Writtle half year report and dividend announcement
I am pleased to report another satisfactory first half performance, despite the third lockdown delaying a full recovery across the group until the second quarter.
RESULTS AND DIVIDENDS
Turnover was £31.45m (2020: £33.30m) and headline profit before tax was £1.98m (2020: £2.00m). Exceptional items included a profit of £0.66m on the sale of the group’s share in one of its properties which increased profit before tax to £2.22m (2020: £1.57m)
Net cash balances on 30 June 2021 were £11.87m (2020: £12.96m) despite the payment of over £5m in dividends in the period, reflecting a further period of strong cash generation.
An interim dividend of 6.75p (2020: 6.25p) will be paid on 29 October 2021 to shareholders on the register on 8 September 2021. We have not considered payment of a further special dividend at this time as we have several acquisition opportunities under review which would utilise the excess cash available.
REVIEW OF TRADING
The performance of our three business groups is shown on page 7 of this report.
Our Innovation businesses were once again the strongest profit generators in the first half. Although revenues and profits declined over the prior year, this reflected a strong comparative period rather than an underlying trend. Epoch led the way with an excellent first half performance, and all other agencies were profitable with a number of high-profile campaigns completed.
Our Implementation businesses increased profits despite a small decline in revenues, but the most notable feature of this group’s performance in the period was three major new business wins under the Branded banner. Revenues from these wins are coming on stream in the second half and validate the investment to date in Branded’s proprietary technology system ‘MyBrandstream’, which was the cornerstone of the successful pitches against strong competition.
Our Instore businesses again bore the brunt of the economic impact of the first quarter lockdown, with many of their customers’ retail outlets closed until the second quarter. Turnover and profits were flat over a similarly impacted period last year and judicious use of the Coronavirus Job Retention Scheme was again necessary to protect jobs in these businesses. We are expecting the usual seasonal uplift in trading in these businesses and most furloughed employees are already back at work.
The second half has started well. Our businesses have adapted to new ways of working and the quality of our service to clients has been enhanced not compromised. With the economy returning to pre-pandemic levels and our clients looking to expand rather than consolidate, I look forward to reporting on a good full year performance next April.
8 September 2021