big results Concise Financial Report

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1 big results Concise Financial Report 2014

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3 Concise Financial Report The Concise Financial Report and Auditors Report contained within this document represent a Concise Report. The full financial report of Clemenger Group Limited for the year ended 31 December 2014 and the Auditors Report thereon will be sent, free of charge, to members upon request. Members wishing to receive the full financial report and Auditors Report may arrange for a copy by contacting Adrian Ciabotti on The Concise Report contained within this document has been derived from the full consolidated financial report of Clemenger Group Limited for the year ended 31 December 2014 and cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the consolidated entity as the full financial report. Concise Financial Report

4 Consolidated statement of financial position as at 31 December 2014 ASSETS 31 Dec Dec 2013 Current assets Cash and cash equivalents 164, ,662 Trade and other receivables 81,911 60,906 Other current assets 20,009 17,062 Total current assets 266, ,630 Non-current assets Receivables 39,621 37,844 Deferred tax assets 7,682 6,547 Investments in associates 46,120 49,321 Other non-current assets Property, plant and equipment 11,621 8,569 Intangible assets and goodwill 71,520 64,240 Total non-current assets 176, ,313 TOTAL ASSETS 443, ,943 LIABILITIES Current liabilities Trade and other payables 88,381 59,905 Interest-bearing loans and borrowings - 79 Income tax payable 6,209 4,753 Provisions 10,109 8,924 Other current liabilities 12,326 8,912 Total current liabilities 117,025 82,573 Non-current liabilities Payables 2,293 1,578 Deferred tax liability 3, Interest-bearing loans and borrowings 41,031 37,085 Provisions 4,069 2,776 Total non-current liabilities 50,455 42,135 TOTAL LIABILITIES 167, ,708 NET ASSETS 275, ,236 EQUITY Issued capital 23,210 23,210 Reserves (10,659) (8,551) Retained earnings 260, ,580 Parent interests 273, ,239 Minority interests 2,639 1,997 TOTAL EQUITY 275, ,236 The Net Assets of the Group increased by $20 million: the increase was driven by the excess of profits over dividends paid during the year. Non-current interest-bearing loans and borrowings and non-current receivables have increased as a result of new loans associated with the Clemenger Employee Share Scheme. Net working capital has increased in line with the Group s focus on cash retention and working capital maximisation. 2

5 Consolidated statement of profit or loss for the year ended 31 December 2014 Notes Year ended 31 Dec 2014 Restated Year ended 31 Dec 2013 Commission and fees 1 289, ,939 Cost of Sales (53,836) (53,258) Gross Profit 235, ,681 Interest revenue 7,239 7,617 Other income 3, Finance costs (2,226) (2,947) Staff costs (147,868) (137,247) Occupancy costs (15,468) (14,259) Depreciation expense and impairment of goodwill (10,226) (6,597) Travel & entertainment (7,462) (6,778) Communications (2,021) (2,240) Other expenses (16,649) (16,125) Share of profit of associate 10,399 8,458 Profit before income tax 54,543 50,792 Income tax expense (13,861) (13,367) Net profit for the period 40,682 37,425 Net profit attributable to: Members of the group 40,123 36,505 Non-controlling interests ,682 37,425 For the year ended 31 December 2014, the Group recorded a Profit after Tax of $40.7 million, with $40.1 million attributable to the members of the Group. Trading conditions experienced in the year were broadly consistent with the prior period. Concise Financial Report

6 Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2014 Year ended 31 Dec 2014 Year ended 31 Dec 2013 Net profit for the period 40,682 37,425 Other comprehensive income Items that may be reclassified subsequently to profit and loss: Foreign currency translation movement (net of tax) 1,446 5,942 Total comprehensive income for the period 42,128 43,367 Total comprehensive income for the period is attributable to: Owners of Clemenger Group Limited 41,569 42,447 Non-controlling interests ,128 43,367 The foreign currency translation movement of $1.4m was due to the New Zealand dollar appreciating 4% against the Australian dollar during The foreign currency translation movement of $5.9m in 2013 was due to the New Zealand dollar appreciating 16% against the Australian dollar during

7 Consolidated statement of changes in equity for the year ended 31 December 2014 Share capital Retained earnings Acquisition premium reserve Foreign currency translation reserve Owners of the parent Non - controlling interest Total At 1 January , ,580 (14,028) 5, ,239 1, ,236 Profit for the year 40,123 40, ,682 Other comprehensive income 1,446 1,446 1,446 Transactions with owners in their capacity as owners: Dividends paid (17,989) (17,989) (613) (18,602) Acquisition of non-controlling interest (3,554) (3,554) (670) (4,224) Non-controlling interest arising on a business combination 1,366 1,366 At 31 December , ,714 (17,582) 6, ,265 2, ,904 At 1 January , ,625 (14,028) (465) 228,342 1, ,233 Profit for the year 36,505 36, ,425 Other comprehensive income 5,942 5,942 5,942 Transactions with owners in their capacity as owners: Dividends paid (17,550) (17,550) (853) (18,403) Acquisition of non-controlling interest Non-controlling interest arising on a business combination At 31 December , ,580 (14,028) 5, ,239 1, ,236 The composition of retained earnings during the year was impacted by profits for the year, offset by a dividend paid to shareholders. The foreign currency translation reserve movement of $1.4m was due to the New Zealand dollar appreciating 4% against the Australian dollar during Concise Financial Report

8 Consolidated statement of cash flows for the year ended 31 December 2014 Year ended 31 Dec 2014 Year ended 31 Dec 2013 Cash flows from operating activities Receipts from clients (including GST) 511, ,137 Payments to suppliers (including GST) (458,971) (481,234) Interest received 7,239 7,617 Interest paid (2,226) (2,947) Income tax paid (13,535) (13,614) Net cash flows from operating activities 43,810 23,959 Cash flows from investing activities Purchase of property, plant & equipment (6,188) (5,676) Purchase of other intangibles (72) (677) Proceeds from repaid employee shareholder loans 2,427 2,306 Loans to employee investing shareholders (6,441) (12,072) Purchase of business/subsidiary, net of cash acquired 8,737 (6,074) Additional investment in controlled entities (4,266) (1,032) Proceeds/(divestment) from sale of controlled entities (624) 1,233 Proceeds from sale of associates Dividends from associates 6,963 3,881 Net cash flows from investing activities 1,305 (18,334) Cash flows from financing activities Dividend paid (17,989) (17,550) Repayment of finance lease liabilities (79) (394) Dividend paid to non-controlling interests (613) (853) Proceeds from borrowings 3,946 9,588 Net cash flows used in financing activities (14,735) (9,209) Net increase/(decrease) in cash and cash equivalents 30,380 (3,584) Cash and cash equivalents at beginning of period 134, ,965 Net foreign exchange differences (154) 2,058 Cash and cash equivalents at end of period 164, ,662 Net cash flows from operating activities increased during the year as a result of the decrease in payments to suppliers outstripping the movement in receipts from clients during The balance of cash and cash equivalents increased from the previous year, due to the movement in operating activities outlined above, coupled with an increase due to the consolidation of Marketforce and GRA Everingham from December

9 Notes to the Concise Financial Statements for the year ended 31 December Revenue and expenditure items Year ended 31 Dec 2014 Year ended 31 Dec 2013 Commissions and fees 289, ,939 Interest revenue 7,239 7,617 Total statutory IFRS revenue 296, ,556 Further to revenue outlined above, the group's share of revenue from associates accounted under the equity method 76,607 73,054 Total Clemenger Group revenue 373, , Dividends proposed on ordinary shares A fully franked dividend of $ cents (31 December $ cents) per share was declared at the board meeting held on 28 January It has not been provided for in the 31 December 2014 financial statements. 19,744 17,989 Clemenger Group Limited franking account balance 78,656 73,801 Franking credits of $3.1m will arise from the 4th instalment of tax payable for the Clemenger tax consolidated group. Registered office Clemenger Group Limited 474 St Kilda Road Melbourne, Victoria 3004 Changes in the state of affairs As at 31 December 2014 the group was owned 26.33% (31 December 2013: 26.33%) by directors and staff in the consolidated group and 73.67% (31 December 2013: 73.67%) by Portview Holdings Australia Pty Ltd (31 December 2013: Portview Holdings Australia Pty Ltd). During the year ended 31 December 2014, the group s economic interest changed as follows: ID Database Marketing Pty Ltd - Decreased from 62.5% to nil Clemenger Tasmania Pty Ltd - Decreased from 37.5% to nil Hardie Grant Media Pty Ltd - Decreased from 25% to nil Channel 5 Communications Pty Ltd - Increased from 80% to 100% GRA Cosway - Increased from 83.16% to 100% Touchcast Limited - Increased from 76% to 85% Marketforce Pty Ltd - Increased from 47.5% to 80% GRA Everingham Pty Ltd - Increased from 49.99% to 54.99% Subsequent events On 1 February 2015, the business of Clemenger BBDO Adelaide was sold to KWP, the other major advertising agency in Adelaide. This action was taken due to the Adelaide advertising market contracting markedly, with major advertisers either disappearing or moving interstate. Basis of preparation of the Concise Financial Report The Concise Financial Report has been prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standard AASB 1039 Concise Financial Reports. The presentation currency is Australian dollars. Rounding The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable and where noted) under the option available to the company under ASIC CO 98/0100. The company is an entity to which the Class Order applies. Other The Group enters into customer arrangements at certain agencies in which it acts as a principal. The Group previously recorded these arrangements on a net basis by recording revenue net of recoverable salary and other third-party costs. In these circumstances, accounting standards require revenue to be recorded at the gross amount billed. The Directors have determined the impact of this presentation adjustment on commissions and fees revenue and cost of sales as $53.3 million for the year ended 31 December This presentation adjustment did not impact net profit, or the other financial statements in The financial report of Clemenger Group Limited for the year ended 31 December 2014 was authorised for issue in accordance with a resolution of the Directors on 23 March Directors Declaration The Directors declare that: the Concise Financial Report of the consolidated entity for the year ended 31 December 2014 is in accordance with Accounting Standard AASB 1039 Concise Financial Reports, and the financial statements and specific disclosures included in this Concise Financial Report have been derived from the full financial report for the year ended 31 December On behalf of the Board, Jonathan Brett Isaacs Director Hylton John Mackley Director 23 March 2015 Concise Financial Report

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12 Clemenger Group Limited and controlled entities Valuation of shares as at 31 December, 2014 Formula as described by the company s constitution Net assets after translating 31 December 2014 New Zealand assets and liabilities at the year-end rate of exchange for the applicable financial year. Less: Dividend to be proposed. Add: 5.5 times average net profit after tax attributable to parent company shareholders for the last three years, with an adjustment to net profit after tax in 2013 as set out in clause 5(a)(ii)(A). Divided by: the number of shares on issue at 31 December Share Price Calculation $ 000 Capital 23,210 Reserves (10,659) Retained Earnings 260,714 Subtotal (excludes minorities) 273,265 Less: Annual Dividend 19,744 Dividend per share (cents) cents Adjusted Net Assets 253,521 FY December 2014 Profit after tax 40,123 FY December 2013 Profit after tax, as adjusted 36,348 FY December 2012 Profit after tax 35,865 Average PAT ,949 Capitalisation (Average PAT + Net Assets) 459,470 Numbered Issued Shares 175,500,000 Share Valuation $

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14 The Clemenger Group Advertising Agencies Direct Marketing/Digital Specialised Services

15 Clemenger Consulting Network Clemenger Media Group

16 View our report online at annualreport2014.clemengergroup.com.au