Hyve Group plc
Annual Report and Accounts 2022
Strategic report
01
Company overview
04
Our strategy
09
Chief Executive Officer’s statement
13
Chair’s statement
15
Business model
19
Our people and values
22
Environmental, social and governance strategy
32
Non-financial information
33
Chief Finance and Operations Officer’s
statement
44
Divisional trading summary
50
Principal risks and uncertainties
59
Key performance indicators
62
Section 172(1) statement
69
Going concern and viability statement
Governance
73
Governance at a glance
75
Board of Directors
77
Corporate governance report
82
Directors’ report
85
Audit Committee report
90
Risk Committee report
92
Nomination Committee report
94
Environmental, Social and Governance
Committee report
96
Remuneration Committee Chair’s statement
99
Directors’ remuneration report
128
Directors’ responsibilities statement
Financial statements
130
Independent auditor’s report
139
Consolidated income statement
140
Consolidated statement of
comprehensive income
141
Consolidated statement of changes in equity
142
Consolidated statement of financial position
144
Consolidated cash flow statement
146
Notes to the consolidated accounts
199
Company statement of financial position
200
Company statement of changes in equity
201
Notes to the Company accounts
209
Glossary
213
Shareholder information
214
Directors, advisers and other information
Contents
2022 has proven to be a landmark year for Hyve,
resulting in a fundamentally transformed business
with exciting growth prospects.
Company overview
We are Hyve
When people come together,
powerful things happen. Hyve
Group plc is the next-generation
events business powering global
industry communities and
creating platforms for progress.
We connect whole industry ecosystems
through our unmissable in-person events,
online platforms and hyper-productive
meeting programmes. By uniting vibrant
industry communities through our
omnichannel platforms, we aspire to
shape the future for our industries.
29 in-person
events
in FY22
14 tech-
enabled
programmes
in FY22
Strategic report
Governance
Financial statements
1
Annual Report and Accounts 2022
Hyve Group plc
Revenue
(£m)
Adjusted net debt
(£m)
Headline profit/(loss) before tax
(£m)
(Loss)/profit before tax
(£m)
Like-for-like revenue growth
(%)
Headline diluted earnings per share
(p)
* All numbers reflect continuing operations.
2022 Group
performance
Performance
by division
122.5
2022
21.8
2021
73.6
2020
121.5
2019
62.7
2018
71.0
2022
79.9
2021
67.6
2020
111.7
2019
82.7
2018
11.5
2022
13.9
2021
2020
(11.8)
15.3
2019
2018
(0.4)
2018
(4.4)
(31.0) 2022
(27.5) 2021
2020
(308.7)
(26.4) 2019
48
2022
(37)
2021
(11)
2020
7
2019
11
2018
4.2
2022
4.9
2021
2020
(7.5)
3.9
2019
2018
(5.0)
Company overview
continued
2
Hyve Group plc
Annual Report and Accounts 2022
The shape of Hyve’s business has completely transformed,
with almost 95% of events now taking place in advanced
economies, compared with just 12% in 2017. We now principally
report our performance by sector, rather than geography,
reflecting the evolution of our strategy towards a focus on
digital-ready and growing sectors.
2022 Group
performance
Performance
by division
Asia
5%
EdTech & Natural Resources
26%
Retail, Manufacturing
& Engineering
32%
RetailTech & FinTech
37%
£32.7m
2021: £1.0m
£45.0m
2021: £6.7m
£39.0m
2021: £10.1m
£5.8m
2021: £4.1m
Strategic report
Governance
Financial statements
3
Annual Report and Accounts 2022
Hyve Group plc
Our strategy
The
start of
a new era
Compared with five years ago,
Hyve is unrecognisable.
Hyve’s transformation began in
2017, with the return of one of our
founders, Mark Shashoua, as
CEO. He then spearheaded the
ambitious Transformation and
Growth (TAG) programme.
Shape shifting
Following the conclusion of the
TAG programme in 2019, Hyve’s
transformation has accelerated.
Asia
5%
RetailTech & FinTech
37%
Retail, Manufacturing
& Engineering
32%
EdTech &
Natural Resources
26%
Asia
16%
Brands
Russia
47%
Central Asia
14%
Eastern &
Southern
Europe
11%
Further significant disposals, including
the Central Asian, Russian, Ukrainian and
Turkish portfolios, have led to a swing
from a majority emerging markets focus
to almost 95% of Hyve’s events being
rooted in advanced economies. As such,
Hyve no longer classifies its events by
region, but by sector.
2017 by geography
2022 by sector
1
Creating a scalable platform
This saw the implementation of a
centralised operating model, creating
consistency right across the global
business and instilling a best-practice
ethos throughout every team and event
– a vast departure from the Group’s
previous model, which was disconnected
and siloed. With all events using the
same systems, processes and policies,
Hyve was able to ensure best practice
across all events while driving industry-
leading like-for-like organic growth.
2
Managing the portfolio
In order to focus on global, market-
leading events with high growth potential
which would benefit from our centralised
operating model, Hyve needed to sell
or close the majority of its smaller,
regionally focused events. Over the
course of the TAG programme, the
number of events reduced from 269 to
130, with the average revenue per event
more than trebling. That transformation
has continued to today, with the Group
now holding just 33 in-person events,
but achieving a more than eight-fold
increase in average revenue.
3
Product-led acquisitions
Crucial to the strategy was making
product-led acquisitions to strengthen
Hyve’s portfolio. These acquisitions
greatly contributed to the increase in
average revenue and included events
such as Spring Fair, Bett and Mining
Indaba. Since the end of the TAG
programme, Hyve has continued to
acquire cutting-edge products, including
Shoptalk, Retail Meetup and 121 Group.
A fundamentally
different business
Mark’s take on our
transformation
How we are
maximising growth
Digital
diversification
12%
Hyve Group plc
Annual Report and Accounts 2022
4
Q&A with Mark
Shashoua, Chief
Executive Officer
What does the
transformation mean
to Hyve?
The transformation we have undergone
in recent years has seen Hyve flourish as
a leading business with enormous
opportunity for future growth. Our
continued commitment to transformation
and evolution allows us to remain at the
forefront of our industry.
Importantly, the changes we made
during the TAG programme, namely our
ever-increasing focus on market leading
events and our centralised operating
model, are what have allowed us to
not only survive COVID-19, but bounce
back stronger.
Why did you succeed?
A huge part of our success is down to our
people. I am enormously grateful to our
colleagues around the world for always
being open to change and embracing
transformation. We couldn’t have done
it without them.
What are investors buying
into now?
The Hyve of today is unrecognisable
compared with the Hyve of five years
ago. We used to be best known for our
presence in emerging markets because
that is how this business was founded in
1991. But emerging markets now make
up only around 5% of our portfolio, and
we now operate in sectors that previously
didn’t feature in our portfolio.
As such, it has become increasingly
difficult for us in recent years to make
year-on-year comparisons, because we
are a fundamentally changed business.
Therefore, looking ahead, we are
drawing a line under our past and
reporting on the business in new ways,
focusing less on drawing comparisons
with years gone by.
Will Hyve continue
to change?
I believe evolution and transformation
should be constant and that this is how
we will continue to offer unrivalled return
on investment to our customers. We have
ambitious plans for our future which will
rely on change and Hyve’s signature
pioneering spirit.
A fundamentally
different business
Mark’s take on our
transformation
How we are
maximising growth
Digital
diversification
5
Annual Report and Accounts 2022
Hyve Group plc
Strategic report
Governance
Financial statements
A fundamentally
different business
Mark’s take on our
transformation
How we are
maximising growth
Digital
diversification
Focusing on market-
leading brands
Our portfolio today of 33 in-person
events and 23 tech-enabled products
now consists solely of market leading
brands. Since COVID-19, we have seen
an increase in like-for-like customer
spend of 14.2% (2021: +14.7%) across the
portfolio, demonstrating the continued
increase in demand for our products.
As such, we plan to double down on
our focus on those events and prioritise
organic growth.
Launching new events and
geo-clones
This year we saw the launch of several
new products, which were either
geo-clones or extensions of our
existing market-leading brands.
Our strategy
continued
In answer to demands for
an event focused on higher
education, Ahead by Bett
launched in March 2022 alongside
the main Bett event in London.
The inaugural edition welcomed
more than 4,000 visitors from
over 80 countries. This amazing
event exists to provide a place for
the higher education community
to congregate and tackle
the plethora of business and
pedagogical challenges faced
by the sector.
Hyve will prioritise the organic growth of
these events throughout FY23, alongside
further new launches and geo-clones.
Hyve’s first sustainability-focused
event was launched alongside
Africa Oil Week just after the
financial year end in October.
The event saw over 1,000
delegates including global
decision-makers and C-suite-level
players, 67 countries represented,
50+ ministers and government
officials and 400 companies in
attendance. Green Energy Africa
Summit is the global platform for
driving deals and investment into
energy projects. It looks to provide
energy access and solutions
for the African continent and,
ultimately, to shape the future
of Africa.
The successful European geo-
clone of world-leading event
Shoptalk was a resounding
success, bringing together more
than 3,500 decision-makers
to hear from over 170 keynote
speakers and attend in excess
of 4,700 hosted meetings. After
launching in London this year,
Shoptalk Europe moves to
Barcelona for the 2023 edition,
retaining its status as the new
home for Europe’s boldest and
bravest retail trailblazers.
6
Hyve Group plc
Annual Report and Accounts 2022
A fundamentally
different business
Mark’s take on our
transformation
How we are
maximising growth
Digital
diversification
Making strategic
acquisitions
During FY23, Hyve made two strategic
acquisitions:
The specialist omnichannel meetings
platform for the global mining
investment community. This acquisition
added 10 tech-enabled in-person
events and two fully online networking
programmes to Hyve’s portfolio, while
also supporting our digital diversification.
The world’s largest online fintech
meetings event opened Hyve up to a
brand new growth sector. The customer
demand following the inaugural Fintech
Meetup has resulted in the launch of an
in-person event in 2023.
Continued brand development through product extensions where appropriate
Market-
leading event
Geo-clone
Product
extensions
E-commerce
for retail
E-commerce
for grocery
FinTech
EdTech
Giftware
Natural
Resources
Engineering
Launched
2022 as part
of Shoptalk
Europe
Source Home
& Gift
Launch 2023
Launched
2022
Launched
2022
Strategic report
Governance
Financial statements
7
Annual Report and Accounts 2022
Hyve Group plc
A fundamentally
different business
Mark’s take on our
transformation
How we are
maximising growth
Digital
diversification
We continue to look for opportunities to
diversify our portfolio with data-driven
and tech-enabled products. Most
recently, this has included the full launch
of Connect programmes across three
of our major events, Bett, CWIEME and
Spring Fair, and the expansion of
the existing programmes at Shoptalk,
Shoptalk Europe and Groceryshop.
The Connect platform will transform
the way our event communities connect
and collaborate. It does this through
creating thousands of individual
meetings onsite at our events, which
drive meaningful conversations that
result in positive change.
The full launch at Bett in March is
expected to enable thousands of
education buyers to meet directly with
over 500 solution providers for over
5,000 high-value, 15-minute meetings.
To ensure they’re valuable, all meetings
are double-opt in (both people want to
meet each other) and are scheduled
based on individual availability.
Our digital diversification roadmap
Market-
leading event
Meetings
programme
Online
meetings
E-commerce
for retail
E-commerce
for grocery
FinTech
EdTech
Giftware
Natural
Resources
Engineering
1st edition as Hyve:
8,000 meetings
Retail Meetup
2nd edition in 2022
6,500+ meetings
Retail Meetup
Trial launch 2022
750 meetings
Pending
121 Group first year
as part of Hyve
121 Group first year
as part of Hyve
Launch in 2023
c.2,260 participants
c.25,300 meetings
94% satisfaction rate
Launched 2022
Launched 2022
Not suitable for
virtual format
Not suitable for
virtual format
Our strategy
continued
8
Hyve Group plc
Annual Report and Accounts 2022
In 2022 we drew a line in the sand on
the past and successfully completed the
structural transformation of Hyve, from a
portfolio of regionally focused, mixed-
scale events in more volatile emerging
markets, to large-scale, market leading,
high-quality global brands in advanced
economies and in key sectors with
future growth trajectories. This is a
significant achievement.
This plan was first articulated in 2017.
Our proactive approach to managing
the challenges of both COVID-19 and
the Russian invasion of Ukraine has
accelerated the business’ transformation.
Hyve today is unrecognisable from its
form only five years ago. The portfolio
is now de-risked and almost 95% is
rooted in advanced economies, with
our divisions of RetailTech & FinTech,
EdTech & Natural Resources and Retail,
Manufacturing & Engineering all
operating through a centralised
model of best practice.
Chief Executive Officer’s statement
Established
solid platform
for growth
FY22 has been a
landmark year
for Hyve.
Mark Shashoua
Chief Executive
Officer
Strategic report
Governance
Financial statements
9
Annual Report and Accounts 2022
Hyve Group plc
In this landmark year we added further
tech-enabled products to our portfolio
through the acquisitions of 121 Group and
Fintech Meetup, and drove significant
organic growth through launching new
product extensions, such as Shoptalk
Europe and Ahead by Bett. In addition,
we are rolling out full-scale meeting
programmes for 2023, as the trials
during 2022 have proven demand.
New launches are planned, including an
in-person extension of Fintech Meetup.
As we move into 2023, we have
established ourselves as a highly
resilient, next-generation global events
business with good visibility of earnings,
a stronger balance sheet and clear
plans to drive further organic
growth and explore further digital
diversification, while delivering the
highest-quality customer experience
and return on investment.
Strong trading trajectory into 2023
Our financial performance for the full
year ended 30 September 2022 delivered
strong revenues of £122.5m (2021:
£21.8m) from continuing operations,
representing c. 90%
1
revenue recovery
to pre-COVID-19 levels excluding
China
2
, and headline EBITDA excluding
insurance proceeds of £4.4m (2021:
loss of £37.0m).
Headline profit before tax from
continuing operations was £11.5m (2021:
£13.9m). Excluding the impact of
insurance proceeds of £19.3m (2021:
£65.0m) received in FY22, the Group’s
headline profits would have increased
by £43.3m, which highlights our solid
underlying trading and represents a
return to positive headline EBITDA
without reliance on insurance proceeds.
Hyve continues to focus on margin
improvement across the new portfolio,
while investing in future growth including
new launches, geo-clones and full-scale
meetings programmes.
Our adjusted net debt reduced to £71m
(2021: £80m), reflecting the strong
cash-generative qualities of our business.
This is at the lower end of the previously
guided range, despite significant
movements in the portfolio. Post period
end the refinancing was completed,
with a new debt facility of £135m now
in place.
The Group’s liquidity position at year end
was sustained at £129.6m despite the
macroeconomic headwinds faced during
the year.
Full revenue recovery in
second half
Momentum in our post-COVID-19
recovery continued during FY22, with
12 in-person events held in H1 2022
and 17 in-person events in H2. These
delivered revenues of £54.9m in H1
2022 and £67.5m in H2, achieving
approximately 110%
1
recovery in the
second half excluding China
2
. For the full
year 2022, Hyve achieved revenues of
£122.5m, circa 90%
1
revenue recovery
excluding China
2
. This is an exceptional
achievement, considering that during the
first half of the financial year we faced
Omicron-related uncertainty, as well as
the Russian invasion of Ukraine.
To reflect our refocused portfolio, from
FY22 we are reporting our divisional
revenue breakdown by sector-centric
divisions, rather than geographies, with
37% from RetailTech & FinTech; 32% from
Retail, Manufacturing and Engineering;
26% from EdTech & Natural Resources
and 5% from Asia. Of these total
revenues, 14% comes from our tech-
enabled meetings products, which we
envisage will grow as we roll out more
of our tech-enabled products.
Chief Executive Officer’s statement
continued
1
Recovery is assessed with reference to pro forma FY19 revenues. The FY19 revenues have been adjusted
to include the FY19 results of acquisitions made since September 2019 and to exclude the FY19 results of
businesses that have since been disposed of. The FY22 revenues are after excluding discontinued operations
in respect of Russia, Ukraine and Turkey.
2
As no events were able to run in China in the year, FY22 China revenues were £nil. The FY19 revenues for China
have been removed to show the recovery level of events that were able to run during the year.
Our efforts are now delivering
results and we are beginning to
create real value for shareholders.
During the year:
We achieved an industry-leading
performance with circa 90%
1
recovery
of revenues in FY22 and circa 110%
1
in
H2, both excluding China
2
;
We de-risked the portfolio to almost
95% advanced economies and
diversified our revenue mix, already
delivering 14% of revenues through
tech-enabled products after our first
year of trials;
The quality of our events was evident,
with like-for-like customer spend
increasing by 14.2% in FY22 and
tracking at 14.8% into FY23 – the
third consecutive year of double
digit growth;
We achieved above-average Net
Promoter Scores (NPS) (visitors +36
and exhibitors 15);
Our performance materially
outperformed the industry at large,
proving our focus on market-leading
events and a centralised operating
model is successful;
We gained visibility over quality of
future earnings from our forward
bookings of £98m; and
After strong cash generation, we have
achieved net debt of £71m, which
is at the lower end of the £70–90m
guidance, while completing two value-
creating acquisitions during the year.
10
Hyve Group plc
Annual Report and Accounts 2022
We know that our customers prioritise
market leading events, and our even
further honed focus on these is paying
off. Customers are returning with a
higher allocation of marketing budgets,
which has resulted in continued growth in
like-for-like customer spend, increasing
14.2% from the previous edition.
Momentum is continuing into FY23,
tracking at 14.8%, which would be the
third consecutive year of double-digit
growth in like-for-like customer spend.
The quality of our events resulted in
above industry average Visitor NPS
(at +36) and Exhibitor NPS (at +15).
Our forward bookings as at 12 December
of £98m give us strong visibility of
earnings, supporting the positive
momentum as the business goes
into 2023.
Portfolio transformation completed
The most significant change to our
portfolio during the year was the sale
of the Russian business, which reduced
our total portfolio by 15 events and
significantly changed the shape of Hyve.
The sale was initiated following Russia’s
invasion of Ukraine and care was taken
to find an outcome which overcame the
moral, legal and compliance obligations
of continuing to operate in Russia.
The Russian business has historically
made a significant financial contribution
to the Group but continuing to operate
in the country became untenable
following the Russian invasion of Ukraine.
The decision to sell the business was
taken after considering feedback from
a number of the Group’s stakeholders,
including customers and shareholders,
in order to protect the reputation of
the Group.
The disposal ultimately achieved our
objectives of protecting the future
prospects of our strategically important,
market-leading events outside Russia
by exiting the Russian market in a prompt
manner and with the prospect of value
being returned to the Company.
Importantly, this also provided stability
to our 200+ former Russian colleagues.
As previously reported, we sold our
Turkish business in October shortly
after the management buy-out of the
Ukrainian portfolio in July, thereby
completing the disposal in full of our
former Eastern and Southern Europe
division. Earlier in the year, we also exited
Indonesia and our ABEC Indian business.
Hyve’s operations are now nearly 95%
concentrated in advanced economies,
with approximately 30% of revenues
generated in the US, whereas in 2017,
c.90% of our revenues were sourced
from emerging markets and only c.10%
came from advanced economies.
The portfolio transformation was
supported by the acquisitions of 121
Group, a market leading omnichannel
meetings programme organiser focused
on Mining, and Fintech Meetup, the
financial technology industry’s leading
online event, both contributing to the
continued digital diversification of the
Group’s portfolio.
During the year, we continued to invest in
our brands through launching product
extensions such as Ahead by Bett and
Shoptalk Europe, and invested in growing
our omnichannel portfolio with the trials
of Connect programmes for Bett,
CWIEME and Spring Fair.
After the portfolio changes in the year
we now have 33 in-person events and
14 tech-enabled programmes. This
represents £3.7m revenue per event
based on total FY22 revenues,
compared to 2017 when we had a
portfolio of 269 events and revenues of
£0.5m per event. The marked increase
in our average revenue per event
endorses the investments we have
made and the subsequent increased
return on investment we provide our
customers with.
As we move into 2023, the historical
comparisons to pre-COVID-19 financial
performance do not relate to the Hyve of
today, owing to its streamlined portfolio
and fundamentally different shape,
centred around market-leading event
brands in sectors of growth.
We have a streamlined
and de-risked portfolio,
95% rooted in advanced
economies.
£3.7m
revenue per event
33 in-person
events
Strategic report
Governance
Financial statements
11
Annual Report and Accounts 2022
Hyve Group plc
Weaving ESG into our DNA
We made significant progress in 2022 in
embedding environmental, social and
governance (ESG) considerations
throughout Hyve.
Having launched our ‘Creating Platforms
for Progress’ strategy last year, we see
our biggest impact as putting ESG issues
on the agenda and inspiring change
inside and outside our Company. That
is why colleagues are being given one
personal objective aligned to our
strategy, and we have started to roll out
Carbon Literacy Project-accredited
training to deepen understanding.
In order to empower local communities,
we set aside 0.5% of our headline profit
before tax in FY22 to invest in community
projects throughout FY23. We also rolled
out volunteering schemes and agreed a
new partnership with ‘Making the Leap’,
a social mobility organisation, to help
under-represented individuals find
meaningful careers.
This year, a diversity and inclusion audit
was undertaken, and we added an
inclusion module to our employee
engagement survey. We also launched
Pryde, our inaugural employee resource
group, to support LGBTQ+ colleagues,
and used significant dates in the year
such as International Women’s Day and
Black History Month to host important
conversations and educational
opportunities.
In terms of addressing our impact on the
planet, we now comprehensively track
our scope 1 and 2 carbon emissions and,
for the first time, calculated the average
carbon footprint of an attendee at one
of our events (our scope 3).
From a governance point of view, we
began to review and analyse the
climate-related risks and opportunities
facing Hyve and are now incorporating
this into our overall Group risk review
process. We will also now start to
evaluate the financial impact that
different climate scenarios would
have on our Company.
Reflections on 2022 and
what’s next
FY22 has been a landmark year for Hyve.
We have successfully delivered on the
ambitious structural transformation of
the business first outlined in 2017. The
de-risked portfolio is now 95% focused
on advanced economies, with high-
quality events in growing sectors.
Hyve now has a strong platform to
deliver organic growth.
Our numbers at year end show the
tangible results of the refocused
portfolio. The business performed
strongly, with full revenue recovery on
a pro-forma basis, excluding China, to
pre-COVID-19 levels in H2 and 90% for
the full year. Net debt is at the lower
end of guidance following strong cash
generation, and we have secured a new
£135m debt facility.
Our relentless focus on market leading
events makes us best placed to weather
macroeconomic challenges ahead, as
marketing spend continues to gravitate
towards must-attend leading events that
drive return on investment. The quality of
our events was evident, with like-for-like
customer spend increasing by 14.2%,
tracking strongly into FY23, which would
be the third consecutive year of double-
digit growth. Our NPS scores are also
significantly above the industry average.
In March 2023 we will be holding two
Investor Days: one in Las Vegas at
Shoptalk and the other in London at
Bett UK to showcase those key brands.
As well as bringing to life our unmissable
in-person events, these events will
showcase the best of our tech-enabled
products, which are at the forefront of
the global events industry.
Hyve has a very exciting future and we
have made great progress executing
our strategic priorities to date. With our
cash-generative business model and
forward bookings of £98m, we have
good visibility of future earnings and
remain confident as we enter 2023. The
business is well positioned for growth
and to deliver sustainable long-term
value for all our stakeholders.
I would like to end by thanking all my
colleagues for their commitment and
hard work. I look forward to the year
ahead with excitement as Hyve enters
this new era and we reap the benefit
of our transformation.
Mark Shashoua
Chief Executive Officer
0.5%
of our headline PBT
in FY22 set aside
to be invested in
community projects
throughout FY23
Chief Executive Officer’s statement
continued
12
Hyve Group plc
Annual Report and Accounts 2022
Post-COVID-19 recovery
Over the course of the year, we have
seen the continued recovery of the
majority of our events, with many now
outperforming their pre-pandemic
editions. This is with the exception of
China, where all events in the financial
year were cancelled, as the country
continues to experience disruption.
Revenue for the financial year ending
30 September 2022 amounted to
£122.5m (2021: £21.8m), which is
above 2019’s pre-COVID-19 revenue
of £121.5m (restated to exclude
discontinued operations).
Headline EBITDA for the financial year
was £23.7m, compared to £28.0m in
2021. Excluding the impact of insurance
proceeds of £19.3m (2021: £65.0m),
headline EBITDA has increased by
£41.4m to £4.4m (2021: loss of £37.0m).
This is a strong illustration of the value
our customers place in market-leading
in-person events.
Chair’s statement
Returning
to growth
We have a streamlined
and de-risked portfolio,
almost 95% rooted in
advanced economies.
Richard Last
Chair
Strategic report
Governance
Financial statements
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Annual Report and Accounts 2022
Hyve Group plc
Portfolio evolution
2022 brought further challenges, in
particular Russia’s invasion of Ukraine,
which necessitated the sale of our
Russian business. Since then, we have
also sold the Ukrainian business to its
management. The Turkish business has
also been sold. This leaves Hyve with a
streamlined and de-risked portfolio,
more than 90% rooted in advanced
economies.
In addition, we have continued to
diversify our portfolio with additional
tech-enabled products and events,
through both acquisitions and
new launches.
Dividends
We do not plan to recommence dividend
payments this year, but will continue to
keep this under review and reintroduce
them when it becomes appropriate to
do so, in line with a return to sustained
cash generation and profitability.
ESG
Significant progress has been made this
year towards our ESG strategy. We have
measured our carbon footprint, including
our scope 3 emissions, allowing us to
better understand the impacts of our
business on the planet. In addition, we
have conducted an in-depth review of
the climate-related risks facing our
business and are providing disclosures
in line with the TCFD’s recommendations
for the first time.
This important and necessary
groundwork completed during the year
provides us with the baseline needed to
further develop our ESG strategy and
targets, and contribute to the global
drive to tackle climate change.
The Board
During the year, we successfully
completed a Board evaluation process
using a third-party provider, to measure
the effectiveness of our governance
and the accountability of our Board
members. You can find further details
in the Governance report.
Stephen Puckett, having completed
nine years tenure, stepped down from
the Board in February 2022. During his
time Stephen was Chair of the Risk
Committee and a member of the Audit
Committee. Stephen was also the Senior
Independent Director.
Sharon Baylay, who has served the
Board since April 2014, stepped down
in March 2022. During her time,
Sharon was Chair of the Remuneration
Committee and oversaw the formation
of Hyve’s ESG Committee. I would like
to sincerely thank Stephen and Sharon
for their excellent support during their
time with Hyve and wish them well for
the future.
Rachel Addison joined us as a Non-
Executive Director in March 2022. Rachel
brings nearly 30 years of finance and
operational management experience
and has most recently been Chief
Financial Officer of Future plc, the global
platform business for specialist media.
Rachel is a chartered accountant, having
started her career at Arthur Andersen,
and is currently a Non-Executive Director
at Marlowe Plc, Watkin Jones Plc,
Gamma Communications Plc and
Mango Publishing Group. Rachel is
Chair of Hyve’s Remuneration
Committee and a member of the
Risk and Audit Committees.
Anna Bateson also joined as a Non-
Executive Director in March 2022;
however, she resigned in September,
as a requirement of being appointed
Chief Executive Officer of Guardian
Media Group. The recruitment process
for Anna’s replacement is underway.
Our people
I would like to take this opportunity to
thank our teams around the world for
their commitment to Hyve and their
passion for our products. It has been
this dedication which has driven the
continued growth and evolution of our
products, and led to the successful
performance we have seen this year.
Looking ahead
We are cautious of ongoing
macroeconomic headwinds – in
particular the ongoing COVID-19
restrictions in China and the global
recession. We do, however, remain
confident in our ability to weather those
challenges thanks to our de-risked
and diversified portfolio, our strong
forward bookings and the prospect
of our new product launches in the
coming 12 months.
Richard Last
Chair
Chair’s statement
continued
14
Hyve Group plc
Annual Report and Accounts 2022
Business model
What we deliver
Hyve events have the power
to transform.
Creating
game-changing
impact
Trade
Through our deep industry
knowledge and cutting-edge
solutions, we help the right
people to meet at the right time.
At our events, deals are made,
partnerships are formed,
investments are secured and
supply chains are optimised.
Our platforms are playing a
particularly important role as
industries rebuild following the
COVID-19 pandemic.
Network
We bring together entire industry
ecosystems using multiple formats,
including in-person events, meetings
programmes and online experiences.
Our decades of experience put us at
the heart of the industries and, through
our platforms, business becomes
personal and our customers meet
the people who matter.
Learn
We curate the most relevant and
representative content programmes
to bring the latest trends and thought
leadership to industries. Increasingly,
we use our influence to educate,
empower and drive positive change
across the industries we work with on
a global scale. At our events, today’s
leaders inspire tomorrow’s.
Strategic report
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Financial statements
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Annual Report and Accounts 2022
Hyve Group plc
The place to meet
Hyve events catalyse business
communities around the world, providing
a place to meet, discuss, do business and
get inspired. At any one of our events,
thousands of new and opportunity-filled
connections are made.
Multiple sectors
We play a significant role across major
sectors, such as education technology,
e-commerce and energy, by hosting
important discussions which have the
power to influence the future.
Who our customers are
Our customers are buyers, sellers,
businesses, investors, analysts,
governments, educators, influencers and
decision-makers – to name just a few.
Marketing platforms
Our platforms are important marketing
opportunities for our customers, and we
see a clear trend towards increasing
spend at market-leading events.
Special guests
In addition to exhibitors and visitors,
we also consider our sponsors,
speakers and special guests to be our
customers, as they too have something
to add to and gain from our events,
whether that be marketing, trading
or influencing.
Business model
continued
16
Hyve Group plc
Annual Report and Accounts 2022
What we do
We offer two core products...
How we make money
Unmissable events
Our 33 market-leading in-person event brands span
major industries. From Bett, bringing together the
world’s leaders in education technology, to Fintech
Meetup, which kickstarts the year for an entire
industry, our events are important dates in the
calendars of major industries, and are where our
customers come to get inspired, expand their
network and do business.
Tech-enabled meetings
programmes
Our tech-enabled meetings programmes use data
to expertly match customers ahead of our events,
greatly improving their return on investment.
These programmes mean that meeting the right
people is no longer left to chance. These meetings
programmes are being rolled out at our in-person
events, as well as dedicated online events.
Space
47%
(2021: 60%)
Non-space
53%
(2021: 40%)
Our revenue model is evolving as the shape of our business
changes. We still receive a large percentage of our revenue
(47)% from selling space at our in-person events to exhibitors,
but revenue from delegates (19%) and our tech-enabled
products (14%) is increasing with each year.
Space
47%
Technical
1%
Sponsorship
18%
Tech-enabled
14%
Delegates
19%
Other
1%
Comes from sale of technical
services to exhibitors, such as
stand construction
Comes from delegate sales
at our conferences
Comes from tech-
enabled revenue
streams such as online
events and meeting
programmes.
Comes from selling sponsorship
opportunities – for example,
stage branding or supporting
an awards programme
Strategic report
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Annual Report and Accounts 2022
Hyve Group plc
Centralised operating model
Our business operates as one unified
global team. By implementing our
centralised operating model, we ensure
that no matter which Hyve event you
attend, you know you will always be
met with the same standard.
Data
By getting to know our attendees, we
are able to build detailed profiles of our
visitors and their reasons for attending
our events. And this is highly valuable
data both for our customers and for
our forward planning.
Commitment to quality
We are absolutely committed to
quality and delivering world-class
products that provide enormous
value for our customers.
The Hyve way
We are unlike any other events
company. Here’s what sets
us apart...
Our ambition
It all starts here. At Hyve, we pride
ourselves on instilling an entrepreneurial
spirit among our teams. We give people
the freedom and space to do things
their way, enabling us to benefit from
a diverse wealth of experience
and knowledge.
Meetings products
Through the use of cutting-edge
technology, we provide the most
valuable meetings programmes in the
business which are certain to deliver
enormous returns on investment.
Tailored approach
We deliver a range of products to our
customer communities, each with the
aim of creating transformational impacts
for them, year-round.
Business model
continued
18
Hyve Group plc
Annual Report and Accounts 2022
Our people and values
We consider ourselves experts in
connecting people, and that doesn’t
stop with our customers. This year,
as our business has almost fully
recovered from COVID-19, we
have been delighted to bring our
people back together and create
unmissable moments.
Listening to our people
It’s undeniable that people’s expectations
of work are changing. At Hyve, the
way we stay informed about this and
navigate it is through Peakon, our
monthly engagement pulse survey tool.
Each month, we receive hugely valuable
insights, direct from our people, on what
they love and where they’d like to see
improvements. Not only does this help to
make sure our people feel heard, but it
also helps us to hone our people strategy,
making it work for our people as well as
the business.
Inspiring opportunities
We know our event model works, and
this year we’ve doubled down on taking
some of the best bits and applying it to
our culture. One great example is our
schedule of inspiring talks and events
that we have hosted specifically for our
people. From a talk by self-titled Tech
Humanist Kate O’Neill all about digital
transformation, to an empowering
conversation with Adelle Barker about
her gender transition, there have been
lots of opportunities for our global teams
to get inspired.
Making time to talk
Social is big at Hyve and we know how
to put on a party. Highlights include our
British summer garden party which
brought together our London team along
with their family and friends, our spooky
New York Halloween costume party
and our New Delhi team’s celebrations
for Diwali.
Saying ‘Hy’
During the year, we launched our new
onboarding programme, allowing us
to help our newest colleagues feel
connected from day one. In addition to
posting a welcome pack to the homes
of new joiners to get them excited
before they start, our new colleagues
also receive a series of welcome emails
during week one, get assigned a buddy
who ensures they have someone to ask
all those first-week questions to and line
managers are better supported in how
to manage new team members.
People powered
150+
colleagues, friends and
family attended our
summer BBQ
Top 25%
We have maintained an
employee net promoter
score (eNPS) in the top
25% of all companies
using Peakon throughout
the year
Jo Rabbett
Chief of Staff
Strategic report
Governance
Financial statements
19
Annual Report and Accounts 2022
Hyve Group plc
An incredibly rewarding
yet challenging three-
day training course with
Robustmind Mental
Fitness Ltd. Proud to
say I am now a Mental
Health First Aider.
Alex Jade Oxley
Marketing Manager
Our people and values
continued
Bettering our benefits
Peakon highlighted a number of ways
our colleagues wanted to see our
benefits improved, and we took action
on those.
Our people told us that our gym
partnership wasn’t good enough, so
we signed a new partnership with
Gympass giving the majority of our
global teams free access to gyms
worldwide.
Feedback said that our private medical
insurance was good, but could be
better. As a result, we removed the cap
on existing illnesses to make our policy
more accessible.
Our teams also told us that our
parental pay policy didn’t work for
them, so this year we doubled paid
parental leave for both new mums
and new dads, including those who
are adopting, fostering or having a
baby using a surrogate.
We are now investigating local
alternatives for our non-UK colleagues
to also realise these enhanced benefits.
Prioritising our minds
We continue to invest in the mental health
of our people, and this year we tried new
and fun ways to support them, such as
puppy therapy. We also continued to
connect colleagues with free online
therapy and implemented Summer
Fridays, allowing our teams to take
Friday afternoons off during summer to
boost their work/life balance.
In addition, we rolled our mental health
training to more than 40% of our line
managers, and trained another 8 mental
health first aiders, which Marketing
Manager Alex describes perfectly:
Financial wellbeing has become more
and more relevant this year, and so we
hosted a series of financial wellbeing
talks and workshops with industry
experts. And in recognition of the
significantly increased cost of living in the
UK and USA, we introduced a one-off
Cost of Living Allowance payment,
which prioritised our lowest earners,
by giving them a higher allowance.
Creating a culture
of belonging
Once again, inclusion has been a
core strand of both our people and
ESG strategies.
We believe that work is never done with
regard to inclusion and that we must
all make a commitment to continue
learning. Starting with our Executive
team, we rolled out unconscious bias
training to managers globally to help us
all become more aware and inclusive.
An initiative we’re really proud of is the
launch of flexible bank holidays, which
allow our people to swap regular bank
holidays for ones which mean more to
them, such as Chinese New Year, Eid
or Pride.
Read about more of the work we’ve
done, including our global inclusion
benchmark, on page 24.
59%
of senior appointments this
year have been female
20
Hyve Group plc
Annual Report and Accounts 2022
With Pryde
This year we launched our first
employee resource group, and we
could not be more proud of its progress.
Pryde is dedicated to supporting
LGBTQ+ colleagues and, in its first year,
has made an enormous impact on the
business. Their work has included a
full-scale review of Hyve’s policies and
participation in Stonewall’s Workplace
Equality Index, and the group is now
beginning to work with our event teams
to champion LGBTQ+ inclusion across
the industries we operate in.
Helping our leaders to lead
Our annual Hyve Leadership Team (HLT)
conference brought together our senior
leaders from around the globe for two
days of collaboration, just after the end
of our financial year. In addition to
connecting as a team and discussing
Hyve’s strategy, the leaders also took
part in a cognitive behavioural session,
learning more about becoming aware
of their mind traps and realising
untapped potential.
We are also better supporting our
junior and middle managers through
implementing leadership basics
training, and launching a new
email communication, Marvellous
Managers, which offers tips, advice
and reminders about their line
management responsibilities.
Performance and
development
This year we made changes to give our
people the space and development to
grow, while helping them connect to their
place in the business. By implementing
a brand new process which throws out
the single annual review and instead
encourages leaders to have ongoing
conversations with their team about their
performance, we help people to focus on
what motivates an individual most about
the work they do today, what career
possibilities they would like to learn about
and what support is needed for them
to make progress. This is where we
consider the value to be, and how we
keep our talent within the organisation.
More than 80% of our colleagues have
completed their strengths profile; a huge
take-up for the new process.
We held a Careers Week earlier in the
year to help people progress, and rolled
out key skills training, including sessions
on the basics of finance, presenting,
Excel and giving feedback.
We also launched an emerging leader
programme for our strong performers
who hadn’t had formal leadership
training in the past. It consisted of three
modules and three individual coaching
sessions. The modules focused on
leading teams through change, how to
hold coaching conversations, adaptive
leadership styles and preparing for their
next challenge within the business.
Hy Five
Recognition is core to our culture, and
each quarter we recognise some of our
colleagues who have lived and breathed
our values.
27
winners were taken to Henley
Regatta and treated to a
professional development session
and dinner at The Ivy to celebrate
winning the Hy Five award
Strategic report
Governance
Financial statements
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Annual Report and Accounts 2022
Hyve Group plc
Environmental, social and governance strategy
A year on from launching
our ESG strategy, we are
really proud of the
progress we have made.
Our approach to ESG is one we believe
will be increasingly impactful as the
years progress, as it sees us embed a
consciousness and collective call to
action among our people. We have
chosen to take this grassroots approach
as we believe that it will allow us to
make the greatest impact, by tapping
into the passion and capabilities of
each and every person who works in
our business and creating a genuine
sense of responsibility among us.
The response from our people has been
overwhelmingly positive, and we have
seen a surge in activity across the year,
ranging from the formation of new
partnerships, to the creation of new
policies, and from investments into
green solutions, to a rise in ESG-themed
content at our events. We look forward
to seeing this commitment blossom in
future years.
Our ESG strategy is formed around four
pillars, and this year significant progress
has been made in each area.
Community engagement
Social mobility
Innovation, enterprise
and trade
Sustainable travel
Sustainable supply chain
Reducing carbon emissions
Global education and
training
Environmental awareness
Customer sustainability
awareness
Employee training
and development
Equality, diversity
and inclusion
Fair and decent work
Empowering
communities
Broadening
horizons
Addressing
impact
Inspiring
change
1
2
3
4
Creating
‘platforms for
progress’
Nikki Griffiths
Group Communications
& ESG Director
22
Hyve Group plc
Annual Report and Accounts 2022
We have become more conscious
of the communities we work within,
making an effort to recognise the
local struggles and issues facing
those living in these areas.
A key area of focus for us has been
the London Borough of Westminster,
which surrounds our headquarters in
Paddington, West London, and has one
of the highest proportions of individuals
living in poverty in London.
1
As such,
this year we chose to become a Silver
Partner for Making the Leap, a societal
change charity with over 28 years of
experience, whose aim is to ‘transform
the futures of disadvantaged young
people in the UK by providing training
to raise their aspirations and develop
their skills, confidence and outlook to
choose and succeed in a career’.
This partnership will offer Hyve the
chance to contribute to the improvement
of social mobility and will enable us to
play a part in enriching the lives of local
people who have had a less privileged
start to life than others.
Through this partnership, we have
already taken part in a social mobility
careers fair, with further initiatives
planned, including interview coaching
at local schools, commercial awareness
days with young people and student
visits to our offices and events.
Going into FY23, we have committed to
reinvesting 0.5% of our headline profit
before tax into community projects
local to either our offices or events.
Empowering communities
1
Volunteering in Cape Town
Following their latest event, our Mining
Indaba team spent a day transforming
three classrooms at Thembani Primary
School in Cape Town to create an
inspiring space for the learners and
teaching staff, meaning the school’s
stretched budget could be spent on
books and educational materials rather
than building repairs.
1
Trust for London | trustforlondon.org.uk/data/poverty-borough/
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Financial statements
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Annual Report and Accounts 2022
Hyve Group plc
2022 welcomed a wealth of inclusion
initiatives to support the development
of our accepting culture, which
celebrates uniqueness.
Inclusion calendar
Our inclusion calendar taps into globally
celebrated dates, such as Pride,
International Women’s Day, Black History
Month and Disability Awareness Week.
While we recognise these are topics
which should be talked about year-
round, these dates provide an
opportunity to have conversations
around, learn about and celebrate
different cultures.
Highlights from this year include our
drag queen bingo party for Pride, a
global conversation on imposter
syndrome for International Women’s
Day, and our black talent marketplace
event during Black History Month.
Launch of inaugural ERG
During the year, we launched our first
employee resource group (ERG), Pryde,
to help us in creating a welcoming
culture for people from the LGBTQ+
community.
The group conducted a review of
Hyve’s policies, including launching a
Transitioning at Work policy, organising
volunteering opportunities including
at UK Black Pride and raising money
for the group’s nominated charities,
Diversity Role Models and KyivPride.
Peakon
To ensure that the improvements and
initiatives are hitting the mark and
genuinely improving diversity and
inclusion at Hyve, we have added
the ‘Include’ module to Peakon, our
engagement survey (see more on
page 19). In addition to collecting
protected characteristic data, this
module also allows us to gain
feedback from our people on their
thoughts about inclusion at Hyve.
Global benchmark
Recognising that work is never done with
regard to inclusion, this year we also
commissioned a third-party diversity
specialist, MIX Diversity Developers, to
conduct an analysis of Hyve’s inclusion,
against the global diversity, equity and
inclusion benchmark.
The results show that we are out-
performing peers in certain areas such
as leadership and communication, and
highlighted areas for us to work on,
like the formalisation of an inclusion
vision and strategy, providing us
with a well-informed plan to
continue improving inclusion at Hyve
throughout the next 12 months.
Broadening horizons
+45
eNPS for D&I
At the end of the financial year, the
overall eNPS with regard to diversity
and inclusion was +45, which is
ranked at the higher end of ‘Good’
by Peakon
2
Environmental, social and governance strategy
continued
24
Hyve Group plc
Annual Report and Accounts 2022
Our first step has been to build a clear picture of what our carbon
footprint is, and where we have the biggest opportunities to reduce it.
The last 12 months have been spent
meticulously measuring our carbon
footprint.
For a business like Hyve, which relies
heavily on travel and temporary
infrastructure, this is a complex task
requiring specialist knowledge.
As such, we partnered with carbon
footprint experts eCollective, who we
have worked with over the past year to
develop not just an accurate picture of
our scope 1, 2 and 3 emissions, but also
a tool to allow us to accurately measure
the carbon footprint of all future
Hyve events.
Going forward, we will be focusing
on the average carbon footprint per
attendee, as this will allow us to track
our progress regardless of whether
our portfolio changes or not.
2022 Greenhouse Gas
(GHG) emissions
For the first time this year, our GHG
data includes emissions from our events.
While this greatly improves the accuracy
and transparency of our data, it is also
responsible for a significant increase in
our reported total emissions.
We analysed primary data provided
directly from suppliers, providers and
the business through specific surveys
relating to the various business models.
Where surveys were not fully completed,
relevant industry averages provided by
Department for Environment, Food &
Rural Affairs and other similar sources
were used.
For this first year of reporting, we focused
on a sample of five events, using a cross-
section of geographies and event types.
This was then extrapolated across the
event portfolio, using the average carbon
footprint per attendee.
Our scope 3 emissions include those
generated by customer travel, waste
from events and the energy used to
power them, among other things.
We will continue to report on the emissions
of our total business, including events, and
hold ourselves to account in the way we
believe to be most honest and fair.
Our partnership with the
Carbon Literacy Project
Towards the end of FY22, we designed
our bespoke carbon literacy training
programme, which was subsequently
accredited by the Carbon Literacy
Project. In 2023, this will be rolled out
to colleagues, creating a wealth of
knowledge in the business, and a team
of motivated individuals to help us drive
improvements in our sustainability.
Addressing impact
663
Average kgCO
2
e
per attendee
3
Streamlined energy and carbon
reporting (SECR) table
Global emissions (tCO
2
e)
2020-2021
2021-2022
Variance
Total scope 1
194.00
60.45
n/a
Total scope 2
778.00
92.57
n/a
Total scope 3
86.00
450,052.19
n/a
Total
1,058.00
460,205.21
n/a
Average carbon footprint
per attendee (kg of CO
2
e)
Unknown
663
n/a
Since this year we have overhauled our approach to our carbon emissions measurement and
reporting, it is not appropriate to include the % variance from FY21 to FY22; however, we plan to
resume this reporting next year.
Strategic report
Governance
Financial statements
25
Annual Report and Accounts 2022
Hyve Group plc
Our fourth pillar focuses on the global
education and training of ESG topics and
centres on us using our position as the
leading voice across major industries to
drive positive change.
This focus, of course, starts within our
business, and this year we have created
numerous opportunities for our
colleagues to learn. We also asked every
single one of our colleagues to set a
personal objective relating to ESG, which
has led to a greater awareness and
understanding of not only our ESG
strategy, but the positive impact each
individual can make.
Inaugural ESG-focused
event
This year saw the launch of our first ever
ESG-focused event, Green Energy Africa
Summit. This connected ministers and
government leaders with the global
private sector and welcomed senior
delegates across two days to drive deals
and investment into green energy
projects, provide energy access and
solutions for the continent and, ultimately,
shape the future of Africa.
This year’s event was supported by key
partners including PwC, Rio Tinto and
Boston Consulting Group, with a thought-
provoking agenda including sessions
such as ‘The Role of Technology in
Driving the Energy Transition’, ‘The
Mining Industry’s Role in the Race to
Net Zero’ and a Pan African discussion
panel titled ‘The Green Transition.
The Decade to Deliver’.
The majority of Hyve events now include
sustainable development in their themes
and agendas, and this focus is expected
to grow throughout 2023 and beyond.
Inspiring change
4
Environmental, social and governance strategy
continued
28
ministers and
government officials
from across Africa and beyond
convened at Green Energy Africa
Summit to address the industry and
set out the future direction of the
African energy sector
26
Hyve Group plc
Annual Report and Accounts 2022
Task Force on Climate-related Financial Disclosures (TCFD)
Background
The TCFD has developed a framework to help public companies and other organisations disclose climate-related risks and opportunities. As a premium listed company, Hyve
is required to include a statement in our Annual Financial Report on whether we have made disclosures consistent with the TCFD recommendations, or to explain why not.
This is Hyve’s first year of reporting against the TCFD recommendations.
In meeting the requirements of Listing Rule 9.8.6 R, we have concluded that for FY22:
We fully comply with recommended disclosures 2, 8 and 10;
We partially comply with recommended disclosures 1, 3 and 6; and
We do not comply with recommended disclosures 4, 5, 7, 9 and 11.
