Category Archives: AIM Rule 26

SCHOLIUM GROUP’S SHAPERO RARE BOOKS SELLS 50% STAKE IN RUSSIAN STOCK

Scholium Group PLC on Tuesday said its subsidiary Shapero Rare Books Ltd has sold a 50% interest in its entire stock of Russian books, maps, prints and works on paper to PY Ltd.

PY is a company controlled by Pierre-Yves Guillemet, a former employee of Shapero.

The Russian stock had a cost and book value at March 31 of GBP1.0 million, and in the year ended on that date generated a contribution of around GBP15,000 to central costs.

The consideration comprises GBP250,000 payable on completion and a non-interest-bearing loan of GBP315,000 repayable from the sale of the Russian stock in the period to February 28, 2022. Any balance of the loan not repaid by then is to be repaid in cash in full by that date.

Scholium said it will retain ownership of 50% of the Russian stock, and will receive half the sale proceeds including a half share of the profit.

“We are delighted to have entered into this agreement with PY Ltd, which will enable us to redeploy part of our investment in the Russian stock into more buoyant parts of our business, whilst also retaining an interest in the profits which we are confident Pierre-Yves Guillemet will earn,” Chairman Jasper Allen said.

AGM Notice and posting of results

Scholium Group plc

(“Scholium Group” or the “Company”)

AGM Notice and posting of results

 Scholium Group is pleased to announce that yesterday it posted copies of its Annual Report and Financial Statements for the year ended 31 March 2017 to its shareholders.  A Notice convening the Company’s Annual General Meeting (AGM) was included.  The AGM will be held at 32 St. George Street, London W1S 2EA on Wednesday, 20 September 2017 at 10:30 a.m. 

A copy of the Annual Report and Financial Statements for the year ended 31 March 2017 as well as the Notice of the AGM is available on the Company’s website, www.scholiumgroup.com 

For further information please visit www.scholiumgroup.com or contact:

Scholium Group plc

Jasper Allen, Chairman

Simon Southwood, Chief Financial Officer

+44 (0)20 7493 0876

WH Ireland Ltd – Nominated Adviser

Chris Fielding

+44 (020) 7220 1666

Holdings in Company

TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARESi

 

1. Identity of the issuer or the underlying issuer
of existing shares to which voting rights are
attached:
ii

Scholium Group plc

2 Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights

X

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached

An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments

An event changing the breakdown of voting rights

Other (please specify):

3. Full name of person(s) subject to the
notification obligation:
iii

Peter Gyllenhammar

4. Full name of shareholder(s)
(if different from 3.):iv

The Union Discount Company of London Ltd

Peter Gyllenhammar AB

5. Date of the transaction and date on
which the threshold is crossed or
reached:
v

07/07/2017

6. Date on which issuer notified:

7. Threshold(s) that is/are crossed or
reached:
vi, vii

6%



8. Notified details:

A: Voting rights attached to shares viii, ix

Class/type of
shares


if possible using
the ISIN CODE

Situation previous
to the triggering
transaction

Resulting situation after the triggering transaction

Number
of
Shares

Number
of
Voting
Rights

Number
of shares

Number of voting
rights

% of  voting rights x

Direct

Direct xi

Indirect xii

Direct

Indirect

Ordinary Shares GB00BYN5YK77

 

741,336

 

741,336

841,336

841,336

6.19%

B: Qualifying Financial Instruments

Resulting situation after the triggering transaction

Type of financial
instrument

Expiration
date
xiii

Exercise/
Conversion Period
xiv

Number of voting
rights that may be
acquired if the
instrument is
exercised/ converted.

% of voting
rights

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi

Resulting situation after the triggering transaction

Type of financial
instrument

Exercise price

Expiration date xvii

Exercise/
Conversion period
xviii

Number of voting rights instrument refers to

 

% of voting rights xix, xx

 

 

 

Nominal

Delta

Total (A+B+C)

Number of voting rights

Percentage of voting rights

841,336

6.19%



9. Chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held, if applicable:
xxi

 

Peter Gyllenhammar is the 100% owner of the following companies owning the shares in Scholium Group plc:

 

The Union Discount Company of London Ltd 

Peter Gyllenhammar AB                                                                     

 

Proxy Voting:

10. Name of the proxy holder:

N/A

11. Number of voting rights proxy holder will cease to hold:

N/A

12. Date on which proxy holder will cease to hold voting rights:

N/A


13. Additional information:

14. Contact name:

Peter Gyllenhammar

15. Contact telephone number:

0046 708 185244

Preliminary Statement


Scholium Group plc

Preliminary Results

7 July 2017

Scholium is engaged in the business of rare books and art.
Its primary operating subsidiary is Shapero Rare Books which is one of the
leading UK dealers trading internationally in rare and antiquarian books and
works on paper.

The group also trades alongside other third party dealers in
the broader arts and collectibles business via its subsidiary, Scholium
Trading.

Operational Highlights

·
Stabilisation of core markets after Brexit

·
Group turnaround to profitability in the second half of the
financial year

·
Significant cost cuts implemented to reduce the fixed cost base
of the Group by the targeted £320,000 in the new financial year

·
Improved trading in the first quarter of the new financial year

Financial Highlights

Years  Ended 31 March  (all figures ‘000)

2017

2016

Revenue

6,120

6,742

Gross Profit

2,250

2,376

Gross Margin

37%

35%

Adjusted Operating Profit

(224)

24

Cash

970

1,309

NAV/Share

73.0p

74.6p

_

Jasper Allen, Chairman of Scholium,
noted “We are delighted to have finished the year on a positive note after the
uncertainty in our markets around the UK Referendum.  The momentum from
the profitable second half has continued into the new financial year. Furthermore,
the group has a strong balance sheet and, following implementation of the
programme of cost savings, is now well-placed to deliver a positive outcome.”

For further information, please contact

Scholium Group plc

Jasper Allen, Chairman

+44 (0)20 7493 0876

WH Ireland Ltd – Nominated Adviser

Chris Fielding

+44 (0)20 7220 1666

 

 

Chairman’s Statement

I am pleased to report that the business returned to
profitability in the second half of the financial year, despite the setback
caused by customers’ hesitancy (experienced by all traders in this market)
following the UK vote on EU membership in the first half of the year.  The
market in our core areas has stabilised, and the upward momentum seen in the
second half of the financial year to 31 March 2017 has, I am delighted to
report, continued into the beginning of the current financial year.

The Group remains well capitalised with strong stock,
approximately £0.97 million in cash and no debt.  Furthermore, the
business is now well placed in the current financial year to benefit from the
cost savings we outlined in the interim report, as well as from the recent
admission to the Antiquarian Booksellers’ Association (“ABA”) and the various
international fairs that can now be accessed by the Group.

Business Review

At the end of the 2015/16 financial year, the Group’s
ambition was to build on the profitability of the prior year.  The second
half of the 2016/17 financial year showed continued progress, but the loss in
the first half of the year, caused by the effect of customer indecision
following the UK referendum on EU Membership, marred the year as a whole.

We have continued to attend major trade fairs as
in previous years.  Whilst many of these have been profitable, and are
particularly important for customer acquisition, in the coming year we have
taken the decision to reduce the cost of certain major art fairs and reallocate
this expenditure to fairs that are now available to the group by virtue of the
new membership of the ABA.  We are also pleased with the results achieved
generally through the circulation to customers of high quality catalogues.

Scholium Trading performed strongly in the year – it delivered
a healthy contribution to the 2016/17 financial year, and we continue to see
opportunities from dealers we have worked with in the past.

Revenue for the year of £6.1 million (2016: £6.7 million)
generated an adjusted operating loss of £0.2 million (2016: profit of £0.02
million). Of particular note is the 88% increase in revenue in the second half
of the financial year as compared to the first half.

Staff

As ever, our dedicated employees have contributed
significantly to the restoration of operating profitability of the Group in the
year and I would like to take this opportunity of thanking them again for their
hard work and effort in what has been a challenging year.

Board Changes

As announced on 5 April 2017, Simon Southwood is stepping
down from the board of the Company in August 2017 and his roles and
responsibilities as Finance Director will be taken on by Peter Floyd in a part
time capacity.  We are grateful for Simon’s considerable assistance in
recent years and wish him well in his new ventures; and we look forward to
welcoming Peter to the board.

Current Trading and Prospects

The start to the new financial year has been strong – the
trend in trading from the second half has continued.  Furthermore, the
business remains well capitalised with high quality stock and, at the year end,
had net assets of £9.9 million including £0.97 million of cash as at 31 March
2017, equivalent to 73.0p and 7.1p per ordinary share respectively.

The upward momentum seen in the second half of 2016/17,
combined with the effect of the cost savings now fully implemented, mean that
the Group is materially ahead of the equivalent position at the end of June
2016.

Whilst we have reduced the operating costs in the Modern
& Contemporary division, we continue to maintain a presence in that market
and continue to seek viable trading opportunities in Scholium Trading.

Strategic Report

This report provides an overview of our strategy and of our
business model; gives a review of the performance of the business and of our
financial position at the year-end; and sets out the principal risks to which
the Group is exposed. In addition, it comments on the future prospects of the
business.

Principal Activities & Review of the Business

The Group is engaged in the business of fine art and
collectibles.  It is typically engaged as a dealer — buying, owning and
selling rare & collectible items objects for a profit.  It does this
on its own or alongside third party dealers in rare and collectible goods.

Shapero Rare Books is the core business of the
Group.  It is a leading international dealer in rare and collectible
antiquarian books and works on paper with special expertise in Natural History,
Russian and Travel books.  It is also developing its Shapero Modern brand
which deals in modern and contemporary prints and editions by better-known
artists who already have commercial success.

Scholium Trading is the trading arm of the
Group.  Based upon recognition that art dealers are often
undercapitalised, it works alongside these dealers in the broader rare and
collectibles market where they have the expertise and the clients, but not the
capital, to trade in their markets.

The Group maintains value from ownership of its stock and
generates value through its expertise, astute buying and the profitable sale of
stock.

Strategy & Key Objectives

The Company is seeking to grow its businesses organically
through reinvestment of profits in high quality stock.  Our key objectives
are to:


Increase the profitable trade of Shapero Rare Books and Shapero Modern
through increased sales, selective purchasing and management of the cost base; _


Develop Scholium Trading to be the ‘first call’ for dealers in high
value rare and collectible items seeking support in their trading items which
exceed their immediate financial capacity; and


Seek to expand the group by encouraging new teams — that have specialist
expertise in their markets and are seeking a well-capitalised company from
which to trade — to join Scholium.

Review of the year from continuing operations

In keeping with the experience in the broader UK business
environment, the business showed a marked upturn in its fortunes in the second
half of 2016/17: revenue increased by 88% and gross profit increased by 49%,
compared with the first half of the year; and the Group returned to
profitability in that period.

The loss for the year is attributable to the weak first half,
associated with uncertainty around the UK referendum on EU membership.

Notwithstanding the stronger second half of the year, we
took the view that the fixed cost base of the business was too high and we have
taken significant steps to bring the cost base in line with the overall
performance of the Company. We have realigned employee incentives and sought to
reduce costs not associated with revenue or necessary for governance and
reporting requirements.

We have reduced the group’s fixed cost base by approximately
£320,000 on an annualized basis. This is after accounting for new fairs that
the business will attend that are operated by or in association with the
Antiquarian Booksellers’ Association, which Shapero Rare Books has
joined.  We are also delighted to be exhibiting at Frieze Masters in 2017
which is the premier London art fair for livres d’artistes (artists’ books) in
which the Group deals.

Group Performance for the 12 months ending 31 March 2017 analysed by Half
Year

6 months ended (all figures £’000)

H1 (unaudited)

H2

Variance

Revenue

2,127

3,993

88%

Gross
Profit

903

1,347

49%

(Loss)/Profit
Before Tax

-239

15

n/a

Key Performance Indicators

The Group is managed and reports on a number of Key
Performance Indicators.

Our current principal KPIs are:

·
Gross margin, EBITDA, earnings per share;

·
The breadth and distribution of the stock of assets held by the
Group (analysed by type, department, category, area of expertise and age);

·
Stock turnover of assets and gross yield (again, analysed by
type, etc.); and

·
Various key risk indicators including capital resources,
portfolio allocation and cash.

We do not report on all of these KPIs as they would create
an overly long and complex document.

Where the performance of any book category does not meet
expected returns, the business actively seeks to re-allocate capital to categories
and/or interests that are more fashionable and saleable.

Key Performance Indicators

Years  Ended 31 March  (all figures £’000)

2017

2016

 

 

Variance

Revenue

6,120

6,742

-9.2%

Gross Profit

2,250

2,376

-5.3%

Gross Margin

37%

35%

+1.5%

Stock Turnover (months)

23.91

20.64

-15.8%

Gross Profit on stock

29%

32%

-3%

Group Performance

Shapero Rare Books

The books department had a difficult first half of 2016/17
due to the uncertainty immediately following the referendum.  It was clear
that customers, in particular international customers, were not prepared to
commit to material purchases whilst the Referendum created uncertainty in UK
markets.  Fortunately, the consequent weakness in Sterling created
significant opportunities for international buyers and the second half of the financial
year saw a material strengthening in the book department’s core markets.
To put this in context, revenue for the book department increased from £1.9
million in the first half of the year to £3.3 million in the second half of the
year and gross profit increased from £0.8 million to £1.2 million.  The
gross margin in the second half of the year reflects the normal operation of
the business.

Notwithstanding the improvement in performance in the second
half of the year, the management of the department volunteered to reduce
materially the fixed cost base of the Group.  This has entailed reductions
in the salaries of the senior management (and the introduction of appropriate
incentive arrangements), withdrawal from non-performing art/collectibles fairs
and reorganisation of the group’s sales, marketing and PR strategy.

We are grateful to management for the consensual way this
has been agreed and implemented.   The cost savings were implemented
as of 1 April 2017, and will be evident in the performance of the rare book
department in the Group’s next interim report.

Scholium Trading

Scholium Trading performed strongly in the year – it continues
to provide a very valuable contribution to Group performance.  We find
that partners are supportive of the offering — we are a sophisticated, discrete
and relatively well capitalised dealer to trade alongside.   The
yield on average capital commitment through the year is approximately 42%;
gross margin is volatile as the structure of transactions changes from trade to
trade.  Gross profit for the year of £269K (2016: £204k) represents growth
of 32% as compared to the prior year.

Group costs are not allocated to the trading division and,
as such, this has not had any associated cost reductions.

Central Costs

Central costs include the cost of all board members as well
as the those associated with an AIM listing.  These costs are normally
fixed but may include discretionary costs associated with governance.  The
variance in central costs as compared to the prior year is the consequence of
an independent review of the business commissioned by the non-executive
directors in the context of first half performance.

Consistent with the rest of the Group, central costs in the
coming year will be reduced due to voluntary salary reductions by all the
directors.

Year ending March 2017 (all figures £’000)

Shapero Rare Books

Scholium  Trading

Central

Consolidated

Revenue

5,197

923

6,120

Gross Profit

1,981

269

2,250

Gross Margin

38%

29%

0%

37%

Adjusted Operating Profit

(69)

241

(397)

(225)

Year ending March 2016 (all figures £’000)

Shapero Rare Books

Scholium Trading

Central

Consolidated

Revenue

5,609

1,133

0

6,742

Gross Profit

2,172

204

0

2,376

Gross Margin

39%

18%

n/a

35%

Adjusted Operating Profit

192

188

(356)

24

Dividend

The Board does not propose to declare a final dividend for
the 2016/17 financial year.

Simon Southwood

Chief Financial Officer

 

 

Principal Risks & Uncertainties

Supply of antiquarian books and other items

By definition, rare and antiquarian books and other works on
paper are rare. The availability of fresh stock of such items is often driven
by major life events, such as inheritance, unrecovered debt, divorce or
downsizing due to economic malaise. The business of Shapero Rare Books is
reliant upon individual works and collections of works coming onto the market
and upon the Group being able to access those business opportunities. There is
no guarantee that fresh stock will come onto the market in sufficient
quantities to meet the Group’s plans for continued growth.

When works become available for sale or purchase, such sales
are often dealt with privately and discretely and, accordingly, there is no
guarantee that the Group’s employees will be able to access such business opportunities
or to negotiate successfully the purchase of fresh stock coming onto the
market.

Reliance on key international trade fairs

A significant proportion of the Group’s sales are made at
international trade fairs, and in particular The European Fine Art Fair. If
this fair were to be discontinued it would have a material effect on the
ability of the Group to sell goods. There are a limited number of stands at
international trade fairs and as a result places are highly sought after. Whilst
members of the Group have been exhibiting at these fairs for many years, there
can be no certainty that it will continue to secure a place in the future.

Competition

The market in the books and other items in which the Group
trades is competitive. In the market for antiquarian books and other items in
which Shapero Rare Books trades, the Group faces various competitive pressures
including from the major auctioneers, Sotheby’s, Christie’s and Bonhams, as
well as smaller auctioneers and a large number of dealers and smaller
operators.

The Group is likely to face continued and/or increased
competition in the future both from established competitors and/or from new
entrants to the market. The Group’s competitors include businesses with greater
financial and other resources than the Group. Such competitors may be in a
better position than the Group to compete for future business opportunities. If
the Group is unable to compete effectively in any of the markets in which it
operates, it could lead to material adverse effect on the Group’s business,
financial condition, and operations.

Co-owned rare and collectible goods

In the case of high value items or collections, the Group
will often acquire the items jointly with another bookseller and if not
expressly provided for there is a risk that the Group will not be able to sell
the entire asset without the agreement of all joint-owners. In this and other
respects the Group relies on the honesty and integrity of other dealers. Whilst
the Group takes care to deal only with established counterparties and
experienced dealers who are well known to senior management and/or the
Directors, there can be no guarantee that co-owners will comply with the agreed
terms (including, for example not charging the items) or that such co-owners
will not enter into administration or other insolvency procedure, and in the
event there is a loss of the co-owned goods it is not certain that the Group
could claim under its insurance policy in relation thereto.

Stock valuation and liquidity

The Group will trade in rare and collectible items, which
may be highly illiquid. The value of goods acquired is difficult to assess and
it may not be possible for management to sell the assets at or above the price
for which they were acquired. The value of assets in the balance sheet may not
represent the actual resale value achievable.

Theft, loss or damage

Rare and collectible items are highly mobile goods.
Furthermore such goods are frequently transported internationally for trade
shows or other marketing opportunities. Whilst precautions are taken to ensure
safe passage, the Group’s assets may be lost, damaged or stolen. While the
Group carries specialist insurance, there is no guarantee that the Group’s
insurance cover will be adequate in all circumstances. Assets of the Group will
be placed with third parties for sale on commission. While the Group intends to
take appropriate precautions when placing assets with third parties, there is a
risk that these assets outside of the Group’s direct control may be stolen or
replaced by unscrupulous third parties with fakes or forgeries.

Authenticity and export authority

The Directors of the Company will ensure that due diligence
is undertaken on the authenticity of the assets acquired for sale. Nonetheless fakes
and forgeries do exist in the market and despite due diligence the Group may
acquire these believing them to be authentic. Further, the attribution of works
to a writer or artist is not always exact science, and there can be no
guarantee that assets of the Group will not have been mistakenly attributed in
this way. Lack of authenticity is not covered by the Group’s insurance. Whilst
the Group takes appropriate care when acquiring works which may be of material
importance in the state of origin, there can be no guarantee that works
acquired by the Group are not subject to restrictions on export or sale.

Insurance

The Group carries a specialist insurance policy under the
Antiquarian Booksellers Association Insurance Scheme which covers each of the
businesses. The Directors believe that the Group carries appropriate insurance
for a business of its size and nature but there can be no guarantee that the
extent or value of the cover will be sufficient, in relation to stock in
transit or on consignment. The Directors review the Group’s insurance
arrangements on an annual basis and endeavour to insure its stock adequately,
but there is no certainty that future claims will not fall within the
exclusions under the policy or that the insurer will pay out any claim if made.
Further, there can be no guarantee that the necessary insurance will be
available to the Group in the future at an acceptable cost or at all.

Premises

Like many of the established dealers in the market, the
Group has a publicly accessible gallery in Mayfair, London from where Shapero
Rare Books operates. The Directors believe that the location is highly
desirable and an important factor in the success of the business as a whole.

Terms of sale

To date, the contractual arrangements which the Group has
entered into with clients, customers and other dealers have not always included
(amongst other things) terms dealing specifically with

  1. transfer of ownership and risk,
  2. contract formation,
  3. price and payment,
  4. limitations and exclusions of liability, and
  5. governing law and jurisdiction.

In light of the foregoing, there can be no guarantee that
the Group’s arrangements with its customers will not be terminated on short
notice or that the Group will not at some future time face challenges or
disputes in relation to the contractual or other arrangements with its clients.

If the Group became involved in a contractual dispute and/or
a third party was successful in any contractual dispute with the Group, any
resultant loss of revenues or exposure to litigation costs or other claims
could have a material adverse effect on the Group’s reputation, business,
financial condition and/or operations or financial results. The Group has
revised its standard terms of sale to seek to ensure that, going forward, the arrangements
with clients, customers, dealers and others will include terms dealing with
each of the aforementioned areas.

Employees

The Group is reliant on a small group of key employees for
their knowledge and the reliance customers place on their integrity and
service.  In the event that a key employee were to leave the business may
suffer a short term decrease in performance whilst it adjusts.

Currency risk

The Directors anticipate that the Group will conduct certain
of its transactions other than in Pounds Sterling, the Company’s functional
currency. As a result, movements in foreign exchange rates may impact the
Group’s performance. The Group does not contract any hedging arrangements in
respect of currency positions.

 

 

Consolidated Statement of Comprehensive Income

Year ended

Year ended

31 Mar

31 Mar

2017

2016

Note

£000

£000

Revenue

3

6,120

6,742

Cost of Sales

(3,870)

(4,366)

Gross profit

2,250

2,376

 

 

Distribution expenses

(427)

(345)

Administrative expenses

(2,048)

(2,007)

Exceptional items:

Loss of office

7

(24)

Total  administrative expenses

(2,048)

(2,031)

Profit/(Loss) from operations

 

 

 

 

(225)

(0)

Exceptional Items

24

Adjusted Operating Profit

 

 

 

 

(225)

24

Profit/(Loss) from operations

(225)

(0)

Financial income

1

2

Financial expenses

(5)

Profit/(loss) before taxation

(224)

(3)

Income tax credit/(expense)

8

(3)

Profit/(Loss) for the year from continuing
operations

(224)

(6)

Discontinued operations

 

 

 

 

 

 

 

Profit/(loss) on sale of discontinued operations

(10)

Profit/(Loss) for the year
and total comprehensive income attributable to equity holders of the parent
company

(224)

(16)

Basic and diluted loss per share:

From continued operations – pence

9

(1.66)

(0.05)

From discontinued operations – pence

(0.07)

Total Diluted (loss)/profit per share – pence

(1.66)

(0.12)

 

 

Consolidated Statement of Financial Position

31 Mar

31 Mar

2017

2016

Note

£000

£000

Assets

Non-current
assets

Property,
plant and equipment

55

92

Deferred corporation
tax asset

11

277

277

332

369

Current
assets

Inventories

12

7,873

7,550

Trade and
other receivables

13

2,050

2,034

Cash and
cash equivalents

970

1,309

10,893

10,893

Total
assets

11,225

11,262

Current
liabilities

Trade and
other payables

1,302

1,115

Total
current liabilities

1,302

1,115

Total
liabilities

1,302

1,115

Net
assets/liabilities

9,923

10,147

Equity
and liabilities

Equity
attributable to owners of the parent

Ordinary
shares

14

136

136

Share
Premium

9,516

9,516

Merger
reserve

82

82

Retained
earnings/(deficit)

189

413

Total
equity

9,923

10,147

 

 

Consolidated Statement of Changes in Equity

Share

Share

Merger

Retained

Total

Capital

Premium

reserve

deficit

equity

 

£000

£000

£000

£000

£000

Balance at 1 Apr 2014

132

9,458

82

1,109

10,781

Loss for the year from continued and discontinued operations

(476)

(476)

Total comprehensive income for the period

(476)

(476)

Shares issued in the period

4

58

62

Dividends paid

(204)

(204)

Balance at 31 Mar 2015

136

9,516

82

429

10,163

Loss for the year from continued and discontinued operations

(16)

(16)

Total comprehensive income for the period

(16)

(16)

Balance at 31 March 2016

136

9,516

82

413

10,147

Loss for the year from continued and discontinued operations

(224)

(224)

Total comprehensive income for the period

(224)

(224)

Balance at 31 March 2017

136

9,516

82

189

9,923

There were no transactions with owners in the year.

The following describes the
nature and purpose of each reserve within owners’ equity:

Share capital

Amount subscribed for shares at nominal value.

Share premium

Amount subscribed for share capital in excess of nominal value
less attributable share-issue expenses.

Merger reserve

Amounts attributable to equity in respect of merged subsidiary
undertakings.

Retained earnings/(deficit)

Cumulative profit/( loss) of the Group attributable to equity
shareholders.

 

Consolidated Statement of Cash Flows

31 Mar

31 Mar

2017

2016

£000

£000

Cash flows from operating activities

(Loss)/profit before tax

(224)

(16)

Depreciation of property, plant and equipment

27

31

Reclassification of fixed assets

19

Profit/(loss) on disposal of discontinued operation

(8)

(178)

7

Decrease/(increase) in inventories

(323)

(79)

Decrease/(increase) in trade and other receivables

(16)

(337)

Increase/(decrease) in trade and other payables

186

(514)

Increase/(decrease) in trade and other payables from
discontinued operations

Net cash generated from operating activities

(331)

(923)

Cash flows from investing activities

Purchase of property, plant and equipment

(8)

(31)

Interest received

Disposal of discontinued operation

146

Net cash used in investing activities

(8)

115

Cash flows from financing activities

Proceeds from the issuance of ordinary shares

Share issue expenses

(Repayment)/receipt of shareholder loans

Dividends paid

Interest paid

(5)

Net cash (used)/generated from financing activities

(5)

Net increase/(decrease) in cash and cash equivalents

(339)

(812)

Cash and cash equivalents at the beginning of the year

1,309

2,122

Cash and cash equivalents at the end of the year

970

1,309

 

Company Statement of Financial Position

31 Mar

31 Mar

2017

2016

Note

£000

£000

Assets

Non-current assets

Group Investments

10

5,200

5,200

Deferred Tax Asset

 

62

5,262

5,200

Current assets

Trade and other receivables

13

6,524

6,322

Cash and cash equivalents

452

913

6,976

7,235

Total assets

12,238

12,435

Current liabilities

Trade and other payables

78

91

Total current liabilities

78

91

Total liabilities

78

91

Net assets/liabilities

12,160

12,344

Equity and liabilities

Equity attributable to owners of the parent

Ordinary shares

14

136

136

Share Premium

9,516

9,516

Merger reserve

2,809

2,809

Retained earnings/(deficit)

(301)

(117)

Total equity

12,160

12,344

 

Statement of Changes in Company Equity

Share

Share

Merger

Retained

Total

Capital

Premium

reserve

deficit

equity

£

£000

£000

£000

£000

Balance at 1 Apr 2014

132

9,458

2,809

165

12,564

Profit for the year

191

191

Total comprehensive income for the period

191

191

Shares issued in the period

4

58

62

Dividends paid

(204)

(204)

Balance at 31 March 2015

136

9,516

2,809

152

12,613

Loss for the year

(269)

(269)

Total comprehensive income for the period

(269)

(269)

Balance at 31 March 2016

136

9,516

2,809

(117)

12,344

Loss for the year

(184)

(184)

Total comprehensive income for the period

(184)

(184)

Balance at 31 March 2017

136

9,516

2,809

(301)

12,160

The following describes
the nature and purpose of each reserve within owners’ equity:

Share capital

Amount subscribed for shares at nominal value.

Share premium

Amount subscribed for share capital in excess of
nominal value less attributable share-issue expenses.

Merger reserve

Amounts attributable to equity in respect of merged
subsidiary undertakings.

Retained earnings/(deficit)

Cumulative profit/( loss) of the Group attributable
to equity shareholders.

 

Company Cashflow

31 Mar

31 Mar

2017

2016

£000

£000

Cash flows from operating activities

(Loss)/profit before tax

(246)

(269)

(246)

(269)

Decrease/(increase) in trade and other receivables

(202)

(795)

Increase/(decrease) in trade and other payables

(13)

12

Net cash generated from operating activities

(461)

(1,052)

Cash flows from investing activities

Interest received

0

0

Net cash used in investing activities

0

0

Cash flows from financing activities

Interest paid

0

0

Net cash (used)/generated from financing activities

0

Net increase/(decrease) in cash and cash equivalents

(461)

(1,052)

Cash and cash equivalents at the beginning of the year

913

1,965

Cash and cash equivalents at the end of the year

452

913

 

Notes to the Consolidated Financial Statements

1          General information

              Scholium
Group plc and its subsidiaries (together ‘the Group’) are engaged in the
trading and retailing of rare and antiquarian books and works on paper
primarily in the United Kingdom. The Company is a public company domiciled and
incorporated in England and Wales (registered number 08833975). The address of
its registered office is 32 St George Street, London W1S 2EA.

2          Basis of
preparation and accounting policies

              The
consolidated financial information, which represents the results of the Company
and its subsidiaries, has been prepared in accordance with International
Financial Reporting Standards and IFRC Interpretations issued by the
International Accounting Standards Board (together “IFRSs) as adopted by the
European Union (EU) and as applied in accordance with the provisions of the
Companies Act 2006. The Company financial statements have been also been
prepared in accordance with IFRSs.

              The
consolidated and Company financial statements have been prepared on an historic
cost basis.

              Inventories

              Inventories
are valued at the lower of cost and net realisable value. Cost incurred in
bringing each product to its present location and condition is accounted for as
follows:

              Finished
goods – purchase cost on a first-in, first-out basis.

              Net
realisable value is the estimated selling price in the ordinary course of
business.

3          Revenue

31 Mar

31 Mar

2017

2016

Group

Group

£000

£000

Sales of Stock

6,106

6,727

Commissions

12

15

Other income

2

6,120

6,742

All revenues are derived from a single operating segment

 

 

4          Profit Before Taxation

Profit before taxation is after charging/(crediting):

31 Mar

31 Mar

2017

2016

Group

Group

£000

£000

Depreciation of property, plant and equipment

27

31

Operating lease rentals

316

338

Foreign currency losses

3

1

Employee costs (note 5)

1,029

1,015

Fees payable to the Company’s auditor

27

28

5          Employee costs
including Directors

31 Mar

31 Mar

2017

2016

Group

Group

£000

£000

Wages

912

884

Social security costs

96

88

Pension costs

12

12

Other employee benefits

9

7

Compensation for loss of
office

24

1,029

1,015

All employee costs are included in administrative expenses.

6          Directors’
remuneration

31
Mar

31
Mar

2017

2016

Group

Group

£000

£000

Salaries and fees

234

266

Social security costs

17

18

Other employee benefits

5

3

256

287

Information regarding the highest
paid Director which comprises

 

salary and benefits as follows

75

73

7          Exceptional items
of expenditure

31 Mar

31 Mar

2017

2016

Group

Group

£000

£000

Compensation for loss of office for Philip Blackwell

24

24

 

 

8          Income tax

31 Mar

31 Mar

2017

2016

£000

£000

Current tax (credit)/expense

Current tax

Deferred tax

Impact of change in UK corporation tax rate

19

0

Origination and reversal of temporary differences

-19

3

Total tax expense

3

The charge for the year can be reconciled to the
profit/(loss) per the income statement as follows:

31 Mar

31 Mar

2017

2016

£000

£000

Profit/(loss) before tax

(224)

(3)

Applied corporation tax rates:

20%

20%

Tax at the UK corporation tax rate of 20%:

(45)

(1)

Expenses not deductible for tax purposes

3

1

Utilisation of previously unrecognised tax losses

35

Origination and reversal of temporary differences

7

3

Current tax charge

0

3

 

 

9          Profit (Loss) per
share

31 Mar

31 Mar

2017

2016

Group

Group

£000

£000

Profit/(loss) used in calculating basic and diluted
earning per share attributable to the owners of the parent

(224)

(6)

Profit from discontinued operation

(10)

(224)

(16)

Number of shares

Weighted average number of shares for the purpose of basic
and diluted earnings per share

13.6m

13.6m

Basic (loss)/earnings per share from continuing operations
(pence per share)

(1.66)

(0.05)

Basic (loss)/earnings per share from discontinued
operations (pence per share)

(0.07)

Total basic and diluted earnings per share – pence

(1.66)

(0.12)

All shares shown above are authorised, issued and fully paid
up. Ordinary shares carry the right to one vote per share at general meetings
of the Company and the rights to share in any distribution of profits or returns
of capital and to share in any residual assets available for distribution in
the event of a winding up.

 

 

10        Investment in subsidiaries

31 Mar

2017

Company

£000

At 7 January 2014

Nominal value of shares issued

28

Fair-value adjustment take to merger reserve

2,809

Deferred consideration

2,363

At 31 March 2014,  31 March 2015, 31 March 2016 and
31 March 2017

5,200

The investments in Group undertakings are recorded at cost
which is the fair-value of the consideration paid.

The principal subsidiaries of the Company, all of which
have been included in the consolidated financial information, are as follows:
Shapero Rare Books Ltd, Scholium Trading Ltd and Scholium (Titan) Ltd,
all of which are wholly owned

11        Deferred Corporation Tax

31 Mar

31 Mar

2017

2016

Group

Group

£000

£000

 

Balance at the beginning of the year

(277)

(280)

Income statement

3

Balance at the end of the year

(277)

(277)

The deferred tax asset comprises:

Origination and reversal of temporary differences

(277)

(277)

Deferred tax is calculated in full on
temporary differences under the liability method using the tax rates expected
for future periods of 19%. The deferred tax asset has arisen due to the
availability of trading losses The Group has unutilised tax allowances, at
expected tax rates in future periods, of £357,000 (2016: £352,000) of which £277,000
has been recognised (2016 £277,000 recognised).

12        Inventories

31 Mar

31 Mar

2017

2016

Group

Group

£000

£000

Finished goods

7,873

7,550

Finished goods expensed in the year

4,215

4,840

13        Trade & other receivables

31 Mar

31 Mar

31 Mar

31 Mar

2017

2016

2017

2016

Group

Group

Company

Company

£000

£000

£000

£000

Trade debtors

1,779

1,577

Other debtors

30

15

1

4

Amounts due from Group undertaking

0

0

6,509

6,306

Prepayments and accrued income

241

442

14

12

2,050

2,034

6,524

6,322

The age profile trade and other receivables comprise:

£000

Current

905

One month past due

256

Two months past due

35

Over three months past due

583

Provision for doubtful debts

1,779

 

 

14        Share Capital

Number of shares

31 Mar

31 Mar

2017

2016

Group and Company

Group and Company

Ordinary shares of £0.01 each

Number

Number

 

At the end of the year

13,600,000

13,600,000

TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARES

TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARESi

1. Identity of the issuer or the underlying issuer
of existing shares to which voting rights are
attached:
ii

Scholium Group plc

2 Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights

X

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached

An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments

An event changing the breakdown of voting rights

Other (please specify):

3. Full name of person(s) subject to the
notification obligation:
iii

Peter Gyllenhammar

4. Full name of shareholder(s)
(if different from 3.):iv

The Union Discount Company of London Ltd

Peter Gyllenhammar AB

5. Date of the transaction and date on
which the threshold is crossed or
reached:
v

16/05/2017

6. Date on which issuer notified:

7. Threshold(s) that is/are crossed or
reached:
vi, vii

From 1% to 5%



8. Notified details:

A: Voting rights attached to shares viii, ix

Class/type of
shares


if possible using
the ISIN CODE

Situation previous
to the triggering
transaction

Resulting situation after the triggering transaction

Number
of
Shares

Number
of
Voting
Rights

Number
of shares

Number of voting
rights

% of  voting rights x

Direct

Direct xi

Indirect xii

Direct

Indirect

Ordinary Shares GB00BJYS2173

 

210,867

 

 

210,867

 

741,336

741,336

5.45%

B: Qualifying Financial Instruments

Resulting situation after the triggering transaction

Type of financial
instrument

Expiration
date
xiii

Exercise/
Conversion Period
xiv

Number of voting
rights that may be
acquired if the
instrument is
exercised/ converted.

% of voting
rights

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi

Resulting situation after the triggering transaction

Type of financial
instrument

Exercise price

Expiration date xvii

Exercise/
Conversion period
xviii

Number of voting rights instrument refers to

 

% of voting rights xix, xx

 

 

 

Nominal

Delta

Total (A+B+C)

Number of voting rights

Percentage of voting rights

741,336

5.45%



9. Chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held, if applicable:
xxi

 

Peter Gyllenhammar is the 100% owner of the following companies owning the shares in Scholium Group plc:

 

The Union Discount Company of London Ltd 

Peter Gyllenhammar AB                                                                     

 

Proxy Voting:

10. Name of the proxy holder:

N/A

11. Number of voting rights proxy holder will cease
to hold:

N/A

12. Date on which proxy holder will cease to hold
voting rights:

N/A


13. Additional information:

14. Contact name:

Peter Gyllenhammar

15. Contact telephone number:

0046 708 185244

NOTIFICATION OF MAJOR INTEREST IN SHARES

TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARESi

1. Identity of the issuer or the underlying issuer
of existing shares to which voting rights are
attached:
ii

SCHOLIUM GROUP PLC

2 Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights

X

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached

An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments

An event changing the breakdown of voting rights

Other (please specify):

3. Full name of person(s) subject to the
notification obligation:
iii

City Asset Management Plc

4. Full name of shareholder(s)
(if different from 3.):iv

CAM Nominees Ltd

5. Date of the transaction and date on
which the threshold is crossed or
reached:
v

16/05/2017

6. Date on which issuer notified:

16/05/2017

7. Threshold(s) that is/are crossed or
reached:
vi, vii

3%



8. Notified details:

A: Voting rights attached to shares viii, ix

Class/type of
shares


if possible using
the ISIN CODE

Situation previous
to the triggering
transaction

Resulting situation after the triggering transaction

Number
of
Shares

Number
of
Voting
Rights

Number
of shares

Number of voting
rights

% of  voting rights x

Direct

Direct xi

Indirect xii

Direct

Indirect

530,469

530,469

0

0

GB00BJYS2173

B: Qualifying Financial Instruments

Resulting situation after the triggering transaction

Type of financial
instrument

Expiration
date
xiii

Exercise/
Conversion Period
xiv

Number of voting
rights that may be
acquired if the
instrument is
exercised/ converted.

% of voting
rights

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi

Resulting situation after the triggering transaction

Type of financial
instrument

Exercise price

Expiration date xvii

Exercise/
Conversion period
xviii

Number of voting rights instrument refers to

 

% of voting rights xix, xx

 

 

 

Nominal

Delta

Total (A+B+C)

Number of voting rights

Percentage of voting rights

0

0



9. Chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held, if applicable:
xxi

 

 

Proxy Voting:

10. Name of the proxy holder:

CAM Nominees Ltd

11. Number of voting rights proxy holder will cease to hold:

530,469

12. Date on which proxy holder will cease to hold voting rights:

18/05/2017


13. Additional information:

14. Contact name:

Damien McConnell

15. Contact telephone number:

0207 324 2933

Trading Update & Management Changes

Scholium Group plc

Trading Update & Management Changes

5 April 2017

The board of Scholium Group plc (the “Group”) provides an update on trading for the twelve months to 31 March 2017 and announces a change in the Board of Directors.

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

Trading Update

There has been a demonstrable improvement in the trading of the Group in the second half year compared with the first half, with sales having increased by over 80%, albeit at a lower margin. This is in part due to a strong performance by Scholium Trading where we have seen success in the sale of some major items. Sales of antiquarian books and works on paper stabilised in the second half and are currently on an improving trend. This improvement in trading is expected to result in approximately breakeven for the Group in the second half of the financial year.

At the time of the interim announcement in November 2016, it was stated that annualised cost savings of £320,000 had been identified before new initiatives. These have now been implemented and the benefit of these savings, both at Group and subsidiary level, will be seen in the new financial year commencing 1 April 2017.

Separately, we are delighted that Shapero Rare Books has joined the Antiquarian Booksellers’ Association. The benefit is that the books and works on paper team will exhibit at several important new international book fairs which provide valuable access to this specialist market.

Board and other changes

On 4 April 2017 Mr Simon Southwood, Finance Director of the Group, notified the Board of his intention to stand down as a Director. He will continue to have responsibility for the preparation of the financial statements for the year ended 31 March 2017, seeing them to the end of the audit process and ensuring a smooth handover to his successor. The Board is grateful for his considerable assistance in recent years and wish him well in his new ventures.

Mr Peter Floyd (60) has agreed to join the Board of Scholium Group Plc as part-time Finance Director upon Mr. Southwood’s departure. He was formerly a Partner in the London Office of Price Waterhouse, Chief Financial Officer of the Fine Art Auction Group from 2002 to 2012 and Finance Director of Noble Investments (UK) Plc from 2012 to 2014. We look forward to welcoming him to the Board.

In addition, we are excited to announce that Mr Roddy Newlands, formerly Managing Director of Bloomsbury Auctions, has agreed to join the team at Shapero Rare Books as Head of English Literature where he will assist in the growth of new sales, cataloguing of items and ecommerce. Roddy’s specialism is in modern and first editions which currently represents a very significant and popular section of the market.

Rule 17 Disclosure

Peter John Laurence Floyd is or has been a director of the following companies in the last 5 years:

Company Name

Status

Noble Investments (UK) Limited

Past Director

The Fine Art Auction Group Limited

Past Director

Greenfield Auctions Limited

Past Director

Broadwell Associates Limited

Current Director

London Investment Property Syndicate Limited

Current Director

Solutionplanet Limited

Current Director

Timberfield Limited

Current Director

Bid For Wine (Uk) Limited

Past Director

Saltmark Limited

Past Director

Salehurst Trading Company Limited

Past Director

Baynton Road Limited

Past Director

Dnfa Auctions Limited

Past Director

The Fine Art Auction Group Limited

Past Director

Bloomsbury Auctions Clients Limited

Past Director

Dreweatts 1759 Limited

Past Director

Edgar Horns Limited

Past Director

Dnfa Limited

Past Director

Mallett At Bourdon House Limited

Past Director

Mallett & Son (Antiques) Limited

Past Director

Mallett Limited

Past Director

H.J.Hatfield & Sons Limited

Past Director

Mallett Overseas Limited

Past Director

Ely House Gallery Limited

Past Director

BCFLT Limited

Past Director

Peter Floyd was a director of BCFLT Limited which was dissolved via voluntary strike-off on 28 March 2017; all creditors were met in full. He was also a director of The Car Group plc which entered into liquidation on 12 November 2002 at which time approximately £23 million of debts were not met.

There are no other disclosures required in respect of Schedule 2 paragraph (g).

For further information, please contact

Scholium Group plc

Jasper Allen, Chairman

Simon Southwood, Chief Financial Officer

+44 (0)20 7493 0876

WH Ireland Ltd – Nominated Adviser

Chris Fielding/Nick Prowting

+44 (0)20 7220 1666

Interim Report & Financial Statements

Scholium Group plc

Interim Report & Financial Statements

30 November 2016

 

The directors of Scholium Group plc ("Scholium",
the "Company" or, together with its subsidiaries, the
"Group") present their report and financial statements for the Group
for the six months ended 30 September 2016.

During the period under review, the business suffered from a
slowdown in material discretionary purchases by customers in the three months surrounding
the UK referendum on EU membership.  This slowdown caused sales in May, June
and July to be poor, but in August and September there was renewed interest in
stock, particularly from non-Sterling buyers.   In addition, weaker
Sterling has made it more attractive to sell some items by auction in the USA. Numerous
items, both valuable and less valuable, have been placed into carefully
selected auctions, which should benefit the results, and cash, for the second
half of the financial year.

The pick-up in sales has continued since 30 September.
Nevertheless the board is taking action to reduce both the size of its operating
costs and stock of rare books.  Annualised savings of approximately £320,000
have been identified and are in the process of being implemented. Furthermore,
an orderly but accelerated process to realise a segment of book and print stock
has commenced.

Financial Summary

Six months ended September
(all figures £’000)

 2,016

 2,015

Change

Revenue

 2,127

 3,320

-36%

Gross Profit

 903

 1,107

-18%

Gross Margin

42%

33%

9%

Pre-Tax (Loss) / Profit

 (239)

 6

n/a

Cash

 1,154

 1,619

-29%

Net Asset Value

 9,908

 10,159

-2%

NAV/Share

 72.8p

 74.7p

 

 

Jasper Allen, Chairman of Scholium, noted “We are
disappointed to have incurred a loss of £239,000 in the first half of the year,
particularly due to concerns over the referendum period, but we are encouraged
that sales are showing signs of improvement.  The cost savings we are
implementing as well as the stock optimisation programme will deliver a leaner,
more effective business for shareholders.

“We remain encouraged by the improved level of sales since
August and are focussing our efforts on delivering the best result possible for
the full year.”

For
further information, please contact:

Scholium Group plc

Jasper Allen, Chairman

Simon Southwood, Chief Financial Officer

+44 (0)20 7493 0876

WH Ireland Ltd – Nominated Adviser

Chris Fielding/Nick Prowting

+44 (020) 7220 1666

Business Review

Scholium Group companies are involved
primarily in the trading and retailing of antiquarian books and other works on
paper, as well as dealing in rare and collectible items in the wider art
market.

The group of businesses comprises:

                    
Shapero Rare Books, a dealer in rare and
antiquarian books and works on paper, located in Mayfair, London; and

                    
Scholium Trading, a company set up to trade in
conjunction with other dealers in high value rare and collectible items.

Revenue Streams

The Group earns revenue from:

                    
the sale of rare books and works on paper
through Shapero Rare Books; and

                    
the sale of other rare and collectible items
through Scholium Trading.

Key objectives and key performance indicators (KPIs)

The Group’s strategy is to:

                    
Increase the profitable trade of Shapero Rare
Books;

                    
optimise the level of antiquarian stock whilst
maintaining the trade of Shapero Rare Books; and

                    
continue to develop Scholium Trading by trading
alongside other dealers in high value rare and collectible items and by
participating in the acquisition for onward sale of large consignments.

The Directors intend, in due course, to
provide an attractive level of dividends to shareholders along with stable
asset-backed growth driven by the markets in which the Group operates.

Our current principal KPIs are:

                    
gross margin, EBITDA, earnings per share;

                    
the breadth and distribution of the stock of rare
books held by the Group;

                    
stock turnover; and

                    
various key risk indicators including capital
resources, portfolio allocation and cash.

Performance Review

Overall Performance

The Group struggled in the first quarter of the current financial
year.  Whilst its core business slowed, there was a perception that
customers were delaying material acquisitions around the period of the UK
referendum on EU membership.  After the referendum, the business broadly
performed to expectations.

This weakness materially affected performance for the 6
months under review as a whole.  Turnover decreased by 36% compared to the
same period in the prior year.  However, as announced on 13 October, the
business has been successful in increasing its margins, with the result that
Gross Profit decreased by only 18% to £903k (2015: £1,107k).  

Costs increased by 6% compared to the prior year to £1,142k
(2015: £1,077k).  The increase is largely due to increased spend on
marketing, reflecting a desire at the end of March 2016 to support growth of
the rare books business.  This is also reflected in the change in stock
value year-on-year; stock increased 6% to £7,879k (2015: £7,420k). 

The Group result for the six months was a loss before tax of
£239k (2015: profit of £30k).

Summary Group Financials

Six months ended September
(all figures £’000)

 2,016

 2,015

Change

Revenue

 2,127

 3,320

-36%

Gross Profit

903

 1,107

-18%

Gross Margin

42%

33%

9%

Direct Costs

 (141)

 (116)

22%

Administrative Expenses

 (1,007)

 (961)

4%

Pre-Tax (Loss) / Profit

 (239)

 30

n/a

Stock

 7,879

 7,420

6%

Cash

 1,154

 1,619

-29%

Net Asset Value

9,908

 10,159

-2%

NAV/Share

 72.8
p

 74.7p

 

Financial Position & Cashflow

The Group retains a strong balance sheet.  Net assets
of £9,908k (2015: £10,159k) are supported by £7,879k of Stock (2015: £7,420k)
and £1,154k of cash (2015: £1,619k).  This equates to 72.8p of net assets
per share (2015: 74.7p).

Group Strategy

Your board has recognised that the performance of the
business does not justify its relatively high fixed cost base; and that
applying capital to grow the asset base of the book dealership has not
delivered the expected return on capital.  As such, we are taking steps to
reduce the cost base — approximately £320,000 of annualised savings have been
identified across the business and are in the process of being implemented.
Furthermore, an orderly but accelerated process to realise a segment of book
and print stock has been commenced.

Shapero Rare Books & Shapero Modern

The Shapero brand trades out of the St. George Street
premises.  It includes Shapero Rare Books and Shapero Modern.  The
bulk of the trade, through Shapero Rare Books, is in rare and antiquarian books
and works on paper.  Shapero Modern is a newer brand which was set up in
2014 to participate in the increasingly large international trade in modern and
contemporary prints.

At 30 September, the Group had allocated capital of £8,085k
(2015: £7,238k) to the Shapero brand.  Of this, approximately £425k is
attributable to Shapero Modern. 

In the first six months of the year performance from the
Shapero brand suffered primarily in the run-up to the UK referendum on EU
membership.  Turnover fell by 32% as compared to the prior-year period to
£1,929k (2015: 2,856k) albeit partly offset by an enhanced gross margin of 41%
(2015: 33%).  The loss incurred by this division for the first six months
of the financial year was £186k (2015: profit of £38k).

Summary Performance, Shapero

Six months ended September (all
figures £’000)

2016

2015

Change

Revenue

1,929

 2,856

-32%

Gross Profit

 788

 951

-17%

Gross Margin

41%

33%

8%

Pre-Tax (Loss) / Profit

 (186)

 38

n/a

 

Approximately £280,000 of annualised savings have been
identified in this business which, the board believes, can be implemented
without a material reduction in operating profitability.  Some of these
costs are contractual and will take time to be implemented whilst others are
purely discretionary and have been executed in each case at negligible cost. 

The Shapero Modern brand is currently under review. Whilst
it provides a valuable gross profit contribution to the business, it is
expensive to operate and occupies valuable prime West End floorspace.

Scholium Trading

Scholium Trading was set up to trade alongside third party
dealers in rare and collectible items.  It typically trades in
larger-value items and shows a lumpier, but higher margin revenue stream. Scholium
Trading had approximately £975k of capital allocated to it as at 30 September
2016 (2015: £1,035k).  We do not allocate any costs to the business, but its
capital makes a material contribution to the overall profitability of the
business.

Whilst the lumpy nature of revenue resulted in first half
sales of £197k (2015: £463k), a higher gross margin of 58% (2015: 33%) was
achieved. This meant that the decrease in Gross Profit was limited to 26%,
equivalent to £114k (2015: £155k).

Summary Performance, Scholium Trading

Six months ended September
(all figures £’000)

2016

2015

Change

Revenue

 197

 463

-57%

Gross Profit

 114

 155

-26%

Gross Margin

58%

33%

25%

Pre-Tax Profit

 103

 141

-27%

 

Central Costs

The Central Costs of the business include all board
directors (no costs are allocated to subsidiaries) and the various incremental
costs associated with the AIM listing.  In the six months ended 30
September 2016 these costs fell by 10% to £157k (2015: £174k) as compared to
the prior year.  More than £40,000 (part of the £320,000 from above) of
annualised cost savings has been identified, and is being implemented.

Summary Performance, Central Costs

Six months ended September
(all figures £’000)

2016

2015

Change

Pre-Tax (Loss)

 (157)

 (174)

-10%

 

Outlook

We are pleased that the improved trading first noted in
August continues. We are confident that rationalising the Shapero brands and
converting many of the fixed costs to variable costs will deliver a business
which can be more reliable when trading through adverse conditions and will be
better aligned with the interests of shareholders. It remains, at this stage,
too early to assess whether the outcome for the full year will meet market
expectations.

Key Risks

Like all businesses, the Group faces risks
and uncertainties that could impact on the Group’s strategy. The Board
recognizes that the nature and scope of these risks can change and regularly
reviews the risks faced by the Group and the systems and processes to mitigate
such risks.

The principal risks and uncertainties
affecting the continuing business activities of the Group were
outlined in detail in the Strategic Report section of the annual report
covering the full year ended 31 March 2016.

In preparing this interim report for the
six months ended 30 September 2016, the Board has reviewed these risks and
uncertainties and considers that there have been no changes since the
publication of the 2016 Annual Report.

 



 

Independent Review Report to Scholium Group plc

Introduction

We have been engaged by the
company to review the condensed set of financial statements in the interim
report for the six months ended 30th September 2016 which comprises the
condensed consolidated statement of comprehensive income, the consolidated
statement of changes in equity, the condensed consolidated statement of
financial position and the consolidated statement of cash flows and the related
explanatory notes.  We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of financial
statements.

This report is made solely to the
company in accordance with the terms of our engagement.  Our review has
been undertaken so that we might state to the company those matters we are
required to state to it in this report and for no other purpose.  To the
fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company for our review work, for this report, or for the
conclusions we have reached.

Directors’ Responsibilities

The interim report is the
responsibility of, and has been approved by, the directors.  The directors
are responsible for preparing the interim report in accordance with the AIM
rules.

As disclosed in note 2, the
annual financial statements of the Group are prepared in accordance with IRFSs
as adopted by the EU.  The condensed set of financial statements included
in this interim report has been prepared in accordance with the recognition and
measurement requirements of IFRSs as adopted by the EU.

Our Responsibility

Our responsibility is to express
to the company a conclusion on the condensed set of financial statements in the
interim report based on our review.

Scope of Review

We conducted our review in
accordance with International Standard on Review Engagements (UK and Ireland)
2410 Review of Interim Financial Information Performed by the Independent
Auditor of the Entity
issued by the Auditing Practices Board for use in the
UK.  A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures.  A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit.  Accordingly, we do not
express an audit opinion.

Conclusion

Based on our review, nothing has
come to our attention that causes us to believe that the condensed set of
financial statements in the interim report for the six months ended 30th
September 2016 is not prepared, in all material respects, in accordance with
the recognition and measurement requirements of IFRSs as adopted by the EU and
the AIM rules.

A K Bahl BA FCA

For and on behalf of

Wenn Townsend Chartered Accountants

Oxford, United Kingdom

 

29 November 2016

Consolidated statement of total
comprehensive income (unaudited)

 

Six-month
Period Ended (Unaudited)

Six-month
Period Ended (Unaudited)

Year
Ended (Audited)

30 Sept

30 Sept

31 Mar

2016

2015

2016

Note

£000

£000

£000

Revenue

3

2,127

3,320

6,742

Cost of Sales

(1,224)

(2,213)

(4,366)

Gross profit

903

1,107

2,376

Distribution costs

(141)

(116)

(345)

Administrative expenses

(1,001)

(961)

(2,007)

Exceptional items:

Loss of office

(24)

(24)

Total administrative expenses

(1,001)

(985)

(2,031)

Profit/(Loss) from operations

 

 

 

 

(239)

6

Exceptional Items

24

24

Adjusted Operating Profit

 

 

 

 

(239)

30

24

Profit/(Loss) from operations

(239)

6

Financial income

1

2

Financial expenses

(1)

(5)

Profit/(loss) before taxation

(239)

6

(3)

Income tax credit/(expense)

4

(3)

Profit/(Loss) for the period from
continuing operations

(239)

6

(6)

Discontinued operations

Profit for the period from discontinued
operations

Profit/(loss) on sale of discontinued
operations

(10)

(10)

Profit/(Loss) for the period and
total comprehensive income attributable to equity holders of the parent
company

(239)

(4)

(16)

Basic and diluted profit/(loss) per
share:

From continued operations – pence

5

(1.75)

0.04

(0.05)

From discontinued operations – pence

(0.07)

(0.07)

Total Diluted (loss)/profit per
share – pence

(1.75)

(0.03)

(0.12)



Consolidated statement of
financial position

 

 

30 Sept

30 Sept

31 Mar

2016

2015

2016

Note

£000

£000

£000

 

 

 

 

 

Unaudited

Unaudited

Audited

Assets

Non-current assets

Property, plant and equipment

67

79

92

Deferred corporation tax asset

277

280

277

344

359

369

Current assets

Inventories

7,879

7,420

7,550

Trade and other receivables

6

1,323

1,890

2,034

Cash and cash equivalents

1,154

1,619

1,309

10,356

10,929

10,893

Total assets

10,700

11,288

11,262

Current liabilities

Trade and other payables

7

792

1,129

1,115

Loans and borrowings

Current corporation tax liabilities

Total current liabilities

792

1,129

1,115

Total liabilities

792

1,129

1,115

Net assets

9,908

10,159

10,147

Equity and liabilities

Equity attributable to owners of the
parent

Ordinary shares

136

136

136

Share Premium

9,516

9,516

9,516

Merger reserve

82

82

82

Retained earnings

174

425

413

Total equity

9,908

10,159

10,147

 

 

 

 

 

 

 

 

Net Asset Value per Share

 

 

 

 

72.8p

74.7p

74.6p

 

 

These interim
financial statements were approved by the Board of Directors on 29 November
2016 and signed on its behalf by Simon Southwood.



Statement of changes in equity

Share

Share

Merger

Retained

Total

Capital

Premium

reserve

earnings

equity

£000

£000

£000

£000

£000

Balance at 1 Apr 2014

132

9,458

82

1,109

10,781

Loss for the year from continued and
discontinued operations

(188)

(188)

Total comprehensive income for the
period

(188)

(188)

Shares issued in the period

4

58

62

Share-based payments

19

19

Dividends paid

(136)

(136)

Total contributions by owners of the
parent

4

58

(117)

(55)

Balance at 30 Sept 2014

136

9,516

82

804

10,538

Loss for the year from continued and
discontinued operations

(375)

(375)

Total comprehensive income for the
period

(375)

(375)

Balance at 31 March 2015

136

9,516

82

429

10,163

Loss for the year from continued and
discontinued operations

(4)

(4)

Total comprehensive income for the
period

(4)

(4)

Balance at 30 Sept 2015

136

9,516

82

425

10,159

Loss for the year from continued and
discontinued operations

(12)

(12)

Total comprehensive income for the
period

(12)

(12)

Balance at 31 March 2016

136

9,516

82

413

10,147

Loss for the year from continued and
discontinued operations

(239)

(239)

Total comprehensive income for the
period

(239)

(239)

Balance at 30 Sept 2016

136

9,516

82

174

9,908



 

Consolidated statements of
cashflows

 

30 Sept

30 Sept

31 Mar

2016

2015

2016

£000

£000

£000

Cash flows from operating activities

(Loss)/profit before tax

(239)

(4)

(16)

Depreciation of property, plant and
equipment

13

15

31

Reclassification of property, plant and
equipment

19

Profit/(loss) on disposal of
discontinued operation

18

(8)

(207)

29

7

Decrease/(increase) in inventories

(329)

51

(79)

Decrease/(increase) in trade and other
receivables

730

(196)

(337)

Increase/(decrease) in trade and other
payables

(343)

(505)

(514)

Net cash generated from operating
activities

(149)

(621)

(923)

Cash flows from investing activities

Purchase of property, plant and
equipment

(6)

(2)

(31)

Disposal of discontinued operation

120

146

Net cash used in investing
activities

(6)

118

115

Cash flows from financing activities

Interest paid

(5)

Net cash (used)/generated from
financing activities

(5)

Net increase/(decrease) in cash and
cash equivalents

(155)

(503)

(813)

Cash and cash equivalents at the
beginning of the year

1,309

2,122

2,122

Cash and cash equivalents at the end
of the year

1,154

1,619

1,309

 

 

 



<

div class=WordSection5>

Notes

 

1.    
General
information   

Scholium Group plc and its subsidiaries
(together ‘the Group’) are engaged in the trading and retailing of rare and
antiquarian books and works on paper primarily in the United Kingdom. The
Company is a public company domiciled and incorporated in England and Wales
(registered number 08833975).The address of its registered office is 32 St
George Street, London W1S 2EA.   

 

2.    
Basis of
preparation    

These condensed interim financial statements
of the Group for the six months ended 30 September 2016 (the ‘Period’) have
been prepared using accounting policies consistent with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The same
accounting policies, presentation and methods of computation are followed in
the condensed set of financial statements as applied in the Group’s latest
audited financial statements for the year ended 31 March 2016. Amendments made
to IFRSs since 31 March 2016 have not had a material effect on the Group’s
results or financial position for the six-month period ended 30 September 2016.
While the financial figures included within this half-yearly report have been
computed in accordance with IFRSs applicable to interim periods, this
half-yearly report does not contain sufficient information to constitute an interim
financial report as set out in International Accounting Standard 34 Interim Financial
Reporting. These condensed interim financial statements have not been audited, do
not include all of the information required for full annual financial statements,
and should be read in conjunction with the Group’s consolidated annual financial
statements for the year ended 31 March 2016.The auditors’ opinion on these
Statutory Accounts was unqualified, did not draw attention to any matters by
way of emphasis and did not contain a statement under s498 (2) or s498 (3) of
the Companies Act 2006.

 

3.    
Revenue

 

30 Sept

30 Sept

31 Mar

2016

2015

2016

Group

Group

Group

£000

£000

£000

Book Sales

2,126

3,309

6,727

Commissions

1

11

15

Other income

2,127

3,320

6,742

 

 

4.    
Income Tax

 

30 Sept

30 Sept

31 Mar

2016

2015

2016

£000

£000

£000

Current tax (credit)/expense

 

Current tax

Deferred tax

Origination and reversal of temporary
differences

3

Total tax expense

3

The charge for
the year can be reconciled

 

to the
profit/(loss) per the income statement as

 

follows:

 

30 Sept

30 Sept

31 Mar

2016

2015

2016

£000

£000

£000

 

Profit/(loss) before tax

(239)

(4)

(3)

 

Applied corporation tax rates:

0

0

0

 

Tax at the UK corporation tax rate of
20%:

(48)

0

(1)

 

Expenses not
deductible for tax purposes

1

Non-provided
deferred tax

48

Origination and reversal of temporary
differences

3

Current tax charge

0

0

3

 

 

5.    
Earnings/(Loss) per
Share

 

30 Sept

30 Sept

31 Mar

2016

2015

2016

Group

Group

Group

£000

£000

£000

Profit/(loss) used in calculating basic
and diluted earning

per share attributable to the owners of
the parent

(239)

6

(6)

Profit/(loss) from discontinued
operations

(10)

(10)

(239)

(4)

(16)

Number of shares

‘Weighted average number of shares for
the purpose

of basic and diluted earnings per share

13,600,000

13,600,000

13,600,000

Basic (loss)/earnings per share from
continuing

 operations (pence per share)

(1.75)

0.04

(0.05)

‘Basic (loss)/earnings per share from
discontinued

 operations (pence per share)

(0.07)

(0.07)

Total basic and diluted earnings per
share – pence

(1.75)

(0.03)

(0.12)

 

 

Basic earnings per share
amounts are calculated by dividing net (loss)/profit for the year or period
attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the year.

 

The Company has 704,000
potentially issuable shares all of which relate to share options issued in the
year ended 31 March 2015 all of which have a strike price of 100p per
share.  As a consequence, the number of basic and fully diluted shares in
issue are equal.

 

No new shares were issued
during the period, and the Company had 13.6 million shares in issue at the end
of the period.

 

6.    
Trade and Other Receivables

 

30 Sept

30 Sept

31 Mar

2016

2015

2016

Group

Group

Group

£000

£000

£000

Trade debtors

912

1,551

1,577

Other debtors

39

28

15

Prepayments and accrued income

372

311

442

1,323

1,890

2,034

 

 

7.    
Trade and Other Payables

 

30 Sept

30 Sept

31 Mar

2016

2015

2016

Group

Group

Group

£000

£000

£000

Trade creditors

371

754

526

Other taxes and social security

32

33

31

Accruals and deferred income

204

184

460

Other creditors

185

158

98

792

1,129

1,115