PageGroup Regulatory News (PAGE)

7 August 2019

Half Year Results for the Period Ended 30 June 2019

PageGroup plc ("PageGroup"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2019.

HIGHLIGHTS

·; Group operating profit increased +11.4%* to £75.6m, +12.5% in reported rates

·; Increase in fee earner productivity of 2.2%**

·; Conversion rate*** increased to 17.4% (H1 2018: 17.0%)

·; Reduction of 81 (-1.3%) fee earners in H1 2019

·; Strong Balance Sheet with net cash of £81.7m (H1 2018: £87.0m)

·; Interim dividend up 4.9% to 4.30 pence per share, totalling £13.9m

·; Special dividend of 12.73 pence per share, totalling £41.0m

* in constant currency at prior year rates

** gross profit per fee earner

*** operating profit as a percentage of gross profit

Commenting, Kelvin Stagg, Chief Financial Officer, said:

"PageGroup delivered an increase of 9.5%* in gross profit and 11.4%* in operating profit in the first half of 2019, with fee earner productivity increasing 2.2% and the Group's conversion rate rising from 17.0% to 17.4%. This reflects our continued focus on productivity and conversion.

"Fee earner headcount fell by 81 (-1.3%) in the first half, to 6,035, mainly in markets where conditions were more challenging, such as Greater China and the UK. We continued to invest in markets where we saw the greatest growth, such as the US and India. We completed the implementation of our new Global Finance System, with roll-outs in Latin America and Europe during the first half. Our operational support staff headcount increased by 72 (4.3%), the majority of which were temporary, to support these roll-outs.

"We are announcing today an interim dividend of 4.30 pence per share, an increase of 4.9% over last year. In addition, in line with our policy of returning surplus capital to shareholders, we are also pleased to announce a special dividend of 12.73 pence per share (2018: 12.73 pence per share) totalling £41.0m, a fifth consecutive year of special dividends. Taking both dividend payments together, this amounts to a cash return to shareholders of £54.9m, payable on 9 October. Together with the 2018 final dividend paid in June of £29.0m, this represents a total of £83.9m returned to shareholders in 2019, or 26.03 pence per share.

"We are pleased with our first half performance, however we remain mindful of challenging macro-economic conditions seen in a number of our regions. We will continue to focus on driving profitable growth, while continuing our strategic investments towards our Vision of 10,000 headcount, £1bn of gross profit and £200m - £250m of operating profit."

PageGroup will host a conference call, with on-line slide presentation, for analysts and investors at 8.30am on 7 August 2019, the details of which are below.

Link:

https://www.investis-live.com/pagegroup/5d35b72e9add6d1100148e3b/usas 

Please use the following dial-in number to join the conference:

Please quote participant access code 41 06 07 to gain access to the call.

A presentation and recording to accompany the call will be posted on the PageGroup website during the course of the morning of 7 August 2019 at:

http://www.page.com/investors/investor-library.aspx

Enquiries:

INTERIM MANAGEMENT REPORT

GROUP RESULTS

The Group's revenue for the six months ended 30 June 2019 increased 9.2% to £820.5m (2018: £751.6m) and gross profit increased 9.5% to £433.5m (2018: £396.0m). In constant currencies, the Group's revenue and gross profit both increased by 9.5%. The Group's revenue mix between permanent and temporary placements was 41:59 (2018: 41:59) and for gross profit was 76:24 (2018: 77:23).

Revenue from temporary placements comprises the salaries of those placed, together with the margin charged. Overall, pricing has remained relatively stable across all regions. Fee earner productivity increased by 2.2%, reflecting our continued focus on productivity and conversion, following our COO office appointment last year.

Fee earner headcount fell by 81 (-1.3%) in the first half, to 6,035, mainly in markets where conditions were more challenging, such as Greater China and the UK. We continued to invest in markets where we saw the greatest growth, such as the US and India. We completed the implementation of our new Global Finance System, with roll-outs in Latin America and Europe during the first half. Our operational support staff headcount increased by 72 (4.3%), the majority of which were temporary, to support these roll-outs. Total headcount at the end of the first half was 7,763.

The Group's organic growth model and profit-based team bonus ensures costs remain tightly controlled. 79% of first half costs were employee related, including salaries, bonuses, share-based long-term incentives, and training and relocation costs.

In total, administrative expenses in the first half increased 8.9% to £357.9m (2018: £328.8m), driven by increases in headcount relative to H1 2018. In constant currency administrative expenses were up 9.1% and operating profit increased 11.4% to £75.6m (2018: £67.2m), an increase of 12.5% at reported rates.

The Group views its conversion rate, which represents the ratio of operating profit to gross profit, as a key metric for the business. This conversion rate is affected by macro-economic conditions, the level of investment, particularly in fee earners and the degree of spare capacity within the business. The Group's conversion rate of 17.4% (2018:17.0%) was an improvement on H1 2018, driven by a strong performance in EMEA, partially offset by more challenging trading conditions in Asia Pacific.

FOREIGN EXCHANGE

Movements in foreign exchange had a negligible impact on the Group's results. Overall, foreign exchange movements impacted the Group's gross profit and operating profit by less than £1m.

IFRS 16 - LEASES AND OTHER ITEMS

The Group is reporting under the new accounting standard, IFRS 16 Leases, for the first time. Under IFRS 16, the straight line rental expense for the first half of £20.4m has been replaced with a depreciation charge in respect of the right of use assets of £19.6m. This has resulted in an increase to EBITDA of £20.4m and an increase to EBIT of £0.8m. An interest charge in respect of the lease liabilities of £1.1m has also been recognised resulting in a decrease in profit before tax of £0.3m.

Underlying interest received and interest paid was consistent with 2018. The charge for taxation at the half year was 27.5% (2018: 26.5%). It is based on the full year forecast tax rate, allowing for prior year items arising from tax returns in the half year to 30 June.

Basic earnings per share for the six months ended 30 June 2019 was 16.8p, an increase of 8.4% and diluted earnings per share was also 16.8p, an increase of 9.1% (2018: basic earnings per share 15.5p; diluted earnings per share 15.4p).

CASH FLOW

The Group started the year with net cash of £97.7m. In the first half, £63.2m was generated from operations after funding an increase in working capital of £45.8m, mainly due to growth in our temporary and contracting business, which has a higher working capital requirement. Tax paid was £20.8m and net capital expenditure was £13.4m. During the first half, £3.5m was received from exercises of share options (2018: £19.1m). No shares were purchased in the Employee Benefit Trust to hedge exposures under share-based awards (2018: £9.9m) and dividends of £29.0m were paid to shareholders. As a result, the Group had net cash of £81.7m at 30 June 2019 (30 June 2018: £87.0m).

DIVIDENDS AND SHARE REPURCHASES

It is the Directors' intention to continue to finance the activities and development of the Group from retained earnings and to operate while maintaining a strong balance sheet position.

The Group's first use of cash is to satisfy operational and investment requirements, as well to hedge its liabilities under the Group's share plans. The level of cash required for this purpose will vary depending upon the revenue mix of geographies, permanent and temporary recruitment, and point in the economic cycle.

Our second use of cash is to make returns to shareholders by way of an ordinary dividend. Our policy is to grow the ordinary dividend over the course of the economic cycle in a way that we believe we can sustain the level of ordinary dividend payment during downturns, as well as increasing it during more prosperous times.

Cash generated in excess of these first two priorities will be returned to shareholders through supplementary returns, using special dividends and/or share buybacks.

The Board has announced an interim dividend of 4.30 pence per share, an increase of 4.9% over last year. In addition, in line with its policy of returning surplus capital to shareholders, the Group is pleased to announce today a special dividend of 12.73 pence per share or £41.0m (2018: 12.73 pence per share), making it a fifth consecutive year of special dividends. Taking both dividend payments together, this amounts to a cash return to shareholders of £54.9m. Together with the 2018 final dividend paid in June of £29.0m, this represents a total of £83.9m returned to shareholders in 2019.

This special dividend will be paid, as in previous years, at the same time as the interim dividend on 9 October 2019 to shareholders on the register as at 6 September 2019.

During the first half, no purchases of shares into the Employee Benefit Trust to hedge exposures under share-based awards were made (2018: £9.9m).

All growth rates given below are in constant currency unless otherwise stated.

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

EMEA is the Group's largest region, contributing 49% of Group first half gross profit. In reported rates, revenue in the region increased by 9.7% to £427.7m (2018: £389.7m) and gross profit increased 9.3% to £213.1m (2018: £194.9m). In constant currency, revenue increased 10.6% on the first half of 2018 and gross profit increased by 10.2%.

The EMEA region performed strongly, with Michael Page and Page Personnel growing gross profit 9% and 11%, respectively. France, which now represents around a third of the region and 16% of the Group, grew gross profit by 7%. In Germany, one of our Large, High Potential markets, we grew 24%, with a standout performance from our Technology focused Interim business, which was up 37%. Southern Europe grew 9%, with Italy up 12% and Spain up 6%, however conditions became more challenging as the second quarter drew to a close. Benelux grew 12%, with Belgium and the Netherlands up 13% and 12% respectively. The Middle East and Africa grew 7%, driven mainly by growth in the UAE of 11%.

The 11.4% increase in operating profit for the first half of 2019 to £45.6m (2018: £40.9m) and improvement in the conversion rate to 21.4% (2019: 21.0%) was driven by a combination of improved fee earner productivity and generally favourable macro-economic conditions. Headcount across the region was broadly flat in the first half at 3,316 at the end of June 2019 (3,299 at 31 December 2018).

ASIA PACIFIC

In Asia Pacific, representing 19% of Group first half gross profit, revenue increased 7.5% in reported rates to £135.0m (2018: £125.6m), and gross profit increased 10.4% to £81.8m (2018: £74.1m). In constant currency, revenue increased 6.7% in the first half and gross profit increased by 9.0%.

Conditions in Asia Pacific in the first half were challenging due to the trade tariff uncertainty in Greater China, which overall grew gross profit 3%. South East Asia, another of the Group's Large, High Potential markets grew 9%. However, we saw more challenging conditions in Singapore during the second quarter, impacted by contagion from trade tariff uncertainty. Elsewhere in the region we saw standout performances from India and Japan, which grew 50% and 22% respectively. Australia was up 8%, driven by our Page Personnel business.

Reflecting these more challenging conditions in the region, particularly in Greater China, alongside our year on year investment in fee earners in South East Asia, India and Japan, our conversion rate fell from 12.1% to 10.8%. Headcount across the region increased by 28 (1.6%) to 1,737 at the end of June 2019 (1,709 at 31 December 2018), with investments in India and Japan offset by a reduction in our fee earner headcount in Greater China.

UNITED KINGDOM

In the UK, representing 16% of Group first half gross profit, revenue increased 1.5% to £157.4m (2018: £155.0m), but gross profit declined 0.3% to £69.4m (2018: £69.7m), with Brexit related uncertainty continuing to impact decision-making from clients and candidates at the more senior levels of the market. Page Personnel, which has a higher proportion of temporary recruitment, grew 9%, while Michael Page, which is focused on more senior candidates, declined 3%.

Operating profit increased by 19.6% to £12.5m (2018: £10.5m), with the conversion rate increasing to 18.0% (2018: 15.0%). Given the more challenging trading conditions, we reduced our fee earner headcount to increase our focus on productivity and therefore improve our conversion rate. As we have highlighted previously, the UK takes a higher proportion of the Group's share scheme charges, as the majority of the Group's senior management are based in the UK. The charge for H1 2019 was less than H1 2018, which contributed to the conversion rate improvement.

Headcount decreased by 68 (4.7%) during the first half of 2019 to 1,368 at the end of June 2019 (1,436 at 31 December 2018).

THE AMERICAS

In the Americas, representing 16% of Group first half gross profit, revenue increased 23.6% in reported rates to £100.5m (2018: £81.3m), while gross profit increased 20.7% to £69.2m (2018: £57.3m). In constant currency, revenue increased by 23.4% and gross profit increased by 19.6%.

North America grew gross profit 20% overall, with growth of 23% in the US offset by an 8% decline in Canada. In the US, we saw particularly strong performances from our offices outside of New York, with notable results from our offices in Boston, Chicago, Houston and Los Angeles.

In Latin America, we increased fee earner headcount by 10% year-on-year and grew gross profit 19%. This investment was spread across the region, including the four countries outside of Brazil and Mexico, being Argentina, Chile, Colombia and Peru, where we now have a total headcount of over 300 and grew 14%, collectively. Elsewhere, Mexico, our largest business in Latin America, grew 31% and Brazil grew 14%.

Headcount in the Americas was up 14 (1.1%) in the first half, to 1,342 at the end of June 2019 (1,328 at 31 December 2018). Operating profit increased by 26.8% to £8.7m (2018: £6.8m), with an increase in the conversion rate to 12.5% (2018: 11.9%), due primarily to the increase in productivity.

KEY PERFORMANCE INDICATORS ("KPIs")

We measure our progress against our strategic objectives using the following key performance indicators:

The source of data and calculation methods year-on-year are on a consistent basis. The movements in KPIs are in line with expectations. Disclosure for GHG emissions and People KPIs is provided annually.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Group's strategy are subject to a number of risks. The main risks that PageGroup believes could potentially impact the Group's operating and financial performance for the remainder of the financial year remain those as set out in the Annual Report and Accounts for the year ending 31 December 2018 on pages 31 to 35.

There have been no changes to these risk categories in the first half to 30 June 2019. However, there remains a degree of uncertainty in the UK as a result of Brexit, Greater China due to trade tariff uncertainty and slower economies in parts of continental Europe.

We have a proven track record of being able to manage our headcount and costs effectively throughout the economic cycle and it should be noted that the UK is now only 16% of the Group, but a more resilient market due to its size and maturity. Whilst some of our other markets are also more challenging, we expect them to remain positive. In light of these mixed trading conditions, we will continue to focus on activity levels, adjusting headcount during the second half to react to market conditions. As always, we remain focused on driving profitable growth, whilst remaining able to respond quickly and effectively to any changes in market conditions.

TREASURY MANAGEMENT, BANK FACILITIES AND CURRENCY RISK

The Group operates multi-currency cash concentration and notional cash pools, and an interest enhancement facility. The Eurozone subsidiaries and the UK-based Group Treasury subsidiary participate in the cash concentration arrangement, the Group Treasury subsidiary retains the notional cash pool and the Asia Pacific subsidiaries operate the interest enhancement facility. The structures facilitate interest compensation of cash whilst supporting working capital requirements.

PageGroup maintains a Confidential Invoice Facility with HSBC whereby the Group has the option to discount receivables in order to advance cash. The Group also has a Revolving Credit Facility with BBVA, with a total drawable amount of £30m. Neither of these facilities were in use as at 30 June. These facilities are only used on an ad hoc basis to fund any major Group GBP cash outflows.

The main functional currencies of the Group are Sterling, Euro, Chinese Renminbi, US Dollar, Singapore Dollar, Hong Kong Dollar and Australian Dollar. The Group does not have material transactional currency exposures. The Group is exposed to foreign currency translation differences in accounting for its overseas operations. The Group policy is not to hedge translation exposures.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies, which differ from the Group's reporting currency, it may use short-dated foreign exchange swap derivative financial instruments to manage the currency and interest rate exposure that arises on these loans. The Group had entered into hedges to cover its investment in foreign entities in the US and Canada.

GOING CONCERN

The Board has undertaken a recent and thorough review of the Group's forecasts and associated risks and sensitivities. Despite the uncertainty in the economy and its inherent risk and impact on the business, the Board has concluded, given the level of cash in the business and Group borrowing facilities, the geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, that the Group has adequate resources to continue in operational existence for the foreseeable future, being a period of at least 12 months from the date of this announcement.

CAUTIONARY STATEMENT

This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose. This IMR contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

This IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters that are significant to PageGroup plc and its subsidiary undertakings when viewed as a whole.

