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Interim Results

27 Aug 2014 07:00

RNS Number : 0631Q

Chime Communications PLC

27 August 2014

27th August 2014

CHIME COMMUNICATIONS PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2014

Major global sporting events drive strong growth

Chime Communications plc, the international Communications and Sports Marketing group, today announces its unaudited interim results for the six months ended 30th June 2014.

OPERATIONAL HIGHLIGHTS

· Strong performance with operating income growth of 26% and operating profit1 growth of 50%

· Like for like growth in operating profit1 of 25%

· Expanded international operations particularly in Sport & Entertainment and Advertising & Marketing Services with overseas operating income increased by 85%

· Operating profit1 in Sport & Entertainment increased 116% following successful World Cup

· Continue to increase range of services offered particularly in Sport & Entertainment including strengthened presence in football related activities

· Focus in first half on organic growth with £0.4 million invested in seven start-ups

· Contracts for 2016 Olympics already being negotiated

· Interim dividend increased by 15% to 2.53p (2013: 2.20p)

· Net debt of £46.5 million compared to facility of £95 million

HEADLINE FINANCIAL HIGHLIGHTS1

	First Half 2014 £m	First Half 2013 £m	% Change	Like for Like2 % Change
Operating Income	97.6	77.4	+26	+8
Operating Profit	17.2	11.5	+50	+25
Profit Before Tax	16.2	11.3	+43	+19
Operating Profit Margin	17.6%	14.8%	+19
Diluted Earnings per Share	11.41p	9.16p	+25
Interim Dividend	2.53p	2.20p	+15

STATUTORY FINANCIAL HIGHLIGHTS

	First Half 2014 £m	First Half 2013 £m	% Change	Like for Like2 % Change
Operating Income	97.9	77.8	+26	+8
Operating Profit	10.7	1.0	+1,066	+236
Profit Before Tax	9.6	0.6	+1,524	+235
Operating Profit Margin	10.9%	1.2%	+827
Diluted Earnings per Share	5.24p	(3.31p)	+258

Christopher Satterthwaite, Chief Executive of Chime Communications, said:

"We have had a strong first half driven by our involvement in the Winter Olympics, the FIFA World Cup and the Commonwealth Games. Organic growth in operating profit1 of 25% demonstrates the strength of our brands, which is increasingly important with 24% of our profits1 being made overseas. In the last two years Chime has become an international communications and sports marketing group.

There remain significant opportunities for Chime to continue developing all areas of the business, growing market share and positioning the Group for future growth."

Note: 1. All numbers and comments are headline unless otherwise stated. The appendix to this announcement shows a reconciliation of these headline numbers to the statutory numbers. The headline numbers adjust for the following:

· Deemed remuneration charge (including the finance cost of deemed remuneration) add back in respect of earn-out payments including LLP capital based payments.

· Add back of charges to the income statement in respect of amortisation of intangible assets, impairment of goodwill and costs relating to acquisition and restructuring (restructuring costs are only added back in 2013 as there are no restructuring costs in the first half of 2014).

· Add back of results from businesses classed as discontinued that do not meet the definition of discontinued operations under the accounting standard.

2. Like for Like comparisons are calculated by taking current period actual results (which include acquisitions from the relevant date of completion) compared with prior period actual results, adjusted to include the results of acquisitions for the commensurate period in the prior period.

For further information please contact:

Christopher Satterthwaite, Chief Executive 020 7096 5888

Chime Communications

Mark Smith, Chief Operating Officer and Finance Director 020 7096 5888

Chime Communications

James Henderson / Victoria Geoghegan / Elizabeth Snow 020 3772 2562

Bell Pottinger

OVERVIEW

Performance in the first half of 2014 was significantly ahead of the same period last year with Sport & Entertainment doing particularly well following a successful World Cup, which will benefit both the first and second half.

The other areas of the business continue to perform well with a number of key client wins and improved operating income in three of the other four divisions.

The emphasis in the first half of 2014 has been on like for like growth (26% increase in operating profit1) and we have invested £0.4 million in new business start-ups which should benefit future organic growth. This investment has been included in operating expenses but if it had been excluded, performance in the first half of 2014 would have been even better.

FIRST HALF KEY PERFORMANCE INDICATORS

Income from Shared Clients

The Group acted for 1,340 clients in the first half of 2014 compared to 1,352 in the first half of 2013. 231 of these clients used more than one of our businesses (223 in the first half of 2013) which represented 66% of total operating income (first half 2013: 69%).

Average Fee per Client

Average fee per client for the first half of 2014 was £73,000, compared to £57,000 in the first half of 2013. 296 clients paid us over £50,000 in the first half of 2014 compared to 224 in the first half of 2013. Our largest client represented 9.2% of total income in the first half (first half 2013: 13.3%). Our top 30 clients represented 43% of total income in the first half of 2014 compared to 46% in the first half of 2013.

Operating Profit Margin

Operating profit margin1 for the first half of 2014 was 17.6% compared to 14.8% in the first half of 2013. Sport & Entertainment, Advertising & Marketing Services and Insight & Engagement all improved their margin in the first half of 2014.

Income from Overseas Offices

Income from overseas offices increased by 85% in the first half of 2014. As a percentage of total income it increased from 16.1% in the first half of 2013 to 23.5% in the first half of 2014. We expect this percentage to increase further in the second half of 2014 and beyond. 2014 includes the first full contribution from JMI.

Earnings per Share

Fully diluted earnings per share1 in the first half of 2014 increased by 25% to 11.41p (2013 first half: 9.16p). The fully diluted weighted average number of shares in issue increased from 83.4 million in the first half of 2013 to 98.9 million in the first half of 2014.

Working Capital

Working capital management continues to be a key area of focus but further pressure from clients on payment terms, a change in the nature of some client contracts, investment in major contracts such as the World Cup and the impact of 2013 bonuses paid in the first half of 2014 has resulted in an increased working capital requirement at 30th June 2014. This position is expected to improve by the end of the year.

HEADLINE DIVISIONAL PERFORMANCE

Sport & Entertainment

	First Half 2014 £m	First Half 2013 £m	% Change	Like for Like % Change

Operating Income	37.9	24.4	+56	+6
Operating Profit	9.7	4.5	+116	+56
Operating Profit Margin	25.6%	18.5%

Sport & Entertainment in 2014 has performed strongly in line with expectations. Chime delivered 29 separate projects at the World Cup, eight of which were directly for FIFA and 21 for sponsors, which positions the division well for the 2016 Rio Olympics, for which some contracts are already being negotiated.

The business is becoming more international through both the acquisition of JMI in the US in 2013 and the expansion of our existing offices. We now have 21 offices in 14 countries with campaigns delivered in 50 different geographic markets.

We continue to operate strongly in seven of the top 10 sports by value in the world and have further strengthened our position in football related activities which we expect will benefit the division particularly in 2016 at the UEFA European Championships.

New business wins include: AIA, Copa Coca-Cola, FIA Formula E, Invictus Games, LTA, Old Mutual, the Ryder Cup 2014, Williams Martini Racing and Verizon IndyCar Series.

