Rbg Holdings Regulatory News (RBGP)

25 September 2019

RBG Holdings plc (formerly Rosenblatt Group plc)

("Rosenblatt" or the "Group" or the "Company")

Unaudited Interim Results for the period ended 30 June 2019

RBG Holdings plc (AIM:RBGP), the professional services group (formerly Rosenblatt Group plc), is pleased to announce its unaudited results for the six months ended 30 June 2019.

Financial Highlights:

* Adjusted EBITDA in 2018 is defined as earnings before interest, tax, share-based payment expense, non-operating exceptional IPO costs, depreciation and amortisation. From 2019, EBITDA is defined as earnings before Interest, Tax, Depreciation and Amortisation

** Adjusted profit before tax is defined as earnings before tax, share-based payment expense, and non-operating exceptional IPO costs in 2018

*** To provide a relative comparison on trading, we have taken the two months of trading in 2018 following the IPO (May and June) and pro-rated for the half year

Operational Highlights:

Operational performance

Litigation Finance

M&A / Name Change

Nicola Foulston, CEO, RBG Holdings plc, commented: "The first six months have seen financial and operational progress, in what has been a challenging economic environment. We continue to see double-digit growth in our revenue, and importantly, we are maintaining high net margins on the work we do. In September, we increased the areas in which we can support our clients with the launch of our new White Collar Fraud and Financial Crime division.

"We continue to implement the strategy outlined at the time of our IPO, including growing our litigation finance arm and pursuing M&A opportunities. We have a very prudent approach to litigation finance, including adopting a conservative accounting methodology. In addition, we de-risk our investments by selling on participation rights in the case to third parties which also generates revenue. We have reported the first of such sales today. 

"Earlier this month we acquired Convex, a specialist sell-side corporate finance boutique. The acquisition was in line with our approach to M&A. It helps diversify our revenue beyond legal services and creates the opportunity for cross-referrals of business.

"It is important to note that our growth prospects are not just dependant on litigation finance and M&A. We can generate traditional legal service revenues from contentious work at attractive margins. Looking ahead, we are excited by the prospects of the business, especially as the market improves, and as we grow and broaden the professional services, we can provide to clients."

Enquiries:

About RBG Holdings plc

RBG Holdings plc is a professional services group, which includes one of the UK's leading law firms, Rosenblatt Limited, which is a leader in dispute resolution.

Rosenblatt Limited provides a range of legal services to its diversified client base, which includes companies, banks, entrepreneurs and individuals. Complementing this is the Company's increasingly international footprint, advising on complex cross-jurisdictional matters. Rosenblatt Limited's practice areas include dispute resolution, corporate, banking and finance, insolvency and financial restructuring, construction and projects, employment, financial services, IP/technology/media, real estate, regulatory and tax resolution. The Group also provides litigation finance in selected cases through a separate arm.

The Group also owns Convex Capital Limited, a specialist sell-side corporate finance boutique, based in Manchester, UK. Convex is entirely focussed on helping companies, particularly owner-managed and entrepreneurial businesses, realise their value through sales to large corporates. Convex identifies and proactively targets firms that it believes represent attractive acquisition opportunities.

Chief Executive's Statement

Overview

Overall the Group is performing well and delivering year on year growth at high net margins in line with our strategy. The Group's financial year is typically second-half weighted, and it is expected that marginally more revenue will be recognised in the second half of the year, as is traditionally the case.

Revenue for the period was £10.2 million (2018 adjusted: £9.13 million***) with gross margins of 62%. This is an exceptional performance when you consider revenue also grew in 2018.

EBITDA grew to £3.85 million (2018 adjusted: £3.06million***), with EBITDA margins of 37.5% that are above the high margins we aim to deliver. We target margins of around 35% or more.

The Group has a strong balance sheet with net assets of £35.3 million, cash of £8.7 million and no debt. Our balance sheet will support our growth plans, including acquisitions, continued investment in litigation finance opportunities, and the dividend.

Divisional performance

Our main practice areas, which are focused on contentious law, namely Dispute Resolution and Employment, have performed well in the current market. Revenue from Dispute Resolution in the period was £6.3 million with an additional £1.4 million of contingent work not yet recognised. This was compared to £6.7 million *** and £0.28 million of contingent work in 2018. Dispute Resolution is the most significant contributor to the total revenue produced by the Group, representing 62% of Group revenue, or 76% excluding the DBA litigation investment sale.

