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Annual Report and
Financial Statements
for the year ended 31 December 2019
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A NEW CENTAUR – A CLEAR STRATEGY
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INTRODUCTION
Advise. Inform. Connect.
Our vision
We will be the 'go to' company in the international Marketing Services and
Legal sectors to:
• Provide advice to businesses on how to improve their performance and ROI;
• Inform customers using data, content & insight with the provision of business
intelligence products; and
• Connect specific communities through media and events.
We will provide cutting-edge insight and analysis, building strong and lasting
relationships with our customers and aiming to deliver long-term sustainable
returns to our shareholders.
Our business
Centaur is an international provider of business information and specialist
consultancy that inspires and enables people to excel at what they do within
the marketing and legal professions. Our Xeim and The Lawyer business units
serve the marketing and legal sectors respectively and, across both, we offer
our customers a wide range of products and services targeted at helping them
add value.
Our reputation is based on the trust and confidence arising from a deep
understanding of these sectors and we have developed a strong track record
for providing insight, content and data. Our key strengths are the expertise of
our people, the quality of our brands and products, and our ability to harness
technology to innovate continually and develop our offering. This enables us to
help our customers raise their aspirations and deliver better performance.
Our brands
CONTENTS
STRATEGIC REPORT
Introduction
Highlights of the year
Chairman’s Statement
Strategy
Performance: CEO Review
Key Performance Indicators
(Financial & non-financial)
Performance: Financial Review
Risk Management
Viability Statement
Section 172 Statement
Corporate Responsibility
IFC
01
02
04
08
12
14
22
26
27
29
32
34
35
GOVERNANCE REPORT
Board of Directors
Executive Committee
Directors’ Report
Directors’ Statement on
Corporate Governance
37
Audit Committee Report
41
Nomination Committee Report
44
Remuneration Committee Report
45
Statement of Directors’ Responsibilities 62
FINANCIAL STATEMENTS
Independent Auditor’s Report
Financial Statements
Notes to the Financial Statements
OTHER INFORMATION
Five Year Record
Other Information
63
72
79
122
123
IFC
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Centaur Media Plc HIGHLIGHTS OF THE YEAR
Strategic
• Centaur concluded a radical transformation programme to reshape the Group into a much simpler business focused on two
sectors: the marketing and legal professions.
• We successfully completed the divestments of our non-core legacy businesses in financial services, human resources,
business travel and meetings, and engineering for a gross consideration of £21.75m.
• The Group now consists of Xeim, the new name given to our marketing businesses at the beginning of last year, and The
Lawyer.
• The simplification enables the Group to focus on growth, capitalise on synergies and deliver shareholder value.
• As we look towards Centaur’s next stage of development, we announced our Margin Acceleration Plan 2022, MAP22. This is
our three-year plan to improve EBITDA margins to at least 20% by 2022 through a combination of profitable revenue growth
and operating cost efficiencies.
Operational
• The formation of Xeim enabled significant cost reduction during 2019, as duplicate brand management and processes were
eliminated. Additionally, the simplification of the Group facilitated the reduction of central overhead costs by £5m on an
annualised basis. The benefits of this will be seen in 2020.
• Xeim focused on growing its profitable revenue and rationalised its portfolio of low margin/loss making businesses, delivering
a considerably enhanced margin.
»
Influencer Intelligence continued to develop its international offering to remain at the forefront of the fast-growing influencer
marketing sector;
» Marketing Week launched a digital subscription platform and redesigned website; and
» We built on the success of the Mini-MBA programme and launched a new marketing brand course.
• The Lawyer continued its growth through the successful launch of the Litigation Tracker and the Marketing Leadership Summit
event was a successful addition to The Lawyer’s events portfolio.
Financial
• The Group reported an adjusted1 operating loss in 2019 of £1.1m (2018: a loss of £2.2m). On a statutory basis the Group
made an operating loss in 2019 of £8.4m (2018: a loss of £20.3m). The Group’s performance improved during the year with the
benefit of trading seasonality and initial cost savings from the Group’s simplification.
• Xeim and The Lawyer combined have increased adjusted EBITDA1 by 21% due to cost savings in Xeim and revenue growth in
The Lawyer.
• A final ordinary dividend of 0.5p per share is proposed, which, together with the interim ordinary and special dividends of 3.5p
per share, gives a total of £5.7m (4.0p per share) paid out as dividends relating to 2019.
• From 1 January 2020, Centaur has adopted a new progressive dividend policy targeting a pay-out ratio of 40% of adjusted
earnings, subject to a minimum dividend of 1.0p per share.
¹ See financial performance review for explanation of adjusted results and alternative performance measures
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www.centaurmedia.comSTRATEGIC REPORT “ In September, the
Board launched
MAP22, its strategy
for driving revenue
growth and improving
EBITDA margins to at
least 20% by 2022.”
COLIN JONES
Chair
CHAIRMAN’S STATEMENT
In September, the Board launched MAP22,
its strategy for driving revenue growth and
improving EBITDA margins to at least 20%
by 2022. The immediate focus for 2020 is to
develop the two business units, increasing
and broadening their client bases, investing
to expand their product offerings, driving
further operating efficiencies and continuing
to develop new subscription-based digital
capabilities.
Group performance
In 2019, Centaur achieved Group revenues
of £48.9m, an adjusted operating loss
of £1.1m and a statutory operating
loss of £8.4m, but these results do not
fully reflect the impact and timing of the
strategic initiatives taken to restructure the
portfolio and simplify the Group. Although
the disposals were completed by the
summer, they were followed by a period of
transitional services provided to the various
buyers which meant that most of the cost
reductions arising from the simplification of
the Group could not be implemented until
the final quarter. The full benefit of these
savings will be seen in 2020.
Underlying revenues for the Group (after
adjusting for businesses sold and closed)
fell by 2%. A strong performance from
The Lawyer, up 9%, was offset by a 4%
decline in Xeim revenues. The results from
The Lawyer were particularly pleasing given
the distractions of the sale process in the
first half, and it also improved its adjusted
operating margin. The Xeim portfolio
continues to face challenges, particularly
in its MarketMakers business, and the
revenue performance was mixed. However,
the benefits from the strategy of focusing
on profitable revenue can be seen in the
improvement in its adjusted operating
margin from 8% to 10%. Swag Mukerji
discusses trading performance in more
detail in his review beginning on page 8.
Dear Shareholder,
2019 was a year of significant
transformation for Centaur. The Group
started the year with a clear strategy to
simplify its structure through business
divestments, eliminating central costs
and repositioning the Group to focus
on two sectors, the marketing and
legal professions, where it has leading
brands and competitive advantage.
The Board is pleased with the progress
Centaur has made against this strategy
and it enters the new financial year well
positioned for its next stage of development
under its Margin Acceleration Plan 2022
(MAP22).
Strategy
During the first half of the year the Board
focussed on the divestment of its smaller,
non-core businesses. These divestments
were completed quickly and successfully,
generating gross proceeds (before costs
and working capital adjustments) of nearly
£22m and a profit on disposal of £7.8m.
The use of these proceeds is set out below.
Centaur also received a number of offers for
The Lawyer, but the Board determined that
retaining this business was a more attractive
option and offered greater opportunity to
create value for shareholders. This decision
has been vindicated by the strong financial
performance of The Lawyer throughout
2019.
The divestments were the trigger for a
significant restructuring and simplification of
the Group during the second half. Central
functions were reorganised, low margin or
unprofitable products were eliminated, and
annualised cost savings of £5m had been
delivered by the end of the year.
Centaur’s management is now focussed
on growing its two remaining business
units – Xeim, which brings together the
Group's marketing brands, and The
Lawyer, the leading business information
brand for the legal profession. Both offer
scalable digital products and services in
global marketplaces that are undergoing
disruption.
02
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Outlook
Training and events provide an important
revenue stream for Centaur and, not
surprisingly, the Group has recently started
to see customers delay decisions around
event attendance. At this stage Centaur
expects to postpone a number of second
quarter events until later in the year but, until
there is more certainty around the timing
and impact of coronavirus, it is impossible
to provide guidance around the full year
results.
The Group has a stronger balance sheet,
including cash of £9.3m at the end of 2019,
and trading in January and February was in
line with the Board’s expectations. Global
health concerns apart, Centaur has begun
2020 as a far simpler and more focused
Group, with new energy to address the
many opportunities we see in our markets.
We will continue to develop strong, recurring
revenue streams, invest in new digital
products to grow our customer base, and
capitalise on the synergies of our simplified
portfolio as we progress toward our MAP22
objectives.
COLIN JONES
Chair
17 March 2020
Governance and people
I joined Centaur’s board in September 2018
and succeeded Neil Johnson as Chairman
in July 2019. Neil played an important
role in the strategic review that led to our
divestment programme and the dramatic
simplification of the Group that followed.
On behalf of the Board, I would like to
thank Neil for his valuable contribution to
Centaur’s strategic development.
Since I became Chairman, the Board has
taken a number of key decisions regarding
Centaur’s strategy, management and
dividend policy. Those decisions have
given me the opportunity to consult with our
shareholders on multiple occasions and I
thank them for their support. We are also
pleased to have welcomed a number of new
shareholders to the register.
In September, we said goodbye to Andria
Vidler as CEO after six years spent driving
Centaur’s transition from a traditional print
publisher to a digital provider of insight,
content and data. The Board would
like to thank Andria for her unwavering
enthusiasm, commitment and leadership
during this time. I was delighted that Swag
agreed to replace Andria as CEO. Swag has
an in-depth understanding of Centaur and,
as the orchestrator of the MAP22 strategy,
was the ideal candidate to guide Centaur
through its next stage of development.
Simon Longfield succeeded Swag as
Centaur’s new CFO in November 2019.
Having spent ten years as CFO of BMI
Research, Simon’s extensive financial
experience and understanding of B2B
information markets will be valuable assets.
I am also pleased to welcome Carol Hosey
and Leslie-Ann Reed as new independent
Non-Executive Directors. Carol will
succeed me as Chair of the Remuneration
Committee and brings with her over 20
years of experience in senior HR and
remuneration roles. Leslie-Ann Reed,
an experienced Non-Executive Director
who has spent over 25 years in financial
management, will become Chair of the Audit
Committee in succession to Robert Boyle.
Robert and Rebecca Miskin will retire as
Non-Executive Directors on 31 March 2020
and the Board recognises their valuable
contribution over the last decade.
Centaur prides itself on being a business
that operates with integrity, transparency
and accountability, and the Board remains
committed to the highest standards of
corporate governance. More detail on our
governance policies are set out on pages
37 to 40. Our Section 172 Statement on
pages 27 to 28 also highlights the significant
progress made in developing Centaur’s
values and culture and in particular ensuring
that diversity, inclusion and environmental
ambitions are areas of focus across all parts
of the Group.
Since joining Centaur, I have been greatly
impressed by the energy, hard work and
good humour our employees have exhibited
during a period of significant change and I
would like to thank them for their dedication
– I know it has not always been easy.
Our people are our primary asset and our
success is built on the back of their efforts
and commitment.
Capital allocation and
dividend
The divestments during 2019 provided the
trigger for the Board to review Centaur’s
dividend policy. After discussions with
shareholders, in September the Board
announced a new progressive dividend
policy, to apply from 2020, with a target
pay-out ratio of 40% of earnings subject to
a minimum dividend of 1.0p per share. This
reflects the smaller size of the Group and
the desire for a more sustainable distribution
to shareholders which grows in line with
earnings. Pursuant to this policy, the Board
is recommending a final ordinary dividend
of 0.5p per share, equivalent to £0.7m,
payable in May 2020.
The interim dividend of £5m paid in October
2019 was largely funded from the proceeds
of the business divestments, including the
special dividend. The Board was intending
to propose the payment of another special
dividend in May 2020, but has decided
to defer this decision until there is more
visibility around the impact of coronavirus on
the Group’s cash flows.
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www.centaurmedia.comSTRATEGIC REPORT STRATEGY
Centaur is an international provider of
business information and specialist
consultancy. From our origins as an
advertising-supported trade publisher,
the Group has evolved rapidly in recent
years as we have moved to focus
on the paid provision of business
intelligence, consultancy, training,
events and lead generation, building
on the reputation and trust established
from our history in providing highly
valued thought-leading content.
At the end of 2018 and following a
strategic review, Centaur initiated a radical
transformation programme to concentrate
our efforts on two attractive sectors: the
marketing and legal professions. These
large, international and growing industries
are facing considerable competitive and
technological disruption, creating demand
for the intelligence, insight and expertise that
our businesses offer.
In order to create this more focused group,
Centaur began a far-reaching programme
to divest our smaller and ex-growth
businesses in financial services, human
resources, business travel and meetings
and engineering. During 2019, we disposed
of 21 of our 28 brands, raising net cash
of £16.4m and establishing the platform
to drive margin enhancement through
profitable revenue growth and margin and
cost synergies.
Centaur now has strong, well-established
brands that have been serving these sectors
for decades – brands such as Marketing
Week, Econsultancy and The Lawyer. We
continue to evolve these brands and have
developed a track record for innovation,
generating revenue from new products
and services that our customers need
to respond to the rapid changes in their
sectors. This has allowed Centaur to
develop strong and continuing relationships
with many large international enterprises.
Read more about The Festival of
Marketing on page 10
04
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 STRATEGIC REPORT
MAP22
The completion of our divestment programme in July 2019 allowed us to set
about laying the groundwork for the next stage of Centaur’s development.
The centrepiece of this is our Margin Acceleration Plan 2022 (MAP22), a
three-year plan to improve margins, targeting an EBITDA margin of at least
20% by 2022.
MAP22
Three-year plan to improve EBITDA margins, targeting at least 20% by 2022
MAP22 is intended to deliver its targets through a combination of profitable
revenue growth and enhanced cost efficiencies. Among the revenue
opportunities, the most important include the following:
• Growth in revenues from Influencer Intelligence, Mini-MBA and other
eLearning courses, Festival of Marketing, Econsultancy and The Lawyer
through increased penetration of our existing customer base and pricing
strategy together with new business development;
• Cross-selling Xeim’s suite of products and services to enterprise clients;
• Operational improvement initiatives at Econsultancy and MarketMakers;
• New products from The Lawyer to enhance digital subscription growth; and
• Taking advantage of our common technology stack, a recent investment,
to build new content offerings.
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www.centaurmedia.com STRATEGY
CONTINUED
A new Centaur
The new Centaur is a much simpler business consisting of Xeim, the new name adopted by
our marketing business at the beginning of last year, and The Lawyer. This has allowed us
to streamline management, improve efficiency, eliminate silos and reduce complexity within
the Group, a process which has allowed for a significant reduction in business unit costs and
central overheads.
The simplification has enabled us to have a clear focus on the reporting of the Group’s
revenue categories. We interact with customers by using the power of our brands and
generate different types of revenue streams. This creates both cross-selling opportunities and
operational synergies, whilst also giving visibility of how the Group’s revenues are derived.
From 2019 onwards, we will report revenue for Xeim and The Lawyer under the following
categories:
• Premium content comprising subscription-driven paid content services;
• Marketing services through campaign management and marketing automation;
• Training and advisory from marketing consultancy, digital learning programmes and face-
to-face training;
Xeim takes its name from excellence in
marketing and its purpose is to accelerate
performance for marketers. The Xeim
portfolio brings together the Group’s
marketing brands to deliver business
information and specialist consultancy
to the marketing sector. It achieves this
by providing the advice, intelligence and
connections that marketers need to set
themselves apart from their peers. Our
market-leading brands and industry experts
provide insight, analysis and proprietorial
content, attracting over six million digital
contact points every month.
• Events including sponsorship and delegate revenue from conferences, awards and large-
Xeim includes the following brands:
scale events;
• Marketing and advertising solutions including digital advertising, display and bespoke
client campaigns together with sector focused job advertisements; and
• Telemarketing services comprising lead generation and data services.
The chart below shows which brands derive revenue from each category:
Brand
Econsultancy (inc.
Oystercatchers)
Influencer Intelligence
and Fashion &
Beauty Monitor
Marketing Week
(inc. Mini-MBA)
Festival of Marketing
Creative Review
/Design Week
Really and
MarketMakers
The Lawyer
Premium
Content
Marketing
Services
Training
and
Advisory
Marketing and
Advertising
Solutions
Telemarketing
Services
Events
4
4
4
4
4 4
4
4
4
4
4
4
4
4
4
4
The Board believes Centaur’s transformation has helped improve the quality of the Group’s
revenue streams. The developments in both Xeim’s brands and The Lawyer mean that 62%
of our underlying revenue (2018: 56%) arose from repeatable and recurring sources, whereas
only 14% of revenue came from marketing and advertising solutions. The strength of product
innovation is reflected by the fact that £5.5m of revenue, or more than 11%, was generated
from new revenue streams created since 2015, excluding acquisitions.
Underlying revenue 2019
20%
14%
11%
16%
30%
9%
Premium Content
Marketing Services
Training and Advisory
Events
Marketing and Advertising Solutions
Telemarketing Services
•
Influencer Intelligence – A leading
source of intelligence for brands and
marketers on influencers and celebrities
and their digital reach. It is at the
forefront of the fast-growing influencer
marketing sector with plans for further
international expansion during 2020;
• Econsultancy – The authoritative guide
to marketing best practice, and a
leading provider of training and research
in digital marketing transformation.
Strengthened through the addition of
Oystercatchers, the specialist agency-
focussed consultancy Centaur acquired
in 2016, with its skills in pitch partnering
and its senior networking club;
•
Festival of Marketing – An annual
learning and networking event that
has become the largest global event
dedicated to brand marketers,
which underpinned its strong margin
performance in 2019;
• Marketing Week – For over 40 years,
the most influential source of marketing
information in the UK. During 2019,
Marketing Week launched its digital
subscription service and redesigned its
website to make it easier to find news,
insight and opinion;
• Mini-MBA – As part of Xeim’s eLearning
development, the strength of Marketing
Week’s brand has enabled Xeim to
create its fast-growing programme,
which has attracted over 6,500
marketers and professionals since its
launch in 2016. A new marketing brand
course, available to Mini-MBA alumni,
was introduced in September
2019; and
06
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 STRATEGIC REPORT
and a leading provider of intelligence to the
global legal market, delivered via a scalable
digital platform. The Lawyer has built on
its heritage and reputation for providing
incisive analysis of the UK legal market to
develop a much more international business
providing market intelligence to the world’s
largest law firms. The Lawyer now has
over 300 corporate clients, a 12% increase
since 2018. 90% of the top 50 UK and top
50 US law firms in London are corporate
subscribers.
The award-winning editorial team publishes
a series of market reports to help leading
firms benchmark themselves against their
peers. This is part of a strategy that, over
the past five years, has grown paid premium
content revenues that are more than 40% of
the total for the business unit.
During 2019, The Lawyer continued its
growth through the launch of Litigation
Tracker, a digital product that offers near
real-time insight into the UK litigation
market.
Events are another important source of
revenue, with the Marketing Leadership
Summit a successful addition in 2019 to our
portfolio.
After a strong 2019 performance, the
business is poised for continued growth in
an attractive market. The Lawyer's strategic
priorities include building subscription
revenues, deepening customer relationships
Next steps
In 2020, our focus is operational
execution. We aim to become the “go
to” company in international marketing
services and the legal sectors to:
• Advise businesses on how to
improve their performance and
ROI;
•
Inform customers using data,
content and insight with the
provision of business intelligence
products; and
• Connect specific communities
through media and events.
Our key priority for 2020 is to grow
our EBITDA margin through profitable
revenue growth, creating a high-
and capturing adjacent market segments.
performance sales operation, driving
subscription products and maintaining
control over Group overheads following
the cost reduction programme.
THE INSIGHT’S
IN THE DATA
SEE THE BIGGER
PICTURE
Turning case reports
into actionable market
intelligence.
Welcome to the new Litigation Tracker.
Since 2015, The Lawyer has tracked every court case and all judgments from 15 UK high courts.
Now this comprehensive, aggregated data is available to you to search, chart
and download via our new online portal, delivering timely and targeted insight.
THLA0001 LitTrack_Print Ad_190111_AW.indd 1
• MarketMakers – The UK’s number one
B2B telemarketing agency, the industry
leaders in lead generation. This brand
includes Really, the award-winning
marketing services business that
delivers creative campaigns to drive its
clients’ return on marketing investment.
By bringing these brands together under
the Xeim umbrella, we have been able to
capitalise on their synergies, manage the
brands more effectively, and cross-sell to
our clients a broader range of services in an
integrated and coordinated manner.
Subscribe today for exclusive access.
Visit thelawyer.com/litigation-tracker
20/02/2019 10:01
Xeim’s immediate priorities include
capitalising on the success of Influencer
Intelligence and expanding digital learning
revenues across Marketing Week and
Econsultancy. At the same time, the Board
is focussed on addressing the margin drag
from MarketMakers and recently hired an
experienced managing director to refocus
this business.
In The Lawyer, Centaur owns the most
trusted brand for the UK legal profession
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www.centaurmedia.com “ 2019 marked the start
of a new chapter in
Centaur’s evolution.
As described in the
strategy section,
the completion
of our divestment
programme has made
Centaur a much
simpler business.”
SWAG MUKERJI
Chief Executive
PERFORMANCE:
CEO REVIEW
Overview of 2019
I am pleased to deliver my first report
to you as Centaur’s CEO, having
succeeded Andria Vidler in September.
Having worked closely with Andria
since joining Centaur as CFO in 2016,
I have a thorough understanding of
how the Group has undergone a
profound transformation in recent years
and have set the MAP22 strategy
going forward. I would like to thank
Andria for her considerable guidance
and support over the last few years.
2019 marked the start of a new chapter
in Centaur’s evolution. As described in the
strategy section, the completion of our
divestment programme has made Centaur
a much simpler business.
These divestments were completed shortly
before Centaur moved into attractive
modern offices close to London’s Waterloo
station. Our new home was designed to
foster collaboration, with 270 employees
on a single floor, and I think I speak for all
employees in saying that the move has
injected fresh energy and momentum into
our businesses.
The move is one example of how Centaur’s
simpler structure has unlocked important
benefits and efficiencies. Through the
elimination of costs needed to support
the businesses sold last year and other
measures, the Group has reduced
annualised central overheads by the end of
2019 by £5m, as promised, and the full year
effect of this will be seen in 2020.
Results for the year
2019 was a complex year for Centaur
with many moving parts and the reporting
requirements make it difficult to clearly
articulate what has fundamentally happened
to the Group. We earned profits from the
disposed businesses until the day they were
sold, and this is reported under discontinued
operations. During this period, we maintained
the full central overhead functions required to
support these businesses and this is shown
in continuing operations. Once they were
sold, we continued to provide services to
these businesses generating income for the
Group from Transitional Service Agreements
(TSA), the last of which expired at the end
of 2019. We therefore could not eliminate a
proportion of the overhead costs immediately
after the disposal, although they were
removed by the end of 2019 and will deliver
the £5m annualised benefit in 2020.
While both Xeim and The Lawyer grew
their profits in 2019, the impact of the
higher central overhead resulted in Centaur
achieving an adjusted operating loss of
£1.1m and a statutory operating loss of
£8.4m on revenues of £48.9m. Group
adjusted EBITDA1 margin has grown
from 3% to 5%. It should be noted that
the seasonal trading pattern of the new
simplified group will result in the majority of
profits arising in the last quarter of the year.
Centaur ended the year with £9.3m of
cash (2018: £0.1m), having received net
proceeds of £16.4m from the businesses
sold during the year.
Details of the trading performance are
contained within the Operational Review of
my report beginning on page 9.
The divestments encompassed the sale
of our financial services division, including
titles such as Money Marketing, Mortgage
Strategy, Platforum, Taxbriefs and Headline
Money to Metropolis Group. Centaur Media
Travel and Meetings Ltd, the owner of the
Business Travel Show and The Meetings
Show, was sold to Northstar Travel Media
UK Limited. Centaur Human Resources
Limited, which includes Employee Benefits,
was acquired by DVV Media International
and our engineering titles, including the
Engineer and Subcon, were sold to Mark
Allen Group.
Dividend
The reshaping of the Group was a catalyst
for the Board to review its dividend policy,
having distributed more than 100% of
cumulative earnings to shareholders over
the previous three years. In September,
we announced a new progressive dividend
policy which targets a pay-out ratio of 40%
of adjusted earnings, or 1.0p per share,
whichever is the higher. This came into force
on 1 January 2020.
We also announced a distribution of £5.0m,
comprising an interim dividend of 1.5p per
share and a special dividend of 2.0p per
share, paid in October 2019. Under the
new dividend policy, we will now pay a final
ordinary dividend of 0.5p per share in May
2020. Dividends to shareholders, ordinary
and special, relating to 2019 therefore total
£5.7m (4.0p per ordinary share).
We had planned to pay a further special
dividend alongside our ordinary dividend in
May. However, we have decided to defer
this decision until there is more visibility
around the impact of coronavirus on the
Group's cash flows.
¹ Excluding the impact of IFRS 16 in order to show a
comparison to 2018
08
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Proof Number 5
20/04/2020 14:03:11
Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 PERFORMANCE:
CEO REVIEW
Operational review
Centaur now comprises two business units,
Xeim and The Lawyer. Xeim is Centaur’s
largest business and contributes 83% of
Group revenues, with The Lawyer making
up the balance. Each business unit is run
on a stand-alone basis with dedicated
management teams. As explained above,
the 2019 central overhead did not reflect
the simplified group and going forward,
in 2020, there is a lean central function,
primarily focused upon external governance
and reporting, following the £5m overhead
saving.
Xeim was formed in early 2019 and brings
our marketing brands into a single business
unit, allowing us to manage them more
effectively, cross-sell our products more
efficiently, eliminate duplication of effort and
enhance their margins.
In 2019, Xeim delivered a turnover of
£40.7m, a 4% decrease from the previous
year as a result of management action to
reduce low margin and loss-making revenue
streams such as Marketing Week Live,
together with disappointing performances
from MarketMakers and some parts of
Econsultancy.
Xeim also identified further opportunities to
eliminate costs and improve our operational
efficiency. As a result, Xeim increased its
adjusted EBITDA margin from 12% to
15%, achieving a business unit adjusted
EBITDA of £6.3m, which represents a
pleasing growth of 24% from the prior year.
This growth was driven by the introduction
of new products such as the Mini-MBA
Brand course, growth in brand margins
and eliminating duplicate costs in the brand
management structures.
As discussed earlier, we interact with
customers by using the power of our brands
and generate different types of revenues
from this. This creates both cross-selling
opportunities and operational synergies
and Xeim’s customer centric strategy is
achieving success with its largest customers
as we create more tailored solutions and
integrated services across multiple brands.
Our Top 50 customers in 2019 renewed
contracts on terms that were 35% higher
than the prior year reflecting the value
created from the additional services that
we delivered. This reflects the new Xeim
operational structure which successfully
cross-sold a wider portfolio of Xeim’s
products and services and therefore
increased the average value sold to each
customer.
In Xeim, Premium Content revenues are
generated, in the main, from our Influencer
Intelligence and Econsultancy brands.
Creative Review has been successfully
put behind a paywall and the recent move
of Marketing Week to a digital platform,
incorporating a paywall, is showing good
early signs.
The global influencer marketing market,
currently worth an estimated US$5.5bn,
is projected to grow to US$22.3bn by
2024 (source: MarketsandMarkets 2019).
Influencer Intelligence, our market leading
source of trusted information and analytics
for brands seeking to harness the power
of global influencers, continued to perform
well, with revenue increasing 11% in 2019.
This underpins our growth strategy in
a dynamic sector and is one of our key
subscription revenue growth drivers for
MAP22. In 2020, we are adding c.100k
international influencers to our content
and making significant improvement to our
products such as extended analytics on
new social media networks, brand analytics,
campaign management and measurement
functionality.
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Proof Number 5
09
20/04/2020 14:03:13
www.centaurmedia.comSTRATEGIC REPORT A NEW CENTAUR - A CLEAR STRATEGY
way of accessing our products. The new
Marketing Week Knowledge Bank allows
Xeim to generate additional revenues from
white papers and research on its website.
The Festival of Marketing, Xeim’s flagship
event, delivered another compelling line-up
of speakers in 2019 and received positive
feedback from delegates and sponsors.
Attendance was up by 48% in comparison
with 2018 and there was a double-digit
improvement in e-commerce sales. The
VIPs in attendance included almost 200
senior management and CMO level guests.
This gave the Festival a palpable buzz and
generated a positive experience for our
event sponsors and strategic partners.
Speakers at the event included Dave Lewis,
CEO at Tesco, actress and activist Rose
McGowan, TV presenter Davina McCall
and Marketing Week columnist Mark Ritson
who set the scene with a packed session
on brand excellence. This success puts the
event in a strong position for 2020.
eLearning, which includes the Mini-MBA,
a joint initiative with Mark Ritson, has gone
from strength to strength with revenue
growing 75% in 2019 underpinned by a
47% year-on-year increase in delegates.
The feedback is overwhelmingly positive
across every intake with an average net
promoter score of +76. Building on this
success, in September 2019 we launched
a new marketing brand course with two
further courses planned for 2020. The new
Mini-MBA Brand Management course is
only available to Marketing Week Mini-MBA
alumni and aims to help marketers with the
skills they need to become brand managers.
MarketMakers had a challenging 2019 with
marketing services revenues at Really down
4% year-on-year and telemarketing services
down 3%. This was driven by increased
customer churn within telemarketing
services in the SME sector, reduced spend
from certain key accounts and lower than
anticipated renewals at Really in the first half
of the year. Due to the relatively low margins
in this business, the profit impact is limited.
At the end of 2019, Centaur announced the
appointment of Jude Bridge as managing
partner of Oystercatchers and Darren McGill
as managing director of MarketMakers.
Jude was an award-winning marketing
director at Marks & Spencer and Save
the Children and brings deep expertise in
building some of the UK’s strongest brands.
Darren has a wealth of experience in senior
commercial roles, most recently as chief
revenue officer at Signal AI, the leading
media information business. Both are
already having an impact and will take on
broader roles within Xeim. Jude will develop
and lead a marketing excellence programme
to ensure best-in-class marketing practice,
while Darren will develop and lead a sales
excellence initiative to improve customer
retention and sales productivity.
The key drivers of Xeim going into 2020 are
the growth of our Influencer Intelligence and
Econsultancy subscription revenues, the
continued success of the Mini-MBA and
building upon the success of the Festival
of Marketing by attracting new and repeat
delegates and sponsors. The disappointing
performances of MarketMakers and
Econsultancy are being addressed and,
whilst improved performances are expected
in 2020, they remain a challenge.
PERFORMANCE:
CEO REVIEW CONTINUED
At Econsultancy, we launched a new
platform which has two clear and distinct
customer offerings for subscribers:
•
Insight: Econsultancy’s proprietary
content now sits behind an
ecommerce-driven subscriber paywall
as part of a fully integrated, easy-to-
navigate service which makes the
content easier to digest and more
practical to use; and
• Learning: The platform includes a
dedicated "Econ Learn" section which
brings together all Econsultancy’s digital
learning content. Users can assess
their skills using the Digital Skills Index
and follow a tailored learning journey
based on their results, dip into learning
modules or engage in Econsultancy’s
structured eLearning courses - all within
a single intuitive product environment.
Econsultancy saw renewals by value
increasing to 63% in 2019, up from 54%
in 2018. While still lower than desired,
it is pleasing to see that the downward
trend from 2018 has been reversed.
Econsultancy is also a leading provider
of training and has been strengthened
through the addition of Oystercatchers
into the Econsultancy brand. Our focus
on blended learning underpins our growth
strategy and is supported by both improved
product design and an enhanced sales
team. A key element of the Oystercatchers
business model is the relationship and
chemistry between agencies and clients
and for 2019 we placed more emphasis on
this important dynamic. While its revenues
have shrunk, the decision to pull back the
team responsible for selling and marketing
Econsultancy in the US to the UK, has
worked and is improving Econsultancy
margins while continuing to provide services
to our US customers. Although the overall
revenues from Econsultancy did not grow
in 2019, billings and margins have, which
will be reflected in improved performance
in 2020.
Marketing Week has shown early positive
signs following the launch of a new digital
platform which incorporates a paywall to
enable e-commerce, improved search
functionality, new navigation and a
cleaner design. It is possible to upgrade
to a combined Marketing Week and
Econsultancy service via a single log-in,
which gives our customers an efficient
10
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Proof Number 5
20/04/2020 14:03:16
Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 The Lawyer is a leading provider of
intelligence to the global legal market,
generating revenue from digital
subscriptions, live events and marketing
solutions. The Lawyer represented 17%
of Group revenues in 2019 and achieved
a 9% increase in underlying revenue, a
16% increase in adjusted EBITDA and an
adjusted EBITDA margin of 35%.
The successful move to a multi-channel
digital platform continues to support The
Lawyer’s growth. Alongside a 12% increase
in corporate clients since 2018, the website
has seen a double-digit year-on-year
increase in the frequency of subscriber visits
and increased content consumption, with
50% of subscribers now visiting on a daily
or weekly basis.
We have continued to develop The Lawyer’s
premium content business which represents
just over 40% of its total revenue, with a
growth of 17% in underlying revenue over
the year.
In January 2019, The Lawyer launched
the Litigation Tracker, an interactive tool
that extends the functionality of The
Lawyer’s current market insight products
and provides real-time insight into the UK
litigation market. With over 40 corporate
clients and extremely positive feedback from
users, we are pleased with its reception and
plan to build on this momentum, including
the addition of further data sets in 2020.
The Lawyer’s events business also grew
by 17%, propelled by the first new event
launches since 2016. This included the
inaugural Marketing Leadership Summit,
which was well-received with a net promoter
score of +57 from attendees.
Encouragingly, our more established events
also performed well with particularly strong
year-on-year growth achieved in our GC
Summit and In-House Financial Services
conferences, our European Awards and our
roundtable events for individual clients.
Revenue from marketing and advertising
solutions continued to be a challenge and
fell by 4% during the year, although the rate
of decline has slowed.
People and culture
Our executive committee is committed
to ensuring we maintain a culture that
supports, engages and empowers
employees to fulfil their potential. It is
this culture that underpins our business
ambitions and we continue to develop
internal training plans and communication
processes to ensure our employees’
success.
Across the Group, the gender balance is
good with a male-female ratio of 49:51.
At Board level, half of our non-executive
directors are female, but there is more
work to be done to encourage and
promote women onto our senior leadership
team which only has a one-third female
representation.
As a company, we understand the
importance of family and we offer enhanced
maternity and paternity leave. During 2019,
we introduced a wider range of flexible
working arrangements to coincide with our
new office environment in London. We have
a high rate of maternity returners (85% in
2019) and 8% of our workforce have part-
time working arrangements.
In 2019 we established a workforce
advisory panel to cover diversity, inclusion,
culture and engagement (DICE) to ensure
that our culture supports and empowers
our employees and promotes their
ongoing development. DICE reports to me
and frequently meets with the executive
committee. There is also a nominated non-
executive director to oversee the working of
DICE. Our policies and working practices
embrace an inclusive working environment
and takes a proactive and progressive
approach to supporting diversity. Our
hiring policy is focused on appointing the
best person for the job irrespective of race,
gender, sexual orientation or disability. The
Company also offers a range of mental
health, wellbeing and fitness sessions.
In 2019 we continued with our formal
mentoring programme which was launched
in 2018. We delivered face-to-face coaching
sessions to more than 100 staff at all levels
and now have qualified Mental Health First
Aiders in the business. We ran workshops
for line managers to support flexible and
remote working, and staff continue to
participate in and be advocates of our Mini-
MBA programme.
Summary
In 2019, Centaur radically transformed the
shape of our business. In simplifying our
portfolio and concentrating our attention
on two key markets, we have a more
streamlined customer-facing group that can
direct its focus at developing its product
offerings and digital capabilities. Cross-
selling, technology platform enhancement
and employee expertise will enhance these
product offerings and quality of revenue.
The Lawyer, Influencer Intelligence and
eLearning will be key drivers of revenue
growth towards MAP22.
Coronavirus has brought uncertainty to
global markets and whilst our customers
remain committed, some of their decisions
are being delayed. We have carried out
detailed risk analysis across the business
and have postponed two of The Lawyer's
key events from Q2 to Q4. The Festival
of Marketing will go ahead in October, as
planned, and we shall keep our remaining
events under review. We have a strong
balance sheet and an undrawn £25m credit
facility. We will be keeping a close eye on
cash through these uncertain times.
The dramatic scale and pace of change in
Centaur has made this a tough year for our
employees. Centaur’s transformation has
only been achievable through their expertise
and commitment and I am incredibly grateful
for the energy, resilience and positive
approach they have demonstrated during
this period of change. As we now enter the
next stage of the Group’s development, I
am confident that we have the strategy and
structure and people in place to achieve
our MAP22 goal. I look forward to building
towards this in 2020.
SWAG MUKERJI
Chief Executive
17 March 2020
27195_Centaur Media_AR2019 strategic.indd 11
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Proof Number 5
11
20/04/2020 14:03:16
www.centaurmedia.comSTRATEGIC REPORT KEY PERFORMANCE INDICATORS
(FINANCIAL AND NON-FINANCIAL)
The Group has set out the following core financial and non-financial metrics to measure the Group’s performance. The KPIs are monitored by the Board by
reference to the annual budget and the focus on these measures will support the successful implementation of the MAP22 strategy. These indicators are
discussed in more detail in the CEO review and Financial Review.
KPI
Financial
Underlying revenue growth
Adjusted EBITDA margin
Adjusted diluted EPS
Cash conversion
*See definitions in Financial Review on page 21.
Statistic
Commentary
The growth in total revenue adjusted to exclude the
impact of event timing differences, as well as the revenue
contribution arising from acquired or disposed businesses.
Adjusted EBITDA as a percentage of revenue where
adjusted EBITDA is defined as adjusted operating
profit before depreciation and impairment of tangible
assets, and amortisation and impairment of intangible
assets, other than those acquired through a business
combination. For comparative purposes, the 2019 figure
excludes the impact of IFRS 16 (Leases)
(see Financial Review pages 14 to 21).
Diluted earnings per share calculated using the adjusted
earnings, as set out in note 9 to the financial statements.
The percentage by which adjusted operating cash flow
covers adjusted EBITDA (on continuing and discontinued
operations) as set out in the Financial Review.
Adjusted EBITDA margin
5%
4%
3%
2%
1%
5%
3%
2018
2019
Adjusted diluted EPS
5p
4p
3p
2p
1p
2.6p
2018
Cash conversion
0.3p
2019
100%
80%
60%
40%
20%
100%
85%
2018
2019
12
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Proof Number 5
20/04/2020 14:03:17
Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 KPI
Non-Financial
Attendance at Festival of Marketing
Delegates on Mini-MBA course
Xeim customers >£50k
Top 250 law firm customers
Statistic
Commentary
Number of unique delegates attending the Festival of
Marketing.
Number of delegates on Mini-MBA and related eLearning
courses in the year
Number and value of Xeim customers that have sales in
the year of greater than £50,000
Number and percentage of top 200 UK law firms and top
50 US law firms
Attendance at Festival of Marketing
5000
4000
3000
2000
1000
4,119
2,780
2018
2019
Delegates on mini-MBA course
4000
3000
2000
1000
1,960
2,875
2018
2019
Xeim customers > £50k
150
120
90
60
30
109
(£18.4m)
108
(£18.1m)
2018
Top 250 law firm customers
2019
200
160
120
80
40
159
(64%)
170
(68%)
2018
2019
27195_Centaur Media_AR2019 strategic.indd 13
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Proof Number 5
13
20/04/2020 14:03:18
www.centaurmedia.comSTRATEGIC REPORT “ By removing non-
core assets, we
have been able to
achieve a significant
reduction in
overhead costs”
SIMON LONGFIELD
Chief Financial Officer
PERFORMANCE:
FINANCIAL REVIEW
Overview
2019 was a significant year for Centaur
as it completed its restructuring
through the divestment programme
described in the CEO’s review.
Despite the impact of the divestment
programme on the Group and its
employees, I am delighted to report
that both Xeim and The Lawyer grew
adjusted operating profit, adjusted
EBITDA and adjusted EBITDA margin
in 2019. Combined with the annualised
overhead cost savings of £5m that we
promised at our interim results, the
full year impact of which will be seen
in 2020, this performance has put
Centaur well on the path to obtaining
our MAP22 target of at least 20%
adjusted EBITDA margin by 2022
(without the benefit of the impact of
IFRS 16).
2019 was dominated by the divestment
programme in the first half of the year with
income generating transitional arrangements
continuing long into the second half of
the year. The result of the divestment
programme is a simpler, more streamlined
Group with increased focus on its two core
businesses. By removing non-core assets,
we have been able to achieve a significant
reduction in overhead costs and have
recognised exceptional restructuring costs
in the income statement as a consequence
of the cost reduction plan of £2.5m.
Due to the divestment programme, the
Group is required to report its current year,
and also restate its prior year, results in
line with IFRS 5 (Non-current assets held
for sale and discontinued operations),
so that only the results of the continuing
business are reported as part of revenue
and adjusted operating profit. The results
of the disposed businesses up to the date
of their divestment are therefore shown in
net income from discontinued operations.
However, as most of the £5m cost reduction
took place in the second half of the year, the
lost contribution of the disposed assets was
not immediately offset by the cost savings.
This caused the Group to report an adjusted
operating loss for the year, albeit reduced
compared to 2018 due to increases in
business unit EBITDA.
The Group received total cash consideration
of £20.4m from the divestment programme.
After transaction costs of £2.3m and
working capital adjustments of £1.7m,
net cash received from the divestment
programme was £16.4m.
The Group adopted IFRS 16 but took the
exemption not to re-state comparatives
for the prior year. As a result, year-on-year
business unit profitability is not directly
comparable except at a pre-IFRS 16
adjusted EBITDA level, reflected in the
discussion below.
