Half-year Report

M&C SAATCHI PLC

INTERIM RESULTS

SIX MONTHS ENDED

30 JUNE 2021

21 September 2021

M&C SAATCHI PLC

(the "Company")

Interim results for the six months

ended 30 June 2021

A strong first half performance, results ahead of management's initial expectations and profits ahead of H1 2019 pre-pandemic levels

H1 Highlights 

Financial

· H1 gross revenue of £171.2million, up 14.7% on H1 2020 and net revenue of £118.1million, up 14.2%

· Like-for-like net revenue up 21.0% (excluding impact of entities divested in 2020 or acquired in 2021)

· Headline operating profit margin increased to 10.5%, up 6.4pts compared to prior year (H1 2020: 4.1%)

· Headline profit before tax of £10.5million up 420.0% compared to £2.0million in H1 2020

· Balance sheet strong, with net cash at 30 June 2021 of £31.8million, compared to £22.4million at 30 June 2020 and £32.7million at 31 December 2020 

Operational

· Accelerated digitalisation and data integration across all disciplines and successful launch of data consultancy, Fluency

· Strong client retention, including positive outcomes in all major client reviews

· Strategy of connected and global growth fully operational

o Relationships deepened with major existing clients, including Reckitt, GSK, Lexus and Sonos. Global platforms developed for new clients, including Uber, Delonghi, Franklin Templeton

· Key personnel now in place to further centralisation, strengthen controls and fuel operations for scalable growth

Current trading and outlook

· Momentum from H1 has continued into H2 with important client retentions and new wins

· Full year profit before tax and earnings expected to be substantially ahead of consensus

· Strong financial governance has enabled Board decision (post period end), to settle put options in cash rather than shares. Eliminates risk of continued substantial share dilution and represents a key turning point for the Group

· Investments in organic start-ups in H2 2021, including digital transformation and ESG consultancies and SaaS content creation platform for SMEs, in line with strategy.

Unaudited Consolidated Headline1  Income Statement

Unaudited Reported Results

[1] Refer to page 12 for the definition of Headline, net revenue and net cash.

2 Disposed entities are included within the prior period comparatives, therefore distorting the analysis of movements.

3 Like-for-like growth excluding effect of acquisitions in 2021 and disposals in 2020.

4 Earnings are calculated after deducting share of profits attributable to non-controlling interests.

5 EBITDA is calculated excluding the income statement charges relating to IFRS 16.

Moray MacLennan, Chief Executive Officer, said:

"These results mark a key turning point for M&C Saatchi. We have returned to growth with H1 profits not only substantially ahead of 2020, but also surpassing 2019. Our focus on simplification and control, has continued to strengthen both our operating margin and balance sheet, which enables us to successfully pursue our strategy for growth.

We have made rapid progress in the implementation of this strategy, most notably in accelerating M&C Saatchi's proven expertise in providing digital and connected marketing solutions to meet the demands of a growing market.

Our confidence in the future is reflected in the post-period-end decision to settle current put options in cash with the expectation that this continues thereby eliminating dilution for shareholders".

For further information please call:

M&C Saatchi +44 (0)20-7543-4500Moray MacLennan, Mickey Kalifa

Tulchan Communications +44 (0)20-7353-4200Tom Murray, Matt Low, Hollie Ralston

Numis Securities +44 (0)20-7260-1000Nick Westlake, Hugo Rubinstein, Charles Farquhar

Liberum +44 (0)20-3100-2000Neil Patel, Benjamin Cryer,

Edward Phillips, Will King

SUMMARY OF RESULTS

Performance in the first half of 2021 has been strong, well ahead of the first half of 2020 and profits even ahead of the pre-pandemic first half 2019 outcome.

· Net revenues increased by 14.2% to £118.1million (2020: £103.4million)

· On a like-for-like basis, net revenues grew by 21.0% (excluding the contribution from those entities divested in 2020 and those acquired in 2021)

· H1 2021 Headline PBT is £7.1m or 209% ahead of the pre-pandemic H1 2019 outcome.

The increase is a result of a combination of greater activity amongst existing clients and an expansion in new business from new projects and new clients. This follows the successful implementation of our divisional group structure and the increasing focus on digital within our divisions and clients.

Costs continued to be tightly controlled, and although Headline operating costs increased, the increase is well below the rate at which revenue has grown. Operating costs increased by 6.6% to £105.7million (2020: £99.2million) and Statutory operating costs increased by 5.8% to £111.0million (2020: £105.0million). We are now seeing the benefits of the Group's operating leverage flow through to operating profit margin, which at Headline level has increased by 6.4pts to 10.5% (2020:4.1%).

The Group's underlying Headline profit before tax increased by 420.0% to £10.5million (2020: £2.0million) and non-Headline or reported results by 185.6% to £4.8million (2020: loss of £(5.6)million).

In 2020, the Group embarked on a large-scale, global restructuring programme, closing or merging 20 operating entities. This has had a strong favourable impact on H1 2021 results. We expect the revenue and operating profit benefits from the 2020 disposal programme to continue to positively impact the second half of the year.

Cash management continues to be a strong area of focus, the result of which has been an increase in net cash to £31.8million from £22.4million at 30 June 2020. On 31 May 2021, the Group agreed a new £47million, three-year joint banking arrangement with Barclays Bank PLC and National Westminster Bank plc, of which £29.5million was drawn at 30 June 2021 compared to £36.0million at 20 June 2020. As at 31 August 2021, the Group's net cash position had increased to £40.6million. We have sufficient liquidity to now settle put options in cash rather than through issuing equity.

Market Dynamics

A renewed belief in marketing: Whilst the onset of the pandemic created uncertainty around client investment, we are now seeing a renewed belief in marketing as the key lever for growth. Marketing spend levels are increasing as brands take advantage of stronger economic indicators and the recovery in consumer spending.

Around 72% of marketing chiefs said the "importance of marketing" has grown in their companies over the last year (Source: The CMO Survey). This is reflected in forecast growth in worldwide advertising revenue of 10.2% to a record $651 billion in 2021, after falling 4.1% in 2020. (Source: Ad Age)

Digital growth over indexing: Digital transformation continues to accelerate in the long tail of the pandemic. Global digital ad spend is estimated to increase by 17%, reaching US $389 billion in 2021, 14.6% more than the dip in growth in 2020. (Source: eMarketer); alongside a major shift in spend towards digital capabilities (Source: Gartner).

Demand for connected solutions: Whilst pure play digital is showing significant growth, we are also seeing increased demand for connected solutions. Clients increasingly want agencies to combine the whole range of communication channels, delivering optimised solutions that integrate online and offline, brand and experience, and paid, owned and earned media. Currently around one-third of pitches are connected opportunities. Creative bandwidth and data capabilities are critical differentiators here - with both at the heart of our strategy.

The war for talent: In what has been called the Great Reappraisal by HR experts, there is a post-Covid fight for talent. Employees are re-assessing their vocational criteria, and the evidence strongly suggests that strong brands with a clear, noble purpose will become employers of choice.

Acceleration of ESG criticality: Credible ESG policies are increasingly a requirement for agencies competing for significant client contracts. In addition, there is increased demand from clients seeking consultancy and activation support for their own sustainability strategies and the role of marketing in sustainability.

Operational and Strategic Review

H1 saw exceptionally strong client retention, including successful reviews of major government contracts, notably in the UK and US.

New business was strong. We continue to win technology clients including Uber, Google, SoundCloud, TikTok, Tinder, the sport-tech brand Whoop and the Edtech brand Quizlet. Other notable new business wins include launching digital grocery delivery service, Gorillas, in the UK, a digital agency partnership with Beam Suntory spanning 6 south east Asia markets and becoming the lead creative partner for PermataBank in Indonesia, focusing on creating innovative digital banking experiences for its customers. We continued to win new assignments from existing clients such as Reckitt, GSK the UK government and Mercedes Benz.

The new strategy is being implemented at pace and is delivering early benefits to the business. This review covers three areas: greater centralisation and control of the organisation; digital and data acceleration; and continued simplification.

1. Greater centralisation and control

ESG Commitments: We are publishing our People and Planet commitments today. Full details are appended. The business will be net zero in its own operations by 2025 and across its entire supply chain by 2030. We are signed up to the Science Based Target Initiative (SBTi). Our plan also includes our commitment to attract underrepresented talent via our global and ground-breaking Open House Programme.

Key Central Appointments: In the first half we have made four key appointments, all of which will accelerate the strategy of connected growth. These are: Chief People Officer, Group Strategy Director, Group Treasury Director and Chair of the UK Group.

Connected Revenue Growth: The Company's Executive Committee, supporting the CEO, is now fully operational with incentives aligned to the new strategy.