In line with our expectations and as previously highlighted, the Corporate and Real Estate divisions, which are focused on commercial transactions, have been impacted by the uncertain economic environment. The divisions have therefore experienced more difficult trading with revenues down 27% on 2018***. However, there is a good pipeline of new business. The Board is confident that once the market improves, these divisions will contribute more to the Group.

Post the period end, we launched a new White Collar Fraud and Financial Crime division. The new division will be headed by a recently appointed partner, Manraj Somal. The division will provide advice and support for individuals and companies dealing with compliance, investigations (internal and external), defending prosecutions or helping clients who are the victims of financial crime. Manraj has been tasked with building the new division, including recruiting staff and working closely with other Rosenblatt divisions and practice areas. Manraj joined Rosenblatt from KPMG LLP, where he was UK Head of Corporate Crime Legal.

The new division will be an addition to Rosenblatt's internationally renowned Dispute Resolution practice. The division will increase the areas in which Rosenblatt can support its clients. Financial crime is an increasing threat driven by the growth of cybercrimes such as identity theft and phishing, as well as more traditional forms of financial crime such as money laundering and fraud.

*** To provide a relative comparison on trading, we have taken the two months of trading in 2018 following the IPO (May and June) and pro-rated for the half year

Litigation Finance

Litigation Finance represents an incremental opportunity for us to monetise our case flow and to diversify our income streams. It allows us to retain the margin that would otherwise be paid to a third-party funder, increasing the number of cases we can take on, but also creates a revenue opportunity in terms of our ability to sell participation rights in the cases we invest in. This is in line with our strategy to de-risk our investments.

We are pleased with the progress in Litigation Finance. During the period, we have invested £1.5 million in external third-party costs across four litigation investments. We have also completed the first DBA sale. The sale of a 4.7% participation right has contributed £2 million to revenue. Currently, the Group has four cases in progress and three under consideration. Case duration is hard to predict, but the returns on investment are high.

In recent months, the litigation funding sector and its accounting practices have come under scrutiny. Our approach is conservative, considered and results from our long-standing expertise in litigation. One of our core principles is that we only finance cases where we run the litigation and have an intimate knowledge of the case. We have also adopted a very conservative approach within the requirements of the accounting standards. Put simply, we have only accounted for realised gains. We have judged the fair value of investments, to be equal to cost. We stated our intention to follow this approach in April 2019 on the publication of our final results.

We have taken this approach for several reasons. Litigation investments are often complex and unpredictable, requiring a solid understanding of the judiciary in each jurisdiction as well as excellent risk management capabilities. Also, such investments come with contingent liabilities that need to be carefully managed and fully understood. It is not possible to forecast the probability of success, and this probability has no precedent to predict the value fairly or with certainty. While we sell participation rights in the investment asset, in the Company's view, this is not a fair indication of the carrying value of the whole investment while the outcome of the litigation remains uncertain.

We believe successful management of litigation finance requires a team with strong legal capabilities and decades of experience of the judiciary. Furthermore, decisions on making investments need strong commercial principles, the ability to approach cases innovatively and the option to de-risk them.

Rosenblatt has all these requisite skills and a track record of minimising financial risk. The Group has more than 30 years of experience in undertaking litigation on behalf of clients, and within the last ten years, some cases have been on a risk basis. In these cases, Rosenblatt Limited conducted them based on either a Conditional Fee Arrangement, providing time for free, or at partial cost recovery. Before decided to undertake work on a contingent basis, Rosenblatt Limited follows a set of core principles:

Our business, and growth prospects are not just dependant on litigation finance or working at risk. Given our business model, we are able to generate traditional legal service revenues at attractive margins from contentious law. This is in the event the case dynamics or risk profile do not meet our selective criteria for investment. We have a diversified legal offering, including services across a range of disciplines. Our litigation practice also involves defence work. In these cases, there is no contingent fee element and we are paid by clients for the work we do as the case proceeds.

