· A resilient, profitable performance, with results ahead of management's expectations at the outset of the Covid-19 pandemic.
· Strong client retention and new business won across geographies and disciplines, with major new public sector and corporate clients.
· H1 net revenue of £103.4m, down 13%, with trends improving from Q2.
· Headline profit before tax of £2m before exceptional costs, down 59%.
· Early actions taken to significantly reduce costs. Total operating costs down 11% (£12.8m) vs. H1 2019.
· Financial position remains strong, with cash at 30 June 2020 of £22.4m (£16.6m at 31 Dec 2019) and £28m at 20 October 2020
· No interim dividend (2019: 2.45p).
Current trading and outlook
· Positive trends have continued into H2, although there remains considerable uncertainty due to the ongoing Covid-19 pandemic
· The Group's clients and revenue are heavily weighted towards resilient industry sectors, such as government, e-commerce and financial services
· Revenues expected to be marginally stronger in H2 than H1 with 2020 full year headline PBT, excluding exceptional items, expected to be at least £4m
· 2020 year end net cash expected to be at least £10m
· Full year operating costs expected to be approximately £30m lower than 2019 as a result of restructuring, the majority of which are expected to be ongoing cost savings
· The Group is in the process of exiting from companies that are expected to generate combined losses of £5m in 2020, with divestment or closure expected to be completed before the year end
· The Group has set out clearly in this announcement the potential liability from its put option obligations based on a range of future share price outcomes and our plan to manage this in the future
· On track to present the growth strategy and support structure at a capital markets day in January 2021
Update on 2019 audit process and temporary suspension of share trading
As announced on 1 October 2020, trading in the Company's shares is temporarily suspended until publication of the 2019 audited results. This process is nearing completion and is expected to be complete in early November. No headline adjustments or further restatements of the Group's unaudited results published on 29 September have been identified to date
David Kershaw, Chief Executive Officer, said:
"We have been hugely encouraged by the resilience of the business, both operationally and financially, in the face of the global Covid-19 pandemic. Our companies have shown great agility in adapting their businesses to these extremely challenging conditions, without compromising on the quality of their work or client service. This is demonstrated by our strong client retention and new business performance during the period. I would like to thank all of our people for their tremendous commitment and hard work.
"We are looking ahead with optimism. We are refocusing our business to ensure it is in the best possible shape to thrive. Additionally, we are now well advanced in our strategic review and it is clear that we have both the strength and the potential to take advantage of the considerable long-term opportunities we see ahead of us."