Norman Broadb Regulatory News (NBB)

30 September 2014 Norman Broadbent plc ("Norman Broadbent" or "the Company" or "the Group") Interim Results Norman Broadbent, a leading provider of executive search, leadershipconsultancy and complementary recruitment services, today announces itsunaudited results for the six months ended 30 June 2014. Financial highlights * Revenue from continuing operations increased by 4.5 per cent to £3.82m (2013: £3.65m) * Gross profit from continuing operations increased by 7 per cent to £3.70m (2013: £3.46m) * UK executive search profit before tax increased by 8 per cent to £0.23m (2013: £0.21m) * UK executive search revenue per billing consultant increasing by 4 per cent * Revenue from our two new subsidiary businesses, AGP and Connecting Corporates (rebranded Social Media Search), increased by £0.7m to £0.9m (2013: £0.2m) * Adjusted operating loss from continuing operations was £0.4m* (2013: £0.3m) reflecting, the continued investment AGP and Social Media Search * Group cash and cash equivalents were £0.24m (31 December 2013: £0.6m) * No bank debt * Net assets of £1.7m (2013: £3.0m) * Before non-recurring exceptional items Operational highlights * James Webber, Group CFO and COO, will be joining the PLC Board with immediate effect * Strong momentum in new subsidiary businesses, specifically in the growth areas of RPO solutions and social media consultancy * In the first six months of 2014, our new subsidiary businesses contributed 60 per cent more revenue to the Group than the 12 months ended 31 December 2013 * Two new senior hires in Norman Broadbent Interim Management * Completed refocusing of the Norman Broadbent brand worldwide * Streamlined the Group by selling our 51% subsidiary Norman Broadbent SPRL and mutually agreeing to end our license agreement and selling our 20 percent holding in NBS Norman Broadbent SA Pierce Casey, Chairman of Norman Broadbent, said: "In the first six months of 2014 we continued to invest in growing our enhancedsuite of service offerings alongside focusing on improving profit margin in ourcore executive search business. I am pleased to report that since the period end UK executive search /leadership consulting, executive interim, RPO (within AGP) and social mediasearch are all trading and trending well, whilst we are dealing with a somewhatdisappointing performance from the traditional contingent offering of AGP. Finally, the Board is delighted to announce that James Webber, Group CFO andCOO, will be joining the PLC Board with immediate effect." These results are also available from the Company's website athttp://www.normanbroadbent.com/ . For further information please contact: Norman Broadbent plcPierce Casey/Sue O'Brien/James Webber 020 7484 0000 Sanlam Securities UK LimitedSimon Clements/Virginia Bull 020 7628 2200 Notes to Editors Norman Broadbent plc is a leading provider of senior and board executive searchand leadership consultancy and assessment services. Through AGP the Group alsoprovides specialist contingent offerings, including RPO solutions. NormanBroadbent Interim Management provides a dedicated senior interim managementservice focussed on enhanced client returns on investment and long termbenefits. Connecting Corporates and Winning Work, now consolidated under theSocial Media Search brand, provides digital research to assist in houserecruitment as well as assisting professional service firms to drive sales bybespoke exploitation of social media. Headquartered in London, the Group alsohas offices in Los Angeles with a representative office in Singapore. For further information visit www.normanbroadbent.com Chairman's Statement Financial ResultsThe table below summarises the results for the Group. Six months to Six months to Year ended 30 June 30 June 31 Dec 2014 2013 2013 £000's £000's £000's CONTINUING OPERATIONS REVENUE 3,818 3,654 6,821 Cost of sale (122) (190) (162) GROSS PROFIT 3,696 3,464 6,659 Operating expenses (4,091) (3,864) (7,923) Other