annual report and accounts year ended 31 december:
2013
marketing group plc
36 Percy Street, London W1T 2DH
t: +44 (0)203 463 2099
themission.co.uk
1 | 2
contents
Page 2
Introduction to the Group
Page 13 Board of Directors
Page 15 Chairman’s Statement
Page 17 Financial Highlights
Page 19 Strategic Report
Page 21 Report of the Directors
Page 25 Corporate Governance
Page 27
Independent Auditor’s Report
Page 28 Consolidated Statement of Comprehensive Income
Page 29 Consolidated Balance Sheet
Page 30 Consolidated Cash Flow Statement
Page 31 Consolidated Statement of Changes in Equity
Page 32 Notes to the Consolidated Financial Statements
Page 56 Independent Auditor’s Report: Company
Page 57 Company Balance Sheet
Page 58 Notes to the Company Balance Sheet
Page 64 Notice of Annual General Meeting
Page 66 Advisors
The Mission Marketing Group plc
(‘ ‘) is a UK-based
communications Agency group
built from a broad mix of
specialists and full service
offerings that comprises:
• Integrated, multi-discipline,
multi-sector Agencies
• Specialists in specific marketing
and communications activities
• Specialists in particular market sectors
And we are united by a single
purpose – to make our Clients’
businesses more valuable.
Quite simply, that’s
marketing group plc 2013 annual report
own ideas
marketing group plc 2013 annual report
own ideas
3 | 4
We have our own ideas of how a
communications Agency group
should run.
We are not about imposing doctrine on our
Agencies and nor are we about making them
conform to group policies. We are about
encouraging collaboration, empowering
people and allowing our Agencies to flourish
in a way that is best for them, their culture,
their people and, above all, their Clients.
Unlike other groups, our Board is comprised
of the entrepreneurs who run our Agencies.
Talented people with a passion to make
our Clients famous and successful. Whatever
the discipline. And by being focused on their
Agencies yet fully supportive of the group
they deliver all the creativity of a boutique
with the resource of a multi national.
Despite having eleven Agencies we have
one bottom line so that our Clients get
the best advice and share in our resources.
marketing group plc 2013 annual report
together we are
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marketing group plc 2013 annual report
together we are
5 | 6
Our leadership team
brings together
management depth,
business expertise
and international
agency know-how.
Our unique structure
is comprised of the
entrepreneurs who run
our Agencies. It enables
each Agency, its people
and its Clients to access
skills, tools and buying
power in a collectively
advantageous way
whilst retaining their
own distinct personality.
enhanced by improved
quality of life.
Our Client list is
impressive, and we are
proud to work with
some of the world’s
leading brands and the
UK’s biggest names.
Our regional locations
let us benefit from lower
establishment costs and
attract top-flight people
who seek an exciting
work environment,
Together we are the
, we work
together to make
our Clients’ brands
and businesses more
valuable and, fuelled
by their success, are
growing into the
nation’s most respected
and influential creative
communications group.
marketing group plc 2013 annual report
concinnity
integrated
generalists
activity
specialists
Integrated Generalists Our integrated generalist Agencies drive business
growth through consistent brand messaging and measurable results across
all of our Clients’ marketing channels.
Activity Specialists Bringing together talented people with a dedicated focus,
our specialist Agencies span branded content, PR, events, learning, film production
and ecommerce. All work across a range of sectors to deliver their expertise.
Sector Specialists Across technology, automotive, healthcare and property,
our sector specialists enjoy enviable reputations for their in-depth knowledge,
contacts and working practices that are tailored to their Clients’ needs.
More Powerful Together At every step, everything we do is about working together
to share our abilities and add the maximum value for our Clients. All together it adds
up to a potent mix that can transform a Client’s business or even their entire market.
marketing group plc 2013 annual report
group agencies
9 | 10
marketing group plc 2013 annual report
board of directors
marketing group plc 2013 annual report
concinnity
7 | 8
marketing group plc 2013 annual report
group agencies
1:
3:
4:
2:
9:
11:
A modern creative Agency with
in-house content and production
facilities, Addiction delivers effective
and innovative communications for a
number of major Clients across the globe.
The UK’s leading technology channel
marketing Agency working successfully
with global brands on an international basis.
A multi-channel, full service creative Agency
that focuses on brand payback through
its unique approach to brand building,
CRM techniques and direct marketing.
Regarded as one of the UK’s top creative
Agencies delivering award-winning
advertising, promotions and digital
solutions for major brands and Clients.
A pioneer of integrated brand-building,
a top-20 Agency working with Clients through
every channel and across the business spectrum
and, in 2012, the No.1 B2B Agency in the UK.
Specialising in automotive, RLA also offers
the capabilities of a full service Agency.
With unrivalled expertise in international
channel marketing programmes in the
automotive, retail and allied sectors.
Regarded as one of the North of England’s
major advertising brands with proven
skills in integrated communications.
A specialist full service medical
communications Agency delivering bespoke
strategic, scientific and creative solutions
to UK, European and global Clients.
An award-winning creative and direct
communications Agency working
with leading consumer brands and
services from its Edinburgh base.
The leading property integrated marketing
Agency in the UK, working with developers
across all aspects of their sales support
programmes from advertising to show
homes. ThinkMedia is the largest buyer
of Estate Agency media in the UK.
A highly creative digital marketing and
web development Agency, Yucca is an
award-winning Agency with unique
digital and online capabilities.
10:
5:
6:
8:
sector
specialists
7:
integrated
generalists
activity
specialists
sector
specialists
the
agencies
The skillful & harmonious
arrangement or fitting
together of the different
parts of something.
concinnity [ ]
at the heart of
everything we do
Securing three highly coveted
roster places with the
Government Procurement
Service. Designing the first
ever marketing suite and show
home to be allowed to be built
on the River Thames. Winning
10 awards at the Fresh Creative
Awards, 16 awards at the Cream
Awards, 4 at the Institute of
Promotional Marketing Awards,
2 Rev awards, and gold Digital
Impact Award. And getting
the No.1 spot for campaign
popularity as well as being
named PR Agency of the year
on the influential Creative Brief
Website. The achievements
of our Agencies speak for
themselves.
scan here
to view our
showreel
marketing group plc 2013 annual report
group agencies
9 | 10
marketing group plc 2013 annual report
board of directors
marketing group plc 2013 annual report
concinnity
7 | 8
marketing group plc 2013 annual report
group agencies
1:
3:
4:
2:
9:
11:
A modern creative Agency with
in-house content and production
facilities, Addiction delivers effective
and innovative communications for a
number of major Clients across the globe.
The UK’s leading technology channel
marketing Agency working successfully
with global brands on an international basis.
A multi-channel, full service creative Agency
that focuses on brand payback through
its unique approach to brand building,
CRM techniques and direct marketing.
Regarded as one of the UK’s top creative
Agencies delivering award-winning
advertising, promotions and digital
solutions for major brands and Clients.
A pioneer of integrated brand-building,
a top-20 Agency working with Clients through
every channel and across the business spectrum
and, in 2012, the No.1 B2B Agency in the UK.
Specialising in automotive, RLA also offers
the capabilities of a full service Agency.
With unrivalled expertise in international
channel marketing programmes in the
automotive, retail and allied sectors.
Regarded as one of the North of England’s
major advertising brands with proven
skills in integrated communications.
A specialist full service medical
communications Agency delivering bespoke
strategic, scientific and creative solutions
to UK, European and global Clients.
An award-winning creative and direct
communications Agency working
with leading consumer brands and
services from its Edinburgh base.
The leading property integrated marketing
Agency in the UK, working with developers
across all aspects of their sales support
programmes from advertising to show
homes. ThinkMedia is the largest buyer
of Estate Agency media in the UK.
A highly creative digital marketing and
web development Agency, Yucca is an
award-winning Agency with unique
digital and online capabilities.
10:
5:
6:
8:
sector
specialists
7:
integrated
generalists
activity
specialists
sector
specialists
the
agencies
The skillful & harmonious
arrangement or fitting
together of the different
parts of something.
concinnity [ ]
at the heart of
everything we do
Securing three highly coveted
roster places with the
Government Procurement
Service. Designing the first
ever marketing suite and show
home to be allowed to be built
on the River Thames. Winning
10 awards at the Fresh Creative
Awards, 16 awards at the Cream
Awards, 4 at the Institute of
Promotional Marketing Awards,
2 Rev awards, and gold Digital
Impact Award. And getting
the No.1 spot for campaign
popularity as well as being
named PR Agency of the year
on the influential Creative Brief
Website. The achievements
of our Agencies speak for
themselves.
scan here
to view our
showreel
marketing group plc 2013 annual report
group agencies
9 | 10
marketing group plc 2013 annual report
board of directors
marketing group plc 2013 annual report
concinnity
7 | 8
marketing group plc 2013 annual report
group agencies
1:
3:
4:
2:
9:
11:
A modern creative Agency with
in-house content and production
facilities, Addiction delivers effective
and innovative communications for a
number of major Clients across the globe.
The UK’s leading technology channel
marketing Agency working successfully
with global brands on an international basis.
A multi-channel, full service creative Agency
that focuses on brand payback through
its unique approach to brand building,
CRM techniques and direct marketing.
Regarded as one of the UK’s top creative
Agencies delivering award-winning
advertising, promotions and digital
solutions for major brands and Clients.
A pioneer of integrated brand-building,
a top-20 Agency working with Clients through
every channel and across the business spectrum
and, in 2012, the No.1 B2B Agency in the UK.
Specialising in automotive, RLA also offers
the capabilities of a full service Agency.
With unrivalled expertise in international
channel marketing programmes in the
automotive, retail and allied sectors.
Regarded as one of the North of England’s
major advertising brands with proven
skills in integrated communications.
A specialist full service medical
communications Agency delivering bespoke
strategic, scientific and creative solutions
to UK, European and global Clients.
An award-winning creative and direct
communications Agency working
with leading consumer brands and
services from its Edinburgh base.
The leading property integrated marketing
Agency in the UK, working with developers
across all aspects of their sales support
programmes from advertising to show
homes. ThinkMedia is the largest buyer
of Estate Agency media in the UK.
A highly creative digital marketing and
web development Agency, Yucca is an
award-winning Agency with unique
digital and online capabilities.
10:
5:
6:
8:
sector
specialists
7:
integrated
generalists
activity
specialists
sector
specialists
the
agencies
The skillful & harmonious
arrangement or fitting
together of the different
parts of something.
concinnity [ ]
at the heart of
everything we do
Securing three highly coveted
roster places with the
Government Procurement
Service. Designing the first
ever marketing suite and show
home to be allowed to be built
on the River Thames. Winning
10 awards at the Fresh Creative
Awards, 16 awards at the Cream
Awards, 4 at the Institute of
Promotional Marketing Awards,
2 Rev awards, and gold Digital
Impact Award. And getting
the No.1 spot for campaign
popularity as well as being
named PR Agency of the year
on the influential Creative Brief
Website. The achievements
of our Agencies speak for
themselves.
scan here
to view our
showreel
marketing group plc 2013 annual report
agency showcase
marketing group plc 2013 annual report
11 | 12
agency showcase
marketing group plc 2013 annual report
agency showcase
marketing group plc 2013 annual report
11 | 12
agency showcase
marketing group plc 2013 annual report
agency showcase
marketing group plc 2013 annual report
11 | 12
agency showcase
marketing group plc 2013 annual report
agency showcase
marketing group plc 2013 annual report
11 | 12
agency showcase
marketing group plc 2013 annual report
group agencies
9 | 10
marketing group plc 2013 annual report
board of directors
marketing group plc 2013 annual report
concinnity
7 | 8
marketing group plc 2013 annual report
group agencies
1:
3:
4:
2:
9:
11:
A modern creative Agency with
in-house content and production
facilities, Addiction delivers effective
and innovative communications for a
number of major Clients across the globe.
The UK’s leading technology channel
marketing Agency working successfully
with global brands on an international basis.
A multi-channel, full service creative Agency
that focuses on brand payback through
its unique approach to brand building,
CRM techniques and direct marketing.
Regarded as one of the UK’s top creative
Agencies delivering award-winning
advertising, promotions and digital
solutions for major brands and Clients.
A pioneer of integrated brand-building,
a top-20 Agency working with Clients through
every channel and across the business spectrum
and, in 2012, the No.1 B2B Agency in the UK.
Specialising in automotive, RLA also offers
the capabilities of a full service Agency.
With unrivalled expertise in international
channel marketing programmes in the
automotive, retail and allied sectors.
Regarded as one of the North of England’s
major advertising brands with proven
skills in integrated communications.
A specialist full service medical
communications Agency delivering bespoke
strategic, scientific and creative solutions
to UK, European and global Clients.
An award-winning creative and direct
communications Agency working
with leading consumer brands and
services from its Edinburgh base.
The leading property integrated marketing
Agency in the UK, working with developers
across all aspects of their sales support
programmes from advertising to show
homes. ThinkMedia is the largest buyer
of Estate Agency media in the UK.
A highly creative digital marketing and
web development Agency, Yucca is an
award-winning Agency with unique
digital and online capabilities.
10:
5:
6:
8:
sector
specialists
7:
integrated
generalists
activity
specialists
sector
specialists
the
agencies
The skillful & harmonious
arrangement or fitting
together of the different
parts of something.
concinnity [ ]
at the heart of
everything we do
Securing three highly coveted
roster places with the
Government Procurement
Service. Designing the first
ever marketing suite and show
home to be allowed to be built
on the River Thames. Winning
10 awards at the Fresh Creative
Awards, 16 awards at the Cream
Awards, 4 at the Institute of
Promotional Marketing Awards,
2 Rev awards, and gold Digital
Impact Award. And getting
the No.1 spot for campaign
popularity as well as being
named PR Agency of the year
on the influential Creative Brief
Website. The achievements
of our Agencies speak for
themselves.
scan here
to view our
showreel
marketing group plc 2013 annual report
board of directors
13 | 14
1: David Morgan
Executive Chairman
5: Sue Mullen
Executive Director
David founded Bray Leino, the Group’s
largest Agency, in 1974 and was its
CEO until 2008. He became Non-
Executive Chairman of Bray Leino in
2008 and was appointed Chairman
of
in April 2010. Before
founding Bray Leino he worked in
a number of London advertising
agencies including Dorlands.
2: James Clifton
Executive Director
Chief Executive of balloon dog, James
started out Client side before working
for various agencies within the Global
Networks that are Omnicom and
WPP. He created balloon dog in 2008
having led an MBO of Fox Murphy.
An award-winning, multi-channel
agency, balloon dog was acquired by
and James was appointed
to the Board in October 2012.
3: Dylan Bogg
Executive Director
Dylan is Chief Executive of Big
Communications and was one of
the founding partners of the Agency.
He had built a successful business
by the age of 24 and this was used
as the bedrock for the launch of Big
Communications in 1996. Formerly
Executive Creative Director of the
Big Communications Group, he still
oversees all creative output. Dylan was
appointed to the Board in April 2010.
