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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
Annual Report &
Financial Statements 2020
The culture effect
Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Welcome
Our purpose is to influence a
more socially aware, diverse and
financially literate society through
providing the right tools for
our communities.
Who we are
What we do
Bonhill Group plc is a leading B2B
media company providing Business
Insight, Events and Data & Analytics
propositions to Business Solutions,
Financial Services and Governance
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.
Our Business
Communities
Business Solutions
Read more on page 14
Financial Services
Read more on page 16
Governance
Read more on page 20
For more information, please visit:
bonhillplc.com
ernance
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Financial Se r v i c
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Cheryl Cole
Editor DiversityQ
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Strategic Report
Everything you need to know about our year
Welcome
At a glance
Chairman’s statement
Business model and strategy
Quality of platform
One global team
Quality of people
Our Communities
Business Solutions
Financial Services
Governance
Section 172(1) statement
Our responsible business
Chief Executive’s review
Enhanced Structure
Chief Financial Officer’s review
Principal risks and uncertainties
Governance
How we ensure good 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
Our effective financial stewardship
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 statement
Notes to the financial statements
Directors and advisers
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08
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16
20
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28
33
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
At a glance
Growth through transformation
Our transformation
in numbers
Geographical revenue 2020
One connected
global team
Read more about our male/female diversity
on page 11
New York
Washington DC
London
Hong Kong
Singapore
UK
US
Europe
Asia
2020 2019
41% 24%
51% 66%
3%
5%
6%
4%
Events revenue 2020
LONDON
NEW YORK
WASHINGTON DC
HONG KONG
SINGAPORE
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Andrew Dodds
Business Development Manager
Introduction
Despite the external trading challenges of
COVID-19, 2020 has been a pivotal year for
internal transformation.
With a focus on quality of platform and quality
of people, we have committed to embracing
the measures we can take to improve our
proposition, which should provide us with a
strong base from which to continue growing
the business.
We have continued our drive towards
digital-first with an overhaul of our technology
platforms to give us a more streamlined
system. This has also allowed us to smoothly
transition from live to virtual events, at scale,
with a great delegate experience. We’ve also
greatly improved our global collaboration
to ensure that we combine the best talent
across the business and encourage
knowledge sharing and idea generation
across markets.
2020
2019
Live events
£1,459K £9,605K
Virtual events
£4,615K
£0K
Virtual events 2020
102
Live events 2020
14
2019:0]
2019:110
Key
Global offices
134
Total number
of employees
18.8%
Group voluntary
turnover
5
Global offices
41
New employees
in FY2020
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Chairman’s statement
Stronger together
I am particularly proud of the way
that the organisation has responded
to these challenging times.
Financial
highlights
17.8£m
Revenue
(FY19: £24.4m) -£6.6m -27.1%
14.3£m
Gross profit
(FY19: £16.2m) -£1.9m -11.9%
80.5%
Gross margin
(FY19: 66.6%) +1390bps
-0.1£m
ADJ. EBITDA
(FY19: £2.3m) -£2.4m -106.3%
-10.7£m
OP. Profit
(FY19: £-3.7m) -£7.0m -191.7%
1.3£m
Cash
(FY19: £1.9m) -£0.6m -29.0%
2020 was the most challenging year in the
Group’s history. The business was severely
impacted by the global pandemic and had
to reorganise and refinance to withstand
the impact on revenues, particularly in the
Events business which saw a 37% reduction
year-on-year.
It is a credit to the staff that we ended the
year at a near breakeven adjusted EBITDA
position in line with our expectations at
the time of the fundraising in April 2020,
although the path to that point had many
twists and turns with the extended periods
of lockdown and changes in government
guidance. Our investment in technology
improvements enabled us to move quickly
and respond to our customers.
The Company was reorganised midway
through the year with a new Executive
Committee to drive through the necessary
change in the business model, revenue
streams and customer offering in light of
the restrictions placed on the global events
market and advertising spend in the face
of global uncertainty.
Across the Group, year-on-year, Business
Information revenues fell by 21%, Events by
37% and Data and Insight by 17%, resulting
in overall Group revenues being down by
27% compared with 2020. The impact of
the successful switch to virtual events and
other Group initiatives saw an improvement
in gross margins by 13% in the year to 80%.
Operating loss increased by £7 million to
£(10.7) million largely reflecting the goodwill
write down of £6.6 million at the half year.
Cash conservation was key in the year and
a combination of the fundraising in April,
raising £2.25 million net of expenses, and a
focus on working capital management and
cost saving initiatives in all areas led to a
year-end cash position of £1.3m (2019: £1.9
million). As at 28 February 2021, cash was
£1.6 million.
During the year, the Company also took
advantage of the various government
initiatives to support the business and utilised
the Paycheck Protection Program (PPP) in
the US, receiving a grant of £0.8 million,
furloughing in the UK amounting to £0.186
million, as well as Bounce Back Loans (BBL)
totalling £0.1 million.
Despite all of the disruptions,
our employees have excelled
in constantly finding creative
solutions to problems, in
adopting high standards in new
areas and creating new products
to replace lost revenues.
In the year, there were two changes
to the Board, with Fraser Gray being
replaced in late June by Jon Kempster as
a Non-executive Director and Chair of the
Audit Committee and Sarah Thompson
appointed as Chief Financial Officer in
September, after David Brown stood down
in July 2020. We thank Fraser and David for
their contributions to the Company.
I am particularly proud of the way that
the organisation has responded to these
challenging times. Despite all of the
disruptions, our employees have excelled
in constantly finding creative solutions to
problems, in adopting high standards in
new areas and creating new products to
replace lost revenues. Their commitment
and positivity during lockdown, remote
working and beyond in all areas has been
outstanding.
The completion of our technology projects in
the year enabled us to work remotely very
successfully and the platform we have built
leaves us in a strong position going forward.
We are already seeing the benefit of the
new platform with the speed of new product
development and enhancements to our
product set.
Finally, I would like to thank our staff across
the international borders for their resilience
and hard work, our shareholders for their
support, in particular at the time of the
fundraising, and our broad customer base
for its continued support whilst they have
faced their own business challenges.
We are now set up to make 2021 a year
of delivery for shareholders after the
challenges of 2019 and the turmoil of 2020.
The extensive changes made in the year
position us well to achieve that.
Neil Sachdev
Chairman
23 March 2021
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Business model and strategy
Structured growth
01 Our strategy
02 Our business model
Our strategy is to transition to
long-term, ‘must have’, recurring
revenue streams through building
market-leading brands within our
Business Communities of Business
Solutions, Financial Services
and Governance and developing
high value propositions across
international territories.
Read more about our strategy in action
on pages 8 to 12
Our Communities
Business Solutions
Helping businesses to build, grow and thrive
successfully.
Read more about Business Solutions
on page 14
Financial Services
Providing insight and analysis to ensure that
our audiences can make informed decisions.
Read more about Financial Services
on page 16
Governance
Supporting organisations with their policies,
processes, systems and behaviours to
ensure that they align with legislation.
Read more about Governance
on page 20
We believe that running a responsible
business is central to our success.
Read more about our responsible business
on pages 24 to 27
Our strengths
Our formats
Core services
Value created
04 Geographical shift
Our geographic split of revenue has changed
such that in the period our revenue by
geography was:
UK
EUROPE
US
ASIA
Events
Analysis
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O
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Quality of p l a t
f o r m
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M a g azine
03 How we will grow
During 2020 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 Digital and Data
will become a more significant part
of our business.
Business shift
2020
2019
Events
Digital
Print
Data
Total
2020
2019
34%
43%
17%
6%
40%
31%
24%
5%
100% 100%
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Bonhill culture
and values
2020
51%
41%
2019
66%
24%
3%
6%
5%
4%
Inclusive
We champion diversity and strive to
build an inclusive environment where
all employees can feel valued and
have a voice.
Collaborative
We work collaboratively within our
organisation and across our communities
to maximise knowledge sharing and
inter-departmental support.
Courageous
We support each person in maximising
their potential, enabling them to play their
part in an inspiring, community-centric,
and responsible environment.
Respectful
We have a culture of respect, openness
and fairness to all and, for our business,
these are non-negotiable.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Quality of platform
Building our digital platform
Simon Collin
Chief Technology Officer
In conversation with
Simon Collin
Q. What happened in 2020?
A We focused on six things: first, like all
businesses, the unexpected high-speed
set up of full remote working facilities
across three continents for all of our
team. Second, we accelerated the plans
to set up a single business system for
all of our teams. Third, we developed a
great technology stack for virtual events
that allowed the businesses to deliver
virtual events at scale, replacing our live
events with a great delegate experience.
Fourth, we migrated off all the legacy
systems – including ERP, CRM and
web technologies – to standardise our
platforms to improve functionality and
user experience, and reduce cost and
unnecessary complexity. Fifth, we set up
our own internal development team, and
established a daily release cycle with an
agile approach to product management.
And sixth, we put in place a number of
key building blocks for our future product
development – including a new global
web framework for all our sites, enhanced
analytics, the latest ad-ops functionality,
SEO workshops, and much more.
Q. What benefits will these
changes bring?
A There are a range of benefits from
better analytics, improved customer
insight, consistent views of our own
business, improved internal efficiency,
reduced overall cost of ownership, and
lower time to market for new products.
Of course, the six focus areas all bring
different elements of this list of benefits
with different phasing. For example, the
remote working was an immediate benefit
to provide individuals with secure,
team-focused tools so they could operate
as if they were in the office; whereas
the single business system has brought
standardisation and process across the
business within the year; the new virtual
events support was an immediate win,
with great feedback from delegates;
moving off the legacy systems helped
reduce costs and complexity going
forward. However, the longer-term benefit
of the last focus area will, I hope, be seen
over the next few years as we gain better
insight to our customers and improve our
ability to deliver great new products.
An agile technology
13m
users of our leading websites
12k
attendees to our new
virtual events
50m
emails sent every year
42
Systems simplified to 16,
reducing cost
Highlights
Implemented a full, robust
WFH across three continents
Migrated off all legacy systems
to single Microsoft platform
Released fully integrated
business system for sales,
marketing, events, editorial
and finance
Our systems implementation was
applauded by Microsoft Engineering
in a global case study
Set up in-house software
development team
Supported the near-instant
transition to sophisticated
virtual events with great
delegate experience
08
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Cristian Angeloni
News Reporter
Q. What are the challenges of
Q. How do product and technology
working across three continents?
fit together?
A The main one is time! The technology
team is ‘always on’ to support and help
develop new products. The biggest issue
is in governance – especially keeping
abreast of the different privacy and
regulatory requirements; we work closely
with our key suppliers, such as Microsoft,
to help us manage data across the
various legislative regions.
Q. Have there been trade-offs?
A We started 2020 with three still separate
businesses acquired by the Group –
each business and its teams had its own
systems, tools and platforms. We’ve
brought all of these together into one
consistent set of tools. In this change, yes,
individual teams will have had to move
some of the software tools they use, but
the overall gain has been huge – with
everyone now gaining access to some of
the best software available whether it’s
email marketing tools, website platforms,
or virtual events.
A I believe they each drive the other:
good product managers listen to their
customers to understand where there’s
an opportunity to develop new ways to
solve customer problems and technology
provides new ways to both understand
customers through data and analytics,
and to create solutions. At Bonhill, we
successfully set up a new software
development team and rolled out an
agile approach to product management,
which will be a huge benefit to our ability
to quickly identify market opportunities
and develop new products. Off this
new strong development foundation,
we’re ready for an exciting time ahead
developing products that help our clients
and their customers. We have unique
data sets that give us insight into global
financial sentiment, into ESG, diversity,
technology and running a business.
These will help us develop the next
portfolio of market-leading products.
Q. How will 2021 be different?
A 2020 was a year of getting all our
systems aligned; we started with a mix
of Lego, Meccano and some wooden
blocks. We’ve ended the year with one
consistent set of tools and platforms that
delivers best-practice functionality to all
our teams. 2021 will be the year we are
able to start to really take advantage of
the benefits this brings: better analytics,
better customer insight, faster product
development, and systems that don’t get
in the way and, instead, help teams do
their jobs better and faster. We’ve got a
fantastic team working with a great set of
the latest tools and a large, unique and
consistent data-set. As far as tech and
product goes, it doesn’t get much better
for an exciting 2021!
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Our timeline
2020 has been a pivotal year for our
digital platforms; we’ve integrated a range
of changes to improve user experience for
both internal and external stakeholders and
deliver enhanced analytics and insight.
January 2020
InvestmentNews.com migrated to a new
platform, delivering improved user
experience and new commercial
opportunities.
March 2020
Roll-out systems to support all users working
remotely, integrating new team tools and
VOIP telephones for WFH.
April 2020
Delivered virtual events technology stack
providing great delegate experience in
multi-day, multi-session events; over 12,000
attendees enjoyed the new platform with
great feedback.
September 2020
Created new global web platform to allow
new sites to be developed and deployed
quickly and effectively. First sites launched.
October 2020
Migrated range of legacy email systems to
single platform, working with Microsoft to
deliver high volume email campaigns with
low spam score and high response rates.
November 2020
Completed migration of all users to a single
common business platform to provide
sales, marketing, editorial and finance with
enhanced features and reporting.
December 2020
Completed migration of all legacy systems,
moving Bonhill businesses off old platforms
onto a common set of platforms to support
enhanced analytics and insights.
Read more about our virtual events on page 16
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
One global team
Knowledge and sharing
Our global offices
Key
Global offices
New York
Washington DC
London
Hong Kong
Singapore
Total number
of staff
42
2
79
9
2
134
LONDON
NEW YORK
WASHINGTON DC
HONG KONG
SINGAPORE
Firstly, by combining the best
talent across the business
and hosting cross-border
meetings, we are building new
forums for brainstorming and
idea generation which have,
undoubtedly, had a positive
effect on the development and
execution of new (and existing)
revenue streams.
International
collaboration and
growth
In what has been a tumultuous year,
commitment to international collaboration has
never been more important. Following the
tactical acquisitions over the past few years,
Bonhill entered 2020 with a truly global suite
of products and international teams.
We have focused heavily on ‘knowledge
sharing’ and set up a number of task force
groups to push forward our global initiatives.
These have been developed to both enhance
our existing portfolio of brands and react to
the ever-changing needs of our customers.
Core areas for global collaboration include:
ESG, Fintech, Diversity, UHNW,
Next Generation & Content Marketing.
Whilst these global partnerships are certainly
conducive to ‘better business practice’
we are also committed to using these for
business growth. Firstly, by combining
the best talent across the business and
hosting cross-border meetings, we are
building new forums for brainstorming and
idea generation which have, undoubtedly,
had a positive effect on the development
and execution of new (and existing)
revenue streams. Secondly, approaching
projects with a global mindset arms us
with an even more compelling proposition
for our clients. Being able to deliver
across markets gives us the opportunity
to mirror our clients’ global needs and
offer them all-encompassing solutions.
In our mission to move our business to
must-have products that provide long-term,
recurring revenue streams, these changes
will augment and, ideally, accelerate, this
goal by bringing the best of every brand
and aligning it to the areas we know best,
in the geographies with the most potential.
Championing diversity
& quality of workforce
The onset of the coronavirus pandemic
brought inclusion of the global workforce
to the forefront and, despite remote working,
the Group interacts and collaborates
cross-discipline and cross-country more
than ever, fulfilling a primary objective set
out in the 2020 annual report.
Keeping our people connected and providing
socially engaging interaction was key to the
success of the business. The introduction
of a buddy scheme allowed for our people
to connect with colleagues from different
parts of the business to build relationships,
increase knowledge often outside of their
own remit and share ideas. Initiatives such
as regular Creativity Workshops chaired by
the CEO and led by various heads of teams
allowed for our people to showcase and
learn about recent work that is new, different
or a direct response to COVID-19 with the aim
to stimulate others into new idea generation
and setting best practice standards in a safe
and open environment underpinned by a
culture of respect.
We have championed diversity and inclusion
through internal programmes related to
National and Global Awareness Days &
Weeks including International Women’s and
Men’s Day and Mental Health Awareness
Week. These programmes, amongst a
number of daily communications during the
respective weeks, included internal talks in
collaboration with the phenomenal range of
speakers we have relationships with for our
live and virtual events. These programmes
will expand in 2021 to include LGBTQ+, World
Environment Day, Black History Month and
Disability Representation with a diverse and
representative internal steering group now
in place.
Whilst the reduction in headcount was
considerable, the business continued to
invest and hire in critical parts of the business
and in order to support the new business
model emerging as a result of the pandemic,
attracting excellent talent globally. Remote
onboarding was key to ensure new people
felt welcome, integrated as quickly and
effectively as possible, and aligned with
our proposition. Each new hire has been
provided with the support necessary to
maximise their potential and play an integral
part of the team.
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Group Age
Group Ethnicity
20-24
25-29
30-34
35-29
40-44
45-49
50-54
55-59
60-64
65+
NSp
Group Gender
Male
Female
Other
NSp
4%
21%
15%
11%
10%
8%
12%
8%
1%
1%
9%
42%
51%
1%
6%
Asian
Black/African
White
Mixed/Multiple
Other Ethnic Group
NSp
5%
7%
70%
4%
2%
12%
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Quality of people
Our connectedness fuels growth
An experienced
and dynamic team
At Bonhill we champion
innovation and cooperation,
and the backdrop of the global
pandemic has further accelerated
our need for problem-solvers and
those with a ‘can-do’ attitude. This
year has seen a concerted focus
on international collaboration and
we have encouraged employees
to reach out to their colleagues
across the globe to share ideas,
insights and better business
practices.
Taking ownership
Similarly, we continue to encourage our
employees to be creative and drive their
business areas forwards, with the support
of senior management teams. We know that
‘people’ can truly make a difference and
have the power to shape the future of our
Company. At Bonhill, we are keen to nurture
creativity, hard work and ambition to ensure
that we have high-quality people in fulfilling
roles.
Our people matter to us
With our employees at the heart of
everything we do, it’s important for us to
frequently get their feedback on their roles
and the wider Company and we run regular
‘Wellbeing Pulse Surveys’ to understand their
changing views. In addition, we have recently
launched our ‘Bonhill All Stars’ programme
to encourage peer-to-peer recognition.
91%
of employees felt supported
by their manager
78%
felt confident that Bonhill would
make the right decisions for
employees during the pandemic
the profitability of CMS but it has given us
back control over creative direction, project
management and allowed us to develop
our own style. This overhaul has also made
CMS a much more compelling opportunity
to our clients.
Q. What is the most important thing
for success?
A Complacency is the enemy of progress
and, as a team, we are committed to
constantly learning, developing new ideas
and exploring new platforms. I think it’s also
important to get the basics right and do
the ‘simple’ things well. If you build strong
foundations, you give yourself a fantastic
launch pad from which to grow. The
content marketing industry is ever-changing
and competition in this area is rife so it is
important that we keep evolving to ensure
we can continue to provide the best service
for our clients.
Q. Can you give an overview of the
Content Marketing Solutions
business?
A Our CMS business helps asset
management firms to create high-quality
content for their target audiences. Our
team works closely with clients to gain
a deep understanding of their strategy
and marketing needs so that we can
provide market-leading custom solutions.