Advertising & Marketing Services

	First Half 2014 £m	First Half 2013 £m	% Change	Like for Like % Change

Operating Income	35.9	29.8	+21	+15
Operating Profit	4.1	3.0	+39	+17
Operating Profit Margin	11.5%	10.0%

VCCP continues to expand internationally as the number of overseas campaigns continues to increase and their European network gains traction.

Teamspirit, our financial services business, has shown particularly strong growth in the first half of 2014.

There has been further growth in margin and this remains a key area of focus going forward. Two new businesses have been started.

New business wins include: BMW Motorrad Global, Dockers, Kia Motors, Teva and World First.

Public Relations

	First Half 2014 £m	First Half 2013 £m	% Change	Like for Like % Change

Operating Income	10.1	10.9	-7	-7
Operating Profit	1.0	1.6	-37	-37
Operating Profit Margin	10.0%	14.8%

The Public Relations division's operating income and operating profit in the first half of 2014 was better than the second half of 2013, with several new client wins. The first half of 2013 included two major projects which did not continue in the second half of 2013.

The corporate responsibility specialisation is growing in importance and the Triple G rating is being launched in September for the second year which should drive further improvement. The technology and property sectors are also performing well.

New business wins include: Bupa Foundations, Crest Nicholson, easyProperty, Jaguar Land Rover and National Express Trains.

Healthcare Communications

	First Half 2014 £m	First Half 2013£m	% Change	Like for Like % Change

Operating Income	9.5	8.3	+14	+14
Operating Profit	1.5	1.6	-12	-12
Operating Profit Margin	15.2%	19.7%

Healthcare continues its good progress despite a slower start to 2014. The first half of 2014 has included investment in one new business and two new London offices for existing businesses. The public relations and patient data business are both growing well with good margins.

New business wins include: Astra Zeneca, Eisai and Mundipharma.

Insight & Engagement

	First Half 2014 £m	First Half 2013£m	% Change	Like for Like % Change

Operating Income	4.2	4.0	+5	+5
Operating Profit	1.4	1.2	+22	+22
Operating Profit Margin	33.2%	28.6%

The first half of 2014 has seen good growth in all areas of the division and particularly in Watermelon, the digital research business. There has been further margin improvement owing to a continued focus on higher margin areas of the marketplace.

The business has an improving list of blue chip clients with longer term visibility.

New business wins include: Aviva, Fujitsu, npower, Passenger Focus and Thames Water.

BOARD CHANGES

We are delighted that Lord Coe joined the Board in May 2014 and this further improves our ability to expand in the fast growing sports marketing sector. Lord Coe remains Executive Chairman of the Sport & Entertainment division.

WPP POSITION

WPP informed us in November 2013 that they were exploring a sale of their stake. We have had no further notification.

CASH FLOW AND BANKING ARRANGEMENTS

Net debt at 30th June 2014 was £46.5 million compared to £19.7 million at 30th June 2013 and £40.6 million at 31st December 2013. The Group has a borrowing facility of £95 million with RBS and HSBC until September 2016. The ratio of net debt to EBITDA at 30th June 2014 was 1.5 times, well within the agreed banking covenants.

The Group continues to focus on cash generation and working capital management.

Cash earn-outs payable in the remainder of 2014 are £2.1 million. The estimated deferred considerations payable in 2015 total £11.5 million and are payable £6.9 million in cash and £4.6 million in shares.

TAXATION

The effective tax rate1 for the first half of 2014 was 25% compared to the 2013 full year rate of 26%. The UK rate of corporation tax continues to reduce but this is partly offset by higher tax regimes in some of the countries we are expanding into, notably the US and Brazil. Overall we are forecasting our effective tax rate to at least be maintained.

DIVIDENDS

The Board has declared an interim dividend of 2.53p per share which is a 15% increase (2013: 2.20p per share). The interim dividend will be payable on 10th October 2014 to shareholders on the register at 19th September 2014. The ex-dividend date is 17th September 2014.

CORPORATE RESPONSIBILITY

We continue to reduce our impact on the environment. In 2013 we reduced our carbon footprint per full time employee by 4.6% and have targeted a further reduction of at least 5% for 2014. We remain on target to achieve this. In July we were again awarded the Carbon Trust Standard for our continuing work on reducing our impacts. The Standard is assessed every two years. We have well developed initiatives for community projects and in support of young people.

We are listed on FTSE4Good which recognises standards of good governance and a number of responsibility criteria.

OUTLOOK

Our growth prospects for the remainder of 2014 and beyond remain good, with both the World Cup and the Commonwealth Games contributing in the second half of 2014. There are also a number of other 2014 sporting events in which Chime is involved including the Ryder Cup, the ICC World Twenty20 and the Invictus Games. In addition, our Advertising & Marketing Services, Healthcare and Insight & Engagement businesses are going into the second half of 2014 with strong momentum. Further growth opportunities have been identified in motorsport following the acquisition of JMI at the end of 2013.

There are several sporting events in 2015 such as the Rugby World Cup and the Ashes in the UK and the ICC Cricket World Cup in Australia, all of which Chime will be involved in. 2016 will see quadrennial global sporting events such as the Rio Olympics and the UEFA European Championships and the Sport & Entertainment division has already started contract discussions for both these events.

If sterling continues to be strong particularly against the US Dollar and the Brazilian Real in the second half of 2014 there may need to be some adjustment.

We are expecting to continue our strategy of organic and acquisitive growth and to make further earnings enhancing acquisitions, expand into new territories where there is significant opportunity and to open new businesses. The outlook for our business remains very positive.

Reconciliation of Condensed Income Statement to headline results for the 6 months ended

30 June 2014

The reconciliation below sets out the headline results of the group and the related adjustments to the Statutory Income Statement that the directors consider necessary in order to provide an indication of the underlying trading performance.

	Headline			Adjustments			Statutory Income Statement
	6 months ended 30 June 2014	6 months ended 30 June 2013	12 months ended 31 December 2013	6 months ended 30 June 2014	6 months ended 30 June 2013	12 months ended 31 December 2013	6 months ended 30 June 2014	6 months ended 30 June 2013	12 months ended 31 December 2013
	(unaudited)	(unaudited)	(audited)	(unaudited)	(unaudited)	(audited)	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Continuing Operations
Revenue	198,176	139,727	298,485	338	510	701	198,514	140,237	299,186
Cost of sales	(100,589)	(62,376)	(128,971)	-	(52)	(86)	(100,589)	(62,428)	(129,057)
Operating income	97,587	77,351	169,514	338	458	615	97,925	77,809	170,129
Operating expenses	(80,390)	(65,893)	(143,674)	(6,830)	(10,998)	(26,436)	(87,220)	(76,891)	(170,110)

Deemed remuneration				3,450	4,627	7,800
Loss on business being discontinued				222	118	253
Amortisation of acquired intangibles and goodwill impairment				2,395	4,587	5,281
Costs of acquisitions and restructuring				425	1,208	12,487

Operating profit	17,197	11,458	25,840	(6,492)	(10,540)	(25,821)	10,705	918	19
Other gains and losses	-	-	-	-	-	(3,225)	-	-	(3,225)
Share of results of associates	683	541	1,053	(30)	-	(361)	653	541	692
Investment income	36	7	66	-	-	-	36	7	66
Finance costs	(1,526)	(507)	(1,637)	-	-	-	(1,526)	(507)	(1,637)
Finance cost of deferred consideration	(186)	(175)	(309)	-	-	-	(186)	(175)	(309)
Finance cost of deemed remuneration	-	-	-	(117)	(195)	(345)	(117)	(195)	(345)
Profit/(loss) before tax	16,204	11,324	25,013	(6,639)	(10,735)	(29,752)	9,565	589	(4,739)
Tax	(4,051)	(2,913)	(6,501)	541	358	2,072	(3,510)	(2,555)	(4,429)
Profit /(loss) for the period from continuing operations	12,153	8,411	18,512	(6,098)	(10,377)	(27,680)	6,055	(1,966)	(9,168)
Discontinued operations
Profit from discontinued operations	(174)	(118)	(3,428)	174	118	3,428	-	-	-
Profit/(loss) for the period	11,979	8,293	15,084	(5,924)	(10,259)	(24,252)	6,055	(1,966)	(9,168)

Attributable to:
Equity holders of the parent	11,109	7,530	13,421	(5,924)	(10,259)	(24,252)	5,185	(2,729)	(10,831)
Minority interest	870	763	1,663	-	-	-	870	763	1,663
	11,979	8,293	15,084	(5,924)	(10,259)	(24,252)	6,055	(1,966)	(9,168)

Earnings per share
From continuing operations
Basic	11.56p	9.24p	19.65p				5.31p	(3.31p)	(12.63p)
Diluted	11.41p	9.16p	19.47p				5.24p	(3.31p)	(12.63p)

The headline numbers have been adjusted for the following:

· Deemed remuneration charge (including the finance cost of deemed remuneration) add back in respect of earn-out payments including LLP capital based payments.

· Add back of results from businesses classed as discontinued that do not meet the definition of discontinued operations under the accounting standard. These include Ex Nihilo in the current period (6 months ended 30 June 2013: MMK-Good Relations Group GmbH; year ended 31 December 2013: MMK-Good Relations Group GmbH and Conduit Marketing Limited).

Reconciliation of Business Segments to headline results for the 6 months ended 30 June 2014

							Statutory Segmental Note
	Headline Operating Income			Adjustments			Operating Income
	6 months ended 30 June 2014	6 months ended 30 June 2013	12 months ended 31 December 2013	6 months ended 30 June 2014	6 months ended 30 June 2013	12 months ended 31 December 2013	6 months ended 30 June 2014	6 months ended 30 June 2013	12 months ended 31 December 2013
	(unaudited)	(unaudited)	(audited)	(unaudited)	(unaudited)	(audited)	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Sports & Entertainment	37,909	24,370	55,576	-	-	-	37,909	24,370	55,576
Advertising and Marketing Services	35,905	29,780	65,601	338	206	206	36,243	29,986	65,807
Public Relations	10,097	10,883	20,819	-	252	409	10,097	11,135	21,228
Healthcare	9,451	8,283	18,451	-	-	-	9,451	8,283	18,451
Insight & Engagement	4,225	4,035	9,067	-	-	-	4,225	4,035	9,067
	97,587	77,351	169,514	338	458	615	97,925	77,809	170,129

	Headline Operating Profit			Adjustments			Operating Profit
Sports & Entertainment	9,720	4,504	10,036	(4,000)	(5,954)	(19,537)	5,720	(1,450)	(9,501)
Advertising and Marketing Services	4,130	2,964	8,019	(2,083)	(600)	(3,782)	2,047	2,364	4,237
Public Relations	1,013	1,615	2,087	-	(3,184)	(728)	1,013	(1,569)	1,359
Healthcare	1,436	1,631	3,866	(278)	(645)	(1,267)	1,158	986	2,599
Insight & Engagement	1,403	1,153	2,826	-	-	(159)	1,403	1,153	2,667
	17,702	11,867	26,834	(6,361)	(10,383)	(25,473)	11,341	1,484	1,361
Unallocated corporate expenses	(505)	(409)	(994)	(131)	(157)	(348)	(636)	(566)	(1,342)
Operating profit	17,197	11,458	25,840	(6,492)	(10,540)	(25,821)	10,705	918	19

Other gains and losses	-	-	-	-	-	(3,225)	-	-	(3,225)
Share of results of associates	683	541	1,053	(30)	-	(361)	653	541	692
Investment income	36	7	66	-	-	-	36	7	66
Finance costs	(1,526)	(507)	(1,637)	-	-	-	(1,526)	(507)	(1,637)
Finance cost of deferred consideration	(186)	(175)	(309)	-	-	-	(186)	(175)	(309)
Finance cost of deemed remuneration	-	-	-	(117)	(195)	(345)	(117)	(195)	(345)
Profit/(loss) before tax	16,204	11,324	25,013	(6,639)	(10,735)	(29,752)	9,565	589	(4,739)

	Headline Operating Profit Margin						Operating Profit Margin
	6 months ended 30 June 2014	6 months ended 30 June 2013	12 months ended 31 December 2013				6 months ended 30 June 2014	6 months ended 30 June 2013	12 months ended 31 December 2013
	(unaudited)	(unaudited)	(audited)				(unaudited)	(unaudited)	(audited)
	%	%	%				%	%	%
Sports & Entertainment	25.6%	18.5%	18.1%				15.1%	(6.5%)	(17.1%)
Advertising and Marketing Services	11.5%	10.0%	12.2%				5.6%	8.3%	6.4%
Public Relations	10.0%	14.8%	10.0%				10.0%	(14.1%)	6.4%
Healthcare	15.2%	19.7%	21.0%				12.3%	11.9%	14.1%
Insight & Engagement	33.2%	28.6%	31.2%				33.2%	28.6%	29.4%
	18.1%	15.3%	15.8%				11.6%	1.9%	0.8%
Unallocated corporate expenses	-	-	-				-	-	-
Operating profit	17.6%	14.8%	15.2%				10.9%	1.2%	0.0%

The headline numbers have been adjusted for the following:

· Deemed remuneration charge (including the finance cost of deemed remuneration) add back in respect of earn-out payments including LLP capital based payments.

Key risks and uncertainties

In addition to the general economic and competitive risks affecting businesses operating in the Group's markets, the following are considered to be the principal internal and external risks impacting the Group:

· Internal Risks:

o Reputation and sustainability

o Legal and regulatory - Regulatory and statutory changes

o Legal and regulatory - Bribery and corruption

o Financial risks

o Currency exchange rate fluctuations

o Client dependency

o Retention of key personnel

o Mergers and acquisitions

o Authority to commit

o Contractual terms

o Management of overseas operations

· External risks:

o Economic and political environment

o Business environment

o Increased industry competition

These risks and their mitigations are described in full on pages 15 to 20 of the 2013 Annual Report and Accounts. The Group performs a comprehensive annual risk assessment exercise involving all senior management teams around the Group to identify report and evaluate operational risks facing the business and ensure appropriate actions are undertaken to manage these risks.

The Directors have considered whether these risks have changed since the 2013 Annual Report and Accounts were published, but do not consider that the level of risk that the Group is exposed to has increased in the first half of 2014 and anticipate that these will continue to be the key risks and uncertainties during the second half of 2014.

Going Concern

The directors have assessed the future funding requirements of the Group and are of the opinion that the Group has adequate resources to fund its operations for the foreseeable future. Therefore they believe that it is appropriate to prepare the accounts on a going concern basis. For further details please see Note 2 to the Condensed Consolidated Financial Statements.

Southside, 6th Floor

105 Victoria Street

Victoria

London

SW1E 6QT

By order of the board

Mark Smith

Chief Operating Officer and Finance Director

27 August 2014

Condensed Consolidated Income Statement

6 months ended 30 June 2014

	Note	6 months ended 30 June 2014	6 months ended 30 June 2013	12 monthsended 31 December2013
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Continuing Operations
Revenue		198,514	140,237	299,186
Cost of sales		(100,589)	(62,428)	(129,057)

Operating income		97,925	77,809	170,129

Operating expenses	4	(87,220)	(76,891)	(170,110)

Operating profit		10,705	918	19

Other gains and losses		-	-	(3,225)
Share of results of associates		653	541	692
Investment income		36	7	66
Finance costs		(1,526)	(507)	(1,637)
Finance cost of deferred consideration		(186)	(175)	(309)
Finance cost of deemed remuneration		(117)	(195)	(345)

Profit/(loss) before tax		9,565	589	(4,739)

Tax	5	(3,510)	(2,555)	(4,429)

Profit/(loss) for the period		6,055	(1,966)	(9,168)

Attributable to:
Equity holders of the parent		5,185	(2,729)	(10,831)
Non-controlling interest		870	763	1,663
		6,055	(1,966)	(9,168)

Earnings per share

From continuing operations
Basic	6	5.31p	(3.31p)	(12.63p)
Diluted	6	5.24p	(3.31p)	(12.63p)

Condensed Consolidated Statement of Comprehensive Income

6 months ended 30 June 2014

	6 months ended 30 June 2014	6 months ended 30 June 2013	12 monthsended 31 December2013
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000

Profit/(loss) for the period	6,055	(1,966)	(9,168)
Items that may be reclassified subsequently to profit or loss:
Profit on revaluation of available for sale investments	152	76	160
Exchange differences on translation of foreign operations	(100)	467	(298)
Total comprehensive income/(loss) for the period	6,107	(1,423)	(9,306)

Attributable to
Equity holders of the parent	5,237	(2,186)	(11,003)
Non-controlling interest	870	763	1,697
	6,107	(1,423)	(9,306)

Condensed Consolidated Balance Sheet as at 30 June 2014

	Note	As at 30 June 2014	As at 30 June 2013	As at 31 December2013
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Non-current assets
Goodwill	9	217,428	189,998	227,810
Other intangible assets		18,432	3,685	7,038
Property, plant and equipment		10,450	7,767	9,837
Investments in associates		6,743	6,242	6,089
Other investments		665	430	514
Deferred consideration receivable		270	282	282
Other financial assets		-	-	100
Deferred tax asset		760	2,193	3,510
		254,748	210,597	255,180

Current assets
Work in progress		6,568	8,852	8,196
Trade and other receivables		93,089	72,059	80,259
Current tax receivable		-	65	-
Cash and cash equivalents		30,905	16,275	18,267
		130,562	97,251	106,722

Total assets		385,310	307,848	361,902
Current liabilities
Trade and other payables		(92,512)	(94,527)	(91,019)
Current tax liabilities		(4,100)	(4,086)	(2,180)
Obligations under finance leases		-	(63)	(20)
Bank loans and overdrafts		(157)	(415)	(171)
Deferred consideration		(4,922)	(4,626)	(5,725)
Deemed remuneration		(4,671)	(1,425)	(1,671)
Provisions		(3,780)	(1,334)	(1,420)
		(110,142)	(106,476)	(102,206)

Net current assets/(liabilities)		20,420	(9,225)	4,516
Non-current liabilities
Bank loans payable after more than one year		(77,033)	(30,672)	(57,852)
Deferred consideration		(9,832)	(9,541)	(11,608)
Deemed remuneration		(3,332)	(1,822)	(4,880)
Deferred tax liabilities		-	-	(657)
Provisions		(2,290)	(1,185)	(652)
Obligations under finance leases		-	(2)	-
		(92,487)	(43,222)	(75,649)

Total liabilities		(202,629)	(149,698)	(177,855)
Net assets		182,681	158,150	184,047

Equity
Share capital	10	24,725	21,421	24,529
Share premium account		125,372	90,210	122,939
Own shares		(2,087)	(1,748)	(1,718)
Capital reduction reserve		-	32,385	-
Translation reserve		(256)	643	(156)
Accumulated profit		37,084	13,621	36,319
Written put options over non-controlling interests		(4,584)	-	-
Equity attributable to equity holders of the Parent		180,254	156,532	181,913
Non-controlling interests		2,427	1,618	2,134
Total equity		182,681	158,150	184,047

Condensed Consolidated Statement of Changes in Equity

6 months ended 30 June 2014

	Share capital	Share premium	Own shares	Capital reduction reserve	Translation reserves	Accumulated profit/(loss)	Written put options over non-controlling interests	Total	Non-controlling interests	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2013	20,522	81,943	(2,554)	32,385	176	22,772	-	155,244	1,352	156,596

Total comprehensive income for the period	-	-	-	-	467	(2,653)	-	(2,186)	763	(1,423)
Transactions with owners:
Acquisition of subsidiaries	886	8,225	-	-	-	-	-	9,111	126	9,237
Issued to staff under options	13	58	-	-	-	-	-	71	-	71
Share issue costs	-	(16)	-	-	-	-	-	(16)	-	(16)
Disposed of on exercise of options	-	-	(194)	-	-	-	-	(194)	-	(194)
Purchase of own shares	-	-	1,000	-	-	(1,000)	-	-	-	-
Purchase of non-controlling interest	-	-	-	-	-	-	-	-	(102)	(102)
Equity dividends	-	-	-	-	-	(4,381)	-	(4,381)	(589)	(4,970)
Credit in relation to share-based payments	-	-	-	-	-	(503)	-	(503)	-	(503)
Recycle purchase of non-controlling interest on disposal	-	-	-	-	-	(614)	-	(614)	-	(614)
LLP Partnership share	-	-	-	-	-	-	-	-	23	23
Exchange differences on translation of foreign operations	-	-	-	-	-	-	-	-	45	45
Balance at 30 June 2013 (unaudited)	21,421	90,210	(1,748)	32,385	643	13,621	-	156,532	1,618	158,150

Total comprehensive income for the period	-	-	-	-	(799)	(8,018)	-	(8,817)	889	(7,928)
Transactions with owners:
Acquisition of subsidiaries	938	10,812	-	-	-	-	-	11,750	(63)	11,687
Share placing	2,133	23,467	-	-	-	-	-	25,600	-	25,600
Issued to staff under options	37	169	-	-	-	-	-	206	-	206
Share issue costs	-	(1,719)	-	-	-	-	-	(1,719)	-	(1,719)
Disposed of on exercise of options	-	-	30	-	-	-	-	30	-	30
Purchase of non- controlling interest	-	-	-	-	-	-	-	-	102	102
Equity dividends	-	-	-	-	-	(1,908)	-	(1,908)	(409)	(2,317)
Credit in relation to share-based payments	-	-	-	-	-	375	-	375	-	375
Tax on share based payment exercises	-	-	-	-	-	388	-	388	-	388
Release of capital reduction reserve	-	-	-	(32,385)	-	32,385	-	-	-	-
Recycle purchase of non-controlling interest on disposal	-	-	-	-	-	(524)	-	(524)	(7)	(531)
LLP Partnership share	-	-	-	-	-	-	-	-	4	4
Balance at 31 December 2013 (audited)	24,529	122,939	(1,718)	-	(156)	36,319	-	181,913	2,134	184,047

Condensed Consolidated Statement of Changes in Equity (continued)

6 months ended 30 June 2014

	Share capital	Share premium	Own shares	Capital reduction reserve	Translation reserves	Accumulated profit/(loss)	Written put options over non-controlling interests	Total	Non-controlling interest	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000

Balance at 1 January 2014	24,529	122,939	(1,718)	-	(156)	36,319	-	181,913	2,134	184,047

Total comprehensive income for the period	-	-	-	-	(100)	5,337	-	5,237	870	6,107
Transactions with owners:
Acquisition of subsidiaries	183	2,378	-	-	-	-	-	2,561	-	2,561
Issued to staff under options	13	75	-	-	-	-	-	88	-	88
Share issue costs	-	(20)	-	-	-	-	-	(20)	-	(20)
Disposed of on exercise of options	-	-	285	-	-	(285)	-	-	-	-
Purchase of own shares	-	-	(654)	-	-		-	(654)	-	(654)
Purchase of non- controlling interest	-	-	-	-	-	-	-	-	23	23
Equity dividends	-	-	-	-	-	(5,065)	-	(5,065)	-	(5,065)
Credit in relation to share-based payments	-	-	-	-	-	592	-	592	-	592
Tax on share based payment exercises	-	-	-	-	-	209	-	209	-	209
Dividends to non-controlling interests	-	-	-	-	-	-	-	-	(617)	(617)
Recycle purchase of non-controlling interest on acquisition	-	-	-	-	-	(23)	-	(23)	-	(23)
LLP Partnership share	-	-	-	-	-	-	-	-	44	44
Written put options over non-controlling interests	-	-	-	-	-	-	(4,584)	(4,584)	-	(4,584)
Exchange differences on translation of foreign operations	-	-	-	-	-	-	-	-	(27)	(27)
Balance at 30 June 2014 (unaudited)	24,725	125,372	(2,087)	-	(256)	37,084	(4,584)	180,254	2,427	182,681

Condensed Consolidated Cash Flow Statement

6 months to 30 June 2014

	Note	6 months ended 30 June 2014	6 months ended 30 June 2013	12 monthsended 31 December2013
		(unaudited)	(unaudited)	(audited)
		£'000	£'000	£'000
Net cash from/(used in) operating activities	11	6,535	(70)	3,146

Investing activities
Interest received		28	7	56
Dividends received from investments and associates		7	11	320
Proceeds on disposal of property, plant and equipment		4	8	19
Purchases of property, plant and equipment		(2,789)	(2,293)	(5,746)
Purchases of other intangible assets		(243)	(46)	(379)
Acquisition of subsidiaries (net of cash acquired)	12	(3,127)	(11,931)	(58,156)
Disposal of subsidiaries/associate		-	-	(134)
Deferred consideration received		13	1,025	1,025

Net cash used in investing activities		(6,107)	(13,219)	(62,995)

Financing activities
Dividend paid		(5,065)	(4,380)	(6,289)
Dividends paid to minorities		(617)	(589)	(998)
Increase in borrowings		77,190	31,107	57,977
Repayment of borrowings		(58,023)	(13,569)	(13,565)
Repayment of obligations under finance leases		(21)	(65)	(117)
Proceeds on issue of ordinary share capital		68	55	24,142
Purchase of own shares		(1,654)	(194)	(164)
Investment by non-controlling shareholder		-	22	-
Purchase of non-controlling interests		-	(415)	(894)

Net cash from financing activities		11,878	11,972	60,092

Net increase/(decrease) in cash and cash equivalents		12,306	(1,317)	243

Cash and cash equivalents at beginning of period		18,267	17,892	17,892
Effect of foreign exchange rate changes		332	(300)	132
Cash and cash equivalents at end of period		30,905	16,275	18,267

Cash and cash equivalents comprise cash at bank, loan note deposits less overdrafts.

Taking into account the following borrowings, overall net borrowings were:

Cash and cash equivalents	30,905	16,275	18,267
Bank loans	(77,190)	(31,087)	(58,023)
Finance leases	-	(65)	(20)
Loan notes outstanding	(215)	(4,824)	(809)
Overall net borrowings	(46,500)	(19,701)	(40,585)

Notes to the Condensed Consolidated Financial Statements:

1. General information

The information for the year ended 31 December 2013 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2. Basis of preparation

The interim report for the six months ended 30 June 2014 is unaudited but has been reviewed by the auditor, Deloitte LLP, and their report to Chime Communications plc is set out on page 29.

The annual financial statements of Chime Communications Plc are prepared in accordance with IFRS as adopted by the European Union. Except as described below, the accounting policies adopted in the preparation of the half-yearly condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2013.

· As required by IAS34 taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

The interim report for the six months ended 30 June 2014 has been prepared in accordance with IAS 34 'Interim financial reporting' as adopted by the European Union. The consolidated interim report should be read in conjunction with the annual financial statements for the year ended 31 December 2013, which has been prepared in accordance with IFRS as adopted by the European Union.

Going Concern Basis

In preparing forecasts the Directors have taken into account the following key factors:

· The rate of growth of the UK and global economy on the Group's business during the economic recovery;

· Key client account renewals;

· Planned acquisitions and disposals;

· Anticipated payments under deemed remuneration and deferred and contingent consideration;

· The level of committed and variable costs;

· Current new business targets compared to levels achieved in previous year; and

· Compliance to the covenants as set by the Finance Institutions.

The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current facility and banking covenants.

The Group increased the existing borrowing facility to £95.0 million (from £73.0 million) in October 2013. This facility continues until September 2016 and is subject to banking covenants.

The directors have a reasonable expectation that the Company and the Group have adequate resources to continue an operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the interim statements.

3. Business Segments

For management purposes, the Group is currently organised into five operating segments: Sports & Entertainment, Advertising and Marketing Services, Public Relations, Insight and Engagement and Healthcare Communications.

Principal activities are as follows:

Sports & Entertainment

The Sports & Entertainment division is the fastest growing Sport & Entertainment group in the world. It is made up of a number of internationally recognised market leading businesses including CSM Strategic, Essentially, Fast Track, Full Access Hospitality, Golden Goal, Icon, iLuka, JMI, People Marketing and Sportseen.

Advertising and Marketing Services ('AMS')

The AMS division includes the VCCP Group and Teamspirit. It possesses specialist skills in advertising and marketing services, direct marketing, digital communication, search relations, point of sale, sales promotion, data consultancy and technical design, multimedia content, youth marketing and experiential, marketing consulting, retail and shopper marketing and specialist media planning and buying. It also specialises in the niche market of financial and professional services.

Public Relations

The Good Relations Group is a fully integrated brand communications and CSR consultancy servicing more than 400 clients in the UK and internationally. Companies include: Corporate Citizenship, a best-in-class global CSR consultancy, inEvidence, a market-leading and global business-to-business customer advocacy agency, Good Relations, one of the UK's leading consumer brand and B2B public relations agencies, Harvard, a renowned technology public relations business and TTA Property, an award-winning property public relations business.

Insight & Engagement

The Insight and Engagement division is a leading top 10 strategic insight and research group, bringing together some of the country's leading insight specialists with the most extensive and innovative research solutions to help their clients to reach faster conclusions, make better decisions and develop more informed solutions.The Insight and Engagement division is made up of Opinion Leader, Facts International, Watermelon Research and Cherry Picked Research.

Healthcare Communications

OPEN Health, a healthcare communications and market access group was formed in 2011, and comprises specialist best-in-class businesses that are individually experts in their fields. The group operates across a wide range of disciplines working with almost all of the world's top 40 pharmaceutical companies, as well as many device, diagnostic and healthcare delivery organisations, from small start-ups to major multinationals at a UK, regional and global level. The group brands are OPEN LEC, OPEN Plan, Reynolds McKenzie, Succinct, The EarthWorks, Harvey Walsh, OPEN Access, Engage and pH Associates.

Segment information about these businesses is presented below.

	Revenue			Operating income

	6 months ended 30 June 2014	6 monthsended 30 June 2013	12 monthsended 31 December2013	6 months ended 30 June 2014	6 monthsended 30 June 2013	12 monthsended 31 December2013
	(unaudited)	(unaudited)	(audited)	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000	£'000	£'000	£'000

Sport & Entertainment	86,439	53,915	109,028	37,909	24,370	55,576
Advertising and Marketing Services	79,676	53,282	122,037	36,243	29,986	65,807
Public Relations	15,835	18,066	35,390	10,097	11,135	21,228
Healthcare	11,187	9,621	21,661	9,451	8,283	18,451
Insight & Engagement	5,377	5,353	11,070	4,225	4,035	9,067
	198,514	140,237	299,186	97,925	77,809	170,129

	Operating Profit			Operating Profit Margin

	6 months ended 30 June 2014	6 months ended 30 June 2013	12 monthsended 31 December2013	6 months ended 30 June 2014	6 monthsended 30 June 2013	12 monthsended 31 December2013
	(unaudited)	(unaudited)	(audited)	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000	%	%	%

Sport & Entertainment	5,720	(1,450)	(9,501)	15.1%	(6.5%)	(17.1%)
Advertising and Marketing Services	2,047	2,364	4,237	5.6%	8.3%	6.4%
Public Relations	1,013	(1,569)	1,359	10.0%	(14.1%)	6.4%
Healthcare	1,158	986	2,599	12.3%	11.9%	14.1%
Insight & Engagement	1,403	1,153	2,667	33.2%	28.6%	29.4%
	11,341	1,484	1,361	11.6%	1.9%	0.8%
Unallocated corporate expenses	(636)	(566)	(1,342)
Operating profit	10,705	918	19	10.9%	1.2%	0.0%

Other gains and losses	-	-	(3,225)
Share of results of associates	653	541	692
Investment income	36	7	66
Finance costs	(1,526)	(507)	(1,637)
Finance cost of deferred consideration	(186)	(175)	(309)
Finance cost of deemed remuneration	(117)	(195)	(345)
Profit/(loss) before tax	9,565	589	(4,739)

Geographical segments:

The Group's operations are located in the United Kingdom, Europe, the Middle East, the Far East, the USA, South America, Africa and Australasia. The Sport & Entertainment division is located in the United Kingdom, the Middle East, The Far East, South America, Europe, Africa and Australasia. The Group's Advertising and Marketing Services division is located in the United Kingdom, Continental Europe and Australasia. Public relations is carried out in the United Kingdom, Europe, Africa, the Middle East, the Far East and the USA. Insight and Engagement and the Healthcare divisions are located solely in the United Kingdom.

4. Deemed remuneration

	6 monthsended 30 June2014	6 monthsended 30 June2013	12 monthsended 31 December2013
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000

Deemed Remuneration charge on acquisition of subsidiaries	2,450	4,297	6,770
Deemed Remuneration charge LLP capital contribution	1,117	330	1,375
Total	3,567	4,627	8,145

5. Tax

Tax charge

Headline results

Tax for the six month period is charged at 25.0% (six months ended 30 June 2013: 25.7%; year ended 31 December 2013: 26.0%), representing the best estimate of the average annual effective tax rate expected for the full year, applied to the pre-tax income of the six month period.

Statutory results

Tax for the six month period is charged at 36.7% (six months ended 30 June 2013: 433.8%; year ended 31 December 2013: (93.2%)), representing the best estimate of the average annual effective tax rate expected for the full year, applied to the pre-tax income of the six month period.

Deferred tax

	6 monthsended 30 June2014	6 monthsended 30 June2013	12 monthsended 31 December2013
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
As at 1 January	2,853	2,084	2,084
Adjustment to acquisition accounting	(2,798)	-	-
Acquisition of subsidiaries	(115)	(436)	109
Credit/(charge) to equity	281	-	242
Credit(charge) to the profit and loss account	477	550	472
Exchange adjustments	62	(5)	(54)

As at 30 June / 31 December	760	2,193	2,853

6. Earnings per share

	6 months ended 30 June2014	6 monthsended 30 June2013	12 monthsended 31 December2013
	(unaudited)	(unaudited)	(audited)
From Continuing Operations
The calculation of the basic and diluted earnings per share is based on the following data:

Earnings	£'000	£'000	£'000

Earnings for the purpose of basic and diluted earnings per share being net profit attributable to the equity holders of the parent	5,185	(2,729)	(10,831)


Number of shares	Number	Number	Number

Weighted average number of ordinary shares for the purposes of basic earnings per share	97,633,820	82,570,786	85,742,203

Effect of dilutive potential ordinary shares:
Share options and deferred shares	1,279,495	785,733	817,836

Weighted average number of ordinary shares for the purposes of diluted earnings per share	98,913,315	83,356,519	86,560,039

From Continuing Operations
Earnings per share
Basic	5.31p	(3.31p)	(12.63p)
Diluted	5.24p	(3.31p)	(12.63p)

7. Dividends

The proposed interim dividend was approved by the Board on 20 August 2014 and has not been included as a liability as at 30 June 2014. The dividend will be paid on 10 October 2014 to those shareholders on the register at 19 September 2014. The ex-dividend date is 17 September 2014.

Under an agreement dated 3 April 1996, The Chime Communications Employee Trust has agreed to waive dividends in respect of 426,650 ordinary shares representing 0.4% of the company's called-up share capital.

	6 monthsended 30 June2014	6 monthsended 30 June2013	12 monthsended 31 December2013
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Amounts recognised as distributions to equity holders in the period (approved):

Interim dividend for the year ended 31 December 2013 of 2.20p per share	-	-	1,887

Final dividend for the year ended 31 December 2013 of 5.14p (2012: 5.14p) per share	5,065	4,381	4,402

	5,065	4,381	6,289

Amounts not recognised as distributions to equity holders in the period (declared):

Proposed interim dividend for the year ended 31 December 2014 of 2.53p (2013: 2.20p) per share	2,497	1,897	-
Proposed final dividend for the year ended 31 December 2013 of 5.14p per share	-	-	5,043

Business combinations

In the first half of 2014, the Group made an acquisition in order to grow the business.

The Sport and Entertainment division made 1 acquisition as follows:

· The Blaze Agency Pty Ltd, a Rugby player management and marketing agency, based in Australia. The acquisition will further enhance the geographical coverage of CSM Sport and Entertainment's activities within the Asia Pacific market.

The Blaze Agency Pty Ltd

On 5 March 2014 the group acquired 100% of The Blaze Agency Pty Ltd ("Blaze"), a company incorporated in Australia, for initial consideration of AUD$2,000,000 (£1,076,000), which was paid in cash.

Additional consideration is payable contingent on the results of the business, capped at the maximum of AUD$2,000,000 (£1,070,000) (undiscounted). Deemed remuneration of £43,301 has been provided, which has been discounted for financing costs. The deemed remuneration is expected to be paid in 2016 and 2019. The total maximum consideration and deemed remuneration payable for Blaze is AUD$4,000,000 (£2,146,000).

Blaze was acquired by Chime's Sport and Entertainment division.

The fair value of the net assets acquired is detailed below.

	Provisional Book value £'000	Fair value adjustments £'000	Provisional fair values at 30 June 2014 £'000

Intangible fixed assets	-	577	577
Property, plant and equipment	3	-	3
Debtors and other current assets	14	(115)	(101)
Cash at bank	79	-	79
Creditors	(51)	-	(51)
Net assets	45	462	507
Goodwill			569

Fair value of consideration			1,076

Cash consideration			1,076
Cash acquired			(79)
Cash outflow arising on acquisition			997

The adjustment to intangible fixed assets is to recognise £577,000 of intangibles relating to customer contracts and relationships.

The adjustment to other current assets is the recognition of a deferred tax asset on intangible assets.

Acquisition related costs amounting to £125,000 have been expensed during the period and are included in operating expenses.

Goodwill represents the specialist skills held by Blaze.

Blaze contributed revenue of £142,204 and an operating loss of £62,690 (after deemed remuneration charge of £40,733) to the results of the Group since acquisition. If the acquisition had been completed at the beginning of the period, management estimate that its contribution to Group revenue for the period would have been £165,708 and its contribution to Group operating result would have been a loss of £107,817.

Just Marketing Inc.

On 20 November 2013 the group acquired 100% of Just Marketing Inc. ("JMI") a company incorporated in the United States of America and determined provisional fair values at the date of acquisition. These fair values have been adjusted, with a corresponding impact on goodwill as detailed below. The fair values remain provisional at 30 June 2014.

	Provisional fair value at 31 December 2013 £'000	Fair value adjustments £'000	Fair value at 30 June 2014 £'000

Intangible assets	-	12,929	12,929
Property, Plant & Equipment	544	-	544
Debtors and other current assets	11,818	(1,953)	9,865
Creditors	(11,631)	-	(11,631)
Cash at bank	484	-	484
Long-term liabilities	(760)	-	(760)
	455	10,976	11,431
Goodwill	44,002	(10,976)	33,026
Total consideration	44,457	-	44,457

The fair value adjustments arise as a result of recognition of intangible assets relating to customer contracts and relationships and brand name. The adjustment to other current assets is recognition of deferred tax liability on intangible assets.

The intangible assets recognised were Brand name of £2,746,103 and Customer contracts and relationships of £10,182,949.

8. Goodwill

	As at 30 June2014	As at 30 June2013	As at 31 December2013
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000

Carrying amount at 1 January	227,810	178,109	178,109
Exchange differences	25	140	(483)
Recognised on acquisition of subsidiaries	569	14,499	54,881
Transfer in from other financial assets	-	300	-
Other changes in respect of prior year acquisitions	(10,976)	57	58
Disposal	-	-	(3,043)
Impairment	-	(3,107)	(1,712)
Carrying amount at 30 June/31 December	217,428	189,998	227,810

In 2014 other changes in respect of prior year acquisitions include:

· Revision of provisional goodwill relating to Just Marketing Inc. due to more information becoming available relating to the business at acquisition, which lead to the recognition of intangible assets amounting to £12,929,052. The intangible assets recognised were Brand name of £2,746,103 and Customer contracts and relationships of £10,182,949.

· Revision of provisional deferred tax relating to Just Marketing Inc. due to the recognition of intangible assets, amounting to recognition of deferred tax liability of £1,953,000.

The group has conducted a sensitivity analysis on the impairment test of each CGU's carrying value. If discount rates were increased by 1% and operating income reduced by 10% in each period, goodwill allocated to one CGU would be impaired by £78,000. The CGU operates within the Public Relation segment and has total goodwill associated of £5,571,000. For the same CGU, if the sensitivities were taken in isolation only the increase in the discount rate has an impact. The discount rate would need to increase by 1.6% before any impairment would be recorded.

9. Share capital

Share capital as at 30 June 2014 amounted to £24.7million. During the period, the Group issued 783,331 shares as part of acquisition consideration and share schemes. The capitalisation issue increased the number of shares in issue from 98,116,120 to 98,899,451.

During the period, the Group issued shares as follows:

209,500 shares at 350.00 pence per ordinary share were issued on 19 February 2014 in relation to the acquisition of Just Marketing Inc.

122,352 shares at 349.75 pence per ordinary share were issued on 2 April 2014 in relation to the acquisition of Just Marketing Inc.

218,536 shares at 352.90 pence per ordinary share were issued on 2 April 2014 in relation to the acquisition of McKenzie Clarke Limited.

74,776 shares at 349.30 pence per ordinary share were issued on 2 May 2014 in relation to the acquisition of pH Associates Limited.

106,110 shares at 352.75 pence per ordinary share were issued on 30 May 2014 in relation to the acquisition of Just Marketing Inc.

52,057 shares were issued to staff in relation to share schemes at prices between £1.450 and £1.975.

10. Notes to the consolidated cash flow statement

	6 monthsended 30 June2014	6 monthsended 30 June2013	12 monthsended 31 December2013
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000

Operating profit	10,705	918	19

Adjustments for:
Share-based payment expense/(credit)	592	(503)	(128)
Deemed remuneration	3,450	4,627	7,800
Changes to deferred consideration	-	(63)	3,229
Translation differences	(367)	697	(553)
Depreciation of property, plant and equipment	2,093	1,545	3,320
Amortisation of intangible fixed assets and impairment of goodwill	2,395	1,480	3,568
Impairment of goodwill	-	3,107	1,712
Loss on disposal of property, plant and equipment	19	16	117
Increase in provisions	(623)	(482)	(598)
Operating cash flows before movements in working capital	18,264	11,342	18,486
Decrease/(Increase) in work in progress	1,666	(4,736)	(4,052)
Increase in receivables	(11,224)	(10,091)	(8,141)
Increase in payables	1,296	7,084	4,573
Cash generated from operations	10,002	3,599	10,866
Income taxes paid	(2,158)	(3,256)	(6,395)
Interest paid	(1,309)	(413)	(1,325)
Net cash from/(used in) operating activities	6,535	(70)	3,146

11. Acquisition of subsidiaries (net of cash acquired)

	6 monthsended 30 June2014	6 monthsended 30 June2013	12 monthsended 31 December2013
	(unaudited)	(unaudited)	(unaudited)
	£'000	£'000	£'000
Cash consideration for business combination	(1,076)	(17,077)	(47,611)
Cash acquired from business combination	79	1,017	1,501
Cash outflow arising on acquisition	(997)	(16,060)	(46,110)
Cash consideration payments deferred	-	9,485	-
Contingent consideration payments on previous acquisitions	(2,130)	(5,356)	(12,046)
Acquisition of subsidiaries (net of cash acquired)	(3,127)	(11,931)	(58,156)

12. Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. During the year Group companies entered into the following significant transactions with related parties who are not members of the Group.

