NORMAN BROADBENT PLC – Final Results.
25
April 2013
Norman Broadbent plc
("Norman Broadbent" or "the
Company")
Final Results
Norman
city (1990 pop. 80,071), seat of Cleveland co., central Okla.; inc. 1891. It is the center of a livestock region. Oil wells, food processing, and printing and publishing contribute to the economy, and there is diverse manufacturing (machinery, communication
Broadbent plc, a leading provider of executive search and
leadership consultancy services, announces its audited financial results
for the year ended 31
December
see month.
2012.
Financial highlights
* Revenue increased to [pounds sterling]7.6 million from [pounds
sterling]6.9 million for the year ended 31
December 2011, an increase of 10.6 per cent.
* Results summary:
*
Revenue
2012
2011
[pounds
sterling]000 [pounds sterling]000
Executive Search / Interim 6,673
5,976
Assessment & Leadership Consulting 586
591
Overseas royalties 339
333
Social Media Search & Consulting 36
-
7,634
6,900
Group operating profit before restructuring costs 293
301
Restructuring costs (331)
(802)
Operating loss (38)
(501)
Finance cost (35)
(34)
Loss before tax (73)
(535)
Tax charge (42)
(26)
Loss after tax (115)
(561)
EPS - basic (1.16)p
(5.96)p
EPS - adjusted (0.52)p
(5.16)p
* Group operating profit before restructuring costs maintained at
[pounds sterling]293,000
(2011: [pounds sterling]301,000).
* Oversubscribed placing of [pounds sterling]742,560 in November 2012
to facilitate an
acquisition and establishment of new subsidiaries.
* Year-end cash of [pounds sterling]1.0 million (2011: [pounds
sterling]0.65 million).
* No bank debt other than invoice discounting facility following
repayment of
the outstanding term loan and deferred consideration.
* Net assets increased to [pounds sterling]3.2 million (2011: [pounds
sterling]2.3 million).
, Executive Chairman of Norman Broadbent, said:
“We remain committed to achieving increased market share in the
UK search market whilst pursuing geographical and product
on a cost efficient basis. This allows us to enhance our
relationship with our UK clients, attract new clients and to develop
scale through overseas revenues. The brand of Norman Broadbent is
strong, not just in the UK but around the globe and should continue to
strengthen throughout 2013.”
For further information please contact:
Norman Broadbent plc 020 7484 0000
Pierce Casey/Sue O’Brien/Ben
Felton
Sanlam Securities UK Limited 020 7628 2200
Simon Clements/Virginia Bull/Catherine Miles
Notes to Editors
Norman Broadbent plc is a leading provider of executive search and
leadership consultancy services. It offers board and executive search
services, interim management services and leadership consultancy
services, such as executive assessment and development, talent
management, and
executive coaching
services. Headquartered in
London
city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826.
,
the group operates globally and has offices in
Barcelona
, city (1990 pop. 4,738,354), capital of Barcelona prov. and chief city of Catalonia, NE Spain, on the Mediterranean Sea.
,
Bogota
The capital and largest city of Colombia, in the central part of the country on a high plain in the eastern Andes. It was a center of Chibcha culture before the Spanish established a settlement in 1538. Population: 6,980,000.
,
Brussels
, Fr. Bruxelles, Du. Brussel, city and region (1995 pop. 948,122), 63 sq mi (162 sq km), capital of Belgium, central Belgium, on the Senne River and at the junction of the Charleroi-Brussels and Willebroek
,
Dublin
Irish Baile Átha Cliath, county borough (1991 pop. 915,516), Leinster, capital of the Republic of Ireland, on Dublin Bay at the mouth of the Liffey River.
,
Limassol
, city (1992 pop. 87,091), S Cyprus, on Akrotiri Bay. It is a district administrative center, a port, and a resort. Wine and agricultural goods are exported. Chrome and asbestos are mined in the district.
, Milan,
Madrid
, city (1990 pop. 3,120,732), capital of Spain and of Madrid prov., central Spain, and the focus of its own autonomous region, on the Manzanares River.
, Paris,
Singapore
, officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km).
,
Los Angeles
, city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850.
and across the Middle East and North Africa.
For further information visit www.normanbroadbent.com
CHAIRMAN’S STATEMENT
INTRODUCTION
Norman Broadbent plc (the “Company” or the
“Group”) is a human capital consultancy which operates as a
global executive search and leadership consultancy business,
headquartered in London. It has a network of subsidiary and licenced
international offices providing international reach across
Europe
, 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000).
, Asia,
North America
third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere.
,
Latin America
the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies.
, Middle East and North Africa.
Following an
oversubscribed
share placing in
November
see month.
2012 raising
[pounds sterling]742,560, the Group has extended its product offering
via the establishment of two complementary, but separately branded
businesses –
Arcus
/ar·cus/ () pl. ar´cus [L.] arch; bow.
arcus adipo´sus , arcus cor´neae, arcus juveni´lis
Global Partners and Connecting Corporates – which
provide flexible solutions to clients in the market ‘below’
our traditional board search practice and harness the power of social
media. The Company also acquired a controlling stake in an established,
profitable
Belgian
leadership consulting and search business to extend
the geographic reach of the Norman Broadbent business. The Group
continues to
appraise
v. to professionally evaluate the value of property including real estate, jewelry, antique furniture, securities, or in certain cases the loss of value (or cost of replacement) due to damage.
further opportunities to
diversify
To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries.
both
geographically and in terms of product offerings.
RESULTS FOR THE FINANCIAL YEAR
The table below summarises the results of the Group:
Revenue 2012 2011
[pounds sterling]000
[pounds sterling]000
Executive Search / Interim 6,673 5,976
Assessment & Leadership Consulting 586 591
Overseas royalties 339 333
Social Media Search & Consulting 36 -
7,634 6,900
Group operating profit before 293 301
restructuring costs
Restructuring costs (331) (802)
Operating loss (38) (501)
Finance cost (35) (34)
Loss before tax (73) (535)
Tax charge (42) (26)
Loss after tax (115) (561)
EPS - basic (1.16)p (5.96)p
EPS - adjusted (0.52)p (5.16)p
Group revenue for the year increased to [pounds sterling]7.6 million
from [pounds sterling]6.9 million in 2011, an increase of 10.6 per cent,
while
operating profit
See operating income.
before non-recurring
restructuring
costs was
maintained at [pounds sterling]293,000 compared with [pounds
sterling]301,000 in the previous year. The loss after tax, pre-minority
interests, narrowed substantially to [pounds sterling]115,000 from a
loss of [pounds sterling]561,000 in 2011.
Core board and executive search revenues increased by 11.7 per cent
to [pounds sterling]6.7 million from [pounds sterling]6.0 million in
2011. The search business contributed an operating profit before
restructuring costs of [pounds sterling]476,000 (2011: [pounds
sterling]464,000) which includes the impact of start-up losses in the
newly formed international subsidiaries in the USA and Singapore.
The UK leadership consulting and assessment business did well to
withstand the sad death in
October
see month.
2012 of the founder of HADIL, who had
remained a significant revenue producer. We appointed his successor
Carole Bodell, an experienced leader in human capital businesses, to
lead the business in November.
Traction
Definition
Traction is the use of a pulling force to treat muscle and skeleton disorders.
Purpose
Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis.
is now increasing albeit
following an expected time lag. In order to leverage off the core brand,
we have now integrated the business into Norman Broadbent Leadership
Consulting. With HADIL’s core of exceptional occupational
the practice is well placed to drive greater brand
recognition of our leadership assessment services.
Overseas royalties totalled [pounds sterling]339,000 (2011: [pounds
sterling]333,000) which was highly creditable given the weak economies
pertaining
intr.v. per·tained, per·tain·ing, per·tains
1. To have reference; relate:
2.
in
Spain
Span. España , officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe.
and
Italy
, Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe.
, and the on-going geo-political tensions
in the Middle East.