M&A

On 16 September 2019, we announced the acquisition of Convex, a specialist sell-side M&A corporate finance boutique based in Manchester, UK. The purchase is in line with the Group's M&A strategy. This strategy aims to diversify the Group beyond legal services, focusing on high-margin professional services companies like Convex, which will also create opportunities for the cross-referral of business.

Convex is entirely focussed on helping companies, particularly owner-managed and entrepreneurial businesses, realise their value through sales to large corporates. Convex identifies and proactively targets firms that it believes represent attractive acquisition opportunities.

The Board expects the transaction to be immediately and materially earnings and value-enhancing for the Group. For the financial year ended[1] 30 June 2019, Convex generated revenues of £8.7 million and profit before tax of £4.3 million. As of 30 June 2019, Convex had net assets of £3.7 million and no net debt. Convex was owned by its directors. All directors and employees of Convex are remaining with the business.

Like Rosenblatt, Convex is an entrepreneurial, high-margin and cash generative business in the professional services sector, with a strong network of clients and partners across the UK and Europe. Convex was established in 2011 by Chairman, Mike Driver. It has completed over £1 billion in transactions over the last four years and completed 13 deals in the last year alone, with EBITDA margins of more than 50 per cent.

The acquisition of Convex is expected to help generate a regular flow of fee-based work for Rosenblatt's corporate division, which is focused on commercial transactions. The Group believes that by working closely together, there will be an opportunity to cross-sell services to the client bases of both companies.

Rosenblatt also intends to use Convex's Manchester base to create a new regional business hub. The Group will market its expanded professional services offering from the hub, which will also create the opportunity for further cost savings on back-office functions.

The acquisition has been structured in accordance with the Board's M&A strategy. This strategy means that the majority of the consideration is to be paid in shares, with a maximum of 40% to be paid in cash. A significant proportion of the consideration is deferred, to lock in the new business and the talent being acquired. This approach ensures the acquisition value is protected, and that the management of Convex are appropriately incentivised to deliver returns for Rosenblatt shareholders as well as themselves.

The total consideration for the acquisition, assuming all earn-out and deferred consideration payments are made, is £22 million. The consideration is structured as follows:

Key management and employees of Convex have agreed to a long-term lock-in for the Group's shares and agreed to non-compete clauses. The Initial Consideration Shares and the Deferred Consideration Shares will be subject to a lock-in of three years from their respective issuance dates. Management and employees of Convex will also join the Rosenblatt performance bonus scheme to ensure close alignment with the interests of shareholders.

We continue to see many other M&A opportunities in the professional services sector. We are committed to pursuing the right opportunities, which meet our investment criteria and provide shareholders with an appropriate return on investment.

Dividend

The Board has a progressive dividend policy. It expects to pay out at least 60 per cent of retained earnings in any financial year by way of dividend. The Company will pay an interim dividend for the six months to 30 June 2019 of 2p per share. This sum will be paid to shareholders on the register as at 4 October 2019.

Furthermore, as a result of opportunities in Litigation Finance, if successful, the Board may pay special dividends in addition to the interim and final dividends. Due to the unpredictable nature of this type of work, it is not possible to forecast when cash from a successful case will be received. If appropriate, special dividends will be announced at the time of the Group's half year and final results.

Board Changes and personnel

The Board has continued to strengthen. Robert Parker was named as permanent CFO in January 2019 after a successful period as interim since August of last year. Also, in January 2019, Marianne Ismail joined the Board as a Non-Executive Director. She is a highly experienced director with extensive experience in fund management.

Since the IPO, we have been able to retain and attract new talent to the business to support our growth plans. Our entrepreneurial culture and approach to remuneration have proved popular. Equity ownership for all fee-earners is both a crucial part of the Company's culture and attractive to potential recruits from major players in the legal sector.

We are proud of the fact that our revenue per fee earner is £441,000 per annum. This is among the highest of our listed peers and consistent with the levels seen in Magic Circle Firms. Recruits are expected to deliver three times their cost of employment.

We remain encouraged by the enhanced levels of productivity and focus across the Group since the IPO.

Name Change

To reflect the evolving nature of the Group from one which was primarily a provider of legal services, to a broader supplier of professional services, the Board has changed the name of the Company to RBG Holdings plc. RBG Holdings plc is comprised of a number of subsidiaries including the law firm Rosenblatt Limited (acquired at the time of IPO), Convex Capital Limited, and the Group's litigation finance arm.