2. Digital and data acceleration

High-level data consultancy: Fluency offers clients transformational data solutions that power bolder and better decision making. After a successful launch it has extended its client roster to include a wide range of tech companies as well as more traditional companies seeking digital transformation.

Fuel for growth: In addition, we have deepened our data capabilities at the heart of each division. Within the Connected Creativity division specifically, we have successfully blueprinted an embedded data offer for clients which will be rolled out internationally from Q1 2022.

SaaS: H1 saw the development of a minimum viable product for an automated subscription service for SME clients. This will be launched in 2022.

Digital Ventures: This is a digital product and service innovation studio. The talent is secured and signed. It will launch in Q4 2021.

3. Simplification

Internal: We are investing in single global platforms for HR, CRM and finance. We have also continued the rationalisation programme operationally merging several entities into the divisions, including Human Digital into Global and Social Issues.

External: We are reinforcing a single view of the Company, so it has one 'face' with multiple disciplines. This will manifest in our website, social channels and new business credentials.

In H1, we have reviewed technology solutions for a global client delivery platform. The decision on which platform will be taken in H2.

Segmental Analysis

Until this year, the Group's operating segments have exclusively comprised individual country entities and we have reported results on that basis only. From 2021, following the Group's strategic review, presented at the Capital Markets Day in January 2021, we now also assess the Group's performance under a new divisional structure comprising five specialist divisions.

We report these in further detail in Note 6.

Specialist Divisions

The five divisions that make up the Group comprise:

· Connected Creativity

· Performance Media

· Global and Social Issues

· Brand, Experience and Innovation

· Passion Marketing

Connected Creativity is the largest division by revenue and operating profit, which on an like-for-like basis (excluding the impact of revenue from divested operations and acquisitions in H1 2021) comprises £59.0million (51%) of the Group's net revenue (H1 2020: £52.6million, 55%) and £7.4million, or 33% of the Group's Headline operating profit (H1 2020: £2.4million, 23%). Like-for-like Headline operating profit margins in Connected Creativity increased by 8.1pts to 12.6% from 4.5% in H1 2020. Reported net revenue in the Connected Creativity division of £61.6million increased by £1.2million compared to H1 2020. On a like-for-like basis, net revenue, increased by £6.4million or 12.1%.

The remaining 4 divisions generated a total of 49% of net revenue of the Group compared to 45% of the total in H1 2020 on a like-for-like basis. These 4 divisions make up 67% of the total Headline operating profits of the Group in H1 2021 (H1 2020: 77%). Like-for-like Headline operating profit margins across the remaining 4 divisions averaged 26.6% in H1 2021, growing 8.5pts from 18.1% in H1 2020.

· Connected Creativity - the application of marketing science and creativity to solve complex problems

The net revenue increase of £1.2million to £61.6million (2.1%) was driven by the H1 performance of the UK Agency and South Africa. For the UK Agency, revenues from the UK Home Office and Census in the first half of 2021 accounted for the majority of the increase compared to H1 2020. In addition to this, increasing our investment in four companies (moving them to subsidiary status) has resulted in £2.8million of additional consolidated net revenue.

This is offset by the disposals that occurred in the second half of 2020 with revenues in Spain and France, contributing £5.3million in H1 2020, having no comparative in 2021.

· Performance Media - connecting brands with today's connected customers

The net revenue increase of £3.7million to £15.0million (33.0%) was largely driven by revenue growth in Asia from the M&C Saatchi Performance group, both from new and existing clients. The media agency, Bohemia in Australia, also reported year-on-year growth in revenue related to new business wins, along with an increase in organic growth with recurring clients. 

· Global and Social Issues - driving critical global and social change. Protecting the planet, transforming lives for the better

The net revenue increase of £4.3million to £14.7million (41.5%) was driven by World Services, with new assignments in the UK and Australia.

· Brand, Experience & Innovation - transformative digital experience, design and innovation

The net revenue increase of £1.7million to £15.2million (12.8%) was primarily due to strong revenue growth in the Re Agency in Australia and Clear consultancy in the US.

· Passion Marketing - connecting brands direct to consumers through their passions

The net revenue increase of £3.7million to £11.6million (46.3%) was driven by Sport & Entertainment in the UK and US, along with the Talent group. The sports agencies were hit hard in 2020 due to the severe disruption to the sporting and live events calendar. There was significant uplift in the net revenue of this specialist division as a result of the major sports events taking place in 2021 (including the 2020 Euros and the Olympics).