Performance
Group
The Group is reporting a statutory profit
after taxation of £1.9m (2018: a loss of
£14.2m) primarily due to the profit on
disposal of £7.8m from the divestment
programme. The Group’s adjusted
operating loss of £1.1m is an improvement
from the restated adjusted operating loss
of £2.2m for 2018. This was driven by
significant cost reductions within Xeim
resulting in a 24% increase in Xeim’s
adjusted EBITDA, together with adjusted
EBITDA growth of 16% in The Lawyer. The
adjusted EBITDA for the two business units
is therefore 21% higher than 2018 despite a
revenue decline of 3%.
Reported revenue of £48.9m represents a
decline of 3% over 2018. On an underlying1
basis, Group revenue fell 2% from £48.5m
in 2018 to £47.7m in 2019. Xeim underlying
revenue fell by 4% - increases in eLearning
and Influencer Intelligence revenues were
more than offset by reductions due to
the withdrawal from public training within
Econsultancy, and lower revenues at
Oystercatchers, Really and MarketMakers.
The Lawyer showed strong underlying
revenue growth, up 9%, driven by growth in
its subscriptions and events business.
¹ Underlying is a non-GAAP measure – see Measurements
and non-statutory adjustments section
of Financial review for further explanation
14
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Proof Number 5
20/04/2020 14:03:20
Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 PERFORMANCE:
FINANCIAL REVIEW
MarketMakers had a challenging year.
Marketing services revenues at Really
remained flat from the half year and
consequently ended 4% down year on
year. However, our telemarketing operations
struggled in the second half of the year, with
revenue declining 3% in 2019 due to lower
realised revenue on some key contracts and
lower than expected campaign renewals
from its smaller clients.
We consider profitable revenue growth to
be a key pillar to our future success and
accordingly we decided to close Marketing
Week Live and end public training in our
Econsultancy business to focus on more
profitable revenue streams and remove
duplicate brand and management costs of
£2.4m. The impact of this has been that
adjusted business unit EBITDA (before the
impact of IFRS 16) in Xeim has grown by
24% in the year despite a 4% reduction in
underlying revenue.
The Lawyer showed strong underlying
revenue growth, up 9%, driven by:
• growth of 17% in its premium content
business, due in part to the launch
of new products such as Litigation
Tracker, and increases in corporate
subscriptions; and
• excellent performance in its events
business, up 17%, resulting from
development of the new Marketing
Leadership Summit and higher revenues
across most of the other events.
Revenue from Marketing and Advertising
Solutions fell by 4%, although this is a lower
decline than in 2018. Adjusted EBITDA has
increased by 16% from £2.5m to £2.9m
with a healthy increase in adjusted EBITDA
margin from 32% to 35%.
Influencer Intelligence was merged with
Year Ahead during the year and saw strong
revenue growth of 11%. Xeim substantially
grew its eLearning revenues in 2019 which
saw 75% revenue growth year on year,
driven by the success of the Mini-MBA and
the launch of the new marketing brand
course. The Mini-MBA saw volume growth
of 47% with a pleasing corresponding
increase in yield.
Econsultancy’s training revenue fell in the
year due to the decision to restructure
its global sales operation in the US and
withdraw from public training, replacing
this with a new set of courses. As planned
the loss in revenue was more than offset
by cost savings and margin improvement.
Econsultancy subscription products had
a difficult period with lower volumes in the
year partially offset by strong improvement
in yields, especially on new business.
Renewal rates continue to improve, both in
terms of volume and yield, but the revenue
benefits will not be felt until 2020, as the
deferred income unwinds.
Extract from Influencer Intelligence
27195_Centaur Media_AR2019 strategic.indd 15
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Proof Number 5
15
20/04/2020 14:03:21
www.centaurmedia.comSTRATEGIC REPORT PERFORMANCE:
FINANCIAL REVIEW CONTINUED
New Accounting Standards
IFRS 16 has been adopted for the current reporting period and the Group has elected to apply the modified retrospective transition
approach where comparative periods are not restated. The reclassifications and the adjustments arising from the new leasing rules are
therefore recognised in the opening balance sheet on 1 January 2019.
As at 31 December 2019, the right of use assets have been included in property, plant and equipment at a value of £3.7m and lease
liabilities of £4.3m have been presented on the consolidated statement of financial position. This is after £1.6m depreciation expense and
£0.2m impairment charge in the year. The overall impact of IFRS 16 on the income statement was an additional expense of £0.1m with
expenses now classified as depreciation on the right of use asset and interest expense on the finance liability.
Adjusted EBITDA in 2019, after applying IFRS 16 (post-IFRS 16) of £4.4m, is £1.8m higher than if the new standard had not been applied,
giving an adjusted EBITDA (pre-IFRS 16) of £2.6m. For the purposes of comparison, the adjusted EBITDA (pre-IFRS 16) and related margin
have been compared to 2018 in this commentary. For further details of the transition to IFRS 16 please refer to note 20.
Measurement and non-statutory adjustments
The statutory results of the Group are presented in accordance with International Financial Reporting Standards (“IFRS”). The Group also
uses alternative reporting and other non-GAAP measures as explained below and as defined in the table on page 21.
Adjusting items
Adjusted results are not intended to replace statutory results but are prepared to provide a better comparison of the Group’s core business
performance by removing the impact of certain items from the statutory results. The Directors believe that adjusted results and adjusted
earnings per share are the most appropriate way to measure the Group’s operational performance because they are comparable to the prior
year and consequently review the results of the Group on an adjusted basis internally.
Statutory operating loss from continuing operations reconciles to adjusted operating loss and adjusted EBITDA as follows:
Statutory loss before tax
Adjusting items:
Exceptional operating costs
Impairment of goodwill
Amortisation of intangible assets
Share based payments
Loss on disposal of subsidiary
Adjusted operating loss
Depreciation, software amortisation and impairment
Adjusted EBITDA (post-IFRS 16)
Adjusted EBITDA margin (post-IFRS 16)
Adjusted EBITDA (pre-IFRS 16)
Adjusted EBITDA margin (pre-IFRS 16)
Note
4
10
11
25
14
3
4.7
–
2.4
0.1
0.1
2019
£m
(8.4)
7.3
(1.1)
5.5
4.4
9%
2.6
5%
2.0
12.8
2.5
0.8
–
2018
£m
(20.3)
18.1
(2.2)
3.6
1.4
3%
1.4
3%
Adjusting items from continuing operations generated a loss before tax of £7.3m (2018: £18.1m) as follows:
Adjusting item
Description
Exceptional operating costs
Impairment of goodwill
Amortisation of intangible assets
Share based payments
Exceptional costs of £4.7m (2018: £2.0m) include £2.5m (2018: £0.4m) of staff restructuring
costs related to the Group’s cost reduction plan following the completion of the divestment
programme in 2019, £2.2m (2018: £1.3m) of divestment programme related costs and £nil
(2018: £0.3m) of costs relating to strategic corporate restructuring initiatives.
In 2019, £nil (2018: £12.8m) relates to the impairment of goodwill. The 2018 charge primarily
related to the Xeim portfolio.
Amortisation of acquired intangible assets of £2.4m (2018: £2.5m) has decreased in the year
following the full amortisation of certain intangible assets.
Share based payments in 2019 of £0.1m (2018: £0.8m) have decreased significantly due to the
reduction in the number of share options from 10.6m to 7.6m. Forfeitures and lapses of 0.5m
and 5.6m share options respectively resulted in a reversal of charges previously recognised.
This was offset by an expense recognised for 3.6m new share options granted during the year
and an additional charge recognised on 1.6m share options that vested during the year.
Loss on disposal of subsidiary
The loss on disposal of subsidiaries of £0.1m (2018: £nil) relates to the sale of Venture
Business Research Limited (“VBR”).
16
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
Underlying revenue and profit
The Group also measures and presents performance in relation to various other non-GAAP measures, such as underlying revenue. These have
been presented to provide users with additional information and analysis of the Group’s performance, consistent with how the Board monitors
results. The Group’s activities are predominantly UK-based and therefore currency movements do not have a material impact on results.
In the year, the Group disposed of VBR which was included in The Lawyer business unit. Due to its size it has not been treated as
discontinued and its revenues are therefore reported as part of the Group’s continuing revenue. However, for underlying reporting purposes,
its revenue (2019: £0.1m 2018: £0.3m) has been excluded. Marketing Week Live, which was included in Xeim, has been closed and
therefore its revenue has also been excluded for underlying reporting purposes.
CAP and segment profit
At the half year we disclosed our internal profitability performance measure by segment – contribution after portfolio costs (“CAP”). We
reported CAP for three different segments – Xeim, The Lawyer and Central. CAP was an interim measure so that we could illustrate the
contributions of the business units while the Group was transitioning to the new simplified model.
In order to increase clarity over the underlying profitability of our business units, Xeim and The Lawyer, we are now reporting the “segment profit” of
our business units, being the adjusted operating profit of each segment. Segment profit builds upon and replaces the concept of CAP by including
specific allocations of the central support teams and overheads that are directly related to each business unit, in order to demonstrate the stand-
alone profitability. Any costs not specifically attributable to either Xeim or The Lawyer, remain as part of central costs. This is different from the
concept of segmental reporting used in prior years when central overheads were fully allocated on a revenue basis to the operating segments.
The table below shows the statutory and underlying revenue for each business unit:
Underlying revenue
Premium Content
Marketing Services
Training and Advisory
Events
Marketing and Advertising Solutions
Telemarketing Services
Total underlying revenue
Underlying revenue growth
Revenue from closed or disposed
businesses
Total statutory revenue
Xeim
2019
£m
11.0
4.3
7.6
3.1
4.3
9.3
39.6
(4)%
1.1
40.7
The Lawyer
2019
£m
3.4
–
–
2.1
2.6
–
8.1
9%
0.1
8.2
Total
2019
£m
14.3
4.3
7.6
5.3
6.9
9.3
47.7
(2)%
1.2
48.9
Restated
The Lawyer
2018
£m
2.9
–
–
1.8
2.7
–
7.4
0.3
7.7
Xeim
2018
£m
11.2
4.5
8.0
3.2
4.6
9.6
41.1
1.5
42.6
The table below reconciles the adjusted operating profit/(loss) for each segment to the adjusted EBITDA:
Revenue
Other income
Operating costs
Adjusted operating profit/(loss)
Adjusted operating margin
Depreciation, amortisation and
impairment
Adjusted EBITDA (post-IFRS16)
Adjusted EBITDA margin (post-IFRS16)
Adjusted EBITDA (pre-IFRS 16)
Adjusted EBITDA margin (pre-IFRS16)
Xeim
2019
£m
40.7
–
(36.6)
4.1
10%
The Lawyer
2019
£m
8.2
–
(5.9)
2.3
28%
3.5
7.6
19%
6.3
15%
0.9
3.2
39%
2.9
35%
Central
2019
£m
–
1.6
(9.1)
(7.5)
1.1
(6.4)
(6.6)
Total
2019
£m
48.9
1.6
(51.6)
(1.1)
(2)%
5.5
4.4
9%
2.6
5%
Xeim
2018
£m
42.6
–
(39.3)
3.3
8%
1.8
5.1
12%
The Lawyer
2018
£m
7.7
–
(5.7)
2.0
Central
2018
£m
–
0.8
(8.3)
(7.5)
26%
0.5
2.5
32%
1.3
3.6
(6.2)
1.4
3%
Total
2018
£m
14.1
4.5
8.0
5.0
7.3
9.6
48.5
1.8
50.3
Total
2018
£m
50.3
0.8
(53.3)
(2.2)
4%
As described above, the Group adopted IFRS 16 in 2019 but took the exemption not to re-state the comparatives for the prior year.
As a result, year-on-year business unit profitability between 2019 and 2018 is not directly comparable except at a pre-IFRS 16 adjusted
EBITDA level which for both years includes property rent charges. Both pre-IFRS 16 and post-IFRS 16 adjusted EBITDA for each business
unit for 2019 are provided in the table above. Depreciation, amortisation and impairment for 2019 includes the higher depreciation charge
arising from the application of IFRS 16.
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www.centaurmedia.comSTRATEGIC REPORT
PERFORMANCE:
FINANCIAL REVIEW CONTINUED
Net finance costs
Net finance costs were £0.3m (2018: £0.2m). The Group reported an opening cash position at 1 January 2019 of £0.1m and has held more
significant cash balances following the divestment programme. Consequently, the vast majority of finance costs in 2019 are as a result of the
commitment fee payable for the revolving credit facility.
Taxation
A tax credit of £0.7m (2018: £1.1m) has been recognised on continuing operations for the year. The adjusted tax charge was £0.5m (2018:
a credit of £0.4m) giving an adjusted effective tax rate (compared to adjusted profit before tax) of nil% (2018: 17%). The Company’s profits
were taxed in the UK at a blended rate of 19.0% (2018: 19.0%). On a reported basis, the effective tax rate is 8% (2018: 5%). See note 7 for
a reconciliation between the statutory reported tax charge and the adjusted tax charge.
Discontinued operations
Discontinued operations relate to the four divestments made during the first half of the year as described in the CEO's report. The profit from
discontinued operations in 2019 and a reconciliation of the 2018 results compared to the results reported last year is as follows:
Revenue
Other operating income
Net operating expenses
Profit on disposal
Operating profit/(loss)
Finance costs
Profit/(loss) before tax
Taxation
Profit/(loss) after tax
Discontinued
2019
£m
7.0
–
(4.3)
7.8
10.5
–
10.5
(0.6)
9.9
Discontinued
2018
£m
20.2
–
(13.9)
0.1
6.4
–
6.4
(1.2)
5.2
Continuing
2018
£m
50.3
As reported
2018
£m
70.5
0.8
(71.4)
–
(20.3)
(0.2)
(20.5)
1.1
(19.4)
0.8
(85.3)
0.1
(13.9)
(0.2)
(14.1)
(0.1)
(14.2)
Earnings/losses per share
The Group has delivered adjusted diluted earnings per share for the year of 0.3 pence (2018: 2.6 pence). Diluted earnings per share for
the year were 1.3 pence (2018: a loss of 9.9 pence). Full details of the earnings per share calculations can be found in note 9 to the
financial statements.
Dividends
In October 2019, an interim dividend of 1.5p per share was paid relating to 2019 (2018: 1.5p). A return of cash of 2.0p per share, in the form
of a special dividend, was also announced as part of the interim results and paid along with the interim dividend.
At the time of the interim results, the Group confirmed a new dividend policy, applicable from 1 January 2020, such that Centaur will target a
pay-out ratio of 40% of adjusted earnings, subject to a minimum dividend of 1.0p per share per annum.
In light of this new policy, a final ordinary dividend of 0.5p per share is proposed by the Directors in respect of 2019 (2018: 1.5p), giving a
total ordinary dividend for the year ended 31 December 2019 of 2.0p (2018: 3.0p). This brings the total of ordinary and special dividends
paid to shareholders relating to 2019 to £5.7m (4.0p per share), which is £4.3m (3.0p per share) more than the dividends that would have
been paid under the new policy.
The final dividend in respect of the year is subject to shareholder approval at the Annual General Meeting and, if approved, will be paid on 29
May 2020 to all ordinary shareholders on the register at the close of business on 11 May 2020.
After starting the year with only £0.1m of cash, the £16.4m net proceeds from divestments have been spent on the excess dividends
of £4.3m and exceptional costs relating to the Group’s central cost reductions and divestment programme of £4.7m while retaining an
acceptable minimum level of liquidity for the Group. The Board was planning a further return of cash as a special dividend alongside the
ordinary dividend in May. However, the uncertainty resulting from coronavirus pandemic has caused the Board to take a prudent approach
and there will be a delay in any further special dividends until we have better clarity of the potential impact on Centaur, if any. The Group
closed 2019 with cash of £9.3m (2018: £0.1m).
18
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
Cashflow
Adjusted operating loss
Depreciation, amortisation and impairment
Movement in working capital
Adjusted operating cash flow
Capital expenditure
Cash impact of adjusting items
Taxation
Repayment of finance lease obligations
Interest and finance leases
Loan arrangement fees
Free cash flow
Acquisitions
Disposal of subsidiaries
Share repurchases
Dividends paid to Company’s shareholders
Increase/(decrease) in net cash
Opening net cash
Closing net cash
Cash conversion
2019
£m
1.8
5.5
(0.0)
7.3
(1.6)
2.7
0.1
(2.3)
(0.2)
–
0.6
(0.1)
16.4
(0.6)
(7.1)
9.2
0.1
9.3
2018
£m
5.2
3.7
(1.3)
7.6
(2.8)
(0.8)
(1.2)
–
(0.4)
(0.2)
2.2
(1.8)
0.3
(0.4)
(4.3)
(4.0)
4.1
0.1
100%
85%
Adjusted operating cash flow is not a measure defined by IFRS. Centaur defines adjusted operating cash flow as cash flow from operations
excluding the impact of adjusting items, which are defined above. The Directors use this measure to assess the performance of the Group
as it excludes volatile items not related to the core trading of the Group and includes the Group’s management of capital expenditure. A
reconciliation between cash flow from operations and adjusted operating cash flow is shown in note 1(b) to the financial statements. The
cash impact of adjusting items primarily relates to exceptional restructuring costs in both years.
MAP22
As referred to in the CEO’s report and our interim results presentation, the Group introduced its Margin Acceleration Programme (MAP22) in
September 2019 which targets an adjusted EBITDA margin of at least 20% by 2022 (excluding the impact of IFRS 16). This will be achieved
by the targeted costs savings of £5m per annum together with profitable revenue growth. Targeted cost savings represent roughly half of the
increase in EBITDA required to meet the targeted 20% EBITDA margin. This cost saving target had been achieved on an annualised basis
by the end of December 2019 and the full benefit will be reflected in the 2020 financial performance.
Financing and bank covenants
In November 2018, the Group agreed an amendment and extension of the existing £25 million revolving credit facility which had been signed
in 2015. The facility’s terms include quarterly testing of leverage and interest cover ratios and security has been granted over the Group’s
assets. The initial period of the extension was three years until November 2021 with the option to extend by two further single years subject
to bank approval.
The principal financial covenants under the facility are: the ratio of net debt to adjusted EBITDA shall not exceed 2.5:1, and the ratio of
EBITDA to net finance charges shall not be less than 4:1. The Group remained well within its banking covenants during the year and had not
drawn down any of its £25 million revolving credit facility at the end of 2019.
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www.centaurmedia.comSTRATEGIC REPORT
PERFORMANCE:
FINANCIAL REVIEW CONTINUED
Balance sheet
A summary of the Group’s balance sheet as at 31 December 2019 and 2018 is set out below:
Goodwill and other intangible assets
Property, plant and equipment
Deferred taxation
Deferred income
Other current assets and liabilities
Non-current liabilities
Net assets before cash
Net cash
Net assets
2019
£m
61.2
4.3
1.0
(8.7)
(3.7)
(2.3)
51.8
9.3
61.1
Restated
2018
£m
78.1
1.3
0.3
(15.0)
2.0
(0.1)
66.6
0.1
66.7
It should be noted that the prior year balance sheet, unlike the income statement, is not adjusted to reflect the divestment programme that
occurred in 2019. However, trade receivables and other payables in 2018 have been restated to gross up credits of £0.8m which had been
previously reported in trade receivables as described in note 1 (a) (ii).
In 2019, goodwill and other intangibles have reduced by £16.9m mainly due to the impact of the divestment programme (£12.8m). Property,
plant and equipment have increased mainly as a result of the right-of-use property assets of £3.7m recognised under IFRS 16. Other
current assets and liabilities have been significantly reduced year-on-year by the divestment programme as shown in note 14 to the financial
statements.
Going concern
After due consideration, as required under IAS 1 Presentation of Financial Statements, including consideration of the Group’s net current
liability position, the Group’s forecasts for at least twelve months from the date of this report, and the effectiveness of risk management
processes, the Directors have concluded that it is appropriate to continue to adopt the going concern basis in the preparation of the
consolidated financial statements for the year ended 31 December 2019. As detailed under the Risk Management section, the Directors
have assessed the viability of the Group over a three-year period to December 2022 and the Directors have a reasonable expectation that
the Company will be able to continue in operation and meet its liabilities as they fall due over the period to December 2022.
Conclusion
The Group has successfully completed its strategic divestment programme and is now leaner and fitter for the future as it focuses on Xeim
and The Lawyer. Our balance sheet is stronger than before with over £9m of cash in the bank at year end and a £25 banking facility that
the Group is not intending to draw down in the foreseeable future. Notwithstanding the impact of coronavirus, we stand in a strong place to
execute MAP22 having met our targeted annualised cost reduction programme of £5m. I would like to thank all the employees of Centaur
for their commitment and patience as the Group has completed its divestment and restructuring programmes.
SIMON LONGFIELD
Chief Financial Officer
17 March 2020
20
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
Alternative performance measures
Definition
Measure
Adjusted EBITDA (pre-IFRS 16)
Adjusted EBITDA (post-IFRS 16)
Adjusted operating profit before depreciation and impairment of tangible assets and
amortisation and impairment of intangible assets other than those acquired through a
business combination, before the impact of IFRS 16 to remove property rent charges.
Adjusted operating profit before depreciation and impairment of tangible assets and
amortisation and impairment of intangible assets other than those acquired through
a business combination, after the impact of IFRS 16 to remove property rental charges.
This measure is new, reflecting the adoption of IFRS 16.
Adjusted EBITDA margin
Adjusted EBITDA (pre-IFRS 16) as a percentage of revenue.
Adjusted effective tax rate
Adjusted tax charge as a percentage of Adjusted profit before tax.
Adjusted EPS
Adjusting items
EPS calculated using Adjusted profit for the period.
Items as set out in the statement of consolidated income and notes 1(b) and 4 of the
financial statements including exceptional items, and volatile items predominantly relating
to investment activities and other separately reported items.
Adjusted operating profit/(loss)
Operating profit/(loss) excluding Adjusting items.
Adjusted profit before tax
Profit before tax excluding Adjusting items.
CAP
Cash conversion
Exceptional items
Free cash flow
Segment profit
Revenue generated by a segment less its costs of sales and all costs attributable to
marketing, selling, content production and delivery of that revenue. This measure is new as
described on page 17.
Adjusted operating cash flow/adjusted EBITDA (post-IFRS 16).
Items where the nature of the item, or its magnitude, is material and likely to be non-
recurring in nature as shown in note 4.
Increase/decrease in cash for the year before the impact of debt, acquisitions, disposals,
dividends and share repurchases.
Adjusted operating profit of a segment after allocation of central support teams and
overheads that are directly related to each segment or business unit. As explained in the
Financial Review, central costs were fully allocated in prior years.
Underlying revenue
Revenue adjusted to exclude the impact of revenue contribution arising from acquired,
disposed or closed businesses (“excluded revenue”).
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www.centaurmedia.comSTRATEGIC REPORT RISK MANAGEMENT
Risk management approach
The Board has overall responsibility for the
effectiveness of the Group’s system of risk
management and internal controls, and
these are regularly monitored by the Audit
Committee.
Details of the activities of the Audit
Committee in this financial year can be
found in the Audit Committee Report on
pages 41 to 43.
The Executive Committee, Company
Secretary and the Head of Legal are
responsible for identifying, managing and
monitoring material and emerging risks in
each area of the business and for regularly
reviewing and updating the risk register, as
well as reporting to the Audit Committee in
relation to risks, mitigations and controls.
As the Group operates principally from one
office and with relatively short management
reporting lines, members of the Executive
Committee are closely involved in day-to-
day matters and are able to identify areas
of increasing risk quickly and respond
accordingly. The responsibility for each risk
identified is assigned to a member of the
Executive Committee. The Audit Committee
considers risk management and controls
regularly and the Board formally considers
risks to the Group’s strategy and plans as
well as the risk management process as
part of its strategic review.
The risk register is the core element of the
Group’s risk management process. The
register is maintained by the Company
Secretary with input from the Executive
Committee and the Head of Legal. The
Executive Committee initially identifies the
material risks and emerging risks facing the
Group and then collectively assesses the
severity of each risk (by ranking both the
likelihood of its occurrence and its potential
impact on the business) and the related
mitigating controls.
As part of its risk management processes,
the Board considers both strategic and
operational risks, as well as its risk appetite
in terms of the tolerance level it is willing
to accept in relation to each principal risk,
which is recorded in the Company’s risk
register. This approach recognises that
risk cannot always be eliminated at an
acceptable cost and that there are some
risks which the Board will, after due and
careful consideration, choose to accept.
The Group’s risk register, its method of
preparation and the operation of the key
controls in the Group’s system of internal
control are regularly reviewed and overseen
by the Audit Committee with reference to
the Group’s strategic aims and its operating
environment. The register is also reviewed
and considered by the Board.
As part of the ongoing enhancement of
the Group’s risk monitoring activities, we
reviewed and updated the procedures
by which we evaluate principal risks and
uncertainties during the year.
Principal risks
The Group’s risk register currently includes
operational and strategic risks. The principal
risks faced by the Group in 2019, taken
from the register, together with the potential
effects and mitigating factors, are set out
below. The Directors confirm that they
have undertaken a robust assessment of
the principal and emerging risks facing the
Group. Financial risks are shown in note 28
to the financial statements.
Risk number 1 has been updated from
last year’s Annual Report to include the
wider risk of failure to deliver a high growth
performance culture. Risk number 2 has
been updated from last year’s Annual
Report to include the wider risk of sensitivity
to the UK/sector economic conditions,
instead of just the risk related to print
products.
22
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Movement in
risk
The Board
considers
this risk to be
broadly the
same as the
prior year,
following the
simplification
programme.
The Board
considers this
risk to have
increased since
the prior year.
Rank
Risk
Description of risk and impact
Risk mitigation/control procedure
1
Failure to deliver
a high growth
performance culture.
The risk that Centaur
is unable to attract,
develop and retain
an appropriately
skilled, diverse and
responsible workforce
and leadership
team, and maintain
a healthy culture
which encourages
and supports ethical
high-performance
behaviours and
decision-making.
Difficulties in recruiting
and retaining staff
could lead to loss of
key senior staff.
Failure to implement
the simplification
programme.
Centaur’s success depends on growing
the business and completing the MAP22
strategy. In order to do this, it depends in
large part on its ability to recruit, motivate
and retain highly experienced and qualified
employees in the face of often intense
competition from other companies, especially
in London.
In 2019 it was exacerbated by:
a. the simplification programme;
b. the formation of the Xeim group; and
c. the reduction of overheads.
Investment in training, development and pay
awards needs to be compelling but will be
challenging in the current economic climate.
Implementing a working environment that
allows for agile and remote delivery is
necessary to keep the “millennial” workforce
engaged.
High staff churn (a challenge for all media
and events companies) affects budget,
productivity and continuity for customers.
Developing the 2022 business strategy and
changes required in skill set and culture are
challenging and costly.
2
Sensitivity to UK/
sector economic
conditions.
Centaur’s UK focus makes Centaur highly
sensitive to UK/sector economic conditions.
This risk remained high during 2019
and continues while the terms of the UK
leaving the EU are uncertain. The current
uncertainties caused by coronavirus have
also increased the short-term risk to the
Group.
We regularly review measures aimed
at improving our ability to recruit and
retain employees and to track employee
engagement.
The move to WeWork in Waterloo, a
bright, modern and flexible workspace,
and with good transport connections
should be a compelling environment for
staff and improve our ability to recruit and
retain employees and to track employee
engagement.
Weekly “check-ins” via ENGAGE ensure
we have a weekly “mood” of the business
and an understanding of any key risks or
challenges as they arise.
An employee engagement team has
been set up, known as DICE to focus
on Diversity, Inclusion, Culture and
Engagement along with other key issues
and opportunities that can challenge the
business. This is sponsored by the CEO
and a Non-Executive Director.
Key senior leaders have had their
reward packages reviewed and, where
appropriate, increased notice periods
and restrictive covenants have been
introduced.
A review takes place annually to ensure
flight risks and training needs are
identified which become the focus for
pay, reward and development areas.
All London based staff continue to be
paid at or above the London Living
Wage.
Our HR processes include exit interviews
for all leavers to resolve areas of concern.
Most of the risk impacts Centaur
indirectly from our customers.
Part of the strategic plan for Centaur is
to increase international organic growth
in the mid to longer term, focusing on
the US and Asia in particular, in order to
mitigate this risk.
Many of the Group’s products are
market-leading in their respective sectors
and are an integral part of our customers’
operational processes, which mitigates
the risk of reduced demand for our
products.
The Group regularly reviews the political
and economic conditions and forecasts
for the UK, including specific risks such
as coronavirus, and the main sectors
in which it operates to assess whether
changes to its product offerings or pricing
structures are necessary.
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www.centaurmedia.comSTRATEGIC REPORT RISK MANAGEMENT
CONTINUED
Rank
Risk
Description of risk and impact
Risk mitigation/control procedure
3
4
Fraudulent or
accidental breach
of our security, or
ineffective operation
of IT and data
management systems
leads to loss, theft or
misuse of personal
data or confidential
information or
other breach of
data protection
requirements.
A serious occurrence of a loss, theft or
misuse of personal data or sensitive or
confidential information could result in
reputational damage, a breach of data
protection requirements or direct financial
impact. See risk 4: GDPR, PECR below.
Centaur collects and processes personal
data and confidential information from some
of its customers, users and other third
parties.
Centaur is at risk from a serious occurrence
of a loss, theft or misuse of personal data
or confidential information on our software/
hardware due to the actions of a Centaur
employee, partner or third party.
Regulatory; GDPR,
PECR and other
similar legislation
involve strict
requirements
regarding how
Centaur handles
personal data,
including that of
customers and the
risk of a fine from
the ICO, third party
claims (e.g. from
customers) as well as
reputational damage
if we do not comply.
The General Data Protection Regulation
(‘GDPR’), which is the data protection law
that came into force in May 2018, involves
much stricter requirements for Centaur
regarding its handling of personal data.
This includes:
•
customers and employees having greater
rights on how we use their data;
• Centaur having to provide specific
information to our customers on how we
use their personal data;
•
strict rules around how we conduct our
direct marketing activities;
• personal data being kept more securely;
time and access;
•
•
•
•
contracts with suppliers that handle our
data to include GDPR compliant clauses;
new rules about notifying the ICO in the
event of a breach of GDPR;
a short time period for responding
to “subject access requests” from
customers and employees;
a requirement to demonstrate how
we comply with GDPR, which means
more onerous internal record-keeping
obligations;
Appropriate IT security is undertaken
for all key processes to keep the IT
environment safe.
Websites are hosted by specialist third-
party providers who provide warranties
relating to security standards.
All of our websites have been migrated
onto a new and more secure platform
which is cloud hosted and databases
have been cleansed and upgraded.
External access to data is protected and
staff are instructed to password protect
or encrypt where appropriate.
The Group Head of Data ensures
that rigorous controls are in place to
ensure that warehouse data can only
be downloaded by the data team.
Integration of the warehouse with current
databases and data captured and stored
elsewhere is ongoing.
Centaur has a business continuity plan
which includes its IT systems and there
is daily, overnight back-up of data, stored
off-site.
Please see risk 4 below for specifics
relating to GDPR compliance/data.
Centaur has taken a wide range of
measures aimed at complying with the
key aspects of GDPR.
The measures taken include:
•
•
•
•
•
•
•
updating the marketing permissions
on our websites and event
registration pages to ensure
language is specific/unambiguous;
updating the unsubscribe process;
improving our data complaints
procedures;
improving our procedures for
removing individuals from databases
where details are inaccurate/not
needed;
updating our standard terms and
conditions across all products;
updating our privacy and cookies
policy and website terms and
conditions; and
amending our contracts with
suppliers who provide us with
personal data (ie lists) or who handle
data on our behalf.
Movement in
risk
The Board
considers
this risk to be
broadly the
same as the
prior year.
The Board
considers
this risk to be
broadly the
same as the
prior year.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Rank
Risk
Description of risk and impact
Risk mitigation/control procedure
Movement in
risk
•
•
a requirement to carry out data impact
assessments for new types of personal
data processing undertaken; and
a requirement to keep under review the
need for a Data Protection Officer.
The Privacy and Electronic Communications
Regulations (PECR) implements the EU
“E-Privacy” Directive and sits alongside the
GDPR. PECR includes specific obligations for
businesses like Centaur regarding how they
conduct electronic marketing calls, emails,
texts, and on their use of cookies and similar
technologies, among other things.
In the event of a serious breach of the GDPR
and or PECR, Centaur could be subject
to a significant fine from the regulator (the
ICO) and claims from third parties including
customers as well as reputational damage.
The maximum fine of 20 million Euro for
breach of GDPR is much higher than fines
under the old UK data protection legislation.
The maximum fine for breaches of PECR is
£500,000, and directors’ liability for serious
breaches of marketing rules has recently
been introduced.
The obligations for Centaur under the GDPR
and PECR ae complex and continuing,
meaning this area requires continued focus.
Following the adoption of the GDPR by EU
member states, certain other countries and
jurisdictions worldwide are also reviewing
and updating their own laws relating to
data and privacy. The extent to which
Centaur is required to comply with the laws
in each of these jurisdictions depends on
the circumstances, and there is a risk that
Centaur may not be compliant with all such
laws and could therefore be subject to
regulatory action and fines from the relevant
regulators and data subjects.
More recent measures taken to improve
the Company’s compliance with the laws
on electronic marketing include:
• a data deletion exercise in order to
ensure data maintained is in line
with our data retention policy;
•
outsourcing CPTS screening to a
third-party supplier for specific list
screening;
• quarterly training for sales and
marketing staff; and
• a newly formed Data Protection
Compliance Committee which is
responsible for monitoring Centaur’s
ongoing compliance with data
protection laws.
Recent guidance published by the
ICO relating to the use of cookies, and
further changes to the laws relating to
data privacy, ad tech and electronic
marketing expected in late 2019/20, will
further increase the regulatory burden
for businesses like Centaur, and the
requirements in this regard will need to be
kept under review.
The business has taken advice on what
it needs to mitigate its risk in respect of
the CCPA and has a plan in place for
actioning this.
Staff training will be provided in-house
on key legislation, and any changes to it,
where appropriate including PECR.
Centaur’s in-house lawyer keeps abreast
of material developments in data
protection law and regulation and advice
from external law firms is sought where
appropriate. Given the increasingly
global nature of our business and our
customers Centaur’s approach to
complying with data protection laws in
other jurisdictions should be kept under
review.
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www.centaurmedia.comSTRATEGIC REPORT RISK MANAGEMENT
CONTINUED
Movement in
risk
The Board
considers
this risk to be
broadly the
same as the
prior year.
Rank
Risk
Description of risk and impact
Risk mitigation/control procedure
5
Serious systems
failure (affecting core
systems and multiple
products or functions)
or breach of IT
network security (as a
result of a deliberate
cyber-attack or
unintentional event).
Centaur relies on its IT network to conduct
its operations. The IT network is at risk of
a serious systems failure or breach of its
security controls. This could result from
deliberate cyber-attacks or unintentional
events and may include third parties gaining
unauthorised access to Centaur’s IT network
and systems resulting in misappropriation of
its financial assets, proprietary or sensitive
information, corruption of data, or operational
disruption, such as unavailability of our
websites and our digital products to users or
unavailability of support platforms.
If Centaur suffers serious cyber-attacks,
whether by a third party or insider, any
operational disruption may directly affect our
revenues or collection activities.
Centaur may incur significant costs and
suffer other negative consequences, such
as remediation costs (including liability for
stolen assets or information, and repair of
any damage caused to Centaur’s IT network
infrastructure and systems). Centaur may
also suffer reputational damage and loss
of investor confidence resulting from any
operational disruption.
Centaur has invested significantly in
its IT systems and where services are
outsourced to suppliers, contingency
planning is carried out to mitigate risk of
supplier failure.
The ongoing development of CRM (PCI
compliance) and finance systems.
Lockton’s, our insurance advisor, has
advised us in relation to additional cover
that is appropriate to insure against a
serious failure of IT network security
controls.
Our policies were upgraded in 2018 to
further ensure our staff are clear and
accountable for their IT compliance. This
is checked on an ongoing basis.
In 2019 Centaur also implemented a
number of security improvements to
better protect and monitor our network,
systems and data eg CloudStrike.
New starters receive both Terms and
Conditions plus the staff IT policy.
Going concern basis of
accounting
In accordance with provision 30 of the
UK Corporate Governance Code 2018,
the Directors’ statement as to whether
they consider it appropriate to adopt the
going concern basis of accounting in
preparing the financial statements and their
identification of any material uncertainties,
including the principal risks outlined above,
to the Group’s ability to continue to do so
over a period of at least twelve months
from the date of approval of the financial
statements and for the foreseeable future
can be found on page 36.
Viability statement
In accordance with provision 31 of the
UK Corporate Governance Code 2018,
the Directors have assessed the viability
of the Group over a three-year period to
December 2022, taking account of the
Group’s current position, the Group’s
strategy, the Board’s risk appetite and,
as documented above, the principal risks
facing the Group and how these are
managed. Based on the results of this
analysis, the Directors have a reasonable
expectation that the Company will be
able to continue in operation and meet its
liabilities as they fall due over the period to
December 2022.
The Board has determined that the
three-year period to December 2022 is an
appropriate period over which to provide
its viability statement because the Board’s
financial planning horizon covers a three-
year period. In making their assessment, the
Directors have taken account of the Group’s
existing financing arrangements to 2022
(which allows extensions to 2023 on similar
terms), cash flows, dividend cover and other
key financial ratios over the period.
These metrics are subject to stress testing
which involves sensitising a number of
the main assumptions underlying the
forecasts both individually and in unison.
The main assumption sensitised included
a scenario where the Group’s forecast
EBITDA dropped by 50%, as well as short
term cash conversion issues. Scenarios
relating to the current immediate risk relating
to coronavirus were also considered. In a
scenario where the Group's EBITDA fell by
86% over the three-year financial planning
horizon, and without management taking
mitigating actions, the Group would breach
its banking covenants in the fourth quarter
of 2022. Where appropriate, this analysis
is carried out to evaluate the potential
impact of the Group’s principal risks actually
occurring, such as failure to deliver a high
growth performance culture, UK economic
conditions, breach of security, data
compliance and systems failure. Sensitising
the model for changes in the assumptions
and risks affirmed that the Group would
remain viable over the three-year period to
December 2022.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 S.172 STATEMENT UK COMPANIES ACT 2006
She will also ensure that our gender,
diversity and environmental ambitions are
realised with actionable plans.
More information on people, talent
development, health and safety, diversity,
gender pay, anti-slavery and human
trafficking policy, environment, emissions
and charitable donations can be found in
the Corporate Responsibility section on
pages 29 to 31.
The Board recognises its responsibility
to take into consideration the needs and
concerns of all our stakeholders as part
of its discussion and decision-making
processes. By understanding and
communicating with our key stakeholder
groups, we can factor their insights and
concerns into these discussions and ensure
that we act in a way most likely to promote
the success of the Company for the benefit
of members as a whole.
Our people are our most important asset
and are crucial to our success. Having the
right people with the right skills at all levels
in our organisation is critical to building a
quality, sustainable business and delivering
our strategy. Our culture is characterised
as customer focused, commercial, diverse,
grounded and innovative with a Can do, Will
do, Now! attitude.
The Board also recognises the importance
of developing the values and culture of
the Company and the necessity for high
standards of business conduct throughout
the Group to support its strategy. These
values and standards are cascaded to
the business from the executive directors,
through the Executive Committee and the
senior leadership team, and to employees
via town hall gatherings and other formal
and informal methods of communication.
During 2019 we established a workforce
advisory panel to cover Diversity, Inclusion,
Culture and Engagement (DICE). This
comprises ten employees from across
the Group and is led by one of our senior
leadership team. DICE reports to the CEO
and Carol Hosey has been appointed as
the Non-Executive director sponsor of
DICE. Her role is to ensure that employee
sentiment is clearly communicated to the
Board.
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www.centaurmedia.comSTRATEGIC REPORT S.172 STATEMENT UK COMPANIES ACT 2006
CONTINUED
The table below sets out our key stakeholder groups. Each stakeholder group requires an individual engagement approach to promote
effective and mutually beneficial relationships.
Stakeholder Group
How we engage?
Why we engage?
Shareholders
Our shareholders
play an important
role in monitoring
and safeguarding the
governance of the
Company.
Formal documented shareholder
roadshow meetings, post results
presentations and market updates.
Other ad hoc shareholder meetings as
required and requested.
Annual General Meeting.
Consultation prior, during and post
strategic decision making or execution.
We work to ensure that our shareholders
and their representatives have a good
understanding of, and are supportive of,
our strategy, business model, opportunity
and culture.
What matters to this
Group?
Strategy and business
model, long term
share value growth,
sustainable dividend
policy, financial stability
and culture.
Customers
Without customers there
is no business.
Every day we interact with a wide variety
of existing and potential customers. This
is with a view to understand customer
requirements/feedback, to manage their
expectations and to generate profitable
revenue.
To help our customers achieve their
goals. Customers provide repeatable and
recurring revenues and some customers
provide significant revenue. The impact of
strategic decisions on our customers are
carefully considered and monitored on an
ongoing basis.
Innovative products.
The customer
experience.
Customer satisfaction.
Employees
The Company has a
diverse workforce which
is recognised as a key
asset of our business.
At 31 December 2019
there was a total of 565
employees based in
London, Portsmouth and
New York.
Bi-monthly Executive Committee
meetings.
To ensure that communication is clear and
understood throughout the Company.
Monthly Leadership team meetings.
Weekly team meetings.
Quarterly town halls to employees are
recorded for viewing by our Portsmouth
and New York offices.
A weekly online sense check
questionnaire (“ENGAGE”).
A quarterly engagement survey.
Annual appraisals and objective-setting
process.
DICE established so that all employees
have a voice and their views are
considered.
The Company is working hard to drive
its status as a destination employer by
creating the right environment and culture.
ENGAGE analyses general motivation
and sentiment. This is anonymised and
therefore encourages employees to be
honest about issues or problems.
Quarterly employee engagement surveys
for all employees to have a voice with
measurable KPI’s benchmarked. The
Company believes that diversity enhances
business performance and environment.
Strategic suppliers
Meetings with suppliers as appropriate,
together with negotiations on the terms
and conditions of supply.
There are certain strategic suppliers
who underpin the business operations.
Strategic decisions consider the impact
on these suppliers, in terms of capability,
scale, value for money and risk.
Opportunities for
employee development
and progression. Agile
working patterns.
Opportunity to share
ideas and make a
difference, diversity and
inclusion and climate
consideration.
To ensure that Centaur
can comply with agreed
terms and conditions.
The values of our
suppliers and their high
standards of business
conduct.
Innovation and product
development.
Community
The Company supports local
communities and charitable
organisations through direct fundraising
and donations. During the year, the
Company supported two charities.
To be a good corporate citizen and give
back to the communities and charities
that are important to our employees.
Inclusion of employee
sentiment and what is
important to them.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 CORPORATE RESPONSIBILITY
relation to fire safety. Where work-related
activities take place, which have a higher
risk attached – such as travel, marketing
events and outdoor activities – additional
planning is undertaken which includes a
risk assessment and mitigation plan. To
minimise risk to the health and safety of our
employees in the event of a major disaster
or emergency, our business continuity plan
is regularly revised and tested.
Diversity
Centaur Media strongly encourages diversity
across the Group and is committed to
recruiting and promoting the most talented
people from the widest pool and providing
equal opportunities for all employees and
prospective employees. To support this aim,
the Group has an Equal Opportunities Policy
which covers recruitment and selection,
promotion, training and development and
standard contract terms for all staff. We also
support apprenticeships which increase our
talent pool and demonstrates the Group’s
commitment to reaching out to young
people from a variety of backgrounds.
We offer internships and work experience
opportunities for people from a variety of
backgrounds.
At 31 December 2019 one of our six (17%)
Board members was female and one out of
five (20%) of our Executive Committee was
female. The percentages fluctuated during
the year due to changes in the Board’s
membership. From 1 April 2020, following
the appointment of two new Non-Executive
Directors, one-third of the Board will be
female.
As at 31 December 2019, our workforce
overall was 51% female (288 employees)
and 49% male (277 employees). We proudly
support flexible working opportunities, and
8% of staff are employed on a part-time
basis.
Gender pay
We carry out an annual analysis on Gender
Pay and will be submitting and publishing
the result for 2019 at the beginning of April
2020. The report can be found at www.
centaurmedia.com.
Anti-slavery and human trafficking
policy
We implemented the provisions of the
UK Modern Slavery Act 2015 in 2016
and adopted an anti-slavery and human
trafficking policy. Our Slavery and Human
Trafficking Statement is published on
our website in March each year at www.
centaurmedia.com.
Our people
Talent development
Centaur Media is committed to developing
a culture of environmental awareness and
social responsibility and we seek, where
appropriate, to incorporate environmentally
and socially responsible practices into the
way we deliver services and products to
our customers and procure goods and
services from third parties. The Group has
a whistleblowing policy in place enabling
employees to report any concerns about
improper practices, including relating to
its environmental and social responsibility
practices.
Employee engagement
We have adopted an online application
(ENGAGE) which gives employees the
opportunity to provide feedback on a weekly
basis and enables management to get a
regular temperature check on motivation
and real time feedback from their teams.
Health and safety
We are committed to the safety of our
staff. We have a health and safety policy
which sets out Centaur’s responsibilities
and those of its staff concerning health and
safety in the workplace. Our Health and
Safety Committee, which is responsible for
overseeing the application of this Policy,
meets at least every six months and reports
directly to the Board on all material related
matters. Due to the nature of the business
and following our move to WeWork serviced
offices in Waterloo, risk of work-based
accidents is relatively low, but the Group
takes its responsibilities for the health and
safety of its employees seriously. Our Office
Manager is responsible for maintaining a
safe environment for employees and an
accident book is available to all staff in
Reception. We periodically carry out internal
health and safety reviews, taking follow
up action to maintain standards where
necessary, and undertake staff training in
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www.centaurmedia.comSTRATEGIC REPORT Following the move to WeWork at Waterloo
we now benefit from WeWork initiatives that
span across three operational programme
pillars: energy, materials and health. They
have eradicated single-use plastic from
100% of EMEA sites, reducing waste
disposal and ocean pollution. By influencing
the wider supply chain they prevent more
plastic from entering their buildings. They
partner with Creator Awards winner
BioBean to recycle four tonnes of coffee
per month, which are turned into burnable
logs. Office recycling bins and increased
waste streams are in 100% of UK buildings.
WeWork look for opportunities to upcycle
their waste streams into new products using
circular design and turn textiles and plastics
into new materials for their spaces. They
have achieved “Zero Waste to Landfill” for
100% of their EU sites. WeWork energy
initiatives are focussed around global
continuity, growth impact reduction and
innovation making current operations as
energy efficient as possible. WeWork
spaces are designed to promote wellbeing
showcasing innovative design for healthier
and wellness-focused work environments,
using a robust indoor environmental quality
sensor network and using healthy and
sustainable cleaning products and methods
in their buildings. They also promote
wellbeing and social impact through regular
community led events. (source: Operational
sustainability at WeWork EMEA overview
2019)
CORPORATE RESPONSIBILITY
CONTINUED
Environment and climate
change
Our impact on the environment
Climate change remains one of the
greatest challenges of our times and every
company has to play its part in minimising
its environmental footprint. Centaur Media
operates in the media sector, predominantly
in the United Kingdom, and consequently,
while Centaur recognises that its business
has an impact on the environment, including
through the use of energy and paper, our
impact on the environment is less significant
than that of companies operating in many
other sectors. As we continue to increase
our digital capabilities and products, and
to reduce our reliance on print advertising,
we are reducing our use of consumable
items such as paper and plastic over time.
The majority of our employees worked out
of a single location at Wells Street, London
until we moved to WeWork in Waterloo,
London during November and December
2019. We have only one other UK location
in Portsmouth which means that the
Group has been able to take advantage of
consolidating building-related environmental
impacts and benefiting from Group sharing
of items such as photocopiers. The Group
also has a small serviced office in New York.
The Group actively seeks to minimise
adverse environmental impacts and to
promote good environmental practices
wherever possible. We increasingly aim
to ensure that our major suppliers are
environmentally responsible. For example,
our main paper and print supplier holds the
ISO 14001 (environmental management)
accreditation and is certified by the Forest
Stewardship Council and Programme for
the Endorsement of Forestry Certification.
We donate used computer equipment
to Camara Education, which is a social
enterprise dedicated to improving education
in disadvantaged communities across
the world. Donations made by Centaur
in 2019 have benefited schools in Kenya
and Tanzania. Each will impact at least 24
children and the donated equipment will go
on to benefit at least 1,500 children.
Some of our other measures taken at
Wells Street, prior to our move to WeWork,
included:
• use of energy-efficient lighting, including
replacing existing light fittings with
energy efficient LED light fittings in
the Wells Street building including all
common parts;
•
installation of motion sensors in offices
to control lighting;
• analysing and adjusting the timing
of boilers and chillers for office air
conditioning to increase energy
efficiency;
•
stopping the use of non-recyclable cups
and reducing the use of paper hand
towels;
• buying paper that is Forest Stewardship
Council (‘FSC’) accredited which means
that the paper has been sourced in
an environmentally friendly, socially
responsible and economically viable
manner;
• active engagement in the recycling of
cans, tins, plastic, glass, cardboard
and paper, including the replacement of
traditional waste bins with recycling bins
throughout the Wells Street building as
part of a centralised recycling system
originally rolled out in 2015, together
with a monthly report showing the
percentage of waste collected that was
recycled;
• use of follow-me printing and recycling
of printer cartridges where possible;
•
increasing the use of aqueous inks,
which limit the release of volatile organic
compounds;
• use of eco-friendly taxis and courier
vehicles that are less than three years
old, and use of cyclist couriers, where
possible;
• cycle to work scheme and other
measures that facilitate cycling to work
by employees, such as the provision of
showers, changing rooms and lockers,
as well as bike storage facilities at the
Wells Street building; and
• encouraging staff to use public
transport by provision of season ticket
loans.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 STRATEGIC REPORT
Emissions
We continue to measure our carbon footprint by monitoring our energy usage and we are
pleased to confirm that we are compliant with the EU Energy Efficiency Directive ‘Energy
Saving Opportunity Scheme’ (‘ESOS’).
The greenhouse gas (‘GHG’) emissions from our operations during the year are set out
below.
Year ended 31 December 2019 global GHG emissions data:
Emissions from:
Scope 1 (gas, fuel and car mileage)
Scope 2 (electricity and steam)
Total GHG emissions
Average number of employees
Emissions per employee
2019
Tonnes CO²
105
2018
Tonnes CO²
72
384
489
661
0.7
428
500
758
0.7
Community
Charitable donations
The Group supports local communities and charitable organisations through direct
fundraising, donation and pro-bono work. During the year, a total of £75,125 was donated
to The Alzheimers Society our chosen charity partner for 2019. These donations comprised
employee contributions, a Group contribution, and third-party contributions raised through
our events. We used our events to raise money from third parties including requesting
donations in return for entry for awards and taking collections at the events. In 2018,
£71,443 was donated to Macmillan Cancer Support and £25,713 was donated to The
Connection at St Martin-in-the-Fields. Every year, the Group offers each employee a paid
day off to spend volunteering for the not-for-profit cause or charity of their choice. Employee
contributions were raised through a range of Company-wide fundraising events including
sporting events and bake sales. We also operate a Give-As-You-Earn scheme through the
payroll and offer employees the option to undertake Volunteer Days.
The Strategic Report was approved by the Board of Directors and signed by order of the
Board.
HELEN SILVER
Company Secretary
17 March 2020
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www.centaurmedia.com BOARD OF DIRECTORS
COLIN JONES
Chair
SWAGATAM MUKERJI
Chief Executive
SIMON LONGFIELD
Chief Financial Officer
WILLIAM ECCLESHARE
Senior Independent Director
Swag joined Centaur in July
2016 and has previously
held senior international
general management and
commercial financial positions
with several blue chip FMCG
companies, including United
Biscuits plc, Guinness
plc and Virgin, where he
operated as a trouble-shooter,
value creator and change
agent. As Group Finance
Director of Biocompatibles
International plc, he co-led the
commercialisation and growth
of the company with the CEO,
increasing the share price
fourfold in a falling market. Since
then he has been a C-suite
director of three private equity
backed businesses in a variety
of sectors with the common
themes of strategy refresh and
turnaround. He has also led
a substantial number of M&A
transactions and multi-lender
refinancings. Swag qualified
as a Chartered Accountant at
PricewaterhouseCoopers LLP
and is a Warwick MBA.
Colin joined Centaur on 1
September 2018 and became
Chair on 30 June 2019. Until
mid-June 2018, Colin was
Finance Director of Euromoney
Institutional Investor PLC
(Euromoney), where he worked
in leadership roles for 22 years.
He is also an independent
non-executive director, and
audit committee chair, at M&C
Saatchi PLC, and a non-
executive director and trustee
of City Lit., London’s leading
adult education college. During
his time at Euromoney, Colin
contributed to its growth to
become a global, multi-brand
information business that
has successfully transformed
itself from its traditional media
origins into a company that
is more customer-centric
and subscription-based. He
has extensive M&A expertise
through Euromoney’s many
successful transactions. Prior
to joining Euromoney, Colin was
a Director at Price Waterhouse
Europe, where he qualified as a
Chartered Accountant (ICAEW).
Member of the Remuneration
and Nomination Committees.
Chair of Remuneration
Committee until 5 February
2020.
Simon joined Centaur on 6
November 2019. He has spent
the past 10 years as CFO
of BMI Research, a leading
provider of macroeconomic,
industry and financial market
analysis, which was acquired
by Fitch Group in 2014. During
his time at BMI Research
revenues more than doubled
as the company expanded
internationally with Simon’s
support. Prior to this, Simon
was CFO of Newfound, an
AIM-listed property and leisure
group. Simon began his career
at PricewaterhouseCoopers
LLP where he qualified as a
Chartered Accountant and
worked in London and Australia.
William joined Centaur in July
2016. William is Chairman
and CEO of Clear Channel
International. He served as a
non-executive director of Hays
plc from 2004-2014, has been
a board member of the Donmar
Warehouse Theatre since
2013 and is an independent
non-executive director of Britvic
plc. William was a Partner and
Leader of European Branding
Practice at McKinsey & Co.
He has previously served in
international leadership roles
at major advertising agencies,
including as European Chairman
and CEO of BBDO (Omnicom);
European Chairman of Young
and Rubicam (WPP Group);
Chairman and CEO of Ammirati
Puris Lintas Northern Europe
(Interpublic Group); Global
Strategic Planning Director of J.
Walter Thompson Worldwide;
and CEO of PPGH/JWT
Amsterdam.
Member of the Remuneration
and Nomination Committees.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 R
REBECCA MISKIN
Non-Executive Director
ROBERT BOYLE
Non-Executive Director
CAROL HOSEY
Non-Executive Director
LESLIE-ANN REED
Non-Executive Director
Rebecca joined Centaur in
January 2011. She began her
career in media at Reed Elsevier
launching telecom-based
information services across
Europe. She has since worked
across the USA and UK at
Excite@Home, NBC Universal
and Hearst Corporation. In her
current executive consultancy
capacity, Rebecca focuses on
re-aligning organisations using
a data driven, customer-centric
and collaborative operational
approach.
Member of the Audit,
Nomination and Remuneration
Committees. Rebecca will retire
from the Board and Committees
on 31 March 2020.
Robert joined Centaur in
January 2010. Robert,
a qualified Chartered
Accountant, was a partner of
PricewaterhouseCoopers LLP,
where he was Chairman of the
PwC European Entertainment
and Media Practice for 12 years,
retiring in 2006. Since then
he has been a non-executive
director and chairman of the
audit committee of a number
of public companies.
Chair of the Audit Committee
and member of the
Remuneration and Nomination
Committees. Robert will retire
from the Board and Committees
on 31 March 2020.
Chair of the Audit Committee
and member of the
Remuneration Committee.
Robert will retire from the
Board and Committees on
31 March 2020.
Carol joined Centaur on 5
February 2020. Carol is
currently Group HR Director
at Mace, the international
consultancy and construction
group. She has extensive
remuneration experience at
executive and board level
and has spent over 20 years
in senior HR roles, including
positions at Mitie Group plc,
Nationwide Building Society and
Lloyds Banking Group.
Chair of the Remuneration
Committee and member of the
Nomination Committee with
effect from 5 February 2020.
She is also the Non-Executive
Director sponsor of Centaur’s
workforce advisory panel known
as DICE.
Leslie-Ann joined Centaur on
1 March 2020. Leslie-Ann
is a Chartered Accountant
and will become Chair of
Centaur’s Audit Committee
when Robert Boyle retires from
the Board on 31 March 2020.
Leslie-Ann is an experienced
non-executive director and
chairs the audit committees at
Learning Technologies Group
plc and Induction Healthcare
Group PLC. She is also a
non-executive director of
Bloomsbury Publishing Plc.
Leslie-Ann’s executive roles
have included CFO of the B2B
publisher Metal Bulletin plc
and the online auctioneer Go
Industry plc.
Member of the Audit,
Nomination and Remuneration
Committees.
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www.centaurmedia.comGOVERNANCE REPORT EXECUTIVE COMMITTEE
STEVE NEWBOLD
Group Managing Director
Xeim
ANDY BAKER
Managing Director
The Lawyer
JACQUIE MACKENZIE
Group Head of HR
Steve is Group Managing
Director of Xeim. He oversees
the Xeim brands comprising
Marketing Week, Festival of
Marketing, Creative Review,
Econsultancy including
Oystercatchers, Influencer
Intelligence and Fashion
& Beauty Monitor, and
MarketMakers including
Really. Prior to this Steve was
responsible for Centaur’s
Media and Events portfolios
and Home Interest Division.
Before joining Centaur in 2015
Steve held Managing Director
roles at WGSN, i2i Events,
Emap Communications (now
Ascential) and Emap Consumer
Media (now Bauer). He has
experience of running multi-
media, international businesses
in key sectors across both B2B
and consumer markets.
Andy is Managing Director of
The Lawyer. He joined Centaur
in 2017 and has over 20 years’
experience of running B2B
and B2C online businesses,
including Managing Director
positions in online acquisitions
and start-ups at ITV, Trinity
Mirror and Guardian Media
Group. Prior to joining Centaur,
he was Managing Director of
Public Sector at EMAP, part of
Ascential, where he successfully
transformed the market-leading
Health Service Journal from
print to digital-only, and from
advertising to subscriptions.
At Centaur he has successfully
delivered substantial new digital
products and accelerated
growth in subscriptions. Andy
holds a first-class degree from
Oxford and an MBA from IMD
Business School, Switzerland.
Jacquie is the Group Head of
HR and joined the Executive
Committee in January 2020.
Prior to joining Centaur in 2015,
Jacquie worked for Lloyds
Banking Group, where she
undertook a number of senior
HR roles. She also spent five
years working for Lloyd’s Retail
Banking Division in Customer
Experience and as Head of
Engagement in the London
2012 Sponsorship Team. Talent
and performance are critical to
get right in any business and
Jacquie is particularly interested
in the role that diversity, culture
and engagement play in
ensuring that Centaur achieves
to its highest potential.
34
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 DIRECTORS’ REPORT
The Directors of Centaur Media Plc (‘the Company’ or ‘the Group’),
a company incorporated and domiciled in England and Wales,
present their report on the affairs of the Group and Company
together with the audited Company and consolidated financial
statements for the year ended 31 December 2019.
There are no significant events since the balance sheet date for
disclosure in the financial statements.
Principal activities
The principal activities of the Group are the provision of business
information and specialist consultancy to selected professional and
commercial markets within the marketing and legal professions, our
two sectors. The principal activities of the Company are those of a
holding company.
Business review
The Strategic Report, incorporating the CEO’s Review, on pages
4 to 31 sets out a summary of the Group strategic objectives,
business model, key performance measures, operating and financial
reviews, future developments, principal risks, S172 statement and
the corporate responsibility statement.
Greenhouse gas emissions
Details of the Group’s greenhouse gas emissions are included in the
Corporate Responsibility section on page 31.
Research and development activities
The Group invests in systems and website development activities –
see note 11 to the financial statements for the internally generated
amounts capitalised during the year. The Group does not incur any
significant research costs.
Dividends
A final ordinary dividend under the new dividend policy in respect
of the year to 31 December 2019 of 0.5p per share (2018: 1.5p) is
proposed by the Directors, and subject to shareholder approval at
the Annual General Meeting, will be paid on 29 May 2020 to ordinary
shareholders on the register at the close of business on 11 May 2020.
On 25 October 2019, Centaur paid a special dividend of 2.0p
per share as a distribution of the proceeds from the divestments
along with the interim dividend of 1.5p per share. The Directors are
proposing a final ordinary dividend of 0.5p per share in May 2020.
The total ordinary and special dividends paid to shareholders relating
to the year will therefore be 4.0p per share (2018: 3.0p).
Share capital and substantial shareholdings
Details of the share capital of the Company are set out in note
24 to the financial statements. As at 31 December 2019, and 17
March 2020 (being the last practicable date prior to publication),
notifications of interests at or above 3% in the issued voting share
capital of the Company had been received from the following:
Aberforth Partners LLP†
Artemis Investment Management
LLP*
Chelverton Asset Management††
Quaero Capital (Argos Funds)††
Gresham House Asset
Management
Graham Sherren††
Fidelity International††
Aberdeen Standard Investments††
Harwood Capital††
Herald Investment Management††
31 December
2019
24.86%
17 March
2020
24.86%
9.52%
8.10%
7.82%
5.94%
5.73%
4.78%
4.21%
3.46%
3.16%
9.52%
8.10%
7.82%
6.09%
5.73%
5.26%
4.27%
3.46%
3.16%
† This includes Wellcome Trust Limited which is managed by Aberforth Partners LLP
* On 22 August 2019 Artemis announced that its positions in the Company had been
historically over-reported. The correct percentage of voting rights attached to their
shareholding is 9.52% rather than 14.18%
†† Figures derived from share register analysis
At 17 March 2020 and 31 December 2019, 6,964,613 (31
December 2018: 6,964,613) 10p ordinary shares are held in
treasury, representing 4.60% (2018: 4.60%) of the issued share
capital of the Company as at 31 December 2019. As at 31
December 2019, there were 800,000 (2018: 800,000) deferred
shares of 10p each which carry restricted voting rights and carry no
right to receive a dividend payment.
Directors and Directors’ interests
The Directors of the Company during the year and up to the date of
this report are detailed below. All Directors served from 1 January
2019 unless otherwise stated. The Board has decided to continue
observing best practice by offering themselves for re-election annually.
Swagatam Mukerji
Simon Longfield (appointed 6 November 2019)
Colin Jones
William Eccleshare
Robert Boyle
Rebecca Miskin
Carol Hosey (appointed 5 February 2020)
Leslie-Ann Reed (appointed 1 March 2020)
Neil Johnson (resigned 30 June 2019)
Andria Vidler (resigned 30 September 2019)
† Or date of resignation if earlier
Number of ordinary
shares held at
1 January 2019
80,289
–
–
–
117,037
14,800
–
–
–
185,190
Shares acquired
during the year
56,312
34,499
120,000
–
–
–
–
–
100,000
4,348
Number of ordinary
shares held at
31 December 2019†
136,601
34,499
120,000
–
117,037
14,800
–
–
100,000
189,538
Number of ordinary
shares held at
17 March 2020
137,754
34,499
120,000
–
117,037
14,800
–
–
N/A
N/A
The Directors’ interests in long-term incentive plans are disclosed in the Remuneration Committee Report on pages 45 to 61.
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www.centaurmedia.comGOVERNANCE REPORT Compliance with the UK
Corporate Governance Code
The Directors’ Statement on Corporate
Governance in respect of the Group’s
compliance with the provisions of the
UK Corporate Governance Code is set
out on page 37.
Auditor and disclosure of
information to the Auditor
The Directors confirm that, so far as the
Directors are aware, there is no relevant
audit information of which the Company’s
auditors are unaware, and the Directors
have taken all the steps that they ought
to have taken as Directors in order to
make themselves aware of any relevant
audit information and to establish that
the Company’s auditor is aware of that
information.
This confirmation is given and should be
interpreted in accordance with the provisions
of s418 of the Companies Act 2006.
The Directors’ responsibility statement is
included on page 62.
Approved by the Board of Directors and
signed by order of the Board.
HELEN SILVER
Company Secretary
17 March 2020
DIRECTORS’ REPORT
CONTINUED
Qualifying third party indemnity
provisions
By virtue of article 217 of the Articles of
Association of the Company, a qualifying
third-party indemnity provision (within
the meaning given by section 234 of the
Companies Act 2006) is in force at the date
of this report in respect of each Director of
the Company and was in force throughout
the year.
The Company has purchased appropriate
insurance in respect of legal actions against
Directors and officers.
Charitable and political donations
During the year the Group made donations
of £75,125 to The Alzheimers Society its
nominated charity for 2019, which included
third party donations collected at events
(2018: £71,443 donation to Macmillan
Cancer Support and £25,713 to The
Connection at St Martin-in-the-Fields).
No political donations were made during the
year (2018: £nil).
Employment policy
The Group is an equal opportunities
employer and appoints employees without
reference to age, sex, ethnic group or
religious beliefs.
It is the Group’s policy to give full
consideration to suitable applications
for employment by disabled persons.
Opportunities also exist for employees of the
Group who become disabled to continue in
their employment or to be trained for other
positions in the Group.
The Group actively encourages employee
involvement at all levels, both through
monthly employee briefings and by direct
access to managers and the Executive
Committee. In 2019 a workforce advisory
panel known as DICE was set up and more
details can be found in the Strategic Report
on page 11. In addition, the Share Incentive
Plan as described in note 25 encourages
employees’ participation in the Group’s
performance.
All employees are regularly briefed on the
financial and economic factors affecting the
Group’s performance and new initiatives
through monthly town hall meetings and
management cascade communication.
Significant agreements
The Group’s bank facility agreement is a
significant agreement that is terminable
on a change of control of the Company.
In addition, awards under certain of the
long-term incentive plans, details of which
are set out in note 25, will vest or may be
exchanged for awards of a purchaser’s
shares upon a change of control of the
Company.
Conflicts of interest
Following the implementation of legislation
on conflicts of interest, reflected in the
changes to the Company’s Articles of
Association in 2008, procedures are in place
to deal with such conflicts and they have
operated effectively.
Financial instruments
A statement in relation to the financial
risk management and use of financial
instruments by the Group is presented in
note 28 to the financial statements.
Information required under the
listing rules
In accordance with the UK Financial
Conduct Authority’s Listing Rules (LR
9.8.4C), the information to be included in
the Annual Report and financial statements,
where applicable, under LR 9.8.4, is set out
in this Directors’ Report, with the exception
of details of transactions with shareholders
which is set out on page 58.
Going concern
The Directors have carefully considered the
Group’s net current liability position, have
assessed the Company’s ability to continue
trading, and have a reasonable expectation
that the Company has adequate resources
to continue in operational existence for
at least twelve months from the date of
this report and for the foreseeable future.
This includes consideration of downside
scenarios relating to the current immediate
risk from coronavirus. See note 1(a) of the
financial statements for further details and
page 26 for our viability statement.
Subsidiaries
Details of the subsidiaries of the Company
are shown in note 13 to the financial
statements.
36
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 The Senior Independent Director is William
Eccleshare, who is also a member of the
Remuneration and Nomination Committees.
The Company Secretary is Helen Silver.
The Company Secretary assists the Chair
in ensuring there is efficient communication
between all directors, the committees
and senior management, as well as the
professional development of Directors.
Independent advisors including lawyers,
remuneration specialists and external
auditors are available to advise the Non-
Executive Directors at the Company’s
expense. All of the Non-Executive Directors
are independent, and the Chair was
independent on appointment. Committee
meetings are held independently of Board
meetings and invitations to attend are
extended by the Committee Chair to
other Directors, the Group’s advisors and
management as appropriate. The terms
of reference of the Audit Committee,
the Nomination Committee and the
Remuneration Committee, including their
roles and the authority delegated to them by
the Board, are available on request from the
Company Secretary and will be available at
the AGM.
DIRECTORS’ STATEMENT ON
CORPORATE GOVERNANCE
The Board is committed to high standards
of corporate governance and supports the
UK Corporate Governance Code published
in 2018. The Board sets out its report below
on how the Group has applied the principles
of, and complied with, the UK Corporate
Governance Code during the year.
Compliance statement
The Company has applied the provisions
set out in the UK Corporate Governance
Code throughout the year. The Board is
committed to maintaining a structure which
establishes a sound corporate governance
framework on behalf of the Company’s
shareholders. Throughout the year, the
Group has complied with all the provisions
of the UK Corporate Governance Code
except for those set out below.
In contravention of Provision 32 of the
Code, Colin Jones remained as Chair of
the Remuneration Committee when he was
appointed as Chair of the Company on 30
June 2019 to ensure continuity following
Neil Johnson’s resignation and whilst the
recruitment process for new non-executive
directors took place. Carol Hosey was
appointed as Chair of the Remuneration
Committee, in place of Colin Jones, when
she joined the Board on 5 February 2020.
The Board
As at 31 December 2019, the Board had
four Non-Executive Directors and two
Executive Directors (Chief Executive and
Chief Financial Officer). On 5 February 2020,
Carol Hosey was appointed to the Board as
an Independent Non-Executive Director and
as Chair of the Remuneration Committee.
On 1 March 2020, Leslie-Ann Reed was
appointed to the Board as an Independent
Non-Executive Director and will become
Chair of the Audit Committee when Robert
Boyle retires on 31 March 2020. In addition,
Rebecca Miskin will also retire from the
Board on 31 March 2020. Biographies for
each currently serving Director are shown
on pages 32 to 33. The Board endeavours
to maintain diversity in its composition
with respect to gender, skills, knowledge
and length of service in order to ensure
the balanced and effective running of the
Company. Colin Jones is Chair of the Board
and was independent on appointment. He
leads the Board and ensures that both
Executive and Non-Executive Directors
make available sufficient time to carry out
their duties in an appropriate manner, that
all Directors receive sufficient financial and
operational information, and that there is
proper debate at Board meetings.
The Board is responsible for the leadership
of the Company and the Group, and in
discharging that responsibility it makes
decisions objectively and in the best
interests of the Group and its stakeholders.
The section 172 Statement is set out in the
Strategic Report on pages 27 to 28. The
Board sets the vision, culture, values and
standards for the Group. The balance of the
Board, together with the advice sought from
the Executive Committee members and the
Company’s external advisors, ensures that
no one individual has unfettered powers
of decision. The Board delegates day-to-
day responsibility for the running of the
Company to the Chief Executive.
The Chair is responsible for the effective
performance of the Board through a
schedule of matters reserved for approval
by the Board (comprising issues considered
most significant to the Group in terms of
financial impact and risk) and control of the
Board agenda. The Chair conducts Board
and shareholder meetings and ensures
that all Directors are properly briefed. The
Chief Executive, supported by the Chief
Financial Officer and Executive Committee,
is responsible to the Board for running
the business and implementing strategy.
The Board reviews the performance of the
Executive Directors and the Group against
agreed budgets and against the Group’s
objectives, strategy and values.
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www.centaurmedia.comGOVERNANCE REPORT DIRECTORS’ STATEMENT ON
CORPORATE GOVERNANCE
CONTINUED
Board meetings
During the year, the membership of the Board and of each committee was as follows:
Colin Jones 1
Board Role
Chair
Audit Committee
–
William Eccleshare
Senior Independent Director
–
Rebecca Miskin
Robert Boyle 2
Carol Hosey 1
Leslie-Ann Reed 2
Swagatam Mukerji
Simon Longfield
(appointed 6 November 2019)
Former directors
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive
Chief Financial Officer
Andria Vidler
(resigned 30 September 2019)
Chief Executive
Neil Johnson 1
(resigned 30 June 2019)
Chair
Member
Chair
–
Member
–
–
–
–
Remuneration
Committee
Member
Member
Member
Member
Chair
Member
–
–
–
–
Nomination
Committee
Chair
Member
Member
Member
Member
Member
–
–
–
–
1 Carol Hosey was appointed as Chair of the Remuneration Committee and Colin Jones stepped down as Chair of the Remuneration Committee on 5 February 2020.
Colin Jones replaced Neil Johnson as Chair of the Board on 30 June 2019.
2 Leslie-Ann Reed was appointed to the Board on 1 March 2020. She will replace Robert Boyle as Chair of the Audit Committee when he retires on 31 March 2020.
The number of scheduled full Board meetings and committee meetings during the year along with attendance of Directors was as follows:
Board1
7
Audit
Committee
5
Remuneration
Committee1
4
Nomination
Committee1
3
Meetings
attended
Meetings
eligible to
attend
Meetings
attended
Meetings
eligible to
attend
Meetings
attended
Meetings
eligible to
attend
Meetings
attended
Meetings
eligible to
attend
7
6
7
7
7
1
3
5
7
7
7
7
7
1
3
5
3
–
5
5
–
–
–
–
3
–
5
5
–
–
–
–
4
4
4
4
–
–
–
–
4
4
4
4
–
–
–
–
3
2
3
3
–
–
1
–
3
3
3
3
–
–
1
–
Number of scheduled
meetings held:
Colin Jones
William Eccleshare2
Rebecca Miskin
Robert Boyle
Swagatam Mukerji
Simon Longfield (appointed 6
November 2019)
Neil Johnson (resigned 30 June
2019)
Andria Vidler (resigned 30
September 2019)3
Carol Hosey (appointed 5
February 2020)
Leslie-Ann Reed (appointed 1
March 2020)
1
7 additional unscheduled Board meetings were held mainly relating to the divestments. 3 additional Remuneration Committee meetings and 1 additional Nomination Committee
meeting were also held.
2 William Eccleshare was due to dial into two meetings but was unable to do so due to technical issues.
3
Andria Vidler’s married surname is Gibb and she appears as Andria Gibb on some records kept by Companies House
38
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 If a Director is unable to attend a meeting
he or she is provided with the same level
of information as the other Directors in
advance of the meeting and given the
opportunity to express views, which will
then be shared at the meeting.
In addition to the key items identified for
discussion by the Committees above, the
Board discussed the following matters at
the Board meetings during the year:
• Review of financial performance against
budget and prior year;
• Review of Group strategy leading to
the divestment of various parts of the
business;
• Review of dividend policy and
payments;
• Review and approval of budgets;
Management structure
The Board delegates the day-to-day
running of the Company to the Executive
Directors, who in turn share the operational
running of the Group with the Executive
Committee. Throughout the year, the
Executive Committee was the primary body
implementing operational management
across the Group. The role of the Executive
Committee is to review:
• Financial performance, the budget and
forecasts;
• Human capital management and
resource allocation including capital
expenditure;
• Operational efficiency and
developments (including Group IT,
procurement and facilities);
• Review of Group key performance
• Product development;
indicators;
• Approval of divestments;
• Approval of financial reports and
communication to shareholders and
investors; and
• Approval of the Group’s internal control
policy, including a robust assessment
of the principal and emerging risks and
corporate governance environment.
Board assessment and Directors’
performance evaluation
The Board undertakes a formal evaluation
of its own performance and that of its
committees and individual Directors.
Individual evaluation aims to show whether
each Director continues to contribute
effectively and to demonstrate commitment
to the role (including commitment of time
for Board and committee meetings and
other duties). Evaluations are undertaken
annually by self-assessment and the
Chair’s performance is also evaluated by
the other Non-Executive Directors at a
separate meeting for this purpose each
year. In addition, the Chief Executive is
subject to an annual performance review
with the Chair. New Directors receive an
induction programme and all the Directors
are encouraged to undertake continuous
professional development programmes as
appropriate. The Group maintains insurance
cover in respect of legal action against its
Directors.
• Market development;
• Business continuity planning;
•
Internal and external communications;
• Business transformation and change
management; and
• Acquisition and disposal plans.
The biographies of the members of the
Executive Committee are set out on
page 34.
Relations with shareholders
The Company encourages meaningful
dialogue with all stakeholders. Shareholder
communication centres primarily on the
publication of annual reports, periodic
press releases, investor presentations
and trading updates. The Chairman
and Executive Directors are available for
discussions with shareholders throughout
the year and particularly around the time
of results announcements. The Senior
Independent Director is also available
should any shareholder wish to draw any
matters to his attention. The Directors
are available for comment throughout
the year and at all General Meetings of
the Company. Centaur Media values the
views of its shareholders and recognises
their interest in the Company’s strategy
and performance, Board membership and
quality of management. The Group therefore
has an active programme to meet and make
presentations to its current and potential
shareholders to discuss its objectives.
More details on engagement with our
stakeholders are set out in the section
172 Statement in the Strategic Report on
pages 27 to 28. Investors are encouraged
to attend the AGM and to participate
in proceedings formally or sharing their
views with Board members informally
after the meeting. The Chairs of the Audit,
Remuneration and Nomination Committees
are available to answer questions. Separate
resolutions are proposed on each issue so
that they can be given proper consideration
and there is a resolution to approve the
annual report and financial statements.
The Company counts all proxy votes and
indicates the level of proxies lodged on
each resolution, after it has been voted on
by a show of hands. All shareholders can
gain access to the annual reports, trading
updates, announcements, press releases
and other information about the Company
through the Company’s website,
www.centaurmedia.com.
Risk assessment
Risks that affect or may affect the business
are identified and assessed, and appropriate
controls and systems implemented to
ensure that the risk is managed. The
Group’s risk register is kept by the Company
Secretary with the input from the Executive
Committee and Head of Legal and is
reviewed by the Audit Committee regularly
with appropriate mitigation actions also
being reported to and overseen by the
Committee.
Principal and emerging risks
The principal and emerging risks facing the
Group, with associated mitigating controls,
are detailed on pages 22 to 26 within the
Strategic Report.
Ethics
The Group carries out its business in a
fair, honest and open manner, ensuring
that it complies with all relevant laws and
regulations. The Company has specific
policies on fraud, director conflict, bribery,
whistleblowing and slavery and human
trafficking, which are widely distributed and
compliance with these policies is monitored.
The HR team ensures that new job
opportunities are made available to existing
employees as well as to outside applicants
and that all employees are able to benefit
from training, career development and
promotion opportunities where appropriate.
The recruitment of new personnel is made
without prejudice. and the Group believes in
equal opportunity and encourages diversity.
The analysis of the Group’s workforce and
Board by gender is set out in the Corporate
Responsibility Report on page 29.
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www.centaurmedia.comGOVERNANCE REPORT Capital structure
Information on the share capital structure
is included in the Directors’ Report on
page 35.
Approved by the Board of Directors and
signed by order of the Board.
HELEN SILVER
Company Secretary
17 March 2020
DIRECTORS’ STATEMENT ON
CORPORATE GOVERNANCE
CONTINUED
Through all our interactions with our
customers and partners we ensure that we
treat them fairly and openly while abiding
by the terms of contracts and relevant law.
Equally, we treat our suppliers fairly, and
do not exploit them or their employees,
including the objective of paying all suppliers
within the agreed payment terms.
Monitoring of controls
The Board has overall responsibility for the
effectiveness of the Group’s system of risk
management and internal controls, and
these are regularly monitored by the Audit
Committee.
Details of the activities of the Audit
Committee in this financial year can be
found in the Audit Committee Report on
pages 41 to 43.
Greenhouse gas emissions
The disclosure in respect of the greenhouse
gas emissions of the Group that are
attributable to human activity in tonnes of
carbon dioxide is set out in the Corporate
Responsibility Report on page 31.
Fraud
While the Group cannot guarantee to
prevent fraud, an internal control framework
is in place to reduce the likelihood of fraud
arising. The Group’s whistleblowing policy
is available to employees on the Company’s
intranet, should any employee become
aware of any incidence of fraud.
Directors’ conflicts
Group and subsidiary Directors are required
to notify their employing company of all
directorships they hold. Annual conflict
of interest disclosures require them to
disclose such directorships or other
relationships, which they or a person
connected to them may hold. These are
reviewed by the Board to assess the impact
on the Company and whether it would
impair the Group’s objectives.
Bribery Act 2010
In response to the Bribery Act 2010, the
Board performed a risk assessment across
the Group and formalised its policy to
prevent bribery. The Board has in place
processes to prevent corruption or unethical
behaviour. The policy explains what is
considered a bribe or facilitation payment,
which are prohibited, and provides guidance
over the levels of gifts, entertainment and
hospitality that are considered reasonable.
Training is mandatory for all employees.
During 2019, an online training programme
was made available to all employees. The
Group’s policy is communicated to all
appropriate third parties. The more rigorous
processes around declaring Directors’
interests and identifying potential conflicts
have improved the regular monitoring of the
Group’s policy.
Whistleblowing
The Company is committed to the highest
standards of integrity and honesty. Along
with other policies which encourage this
behaviour, the Group’s whistleblowing
policy is available to employees on the
Company’s intranet. This policy allows all
employees to disclose openly, in confidence
or anonymously, any concerns they may
have about possible improper practices,
in financial or other matters. An escalation
process has been communicated to
employees. Any matters raised will be
investigated and resolved. The Audit
Committee will be notified of any issues
raised through this process and appropriate
action taken. However, no incidents were
noted during the year.
Modern Slavery Act 2015
The Company is committed to implementing
and enforcing effective systems and
controls to ensure modern slavery is not
taking place anywhere in its business or in
any of its supply chains. The Company’s
slavery and human trafficking statement
for the purposes of section 54 of the
Modern Slavery Act 2015 is available on the
Company’s website, www.centaurmedia.
com. The Group has in place an anti-slavery
and human trafficking policy which has
been made available to employees on the
Company’s intranet and is notified to all new
joiners. Training has been provided to key
employees and the policy is communicated
to suppliers and other third parties where
appropriate.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 AUDIT COMMITTEE REPORT
Dear Shareholder,
I am pleased to present the report of the
Audit Committee (‘the Committee’) for
the year ended 31 December 2019, my
last as Audit Chair. This report details the
Audit Committee’s responsibilities and
key activities over the period. The role of
the Committee is to protect the interests
of shareholders regarding the integrity
of financial information published by the
Group and to oversee the effectiveness
of the external audit. It does this through
reviewing and reporting to the Board on
the Group’s financial reporting, internal
controls and risk management processes
and the performance, independence
and effectiveness of the external auditor,
PricewaterhouseCoopers LLP (‘PwC’).
Committee composition
During the year, the Committee comprised
Non-Executive Directors, Robert Boyle
(Chair), Rebecca Miskin, and Colin Jones
until he became Chair of the Board on 30
June 2019. Their biographies are shown
on pages 32 to 33. The membership of the
Committee is balanced and is considered
to contain the appropriate combination of
recent, relevant financial experience through
the Chair, as well as competence relevant
to the sector. On 5 February 2020, it was
announced that I will be retiring from the
Board on 31 March 2020 after more than
10 years of service and will be replaced by
Leslie-Ann Reed, who will become the new
Chair of the Committee. I wish her every
success.
The Executive Directors, representatives
of the external auditor and other Group
executives regularly attend meetings at the
invitation of the Committee. The Committee
met five times during the year, with all
members attending. Meetings are held
throughout the year and timed to align with
the overall financial reporting timetable. At
least once during the year, the Committee
meets separately with the external auditor
and with management, and as Chairman I
am in regular direct contact with the external
auditors and with the Chief Financial Officer.