Outlook

The Group has traded well since the beginning of the year in difficult market circumstances. We have been pleased with the progress that has continued to be made. Progress is both in terms of the trading of the core business and implementation of the Board's strategy, especially in litigation finance. We are targeting further participation right realisations however, the exact timing of these will depend on several factors. Litigation finance is a long-term investment, and we have no control on when the cases will complete,

The overall outlook for the broader legal sector is mixed. This outlook is due to the uncertain economic environment. However, we believe that there is an increasing demand for litigation services and the finance to support such services which provide significant opportunities for the Group.

We are encouraged by the sales of our litigation finance investments so far, and the growth of the legal business. We have invested in key hires to drive our core business and have expanded into new areas identified at the float, including White Collar Fraud and Financial Crime. Our approach to remuneration, which creates significant equity participation for fee-earners, is proving attractive in terms of recruitment, and importantly aligns employees' interests with that of shareholders.

We are confident about the outcome for the rest of the year. The Group's financial year is typically second-half weighted and it is expected, as is traditional, that marginally more revenue will be recognised in the second half.

Nicola Foulston

Chief Executive Officer

RBG Holdings plc

25 September 2019

Chief Financial Officer's Review

Revenue for the six months to 30 June 2019 was £10.2 million (2018: £ 9.13 million***), an increase of 11.7% year-on-year, which includes £2 million of DBA income during the period. Advisory activity services have remained strong in difficult environments, Corporate and Real Estate activity was down significantly 27%*** on the comparative period due to uncertainty caused by Brexit impacting business confidence.

EBITDA* for the period was £3.84 million (2018: £ 3.06 million***) representing a healthy margin of 37.5%.

Operating costs were £6.94 million (2018: £ 6.15 million***), including a £1 million increase in personnel costs, the majority of which arose from new recruitment and PLC management costs.

The profit before tax** for the period is £3.2 million (2018: £2.85 million***, which excludes £1.0 million of costs related to the IPO). This has resulted in a 12.3% growth against adjusted profit through continuing tight control of Group operating expenses as the business continues to expand.

Profit after tax of £2.56 million is 25% of revenue for the period.(2018: £2.28m***)

The average number of employees during the period was 75, of which five were Directors. Personnel costs were £5.2 million (2018: £4.1 million***).

Balance sheet, cash flow and financing

The Group has a balance sheet with net assets of £35.3 million at 30 June 2019 of which cash and cash equivalents was £8.7 million and investments in Litigation Investments was £1.86 million.

Collection of debts and the lock up of work in progress ("WIP") remains a key focus for the Group, with total lock up (Debtor and WIP days) being 134 days at the end of the period. This will be a continued focus in the second half of the year.

Robert Parker

Chief Financial Officer

RBG Holdings plc

25 September 2019

* Adjusted EBITDA in 2018 is defined as earnings before interest, tax, share-based payment expense, non-operating exceptional IPO costs, depreciation and amortisation. From 2019, EBITDA is defined as earnings before Interest, Tax, Depreciation and Amortisation

 ** Adjusted profit before tax is defined as earnings before tax, share-based payment expense, and non-operating exceptional IPO costs in 2018

*** To provide a relative comparison on trading, we have taken the two months of trading in 2018 following the IPO (May and June) and pro-rated for the half year

Unaudited consolidated statement of comprehensive income for the period ended 30 June 2019

Unaudited consolidated statement of financial position as at 30 June 2019

The interim statements were approved by the Board of Directors and authorised for issue on 24 September 2019.

Unaudited consolidated statement of cash flows for the period ended 30 June 2019

Unaudited consolidated statement of changes in equity for period ended 30 June 2019

Unaudited notes to the financial statements for the period ended 30 June 2019

RBG Holdings plc (formerly Rosenblatt Group plc) is a public limited company domiciled in the United Kingdom and its registered office is 9-13 St Andrew Street, London, EC4A 3AF. The Company was incorporated on 6th February 2018, shares in the company were admitted to trading on AIM on 8th May 2018 and it commenced trading on this date.

The principal activity of the Group is the provision of legal and professional services, including management and financing of litigation projects.

