Writtle half year trading report and dividend announcement
WRITTLE HALF YEAR TRADING REPORT AND DIVIDEND ANNOUNCEMENTS
I am pleased to report a strong first half of the year across the group, with trading profit again significantly ahead of the prior year.
Continued profitability and growing cash balances enable the payment of a special dividend in addition to an increased interim dividend.
RESULTS AND DIVIDENDS
Turnover was £35.36m (2017: £30.22m) and headline profit before tax was £4.15m (2017: £2.41m). Profit before tax was £3.22m (2017: £2.02m).
Our exceptional costs are for provisions that are higher than usual. The largest provision is made against the value of an unlisted investment which has been revalued at £0.22m.
Net cash balances at 30 June 2018 were £9.72m (2017: £6.48m).
An interim dividend of 5.5p (2017: 4.5p) per share will be paid on 31 October 2018 to shareholders on the register on 12 September 2018.
The directors have decided that Writtle will distribute significant excess cash held above £5m for which the company has no immediate investment or acquisition use by way of special dividends to shareholders from time to time. This is in addition to the progressive dividend policy.
Accordingly, a special dividend of 25p (2017: nil) per share will be paid on 28 September to shareholders on the register on 12 September 2018.
This is the second special dividend that will be paid to shareholders, the first being 50p per share paid in July 2016.
REVIEW OF TRADING
Our three business groups Innovation, Implementation and Instore all performed well in the period and their performance is shown on page 9 of this report.
Our Innovation businesses showed the greatest improvement in trading over the prior period and the recovery seen in the second half of 2017 continued into 2018 with Seymourpowell and Epoch leading the way. Clients are increasingly looking for new, bold and imaginative solutions to a rapidly changing economic and social landscape and our businesses are well placed for this.
Our Implementation businesses,
trading as the Magnet Harlequin Group, had a demanding comparison with its financial results in the prior period, but nonetheless performed satisfactorily.
The Implementation group figures on page 9 do not show the growing business collaborations initiated by Magnet Harlequin Group with our other business groups. In particular, our Innovation agencies Williams Murray Hamm and Identica have benefitted from the bridge created by our WMHAdaptive offer which links top-tier creative to cost-effective activation and this is proving very attractive to clients. We are actively considering further investment in this area.
Our Instore business, Arken POP International, continued its superb performance as it maintained its focus on the resilient health and beauty market. Arken’s other markets such as consumer electronics have declined due to the well-publicised demise of high street retailers in the sector but this has been more than offset by additional business generated from existing health and
We have some potential acquisitions under review but we will proceed with our usual prudence. Our acquisitions may be infrequent but those completed have added considerable value to our business.
We completed a further share trading opportunity for shareholders in May, with £1.22m changing hands in matched bargains for Writtle shares. This annual share trading window has again proved popular with shareholders by providing an element of liquidity not usually found in private companies.
Trading remains strong despite the various economic and political uncertainties that dominate our news channels. The markets in which we operate change quickly but they remain substantial and allow our ambitious and talented management teams plenty of opportunities for growth.
20 September 2018