Page House

The Bourne Business Park

1 Dashwood Lang Road

Addlestone

Weybridge

Surrey

KT15 2QW

By order of the Board,

INDEPENDENT REVIEW REPORT TO PAGEGROUP PLC

Introduction

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 2019 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 statement of cash flows and the related notes 1 to 12. 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 guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our 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 Guidance 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 enquiries, 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 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 2019 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

London

6 August 2019Condensed Consolidated Income Statement

For the six months ended 30 June 2019

The above results all relate to continuing operations

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2019

Condensed Consolidated Balance Sheet

As at 30 June 2019

Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2019

Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2019

Notes to the condensed set of interim results

For the six months ended 30 June 2019

1. General information

The information for the year ended 31 December 2018 does not constitute statutory accounts as defined in section 435 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.

The unaudited interim condensed consolidated financial statements of PageGroup plc and its subsidiaries (collectively, the Group) for the six months ended 30 June 2019 were authorised for issue in accordance with a resolution of the directors on 6 August 2019.

2. Accounting policies

Basis of preparation

The unaudited interim condensed consolidated financial statements for the six months ended 30 June 2019 have been prepared in accordance with IAS 34 'Interim financial reporting' and with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

The unaudited interim condensed consolidated financial statements do not constitute the Group's statutory financial statements. The Group's most recent statutory financial statements, which comprise the annual report and audited financial statements for the year ended 31 December 2018, were approved by the directors on 5 March 2019. The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2018, which have been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union.

During the period the Group adopted 'IFRS 16 - Leases' with an explanation of the impact on these financial statements provided below. The Group also adopted IFRIC Interpretation 23 - Uncertainty over Income Tax Treatment. All other accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2018.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the interim management report. The interim management report also includes a summary of the Group's financial position, its cash flows and its borrowing facilities.

The directors believe the Group is well placed to manage its business risks successfully. 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 committed facilities.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly financial report.

New accounting standards, interpretations and amendments adopted by the Group

As at 1 January 2019 the Group adopted the new accounting standard IFRS 16 - Leases. The impact this has had on these financial statements is detailed below.

The Group also adopted IFRIC Interpretation 23 - Uncertainty over Income Tax Treatment. The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 Income Taxes. The adoption of IFRIC 23 did not have a material impact on the Group's results.

The Group applies judgement in identifying uncertainties over income tax treatments. Since the Group operates in a complex multinational environment, it assessed whether the Interpretation had an impact on its consolidated financial statements. The Company's and the subsidiaries' tax filings in different jurisdictions include deductions related to transfer pricing and the taxation authorities may challenge those tax treatments. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

a) Adoption of IFRS 16 Leases

IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. A lessee can choose to apply the standard using either a full retrospective approach or a modified retrospective approach.

The Group adopted IFRS 16 using the modified retrospective method of adoption, with the date of initial application of 1 January 2019. Under this method, the standard is applied retrospectively, with the cumulative effect of initially applying the standard recognised at the date of initial application. The Group elected to use the practical expedient on transition allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application. The Group also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option ('short-term leases'), and lease contracts for which the underlying asset is of low value ('low-value assets').

The adoption under the Modified Retrospective approach is a combination of both the Modified (a) and Modified (b) method, depending on the specific lease. The application of the two methods is set out below:

·; Modified (a) method - an adjustment to reserves is made on transition. The lease liability is calculated on a retrospective basis and a discount rate at the date of initial application has to be used. A full restatement of comparatives is not necessary.

·; Modified (b) method - an adjustment to reserves is made on transition. The present value of the future lease payments is equal to the lease liability. A full restatement of comparatives is not necessary.

Impact on the Condensed Consolidated Statement of Financial Position (increase/(decrease)) as at 1 January 2019

b) Nature of the effect of adoption of IFRS 16

The Group recognised right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases and leases of low-value assets. The £131.5m right of use asset recognised on transition related to Property leases for offices rented (£115.0m), Motor Vehicles of (£15.9m) and Other Assets of (£0.6m). The right-of-use assets for most leases were recognised based on the carrying amount as if the standard had always been applied, apart from the use of the incremental borrowing rate at the date of initial application. The right-of-use assets were recognised based on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments previously recognised. Lease liabilities were recognised based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application.

c) Amounts recognised in the Condensed Consolidated Statement of Financial Position and Condensed Consolidated Income Statement

Set out below, are the carrying amounts of the Group's right-of-use assets and lease liabilities and the movements during the period:

Condensed Consolidated Statement of Financial Position