4: Fiona Shepherd
Executive Director
Fiona is Chief Executive of April-Six
and has worked in the IT industry for
over 20 years, holding both Client
and Agency positions, with some
of the world’s largest technology
brands. Fiona was a founder of April-
Six in 2000 and has managed its
success as a well respected global
technology Agency with offices in
London and San Francisco. Fiona
joined the Board in April 2010.
Sue is Chief Executive of Story and
started her advertising career at
Branns in Cirencester before moving
to Edinburgh to head up One Agency.
She left in 2002 and, alongside
three colleagues, set up Story, an
award-winning creative and direct
communications Agency. Story was
in 2007 and
acquired by
Sue joined the Board in June 2012.
6: Christopher Morris
Non-Executive Deputy Chairman
in 2005 prior
Chris adds further operational
experience to the Board as a founder
partner of Big Communications,
bought by
to its AIM listing in 2006. Chris has
over 35 years’ industry knowledge
having previously been Managing
Director of Cogent Elliott, one of the
UK’s top three regional advertising
agencies. Chris was appointed to
the Board in December 2009.
7: Christopher Goodwin
Executive Director
Chris is Chief Executive of RLA and
has over 25 years’ experience in the
automotive industry at Firestone
and then Federal-Mogul, with varied
experience in sales, marketing and
general management roles, both at
regional and global levels. In 2008
he crossed over from the Client
side to focus on strategic business
development within Bray Leino. He was
appointed to the Board in April 2011.
8: Robert Day
Executive Director
Robert is Chief Executive of ThinkBDW,
a company he founded as Robert Day
Associates in 1987 at the age of 22.
Re-branding as ThinkBDW in 2004,
Robert has led the company to its
position as the leading property
marketing specialist in the UK.
The business was acquired by
in March 2007 and
Robert joined the Board in April 2010.
9: Stephen Boyd
Senior Independent
Non-Executive Director
Stephen is currently Chairman of
two AIM-listed companies, Pittards
plc and Pure Wafer plc, in addition
to owning a number of private
companies. Stephen has a broad and
extensive base of experience in the
UK, Europe, USA and overseas and
brings additional depth in corporate
finance. Stephen was appointed to
the Board in December 2009.
10: Giles Lee
Executive Director
Giles joined Bray Leino in 2005 as
Group Finance Director following
his successful role in transforming
Merrydown plc from its fundamental
financial restructure in 2000 up
to its acquisition in 2005. Since
joining Bray Leino, Giles has
overseen nine acquisitions and a
number of strategic investments.
Giles was appointed CFO/COO of
Bray Leino in 2011 and Executive
Chairman in 2013, alongside a strong
management team. He was appointed
to the Board on 5 March 2013.
11: Peter Fitzwilliam
Finance Director
Peter is a Chartered Accountant
with over 25 years’ financial and
management advisory experience in
both private and quoted companies
across a range of industry sectors. He
was Finance Director of Business Post
Group plc (now UK Mail Group plc)
from 1999 to 2006 and helped take
it into the FTSE 250. Peter supported
through its refinancing
in April 2010 and was appointed to
the Board in September 2010.
marketing group plc 2013 annual report
chairman’s statement
Richmond
Singapore
San Francisco
marketing group plc 2013 annual report
chairman’s statement
15 | 16
chairman’s
statement david
morgan
Dear shareholder,
All’s well that ends well.
At the outset of the year I had hoped that
2013 would have been a bumper year for
. A lollapalooza indeed. What
transpired was a year in which we cleared
up a number of issues that affected
us in the first half. Having done so, I’m
delighted to report that not only did we
still hit our numbers, we are now in
a far better position to build from.
So, in some respects 2013 was a
transitional year, yet we continued to
grow our business, improve our balance
sheet and strengthen our resources.
Of our eleven operating units, seven hit or
exceeded forecast, two fell slightly short
and two reduced profitability largely through
no fault of their own. Some great Client
gains during the year were only eclipsed by
increased assignments from existing Clients
and the introduction of new skill sets that
have added to our resources, thereby further
confirming our ability to deliver truly integrated
campaigns wherever and for whomever.
Whilst our Agencies act like boutiques, they
are supported by resources that allow them
to compete at any level and, as a group, they
work remarkably well together. Through
shared and conterminous ambitions.
During the year we brought further clarity to
our portfolio by creating three distinct Agency
groupings. On the one side are our Integrated
Generalist Agencies, which offer a wide range of
communications disciplines, all under one roof,
with one strategy, consistently delivered by one
team. On the other are our Activity and Sector
Specialist Agencies, for those occasions on
which Clients want specialists. The great thing
about having a Group that comprises both is
that everyone can have their cake and eat it.
The Healthcare sector has long since been
an area of speciality within some of our
Agencies and the acquisition of the specialist
Richmond-based medical Agency, Solaris
towards the back end of the year, will be
pivotal to us as we grow our business in
this area. Equally, the opening of our April-
Six office in San Francisco, to support our
technology Clients, is already paying off,
as is our most recent venture, to create a
Far East office to support our group and,
specifically Bray Leino Clients, from Singapore.
We remain committed to building
and to continue that journey by supporting
our Agencies in a risk-reduced and
streamlined way. In 2013 we were able to
return to dividends, albeit modest, whilst
making further significant strides to pay down
our inherited debt. We have also enhanced
our reputation and resources, and attracted
like-minded individuals into the group.
All of which bodes well for the future.
Early signs for 2014 are, therefore, very positive.
If I were a Client I would use our Agencies
simply because they are determined
in what they do, refreshingly honest to
deal with (no room for lickspittles here)
and passionate in their quest to make
their Clients famous and successful.
We genuinely do have our ‘Own Ideas’
on how our Group should operate. We aren’t
abecedarian in our approach but we do have
a shared vision, and whilst we may be quirky,
we believe that we are on the right course to
make
a clear marketing services
leader in the UK and beyond.
David Morgan
Chairman
25 March 2014
marketing group plc 2013 annual report
financial highlights
operating income (‘revenue’):
up9%to
£51.6m
2013 was something of a transitional year for
. In the first half
of the year, we cleared up a number of tricky issues but by the end of the
year we were in a far better position to build from. We continued to grow
our business, extend our range of services and improve our balance sheet,
whilst at the same time return to dividends after a five-year hiatus.
With the exception of profit margins in the first half of the year,
we have again achieved our key performance targets:
Key performance
measure
Target
Achieved
in 2013?
Achievement
in 2013
Operating
income
Operating profit
margins
Yes
Increase each
year, from both
organic growth
and acquisition
In part
Achieve levels
at least in line
with industry
averages
Headline profits
before tax
Grow year-
on-year
Ratio of net debt
to EBITDA
Maintain
below x2
Yes
Yes
9% growth achieved,
with balloon dog
contributing strongly
Margins in the first
six months dropped
to 8%, which is
below average,
due to unusual
circumstances, but
recovered strongly
in the second half
of the year, to 14%
Increase of 3%
achieved
Debt leverage ratio
further reduced,
to x1.5 at 31
December 2013
interim dividend of:
0.25p
(2012: nil)
paid
final dividend:
0.75p
proposed
(2012: nil)
headline diluted eps:
4.5p
(2012: 4.5p)
marketing group plc 2013 annual report
financial highlights
17 | 18
headline operating profit:
headline profit before tax:
down 4%to£5.7m
up 3%to£5.0m
£0.7m £1.6m
net bank debt reduced by:
sharp reduction in interest costs:
(2012: £1.1m)
(to £10.7m)
marketing group plc 2013 annual report
strategic report
strategic report
Aims and Ambition
Our mission is simple: to work together to make our
Clients’ brands and businesses more valuable; and fuelled
by their success, to grow
respected and influential creative communications group.
into the nation’s most
We aim to reward shareholders both through capital
growth and dividends, and to provide a rewarding and
fun environment for our staff. We will grow first and
foremost by organic growth but we will add services,
expertise and talent where we find it complementary
to our objectives and financially affordable. Although
primarily operating in the UK, we will continue to develop
our international footprint in response to Client demand
and where we see strong opportunities to leverage our
well-established UK strengths elsewhere in the world.
We will maintain a balance of equity and debt financing
to give shareholders the advantages of financial leverage
but without placing the business at financial risk.
Risks and Uncertainties
The Group’s principal operating risks and uncertainties are:
• the sustainability of its business model,
• the health of the UK economy, and
• the retention of key Clients and staff.
We believe that our business model, of being a UK-
centric network of entrepreneurial Agencies situated
largely outside central London, gives
competitive advantage. Clients can both access top-flight
people who have made a non-London lifestyle choice,
and also benefit from our lower establishment costs. Our
ability to generate new business growth year after year
suggests that this is a successful business model but we
maintain close relationships with our Clients to ensure
that we continue to meet their requirements, and we
keep the structure of the Group under regular review.
a real
Although recent press commentary suggests that things are
improving, the UK economy remains fragile; there is a risk
that any recovery is illusory or short-lived, having an adverse
effect on the Group’s performance in the future and delaying
the Group’s growth ambitions. The Group makes efforts to
mitigate any adverse impact through strenuous new business
activity and by minimising overheads wherever possible,
always recognising that there is a level below which overheads
cannot be reduced without Client service being affected.
There are many reasons why a Client changes its
communications agency, several of which are outside our
control. The risk of Client loss as a result of something
we can control is mitigated by the efforts of dedicated
account teams, who strive to ensure the quality of work
we do meets or exceeds our Clients’ expectations at all
times, and who modify our approach when necessary.
The risk of Client loss for reasons beyond our control
is mitigated by the Group’s broad spread of Clients,
which limits its exposure to any individual loss. No Client
represents more than 10% of Group operating income.
In common with all service businesses, the Group is reliant on
the quality of its staff. Strenuous efforts are made to provide
a rewarding work environment and remuneration package
to retain and motivate our leadership teams. The system
of financial rewards is reviewed regularly by the Board.
Key Performance Indicators
The Group manages its internal operational performance
by monitoring various key performance indicators
(“KPIs’’). The KPIs are tailored to the level at which
they are used and their purpose. The Group’s current
KPIs, which are quantified and commented on in the
Business and Financial Review of the Year below, are:
• operating income (“revenue”), which the
Group aims to increase year-on-year both via
organic growth and from acquisitions;
• operating profit margins, where the Group aims to
achieve levels at least in line with industry averages;
• headline profits before tax, which the Group
aims to increase year-on-year; and
• the ratio of net debt to EBITDA, which the
Group is aiming to maintain below x2.0.
At the individual Agency level, the Group’s KPIs comprise
revenue and profitability measures, predominantly
the achievement of annual budget. More detailed
KPIs are applied within individual Agencies.
Business and Financial Review of the Year
A review of the business and the future developments
is provided below and in the Chairman’s Statement,
which forms part of this Strategic Report.
Although recent economic news is positive, our experience
of 2013 was that our sector remained in challenging
times. Marketing budgets remained under tight scrutiny,
pitches for new business were frequently long and drawn
out and all too often resulted in nothing other than an
opportunity for companies to test the market and make
the incumbent Agency sharpen its prices yet again.
Against this backdrop, we are pleased to report results
for the year ended 31 December 2013 which show us
making real progress.
To use a footballing analogy, it was a game of two halves.
Our initial expectations were that the balance of profits across
the year would be largely similar to previous years, with a
modest bias towards the second half. The reality has been
quite different. The first half was hit hard by B&Q’s decision
to move its business away from Addiction, and the dramatic
marketing group plc 2013 annual report
strategic report
19 | 20
reduction in expected revenues from new Client Aviva. This
necessitated a costly restructuring of Bray Leino’s London
activities. In addition, a number of Client delays and deferrals
held back our revenues in this period, the combination of
which resulted in a year-on-year decline in profits.
The second half of the year, in contrast, saw the benefits
of the restructuring, some good underlying growth and
the benefit of the unblocking of the H1 delays and deferrals,
resulting in a strong H2 year-on-year increase in profit.
All in all, it has been a good achievement to deliver
headline profits ahead of 2012 and the prospects
for 2014 are that we will show further progress.
Trading, Statement of Income and Dividend
Turnover was 6% higher than the previous year, at £124.1m
(2012: £117.0m), primarily reflecting the full year effect of the
acquisition of balloon dog in September 2012. Turnover is
a measure of how much Clients are billed. But since billings
include pass-through costs (eg TV companies’ charges for
buying air-time), the Board does not consider turnover to
be a key performance measure. Instead, the Board views
operating income (turnover less third party costs) as a
more meaningful measure of Agency activity levels.
Operating income (“revenue”) increased 9% to £51.6m (2012:
£47.5m), achieving the first of our KPIs, driven by the full year
contribution from balloon dog and the acquisition of Solaris
Healthcare Network Limited (“Solaris”) with effect from 30
September 2013. Like-for-like revenue was flat year-on-year,
reflecting the net effect of some significant changes in the
make up of our Client list. Most notably, the loss of B&Q and the
dramatic reduction in expected revenues from Aviva in the first
half of the year had a significant negative impact on revenues,
as did the decision by two of our Top 20 Clients to switch
Agency during the year. In contrast, Harley-Davidson became
one of our Top 20 Clients and the second half of the year
saw good growth from some existing Clients and a number
of encouraging new business wins. As we exited 2013, the
prospects for further revenue growth in 2014 looked strong.
The Directors measure the Group’s profit performance by
reference to headline profits, calculated before exceptional
costs and the deduction of amortisation of intangibles and
professional fees associated with acquisitions (as set out in
Note 3). Headline operating profit decreased by 4% to £5.7m
for the year as a whole (2012: £6.0m), but this reflects two
very different pictures in H1 and H2. Profit margins in the first
half (headline operating profit as a percentage of revenue)
fell to 8% (first half 2012: 12%) as a result of the challenges
explained above, and resulting in us missing our second KPI,
but recovered to 14% in the second half (second half 2012:
13%) as revenues increased and overheads were trimmed
back. Some of this improvement is due to the phasing
of Client revenues across the year and, to this extent, is
unlikely to be sustained into 2014. However, the reduction in
overhead costs which resulted from the restructuring which
took place in H1 will benefit 2014 and we expect a year-on-
year improvement in profit margins in the year ahead.
Generally speaking, our Clients’ spending cycles
tend to result in a second half bias in our financial
results. We expect 2014 to be no different.
Further good progress was made in 2013 to reduce the
Group’s interest burden, both through a further reduction
in net debt and also from the reduction in interest margins
which has flowed from the reduction in our leverage
ratio (see below for definition). As a result, net interest
costs reduced by over a third to £0.7m (2012: £1.1m).
After financing costs, headline profit before tax increased by
3% to £5.0m (2012: £4.9m), achieving the third of our KPIs.
Reported profit before tax decreased by 33% to £3.2m
(2012: £4.7m) after the deduction of exceptional items
of £1.5m and amortisation charges and professional
fees totaling £0.4m relating to acquisitions made in 2013
and prior years. In 2012, £0.2m of headline adjustments
were made, for amortisation and professional fees.
Exceptional items in 2013 mainly comprised the costs
of restructuring Bray Leino’s London operations and
the non-cash write-off of intangibles arising on the
acquisition of Addiction, offset by a reduction in
estimated contingent acquisition consideration.
The headline diluted EPS was 4.45 pence (2012: 4.54 pence).
Having recommenced the payment of dividends in
a modest way at the interim stage in 2013, the Board
recommends a final dividend of 0.75 pence per share,
bringing the total for the year to 1.00 pence per share.
The final dividend will be payable on 21 July 2014 to
shareholders on the register at 11 July 2014. The Board will
continue to keep under regular review the best use of the
Group’s cash resources but it is the Board’s intention to
increase both interim and final dividends in future years.
Balance Sheet and Cash Flow
The Group’s balance sheet has been further strengthened
during the year by a reduction in net debt and a reduction
in gearing ratios. Working capital reduced for the third
time in the last four years, contributing to a reduction in
net bank debt of a further £1.6m, to £10.7m (2012: £12.3m).
This compares with £13.9m of committed term facilities,
together with an overdraft facility of £3.0m, representing
a comfortable level of headroom. Our gearing ratio (net
debt to equity) reduced from 20% last year to 17% at 31
December 2013 and the Group’s “leverage ratio” (ratio
of net bank debt to headline EBITDA) fell further, to
x1.5 at 31 December 2013, achieving our fourth KPI.
At 31 December 2013, the Board undertook its annual
assessment of the value of goodwill, explained further in
Note 12, and concluded that no further impairment in the
carrying value was required. Capital expenditure, at £1.2m,
was unchanged from 2012 and in line with depreciation.
During the year, the Group explored a number of
opportunities to strengthen its services and extend its
reach but in the end completed only one deal,
the acquisition of Solaris, towards the end of the year.
Although modest in initial financial outlay, we are
hopeful that the combination of Solaris with our existing
healthcare activities will be a 2 plus 2 equals 5 deal.
Taxation
The Group’s effective tax rate was 25.5% (2012: 27.9%).
The Group’s effective tax rate is normally above the
statutory rate due to non-deductible staff and Client-
related expenditure, and 2013, was no exception.
On behalf of the Board
Peter Fitzwilliam
Finance Director
25 March 2014
marketing group plc 2013 annual report
report of the directors
report of
the directors
The Directors have pleasure in presenting their report and
the financial statements of The Mission Marketing Group
plc (“
”) for the year ended 31 December 2013.
A number of disclosures previously included in the Directors’
Report are now included in the Strategic Report. These
include Business Review and Principal Risks and Uncertainties.
Directors
The following Directors held office during the year:
Dylan Bogg
Stephen Boyd
James Clifton
Robert Day
Peter Fitzwilliam
Christopher Goodwin
Bruce Hutton – resigned 28 February 2013
Giles Lee – appointed 5 March 2013
David Morgan
Christopher Morris
Sue Mullen
Fiona Shepherd
Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report and the Group financial statements in accordance
with applicable law and International Financial Reporting
Standards as adopted by the European Union, and the
Company financial statements in accordance with applicable
law and United Kingdom accounting standards (United
Kingdom Generally Accepted Accounting Practice).
International Accounting Standard 1 requires that financial
statements present fairly, for each financial period, the
Group’s financial position, financial performance and cash
flows. This requires the faithful representation of the effects
of transactions, other events and conditions in accordance
with the definitions and recognition criteria for assets,
liabilities, income and expenses set out in the International
Accounting Standards Board’s “Framework for the Preparation
and Presentation of Financial Statements”. In virtually all
circumstances, a fair presentation will be achieved by
compliance with all applicable International Financial
Reporting Standards. A fair presentation also requires
the Directors to:
• consistently select and apply appropriate accounting
policies;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information; and
• provide additional disclosures when compliance with
specific requirements in IFRS is insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the entity’s financial position and
financial performance.
Company law requires the Directors to prepare Group and
Company financial statements for each financial year. The
Directors must not approve the financial statements unless
they are satisfied they give a true and fair view of the state of
affairs of the Group and Company and the profit or loss of the
Group for that period. In preparing the financial statements of
the Company under UK GAAP, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
marketing group plc 2013 annual report
report of the directors
21 | 22
The Directors are responsible for keeping adequate
accounting records that disclose with reasonable
accuracy at any time the financial position of the
Group and the Company and enable them to
ensure that the financial statements comply with
the Companies Act 2006. They are also responsible
for safeguarding the assets of the Group and the
Company and hence for taking reasonable steps
for the prevention and detection of fraud and
other irregularities.
The Directors are responsible for the maintenance
and integrity of the corporate and financial
information included on the Group’s website.
Legislation in the United Kingdom governing the
preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Going Concern
The Directors have considered the financial
projections for the Group, including cash flow
forecasts, the availability of committed bank facilities
and the headroom against covenant tests for the
coming 12 months. They are satisfied that, taking
account of reasonably possible changes in trading
performance, the Company and Group have adequate
resources for the foreseeable future and therefore
it is appropriate to adopt the going concern basis in
preparing the financial statements.
Directors’ Indemnity Insurance
As permitted by Section 233 of the Companies Act
2006, the Company has purchased insurance cover
on behalf of the Directors, indemnifying them against
certain liabilities which may be incurred by them in
relation to the Company.
Share Capital
The issued share capital of the Company at the date of this report is
76,990,940 Ordinary shares. The total number of voting rights in the
Company is 76,990,940.
Substantial Shareholdings
Other than the Directors’ interests disclosed below, as at 25 March
2014, notification had been received of the following interests in
3% or more of the issued share capital of the Company:
Number of shares %
Herald Investment Management Ltd
4,500,000
Polar Capital Forager Fund Ltd
Nicholas Bacon
3,995,000
2,449,648
5.84
5.19
3.18
Directors’ Interests in Shares and Options
The interests of the Directors and their families in the shares of
the Company were as follows:
Number of ordinary shares of 10p each
31 December 2013
31 December 2012
or on appointment
Dylan Bogg
Stephen Boyd
James Clifton
Robert Day
Peter Fitzwilliam
Christopher Goodwin
Giles Lee
David Morgan
Christopher Morris
Sue Mullen
Fiona Shepherd
1,439,323
109,918
165,113
6,086,955
619,481
373,047
701,158
6,059,875
1,001,009
1,078,254
1,254,173
1,358,323
319,918
90,048
6,008,138
506,481
191,635
609,358
5,939,875
951,509
1,065,204
1,235,273
marketing group plc 2013 annual report
report of the directors (cont)
The following unexercised options over shares were held by Directors:
Directors
At 1 January 2013
(or on appointment)
Lapsed
in year
Exercised
in year
Granted
in year
At 31 December
2013
Date from which
exercisable
Expiry
date
Dylan Bogg
90,000*
(9,000)
(81,000)
James Clifton
Robert Day
Peter Fitzwilliam
Chris Goodwin
60,000
70,000
-
-
-
-
-
-
-
-
-
-
60,000
(6,000)
(54,000)
157,000
96,667
-
50,000
40,000
-
20,000
40,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Giles Lee
75,000*
(7,500)
(67,500)
27,000
(2,700)
(24,300)
100,000
100,000
-
-
-
-
-
-
-
Chris Morris
55,000*
(5,500)
(49,500)
David Morgan
28,000
40,000
-
50,000
40,000
-
-
-
-
-
-
-
-
-
-
-
-
-
Sue Mullen
25,000
(2,500)
(22,500)
10,000
20,000
-
-
-
-
-
-
-
Fiona Shepherd
21,000
(2,100)
(18,900)
40,000
40,000
-
-
-
-
-
-
-
-
-
-
30,000
56,000
-
-
-
-
July 2013
60,000
70,000
30,000
56,000
July 2014
July 2015
July 2016
July 2016
July 2019
July 2021
July 2022
July 2023
July 2023
-
July 2013
July 2020
157,000
July 2014
July 2021
96,667
July 2015
July 2022
110,000
110,000
July 2016
-
-
50,000
-
-
35,000
-
-
-
-
50,000
40,000
50,000
20,000
40,000
35,000
-
-
100,000
100,000
July 2014
July 2015
July 2016
July 2014
July 2015
July 2016
July 2013
July 2013
July 2014
July 2015
70,000
70,000
July 2016
-
-
-
50,000
-
-
50,000
-
-
-
22,500
-
-
-
50,000
-
July 2013
28,000
40,000
50,000
50,000
40,000
50,000
July 2014
July 2015
July 2016
July 2014
July 2015
July 2016
-
July 2013
July 2020
10,000
20,000
22,500
July 2014
July 2015
July 2016
July 2021
July 2022
July 2023
-
July 2013
July 2020
40,000
40,000
50,000
July 2014
July 2015
July 2016
July 2021
July 2022
July 2023
July 2023
July 2021
July 2022
July 2023
July 2021
July 2022
July 2023
July 2019
July 2020
July 2021
July 2022
July 2023
July 2019
July 2021
July 2022
July 2023
July 2021
July 2022
July 2023
All share options in existence at 31 December 2013 are nil-cost options granted under the Company’s Long Term Incentive Plan.
* The vesting conditions applying to options granted in 2009 were simplified to make them dependent upon the achievement of
profit targets over the three year period ending 31 December 2012, consistent with options granted in 2010.
Options granted in 2013 are dependent upon the achievement of profit targets over the three year period ending 31 December
2015. In all cases, the vesting of share options is at the overriding discretion of the independent members of the Remuneration
Committee.
marketing group plc 2013 annual report
report of the directors (cont)
23 | 24
Corporate Governance
Disclosure of Information to Auditors
The Directors provide a separate Corporate Governance
Report, which forms part of this Report of the Directors.
Post Balance Sheet Events
There were no material post balance sheet events.
Future Developments
An indication of likely future developments in the business
of the Group is provided in the Chairman’s Statement and
Strategic Report.
The Environment
The business of the Group is delivering marketing and
advertising related services to Clients. The direct and indirect
impact of these services on the environment is negligible
and considered low risk, however we continue to take
action to reduce our environmental impact where viable.
Employee Policies
It is the Group’s policy not to discriminate between
employees or potential employees on any grounds.
The Group is committed to full and fair consideration of
all applications. Selection of employees for recruitment,
training, development and promotion is based on their
skills, abilities and relevant requirements for the job.
The Group places considerable value on the involvement
of its employees and has continued its previous practice
of keeping them informed on matters affecting them as
employees and on various factors affecting the performance
of the Group. Employees are consulted regularly on a wide
range of matters affecting their current and future interests.
Applications for employment by disabled persons are always
fully considered, bearing in mind the aptitudes and abilities
of the applicant concerned. In the event of members of
staff becoming disabled, every effort is made to ensure
their employment with the Group continues and that the
appropriate training is arranged. It is the policy of the Group
that the training, career development and promotion of
disabled persons should, as far as possible, be identical to
that of other employees.
So far as each of the current Directors is aware, there is no
information needed by the Group’s auditors in connection
with the preparation of their audit report of which the Group’s
auditors are unaware. Each of the Directors has taken all
steps that he or she ought to have taken as a Director in
order to make himself or herself aware of any relevant audit
information and to establish that the Group’s auditors are
aware of that information.
Financial Risk Exposure and Management
As a communications Agency group, the main financial
risks that arise from day-to-day activities are credit and
currency risk. The Group’s policy is to eliminate risk where
it is cost-effective, including the use of credit insurance and
currency hedges, and to mitigate it where not, including
close monitoring of credit-worthiness and the use of Client
payment plans if possible. The Group’s policy is not to use
any financial instruments for speculating.
In common with any business, the Group is exposed
to cash flow risk if the capital structure is not balanced
(relative proportions of debt and equity, and the availability
of cash resources). Several years ago, the Group had too
much debt and its ability to continue as a going concern
was seriously endangered, but has progressively reduced
debt, increased equity and secured banking facilities which
provide comfortable levels of headroom within the Group’s
covenants. The Group’s policy is to maintain a balance
of equity and debt financing to give shareholders the
advantages of financial leverage but without placing the
business at financial risk.
Dividends
The Group paid a dividend of 0.25 pence per share in
December 2013 and the Board recommends the payment
of a final dividend of 0.75 pence, subject to approval by
shareholders at the Annual General Meeting.
Annual General Meeting
A notice convening the Annual General Meeting to be held on
Monday 16 June 2014 at 12 noon is enclosed with this report.
Political Donations
The Group did not make any political donations during
the year.
On behalf of the Board
Peter Fitzwilliam
Finance Director
25 March 2014
Auditors
Francis Clark LLP have indicated their willingness to continue
in office and, in accordance with the provisions of the
Companies Act 2006, it is proposed that they be re-appointed
auditors to the Company for the ensuing year.
marketing group plc 2013 annual report
corporate governance
corporate
governance
The Board of The Mission Marketing
Group plc is collectively accountable
to the Company’s shareholders for
good corporate governance. As an
AIM-listed company, is
not required to comply with the
UK Corporate Governance Code
(September 2012) (the “Code”) but
has regard to it as far as is practicable
and appropriate for a public
company of its size and nature.
Board of Directors
At 31 December 2013, the Board
consisted of an Executive Chairman,
eight Executive Directors and two
Non-Executive Directors. Following
the refinancing completed in April
2010 and the resultant transition to an
operator-led focus, with the emphasis
on organic growth and cost reductions,
the Board considered it appropriate
to appoint the CEOs of each of the
Group’s principal Agencies, most of
whom are the original founders of
those Agencies, to the Board and to
elect David Morgan, the founder of the
Group’s largest Agency, as Executive
Chairman. The Directors periodically
re-consider the structure of the Board in
the light of acquisitions and expansion
and believe the structure established
in 2010 remains appropriate. David
Morgan is well regarded both within
and within the industry
and the Board continues to believe
that, although combining the roles of
Chairman and Chief Executive does not
meet “best practice” under the Code,
his role as Executive Chairman remains
appropriate for the circumstances
and that introducing a separate Chief
Executive would disturb the balance
of an entrepreneurial Board, still
largely comprising original vendors.
Stephen Boyd and Christopher
Morris are Non-Executive Directors
and, although Chris provides some
consulting services to the Group,
which are not significant in financial
value, both are considered to be
independent of management
by virtue of their attitude.
The Directors are collectively
responsible for the strategic direction,
investment decisions and effective
control of the Group. There is a
schedule of matters reserved for Board
approval which includes, amongst
other things, approval of the Group’s
annual budget, acquisition of new
subsidiaries, property leases, significant
acquisitions or disposals of fixed assets
and material Client contracts. The Board
meets in person most months and
has regular telephonic and electronic
contact in between meetings.
The Board is satisfied that it
receives information of a quality
and to a timetable that permits
it to discharge its duties.
All Directors are subject to election by
shareholders at the first opportunity
after their appointment. They are
required to retire every three years
and may seek re-appointment.
The Board has established three
committees to deal with specific
aspects of the Group’s affairs.
Audit Committee
The Audit Committee consists of
the two independent Non-Executive
Directors, with Stephen Boyd as
Chairman. The Committee considers
matters relating to the reporting of
results, financial controls and the cost
and effectiveness of the audit process.
It aims to meet at least twice a year
with the Group’s external auditors in
attendance. Other Directors attend as
required. The terms of reference of the
Committee are available on request.
The Audit Committee is satisfied that
the Group’s auditors, Francis Clark LLP,
have been objective and independent
of the Group. The Group’s auditors
performed non-audit services for
the Group as outlined in Note 7 but
the Audit Committee is satisfied that
their objectivity and independence
was not impaired by such work.
Remuneration Committee
The Remuneration Committee
consists of the two independent
Non-Executive Directors, with Stephen
Boyd as Chairman. The Committee
determines the remuneration of
the Executive Directors and makes
recommendations to the Board with
regard to remuneration policy and
related matters. The Board maintains
a policy of providing executive
remuneration packages that will attract,
motivate and retain Directors of the
calibre necessary to deliver the Group’s
growth strategy and to reward them
for enhancing shareholder value.
The Executive Directors’ remuneration
packages consist of three elements:
• basic salary and benefit package
• performance related bonus – the
Group operates a performance-
related bonus scheme, related to
the delivery of profit targets
• share option incentives – details
of share options granted to the
Executive Directors at the discretion
of the Remuneration Committee
are shown in the Directors’ report.
marketing group plc 2013 annual report
corporate governance
25 | 26
The Remuneration Committee reviews
the components of each Executive
Director’s remuneration package
annually. The remuneration and
terms and conditions of appointment
of the Non-Executive Directors are
determined by the Board. No Director
is involved in setting his or her own
remuneration. The Remuneration
Committee meets as and when
required. The terms of reference of the
Committee are available on request.
Nomination Committee
The Nomination Committee consists
of the Group’s Executive Chairman,
David Morgan, as the Committee
Chairman, and the two Non-Executive
Directors. The Committee is responsible
for reviewing and making proposals
to the Board on the appointment of
Directors and meets as necessary.
The terms of reference of the
Committee are available on request.
Shareholder Communications
The Company believes in good
communication with shareholders.
The Board encourages shareholders
to attend its Annual General Meeting.
The Chairman and the Finance
Director meet analysts and institutional
shareholders periodically in order
to ensure that the strategy and
performance of the Group are clearly
understood, and they provide the
first point of contact for any queries
raised by shareholders. In the event
that these Directors fail to resolve any
queries, or where a Non-Executive
Director is more appropriate, the Senior
Independent Director, Stephen Boyd,
is available to meet shareholders.
Internal Financial Control
The Board is responsible for ensuring
that the Group maintains a system of
internal financial controls. The objective
of the system is to safeguard Group
assets, ensure proper accounting
records are maintained and that the
financial information used within
the business and for publication is
timely and reliable. Any such system
can only provide reasonable, but
not absolute, assurance against
material loss or misstatement.
The Board does not consider it would
be appropriate to have its own internal
audit function at the present time,
given the Group’s size and the nature
of its business. At present the internal
audit of internal financial controls
forms part of the responsibilities
of the Group’s finance function.
All the day-to-day operational decisions
are taken initially by the Executive
Directors, in accordance with the
Group’s strategy. The Executive
Directors are also responsible for
initiating commercial transactions and
approving payments, save for those
relating to their own employment.
The key internal controls include the
specific levels of delegated authority
and the segregation of duties; the
prior approval of all acquisitions;
the review of pertinent commercial,
financial and other information by
the Board on a regular basis; the prior
approval of all significant strategic
decisions and maintaining a formal
strategy for business activities.
Summary of Directors’ Attendance
Board Meetings
Remuneration Committee
Audit Committee
Entitled
to attend
Attended
Entitled
to attend
Attended
Entitled
to attend
Attended
Dylan Bogg
Stephen Boyd
James Clifton
Robert Day
Peter Fitzwilliam
Chris Goodwin
Bruce Hutton
Giles Lee
David Morgan
Chris Morris
Sue Mullen
Fiona Shepherd
9
9
9
9
9
9
1
8
9
9
9
9
8
8
9
9
9
9
-
8
7
9
7
8
n/a
2
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2
n/a
n/a
n/a
2
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2
n/a
n/a
n/a
3
n/a
n/a
n/a
n/a
n/a
n/a
n/a
3
n/a
n/a
n/a
3
n/a
n/a
n/a
n/a
n/a
n/a
n/a
3
n/a
n/a
The appointment of Giles Lee, Executive Chairman of Bray Leino, to the Board was considered by the full Board and,
consequently, the Nomination Committee did not meet separately during the year.
On behalf of the Board, Peter Fitzwilliam
Finance Director, 25 March 2014
marketing group plc 2013 annual report
financial statements
Independent Auditor’s Report to the Members of The Mission Marketing Group plc
We have audited the financial statements of The Mission Marketing Group plc for the year ended 31 December 2013 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Consolidated Cash
Flow Statement, the Consolidated Statement of Changes in Equity and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
This report is made solely to the Company’s shareholders, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s shareholders those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders as a
body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 21 the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit
and express an opinion on the financial statements in accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards
for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting policies are appropriate to the Group’s circumstances and have
been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the
directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial
information in the annual report to identify material inconsistencies with the audited financial statements. If we become
aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the Group financial statements:
• give a true and fair view of the state of the Group’s affairs as at 31 December 2013 and of its profit for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the
consolidated financial statements are prepared is consistent with the consolidated financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if,
in our opinion:
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the parent company financial statements of The Mission Marketing Group plc for the year
ended 31 December 2013.
Christopher Hicks BA FCA (Senior Statutory Auditor)
For and on behalf of Francis Clark LLP
Chartered Accountants and Statutory Auditors
Sigma House
Oak View Close
Edginswell Park
Torquay
TQ2 7FF
25 March 2014
marketing group plc 2013 annual report
financial statements
27 | 28
Consolidated Statement of Comprehensive Income for the year ended 31 December 2013
TURNOVER
Cost of sales
OPERATING INCOME
Operating expenses before exceptional items
OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS
Exceptional items
OPERATING PROFIT
Investment income
Finance costs
PROFIT BEFORE TAXATION
Taxation
PROFIT FOR THE YEAR
Other comprehensive income
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Basic earnings per share (pence)
Diluted earnings per share (pence)
Headline basic earnings per share (pence)
Headline diluted earnings per share (pence)
Year to 31
December
2013
Year to
31 December
2012
Note
£’000
£’000
2
2
4
5
6
7
9
11
11
11
11
124,090
(72,496)
51,594
(46,230)
5,364
(1,512)
3,852
1
(696)
3,157
(804)
2,353
-
2,353
3.11
2.87
4.82
4.45
116,970
(69,446)
47,524
(41,736)
5,788
-
5,788
9
(1,113)
4,684
(1,306)
3,378
-
3,378
4.68
4.33
4.91
4.54
The earnings per share figures derive from continuing and total operations.
marketing group plc 2013 annual report
financial statements
Consolidated Balance Sheet as at 31 December 2013
FIXED ASSETS
Intangible assets
Property, plant and equipment
CURRENT ASSETS
Stock and work in progress
Trade and other receivables
Cash and short term deposits
CURRENT LIABILITIES
Trade and other payables
Accruals
Corporation tax payable
Bank loans
Acquisition obligations
NET CURRENT ASSETS / (LIABILITIES)
TOTAL ASSETS LESS CURRENT LIABILITIES
NON CURRENT LIABILITIES
Bank loans
Obligations under finance leases
Acquisition obligations
Deferred tax liabilities
NET ASSETS
CAPITAL AND RESERVES
Called up share capital
Share premium account
Own shares
Share option reserve
Retained earnings
TOTAL EQUITY
As at
31 December
2013
As at
31 December
2012
Note
£’000
£’000
12
14
15
16
17
18
20.1
18
19
20.1
21
2
23
24
25
72,525
3,479
76,004
365
20,751
571
21,687
(11,067)
(7,035)
(627)
(1,714)
(375)
(20,818)
869
76,873
(9,573)
-
(2,451)
-
(12,024)
64,849
7,699
40,288
(462)
614
16,710
64,849
71,433
3,230
74,663
921
24,364
546
25,831
(13,625)
(7,541)
(1,359)
(2,286)
(1,124)
(25,935)
(104)
74,559
(10,596)
(69)
(1,210)
-
(11,875)
62,684
7,699
40,288
(1,201)
441
15,457
62,684
The financial statements were approved and authorised for issue on 25 March 2014 by the Board of Directors.
They were signed on its behalf by:
Peter Fitzwilliam
Finance Director
Company registration number: 05733632
marketing group plc 2013 annual report
financial statements
29 | 30
Consolidated Cash Flow Statement for the year ended 31 December 2013
Operating profit
Depreciation and amortisation charges
Goodwill and intangibles impairment charges
Net gain on remeasurement of contingent consideration
Loss on disposal of property, plant and equipment
Non cash charge for share options and shares awarded
Decrease / (increase) in receivables
Decrease in stock and work in progress
(Decrease) / increase in payables
OPERATING CASH FLOWS
Net finance costs
Tax paid
Net cash inflow from operating activities
INVESTING ACTIVITIES
Proceeds on disposal of property, plant and equipment
Purchase of property, plant and equipment
Acquisition of subsidiaries
Adjustment to cost of acquisition of subsidiaries
Cash acquired with subsidiaries
Acquisition of intangibles
Adjustment to cost of intangibles acquired
Net cash outflow from investing activities
FINANCING ACTIVITIES
Dividends paid
Movement in finance leases
Payment of acquisition obligations
Repayment of long term bank loans
Proceeds on issue of ordinary share capital
Purchase of own shares held in EBT
Net cash outflow from financing activities
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Year to
31 December
2013
Year to
31 December
2012
£’000
£’000
3,852
1,540
442
(660)
1
173
3,860
172
(3,194)
6,186
(467)
(1,556)
4,163
148
(1,240)
(97)
94
18
(65)
(27)
(1,169)
(192)
(136)
(550)
(1,785)
-
(306)
(2,969)
25
546
571
5,788
1,081
-
-
1
178
(2,313)
103
403
5,241
(884)
(1,156)
3,201
2
(1,234)
(728)
-
741
(5)
-
(1,224)
-
109
-
(2,979)
1,124
-
(1,746)
231
315
546
marketing group plc 2013 annual report
financial statements
Consolidated Statement of Changes in Equity for the year ended 31 December 2013
Share
capital
Share
premium
Own
shares
Share option
reserve
Retained
earnings
Total
£’000
£’000
£’000
£’000
£’000
£’000
At 1 January 2012
New shares issued
Credit for share option scheme
Shares awarded to employees
from own shares
Total Comprehensive
Income for the year
7,246
453
-
-
-
39,542
(1,234)
746
-
-
-
-
-
33
-
At 31 December 2012
7,699
40,288
(1,201)
Credit for share option scheme
Own shares purchased
Shares awarded to employees
and vendors from own shares
Total Comprehensive
Income for the year
Dividend paid
-
-
-
-
-
-
-
-
-
-
-
(306)
1,045
-
-
263
-
178
-
-
441
173
-
-
-
-
12,099
57,916
-
-
(20)
1,199
178
13
3,378
3,378
15,457
62,684
-
-
(908)
2,353
(192)
173
(306)
137
2,353
(192)
At 31 December 2013
7,699
40,288
(462)
614
16,710
64,849
marketing group plc 2013 annual report
financial statements
31 | 32
Notes to the Consolidated Financial Statements
1. Accounting Policies
Basis of preparation
The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
adopted by the European Union.
The financial statements have been prepared on the historical cost basis.
Going concern
The Group’s available banking facilities provide comfortable levels of headroom against the Group’s projected cash flows
and the Directors accordingly consider that it is appropriate to continue to adopt the going concern basis in preparing
these financial statements.
Basis of consolidation
The Group’s financial statements consolidate the financial statements of the Company and entities controlled by the
Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to
govern the financial and operating polices of an investee entity so as to obtain benefits from its activities.
On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date
of acquisition. Goodwill represents the excess of acquisition cost over the fair value of the Group’s share of the identifiable
net assets of the acquired subsidiary at the date of acquisition. Where the fair value of the identifiable net assets acquired
exceeds the cost of acquisition, any discount on acquisition is credited to profit or loss in the period of acquisition.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of
comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies used into
line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Revenue and revenue recognition
The Group’s operating subsidiaries carry out a range of different activities. The following policies apply consistently across
subsidiaries and business segments.
Turnover is in respect of the provision of services including fees, commissions, rechargeable expenses and sales of materials
performed subject to specific contracts. Where recorded turnover exceeds amounts invoiced to Clients, the excess is
classified as accrued income.
Income is taken on fee income in the period to which it relates. Project income is recognised in the period in which the
project is worked on. For projects which straddle the accounting year end, income is recognised to reflect the partial
performance of the contractual obligations in accordance with IAS 18 Revenue.
Income is recognised on the following basis:
• Retainer fees are apportioned over the time period to which they relate.
• Project income is recognised by apportioning the fees billed or billable to the time period for which those fees were
earned by relationship to the percentage of completeness of the project to which they relate.
• Media commission is recognised when the advertising has been satisfactorily aired or placed.
• Unbilled costs relating to contracts for services are included at rechargeable value in accrued income.
Share-based payment transactions
The Group has applied the requirements of IFRS 2 Share-based Payments. IFRS 2 has been applied to all grants of equity
instruments.
Equity-settled share-based payments, such as share options, are measured at fair value at the date of grant. The fair value
determined at the grant date of the equity-settled share payments is expensed on a straight-line basis over the vesting
period, based on the Group’s estimate of the number of shares that will eventually vest.
Fair value is measured by use of a Black Scholes model on the grounds that there are no market related vesting conditions.
The expected life used in the model has been adjusted, based on the management‘s best estimate, for the effects of non-
transferability, exercise restrictions and behavioural considerations. Market price on any given day is obtained from external
publicly available sources.
Pension costs
Retirement benefits to employees are provided by defined contribution schemes that are funded by the Group and
employees. Payments are made to pension trusts that are financially separate from the Group.
marketing group plc 2013 annual report
financial statements
1. Accounting Policies (cont.)
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet
date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the
transaction. Exchange differences are reflected in the profit or loss accordingly.
Goodwill and other intangible assets
Goodwill arising from the purchase of subsidiary undertakings and trade acquisitions represents the excess of the cost of
acquisition over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the
subsidiary acquired, and is capitalised in accordance with the requirements of IFRS 3. Future anticipated payments to
vendors in respect of earn-outs are based on the Directors’ best estimates of these obligations. Earn–outs are dependent on
the future performance of the relevant business and are reviewed annually.
Goodwill is not amortised, but is reviewed annually for impairment. Goodwill impairment is assessed by comparing the
carrying value of goodwill for each cash-generating unit to the future cash flows, discounted to their net present value using
an appropriate discount rate, derived from the relevant underlying assets. Where the net present value of future cash flows
is below the carrying value of goodwill, an impairment adjustment is recognised in profit or loss and is not subsequently
reversed.
Other intangible assets purchased separately, or separately identified as part of an acquisition, are amortised over periods
of between 4 and 20 years, except certain brand names which are considered to have an indefinite useful life. The value of
such brand names is not amortised, but rather an annual impairment test is applied and any shortfall in the present value
of future cash flows derived from the brand name versus the carrying value is recognised in profit and loss.
Property, plant and equipment
Tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is provided on all property, plant and
equipment at rates calculated to write off the cost, less estimated residual value based on prices prevailing at the date of
acquisition, of each asset evenly over its expected useful economic life, as follows:
Short leasehold property
Motor vehicles
Period of the lease
25% per annum
Fixtures, fittings and office equipment
10-33% per annum
Computer equipment
25-33% per annum
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or,
where shorter, the term of the relevant lease.
The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in profit or loss.
Stock and work in progress
Stock and work in progress is stated at the lower of cost and net realisable value and includes the costs of direct materials
and purchases, and the costs of direct labour. Net realisable value is based on estimated invoice value less further costs
expected to be incurred to completion.
Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is
accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the
temporary differences arise from goodwill or from 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 liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary differences and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in profit or loss, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity.
marketing group plc 2013 annual report
financial statements
33 | 34
1. Accounting Policies (cont.)
Deferred consideration
When the consideration transferred by the Group in a business combination includes liabilities resulting from a contingent
consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as
part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration
that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against
goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the
‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that
existed at the acquisition date. The subsequent accounting for changes in the fair value of the contingent consideration
that do not qualify as measurement period adjustments depends on how the contingent consideration is classified.
Contingent consideration that is classified as a liability is remeasured at subsequent reporting dates, as appropriate, with
the corresponding gain or loss being recognised in profit or loss. The deferred consideration is discounted to a present
value. The differences between the present value of the liabilities and the actual amounts payable, where material, are
charged to the profit or loss as notional finance costs over the life of the associated liability. The rate used is the risk free rate
applicable at the time of acquisition of the relevant entity.
Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to
the contractual provisions of the instrument. Issue costs are offset against the proceeds of such instruments. Financial
liabilities are released to income when the liability is extinguished.
Liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its
liabilities. The Group has only one class of share in existence.
Finance costs
Finance costs, which include interest, bank charges and the unwinding of the discount on deferred consideration, are
recognised in profit or loss in the year in which they are incurred. Bank debt renegotiation fees, where they can be amortised
over the life of the loan facility, are included in finance costs.
Accounting estimates and judgements
The Group makes estimates and judgements concerning the future and the resulting estimates may, by definition, vary from
the actual results. The Directors considered the critical accounting estimates and judgements used in the financial
statements and concluded that the main areas of judgement are:
• potential impairment of goodwill;
• contingent deferred payments in respect of acquisitions;
• revenue recognition policies in respect of contracts which straddle the year end; and
• valuation of intangible assets on acquisitions.
The potential impairment of goodwill is based on estimates of future cash flows derived from the financial projections of
each cash-generating unit over an initial three year period and assumptions about growth thereafter, discussed in more
detail in Note 12. Estimating these future cash flows is the Group’s key source of estimation uncertainty.
The terms of an acquisition may provide that the value of the purchase consideration, which may be payable in cash,
shares or other security at a future date, depends on uncertain future events, such as the future performance of the acquired
company. Where it is not possible to estimate the amounts payable with any degree of certainty, the amounts recognised
in the financial statements represent a reasonable estimate at the balance sheet date of the amounts expected to be paid.
Revenue is recognised based on an estimate of the stage of completion of contracts which straddle the year end, typically
derived from the amount of time so far committed to those contracts in relation to the total estimated time to complete them.
When considering the valuation of intangible assets on acquisitions, a range of methods is undertaken both for identifying
intangibles and placing valuations on them. Brand names, customer relationships, intellectual property rights and goodwill
are the most frequently identified intangible assets. The valuation of each element is assessed by reference to commonly
used techniques, such as “relief from royalty” and “excess earnings” and to industry leaders and competitors.
marketing group plc 2013 annual report
financial statements
1. Accounting Policies (cont.)
New standards, interpretations and amendments to existing standards
There are no material impacts arising from standards and interpretations applicable for the first time to these financial
statements, as detailed in the prior year financial statements.
The following IFRS and IFRIC Interpretations have been issued but have not been applied by the Group in preparing these
financial statements as they are not as yet effective. The Group intends to adopt these Standards and Interpretations when
they become effective, rather than adopt them early. None of these Standards and Interpretations is anticipated to have a
significant impact on the Group.
Annual periods beginning on/after 1 January 2014
• Offsetting Financial Assets and Financial Liabilities - Amendments to IAS 32
• Investment Entities Amendments to:
- IFRS 10
- IFRS 12
- IAS 27
• Novation of Derivatives and Continuation of Hedge Accounting – Amendments to IAS 39
• Recoverable Amount Disclosures for Non-Financial Assets – Amendments to IAS 36
• IFRIC 21 Levies*
Annual periods beginning on/after 1 July 2014
• Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)*
• Annual Improvements to IFRSs 2010 – 2012 cycle*
- IFRS 2 Share-Based Payment
- IFRS 3 Business Combinations
- IFRS 8 Operating Segments
- IFRS 13 Fair Value Measurement
- IAS 16 Property, Plant and Equipment
- IAS 24 Related Party Disclosures
- IAS 38 Intangible Assets
• Annual Improvements to IFRSs 2011 – 2013 cycle*
- IFRS 1 First-time Adoption of IFRSs
- IFRS 3 Business Combinations
- IFRS 13 Fair Value Measurement
- IAS 40 Investment Property
Annual periods beginning on/after 1 January 2015
• IFRS 9, Financial instruments*
*The above standards have not yet been adopted by the European Union and therefore do not form part of IFRS as adopted
by the European Union.
As the Group has elected to prepare its financial statements in accordance with IFRS as adopted by the European Union,
the application of new standards and interpretations will be subject to their having been endorsed for use in the EU via the
EU Endorsement mechanism.
marketing group plc 2013 annual report
financial statements
35 | 36
2. Segmental Information
Business segmentation
For management purposes the Group had eleven operating units trading through eight subsidiaries during the period:
April-Six Ltd, Big Communications Ltd, Bray Leino Ltd (incorporating Addiction and Yucca), Fox Murphy Ltd (trading as
balloon dog), RLA Group Ltd, Solaris Healthcare Network Ltd, Story UK Ltd and ThinkBDW Ltd (incorporating Robson Brown),
each of which carries out a range of activities. These activities have been divided into four business and operating segments
as defined by IFRS 8 which form the basis of the Group’s primary reporting segments, namely: Branding, Advertising and
Digital; Media; Events and Learning; and Public Relations.
Branding,
Advertising
& Digital
£’000
Media
Events &
Learning
Public
Relations
Group
£’000
£’000
£’000
£’000
Year to 31 December 2013
Turnover
Operating income
Segmental operating profit
Unallocated corporate expenses
Headline operating profit
Investment income
Finance costs
Headline profit before tax
Profit adjustments (Note 3)
Reported profit before taxation
Taxation
Profit for period
Other Information
Capital expenditure
Unallocated capital expenditure
Total capital expenditure
Depreciation and amortisation
Unallocated depreciation and amortisation
Total depreciation and amortisation
Balance Sheet
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
64,285
41,515
5,655
47,931
4,414
1,147
8,441
3,054
89
3,433
2,611
110
1,044
33
115
1,201
112
185
48
35
22,132
4,323
304
338
9,983
4,573
76
63
124,090
51,594
7,001
(1,284)
5,717
1
(696)
5,022
(1,865)
3,157
(804)
2,353
1,240
-
1,240
1,533
7
1,540
27,097
70,594
97,691
14,695
18,147
32,842
64,849
Consolidated net assets / (liabilities)
12,149
(250)
228
275
marketing group plc 2013 annual report
financial statements
2. Segmental Information (cont.)
Unallocated corporate expenses include corporate administration expenses necessary for a quoted company. It is considered
impractical to split the debt interest into segments.
The split of assets and liabilities has been estimated, as the businesses are integrated. Unallocated corporate assets and
liabilities include unallocated IFRS assets and liabilities, corporate assets and liabilities, Group cash reserves and drawn
debt liabilities.
Branding,
Advertising
& Digital
£’000
Media
Events &
Learning
Public
Relations
Group
£’000
£’000
£’000
£’000
Year to 31 December 2012
Turnover
Operating income
Segmental operating profit
Unallocated corporate expenses
Headline operating profit
Investment income
Finance costs
Headline profit before tax
Profit adjustments (Note 3)
Reported profit before taxation
Taxation
Profit for period
Other Information
Capital expenditure
Unallocated capital expenditure
Total capital expenditure
Depreciation and amortisation
Unallocated depreciation and amortisation
Total depreciation and amortisation
Balance Sheet
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
58,291
36,905
5,771
46,144
4,597
1,109
9,652
3,565
139
2,883
2,457
26
825
173
164
835
57
105
72
49
26,822
4,484
520
323
14,406
4,582
212
122
116,970
47,524
7,045
(1,085)
5,960
9
(1,113)
4,856
(172)
4,684
(1,306)
3,378
1,234
-
1,234
1,046
35
1,081
32,149
68,345
100,494
19,322
18,488
37,810
62,684
Consolidated net assets / (liabilities)
12,416
(98)
308
201
Geographical segmentation
With the development of April-Six’s expansion into San Francisco, and Bray Leino’s fledgling presence in Singapore, the
Group’s operations are starting to broaden outside the UK but substantially all the Group’s business remains based and
executed in the UK.
marketing group plc 2013 annual report
financial statements
37 | 38
3. Reconciliation of Headline Profit to Reported Profit
Headline profit before finance costs, income from investments and taxation
Net finance costs
Headline profit before taxation
Adjustments
Exceptional items
IFRS amortisation of other intangibles recognised on acquisitions
Acquisition transaction costs expensed
Reported profit before taxation
Headline profit before taxation
Headline taxation
Headline profit after taxation
Adjustments
Exceptional items
IFRS amortisation of other intangibles recognised on acquisitions
Acquisition transaction costs expensed
Taxation impact
Reported profit after taxation
4. Exceptional Items
Restructuring costs
Impairment of Addiction goodwill and intangibles
Gain on remeasurement of contingent consideration
Loss on legal dispute with supplier
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
5,717
(695)
5,022
(1,512)
(299)
(54)
3,157
5,022
(1,373)
3,649
(1,512)
(299)
(54)
569
2,353
5,960
(1,104)
4,856
-
(76)
(96)
4,684
4,856
(1,313)
3,543
-
(76)
(96)
7
3,378
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
1,523
442
(660)
207
1,512
-
-
-
-
-
Exceptional items represent revenue or costs that, either by their size or nature, require separate disclosure in order to give a
fuller understanding of the Group’s financial performance.
Restructuring costs comprise amounts payable for loss of office and other costs incurred relating to the restructuring of the
operations in Bray Leino’s London operations and Addiction Worldwide. This restructuring also resulted in the impairment of
Addiction goodwill and other intangibles acquired.
The gain on remeasurement of contingent consideration relates to a net downward revision in the estimate payable to
vendors of businesses acquired in prior years.
The loss on legal dispute with supplier relates to prizes on a promotion which were deemed by the courts to be fraudulently
won by the customers. This resulted in the costs of these prizes and legal costs being passed from the insurance company
engaged to redeem the prizes to the Group.
marketing group plc 2013 annual report
financial statements
5. Investment Income
Interest on bank deposits
1
9
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
6. Finance Costs and IFRS Interest Charges
Finance costs:
Interest on bank loans and overdrafts
Amortisation of bank debt renegotiation fees
7. Profit on Ordinary Activities before Tax
Profit on ordinary activities before taxation is stated after charging/(crediting):-
Depreciation of owned tangible fixed assets
Depreciation of tangible fixed assets held under finance leases
Amortisation of intangible assets
Loss on disposal of property, plant and equipment
Operating lease rentals – Land and buildings
Operating lease rentals – Plant and equipment
Operating lease rentals – Other assets
Staff costs (see Note 8)
Auditors’ remuneration
Loss on foreign exchange
Auditors’ remuneration may be analysed by:
Audit
Taxation
Corporate Finance
Other services
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
(506)
(190)
(696)
(808)
(305)
(1,113)
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
1,135
106
299
1
1,386
355
192
35,057
167
13
113
21
27
6
167
915
90
76
1
1,066
377
175
31,284
201
29
110
20
58
13
201
Other services include review of the Group’s Interim Announcement, accounting advice on various International Financial
Reporting Standards and advice in relation to business issues.
marketing group plc 2013 annual report
financial statements
39 | 40
8. Employee Information
The average number of Directors and staff employed by the Group during the year analysed by segment, was as follows:
Branding, Advertising & Digital
Media
Events and Learning
Public Relations
Central
The aggregate employee costs of these persons were as follows:
Wages and salaries
Social security costs
Pension costs
Share based payment expense
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
649
40
91
44
3
827
578
41
105
38
3
765
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
30,199
3,461
1,232
165
35,057
27,232
2,989
920
143
31,284
marketing group plc 2013 annual report
financial statements
8. Employee Information (cont.)
Directors’ remuneration
Directors’ remuneration and other benefits for the year were as follows (all amounts in £s):
Salary / Fees
Performance
-related
payments
Benefits
Pension
Gain on
exercise
of share
options*
Total
31 December
2013
Total
31 December
2012
Current directors
Dylan Bogg
Stephen Boyd (Note 2)
James Clifton (Note 3)
(from 11 October 2012)
Robert Day (Note 4)
Peter Fitzwilliam (Note 5)
Chris Goodwin
Giles Lee
(from 5 March 2013)
David Morgan
Chris Morris (Note 6)
Sue Mullen
(from 18 June 2012)
Fiona Shepherd
Former directors
Bruce Hutton (Note 7)
(to 28 February 2013)
Notes:
146,300
37,500
145,796
17,500
162,505
120,900
127,083
114,020
84,500
136,250
152,500
115,950
-
-
-
3,358
9,750
20,048
-
-
1,726
19,250
-
-
8,000
1,118
121,000
13,365
-
-
14,056
6,767
-
-
179,456
37,500
166,772
160,983
162,505
141,723
160,176
30,000
41,133
228,587
177,520
141,330
15,444
17,188
22,721
182,436
-
23,416
1,801
-
-
-
22,375
2,053
-
-
12,251
6,188
4,914
137,436
98,552
164,813
173,665
90,864
75,057
159,467
160,492
5,082
1,250
-
122,282
189,326
-
-
-
-
-
-
-
-
1,360,804
8,000
68,054 197,580
79,487
1,713,925
1,468,150
* The gain on exercise of share options is calculated as the difference between the market price of the shares on the date
of exercise and the price paid for the shares.
1. Dylan Bogg, Robert Day, Chris Goodwin, Giles Lee, Sue Mullen and Fiona Shepherd were paid £12,500 as TMMG plc
Directors, with the balance of their remuneration paid as Directors and employees of subsidiary companies for services
rendered there.
2. Prior to 1 June 2013, the services of Stephen Boyd as a TMMG plc Director were provided through Stephen Boyd Ltd,
a company controlled by him.
3. James Clifton was paid £nil as a TMMG plc Director, but was paid as a Director and employee of balloon dog for services
rendered there.
4. Robert Day operated a salary sacrifice during the year, whereby an amount of £121,000, including Employer’s National
Insurance Contributions, was paid into his pension.
5. Prior to 1 April 2013, Peter Fitzwilliam’s services as CFO were provided by VPF London Ltd, a company controlled by him.
6. Chris Morris was paid £42,500 as a TMMG plc Director during the year (2012: £42,500). In addition, he was paid for his
consulting services through a consultancy practice owned by him, Morris Marketing Consultancy.
7.
Included in Bruce Hutton’s salary / fees is an amount of £90,950 of compensation for loss of office.
marketing group plc 2013 annual report
financial statements
41 | 42
9. Taxation
Current tax:-
UK corporation tax at 23.25% (2012: 24.5%)
Adjustment for prior periods
Deferred tax:-
Current year reversing/(originating) temporary differences
Adjustment for prior periods
Tax charge for the year
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
810
(6)
804
-
-
804
1,390
(93)
1,297
9
-
1,306
Factors affecting the tax charge for the current year:
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The differences are:
Profit before taxation
Profit on ordinary activities before tax at the standard
rate of corporation tax of 23.25% (2012: 24.5%)
Effect of:
Non-deductible expenses/income not taxable
Gain on remeasurement of contingent consideration not taxable
Adjustments to prior periods
Movement on provisions
Depreciation in excess of capital allowances
Other differences
Actual tax charge for the year
10. Dividends
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
3,157
734
142
(153)
(6)
(42)
137
(8)
804
4,684
1,148
156
-
(93)
42
55
(2)
1,306
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
Amounts recognised as distributions to equity holders in the year:
Interim dividend of 0.25 pence per share
192
-
During the year the Board decided to resume the payment of dividends, previously suspended in order to conserve cash.
A final dividend of 0.75 pence is to be paid on 21 July 2014 to those shareholders on the register at 11 July 2014. In accordance
with IFRS the final dividend of 0.75p will be recognised in the 2014 accounts, should it be approved by shareholders at the AGM.
marketing group plc 2013 annual report
financial statements
11. Earnings per Share
The calculation of the basic and diluted earnings per share is based on the following data, determined in accordance with
the provisions of IAS 33: Earnings per Share.
Earnings
Earnings for the purpose of reported earnings per share
being net profit attributable to equity holders of the parent
Earnings for the purpose of headline earnings per share (see Note 3)
Number of shares
Weighted average number of ordinary shares
for the purpose of basic earnings per share
Dilutive effect of securities:
Employee share options
Bank warrants
Weighted average number of ordinary shares
for the purpose of diluted earnings per share
Reported basis:
Basic earnings per share (pence)
Diluted earnings per share (pence)
Headline basis:
Basic earnings per share (pence)
Diluted earnings per share (pence)
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
2,353
3,649
3,378
3,543
75,668,570
72,169,181
3,886,360
2,510,283
3,461,578
2,386,907
82,065,213
78,017,666
3.11
2.87
4.82
4.45
4.68
4.33
4.91
4.54
Basic earnings per share includes shares to be issued subject only to time as if they had been issued at the beginning of
the period.
A reconciliation of the profit after tax on a reported basis and the headline basis is given in Note 3.
marketing group plc 2013 annual report
financial statements
43 | 44
12. Intangible Assets
Goodwill
Cost
At 1 January
Recognised on acquisition of subsidiaries
Adjustment to consideration
At 31 December
Impairment adjustment
At 1 January
Impairment during the year
At 31 December
Net book value at 31 December
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
74,314
1,058
(94)
75,278
3,995
278
4,273
71,005
72,186
2,113
15
74,314
3,995
-
3,995
70,319
In accordance with the Group’s accounting policies, an annual impairment test is applied to the carrying value of goodwill.
The review performed assesses whether the carrying value of goodwill is supported by the net present value of projected
cash flows derived from the underlying assets for each cash-generating unit (“CGU”). The initial projection period of three
years includes the annual budget for each CGU, based on insight into Clients’ planned marketing expenditure and targets
for net new business growth derived from historical experience, and extrapolations of the budget in subsequent years
based on known factors and estimated trends. The key assumptions used by each CGU concern revenue growth and
staffing levels, and different assumptions are made by different CGUs based on their individual circumstances. After the
initial projection period, an annual growth rate of 2.5% was assumed for all units and the resulting pre-tax cash flow forecasts
were discounted using the Group’s estimated pre-tax weighted average cost of capital, which is 7.4%. As a result of the
restructuring of the operations of Addiction Worldwide, the Directors considered it necessary to impair the full value of
goodwill relating to this CGU. For all other CGUs, the Directors assessed the sensitivity of the impairment test results to
changes in key assumptions and concluded that a reasonably possible change to the key assumptions would not cause
the carrying value of goodwill to exceed the net present value of its projected cash flows.
Goodwill arose from the acquisition of the following subsidiary companies and trade assets and is comprised of the following
substantial components:
Addiction Worldwide
April-Six Ltd
Big Communications Ltd/Fuse Digital Ltd
Bray Leino Ltd
Friars 573 Ltd/Fox Murphy Ltd (trading as balloon dog)
Haven Marketing Ltd
RLA Group Ltd
Solaris Healthcare Network Ltd
Story UK Ltd
ThinkBDW Ltd
Quorum Advertising Ltd
During the year the carrying value of Addiction Worldwide was written off.
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
-
9,411
8,125
30,846
1,514
127
6,572
1,058
6,969
6,283
100
71,005
372
9,411
8,125
30,846
1,514
127
6,572
-
6,969
6,283
100
70,319
marketing group plc 2013 annual report
financial statements
12. Intangible Assets (cont.)
Other intangible assets
Cost
At 1 January
Additions
At 31 December
Amortisation and impairment
At 1 January
Amortisation charge for the year
Impairment charge for the year
At 31 December
Net book value
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
1,209
870
2,079
95
299
165
559
1,520
271
938
1,209
19
76
-
95
1,114
Additions of £870,000 in the year include intellectual property rights acquired, product development costs capitalised, and
client relationships and trade names acquired relating to Solaris Healthcare, of which £140,000 relates to trade names
deemed to have an indefinite useful life (2012: £938,000 includes client relationships and trade names acquired relating to
balloon dog and Addiction Worldwide of which £163,000 relates to trade names deemed to have an indefinite useful life).
The impairment during the year relates to intangible assets acquired in the purchase of Addiction Worldwide. As a result of
the restructuring of the operations of Addiction Worldwide, the Directors considered it necessary to impair the full value of
intangible assets relating to this cash-generating unit.
Included within the value of intangible assets is an amount of £303,000 (2012: £163,000) relating to trade names of businesses
acquired, which are deemed to have indefinite useful lives. These trade names have attained recognition in the market
place and the companies acquired will continue to operate under the relevant trade names, which will play a role in
developing and sustaining customer relationships for the foreseeable future. As such, it is the Directors’ judgement that the
useful life of these trade names is considered to be indefinite.
13. Subsidiaries
The Group’s principal trading subsidiaries are listed below.
All subsidiaries are 100% owned and all are incorporated in the United Kingdom.
Subsidiary undertaking
Nature of business
April-Six Ltd
Big Communications Ltd
Integrated communications, specialising in the technology sector
Brand planning and strategic development, new media marketing,
including website design and advertising, SMS messaging,
digital video and database management
Bray Leino Ltd
Advertising, events and PR
Fox Murphy Ltd (trading as balloon dog)
Marketing communications agency
RLA Group Ltd
Marketing and communications
Solaris Healthcare Network Ltd
Marketing and communications
Story UK Ltd
ThinkBDW Ltd
Brand development and creative direct communication
Property marketing, providing advertising, media, brochures,
signage, exhibitions, CGI, animation, intranet, photography
marketing group plc 2013 annual report
financial statements
45 | 46
14. Property, Plant and Equipment
Short Leasehold
Property
Fixtures & Fittings &
Office Equipment
Computer
Equipment
Motor
Vehicles
Total
£’000
£’000
£’000
£’000
£’000
Cost or valuation
At 1 January 2012
Acquisition of subsidiaries
Additions
Disposals
At 31 December 2012
Acquisition of subsidiaries
Additions
Reclassification of hire stock
Disposals
At 31 December 2013
Depreciation
At 1 January 2012
Acquisition of subsidiaries
Charge for the year
Disposals
At 31 December 2012
Acquisition of subsidiaries
Reclassification of hire stock
Charge for the year
Disposals
At 31 December 2013
Net book value at 31 December 2013
Net book value at 31 December 2012
1,590
24
73
(6)
1,681
-
18
-
(25)
1,674
1,025
7
109
(6)
1,135
-
-
87
(15)
1,207
467
546
2,189
2,992
53
478
(34)
779
631
(74)
2,686
4,328
19
365
553
(48)
3,575
1
797
-
(566)
4,560
1,361
1,753
15
268
(34)
531
589
(72)
1,610
2,801
5
169
377
(37)
2,124
1,451
1,076
-
-
729
(432)
3,098
1,462
1,527
239
27
52
(69)
249
-
60
-
(69)
240
186
12
39
(69)
168
-
-
48
(75)
141
99
81
7,010
883
1,234
(183)
8,944
20
1,240
553
(708)
10,049
4,325
565
1,005
(181)
5,714
5
169
1,241
(559)
6,570
3,479
3,230
The net book amount includes £143,000 (2012: £267,000) in respect of assets held under finance lease agreements. The
depreciation charged to the financial statements in the year in respect of such assets amounted to £106,000 (2012: £90,000).
marketing group plc 2013 annual report
financial statements
15. Trade and Other Receivables
Gross trade receivables
Less: Provision for doubtful debts
Other receivables
Prepayments
Accrued income
31 December
2013
£’000
31 December
2012
£’000
15,451
(61)
15,390
573
1,088
3,700
20,751
19,119
(104)
19,015
552
1,023
3,774
24,364
An allowance has been made for estimated irrecoverable amounts from the provision of services of £61,000 (2012: £104,000).
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
Credit risk
The Group’s principal financial assets are bank balances and cash, trade and other receivables and investments, which
represent the Group’s maximum exposure to credit risk in relation to financial assets.
The Group’s credit risk is primarily attributable to its trade receivables. In order to mitigate this risk, the Group has arranged
credit insurance on certain of its trade receivables as deemed appropriate. Where credit insurance is not considered cost
effective, the Group monitors credit-worthiness closely and mitigates risk, where appropriate, through payment plans.
The credit risk on cash balances is limited because the counterparties are banks with high credit-ratings assigned by
international credit-rating agencies.
16. Cash and Short Term Deposits
Cash and short term deposits comprise cash held by the Group and short term bank deposits.
17. Trade and Other Payables
Trade creditors
Finance leases
Other creditors
Other tax and social security payable
31 December
2013
£’000
31 December
2012
£’000
7,589
69
355
3,054
11,067
9,271
136
454
3,764
13,625
Trade and other creditors principally comprise amounts outstanding for trade purchases and on-going costs. The Directors
consider that the carrying amount of trade payables approximates their fair value.
marketing group plc 2013 annual report
financial statements
47 | 48
18. Bank Overdrafts, Loans and Net Debt
Bank loan outstanding
Adjustment to amortised cost
Carrying value of loan outstanding
Less: Cash and short term deposits
Net bank debt
The borrowings are repayable as follows:
Less than one year
In one to two years
In more than two years but less than three years
Adjustment to amortised cost
Less: Amount due for settlement within 12 months
(shown under current liabilities)
Amount due for settlement after 12 months
31 December
2013
£’000
31 December
2012
£’000
11,572
(285)
11,287
(571)
10,716
1,714
9,858
-
11,572
(285)
11,287
(1,714)
9,573
13,357
(475)
12,882
(546)
12,336
2,286
2,286
8,785
13,357
(475)
12,882
(2,286)
10,596
The adjustment to amortised cost relates to the amortisation of bank debt renegotiation fees over the life of the loan facility.
At 31 December 2013, the Group had a term loan facility of £4.6m due for repayment by December 2015 on a quarterly
basis, and a revolving credit facility of up to £7.0m, expiring on 27 December 2015.
Interest on both the term loan facility and the revolving credit facility is based on 3 month LIBOR plus 2.75%, payable in cash
on loan rollover dates. The gross amount of the revolving credit facility drawn at 31 December 2013 was £7.0m. In addition
to its committed facilities, the Group had available an overdraft facility of up to £3.0m with interest payable by reference to
National Westminster Bank plc Base Rate plus 3.5%.
At 31 December 2013, there was a cross guarantee structure in place with the Group’s bankers by means of a fixed and
floating charge over all of the assets of the Group companies in favour of Royal Bank of Scotland plc.
All borrowings are in sterling.
marketing group plc 2013 annual report
financial statements
19. Obligations under Finance Leases
Obligations under finance leases are as follows:
In one year or less
Between two and five years
31 December
2013
£’000
31 December
2012
£’000
69
-
69
136
69
205
Assets held under finance leases consist of office equipment. The fair values of the Group’s lease obligations approximate
their carrying amount.
The Group’s obligations under finance leases are secured by the lessor’s charge over the leased assets.
20. Acquisitions
20.1 Acquisition obligations
The terms of an acquisition may provide that the value of the purchase consideration, which may be payable in cash or
shares or other securities at a future date, depends on uncertain future events such as the future performance of the acquired
company. The Directors estimate that the liability for contingent consideration payments that may be due is as follows:
31 December 2013
31 December 2012
Cash
£’000
Shares
£’000
Total
£’000
Cash
£’000
Shares
£’000
Total
£’000
Less than one year
Between one and two years
In more than two years but less than three years
In more than three years but less than four years
375
913
869
574
2,731
-
48
47
-
95
375
961
916
574
1,049
339
339
389
75
48
48
47
1,124
387
387
436
2,826
2,116
218
2,334
20.2 Acquisition of Solaris Healthcare Network Ltd
On 30 September 2013, the Group acquired the whole issued share capital of Solaris Healthcare Network Ltd. The fair value
of the consideration given for the acquisition was £1,900,000, comprising initial cash consideration and deferred contingent
cash consideration. Costs relating to the acquisition amounted to £30,000 and were expensed.
