1 May 2020
Bonhill Group plc
(“Bonhill”, the “Company” or the “Group”)
COVID-19 UPDATE AND PUBLICATION OF AUDITED RESULTS
Bonhill Group plc (AIM: BONH), a leading B2B media business specialising in three key areas: Business Information, Live Events and Data & Insight, today announces an update on COVID-19 and that it has published its audited accounts for the year ended 31 December 2019.
As previously announced, the biggest impact on the Group caused by COVID-19 has been on our global events business that has been heavily disrupted in the first and second quarters of this year. We have moved most of our events activity into the second half of this year should conditions allow these events to run. We have taken swift action to develop a webinar format and currently have 20 webinars planned for the coming months, either to supplement or replace existing events. The webinar held to date have been well received with positive feedback from clients and good attendance numbers. We have also moved our US print activity to a digital magazine which has allowed clients to continue to access their core audience and have offered some new digital packages. We have been pleased with the continuing level of support for our digital, research, content marketing and editorially-led products.
To mitigate for the overall expected reduction in revenues, we have taken action on the cost base with redundancies in all regions as well as placing around 10% of the UK workforce on furlough. In other areas, we have reduced working hours, enacted a hiring freeze and not filled open positions. These initiatives amount to savings of £2.5 million this year and other reductions in travel and entertainment, production costs and lease payment holidays have reduced costs this year by a further £1.3m. We have also utilised PAYE, VAT and tax deferrals to conserve cash and are continuing to explore other government lending initiatives. In conjunction with the completion of our recent £2.5 million equity fundraising, this puts us into a stronger financial position to see out the crisis. We continue to monitor the situation on a daily basis.
Further to the announcement of the Group’s unaudited preliminary results on 24 March, the 2019 annual report has now been finalised and can be downloaded from bonhillplc.com/investors/reports-and-presentations. Copies will be sent to shareholders in due course.
Fundraising since the year end
As referred to above, the Company’s conditional placing of new shares was approved at a General Meeting on 30 April 2020. As a result, the Company, in aggregate, has issued 50.0 million new shares at a placing price of 5p per share, generating net proceeds of £2.3 million. We saw a good level of support from new and existing shareholders and the funding provides us greater flexibility through the coming months.
The Directors regularly review detailed forecasts of sales, costs and cash flows, and regularly project forwards 12 months ahead or more. The assumptions underlying the budget are challenged, varied and tested to establish the likelihood of a range of possible outcomes, including reasonable cash flow sensitivities. The expected figures are carefully monitored against actual outcomes each month and variances are highlighted and discussed at Board level.
However, the uncertain impact of COVID-19 introduces more risks and uncertainty into this review. To this end, a highly sensitised model has been run which takes into account the post balance sheet fundraising referred to above and the following assumptions:
• While it is currently envisaged that many of the events rescheduled from H1 2020 to H2 2020 will proceed, the model assumes that all of these events will be cancelled, resulting in a loss of £5 million revenue and £3 million EBITDA;
• Despite current encouraging media sales, a 30% decline in media spend compared to last year from 1 April 2020 to 31 December 2020, and a 15% decline compared to 2019 thereafter has been modelled; and
• Further cost savings of £0.5 million from US print costs, £1.3 million of further overhead savings, £0.3 million of UK staff furlough costs.
Together this model achieves 2020 revenue of £20 million and break-even EBITDA before returning to 2019 levels in 2021.
This sensitised cash flow forecast demonstrates that the Group will be able to pay its debts as they fall due for the period to at least 30 June 2021. The Directors are, therefore, satisfied that the financial statements should be prepared on the going concern basis.
In the event that the COVID-19 impact is worse than modelled, then further measures would be required to relieve any short-term cash pressures which may arise. These could include Government-backed loans or subsidies from either the UK, the US, or both, increased staff furloughs, increased cost savings and tougher working capital management. Given the uncertainty that COVID-19 has created for the Group’s operations and the international markets in which the Group operates, these conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern.
Prior year adjustment
The treatment of potential deferred tax liability created as part of the InvestmentNews acquisition on 17 August 2018 in relation to the intangible assets of £2.4 million has been revisited, and it is considered that this liability was not required. Therefore, an adjustment has been made to the 2018 audited balance sheet and the 2019 balance sheet previously announced in the Company’s unaudited preliminary results, which changes both goodwill and deferred tax liability by £2.4 million. There is an immaterial change to the income statement for the year ended 31 December 2019 and net assets as at 31 December 2019 and 31 December 2018, which are set out below.
For further enquiries please contact:
Bonhill Group plc
+44 (0)20 7250 7035
Simon Stilwell, Chief Executive
David Brown, Group Finance Director
Shore Capital (Nominated Adviser and Joint Broker)
+44 (0)20 7408 4080
Tom Griffiths/David Coaten (Corporate Advisory)
Fiona Conroy (Corporate Broking)
Canaccord Genuity Limited (Joint Broker)
+44 (0)20 7523 8000
Houston (PR Adviser)
+44 (0)20 3701 7660
About Bonhill Group plc
Bonhill Group plc is a leading, AIM-quoted, B2B media company providing Business Insight, Events and Data & Analytics propositions to Financial Services, Diversity and Technology business communities in 25 countries. Bonhill operates fifteen information websites, publishes four regular print titles, hosts 120 events per annum, offers a portfolio of data & analytics propositions and provides a range of content marketing solutions.
The business creates content, sales and marketing opportunities, networking events and transactional opportunities for its audiences of entrepreneurs, business owners and managers, CTOs & technology leaders, asset & wealth managers, and professional women, in addition to its sponsors, advertising clients and customers. Flagship brands include: InvestmentNews, Portfolio Adviser, Fund Selector Asia, What Investment, SmallBusiness.co.uk, GrowthBusiness.co.uk, Information Age, Women in… events series, and DiversityQ.
For more information visit www.bonhillplc.com
Statement of comprehensive income
for the twelve month period ended 31 December 2019
12 month period ended
31 December 2019
9 month period ended
31 December 2018
Net operating expenses
Impairment related to expected credit losses
Amortisation and impairment
Net operating profit/(loss)
Loss before tax
Profit/(loss) for the period
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
Total comprehensive income/(loss) for the year
Basic loss per share attributable to the owners of the parent
Diluted loss per share attributable to the owners of the parent
Statement of financial position
at 31 December 2019
31 December 2019
31 December 2018
Other intangible assets
Property, plant and equipment
Deferred tax asset
Trade and other receivables
Cash and cash equivalents
Deferred tax liability
Financial lease liability
Trade and other payables
Financial lease liability
Current tax liability
Share option reserve
Foreign exchange reserve
TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT