As reported by Centaur Media plc:
Financial Highlights
- Revenues down 18% to £32.4m due to significant impact of Covid but grew internationally
- Adjusted EBITDA only decreased by £0.2m, benefiting from 24% reduction in operating costs
- Adjusted EBITDA margin grew from 10% to 12%, ahead of the Board’s target
- MAP strategy updated targeting 23% Adjusted EBITDA margin and increasing revenues to more than £45m by 2023 (MAP23)
- Proposing a final dividend of 0.5p per share
- Net cash of £8.3m at year end
- Non-cash goodwill impairment of £11.0m in the year relating to the closure of MarketMakers
As previously announced, Covid had a significant impact on Centaur during 2020 and we were pleased to see trading gradually improve over the second half of the year in line with our expectations and this trend is continuing into Q1 2021. Rapid management action ensured that we quickly adapted to the pandemic with the transfer of key revenue streams online combined with tight cost and cash control. This enabled us to protect profits through growing EBITDA margins ahead of target and maintaining a strong balance sheet, to end the year with net cash of £8.3m.
Despite the impact of the pandemic, which resulted in a revenue decline of 18% for the year, improvements in performance in the second half provided management with sufficient confidence to update the Group’s strategy. The transformation of Centaur over the last 5 years is evidenced by a higher value revenue mix with premium content, marketing services and training and advisory increasing to 76% (2016: 36%) and revenue from events, marketing solutions and recruitment advertising reducing to 24% (2016: 64%). Revenue from outside the United Kingdom has also increased to 31% (2019: 24%) with a lift of 4% to £10.0m as Centaur extends its international reach.
As a result, in January 2021 Centaur updated its Margin Acceleration Plan with the aim of raising Adjusted EBITDA margins to 23% and increasing revenue to more than £45m by 2023 (MAP23). To support MAP23, we will focus investment and resource allocation on our Flagship 4 brands – Econsultancy, Influencer Intelligence, Mini MBA and The Lawyer – which we consider to be Centaur’s key drivers of organic revenue growth. They will be supported by Xeim’s wider portfolio of Core Brands.
At Xeim, which continues to represent 80% of Centaur’s revenue and includes three of our Flagship 4 brands (Mini MBA, Econsultancy and Influencer Intelligence), we moved quickly to adapt training and events to an online format. This allowed us to maintain customer relationships and the provision of services throughout the year. Mini MBA had a strong year, with delegate numbers and revenue increasing by around 90%, as both the marketing and brand courses in the spring and autumn cohorts achieved excellent growth, in addition to delivering bespoke versions of the marketing course for several blue chip customers. We also created a centre of sales excellence to increase the focus on cross-selling across Xeim brands which will play a key role as we deliver MAP23.
Unfortunately, the pandemic had a severe impact on MarketMakers, Xeim’s telemarketing business, which saw a sharp fall in revenue as several major customers were hit by disruption in their own markets. As a consequence, in July the Board took the decision to close the business, incurring a non-cash goodwill impairment of £11.0m and exceptional costs of £0.9m. While this was a difficult and sensitive decision, it will assist in improving Centaur’s profit margins and support our MAP23 margin objective. We have retained Really B2B, our award-winning demand generation agency, which was part of the MarketMakers group.
Whilst the pandemic affected advertising and event revenues at The Lawyer, we were encouraged to see it achieve a full-year renewal rate for corporate subscriptions of 106%, reflecting its status as the most trusted brand for the UK legal profession. The Lawyer saw a substantial increase in digital engagement and successfully executed over 120 virtual events.
Current trading
Trading for the first two months of 2021 is in line with the Board’s expectations and cash at the end of February 2021 was £8.2m.
Dividend
Following the cancellation of the 2019 final and 2020 interim dividends, Centaur’s resilience has given the Board confidence to propose a final dividend of 0.5p per share for the 2020 financial year. The Board is also recommending a resumption of our normal dividend policy which aims to distribute 40% of adjusted earnings after taxation, subject to a minimum of 1p per share, and will also consider resuming further returns of capital to shareholders once the longer-term impact of Covid on the Group’s cash flows becomes clearer.
Swag Mukerji, Chief Executive Officer, commented: “Whilst Covid had a significant impact on Centaur, I am pleased with how the group performed during a year of unprecedented uncertainty and disruption. We acted quickly and decisively to adapt our business and ensure we could continue to serve our customers during a uniquely challenging period. This has only been possible due to the hard work and unwavering dedication of our people and I would like to express my sincere thanks to them.
Despite the challenges presented to us in 2020 and the inevitable uncertainties that will arise from the Covid pandemic over the next few months, I am encouraged by the continued recovery in trading and am confident in our MAP23 plan. The targets are ambitious and achievable, with our robust balance sheet and Flagship 4 brands leaving us well-placed to capitalise on future opportunities. We will continue to focus on providing cutting-edge insight, training and analysis, building strong and lasting relationships with our customers and delivering long-term sustainable returns to our shareholders as we emerge from the pandemic.”
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