income - 125 125 GROUP OPERATING (LOSS) (395) (275) (1,139) Dividends received - - 17 Net finance cost (14) (16) (31) Exceptional Items (559) - - (Loss) on disposal of investment (37) - - (LOSS) BEFORE TAX (1,005) (291) (1,153) Income tax - - (19) (Loss)/profit from discontinued (144) 33 20operation (LOSS) AFTER TAX (1,149) (258) (1,152) Revenue from continued operations for the six month period to 30 June 2014increased by 4.5 per cent to £3.8m (2013: £3.7m). UK executive search revenuedeclined by 14 per cent to £2.5m from £2.9m in the six month period to 30 June2013, but with increased profit based on high margin coupled with reducedcosts. This is highlighted by revenue per billing consultant increasing by 4per cent to £164k (2013: £157k). Group operating loss from continued operations was £0.4m (2013: £0.3m)reflecting continued investment in our start-up businesses AGP and Social MediaSearch, totalling £0.3m (2013: £0.2m). During the period the Group disposed of Norman Broadbent SPRL for £120,000 on 8May 2014, resulting in an impairment to goodwill of £112,000 in theConsolidated Statement of Financial Position, and a loss on disposal of £128,000 in the Company Statement of Financial Position. Further, on 27 May 2014, the Group sold its 20 per cent stake in NBS NormanBroadbent SA for £92,000 (20 per cent of NAV) which completed on 30 July 2014.The sale resulted in impairment to goodwill of £446,946 in the ConsolidatedStatement of Financial Position and an increase in the carrying value of theinvestment to £92,000 in the Company Statement of Financial Position. These developments have resulted in a refocused core executive search andleadership consulting business in the UK. The loss per share for the six months to 30 June 2013 was 6.68 pence comparedwith loss per share of 2.09 pence in the comparative period and adjusted lossper share was 6.54 pence compared with loss per share of 1.70 pence in 2013. Financial Position Equity shareholders' funds were £1.7m as at 30 June 2014 (£2.8m as at 31December 2013), with net current assets of £0.2m (£0.8m as at 31 December2013). The decrease in equity shareholder funds was primarily due to animpairment to goodwill in relation to the sale of Norman Broadbent SPRL and thesale of our interest in NBS Norman Broadbent totalling £0.6m in non cashexceptional items. Cash and cash equivalents at 30 June 2014 stood at £0.2m, down from £0.6m at 31December 2013 reflecting the continued investment in the new businesses andtheir associated start-up losses. The balance on the Group's revolving invoicediscounting facility was £1.0m (£0.8m at 31 December 2013), reflecting a tradereceivables balance of £1.6m (£1.8m at 31 December 2013). The Group continues to hold no bank debt. Management The Board is delighted to announce that James Webber, Group CFO and COO, willbe joining the PLC Board with immediate effect. James joined the business inMarch 2014, and his experience from his time in the COO office at EY has provedinvaluable to the Company. Current Trading and Outlook Core UK executive search / leadership consulting, executive interim, socialmedia search and RPO have all performed in line with management expectationssince the period end, and are all trending well. However, trading since theperiod end in the traditional contingent offering within AGP has beendisappointing and has required greater investment than anticipated. In light of this, the Board has decided to consider a refocusing of this aspectof our contingent offering. If such a refocusing is required certain largeshareholders have indicated their support. The outlook for the remainder of 2014 and 2015 is positive. Pierce CaseyChairman CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the six month period ended 30 June 2014 Note Six months Six months Year ended ended ended 31 30 June 30 June December 2014 2013 2013 (unaudited) (unaudited) (audited) £000 £000 £000 CONTINUING OPERATIONS REVENUE 3,818 3,654 6,821 Cost of Sales (122) (190) (162) GROSS PROFIT 3,696 3,464 6,659 Operating expenses (4,091) (3,864) (7,923) Other Income - 125 125 GROUP OPERATING LOSS (395) (275) (1,139) Dividends received - - 17 Net finance cost (14) (16) (31) Exceptional 7 (559) - -Items (Loss) on disposal of (37) - -investment LOSS ON ORDINARY ACTIVITIES (1,005) (291) (1,153)BEFORE INCOME TAX Income tax expense - - (19) LOSS FROM CONTINUING OPERATIONS (1,005) (291) (1,172) DISCONTINUED OPERATIONS Profit/(loss) from discontinued 8 (144) 33 20operation LOSS FOR THE PERIOD (1,149) (258) (1,152) OTHER COMPREHENSIVE INCOME Foreign currency translation (11) - (12)differences - foreignoperations TOTAL COMPREHENSIVE INCOME (1,160) (258) (1,164) Loss attributable to: Owners of the Company (989) (272) (1,050) Non-controlling interests (160) 14 (102) (Loss) for the period (1,149) (258) (1,152) Total comprehensive incomeattributable to: Owners of the Company (1,000) (272) (1,062) Non-controlling interests (160) 14 (102) Total comprehensive income for (1,160) (258) (1,164)the period Loss per share - Basic (6.68p) (2.09p) (7.85p) - Diluted (6.68p) (2.09p) (7.85p) Adjusted loss per share - Basic (6.54p) (1.70p) (7.40p) - Diluted (6.54p) (1.70p) (7.40p) Loss per share - continuingoperations - Basic (6.26p) (2.19p) (7.92p) - Diluted (6.26p) (2.19p) (7.92p) Adjusted loss per share -continuing operations - Basic (6.12p) (1.80p) (7.48p) - Diluted (6.12p) (1.80p) (7.48p) CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at 30 June 2014 Note As at As at As at 30 June 30 June 31 December 2014 2013 2013 (unaudited) (unaudited) (audited) £000 £000 £000 Non-Current Assets Intangible Assets 1,455 1,922 1,922 Property, plant and equipment 121 197 172 Deferred Tax 69 69 69 TOTAL NON-CURRENT ASSETS 1,645 2,188 2,163 Current Assets Trade and other receivables 2,336 2,314 2,339 Cash and cash equivalents 238 596 579 TOTAL CURRENT ASSETS 2,574 2,910 2,918 TOTAL ASSETS 4,219 5,098 5,081 Current Liabilities Trade and other payables (1,374) (1,116) (1,333) Deferred consideration - - - Invoice discounting facilities (989) (753) (802)drawn Corporation tax liability - (93) (21) TOTAL CURRENT LIABILITIES (2,363) (1,962) (2,156) NET CURRENT ASSETS 211 948 762 Non-current liabilities Provisions 6 (125) (125) (125) TOTAL LIABILITIES (2,488) (2,087) (2,281) TOTAL ASSETS LESS TOTAL 1,731 3,011 2,800LIABILITIES Equity Issued share capital 5,875 5,857 5,875 Share premium account 10,238 9,570 10,238 Retained earnings (14,180) (12,575) (13,356) Equity attributable to owners 1,933 2,852 2,757of the Company Non-controlling interests (202) 159 43 TOTAL EQUITY 1,731 3,011 2,800 CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the six month period ended 30 June 2014 Attributable to owners of the CompanyCONSOLIDATED GROUP Share Share Retained Total Non-controlling Total Capital Premium Earnings Equity interests Equity £000 £000 £000 £000 £000 £000 Balance at 1stJanuary 2013 5,857 9,572 (12,353) 3,076 145 3,221 Loss for the period 0 0 (272) (272) 14 (258) Total other comprehensive 0 0 0 0 0 0income Total comprehensive income - - (272) (272) 14 (258)for the period Transactions with owners of the Company,recognised directly in equity: Issue of ordinary shares 0 (2) 0 (2) 0 (2) Credit to equity for share 0 0 50 50 0 50based payments Total transactions with - (2) 50 48 - 48owners of the Company,recognised directly inequity Balance at 30 June 2013 5,857 9,570 (12,575) 2,852 159 3,011 Balance at 1stJuly 2013 5,857 9,570 (12,575) 2,852 159 3,011 Loss for the period - - (778) (778) (116) (894) Total other comprehensive - - (12) (12) - (12)income Total comprehensive income - - (790) (790) (116) (906)for the period Transactions with owners of the Company,recognised directly in equity: Issue of ordinary shares 18 668 - 686 - 686 Credit to equity for share 0 - 9 9 - 9based payments Total transactions with 18 668 9 695 0 695owners of the Company,recognised directly inequity Balance at 31stDecember 5,875 10,238 (13,356) 2,757 43 2,8002013 Balance at 1stJanuary 2014 5,875 10,238 (13,356) 2,757 43 2,800 Loss for the period - - (989) (989) (160) (1,149) Adjustment for - - - - 70 70discontinued operation Total other comprehensive - - (11) (11) - (11)income Total comprehensive income - - (1,000) (1,000) (90) (1,090)for the period Transactions with owners of the Company,recognised directly in equity: Issue of ordinary shares - - - - - - Credit to equity for share - - 21 21 - 21based payments Total transactions with 0 0 21 21 - 21owners of the Company,recognised directly inequity Changes in ownershipinterest in subsidiaries Disposal of 0 0 155 155 (155) 0non-controlling interestswith change of control Total transactions with - - 176 176 (155) 21owners of the company Balance at 30 June 2014 5,875 10,238 (14,180) 1,933 (202) 1,731 CONSOLIDATED STATEMENT OF CASH FLOWFor the six month period ended 30 June 2014 Note Six months Six months Year ended ended ended 31 30 June 30 June December 2014 2013 2013 (unaudited)(unaudited) (audited) £000 £000 £000 Net cash used in operating activities (i) (468) (8) (731) Cash flows from investing activitiesand servicing of finance Net finance cost (14) (16) (31) Dividends received - - 17 Payments to acquire tangible fixed (14) (102) (122)assets Disposal of discontinued operation, 8 (23) -net of cash disposed of Repayment of deferred consideration - (73) (73) Net cash used in investing activities (51) (191) (209) Cash flows from financing activities Net cash inflows from equity placing - (2) 684 Increase/(decrease) in invoice 187 (212) (163)discounting Net cash from financing activities 187 (214) 521 Net (decrease)/increase in cash and (332) (413) (419)cash equivalents Net cash and cash equivalents at 579 1,009 1,009beginning of period Effects of exchange rate changes on (9) - (11)cash balances held in foreigncurrencies Net cash and cash equivalents at end of 238 596 579period Analysis of net funds Cash and cash equivalents 238 596 579 Borrowings due within one year (989) (753) (802) Deferred consideration - - - Net funds (751) (157) (223) Note (i) Reconciliation of operating profit to Six months Six months Yearnet cash from operating activities ended 30 ended 30 ended 31 June June December 2014 2013 2013 (unaudited) (unaudited) (audited) Operating (loss) (497) (221) (1,070) Depreciation/ impairment of property, 38 45 89plant and equipment Share based payment charge 21 50 59 Increase in trade and other (173) (48) (71)receivables Increase in trade and other payables 164 41 258 Increase in provisions 6 - 125 125 Taxation paid (21) - (121) Net cash used in operating activities (468) (8) (731) NOTES TO THE FINACIAL STATEMENTS 1. ACCOUNTING POLICIES 1.1 Basis of preparation The financial information set out in this interim report does not constitutestatutory accounts as defined in Section 434 of the Companies Act 2006. TheGroup's statutory financial statements for the year ended 31 December 2013,prepared under International Financial Reporting Standards (IFRS), have beenfiled with the Registrar of Companies. The auditor's report on those statementswas unqualified. The interim financial information for the six months ended 30 June 2014, hasbeen prepared in accordance with the AIM Rules for Companies. The Group has notelected to apply IAS 34 `Interim Financial Reporting'. The principal accountingpolicies used in preparing the interim results are those the Group expects toapply in its financial statements for the year ending 31 December 2014 and areunchanged from those disclosed in the Group's Annual Report for the year ended31 December 2013. The interim financial statements have not been audited. 1.2 Basis of consolidation and business combinations The Group financial statements consolidate those of the Company and of thefollowing subsidiary undertakings: Principal Group investments: Country of Principal Description and incorporation activities proportion of or registration shares held by and operation the Company Norman Broadbent Executive England and Executive 100 per centSearch Ltd Wales search ordinary shares Norman Broadbent Overseas Ltd England and Executive 100 per cent Wales search ordinary shares Norman Broadbent Leadership England and Assessment, 100 per centConsulting Ltd (formerly Wales coaching and ordinary sharesHuman Asset Development talent mgmt.International Ltd) AGP NB Ltd (formerly NBBI England and Contingent 100 per centLtd) Wales Search ordinary shares The NB Consultancy Republic of Executive 100 per cent(Singapore) Pte Ltd Singapore Search ordinary shares Norman Broadbent Inc United States Executive 100 per cent of America Search ordinary shares Norman Broadbent SPRL Belgium Executive 51 per cent(formerly Acker Deboeck and search, ordinary sharesCompany) * assessment, coaching and talent mgmt. Norman Broadbent (Ireland) Republic of Dormant 100 per centLtd *** Ireland ordinary shares Connecting Corporates Ltd England and Social Media 51 per cent Wales Search and ordinary shares Consulting Bancomm Ltd England and Dormant 100 per cent Wales ordinary shares Substantial Shareholdings: NBS Norman Broadbent SA** Spain Executive 20 per cent Search ordinary shares * The 51 per cent shareholding in this company was sold to existing managementon 8 May 2014. ** The 20 per cent shareholding in this company was owned by Norman BroadbentOverseas Ltd, a wholly owned subsidiary of the Company. The shareholding wassold on 30 July 2014. *** 100 per cent of the issued share capital of this company is owned by NormanBroadbent Overseas Ltd. 2. COPIES OF THE UNAUDITED INTERIM REPORT Copies of this report are available on request from the Company's registeredoffice at 12 St James's Square, London, SW1Y 4LB and are also available on theCompany's website at www.normanbroadbent.com. 3. SEGMENTAL ANALYSIS Management has determined the operating segments based on the reports reviewedregularly by the Board for use in deciding how to allocate resources and inassessing performance. The Board considers Group operations from both a classof business and geographic perspective. Each class of business derives its revenues from the supply of a particularrecruitment related service, from retained executive search through toexecutive assessment and coaching. Business segment results are reviewedprimarily to operating profit level, which includes employee costs, marketing,office and accommodation costs and appropriate recharges for management time. Group revenues are primarily driven from UK operations, however when revenue isderived from overseas business the results are presented to the Board bygeographic region to identify potential areas for growth or those posingpotential risks to the Group. i) Class of Business: The analysis by class of business of the Group's turnover, profit beforetaxation and net assets/(liabilities) is set out below: BUSINESS SEGMENTS Six months Executive Overseas AGP Assessment, Social Discontinued Unallocated Totalended 30 June Search Royalties Limited Coaching & Media Operation £000 £0002014 £000 £000 £000 Talent Search £000 Mgmt. £000 £000 Revenue 2,618 67 624 234 275 120 - 3,938 Cost of sales (5) - (94) (21) (2) (45) - (167) Gross profit 2,613 67 530 213 273 75 - 3,771 Operating (2,405) (8) (629) (313) (459) (173) (242) (4,229)expenses Other - - - - - - - -operatingincome Finance costs (12) - (3) - - - - (15) Depreciation (30) - (2) - (2) (4) - (38)andamortisation Exceptional - - - - - (42) (559) (601)Items Profit on - - - - - - (37) (37)disposal ofInvestment Profit before 166 59 (104) (100) (188) (144) (838) (1,149)tax Net assets 3,896 - (609) (549) (411) - (596) 1,731 BUSINESS SEGMENTS Six months Executive Overseas AGP Assessment, Social Discontinued Unallocated Totalended 30 June Search Royalties Limited Coaching & Media Operation £000 £0002013 £000 £000 £000 Talent Search £000 Mgmt. £000 £000 Revenue 3,125 126 18 242 144 355 - 4,010 Cost of sales (147) - (1) (40) (3) (114) - (305) Gross profit 2,978 126 17 202 141 241 - 3,705 Operating (2,905) (48) (215) (326) (173) (187) (157) (4,011)expenses Other 125 - - - - - - 125operatingincome Finance costs (16) - - - - - - (16) Depreciation (39) - - - (1) - - (40)andamortisation Exceptional - - - - - - -Items Profit on - - - - - - -disposal ofInvestment Profit before 143 78 (198) (124) (33) 54 (157) (237)tax Net assets 3,117 - (175) (291) (9) 369 - 3,011 BUSINESS SEGMENTS Year ended 31 Executive Overseas AGP Assessment, Social Discontinued Unallocated TotalDecember 2013 Search Royalties Limited Coaching & Media Operation £000 £000 £000 £000 £000 Talent Search £000 Mgmt. £000 £000 Revenue 5,586 212 252 467 304 730 - 7,551 Cost of sales (101) - (1) (57) (3) (230) - (392) Gross profit 5,485 212 251 410 301 500 - 7,159 Operating (5,591) (107) (674) (648) (512) (420) (313) (8,265)expenses Other 142 - - - - - - 142operatingincome Finance costs (31) - (1) - - 2 - (30) Depreciation (73) - (3) - (2) (11) - (89)andamortisation Exceptional - - - - - - - -Items Profit on - - - - - - - -disposal ofInvestment Profit before (68) 105 (427) (238) (213) 71 (313) (1,082)tax Net assets 3,577 - (470) (430) (229) 352 - 2,800 2 ii) Geographic Region: The analysis by geographic region of the Group's turnover, profit beforetaxation and net assets/(liabilities) is set out below: BUSINESS SEGMENTS Six month Executive Overseas AGP Assessment, Social Discontinued Unallocated Totalperiod Search Royalties £000 Coaching & Media Operation £000 £000ended 30 £000 £000 Talent Search £000June 2014 Mgmt. £000 £000 Revenue United 2,488 - 584 234 275 - - 3,581Kingdom Europe 27 67 40 - - 120 - 254 Other 103 - - - - - 103 Total 2,618 67 624 234 275 120 - 3,938 Grossprofit United 2,483 - 489 213 273 - - 3,458Kingdom Europe 27 67 41 - - 75 - 210 Other 103 - - - - - - 103 Total 2,613 67 530 213 273 75 - 3,771 Profit/(Loss)beforetax United 223 - (104) (100) (188) - (243) (412)Kingdom Europe - 59 - - - (144) (595) (680) Other (57) - - - - - - (57) Total 166 59 (104) (100) (188) (144) (838) (1,149) Netassets United 4,068 - (609) (549) (229) - (596) 2,085Kingdom Europe - - - - - - - - Other (354) - - - - - - (354) Total 3,714 - (609) (549) (229) - (596) 1,731 BUSINESS SEGMENTS Six month Executive Overseas AGP Assessment, Social Discontinued Unallocated Totalperiod Search Royalties £000 Coaching & Media Operation £000 £000ended 30 £000 £000 Talent Search £000June 2013 Mgmt. £000 £000 Revenue United 2,885 - 18 242 144 - - 3,289Kingdom Europe 30 104 - - - 355 - 489 Other 210 22 - - - - - 232 Total 3,125 126 18 242 144 355 - 4,010 Grossprofit United 2,774 - 17 202 141 - - 3,134Kingdom Europe 30 104 - - - 241 - 375 Other 174 22 - - - - - 196 Total 2,978 126 17 202 141 241 - 3,705 Profit/(Loss)before tax United 206 - (198) (124) (33) - (157) (306)Kingdom Europe - 57 - - - 54 - 111 Other (63) 21 - - - - - (42) Total 143 78 (198) (124) (33) 54 (157) (237) Net assets United 3,292 - (175) (291) (9) - - 2,817Kingdom Europe - - - - - 369 - 369 Other (175) - - - - - - (175) Total 3,117 - (175) (291) (9) 369 - 3,011 BUSINESS SEGMENTS Year ended Executive Overseas AGP Assessment, Social Discontinued Unallocated Total31 December Search Royalties £000 Coaching & Media Operation £000 £0002013 £000 £000 Talent Search £000 Mgmt. £000 £000 Revenue United 5,409 - 238 461 304 - - 6,412Kingdom Europe - 194 14 - - 730 - 938 Other 177 18 - 6 - - - 201 Total 5,586 212 252 467 304 730 - 7,551 Grossprofit United 5,351 - 237 410 301 - - 6,299Kingdom Europe - 194 14 - - 500 - 708 Other 134 18 - - - - - 152 Total 5,485 212 251 410 301 500 - 7,159 Profit/(Loss)before tax United 141 - (427) (238) (213) - (313) (1,050)Kingdom Europe - 105 - - - 71 - 176 Other (209) - - - - - - (209) Total (68) 105 (427) (238) (213) 71 (313) (1,082) Net assets United 3,577 - (470) (430) (229) 352 - 2,800Kingdom Total 3,577 - (470) (430) (229) 352 - 2,800 Turnover by location is not materially different from turnover by destination. The unallocated costs refer to central costs of the Group including salaries,professional and other costs, which are not directly attributable to thedelivery of the services. The four segments shown represent the managementinformation provided to the Board and in the opinion of the directors reflectthe nature of the Group's services. 4. EQUITY SECURITIES ISSUED During the six month period ended 30 June 2014 no equity securities wereissued. During the six month period ended 30 June 2013 no equity securitieswere issued. Issue of ordinary shares during Six months Six months Year endedthe period ended 30 June ended 30 June 31 December 2014 2013 2013 (unaudited) (unaudited) (audited) Shares Value Shares Value Shares Value 000's £000 000's £000 000's £000 Issue of shares on acquisition - - - - - - Issue of shares for cash - - - - 1,750 700 Total - - - - 1,750 700 5. earnings PER ORDINARY SHARE i. Basic earnings per share: This is calculated by dividing the profit attributable to equity holders of thecompany by the weighted average number of ordinary shares in issue during theperiod: Six months Six months Year ended 30 ended 30 ended 31 June 2014 June 2013 December 2013 (unaudited) (unaudited) (audited) (Loss) attributable to £(989,000) £(272,000) £(1,050,000)shareholders Weighted average number of 14,798,686 13,048,686 13,385,224ordinary shares ii) Diluted earnings per share: This is calculated by adjusting the weighted average number of ordinary sharesoutstanding to assume conversion of all dilutive potential ordinary shares. Thecompany has two categories of dilutive potential ordinary shares; share optionsand warrants. For these options and warrants, a calculation is done todetermine 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 theoutstanding warrants and options. The number of shares calculated as above iscompared with the number of shares that would have been issued assuming theexercise of the share options. Six months Six months Year ended ended 30 ended 30 31 December June 2014 June 2013 2013 (unaudited) (unaudited) (audited) (Loss) attributable to shareholders £(989,000) £(272,000) £(1,050,000) Weighted average no. of ordinary shares 14,798,686 13,048,686 13,385,224 - assumed conversion of share options - - - - assumed conversion of warrants - - - Weighted average number of ordinary shares 14,798,686 13,048,686 13,385,224for diluted earnings per share iii) Adjusted earnings per share Adjusted earnings per share has also been calculated in addition to the basicand diluted earnings per share and is based on earnings adjusted to eliminatethe effects of impairment of intangibles and charges for share based payments.It has been calculated to allow shareholders to gain a clearer understanding ofthe trading performance of the Group. Six months ended 30 Six months ended 30 Year ended 31 June 2014 June 2013 December 2013 £000 Basic Diluted £000 Basic Diluted £000 Basic Diluted pence pence pence pence pence pence per per per per per per share share share share share share Basicearnings (Loss) (989) (6.68) (6.68) (272) (2.09) (2.09) (1,050) (7.85) (7.85)after tax Adjustment Share based 21 0.14 0.14 50 0.38 0.38 60 0.45 0.45paymentcharge Adjusted (968) (6.54) (6.54) (222) (1.70) (1.70) (990) (7.40) (7.40)earnings 6. PROVISIONS Six months ended Six months Year ended 30 June 2014 ended 30 31 December June 2013 2013 £000 £000 £000 Balance at beginning of period 125 - - Provisions made during the period - 125 125 Balance at end of period 125 125 125 Non-current 125 125 125 Current - - - 125 125 125 During the previous period the Company signed a new ten year lease with a fiveyear break for its main office in London. On signing the new lease the Companyinherited the office fit-out from the previous tenant. Under the terms of thenew lease the Company is obliged to return vacant possession to the landlordwith the office returned to its original state. The Company has had the presentcost of the future works required to return the office to its original statevalued by an independent firm of advisors and this non-current liability of £125,000 has been provided for in the financial period. 7. EXCEPTIONAL ITEMS Six months Six months Year ended ended 30 ended 30 31 December June 2014 June 2013 2013 £000 £000 £000 Goodwill impairment Norman Broadbent SPRL 112 - - Goodwill impairment NB Norman Broadbent 447 - -SA Write off of investment in Norman 42Broadbent SAS Balance at end of period 601 - - 8. DISCONTINUED OPERATION On 8 May 2014, the Group sold its 51 per cent stake in Norman Broadbent SPRLfor £120,000 (compared to a cash investment of £135,000) to existingmanagement. Norman Broadbent SPRL owned 100 per cent of the issued sharecapital of Norman Broadbent S.A.S, which was liquidated in February 2014. Thesegment was not a discontinued operation or classified as held for sale at 31December 2013 and the comparative consolidated statement of comprehensiveincome has been re-presented to show the discontinued operation separately fromcontinued operations. Six months Six months Year ended ended 30 ended 30 31 December June 2014 June 2013 2013 (unaudited) (unaudited) (audited) £000 £000 £000 Results from discontinuedoperation Revenue 120 355 730 Operating Expenses (222) (301) (659) Results from operating (102) 54 71activities Exceptional items (42) - - Tax - (21) (51) Results from operating (144) 33 20activities, net of tax Minority Interest 70 (20) (10) Loss/Profit for the period (74) 13 10 Loss per share - Basic (0.42p) 0.10p 0.07p - Diluted (0.42p) 0.10p 0.07p 8. DISCONTINUED OPERATION (CONT.) Effect of disposal on the financial position of the Group Six months ended 30 June 2014 (unaudited)) £000 Property, plant and equipment 23 Trade and other receivables 126 Cash and cash equivalents * 135 Trade and other payables (48) Net assets and liabilities 236 Consideration received, satisfied in 120cash Cash and Cash equivalents disposed (135)of Net cash outflow (15) * Excludes cash balance of £8,000from the liquidated position ofNorman Broadbent SAS. 9. RELATED PARTY TRANSACTIONS i. Purchase of services: Six months Six months Year ended ended 30 ended 30 31 June 2014 June 2013 December 2013 £000 £000 £000 Adelaide Capital Limited 25 52 52 Anderson Barrowcliff LLP 6 8 14 Brian Stephens & Company Ltd 17 11 22 Connecting Corporates 12 - 11 NBS Norman Broadbent SA - 14 14 Total 60 85 113 Adelaide Capital Limited invoiced the Group for the services of P Casey (£25,000). P Casey is a director of Adelaide Capital Limited. Brian Stephens &Company Ltd invoiced the Group for the directors' fees and corporate financeservices of B Stephens (£16,000) and business related travel costs of £1,000. BStephens is a director of Brian Stephens & Company Ltd. Taxation and company secretarial services of £6,000 were acquired from AndersonBarrowcliff LLP, an accountancy firm of which R Robinson is a partner. During the period the Group acquired research services from ConnectingCorporates Limited £12,000. The Group owns a 51 per cent stake in ConnectingCorporates Limited. All related party expenditure took place via "arms-length" transactions. ii. Sales of services: Six months Six months Year ended ended 30 ended 30 31 June 2014 June 2013 December 2013 £000 £000 £000 Connecting Corporates 35 15 42 NBS Norman Broadbent SA 67 80 175 Total 102 95 217 During the period the Company invoiced NBS Norman Broadbent SA for royaltyincome (£67,000). During the period the Group recharged group services incurred for the benefitof Connecting Corporates Limited to Connecting Corporates Limited at cost £35,000. iii. Period-end payables arising from the Six months Six months Year ended purchases of services: ended 30 ended 30 31 June 2014 June 2013 December 2013 £000 £000 £000 Adelaide Capital Limited 5 10 - Anderson Barrowcliff LLP 6 2 - Brian Stephens & Company Ltd 3 4 6 NBS Norman Broadbent SA 0 14 - Total 14 30 6 The payables to related parties arise from purchase transactions and are dueone month after date of purchase. The payables bear no interest.