Combining our audience insight, industry
knowledge and marketing expertise we
design comprehensive projects, ranging
from roundtable debates to fund-focused
infographics. The fund market is more
competitive than ever, and it is vital that
groups can cut through the noise with
powerful content.
Q. What has been the development
journey?
A When we launched CMS in 2016 we had
limited expertise in creating content on
behalf of clients and decided to partner
with an external content provider as an
immediate route to high-quality content.
As we became more confident with the
creation process and started building
stronger relationships with our clients,
we decided to bring our content creation
in-house. Not only has this transformed
Sophie Johnstone
Head of Content
Complacency is the enemy
of progress and, as a team, we
are committed to constantly
learning, developing new ideas
and exploring new platforms.
I think it’s also important to
get the basics right and do
the ‘simple’ things well.
Natalie Kenway
Global Head of ESG Insight
(Editor – ESG Clarity)
Perhaps the biggest
development has been our
global expansion; ESG Clarity
has been rolled out into Asia,
in association with Fund
Selector Asia, and in the US,
powered by InvestmentNews.
Gareth Wilde
Managing Director, Asia
The overall bottom line
financial performance of
the Asia business actually
improved year on year
for 2020.
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how ESG can add value and educate
investors on how they can have a positive
impact on the environment and society
through their investments and savings.
Q. What have been the major
developments in the last year?
A ESG Clarity has undergone a complete
overhaul with a website revamp, e-zine
and podcast launches and the development
of our Responsible Ratings Index (RRI). In
addition, we’ve built partnerships with trade
organisations and the United Nations who
now contribute a monthly column. Perhaps
the biggest development has been our
global expansion; ESG Clarity has been
rolled out into Asia, in association with
Fund Selector Asia, and in the US,
powered by InvestmentNews.
Q. What has been driving the
momentum in interest in ESG?
A I joined ESG Clarity as editor in February
2020 at a time when Greta Thunberg and
David Attenborough had brought the very
real climate change threat to the forefront of
society’s minds. Momentum in responsible
investing had been gradually climbing as a
result, but the COVID-19 pandemic has very
much accelerated the interest in ESG as the
market fall-out has highlighted the resilience
in sustainable business models. Appetite
for ESG solutions is building, with more fund
selectors than ever considering ESG factors
when constructing portfolios.
Q. How does ESG Clarity help
investors?
A Our aim is to assist fund selectors on
how to integrate ESG into investment and
business processes, how to select ESG
funds and look under the bonnet of ESG
solutions to identify those that are truly
walking the walk and not just paying lip
service (greenwashing). We also share how
the ESG landscape is evolving and how
demand from investors is increasing and
becoming more sophisticated, as well as
Q. How did COVID-19 affect the Asia
which combines content creation,
distribution, and live panel discussions.
It has been extremely well received by
the market and replicated in other parts
of the business.
Q. How does Asia fit within
the global business?
A The Asia market potential is clear and
significant. Nuances across the region
between different countries pose
challenges to growth but the experience
of the Asia team and the reputation of
the brands mean we are extremely well
positioned. Integration and collaboration
with the global Group have progressed
significantly. It will be of great benefit to the
whole Group as the sharing of best practice
and knowledge continues between regions
and clients see us, and work with us, as a
truly global partner.
business and how did management
overcome these challenges?
A Swift implementation of measures in
January prevented full lockdowns; however,
the general uncertainty meant all aspects
of the business were severely impacted
right from the start of the year. Prudent cost
control, including a voluntary reduction in
working hours, coupled with successful
utilisation of the relevant government
support schemes, meant that all staff
positions were able to be retained and
several vacant positions were filled during
the period. The overall bottom line financial
performance of the Asia business actually
improved year on year for 2020.
Q. What new initiatives have been
launched in Asia in 2020?
A The switch to virtual events has led to
new ways of working and new product
offerings. The business was able to run
several hybrid events that consisted of
audiences physically gathering for events,
where local restrictions permitted, and
speakers and sponsors remotely dialling-in
to present and participate in discussions.
This is likely to be the format that precedes
a full return to physical events. We have also
launched our new “Spotlight On” series,
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Our offering
Our Business Solutions brands
offer insight and analysis to
ensure that our audiences
can make informed decisions.
We help businesses to build,
grow and thrive successfully
by providing business advice,
professional commentary,
updates on legislation, guidance
on incorporating technology and
resources for maximising profits
and revenue streams.
Business advice & professional
commentary
Updates on latest legislation
Guidance on incorporating technology
Resources for maximising profits
& revenue streams
Peer networking
Our brands
Our Communities | Business Solutions
Supporting business
ernance
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Financial Se r v i c
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Business Solutions
Highlights
£941k
Total revenue in 2020
5.981m
Private sector businesses
in the UK
Audiences
Senior technology leaders
The core audience for Information Age
consists of senior and mid-level technology
decision makers, including CIOs, CTOs,
CISOs and heads of IT, as well as CEOs
and founders of technology businesses.
Small business owners
Small Business is the #1 website for
owner-directors of small businesses in
the UK. It is mainly used by the owners of
microbusinesses (fewer than ten employees).
There are 6m small businesses across the
UK and 96% of these are microbusinesses,
according to the ONS.
Scale-up businesses
Growth Business targets a niche but high
value audience of faster-growth scale-up
businesses (annual 20% plus profits growth).
According to the Business Growth Fund,
there are around 300,000 such
scale-ups.
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The core of the Business Solutions group is
comprised of the three websites and several
event-based brand extensions covering
the practical issues faced by professional
audiences. Business Solutions had a strong
year of growth in 2020, both in audience
numbers and revenue.
SmallBusiness.co.uk had 4.5 million visitors to
the site over the course of the year, an increase
of over 120% year on year, viewing 7.4 million
pages. The brand saw 36% growth in revenues
benefitting from an email subscriber base
that grew fivefold as the UK SME community
managed the impact of COVID-19. The editorial
strategy of timely coverage and support
for businesses ensured that the website
performed well in terms of engagement
throughout the year, a trend that has continued
into 2021 where page views have nearly
doubled year-on-year (up 92%) in January.
Through the national lockdowns both Small
Business and Information Age grew as their
target audiences increasingly turned to them
for advice and support. With no live events to
attend, Information Age’s audience turned to
the site for a series of virtual events under the
banner of the ‘Information Age Summits’. These
were 22 high-margin events supported by a
broad range of commercial partners looking to
connect with prospective enterprise customers.
Record numbers of new businesses are
being created in 2020-21 through a rise in
entrepreneurship as we emerge from the
COVID-19 pandemic, so Small Business is well
positioned to continue to help business owners
to start, manage and grow their businesses.
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Revenues in the Group have been further
diversified over the course of 2020 and now
comprise more non-ad based revenues and a
broader customer base.
Customer or lead-generation has become
an important growth area across the brands,
with an increased focus on developing
market-leading data and solutions for our
customers.
2021 will see all Business Solutions websites
redesigned and relaunched, optimised for
continued growth with audience expansion
and segmentation.
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Jessica Tasman-Jones
News Editor
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Our Communities cont. | Financial Services
Primed growth
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Financial Services
highlights
£16.49m
Total revenue
162%
Increase in ESGClarity.com
total page views
Audiences
US financial advisers
InvestmentNews reaches a total audience
of 1.6m Financial Services professionals
in the United States through digital, print,
podcasts, social media, research and events.
Our influential audience manages more
than $23T of assets, and is comprised of
registered investment advisers, independent
broker dealers, and wirehouse advisers. We
strategically target vertical market segments
with a focus on retirement planning, ESG,
female advisers, regulatory issues, tax
planning and Fintech.
Global financial advisers (ex-US)
We service the global intermediary market
through our International Adviser channel.
This targets those professional advisers that
uses cross-border insurance, investment,
and pension products on behalf of their
high-net-worth clients. We provide news
and analysis to this global audience across
the UK, Middle East, Asia, Europe and
South Africa.
Our offering
Across our Financial Services
suite we educate audiences
by providing vital insights and
analysis. We share industry
news and views, investment
and financial planning guidance,
data and research, and
regulatory updates to help
financial professionals and
private investors make better
informed decisions.
Industry news & views
Investment & financial
planning guidance
Data & research on industry trends
Structured B2B networking
Regulatory trends and analysis
Our brands
Fund selectors & fund buyers
Through our Portfolio Adviser, Expert Investor
& Fund Selector Asia channels we support
professional investors across the UK, Europe
and Asia. Our team of experienced journalists
delivers timely and insightful news and
analysis to fund selectors, wealth managers,
private bankers and financial advisers
specialising in investment.
ESG-conscious
investment professionals
ESG Clarity is our dedicated channel for
fund selectors globally who incorporate ESG
thinking into their workflow. Its target audience
is wholesale investors (fund selectors, private
bankers, wealth managers, investment
advisers, retail bank distributors) but also
serves large institutional asset owners, in the
UK, Europe, Middle East, Southern Africa,
Asia and the USA.
Private investors
What Investment is the oldest consumer
monthly magazine for private investors in the
UK. It is aimed at those who actively engage in
managing their and their families’ investments
held in pensions and investment wrappers, as
well as individual equities and property. There
is a particular focus on investment trusts and
open-ended investment funds, which includes
comprehensive independent performance
statistics provided by leading data provider,
Morningstar.
Last Word update
Last Word is a media, events, content,
and research business serving the fund
selection and financial advice communities
across the UK, Europe, Middle East, South
Africa, and Asia.
Its primary function is to enhance the
interaction of asset managers with their
wholesale distributors. 2020 was a year
of both challenges and opportunities.
Face-to-face events are the largest part of
the business and, unfortunately, COVID-19
meant that nearly all of these events were
affected. The business quickly adapted to
a new virtual format and, by the end of the
year, had run a greater number of events
than were originally planned but at reduced
revenues.
The business is now,
operationally, more efficient,
with greatly improved margins.
Signs are very positive for 2021,
with forward bookings tracking
ahead of expectations and a
return to face-to-face events
anticipated in the Autumn.
Brexit had already had an effect on
the European business and COVID-19
accelerated our plans to greatly reduce our
exposure through print and events. However,
every other part of the business performed
well. We saw an increase in web traffic
across our editorial brands and our bespoke
content business exceeded expectations,
surpassing its original budget. We continued
to grow our portfolio of products in the
booming ESG space, both in the UK and
internationally with products that use
business intelligence to generate recurring
revenues. 2020 also saw the completion
of the business management restructure
at the end of the post-acquisition earn out
period, the move to a new CMS system
and the migration of our websites to a new
platform. The business is now, operationally,
more efficient, with greatly improved margins.
Signs are very positive for 2021, with forward
bookings tracking ahead of expectations and
a return to face-to-face events anticipated in
the Autumn.
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Harriet Noble
Business Development Manager
InvestmentNews update
2020 left an indelible mark on the financial
advice community, but while the focus has
been on the challenges, the learnings from
the year created meaningful opportunity
and acceleration of our transformation to
becoming more digital.
Two themes resonate for the IN audience:
the dependence on robust, state-of-the-art
technology and continued rapid growth in
the Registered Investment Adviser market.
The onset of the pandemic immediately put the
focus on the adoption and use of technology
and highlighted the need for Financial Services
professionals to have a robust technology
in place to succeed. Additionally, managing
a remote work environment, the convergence
of financial advice services – wealth
management, retirement planning and
long-term health – required advice firms
to invest in additional tools that enable
greater collaboration with clients in a variety
of formats, thus creating an opportunity
to deliver hyper-relevant content to these
markets. We continue to see a rise in RIA
firms (more advisers going independent).
Market research firm Echelon Partners’ annual
deal report noted that 2020 was the eighth
consecutive record in terms of deal activity,
and the raw number of $1B+ deals jumped
to 111 from 64 in 2019. The key point of the
market for IN stems from the mixture of
deals, because while M&A of existing firms
led the way, a full 30% of the deals were
breakaways. The size and number of deals
is poised to continue into 2021.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Our Communities cont. | Financial Services cont.
Deeper integration
InvestmentNews
highlights
19
Virtual events conducted in 2020
44
Employees
Christine Shaw
Chief Executive Officer for InvestmentNews
The first thing we did was to
ensure the team had both the
technology and tools to operate
in a remote environment.
Because we had that in place, we
had no down time in making the
transition to working remotely.
In conversation with
Christine Shaw
Q. COVID threw the market into
disarray, how did IN adjust its
efforts to keep meeting client and
user needs?
A IN pivoted quickly at the onset of the
pandemic in March 2020 to meet our
adviser audience where they were at that
point in time. From a content perspective,
we shifted our coverage and analysis to
provide timely coverage and in-depth
insights on what was happening in the
financial markets, and the impact it
would have on advisers’ business.
In keeping with the theme of digital
transformation that we entered the
year with, we launched a digital edition
of our premium magazine to ensure
our subscribers were still receiving
our content through an interactive
digital format. We launched a series
of ‘Navigating 2020’ webcasts that
were popular in helping our audience
navigate the unprecedented times and
encouraged them to be proactive in
adopting new practices to grow their
business. Also, our traditional journalists
adapted new media formats and launched
the IN Podcast in July 2020, which has
helped give a voice to our newsroom,
and foster important conversations with
leaders in the industry.
Overall, a big focus for the
team is continuing to produce
integrated content across
multiple platforms that give
advisers the information they
need at the right time – hyper
targeting our audience.
Q. Events are a large part of IN, how
did the IN team adjust?
A The IN events team added a new set
to their existing responsibilities last year
in a big way. Content development,
operations, and marketing took on a new
meaning, and we were able to facilitate
over 20 virtual events in the back half
of 2020. In addition to adopting new
digital platforms for these events, we
integrated networking opportunities and
social conversations to augment the user
experience and respond to advisers’
desires to interact with other event
attendees.
We are extremely proud of our Women
Adviser Summits winning the Best Virtual
Event series award from StreamGo, as
part of their Online Virtual Awards for
2020.
Q. What steps did IN take to deepen
its reach into important client
segments?
A We did a lot of outreach and listening
to our adviser audience this past year.
Recognising that our audience had
a deep need for knowledge across
several vertical market segments within
Financial Services, we launched several
content communities around these
topics, including microsites, new events,
podcasts, and webcasts. Our focus areas
included ESG, Retirement Plan Advisers,
Fintech, and content tailored for female
advisers. We will continue to hone these
content experiences and launch new
communities around ultra-high net worth
financial advice, next-gen advisers while
strengthening focus on the larger RIA
community in 2021.
Q. What new platforms will IN
develop over the next year?
A In addition to the expansion and
launches of the microsites mentioned,
we are working to provide a better
user experience for both our users
and advertisers. This includes a new
events platform that will provide deeper
integration with our CRM and enhancing
our database as we continue to leverage
technology that serves content to our
users based on their top areas
of interest. To enhance our capabilities
on the content marketing side, we are
developing several content partnerships
with our clients using the Ceros platform,
which allows us to co-create infographics,
video, and research that allow for a more
dynamic content experience.
Overall, a big focus for the team is
continuing to produce integrated
content across multiple platforms that
give advisers the information they need
at the right time – hyper targeting our
audience.
Q. What have you done to set your
team up for success in the past
year, and what has surprised you
most about the team you’ve built?
A The first thing we did was to ensure the
team had both the technology and tools
to operate in a remote environment.
Because we had that in place, we had
no down time in making the transition
to working remotely. We communicated
frequently and we were clear with
decisions and allowed people more
flexibility with their schedules. We took
employee surveys to check-in on their
health and wellbeing, along with offering
sessions on related topics. What has
surprised me the most is the resiliency
and productivity of the team. It has
not been easy for most people to be
operating in a global pandemic but
somehow the team has managed to
navigate this and we all feel that we have
gotten to know each other better.
InvestmentNews
timeline
January 2020
InvestmentNews launches new branding
including new logo, incorporating the
multitude of platforms available to our users
in addition to the premium magazine.
March 2020
InvestmentNews pivots to all remote working,
implements the top technology and tools to
successfully navigate the pandemic and new
ways to communicate with clients. In addition,
we launched our first recurring podcast
series, Her Success Matters.
April 2020
InvestmentNews launches a digital
edition of the premium magazine and
a new website design, ensuring advisers
have instant access to the information they
need to accelerate their businesses whilst
working remotely.
May 2020
Women Adviser Summit launches virtually,
kicking off a year-long slate of virtual events
in light of COVID-19 restrictions.
June 2020
InvestmentNews launches the ESG Clarity US
microsite, and a new weekly podcast
– The IN Podcast.
October 2020
InvestmentNews successfully launches first
Fintech virtual event, paving a path to expand
on Fintech content across multiple platforms.
December 2020
InvestmentNews wraps up its 19th virtual
event of the year, being recognized as one
of the top Virtual Events platforms of 2020
for the Women Adviser Summits.
Looking forward
Strengthening our audience growth through
technology and insights, we will continue to
launch new products which include: the RIA
Summit and ESG Global Event in May, and
ongoing expansion of our Fintech solutions.
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Bonhill Group plc Annual Report & Financial Statements 2020
Our Communities cont. | Governance
The culture of business
ernance
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Governance
highlights
£1.31m
Total revenue
4,463
Virtual audience:
DEI professionals registered
for virtual events in H2
Audiences
Senior D&I business professionals
DiversityQ supports Board members, senior
managers and HR directors to create D&I
best practice and attract and retain talent
from across the full spectrum of the working
population.
Financial Services professionals
We target global Financial Services
professionals across banking, asset and
wealth management, accountancy and
insurance with our Women in Finance
summits and awards series.
Technology professionals
IT & technology professionals across
multiple industries globally are serviced
by our Women in IT summits and awards
series, with a particular focus on large,
high valued sectors such tech and finance.
US asset management C-suite
Our Women in Asset Management Summit
and awards series is aimed at CIOs and
directors of US asset and wealth managers,
fund managers, and portfolio analysts.
Our offering
Our Governance channel
supports organisations with their
policies, processes, systems,
and behaviours to ensure that
they align with legislation.
We share best practice
guidance, regulation updates
and commentary, corporate
governance case studies and
create community forums for
collaboration and networking
within DEI.
Best practice guidance
Regulation updates and commentary
Forums for collaboration and networking
Corporate governance case studies
Research & insight
Our brands
Governance update
The governance portfolio aims to tackle the
practical issues surrounding diversity within all
industries globally, but with a particular focus
on the IT, finance and asset management
industries.
Progressive businesses ‘get’ the issues
around diversity but are now looking for
practical solutions and guidance to create
a truly diverse working environment. This
mind set accelerated in 2020 in tandem with
the emergence of the Black Lives Matter
movement. Our brands support organisations
in creating an inclusive and diverse workforce,
working environment and business culture,
and maximise the benefits of diversity
through increased productivity, improved
staff satisfaction, creating a more sustainable
business model and consequently enhancing
corporate returns. Prior to March 2020, the
governance group consisted mainly of the
gender focused ‘Women in’ international
awards programmes and summits. The
pandemic lockdowns halted all the planned
23 live events in multiple international
geographies. But by July, the Group had
reinvented this and delivered 14 higher margin
virtual events in the second half of 2020,
exploring much wider themes than gender
diversity, including ESG in technology and more
content focused on General Diversity issues.
