TIDMBCG
RNS Number : 6005R
Baltic Classifieds Group PLC
07 July 2022
BALTIC CLASSIFIEDS GROUP PLC
FULL YEAR RESULTS FOR THE YEARED 30 APRIL 2022
Baltic Classifieds Group PLC ("BCG" and the "Group"), the
leading online classifieds group in the Baltics , announces full
year results for the year ended 30 April 2022
Exceeding our IPO guidance and delivering commitments
-- Revenue of EUR51.0 million grew 21% versus 2021, exceeding
IPO guidance
-- Adjusted EBITDA(1) of EUR39.3 million with adjusted EBITDA
margin(2) of 77.1%
-- Revenue growth for 2023 is expected to be in line with
guidance despite higher starting point
-- Year-end leverage reduced to 1.7x net debt(3) to adjusted
EBITDA
-- Implementing our capital policy, including returning excess
cash to shareholders:
-- Voluntarily repaid EUR14 million of debt during the year
-- Proposed final dividend of 1.4 EUR cents per share
-- Gaining the necessary authorities for the Board to initiate a
share buyback programme following the AGM
-- Appointed an additional independent non-executive
director
-- Became carbon neutral across Scope 1 and 2
Strategic overview
-- Record annual revenue in all four of our business units
contributed to a 21% growth in group revenue, exceeding the
expectations set at the time of the IPO. This has been achieved
despite a small negative impact seen during the initial weeks of
the war in Ukraine and some impact from COVID-19-related
restrictions during the year.
-- Compared to pre-COVID-19, each of our leading sites have
increased their audience lead over their closest competitors,
further demonstrating the importance of our sites to both consumers
and listers.
-- Improvements to our products and packages supported our
annual pricing events which were implemented and rolled out from
September 2021 through to January 2022 for B2C in our Autos and
Real Estate business lines. In Jobs & Services business line
pricing changes were implemented in September 2021 to be rolled out
throughout the following 12 months.
-- In April 2022 we implemented C2C pricing and packaging
changes across all of our business units.
-- On 1 July 2022 in a form of assets deal we acquired GetaPro
for EUR1.6 million in cash - a services classifieds portal
operating in Latvia and Estonia. It is a strategic add on into the
highest growth vertical.
Financial highlights
-- Revenue grew 21% to EUR51.0 million (2021: EUR42.3 million of
which EUR 0.4 million was from a divested business) driven by a
solid performance in Autos ( +9% reported growth ), Real Estate (+
17 %) and Generalist (+6%) and almost doubling in Jobs &
Services (+97%).
-- EUR28.8 million of our net costs in 2022 related to the IPO
or historical acquisitions:
-- IPO related: EUR8.8 million fees, EUR5.4 million finance and
tax costs arising from the refinancing arrangement, EUR(0.1)
million tax impact on the fees
-- Historical acquisitions related, which are non-cash: EUR16.1
million of amortisation and associated EUR(1.4) million tax
impact
-- Excluding the above costs our a djusted EBITDA was up 19% to
EUR39.3 million (2021: EUR33.0 million) and our adjusted EBITDA
margin was 77.1% (2021: 78.1%) despite additional public listed
company costs and the higher inflation environment in the Baltics.
We estimate that the impact of the war in Ukraine amounted to
around 1% of EBITDA margin, however this was concentrated around
the first 4 weeks of the invasion.
-- Excluding the above costs our adjusted operating profit(4)
grew 20% to EUR38.5 million (2021: EUR32.2 million) and our
adjusted net income(5) grew 109% to EUR31.2 million (EUR14.9
million in 2021) . Reported operating profit for the period was
EUR13. 6 million (2021: EUR15.7 million) and reported net income
was EUR2.4 million (EUR(0.1) million in 2021).
-- Accordingly, adjusted basic EPS(6) grew 86% to 6.40 EUR cents
(2021: 3.43 EUR cents). Basic EPS for 2022 was 0.49 EUR cents
(2021: (0.02) EUR cents).
-- Cash conversion(7) remained very strong at 99 % (H1 2021:
100%). Cash was up 22% to EUR40.5 million based on cash generated
from operations prior to IPO fees payment ( EUR6.3 million fees
paid relate to 2022, EUR0.1 million relate to 2021, with EUR1.1
million related taxes yet to be paid) . Reported cash generated
from operations grew to EUR34.1 million (2021: EUR33.1
million).
-- Net debt fell by EUR133.0 million to EUR66.4 million (2021:
EUR199.4 million) and we ended the year with leverage(8) at 1.7x
(2021: 6.0x).
-- The Board has proposed a first dividend of 1.4 EUR cents per
share.
Operational highlights
-- Traffic to our sites averaged 65.1 million visits per month
meaning the typical resident in the Baltics visited our sites 11
times every month.
-- Our time on site leadership position(9) over the nearest
competitor increased for all five of our largest sites compared to
2020 with Autoplius at 4.4x (vs 3.3x), Auto24 at 32.1x (vs 15.4x),
Aruodas at 29.0 x (vs 12.3x), Skelbiu at 1 9.7 x (vs 15.1x) and
CVBankas at 8.3x (vs 3.8x).
-- We have more real estate brokers (+1%), more automotive
dealers (+4%) and more employers (+47%) utilising our sites to
advertise than ever before.
-- During 2022 we have improved our products, including:
-- Automotive: in Autoplius.lt we introduced two tiers of
packages to replace the existing one for B2C customers, providing a
choice of basic or premium options. In Auto24.ee the already
existing third B2C package was replaced with a new, enhanced
offering at a higher price point.
-- Real estate: in Aruodas.lt we added a third B2C package,
optimized for premium brokers, on top of the existing two. In KV.ee
we expanded the offering from two to four B2C packages. The premium
tier includes listing on two property platforms (KV.ee and
City24.ee) at once.
-- Jobs and Services: in CVbankas.lt we developed a new VAS - a
tool for employers which helps get more applicants.
-- Generalist: in Skelbiu.lt we made improvements to our
deliveries service, boosting the number of orders significantly. We
also made important changes on the platform to increase the level
of privacy and fraud prevention - sellers' contact details are now
securely hidden behind the registration wall.
-- The combination of increased prices of the goods and services
being advertised on our sites, quicker speed of sale and changes to
our packages and prices has led to increased yields(10) in
Automotive (B2C +8%, C2C +40%), Real Estate (B2C +15%, C2C +22%),
CVbankas (+29%) and Skelbiu (+8%).
-- The Group has been operating in a higher inflation
environment for many years and the rate of inflation hit
double-digits this year. This has not negatively affected our
profitability, as the increase in our costs is balanced by the
effect that rising real estate and car prices and increasing
average salaries have on our revenue growth.
-- The number of BCG employees grew marginally to 127 FTEs
(2021: 124 FTEs), with the split of women to men 51:49.
-- The total amount of our CO(2) market-based emissions,
including Scope 1 and 2, was 190.3 tonnes of carbon dioxide
equivalent(11) . We offset these emissions using an accredited
scheme and were therefore carbon neutral across Scope 1 and 2.
Justinas imkus , Chief Executive Officer of Baltic Classifieds
Group, said:
"This year has been the busiest and most successful in BCG's
history and a record year in terms of financial performance. I am
incredibly proud of all of the employees who have helped to achieve
the best performance ever despite living through a 3(rd) wave of
the pandemic and geopolitical tensions. The period has also seen
strong audience numbers on our sites, and record numbers of
automotive dealers and job advertisers utilising our products and
services.
We implemented successful pricing and package changes across all
of our business units, in C2C at the beginning and the end of the
period, and in B2C at the middle of the year. The excellent results
achieved this year have provided ongoing momentum moving us into
the next financial year.
We felt it was part of our duty to help Ukrainian refugees
arriving in our region. We have therefore developed tools in our
portals to help integrate refugees in local society faster and
donated EUR233 thousand to non-profit organisations helping
Ukrainians which also makes our employees proud."
Outlook
-- The Board is comfortable guiding to 15% revenue growth in
2023, with Real Estate and Autos growing in line, Jobs &
Services above and Generalists slightly below the overall
average.
-- The Board expects the Company to maintain adjusted EBITDA
margin for 2023 despite rising costs in a high inflation
environment and further listed company costs.
-- We expect the appropriate authorities to be in place
following the AGM for us to begin buying back our shares. The Board
will consider the allocation of excess cash towards reducing gross
debt and to the share buyback programme at that time.
(1, 2, 3, 4, 5, 6, 8) See accounting policy in note 2 and
reconciliation to the Profit / (loss) for the period in notes 5 and
12
(7) Cash conversion calculated as: (adjusted EBITDA - capex) /
adjusted EBITDA.
(9) Leadership position based on time on site except for Auto24.
Auto24 has no significant vertical competitor; next relevant player
is Generalist portal, therefore relative market share is calculated
based on time on site proportion relating to the number of active
automotive listings as at the end of the reported period.
(10) Yield refers to the change in average monthly revenue per
active (Auto or Real Estate) or listed (Generalist) C2C listing or
ARPU in B2C. ARPU is monthly average revenue per user (in Auto -
per dealer, in Real Estate - per broker, in Jobs & Services -
per client).
(11) The total amount of CO(2) equivalent emissions includes
Scope 1 and 2. Scope 1 emissions cover natural gas combustion
within boilers and road fuel combustion within owned/leased
vehicles across the Group. Scope 2 emissions cover purchased
electricity, heat, and cooling for own use across all offices of
the Group, as well as electricity from data centres falling under
scope 2.
Analyst presentation dates/Conference call details
A presentation for analysts will be held via video webcast and
conference call at 9: 30 am, Thursday 7 July 2022. Details
below.
The live webcast will be available at:
https://www.investis-live.com/balticclassifieds/62bd607259bc7414001a1626/bccc
Participants joining via telephone:
Lithuania (Local) 370 521 40 826
United Kingdom 0800 640 6441
United Kingdom
(Local) 020 3936 2999
All other locations +44 20 3936 2999
Access code: 403857
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 Thursday, July 14, 2022
UK: 020 3936 3001
USA: 1 845 709 8569
All other locations: +44 20 3936 3001
Access Code: 440257
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 twelve
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 year ended 30 April 2022, the
Group's portals were visited in average 65.1 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 now a member of the FTSE 250 Index.
For more information, please visit
https://balticclassifieds.com/
Chair's statement
Overview
Baltic Classifieds Group is a highly profitable, high-growth
business at an early stage of its monetisation journey. Its
portfolio of classifieds businesses across Estonia, Latvia and
Lithuania are the clear market leaders in their respective sectors
and have proven themselves to be extraordinarily resilient in a
time of significant macroeconomic uncertainty. The Group is led by
a passionate and committed management team that has deep
classifieds experience and has created an environment of rapid
decision making, of trust and of fun.
I am delighted that we could bring such a high quality business,
operating entirely in the Baltic region, to the London Stock
Exchange. We entered the Premium Segment of the LSE in July 2021
and have subsequently been included in the FTSE 250 Index. The
Group is making good progress in terms of compliance with the UK
Corporate Governance Code 2018. For a more detailed understanding
of this, see the Corporate Governance Report in our Annual Report
and Accounts ("ARA"). However, I do ask the readers of this report
to understand there are some differences that come with a business
listed in the UK with operations purely in the Baltics region. For
example, the business has been operating in a high inflation
environment which drives differences in the remuneration approach
(see Remuneration Committee report in the ARA), and the ethnic
minority groups in the Baltics are significantly different which
makes us think differently about diversity (see Nomination
Committee report in the ARA).
The Group has delivered our strongest ever financial results
with both revenue and profit exceeding our guidance set out at the
IPO.
Employees
The past twelve months have thrown up some extraordinary
challenges for our employees. On top of the health challenges, the
pandemic has meant continued home working across our businesses for
most of the year. Additionally, the history of and proximity to
Russia for the Baltic countries combined with the deep connections,
for all those who are affected by the war or have family members so
affected, has caused worry and emotional turmoil that I can only
imagine. Despite this, we have achieved everything we set out to do
and more, bringing the Company to the public markets and exceeding
expectations set out at that time. On behalf of the Board, I wanted
to thank all our employees for their remarkable contribution and
dedication this year, and for serving both our consumers and our
B2C customers so well.
Board
Preparing for the IPO meant restructuring BCG's organisational
structure, setting up a new top holding entity in the UK and
establishing a new Board of Directors. I was delighted to have been
asked to chair the Board and believe my previous experience as the
CEO of Autotrader Group PLC ("Autotrader") throughout its
transition from a private to a public company will contribute
positively to the business. Ed Williams, the current Chair of
Autotrader and the ex-CEO of Rightmove PLC has taken the Senior
Independent Director role and is Chair for the Remuneration
Committee. Kristel Volver, Group CFO of the largest media company
in the Baltics joined our board as an Independent Non-Executive
Director and Chair of the Audit Committee.
Funds advised by Apax Partners ("Apax") now account for 35.29%
of issued share capital as at 30 April 2022. Until its shareholding
falls below 10%, Apax have a right under a Relationship Agreement
to nominate up to two Nominee Directors, of which Tom Hall is
currently in place alongside a nominated Board Observer. Tom brings
in a vast experience in internet and consumer business and knows
BCG well since Apax's acquisition of the Group in 2019.
On 17 May 2022, Jurgita Kirvaitiene joined the Board as an
Independent Non-Executive Director and will join all the Board
Committees. Her 18 years of experience at PwC where she served on
the Management Board in Lithuania and on other boards will bolster
the finance and operational experience on the Board.
With this appointment we have brought all our Committees into
full compliance with the UK Corporate Governance Code 2018.
Environmental, Social and Governance
I am pleased to report that the Company set up the Group's
Environmental, Social and Governance ("ESG") working group that is
the driver of ESG initiatives and a main tool for the Board to
oversee progress in this area (refer to Sustainability Report in
our ARA). Our Sustainability Report also includes reporting under
the recommendations of the Taskforce for Climate-related Financial
Disclosures.
We have also made a significant increase in our charitable
giving programme this year, and aim to continue to do so in the
coming year. The Board recognises we are only at the start of our
ESG journey, and that this journey may have different directions
than many companies given the Baltic operations - there is more to
do.
Returns to Shareholders and dividends
The primary proceeds raised through the IPO were predominately
used to reduce our net external debt to a level more appropriate
for a publicly listed company. The opportunity was also taken to
refinance and enter into a new term loan facility at a
significantly lower rate of interest.
The Board is confident in our ability to deliver sustainable
returns to Shareholders and aim to return all of the surplus cash
we generate to Shareholders. In line with our intentions expressed
in the Prospectus, we are recommending a final dividend of 1.4 EUR
cents per share for 2022. The final dividend will be paid, subject
to Shareholder approval, on 14 October 2022. Whilst we will
prioritise further acquisitions as the primary use of excess cash,
now that our debt is below 2X net leverage, we will be initiating a
share buyback program that will facilitate the return of cash to
Shareholders. More details on our capital policy can be found in
Financial review.
Looking ahead
I have been enormously impressed yet not surprised by the
progress of Baltic Classifieds Group over the past year, I am
excited that we can soon kickstart our capital policy of returning
all excess cash to our Shareholders and I am confident that the
business will continue to develop and grow both quickly and
profitably - in line with the guidance we set out at the IPO.
Trevor Mather
Chair
7 July 2022
CEO's statement
This year has been the busiest and most successful in BCG's
history and a record year in terms of financial performance. I am
incredibly proud of all of the employees who have helped to achieve
the best performance ever despite living through a 3(rd) wave of
the pandemic and geopolitical tensions. The period has also seen
strong audience numbers on our sites, and record numbers of
automotive dealers and job advertisers utilising our products and
services.
We implemented successful pricing and package changes across all
of our business units, in C2C at the beginning and the end of the
period, and in B2C at the middle of the year. The excellent results
achieved this year have provided ongoing momentum moving us into
the next financial year.
-- Traffic to our sites was 65.1 million visits per month which
means that on average, a resident in the Baltics visits one of our
sites 11 times every month.
-- Our time on site leadership position over the nearest
competitor increased for all five of our largest sites compared to
the same period in 2020 with Autoplius at 4.4x (vs 3.3x), Auto24 at
32.1x (vs 15.4x), Aruodas at 29.0x (vs 12.3x), Skelbiu at 19.7x (vs
15.1x) and CVBankas at 8.3x (vs 3.8x).
-- The number of real estate brokers grew 1% if compared to the
same period in 2021, we have more automotive dealers (+4%) and more
employers (+47%) utilising our sites to advertise than ever
before.
-- The combination of increased prices of the goods and services
being advertised on our sites, quicker speed of sale and changes to
our packages has led to increased yields in Automotive (B2C +8%,
C2C +40%), Real Estate (B2C +15%, C2C +22%), CVbankas (+29%) and
Skelbiu (+8%).
I am delighted that BCG has become a listed company on the
London Stock Exchange. The IPO has allowed us to make all of our
employees Shareholders of the Company. The team's motivation is
higher than ever as we focus on continuing to deliver outstanding
products and services to our customers.
We felt it was part of our duty to help Ukrainian refugees
arriving in our region. We have therefore developed tools in our
portals to help integrate refugees in local society faster and
donated EUR233 thousand to non-profit organisations helping
Ukrainians which also makes our employees proud.
Market context
The Baltic region was under various COVID-19 related
restrictions for the period from October 2021 to April 2022.
Despite this, Lithuania and Estonia, being our main markets, were
among the first countries in the EU to reach their pre-COVID-19 GDP
levels. Our Company, as well as the Baltics economy in general,
showed huge resilience to increased geopolitical tension in the
region. On 24 February, the onset of the Russian invasion of
Ukraine, people were reading more news than ever. Accordingly, our
traffic KPIs temporarily dropped 20-30%. However, this was
short-lived, and by the 2-3(rd) week of the war, KPIs began to
recover rapidly. By the 4-5(th) week, business results exceeded
pre-war levels. The Baltics economy exports just below 1% of
locally produced goods to Russia which, coupled with government
actions such as building liquid gas terminals and infrastructure,
helps to reduce public uncertainty and makes us fully independent
from gas imports from Russia. The Baltic states become first in
Europe to stop Russian gas imports. At the date of this statement
the Baltic states have also stopped importing Russian oil and
electricity.
Similarly to other countries around the world, the Baltics
economies face high inflation. This results in higher real estate
and automotive prices, increasing the commission pool of our
customers which in turn is supportive to our Company's growth,
while being part of the Eurozone secures our Shareholders'
investment.
-- Despite the supply chain issues, the used car market has
demonstrated a modest growth of 3% in the last 12 months. Demand to
change vehicles has remained high, driving the average price per
used car up (by 24% year-on-year ("YoY")) and increasing the speed
of sale. This has meant dealers have maintained or increased their
profitability. However, the number of days a vehicle is advertised
has reduced by 14% putting downward pressure on the stock of
vehicles on our sites.
-- The real estate market has emerged strongly post lock-down.
The number of transactions were 9% higher YoY and the average price
of an apartment has increased by 10%. The larger commission pool
benefits our customers.
-- The employment market has seen unprecedented growth.
Companies have faced a substantial labour shortage. The number of
employers using Cvbankas.lt increased by 47% and average salaries
have grown by 11%, leading to companies increasing their investment
in employee search and selection.
-- eCommerce activities have significantly increased because of
lock-downs. The numbers of online buyers and sellers grew rapidly
with many transactions moving online. This has helped the growth of
our Generalist platforms and ancillary products like
deliveries.
Justinas imkus
Chief Executive Officer
7 July 2022
Financial review
Revenue
Group's revenue grew 21% to EUR51.0 million (2021: EUR42.3
million of which EUR0.4 million from a business that was divested
at the very end of 2021 and therefore not owned in 2022). Excluding
the divested business revenue from the comparative figure, our
revenue grew 22% this year.
Compared to 2020, which was largely before COVID-19, and
excluding the impact of acquisitions and disposals within the
comparative period, our revenue in 2022 increased by 35% (2020:
EUR32.3 million). This growth rate reflects that we also grew in
2021 despite the fact we did not introduce major changes to our
pricing in 2021, usually an annual event.
2022 2021 2020
EURm EURm EURm
------------------------------------------ --------- ----- -----
A) Revenue less acquisitions & disposals 43.6 35.3 32.3
B) Revenue from businesses disposed in
2021 - 0.4 0.4
C) Revenue from businesses acquired in
2020 7.4 6.5 1.5
------------------------------------------ --------- ----- -----
D) Revenue 51.0 42.3 34.3
Reported revenue growth in 2022 (D:
2022 vs 2021) 21%
Revenue growth in 2022 excluding the
disposed business (A+C: 2022 vs 2021) 22%
2-year revenue growth excluding disposals
and acquisitions during the period (A:
2022 vs 2020) 35%
Focusing on 2022, most of the percentage increase represents
underlying organic growth in revenue. A small part of the growth
reflects some waiving of listing fees to Real Estate and Auto B2C
customers in the H1 prior year, when the Baltic countries
experienced the first wave of COVID-19.
Due to the Russian invasion of Ukraine and consequently the
internet population reading the news rather than shopping online /
searching for a property or a car, we estimate that we lost around
1% of growth this year, which dropped down to the bottom line as
well. This was an immediate and short-term impact on revenue which
bounced back in a few weeks to pre-war levels and our normal
run-rate.
The main drivers of revenue growth were increases in the number
of advertisers across our business sectors, an increase in the
number of advertisements/active C2C listings across all our
business sectors except Autos, and an increase in the average spend
per customer/advertisement across all our businesses.
In May 2021, we introduced C2C price changes for most of our
portals, reflected in the reported revenue numbers. In September
and October 2021, we introduced B2C price and package changes for
the Real Estate, Auto and Jobs portals, reflecting improvements to
our proposition. In April 2022, we introduced C2C price changes in
the main portals - these made a limited contribution to 2022
revenue, with the full contribution to be seen in 2023.
