basis of our understanding of the results gained throughout the audit
process;
» Assessed whether the adjusted Items in the financial statements are
clearly and accurately explained and that a reconciliation to IFRS financial
information is presented; and
» Challenging management on the inclusion of items with a higher degree
of judgement categorised as exceptional costs and corroborating the
appropriateness of their responses with supporting information.
Key observations noted
Based on the work undertaken we found that exceptional items have been
appropriately classified.
2019
Annual Report & Financial Statements
51
Bonhill Group plc
Our application of materiality
We apply the concept of materiality in planning and performing our audit and evaluating the effect of misstatement. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the
basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality, performance
materiality, to determine the extent of testing needed. Importantly, misstatement below these levels will not necessarily be evaluated as immaterial
as we also take account of the nature of the identified misstatements, and the particular circumstances of their occurrence when evaluating their
effect on the financial statements as a whole.
We agreed with the audit committee that we would report to the committee all individual audit differences identified during the course of our Group
audit in excess of £15,000 (2018: £5,000). We also agreed to report differences below these thresholds that, in our view, warranted reporting on
qualitative grounds.
Group Overall Materiality
£307,000 (2018: £100,000)
Group Performance Materiality
£230,250 (2018: £75,000)
Basis for Determining (Group and Parent)
Group – 1.25% of Group revenue (2018: 1.25% of revenue)
Rationale for benchmark applied
(Group and Parent)
Parent – 40% of Group Overall Materiality (2018: 75% of Group Overall Materiality)
Group – In order to arrive at this judgement, we considered the financial
measures which we believed to be most relevant to the users of the financial
statements in assessing the performance of the Group and revenue was
considered the most appropriate metric.
Parent – The Company is not generating any revenues and is primarily a holding
company for its subsidiaries and we have therefore used a percentage of the
Group allocated materiality for our audit work.
Parent Company Overall Materiality
£122,800 (2018: £100,000)
Parent Company Performance Materiality
£92,100 (2018: £75,000)
Performance materiality was set at 75% (2018 – 75%) of the above materiality figures. 75% is based on our assessment of overall control environment.
Component materiality
Component materiality is established when performing audits on complete financial information of subsidiaries within the Group, where the
subsidiary is considered significant to the Group.
We determined component materiality as follows:
Range of component materiality
40% to 70% of Group materiality
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control and
assessing the risks of material misstatement in the financial statements at the Group level.
In determining the scope of our audit we considered the level of work to be performed at each component in order to ensure sufficient assurance
was gained to allow us to express an opinion on the financial statements of the Group as a whole. We tailored the extent of the work to be
performed by us at each component based on our assessment of the risk of material misstatement at each component. We identified nine
centrally controlled components, of which three significant components, have been audited for Group reporting purposes. All the significant
components were audited by us.
For the remaining six components not considered significant, three were in-scope for statutory audits performed by us and review procedures were
performed by us on the remaining three components.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual report, other than
the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Financial Statements2019 Annual Report & Financial Statements 52
Bonhill Group plc
Independent auditor’s report to the members of Bonhill Group plc continued
Other information continued
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
» the information given in the strategic report and the Directors’ report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
» the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit,
we have not identified material misstatements in the strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us 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 are not in agreement with the accounting records and returns; or
» certain disclosures of Directors’ remuneration specified by law are not made; or
» we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities in the preparation of the financial statements set out on page 47, the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control
as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the 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 the Directors
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 for the audit of the financial statements
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 to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a 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 the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Andrew Viner
(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
1 May 2020
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
2019 Annual Report & Financial Statements Consolidated statement of comprehensive income
for the year ended 31 December 2019
53
Bonhill Group plc
Revenue
Net operating expenses
Impairment relating to expected
credit losses
Depreciation
Amortisation and impairment
Net operating profit/(loss)
Finance costs
Profit/(loss) before tax
Tax
Profit/(loss) for the period
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on translating
foreign operations
Total comprehensive income/(loss)
for the year
Basic loss per share attributable
to the owners of the parent
Diluted loss per share attributable
to the owners of the parent
Notes
3
4
2
12
11
4
8
9
10
10
12 month period ended 31 December 2019
9 month period ended 31 December 2018
Adjusted
results
£’000
24,429
(22,233)
(33)
(104)
(672)
1,387
(491)
896
106
1,002
Adjusting
items
£’000
Statutory
results
£’000
Adjusted
results
£’000
Adjusting
items
£’000
Statutory
results
£’000
–
24,429
7,991
–
7,991
(3,637)
–
–
(1,405)
(5,042)
–
(5,042)
(106)
(5,148)
(25,870)
(33)
(7,149)
(21)
(104)
(2,077)
(3,655)
(491)
(4,146)
–
(4,146)
(20)
(135)
666
(146)
520
–
520
(2,184)
–
–
(456)
(9,333)
(21)
(20)
(591)
(2,640)
(1,974)
–
(2,640)
280
(2,360)
(146)
(2,120)
280
(1,840)
(455)
–
(455)
35
–
35
547
(5,148)
(4,601)
555
(2,360)
(1,805)
2.24p
(9.28p)
2.69p
(9.28p)
(9.51p)
(9.51p)
The results above are derived from continued operations. The notes on pages 61 to 90 form an integral part of these financial statements.
Financial Statements2019 Annual Report & Financial Statements
54
Bonhill Group plc
Consolidated statement of financial position
as at 31 December 2019
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Deferred tax asset
Right-of-use asset
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Non-current liabilities
Deferred tax liability
Borrowings
Lease financial liability
Current liabilities
Trade and other payables
Borrowings
Lease financial liability
Current tax liability
Total liabilities
Net assets
Equity
Share capital
Share premium account
Share-based payment reserve
Merger reserve
Other reserves
Retained earnings
Foreign exchange reserve
Total equity attributable to owners of the parent
The notes on pages 61 to 90 form an integral part of these financial statements.
31 December
2019
£’000
Notes
31 December
2018
(as restated)
£’000
11
11
12
9
19
14
9
18
19
17
18
19
9
15
15
16
17,109
10,392
343
459
1,493
29,796
8,070
1,891
9,961
11,509
9,461
125
333
968
22,396
5,278
4,367
9,645
39,757
32,041
(464)
(1,046)
(712)
(2,222)
(5,265)
(1,568)
(888)
(23)
(7,744)
–
(2,701)
(733)
(3,434)
(3,724)
(1,622)
(285)
(73)
(5,704)
(9,966)
(9,138)
29,791
22,903
486
–
217
1,976
104
27,429
(421)
29,791
343
26,715
68
–
4,086
(8,343)
34
22,903
The financial statements on pages 53 to 59 were approved and authorised to issue by the Board and signed on its behalf on 1 May 2020.
2019 Annual Report & Financial Statements Company statement of financial position
as at 31 December 2019
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Deferred tax asset
Right-of-use asset
Investment in subsidiaries
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Lease finance liability
Total liabilities
Net assets
Equity
Share capital
Share premium account
Share-based payment reserve
Merger reserve
Other reserves
Retained earnings
Total equity attributable to owners of the parent
55
Bonhill Group plc
31 December
2019
£’000
31 December
2018
£’000
Notes
11
11
12
9
13
14
17
15
15
16
–
825
159
85
261
26,445
27,775
3,026
290
3,316
108
300
93
85
–
17,949
18,535
1,196
2,905
4,101
31,091
22,636
(3,724)
(260)
(3,984)
(2,726)
–
(2,726)
(3,984)
(2,726)
27,107
19,910
486
–
217
1,976
104
24,324
27,107
343
26,715
68
–
4,086
(11,302)
19,910
The financial statements consolidate the accounts of Bonhill Group plc and all of its subsidiary undertakings (‘subsidiaries’). Intra-group sales and
profits are eliminated fully on consolidation. The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to
present the Company statement of comprehensive income. The loss for the parent Company for the year was £4.292 million (31 December 2018:
£2.613 million).
The notes on pages 61 to 90 form an integral part of these financial statements.
The financial statements on pages 53 to 59 were approved and authorised to issue by the Board and signed on its behalf on 1 May 2020.
