CHRISTIE GROUP PLC — Earnings Release 2012

Apr 8, 2013

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RNS Number : 7281B

Christie Group PLC

08 April 2013

8 April 2013

Christie Group plc

Preliminary results for the 12 months ended 31 December 2012

Christie Group plc ('Christie Group' or the 'Group'), the leading provider of Professional Business Services and Stock & Inventory Systems & Services to the leisure, retail and care markets, is pleased to announce its preliminary results for the 12 months ended 31 December 2012.

Key points:

-     Revenue increased by 5.4% to £56.1m (2011: £53.3m)

-     Operating profit before exceptional items of £1.4m (2011: £0.7m)

-     Profit before tax before exceptional items of £1.3m (2011: £0.6m)

-     Exceptional loss of £0.8m (2011: £0.4m) incurred by Dubai office which ceased trading on 31 January 2013

-     Final dividend proposed of 0.5p (2011: 0.5p per share)

-     Increases in funding sources for UK purchasers

-     New international operations opened in Ireland and Poland

-     Christie + Co awarded 'UK's most active agent' in the Leisure and Hotels category by the Estates Gazette for the third year in a row

-     Retail stocktaking operation signed its first franchise

-     The stocktaking division has enjoyed a good start with further new demand for our services

Commenting on the results, David Rugg, Chief Executive of Christie Group said:

"Group performance was solid in a UK economy struggling for growth, but from a strategic perspective 2012 was an eventful year. We are developing our business models and we entered 2013 as a more flexible, productive business."

Enquiries:

Christie Group plc
David Rugg	020 7227 0707
Chief Executive
Dan Prickett
Chief Financial Officer	020 7227 0700
Charles Stanley Securities
Nominated Adviser and Broker
Russell Cook / Carl Holmes	020 7149 6000

Notes to Editors:

Christie Group plc (CTG.L.), quoted on AIM, is a leading professional business services group with 39 offices serving the UK, Europe, Canada and the Middle East and Africa, catering to its specialist markets in the leisure, retail and care sectors.

Christie Group operates its two complementary business divisions: Professional Business Services (PBS) and Stock & Inventory Systems & Services (SISS). These divisions trade under the brand names: PBS - Christie + Co, Christie Finance, Christie Insurance and Pinders: SISS - Orridge, Venners and Vennersys.

Tracing its origins back to 1846, the Group has a long-established reputation for offering essential services to client companies in agency, valuation services, investment, consultancy, project management, multi-functional trading systems and online ticketing services, stock audit and inventory management. The diversity of these services is intended to provide a natural balance to the Group's core agency business.

For more information, please go to www.christiegroup.com

CHAIRMAN'S STATEMENT 

I am pleased to report that the Group revenue was of £56.1m for 2012, an increase of 5.4% on the prior year (2011: £53.3m).  Operating profits achieved before exceptional items amounted to £1.4m, a significant increase from the prior year (2011: £0.7m).  Operating profit after exceptional items amounted to £0.6m (2011: £0.3m). The disruption to normal trading patterns which I referred to at the time of my interim statement in September resulted in a particularly slow third quarter.

Operating losses of £0.8m (2011: £0.4m) were incurred by our Dubai operation, which we took the decision to close shortly before the year end and have classified as an exceptional item accordingly.

Professional Business Services

Professional Business Services revenues were £30.4m, some £3m higher than in 2011 (£27.4m). Operating profit before exceptional items amounted to £0.6m, a material improvement from the previous year's operating loss before exceptional items of £0.1m. 

During the year, our UK purchasers were funded by a total of 21 different sources.  This compares markedly with 2008 when the finance arrangements that we brokered principally came from just 4 sources of finance, giving some appreciation of the increasing availability of funds.

The Spring Uprising and problems in Libya and Syria were unforeseen at the time of our opening in Dubai.  These events had a profound impact on early prospects for us in the region and hence our decision to withdraw.  We will continue to service consultancy projects in the Middle East from our other international offices.

Elsewhere our international operations made excellent progress. During the year we commenced new operations in Ireland and in Poland.  Both these markets are showing an early appreciation of the services we offer.

I'm delighted to advise that our transactional and consulting practice, Christie + Co, has for the third year running been awarded the Estates Gazette accolade as the 'UK's most active agent' in the Leisure and Hotels category throughout the provincial mainland U.K.

Stock & Inventory Systems & Services

Given the headline collapses in the UK high street retail sector, holding revenue at £25.7m against the prior year of £25.9m was a credible achievement. Operating profit was increased to £0.8m (2011: £0.6m).  Our licensed stocktaking business continues to recruit and train new stocktakers. After stocktaking for the summer's Olympics, the scale of our capability is unquestioned. We have continued to win new clients including Charles Wells, Punch Taverns, River Island and Space NK.

Our retail stocktaking operation signed its first franchise which has proved a catalyst for us developing a stand-alone IT and support system.  This new capability provides a method of more rapid expansion for us which we are currently focusing on continental Europe.

Outlook

Whilst our expectation that the number of distressed sales would slow has proven accurate, we similarly anticipate that the continued demand for businesses will lead to the advent of willing vendor instructions.  Inevitably there is some dip in market volumes during this crossover period.

Our leisure agency and advisory business activity has been hit by the recent and unexpected liquidation by the Irish government of the Irish Bank Resolution Corporation ("IBRC") by whom we were engaged. These factors resulted in a quiet period for completed transactions in the first quarter within our PBS division.  We are seeing larger company and debt sales in the market which should benefit both our advisory and transactional asset businesses this year.

The stocktaking division has enjoyed a good start with further new demand for our services, particularly in mainland Europe.

Christie Group relies on the support of its clients and the continuing commitment and professionalism of its quality personnel.  It is thanks to them both that we continue to hold our strong market position. 

Your Board propose a maintained final dividend of 0.5p per share, in addition to the 0.5p interim dividend declared in my September statement. If approved the dividend will be paid on 5 July 2013 to those shareholders on the register on 7 June 2013.

Philip Gwyn

Chairman

CHIEF EXECUTIVE'S REVIEW

Group performance was solid in a UK economy struggling for growth, but from a strategic perspective 2012 was an eventful year. We are developing our business models and we entered 2013 as a more flexible, productive business.

A strong start to 2012 set the tone for the first part of the year. We ended the first half with Group profits ahead of expectations. However, as the summer unfolded three major national events captured the nation's attention.

The Diamond Jubilee, the Olympics and the Paralympics were billed as boosting economic activity. For many businesses, ours included, the reality, at least in the short term, turned out to be rather different.

The focus on these events caused some disruption to our third quarter performance. However, we swiftly regained momentum and the Group ended the year strongly with a good pipeline of future business.

During the summer we conducted a strategic review of all our companies. Looking in detail at our business models identified scope for reducing costs in both Pinders and Orridge.

We have worked hard to introduce more scalability into our business model and adapt our operations to changing conditions and both contraction or expansion in our markets.

A diversified organisation

Christie Group is a balanced, broadly based organisation. Our revenue splits evenly between our two divisions. 

The profitability of our Professional Business Services (PBS) is reliant on market conditions, whereas our Stock & Inventory Systems & Services (SISS) division generates relatively stable cashflows in any economic environment.

These two parts of the Group offer services that relate to the entire lifecycle of a business, from its initial acquisition and associated financial implications, through managing costs and day-to-day operations, all the way to an eventual sale.

We offer specialist, in-depth, business intelligence. We add value by understanding our chosen sectors - retail, care and leisure - in great detail.

Christie Group companies have always prospered by stressing specialist expertise. This won't change. But how we harness that expertise and how we deploy it to add value for each customer continue to evolve.

Pinders project managers completed the fit-out of our new Christie Group headquarters in London's Carmelite Street in 2012. This concentration of head office resources will de-duplicate our cost base in 2013.

New business models

Recessions are often periods of rapid market development, and they bring opportunities for businesses prepared to engage with their markets. Companies can gain a competitive advantage by developing and refining their business models.

We look critically at all parts of the Group and we are continually asking ourselves what more we can do to strengthen our business, improve our efficiency and enhance quality. 

Agility is a key priority. We focus on adding flexibility to our operations and improving the scalability of our business models, whilst all the while offering a consistency of service.

During 2012, we found numerous ways to adapt and strengthen our businesses.

Different strategies suit specific businesses. We restructured operations at Pinders and Orridge, created a new franchising model for Orridge in international markets, added a complementary business to Christie + Co and relocated Christie Insurance's support functions to bolster its competitiveness.

Restructuring operations

Both Pinders and Orridge rely increasingly on mobile technology. In an always-online environment employees can be more productive in the field and require less centralised support.

There was therefore scope for cost reduction at these two companies. We scaled down spending on administration while continuing to invest in profit-generating activities. They are now able to operate at lower fixed costs with no damage to their revenue earning potential. These measures will yield significant annual savings.

Franchising

Orridge is active in eighteen countries and offers a pan-European service. Its strength in Europe is a major plus for international retailers.

But building on this international footprint has always been complex. The stocktaking market is very diffuse. There are numerous local operators. Developing scale in new territories can be a painstaking and challenging process.

We identified franchising as a way to internationalise our stocktaking business more rapidly. Potentially, this can be a low-cost, low-risk alternative to opening new branches overseas.

Orridge prepared the ground by codifying its key practices and localising software, as required. In 2012, we established our first franchising operation by signing a 20-year agreement with a corporate franchisee in Germany.

Under the terms of the agreement the franchisee pays rental and royalties to trade under the Orridge brand and use its sophisticated proprietary software. As such, it gains the capacity and the credibility to service large-scale, international clients on our common platform. It is currently in talks with potential franchisees in other territories.

A bolt-on acquisition

When Christie Group originally acquired Orridge in 2002, the vendor retained its business sales division, Orridge Business Sales, which has a strong presence in the 'white coat' sector. In 2012, we took advantage of an opportunity to acquire this business.

The acquisition has quadrupled our share of transactional and valuation services in the pharmacy sector. We have combined our existing white coat agency with Orridge Business Sales to create a Medical division within Christie + Co. The new division is now the clear market leader in the UK pharmacy and medical care sector.

Relocating support services

Dedicated personal attention and industry expertise have won Christie Insurance a very loyal client base. It provides a highly specialist service in our chosen sectors. The brokerage has to tread a fine line. Its clients value its close understanding of their specific requirements, but in a largely commoditised market they also expect very competitive rates.

It therefore needs to keep a very close eye on costs. In 2012, we took the decision to relocate the service and administration elements of the business to South Wales. It will gain valuable economies by taking advantage of the lower cost base and skilled work force based there. Its new operations centre will allow the company to continue to deliver high-value service at a competitive price.

International operations

We continue to gradually extend our international network. We recognise that it can take time to establish new operations. We build our success on strong networks and in-depth local understanding.

2012 was an important year in the development of our international capabilities. Orridge's excursion into franchising augurs well for the internationalisation of the business.

Christie + Co is strengthening its position in existing territories. Two new international offices, in Dublin and Warsaw, are extending its Europe-wide reach.

Professional Business Services

Property prices have been on a downward trajectory more or less consistently since 2008, but in 2012 we saw signs that we had passed the point of inflexion, and that markets were moving back into equilibrium. As we emerge from a difficult winter we believe we are now at the start of a gradual recovery.

Several indicators give grounds for optimism. There are significantly fewer distressed sales and more consensual sales. Private buyers are returning to the market as they start to see value in well-priced opportunities. The lack of access to funding, which has constrained markets for so long, is less of an issue. Finally, the proportion of aborted transactions has fallen back to long-term levels.

Stock & Inventory Systems & Services

Our stocktaking businesses gained important new clients during the year. Both businesses have strong client retention rates, but incur high initial costs as new customers come on board.

Additional costs during this initial period are inevitable as we adapt to each customer and harmonise systems. Ultimately, increased volumes will translate into higher profitability. We are investing in systems and training to ensure we continue to offer high-quality services as these businesses grow.

Looking ahead

Today, Christie Group is more focused on its markets and we are more diversified in our service offering, thereby making us more resilient. We are making headway and are focused on our strategic goal of rebuilding profits towards the levels seen before the credit crunch.

Looking ahead, current indications point to an improving economic picture in 2013. Whatever the prospects for the economy, with our strong track record, extensive client list and more flexible business model, we approach the future with confidence.

David Rugg

Chief Executive

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2012

		Note	2012 Before exceptional items £'000	2012 Exceptional items £'000	2012 Total £'000	2011 Before exceptional items £'000	2011  Exceptional  items £'000	2011  Total £'000
Revenue			56,087	57	56,144	53,230	60	53,290
Employee benefit expenses			(38,511)	(584)	(39,095)	(37,466)	(310)	(37,776)
			17,576	(527)	17,049	15,764	(250)	15,514
Depreciation and amortisation			(548)	-	(548)	(434)	(3)	(437)
Impairment credit			14	5	19	92	-	92
Other operating expenses			(15,678)	(267)	(15,945)	(14,677)	(152)	(14,829)
Operating profit/(loss)			1,364	(789)	575	745	(405)	340
Finance costs		4	(97)	(19)	(116)	(104)	-	(104)
Finance income		4	1	-	1	1	-	1
Total finance costs		4	(96)	(19)	(115)	(103)	-	(103)
Profit/(loss) before tax			1,268	(808)	460	642	(405)	237
Taxation		5	(390)	-	(390)	(386)	-	(386)
Profit/(loss) for the year after tax			878	(808)	70	256	(405)	(149)
Other comprehensive income/(losses):
Exchange differences on translating foreign operations					3			(57)
Other comprehensive income/(losses) for the period, net of tax					3			(57)
Total comprehensive income/(losses) for the year					73			(206)
Profit/(loss) for the period after tax attributable to:
Equity shareholders of the parent					110			(114)
Non-Controlling interest					(40)			(35)
					70			(149)
Earnings per share attributable to equity holders - pence
-Basic					0.44			(0.46)
-Fully diluted					0.43			(0.46)

All the amounts derive from continuing activities, with the exception of those amounts disclosed as exceptional items.

Exceptional items in both periods relate to Christie + Co FZ LLC, which commenced operations in 2011 and ceased trading on 31 January 2013. All revenue and costs relating to Christie + Co FZ LLC are reported as exceptional by virtue of their nature, relating to an operation where the decision was taken to liquidate Christie + Co FZ LLC in December 2012.

Consolidated Statement of Changes in Shareholders' Equity

As at 31 December 2012

Attributable to the Equity Holders of the Company
	Share capital £'000	Fair value and other reserves £'000	Cumulative translation reserve £'000	Retained earnings £'000	Non - Controlling interest £'000	Total equity £'000
Balance at 1 January 2011	505	3,575	511	(2,135)	-	2,456
Loss for the year after tax	-	-	-	(114)	(35)	(149)
Exchange differences on translating foreign operations	-	-	(57)	-	-	(57)
Total comprehensive losses for the period	-	-	(57)	(114)	(35)	(206)
Movement in respect of employee share scheme	-	38	-		-	38
Employee share option scheme:
-value of services provided	-	72	-	-	-	72
Dividends paid	-		-	(244)	-	(244)
Balance at 31 December 2011	505	3,685	454	(2,493)	(35)	2,116
Balance at 1 January 2012	505	3,685	454	(2,493)	(35)	2,116
Profit/(loss) for the year after tax	-		-	110	(40)	70
Exchange differences on translating foreign operations	-	-	3	-	-	3
Total comprehensive income/(losses) for the period	-	-	3	110	(40)	73
Movement in respect of employee share scheme	-	935	-	(1,021)	-	(86)
Employee share option scheme:
-value of services provided	-	68	-	-	-	68
Dividends paid	-	-	-	(251)	-	(251)
Balance at 31 December 2012	505	4,688	457	(3,655)	(75)	1,920

Consolidated Statement of Financial Position

At 31 December 2012

		2012 £'000	2011 £'000
Assets
Non-current assets
Intangible assets - Goodwill		1,011	1,011
Intangible assets - Other		403	145
Property, plant and equipment		1,232	606
Deferred tax assets		2,472	3,039
Available-for-sale financial assets		300	300
Other receivables		316	904
		5,734	6,005
Current assets
Inventories		1	1
Trade and other receivables		10,670	11,225
Current tax assets		177	72
Cash and cash equivalents		1,314	1,059
		12,162	12,357
Total assets		17,896	18,362
Share capital		505	505
Fair value and other reserves		4,688	3,685
Cumulative translation reserve		457	454
Retained earnings		(3,655)	(2,493)
		1,995	2,151
Non-Controlling interest		(75)	(35)
Total equity		1,920	2,116
Liabilities
Non-current liabilities
Retirement benefit obligations		1,613	2,376
Provisions		734	554
		2,347	2,930
Current liabilities
Trade and other payables		8,047	8,265
Borrowings		3,440	3,091
Provisions		2,142	1,960
		13,629	13,316
Total liabilities		15,976	16,246
Total equity and liabilities		17,896	18,362

Consolidated Statement of Cash Flows

For the year ended 31 December 2012

	Note	2012 £'000	2011 £'000
Cash flow from operating activities
Cash generated from/(used in) operations	8	1,422	(1,907)
Interest paid		(116)	(104)
Tax received		72	-
Net cash generated from/(used in) operating activities		1,378	(2,011)
Cash flow from investing activities
Acquisition of subsidiary		(4)	-
Purchase of property, plant and equipment (PPE)		(1,072)	(420)
Proceeds from sale of PPE		13	-
Intangible asset expenditure - software		(146)	(7)
Interest received		1	1
Net cash used in investing activities		(1,208)	(426)
Cash flow from financing activities
Net proceeds from the purchase & sale of shares held by ESOP		-	38
(Repayments of)/proceeds from invoice finance		(435)	397
Dividends paid		(251)	(244)
Net cash (used in)/generated from financing activities		(686)	191
Net decrease in cash		(516)	(2,246)
Cash and cash equivalents at beginning of year		(1,009)	1,232
Exchange (losses)/gains on euro bank accounts		(13)	5
Cash and cash equivalents at end of year	9	(1,538)	(1,009)

Notes to the Consolidated Financial Statements

1. BASIS OF PREPARATION

While the financial information included in this preliminary announcement has been prepared in accordance

with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement

does not itself contain sufficient information to comply with IFRSs. The Company expects to

publish full financial statements that comply with IFRSs in April 2013.

The accounting policies adopted are consistent with those applied in the 2011 financial statements.

New and amended standards adopted by the group

None of the new standards, interpretations and amendments, effective for the first time from 1 January 2012, have had a material effect on the financial statements of the Group or the Company.

Standards, interpretations and amendments to published standards that are not yet effective

Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the Group or Company's accounting periods beginning after 1 January 2013 or later periods and have not been early adopted. It is anticipated that none of these new standards, interpretations and amendmentscurrently in issue at the time of preparing the financial statements (April 2013) will have a material effect on the consolidated financial statements of the Group, except the following set out below:

IAS 19, 'Employee benefits' was amended in June 2011 and becomes mandatory for the Group's 2013 consolidated financial statements. The impact on the group will be as follows: to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). The unrecognised actuarial losses which will be recognised on the removal of the corridor amount to £8,387,000 at 31 December 2012. In future periods, actuarial gains and losses will be recognised immediately in other comprehensive income or losses. The total impact on the consolidated statement of financial position as at 31 December 2012 is to reduce equity to total negative equity of £6,467,000.

Within the Company Statement of Financial Position, the unrecognised actuarial losses which will be recognised on the removal of the corridor amount to £722,000 at 31 December 2012. The total impact on the Company's results for the year ended 31 December 2012 is that the total equity would be £5,669,000.

IFRS 12, 'Disclosures of interests in other entities', becomes mandatory for the Group's 2014 consolidated financial statements. The impact on the group includes additional disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The group is yet to assess the full impact of the amendments.

2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

2.1 Critical accounting estimates and assumptions

(a) Estimated impairment of goodwill

Goodwill is subject to an impairment review both annually and when there are indications that the carrying value may not be recoverable.  The recoverable amounts of cash-generating units have been determined based on value-in-use calculations.  These calculations require the use of estimates.

Notes to the Consolidated Financial Statements (continued)

(b)  Retirement benefit obligations

The assumptions used to measure the expense and liabilities related to the Group's two defined benefit pension plans are reviewed annually by professionally qualified, independent actuaries, trustees and management as appropriate. Management base their assumptions on their understanding and interpretation of applicable scheme rules which prevail at the statement of financial position date.  The measurement of the expense for a period requires judgement with respect to the following matters, among others:

-      the probable long-term rate of increase in pensionable pay;

-      the discount rate;

-      the expected return on plan assets; and

-      the estimated life expectancy of participating members.

The assumptions used by the Group may differ materially from actual results, and these differences may result in a significant impact on the amount of pension expense recorded in future periods.  In accordance with IAS 19, the Group amortises actuarial gains and losses outside the 10% corridor, over the average future service lives of employees.  Under this method, major changes in assumptions, and variances between assumptions and actual results, may affect retained earnings over several future periods rather than one period, while more minor variances and assumption changes may be offset by other changes and have no direct effect on retained earnings. Following revisions to IAS 19, which are effective from 1 January 2013, the corridor method will be eliminated and all actuarial gains or losses  will be recognised immediately.

(c) Deferred taxation

Deferred tax assets are recognised to the extent that the Group believes it is probable that future taxable profit will be available against which temporary timing differences and losses from previous periods can be utilised. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

3. SEGMENT INFORMATION

The Group is organised into two main operating segments:  Professional Business Services and Stock & Inventory Systems & Services.

The segment results for the year ended 31 December 2012 are as follows:

	Professional Business Services £'000	Stock & Inventory Systems &  Services £'000	Other £'000	Group £'000
Total gross segment sales	30,547	25,701	2,340	58,588
Inter-segment sales	(104)	-	(2,340)	(2,444)
Revenue	30,443	25,701	-	56,144
Operating profit/(loss) before exceptional items	564	763	37	1,364
Exceptional items	(789)	-	-	(789)
Operating (loss)/profit after exceptional items	(225)	763	37	575
Net finance (costs)/credit	(143)	(15)	43	(115)
Profit before tax				460
Taxation				(390)
Profit for the year after tax				70

Notes to the Consolidated Financial Statements (continued)

The segment results for the year ended 31 December 2011 are as follows:

	Professional Business Services £'000	Stock & Inventory Systems &  Services £'000	Other £'000	Group £'000
Total gross segment sales	27,474	25,920	2,338	55,732
Inter-segment sales	(104)	-	(2,338)	(2,442)
Revenue	27,370	25,920	-	53,290
Operating (loss)/profit before exceptional items	(57)	647	155	745
Exceptional items	(405)	-	-	(405)
Operating (loss)/profit after exceptional items	(462)	647	155	340
Net finance (costs)/credit	(121)	(34)	52	(103)
Profit before tax				237
Taxation				(386)
Loss for the year after tax				(149)

Other segment items included in the statements of comprehensive income for the years ended 31 December 2012 and 2011 are as follows:

	Professional Business Services £'000	Stock & Inventory Systems &  Services £'000	Other £'000	Group £'000
31 December 2012
Depreciation and amortisation	265	280	3	548
Impairment of trade receivables	(3)	(16)	-	(19)
31 December 2011
Depreciation and amortisation	190	242	5	437
Impairment of trade receivables	(143)	51	-	(92)

The segment assets and liabilities at 31 December 2012 and capital expenditure for the year then ended are as follows:

	Professional Business Services £'000	Stock & Inventory Systems &  Services £'000	Other £'000	Group £'000
Assets	7,970	4,851	2,426	15,247
Deferred tax assets				2,472
Current tax assets				177
				17,896
Liabilities	7,480	4,013	1,043	12,536
Borrowings				3,440
				15,976
Capital expenditure	1,060	413	1	1,474

Notes to the Consolidated Financial Statements (continued)

The segment assets and liabilities at 31 December 2011 and capital expenditure for the year are as follows;

	Professional Business Services £'000	Stock & Inventory Systems &  Services £'000	Other £'000	Group £'000
Assets	6,832	5,519	2,900	15,251
Deferred tax assets				3,039
Current tax assets				72
				18,362
Liabilities	7,070	4,688	1,397	13,155
Borrowings				3,091
				16,246
Capital expenditure	147	277	3	427

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating cash.  They exclude taxation.

Segment liabilities comprise operating liabilities. They exclude items such as taxation and corporate borrowings.

Capital expenditure comprises additions to property, plant and equipment and intangible assets.

The Group manages its operating segments on a global basis.  The UK is the home country of the parent. The Group's revenue is mainly generated in Europe. 

Revenue is allocated below based on the entity's country of domicile.

	2012 £'000	2011 £'000
Revenue
Europe	55,393	52,400
Rest of the World	751	890
	56,144	53,290

Total segment assets are allocated based on where the assets are located.
	2012 £'000	2011 £'000
Total segment assets
Europe	15,115	14,998
Rest of the World	132	253
	15,247	15,251

Notes to the Consolidated Financial Statements (continued)

Capital expenditure is allocated based on where the assets are located.

	2012 £'000	2011 £'000
Capital expenditure
Europe	1,469	392
Rest of World	5	35
	1,474	427

	2012 £'000	2011 £'000
Analysis of revenue by category
Sale of goods	278	405
Revenue from services	55,866	52,885
	56,144	53,290

4. FINANCE COSTS

	2012 £'000	2011 £'000
Interest payable on bank loans and overdrafts	99	75
Other interest payable	17	29
Total finance costs	116	104
Bank interest receivable	(1)	(1)
Total finance credit	(1)	(1)
Net finance costs	115	103

5. TAXATION

	2012 £'000	2011 £'000
Current tax
UK Corporation tax at 24.5% (2011: 26.5%)	177	-
Total current tax credit	177	-
Deferred tax
Origination and reversal of timing differences	(356)	(146)
Impact of change in the UK corporation tax rate	(211)	(240)
Total deferred tax charge	(567)	(386)
Tax charge on profit/(loss) on ordinary activities	(390)	(386)

The tax on the Group's profit/(loss) before tax differs from the theoretical amount that would arise using the standard rate of corporation tax in the UK of 24.5% as follows:

Tax on profit on ordinary activities

	2012 £'000	2011 £'000
Profit on ordinary activities before tax	460	237
Profit on ordinary activities at standard rate of UK corporation tax of 24.5% (2011: 26.5%)	(113)	(63)
Effects of:
- income not subject to tax	42	5
- expenses not deductible for tax purposes	(108)	(205)
- tax losses for which no deferred tax asset has previously been recognised	-	117
Re-measurement of deferred tax asset due to changes in the UK corporation tax rate	(211)	(240)
Total tax charge	(390)	(386)

During the year, as a result of the change in the UK corporation tax rate, the opening deferred tax balances have been re-measured. Deferred tax assets recognised at 1 January 2012 which had been measured at 25% at 31 December 2011 have been re-measured using the enacted rate that will apply at 31 December 2012 (23%).

Notes to the Consolidated Financial Statements (continued)

6.DIVIDENDS

A dividend in respect of the year ended 31 December 2012 of 0.5p per share, amounting to a total dividend of £125,000, is to be proposed at the Annual General Meeting on 21 June 2013. These financial statements do not reflect this proposed dividend.

7. EARNINGS PER SHARE

Basic earnings per share 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 year, which excludes the shares held in the Employee Share Ownership Plan (ESOP) trust.

	31 December 2012 £'000	31 December 2011 £'000
Profit/(loss) from continuing operations attributable to equity holders of the Company	110	(114)
	31 December 2012 Thousands	31 December 2011 Thousands
Weighted average number of ordinary shares in issue	25,091 245	24,677 189
Adjustment for share options
Weighted average number of ordinary shares for diluted earnings per share	25,336	24,866

	31 December 2012 Pence	31 December 2011 Pence
Basic earnings per share
Continuing operations	0.44	(0.46)
Fully diluted earnings per share
Continuing operations	0.43	(0.46)

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.  The Company has only one category of dilutive potential ordinary shares:  share options. 

The calculation is performed for the share options 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 outstanding share 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.

Notes to the Consolidated Financial Statements (continued)

8. NOTES TO THE CASH FLOW STATEMENT

Cash generated from/(used in) operations

			Group
2012 £'000	2011 £'000
Profit/(loss) for the year after tax		70	(149)
Adjustments for:
-	Taxation	390	386
-	Finance costs	115	103
-	Depreciation	432	398
-	Amortisation of intangible assets	116	39
-	Profit on sale of property, plant and equipment	(11)	-
-	Foreign currency translation	(29)	(37)
-	Increase in provisions	362	280
-	Movement in share option charge	68	72
-	Movement in retirement benefit obligation	(763)	(846)
-	Decrease in non-current other receivables	588	-
Changes in working capital (excluding the effects of exchange differences on consolidation):
-	Decrease/(increase) in trade and other receivables	555	(1,691)
-	Decrease in trade and other payables	(471)	(462)
Cash generated from/(used in) operations		1,422	(1,907)

9. RECONCILIATION OF MOVEMENT IN NET FUNDS

		As at 1 January 2012 £'000	Cash flow £'000	As at 31 December 2012 £'000
Cash and cash equivalents		1,059	255	1,314
Bank overdrafts		(2,068)	(784)	(2,852)
		(1,009)	(529)	(1,538)
Invoice finance		(1,023)	435	(588)
Net funds/(debt)		(2,032)	(94)	(2,126)

Financial information

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2012 or 2011, but is derived from those accounts. Statutory accounts for 2011 have been delivered to the Registrar of Companies and those for 2012 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under either Section 498(2) or (3) of the Companies Act 2006.

Report and Accounts

Copies of the 2012 Annual Report and Accounts will be posted to shareholders in late April.  Further copies may be obtained by contacting the Company Secretary at the registered office.  Alternatively, the 2012 Annual Report and Accounts will be available to download from the investor relations section on the Company's website www.christiegroup.com 

Key dates

The Annual General Meeting of the Company is scheduled to take place at 10.30am on Friday 21 June 2013 at Whitefriars House, 6 Carmelite Street, London, EC4Y 0BS. 

Group Companies

Professional Business Services

Christie + Co

Christie + Co is the leading specialist firm providing business intelligence in the hospitality, leisure, retail and care sectors. With offices across the UK, it focuses on agency, valuation services, investment and consultancy activity in its key sectors. Internationally, it operates from offices in the UK, Austria, Finland, France, Germany and Spain.

www.christie.com

www.christiecorporate.com

Christie Finance

Christie Finance has over 30 years' experience in financing businesses in the hospitality, leisure, care and retail sectors. Its excellent relationships with the clearing banks, centralised lenders, finance houses and building societies make it the market leader in providing finance solutions for purchase or re-financing in its specialist sectors.

www.christiefinance.com

Christie Insurance

With over 30 years' experience arranging business insurance in the hospitality, leisure, care and retail sectors, Christie Insurance is a leading company in its markets. Its excellent contacts with the UK's leading insurers enable it to provide a premier service including tailored insurance schemes.

www.christieinsurance.com

Pinders

Pinders is the UK's leading specialist business appraisal, valuation and consultancy company, providing professional services to the licensed leisure, retail and care sectors, and also the commercial and corporate business sectors. Its Building Consultancy Division offers a full range of project management, building monitoring and building surveying services.

www.pinders.co.uk

www.pinderpack.com

Stock & Inventory Systems & Services

Orridge

Europe's longest established stocktaking business specialising in all fields of retail stocktaking including high street, warehousing and factory. It also has a specialised pharmacy division providing valuation and stocktaking services. A full range of stocktaking and inventory management solutions is provided for a wide range of clients in the UK and Europe.

www.orridge.co.uk

Venners

The leading supplier of stocktaking, inventory, consultancy services and related stock management systems to the hospitality sector. Consultancy services include control audits, 'live' event stocktaking and Health & Safety implementation and control. Bespoke software and systems enable real-time management reporting to customers using the best available technologies.

www.venners.com

Vennersys

Vennersys operates in the UK and North America and delivers turnkey EPoS and ticketing systems to visitor attractions such as historic houses and estates, museums, zoos, safari parks, aquaria and cinemas.

www.vennersys.com

This information is provided by RNS

The company news service from the London Stock Exchange

END

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