Growth,
EURm 2022 2021 %
------------------------------------------- ---------- ----------- --------
Auto 18.3 16.8 +9%
Auto (excluding 0.4 million from business
divested in 2021) 18.3 16.4 +11%
Real Estate 12.5 10.7 +17%
Generalist 10.4 9.8 +6%
Jobs & Services 9.8 5.0 +97%
------------------------------------------- ---------- ----------- --------
Revenue 51.0 42.3 +21%
------------------------------------------- ---------- ----------- --------
Revenue excluding business divested in
2021 51.0 41.9 +22%
Revenue grew healthily in all four of our business areas.
However, we saw a much wider range of organic growth (Jobs &
Services up 97% down to Generalist up 6%) than we have seen
historically. We believe that this, in large part, reflects the
indirect consequences of COVID-19 (e.g. pent up demand in the
employment market, recovering foot traffic to physical stores
versus major shift to e-commerce last year) as seen in many
countries.
2022 2021 Change, %
----------------------------------- ------- ------- ----------
Auto B2C - No. of Dealers 3,489 3,356 +4%
Real Estate B2C - No. of Brokers 4,855 4,809 +1%
Jobs(1) B2C - No. of Customers 2,243 1,521 +47%
Auto C2C - No. of Active Ads(2) 21,579 26,366 (18%)
Real Estate C2C - No. of Active
Ads 14,548 14,307 +2%
Generalist(3) No. of Listings 91,045 88,726 +3%
Auto B2C - ARPU(4) (EUR) 178 165 +8%
Real Estate B2C - ARPU (EUR) 121 105 +15%
Jobs(1) B2C Monthly - ARPU (EUR) 328 254 +29%
Auto C2C - Monthly Rev. per Ad
(EUR)(2) 19 13 +40%
Real Estate C2C - Monthly Rev.
per Ad (EUR) 20 16 +22%
Generalist(3) Revenue per Listing
(EUR) 6 5 +8%
We are 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.
In all three business units, the number of B2C customers has
increased:
-- Automotive dealers by 4% (from 3,356 in 2021 to 3,489 in
2022) mainly due to small dealers switching to B2C subscriptions
rather than placing advertisements as if they were C2C
customers.
-- Real Estate brokers by 1% (from 4,809 in 2021 to 4,855 in
2022).
-- Jobs customers by 47% due to significantly increased demand
by companies for employees in the market (from 1,521 in 2021 to
2,243 in 2022).
In C2C, a gradual increase in listings is primarily due to
growing activity in the underlying market in Real Estate and
Generalist. In Automotive, the average monthly number of active
advertisements is down 18% primarily due to shortened selling time
(which means each advert is active for less time) and fewer market
transactions than pre-COVID-19, influenced by global car
shortages.
The majority of our C2C price changes were implemented in Spring
2021, and our B2C price changes throughout Autumn 2021.
Organically, excluding the disposed Autoleht revenue (sold at
the end of 2021 and amounting to EUR0.4 million in 2021), the Auto
business line grew 11%. The reported Auto business line revenue has
grown 9% during 2022 (from EUR16.8 million in 2021 to EUR18.3
million in 2022). The Jobs & Services business line revenue
almost doubled - growing 97% (from EUR5.0 million in 2021 to EUR9.8
million in 2022). Real Estate has also contributed a solid growth
to Group revenue - the business line grew 17% (from EUR10.7 million
in 2021 to EUR12.5 million in 2022). Generalist revenues grew 6%
(from EUR9.8 million in 2021 to EUR10.4 million in 2022).
In terms of ARPU in our B2C segment:
-- Automotive ARPU was up 8% due to price and packaging changes
in September and October 2021. ARPU growth was somewhat depressed
by dealers reducing package sizes in the context of low inventory
levels and an increased number of smaller dealers. We expect
further upside from the price changes in the longer-term when
inventory levels recover, and dealers increase their packages.
-- Real Estate ARPU was up 15% partially due to the discounts in
the comparative period, but also customers benefiting from an
increased number of transactions and subscription fee and packaging
changes which took effect from September 2021 to January 2022 and
were aimed at both growth in ARPU and incentivising customers to
choose individual and more premium accounts with brokers.
Aruodas.lt took actions to increase the quality of the content by
reducing the number of duplicate advertisements which reduced the
number of listings per broker from 15 to 10 in basic and from 25 to
15 in mid-range packages as well as introducing a new, top package
tier.
-- Jobs and Services ARPU was up 29% due to increased prices, a
higher number of advertisements per company and intensified usage
of value-added services. Consequently, our jobs portal CVbankas.lt
is almost twice as big revenue-wise than it was a year ago and, as
the market leading job board, is benefiting from favourable
underlying market trends which are driving record job vacancy and
employee search activity. Increased prices were implemented on new
and renewing customers in September 2021 and are rolling out to the
customers through the 12 month cycle.
In terms of ARPU in our C2C segment:
-- Automotive average revenue per active advertisement was up
40% due to price changes and rising average transaction values (the
average car price on our portals grew 24%).
-- Real Estate average revenue per active advertisement was up
22% due to price changes and rising average transaction values
(apartment prices per square metre in Baltic capitals have
increased by 10%).
-- Generalist average revenue per listing was up 8% due to price
changes, rising average transaction values and the introduction of
a "two in one" package allowing listing in both Generalist
Skelbiu.lt and Vertical Autoplius.lt sites in new categories.
Operating costs
Our reported operating costs for 2022 included costs relating to
our IPO in July, namely the direct costs of fees paid to advisors
and the costs of a free share award to our employees , listed in
the Profitability and Alternative Performance Measures section
below.
The Group operates in a higher inflation environment for quite a
few years and recently, inflation was double-digit. However, our
costs represent a relatively small part of the revenue. This did
not significantly affect our profitability. On the contrary, rising
real estate, car prices and average salary are supportive to our
revenue growth in Real Estate, Auto and Jobs & Services.
The majority of our operating costs are people costs. Our team
grew from 124 FTEs in April 2021 to 127 FTEs in April 2022. The
total labour costs were EUR8.9 million and included EUR1.4 million
free share awards to employees as a one-off: in line with the
intention stated in the Prospectus, after the Admission the Group
gifted, on an unrestricted basis, to all employees in good
standing, free shares (with the number per employee based on length
of service with the business and ranging between EUR3 and EUR15
thousand in value). Executive Directors and the rest of Senior
Management team did not receive free shares under this arrangement.
Excluding one-off free share awards, investment into our people
increased by 25% to EUR7.5 million (2021: EUR6.0 million). We
appreciate and invest in talent, therefore the majority 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
EUR0.6 million. The cost of the PSP should continue increasing
gradually during the first three-year period after the IPO based on
the assumption that the PSP will award a list of employees yearly
with three-year nominal value options. Thereafter, the cost should
be relatively constant.
Other Group costs comprise marketing, IT and general
administrative expenses. At the end of February 2022, we supported
several NGOs assisting Ukraine and Ukrainians fleeing the war in
their country by donating EUR0.2 million. This has not been treated
as an adjusting item.
Net finance expense
BCG started its life as a public company with 2.75x leverage(5)
(as at 30 April 2021 the leverage was 6.04x) and a significantly
lower effective interest rate on the external debt compared to
previous financing arrangements. Instead of a 6% interest rate
prior to the IPO, the Group was paying a 2% interest rate from the
lower gross debt amount borrowed at IPO. However, the full effect
of the reduced finance cost was not yet visible this year as net
finance costs of EUR11.2 million in 2022 included:
-- EUR5.1 million upfront fee that was written off upon the
repayment of the debt under the Senior Facility Agreement ("SFA")
in July 2021 (as it is related to our IPO refinancing arrangement,
we consider it being a one-off cost item);
-- EUR1.6 million SFA fee relating to an early repayment
condition (as it is also related to our IPO refinancing
arrangement, we consider it being a one-off cost item); and
-- 2-month interest costs relating to our pre-IPO debt
facility.
Tax
The Group tax charge of EUR0. 05 million (2021: EUR1.9 million)
represented an effective tax rate of 1.9% in 2022 (2021:
105.2%).
Tax Group tax charge is a net of:
-- current tax expense of EUR3.1 million (2021: EUR3.5 million);
and
-- change in deferred tax which is positive EUR3.1 million
(2021: EUR1.6 million) and includes EUR1.3 million deferred tax
relating to the upfront fee write-off in the event of the early
debt repayment under the pre-IPO SFA in July 2021 (as it is related
to our IPO refinancing arrangement, we consider it being a one-off
item).
Companies under common control in Lithuania intend to form a tax
group to offset the taxable losses to taxable profits in accordance
with prevailing tax regulations, therefore the current tax expense
amount has decreased this financial year.
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.
Adjusted Adjusted Adjusted
IFRS Measures Measures IFRS Measures Measures IFRS Measures Measures
2022 2022 2021 2021 change change
EURm EURm EURm EURm EURm EURm
------------------------ --------------- --------------- ------------- ---------------- ------------- ----------
IPO related fees (7.4) (0.3)
Free share awards (1.4) -
Acquisition related
costs - (0.1)
Amortisation of
intangibles
arising from
acquisitions (PPA) (16.1) (16.1)
IPO refinancing: Senior
Facility
Agreement (SFA) related
early
repayment condition (1.6) -
IPO refinancing: SFA
related
upfront fee write off (5.1) -
IPO refinancing: SFA
capitalised
upfront fee related
deferred
tax liability write off 1.3 -
Tax effect on IPO
related fees 0.1 -
Deferred tax effect of
amortisation
of intangibles arising
from
acquisitions 1.4 1.4
--------------- ------------- ----------
Total Adjusting Items (28.8) (15.1)
------------------------ --------------- --------------- ------------- ---------------- ------------- ----------
Revenue 51.0 51.0 42.3 42.3 21% 21%
Net income (profit /
(loss)
for the period) 2.4 31.2 (0.1) 14.9 n.m. 109%
WANS, million 488.5 488.5 435.3 435.3
EPS, EUR cents 0.49 6.40 (0.02) 3.43 n.m. 86%
------------------------ --------------- --------------- ------------- ---------------- ------------- ----------
Taxation (0.0) (2.8) (1.9) (3.3) (98%) (15%)
Net finance costs (11.2) (4.5) (13.9) (13.9) (20%) (68%)
Operating profit 13.6 38.5 15.7 32.2 (13%) 20%
------------------------ --------------- --------------- ------------- ---------------- ------------- ----------
Depreciation and
amortisation (16.9) (0.7) (17.0) (0.8) (0%) (9%)
EBITDA 30.5 39.3 32.7 33.0 (7%) 19%
(17.4%
EBITDA margin 59.9% 77.1% 77.3% 78.1% pts) (1.0% pts)
------------------------ --------------- --------------- ------------- ---------------- ------------- ----------
Costs arising in connection with the IPO both in 2022 and 2021
have been isolated in recognition of the nature, infrequency, and
materiality of this capital markets transaction. These comprise IPO
related legal and advisory fees, free share awards to employees and
refinancing related amounts.
For clarity, since the IPO, where share-based payment charges
arise because of the operation of the Group's post-IPO Remuneration
Policy, such as the PSP plan, these are not treated as adjusting
items and the cost is deducted from the APMs defined below. Other
adjusting items in 2021 are associated with M&A transactions.
They are material, non-recurring and outside the ordinary course of
business.
As detailed at the IPO, BCG intends to return one third of
adjusted net income(6) (defined as the profit / (loss) for the
period adjusted for the post-tax impact of the IPO costs, IPO
refinancing arrangement related finance and tax items, M&A
costs and the post-tax impact of the amortisation of intangibles
arising from acquisitions) 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 109% and reached
EUR31.2 million (EUR14.9 million in 2021). Despite IPO related
costs, reported net income grew to EUR2.4 million (EUR(0.1) million
in 2021) mainly due arranged refinancing at IPO and therefore
significantly lower effective interest rate on the external debt
compared to previous financing arrangements.
Adjusted operating profit grew 20% to EUR38.5 million (EUR32.2
million in 2021) and reported operating profit decreased 13% to
EUR13.6 million reflecting IPO related fees in the year 2022
(EUR15.7 million in 2021). Operating profit and adjusted operating
profit is used to review business performance. Adjusted operating
profit is calculated by reference to the profit / (loss) for the
period and adjusting this to add back income tax expense, net
finance costs, IPO costs, IPO refinancing arrangement related
finance and tax items, M&A costs and acquired intangibles
amortisation.
EBITDA is calculated by reference to the profit / (loss) for the
period and adjusting this to add back income tax expense, net
finance costs, depreciation and amortisation. Reported EBITDA
includes all IPO related fees, free share awards and refinancing
costs.
Adjusted EBITDA(7) grew 19% to EUR39.3 million (EUR33.0 million
in 2021) and is calculated by reference to EBITDA for the period
and adjusting this for the costs related to IPO, acquisitions and
disposals in the period and one-off costs that do not reflect the
underlying operations of the business (but including ongoing
operating costs of being a public company). Management uses this
measure to monitor the compliance with the Group's financial
covenant and the leverage as per the loan agreement, which is
described in the note 18.
Adjusted EBITDA margin, which is calculated by dividing adjusted
EBITDA for the period by revenue for the period, was 77% despite
additional public listed company related costs and our support to
NGOs. We estimate that we lost around 1% of EBITDA margin due to
the invasion. Adjusted EBITDA margin in 2021 was 78%.
Earnings per Share ("EPS")
Basic EPS for 2022 was 0.49 EUR cents based on the WANS during
2022 of 488,467,552. ((0.02) EUR cents for 2021 based on WANS of
435,265,078).
Adjusted basic EPS is adjusted for the same items that are used
to adjust the Adjusted Net Income. Adjusted basic EPS for the year
2022 was 6.40 EUR cents (3.43 EUR cents for 2021).
There is no dilution effect from the employee share arrangements
this year.
Cash flow and cash conversion
Reported cash generated from operating activities grew from
EUR33.1 million in 2021 to EUR34.1 million in 2022, calculated
after consideration of EUR6.4 million of IPO fees paid during the
year. If adjusted for, cash generated from operating activities
grew 22% to EUR40.5 million, prior to deducting IPO fees
payments.
Generated cash was used to reduce the loan liability by
partially paying down the debt. We also bought 2.1 million of
Company shares (paying EUR3.4 million) to Employee Benefit Trust
("EBT") for future employee awards (the number of options granted
in our first year was 1.0 million shares).
During 2022, in addition to ongoing capital expenditure
requirements, we have set up a new infrastructure to accommodate a
disaster recovery site for our Estonian and Latvian sites. Our Cash
conversion (calculated as adjusted EBITDA minus Capex(8) (of EUR0,4
million) divided by adjusted EBITDA) was at 98.9% (99.8% in
2021).
Net debt and leverage
External refinancing was arranged on IPO, reducing the Group's
external loan from EUR214.3 million to EUR98 million. Since then,
EUR14 million of the existing debt has been voluntarily repaid.
Compared to the end of 2021, net debt(9) was reduced by EUR133.0
million to EUR66.4 million (as at 30 April 2021: EUR199.4 million)
with leverage at 1.7x (as at 30 April 2021: 6.0x).
30 April 30 April 2021
EURm 2022
---------------------------- --------- --------------
Bank Loan principal amount 84.0 214.3
Customer credit balances 2.3 2.2
---------------------------- --------- --------------
Total debt 86.3 216.5
Cash 19.9 17.1
---------------------------- --------- --------------
Net debt 66.4 199.4
Adjusted EBITDA LTM 39.3 33.0
---------------------------- --------- --------------
Leverage 1.7x 6.0x
Capital allocation
We intend to use all the cash we generate in a year, within that
same year or shortly thereafter for the below:
-- As detailed at the IPO, after the first year as a public
company, 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 Board proposed a final
dividend, with such dividend expected to be paid on 14 October 2022
subject to final shareholder approval at the AGM.
-- We will continue considering value-creating M&A
opportunities. All options for financing attractive acquisition
opportunities remain open, including using cash, increasing our
debt and even seeking additional equity capital. However, using
cash is the most likely and this would most likely not affect
dividends but might reduce capacity for share buy-backs.
-- Because our leverage is already below 2.0x and we do not have
any particular target level of debt, 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 at 30 April 2022 the Group had drawn none of the EUR10
million unsecured Revolving Credit Facility ("RCF") and had cash
balances of EUR19.9 million. The EUR10 million RCF is committed
until July 2026.
Lina Ma čien
Chief Financial Officer
7 July 2022
(1) CVbankas.lt only
(2) the Group presents the average monthly revenue per active
C2C auto listing on the basis of the C2C revenue generated by auto
listings only, excluding any C2C revenue generated from vehicle
parts, vehicles other than autos and other C2C listings.
(3) Skelbiu.lt only
(4) ARPU - monthly average revenue per user (in Auto - per
dealer, in Real Estate - per broker, in Jobs & Services - per
client)
(5) Leverage is calculated as Net debt over the last twelve
months (LTM) of Adjusted EBITDA. The Group's loan facility includes
a Total Leverage Ratio covenant (see note 13).
(6) See note 12
(7) See note 5
(8) Capex refers to acquisition of intangible assets and
property, plant and equipment line information in the Consolidated
statement of cash flows
(9) Net debt is calculated as total debt (bank loans and Osta.ee
customer credit balances) less cash.
Principal risks and uncertainties
A description of the principal risks and uncertainties faced by
the Group in the year ended 30 April 2022, together with the
potential impact and monitoring and mitigating activities is set
out in the table below.
Geopolitical risk
Description & impact Mitigation Developments in Risk trend
2022
---------------------------- ------------------------------- -----------
Further escalation or Monitoring the Russian aggression Increasing
prolonged war in Ukraine situation in the towards Ukraine
could result in the region and changes resulted in a temporary
unrest and instability in consumer behaviour 20-30% drop in the
in the Baltic countries. Group's traffic
Such situations could Maintaining a flexible KPIs. However, they
impact consumer behaviour cost base that recovered quickly
(e.g. reducing spending can respond to and 4-5 weeks after
/ investing), seller changing conditions the invasion the
activity (e.g. disruption Group's results
in retailing), or impact were already exceeding
investor perception pre-invasion levels.
of the business. This shows that
our Company as well
as Baltic economies
in general show
resilience to the
increased geopolitical
tension is the region.
---------------------------- ------------------------------- -----------
Disruption to our customer and / or supplier operations
Description & impact Mitigation Developments in Risk trend
2022
----------------------------------- ---------------------------- ------------------------------- -----------
Disruption to the Group's Remaining market The Baltic region Stable
customers' and / or leaders in respective was under various
suppliers' operations verticals while COVID-19 related
conducting day-to-day offering value-adding restrictions for
business such as a prolonged products and packages the period from
recovery from the pandemic October 2021 to
or any other similar Continual improvements April 2022. Despite
events may impact on to our platforms this, Lithuania
the Group's ability and Estonia, being
to deliver desired results. Developing our our main markets,
product proposition were among the first
to continue meeting countries in the
our customers' EU to reach their
needs and evolving pre-COVID-19 GDP
business models levels.
Maintaining a healthy
liquidity headroom
with the yet unused
revolving credit
facility of EUR10
million as at 30
April 2022, together
with a significant
forecast headroom
versus its covenant
---------------------------- ------------------------------- -----------
Competition
Description & impact Mitigation Developments in Risk trend
2022
---------------------------- ------------------------------- -----------
The Group might be affected Constant monitoring During the last Stable
by new competitors in of major competitors two years all our
existing markets or in adjacent business leading sites have
new spheres of activities. areas increased their
Also, changes in technology audience lead over
or consumer behaviour Continuous investment the closest competitor;
affect the way that into buying experience a number of customers
people search for cars, optimisation in also showed positive
real estate, jobs or order to ensure trends: the number
generalist products, we are reaching of automotive dealers
which may lead to a a broad demographic has grown by 4%
loss of consumer audience. versus the same
There is a risk of a Continuous development period in 2021,
new entrant to the market of cross-linkages we have more employers
with a new business between Group's (+47%) utilising
model (for example, horizontals and our sites to advertise
providing services free verticals than ever before
of charge), affecting and we maintained
the Group's audience, Continuous development a roughly the same
content and revenue. of C2C offering number of real estate
Furthermore, as the to provide value-for-money brokers.
Group diversifies into and differentiated
new and adjacent markets, service to private
the competitor set widens. listers
---------------------------- ------------------------------- -----------
Laws & regulations
---------------------------------------------------------------------------------------------------------------
Description & impact Mitigation Developments in Risk trend
2022
---------------------------- ------------------------------- -----------
The Group is subject A dedicated internal In 2022 the Group Stable
to certain competition expertise within had successfully
and antitrust laws. the business who defended its position
Antitrust laws may limit are responsible in the investigation
the market power and for identifying, by the Lithuanian
pricing or other actions assessing and responding Competition Council
of any particular firm. to upcoming changes which was closed
Companies can be subject in laws and regulations, in June 2021.
to legal action or investigations and we utilise The supervisory
and proceedings by national external specialists proceedings initiated
and supranational competition where necessary by the Estonian
and antitrust authorities Competition Authority
and claims from its are still ongoing.
clients and business The proceedings
partners for alleged cannot lead to imposition
infringements of competition of fines to any
and antitrust laws, Group company, however,
which could result in a precept ordering
fines or other forms the Group companies
of liability or otherwise to end any ongoing
damage the companies' infringements could
reputation. Such laws be imposed or the
and regulations could Estonian Competition
limit or prohibit the Authority could
ability to grow in certain potentially initiate
markets. misdemeanour proceedings
Future acquisitions that would entitle
by the Group could be the imposition of
impacted by applicable fine of up to EUR400
antitrust laws and could thousand. See note
be unsuccessful if the 18 for further detail.
necessary competition
approvals by competition
authorities are not
obtained.