Geographical

· UK

Net revenue in the UK increased by £14.0million or 38% (2021: £50.8million; 2020: £36.8million). Headline operating profit for the first 6 months of the year was up 250% (2021: £11.9million, 2020: £3.4million), with Headline operating costs increasing by 16% to £38.9million.

· Europe

Net revenue in Europe declined by £5.5million or 43% (2021: £7.4million; 2020: £12.9 million). Headline operating profit increased by 200% (2021: £0.9million; 2020: £0.3million), with Headline operating costs reducing by 48% to £6.5million.

· Middle East and Africa

Net revenue in the Middle East and Africa increased by £2.4million, 31% (2021: £10.1million; 2020: £7.7million). Headline operating profit increased by 950% (2021: £2.1million; 2020: £0.2million), with Headline operating costs increasing by 7% to £8.1million.

· Asia and Australia

In Asia and Australia, net revenues increased by £4.5million, 17% (2021: £30.9million; 2020: £26.4million). Headline operating profit increased by 193% (2021: £0.5million; 2020: £1.0million), with Headline operating costs increasing by 20% to £30.4million.

· Americas

Net revenues declined by £0.7million, -4% (2021: £18.8million; 2020: £19.5million). Headline operating profit increased by 43% (2021: £3.0million 2020: £2.1million), with Headline operating costs reducing by 9% to £15.8million.

Income Statement

· Net revenue and operating profit

The net revenue increase of 14.2% has been explained above in the segmental review. Headline operating costs have increased 6.6% with reported operating costs increasing 5.8%, which is predominately due to an increase in staff costs to service the increased revenues noted above. There continues to be a strong focus on cost control, with the result that costs have increased at a much lower rate than revenues, in turn leading to a significant increase in Headline operating margins to 10.5% in H1 2021 (H1 2020: 4.1%).

The Group is now seeing the positive impact of operating leverage, which we had highlighted in the Capital Markets Day in January 2021.

· Impairment

During the first half of 2021 we recognised an impairment relating to an intangible film asset in Australia of £885k. As a result of the prolonged lockdown in Australia and a sluggish movie distribution market across the world, we no longer believe that this intangible asset is recoverable.

· Other key movements

Finance costs have decreased year over year partly due to the reduction in debt and the continued focus on cash management as described below, as well as the impact of the decrease in the IFRS 9 charge from £2million in H1 2020 to £0.5million in H1 2021, due to share price movements and exercised put options in 2020.

Balance sheet and cashflow

· Cash and Borrowings

Cash net of bank borrowings as at 30 June 2021 was £31.8million, compared to £32.7million of net cash at 31 December 2020 and £22.4million net cash at 30 June 2020. The Group has made great progress in transforming its treasury function and will continue to see the benefits of its increased focus on cash management into 2022. The current net cash position as at 31 August improved since the balance sheet date to £41.4million.

On 31 May 2021, the Group agreed a new three year joint banking arrangement with Barclays Bank plc and National Westminster Bank plc. The new revolving credit facility for £47million (the "Facility"), includes two ancillary facilities: a £2.5million overdraft and a £3million bonding facility, as required. The Facility replaces the Company's previous £33million revolving credit facility and £5million overdraft which were due to terminate on 30 June 2021. As at 30 June 2021, £29.5million of the Facility was drawn.

Operating cash before movements in working capital has increased to £14.8million (H1 2020: £8.6 million). This reflects the extremely positive performance in H1 2021 compared to the previous 18 months, also referred to below.

· Working Capital Movement

Net cash from operating activities decreased to £4.7million (£33.7million at 31 December 2020 and £11.8million at 30 June 2020). Trade and other receivables increased by £23.1million between 31 December 2020 and 30 June 2021. This reflects the strong revenue performance in the first half of the year. Within this, £5.2million of the increase comes from receivables from acquisitions during the first half of 2021, which are detailed in the other key movements note below.

Trade and other payables increased by £13.2million between 31 December 2020 and 30 June 2021. This increase is as a result of a 16% increase in project costs / direct costs, required to service the increase in business in H1 2021. Within this movement, £5.7million of the increase comes from payables from acquisitions during the first half of 2021.

The movements in receivables and payables have resulted in a net working capital movement of £9.9million (excluding the impact of foreign exchange, tax and other non-current assets) and is the outcome of the Group's strong performance in the first half of 2021.