Maximum contingent consideration of £1,905,000 is dependent on Solaris achieving various profit targets over the period
October 2013 to December 2016. The Group has provided for contingent consideration of £1,803,000 to date.
The fair value of the net identifiable assets acquired was £108,000 resulting in goodwill and other intangible assets of
£1,792,000. Management carried out a review to assess whether any other intangible assets were acquired as part of the
transaction. Management concluded that both a brand name and customer relationships were acquired and attributed a
value to each of these by applying commonly accepted valuation methodologies. The goodwill arising on the acquisition
is attributable to the anticipated profitability of the Company.
20. Acquisitions (cont.)
Net assets acquired:
Fixed assets
Trade and other receivables
Cash and cash equivalents
Trade and other payables
marketing group plc 2013 annual report
financial statements
49 | 50
Book
Value
£’000
Fair Value
Adjustments
£’000
Fair
Value
£’000
15
247
18
(172)
-
-
-
-
15
247
18
(172)
108
734
842
1,058
1,900
1,900
1,900
Other intangibles recognised at acquisition
-
734
Goodwill
Total consideration
Satisfied by:
Initial cash and deferred contingent cash consideration
Solaris contributed turnover of £292,000, operating income of £257,000 and headline operating profit of £97,000 to the results
of the Group since acquisition.
20.3 Pro-forma results including acquisitions
The Directors estimate that the turnover, operating income and headline operating profit of the Group would have been
approximately £124.7m, £52.1m and £5.7m respectively had the Group consolidated the results of Solaris from the beginning
of the year.
21. Deferred Taxation
The Group has no timing differences on which deferred tax needs to be provided.
22. Financial Commitments
Operating lease commitments
As at 31 December the Group had annual commitments under non-cancellable operating leases as follows:
Operating leases which expire:
Within one year
Between two and five years
After more than 5 years
31 December 2013
31 December 2012
Land and buildings
£’000
Other
£’000
Land and buildings
£’000
Other
£’000
129
824
414
1,367
60
455
-
515
147
678
376
1,201
74
467
-
541
marketing group plc 2013 annual report
financial statements
23. Share Capital
Authorised:
85,000,000 ordinary shares of 10p each
(2012: 85,000,000 ordinary shares of 10p each)
Allotted and called up:
76,990,940 ordinary shares of 10p each
(2012: 76,990,940 ordinary shares of 10p each)
Options
The Group has the following options in issue:
31 December
2013
£’000
31 December
2012
£’000
8,500
8,500
7,699
7,699
At start of year
Granted Waived/lapsed
Exercised At end of year
TMMG Long Term Incentive Plan
4,023,000
1,540,000
(660,200)
(856,300)
4,046,500
Bank warrants
2,510,453
5,568
-
-
2,516,021
TMMG Long Term Incentive Plan (“LTIP”) was created to incentivise certain key employees.
The vesting criterion applicable to the LTIPs in issue at the start of the year, all with a nil exercise price, is that they are
dependent upon the achievement of profit targets over the three year periods ending 31 December 2012, 31 December 2013
and 31 December 2014.
During the period 856,300 of these options were exercised at a weighted average share price of 25.5p and at the end of the
year 256,500 of the outstanding options are exercisable.
LTIPs issued during the year, also with a nil exercise price, may vest dependent upon the achievement of profit targets over
the three year period ending 31 December 2015.
Shares held in an Employee Benefit Trust (see Note 24) will be used to satisfy share options exercised under The Mission
Marketing Group Long Term Incentive Plan.
Warrants over 3% of the Group’s fully diluted share capital were issued to the Group’s loan providers following the refinancing
completed in 2010 and are exercisable at any time until 15 April 2017. These outstanding warrants have a 10.0p exercise price.
marketing group plc 2013 annual report
financial statements
51 | 52
24. Own Shares
At 1 January 2012
Awarded to employees during the year
At 31 December 2012
Own shares purchased during the year
Awarded to employees during the year
Awarded to vendors as purchase consideration
At 31 December 2013
No. of shares
1,499,791
(39,284)
1,460,507
1,125,752
(471,663)
(799,001)
1,315,595
£’000
1,234
(33)
1,201
306
(388)
(657)
462
Shares are held in an Employee Benefit Trust to meet certain requirements of The Mission Marketing Group Long Term
Incentive Plan.
25. Share Option Reserve
The share option reserve represents charges to the profit or loss required by IFRS 2 to reflect the cost of the options issued to
the Directors and employees and the warrants issued to the loan providers.
26. Share-based Payments
Fair value on grant date is measured by use of a Black Scholes model. The valuation methodology is applied at each year
end and the valuation revised to take account of any changes in estimate of the likely number of shares expected to vest.
Details of the relevant option schemes are given in note 23. The key inputs are:
Share price
Risk free rate
Dividend yield
2013
27p
0.7%
1.0%
2012
29p
0.3%
1.0%
Volatility is based on the historical volatility of the share price over a 3 year trading period although, for nil-cost options
issued under the Group’s Long Term Incentive Scheme, volatility does not impact the calculation of fair value. The weighted
average share price over the three years ending 31 December 2013 was 24.2p.
The Group recognised an expense of £173,000 in 2013 (2012: £178,000).
marketing group plc 2013 annual report
financial statements
27. Financial Assets and Liabilities
Capital management
The Group defines “capital” as being net debt plus equity. Net debt comprises short and long term borrowings net of cash,
cash equivalents and the unamortised balance of bank renegotiation fees as analysed in Note 18. Equity comprises issued
share capital, reserves and retained earnings as disclosed in the balance sheet and in the consolidated statement of
changes in equity.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and
maintain an appropriate capital structure to balance the needs of the Group to grow, whilst operating with sufficient
headroom within its bank covenants. The principal measure by which the Directors monitor capital risk is the ratio of net
debt to EBITDA and, at the time of the restructuring in April 2010, set a target to reduce this ratio to below x2 by the end of
2012. Below this level, the Group has a number of options available to optimise the debt/equity balance including, inter alia,
dividend payments, returning capital to shareholders or issuing new shares.
Financial risk management
The Group’s financial instruments comprise cash and various forms of borrowings. As permitted by IAS 39, short-term debtors
and creditors have been excluded.
Substantially all the Group’s activities take place in the United Kingdom and no material transactions take place with
overseas customers or suppliers in local currency. There was no material foreign currency exposure at the year end.
The main purpose of the Group’s use of financial instruments is for day-to-day working capital and as part of the funding for
past acquisitions. The Group’s financial policy and risk management objective is to achieve the best interest rates available
whilst maintaining flexibility and minimising risk. The main risks arising from the Group’s use of financial instruments are
interest rate risk and liquidity risk.
Interest rate risk
The operations of the Group generate cash and it funds acquisitions through a combination of retained profits, equity issues
and borrowings. The Group’s financial liabilities comprise floating rate instruments. The bank loan’s interest rate is reset from
time to time and accordingly is not deemed a fixed rate financial liability.
Interest on both the Group’s revolving credit facility and its term loan is payable by reference to 3 month LIBOR plus 2.75%,
subject to downward or upward ratchets depending on certain ratios of debt to EBITDA on a quarterly basis. In 2012 the
Group resumed its policy of using hedging instruments to limit the exposure to interest rate risk. This policy had been
temporarily suspended when various cap and collar instruments matured during 2011, on the basis that they were not
considered cost effective in the low interest environment that existed at the time. The interest rate cap taken out in December
2012 limits the Group’s exposure to 3 month LIBOR to 1.0% on £5.3m of notional principal as at 31 December 2013. This interest
rate cap amortises in three monthly instalments and matures on 30 June 2015. The cap arrangement is considered to be
closely related to the host debt contract.
Liquidity risk
The Group’s financial instruments include a mixture of short and long-term borrowings. The Group seeks to ensure sufficient
liquidity is available to meet working capital needs and the repayment terms of the Group’s financial instruments as they mature.
31 December 2013
£’000
Financial assets
Cash at bank maturing in less than one year or on demand
571
marketing group plc 2013 annual report
financial statements
53 | 54
27. Financial Assets and Liabilities (cont.)
Bank Loan
and Overdraft
£’000
Finance
Leases
£’000
Acquisition
Obligations
£’000
Interest
Rate Cap
£’000
31 December
2013 Total
£’000
Financial liabilities
Interest analysis:
Subject to floating rates
Subject to fixed rates
Maturity analysis:
One year or less, or on demand
In one to two years
In two to three years
In more than three years
11,572
-
11,572
1,714
9,858
-
-
-
69
69
69
-
-
-
-
2,826
2,826
375
961
916
574
11,572
69
2,826
-
10
10
-
10
-
-
10
11,572
2,905
14,477
2,158
10,829
916
574
14,477
The Group’s bank loans and overdraft facility are floating rate borrowings and all facilities are secured by a fixed and floating
charge over the assets of all Group companies.
The fair value of the Group’s financial assets and liabilities is not considered to be materially different from their book values.
28. Pensions
The Group operates nineteen defined contributions pension schemes. The pension cost charge for the year represents
contributions payable by the Group to the schemes and amounted to £1,232,000 (2012: £920,000). At the end of the financial
year outstanding contributions amounted to £100,000 (2012: £71,000).
29. Leave pay accrual
No liability or expense has been recognised relating to untaken leave for any of the periods presented. The Group has a
policy of not allowing days to be carried forward from one year to the next, unless in exceptional circumstances. In addition,
no payment is made in lieu of untaken leave which is not carried forward. As a result, there is no material liability relating to
untaken leave at year end.
30. Post balance sheet events
There are no material post balance sheet events.
marketing group plc 2013 annual report
financial statements
31. Related Party Transactions
The Directors consider that the Directors of the Company represent the Group’s key management personnel for the purposes
of disclosing related party transactions. Directors’ remuneration is disclosed in detail in Note 8. The total compensation
payable to key management personnel is detailed below.
Short-term employee benefits
Post-employment benefits
Share based payments
Year to
31 December
2013
£’000
Year to
31 December
2012
£’000
1,437
198
79
1,714
1,381
87
-
1,468
There has been a change in presentation with regards the share based payment element this year. In the 2012 Annual
Report the amount disclosed reflected the portion of the share option charge during the period relating to the options held
by directors. In 2013 the decision was taken that it is more appropriate to disclose the gain made on options exercised
during the period. As a result of this change, the numbers disclosed in this note now tie into the detailed numbers disclosed
in the Directors’ remuneration note (Note 8).
Parent company
Stephen Boyd Ltd, an entity of which Stephen Boyd is an interested party, received £33,125 (2012: £30,000) for the provision
of his advisory services. In addition, VPF London Ltd, an entity in which Peter Fitzwilliam is an interested party, received
£35,505 (2012: £157,020) for the provision of CFO services, and Morris Marketing Consultancy, an entity in which Chris Morris
is an interested party, received £42,000 (2012: £42,000) for the provision of consultancy services.
Subsidiary undertakings
Bray Leino Ltd is contracted to pay annual rent of £60,000 (2012: £60,000) to Mrs P H Morgan, the wife of Mr D W Morgan,
Chairman of The Mission Marketing Group plc. As at the year end there were no amounts due from or owed to Mrs P H
Morgan. Bray Leino Ltd is also contracted to rent premises from Hannele Ltd, in which Mr D W Morgan has a 100% beneficial
interest. During the year annual rent of £74,000 (2012: £74,000) and property management fees of £18,000 (2012: £18,000)
were paid to Hannele Ltd. Bray Leino Ltd also rents premises from a partnership, in which Hannele Ltd has a 50% interest, for
an annual rent of £60,000 (2012: £60,000). As at the year end there were no amounts due from or owed to Hannele Ltd.
ThinkBDW Ltd is contracted to pay annual rent to Robert Day Associates Ltd, a company controlled by Mrs K Day (wife of
Robert Day, Executive Director) and Mrs A Day (wife of Mr A Day, brother of Robert Day, Executive Director). The annual rental
payable of £35,000 (2012: £35,000) was set at market value. An additional lease contract for a second business premise
commenced on 2 May 2013 under which annual rental of £124,000 is payable to Robert Day Associates Ltd.
Big Communications Ltd paid rent during the year of £72,962 (2012: £71,000) to four individuals, including Dylan Bogg
(Executive Director) and Chris Morris (Non-Executive Director). In addition, Morris Marketing Consultancy, a consultancy
practice owned by Chris Morris, invoiced Big Communications Ltd and was paid £58 (2012: £5,054) during the year for
services rendered. Mr Morris also received a benefit of £1,801 (2012: £1,814) from the company.
32. Availability of Annual Report
Copies of the Annual Report for the year ended 31 December 2013 will be circulated to shareholders at least 21 days
ahead of the Annual General Meeting (“AGM”) on 16 June 2014 and, after approval at the AGM, will be delivered to
the Registrar of Companies. Further copies will be available from the Company’s registered office and on the Group’s
website, www.themission.co.uk.
marketing group plc 2013 annual report
financial statements
55 | 56
Independent Auditor’s Report to the Members of The Mission Marketing Group plc
We have audited the parent company financial statements of The Mission Marketing Group plc for the year ended 31
December 2013 which comprise the Parent Company Balance Sheet and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice).
This report is made solely to the Company’s shareholders, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s shareholders those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders as a
body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 21 the directors are responsible for the
preparation of the parent company financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the parent company financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing
Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting policies are appropriate to the parent company’s circumstances
and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates
made by the directors; and the overall presentation of the financial statements. If we become aware of any apparent
material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the parent company financial statements:
• give a true and fair view of the state of the Company’s affairs as at 31 December 2013;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the parent company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the consolidated financial statements of The Mission Marketing Group plc for the year
ended 31 December 2013.
Christopher Hicks BA FCA (Senior Statutory Auditor)
For and on behalf of Francis Clark LLP
Chartered Accountants and Statutory Auditors
Sigma House
Oak View Close
Edginswell Park
Torquay
TQ2 7FF
25 March 2014
marketing group plc 2013 annual report
financial statements
Company Balance Sheet as at 31 December 2013
As at
31 December
2013
As at
31 December
2012
Note
£’000
£’000
NON-CURRENT ASSETS
Intangible assets
Tangible assets
Investments
CURRENT ASSETS
Debtors
Cash at bank
CREDITORS: Amounts falling due within one year
NET CURRENT LIABILITIES
TOTAL ASSETS LESS CURRENT LIABILITIES
34
35
36
37
38
CREDITORS: Amounts falling due after more than one year
39
NET ASSETS
CAPITAL AND RESERVES
Called up share capital
Share premium account
Share option reserve
Profit and loss account
SHAREHOLDER’S FUNDS
42
42
43
43
36
1
95,951
95,988
2,867
3
2,870
(8,099)
(5,229)
90,759
(12,024)
78,735
7,699
40,288
614
30,134
78,735
43
2
94,708
94,753
3,152
2
3,154
(9,769)
(6,615)
88,138
(11,806)
76,332
7,699
40,288
441
27,904
76,332
The financial statements were approved and authorised for issue on 25 March 2014 by the Board of Directors. They were
signed on its behalf by:
Peter Fitzwilliam
Finance Director
Company registration number: 05733632
marketing group plc 2013 annual report
financial statements
57 | 58
Notes to the Company Balance Sheet
33. Principal Accounting Policies
The financial statements are prepared in accordance with applicable United Kingdom law and accounting standards
(United Kingdom Generally Accepted Accounting Practice). The principal accounting policies of the Company are set out
below. The policies have remained unchanged from the previous year.