Roles and responsibilities
The main roles and responsibilities of the
Audit Committee are to:
• Monitor the integrity of the financial
statements of the Group and any public
announcements relating to the Group’s
financial performance, reviewing (and
approving) significant financial reporting
judgements contained in them;
• Review and monitor the external
auditor’s independence and objectivity
and the effectiveness of the audit
process, taking into consideration
relevant UK professional and regulatory
requirements;
• Review and assess the Annual Report
in order to determine that it can advise
the Board that, taken as a whole,
the Annual Report is fair, balanced
and understandable, and provides
shareholders with the information they
need to assess the Company’s position
and performance, business model and
strategy as required by provision 27 of
the UK Corporate Governance Code;
• Make recommendations to the Board in
relation to the appointment and terms of
engagement of the external auditor and
to review and approve levels of audit
and non-audit remuneration;
• Develop and implement policy on the
engagement of the external auditor to
supply non-audit services;
• Review the effectiveness of the Group’s
internal financial control and risk
management systems;
• Review the Group’s financial and
operational policies and procedures
to ensure they remain effective and
relevant;
• Oversee the whistleblowing
arrangements of the Group and to
ensure they are operating effectively;
and
• Report to the Board on how it has
discharged its responsibilities.
Financial statements
During the year and up until the date of this
report, the Audit Committee undertook the
following activities to ensure the integrity of
the Group’s financial statements and formal
announcements:
• Regularly met with management and
the Chief Financial Officer to discuss
the results and performance of the
business;
• Received reports from management
on the internal controls covering the
financial reporting process;
• Reviewed and agreed the external
auditor’s strategy in advance of their
audit for the year;
• Reviewed compliance with requirements
under the UK Corporate Governance
Code, and in particular its impact
on the Strategic Report and Viability
Statement;
• Discussed the report received from the
external auditor regarding their audit in
respect of the prior year, which included
comments on significant financial
reporting judgements and their findings
on internal controls;
• Met with other management personnel;
• Reviewed and discussed with
management and the Chief Financial
Officer each financial reporting
announcement made by the Group; and
• Reviewed compliance with International
Financial Reporting Standards (‘IFRS’).
The most significant financial reporting
judgements considered by the Audit
Committee and discussed with the external
auditor during the year were as follows:
Carrying value of goodwill,
intangible assets and investments
The Audit Committee has reviewed
management’s assessment of the
recoverability of the Group’s goodwill
and intangible assets and whether there
is a need for any resulting impairment.
The recoverable amount of goodwill has
been determined through value-in-use
calculations of each cash-generating unit
(‘CGU’) based on Board approved forecasts
for the first three years of the value-in-use
calculation and applying a terminal growth
rate of 2.5%.
Management’s assessment of the
recoverability of the Group’s goodwill and
intangible assets resulted in no impairment
being recognised. At 31 December 2019
the Committee reviewed management’s
assessment of the recoverability of the
Group’s goodwill and intangible assets. The
Committee has paid particular attention
to the judgements and assumptions used
to forecast cash flows, particularly around
revenue and adjusted EBITDA growth
rates. The Committee was satisfied that
the forecasts reflect the CGUs’ historical
budgeting performance and that reasonable
sensitivities were performed, that the value-
in-use calculation reflects management’s
best estimate, and that the booking of
no impairment against any segment
is appropriate. As a result, the Audit
Committee was satisfied with the carrying
value of goodwill and intangible assets in
the Group balance sheet.
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www.centaurmedia.comGOVERNANCE REPORT AUDIT COMMITTEE REPORT
CONTINUED
Following the disposal of Centaur Travel and
Meetings Ltd, Centaur Human Resources
Ltd, Centaur Engineering Ltd and Centaur
Financial Platforms Ltd in 2019, a detailed
review of the carrying value of Centaur
Media plc’s investments in its subsidiaries
was performed. This identified a reduction
in carrying value of £35.7m in the parent
company books.
Further details on goodwill and the
impairment testing are included in note 10
to the financial statements.
Going concern and viability
The Audit Committee received a report
setting out the going concern review
undertaken by management which forms
the basis of the Board’s going concern
conclusion. During the year, the Group
completed a major divestment programme
which reduces the short-term earnings
generated by operations. The Group
has consequently reported an adjusted
operating loss for 2019. The Committee has
therefore carefully considered the capability
of the Group to generate positive operating
cash which is dependent on the Group
making targeted cost savings in 2019 and
2020, combined with profitable revenue
growth.
Following the divestment programme, the
Group has a strong balance sheet with over
£9m cash at the balance sheet date and
a small net current liability. The Committee
has reviewed forecasts to cover the twelve
months from signature date with various
downside scenarios explored, including
scenarios specifically related to the current
coronavirus. The Committee has concluded
that the adoption of the going concern basis
is appropriate.
In addition, the Committee has assessed
the statement in relation to the longer-term
viability of the Group and of the Group’s
principal risks to viability, including reviewing
the long-term financial projections for the
period over which the statement is made,
and reviewing qualitative and quantitative
analysis and scenario testing prepared by
management. The Committee concluded
that the statement in relation to the longer-
term viability of the Group in the Strategic
Report is appropriate.
Adjusting items
The Audit Committee has challenged
management strongly over recent financial
reporting periods with regard to the
presentation of exceptional items and
other alternative performance measures.
Adjusting items disclosed in the year include
significant exceptional costs arising in
relation to restructuring activities and the
divestment programme. The Committee
notes that the restructuring activities (both
staff-related and corporate) arise from
specific change programmes during the
year, and that they are material and could
therefore distort the user’s view of the
Group’s results. The Committee is satisfied
that it is appropriate to present these
items as adjusting items on the basis that
they assist the user in assessing the core
operating performance of the Group.
The Committee assesses the
appropriateness of all alternative
performance measures disclosed as
adjusting and the impact these have on the
presentation of the Group’s results and is
satisfied that they do not inappropriately
replace or obscure IFRS measures.
Further details on adjusting items are
included in notes 1(b) and 4 to the financial
statements.
Completion of Divestment
Programme
In October 2018, the Group announced
that it would be exploring the sale of certain
businesses. In 2019, the Group completed
the sales of our financial, engineering,
human resources and travel and meetings
business units. The Committee is satisfied
that the accounting for the disposals,
the classification as these business as
discontinued under IFRS 5, and the
treatment of the applicable transitional
services arrangements are fair and
appropriate. The Group also disposed of
Venture Business Research Limited. This
business has been defined as outside of the
scope of IFRS 5 as it does not represent
a significant separate line of business
or geographical area of operations. The
Committee is satisfied that this treatment is
fair and appropriate.
Other areas of judgement discussed with
the external auditor were as follows:
New accounting standards
IFRS 16 has been adopted for the current
reporting period. An impact assessment
was performed in 2018 which indicated
that the operating lease arrangements, for
properties from which the Group operated,
be treated as finance leases from the
effective date. Therefore, a right-of-use
asset of £2.3m and a related lease liability
of £3.3m were recognised and recorded
at 1 January 2019.
For further details of IFRS 16, please see
note 1 and 20 to the financial statements.
Risk management
The Group’s management is responsible
for the identification, assessment and
management of risk, as well as for designing
and operating the system of internal control
as set out in the Strategic Report on pages
4 to 31. The Committee has assessed
management’s identification of risk and
concluded that appropriate mitigating
actions are being taken. The auditor has
also detailed certain risks in their report
and set out the work performed to satisfy
themselves that these have been properly
reflected in the financial statements.
The Committee has worked closely
with management and received detailed
information to assess the effectiveness
of internal financial control and risk
assessment and management systems, and
report on them to the Board (which retains
ultimate responsibility). Details of financial
risks are set out in note 28.
Having monitored the Group’s risk
management and internal control system,
and having reviewed the effectiveness
of material controls, including financial,
operational and compliance controls, the
Committee confirms on behalf of the Board
that it has not identified any significant
control failings or weaknesses at any time
during the year and to the date of this
report.
Risk of fraud
The Committee considered the risk of
fraudulent financial reporting in the business,
and through its review of the effectiveness
of internal controls and reporting from
management, has concluded that adequate
controls were in place during the year.
Whistleblowing
The Committee reviewed the Group’s
whistleblowing policy and is satisfied that
this has met FCA rules and good standards
of corporate governance. Further details of
the whistleblowing policy are set out within
the Directors’ Statement on Corporate
Governance on page 40.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 concurred. Should non-audit services
be required in the forthcoming year, we
are likely to use suppliers other than
PricewaterhouseCoopers LLP.
Self-assessment
During the period the Audit Committee
performed a formal, questionnaire based,
self-assessment of the effectiveness of the
Audit Committee with satisfactory results.
Report to the Board
The Board has requested the Committee
to confirm that in its opinion the Board
can make the required statement that the
Annual Report taken as a whole is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the Company’s position and
performance, business model and strategy.
The Committee has given this confirmation
on the basis of its review of the whole
Annual Report, underpinned by involvement
in the planning for its preparation, review
of the processes to ensure the accuracy of
factual content and by assurances from the
Remuneration Committee.
Independent auditor
A resolution is to be proposed at the Annual
General Meeting for the re-appointment of
PricewaterhouseCoopers LLP as auditor of
the Company.
ROBERT BOYLE
Chair of the Audit Committee
17 March 2020
Internal audit
The Committee considered whether it was
appropriate to appoint internal auditors
and concluded that this is not currently
required given the size of the business, its
relatively centralised operations and the
risks identified together with the mitigating
controls.
External audit
The Group’s external auditor is
PricewaterhouseCoopers LLP. The
Committee monitors the external audit
process to ensure high standards of quality
and effectiveness. This was assessed
throughout the year using a number of
measures, including:
• Reviewing the quality and scope of
planning of the audit and the level of
fees;
• Monitoring the independence and
transparency of the audit; and
• Obtaining feedback from management
and the Directors on the quality
of the audit team, their business
understanding and audit approach, and
approving reappointment.
PwC have been the Company’s external
auditor since its incorporation in 2004.
The appointment was subject to competitive
tender in 2016.
The Audit Committee has considered the
independence and objectivity of the external
auditor through a careful review of their
terms of engagement, scope of work and
level of fees (which are shown in note 3
to the financial statements). This included
reviewing the nature and extent of non-audit
services supplied by the external auditor to
Centaur, seeking to balance objectivity and
value for money.
The external auditor is excluded from
providing any non-audit services that
individually, or in aggregate, may impair the
independence of the auditor. Prior approval
from the Audit Committee is required for any
permitted audit related or other services in
accordance with the regulations.
During the year, PricewaterhouseCoopers
LLP provided no services to the Group other
than audit and audit-related (interim review)
services.
The external auditor’s report to the Directors
and the Audit Committee also confirmed
their independence in accordance with
auditing standards and the Committee
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www.centaurmedia.comGOVERNANCE REPORT NOMINATION COMMITTEE REPORT
Dear Shareholder,
I am pleased to present the report of the
Nomination Committee for the year ended
31 December 2019. This report details
the Committee’s ongoing responsibilities
and key activities over the period. The
Committee comprised of myself, William
Eccleshare, Robert Boyle and Rebecca
Miskin, ensuring that there is a majority of
independent Non-Executive Directors on the
Committee.
Nomination Committee
Responsibilities
The Committee’s key responsibilities
include:
• Reviewing the Board’s structure, size
and composition;
• Reviewing the composition of Board
Committees;
• Defining the role and competencies
required for appointments to the Board;
•
Identifying, nominating and reviewing
candidates for appointment to the
Board;
• Putting in place plans for succession
for the Chairman and other members of
the Board, the Chief Executive and the
Chief Financial Officer; and
• Reviewing the leadership needs of the
organisation, including Executive and
Non-Executive Directors as well as
senior management.
The appointment of Directors is a
matter for the Board, which considers
recommendations of the Nomination
Committee. The Committee is responsible
for ensuring that the Board and the Board
Committees are properly constituted and
balanced in terms of skills, experience and
diversity. Our policy on Board diversity is set
out in the Directors’ Report above and for
the majority of the year we had two female
Board members, representing one-third
of the Board. Following the year end, we
appointed Carol Hosey and Leslie-Ann
Reed as Non-Executive Directors to replace
Robert Boyle and Rebecca Miskin who
retire on 31 March 2020. Female Board
members represent one-third of the Board
from 1 April 2020. Details of diversity/gender
in the Company are set out in the Corporate
Responsibility Statement on page 29.
Activities during the year
During 2019, the primary focus of the
Committee was the changes to the
Executive management team and the
appointment of two new independent Non-
Executive Directors in preparation for the
retirements from the Board of Robert Boyle
and Rebecca Miskin. For all appointments
the Committee followed a rigorous process
that was approved by the Board.
It was agreed with Andria Vidler that she
would step down as CEO in September
2019. Following a review of potential internal
and external candidates, the Committee
recommended to the Board that Swagatam
Mukerji be appointed as CEO with effect
from 4 September 2019 as he had played
an important role in Centaur’s transformation
and had a comprehensive understanding of
the Group which would be of great benefit
in ensuring continuity and delivering value to
shareholders.
Swag retained overall responsibility for
the finance function while the Committee
searched for a new CFO. The search
was undertaken by Equity FD, and a
number of suitably qualified candidates
were considered. Following interviews
with members of the Board and Executive
Committee, the preferred candidate was
Simon Longfield who was recommended
to the Board and joined the Company on 6
November 2019. Simon’s biography can be
found on page 32.
It was a key component of our specification
that new non-executive members of the
Board bring a similar level of expertise and
experience to replace Robert and Rebecca.
Due to its wide network of contacts, the
Committee was able to identify several
potential candidates without the use of
an external search consultancy or open
advertising. Following a short list and
interview exercise, the appointments
of Carol Hosey and Leslie-Ann Reed
were recommended to the Board by
the Committee. A reputed independent
executive search consultant, Inzito,
undertook the referencing process.
Carol was confirmed as a Non-Executive
Director, Chair of the Remuneration
Committee and member of the Nomination
Committee with effect from 5 February
2020. Carol is currently Group HR Director
at Mace, the international consultancy and
construction group. She has extensive
remuneration experience at executive and
board level and has spent over 20 years in
senior HR roles, including positions at Mitie
Group plc, Nationwide Building Society and
Lloyds Banking Group.Carol’s experience
also means she is well placed to become
the sponsor of the workforce advisory
panel, DICE.
Leslie-Ann Reed was confirmed as a
Non-Executive director and a member of
the Audit, Remuneration and Nomination
Committees with effect from 1 March
2020. She will become Chair of the Audit
Committee when Robert Boyle retires on
31 March 2020.
Leslie-Ann is an experienced non-executive
director and chairs the audit committees
at Learning Technologies Group plc and
Induction Healthcare Group PLC. She is
also a non-executive director and member
of the audit and remuneration committees
of Bloomsbury Publishing Plc. Leslie-Ann’s
executive roles have included CFO of the
B2B publisher Metal Bulletin plc and the
online auctioneer Go Industry plc.
Following the disposals, the Committee has
determined that a priority for 2020 will be
to review enhanced succession planning to
support and develop a diverse pipeline of
talent across the Group.
COLIN JONES
Chair of the Nomination Committee
17 March 2020
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 REMUNERATION COMMITTEE REPORT
Dear Shareholder,
On behalf of the Board, I am pleased to
present the Directors’ Remuneration Report
for the year ended 31 December 2019.
This is my first report as Chair of Centaur’s
Remuneration Committee since my
appointment on 5 February 2020.
This report is in three parts: (i) this
Annual Statement; (ii) the Directors’
Remuneration Policy section, which sets
out the Remuneration Policy approved
by shareholders at the AGM held on 17
May 2019; and (iii) the Annual Report on
Remuneration.
2019 has been a year of transformation for
Centaur with the strategic objectives set
at the start of the year largely achieved:
the divestment of legacy businesses, the
restructuring of the central functions, and
the creation of a much simpler business
focused on two sectors: the marketing and
legal professions. Remuneration for 2020
will be aligned with the new MAP22 strategy
introduced towards the end of 2019.
A NEW CENTAUR –
A CLEAR STRATEGY
Committee membership and work
of the Committee during the year
During the year, Centaur‘s Remuneration
Committee comprised: Colin Jones (Chair
until 5 February 2020 when Carol Hosey
joined the Board and became Chair of the
Committee), Rebecca Miskin, Robert Boyle
and William Eccleshare.
The Committee had four scheduled
meetings during 2019 and met a further
three times. The main Committee activities
during the year (full details of which are set
out in the relevant sections of this report)
included:
• Agreeing executive director base salary
levels from 1 April 2019;
• Agreeing the performance against the
targets for the 2018 annual bonus;
• Agreeing the performance against the
targets for the 2016 LTIP awards which
lapsed in 2019;
• Obtaining shareholder approval for the
new Directors’ Remuneration Policy and
2019 Incentive Plan (‘2019 IP’)
• Setting the performance targets for the
2019 IP;
• Agreeing the basis for vesting the 2017
LTIP awards;
• Agreeing the award levels and
performance tests for the 2019 LTIP
awards;
• Agreeing the performance against the
targets for the 2019 IP;
• Reviewing the Company’s share dilution
capacity for LTIP awards;
• Reviewing and setting remuneration for
the Directors and senior management;
• Reviewing workforce remuneration and
alignment of workforce incentives and
rewards;
• Reviewing gender pay numbers and
disclosures and the CEO Pay Ratio
requirements; and
• Agreeing the cessation agreement and
termination payments for Andria Vidler.
In addition, the Committee has considered
how the Policy and practices are consistent
with the six factors set out in Provision 40 of
the new UK Corporate Governance Code:
• Clarity
Our Policy (approved by shareholders
in 2019) is understood by our senior
executive team and has been clearly
articulated to our shareholders and
representative bodies (both on an
ongoing basis and when changes are
proposed).
• Simplicity
The Committee is mindful of the
need to avoid overly complex
remuneration structures which can be
misunderstood and deliver unintended
outcomes. Therefore, a key objective
of the Committee is to ensure that
our executive remuneration policies
and practices are straightforward to
communicate and operate.
• Risk
Our Policy has been designed to
ensure that inappropriate risk-taking is
discouraged and will not be rewarded
via: (i) the balanced use of annual and
long-term pay with a blend of financial,
non-financial and shareholder return
targets; (ii) the significant role played
by equity in our incentive plans; and (iii)
malus/clawback provisions.
• Predictability
Our incentive plans are subject to
individual caps, and our share plans
are subject to market standard dilution
limits.
• Proportionality
There is a clear link between individual
awards, delivery of strategy and
long-term performance. In addition,
the significant role played by
incentive/‘at-risk’ pay, together with
the structure of the executive directors’
service contracts, ensures that poor
performance is not rewarded.
• Alignment to culture
Our executive pay policies are fully
aligned to our culture through the use of
metrics in our incentive plans.
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www.centaurmedia.comGOVERNANCE REPORT
Centaur Media Plc
REMUNERATION COMMITTEE REPORT
CONTINUED
Implementing the Remuneration
Policy for 2020
• The base salaries for the Executive
Directors are expected to increase
from 1 April 2020 by 2% in line with the
expected general workforce increases.
There will be no changes to pension
and benefit provisions;
• The maximum annual bonus for
Executive Directors will revert to 100%
of salary. The majority of bonus potential
will be measured against financial-
based targets with a minority based on
strategic objectives. Any annual bonus
greater than 75% of basic salary will be
awarded in Centaur Media Plc shares
and deferred for three years; and
• LTIP awards are expected to be granted
on a basis consistent with awards
granted in prior years in terms of grant
levels (100% of salary). Performance
targets are expected to be based one-
third on EBITDA performance, one-third
on EPS and one-third on relative TSR.
Shareholder consultation and
AGM approvals
Major shareholders were consulted in
respect of the proposed 2019 Directors’
Remuneration Policy and 2019 IP and
strong support for the proposals was
received. At the 2020 AGM there will be an
advisory resolution on the Annual Statement
and Annual Report on Remuneration for the
year ended 31 December 2019. I hope we
continue to receive your support.
CAROL HOSEY
Chair of the Remuneration Committee
17 March 2020
Implementation of the
Remuneration Policy in 2019
The Committee implemented the
Remuneration Policy in 2019 as follows:
• Base salary levels were increased by
2% from 1 April 2019 in line with general
workforce increase;
• Swagatam Mukerji’s base salary was set
at £320,000 following his promotion to
CEO on 4 September 2019 (previous
CEO salary £380,744). Simon Longfield
joined as CFO on a salary of £175,000
on 6 November 2019 (previous CFO
salary £260,100);
• There were no changes to pension or
benefit provisions, other than aligning
Simon Longfield’s pension with the
workforce from appointment;
• The Committee operated the 2019
IP during the year (as approved by
shareholders at the 2019 AGM). The
performance targets under the 2019 IP
were based on maximising shareholder
value from (i) divestments of non-core
assets, (ii) restructuring the central
functions and reducing overhead costs,
and (iii) achieving profit targets for the
new Xeim business. After reviewing
performance against these targets, the
Committee approved awards equating
to 63% of the maximum for Andria Vidler
and 70% of the maximum for Swagatam
Mukerji;
• The Committee agreed to the 2017 LTIP
vesting six months early on the basis
that the Group had been significantly
restructured by the half year, and the
original performance tests were no longer
easily measurable. The Committee did
not adjust the EPS targets following the
disposals and awards subject to the EPS
test (50% of total) lapsed in full. The TSR
test was satisfied in full and awards under
this test (50% of total) vested; and
• No 2019 LTIP grant was made to Andria
Vidler or Swagatam Mukerji in their roles
as CEO and CFO respectively. Following
his appointment as CEO, and as part
of a revised remuneration package for
this role including a lower salary than the
previous CEO, LTIP awards were granted
to Swagatam Mukerji on 3 October 2019
over shares equal to 100% of salary with
perfomance tests based on profitable
revenue growth, Group EBITDA margin
growth and relative TSR (each weighted
one third).
Further details are given on pages 55 to 58.
46
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Annual Report and Financial Statements for the year ended 31 December 2019 DIRECTORS’ REMUNERATION POLICY
The following section of the Directors’
Remuneration Report sets out a summary
of the Directors’ Remuneration Policy
approved by shareholders at the AGM
held on 17 May 2019. There have been no
changes to the policy since that date. The
full Directors’ Remuneration Policy is set out
below for ease of reference.
Policy scope
The Policy applies to the Chairman,
Executive Directors and Non-Executive
Directors.
Policy duration
The current Remuneration Policy was
passed by a binding shareholder vote at
the Company’s AGM held on 17 May 2019
and became effective from the date of that
meeting. The policy takes into account
the provisions of the new UK Corporate
Governance Code which is effective from
1 January 2019, and other good practice
guidelines from institutional shareholders
and shareholder bodies. All payments to
Directors during the policy period will be
consistent with the approved policy.
Overview of Remuneration Policy
Centaur recognises the need to attract,
retain and incentivise executives with the
appropriate skills and talent to manage and
develop the Group’s businesses, drive the
Group’s strategy and deliver shareholder
value. The main principles of the Directors’
Remuneration Policy are:
• To achieve total remuneration packages
that are competitive in the sector within
which the Group operates and with the
market in general;
• To provide an appropriate balance
between fixed and variable remuneration
which rewards high levels of performance;
and
• To incentivise and retain management
and to align their interests with those of
shareholders.
Considerations of employment
conditions elsewhere in the
Group
The Committee considers the base salary
increases and remuneration policies and
practice more generally for all employees
when determining the annual salary
increases and remuneration policy for the
Executive Directors. Employees have not
been consulted in respect of the renewal of
the Directors’ Remuneration Policy, although
the Committee will keep this approach
under review.
Consideration of shareholder
views
The Committee considers shareholder
feedback received in relation to the
Annual Report and AGM each year. This
feedback, plus any additional feedback
received during the course of the year, is
then considered as part of the Company’s
annual review of its remuneration policy.
In addition, the Committee will seek to
engage directly with major shareholders
and their representative bodies should any
material changes be made to the Directors’
Remuneration Policy. Details of votes for
and against the resolution to approve last
year’s Remuneration Report and the 2019
Remuneration Policy are set out in the
Annual Report on Remuneration.
Directors’ Remuneration Policy –
summary table
The table below sets out the Remuneration
Policy approved by shareholders at the
AGM held on 17 May 2019.
Note that payments may be made under
arrangements in place prior to this policy
becoming effective (including pension, other
benefits and incentives).
The remuneration offered to employees of
the Group will be adapted to reflect local
market practice and seniority.
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www.centaurmedia.comGOVERNANCE REPORT PERFORMANCE
TARGETS AND RECOVERY
PROVISIONS
Not applicable
DIRECTORS’ REMUNERATION POLICY
CONTINUED
ELEMENT
Base salary
PURPOSE AND LINK
TO STRATEGY
OPERATION
MAXIMUM
• Reflects the value
• Reviewed annually,
of the individual and
their role
normally effective
1 April
• Reflects skills and
experience over
time
• Provides an
appropriate level of
basic fixed income
avoiding excessive
risk arising from
over reliance on
variable income
• Paid in cash on a
monthly basis
• Pensionable
• Benchmarked
against companies
with similar
characteristics and
sector comparators
• The Committee has not
set a maximum level
of salary. Increases will
be set in the context
of salary increases
amongst the wider
work force
• The Committee retains
the discretion to make
increases above
this level in certain
circumstances, for
example, but not limited
to:
» An increase in the
individual’s scope
and responsibilities
» Alignment to the
external market
» An increase to
reflect an individual’s
performance and
development in the
role, e.g. where a
new appointment is
recruited at a lower
salary level and is
awarded stepped
increases
2019
Incentive
Plan (“2019
IP”) for
2019 only
•
Incentivises delivery
of 2019 strategic
goals
• Maximum award
only payable
for achieving
demanding targets
• Not pensionable
• 200% of salary
• Measured over 2019
• Deferral of any
award in excess of
75% of maximum
into shares for two
years
• Dividend equivalents
may be payable
on deferred share
awards
• Based on maximising
shareholder value from
divestments of non-core
assets, achieving stretch
profit and operating
margin targets for the
ongoing Xeim business
and reducing central
overhead costs by the
end of 2019
• Clawback provisions
apply
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 ELEMENT
Annual
bonus
(2020
onwards)
PURPOSE AND LINK
TO STRATEGY
•
Incentivises annual
delivery of financial
and strategic goals
• Maximum bonus
only payable
for achieving
demanding targets
OPERATION
MAXIMUM
• Targets reviewed
• 100% of salary
annually
• Not pensionable
• Deferral of any
bonus over 75%
of base salary into
shares for three
years
• Dividend equivalents
may be payable
on deferred share
awards
Long term
incentives
• Aligns to main
• Annual grant of
• Awards capped
strategic objectives
of delivering
profit growth and
shareholder return
conditional awards
or nil cost options
• Dividend equivalents
may be payable on
shares to the extent
awards vest
at 100% of salary
(200% in exceptional
circumstances)
PERFORMANCE
TARGETS AND RECOVERY
PROVISIONS
• Normally measured over
a one-year performance
period
• Primarily based on
Group’s annual financial
performance (majority, if
not all)
• Personal and/or strategic
objectives (minority)
• Measures for the following
years will be set out in
the Annual Report on
Remuneration of the
relevant year
• Clawback provisions
apply
• Normally a three-year
performance period
• Performance is based
on financial and/or share
price-based measures
(e.g. EPS and relative
TSR)
• The Committee may alter
the weighting and targets
for each grant annually
if it determines that it is
appropriate to do so
• Targets for the following
years will be set out in
the Annual Report on
Remuneration
• Awards vest as follows:
» Threshold performance:
25% of award
» Maximum performance:
100% of award
• Clawback provisions
apply
Pension
• Provides
• Defined
• Up to 15% of base
• Not applicable
competitive
retirement benefits
• Provides an
opportunity for
Executive Directors
to contribute to their
own retirement plan
contributions made
to the Executive
Director’s own
pension plan. Cash
alternatives may also
be paid
salary, although pension
provision in respect
of future Executive
Director appointments
will be aligned to the
workforce where
possible
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www.centaurmedia.comGOVERNANCE REPORT DIRECTORS’ REMUNERATION POLICY
CONTINUED
ELEMENT
Other
benefits
PURPOSE AND LINK
TO STRATEGY
• Aids retention and
recruitment
PERFORMANCE
TARGETS AND RECOVERY
PROVISIONS
Not applicable
OPERATION
MAXIMUM
• There is no maximum.
Set at a level which the
Committee considers
is appropriate in
the context of the
circumstances of the
role/individual and
local market practice
• Executive Directors
are provided with
private medical
insurance
• Other benefits
including company
car allowance
and car parking
may be provided
if considered
appropriate by the
Committee
Share
ownership
• To provide
alignment of
interests between
Executive Directors
and shareholders
• 50% of the net of
tax vested LTIP
shares required to
be retained until the
guideline is met
• 200% of salary
Not applicable
NOTES
1
The Annual Report on Remuneration sets out how the Company implemented the policy presented above in 2019 and will apply it in 2020.
2 Not all employees have a bonus opportunity, and below Executive Director level bonus opportunities are lower. Participation in the 2019 IP was limited to Executive Directors and
participation in the LTIP was limited to Executive Directors and certain selected senior management. Other employees are eligible to participate in the Company’s all employee share
plan. In general, these differences arise to ensure remuneration arrangements are competitive in the market, together with the fact that remuneration of the Executive Directors and
senior executives typically has a greater emphasis on performance related pay. All bonus schemes are discretionary.
3 The choice of performance metrics applicable to the 2019 IP reflected Centaur’s strategy to simplify the business and maximise shareholder value during 2019 while ensuring that there
was an appropriate focus on the remaining business.
4 The choice of performance metrics applicable to the annual bonus plan reflect the Committee’s belief that any incentive compensation should be appropriately challenging and primarily
tied to financial measures.
5 The EBITDA, EPS and TSR performance conditions applicable to the 2020 LTIP awards were selected by the Committee on the basis that they are consistent with rewarding the
delivery of long-term returns to shareholders and the Group’s financial growth.
6 Executive Directors may participate in any all-employee share plan, in line with HMRC limits, and to the extent offered.
50
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 discretion to determine that awards vest at cessation of employment
or to dis-apply time pro-rating.
In addition to the above, outplacement support may be provided
and legal fees or any other minor incidental costs which are
considered appropriate may be payable.
Approach to recruitment and promotions
The remuneration package for a new Executive Director would
be set in accordance with the terms of the Company’s prevailing
approved remuneration policy at the time of appointment and would
take into account the skills and experience of the individual, the
market rate for a candidate of that experience and the importance
of securing the relevant individual.
On recruitment, salary may (but need not necessarily) be set below
the normal market rate, with phased increases as the executive
gains experience. Pension provision will be aligned to that provided
to the general workforce where possible. Incentive awards would
be no more than set out in the Policy table above. In addition, on
recruitment the Company may compensate for amounts foregone
from a previous employer (using Listing Rule 9.4.2 if necessary)
taking into account the quantum foregone and, as far as reasonably
practicable, the extent to which performance conditions apply, the
form of award and the time left to vesting.
For an internal promotion, any variable pay element awarded in
respect of the prior role would be allowed to pay out according
to its terms. Any other ongoing remuneration obligations existing
prior to appointment may continue, provided that they are put to
shareholders for approval at the earliest opportunity.
The Committee may agree that the Company will meet relocation,
legal fees or incidental costs where appropriate.
Service contracts and loss of office payments
The current Executive Directors have service contracts which have
a 12-month notice period, dated 21 September 2016 for Swagatam
Mukerji and 6 November 2019 for Simon Longfield. In respect of
these service contracts, at the Board’s discretion, a payment in
lieu of any unexpired notice may be paid, comprising an amount
for base salary, pension and any accrued holiday entitlement. The
amount may be paid in one lump sum or in two instalments and
mitigation will be applied to the second instalment. If termination
is within six months of a change of control, a payment equal to
12 months’ salary, pension and accrued holiday pay is payable.
Where the Company terminates the contract in any other manner,
any damages shall be calculated in accordance with common
law principles including those relating to mitigation of loss.
Notwithstanding the above, the Company is entitled to terminate
employment without compensation, damages or payment in lieu of
notice in specified circumstances (e.g. serious misconduct).
An annual incentive will normally be payable for the period of the
financial year served, although it will normally be pro-rated and paid
at the normal pay-out date. Any share-based entitlements granted
to an Executive Director under the Company’s share plans will be
determined based on the relevant plan rules. However, in certain
prescribed circumstances, such as death, disability, retirement or
other circumstances at the discretion of the Committee, ‘good
leaver’ status may be applied. For good leavers, awards will
normally vest at the vesting date set out in the relevant award,
subject to the satisfaction of the relevant performance conditions
at the time and reduced pro-rata to reflect the proportion of the
performance period actually served. However, the Committee has
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51
www.centaurmedia.comGOVERNANCE REPORT DIRECTORS’ REMUNERATION POLICY
CONTINUED
Remuneration Policy for the Chairman and Non-Executive Directors
The Company Chairman’s fee is determined by the Remuneration Committee (other than the Company Chairman, if he sits on the
Committee). The fees for the Non-Executive Directors are set by the Board, excluding the Non-Executive Directors. The table summarises
the key aspects of the Remuneration Policy for the Chairman and Non-Executive Directors:
ELEMENT
Chairman
and Non-
Executive
Directors
fees
PURPOSE AND LINK
TO STRATEGY
• Reflect time
commitments and
responsibilities of
each role, in line
with those provided
by similarly sized
companies
OPERATION
MAXIMUM
PERFORMANCE
TARGETS AND RECOVERY
PROVISIONS
• Cash fee normally
paid on a monthly
basis
• Reimbursement of
incidental expenses
where appropriate
• Reviewed
periodically
• An additional
amount will be
paid for Chairing a
Committee
• There is no prescribed
Not applicable
maximum annual fee or
fee increase
• The Committee and
Board are guided by
the general increase
in the Non-Executive
market, but may decide
to award a lower or
higher fee increase to
recognise, for example,
an increase in the scale,
scope or responsibility
of the role or take
account of relevant
market movements
Letters of appointment
The Chairman and Non-Executive Directors have letters of appointment with the Company, which are for an initial three-year period with
the option for an extension for a further three-year period and provide for a notice period of three months. All of the current Non-Executive
Directors have chosen to submit to annual re-election at each AGM.
Colin Jones
William Eccleshare
Robert Boyle
Rebecca Miskin
Carol Hosey
Leslie-Ann Reed
First appointed as
a director
1 September 2018
Current letter of
appointment
commencement date
1 September 2018
Current letter of
appointment
expiry date
1 September 2021
1 July 2016
1 July 2019
1 July 2022
8 January 2010
8 January 2019
19 March 2020
13 January 2011
14 January 2017
14 January 2020
5 February 2020
5 February 2020
5 February 2023
1 March 2020
1 March 2020
1 March 2023
Robert Boyle and Rebecca Miskin agreed to remain on the Board until their retirement on 31 March 2020 in order to provide a handover
following the appointments of Carol Hosey and Leslie-Ann Reed.
Approach to fees on recruitment
For the appointment of a new Chairman or Non-Executive Director, the fee will be set in accordance with the approved remuneration policy
in force at that time.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 ANNUAL REPORT ON REMUNERATION
A summary of how the Directors’ Remuneration Policy will be applied during the year ending 31 December 2020 is set out below.
Base salary
The Executive Directors’ current and proposed salaries are as follows:
Swagatam Mukerji 1
Simon Longfield 2
From
1 April 2020
£
£326,400
From
31 December
2019
£
£320,000
£178,500
£175,000
From
1 January
2019
£
£260,100
N/A
%
change
2%
2%
1 Swagatam Mukerji became CEO on 4 September 2019. At this time the Remuneration Committee determined that his salary should be increased to £320,000pa with effect from 4
September 2019 in line with his new responsibilities.
2 Simon Longfield was appointed Chief Financial Officer on 6 November 2019 and his salary on employment was £175,000pa.
3 The Executive Directors are expected to receive a 2% salary increase from 1 April 2020 in line with the expected general workforce increase.
Pension and benefits
Pension and benefits provision will be in line with the policy. Swagatam Mukerji receives a pension allowance equivalent to 9% of annual
salary. Simon Longfield receives a pension allowance equivalent to 5% of annual salary, in line with the pension arrangements for the
workforce.
Annual bonus for 2020
The maximum bonus for Executive Directors will be 100% of salary. The majority of bonus potential will be measured against financial-based
targets with a minority based on strategic objectives. Any annual bonus greater than 75% of basic salary will be awarded in Centaur Media
Plc shares and deferred for three years.
Long term incentives for 2020
LTIP awards will be granted to Executive Directors in 2020 under the 2016 LTIP as follows:
• One-third of the 2020 award will be based on adjusted EBITDA. EBITDA thresholds and targets will be set for the year ending 31
December 2022 in line with the Company’s long-term business plan.
• One-third of the 2020 award will be based on absolute EPS targets. The EPS target range for these awards will be set in line with the
Company’s long-term business plan.
• One-third of the 2020 award will be based on relative TSR measured against the constituents of the FTSE SmallCap (excluding
investment trusts). 25% of this part of the award will vest for median TSR increasing pro-rata to 100% vesting for upper quartile TSR
over the three years ending 31 December 2022. In addition to the TSR performance condition, the Committee will need to be satisfied
that the Company’s TSR performance reflects the underlying financial performance of the Company for this part of an award to vest.
The performance targets for the above awards will be disclosed in the Directors’ Remuneration Report to the 2020 Annual Report subject to
any commercial senstivity.
Fees for the Chairman and Non-Executive Directors
The fees for the Company Chairman and the Non-Executive Directors from 1 April 2020 are as follows:
Colin Jones (appointed as Chairman 30 June 2019)1
William Eccleshare
Robert Boyle (to retire 31 March 2020)
Rebecca Miskin (to retire 31 March 2020)
Carol Hosey (appointed 5 February 2020)2
Leslie-Ann Reed (appointed 1 March 2020)3
Neil Johnson (resigned 30 June 2019)
From
1 April 2020
£
100,000
43,775
-
-
45,000
45,000
As at
1 April 2019
£
43,775
43,775
43,775
43,775
-
-
-
125,000
%
change
128%
0%
N/A
N/A
N/A
N/A
N/A
1 Colin Jones joined the Board on an annual fee of £43,775 which increased to £125,000 from 30 June 2019 following his appointment as Chairman.
His fees were reviewed following the completion of the simplification programme and it was determined that they would be reduced to £100,000 with effect from 1 January 2020.
2 Carol Hosey was appointed as Non-Executive Director and Chair of the Remuneration Committee on 5 February 2020. Her annual fees are £40,000 plus £5,000 for chairing the
Remuneration Committee.
3 Leslie-Ann Reed was appointed as Non-Executive Director on 1 March 2020. Her annual fees are £40,000 and she will receive an additional £5,000 from 31 March 2020 for chairing the
Audit Committee.
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www.centaurmedia.comGOVERNANCE REPORT ANNUAL REPORT ON REMUNERATION
CONTINUED
Remuneration received by Directors for the year (audited)
Directors’ remuneration for the years ended 31 December 2019 and 2018 was as follows:
Executive Directors
Swagatam Mukerji
(CEO from 4 September 2019)
Simon Longfield
(appointed 6 November 2019)
Non-Executive Directors
Colin Jones
2019
2018
2019
2018
2019
(appointed as Chairman 30 June 2019) 2018
William Eccleshare
Robert Boyle
Rebecca Miskin
Former Directors
Andria Vidler
(to 30 September 2019)
Neil Johnson
(to June 2019)
Notes:
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Salary
and fees
£
278,177
253,750
27,428
–
84,388
14,592
43,775
43,775
43,775
43,775
43,775
43,775
Benefits
£
Bonus1
£
Pension
£
LTIP2
£
Total
£
Total
Fixed
£
Total
Variable
£
3,660
404,426
19,783
115,195
821,241
301,620
519,621
8,416
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
19,686
729
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
281,852
281,852
28,157
28,157
–
–
84,388
14,592
43,775
43,775
43,775
43,775
43,775
43,775
84,388
14,592
43,775
43,775
43,775
43,775
43,775
43,775
–
–
–
–
–
–
–
–
–
–
–
283,691
11,076
481,866
30,166
168,626
975,425
324,933
650,492
371,448
17,360
62,500
125,000
–
–
–
–
–
40,024
–
–
–
–
–
428,832
428,832
62,500
62,500
125,000
125,000
–
–
–
1 The bonus amounts relate to remuneration under the 2019 IP as set out on page 55.
2 The LTIP amounts relate to the vesting of the 2017 LTIPs as set out on page 56.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Annual bonus for the year (audited)
2019 Incentive Plan
As approved by shareholders at the 2019 AGM, the 2019 Incentive Plan (“2019 IP”) for Andria Vidler (CEO) and Swagatam Mukerji (CFO)
was capped at 200% of base salary based on financial performance to 31 December 2019 with amounts delivered in the form of a cash
award with partial deferral into shares. This arrangement operated instead of the normal 100% of salary bonus and 100% of salary LTIP.
The three elements of the 2019 IP were:
• 50% of the award based on maximising shareholder value from the divestment of non-core assets;
• 25% of the award based on significantly reducing central overhead costs by the end of 2019; and
• 25% of the award based on achieving stretch profit and operating margin targets for the ongoing Xeim business for 2019.
Up to 75% of the 2019 IP was to be paid in cash following the end of the 2019 financial year with any amount earned in excess of 75%
of the maximum deferred into Centaur Media plc shares for two years from the date that the cash element is paid. Targets and actual
performance were as follows:
a) 50% of the award based on maximising shareholder value from the divestment of non-core assets
A target range of proceeds was set for the divestment programme. Following a strategic decision to retain The Lawyer, the target proceeds
were reduced and the maximum potential for this part of the award was reduced from 50% to 35% of the original total award. The total
gross proceeds from the disposals, before working capital adjustments, were £21.75m, which was 92.8% of the target, equal to 32.5% of
the 2019 IP. As all the disposals had been completed before Andira Vidler stepped down from the Board, the Committee did not reduce her
entitlement under this element of the 2019 IP.
b) 25% of the award based on significantly reducing central overhead costs by the end of 2019
The Board set an ambitious target of removing over £5m of annualised central overhead costs by the end of 2019. As the Group has
successfully reached this target, 100% of this opportunity was payable, equal to 25% of the 2019 IP award.