· Other key movements

During the first half of the year, we acquired a majority share in 4 entities as a result of management in those entities exercising their put option rights to sell their equity to the Group. These entities comprised M&C Saatchi (Hong Kong) Ltd, M&C Saatchi Advertising (Shanghai) Ltd, Santa Clara Participacoes Ltda and M&C Saatchi World Services Pakistan (Pvt) Ltd. As a result of these transactions, the assets and liabilities within those entities were brought onto the balance sheet during H1 2021. This has resulted in an increase in the intangible assets (£5.5million), trade and other receivables (£5.2million) and trade and other payables (£5.7million). The income statement impact has been identified within the segmental review above, and the cash acquired within the entities' balance sheets is reflected in the cashflow statement (£1.3million). These entities were acquired through the issue of equity as identified in the statement of changes in equity.

Notes to Editors

Company

M&C Saatchi Plc, a company incorporated in England, listed on the AIM Market of the London Stock Exchange plc.

Group

The Company and its subsidiaries. The financial statements of the Group consolidate the results of the Company and its subsidiary entities, and include the share of its joint ventures' and associates' results accounted for under the equity method.

Headline results

The Directors believe that the Headline results and Headline earnings per share (see note 4) provide additional useful information on the underlying performance of the business. The Headline results reflect the underlying profitability of the business units by excluding certain items which management considers to be non-operating or non-recurring, as explained below.

In addition, the Headline results are used for internal performance management and to calculate minority shareholder put option liabilities. The term 'Headline' is not a defined term in IFRS. Note 4 reconciles Reported results to Headline results. With explanation for each of the adjustments.

The segmental reporting (note 6) reflects Headline results in accordance with IFRS 8.

Operating profit margin

Operating profit margin refers to the percentage calculated through dividing operating profit by net revenue.

Net cash

Net cash refers to cash and cash equivalents, less external borrowings at the end of the period. Net cash excludes lease liabilities.

Net revenue

Net revenue is equal to revenue less project cost / direct cost. It is not an IFRS defined term. It is, however, used as a key performance indicator by the Group.

EBITDA

EBITDA is equal to the operating profit or loss before depreciation, amortisation, finance expense and taxation, and excludes any charges relating to IFRS 16. It is not an IFRS defined term. It is, however, used as a key performance indicator by the Group.

Periods compared

These statements comment on the unaudited consolidated income statement of the Company for the six months to 30 June 2021 compared with the unaudited consolidated income statement for the same period in 2020. 

Billings

Billings comprise all gross amounts billed, or billable to clients in respect of commission-based and fee-based income, whether acting as agent or principal, together with the total of other fees earned, in addition to those instances where the Group has made payments on behalf of customers to third parties. It is stated exclusive of VAT and sales taxes. This is a non-Statutory number. 

 Unaudited Consolidated income statement

Unaudited Consolidated balance sheet 

1. General information

The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office and the Company is 36 Golden Square, London W1F 9EE.

The Company has its primary listing on the AIM market of the London Stock Exchange.

This consolidated half-yearly financial information was approved for issue on 21 September 2021.

The comparative financial information for the year ended 31 December 2020 in this interim report does not constitute statutory accounts for that year.

The statutory accounts for the year ended 31 December 2020 have been delivered to the Registrar of Companies. The auditors' report on those accounts was qualified in respect of the comparability of the M&C Saatchi Group loss and cash flows with the 2019 year-end. The information presented in relation to 31 December 2020 is extracted from the audited statutory financial statements for the year then ended.

2. Basis of preparation

This consolidated half-yearly financial information for the six months ended 30 June 2021 has been prepared in accordance with the AIM Rules for companies.

3. Use of judgements and estimates

In the course of preparing the interim unaudited consolidated half-yearly financial information, management necessarily makes judgements and estimates that can have a significant impact on the interim financial statements. These estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant accounting judgements

Management has considered the following judgements, which have the most significant effect in terms of the amounts recognised, and their presentation, in the interim consolidated financial statements. These are the same accounting estimates and judgements the Group has applied in its financial statements for the year ended 31 December 2020:

· Minority interest put option accounting - IFRS 2 or IFRS 9

Accounting for Minority Interest (MI) put options is a critical accounting policy. Ascertaining whether such put options should be accounted for under IFRS 9 or whether the awards fall within the scope of IFRS 2 is a key management judgement.