The condensed consolidated financial statements of the Group, which have been prepared for the period from 1 January 2019 to 30 June 2019, do not constitute statutory accounts for the period and should be read in conjunction with the Group's annual consolidated financial statements as of 31 December 2018. The comparatives relate to the period from incorporation on 6th February 2018 to 30 June 2018.

The consolidated financial statements have not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

The principal accounting policies adopted in the preparation of the unaudited consolidated financial statements are set out in Note 2. The policies have been consistently applied to the periods presented, unless otherwise stated.

The unaudited consolidated financial statements of the Group have been prepared in accordance with IFRS as adopted by the European Union and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The preparation of financial statements in compliance with IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies. The areas where significant judgments and estimates have been made in preparing the financial statements and their effect are disclosed in Note 3.

Going concern

The Group financial statements are prepared on a going concern basis as the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. 

Changes in accounting policies

a) New standards, interpretations and amendments effective from 1 January 2019

The Group adopted IFRS 16 Leases (IFRS 16) with a transition date of 1 January 2019. The group has applied modified retrospective adoption and has therefore not restated comparatives but recognised the leases on the balance sheet at the date of initial application (i.e. 1 January 2019). Right-of-use assets have been measured by reference to the measurement of lease liability at the date of application and so there is no impact on net assets at this date

On adoption of IFRS 16, the Group recognised lease liabilities of £7.1m in relation to property and equipment leases, which had previously been classified as operating leases in accordance with IAS 17. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019. The weighted average incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 3.25%. Lease liabilities are included within payables in the consolidated statement of financial position. The associated right-of-use assets are measured at the amount of the lease liability adjusted for prepaid lease payments recognised in the 31 December 2018 balance sheet and are included within property, plant and equipment in the consolidated statement of financial position.

Revenue

Revenue comprises the fair value of consideration receivable in respect of services provided or assets sold during the period, inclusive of recoverable expenses incurred but excluding value added tax.

Revenue is recognised when the Group has performed services in accordance with the agreement with the relevant client and has obtained a right to consideration for those services. Where such income has not been billed at the balance sheet date, it is included as contract assets and forms part of Trade and other receivables.

Where the Group enters into contingent fee arrangements, including where services are provided under Damage Based Agreements (DBA), no revenue is recognised until the contingent event has occurred, as the Directors consider to do so would give rise to the risk of significant reversals.

Where the Group sells a share of its entitlement to any award under a DBA to a third party, the income is recognised in the period of the sale.

Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group has not classified any of its financial assets as held to maturity.

Fair value through profit or loss

Litigation investments relate to the provision of funding of litigation projects and they are held at fair value through the profit and loss.

Amortised cost

These assets arise principally from the provision of goods and services to customers (e.g. trade receivables). They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Financial liabilities

The Group classifies its financial liabilities depending on the purpose for which the liability was acquired.

Other financial liabilities

All the Group's financial liabilities are classified as other financial liabilities, which include the following items:

- Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

- Leases are measured as described above.

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when the dividend is paid. In the case of final dividends, this is when approved by the shareholders at the AGM.

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on actual experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.

Estimates and assumptions

- Revenue recognition

Where fees are contractually able to be rendered by reference to time charged at agreed rates, the revenue is recognised over time, based on time worked charged at agreed rates, to the extent that it is not considered likely to be reversed.

Where revenue is subject to contingent fee arrangements including DBAs, the Group estimates the amount of variable consideration to which it will be entitled and constrains the revenue recognised to the amount for which it is considered highly probable that there will be no significant reversal. Due to the nature of the work being performed, this typically means that contingent revenues are not recognised until such time as the outcome of the matter being worked on is certain.

Different views being determined for the amount of revenue to be constrained in relation to each contingent fee arrangement may result in a different value being determined for revenue and also a different carrying value being determined for unbilled amounts for client work.

In calculating revenue from fixed price contracts, the Group makes certain estimates as to the stage of completion of those contracts. In doing so, the Group estimates the remaining time and external costs to be incurred in completing contracts and the clients' willingness to pay for the services provided. A different assessment of the outturn of the contract may result in a different value being determined for the revenue and also a different carrying value being determined for unbilled amounts for client work.