As the cost reduction target was not fully completed at the time that Andria Vidler left, the Committee awarded her 87% of the available
opportunity equal to 21.9% of the 2019 IP.
c) 25% of the award based on achieving stretch profit and operating margin targets for the ongoing Xeim business for 2019
The Board set stretch profit targets for the new Xeim business on the basis of contribution after portfolio (CAP) costs from a low end of
£12.83m to a high end of £14.26m paying between 50% and 100% respectively of this part of the award. Xeim’s actual CAP result for the
year of £13.50m resulted in a 47.2% pay out equal to 23.6% of the 2019 IP.
As Andria Vidler left after nine months of the year, her award was reduced by 25% equal to 17.7% of the 2019 IP.
A summary of the 2019 IP amounts payable for the Executive Directors is as follows:
Bonus type
a) bonus based on divestment of non-core assets
b) bonus based on reducing central overhead costs
c) bonus based on achieving stretch targets for Xeim business
Total bonus
As the bonus awards were less than 75% of the maximum, no share deferral will operate.
Andria Vidler
£
247,928
166,575
67,363
481,866
Swagatam
Mukerji
£
168,938
160,000
75,488
404,426
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www.centaurmedia.comGOVERNANCE REPORT ANNUAL REPORT ON REMUNERATION
CONTINUED
Vesting of 2017 LTIP awards
The Committee agreed to the 2017 LTIP vesting six months early on the basis that the Group had been significantly restructured by the
half year, and the original performance tests were no longer easily measurable. The Committee did not adjust the EPS targets following the
disposals and awards subject to the EPS test (50% of total) lapsed in full. The TSR test was satisfied in full and awards under this test (50%
of total) vested. Further details relating to these awards are:
Performance Condition
Weighting
Targets
EPS
Relative TSR vs FTSE
SmallCap index (excluding
investment trusts)
Total LTIP vesting
50%
50%
0% vesting below 6.5 pence
25% vesting at 6.5 pence
100% vesting at 10.5 pence
Straight-line vesting between these
points
0% vesting below median
25% vesting at median
100% vesting at upper quartile
Straight-line vesting between
these points
Actual Outcome
Below threshold EPS
Vesting
0%
Upper Quartile
50%
50%
These awards vested on 26 September 2019 following the announcement of the Interim Results, as follows:
Director
Number of shares
under award
Vesting
Number of
shares vesting
Andria Vidler
802,982
Swagatam Mukerji
548,546
50%
50%
401,491
274,273
Date of
vesting
26 September
2019
26 September
2019
Market price
on vesting
Value
£
42 pence
168,626
42 pence
115,195
In respect of the requirement to estimate the amount of any LTIP award which is attributable to share price appreciation, the share price on
24 April 2017, the date of grant, was 45.8p. The share price on 26 September 2019, the date of vesting, was 42.0p and at 31 December
2019 it was 36.5p.
56
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Grant of LTIP awards in 2019
No 2019 LTIP grant was made to Andria Vidler or Swagatam Mukerji, in their roles as CEO and CFO respectively. Following his appointment
as CEO, and as part of a revised remuneration package for this role, including a lower salary than the previous CEO, LTIP awards were
granted to Swagatam Mukerji on 3 October 2019 over shares equal to 100% of salary with performance tests based on profitable revenue
growth, Group EBITDA margin growth and relative TSR (each weighted one third). Details of this award are set out below:
Director
Award date
Number of shares
under award
Swagatam Mukerji
3 October 2019 758,293
Basis
100% of
base salary
Face value of
award1
Performance condition Performance period
£320,000
See below
1 January 2019 to 31
December 2021
1 The share price used to calculate the face value of the award was the average share price for the 5 working days prior to the date of grant.
The performance conditions for this award are set out in three parts below:
Performance condition
Profitable revenue growth1
Weighting
33.3%
Measurement period
3 years to
31 December 2021
Targets
50% – Median2
Group EBITDA margin growth
33.3%
100%2
Between Median and 100%
3 years to
31 December 2021
Bottom %2
Top %2
Between bottom and top
Relative TSR vs FTSE SmallCap
index (excluding investment trusts)
at 1 January 20193
33.4%
3 years to
31 December 2021
Median
% of shares which will
vest if target achieved
25%
100%
Straight-line basis
between 25% and
100%
Nil
100%
Straight-line basis
between Nil and 100%
25%
Upper Quartile or above
100%
Between Median and Upper
Quartile
Pro-rata on a straight-
line basis between 25%
and 100%
1 PRG is defined as growth in aggregate Business Unit EBITDA as a % of revenue compared with 2018 base. If this ratio is flat or declines, then no award will be made under this
performance condition.
2 The performance targets for revenue growth and EBITDA growth for the three years are commercially sensitive and are not disclosed . They will remain commercially sensitive during the
three-year period of performance until the calculation is performed and disclosed in the 2021 Annual Report.
3 The TSR element will only vest if there has been sustained improvement in the Company’s underlying financial performance over the performance period.
Andria Vidler purchased 2,900 shares during the period under the Share Incentive Plan. The Company matched these shares on a 1 for 2
basis in accordance with the Plan rules, resulting in 1,450 matching shares being awarded in the year.
Swagatam Mukerji purchased 4,208 shares during the period under the Share Incentive Plan. The Company matched these shares on a 1
for 2 basis in accordance with the Plan rules, resulting in 2,104 matching shares being awarded in the year.
Board changes and payments for loss of office (audited)
Andria Vidler stepped down as CEO on 4 September 2019 and stepped down from the Board on 30 September 2019. Details of her
termination arrangements are set out below:
•
salary and pension paid up to 30 September 2019. Healthcare benefit continued until 31 December 2019.
• an amount of £392,642 was paid in respect of payment in lieu of her 12 month notice period. No further payment in respect of loss of
office was or will be made.
• award under the 2019 IP, pro-rated to date of departure where appropriate, to be paid on the normal payment date in 2020 as detailed
on page 55.
• 2017 LTIP award vested on 26 September 2019 following the completion of the divestment programme, as described on page 56.
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www.centaurmedia.comGOVERNANCE REPORT ANNUAL REPORT ON REMUNERATION
CONTINUED
•
treated as a good leaver for her 2018 LTIP award of 740,807 shares which will vest on the third anniversary of the grant, subject to
performance conditions and pro-rating. No LTIP awards were made to Andria Vidler in 2019.
Swagatam Mukerji was appointed as CEO on 4 September 2019. Details of changes to his remuneration on appointment were as follows:
• annual salary increased from £260,100 to £320,000;
• pension equivalent of 9% of salary as previously provided when he was CFO;
• 2019 IP calculated based on a weighted average salary, for his period as CFO and CEO (see page 55); and
• LTIPs granted as set out on page 57.
Simon Longfield was appointed as CFO on 6 November 2019. Details of his remuneration on appointment were as follows:
• annual salary of £175,000; and
• pension equivalent to 5% of salary in line with the pension provided to the workforce.
In respect of the Non-Executive Directors, Colin Jones replaced Neil Johnson as Chairman from 30 June 2019. Neil Johnson retired from the
Board on 30 June 2019 and Ron Sandler retired from the Board on 3 January 2019. No payments for loss of office were paid or are payable
to Neil Johnson or Ron Sandler.
Payments to past Directors (audited)
Consistent with a long-standing arrangement, Graham Sherren, former Chief Executive Officer and Chairman, was paid £3,000 during the
year (2018: £3,000) for advisory services performed.
Directors’ shareholding and share interests (audited)
Share ownership plays a key role in the alignment of our executives with the interests of shareholders. The Executive Directors are expected
to build up and maintain a shareholding in the Company equal to 200% of salary from the date of the 2019 AGM. Where an executive does
not meet this guideline, they are required to retain at least 50% of the vested shares net of tax under the Company’s LTIP until the guideline
is met.
The tables below set out details of Executive Directors’ outstanding share awards under LTIP schemes (which will vest in future years,
subject to performance and continued service). Under each scheme the exercise price is £nil.
Executive
Andria Vidler
At
31 December
2018
674,194
802,982
740,807
2,217,983
Swagatam Mukerji
573,394
548,546
506,072
Granted
–
Lapsed1
674,194
At
31 December
2019
–
Date of award
30/3/16
–
–
–
–
–
–
401,491
401,4911
24/4/17
–
740,807
6/4/18
1,075,685
1,142,298
573,394
–
4/10/16
274,273
274,2731
24/4/17
–
–
506,072
6/4/18
758,293
3/10/19
–
758,293
Performance
period
1/1/16 –
31/12/18
1/1/17 –
31/12/19
1/1/18 –
31/12/20
1/1/16 –
31/12/18
1/1/17 –
31/12/19
1/1/18 –
31/12/20
1/1/19 –
31/12/21
Exercise
period2
30/03/19 –
29/09/19
24/04/20 –
30/06/20
06/04/21 –
05/10/21
04/10/19 –
03/04/20
24/04/20 –
30/06/20
06/04/21 –
05/10/21
03/10/22 –
02/04/23
Share price
on date of
grant
52.7p
45.8p
50.2p
43.6p
45.8p
50.2p
42.2p
1,628,012
758,293
847,667
1,538,638
1 As detailed above, the LTIP awards granted to Andria Vidler and Swagatam Mukerji in 2016 lapsed in 2019 as a result of the threshold EPS and TSR targets not being met. Awards made
in 2017 were accelerated following the completion of the divestment programme. The TSR part (50%) of the Award vested, whereas the EPS part (50%) of the award lapsed.
2 The exercise period for the 2017 LTIPs was shortened following their early vesting from 23 October 2020 to 30 June 2020.
58
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 The table below sets out the number of shares held or potentially held by Directors (including their connected persons where relevant).
Executive
Andria Vidler
Swagatam Mukerji
Simon Longfield (appointed 6 November 2019)
Non-Executive
Colin Jones
Neil Johnson
William Eccleshare
Robert Boyle
Rebecca Miskin
Carol Hosey
Leslie-Ann Reed
Interests in ordinary shares
31 December
2018
31 December
20191
Shareholding
guideline
achieved?
185,190
80,289
–
–
100,000
–
117,037
14,800
–
–
189,538
136,6012
34,499
120,000
100,000
–
117,037
14,800
–
–
No
No
No
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Interests
in share
schemes
LTIP
1,142,2983
1,538,6383
–
–
–
–
–
–
–
–
Total
1,331,836
1,675,239
34,499
120,000
100,000
–
117,037
14,800
–
–
1 Or on date of cessation, if earlier
2 On 9 October 2019 Swagatam Mukerji transferred 120,000 shares to his wife Rina Mukerji
3 Includes LTIPs granted in 2017 which vested in 2019 (see above).
Performance graph
The graph below shows the TSR of Centaur Media plc compared to the performance of the FTSE SmallCap index (excluding investment
trusts) over the last ten and a half years. This comparator has been chosen on the basis that it is the index against which performance for
the purpose of share awards made under the LTIP is assessed. Owing to the change to the financial year end in 2014, there was no financial
year ended 30 June 2014 and, instead, TSR performance for the 18 months ended 31 December 2014 is shown.
The graph shows the value of £100 invested in Centaur Media plc on 1 July 2009 compared with the value of £100 invested in the FTSE
SmallCap index (excluding investment trusts) at each financial period end.
Total Shareholder Return. Source: Datastream (Thompson Reuters)
400
350
300
250
200
150
100
50
0
1 July 09
30 June 10
30 June 11
30 June 12
30 June 13
31 Dec 14
31 Dec 15
31 Dec 16
31 Dec 17
31 Dec 18
31 Dec 19
Centaur Media
FTSE SmallCap (excluding Investment Trusts)
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20/04/2020 14:15:14
www.centaurmedia.comGOVERNANCE REPORT ANNUAL REPORT ON REMUNERATION
CONTINUED
History of remuneration for the CEO
The table below sets out the CEO single figure of total remuneration over the past ten and a half years.
Period ended
31 December 2019
31 December 2019
31 December 2018
31 December 2017
31 December 2016
31 December 2015
31 December 2014
(18month period)
30 June 2013
30 June 2012
30 June 2011
30 June 2010
CEO
Swagatam Mukerji
(from 4 September 2019)
Andria Vidler
(until 30 September 2019)
Andria Vidler
Andria Vidler
Andria Vidler
Andria Vidler
Andria Vidler
(from 14 November 2013)
Geoff Wilmot
Geoff Wilmot
Geoff Wilmot
Geoff Wilmot
Total
remuneration
£
2019 IP/
Annual bonus
(% of max)
Long-term
incentives
(% of max)
258,7431
975,4252
430,859
558,526
422,605
416,607
670,077
514,920
363,3213
568,673
450,180
70
63
0
37
0
2
56
0
7
58
45
N/A
50
0
0
0
N/A
N/A
0
0
0
0
1 Based on salary and benefits for the period from 4 September 2019 to 31 December 2019 and a pro-rated portion of the 2019 IP relating to that period. Excludes the LTIP part of his
remuneration on the basis that this related to his role as CFO.
2 Based on total remuneration including salary, benefits, 2019 IP and LTIP remuneration (as set out on pages 54 to 56), but excluding £392,642 contractual notice payment as detailed on
page 57.
3 Excludes £384,704 termination and contractual notice payment as detailed in the 2013 Report and Accounts.
Change in the CEO’s remuneration
The table below shows the movement in salary, benefits and annual bonus for Swagatam Mukerji (as CEO) between the current year and
Andria Vidler (as the previous CEO) for the previous financial year compared to all employees of the Company.
Element of remuneration
Salary1
Benefits2
Annual bonus
CEO
Employees
CEO
Employees
CEO
Employees
% change
(14)%
(7)%
(59)%
(5)%
Note3
15%
1 Swagatam Mukerji annual salary on appointment as CEO of £320,000 compared to Andria Vidler’s 2018 annual salary of £373,278.
² Swagatam Mukerji benefits (health insurance, pension and other benefits) on appointment as CEO compared to Andria Vidler’s 2018 benefits.
³ No bonus was paid to the CEO for 2018. Details of bonuses paid to Swagatam Mukerji and Andria Vidler relating to 2019 under the 2019 IP are set out on page 55. On the basis that
bonuses are linked directly to salary, the change in bonus potential between Andria Vidler and Swagatam Mukerji will also reduce by 14% as per note1 relating to salary.
CEO pay ratio
The table below sets out the CEO pay ratios.
Year
2019
Method
Option C
25th percentile
pay ratio
49:1
Median
pay ratio
34:1
75th percentile
pay ratio
21:1
Option C was selected given that this method of calculation was considered to be the most efficient and robust approach in respect of
gathering the required data for 2019 and the salaried employee data is considered representative of the relevant quartiles.
Year
2019
60
25th %tile
£20,509
Salary
Median
£27,674
Total remuneration
75th %tile
£43,997
25th %tile
£20,509
Median
£29,058
75th %tile
£46,618
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Change in remuneration of the CEO
Base salary
Taxable benefits
Bonus
CEO1
2019
£363,691
2018 % Change
2019
(2)% £47,105
2018 % Change
2019
(18)% £616,675
£57,384
2018 % Change
N/A
£–
£371,448
Salaried employees2
£36,799
£39,469
(7)%
£1,541
£1,625
(5)%
£2,329
£2,022
15%
1 Calculated based on 9 month’s salary, benefits and bonus for Andria Vidler up to the point of stepping down from the Board on 30 September 2019 and 3 month’s salary, bonus and
benefits for Swagatam Mukerji thereafter.
2 Calculated based on all employees in the Group (including discontinued operations).
Relative importance of the spend on pay
The following table sets out the percentage change in distributions to shareholders and employee remuneration costs.
Employee remuneration costs
Dividends paid and share repurchases
2019
£29.0m
£7.7m
2018
£31.5m
£4.7m
% Change
(6)%
64%
Remuneration Committee
The Remuneration Committee is responsible for monitoring, reviewing and making recommendations to the Board at least annually on the
broad policy for the remuneration of the Executive Directors, the Chairman, Company Secretary and management tier below the Board.
It also determines their individual remuneration packages, including pension arrangements, bonuses and all incentive schemes and the
determination of targets for any performance-related pay schemes operated by the Group. In addition, the Committee reviews pay and
conditions across the workforce and takes this into account when considering executive remuneration. Minutes of Committee meetings are
circulated to the Board once they have been approved by the Committee.
External advisors
The Remuneration Committee has access to independent advice where it considers it appropriate. During the year, the Committee sought
advice relating to executive remuneration from FIT Remuneration Consultants (‘FIT’), who were appointed by the Committee. The Committee
is satisfied that the advice received from FIT in relation to executive remuneration matters during the year under review was objective and
independent. FIT is a member of the Remuneration Consultants Group and abides by the Remuneration Consultants Group Code of
Conduct. The fees charged by FIT for the year, based on time and materials, amounted to £16,820.
Statement of shareholder voting
The voting results for the Directors’ Remuneration Policy (2019 AGM) and last year’s Directors’ Remuneration Report were as follows:
Resolution
Approval of Directors’ Remuneration Policy in 20191
Number of votes
for (and percentage
of votes cast)
102,537,475 (87.8%)
Number of votes against
(and percentage
of votes cast)
14,247,400 (12.2%)
Number
of votes
cast
116,784,875
Approval of Directors’ Remuneration Report in 2019
116,764,376 (99.98%)
20,500 (0.02%)
116,784,876
Number
of votes
withheld
3,233
3,233
1 Objections were raised by ISS to the 2019 IP, under which Andria Vidler and Swagatam Mukerji would be entitled to increased annual bonuses for one year only. While we respect the
views of ISS, the Board feels that ISS has failed to recognise the unusual circumstances of the past year during which the Group embarked on a fundamental reshaping of its portfolio
that is critical to the delivery of shareholder value.
Approval
The Board of Directors has approved this Remuneration Committee Report, including both the Directors’ Remuneration Policy and the
Annual Report on Remuneration.
Signed on behalf of the Board of Directors
CAROL HOSEY
Chair of the Remuneration Committee
17 March 2020
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61
www.centaurmedia.comGOVERNANCE REPORT STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN
RESPECT OF THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the
Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union 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. In preparing the financial
statements, the Directors are required to:
•
•
select suitable accounting policies and then apply them consistently;
state whether applicable IFRSs as adopted by the European Union have been followed for the Group financial statements and IFRSs as
adopted by the European Union have been followed for the Company financial statements, subject to any material departures disclosed
and explained in the financial statements;
• make judgements and accounting estimates that are reasonable and prudent; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will
continue in business.
The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure
that the financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006 and, as regards the Group
financial statements, Article 4 of the IAS Regulation.
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group and Company’s position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the Governance Report confirm that, to the best of their knowledge:
•
•
•
the Company financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and result of the Company;
the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and profit of the Group; and
the Directors’ Report includes a fair review of the development and performance of the business and the position of the Group and
Company, together with a description of the principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors’ Report is approved:
•
•
so far as the Director is aware, there is no relevant audit information of which the Group and Company’s auditors are unaware; and
they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit
information and to establish that the Group and Company’s auditors are aware of that information.
By order of the Board
HELEN SILVER
Company Secretary
17 March 2020
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CENTAUR MEDIA PLC
Report on the audit of the financial statements
Opinion
In our opinion, Centaur Media plc’s Group financial statements and Company financial statements (the “financial statements”):
• give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2019 and of the Group’s profit and
the Group’s and the Company’s cash flows for the year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union
and, as regards the Company’s financial statements, as applied in accordance with the provisions of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group financial statements,
Article 4 of the IAS Regulation.
We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual Report”), which
comprise: the Consolidated and Company statements of financial position as at 31 December 2019; the Consolidated statement of
comprehensive income, the Consolidated and Company cash flow statements, and the Consolidated and Company statements of changes
in equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ 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 remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided to
the Group or the Company.
Other than those disclosed in note 3 to the financial statements, we have provided no non-audit services to the Group or the Company in
the period from 1 January 2019 to 31 December 2019.
Our audit approach
Overview
• Overall Group materiality: £244,000 based on 0.5% of Revenue (2018: £245,000 based on 5% of
Adjusted profit before tax).
Materiality
• Overall Company materiality: £236,000 (2018: £222,000), based on 1% of Total Assets capped at a
level below Group materiality.
Audit Scope
• The two significant components of the Group were based in the UK and have both been audited by the
UK audit team.
Key Audit
Matters
•
Impairment of goodwill (Group)
• Accounting for disposals (Group)
•
Impairment of investment in subsidiaries (Company)
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
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www.centaurmedia.comFINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CENTAUR MEDIA PLC CONTINUED
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to GDPR, health and safety in relation to events and tax, and we considered the extent to which non-compliance might have a
material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation
of the financial statements such as the Companies Act 2006. 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 inappropriate journal entries to increase the expenses allocated as adjusting items, posting inappropriate journal entries to increase
revenue and management bias in accounting estimates. Audit procedures performed by the Group engagement team included:
• enquiries with management and the Group’s internal legal teams, including consideration of known or suspected instances of fraud and
non-compliance with laws and regulations;
• understanding and evaluating the design and implementation of management’s controls designed to prevent and detect irregularities,
•
•
including whistleblowing arrangements;
inspecting management reports and Board minutes in relation to any regulatory matters; and
identifying and testing journal entries, in particular any journal entries posted with unusual account combinations, postings by
unexpected users and key word searches.
There are inherent limitations in the audit procedures described above 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 would become aware of it. Also, 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 or intentional misrepresentations, or through collusion.
We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits we also addressed the risk of
management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the Directors that
represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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)
identified by the auditors, 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, and any comments we make on the results of our procedures thereon,
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. This is not a complete list of all risks identified by our audit.
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Proof Number 5
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Key audit matter
How our audit addressed the key audit matter
Impairment of goodwill
Refer to pages 41 to 43 (Audit Committee
Report), pages 88 to 89 (Key accounting
assumptions, estimates and judgements) and
pages 100 to 101 (Note 10).
IFRS requires that management perform an
impairment test on goodwill annually. At 31
December 2019 the carrying value of goodwill
is £52.2m (2018: £62.6m), with no impairment
charge recognised in the year (2018: £13.1m).
Management aggregates operations into Cost
Generating Units (‘CGUs’) which represent the
level at which the cash flows (and goodwill)
are monitored and therefore this is the level at
which management performs its impairment
assessment.
Determining if an impairment charge is required
for goodwill involves significant judgement
regarding the ongoing structure of the business,
future results and cash flows of the business,
including forecast growth in future revenues
and EBITDA margins, as well as determining
an appropriate discount factor and long-term
growth rate (‘LTGR’). Market conditions remain
challenging and the remaining businesses have
experienced varying levels of profitability.
Management used a Value in Use (‘VIU’) model,
which included the factors and judgements
referred to above, to compute the present value
of forecast future cash flows for each CGU
which were then compared to the carrying
value of the net assets of each CGU (including
goodwill, tangible and intangible assets) to
determine if there was an impairment.
Due to these factors and the judgements
involved, we consider this to be a key audit
matter.
(Group)
We checked and confirmed that the allocation of CGUs was consistent with internal
management monitoring and included: Marketing (Xeim) and Legal (The Lawyer).
We reviewed the judgements applied to future forecasts to ensure that these
included appropriate consideration of historical variances and uncertain market
conditions, and we also considered the appropriateness of sensitivity disclosures
provided in the financial statements, given that an impairment could arise from
reasonably possible changes to the model’s key assumptions, particularly around
EBITDA forecasts.
We evaluated the Board approved forecasts for each CGU and understood the
process by which these were calculated. We also obtained evidence of the Board’s
approval of these forecasts to 2022.
As part of our assessment we considered:
• management’s key assumptions used in the cash flow forecasts including
the cost savings, revenue and EBITDA growth rates, and overhead levels by
comparing them to Board approved budgets and historical results;
•
•
forecast scenarios, including sensitivities surrounding potential cost savings to
be achieved and contribution growth;
the discount rate applied, by involving our valuations experts in assessing the
cost of capital for the Group and comparable organisations; and
• LTGR applied, by involving our valuations experts in comparing management’s
rate to forecast long term GDP growth in the UK and industry growth reports.
We benchmarked the Group’s discount rate (12.8% pre-tax) and LTGR (2.5%)
against external market data and considered our own independent range of
estimates. The long-term growth rate applied in management’s model was
considered optimistic based on our expectation of 2%. However, as a result
management factored a reduction in their LTGR into their applied sensitivities which
did not result in an impairment
After consultation with our valuations experts, we have determined that the discount
rate applied by management is within our expected range.
In our view, the judgements made by management in preparing the impairment
model are acceptable. We note, however, that while management’s base case
forecasts and sensitivities indicated no impairment, there are certain reasonable
downside scenarios that would result in an impairment to both CGUs. We have
therefore evaluated the disclosure of sensitivity analyses performed by management
(as set out in Note 10) to ensure that these sensitivities are appropriately disclosed
in the financial statements and present a balanced view of reasonably possible
changes to assumptions in the VIU models.
We agree with management’s assessment that goodwill is not impaired and that
appropriate disclosures have been presented in the financial statements.
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www.centaurmedia.comFINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CENTAUR MEDIA PLC CONTINUED
Key audit matter
How our audit addressed the key audit matter
Our audit procedures included the following:
•
•
•
reviewed Sales and Purchase Agreements and recalculation of the gain on
disposal workings prepared by management, with consideration agreed to cash
receipts;
tested the net assets of each business;
tested the allocation of disposal costs including professional fees and
transaction bonuses to ensure the profit/loss on disposal is correct;
• consideration of the allocation of financial statement balances between
continued and discontinued operations to ensure it is appropriate;
•
reviewed the related disclosures in the financial statements to ensure they
comply with the requirements of IFRS 5;
• assessed management’s judgement that The Lawyer did not meet the IFRS 5
criteria for assets held for sale at year-end and VBR did not meet the IFRS 5
criteria for discontinued operations.
As a result of the above procedures, we:
• agreed with management’s assessment that the disposals of FIN, T&M, HR and
ENG met the criteria of discontinued operations. In addition, we agree that the
Lawyer did not meet the assets held for sale criteria at year-end and VBR did
not constitute discontinued operations;
• agreed with management’s calculation and presentation of the profit on
disposals of FIN, T&M, HR and ENG as part of discontinued operations and
loss on disposal of VBR as part of continuing operations;
• agreed the way in which costs directly attributable to the disposals were
allocated to the profit / loss on disposals; and
• considered the related disclosures in Note 8 and other sections of the financial
statements with respect to the disposals to be sufficient and appropriate.
Accounting for disposals
Refer to pages 41 to 43 (Audit Committee
Report), page 88 to 89 (Key accounting
assumptions, estimates and judgements) and
page 98 (Note 8).
The Group disposed of Financial (FIN), Travel
and Meetings (T&M), Human Resources (HR)
and Engineer (ENG). These disposals fall
under the scope of IFRS 5 ‘Assets Held for
Sale and Discontinued operations’ and are
disclosed in the year-end financial statements as
discontinued operations. The Group recognised
a profit on disposal of £7.8m during 2019 in
connection with these disposals.
Judgement is required to allocate the costs
relating to the disposals, the split between
continuing operations and discontinued
operations and net asset value of the portfolios.
During the year, a small entity, Venture Business
Research (VBR), was also disposed which did
not qualify as a discontinued operation under
IFRS 5, with the resulting loss on disposal of
£0.1m included within continuing operations.
The Lawyer, despite being initially marketed for
sale and receiving offers did not meet the Asset
Held for Sale (‘AHFS’) criteria at 31 December
2019.
We consider the accounting for disposals
to be a key audit matter as the application
of IFRS 5 is significant to our audit given the
assessment of the classification is complex, the
transaction and its accounting is non-routine,
involves significant management judgement and
specific disclosures are required in the financial
statements.
(Group)
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Key audit matter
How our audit addressed the key audit matter
Impairment of investment in subsidiaries
Refer to pages 41 to 43 (Audit Committee
Report), pages 88 to 89 (Key accounting
assumptions, estimates and judgements) and
pages 104 to 105 (Note 13).
IAS 36, Impairment of Assets, requires
management to consider whether there are any
indicators of impairment. The Company has
investments in subsidiaries, with a total carrying
amount of £90.1m at 31 December 2019 (2018:
£125.8m). An impairment charge of £35.7m has
been recognised in the year (2018: £13.1m).
Determining if an impairment charge is required
for investments in subsidiaries involves
significant judgement regarding the ongoing
structure of the business, future results and cash
flows of the business, including forecast growth
in future revenues and EBITDA margins, as well
as determining an appropriate discount factor
and long-term growth rate (‘LTGR’). Market
conditions remain challenging and different parts
of the businesses have experienced varying
levels of profitability.
Management used a VIU model to compute
the present value of forecast future cash flows
of the Group’s operations which was then
compared to the carrying value of the underlying
investment. An impairment charge of £35.7m
has been recognised as the VIU model used to
compute the present value of forecast future
cash flows of the Group did not support the
carrying value of investments.
We consider this to be a key audit matter given
the size of the balance and the significant
judgements and estimates involved to determine
whether the carrying value of the investment is
appropriate.
(Company)
We considered management’s assessment of indicators of impairment and whether
the actual impairment recognised in 2019 is appropriate. Factors considered in our
assessment were the results of the VIU model used for the impairment test over
goodwill (referred to above) and market capitalisation of the Group compared to the
investment carrying value.
We reviewed the judgements applied to future forecasts to ensure that these
included appropriate consideration of historical variances and uncertain market
conditions, and we also considered the appropriateness of disclosures provided in
the financial statements to explain the amount impaired.
We evaluated the Board approved cash flow forecasts for the Group and
understood the process by which these were prepared. We obtained evidence of
the Board’s approval of these forecasts to 2022.
As part of our assessment, we considered:
• management’s key assumptions used in the cash flow forecasts including
the cost savings, revenue and EBITDA growth rates and overhead levels, by
comparing them to Board approved budgets and historical results;
•
•
forecast scenarios, including sensitivities surrounding potential cost savings to
be achieved and EBITDA growth;
the discount rate applied, by involving our valuations experts in assessing the
cost of capital for the Group and comparable organisations; and
• LTGR applied, by involving our valuations experts in comparing management’s
rate to forecast long term GDP growth in the UK and industry reports.
We benchmarked the Group’s discount rate (12.8% pre-tax) and LTGR (2.5%)
against external market data and considered our own independent range of
estimates. The LTGR applied in management’s model was considered optimistic
based on our expectation of 2%. However, as a result management factored
a reduction in their long-term growth rate into their applied sensitivities. After
consultation with our valuations, we have determined that the discount rate applied
by management is within our expected range.
There are a range of possible impairment outcomes when management’s forecasts
are sensitised. However, we consider the impairment recognised by management
and the related judgements to be acceptable and in the range identified. We also
note that there are certain reasonable scenarios that would result in an increased
impairment charge and we have therefore evaluated the disclosure of the sensitivity
analyses performed by management (as set out in Note 13) to ensure that these
sensitivities are appropriately disclosed and present a reflection of reasonably
possible changes to assumptions in the VIU model.
We agree with management’s assessment resulting in an impairment charge of
£35.7m and that the disclosures in the financial statements as set out in Note 13
surrounding the impairment are appropriate.
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www.centaurmedia.comFINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CENTAUR MEDIA PLC CONTINUED
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which
they operate.
The Group maintains all of its books and records of its operations in the London head office with the exception of the MarketMakers
Incorporated Limited entity (‘MarketMakers’), which was acquired in 2017, which is managed from its Portsmouth office.
MarketMakers, alongside the rest of Centaur Group, have been identified as two in-scope components. Both required full scope audits as
they are financially significant.
The Group audit team performed audit procedures over both components.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate
on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
£244,000 (2018: £245,000).
£236,000 (2018: £222,000).
Group financial statements
Company financial statements
How we determined it
0.5% of Revenue (2018: 5% of Adjusted
profit before tax)
1% of Total Assets and capped at a level
below Group materiality
Rationale for benchmark applied
We believe that revenue is a key
benchmark for the Group for 2019 given
the current environment of change for the
Group, and we have therefore changed our
benchmark from 2018.
The principal activity of the Company is
that of a holding entity, and this benchmark
is an acceptable and normal materiality
basis to adopt.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of
materiality allocated across the two in-scope components was between £106,000 and £236,000. One component was audited to a local
statutory audit materiality that was also less than our overall Group materiality.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £12,200 (Group audit)
(2018: £12,250) and £11,800 (Company audit) (2018: £12,000) as well as misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
Going concern
In accordance with ISAs (UK) we report as follows:
Reporting obligation
Outcome
We are required to report if we have anything material to add or
draw attention to in respect of the Directors’ statement in the
financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting in
preparing the financial statements and the Directors’ identification of
any material uncertainties to the Group’s and the Company’s ability
to continue as a going concern over a period of at least twelve
months from the date of approval of the financial statements.
We have nothing material to add or to draw attention to.
However, because not all future events or conditions can be
predicted, this statement is not a guarantee as to the Group’s and
Company’s ability to continue as a going concern. For example,
the terms of the United Kingdom’s withdrawal from the European
Union are not clear, and it is difficult to evaluate all of the potential
implications on the Group’s trade, customers, suppliers and the
wider economy.
We are required to report if the Directors’ statement relating
to Going Concern in accordance with Listing Rule 9.8.6R(3) is
materially inconsistent with our knowledge obtained in the audit.
We have nothing to report.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other information
and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to
conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report, Directors’ Report and Corporate Governance Statement, we also considered whether the disclosures
required by the UK Companies Act 2006 have been included.
Based on the responsibilities described above and our work undertaken in the course of the audit, the Companies Act 2006 (CA06), ISAs
(UK) and the Listing Rules of the Financial Conduct Authority (FCA) require us also to report certain opinions and matters as described below
(required by ISAs (UK) unless otherwise stated).
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 Directors’ Report
for the year ended 31 December 2019 is consistent with the financial statements and has been prepared in accordance with applicable legal
requirements. (CA06)
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we did
not identify any material misstatements in the Strategic Report and Directors’ Report. (CA06)
Corporate Governance Statement
In our opinion, based on the work undertaken in the course of the audit, the information given in the Corporate Governance Statement (on
pages 37 to 40) about internal controls and risk management systems in relation to financial reporting processes and about share capital
structures in compliance with rules 7.2.5 and 7.2.6 of the Disclosure Guidance and Transparency Rules sourcebook of the FCA (“DTR”) is
consistent with the financial statements and has been prepared in accordance with applicable legal requirements. (CA06)
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we did
not identify any material misstatements in this information. (CA06)
In our opinion, based on the work undertaken in the course of the audit, the information given in the Corporate Governance Statement (on
pages 37 to 40) with respect to the Company’s corporate governance code and practices and about its administrative, management and
supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the DTR. (CA06)
We have nothing to report arising from our responsibility to report if a corporate governance statement has not been prepared by the
Company. (CA06)
The Directors’ assessment of the prospects of the Group and of the principal risks that would threaten the
solvency or liquidity of the Group
We have nothing material to add or draw attention to regarding:
• The Directors’ confirmation on page 22 of the Annual Report that they have carried out a robust assessment of the principal risks facing
the Group, including those that would threaten its business model, future performance, solvency or liquidity.
• The disclosures in the Annual Report that describe those risks and explain how they are being managed or mitigated.
• The Directors’ explanation on page 26 of the Annual Report as to how they have assessed the prospects of the Group, over what
period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a
reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their
assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.
We have nothing to report having performed a review of the Directors’ statement that they have carried out a robust assessment of the
principal risks facing the Group and statement in relation to the longer-term viability of the Group. Our review was substantially less in scope
than an audit and only consisted of making inquiries and considering the Directors’ process supporting their statements; checking that the
statements are in alignment with the relevant provisions of the UK Corporate Governance Code (the “Code”); and considering whether the
statements are consistent with the knowledge and understanding of the Group and Company and their environment obtained in the course
of the audit. (Listing Rules)
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www.centaurmedia.comFINANCIAL REPORT INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CENTAUR MEDIA PLC CONTINUED
Other Code Provisions
We have nothing to report in respect of our responsibility to report when:
• The statement given by the Directors, on page 62, that they consider the Annual Report taken as a whole to be fair, balanced and
understandable, and provides the information necessary for the members to assess the Group’s and Company’s position and
performance, business model and strategy is materially inconsistent with our knowledge of the Group and Company obtained in the
course of performing our audit.
• The section of the Annual Report on pages 41 to 43 describing the work of the Audit Committee does not appropriately address
matters communicated by us to the Audit Committee.
• The Directors’ statement relating to the Company’s compliance with the Code does not properly disclose a departure from a relevant
provision of the Code specified, under the Listing Rules, for review by the auditors.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies
Act 2006. (CA06)
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities in respect of the financial statements, the Directors are responsible
for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and
fair view. The Directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the 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 Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of
Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
•
the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the Directors to audit the financial statements for the year
ended 30 June 2004 and subsequent financial periods. The period of total uninterrupted engagement is 16 years, covering the years ended
30 June 2004 to 31 December 2019. A competitive tender process for the audit was undertaken for the year ended 31 December 2017
during 2016.
JULIAN JENKINS
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
17 March 2020
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www.centaurmedia.comFINANCIAL REPORT CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
Adjusted
Results1
2019
£m
Adjusting
Items1
2019
£m
Statutory
Results
2019
£m
Note
Restated2
Adjusted
Results1
2018
£m
Restated2
Adjusting
Items1
2018
£m
Restated2
Statutory
Results
2018
£m
Continuing operations
Revenue
Other operating income
Net operating expenses
Operating loss
Finance costs
Loss before tax
Taxation
Loss for the period from continuing
operations
Discontinued operations
Profit / (loss) for the year from discontinued
operations after tax
Profit / (loss) for the year attributable to
owners of the parent after tax
Total comprehensive income / (loss)
attributable to owners of the parent
2
2
3
6
7
9
8,14
Earnings / (loss) per share attributable to
owners of the parent
9
Basic from continuing operations
Basic from discontinuing operations
Basic from profit / (loss) for the year
Fully diluted from continuing operations
Fully diluted from discontinued operations
Fully diluted from profit / (loss) for the year
1Adjusted results exclude adjusting items, as detailed in note 1 (b)
2See note 1 (a) for description of prior year restatement
48.9
1.6
(51.6)
(1.1)
(0.3)
(1.4)
(0.5)
(1.9)
2.3
0.4
0.4
(1.3p)
1.6p
0.3p
(1.3p)
1.6p
0.3p
–
–
(7.3)
(7.3)
–
(7.3)
1.2
(6.1)
7.6
1.5
1.5
(4.3p)
5.3p
1.0p
(4.3p)
5.3p
1.0p
48.9
1.6
(58.9)
(8.4)
(0.3)
(8.7)
0.7
(8.0)
9.9
1.9
1.9
(5.6p)
6.9p
1.3p
(5.6p)
6.9p
1.3p
50.3
0.8
(53.3)
(2.2)
(0.2)
(2.4)
0.4
–
–
(18.1)
(18.1)
–
(18.1)
0.7
50.3
0.8
(71.4)
(20.3)
(0.2)
(20.5)
1.1
(2.0)
(17.4)
(19.4)
6.0
4.0
4.0
(0.8)
5.2
(18.2)
(14.2)
(18.2)
(14.2)
(1.4p)
4.2p
2.8p
(1.4p)
4.0p
2.6p
(12.1p)
(0.6p)
(12.7p)
(12.1p)
(0.4p)
(12.5p)
(13.5p)
3.6p
(9.9p)
(13.5p)
3.6p
(9.9p)
The notes on pages 79 to 121 are an integral part of these consolidated financial statements.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
Attributable to owners of the Company
Note
Share
capital
£m
15.1
Own
shares
£m
(6.5)
Share
premium
£m
1.1
Reserve
for shares
to be
issued
£m
1.1
Deferred
shares
£m
0.1
Foreign
currency
reserve
£m
–
Retained
earnings
£m
74.0
Total
Equity
£m
84.9
At 1 January 2018
Loss for the year and total
comprehensive loss
Transactions with owners
in their capacity as
owners:
Dividends
Acquisition of treasury
shares
Fair value of employee
services
–
–
–
–
26
24
25
As at 31 December 2018
15.1
Profit for the year and total
comprehensive income
Transactions with owners
in their capacity as
owners:
Dividends
Acquisition of treasury
shares
Exercise of share awards
Fair value of employee
services
Foreign currency on
translation
26
24
25
25
–
–
–
–
–
–
–
–
(0.4)
–
(6.9)
–
–
(0.6)
0.3
–
–
–
–
–
–
1.1
–
–
–
–
–
–
–
–
–
0.7
1.8
–
–
–
(0.1)
0.1
–
1.8
–
–
–
–
0.1
–
–
–
–
–
–
0.1
–
–
–
–
–
–
–
–
–
–
0.1
0.1
(14.2)
(14.2)
(4.3)
(4.3)
–
–
55.5
(0.4)
0.7
66.7
1.9
1.9
(7.1)
(7.1)
–
(0.2)
–
–
50.1
(0.6)
–
0.1
0.1
61.1
As at 31 December 2019
15.1
(7.2)
1.1
The notes on pages 79 to 121 are an integral part of these consolidated financial statements.