TCFD pillar
TCFD recommended disclosures
Cross-reference or reason for non-compliance
Next steps and further comments
Governance
1) Describe the Board’s oversight of
climate-related risks and opportunities.
ESG Committee report (see pages 94 and 95)
Risk Committee report (see pages 90 and 91)
Partially compliant
– Climate-related risks and
opportunities are discussed as part of the Risk and ESG
Board Committees; however, further work could be
done to delve deeper into these topics by discussing the
financial implications of such risks and opportunities.
We will ensure that the Board considers climate-
related risks and opportunities as part of the ESG
strategy in key decisions and disclose how the
Board supervises progress against related targets.
We will achieve this by formalising the review
process during FY23.
2) Describe management’s role in
assessing and managing climate-related
risks and opportunities.
Compliant
We will continue to develop and disclose
communication channels and the allocation of roles
and responsibilities of climate-related issues within
Hyve senior management.
Strategic report
Governance
Financial statements
27
Annual Report and Accounts 2022
Hyve Group plc
TCFD pillar
TCFD recommended disclosures
Cross-reference or reason for non-compliance
Next steps and further comments
Strategy
3) Describe the climate-related risks
and opportunities the organisation has
identified over the short, medium and
long term.
ESG Committee report (see pages 94 and 95)
Partially compliant
– Work has been done to
understand the climate-related risks and opportunities
facing Hyve during the financial year.
During FY23, we will disclose our significant
climate-related risks and opportunities by time
horizon (short, medium and long term). We will also
provide detail on the process(es) used to determine
the climate-related risks and opportunities in each
time horizon which could have a material financial
impact on our business.
4) Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy and
financial planning.
ESG Committee report (see pages 94 and 95)
Not compliant
– While work has started, we have not
yet fully assessed how our commercial strategy will
be impacted by our identified climate-related risks
and opportunities, nor have we undertaken a financial
impact assessment or outlined our mitigation strategies.
We plan to undertake a financial quantification
assessment during FY23 and will review how our
Group strategy and subsequent financial planning
may be impacted by our identified climate-related
risks and opportunities.
5) Describe the resilience of the
organisation’s strategy, taking into
consideration different future climate
scenarios, including a 2°C or lower
scenario.
ESG Committee report (see pages 94 and 95)
Not compliant
– While our temperature and timeline
scenarios are defined in this report, there is more work
to be done to better understand our resilience.
Next year, we will review and report the resilience
of our Group strategy against our identified
climate-related risks and opportunities and disclose
where these risks and opportunities may have the
greatest impact.
Risk management
6) Describe the organisation’s processes
for identifying and assessing climate-
related risks.
ESG Committee report (see pages 94 and 95)
Partially compliant
– Our process for identifying and
assessing climate-related risks has been included in this
report, but we know development work is required to
further categorise these risks.
We will communicate the current and future
regulatory drivers of our approach to climate
change and disclose key risk categories and
terminology used within our TCFD risk register
during FY23.
7) Describe the organisation’s processes
for managing climate-related risks.
ESG Committee report (see pages 94 and 95)
Not compliant
– We are yet to detail our processes
(e.g. risk mitigation, transference, acceptance or
control) for managing climate-related risks. In addition,
we have not yet detailed our determination of climate-
related materiality.
We will review our decision-making processes for
current and future risk controls and develop our
methodology for determining climate-related
materiality during FY23.
8) Describe how processes for identifying,
assessing and managing climate-related
risks are integrated into the organisation’s
overall risk management.
ESG Committee report (see pages 94 and 95)
Compliant
Our identified climate-related risks and
opportunities are applied to our overall risk
management processes.
Environmental, social and governance strategy
continued
28
Hyve Group plc
Annual Report and Accounts 2022
TCFD pillar
TCFD recommended disclosures
Cross-reference or reason for non-compliance
Next steps and further comments
Metrics and
targets
9) Disclose the metrics used by the
organisation to assess climate-related
risks in line with its strategy and risk
management process.
ESG Committee report (see pages 94 and 95)
Not compliant
– We have not yet considered the
integration of climate-related issues into remuneration
policies. We are also yet to disclose metrics and their
methodologies for historical periods. Metrics relating to
energy are also now being analysed and reported (see
page 25). Internal carbon prices have not yet been set.
We will explore additional climate-related
performance metrics during FY25.
10) Disclose scope 1, scope 2, and if
appropriate, scope 3 greenhouse gas
emissions, and the related risks.
ESG Committee report (see pages 94 and 95)
Compliant
We are committed to continually reducing our
scope 1, 2 and 3 greenhouse gas emissions. We
are also committed to disclosing our calculation
methodology.
11) Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
ESG Committee report (see pages 94 and 95)
Not compliant
– We are yet to disclose carbon emission,
intensity-based or other targets and provide a narrative
on our emissions reduction methodology.
We will disclose intensity-based carbon
reduction targets with timeframes against the
established baseline year. We will also disclose
the methodologies used to calculate our carbon
targets and measures. We aim to do this by the
end of FY25.
Our progress in TCFD
At Hyve, we recognise the critical importance of tackling climate change and future-
proofing our business to be more resilient. We see a huge opportunity to use our
events to lead the discussion on how major industries are addressing climate change
resilience and opportunities, as we collectively transition to net zero. We believe this is
where our influence and impact will be at their greatest.
We care about doing the right thing and, as such, we have developed our climate
disclosures in line with the 2021 guidelines of the TCFD for premium listed businesses.
By aligning with the TCFD recommendations, we have identified key climate-related
risks and opportunities facing our business. This will allow us to focus on mitigating
potential climate impacts, which helps us be more resilient, and to realise the value
of transitioning to a low-carbon economy.
We have reported across TCFD’s four supporting thematic pillars:
Governance;
Strategy;
Risk management; and
Metrics and targets.
We will continuously monitor our progress against these four pillars and are working
towards meeting the recommendations in full in line with the mandatory timeline.
This will require us to report full disclosures in our Annual Report for our financial year
ending in September 2023.
Governance
Our Board has overall accountability for managing the risks and opportunities
associated with climate change. The Risk Committee reports to the Board and is
responsible for evaluating and updating our overall risk register, ensuring it takes
into account potential climate-related impacts for the business.
On an annual basis, a select group of Hyve’s leadership team, comprising individuals
who have responsibility for sustainability, finance, operations, governance and
compliance, evaluates the likelihood and impact of current and emerging risks and
opportunities. The ESG Committee (see page 94) also reports to the Board and is
responsible for overseeing the implementation of climate change mitigation
measures as part of our ESG strategy.
Strategic report
Governance
Financial statements
29
Annual Report and Accounts 2022
Hyve Group plc
The senior and divisional leadership teams implement and operate the climate-
related mitigation measures across the business. Specifically, the Group
Communications and ESG Director, reporting to the CEO, is responsible for
overseeing the implementation of these mitigation measures, as well as the
fulfilment of the TCFD recommendations.
Strategy
We recognise we have a responsibility to play a role in protecting the environment by
addressing our carbon emissions across scopes 1, 2 and 3. This is a key component of
our ESG strategy, and the focus of our ‘Addressing Impact’ strategic pillar.
We aim to reduce our own carbon footprint while collaborating with the wider events
industry, as well as our exhibitors, visitors and suppliers. This will predominantly be
achieved through:
Promoting and facilitating sustainable travel;
Creating a sustainable supply chain;
Reducing controllable carbon emissions; and
Reducing waste.
Methodology
In 2022, working with sustainability consultancy Simply Sustainable, we conducted a
climate scenario analysis based on two possible climate futures, in order to assess
the climate resilience of our business strategy. The latest climate science was
reviewed to understand how climate change could impact our business on a global
basis. The chosen climate scenarios, known as Representative Concentration
Pathways (RCPs), as defined by the Intergovernmental Panel on Climate Change
(IPCC),
1
are detailed below.
Climate
scenarios
Cautious scenario
(RCP 4.5)
A predicted global temperature
increase between 1.7°C and 3.2°C,
in line with current trends, climate
change policies, pledges and
commitments.
Worst-case scenario
(RCP 8.5)
A global temperature increase
between 3.2°C and 5.4°C, where
carbon emissions continue
growing unmitigated.
We also considered climate change risks and opportunities over the following
geography and time horizons:
Geographical
scope
The four regions where we
operate the majority of our
events.
UK
South Africa
USA
Asia
Time horizons
Three periods of time to
analyse the evolution of
risks for our business.
Short term (2022 to 2030)
Medium term (2030 to 2040)
Long term (2040 to 2050)
Consistent with TCFD, we classify climate-related risks into two distinct categories.
Physical risks:
Direct damage resulting from climate change phenomena. These
can be event-driven (acute) or long-term shifts (chronic) in climate patterns.
Transition risks:
Policy and legal, technological, market and reputational impacts
associated with the implementation of measures to reach a low-carbon economy.
Simultaneously, we also analysed climate-related opportunities that could add value
to our business.
A sample of the risks and opportunities identified is summarised below.
TCFD physical risk
category
Identified climate risks
Business impact
Acute
Natural disasters or
extreme weather incidents
(e.g. temperature increases
and droughts could impact
our Las Vegas events).
Transport or event venues may
become unavailable, impacting
visitor numbers. Employees might
be unable to access our offices
or systems, resulting in business
disruption.
Chronic
Sea-level rise or extreme
weather seasons (e.g.
flooding could affect our
coastal events such as
those in Cape Town).
Cities or regions could be
unavailable to host events,
requiring new venues and
markets to be identified.
1
Representative Concentration Pathways (RCPs) are a method to set different scenarios under economic, social and physical assumptions that might occur as a result of climate change. The RCPs compare projected global carbon
emissions with pre-industrial levels and anticipate the effects on global warming from now until the end of the century.
Environmental, social and governance strategy
continued
30
Hyve Group plc
Annual Report and Accounts 2022
TCFD transition risk
category
Identified climate risks
Business impact
Policy and legal
Higher carbon taxes
associated with operating
our business.
Operating costs could increase
with the introduction of carbon
taxes and potential fines, resulting
in reduced annual profit.
Market
Lack of employee
participation or awareness
of low-carbon and
green skills, training and
education.
Employee recruitment and
retention may be impacted,
resulting in impacts on productivity
and, potentially, growth of the
business.
Reputation
Reduced attractiveness to
investors as low-carbon
businesses and events
become increasingly
important.
Reputation could be damaged
and, as a result, capital financing
and investment may decrease.
TCFD opportunity category
Identified climate opportunity
Business impact
Markets
Strengthening our
reputation as a responsible
and low-carbon business.
Cementing our reputation as
the organiser of market-leading
events and growing customer
market share through becoming
the ‘sustainable choice’.
Products and
Services
Offering meetings with
certified sustainable
suppliers.
Increased revenue opportunities,
and customers can improve the
sustainability of their supply chain.
Risk management
At Hyve, we continually review and improve our risk management processes. From
2022 we identified climate-related risks, following TCFD guidelines and supervised
by the financial management team and the ESG Committee.
We developed a tailored TCFD risk and opportunities register to assess the impact
and likelihood of each climate-related financial risk to the business. Within the
register, we identify current and future mitigation measures and controls for each risk,
ensuring these are monitored over time.
Starting in FY23, our Risk Committee will review the climate-related financial risks and
opportunities. These will assess the current risks against emerging climate science, as
well as broader market and legislative changes, managing them as part of our global
risk control measures.
Metrics and targets
As part of our ESG strategy, we are committed to robustly measuring and
reducing our carbon footprint. To transition to a low-carbon future, we are working
collaboratively with our teams to enhance accountability for our carbon emissions,
such as setting individual ESG targets to support the delivery of our ESG strategy.
In 2022, we measured our full scope 1, 2 and 3 greenhouse gas emissions (see page
25). We will continue to monitor our carbon footprint and improve the accuracy of our
reporting with each year. We also recognise the importance of the transition to net
zero, and by 2025 we will commit to the Science Based Targets initiative (SBTi). This
will strengthen our resilience against climate change and enhance our competitive
market positioning through transparent and performance-led reporting.
Where next?
We know that calculating our carbon footprint will provide us with the necessary
information to develop strategic actions to drive our net-zero journey. We are
committed to reporting greenhouse gas emissions, establishing carbon reduction
targets and, ultimately, building a roadmap to decarbonise our operations.
Strategic report
Governance
Financial statements
31
Annual Report and Accounts 2022
Hyve Group plc
We use a range of financial and non-financial metrics to measure our performance both internally with our people (through monthly employee engagement surveys) and
externally with our customers (through NPS scores and relationship management). This information sits alongside metrics relevant to our financial strength, engagement and
impact on society and the wider environment. We aim to comply with the non-financial reporting requirements contained in sections 414CA and 414CB of the Companies Act
2006. The table below, and the information it refers to, is intended to help stakeholders understand our position on key non-financial matters. The information required to
be contained in the non-financial reporting statement pursuant to the Companies Act 2006 is set out below. Other relevant information about our business model and KPIs,
as well as our approach to governance review and risk management, are detailed elsewhere in this report.
Reporting requirement
Policies and standards which govern our approach
Where to find additional information
Environmental matters
During the year, the ESG Committee continued to implement and
monitor its ESG strategy, including making significant progress
with regard to measuring its carbon footprint.
The Company now
discloses information regarding environmental matters in line with
the TCFD requirements.
More information on our ESG strategy can be found on pages 22
to 26
We have included information about greenhouse gas emissions in
the section on ESG on page 25
The TCFD report can be found on pages 27 to 31
Employees
The Group’s Code of Conduct sets out what is expected from
every person working for, and with, our businesses anywhere in
the world. The code acts as an umbrella for the following policies:
Gifts and Hospitality, Whistleblowing, Anti-Bribery and Corruption,
Anti-Modern Slavery/Human Trafficking, Conflict of Interest,
Sanctions and Expenses
We have included a statement about our whistleblowing
arrangements in our Corporate governance report on page 80
Information about our employees can be found in the ‘Our People
and values’ section on pages 19 to 21, the Section 172(1) statement
on pages 62 to 68 and in the Directors’ report on pages 82 to 84
Human rights
Human Rights Policy
Modern Slavery Statement
Anti-Slavery and Human Trafficking Policy
Our approach to human rights is covered by our Code of Conduct.
Further information can be found in our Corporate governance
report on page 81 and on our website: hyve.group/Responsibility/
Human-Rights
We have included a statement about modern slavery in our
Corporate governance report on page 81
Our Modern Slavery Statement can be found on our website: hyve.
group/Responsibility/Modern-Slavery-Statement
Social matters
As stated above, the Group continued to implement and monitor its
ESG strategy.
Diversity and Inclusion Policy
More information on our ESG strategy can be found on pages 22
to 26
Information on our social responsibility can be found on our
website: hyve.group/Responsibility/Social-Responsibility
Anti-corruption and anti-bribery
Anti-Corruption Policy
Gifts and Entertainment Policy
We have included a statement about our Anti-Corruption Policy in
our Corporate governance report on page 81
Further information can be found on our website: hyve.group/
Responsibility/Anti-Corruption
Description of principal risks and impact of business activity
See pages 50 to 58 of this report
Description of business model
See pages 15 to 18 of this report
Non-financial KPIs
See pages 59 to 61 of this report
Non-financial information
32
Hyve Group plc
Annual Report and Accounts 2022
Faster than anticipated recovery
The pace of recovery in FY22, in
particular the acceleration seen in the
second half, gives us confidence going
into FY23, while the debt refinancing
since the year end gives us the financial
stability to pursue our growth plans.
We successfully ran a full schedule of
events outside of China. In total 29
(2021: 14) in-person events took place,
excluding those that ran in the year
prior to the disposals of Russia, Ukraine
and Turkey. Total revenue for the year
from continuing operations was £122m
(2021: £22m), illustrating the extent of
the recovery seen in the last 12 months.
Full year revenues in FY22 recovered to
c.85%
1
of pre-pandemic levels, despite
there being no revenue from Chinese
events in the year and disruption in the
first half due to the emergence of the
Omicron COVID-19 variant. Despite this
disruption which resulted in a number
of event postponements, revenue
still delivered 70%
1
of pre-pandemic
levels in the first six months of the year.
Since then, the extent and speed of the
recovery has accelerated, outstripping
expectations such that revenues in the
second half fully recovered to their
pre-pandemic levels.
Chief Finance and Operations Officer’s statement
A faster
recovery than
expected
The speed of the recovery
has accelerated beyond
expectations, at a scale
greater than anticipated
John Gulliver
CFOO
100%
revenue recovery
achieved across
events that ran in
the second half
of FY22
1
Recovery is assessed with reference to pro forma FY19 revenues. The FY19 revenues have been adjusted to
include the FY19 results of acquisitions made since September 2019 and to exclude the FY19 results of businesses
that have since been disposed of. The FY22 revenues are after excluding discontinued operations in respect of
Russia, Ukraine and Turkey.
Strategic report
Governance
Financial statements
Annual Report and Accounts 2022
Hyve Group plc
33
Chief Finance and Operations Officer’s statement
continued
Refinancing provides financial
stability
In October 2022, subsequent to the
year end, we repaid our existing debt
facilities and refinanced the Group’s
debt with new facilities totalling £135m,
split between a term loan of £115m
and a revolving credit facility of £20m.
With the previous facility due to expire
in December 2023, this provides
significant additional financial security
for the Group until October 2026.
The completion of the refinancing was
a notable achievement at a time when
debt markets are volatile, there are
significant macroeconomic headwinds
and the business is still recovering from
the effects of the COVID-19 pandemic.
In light of this, the rate of interest payable
has increased, to 7.5-8.0% over SONIA on
the term loan and 2.5-3.5% over SONIA
on the revolving credit facility, but the
facility provides the financial stability to
allow us to deliver our growth plans for
the Group.
The debt facilities are subject to
financial covenants, with a monthly £21m
minimum liquidity covenant in place
until August 2023, which is replaced by
a quarterly leverage ratio covenant
thereafter. The leverage ratio is based
on a net debt to EBITDA ratio for the
preceding 12-month period, starting at
4.4x in September 2023 and falling to
4.2x in December 2023 and 3.0x from
March 2024.
Disposals have streamlined the
event portfolio
Throughout FY22 we have continued
our focus on managing the portfolio of
events we run. This has been accelerated
by geopolitical events during the year,
not least the Russian invasion of Ukraine.
During the year, we completed the
disposals of our businesses in Russia,
Ukraine and Indonesia, sold our ABEC
Indian business and subsequent to year
end sold our Turkish business.
This leaves us with a streamlined
portfolio of 33 events, primarily in
advanced economies and in markets
that are less exposed to geopolitical
volatility. This largely completes the
portfolio management plans set out
at the inception of the Group’s
Transformation and Growth (TAG)
programme back in 2017 and leaves
the business with a strong portfolio
of market-leading products that are
well positioned to continue the post-
COVID-19 recovery and deliver the
Group’s growth plans.
The focus is now on maximising
growth potential
The Group’s products have significant
growth potential, which we are
committed to delivering in the coming
years. Plans are well underway to roll
out meetings programmes at a number
of our key events in FY23 following
successful trials in FY22. We are investing
significantly in these events to cement
their market-leading status and increase
return on investment for our customers.
While FY22 has largely been about
securing the recovery and executing the
acquisitions and disposals, a number of
growth initiatives were launched in the
year. Expansion opportunities into new
sectors were identified, with Ahead by
Bett launched alongside Bett UK in
March 2022 and Green Energy Africa
Summit running as part of Africa Oil
Week post year end. Satellite events
have been reintroduced, such as Bett
Asia, which relocated to Thailand and
returned in October 2022.
We also continued to explore launch
opportunities, particularly where there
is significant demand for brand
extensions into different sectors, formats
or geographies. In FY22 Shoptalk Europe
was successfully launched in London,
and the second edition of the event
is scheduled for Barcelona in FY23.
Following the success of the acquired
virtual Fintech Meetup event in March
2022, demand for an in-person event in
FY23 has led to the planned launch being
scheduled for March 2023 in Las Vegas.
These growth initiatives, in addition to
further investments in FY23, provide a
strong platform for organic growth.
While planned investments into the
growth initiatives will have a short-term
impact on operating profit margins, the
increased scale and breadth this will
bring to our portfolio of products will
have a positive impact on profitability
and margins in the mid to long term.
Outlook
FY22 represented another significant step
forward on the road to recovery and
this continues apace as we enter FY23.
Forward bookings for the year are now
£98m, compared with £67m this time
last year across the same portfolio
of events, and customer like-for-like
spend continues to increase. We remain
conscious of challenges in the
macroeconomic environment globally,
in particular the threat of recession in a
number of our markets. We are seeing
resilience in customer bookings and
trading KPIs, and this gives us confidence
in the outlook for FY23.
John Gulliver
CFOO
34
Hyve Group plc
Annual Report and Accounts 2022
Financial review
Overview
Revenue
Revenue for the year from continuing
operations was £122.5m (2021: £21.8m),
after excluding the discontinued
operations of Russia, Ukraine and Turkey.
With the exception of China, where there
remains considerable disruption to event
schedules, the Group successfully ran
a full schedule of events in FY22, with
29 (2021: 14) in-person events taking place
in the year (excluding events in Russia,
Ukraine and Turkey) after COVID-19-
related restrictions were lifted in the
majority of the Group’s markets by the
end of FY21.
The pace of in-person event recovery
accelerated throughout the financial
year. Despite disruption caused by the
Omicron variant in the first half of the
year, revenues when compared with FY19
pro-forma revenues were 70%
1
in the first
half. This increased in the second half to
more than 100%
1
, excluding the Group’s
events in China
2
in the final quarter of the
financial year which did not take place
due to COVID-19-related restrictions.
Overall, the revenue delivered in FY22
represents c.85%
1
of FY19 revenues on
a pro-forma basis, or more than 90%
1
excluding China
2
. A number of the
Group’s largest events outperformed
their pre-COVID-19 editions, including
Shoptalk and Groceryshop in the US,
Mining Indaba in South Africa and
Breakbulk Europe in the Netherlands.
The Group also ran 14 tech-enabled
programmes in FY22, including its first
Fintech Meetup event and seven
121 Mining Investment programmes
following the acquisition of the businesses
in November 2021 and March 2022
respectively.
Loss before tax
The Group reported a loss before tax
from continuing operations of £31.0m
(2021: £27.5m), after including adjusting
items of £42.4m (2021: £41.4m).
Headline profit before tax
3
is an
alternative performance measure used
by the Group to measure underlying
trading performance. After excluding
adjusting items, headline profit before tax
from continuing operations was £11.5m
(2021: £13.9m). Excluding the impact of
insurance proceeds received of £19.3m
(2021: £65.0m), the Group’s headline
profits would have increased by £43.3m,
which reflects the strong recovery of the
Group’s events.
Earnings per share (EPS)
Basic and diluted EPS from continuing
operations were (8.6)p (2021: (8.3p)).
Headline diluted EPS
3
from continuing
operations was 4.2p (2021: 4.9p),
primarily reflecting the reduced
insurance proceeds received in the
year. Please refer to note 11 to the
consolidated accounts.
Financing and liquidity
Adjusted net debt
3
at the year end has
decreased to £71.0m (2021: £79.9m),
with the Group delivering a positive
operating cash flow even when excluding
the impact of insurance proceeds. Net
operating cash inflows of £26.3m (2021:
£27.2m) and the net proceeds from the
share placement and share subscription
of £28.1m, were partially offset by the
initial and deferred consideration paid for
the acquisitions of 121 Group and Fintech
Meetup of £34.2m.
Net debt
3
, including the Group’s lease
liabilities, was £86.3m (2020: £96.6m).
At 30 September 2022, £101.0m (2021:
£124.4m) of a total available £201.0m
(2021: £212.8m) was drawn on the Group’s
banking facility. Bank loans presented in
the statement of financial position are
£99.1m (2021: £121.6m), net of £1.9m (2021:
£2.8m) of capitalised borrowing costs.
At 30 September 2022, the Group’s
banking facilities comprised a £150.0m
(2021: £150.0m) revolving credit facility
and a term loan of £51.0m (2021: £62.8m).
During the year, the Group repaid £11.8m
on its term loan. As at 30 September
2022, there were further scheduled
repayments of the term loan of £6.0m in
November 2022, £22.5m in November
2023 and a final repayment of £22.5m
on the termination date.
In November 2021 we extended the
previously obtained leverage ratio and
interest cover covenant waivers from
March 2022 to March 2023, with a
minimum liquidity level of £40.0m
required at the end of each month.
At 30 September 2022 the Group had
cash and undrawn facilities of £129.6m
(2021: £130.1m) and therefore had
headroom of £89.6m in respect of
the minimum liquidity test.
In October 2022, the Group completed
the refinancing of its debt facilities.
The new facilities, totalling £135.0m,
comprise a £115.0m term loan and
£20.0m revolving credit facility. The
£101.0m that was drawn on the previous
facility was repaid in full on 20 October
2022, with the new term loan of £115.0m
being fully drawn on the same date.
Under the new facilities a minimum
liquidity covenant of £21.0m is in place
up to and including August 2023.
Thereafter, a leverage ratio applies,
flatlining at 3x. Please refer to note 20
to the consolidated accounts.
1
Recovery is assessed with reference to pro forma
FY19 revenues. The FY19 revenues have been
adjusted to include the FY19 results of acquisitions
made since September 2019 and to exclude the
FY19 results of businesses that have since been
disposed of. The FY22 revenues are after excluding
discontinued operations in respect of Russia,
Ukraine and Turkey.
2 As no events were able to run in China in the year,
FY22 China revenues were £nil. The FY19 revenues
for China have been removed to show the recovery
level of events that were able to run during the year.
3 As defined in the Glossary on pages 209 to 212.
Headline reconciliation
In addition to the statutory results,
headline results are presented, which
are the statutory results after excluding
a number of adjusting items, as the
Board considers this to be the most
appropriate way to measure the Group’s
performance. In addition to providing
a more comparable set of results
year-on-year, this is also in line with
similar adjusted measures used by our
peer companies and therefore facilitates
comparison across the industry.
The adjusting items presented are
consistent with those disclosed in the
previous year. The adjusting items have
been presented separately in order to
report what the Board considers to be the
most appropriate measure of underlying
performance of the Group and to provide
additional information to users of the
annual report.
Strategic report
Governance
Financial statements
35
Annual Report and Accounts 2022
Hyve Group plc
Chief Finance and Operations Officer’s statement
continued
£(28.8)m
2021 (restated
1
):
£(27.8)m
2022
Headline profit before
tax from continuing
operations
Operating items
Amortisation of acquired
intangible assets
Definition
Explanation
Why adjusted?
Amortisation charge in respect of intangible assets
acquired through business combinations.
The charge has increased in the period as a result
of the recognition of acquired intangible assets in
respect of the acquisitions of 121 Group and Fintech
Meetup in the year, which increases the net book
value of intangible assets being amortised.
To present the profitability of the business such
that performance can be appraised consistently,
whether from organic growth or through
acquisition, and irrespective of whether or not
acquired intangible assets have subsequently
become fully amortised.
Reconciliation of headline profit before tax from continuing
operations to statutory loss before tax from continuing operations
£11.5m
2021 (restated
1
):
£13.9m
1
Results for the year ended 30 September 2021 have been restated for the treatment of the Russian, Ukrainian and Turkish businesses as discontinued operations as disclosed in note 17. All subsequent references to
restatements throughout these results refer to the restatements for the prior period error disclosed in note 1 and the treatment of discontinued operations disclosed in note 17.
36
Hyve Group plc
Annual Report and Accounts 2022
£(2.9)m
2021 (restated
1
):
£(19.0)m
£4.0m
2021 (restated
1
):
£0.2m
2022
Impairment of assets
Profit on disposal
Definition
Explanation
Why adjusted?
The profit or loss recognised following the
disposal of part of the business, represented by
the difference between the fair value of proceeds
received net of related selling expenses and the
disposed of net assets.
The profit on disposal in the year relates to the
disposals of ABEC and the Group’s 50% interest
in Debindo.
The losses recognised in the year in respect
of the disposals of the Russian and Ukrainian
businesses are included within the Group’s
results from discontinued operations –
see note 17 to the consolidated accounts.
To exclude the non-recurring profit/loss from a
disposal completed during the year, from which
no future profit or loss will be recognised. This
increases the comparability of the results year-
on-year.
Writedown of assets to fair value, where indicators
of impairment have existed or following the
completion of the annual impairment review.
Impairment charges of £2.9m have been
recognised in respect of goodwill in relation to
Fin-mark Srl (£2.1m) and deferred consideration
receivable in relation to the disposal of ITE Expo
LLC (£0.8m).
In the prior year, impairment charges of £18.3m
were recognised in respect of acquired intangible
assets within the UK CGU as a result of downgrades
to forecast trading due to the continuing impact of
COVID-19 on our UK-retail events, as well as the
allocation of additional central costs following
revisions to the cost allocation methodology.
To exclude write-offs specific to circumstances
that arose either in the current year or based on
future performance expectations. These are often
inconsistent in origin and amount year-on-year,
and therefore the business performance is more
comparable year-on-year without these charges.
Strategic report
Governance
Financial statements
37
Annual Report and Accounts 2022
Hyve Group plc
£(3.3)m
2021 (restated
1
):
£(0.7)m
Chief Finance and Operations Officer’s statement
continued
£0.2m
2021 (restated
1
):
£(0.5)m
2022
Transaction costs on
completed, pending or
aborted acquisitions
and disposals
Tax on income from
joint ventures
Definition
Explanation
Why adjusted?
The tax credit/(charge) in respect of the share of
profits recognised from joint ventures.
The tax credit in the period is directly linked to the
share of profits recognised from joint ventures in
the year. The movement in the year reflects that the
Sinostar joint venture was loss-making in the year
due to the cancellation of the ChinaCoat event.
Statutory reported profits from joint ventures are
presented post-tax. In order to present a measure
of profit before tax for the Group that is purely
pre-tax, the tax on joint venture profits is added
back. Instead, it is included in the headline post-
tax measure of profit and therefore is applied
consistently with the statutory measure of post-
tax profit.
Costs incurred that are directly attributable to
acquisitions or disposals, whether completed,
still being actively pursued or no longer
being considered.
Transaction costs on completed and pending
acquisitions and disposals relate principally to the
acquisition of 121 Group in November 2021 and
the acquisition of Fintech Meetup in March 2022.
The most significant of these costs are professional
and consultancy fees incurred in relation to the due
diligence and legal procedures necessary for the
completion of the deals.
In the previous year the costs recognised
primarily related to the acquisition of Retail
Meetup completed in December 2020.
While transaction costs are typically incurred each
year due to the acquisitive nature of the industry
and the Group’s focus on actively managing the
existing portfolio of events while making selective
product-led acquisitions, the costs incurred are not
consistent year-to-year, fluctuating significantly
based on the number and size of deals. Costs
incurred in relation to an acquisition, while often
commensurate to the size of the business being
acquired, are more closely connected to the
consideration payments than the performance
of the business in the period. Excluding the costs
increases comparability of performance each year.
38
Hyve Group plc
Annual Report and Accounts 2022
£(11.7)m
2021 (restated
1
):
£6.4m
2022
Financing items
Revaluation of liabilities on
completed acquisitions
and disposals
Definition
Explanation
Why adjusted?
The revaluation of future earn-out
payments in respect of completed
acquisitions recognised through
profit or loss.
A number of the Group’s acquisitions and disposals completed in recent
years have future earn-out commitments through deferred or contingent
consideration payments. These are held on the statement of financial
position at fair value and therefore change based on the latest foreign
exchange rates, the proximity of the settlement date and the latest
expectation of the settlement value.
The revaluation of assets and liabilities on completed acquisitions and
disposals includes the imputed interest credit on the unwinding of the
discount on the Group’s deferred consideration receivable of £1.7m and a
loss on the revaluation of the deferred consideration receivable of £1.1m,
primarily in respect of the disposal of the Group’s Central Asian event
portfolios. Also included is the interest expense on the unwinding of the
discount on the Group’s deferred consideration payable of £5.5m and a
loss on the revaluation of the deferred consideration payable of £6.8m,
in respect of the earn-out payments for 121 Group and Fintech Meetup.
In the prior year, revaluation of assets and liabilities on completed
acquisitions and disposals included the gains from the revaluation of our
equity options over non-controlling interests in our subsidiaries (credit of
£8.8m), in relation to the then remaining 40% interest in ABEC; the imputed
interest credit on the unwinding of the discount on the Group’s deferred
consideration receivable in relation to the disposals of ITE Expo LLC and
its Central Asia event portfolios (credit of £1.6m); a loss on the revaluation
of the ITE Expo LLC and Central Asia deferred consideration receivable
(charge of £2.7m); and a loss on the revaluation of the deferred
consideration payable for Retail Meetup (charge of £1.3m).
To exclude write-offs specific to
circumstances that arose either in
the current year or based on future
performance expectations. These
are often inconsistent in origin and
amount year-on-year and therefore
the business performance is more
comparable year-on-year without
these charges. As with transaction
costs, the adjustment is in order to
present results excluding deal-related
costs that fluctuate year-to-year.
While the costs vary based on the latest
expectations of future consideration
payments, often linked to performance,
the outflows themselves are reflective
of the cost of the acquisition rather
than performance of the business in
the year. Excluding the costs therefore
aids comparability of the Group’s
performance year-on-year.
£(31.0)m
2021 (restated
1
):
£(27.5)m
Loss before tax
from continuing
operations
Strategic report
Governance
Financial statements
39
Annual Report and Accounts 2022
Hyve Group plc
Chief Finance and Operations Officer’s statement
continued
Consolidated income statement
Trading summary
A detailed analysis of volumes, revenues and profits/(losses) is presented below:
Square metres
sold
‘000
Revenue
£’m
Average yield
£ per SQM
Headline
profit/(loss)
before tax
(restated)
£’m
2021
Reported
211
55.2
262
20.8
Discontinued operations
(138)
(33.4)
(6.9)
2021
Continuing operations
73
21.8
299
13.9
COVID-19 cancellations
1
(29)
(4.0)
(4.5)
COVID-19 cancellation costs
2
–
–
7.7
Non-recurring
–
(2.0)
(1.2)
Disposals
(12)
(1.3)
1.3
Insurance proceeds
–
–
(65.0)
2021
Annually recurring
32
14.5
453
(47.8)
COVID-19 cancellations
3
127
77.8
32.1
Acquisitions
–
10.0
2.6
Launches
3
7.8
(0.1)
Foreign exchange
–
2.3
3.1
Like-for-like growth
10
6.9
4.1
2022
Annually recurring
172
119.3
694
(6.0)
COVID-19 cancellation costs
4
–
–
(3.5)
Biennial
17
3.2
1.7
Insurance proceeds
–
–
19.3
2022
Continuing operations
189
122.5
648
11.5
1
Represents the prior period performance of events that were postponed or cancelled in the current period as a result of COVID-19.
2
Represents the costs incurred in the prior period in respect of the events that were cancelled in the prior period as a result of COVID-19.
3 Represents the current period performance of events that were postponed or cancelled in the prior period as a result of COVID-19.
4 Represents the costs incurred in the current period in respect of the events that were cancelled in the current period as a result of COVID-19.
40
Hyve Group plc
Annual Report and Accounts 2022
Segmental results
£’m
Revenue
Headline profit/(loss) before tax
2022
2021
(restated)
2022
2021
(restated)
EdTech & Natural Resources
32.7
1.0
1.0
(7.9)
Retail, Manufacturing &
Engineering
39.0
10.1
5.8
(7.0)
RetailTech & FinTech
45.0
6.6
9.3
(6.2)
Asia
5.8
4.1
(2.1)
(7.5)
Other income
–
–
19.6
66.1
Central costs
–
–
(16.9)
(15.2)
Foreign exchange gain/(loss)
–
–
2.7
(0.3)
Net finance costs
–
–
(7.9)
(8.1)
Total – continuing operations
122.5
21.8
11.5
13.9
During the year, the Group has made changes to its reportable segments. The Global
Communities segment was divided into three new operating segments, reflecting the
new management structure in place for these businesses. The three new operating
segments are: EdTech & Natural Resources; Retail, Manufacturing & Engineering; and
RetailTech & FinTech.
Following the Group’s disposal of its Russian and Ukrainian businesses during the year
and its disposal of the Turkish business subsequent to the year ended 30 September
2022, the Russian, Ukrainian and Turkish businesses are treated as discontinued
operations in both the current and comparative periods. The Ukrainian and Turkish
businesses together comprised the Eastern & Southern Europe division.
Refer to the Divisional trading summary (pages 44 to 49) for commentary on the
performance of each operating segment.
Other income includes insurance proceeds of £19.3m (2021: £65.0m), which were
received in relation to claims regarding the cancellation or postponement of a number
of events that were scheduled to take place during FY20 and FY21.
Central costs include all costs that are not allocated to the Group’s operating segments
when headline profit before tax is reported to the Executive Team for the purposes
of allocating resource and making strategic decisions. These include the Group’s
corporate overheads, which are the costs of running the head office in London and
are primarily comprised of staff costs, which include the Group’s executive and
non-executive directors, depreciation of the Group’s centrally held assets and
professional fees.
Net finance costs include the interest cost on the Group’s borrowings of £5.7m (2021:
£5.2m), which has increased in the year due to rising interest rates. Net finance costs
also include bank charges of £1.9m (2021: £2.4m) and the interest cost on the Group’s
lease liabilities of £0.6m (2021: £0.7m).
Foreign exchange
As a result of the territories in which we operate, we are exposed to changes in foreign
exchange (FX) rates. Significant movements, particularly in the US dollar, can have a
material impact on our results.
Further detail is provided on the impact of translational FX, which is included within the
results of each division and only adjusted for when considering like-for-like measures
of revenue or profit, transactional FX, which is presented separately in the income
statement and is a gain of £2.7m in the year (2021: loss of £0.3m), and the impact on
reserves recognised in the foreign currency translation reserve below.
Translational FX
Each month our subsidiary company results are translated into sterling from the
functional currencies of the subsidiary companies on consolidation, using the
prevailing foreign exchange rates for the month. Changes in foreign exchange rates
result in fluctuations of the level of profits reported for the Group. The impact of the
changes in foreign exchange rates is included within both the statutory and adjusted
reported results, within the relevant lines in the consolidated income statement.
To aid comparability of trading results, when presenting like-for-like performance
we adjust for the impact of changes in foreign exchange rates on translation.
The US dollar was stronger against sterling compared with the comparative period,
meaning the reported revenues from events in the US which took place in both periods
were higher in FY22 than FY21 by £2.3m. The impact of the strengthening dollar at a
headline profit level was £0.1m due to the costs incurred in running these events and
the Group’s US-based businesses.
Transactional FX
As well as translational foreign exchange movements arising on consolidation, the
Group results are impacted by changes in foreign exchange rates within our subsidiary
company results. Where monetary transactions are entered into in different currencies
than the functional currency of the entity, this gives rise to revaluation gains and losses
following changes in exchange rates between the transaction date, month end and
settlement date. Each revaluation of the monetary assets and liabilities held on the
statement of financial position results in gains and losses, which are reported within
the consolidated income statement within the ‘Foreign exchange gain on operating
activities’ line.
Strategic report
Governance
Financial statements
41
Annual Report and Accounts 2022
Hyve Group plc
Chief Finance and Operations Officer’s statement
continued
The strengthening of the US dollar relative to the pound has contributed to a gain of
£2.7m (2021: loss of £0.3m) recognised in the year, which has arisen on the revaluation
of foreign currency monetary assets and liabilities held in our subsidiary companies.
Foreign currency translation reserve
Finally, our results are impacted by the translation of the subsidiary company
statements of financial position each month on consolidation into sterling. A change in
foreign exchange rates gives rise to a movement which is recognised within reserves
in the foreign currency translation reserve. This is on translation of the company
statements of financial position of our subsidiary companies, which are reported in
their functional currencies before being translated into sterling on consolidation, at the
prevailing period end rates.
The foreign currency translation reserve decreased by £60.5m (2021: increased by
£1.3m), largely due to the release of amounts previously recognised in the reserve in
respect of the Russia, Ukraine and ABEC businesses which were disposed of in the year.
Acquisitions and disposals
On 26 November 2021, the Group completed the acquisition of 100% of the share
capital of 121 Group (HK) Limited and 121 Partners Limited (121 Group) for initial cash
consideration of £22.9m and deferred contingent consideration with a fair value at
acquisition of £24.4m based on the financial performance of 121 Group over a three-
year period. The first deferred consideration payment of £7.1m was made in July 2022
and there are two further earn-out payments due in FY23 and FY24. The fair value
of the deferred contingent consideration at 30 September 2022 was £25.6m after
revaluing the liability for the latest forecasts for 121 Group, changes in foreign
exchange rates and the unwind of the discount recognised in respect of the liability.
The revaluation of £2.0m and the unwind of the discount of £2.9m have been
recognised through profit or loss. The foreign exchange movements of £3.5m have
been recognised in the foreign currency translation reserve.
On 11 March 2022, the Group completed the acquisition of 100% of the share capital
of Fintech Meetup, LLC for initial consideration of £4.2m and deferred contingent
consideration with a fair value at acquisition of £19.9m based on the financial
performance of Fintech Meetup over a three-year period. The fair value of the deferred
contingent consideration at 30 September 2022 was £32.1m after revaluing the liability
for the latest forecasts for Fintech Meetup, changes in foreign exchange rates and the
unwind of the discount recognised in respect of the liability. The revaluation of £4.8m
and the unwind of the discount of £2.6m have been recognised through profit or loss.
The foreign exchange movements of £4.8m have been recognised in the foreign
currency translation reserve.
As a key part of its strategy, Hyve is focused on running market-leading events in
advanced economies and continues to actively manage its portfolio to align with
this strategy.
On 12 November 2021 the Group completed the disposal of its shareholding in ABEC,
a 60% owned subsidiary. The Group received upfront consideration of £1.0m in respect
of the disposal.
On 13 May 2022 the Group completed the disposal of its Russian business to Rise
Expo Limited for cash consideration of up to £72m, wholly structured as earn-out
consideration payable over a 10-year period, with an additional value of approximately
£10m retained from the Russian business prior to the completion of the sale. Given the
jurisdictions in which the Russian business operates, the evolving sanctions landscape
and the consideration payments being contingent on the performance of the business,
there is a risk that the value realised is less than £72m or that minimal consideration is
received. Reflecting this risk, a fair value of £nil has been reported for the consideration
receivable at both the disposal date and at 30 September 2022. Refer to Note 17 to the
Consolidated Accounts for further details.
On 23 June 2022 the Group completed the disposal of its 50% interest in its Indonesian
joint venture Debindo for upfront consideration of £0.5m and future contingent
consideration with a fair value of £0.5m at the disposal date. The carrying value of
the Group’s investment in Debindo was £nil at the disposal date having previously
been fully impaired.
On 8 August 2022 the Group completed the disposal of its Ukrainian business to
ProExpo (Europe) Limited, in a management buy-out led by Anatoly Sushon, the
managing director of the Ukrainian business, for cash consideration of up to £3m,
wholly structured as earn-out consideration payable over a seven-year period. At a
time when due to the ongoing conflict in Ukraine no events can be held, the Group has
agreed to support the Ukrainian business with funding of up to £1.2m to be repaid by
2027, dependent on future profitability. The fair value of the future consideration at the
disposal date, net of the funding to be provided to the Ukrainian business, was £0.5m.
In October, subsequent to the year end, the Group completed the disposal of its Turkish
business for consideration of up to £7.9m to ICA (JV) Limited. The Group has received
consideration of £2m on completion, less customary working capital adjustments, and
between £4m and £6m of deferred consideration is payable over the six-year period
until December 2028 based on the profitability of the Turkish business. The assets and
liabilities of the Turkish business are classified as held for sale at 30 September 2022.
42
Hyve Group plc
Annual Report and Accounts 2022
Consolidated statement of financial position
The Group’s consolidated statement of financial position at 30 September 2022 is
summarised in the table below:
30 September
2022
£m
30 September
2021
£m
Goodwill and other intangible assets
336.8
274.4
Interests in joint ventures
33.2
37.1
Other non-current assets
35.5
30.3
Total non-current assets
405.5
341.8
Trade receivables
27.5
20.3
Cash and cash equivalents
28.1
41.7
Other current assets
18.5
17.1
Total current assets
74.1
79.1
Deferred income
(58.0)
(72.3)
Bank loan
(99.1)
(121.6)
Other liabilities
(133.4)
(70.4)
Total liabilities
(290.5)
(264.3)
Share capital and share premium
214.9
186.8
Translation reserve
6.6
(53.9)
Other reserves
(34.9)
21.5
Non-controlling interests
2.5
2.2
Total equity
189.1
156.6
Total non-current assets
Goodwill and intangible assets totalling £72.7m have been recognised in the year in
respect of the acquisitions of 121 Group and Fintech Meetup. This is partially offset by
the annual amortisation charge on intangible assets of £28.8m (2021: £29.0m) and the
disposal of £18.3m of goodwill and a £2.9m joint venture investment held in respect of
the Russian business.
Total current assets
The increase in trade debtors in the period reflects the strength of the Group’s forward
bookings on future events, partially offset by the disposal of trade debtors held by the
Russian business.
Cash balances decreased to £28.1m (2021: £41.7m). While net operating cash inflows
of £26.3m (2021: £27.2m) and the net proceeds raised from the share placement and
subscription of £28.1m, more than offset the initial and deferred cash consideration
paid for the acquisitions of 121 Group and Fintech Meetup of £34.2m, the Group
made net repayments of £23.4m (2021: net drawdowns of £2.4m) on its debt facility.
At 30 September 2022 assets of £3.0m are classified as held for sale in respect of the
Turkish business.
Total liabilities
The decrease in deferred income in the period reflects the disposal of deferred income
recognised in respect of the Russian business, partially offset by an increase in
contractually agreed forward bookings on the Group’s other retained businesses.
The bank loan balance of £99.1m (2021: £121.6m) has decreased, with repayments of
£25.4m (2021: £67.2m) exceeding drawdowns of £2.0m (2021: £69.6m).
Contingent consideration payable of £58.0m is recognised at 30 September 2022
in respect of the earn-out payments for the in-year acquisitions of 121 Group and
Fintech Meetup.
At 30 September 2022 liabilities of £2.9m are classified as held for sale in respect of the
Turkish business.
Total equity
The foreign currency translation reserve decreased by £60.5m (2021: increased by
£1.3m), largely due to the release of amounts previously recognised in the reserve in
respect of the Russia, Ukraine and ABEC businesses which were disposed of in the year.
The movement in other reserves is attributable to the loss for the period.
The NCI balance increased in the year due to dividends paid to the Group’s non-
controlling interests of £0.3m (2021: £0.7m), losses attributable to the Group’s non-
controlling interests of £0.7m (2021: profit of £0.9m), the disposal of the £1.0m non-
controlling interest relating to ABEC (2021: disposal of £0.9m non-controlling interest
relating to Fasteners) following the disposal of the business during the year, and foreign
currency translation reserve movements of £0.4m (2021: £nil).
Strategic report
Governance
Financial statements
43
Annual Report and Accounts 2022
Hyve Group plc
Divisional trading summary
EdTech & Natural Resources
Bett took place for the first time since the
beginning of the pandemic, and despite
the postponement of the event from
January to March due to Omicron,
demand for the event remained high and
the reduced space available in March was
fully sold out. Its satellite event in Brazil
took place in May and outperformed its
last pre-COVID-19 edition.
Mining Indaba was postponed from
February to May due to restrictions in
South Africa and therefore took place in
the second half of the financial year, but
delivered revenues in excess of its last
pre-COVID-19 edition. Africa Oil Week
was also impacted by local restrictions
but successfully relocated to Dubai in
November 2021.
Seven 121 Mining Investment programmes
have taken place since the acquisition of
121 Group in November 2021, with the
acquired business performing in line
with expectations. This included the first
co-located event with Mining Indaba since
Hyve’s acquisition of 121 Group, which
delivered over 1,800 meetings, making
it the largest programme delivered by
121 Group to date.
Revenue 2022
£32.7m
2021: £1.0m
change: +3170%
Headline profit/(loss) before tax 2022
£1.0m
2021: £(7.8)m
change: +113%
The EdTech & Natural Resources division includes
the Bett portfolio, Africa Oil Week, Mining Indaba
and the newly acquired 121 Group events.