The key feature of the awards made to MI (who hold an equity share in subsidiary enterprises) is whether the awards are given beneficially as a result of employment. Where there is an explicit service condition, if the award is given to an existing employee, or, if the employee is being paid below market value or there are other indicators that the award is a reward for employment, then the awards are accounted for as share-based payment in exchange for employment services under IFRS 2. If the scheme is intended to be settled in equity, then the award is accounted for as an equity settled share-based payment and the value is recognised as an expense in the income

statement over the shorter of the vesting period or the period of required employment. If the scheme is intended to be settled in cash, then the award is accounted for as a cash-settled share-based payment and a liability is recognised to reflect the future cash outgoings from the business. Otherwise, where the holder held shares prior to the Group acquiring the subsidiary or gained the equity to start a subsidiary using their unique skills, and there are no indicators it should be accounted for under IFRS 2, then the award is recognised as a liability held at amortised cost under IFRS 9.

The valuation of these awards represents a source of estimation uncertainty which is discussed below.

· Impairment - assessment of CGUs and assessment of indicators of impairment

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. Finite lived assets are reviewed for indicators of impairment (an impairment "trigger") and judgement is applied in determining whether such a trigger has occurred. External and internal factors are monitored for indicators of impairment: management typically consider adverse changes in the economy or political situation of the geographic locale in which the underlying entity operates, in addition to risk of client loss or chance of client gain and internal reporting suggesting that an entity's future economic performance is better or worse than previously expected.

For the interim financial statements, management have concluded that no such an indication of impairment exists other than for Skategoat as detailed on page 10, so the recoverable amount of the asset is not assessed.

Significant estimates and assumptions

The areas of the Group's interim financial statements subject to key assumptions and other significant sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are described below. The Group has based its assumptions and estimates on parameters available when the interim financial statements were prepared.

· Deferred tax assets 

The Group assesses the future availability of carried forward losses and other tax attributes by reference to jurisdiction-specific rules around carry forward and utilisation and it assesses whether it is probable that future taxable profits will be available against which the attribute can be utilised. Current forecasts show recovery of substantially all recognised losses within 5 years but there is estimation uncertainty around this assessment, and its impact is material as the Deferred Tax Asset on losses increased by £7m during 2020.

· Fair value measurement of financial instruments  

The Group holds certain financial instruments which are recorded on the balance sheet at fair value at the point of recognition and remeasured at the end of each reporting period. At the year end these relate to:

(i) Equity investments at FVTPL in non-listed limited companies; and

(ii) and certain contingent consideration.

The equity investments comprise early-stage companies and small equity holdings in a client received in exchange for services rendered in lieu of monetary based remuneration. No formal market exists to trade these financial instruments and, therefore, their fair value is measured by the most appropriate valuation techniques available, which vary based on the nature of the instruments. The inputs to the valuation models are taken from observable markets where possible, but where this is not feasible, judgement is required to establish fair values.

· Share-based incentive arrangements 

Share-based incentives are valued at the date of the grant using stochastic Monte Carlo pricing models with non-market vesting conditions. Typically, the value of these awards is directly related to the performance of a particular entity of the Group in which the employee holds a minority interest. The key inputs to the pricing model are interest rates, share price volatility and expected future performance of the entity to which the award relates. Management apply judgement to these inputs, using various sources of information, including the Group's share price, experience of past performance and published data on risk-free interest rates (government gilts).

Significant accounting estimates that are considered at each reporting period for whether there have been any changes in circumstances:

- Fair value assessment of assets at FVTPL

- Minority interest put option accounting in line with IFRS 2 and IFRS 9

- Impairment review of Goodwill, associates, ROU and other assets in line with IFRS 16: No further indicators were identified in addition to the Skategoat impairment as detailed above.

4. Headline results and earnings per share - 30 June 2021

4. Headline results and earnings per share (continued) - 30 June 2021

Basic and diluted earnings per share are calculated by dividing appropriate earnings metrics of the Group by the weighted average number of shares in issue during the year.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all potentially dilutive ordinary shares. The dilutive effect of unvested outstanding options is calculated based on the number that would vest had the balance sheet date been the vesting date.

4. Headline results and earnings per share (continued) - 30 June 2020

4. Headline results and earnings per share (continued) - 30 June 2020

4. Headline results and earnings per share (continued) - 31 December 2020