TIDMBCG
RNS Number : 8510V
Baltic Classifieds Group PLC
06 December 2023
BALTIC CLASSIFIEDS GROUP PLC
HALF YEAR RESULTS FOR THE SIX MONTHSED 31 OCTOBER 2023
Baltic Classifieds Group PLC ("BCG" and the "Group"), the
leading online classifieds group in the Baltics , announces half
year results for the six months ended 31 October 202 3 (H1
2024)
Key highlights
-- We have continued to build on the momentum seen in 2023, with
strong results reported across all our major businesses,
underpinned by our significant leadership position(1) versus
competitors.
-- Business customer numbers remained strong, while individual
advertising volumes achieved record highs on all major
platforms.
-- Revenue grew 20% to EUR 35.8 million (H1 2023: EUR 29.8
million). Core classifieds revenue streams of B2C and C2C, which
together comprise 90% of total revenues, grew 25% and 19%
respectively.
-- EBITDA(2) grew 22% to EUR27.8 million (H1 2023: EUR22.8
million). Our EBITDA margin(2) expanded to 78% (H1 2023: 77%).
-- Adjusted basic EPS(2) grew 22% to 4.6 EUR cents (H1 2023: 3.8
EUR cents) while basic EPS for the period grew to 3.1 EUR cents (H1
2023: 2.3 EUR cents).
-- Cash generated from operating activities grew 21% to EUR29.1
million (EUR24.0 million in H1 2023), with cash conversion (2)
maintained at 99% (H1 2023: 99%) .
-- Interim dividend declared up 25% at 1.0 EUR cent per share
(H1 2023: 0.8 EUR cent per share), having already returned EUR 7.0
million through ongoing share buybacks programme and reduced gross
debt by EUR 15.0 million in the reporting period.
Financial highlights
EURm (unless stated otherwise) H1 2024 H1 2023 Change
--------------------------------------- -------- ---------------- -------
Auto 13.7 10.7 28%
Real Estate 8.8 7.3 20%
Jobs & Services 7.1 6.0 18%
Generalist 6.3 5.8 9%
Group revenue 35.8 29.8 20%
Operating cost excluding depreciation
and amortisation (D&A) (8.0) (7.0) 14%
--------------------------------------- -------- ---------------- -------
EBITDA (2) 27.8 22.8 22%
EBITDA margin (2) 78% 77% 1% pt
D&A (8.4) (8.5) (1%)
--------------------------------------- -------- ---------------- -------
Operating profit 19.4 14.3 36%
Add back: amortisation of acquired
intangibles 8.1 8.1 0%
--------------------------------------- -------- ---------------- -------
Adjusted operating profit (2) 27.5 22.4 23%
Profit for the period 15.3 11.5 33%
Adjusted net income (2) 22.7 18.9 20%
Basic EPS (EUR cents) 3.1 2.3 34%
Adjusted basic EPS (2) (EUR cents) 4.6 3.8 22%
--------------------------------------- -------- ---------------- -------
-- Adjusted operating profit (2) of EUR27.5 million (H1 2023:
EUR22.4 million) is tracking close to EBITDA (2) .
-- Adjusted net income (2) grew 20% to EUR 22.7 million (H1
2023: EUR 18.9 million) with the only adjustment to profitability
being the amortisation of acquired intangibles and the
corresponding tax impact. Profit for the period grew 33% to EUR15.3
million (H1 2023: EUR11.5 million).
-- Net debt(2) fell by EUR8.4 million to EUR36.9 million (2023:
EUR45.3 million) and we ended the half-year with leverage(2) at
0.7x (2023: 1.0x). Gross loan balance decreased to EUR55.0 million
(2023: EUR70.0 million).
Operational results
-- At the start of the new financial year, we implemented C2C
pricing and packaging changes across all our business units.
-- We implemented our annual B2C price actions in Auto and Real
Estate between September and October 2023, supported by
improvements in products and packaging. In Jobs & Services,
this began in September 2023 and are being rolled out over the
subsequent 12 months.
-- During H1 2024 we improved our products and services, including:
-- Auto: We have upgraded and expanded car history check service
to the whole Lithuanian market. It is a stand-alone product as well
as a potential element of the higher-tier business customer
package. Another data product was also introduced in Autoplius.lt
which allows business customers to analyse competitors and
benchmark their performance against other market players.
-- Real Estate: We introduced a new prominence package for
business clients in Aruodas.lt and KV.ee. This package includes
bump-ups of listings which effectively elevates the number of
impressions and leads. We also upgraded KV.ee property history tool
which helps buyers better navigate in the latest developments
within the real estate market.
-- Jobs and Services: in CVbankas.lt we developed tools to
simplify the selection of job candidates. Employers can now set the
filters to quickly identify the best candidates which fit their
criteria and can quickly access potential employees in the CV
database. Paslaugos.lt introduced the option to sign a service
agreement between the service provider and the customer within the
platform, which is viewed as a convenient tool for users and a
valuable data source for the platform.
-- Generalist: In Osta.ee we introduced the 'buy now, pay later'
functionality to provide an easy alternative for buyers to finance
their purchases.
-- The changes to our B2C packages and prices led to increased yields(3) in all business lines:
-- Auto: +31%,
-- Real Estate: +27%,
-- Jobs: +6%.
-- Traffic to our websites averaged 57.9 million visits per
month(4) , which implies the Baltic population visited our sites 10
times every month.
-- We maintained our significant leadership position over the
nearest competitor for all our largest sites compared to 2023:
Autoplius.lt at 8x (6x in 2023), Auto24.ee at 39x (29x in 2023),
Aruodas.lt at 21x (21x in 2023), KV.ee plus City24.ee in Estonia at
17x (16x in 2023), CVBankas.lt at 8x (9x in 2023) and Skelbiu.lt at
23x (19x in 2023).
-- Auto and Jobs business customer numbers reached record highs
- up 5% and 7% accordingly, Real Estate broker numbers were strong
and in line with last year.
-- We have more active C2C ads: Auto up 37%, Real Estate up 20%
and Services up 40%. Listings on our Generalist(5) platform grew
8%.
-- We also implemented changes to our C2C packages and prices,
which combined with rising market prices of the goods and services
advertised on our sites, have resulted in increased yields in all
business lines. It is worth noting that the yield per active ad is
arithmetically diluted due to ads staying on the site for longer
durations. Yields per active ad were: Auto (6%), Real Estate (2%),
Services +8%. In Generalist(5) revenue per listing grew +1%.
-- H2 2023 and H1 2024 grew exceptionally in terms of the volume
of active ads in our Real Estate and Auto verticals. This was a
result of a normalized speed of sale in these verticals, which we
consider more typical.
-- The number of BCG employees during the H1 2024 was maintained
at 134 FTEs (end of 2023: 134 FTEs). At the end of the period the
split of women to men was 50:50.
-- We have achieved our goal to reduce our emissions by at least
42% by 2030 and are aiming to achieve net zero by 2050.
Furthermore, we are striving to meet our targets of having at least
80% of our electricity come from renewable energy sources by 2025
and 100% by 2030, and of having all our company cars be electric or
low emission by 2030.
Justinas Šimkus, Chief Executive Officer of Baltic Classifieds
Group, said:
"The stars have aligned extremely well for all of our businesses
as we have seen record numbers of advertisers, as well as an
improved competitive position and increased yields across our
entire portfolio.
Importantly, we have seen strong growth in our core revenue
streams of B2C and C2C, with a 25% and 19% increase respectively.
This is a strong indication that customers continue to place their
trust in our services, despite the ongoing macroeconomic
uncertainty. This growth is a testament to the reliability and
effectiveness of our platform in facilitating transactions for our
customers.
Our strategic pricing and packaging events, for C2C in the
beginning of the financial year and B2C in the end of the reporting
period, have also contributed to this success, setting us up to
build on this momentum in second half of the year.
I just wanted to express my sincere gratitude to the entire team
for their hard work and dedication. It is because of their efforts
that we have achieved the success, and I am truly honoured to be a
part of such a talented and devoted team."
Outlook
-- The Board remains confident in the outlook for the second
half of the year, underpinned by the pricing and packaging changes
that have already been successfully implemented and the continuing
momentum across our business.
-- The Board is upgrading guidance for the full year 2024 to a
range of 18-19% revenue growth. The lower end of this range is
based on an unchanged, increasingly conservative, guidance of 15%
revenue growth for H2 2024 as compared to H2 2023.
-- The Board expects EBITDA margin for financial year 2024 to
expand by around 1 percentage point when compared to 2023 and that
EBITDA margins will continue to expand incrementally going
forward.
-- The Board remains confident with the existing capital
allocation policy in the absence of M&A opportunities, which
remains focused on increasing dividends, share buybacks (subject to
market and regulatory limitations on our ability to do so) and
reducing debt.