Financial Statements2019 Annual Report & Financial Statements
56
Bonhill Group plc
Consolidated statement of changes in equity
for the year ended 31 December 2019
Share
capital
£’000
Share
premium
£’000
Share-
based
payment
reserve
£’000
Merger
reserve
£’000
Other
reserves
£’000
Retained
earnings
£’000
Foreign
exchange
reserve
£’000
Balance as at 31 March 2018
4,025
4,315
118
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
–
–
–
–
–
–
Transactions with owners
in their capacity as owners:
Issue of share capital
Share issue costs
Removal of share option scheme
Share option charge
Foreign currency translations
Cancellation of deferred shares
300
–
–
–
–
(3,982)
23,699
(1,299)
–
–
–
–
Balance as at 31 December 2018
343
26,715
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners
in their capacity as owners:
Issue of share capital
Share issue costs
Share option charge
Dividend paid
Capital reduction
Balance as at 31 December 2019
–
–
–
143
–
–
–
–
486
–
–
–
9,881
(524)
–
–
(36,072)
–
–
–
–
–
–
(118)
68
–
–
68
–
–
–
–
–
149
–
–
217
Total
£’000
1,963
(1,862)
34
(1,828)
23,999
(1,299)
–
68
–
–
–
–
34
34
–
–
–
–
–
–
104
(6,599)
–
–
–
(1,862)
–
(1,862)
–
–
–
–
–
3,982
4,086
–
–
118
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(8,343)
34
22,903
–
–
–
(4,146)
–
(4,146)
–
(455)
(455)
(4,146)
(455)
(4,601)
1,976
–
–
–
–
1,976
–
–
–
–
(3,982)
–
–
–
(136)
40,054
–
–
–
–
–
12,000
(524)
149
(136)
–
104
27,429
(421)
29,791
2019 Annual Report & Financial Statements Company statement of changes in equity
for the year ended 31 December 2019
57
Bonhill Group plc
Share
capital
£’000
Share
premium
£’000
Share-
based
payment
reserve
£’000
Merger
reserve
£’000
Other
reserves
£’000
Retained
earnings
£’000
Foreign
exchange
reserve
£’000
Balance as at 31 March 2018
4,025
4,315
118
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
–
–
–
–
–
–
Transactions with owners
in their capacity as owners:
Issue of share capital
Share issue costs
Removal of share option scheme
Share option charge
Foreign currency translations
Cancellation of deferred shares
300
–
–
–
–
(3,982)
23,699
(1,299)
–
–
–
–
Balance as at 31 December 2018
343
26,715
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners
in their capacity as owners:
Issue of share capital
Share issue costs
Share option charge
Dividend paid
Capital reduction
Balance as at 31 December 2019
–
–
–
143
–
–
–
–
486
–
–
–
9,881
(524)
–
–
(36,072)
–
–
–
–
–
–
(118)
68
–
–
68
–
–
–
–
–
149
–
–
217
–
–
–
–
–
–
–
–
–
–
–
–
–
–
104
(8,807)
–
–
–
(2,613)
–
(2,613)
–
–
–
–
–
3,982
4,086
–
–
–
–
–
118
–
–
–
(11,302)
(4,292)
–
(4,292)
1,976
–
–
–
–
1,976
–
–
–
–
(3,982)
–
–
–
(136)
40,054
104
24,324
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
£’000
(245)
(2,613)
–
(2,613)
23,999
(1,299)
–
68
–
–
19,910
(4,292)
–
(4,292)
12,000
(524)
149
(136)
–
27,107
Financial Statements2019 Annual Report & Financial Statements 58
Bonhill Group plc
Consolidated statement of cash flows
for the year ended 31 December 2019
Cash generated/(used in) operations
Interest paid
Taxation paid
M&A costs
Integration costs
Restructuring costs
Net cash generated from/(used in) operating activities
Investing activities
Purchases of property, plant and equipment
Purchases of intangible assets
Net cash paid for acquisition
Net cash used in investing activities
Financing activities
Proceeds from issue of ordinary shares
Repayment of invoice discounting facility and other borrowings
Lease repayments
Dividends paid
Payment of vendor loan fees
Net cash generated from financing activities
Foreign exchange movement
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
The Group consists of entities with functional currencies of GBP, USD, SGD and HKD.
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
1,225
(345)
(107)
(817)
(1,621)
(1,208)
(2,873)
(257)
(689)
(5,840)
(6,786)
9,484
(1,553)
(583)
(136)
–
7,212
(29)
(2,476)
4,367
1,891
(401)
(129)
–
(1,522)
(252)
–
(2,304)
(90)
(44)
(12,867)
(13,001)
19,247
(449)
–
–
(138)
18,660
8
3,363
1,004
4,367
2019 Annual Report & Financial Statements Company statement of cash flows
for the year ended 31 December 2019
Cash used in operations
Interest paid
Net cash generated from operating activities
Investing activities
Purchases of property, plant and equipment
Purchases of intangible assets
Investment in subsidiaries
Acquisition costs
Net cash used in investing activities
Financing activities
Proceeds from issue of ordinary shares
Repayment of invoice discounting facility and other borrowings
Loans from subsidiaries
Dividends paid
Net cash (used in)/generated from financing activities
Foreign exchange movement
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
59
Bonhill Group plc
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
(1,867)
(3)
(1,870)
(118)
(594)
(6,496)
(2,064)
(9,272)
9,484
(30)
(785)
(136)
8,533
(6)
(2,615)
2,905
290
(3,911)
–
(3,911)
(75)
(35)
(13,059)
(700)
(13,869)
19,247
–
805
–
20,052
–
2,272
633
2,905
Financial Statements2019 Annual Report & Financial Statements 60
Bonhill Group plc
Notes to the cash flow
(a) Reconciliation of loss after tax to cash flows used in operations
Loss after tax
Adjustments for:
Tax
Finance costs
Amortisation and impairment
Depreciation of property, plant and equipment
Share-based payment charge
Other exceptional costs
Operating cash flows before movements in working capital
Movement in receivables
Movement in payables
Cash flows generated/(used) in operations
Group
Company
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
(4,146)
(1,840)
(4,292)
(2,613)
–
491
2,077
104
149
3,637
2,312
213
(1,300)
1,225
(280)
146
591
20
68
2,184
889
(2,520)
1,230
(401)
–
9
206
52
149
2,056
(1,820)
(627)
580
(1,867)
(85)
–
59
17
68
1,101
(1,453)
(378)
(2,080)
(3,911)
(b) Reconciliation of liabilities arising from financing activities
Group – 12 months ended 31 December 2019
31 December
2018
£’000
Cash flows
£’000
Acquisition
£’000
New leases
£’000
Foreign
exchange
movement
£’000
Items reclassified from
non-current to current
during the period
£’000
31 December
2019
£’000
Non-cash changes
Group
Long-term borrowings
Short term borrowings
Lease liabilities
Total liabilities from financing
activities
2,701
1,622
1,018
–
(1,613)
(523)
5,341
(2,136)
–
–
849
849
Group - 9 months ended 31 December 2018
–
–
290
290
(87)
(9)
(34)
(130)
Non-cash changes
(1,568)
1,568
–
1,046
1,568
1,600
–
4,214
31 December
2017
£’000
Cash flows
£’000
Acquisition
£’000
New leases
£’000
Foreign
exchange
movement
£’000
Items reclassified from
non-current to current
during the period
£’000
31 December
2018
£’000
Long-term borrowings
Short-term borrowings
Lease liabilities
Total liabilities from financing
activities
–
–
–
–
–
(400)
(49)
3,371
1,349
1,065
(449)
5,785
–
–
–
–
5
(2)
2
5
Non-cash changes
(675)
675
–
2,701
1,622
1,018
–
5,341
Company
Lease liabilities
Total liabilities from financing
activities
31 December
2018
£’000
Cash flows
£’000
Acquisition
£’000
New leases
£’000
Foreign
exchange
movement
£’000
Items reclassified from
non-current to current
during the period
£’000
31 December
2019
£’000
–
–
(30)
(30)
–
–
290
290
–
–
–
–
260
260
2019 Annual Report & Financial Statements Notes to the financial statements
for the 12 month period ended 31 December 2019
61
Bonhill Group plc
Bonhill Group plc is a public limited company incorporated in the United Kingdom, whose shares are publicly traded on the AIM market.
The Company is registered and domiciled in England and its principal place of business is 1st Floor Fleet House, 59-61 Clerkenwell Road,
London EC1M 5LA
1. Significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently
applied to all periods presented, unless otherwise stated.
The consolidated financial statements are presented in GBP, which is also the Group’s presentational currency.
Amounts are rounded to the nearest thousand, unless otherwise stated.
Basis of accounting
The financial statements of Bonhill Group plc have been prepared in accordance with International Financial Reporting Standards as adopted by
the European Union and IFRIC interpretations (IFRS) and the Companies Act 2006 applicable to companies reporting under IFRS. The financial
statements have been prepared under the historical cost convention.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the
Chairman's statement and the Chief Executive’s review.
The Directors regularly review detailed forecasts of sales, costs and cash flows, and regularly project forwards 12 months ahead or more.
The assumptions underlying the budget are challenged, varied and tested to establish the likelihood of a range of possible outcomes, including
reasonable cash flow sensitivities. The expected figures are carefully monitored against actual outcomes each month and variances are highlighted
and discussed at Board level.
However, the uncertain impact of COVID-19 introduces more risks and uncertainty into this review. To this end a highly sensitised model has been
run which takes into account the post balance sheet fund-raising and the following assumptions:
» While it is currently envisaged that many of the events rescheduled from H1 to H2 will proceed, the model assumes that all of these events
will be cancelled, resulting in a loss of £5 million revenue and £3 million EBITDA
» Despite current encouraging media sales, a 30% decline in media spend compared to last year from 1 April 2020 to 31 December 2020,
and a 15% decline compared to 2019 thereafter has been modelled
» Further cost savings of £0.5 million from US print costs, £1.3 million of further overhead savings, £0.3 million of UK staff furlough costs
Together this model achieves 2020 revenue of £20 million and break-even EBITDA before returning to 2019 levels in 2021.
This sensitised cash flow forecasts demonstrates that the Group will be able to pay its debts as they fall due for the period to at least 30 June
2021. The Directors are, therefore, satisfied that the financial statements should be prepared on the going concern basis.
In the event that the COVID-19 impact is worse than modelled, then further measures would be required to relieve any short-term cash pressures
which may arise. These could include Government backed loans or subsidies from either the UK, the US or both, increased staff furloughs,
increased cost savings and tougher working capital management. Given the lack of certainty that COVID-19 has had on the Group's operations
and the international markets in which it operates, these conditions indicate the existence of a material uncertainty which may cast significant
doubt on the Group's and the Company's ability to continue as a going concern.
Consolidation
The consolidated financial statements present the results of the Company and its subsidiaries (“the Group”) as if they formed a single entity.
Intercompany transactions and balances between Group companies are therefore eliminated in full.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used
by the Group.
The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial
position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date.
The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is
obtained. They are deconsolidated from the date on which control ceases.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination
over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised.
All subsidiaries have an accounting reference date of 31 December 2019. For further details on the acquisition of Last Word Media in the period,
refer to note 20.
Subsidiaries
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power
to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these
elements of control.
Financial Statements2019 Annual Report & Financial Statements 62
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
1. Significant accounting policies continued
Foreign exchange
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate
(their “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are
translated at the rates ruling at the reporting date.
On consolidation, the results of overseas operations are translated into GBP at rates approximating to those ruling when the transactions took
place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the
rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas
operations at actual rate are recognised in other comprehensive income and accumulated in the foreign exchange reserve.
Revenue
Revenue represents the fair value, net of value added tax, of consideration received or receivable, for goods sold and services provided
to customers. There are five income streams recognised within revenue:
Advertising (traditional)
Revenue is recognised when the relevant publication is printed (performance obligation as defined).
Advertising (online)
Revenue is recognised over the period over which the campaign runs i.e. over time.
Subscriptions
Subscription contracts have distinct performance obligations over the period of the subscription. Revenue is therefore recognised evenly
on a time basis over the subscription period.
Event revenues
Event revenue is recognised in the period the events are held.
Research
Revenue is recognised immediately on purchases or in line with a bespoke contract.
In each case, customers may be invoiced in advance of income recognition, in which case the proportion of invoiced income relating
to subsequent periods is included in deferred income.
Where revenue is recognised on an over time basis, an output method is used to determine the revenue recognised. Point in time performance
obligations are determined to be met through either the performance of the agreed service or through online or physical distribution. Where a
contract is for multiple revenue streams, the allocation of transaction price is agreed at point of contract.
The Group has a policy of 30 day payment terms.
For executive management purposes, the business has two reportable segments. Segmental analysis has been performed in note 3.
During the period, no individual customer accounted for more than 10% of the reported revenue.
Share-based payments
The Group issues equity-settled share-based payments to full-time employees. Equity-settled share-based payments are measured at the fair
value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. Fair value is measured by use of the Monte Carlo
model for all share options in issue. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects
of non-transferability, exercise restrictions and behavioural considerations.
Where equity instruments are granted to persons other than employees, the consolidated statement of comprehensive income is charged with
the fair value of goods and services received.
Intangible assets
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the identifiable assets and liabilities
of the acquired subsidiary at the date of acquisition.
Goodwill, with an indefinite useful life, is tested annually for impairment and carried at cost less accumulated impairment losses. Any impairment
charge is recognised in administrative expenses within the statement of comprehensive income in the year in which it occurs. Impairment losses
on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
2019 Annual Report & Financial Statements 63
Bonhill Group plc
1. Significant accounting policies continued
Intangible assets continued
Goodwill prior year adjustment
The deferred tax liability created as part of the InvestmentNews LLC acquisition on 17 August 2018 in relation to the intangible assets of
£2.442 million was incorrectly recognised. Therefore an adjustment has been made to the 2018 balance sheet, which changes both goodwill
and deferred tax liability by £2.442 million. The goodwill number changes from £13.955 million to £11.509 million and the deferred tax liability
changes from £2.423 million to nil. There is an immaterial impact on the income statement, of £0.022 million however this has not been adjusted
as it was felt that this did not impact the reader of the accounts' understanding of the Group’s results.
Publishing rights
In accordance with IAS 38 Intangible assets, publishing rights acquired are capitalised as intangible assets. Amortisation is charged so as to write
off the cost of publishing rights over their estimated useful economic lives, using the straight-line method, on the following bases:
Publishing rights
20 years straight line
Website development costs
Website development costs are accounted for in accordance with IAS 38. Expenditure on internally developed products is capitalised if it can
be demonstrated that:
» it is technically feasible to develop the product for it to be sold
» adequate resources are available to complete the development
» there is an intention to complete and sell the product
» the Group is able to sell the product
» sale of the product will generate future economic benefits, and
» expenditure on the project can be measured reliably.
Capitalised development costs are amortised over the periods the Group expects to benefit from selling the products developed. The amortisation
expense is included within administrative expenses in the consolidated statement of comprehensive income. Website development costs are
amortised over three years.
Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are recognised in the
consolidated statement of comprehensive income as incurred.
Brand
The fair values of identifiable brands are capitalised in accordance with IFRS 3, measured at acquisition fair value. Amortisation is charged over
their estimated useful economic lives, using the straight-line method, on the following bases:
Brands
10 years straight line
Customer relationships
The fair values of identifiable customer relationships are capitalised in accordance with IFRS 3, measured at acquisition fair value. Amortisation
is charged over their estimated useful economic lives, using the straight-line method:
Customer relationships
7 years straight line
Impairment of non-current assets excluding deferred tax assets
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are 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 for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the impairment of intangible assets line in the
consolidated statement of comprehensive income as an expense immediately.
Investments
Investments are stated at cost less any provision for impairment in value.
Property, plant and equipment
Items of property, plant and equipment are stated at cost of acquisition or production cost less accumulated depreciation and impairment
losses. Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method, on the
following bases:
Fixtures, fittings and equipment
3 years straight line
Financial Statements2019 Annual Report & Financial Statements 64
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
1. Significant accounting policies continued
Current and deferred taxation
Current tax is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at the reporting date,
and any adjustments to tax payable in respect of previous years.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profits (‘temporary differences’) and is accounted for using
the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences. Where there are taxable
temporary differences arising on subsidiaries, deferred tax liabilities are recognised except where the Group is able to control the reversal of
temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are generally recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Where there are deductible temporary differences arising on subsidiaries, deferred tax assets are recognised
only where it is probable that they will reverse in the foreseeable future and taxable profits will be available against which the temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based upon
tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or credited to profit or loss, except
when it relates to items charged or credited directly to other comprehensive income, in which case the deferred tax is also dealt with in other
comprehensive income.
Deferred tax liability prior year adjustment
The treatment of potential deferred tax liability created as part of the InvestmentNews acquisition on 17 August 2018 in relation to the intangible
assets of £2.442 million has been revisited, and it is considered that this liability was not required. Therefore an adjustment has been made to the
2018 balance sheet, which changes both goodwill and deferred tax liability by £2.442 million. The goodwill number changes from £13.955 million
to £11.509 million and the deferred tax liability changes from £2.423 million to nil. There is an immaterial impact on the income statement, of
£0.022 million however this has not been adjusted as it was felt that this did not impact the reader of the accounts' understanding of the Group’s
results. There is no impact on net assets.
Leased assets and obligations
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
» leases of low value assets; and
» leases with a term of 12 months or less.
Assets leased for a period of less than a year are not recorded in the statement of financial position. Rental payments are charged directly to profit
or loss on a straight-line basis over the lease term.
Where assets are leased for a period of more than a year, a right-of-use asset and lease liability are recognised on the statement of financial
position. After lease commencement, the right-of-use asset is measured using a cost model at cost less accumulated amortisation. The lease
liability is initially measured at the present value of the lease payments payable over the lease term. The present value of the lease payment is
determined using the discount rate representing the incremental borrowing rate of the Company.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Group’s
incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also includes:
» amounts expected to be payable under any residual value guarantee;
» the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess that option;
» any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.
Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:
» lease payments made at or before commencement of the lease;
» initial direct costs incurred; and
» the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset
(typically leasehold dilapidations).
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are
reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the
remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.
2019 Annual Report & Financial Statements 65
Bonhill Group plc
1. Significant accounting policies continued
Leased assets and obligations continued
When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or
termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term,
which are discounted at the same discount rate that applied on lease commencement. The carrying value of lease liabilities is similarly revised
when the variable element of future lease payments dependent on a rate or index is revised. In both cases an equivalent adjustment is made to
the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term.
Provisions and invoice discounting
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event which it is probable will result in an outflow
of economic benefits that can be reliably estimated. Where the effect of the time value of money is material, the provision is based on the present
value of future outflows, discontinued at the pre-tax discount rate that reflects the risks specific to the liability.
Invoice discounting
Amounts due in respect of invoice discounting are separately disclosed as current liabilities. The Group can use these facilities to draw down
a percentage of the value of certain sales invoices. The management and collection of trade receivables remains with the Group.
Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to which
they relate.
Financial instruments
Financial assets and financial liabilities are recognised on the Group’s statement of financial position when the Group has become party to the
contractual provisions of the instrument.
Trade and other receivables
Trade receivables are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and
subsequently measured at amortised cost using the effective interest method less provision for impairment.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade
receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar ageing. The Group has
determined that trade receivables across different propositions, sectors and countries have similar risk characteristics. The carrying amount of the
asset is reduced through the use of a provision account, and the amount of the loss is recognised in the statement of comprehensive income.
When a trade receivable is uncollectible, it is written off against the provision account for trade receivables. Subsequent recoveries of amounts
previously written off are credited in the statement of comprehensive income.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward looking expected
credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase
in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of
the financial asset, 12 month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased
significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit
impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original
maturities of three months or less, and bank overdrafts.
Trade payables
Trade payables are initially recognised at cost and subsequently measured at amortised cost using the effective interest method. There is no
material variance between book and fair values.
Borrowings
Borrowings are recorded initially at their fair value, net of direct transaction costs, and finance charges are recognised in profit or loss over the term
of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which
ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated
statement of financial position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium
payable on redemption, as well as any interest or coupon payable while the liability is outstanding. Note 18 provides details of the applicable
interest rates. There is no material variance between book and fair values.
Financial Statements2019 Annual Report & Financial Statements 66
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
1. Significant accounting policies continued
Financial instruments continued
Equity instruments
Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial liability or
financial asset.
The Group’s ordinary shares are classified as equity instruments. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Reserve
Share capital
Share premium
Share option reserve
Other reserve
Retained earnings
Merger reserve
Description and purpose
Represents the nominal value of equity shares.
Amount subscribed for share capital in excess of the nominal value.
Represents equity-settled share-based employee remuneration until such
options are exercised.
Represents transactions with equity participants. This reserve includes the
Capital Redemption Reserve as a result of the cancellation of the deferred
shares.
All other net gains and losses and transactions with owners (e.g. dividends)
not recognised elsewhere.
Where the Group has applied merger relief under the UK Companies Act s615.
Judgements and estimates
The Group makes judgements and assumptions concerning the future that impact the application of policies and reported amounts. The resulting
accounting estimates calculated using these judgements and assumptions will, by definition, seldom equal the related actual results but are based
on historical experience and expectations of future events. The judgements and key sources of estimation uncertainty that have a significant effect
on the amounts recognised in the financial statements are discussed below.
Impairment of assets
The Group is required to assess whether goodwill has suffered any impairment loss, based on the recoverable amount of its cash generating units
(“CGUs”). The recoverable amount has been determined based on value in use calculations and these calculations require the use of estimates in
relation to future cash flows and suitable discount rates as disclosed in note 11. Actual outcomes could vary from these estimates. The Directors
will continue to monitor the carrying value of intangible assets and goodwill, in particular through the period impacted by COVID-19.
Non-financial assets including website development costs and publishing rights are subject to impairment reviews based on whether events and
circumstances suggest that their recoverable amount may be less than their carrying value. Recoverable amount is based on the present value
of expected future cash flows which include management assumptions and estimates of future performance.
Deferred tax asset
The Group has recognised a deferred tax asset based on the expectation that taxable profits will be recognised against which the Group can
utilise assessed losses. This is based on the Directors' assessment of carry forward tax losses on an entity by entity basis against future profits
both in respect of the UK and US business.
Expected credit losses
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade
receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar ageing. The Group has
determined that trade receivables across different propositions, sectors and countries have similar risk characteristics.
Share-based payments
Share options are recognised as an expense based on their fair value at date of grant. The fair value of the options is estimated through the use
of a valuation model – which requires inputs such as the risk-free interest rate, expected dividends, expected volatility and the expected option
life – and is expensed over the vesting period. Some of the inputs used to calculate the fair value are not market observable and are based on
estimates derived from available data, such as employee exercise behaviour and employee turnover.
Valuation of acquired intangible assets
Intangible assets acquired in a business combination are required to be recognised separately from goodwill and amortised over their useful life if
they are subject to contractual or legal rights or are separately transferable and their fair value can be reliably estimated. The Group has separately
recognised the intangible assets acquired during the acquisition (see note 20).
The fair value of these acquired intangible assets is based on valuation techniques. The valuation models require input based on assumptions
about the future. Management uses its best knowledge to estimate the fair value of acquired intangible assets as of the acquisition date. The value
of intangible assets is tested for impairment when there is an indication that they might be impaired. Management also make assumptions about
the useful life of the acquired intangible assets which might be affected by external factors.
2019 Annual Report & Financial Statements 67
Bonhill Group plc
2. Financial risk management
As well as short term trade receivables, accrued income, trade payables and accruals, as detailed in the notes that arise directly from operations
the Group’s financial instruments comprise cash, borrowings and payables. The fair values of these instruments are not materially different to their
book values. The objective of holding financial instruments is to raise finance for the Group’s operations and manage related risks. The Group’s
activities expose the Group to a number of risks including interest rate risk, credit risk and liquidity risk. The Group manages these risks by
regularly monitoring the business and providing ongoing forecasts of the impact on the business.
Liquidity risk
The Directors closely monitors the Group’s and Company’s financial position to ensure it has sufficient funds to meet its obligations as they
fall due. The Group finance function produces regular forecasts that estimate the cash inflows and outflows for the next six months, so that
management can ensure that sufficient financing is in place as it is required.
Maturity analysis
The table below analyses the Group’s and the Company’s financial liabilities based on the contractual gross undiscounted cash flows for amounts
outstanding at the reporting date up to maturity date:
Maturity analysis at 31 December 2019
Group
Borrowings
Lease financial liability
Trade and other payables
Total liabilities
Company
Borrowings
Lease financial liability
Trade and other payables
Total liabilities
Maturity analysis at 31 December 2018
Group
Borrowings
Lease financial liability
Trade and other payables
Total liabilities
Company
Borrowings
Lease financial liability
Trade and other payables
Total liabilities
Less than
6 months
£’000
Between
6 months
and 1 year
£’000
Between
1 year and
5 years
£’000
875
484
5,265
6,624
–
94
3,724
3,818
845
450
–
1,295
–
94
–
94
1,077
729
–
1,806
–
78
–
78
Less than
6 months
£’000
Between
6 months
and 1 year
£’000
Between
1 year and
5 years
£’000
967
160
2,061
3,188
–
–
2,520
2,520
940
160
–
1,100
–
–
–
–
2,891
772
–
3,663
–
–
–
–
Total
£’000
2,797
1,663
5,265
9,725
–
266
3,724
3,990
Total
£’000
4,798
1,092
2,061
7,951
–
–
2,520
2,520
Trade and other payables consist of trade payables, other payables, accruals and amounts owed to subsidiary undertakings as shown in note 17.
The Group and Company would normally expect that sufficient cash is generated in the operating cycle to meet the contractual cash flows as
disclosed above through effective cash management.
Financial Statements2019 Annual Report & Financial Statements 68
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
2. Financial risk management continued
Interest rate risk
The Group’s interest rate exposure arises mainly from its interest-bearing borrowings. Contractual agreements entered into at floating rates expose
the Group to cash flow risk, while fixed-rate borrowings expose the Group to fair value risk. The Group regularly reviews its funding arrangements
to ensure they are competitive with the marketplace.
The table below shows the Group’s and Company’s financial assets and liabilities split by those bearing fixed and floating rates and those that are
non-interest bearing:
31 December 2019
Group
Cash and cash equivalents
Trade and other receivables
Total financial assets
Trade and other payables
Borrowings
Lease financial liability
Total liabilities at amortised cost
31 December 2019
Company
Cash and cash equivalents
Trade and other receivables
Total financial assets
Trade and other payables
Borrowings
Lease financial liability
Total liabilities at amortised cost
31 December 2018
Group
Cash and cash equivalents
Trade and other receivables
Total financial assets
Trade and other payables
Borrowings
Lease financial liability
Total liabilities at amortised cost
Fixed
rate
£’000
Floating
rate
£’000
Non-interest
bearing
£’000
–
–
–
–
(2,614)
(1,600)
(4,214)
Fixed
rate
£’000
–
–
–
–
–
(260)
(260)
Fixed
rate
£’000
–
–
–
–
(4,323)
(1,018)
(5,341)
1,891
–
1,891
–
–
–
–
–
8,070
8,070
(5,265)
–
–
(5,265)
Floating
rate
£’000
Non-interest
bearing
£’000
290
–
290
–
–
–
–
–
3,026
3,026
(3,724)
–
–
(3,724)
Floating
rate
£’000
Non-interest
bearing
£’000
4,367
–
4,367
–
–
–
–
–
4,487
4,487
(2,061)
–
–
(2,061)
Total
asset
£’000
1,891
8,070
9,961
–
–
–
–
Total
asset
£’000
290
3,026
3,316
–
–
–
–
Total
asset
£’000
4,367
4,487
8,854
–
–
–
Total
liability
£’000
–
–
–
(5,265)
(2,614)
(1,600)
(9,479)
Total
liability
£’000
–
–
–
(3,724)
–
(260)
(3,984)
Total
liability
£’000
–
–
–
(2,061)
(4,323)
(1,018)
(7,402)
2019 Annual Report & Financial Statements 69
Bonhill Group plc
2. Financial risk management continued
Interest rate risk continued
31 December 2018
Company
Cash and cash equivalents
Trade and other receivables
Total financial assets
Trade and other payables
Total liabilities at amortised cost
Fixed
rate
£’000
Floating
rate
£’000
Non-interest
bearing
£’000
–
–
–
–
–
2,905
–
2,905
–
–
–
899
899
(2,520)
(2,520)
Total
asset
£’000
2,905
899
3,804
–
–
Total
liability
£’000
–
–
–
(2,520)
(2,520)
Credit risk exposure
Credit risk predominantly arises from trade receivables, cash and cash equivalents and deposits with banks. Credit risk is managed on a Group
basis. External credit checks are obtained for larger customers. In addition, the credit quality of each customer is assessed internally before
accepting any terms of trade. Internal procedures take into account the customer’s financial position, their reputation in the industry and past
trading experience. As a result, the Group’s and Company’s exposure to bad debts is not significant. Cash and cash equivalents are held with
banks with a minimum rating of ‘A’.
Financial assets
Trade and other receivables
Estimated irrecoverable amounts
Group
Company
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
7,736
(160)
7,576
4,614
(127)
4,487
613
(87)
526
931
(32)
899
Movements on the Group and Company’s provision for impairment of trade receivables:
Financial assets
As at start of period
Opening provision on acquisition
Addition to provision
Provision for receivables impairment
As at end of period
Group
Company
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
127
–
33
–
160
11
95
–
21
127
32
–
55
–
87
11
–
–
21
32
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade
receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar ageing. The Group has
determined that trade receivables across different propositions, sectors and countries have similar risk characteristics.
The Group has determined appropriate expected loss rates by considering historical credit losses experienced over a three year period prior to the
period end and adjusting these based on current and forward looking information. The Group have identified political and economic uncertainty in
its key operating countries as the key macroeconomic factors affecting its customers. Moreover, the Group has applied specific knowledge of its
customer base when considering expected loss rates.
Financial Statements2019 Annual Report & Financial Statements
70
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
2. Financial risk management continued
Credit risk exposure continued
As at 31 December 2019, the lifetime expected loss provision for trade receivables is as follows:
Expected loss rate for ‘at risk’ debt
Gross carrying amount
Loss provision
More than
30 days
past due
£’000
3%
2,035
2
More than
60 days
past due
£’000
10%
1,212
9
More than
120 days
past due
£’000
50%
1,343
148
Current
£’000
1%
781
1
Total
£’000
5,371
160
Capital risk management
The Group’s objectives when managing capital (i.e. equity and borrowings) are to safeguard the Group’s ability to continue as a going concern
in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost
of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
Foreign currency risk
The Group’s policy is not to use forward contracts and therefore none were outstanding at the year end (31 December 2018: None). The following
table summarises the Group’s sensitivity to translational currency exposures at 31 December 2019.
2019 currency risks expressed in USD/GBP
Reasonable shift
Impact on profit after tax if USD strengthens against GBP
Impact on profit after tax if USD weakens against GBP
Impact on equity excluding retained earnings if USD strengthens against GBP
Impact on equity excluding retained earnings if USD weakens against GBP
As at period end, the Group’s net exposure to foreign exchange risk was as follows:
£’000
10%
(136)
167
(2,486)
2,036
Net foreign currency financial assets/(liabilities)
GBP
USD
EUR
CAD
AED
NOK
RON
Other
Total net exposure
Functional currency of individual entity
GBP
USD
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
–
260
344
(77)
(47)
(21)
(17)
(1)
441
–
141
236
–
–
–
–
(9)
368
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2019 Annual Report & Financial Statements 71
Bonhill Group plc
3. Segmental analysis
For executive management purposes, the business has three reportable segments being Bonhill UK, InvestmentNews and Last Word Media.
Further analysis of revenue has been performed by core proposition and country.
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
Analysis of revenue by core propositions
Business information
Live events
Data and insight
Total
Analysis of revenue by country
United Kingdom
Europe, Middle East and Africa
North America
Asia Pacific
Total
12 month period ended 31 December 2019
Reportable segmental income statement
Revenue
Adjusted EBITDA
Adjusted operating profit/(loss)
Statutory operating profit/(loss)
Statutory profit/(loss) before tax
9 month period ended 31 December 2018
Reportable segmental income statement
Revenue
Adjusted EBITDA
Adjusted operating loss
Statutory operating loss
Statutory loss before tax
Revenue from contracts with customers
13,564
9,605
1,260
24,429
8,205
1,344
14,337
543
24,429
Last Word Media
£’000
Bonhill UK
£’000
InvestmentNews
£’000
6,710
907
551
66
44
3,822
(1,815)
(2,085)
(4,312)
(4,368)
13,897
3,220
2,921
591
178
Last Word Media
£’000
Bonhill UK
£’000
InvestmentNews
£’000
1,988
(662)
(786)
(2,353)
(2,352)
6,003
1,551
1,452
379
232
5,433
2,080
478
7,991
1,507
264
6,220
7,991
Total
£’000
24,429
2,312
1,387
(3,655)
(4,146)
Total
£’000
7,991
889
666
(1,974)
(2,120)
At beginning of period
Amount included in contract liabilities that was recognised
as revenue during the period
Cash received in advance of performance and not recognised
as revenue during the period
At period end
Contract assets
Contract liabilities
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
–
–
–
–
–
–
–
–
1,508
(1,508)
2,140
2,140
209
(209)
1,508
1,508
Financial Statements2019 Annual Report & Financial Statements 72
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
3. Segmental analysis continued
Segmental assets and liabilities
Bonhill UK
InvestmentNews
Last Word Media
Total Group
Geographical split of total assets
UK
North America
Asia Pacific
Total Group
Asset
2019
£’000
4,187
24,176
11,394
39,757
Liabilities
2019
£’000
(1,731)
(5,149)
(3,086)
(9,966)
Assets
2018
£’000
6,254
25,787
–
32,041
2019
£’000
15,128
24,176
453
39,757
Liabilities
2018
£’000
(1,234)
(7,904)
–
(9,138)
2018
£’000
6,254
25,787
–
32,041
4. Operating loss
(a) Operating loss for the year has been arrived at after charging the following items:
Depreciation of property, plant and equipment
Amortisation of purchased or internally generated intangible assets
Lease amortisation
Share-based payment charge
Foreign exchange (gain) or loss
Operating lease rentals in respect of land and buildings
Staff costs
Directors’ remuneration
Events costs
Print related costs
Impairment relating to expected credit losses
Other costs
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
Note
6
7
104
79
593
149
54
73
10,698
516
4,853
1,420
33
4,470
23,042
21
37
98
68
(149)
6
3,192
385
930
832
21
1,885
7,326
Other costs include: freelance and contractors, print magazine costs, distribution costs, technology costs, travel and expenditure, marketing and
professional fees.
2019 Annual Report & Financial Statements 73
Bonhill Group plc
4. Operating loss continued
(b) During the year, the following services were obtained from the Group’s auditor as detailed below:
Audit services
– Recurring fees payable to Company auditor for the audit of parent Company and consolidated accounts
– Additional fees payable in relation to non-recurring audit work
Other services
Fees payable to the Company’s auditor and its associates for other services:
– The audit of Company’s subsidiaries
– Corporate finance transaction support in relation to acquisition of InvestmentNews
– Tax work performed in relation to acquisition of InvestmentNews
– Corporate finance transaction support in relation to acquisition of Last Word Media
– Tax work performed in relation to acquisition of Last Word Media
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
42
27
72
–
–
102
35
28
36
32
346
82
–
–
The disclosure of the auditor’s remuneration stated above relates to the Company’s auditor, BDO LLP, and its associates.
(c) Adjusting items
The Group incurred certain costs in the 12 months ended 31 December 2019 and the 9 month period ended 31 December 2018 which the
Directors believe should be disclosed as adjusting items as set out below. Adjusted results are prepared to provide additional relevant information
on our future or past performance where equivalent information cannot be presented using financial measures under IFRS.
Restructuring
M&A costs (including legal fees)
Integration costs
Amortisation of intangibles acquired through business combination
Write off of intangible assets
The tax effect of the adjusting items is a credit of £0.038 million.
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
1,208
808
1,621
1,295
110
5,042
–
1,932
252
456
–
2,640
Financial Statements2019 Annual Report & Financial Statements 74
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
5. Reconciliation of Adjusted EBITDA to statutory earnings
Earnings before interest, depreciation and amortisation (“EBITDA”) is a measure of earnings and cash generative capacity. Adjusted EBITDA,
which excludes non-recurring items, is a non-GAAP financial measure which facilitates an understanding of underlying earnings and cash
generative capacity. A reconciliation of Adjusted EBITDA to statutory earnings is set out below.
Adjusted EBITDA
Adjusting items
EBITDA
Depreciation
Amortisation and impairment
Share option charge
Operating loss
Net finance costs
Loss before tax
Taxation
Loss after tax
6. Staff costs
Staff costs (excluding Directors)
– Wages and salaries
– Social security costs
– Share-based payments charge
– Pensions
Average monthly number of persons employed by the Group:
Senior management
Finance and administration
Editorial/design/events
Marketing and sales
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
2,312
(3,637)
(1,325)
(104)
(2,077)
(149)
(3,655)
(491)
(4,146)
–
(4,146)
889
(2,184)
(1,295)
(20)
(591)
(68)
(1,974)
(146)
(2,120)
280
(1,840)
Group
Company
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
9,407
870
149
272
10,698
2,725
372
68
27
3,192
1,531
167
149
30
1,877
1,019
113
68
12
1,212
Group
Company
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
12
13
74
65
164
9
2
35
9
55
7
7
27
7
48
9
2
19
4
34
2019 Annual Report & Financial Statements 75
Bonhill Group plc
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
38
204
–
30
30
50
165
517
104
123
17
19
19
30
73
385
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
516
149
100
32
797
385
68
46
16
515
7. Directors’ remuneration
Emoluments for qualifying services
N Dowdall (resigned 21 March 2019)
S Stilwell
C Riddell (resigned 30 May 2018)
A Donoghue
F Gray
N Sachdev
D Brown (appointed 29 May 2018)
Directors’ remuneration
Share-based payments
Social security costs
Pensions
Total
Share-based payment expense is a non-cash item to adjust for the issue of share options. The Board issues share options to Directors
and senior management as it is in their opinion the most effective way to align them with the interests of the shareholders.
During the period, the Company made pension contributions of £0.032 million on behalf of the Directors (31 December 2018: £0.016 million).
The pension split is shown below. Some Directors had non-zero pension contributions which are rounded down and these are shown as "0"
below. The sum of the unrounded pension contributions rounds to £0.032 million.
N Dowdall (resigned 21 March 2019)
S Stilwell
C Riddell (resigned 30 May 2018)
A Donoghue
F Gray
N Sachdev
D Brown (appointed 29 May 2018)
No share options were exercised during the period (31 December 2019: nil).
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
0
–
–
1
1
–
30
32
1
–
0
0
0
–
14
15
Financial Statements2019 Annual Report & Financial Statements 76
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
7. Directors’ remuneration continued
During the period, Directors of the Group subscribed to 1p ordinary shares as follows:
S Stilwell
D Brown
N Sachdev
F Gray
Number of shares
158,000
608,973
23,810
6,166
Directors’ interests in share options
The interests of the Directors in office during the year in share options of the Company are set out in the table below.
31 December
2019
Number
Granted
Number
Forfeited/
lapsed
Number
31 December
2018
Number
Exercise
price
Pence
156,249
156,249
376,000
376,000
1,064,498
156,249
156,249
268,500
268,500
849,498
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
156,249
156,249
376,000
376,000
1,064,498
156,249
156,249
268,500
268,500
849,498
80.0
80.0
1.0
1.0
80.0
80.0
1.0
1.0
Exercisable period
16/08/2022 to 16/08/2029
16/08/2023 to 16/08/2029
16/08/2022 to 16/08/2023
16/08/2023 to 16/08/2024
16/08/2022 to 16/08/2029
16/08/2023 to 16/08/2029
16/08/2022 to 16/08/2023
16/08/2023 to 16/08/2024
S Stilwell
D Brown
8. Finance costs
Interest payable on bank loan and overdrafts
Interest payable on lease financial liability
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
(431)
(60)
(491)
(131)
(15)
(146)
2019 Annual Report & Financial Statements 77
Bonhill Group plc
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
–
(28)
24
(4)
–
(245)
136
111
–
2
4
–
–
(73)
–
(73)
(86)
109
–
86
244
–
353
280
9. Income tax
UK current tax (charge)/credit
US current tax (charge)/credit
Adjustment in respect of prior periods
Total current tax
Deferred tax on goodwill
Deferred tax on other intangibles
Deferred tax on other temporary differences
Deferred tax on UK losses
Deferred tax on US losses
Adjustment in respect of prior periods
Total deferred tax
Corporation tax on UK profits is calculated at 19.00% (31 December 2018: 19.00%) of the estimated assessable profit for the year. Corporation
tax on US profits is calculated at 23.88% (31 December 2018: 26.10%) of the estimated assessable profit for the year.
The tax charge for the year can be reconciled to the loss before tax per the consolidated statement of comprehensive income as follows:
Factors affecting the tax charge for the year:
Loss before taxation
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
(4,146)
(2,120)
Loss before tax multiplied by the standard rate of corporation tax in the UK of 19.00%
(788)
(403)
Effects of:
Profits taxed at US rate of 23.88% (31 December 2018: 26.1%)
Other expenses not deductible for tax purposes
Adjustments to tax charge in respect of prior years
Capital allowances
Difference in tax rates on deferred tax
Tax losses carried forward
State taxes
Change in valuation allowance/movement in unrecognised deferred tax
Other effects including foreign exchange differences
Total tax charge
(14)
166
207
–
34
–
(28)
433
(10)
–
(20)
147
–
(27)
(66)
106
–
–
(17)
(280)
Financial Statements2019 Annual Report & Financial Statements 78
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
9. Income tax continued
Deferred and current tax assets and liabilities can be reconciled as follows:
Deferred tax assets as at 1 January 2019
Additions dealt with in profit or loss
Effect of foreign exchange revaluation
Deferred tax assets as at 31 December 2019
Deferred tax liabilities as at 1 January 2019 (restated)
Deferred tax liability on acquisition
Additions dealt with in profit or loss
Effect of foreign exchange revaluation
Deferred tax liabilities as at 31 December 2019
Net deferred tax assets/(liabilities)
Current tax liability as at 1 January 2019
Current tax charge
Paid
Acquisition
Effect of foreign exchange revaluation
Current tax liability as at 31 December 2019
Group
£’000
Company
£’000
333
126
–
459
85
–
–
85
£’000
£’000
–
(485)
29
(8)
(464)
(5)
–
–
–
–
–
85
£’000
£’000
(73)
(4)
107
(36)
(17)
(23)
–
–
–
–
–
–
The Group has recognised deferred tax assets in relation to losses to the extent that the Directors anticipate it is probable that taxable profits
will be available in the next three years against which the temporary differences can be utilised. The Group has unrecognised tax losses of
£8.620 million (31 December 2018: £7.139 million).
On 27 March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in the US. This includes certain tax
provisions with retrospective effect. The impact of these provisions is expected to reduce the Company’s current tax liability by approximately
£27 thousand, with an equal and opposite decrease in the Company’s deferred tax asset for carried-forward losses. This impact will be included
in the statutory accounts for subsequent years, where the year-end date falls after the date of enactment.
Prior year adjustment
The treatment of potential deferred tax liability created as part of the InvestmentNews acquisition on 17 August 2018 in relation to the intangible
assets of £2.442 million has been revisited, and it is considered that this liability was not required. Therefore an adjustment has been made to the
2018 balance sheet, which changes both goodwill and deferred tax liability by £2.442 million. The goodwill number changes from £13.955 million
to £11.509 million and the deferred tax liability changes from £2.423 million to nil. There is an immaterial impact on the income statement, of
£0.022 million however this has not been adjusted as it was felt that this did not impact the reader of the accounts' understanding of the Group’s
results. There is no impact on net assets.
10. Earnings per share
(a) Basic earnings per share
Basic loss per share is calculated by dividing the loss attributable to owners of the parent by the weighted average number of ordinary shares
in issue during the year.
Based on statutory earnings
Loss attributable to owners of the parent
Weighted average number of ordinary shares in issue
Basic earnings per share (pence per share)
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
(4,146)
44,671,798
(1,840)
19,355,302
(9.28p)
(9.51p)
2019 Annual Report & Financial Statements 79
Bonhill Group plc
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
1,002
44,671,798
2.24p
520
19,355,302
2.69p
10. Earnings per share continued
(a) Basic earnings per share continued
Based on adjusted earnings
Profit attributable to owners of the parent
Weighted average number of ordinary shares in issue
Basic earnings per share (pence per share)
(b) Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares.
Based on statutory earnings
Loss attributable to owners of the parent
Weighted average number of ordinary shares in issue
Dilutive effect of “in the money” share options
Diluted ordinary shares
Diluted earnings per share (pence per share)
11. Intangible assets
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
(4,146)
44,671,798
–
44,671,798
(9.28p)
(1,840)
19,355,302
–
19,355,302
(9.51p)
Website
development
costs
£'000
Software
£'000
Publishing
rights
£'000
Customer
relationships
£'000
Brand
£'000
Sub-total
£'000
Goodwill
(restated)
£'000
Group
Cost
1 April 2018
Additions (external)
Additions at acquisition
Foreign exchange movement
1 January 2019
Additions (external)
Additions at acquisition
Write off relating to intangible assets
Foreign exchange movement
31 December 2019
Amortisation and impairment
1 April 2018
Amortisation charge for the year
Foreign exchange movement
1 January 2019
Amortisation charge for the year
Additions at acquisition
Write off relating to intangible assets
Foreign exchange movement
31 December 2019
498
44
–
–
542
118
107
–
–
767
425
36
–
461
79
60
–
–
600
18
–
–
–
18
571
–
–
–
589
17
1
–
18
–
–
–
–
18
1,162
–
–
–
1,162
–
–
(11)
–
1,151
673
43
–
716
58
–
(9)
–
765
–
–
3,618
6
3,624
–
1,300
–
(117)
4,807
–
129
2
131
427
–
–
(15)
543
Total
£'000
2,244
44
20,260
39
22,587
689
7,986
(119)
(648)
–
–
5,720
10
5,730
–
526
–
(186)
1,678
44
9,338
16
11,076
689
1,933
(11)
(303)
566
–
10,922
23
11,511
–
6,053
(108)
(345)
6,070
13,384
17,111
30,495
–
284
5
289
810
–
–
(34)
1,065
1,115
493
7
1,615
1,374
60
(9)
(48)
2,992
2
–
–
2
–
–
–
–
2
1,117
493
7
1,617
1,374
60
(9)
(48)
2,994
Financial Statements2019 Annual Report & Financial Statements 80
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
11. Intangible assets continued
Group
Net book value
31 December 2019
31 December 2018
Company
Cost
1 April 2018
Additions (external)
1 January 2019
Additions (external)
Write off relating to intangible assets
31 December 2019
Amortisation and impairment
1 April 2018
Amortisation charge for the year
1 January 2019
Amortisation charge for the year
31 December 2019
Net book value
31 December 2019
31 December 2018
Goodwill
Investor Allstars
Growth Company Investor Ltd
Information Age Media Ltd
InvestmentNews LLC
Last Word Media
Publishing rights
What Investment
Growth Company Investor Ltd
Information Age Media Ltd
Website
development
costs
Software
Publishing
rights
Customer
relationships
Brand
Sub-total
Goodwill
Total
167
81
384
35
419
23
–
442
311
35
346
38
384
58
73
571
–
5
–
5
571
–
576
4
1
5
–
5
571
–
386
446
626
–
626
–
–
626
376
23
399
31
430
196
227
4,263
3,493
5,005
5,441
10,392
9,461
17,109
11,509
27,501
20,970
–
–
–
–
–
–
–
–
–
–
–
–
–
Group
–
–
–
–
–
–
–
–
–
–
–
–
–
1,015
35
1,050
594
–
1,644
691
59
750
69
819
825
300
1,123
35
1,158
594
(108)
1,644
691
59
750
69
819
825
408
108
–
108
–
(108)
–
–
–
–
–
–
–
108
Company
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
–
42
414
10,600
6,053
17,109
108
42
414
10,945
–
11,509
–
–
–
–
–
–
108
–
–
–
–
108
Group
Company
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
196
–
190
386
227
2
217
446
196
–
–
196
227
–
–
227
2019 Annual Report & Financial Statements 81
Bonhill Group plc
11. Intangible assets continued
Brand
InvestmentNews
Last Word Media
Customer relationships
InvestmentNews
Last Word Media
Group
Company
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
3,041
1,222
4,263
3,493
–
3,493
–
–
–
–
–
–
Group
Company
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
4,517
488
5,005
–
5,441
5,441
–
–
–
–
–
–
The Group tests for impairment at each reporting date. If there are indicators of impairment, then other intangible assets are also tested for
impairment at each reporting date.
The recoverable amounts are determined from value in use calculations. The key assumptions for the value in use calculations are those
regarding the discount rates, growth rates and direct costs. Management estimates discount rates using pre-tax rates that reflect current market
assessments of the time value of money and the risks specific to the Group. The growth rates are based on a combination of industry growth
forecasts and specific business plans for the Group. Changes in direct costs are based on past practices and expectations of future changes.
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for a period of 12 months and
extrapolates cash for a further 48 months. The growth rate used in the cash flow forecast was 2% (31 December 2018: 2%). The rate used to
discount the forecast cash flows was 14% (31 December 2018: 14%).