Accounting convention
The financial statements have been prepared under the historical cost convention.
Going concern
The Company’s available banking facilities provide comfortable levels of headroom against the Company’s projected cash
flows and the Directors accordingly consider that it is appropriate to continue to adopt the going concern basis in preparing
these financial statements.
Deferred taxation
Deferred taxation is recognised on all timing differences where the transactions or event that give the Company an obligation
to pay more tax in the future, or a right to pay less tax in the future, have occurred by the balance sheet date. Deferred tax
assets are recognised when it is more likely than not that they will be recoverable. Deferred tax is measured using rates of
tax that have been enacted or substantively enacted by balance sheet date.
Property, plant and equipment
Depreciation is provided on all property, plant and equipment at rates calculated to write off the cost, less estimated
residual value based on prices prevailing at the date of acquisition, of each asset evenly over its expected useful economic
life, as follows:
Short leasehold property
Motor vehicles
Period of the lease
25% per annum
Fixtures, fittings and office equipment
10-33% per annum
Computer equipment
25-33% per annum
Deferred consideration
The terms of an acquisition may provide that the value of the purchase consideration, which may be payable in cash or
shares at a future date, depends on uncertain future events such as the future performance of the acquired company. The
amounts recognised in the financial statements represent a reasonable estimate at the balance sheet date of the amounts
expected to be paid and has been classified in the balance sheet in accordance with the substance of the transaction.
Where the agreement gives rise to an obligation that may be settled by the delivery of a variable number of shares to meet
a defined monetary liability, these amounts are disclosed as debt.
Investments
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost less provision for any
impairment in value.
Lease commitments
Rental costs under operating leases are charged against profits as incurred.
Profit of parent company
As permitted under Section 408 of the Companies Act 2006, the profit and loss account of the Company is not presented as
part of these accounts.
marketing group plc 2013 annual report
financial statements
34. Intangible Assets
Cost
Accumulated amortisation
Net book value
31 December
2013
£’000
31 December
2012
£’000
61
(25)
36
61
(18)
43
Intangible assets consist of intellectual property rights which are amortised over 10 years. The amortisation charge for the
year was £6,000 (2012: 6,000).
35. Tangible Fixed Assets
Cost
At 1 January 2013
Additions
Disposals
At 31 December 2013
Depreciation
At 1 January 2013
Charge for the year
Disposals
At 31 December 2013
Net book value at 31 December 2013
Net book value at 31 December 2012
Fixtures & Fittings
£’000
Office Equipment
£’000
Total
£’000
58
-
-
58
58
-
-
58
-
-
33
-
-
33
31
1
-
32
1
2
91
-
-
91
89
1
-
90
1
2
marketing group plc 2013 annual report
financial statements
59 | 60
36. Investments
Cost
At 1 January 2012
Additions
At 31 December 2012
Additions
Adjustment to purchase consideration
At 31 December 2013
Impairment
At 1 January 2012
Impairment
At 31 December 2012
Impairment
At 31 December 2013
Net book amount at 31 December 2013
Net book amount at 31 December 2012
Shares in subsidiary
undertakings
£’000
96,288
2,863
99,151
1,930
(687)
100,394
(4,443)
-
(4,443)
-
(4,443)
95,951
94,708
The principal Group companies at 31 December 2013 are set out below.
All subsidiaries are 100% owned and all are incorporated in the United Kingdom.
Subsidiary undertaking
Nature of business
April-Six Ltd
Big Communications Ltd
Integrated communications, specialising in the technology sector
Brand planning and strategic development, new media marketing,
including website design and advertising, SMS messaging,
digital video and database management
Bray Leino Ltd
Advertising, events and PR
Fox Murphy Ltd (trading as balloon dog)
Marketing communications agency
RLA Group Ltd
Marketing and communications
Solaris Healthcare Network Ltd
Marketing and communications
Story UK Ltd
ThinkBDW Ltd
Brand development and creative direct communication
Property marketing, providing advertising, media, brochures,
signage, exhibitions, CGI, animation, intranet, photography
The above list excludes details of non-trading dormant subsidiaries.
marketing group plc 2013 annual report
financial statements
37. Debtors
Amounts due from subsidiary undertakings
Corporation tax
Prepayments
Other debtors
38. Creditors: Amounts Falling Due Within One Year
Bank overdraft
Amounts due to subsidiary undertakings
Accruals
Acquisition obligations (see Note 41)
Bank loan (see Note 40)
Other creditors
39. Creditors: Amounts Falling Due After More Than One Year
Acquisition obligations (see Note 41)
Bank loan (see Note 40)
31 December
2013
£’000
31 December
2012
£’000
2,324
502
41
-
2,867
2,624
487
40
1
3,152
31 December
2013
£’000
31 December
2012
£’000
499
5,237
242
375
1,714
32
8,099
1,372
4,878
68
1,099
2,286
66
9,769
31 December
2013
£’000
31 December
2012
£’000
2,451
9,573
12,024
1,210
10,596
11,806
marketing group plc 2013 annual report
financial statements
61 | 62
40. Borrowings
Bank loan outstanding
Adjustment to amortised cost
Carrying value of loan outstanding
The borrowings are repayable as follows:
Less than one year
In one to two years
In more than two years but less than three years
Adjustment to amortised cost
Less: Amount due for settlement within 12 months
(shown under current liabilities)
Amount due for settlement after 12 months
31 December
2013
£’000
31 December
2012
£’000
11,572
(285)
11,287
1,714
9,858
-
11,572
(285)
11,287
(1,714)
9,573
13,357
(475)
12,882
2,286
2,286
8,785
13,357
(475)
12,882
(2,286)
10,596
Details of the Company’s borrowing facilities and interest rates are set out in Note 18 and not therefore repeated here.
All borrowings are in sterling.
As at 31 December 2013, Net Assets of the Group were £64,849,000 (2012: £62,684,000), and net borrowings under this Group
arrangement amounted to £10,716,000 (2012: £12,336,000).
41. Acquisition Obligations
The terms of an acquisition may provide that the value of the purchase consideration, which may be payable in cash or
shares or other securities at a future date, depends on uncertain future events such as the future performance of the
acquired company. The Directors estimate that the liability for payments that may be due are as follows:
Initial
Consideration
£’000
Contingent
Consideration
Cash
£’000
Contingent
Consideration
Shares
£’000
Less than one year
Between one and two years
In more than two years but less than three years
In more than three years but less than four years
-
-
-
-
-
375
913
869
574
2,731
-
48
47
-
95
Total
£’000
375
961
916
574
2,826
marketing group plc 2013 annual report
financial statements
42. Share Capital and Share Premium
The movements on these items are disclosed within the consolidated statement of changes in equity within the consolidated
financial statements.
43. Statement of Movements on Reserves
At 1 January 2012
Credit for share option scheme
Profit for the period
At 31 December 2012
Credit for share option scheme
Exercise of share options
Profit for the period
At 31 December 2013
Share Option Reserve
£’000
Profit and Loss Account
£’000
263
178
-
441
173
-
-
614
24,447
-
3,457
27,904
-
(218)
2,448
30,134
44. Operating Lease Commitments
As at 31 December 2013 the Company had no commitments under operating leases (2012: nil).
45. Related Party Transactions
Details of related party transactions are disclosed in Note 31 of the consolidated financial statements.
marketing group plc 2013 annual report
notice of annual general meeting
63 | 64
notice of annual
general meeting
NOTICE is hereby given that the Annual General Meeting
of The Mission Marketing Group plc (the “Company”)
will be held at 12 noon on Monday 16 June 2014 at
the offices of finnCap Limited, 60 New Broad Street,
London, EC2M 1JJ to transact the following business:
The following resolutions will be proposed
as ordinary resolutions:
Report and accounts
1. To receive the financial statements and the
report of the Directors and the auditors for the
year ended 31 December 2013.
Dividend
2. To approve a final dividend of 0.75 pence per share.
Directors
3. To re-elect Peter Fitzwilliam as a Director.
4. To re-elect Chris Goodwin as a Director.
Auditors
to be granted, after such expiry and the Directors shall be
entitled to allot shares or grant any such rights pursuant
to any such offer or agreement as if this authority had not
expired and all unexercised authorities previously granted
to the Directors to allot shares or grant any such rights be
and are hereby revoked provided that the resolution shall
not affect the right of the Directors to allot shares or grant
any such rights in pursuance of any offer or agreement
entered into prior to the date of this resolution.
The following resolutions will be proposed as
special resolutions:
Authority to dis-apply pre-emption rights
8. THAT (subject to the passing of the resolution numbered
7 above) the Directors be and are hereby empowered
pursuant to Section 570, Section 571 and Section 573 of
the Act to allot equity securities (as defined in Section 560
of the Act) for cash pursuant to the authority conferred by
resolution 7 above as if Section 561 of the Act did not apply
to any such allotment, provided that this power shall be
limited to:
5. To re-appoint Francis Clark LLP as auditors of
i.
the Company.
6. To authorise the Directors to fix the remuneration
of Francis Clark LLP.
Authority to allot shares
7. THAT the Directors be and are hereby generally and
unconditionally authorised pursuant to Section 551 of the
Companies Act 2006 as amended (the “Act”) to exercise all
the powers of the Company to allot shares in the Company
and to grant rights to subscribe for, or to convert any
security into, shares in the Company up to an aggregate
nominal value of £2,540,701 being 33% of the issued
share capital of the Company, provided that this authority
shall expire at the conclusion of the next Annual General
Meeting of the Company after the passing of this resolution,
save that the Company shall be entitled to make an offer or
agreement before the expiry of such authority which would
or might require shares to be allotted or any such rights
the allotment of equity securities in connection with
a rights issue, open offer or other offer of securities in
favour of the holders of ordinary shares on the register
of members at such record date(s) as the Directors may
determine where the equity securities respectively
attributable to the interests of the ordinary shareholders
are proportionate (as nearly as may be) to the respective
numbers of ordinary shares held by them on any such
record date(s), subject to such exclusions or other
arrangements as the Directors may deem necessary
or expedient to deal with treasury shares, fractional
entitlements or legal or practical problems arising under
the laws of any overseas territory or the requirements of
any regulatory body or stock exchange or by virtue of
shares being represented by depositary receipts or any
other matter whatever; and
ii. the allotment (other than pursuant to sub-paragraph (i)
above) to any person or persons of equity securities up
to an aggregate nominal value of £769,909.40 being 10%
of the issued share capital of the Company.
marketing group plc 2013 annual report
notice of annual general meeting
notice of annual
general meeting
This power shall expire upon the expiry of the general
authority conferred by resolution 7 above, save that the
Company shall be entitled to make an offer or agreement
before the expiry of such power which would or might
require equity securities to be allotted after such expiry
and the Directors shall be entitled to allot equity securities
pursuant to any such offer or agreement as if the power
conferred hereby had not expired and all unexercised
authorities previously granted to the Directors to allot equity
securities be and are hereby revoked provided that the
resolution shall not affect the right of the Directors to allot
equity securities in pursuance of any offer or agreement
entered into prior to the date of this resolution.
Authority to purchase own shares
9. THAT pursuant to section 701 of the Act and subject to, and
in accordance with the Company’s Articles of Association,
the Company be generally and unconditionally authorised
to make market purchases (within the meaning of Section
693(4) of the Act) of ordinary shares of the Company
provided that:
i.
the maximum number of ordinary shares hereby
authorised to be acquired is 11,548,641 being 15%
of the issued share capital; and
ii. the minimum price which may be paid for an ordinary
share is the nominal value of such share; and
iii. the maximum price which may be paid for an ordinary
share is an amount equal to 105% of the average of the
middle market quotations for an ordinary share in the
Company as derived from The London Stock Exchange
Daily Official List for the 5 business days immediately
preceding the day on which such ordinary share is
contracted to be purchased; and
iv. the authority hereby conferred shall expire at the
conclusion of the Annual General Meeting of the
Company held in 2015 or 18 months from the date
of this resolution (whichever is earlier); and
v. the Company may make any purchase of its ordinary
shares pursuant to a contract concluded before the
authority hereby conferred expires and which will or
may be executed wholly or partly after the expiry of
such authority; and
vi. all ordinary shares purchased pursuant to the authority
conferred by this resolution 9 shall be cancelled
immediately on completion of the purchase or held in
treasury (provided that the aggregate nominal value
of shares held as treasury shares shall not at any time
exceed 10 per cent of the issued share capital of the
Company at any time).
By Order of the Board
Peter Fitzwilliam
25 March 2014
Note to the Notice of Annual General Meeting.
A member entitled to attend and vote at the Annual
General Meeting may appoint one or more proxies
(who need not be a member of the Company) to attend,
speak and vote on his or her behalf. To appoint as your
proxy a person other than the chairman of the meeting,
insert their full name in the box on the Form of Proxy
accompanying the annual report. If you sign and return
the proxy form with no name inserted in the box, the
chairman of the meeting will be deemed to be your
proxy. Where you appoint as your proxy someone other
than the chairman, you are responsible for ensuring
that they attend the meeting and are aware of your
voting intentions. If you wish your proxy to make any
commitments on your behalf, you will need to appoint
someone other the chairman, and give them relevant
instructions directly. In order to be valid an appointment
of proxy must be completed, signed and returned
in hard copy form by post, by courier or by hand to
Neville Registrars Limited, Neville House, 18 Laurel Lane,
Halesowen, West Midlands B63 3DA.
marketing group plc 2013 annual report
advisors
65 | 66
advisors
Company Registration 05733632
Number:
Registered Office:
Nominated Advisor
and Broker:
36 Percy Street
London
W1T 2DH
finnCap Limited
60 New Broad Street
London
EC2M 1JJ
Auditors:
Solicitors:
Registrars:
Francis Clark LLP
Sigma House
Oak View Close
Edginswell Park
Torquay
TQ2 7FF
Lewis Silkin LLP
5 Chancery Lane
Clifford’s Inn
London
EC4A 1BL
Neville Registrars
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
Company Secretary:
Bankers:
Peter Fitzwilliam
The Mission Marketing Group plc
36 Percy Street
London
W1T 2DH
Royal Bank of Scotland plc
Corporate Banking
9th Floor
280 Bishopsgate
London
EC2M 4RB
annual report and accounts year ended 31 december:
2013
marketing group plc
36 Percy Street, London W1T 2DH
t: +44 (0)203 463 2099
themission.co.uk