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COMPANY STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
Attributable to owners of the Company
At 1 January 2018
Loss for the year and total
comprehensive loss
Transactions with owners in
their capacity
as owners:
Dividends
Fair value of employee services
As at 31 December 2018
Loss for the year and total
comprehensive loss
Transactions with owners in
their capacity as owners:
Dividends
Exercise of share awards
Fair value of employee services
As at 31 December 2019
Note
Share
capital
£m
15.1
Own
shares
£m
(6.3)
Share
premium
£m
1.1
Reserve
for shares
to be
issued
£m
1.1
Deferred
shares
£m
0.1
Retained
earnings
£m
81.4
Total
equity
£m
92.5
–
–
–
–
–
–
15.1
(6.3)
–
–
–
–
–
–
–
–
26
25
26
25
25
–
–
–
–
1.1
–
–
–
–
–
0.7
1.8
–
–
(0.1)
0.1
1.8
–
–
–
0.1
–
–
–
–
0.1
(13.7)
(13.7)
(4.3)
–
63.4
(4.3)
0.7
75.2
(40.2)
(40.2)
(7.1)
(0.1)
-
16.0
(7.1)
(0.2)
0.1
27.8
15.1
(6.3)
1.1
The notes on pages 79 to 121 are an integral part of these consolidated financial statements.
74
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
Registered number 04948078
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current tax assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Deferred income
Provisions
Net current liabilities
Non-current liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Net assets
Capital and reserves attributable to owners of the parent
Share capital
Own shares
Share premium
Other reserves
Foreign currency reserve
Retained earnings
Total equity
31 December
2019
£m
Note
Restated2
31 December
2018
£m
10
11
12
15
16
17
18
22
19
20
21
23
20
23
15
24
52.2
9.0
4.3
1.4
66.9
–
10.8
9.3
0.1
20.2
87.1
(12.5)
(2.1)
(8.7)
–
(23.3)
(3.1)
(2.2)
(0.1)
(0.4)
(2.7)
61.1
15.1
(7.2)
1.1
1.9
0.1
50.1
61.1
62.6
15.5
1.3
0.8
80.2
1.4
13.7
0.1
0.2
15.4
95.6
(13.2)
–
(15.0)
(0.1)
(28.3)
(12.9)
–
(0.1)
(0.5)
(0.6)
66.7
15.1
(6.9)
1.1
1.9
–
55.5
66.7
2See note 1 (a) for description of prior year restatement
The financial statements on pages 72 to 121 were approved by the Board of Directors on 17 March 2020 and were signed on its behalf by:
Simon Longfield
Chief Financial Officer
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
Registered number 04948078
Non-current assets
Investments
Deferred tax assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Net current liabilities
Net assets
Capital and reserves attributable to owners of the parent
Share capital
Own shares
Share premium
Other reserves
Retained earnings
Total equity
Note
13
17
18
31 December
2019
£m
31 December
2018
£m
90.1
0.1
90.2
1.0
–
1.0
91.2
125.8
0.1
125.9
3.1
–
3.1
129.0
19
(63.4)
(53.8)
24
(62.4)
(50.7)
27.8
75.2
15.1
(6.3)
1.1
1.9
16.0
27.8
15.1
(6.3)
1.1
1.9
63.4
75.2
The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and has not presented its
own statement of comprehensive income in these financial statements. The movement in retained earnings includes the Company’s loss for
the year of £40.2m (2018: £13.7m) and dividends of £7.1m (2018: £4.3m).
The financial statements on pages 72 to 121 were approved by the Board of Directors on 17 March 2020 and were signed on its behalf by:
Simon Longfield
Chief Financial Officer
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
Cash flows from operating activities
Cash generated from operations
Tax refund / (paid)
Net cash generated from operating activities
Cash flows from investing activities
Cash consideration received on disposal of subsidiaries less cash and cash equivalents
disposed of
Directly attributable costs of disposal of subsidiaries
Purchase of property, plant and equipment
Purchase of intangible assets
Acquisition of subsidiary
Net cash flows generated from / (used in) investing activities
Cash flows from financing activities
Payment for shares bought back
Loan arrangement fees
Interest paid
Repayment of obligations under lease arrangements
Dividends paid to Company’s shareholders
Proceeds from borrowings
Repayment of borrowings
Net cash flows used in financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of year
The notes on pages 79 to 121 are an integral part of these consolidated financial statements.
Year ended
31 December
2019
£m
Year ended
31 December
2018
£m
4.6
0.1
4.7
18.7
(2.3)
(0.2)
(1.4)
(0.1)
14.7
(0.6)
–
(0.2)
(2.3)
(7.1)
2.8
(2.8)
(10.2)
9.2
0.1
9.3
6.8
(1.2)
5.6
0.3
–
(0.5)
(2.3)
(1.8)
(4.3)
(0.4)
(0.2)
(0.4)
–
(4.3)
4.5
(4.5)
(5.3)
(4.0)
4.1
0.1
Note
27
14
14
12
11
23
24
6
6
20
26
28
28
18
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COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
Cash flows from operating activities
Cash generated from operating activities
Cash flows from investing activities
Net cash flows used in investing activities
Cash flows from financing activities
Interest paid
Dividends paid to Company’s shareholders
Proceeds from borrowings
Repayment of borrowings
Net cash flows used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of year
The notes on pages 79 to 121 are an integral part of these consolidated financial statements.
Year ended
31 December
2019
£m
Year ended
31 December
2018
£m
7.3
–
(0.2)
(7.1)
2.8
(2.8)
7.3
–
–
–
4.7
–
(0.4)
(4.3)
4.5
(4.5)
(4.7)
–
–
–
Note
27
6
26
28
28
18
78
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
NOTES TO THE FINANCIAL STATEMENTS
1 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these consolidated and Company financial statements are set out below.
These policies have been consistently applied to all the periods presented, unless otherwise stated. The financial statements are for the
Group consisting of Centaur Media Plc and its subsidiaries, and the Company, Centaur Media Plc. Centaur Media Plc is a public company
limited by shares and incorporated in England and Wales.
(a) Basis of preparation
The consolidated and Company financial statements have been prepared in accordance with International Financial Reporting Standards
(‘IFRS’) as adopted by the European Union and IFRS Interpretations Committee (‘IFRS IC’) and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The financial statements have been prepared on the historical cost basis.
Going concern
The financial statements have been prepared on a going concern basis. The Directors have carefully assessed the Group’s ability to continue
trading and have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for
at least twelve months from the date of approval of these financial statements and for the foreseeable future.
Net cash (see reconciliation in note 27) at 31 December 2019 amounted to £9.3m (2018: £0.1m). In November 2018, the Group renewed
its £25m multi-currency revolving credit facility with the Royal Bank of Scotland and Lloyds, which runs to November 2021 with the option
to extend for 2 periods of 1 year each. None of this was drawn-down at 31 December 2019. Our reported cash conversion rate for the year
was 100% (2018: 85%).
The Group has net current liabilities at 31 December 2019 amounting to £3.1m (2018: £12.9m). In the prior year these primarily arose from
its normal high levels of deferred income relating to events in the future rather than an inability to service its liabilities, as deferred income will
not result in a cash outflow. In the current year net liabilities is at a lower level due to the disposal of businesses with high levels of deferred
income during the year. An assessment of cash flows for the next three financial years, which has taken into account the factors described
above, has indicated an expected level of cash generation which would be sufficient to allow the Group to fully satisfy its working capital
requirements and the guarantee given in respect of its UK subsidiaries, to cover all principal areas of expenditure, including maintenance,
capital expenditure and taxation during this year, and to meet the financial covenants under the revolving credit facility. The Company has
net current liabilities at 31 December 2019 amounting to £62.4m (2018: £50.7m). These almost entirely arise from unsecured payables to
subsidiaries which have no fixed date of repayment.
The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year.
Although these estimates are based on management’s best knowledge of the amount, events or actions, the actual results may ultimately
differ from those estimates.
Having assessed the principal risks and the other matters discussed in connection with the viability statement on page 26, the Directors
consider it appropriate to adopt the going concern basis of accounting in preparing its consolidated financial statements.
New and amended standards adopted by the Group
The following new standards that are mandatory for the first time for the financial year commencing 1 January 2019 have been adopted by
the Group:
IFRS 16 ‘Leases’
IFRS 16 sets out the requirements for lessee and lessor lease accounting. The new standard replaces IAS 17, and eliminates the
classification of leases as either operating leases or finance leases as required by IAS 17 and instead introduces a single accounting model
for leases which requires lessees to recognise assets and liabilities for most leases.
Impact
The Group has performed an impact assessment on its existing and any expected upcoming lease arrangements. On adoption the Group
has taken advantage of the ‘short term lease’ (lease term 12 months or under) and ‘low value items’ (those deemed to be immaterial)
exemptions. The Group has also applied the practical expedient on transition where only contracts that were previously identified as leases
applying IAS 17 are assessed for the purposes of IFRS 16, however the Group does not believe that any contracts other than those falling in
scope after the practical expedient is applied would be deemed to contain a lease arrangement under IFRS 16.
The Group has elected to apply the modified retrospective transition approach where comparative periods are not restated, but the
cumulative impact of applying IFRS 16 is reflected as an adjustment to the opening balance sheet at 31 December 2019. Arrangements
already constituting finance leases under IAS 17are not impacted by the transition to IFRS 16. At adoption on 1 January 2019 there were
three existing lease arrangements captured by IFRS 16 that were previously accounted for as operating leases under IAS 17. During the
year, one contract commenced that constitutes a lease arrangement under IFRS 16.
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FOR THE YEAR ENDED 31 DECEMBER 2019
1 Summary of significant accounting policies continued
Each lease arrangement has been accounted for over its lease term as outlined in the contract. Where options to extend or terminate exist
in these contracts, the recognition of the lease liabilities and ROU assets represent the Directors understanding of likely future cash flows
under these contracts. The assets and liabilities will continue to be reviewed and will be revalued where a change in the future cash flows is
indicated.
Right-of-use assets with a value of £5.5m were recognised (£2.3m for existing leases transitioning on adoption of IFRS 16 and £3.2m for a
new lease commencing on 1 October 2019). Lease liabilities with a value of £6.5m were recognised (£3.3m for existing leases transitioning
on adoption of IFRS 16 and £3.2m for a new lease commencing on 1 October 2019). The value of the IFRS 16 impact to the P&L is
immaterial, however the expenses are now classified as depreciation expense on the right-of-use asset and interest expense on the lease
liability. Please see note 20 for details of these assets, liabilities and expenses. There is no impact to cash flow. All leases discussed here are
property leases.
Disclosures
Disclosures have been made in line with IFRS 16 requirements. The accounting policy for leases is set out in note 1(i) and the use of the
incremental borrowing rate as an accounting estimate in calculating the present value of leases is set out in note 1(t)(vii). Further disclosures
on right-of-use assets and lease liabilities can be found in notes 12 and 20.
Other
No other new standards or amendments to standards (including the Annual Improvements (2015) to existing standards) that are mandatory
for the first time for the financial year commencing 1 January 2019 affected any of the amounts recognised in the current year or any prior
year and is not likely to affect future periods.
New standards and interpretations not yet adopted
There are no standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future
reporting periods and on foreseeable future transactions.
Prior year restatements
i) Discontinued operations
Where the requirements of IFRS 5 have been met, the operational results of subsidiaries disposed of have been presented in discontinued
operations in the current period and restated to discontinued in the comparative period. See notes 8 and 14 for more details.
ii) Correction of prior period accounting errors
Where indicated, restatements have been made to prior year comparatives for trade receivables and other payables (presented in trade and
other receivables and trade and other payables on the face of the consolidated statement of financial position). The restatement is in respect
of credit balances which were reported in trade receivables in 2018, with the result of lowering the balances of both trade receivables
and other payables by £0.8m. This was identified after the authorisation of the 2018 Annual Report, and therefore the balances are being
retrospectively reclassified. This restatement has impacted the balances on the consolidated statement of financial position and notes 18, 20
and 28. This restatement has no impact to periods prior to 2018.
Comparative numbers
Certain prior year comparatives have been updated to reflect current year disclosures.
(b) Presentation of non-statutory measures
In addition to statutory measures, the Directors use various non-GAAP key financial measures to evaluate the Group’s performance and
consider that presentation of these measures provides shareholders with an additional understanding of the core trading performance of the
Group. The measures used are explained and reconciled to their equivalent statutory headings below.
Adjusted operating profit and adjusted earnings per share
The Directors believe that adjusted results and adjusted earnings per share, split between continuing and discontinued operations, provide
additional useful information on the core operational performance of the Group to shareholders, and review the results of the Group on an
adjusted basis internally. The term ‘adjusted’ is not a defined term under IFRS and may not therefore be comparable with similarly titled profit
measurements reported by other companies. It is not intended to be a substitute for, or superior to, IFRS measurements of profit.
Adjustments are made in respect of:
• Exceptional items – the Group considers items of income and expense as exceptional and excludes them from the adjusted results
where the nature of the item, or its magnitude, is material and likely to be non-recurring in nature so as to assist the user of the financial
statements to better understand the results of the core operations of the Group. Details of exceptional items are shown in note 4.
• Amortisation of acquired intangible assets – the amortisation charge for those intangible assets recognised on business combinations
is excluded from the adjusted results of the Group since they are non-cash charges arising from investment activities. As such, they are
not considered reflective of the core trading performance of the Group. Details of amortisation of intangible assets are shown in note 11.
• Share-based payments – share-based payment expenses or credits are excluded from the adjusted results of the Group as the
80
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Directors believe that the volatility of these charges can distort the user’s view of the core trading performance of the Group. Details of
share-based payments are shown in note 25.
•
Impairment of goodwill – the Directors believe that non-cash impairment charges in relation to goodwill are generally volatile and
material, and therefore exclude any such charges from the adjusted results of the Group. Previous impairment charges were presented
as exceptional items. Details of the goodwill impairment analysis are shown in note 10.
• Profit or loss on disposal of assets or subsidiaries – profit or loss on disposals of businesses are excluded from adjusted results of
the Group as they are unrelated to core trading and can distort a user’s understanding of the performance of the Group due to their
infrequent and volatile nature. See note 4.
• Other separately reported items – certain other items are excluded from adjusted results where they are considered large or unusual
enough to distort the comparability of core trading results year on year. Details of these separately disclosed items are shown in note 4.
The tax related to adjusting items is the tax effect of the items above that are allowable deductions for tax purposes (primarily exceptional
items), calculated using the standard rate of corporation tax. See note 7 for a reconciliation between reported and adjusted tax charges.
Further details of adjusting items are included in note 4. A reconciliation between adjusted and statutory earnings per share measures is
shown in note 9.
Loss before tax reconciles to adjusted operating loss as follows:
Loss before tax
Adjusting items
Exceptional operating costs
Impairment of goodwill
Amortisation of acquired intangible assets
Share-based payment expense
Loss on disposal of subsidiary (Venture Business Research Limited)
Adjusted loss before tax
Finance costs
Adjusted operating loss
Cash impact of adjusting items
Tax impact of adjusting items
2See note 1 (a) for description of prior year restatement
Note
4
10
11
25
14
6
7
2019
£m
(8.7)
4.7
–
2.4
0.1
0.1
(1.4)
0.3
(1.1)
(2.7)
(1.2)
Restated2
2018
£m
(20.5)
2.0
12.8
2.5
0.8
-
(2.4)
0.2
(2.2)
(0.8)
(0.7)
Adjusted operating cash flow
Adjusted operating cash flow is not a measure defined by IFRS. It is defined as cash flow from operations excluding the impact of adjusting
items, which are defined above, and including capital expenditure. The Directors use this measure to assess the performance of the Group
as it excludes volatile items not related to the core trading of the Group and includes the Group’s management of capital expenditure.
Statutory cash flow from operations reconciles to adjusted operating cash as below:
Reported cash flow from operating activities
Adjusting items from operations
Working capital impact of adjusting items from operations
Adjusted operating cash flow
Capital expenditure
Post capital expenditure cash flow
Note
27
2019
£m
4.6
4.8
(2.1)
7.3
(1.6)
5.7
2018
£m
6.8
2.5
(1.7)
7.6
(2.8)
4.8
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
1 Summary of significant accounting policies continued
Underlying revenue growth
The Directors review underlying revenue growth in order to allow a like for like comparison of revenues between years. Underlying revenues
therefore exclude the impact of event timing differences, revenue contribution arising from acquired or disposed businesses and other
revenue streams that are not expected to be ongoing in future years.
Statutory revenue growth reconciles to underlying revenue growth as follows:
Reported revenue 2018
Disposed business – Venture Business Research (‘VBR’)
Closed event – Marketing Week Live
Underlying revenue 2018
Reported revenue 2019
Disposed business – Venture Business Research (‘VBR’)
Closed event – Marketing Week Live
Underlying revenue 2019
Reported revenue growth
Underlying revenue growth
Xeim
£m
42.6
–
(1.5)
41.1
40.7
–
(1.1)
39.6
(4%)
(4%)
The Lawyer
£m
7.7
(0.3)
–
7.4
8.2
(0.1)
–
8.1
6%
9%
Total
£m
50.3
(0.3)
(1.5)
48.5
48.9
(0.1)
(1.1)
47.7
(3%)
(2%)
Adjusted EBITDA
Adjusted EBITDA is not a measure defined by IFRS. It is defined as adjusted operating profit before depreciation and impairment of tangible
assets and amortisation and impairment of intangible assets other than those acquired through a business combination. It is used by
the Directors as a measure to review performance of the Group and forms the basis of some of the Group’s financial covenants under its
revolving credit facility. Adjusted EBITDA is calculated as follows:
Adjusted operating loss (as above)
Depreciation of property, plant and equipment
Impairment of property, plant and equipment
Amortisation of computer software
Impairment of computer software
Adjusted EBITDA
2See note 1 (a) for description of prior year restatement
Note
12
12
11
11
2019
£m
(1.1)
2.3
0.4
2.5
0.3
4.4
Restated2
2018
£m
(2.2)
0.9
–
2.7
–
1.4
Net cash/(debt)
Net cash/(debt) is not a measure defined by IFRS. Net cash/(debt) is calculated as cash less overdrafts and bank borrowings under the
Group’s financing arrangements. The Directors consider the measure useful as it gives greater clarity over the Group’s liquidity as a whole. A
reconciliation between net debt and statutory measures is shown in note 27.
(c) Principles of consolidation
The consolidated financial statements incorporate the financial statements of Centaur Media Plc and all of its subsidiaries after elimination of
intercompany transactions and balances.
(i) Subsidiaries
Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group until the date that the Group ceases to control
them. In the statement of comprehensive income, the results of subsidiaries for which control has ceased are presented separately as
discontinued operations in the year in which they have been disposed of and in the comparative year.
On the disposal of a subsidiary, assets and liabilities of that subsidiary are de-recognised from the consolidated statement of financial
position, earnings up to the date of loss of control are retained in the Group, and a profit/(loss) on disposal is recognised measured as
consideration received less the fair value of assets and liabilities disposed of.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. The accounting
policies of subsidiaries are consistent with the policies adopted by the Group.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Pounds Sterling,
which is the Group and Company’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates are recognised in the statement of comprehensive income.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair
value was determined.
(iii) Group Companies
The results and financial position of the Group entities that have a functional currency different from the presentation currency are translated
into the presentation currency as follows:
• Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of
financial position;
•
Income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this average is not
a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the rate on the dates of the transactions); and
• All resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations and of borrowings are
recognised in other comprehensive income. When a foreign operation is sold, exchange differences that were recorded in equity are
recognised in the statement of comprehensive income as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
(e) Revenue recognition
Revenue is recognised in accordance with IFRS 15. Revenue is measured at the transaction price, which is the amount of consideration
to which Centaur expects to be entitled in exchange for transferring promised goods or services to the customer. Judgement may arise
in timing and allocation of transaction price when there are multiple performance obligations in one contract, however an annual impact
assessment is performed which has confirmed that the impact is immaterial in both the current year and comparative year. Revenue arises
from the sales of premium content, marketing services, training and advisory, events, marketing and advertising solutions, and telemarketing
services in the normal course of business, net of discounts and value added tax. Goods and services exchanged as part of a barter
transaction are recognised in revenue at the fair value of the goods and services provided. Returns, refunds and other similar allowances,
which have historically been low in volume and immaterial in magnitude, are accounted for as a reduction in revenue as they arise.
Where revenue is deferred it is held as a balance in deferred income on the consolidated statement of financial position. At any given
statement of financial position date, this deferred income is current in nature and is expected to wholly be recognised in revenue in
the following financial year, with the exception of returns and credit notes, which have historically been low in volume and immaterial in
magnitude. Additionally, in the current year, deferred income held in a subsidiary at the point of its disposal will not have been recognised in
revenue for the Group for the year.
The Group recognises revenue earned from contracts as individual performance obligations are met, on a stand-alone selling price basis.
This is when value and control of the product or service has transferred, being when the product is delivered to the customer or the period in
which the services are rendered as set out in more detail below.
Premium Content
Revenue from subscriptions is deferred and recognised on a straight-line basis over the subscription period reflecting the continuous
provision of paid content services over this time. Revenue from individual publication sales is recognised at the point at which the publication
is delivered to the customer. In general the Group bills customers for premium content at the start of the contract.
Marketing Services
Revenue from campaign work and consultancy contracts is recognised when the Group has obtained the right to consideration in exchange
for its performance, which is when a separately identifiable phase (milestone) of a contract has been completed and the value and benefit
of the services rendered have been transferred to the customer. In general the Group bills customers for marketing services up front on a
milestone basis.
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www.centaurmedia.comFINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
1 Summary of significant accounting policies continued
Training and Advisory
Revenue from training and advisory is deferred and recognised over the period of the training or when a separately identifiable milestone of a
contract has been delivered to the customer. In general the Group bills customers for training and advisory up front on a milestone basis.
Events
Consideration received in advance for events is deferred and revenue is recognised at the point in time at which the event takes place. In
general, the Group bills customers for events before the event date.
Marketing and Advertising Solutions
Marketing Solutions revenue from display and bespoke campaigns is recognised over the period that the service is provided. Sales of online
advertising space are recognised over the period during which the advertisements are placed. Sales of advertising space in publications
are recognised at the point at which the publication occurs. In general the Group bills customers for marketing and advertising solutions on
delivery.
Telemarketing Services
Revenue from telemarketing services is deferred and recognised over the period that the service is delivered generally according to the
number of hours expended as a proportion of the total hours contracted. In general the Group bills customers for telemarketing services in
advance.
(f) Other operating income
Other operating income includes revenue from all other operating activities which are not related to the principal activities of the Group.
Included in other operating income is rental income and transitional services agreement income.
Rental income is for the sub-lease of properties under lease, which is recognised on a straight-line basis over the lease term using the
exemption available for short-term leases under IFRS 16, see note 1(i).
Transitional services agreement income relates to services provided to the buyers of the Group companies disposed of during the year,
which is recognised at the point in time at which the service is delivered. The costs associated with this income are included within net
operating expenses on the consolidated statement of comprehensive income.
(g) Investments
In the Company’s financial statements, investments in subsidiaries are stated at cost less provision for impairment in value.
Investments are reviewed for impairment whenever events indicate that the carrying value may not be recoverable. An impairment loss is
recognised to the extent that the carrying value exceeds the higher of the investments fair value less cost of disposal and its value-in-use.
An asset’s value-in-use is calculated by discounting an estimate of future cash flows by the pre-tax weighted average cost of capital. Any
impairment is recognised in the statement of comprehensive income. If there has been a change in the estimates used to determine the
investment’s recoverable amount, impairment losses that have been recognised in prior periods may be reversed. This reversal is recognised
in the statement of comprehensive income.
(h) Income tax
The tax expense represents the sum of current and deferred tax.
Current tax is based on the taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income
because it excludes items of income or expense that are taxable or deductible in other years, and it further includes items that are never
taxable or deductible. The Group and Company’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the statement of financial position date.
Deferred tax is provided in full, using the liability method, on temporary differences between the carrying amounts of assets and liabilities in
the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable
profits will be available to utilise those temporary differences and losses. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or the initial recognition (other than in a business combination) of other assets and liabilities in a transaction
that affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the enacted or substantively enacted tax rates that are expected to apply in the year when the liability is settled
or the asset is realised. Deferred tax is charged or credited to the statement of comprehensive income, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is recognised in other comprehensive income.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 (i) Leases
Lessee accounting
Under IFRS 16, leases are accounted for on a ‘right-of-use model’ reflecting that, at the commencement date, the Group as a lessee
has a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term. The financial
obligation is recognised as a lease liability, and the right to use the underlying asset is recognised as a right-of-use (‘ROU’) asset. The
ROU assets are recognised within property, plant and equipment on the face of the consolidated statement of financial position, and are
presented separately in note 12.
The lease liability is initially measured at the present value of the lease payments using the rate implicit in the lease or, where that cannot be
readily determined, the incremental borrowing rate (see note 1(t)(vii)). Subsequently the lease liability is measured at amortised cost, with
interest increasing the carrying amount and lease payments reducing the carrying amount. The carrying amount is remeasured to reflect any
reassessment or lease modifications, or to reflect revised in-substance fixed lease payments.
The ROU asset is initially measured at cost which comprises:
•
the amount of the initial measurement of the lease liability;
• any lease payments made at or before the commencement date, less any lease incentives received;
• any initial direct costs; and
• an estimate of costs to be incurred at the end of the lease term.
Subsequently the ROU asset is measured at cost less accumulated depreciation and impairment losses. Depreciation is calculated to write
off the cost on a straight line-basis over the lease term.
Using the exemption available under IFRS 16 the Group elects not to apply the requirements above to:
• Short-term leases; and
• Leases for which the underlying asset is of a low value.
In these cases, the Group recognises the lease payments as an expense on a straight-line basis over the lease term, or another systematic
basis if that basis is more representative of the agreement.
Lessor accounting
The Group had contracts for the sub-lease of areas of its Wells Street property lease. These arrangements were exempt from the
requirements of IFRS 16 under the short-term lease exemption as they all had a lease term of under twelve months from the date of
transition. As such, the income derived from these sub-leasing arrangements is recognised on a straight-line basis and is presented in
the consolidated statement of comprehensive income in ‘other operating income’. All arrangements in which the Group acted as a lessor
ceased during the year.
( j) Impairment of assets
Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events indicate that the carrying value may not
be recoverable. An impairment loss is recognised to the extent that the carrying value exceeds the higher of the asset’s fair value less cost
of disposal and its value-in-use. An asset’s value in use is calculated by discounting an estimate of future cash flows by the pre-tax weighted
average cost of capital.
(k) Inventories
Inventories are stated at the lower of cost and net realisable value. Work in progress comprises costs incurred relating to publications and
exhibitions prior to the publication date or the date of the event. Cost is measured as all costs of purchase and other costs incurred in bring
the inventories to their present location and condition.
(l) Property, plant and equipment
See note 1(i) for right-of-use assets. All other property, plant and equipment is stated at historical cost less accumulated depreciation and
impairment losses. The historical cost of property, plant and equipment is the purchase cost together with any incidental direct costs of
acquisition. Depreciation is calculated to write off the cost, less estimated residual value, of assets, on a straight line-basis over the expected
useful economic lives to the Group over the following periods:
Leasehold improvements
– 10 years or the expected length of the lease if shorter
Fixtures and fittings
Computer equipment
Right-of-use assets
– 5 to 10 years
– 3 to 5 years
– over the lease term
The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting year, with the effect of any
changes in estimate accounted for on a prospective basis.
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www.centaurmedia.comFINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
1 Summary of significant accounting policies continued
(m) Intangible assets
(i) Goodwill
Where the cost of a business acquisition exceeds the fair values attributable to the separable net assets acquired, the resulting goodwill
is capitalised and allocated to the cash-generating unit (‘CGU’) or groups of CGUs that are expected to benefit from the synergies of the
business combination. Goodwill has an indefinite useful life and is tested for impairment annually on a Group level or whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable.
Each segment is deemed to be a CGU. Goodwill and acquired intangible assets are assessed for impairment in accordance with IAS 36. In
assessing whether a write-down of goodwill and acquired intangible assets is required, the carrying value of the segment is compared with
its recoverable amount. Recoverable amount is measured as the higher of fair value less cost of disposal and value-in-use. Any impairment
is recognised in the statement of comprehensive income (in net operating expenses) and is classified as an adjusting item. Impairment of
goodwill is not subsequently reversed.
On the disposal of a CGU, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
(ii) Brands and publishing rights, customer relationships and non-compete arrangements
Separately acquired brands and publishing rights are shown at historical cost. Brands and publishing rights, customer relationships and
non-compete arrangements acquired in a business combination are recognised at fair value at the acquisition date. They have a finite useful
life and are subsequently carried at cost less accumulated amortisation and impairment losses.
(iii) Software
Computer software that is not integral to the operation of the related hardware is carried at cost less accumulated amortisation. Costs
associated with the development of identifiable and unique software products controlled by the Group that will generate probable future
economic benefits in excess of costs are recognised as intangible assets when the criteria of IAS 38 ‘Intangible Assets’ are met. They are
carried at cost less accumulated amortisation and impairment losses.
(iv) Amortisation methods and periods
Amortisation is calculated to write off the cost or fair value of intangible assets on a straight-line basis over the expected useful economic
lives to the Group over the following periods:
Computer software
Brands and publishing rights
Customer relationships
– 3 to 5 years
– 5 to 20 years
– 3 to 10 years or over the term of any specified contract
Separately acquired websites and content
– 3 to 5 years
Non-compete arrangements
– Over the term of the arrangement
(n) Employee benefits
(i) Post-employment obligations
The Group and Company contribute to a defined contribution pension scheme for the benefit of employees. The assets of the scheme are
held separately from those of the Group in an independently administered fund. Contributions to defined contribution schemes are charged
to the statement of comprehensive income in net operating expenses when employer contributions become payable.
(ii) Share-based payments
The Group operates a number of equity-settled share-based compensation plans for its employees. The fair value of the share-based
compensation expense is estimated using either a Monte Carlo or Black-Scholes option pricing model and is recognised in the statement of
comprehensive income over the vesting period with a corresponding increase in equity. The total amount to be expensed is determined by
reference to the fair value of the awards granted:
•
Including any market performance conditions;
• Excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets,
cash flow performance and remaining an employee of the entity over a specified time period); and
•
Including the impact of any non-vesting conditions (for example, the requirement for employees to save).
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be
satisfied. At the end of each reporting year, the Group revises its estimates of the number of options that are expected to vest based on
the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in the statement of
comprehensive income, with a corresponding adjustment to equity. The Company issues new shares or transfers shares from treasury
shares to settle share-based compensation awards.
The award by the Company of share-based compensation awards over its equity instruments to the employees of subsidiary undertakings
in the Group is treated as a capital contribution, only if it is left unsettled. The fair value of employee services received, measured by
reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a
corresponding credit to equity.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 (o) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an
outflow of resources will be required to settle the obligation and the obligation can be reliably estimated.
Provisions for deferred contingent consideration are measured at fair value. Where the deferred consideration is contingent on the continued
employment of the vendors, such arrangements are recognised in the consolidated statement of comprehensive income on a straight line
basis over the period of the arrangement.
(p) Equity
Share capital and share premium
Ordinary and deferred shares are classified as equity. The excess of consideration received in respect of shares issued over the nominal
value of those shares is recognised in the share premium account. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Company’s equity instruments, for example as the result of a share buyback or share-based
payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity
attributable to the owners of the Company as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are
subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax
effects, is included in equity attributable to the owners of the Company.
Shares held by the Centaur Employees’ Benefit Trust are disclosed as treasury shares and deducted from contributed equity. The Company
also holds a non-distributable reserve representing the fair value of unvested share-based compensations plans.
Own shares
Own shares consist of treasury shares and shares held within an employee benefit trust. The Company has an employee benefit trust for the
granting of shares to applicable employees.
Own shares are recognised at cost as a deduction from equity shareholders’ funds. Subsequent consideration received for the sale of such
shares is also recognised in equity, with any difference between the sale proceeds and the original cost being taken to retained earnings. No
gain or loss is recognised in the financial statements on transactions in treasury shares.
(q) Dividends
Dividends are recognised in the year in which they are paid or, in respect of the Company’s final dividend for the year, approved by the
shareholders in the Annual General Meeting.
(r) Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
The Executive Committee has been identified as the chief operating decision-maker, responsible for allocating resources and assessing
performance of the operating segments. In light of the disposals of subsidiaries, the reportable segments of the Group have changed since
the year ended 31 December 2018. In the year then ended (and in previous years) the three reportable segments of the Group, each of
which were allocated a proportion of corporate income and costs, were:
• Marketing (renamed to Xeim);
• Financial Services (disposed 31 March 2019); and
• Professional, which comprised the following portfolios:
− Legal, which consisted of The Lawyer and Venture Business Research (‘VBR’) (VBR was disposed on 13 May 2019);
− Human Resources (disposed 30 April 2019);
− Travel & Meetings (disposed 30 April 2019); and
− Engineering (disposed 31 May 2019).
Consequently, the core operations are now organised around the two continuing reportable market-facing segments Xeim and The Lawyer
(the remaining component of the previous Legal portfolio), with corporate income and costs presented separately as “Central”.
Certain prior year comparatives have been updated to reflect current year presentation.
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www.centaurmedia.comFINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
1 Summary of significant accounting policies continued
(s) Financial instruments
The Group has applied IFRS 9, Financial Instruments as outlined below:
(i) Financial assets
The Group classifies and measures its financial assets in line with one of the three measurement models under IFRS 9: at amortised cost,
fair value through profit or loss, and fair value through other comprehensive income. Management determines the classification of its financial
assets based on the requirements of IFRS 9 at initial recognition.
They are included in current assets, except for maturities greater than 12 months after the statement of financial position date. These are
classified as non-current assets. The Group’s financial assets comprise trade and other receivables and cash and cash equivalents in the
statement of financial position. Please see the following sections.
(ii) Trade receivables
Trade receivables are accounted for under IFRS 9 being recognised initially at fair value and subsequently at amortised cost less any
allowance for expected lifetime credit losses under the “expected credit loss” model. As mandated by IFRS 9, the expected lifetime credit
losses are calculated using the ‘simplified’ approach.
The allowance for expected lifetime credit losses for trade receivables is established by considering, on a discounted basis, the cash
shortfalls it would incur in various defaults scenarios for prescribed future periods and multiplying those shortfalls by the probability of each
scenario occurring. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables. The allowance is the sum of these probability weighted outcomes. The
allowance and any changes to it are recognised in the statement of comprehensive income within net operating expenses. A provision
matrix is used to calculate the allowance for expected lifetime credit losses on trade receivables which is based on historical default rates
over the expected life of the trade receivables and is adjusted for forward looking estimates. When a trade receivable is uncollectible, it is
written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against
net operating expenses in the statement of comprehensive income. The Group defines a default as failure of a debtor to repay an amount
due as this is the time at which our estimate of future cash flows from the debtor is affected.
(iii) Cash and cash equivalents
Cash and cash equivalents includes cash in hand and deposits repayable on demand or maturing within three months of the statement of
financial position date.
(iv) Financial liabilities
Debt and trade payables are recognised initially at fair value based on amounts exchanged, net of transaction costs, and subsequently at
amortised cost.
Interest expense on debt is accounted for using the effective interest method and is recognised in income.
(v) Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
(vi) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred and carried subsequently at amortised cost. Costs of
borrowings are recognised in the statement of comprehensive income as incurred or, where appropriate, across the term of the related
borrowing.
(vii) Receivables from and payables to subsidiaries
The Company has amounts receivable from and payable to subsidiaries which are recognised at fair value. Amounts receivable from
subsidiaries are assessed annually for recoverability under the requirements of IFRS 9.
(viii) Derivative financial instruments
The Group does not hold derivative financial instruments either for trading purposes or designated as hedges.
(t) Key accounting assumptions, estimates and judgements
The preparation of financial statements under IFRS requires the use of certain key accounting assumptions and requires management to
exercise its judgement and to make estimates. The areas where assumptions and estimates are significant to the consolidated financial
statements are as follows:
(i) Carrying value of goodwill, other intangible assets and Company investment estimate
In assessing whether goodwill, other intangible fixed assets and the Company’s investment are impaired, the Group uses a discounted
cash flow model which includes forecast cash flows and estimates of future growth. If the results of operations in future periods are lower
than included in the cash flow model, impairments may be triggered. A sensitivity analysis has been performed on the value-in-calculations.
Further details of the assumptions and sensitivities in the discounted cash flow model are included in notes 10 and 13.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Intangible assets arising on business combinations are identified based on the Group’s understanding of the acquired business and previous
experience of similar businesses. Consistent methods of valuation for similar types of intangible asset are applied where possible and
appropriate, using information reviewed at Board level where available. Discount rates applied in calculating the values of intangible assets
arising on the acquisition of subsidiaries are calculated specifically for each acquisition and adjusted to reflect the respective risk profile of
each individual asset based on the Group’s past experience of similar assets.
(ii) Recoverability of trade receivables estimate
The allowance for expected lifetime credit losses for trade receivables is calculated in line with IFRS 9. This is established by considering on
a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls
by the probability of each scenario occurring. The historical loss rates are adjusted to reflect current and forward-looking information on
macroeconomic factors affecting the ability of the customers to settle the receivables. Further details about trade receivables are included in
note 17 and information about the credit risk and expected lifetime credit losses are shown in note 28.
(iii) Adjusting items judgement
The term ‘adjusted’ is not a defined term under IFRS. Judgement is required to ensure that the classification and presentation of certain
items as adjusting, including exceptional items, is appropriate and consistent with the Group’s accounting policy. Further details about the
amounts classified as adjusting are included in notes 1(b) and 4.
(iv) Share based payments estimate
The fair value of the share-based compensation expense recognised in the statement of comprehensive income requires the use of
estimates. Details regarding the determination of fair value of these costs are set out in note 1(n)(ii).
(v) Deferred tax judgement and estimate
The calculation of deferred tax assets and liabilities requires judgement. Where the ultimate tax treatment is uncertain, the Group recognises
deferred tax assets and liabilities based on an estimate of future taxable income and recoverability. Where a change in circumstances
occurs, or the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and
deferred tax balances in the year in which that change or outcome is known. The accounting policy regarding deferred tax is set out above
in note 1(h).
(vi) Valuation of intangibles estimate
Intangibles assets acquired in a business combination are required to be recognised separately from goodwill and amortised over their useful
life. The Group has separately recognised computer software, brands and customer relationships in the acquisitions made (see note 11).
The fair value of these acquired intangibles is based on valuation techniques that require inputs based on assumptions about the future and
estimates related to current market conditions.
The Group also makes assumptions about the useful life of the acquired intangibles as outlined in note 1(m)(iv).
(vii) Lease incremental borrowing rate estimate
The adoption of IFRS 16 on 1 January 2019 requires the use of an incremental borrowing rate (‘IBR’) to discount minimum future lease
payments to present value. The IBR is an estimate used in accounting for leases under IFRS 16 where the interest rate implicit in the lease
cannot be readily determined. The IBR is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a
similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. This
is calculated by using LIBOR as a reference rate and adjusting for the Group’s specific borrowing rate on its existing revolving credit facility.
Additionally, for each individual contract a lease specific adjustment is made where necessary by using market yields on similar assets as a
data point.
2 Segmental reporting
The Executive Committee has been identified as the chief operating decision-maker, reviewing the Group’s internal reporting on a monthly
basis in order to assess performance and allocate resources.
In light of the disposals of subsidiaries in the current year, the reportable segments of the Group have changed since the year ended 31
December 2018. In the year then ended (and in previous years) the three reportable segments of the Group were as follows, with corporate
income and costs allocated to each on an appropriate basis:
• Marketing (renamed Xeim);
• Financial Services (disposed 31 March 2019); and
• Professional, the aggregate of the following portfolios:
− Legal (which consists of The Lawyer and VBR (until disposal of VBR on 13 May 2019));
− Human Resources (disposed 30 April 2019);
− Travel & Meetings (disposed 30 April 2019); and
− Engineering (disposed 31 May 2019).
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www.centaurmedia.comFINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2 Segmental reporting continued
Consequently, the core operations are now organised around the two continuing reportable market-facing segments: Xeim and The Lawyer
(the remaining component of the previous Legal portfolio). Corporate income and costs have been presented separately as “Central”. The
Group believes this is the most appropriate presentation of segmental reporting in order for the user to understand the core operations of
the Group. There is no inter-segmental revenue.
Segment assets consist primarily of property, plant and equipment, intangible assets including goodwill, inventories and trade receivables.
Segment liabilities comprise trade payables, accruals and deferred income.
Corporate assets and liabilities primarily comprise property, plant and equipment, intangible assets, current and deferred tax balances, cash
and cash equivalents, borrowings and lease liabilities.
Capital expenditure comprises additions to property, plant and equipment, intangible assets and includes additions resulting from
acquisitions through business combinations.
2019
Revenue
Other operating income
Adjusted operating
profit / (loss)
Exceptional operating
costs
Amortisation of acquired
intangibles
Share–based payments
Loss on disposal of
subsidiary
Profit on disposal of
subsidiaries
Operating profit / (loss)
Finance costs
(Loss) / profit before tax
Taxation
(Loss) / profit for the year
Note
1 (b)
4
11
25
14
14
6
7
Segment assets
Corporate assets
Consolidated total
assets
Segment liabilities
Corporate liabilities
Consolidated total
liabilities
Other items
Capital expenditure
(tangible and intangible
assets)
Xeim
£m
40.7
–
4.1
(0.5)
(2.4)
–
–
–
1.2
The Lawyer
£m
8.2
Core
operations
£m
48.9
–
2.3
(1.0)
–
–
(0.1)
–
1.2
–
6.4
(1.5)
(2.4)
–
(0.1)
–
2.4
57.8
18.7
76.5
(17.4)
(3.8)
(21.2)
Central
£m
–
1.6
(7.5)
(3.2)
–
(0.1)
–
–
(10.8)
–
10.6
–
(4.8)
Continuing
operations
£m
48.9
Discontinued
operations
£m
7.0
1.6
(1.1)
(4.7)
(2.4)
(0.1)
(0.1)
–
(8.4)
(0.3)
(8.7)
0.7
(8.0)
76.5
10.6
87.1
(21.2)
(4.8)
(26.0)
Group
£m
55.9
1.6
1.8
(4.8)
(2.5)
(0.1)
(0.1)
7.8
2.1
(0.3)
1.8
0.1
1.9
76.5
10.6
87.1
(21.2)
(4.8)
(26.0)
1.5
–
2.9
(0.1)
(0.1)
–
–
7.8
10.5
–
10.5
(0.6)
9.9
–
–
–
–
–
–
–
0.8
0.1
0.9
0.6
1.5
90
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 Restated2
2018
Revenue
Note
Other operating income
Adjusted operating profit
1 (b)
4
10
11
25
14
6
7
Exceptional operating
costs
Impairment of goodwill
Amortisation of acquired
intangibles
Share-based payments
Profit on disposal of
subsidiary
Operating (loss) / profit
Finance costs
(Loss) / profit before tax
Taxation
(Loss) / profit for the year
Segment assets
Corporate assets
Consolidated total
assets
Segment liabilities
Corporate liabilities
Consolidated total
liabilities
Other items
Capital expenditure
(tangible and intangible
assets)
The Lawyer
£m
7.7
Core
operations
£m
50.3
Central
£m
–
Continuing
operations
£m
50.3
Discontinued
operations
£m
20.2
Xeim
£m
42.6
–
3.3
(0.3)
(12.8)
(2.4)
(0.2)
–
(12.4)
–
2.0
(0.3)
–
(0.1)
–
–
1.6
–
5.3
(0.6)
(12.8)
(2.5)
(0.2)
–
(10.8)
56.6
17.7
74.3
(11.4)
(2.4)
(13.8)
0.8
(7.5)
(1.4)
–
–
(0.6)
–
(9.5)
–
2.9
–
(6.7)
0.8
(2.2)
(2.0)
(12.8)
(2.5)
(0.8)
–
(20.3)
(0.2)
(20.5)
1.1
(19.4)
74.3
2.9
77.2
(13.8)
(6.7)
–
7.4
(0.5)
(0.3)
(0.3)
–
0.1
6.4
–
6.4
(1.2)
5.2
18.4
–
18.4
(8.4)
–
Group
£m
70.5
0.8
5.2
(2.5)
(13.1)
(2.8)
(0.8)
0.1
(13.9)
(0.2)
(14.1)
(0.1)
(14.2)
92.7
2.9
95.6
(22.2)
(6.7)
(20.5)
(8.4)
(28.9)
1.9
0.3
2.2
0.8
3.0
–
3.0
2 See note 1 (a) for description of prior year restatement
Supplemental Information
Revenue by Geographical Location
The Group’s revenues from continuing operations from external customers by geographical location are detailed below:
United Kingdom
Europe (excluding United Kingdom)
North America
Rest of world
Xeim
2019
£m
32.7
2.6
4.4
1.0
40.7
The Lawyer
2019
£m
6.6
0.9
0.4
0.3
8.2
Total
2019
£m
39.3
3.5
4.8
1.3
48.9
Restated2
Xeim
2018
£m
34.5
1.7
4.2
2.2
42.6
Restated2
The Lawyer
2018
£m
6.1
0.7
0.4
0.5
7.7
Restated2
Total
2018
£m
40.6
2.4
4.6
2.7
50.3
2 See note 1 (a) for description of prior year restatement
Substantially all of the Group’s net assets are located in the United Kingdom. The Directors therefore consider that the Group currently
operates in a single geographical segment, being the United Kingdom.
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www.centaurmedia.comFINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2 Segmental reporting continued
Revenue by type
The Group’s revenue from continuing operations by type is as follows:
Premium Content
Marketing Services
Training and Advisory
Events
Marketing and Advertising Solutions
Telemarketing Services
Xeim
2019
£m
11.0
4.3
7.6
4.2
4.3
9.3
40.7
The Lawyer
2019
£m
3.5
–
–
2.1
2.6
–
8.2
Total
2019
£m
14.5
4.3
7.6
6.3
6.9
9.3
Restated2
Xeim
2018
£m
11.2
Restated2
The Lawyer
2018
£m
3.2
Restated2
Total
2018
£m
14.4
4.5
8.0
4.7
4.6
9.6
–
–
1.8
2.7
–
7.7
4.5
8.0
6.5
7.3
9.6
50.3
48.9
42.6
2 See note 1 (a) for description of prior year restatement
The accounting policies for each of these revenue streams is disclosed in note 1 (e), including the timing of revenue recognition. There are
some contracts for which revenue has not yet been recognised and is being held in deferred income, see note 21. This deferred income is
all current and is expected to be recognised as revenue in 2020.
Other operating income
The Group’s other operating income from continuing operations by type is as follows:
Sale of goods and services
Rental income
Transitional services agreement income
2019
£m
0.8
0.8
1.6
2018
£m
0.8
–
0.8
Rental income relates to the sublease of part of the Group’s rented property in London. There is not expected to be income in respect of this
going forward as this property has been vacated in December 2019. See note 29 for further details.
Transitional services agreement income relates to services provided to the buyers of the Group companies disposed of during the year.
There is not expected to be income in respect of this going forward as all transitional services agreements have ceased during the year.
92
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
Adjusted
Results1
2019
£m
28.0
Adjusting
Items1
2019
£m
3.4
Statutory
Results
2019
£m
31.4
Restated2
Adjusted
Results1
2018
£m
30.3
Restated2
Adjusting
Items1
2018
£m
1.6
Restated2
Statutory
Results
2018
£m
31.9
3 Net operating expenses
Continuing operating loss is stated after charging:
Employee benefits expense
Depreciation of property, plant and
equipment
Impairment of property, plant and
equipment
Amortisation of intangible assets
Impairment of intangible assets
Impairment of goodwill
Loss on disposal of subsidiary (Venture
Business Research Limited)
Other exceptional operating costs
Property costs
Repairs and maintenance expenditure
Impairment of trade receivables
Share-based payment expense
Note
5
12
12
11
11
10
4
28
25
IT expenditure
Other staff related costs
Marketing expenditure
Other operating expenses
Cost of sales
Distribution costs
Administrative expenses
2.3
0.4
2.5
0.3
–
–
–
2.1
0.1
0.4
–
3.1
2.5
2.0
7.9
51.6
22.6
0.1
28.9
51.6
–
–
2.4
–
–
0.1
1.3
–
–
–
0.1
–
–
–
–
7.3
–
–
7.3
7.3
2.3
0.4
4.9
0.3
–
0.1
1.3
2.1
0.1
0.4
0.1
3.1
2.5
2.0
7.9
58.9
22.6
0.1
36.2
58.9
0.9
–
2.7
–
–
–
–
3.3
0.1
0.2
–
3.1
2.5
2.1
8.1
53.3
19.6
0.1
33.6
53.3
1 Adjusted results exclude adjusting items, as detailed in note 1 (b)
2 See note 1 (a) for description of prior year restatement
Services provided by the Company’s auditor
Fees payable to the Company’s auditor for the audit of the Company and consolidated financial
statements
Fees payable to the Company’s auditor and its associates for other services:
The audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
Audit related assurance services
Total non-audit fees
Total fees
–
–
2.5
–
12.8
–
0.4
–
–
–
0.8
–
–
–
–
18.1
–
–
18.1
18.1
2019
£’000
238
44
282
22
22
304
0.9
–
5.2
–
12.8
–
0.4
3.3
0.1
0.2
0.8
3.1
2.5
2.1
8.1
71.4
19.6
0.1
51.7
71.4
2018
£’000
214
58
272
25
25
297
Fees payable to the Company’s auditor for the audit of the Company and consolidated financial statements include non-recurring fees of
£72,000 (2018: £34,000).
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www.centaurmedia.comFINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
4 Adjusting items
As discussed in note 1(b), certain items are presented as adjusting. These are detailed below:
Continuing operations
Exceptional operating costs
Staff related restructuring costs (including external employment advice costs)
Costs relating to strategic corporate restructuring initiatives
Divestment programme related costs
Exceptional operating costs
Impairment of goodwill
Amortisation of acquired intangible assets
Share-based payment expense
Loss on disposal of subsidiary
Adjusting items to profit before tax
Tax relating to adjusting items
Total adjusting items after tax for continuing operations
Discontinued operations
Profit on disposal of subsidiaries
Exceptional costs
Impairment of goodwill
Amortisation of acquired intangible assets
Tax relating to adjusting items
Total adjusting items after tax for discontinued operations
Total adjusting items after tax
2See note 1 (a) for description of prior year restatement
Note
5
10
11
25
8,14
7
8,14
8
10
11
7
2019
£m
Restated2
2018
£m
2.5
–
2.2
4.7
–
2.4
0.1
0.1
7.3
(1.2)
6.1
(7.8)
0.1
–
0.1
–
(7.6)
(1.5)
0.4
0.3
1.3
2.0
12.8
2.5
0.8
–
18.1
(0.7)
17.4
(0.1)
0.5
0.3
0.3
(0.2)
0.8
18.2
Exceptional costs
Staff related restructuring costs (including external employment advice costs)
In the current year staff related restructuring costs of £2.4m related to the Group’s cost reduction plan following the completion of the
divestment programme in 2019 and £0.1m of related external employment advice. During 2018 staff related restructuring costs of £0.2m
related to the closure of the E-consultancy Asia Pacific office, £0.1m related to restructuring of the Xeim portfolio and £0.1m related to the
restructuring of the in-house production function.
Costs relating to strategic corporate restructuring initiatives
In the prior year these relate to professional fees for the corporate simplification programme to restructure the Group ahead of the
divestment programme announced in October 2018.
Divestment programme related costs
In both the current and the prior year divestment programme related costs include professional fees incurred relating to the sales process for
The Lawyer of £1.2m (2018: £0.1m) and management incentives of £1.0m (2018: £1.2m) related to that programme. These management
incentives sit in ‘Employee benefits expense’ in Note 3 along with staff related restructuring costs (excluding external employment advice
costs).
Other adjusting items
Other adjusting items relate to the amortisation of acquired intangible assets (see note 11) and share-based payment costs (see note 25) as
well as the items discussed below:
Goodwill impairment
In the prior year, an impairment of £13.1m (£12.8m and £0.3m in continuing and discontinued operations respectively) has been recognised
against goodwill primarily relating to events to be closed and other businesses within the Xeim portfolio. See note 10 for further details.
Loss / profit on disposal of subsidiaries
In the current year the loss on disposal of a subsidiary in continuing operations of £0.1m related to the disposal of Venture Business
Research Limited (‘VBR’). This is not presented in discontinued operations as it does not represent a separate major line of business and
therefore has been included in continuing operations.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
The profit on disposal of subsidiaries in discontinued operations relates to the subsidiaries sold in the divestment programme. See note 14
for further details. In the prior year £0.1m profit on disposal arose in relation to the 2017 disposal of the Group’s Home Interest segment
following the agreement of final completion accounts.
5 Directors and employees
Wages and salaries
Social security costs
Other pension costs
Adjusted staff costs
Exceptional staff related restructuring costs (excluding
external employment advice costs)
Equity-settled share-based payments
Note
4
25
2019
Group
£m
25.3
2.9
0.8
29.0
2.4
0.1
31.5
Restated2
2018
Group
£m
27.6
3.1
0.8
31.5
0.4
0.8
32.7
2019
Company
£m
1.4
2018
Company
£m
1.0
0.1
0.1
1.6
0.8
0.1
2.5
0.2
0.1
1.3
–
0.8
2.1
2 See note 1 (a) for description of prior year restatement
The staff costs presented above are for continuing operations and exclude all staff costs relating to the disposed subsidiaries as specified in
note 14, which are presented in discontinued operations.
The average monthly number of employees employed during the year, including Directors, was:
Xeim
The Lawyer
Central
Discontinued
2019
Group
Number
514
52
10
85
661
2018
Group
Number
605
2019
Company
Number
–
2018
Company
Number
–
55
10
88
758
–
4
–
4
–
4
–
4
With the exception of MarketMakers, a brand under Xeim, the Group’s employees have contracts of service with Centaur Communications
Limited and are paid by Chiron Communications Limited, both of which are Group companies. As the employees provide services to the
Company, their costs are recharged and the relevant disclosures are made in the financial statements. The MarketMakers’ employees are
employed and paid by MarketMakers Incorporated Limited.
Key management compensation
Salaries and short-term employment benefits
Termination benefits
Post-employment benefits
Share-based payments
Key management is defined as the Executive Directors and Executive Committee members.
Aggregate Directors’ remuneration
Salaries, fees, bonuses and benefits in kind
Termination benefits
Charge under long term incentive schemes
Post-employment benefits
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Proof Number 5
2019
£m
2.9
0.4
0.1
–
3.4
2019
£m
1.8
0.4
–
0.1
2.3
2018
£m
1.8
0.1
0.1
0.6
2.6
2018
£m
0.9
–
0.3
0.1
1.3
95
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www.centaurmedia.comFINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
5 Directors and employees continued
Highest paid Director’s remuneration
Salaries, fees, bonuses and benefits in kind
Termination benefits
Charge under long-term incentive schemes
2019
£m
0.8
0.4
–
1.2
2018
£m
0.4
–
0.2
0.6
No Directors exercised share options during the current or prior year. One Directors was paid compensation in respect of loss of office
during the year (2018 – Nil). Further details of Directors’ remuneration are included in the Remuneration Committee Report between pages
45 to 61.
6 Finance costs
Interest payable on revolving credit facility
Commitment fees and amortisation of arrangement fee in respect of revolving credit facility
Lease interest
Total finance costs
Note
20
2019
£m
–
0.2
0.1
0.3
2018
£m
–
0.2
–
0.2
Interest and fees on revolving credit facility
These finance costs are in relation to the £25m revolving credit facility, none of which is drawn-down at 31 December 2019 (2018: £nil).
As indicated by the consolidated cash flow statement, all draw-downs from this facility during the year were also repaid within the year.
Finance costs in relation to this facility resulted in cash outflows by the Company and Group of £0.2m during the year (2018: £0.4m).
Lease interest
On the adoption of IFRS 16 on 1 January 2019, lease liabilities were recognised for the Group’s property lease arrangements. £0.1m of
interest on these leases was incurred during the year. There was no interest on lease liabilities in the prior year when these leases were
accounted for under IAS 17 as operating leases. Please refer to notes 1 (a) and 20 for further details.
7 Taxation
Note
22
15
Analysis of charge for the year
Current tax
UK Corporation Tax
Overseas tax
Deferred tax
Current period
Adjustments in respect of prior
years
Taxation (credit) / charge
2019
Continuing
£m
2019
Discontinued
£m
2019
Total
£m
2018
Continuing
£m
2018
Discontinued
£m
–
–
–
(0.8)
0.1
(0.7)
(0.7)
0.6
–
0.6
0.1
(0.1)
–
0.6
0.6
–
0.6
(0.7)
–
(0.7)
(0.1)
(0.6)
0.3
(0.3)
(0.7)
(0.1)
(0.8)
(1.1)
1.4
–
1.4
(0.2)
–
(0.2)
1.2
2018
Total
£m
0.8
0.3
1.1
(0.9)
(0.1)
(1.0)
0.1
96
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
The tax charge for the year can be reconciled to the (loss) / profit in the statement of comprehensive income as follows:
(Loss) / profit before tax
Tax at the UK rate of corporation tax of
19.00% (2018: 19.00%)
Effects of:
Expenses not deductible for tax
purposes
Profit on disposal
Effects of changes in tax rate on
deferred tax balances
Deferred tax adjustment on business
disposal
Deferred tax not recognised
Adjustments in respect of prior years
Different tax rates of subsidiaries in
other jurisdictions
2019
Continuing
£m
(8.7)
2019
Discontinued
£m
10.5
(1.6)
2.0
0.7
–
0.1
0.1
–
–
–
–
(1.5)
–
0.1
–
–
–
2019
Total
£m
1.8
0.4
0.7
(1.5)
0.1
0.2
–
–
–
Taxation (credit) / charge
(0.7)
0.6
(0.1)
2018
Continuing
£m
(20.5)
2018
Discontinued
£m
6.4
(3.9)
1.2
2.7
–
–
–
0.1
(0.1)
0.1
(1.1)
–
–
–
–
–
–
–
1.2
2018
Total
£m
(14.1)
(2.7)
2.7
–
–
–
0.1
(0.1)
0.1
0.1
The Finance Act 2015 included legislation to reduce the rate of corporation tax from 20% to 19% from 1 April 2017 and to 17% from 1 April
2020. This change had been substantively enacted at the balance sheet date. The government has announced that the rate of corporation
tax will not be reduced from 1 April 2020 and that it will remain at 19%, but this has not yet been enacted and therefore, the Group’s
deferred tax balances continue to be recorded at 17%.
A reconciliation between the reported tax expense and the adjusted tax expense taking account of adjusting items as discussed in note 1(b)
and 4 is shown below:
Reported tax (credit) / expense
Effects of:
Amortisation of acquired intangible
assets
Share-based payments
Exceptional expenses
Adjusted tax expense / (credit)
2019
Continuing
£m
(0.7)
2019
Discontinued
£m
0.6
0.5
–
0.7
0.5
–
–
–
0.6
2019
Total
£m
(0.1)
0.5
–
0.7
1.1
2018
Continuing
£m
(1.1)
2018
Discontinued
£m
1.2
0.3
0.1
0.3
(0.4)
0.1
–
0.1
1.4
2018
Total
£m
0.1
0.4
0.1
0.4
1.0
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www.centaurmedia.comFINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
8 Discontinued operations
In the current year, the Group disposed of the following subsidiaries:
• Centaur Financial Platforms Limited (‘FIN’) on 31 March 2019;
• Centaur Media Travel and Meetings Limited (‘T&M’) on 30 April 2019;
• Centaur Human Resources Limited (‘HR’) on 30 April 2019; and
• Centaur Engineering Limited (‘ENG’) on 31 May 2019.
The disposals were effected in line with the Group’s strategy to simplify its structure, to improve operational execution and to focus attention
on leading brands.
A profit of £7.8m arose on the disposal of these subsidiaries being the difference between the proceeds of disposals and the carrying
amount of the subsidiaries’ net assets and attributable goodwill, less transaction costs. Details of these disposals can be found in note 14.
In addition to the above named subsidiaries, the Group disposed of its Venture Business Research Limited (‘VBR’) subsidiary on 13 May
2019 to an employee of VBR. A loss on disposal of £0.1m arose on this disposal as detailed in note 14. The loss on disposal, as well as the
operational results of VBR have not been included in discontinued operations as it does not represent a separate major line of business and
these have therefore been included in continuing operations.
In the prior year £0.1m profit on disposal arose in relation to the 2017 disposal of the Group’s Home Interest segment (‘HI’) following the
agreement of final completion accounts.
The results of the discontinued operations, which were included in the consolidated statement of comprehensive income and consolidated
cash flow statement, were as follows:
FIN
T&M
HR
ENG
HI
Total
FIN
T&M
HR
ENG
HI
Total
Statement of
comprehensive income
Revenue
Expenses
(Loss) / profit on disposal
Profit before tax
Attributable tax expense
Statutory profit after tax
Loss / (profit) on disposal
Exceptional costs
Impairment of goodwill
Amortisation of acquired
intangible assets
Tax relating to adjusting items1
Total adjusting items1
Adjusted profit1 attributable
to discontinued operations
Year ended
31 December 2019
£m
3.8
(2.2)
3.0
4.6
(0.3)
4.3
(3.0)
–
–
–
–
0.7
(0.6)
3.8
3.9
(0.1)
3.8
(3.8)
0.1
–
–
–
0.4
(0.4)
1.8
1.8
–
1.8
(1.8)
–
–
–
–
(3.0)
(3.7)
(1.8)
2.1
(1.1)
(0.8)
0.2
(0.2)
–
0.8
–
–
0.1
–
0.9
0.9
1.3
0.1
–
Year ended
31 December 2018
£m
6.4
(4.8)
–
1.6
(0.3)
1.3
–
0.1
–
–
–
0.1
3.2
(2.2)
–
1.0
(0.2)
0.8
–
0.1
–
0.1
–
0.2
2.3
(1.5)
–
0.8
(0.1)
0.7
–
–
–
–
–
–
–
–
20.2
(13.9)
0.1
0.1
–
0.1
(0.1)
–
–
–
–
(0.1)
0.1
6.4
(1.2)
5.2
(0.1)
0.5
0.3
0.3
(0.2)
0.8
7.0
(4.3)
7.8
10.5
(0.6)
9.9
(7.8)
0.1
–
0.1
–
(7.6)
8.3
(5.4)
–
2.9
(0.6)
2.3
–
0.3
0.3
0.2
(0.2)
0.6
2.3
2.9
1.4
1.0
0.7
–
6.0
–
–
–
–
–
–
–
–
–
–
–
–
–
Cash flows
Operating cash flows
Investing cash flows
Financing cash flows
Total cash flows
FIN
T&M
HR
ENG
HI
Total
FIN
T&M
HR
ENG
HI
Total
Year ended
31 December 2019
£m
0.6
0.3
0.4
0.4
–
–
–
–
–
–
–
–
0.6
0.3
0.4
0.4
–
–
–
–
1.7
–
–
1.7
–
–
–
–
Year ended
31 December 2018
£m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Adjusted results exclude adjusting items, as detailed in note 1 (b)
The attributable tax expense stated in the table above is derived from the profit of discontinued operations. No income tax expense arose on
the profit or loss on disposals.
98
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 9 Earnings/(loss) per share
Basic earnings per share (‘EPS’) is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number
of shares in issue during the year. 1,573,134 (2018: 857,991) shares held in the employee benefit trust and 6,964,613 (2018: 6,964,613)
shares held in treasury have been excluded in arriving at the weighted average number of shares.
For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially
dilutive ordinary shares. This comprises share options and awards (including those granted under the share save plan) granted to Directors
and employees where the exercise price is less than the average market price of the Company’s ordinary shares during the year.
Basic and diluted earnings per share have also been presented on an adjusted continuing and discontinued basis, as the Directors believe
that these measures are more reflective of the underlying performance of the Group. These have been calculated as follows:
2019
Earnings
/ (Loss)
attributable
to owners of
the parent
£m
2019
Weighted
average
number of
shares
millions
2019
Earnings /
(Loss) per
share
Pence
Note
Restated2
2018
Earnings
/ (Loss)
attributable to
owners of the
parent
£m
Restated2
2018
Weighted
average
number of
shares
millions
Restated2
2018
Earnings /
(Loss) per
share
Pence
Basic
Continuing operations
Continuing and discontinued operations
Effect of dilutive securities
Options: Continuing operations
Options: Continuing and discontinued
operations
Diluted
Continuing operations
Continuing and discontinued operations
Adjusted1
Continuing operations
Basic
Other exceptional costs
Impairment of goodwill
Amortisation of acquired intangibles
Share-based payments
Loss on disposal of subsidiary
Tax effect of above adjustments
Discontinued operations
Basic
Profit on disposal of subsidiaries
Other exceptional costs
Impairment of goodwill
Amortisation of acquired intangibles
Tax effect of above adjustment
Adjusted1 basic
Continuing operations
Continuing and discontinued operations
Effect of dilutive securities
Options: Continuing operations
Options: Continuing and discontinued
operations
Adjusted1 diluted
Continuing operations
Continuing and discontinued operations
4
10
11
25
14
7
14
4
10
11
7
(8.0)
1.9
142.8
142.8
–
–
(8.0)
1.9
(8.0)
4.7
–
2.4
0.1
0.1
(1.2)
9.9
(7.8)
0.1
–
0.1
–
(1.9)
0.4
–
–
–
8.1
142.8
150.9
142.8
–
–
–
–
–
–
142.8
–
–
–
–
–
142.8
142.8
–
8.1
(1.9)
0.4
142.8
150.9
(5.6)
1.3
–
–
(5.6)
1.3
(5.6)
3.3
–
1.7
0.1
0.1
(0.9)
6.9
(5.5)
0.1
–
0.1
–
(1.3)
0.3
–
–
(1.3)
0.3
(19.4)
(14.2)
143.9
143.9
(13.5)
(9.9)
–
–
(19.4)
(14.2)
(19.4)
2.0
12.8
2.5
0.8
–
(0.7)
5.2
(0.1)
0.5
0.3
0.3
(0.2)
(2.0)
4.0
–
–
(2.0)
4.0
–
–
–
–
143.9
143.9
(13.5)
(9.9)
143.9
(13.5)
–
–
–
–
–
–
143.9
–
–
–
–
–
143.9
143.9
1.4
8.9
1.7
0.6
–
(0.5)
3.6
(0.1)
0.4
0.2
0.2
(0.1)
(1.4)
2.8
–
–
10.8
(0.2)
143.9
154.7
(1.4)
2.6
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www.centaurmedia.comFINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
9 Earnings/(loss) per share continued
Adjusted
Results1
2019
£m
Adjusted
Items1
2019
£m
Statutory
Results
2019
£m
Restated2
Adjusted
Results1
2018
£m
Restated2
Adjusted
Items1
2018
£m
Restated2
Statutory
Results
2018
£m
(1.3p)
1.6p
(4.3p)
5.3p
(5.6p)
6.9p
(1.4p)
4.0p
(12.1p)
(0.4p)
(13.5p)
3.6p
0.3p
1.0p
1.3p
2.6p
(12.5p)
(9.9p)
Earnings / (loss) per share attributable
to owners of the parent
Fully diluted from continuing operations
Fully diluted from discontinued operations
Fully diluted from continuing and
discontinued
1 Adjusted results exclude adjusting items, as detailed in note 1 (b)
2 See note 1 (a) for description of prior year restatement
In 2019 and 2018, there was no difference in the weighted average number of shares used for the calculation of basic and diluted loss per
share for continuing operations as the effect of all potentially dilutive shares outstanding was anti-dilutive.
10 Goodwill
Cost
At 1 January 2018
Additions in the year
At 31 December 2018
Disposal of subsidiaries
At 31 December 2019
Accumulated impairment
At 1 January 2018
Impairment for the year
At 31 December 2018
Disposal of subsidiaries
At 31 December 2019
Net book value
At 31 December 2019
At 31 December 2018
Note
14
14
Group
£m
159.4
0.1
159.5
(48.4)
111.1
83.8
13.1
96.9
(38.0)
58.9
52.2
62.6
Additions in the prior year relate to the additional consideration paid for the acquisition of MarketMakers in 2017 following the finalisation of
contingent consideration paid during the year.
In the prior year, the largest adjusting item of £12.8m relates to the impairment of goodwill which primarily related to events to be closed and
other businesses within the Xeim portfolio. Following a review of expected cash flows from the Financial Services portfolio, the carrying value
of its goodwill was impaired by £0.3m.
Disposals in the current year relate to the disposal of Centaur Financial Platforms Limited (net book value £4.8m), Centaur Media Travel and
Meeting Limited (net book value £5.6m), Centaur Human Resources Limited (net book value £nil) and Centaur Engineering Limited (net book
100
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
value £nil). See note 14 for further details.
Goodwill by segment
Each brand is deemed to be a Cash Generating Unit (‘CGU’), being the lowest level at which cash flows are separately identifiable.
Goodwill is attributed to individual CGUs and has historically been reviewed at the operating segment level for the purposes of the annual
impairment review as this is the level at which management monitors goodwill. In light of our simplification plan, Financial Services and Other
Professional segments have been disposed of and the remaining segments are Xeim and The Lawyer:
At 1 January 2018
Additions
Impairment charge
At 31 December 2018
Disposal of subsidiaries
At 31 December 2019
Note
14
Xeim
£m
48.9
0.1
(12.8)
36.2
–
36.2
The Lawyer
£m
16.0
Financial
Services
£m
5.1
Other
Professional
£m
5.6
–
–
16.0
–
16.0
–
(0.3)
4.8
(4.8)
–
–
–
5.6
(5.6)
–
Total
£m
75.6
0.1
(13.1)
62.6
(10.4)
52.2
Impairment testing of goodwill and acquired intangible assets
At 31 December 2019, goodwill and acquired intangible assets (see note 11) were tested for impairment in accordance with IAS 36. In
assessing whether a write-down of goodwill and acquired intangible assets is required, the carrying value of the segment is compared with
its recoverable amount. Recoverable amounts are measured based on value-in-use (‘VIU’).
The Group estimates the VIU of its CGUs using a discounted cash flow model, which adjusts the cash flows for risks associated with the
assets and discounts these using a pre-tax rate of 12.8% (2018: 11.3%). The discount rate used is consistent with the Group’s weighted
average cost of capital and is used across all segments, which are all based predominantly in the UK and considered to have similar risks
and rewards.
The key assumptions used in calculating VIU are revenue growth, margin, adjusted EBITDA growth, discount rate and the terminal growth
rate. The Group has used formally approved forecasts for the first three years of the calculation and applied a terminal growth rate of 2.5%
(2018: 2.5%). This timescale and the terminal growth rate are both considered appropriate given the cyclical nature of the Group’s revenues.
The assumptions used in the calculations of VIU for each segment have been derived based on a combination of past experience and
management’s expectations of future growth rates in the business. The forecasts have been prepared following a review of the business
where management have identified the key growth and focus areas which will deliver the targets, and conversely which areas of the
business will be de-prioritised over that period. The forecasts reflect the transformed Group which is more focussed and streamlined in order
to deliver higher margins and profits.
In the prior year, before impairment testing, goodwill of £48.9m, £21.6m and £5.1m was allocated to the Xeim, Professional, and Financial
Services segments respectively. Prior to a full impairment test, the goodwill of each segment was reviewed. This led to an impairment
in 2018 of £12.8m to be recognised in Xeim primarily related to events to be closed and other businesses within the portfolio, and an
impairment of £0.3m in the Financial Services segment following a review of expected cash flows.
In the current year the goodwill and acquired intangible assets carrying values of the two continuing segments, Xeim and The Lawyer, have
been compared with their recoverable amount in the impairment tests. The forecast used in the calculation is the Group’s MAP22 plan which
is discussed in the Strategic Report. The key assumptions and variables in this plan are sensitised in isolation and in combination. The main
sensitivities applied to the key drivers are outlined below.
Sensitivity analysis has been performed on the VIU calculations, holding all other variables constant, to:
(i) apply a 10% reduction to forecast adjusted EBITDA in each year of the modelled cash flows. No impairment would occur in either of the
segments.
(ii) apply a 1% increase in discount rate from 12.8% to 13.8%. No impairment would occur in either of the segments.
(iii) reduce the terminal value growth rate from 2.5% to 1.5%. No impairment would occur in either of the segments.
A key sensitivity is EBITDA growth in both Xeim and The Lawyer, which is driven by a combination of segment profit growth and the Group’s
disclosed annualised overhead cost savings target of £5m. As the Group has already achieved the run-rate savings for this target by the end
of December 2019, further sensitivities have been performed only over the profitable revenue growth from Xeim and The Lawyer:
Xeim – In the base case the CAGR of EBITDA for the forecast period of 2019 to 2022 is 16%. VIU exceeds the carrying amount by £29.2m.
EBITDA CAGR would have to fall by 9% to 7% in order for the VIU to equal the carrying amount.
The Lawyer – In the base case the CAGR of EBITDA for the forecast period of 2019 to 2022 is 12%. VIU exceeds the carrying amount by
£13.8m. EBITDA CAGR would have to fall by 12% to nil in order for the VIU to equal the carrying amount
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www.centaurmedia.comFINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
11 Other intangible assets
Cost
At 1 January 2018
Additions - separately acquired
Additions - internally generated
At 31 December 2018
Additions - separately acquired
Additions - internally generated
Disposal of subsidiaries
At 31 December 2019
Accumulated amortisation
At 1 January 2018
Amortisation charge for the year
At 31 December 2018
Amortisation charge for the year
Impairment charge for the year
Disposals of subsidiaries
At 31 December 2019
Net book value at 31 December 2019
Net book value at 31 December 2018
Net book value at 1 January 2018
Computer
software*
£m
Note
Brands and
publishing
rights*
£m
Customer
relationships*
£m
Separately
acquired
websites and
content*
£m
14
14
16.1
1.8
0.7
18.6
0.8
0.4
(1.2)
18.6
9.5
2.9
12.4
2.6
0.3
(1.1)
14.2
4.4
6.2
6.6
5.6
–
–
5.6
–
–
(3.5)
2.1
1.9
0.4
2.3
0.3
–
(1.7)
0.9
1.2
3.3
3.7
15.4
–
–
15.4
–
–
(2.4)
13.0
7.2
2.2
9.4
2.1
–
(1.9)
9.6
3.4
6.0
8.2
4.7
–
–
4.7
–
–
(1.5)
3.2
4.6
0.1
4.7
–
–
(1.5)
3.2
–
–
0.1
Total
£m
41.8
1.8
0.7
44.3
0.8
0.4
(8.6)
36.9
23.2
5.6
28.8
5.0
0.3
(6.2)
27.9
9.0
15.5
18.6
* Amortisation on acquired intangible assets from business combinations is presented as an adjusting item in note 4 (see note 1(b) for further information). Total amortisation of £2.5m
(2018: £2.8m) on such assets is all amortisation on assets in the asset groups ‘Brands and publishing rights’, ‘Customer relationships’ and ‘Separately acquired websites and content’
of £2.4m (2018: £2.7m) in addition to £0.1m (2018: £0.1m) of amortisation on acquired intangible assets in the asset group ‘Computer software’. These total amounts have been split
between continuing and discontinued operations in note 4.
Amortisation and impairment of intangible assets is included in net operating expenses in the statement of comprehensive income.
The amortisation charge in continuing operations is £4.9m (2018: £5.2m) and in discontinued operations is £0.1m (2018: £0.4m). The
impairment charge for the year is wholly in continuing operations and relates to obsolete software.
Other intangible assets are tested annually for impairment in accordance with IAS 36 at a segment level by comparing the carrying value
with its recoverable amount. Please see note 10 for further details.
The Company has no intangible assets (2018: £nil).
102
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
12 Property, plant and equipment
Leasehold
improvements
£m
Fixtures
and fittings
£m
Note
Computer
equipment
£m
ROU assets -
property
Cost
At 1 January 2018
Additions - separately acquired
At 31 December 2018
Recognised on adoption of IFRS 16 (1
January 2019)
Additions - separately acquired
At 31 December 2019
Accumulated depreciation
At 1 January 2018
Depreciation charge for the year
At 31 December 2018
Depreciation charge for the year
Impairment charge for the year
At 31 December 2019
Net book value at 31 December 2019
Net book value at 31 December 2018
Net book value at 1 January 2018
2.2
–
2.2
–
–
2.2
1.3
0.3
1.6
0.4
0.2
2.2
–
0.6
0.9
0.6
0.1
0.7
–
–
0.7
0.3
0.2
0.5
0.1
–
0.6
0.1
0.2
0.3
1.3
0.4
1.7
–
0.2
1.9
0.8
0.4
1.2
0.2
–
1.4
0.5
0.5
0.5
–
–
–
2.3
3.2
5.5
–
–
–
1.6
0.2
1.8
3.7
–
–
Total
£m
4.1
0.5
4.6
2.3
3.4
10.3
2.4
0.9
3.3
2.3
0.4
6.0
4.3
1.3
1.7
Depreciation and impairment of property, plant and equipment is included in net operating expenses in the statement of comprehensive
income.
The depreciation and impairment charge for the year is wholly in continuing operations. The impairment relates to leasehold improvements in
the Wells Street office which was vacated by December 2019.
The Company has no property, plant and equipment at 31 December 2019 (2018: £nil).
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www.centaurmedia.comFINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
13 Investments
Company
Cost
At 1 January 2018
Transfer from amounts receivable from subsidiaries
At 31 December 2018 and 31 December 2019
Accumulated impairment
At 1 January 2018
Impairment charge for the year
At 31 December 2018
Impairment charge for the year
At 31 December 2019
Net book value at 31 December 2019
Net book value at 31 December 2018
Net book value at 1 January 2018
Investments
in subsidiary
undertakings
£m
146.2
4.9
151.1
12.2
13.1
25.3
35.7
61.0
90.1
125.8
134.0
Following an internal corporate restructure in the prior year, £4.9m of intercompany balances due from subsidiaries of Centaur Media plc
were capitalised.
Impairment testing of the investment
In assessing whether an impairment of the investment is required, the carrying value of the investment is compared with its recoverable
amount. The recoverable amount is measured based on value-in-use (‘VIU’). As outlined in the tables below the carrying value of the
investment represents the Company’s direct ownership of Centaur Communications Limited (‘CCL’). CCL in turn directly or indirectly controls
the rest of the Group’s subsidiaries. Therefore, the VIU of the Company’s investment in CCL is supported by the operations of the entire
Group.
In the prior year the Company impaired its investment following an impairment test which identified the VIU no longer supported the carrying
value of the investment. After this impairment at 31 December 2018, the carrying value of the investment was fully supported by the future
cash flows of all the subsidiaries owned by the Group at that date.
In the current year, due to the disposals of the Group’s subsidiaries noted below, the Group’s cash flows and therefore its VIU was reduced.
This was identified as an indication of impairment of the Company’s investment carrying value and a full impairment assessment was carried
out. An impairment of £35.7m was identified and recognised in the Company’s statement of comprehensive income. The remaining balance
is supported by the underlying trade of the Group.
The Group estimates the VIU using a discounted cash flow model, which adjusts the cash flows for risks associated with the assets and
discounts these using a pre-tax rate of 12.8% (2018: 11.3%). The discount rate used is consistent with the Group’s weighted average cost
of capital.
The key assumptions used in calculating VIU are revenue growth, margin, adjusted EBITDA growth, discount rate and the terminal growth
rate. The Group has used formally approved forecasts for the first three years of the calculation and applied a terminal growth rate of 2.5%
(2018: 2.5%). This timescale and the terminal growth rate are both considered appropriate given the cyclical nature of the Group’s revenues.
The assumptions used in the calculations of VIU have been derived based on a combination of past experience and management’s
expectations of future growth rates in the business. The forecasts have been prepared following a review of the business where
management have identified the key growth and focus areas which will deliver the targets, and conversely which areas of the business will
be de-prioritised over that period. The forecasts reflect the transformed Group which is more focussed and streamlined in order to deliver
higher margins and profits. Sensitivities are applied to each of the key assumptions and variables in isolation and in combination, in line with
those sensitivities applied for goodwill impairment testing as outlined in note 10.
EBITDA growth is driven by a combination of profit growth and the Group’s disclosed annualised overhead cost savings target of £5m.
As the Group has already achieved the run-rate savings for this target by the end of December 2019, further sensitivities have been
performed only over the profitable revenue growth from Xeim and The Lawyer. In the forecast applied to derive the VIU which had resulted
in the impairment noted above, EBITDA CAGR for the Group is 11%. If the EBITDA CAGR for the Group were to fall by 5% to 6% then the
additional impairment indicated would be £22.6m.
104
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
The Group disposed of its interest in the following subsidiaries during the year:
Name
Centaur Engineering Limited
Centaur Financial Platforms Limited
Centaur Human Resources Limited
Centaur Media Travel and Meetings
Limited
Venture Business Research Limited
Proportion of ordinary
shares and voting
rights held (%)
100
100
100
100
100
Principal activities
Other publishing activities
Country of
incorporation
United Kingdom
Date of disposal
31 May 2019
Research data and analysis
United Kingdom
31 March 2019
Events and information services
United Kingdom
30 April 2019
Other publishing activities
United Kingdom
30 April 2019
Research data and analysis
United Kingdom
13 May 2019
The net profit on disposals of these subsidiaries was £7.7m (£0.1m loss on the disposal of VBR and £7.8m profit on the disposal of the
other four subsidiaries). See note 14 for further details.
At 31 December 2019, the Group has control over the following subsidiaries:
Name
Centaur Communications Limited1
Centaur Media USA Inc.2
Centaur Newco 2018 Limited
Chiron Communications Limited
E-consultancy Asia Pacific Pty Limited3
E-consultancy Australia Pty Limited4
E-consultancy LLC5
E-consultancy.com Limited
MarketMakers Incorporated Limited6
Mayfield Publishing Limited
Pro-talk Ltd
Taxbriefs Holdings Limited
Taxbriefs Limited
Thelawyer.com Limited
Xeim Limited
Your Business Magazine Limited
1 Directly owned by Centaur Media Plc
Proportion of
ordinary shares
and voting rights
held (%)
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Principal activities
Holding company and agency services
Country of
incorporation
United Kingdom
Digital information, training and events
United States
Media representation services
United Kingdom
Digital information, training and events
United Kingdom
Digital information, training and events
Dormant
Singapore
Australia
Digital information, training and events
United States
Digital information, training and events
United Kingdom
Telemarketing and Research
United Kingdom
Investment company
United Kingdom
Digital Publishing
United Kingdom
Holding company
United Kingdom
Digital and print publishing
United Kingdom
Publishing of consumer and business journals and
periodicals
United Kingdom
Digital information services
United Kingdom
Investment company
United Kingdom
2 Registered address is 2711 Centerville Road, Suite 400 Wilmington, DE19808, USA. Functional currency is USD.
3 Registered address is 30 Cecil Street, #19-08 Prudential Tower, Singapore 049712. Functional currency is USD.
4 Registered address is Level 17, 383 Kent Street, Sydney, NSW, 2000, Australia. Functional currency is AUD.
5 Registered address is 41 East, 11 Street, 11FI, New York, NY 10003, USA. Functional currency is USD.
6 Registered address is 1000 Lakeside North Harbour Western Road, Portsmouth, Hampshire, PO6 3EN
The registered address of all subsidiary companies, with the exception of those identified above, changed from 79 Wells Street, London,
W1T 3QN, United Kingdom to Floor M, 10 York Road, London, SE1 7ND, United Kingdom on 2 December 2019. The functional currency
of all subsidiaries is GBP except for those identified above. The consolidated financial statements incorporate the financial statements of all
entities controlled by the Company at 31 December 2019.
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www.centaurmedia.comFINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
14 Disposal of subsidiaries
In the current year the Group disposed of the following subsidiaries:
• Centaur Financial Platforms Limited (‘FIN’) on 31 March 2019;
• Centaur Media Travel and Meetings Limited (‘T&M’) on 30 April 2019;
• Centaur Human Resources Limited (‘HR’) on 30 April 2019; and
• Centaur Engineering Limited (‘ENG’) on 31 May 2019.