	6 months ended 30 June 2014 (unaudited)
Associates	Sale of services £'000	Purchase of services £'000	Amounts owed by related parties £'000			Amounts owed to related parties £'000

Bell Pottinger LLP	27	129	30			64
Bell Pottinger Private Limited	570	15	286			147
Colour TV Limited	13	-	4			-
Rare Corporate Design Limited	-	86	-			32
StratAgile	5	56	5			20
The Brand Marketing Team Limited	1	53	-			12
Icon Display South Africa (Pty) Ltd	-	8	-			-

	6 months ended 30 June 2013 (unaudited)
Associates	Sale of services £'000	Purchase of services £'000		Amounts owed by related parties £'000	Amounts owed to related parties £'000

Bell Pottinger LLP	963	160		100	124
Bell Pottinger Private Limited	616	-		668	-
Colour TV Limited	12	-		-	-
Naked Eye Research Limited	6	3		-	3
Rare Corporate Design Limited	40	94		-	3
StratAgile	-	12		-	10
The Agency of Someone Limited	-	142		7	119
The Brand Marketing Team Limited	97	225		166	-
X&Y Communications Limited	23	-		14	-

	12 months ended 31 December 2013 (audited)
Associates	Sale of services £'000	Purchase of services £'000		Amounts owed by related parties £'000	Amounts owed to related parties £'000

Bell Pottinger Private Limited	2,898	178		34	273
Bell Pottinger Public Affairs Limited	25	-		-	3
Bell Pottinger Public Relations Limited	68	35		-	24
Bell Pottinger Sans Frontiers	34	-		-	8
Pelham Bell Pottinger	53	-		-	18
The Brand Marketing Team Limited	198	466		68	44
Colour TV Limited	30	-		-	5
Naked Eye Research Limited	8	-		-	1
Rare Corporate Design Limited	53	85		-	4
StratAgile Limited	5	155		5	5
The Agency of Someone Limited	6	2		-	-
X&Y Communications Limited	41	-		-	-
Icon Display South Africa (Pty) Ltd	1	-		-	-
Bell Pottinger LLP	-	88		62	-

Forward looking statements

The interim management report contains certain forward looking statements in respect of Chime Communications plc and the operation of its subsidiaries. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. Nothing in this announcement should be construed as a profit forecast.

Responsibility statement

We confirm that to the best of our knowledge;

(a) the condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit and loss of the Group, included in the consolidation as a whole as required by DTR 4.2.4R;

(b) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

(c) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

By order of the board

Mark Smith

Chief Operating Officer and Finance Director

27 August 2014

INDEPENDENT REVIEW REPORT TO CHIME COMMUNICATIONS PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2014 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated cash flow statement and related notes 1 to 13. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditor

London, United Kingdom

27 August 2014

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR KQLFLZVFZBBF

Date		Source	Headline
23rd Jul 2013	11:32 am	RNS	Notice of Results
1st Jul 2013	10:17 am	RNS	Voting Rights and Capital
6th Jun 2013	9:00 am	RNS	Digital Investor Workshop
31st May 2013	2:14 pm	RNS	Voting Rights and Capital
22nd May 2013	3:35 pm	RNS	Deferred Share Plan and Directors' Shareholdings
22nd May 2013	3:31 pm	RNS	Director/PDMR Shareholding
16th May 2013	3:35 pm	RNS	2013 Performance Share Plan
16th May 2013	7:00 am	RNS	BLOCK LISTING SIX MONTHLY RETURN
15th May 2013	3:35 pm	RNS	Result of AGM
15th May 2013	2:35 pm	RNS	Acquisitions
15th May 2013	11:22 am	RNS	AGM and Interim Management Statement
8th May 2013	11:00 am	RNS	Block Listing
1st May 2013	12:00 pm	RNS	Total Voting Rights
23rd Apr 2013	12:00 pm	RNS	Annual Report and Accounts
23rd Apr 2013	10:30 am	RNS	Board changes
22nd Apr 2013	4:47 pm	RNS	Notification of Holdings
26th Mar 2013	11:44 am	RNS	Additional Listing
7th Mar 2013	4:21 pm	RNS	Notification of Holdings
6th Mar 2013	7:00 am	RNS	Preliminary Results
1st Mar 2013	3:02 pm	RNS	Total Voting Rights
18th Feb 2013	7:00 am	RNS	Notice of Results
1st Feb 2013	7:07 am	RNS	Total Voting Rights
31st Jan 2013	12:00 pm	RNS	Completion of acquisition
28th Jan 2013	9:54 am	RNS	Change of registered office address
4th Jan 2013	5:00 pm	RNS	Total Voting Rights
30th Nov 2012	5:27 pm	RNS	Voting Rights and Capital
19th Nov 2012	7:00 am	RNS	Interim Management Statement and Board Change
31st Oct 2012	5:06 pm	RNS	Total Voting Rights
26th Oct 2012	4:26 pm	RNS	Proposed acquisition and appointment
25th Oct 2012	7:00 am	RNS	BLOCK LISTING SIX MONTHLY RETURN
17th Oct 2012	6:01 pm	RNS	Grant of Awards
16th Oct 2012	7:00 am	RNS	Acquisition of pH Associates Limited
11th Oct 2012	3:32 pm	RNS	Purchase of Own Shares
8th Oct 2012	3:05 pm	RNS	Purchase of Own Shares
1st Oct 2012	3:08 pm	RNS	Total Voting Rights
31st Aug 2012	3:48 pm	RNS	Voting Rights and Capital
29th Aug 2012	7:00 am	RNS	Interim Results
21st Aug 2012	2:36 pm	RNS	Notice of Results
2nd Aug 2012	9:48 am	RNS	Voting Rights and Capital
25th Jul 2012	5:17 pm	RNS	Notification of Holdings
3rd Jul 2012	10:27 am	RNS	Acquisition of minority interest in VCCP Search
3rd Jul 2012	9:54 am	RNS	Voting Rights and Capital
2nd Jul 2012	11:51 am	RNS	Completion of Disposal
26th Jun 2012	5:38 pm	RNS	Director Dealing Notification
19th Jun 2012	4:20 pm	RNS	Director Dealing Notification
18th Jun 2012	12:22 pm	RNS	Result of General Meeting
6th Jun 2012	10:46 am	RNS	Notification of Holdings
1st Jun 2012	7:00 am	RNS	Director Dealing Notification
31st May 2012	4:53 pm	RNS	Total Voting Rights
31st May 2012	12:46 pm	RNS	Posting of Circular and Notice of General Meeting

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