CORPORATE DEVELOPMENTS
2012 was another year of significant development for the Company
with further expansion overseas combined with strategic diversification
of our core products offerings. In November 2012, the Company acquired a
51 per cent stake in
Acker
Deboeck & Company, a well-established and
profitable leadership consulting and search business based in Brussels.
This firm, now rebranded Norman Broadbent, has integrated well into the
Group. It has particularly enhanced the existing UK and international
leadership consulting teams and the Directors believe that leadership
assessment and consulting will be an area of revenue growth over the
next few years given current market trends.
The two new international search businesses incorporated during the
year in Singapore and USA, are now gaining traction in their respective
territories with the increased brand awareness starting to lead to new
business flow. Since the year ended 31 December 2012, we have also
established (through our Belgian subsidiary) a dedicated Paris based
executive search company led by an experienced local search
professional.
As part of a strategy to leverage the Group’s strengths and
diversify from a reliance on traditional retained executive search, the
Company completed a successful, oversubscribed share placing in November
2012, raising [pounds sterling]742,560, with some of the funds going
towards establishing two complementary businesses:
Arcus Global Partners, led by Simon Vaughan-Edwards who joined the
Group in March 2013, has been formed to provide existing and new clients
with innovative, tactical or strategic solutions for their human capital
needs. This ranges from contingent search for roles below full and
operating board level, through to short term contracting, in-house
RPO
RPO Royal Philharmonic Orchestra
RPO Rochester Philharmonic Orchestra
RPO Representative Poetry Online
RPO Railway Post Office
solutions, talent mapping and candidate pipeline provision.
Connecting Corporates, trading through the established brands of
“WinningWork” and “Social Media Search”, provides
rapid,
bespoke
v.
Past tense and a past participle of bespeak.
adj.
1. Custom-made. Said especially of clothes.
2. Making or selling custom-made clothes: a bespoke tailor.
, candidate lists for client’s in-house recruitment
teams, using innovative search techniques through multiple social media
and online channels. WinningWork is a
sales management
tool used to
exploit social media to drive sales in professional service firms and
those operating in a B2B environment.
I am pleased to report that, although both businesses are at a very
early stage of development, they have started well; attracting high
talent, working closely with the Norman Broadbent Executive
Search team and are currently operating in line with management’s
expectations.
FINANCIAL POSITION
The consolidated Group statement of financial position was
strengthened through the November 2012 placing of 2,121,600 new ordinary
shares, raising [pounds sterling]727,560 net of [pounds sterling]15,000
expenses. As at 31 December 2012 consolidated
net assets
See owners’ equity.
were [pounds
sterling] 3.2 million, compared to [pounds sterling]2.3 million as at 31
December 2011. Group
net current assets
See working capital.
increased to [pounds
sterling]1.09 million (2011: [pounds sterling]0.47 million) while Group
cash increased to [pounds sterling]1.0 million ([pounds sterling]0.65
million).
During the year under review, the Group repaid its residual term
loan of [pounds sterling] 109,000 in full and in addition reduced the
outstanding deferred consideration from the Norman Broadbent acquisition
in 2008 from [pounds sterling]481,000 to [pounds sterling]73,000 at 31
December 2012. This [pounds sterling]73,000 balance was repaid shortly
after the year end. The Group now has no bank debt other than its
on-going
invoice
discounting facility, which had a balance outstanding
of [pounds sterling]965,000 at the year-end (2011: [pounds sterling]
625,000). This was higher in 2012 due to the increase in sales and the
improved aging profile of the trade
receivables
at the year-end compared
with 2011.
From March 2013, all
Spanish
river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river.
royalties are retained by the Company,
as compared to the previous arrangement whereby the payments flowed
through on a quarterly basis to satisfy the outstanding deferred
consideration.
OPERATIONAL EFFICIENCIES
As a group we
continually
adj.
1. Recurring regularly or frequently:
2.
review our processes and our cost base to
ensure it is effective, cost efficient and fit for the changing market
conditions in which we operate. During the year we agreed new, more
efficient IT contracts and moved our core database onto an innovative
product. Since the year end we have signed a new lease on
our head office in St James’s Square on more favourable terms and
we expect to have sufficient space to accommodate the new UK subsidiary
businesses until at least the end of 2013.
These savings will have a meaningful positive impact on the monthly
fixed overhead of the Group from the second quarter of 2013.
BUSINESS DEVELOPMENT
Our UK search practice has a quality, though relatively concentrated
client base from which it continues to enjoy considerable repeat levels
of business. Over recent years it is evident that the retained executive
search market has become more competitive as clients successfully source
more senior talent online or through contingent suppliers. Our Group now
has the ability to provide these solutions to UK clients through Arcus
Global Partners and Connecting Corporates, thereby allowing us to expand
our client base both in retained search and these new complimentary
services. Over time we anticipate extending the Arcus Global Partners
and Connecting Corporates offerings internationally.
CURRENT TRADING AND OUTLOOK
The continued diversification in 2012 and early 2013 has resulted in
a more robust Group with a compelling suite of service offerings in an
environment where traditional retained search has seen revenues decline
across the industry, but particularly in the UK and Europe. Our UK
search revenues for the first quarter of 2013 were lower than the first
quarter in 2012, in part due to the industry challenges and partly
caused by a reduced number of search consultants compared with last
year. However, we have a lower comparable fixed cost base, no further
expected restructuring costs and the operational efficiencies flagged
above should compensate for this reduction in revenues. The current UK
search pipeline is reasonable and we are pleased with initial progress
in the new USA, Singapore and Paris offices following recent successful
launch events in these territories.
The Board believes that our more potent,
diversified
offerings will,
in the absence of unforeseen
circumstances
, lead to a larger more
profitable Group over the next few years.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2012
Note 2012
2011
[pounds
sterling]000 [pounds sterling]000
REVENUE 2 7,634
6,900
Cost of sales (208)
(109)
GROSS PROFIT 2 7,426
6,791
Operating expenses (7,133)
(6,515)
Other income -
25
GROUP OPERATING PROFIT BEFORE RE-STRUCTURING 293
301 COSTS
Re-structuring costs 4 (331)
(802)
GROUP OPERATING LOSS (38)
(501)
Net finance cost 7 (35)
(34)
LOSS ON ORDINARY ACTIVITIES BEFORE 3 (73)
(535) INCOME TAX
Income tax expense 6 (42)
(26)
LOSS FOR THE YEAR (115)
(561)
OTHER COMPREHENSIVE INCOME
Foreign currency translation 2
- differences - foreign operations
TOTAL COMPREHENSIVE INCOME FOR THE (113)
(561) YEAR
Loss attributable to:
* Owners of the Company (127)
(561)
* Non-controlling interests 12
-
Loss for the year (115)
(561)
Total comprehensive income attributable to:
* Owners of the Company (127)
(561)
* Non-controlling interests 14
-
Total comprehensive income for the (113)
(561) year
Loss per share 8
- Basic (1.16)p
(5.96)p
- Diluted (1.16)p
(5.96)p
Adjusted loss per share 8
- Basic (0.52)p
(5.16)p
- Diluted (0.52)p
(5.16)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2012
Notes 2012
2011
[pounds
sterling]000 [pounds sterling]000
Non-Current Assets
Intangible assets 10 1,922
1,810
Property, plant and equipment 11 139
131
Deferred tax assets 6 69
69
TOTAL NON-CURRENT ASSETS 2,130
2,010
Current Assets
Trade and other receivables 14 2,267
1,829
Cash and cash equivalents 15 1,009
650
TOTAL CURRENT ASSETS 3,276
2,479
TOTAL ASSETS 5,406
4,489
Current Liabilities
Trade and other payables 16 1,075