The disposals were effected in line with the Group’s strategy to simplify its structure, to improve operational execution and to focus attention
on leading brands. All disposals were executed by way of sale of 100% of the equity shares. The results of these subsidiaries have been
included in discontinued operations as detailed in note 8.
The net assets of the subsidiaries at the date of disposal were as follows:
Goodwill
Other intangible assets
Inventories
Trade and other receivables
Intercompany
Cash and cash equivalents
Trade and other payables
Deferred income
Current tax liability
Net assets/(liabilities) disposed attributable to
Shareholders of the Company
Directly attributable costs of disposal
(Loss) / gain on disposal
Fair value of consideration
Satisfied by:
Cash and cash equivalents
Settlement of intercompany balances
The net cash flow arising on the disposals was as follows:
Net cash flow arising on disposal:
Consideration received in cash and cash equivalents
Less:
Directly attributable costs of disposal
Cash and cash equivalents disposed of
FIN
31 March
2019
£m
4.8
T&M
30 April
2019
£m
5.6
HR
30 April
2019
£m
–
ENG
31 May
2019
£m
–
1.1
–
1.0
1.3
0.6
(0.8)
(1.3)
(0.1)
6.6
0.8
(0.8)
6.6
5.3
1.3
6.6
–
1.2
1.1
2.2
0.3
(0.6)
(2.9)
(0.3)
6.6
0.6
3.0
10.2
8.0
2.2
10.2
1.1
0.1
0.4
0.7
0.4
(0.4)
(1.0)
–
1.3
0.6
3.8
5.7
5.0
0.7
5.7
FIN
31 March
2019
£m
T&M
30 April
2019
£m
HR
30 April
2019
£m
5.3
(0.6)
(0.6)
4.1
8.0
(0.6)
(0.3)
7.1
5.0
(0.6)
(0.4)
4.0
–
0.4
0.2
–
0.4
(0.1)
(1.2)
–
(0.3)
0.6
1.8
2.1
2.1
–
2.1
ENG
31 May
2019
£m
2.1
(0.5)
(0.4)
1.2
Total
£m
10.4
2.2
1.7
2.7
4.2
1.7
(1.9)
(6.4)
(0.4)
14.2
2.6
7.8
24.6
20.4
4.2
24.6
Total
£m
20.4
(2.3)
(1.7)
16.4
In addition to the above named subsidiaries, the Group disposed of its Venture Business Research Limited (‘VBR’) subsidiary on 13 May
2019 to an employee of VBR for £1 settled by cash and £31k settlement of intercompany balances. Net assets of £0.2m, consisting wholly
of other intangible assets were disposed of, resulting in a loss of £0.1m.
The loss on disposal, as well as the operational results of VBR have not been included in discontinued operations as it does not represent a
separate major line of business and these have therefore been included in continuing operations.
In the prior year £0.1m profit on disposal arose in relation to the 2017 disposal of the Group’s Home Interest segment (‘HI’) following the
agreement of final completion accounts.
106
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 15 Deferred tax
The movement on the deferred tax account is shown below:
Net asset / (liability) at 1 January 2018
Adjustments in respect of prior period
Recognised in the statement of comprehensive income
Net asset / (liability) at 31 December 2018
Recognised in the statement of comprehensive income
Net asset / (liability) at 31 December 2019
Accelerated
capital
allowances
£m
Other
temporary
differences
£m
0.5
0.1
0.1
0.7
(0.1)
0.6
(1.4)
–
0.9
(0.5)
0.1
(0.4)
Tax
losses
£m
0.2
–
(0.1)
0.1
0.7
0.8
Total
£m
(0.7)
0.1
0.9
0.3
0.7
1.0
Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the
balances net.
Deferred tax assets within one year
Deferred tax liabilities within one year
Total
2019
Group
£m
1.4
(0.4)
1.0
2018
Group
£m
0.8
(0.5)
0.3
At the statement of financial position date, the Group has unused tax losses of £4.2m (2018: £1.2m) available for offset against future profits.
A deferred tax asset of £0.8m (2018: £0.1m) has been recognised in respect of £4.2m (2018: £0.6m) of such tax losses. Deferred tax assets
and liabilities are expected to be materially utilised after 12 months.
16 Inventories
Work in progress
2019
Group
£m
-
2018
Group
£m
1.4
Work in progress comprises costs incurred relating to publications and exhibitions prior to the publication date or the date of the event.
Inventories recognised as an expense during the year amounted to £0.9m (2018: £1.1m). These were included in cost of sales and
employee benefits expense.
The Company had no inventory at 31 December 2019 (2018: £nil).
There are no provision amounts in respect of inventories (2018: £nil) and there were no write-downs of inventory in the year (2018: £nil).
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www.centaurmedia.comFINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
17 Trade and other receivables
Amounts falling due within one year
Trade receivables
Less: expected credit loss
Trade receivables – net
Receivables from subsidiaries
Receivable from Employee Benefit Trust
Other receivables
Prepayments
Accrued income
Social security and other taxes
2 See note 1 (a) for description of prior year restatement
Note
28
2019
Group
£m
Restated2
2018
Group
£m
2019
Company
£m
2018
Company
£m
7.9
(1.1)
6.8
-
-
2.3
1.3
0.4
-
11.0
(1.2)
9.8
–
–
1.7
1.7
0.5
–
10.8
13.7
-
-
-
-
0.6
0.3
0.1
-
-
1.0
–
–
–
2.0
0.4
0.4
0.1
–
0.2
3.1
Receivables from subsidiaries are unsecured, have no fixed due date and bear interest at an annual rate of 2.53% (2018: 2.67%).
Trade receivables are accounted for under IFRS 9 using the expected credit loss model, recognised initially at fair value and subsequently
at amortised cost less any allowance for expected lifetime credit losses. For further detail refer to note 1(s)(ii).
Other receivables includes £1.5m in relation to the lease incentive receivable on exit of the Wells Street property in 2019 and £0.3m
in relation to a deposit on the Waterloo property lease which is fully refundable at the end of the lease term.
18 Cash and cash equivalents
Cash at bank and in hand
The Company had no cash and cash equivalents at 31 December 2019 (2018: £nil).
19 Trade and other payables
2019
Group
£m
9.3
2018
Group
£m
0.1
Trade payables
Payables to subsidiaries
Social security and other taxes
Other payables
Accruals
2019
Group
£m
1.1
-
1.0
1.7
8.7
12.5
Restated2
2018
Group
£m
2.7
–
2.1
1.6
6.8
13.2
2019
Company
£m
-
62.0
-
-
1.4
63.4
2018
Company
£m
–
53.3
–
–
0.5
53.8
2 See note 1 (a) for description of prior year restatement
Payables to subsidiaries are unsecured, have no fixed date of repayment and bear interest at an annual rate of 2.53% (2018: 2.67%).
The Directors consider that the carrying amount of the trade payables approximates their fair value.
108
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
20 Leases
This note explains the impact of the adoption of IFRS 16 Leases on the Group’s financial statements and discloses the new accounting
policies that have been applied from 1 January 2019.
The Group has adopted IFRS 16 retrospectively from 1 January 2019 but has not restated comparatives for the 2018 period, as permitted
under the specific transitional provisions in the standard. The reclassifications and adjustments arising from the new leasing rules are
therefore recognised in the opening balance sheet on 1 January 2019.
(a) The Group’s leasing activities and how these are accounted for
The Group leases office spaces. Prior to the adoption of IFRS 16 these leases were classified as operating leases. Payments made under
operating leases (net of any incentives received from the lessor) were charged to the profit or loss on a straight-line basis over the period
of the lease.
From 1 January 2019 relevant leases (i.e. excluding those to which a practical expedient has been applied) are recognised as a lease liability
and a corresponding right-of-use (‘ROU’) asset at the date at which the leased asset is available for use by the Group.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so
as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The ROU asset is depreciated over
the shorter of the asset’s useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value (‘NPV’)
of future lease payments discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental
borrowing rate (‘IBR’) is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar
value in a similar economic environment with similar terms and conditions.
Adjustments are made to the NPV for the initial measurement of the ROU asset. These adjustments are for any rental accrual or
prepayments on the balance sheet at 31 December 2018 relating to the asset that arose under the previous accounting standard IAS 17. A
further adjustment has been made in relation to a lease incentive receivable on the exit of a London property that had been fully vacated by
31 December 2019. The lease incentive receivable is in other receivables.
All ROU assets currently held by the Group relate to property leases. They are presented on the consolidated statement of financial position
within property, plant and equipment and are split out from other fixed assets in note 12. Lease liabilities are presented as a separate line on
the face of the consolidated statement of financial position, split between current and non-current.
(b) Adjustments recognised on adoption of IFRS 16 at 1 January 2019
On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as ‘operating leases’
under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted
using the IBR as of 1 January 2019. The weighted average lessee’s IBR applied to the lease liabilities on 1 January 2019 was 3.8%.
The Group did not have any material leases previously classified as finance leases.
Lease liabilities
Operating lease commitments disclosed as at 31 December 2018
Less operating leases commitments related to contracts with future commencement dates
Operating lease commitments transitioning to IFRS 16 as at 1 January 2019
Impact of discounting using the lessee’s IBR at the date of initial application
Lease liabilities recognised as at 1 January 2019
Current
Non-current
As at 1 January 2019
1 January
2019
£m
7.3
(3.4)
3.9
(0.6)
3.3
2.3
1.0
3.3
Right-of-use assets
The recognised ROU assets were measured at an amount equal to that of the lease liabilities at 1 January 2019 and adjusted for items as
outlined above.
ROU assets - property
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Proof Number 5
1 January
2019
£m
2.3
109
20/04/2020 14:14:40
www.centaurmedia.comFINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
20 Leases continued
Additional information
As detailed in the table above, £3.4m of operating lease commitments in relation to a contract with a commencement date of 1 October
2019 were disclosed as at 31 December 2018. The lease liability and corresponding ROU asset was recognised as an addition during the
year on commencement, see section (b) below. The commitments under this contract discounted at the IBR gave rise to a lease liability and
corresponding ROU asset of £3.2m, recognised on 1 October 2019.
The change in accounting policy did not affect any other items on the consolidated statement of financial position at 1 January 2019 other
than those discussed in this note.
The Group derived income from sub-leasing one of the properties during the year. This has not been included in the value of the ROU asset
in accordance with the short-term lease practical expedient permitted by IFRS 16. The rental income generated in the period of £0.8m is
presented in the consolidated statement of comprehensive income in ‘other operating income’ and is recognised on a straight-line basis.
This source of income ceased in the current year, and no rental income is expected in 2020.
Each lease arrangement has been accounted for over its lease term as outlined in the contract. Where options to extend or terminate exist
in these contracts, the recognition of the lease liabilities and ROU assets represent the Directors understanding of likely future cash flows
under these contracts. The assets and liabilities will continue to be reviewed and will be revalued where a change in the future cash flows is
indicated.
(c) As at 31 December 2019
The lease liability and ROU assets presented in the consolidated statement of financial position as at 31 December 2019 were as follows:
Lease liabilities
Recognised on adoption of IFRS 16 at 1 January 2019
Additions
Interest expense
Cash outflow
As at 31 December 2019
Current
Non-current
As at 31 December 2019
ROU assets
Cost
Recognised on adoption of IFRS 16 at 1 January 2019
Additions
As at 31 December 2019
Accumulated depreciation
Depreciation charge for the period
Impairment charge for the period
As at 31 December 2019
Recognised on adoption of IFRS 16 at 1 January 2019
As at 31 December 2019
31 December
2019
£m
3.3
3.2
0.1
(2.3)
4.3
2.1
2.2
4.3
31 December
2019
£m
2.3
3.2
5.5
1.6
0.2
1.8
2.3
3.7
110
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
21 Deferred income
Deferred income
2019
Group
£m
8.7
2018
Group
£m
15.0
Deferred income arises on contracts with customers where revenue recognition criteria has not yet been met. See note 1 (e) for further
details.
22 Current tax assets
Corporation tax receivables
The Company had no corporation tax receivables or payables at 31 December 2019 (2018: £nil).
23 Provisions
Group
At 1 January 2018
Acquisition related
Utilised in the year
At 31 December 2018
Utilised in the year
At 31 December 2019
Current
Non-current
Total
Deferred
consideration
£m
1.8
0.1
(1.8)
0.1
(0.1)
–
–
–
–
2019
Group
£m
0.1
Other
£m
0.1
–
–
0.1
–
0.1
–
0.1
0.1
2018
Group
£m
0.2
Total
£m
1.9
0.1
(1.8)
0.2
(0.1)
0.1
–
0.1
0.1
Deferred consideration
Deferred consideration at 1 January 2018 related to the acquisition of MarketMakers. An additional amount of £0.1m contingent
consideration was provided for during 2018 due to MarketMakers achieving a higher EBITDA than expected. £1.8m was settled in cash
during 2018. The remaining £0.1m was settled in cash during the current year.
Other
The other provision relates to the dilapidation provision which was acquired on the acquisition of MarketMakers in relation to the building
leased by the company in Portsmouth.
All amounts represent the Directors’ best estimate of the balance to be paid at the statement of financial position date.
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www.centaurmedia.comFINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
24 Equity
Ordinary shares of 10p each
Authorised share capital – Group and Company
At 1 January 2018, 31 December 2018 and 31 December 2019
Issued and fully paid share capital – Group and Company
At 1 January 2018, 31 December 2018 and 31 December 2019
Nominal value
£m
Number of
shares
20.0
200,000,000
15.1
151,410,226
Deferred shares reserve
The deferred shares reserve represents 800,000 (2018: 800,000) deferred shares of 10p each, which carry restricted voting rights and have
no right to receive a dividend payment in respect of any financial year.
Reserve for shares to be issued
The reserve for shares to be issued is in respect of equity-settled share-based compensation plans. The changes to the reserve for shares to
be issued represent the total charges for the year relating to equity-settled share-based payment transactions with employees as accounted
for under IFRS 2.
Own shares reserve
The own shares reserve represents the value of shares held as treasury shares and in an employee benefit trust. At 31 December 2019,
6,964,613 (2018: 6,964,613) 10p ordinary shares are held in treasury and 1,573,134 (2018: 857,991) 10p ordinary shares are held in an
employee benefit trust.
During 2019, the employee benefit trust purchased 1,247,205 (2018: 766,800) ordinary shares in order to meet future obligations arising
from share-based rewards to employees. The shares were acquired at an average price of 51.7p per share (2018: 45.9p), with prices
ranging from 45.6p to 54p. The total cost of £0.6m (2018: £0.4m) has been recognised in other reserves in the own shares reserve in equity.
25 Share-based payments
The Group’s share-based payment expense for the year by scheme:
Equity-settled plans
LTIP
Total equity-settled incentive plans and share based payment expense
The Group’s share-based payment schemes upon vesting are equity-settled.
2019
£m
0.1
0.1
2018
£m
0.8
0.8
The prior year charge of £0.8m includes £0.1m in relation to national insurance payable on equity settled share-based schemes. This was
included in liabilities as it was to be settled in cash.
The current year charge of £0.1m (2018: £0.8m) includes an immaterial amount of national insurance (2018: £0.1m) payable on equity
settled share-based schemes and is included in liabilities as it is to be settled in cash.
Share based payments in 2019 of £0.1m (2018: £0.8m) have decreased significantly due to the overall reduction in the number of share
options from 10.6m to 7.6m. This is due to forfeitures and lapses of 0.5m and 5.6m share options respectively resulting in a reversal of
charges previously recognised since granted, mainly in 2016 and 2017. This was offset by an expense recognised for 3.6m new share
options granted during the year and an additional charge recognised on truing up the expense for 1.6m share options that vested during
the year.
112
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
Long-Term Incentive Plan
The Group operates a Long-Term Incentive Plan (‘LTIP’) for Executive Directors and selected senior management. This is an existing
incentive policy and was approved by shareholders at the 2016 AGM. The share awards are valued at date of grant and the consolidated
statement of comprehensive income is charged over the vesting period, taking into account the number of shares expected to vest. Full
details of how the scheme operates are included in the Remuneration Report.
These awards were priced using the following models and inputs:
Grant date
Share price at grant
date (p)
Fair value (p)
Exercise date
Exercise price (p)
Number of awards
Balance at
1 January 2019
LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2016 LTIP 2006
03.10.2019 25.10.2019 25.07.2019 25.07.2018 6.04.2018 6.04.2018
24.04.17
07.04.17
04.10.16
22.09.16
30.03.16
41.50
22.77
32.50
16.25
46.00
23.00
44.40
22.20
50.20
28.65
50.20
25.10
45.75
24.46
40.75
21.08
44.00
18.04
41.00
16.81
49.00
20.92
02.10.2022 5.04.2022 5.04.2022 24.07.2019
06.04.21
06.04.21
24.04.20
07.04.20
04.10.19
22.09.19
30.03.19
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
–
–
–
53,590 1,246,879 2,104,890 1,351,528 2,958,786
573,395
366,667 1,983,489
Granted during the year
995,259
128,133 2,482,366
–
–
–
–
–
–
(245,726)
–
–
–
–
(53,590)
–
–
–
–
–
–
(141,699)
–
–
–
–
–
–
(92,035)
(478,472)
–
–
–
–
–
–
–
–
–
(675,764)
(2,006,722)
(573,395)
(366,667) (1,983,489)
995,259
128,133 2,236,640
– 1,246,879 1,963,191
675,764
381,557
–
–
675,764
381,557
–
39.49
–
–
–
–
–
–
–
–
–
–
51.25
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 1,351,528 3,589,405
573,395
366,667 2,059,390
53,590 1,246,879 2,145,375
–
–
–
–
–
–
(40,485)
–
–
–
–
–
–
–
(630,619)
–
–
–
–
–
–
–
–
–
–
–
(75,901)
–
–
53,590 1,246,879 2,104,890 1,351,528 2,958,786
573,395
366,667 1,983,489
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Forfeited during the year
Exercised during the year
Lapsed during the year
Balance at
31 December 2019
Exercisable at
31 December 2019
Average share price at
date of exercise (p)
Balance at 1 January
2018
Granted during the year
Forfeited during the year
Exercised during the year
Lapsed during the year
Balance at
31 December 2018
Exercisable at
31 December 2018
Average share price at
date of exercise (p)
Grant date
Expected volatility (%)
Expected dividend
yield (%)
Risk free interest rate (%)
03.10.2019 25.10.2019 25.07.2019 25.07.2018 6.04.2018 6.04.2018
24.04.17
07.04.17
04.10.16
22.09.16
30.03.16
43.5
43.5
45.4
45.4
43.8
43.8
31.8
40.0
–
0.34
–
–
–
*
–
–
–
*
–
–
–
–
0.86
* Stochastic
Valuation of model used
Stochastic
–
0.12
–
0.12
–
0.06
–
0.06
–
0.48
Stochastic Stochastic Stochastic Stochastic Stochastic
6.47
0.86
Black-
Scholes
*Schemes granted on the 25 October 2019, 25 July 2019 and 25 July 2018 were nil-cost options with non-market based performance conditions.
These schemes were valued based on the estimated vesting value of the non-market based conditions and expected forfeiture rates.
27195_Centaur Media_AR2019-Financials.indd 113
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113
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www.centaurmedia.comFINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
25 Share-based payments continued
The shares outstanding at 31 December 2019 had a weighted average exercise price of £nil (2018: £nil) and a weighted remaining life of 1.6
years (2018: 1.4 years).
Shares outstanding and exercisable at the end of the year had an initial expiry date of 25 March 2020, which has been extended to 30 June
2020.
The two schemes granted in 2017 were assessed for early vesting following the sale of four business units resulting in a significant change
in the business. As a result the options related to the TSR performance conditions vested and options related to all other performance
conditions lapsed.
Senior Executive Long-Term Incentive Plan (‘SELTIP’)
The Centaur Media Plc 2010 Senior Executive Long-Term Incentive Plan (the ‘SELTIP’) was introduced during 2011 and was approved by
shareholders at the 2010 AGM. This is not an HMRC approved scheme and vests over a three-year period with service and performance
conditions. Awards were granted under this scheme in 2011 for no consideration and no exercise price. This scheme has closed to new
awards.
Awards of bonus units were made in 2013 as summarised in the following table:
Financial year
2013
Threshold
profit
£8.0m
PBTA
achieved
£8.6m
Profit
growth
£0.6m
SELTIP
contribution
30%
Total
bonus pool
£0.1m
Bonus pool
allocated*
£0.1m
* The Remuneration Committee did not allocate the entire bonus pool in 2013.
** Awards were only made to participants with continuing employment.
Senior Executive Long-Term Incentive Plan
These awards were priced using the following models and inputs:
Grant date
Share price at grant date (p)
Fair value (p)
Exercise date
Exercise price (p)
Number of awards
Balance at 1 January 2019
Granted during the year
Forfeited during the year
Exercised during the year
Balance at 31 December 2019
Exercisable at 31 December 2019
Average share price at date of exercise (p)
Balance at 1 January 2018
Granted during the period
Forfeited during the period
Exercised during the period
Balance at 31 December 2018
Exercisable at 31 December 2018
Average share price at date of exercise (p)
Number
of shares
awarded in
total**
118,851
SELTIP 2013
15.09.11
33.88
23.76
17.09.14
nil
6,862
-
-
-
6,862
6,862
–
6,862
–
–
–
6,862
6,862
–
The shares outstanding at 31 December 2019 had a weighted average exercise price of £nil (2018: £nil) and a weighted remaining life of 2.7
years (2018: 3.7 years).
114
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 These awards were priced using the following models and inputs:
Grant date
Expected volatility (%)
Expected dividend yield (%)
Risk free interest rate (%)
Valuation of model used
SELTIP 2013
15.09.11
54.00
5.26
0.57
Black-Scholes
Share Incentive Plan
The Group has a Share Incentive Plan, which is a HRMC approved Tax-Advantaged plan, which provides employees with the opportunity
to purchase shares in the Company. This plan is open to all employees who have been employed by the Group for more than 12 months.
Employees may invest up to £1,800 per annum (or 10% of their salary if less) in ordinary shares in the Company, which are held in trust.
The shares are purchased in open market and are held in trust for each employee. The shares can be withdrawn with tax paid at any time,
or tax-free after five years. The Group matches the contribution with a ratio of one share for every two purchased. Other than continuing
employment, there are no other performance conditions attached to the plan.
The Executive Directors are eligible to participate in the Share Incentive Plan, as are all employees of the Group.
Number of outstanding matching shares
26 Dividends
Equity dividends
Final dividend for 2017: 1.5p per 10p ordinary share
Interim dividend for 2018: 1.5p per 10p ordinary share
Final dividend for 2018: 1.5p per 10p ordinary share
Interim dividend for 2019: ordinary dividend of 1.5p and special dividend of 2.0p per 10p ordinary share
2019
Group
48,071
2018
Group
57,298
2019
£m
–
–
2.1
5.0
7.1
2018
£m
2.2
2.1
–
–
4.3
In the current year the Board announced a new progressive dividend policy. An interim dividend payment of £5.0m was paid in October
2019. This comprised a £2.1m ordinary dividend at 1.5p per share and a £2.9m special dividend at 2.0p per share.
For the year ended 31 December 2019 the Board is recommending a final dividend payment of £0.7m at 0.5p per share. The dividend
proposed by the Directors, subject to shareholder approval at the Annual General Meeting, will be paid on 29 May 2020 to all shareholders
on the Register of Members on 11 May 2020.
The interim and final dividends of £5.0m and £0.7m together result in a total dividend pertaining to 2019 of £5.7m.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
27 Notes to the cash flow statement
Reconciliation of (loss)/profit for the year to net cash inflow from operating activities:
Note
7
6
12
12
11
11
10
14
14
13
25
Profit/(loss) for the year
Adjustments for:
Tax
Interest expense
Depreciation
Impairment of property, plant and equipment
Amortisation of intangible assets
Impairment of intangible assets
Impairment of goodwill
Loss on disposal of subsidiary
Gain on disposal of subsidiaries
Loss on impairment of investment
Share-based payment charge
Unrealised foreign exchange differences
Other
Changes in working capital (excluding effects of
acquisitions and disposals of subsidiaries):
Decrease / (increase) in trade and other receivables
Increase in trade and other payables
Increase in deferred income
Cash generated from operating activities
Analysis of changes in net cash/(debt)
Group
Cash and cash equivalents
Net cash
Company
Cash and cash equivalents
Net cash
2019
Group
£m
1.9
2018
Group
£m
(14.2)
2019
Company
£m
(40.2)
2018
Company
£m
(13.7)
(3.2)
1.6
–
–
–
–
–
–
–
13.1
0.3
–
–
(2.3)
8.9
–
4.7
0.1
0.2
0.9
–
5.6
–
13.1
–
(0.1)
–
0.8
–
–
(1.3)
1.4
0.3
6.8
1.4
1.7
–
–
–
–
–
–
–
35.7
0.1
–
–
1.8
6.8
–
7.3
At
31 December
2018
£m
0.1
0.1
At
31 December
2018
£m
–
–
Net
cash flow
£m
9.2
9.2
Net
cash flow
£m
–
–
At
31 December
2019
£m
9.3
9.3
At
31 December
2019
£m
–
–
(0.1)
0.3
2.3
0.4
5.0
0.3
–
0.1
(7.8)
–
0.1
–
0.2
0.5
1.3
0.3
4.6
Note
18
Note
18
116
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
28 Financial instruments and financial risk management
Financial risk management
The Board has overall responsibility for the determination of the Group’s risk management policies. The Board receives monthly reports from
the Chief Financial Officer through which it reviews the effectiveness of policies and processes put in place to manage risk. The Board sets
policies that reduce risk as far as possible without unduly affecting the operating effectiveness of the Group.
The Group’s activities expose it to a variety of financial risks, including interest rate risk, credit risk, liquidity risk, capital risk and currency risk.
Of these, credit risk and liquidity risk are considered the most significant. This note presents information about the Group’s exposure to each
of the above risks.
Categories of financial instruments
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the
basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are
disclosed in note 1(s). All financial assets and liabilities are measured at amortised cost.
Financial assets
Cash and bank balances
Trade receivables - net
Other receivables
Total financial assets
Financial liabilities
Lease liabilities
Trade payables
Accruals
Provisions
Other payables
Total financial liabilities
Note
18
17
17
20
19
19
23
19
2019
£m
9.3
6.8
2.3
18.4
4.3
1.1
8.7
0.1
1.7
Restated2
2018
£m
0.1
9.8
1.7
11.6
-
2.7
6.8
0.2
1.6
15.9
11.3
2 See note 1 (a) for description of prior year restatement
Credit risk
The Group’s principal financial assets are trade and other receivables (note 17). Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the Group. The carrying amount of financial assets recorded in the financial
statements, which is net of impairment losses, represents the Group’s maximum exposure to credit risk in relation to financial assets. Credit
risk is managed on a Group basis. The Group does not consider that it is subject to any significant concentrations of credit risk.
Trade receivables
Trade receivables consist of a large number of customers, of varying sizes and spread across diverse industries and geographies. The
Group does not have significant exposure to credit risk in relation to any single counterparty or group of counterparties having similar
characteristics. The Group’s exposure to credit risk is influenced predominantly by the circumstances of individual customers as opposed to
industry or geographic trends.
The business assesses the credit quality of customers based on their financial position, past experience and other qualitative and
quantitative factors. The Group’s policy requires customers to pay in accordance with agreed payment terms, which are generally 30 days
from the date of invoice. Under normal trading conditions, the Group is exposed to relatively low levels of risk, and potential losses are
mitigated as a result of a diversified customer base and the requirement for events and certain premium content subscription invoices to be
paid in advance of service delivery.
The credit control function within the Group’s finance department monitors the outstanding debts of the Group, and trade receivables
balances are analysed by the age and value of outstanding balances.
Any trade receivable balance which is objectively determined to be uncollectible is written off the ledger, with a charge taken through the
statement of comprehensive income. The Group also records an allowance for the lifetime expected credit loss on its trade receivables
balances under the simplified approach as mandated by IFRS 9. The impairment model for trade receivables, under IFSR 9, requires the
recognition of impairment provisions based on expected lifetime credit losses, rather than only incurred ones as was the case under IAS 39.
All balances past due are reviewed, with those greater than 90 days past due considered to carry a higher level of credit risk. Refer to note 1
(s) for further details on the approach to allowance for expected credit losses on trade receivables.
The allowance for expected lifetime credit losses, and changes to it, are taken through administrative expenses in the statement of
comprehensive income.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
28 Financial instruments and financial risk management continued
The ageing of trade receivables according to their original due date is detailed below:
*See note 1 (a) for description of prior year restatement
Not due
0-30 days past due
31-60 days past due
61-90 days past due
Over 90 days past due
2019
Gross
£m
3.7
1.5
0.5
0.4
1.8
7.9
2019
Provision
£m
–
–
–
(0.1)
(1.0)
(1.1)
Restated2
2018
Gross
£m
5.3
2.3
0.9
0.4
2.1
11.0
2018
Provision
£m
(0.1)
–
(0.1)
–
(1.0)
(1.2)
2 See note 1 (a) for description of prior year restatement
Trade receivables that are less than 3 months past due are generally not considered to be impaired, except where specific credit issues or
delinquency in payments have been identified. In making the assessment that unprovided trade receivables are not impaired, the Directors
have considered the quantum of gross trade receivables which relate to amounts not yet included in income, including pre-event invoices
in deferred income and amounts relating to VAT. The credit quality of trade receivables not yet due nor impaired has been assessed as
acceptable.
The movement in the allowance for expected credit losses on trade receivables is detailed below:
Balance at 1 January
Utilised
Additional provision charged to the
statement of comprehensive income
Disposal of subsidiaries
Balance at 31 December
2019
Continuing
£m
1.1
2019
Discontinued
£m
0.1
(0.4)
0.4
–
1.1
–
–
(0.1)
–
2019
Total
£m
1.2
(0.4)
0.4
(0.1)
1.1
2018
Continuing
£m
1.5
2018
Discontinued
£m
–
(0.6)
0.3
–
1.2
–
–
–
–
2018
Total
£m
1.5
(0.6)
0.3
–
1.2
The Group’s policy requires customers to pay in accordance with agreed payment terms, which are generally 30 days from the date of
invoice or, in the case of live events related revenue, no less than 30 days before the event. All credit and recovery risk associated with trade
receivables has been provided for in the statement of financial position. The Group’s policy for recognising an impairment loss is given in
note 1 (s)(ii). Impairment losses are taken through administrative expenses in the statement of comprehensive income.
The Directors consider the carrying value of trade and other receivables approximates to their fair value.
Cash and cash equivalents
Banks and financial institutions are independently rated by credit rating agencies. We choose only to deal with those with a minimum ‘A’
rating. We determine the credit quality for cash and cash equivalents to be strong.
Other receivables
Other receivables are neither past due nor impaired. These are primarily made up of sundry receivables, including employee-related debtors
and receivables in respect of distribution arrangements.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages liquidity risk
by maintaining adequate reserves and working capital credit facilities, and by continuously monitoring forecast and actual cash flows. In
November 2018 the Group renewed its £25m multi-currency revolving credit facility with the Royal Bank of Scotland and Lloyds which runs
to November 2021 with the option to extend for two periods of one year each. As at 31 December 2019, the Group had cash of £9.3m
(2018: £0.1m) with a full undrawn loan facility of £25.0m (2018: full undrawn loan facility of £25.0m).
The following tables detail the financial maturity for the Group’s financial liabilities:
At 31 December 2019
Financial liabilities
Interest bearing
Non-interest bearing
At 31 December 2018 (restated2)
Financial liabilities
Interest bearing
Non-interest bearing
Book value
£m
Fair value
£m
Less than
1 year
£m
2–5 years
£m
4.3
11.6
15.9
-
11.3
11.3
4.3
11.6
15.9
-
11.3
11.3
2.1
11.5
13.6
-
11.2
11.2
2.2
0.1
2.3
-
0.1
0.1
2 See note 1 (a) for description of prior year restatement
The Directors consider that book value is materially equal to fair value.
The book value of primary financial instruments approximates to fair value where the instrument is on a short maturity or where they bear
interest at rates that approximate to the market.
The following table details the level of fair value hierarchy for the Group’s financial asset and liabilities:
Financial Asset
Level 1
Cash and Bank balances
Level 3
Trade receivables – net
Other receivables
Financial Liabilities
Level 3
Lease Liabilities
Trade Payables
Accruals
Provisions
Other payables
Borrowings*
*Borrowings are purely in relation to the Group’s revolving credit facility which is discussed above. The amount drawn down from this facility
at 31 December 2019 was £nil (2018: £nil).
All trade and other payables are due in one year or less, or on demand.
Interest rate risk
The Group has no significant interest-bearing assets but is exposed to interest rate risk when it borrows funds at floating interest rates
through its revolving credit facility. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. The Group evaluates
its risk appetite towards interest rate risks regularly, and may undertake hedging activities, including interest rate swap contracts, to manage
interest rate risk in relation to its revolving credit facility if deemed necessary.
The Group did not enter into any hedging transactions during the current or prior year and as at 31 December 2019, the only floating rate to
which the Group is exposed was LIBOR. The Group’s exposure to interest rates on financial assets and financial liabilities is detailed in the
liquidity risk section of this note.
Interest rate sensitivity
The Group has exposure to interest rate risk, and sensitivity analysis has been performed based on exposure to variable interest rates at the
reporting date.
If interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group’s net profit after tax would
increase / decrease by £nil (2018: £nil) and equity by £nil (2018: £nil)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
28 Financial instruments and financial risk management continued
Capital risk
The Group manages its capital to ensure that all entities in the Group will be able to continue as a going concern while maximising return to
stakeholders, as well as sustaining the future development of the business.
The capital structure of the Group consists of net debt/cash, which includes cash and cash equivalents (note 18), and equity attributable
to the owners of the parent, comprising issued share capital (note 24), other reserves and retained earnings. The Board also considers the
levels of own shares held for employee share schemes, and the ability to issue new shares for acquisitions, in managing capital risk in the
business.
The Group continues to benefit from its banking facilities (as renewed during November 2018), which features both a working capital facility,
to assist in managing the Group’s liquidity risk, and an acquisition facility to support the Group’s acquisition strategy. The facility, available
until November 2021 with an option to extend for a further 2 periods of 1 year each, allows for a maximum drawdown of £25m.
Interest is calculated on LIBOR plus a margin dependent on the Group’s net leverage position, which is re-measured quarterly in line with
covenant testing. The Group’s borrowings are subject to financial covenants tested quarterly. The principal financial covenants under the
facility are that the ratio of net debt to adjusted EBITDA (see note 1(b) for explanation and reconciliation of adjusted EBITDA) shall not
exceed 2.5:1 and the ratio of EBITDA to net finance charges shall not be less than 4:1. At 31 December 2019 and throughout 2019 all these
covenants were achieved.
Currency risk
Substantially all the Group’s net assets are located in the United Kingdom. The majority of revenue and profits is generated in the United
Kingdom and consequently foreign exchange risk is limited. The Group continues to monitor its exposure to currency risk, particularly as
the business expands into overseas territories such as North America, however the results of the Group are not currently considered to be
sensitive to movements in currency rates.
29 Operating lease commitments - minimum lease payments
Due to the adoption of IFRS 16 at 1 January 2019, the Group’s future lease commitments are recognised as lease liabilities and ROU assets.
The movement from the commitments of £7.3m at 31 December 2018 to the recognition of the lease liabilities and ROU assets are detailed
in note 20.
Commitments payable under non-cancellable operating leases
Within one year
Later than one year and less than five years
2019
£m
–
–
–
2018
£m
2.5
4.8
7.3
At 31 December 2018, the Group had contracted with tenants to receive payments in respect of operating leases on land and buildings.
These arrangements were excluded from the requirements of IFRS 16 under the short-term lease exemption (see note 20 for further details).
All sub-leasing arrangements ceased during the year.
Commitments receivable under non-cancellable subleases
Within one year
Later than one year and less than five years
2019
£m
–
–
–
2018
£m
0.5
–
0.5
The Company does not have any operating lease commitments.
30 Pension schemes
The Group contributes to individual and collective money purchase pension schemes in respect of Directors and employees once they have
completed the requisite period of service. The charge for the year in respect of these defined contribution schemes is shown in note 5.
Included within other payables is an amount of £0.1m (2018: £0.1m) payable in respect of the money purchase pension schemes.
31 Capital commitments
At 31 December 2019, the Group had no capital commitments. At 31 December 2018, the Group had capital commitments totalling £0.1m
in relation to fit-out costs for the new WeWork property lease.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019
32 Related party transactions
Group
Key management compensation is disclosed in note 5. There were no other material related party transactions for the Group in the current
or prior year.
Company
During the year, interest was recharged from subsidiary companies as follows:
Interest payable
There were no borrowings at the year end.
2019
£m
1.7
2018
£m
1.3
The balances outstanding with subsidiary companies are disclosed in notes 17 and 19.
There were no other material related party transactions for the Company in the current or prior year.
Audit exemption
For the year ended 31 December 2019 the Company has provided a guarantee pursuant to sections 479A-C of Companies Act 2006 over
the liabilities of the following subsidiaries and, as such, they are exempt from the requirements of the Act relating to the audit of individual
financial statements, or preparation of individual financial statements, as appropriate, for this financial year.
Name
Centaur Communications Limited
Centaur Newco 2018 Limited
Chiron Communications Limited
Econsultancy.com Limited
Mayfield Publishing Limited
Pro-Talk Limited
Taxbriefs Holdings Limited
Taxbriefs Limited
Thelawyer.com Limited
Xeim Limited
Your Business Magazine Limited
Company
Number
01595235
11725322
01081808
04047149
02034820
03939119
03572069
01247331
11491880
05243851
01707331
Outstanding
liabilities
£m
42.8
-
67.5
2.9
0.4
0.3
-
0.7
3.0
11.3
0.3
See note 13 for changes to subsidiary holdings during the year.
MarketMakers Incorporated Limited will have its statutory audit for the year ended 31 December 2019 performed by PwC.
33 Post balance date events
No material events have occurred after the reporting date.
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www.centaurmedia.comFINANCIAL REPORT FIVE YEAR RECORD (UNAUDITED)
Revenue (£m)
Operating loss (£m)
Adjusted operating profit / (loss) (£m)
Adjusted operating profit / (loss) margin
2015*
69.9
(4.7)
10.5
15%
2016*
71.9
(3.9)
9.1
13%
2017*
64.7
Restated*
2018
50.3
(0.3)
(20.3)
4.1
6%
(2.2)
(4%)
Loss before tax (£m)
(5.6)
(4.4)
(0.7)
(20.5)
Adjusted profit / (loss) before tax (£m)
Adjusted diluted EPS (pence)
Ordinary dividend per share (pence)
Net operating cash flow (£m)
Average permanent headcount (FTE)
Revenue per head (£’000)
*See note 1 (a) for description of prior year restatement
Revenue by type
Premium Content
Marketing Services
Training and Advisory
Events
Marketing and Advertising Solutions
Telemarketing Services
Other
Goodwill and other intangible assets
Other assets and liabilities
Net assets before net debt
Net (debt) / cash
Total equity
9.8
5.3
3.0
4.7
564
125
2015*
£m
20.2
–
3.1
24.1
22.5
–
69.9
2015*
£m
96.4
(2.1)
94.3
(17.9)
76.4
8.6
4.5
3.0
3.7
1.8
3.0
14.0
12.1
554
131
2016*
£m
20.9
–
5.1
25.7
20.2
–
71.9
2016*
£m
88.8
(7.6)
81.2
(14.1)
67.1
589
110
2017*
£m
19.1
1.9
8.0
18.7
12.8
4.2
64.7
2017*
£m
94.2
(13.4)
80.8
4.1
84.9
(2.4)
(1.4)
3.0
5.6
758
66
Restated*
2018
£m
14.4
4.5
8.0
6.5
7.3
9.6
50.3
48.9
Restated*
2018
£m
78.1
(11.5)
66.6
0.1
66.7
2019
£m
61.2
(9.3)
51.9
9.3
61.2
2019
48.9
(8.4)
(1.1)
(2)%
(8.7)
(1.4)
(1.3)
2.0
4.7
661
74
2019
£m
14.5
4.3
7.6
6.3
6.9
9.3
* 2015 – 2017 have not been restated with regards to discontinued operations relating to the disposals completed during 2019. 2018 has
been restated for discontinued operations in line with the comparatives disclosed in these financial statements.
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Centaur Media PlcAnnual Report and Financial Statements for the year ended 31 December 2019 DIRECTORS, ADVISERS AND
OTHER CORPORATE INFORMATION
Company registration number
04948078
Incorporated / domiciled in
England and Wales
Registered office
Floor M
10 York Road
London
SE1 7ND
United Kingdom
Directors
Colin Jones (Chairman)
Swagatam Mukerji (Chief Executive, previously Chief Financial Officer)
Simon Longfield (Chief Financial Officer, appointed 6 November 2019)
William Eccleshare
Robert Boyle (retiring 31 March 2020)
Rebecca Miskin (retiring 31 March 2020)
Carol Hosey (appointed 5 February 2020)
Leslie-Ann Reed (appointed 1 March 2020)
Company Secretary
Helen Silver
Independent Auditor
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
1 Embankment Place
London
WC2N 6RH
Registrars
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
External Lawyers
Dechert LLP
160 Queen Victoria Street
London
EC4V 4QQ
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www.centaurmedia.comFINANCIAL REPORT SHAREHOLDER NOTES
124
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h
e
y
e
a
r
e
n
d
e
d
3
1
D
e
c
e
m
b
e
r
2
0
1
9
Floor M
10 York Road
London
SE1 7ND
27195_Centaur Media_AR2019 strategic.indd 3
27195
1 April 2020 4:58 pm
Proof Number 5
20/04/2020 14:02:46