This shift to a digital-first model has helped to
build a significant database of diversity and
inclusion practitioners and leaders. This data
led to the development of new content for the
events in 2020 and is shaping future products
and activities for the community. 2021 sees
us propel our diversity website DiversityQ to
become the lead governance brand, with a
new hub for our ‘Women in’ Series and much
more in the pipeline.
Kelly Humphreys
Marketing Manager
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Roberta Masseretti
Senior Event Coordinator
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Bonhill Group plc Annual Report & Financial Statements 2020
Section 172(1) statement
Adding value for everyone
Our stakeholders
Stakeholders are at the very core of our business.
Success in our field is dependent on effective and
tailored engagement with these groups to ensure
a fair and positive business model. We prioritise
matters that are important and are cognisant
of the need to build value for them.
Dylan Emery
Director of Research
New divisional structure
Our primary aim was to give
a degree of autonomy and P&L
responsibility to our new MDs
whilst making sure we achieved
our global ambition.
Individual business unit
responsibility requires the
management of Group-wide
need prioritisation so that
investment and development
tasking is made in the right areas.
The creation of internal global
services requires training,
Group-wide best practice and
sensitivity to local knowledge
and culture.
Response to COVID-19
The welfare and safety of
our staff remains our prime
concern. We made every effort
to communicate with our staff in
a timely fashion so they could
efficiently transition to remote
working and remain connected
to the business.
We assessed the government
support available to support
the business and utilised in an
appropriate fashion.
We were committed to
maintaining a constant support
system for staff, so they remain
informed, comfortable to express
their views, and updated on the
Company’s progress through the
pandemic.
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Investment in technology
The transition to a single
technology platform and the
streamlining of technology
providers required a
sensitive approach to historic
relationships and contracts,
change management for staff
and made more complex by
remote working.
Transition from live
to virtual events
To pivot a large % of our historic
revenues with limited prior
experience required a strong
technology partner. Finding and
developing the trust with that
partner during a rapidly changing
time required careful handling.
To utilise our knowledge and
partners on a global basis
required all parties to have
confidence in a new and
evolving platform.
The Board recognises its duty to consider
the needs and concerns of the Group’s key
stakeholders during its discussions and
decision-making.
In accordance with Provision 5 of the 2018
UK Corporate Governance Code, we set
out below how the Group engages with
its key stakeholders. More information on
how the Directors have discharged their
duties under section 172(1) of the Companies
Act 2006 is also available in the rest of
this Strategic Report and the Corporate
Governance Report.
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.
The key Board decisions made in the year are set out below:
Significant events/decisions
Stakeholders impacted
Considerations
Restructuring
All
• Impacted departments were consulted in respect
of changes to job descriptions.
• Where possible staff were consulted to re-deploy
to available roles.
Investment in technology
People and partners
• 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.
How we engage with our stakeholders are set out below:
Our people
Engagement
Our communities
Our investors
Engagement
Engagement
Our partners
Engagement
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 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.
We engage with our investors
through AGMs, formal quarterly
review meetings and regular
updates.
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
Frequency of engagement
Ongoing
Frequency of engagement
Monthly/Quarterly
Frequency of engagement
Ongoing
Impact on our business
High
Impact on our business
High
Impact on our business
High
Impact on our business
High
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Our responsible business
Our commitment to a sustainable future
Our values
The continued transformation of
Bonhill Group has strengthened
alignment with our values: passionate
about our communities; creating
exceptional value; striving for
excellence; and maximising the
potential of our people. The passion
for the communities we serve and the
exceptional value is indisputable in
the content and commitment to the
messages and quality of information
delivered. The drive for excellence
as our people adapted to a remote
world is evident from the quality of our
seamless virtual events and reporting.
Our people obtained new skills in
pivoting our offering in challenging
times providing the opportunity to
excel and flourish. And at all times,
an inclusive, collaborative, courageous
and respectful environment was
maintained.
Inclusive
Collaborative
Courageous
Respectful
What we did
in 2020
Negating the impact
of COVID-19/Moving to WFH
In preparation for the possibility of working
remotely, technology was tested in advance
to ensure this could withstand such a
transition and as the pandemic continued,
our people were able to obtain equipment
from the office to further support working
from home when safe to do so. Collaboration
was key in ensuring our offering could
continue to service our clients and
stakeholders.
The wellbeing of our people
was and continues to be of
paramount importance. From
the first week of home working,
the CEO commenced a weekly
round up sharing insights to
his personal remote working
situation as well as updating on
the status of the business and
celebrating successes on a brand,
team and individual level.
Our people were engaged to complete a
Remote Working Survey on two occasions in
Spring/Summer to get a sense of how they
were managing at home; what changes and
support they may need; and, to help shape
our thinking as to what office environment
we need to create for the future. A return
to the office during 2020 was only ever
going to be agreed on the condition of three
tests being met: Is it essential? Is it safe?
Is it mutually agreeable? In our judgement,
we were unable to answer all of these
questions positively at any one time however,
occasional use of the office with a limit on
numbers was permitted in the final quarter to
facilitate in-person team interaction and meet
new hires.
Emily Quinn
Content Project Manager
Sulina Odwong
Marketing Manager
Employee communication
The wellbeing of our people was and continues
to be of paramount importance. From the first
week of home working, the CEO commenced
a weekly round up sharing insights to his
personal remote working situation as well as
updating on the status of the business and
celebrating successes on a brand, team and
individual level. In addition to frequent team
contact, regular wellbeing communications
were circulated and people encouraged to
share their remote working set up, for example,
through the Working from Home series on
LinkedIn. An Employee Assistance Programme
was implemented and we adopted “self-focus
day” every Friday – a day to limit collaboration,
have space to think and support work-life
balance. We have fully supported flexibility in
working hours being mindful of limitations our
people may have in their home set up and also
to support home-schooling, messaging that
productivity prevails over working hours.
Supporting our people
through the transition
A series of internal talks on personal
development topics was established, again
involving the exceptional range of speakers
we are able to work with. Volunteers to
become Mental Health First Aiders were
recruited for which the training will take
place in 2021. Regular contact with those on
furlough was maintained ensuring they were
included on all internal communication.
From July, when the usual employee
engagement survey would have taken place,
we adapted this to become a shorter “pulse”
survey focusing on wellbeing during the
pandemic and remote working and about
working for Bonhill. These are repeated
quarterly to build a picture of how our people
are feeling. Results have been extremely
positive with high engagement and the vast
majority feeling supported by their manager,
by Bonhill, having regular contact with others
during the working day and having confidence
in the decisions Bonhill makes for our people
at this time.
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Our ESG offering
ESG Clarity
Following recent global expansion,
our ESG Clarity brand now educates
investors in the UK, Europe, Middle
East, South Africa, Asia and USA with
the highest quality news, analysis,
data-led articles, opinion, videos
and much more to ensure they have
the ‘clarity’ they need to embark on
investing responsibly. Our editorially
led, dedicated websites are designed to
assist fund selectors on how to integrate
ESG into their investment and business
processes and how to navigate the
evolving landscape.
DiversityQ
Progressive businesses are no longer
concerned with how to just ‘deal with’
issues raised by the diversity agenda.
Rather, they are now focusing on
how to embrace diversity within their
organisations, create an inclusive and
diverse workforce, working environment
and business culture, and maximise
the benefits of diversity through
increased productivity and improved
staff satisfaction. These should, in turn,
create a more sustainable business
model and consequently enhance
corporate returns.
DiversityQ Presents
In 2021 we launched DiversityQ
Presents, the new hub for our growing
‘Women in’ Series and much more.
We have listened to feedback and,
over the next few months, plan to
launch a variety of tools that will allow
the DQ and Women in communities to
voice their opinion on topics that mean
the most to them and in formats that
are accessible to all. These projects
will include roundtables, training
opportunities, seminars and podcasts,
that will all sit under the DiversityQ
brand.
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Financial Controller
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Our responsible business cont.
Environmental
The pandemic changed our approach to our
own environmental impact quite considerably.
During 2021 we will conduct wider
analysis of our total carbon footprint and,
on completion of that exercise, seek to
mitigate the impact where possible.
Social
The Company has benefitted in prior years
from the work of the internal charity and
social committee.
Group ethnicity
Our challenge in 2021 and beyond is to
take the forced changes and turn them into
long-term benefits and, now that we have
returned to more stable trading patterns,
we can plan, invest, and support a more
structured sustainable future programme.
134
Employees working remotely
8%
Cost-saving with new
InvestmentNews print supplier
In 2020 our focus shifted to making sure
we made every effort to communicate with
the wider business. During the year we
have surveyed our staff on a range of topics
to makes sure they have a clear channel
to voice their views. These surveys have
shaped our thinking on future working
arrangements, internal structure and support
and staff benefits. We have undertaken
a range of initiatives including a weekly
update from the CEO and Town halls
accompanied by creativity workshops to
promote internal best practice. We celebrate
a wellness week in January as well as
International Women’s and Men’s day with
a week-long calendar of events. We have
focused on mental health awareness and
colleague support whilst ensuring we do all
we can to keep our team safe.
Asian
Black/African
White
Mixed/Multiple
Other Ethnic Group
NSp
Group age
Group gender
As the scale of the pandemic
emerged it was clear that our
environmental impact was
changing radically with the
reduction in commuting for all
134 staff globally and the remote
management of the business
saw a halt to all domestic and
international travel.
In the early part of the year the primary
focus was our live event operation where
our biggest changes have been within
our event operations. For events, we use
myclimate.org to compensate for our
delegates’ flight 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.
As the scale of the pandemic emerged it
was clear that our environmental impact
was changing radically with the reduction in
commuting for all 134 staff globally and the
remote management of the business saw a
halt to all domestic and international travel.
The switch to virtual events reduced the
impact previously described in live events
and the temporary cessation of printing
titles reduced our impact further.
As we plan for our post COVID world we
have started several initiatives which will
reduce commuter travel by offering a fully
flexible working arrangement. The efficacy
of remote management will reduce our
international travel and we have now
changed our US print supplier to one with
more long-term sustainable credentials.
20-24
25-29
30-34
35-29
40-44
45-49
50-54
55-59
60-64
65+
NSp
4%
21%
15%
11%
10%
8%
12%
8%
1%
1%
9%
Male
Female
Other
NSp
We are equally pleased with the culture
we have built remotely, and the sense
of cohesiveness achieved in difficult
circumstances and, as the statistics highlight,
we are fortunate to have a strong, vibrant
and diverse team.
Our challenge in 2021 is to keep moving
forward on this path and, as appropriate,
safely guide our team back into our fully
flexible working arrangements.
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Governance
The Board of Directors is responsible
for the overall governance of the Group.
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.
This is then passed down to the various
Committees which oversee Audit,
Nomination, Remuneration and, in 2021,
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. During 2020, and in the early days
of the pandemic, we undertook a number
of planning and strategy days to make sure
we were all aware of the ever-changing
threats and opportunities. Dialogue with
managers and employees is encouraged
to make sure that all information can be
‘triangulated’ to ensure its accuracy. The
Board are invited to attend our regular
virtual events as well as our internal
creativity workshops and knowledge sharing
sessions. 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.
The Board is led by the Chairman who is
responsible for corporate governance as a
whole and ensuring the Board is effective
in directing the Company. The Board is
responsible for the overall strategy and
management of the Group. In 2020 the
formal schedule of matters specifically
reserved for the Board was reassessed
to include current objectives and policies,
financial reporting and controls, the approval
of expenditure above a certain threshold,
any investments or disposals over certain
thresholds and shareholder communications.
The challenges of 2020 required more than
the historic amount of time required by the
Board and the additional time requirement,
experience and quick decision making in an
often confusing and changing situation were
a key factor in navigating the pandemic.
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12%
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Chief Executive’s review
Centred on excellence
2020 was a difficult year for the
Group with the impact of COVID-19.
I am pleased that the business has
responded well with a strong virtual
events portfolio and an enhanced
digital offering. The pandemic forced
a reassessment of the business
lines and we enter 2021 with our
investment programmes and
restructuring complete, improved
and more efficient internal processes
and strong customer relationships
and some clear areas for growth.
We have seen a promising start to
2021 and, with the challenges of
2020 behind us, remain confident
that we will deliver an improved
financial performance despite the
changing landscape for live events.
Organic growth
Growth in Small Business
registered subscribers
2020
2019
4,767,965
2,118,471
Growth in Virtual Events
2020: Virtual
2019: Virtual
102
0
Growth in DiversityQ
registered subscribers
2020
2019
143,625
49,609
Introduction
2020 was an extremely challenging year
for the Group, but one which we have
weathered well, overcoming many obstacles
along the way and emerging well organised
and equipped to deal with the evolving
environment ahead. Despite the impact
of the global pandemic, we managed to
complete the year in a robust position
with a refined business model, improved
propositions for customers, successful
completion of our technology investment
programme, greater global collaboration
and a stronger Group identity.
The biggest direct impact of COVID-19
on the Group was the loss of revenue
from live events due to cancellations and
postponements, showing a 37% reduction in
Events revenue in 2020 compared with 2019.
Despite this, overall Group revenue in the
year was only down 27% against the previous
year. Additionally, gross margin increased
by 13% to 80% compared to the preceding
year as the Company continued its transition
to a more digital-first product offering.
COVID-19 required a wholesale change to
our Events proposition. Initially, we had to
postpone and then, in the vast majority of
cases, cancel all of our global live events and
then convert our offering to virtual which saw
excellent support from both attendees and
sponsors. The net result is that the Group's
Events revenue, which was £9.6 million
(representing 39% of total revenue) in the
year ended 31 December 2019, delivered £6.1
million in the year ended 31 December 2020
(“FY 2020” or the “Year”), of which £1.5 million
was from live events held pre-pandemic and
£4.6 million from the 102 virtual events run
between March 2020 and December 2020.
Our work on re-engineering the Group helped
us counter this reduction in revenue and
we also developed new product pipelines.
We delivered a range of new products in
our various titles and saw good growth with
new products in SmallBusiness.co.uk, part of
our re-branded Business Solutions division,
in our Fintech offering in the US, as part of
InvestmentNews (“IN”), and in our Content
Marketing business, Last Word Create, that
was only launched in January 2020. ESG
Clarity, a UK and European proposition, was
successfully launched in both the US and Asia
in the year. These activities reflect the ongoing
need to provide solutions for clients and are
testament to the strength of our brands and
relationships with clients, which have enabled
us to be innovative.
Global uncertainty means clients are seeking
to better understand their communities and
to find more effective ways to communicate
with them. We are continuing to develop
new products in 2021 and have six global
initiatives running to help rebuild our
revenues. One of which, Fintech for Advisers,
has already been launched in the US, and
ESG Clarity, which now operates on a global
basis, has launched its first global ESG event
in May 2021.
Financial information
Revenues for the Year were £17.8 million
(2019 £24.4 million). The Company delivered
a strong second half of the Year ("H2")
with £10.1 million of revenue, compared to
£7.7 million reported in the first half ("H1"),
and adjusted EBITDA of approximately
£1.55 million (H1: £1.69 million loss). This was
a result of the swift and positive action taken
during the early months of the pandemic.
These revenue numbers exclude UK
Government support of approximately
£1.0 million which has been presented as
part of the net operating expenses in the
income statement. Adjusted EBITDA for the
Year was £0.1 million (2019: £2.3 million), prior
to an adverse year end foreign exchange
movement of £0.2 million.
The result for the Year is in line with the
Company's expectations based on the
assumptions made in its announcement of
the placing of new shares on 9 April 2020.
It is important to recognise that this is a
significant achievement given the protracted
periods of lockdown during the Year and the
uncertainty around the return of live events.
Cash at 31 December 2020 was higher than
expected at £1.3 million (2019: £1.9 million),
although this does include the impact of
deferring the £0.3 million VAT payment into
2021. As at 28 February 2021, cash was
£1.6 million.
The Group incurred exceptional integration
and restructuring costs in the Year totalling
£1.4 million (2019: £3.6 million), mainly due
to the final integration into the Group of
each of InvestmentNews and Last Word
Media ("LWM"), which were acquired by the
Company in August 2018 and April 2019
respectively, as well as other restructuring
costs relating to COVID-19 in all of the
Group's businesses and the fundraising in
April 2020. With all of the integration and
restructuring now complete, we would not
expect to see any adjusting items in the
current year.
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Bonhill Group plc Annual Report & Financial Statements 2020
Chief Executive’s review cont.
Operational
highlights
A re-assessment of the entire
business’s activities in light
of COVID-19, which led to
restructuring, a focus on new
product development to drive
revenues, targeted investment
in growing areas and the disposal
of non-core activities.
Wholesale change in the finance
team to provide the analytics
to inform business decisions,
strong working capital and cash
management to manage an
uncertain future, improved budgeting
and forecasting to achieve the right
outcome.
Virtual event success, 102 delivered
from a standing start in Summer
2020, continued into 2021 with
40 planned for H1.
Technology infrastructure investment
completed giving a global IT platform
– driving improved performance,
better data and analytics capability
and increased speed of new product
development.
New Executive Committee created
and KPIs introduced to drive growth
in business units and increase global
collaboration across the Group.
The leaders of these businesses are joined
on the Group’s Executive Committee by Sarah
Thompson, Chief Financial Officer, Suzanne
Tomlinson, Head of HR, and Simon Collin,
Chief Technology Officer/Chief Product Officer.
This newly constructed team has been tasked
with a number of key items and reportable KPIs:
• Change the business mix to replace lost
event revenue with a growing level of
subscription or recurring revenues;
• Increase the business areas' operating
margin to achieve a blended Group
operating margin (before depreciation and
amortisation) of 15% by the end of 2023;
• Create a more stable employee base and
recruit high quality individuals while retaining
and developing existing staff; and
• Create engaging content that keeps us at the
heart of our communities.
A new LTIP was put in place to incentivise this
core team, details of which were announced
in October 2020, and are contained in the
Remuneration Committee report.
COVID-19 response
During 2020, the Company utilised
a range of measures to navigate the
COVID-19 operating environment. Self-help
measures included restructuring and the
implementation of a new divisional structure,
new KPIs and incentives to focus on an
increased level of recurring revenue, and
new product development. External support
included the Paycheck Protection Program
(“PPP”) in the US and the UK Government's
Coronavirus Job Retention Scheme. There
are currently no staff members on furlough
and headcount across the Group at the end
of the Year was 136 (31 December 2019: 162).
During 2021, the Company expects to see
additional savings from supplier agreements
including print, IT and services and reduced
rental costs, both from the renegotiated lease
in the US and from exiting the Company’s
head office, Fleet House, in May 2021. The
Group continues successfully to operate
remotely and although it is currently looking
for a new head office, it will be at a reduced
annual cost.