- Fair value of litigation investments

The most significant estimates relate to the valuation of litigation investments at fair value through profit or loss which are determined by the Group. Fair values are determined on the specifics of each investment and will typically change upon an investment having a return entitlement or progressing in a manner that, in the Group's judgement, would result in a third party being prepared to pay an amount different from the original sum invested for the Group's rights in connection with the investment.

The estimation of fair value is inherently uncertain. Awards and settlements are hard to predict and often have a wide range of possible outcomes. Furthermore, there is much unpredictability in the actions of courts, litigants and defendants because of the large number of variables involved and consequent difficulty of predictive analysis. In addition, there is little activity in transacting investments and hence little relevant data for benchmarking the effect of investment progression on fair value, although the existence of secondary market transactions is a valuation input.

- Accounting for business combinations and fair value

Business combinations are accounted for at fair value. Valuation of acquired intangibles requires estimates of future growth rates, profitability, remaining useful lives and discount rates for input to the business combination valuation methodology. A difference in the estimated future growth rates, profitability, the use of a different discount rate, or the selection of a different valuation method may result in a different assessment of fair value of the asset or liability acquired as part of the business combination. 

- Estimated impairment of intangible assets including goodwill

Determining whether an intangible asset is impaired requires an estimation of the value in use of the cash generating units to which the intangible has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from each cash generating unit and determine a suitable discount rate. A difference in the estimated future cash flows or the use of a different discount rate may result in a different estimated impairment of intangible assets.

- Impairment of trade receivables

Receivables are held at cost less provisions for impairment. Impairment provisions are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. A different assessment of the impairment provision with reference to the probability of the non-payment of trade debtors or the expected loss arising from default, may result in different values being determined.

- Claims and regulatory matters

The Group from time to time receives claims in respect of professional service matters. The Group defends such claims where appropriate but makes provision for the possible amounts considered likely to be payable. A different assessment of the likely outcome of each case or of the possible cost involved may result in a different provision or cost.

The chief operating decision makers (CODMs) are the Board of Directors of Rosenblatt Group plc. The Group has the following five strategic business groups, which are its reportable segments. These business groups offer different services and are reported separately because of the different specialisms from the legal teams in those business groups.

The following summary describes the operations of each reportable segment:

·; Real Estate - Provision of legal advice in respect of construction, planning, real estate and residential property development services.

·; Employment - Provision of legal advice in respect of employment and pension services.

·; Corporate - Provision of legal advice in respect of corporate, private client and taxation services.

·; Dispute Resolution - Provision of legal advice in respect of commercial dispute resolution.

·; DBA Income - Sale of entitlement of awards under DBAs

Personnel Costs stated in the Consolidated statement of comprehensive income includes the costs of contractors who are not employees.

The average number of employees (including directors) during the period was as follows:

A defined contribution pension scheme is operated by the group on behalf of the employees of one of the subsidiary undertakings. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension charge represents contributions payable by the group to the fund and amounted to £134,449 (2018:£32,134). Contributions amounting to £66,907 (2018:£50,443) were payable to the fund at period end and are included in Trade and other payables.

Earnings per share is calculated as follows:

Clawback arrangements over certain shares of Cascades Ltd would have an anti-dilutive effect on earnings per share and therefore no impact on diluted earnings per share.

On 24 May 2019, Rosenblatt Group plc paid a dividend of £2,228,300 in respect of 2018 (2.8p per share).

On 24 July 2019, Rosenblatt Ltd declared an interim dividend for 2019 resulting in a distribution to Rosenblatt Group plc of £2,900,000. The Company will pay an interim Dividend for the 6 months to 30 June 2019 of 2p per share. This dividend has not been accrued in the consolidated statement of financial position as it has been proposed after the reporting period.

The intangible assets arose on the acquisition of the trade and specific assets and liabilities of Rosenblatt Partnership, by Rosenblatt Limited on 8 May 2018.

Litigation Investments comprise the funding provided to Litigation projects. Assets are fair valued at each balance sheet date and any movement in fair value from previous balance sheet date is recognised in the profit or loss (see Note 3).

The Group leases its business premises and the lease provides for annual increases in the periodic rent payments linked to inflation, within a band of a 2-4% increase per annum. The Group also leases an item of office equipment, with fixed payments over the lease term.

Right-of-Use Assets

Lease liabilities

At 30 June 2019, lease liabilities were falling due as follows: