Norman Broadb Regulatory News (NBB)

26 September 2013 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 2013. Financial highlights * Revenues were flat at £4.0m (2012: revenues of £4.0m) * Group operating profit was £0.08m before start-up costs of new subsidiaries and new overseas offices of £0.30m (2012: operating profit of £0.06m after restructuring costs). * Group loss after tax was £0.26m (2012: profit after tax of £0.04m). * Equity shareholders' funds of £3.0m as at 30 June 2013 (£3.2m at 31 December 2012). * Group cash and cash equivalents at 30 June 2013 of £0.6m (31 December 2012: £1.0m), excluding rent deposit of £0.3m, with revolving invoice discounting facility. * No bank debt. Operational highlights * UK search continues to recover from a slow first quarter of 2013 in the TMT practice, reporting operating profit of £0.21m (2012: £0.21m). New consultant hires joining in TMT and financial services in the second half of the year. * Encouraging trend in business development from new overseas search offices. * Strong momentum in new UK subsidiary businesses in the growth areas of niche contingent recruitment, interim and social media consultancy. * Recently acquired Belgian executive assessment and search business trading profitably and in-line with management expectations. Pierce Casey, Executive Chairman, said: "It is encouraging to note that market sentiment and activity has improved inall areas of our diverse suite of human capital offerings and that the timingof our recent entry into a specialist segment of contingent recruitment andinto social media recruitment and consulting looks opportune and has created astrong platform for growth across the Group. Moreover, the existing plcinfrastructure is allowing greater operational gearing by providing finance,administration and support at minimal extra cost to our new subsidiaries andexpanded search offices." For further information please contact: Norman Broadbent plc Tel: 020 7484 0000 Pierce Casey/Sue O'Brien/Ben Felton Sanlam Securities Limited Tel: 020 7628 2200 Simon Clements/Virginia Bull/CatherineMiles Notes to Editors Norman Broadbent plc is a leading human capital consultancy. It offers boardand executive search services, leadership consultancy services, interimmanagement, contingent and social media recruitment services. Headquartered inLondon, the group operates globally and has offices in cities across Europe andin Bogota, Dubai, Los Angeles and Singapore. For further information visit www.normanbroadbent.com Chairman's Statement Introduction Following the oversubscribed share placing in November 2012 which raised £742,560, the Group has made significant progress in the development of both ourtwo new complementary businesses - Arcus Global Partners and ConnectingCorporates - and in developing the international Norman Broadbent searchoffices in USA, Singapore and France. In addition the share placing facilitatedthe acquisition of 51 per cent. of Acker Deboeck & Company, the Brussels basedleadership assessment business, since rebranded Norman Broadbent. Much has beenachieved on limited capital, without debt. The online products and flexible recruitment solutions offered by the two newbusinesses have been well received by existing and new clients. The positivesupport provided by the established businesses within the Group has assistedthem in attracting talent and building strong teams in a short period of time. The new brands and the extended international offices are contributingincreasingly positively to Group revenues since the period end. Financial Results The table below summarises the results for the Group. Six months to Six months to Year ended 30 June 30 June 31 Dec 2013 2012 2012 £000's £000's £000's REVENUE 4,010 4,014 7,634 Cost of sale (305) (116) (208) GROSS PROFIT 3,705 3,898 7,426 Operating expenses (4,051) (3,643) (7,133) Other income 125 - - GROUP OPERATING (LOSS)/ PROFIT BEFORE (221) 255 293RESTRUCTURING COSTS Restructuring costs - (189) (331) GROUP OPERATING (LOSS)/PROFIT (221) 66 (38) Net finance cost (16) (16) (35) (Loss)/Profit Before Tax (237) 50 (73) Income tax (21) (7) (42) (Loss)/Profit After Tax (258) 43 (115) Group operating profit was £82,000, before accounting for the costs of new UKand overseas start-up businesses totalling £303,000 (2012: operating profit of£66,000 after restructuring costs of £189,000). Revenue for the six months remained flat at £4.0m, while UK executive searchrevenue declined by 14 per cent. to £2.9m from £3.4m in the six month period to30 June 2012. This decline in UK search revenue, highlighted in the Chairman'sStatement on 25 April 2013 accompanying the 2012 annual results, was primarilydriven by a slow first quarter in the TMT practice, historically a strongcontributor to UK search revenues. Group operating expenses grew by 11 per cent. reflecting the investment in thetwo new subsidiary businesses and the inclusion for the first time of the costsof our new Belgian subsidiary. This is reflected in the consolidated groupheadcount which increased from 60 to 74 during the period, with a further 15hires made since the end of June 2013. In response to the decline in UK searchrevenues in the first quarter of the year, management identified administrativecost savings which resulted in the UK search business reporting an operatingprofit of £207,000 compared with £212,000 in the six months to 30 June 2012.New search consultants in TMT and retail financial services will be joining inthe second half of the year to develop new business within these establishedpractices. The loss per share for the six months to 30 June 2013 was 2.09 pence per sharecompared with earnings per share of 0.40 pence in the comparative period andadjusted loss per share was 1.70 pence compared with earnings per share of 0.89pence in 2012. Financial Position Equity shareholders' funds were £3.0m as at 30 June 2013 (£3.2m as at 31December 2012), with net current assets of £0.95m (£1.1m as at 31 December2012). Cash and cash equivalents at 30 June 2013 stood at £0.60m, down from £1.0m at 31 December 2012 reflecting the investment in the new businesses andtheir start-up losses. The balance on the Group's revolving invoice discountingfacility was £0.75m (£0.97m at 31 December 2012), reflecting a tradereceivables balance of £1.3m (£1.5m at 31 December 2012). The Group continuesto hold no bank debt. Current Trading and Outlook The UK search business performed better in July and August than in the sameperiod last year. Average fee levels have increased by 20 per cent. as theextension of the experienced board practice across executive and non-executiveroles has led to Norman Broadbent's continuing growth in the C-suite searchmarket. The UK leadership consulting business continues to build a strongreputation with new clients for its core products albeit the conversion ofbusiness development into sales has taken longer than expected. The wholly owned overseas search offices in Los Angeles, Paris and Singapore(all start-ups in the last 12 months) should, collectively, contribute modestprofits in the second half of the year. Licenced overseas search has a mixedoutlook; resilient in Spain and Latin America, whilst the Middle East and Italyare both softer. Fortunately all licence income is incremental to the Company.Our acquired leadership assessment business in Belgium is performing well andprovides a good platform for growth into neighbouring countries. Arcus Global Partners, our start-up contingent, executive RPO and talentmanagement offering is achieving expectations. The first half of 2013 was spentbuilding a team of experienced consultants and the company now has a strongorder book of mandated work across its portfolio of products. Although at anearly stage of its development, the business appears to bear the hallmarks of asuccessful, scaleable and exportable business, operating disruptively in alarge marketplace. Connecting Corporates (incorporating Social Media Search and WinningWork), inwhich we hold a controlling stake in partnership with its entrepreneurialfounder, is also achieving expectations and offers a compelling suite ofdigital and traditional enabling solutions to a growing list of clients. It,too, appears to bear the hallmarks of a successful, scaleable and exportablebusiness. We continue to review potential new opportunities in the human capital sectorboth in the UK and overseas and our flexible approach and ability to partnerwith strong entrepreneurs should give us an edge in continuing to grow theGroup in scale. It is encouraging to note that market sentiment and activity has improved inall areas of our diverse suite of human capital offerings and that the timingof our recent entry into a specialist segment of contingent recruitment andinto social media recruitment and consulting looks opportune and has created astrong platform for growth across the Group. Moreover, the existing plcinfrastructure is allowing greater operational gearing by providing finance,administration and support at minimal extra cost to our new subsidiaries andexpanded search offices. The Board is optimistic moving forward. Pierce Casey Executive Chairman CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the six month period ended 30 June 2013 Note Six months Six months Year ended ended 30 ended 30 June June 2013 2012 31 December 2012 (unaudited) (unaudited) (audited) £000 £000 £000 REVENUE 3 4,010 4,014 7,634 Cost of Sales (305) (116) (208) GROSS PROFIT 3,705 3,898 7,426 Operating Expenses (4,051) (3,643) (7,133) Other Income 125 - - GROUP OPERATING (LOSS)/PROFIT (221) 255 293BEFORE RESTRUCTURING COSTS Re-structuring costs 4 - (189) (331) GROUP OPERATING (LOSS)/PROFIT (221) 66 (38) Net finance cost (16) (16) (35) (LOSS)/PROFIT ON ORDINARY (237) 50 (73)ACTIVITIES BEFORE INCOME TAX Income tax expense (21) (7) (42) (LOSS)/PROFIT FOR THE PERIOD (258) 43 (115) OTHER COMPREHENSIVE INCOME Foreign currency translation - - 2differences - foreign operations TOTAL COMPREHENSIVE INCOME (258) 43 (113) (Loss)/Profit attributable to: Owners of the Company (272) 43 (127) Non-controlling interests 14 - 12 (Loss)/Profit for the period (258) 43 (115) Total comprehensive incomeattributable to: Owners of the Company (272) 43 (127) Non-controlling interests 14 - 14 Total comprehensive income for the (258) 43 (113)period (Loss)/earnings per share 6 (2.09)p 0.40p (1.16)p - Basic (2.09)p 0.40p (1.16)p - Diluted Adjusted (loss)/earnings per share 6 (1.70)p 0.89p (0.52)p - Basic (1.70)p 0.89p (0.52)p CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2013 Note As at As at As at 31 December 30 June 30 June 2012 (audited) 2013 2012 (unaudited) (unaudited) £000 £000 £000 Non-Current Assets Intangible assets 1,922 1,810 1,922 Property, plant and equipment 197 114 139 Deferred tax assets 69 69 69 TOTAL NON-CURRENT ASSETS 2,188 1,993 2,130 Current Assets Trade and other receivables 2,314 2,652 2,267 Cash and cash equivalents 596 583 1,009 TOTAL CURRENT ASSETS 2,910 3,235 3,276 TOTAL ASSETS 5,098 5,228 5,406 Current Liabilities Trade and other payables 1,116 1,280 1,075 Deferred consideration - 300 73 Bank overdraft and interest bearing 753 1,079 965loans Corporation tax liability 93 - 72 TOTAL CURRENT LIABILITIES 1,962 2,659 2,185 NET CURRENT ASSETS 948 576 1,091 Non-Current Liabilities Deferred consideration - 181 - Provisions 7 125 - - TOTAL NON-CURRENT LIABILITIES 125 181 - TOTAL LIABILITIES 2,087 2,840 2,185 TOTAL ASSETS LESS TOTAL LIABILITIES 3,011 2,388 3,221 Issued share capital 5,857 5,833 5,857 Share premium account 9,570 8,758 9,572 Retained earnings (12,575) (12,203) (12,353) EQUITY ATTRIBUTABLE TO OWNERS OF THE 2,852 2,388 3,076COMPANY Non-controlling interests 159 - 145 TOTAL EQUITY 3,011 2,388 3,221 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six month period ended 30 June 2013 Attributable to owners of the Company CONSOLIDATED GROUP Share Share Retained Total Non-controlling Total Capital Premium Earnings interests Equity Equity £000 £000 £000 £000 £000 £000 Balance at 1 January 2012 5,833 8,758 (12,297) 2,294 - 2,294 Profit for the period - - 43 43 - 43 Total other comprehensive - - - - - -income Total comprehensive income - - 43 43 - 43for the period Transactions with ownersof the Company, recogniseddirectly in equity: Issue of ordinary shares - - - - - - Credit to equity for share - - 51 51 - 51based payments Total transactions with - - 51 51 - 51owners of the Company,recognised directly inequity Balance at 30 June 2012 5,833 8,758 (12,203) 2,388 - 2,388 Balance at 1 July 2012 5,833 8,758 (12,203) 2,388 - 2,388 (Loss)/Profit for the - - (170) (170) 12 (158)period Total other comprehensive - - - - 2 2income Total comprehensive income - - (170) (170) 14 (156)for the period Transactions with ownersof the Company, recogniseddirectly in equity: Issue of ordinary shares 24 814 - 838 - 838 Credit to equity for share - - 20 20 - 20based payments Acquisition of subsidiary - - - - 131 131with non-controllinginterests Total transactions with 24 814 20 858 131 989owners of the Company,recognised directly inequity Balance at 31 December 5,857 9,572 (12,353) 3,076 145 3,2212012 Balance at 1 January 2013 5,857 9,572 (12,353) 3,076 145 3,221 (Loss)/Profit for the - - (272) (272) 14 (258)period Total other comprehensive - - - - - -income Total comprehensive income - - (272) (272) 14 (258)for the period Transactions with ownersof the Company, recogniseddirectly in equity: Issue of ordinary shares - (2) - (2) - (2) Credit to equity for share - - 50 50 - 50based payments Acquisition of subsidiary - - - - - -with non-controllinginterests 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 CONSOLIDATED STATEMENT OF CASH FLOW For the six month period ended 30 June 2013 Notes Six months Six months Year ended ended 30 ended 30 31 June 2013 June 2012 December (unaudited) (unaudited) 2012 (audited) £000 £000 £000 Net cash used in operating activities (i) (8) (372) (250) Cash flows from investing activitiesand servicing of finance Net finance cost (16) (16) (35) Payments to acquire tangible fixed (102) (24) (92)assets Repayment of deferred consideration (73) - (408) Net cash inflow on acquisition of - - 181subsidiary Net cash used in investing activities (191) (40) (354) Cash flows from financing activities Net cash inflows from equity placing (2) - 727 Repayment of secured loans - (50) (109) (Decrease)/increase in invoice (212) 395 341discounting Net cash from financing activities (214) 345 959 Net (decrease)/increase in cash and (413) (67) 356cash equivalents Net cash and cash equivalents at 1,009 650 650beginning of period Effects of exchange rate changes on - - 3cash balances held in foreigncurrencies Net cash and cash equivalents at end of 596 583 1,009period Analysis of net funds Cash and cash equivalents 596 583 1,009 Borrowings due within one year (753) (1,079) (965) Borrowings due after one year - - - Deferred consideration - (481) (73) Net funds (157) (977) (565) Note (i) Reconciliation of operating profit to Six months Six months Year endednet cash from operating activities ended 30 ended 30 31 June 2013 June 2012 December (unaudited) (unaudited) 2012 (audited) Operating (loss)/profit (221) 66 (38) Depreciation/ impairment of property, 45 41 84plant and equipment Share based payment charge 50 51 71 Increase in trade and other (48) (823) (438)receivables Increase/(decrease) in trade and other 41 300 (165)payables Increase in provisions 7 125 - - Taxation paid - (7) (94) Net cash used in operating activities (8) (372) (250) NOTES TO THE FINACIAL STATEMENTS 1. ACCOUNTING POLICIES 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 2012,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 2013, 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 2013 and areunchanged from those disclosed in the Group's Annual Report for the year ended31 December 2012. The interim financial statements have not been audited. 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% ordinarySearch Ltd Wales search shares Norman Broadbent Overseas England and Executive 100% ordinaryLtd Wales search shares Norman Broadbent Leadership England and Assessment, 100% ordinaryConsulting Ltd (formerly Wales coaching and sharesHuman Asset Development talent mgmt.International Ltd) Arcus Global Partners Ltd England and Contingent 100% ordinary(formerly NBBI Ltd)* Wales Search shares The NB Consultancy Republic of Executive 100% ordinary(Singapore) Pte Ltd Singapore Search shares Norman Broadbent Inc United States Executive 100% ordinary of America Search shares Norman Broadbent SPRL Belgium Executive 51% ordinary(formerly Acker Deboeck and search, sharesCompany) assessment, coaching and talent mgmt. Norman Broadbent (Ireland) Republic of Dormant 100% ordinaryLtd Ireland shares Connecting Corporates Ltd England and Social Media 51% ordinary Wales Search and shares Consulting Bancomm Ltd England and Dormant 100% ordinary Wales shares Substantial Shareholdings: NBS Norman Broadbent SA** Spain Executive 20% ordinary Search shares * The 100% shareholding in this company is owned by Norman Broadbent ExecutiveSearch Ltd, a wholly owned subsidiary of the Company. ** The 20% shareholding in this company is owned by Norman Broadbent OverseasLtd, a wholly owned subsidiary of the Company. 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 ended Executive Overseas Contingent Assessment, Social Unallocated Total30 June 2013 Search Royalties Recruitment Coaching & Media Talent Mgmt. Search & £000 £000 £000 £000 £000 Consulting £000 £000 Revenue 3,149 126 18 573 144 - 4,010 Cost of sales (147) - (1) (154) (3) - (305) Gross profit 3,002 126 17 419 141 - 3,705 Operating expenses (2,936) (48) (215) (481) (174) (157) (4,011) Other operating 125 - - - - - 125income Finance costs (16) - - - - - (16) Depreciation and (39) - (1) - - - (40)amortisation Profit before tax 136 78 (199) (62) (33) (157) (237) Net assets 3,152 - (175) 43 (9) - 3,011 BUSINESS SEGMENTS Six months ended Executive Overseas Contingent Assessment, Social Unallocated Total30 June 2012 Royalties Recruitment Coaching & Media Search Talent Mgmt. Search & £000 £000 £000 £000 Consulting £000 £000 £000 Revenue 3,573 189 - 252 - - 4,014 Cost of sales (84) - - (32) - - (116) Gross profit 3,489 189 - 220 - - 3,898 Operating expenses (3,051) (86) - (313) - (152) (3,602) Other operating - - - - - - -income Re-structuring (189) - - - - - (189)costs Finance costs (16) - - - - - (16) Depreciation and (41) - - - - - (41)amortisation Profit before tax 192 103 - (93) - (152) 50 Net assets 2,497 - - (109) - - 2,388 BUSINESS SEGMENTS Year ended 31 Executive Overseas Contingent Assessment, Social Unallocated TotalDecember 2012 Royalties Recruitment Coaching & Media Search Talent Mgmt. Search & £000 £000 £000 £000 Consulting £000 £000 £000 Revenue 6,673 339 - 586 36 - 7,634 Cost of sales (118) - - (89) (1) - (208) Gross profit 6,555 339 - 497 35 - 7,426 Operating expenses (5,931) (119) - (612) (32) (357) (7,051) Other operating - - - - - - -income Re-structuring (331) - - - - - (331)costs Finance costs (31) - - - - (4) (35) Depreciation and (82) - - - - - (82)amortisation Profit before tax 170 220 - (115) 3 (361) (73) Net assets 3,129 - - 89 3 - 3,221 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 Contingent Assessment, Social Unallocated Totalperiod ended Search Royalties Recruitment Coaching & Media30 June 2013 Talent Search & £000 £000 £000 £000 £000 Mgmt. Consulting £000 £000 Revenue United 2,885 - 18 242 144 - 3,289Kingdom Europe 54 104 - 331 - - 489 Other 210 22 - - - - 232 Total 3,149 126 18 573 144 - 4,010 Gross profit United 2,774 - 17 202 141 - 3,134Kingdom Europe 54 104 - 217 - - 375 Other 174 22 - - - - 196 Total 3,002 126 17 419 141 - 3,705 Profit/(Loss)before tax United 207 - (199) (124) (33) (157) (306)Kingdom Europe (8) 57 - 62 - - 111 Other (63) 21 - - - - (42) Total 136 78 (199) (62) (33) (157) (237) Net assets United 3,292 - (175) (291) (9) - 2,817Kingdom Europe 35 - - 334 - - 369 Other (175) - - - - - (175) Total 3,152 - (175) 43 (9) - 3,011 BUSINESS SEGMENTS Six month Executive Overseas Contingent Assessment, Social Unallocated Totalperiod ended Search Royalties Recruitment Coaching & Media30 June 2012 Talent Search & £000 £000 £000 £000 £000 Mgmt. Consulting £000 £000 Revenue United 3,374 - - 252 - - 3,626Kingdom Europe 136 133 - - - - 269 Other 63 56 - - - - 119 Total 3,573 189 - 252 - - 4,014 Gross profit United 3,292 - - 220 - - 3,512Kingdom Europe 137 133 - - - - 270 Other 60 56 - - - - 116 Total 3,489 189 - 220 - - 3,898 Profit/(loss)before tax United 212 - - (93) - (152) (33)Kingdom Europe 13 72 - - - - 85 Other (33) 31 - - - - (2) Total 192 103 - (93) - (152) 50 Net assets United 2,535 - - (109) - - 2,426Kingdom Europe - - - - - - - Other (38) - - - - - (38) Total 2,497 - - (109) - - 2,388 BUSINESS SEGMENTS Year ended 31 Executive Overseas Contingent Assessment, Social Unallocated TotalDecember 2012 Search Royalties Recruitment Coaching & Media Talent Search & £000 £000 £000 £000 £000 Mgmt. Consulting £000 £000 Revenue United 6,479 - - 471 36 - 6,986Kingdom Europe 148 275 - 114 - - 537 Other 46 64 - 1 - - 111 Total 6,673 339 - 586 36 - 7,634 Gross profit United 6,368 - - 428 35 - 6,831Kingdom Europe 148 275 - 69 - - 492 Other 39 64 - - - - 103 Total 6,555 339 - 497 35 - 7,426 Profit/(loss)before tax United 170 - - (63) 3 (361) (241)Kingdom Europe - 157 - (51) - - 106 Other - 63 - (1) - - 62 Total 170 220 - (115) 3 (361) (73) Net assets United 3,129 - - 89 3 - 3,221Kingdom Total 3,129 - - 89 3 - 3,221 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. RE-STRUCTURING COSTS Re-structuring costs include personnel costs relating to the hiring of newconsultants, exiting of under-performing staff and external recruitmentconsultancy costs relating to the new hires. These items have been highlighted in the consolidated statement ofcomprehensive income because separate disclosure is considered appropriate inunderstanding the underlying performance of the business. Six months Six months Year ended ended 30 ended 30 31 June 2013 June 2012 December 2012 £000 £000 £000 Personnel - 189 331 Consultancy - - - Total - 189 331 5. EQUITY SECURITIES ISSUED During the six month period ended 30 June 2013 no equity securities wereissued. During the six month period ended 30 June 2012 no equity securitieswere issued. Issue of ordinary shares during Six months Six months Year ended 31the period ended 30 June ended 30 June December 2012 2013 2012 (unaudited) (unaudited) (audited) Shares Value Shares Value Shares Value 000's £000 000's £000 000's £000 Issue of shares on acquisition - - - - 319 111 Issue of shares for cash - - - - 2,122 742 Total - - - - 2,441 853 6. 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 ended 30 June ended 30 31 December 2013 June 2012 2012 (unaudited) (unaudited) (audited) (Loss)/profit attributable to £(272,000) £43,000 £(127,000)shareholders Weighted average number of 13,048,686 10,607,801 10,929,676ordinary 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 June 2013 June 2012 December 2012 (unaudited) (unaudited) (audited) (Loss)/profit attributable to shareholders £(272,000) £43,000 £(127,000) Weighted average no. of ordinary shares 13,048,686 10,607,801 10,929,676 - assumed conversion of share options - - - - assumed conversion of warrants - 3,076 - Weighted average number of ordinary shares 13,048,686 10,610,877 10,929,676for 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 June Six months ended Year ended 31 2013 30 June 2012 December 2012 £000 Basic Diluted £000 Basic Diluted £000 Basic Diluted pence pence per pence pence pence pence per share per per per per share share share share share Basicearnings (Loss)/Profit (272) (2.08) (2.08) 43 0.40 0.40 (127) (1.16) (1.16)after tax Adjustment Share based 50 0.38 0.38 51 0.49 0.49 71 0.64 0.64paymentcharge Adjusted (222) (1.70) (1.70) 94 0.89 0.89 (56) (0.52) (0.52)earnings 7. PROVISIONS 8. Six months Year ended Six months ended 30 June 2013 ended 30 31 December June 2012 2012 £000 £000 £000 Balance at beginning of period - - - Provisions made during the period 125 - - Balance at end of period 125 - - Non-current 125 - - Current - - - 125 - - During the period the Company signed a new ten year lease with a five yearbreak 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. The Company received aone-off payment of £250,000 from the previous tenant in satisfaction of variouscosts and liabilities that it inherited with the new lease. The net balance ofthis receipt has been reported within Other Income in the ConsolidatedStatement of Comprehensive Income. 8. RELATED PARTY TRANSACTIONS i. Purchase of services: Six months Six months Year ended ended 30 ended 30 31 June 2013 June 2012 December 2012 £000 £000 £000 Adelaide Capital Limited 52 73 141 Anderson Barrowcliff LLP 8 15 31 Brian Stephens & Company Ltd 11 - 5 NBS Norman Broadbent SA 14 - 8 Total 85 88 185 Adelaide Capital Limited invoiced the Group for the directors' fees of P Casey(£52,000). P Casey is a director of Adelaide Capital Limited. Brian Stephens &Company Ltd invoiced the Group for the directors' fees of B Stephens (£10,000)and business related travel costs of £1,000. B Stephens is a director of BrianStephens & Company Ltd. Taxation and company secretarial services of £3,000 were acquired from AndersonBarrowcliff LLP, an accountancy firm of which R Robinson is a partner. AndersonBarrowcliff also invoiced the Group for R Robinson's director's fees (£5,000). During the period the company incurred fee splits relating to jointly executedoverseas searches (£14,000) from NBS Norman Broadbent SA. The Group owns a 20%stake in NBS Norman Broadbent SA. 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 2013 June 2012 December 2012 £000 £000 £000 NBS Norman Broadbent SA 80 121 253 Total 80 121 253 During the period the Company invoiced NBS Norman Broadbent SA for royaltyincome (£80,000). iii. Period-end payables arising from the Six months Six months Year ended purchases of services: ended 30 ended 30 31 June 2013 June 2012 December 2012 £000 £000 £000 Adelaide Capital Limited 10 12 21 Anderson Barrowcliff LLP 2 6 6 Brian Stephens & Company Ltd 4 - 4 NBS Norman Broadbent SA 14 - 5 Total 30 18 36 The payables to related parties arise from purchase transactions and are dueone month after date of purchase. The payables bear no interest.