Strategic review
COVID-19 forced us to look at every aspect of
the business and it reinforced our view that we
need to build a business of balance between
revenue streams and a refocus on recurring
revenue. We remain focused on the provision of
Business Information, Events and Data & Insight
in our 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 have reorganised
into two clearly defined global business sectors:
Financial Services, and Business Solutions and
Governance. Both of these divisions serve
growing and constantly evolving markets and
are extremely complementary. Increasingly,
we have seen a sharp focus on Environmental,
Social and Governance (ESG), both in the
investment community, but also within the wider
business community we serve. 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. ESG Clarity was developed into
a global brand to reflect this theme and the
launch of our global ESG task force in January
2021 and the launch of our inaugural global
ESG event in May 2021, in conjunction with
the UN, highlights how we are servicing this
fast-growing area.
New divisional structure
Mid-year we made wholesale changes to
the Group's model and operating structure
to deliver cost savings, improved efficiencies
and clear business unit ownership.
We remain focused on Financial Services with
our strong presence in the UK, US and Asia.
InvestmentNews is run by Christine Shaw
and, in July 2020, Patrick Ponsford took over
responsibility for Last Word Media in the UK,
Europe and Asia, allowing me to concentrate
on being Chief Executive of the Group.
Our previously known Technology business,
led by Jon Seymour, which principally
comprised Information Age, has been
combined with Small Business, Growth
Business and What Investment and
rebranded as Business Solutions.
The newly formed Governance business
(formerly Diversity), also led by Jon Seymour,
is based on our leading Gender Diversity
franchise the 'Women in…' series and the
website DiversityQ. We have broadened our
activities to include all aspects of governance
and put them under the DiversityQ brand.
Financial Services
InvestmentNews
During the Year, InvestmentNews focused
primarily on driving recurring revenue through
increasing subscriptions and building a
broader customer base through key vertical
market segments, as well as continuing to
develop its core offering to the US financial
advisor market. It has launched three new
products since June 2020: ESG Clarity
US, a website focused on ESG investing; a
FinTech virtual event; and RPA Convergence,
a website focused on retirement planners.
This has continued in 2021 with Fintech for
Advisers. The speed at which new products
can be launched is a reflection of the return
on investment in the platform.
In the year, revenues were down 35%
year-on-year, principally due to the lack of
live event activity and pressures on print
advertising as a result of stopping the weekly
print title for three months. Most events were
rescheduled into a virtual format and were
successfully run in the second half.
During the year, there was encouraging
growth in digital activity as a result of the
investment in the website and enhancements
to core offerings. Digital revenues were in line
with the Board’s pre-COVID expectations and
we continue to see progress into 2021.
Of total revenues generated by
InvestmentNews in the Year, Business
Information accounted for 71%, Events 22%
and Data & Insight 7%.
The decision to stop production of
InvestmentNews' weekly print magazine and
replace it with a digital version was taken
in March 2020. Overall, there were £0.3m
of savings from reduced print production
and postage in the Year. Due to customer
demand, a print version was restarted in
July 2020 and is selling well in 2021. A new
print contract was signed in February 2021
producing an 8% saving with a supplier with
strong sustainability characteristics.
In August 2020, the Company exited the
Transitional Services Agreement ("TSA")
with Crain Communications, Inc ("Crain"),
InvestmentNews’ former owners, and, as set
out above, in December 2020 renegotiated
a new lease in the US away from Crain. The
final payment to Crain under the vendor loan
agreement is due in August 2021 and, as at
31 December 2020, $1.4m was outstanding.
As at 23rd March 2021, this stands at $0.8m.
While the exit from the TSA saw direct costs
reduce by $0.2m in H2 2020, the services
have been absorbed by the wider Group,
including finance, ad ops, technology and
associated operations.
With a completed technology investment
programme, new enhanced core website,
a developing portal strategy and continued
strong engagement with a broadening client
base, InvestmentNews is well placed to show
double digit revenue growth in 2021.
Last Word Media
Last Word Media saw revenues impacted
due to a historic focus on its ‘Congress’ live
event format. Total revenues in the Year were
down 36% (on a like-for-like basis) from the
previous year reflecting the lack of live event
activity between March 2020 and December
2020. The direct impact of COVID-19 saw
all of LWM's planned Q2 events move into
successful virtual formats in the final quarter
of the Year.
In February 2020, and in advance of
COVID-19, we took the decision to restructure
the European business to better align our
product offering to the broad European
audience. This reduced headcount by 12,
which, combined with the removal of the print
version of Expert Investor, created annualised
cost savings of £0.7m. Our European content
is now focused on three key regions, Nordics,
DACH and Southern Europe and with a
greatly reduced events calendar.
Another round of restructuring was taken
at the half year to reflect the outlook for live
events and the originally planned end of
furlough which resulted in a further seven
redundancies creating annualised cost
savings of £0.3 million.
The split of revenue by proposition generated
by LWM in the Year was Business Information
49%, Events 44% and Data & Insight 7%.
Despite the challenges, LWM is now a
much more streamlined business with a
better split of revenues and its creativity
and solutions mentality is working well. We
worked hard to develop innovative formats
with virtual events and new business areas.
Three notable successes were the global
rollout of the sustainability title, ESG Clarity;
the commercial success of the launch
of the Content Marketing business, Last
Word Create; and the development of new
products, including ESG MOTs and the
Responsible Ratings Index at Last Word
research. Last Word Asia’s revenue was flat
year-on-year at £0.9 million, which was a
credible performance given the challenges
faced in the region and the move to virtual
events.
Business Solutions
Our Business Solutions division consists of:
• SmallBusiness.co.uk,
• GrowthBusiness.co.uk,
• www.information-age.com
• www.whatinvestment.co.uk.
The impact of the new leadership introduced in
2019 was extremely beneficial in preparing the
business for the enormous spike in demand in
SmallBusiness.co.uk and GrowthBusiness.co.uk
during the early days of the pandemic. The
audience increased fivefold in the first weeks
of lockdown as people sought information
on all aspects of the various UK Government
initiatives. This continued throughout the Year
with the changes in UK Government guidance
and various initiatives which were put in place
to help UK SMEs. The increase in the number
of registered subscribers helped to drive the
strong growth seen in digital revenues.
Media performed extremely well, up
43% in the Year compared to the previous
year, due mainly to the diversification of
revenue streams in the last 18 months and
strengthening relationships with key clients.
New lead-generation products, content-based
partnerships and the growth in registered
subscribers were the key drivers of growth.
What Investment had a strong Year with its
revenues being 20% higher than those in 2019,
driven mainly by the easing of the competitive
landscape and the overall growth in personal
investing driven by lockdown conditions. The
launch of regular supplements and a recent
redevelopment of the website and magazine
should drive continued growth in 2021.
Information Age also had a strong 2020 with
media revenue up 126% from 2019. This is
a result of pre-COVID-19 changes feeding
through and the broadening of revenue
streams to include lead generation products,
webinars and premium gated content.
Across Business Solutions and Governance,
the combined revenue split by proposition in
the year was Business Information 48%, Events
52% and Data & Insight 0%.
Growth Company Investor (“GCI”), which
has published its monthly investment
recommendation newsletter for private
investors since 1996 and was originally part of
Vitesse Media, the predecessor company to
Bonhill, was sold to its editor in October 2020
for a nominal consideration. Bonhill Group
is focused on the global B2B arena within
Financial Services while GCI, with its B2C focus,
was a strategic outlier. In light of the operating
environment, the Board made the strategic
decision to dispose of GCI. No other Group
brands are up for sale.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Chief Executive’s review cont.
Governance
Governance (formally known as Diversity)
supports organisations with their policies,
processes, systems and behaviours to
ensure that they align with legislation.
Historically, this principally awards-led
business has successfully transitioned to
both virtual formats and also to a multi-day
summit serving multiple geographies.
We restructured the division in order
to better align the global events teams,
improve efficiencies and share best practice.
Ernest Attoh
Senior Marketing Executive
32
We are constantly assessing the potential
for the return of live events which will vary
region by region, but the signs for a return
of our Congress activities with Last Word
Media in the second half of the year are
encouraging and we will plan in line with
the UK Government’s four stage plan.
InvestmentNews is exploring live activity in
specific US States in line with the vaccine roll
out, customer demand and local guidance.
As a result of the actions taken by the
Company in 2020 to address its cost base,
operating structure and implement a digital-
first product set, and in light of the current
operating environment, the Board expects to
see revenue growth of approximately 12% in
2021 and to report EBITDA of approximately
£1.2 million, excluding any Government
support. The Board does not anticipate there
being any adjusting items this year. The
improvement in working capital management
seen in H2 2020, strong cash conversion
and the better-than-expected Year end
cash position should lead to a further
strengthening of the Company's balance
sheet in 2021.
Summary
2020 was a difficult year for the Group with
the impact of COVID-19. I am pleased that the
business has responded well with a strong
virtual events portfolio and an enhanced
digital offering. The pandemic forced a
reassessment of the business lines and we
enter 2021 with our investment programmes
and restructuring complete, improved and
more efficient internal processes and strong
customer relationships and some clear areas
for growth.
We have seen a promising start to 2021
and, with the challenges of 2020 behind
us, remain confident that we will deliver an
improved financial performance despite the
changing landscape for live events.
Simon Stilwell
Chief Executive
23 March 2021
ESG
A strong feature of the Year was the variety of
ESG initiatives which the Company developed
in response to demand from both investors
and providers in the area. We launched ESG
Clarity in both the US and Asia and this global
platform is well placed for the coming years.
Approximately 50% of all current RFPs received
by the Company have an ESG component
and our events portfolio, research and data
offerings and product set have been adjusted
to reflect this fast-growing trend.
Technology infrastructure
With our initial post-acquisition technology
investment complete, we are now augmenting
that with targeted initiatives as we look to
protect and grow revenues as well as to
enhance operational efficiency. We have
made significant upgrades to key websites
and have implemented key changes to
our technology to simplify and centralise
operations with additional control processes.
This includes a shift from using external
agencies to FTE resources. We see the
benefits of our investment programme in
both the speed at which we can launch new
products, but also the common standards and
practice across the Group which has allowed
greater global collaboration and the sharing
of best practice.
Dividend
In light of the prevailing operating
environment, and the Company's financial
situation, the decision was taken not to
recommend the payment of a final dividend
with the Company's results for the year
ended 31 December 2019 and similarly
we will not be recommending the payment
of a final dividend for the year ended
31 December 2020. It is very much the
Board's intention that the Company should
return to paying a dividend when it is
appropriate to do so.
Outlook
The impact of COVID-19 forced the Company
to take swift and decisive action to address
the changing operating environment.
These changes brought the Company
closer together as it moved successfully
into the virtual event arena and shared
brands, product and revenue opportunities
across the Group. This newfound unity and
collaboration will serve us well in the future.
It is our aim to have a year of delivery for
shareholders after the challenges of 2019
and the impact of the pandemic in 2020.
The new Executive Committee, KPIs, and
divisional structure are all in place to deliver
that outcome.
Enhanced structure
Better control of the business
Patrick Ponsford
Managing Director,
at Last Word
Media Ltd
Jonathan Seymour
Jonathan Seymour
Managing Director,
Managing Director,
Business Solutions
Business Solutions
and Governance
and Governance
L e v a r a g e the assets we have
Our
People
Sealing our
sales function
Empower
Q u a l
i t y of people
Deepen
sector focus
Our
Investors
Suzanne Tomlinson
Group Head of HR
Our
Partners
Geographic
expansion
a tf o r m
Quality o f p l
Seamless
integration
New capabilities
and ventures
Our
Communities
Growth cataly s t s
In 2020 the Committee
executed both the changes
required to immediately deal
with the pandemic but to also
plan for 2021 by working on a
range of global initiatives that
either exported existing brands
to new geographies or created
new products and revenue lines.
Executive Committee
As part of the restructure of the business
post the initial assessment of the impact of
the pandemic, we created a new Executive
Committee in July 2020. The purpose
was to give both operational and financial
responsibility to the business unit heads
and create a forum for all the heads in both
the operational and support functions to
come together and share best practice and
increase collaboration across all brands and
geographies.
Name
Simon Stilwell
Christine Shaw
Patrick Ponsford
Jon Seymour
Sarah Thompson
Suzanne Tomlinson
Simon Collin
Management position
Chief Executive Officer
InvestmentNews
Last Word Media
Business Solutions & Governance
Chief Financial Officer
Group Head of HR
Chief Technology Officer/Chief Product Officer
The team reflects both the commercial
activities but also the technology, product
and HR functions to align the essential
elements in the Group.
In 2020 the Committee executed both the
changes required to immediately deal with
the pandemic but to also plan for 2021 by
working on a range of global initiatives that
either exported existing brands to new
geographies or created new products
and revenue lines.
Internally the Committee utilised a range
of ‘pulse’ surveys to supplement their views
of the staff which enabled an appropriate
level of support for remote workers and
maintained a high level of communications
on the future workplace and the performance
of the business in light of the constantly
changing working environment.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Chief Financial Officer's review
An agile business
2020 was a tumultuous year for
Bonhill as it was for many companies
both in our industry and beyond.
The ongoing revisions to UK
Government guidance and the
unforeseen protracted length of
lockdowns in the UK and the US
meant that we were unable to put
on any live events from March to
December 2020. Whilst the initial
shock of the potential to lose up to
a third of our revenue was worrying,
management and all employees
turned their focus to how we could
adapt quickly to remain competitive
in this environment.
Revenue and gross margin
(see tables B & C)
Revenue reduced year-on-year by
£6.6 million (-27.1%) to £17.8 million as
a direct result of COVID-19 impacting the
Company’s ability to continue with live events
as originally planned. However, through
a change in product mix as described below,
the reduction in gross profit year-on-year was
only £1.9 milion (11.9%) and the overall gross
margin actually increased by 13% to 80%.
Business Information revenue reduced
year-on-year by 21% in 2020 to £10.7 million,
but within this, digital revenue remained flat
year on year at £7.6 million, and print revenue
declined by 48% to £3.1 million. This was a
deliberate change in product mix to migrate
the business away from reliance on our
traditional print magazines. This increase in
digital was particularly seen in our Business
Solutions business unit, where What
Investment increased revenue by 20% from
2019, and our Small Business and Growth
Business sites saw a combined increase in
revenue of 36%. This shift from print to digital
has realised benefits at gross margin across
the Group with a combined 11% increase to
86% since 2019.
As would be expected, Events revenue was
reduced by the largest amount in 2020
and was down 37% to £6.1 million (2019:
£9.6 million). The conversion of our Events
business to a virtual offering has been very
successful and has accounted for a large
proportion of the overall uplift in Group gross
margin as we moved from 54% in 2019 to
71% in 2020. The absolute margin on virtual
events is closer to 80%, but this blended
margin reflects the 14 live events that took
place in Q1 2020.
Data & Insight saw a reduction in revenue
of 17% to £1.0 million in 2020, mainly due to
reduced customer spending, a by-product
of COVID-19. However, through an increase
in gross margin from 71% to 81%, we have
managed to maintain the gross profit figure
which was flat on 2019.
Year ended
31 Dec
2020
Year ended
31 Dec
2019
Change £
Change %
Table A – Financial headlines
Key financials (£'ks)
Revenue
Gross profit
Gross margin
Adjusted EBITDA
Adjusted operating profit
Statutory operating profit
Cash
Adjusted basic EPS
Statutory basic EPS
Table B – Revenue
Business Information
Events
Data & insight
Total
17,812
14,334
80%
(146)
(8,343)
(10,660)
1,343
(10.41)p
(13.24)p
24,429
16,273
67%
2,312
1,387
(3,655)
1,891
2.24p
(9.28)p
Year ended 31 Dec 2020
BSG1
1,218
1,337
–
LWN
3,063
2,766
399
IN
6,414
1,971
644
2,555
6,228
9,029
Group
10,695
6,074
1,043
17,812
Table C – Gross margin
Business Information
Events
Data and insight
Total
BSG1
69%
66%
0%
65%
Year ended 31 Dec 2020
LWN
92%
69%
92%
82%
IN
86%
77%
85%
84%
Group
86%
71%
81%
80%
(6,617)
(1,939)
–
(2,458)
(9,730)
(7,005)
(548)
Year ended
31 Dec 2019
13,564
9,605
1,260
24,429
Year ended
31 Dec 2019
75%
54%
71%
67%
(27)%
(12)%
13%
(106)%
(702)%
(192)%
(29)%
Change
-21%
-37%
-17%
-27%
Change
14%
32%
14%
21%
1 BSG – Business Solutions and Governance, LWM – Last Word Media, IN – InvestmentNews.
The conversion of our Events business to
a virtual offering has been very successful
and has accounted for a large proportion
of the overall uplift in Group gross margin
as we moved from 54% in 2019 to 71%
in 2020.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Chief Financial Officer's review cont.
Operating costs (see table D)
(excl. depreciation, amortisation, lease
payments under IFRS 16 and share based
payments)
One of the positives to come from 2020
is that we have been able to spend time
focusing on fully integrating and improving
our back office systems and platforms and
finalising the technology work that had been
ongoing since 2018. Not only will this reduce
costs and drive operational efficiencies, it will
also allow management a much clearer view
of the financial performance of the business.
To review the underlying cost base of the
business, we need to acknowledge two
key points. One, that the acquisitions and
subsequent integrations of LWM and IN
have resulted in one-off costs to the
business and two, that we need to include
a full year of LWM costs, rather than the
eight months of (post acquisition) costs as
reported in the 2019 accounts. The second
half of 2020 marked the point at which
all the integration and restructuring work
was completed and therefore all future
costs were now processed as being purely
operational and would no longer be treated
as "adjusting".
Year-on-year the underlying cost base of the
business has reduced by £2.4 million.
While both staff and IT costs look to have
increased year-on-year, these are the two
areas that have been most affected by the
integration work and therefore are most inter-
twined with the adjusting items.
Throughout 2020, there has been a huge
amount of change to the employee base as
the Company has restructured itself post-
acquisitions and post COVID-19 to be better
positioned going into 2021. Whilst there is
a net headcount reduction of 41, there have
been 89 leavers and 48 joiners, bringing in
new skills and perspectives as our product
offering evolves.
2%
200%
2%
-85%
-47%
-0%
-1%
-62%
-12%
Group
177
48
(89)
136
Change £
Change %
Table D – Operating costs
Staff costs
IT
Legal & Professional
T&E
Office costs (excl. IFRS 16 rent)
Other costs
Total operating costs excl.
adjusting items
Adjusting items (see note 3)
Total operating costs
Year ended
31 Dec
2020
12,472
Year ended
31 Dec
2019
2
12,267
974
610
115
327
1,007
15,505
1,429
16,934
325
596
774
612
1,011
15,585
3,747
19,332
205
650
14
(659)
(285)
(5)
(80)
(2,318)
(2,398)
2 Includes a full 12 months of LWM for comparative purposes. Please note these are unaudited, proforma numbers.
Headcount3
Opening
Starters
Leavers
Closing
4
BUK
52
17
(24)
45
LWM
75
9
(38)
46
IN
50
22
(27)
45
3 Defined as number of people paid via monthly payroll
4 BUK equates to Business Solutions & Governance plus centralised, Group functions.
Table E – Cash and net debt
Cash
Borrowings
Lease liabilities under IFRS 16
Net cash/(debt)
Table F – Trade debtors
Current/not due
30-60 days past due
60-120 days past due
120+ days past due
Gross trade receivables
Provision
Net trade receivables
Net trade receivables as a % of revenue
Year ended
31 Dec
2020
Year ended
31 Dec
2019
1,343
(1,060)
(184)
99
1,891
(2,614)
(1,600)
(2,323)
Year ended
31 Dec
2020
Year ended
31 Dec
2019
1,862
404
332
769
3,367
(440)
2,927
16%
777
2,035
1,212
1,347
5,371
(160)
5,211
21%
Cash flow
The biggest financial focus for 2020 was to
conserve cash and manage working capital
during a period where the timing of revenue
and subsequent cash receipts were uncertain.
Whilst the year started off as planned, we
soon had to defer some Q1 events and nearly
all Q2 events to the last part of the year. As
in previous years, a large proportion of our
customers had already paid for these events
upfront in Q1 2020 or even in Q4 2019, giving
us a large deferred income balance to contend
with. Whilst we have been very successful at
converting our events to a virtual platform, and
thereby managed to reduce the value of cash
refunds to a minimum, it meant that much of
our Q4 revenue was non-cash generative and
merely reduced the deferred income.
To help mitigate this, we undertook the
following actions and government aid:
• Enhanced credit control processes and
procedures to materially reduce our
debtor days;
• Deferral of £0.3 million of Q1 2020 VAT
to be repaid in Q2 2021;
• Deferral of £0.9 million of PAYE payments
to HMRC, which were all repaid in full
before the year end;
• US Paycheck Protection Programme
loan (and subsequent grant) of £0.9 million;
• UK Bounce Back Loan of £0.1 million;
• UK receipts under the Government job
retention scheme of £0.2 million. We no
longer have any employees on furlough.
All of these actions combined resulted
in a cash balance at 31 December 2020
of £1.3 million (2019: £1.9 million). As at 28
February 2021, cash was £1.6 million.
Cash and net debt (see table E)
At the year end, we had a net cash position of
£0.1 million, including IFRS 16 lease liabilities. The
office lease in New York came to an end and the
vendor loan will be fully repaid in August 2021.
Trade debtors (see table F)
The benefits of the enhanced credit control
processes can be seen below where the
ageing of the debt has changed significantly
year on year.
The overall net trade receivables balance
has reduced by 44% year on year, and the
percentage of debt greater than 60 days past
due has reduced from being 48% of the gross
balance in 2019 to 33% in 2020.
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 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.
Whilst the global COVID-19 pandemic has
had a widespread macro-economic effect,
operationally the Group’s business was able to
transition to remote working seamlessly and has
been able to perform very effectively, managing
the expectations of clients and delivering a
continuous excellent service.
Nevertheless, the Group’s trading in 2020
has been adversely impacted by the COVID-19
pandemic as described in the Group Strategic
Report. Given this impact on trading, the
Directors have completed a comprehensive
going concern review and, in adopting the
going concern basis for preparing the financial
statements, the Directors have considered
the future trading prospects of the Group’s
businesses, the Group’s available liquidity
alongside the Group’s principal risks as set
out in the Strategic Report.
Taking account of the recent announcements
of the successful development of a vaccine
for COVID-19, and the distribution of the vaccine
in 2021, the base case scenario assumes a
modest improvement in trading conditions
during 2021, building on the momentum that
has been seen in the second half of 2020
when compared with the first three months of
the pandemic. The 2021 projections have been
created with most events assumed to be virtual
to try and minimise any further impact of COVID
and the potential of ongoing local lockdowns.
Digital revenue has remained broadly flat from
2019 to 2020 showing its resilience to being
adversely affected by the pandemic, and Data
& Insight consists mostly of recurring revenue
subscriptions which are expected to remain
reasonably stable. When comparing these
projections to 2019 and 2020, the Directors
believe that this is a relatively conservative
base case.
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The Group meets its day-to-day financing
and working capital requirements through
ongoing operating cash flows and available
cash. The Group’s forecasts and projections,
taking account of possible changes in trading
performance under various scenarios, show
that the Group will be able to operate within the
level of its current facilities until at least 30 June
2022. In addition, the Group has successfully
demonstrated in 2020 that it has the ability to
take significant additional steps, if required, to
mitigate the impact of any further downside
scenarios should they occur.
Cash levels are strong and the Group monitors
and manages its cash flows regularly and
carefully. Over the 15-month period of the
scenarios, cash balances are forecast to remain
at more than adequate levels to fund the
Group’s planned activities. While the Group has
taken advantage of government schemes to
defer its VAT payments from 2020 to 2021, and
subsequently result in a cash outflow in 2021,
overall net cash flow remains strong and positive
for the year.
While the Directors are comfortable that the
uncertainties in respect of cash flows referred
to above are not material uncertainties
that might cast doubt about the Group’s
ability to continue as a going concern, they
acknowledge that the long-term impact of
COVID-19 remains complicated and that it is
possible that the impact of the pandemic on
trading conditions could be more prolonged
or severe than currently forecast by the
Directors. If this were to prove to be the case,
the Group may need to implement further
operational or financial measures (including
the management of operating costs,
working capital, capital expenditure or other
similar measures) to ensure that the Group
continues to protect the business from such
downside risks.
Sarah Thompson
Chief Financial Officer
23 March 2021
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Principal risks and uncertainties
Managing risk effectively
How we manage risk
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.
The Board continually reviews
the potential risks facing the
Group and the controls in place
to mitigate any potential adverse
impacts.
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 impacts. 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.
Risk
Impact
Mitigation
1 9 COVID-19/Global
pandemic
The impact on the business of COVID-19
will continue into 2021 but will not be of
the same scale as in 2020. 2020 risks
were around the conversion of live events
to virtual, 2021 is around the ongoing
working capital impact from 2020 as well
as potential for key customers to go into
administration or to have similar working
capital issues. Customers may also have
further restrictions on third party spending,
thereby reducing our revenue potential.
The Group has made many changes to the way the
business operates, costs are being tightly controlled
and actions are being taken to conserve cash. New
customers are credit checked to reduce exposure to
bad debt and slow cash collection, plus we receive
alerts if any customer's financial situation changes.
2 6 Technology failure,
data loss and cyber
security
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.
3 6 Breach of data
protection legislation
4 9 Financial,
capital and liquidity
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.
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.
Any one of the risks listed here could put
pressure on our working capital and reduce
our ability to pay key suppliers to terms.
Having access to additional, flexible funding
would allow the Company to keep trading
as usual. Inability to raise funds, if needed,
could ultimately result in the Company going
into administration or being sold.
Regular conversations are held with the banks and
key investors to ensure they are kept up to date with
the financial and operational status of the Company.
Having robust budgeting processes in place allow
early sight of potential future capital issues so that
there is time to address the issue before it becomes
serious.
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Sponsorship Manager
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Directional change
Stable
Decrease
Increase
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Principal risks and uncertainties cont.
Risk
Impact
Mitigation
Risk
Impact
Mitigation
5 7 Economic
environment
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.
There is a strategic focus on developing must-have
brands and recurring multi-year revenue streams.
6 7 Exchange rate
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.
7 6 Regulatory change
The Group is at risk of any regulatory
change which affects the Financial Services
industry.
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.
8 7 Market
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.
9 9 Recruitment and
retention of key staff
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.
10 9 Major incident
11 6 Environmental,
Social and
Governance
(ESG) incl.
climate change
12 9 Governance
incl. Plc
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.
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.
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 ensures that there is effective use
of Committee structures and external advice
is obtained as requested. The Board is kept
appraised of performance against city forecasts.
Annual strategic plans, annual budgets, quarterly
reforecasts and monthly review against city
expectations help to identify issues early. CFO
maintains regular dialogue with analysts.
13 7 Ineffective change
management
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.
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Directional change
Stable
Decrease
Increase
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Board of Directors
A confident, dedicated and experienced team
Neil Sachdev
Non-executive Chairman
Simon Stilwell
Chief Executive
Sarah Thompson
Chief Financial Officer
Anne Donoghue ACIB
Non-executive Director
Jon Kempster
Non-executive Director
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.
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.
Sarah joined the Bonhill Group in May 2020,
and joined the Board as Chief Financial
Officer in September 2020.
Sarah previously held senior finance
positions at Escada SE and Redcentric
Plc. Prior to this, she held various finance
positions at Hallmark Cards UK, Homeloan
Management Limited and Barclays Plc.
Sarah is an associate of the Chartered
Institute of Management Accountants
and graduated with a First Class Degree
in Accounting and Finance from Lancaster
University.
Anne 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 (now Tesco Bank)
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 including operational lead for
the RBS/NatWest IT platform integration
programme. Since leaving banking Anne
has worked in events, digital marketing
and communications, including in media for
CityAM newspaper and for the business start-
up community.
Jon joined the Bonhill Group in June 2020 as
a Non-executive Director and the Chair of the
Audit Committee. He is also a member of the
Remuneration and Nomination Committees.
Jon’s career has included Board positions
at Delta plc, Fii Group plc, Linden plc, Low
& Bonar plc, Frasers Group plc, Utilitywise
plc and Wincanton plc. He is also currently a
Non-executive Director and Audit Committee
Chair at Ted Baker plc and Redcentric plc
and is a Trustee of the Delta plc pension
scheme.
Jon qualified as a Chartered Accountant
with Price Waterhouse in 1990 and has a BA
(Hons) in Business Studies from the University
of Liverpool.
Board diversity
Board composition
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Executive Directors
Non-executive Directors
Gender balance
Male
Female
Committee key
A Audit Committee
R Remuneration Committee
N Nomination Committee
Chair
Member
N
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Corporate Governance statement
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.
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.
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.
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 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 continues
to review and monitor its corporate
governance and, following its first internal
Board review, recognises that there
remain opportunities for improvement.
The Board has carried out a second
review in 2020 to look at progress from
the prior review.
Neil Sachdev
Non-executive Chairman
23 March 2021
How the Board operates
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
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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.
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. There
were two changes in Board composition in
2020. Firstly, Fraser Gray resigned from his
roles as a Non-executive Director and Chair
of the Audit Committee in June 2020 and
was replaced in both roles by Jon Kempster.
Secondly, David Brown resigned from his
role as Executive Director and Group Finance
Director in July 2020 and Sarah Thompson
joined the Board as Executive Director and
Chief Financial Officer in September 2020.
The Board considers that Anne and Jon are
independent, in character and in judgement,
and have no business relationships which
impact on their independence. In making
this judgement, Neil Sachdev, who is the
Non-executive Chairman of the Company,
is also considered to be independent in
character and in judgement, and to have no
business relationships which impact on his
independence. The Board took into account
that Neil Sachdev and Anne Donoghue
hold shares, but bearing in mind the small
percentage held, the Board determined that
Neil and Anne have both been independent
since their appointments as Directors.
Board effectiveness
The skills and experience of the Board are
set out in their biographical details on page
42. 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 Neil Sachdev,
Anne Donoghue and Jon Kempster bring
additional strategic, commercial, transaction
and leadership experience which will
be invaluable as the Board pursues the
Company’s growth strategy and continues
to transform the Company and its Group.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Corporate Governance statement cont.
How the Board
operates
Anne
Donoghue
Remuneration
Committee
Page 52
Simon
Stilwell
Neil
Sachdev
The Board
Page 42
Audit
Committee
Page 48
Nomination
Committee
Page 50
Jon
Kempster
Sarah
Thompson
Board meetings
The Board met 14 times during the year
to 31 December 2020. 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 following shows Directors’ attendance
at scheduled Board meetings during
the year.
11/11
Neil Sachdev
Neil Sachdev attended all Board meetings
and Committee meetings.
11/11
Simon Stilwell
Simon Stilwell attended all Board
meetings. He also attended Committee
meetings by invitation.
4/4
Sarah Thompson
Sarah Thompson was appointed in
September 2020 and has attended
all Board meetings since then. She
also attended Committee meetings
by invitation.
6/6
David Brown
David Brown resigned in July 2020. He
attended all Board meetings before his
resignation. He also attended Committee
meetings by invitation.
11/11
Anne Donoghue
Anne Donoghue attended all Board
meetings and Committee meetings.
5/5
Jon Kempster
Jon Kempster was appointed in June
2020 and has attended all Board and
Committee meetings since then.
6/6
Fraser Gray
Fraser Gray attended all Board meetings
and Committee meetings before his
resignation in June 2020.
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.
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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
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Bonhill Group plc Annual Report & Financial Statements 2020
Audit Committee report
Jon Kempster
Chair
The Audit Committee is chaired
by Jon Kempster, its other
members are Anne Donoghue
and Neil Sachdev.
Committee
attendance
3/3
Jon Kempster
Jon was appointed in June 2020
and attended all Committee meetings
since then.
5/5
Neil Sachdev
Neil attended all Committee meetings.
5/5
Anne Donoghue
Anne attended all Committee meetings.
Dear Shareholder
I joined Bonhill in June 2020 as the Group
was busy making the transition to the new
way of working during the global pandemic.
For employees across the different
geographic offices, it meant having to adapt
to working from home. The transition was
managed very successfully, and additional
work was undertaken to maintain the IT
controls and the overall control environment.
The financial and trading impacts are fully
explained elsewhere in this report including
the need to transition from physical events to
virtual. At the time of the Interims we booked
impairment charges which we have revisited
as part of the year end accounts preparation
and concluded that no further charges are
necessary. We have taken government
support which is clearly set out in the
report from Sarah.
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. 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 Committee met seven times between
the start of the year and the signing of this
report. I, as Chair of the Audit Committee,
have also met with the external auditors
without Executive Directors or management
present.
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. Sarah and the wider finance
team have improved the reporting of the
performance of the Group and the separate
divisions together with the timeliness of
reporting which during the pandemic has
been very welcome in navigating the difficult
trading environment.
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.
The Group does not have an internal audit
function, and this is reviewed annually.
The Committee 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 Chief Financial Officer attend the Audit
Committee meetings by invitation to ensure
the Committee is fully informed of material
events within the business. The Committee
monitors the nature and extent of non-audit
services provided by the external auditor.
A summary of the remuneration paid to
BDO LLP for audit and non-audit services
appears in note 3 to the financial statements.
Having reviewed the auditor’s independence
and performance, the Audit Committee
recommends that BDO LLP be re-appointed.
Significant issues
The Audit Committee received and
reviewed reports from management and
the external auditors setting out the areas
of significant judgement within the financial
statements for the period. These areas are
related to the impairment of goodwill and
intangible assets, the disclosure of costs as
exceptional adjusting items costs, the going
concern concept and the overall control
environment with specific focus on the ability
of management override. These areas were
discussed and challenged with management
during the period. They were also discussed
with the external auditors at the conclusion
of the audit of the financial statements
for the period.
1) Impairment of goodwill and intangible
fixed assets
An annual impairment review was
undertaken over the goodwill and intangible
assets to show they are not carried at
more than their recoverable amount. This
compares the present value of future cash
flows against the current assets held by the
Group. The key indicator of impairment for
Bonhill Plc at the time of the Interims was
that there had been a significant decline
in the market value of the entity and the
carrying amount of the entity’s net assets
was more than its market capitalisation.
The impact of COVID-19 in 2020 has had a
significant effect on the profitability of the
Group and forecasts for the business were
prepared to test the carrying value. The
resulting impairment charge was made at
the Interims of £6.6m. This was re-tested
at the year end and no further impairment
or write back was deemed necessary.
2) Going concern
The Committee has reviewed the Group’s
assessment of going concern over a period
greater than 12 months. In assessing the
Group’s going concern status, the Committee
has considered the Group’s financial
position presented in the 2021 Budget and
2022 plan recently approved by the Board.
In the context of the current challenging
environment as a result of COVID-19, a
number of alternative scenarios have also
been considered, including the modelling
of additional downside sensitivities. These
were based on the specific risks associated
with the COVID-19 pandemic on the trading
environment, including continued travel
restrictions and social distancing and
lower media revenue. The Committee has
concluded that the assumptions considered
are appropriate when assessing the Group’s
going concern status. The Committee has
also reviewed the Group’s reverse stress
test in further downside scenarios. In
addition, the Committee has reviewed this
with management and is satisfied that this
is appropriate in supporting the Group as
a going concern. The Committee received
regular updates on the steps taken by
management in response to the COVID-19
outbreak, including the additional liquidity
secured by way of government grants,
certain tax deferrals and management
of cash flow.
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3) Adjusting items
Adjusting items are reviewed on a
transactional level basis as to their nature
and intention. Items which are discrete,
time-bound and have arisen as a direct result
of a one-off activity, such as the acquisition
of a subsidiary company have been
recognised as adjusting. During August 2020
the Transitional Services Agreement with
Crain, the former parent of InvestmentNews,
finished and triggered the end point of the
migration and integration work. From this
point onwards there have been no more
adjusting items. Management do not expect
to recognise any adjusting items in 2021.
4) Control environment
Management confirmed to the Audit
Committee that it was not aware of any
material misstatements or immaterial
misstatements made intentionally to achieve
a particular presentation. In addition,
management have provided the Audit
Committee with confidence that through the
preparation of the year end accounts, the
financial control environment was found to be
adequate. The external auditors reported the
misstatements to the Audit Committee and
no material amounts remain unadjusted.
After reviewing and challenging the
presentations and reports from management
and consulting where necessary with the
external auditors, the Audit Committee
is satisfied that the financial statements
appropriately address the critical judgements
and key estimates (both in respect to the
amounts reported and the disclosures). The
Audit Committee is also satisfied that the
significant assumptions used for determining
the value of assets and liabilities have been
appropriately scrutinised, challenged and are
sufficiently robust.
Whistleblowing
The Audit Committee is responsible for
the review of the Company’s procedures
for responding to the allegations of whistle
blowers and the arrangements by which staff
may, raise concerns in confidence. It is hoped
that this service will encourage individuals to
speak out without fear of reprisal.
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49
Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Nomination Committee report
Neil Sachdev
Non-executive Chairman
The Nomination Committee is
chaired by Neil Sachdev and its
other members are Jon Kempster
and Anne Donoghue.
Committee
attendance
3/3
Neil Sachdev
Neil attended all Committee meetings.
2/2
Jon Kempster
Jon was appointed in June 2020
and attended all Committee meetings
since then.
3/3
Anne Donoghue
Anne attended all Committee meetings.
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 2020,
however an internal Board evaluation was
conducted in February 2021 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, Jon Kempster and Sarah Thompson
(as new appointments) will stand for election
at the Annual General Meeting. Anne
Donoghue will also stand for re-election as
she has served on the Board for three years.
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
year ended 31 December 2020. 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 39.
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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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Remuneration Committee report
Committee
attendance
3/3
Anne Donoghue
Anne attended all Committee meetings.
3/3
Neil Sachdev
Neil attended all Committee meetings.
3/3
Jon Kempster
Jon was appointed in June 2020
and attended all Committee meetings
since then.
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 2020, in note 6 to the financial
statements.
Our people
Throughout the pandemic the organisation
has put the physical and mental welfare of
our people at the forefront of our decisions.
Through a range of regular wellbeing
initiatives, one to one and collaborative
sessions we have sought to ensure that
each member of the team felt connected
and supported throughout. In addition, a
range of staff surveys were carried out
throughout the year to ensure every member
of the global team could input to decisions
affecting their personal work-style options
as the organisation navigated evolving
changes to guidelines in each country. These
surveys also helped us to further check the
pulse of how our people were feeling. The
response to the surveys has been extremely
positive in terms of both response rate and
feedback and reflects the spirit of “one team”
engendered across the entire organisation.
My thanks go to every member of the
organisation for outstanding collaboration
and mutual support throughout such a
challenging year. The views of our people
will continue to shape our post pandemic
workplace policy, enabling us to build
on everything we have learnt during the
pandemic and deliver flexible and inclusive
options to meet the needs of a diverse
work-force community.
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.
Base salaries were not increased for
Executive Directors in 2020, and the annual
bonus cap remained unchanged at 150% of
salary. Reflecting Company performance, the
threshold performance targets were not met
and no bonus was payable for the year to
31 December 2020.
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. Following the mid-year
changes to the Group’s operating structure,
as outlined in the CEO’s report, a new Long
Term Incentive Plan was put in place to
incentivise this core team. New options were
granted under the Enterprise Management
Scheme rules to Executive Directors and
members of the senior management team:
• Options will be measured over a three-year
period subject to share price targets, as
adjusted for any dividend payments
• 50% of the options will vest subject to share
price performance over three years, with
vesting starting from a threshold of 15p and
full vesting for a share price of 27p or above
• 50% of the options will vest subject to share
price performance over four years, with
vesting starting from a threshold of 20p and
full vesting for a share price of 35p or above
• These targets represent significant growth
from the share price at the date of grant
• No retesting of performance is permitted
• Vesting shares will have a minimum holding
period of one year from their respective
vesting date
A number of outstanding options were
cancelled in the year.
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 19 to the financial
statements.
Directors’ remuneration in the year to
31 December 2020
Details of Executive Directors’ and
Non-Executive Directors’ emoluments
in the year are presented at note 6 to
the financial statements. No Director
participated in any discussion or decision
on their own remuneration.
Anne Donoghue
Chair
The Remuneration Committee
is chaired by Anne Donoghue; its
other members are Jon Kempster
and Neil Sachdev.
Dear Shareholder
Committee terms of reference
Under the terms of reference adopted on
27 June 2018, 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 are set by the
Chairman and the Executive Directors.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Directors’ report
Directors’ responsibilities in the preparation of the financial statements
The Directors submit their report and the audited financial statements of Bonhill Group Plc for the year ended 31 December 2020.
The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Results and dividends
The results for the year are set out on page 63. 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 41.
Financial risk management
Financial risks are considered and disclosed in note 17 to the financial statements.
Directors
The following Directors have held office since 1 January 2020:
Neil Sachdev, Non-executive Chairman
Anne Donoghue, Non-executive Director
Jon Kempster, Non-executive Director
Fraser Gray, Non-executive Director
Simon Stilwell, Chief Executive
Sarah Thompson, Chief Financial Officer
David Brown, Group Finance Director
(appointed 29 June 2020)
(resigned 29 June 2020)
(appointed 15 September 2020)
(resigned 21 July 2020)
Capital structure
Refer to note 18 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 2020 in the ordinary shares of the Company were as follows:
N Sachdev
A Donoghue
S Stilwell
As at 31 December 2020
Ordinary shares of 1p each
Number
As at 31 December 2019
Ordinary shares of 1p each
Number
248,810
404,534
2,865,500
48,810
4,534
720,973
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 44.
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
23 March 20201
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.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Independent auditor’s report to the members of Bonhill Group Plc
Opinion on the financial statements
In our opinion:
Overview
• 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 2020 and of the
Group’s loss for the year then ended;
Coverage1
87% (2019: 89%) of Group revenue
• the Group financial statements have been properly prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006;
• the Parent Company financial statements have been properly prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 and as applied in accordance with the provisions of the Companies Act 2006; and
Key audit matters
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Bonhill Group Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended
31 December 2020 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 their preparation is applicable law and international accounting standards in conformity
with the requirements of the Companies Act 2006 and, as regards the Parent Company financial statements, as applied in accordance with the
provisions 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 believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remain 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to continue
to adopt the going concern basis of accounting included:
• Discussing with the Directors 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 28 February
2021 as well as past performance of the Group
• Critically evaluating the related costs projections underlying the model with reference to the market performance of the Group as well as past
performance of the Group;
• Agreeing the bank statements as at 28 February 2021 in order to corroborate the actual cash at bank balances to compare against the projected
cash on this date;
• Reviewing the reasonableness of the 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 related to this. These were challenged
based on our expectations and corroborated to supporting evidence; and
• Assessing the Directors’ 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.
• Agreed the loan repayments as shown in the model to the totals per the repayment schedule.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the ability to continue as a going concern for a period of at least twelve months from when the financial
statements are authorised for issue. We refer to the Directors disclosure regarding going concern in Note 1 to the financial statements.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
82% (2019: 75%) of Group total assets
98% (2019: 96%) of Group loss before tax
Accounting for the acquisition of Last Word Media (UK) Limited
Impairment of goodwill, intangible assets and investments
Revenue recognition
Classification of exceptional items
2020
2019
M
N
N
N
N
N
N
N
The acquisition of Last Word Media (UK) Limited represented a once-off transaction requiring
significant audit attention in the 2019 financial year and is not therefore a Key Audit Matter in 2020.
Materiality
Group financial statements as a whole
£222,000 (2019:£307,000) based on 1.25% (2019: 1.25%) of group revenue
1 These are areas which have been subject to a full scope audit by the group engagement team.
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. We also addressed the risk of management override of internal
controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
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 risks of material misstatements at each component. We identified
eight centrally controlled components of which three significant components were subject to full scope audits for Group reporting purposes.
All the significant components were audited by us.
For the remaining five components which were not considered significant, two were in-scope for full scope audits performed by us as they
required a statutory audit and review procedures were performed by us on the remaining three components.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Independent auditor’s report to the members of Bonhill Group Plc cont.
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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) that 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.
Key audit matter
Impairment
of Goodwill,
intangible assets
and investments
Accounting policy:
Note 1
Intangible assets:
Note 10
Total intangible
assets:
£19,382,000
(2019: 27,501,000)
The group has material intangible assets, including
goodwill, arising primarily from historic acquisitions
as part of business combinations.
As at 31 December 2020 the Group carried
£10.8 million of goodwill and £8.6 million of other
intangible assets on the Consolidated Statement
of Financial Position. During the year ended
31 December 2020, impairment charges totalling
£6.2 million have been recognised in respect
of goodwill, £0.3 million in relation to publishing
rights, and £0.02 million in relation to customer
relationships.
Management are required to test annually for
impairment, or more frequently if there are
indications that goodwill might be impaired.
Management tests impairment through determination
of the value in use of each cash generating unit
identified (CGU). Management has determined that
goodwill and intangible assets are allocated to 9
cash generating units in preparing their assessment.
To determine the value in use of each CGU,
Management prepares a detailed impairment
model using a number of judgemental assumptions
(as described in the related note to the financial
statements). These include Board-approved
forecasts of the expected cash flows of the Group for
a period of 5 years from 31 December 2020 as well
as discount rates and growth rates.
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 the future revenues and operating profit
margins, as well as the discount factor and long term
growth rates.
How the scope of our audit addressed the key audit matter
We have considered whether management’s impairment
review methodology is compliant with IAS 36 impairments
of assets. As part of our audit workings completed, we have
challenged Management’s value in use determined for each
CGU within the model prepared, including the assumptions
underpinning the model.
Our work in relation to the model and its assumptions was
as follows:
• Testing of the arithmetic accuracy of the model used by
Management;
• Agreeing the underlying cash flow projections for each CGU
to Board approved forecasts;
• Compared the current year performance against prior year
budgets including the impact of COVID19 to assess the
accuracy of the budgeting process;
• Considering the appropriateness of the CGUs identified by
management and the allocation of the assets on these;
• Tested a sample of corporate costs allocation to specific
CGUs;
• With reference to independent support calculated an
appropriate range of discount factors i.e. calculated a range
of discount rates using Cost 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:
We found that the assumptions used in the impairment model
were reasonable and that there are no further indications
of impairment at the balance sheet date, other than the
impairment already accounted for during the year.
Key audit matter
Revenue
recognition
Accounting policy:
Note 1
Analysis of
revenue by core
proposition:
Note 2
Total revenue
£17,812,000 (2019:
£24,429,000)
Classification
of exceptional
items (“adjusting
items”)
Note 3
Total adjusting
items £2,322,000
(2019: £5,148,000)
Several revenue streams exist across the group
involving different timings and methods of revenue
recognition which entails a degree of complexity.
We considered whether a significant risk of material
misstatement arose from the recognition of revenue
throughout the year and whether revenue had been
recognised in the correct accounting period.
The key audit matter identified relates to the
existence of revenue throughout the year and cut off
around the year end and the recognition thereof.
The Group presents alternative performance
measures to provide supplemental information to
enable users of the financial statements to gain an
understanding of the Group’s financial performance.
During the year, the Group recognised items
classified as ‘adjusting items’ amounting to a
£2.3 million credit prior to the impact on taxation
(2019: [£5.1 million]). The disclosure of adjusting
items and their presentation on the face of the
consolidated income statement remains a key audit
matter given the level of Management judgement
involved as inappropriate classification of such items
would impact on the disclosure of profit before tax.
In 2020 these items principally relate to integration
projects, restructuring of the Group's operations and
impairment of acquired intangibles.
The identification of adjusting items and their
presentation on financial statements presents a risk
as to whether the costs represent truly adjusting
items and are consistently applied year on year.
Due to the judgement involved in assessing what
represents an exceptional costs there exists a risk
that results may be artificially distorted through the
inappropriate classification of costs as exceptional.
How the scope of our audit addressed the key audit matter
A summary of procedures performed to address the Key Audit
Matter include:
• For 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 the 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.
• Reviewed a sample of invoices raised before and after year
end and confirmed these to the ledger posting date to check
that these were accounted for in the correct period and
accrued for appropriately.
Key observations:
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 include:
• Considering whether the Group’s accounting policy for
adjusting items is consistent with the accounting standards
and the FRC guidelines on alternative performance measures;
• Testing the classification of the selected adjusting items to
underlying supporting information such as third party contracts
and invoices to confirm the nature of the item and whether it
represents an adjusting item;
• Considering whether the recognition of adjusting items has
been applied consistently between periods by comparing the
nature of these items for the two years ended 31 December
2020 and 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
statement are clearly and accurately explained and that a
reconciliation to statutory financial information is presented;
and
• Challenging the Directors on the inclusion of items with a
higher degree of judgement categorised as exceptional costs
and corroborating the appropriateness of their response with
supporting information.
Key observations noted:
The adjusting items appear to be consistently and
appropriately applied.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Independent auditor’s report to the members of Bonhill Group Plc cont.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. 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 level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence,
when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
Group financial statements
Parent company financial statements
2020
£
2019
£
2020
£
2019
£
Materiality
222,000
307,000
155,400
122,800
Basis for determining
materiality
1.25% of revenue
1.25% of revenue
Allocated percentage of
group materiality
Allocated percentage
of group materiality
Rationale for the
benchmark applied
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
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
The company is not
generating significant
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.
The company is not
generating significant
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.
Performance materiality
166,000
230,000
116,500
92,100
Basis for determining
performance materiality
75% of materiality based
on our assessment
of the overall control
environment.
75% of materiality based
on our assessment
of the overall control
environment.
75% of materiality based
on our assessment
of the overall control
environment.
75% of materiality based
on our assessment
of the overall control
environment.
Component materiality
We set materiality for each component of the Group based on a percentage of between 50% and 70% (2019: 40% to 70%) of Group materiality
dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged from £122,000
to £155,400 (2019: £122,800 to £214,900). In the audit of each component, we further applied performance materiality levels of 75% (2019: 75%)
of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £11,000 (2019: £15,000). We also
agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
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. 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 course of 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 this gives rise to a material misstatement in the financial statements
themselves. 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.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act
2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
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.
In the light of the knowledge and understanding of the Group and 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.
Matters on which
we are required to report
by exception
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 statement, 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.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Independent auditor’s report to the members of Bonhill Group Plc cont.
Consolidated statement of comprehensive income
for the year ended 31 December 2020
Year ended 31 December 2020
Year ended 31 December 2019
Adjusted
results
£’000
Adjusting
items
£’000
Statutory
results
£’000
Adjusted
results
£’000
Adjusting
items
£’000
Statutory
results
£’000
Notes
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
2
3
11
10
4
7
8
9
9
17,812
–
17,812
24,429
–
24,429
(17,940)
(1,429)
(19,369)
(22,233)
(3,637)
(25,870)
–
(153)
(8,062)
(8,343)
(211)
(8,554)
(3)
–
–
(888)
(2,317)
–
(153)
(8,950)
(10,660)
(5)
(216)
(2,322)
(10,876)
–
(3)
(8,557)
(2,322)
(10,879)
(33)
(104)
(672)
1,387
(491)
896
106
1,002
–
–
(1,405)
(5,042)
–
(5,042)
(106)
(5,148)
(33)
(104)
(2,077)
(3,655)
(491)
(4,146)
–
(4,146)
(251)
–
(251)
(455)
–
(455)
(8,808)
(2,322)
(11,130)
547
(5,148)
(4,601)
(10.41)p
(13.24)p
2.24p
(11.26)p
(9.28)p
(9.28)p
The results above are derived from continued operations. The notes on pages 71 to 100 form an integral part of these financial statements.
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.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below:
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override
of controls) and determined that the principal risks were related to posting journal entries to increase revenue or profits, and management
bias in accounting estimates including those relating to key audit matters outlined above. In order to address the risk of material misstatement
associated with fraud we performed the following procedures:
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most significant
frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework, rules of the
London Stock Exchange for companies trading securities on AIM, the Companies Act 2006 and relevant tax compliance regulations;
• We understood how the Group is complying with those frameworks by making enquiries of management, those responsible for legal and compliance
procedures and the Company Secretary. We corroborated our enquiries through our review of Board minutes and papers provided to the Audit
Committee;
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur, by meeting with
management from across the Group to understand where they considered there was a susceptibility to fraud;
• Our audit planning identified fraud risks in relation to management override and inappropriate or incorrect recognition of revenue (revenue
recognition assessed as a Key Audit Matter above). We obtained and understanding of the processes and controls that the Group has established to
address risks identified, or that otherwise prevent, deter and detect fraud; and how management monitors that processes and controls; and
• With regards to the fraud risk in management override, our procedures included journal transaction testing, with a focus on large or unusual
transactions based on our knowledge of the business. We also performed an assessment on the appropriateness of key judgements and estimates,
for example Management’s impairment assessment (the risks associated with the impairment of goodwill, intangible assets and impairment has been
assessed as a Key Audit Matter above), which are subject to managements’ judgement and estimation, and could be subject to potential bias.
• We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any
indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed
and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the
less likely we are to become aware of it.
A further description of our responsibilities is available 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
23 March 2021
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Consolidated statement of financial position
as at 31 December 2020
Company statement of financial position
as at 31 December 2020
31 December
2020
£’000
31 December
2019
£’000
Notes
31 December
2020
£’000
31 December
2019
£’000
Notes
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
10
10
11
8
15
13
8
16
15
14
16
15
8
18
18
19
10,760
8,622
190
315
158
20,045
4,596
1,343
5,939
17,109
10,392
343
459
1,493
29,796
8,070
1,891
9,961
25,984
39,757
(426)
(50)
–
(476)
(3,354)
(1,010)
(184)
–
(4,548)
(464)
(1,046)
(712)
(2,222)
(5,265)
(1,568)
(888)
(23)
(7,744)
(5,024)
(9,966)
20,960
29,791
986
1,759
245
1,976
104
16,562
(672)
20,960
486
–
217
1,976
104
27,429
(421)
29,791
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
Non-current liabilities
Borrowings
Deferred tax liability
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
10
10
11
8
15
12
13
16
8
14
15
18
18
19
–
760
85
–
–
18,562
19,407
3,024
148
3,172
–
825
159
85
261
26,445
27,775
3,026
290
3,316
22,579
31,091
(50)
(129)
(179)
(6,281)
–
(6,281)
–
–
–
(3,724)
(260)
(3,984)
(6,460)
(3,984)
16,119
27,107
986
1,759
245
1,976
104
11,049
16,119
486
–
217
1,976
104
24,324
27,107
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 £13.3 million (31 December 2019: £4.3 million).
The notes on pages 71 to 100 form an integral part of these financial statements.
The notes on pages 71 to 100 form an integral part of these financial statements.
The financial statements on pages 63 to 69 were approved and authorised to issue by the Board and signed on its behalf on 23 March 2021.
The financial statements on pages 63 to 69 were approved and authorised to issue by the Board and signed on its behalf on 23 March 2021.
Sarah Thompson
Chief Financial Officer
23 March 2021
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Sarah Thompson
Chief Financial Officer
23 March 2021
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Consolidated statement of changes in equity
for the year ended 31 December 2020
Company statement of changes in equity
for the year ended 31 December 2020
Share
capital
£’000
Share
premium
£’000
Share-
based
payment
reserve
£’000
Merger
reserve
£’000
Other
reserves
£’000
Retained
earnings
£’000
Foreign
exchange
reserve
£’000
Total
£’000
Share
capital
£’000
Share
premium
£’000
Share-
based
payment
reserve
£’000
Merger
reserve
£’000
Other
reserves
£’000
Retained
earnings
£’000
Foreign
exchange
reserve
£’000
4,086
(8,343)
34
22,903
Balance as at 31 December 2018
343
26,715
(4,146)
–
(4,146)
–
(455)
(455)
(4,146)
(455)
(4,601)
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
Balance as at 31 December 2018
343
26,715
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
Capital reduction
Balance as at 31 December 2019
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
Other movements
–
–
–
143
–
–
–
–
486
–
–
–
500
–
–
–
–
–
–
9,881
(524)
–
–
(36,072)
–
–
–
–
2,000
(241)
–
–
68
–
–
–
–
–
149
–
–
217
–
–
–
–
–
28
–
–
–
–
–
1,976
–
–
–
–
1,976
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3,982)
104
–
–
–
–
–
–
–
–
–
–
(136)
40,054
27,429
(10,879)
–
(10,879)
–
–
–
12
–
–
–
–
–
12,000
(524)
149
(136)
–
(421)
29,791
–
(251)
(251)
(10,879)
(251)
(11,130)
–
–
–
–
2,500
(241)
28
12
–
–
–
143
–
–
–
–
486
–
–
–
–
–
–
9,881
(524)
–
–
(36,072)
–
–
–
–
500
2,000
–
–
(241)
–
68
–
–
–
–
–
149
–
–
217
–
–
–
–
–
28
245
–
–
–
–
1,976
–
–
–
–
1,976
–
–
–
–
–
–
4,086
(11,302)
–
–
–
–
–
–
–
(3,982)
104
–
–
–
–
–
–
(4,292)
–
(4,292)
–
–
–
(136)
40,054
24,324
(13,275)
–
(13,275)
–
–
–
1,976
104
11,049
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
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
Balance as at 31 December 2019
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
Balance as at 31 December 2020
986
1,759
245
1,976
104
16,562
(672)
20,960
Balance as at 31 December 2020
986
1,759
Total
£’000
19,910
(4,292)
–
(4,292)
12,000
(524)
149
(136)
–
27,107
(13,275)
–
(13,275)
2,500
(241)
28
16,119
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Consolidated statement of cash flows
for the year ended 31 December 2020
Company statement of cash flows
for the year ended 31 December 2020
Cash generated/(used in) operations
Interest paid
Taxation paid
M&A costs
Integration costs
Restructuring costs
Net cash generated 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 borrowings
Lease repayments
Government C-19 funding received
Dividends paid
Net cash generated from financing activities
Foreign exchange movement
Net decrease 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.
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
940
(243)
–
–
(1,627)
–
(930)
(35)
(299)
–
(334)
2,259
(1,604)
(860)
989
–
784
(68)
(548)
1,891
1,343
1,225
(345)
(107)
(817)
(1,621)
(1,208)
(2,873)
(257)
(689)
(5,840)
(6,786)
9,484
(1,613)
(523)
–
(136)
7,212
(29)
(2,476)
4,367
1,891
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
Other exceptional costs
Net cash used in investing activities
Financing activities
Proceeds from issue of ordinary shares
Receipt/(repayment) of borrowings
Repayment of lease liability
Loans from subsidiaries
Dividends paid
Net cash generated from financing activities
Foreign exchange movement
Net decrease 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
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(981)
6
(975)
(32)
(290)
–
(1,014)
(1,336)
2,259
50
(140)
–
–
2,169
–
(142)
290
148
(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
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the cash flow statement
Notes to the financial statements
for the Year ended 31 December 2020
(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
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(10,879)
(4,146)
(13,275)
(4,292)
3
216
8,950
153
(18)
1,429
(146)
2,921
(1,835)
940
–
491
2,077
104
149
3,637
2,312
213
(1,300)
1,225
215
2
8,392
67
(18)
824
(3,793)
(4)
2,816
(981)
–
9
206
52
149
2,056
(1,820)
(627)
580
(1,867)
(b) Reconciliation of liabilities arising from financing activities
Group – year ended 31 December 2020
31 December
2019
£’000
Cash flows
£’000
Loan
forgiveness
£’000
Termination
of leases
£’000
Non-cash
movement
£’000
Items reclassified from
non-current to current
during the period
£’000
31 December
2020
£’000
Non-cash changes
1,046
1,568
–
1,600
–
(1,604)
989
(860)
–
–
(863)
–
–
–
–
(508)
(36)
36
(76)
(48)
4,214
(1,475)
(863)
(508)
(124)
(1,010)
1,010
–
–
–
–
1,010
50
184
1,244
Group
Long-term borrowings
Short term borrowings
Government funding*
Lease liabilities
Total liabilities from
financing activities
* Non-cash movement relates to the change in the GBP equivalent in the $1.1m loan from the date of loan receipt to the date of loan forgiveness.
Group – year 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
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
–
–
290
290
(87)
(9)
(34)
(130)
(1,568)
1,568
–
–
1,046
1,568
1,600
4,214
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 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.
Whilst the global COVID-19 pandemic has had a widespread macro-economic effect, operationally the Group’s business was able to transition to remote
working seamlessly and has been able to perform very effectively, managing the expectations of clients and delivering a continuous excellent service.
Nevertheless, the Group’s trading in 2020 has been adversely impacted by the COVID-19 pandemic as described in the Group Strategic Report. Given
this impact on trading, the Directors have completed a comprehensive going concern review and, in adopting the going concern basis for preparing the
financial statements, the Directors have considered the future trading prospects of the Group’s businesses, the Group’s available liquidity alongside the
Group’s principal risks as set out in the Strategic Report.
Taking account of the recent announcements of the successful development of a vaccine for COVID-19, and the distribution of the vaccine in 2021, the
base case scenario assumes a modest improvement in trading conditions during 2021, building on the momentum that has been seen in the second half
of 2020 when compared with the first three months of the pandemic. The 2021 projections have been created with most events assumed to be virtual
to try and minimise any further impact of COVID and the potential of ongoing local lockdowns. Digital revenue has remained broadly flat from 2019 to
2020 showing its resilience to being adversely affected by the pandemic, and Data & Insight consists mostly of recurring revenue subscriptions which are
expected to remain reasonably stable. When comparing these projections to 2019 and 2020, the Directors believe that this is a relatively conservative
base case.
The Group meets its day-to-day financing and working capital requirements through ongoing operating cash flows and available cash. The Group’s
forecasts and projections, taking account of possible changes in trading performance under various scenarios, show that the Group will be able to operate
within the level of its current cash until at least 30 June 2022. In addition, the Group has successfully demonstrated in 2020 that it has to ability to take
significant additional steps, if required, to mitigate the impact of any further downside scenarios should they occur.
Cash levels are strong and the Group monitors and manages its cash flows regularly and carefully. Over the 15-month period of the scenarios, cash
balances are forecast to remain at more than adequate levels to fund the Group’s planned activities. While the Group has taken advantage of government
schemes to defer its VAT payments from 2020 to 2021, and subsequently result in a cash outflow in 2021, overall net cash flow remains strong and positive
for the year. One part of determining the robustness of the going concern model included running reverse stress tests in order to understand what would
hypothetically need to occur in order for the Group’s cash position to break even. As mentioned above, the Board considers these scenarios extremely
unlikely and would undertake any necessary mitigating actions well in advance of this materialising into an issue.
While the Directors are comfortable that the uncertainties in respect of cash flows referred to above are not material uncertainties that might cast doubt
about the Group’s ability to continue as a going concern, they acknowledge that the long-term impact of COVID-19 remains complicated and that it is
possible that the impact of the pandemic on trading conditions could be more prolonged or severe than currently forecast by the Directors. If this were
to prove to be the case, the Group may need to implement further operational or financial measures (including the management of operating costs,
working capital, capital expenditure or other similar measures) to ensure that the Group continues to protect the business from such downside risks.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
1. Significant accounting policies cont.
1. Significant accounting policies cont.
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 2020.
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.
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.
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. 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.
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:
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.
Customer relationships
7 years straight line
Software
5 years straight line
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 2.
During the period, no individual customer accounted for more than 10% of the reported revenue.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
1. Significant accounting policies cont.
1. Significant accounting policies cont.
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
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.
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.
Leased assets and obligations cont.
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.
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
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.
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 16 provides details of the applicable interest rates. There is no material variance
between book and fair values.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
1. Significant accounting policies cont.
1. Significant accounting policies cont.
Financial instruments cont.
Government funding and grants
The Paycheck Protection Programme loan was initially recognised as borrowings on the balance sheet of Bonhill Group Inc and remained as such until the
loan was forgiven by the Small Business Administration in the United States. At that point, the loan was written off the balance sheet and recognised as
part of net operating expenses in the income statement.
Cash received under the UK Coronavirus Job Retention Scheme, in relation to employees who were on furlough at the time, was recognised part of net
operating expenses in the income statement.
The UK Bounceback loan received in December 2020 was recognised on the Company balance sheet where it will remain until it is repaid in full.
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
Description and purpose
Represents the nominal value of equity shares.
Share premium
Amount subscribed for share capital in excess of the nominal value.
Share option reserve
Represents equity-settled share-based employee remuneration until such options are exercised.
Judgements and estimates cont.
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
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. Should an impairment be made, the corresponding investment
in subsidiary is also impaired.
Going concern
The Group has limited forward visibility and like all organisations, at this stage it is hard to predict the full extent of the impact of COVID-19. Consequently,
there is a high degree of uncertainty in respect of future outcomes, however, the various stress test scenarios indicate that the Group can continue to
operate within its banking facilities.
In the event that there is a more significant downturn than in the scenarios tested, there are further mitigating actions which could include but are not
limited to, further reductions in non-business critical expenditure as well as the potential for headcount reductions. As a consequence, the Directors have
formed a judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Group has adequate resources to
continue in operational existence and meet its liabilities as they fall due over the going concern review assessment period.
Other reserve
Retained earnings
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.
2. Segmental analysis
Merger reserve
Where the Group has applied merger relief under the UK Companies Act s615.
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.
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 10. 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.
Adjusting items
Adjusting items are reviewed on a transactional level basis as to their nature and intention. Items which are discrete, time-bound and have arisen as a
direct result of a one-off activity, such as the acquisition of a subsidiary company have been recognised as adjusting. During August 2020 the Transitional
Services Agreement with Crain, the former parent of InvestmentNews, finished and triggered the end point of the migration and integration work. From this
point onwards there have been no more adjusting items. Management do not expect to recognise any adjusting items in 2021.
Analysis of revenue by core propositions
Business Information
Events
Data & Insight
Total
Analysis of revenue by country
United Kingdom
Europe, Middle East and Africa
North America
Asia Pacific
Total
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Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
10,695
6,074
1,043
17,812
7,880
–
9,029
903
17,812
13,564
9,605
1,260
24,429
8,205
1,344
14,337
543
24,429
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
2. Segmental analysis cont.
Year ended 31 December 2020
Reportable segmental income statement
Revenue
Adjusted EBITDA
Adjusted operating profit/(loss)
Statutory operating profit/(loss)
Statutory profit/(loss) before tax
Year ended 31 December 2019
Reportable segmental income statement
Revenue
Adjusted EBITDA
Adjusted operating loss
Statutory operating loss
Statutory loss before tax
Segmental assets and liabilities
Bonhill UK
InvestmentNews
Last Word Media
Total Group
Last Word Media
£’000
Bonhill UK
£’000
InvestmentNews
£’000
6,228
506
47
56
34
2,555
(2,586)
(6,264)
(7,318)
(6,526)
9,029
1,934
(2,126)
(3,398)
(4,384)
Last Word Media
£’000
Bonhill UK
£’000
InvestmentNews
£’000
6,710
907
551
66
44
Assets
2020
£’000
7,143
16,572
2,269
25,984
3,822
(1,815)
(2,085)
(4,312)
(4,368)
Liabilities
2020
£’000
(1,736)
(1,772)
(1,516)
(5,024)
13,897
3,220
2,921
591
178
Assets
2019
£’000
4,187
24,176
11,394
39,757
Total
£’000
17,812
(146)
(8,343)
(10,660)
(10,876)
Total
£’000
24,429
2,312
1,387
(3,655)
(4,146)
Liabilities
2019
£’000
(1,731)
(5,149)
(3,086)
(9,966)
3. 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
Impairment of intangible assets
Lease amortisation
Foreign exchange (gain) or loss
Operating lease rentals in respect of land and buildings
Staff costs
Directors’ remuneration
Events costs
Print/digital related costs
Impairment relating to expected credit losses
Grant income related to COVID-19*
Other costs
Adjusting operating costs
Adjusting items
Statutory operating costs
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
Note
5
6
153
743
6,601
718
180
24
9,950
626
1,769
1,513
–
(1,025)
4,903
26,155
2,317
28,472
104
79
–
593
54
73
10,698
516
4,853
1,420
33
–
4,619
23,042
5,042
28,084
*
Includes £0.2 million UK furlough income and £0.9 million PPP US funding.
Other costs include: freelance and contractors, print magazine costs, distribution costs, technology costs, travel and expenditure, marketing and
professional fees.
(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
– Fees in connection with prior period
Other services
Fees payable to the Company’s auditor and its associates for other services:
– The audit of Company’s subsidiaries
– Advice in connection with Interim results
– Corporate finance transaction support in relation to acquisition of Last Word Media
– Tax work performed in relation to acquisition of Last Word Media
The disclosure of the auditor’s remuneration stated above relates to the Company’s auditor, BDO LLP, and its associates.
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
67
20
60
40
3
–
–
42
27
–
72
–
102
35
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
3. Operating loss cont.
5. Staff costs
(c) Adjusting items
The Group incurred certain costs in the year ended 31 December 2020 and the year ended 31 December 2019 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
Intangible asset write-off
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
805
–
624
888
–
2,317
1,208
808
1,621
1,295
110
5,042
Staff costs (excluding Directors)
– Wages and salaries
– Social security costs
– Share-based payments charge
– Pensions
Average monthly number of persons employed by the Group:
Adjusting items are reviewed on a transactional level basis as to their nature and intention. Items which are discrete, time-bound and have arisen as a
direct result of a one-off activity, such as the acquisition of a subsidiary company have been recognised as adjusting. During August 2020 the Transitional
Services Agreement with Crain, the former parent of InvestmentNews, finished and triggered the end point of the migration and integration work. From this
point onwards there have been no more adjusting items. Management do not expect to recognise any adjusting items in 2021.
The restructuring costs in the year broadly relate to two key activities. One was the closure of the European sales division of Last Word Media, and the
other was in relation to streamlining senior management roles. Post the acquisitions of InvestmentNews and Last Word Media, the decision was made to
have a more global senior executive team (as mentioned in the CEO review), and as a result many senior roles across the Group were made redundant.
The integration costs relate to the work undertaken to align the technology systems onto one platform and fully integrate the data and processes across
the Group. More detail behind this can be found in the technology report on page 8.
4. 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)/credit
Operating loss
Net finance costs
Loss before tax
Taxation
Loss after tax
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(146)
(1,429)
(1,575)
(153)
(8,950)
18
(10,660)
(216)
(10,876)
(3)
(10,879)
2,312
(3,637)
(1,325)
(104)
(2,077)
(149)
(3,655)
(491)
(4,146)
–
(4,146)
Senior management
Finance and administration
Editorial/design/events
Marketing and sales
6. Directors’ remuneration
Executive:
Simon Stilwell
Sarah Thompson (appointed 15 Sep 2020)
David Brown (resigned 21 July 2020)
Non-executive:
Neil Sachdev
Anne Donoghue
Jon Kempster (appointed 29 June 2020)
Fraser Gray (resigned 29 June 2020)
N Dowdall (resigned 21 March 2019)
Total
Group
Company
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
8,791
879
10
270
9,950
9,407
870
149
272
10,698
2,153
259
6
125
2,543
1,531
167
149
30
1,877
Group
Company
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
15
19
70
50
154
12
13
74
65
164
10
16
18
5
49
7
7
27
7
48
Salary
Pension
Bonus
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
*
215
40
163
50
30
15
15
–
528
–
2
11
–
0
0
1
–
14
–
–
–
–
–
–
–
–
–
215
42
174
50
30
15
16
–
542
204
–
195
50
31
–
31
38
549
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* 2019 figures have been re-presented to be consistent with current year and now only include the costs of the Plc directors rather than additional costs of Subsidiary directors
as before.
During the period, the Company made pension contributions of £14k on behalf of the Directors (31 December 2019: £3.2k). Some Directors had non-zero
pension contributions which are rounded down and these are shown as "0”.
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.
No share options were exercised during the period (31 December 2019: nil).
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
6. Directors’ remuneration cont.
8. Income tax
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
2020
Number
Granted
Number
Forfeited/
lapsed
Number
31 December
2019
Number
7,440
7,441
376,000
376,000
1,802,000
1,802,000
–
–
–
–
1,802,000
1,802,000
(148,809)
(148,808)
–
–
–
–
156,249
156,249
376,000
376,000
–
–
4,370,881
3,604,000
(297,617)
1,064,498
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
–
–
–
–
–
–
–
–
–
–
–
–
–
(156,249)
(156,249)
(268,500)
(268,500)
(849,498)
–
–
–
156,249
156,249
268,500
268,500
849,498
Simon Stilwell
Sarah Thompson
(appointed 15 Sep 2020)
David Brown
(resigned 21 July 2020)
7. Finance costs
Interest payable on bank loan and overdrafts
Net interest recognised under IFRS 16 lease liabilities*
* Includes the effect of the early termination of the US lease. See note 15.
Exercise
price
Pence
80.0
80.0
1.0
1.0
1.0
1.0
–
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
26/10/2020 to 25/10/2023
26/10/2020 to 25/10/2024
26/10/2020 to 25/10/2023
26/10/2020 to 25/10/2024
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
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(218)
2
(216)
(431)
(60)
(491)
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
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
–
(6)
55
49
–
286
12
(198)
–
(152)
(52)
–
(28)
24
(4)
–
(245)
136
111
–
2
4
Corporation tax on UK profits is calculated at 19.00% (31 December 2019: 19.00%) of the estimated assessable profit for the year. Corporation tax on US
profits is calculated at 23.88% (31 December 2019: 23.88%) 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
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(10,876)
(4,146)
Loss before tax multiplied by the standard rate of corporation tax in the UK of 19.00%
(2,066)
(788)
Effects of:
Profits taxed at US rate of 23.88% (31 December 2019: 23.88%)
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
(96)
409
96
–
27
225
–
1,287
115
(3)
(14)
166
207
–
34
–
(28)
433
(10)
–
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
8. Income tax cont.
Deferred and current tax assets and liabilities can be reconciled as follows:
Deferred tax assets as at 1 January 2020
Movement in the year
Effect of foreign exchange revaluation
Deferred tax assets as at 31 December 2020
Deferred tax liabilities as at 1 January 2020
Movement in the year
Effect of foreign exchange revaluation
Deferred tax liabilities as at 31 December 2020
Net deferred tax liabilities
Current tax liability as at 1 January 2020
Adjustment in respect of prior years
Current tax charge
Received
Effect of foreign exchange revaluation
Current tax asset as at 31 December 2020
Group
£’000
Company
£’000
459
(144)
–
315
85
(85)
–
–
£’000
£’000
(464)
38
–
(426)
(111)
–
(129)
–
–
(129)
£’000
£’000
(23)
60
(6)
(24)
–
7
–
–
–
–
–
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 £11.5 million
(31 December 2019: £8.6 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 £27k, 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.
9. 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)
Based on adjusted earnings
Profit/(loss) attributable to owners of the parent
Weighted average number of ordinary shares in issue
Basic earnings per share (pence per share)
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(10,879)
(4,146)
82,196,705
44,671,798
(13.24p)
(9.28p)
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(8,557)
1,002
82,196,705
44,671,798
(10.41p)
2.24p
(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)
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(10,879)
82,196,705
14,451,762
(4,146)
44,671,798
–
96,648,467
44,671,798
(11.26p)
(9.28p)
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
10. Intangible assets
Group
Cost
1 January 2019
Additions (external)
Additions at acquisition
Write off relating
to intangible assets
Foreign exchange movement
1 January 2020
Additions (external)
Foreign exchange movement
31 December 2020
Amortisation and impairment
1 January 2019
Amortisation charge for the year
Additions at acquisition
Write off relating
to intangible assets
Foreign exchange movement
1 January 2020
Amortisation charge for the year
Impairment of intangibles
Foreign exchange movement
31 December 2020
NBV
Website
development
costs
£’000
Software
£’000
Publishing
rights
£’000
Customer
relationships
£’000
Brand
£’000
Sub-total
£’000
Goodwill
£’000
Total
£’000
542
118
107
–
–
767
56
(3)
820
461
79
60
–
–
600
68
–
(2)
666
154
18
571
–
–
–
589
241
–
830
18
–
–
–
–
18
143
–
(12)
149
681
1,162
–
–
(11)
–
3,624
–
1,300
–
(117)
5,730
–
526
–
(186)
11,076
689
1,933
(11)
(303)
1,151
4,807
6,070
13,384
–
(119)
–
(188)
297
(310)
11,511
–
6,053
(108)
(345)
17,111
–
(103)
22,587
689
7,986
(119)
(648)
30,495
297
(413)
1,151
4,688
5,882
13,371
17,008
30,379
716
58
–
(9)
–
765
45
329
–
1,139
12
131
427
–
–
(14)
544
455
(35)
964
3,724
289
810
–
–
(34)
1,065
817
26
(77)
1,831
4,051
1,615
1,374
60
(9)
(48)
2,992
1,528
355
(126)
4,749
8,622
2
–
–
–
–
2
–
6,246
–
6,248
10,760
1,617
1,374
60
(9)
(48)
2,994
1,528
6,601
(126)
10,997
19,382
Note that the tax amortisation benefit of the InvestmentNews brand and customer relationships will be amortised over 15 years.
The breakdown of goodwill, publishing rights, brand and customer relationships intangible asset values by brand are as follows:
Goodwill
Growth Company Investor Ltd
Information Age Media Ltd
InvestmentNews LLC
Last Word Media
31 December
2020
£’000
31 December
2019
£’000
–
–
7,212
3,548
10,760
42
414
10,600
6,053
17,109
10. Intangible assets cont.
Publishing rights
What Investment
Information Age Media Ltd
Brand
InvestmentNews
Last Word Media
Customer relationships
InvestmentNews
Last Word Media
Useful
Economic Life
(UEL)
Remaining
UEL
31 December
2020
£’000
31 December
2019
£’000
20
5
–
12
12
196
190
386
Useful
Economic Life
(UEL)
Remaining
UEL
31 December
2020
£’000
31 December
2019
£’000
10
12
7
10
2,611
1,113
3,724
3,041
1,222
4,263
Useful
Economic Life
(UEL)
Remaining
UEL
31 December
2020
£’000
31 December
2019
£’000
7
10
4
8
3,642
409
4,051
4,517
488
5,005
The Group tests goodwill for impairment at each reporting date. If there are indicators of impairment, then other intangible assets are also tested.
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. At 30 June 2020, due to reduced actual and forecast revenues resulting from the COVID-19 pandemic,
an indicator of impairment was identified in respect of goodwill. As a result, a review for impairment was performed and an impairment of £6.6m, was
recognised on a value in use basis. In estimating value in use, a discount rate of 16% (31 December 2019, 14%) was used as well as a long-term growth
rate of 1% (31 December 2019: 2%).
At 31 December 2020 the impairment tests were re-run with updated assumptions and a greater degree of certainty heading into 2021 and beyond.
The growth rate used in the cash flow forecast was 1% (31 December 2019: 2%). The rate used to discount the forecast cash flows was 14% (31 December
2019: 14%) and reflects a slight reduction in the levels of market uncertainty from those seen at the time of the Interim results. The projections built into
the impairment test assume a revenue uplift on 10% into 2021 and a further 15% into 2022, while expenditure is assumed to be relatively flat, even if the
composition changes within it. It is worth noting that should the WACC increase to 15% or higher, then this may give rise to a future impairment. While the
forecasts still support the impairment made at the interims, there is no need for any further impairment to be made at this time.
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
11. Property, plant and equipment
Cost
1 January 2019
Additions
At acquisition
1 January 2020
Additions
Disposal
Foreign exchange movement
31 December 2020
Depreciation
1 January 2019
Charge for the year
At acquisition
1 January 2020
Charge for the year
Disposal
Foreign exchange movement
31 December 2020
Net book value
31 December 2020
31 December 2019
Fixtures, fittings and equipment
Group
£’000
Company
£’000
152
257
458
867
35
(39)
(7)
856
27
104
393
524
153
(5)
(6)
666
190
343
116
118
–
234
32
(39)
–
227
23
52
–
75
67
–
–
142
85
159
12. Investments
Company
Cost
1 January 2019
Additions
31 December 2019
31 December 2020
Impairment
1 January 2019
31 December 2019
Impairment
31 December 2020
Net book value
31 December 2020
31 December 2019
Subsidiary
undertakings
£’000
17,959
8,496
26,455
26,455
(10)
(10)
(7,883)
(7,893)
18,562
26,445
During the year, the decision was made to recognise an impairment of £7.9 million against the Company investments in order to better reflect the NBV of
the intangible assets held post acquisitions (see note 10 for more information).
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
Online, print publishing & events
for investors and entrepreneurs
Online, print publishing & events
for investors and entrepreneurs
USA
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
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Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
13. Trade and other receivables
Trade receivables
Provision for impairment of trade receivables
Other receivables*
Prepayments and accrued income
Deferred expenses
Amounts owed from subsidiary undertakings
Group
Company
31 December
2020
£’000
31 December
2019
£’000
31 December
2020
£’000
31 December
2019
£’000
3,367
(440)
2,927
1,383
261
25
–
4,596
5,371
(160)
5,211
2,365
454
40
–
8,070
527
(137)
390
314
69
–
2,251
3,024
490
(87)
403
749
26
2
1,846
3,026
* Other receivables consist of rent deposits and event venue deposits.
The Group’s financial assets are short term in nature. In the opinion of the Directors, the carrying values equate to their fair values.
Additional information relating to the provision for impairment of trade receivables can be found in note 17.
14. Trade and other payables
Trade payables
Taxation and social security
Other payables
Accruals
Deferred income
Amounts owed to subsidiary undertakings
Group
Company
31 December
2020
£’000
31 December
2019
£’000
31 December
2020
£’000
31 December
2019
£’000
697
495
505
1,024
633
–
3,354
1,587
75
639
824
2,140
–
5,265
150
–
313
494
65
5,259
6,281
606
–
190
241
91
2,596
3,724
The Group’s financial liabilities are short term in nature. In the opinion of the Directors, the carrying values equate to their fair values.
15. Right-of-use asset
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.
Right-of-use asset
Carrying value as at start of the period
Additions to right-of-use assets
Amortisation charged
Termination of leases
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
Termination of leases
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
Group
2020
£’000
1,493
(2)
(820)
(508)
(5)
158
Group
2020
£’000
1,600
2
3
(902)
(508)
(11)
184
£’000
184
–
184
2019
£’000
968
1,139
(593)
–
(21)
1,493
2019
£’000
1,018
1,139
60
(583)
–
(34)
1,600
£’000
888
712
1,600
90
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
15. Right-of-use asset cont.
Right-of-use asset
Carrying value as at start of the period
Additions to right-of-use assets
Amortisation charged
Termination of lease
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
Termination of lease
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
Company
16. Borrowings cont.
The interest-bearing loans are repayable as follows:
2020
£’000
261
–
(185)
(76)
–
–
£’000
260
–
3
(156)
(107)
–
–
£’000
–
–
–
2019
£’000
–
290
(29)
–
–
261
£’000
–
290
3
(33)
–
–
260
£’000
260
–
260
Within one year
Between one and two years
Between two and five years
Total
17. Financial risk management
Group
31 December
2020
£’000
31 December
2019
£’000
1,010
–
50
1,060
1,568
1,046
–
2,614
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 monitor 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 12 months, so that management
can ensure that sufficient financing is in place as it is required. Given the increased uncertainty of liquidity due to COVID, there is (and has been for the
last six months) a prioritised focus on cash forecasting. The Chief Financial Officer models the monthly cash flow on a daily basis to ensure there are no
surprises. Management have worked with our key customers and suppliers to ensure that the overall working capital cycle is as smooth as possible.
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:
During 2020 the Group terminated two leases. The first was the former Bonhill office located at New Broad Street, London and the second was the original
lease acquired under InvestmentNews and owned by the former parent, Crain. A new lease has been secured on the same office, effective from 1 January
2021.
At the balance sheet date, the only remaining leases related to the current Bonhill office in Clerkenwell, London (formerly belonging to Last Word Media)
and the office in Hong Kong.
Maturity analysis at 31 December 2020
16. Borrowings
Vendor loan
UK Bounceback loan
Group
31 December
2020
£’000
31 December
2019
£’000
1,010
50
1,060
2,614
–
2,614
Group
Borrowings
Lease financial liability
Trade and other payables
Total liabilities
Company
Borrowings
Trade and other payables
Total liabilities
The vendor loan held with Crain Communications Inc was 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. This loan will be fully repaid by August 2021.
Total fees relating to the vendor 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.
The weighted average interest rate on this loan has been 7.64% since inception.
During the year the Group received a loan of $1.3 million under the US Paycheck Protection Programme. This was subsequently fully forgiven in December
2020 and was converted to a grant and recognised in the income statement as part of net operating expenses.
The Company took out a UK Bounceback Loan for £50,000 in December 2020. As per the terms of the loan, this is not repayable for the first 12 months.
The interest rate on the loan is fixed at 2.5% per annum and it has a term of 72 months.
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Less than
6 months
£’000
Between
6 months
and 1 year
£’000
Between
1 year and
5 years
£’000
–
–
3,354
3,354
–
6,281
6,281
1,010
184
–
1,194
–
–
–
50
–
–
50
50
–
50
Total
£’000
1,060
184
3,354
4,598
50
6,281
6,331
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
17. Financial risk management cont.
Maturity analysis at 31 December 2019
Group
Borrowings
Lease financial liability
Trade and other payables
Total liabilities
Company
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
Total
£’000
2,797
1,663
5,265
9,725
266
3,724
3,990
Trade and other payables consist of trade payables, other payables, accruals and amounts owed to subsidiary undertakings as shown in note 14.
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.
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 2020
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 2020
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
Total asset
£’000
Total
liability
£’000
–
–
–
–
(1,060)
(184)
(1,244)
Fixed
rate
£’000
–
–
–
–
–
1,343
–
1,343
–
–
–
–
–
4,596
4,596
(3,354)
–
–
(3,354)
1,343
4,596
5,939
–
–
–
–
Floating
rate
£’000
Non-interest
bearing
£’000
Total asset
£’000
148
–
148
–
–
–
3,024
3,024
(6,281)
(6,281)
148
3,024
3,172
–
–
–
–
–
(3,354)
(1,060)
(184)
(4,598)
Total
liability
£’000
–
–
–
(6,281)
(6,281)
17. Financial risk management cont.
Interest rate risk cont.
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
Fixed
rate
£’000
Floating
rate
£’000
Non-interest
bearing
£’000
Total asset
£’000
Total
liability
£’000
–
–
–
–
(2,614)
(1,600)
(4,214)
Fixed
rate
£’000
–
–
–
–
–
(260)
(260)
1,891
–
1,891
–
–
–
–
–
8,070
8,070
(5,265)
–
–
(5,265)
1,891
8,070
9,961
–
–
–
–
Floating
rate
£’000
Non-interest
bearing
£’000
Total asset
£’000
290
–
290
–
–
–
–
–
3,026
3,026
(3,724)
–
–
(3,724)
290
3,026
3,316
–
–
–
–
–
–
–
(5,265)
(2,614)
(1,600)
(9,479)
Total
liability
£’000
–
–
–
(3,724)
–
(260)
(3,984)
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
2020
£’000
31 December
2019
£’000
31 December
2020
£’000
31 December
2019
£’000
4,750
(440)
4,310
7,736
(160)
7,576
633
(137)
496
613
(87)
526
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
17. Financial risk management cont.
Credit risk exposure cont.
Movements on the Group and Company’s provision for impairment of trade receivables:
17. Financial risk management cont.
Foreign currency risk
The Group’s policy is not to use forward contracts and therefore none were outstanding at the year end (31 December 2019: None). The following table
summarises the Group’s sensitivity to translational currency exposures at 31 December 2020.
Financial assets
As at start of period
Addition to provision
Utilisation of provision
As at end of period
Group
Company
31 December
2020
£’000
31 December
2019
£’000
31 December
2020
£’000
31 December
2019
£’000
160
316
(36)
440
127
33
–
160
87
55
(5)
137
32
55
–
87
2020 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:
There has been much work done in 2020 to improve credit control processes, reconcile customer accounts and resolve outstanding queries, all
culminating in a reduction to Group debtor days by over a month. The introduction of the Group-wide CRM system has made huge improvements to
the invoicing process meaning that invoices are accurate first time and our customers are mostly paying these new invoices to terms. COVID-19 has
not heavily impacted our debt collection, and whilst there are a few customers which have gone into administration in 2020, these are identified in the
workings and 100% provided for. Any debt more than a year old or debt which was recognised before the acquisition by the Group has been fully provided
for. This is expected to be a one-time provision, and is not representative of the trade receivables balance going forwards.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss (“ECL”) 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 has identified political and economic uncertainty in its key operating
countries as the key macroeconomic factors affecting its customers. The provision is calculated by management on a specific basis based on their best
estimate of recoverability considering the age and specific circumstances relating to the debtor.
As at 31 December 2020, the lifetime expected loss provision for trade receivables is as follows:
Debtors ‘at risk’
Bonhill
InvestmentNews
Last Word Media
Total debt ‘at risk’
Provision calculation
Bonhill
InvestmentNews
Last Word Media
Total credit provision
Lifetime ECL
10%
78
188
–
266
8
19
–
27
3%
12
–
–
12
–
–
–
–
1%
–
–
–
–
–
–
–
–
50%
97
12
–
109
49
6
–
55
100%
275
61
21
357
275
61
21
357
Total
£’000
462
261
21
744
332
87
21
440
Net foreign currency financial assets/(liabilities)
GBP
USD
EUR
CAD
AED
NOK
RON
Other
Total net exposure
18. Called up share capital
Issued and fully paid ordinary shares of 1p each
As at 1 January 2019
Shares issued during the year
As at 1 January 2020
Shares issued during the year
As at 31 December 2020
£’000
10%
305
(277)
(454)
413
Functional currency of individual entity
GBP
USD
31 December
2020
£’000
31 December
2019
£’000
31 December
2020
£’000
31 December
2019
£’000
–
247
56
12
(1)
–
–
–
314
–
260
344
(77)
(47)
(21)
(17)
(1)
441
(7)
–
–
–
–
–
–
–
(7)
–
–
–
–
–
–
–
–
–
Number
£’000
34,299,978
14,285,714
48,585,692
50,000,000
98,585,692
343
143
486
500
986
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.
Issue of shares
The Company issued 4,858,560 ordinary shares with a par value of 1p per share and for a price per share of 5p on 17/04/2020, and 45,141,440 ordinary
shares with a par value of 1p per share and for a price per share of 5p on 01/05/2020.
The total number of authorised shares is equal to the total number of issued shares.
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Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
18. Called up share capital cont.
19. Equity-settled share option schemes cont.
Rights of shares
Dividends and income – Ordinary shares are entitled to receive dividends as approved by the Board of Directors.
Voting rights – 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.
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
26.10.2020
26.10.2020
Subscription price per
share
Period within which options are
exercisable
31 December
2020
31 December
2019
Number of shares for which
rights are exercisable
80.0p
80.0p
1.0p
1.0p
80.0p
80.0p
1.0p
1.0p
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
26/10/2020 – 25/10/2023
26/10/2020 – 25/10/2024
14,880
14,882
451,000
451,000
–
–
6,760,000
6,760,000
781,245
781,245
998,500
998,500
100,000
100,000
–
–
14,451,762
3,759,490
During the year, 1,569,996 share options were forfeited (year ended 31 December 2019: 462,498). Another 795,234 share options were waived due to the
introduction of the new EMI scheme.
Share premium
The share premium account shows the amount subscribed for share capital in excess of nominal value, net of share issue costs.
Share premium as at 31 December 2019
Subscription of share capital in excess of nominal value (net of issue costs)
Share premium as at 31 December 2020
£’000
–
1,759
1,759
Merger reserve
Consideration for the acquisition of Last Word Media included £2.000 million of shares. 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.
19. Equity-settled share option schemes
During the year the Group recognised an expense for the following share-based payments.
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
Year ended
31 December 2020
Year ended
31 December 2019
No.
3,296,992
(2,365,230)
13,520,000
14,451,762
–
WAEP
35.7p
48.4p
1.0p
1.2p
–
No.
3,559,490
(462,498)
200,000
3,296,992
–
WAEP
35.7p
35.7p
80.0p
35.7p
–
The market price of the Company’s shares on 31 December 2020 was 11.0p (31 December 2019: 38.0p). The average remaining contractual life is 8.1 years
(31 December 2019: 6.9 years). The outstanding share options have exercise prices between 1.0p and 80.0p.
Options granted during the year have a vesting period of between three and four years and are detailed in the Remuneration Committee report on
page 52. The options granted with a three-year vesting period have a fair value of £0.0172, and those with a four-year vesting period have a fair value
of £0.0214. 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.
20. 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 6.
Transactions/balances with Directors
Further details are disclosed in note 6 and note 19.
Company
Transactions with subsidiary companies during the Year ended 31 December 2020 and the Year ended 31 December 2019 were as follows:
Bonhill Group plc cross charges of costs to Growth Company Investor Ltd £nil (31 December 2019: £nil).
Bonhill Group plc cross charges of costs to Information Age Media Ltd £nil (31 December 2019: £nil).
Bonhill Group plc cross charges of costs to InvestmentNews LLC of £0.211 million (31 December 2019: £0.907 million).
Bonhill Group plc cross charges of costs to Last Word Media Ltd of £0.285 million (31 December 2019: £0.324 million).
At the balance sheet date, the following balances were outstanding:
Share option charge
Employer NICs on share options
Release of deferred shares from the LWM acquisition
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
28
4
(50)
(18)
149
21
–
170
Loans due (to)/from subsidiary companies
Growth Company Investor Ltd
Information Age Media Ltd
Bonhill Finance Ltd
Last Word Media Ltd
InvestmentNews LLC
Year ended
31 December
2020
£’000
Year ended
31 December
2019
£’000
(1,093)
(3,516)
368
(311)
1,544
(3,008)
(945)
(1,623)
368
(27)
1,478
(749)
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Bonhill Group plc Annual Report & Financial Statements 2020
Bonhill Group plc Annual Report & Financial Statements 2020
Notes to the financial statements cont.
for the Year ended 31 December 2020
21. Commitments and contingent liabilities
(a) Lease commitments
At 31 December 2020, 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 2019: £nil).
(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 2020 (31 December 2019: £nil).
22. Events after the reporting date
On 2 January 2021, the Group entered into a new lease for the New York office for InvestmentNews. The transfer of the original lease from the previous
parent company, Crain, to one that is held directly with the landlord of the building was a requirement of the Transitional Services Agreement. The lease
had been agreed for eight years and as such a right of use asset of £2.0 million and a lease of financial liability of £2.0 million were recognised at this point.
Directors and advisers
Directors
Neil Sachdev, Non-executive Chairman
Simon Stilwell, Chief Executive
Sarah Thompson, Chief Financial Officer
Anne Donoghue, Non-executive Director
Jon Kempster, 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
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Design and Production
www.carrkamasa.co.uk
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