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