---------------------------- ------------------------------- -----------
Technology
Description & impact Mitigation Developments in Risk trend
2022
----------------------------------- ---------------------------- ------------------------------- -----------
Cyber-attacks. The Ongoing investment Ahead of the IPO, Increasing
Group is at greater in security systems the Group performed
risk from cyber threats to ensure our systems a review of its
due to its large scale remain robust technology systems,
and prominence. As the data protection
business is entirely Ongoing monitoring environment and
dependent on information of external threats disaster recovery
technology to provide plans. Following
its services, successful Regular testing this review, the
attacks have the potential of the security Group significantly
to directly affect revenue. of the IT systems improved its cybersecurity
Major data breach. and platforms including by implementing
Cyber-attack or the penetration testing DDOS protection
Group's own failures, and bot management
resulting in disabling Disaster recovery systems, migrated
of platforms or systems, and business continuity all services to
or resulting in a major plan in place and a revised infrastructure
data breach, could have reviewed and tested and set up a new
an adverse impact on regularly infrastructure to
the Group's reputation, accommodate a disaster
loss of trust and loss Internal audit recovery site.
of revenue and / or programme which
profits. Data breaches, is outsourced to
a common form of cyber-attack, Deloitte, and includes
can have a massive negative a review of cyber
business impact and security is to
often arise from insufficiently be launched in
protected data. 2023
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.
---------------------------- ------------------------------- -----------
Climate change
Description & impact Mitigation Developments in Risk trend
2022
---------------------------- ------------------------------- -----------
From a long-term perspective, The Group is committed In 2022, the Group Increasing
the Group is subject to contributing set a goal to become
to physical climate to the climate net zero by 2050
risks directly related change cause by and be carbon neutral
to climate change and being environmentally from 2022 onwards.
transitional climate responsible, reducing Currently 1/3 of
risks, which may arise carbon emissions, electricity used
due to transitioning shifting to renewable by the Group is
to a lower-carbon economy. energy and offsetting derived from renewable
Increased severity of carbon emissions sources. In coming
extreme weather events years we will continue
due to accelerating We are already to improve our sustainability
global warming may result taking actions goals and environmental
in disruption to provision to adapt to the reporting
of services from our increasing customer
service providers, affect climate change
the availability of awareness and are
websites and change ready to adjust
commercial customers' if new environmental
behaviour. regulations arise:
New regulations relating adopt the platforms
to the reduction of for eco-friendly
carbon emissions and products, introduce
increasing customer necessary filters,
climate change awareness educate visitors,
may affect the Group's enrich ad data
operations and the volume with environmental
of listings and encourage impact related
us to adapt our business information
to the new regulations
and changing market
tendencies.
---------------------------- ------------------------------- -----------
Forward-looking statement
Certain Statements made in this results announcement are
Forward-looking Statements. Such Statements are based on current
expectations, forecasts and assumptions and are subject to a number
of risks and uncertainties that could cause actual events or
results to differ materially from any expected future events or
results expressed or implied in these Forward-looking Statements.
They appear in a number of places throughout this results
announcement and include Statements regarding the intentions,
beliefs or current expectations of the Directors concerning,
amongst other things, the Group's results of operations, financial
condition, liquidity, prospects, growth, objectives, strategies and
the business. Nothing in this results announcement should be
construed as a profit forecast. All Forward-looking Statements in
this results announcement are made by the Directors in good faith
based on the information and knowledge available to them as at the
time of their approval of this results announcement. Persons
receiving this report should not place undue reliance on
Forward-looking Statements. Unless otherwise required by applicable
law, regulation or accounting standard, the Group does not
undertake any obligation to update or revise publicly any
Forward-looking Statements, whether as a result of new information,
future events, future developments or otherwise.
All Intellectual Property Rights in the content and materials in
this results announcement vests in and are owned absolutely by
Baltic Classifieds Group PLC unless otherwise indicated, including
in respect of or in connection with but not limited to all
trademarks and the results announcement's design, text, graphics,
its selection and arrangement.
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the year ended 30 April 2022
Notes 2022 2021
(EUR thousands) (EUR thousands)
-----------------
Revenue 4 50,959 42,268
Other income 6 7
Expenses 5 (37,349) (26,565)
-----------------
Operating profit 13,616 15,710
-----------------
Finance income 6 138 2
Finance expenses 6 (11,309) (13,935)
-----------------
Net finance costs (11,171) (13,933)
----------------- -----------------
Profit before tax 2,445 1,777
----------------- -----------------
Income tax expense 7 (46) (1,870)
Profit / (loss) for
the period 2,399 (93)
----------------- -----------------
Other comprehensive - -
income/(loss)
----------------- -----------------
Total comprehensive
income/(loss) for the
year 2,399 (93)
----------------- -----------------
Attributable to:
----------------- -----------------
Owners of the Company 2,399 (93)
----------------- -----------------
Earnings / (loss) per
share (EUR cents)
----------------- -----------------
Basic and diluted 8 0.49 (0.02)
----------------- -----------------
Consolidated Statement of Financial Position
At 30 April 2022
Notes 2022 2021
(EUR thousands) (EUR thousands)
----------------- -----------------
Assets
Property, plant and
equipment 474 211
Intangible assets and
goodwill 9 400,489 416,909
Right-of-use assets 457 761
Non-current assets 401,420 417,881
----------------- -----------------
Trade and other receivables 10 2,970 2,571
Prepayments 189 46
Cash and cash equivalents 19,914 17,115
Current assets 23,073 19,732
----------------- -----------------
Total Assets 424,493 437,613
----------------- -----------------
Equity
Share capital 11 5,822 506,509
Own shares held (3,418) -
Capital reorganisation
reserve 11 (286,904) (287,033)
Other reserves - 27
Retained earnings 611,877 (11,229)
Total equity 327,377 208,274
----------------- -----------------
Loans and borrowings 13 82,487 210,413
Deferred tax liabilities 5,844 8,901
Non-current liabilities 88,322 219,314
----------------- -----------------
Current tax liabilities 4 1,293
Loans and borrowings 13 323 2,713
Payroll related liabilities 866 770
Trade and other payables 14 4,458 3,601
Contract liabilities 3,143 1,648
Current liabilities 8,794 10,025
----------------- -----------------
Total liabilities 97,116 229,339
----------------- -----------------
Total equity and liabilities 424,493 437,613
----------------- -----------------
Consolidated Statement of Changes in Equity
For the year ended 30 April 2022
Own Capital
Share Share shares reorganisation Other Retained Total
Capital premium held reserve reserves earnings Equity
(EUR (EUR (EUR (EUR (EUR (EUR (EUR
thousands) thousands) thousands) thousands) thousands) thousands) thousands)
----------- ----------- ----------- --------------- ----------- ----------- ------------
Note
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Balance at 1
May
2020 11 506,452 - - (287,033) - (11,109) 208,310
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Loss for the
period - - - - - (93) (93)
Other - - - - - - -
comprehensive
income
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Total
comprehensive
income - - - - - (93) (93)
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Issuance of
preference
shares 11 57 - - - - - 57
Transfer to
reserves - - - - 27 (27) -
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Balance at 30
April 2021 506,509 - - (287,033) 27 (11,229) 208,274
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Profit for the
period - - - - - 2,399 2,399
Other - - - - - - -
comprehensive
income
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Total
comprehensive
income - - - - - 2,399 2,399
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Transactions
with
owners:
Group
restructure
and IPO 11 75,265 43,143 - 129 (27) - 118,510
Transfer
arising
from capital
reduction 11 (575,956) (43,143) - - - 619,099 -
Share issue
post
IPO 11 4 - - - - (4) -
Share based
payments 17 - - - - - 1,612 1,612
Purchase of
shares
for
performance
share plan - - (3,418) - - - (3,418)
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Balance at 30
April 2022 5,822 - (3,418) (286,904) - 611,877 327,377
--------------- ----- ----------- ----------- ----------- --------------- ----------- ----------- ------------
Consolidated Statement of Cash Flows
For the year ended 30 April 2022
Notes 2022 2021
(EUR thousands) (EUR thousands)
Cash flows from operating activities
Profit / (loss) for the period 2,399 (93)
Adjustments for:
Depreciation and amortisation 5 16,894 16,966
Amortisation of up-front fee and
borrowing costs 6 5,580 938
Impairment loss on trade receivables 10 59 23
(Profit) / Loss on property, plant
and equipment disposals - 20
Taxation 7 46 1,870
Net finance costs 6 5,606 12,997
Share-based payments 17 1,612 -
Other non-cash items 93 -
Working capital adjustments:
(Increase) in trade and other receivables (521) (452)
(Increase) / Decrease in prepayments (128) 158
Increase in trade and other payables 966 252
Increase in contract liabilities 1,495 387
----------------- -----------------
Cash generated from operating activities 34,101 33,066
Corporate income tax paid (4,403) (3,420)
Interest and commitment fees paid (8,870) (12,950)
Net cash inflow from operating activities 20,828 16,696
----------------- -----------------
Cash flows from investing activities
Acquisition of intangible assets
and property, plant and equipment (433) (78)
Proceeds from sale of property, plant
and equipment - 75
Acquisition of subsidiaries, net
of cash acquired - (25,000)
Other investments - (11)
Net cash used in investing activities (433) (25,014)
----------------- -----------------
Cash flows from financing activities
Proceeds from issuance of share capital 11 121,339 57
Proceeds from loans and borrowings 13 96,650 15,000
Repayment of loans and borrowings 13 (228,295) (10,000)
Capitalised borrowing costs (677) -
Payment of lease liabilities (305) (339)
Share issue related expenses 11 (2,874) -
Purchase of own shares for performance (3,418) -
share plan
Net cash from financing activities (17,580) 4,718
----------------- -----------------
Net cash inflow from operating,
investing and financing activities 2,815 (3,600)
----------------- -----------------
Differences on exchange (16) -
----------------- -----------------
Net Increase / (Decrease) in cash
and cash equivalents 2,799 (3,600)
----------------- -----------------
Cash and cash equivalents at the
beginning of the year 17,115 20,715
Cash and cash equivalents at the
end of the year 19,914 17,115
----------------- -----------------
1. General information
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 30 April 2022 but
is derived from those accounts. Statutory accounts for 2022 are the
first set of consolidated financial statements and will be
delivered in due course.
The auditor has reported on those accounts; their reports were
(i) 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.
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 consolidated financial
statements as at and for the year ended 30 April 2022 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. Basis of preparation
The consolidated financial statements have been prepared in
accordance with the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority and with UK-adopted international
accounting standards ("UK-adopted IFRS").
The Group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group").
The Group financial statements have been prepared and approved
by the directors in accordance with UK-adopted IFRS.
Baltic Classifieds Group PLC was incorporated on 26 April 2021
and on 5 July 2021 was admitted to trading on the London Stock
Exchange. At the same time as the admission, the Company acquired
88.42 per cent of the share capital of ANTLER TopCo S.à r.l and
100% of ANTLER Management S.A. that owned the residual 11.58% of
the share capital of ANTLER TopCo S.à r.l in a share for share
exchange, thereby inserting Baltic Classifieds Group PLC as the
Parent Company of the Group that includes ANTLER MidCo S.à r.l.
By applying the principles of common control accounting, this
group reorganisation has been accounted for as a business
combination outside of the scope of a business combination as
defined under IFRS 3. Book value accounting has been adopted,
meaning that the carrying values of assets and liabilities of the
parties to the combination were not adjusted to fair value on
consolidation, and the results and cashflows of ANTLER TopCo S.à
r.l. and Baltic Classifieds Group PLC were brought into the
consolidated financial statements of Baltic Classifieds Group PLC
as if Baltic Classifieds Group PLC had always owned ANTLER TopCo
S.à r.l.
The comparative financial information for the year ended 30
April 2021 are the consolidated results of ANTLER TopCo S.à r.l.
(see below). They constitute the financial statements of ANTLER
TopCo S.a.r.l, ANTLER PIKCo S.a r.l and the consolidated financial
statements of ANTLER MidCo S.à r.l. The consolidated financial
statements of ANTLER MidCo S.à r.l were presented as part of the
Prospectus submitted as part of the Admission. As the comparative
information presented in the consolidated financial statements also
includes ANTLER TopCo S.a.r.l and ANTLER PIKCo S.a r.l there are
immaterial differences between this financial information and that
previously presented as part of the Prospectus. The application of
UK-adopted IFRS (rather than IFRSs as adopted for use in the EU)
did not require any adjustment to the financial information related
to ANTLER MidCo S.à r.l.
Baltic Classifieds Group PLC has adopted the financial reporting
framework of the group below it, which has previously presented
financial statements under EU adopted International Financial
Reporting Standards and given there are no differences between the
UK and EU adopted International Financial Reporting Standards, the
Group does not consider itself to be a first time adopter of
UK-adopted IFRS.
The audited consolidated financial statements of ANTLER MidCo
S.a.r.l for financial year ended 30 April 2021 are available on
request from the Company's registered office. Historic Financial
Information in respect of ANTLER MidCo S.a.r.l is also available in
Part B of the Prospectus submitted as part of Admission which can
be found on the Company's website.
The comparative figures for the financial year ended 30 April
2021 are not the statutory accounts of Baltic Classifieds Group PLC
for that financial year as the statutory accounts for 2022 are the
first set of financial statements.
Use of estimates and judgments
The preparation of the consolidated 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.
Estimates
The below accounting estimate is considered to be critical to
the reporting of results of operations and financial position:
-- Carrying values of goodwill. An impairment review is
performed of goodwill balances by the Group on a 'value in use'
basis. This requires judgment in estimating the future cash flows,
the time period over which they occur, and in arriving at an
appropriate discount rate to apply to the cashflows as well as an
appropriate long term growth rate. Each of these judgments has an
impact on the overall value of cashflows expected and therefore the
headroom between the cashflows and carrying values of the cash
generating units.
Other important estimates:
-- Useful lives of intangible assets. A useful life is assigned
to an acquired intangible asset based on the estimated period of
time an asset is likely to remain in service. This judgement has an
impact on the amortisation expense for any given period.
-- Share-based payments. Share-based payment arrangements in
which the Group receives goods or services as consideration for its
own equity instruments are accounted for as equity-settled
share-based payment transactions. The fair value of services
received in return for share options is calculated with reference
to the fair value of the award on the date of grant. Black-Scholes
model has been used to calculate the fair value and the Directors
have therefore made estimates with regard to the inputs to that
model and the period over which the share award is expected to vest
(see note 17).
Judgements
The below judgment is also considered to be important to the
reporting of results of operations and financial position:
-- Deferred tax asset. An unrecognised deferred tax asset of
EUR3.9m (30 April 2021: EUR4.0m) has not been recognised in
relation to tax losses incurred by the Company's indirect
subsidiary UAB Antler Group. Deferred tax assets are recognised
only to the extent that it is probable that future taxable profits
will be available against which the temporary differences can be
utilised. Recognition, therefore, involves judgement regarding the
probability of future taxable profit of the indirect subsidiary
being available.
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 this report 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 EUR10m and is available until July
2026. As at 30 April 2022 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 EUR14m of the loan during
the FY 2022, the outstanding balance at the year ends amounts to
EUR84m. The Group had cash balances of EUR19.9m at the year
end.
During the financial year ended 30 April 2022 the Group has
generated a profit of EUR2.4m, however it was highly affected by
the one-off IPO and Free Share Awards related expenses (note 5).
The Directors also prepared detailed cash flow forecasts for the
period ending 12 months from the date of this report. The
assumptions used in the cash flow forecasts are based on the
Group's historical performance and the Directors' experience of the
industry and takes into account both internal and external
factors.
Stress case scenarios have been modelled to make the assessment
of going concern to take into account severe but plausible
potential impacts of a major data breach, adverse changes to the
competitive environment and a continuing geopolitical tensions in
the neighbouring countries. The stress testing indicates that the
Group would be able to withstand the impact, remain cash generative
and be able to continue to comply with debt covenants 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 this report. For
this reason, they continue to adopt the going concern basis in
preparing the financial statements.
Changes in accounting policies
The accounting policies applied in the consolidated financial
statements are the same as those applied in ANTLER MidCo S.à r.l
consolidated financial statements as at and for the year ended 30
April 2021 except for the newly adopted accounting policies
provided below.
Share-based payments. Equity-settled awards are valued at the
grant date, and the fair value is charged as an expense in the
income statement spread over the vesting period. Fair value of the
awards are measured using Black-Scholes pricing model. The credit
side of the entry is recorded in equity. Cash-settled awards are
revalued at each reporting date with the fair value of the award
charged to the profit and loss account over the vesting period and
the credit side of the entry recognised as a liability.
Acquisitions from entities under common control. A "business
combination involving entities or businesses under common control"
is a business combination in which all of the combining entities or
businesses are ultimately controlled by the same party or parties
both before and after the combination, and that control is not
transitory. Business combinations under common control are excluded
from the scope of IFRS 3 Business Combinations. For business
combinations among entities under common control, the Group elects
to apply the common control exclusion in IFRS 3 and where this is
the case applies an accounting policy reflecting the "predecessor
value method" or "book value accounting method". Under this method,
rather than acquisition accounting in accordance with IFRS 3, the
acquired assets and liabilities of the acquired business are
recorded at their existing carrying "book" values, as such no
goodwill is recorded. A business combination involving entities
under common control was completed in the current period and is
described in note 11.
Capital reorganisation reserve. The capital reorganisation
reserve arose on consolidation as a result of the share for share
exchange transactions that took place on 5 July 2021 (note 11). It
represents the difference between the nominal value of shares
issued by Baltic Classifieds Group PLC in this transaction and the
share capital and other capital reserves of ANTLER TopCo
S.a.r.l.
Own shares held. The Employee Benefit Trust ('EBT') provides for
the issue of shares to Group employees principally under
Performance Share Plan scheme. The Group has control of the EBT and
therefore consolidates the EBT in the Group financial statements.
Accordingly, shares in the Company held by the EBT are included in
the balance sheet at cost as a deduction from equity.
Alternative performance measures. 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. The key alternative performance
measures presented by the Group are:
-- Adjusted Operating profit which is calculated by reference to
the profit (loss) for the period and adjusting this to add back
income tax expense, net finance costs, IPO costs, IPO refinancing
arrangement related finance and tax items, M&A costs and
acquired intangibles amortisation.
-- EBITDA which is calculated by reference to the profit /
(loss) for the period and adjusting this to add back income tax
expense, net finance costs, depreciation and amortisation.
-- Adjusted EBITDA which is calculated by reference to EBITDA
for the period and adjusting this for the costs related to IPO,
acquisitions and disposals in the period and one-off costs that do
not reflect the underlying operations of the business (but
including ongoing operating costs of being a public company).
-- Adjusted EBITDA Margin which is calculated by dividing
Adjusted EBITDA for the period by revenue for such period.
-- Adjusted Net Income which is defined as the profit / (loss)
for the period adjusted for the post-tax impact of the IPO costs,
IPO refinancing arrangement related finance and tax items, M&A
costs and the post-tax impact of the amortisation of intangibles
arising from acquisitions.
-- Adjusted basic EPS is adjusted for the same items that are
used to adjust the Adjusted Net Income.
-- Net Debt which is calculated as total debt (bank loans and
Osta.ee customer credit balances) less cash.
-- Leverage which is calculated as Net Debt over last twelve
months (LTM) of Adjusted EBITDA. The Group's loan facility includes
a Total Leverage Ratio covenant (see note 13).
The Directors believe that these alternative performance
measures provide a helpful measure of the Group's business
performance and year-on-year trends, as IPO related expenses or
one-off Free Share Awards are significant but do not reflect
operational activity.
3. 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 4.
4. Revenue
In the following tables, revenue from contracts with customers
is disaggregated by primary geographical markets, key revenue
streams and revenue by business lines.
2022 2021
(EUR thousands) (EUR thousands)
Lithuania 35,236 27,915
Estonia 14,620 13,332
Latvia 1,103 1,021
----------------- -----------------
Total 50,959 42,268
----------------- -----------------
Key revenue streams
2022 2021
(EUR thousands) (EUR thousands)
Advertising revenue 3,731 3,661
Listings revenue 43,725 35,091
- Listings revenue:
B2C 24,590 18,187
- Listings revenue:
C2C 19,135 16,904
Ancillary revenue(1) 3,503 3,516
----------------- -----------------
Total 50,959 42,268
----------------- -----------------
Revenue by business lines
2022 2021
(EUR thousands) (EUR thousands)
Automotive 18,293 16,822
----------------- -----------------
- Advertising
revenue 1,122 1,111
- Listings revenue:
B2C 7,432 6,629
- Listings revenue:
C2C 6,507 5,847
- Ancillary revenue 3,232 3,235
Real Estate 12,451 10,655
----------------- -----------------
- Advertising
revenue 1,903 1,782
- Listings revenue:
B2C 7,052 6,051
- Listings revenue:
C2C 3,439 2,778
- Ancillary revenue 57 44
Generalist 10,397 9,798
----------------- -----------------
- Advertising
revenue 701 763
- Listings revenue:
B2C 1,282 1,218
- Listings revenue:
C2C 8,200 7,587
- Ancillary revenue 214 230
Jobs & Services 9,818 4,993
----------------- -----------------
- Advertising
revenue 7 5
- Listings revenue:
B2C 8,822 4,289
- Listings revenue:
C2C 988 692
- Ancillary revenue 1 7
Total 50,959 42,268
----------------- -----------------
(1) Ancillary revenue includes revenue from financial
intermediation, subscription services, and other. Financial
intermediation revenue accounts for 94% of the total ancillary
revenue for the year ending 30 April 2022 and 85% of the total
ancillary revenue for the year ending 30 April 2021.
5. Operating profit
2022 2021
(EUR thousands) (EUR thousands)
----------------- -----------------
Operating profit is after
charging the following:
Labour costs(1) (8,886) (6,047)
Depreciation and amortisation (16,894) (16,966)
Advertising and marketing
services (841) (756)
IT expenses (692) (546)
Impairment (loss) / reversal
on trade receivables and
contract assets (59) (23)
Other(2) (9,977) (2,227)
----------------- -----------------
(37,349) (26,565)
----------------- -----------------
(1) For the year ended 30 April 2022 labour costs include
EUR1,378 thousand free share awards related expenses (note 17). For
the year ended 30 April 2021 labour costs include EUR36 thousand of
Auto24 acquisition related expenses.
(2) Other expenses include 2 and 3 from the table below.
Operating profit reconciliation with Adjusted EBITDA
2022 2021
(EUR thousands) (EUR thousands)
----------------- -----------------
Operating profit 13,616 15,710
Depreciation and amortisation 16,894 16,966
EBITDA 30,510 32,676
Acquisition related costs(1) - 75
IPO related fees(2) 7,393 256
Free share awards(3) 1,378 -
Adjusted EBITDA 39,281 33,007
----------------- -----------------
Adjusted EBITDA margin 77.1% 78.1%
----------------- -----------------
(1) Fees and costs incurred in relation to the acquisition of
eight legal entities including Auto24.ee.
(2) Fees and costs incurred in relation to the Initial Public
Offering (IPO).
(3) Costs related to Free Share Awards to employees of the Group
(note 17).
6. Net finance costs
2022 2021
(EUR thousands) (EUR thousands)
----------------- -----------------
Other financial income 138 2
----------------- -----------------
Total finance income 138 2
----------------- -----------------
Interest expenses(1) (9,426) (13,396)
Commitment and agency
fees (132) (497)
Other financial expenses(2) (1,734) (16)
Interest unwind on lease
liabilities (17) (26)
Total finance expenses (11,309) (13,935)
----------------- -----------------
Net finance costs recognised
in profit or loss (11,171) (13,933)
----------------- -----------------
(1) Interest expense for the year ended 30 April 2022 contains
EUR5,075 thousand of upfront fee that was written off upon the
repayment of Senior Facility Agreement in July 2021.
(2) Other financial expenses for the year ended 30 April 2022
contain EUR1,618 thousand of Senior Facility Agreement related
early repayment condition.
7. Income taxes
2022 2021
(EUR thousands) (EUR thousands)
----------------- -----------------
Current tax expense
Current year (3,102) (3,519)
Deferred tax expense
Change in deferred
tax(1) 3,056 1,649
Tax expense (46) (1,870)
----------------- -----------------
(1) Change in deferred tax for the year ended 30 April 2022
contains EUR1,266 thousand of deferred tax liability related to the
upfront fee that was written off upon the repayment of Senior
Facility Agreement in July 2021.
8. Earnings per share
2022 2021
------------ ------------
Weighted average number
of shares outstanding number 488,467,552 435,265,078
Profit (loss) attributable
to owners of the Company EUR thousands 2,399 (93)
Basic earnings per share EUR cents 0.49 (0.02)
Basic earnings per share (EPS) amounts are calculated by
dividing net profit for the year attributable to ordinary equity
holders of the parent by the weighted average number of ordinary
shares outstanding during the year. The weighted average number of
shares for the current and the comparative periods has been stated
as if the Group share for share exchange (note 11) has occurred at
the beginning of the comparative periods.
In calculating diluted EPS, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potentially dilutive shares. The Group's potentially dilutive
instruments are in respect of share-based incentives granted to
employees. Options under the Performance Share Plan are
contingently issuable shares and are therefore only included within
the calculation of diluted EPS if the performance conditions are
satisfied.
Although the Group started operating a Performance Share Plan
(note 17), the potential ordinary shares are not treated as
dilutive as the PSP performance condition was not satisfied for the
year ended 30 April 2022.
9. Intangible assets and goodwill
Goodwill Trademarks Relationship Other intangible Total
and domains with clients assets
(EUR thousands)
(EUR thousands) (EUR thousands) (EUR thousands) (EUR thousands)
----------------- ----------------- ----------------- ----------------- -----------------
Cost
Balance at 1 May
2020 328,732 63,317 50,710 1,535 444,294
Disposals - (97) - (188) (285)
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 30 April
2021 328,732 63,220 50,710 1,347 444,009
Balance at 1 May
2021 328,732 63,220 50,710 1,347 444,009
Disposals - - - (23) (23)
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 30 April
2022 328,732 63,220 50,710 1,324 443,986
----------------- ----------------- ----------------- ----------------- -----------------
Accumulated
amortisation
and impairment losses
Balance at 1 May
2020 - 4,375 6,308 94 10,777
Amortisation - 6,331 9,824 340 16,495
Disposals - (13) - (159) (172)
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 30 April
2021 - 10,693 16,132 275 27,100
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 1 May
2021 - 10,693 16,132 275 27,100
Amortisation - 6,323 9,824 273 16,420
Disposals (23) (23)
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 30 April
2022 - 17,016 25,956 525 43,497
----------------- ----------------- ----------------- ----------------- -----------------
Carrying amounts
Balance at 1 May
2020 328,732 58,942 44,402 1,441 433,517
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 30 April
2021 328,732 52,527 34,578 1,072 416,909
----------------- ----------------- ----------------- ----------------- -----------------
Balance at 30 April
2022 328,732 46,204 24,754 799 400,489
----------------- ----------------- ----------------- ----------------- -----------------
10. Trade and other receivables
2022 2021
(EUR thousands) (EUR thousands)
Trade receivables 3,002 2,524
Expected credit loss on
trade receivables (71) (84)
Other short term receivables 39 131
Total 2,970 2,571
----------------- -----------------
Trade and other receivables (except for loan receivables) are
non-interest bearing. The Group has recognised impairment losses in
the amount of EUR71 thousand as at 30 April 2022 (EUR84 thousand as
at 30 April 2021). Change in impairment losses for trade
receivables, netted with recoveries, for financial period amounted
to EUR59 thousand as at 30 April 2022 and EUR23 thousand as at 30
April 2021.
11. Equity
Share capital Share premium
Number of amount amount
shares (EUR thousands) (EUR thousands)
------------ ----------------- -----------------
Balance as at 1 May
2020 435,265,079 506,452 -
Redeemable preference - 57 -
share issued
------------ ----------------- -----------------
Balance as at 1 May 2021 435,265,079 506,509 -
Group restructure:
- (57) -
* Redeemable preference share redeemed
* Share issue for IPO 64,734,921 75,322 48,959
* Share issue related transaction costs - - (5,816)
Nominal value of ordinary
shares reduced and share
premium cancelled to create
distributable reserves - (575,956) (43,143)
Shares issued to satisfy
Free share awards (note
17) 392,405 4 -
------------ ----------------- -----------------
Balance as at 30 April
2022 500,392,405 5,822 -
------------ ----------------- -----------------
BCG was incorporated on 26 April 2021 with 1 ordinary share with
a value of GBP1 (EUR1.15) per share allotted. On 27 April 2021 the
company issued 1 redeemable preference share with a value of
GBP49,999 (EUR57,487) per share.
On 5 July 2021 BCG was inserted into the Group's holding
structure via a share for share exchange with the shareholders of a
previous top holding entity, ANTLER TopCo S.a.r.l:
1) BCG issued 38,740,076 ordinary shares at GBP1 (EUR1.16) each
in the share for share exchange to acquire ANTLER Management S.A.
that was a minority shareholder of ANTLER TopCo S.a.r.l.
2) BCG issued 396,525,002 ordinary shares at GBP1 (EUR1.16) each
in the share for share exchange to acquire the rest of ANTLER TopCo
S.a.r.l.
3) 1 redeemable preference share with a value of GBP49,999
(EUR57,487) per share was redeemed.
On 5 July 2021 BCG issued 64,734,921 ordinary shares with a
value of GBP1 (EUR1.16) each that were listed at GBP1.65 (EUR1.92)
on the London Stock Exchange.
Share issue related expenses amounting to EUR5,816 thousand were
set against the share premium that arose during the listing, out of
which EUR2,942 thousand relate to the underwriting fee that reduced
the cash received from the IPO proceeds.
On 23 September 2021 BCG undertook a Court approved capital
reduction to create distributable reserves. The entire amount
standing to the credit of BCG share premium account was cancelled
and the nominal value of each ordinary share in issue in the
capital of BCG was reduced from GBP1 (EUR1.15) to GBP0.01
(EUR0.01). This created a total of EUR619,100 thousand in
distributable reserves.
On 19 October 2021 BCG issued 392 405 shares with a value of
GBP0.01 (EUR0.01) each to be gifted, on an unrestricted basis, to
all employees other than the Executive Directors and the rest of
the Senior Management team.
Share capital and share premium in the comparative periods have
been stated as if the Group share for share exchange has occurred
at the beginning of the comparative periods. For this reason, a
capital reorganisation reserve has been created which comprises a
difference between the recalculated share capital amount and the
total of share capital and share premium of ANTLER TopCo
S.a.r.l.
Included within shares in issue at 30 April 2022 are 2,100,000
(nil in previous period) shares held by the Employee Benefit Trust
("EBT").
12. Dividends
No interim dividend was declared for the year ended 30 April
2022 and therefore no dividends have been paid out in the
period.
The proposed final dividend for the year ended 30 April 2022 of
1.4 EUR cents per share, totalling EUR6,976 thousands, is subject
to approval by shareholders at the Annual General Meeting ("AGM")
and hence has not been included as a liability in the financial
statements. Dividends will be paid in euros however shareholders
will have an opportunity to opt for a payment in British
pounds.
The Directors intend to return one third of Adjusted Net Income
(as defined below) each year via an interim and final dividend,
split one third and two thirds, respectively.
The Adjusted Net Income is defined as the profit / (loss) for
the period adjusted for the post-tax impact of the IPO costs, IPO
refinancing arrangement related finance and tax items, M&A
costs and the post-tax impact of the amortisation of intangibles
arising from acquisitions.
The Adjusted Net Income for the year ended 30 April 2022 as well
as for the year ended 30 April 2021 is as follows:
2022 2021
(EUR thousands) (EUR thousands)
----------------- -----------------
Profit / (loss) for the period 2,399 (93)
Acquisition related costs(1) - 75
Tax effect of Acquisition related - -
costs
IPO related fees(2) 7,393 256
Tax effect of IPO related fees (70) -
Free share awards(3) 1,378 -
IPO refinancing: Senior Facility 1,618 -
Agreement related early repayment
condition(4)
IPO refinancing: Senior Facility 5,075 -
Agreement related upfront fee write
off(5)
IPO refinancing: Senior Facility (1,266) -
Agreement capitalised upfront fee
related deferred tax liability write
off(6)
Amortisation of intangibles arising
from acquisitions (PPA)(7) 16,147 16,142
Deferred tax effect of amortisation
of intangibles arising from acquisitions (1,434) (1,434)
Adjusted Net Income 31,240 14,946
----------------- -----------------
(1) Fees and costs incurred in relation to the acquisition of
eight legal entities including Auto24.ee.
(2) Fees and costs incurred in relation to the Initial Public
Offering (IPO).
(3) Costs related to Free Share Awards to employees of the Group
(note 17).
(4) Previous Senior Facility Agreement related early repayment
fine.
(5) Previous Senior Facility Agreement related capitalised
upfront fee write off.
(6) Previous Senior Facility Agreement capitalised upfront fee
related deferred tax liability write off.
(7) Amortisation of trademarks and domains and amortisation of
relationship with clients (note 9).
13. Loans and borrowings
Non-current liabilities 2022 2021
(EUR thousands) (EUR thousands)
----------------- -----------------
Bank loan 82,311 210,051
Lease liabilities 167 362
82,478 210,413
----------------- -----------------
Current liabilities 2022 2021
(EUR thousands) (EUR thousands)
----------------- -----------------
Bank loan 121 2,412
Lease liabilities 202 301
323 2,713
----------------- -----------------
Bank loan :
Effective
Loan interest Amount
Period end Maturity currency rate (EUR thousands)
----------- ---------- -----------------
Bank Loan 30 April 2022 2026 July EUR 4.04%(1) 82,432
----------- --------------- ------------ ------------ ---------- -----------------
Bank Loan 30 April 2021 2026 July EUR 6.08% 212,463
----------- --------------- ------------ ------------ ---------- -----------------
(1) Effective interest rate for the year ended 30 April 2022
includes 2 months of since repaid loan.
In July 2021 the Group drew down a new loan consisting of
Facility B (EUR98,000 thousand) and agreed on a new revolving
credit facility of EUR10,000 thousand. The previous loan was fully
repaid in July 2021. Due to early repayment the Group paid an early
repayment condition that amounted to EUR1,618 thousand (included
within other financial expenses for the year ended 30 April 2022).
The Group also wrote off a capitalised upfront fee that amounted to
EUR5,075 thousand (included within interest expenses for the year
ended 30 April 2022) and a related deferred tax liability that
amounted to EUR1,266 thousand (included within deferred tax
expenses for the year ended 30 April 2022).
As at 30 April 2022 the loan comprised of Facility B
(outstanding balance: EUR84,000 thousand as EUR14,000 thousand were
repaid during the financial year), the undrawn revolving credit
facility amounted to EUR10,000 thousand. As at 30 April 2021 the
loan comprised of Facility A1 (outstanding balance: EUR35,000
thousand), Facility A2 (EUR17,500 thousand), Facility B1
(EUR115,000 thousand) and Facility B2 (EUR31,410 thousand).
Capitalised debt issue costs amounted to EUR1,689 thousand and
EUR5,243 thousand for the year ended 30 April 2022 and 30 April
2021 respectively. Interest payable amounted to EUR121 thousand and
EUR3,411 thousand for the year ended 30 April 2022 and 30 April
2021 respectively.
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
30 April 2022 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:
Total Leverage Ratio Facility B Revolving
Margin Facility
(% p.a.) Margin (%
p.a.)
Greater than 4.50:1 3.50 3.50
----------- -----------
Equal to or less than 4.50:1 but greater
than 4.00:1 3.00 3.00
----------- -----------
Equal to or less than 4.00:1 but greater
than 3.50:1 2.75 2.75
----------- -----------
Equal to or less than 3.50:1 but greater
than 3.00:1 2.50 2.50
----------- -----------
Equal to or less than 3.00:1 but greater
than 2.75:1 2.25 2.25
----------- -----------
Equal to or less than 2.75:1 but greater
than 2.50:1 2.00 2.00
----------- -----------
Equal to or less than 2.50:1 1.75 1.75
----------- -----------
Reconciliation of movements of liabilities to cashflows arising
from financing activities
Borrowings Lease liabilities Total
(EUR thousands) (EUR thousands) (EUR thousands)
----------------- ------------------ ---------------------
Balance as at 1 May 2020 206,481 818 207,299
----------------- ------------------ ---------------------
Changes from financing cash flows
- Proceeds from loans and borrowings 15,000 - 15,000
- Repayment of borrowings (10,000) - (10,000)
- Payment of lease liabilities - (339) (339)
Total changes from financing
cash flows 5,000 (339) 4,661
Other liability related changes
- New leases - 184 184
- Interest expenses 13,396 26 13,422
- Interest paid (12,414) (26) (12,440)
Total other liability related
changes 982 184 1,166
Balance as at 30 April 2021 212,463 663 213,126
----------------- ------------------ ---------------------
Changes from financing cash flows
- Proceeds from loans and borrowings 96,650 - 96,650
- Repayment of borrowings (228,295) - (228,295)
- Payment of lease liabilities - (305) (305)
Total changes from financing
cash flows (131,645) (305) (131,950)
Other liability related changes
- New leases - 67 67
- Lease disposal - (56) (56)
- Capitalised borrowing costs (676) - (676)
- Capitalised borrowing costs
write off 5,075 - 5,075
- Interest expenses 4,351 17 4,368
- Interest paid (7,136) (17) (7,153)
Total other liability related
changes 1,614 11 1,625
Balance as at 30 April 2022 82,432 369 82,801
----------------- ------------------ -----------------
14. Trade and other payables
2022 2021
(EUR thousands) (EUR thousands)
Trade payables 235 322
Accrued expenses 344 203
Other tax 1,578 849
Customer credit balances 2,289 2,210
Other payables 12 17
----------------- -----------------
4,458 3,601
----------------- -----------------
15. Related party transactions
During the period ended 30 April 2022 the transactions with
related parties outside the consolidated Group included:
-- remuneration of key management personnel (note 16), including
share option awards under the PSP scheme (note 17);
-- before the IPO a part of ANTLER Management S.A. shares were
acquired by the three Executive Directors together with other key
employees as part of management incentive program that existed
since BCG acquisition by funds advised by Apax Partners ("Apax") in
FY 2020; shares were purchased at a value equal to the price paid
by Apax in FY 2020;
-- at the IPO three Non-Executive Directors purchased shares of
ANTLER TopCo Sàrl outside the Offer at the IPO price;
-- share for share exchange transaction during the
reorganisation for the IPO (note 11) where three Executive
Directors, three Non-Executive Directors and Directors of Group
Companies exchanged the shares they held in ANTLER Management S.A.
and ANTLER TopCo Sàrl for the like-for-like amount of shares in
Baltic Classifieds Group PLC.
During the year ended 30 April 2021 there were no transactions
with related parties outside the consolidated Group except for the
remuneration of key management personnel (note 16).
16. Remuneration of key management personnel and other
payments
Key management personnel comprise three Executive Directors
(CEO, CFO, COO), four Non-Executive Directors (since July 2021
only) and Directors of Group companies. Remuneration of key
management personnel in the reporting period, including social
security and related accruals, amounted to EUR969 thousand for the
period ended 30 April 2022 and EUR560 thousand for the period ended
30 April 2021. Remuneration of Directors of the Board (three
Executive and four Non-Executive Directors) in the reporting
period, including social security and related accruals, amounted to
EUR748 thousand . As the Board was formed in the reporting period
only, the closest comparative to the remuneration of the Directors
of the Board would be the remuneration of three Executive Directors
which, including social security and related accruals, amounted to
EUR345 thousand for the year ended 30 April 2021.
During the period ended 30 April 2022 the Executive Directors of
the Group were granted a set number of share options under the PSP
scheme. Share-based payment expenses amounted to EUR509 thousands
for the period ended 30 April 2022 (nil in previous period). None
of the options vested during the reporting period. See note 17 for
further detail.
During the year ended 30 April 2022 and 30 April 2021, 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.
17. Share-based payments
Performance Share Plan
The Group currently operates a Performance Share Plan (PSP) that
is subject to a service and a non-market performance condition. The
estimate of the fair value of the PSP is measured using
Black-Scholes pricing model.
The total charge in the period relating to the PSP scheme was
EUR644 thousand (nil in previous periods).
The PSP plan consists of share options for Executive Directors
and certain key employees with a vesting period of 3 years.
If the options remain unexercised after a period of 10 years
from the date of grant, the options expire. Furthermore, options
are forfeited if the employee leaves the Group before the options
vest, unless under exceptional circumstances.
On 27 July 2021, the Group awarded 1,041,745 share options under
the PSP scheme. For these awards, the Group's performance is
measured by reference to the Group's Earnings per Share in FY2024.
See Directors' Remuneration report in the ARA for further
detail.
The fair value of the 2021 award was determined to be EUR2.56
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.
Free Share Awards
In addition to the PSP scheme, as it was intended and noted in
the Prospectus (section 11.2 (Company-wide remuneration) of Part
XVII (Additional Information)) 392,405 of free shares were awarded
to all employees of the Group with the number per employee based on
length of service with the business and ranging between EUR3,000
and EUR15,000 in value. The total value of the shares awarded
amounted to EUR968 thousand. Fringe benefit tax was paid by the
Group, it amounted to EUR410 thousand.
Executive Directors and the rest of Senior Management team did
not receive free shares under this arrangement.
18. Enquiries by the Competition Authorities
As at 30 April 2022 as well as at 30 April 2021, there was no
on-going litigation, which could materially affect the consolidated
financial position of the Group.
As disclosed in the Prospectus, Diginet LTU UAB, a Group
company, was subject to an investigation by the Lithuanian
Competition Council ("LCC") following a complaint by UAB Ober Haus
(the "Claimant"), a real estate broker, who alleged that the
Group's Lithuanian real estate portal had abused its position in
the real estate online classifieds markets by applying unfair high
listing prices. In December 2020, the LCC concluded after an
in-depth analysis that the prices to B2C listers and C2C listers
were not unfair or restrictive to competition and closed the
investigation. In January 2021, Claimant appealed the LCC's
decision with the court of first instance, asking the court to
annul the LCC's decision and to return the case back to the LCC for
further investigation arguing that the LCC erred in applying the
necessary legal standards for evaluation of unfair prices. On 17
June 2021, the court of first instance declined to annul the LCC's
decision and dismissed the Claimant's appeal. The Group had
successfully defended its position as the Claimant refused to use
its right to appeal the decision to the Lithuanian Supreme
Administrative Court and the case is closed.
In 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 the 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 also holds negotiations
with Reales OÜ in order to develop a suitable contract and the
pricing for the service needed by the claimant. On March 15, 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.
19. Subsequent events
On 1 July 2022, the Company's indirect subsidiary City24 SIA
acquired GetaPro business in exchange for EUR1.6 million in cash.
It was an assets acquisition. GetaPro is a services classifieds
portal operating in Latvia and Estonia. We believe this acquisition
will allow us to increase our presence in the services classifieds
market in the Baltics.
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END
FR UNRURUSUBRUR
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July 07, 2022 02:00 ET (06:00 GMT)
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