Revenues and profits were significantly higher than
the comparative period, with the division running
a full schedule of events and benefiting from the
acquisition of 121 Group in November 2021.
121 Group
Bett
Africa Oil Week
Rachel Brodie
Divisional Managing
Director
44
Hyve Group plc
Annual Report and Accounts 2022
Retail, Manufacturing
& Engineering
Revenues were £28.9m higher than the
comparative period with the division
running close to a full schedule of events.
Only CWIEME Shanghai was unable to
take place due to ongoing restrictions
in China.
Spring Fair took place in February,
returning for the first time since the
pandemic, and performed well
despite the proximity of the event to
the emergence of the Omicron variant.
Autumn Fair and Glee took place in
June and September respectively
and significantly outperformed their
FY21 editions.
CWIEME Berlin and Breakbulk Europe
both returned in May and delivered
increases in like-for-like customer spend
compared with their previous editions,
and two other events from the Breakbulk
portfolio ran in Dubai and the US.
Revenue 2022
£39.0m
2021: £10.1m
change: +286%
Headline profit/(loss) before tax 2022
£5.8m
2021: £(6.7)m
change: +183%
The Retail, Manufacturing & Engineering division
comprises the manufacturing and engineering
portfolio (Breakbulk and CWIEME) and the UK
retail portfolio, including Spring and Autumn Fair,
Glee and the UK fashion events, Pure and Scoop.
Breakbulk
CWIEME
Glee
Rob Chillman
Interim Divisional
Managing Director
Rob Chillman took over as
Interim Divisional Managing
Director in December 2022.
Strategic report
Governance
Financial statements
45
Annual Report and Accounts 2022
Hyve Group plc
RetailTech & FinTech
Shoptalk and Groceryshop are two
US-based market-leading e-commerce
events focused on the retail and grocery
segments respectively. Shoptalk ran for
the first time under Hyve’s ownership in
March in Las Vegas and outperformed
its last pre-COVID-19 edition and
delivered the largest event by revenue
the Group has ever run. Groceryshop
took place in September, having run for
the first time under Hyve’s ownership in
September 2021, and reported revenue
more than 40% higher than its pre-
COVID-19 edition.
In addition, the Group launched the
geo-cloned Shoptalk Europe in June.
This inaugural event almost doubled
expectations, attracting over 3,000
attendees from more than 50 countries.
In March 2022 the Group acquired
Fintech Meetup LLC, the organiser of the
leading US-based fintech facilitated
meetings event. Following its 2021
maiden edition, revenue from Fintech
Meetup 2022 more than doubled, taking
place under the Group’s ownership in
March 2022. From 2023, Fintech Meetup
will also be launching an in-person event,
driven by customer demand, in addition
to its market-leading virtual format.
Revenue 2022
£45.0m
2021: £6.7m
change: +572%
Headline profit/(loss) before tax 2022
£9.3m
2021: £(6.2)m
change: +250%
The RetailTech & FinTech division comprises the
Shoptalk, Retail Meetup and Fintech Meetup
brands, which are new acquisitions with high
growth potential and reflect the Group’s strategy
to focus on omnichannel-ready industry sectors.
Shoptalk Europe
Divisional trading summary
continued
Shoptalk
Sophie Wawro
Global President –
RetailTech
Jon Lear
Global President –
FinTech
46
Hyve Group plc
Annual Report and Accounts 2022
Asia
Revenues for the Asia division were up
£1.7m from the comparative period,
but were significantly impacted by the
reintroduction of restrictions in China,
which prevented the Group’s events in
the country from running.
The impact of cancellations in China
was offset by a full schedule of events
running in India. This included Paperex,
the biennial paper event, which delivered
revenues in excess of its pre-COVID-19
edition. In November 2021 the Group
disposed of its 60% interest in ABEC, the
operating company for the Acetech
portfolio. Prior to the disposal, a
small Acetech event ran in Bangalore
in October.
A significant contributor to the division’s
results is the ChinaCoat event operated
by our 50% owned joint venture partner,
Sinostar. The event was unable to run
in the year due to the restrictions in
China, and therefore the joint venture
contributed a loss of £1.0m (2021: profit
of £1.9m) to headline profit before tax.
The event is next scheduled to take place
in February 2023.
The Asia division comprises our businesses in India
and China as well as our joint venture partnership
Sinostar in China.
Revenue 2022
£5.8m
2021: £4.1m
change: +41%
Headline loss before tax 2022
£(2.1)m
2021: £(7.5)m
change: 72%
Paperex
Bett Asia
Tom Whelan
Divisional Director
Asia
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Financial statements
47
Annual Report and Accounts 2022
Hyve Group plc
Divisional trading summary
continued
Discontinued operations
Russia
Prior to the completion of its disposal in
May 2022, the Russian business delivered
revenues of £36.0m (2021: £27.3m) and
profits of £15.2m (2021: £7.7m), driven by
the return of YugAgro, which had been
unable to take place in the comparative
period due to regional restrictions in
place in Krasnodar, and the growth of
other large events such as Mosbuild.
Prior to the conflict with Ukraine, the
region’s events were trading well and
delivering a strong recovery from the
pandemic, but the impact of sanctions
on Western participation was felt in the
months leading up to the disposal date,
particularly in respect of events with
significant international customers. In
total, 13 (2021: 11) Russian events took
place in the period.
Ukraine
The Ukrainian business delivered
revenues of £1.2m (2021: £2.9m) and a
loss of £0.7m (2021: £0.2m) before its
disposal in July 2022. Five events took
place in Ukraine prior to the beginning
of the conflict with Russia. This included
three events which ran for the second
time since the pandemic and
outperformed their previous editions.
From March 2022 onwards, all events in
the region were postponed.
Turkey
The Turkish business delivered revenues
of £7.7m (2021: £3.2m) and profits of
£1.2m (2021: loss of £0.7m), with a full
schedule of events taking place in the
period. TurkeyBuild and EMITT were both
able to take place in the period after
being cancelled in the previous year,
as was the biennial event Eurasia Rail.
Worldfood Istanbul, the portfolio’s largest
event, delivered significant growth
compared with its previous edition.
Revenue 2022
£44.8m
2021: £33.4m
change: +34%
Headline profit before tax 2022
£15.8m
2021: £6.1m
change: +139%
The Group’s discontinued operations comprise the
2022 and 2021 results of its Russian and Ukrainian
businesses, which were disposed of during the
financial year, and its Turkish business, which was
disposed of subsequent to the period end, but was
classified as held for sale at 30 September 2022.
The Group’s results from discontinued operations
for 2021 also includes the results of the Kazakhstan
business, which was disposed of in April 2021.
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Annual Report and Accounts 2022
Reconciliation of headline profit before tax from
discontinued operations to statutory (loss)/profit
before tax from discontinued operations:
2022
Definition
The profit or loss recognised following
the disposal of a discontinued operation,
represented by the difference between
the fair value of proceeds received net
of related selling expenses and the
disposed of net assets.
Explanation
The loss in the year relates to the loss
on disposals for the Russian business of
£38.3m and the loss on disposal of the
Ukrainian businesses of £8.0m.
In the previous year the Group disposed
of its event portfolio in Kazakhstan and
a loss on disposal of £3.6m was
recognised.
Why adjusted?
To exclude the non-recurring profit/loss
from a disposal of a discontinued
operation, from which no future profit
or loss will be recognised. This increases
the comparability of the results
year-on-year.
£15.8m
2021: £6.1m
£(46.3)m
2021: £(3.6)m
£(30.5)m
2021: £2.5m
Headline profit before
tax from discontinued
operations
(Loss)/profit before tax
from discontinued
operations
Operating items
Loss on disposal of
discontinued operation
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49
Annual Report and Accounts 2022
Hyve Group plc
The Group has established risk management
processes for identifying and monitoring risks
and uncertainties affecting the Group.
How we’ve managed
Our key risks
Principal risks and uncertainties
The principal risks facing Hyve are
reviewed regularly by both the Risk
Committee and the Board, who
confirm that they have carried out a
robust assessment of the principal
and emerging risks facing the Group,
including those that could threaten its
business model, future performance,
solvency and liquidity.
The risks described below represent
those that we consider have the
greatest potential to impact on our
ability to meet our strategic objectives.
Standard operational risks are not
presented in the list of principal risks
and uncertainties below, as they are
considered pervasive risks that are not
Hyve-specific and would be risks for
the majority of listed groups.
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Annual Report and Accounts 2022
Potential impact
Updates during the year
Mitigation
Change in risk
rating from
prior year
Risk
Pandemic, extreme weather conditions,
earthquake, storm damage, gas/oil explosion
or terrorist incident could affect employees
and events.
Employees may be unable to access offices
or Hyve systems. Should a venue become
unavailable, the Group would be forced to
source a new location, which would likely affect
visitor numbers. Lockdowns and restrictions on
mass gatherings limit access to offices and limit
the ability to hold events.
Event cancellation would result in reduced
customer engagement and affect trading
results.
In response to the COVID-19 pandemic, working
from home was implemented across our global
network and remains in place.
With the exception of China, we have been
able to run the majority of our events in
FY22. In response to the pandemic, we have
implemented our own Safe & Secure standards
to ensure globally consistent best practice.
The Group has event cancellation insurance for
the largest events (by revenue). In FY20 and FY21
this insurance included cover for communicable
diseases. The Group continued to benefit from
insurance proceeds from this cover during the
year, thereby mitigating some of the impact of
the pandemic.
Venue contracts allow for a degree of recourse.
Systems are in place to ensure that employees
are able to work remotely and to access
systems remotely. Office risk assessments
are undertaken regularly.
Event cancellation insurance for our largest
events (by revenue) and business continuity
insurance are in place; however, event
cancellation cover for communicable
diseases is not currently available.
Political and economic volatility that makes
it difficult for Hyve to continue operating in a
country could have a damaging financial effect
in terms of lost revenue and lead to reputational
damage and dissatisfied customers.
An economic downturn or period of uncertainty
could reduce demand for exhibition space,
which would, in turn, reduce the profitability
of our events.
Since the UK left the EU in 2020, there continues
to be uncertainty in the UK regarding Brexit
and what this will mean for business and
the economy.
During the financial year, following Russia’s
invasion of Ukraine, Hyve exited the Russian
market. In addition, Hyve sold its Ukrainian
and Turkish businesses in an effort to focus on
global growth industries. The Group also sold
its 60% owned Indian business, ABEC Exhibitions
& Conferences Pvt. Ltd, and 50% owned
Indonesian joint venture, Debindo, further
reducing its exposure.
These changes have resulted in a portfolio which
is almost 95% rooted in advanced economies,
significantly reducing our exposure to this risk.
Over recent years, we have diversified our
portfolio of events to be less geographically
focused, which has resulted in expansion into
new regions and markets as well as reducing
our exposure in other countries, a number of
which have been more exposed to political
and economic instability.
We operate across a wide range of sectors
to minimise our exposure to any single
industry sector.
The nature of our business cycle is such that,
with revenues largely generated in advance of
the costs we incur, we can react to periods of
economic instability to protect the profitability
of our events. Through strong relationships with
venues and staff, we have a relatively flexible
cost structure, allowing us to manage our event
margins in the short and medium term.
Pandemic,
natural disaster
or terrorist
incident
Political and
economic
instability
1
2
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51
Annual Report and Accounts 2022
Hyve Group plc
Potential impact
Updates during the year
Mitigation
Change in risk
rating from
prior year
Risk
Liquidity risk
Principal risks and uncertainties
continued
3
Damage to or unavailability of a venue could
lead to event cancellation, impacting the Group’s
trading position. This could occur due to, among
other things, severe weather events, terrorism or
disputes with venue owners.
Cancellation insurance for our largest events
(by revenue) was renewed during the financial
year. Cover for communicable diseases is no
longer available.
During the year, the Group acquired Fintech
Meetup and 121 Group, enhancing its offer of
high-quality events in digital formats.
Event cancellation insurance for our largest
events (by revenue) is renewed annually.
The Group operates in a small number of
countries, with complex local requirements
surrounding overseas payments. There is a
risk of cash being ‘trapped’ in subsidiaries,
resulting in liquidity problems within the Group.
This would also expose us to the risk of
jurisdictions materially increasing the
withholding tax rate on the payment
of dividends.
During the financial year, the Group disposed of
its operations in Russia, Ukraine, Indonesia and
its 60% owned Indian business, ABEC Exhibitions
& Conferences Pvt. Ltd, and subsequent to the
financial year end also disposed of its operations
in Turkey, significantly reducing the number of
territories from which it needs to repatriate cash.
Overseas cash balances are monitored on a
weekly basis by Group management and cash
transferred whenever the opportunity arises.
The Group has well-established payment
mechanisms to repatriate cash from its
subsidiaries.
A franchise fee transfer pricing model is in
operation in all key markets.
Venue
unavailability
Repatriation of
profits from
subsidiaries
4
5
Significantly reduced trading over an extended
and undetermined timeframe, combined with
an inability to effectively manage expenditure if
cash flows decline, could impact the business’s
ability to operate within and secure additional
committed credit facilities.
The effects of the COVID-19 pandemic eased
during the year, increasing operational cash
flows and reducing liquidity risk. However, the
Russian invasion of Ukraine, prior to the disposal
of both components of the Group later in the
year, caused significant disruption and increased
liquidity risk.
During the year, we agreed an extension to
the waivers of our quarterly leverage ratio and
interest cover bank covenant tests up to and
including March 2023, instead working within
a £40m minimum liquidity covenant.
Subsequent to the year end, the Group has
completed the refinancing of its debt facilities,
securing access to a £115m term loan over a
four-year period and a £20m revolving credit
facility over a three-and-a-half-year period.
The Group has cancellation insurance policies
to mitigate the liquidity risk of disruptions to
our event schedule. During FY22, the Company
received £19.3m (2021: £65.0m) in insurance
proceeds. Further sums may be received during
FY23 as the remaining claims are concluded.
Event cancellation cover for communicable
diseases is not currently available.
There is flexibility in the Group’s cost base
should events not take place. Further cost control
measures are available to management,
should they be required to increase liquidity.
Following the refinancing of the Group’s debt
facilities on 20 October 2022, the Group has
access to £135m of long-term borrowing
facilities over a minimum of three-and-
a-half years.
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Hyve Group plc
Annual Report and Accounts 2022
Potential impact
Updates during the year
Mitigation
Change in risk
rating from
prior year
Risk
Should an employee or other associated party
commit a bribery offence or contravene other
similar laws, the Group could potentially be
exposed to criminal or financial sanctions,
reputational damage, exclusion from bidding
for public sector contracts in the EU and a
reduction in share price.
Breaches also constitute a breach of facilities
agreements, entitling lender(s) to call for early
repayment of loans.
Policies covering matters such as anti-bribery
and corruption, modern slavery, whistleblowing,
gifts and hospitality and conflicts of interest fall
under the umbrella of the Code of Conduct.
During the financial year, the policies on anti-
bribery and corruption, gifts and entertainment
and modern slavery were reviewed and
refreshed to ensure they remain fit for purpose.
Anti-bribery and corruption and gifts and
hospitality online training was rolled out across
the Group between November 2021 and
February 2022. Furthermore, employees across
the Group received refresher notifications and
updates about our gifts and hospitality policy
and procedures in February 2022.
Online reporting and registers were
introduced within the financial year for
accurate and streamlined reporting of
gifts and hospitality matters.
Staff are instructed to adhere to the Group’s
unambiguous policies on business ethics,
available on the intranet. These cover subjects
such as anti-bribery and corruption, conflicts of
interest and gifts and hospitality. Additionally,
individual business units are required to record
and obtain approval for certain expenditure.
All new joiners are auto-enrolled on the Group’s
anti-bribery and corruption and gifts and
hospitality online courses.
The Group’s Internal Audit function is outsourced
to PwC, who perform periodic checks of
compliance with record-keeping obligations
and general awareness among staff of
these policies.
All Hyve Group terms and conditions, and
precedent contracts, terms, contain anti-bribery
and corruption provisions.
Breach of
anti-bribery
laws or similar
6
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Financial statements
53
Annual Report and Accounts 2022
Hyve Group plc
Potential impact
Updates during the year
Mitigation
Change in risk
rating from
prior year
Risk
Should an individual representing the Group
trade with a restricted party, country or
sector in a country to which sanctions apply,
in contravention of those sanctions, this could
expose the Group to risks including financial
fines, reputational damage and a reduction in
share price.
Any extension of international sanctions regimes
could reduce the volume of business the Group
is able to transact.
Sanction breaches also constitute a breach of
facilities agreements, entitling lender(s) to call
for early repayment of loans.
During the year, the Group disposed of its
businesses in Russia, Ukraine, Dubai and,
subsequent to year end, Turkey, thereby
reducing the Group’s exposure to sanctions put
in place as a result of the conflict in Ukraine.
An enhanced due diligence process was
implemented within the financial year, and the
governing sanctions policy was updated in line
with macroenvironmental developments.
Attendance of Russian customers and exhibitors
is monitored by each division and on a case-by-
case basis, subject to sanctions checking.
The number and breadth of sanctions increased
significantly over the period, so while the Group
has taken appropriate steps to mitigate, the
landscape itself has become more complex in
breadth and depth.
Staff are instructed to adhere to the Group’s
unambiguous policy on sanctions, available on
the intranet in a variety of languages. This details
the sanctions risks, how to identify ‘red flag’
behaviour and when and how to report and
conduct checks.
Individual business units are required to record
and obtain approval before transacting with
persons or entities from sanctioned countries.
Our Customer Relationship Management system
is used to automatically flag sanctioned markets
and individuals for approval, and we also make
use of an external risk portal and third-party
advisers to check sanctions lists.
Regular updates and training on the
application of the policy are provided to
staff throughout Hyve.
Breach of
sanctions
7
Principal risks and uncertainties
continued
54
Hyve Group plc
Annual Report and Accounts 2022
Potential impact
Updates during the year
Mitigation
Change in risk
rating from
prior year
Risk
A breach of regulations or policy during build-
up/breakdown or while an event is running
could lead to personal injury.
This could result in financial loss due to fines
and damages, lost revenue through customer
attrition and reputational damage from
negative press coverage. There could also be
damaging effects on staff morale, together
with the risk of personal liability for Directors.
Our risk exposure may be greater when such
a breach involves a joint venture or subsidiary
that is not wholly owned by us, as we may not
be able to exercise full operational control.
The year has been spent working with all teams
to understand their specific event/portfolio
risks, set health, safety and security goals,
build out action plans and work collaboratively
to progress through improvements in a
focused manner.
Best-practice blueprints relating to health, safety
and security have been updated and are being
introduced across divisions and portfolios where
they were not fully implemented.
Operations teams and senior event
management have had refresher health and
safety training, and this is also scheduled for
the Executive Team in the coming months.
We recognise our reliance on the venues and
contractors we use and we seek to ensure that
such third parties adhere to our own health
and safety policies, where practical, and to
local regulations.
A Health, Safety & Security Policy is embedded
across the business, ensuring event-level major
incident management plans are put in place
event by event.
Teams are given relevant training to ensure
competency when planning and managing
safety onsite.
Regional management is held accountable for
health and safety standards in their regions.
Strategic events are monitored and audited
throughout the year.
The Board is immediately notified of any
serious breaches.
Breach of health
and safety
regulations
8
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Financial statements
55
Annual Report and Accounts 2022
Hyve Group plc
Potential impact
Updates during the year
Mitigation
Change in risk
rating from
prior year
Risk
Principal risks and uncertainties
continued
The need to comply with data protection
legislation could affect the Group in a number of
ways, including making it more difficult to grow
and maintain marketing data and also through
potential litigation relating to any data breach or
misuse of personal data.
A breach arising from inadequate controls over
customer, visitor or employee data could result in
sizeable fines and reputational damage arising
from negative press coverage.
Hyve’s Data Protection Officer (DPO) has
developed a blueprint of initiatives to improve
the Group’s data protection, information security
and information governance framework. This
has set a timetable to move from adhering to
compliance requirements to accountability over
the next 12 months.
Policies, procedures and contract templates
have been refreshed in line with global
legislative changes and distributed within the
Group. A new risk assessment process has been
developed, embedding privacy by design
and default.
A new data risk framework was developed
together with the Group’s Technology Team
to align the Data and Tech risks to business
objectives.
Data privacy training (both in-person and
online) has been delivered throughout the
business; with more training planned for the
coming financial year, as part of a continuous
cycle of education and in order to highlight
associated privacy risks.
The DPO (together with the Group’s Technology
Team) is undertaking a review of the Group’s
cyber security insurance to determine the
appropriate level of coverage.
The Group DPO has oversight of data protection
at Hyve. The Group DPO (together with other
subject matter experts (SMEs) from within
the Group) reports to a Tech and Data Board
monthly (comprising Group Executives from
Legal, Finance and People workstreams) which
in turn reports to the Risk Committee.
A contract governance and procurement
process requires that all suppliers and contracts
undergo both data protection and information
security due diligence before contracts are
signed.
The Group’s standard terms and conditions and
commercial contracts include appropriate data
protection provisions.
The Group maintains some cyber security
insurance and is conducting a review of its level
of cover.
The Group invests in specialist roles and staff
training to achieve an appropriate degree
of internal expertise to mitigate data
protection risks.
Data workstreams are given Group leadership
team exposure in order to elevate awareness
of the need for continued compliance and
assessment of the Group’s data practices.
The DPO undertakes regular global data
landscaping exercises relevant to the territories
in which the Group operates its business to keep
up to date on legislative and other relevant data
practices on a global basis. Notices, policies and
procedures are then updated in line with those
landscape scans.
Breach of data
protection
regulations
9
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Potential impact
Updates during the year
Mitigation
Change in risk
rating from
prior year
Risk
The inability to protect our IT systems or
infrastructure against a targeted cyber or
phishing attack could reduce our ability to
make sales, damage our reputation and harm
customer relationships. The same applies
if internet restrictions are applied by the
governments of any of the markets in which
we operate.
A complete loss of connectivity would potentially
halt business operations.
Any data loss could expose the Group to
fines, while a systems breach could make us
vulnerable to a ransomware attack.
A recruitment programme was completed in
this financial year to significantly strengthen the
IT team.
During the financial year, cyber insurance was
put in place for the Group’s US businesses.
Having implemented a number of improvements
to our IT systems, the Group has been able to
revise its cyber insurance requirements and is in
the process of sourcing a suitable global cyber
insurance policy.
While we have put in place new measures, we
perceive the external risk environment in this
space to be high.
A programme of defensive measures is in place
to reduce the risk of a cyber/phishing attack.
In addition to the items put in place during the
financial year, mitigation includes regular system
penetration testing across the organisation,
firewalls to protect computer networks,
advanced endpoint protection for email-based
links and data backups for our major offices.
The Group implements solutions provided by
large and trusted providers, and we continually
review and update solutions to keep up with
evolving security threats.
Integration issues and a failure to realise
planned operational and synergistic benefits
are a risk to delivering the expected returns
on our investments.
During the financial year, Hyve continued with its
integration of Shoptalk, Groceryshop and Retail
Meetup supported by our Chief Transition and
Integration Officer, now based in New York, and
by the appointment of a new Global President.
In November 2021, the Group acquired 121 Group
followed by the acquisition of Fintech Meetup
in March 2022 to further accelerate Hyve’s
omnichannel strategy.
The Group employs experienced professionals
to drive the acquisition process and perform
financial, tax, legal and commercial due
diligence to inform detailed integration plans,
which aim to ensure that businesses are
effectively integrated into the Group and
any planned synergies are realised.
A Chief Transition and Integration Officer sits
on the Executive Team to give due focus to
integration work.
Day to day, management and control of non-
wholly owned entities is often in the hands
of local management, which may also be
shareholders. The venture may not be run in a
manner fully consistent with Hyve’s policies.
In November 2021 the Group disposed of its 60%
interest in Indian business ABEC Exhibitions &
Conferences Pvt. Ltd.
A small, 50% owned subsidiary based in
Indonesia, PTE Debindo ITE, was also disposed
of during the year.
We incorporate controls in the shareholder
agreement or equivalent governing documents
and have in place a Group authority matrix.
The Hyve Finance team has management
and oversight of the reporting and control
environment.
IT cyber/phishing
attack resulting
in data loss
Acquisition
integration
Effective control
over non-wholly-
owned entities
10
11
12
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Annual Report and Accounts 2022
Hyve Group plc
Potential impact
Updates during the year
Mitigation
Change in risk
rating from
prior year
Risk
Principal risks and uncertainties
continued
A lack of alignment between the business plan
and individual objectives and associated reward
metrics may cause confusion and demotivation.
This may lead to targets not being met, potential
revenue loss and poor business results.
At the beginning of the financial year, a
stretching but achievable bonus plan for the
financial year ended 30 September 2022 was
put in place. The non-financial targets focused
on the ‘what’ and the ‘how’ to support our
cultural evolution and also on accountability of
the leadership team in supporting and retaining
our people in a year of ongoing uncertainty.
We were keen to support employees with the
rising cost of living, and for those on lower
salaries we paid a one-off Cost of Living
Allowance, on a tiered basis, with greater
financial support provided to those on
lower salaries.
Ongoing benchmarking supported the process
of ensuring that appropriate reward levels
were maintained.
One of our key focus areas from Peakon (our
employee engagement portal) is allowing our
people the space and development to grow.
We believe that our performance methodology
and approach should therefore be focused on
this and enable this.
We will use the process to align people to the
purpose of what they do, and ensure they
understand how this fits in with the wider
organisation’s strategy.
We will focus sessions on what motivates an
individual most about the work they do today,
what career possibilities they would like to learn
about and what support is needed for them to
make progress. This is where we consider the
value to be and how we keep our talent within
the organisation.
As we evolve as a business, we have adopted
a performance process that is agile and
transparent and that aligns with our culture.
Our new process encourages all-year-round
and continuous feedback.
Pay and
performance –
for business
benefit
13
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Annual Report and Accounts 2022
Given the significance of these changes,
presenting historical KPI results that are
still useful comparators for the current
business’s performance is challenging.
Comparatives for FY21 have been
provided on a continuing basis, unless
otherwise stated, to aid comparison
with FY22.
Hyve has been on a journey of transformation over a
number of years. That rate of change accelerated
during this financial year, thanks to the acquisitions of
121 Group and Fintech Meetup, as well as the sale of
large portfolios such as Russia, Turkey and Ukraine.
This has resulted in a fundamentally changed business
which is no longer comparable to how it was in the past.
Measuring
our performance
Key performance indicators
Some of the KPIs reported this year are
different from those presented in the
previous year, to capture the key metrics
used within the business in FY22 while
recovering from COVID-19. As we
continue to evolve we can expect new
measures to be introduced, allowing
us to better evaluate the success of
our future, digitally diversified strategy,
for instance the number of meetings
we facilitate.
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Annual Report and Accounts 2022
Hyve Group plc
Headline profit before tax
(£m)
Headline diluted earnings per share
1
(p)
Headline profit before tax reduced in the year
as a result of lower cancellation insurance
proceeds received of £19.3m (2021: £65.0m),
almost entirely offset by the strength of the
recovery of the Group’s events.
The change in headline diluted earnings
per share in the year reflects the change
in the Group’s headline profits.
11.5
2022
13.9
2021
4.2
2022
4.9
2021
Drive sustainable
revenue growth
Focus on profitability to
increase shareholder value
Revenue
(£m)
Forward bookings
(£m)
The revenue increase in the current year
reflects the Group’s continued recovery
from COVID-19. The Group was able to run
29 events in the year compared with 10 in
FY21. A number of the Group’s events have
now fully recovered and delivered revenues
above their last pre-COVID-19 editions.
Forward bookings have increased year-on-
year across the same portfolio of events,
reflecting the pace of recovery as we
enter FY23.
122.5
2022
21.8
2021
97.6
2022
67.4
2021
Key performance indicators
continued
1
Headline diluted earnings per share for 2018 and 2019 has also been restated for the share consolidation and rights issue
which took place in FY20.
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Annual Report and Accounts 2022
Create a leading portfolio
of must-attend events
Manage cash flows to
ensure the long-term
viability of the Group
Revenue per event
(
£m)
Customer like-for-like spend
(%)
The 2021 metric includes discontinued
revenues and events that are now
presented as discontinued. The significant
increase in 2022 illustrates the impact the
disposals of Russia, Ukraine and Turkey
have had, with the remaining portfolio
consisting of fewer, bigger, market-
leading events.
Customer like-for-like spend represents
the increased spend from customers who
attended both the 2022 event and the
previous edition. The increase year-on-
year reflects the value customers place
on attending the number one events in
particular geographies and industries,
where they are able to realised a strong
return on their investment.
3.7
2022
0.8
2021
14.2
2022
14.7
2021
Leverage (adjusted net debt: EBITDA)
Free cash flow
(£m)
Leverage has increased slightly during the
year, as a result of the reduction in EBITDA
with less cancellation insurance proceeds
received in 2022, £19.3m (2021: £65.0m),
offset to a large extent by the improvement
in net debt to £71.0m (2021: £79.9m) and
the improved trading performance as the
majority of the Group’s events returned
in 2022.
Free cash flow has increased year-on-
year due to additional cash generated
from operations, including strong cash
collections on 2023 events prior to the end
of 2022.
3.0
2022
2.8
2021
18.4
2022
15.8
2021
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61
Annual Report and Accounts 2022
Hyve Group plc
Section 172(1) statement
In accordance with provision 5 of the 2018
UK Corporate Governance Code, we set out
below how the Group engages with its key
stakeholders and how the Board considers
the matters set out in section 172(1) of the
Companies Act 2006 in its discussions and
in its decision-making process.
Working together
with our
stakeholders
62
Hyve Group plc
Annual Report and Accounts 2022
Suppliers
The Group has had longstanding
relationships with a significant number
of suppliers. In the majority of cases,
these are venue owners and event
services providers, but can also include
providers of digital/technology support
and services. In line with our Code of
Conduct, we endeavour to treat our
suppliers fairly at all times. We share
event information with our suppliers
via pre-event meetings and briefings
to enable them to plan accordingly.
Both parties benefit from our suppliers’
familiarity with our events and
requirements. It is paramount that our
suppliers comply with anti-bribery and
corruption legislation and modern
slavery legislation across the territories
that we operate in. Our supplier
contracts include clauses covering these
areas and are checked as part of our
procurement, governance and approval
processes. They are also reviewed via
our internal audit and controls process.
As restrictions have eased or, in some
cases, temporarily hardened, in our
operating territories, we have continued
to engage with venue owners and other
suppliers on a regular basis. During the
financial year, we have renegotiated the
terms of contracts with some of our key
suppliers to the mutual benefit of both
parties; the Board was kept up to date
with these negotiations and had final
approval over the changes. The Board
is kept informed of the status of
relationships with key suppliers and
with major transactions. Through
our involvement with national and
international event industry bodies, such
as the Association of Event Organisers in
the UK, the Society of Independent Show
Organizers in the US, and UFI, the Global
Association of the Exhibition Industry, we
have continued to take a leading role in
setting standards for the safe return to
in-person events.
Employees
Hyve is a people business, and the
contribution of our employees is vital
to the success of the Group.
During the financial year, we expanded
on previous initiatives as well as
introducing new activities. We renewed
Peakon and expanded it to capture
diversity and inclusion statistics. We have
also rolled out replies to comments.
This allows us to start a dialogue with
individuals to explore their comments
and feedback in more detail.
One of the key people priorities for FY22
was reconnecting people after working
remotely for so long. We ramped up our
social activities, introduced competitions
and hosted our first Summer Party in
the UK and US. Other initiatives included
a focus on wellbeing: we hosted our
first puppy therapy session as well as
increasing the number of mental health
first aiders in the UK office. In order to
ensure that our people managers are
able to support employees who are
struggling with their mental health,
we rolled out mandatory mental
health training for line managers.
Following on from our focus on Learning
& Development in FY22, we launched two
more cycles of the global management
development programme, which allowed
all employees who managed one or
more individuals the opportunity to hone
and develop their skills as a manager.
We have also expanded this programme
to focus on aspiring managers. In
addition, we also ran a global Future
Leaders Programme that focused
on growth mindset, coaching and
understanding our strengths. The
strengths profile was so beneficial that
we decided to incorporate it in our new
performance cycle – we removed ratings
and the prescriptive reporting form
to ensure that all employees have
meaningful development conversations.
More details on these initiatives can be
found in the ‘Our people and values’
section on pages 19 to 21.
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63
Annual Report and Accounts 2022
Hyve Group plc
Section 172(1) statement
continued
Shareholders
The Group is committed to ongoing
engagement with shareholders and has
an established cycle of communication
based on the Group’s financial reporting
calendar. The Executive Directors have
dialogue with institutional shareholders
and general presentations are given to
analysts and investors covering the
annual and interim results. The Board
receives institutional and analysts’
feedback following both the interim
and annual results roadshows. Large
shareholders are also contacted
regarding remuneration matters (by the
Chair of the Remuneration Committee)
and major transactions, for example the
acquisition of 121 Group (HK) Limited and
121 Partners Limited and the associated
equity raise in November 2021. Queries
from retail shareholders are usually
answered by the Company Secretary
or the Company’s Registrar and, if
necessary, escalated to the Executive
Directors.
The Group issues trading updates
on a regular basis to ensure that
its shareholders (and other key
stakeholders) are kept abreast of matters
such as trading performance, recovery
from the COVID-19 pandemic, rollout of
the omnichannel strategy and liquidity.
Community and environment
The Group is committed to using its
events as opportunities to lead the drive
for sustainable development in their
industries and make a positive impact
on the world around us. Our new ESG
strategy is driving our ambition to
educate, empower and drive positive
change on a global scale.
Last year, we developed the Group’s
ESG strategic framework in conjunction
with Simply Sustainable, a sustainability
and ESG consultancy. During the past
financial year, we have worked on
implementing our strategy with the aim
of using our influence to put sustainable
development on the agenda of some
of the world’s major industries. As the
leading events in their sectors, we
recognise that our events have a
responsibility to effect change. We
endeavour to empower communities,
advance social mobility, guarantee
representation and inspire industries,
all while better understanding and
addressing our own carbon footprint.
More details on our ESG strategy can
be found on pages 22 to 26.
The following case studies are
examples of how the Board considers
its key stakeholders when deciding
on significant matters that are likely
to have an impact on all or many of
its key stakeholders.
Customers
We engage with our exhibitors, visitors,
vendors, buyers, sponsors and delegates
through our sales, operations, customer
success, marketing and content teams
via all relevant channels, including
website, email, social media, exhibitor
portals, FAQ bots, calls and in-person
meetings. Both during and following an
event, customer surveys are undertaken
with exhibitors and visitors. We also
contact visitors who were due to attend
events, but did not. Some of our events
have steering groups or advisory panels
which enable our major customers to
share feedback with the Group. In the
past year, we have engaged a research
agency to support our data gathering on
specific events.
We believe that our commitment to our
customer communities has helped us
to grow our customer market share,
and customer support has been
demonstrated by the strong growth
in customer like-for-like spend at
our events. We know from our
communication with customers that
there is significant demand for our
market-leading in-person events,
and our omnichannel strategy (which
supports in-person events with online
activity) continues to evolve as we
explore new ways to support our
customer communities. More details
on our omnichannel strategy can be
found on page 8.
64
Hyve Group plc
Annual Report and Accounts 2022
As described elsewhere
in this annual report, the
Group completed the
acquisition of Fintech Meetup,
LLC in March 2022.
What are the likely
consequences of the decision
to acquire Fintech Meetup in
the long term?
The acquisition is part of Hyve’s
ongoing drive to strengthen its global
footprint and advance the Group’s
long-term omnichannel strategy.
The acquisition supports the Group’s
expansion into high-growth sectors
and geographic diversification,
strengthening the Group’s presence
in a key strategic market in the US.
The acquisition provides the Group
with a unique opportunity to create
the world’s largest virtual and in-
person meetings programme for
the fintech sector.
The acquisition represents good value
for Hyve with limited downside risk.
The acquisition contributes towards the
long-term development, diversification
and sustainability of the Group.
How are the interests of
the Company’s employees
affected by the acquisition
of Fintech Meetup?
The acquisition offers Hyve employees
career development by widening the
Group’s offering and creating new and
exciting opportunities.
The strategic rationale for this significant
acquisition was presented to the Board,
and during the decision process the
Non-Executive Directors raised detailed
and challenging questions to ensure that
the acquisition was an appropriate fit
for the Group and that it was in the
best interests of the Group and its key
stakeholders in the long term. Taking
each part of section 172(1) in turn, the
matters considered by the Board, in
addition to the benefits of the acquisition
for the shareholders of the Company,
were as follows:
Case study: Acquisition
of Fintech Meetup, LLC
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65
Annual Report and Accounts 2022
Hyve Group plc
How does the acquisition help
to foster the Company’s
business relationships with
suppliers, customers and
others?
Founded in 2021, Fintech Meetup has
already become renowned as the
leading online industry event in the
US fintech industry.
Fintech Meetup is expanding into in-
person events in the US in 2023 and
has significant potential for further
geographical expansion.
Hyve will leverage Fintech Meetup’s
deep industry knowledge and
relationships, customer-enabling
technologies and data-driven insights
of target audiences.
Fintech Meetup’s platform is
compatible with and will advance
the Group’s strategy of meetings
programmes, thereby creating
multiple channels for our customers
to trade, network and learn.
What is the impact of
the acquisition on the
community and the
environment?
As a technological product for use
at online events, the acquisition of
Fintech Meetup from a community and
environment perspective was not a
significant issue for consideration.
How does the acquisition
impact the desirability of
the Company maintaining
a reputation for high
standards of business
conduct?
The Company’s aim is to concentrate
on market-leading events serving
advanced economies, and Fintech
Meetup is one of the largest and best-
known US online fintech events.
Hyve conducted a full diligence
exercise on Fintech Meetup and was
satisfied that the investment risks were
minimal and well provided for through
operational, legal and commercial
means.
The legal agreements put in place
provide Hyve with solid risk protection
and a strong cooperation framework
with the management team going
forward.
How does the acquisition
meet the Board’s need to act
fairly as between members of
the Company?
The acquisition strengthens the Group’s
portfolio, and thereby its long-term
profitability and sustainability, which
benefits all of its key stakeholders.
The earn-out-led transaction structure
helps to de-risk the acquisition, with
a significant majority of the potential
total consideration contingent on
the successful delivery of Fintech
Meetup’s strategy.
Acquisition of Fintech
Meetup, LLC continued.
Section 172(1) statement
continued
66
Hyve Group plc
Annual Report and Accounts 2022
As announced in July 2022,
during the financial year,
the Group disposed of its
Ukrainian business via a
management buy-out led
by Anatoly Sushon, the
managing director of the
Ukrainian business.
What are the likely
consequences of the decision
to dispose of the Ukrainian
business in the long term?
Hyve will receive up to £3m via an
earn-out consideration, which shall
be paid annually until September
2027 based on the profitability of the
Ukrainian business.
At a time when, due to the ongoing
conflict in Ukraine, no events can be
held, Hyve has agreed to support the
Ukrainian business with funding of up
to £1.2m to be repaid by September
2027, also dependent on future
profitability.
The disposal has further accelerated
the refocusing of Hyve’s portfolio
towards advanced economies and
omnichannel-ready sectors.
Non-core assets require a
disproportionate time investment
from the leadership team to
manage comparatively with the
returns received.
The exit from Ukraine reduces Hyve’s
risk exposure.
How are the interests of
the Company’s employees
affected by the disposal?
The disposal resulted in the transfer
of approximately 90 employees from
Hyve to the new owner of the business.
Hyve cares deeply about the
employees and their families,
and has supported them through
the challenges presented by the
conflict. Both parties believe that
by transitioning ownership to the
experienced and committed local
management team, the business will
have the agility to recover for the
future and, therefore, this is in the
best interests of the employees in the
long term.
Taking each part of section 172(1) in turn,
the matters considered by the Board, in
addition to the benefits of the disposal
for the shareholders of the Company,
were as follows:
Case study: Disposal
of the Ukraine business
£1.2m
funded to support
Ukrainian businesses
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Annual Report and Accounts 2022
Hyve Group plc
How does the disposal help to
foster the Company’s business
relationships with suppliers,
customers and others?
The business was sold to ProExpo
(Europe) Limited, a company
established by Anatoly Sushon for
the purpose of undertaking the
management buy out. Anatoly is well
known to local suppliers and customers
and is best placed to rebuild those
relationships as Ukraine recovers from
the conflict.
As a result of the disposal, some
suppliers may be impacted by the
cancellation of contracts.
The business had not been identified
as suitable for the Company’s
omnichannel offering to customers.
The Company’s debt facilities
agreement requires lender consent
for the disposal, and therefore a
consultation process with the banks
was undertaken.
What is the impact of the
disposal on the community
and the environment?
Hyve has a long history with Ukraine
and is keen to extend its support into
the future where possible.
The alternative options of doing
nothing or closing down the business
were not considered to be in the best
interests of the local community.
The disposal was not considered likely
to have an impact on the environment.
How does the disposal impact
the desirability of the
Company maintaining a
reputation for high standards
of business conduct?
The disposal reduces the risk profile of
the business, reduces the impact on
Company resources and supports the
Company’s aim to concentrate only on
market-leading events.
Hyve is committed to supporting
Anatoly Sushon and his team through
continued cooperation and through its
international network wherever it can
as it gets back to business.
How does the disposal meet
the Board’s need to act fairly
as between members of
the Company?
The disposal of the business forms
part of the Company’s portfolio
management strategy, which is
considered to be in the best long-
term interests of the business and
its stakeholders.
The transaction was classified as a
smaller related party transaction
under Listing Rule 11.1.10 R by virtue
of Anatoly Sushon being deemed a
related party of the Group at the time
of the transaction.
Disposal of the Ukraine
business continued.
Section 172(1) statement
continued
68
Hyve Group plc
Annual Report and Accounts 2022
Going concern
The financial statements have been
prepared on a going concern basis,
which assumes that the Company will
continue in operational existence for the
foreseeable future.
As part of their assessment of the
appropriateness of adopting the going
concern basis when preparing the
annual report and financial statements,
the Directors have considered the current
strength of the Group’s liquidity, recent
trading performance indicators and the
potential impact of forecast scenarios on
the Group’s financial position over the
next 12 months.
In October 2022, the Group completed
the refinancing of its debt facilities. The
new facilities, totalling £135m, comprise
a £115m term loan and £20m revolving
credit facility. The £101.0m that was
drawn at 30 September 2022 on the
previous facility was repaid in full on
20 October 2022, with the new term loan
of £115m being fully drawn on the same
date. The term loan will be repaid in
full upon the expiry of the facility in
October 2026. Under the new facilities,
a minimum liquidity covenant of £21m
is in place up to and including August
2023. Thereafter, a quarterly leverage
ratio applies, set at 4.4x in September
2023, 4.2x in December 2023 and at
3x thereafter.
With the exception of China, the Group
ran a full schedule of events in FY22.
The pace of in-person event recovery
has quickened throughout the financial
year, alongside a number of other
positive trends, including increased
like-for-like customer spend, improved
NPS scores, the return of international
attendance and strong forward bookings
for next year’s events. The Group’s
recovery has been supported by the
acquisitions of 121 Group in November
2021 and Fintech Meetup in March 2022,
which have accelerated the Group’s
omnichannel strategy.
The Group has modelled a number
of scenarios based on different
assumptions, regarding the next 12
months. For the purposes of considering
the Group’s going concern assessment,
we have focused on two scenarios:
A Base Case; and
A Downside Case.
The Base Case, which represents the
Directors’ current best estimate, assumes
a full schedule of events will take place
in FY23. This considers the latest
information available in respect of
COVID-19 restrictions in China and
reflects that we currently expect to be
able run our events in the region but with
some Q1 events postponed until later in
FY23, including the ChinaCoat event,
operated by our 50% joint venture
Sinostar, which will result in no dividend
from the joint venture being received in
FY23 as the event moves into Sinostar’s
year ending December 2023. Under the
Base Case scenario, available liquidity is
expected to remain in excess of £43m
throughout the 12-month period from
the date of the annual report.
The Downside Case has been modelled
for the purposes of ensuring the
minimum liquidity covenant and leverage
covenant are not breached during the
period of assessment, even if the Group’s
trading is impacted by a deterioration of
the wider macroeconomic environment,
including the impact of a possible
recession, or if its event schedule in
China is disrupted by the continuation of
COVID-19 restrictions, or a combination
of these events.
The Downside Case considers the impact
a global recession could have on the
Group’s financial performance and takes
account of the relative strength of the
industries and geographies that the
Group’s events operate in and how
exposed they could be to an economic
downturn. For example, the latest
economic forecasts suggest that the
UK could face a worse recessionary
environment than many other countries,
and we have therefore applied larger
reductions to the UK retail and fashion
event projections. In conjunction with this
trading decline, we have also considered
the impact that a reasonably possible
increase in interest rates would have
under the Group’s new debt facilities.
A margin of 7.75% is payable on the
£115m term loan plus a variable rate of
interest based on SONIA, which in the
Downside Case we assume increases to
5%. Finally, the Downside Case assumes
that due to an extension of COVID-19
restrictions in China, the Group’s events in
the region will not be able to take place
for their next scheduled edition, and
therefore that no events will take place
in China until FY24. In response to this
scenario playing out, modest cost savings
have been assumed, including reduced
discretionary bonus payments and
variable event savings as a result of
the reduced revenues and event
cancellations. Liquidity is expected to
remain in excess of £34m throughout
the 12-month period from the date of
the annual report.
Throughout the 12-month period of
assessment, both scenarios have
material headroom over and above both
the £21m minimum liquidity covenant in
place through to the end of August 2023
and the leverage ratio covenant after its
introduction in September 2023.
Going concern and viability statement
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69
Annual Report and Accounts 2022
Hyve Group plc
The Directors have also modelled a
reverse stress test, which assesses the
liquidity and covenant position if an even
more extreme deterioration in event
performance were to occur. This has
been reflected through a 20% reduction
to all event revenues throughout the
forecast period, except where forward
bookings are already in excess of this
level. This is in addition to the cancellation
of the Group’s Chinese events in FY23
and an increase in the variable interest
rate paid on the Group’s debt.
As in the Downside Case, variable event
savings have been modelled in response
to the reduced revenues. Given the
significance of the reductions, additional
cost actions over and above those
assumed in the Downside Case have
also been assumed, reflecting a
reduction in discretionary spend that
could be implemented if required.
Under this scenario, the Group would
still have available liquidity of at least
£30m within the period of assessment
and therefore would have material
headroom above the minimum liquidity
covenant, but would breach the leverage
covenant when introduced in September
2023 and would therefore require a
covenant waiver. The Directors feel
that the assumptions applied in this
reverse stress test are remote, given
the performance of the Group’s recent
events and the current level of forward
bookings for FY23.
Further, the Group could still implement a
number of additional mitigating actions
if required. The Group implemented a
material cost savings programme in
response to the COVID-19 outbreak and
has demonstrated an ability to quickly
action cost reductions if necessary.
Further cost savings over and above
those assumed in the reverse stress test
scenario could be actioned to help ease
liquidity if required, including:
A delay in planned investments,
including the rollout of meetings
programmes;
A further reduction in discretionary
staff bonus payments;
A hiring freeze on staff vacancies; and
A reduction in discretionary spend
in other areas, including travel,
technology and people-related
investments such as reward and
training.
These mitigating actions would enable
the Group to meet the leverage covenant
in September 2023 even if the reverse
stress test scenario were to play out. The
Group also has a number of additional
actions that could be taken, including
staff redundancies, disposal of events or
portfolios of events or an equity raise,
all of which have been successfully
actioned in recent years since the start
of the COVID-19 pandemic.
Based on the current and projected
levels of liquidity, under a range of
modelled scenarios, the Directors
believe that the Group is well placed to
manage its financial obligations and
other business risks satisfactorily. The
Directors have been able to form a
reasonable expectation that the Group
has adequate resources to continue in
operation for at least 12 months from
the signing date of these financial
statements. The Directors therefore
consider it appropriate to adopt the
going concern basis of accounting
in preparing the annual report
financial statements.
Viability statement
In accordance with the UK Corporate
Governance Code, the Directors have
considered the long-term viability of
the Group to determine whether it
can continue to operate and meet its
liabilities, taking into account its current
position and principal risks. In assessing
viability, the Board considered a number
of factors, including the Group’s business
model (see pages 15 to 18), strategy
(see pages 4 to 8), risk appetite (see
page 50 to 58) and principal risks and
uncertainties (see pages 50 to 58).
Particular attention has been paid to
the risks and associated impact of a
global recession, as well as the knock-
on impact of risks related to economic
stability and liquidity.
The Board is required to assess the
Group’s viability over a period greater
than 12 months. A four-year period has
been chosen on the basis that it reflects
an appropriate balance between
certainty over assumptions and a
longer-term view for investors and other
stakeholders. This period also aligns
with the term of the Group’s new debt
facilities and the forecast period upon
which the Board assesses the Group’s
financial outlook.
The Group’s long-term projections have
been reviewed against its banking
covenants, which include a monthly £21m
minimum liquidity covenant up to and
including August 2023, before reverting
to a quarterly leverage ratio from
September 2023. Details of the quarterly
leverage test that resumes from
September 2023 are presented below:
Adjusted net debt must be less than
4.4x times adjusted EBITDA across the
last 12 months for the quarter ending
30 September 2023.
Adjusted net debt must be less than
4.2x times adjusted EBITDA across the
last 12 months for the quarter ending
31 December 2023.
Adjusted net debt must be less than
3.0x times adjusted EBITDA across
the last 12 months for all subsequent
quarters until the expiry of the facility.
Going concern and viability statement
continued
70
Hyve Group plc
Annual Report and Accounts 2022
The Directors considered the Group’s
financial position over the period from
FY23 to FY26, which was recently
approved by the Board when assessing
viability as part of the annual budget
process. The Directors considered the
strength of the in-person event portfolio,
in particular the Group’s market-leading
events, which have proven in the past
that they are more resistant to downturns
than second- and third-tier events and
have recovered quickly post-COVID-19.
Consideration was also given to the
continued rollout of the Group’s
omnichannel strategy and the additional
resilience this provides through revenue
streams that would not be adversely
impacted by in-person event disruption.
Finally, consideration was also given to
the geographical and industry sector
diversity of the portfolio, which provides
protection against location-specific and
sector-specific issues.
The Directors have considered a
downside scenario, which takes account
of the impact a global recession
could have on the Group’s financial
performance, including the impact that a
reasonably possible increase in interest
rates would have under the Group’s
new debt facilities, as well as the impact
of a prolonged period of COVID-19
restrictions in China resulting in the
Group’s events in the region not being
able to take place for their next
scheduled edition, and therefore
assumes that no events will take place
in China until FY24. The Directors have
also considered a reverse stress test
scenario where there is an extended
and more severe trading decline as
a result of a deterioration of the
macroeconomic environment.
Based on the various scenarios
considered, the Group is expected to
have material available liquidity
throughout the four-year period. Only
under the reverse stress test scenario,
outlined in further detail in the going
concern section, would the minimum
liquidity covenant or leverage ratio tests
be breached. Given that the reverse
stress test scenario is remote based on
the performance of the Group’s recent
events and the current level of forward
bookings for FY23, the Directors are
confident that the Group remains viable
during the period of assessment.
The maturity date for the Group’s
current debt facilities is October 2026
and therefore falls within the final months
of the four-year period of viability
assessment. The likelihood of the Group’s
ability to refinance its debt facilities has
therefore been considered as part of the
Directors’ viability assessment. Based on
the recent completion of a refinancing in
challenging market conditions while the
business is still recovering from the
COVID-19 pandemic, in addition to the
forecast deleveraging of the business
in the coming years, the Group has
confidence in its ability to refinance
its debt facilities. This confidence is
strengthened by there being just less
than four years until the current facilities
expire and by the optimism around the
continued recovery of the business
during that period.
Since the outbreak of COVID-19,
management has taken significant
action to strengthen the Group’s liquidity
position and protect its long-term
financial prospects. These measures
include raising £126.6m through a rights
issue in May 2020, delivering significant
cost savings, renegotiating banking
covenants on more than one occasion
and, most recently, completing a full
refinancing in October 2022. These
measures have protected the business
against the prolonged impact of
COVID-19 and provide confidence in the
Group’s ability to withstand any new
disruption over the next four years.
With close to a full schedule of events
running in FY22 outside of China, the
Group has seen a number of positive
trends during FY22 that have continued
into FY23, including increased like-for-like
customer spend, recovery of revenues
from international customers, improved
NPS scores and strong forward bookings.
The Group’s available liquidity means
that even under downside scenarios,
the business would continue to have
significant liquidity headroom on its
existing facilities. In all assessments,
there is an option to extend the potential
mitigations available, such as further
reduction in expenditure, raising
additional capital via the equity markets,
or the disposal of assets, if required. The
Audit Committee reviews the output of
the viability assessment in advance of
final evaluation by the Board. Having
reviewed the current performance,
forecasts, debt servicing requirements,
total facilities and risks, the Board has a
reasonable expectation that the Group
has adequate resources to continue
in operation, to meet its liabilities as
they fall due, and to retain sufficient
available cash across all four years of the
assessment period. The Board therefore
has a reasonable expectation that the
Group will remain commercially viable
over the period of assessment.
Strategic report
Governance
Financial statements
71
Annual Report and Accounts 2022
Hyve Group plc
Governance
73
Governance at a glance
75
Board of Directors
77
Corporate governance report
82
Directors’ report
85
Audit Committee report
90
Risk Committee report
92
Nomination Committee report
94
Environmental, Social and
Governance Committee report
96
Remuneration Committee
Chair’s statement
99
Directors’ remuneration report
128
Directors’ responsibilities
statement
72
Hyve Group plc
Annual Report and Accounts 2022
Board leadership and
company purpose
Principles
A.
A successful company is led by an
effective and entrepreneurial board,
whose role is to promote the long-term
sustainable success of the company,
generating value for shareholders and
contributing to wider society.
Directors’ biographies on pages 75
and 76
Our strategy on pages 4 to 8
Business model on pages 15 to 18
B.
The board should establish the
company’s purpose, values and strategy,
and satisfy itself that these and its culture
are aligned. All directors must act with
integrity, lead by example and promote
the desired culture.
Our strategy on pages 4 to 8
Our people and values on pages 19
to 21
C.
The board should ensure that the
necessary resources are in place for
the company to meet its objectives and
measure performance against them.
The Board should also establish a
framework of prudent and effective
controls which enable risk to be assessed
and managed.
Key performance indicators on
pages 59 to 61
Principal risks and uncertainties on
pages 50 to 58
Audit Committee report on pages 85
to 89
Risk Committee report on pages 90
and 91
D.
In order for the company to meet its
responsibilities to shareholders and
stakeholders, the board should ensure
effective engagement with, and
encourage participation from, these
parties.
Section 172(1) statement on pages 62
to 68
E.
The board should ensure that
workforce policies and practices are
consistent with the company’s values
and support its long-term sustainable
success. The workforce should be able
to raise any matters of concern.
Section 172(1) statement case studies
on pages 65 to 68
Corporate governance – Our
commitment to compliance and
Whistleblowing arrangements,
both on page 80
Division of responsibilities
Principles
F.
The chair leads the board and is
responsible for its overall effectiveness
in directing the company. They should
demonstrate objective judgement
throughout their tenure and promote
a culture of openness and debate.
In addition, the chair facilitates
constructive board relations and
the effective contribution of all non-
executive directors, and ensures that
directors receive accurate, timely and
clear information.
Corporate governance report on
pages 77 to 81
G.
The board should include an
appropriate combination of executive
and non-executive (and, in particular,
independent non-executive) directors,
such that no one individual or small
group of individuals dominates the
board’s decision-making. There should
be a clear division of responsibilities
between the leadership of the board
and the executive leadership of the
company’s business.
Corporate governance report on
pages 77 to 81
H.
Non-executive directors should have
sufficient time to meet their board
responsibilities. They should provide
constructive challenge, strategic
guidance, offer specialist advice and
hold management to account.
Corporate governance report on
pages 77 to 81
Nomination Committee report on
pages 92 and 93
I.
The board, supported by the company
secretary, should ensure that it has the
policies, processes, information, time and
resources it needs in order to function
effectively and efficiently.
Corporate governance report on
pages 77 to 81
Composition, succession and
evaluation
Principles
J.
Appointments to the board should
be subject to a formal, rigorous and
transparent procedure, and an effective
succession plan should be maintained
for board and senior management.
Both appointments and succession plans
should be based on merit and objective
criteria and, within this context, should
promote diversity of gender, social and
ethnic backgrounds, cognitive and
personal strengths.
The Board considers that the Group has been in compliance with all
the principles and relevant provisions of the Code throughout the
year ended 30 September 2022 and to the date of this report.
Details of how the principles have been applied are as follows:
Governance at a glance
Strategic report
Governance
Financial statements
73
Annual Report and Accounts 2022
Hyve Group plc
Nomination Committee report on
pages 92 and 93
K.
The board and its committees should
have a combination of skills, experience
and knowledge. Consideration should
be given to the length of service of the
board as a whole and its membership
should be regularly refreshed.
Directors’ biographies on pages 75
and 76
Corporate governance report on
pages 77 to 81
L.
Annual evaluation of the board
should consider its composition,
diversity and how effectively members
work together to achieve objectives.
Individual evaluation should demonstrate
whether each director continues to
contribute effectively.
Corporate governance report on
pages 77 to 81
Audit, risk and internal control
Principles
M.
The board should establish formal
and transparent policies and procedures
to ensure the independence and
effectiveness of internal and external
audit functions and satisfy itself on the
integrity of financial and narrative
statements.
Audit Committee report on pages 85
to 89
N.
The board should present a fair,
balanced and understandable
assessment of the company’s position
and prospects.
Strategic report on pages 1 to 71
Audit Committee report on pages 85
to 89
Directors’ responsibility statement on
page 128
Financial statements on pages 129
to 208
O.
The board should establish
procedures to manage risk, oversee
the internal control framework and
determine the nature and extent of the
principal risks the company is willing to
take in order to achieve its long-term
strategic objectives.
Audit Committee report on pages 85
to 89
Risk Committee report on pages 90
and 91
Principal risks and uncertainties on
pages 50 to 58
Remuneration
Principles
P.
Remuneration policies and practices
should be designed to support strategy
and promote long-term sustainable
success. Executive remuneration should
be aligned to company purpose and
values and be clearly linked to the
successful delivery of the company’s
long-term strategy.
Our strategy on pages 4 to 8
Directors’ remuneration report on
pages 99 to 127
Q.
A formal and transparent procedure
for developing policy on executive
remuneration and determining director
and senior management remuneration
should be established. No director
should be involved in deciding their
own remuneration outcome.
Directors’ remuneration report on
pages 99 to 127
R.
Directors should exercise independent
judgement and discretion when
authorising remuneration outcomes,
taking account of company and
individual performance, and wider
circumstances.
Directors’ remuneration report on
pages 99 to 127
Governance at a glance
continued
Board
composition
Chairman
1
Executive Director
2
Non-Executive Director
2
Non-Executive
Director tenure
0–3 years
1
3–6 years
2
6–9 years
0
9+ years
0
Gender split –
all employees
Male
236 (41.6%)
Female
324 (57.0%)
Prefer not to say
8 (1.4%)
Gender split –
Hyve
leadership team
Male
21 (53.8%)
Female
18 (46.2%)
All data as at 30 September 2022.
74
Hyve Group plc
Annual Report and Accounts 2022
Richard Last
Non-Executive Chairman
Richard joined Hyve Group plc as Chairman
and Non-Executive Director in February
2018. He is a member of the Company’s
Environmental, Social and Governance
Committee. Richard is also the Chairman of
Gamma Communications plc, a leading
supplier of Unified Communications as a
Service (UCaaS) in the UK, German, Spanish
and Benelux business markets; the Chairman
of Tribal Group plc, an international
technology solutions provider for the higher
and further education sectors; and a
Non-Executive Director of Corero Network
Security plc, which develops and implements
cyber security DDOS security systems. In
September 2021, Richard joined the board
of Greenstone+ Ltd, a private company
providing software and solutions which
support sustainability strategies.
Richard, who is a fellow of the Institute of
Chartered Accountants in England and
Wales, is an experienced chairman,
with over 30 years of public company
board experience.
Richard is keen to promote the use of
technology to improve customer experience,
efficiency and profitability. He is also very
passionate about the promotion and
development of young talent and promoting
wider diversity in organisations.
Rachel Addison
Non-Executive Director
Rachel was appointed as a Non-Executive
Director of the Group on 1 March 2022.
She is Chair of Hyve’s Remuneration
Committee and a member of the Risk
and Audit Committees.
Rachel has nearly 30 years of finance and
operational management experience.
Rachel is currently a Non-Executive Director
of the business-critical services and software
provider Marlowe plc, where she is also
Chair of the Audit Committee; a Non-
Executive Director of housing developer and
manager Watkin Jones plc, where she is also
Chair of the Audit Committee and a member
of the Remuneration and Nomination
Committees. Rachel is also a Non-Executive
Director of Gamma Communications plc,
a leading supplier of UCaaS in the UK,
German, Spanish and Benelux business
markets; and a Non-Executive Director of
Mango Publishing Group, an innovative
independent publisher based in Florida,
USA. From July 2020 to October 2021, Rachel
was the Chief Financial Officer at Future plc.
Prior to that she was Chief Financial Officer
at TI Media Limited and has held a number
Board of Directors
of senior financial, operational and board
level roles at Trinity Mirror (now Reach)
Regionals, Local World Limited, Northcliffe
Media Limited and Boots the Chemist;
where she was Head of Risk Management.
Rachel is a chartered accountant and is
a member of the Institute of Chartered
Accountants in England and Wales.
She enjoys working with businesses with
ambitious strategies to innovate and
develop at pace to meet the ever-changing
needs of their customers and consumers.
Nicholas Backhouse
Non-Executive Director
Nicholas was appointed a Non-Executive
Director of the Group on 1 May 2019 and
Chair of the Audit Committee in January
2020. He is also the Senior Independent
Director and a member of the Remuneration
and Risk Committees.
Nicholas has extensive experience at board
level and is currently the Senior Independent
Director of both Hollywood Bowl Group plc
and Loungers plc and the Chairman of the
Giggling Squid restaurant group. He is
a Trustee of Chichester Harbour Trust.
Nicholas has also held positions as Senior
Independent Director of Guardian Media
Group plc and Non-Executive Director of
Marston’s PLC, All3Media Limited, Eaton
Gate Gaming Limited and Chichester
Festival Theatre. Nicholas was previously the
Deputy Chief Executive Officer of the David
Lloyd Leisure Group, Group Finance Director
of National Car Parks and Chief Financial
Officer of both the Laurel Pub Company and
Freeserve PLC. He is a fellow of the Institute
of Chartered Accountants in England and
Wales and has an MA in Economics from
Cambridge University.
Nicholas has significant experience with
companies undergoing operating model
and cultural change.
Strategic report
Governance
Financial statements
75
Annual Report and Accounts 2022
Hyve Group plc
Board of Directors
continued
Mark Shashoua
Chief Executive Officer
Having co-founded the business (then called
ITE Group) in 1991, Mark returned as Chief
Executive Officer in 2017 with a strong vision
for the company’s potential and initiated a
Group-wide transformation to future-proof
the business. That transformation saw the
company radically evolve. It changed from
siloed working to a centralised model of
best practice, from an emerging markets
focus to a portfolio 95% rooted in advanced
economies, and from a sprawling portfolio
of mixed quality products to a streamlined
focus on only market-leading events. This led
to the average revenue per event increasing
more than eight-fold, and attention is
now on expanding the company’s digital
products. Thanks to Mark’s leadership, the
Hyve of today has resilience, diversity and
enormous scalability.
Transforming businesses is in Mark’s DNA
and prior to re-joining Hyve, Mark was
CEO of i2i Events Group, the event arm
of Ascential plc, where he led the
internationalisation and diversification of the
business. It was at i2i that he first adopted a
market leading event only approach that
led to turning a declining business to one of
consistently high organic growth. This was
supplemented by a number of leading
acquisitions including Money20/20, which
grew substantially under his guidance.
Mark is driven by his ambition to reimagine
the events industry, disrupting it through
digitisation. His aim is to transform
everyone’s expectations of what’s really
possible at events and help customers to
realise the game changing possibilities that
Hyve events hold for businesses and beyond.
John Gulliver
Chief Finance and Operations Officer
John was appointed as Chief Finance and
Operations Officer in October 2020 and is
responsible for Hyve’s finance function as
well as Technology & Data, and a number
of other operational functions. He joined
Hyve as Chief Operations Officer in
October 2017 and oversaw the rollout of
the Transformation and Growth (TAG)
Programme including the implementation
and maintenance of our best-practice
operating model across our global portfolio.
Prior to joining, John held senior financial
positions in the media sector, including
Interim CFO at Emap/Top Right Group and
also Divisional CFO at Ascential, as well as
CFO of i2i Events Group from June 2012 to
June 2017, where he worked alongside Mark
Shashoua, CEO. Prior to that, John was
Finance Director at Precise Media from
2008 to 2010.
John’s background in finance and
operational transformation, as well as his
experience in the events sector, underpins his
passion for bringing about positive change
and disruption within the industry. John
enjoys working in a change-led environment
and loves the passion, energy and sense of
achievement that occur as the company,
and the people working within it, realise
their potential.
76
Hyve Group plc
Annual Report and Accounts 2022
This statement, together with the Committee reports, the Strategic report, the
Directors’ report and the s172(1) statement, describes how the principles of the Code
are applied and reports on the Company’s compliance with the Code’s provisions.
The Board
As at 30 September 2022 the Board of Directors (the Board) has five members,
comprising the Non-Executive Chairman, the Chief Executive Officer, the Chief
Finance and Operations Officer and two independent Non-Executive Directors.
During the financial year Stephen Puckett, having completed nine years’ tenure, and
Sharon Baylay, having completed eight years’ tenure, stepped down from the Board,
on 3 February 2022 and 1 March 2022 respectively. On 1 March 2022, Rachel Addison
and Anna Bateson joined the Board. Following her appointment as Chief Executive
Officer of Guardian Media Group, Anna Bateson was required to relinquish all her
non-executive roles and therefore stepped down from the Board on 16 September
2022. We are actively seeking to appoint a new Non-Executive Director.
On 3 February 2022, Nicholas Backhouse was appointed as Senior Independent
Director, replacing Stephen Puckett.
All of the Directors bring strong judgement to the Board’s deliberations. During the
year, the Board has been of sufficient size and diversity that the balance of skills and
experience was considered to be appropriate for the requirements of the business.
The Non-Executive Directors, including the Chairman, are all independent of
management and free from any business or other relationship, including those
relationships and circumstances referred to in provision 10 of the Code that could
materially impair the exercise of independent and objective judgement. The Group
considered that Richard Last was independent on his appointment as Chairman.
Board Committees
There are a number of standing Committees of the Board to which various matters
are delegated. They all have formal Terms of Reference approved by the Board,
which are available on the Group’s website (hyve.group). The Committee reports
are set out on pages 85 to 98.
Role and responsibilities of the Board
The Board has overall responsibility to shareholders for the proper management of
the Group. It met 16 times during the financial year, these include both scheduled and
ad hoc meetings. Regular Board update calls were also held during the year.
Attendance by Directors at the formal Board meetings held during the financial year
is set out below.
Board members
Meeting
attendance
Richard Last (Chairman)
16/16
Rachel Addison
1
11/11
Nicholas Backhouse
16/16
Anna Bateson
2
10/11
Sharon Baylay
3
5/6
John Gulliver
15/16
Stephen Puckett
4
3/3
Mark Shashoua
16/16
1
Rachel Addison joined the Board on 1 March 2022.
2
Anna Bateson joined the Board on 1 March 2022 and stepped down from the Board on 16 September 2022.
3
Sharon Baylay stepped down from the Board on 1 March 2022.
4
Stephen Puckett stepped down from the Board on 3 February 2022.
Details of attendance at Committee meetings can be found in the relevant
Committee reports.
The Board has a formal Schedule of Matters reserved to it for decision-making,
including responsibility for the overall management and performance of the Group.
This includes: development and approval of its strategy; long-term objectives and
commercial initiatives; approval of annual and interim results; annual budgets;
material acquisitions and disposals; material agreements and major capital
commitments; approval of treasury policies and assessment of its going concern
position. During the financial year a detailed review of the formal Schedule of Matters
was undertaken to ensure that it remained fit for purpose. Board discussions are held
in an open and collaborative atmosphere, with sufficient time allowed for debate
and challenge.
Corporate Governance report
The Group is committed to high standards of corporate governance
and supports the principles laid down in the UK Corporate
Governance Code issued by the Financial Reporting Council (FRC)
in July 2018 (the Code).
Strategic report
Governance
Financial statements
77
Annual Report and Accounts 2022
Hyve Group plc
Board meeting agendas are agreed in advance by the Chairman, the CEO and the
Company Secretary. Board members receive appropriate documentation in advance
of each Board meeting, which normally includes a formal agenda, a detailed report
on current trading and full papers on matters which require the Board to make a
decision or give approval. An update from the Chair of each Board Committee is
provided at Board meetings as appropriate. Board papers are delivered through
an electronic platform, improving the efficiency of communications and reducing
paper usage.
There is an established procedure for the preparation and review, at least annually,
by the Board of medium-term plans and the annual budget. Management accounts
are circulated to the Board on a monthly basis and business performance and any
significant variances to budget or reforecast are formally reviewed at scheduled
Board meetings.
During the year, the Chairman met with the Non-Executive Directors without the
Executive Directors present. The Non-Executive Directors also met without the
Chairman or Executive Directors present at a meeting chaired by the Senior
Independent Director.
Board activities during the financial year
In addition to the regular reports from the CEO, the Chief Finance and Operations
Officer, the Chief of Staff and the General Counsel plus the Committee updates and
updates or presentations from other senior members of the leadership team on
relevant matters, the main issues discussed and/or approved during the financial
year included:
Annual budget forecast, and reforecasts;
Acquisition of Fintech Meetup, LLC (including financing);
Acquisition of 121 Group (HK) Ltd and 121 Partners Ltd and associated placing of
shares to fund the acquisition;
Refinancing of debt facilities;
Financial results for the year ended 30 September 2021 and the half year ended
31 March 2022;
Investor feedback on financial results;
Strategy review;
M&A updates;
Disposals, including sale of Russian business;
Reorganisation of corporate structure;
Continued impact of COVID-19 on events in China;
Insurance claims under event cancellation insurance;
Approval of awards granted under the Value Creation Plan (VCP) scheme;
Environmental, Social and Governance strategy, including TCFD implementation;
Internal Board and Committees evaluation;
Board composition;
Directors’ duties under s172 of the Companies Act 2006;
Policy reviews and approvals;
Matters reserved for the Board and division of responsibilities;
Terms of reference for Board Committees; and
Modern Slavery Statement.
The Directors
The biographical details of the Board members are set out on pages 75 and 76.
All of the Directors have occupied, or occupy, senior positions in UK and/or
international listed companies and have substantial experience in business. At all
times at least half the Board, excluding the Chairman, has comprised independent
Non-Executive Directors.
The Non-Executive Directors were all appointed for an initial three-year term. As set
out in provision 18 of the Code, the Non-Executive Directors (in common with the
Executive Directors) will be subject to re-election each year by shareholders at the
Company’s Annual General Meeting, providing the Board continues to be satisfied
that they remain independent. All five Directors will offer themselves for re-election.
The Board believes that the five Directors continue to be effective in their roles and
believes that the Group and its shareholders should support their re-election at the
Annual General Meeting scheduled for 1 February 2023.
The Non-Executive Directors do not participate in any of the Group’s pension
schemes or in any of the Group’s bonus, share option or other incentive schemes.
Corporate Governance report
continued
78
Hyve Group plc
Annual Report and Accounts 2022
The Chairman and Chief Executive Officer
The different roles of the Chairman and Chief Executive Officer are acknowledged.
The division of responsibilities statement was reviewed and revised during the
financial year.
For the Chairman, those responsibilities include, among other matters, setting an
agenda focused on strategy, performance, people and governance; ensuring that the
members of the Board receive high-quality, accurate, timely and clear information;
and shaping the culture of the Board and leading meetings that promote open and
constructive debate among all directors.
For the Chief Executive Officer, those responsibilities include, among other matters,
developing and proposing Hyve’s strategy to the Board and delivering that strategy;
keeping the Board updated on progress against the agreed strategy; and providing
leadership to management and other employees to promote Hyve’s desired culture,
values and behaviour.
The review of the responsibility statement included the addition of the key
responsibilities for the Senior Independent Director and for the Designated
Non-Executive Director for gathering the views of Hyve’s workforce. A copy of the
responsibility statement is available on the Group’s website (hyve.group) or can
be obtained from the Company Secretary.
Board effectiveness review
In FY21 an external independent evaluation of the Board and its Committees was
conducted by Kieran Moynihan, managing partner of Board Excellence, a company
with no connection to Hyve or any of its directors.
The key recommendations from the evaluation included:
The recruitment of additional Non-Executive Directors with a focus on greater
Board diversity;
A more formalised induction process for new board directors;
A review of the process for reviewing Group-wide policies and other critical policies;
and
The expansion of the Group’s ESG policies, business adoption and reporting.
In March 2022 the Board appointed two Non-Executive Directors resulting in an
increase in female representation on the Board from 16.7% to 33.3%. As noted above,
Anna Bateson stepped down from the Board in September 2022 which has reduced
level of female representation to 20%. The Nomination Committee continues to seek
to appoint additional Non-Executive Directors with an ongoing focus on greater
board diversity.
The Company Secretary prepared and implemented an extensive and detailed
induction process for the new Non-Executive Directors who joined the Board in
March 2022. This process included meetings with leaders of functions and operating
divisions across the business, detailed briefings on strategy, an introduction to the
Group’s key policies, an explanation of the workings of the Board and its Committees
and the opportunity to attend one or more of the Group’s key events.
The Group has made significant progress on ESG matters. More detail can be found
on pages 94 and 95.
During the financial year an internal evaluation of the Board and its Committees
was undertaken. The evaluation required the completion of the same online
questionnaire from the FY21 external evaluation (extended to include a new section
on ESG) by the Board directors only. The questionnaire covered a wide range of
areas including (but not limited to) the performance of the Board and its Committees,
Board composition and succession planning, corporate governance, organisational
culture and the performance of the Executive Team and its execution of the Group’s
strategy. The consensus was that the Board is operating effectively, a key contributor
to this effectiveness being the high quality of the Board papers and the flow of
information provided by management. It was felt that during Board meetings
there is an appropriate balance between time spent on performance, strategic,
operational, risk and governance issues and that the Chairman allows and
encourages sufficient time for open and constructive debate. Key areas of focus for
FY23 are the improvement of Board diversity and greater engagement between
the Board and the workforce.
As part of the evaluation process, the Chairman met with the Non-Executives
individually to discuss performance and to consider areas for development/training.
Following these discussions, the Chairman confirmed that each Director continues to
make a valuable contribution to the Board and devotes sufficient time to their role.
The Chairman’s evaluation was undertaken by the Senior Independent Director,
taking into account the views of the other Directors. The Senior Independent Director
provided feedback to the Chairman.
Strategic report
Governance
Financial statements
79
Annual Report and Accounts 2022
Hyve Group plc
Support and advice
The Board has access to the advice and services of the Company Secretary, who is
responsible for ensuring that all Board procedures have been complied with. The
Board has approved a procedure for all Directors to take independent legal and
financial professional advice at the Company’s expense, if required to support the
performance of their duties as Directors of the Group. No such advice was sought
by any Director during the year.
Training and development
An induction programme is arranged for newly appointed Directors, which includes
presentations on the business, current strategy and shareholder expectations.
Guidance is also given on the duties, responsibilities and liabilities of a director of
a listed company and key Board policies and procedures. Business familiarisation
involves Directors visiting exhibitions in markets in which the Group operates to gain
a greater understanding of the Group’s activities and to meet senior managers
throughout the business.
Every Director is encouraged to continue their own professional development through
attendance at seminars and briefings.
Conflicts of interest
The Company’s articles of association, in line with the Companies Act 2006, allow
the Board to authorise potential conflicts of interest that may arise and impose limits
or conditions as appropriate. The Group has established a procedure whereby
any decision of the Board to authorise a conflict of interest is only effective if it is
agreed without the conflicted Director(s) voting or without their votes being counted.
In making such a decision, the Directors must, as always, act in a way they consider
in good faith to be most likely to promote the success of the Group.
The Company has a Conflicts of Interest Policy which sets out for all employees across
the Group the actions that are expected from them in the event that a potential
conflict of interest arises.
Shareholder relations
Details of shareholder engagement can be found in the s172(1) statement on pages 62
to 68. A trading update will be released on the day of the Annual General Meeting,
which is scheduled to take place on 1 February 2023. Previous trading updates and
other announcements and press releases can be found on the Group’s website
(hyve.group).
Strategic report and principal risks and uncertainties
The Strategic report set out on pages 1 to 71 details the financial performance of the
Group. The principal risks and uncertainties the Group identifies and monitors are laid
out on pages 50 to 58.
Our commitment to compliance
Hyve is committed to building and maintaining a culture of compliance and effective
governance. The Group’s Code of Conduct clearly sets out what is expected from
every person working for, and with, our businesses, anywhere in the world. The Code
of Conduct, like most of our policies, is provided in a variety of relevant languages on
the Company’s intranet. Underpinning the Code of Conduct is a strong global policy
framework covering areas such as anti-bribery and corruption, gifts and hospitality,
whistleblowing and modern slavery/human trafficking. Over the course of the
financial year updates to all of the Group’s compliance policies have been
undertaken. Those updates have the changing macro environment relevant to
Hyve and the reflected changes in the structure and scale of the Hyve business.
Policies are also reviewed regularly to ensure information, points of contact,
language, terminology and explanations are correct, clear and concise, as well
as ensuring the correct use of pronouns, inclusive language and routes to raise
questions and suggest improvements.
Furthermore, in its holistic approach to compliance Hyve operates a framework of
policies and codes addressing related matters, including conflicts of interest, share
dealing codes, market abuse policies and procedures and a variety of supplemental
data and personnel policies.
Whistleblowing arrangements
The Group adopted a new Whistleblowing Policy in FY20, with such Policy being
reviewed and updated during each prior financial year, including this one, to ensure
that it remains fit for purpose. Since 2019 the Group has provided a fully independent
whistleblowing service. The appointment of an independent partner to manage a
fully confidential whistleblowing service allows for anyone to raise their concerns,
anonymously if preferred, in their language of choice. The availability of this
language functionality is provided in order to reduce any perceived barriers to the
reporting of concerns. The Policy also sets out the various other channels available to
personnel and external parties through which concerns relating to compliance with
our policies and illegal or unethical behaviour in our business or supply chains can
be raised.
Corporate Governance report
continued
80
Hyve Group plc
Annual Report and Accounts 2022
Anti-Corruption Policy
Hyve takes a zero-tolerance position in relation to all bribery and corruption,
wherever and in whatever form that may be encountered. The Anti-Corruption
Policy (adopted in 2019 and updated annually as a minimum) applies to all individual
employees, agents, sponsors, intermediaries, consultants and any other people or
bodies associated with Hyve or any of our subsidiaries and employees, and it sets
out their responsibilities in terms of charity donations and sponsorships, facilitating
payments, gifts and hospitality. The prevention, detection and reporting of bribery
and corruption is the responsibility of all of our employees. Awareness of the Policy
is assessed as part of the internal audit process.
Our Gifts and Hospitality Policy requires business units to maintain a gift and
hospitality register which records information such as the name of the receiver of the
gift or hospitality and the estimated value of the gift or hospitality. To ensure ease of
access for reporting, all registers are available electronically via the Group’s internal
pages, ‘the Buzz’, which are accessible to all. The registers are controlled and
accessed by a limited group for internal auditing purposes. The rollout of this online
reporting tool for gifts and entertainment began in September 2021 and continues
to date. Questions in relation to gifts and hospitality receipts are addressed by the
General Counsel as required, with screening of internal parties (for donations or
charitable nominations) being undertaken by the Group’s legal advisers from time
to time.
Human rights
We are committed to treating all our employees, world-wide, with dignity and
respect. We recognise that we operate in many different markets with diverse
cultures and we respect those differences while being committed to supporting
and upholding the provision of basic human rights and eliminating discriminatory
practices. We respect the dignity of all individuals and seek to enable all of our
employees to perform and deliver their best work by accepting and valuing different
talents, experiences and backgrounds.
Sitting within its Code of Conduct, Hyve’s Human Rights Policy emphasises our
commitment to basic human rights in the way we do business. We support our
employees in creating and maintaining a work culture which prohibits forced
labour and ensures the human rights of all employees. This Policy also provides for
maintaining an environment that fosters open and direct communication between
managers and employees as the most effective way to work together for the
resolution of differences, and respects employees’ rights to participate in collective
bargaining via unions should they so choose. Employees are expected to report any
behaviour that violates this Policy.
Modern slavery
Hyve recognises that human rights violations, including forced labour and trafficking,
can occur in all sectors and countries. As a responsible business, we are committed
to playing our part to help eliminate such violations. Our Modern Slavery Statement
details the steps we take to help prevent any incidence of modern slavery, both in our
own business and in our supply chains. It is available at the following address: hyve.
group/Responsibility/Modern-Slavery-Statement. Hyve elects to file its Modern
Slavery Statement annually with the UK Government’s Modern Slavery Statement
Registry. The Group has an Anti-Slavery and Human Trafficking Policy in place. Again,
this is available in multiple languages. The Policy gives workers, contractors and other
business partners guidance on identifying, reporting and preventing Modern Slavery
and clearly states the measures in place to tackle Modern Slavery in its business
and supply chains. Hyve also undertook an assessment of its current risks in this
area based upon the findings of the Global Slavery Index Report, which was made
available to the Group’s Risk Committee.
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Annual Report and Accounts 2022
Hyve Group plc
Principal activities and review of the business
The main subsidiary and associate undertakings which affect the profits or net
assets of the Group in the year are listed in note 5 to the financial statements of the
Company and note 18 to the financial statements of the Group.
Details of the Group’s performance during the year and expected future
developments are contained in the Chief Executive’s report on pages 9 to 12, the Chief
Finance and Operations Officer’s statement on pages 33 to 43 and the Divisional
trading summary on pages 44 to 49. Details of the Group’s Risk Committee report are
on pages 90 and 91 and the Principal risks and uncertainties are on pages 50 to 58.
Financial risk management
Details of the Group’s financial risk management is given in note 23 to the
consolidated accounts.
Results and dividends
The audited accounts for the year ended 30 September 2022 are set out on pages 139
to 208. The Group loss for the year, after taxation, was £58.8m (2021: loss of £20.0m).
As stated in the interim results announcement, which was issued on 24 May 2022, the
suspension of dividends (announced in May 2020) remains in place and will be kept
under review.
Capital structure
Details of the Company’s issued share capital and movements during the year are
shown in note 25 to the financial statements of the Group. The Company has one class
of ordinary shares which carry no right to fixed income. Each share carries the right to
one vote at general meetings of the Company.
There are no specific restrictions on the size of a holding or on the transfer of shares,
which are both governed by the general provisions of the articles of association
and prevailing legislation. The Directors are not aware of any agreements between
holders of the Company’s shares that may result in restrictions on the transfer of
securities or on voting rights. No person has any special rights of control over the
Company’s share capital and all shares are fully paid.
Details of employee share schemes are set out in note 28 to the financial statements
of the Group. The Trustee of the Hyve Group Employees Share Trust is not permitted
to vote on any unvested shares held in the Trust unless expressly directed to do so by
the Company. A dividend waiver is in place in respect of the Trustee’s holding, apart
from the shares which are held in the Trust as part of the Directors’ Deferred Bonus
Share Plan.
There are a number of agreements that take effect, alter or terminate upon a change
of control of the Company, such as commercial contracts, bank facility agreements,
property lease arrangements and employee share plans. None of these are
considered to be significant in terms of their likely impact on the business of the Group
as a whole. Furthermore, the Directors are not aware of any agreements between the
Company and its Directors or employees that provide compensation for loss of office
or employment that occurs because of a takeover bid.
Articles of Association
The Company’s articles of association may be amended by a special resolution at a
general meeting of the shareholders. At the AGM on 1 February 2023, shareholders
will vote on the proposed amendment to Article 98 of the Company’s Articles of
Association, to increase the aggregate fee limit from £450,000 to £600,000.
The Directors
The Directors who served during the year were as follows:
Executive Directors
Mark Shashoua
John Gulliver
Directors’ report
The Directors have pleasure in submitting their report
and the audited financial statements for the year ended
30 September 2022.
82
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Annual Report and Accounts 2022
Non-Executive Directors
Richard Last – Chairman
Rachel Addison (appointed 1 March 2022)
Nicholas Backhouse
Anna Bateson (appointed 1 March 2022; resigned 16 September 2022)
Sharon Baylay (resigned 1 March 2022)
Stephen Puckett (resigned 3 February 2022)
Sharon Baylay and Stephen Puckett stepped down from the Board, as they had
completed eight-and-nine-year tenures respectively. Anna Bateson stepped down as
a Non-Executive Director due to her appointment as CEO of Guardian Media Group:
on appointment she was required to resign all Non-Executive roles. The biographical
details of the Board of Directors (as at the date of signing this report) are set out on
pages 75 and 76.
In accordance with its articles of association and in compliance with the Companies
Act, the Company has granted a qualifying third-party indemnity to each Director.
Directors’ and officers’ insurance cover is also provided by the Company, in line with
normal market practice, for the benefit of Directors in respect of claims arising in the
performance of their duties.
Company Directors’ shareholdings
The Directors who held office at 30 September 2022 had the following interests
(including family interests) in the ordinary shares of the Company:
Name of Director
Number of
shares as at
30 September
2022
Number of
shares as at
30 September
2021
Executive Directors
Mark Shashoua
838,747
637,594
John Gulliver
148,962
59,735
Non-Executive Directors
Richard Last
305,163
195,000
Nicholas Backhouse
16,250
16,250
Rachel Addison
0
N/A
The Directors, as employees and potential beneficiaries, have an interest in up to
815,470 (2021: 1,643,128) shares held by the Hyve Group Employees Share Trust at
30 September 2022. The Hyve Group Employees Share Trust held 671,757 (2021:
771,375) ordinary shares at 30 September 2022.
In line with the Company’s approved Directors’ Remuneration Policy, Executive
Directors are required to defer a third of the value received under the Group’s Bonus
Plan, which is held in the Hyve Group Employees Share Trust. Details of the Annual
Bonus payments due to Executive Directors are set out on page 107 of the report.
Company’s shareholders
At 30 November 2022, the Company had been notified under Rule 5 of the Financial
Conduct Authority’s Disclosure and Transparency Rules of the following interests in its
ordinary shares:
Name of holder
Number of
shares
Percentage
held
Strategic Value Partners
47,775,625
16.38%
Helikon Investments
1
43,754,878
15.00%
RWC Partners
33,791,252
11.59%
Goldman Sachs
16,499,702
5.66%
JPMorgan Securities
16,169,551
5.54%
Jupiter Asset Management
15,848,275
5.43%
Aberforth Partners
13,701,158
4.70%
Amiral Gestion
13,494,775
4.63%
Wellington Management
12,406,505
4.25%
Janus Henderson Investors
11,182,013
3.83%
UBS
10,354,295
3.55%
1
This relates to CfD holding only.
Authority to purchase the Company’s shares
At the Annual General Meeting on 3 February 2022, shareholders authorised the
Company to make one or more market purchases of up to 29,164,090 of the
Company’s ordinary shares to be held in treasury at a price between 10.0p (exclusive
of expenses) and 105% of the average closing middle market price of a share for the
five business days immediately preceding the date on which the share is purchased.
No purchases were made during the year and the Directors propose to renew this
authority at the 2023 Annual General Meeting.
Charitable and political donations
The Group made £38,312 of charitable donations (2021: £21,309) during the year.
No political donations were made (2021: nil).
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Annual Report and Accounts 2022
Hyve Group plc
Employees
The Group’s people strategy is to attract, develop and retain high-performing,
motivated and talented employees and enable them to achieve brilliant results.
The Group cascades the key priorities and business objectives throughout the
organisation, ensuring that employees understand how their personal contribution
supports the Group’s success. The Group links incentives to delivering on objectives,
and the Remuneration Policy is designed to reinforce this approach. The Group
places great importance on the growth and development of its people to support
the business in meeting its objectives. This is reflected through the Performance
Management Framework, which encourages year-round continuous feedback,
and the resulting learning and development initiatives.
It is the Group’s policy to fully consider applications for employment from anyone
qualified to apply, regardless of their status, disability, age, gender, gender
identification or expression, sexual orientation or belief. To reflect this policy,
opportunities for career progression and development are offered on merit and
regardless of the factors noted above. In the event of a member of staff becoming
disabled, every effort would be made to ensure their continued employment and
progression in the Group, and it is Group policy that training, career development and
promotion of disabled employees match that of other employees as far as possible.
More information on our employees can be found in the ‘Our people and values’
section on pages 19 to 21 and in the Section 172(1) statement on pages 62 to 68.
Supplier payment policy
The Company’s policy, which is also applied to the Group, is to agree payment terms
with suppliers when entering into each transaction to ensure that suppliers are made
aware of the terms of payment and abide by the terms of payment. Hyve Group plc
has no trade creditors. Trade creditors of the Group (consolidated) at 30 September
2022 were equivalent to 12 days’ (2021: 10 days) purchases, based on the average
daily amount invoiced by suppliers during the year.
Annual General Meeting
The notice convening the Annual General Meeting to be held at 09:00am on 1 February
2023 is contained in a circular sent to shareholders at the same time as this report.
Auditor
BDO LLP was appointed as the Group’s new auditor at the Company’s Annual
General Meeting held on 23 January 2020. The Committee believes that BDO LLP has
a strong team with the skills and experience to provide rigour and challenge in the
audit. A resolution to reappoint BDO LLP as the Company’s auditor and to authorise
the Directors to determine the auditor’s remuneration will be proposed at the
Company’s Annual General Meeting in February 2023.
Post-balance-sheet events
On 20 October 2022, the Group completed the refinancing of its debt facilities. The
new debt facilities, totalling £135m, comprise a £115m, term loan and a £20m super
senior revolving credit facility. The new debt facilities replace the Group’s previous
debt facilities, and the £101m drawn down as at 30 September 2022 was repaid in
full on 20 October 2022 when the new funds were drawn. In advance of the debt
refinancing, on 10 October 2022, the Group terminated its interest rate swap contract
which was due to expire in November 2022.
On 24 October 2022, the Group completed the disposal of Hyve Fuarcılık Anonim
Şirketi and its subsidiaries (‘the Turkish business’) for consideration of up to £8m to
ICA (JV) Limited. The Group has received upfront consideration of £2.0m in respect of
the disposal and expects to receive between £4m and £6m of deferred contingent
consideration, payable over the six-year period until December 2028 based on the
profitability of the Turkish business. The assets and liabilities of the Turkish business
have been classified as held for sale as at 30 September 2022 in accordance with
IFRS 5, ‘Non-Current Assets Held for Sale and Discontinued Operations’.
Fair, balanced and understandable statement
Each of the Directors considers that the annual report taken as a whole is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Company’s performance, business model and strategy.
Directors’ statement as to disclosure of information to auditors
Each Director of the Company at the date when this report was approved confirms:
So far as he/she is aware, there is no relevant audit information (as defined by the
Companies Act 2006) of which the Company’s auditors are unaware; and
He/she has taken all the steps that he/she ought to have taken as a Director to
make himself/herself aware of any relevant audit information and to establish that
the Company’s auditors are aware of that information.
This confirmation is given in accordance with section 418 of the Companies Act 2006.
John Gulliver
Chief Finance and Operations Officer
13 December 2022
Directors’ report
continued
84
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Annual Report and Accounts 2022
The Audit Committee (the Committee)
was in place throughout the financial
year and is chaired by Nicholas
Backhouse. The Board considers that
Nicholas has the appropriate financial
expertise, as required by provision 24 of
the UK Corporate Governance Code (the
Code), as he is a Chartered Accountant,
has held executive roles in financial
positions in other companies and has
chaired other listed companies’ Audit
Committees. All members of the
Committee are independent Non-
Executive Directors and they are
considered to provide a wide range of
international, financial and commercial
expertise necessary to fulfil the
Committee’s duties. Members of the
Committee are appointed by the
Board, on the recommendation of the
Nomination Committee in consultation
with the Chairman of the Audit
Committee, for an initial period of three
years, which can then be followed by
an additional two further three-year
periods. All Committee members played
an active role in all Committee meetings
held throughout the year.
All members of the Board have an open
invitation to attend Committee meetings.
Representatives of BDO, the external
auditor, attend each meeting along with
the Chief Finance and Operations Officer,
the Group Finance Director and the
Company Secretary, unless there is a
conflict of interest. Other relevant people
from the business are also invited to
attend certain meetings or parts of
meetings to provide a deeper level of
insight into certain key issues and
developments. The Chairman of the
Committee reports to the Board, as
part of a separate agenda item, on the
activity of the Committee and matters of
particular relevance to the Board in the
conduct of their work.
The Chairman of the Committee has also
held meetings with the Chairman of the
Board, the Chief Executive Officer, the
Chief Finance and Operations Officer
and other members of management
and the finance team during the year
to identify matters which require
meaningful discussion at Committee
meetings. He also meets the external
audit partner privately to discuss any
matters they wish to raise or concerns
they have.
Terms of Reference
The Audit Committee’s Terms of
Reference are available on the Group’s
website (hyve.group) or can be obtained
from the Company Secretary. The Terms
of Reference are reviewed annually and
presented to the Board for approval.
Audit Committee report
Committee members
Meeting
attendance
Nicholas Backhouse
(Chair of the Committee)
7/7
Rachel Addison
1
2/2
Anna Bateson
2
2/2
Sharon Baylay
3
5/5
Stephen Puckett
4
4/5
1
Rachel Addison was appointed as a member of the Committee
w.e.f. 8 March 2022.
2
Anna Bateson was a member of the Committee from 8 March
2022 to 16 September 2022.
3
Sharon Baylay stepped down from the Committee w.e.f.
1 March 2022.
4
Stephen Puckett stepped down from the Committee w.e.f.
3 February 2022.
Audit Committee responsibilities include:
Reviewing the integrity of the
Group’s financial statements and
reporting to and advising the Board
on whether the Committee believes
the Annual Report and Accounts,
taken as a whole, are fair, balanced
and understandable and provide
the information necessary for
shareholders to assess the Group’s
performance, business model and
strategy;
Monitoring compliance with relevant
statutory and listing requirements;
Reporting to the Board on the
appropriateness of the accounting
policies and practices;
Overseeing the relationship with the
external auditor, advising the Board
on the appointment of the external
auditor, agreeing their audit scope
and audit fees and assessing the
independence and effectiveness of
the external audit process;
Reviewing the effectiveness of
the Group’s internal controls and
assessing the effectiveness of the
Group’s internal audit provider
and process; and
Monitoring the Group’s
whistleblowing, bribery
prevention and fraud detection
policies and processes.
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Hyve Group plc
Effectiveness Evaluation
During the financial year, an internal
evaluation of the Committee was
undertaken reusing the questionnaire
prepared for the FY21 external
evaluation. The questionnaire was
completed by all Board members. The
consensus was that during the financial
year the Committee had effectively
discharged its responsibilities in regard
to financial reporting, internal controls,
internal audit and the external audit.
It was felt that the Committee has
strong oversight of the appropriateness
of the Group’s accounting policies,
management’s material estimates
and judgements, the clarity and
completeness of the disclosures in the
financial statements and the quality of
the Group’s finance teams. More details
about the evaluation of the Board and its
Committees can be found on page 79.
The role and responsibilities of the
Committee
The Board Committee meets at least
three times a year and as and when
required. The Committee is responsible
for monitoring the integrity of the
financial statements of the Company and
any formal announcements relating to
the Company’s financial performance,
and for providing effective corporate
governance over the appropriateness
of the Group’s financial reporting.
The Committee works with the Risk
Committee, and this ensures effective
and sufficient coverage of financial
reporting risks within the Group’s risk
management processes.
While geopolitical issues and travel
restrictions have made it difficult for the
individual members of the Committee
to visit some of the Group’s offices and
events, the members have held regular
meetings with the management teams of
the Group’s overseas offices, in addition
to holding regular meetings with Group
management and senior members of
the finance team to follow up on any
matters pertaining to the overseas
offices identified by either external or
internal audits.
Activities during the financial year
Seven meetings were held during the year, with the following areas of focus:
Meeting
Key areas of focus
19 October 2021
The final external audit plan for the year ended
30 September 2021 and an early view of key judgements
and audit matters in advance of the year-end audit
commencing
8 November 2021
Discussion of the FRC’s Audit Quality Review on the external
audit of the Group for the year ended 30 September
2020 and how the external auditor planned to address
the findings in the audit approach for the year ended
30September 2021
24 November 2021
Progress of the year-end audit and the findings up to the
date of the meeting
1 December 2021
The review of the Group’s full year results for the year
ended 30 September 2021 and an update on the progress
of the year-end audit and findings to date and the external
auditor’s year-end report
10 December 2021
The final review of the Group’s full year results for the year
ended 30 September 2021 prior to the Board’s approval and
the external auditor’s finalised year-end report
12 May 2022
The review of the Group’s interim results for the period
ended 31 March 2022 and the external auditor’s interim
review report
30 June 2022
The external auditor’s scope and plan for the audit of the
year ended 30 September 2022
Three Committee meetings were held subsequent to the period end and focused on:
Meeting
Key areas of focus
18 October 2022
The final external audit plan for the year ended
30 September 2022 and an early view of key judgements
and audit matters in advance of the year-end audit
commencing
30 November 2022
The review of the Group’s full year results for the year
ended 30 September 2022 and an update on the progress
of the year-end audit and findings to date and the external
auditor’s year-end report
7 December 2022
The final review of the Group’s full year results for the year
ended 30 September 2022 prior to the Board’s approval
and the external auditor’s finalised year-end report
Audit Committee report
continued
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Hyve Group plc
Annual Report and Accounts 2022
During the year and subsequent to the
period end prior to the approval of the
full year results for the year ended
30 September 2022, in addition to the
areas of focus above, the Committee
focused on the following:
1. Alternative performance measures,
ensuring an appropriate balance
between the prominence given to
statutory and adjusted results;
2. The presentation of adjusting items;
3. Acquisition accounting in respect of
the 121 Group and Fintech Meetup
acquisitions;
4. Accounting treatment for disposals
completed during the year or
subsequent to the period end,
including the Russia, Ukraine and
Turkey disposals;
5. The impairment review of goodwill
and acquired intangible assets;
6. Tax provisions, the recoverability of
deferred tax assets and transfer
pricing;
7. The effectiveness of the Group’s
internal controls and risk management;
8. Internal audit, including a review of
the scope, timetable and reports
issued during the year;
9. The progress made by management
in addressing findings from the
internal and external auditors as a
result of their respective audit work;
and
10. An assessment of the appropriateness
of the going concern and long-term
viability statements.
In assessing the appropriateness of the
financial statements, the Committee
concentrated on the key matters
summarised below. These were
discussed with the external auditor,
BDO, throughout the year and at the
Committee meetings as well as during
the year-end audit.
Impairment of goodwill, intangible
assets and investments
This involves measuring the carrying
value of goodwill, intangible assets and
investments against the value in use of
each of the cash generating units (CGUs)
and investments. There are a number of
judgements and estimates to consider in
the value in use calculations, principally
regarding the forecast cash flows, the
discount rates used and the long-term
growth rates applied. Forecast cash
flows are based on the Board-approved
budget and three-year plan. Discount
rates are selected to reflect the risk-
adjusted cost of capital for the respective
territories. Growth rates reflect
management’s view of the long-term
forecast rates of growth using third-
party sources such as the International
Monetary Fund’s World Economic
Outlook reports. Impairment charges of
£2.1m have been recognised during the
year in respect of Fin-mark Srl, which
previously organised the Aquatherm
event in Ukraine. No other impairment
charges have been recognised on
goodwill, intangible assets and
investments and the Committee is
satisfied that each of the Group’s
CGUs has a value in use in excess of
the carrying value of its assets.
Acquisition accounting
Following the acquisitions of 121 Group
and Fintech Meetup in the year, there is a
level of judgement involved in identifying
and valuing the assets acquired through
business combinations. The Committee
assesses the processes used in the
identification and valuation of acquired
assets and liabilities, including the
reasonableness of any assumptions
used. The Committee also assesses
the purchase price allocation of
consideration and the allocation
between goodwill and identified
intangible assets. The Committee
reviewed management’s papers, the
acquisition accounting calculations and
underlying estimates and assumptions
for the 121 Group and Fintech Meetup
acquisitions. The Committee agreed that
the assets and liabilities were recognised
at their fair value at acquisition.
Disposal accounting
The Committee has considered the
Group’s accounting in respect of the
disposal of the Russian business,
including the judgements involved in
valuing the contingent consideration
payable and the treatment of the Russian
business as a discontinued operation.
The Committee reviewed management’s
papers and the underlying assumptions
for the disposal and is satisfied that
contingent consideration has been
recognised at fair value at disposal.
Alternative performance measures
Consideration has been given to whether
there is an appropriate balance between
the prominence given to statutory results
and alternative performance measures
in the Annual Report. Separately
disclosed items of income and
expenditure have been presented as
adjusting items to allow a set of headline
results to be presented in addition to
statutory results. The FRC thematic
reviews and ESMA guidelines on
alternative performance measures
have been used when considering the
appropriateness of the adjusting items,
the alternative performance measures
presented and the disclosures in the
Annual Report. The Committee is
satisfied that the disclosures included in
the Annual Report are fair and balanced.
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Annual Report and Accounts 2022
Hyve Group plc
Going concern and viability
The Committee has reviewed the Group’s
assessment of going concern over a
period greater than 12 months. In
assessing the Group’s going concern
status as well as its viability over a
four-year period, the Committee has
considered the Group’s financial position
presented in the Group’s Budget plus
Three Year Plan (the Budget for the
year ending 30 September 2023 plus
forecasts for the subsequent three
financial years) recently approved by the
Board. In the context of the challenging
macroeconomic environment,
recessionary risks in a number of the
Group’s geographies and the possibility
of further COVID-19 restrictions in China,
a number of alternative scenarios have
also been considered, including the
modelling of additional downside
sensitivities. These were based on the
potential financial impact of a recession,
taking account of the relative strength of
the industries and geographies that the
Group’s events operate in and how
exposed they could be to an economic
downturn, in addition to further event
cancellations in China over the coming
months. The Committee has concluded
that the assumptions considered are
appropriate when assessing the Group’s
going concern status and longer-term
viability. The Committee has also
reviewed the Group’s reverse stress
test in a further downside scenario. In
addition, the Committee has reviewed
this with management and is satisfied
that this is appropriate in supporting
the Group as a going concern. The
Committee received regular updates on
the steps taken by management prior
to the going concern assessment being
made, including the refinancing of the
Group’s debt facilities completed in
October 2022.
Internal control and risk
management
The Internal Audit function is outsourced
to PricewaterhouseCoopers (PwC), who
provide independent assurance through
planned audit activities on a rotational
basis, assessing whether the controls
in place are adequately designed
and implemented and making
recommendations for improvement.
The Committee annually approves the
schedule and scope of upcoming internal
audit reviews over a two-to-three-year
period, ensuring that the planned work
covers the Group’s key risk areas,
primary markets and certain key
financial controls. During the year, PwC
performed internal audit reviews at the
Group’s offices in London, Brazil and
India, in addition to a review of the
Group’s primary finance system.
The reports, findings and
recommendations are presented for the
Committee’s review at the meetings held
throughout the year. The Committee
reviews the reports and considers
progress against the recommendations.
The Group operates across a number of
territories and the role of internal audit
and the follow-up process on the findings
in internal reports are important parts of
the Group’s overall control environment.
The effectiveness of the internal control
process is assessed throughout the year
through discussions with head office,
local management teams and others
involved in the process.
The Group maintains an internal
controls matrix, identifying all financial,
operational and compliance controls in
place across the Group. The matrix was
updated in the year to ensure that all
key controls identified were either in
the scope of PwC’s internal audit
reviews or were sufficiently reviewed
by Group management.
The findings of internal audit and Group
management reviews were presented
to the Committee, who found the
current internal controls process to
be operating effectively.
The Group’s risk management process
is covered in detail in the report of the
Risk Committee on pages 90 and 91.
External audit
The effectiveness of the 2021 external
audit process was formally assessed by
the Committee at the beginning of 2021.
Feedback was sought from various
participants in the process (Audit
Committee members, Executive
Directors, members of the finance team
and management of subsidiary units).
The effectiveness of the audit partner
and the audit team, as well as their
approach to audits, including planning
and execution, communication, support
and value, was assessed and discussed.
Overall, the effectiveness of the external
audit process was assessed to be
performing as expected.
During the year, the Audit Committee
also considered the findings of the FRC’s
Audit Quality Review on BDO’s audit
of the Group for the year ended
30 September 2020, which was published
on 24 September 2021. In particular,
the Audit Committee reviewed BDO’s
proposed approach to addressing the
points raised and how this had been
incorporated into the audit approach
for the year ended 30 September 2022.
Sandra Thompson replaced Andrew
Viner as the Lead Audit Partner in the
current year, following his rotation from
the audit. Sandra is an experienced Audit
Partner, having worked for 30 years in
the profession and spent time as a
Audit Committee report
continued
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Annual Report and Accounts 2022
Global Chief Financial Officer of an
AiM-quoted company. She brings with
her a wealth of experience across many
sectors, with her specialism more latterly
in the Technology & Media arena.
The effectiveness of the external audit
process is dependent on appropriate
audit risk identification at the start of
the audit cycle. A detailed audit plan is
received from the auditor, which sets out
the key risks identified. For the financial
year ended 30 September 2022, the
primary risks identified by BDO were
as set out on pages 132 to 134.
BDO provided the Committee with their
views on these issues at the Committee
meetings held to consider the financial
statements. In addition, they provided the
Committee with details of any identified
misstatements greater than £32,000
and any other adjustments that
were qualitatively significant which
management had not corrected on the
basis that the misstatements were not,
individually or in aggregate, material.
Private meetings were held with BDO
throughout the year to provide additional
opportunities for open dialogue and
feedback from the Committee and the
auditor without management being
present. Matters discussed were the
preparedness and efficiency of
management with respect to the
audit, the capabilities of the financial
management team, confirmation that
no restriction on scope had been placed
on them by management and how they
had exercised professional judgement.
During the year, BDO and member firms
of BDO charged the Group £764,000
(2021: £728,000) for audit and audit-
related services.
Non-audit services
To safeguard the objectivity and
independence of the external auditor
from becoming compromised, the
Committee has a formal policy
governing the engagement of the
external auditor to provide non-audit
services. No material changes have
been made to this policy during the year.
Non-audit fees on any project regardless
of size, with the exception of assurance
services in respect of the half-year
review, are submitted for approval by
the Committee Chairman, who must
report to the Committee on the use of
this delegated authority at the next
Committee meeting.
Our policy ensures that the Committee
challenges the decision to use the
external audit firm where suitable,
practical and reasonably priced
alternatives exist. In addition, the
Committee considers the overall level of
non-audit fees and would not expect
these fees to be in aggregate greater
than the audit fee. During the year, the
external auditor performed non-audit
services totalling £315,000 (2021:
£81,000), which represents 41% (2021: 13%)
of the audit fee. The services provided
in the year included £84,000 in respect
of the interim review and £231,000 in
respect of the reporting accountant
work performed for the circular
published in connection with the Group’s
disposal of its Russian business. The Audit
Committee approved the appointment
of BDO on the basis that they were best
placed to provide the services and there
was no conflict of interest with their role
as external auditor. Refer to note 4 to the
financial statements of the Group for
further information.
On behalf of the Audit Committee
Nicholas Backhouse
Chairman of the Audit Committee
13 December 2022
Strategic report
Governance
Financial statements
89
Annual Report and Accounts 2022
Hyve Group plc
Membership
The Risk Committee (the Committee) was
in place throughout the financial year.
Following completion of a nine-year
tenure, Stephen Puckett stepped down
as Chair of the Committee at the same
time as he stepped down from the Board
on 3 February 2022. In light of two
Non-Executive Directors stepping down
and two new Non-Executive Directors
joining Hyve within a short space of time,
it was agreed that an Executive Director,
John Gulliver, should be appointed as
an interim Chair of the Committee
with effect from 3 February 2022.
Consequently, since 3 February 2022
the Committee has comprised two
independent Non-Executive Directors
and one Executive Director. Regular
attendees at Risk Committee meetings
include the Chairman of the Board, the
Chief Executive Officer, the General
Counsel and the Company Secretary.
Leaders of key functions across the
Group, for example Health & Safety
and IT, were invited to present to the
Committee on their respective areas.
Attendance at the Committee meetings
during the financial year is set out below.
All Non-Executive Directors are invited to
attend Committee meetings.
Terms of Reference
The Committee’s Terms of Reference are
available on the Group’s website (hyve.
group) or can be obtained from the
Company Secretary. The Terms of
Reference are reviewed annually and
presented to the Board for approval.
During the financial year, the Terms of
Reference were amended to permit
the appointment of John Gulliver, an
Executive Director, as interim Chair of
the Committee.
The role and responsibilities of
the Committee
The Committee meets a minimum of
twice a year and as required; during
the financial year, the Committee
met on four occasions. The Board is
ultimately responsible for the Group’s
risk management framework. The
Committee oversees the financial and
non-financial risks faced by the Group,
reporting to the Board in respect of
these and making recommendations
where appropriate.
Risk Committee report
Committee members
Meeting
attendance
John Gulliver (Interim Chair)
4/4
Rachel Addison
1
3/3
Nick Backhouse
4/4
Sharon Baylay
2
1/1
Stephen Puckett
3
1/1
1
Rachel Addison was appointed as a member of the Committee
w.e.f. 8 March 2022.
2
Sharon Baylay stepped down from the Committee w.e.f.
1 March 2022.
3
Stephen Puckett stepped down from the Committee w.e.f.
3 February 2022.
Risk Committee activities during the financial year:
The main issues discussed and/or approved during the financial year under
review included:
A continued review of the content
and format of the Risk Register;
The key risk areas to be covered
at Committee meetings during the
financial year;
Changes to risk ratings of the risks
listed in the Risk Register;
A review of three to four key risk
areas at each Committee meeting;
The risk reporting process at
regional Board level and the key
risks raised at regional Board level;
A review of the standard
operational risks;
A review of crossover of the scope
of internal audit with the work of
the Committee;
Identifying and reporting key risks
to the Board and responding to
feedback from the Board;
Compliance with the Group’s
governance framework; and
The Committee’s Terms of Reference.
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The purpose of the Committee is to
identify, assess, monitor and manage
risks faced by the Group over time with
the intention of exposing threats to be
mitigated and opportunities to be
exploited. The Committee works closely
with the Audit Committee, which remains
responsible for risks arising in financial
reporting. The Non-Executive Directors
on the Committee are also members of
the Audit Committee.
The Committee’s work is primarily driven
by the assessment of its principal risks
and uncertainties and its emerging risks.
These risks and uncertainties are the
output of a series of risk registers, which
are developed across the Group and
then accumulated and reviewed by the
Committee. The Committee reviews
these assessments and makes
adjustments to the overall risk plan
as appropriate.
Assessment of the Group’s
risk profile
Details of the principal risks and
uncertainties are set out in the Strategic
report. Wherever possible, action plans
are in place to provide future mitigation
against these key risks. As these are
implemented, they will be reported
on in future reports.
Effectiveness of the Committee
During the financial year an internal
evaluation of the Committee was
undertaken using the same questionnaire
from the FY21 external evaluation. The
questionnaire was completed by all
Board members. The consensus was
that during the financial year the
Committee had effectively discharged its
responsibilities such as overseeing the
key risk areas for the Group, ensuring the
maintenance of the Risk Register, and
identifying new risks and the steps taken
to mitigate them. The Board was also
of the view that there was sound risk
governance in place across the
Company’s operations and that the
Group’s risk management framework,
policies and procedures provided the
Committee and the Board with a
thorough understanding of the potential
high risks issues that could impact the
organisation.
It was felt that the changes implemented
in FY21 following a review of the
workings of the Committee had
significantly improved its performance
and contribution to the Group’s risk
management. More details about
the evaluation of the Board and its
Committees can be found on page 79.
On behalf of the Risk Committee
John Gulliver
Chair of the Risk Committee
13 December 2022
Strategic report
Governance
Financial statements
91
Annual Report and Accounts 2022
Hyve Group plc
Membership
The Nomination Committee (the
Committee) was in place throughout
the financial year and is chaired by the
Chair of the Group. All of the members
of the Committee who served during
the year were independent Non-
Executive Directors.
Attendance at the Committee meetings
during the financial year is set out in
the table.
The Chief Executive Officer and other
individuals (internal and external) may
also be invited to attend meetings, unless
they have a conflict of interest. During
the year, the Chief Executive Officer
and the Chief of Staff attended certain
Committee meetings, either partially or
fully. The Company Secretary attended
each Committee meeting in order to
take the minutes and provide guidance
where necessary.
Terms of Reference
The Committee’s Terms of Reference
are available on the Group’s website
(hyve.group) or can be obtained from
the Company Secretary. The Terms of
Reference are reviewed annually and
presented to the Board for approval.
The role and responsibilities of
the Committee
The Committee meets a minimum of
twice a year and as required; during
the financial year the Committee met
on six occasions. The Committee has
delegated responsibility from the Board
for appointments to the Board and for
succession planning for Directors and
other senior executives. As part of its
duties, the Committee:
Regularly reviews the structure, size
and composition (including the skills,
knowledge, experience and diversity)
required of the Board and makes
recommendations to the Board with
regard to any changes;
Takes into account, when considering
succession planning, the challenges
and opportunities facing the Group
and what skills and expertise are
therefore required on the Board in
the future;
Identifies, and nominates for the
approval of the Board, candidates
to fill Board vacancies as and when
they arise;
Keeps under review the leadership
needs of the Group; and
Agrees the evaluation process for the
Board and its committees.
Appointments to the Board follow a
formal, rigorous and transparent
process, which involves the Committee
interviewing candidates proposed by
either existing Board members or
external search consultants. Careful
consideration is given to ensure
appointees have sufficient time available
to devote to the role and that the
balance of skills, knowledge, experience
and diversity on the Board is either
maintained or improved. Additional
external appointments are not
undertaken by Board members without
prior approval of the Board.
The Committee recognises the benefits
of having a diverse Board and sees
increasing diversity at Board level as
an important element in maintaining a
competitive advantage. A truly diverse
Board in its broadest sense will include
and make good use of differences in the
skills, regional and industry experience,
background, race, gender and other
qualities of Directors. These differences
will be considered in determining the
optimum composition of the Board
and when possible should be balanced
appropriately. All Board appointments
are made on merit, in the context of the
skills and experience that the Board,
as a whole, requires to be effective.
Nomination Committee report
Committee members
Meeting
attendance
Richard Last (Chair of the Committee)
6/6
Rachel Addison
1
3/3
Nicholas Backhouse
6/6
Anna Bateson
2
3/3
Sharon Baylay
3
3/3
Stephen Puckett
4
3/3
1
Rachel Addison was appointed as a member of the Committee
w.e.f. 8 March 2022.
2
Anna Bateson was a member of the Committee from
8 March 2022 to 16 September 2022.
3
Sharon Baylay stepped down from the Committee w.e.f.
1 March 2022.
4
Stephen Puckett stepped down from the Committee w.e.f.
3 February 2022.
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Annual Report and Accounts 2022
Hyve is a multinational company with
many different cultures working together
to achieve its goals. Our Diversity and
Inclusion Policy prohibits discrimination
against others based on their gender
and gender identification, sexual
orientation, age, disability, religion or
belief, nationality, marital status, colour,
or any other characteristic that is
protected by law. Our discipline and
grievance procedure is intended to
enforce appropriate standards of
behaviour. The Diversity and Inclusion
Policy is available to employees on the
Company’s intranet.
Information on gender balance of those
in senior management and their direct
reports can be found on page 74.
Effectiveness of the Committee
During the financial year an internal
evaluation of the Committee was
undertaken reusing the questionnaire
prepared for the FY21 external
evaluation. The questionnaire was
completed by the Non-Executive
Directors on the Board only. The
consensus was that during the financial
year the Committee had effectively
discharged its responsibilities, had
fulfilled its commitment to providing
guidance to the Board on areas such
as composition of the Board and
composition of its five Committees, Board
diversity and succession planning, and
had good oversight of areas such as
employee talent management. Key areas
of focus for the Committee in FY23 are
the appointment of additional Non-
Executive Directors, the improvement of
Board diversity and the strengthening
of the Board’s succession planning.
More details about the evaluation of the
Board and its Committees can be found
on page 79.
On behalf of the Nomination Committee
Richard Last
Chair of the Nomination Committee
13 December 2022
Nomination Committee activities during the financial year:
The main issues discussed and/or approved during the financial year under review included:
The balance of skills and experience
on the Board;
The Company’s succession plans
for the Company’s Board, its
Executive Team and other senior roles
across the Group plus immediate
stand-ins;
Appointments to roles which report
directly to the CEO;
Employee talent management and
succession planning;
The identification of skills required
for the appointment of the next
Non-Executive Director(s);
The appointment of new
Non-Executive Directors;
The appointment of the Blackwood
Group to support Non-Executive
Director recruitment (the Blackwood
Group does not have any other
connections with the Company or
with any of the individual directors);
The appointment of Nicholas
Backhouse as the Board’s Senior
Independent Director;
The requirements of the Hampton-
Alexander Review and the Parker
Review and the consideration of the
recommendations of these reviews in
regard to the Board and in regard to
the Group’s ESG goals;
The internal evaluation of the Board
and its Committees with support
from Board Excellence, the firm
which undertook last year’s external
evaluation (Board Excellence does
not have any other connections with
the Company or with any of the
individual directors);
The changes to the membership and
Chairs of the Board’s Committees
following changes to the Board;
The time commitment required from
the Non-Executive Directors;
The Committee report for the FY22
Annual Report;
The Committee’s Terms of Reference;
The Committee’s Schedule of Matters
for the next financial year; and
The programme for engagement
between the Non-Executive Directors
and employees and the appointment
of the Designated Non-Executive
Director.
Strategic report
Governance
Financial statements
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Annual Report and Accounts 2022
Hyve Group plc
Membership
The Environmental, Social and
Governance (ESG) Committee (the
Committee) was in place throughout
the financial year. Membership of the
Committee comprises the Chairman of
the Board, the CEO, the Chief Finance
and Operations Officer, the Chief of Staff
and the Group Communications and ESG
Director. Under the Committee’s Terms of
Reference, membership must comprise
at least two independent directors. This
requirement was met during the financial
year. Following the departure of Anna
Bateson from the Group, it was agreed
that Jo Rabbett should be appointed as
interim Chair of the Committee.
Attendance at the Committee meetings
during the financial year is set out below.
All Non-Executive Directors are invited to
attend Committee meetings.
Other individuals (internal and external)
may also be invited to attend meetings,
unless they have a conflict of interest.
The Company Secretary attended each
Committee meeting in order to take
the minutes.
Terms of Reference
The Committee’s Terms of Reference
are available on the Group’s website
(hyve.group) or can be obtained from
the Company Secretary. The Terms of
Reference are reviewed annually and
presented to the Board for approval.
During the financial year, the Terms of
Reference were amended to permit the
appointment of Jo Rabbett, a member of
the Executive Team, as interim Chair of
the Committee.
The role and responsibilities of
the Committee
The Committee meets a minimum of
twice a year and as required; during the
financial year the Committee met on four
occasions. The Committee has delegated
responsibility from the Board to define
and guide the implementation of the
Company’s strategy relating to ESG
matters. As part of its duties, the
Committee:
Oversees the development of and
makes recommendations to the Board
regarding the Group’s ESG strategy;
Oversees the establishment of ESG
policies and codes of practice and their
effective implementation, and monitors
and reviews their ongoing relevance,
effectiveness and further development;
Ensures that the Company monitors
and reviews current and emerging ESG
trends, relevant international standards
and legislative requirements; identifies
how those are likely to impact on the
strategy, operations and reputation of
the Company; and determines whether
and how these are incorporated into
or reflected in the Company’s ESG
policies and objectives;
Sets appropriate strategic goals,
as well as shorter-term KPIs and
associated targets related to ESG
matters and oversees the ongoing
measurement and reporting of
performance against those KPIs
and targets;
Makes recommendations to the Board
in relation to the required resourcing
and funding of ESG-related activity
and, on behalf of the Board, oversees
the deployment and control of any
resources and funds; and
Oversees the implementation of
climate change mitigation measures
as part of our ESG strategy.
ESG Committee report
Committee members
Meeting
attendance
Jo Rabbett (Interim Chair)
4/4
Anna Bateson
1
1/1
Sharon Baylay
2
2/2
Nikki Griffiths
4/4
John Gulliver
4/4
Richard Last
3/4
Mark Shashoua
4/4
1
Anna Bateson was Chair of the Committee from 8 March 2022
to 16 September 2022.
2
Sharon Baylay stepped down as Chair of the Committee w.e.f.
1 March 2022.
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Annual Report and Accounts 2022
As an organiser of market-leading
events, we recognise that we have a
responsibility to take a more proactive
approach to sustainability and to lead by
example. We believe it is our obligation to
bring together powerful changemakers
as well as to raise awareness, lead the
debate and facilitate solutions. Hyve
aims to deliver a strong, forward-looking
ESG approach with a strategy that
encompasses all regions, to connect
the different activities happening across
the business. Details of the Company’s
ESG strategy can be found on page 22.
Details of our greenhouse gas emissions
can be found on page 25. Details of our
climate-related financial risk review can
be found on pages 27 to 31.
Effectiveness of the Committee
During the financial year, an internal
evaluation of the Committee was
undertaken using an online
questionnaire. The questionnaire was
completed by all Board members. The
consensus was that during the financial
year the Committee had effectively
discharged its responsibilities to oversee
the development of the Group’s ESG
strategy, including the setting of
appropriate strategic goals and the
measurement of performance against
specified key performance indicators
(KPIs). It was felt that the Committee has
a progressive approach towards ESG
and sustainability and that significant
progress had been made since the
Committee was established in June 2021.
More details about the evaluation of the
Board and its Committees can be found
on page 79.
On behalf of the ESG Committee
Jo Rabbett
Chair of the ESG Committee
13 December 2022
ESG Committee activities during the financial year:
The main issues discussed and/or approved during the financial year under review included:
Membership and Chair of
the Committee;
The ESG Strategy Framework;
The proposed KPIs and targets for the
ESG strategy;
Progress of the rollout of the ESG
strategy and performance against
the KPIs and targets;
Membership of the working
groups established to support
the ESG strategy;
The work to be undertaken by Simply
Sustainable to support
the Group’s ESG strategy;
The Group’s disclosure
requirements in respect of the TCFD
recommendations;
Proposals to improve inclusivity
across the Group;
The Schedule of Matters for the
Committee for the financial year; and
The Committee’s Terms of Reference.
Strategic report
Governance
Financial statements
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Annual Report and Accounts 2022
Hyve Group plc
Remuneration Committee Chair’s statement
Dear Shareholder
I am pleased to present the
Remuneration Committee’s report for
the year to 30 September 2022, having
taken over the role of Committee Chair
on 1 March 2022.
I would like to take this opportunity to
thank my predecessor Sharon Baylay for
her strong stewardship and guidance of
the Committee over the past five years.
What is in this report?
The report includes details of the
payments made to our Executive and
Non-Executive Directors for the year
ended 30 September 2022. It also
includes a summary of our approved
Directors’ Remuneration Policy (the
Policy), and information on how this
Policy will be implemented during the
financial year ending 30 September
2023.
This annual statement and the Directors’
remuneration report (set out on pages 99
to 127) will be subject to an advisory vote
at this year’s Annual General Meeting
to be held on 1 February 2023. The
Directors’ Remuneration Policy, which
was approved at our 2021 General
Meeting, is not subject to a shareholder
vote this year; a summary of the Policy
is included on pages 117 to 127.
Business context
This year has been a transitional year in
which we have experienced the impact
of ongoing disruption from COVID-19
and the Russian invasion of Ukraine.
Despite the challenges faced, the Group
has delivered resilient trading results and
continued strong like-for-like customer
spend, forward bookings and cash
collection in a year that was disrupted in
the first half due to the emergence of the
Omicron COVID-19 variant, no revenue
from Chinese events in the year and the
disposal of its Russian and Ukraine
businesses.
In early April, the Company confirmed
its intention to dispose of the Russian
business (which accounted for c.30% of
Hyve’s total revenue) with Rise Expo
Limited (‘Rise’) purchasing the Russian
business on 13 May 2022. On 19 July, the
Company subsequently announced the
sale of its Ukraine business to ProExpo
(Europe) Limited in a management
buy-out.
The decision to exit the Russian and
Ukrainian markets was not taken lightly
and was a forced decision made only
because Russia had invaded Ukraine.
With over 11,000 sanctions in place, it
was clear that keeping the business
was untenable.
The management team has consistently
outperformed expectations alongside
focusing on executing and further
developing its strategy of growth
opportunities in the US and Western
Europe.
Having refocused the portfolio,
accelerated the omnichannel evolution
and secured the balance sheet, the focus
is now on continuing growth and driving
back value in the Group’s equity.
Revenue for the full year was £122.5m,
after excluding revenues from
discontinued operations in respect of
Russia, Ukraine and Turkey, having
successfully run a full schedule of events
outside China in FY22. Headline profit
before tax from continuing operations
was £11.5m and in addition, net cash
from operating activities was £29.2m
for the year ended 30 September 2022,
which is a significantly improved position
compared to expectations set at the start
of the year.
The speed of recovery has surpassed
expectations and, combined with
strong like-for-like customer spend,
demonstrates that the demand for
high-quality market-leading events
continues to grow. This has resulted in
another year of headline profitability
and a return to positive EBITDA without
the aid of insurance proceeds.
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Remuneration performance and
reward outcomes for 2022
For the 2022 financial year, annual bonus
targets and weightings were designed
to reinforce delivery of sustainable profit
growth, building and maintaining a
strong cash position, developing a
successful refinancing strategy and the
achievement of strategic objectives. The
weightings for the annual bonus were
changed for the 2022 financial year to
better reflect Hyve’s priorities in the year,
with 60% based on financial targets, 20%
on strategic financial targets and the
remaining 20% on strategic targets linked
to our key objective of repositioning the
business for the future.
During the course of the year, the
Committee has been mindful of the
incentivisation and retention of the
Executive Team, considering the forced
disposal of the Russian business and
the subsequent management buy-out
of the Ukraine business entity. After
careful consideration, the Committee
adjusted the original bonus targets
for these disposals but then added a
significant element of performance
stretch to adjusted targets to
incentivise management to achieve
a result materially ahead of
rebased expectations.
The adjusted financial and strategic
targets we set were exceeded, and the
overall outcome for Executive Directors
was 100% of maximum. The Committee
considered this reflected the strong
performance of management in a
year where they had materially over-
delivered against expectations; please
see page 104 for more detail regarding
the original and adjusted bonus
targets as well as actual performance
against these.
There was no vesting of long-term
incentive awards in relation to the
current Executive Directors in the year.
The performance conditions for the
awards granted in January 2020 became
unachievable a few months after they
were granted, due to the impact of
COVID-19. The Committee previously
stated that it would not make any
adjustments to these awards.
Awards were made to Executive
Directors and other members of the
Executive and Senior Management
Teams under the Value Creation Plan
(VCP). Further details of awards made
can be found on page 108.
VCP adjustment
The Committee has recently engaged
in a communication process with
shareholders regarding the ongoing
incentivisation and retention of the
Executive Team, particularly in respect
of the (the ‘VCP’), considering the forced
disposal of the Russian business and the
subsequent management buy-out of the
Ukraine business entity.
The VCP rules and our Policy enable
the Committee to adjust performance
targets where certain events occur or
arise, and the Committee considers the
forced disposal to be an exceptional
event where adjustment is warranted.
Following detailed discussion and
analysis, the Committee intends to
amend the £1.30 starting share price of
the VCP using a methodology that seeks
to fairly account for the forced disposal.
The intended approach uses standard
adjustment principles and results in the
base price for the VCP adjusting to £0.91
from the current £1.30. The base price
applies from the start of the scheme with
no extension of time horizons.
The Board believes that following the
adjustment, the VCP will continue to
fulfil its original purpose, aligning
management reward to long-term
shareholder value creation through very
stretching shareholder value hurdles.
The intended adjustment is considered
to be reasonable from both participants’
and shareholders’ perspectives. The
Board considers that there is an
exceptional management team in
place; it wishes both to retain this and
to focus on the actions which will
generate long-term share price
recovery for our shareholders.
In considering the adjustment, the
Committee wrote to our largest
shareholders, covering c.80% of the
register, inviting discussion on our
intended adjustment. To date, we have
had responses covering c.60% of our
shareholder base, and I have had
conversations with those shareholders
who wished to discuss the matter in
more detail. I have been pleased that
the significant majority of shareholders
that have engaged with us to date,
including our largest shareholders, have
indicated support for the adjustment
and understood the rationale. Some
shareholders had questions about
how we arrived at the adjustment
methodology, which I was pleased to
answer. I would like to sincerely thank all
shareholders who have participated in
the communication process to date.
Further details of the VCP adjustment
can be found on pages 108 to 109.
Performance Share Plan awards
In the interests of parity, the Committee
intends to apply the same adjustment
mechanism to FY21 PSP awards made
to Executive Directors and other
participants. The same adjustment
mechanism will also be applied to the
PSP awards made to participants
below Board level in January 2022.
No participants of the VCP were
recipients of these awards.
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Governance
Financial statements
97
Annual Report and Accounts 2022
Hyve Group plc
Remuneration framework for 2023
Salary
Over the course of the year, the
Committee has taken a number of
factors into account when considering
pay awards for Executive Directors, such
as the broader external market, business
performance and pay awards for the
wider employee population.
Following a process of due consideration,
the Chief Executive Officer and the CFOO
will receive a base salary increase of 5%,
which will be effective from 1 October
2022. This is in line with increases for the
wider UK workforce. To further support
our lower-paid employees in the current
challenging economic environment,
Hyve has also made one-off cost-of-
living awards to a segment of the wider
workforce on a tiered basis up to 10%
of base pay. Financial wellbeing has
become more relevant this year, and
we have hosted a series of financial
wellbeing talks and workshops with
industry experts alongside making
enhancements to our employee benefits
package, as detailed in the ‘People and
values’ section on page 20.
Annual bonus
The annual bonus for 2023 will continue
to operate based on a combination of
challenging financial targets and tailored
strategic objectives.
For FY23 the Committee has decided to
increase the weighting of the financial
targets from 80% to 90% of the bonus.
Following the management team’s
success in FY22 in delivering very strong
financial performance in the context of
prolonged uncertainty and disruption,
the Committee wants to incentivise them
to build on their FY22 achievements and
deliver another successful year of trading
across the event landscape in FY23. It is
therefore considered appropriate that
nearly all the bonus is focused on the
delivery of financial performance.
Financial targets will be based on
headline profit before tax, Group
revenue and operating cash flow.
Strategic targets will account for 10%
weighting for bonus purposes. This
year, a key strategic objective is the
development of our digitisation strategy,
and performance will therefore be
measured on the successful embedding
of digitisation across the business to
ensure the success of our meetings
programmes. We considered that it was
appropriate, this year, to have one
focused performance objective based on
a key objective, our digitisation strategy.
This objective will therefore be fully
aligned to the execution of the Group’s
omnichannel strategy, which is core to
our growth strategy.
The Committee gave careful
consideration as to whether an
Environmental, Social and Governance
(ESG) metric should be included in the
annual bonus this year, recognising that
this is a key area of focus for investors
and wider stakeholders. ESG is well
established as a priority area in the
business, and our ESG strategy
framework was rolled out in FY22.
Further details, including our progress
to date, are set out on pages 22 to 26.
The Committee believes that strong
progress has been made in FY22 and
that ESG is now embedded in our
values and day-to-day activities as a
result of the Chief Executive Officer’s
strong sponsorship and commitment
to delivering Hyve’s key objectives
in this area. ESG targets linked to
financial reward will be considered in
subsequent years, with a focus on
aligning to quantitative targets as
they are developed.
Value Creation Plan
As disclosed in last year’s report,
following the approval of the Policy and
VCP at the General Meeting held in
October 2021, awards were granted to
the Executive Directors and other eligible
participants on 26 October 2021. No
further awards will be made to existing
Executive Directors under this plan
during the existing performance period,
which ends on 30 September 2026.
Annual General Meeting
As noted above, we have conducted a
communication process with a significant
number of our shareholders regarding
our intended adjustment to the VCP and
in-flight PSP awards and once again
I would like to thank those shareholders
that have been involved in these
discussions. We are committed to
maintaining an ongoing dialogue with
shareholders on the issue of executive
remuneration and we welcome any
feedback you may have.
I hope to receive your support in
approving this report at the Annual
General Meeting on 1 February 2023.
Rachel Addison
Chair of Remuneration Committee
13 December 2022
Remuneration Committee Chair’s statement
continued
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Hyve Group plc
Annual Report and Accounts 2022
Implementation of Remuneration Policy for the year ending 30 September 2023
The table below sets out how the Remuneration Policy will be applied for the year ending 30 September 2023.
Element
Application for the year ending 30 September 2023
Salary
Both the CEO and the CFOO will receive an increase to their base pay of 5% from 1 October 2022, in line with salary increases awarded to other
UK employees of the Group:
Mark Shashoua – £532,098
John Gulliver – £319,042
Benefits
Benefits for FY23 will be in line with the Remuneration Policy.
Pension
Pension contributions of 10% of salary for both Executive Directors, in line with the wider workforce.
Annual bonus
For FY23, the annual bonus opportunities are unchanged at 150% and 120% of salary for Mark Shashoua and John Gulliver, respectively.
90% of the bonus for FY23 is based on financial performance. Financial targets will be based on headline profit before tax, revenue and operating
cash flow.
The financial measures will be as follows:
Measure
Weighting
of financial
measures
Headline profit before tax
50%
Revenue
25%
Operating cash flow
25%
The remaining 10% of the total bonus will be based on a strategic objective set out below:
Measure
Embedding digitisation across the business to ensure the success of the meetings programmes
The targets are considered commercially sensitive and will therefore be disclosed retrospectively.
Strategic report
Governance
Financial statements
99
Annual Report and Accounts 2022
Hyve Group plc
Directors’ remuneration report
Directors’ remuneration report
continued
Element
Application for the year ending 30 September 2023
VCP
The awards made under the Value Creation Plan (‘VCP’) on 26 October 2021 by way of an acquisition of shares in Hyve Holdings Limited continue to
operate under the existing five-year performance period, which will end in October 2026.
The CEO and CFOO made an upfront investment in a new class of ‘growth shares’ issued by Hyve Holdings Limited (which is a 100% subsidiary of the
Company) which, on vesting, will deliver the VCP value in Hyve Group plc shares.
Awards are subject to:
A ‘base hurdle’ of 10% p.a. growth (CAGR) in market capitalisation, with a VCP pool of 10% above this level; and
An ‘upper hurdle’ of 15% p.a. growth (CAGR) in market capitalisation, with a VCP pool of 20% above this level.
The CEO and CFOO were allocated 35% and 19% of the VCP pool respectively.
As stated above, the VCP has a five-year performance period, with early performance testing carried out at years three and four with the potential
for some vesting at these points:
50% of the award will be tested and may vest after three years;
50% of the award will be tested allowing for further vesting after four years; and
100% of the award will be tested after five years and will vest (any portion that vests early in year three and/or year four will be deducted from the
total vesting in year five).
Several best-practice features are included:
All tranches that vest to the Executive Directors will be subject to a two-year holding period (i.e. awards will be released in years five, six and seven),
to ensure that the Plan supports the long-term stewardship of the business.
The number of shares released under the plan is capped at 7% of the share capital at grant, and a cap on the number of shares applies for
participant awards.
A discretionary over-ride allows vesting outcomes to be adjusted where appropriate in the context of financial or non-financial performance.
Comprehensive malus and clawback triggers apply, in line with best practice.
It is intended that the starting base price will be adjusted through the VCP adjustment from £1.30 to £0.91 to reflect the impact of the disposal of the
Russian and Ukraine businesses, which represents an exceptional event.
The VCP adjustment applies from the original start date of the plan, with no extension to plan time horizons. No additional VCP or PSP awards will be
made to existing Executive Directors in the year ending 30 September 2023. See page 109 for further information.
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Annual Report and Accounts 2022
Annual Report on Remuneration
In line with the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 (as amended in 2013), the following parts of the annual
report on Directors’ remuneration are audited: the single total figure of remuneration
for each Director, including annual bonus for the financial year ended 30 September
2022; scheme interests awarded during the year; pension entitlements; payments to
past Directors and payments for loss of office; and Directors’ shareholdings and share
interests. All other parts of the Directors’ remuneration report are unaudited.
Membership
Chair of the
Committee
Meeting
attendance
Committee members
Sharon Baylay
1
X
4/4
Rachel Addison
2
X
4/4
Nicholas Backhouse
8/8
Anna Bateson
3
3/3
1
Sharon Baylay was Chair of the Committee until 1 March 2022, when she stepped down from the Board.
2
Rachel Addison became Chair of the Committee on her appointment to the Board on 1 March 2022.
3
Anna Bateson was a member of the Committee from her appointment to the Board on 1 March 2022.
Anna resigned from the Board on 116 September 2022 on being appointed to a new role.
The Remuneration Committee was chaired by Sharon Baylay until 1 March 2022, at
which point Rachel Addison became Chair on her appointment to the Board. Nicholas
Backhouse served on the Committee throughout the year, with Anna Bateson joining
from her appointment on 1 March 2022 until she stepped down from the Board on
16 September 2022. Members of the Committee are appointed by the Board, on the
recommendation of the Nomination Committee in consultation with the Chair of the
Remuneration Committee, for an initial period of three years, which can then be
followed by a further two three-year periods. All of the members of the Committee
who served during the year were independent Non-Executive Directors.
Where there is no conflict of interest, the Board Chairman, Chief Executive Officer, Chief
Finance and Operations Officer, Chief of Staff, Company Remuneration Advisers and
Company Secretary may be invited to attend the Committee’s meetings to assst the
Committee in making informed decisions. To maximise effectiveness, meetings of the
Committee generally take place just prior to a Company Board meeting. The Chair of
the Committee reports to the Board, as part of a separate agenda item, on the activity
of the Committee and matters of particular relevance to the Board in the conduct of
its work. No individual is present when their own remuneration is being discussed.
The Chair of the Committee also meets separately with the Board Chairman, Chief
Executive Officer, Chief Finance and Operations Officer, Chair of the Audit Committee,
Chief of Staff, and the Committee’s external advisers.
Advisers
Deloitte were appointed by the Committee in 2020 as Committee Remuneration
Advisers following a competitive tender process. During the 2022 financial year, the
Committee paid Deloitte £132,625 for material assistance with the fees charged on a
time spent and materials provided basis. Deloitte did not provide any other services to
Hyve during the financial year.
Deloitte are signatories to the Remuneration Consultants’ Group Code of Conduct, and
any advice provided is governed by that Code. Advisers attend Committee meetings
as appropriate, and provide advice on remuneration policy, best practice and market
updates. The Committee evaluates the support provided by its advisers annually and is
comfortable that the individual advisers detailed did not have any connections with the
Group or individual Directors that may impair their independence.
Terms of Reference
The Remuneration Committee’s Terms of Reference are available on the Group’s
website (hyve.group) or can be obtained from the Company Secretary. The Terms
of Reference are reviewed annually and presented to the Board for approval.
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Governance
Financial statements
101
Annual Report and Accounts 2022
Hyve Group plc
Directors’ remuneration report
continued
The role and responsibilities of the Committee
The Remuneration Committee meets at least three times a year and on other
occasions, as required. The Committee has delegated responsibility from the Board to
set the Remuneration Policy for all Executive Directors and the Company Chairman.
The objective of the Policy is to ensure that members of the executive management
of the Company are provided with appropriate incentives to encourage enhanced
performance and are, in a fair and responsible manner, rewarded for their
individual contributions to the success of the Company. The Company Chairman
and the Executive Directors are responsible for setting the remuneration of the
Non-Executive Directors.
Committee responsibilities include:
Determining and agreeing with the Board the policy for the remuneration of the
Executive Directors and members of the executive management (including pensions);
Reviewing the ongoing appropriateness and relevance of the Remuneration Policy;
Approving the design of, and determining targets for, any performance-related pay
schemes operated by the Company and approving the total annual payments made
under the schemes;
Overseeing any major changes in employee benefits structures throughout
the Group;
Measuring subsequent performance as a prelude to determining the total
remuneration of the Executive Directors’ and executive management total
remuneration on behalf of the Board;
Determining the structure and quantum of short-term remuneration; and
Granting awards under long-term incentive plans and options under the various
Hyve Group share schemes.
Activities during the financial year
The main issues discussed and/or approved during the financial year under
review included:
Approval of the prior year Directors’ remuneration report, review of shareholder
comments and Annual General Meeting voting on the Report;
Annual review of the Company Chairman and Executive Directors’ salaries or fee
arrangements and benefits;
Review and approval of the adjustment to 2022 Annual Bonus targets for Executive
Directors and other eligible employees as a result of the forced disposal of the
Russian business and subsequent management buy-out of the Ukraine business;
Review and approval of the Executive Directors’ and executive management
performance against the targets set under the 2022 annual bonus scheme and
approval of the corresponding payments;
Review and approval of the FY23 annual bonus measures and targets, including
the personal objectives of the Chief Executive Officer as proposed by the Company
Chairman, and of the Chief Finance and Operations Officer as proposed by the
Chief Executive Officer;
Review of the intended VCP adjustment;
Review of the intended PSP adjustment to awards made under the PSP to
members of the senior leadership team;
Communication with shareholders on the intended VCP and PSP adjustments;
Engaging with the Human Resources function on succession planning and
organisation restructuring; and
Review of the performance targets to be applied for the awards to be made
under the PSP to members of the senior leadership team (excluding the Executive
Directors and other participants of the VCP).
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Single figure of remuneration for directors for the year ended 30 September 2022 (audited information)
The table below sets out a single figure for the total remuneration received by each Director for the year ended 30 September 2022 and the prior year. The Remuneration
Policy operated as intended in the year.
Executive Directors
1. Base salary/Fees
1
2. Benefits
2
3. Annual bonus
3
4. Long-term
incentives
4
5. Pension
Total remuneration
Total fixed
remuneration
Total variable
remuneration
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
2022
£000
2021
£000
Mark Shashoua
507
492
4
1
760
716
–
–
51
49
1,322
1,258
562
542
760
716
John Gulliver
304
295
1
1
365
343
–
–
31
30
701
669
336
326
365
343
Non-Executive Directors
Richard Last
195
179
–
–
–
–
–
–
–
–
195
179
195
179
–
–
Stephen Puckett
5
24
61
–
–
–
–
–
–
–
–
24
61
24
61
–
–
Sharon Baylay
6
33
67
–
–
–
–
–
–
–
–
33
67
33
67
–
–
Nicholas Backhouse
80
61
–
–
–
–
–
–
–
–
80
61
80
61
–
–
Rachel Addison
7
45
–
–
–
–
–
–
–
–
–
45
–
45
–
–
–
Anna Bateson
8
45
–
–
–
–
–
–
–
–
–
45
–
45
–
–
–
1
See page 110 for further details of Non-Executive Director fees.
2
Taxable benefits include private medical insurance contributions.
3
Annual bonus payable for performance over the relevant financial year. Details are set out below on page 104 of the performance targets set and actual performance against them. Consistent with the terms of the Remuneration
Policy and as outlined in the 2021 Directors’ remuneration report, Executive Directors were not required to defer a proportion of their annual bonus payment for FY21 in the usual manner, but were instead able to use this part
of the bonus to fund their investment in the VCP shares. Executive Directors will be required to defer a third of the FY22 bonus payment. Annual bonus awards are subject to recovery and withholding provisions in line with the
Company’s Remuneration Policy.
4
There was no vesting of long-term incentive awards in relation to the current Executive Directors for performance periods concluding 30 September 2022.
5
Stephen Puckett stepped down from the Board on 1 March 2022.
6
Sharon Bayley stepped down from the Board on 1 March 2022.
7
Rachel Addison was appointed to the Board and as Chair of the Remuneration Committee on 1 March 2022.
8
Anna Bateson was appointed to the Board and as Chair of the ESG Committee on 1 March 2022. Anna subsequently stepped down from the Board on 16 September 2022.
Executive Directors’ base salaries (audited information)
The CEO and the CFOO each received a 3% base salary increase in the year ended
30 September 2022. From 1 October 2021, their salaries increased to £506,760 and
£303,850 respectively.
The Executive Directors’ salaries which will be paid from 1 October 2022 are set out
on page 99.
Pension and other benefits (audited information)
During the year, the Group made pension contributions or payments in lieu of
contributions equal to 10% of each Executive Director’s salary.
Pension contributions are aligned with those available to the wider workforce.
Annual bonus (audited information)
Framework and outcomes for the financial year ended 30 September 2022
For FY22, the Executive Directors participated in the Executive Bonus Plan, designed
to reinforce the delivery of sustainable profit growth, building and maintaining
a strong cash position, developing a successful refinancing strategy and the
achievement of strategic objectives. The weightings for the annual bonus were
changed for FY22 to better reflect Hyve’s priorities in the year, with 60% based on
financial targets, 20% on strategic financial targets to recognise the volatile and
unpredictable trading environment as a result of COVID-19 and the remaining 20% on
strategic targets linked to our key objective of repositioning the business for the future.
The maximum annual bonus opportunity was 150% of salary for Mark Shashoua and
120% for John Gulliver.
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Governance
Financial statements
103
Annual Report and Accounts 2022
Hyve Group plc
Directors’ remuneration report
continued
At the beginning of the year, there was still significant uncertainty in the outlook as a
result of COVID-19 restrictions. Therefore, targets were set for headline profit before
tax and operating cash flow. Given the international travel restrictions in place at the
beginning of the year, the threshold pay-out was set with more modest revenues
from international customers and for events in locations where restrictions were in
place at the start of the year that prevented events from being able to take place.
During the year, the Committee considered the forced disposal of the Russian
business (which accounted for c.30% of the Company’s revenue) and the subsequent
management buy-out of the Ukraine business entity. The Committee made
adjustments to the original bonus targets for the disposal of these businesses and
removed the financial performance of these businesses from the out-turn to ensure
a like-for-like comparison of performance of Hyve’s continued operations. However,
as part of consideration of the targets, the Committee then added a further and
significant additional element of performance stretch to the adjusted targets (i.e.
the Committee exercised discretion to increase the targets). This was to align to
the principle of incentivising management to achieve a result materially ahead of
rebased expectations.
The benefit of profit and operating cash flow from mid-year acquisitions as well as
any benefits from foreign exchange movements were excluded in the assessment of
achievement against rebased targets.
The details of the targets for maximum pay-out and the achieved results for the year
are set out below.
The financial targets we set were exceeded. To set the context for the financial
outcome for the year and achievement of maximum target, the headline profit before
tax of Hyve’s business from continuing operations, after excluding the part-year
results from Russia and Ukraine and the contribution from acquisitions of 121 Group
and Fintech Meetup during the year, was £9.6m. This compared with an original
maximum profit before tax target of £11.1m, inclusive of a full year profit expectation
from businesses disposed of during the year, including a material contribution from
Russia in particular. Additional profit of £2.8m was delivered above the revised target
of £6.8m to mitigate further the profit impact of the loss of contribution from the
disposed businesses. In respect of operating cash flow, additional cash flow of £10m
was delivered above the revised target of £6.9m.
Measure
Weighting
Threshold (£m) 25% pay-out
Target (£m) 50% pay-out
Stretch (£m) 80% pay-out
Maximum (£m) 100% pay-out
Achieved (£m)
Outcome
Headline profit/
(loss) before tax
35%
Original
(10.5)
(4.1)
10.1
11.1
9.6m
3
35%
Adjusted targets for
disposed businesses
1
(20.7)
(15.3)
(4.8)
(3.8)
Additional
performance stretch
2
2.7
5.3
8.5
10.6
Revised targets
(18.0)
(10.0)
3.7
6.8
Operating cash
inflow (outflow)
25%
Original
(14.2)
(7.6)
10.2
11.2
16.9m
4
25%
Adjusted targets for
disposed businesses
1
(24.4)
(18.8)
(4.7)
(3.7)
Additional
performance stretch
2
2.7
5.3
8.5
10.6
Revised targets
(21.7)
(13.5)
3.8
6.9
Refinancing
strategy
20%
Refinancing strategy
developed by
30 September 2022
Refinancing strategy
plan developed by
30 September 2022
Refinancing strategy
presented to and
approved by the Board
by 30 September 2022
Refinancing complete
unless agreed by
the Board
Refinancing
completed
20%
Total
80%
80%
1
Financial targets were adjusted to remove the disposed Russian and Ukraine businesses.
2 Additional performance stretch added to the targets.
3 Headline profit before tax after excluding the pre-disposal results from the Russia and Ukraine businesses sold during the year and after also excluding the post-acquisition results from the mid-year acquisitions of 121 Group and
Fintech Meetup. Headline profit before tax reconciliation: Headline profit before tax from continuing operations of £11.5m, less 121 Group profits of £(2.1)m (see Note 13 to the consolidated accounts) and Fintech Meetup of £(1.0m)
(see Note 13 to the consolidated accounts) plus the profit of £1.2m from Turkey included in discontinued operations (see Note 17 to the consolidated accounts).
4 Operating cash flow is also after excluding the pre-disposal results from the Russia and Ukraine businesses sold during the year and after also excluding the post-acquisition results from the mid-year acquisitions of 121 Group
and Fintech Meetup. Operating cash flow reconciliation: Net cash from operating expenses of £29.2m, after including lease payments of £(3.4)m and the impact of foreign exchange rates changes of £3.6m, after excluding the
post-acquisition 121 Group net cash inflows of £(4.7)m and Fintech Meetup net cash outflows of £1.0m and after excluding the pre-disposal net cash inflows from Russia of £(9.8)m and net cash outflows from Ukraine of £1.0m.
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The strategic targets and outcomes for both the CEO and CFOO are set out below:
CEO
Measure
Weighting
Objective
Outcome
Achievement
Portfolio
management
10%
Ensure successful ongoing integration of Fintech Meetup and
121 Group into Hyve’s portfolio, including adoption of Hyve
Best Practice.
Execute any further disposals in line with Board agreed plan
to deliver on the strategic priority of diversifying the portfolio.
Both 121 Group and Fintech Meetup, acquired during the year,
delivered performance in line with the acquisition cases. Both
have adopted Hyve Best Practice and substantial progress has
been made on integration priorities, setting up the events for a
strong performance in FY23.
The planned disposals of ABEC, Debindo and Turkey were
completed in line with agreed plans. In addition, and under very
difficult circumstances, the unplanned disposals of Russia and
Ukraine were also completed.
10%
ESG
5%
ESG strategy and plan to be rolled out, clearly
communicated and embedded within Company culture
by 30 September 2022.
ESG is established as a priority across the business.
Hyve’s ESG strategy framework was rolled out. See page 22 of
this report for more detail.
5%
Executive and
leadership team
5%
Evolve the Hyve Executive and leadership team structure to
enable the acceleration of the recovery from COVID-19 and
implement the omnichannel strategy.
The Executive and leadership team was strengthened with the
recruitment of the Chief Information Officer, Chief Corporate
Development Officer and Global President, Shoptalk. The
enhanced leadership capability ensured the execution of
the omnichannel strategy and the acquisition and disposal
programmes within the year.
The leadership team structure was adapted to focus on
strategic priorities and the team has delivered exceptional
results despite the significant disruption of COVID-19 and the
Russian invasion of Ukraine. A full recovery of events outside
of mainland China was delivered.
In addition, the team successfully closed the Fintech Meetup
acquisition, which delivered £2.3m of revenue in the year and
progressed the integration in line with plan.
5%
Total
20%
20%
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Financial statements
105
Annual Report and Accounts 2022
Hyve Group plc
Directors’ remuneration report
continued
CFOO
Measure
Weighting
Objective
Outcome
Achievement
Refinance
and debt
10%
Secure covenant extension to enable going concern
sign-off for FY21 audit.
Secure lender permission for acquisition of 121 Group
to enable Group to execute on strategic priorities and
diversifying the portfolio.
Manage lender syndicate to ensure adequate
operational flexibility and ongoing support.
A covenant waiver was agreed with all lenders to provide covenant
flexibility to June 2023. This enabled auditors to sign off on going
concern at the year end.
In addition, lender support was secured for the acquisition of 121 Group
and Fintech Meetup, as well as the disposal of ABEC, Russia, Ukraine
and Turkey (not anticipated at the time targets were set).
10%
Risk
5%
Establish and progress a plan and appropriate
structure to manage and mitigate key business risks
as Hyve emerges from COVID-19, in particular in the
areas of information and data security.
A Chief Information Officer was recruited (reporting to CFOO) and the
Technology & Data team re-established post COVID-19.
A number of key roles have been recruited, including a Head of
Information Security, who has been responsible for establishing a
clear cyber risk management plan in response to the increased threat
environment. A number of key actions have been delivered during
the year, including the establishment of a cyber risk register and the
enhancement and rollout of a comprehensive cyber risk policy and the
inclusion of insurance cover.
5%
Operations
5%
In response to events resuming following COVID-19
postponements, re-establish and enhance health
and safety best practice processes to incorporate
required COVID-19 restrictions and precautions.
Deliver Technology & Data roadmap with particular
focus on omnichannel capability to support rollout of
meetings programmes across event platforms.
The recruitment of a Group Head of Safety and Security during the
prior year enabled the development and execution of a plan for events
during the period of COVID-19 restrictions, ensuring employee and
customer confidence in a safe and secure environment. This was vital
in underpinning recovery across the portfolio. Key achievements in the
year were to confirm that all events were adhering to best practice and
complying with Safe & Secure standards. Controls and governance
procedures are embedded across the event portfolio and include
event audits and the continuous update of compliance with policies
and procedures (reflecting fluidity of local COVID-19 precautionary
requirements).
A number of virtual meetings programmes were delivered during the
year, providing incremental revenues, but more importantly, additional
touchpoints for customers to connect as part of the omnichannel
strategy. This was delivered via Hyve’s own technology platform.
Also, during the year, the technology capability was enhanced to
enable the wider rollout of at-scale meetings programmes across a
number of in-person events. As a result, technology-enabled revenues
increased significantly in FY22 and are set to grow further in FY23.
This objective was achieved alongside the unplanned and challenging
technology ‘decoupling’ of the Russian and Ukrainian businesses, which
was vital from an information security perspective.
5%
Total
20%
20%
106
Hyve Group plc
Annual Report and Accounts 2022
Executive Director overall bonus outcomes
The financial and strategic targets we set were exceeded, with the overall outcome
for Executive Directors being 100% of maximum.
Committee considerations when determining bonus outcomes
The Committee carefully considered the bonus outcomes for this challenging year of
transformation and volatility, led strongly by both Executive Directors despite a vast
number of other factors being outside their control.
Despite the significant disruption throughout FY22, the management team has
consistently over-performed, focusing on executing on its strategy of growth
opportunities in the US and Western Europe to deliver value for shareholders.
Even though the team has had to continuously respond to challenges outside of
its control, these have been successfully navigated, delivering a strong recovery.
A full schedule of events was run outside of China, representing more than 90%
recovery on a pro-forma basis (100% in H2). The speed of recovery has surpassed
expectations (two years earlier than the AMR Globex report predicted) and is
combined with strong like-for-like increases in customer spend.
The first Shoptalk event under Hyve’s ownership took place in Las Vegas in March
2022 and delivered an exceptionally strong performance, outperforming its last
pre-COVID-19 edition, and it was the largest event by revenue that the Group has
ever run.
In September, two of the Group’s largest events, Autumn Fair (UK) and Groceryshop
(USA), took place, and both significantly outperformed their previous editions.
Groceryshop performed especially well, reporting revenues more than 40% higher
than its largest pre-COVID-19 edition and attracting more than 3,000 attendees.
Again, this demonstrates the management team’s strong progress in delivering
the strategy.
Management has continued to drive organic launches of products, with the successful
launch of Shoptalk Europe, Sourcing across UK Retail and Green Energy Africa.
During the financial year, the management team made significant progress in the
continued development of the Group’s omnichannel strategy, including the rollout
of further technology-enabled meetings programmes at in-person events as well as
the delivery of several successful fully online programmes. In addition, the strategic
acquisitions of 121 Group and Fintech Meetup expanded the size and diversity of
Hyve’s omnichannel products.
A key factor in overcoming the impact of COVID-19 has been the £105m of
cancellation insurance proceeds received by the Group as a result of the
management team’s actions to implement these policies in 2017. As well as providing
financial stability, the proceeds meant that further equity raises beyond the initial
rights issue were not required, thereby protecting shareholders from dilution. In
addition, the Group has emerged from the pandemic in a strong position to recover
more quickly than many other organisers.
In difficult market conditions, the management team has successfully refinanced
and signed new debt facilities totalling £135m with HPS Investment Partners, LLC
and HSBC UK Bank PLC, representing high confidence in the management team.
The management team has continued to streamline its portfolio, in line with its
strategy to focus on market-leading events in advanced economies. With the sale of
the loss-making Turkish business in October 2022, the full disposal of the Group’s
Eastern & Southern Europe division was completed. When viewed alongside exits
from Russia and Indonesia earlier in the year, it is clear that the management team
has significantly refocused the portfolio.
Taking all of the above into consideration, the Committee determined that
management had significantly outperformed against expectations, and is
comfortable that the formulaic bonus outcome was appropriate and fair. The
Committee therefore did not exercise any discretion to adjust the outcomes.
Mark Shashoua and John Gulliver’s final bonus payments for the year ended
30 September 2022 were £760,140 and £364,620 respectively.
Executive Directors will be required to defer one-third of their annual bonus payment
into shares, which will vest in three years, subject to continuous employment.
Strategic report
Governance
Financial statements
107
Annual Report and Accounts 2022
Hyve Group plc
Directors’ remuneration report
continued
Scheme interests awarded during the year (audited information)
Mark Shashoua and John Gulliver were recipients of VCP awards in October 2021. As disclosed in last year’s report, the Company’s VCP was approved by shareholders by
75.4% of votes cast at the General Meeting held on 25 October 2021, with participants, including the Company’s two Executive Directors, subscribing to growth shares under
the VCP on 26 October 2021. Mark Shashoua was awarded 35% of the VCP pool and John Gulliver was awarded 19% of the VCP pool, with the remainder being allocated to
other members of the Executive and senior leadership team.
Details of the VCP awards are set out below:
Executive Director
Shares over which
awards granted
Number of shares
awarded
Face value (£)
Award date
Performance period
Performance measure
Mark Shashoua
A1 shares
1
35,000
54,250
26-10-2021
26 October 2021 to
30 September 2026, inclusive
100% market capitalisation
growth (see below)
A2 shares
2
35,000
47,250
26-10-2021
A3 shares
3
35,000
38,500
26-10-2021
John Gulliver
A1 shares
1
19,000
29,450
26-10-2021
26 October 2021 to
30 September 2026, inclusive
100% market capitalisation
growth (see below)
A2 shares
2
19,000
25,650
26-10-2021
A3 shares
3
19,000
20,900
26-10-2021
1
A1 shares have a value of £1.55 per share.
2
A2 shares have a value of £1.35 per share.
3
A3 shares have a value of £1.10 per share.
As we shared with shareholders during our extensive consultation on the
implementation of the VCP, the plan:
Aligns with Hyve’s bold ambitions for growth and value creation for our
shareholders;
Supports the retention of our well-regarded management team over the next three
to five years, the critical period for our recovery and growth;
Is simple in concept, as management share in a portion of the value created above
a hurdle growth rate (subject to individual and plan limits); and
Allows a focus on making the right decisions for long-term value creation, without
the constraints of linking reward to medium-term cash flow and EBITDA targets.
The VCP has a two-tier approach, with a base-hurdle of 10% p.a. growth (CAGR) in
market capitalisation, with a VCP pool of 10% above the hurdle. In addition, there is an
upper hurdle of 15% p.a. growth (CAGR) in market capitalisation with a VCP pool of
20% above the hurdle. Any value delivered under the VCP is subject to both individual
and plan limits.
Reflecting shareholder feedback through the consultation process, the starting base
price for the purposes of calculating the opening market capitalisation was set at
£1.30, although the three-month average share price to the date of the award was
in fact lower, at c.£1.18.
The VCP has a five-year performance period, with early performance testing
carried out at years three and four, with the potential of some vesting at these points.
After five years, 100% of the award is tested and will vest subject to performance,
with any vesting from years three and four being deducted from the total.
VCP adjustment
As set out in the Directors’ Remuneration Policy, approved by shareholders on
25 October 2021, the Remuneration Committee has the discretion to make
adjustments to the terms of the VCP where certain events occur or arise.
In particular, in accordance with the rules of the VCP, in the event of any rights issue
or capitalisation, subdivision, consolidation, other variation of share capital of the
Company or other exceptional event, the Remuneration Committee may make such
adjustments to the number, class, rights or terms of the VCP shares (including the
opening market capitalisation and the terms of the two hurdles) as it considers
appropriate in its discretion to ensure that the original pool value is maintained and
that the relevant event does not cause any unintended change to the participant’s
rights and/or the value of the VCP shares.
108
Hyve Group plc
Annual Report and Accounts 2022
In response to the forced disposal of the Russia and Ukraine businesses, the
Company intends to amend the £1.30 starting share price of the VCP to £0.91.
While we recognise that such an adjustment, while permitted under the rules, would
not be considered standard, we believe that it is both a reasonable adjustment,
and necessary to secure and motivate our existing executive leadership team.
Considering the current circumstances, the Board therefore intends that the disposals
are to be considered an exceptional event for the purposes of an adjustment.
Adjustment approach
The Committee’s approach to considering the adjustment has been to seek to use
standard adjustment principles to isolate the impact of the forced disposal of the
Russia and Ukraine businesses. The Committee has been mindful not to adjust for
general market falls arising as a result of Russia’s invasion of Ukraine over this period.
As a result of the war between Russia and Ukraine and the subsequent sanctions, the
Company’s share price fell to as low as £0.47 on 7 March, rising to £0.57 on 15 March
following the Board’s confirmation of the Company’s intention to exit the Russian
market. The Company is also mindful, however, that the FTSE All-Share fell as a direct
result of Russia’s invasion of Ukraine over this period.
While acknowledging the fact that the VCP is only around 12 months into a five-year
performance period, it is also important to recognise that the disposal of the Russian
and Ukraine businesses represents a significant reduction in the overall business size
of the Group.
The Committee agreed that it would undertake a review of options to adjust the
current VCP in light of the current circumstances, taking a view that the disposal
should be considered an exceptional event for the purposes of an adjustment.
The Committee, working with Deloitte as the Company’s remuneration advisers,
intends to make an adjustment to the starting point of the VCP from £1.30 to £0.91,
using an adjustment factor of 0.70. The adjustment factor is calculated based on the
following principles:
Calculate a pre-transaction share price which is based on a reasonable estimate
of the share price prior to Russia’s invasion of Ukraine.
Adjust this for general FTSE market falls, acknowledging that general market falls
should not form part of any adjustment, i.e. seeking to ensure that the adjustment
focuses solely on the impact of the forced disposal rather than general market falls.
Calculate a post-transaction share price which represents the share price following
the forced disposal by Hyve of the Russia and Ukraine operations.
Apply this adjustment factor to the VCP starting share price under similar principles
that would be used to adjust for other corporate transactions, e.g. demerger,
special dividend, etc.
The adjustment has been calculated as follows:
Description
Value
Pre-transaction share price
(3-day average to 22 February 2022 – the day that Russia invades Ukraine)
£1.13
Adjusted pre-transaction share price
(3-day average to 22 February 2022, adjusted to account for market fall in
FTSE All-Share Index from 22 February 2022 to 11 May 2022 of 4%)
£1.08
Post-transaction share price
(3-day average to 11 May 2022 – Hyve’s announcement of disposal of
Russia business)
£0.76
Adjustment factor
(Post-transaction share price/adjusted pre-transaction share price)
0.70
Original VCP starting share price
£1.30
Application of adjustment factor to original VCP starting share price
£0.91
The Company does not propose to make any other changes to the VCP. The existing
individual and plan limits will remain in place.
This change applies from the original start date of the plan, with no extension to plan
time horizons. To the extent that the awards vest, they will be subject to a two-year
holding period. Vested awards will be subject to clawback until the end of the holding
period for each tranche of the award.
Chairman and Non-Executive Director fees (not subject to audit)
Fees for the Chairman and other Non-Executive Directors are set taking into
consideration the responsibilities of the roles and their participation in the various
Committees of the Company. Non-Executive Directors are not eligible to participate
in annual bonus, LTIP and retirement benefit arrangements.
The appropriateness of fees is reviewed on an annual basis. A 5% increase to fees for
Non-Executive Directors has been agreed and took effect from 1 October 2022.
Strategic report
Governance
Financial statements
109
Annual Report and Accounts 2022
Hyve Group plc
Directors’ remuneration report
continued
The fees for Non-Executive Directors for the year ending 30 September 2023 are
as follows:
Role
FY23 fee
Chairman
1
£210,000
Non-Executive Director base fee
2
£65,000
Senior Independent Director additional fee
3
£10,000
Committee Chair additional fee
£10,000
1
Fee increased from £178,500 to £200,000 from 1 February 2022.
2
Fee increased from £50,725 to £62,000 from 1 February 2022.
3
Fee increased from £7,500 to £10,000 from 1 February 2022.
Payments to past directors (audited information)
There have been no payments to past directors in the year ended 30 September
2022.
Payments for loss of office (audited information)
There have been no payments for loss of office in the year ended 30 September 2022.
Relative importance of spend on pay (not subject to audit)
The graph below shows the Group’s total employee pay and distributions to
shareholders for the financial years ended 30 September 2021 and 30 September
2022, and the percentage change.
Total employee pay
Dividend
£60m
£50m
£40m
£30m
£20m
£10m
£0m
49.7%
0%
2021
2022
Chief Executive Officer pay ratio (not subject to audit)
The table below compares the Chief Executive Officer’s single figure of total
remuneration for the year to the equivalent remuneration of the upper-quartile,
median and lower-quartile UK employees.
Year
Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
2022
Option C
34:1
24:1
16:1
2021
Option C
34:1
25:1
17:1
2020
Option C
17:1
14:1
7:1
To aid year-on-year comparison, the Group has chosen to use Option C, as this
option enabled the ue of readily available data that was current to Hyve’s year end.
The three representative individuals chosen were selected based on their gross pay
in September 2022.
The salary and total remuneration received during 2022 by the employees used in the
above analysis are set out below.
25th percentile
pay ratio
Median pay
ratio
75th percentile
pay ratio
Salary 2022
£31,045
£41,842
£61,565
Total remuneration 2022
£38,991
£54,831
£84,296
Notes on the calculation:
1
The CEO’s single figure of remuneration shown on page 103 was used in the calculation.
2
The figures for both the CEO and the employee at the median include annual bonus payments in respect of the
year ended 30 September 2022.
3
The total remuneration for the three individuals shown above was calculated on the same basis, save for the
exclusion of benefits for practical purposes. This is not considered to materially impact the results.
4
As detailed earlier in the report, no long-term incentives vested. The individual identified at the 75th percentile
received sales commission in the year, and this is included in the calculation.
5
To ensure that the individuals identified at the three quartiles are representative of the UK workforce, the total
pay and benefits for a small number of employees centred around each quartile were also considered to
confirm there were no anomalies. The individuals identified were deemed appropriately representative.
Our average workforce remuneration has increased this year, reflecting a small
reduction in our pay ratio in comparison to 2021 now that commission payments have
begun to return to normal as events have been resurrected following the impact of
the COVID-19 pandemic. While no bonuses were paid in 2020, in 2021 and 2022
payments were at or close to maximum, which has a greater impact on the CEO’s
single figure, given a greater proportion of his package is delivered in variable pay.
We believe that the remuneration policies and approach for our CEO and the
wider workforce are fit for purpose and deliver pay outcomes appropriate to the
circumstances of the year, reflecting the relative contributions made at different
levels of the Group.
On this basis, the pay ratio demonstrates consistency with the pay, reward and
progression policies for the Company’s UK employees taken as a whole.
110
Hyve Group plc
Annual Report and Accounts 2022
Performance graph (not subject to audit)
The chart below compares the value of £100 invested in Hyve Group plc shares, including reinvested dividends, on 30 September 2012 compared to the equivalent investment
in the FTSE 250 Index and FTSE Small Cap Index, over the last 10 financial years. The FTSE 250 and FTSE Small Cap Index have been chosen, as the Company has been a
constituent of both indices during the period since 2008.
FTSE Small Cap
FTSE 250
Hyve Group PLC
Source: Datastream (Thomson Reuters)
Total shareholder return
£350
£200
£150
£100
£50
£0
£300
£250
30/09/2012
30/09/2013
30/09/2014
30/09/2015
30/09/2016
30/09/2017
30/09/2018
30/09/2019
30/09/2020
30/09/2021
30/09/2022
The table below shows the single figure of remuneration for the CEO over the same period.
Financial year ended 30 September
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Russell Taylor */Mark Shashoua #
*
*
*
* #
#
#
#
#
#
#
CEO single figure of remuneration (£000)
1,951
1,050
567
618
1,035
1,191
823
512
1,258
1,322
Annual bonus
awarded
% of maximum opportunity
94%
68%
16%
27%
79.9%
97.8%
41.7%
0%
97%
100%
£ amount (£000)
402
298
72
122
539
680
298
0
716
760
PSP vesting
% of maximum opportunity
100%
70%
–
–
–
–
–
–
–
–
£ amount (£000)
1,080
277
–
–
–
–
–
–
–
–
Strategic report
Governance
Financial statements
111
Annual Report and Accounts 2022
Hyve Group plc
Directors’ remuneration report
continued
Change in remuneration for Directors and for employees as a whole over FY22 (not subject to audit)
The CEO and other Directors have service agreements with Hyve Group plc, the parent company. The parent company has no other employees.
The table below shows the change in the Directors’ annual cash, defined as salary, taxable benefits and annual bonus, compared to the average employee in recent years.
Executive Directors
Non-Executive Directors
Mark Shashoua
John Gulliver
Richard Last
Nicholas Backhouse
Rachel Addison
Anna Bateson
Average employee
2
2022
2021
2020
2019
2022
2021
2020
2019
2022
2021
2020
2019
2022
2021
2020
2019
2022
2021
2020
2019
2022
2021
2020
2019
2022
2021
2020
2019
Base salary/
fees
1
3%
6%
3%
3%
3%
100%
–
–
10%
7%
–3%
62%
31%
11%
175% 100%
100%
–
–
–
100%
–
–
–
53%
–4%
12%
28%
Benefits
3
335%
–
1%
–
5%
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
63%
–13% –30%
–8%
Bonus
6%
100% –56%
56%
6%
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20%
–100%
85%
52%
1
The change in salary for Executive and Non-Executive Directors reflects the adjustment to full pay and fees following the temporary reduction taken as a direct result of the COVID-19 pandemic during FY20. There were no
increases to fees or base pay from FY20 to FY21.
2 The change in salary and taxable benefits for other employees reflects a combination of a change in the size and geographical footprint of the Company (more UK employees and fewer in Russia) and the impact of foreign
exchange movement.
3
Benefits increase for Mark Shashoua is due to year on year healthcare cost increases.
Consideration of workforce pay and approach to engagement (not subject to audit)
The Group’s remuneration policy is designed to attract, reward, motivate and retain the highest calibre of talent. Remuneration is considered within the overall context of the
Group’s sector and the markets in which it operates. The policy for the majority of employees is to pay around the relevant mid-market range with a competitive package
designed to align the interests of employees with those of shareholders, and with an appropriate proportion of total remuneration dependent upon performance.
As set out on page 98, careful consideration was given to the approach taken on annual pay awards for the year ending 30 September 2023.
With UK inflation as high as 10%, the Company was mindful of the need to balance a fair pay award for employees with affordability for the Company over the longer term.
In addition to a 5% pay award for employees of the Group, a cost-of-living award was made to our lower paid employees on a tiered basis up to 10% base pay. Financial
wellbeing has become more and more relevant this year, and we have hosted a series of financial wellbeing talks and workshops with industry experts. Other enhancements
were made to our employee benefits package, as detailed in the ‘People and values’ section on page 20.
While no formal employee engagement has taken place in respect of executive pay, the Company communicates annual bonus metrics and targets to all eligible employees
and explains the relationship between annual targets and the Company’s strategy.
Dilution limits (not subject to audit)
The Group has at all times complied with the dilution limits set out in the rules of its share plans (principally a limit of 10% in 10 years), including the newly approved VCP.
The Company is currently well within these dilution limits. Shares to satisfy awards granted under the PSP which are normally purchased in the market do not count towards
the dilution limits.
112
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Annual Report and Accounts 2022
Directors’ shareholding guidelines and share scheme interests (audited information)
Where awards vest, Executive Directors are required to retain shares of a value equal to 25% of the gain made after tax, on the vesting of awards under the plans, until they
have built up their minimum shareholding of at least 200% of annual base salary. Under the approved Policy, on leaving employment, Executive Directors are expected to
maintain the lower of 100% of their minimum shareholding requirement or their actual shareholding at the time of departure for 12 months from their termination date.
The table below shows the Directors’ interests in shares owned outright and/or vested, and the extent to which the Group’s shareholding guidelines are met. Face value of
shares is calculated using the share price on 30 September 2022 of 50.78p.
Number of
unvested shares
subject to
performance
conditions
1
Number of
shares held
under the
Deferred Bonus
Share Plan
2
Number of
shares held
as at
30 September
2022
3
Number of
shares held
as at
30 September
2021
Shareholding
guideline
(as % of
salary/fees)
Guideline
met
4
Mark Shashoua
542,770
17,293
838,747
637,594
200%
Yes
4
84%
John Gulliver
255,407
–
148,962
59,735
200%
No
5
25%
Richard Last
–
–
305,163
195,000
n/a
n/a
Rachel Addison
–
–
–
–
n/a
n/a
Nicholas Backhouse
–
–
16,250
16,250
n/a
n/a
Former Directors (shareholdings as at date of stepping down from the Board)
Anna Bateson
–
–
–
–
n/a
n/a
Sharon Baylay
–
–
–
–
n/a
n/a
Stephen Puckett
–
–
–
–
n/a
n/a
1
PSP awards are granted as nominal cost options.
2
Deferred bonus share awards in respect of the years ended 30 September 2018 and 2019 for Mark Shashoua.
3
Current shareholding includes net shares owned outright and/or vested and shares held by family interests.
4 Mark Shashoua had invested a significant amount in the Company prior to the pandemic’s impact on the share price, the share consolidation and the latest rights issue, and therefore exceeded the shareholding guideline at
that time. Consequently, in the Committee’s opinion, he is considered to continue to meet the shareholding guidelines.
5
John Gulliver was newly appointed to the Board on 1 October 2020 and as a result is permitted to build up his shareholding requirement over time.
Strategic report
Governance
Financial statements
113
Annual Report and Accounts 2022
Hyve Group plc
Directors’ remuneration report
continued
Directors’ interests in performance share plans (audited information)
Details of outstanding PSP awards are as follows. The performance targets are summarised below the table:
Director Scheme
1
1 Oct 2021
Granted
during
the year
Option
price (£)
Exercised
during
the year
Lapsed
Market
price at
exercise
date (£)
30 Sep 2022
Date of
grant
Share price
on date of
grant (£)
Exercisable
from
Exercisable to
Gain on
exercise
£000
Mark Shashoua
2014 Employees’ Performance Share Plan
2
624,912
–
0.01
–
624,912
–
–
14/03/2019
£3.82
14/03/2022
14/03/2029
–
2014 Employees’ Performance Share Plan
81,102
–
0.01
–
–
–
81,102
23/01/2020
£6.07
23/01/2023
23/01/2030
–
2014 Employees’ Performance Share Plan
3
461,668
–
0.10
–
–
–
461,668
04/12/2020
£1.24
04/12/2023
04/12/2030
–
Total
1,167,682
–
–
–
(624,912)
–
542,770
–
–
–
–
–
John Gulliver
2014 Employees’ Performance Share Plan
33,957
–
0.01
–
–
–
33,957
23/01/2020
£6.07
23/01/2023
23/01/2030
–
2014 Employees’ Performance Share Plan
3
221,450
–
0.10
–
–
–
221,450
04/12/2020
£1.24
04/12/2023
04/12/2030
–
Total
255,407
–
–
–
–
–
255,407
–
–
–
–
–
1
The performance conditions applying to the awards granted in prior years are set out in the Directors’ remuneration report for the respective year.
2
The performance conditions for the award granted on 14 March 2019 were tested in the prior year. As set out on page 90 of last year’s report, the threshold performance targets were not met and, as a result, this award lapsed
in full.
3
Performance condition starting point of FY21 PSP award to be adjusted as set out below.
For all the awards, both the number of shares included in the above tables and the
share price at grant have been adjusted following the share consolidation and 2020
rights issue using the standard TERP adjustment to maintain the value of the award,
on a theoretical basis, through the 2020 rights issue. The awards granted in 2017 had
previously been adjusted in a similar manner for the 2018 rights issue. The TERP
formula is as approved by HMRC and applied to both executive and all-employee
share awards.
PSP awards
As set out on page 109, in-flight PSP awards will be adjusted using the same
mechanism applied to the VCP adjustment.
For awards made in FY21 (including to Executive Directors and other members of the
senior leadership team), the adjustment mechanism will be taken into account at the
time of vesting, with performance being assessed against adjusted performance
target as set out below:
Vesting Level
Original target
Adjusted target
0%
Less than £1.10
Less than £0.77
20%
£1.10
£0.77
50%
£1.25
£0.88
80%
£1.40
£0.98
100%
£1.90
£1.33
114
Hyve Group plc
Annual Report and Accounts 2022
Service contracts (not subject to audit)
In line with provision 18 of the 2018 UK Corporate Governance Code, all Directors
are subject to re-election annually at the Company’s Annual General Meeting. The
Chairman has a six-month notice period and the Non-Executive Directors have a
one-month notice period. Each Non-Executive Director is engaged on the basis of a
letter of appointment, which is available to view at the Group’s registered office and
at the Annual General Meeting.
The effective dates of their letters of appointment are as follows:
Director
Date of letter of
appointment
Notice period
Richard Last
12 February 2018
6 months
Nicholas Backhouse
1 May 2019
1 month
Rachel Addison
1 March 2022
1 month
Anna Bateson
1
1 March 2022
1 month
1
Anna Bateson resigned from the Board on 16 October 2022.
Executive Director service contracts have no fixed term and have a notice period
of up to 12 months from either the Executive Director or the Group. The Executive
Director service contracts are available to view at the Group’s registered office and
at the Annual General Meeting. The dates of the Executive Director service contracts
and the relevant notice period are as follows:
Director
Effective date
of contract
Notice period
Mark Shashoua
1 September 2016
12 months
John Gulliver
1 October 2020
6 months
Statement of shareholder voting at the Annual General Meeting
(not subject to audit)
The following table shows the voting outcome of the latest Directors’ Remuneration
Policy and annual report on remuneration resolutions presented to shareholders:
Resolution
Votes for
Votes for
(%)
Votes against
Votes against
(%)
Votes withheld
(abstentions)
Annual remuneration
report (2022 Annual
General Meeting)
215,575,594
91.6%
19,709,565
8.4%
7,214,489
Directors’
Remuneration Policy
(2021 Annual General
Meeting)
156,407,562
75.2%
51,565,240
24.8%
37,382
As outlined in last year’s report, the Remuneration Committee carried out a
significant consultation with c.60% of the shareholder base prior to the 2021 General
Meeting. Many shareholders understood the rationale for the VCP and supported
the approach, and this was reflected in the remuneration policy vote result. However,
the Committee also recognised that, given our diverse shareholder base, together
with the nature of the proposals, a significant number of shareholders did not feel
able to support the policy. Following the General Meeting, an engagement process
was undertaken whereby shareholders who had not been able to support the policy
and the VCP were invited to discuss their concerns with the Remuneration Committee
Chair. The primary feedback from those shareholders was that they were not
supportive of the construct and nature of the VCP. The Committee was however
pleased that the 2021 Directors’ Remuneration Report, which was put to an advisory
vote at the AGM in early 2022, was approved by 91.6% of votes cast. As outlined in the
Remuneration Committee Chair’s statement, the Committee has recently undertaken
further engagement with shareholders, inviting discussion on the intended adjustment
to the VCP base price. The Committee is committed to on-going dialogue with
shareholders and is grateful to those shareholders that have engaged with us over
the past year.
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Directors’ remuneration report
continued
UK Corporate Governance Code: Provision 40 (not subject to audit)
The Committee considers that the current Remuneration Policy and its implementation during the year appropriately addresses the following principles, as set out in the
UK Corporate Governance Code.
Principle
How the Committee has addressed this
Clarity
In line with our commitment to transparency and engagement with shareholders on executive remuneration, the Remuneration Committee Chair has
engaged with our shareholders during the year, particularly with regard to the VCP adjustment. Details are provided on page 109.
Simplicity
In determining the remuneration framework, the Committee was mindful of avoiding complexity and ensuring that arrangements are easy to
understand for stakeholders. Our remuneration arrangements are simple in nature and well understood by participants and shareholders.
The new VCP encourages a simple focus on long-term shareholder value creation.
Risk
The Committee believes that the structure of remuneration arrangements does not encourage inappropriate risk taking.
The remuneration framework has a number of features which align remuneration outcomes with risk, including the deferral of bonus into shares, the
holding period on PSP and VCP awards, and personal shareholding requirements. These features ensure that Executive Directors are incentivised to
deliver the Group’s strategic ambitions within the Group’s risk appetite.
Malus and clawback provisions apply to the annual bonus and VCP as well as any in-flight PSP awards.
Predictability
The Remuneration Policy contains illustrations of threshold, target and maximum opportunity under the annual bonus and VCP. Actual outcomes are
dependent on performance achieved against predetermined targets.
For the VCP, the starting point at which the market cap hurdle begins to calculate value creation has been adjusted to £0.91. In addition, there is a cap
on the number of shares that can be delivered under the VCP.
Proportionality
The Remuneration Policy is designed such that Executive Directors are not rewarded for poor performance. Performance conditions attached to the
annual bonus and VCP require a minimum level of performance to be achieved before any pay-out is achieved.
The Committee has discretion to adjust both annual bonus and VCP outcomes when they are not considered to appropriately reflect the underlying
performance of the individual or the Group.
The Committee is mindful of alignment to the workforce when making decisions about executive pay, and periodically receives reports on the
employees’ views on the Company’s remuneration structure.
Alignment to culture
The performance measures that are used for the annual bonus are closely aligned to the Company’s purpose, values and strategy. For 2023, the
annual bonus framework has been aligned with the short-term strategic goals of the Company. The VCP focuses participants on Hyve’s ambitious
growth strategy and long-term value creation for shareholders.
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Remuneration Policy
The 2021 Directors’ Remuneration Policy (‘the Policy’) was approved at the 25 October 2021 General Meeting and took effect from that date. The Remuneration Policy applies
to payments made after that date. The below summarises the approved Policy.
Directors’ Remuneration Policy table
The following table summarises the key features of each element of the Policy, their purpose and link to strategy.
Full details of the application of the Policy for FY23 are disclosed on pages 99 and 100.
This table also applies to any other individual who is required to be treated as an Executive Director under the applicable regulations.
Element
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Base salary
Set at competitive levels in the
markets in which the Group
operates, to attract and retain
executives capable of delivering
the Group strategy.
Typically reviewed annually, with
changes normally effective from
1 October of each year.
Salaries will be set by the Committee,
considering:
Scope of the role and the markets
in which the Group operates;
Performance and experience of
the individual;
Pay levels at organisations of a
similar size and complexity; and
Pay and conditions elsewhere in
the Group.
There is no overall maximum
opportunity or increase.
Salaries may be increased each year
(in percentage of salary terms) in line
with increases granted to the wider
workforce.
Increases beyond those granted to
the wider workforce (in percentage
of salary terms) may be awarded in
certain circumstances, including but
not limited to where there is a change
in responsibility or experience, or a
significant increase in the scale of the
role and/or size, value or complexity
of the Group.
The Committee retains the flexibility to
set the salary of a new hire at a discount
to the market level initially, and to
implement a series of planned increases
in subsequent years, to bring the salary
to the desired positioning, subject to the
individual’s performance.
Not applicable, though
individual performance will be
considered when reviewing
base salary levels.
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Element
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Benefits
Designed to be competitive in the
market in which the individual
is employed and to support the
wellbeing of employees.
Benefits include life insurance, private
medical insurance and income
protection insurance.
Where appropriate, other benefits may
be offered, including, but not limited to,
allowances for car, accommodation,
relocation, other expatriate benefits
(including tax thereon) and participation
in all-employee share schemes (in
accordance with limits set by HMRC
and/or the parameters of any other
applicable legislation).
Benefits vary by role and individual
circumstance and eligibility is reviewed
periodically.
There is no prescribed maximum.
The value of benefits may vary from
year to year depending on the cost
to the Company from third-party
providers.
Not applicable.
Retirement
benefits
To provide cost-effective
retirement benefits as part of
a competitive package, to aid
attraction and retention of
high-calibre executives.
Participation in defined contribution
plan or cash in lieu.
The current level of Group contribution
is 10% of base salary, which is in line with
the UK workforce rate.
The maximum percentage may
not exceed the workforce rate.
The Committee has discretion to
consider the relevant workforce rate,
including consideration of the relevant
global jurisdiction.
Not applicable.
Directors’ remuneration report
continued
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Element
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Annual
performance
bonus
Designed to reinforce individual
performance and incentivise
year-on-year delivery of
sustainable financial performance
and strategic objectives.
Awards are based on performance
measured over the financial year.
Executives are normally required to
defer one-third of any bonus paid into
shares for three years, with the balance
paid in cash. Deferred shares typically
vest subject to continued employment.
Dividend equivalent payments may
be made on deferred shares at the
time of vesting and may assume the
reinvestment of dividends.
Payments made under the annual
bonus are subject to recovery and
withholding provisions. Further detail
is provided in the notes below.
Maximum potential opportunity of up to
150% base salary.
For the current Executive Directors,
maximum bonus opportunity levels are:
150% of salary (CEO)
120% of Salary (CFOO)
Bonus will be predominantly
based on a range of financial
targets (e.g. revenue growth,
cash conversion and profit).
For a minority of the bonus,
targets may relate to the
Group’s other operational and
strategic priorities (which may
include individual targets).
The Committee sets the
weightings of the respective
metrics on an annual basis.
Performance is measured over
the financial year.
For financial targets, and, where
practicable, strategic targets,
bonus starts to accrue once the
threshold target is met, rising on
a graduated scale to 100% for
outperformance.
The payment for threshold
performance may be adjusted
to reflect the nature of the
target set.
The Committee has discretion
to adjust formulaic outcomes,
if it believes it better reflects
overall Company or individual
performance (either financial or
non-financial) in the year. While
this can be both upwards and
downwards (including to zero),
the bonus may not exceed the
maximum levels detailed in the
policy table.
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Element
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Value Creation
Plan
To attract, retain and incentivise
Executive Directors. This is a
new plan designed to align the
interests of Executive Directors
and shareholders by incentivising
the delivery of substantial and
sustained shareholder return
over the long term.
Grant of one-off awards to cover a
five-year performance period.
The award gives Executive Directors the
opportunity to share in the total value
created for shareholders above a two-
tier hurdle measured at years three,
four and five.
The hurdle levels are:
10% growth per annum: 10% VCP pool
15% growth per annum: 20% VCP pool
Executive Directors may choose to
receive their share awards by acquiring
subsidiary growth shares at the time
that they are invited to join the VCP.
Fifty per cent of cumulative VCP value
will vest in year three and year four
(less anything paid in year three), with
100% of cumulative VCP value vesting
following year five (less anything paid
in years three and four).
Any VCP value will be delivered in
Company shares that will be subject
to a two-year holding period.
If the minimum growth hurdle of 10%
p.a. has not been achieved in years
three or four, no value will be paid at
that time, but value may be delivered
in year five, provided the hurdle has
been met.
No dividends or dividend equivalents
will be paid prior to vesting, but
adjustments may be made in the
event of a special dividend or similar
capital return.
The maximum number of Company
shares that may be delivered under
the VCP is subject to a limit of 7% of the
issued share capital on the date of the
plan’s adoption.
For the Executive Directors, the following
maximum VCP value limits apply:
CEO: 35% of the VCP pool; and
Other current Executive Directors:
19% of VCP pool.
For the Executive Directors, the
maximum number of shares which
may vest under the VCP is as follows:
CEO: 6,495,638 shares; and
Other current Executive Directors:
3,526,203 shares.
In the event of a new Executive Director
hire, the level of VCP value that may be
delivered will be considered at that time,
but will in no event exceed the maximum
limit in respect of the CEO.
It is not intended that any further long-
term incentive awards outside of the
VCP will be made to existing Executive
Directors under this Policy.
Minimum growth hurdle of
10% per annum. Upper growth
hurdle of 15% per annum.
The starting share price for
the beginning of the VCP
performance period will be
the higher of the three-month
average up to 30 September
2021 and £1.30.
The share price used on each
vesting date in years three,
four and five will normally
be based on a three-month
average to the end of the
relevant financial year.
The Remuneration Committee
may reduce the level of value
delivered under the VCP if it
determines that the formulaic
vesting level would not reflect
the underlying financial or
non-financial performance of
the Company or the participant
or such other factors as it may
consider appropriate.
Directors’ remuneration report
continued
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Element
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Performance
Share Plan
To ensure that the Executive
Directors’ interests are aligned
with those of shareholders,
through providing share-based
awards linked to sustained
improvements in long-term
targeted performance metrics.
Subject to shareholder approval of
the Value Creation Plan and awards
subsequently being made under this
plan to existing Executive Directors,
no further PSP awards will be made
to existing Executive Directors over the
life of the Policy.
PSP awards granted under a previous
remuneration policy will continue to
operate under the terms of that policy
and relevant plan rules.
As set out in our previous
remuneration policy.
As set out in our previous
remuneration policy.
Non-Executive
Directors’ fees
To reflect the time commitment
in preparing for and attending
meetings, the duties and
responsibilities of the role and
the contribution expected from
the Non-Executive Directors.
Annual fee for Non-Executive
Chairman.
Annual base fee for Non-Executive
Directors.
Additional fees are paid to the Senior
Independent Director and Chair of the
Audit and Remuneration Committees
to reflect additional responsibilities.
Additional fees may be payable for
other additional responsibilities.
Fees are reviewed annually, taking
into account:
Time commitment;
Responsibilities; and
Fees paid by comparable companies.
All Non-Executive Directors are
reimbursed for travel and expenses
reasonably incurred in performing their
duties such that they are no worse off
on a post-tax basis.
There is no prescribed maximum.
Non-Executive Director fee increases
are applied in line with the outcome of
periodic reviews and considering wider
factors, e.g. inflation.
Not applicable.
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Notes to the policy table
Performance measure selection and approach to target setting
Performance targets are set at such a level as to be stretching and achievable, with regard to the particular strategic priorities and economic environment.
The following sets out the performance measures for annual bonus and Value Creation Plan awards in FY23 as well as the business performance and the behaviours that they
drive:
Component
Performance measure
Link to strategy
Annual bonus
A mixture of financial and strategic measures
determined each year by the Committee.
Set in line with the Group’s KPIs and key financial and strategic priorities for the
Company. The use of financial metrics (which could include revenue, profitability and/or
cash) ensures executives are focused on maintaining the ongoing financial health of the
business. Strategic objectives may be included where appropriate to ensure delivery of
key business milestones.
VCP
Market capitalisation growth.
Provides alignment with shareholders on the achievement of the Group’s long-term
growth ambition. Management will only succeed in significantly increasing the share
price if strong financial performance and key strategic milestones are delivered.
The Committee may vary or rebalance the weighting of the performance metrics
for future incentive awards to ensure that they remain aligned with the Company’s
strategic objectives. The Committee may also adjust the targets for awards or the
calculation of performance measures and vesting outcomes for events not foreseen
at the time the targets were set (e.g. material M&A activity) to ensure they remain
a fair reflection of performance over the relevant period. When making such
judgements, the Committee may consider all such factors deemed relevant.
Clawback, malus and discretion
Clawback
is the recovery of payments made under the annual bonus or vested
deferred bonus, PSP and VCP awards. The Committee may decide to apply clawback
for up to one year from the payment of bonus awards (or the completion of the next
audit of Group accounts, if later), and up to two years from the vesting of PSP awards.
For the VCP awards, clawback may apply up to the end of the holding period for each
tranche of the award.
Clawback may apply to all or part of a participant’s payment or award and may be
invoked, among other means, by reducing outstanding awards or requiring the return
of the net value of vested awards to the Group.
Malus
is the adjustment of unpaid annual bonus, unvested deferred bonus awards,
unvested PSP awards or unvested VCP Shares. The Committee may apply malus to
reduce an award or determine that it will not vest or that it will only vest in part.
In respect of the VCP, malus and clawback may be invoked by the Committee in the
event of the following circumstances:
A material misstatement of results;
Error in assessing the VCP pool and/or the performance condition;
Material failure of risk management, fraud or material financial irregularity;
Serious reputational damage;
Serious misconduct or material error on the part of the participant;
Material corporate failure; or
Any other circumstances which the Directors, in their discretion, consider to be
similar in their nature or effect to those set out above.
In respect of all other incentive plans, malus and clawback may be invoked by the
Committee in the event of a fraud or material misstatement of results being identified
in relation to the year in which the bonus or incentive was earned.
In line with the 2018 UK Corporate Governance Code, the Committee retains the
ability to adjust incentive outcomes to ensure that they remain reflective of underlying
financial and non-financial performance of participants or the Group or where the
formulaic outcome is not appropriate in the context of circumstances that were
unexpected or unforeseen when the targets were set.
Directors’ remuneration report
continued
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Subject to shareholder approval of the VCP, the Committee will have the ability
to reduce the level of value delivered under the VCP in the event that business
performance is not deemed to be aligned to the outcome of the VCP. The Committee
may use its discretion to reduce the VCP vesting level if it considers that this does not
reflect the underlying financial or non-financial performance of the Group or the
participant over the performance period, if the vesting level is inappropriate in the
context of circumstances that were unexpected or unforeseen at the grant date, or
there exists any other reason why an adjustment is appropriate.
Detailed provisions
All share awards are subject to the terms of the relevant plan rules, and, where
relevant, Articles of Association, under which the award has been granted. The
Committee may adjust or amend awards only in accordance with the provisions of
the relevant plan rules or articles. This includes adjusting awards to reflect one-off
corporate events, such as a change in the Company’s capital structure (e.g. a rights
issue or a demerger). In accordance with the plan rules, awards may be settled
in cash rather than shares, where the Committee considers this appropriate
(e.g. exchange control impact on overseas participants).
The Remuneration Committee reserves the right to make any remuneration payments
and/or payments for loss of office (including exercising any discretions available to it
in connection with such payments), notwithstanding that they are not in line with the
Policy set out above, where the terms of the payment was agreed either: (i) before
the 2019 Annual General Meeting (the date the Company’s previous shareholder-
approved directors’ remuneration policy came into effect; (ii) during the term of,
and was consistent with, any previous policy; or (iii) at a time when the relevant
individual was not a director of the Company and, in the opinion of the Remuneration
Committee, the payment was not in consideration for the individual becoming a
director of the Company. For these purposes, ‘payments’ includes the Remuneration
Committee satisfying awards of variable remuneration and, in relation to an award
over shares, the terms of the payment are ‘agreed’ at the time the award is granted.
The Committee may make minor amendments to the Remuneration Policy to aid
its operation or implementation without seeking shareholder approvals (e.g. for
regulatory, exchange control, tax or administrative purposes or to take account of
a change in legislation).
Differences in Remuneration Policy operated for other employees
The approach to annual salary reviews is consistent across the Group. All employees
are eligible to participate in an annual bonus scheme or a commission-based
incentive package. Opportunities and specific performance conditions vary by
organisational level within the Group, with business area specific and personal
metrics incorporated where appropriate.
Members of senior management and other key employees are eligible for
consideration of awards under either the VCP or the PSP to further support
alignment with shareholder interests.
Executive Director shareholding guidelines
The importance of aligning the interests of Executive Directors and shareholders is
hugely important, and as such, Executive Directors are expected to build a significant
shareholding in the Group over time. Executive Directors are normally required to
retain shares of a value equal to at least 25% of any gain made after tax on the
vesting of awards under the plans, until they have built up a minimum shareholding
of a value equivalent to at least 200% of annual base salary.
On leaving employment, Executive Directors will be expected to maintain at least
100% of their minimum shareholding requirement, for 12 months from their termination
date. If the leaver has not yet met their shareholding requirement on departure, they
will be required to retain the shares they do own up to these limits. This requirement
can be waived in certain exceptional personal circumstances (e.g. death, disability,
ill health).
These post-employment shareholding guidelines will apply to any shares delivered
through the vesting of share awards made after this Remuneration Policy comes
into effect.
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Remuneration Policy for new Executive Directors
When appointing a new Executive Director, including by way of internal promotion, the Company may make use of all the existing components of remuneration as follows:
Component
Approach
Base salary
Determined in line with the stated policy, and taking into account their previous salary. Initial salaries may be set below market
and consideration given to phase any increases over two or three years subject to development in the role. Above-market
salaries may also be offered if the experience and calibre of the candidate is considered to justify such an approach being
taken by the Committee.
Benefits and retirements benefits
In line with the stated policy.
For some candidates, this may include relocation costs, if applicable.
Annual bonus
In line with the stated policy, with the relevant maximum pro rata to reflect the proportion of the year served.
Tailored bonus targets may apply to a new Executive Director in the year of appointment (e.g. if the appointment took place
towards the end of a financial year).
Long-term share awards
Where individuals participate in the VCP, participation will be in line with the stated policy, subject to suitable performance
criteria in line with the Rules and the principles of the Plan.
In exceptional circumstances, the Committee may elect to not grant an interest in the VCP to a new executive appointment, but
instead grant an award under the PSP up to a maximum of 200% of salary (consistent with the limit under the previous policy).
Individuals would not be expected to be granted awards under both the VCP and PSP during the life of this policy.
When determining appropriate levels of remuneration for a new Executive Director,
the Committee will take into consideration all relevant factors (including quantum,
nature of remuneration and the jurisdiction from which the candidate was recruited)
to ensure that arrangements are in the best interests of both the Group and its
shareholders.
The Committee may consider it appropriate to grant an award under a structure not
included in the policy, to ‘buy out’ remuneration arrangements forfeited on joining
the Company. Existing plans (including the PSP) may be used in respect of buy-out
awards on recruitment. The Committee may also exercise the discretion available
under Listing Rule 9.4.2 R where necessary.
Any such buy-out would be provided for taking into account the form (cash or shares),
timing and performance conditions of the remuneration being forfeited, with vesting
on a comparable basis to the likely vesting of the previous employer’s award. Any
‘buy-out’ award would be excluded from the maximum value of incentives referred to
above. In cases of appointing a new Executive Director by way of internal promotion,
the Group will honour any contractual commitments made prior to their promotion as
Executive Director. Any incentive awards granted in respect of the prior role would be
allowed to vest according to their original terms.
In cases of appointing a new Non-Executive Director, the approach will be consistent
with the policy.
Relocation and expatriate packages
There may be occasions, when hiring a new Executive Director, that a relocation
package is awarded, where the individual or the individual’s immediate family
relocate either on a temporary or permanent basis in order to fulfil their role in the
best interests of the Group and its shareholders. In such instances, the Committee
retains the right to compensate for reasonable and appropriate relocation expenses.
Service contracts and letters of appointment
In line with provision 18 of the 2018 UK Corporate Governance Code, all Directors are
subject to re-election annually at the Company’s Annual General Meeting. The Chair
has a notice period of up to six months and the Non-Executive Directors have a
one-month notice period. Each Non-Executive Director is engaged on the basis of
a letter of appointment, which are available to view at the Group’s registered office
and at the Annual General Meeting.
Executive Director service contracts have no fixed term and have a notice period of
up to 12 months. The current CEO has a notice period of 12 months and the current
CFOO has a notice period of six months (in respect of notice from either the Executive
Director or the Group). The Executive Director service contracts are available to view
at the Group’s registered office and at the Annual General Meeting.
Directors’ remuneration report
continued
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Exit payment policy
The Committee’s policy is to limit severance payments on termination to pre-established contractual arrangements and the rules of the relevant incentive plans. In doing so,
the Committee’s objective is to avoid rewarding poor performance. Furthermore, the Committee will take account of the Executive Director’s duty to mitigate their loss.
Termination payments are limited to base salary, benefits and pension during the notice period and the Company may elect to put Executive Directors on gardening leave
during their notice period and/or make a payment in lieu of notice and contractual benefits. If an Executive Director’s contract is terminated, they may be eligible for a
pro-rata bonus over the period to the date of cessation of employment, subject to performance.
An Executive Director’s service contract may be terminated with immediate effect for certain events such as gross misconduct. No payment or compensation beyond sums
accrued up to the date of termination will be made if such an event occurs.
In addition to the contractual provisions regarding payment on termination set out above, the Group’s incentive plans and shares schemes contain provisions for termination
of employment, which are summarised in the table below.
Component
Bad leaver
Good leaver
Change of control
Annual bonus
No annual bonus payable.
Eligible for a payment to the extent that performance conditions
have been satisfied and pro rata for the proportion of the financial
year served (or such lower period as the Committee determines),
with Committee discretion to treat otherwise. Participants may be
required to defer a portion of any bonus into shares in line with the
normal policy.
Eligible for an award to the extent that
performance conditions have been satisfied
up to the change of control and pro rata for
the proportion of the financial year served,
with Committee discretion to treat otherwise.
Deferred Bonus Plan
Outstanding awards
are forfeited.
Outstanding awards will normally vest on the original vesting date
or such other earlier date as the Committee may determine.
Outstanding awards will normally vest in full.
PSP
Outstanding awards
are forfeited.
Outstanding awards will continue and be tested for performance
over the full period and reduced pro rata for time based on the
proportion of the period served, with Committee discretion to treat
otherwise in respect of time pro-rating. Awards may vest early in
certain circumstances (e.g. death, or at the Committee’s discretion).
Any applicable holding period would normally continue to apply.
Outstanding awards will normally vest and
be tested for performance over the period
to change of control, and reduced pro rata
for time based on the proportion of the
period served, with Committee discretion
to treat otherwise.
VCP
Compulsory purchase
of VCP shares by the
Company. Where awards
lapse, the participant will
be required to sell their
growth shares at cost.
Good leaver status may normally only be awarded to participants
from the second anniversary of grant. If a participant leaves within
the first two years for any reason, all awards would normally lapse
(except in exceptional cases such as compassionate circumstances).
The participant’s VCP Shares will continue to vest in the ordinary
course, subject to the satisfaction of the Performance Condition
and a reduction to reflect the period elapsed at the date of leaving
as a proportion of the vesting period, unless the Remuneration
Committee determines that they should vest on cessation, subject
to the Performance Condition (in which case they will be subject to
time pro-rating unless the Committee determines otherwise).
Any applicable holding period would normally continue to apply.
Awards will vest early. The extent to which any
unvested awards will vest will be determined
at the discretion of the Committee, considering
the relevant VCP value and any adjustments
they consider appropriate. Alternatively,
awards may be exchanged for equivalent
awards of shares in the acquiring company.
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An individual would normally be considered a good leaver if they leave for reasons of death, ill health, disability, redundancy, a cessation of part of the business in which the
individual is employed or engaged, circumstances that are considered by the Committee to be retirement or any other reason the Committee determines.
The Committee reserves the right to make any other payments in connection with an Executive Director’s cessation of office or employment where the payments are made in
good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement of any claim arising in connection with
the cessation of a Director’s office or employment. Any such payments may include, but are not limited to, paying any fees for outplacement assistance and/or the Director’s
legal and/or professional advice fees in connection with their cessation of office or employment.
External appointments
The Board supports Executive Directors holding Non-Executive directorships of other Companies and believes that any such appointments are part of the continuing
development of the Executive Directors from which the Group will ultimately benefit. Executive Directors may accept external appointments with the prior approval of the
Board and fees from any such appointments may be retained by Executive Directors.
Illustration of the application of the Remuneration Policy
The charts below show how the remuneration of the Executive Directors varies in three different performance scenarios.
CEO
Maximum
£4,095k
15% growth
£2,082k
10% growth
£911k
Minimum
£542k
26%
35%
39%
60%
40%
100%
13%
18%
69%
£0m
£1.0m
£2.0m
£3.0m
£4.0m
£5.0m
CFOO
Maximum
£2,208k
15% growth
£1,115k
10% growth
£503k
Minimum
£326k
29%
32%
39%
65%
35%
100%
15%
16%
69%
£0m
£1.0m
£2.0m
£3.0m
Fixed pay
Annual bonus
VCP
Assumptions underlying each element of pay are provided in the tables below:
Component-Fixed
Basis
Base pay
Base salary as disclosed in the 2020 Directors’ Remuneration Report
Pension
Contribution rate applied to current salary
Other benefits
Estimated at a value of £1,000, in line with 2020 single figure
Directors’ remuneration report
continued
126
Hyve Group plc
Annual Report and Accounts 2022
Component-variable
Minimum
Scenario – 10% growth
Scenario – 15% growth
Maximum
Annual bonus
No bonus payable.
Target bonus
50% of maximum
Maximum
Maximum
Long-term share awards
No VCP vesting.
10% share price growth
per annum. No VCP vesting.
15% share price growth
per annum.
c.34% share price growth per
annum. This broadly equates to
the return, which results in the
number of shares delivered by
the VCP being capped.
As the VCP is a block award covering the three-year term of the policy rather than an annual award,
potential pay-outs have been annualised over a three-year period.
In line with the disclosure regulations, the VCP shares vesting as a result of the VCP
pool calculation has been valued using the adjusted share price at grant of £0.95,
i.e. excluding the impact of share price growth on those shares. If the share price
growth were 50% over the five-year period, the VCP value would be £0 and the
annualised total remuneration package would be £1,280,000 for the CEO and
£679,500 for the CFOO. For additional reference, modelling of indicative pay-outs
was set out in the Remuneration Committee Chair’s letter in the October 2021 Notice
of General Meeting.
Consideration of employment conditions elsewhere in the Group and
employee views
When reviewing and setting remuneration levels for Executive Directors, the
Committee considers the pay and employment conditions of all employees of the
Group. The Group-wide pay review budget is one of the key factors when reviewing
the salaries of Executive Directors. Although the Group has not carried out a formal
consultation regarding the Policy, it does comply with local regulations and practices
regarding employee consultation more broadly. The Chief of Staff periodically feeds
back employees’ views on the Group’s remuneration structure.
Consideration of shareholder views
It is the Committee’s policy to consult with major shareholders prior to any changes to
its Executive Director remuneration structure. During the summer and autumn of 2021,
the Committee consulted extensively with major shareholders and engaged with the
proxy bodies on the design of the VCP, this being the key change proposed for the
new Remuneration Policy to operate from the 2021 General Meeting. This process
was constructive and provided valuable input, and as a result, several changes were
made to the Value Creation Plan design.
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Financial statements
127
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Hyve Group plc
Directors’ responsibilities statement
The directors are responsible for preparing the annual report and the financial
statements in accordance with UK adopted international accounting standards and
applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors are required to prepare the group
financial statements in accordance with UK adopted international accounting
standards and have elected to prepare the company financial statements in
accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law). Under company law the
directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the group and company and
of the profit or loss for the group for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether they have been prepared in accordance with UK adopted
international accounting standards, subject to any material departures disclosed
and explained in the financial statements
prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group and the company will continue in
business;
prepare a directors’ report, a strategic report and directors’ remuneration report
which comply with the requirements of the Companies Act 2006.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company’s transactions and disclose with
reasonable accuracy at any time the financial position of the company and enable
them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the company and hence
for taking reasonable steps for the prevention and detection of fraud and other
irregularities. The Directors are responsible for ensuring that the annual report and
accounts, taken as a whole, are fair, balanced, and understandable and provides the
information necessary for shareholders to assess the group’s performance, business
model and strategy.
Website publication
The directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are published
on the company’s website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and integrity of the
company’s website is the responsibility of the directors. The directors’ responsibility
also extends to the ongoing integrity of the financial statements contained therein.
Directors’ responsibilities pursuant to DTR4
The directors confirm to the best of their knowledge:
The financial statements have been prepared in accordance with the applicable set
of accounting standards, give a true and fair view of the assets, liabilities, financial
position and profit and loss of the group.
The annual report includes a fair review of the development and performance of
the business and the financial position of the group and company, together with
a description of the principal risks and uncertainties that they face.
This responsibility statement was approved by the Board of Directors on 13 December
2022 and is signed on its behalf by:
John Gulliver
Chief Finance and Operations Officer
13 December 2022
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Annual Report and Accounts 2022
130
Independent auditor’s report
139
Consolidated income statement
140
Consolidated statement of
comprehensive income
141
Consolidated statement of changes
in equity
142
Consolidated statement of
financial position
144
Consolidated cash flow statement
146
Notes to the consolidated accounts
199
Company statement of financial position
200
Company statement of changes in equity
201
Notes to the Company accounts
209
Glossary
213
Shareholder information
214
Directors, advisers and other information
Financial
statements
Strategic report
Governance
Financial statements
129
Annual Report and Accounts 2022
Hyve Group plc
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion. Our audit opinion is consistent with the additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were appointed by the Directors
with our appointment approved by the shareholders on 23 January 2020 to audit the financial
statements for the year ended 30 September 2020 and subsequent financial periods. The period
of total uninterrupted engagement is 3 years, covering the years ended 30 September 2020
to 30 September 2022. We remain independent of the Group and the Parent Company in
accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. The non-audit services prohibited by that standard were not provided to the
Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Given our assessment of risk and the significance of this area, we have determined going
concern to be a key area of focus for the audit. Our evaluation of the Directors’ assessment of
the Group’s and the Parent Company’s ability to continue to adopt the going concern basis
of accounting and response to the key audit matter is included in the ‘Key Audit Matters’
section below.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt
on the Group and the Parent Company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation to the
Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are
described in the relevant sections of this report.
Independent auditor’s report to the members of Hyve Group plc
Opinion on the financial statements
In our opinion:
the financial statements give a true and fair view of the state of the Group’s and of the
Parent Company’s affairs as at 30 September 2022 and of the Group’s loss for the year
then ended;
the Group financial statements have been properly prepared in accordance with
UK adopted international accounting standards;
the Parent Company financial statements have been properly prepared in accordance
with United Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements of Hyve Group plc (the ‘Parent Company’) and
its subsidiaries (the ‘Group’) for the year ended 30 September 2022 which comprise the
consolidated income statement, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity, the consolidated statement of financial position,
the consolidated cash flow statement, the company statement of financial position, the
company statement of changes in equity and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting framework that has been
applied in the preparation of the Group financial statements is applicable law and UK
adopted international accounting standards. The financial reporting framework that has
been applied in the preparation of the Parent Company financial statements is applicable
law and United Kingdom Accounting Standards, including Financial Reporting Standard 102,
‘The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’
(United Kingdom Generally Accepted Accounting Practice).
130
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Annual Report and Accounts 2022
Overview
Coverage
2022
Number of
components
Group revenue
(incl.
discontinued
operations)
Full scope audit work completed by BDO UK
6
71%
Risk-focused audit procedures completed by BDO UK
3
10%
Risk-focused procedures completed by BDO network member firm
in Hong Kong
1
3%
Total
10
84%
2021
Number of
components
Group revenue
(incl.
discontinued
operations)
Full scope audit work completed by BDO UK
6
26%
Full scope audit work completed by BDO member firms in Russia
and Hong Kong
3
44%
Risk-focused audit procedures completed by BDO UK
3
12%
Total
12
82%
Key audit matters
2022
2021
KAM 1 – Valuation of intangible assets including goodwill
Yes
Yes
KAM 2 – Going Concern
Yes
Yes
KAM 3 – Disposal accounting: Russian business
Yes
No
Materiality
Group financial statements as a whole
£1.6m (2021: £1.2m) based on 1% of revenues, including discontinued operations (2021: 1% of
3-year average of revenue).
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment,
including the Group’s system of internal control, and assessing the risks of material misstatement
in the financial statements. We also addressed the risk of management override of internal
controls, including assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
Of the group’s 47 reporting components, significant components were identified within the
UK, US and Russia, each of which was subject to a full scope audit by the Group audit team.
Specified risk-focused audit procedures were carried out on three non-significant components
in the UK, UAE and US by the Group audit team and one component in China by a BDO member
firm. The financial information of the remaining non-significant components was subject to
analytical reviews performed by the Group audit team.
Our involvement with component auditors
For the work performed by the component auditor, we determined the level of involvement
needed in order to be able to conclude whether sufficient appropriate audit evidence has been
obtained as a basis for our opinion on the Group financial statements as a whole.
The work on the overseas component was directed, supervised and reviewed by the Group
audit team. This included, but was not limited to, the issuance of Group audit instructions, holding
periodic meetings, including formal and documented planning and close meetings, remotely
reviewing component work completed and discussions with component audit team and
local management.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period and include the
most significant assessed risks of material misstatement (whether or not due to fraud) that
we identified, including those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Governance
Financial statements
131
Annual Report and Accounts 2022
Hyve Group plc
Independent auditor’s report to the members of Hyve Group plc
continued
Valuation of intangible assets, including goodwill
Notes 2, 12 and 14
Key audit matter
In view of the impact of the post COVID-19 pandemic and more recent
macroeconomic factors such as increasing inflation and interest rates on the
Group’s business there is a risk, whether due to fraud or error, that there is an
application of inappropriate assumptions supporting asset values that should
otherwise be impaired.
Management are required to test annually for impairment, or more frequently
if there are indications that goodwill and intangible assets might be impaired.
Management tests impairment through determination of the value in use of
each cash generating unit identified (CGU). Management has determined that
its goodwill and intangible assets are allocated to 9 cash generating units.
To determine the value in use of each CGU requires judgements and estimates
as outlined in Note 2. Management prepares a detailed impairment model
using a number of judgemental assumptions (as described in note 12 to the
financial statements).
Based on the above considerations, valuation of intangible assets, including
goodwill and the related disclosures has been identified as a key audit matter.
How the scope
of our audit
addressed the
key audit matter
As part of audit procedures completed, we have challenged management’s
value in use determined for each CGU within the model prepared, including the
assumptions underpinning the model.
Our work in relation to the model and its assumptions was as follows:
considering the appropriateness and completeness of the number of CGUs
identified by management and the associated allocation of assets of the
Group to each of these CGUs as per the accounting policy and applicable
accounting standards;
testing of the arithmetic accuracy of the model used by Management;
agreeing the underlying cash flow projections for each CGU to Board
approved budgets and three year plan;
reviewing future forecast cash flow projections and revenues against post year
end performance such as booking statistics and cash received;
challenging management on their assessment of the impact of COVID-19 and
other macroeconomic factors on the future forecast cash flows, as well as
reviewing movements in both revenues anticipated and costs to be incurred
in relation to future events as indicated by management;
reviewing the likelihood and timing of events forecast by management to take
place in the short term, agreeing to available third party and other available
information as applicable;
reviewing the reasonability and accuracy of central costs that are allocated to
the CGUs;
engaging our internal valuation experts to independently assess appropriate
discount rates;
agreeing assumptions used within the estimation of discount rates including,
country specific risk premiums, inflation rates, risk free rates against
independent market data; and
analysing the sensitivity of the model to changes in assumptions as outlined
within note 12 in relation to forecast cash flows.
We have reviewed the disclosures made in light of the requirements of IAS 36
and IAS 1.
Key observations
Based on the procedures performed, we considered that the judgements and estimates used by Management within their determination of the value in use of the
identified CGUs within their detailed impairment model are reasonable.
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Annual Report and Accounts 2022
Going concern
Note 2
Key audit matter
As disclosed in note 2, the operations of the Group have been impacted by
COVID-19 in the previous and current financial year, with restrictions easing
throughout the 2022 financial year, leading to trading becoming fully
operational, with the exception of China. This, combined with the invasion of
Ukraine by Russia and the subsequent exit from the Russian market by the
Group, has caused significant disruption and economic uncertainty globally
and has had an impact on the Group’s future expected cash flows, with
a consequential impact on the going concern assessment. In addition,
as described in note 20, the Group has completed the refinancing of its debt
subsequent to the year end.
Whilst the Directors’ assessment in relation to going concern did not identify any
material uncertainties in this respect we nevertheless considered going concern
to be a significant risk and a key audit matter due to the external contributing
factors outlined above.
How the scope
of our audit
addressed the
key audit matter
Our evaluation of the Directors’ assessment of the Group and the Parent
Company’s ability to continue to adopt the going concern basis of accounting
included:
obtaining from the Directors’ and Management their latest assessments that
support the Board’s conclusions with respect to the going concern basis of
preparation of the financial statements and confirming the mathematical
accuracy of the underlying calculations;
corroborating alignment with the future forecast cash flow projections audited
as described within the Valuation of Intangible Assets, including Goodwill Key
Audit Matter outlined above, completing consistent procedures across the
associated cashflows as referenced;
considering the reasonability of the twelve-month period over which the
Directors have considered and assessed the going concern assumption in light
of all available information about the future, of which we are aware as a result
of the audit;
corroborating the refinancing of the Group’s debt and associated terms and
covenants referenced in note 20 subsequent to the year end to underlying
executed legal agreements;
analysing the Directors’ base case forecast and downside scenarios,
and subsequently challenging the adequacy and appropriateness of the
underlying assumptions, in light of predetermined expectations for the trade
exhibitions and conferences sector and various jurisdictions within which the
Group operates; and
reviewing the Directors’ ‘reverse stress test’ analysis outlining the conditions
which would be required for the Group to breach covenants, as outlined within
the Strategic Report on pages 69 to 71 and note 2, and reviewing the likelihood
of such conditions arising.
Key observations
Our key observations are set out in the conclusions relating to going concern section of our report.
Strategic report
Governance
Financial statements
133
Annual Report and Accounts 2022
Hyve Group plc
Independent auditor’s report to the members of Hyve Group plc
continued
Disposal accounting – Russian business
Note 2 and Note 17
Key audit matter
As disclosed in note 17, in March 2022, the Group announced the disposal of its
Russian business and on 13 May 2022 it completed the disposal of its 100%
shareholding of the Russian business.
The consideration for the sale was wholly structured as earn out consideration
of up to £72.0m payable over a 10-year period. Sanctions imposed by the UK
on Russia in response to the war in Ukraine limit the Group’s ability to receive
consideration in respect of the disposal of the Russian business and as at the
reporting date the severity of the sanctions imposed had only increased.
A change in the global sanctions landscape is expected to be required
before consideration could be received, the timing and extent of which is
very unpredictable but is not anticipated in the short term. The consideration
receivable at the disposal date is therefore deemed to have a fair value of £nil.
In line with the requirements of IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations, the Group’s exit from Russia has been treated as a
discontinued operation, as it represents the disposal of a component of the entity,
a separate major line of business and a separate geographical area of business.
The Russian operations contributed 22% of the Group’s total revenues (Including
discontinued operations) during the current period (2021: 49%), therefore the
disposal is considered to represent a significant transaction for the Group.
Management was required to use judgement in determining the fair value of the
consideration at the disposal date and net assets of the entities disposed.
Based upon the above indicating factors, we identified the disposal accounting
of the Russian business and related disclosures to be a significant risk and a key
audit matter.
How the scope
of our audit
addressed the
key audit matter
As part of audit procedures completed, the Group audit team have audited the
Russian component operations up to the date of disposal, including the disposal
balance sheet.
Our work in relation to management’s disposal accounting and assumptions
made in respect of the Russian business included the following:
assessing whether the disposal met the definition of a disposal group as
per IFRS 5, including challenging management on whether key definitions
within the standard were satisfied;
confirming and corroborating against applicable legal documents
management’s assessment of the disposal date and the point at which
control was lost against the requirements of IFRS 10 Consolidated
Financial Statements;
obtaining and reviewing all available legal documentation setting out the
transaction (including the sales purchase agreement);
corroborating the net assets of the entities disposed of at the date of
disposal to the underlying audited results and disposal balance sheets of
the Russian components;
corroborating the balance of the translation reserves disposed to prior
year audited balance sheet and current year movements and assessing
the reasonability of the spot rate at the disposal date to convert the foreign
operations into the presentation currency;
challenging management and their legal teams in relation to the accuracy
of the fair value of contingent consideration of £nil at the date of disposal,
verifying to third party evidence where applicable; and
re-calculating the arithmetic accuracy of the loss on disposal.
We reviewed the disclosures made in light of the requirements of IFRS 5.
Key observations
Based on the procedures performed, we found the judgements made by management in the disposal accounting of the Russian business to be appropriate and
consistent with the requirements of IFRS 5 and 10.
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Annual Report and Accounts 2022
Component materiality
We set materiality for each significant component of the Group based on a percentage of
between 50% and 60% of Group performance materiality (2021: between 40% and 60%)
dependent on the size and our assessment of the risk of material misstatement of that
component. Component materiality ranged from £0.2m to £0.6m (2021: £0.3m to £0.5m).
In the audit of each component, we further applied performance materiality levels of 65% of
the component materiality to our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit
differences in excess of £32,000 (2021: £24,000). We also agreed to report differences below
this threshold that, in our view, warranted reporting on qualitative grounds.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in
evaluating the effect of misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic decisions of reasonable users
that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed
materiality, we use a lower materiality level, performance materiality, to determine the extent of
testing needed. Importantly, misstatements below these levels will not necessarily be evaluated
as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as
a whole and performance materiality as follows:
Group financial statements
2022
£m
Parent company financial statements
2022
£m
2021
£m
2021
£m
Materiality
£1.6
£1.2
£2.7
£0.5
Basis for determining
materiality
1% of total Group revenues, including
discontinued operations
1% of 3-year average of revenue
1% of net assets
60% of Group performance materiality
Rationale for the
benchmark applied
Given the significant loss before tax,
we based our materiality calculation
on the revenue, including revenues
from discontinued operations.
Given the significant loss before tax
and decreased revenue due to the
effects of COVID-19, we based our
materiality calculation on a 3 year
average of revenue.
The benchmark for materiality has changed on the basis that net assets is
considered to be a more appropriate benchmark as the Parent Company
does not trade.
Performance materiality
£1.0
£0.8
£1.8
£0.3
Basis for determining
performance materiality
65% of Group materiality
65% of Parent Company materiality
In setting the level of performance materiality we considered a number of factors including the expected total value of
known and likely misstatements based on past experience.
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135
Annual Report and Accounts 2022
Hyve Group plc
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual Report and Accounts other than the financial statements
and our auditor’s report thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement relating to the
Parent Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the Corporate Governance Statement is materially consistent with the
financial statements or our knowledge obtained during the audit.
Going concern and longer-term viability
The Directors’ statement with regards to the appropriateness of adopting the going concern
basis of accounting and any material uncertainties identified set out on page 70; and
The Directors’ explanation as to their assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 69.
Other Code provisions
Directors’ statement on fair, balanced and understandable set out on page 84;
Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 50;
The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on page 88; and
The section describing the work of the audit committee set out on pages 85 to 89.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the
audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions
and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements
in the strategic report or the Directors’ report.
Directors’ remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
the Parent Company financial statements and the part of the Directors’ remuneration report
to be audited are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
Independent auditor’s report to the members of Hyve Group plc
continued
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Hyve Group plc
Annual Report and Accounts 2022
In preparing the financial statements, the Directors are responsible for assessing the Group’s
and the Parent Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures
are capable of detecting irregularities, including fraud is detailed below.
We obtained an understanding of the legal and regulatory framework applicable to the Group
and the industry in which it operates through discussions with management, the Group’s legal
counsel and the Audit Committee and our knowledge of the industry. We focused on significant
laws and regulations that could give rise to material misstatement in the financial statements,
including the Companies Act 2006, the UK Listing Rules, the applicable accounting frameworks,
Corporate Tax, VAT, Employment Tax and Health and Safety legislation and the Bribery Act 2010.
Our procedures in response to the above included:
Holding discussions with management and those charged with governance, in-house legal
counsel and reviewing minutes of meetings between the Board of Directors and the Audit
Committee to identify any known or suspected instances of non-compliance with laws and
regulations and fraud;
Agreeing the financial statement disclosures to underlying supporting documentation; and
Reviewing tax compliance and involving our tax specialists to assess the reasonableness of the
income tax charge disclosed and associated statement of financial position amounts and tax
disclosures in light of the reporting and legislative requirements.
We assessed the susceptibility of the Group’s financial statements to material misstatement,
including how fraud may occur. We determined these areas to be management override of
controls including, revenue recognition (existence) and the disclosures made in respect of
adjusting items and alternative performance measures.
Our procedures in response to the above included:
Evaluating and, where appropriate, challenging assumptions and judgements made by
management in determining significant accounting estimates, in particular in relation to
impairment of goodwill and intangible assets, disposal accounting, and the going concern
assumption as set out in the key audit matters section above;
In addressing the risk of management override of controls, testing the appropriateness of
journal entries made throughout the year which met a specific criteria as well as year-end
consolidating journals by agreeing to supporting documentation;
Testing revenue throughout the year to confirm existence through corroboration of a sample
of transactions back to supporting documentation including invoice, contract and attendance
at the events;
Analysing and challenging management on each alternative performance measure disclosed
within the financial statements in light of guidance issued by regulatory bodies to check
applicability along with corroboration of the alternative performance measures evidence
of the underlying transactions disclosed; and
Requesting each component audit team to communicate any instances of non-compliance
with laws and regulations or fraud that could give rise to a material misstatement of the Group
financial statements.
Specific consideration was made as to whether the engagement team collectively had the
appropriate competence and capabilities to identify or recognise non-compliance with laws
and regulations and fraud. All team members were briefed to ensure they were aware of any
relevant laws or regulations in relation to their work and fraud risks.
Our audit procedures were designed to respond to risks of material misstatement in the financial
statements, recognising that the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the further removed non-compliance
with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
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Annual Report and Accounts 2022
Hyve Group plc
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that
we might state to the Parent Company’s members those matters we are required to state to
them in an auditor’s 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 Parent Company and the
Parent Company’s members as a body, for our audit work, for this report, or for the opinions
we have formed.
Sandra Thompson (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
13 December 2022
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Independent auditor’s report to the members of Hyve Group plc
continued
138
Hyve Group plc
Annual Report and Accounts 2022
Consolidated income statement
For the year ended 30 September 2022
Notes
Year ended 30 September 2022
Year ended 30 September 2021 (restated
1
)
Headline
£000
Adjusting items
(note 5)
£000
Statutory
£000
Headline
£000
Adjusting items
(note 5)
£000
Statutory
£000
Revenue
3
122,472
–
21,822
–
Cost of sales
(83,204)
–
(83,204 )
(29,939)
–
(29,939 )
Impairment (loss)/profit in respect of trade receivables
23
(1,174)
–
(1,174 )
592
–
Gross profit/(loss)
38,094
–
(7,525)
–
(7,525 )
Other operating income
4
19,557
–
66,101
–
Administrative expenses
(40,005)
(30,990)
(70,995 )
(38,155)
(47,291)
(85,446 )
Foreign exchange gain/(loss) on operating activities
2,707
–
(306)
–
(306 )
Share of results of joint ventures
18
(957)
225
(732 )
1,880
(455)
Operating profit/(loss)
19,396
(30,765)
(11,369 )
21,995
(47,746)
(25,751 )
Investment revenue
6
269
1,652
163
10,401
Finance costs
7
(8,192)
(13,327)
(21,519 )
(8,241)
(4,037)
(12,278 )
Profit/(loss) before tax
11,473
(42,440)
(30,967 )
13,917
(41,382)
(27,465 )
Tax credit/(charge)
9
95
5,520
(1,839)
6,475
Profit/(loss) from continuing operations
11,568
(36,920)
(25,352 )
12,078
(34,907)
(22,829 )
Profit/(loss) from discontinued operations
17
12,894
(46,306)
(33,412 )
6,413
(3,604)
Profit/(loss)
24,462
(83,226)
(58,764 )
18,491
(38,511)
(20,020 )
Attributable to:
Owners of the Company
25,113
(83,226)
(58,113 )
19,323
(38,511)
(19,188 )
Non-controlling interests
(651)
–
(651 )
(832)
–
(832 )
24,462
(83,226)
(58,764 )
18,491
(38,511)
(20,020 )
Earnings per share (pence)
Basic
11
8.7
–
(20.2 )
7.3
–
(7.3 )
Diluted
11
8.7
–
(20.2 )
7.3
–
(7.3 )
Earnings per share from continuing operations (pence)
Basic
11
4.2
–
(8.6 )
4.9
–
(8.3 )
Diluted
11
4.2
–
(8.6 )
4.9
–
(8.3 )
1
Results for the year ended 30 September 2021 have been restated for the treatment of the Russian, Ukrainian and Turkish businesses as discontinued operations as disclosed in note 17. All subsequent references to restatements throughout these results refer
to the restatements for the prior period error disclosed in note 1 and the treatment of discontinued operations disclosed in note 17.
The results stated above relate to continuing activities of the Group. The accompanying notes 1 to 31 form an integral part of the Consolidated financial statements.
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Annual Report and Accounts 2022
Hyve Group plc
Notes
2022
£000
2021
(restated)
£000
Loss for the year attributable to shareholders
(58,764 )
(20,020 )
Cash flow hedges:
Movement in fair value of cash flow hedges
Fair value of cash flow hedges released to the income statement
Currency translation movement on net investment in subsidiary undertakings
(3,227 )
Total other comprehensive income/(loss)
(2,354 )
(28,481 )
(22,374 )
Tax relating to components of comprehensive loss
9
(15 )
(130 )
Total comprehensive loss for the year
(28,496 )
(22,504 )
Attributable to:
Owners of the Company
(28,211 )
(21,672 )
Non-controlling interests
(285 )
(832 )
(28,496 )
(22,504 )
All items recognised in comprehensive income may be reclassified subsequently to the income statement.
The accompanying notes 1 to 31 form an integral part of the Consolidated financial statements.
Consolidated statement of comprehensive income
For the year ended 30 September 2022
140
Hyve Group plc
Annual Report and Accounts 2022
Consolidated statement of changes in equity
For the year ended 30 September 2022
Share
capital
£000
Share
premium
account
£000
Merger
reserve
£000
Capital
redemption
reserve
£000
ESOT
reserve
£000
Retained
earnings
(restated)
£000
Translation
reserve
(restated)
£000
Hedge
reserve
£000
Total
(restated)
£000
Non-
controlling
interests
(restated)
(note 26)
£000
Total equity
£000
Balance as at 1 October 2021 (restated)
(3,083 )
(53,935 )
(85 )
Net (loss)/profit for the year
(58,113 )
(58,113 )
(651 )
(58,764 )
Currency translation movement on net investment in subsidiary undertakings
Movement in fair value of cash flow hedges
Tax relating to components of comprehensive income (note 9)
(15 )
(15 )
(15 )
Total comprehensive (loss)/income for the year
(58,128 )
(28,211 )
(285 )
(28,496 )
Dividends paid to minority interests
(339 )
(339 )
Issue of shares
Exercise of share options
(65 )
Share-based payments (note 28)
Tax credited to equity (note 9)
(101 )
(101 )
(101 )
Disposal of subsidiary (note 17)
Balance as at 30 September 2022
(3,018 )
(35,174 )
The accompanying notes 1 to 31 form an integral part of the Consolidated financial statements.
Share
capital
£000
Share
premium
account
£000
Merger
reserve
£000
Capital
redemption
reserve
£000
ESOT
reserve
£000
Retained
earnings
(restated)
£000
Equity option
reserve
£000
Translation
reserve
(restated)
£000
Hedge
reserve
£000
Total
(restated)
£000
Non-
controlling
interests
(restated)
£000
Total equity
£000
Balance as at 1 October 2020 (restated)
(3,175 )
(13,255 )
(52,636 )
(958 )
Net loss for the year
(19,188 )
(19,188 )
(832 )
(20,020 )
Currency translation movement on net investment in
subsidiary undertakings
(3,227 )
(3,227 )
(3,227 )
Movement in fair value of cash flow hedges
Fair value of cash flow hedges released to the income statement
Tax relating to components of comprehensive income
(130 )
(130 )
(130 )
Total comprehensive (loss)/income for the year
(19,318 )
(3,227 )
(21,672 )
(832 )
(22,504 )
Dividends paid to minority interests
(671 )
(671 )
Exercise of share options
(92 )
Share-based payments (note 28)
Tax credited to equity (note 9)
Disposal of subsidiary
(870 )
Expiry of equity option (note 23)
(13,255 )
Balance as at 30 September 2021 (restated)
(3,083 )
(53,935 )
(85 )
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Annual Report and Accounts 2022
Hyve Group plc
Notes
2022
£000
2021
(restated)
£000
Non-current assets
Goodwill
12
Other intangible assets
14
Property, plant and equipment
15
Interests in joint ventures
18
Deferred and contingent consideration receivable
19
Deferred tax asset
24
Current assets
Trade and other receivables
19
Tax prepayment
19
Derivative financial instruments
19
Cash and cash equivalents
19
Assets classified as held for sale
17
Total assets
Current liabilities
Bank loans
20
(6,000 )
(11,751 )
Trade and other payables
21
(63,186 )
(42,665 )
Deferred income
21
(57,769 )
(72,277 )
Corporation tax
(884 )
(1,259 )
Provisions
22
(100 )
Liabilities classified as held for sale
17
(2,854 )
(130,793 )
(127,952 )
Non-current liabilities
Bank loans
20
(93,101 )
(109,849 )
Deferred income
21
(204 )
Provisions
22
(1,582 )
(1,400 )
Deferred and contingent consideration payable
21
(39,391 )
Lease liabilities
27
(11,829 )
(13,375 )
Deferred tax liabilities
24
(13,552 )
(11,633 )
Derivative financial instruments
23
(85 )
(159,659 )
(136,342 )
Total liabilities
(290,452 )
(264,294 )
Net assets
Consolidated statement of financial position
30 September 2022
142
Hyve Group plc
Annual Report and Accounts 2022
Notes
2022
£000
2021
(restated)
£000
Equity
Share capital
25
Share premium account
Merger reserve
Capital redemption reserve
Employee Share Ownership Trust (‘ESOT’) reserve
(3,018 )
(3,083 )
Retained earnings
(35,174 )
Translation reserve
(53,935 )
Hedge reserve
(85 )
Equity attributable to equity holders of the parent
Non-controlling interests
26
Total equity
The accompanying notes 1 to 31 form an integral part of the Consolidated financial statements.
The financial statements of Hyve Group plc, registered company number 01927339, were approved by the Board of Directors and authorised for issue on 13 December 2022. They were signed on
their behalf by:
Mark Shashoua
John Gulliver
Chief Executive Officer
Chief Finance and Operations Officer
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Annual Report and Accounts 2022
Hyve Group plc
Consolidated cash flow statement
For the year ended 30 September 2022
Notes
2022
£000
2021
(restated)
£000
Operating activities
Operating loss from continuing operations
(11,369 )
(25,751 )
Operating (loss)/profit from discontinued operations
17
(30,490 )
Operating loss
(41,859 )
(23,229 )
Adjustments
Depreciation and amortisation
Impairment of goodwill, intangible assets and investments in joint ventures
12, 19
Share-based payments
28
Increase/(decrease) in provisions
(442 )
(Profit)/loss on disposal of plant, property and equipment and computer software
Loss on disposal of subsidiary holdings
17
Fair value of cash flow hedges recognised in the income statement
Share of profit/(loss) from joint ventures
(1,545 )
Operating cash flows before movements in working capital
Increase in receivables
(26,960 )
(7,298 )
Utilisation of venue prepayments
Increase in deferred income
Increase/(decrease) in payables
(9,367 )
Operating cash flows after movements in working capital
Dividends received from associates and joint ventures
Cash generated from operations
Tax paid
(2,654 )
(3,266 )
Net cash from operating activities
Investing activities
Interest received
6
Acquisition of businesses – cash paid net of cash acquired
13
(23,389 )
(18,307 )
Purchase of plant, property and equipment and computer software
(960 )
(975 )
Disposal of plant, property and equipment and computer software
Settlement of deferred and contingent consideration receivable
19
Settlement of deferred and contingent consideration payable
21
(7,692 )
(4,693 )
Disposal of subsidiaries and investments – cash received net of cash disposed and costs to sell
17,19
(10,237 )
(3,784 )
Net cash utilised on investing activities
(39,501 )
(27,219 )
144
Hyve Group plc
Annual Report and Accounts 2022
Notes
2022
£000
2021
(restated)
£000
Financing activities
Equity dividends paid
10
Dividends paid to non-controlling interests
(671 )
Interest paid and bank charges
7
(6,676 )
(6,556 )
Principal lease payments
27
(3,448 )
(4,015 )
Proceeds from the issue of share capital and exercise of share options
Fees relating to the issues of share capital
(971 )
Drawdown of borrowings
Repayment of borrowings
(25,423 )
(67,249 )
Net outflow from financing activities
(5,470 )
(8,887 )
Net decrease in cash and cash equivalents
30
(15,727 )
(8,956 )
Cash and cash equivalents at beginning of year
Effect of foreign exchange rates
Cash and cash equivalents classified as held for sale
17
(1,513 )
Cash and cash equivalents at end of year
30
The accompanying notes 1 to 31 form an integral part of the Consolidated financial statements.
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Hyve Group plc
1 General information
the Companies Act and is registered in England and Wales . The address of the registered office is
given on page 214. The nature of the Group’s operations and its principal activities are set out in the
Strategic report on pages 1 to 71 and in note 3.
These financial statements are presented in British pounds sterling. All amounts, unless
otherwise stated, have been rounded to the nearest thousand. Foreign operations are included
in accordance with the accounting policies set out below.
Amendments to IFRSs that are mandatorily effective
Impact of accounting standards to be applied in future periods
There are a number of standards and interpretations which have been issued by the International
Accounting Standards Board that are effective for periods beginning subsequent to 30 September
2022 that the Group has decided not to adopt early. The Group does not believe these standards
and interpretations will have a material impact on the financial statements once adopted.
IFRS 9 Financial Instruments
The standard is being amended for periods beginning from 1 January 2021 in response to the
phasing out of certain benchmark interest rates. The amendments cover how to account for
changes in contractual cash flows or hedging relationships for financial instruments affected by
the replacement of benchmark interest rates. During the period, the Group has not designated
any risk components of alternative benchmark rates in any hedge relationships. The Group does
not hold any other financial instruments exposed to alternative benchmark rates, except its term
loan and revolving credit facilities and corresponding interest rate swaps, which previously
referenced GBP LIBOR rates and transitioned to GBP SONIA rates during the year at the point
of the cessation of the impacted LIBOR rate. The Group does not expect that any transition
adjustments will be required.
IAS 1 Presentation of Financial Statements
The standard is being amended for periods beginning from 1 January 2024 to clarify that
the classification of liabilities as current or non-current should be based on rights that are in
existence at the end of the reporting period. The classification between current and non-current
is unaffected by expectations about whether an entity will exercise its right to defer settlement
of a liability. The amendment only affects the presentation of liabilities in the statement of
financial position. The Group does not expect that any transition adjustments will be required.