980
Deferred consideration 17 73
300
Bank overdraft and interest bearing 17 965
734 loans
Corporation tax liability 72
-
TOTAL CURRENT LIABILITIES 2,185
2,014
NET CURRENT ASSETS 1,091
465
Non-Current Liabilities
Deferred consideration 17 -
181
TOTAL LIABILITIES 2,185
2,195
TOTAL ASSETS LESS TOTAL LIABILITIES 3,221
2,294
EQUITY
Issued share capital 19 5,857
5,833
Share premium account 19 9,572
8,758
Retained earnings (12,353)
(12,297)
EQUITY ATTRIBUTABLE TO OWNERS OF THE 3,076
2,294 COMPANY
Non-controlling interests 145
-
TOTAL EQUITY 3,221
2,294
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2012
Attributable to owners of the
Company
Share Share Retained Total
Non-controlling Total
Capital Premium Earnings
interests Equity
Equity
[pounds sterling]000 [pounds
sterling]000 [pounds sterling]000 [pounds
sterling]000 [pounds sterling]000
[pounds
sterling]000
Balance at 1st January 2011 5,804 6,985 (11,811) 978 -
978
Loss for the year - - (561) (561) -
(561)
Total comprehensive income - - (561) (561) -
(561) for the year
Transactions with owners of the Company, recognised directly in equity:
Issue of ordinary shares 29 1,773 - 1,802 -
1,802
Credit to equity for share - - 75 75 -
75 based payments
Total transactions with 29 1,773 75 1,877 -
1,877 owners of the Company, recognised directly in equity
Balance at 31st December 5,833 8,758 (12,297) 2,294 -
2,294 2011
Balance at 1st January 2012 5,833 8,758 (12,297) 2,294 -
2,294
Loss for the year - - (127) (127) 12
(115)
Total other comprehensive - - - - 2
2 income
Total comprehensive income - - (127) (127) 14
(113) for the year
Transactions with owners of the Company, recognised directly in equity:
Issue of ordinary shares 24 814 - 838 -
838
Credit to equity for share - - 71 71 -
71 based payments
Acquisition of subsidiary - - - - 131
131 with non-controlling interests
Total transactions with 24 814 71 909 131
1,040 owners of the Company, recognised directly in equity
Balance at 31st December 5,857 9,572 (12,353) 3,076 145
3,221 2012
CONSOLIDATED STATEMENT OF CASH FLOW
For the year ended 31 December 2012
Notes 2012
2011
[pounds
sterling]000 [pounds sterling]000
Net cash used in operating activities (250)
(561)
Cash flows from investing activities and servicing of finance
Net finance cost (35)
(35)
Dividends received -
25
Payments to acquire tangible fixed assets 11 (92)
(33)
Repayment of deferred consideration (408)
(528)
Net cash inflow on acquisition of 23 181
- subsidiary
Net cash used in investing activities (354)
(571)
Cash flows from financing activities
Net cash inflows from equity placing 19 727
1,750
Repayment of secured loans (109)
(116)
Repayment of directors' loans -
(7)
Increase in invoice discounting 341
14
Net cash from financing activities 959
1,641
Net increase in cash and cash equivalents 356
510
Net cash and cash equivalents at beginning of period 650
140
Effects of exchange rate changes on cash balances held 4
- in foreign currencies
Net cash and cash equivalents at end of period 1,009
650
Analysis of net funds
Cash and cash equivalents 1,009
650
Borrowings due within one year (965)
(734)
Borrowings due after one year -
-
Deferred consideration (73)
(481)
Net funds (29)
(565)
Note (i)
Reconciliation of operating loss to net cash from 2012
2011 operating activities
[pounds
sterling]000 [pounds sterling]000
Operating loss (38)
(501)
Depreciation/impairment of property, plant and equipment 84
79
Share based payment charge 71
75
Dividends received -
(25)
(Increase)/decrease in trade and other (438)
144 receivables
Increase/(decrease) in trade and other payables 165
(306)
Taxation paid (94)
(27)
Net cash used in operating activities (250)
(561)
1. ACCOUNTING POLICIES
Basis of preparation
The
consolidated financial statements
of Norman Broadbent plc
(“Norman Broadbent” or “the Company”) have been
prepared in
accordance
with
International Financial Reporting Standards
as adopted by the European Union (
IFRS
IFRS Inter Frame Relay Service
IFRS Indiana Facilities Registry System
as adopted by the EU),
IFRIC
interpretations and the Companies Act 2006 applicable to Companies
reporting under IFRS. The consolidated financial statements have been
prepared under the historical cost convention, as modified by the
and liabilities (including
derivative
instruments
) at fair value through profit or loss.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying
the Group’s accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements are
disclosed in
notes to the financial statements
.
The financial information set out above does not comprise the
Company’s statutory accounts for the periods ended 31 December 2012
or 31 December 2011. Statutory accounts for 31 December 2011 have been
delivered to the
Registrar of Companies
and those for 31 December 2012
will be delivered following the Company’s Annual General Meeting.
The
auditors
have reported on those accounts; their report was
unqualified, did not include references to any matters to which the
auditors drew attention by way of emphasis of matter without qualifying
their report and did not contain statements under section 498(2) or (3)
of the Companies Act 2006 in respect of the accounts for 2012 or for
2011.
Going concern
The Group reported an
operating loss
The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income.
in the year to 31 December 2012
of [pounds sterling]38,000 compared with an operating loss of [pounds
sterling]501,000 in 2011. However these losses were primarily driven by
residual
one-off
planned restructuring costs in the UK search business
totalling [pounds sterling]331,000 (2011: 802,000), which will not be
repeated in 2013.
The Consolidated Statement of Financial Position shows a strong net
asset position at 31 December 2012 of [pounds sterling]3.22 million
(2011: [pounds sterling]2.29 million) with cash at bank of [pounds
sterling]1.01 million (2011: [pounds sterling]0.65 million). At the date
that these financial statements were approved the only bank debt owed by
the Company was its invoice discounting facility which is secured by the
Group’s trade receivables.
In light of the current financial position of the Group and on
consideration of the business’ forecasts and projections, taking
account of possible changes in trading performance, the directors have a
reasonable expectation that the Group has adequate available resources
to continue as a going concern for the
foreseeable
tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees
To see or know beforehand:
future. For these
reasons, they continue to adopt the going concern basis in preparing
their annual report and financial statements.
2.
SEGMENTAL
/seg·men·tal/ ()
1. pertaining to or forming a segment or a product of division, especially into serially arranged or nearly equal parts.
2. undergoing segmentation.
ANALYSIS
Management has determined the operating segments based on the
reports reviewed regularly by the board for use in deciding how to
resources and in assessing performance. The Board considers
Group operations from both a class of business and geographic
perspective.
Each class of business derives its revenues from the supply of a
particular recruitment related service, from retained executive search
through to executive assessment and coaching. Business segment results
are reviewed primarily to operating profit level, which includes
employee costs, marketing, office and accommodation costs and
appropriate recharges for management time.
Group revenues are primarily driven from UK operations however, when
revenue is derived from overseas business the results are presented to
the Board by geographic region to identify potential areas for growth or
those posing potential risks to the Group.
i) Class of Business:
The analysis by class of business of the Group’s turnover,
profit before taxation and net assets/ (liabilities) is set out
below:
BUSINESS SEGMENTS
2012 Executive Overseas Interim Assessment, Social
Un- Total
Search Royalties coaching & Media
allocated
[pounds sterling]000
talent Search & [pounds sterling]000
[pounds sterling]000 [pounds sterling]000
mgmt. Consulting [pounds sterling]000
[pounds
sterling]000 [pounds sterling]000
Revenue 6,607 339 66 586 36
- 7,634
Cost of sales (118) - - (89) (1)
- (208)
Gross profit 6,489 339 66 497 35
- 7,426
Operating (5,931) (119) - (612) (32)
(357) (7,051) expenses
Other operating - - - - -
- - income
Re-structuring (331) - - - -
- (331) costs
Finance costs (31) - - - -
(4) (35)
Depreciation and (82) - - - -
- (82) amort.
Profit/(loss) 114 220 66 (115) 3
(361) (73) before tax
Net assets 3,129 - - 89 3
- 3,221
BUSINESS SEGMENTS
2011 Executive Overseas Interim Assessment, Social
Un-allocated Total
Search Royalties coaching &
Media
[pounds sterling]000
talent Search & [pounds sterling]000 [pounds
sterling]000
[pounds sterling]000 [pounds sterling]000
mgmt. Consulting
[pounds
sterling]000 [pounds sterling]000
Revenue 5,929 333 47 591 -
- 6,900
Cost of sales (50) - - (59) -
- (109)
Gross profit 5,879 333 47 532 -
- 6,791
Operating expenses (5,336) (119) - (580) -
(401) (6,436)
Other operating 25 - - - -
- 25 income
Re-structuring (512) - - - -
(290) (802) costs
Finance costs (34) - - - -
- (34)
Depreciation and (79) - - - -
- (79) amort.
Profit/(loss) (57) 214 47 (48)
(691) (535) before tax
Net assets 2,312 - - (18)
- 2,294
The unallocated costs refer to central costs of the Group including
salaries, professional and other costs, which are not directly
attributable to the delivery of the services. The four segments shown
represent the management information provided to the Board and in the
opinion of the directors reflect the nature of the Group’s
services.
ii) Geographic Region:
The analysis by geographic region of the Group’s turnover,
profit before taxation and net assets/ (liabilities) is set out
below:
BUSINESS SEGMENTS
2012 Executive Overseas Interim Assessment, Social
Un-allocated Total
Search Royalties coaching & Media
[pounds sterling]000 talent
Search & [pounds sterling]000 [pounds sterling]000
[pounds sterling]000 [pounds sterling]000
mgmt. Consulting
[pounds sterling]000
[pounds sterling]000
Revenue
United Kingdom 6,413 - 66 471 36
- 6,986
Europe 148 275 - 114 -
- 537
Other 46 64 - 1 -
- 111
Total 6,607 339 66 586 36
- 7,634
Gross profit
United Kingdom 6,302 - 66 428 35
- 6,831
Europe 148 275 - 69 -
- 492
Other 39 64 - - -
- 103
Total 6,489 339 66 497 35
- 7,426
Profit/(loss) before tax
United Kingdom 114 - 66 (63) 3
(361) (241)
Europe - 157 - (51) -
- 106
Other - 63 - (1) -
- 62
Total 114 220 66 (115) 3
(361) (73)
Net assets
United Kingdom 3,129 - - 89 3
- 3,221
Total 3,129 - - 89 3
- 3,221
BUSINESS SEGMENTS
2011 Executive Overseas Interim Assessment, Social
Un-allocated Total
Search Royalties coaching & Media
[pounds sterling]000 talent
Search & [pounds sterling]000 [pounds sterling]000
[pounds sterling]000 [pounds sterling]000
mgmt. Consulting
[pounds sterling]000
[pounds sterling]000
Revenue
United Kingdom 5,284 - 34 356 -
- 5,674
Europe 333 263 10 235 -
- 841
Other 312 70 3 - -
- 385
Total 5,929 333 47 591 -
- 6,900
Gross profit
United Kingdom 5,234 - 34 309 -
- 5,577
Europe 333 263 10 223 -
- 829
Other 312 70 3 - -
- 385
Total 5,879 333 47 532 -
- 6,791
Profit/(Loss) before tax
United Kingdom (57) - 34 (40) -
(691) (754)
Europe - 164 10 (8) -
- 166
Other - 50 3 - -
- 53
Total (57) 214 47 (48) -
(691) (535)
Net assets
United Kingdom 2,312 - - (18) -
- 2,294
Total 2,312 - - (18) -
- 2,294
Turnover by location is not materially different from turnover by
destination.
3. (LOSS) / PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
2012
2011
[pounds
sterling]000 [pounds sterling]000
Loss on ordinary activities before taxation is stated after charging:
Depreciation and
impairment
of property, plant and 84 79
equipment
Loss on foreign currency exchange 16 19 Operating lease rentals: Land and buildings 327 305 Auditors' remuneration: Audit work 34 33 Non-audit work - -
The Company audit fee in the year was [pounds sterling]11,500 (2011:
[pounds sterling]10,000).
4. RE-STRUCTURING COSTS
Re-structuring costs include residual personnel costs
relating to
relate prep →
relate prep → ,
the hiring of new consultants in 2011, exiting of under-performing staff
and external recruitment consultancy costs relating to the new
hires.
These items have been highlighted in the consolidated statement of
comprehensive income because separate disclosure is considered
appropriate in understanding the underlying performance of the
business.
2012 2011
[pounds
sterling]000 [pounds sterling]000
Personnel 331 677
Consultancy - 125
Total re-structuring costs 331 802
5. STAFF COSTS
The average number of full time equivalent 2012 2011
persons (including directors)
No. No.
employed by the Group during the period was as follows:
Sales and related services 25 23
Administration 30 30
55 53
Staff costs (for the above persons): [pounds
sterling]000 [pounds sterling]000
Wages and salaries 4,605 4,254
Social security costs 476 439
Defined contribution pension cost 206 177
Share based payment expense (note 71 75
20)
5,358 4,945
The emoluments of the directors are disclosed as required by the
Companies Act 2006 on page 9 of the Report and Accounts in the
Directors’
Remuneration
Report.
6. TAX EXPENSE
(a) Tax charged in the income statement
Taxation is based on the profit for 2012
2011 the year and comprises:
[pounds
sterling]000 [pounds sterling]000
Current tax:
United Kingdom corporation tax at 42 26
24.5% (2011: 26.5%) based on profit for the year
Adjustment in respect of prior years - -
Total current tax 42 26
Deferred tax:
Origination and reversal of temporary differences - -
Tax charge/(credit) 42 26
(b) Reconciliation of the total tax charge
The difference between the current tax shown above and the amount
calculated by applying the standard rate of UK corporation tax to the
profit before tax is as follows:
2012
2011
[pounds
sterling]000 [pounds sterling]000
Loss on ordinary activities before (73)
(535) taxation
Tax on loss on ordinary activities at (18)
(142) standard UK corporation tax rate of 24.5% (2011: 26.5%)
Effects of:
Expenses not deductible 32 50
Foreign tax suffered 18 -
Non-taxable income (1) (7)
Capital allowances in excess of 14 12
depreciation
Utilisation of ACT (2) (4)
Adjustment to losses carried forward (1) 113
Other adjustments - 4
Current tax charge/(credit) for the 42 26
year
(c) Deferred tax
Tax losses Total
[pounds
sterling]000 [pounds sterling]000
At 01 January 2011 (69) (69)
Credited to the income statement in - -
2011
At 31 December 2011 (69) (69)
Credited to the income statement in - -
2012
At 31 December 2012 (69) (69)
At 31 December 2012 the Group had capital losses carried forward of
[pounds sterling]8,130,000 (2011: [pounds sterling]8,130,000). A
deferred tax asset has not been recognised for the capital losses as the
recoverability in the near future is uncertain. The Group also has
[pounds sterling]10,000,000 (2011: [pounds sterling]10,000,000)
trading
losses
carried forward, which includes [pounds sterling]8,987,000 losses
transferred from
BNB
BNB Banque Nationale de Belgique
BNB Bulgarian National Bank
BNB British National Bibliography
BNB Bad News Bears
Recruitment Consultancy Ltd in 2011. A deferred tax
asset of [pounds sterling]1,613,000 has not been recognised in the
financial statements due to the inherent uncertainty as to the quantum
and timing of its utilisation.
The analysis of deferred tax in the
consolidated balance sheet
A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm.
is as
follows:
2012
2011
Deferred tax assets: [pounds
sterling]000 [pounds sterling]000
Tax losses carried forward 69
69
Total 69
69
7. NET FINANCE COST
2012
2011
[pounds
sterling]000 [pounds sterling]000
Interest payable on bank loans and overdrafts 35
34
Total 35
34
8. EARNINGS PER SHARE
i) Basic earnings per share
This is calculated by dividing the profit attributable to equity
holders of the Company by the weighted average number of ordinary shares
in issue during the period:
2012
2011
Loss attributable to shareholders [pounds
sterling](127,000) [pounds sterling](561,000)
Weighted average number of ordinary 10,929,676
9,416,510 shares
ii)
Diluted earnings per share
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of
This is calculated by adjusting the weighted average number of
ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The Company has two categories of dilutive
potential ordinary shares: share options and warrants. For these options
and warrants, a calculation is done to determine the number of shares
that could have been acquired at fair value (determined as the average
annual market share price of the Company’s shares) based on the
monetary value of the subscription rights attached to the outstanding
warrants and options. The number of shares calculated as above is
compared with the number of shares that would have been issued assuming
the exercise of the share options.
2012
2011
Loss attributable to shareholders [pounds
sterling](127,000) [pounds sterling](561,000)
Weighted average number of ordinary 10,929,676
9,416,510 shares
- assumed conversion of share options -
49,272
- assumed conversion of warrants -
55,343
Total 10,929,676
9,521,125
iii) Adjusted earnings per share
An adjusted earnings per share has also been calculated in addition
to the basic and diluted earnings per share and is based on earnings
adjusted to eliminate the effects of charges for share based payments.
It has been calculated to allow shareholders to gain a clearer
understanding of the trading performance of the Group.
2012 2012 2012 2011 2011
2011
[pounds sterling]000 Basic Diluted
[pounds sterling]000 Basic Diluted
pence pence pence
pence
per per per
per
share share share
share
Basic earnings
Loss after tax (127) (1.16) (1.16) (561) (5.96)
(5.96)
Adjustments
Share based payment charge 71 0.64 0.64 75 0.80
0.80
Adjusted earnings (56) (0.52) (0.52) (486) (5.16) (5.16)
9. PROFIT OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the income
statement of the parent company is not presented as part of these
accounts. The parent company’s profit for the year amounted to
[pounds sterling]192,000 (2011: loss of [pounds sterling]150,000).
10. INTANGIBLE ASSETS
Group Goodwill
arising on
consolidation
[pounds sterling]000
Balance at 1 January 2011 3,690
Balance at 31 December 2011 3,690
Additions (Note 24) 112
Balance at 31 December 2012 3,802
Provision for impairment
Balance at 1 January 2011 1,880
Balance at 31 December 2011 1,880
Balance at 31 December 2012 1,880
Net book value
At 1 January 2011 1,810
At 31 December 2011 1,810
At 31 December 2012 1,922
Goodwill acquired through business combinations is allocated to
cash-generating units (
CGU
CGU Claremont Graduate University
CGU Chang Gung University
CGU Canadian Geophysical Union
) identified at entity level. The
carrying
value
of intangibles allocated by CGU is shown below:
Norman Human Asset
Total
Broadbent Development
International
[pounds sterling]000
[pounds sterling]000
[pounds
sterling]000
At 1 January 2011 1,750 60
1,810
At 31 December 2011 1,750 60
1,810
At 31 December 2012 1,862 60
1,922
The goodwill attributed to the Norman Broadbent entity can be split
into two further CGU’s, cash generated from the retained Executive
Search and leadership consultancy business of [pounds sterling]1,212,000
(2011: [pounds sterling]1,100,000) and cash generated from International
Royalties of [pounds sterling]650,000 (2011: [pounds
sterling]650,000).
In line with International Financial Reporting Standards, goodwill
has not been amortised from the transition date, but has instead been
subject to an impairment review by the directors of the Group. As set
out in accounting policy note 1 on page 18, the directors test the
goodwill for impairment annually. The recoverable amount of the
Group’s CGUs are calculated on the present value of their
respective
expected future cash flows
, applying a weighted average cost
of capital in line with businesses in the same sector. Pre-tax future
cash flows for the next five years are derived from the approved
forecasts for the 2013 financial year.
The key assumption applied to the forecasts for the business is that
The portion of each dollar of sales that a firm is able to turn into income.
for Norman Broadbent is expected to be a minimum of 10
per cent
per annum
for the foreseeable future (2011: 10 per cent) and 7%
for Human Asset Development International (2011: 10 per cent). Return on
sales defined as the expected profit before tax on net revenue. There
are only minimal non cash flows included in profit before tax. The rate
used to discount the forecast cash flows is 12 per cent (2011: 12 per
cent).
The five year forecasts have been prepared using conservative
revenue
growth rates
to reflect the uncertainty that is still present in
the economy. Based on the above assumptions, at 31 December 2012 the
recoverable value of the Norman Broadbent CGU is [pounds
sterling]2,991,000 and the Human Asset Development International CGU is
[pounds sterling]180,000. Return on sales would need to fall below 7 per
cent for the Norman Broadbent goodwill to be impaired and below 2 per
cent for Human Asset Development International goodwill to be
impaired.
11. PROPERTY, PLANT AND EQUIPMENT
Group Land and Office Fixtures
Motor Total
buildings and and Vehicles
- computer fittings
[pounds sterling]000
leasehold equipment [pounds
sterling]000
[pounds sterling]000
[pounds sterling]000 [pounds
sterling]000
Cost
Balance at 1 January 2011 83 145 128 -
356
Additions - 32 1 -
33
Disposals (21) (1) - -
(22)
Balance at 31 December 2011 62 176 129 -
367
Additions - 53 - -
53
Arising on acquisition of - 7 19 13
39 subsidiaries (note 23)
Disposals - - - - -
Balance at 31 December 2012 62 236 148 13
459
Accumulated depreciation
Balance at 1 January 2011 33 51 95 -
179
Charge for the year 20 48 11 -
79
Disposals (21) (1) - -
(22)
Balance at 31 December 2011 32 98 106 -
236
Charge for the year 22 49 11 2
84
Disposals - - - - -
Balance at 31 December 2012 54 147 117 2
320
Net book value
At 1 January 2011 50 94 33 -
177
At 31 December 2011 30 78 23 -
131
At 31 December 2012 8 89 31 11
139
The Group had no capital commitments as at 31 December 2012 (2011:
[pounds sterling]Nil).
The above assets are owned by Group companies; the Company has no
fixed assets
npl →
npl →
fix npl →
.
12. INVESTMENTS
Company Shares in
subsidiary
undertakings
[pounds sterling]000
Cost
Balance at 1 January 2011
5,786
Balance at 31 December 2011
5,786
Additions (see note below) 255
Balance at 31 December 2012
6,041
Provision for impairment
Balance at 1 January 2011
3,926
Balance at 31 December 2011
3,926
Impairment in the year -
Balance at 31 December 2012
3,926
Net book value
At 1 January 2011 1,860
At 31 December 2011 1,860
At 31 December 2012 2,115
During the year, the company acquired a 51 per cent interest in
Acker Deboeck and Company for a total consideration of [pounds
sterling]248,000 (see note 23). The Company also incorporated wholly
owned subsidiaries in Singapore and USA, with combined share capital of
[pounds sterling]7,000. Funding for the growth of these subsidiaries
will be provided through Group treasury in the form of inter-company
loans.
At 31 December 2012 the Company held the following ownership
interests:
Principal Group Country of Principal
Description and investments: incorporation activities
proportion of
or registration shares
held by
and operation the
Company
Norman Broadbent Executive England and Executive 100%
ordinary Search Ltd Wales search
shares
Norman Broadbent Overseas England and Executive 100%
ordinary Ltd Wales search
shares
Human Asset Development England and Assessment, 100%
ordinary International Wales coaching and
shares
talent mgmt. Ltd
Arcus Global Partners Ltd England and Contingent 100%
ordinary (formerly NBBI Ltd) Wales Search
shares
Norman Broadbent Inc United States Executive 100%
ordinary
of America search
shares
The NB Consultancy Singapore Executive 100%
ordinary (Singapore) Pte. Ltd search
shares
Norman Broadbent SPRL Belgium Executive 51%
ordinary (formerly Acker Deboeck search,
shares and Company) assessment,
coaching and
talent mgmt.
Connecting Corporates Ltd England and Social Media 51%
ordinary
Wales Search &
shares
Consulting
Bancomm Ltd England and Dormant 100%
ordinary
Wales
shares
Norman Broadbent Ireland Republic of Dormant 100%
ordinary Ltd** Ireland
shares
Substantial Shareholdings:
NBS Norman Broadbent SA* Spain Executive 20%
ordinary
search,
shares
assessment,
coaching and
talent mgmt.
* The 20% shareholding in this company is owned by Norman Broadbent
Overseas Ltd, a
wholly owned subsidiary
of the Company.
** The 100% shareholding in this company is owned by Norman Broadbent
Overseas Ltd.
13. INVESTMENTS IN ASSOCIATES
2012
2011
[pounds sterling]000
[pounds sterling]000
At 1 January - 5
Acquisition of shares in associate - 5
Consolidation of wholly owned -
(10) subsidiary
At 31 December - -
14. TRADE AND OTHER RECEIVABLES
Group
Company
2012 2011 2012
2011
[pounds sterling]000
[pounds sterling]000 [pounds sterling]000 [pounds sterling]000
Trade receivables 1,655 1,319 - -
Less: provision for impairment (20) (87) – –
Trade receivables - net 1,635 1,232 -
-
Other debtors 354 185 50
40
and
accrued
v. ac·crued, ac·cru·ing, ac·crues
v.intr.
1. To come to one as a gain, addition, or increment:
2.
income 278 412 5 6
Due from Group undertakings - - 1,513 1,262 Total 2,267 1,829 1,568 1,308
As at 31 December 2012, Group trade receivables of [pounds
sterling]836,000 (2011: [pounds sterling]820,000) were past their due
date but not impaired. They relate to customers with no default history.
The aging profile of these receivables is as follows:
Group
Company
2012 2011 2012
2011
[pounds sterling]000
[pounds sterling]000 [pounds sterling]000 [pounds sterling]000
Up to 3 months 800 624 - -
3 to 6 months 1 31 - -
6 to 12 months 35 165 - -
Total 836 820 - -
The largest amount due from a single
debtor
at 31 December 2012
represents 10.86% (2011: 11.07%) of the total trade receivables balance
outstanding.
As at 31 December 2012, Group trade receivables of [pounds
sterling]20,000 (2011: [pounds sterling]87,000) were past their due date
and impaired. A provision for impairment for the full amount has been
recognised in the financial statements. Movements on the Group’s
provision for impairment of trade receivables are as follows:
2012
2011
[pounds
sterling]000 [pounds sterling]000
At 1 January 87
145
Provision for receivable impairment 20
87
Receivables written-off as (87)
(145) uncollectable
At 31 December 20 87
Other than the impairment provision provided for aged trade
receivables above, there are no other material difference between the
carrying value and the fair value of the Group’s and parent
company’s trade and other receivables.
15. CASH AND CASH EQUIVALENTS
Group
Company
2012 2011 2012
2011
[pounds sterling]000
[pounds sterling]000 [pounds sterling]000 [pounds sterling]000
Cash at bank and on hand 1,009 650 592
366
Total 1,009 650 592
366
There is no material difference between the carrying value and the
fair value of the Group’s and parent company’s cash at bank
and in hand.
16. TRADE AND OTHER PAYABLES
Group
Company
2012 2011 2012
2011
[pounds sterling]000
[pounds sterling]000 [pounds sterling]000 [pounds sterling]000
Trade payables 479 369 73 59
Due to Group undertakings - - 957
764
Other taxation and social security 317 323 (3) (11)
Other payables 75 122 - - Accruals 204 166 38 25 Total 1,075 980 1,065 837
There is no material difference between the carrying value and the
fair value of the Group’s and parent company’s trade and other
payables.
17. BORROWINGS
Group
Company
Maturity profile of borrowings 2012 2011 2012 2011
[pounds sterling]000
[pounds sterling]000 [pounds sterling]000 [pounds sterling]000
Current
Bank overdrafts and interest bearing loans:
Invoice discounting facility 965 625 - -
Interest bearing loan - 109 -
109
965 734 -
109
Deferred consideration 73 300 73
300
1,038 1,034 73
409
Non-Current
In more than one year but no more than two:
Deferred consideration - 181 -
181
- 181 -
181
Total 1,038 1,215 73
590
The carrying amounts and fair value of the Group’s borrowings,
which are all denominated in sterling, are as follows:
Carrying amount Fair
value
2012 2011 2012
2011
[pounds sterling]000
[pounds sterling]000 [pounds sterling]000 [pounds sterling]000
Bank overdrafts and interest bearing 965 734 965
734 loans
Deferred consideration 73 481 73
481
Total 1,038 1,215 1,038
1,215
a. Invoice discounting facility
Norman Broadbent Executive Search Limited operates an invoice
discounting facility. Funds are available to be drawn down at an advance
rate of 75% against trade receivables of Norman Broadbent Executive
Search Limited that are aged less than 120 days, with the facility
capped at [pounds sterling]1,500,000. At 31 December 2012, the
outstanding balance on the facility of [pounds sterling]965,000 (2011:
[pounds sterling]625,000) was secured by trade receivables of [pounds
sterling]1,450,000 (2011: [pounds sterling]1,229,000) and a cross
corporate guarantee and
indemnity
deed
in law, written document that is signed and delivered by which one person conveys land or other realty (see property) to another. A deed may assure the extent of the conveying party’s ownership or, if the party is uncertain of the precise extent, he issues a
dated 20
July
see month.
2011. Interest is
charged on the drawn down funds at a rate of 2.75% above the bank base
rate (2011: 2.75%).
b. Deferred consideration
The balance outstanding at 31 December 2012 of [pounds
sterling]73,000 was settled in full on 7
February
see month.
2013. There are no
further liabilities, warranties or obligations outstanding in relation
to the deferred consideration.
18. FINANCIAL INSTRUMENTS
The principle financial instruments used by the Group, from which
financial instrument risk arises, are summarised below. All financial
assets and liabilities are measured at amortised cost which is not
considered to be materially different to fair value.
Amortised
Cost
Group 2012
2011
[pounds
sterling]000 [pounds sterling]000
Financial Assets
Trade and other receivables 2,267
1,829
Cash and cash equivalents 1,009 650
Financial Liabilities
Trade and other payables 1,075 980
Bank overdrafts and interest bearing loans 965 734
Deferred consideration 73 481
Corporation tax liability 72 -
Amortised
Cost
Company 2012
2011
[pounds
sterling]000 [pounds sterling]000
Financial Assets
Trade and other receivables 1,676
1,308
Cash and cash equivalents 592 366
Financial Liabilities
Trade and other payables 1,173 837
Bank overdrafts and interest bearing loans - 109
Deferred consideration 73 481
In common with all other businesses, the Group is exposed to risks
that arise from its use of financial instruments. Details on these risks
and the policies set out by the Board to reduce them can be found in
Note 2 of the Report and Accounts.
19. SHARE CAPITAL AND PREMIUM
Allotted and fully paid: 2012
2011
[pounds
sterling]000 [pounds sterling]000
Ordinary Shares:
13,048,686 Ordinary shares of 1.0p each (2011: 130 106
10,607,801)
Deferred Shares:
23,342,400 Deferred A shares of 4.0p each (2011: 934 934
23,342,400)
907,118,360 Deferred shares of 0.4p each (2011: 3,628
3,628 907,118,360)
1,043,566 Deferred B shares of 42.0p each (2011: 438 438
1,043,566)
2,504,610 Deferred shares of 29.0p each (2011: 727 727
2,504,610)
5,727
5,727
Total 5,857
5,833
Deferred A Shares of 4.0p each
The Deferred A Shares carry no right to dividends or distributions
or to receive notice of or attend general meetings of the company. In
the event of a winding up, the shares carry a right to repayment only
after the holders of Ordinary Shares have received a payment of [pounds
sterling]10 million per Ordinary Share. The company retains the right to
the shares without payment to the holders thereof. The rights
attaching to the shares shall not be varied by the creation or issue of
shares ranking parri
passu
with or in priority to the Deferred A
Shares.
Deferred Shares of 0.4p each
The Deferred Shares carry no right to dividends, distributions or to
receive notice of or attend general meetings of the company. In the
event of a winding up, the shares carry a right to repayment only after
payment of capital paid up on Ordinary Shares plus a payment of [pounds
sterling]10,000 per Ordinary Share. The company retains the right to
transfer or cancel the shares without payment to the holders
thereof.
Deferred B Shares of 42.0p each
The Deferred B Shares carry no right to dividends or distributions
or to receive notice of or attend general meetings of the company. In
the event of a winding up, the shares carry the right to repayment only
after the holders of Ordinary Shares have received a payment of [pounds
sterling]10 million per Ordinary Share. The company retains the right to
cancel the shares without payment to the holders thereof. The rights
attaching to the shares shall not be varied by the creation or issue of
shares ranking parri passu with or in priority to the Deferred B
Shares.
Deferred Shares of 29.0p each
The Deferred Shares carry no right to dividends or distributions or
to receive notice of or attend general meetings of the company. In the
event of a winding up, the shares carry the right to repayment only
after the holders of Ordinary Shares have received a payment of [pounds
sterling]10,000 per Ordinary Share. The company retains the right to
cancel the shares without payment to the holders thereof.
A reconciliation of the movement in share capital and share premium is
presented below:
No. of Ordinary Deferred Share
Total
ordinary shares shares premium
shares
[pounds sterling]000
(000s) [pounds sterling]000
[pounds sterling]000 [pounds sterling]000
At 1 January 2011 7,719 77 5,727 6,985
12,789
Proceeds from share placing 2,692 27 - 1,723
1,750 (note a)
Transaction costs related to - - - (54)
(54) share placing
Shares issued on conversion 118 1 - 53 54
of options/warrants
Shares issued to employees 79 1 - 51 52
At 31 December 2011 10,608 106 5,727 8,758
14,591
Proceeds from share placing 2,122 21 - 721
742 (note b)
Transaction costs related to - - - (15)
(15) share placing
Shares issued on acquisition 319 3 - 108
111 (note 23)
At 31 December 2012 13,049 130 5,727 9,572
15,429
a. Share placing in May 2011:
At the Annual General Meeting of the Company on 31 May 2011, a
special resolution was passed to
allot
tr.v. al·lot·ted, al·lot·ting, al·lots
1. To parcel out; distribute or apportion:
2.
2,692,308 new ordinary 1.0p
shares for a total cash consideration of [pounds sterling]1,750,000.
b) Share placing in November 2012:
On 13 November 2012, the Company issued 2,121,600 new ordinary 1.0p
shares for a total cash consideration of [pounds sterling]742,000.
Transaction costs of [pounds sterling]15,000 were incurred resulting in
net cash proceeds of [pounds sterling]727,000.
20. SHARE BASED PAYMENTS
20.1 Share Options
The Company has an approved
EMI
share option scheme for full time
employees and directors and had an
unapproved
adj.
Not approved or sanctioned:
share option scheme under
which options to subscribe for the Company’s shares were granted to
connected parties, which
expired
v. ex·pired, ex·pir·ing, ex·pires
v.intr.
1. To come to an end; terminate:
2.
in 2011. The exercise price of the
granted options is equal to the market price of the shares on the date
of the grant. The Company has no legal or constructive obligation to
repurchase
tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es
To buy (something) again.
n.
The act of buying something that one previously sold or owned.
Noun 1.
or settle the options or warrants in cash.
Options under the Company EMI scheme are conditional on the employee
completing three years’ service (the
vesting
period). The EMI
options vest in three equal
tranches
on the first, second and third
anniversary of the grant. The options have a contractual option term of
ten years.
Options under the unapproved scheme
lapsed
in March 2011.
Movements in the number of share options and their related weighted
average exercise prices are as follows:
Approved EMI share Unapproved
share
option scheme option
scheme
Avg. Number of Avg.
Number of
exercise options exercise
options
price per price per
share (p) share (p)
At 1 January 2011 68.70 387,211 168.90
26,625
Granted 65.50 955,393 - -
Forfeited 96.82 (141,499) 168.90
(26,625)
Exercised 52.50 (19,047) - -
At 31 December 2011 63.01 1,182,058 - -
Forfeited 63.05 (185,819) - -
At 31 December 2012 62.92 996,240 - -
Share options outstanding at the end of the year have the following
expiry date and exercise prices:
Expiry date Exercise Share
options
price per
share (p) 2012
2011
2020 52.50 198,094
226,665
2021 65.50 798,146
955,393
Total 996,240
1,182,058
Out of the 996,240 outstanding options (2011: 1,182,058), no options
were exercisable at the year end (2011: 75,555) as they were all
‘underwater’.
The weighted average fair value of the share options granted in
2011, determined using the
Trinomial
adj.
1. Consisting of three names or terms, as a taxonomic designation.
2. Mathematics Consisting of three terms.
n.
1.
Valuation Model, was 37.5
pence
n. Chiefly British
A plural of penny.
Noun
a plural of penny
USAGE: Since the decimalization of British currency and the introduction of the abbreviation p,
(options granted in 2010: 21.3 pence). The significant inputs into the
model were weighted average share price of 65.5 pence at the grant date
(2010: 52.5 pence), exercise price shown above, volatility of 75% (2010:
85%), dividend yield of 0% (2010: 0%), an expected option life of 10
years (2010: 10 years) and an annual
risk-free interest rate
of 3.38%
(2010: 3.65%). The expected volatility was estimated by reference to the
of the Company’s share price and those of UK
quoted companies in a similar business sector. The risk-free interest
rate is estimated as the yield on zero coupon UK government bonds of a
term consistent with the contractual life of the options granted.
20.2 Warrants
On 14 June 2010, the Company issued warrants over shares in the
Company to two directors and a connected party on the basis of one
warrant for one ordinary share. The warrants have an exercise price of
45 pence, can be exercised in full or in part immediately and
expire
/ex·pire/ ()
1. to exhale.
2. to die.
v.
1. To breathe one’s last breath; die.
2. To exhale.
on
31 May 2013.
Movements in the number of warrants and their related weighted average
exercise prices are as follows:
Warrants
Avg.
Number of
exercise
warrants
price per
share (p)
At 1 January 2011 49.35
292,776
Forfeited 90.00
(28,333)
Exercised 45.00
(97,777)
At 31 December 2011 45.00
166,666
Granted - -
Forfeited - -
Exercised - -
At 31 December 2012 45.00
166,666
Warrants outstanding at the end of the year have the following expiry
date and exercise prices:
Expiry date Exercise
Warrants
price per
share (p) 2012
2011
2013 45.00 166,666
166,666
Total 166,666
166,666
Out of the 166,666 outstanding warrants (2011: 166,666), 166,666
warrants were exercisable in the year (2011: 166,666).
See Note 65 for the total expense recognised in the income statement
for share options and warrants granted to directors and employees.
21. LEASES
Operating leases
The Group leases all its premises. The terms of the leases vary for
each property and are tenant repairing.
As at 31 December 2012, the total future value of minimum lease
payments are due as follows:
Land and
Buildings
2012
2011
[pounds
sterling]000 [pounds sterling]000
Within one year 156 440
Later than one year and not later than five years – 117
Total 156 557
On the 6 March 2013 the directors signed a new lease for the
Company’s principle office at 12 St James’s Square, London on
substantially improved financial terms. The new lease commences on 30
April 2013 for 10 years with the option to break after 5 years.
22. PENSION COSTS
The Group operated several defined contribution pension schemes for
the business. The assets of the schemes were held separately from those
of the Group in independently administered funds. The pension cost
represents contributions payable by the Group to the funds and amounts
to [pounds sterling]182,000 (2011: [pounds sterling]177,000). At the
year end [pounds sterling]18,000 of contributions were outstanding
(2011: [pounds sterling] 17,000).
23. BUSINESS COMBINATIONS
On the 1 November 2012, the Company obtained control of Acker
Deboeck and Company
SPRL
SPRL Société Privée à Responsabilité Limitée
SPRL Société de Personnes à Responsabilité Limitée
SPRL Signal Processing Research Laboratory
, an executive search and leadership consultancy
business headquartered in Brussels, by acquiring 51 per cent of the
shares and voting interests in the company. The acquisition of Acker
Deboeck, renamed Norman Broadbent SPRL in
January
see month.
2013, will extend the
European reach of the Norman Broadbent executive search brand whilst
significantly enhancing the leadership consulting and board evaluation
services of the Group.
In the two months to 31 December 2012, Acker Deboeck contributed
revenue of [pounds sterling] 114,000 and profit before tax of [pounds
sterling]34,000 to the Group’s results. If the acquisition had
occurred on 1 January 2012, management estimates that the subsidiary
would have contributed revenue of [pounds sterling]560,000 and pre-tax
profit for the year of [pounds sterling]140,000.
The following summarises the major classes of consideration transferred
and the recognised amounts of assets acquired and liabilities assumed at
the acquisition date.
Consideration transferred:
[pounds sterling]000
Cash 137
Equity instruments (319,285 ordinary 1.0p shares - note 111
19)
Total 248
a. Equity Instruments issued – the fair value of the ordinary shares
issued
was based on the listed share price of the Company at 1 November
2012 of 35
pence per share.
Identifiable assets acquired and liabilities assumed:
[pounds sterling]000
Property, plant and equipment 39
Trade and other receivables 74
Cash and cash equivalents 318
Trade and other payables
(29)
Corporation tax (135)
Total 267
The following fair values have been determined on a
provisional
basis:
a. Trade receivables comprise gross contractual amounts of [pounds
sterling]60,000 and [pounds sterling]14,000
of assignment related expenses due to be recharged to clients.
Whilst there
is no expectation or track record of bad debts in the company,
should any
of the outstanding invoices become uncollectable then an adjustment
to the
fair value of trade receivables would be necessary.
b. The corporation tax liability of [pounds sterling]135,000
represents a provision for the
expected tax liability of the company calculated by an independent
tax
firm. Once the formal year end tax
computation
has been prepared
any
material adjustments to the provision would need to be factored in
to the
acquisition calculation.
If new information obtained within one year from the acquisition
date about facts and circumstances that existed at the acquisition date
identifies adjustments to the above amounts, or any additional
provisions that existed at the acquisition date, then the acquisition
accounting will be revised.
Goodwill:
Goodwill was recognised as a result of the acquisition as
follows:
[pounds sterling]000
Total consideration transferred 248
Non-controlling interests, based on their proportionate 131
interest in the recognised amounts of assets and liabilities of Acker
Deboeck
Fair value of identifiable net assets
(267)
Total 112
The goodwill is attributable mainly to the skills and technical
talent of Acker Deboeck’s employees and the enhanced revenue
generating ability of the Group, particularly the leadership consulting
and board evaluation services, for which Acker Deboeck has a
demonstrable
adj.
1. Capable of being demonstrated or proved:
2. Obvious or apparent:
track record of delivering.
Acquisition-related costs:
The Company incurred acquisition related legal costs of [pounds
sterling]10,000. These costs have been included in ”
operating
expenses
” in the consolidated statement of comprehensive
income.
24. RELATED PARTY TRANSACTIONS
The following transactions were carried out with related
parties:
a. Purchase of services:
b.
2012 2011
[pounds sterling]000 [pounds sterling]000
Adelaide Capital Limited 141 166
Anderson Barrowcliff LLP 31 35
Brian Stephens & Company Ltd 5 -
Andrew Garner Associates Limited – 261
NBS Norman Broadbent SA 8 9 Total 185 471
During the year
Adelaide
or , c.
Capital Limited invoiced the Group for the
directors’ fees of P Casey ([pounds sterling]125,000), B
Stephens
, Alexander Hamilton 1812-1883.
American politician who was vice president of the Confederacy (1861-1865) under Jefferson Davis.
([pounds sterling]15,000) and business related travel costs of [pounds
sterling]1,000. From October 2012
Brian
Stephens & Company Ltd
invoiced the Group for the directors’ fees of B Stephens ([pounds
sterling]5,000). P Casey and B Stephens were directors of Adelaide
Capital Limited during the year. B Stephens is a director of Brian
Stephens & Company Ltd.
Taxation and company secretarial services of [pounds sterling]11,000
were acquired from
Anderson
river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic
Barrowcliff
LLP
, an accountancy firm of
which R Robinson is a partner. Anderson Barrowcliff also invoices the
Group for R Robinson’s director’s fees ([pounds
sterling]20,000).
During the year the company incurred
rechargeable
tr.v. re·charged, re·charg·ing, re·charg·es
To charge again, especially to reenergize a storage battery.
re
costs ([pounds
sterling]4,000) and fee splits relating to jointly executed overseas
searches ([pounds sterling]4,000) from
NBS
Norman Broadbent SA. The
Group owns a 20% stake in NBS Norman Broadbent SA.
All related party expenditure took place via “arms-length”
transactions.
b. Sale of services
c.
2012 2011
[pounds sterling]000 [pounds sterling]000
NBS Norman Broadbent SA 253 236
Total 253 236
During the year the company invoiced NBS Norman Broadbent SA for
royalty income ([pounds sterling]241,000), rechargeable costs ([pounds
sterling]4,000) and fee splits relating to jointly executed overseas
searches ([pounds sterling]8,000).
All related party transactions took place at
“arms-length”.
c. Key management compensation:
Key management includes executive and non-executive directors. The
compensation paid or payable to the directors can be found in the
Directors’ Remuneration Report on page 9.
d. Year-end payables arising from the purchases of services:
e.
2012 2011
[pounds sterling]000 [pounds sterling]000
Adelaide Capital Limited 21 19
Anderson Barrowcliff LLP 6 4
Brian Stephens & Company Ltd 4 –
NBS Norman Broadbent SA 5 - Total 36 23
Payables to related parties arise from purchase transactions and are
due one month after date of purchase. Payables bear no interest.
e. Year-end receivables arising from the sale of services:
f.
2012 2011
[pounds sterling]000 [pounds sterling]000
NBS Norman Broadbent SA 68 50
Total 68 50
Receivables owed by related parties arise from sales transactions
and are due one month after date of purchase. Payables bear no
interest.
f. Loans from related parties:
In order to assist the working capital position, certain directors
have historically advanced loans to the Group, which were non-interest
bearing and had no formal repayment terms.
2012
2011
[pounds
sterling]000 [pounds sterling]000
At 1 January - 7
Loans repaid during the year - (7)
At 31 December - -
26. CONTINGENT LIABILITY
The Company is a member of the Norman Broadbent plc Group
VAT
See value-added tax (VAT).
scheme. As such it is jointly accountable for the combined VAT liability
of the Group. The total VAT outstanding in the Group at the year-end was
[pounds sterling]162,000 (2011: [pounds sterling] 115,000).
Under Section 17 of the Landlord and Tenant (Covenants) Act 1995 the
Company has a
contingent liability
in respect of the lease on its
previous registered office, which was
assigned
tr.v. as·signed, as·sign·ing, as·signs
1. To set apart for a particular purpose; designate:
2.
to a third party in April
2010. The Company could be required to meet the financial obligations of
the lease should the
assignee
n. a person to whom property is transferred by sale or gift, particularly real property. (See: assign)
ASSIGNEE. One to whom an assignment has been made.
2.
default on lease payments. The maximum
potential liability would be [pounds sterling]120,000 per annum
expiring
v. ex·pired, ex·pir·ing, ex·pires
v.intr.
1. To come to an end; terminate:
2.
on 31 December 2015. The directors believe the likelihood of the
assignee defaulting prior to expiry is remote due to the financial
health and balance sheet position of the tenant, reviewed in their last
published financial statements in March 2013.
27. AVAILABILITY OF REPORT AND ACCOUNTS
Copies of the report and accounts will be posted to shareholders
shortly and will be available on request from the Company’s
registered office at 12 St James’s Square, London, SW1Y 4LB. Copies
are also available on the Company’s website:
www.normanbroadbent.com