The following table summarises the Group's sensitivity to movements in the discount rate.
Cash Generating Units
Bonhill Group
Growth Company Investor
Information Age
InvestmentNews
Last Word Media
Vitesse Events
What Investment
Software and website development costs amortise over three to five years.
Publishing rights – useful economic life
What Investment
Information Age Media Ltd
Brands – useful economic life
InvestmentNews
Last Word Media
Headroom
£'000
Cost of capital
sensitivity
%
1,093
29
1,448
8,493
4,198
197
6
15.0
117.9
21.0
3.0
5.0
33.0
0.3
Held by
Total UEL Remaining UEL
Company
Group
20
20
5
6
Held by
Total UEL Remaining UEL
Group
Group
10
12
8
11
Financial Statements2019 Annual Report & Financial Statements 82
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
11. Intangible assets continued
Customer relationships – useful economic life
InvestmentNews
Last Word Media
Held by
Total UEL Remaining UEL
Group
Group
7
10
5
9
Note that the tax amortisation benefit of the InvestmentNews brand and customer relationships will be amortised over 15 years.
12. Property, plant and equipment
Cost
1 April 2018
Additions
At acquisition
1 January 2019
Additions
At acquisition
31 December 2019
Depreciation
1 April 2018
Charge for the year
1 January 2019
Charge for the year
At acquisition
31 December 2019
Net book value
31 December 2019
31 December 2018
Fixtures, fittings and equipment
Group
£’000
Company
£’000
41
92
19
152
257
458
867
6
21
27
104
393
524
343
125
41
75
–
116
118
–
234
6
17
23
52
–
75
159
93
2019 Annual Report & Financial Statements 83
Bonhill Group plc
Subsidiary
undertakings
£’000
888
17,071
17,959
8,496
26,455
10
–
10
–
10
26,445
17,949
13. Investments
Company
Cost
1 April 2018
Additions
31 December 2018
Additions
31 December 2019
Impairment
1 April 2018
Impairment
31 December 2018
Impairment
31 December 2019
Net book value
31 December 2019
31 December 2018
The Company holds 100% of the issued ordinary share capital and voting rights of the following subsidiary undertakings which have been
included in the consolidated accounts.
Company
Principal activity
Incorporated in
Registered office
Bonhill Finance Limited
Financing arm of the Group
England and Wales
1st Floor Fleet House,
59-61 Clerkenwell Road,
London, EC1M 5LA
Bonhill Group Inc.
Holding company for
InvestmentNews LLC
USA
685 Third Avenue, New York, 10017
Growth Company Investor Limited
Online, print publishing & events
for investors and entrepreneurs
England and Wales
Information Age Media Limited
Monthly publication and events
for IT professionals
England and Wales
InvestmentNews LLC
Last Word Media (Asia) PTE Limited*
Last Word Media (HK) Limited**
Online, print publishing & events
for US IFAs
USA
Online, print publishing & events
for investors and entrepreneurs
Online, print publishing & events
for investors and entrepreneurs
Singapore
Hong Kong
Last Word Media (UK) Limited
Online, print publishing & events
for investors and entrepreneurs
England and Wales
* Is held 25% by Bonhill Group plc and 75% by Last Word Media (UK) Limited.
** Is held 100% by Last Word Media (Asia) PTE Limited.
1st Floor Fleet House,
59-61 Clerkenwell Road,
London, EC1M 5LA
1st Floor Fleet House,
59-61 Clerkenwell Road,
London, EC1M 5LA
685 Third Avenue, New York, 10017
3 Church Street, #12-02,
Samsung Hub, Singapore (049483)
36/F Tower Two, Times Square,
1 Matheson Street, Causeway Bay,
Hong Kong
1st Floor Fleet House,
59-61 Clerkenwell Road,
London, EC1M 5LA
Financial Statements2019 Annual Report & Financial Statements 84
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
14. Trade and other receivables
Trade receivables
Provision for impairment of trade receivables
Other receivables
Prepayments and accrued income
Deferred expenses
Taxation and social security
Amounts owed from subsidiary undertakings
Group
Company
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
5,371
(160)
5,211
2,365
454
40
–
–
8,070
3,580
(127)
3,453
1,034
352
231
208
–
5,278
490
(87)
403
123
26
2
626
1,846
3,026
242
(32)
210
47
66
23
208
642
1,196
£’000
1,721
300
–
(1,678)
343
143
486
£’000
2,304
1,678
(3,982)
–
The Group’s financial assets are short term in nature. In the opinion of the Directors, the carrying values equate to their fair values.
15. Called up share capital
Issued and fully paid ordinary shares of 1p each
As at 1 April 2018
Shares issued during the 9 month period
Administrative issue of shares
Impact of 40:1 share re-organisation
As at 1 January 2019
Shares issued during the 12 month period
As at 31 December 2019
Deferred shares of 9p each
As at 1 April 2018
Impact of 40:1 share re-organisation
Cancellation of deferred shares
As at 1 January 2019 and 31 December 2019
Number
172,061,632
29,998,437
8
(167,760,099)
34,299,978
14,285,714
48,585,692
Number
25,603,787
18,640,011
(44,243,798)
–
Issue of shares
The Company issued 14,285,714 ordinary shares with a par value of 1p per share and for a price per share of 84p on 10/04/2019. 2,380,952
of these shares issued were part of the acquisition consideration – see note 20.
The total number of authorised shares is equal to the total number of issued shares.
Rights of shares
Dividends and income – Deferred shares are not entitled to any income or dividend. Ordinary shares are entitled to receive dividends as approved
by the Board of Directors.
Voting rights – Deferred shares are not entitled to any vote. Ordinary shares are entitled to one share per vote at General Meetings. Deferred
shares cannot be transferred.
Distribution – Upon liquidation of the Company, once all liabilities have been met, ordinary shareholders will receive the value paid up per
share plus £100. Deferred shareholders will then receive the amounts paid up on each share. Any remaining funds will be shared amongst
ordinary shareholders.
2019 Annual Report & Financial Statements
85
Bonhill Group plc
15. Called up share capital continued
Rights of shares continued
The Company has granted options to subscribe for ordinary shares of 1p each, as follows:
Grant date
16.08.2018
16.08.2018
16.08.2018
16.08.2018
29.10.2019
29.10.2019
Number of shares for which
rights are exercisable
Subscription
price per share
80.0p
80.0p
1.0p
1.0p
80.0p
80.0p
Period within which
options are exercisable
16/08/2021 – 16/02/2028
16/08/2022 – 16/02/2028
16/08/2021 – 16/02/2022
16/08/2022 – 16/02/2023
29/10/2022 – 29/10/2029
29/10/2023 – 29/10/2029
31 December
2019
781,245
781,245
998,500
998,500
100,000
100,000
31 December
2018
781,245
781,245
998,500
998,500
–
–
3,759,490
3,559,490
During the 12 month period, 462,498 share options were forfeited (9 months ended 31 December 2018: 513,478).
Share premium
The share premium account shows the amount subscribed for share capital in excess of nominal value, net of share issue costs. During the
year, the Company cancelled its share premium account and capital redemption reserve as confirmed by an Order of the High Court of Justice
Chancery Division.
Share premium as at 31 December 2018
Subscription of share capital in excess of nominal value
Share issue costs
Capital reduction
Share premium as at 31 December 2019
£’000
26,715
11,857
(524)
(38,048)
–
Merger reserve
Consideration for the acquisition of Last Word Media included £2.000m of shares (see note 20). The Group applied merger relief under the UK
Companies Act s615 and so the value of the shares issued as consideration above their nominal value is included in a merger reserve.
16. Equity-settled share option schemes
With effect from 17 August 2018, the Group operates two types of share-based payment arrangement as part of the senior management long-
term incentive plan. Previous arrangements have been forfeited. The general terms of the schemes are set out in the Remuneration Committee
report on page 44. All are equity settled.
The fair value of the equity-settled options are estimated using the Monte Carlo valuation method. The fair value of the grants and model inputs
used to calculate the fair values of grants during the year were as follows:
Weighted average share price
Exercise price
Annual TSR performance hurdle (above exercise price)
Expected dividend yield
Risk-free rate of return
Expected volatility
Average expected life (years)
Weighted average fair value of grants during the year
12 month
period ended
31 December
2019
Option
scheme
55p
80p
7%
1%
1.25%
30%
6.75
4.2p
Financial Statements2019 Annual Report & Financial Statements 86
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
16. Equity-settled share option schemes continued
Expected volatility is based on share price volatility of similar listed companies. Expected life of options has been taken as the mid-point of the
relevant exercise period. This is not necessarily indicative of future exercise patterns.
No other feature of the equity instruments granted was incorporated into the fair value measurement.
Details of the number of share options and the weighted average exercise price (“WAEP”) during the period are as follows:
Outstanding at the beginning of the year
Forfeited during the year
Granted during the year
Outstanding at the end of the year
Exercisable at the end of the year
12 months ended
31 December 2019
9 months ended
31 December 2018
No.
WAEP
No.
3,559,490
(462,498)
200,000
3,296,992
–
35.7p
35.7p
80.0p
35.7p
–
51,250
(513,748)
4,021,988
3,559,490
–
WAEP
192.0p
51.3p
35.7p
35.7p
–
The market price of the Company’s shares on 31 December 2019 was 38.0p (31 December 2018: 82.0p). The average remaining contractual life
is 6.9 years (31 December 2018: 8.6 years).
Options granted have a vesting period of between three and four years. The exercise of options will normally be conditional on the holder being in
the Group’s employment at the end of the vesting period.
The Group did not enter into any share-based payment transactions with parties other than employees during the current or previous periods.
The share-based remuneration charge for the period comprises:
Share option charge
Employer NICs on share options
17. Trade and other payables
Trade payables
Taxation and social security
Other payables
Accruals
Deferred income
Amounts owed to subsidiary undertakings
12 months
ended
31 December
2019
£’000
9 months
ended
31 December
2018
£’000
149
21
68
9
Group
Company
31 December
2019
£’000
31 December
2018
£’000
31 December
2019
£’000
31 December
2018
£’000
1,587
75
639
824
2,140
–
5,265
644
155
12
1,405
1,508
–
3,724
606
–
190
241
91
2,596
3,724
194
103
4
146
103
2,176
2,726
The Group’s financial liabilities are short term in nature. In the opinion of the Directors, the carrying values equate to their fair values.
2019 Annual Report & Financial Statements 87
Bonhill Group plc
18. Borrowings
Group borrowings consists only of a vendor loan held with Crain Communications Inc as part of the funding of the acquisition of InvestmentNews.
This loan is not held by the Company. There is no charge or lien on assets due to these borrowings.
Loan
The weighted average interest rate on this loan has been 7.64% since inception.
The interest-bearing loans are repayable as follows:
Within one year
Between one and two years
Between two and five years
Total
Group
31 December
2019
£’000
31 December
2018
£’000
2,614
4,323
Group
31 December
2019
£’000
31 December
2018
£’000
1,568
1,046
2,614
1,622
1,622
1,079
4,323
Total fees relating to the loan amounted to £0.138 million and these are being amortised over the term of the loan. The loan and interest are
guaranteed by the Company.
19. Right-of-use asset
The Group chose to early adopt IFRS 16 in the prior year and therefore recognised a right-of-use asset and a lease liability at that time.
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
» Leases of low value assets; and
» Leases with a term of 12 months or less.
In applying the modified retrospective approach, the Group has taken advantage of the following practical expedients:
» Leases with a remaining term of 12 months or less from the date of application have been accounted for as short-term leases (i.e. not
recognised on the balance sheet) even though the initial term of the leases from lease commencement date may have been more than
12 months.
In 2018, no right-of-use asset was recognised in relation to the Company lease due to its remaining term of less than 12 months.
In 2019, the Company entered a lease for rental property with an expected term of two years and recognised a right-of-use asset accordingly.
Further right-of-use assets were recognised in relation to entities acquired during the 12 month period. This asset also being for office property
with a two-year term.
Right-of-use asset
Carrying value as at start of the period
Additions to right-of-use assets
Amortisation charged
Foreign exchange impact of revaluation
Carrying value as at the end of the period
Group
2019
£’000
968
1,139
(593)
(21)
1,493
2018
£’000
–
1,066
(98)
–
968
Financial Statements2019 Annual Report & Financial Statements 88
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
19. Right-of-use asset continued
Lease liability
Carrying value as at start of the period
Additions to lease liability
Interest charged
Repayments made
Foreign exchange impact of revaluation
Carrying value as at the end of the period
Lease liability current/non-current split
Current lease liability
Non-current lease liability
Total lease liability
Right-of-use asset
Carrying value as at start of the period
Additions to right-of-use assets
Amortisation charged
Foreign exchange impact of revaluation
Carrying value as at the end of the period
Lease liability
Carrying value as at start of the period
Additions to lease liability
Interest charged
Repayments made
Foreign exchange impact of revaluation
Carrying value as at the end of the period
Lease liability current/non-current split
Current lease liability
Non-current lease liability
Total lease liability
The rent in relation to leases recognised is fixed over the lease term.
Group
2019
£’000
1,018
1,139
60
(583)
(34)
1,600
£’000
888
712
1,600
Company
2019
£’000
–
290
(29)
–
261
2018
£’000
–
1,066
15
(65)
2
1,018
£’000
285
733
1,018
2018
£’000
–
–
–
–
–
£’000
£’000
–
290
3
(33)
–
260
–
–
–
–
–
–
£’000
£’000
260
–
260
–
–
–
2019 Annual Report & Financial Statements 89
Bonhill Group plc
20. Acquisition of Last Word Media
On 10 April 2019 the Group completed the acquisition of Last Word Media.
Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows:
Fair value of assets acquired
Property, plant and equipment
Intangibles
Lease right-of-use asset
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Corporation tax payable
Lease financial liability
Deferred and current tax
Fair value of net assets acquired
Goodwill
Consideration
Book value
£’000
Fair value
adjustments
£’000
65
47
–
656
3,128
(2,431)
(36)
–
(48)
1,417
–
1,826
849
–
(78)
(409)
–
(849)
(313)
1,026
Total
£’000
65
1,873
849
656
3,050
(2,840)
(36)
(849)
(361)
2,443
6,053
8,496
Goodwill is attributable to the synergies expected to arise in integrating the operations into the wider Group. Intangibles includes brands and
customer relationships which will be amortised over a period of 12 and 10 years respectively.
Consideration consists of cash consideration, contingent deferred consideration and consideration taken as equity.
Cash consideration
Shares
£’000
6,496
2,000
8,496
The £2.000 million of shares issued as consideration comprised 2,380,952 shares and was therefore issued at an effective price of £0.84.
Included within the Group's results for the 12 month period are contributions of £6.710 million to revenue, £0.907 million to adjusted EBITDA
(excluding deal fees, associated integration costs and acquired intangible amortisation as detailed in note 5) and £0.044 million statutory profit
before tax. If the acquisition had been completed on the first day of the financial period, it would have contributed £9.745 million to revenue and
£1.197 million to adjusted EBITDA (excluding deal fees, associated integration costs, acquired intangible amortisation and overheads allocated by
the vendor company) and £0.015 million to statutory loss before tax.
Financial Statements2019 Annual Report & Financial Statements 90
Bonhill Group plc
Notes to the financial statements continued
for the 12 month period ended 31 December 2019
21. Related party transactions
Group and Company
There is no ultimate controlling party.
Key management compensation
No individuals other than the Directors meet the definition of key management personnel. Details of key management personnel compensation
is disclosed in note 7.
Transactions/balances with Directors
Further details are disclosed in note 7 and note 17.
Company
Transactions with subsidiary companies during the 12 month period ended 31 December 2019 and the 9 month period ended 31 December
2018 were as follows:
Bonhill Group plc cross charges of costs to Growth Company Investor Ltd £nil (31 December 2018: £nil).
Bonhill Group plc cross charges of costs to Information Age Media Ltd £nil (31 December 2018: £nil).
Bonhill Group plc cross charges of costs to InvestmentNews LLC of £0.907 million (31 December 2018: £1.293 million).
Bonhill Group plc cross charges of costs to Last Word Media Ltd of £0.324 million (31 December 2018: £nil).
At the balance sheet date, the following balances were outstanding:
Loans due (to)/from subsidiary companies
Growth Company Investor Ltd
Information Age Media Ltd
Bonhill Finance Ltd
Last Word Media Ltd
InvestmentNews LLC
12 month
period ended
31 December
2019
£’000
9 month
period ended
31 December
2018
£’000
(945)
(1,623)
368
(27)
1,478
(749)
(661)
(1,515)
368
–
274
(1,534)
22. Commitments and contingent liabilities
(a) Lease commitments
At 31 December 2019, the Group had no total future lease payments under non-cancellable operating leases less than one year being expensed
under the short term lease expedient on transition to IFRS 16 (31 December 2018: £0.082 million).
(b) Contingent liabilities
There are no contingent liabilities expected to result in a material loss for the Group.
The Company is included in a Group registration for VAT purposes and is therefore jointly and severably liable for all other Group companies’
unpaid debt in this connection.
The Company guarantees the loan from Crain Communications Inc. held by the subsidiary InvestmentNews LLC.
The Company is not expecting to pay contingent deferred consideration in relation to the acquisition of Last Word Media.
(c) Capital commitments
There were no material capital commitments as at 31 December 2019 (31 December 2018: £nil).
23. Events after the reporting date
Since the balance sheet date, the Group has issued 50.0 million shares at a placing price of 5p per share, generating gross proceeds
of £2.5 million before issue costs of £0.2 million.
Subsequent to the year end a pandemic was declared regarding COVID-19. The situation is evolving rapidly and it is not possible at this stage
to determine with any certainty the full impact on the Group, its customers, employees and suppliers. The Directors have responded and
implemented the measures discussed in the Group Finance Director's review. We will continue to review the impact of COVID-19 on the balance
sheet and in particular intangible assets and goodwill.
2019 Annual Report & Financial Statements Directors and advisers
91
Bonhill Group plc
Directors
Neil Sachdev, Non-executive Chairman
Simon Stilwell, Chief Executive
David Brown, Group Finance Director
Nicola Dowdall, Managing Director of Events and Marketing (resigned 21 March 2019)
Anne Donoghue, Non-executive Director
Fraser Gray, Non-executive Director
Secretary
Louise Park
Registered Office
1st Floor Fleet House, 59-61 Clerkenwell Road, London EC1M 5LA
Company Number
02607995
Registrars
Share Registrars, The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR
Bankers
Lloyds Banking Group, 39 Threadneedle Street, London EC2R 8AU
Solicitors
Dentons UK and Middle East LLP, 1 Fleet Pl, London EC4M 7WS
Auditor
BDO, 55 Baker St, Marylebone, London W1U 7EU
AIM Broker and Nominated Adviser
Shore Capital & Corporate Limited, Cassini House, 57-58 St. James's Street, London SW1A 1LD
Joint Broker
Canaccord Genuity, 88 Wood St, London EC2V 7QR
Design and Production
www.carrkamasa.co.uk
Financial Statements2019 Annual Report & Financial Statements Bonhill Group plc
Fleet House,
59-61 Clerkenwell Rd,
Farringdon,
London EC1M 5LA
T: 020 7250 7010
F: 020 7250 7015
E: info@bonhillplc.com
www.bonhillplc.com