(1) Audience lead. Leadership position based on time on site
using Similarweb data, except for Auto24. Auto24 has no significant
vertical competitor, next relevant player is Generalist portal,
therefore, the relative auto market share for this Generalist
portal is calculated by multiplying time on site by the percentage
of active auto listings out of total listings at the end of the
reported period.
(2) Alternative performance measure, see note 3 for further
details.
(3) Yield refers to the change in average monthly revenue per
active C2C ad (in Auto, Real Estate, Services), per C2C listing (in
our Generalist) or ARPU in B2C. ARPU is monthly average revenue per
user (in Auto - per dealer, in Real Estate - per broker, in Jobs -
per company).
(4) Note: there were changes in the cookie consent policy
(general obligation to consent with all cookies that are not
strictly necessary for website operation) and internet browsers
policy of more strict control of 3rd party cookies on websites.
Both mentioned reasons result in loss of data collected by web
analytics services like Google Analytics.
(5) Skelbiu.lt only, which is our main Generalist portal.
Analyst presentation dates/Conference call details
A presentation for analysts will be held via video webcast and
conference call at 9:30 am GMT, Wednesday 6 December 2023. Details
below.
The live webcast will be available at:
https://www.investis-live.com/balticclassifieds/655c784e464d140d00f4af52/gsaw
Participants joining via telephone:
United Kingdom (Toll-free) +44 800 358 1035
United Kingdom +44 20 3936 2999
United States +1 646 787 9445
United States (Toll-free) +1 855 979 6654
Lithuania +370 521 40 826
All other locations +44 20 3936 2999
Global Dial-In Numbers
Access code: 335480
Press *1 to ask a question, *2 to withdraw your question, or *0
for operator assistance.
Accessing the telephone replay
A recording will be available until Wednesday, December 13,
2023
United Kingdom (Toll-free) +44 808 304 5227
United Kingdom +44 20 3936 3001
United States +1 845 709 8569
United States (Toll-free) +1 855 762 8306
All other locations +44 20 3936 3001
Access Code: 242954
For media inquiries:
Lina Mačien
Chief Financial Officer
investorrelations@balticclassifieds.com
About Baltic Classifieds Group PLC
Baltic Classifieds Group PLC ("BCG") is the leading online
classifieds group in the Baltics, which owns and operates fourteen
leading vertical and generalist online classifieds portals in
Lithuania, Estonia and Latvia. BCG's online classifieds portfolio
comprises four business lines - automotive, real estate, jobs &
services and generalist. In the 6 months ended 31 October 2023, the
Group's portals were visited on average 57.9 million times a month
(Source: Google Analytics), making the Group one of the largest
online companies in the region (Source: Google Analytics).
The Group listed on the London Stock Exchange in July 2021 and
is a member of the FTSE 250 Index.
For more information, please visit
https://balticclassifieds.com/
Summary of operating performance in H1 2024
Market Context
-- In Auto market, consumer demand has normalised to pre-COVID
levels with promising autumn figures. The easing of sourcing issues
has led to a 4% increase in car transactions(1) , yet there's room
to reach pre-pandemic levels. Car prices are rising at a slower 10%
rate(2) compared to last year, reflecting consumers' preference for
newer, pricier vehicles rather than inflationary factors. Average
sale times(2) have lengthened, leading to an expansion in supply.
However, dealers are benefiting from increasing transaction volumes
and average car prices continuing to rise.
-- Due to increased prices for construction materials and
consequently postponed start of construction by some developers
together with a rise in EURIBOR rates, the total number of Real
Estate transactions was down 12%(3) compared to H1 2023. However,
the average price of an apartment has increased by 8%(4) .
-- The Lithuanian job market continues to demonstrate resilience
and adaptability. The tension due to labour shortages persists and
the unemployment rate in the country remains low. Despite a small
spike in unemployment during H2 2023, during H1 2024 Lithuanian
employment market again witnessed a decrease in unemployment
levels. These levels range between 5.4% and 5.9%(5) , aligning
closely with the figures from the same period in the previous
year.
-- eCommerce activities have increased during the past few
years. The numbers of online buyers and sellers grew with
transactions moving online. This has helped the growth of our
generalist platforms and ancillary services like deliveries.
Revenue
Group revenue grew 20% to EUR35.8 million (H1 2023: EUR29.8
million) as a consequence of a growth in all four business lines,
underpinned by strength in the core business:
-- Auto business line grew 28%. B2C grew 38% and C2C grew 25%.
-- Real Estate business line grew 20%. B2C grew 26% and C2C grew 17%.
-- Jobs & Services business line grew 18%. B2C (Jobs) grew
13% and C2C (mainly Services) grew 49%.
-- Generalist business line, which is largely C2C, grew 9%.
The share of core classifieds revenue streams, B2C and C2C, grew
to 90% of total Group revenue (H1 2023: 88%). B2C revenue,
representing 50% of Group revenue, grew 25% and C2C, representing
40% of Group revenue, grew 19%.
The main drivers of revenue growth continue to be an increase in
the number of advertisements/ listings across our business sectors,
an increasing number of advertisers across our business sectors
except Real Estate, and an increase in the average spend per
customer/advertisement across all our businesses.
In May 2023, at the beginning of the period currently reported
on, we introduced C2C pricing and packaging changes on most of our
portals, reflected in the reported revenue numbers. In September
and October 2023, we introduced B2C price and package changes for
the Real Estate, Auto and Jobs portals, reflecting improvements to
our proposition. These will contribute more to the second half of
the year.
H1 2024 H1 2023 Change,
%
----------------------------------------- ------------------ ------------------- --------
Auto B2C - monthly number of dealers 3,749 3,577 5%
Real Estate B2C - monthly number
of brokers 4,917 4,941 (0%)
Jobs* B2C - monthly number of companies 2,377 2,224 7%
Auto C2C - monthly number of active
ads 34,695 25,379 37%
Real Estate C2C - monthly number
of active ads 20,140 16,733 20%
Services* monthly number of active
ads 8,243 5,876 40%
Generalist** monthly number of listings 100,873 93,365 8%
Auto B2C - monthly ARPU(6) (EUR) 271 207 31%
Real Estate B2C - monthly ARPU (EUR) 172 136 27%
Jobs B2C - monthly ARPU (EUR) 411 388 6%
Auto*** C2C - monthly revenue per
active ad (EUR) 20 22 (6%)
Real Estate C2C - monthly revenue
per active ad (EUR) 23 23 (2%)
Services monthly revenue per active
ad (EUR) 23 21 8%
Generalist revenue per listing (EUR) 7 7 1%
* In Jobs & Services business line B2C revenue comes from
Jobs only; C2C revenue principally comes from Services portals,
therefore only Services platforms' information is presented.
** Skelbiu.lt only, which is our main Generalist portal.
*** T he average monthly revenue per active C2C auto listing
based on the C2C revenue generated by auto listings only, excluding
any C2C revenue generated from vehicle parts, vehicles other than
autos and other C2C listings.
We continue seeing strengthening network effects across all
business units as a growing number of customers drive content,
which in turn encourages greater engagement for our audience.
Overall, the number of B2C customers remained very strong:
-- Auto dealers grew by 5% mainly due to small dealers switching
to B2C subscriptions rather than placing advertisements as if they
were C2C customers.
-- Real Estate brokers were flat.
-- The number of Jobs customers grew by 7%, primarily due to a
strengthened job market compared to the same period last year,
which a year ago faced challenges from rising energy prices and
cautious economic forecast for the winter. Currently the situation
seems more stable, which resulted in an increase in the number of
companies expanding or seeking new employees.
In C2C, the number of active ads and listings grew across all
business lines. In Real Estate, Auto and Generalist the growth was
primarily driven by the underlying market conditions, i.e. longer
selling time (which means each advert is active for more time). The
growth in Services active ads number was driven by the growing
client base using our platform.
In terms of ARPU in our B2C segment:
-- Auto ARPU was up 31% due to price and packaging changes
implemented mid-2023 (in September and October 2022) and most
recent price and packaging changes done in mid-2024 (in September
and October 2023). On top of that, the tailwind of recovering
inventory levels resulted in the utilization of more slots per
customer.
-- Real Estate ARPU was up 27% due to subscription fee and
packaging changes which took place mid-2023. The changes
implemented from September 2022 to January 2023 were aimed at both
growth in ARPU and incentivising customers to choose individual and
more expensive premium packages for brokers. This year's annual
pricing actions were implemented during September and October
2023.
-- Jobs ARPU was up 6% due to reduced volume discounts. CVbankas, being the market leader, is well-positioned to take advantage of a vibrant employment market with low unemployment rates, ensuring continued revenue growth. Price changes were implemented on new and renewing customers in September 2022 and were rolling out to the customers through the 12-month cycle until autumn this year. This year the new prices were introduced in September 2023, and like last year, are rolling out to the customers through the 12-month cycle.
In terms of the yields(6) in our C2C segment:
-- We implemented price changes and observed an uptick in
average transaction values which have a positive impact on our
revenues due to value-based pricing. However, arithmetically the
monthly revenue per active advertisement in Auto and Real Estate
decreased by 6% and 2% respectively, as a consequence of customers
opting for longer packages, leading to extended durations of
advertisements on our sites.
-- Services average monthly revenue per active advertisement was
up 8% mainly due to price changes and an increased usage of our
value-added services.
-- Generalist average revenue per listing was up 1% due to price
changes and rising average transaction values in the automotive and
real estate categories, partly offset by change in mix of ads
categories.
Operating costs
Our costs represent a relatively small proportion of our revenue
and, due to continued cost management, inflation did not
significantly affect our profitability.
H1 2024 H1 2023 Change
------------------------------------------- --------- --------- -------
Labour costs 5.3 4.4 19%
Advertising and marketing services 0.5 0.4 15%
IT expenses 0.4 0.3 28%
Other 1.8 1.8 (1%)
------------------------------------------- --------- --------- -------
Operating cost excluding depreciation and
amortisation (D&A) 8.0 7.0 14%
D&A 8.4 8.5 (1%)
------------------------------------------- --------- --------- -------
Operating cost 16.4 15.5 6%
Most of our operating costs are people costs. It is close to 15%
from Group revenue in both reported and a comparative period.
BCG team remained the same size as at the end of the year 2023.
However, our team grew by 4% to 134 FTEs if we compare to H1 2023
(on average, 128 FTEs). Investment in our people increased by 19%
to EUR5.3 million (H1 2023: EUR4.4 million). Most of the increase
in people costs was driven by annual salary reviews and the cost of
a performance share plan ("PSP") in the amount of EUR1.0 million
(H1 2023: EUR0.7 million).
Our marketing costs equal to 1.4% from revenue - we are a
portfolio of brands and spend less on external service providers
while advertising on our own sites for free. Other Group costs
comprise IT (1.2% from revenue) and general administrative expenses
(5.0% from revenue). We have supported a couple of non-governmental
organisations (NGOs) assisting Ukraine in the war situation in
their country and a local teachers' development organization
'Choosing to teach' by donating EUR0.1 million (H1 2023: EUR0.1
million).
Net finance expense
Our finance costs mainly comprise of interest costs (2% margin
plus Euribor until the 7th of July 2022 and 1.75% margin plus
Euribor since then) in the amount of EUR1.9 million (H1 2023: of
EUR1.0 million) and commitment fees relating to EUR10.0 million
unsecured and undrawn Revolving Credit Facility ("RCF").
Net debt and leverage
During H1 2024, EUR15.0 million of the existing debt has been
voluntarily repaid.
Compared to the end of 2023, net debt(7) was reduced by EUR8.4
million to EUR36.9 million (2023: EUR45.3 million) and we ended the
half-year with leverage (7) at 0.7x (2023: 1.0x).
EURm 31-Oct-23 30-Apr-23
----------------------------- --------------------- ---------------------
Bank Loan principal
amount 55.0 70.0
Customer credit balances(8) 2.3 2.4
----------------------------- --------------------- ---------------------
Total debt 57.3 72.4
Cash (20.4) (27.1)
----------------------------- --------------------- ---------------------
Net debt 36.9 45.3
EBITDA (7) LTM 51.1 46.0
----------------------------- --------------------- ---------------------
Leverage 0.7x 1.0x
Tax
The Group tax charge of EUR2.3 million (H1 2023: EUR1.7 million)
represented an effective tax rate of 13% (H1 2023: 13%). The Group
tax charge is a net of:
-- current tax expense of EUR2.9 million (H1 2023: EUR2.5 million); and
-- change in deferred tax which is positive EUR0.7 million and
mainly consists of deferred tax from acquired intangibles (H1 2023:
EUR0.8 million which included EUR0.7 million deferred tax from
acquired intangibles).
Profitability and Alternative Performance Measures
The Group has identified certain Alternative Performance
Measures ("APMs") that it believes provide additional useful
information on the performance of the Group. These APMs are not
defined within IFRS and are not considered to be a substitute for,
or superior to, IFRS measures. These APMs may not be necessarily
comparable to similarly titled measures used by other
companies.
Directors use these APMs alongside IFRS measures when budgeting
and planning, and when reviewing business performance.
For APM descriptions and reconciliation to IFRS measures, see
note 3.
H1 2024 H1 2023 Change
------------------------------------------------ --------- --------- -------
EBITDA (7) 27.8 22.8 22%
EBITDA margin (7) 78% 77% 1% pt
D&A (8.4) (8.5) (1%)
------------------------------------------------ --------- --------- -------
Operating profit 19.4 14.3 36%
Add back: amortisation of acquired intangibles 8.1 8.1 0%
------------------------------------------------ --------- --------- -------
Adjusted operating profit (7) 27.5 22.4 23%
Net finance costs (1.8) (1.1) 63%
------------------------------------------------ --------- --------- -------
Profit before tax 17.6 13.2 33%
Income tax expense (2.3) (1.7) 35%
------------------------------------------------ --------- --------- -------
Profit for the period 15.3 11.5 33%
Add back: deferred tax impact of acquired
intangibles amortisation (0.7) (0.7) -
------------------------------------------------ --------- --------- -------
Adjusted net income (7) 22.7 18.9 20%
Basic EPS (EUR cents) 3.1 2.3 34%
Adjusted basic EPS (7) (EUR cents) 4.6 3.8 22%
This year there were no add-backs to our EBITDA. Our EBITDA grew
22% to EUR27.8 million (H1 2023: EUR22.8 million). The EBITDA
margin was 78% (H1 2023: 77%).
Adjusted operating profit grew to EUR27.5 million (H1 2023:
EUR22.4 million) and reported operating profit was EUR19.4 million
(H1 2023: EUR14.3 million).
BCG intends to return one third of adjusted net income each year
via an interim and final dividend. For this purpose, we show
amortisation of acquired intangibles and the tax effect on it
together with the adjusting items in the table above. Adjusted net
income grew 20% and reached EUR22.7 million (H1 2023: EUR18.9
million). Profit for the period grew to EUR15.3 million (H1 2023:
EUR11.5 million).
Earnings per Share ("EPS")
Basic EPS was 3.1 EUR cents based on the weighted average number
of shares of 492,016,798. (H1 2023: 2.3 EUR cents based on weighted
average number of shares of 497,524,476). Similarly to last half
year, there was no dilution effect on EPS from the employee share
arrangements.
Adjusted basic EPS grew 22% and was 4.6 EUR cents (H1 2023: 3.8
EUR cents).
Cash flow and cash conversion
Cash generated from operating activities grew 21% (from EUR24.0
million in H1 2023 to EUR29.1 million). Cash conversion(7) was
maintained at 99% (H1 2023: 99%). Net cash inflow from operating
activities grew 12% to EUR24.2 million (H1 2023: EUR21.6
million).
Capital allocation
Net cash generated from operating activities was used for the
below:
-- Paying the final dividend for the year 2023 of 1.7 EUR cents
per share in October 2023, totalling EUR8.4 million.
-- Reducing the loan liability by partially paying down the debt
in the amount of EUR15.0 million (H1 2023: EUR7.0 million).
-- Buying back Company shares for cancellation for EUR7.0 million (H1 2023: EUR0.7 million).
The capital allocation policy remains unchanged. We intend to
use all the cash we generate in a year, within that same year or
shortly thereafter for the below:
-- BCG intends to return one third of adjusted net income each
year via an interim and final dividend, split approximately one
third and two thirds, respectively. The interim dividend for the
year 2024 will be paid on 24 January 2024 to members on the
register on 15 December 2023. Dividends are declared and paid in
euros. Shareholders can elect to have dividends paid in British
Pound Sterling. Currency election deadline for 2024 interim
dividend is 3 January 2024.
-- We will continue considering value-creating M&A
opportunities. All options for financing attractive acquisition
opportunities remain open, including using own cash, increasing our
debt and even seeking additional equity capital. However, using own
cash is the most likely and this would most likely not affect
dividends but might reduce capacity for share buy-backs.
-- We intend using a combination of share buy-backs and debt
repayment from the balance of cash.
We also intend to keep our capital policy under review and may
revise it from time to time.
Going concern
The Group generated significant cash from operations during the
period. As of 31 October 2023, the Group had drawn none of the
EUR10.0 million unsecured Revolving Credit Facility ("RCF") and had
cash balances of EUR20.4 million. The EUR10.0 million RCF is
committed until July 2026.
(1) Source: State Enterprise Regitra, Autotyrimai and
Maanteeamet
(2) Company information
(3) Source: State Enterprise Centre of Registers Lithuania, Land
Register Latvia, Land Board Estonia
(4) Average apartment prices based on apartment prices in
Vilnius, Riga and Tallinn. Source: Swedbank (prices per square
metre)
(5) September 2023 data from the Department of Statistics of
Lithuania
(6) Yield refers to the change in average monthly revenue per
active C2C ad (in Auto, Real Estate, Services), per C2C listing (in
our Generalist) or ARPU in B2C. ARPU is monthly average revenue per
user (in Auto - per dealer, in Real Estate - per broker, in Jobs -
per company).
(7) Alternative performance measure, see note 3 for further
details.
(8) Customer credit balances relate to amounts held by customers
in e-wallets and are included within trade and other payables as
well as cash and cash equivalents.
Principal risks and uncertainties
The Group is exposed to a number of risks and uncertainties in
its business which could impact its ability to effectively execute
its strategy over the remaining six months of the year and could
cause actual results to differ materially from expected and/or
historical results.
The Board has considered the principal risks and uncertainties
for the first half and the remaining half of the financial year and
will be reporting on them more fully in the Annual Report and
Accounts for the year ended 30 April 2024 .
Geopolitical situation in the region
Any sort of conflict, tension between countries or even an
association with it may have impact on trade, security, and
political relations. Further escalation or prolonged war in Ukraine
could result in the unrest and instability in the Baltic countries
as well. Such situations could impact consumer behaviour (e.g.
reducing spending / investing), seller activity (e.g. disruption in
retailing), or impact investor perception of the business.
Political and macroeconomic situation
Economic conditions (whether due to economic cycle or supply
chain disruption) could lead to a retraction in the underlying
markets, a reduction in stock, consumer wallets and a reduction in
listers budgets / appetite to spend, which all have the potential
to reduce revenue. Economic conditions can also impact the cost
pressures (such as wage growth, price inflation, interest rates,
etc.).
Disruption to our customer and / or supplier operations
Disruption to the Group's customers' and / or suppliers'
operations conducting day-to-day business may impact on the Group's
ability to deliver desired results.
Competition
The Group might be affected by new competitors in existing
markets or new spheres of activities. Also, changes in technology
or consumer behaviour affect the way that people search for cars,
real estate, jobs or generalist products, which may lead to a loss
of consumer audience. There is a risk of a new entrant to the
market with a new business model (for example, providing services
free of charge), affecting the Group's audience, content and
revenue. Furthermore, as the Group diversifies into new and
adjacent markets, the competitor set widens.
Laws & regulations
The Group is subject to certain competition and antitrust laws.
Antitrust laws may limit the market power and pricing or other
actions of any particular firm.
Companies can be subject to legal action or investigations and
proceedings by national and supranational competition and antitrust
authorities and claims from its clients and business partners for
alleged infringements of competition and antitrust laws, which
could result in fines or other forms of liability or otherwise
damage the companies' reputation. Such laws and regulations could
limit or prohibit the ability to grow in certain markets.
Future acquisitions by the Group could be impacted by applicable
antitrust laws and could be unsuccessful if the necessary
competition approvals by competition authorities are not
obtained.
Technology
Cyber-attacks. The Group is at greater risk from cyber threats
due to its large scale and prominence. As the business is entirely
dependent on information technology to provide its services,
successful attacks have the potential to directly affect
revenue.
Major data breach. Cyber-attack or the Group's own failures,
resulting in disabling of platforms or systems, or resulting in a
major data breach, could have an adverse impact on the Group's
reputation, loss of trust and loss of revenue and / or profits.
Data breaches, a common form of cyber-attack, can have a massive
negative business impact and often arise from insufficiently
protected data.
Disruption to availability of services. The availability and
reliability of services to the Group's customers is of paramount
importance. Any downtime or disruption to consumer or advertiser
services can have an adverse impact on the business (complaints and
credits for customers, consumer usage, and potential reputational
impact).
Therefore, the availability of third-party services, which are
necessary when using the services provided by the Group, such as
internet provision, mobile communication, are also crucial.
Acquisition risk
The Group might make an unsuccessful acquisition or integration
of an acquisition which in turn could lead to reduced profits,
impairment charge.
Climate change
From a long-term perspective, the Group is subject to physical
climate risks directly related to climate change and transitional
climate risks, which may arise due to transitioning to a
lower-carbon economy. Increased severity of extreme weather events
due to accelerating global warming may result in disruption to
provision of services from our service providers, affect the
availability of websites and change commercial customers'
behaviour.
New regulations relating to the reduction of carbon emissions
and increasing customer climate change awareness may affect the
Group's operations and the volume of listings and encourage us to
adapt our business to the new regulations and changing market
tendencies.
Forward-looking statement
Certain statements in this results announcement and update on
trading constitute forward-looking statements. Any statement in
this document that is not a statement of historical fact including,
without limitation, those regarding the Company's future plans and
expectations, operations, financial performance, financial
condition and business is a forward-looking statement. Such
forward-looking statements are subject to known and unknown risks
and uncertainties that may cause actual results to differ
materially. These risks and uncertainties include, among other
factors, changing economic, financial, business or other market
conditions. These and other factors could adversely affect the
outcome and financial effects of the plans and events described in
this statement. As a result, you are cautioned not to place
reliance on such forward-looking statements. Nothing in this
statement should be construed as a profit forecast.
Responsibility statement of the directors in respect of the half
yearly financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted
for use in the UK;
-- the interim management report includes a fair review of the
information required by Disclosure Guidance and Transparency Rules
of the Financial Conduct Authority ("DTR") 4.2.7R and 4.2.8R
namely:
(a) an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(b) related party transactions that have taken place in the
first six months of the current financial year and that have
materially affected the financial position or performance of the
entity during that period; and any changes in the related party
transactions described in Annual report and Accounts 2023 that
could do so.
Justinas Šimkus Lina Mačien
Chief Executive Officer Chief Financial Officer
6 December 2023 6 December 2023
Condensed Consolidated Interim Statement of Profit or Loss and
Other Comprehensive Income
For the six months ended 31 October 2023
Year
ended 30
6 months 6 months
ended 31 ended 31 April 202
October 2023 October 2022 3
Notes (EUR thousands) (EUR thousands) (EUR thousands)
----------------- -----------------
Revenue 5 35,791 29,778 60,814
Other income 23 2 9
Expenses 6 (16,447) (15,497) (31,767)
----------------- -----------------
Operating profit 19,367 14,283 29,056
----------------- -----------------
Finance income 7 132 1 7
Finance expenses 7 (1,914) (1,095) (2,698)
----------------- -----------------
Net finance costs (1,782) (1,094) (2,691)
----------------- ----------------- -----------------
Profit before tax 17,585 13,189 26,365
----------------- ----------------- -----------------
Income tax expense 8 (2,250) (1,669) (3,150)
----------------- ----------------- -----------------
Profit for the period 15,335 11,520 23,215
----------------- ----------------- -----------------
Other comprehensive - - -
income/(loss)
----------------- ----------------- -----------------
Total comprehensive
income for the period 15,335 11,520 23,215
----------------- ----------------- -----------------
Attributable to:
----------------- ----------------- -----------------
Owners of the Company 15,335 11,520 23,215
----------------- ----------------- -----------------
Earnings per share
(EUR cents)
----------------- ----------------- -----------------
Basic and diluted 9 3.12 2.32 4.68
----------------- ----------------- -----------------
Condensed Consolidated Interim Statement of Financial
Position
At 31 October 2023
Notes 31 October 31 October
2023 2022 30 April
(EUR thousands) (EUR thousands) 2023
(EUR thousands)
Assets
Property, plant and
equipment 561 518 502
Intangible assets and
goodwill 10 377,464 393,857 385,633
Right-of-use assets 835 317 884
Deferred tax assets 241 - 153
Other non-current receivables - 35 -
Non-current assets 379,101 394,727 387,172
----------------- ----------------- -----------------
Trade and other receivables 11 4,156 3,480 3,522
Cash and cash equivalents 20,449 22,220 27,070
Current assets 24,605 25,700 30,592
----------------- ----------------- -----------------
Total assets 403,706 420,427 417,764
----------------- ----------------- -----------------
Equity
Share capital 12 5,745 5,817 5,783
Own shares held 13 (5,854) (6,252) (6,252)
Capital reorganisation
reserve (286,904) (286,904) (286,904)
Capital redemption
reserve 77 5 39
Retained earnings 620,437 616,410 619,986
Total equity 333,501 329,076 332,652
----------------- ----------------- -----------------
Loans and borrowings 15 54,413 75,615 69,231
Deferred tax liabilities 3,660 4,999 4,223
Non-current liabilities 58,073 80,614 73,454
----------------- ----------------- -----------------
Current tax liabilities 1,382 892 1,784
Loans and borrowings 15 395 301 462
Trade and other payables 16 6,011 5,864 5,530
Contract liabilities 4,344 3,680 3,882
Current liabilities 12,132 10,737 11,658
----------------- ----------------- -----------------
Total liabilities 70,205 91,351 85,112
----------------- ----------------- -----------------
Total equity and liabilities 403,706 420,427 417,764
----------------- ----------------- -----------------
Condensed Consolidated Interim Statement of Changes in
Equity
For the six months ended 31 October 2023
No Own
t e shares Capital Capital
Share Share held reorganisation redemption Retained Total
capital premium reserve reserve earnings equity
(EUR
(EUR thousands) (EUR thousands) thousands) (EUR thousands) (EUR thousands) (EUR thousands) (EUR thousands)
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Balance at 1
May 202 2 5,822 - (3,418) (286,904) - 611,877 327,377
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Profit for the
period - - - - - 11,520 11,520
Other - - - - - - -
comprehensive
income
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Total
comprehensive
income - - - - - 11,520 11,520
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Transactions
with owners:
Share-based
payments 19 - - - - - 662 662
Purchase of
shares
for
performance
share plan 13 - - (2,834) - - - (2,834)
Purchase of
shares
for
cancellation 12 (5) - - - 5 (694) (694)
Dividends 14 - - - - - (6,955) (6,955)
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Balance at 31
October 2022 5,817 - (6,252) (286,904) 5 616,410 329,076
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Balance at 1
May 2022 5,822 - (3,418) (286,904) - 611,877 327,377
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Profit for the
year - - - - - 23,215 23,215
Other - - - - - - -
comprehensive
income
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Total
comprehensive
income - - - - - 23,215 23,215
Transactions
with owners:
Share-based
payments 19 - - - - - 1,567 1,567
Tax impact of
employee
share
schemes - - - - - 20 20
Purchase of
shares
for
performance
share plan 13 - - (2,834) - - - (2,834)
Purchase of
shares
for
cancellation 12 (39) - - - 39 (5,775) (5,775)
Dividends 14 - - - - - (10,918) (10,918)
Balance at 30
April 2023 5,783 - (6,252) (286,904) 39 619,986 332,652
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Balance at 1
May 202 3 5,783 - (6,252) (286,904) 39 619,986 332,652
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Profit for the
period - - - - - 15,335 15,335
Other - - - - - -
comprehensive
income
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Total
comprehensive
income - - - - - 15,335 15,335
Transactions
with owners:
Share-based
payments 19 - - - - - 959 959
Tax impact of
employee
share
schemes - - - - - (20) (20)
Exercise of
employee
share schemes 13 - - 398 - - (395) 3
Purchase of
shares
for
cancellation 12 (38) - - - 38 (7,069) (7,069)
Dividends 14 - - - - - (8,359) (8,359)
Balance at 31
October 2023 5,745 - (5,854) (286,904) 77 620,437 333,501
--------------- --- ---------------- ---------------- ----------- ---------------- ---------------- ---------------- ----------------
Condensed Consolidated Interim Statement of Cash Flows
For the six months ended 31 October 2023
Year ended
6 months
6 months ended 31
ended 31 October 30 April
October 2023 2022 2023
Notes (EUR thousands) (EUR thousands) (EUR thousands)
Cash flows from operating
activities
Profit for the period 15,335 11,520 23,215
Adjustments for:
Depreciation and amortisation 6 8,445 8,498 16,989
Amortisation of up-front fee - 203 -
and borrowing costs
Impairment loss on trade receivables - 57 -
Profit on property, plant
and equipment disposals - - (4)
Taxation 8 2,250 1,669 3,150
Net finance costs 7 1,782 891 2,691
Share-based payments 19 959 662 1,567
Other non-cash items - (2) 1
Working capital adjustments:
Increase in trade and other
receivables (634) (411) (448)
Increase in trade and other
payables 518 414 91
Increase in contract liabilities 462 537 739
----------------- ----------------- -----------------
Cash generated from operating
activities 29,117 24,038 47,991
Corporate income tax paid (3,324) (1,626) (3,122)
Interest received 132 - -
Interest and commitment fees
paid (1,739) (846) (2,208)
Net cash inflow from operating
activities 24,186 21,566 42,661
----------------- ----------------- -----------------
Cash flows from investing
activities
Acquisition of intangible
assets and property, plant
and equipment (177) (153) (251)
Proceeds from sale of property,
plant and equipment 3 - 4
Acquisition of business - (1,600) (1,600)
Net cash used in investing
activities (174) (1,753) (1,847)
----------------- ----------------- -----------------
Cash flows from financing
activities
Repayment of loans and borrowings 15 (15,000) (7,000) (14,000)
Payment of lease liabilities (155) (123) (247)
Purchase of own shares for
cancellation 12 (7,119) (580) (5,663)
Purchase of own shares for
performance share plan 13 - (2,834) (2,834)
Proceeds from exercise of
share options 13 3 - -
Dividends paid 14 (8,359) (6,955) (10,918)
Net cash used in financing
activities (30,630) (17,492) (33,662)
----------------- ----------------- -----------------
Net cash (outflow) / inflow
from operating, investing
and financing activities (6,618) 2,321 7,152
----------------- ----------------- -----------------
Differences on exchange (3) (15) 4
----------------- ----------------- -----------------
Net (decrease) / increase
in cash and cash equivalents (6,621) 2,306 7,156
----------------- ----------------- -----------------
Cash and cash equivalents
at the beginning of the period 27,070 19,914 19,914
Cash and cash equivalents
at the end of the period 20,449 22,220 27,070
----------------- ----------------- -----------------
1. General information
Baltic Classifieds Group PLC (the "Company") is a Company
incorporated in the United Kingdom and its registered office is
Highdown House, Yeoman Way, Worthing, West Sussex, United Kingdom,
BN99 3HH (Company no. 13357598). The condensed consolidated interim
financial statements as at, and for the six months ended, 31
October 2023 comprise the Company and its subsidiaries (together
referred to as the "Group"). The principal business of the Group is
operating leading online classifieds portals for automotive, real
estate, jobs and services, and general merchandise in the
Baltics.
2. Principles of preparation of condensed consolidated interim financial statements
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for
us in the UK and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
The annual financial statements of the Group are prepared in
accordance with UK-adopted international accounting standards. As
required by the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority, the condensed set of financial
statements has been prepared by applying accounting policies and
presentation that were applied in the preparation of the Company's
published consolidated financial statements for the year ended 30
April 2023.
The information for the year ended 30 April 2023 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditor has
reported on those accounts; their report (i) was unqualified, (ii)
did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying their report
and (iii) did not contain a statement under section 498 (2) or (3)
of the Companies Act 2006 in respect of the accounts for the year
to 30 April 2023.
Use of estimates and judgments
The preparation of the condensed consolidated interim financial
statements, in accordance with UK-adopted IFRS, requires management
to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised or in any future periods
affected.
In preparing these condensed interim financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the year ended 30 April 2023.
Going concern
The Directors have made an assessment of the Group's ability to
continue as a going concern covering a period of at least 12 months
from the date of approval of these condensed consolidated interim
financial statements and has a reasonable expectation that the
Group has adequate resources to continue in operational existence
over this period.
The Group meets its day-to-day working capital requirements from
cash balances, if needed the Group also has access to a revolving
credit facility that amounts to EUR10,000 thousand and is available
until July 2026. As at 31 October 2023 no amounts of the revolving
credit facility were drawn down. The bank loan matures in July 2026
and its availability is subject to continued compliance with
certain covenants, it becomes repayable on demand in the case of a
change in control. The Group voluntarily repaid EUR15,000 thousand
of the loan during the six months ended 31 October 2023, the
outstanding balance at the period end amounts to EUR55,000
thousand. In addition, the Company has bought-back its own shares
for EUR7,119 thousand and paid a dividend comprising EUR8,359
thousand of cash. The Group had cash balances of EUR20,449 thousand
at the period end.
When assessing the going concern of the Group, the directors
have reviewed the year-to-date financial information. During the
six months ended 31 October 2023 the Group has earned a profit of
EUR15,335 thousand and generated EUR24,186 thousand in operating
cash flow. The Directors also reviewed detailed financial forecasts
for the period ending 12 months from the date of approval of these
condensed consolidated interim financial statements. The
assumptions used in the financial forecasts are based on the
Group's historical performance and the Directors' experience of the
industry.
The Directors considered severe but plausible downside scenarios
taking into account the impact of any major data breach, adverse
changes to the competitive environment and a continuing
geopolitical tension in the neighbouring countries, and their
effect on revenues and costs. In all scenarios considered a
positive liquidity and covenants headroom is maintained during the
12 months after signing the half year report. The stress testing
indicates that, the Group will comply with its debt covenants and
have sufficient funds, to meet its liabilities as they fall due for
the assessment period.
Consequently, the Directors are confident that the Group will
have sufficient funds to continue to meet its liabilities as they
fall due for at least 12 months from the date of approval of these
condensed consolidated interim financial statements and therefore
have prepared these condensed consolidated interim financial
statements on a going concern basis.
3. Alternative performance measures (APMs)
In the analysis of the Group's financial performance, certain
information disclosed in the financial statements may be prepared
on a non-GAAP basis or has been derived from amounts calculated in
accordance with IFRS but are not themselves an expressly permitted
GAAP measure. These measures are reported in line with the way in
which financial information is analysed by management and designed
to increase comparability of the Group's year-on-year financial
position, based on its operational activity. These measures are not
designed to be a substitute for any of the IFRS measures of
performance and may not be directly comparable with other
companies' alternative performance measures. The key alternative
performance measures presented by the Group are:
-- Adjusted operating profit which is Operating profit after
adding back acquired intangibles amortisation. This measure helps
to provide an indication of the Group's ongoing business
performance.
-- EBITDA which is Operating profit after adding back
depreciation and amortisation. This measure is used internally to
assess business performance and in budgeting and forecasting.
-- EBITDA margin which is EBITDA as a percentage of revenue.
Progression in EBITDA margin is an important indicator of the
Group's operating efficiency.
-- Adjusted net income which is Profit for the period after
adding back post-tax impact of acquired intangibles amortisation.
It is used to arrive at Adjusted basic EPS and in applying the
Group's capital allocation policy.
-- Adjusted basic EPS which is Adjusted net income divided by
the weighted average number of ordinary shares in issue. This
measure helps to provide an indication of the Group's ongoing
business performance.
-- Net debt which is calculated as total debt (bank loans
principal and Osta.ee customer credit balances) less cash and cash
equivalents. Net debt is used to arrive at the leverage ratio.
-- Leverage which is calculated as Net debt as a percentage of
EBITDA over last twelve months (LTM). This measure is used in
assessing covenant compliance for the Group's loan facility which
includes a Total leverage ratio covenant (see note 15).
-- Cash conversion which is EBITDA after deducting acquisition
of intangible assets and property, plant and equipment as a
percentage of EBITDA. This measure is used to monitor the Group's
operational efficiency.
Reconciliation of alternative performance measures
Adjusted operating profit
6 months 6 months
ended 31 ended 31 Year ended
October October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands)
(EUR thousands)
Operating profit 19,367 14,283 29,056
Acquired intangibles amortisation 8,104 8,094 16,198
Adjusted operating profit 27,471 22,377 45,254
EBITDA
6 months 6 months Year ended
ended 31 ended 31 30 April
October October 2023
2023 2022
(EUR thousands) (EUR thousands)
(EUR thousands)
Operating profit 19,367 14,283 29,056
Depreciation and amortisation(1) 8,445 8,498 16,989
EBITDA 27,812 22,781 46,045
EBITDA margin 78% 77% 76%
(1) Including acquired intangibles amortisation of EUR8,104
thousand in the six months ended 31 October 2023 (EUR16,198
thousand in the year ended 30 April 2023 and EUR8,094 thousand in
the six months ended 31 October 2022 ).
Adjusted net income
6 months 6 months
ended 31 ended 31 Year ended
October October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands)
(EUR thousands)
Profit for the period 15,335 11,520 23,215
Acquired intangibles amortisation 8,104 8,094 16,198
Deferred tax effect of acquired
intangibles amortisation (717) (717) (1,434)
Adjusted net income 22,722 18,897 37,979
Adjusted basic EPS
6 months 6 months
ended 31 ended 31 Year ended
October October 30 April
2023 2022 2023
------------
Adjusted net income (EUR thousands) 22,722 18,897 37,979
Weighted average number of
ordinary shares (note 9) 492,016,798 497,524,476 496,082,891
------------
Adjusted basic EPS (EUR cents) 4.62 3.80 7.66
Net debt
31 October 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands)
(EUR thousands)
Bank loan principal amount
(note 15) 55,000 77,000 70,000
Customer credit balances (note
16) 2,310 2,647 2,363
Total debt 57,310 79,647 72,363
Cash and cash equivalents (20,449) (22,220) (27,070)
Net debt 36,861 57,427 45,293
Leverage
31 October 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
Net debt 36,861 57,427 45,293
Adjusted EBITDA (LTM) 51,076 42,499 46,045
------------------- ------------------ -----------------
Total leverage ratio 0.72 1.35 0.98
Cash conversion
Year ended
30 April
2023
6 months 6 months
ended 31 ended 31
October October
2023 2022
(EUR thousands) (EUR thousands) (EUR thousands)
Adjusted EBITDA 27,812 22,781 46,045
Acquisition of intangible assets
and property, plant and equipment (177) (153) (251)
------------------- ----------------- -----------------
27,635 22,628 45,794
Cash conversion 99% 99% 99%
4. Operating segments
Operating segments are identified on the basis of internal
reports about components of the Group that are regularly reviewed
by the chief operating decisionmaker ("CODM") in order to allocate
resources to the segments and to assess their performance. The CODM
has been identified as the Board of Baltic Classifieds Group
PLC.
The main focus of the Group is operating leading online
classifieds platforms for automotive, real estate, jobs and
services, and general merchandise in the Baltics. The Group's
business is managed on a consolidated level. The Board views
information for each classified platform at a revenue level only
and therefore the platforms are considered products but not a
separate line of business or segment. The Group considers itself a
classified business operating in a well-defined and economically
similar geographical area, the Baltic countries. And therefore, the
Board views detailed revenue information but only views costs and
profit information at a Group level. As such, management concluded
that BCG has one operating segment, which also represents one
reporting segment.
The revenue break-down is disclosed by primary geographical
markets, key revenue streams and revenue by business lines in
accordance with IFRS 15 in note 5.
5. Revenue
In the following tables, revenue from contracts with customers
is disaggregated by primary geographical markets, key revenue
streams and revenue by business lines.
Primary geographic markets 6 months 6 months Year ended
ended 31 October ended 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
Lithuania 25,032 20,815 42,407
Estonia 10,065 8,366 17,203
Latvia 694 597 1,204
------------------------- ----------------- -----------------
Total 35,791 29,778 60,814
------------------------- ----------------- -----------------
Key revenue streams 6 months 6 months Year ended
ended 31 October ended 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
Advertising revenue 1,828 1,874 3,728
Listings revenue 32,041 26,254 53,750
- Listings revenue:
B2C 17,727 14,198 29,765
- Listings revenue:
C2C 14,314 12,056 23,985
Ancillary revenue(1) 1,922 1,650 3,336
------------------------- ----------------- -----------------
Total 35,791 29,778 60,814
------------------------- ----------------- -----------------
Revenue by business 6 months 6 months Year ended
lines ended 31 October ended 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
Auto 13,679 10,707 22,236
------------------------- ----------------- -----------------
- Advertising
revenue 523 562 1,101
- Listings revenue:
B2C 6,104 4,435 9,908
- Listings revenue:
C2C 5,261 4,197 8,167
- Ancillary revenue 1,791 1,513 3,060
Real Estate 8,768 7,323 15,044
------------------------- ----------------- -----------------
- Advertising
revenue 918 924 1,836
- Listings revenue:
B2C 5,077 4,027 8,653
- Listings revenue:
C2C 2,745 2,336 4,494
- Ancillary revenue 28 36 61
Jobs & Services 7,063 5,969 11,790
------------------------- ----------------- -----------------
- Advertising
revenue 18 6 27
- Listings revenue:
B2C 5,867 5,174 9,975
- Listings revenue:
C2C 1,178 789 1,788
- Ancillary revenue - - -
Generalist 6,281 5,779 11,744
------------------------- ----------------- -----------------
- Advertising
revenue 369 382 764
- Listings revenue:
B2C 679 562 1,229
- Listings revenue:
C2C 5,130 4,734 9,536
- Ancillary revenue 103 101 215
Total 35,791 29,778 60,814
------------------------- ----------------- -----------------
(1) Ancillary revenue includes revenue from financial
intermediation, subscription services and other. Financial
intermediation revenue accounts for 91% of the total ancillary
revenue for the 6 months ended 31 October 2023 (93% for the 6
months ended 31 October 2022 and 91% for the year ended 30 April
2023).
6. Operating profit
6 months 6 months Year ended
ended 31 ended 31 30 April
October 2023 October 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
----------------- ----------------- -----------------
Operating profit is after
charging the following:
Labour costs (5,274) (4,420) (9,605)
Depreciation and amortisation (8,445) (8,498) (16,989)
Advertising and marketing
services (493) (427) (971)
IT expenses (432) (337) (725)
Impairment loss on trade
receivables and contract
assets (6) (57) (79)
Other (1,797) (1,758) (3,398)
----------------- ----------------- -----------------
(16,447) (15,497) (31,767)
----------------- ----------------- -----------------
7. Net finance costs
6 months 6 months Year ended
ended 31 ended 31 30 April
October 2023 October 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
----------------- ----------------- -------------------
Other financial income 132 1 7
----------------- ----------------- -------------------
Total finance income 132 1 7
----------------- ----------------- -------------------
Interest expenses (1,857) (1,032) (2,602)
Commitment and agency
fees (40) (41) (80)
Other financial expenses (4) (16) (1)
Interest unwind on lease
liabilities (13) (6) (15)
Total finance expenses (1,914) (1,095) (2,698)
----------------- ----------------- -------------------
Net finance costs recognised
in profit or loss (1,782) (1,094) (2,691)
----------------- ----------------- -------------------
8. Income taxes
6 months ended 6 months Year ended
31 October ended 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
----------------- ------------------ -----------------
Current tax expense
Current year (2,922) (2,514) (4,904)
Deferred tax expense
Change in deferred
tax 672 845 1,754
Tax expense (2,250) (1,669) (3,150)
----------------- ------------------ -----------------
Tax losses can be transferred between companies within the same
tax group effectively reducing consolidated income tax expense.
9. Earnings per share
6 months 6 months Year ended
ended 31 ended 31 30 April
October 2023 October 2022 2023
-------------- -------------- -----------
Weighted average number 496 , 082
of shares outstanding 492,016,798 497,524,476 , 891
Dilution effect on the weighted
average number of shares - - 279,681
Diluted weighted average 496 , 362
number of shares outstanding 492,016,798 497,524,476 , 572
Profit for the period (EUR
thousands) 15,335 11,520 23,215
Basic earnings per share
(EUR cents) 3.12 2.32 4.68
Diluted earnings per share
(EUR cents) 3.12 2.32 4.68
Although the Group operates a Performance Share Plan (note 19),
the potential ordinary shares are not treated as dilutive for the
six months ended 31 October 2023 as the PSP performance condition
was not satisfied during the period.
The reconciliation of the weighted average number of shares is
provided below:
6 months 6 months Year ended
ended 31 ended 31 30 April
October 2023 October 2022 2023
-------------- ---------------------- -----------
Number of Number of Number of
shares shares shares
-------------- ---------------------- -----------
Issued ordinary shares at
1 May less ordinary shares 498 , 292
held by EBT 493,363,165 498,292,405 , 405
Weighted effect of ordinary (1 , 114
shares purchased by EBT - (735,652) , 685)
Weighted effect of share-based
incentives exercised 148,716 - -
Weighted effect of own shares (1 , 094
purchased for cancellation (1,495,083) (32,277) , 829)
-------------- ---------------------- -----------
Weighted average number of 496 , 082
ordinary shares 492,016,798 497,524,476 , 891
-------------- ---------------------- -----------
10. Intangible assets and goodwill
Goodwill Trademarks Relationships Total
and domains with clients Other intangible
assets
(EUR thousands) (EUR thousands) (EUR thousands) (EUR thousands) (EUR thousands)
----------------- ----------------- ----------------- ----------------- -----------------
Cost
Balance at 1 May 2022 328,732 63,220 50,710 1,324 443,986
Acquisitions 1,229 120 250 - 1,599
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 31 October
2022 329,961 63,340 50,960 1,324 445,585
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 1 May 202
2 328,732 63,220 50,710 1,324 443,986
Acquisitions 1,229 120 250 - 1,599
Disposals - - - (33) (33)
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 30 April 329 , 445 ,
2023 961 63 , 340 50 , 960 1 , 291 552
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 1 May 2023 329,961 63,340 50,960 1,291 445,552
Additions - - - - -
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 31 October 329 , 445 ,
2023 961 63 , 340 50 , 960 1 , 291 552
----------------- ----------------- ----------------- ----------------- -----------------
Accumulated
amortisation
and impairment losses
Balance at 1 May 2022 - 17,016 25,956 525 43,497
Amortisation - 3,165 4,929 137 8,231
Balance at 31 October
2022 - 20,181 30,885 662 51,728
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 1 May 2022 - 17,016 25,956 525 43,497
Amortisation - 6,332 9,866 257 16,455
Disposals - - - (33) (33)
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 30 April
2023 - 23,348 35,822 749 59,919
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 1 May 2023 - 23,348 35,822 749 59,919
Amortisation - 3,167 4,937 65 8,169
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 31 October
2023 - 26,515 40,759 814 68,088
----------------- ----------------- ----------------- ----------------- -----------------
Carrying amounts
Balance at 1 May 2022 328,732 46,204 24,754 799 400,489
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 31 October
2022 329,961 43,159 20,075 662 393,857
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 30 April
2023 329 , 961 39,992 15,138 542 385,633
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 31 October
2023 329,961 36,825 10,201 477 377,464
----------------- ----------------- ----------------- ----------------- -----------------
11. Trade and other receivables
31 October 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
Trade receivables 3,773 3,126 3,322
Expected credit loss on
trade receivables (47) (58) (45)
Prepayments 298 318 175
Other short-term receivables 132 94 70
Total 4,156 3,480 3,522
----------------- ----------------- -----------------
Trade and other receivables (except for loan receivables) are
non-interest bearing. The Group has recognised impairment losses in
the amount of EUR47 thousand as at 31 October 2023 (EUR45 thousand
as at 30 April 2023 and EUR58 thousand as at 31 October 2022).
Change in impairment losses for trade receivables, netted with
recoveries, for financial half-year amounted to EUR6 thousand as at
31 October 2023, EUR79 thousand as at 30 April 2023 and EUR57
thousand as at 31 October 2022. As at 31 October 2023, 30 April
2023 and 31 October 2022, there are no pledges on trade
receivables.
12. Equity
Number of Share capital Share premium
shares amount amount
(EUR thousands)
(EUR thousands)
------------ ----------------- -----------------
Balance as at 1 May 2022 500,392,405 5,822 -
Purchase and cancellation of
own shares (426,608) (5) -
------------ ----------------- -----------------
Balance as at 31 October 2022 499,965,797 5,817 -
Balance as at 1 May 2022 500,392,405 5,822 -
Purchase and cancellation of
own shares (3,429,240) (39) -
------------ ----------------- -----------------
496 963
Balance as at 30 April 2023 165 5,783 -
496 963
Balance as at 1 May 2023 165 5,783 -
Purchase and cancellation of
own shares (3,224,063) (38) -
------------ ----------------- -----------------
Balance as at 31 October 2023 493,739,102 5,745 -
Included within shares in issue at 31 October 202 3 are 3,356
thousand ( 3,6 00 thousand in at 31 October 202 2 and 3,6 00
thousand in at 30 April 2023 ) shares held by the Employee Benefit
Trust ("EBT") (note 13).
13. Own shares held
6 months ended 6 months ended Year ended 30
31 October 2023 31 October 2022 April 2023
EUR thousands thousands EUR thousands thousands EUR thousands thousands
Balance as at
1 May 6,252 3,600 3,418 2,100 3,418 2,100
-------------- ----------- -------------- ---------- -------------- ----------
Purchase of shares
for performance
share plan - - 2,834 1,500 2,834 1,500
Exercise of share
options (398) (244) - - - -
Balance as at
end of period 5,854 3,356 6,252 3,600 6,252 3,600
-------------- ----------- -------------- ---------- -------------- ----------
14. Dividends
Dividends paid by the Company were as follows:
6 months 6 months Year ended
ended 31 ended 31 30 April
October 2023 October 2022 2023
(EUR thousands) (EUR thousands)
(EUR thousands)
----------------- --- -------------------- -----------------
2022 final dividend - 6,955 6,955
2023 interim dividend - - 3,963
2023 final dividend 8,359 - -
Total 8,359 6,955 10,918
----------------- -------------------- -----------------
Total dividends per share for the periods to which they relate
were as follows:
6 months 6 months Year ended
ended 31 ended 31 30 April
October 2023 October 2022 2023
---------------------- ------------------------ ---------------------
EUR cents EUR cents EUR cents
per share per share per share
2023 interim dividend - 0.8 0.8
2023 final dividend - - 1.7
2024 interim dividend 1.0 - -
Total 1.0 0.8 2.5
---------------------- ------------------------ ---------------------
The 2024 interim dividend will be paid on 24 January 2024 to
shareholders on the register at the close of business on 15
December 2023 and the payment will comprise approximately EUR4,900
thousand of cash. Dividends are declared and paid in euros.
Shareholders can elect to have dividends paid in British Pound
Sterling. Currency election deadline for 2024 interim dividend is 3
January 2024.
15. Loans and borrowings
Non-current liabilities 31 October 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
----------------- ----------------- -----------------
Bank loan gross of capitalised
borrowing costs 55,000 77,000 70,000
Capitalised borrowing costs (1,081) (1,486) (1,284)
Lease liabilities 494 101 515
54,413 75,615 69,231
----------------- ----------------- -----------------
Current liabilities 31 October 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
----------------- ----------------- -----------------
Interest payable 137 140 180
Lease liabilities 258 161 282
395 301 462
----------------- ----------------- -----------------
Bank loan :
Effective Amount
annual at the end
Loan interest of the period
Period Maturity currency rate (EUR thousands)
----------- ---------- -----------------
Six months ended 31 October
2022 2026 July EUR 2.06% 75,654
----------------------------- ------------ ------------ ---------- -----------------
Year ended 30 April 2023 2026 July EUR 2.91% 68,896
----------------------------- ------------ ------------ ---------- -----------------
Six months ended 31 2026
October 2023 July EUR 5.39% 54,056
----------------------------- ------------ ------------ ---------- -----------------
As at 31 October 2023 the undrawn revolving credit facility
amounted to EUR10,000 thousand (EUR10,000 thousand at 30 April 2023
and EUR10,000 thousand at 31 October 2022).
The loan agreement prescribes a Total Leverage Ratio covenant.
Total Leverage Ratio is calculated as Net Debt over last twelve
months (LTM) of Adjusted EBITDA and shall not exceed 5.50:1. As at
31 October 2023, 30 April 2023 and 31 October 2023, the Group
complied with the covenant prescribed in the loan agreement.
As per the same agreement, the interest margin for each facility
is tied to the Total Leverage Ratio at each interest calculation
date on a semi-annual basis. The interest rate margin is 1.75% when
the leverage ratio is equal or below 2.5, and gradually increase
when leverage ratio increase.
16. Trade and other payables
31 October 31 October 30 April
2023 2022 2023
(EUR thousands) (EUR thousands) (EUR thousands)
Trade payables 388 380 299
Accrued expenses 552 387 391
Payroll related liabilities 994 916 1,021
Other tax 1,590 1,297 1,326
Customer credit balances 2,310 2,647 2,363
Other payables 177 237 130
----------------- ----------------- -----------------
6,011 5,864 5,530
----------------- ----------------- -----------------
17. Related party transactions
During the six months ended 31 October 2023, year ended 30 April
2023 and six months ended 31 October 2022, there were no
transactions with related parties outside the consolidated Group,
except for remuneration of key management personnel (see note 18),
including share option awards under PSP scheme (see note 19).
18. Remuneration of key management personnel and other payments
Key management personnel comprise 3 Executive directors (CEO,
CFO, COO), 5 Non-Executive Directors, Development Director and
Directors of Group companies. Remuneration of key management
personnel, including social security and related accruals, amounted
to EUR782 thousand for the six months ended 31 October 2023,
EUR1,257 thousand for the year ended 30 April 2023 and EUR627
thousand for the six months ended 31 October 2022. Share-based
payments amounted to EUR734 thousand for the six months ended 31
October 2023, EUR1,031 thousand for the year ended 30 April 2023
and EUR443 thousand for the six months ended 31 October 2022.
During the six months ended 31 October 2023, the year ended 30
April 2023 and the six months ended 31 October 2022, the Executive
directors of the Group were granted a set number of share options
under the PSP scheme. See note 19 for further detail.
During the six months ended 31 October 2023, the year ended 30
April 202 3 and the six months ended 31 October 2022, key
management personnel of the Group did not receive any loans,
guarantees, no other payments or property transfers occurred, and
no pension or retirement benefits were paid.
19. Share-based payments
Performance Share Plan
The Group currently operates a Performance Share Plan (PSP) for
Executive Directors and certain key employees with awards subject
to a service and a non-market performance condition. The estimate
of the fair value of the PSP awards is measured using Black-Scholes
pricing model.
The total charge in the period relating to the PSP scheme was
EUR959 thousand (EUR1,567 thousand during the financial year ended
30 April 2023 and EUR662 thousand during the six months ended 31
October 2022).
On 5 July 2023, the Group awarded 1,138,024 share options under
the PSP scheme. These awards have a 3-year service condition and
performance condition which is measured by reference to the Group's
earnings per share in the year ended 30 April 2026.
The fair value of the 2023 award was determined to be EUR2.14
per option using a Black-Scholes pricing model. The resulting
share-based payments charge is being spread evenly over the period
between the grant date and the vesting date.
The number of options outstanding and exercisable as at 31
October 2023 was as follow:
6 months 6 months Year ended
ended 31 October ended 31 October 30 April
2023 2022 2023
(number) (number) (number)
------------------ ------------------ -----------
Outstanding at beginning
of period(1) 2,484,217 1,041,745 1,041,745
Options granted in the
period 1,138,024 1,465,911 1,465,911
Options exercised in (244,318) - -
the period
Options forfeited in
the period (24,436) - (23,439)
------------------ ------------------ -----------
Outstanding at end of
period(1) 3,353,487 2,507,656 2,484,217
------------------ ------------------ -----------
(1) Figure for year ended 30 April 2023 was amended to correct a
typographical error.
20. Enquiries by the Competition Authorities
As at 31 October 2023, the Group had three open enquiries from
Competition Authorities, however the Directors' view is that the
likelihood of any material outflow of resources in respect of these
enquiries is remote, and therefore no provision or contingent
liability has been recognised in the financial statements in
respect of these matters (no provision or liability at 30 April
2023 and 31 October 2022).
On March 2019 the Estonian Competition Authority ("ECA")
initiated supervisory proceedings against the AllePal OÜ and
Kinnisvaraportaal OÜ, the operators of two real estate online
classified portals, based on the complaint filed by various real
estate companies and portals ("Claimants"). The Claimants alleged
that the Group had abused its position by unfairly limiting the
conditions for XML data exchange and applying excessively high
prices. On 12 November 2021 the ECA terminated the supervisory
proceedings with regard to the part that concerned the conditions
of XML data exchange. The Group is co-operating with the ECA and
although the Group expects that the supervisory proceedings will be
terminated without any material effect to the financial position or
operations of the Group, the Group cannot make any assurances that
the ECA will not find any infringements. As the ECA or any other
Estonian authorities have not initiated any misdemeanour (or
criminal) proceedings against any Group company, the ongoing
supervisory proceedings cannot lead to any imposition of fines to
any Group company, however, if the ECA concludes that AllePal OÜ
and Kinnisvaraportaal OÜ abused their position, the ECA could issue
a precept ordering these Group companies to end any ongoing
infringements.
On 4 February 2022 the ECA initiated supervisory proceedings
against AllePal OÜ, the operator of real estate online classified
portal, based on the complaint filed by Reales OÜ. Reales OÜ had
entered into service agreement with AllePal OÜ for the insertion of
real estate ads on both of real estate online classified portals,
and according to the complaint, AllePal OÜ unfairly refused to
provide the service to Reales OÜ by terminating the agreement.
According to AllePal OÜ, service agreement was terminated because
the claimant used the services to provide real estate ads brokerage
or aggregation services and did not engage in real estate
brokerage, for which the real estate online classifieds portals are
intended. AllePal OÜ actively co-operates with the ECA and provides
all necessary information and holds negotiations with Reales OÜ in
order to develop a suitable contract and the pricing for the
service needed by the claimant. On 15 March 2022, Reales OÜ
submitted an additional complaint to initiate additional
supervisory proceedings against the AllePal OÜ, which alleges that
the pricing difference between the prices offered to the business
and private customers indicates the abuse of a dominant position.
On 1 April 2022 the ECA decided not to initiate additional
proceedings and investigate the raised question within the ongoing
supervisory proceedings. As the ECA or any other Estonian
authorities have not initiated any misdemeanour (or criminal)
proceedings against any Group company, the ongoing supervisory
proceedings cannot lead to any imposition of fines to any Group
company, however, if the ECA concludes that AllePal OÜ and
Kinnisvaraportaal OÜ abused their position, the ECA could issue a
precept ordering these Group companies to end any ongoing
infringements.
On 7 November 2022, the ECA initiated supervisory proceedings
against the AllePal OÜ, the operator of online classifieds portal
for automotive Auto24.ee ("Auto24"), based on the signals from the
market that Auto24 increased the prices to both business and
private customers to levels which may be excessive from the
competition law perspective. The Group is co-operating with the ECA
and although the Group expects that the supervisory proceedings
will be terminated without any material effect to the financial
position or operations of the Group, the Group cannot make any
assurances that the ECA will not find any infringements. As the ECA
or any other Estonian authorities have not initiated any
misdemeanour (or criminal) proceedings against the Auto24, the
ongoing supervisory proceedings cannot lead to imposition of fines
to AllePal OÜ, however, if the ECA concludes that AllePal OÜ abused
their position, the ECA could issue a precept ordering these Group
companies to end any ongoing infringements.
21. Business combinations
Current period
There were no business acquisitions in the six months ended 31
October 2023.
Prior periods
On 1 July 2022, the Group's subsidiary City24 SIA acquired a
100% control of GetaPro business. Details of the business
combination were disclosed in note 27 of the Group's annual
financial statements for the year ended 30 April 2023.
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END
IR FIFFRFALRIIV
(END) Dow Jones Newswires
December 06, 2023 02:00 ET (07:00 GMT)
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