IAS 37 Onerous Contracts – Cost of Fulfilling a Contract
The standard is being amended for periods beginning from 1 January 2022 to clarify what costs
an entity considers in assessing whether a contract is onerous. Cost of fulfilling a contract
comprises the costs that relate directly to the contract. The Group does not expect that any
transition adjustments will be required.
Prior period restatements
Prior period error
In Hyve Group plc’s Annual Report and Accounts for the year ended 30 September 2021 and
preceding years, the impairment, amortisation and deferred tax charges recognised in respect of
goodwill and acquired intangible assets relating to non-wholly owned businesses were attributed
wholly to the owners of the company, rather than being apportioned between the owners of the
company and the non-controlling interests. In total, impairment and amortisation charges of
£19.1m were incorrectly attributed to the owners of the company rather than the non-controlling
interests. Similarly, amounts totalling £1.7m, previously recognised in the Group’s translation reserve
in respect of the translation of the same goodwill and intangible assets, have been incorrectly
attributed to the owners of the company rather than the non-controlling interests. The Group’s
retained earnings, translation reserve and non-controlling interests in the statement of financial
position and consolidated statement of changes in equity have been restated to correct for
these errors.
The following table summarises the impact of the restatements on the financial statements of the
Group. The net impact on the Group’s net assets is £nil.
Consolidated statement of financial position
1 October 2020 and 30 September 2021
£000
Retained earnings
(19,105)
Translation reserve
1,735
Non-controlling interest
17,370
Change to total equity
–
A 30 September 2020 statement of financial position has not been presented as the changes are
not considered material; the impact would have been an increase in retained earnings of £19.1m
and an increase in the translation reserve of £1.7m and a decrease in non-controlling interests
of £17.4m.
Discontinued operations
The Group’s results for the year ended 30 September 2021 have also been restated for the
treatment of the Russian, Ukrainian and Turkish businesses as discontinued operations. See note 17
for further details. All subsequent references to restatements throughout these results refer to the
changes as disclosed in this note and note 17.
Notes to the consolidated accounts
For the year ended 30 September 2022
146
Hyve Group plc
Annual Report and Accounts 2022
2 Basis of accounting
Hyve Group plc (the ‘Company’) is a UK listed company and, together with its subsidiary
operations, is herein after referred to as the ‘Group’. These financial statements have been
prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 (‘IFRS’) and in accordance with UK-adopted
international accounting standards.
The preparation of financial statements under IFRS requires the Directors to make judgements,
estimates and assumptions that affect the application of policies and the reported amounts of
assets and liabilities, and income and expenses. These estimates and associated assumptions
are based on past experience and other factors considered applicable at the time and are
used to make judgements about the carrying value of assets and liabilities that cannot be
readily determined from other sources. Actual results may differ from these estimates.
These estimates and underlying assumptions are reviewed on an ongoing basis. Changes to
estimates and assumptions are reflected in the financial statements in the period in which they
are made.
The statements are presented in British pounds sterling and have been prepared under IFRS
using the historical cost basis, except for the revaluation of certain financial instruments which
are recognised at fair value at the end of each reporting period. Historical cost is generally
based on the fair value of the consideration given in exchange for assets. The principal
accounting policies adopted are consistent with the prior year.
Going concern
The financial statements have been prepared on a going concern basis, which assumes that the
Group will continue in operational existence for the foreseeable future.
As part of their assessment of the appropriateness of adopting the going concern basis when
preparing the annual report and financial statements, the Directors have considered the current
strength of the Group’s liquidity, recent trading performance indicators and the potential impact
of forecast scenarios on the Group’s financial position over the next 12 months.
In October 2022, the Group completed the refinancing of its debt facilities. The new facilities,
totalling £135m, comprise a £115m term loan and £20m revolving credit facility. The £101.0m
that was drawn at 30 September 2022 on the previous facility was repaid in full on 20 October
2022, with the new term loan of £115m being fully drawn on the same date. The term loan
will be repaid in full upon the expiry of the facility in October 2026. Under the new facilities,
a minimum liquidity covenant of £21m is in place up to and including August 2023. Thereafter
a quarterly leverage ratio applies, set at 4.4x in September 2023, 4.2x in December 2023 and
at 3x thereafter.
With the exception of China, the Group ran a full schedule of events in FY22. The pace of in-
person event recovery has quickened throughout the financial year, alongside a number of
other positive trends, including increased like-for-like customer spend, improved NPS scores,
the return of international attendance and strong forward bookings for next year’s events.
The Group’s recovery has been supported by the acquisitions of 121 Group in November 2021
and Fintech Meetup in March 2022, which have accelerated the Group’s omnichannel strategy.
The Group has modelled a number of scenarios, based on different assumptions, regarding the
next 12 months. For the purposes of considering the Group’s going concern assessment, we have
focused on two scenarios:
A Base Case; and
A Downside Case.
The Base Case, which represents the Directors’ current best estimate, assumes a full schedule
of events will take place in FY23. This considers the latest information available in respect of
COVID-19 restrictions in China and reflects that we currently expect to be able to run our events
in the region but with some Q1 events postponed until later in FY23, including the ChinaCoat
event, operated by our 50% joint venture Sinostar, which will result in no dividend from the joint
venture being received in FY23 as the event, moves into Sinostar’s year ending December 2023.
Under the Base Case scenario, available liquidity is expected to remain in excess of £43m
throughout the 12-month period from the date of the annual report.
The Downside Case has been modelled for the purposes of ensuring the minimum liquidity
covenant and leverage covenant are not breached during the period of assessment, even if
the Group’s trading is impacted by a deterioration of the wider macroeconomic environment,
including the impact of a possible recession, or if its event schedule in China is disrupted by the
continuation of COVID-19 restrictions, or a combination of these events.
The Downside Case considers the impact a global recession could have on the Group’s financial
performance and takes account of the relative strength of the industries and geographies that
the Group’s events operate in and how exposed they could be to an economic downturn. For
example, the latest economic forecasts suggest that the UK could face a worse recessionary
environment than many other countries and we have therefore applied larger reductions to the
UK retail and fashion event projections. In conjunction with this trading decline, we have also
considered the impact that a reasonably possible increase in interest rates would have under
the Group’s new debt facilities. A margin of 7.75% is payable on the £115m term loan plus a
variable rate of interest based on SONIA, which in the Downside Case we assume increases to
5%. Finally, the Downside Case assumes that, due to an extension of COVID-19 restrictions in
China, the Group’s events in the region will not be able to take place for their next scheduled
edition, and therefore that no events will take place in China until FY24. In response to this
scenario playing out, modest cost savings have been assumed, including reduced discretionary
bonus payments and variable event savings as a result of the reduced revenues and event
cancellations. Liquidity is expected to remain in excess of £34m throughout the 12-month period
from the date of the annual report.
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Hyve Group plc
2 Basis of accounting
continued
Throughout the 12-month period of assessment, both scenarios have material headroom over
and above both the £21m minimum liquidity covenant in place through to the end of August 2023
and the leverage ratio covenant after its introduction in September 2023.
The Directors have also modelled a reverse stress test, which assesses the liquidity and covenant
position if an even more extreme deterioration in event performance were to occur. This has
been reflected through a 20% reduction to all event revenues throughout the forecast period,
except where forward bookings are already in excess of this level. This is in addition to the
cancellation of the Group’s Chinese events in FY23 and an increase in the variable interest rate
paid on the Group’s debt.
As in the Downside Case, variable event savings have been modelled in response to the reduced
revenues. Given the significance of the reductions, additional cost actions, over and above those
assumed in the Downside Case, have also been assumed, reflecting a reduction in discretionary
spend that could be implemented if required.
Under this scenario, the Group would still have available liquidity of at least £30m within the
period of assessment and therefore would have material headroom above the minimum
liquidity covenant, but would breach the leverage covenant when it is introduced in September
2023 and would therefore require a covenant waiver. The Directors feel that the assumptions
applied in this reverse stress test are remote, given the performance of the Group’s recent events
and the current level of forward bookings for FY23.
Further, the Group could still implement a number of additional mitigating actions if required.
The Group implemented a material cost savings programme in response to the COVID-19
outbreak and has demonstrated an ability to quickly action cost reductions if necessary.
Further cost savings over and above those assumed in the reverse stress test scenario could
be actioned to help ease liquidity if required, including:
A delay in planned investments, including the rollout of meetings programmes;
A further reduction in discretionary staff bonus payments;
A hiring freeze on staff vacancies; and
A reduction in discretionary spend in other areas, including travel, technology and people-
related investments such as reward and training.
These mitigating actions would enable the Group to meet the leverage covenant in September
2023, even if the reverse stress test scenario were to play out. The Group also has a number
of additional actions that could be taken, including staff redundancies, disposal of events or
portfolios of events or an equity raise, all of which have been successfully actioned in recent
years since the start of the COVID-19 pandemic.
Based on the current and projected levels of liquidity, under a range of modelled scenarios,
the Directors believe that the Group is well placed to manage its financial obligations and other
business risks satisfactorily. The Directors have been able to form a reasonable expectation
that the Group has adequate resources to continue in operation for at least 12 months from the
signing date of these financial statements. The Directors therefore consider it appropriate to
adopt the going concern basis of accounting in preparing the annual report financial statements.
Basis of consolidation
The Group accounts consolidate the accounts of Hyve Group plc and the subsidiary undertakings
controlled by the Company drawn up to 30 September each year. Control is achieved where
the Company has power over the investee, is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control listed above.
On acquisition, the assets and liabilities of a subsidiary are measured at their fair values at the
date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable
net assets is recognised as goodwill. The interest of non-controlling shareholders is stated at
the non-controlling interest’s proportion of the fair values of assets and liabilities recognised.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and
ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries
acquired or disposed of during the year are included in profit or loss from the date the Company
gains control until the date when the Company ceases to control the subsidiary. Profit or loss and
each component of other comprehensive income are attributed to the owners of the Company
and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed
to the owners of the Company and to the non-controlling interests, even if this results in the
non-controlling interests having a deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used in line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interest in the net assets of consolidated subsidiaries is identified separately from
the Group’s equity therein. Non-controlling interests consist of the amount of those interests as at
the date of the original business combination and the non-controlling interest’s share of changes
in equity since the date of the combination. Losses applicable to the non-controlling interests in
excess of their interest in the subsidiaries, equity are allocated against non-controlling interests,
even if this results in a deficit balance.
Notes to the consolidated accounts
continued
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Changes in the Group’s interests in subsidiaries that do not result in a loss of control are
accounted for as equity transactions. The carrying amount of the Group’s interests and the
non-controlling interests are adjusted to reflect the changes in their relative interests in the
subsidiaries. Any difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is recognised directly in equity
and attributed to the owners of the Company.
Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the
acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets
given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange
for control of the acquiree. Any costs attributable to the business combination are expensed
directly to the Consolidated income statement. The acquiree’s identifiable assets, liabilities and
contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at
their fair value at the acquisition date, except for non-current assets (or disposal groups) that
are classified as held for resale in accordance with IFRS 5 Non-current assets held for sale and
discontinued operations.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the
excess of the cost of the business combination over the Group’s interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities recognised. If the Group’s interest in the net
fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost
of the business combination, the excess is recognised immediately in the income statement.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value
at the acquisition date. Subsequent changes to the fair value of the contingent consideration,
which is classified as a financial liability that is within the scope of IFRS 9, will be recognised in
the income statement as investment income or finance cost.
The interest of minority shareholders in the acquiree is initially measured as the
non-controlling interest’s proportion of the net fair value of the assets, liabilities and
contingent liabilities recognised.
A step acquisition occurs when the Group obtains control over an entity by acquiring an
additional interest in that entity. If that entity is a business, the Group’s previously held equity
interest is remeasured to fair value at the date the controlling interest is acquired. Any difference
in the previously held equity interest is recognised as a gain or loss in the income statement.
Any amounts previously recorded in other comprehensive income relating to the investee are
reclassified and included in the calculation of the gain or loss as of the acquisition date. In a step
acquisition in which control is obtained, but the Group does not purchase all of the remaining
ownership interests, a non-controlling interest is recorded in equity at the acquisition date at
fair value.
Non-current assets held for sale
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of
carrying amount and fair value less costs to sell.
Non-current assets and disposal groups are classified as held for sale if their carrying amount
will be recovered through a sale transaction rather than through continuing use. This condition
is regarded as met only when the sale is highly probable and the asset (or disposal group) is
available for immediate sale in its present condition. Management must be committed to the
sale, which should be expected to qualify for recognition as a completed sale within one year
from the date of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the
assets and liabilities of that subsidiary are classified as held for sale when the criteria described
above are met, regardless of whether the Group will retain a non-controlling interest in its former
subsidiary after the sale.
When the Group is committed to a sale plan involving disposal of an investment in a joint venture,
or a portion of an investment in a joint venture, the investment, or the portion of the investment
in the joint venture that will be disposed of, is classified as held for sale when the criteria
described above are met, and the Group discontinues the use of the equity method in relation
to the portion that is classified a held for sale. Any retained portion of an investment in a joint
venture that has not been classified as held for sale continues to be accounted for using the
equity method. The Group discontinues the use of the equity method at the time of disposal
when the disposal results in the Group losing significant influence over the joint venture.
After the disposal takes place, the Group accounts for any retained interest in the joint venture
in accordance with IFRS 9 unless the retained interest continues to be a joint venture, in which
case the Group uses the equity method (see the accounting policy regarding investments in
joint ventures below).
Discontinued operations
The Group classifies an operation as discontinued when it has disposed of or intends to dispose
of a business component that represents a separate major line of business or geographical
area of operations. The post-tax profit or loss of the discontinued operations is shown as a
single line on the face of the Consolidated income statement, separate from the continuing
operating results of the Group. When an operation is classified as a discontinued operation,
the comparative Consolidated income statement is represented as if the operation had been
discontinued from the start of the comparative year.
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2 Basis of accounting
continued
Hyperinflation accounting
Effective from 1 October 2021, the Group has applied IAS 29 Financial Reporting in
Hyperinflationary Economies for its subsidiaries in Turkey, whose functional currencies
have experienced a cumulative inflation rate of more than 100% over the past three years.
Assets, liabilities, the financial position and results of foreign operations in hyperinflationary
economies are translated to pounds sterling at the exchange rates prevailing on the reporting
date. The exchange differences are recognised directly in other comprehensive income, and
accumulated in the foreign currency translation reserve in equity. Such translation differences
are reclassified to profit or loss only on disposal of the overseas operation.
Prior to translating the financial statements of the Turkish subsidiaries, the non-monetary assets
and liabilities stated at historical cost are restated to account for changes in the general
purchasing power of the local currencies based on the consumer price index (TÜFE, 2003=100)
published by the Turkish Statistical Institute (TURKSTAT). The consumer price index for the
year ended 30 September 2022 increased by 84% from 640 at 30 September 2021 to 1,190 at
30 September 2022. On the date of first-time adoption, being 1 October 2021, the adjustment
for the carrying amounts of non-monetary assets and liabilities was considered immaterial
and therefore not recognised in retained earnings in equity or presented in the consolidated
statement of changes in equity. The subsequent gains or losses from restatement of non-
monetary assets and liabilities are recorded in the Consolidated income statement.
For the year ended 30 September 2022, the adjustments from hyperinflationary accounting
have resulted in an increase in total liabilities of £0.2m and an increase in loss from discontinued
operations of £0.2m. Comparative amounts presented in pounds sterling were not restated for
subsequent changes in the price level or exchange rates.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s
interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of
acquisition. Goodwill is recognised as an asset and reviewed for impairment at least annually.
Any impairment is recognised immediately in the Consolidated income statement and is not
subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-
generating units (‘CGUs’) expected to benefit from the synergies of the combination. CGUs to
which goodwill has been allocated are tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the recoverable amount of the CGU is less
than the carrying value of the unit, the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to other assets of the unit, pro rata based
on the carrying amount of each asset in the unit.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination
of the profit or loss on disposal.
Goodwill on acquisition of a foreign entity is treated as an asset of the foreign entity and
translated at the closing rate.
Intangible assets
Computer software is initially measured at purchase cost. Customer relationships, trademarks
and licences, perpetual technology licences and visitor databases are initially measured at
fair value. Computer software, customer relationships, trademarks and licences, and visitor
databases have a definite useful life and are carried at cost or fair value less accumulated
amortisation. Amortisation is calculated using the straight-line method to allocate the cost over
their estimated useful life. The estimated useful lives are typically between three and 12 years
for customer relationships, for trademarks up to 20 years and for visitor databases between
five and eight years. Computer software is amortised over five years. The amortisation charge
is included in administrative expenses in the Consolidated income statement.
Impairment of assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets are impaired.
If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment (if any). Where the asset does not generate cash flows
that are independent from other assets, the Group estimates the recoverable amount of the
CGU to which the asset belongs. An intangible asset with an indefinite useful life is tested for
impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a
discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount,
the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment
is recognised immediately as an expense. The impairment charge is included in administrative
expenses in the Consolidated income statement.
Where an impairment loss subsequently reverses, the carrying amount of the asset (CGU) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset (CGU) in prior years. A reversal of an impairment
loss is recognised in the Consolidated income statement immediately, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss is treated as a
revaluation increase.
Notes to the consolidated accounts
continued
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continued
Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation and any
recognised impairment loss.
Depreciation is charged to write off the cost of assets over their estimated useful lives, using the
straight-line method, on the following bases:
Leasehold land and buildings
– term of lease
Plant and equipment
– 2 to 10 years
Assets held under finance leases are depreciated over their expected useful lives on the same
basis as owned assets or, where shorter, over the term of the relevant lease.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference
between the sales proceeds and the carrying value amount of the asset and is recognised in the
Consolidated income statement.
Investments in joint ventures
A joint venture is an entity over which the Group is in a position to exercise joint control. Joint
control exists when decisions about the activities of the entity require the unanimous consent of
the parties sharing control.
The results and assets and liabilities of joint ventures are incorporated in these financial
statements using the equity method of accounting. Investments in joint ventures are carried in the
Statement of financial position at cost as adjusted by post-acquisition changes in the Group’s
share of net assets of the joint venture, less any impairment in the value of individual investments.
Losses of a joint venture in excess of the Group’s interest in that entity (which includes any
long-term interests that, in substance, form part of the Group’s net investment in the joint venture)
are recognised only to the extent that the Group has incurred legal or constructive obligations or
made payments on behalf of the joint venture.
Where a Group company transacts with a joint venture of the Group, profits and losses are
eliminated to the extent of the Group’s interest in the relevant joint venture. Losses may provide
evidence of an impairment of the asset transferred, in which case an appropriate provision is
made for impairment.
Other investments
Other investments are entities over which the Group does not have significant influence.
Other investments are classified as assets held at fair value through profit or loss, with changes
in fair value reported in the income statement.
Provisions
Provisions are recognised when the Group has a present obligation as a result of past events,
it is probable that an outflow of resources will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Provisions are discounted to present
value where the effect is material.
Financial instruments
Classes of financial instruments
The Group aggregates its financial instruments into classes based on their nature and
characteristics. The details of financial instruments by class are disclosed in note 23 to the
consolidated accounts.
Financial assets
All recognised financial assets that are within the scope of IFRS 9 are required to be
measured subsequently at amortised cost or fair value on the basis of the entity’s business
model for managing the financial assets and the contractual cash flow characteristics of the
financial assets.
The Group classifies its financial assets into the following categories: cash and cash equivalents
and trade and other receivables.
Financial assets are recognised on the Group’s statement of financial position when the Group
becomes a party to the contractual provisions of the instrument.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and on demand deposits, and other short-
term highly liquid investments that are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables and other receivables are measured on initial recognition at fair value,
and are subsequently measured at amortised cost, less any impairment. Trade receivables
are recognised at the earlier of settlement of the performance obligation and the Group
having an enforceable right of payment related to performance obligation.
The gain or loss on revaluation of deferred and contingent consideration receivable is
recognised in the Consolidated income statement as investment revenue or a finance loss.
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2 Basis of accounting
continued
Impairment of financial assets
The Group always recognises lifetime expected credit losses (‘ECL’) for trade receivables.
The ECL on these financial assets are estimated using a provision matrix based on the Group’s
historical credit loss experience, adjusted for factors that are specific to the debtors, general
economic conditions and an assessment of both the current as well as the forecast direction
of conditions at the reporting date, including time value of money where appropriate.
For all other financial assets, the Group recognises lifetime ECL when there has been a
significant increase in credit risk since initial recognition. However, if the credit risk on the
financial instrument has not increased significantly since initial recognition, the Group
measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represent the expected credit losses that will result from all possible default events
over the expected life of a financial instrument. In contrast, 12-month ECL represent the portion
of lifetime ECL that is expected to result from default events on a financial instrument that are
possible within 12 months after the reporting date.
Financial liabilities
The Group classifies its financial liabilities into the following categories: written equity options,
bank borrowings, and trade and other payables.
Financial liabilities are recognised on the Group’s Consolidated statement of financial position
when the Group becomes a party to the contractual provisions of the instrument.
Written equity options
Any contract with a single or multiple settlement option that contains an obligation for the Group
to purchase equity in a subsidiary for cash gives rise to a financial liability for the present value of
the repurchase price. An amount equal to the liability is recorded in equity on initial recognition
of a written equity option. The liability is subsequently remeasured through the Consolidated
income statement.
Where considered significant, the Group’s written equity options are discounted to their present
value. The unwinding of the discount is charged through the Consolidated income statement
over the period to exercise.
Bank borrowings
Interest-bearing loans and overdrafts are recorded at the proceeds received, net of direct issue
costs and stated at amortised cost using the effective interest rate method. The amortised cost
calculation is revised when necessary to reflect changes in the expected cash flows and the
expected life of the borrowings, including the effects of the exercise of any prepayment, call or
similar options. Any resulting adjustment to the carrying amount of the borrowings is recognised
as interest expense in the income statement. Loan and overdraft interest and associated
costs that are considered to be financing in nature are presented as financing activities in the
Consolidated cash flow statement.
Trade and other payables
Trade payables are measured at initial recognition at fair value and are subsequently measured
at amortised cost. Trade payables are derecognised in full when the Group is discharged from
its obligation, it expires, is cancelled or is replaced by a new liability with substantially modified
terms. Trade and other payables are short term and there is no interest charged in connection
with these, hence the effective interest method is not applied.
The gain or loss on revaluation of deferred and contingent consideration payable is recognised
in the Consolidated income statement as investment revenue or a finance cost.
Derivative financial instruments and hedge accounting
The Group’s activities expose it to the financial risks of changes in foreign currency exchange
rates and changes in interest rates. The Group uses derivative financial instruments such as
interest rate swaps to hedge these exposures.
Derivatives are initially recognised at fair value at the date a derivative contract is entered
into and are subsequently remeasured to their fair value at the end of each reporting period.
The resulting gain or loss is recognised in the Consolidated income statement unless hedge
accounting has been applied by designating the derivative as a hedging instrument in an eligible
hedging relationship. The Group designates its derivative financial instruments as hedging
instruments in cash flow hedge relationships. A derivative is presented as a non-current asset
or a non-current liability if the remaining maturity of the instrument is more than 12 months and
it is not expected to be realised or settled within 12 months. Other derivatives are presented as
current assets or current liabilities.
At the inception of the hedge relationship, the Group documents the relationship between the
hedging instrument and the hedged item, along with the risk management objectives and
strategy for undertaking various hedging transactions. At inception of the hedging relationship,
and on an ongoing basis, the Group performs an assessment of hedge effectiveness to confirm
the subsistence of an economic relationship, credit risk does not dominate value changes that
result from that economic relationship and the designated hedge ratio is consistent with the risk
management strategy.
Derivative instruments are initially recognised at fair value at the date a derivative contract is
entered into and are subsequently measured to their fair value at the end of each financial year.
The effective portion of changes in the fair value of derivatives that are designated and qualify
as cash flow hedges are deferred in equity.
The gain or loss relating to any ineffective portion is recognised immediately in the Consolidated
income statement as investment revenue or finance costs respectively. Amounts deferred in
equity are recycled in the Consolidated income statement in the periods when the hedged item
is recognised in the Consolidated income statement, in the same line of the Consolidated income
statement as the recognised hedged item.
Notes to the consolidated accounts
continued
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Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated
or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred
in equity at that time remains in equity and is recognised when the forecast transaction is
ultimately recognised in profit or loss. When a forecast transaction is no longer expected to
occur, the cumulative gain or loss that was deferred in equity is recognised immediately in the
income statement.
The Group’s use of financial derivatives is governed by the Group’s financial policies.
Further details on these policies can be found in the Strategic report on pages 1 to 71.
Fair values
The fair value is defined as the amount at which a financial instrument could be exchanged in an
arm’s length transaction between informed and willing parties and is calculated by reference to
market rates discounted to current value.
The Group determines the fair value of its financial instruments using market prices for quoted
instruments and widely accepted valuation techniques for other instruments.
Valuation techniques include discounted cash flows, standard valuation models based on
market parameters, dealer quotes for similar instruments and use of comparable arm’s
length transactions.
Revenue
Revenue is measured at the fair value of consideration received or receivable and represents
amounts receivable for services provided in the normal course of business, net of discounts,
VAT and other sales-related taxes, and provisions for returns and cancellations.
Revenue from exhibitions and conferences, whether in-person or virtual, is recognised when the
event is held, being the point in time that services are provided to the customer and performance
obligations have been satisfied. Payments for events are normally received in advance of the
event dates. Contractually committed revenues and billings, to the extent that the amounts have
fallen due and there is an enforceable right to payment, and cash received in advance, and
directly attributable costs relating to future events, are deferred.
The amounts deferred are included in the Statement of financial position as deferred income
and prepayments respectively until the event has completed. Deferred income balances
included in current liabilities at the reporting date will be recognised as revenue within 12 months.
Therefore, the aggregate amount of the transaction price in respect of performance obligations
that are unsatisfied at the reporting date is the deferred income balance which will be satisfied
within one year.
If an event is anticipated to make a loss, then the prepaid event costs in excess of the deferred
income held in the Statement of financial position at the end of a financial year are written off
in full. Where material, transaction prices and discounts are appropriately allocated between
performance obligations based on the market price of products.
Marketing and advertising services revenues are recognised on issue of the related publication,
over the period of the advertising subscription, or over the period when the marketing service is
provided, on a straight-line basis. The performance obligations are satisfied over time and this
reflects when the customer benefits from the services provided. The performance obligations
are distinct, being events held or publications issued. Where material, transaction prices and
discounts are appropriately allocated between performance obligations based on the market
price of products. Payments for such services are normally received in advance of the marketing
or advertising period.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable.
Income from investments is recognised when the shareholders’ rights to receive payment have
been established.
Due to the nature of the business, there is an immaterial value of transaction price allocated
to unsatisfied performance obligations. There are no material contract assets arising on work
performed to deliver performance obligations.
Barter transactions
Revenue relating to barter transactions is recorded at fair value and the timing of recognition
is in line with the above. Expenses from barter transactions are recorded at fair value and
recognised as incurred. Barter transactions typically involve the trading of show space or
conference places in exchange for services provided at events or media advertising.
Taxation
The tax expense represents the sum of tax currently payable and deferred tax.
The current tax charge is based on the taxable profit for the year using the tax rates and laws
that have been enacted or substantively enacted by the balance sheet date. Taxable profit
differs from net profit as reported in the income statement because it excludes items of income
or expense that are taxable or deductible in other years and it further excludes items that are
never taxable or deductible.
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continued
Deferred tax is the tax expected to be payable or recoverable on differences between the
carrying amounts of assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit, and is accounted for using the balance sheet
liability method. Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised only to the extent that it is probable that
taxable profits will be available against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in
a transaction that does not affect the tax profit or the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments
in subsidiaries and interests in joint ventures, except where the Group is able to control the
reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all
or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the
liability is settled or the asset is realised. Deferred tax is charged or credited in the income
statement, except where it relates to items charged or credited directly to equity, in which case
the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when they relate to income taxes levied by
the same taxation authority and the Group intends to settle its current tax assets and liabilities
on a net basis.
A current tax provision is recognised when the Group has a present obligation as a result of a
past event, it is probable that the Group will be required to settle that obligation and a reliable
estimate can be made of the amount of the obligation. The provision is the best estimate of the
consideration required to settle the present obligation at the balance sheet date, taking into
account the risks and uncertainties surrounding the obligation.
Insurance proceeds
The Group has insurance policies in place in respect of event postponements and cancellations.
The gross proceeds from claims under these policies are recognised in the income statement as
other operating income when the receipt of the proceeds is virtually certain.
Government grants
Government grants are not recognised until there is reasonable assurance that the Group
will comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in the income statement on a systematic basis over the
periods in which the Group recognises as expenses the related costs for which the grants are
intended to compensate. Government grants that are receivable as compensation for expenses
or losses already incurred or for the purpose of giving immediate financial support to the
Group with no future related costs are recognised in profit or loss in the period in which they
become receivable.
Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange at the date of the
transaction or their contractual rate where applicable. Monetary assets and liabilities
denominated in foreign currencies at the end of each financial year are retranslated at the
rates of exchange prevailing at that date. Non-monetary assets and liabilities are translated
at the rate prevailing at the date the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated. Gains and losses
arising on the settlement of monetary items, and on the retranslation of monetary items, are
included in income for the period. Exchange differences arising on the retranslation of non-
monetary items carried at fair value are included in income for the period except for differences
arising on the retranslation of non-monetary items in respect of which gains or losses are
recognised directly in other comprehensive income. For such non-monetary items, any exchange
component of that gain or loss is recognised in other comprehensive income.
Details of the Group’s accounting policies for forward contracts and options are included in the
policy on derivative financial instruments.
On consolidation, the monthly income statements of overseas operations are translated at the
average rates of exchange for each month, and each Statement of financial position at the rates
ruling at the end of each financial year. Exchange differences arising are classified as equity and
transferred to the Group’s translation reserve. Such translation differences are recognised as
income or as expense in the period in which the operation is disposed of. The Group deems an
operation to be disposed of when it has lost control of the trade and assets of that operation.
Under the exemption permitted from IAS 21 (the effects of changes in foreign exchange rates),
cumulative translation differences for all foreign operations prior to 1 October 2004 have been
treated as zero. Consequently, any gain or loss on disposal will exclude translation differences
that arose prior to 1 October 2004.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity and translated at the closing rate.
Notes to the consolidated accounts
continued
154
Hyve Group plc
Annual Report and Accounts 2022
2 Basis of accounting
continued
Employee Share Ownership Trust
The financial statements include the assets and liabilities of the Employee Share Ownership
Trust (‘ESOT’). Shares in the Company held by the ESOT have been valued at cost and are held
in equity. The costs of administration of the ESOT are written off to profit or loss as incurred.
Where such shares are subsequently sold, any net consideration received is included in equity
attributable to the Company’s equity holders.
Pension and other retirement benefits
The Group operates defined contribution pension plans in multiple regions around the Group.
Contributions payable are charged to the income statement as they fall due as an operating
expense.
Share-based payments
Equity-settled
The Group issues equity-settled share-based payments to certain employees. These are
measured at fair value (excluding the effect of non-market-based vesting conditions) at the
date of grant. The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based on the Group’s
estimate of shares that will eventually vest and adjusted for the effect of non-market-based
vesting conditions.
Cash-settled
The Group operates a cash-settled share-based compensation plan for the benefit of certain
employees. Cash-settled share-based payments are measured at fair value (excluding the
effect of non-market-based vesting conditions) at each reporting date. The fair value is
expensed on a straight-line basis over the vesting period, with a corresponding increase
in liabilities.
Fair value is measured using an option pricing model. The expected life used in the model has
been adjusted, for the effects of non-transferability, exercise restrictions and behavioural
considerations based on management’s best estimate.
Leases
The Group assesses whether a contract is or contains a lease at inception of the contract. The
Group recognises a right-of-use asset and a corresponding lease liability with respect to all
lease arrangements in which it is the lessee, except for short-term leases (defined as leases with
a lease term of 12 months or less) and leases of low value assets. For these leases, the Group
recognises the lease payments as operating leases expensed directly to the income statement.
The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, using the discount rate implicit with the lease. The lease liability
is presented as a separate line in the Consolidated statement of financial position. The lease
liability is subsequently measured by increasing the carrying amount to reflect interest on the
lease liability (using the discount rate used at commencement) and by reducing the carrying
amount to reflect the lease payments made. The Group remeasures the lease liability (and
makes a corresponding adjustment to the related right of use asset) whenever:
A lease contract is modified and the lease modification is not accounted for as a separate
lease, in which case the lease liability is remeasured based on the lease term of the modified
lease by discounting the revised lease payments using a revised discount rate at the effective
date of the modification; or
The lease payments change due to changes in an index or rate or a change in expected
payments, in which cases the lease liability is remeasured by discounting the revised lease
payments using a changed discount rate at the effective date of the modification.
The right-of-use assets comprise the initial measurement of the corresponding lease liability,
lease payments made at or before the commencement day, less any lease incentives received
and vacant property provisions. They are subsequently measured at cost less accumulated
depreciation and impairment losses. Right-of-use assets are depreciated over the expected
lease term of the underlying asset. The depreciation starts at the commencement date of the
lease. The Group applies IAS 36 to determine whether a right-of-use asset is impaired and
accounts for any identified impairment loss against the right-of-use asset.
Headline results (notes 5 and 11)
In addition to the statutory results, headline results are prepared for the income statement,
including measures in relation to operating profit, profit before tax and diluted earnings per
share, as the Board considers these measures to be the most appropriate way to measure the
Group’s performance in a way that is comparable to the prior year.
The Group presents headline results (note 5) and headline diluted earnings per share (note 11)
to provide additional useful information on business performance trends to shareholders.
These results are used for performance analysis and incentive compensation arrangements for
employees. Headline results exclude items that are commonly excluded among peer companies:
amortisation and impairment of goodwill and other intangible assets, transaction costs, profit or
loss on disposal of businesses, and other items that in the opinion of the Directors would distort
underlying results. The term ‘headline’ is not a defined term under IFRS and may not therefore
be comparable to similarly titled profit measurements reported by other companies. It is not
intended to be a substitute for, or superior to, IFRS measurements of profit. Refer to note 5 for
details of adjusting items recorded for the year and reconciled to statutory operating profit.
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Financial statements
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Annual Report and Accounts 2022
Hyve Group plc
2 Basis of accounting
continued
Critical accounting judgements and key sources of estimation uncertainty
In the process of applying the Group’s accounting policies, a number of judgements and
estimates have been made by management. Those that have the most significant effect on
the amounts recognised in the financial statements or have the most risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Critical accounting judgements
Adjusting items
The classification of adjusting items requires significant management judgement after
considering the nature and intentions of a transaction. The Group’s definitions of adjusting items
are outlined within both the Group accounting policies and the Glossary. These definitions have
been applied consistently year-on-year.
Note 5 provides further details on current year adjusting items.
Valuation of separately identifiable intangible assets
To determine the value of separately identifiable intangible assets on a business combination,
and deferred tax on those intangible assets, the Group is required to make judgements when
utilising valuation methodologies. The valuation is based upon discounted cash flow models
and includes judgements in relation to future cash flows, discount rates intended to reflect the
risk-adjusted cost of capital in the territory of the acquisition, revenue forecasts and the estimates
for the useful economic lives of intangible assets. There are significant judgements involved in
assessing what amounts should be recognised as the estimated fair value of assets and liabilities
acquired through business combinations, particularly the amounts attributed to separate
intangible assets such as trademarks and customer relationships. These judgements impact
the amount of goodwill recognised on acquisition. Any provisional amounts are subsequently
finalised within the 12-month measurement period, as permitted by IFRS 3 Business
Combinations. The Group considers the advice of third-party independent valuers to identify
and calculate the valuation of intangible assets on acquisition. Details of acquisitions in the year
are set out in note 13.
Key sources of estimation uncertainty
Impairment of goodwill and intangible assets
There are a number of estimates management considers when determining value in use, most
significantly the growth rates applied to future cash flows and the discount rates used to derive
the present value of those cash flows. Growth rates reflect management’s view of the long-term
forecast rates of growth, using third-party sources such as the International Monetary Fund
(IMF) where appropriate. Discount rates are selected to reflect the risk-adjusted cost of capital
for the respective territories. The most significant area of estimation uncertainty relates to
forecast cash flows at each CGU. Forecast cash flows are based on Board-approved budgets
and plans. A significant change in the assumptions used in determining the value in use of
certain CGUs, could potentially result in an impairment charge being recognised in relation
to those CGUs.
See notes 12 and 14 for further detail.
The carrying value of goodwill and intangible assets at 30 September 2022 is £141.2m
(2021: £73.7m) and £195.6m (2021: £200.7m) respectively.
Deferred and contingent consideration receivable and payable
The valuation of deferred and contingent consideration receivable of £9.3m (2021: £9.8m)
and payable of £58.0m (2021: £0.8m), recognised upon disposal or acquisition of the Group’s
businesses, is significantly impacted by the estimation of the discount rate used in determining
the present value of the consideration. The discount rate is selected to reflect the risk-adjusted
cost of capital for the territory in which the disposal or acquisition has taken place, as well as
the size and credit risk of the buyer for disposals. Any contingent element of the deferred and
contingent consideration receivable and payable is recognised at fair value based on the
Directors’ best estimate of the relevant performance of the disposed of or acquired business.
The following table summarises the quantitative information about the significant unobservable
inputs used in level 3 fair value measurements:
Description
Fair value at
Un-observable
inputs
Range of inputs
(probability
weighted average)
Relationship of unobservable
inputs to fair value
30-Sep-22
£000
30-Sep-21
£000
2022
2021
Deferred and
contingent
consideration
payable
58,039
– Risk-
adjusted
discount rate
5%
n/a
A change in the discount
rate by 5% would
increase/decrease the
fair value by £4.2m
Expected
cash inflows
5%
n/a
If expected cash flows
were 5% higher or lower,
the fair value would
increase/decrease
by £2.5m
Deferred tax assets
Deferred tax assets are recognised only to the extent that it is probable that future taxable
profits will be available against which the asset can be utilised. Therefore, there is estimation
uncertainty relating to the forecast profits. The forecast profits are based on Board-approved
budgets and plans and are consistently used across all key sources of estimation uncertainty. The
deferred tax asset of £8.5m is subject to sensitivities of the US forecast profit for the years ending
30 September 2023 to 30 September 2026. At 30 September 2022, deferred tax assets of £13.0m
(2021: £5.7m) have been recognised.
Notes to the consolidated accounts
continued
156
Hyve Group plc
Annual Report and Accounts 2022
3 Segmental information
The Group has identified reportable segments based on financial information used by the Executive Directors in allocating resources and making strategic decisions. The Executive Directors
(consisting of the Chief Executive Officer and the Chief Finance and Operations Officer) are considered to be the Group’s Chief Operating Decision Maker. The Group evaluates performance
on the basis of headline profit or loss before tax.
The Group’s reportable segments are operational business units and groups of events that are managed separately, either based on geographic location or as portfolios of events.
During the year, the Group has made changes to its reportable segments. The Global Communities division was previously managed by a single divisional leadership team but during the year
was divided into three new operating segments, each consisting of complementary event portfolios that are managed in unison by separate divisional leadership teams. The three new operating
segments are as follows:
EdTech & Natural Resources;
Retail, Manufacturing & Engineering; and
RetailTech & FinTech.
Following the Group’s disposal of its Russian and Ukrainian businesses during the year and its subsequent disposal of the Turkish business subsequent to the year ended 30 September 2022, the
Russian, Ukrainian and Turkish businesses are treated as discontinued operations in both the current and comparative periods. The Ukrainian and Turkish businesses together comprise the Eastern
& Southern Europe division.
In the year ended 30 September 2021, the Central Asia division was also treated as a discontinued operation. As a result, the comparative results are restated to incorporate the Russian, Eastern &
Southern Europe and Central Asian divisions.
The products and services offered by each business unit are identical across the Group. The revenue and headline profit before tax are attributable to the Group’s one principal activity, the
organisation of trade exhibitions, conferences and related activities, and can be analysed by operating segment as follows:
Year ended 30 September 2022
EdTech &
Natural
Resources
£000
Retail,
Manufacturing &
Engineering
£000
RetailTech &
FinTech
£000
Asia
£000
Continuing
operations
£000
Discontinued
operations
£000
Total Group
£000
Revenue
32,659
38,966
45,017
5,820
122,462
44,827
167,289
Segment headline profit/(loss) before tax
1,018
5,764
9,300
(2,112)
13,970
15,781
29,751
Other operating income
19,557
–
19,557
Unallocated costs
(22,054)
–
(22,054)
Headline profit before tax
11,473
15,781
27,254
Adjusting items
(42,440)
(46,271)
(88,711)
Loss before tax
(30,967)
(30,490)
(61,457)
Tax
5,615
(2,922)
2,693
Loss for the period
(25,352)
(33,412)
(58,764)
The revenue in the year of £167.3m includes £1.4m (2021 (restated): £0.4m) of marketing and advertising services revenues. No individual customer amounts to more than 10% of Group revenues.
Other operating income includes insurance proceeds received in the year of £19.3m (2021: £65.0m) in relation to claims regarding the cancellation or postponement of a number of events that were
scheduled to take place in FY20 and FY21. The gross proceeds are recognised in the income statement as other operating income when the receipt of the proceeds is virtually certain. Please refer to
the Chief Finance and Operations Officer’s statement for further detail.
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Financial statements
157
Annual Report and Accounts 2022
Hyve Group plc
3 Segmental information
continued
Unallocated costs include:
Head office costs;
Foreign exchange gains and losses on translation of monetary assets and liabilities held in Group subsidiary companies that are denominated in currencies other than the functional currency of
the subsidiaries; and
Net finance costs.
The Group’s share of profits from joint ventures, capital expenditure and amortisation and depreciation can be analysed by operating segment as follows:
Year ended 30 September 2022
EdTech &
Natural
Resources
£000
Retail,
Manufacturing
& Engineering
£000
RetailTech &
FinTech
£000
Asia
£000
Continuing
operations
£000
Discontinued
operations
£000
Total Group
£000
Share of results of joint ventures
Share of results before tax
–
–
–
(957)
(957)
(177)
(1,134)
Tax
–
–
–
225
225
35
260
Share of results after tax
–
–
–
(732)
(732)
(142)
(874)
Capital expenditure
Segment capital expenditure
32
7
116
31
186
215
401
Unallocated capital expenditure
559
960
Depreciation and amortisation
Segment depreciation and amortisation
9,450
10,172
8,128
1,272
29,022
575
29,597
Unallocated depreciation and amortisation
4,107
33,704
The impairment charges in respect of goodwill, intangible assets, investments in joint ventures and other assets can be analysed by operating segment as follows:
2022
£000
2021
£000
EdTech & Natural Resources
–
–
Retail, Manufacturing & Engineering
–
19,028
RetailTech & FinTech
–
–
Asia
–
–
Discontinued operations
2,850
–
2,850
19,028
Notes to the consolidated accounts
continued
158
Hyve Group plc
Annual Report and Accounts 2022
3 Segmental information
continued
The Group’s assets and liabilities can be analysed by operating segment as follows:
Year ended 30 September 2022
EdTech &
Natural
Resources
£000
Retail,
Manufacturing &
Engineering
£000
RetailTech &
FinTech
£000
Asia
£000
Total Group
£000
Assets
Segment assets
137,240
99,496
162,398
62,367
461,501
Assets classified as held for sale
2,963
Unallocated assets
15,151
479,615
Liabilities
Segment liabilities
(52,556)
(22,564)
(65,133)
(15,442)
(155,695)
Liabilities classified as held for sale
(2,854)
Unallocated liabilities
(131,903)
(290,452)
Net assets
189,163
All assets and liabilities are allocated to reportable segments except for certain centrally held balances, including property, plant and equipment and computer software relating to the Group’s
head office function, the Group’s bank loan and taxation (current and deferred).
Year ended 30 September 2021 (restated)
EdTech &
Natural
Resources
£000
Retail,
Manufacturing
& Engineering
£000
RetailTech &
FinTech
£000
Asia
£000
Continuing
operations
£000
Discontinued
operations
£000
Total Group
£000
Revenue
984
10,055
6,669
4,114
21,822
33,428
55,250
Segment headline (loss)/profit before tax
(7,822)
(6,749)
(6,153)
(7,454)
(28,178)
6,136
(22,042)
Other operating income
66,101
–
66,101
Unallocated costs
(24,006)
–
(24,006)
Headline profit before tax
13,917
6,136
20,053
Adjusting items
(41,382)
(3,616)
(44,998)
(Loss)/profit before tax
(27,465)
2,520
(24,945)
Tax
4,636
289
4,925
(Loss)/profit for the period
(22,829)
2,809
(20,020)
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Financial statements
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Hyve Group plc
3 Segmental information
continued
Year ended 30 September 2021 (restated)
EdTech &
Natural
Resources
Group
£000
Retail,
Manufacturing
& Engineering
£000
RetailTech &
FinTech
£000
Asia
£000
Continuing
operations
£000
Discontinued
operations
£000
Total
£000
Share of results of joint ventures
Share of results before tax
–
–
–
1,880
1,880
120
2,000
Tax
–
–
–
(455)
(455)
–
(455)
Share of results after tax
–
–
–
1,425
1,425
120
1,545
Capital expenditure
Segment capital expenditure
54
3
63
71
191
230
421
Unallocated capital expenditure
554
975
Depreciation and amortisation
Segment depreciation and amortisation
8,501
11,096
6,789
1,588
27,974
925
28,899
Unallocated depreciation and amortisation
5,835
34,734
The Group’s assets and liabilities can be analysed by operating segment as follows:
30 September 2021 (restated)
EdTech &
Natural
Resources
Group
£000
Retail,
Manufacturing
& Engineering
£000
RetailTech &
FinTech
£000
Asia
£000
Eastern &
Southern
Europe
£000
Russia
£000
Total
£000
Assets
Segment assets
78,893
115,780
76,566
68,488
5,938
31,592
377,257
Unallocated assets
43,652
420,909
Liabilities
Segment liabilities
(14,384)
(17,657)
(17,524)
(22,172)
(3,914)
(26,567)
(102,218)
Unallocated liabilities
(162,076)
(264,294)
Net assets
156,615
Notes to the consolidated accounts
continued
160
Hyve Group plc
Annual Report and Accounts 2022
3 Segmental information
continued
Information about the Group’s revenue by origin of sale and non-current assets by geographical location is detailed below.
Geographical information
Revenue
Non-current assets
1
2022
2021
2022
£000
2021
£000
Continuing
£000
Discontinued
£000
Continuing
£000
Discontinued
£000
Asia
5,820
–
4,317
–
45,319
46,377
Central Asia
–
–
–
49
–
–
Eastern & Southern Europe
–
8,842
–
5,401
–
2,340
Russia
–
28,952
–
21,398
–
19,170
UK
42,219
–
9,311
–
70,382
82,073
US
40,142
–
6,674
–
133,468
91,879
Rest of the World
34,281
7,033
1,520
6,580
123,406
94,243
122,462
44,827
21,822
33,428
372,575
336,082
1
Non-current assets exclude deferred tax assets and non-current assets classified as held for sale.
4 Operating profit/(loss)
Operating profit/(loss) from continuing operations is stated after charging/(crediting):
2022
£000
2021
(restated)
£000
Staff costs (note 8)
53,658
36,219
Redundancy, severance and payments in lieu of notice
–
(129)
Government grants – furlough payments received
–
(35)
Depreciation of property, plant and equipment (note 15)
3,437
4,777
Amortisation of intangible assets included within administrative expenses (note 14)
29,693
29,032
Impairment of assets (notes 12 and 19)
2,850
19,028
Profit on disposal of subsidiary holdings (note 17)
(3,974)
(197)
Short-term leases – offices
90
161
Short-term leases – venues
30,035
7,654
Loss/(gain) on derivative financial instruments – equity options (note 23)
–
(8,807)
Foreign exchange (gain)/loss on operating activities
(2,707)
306
Other operating income
19,557
66,101
Depreciation of property, plant and equipment of £0.6m (2021: £0.9m) is included in profit/(loss) from discontinued operations.
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Financial statements
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Hyve Group plc
4 Operating profit/(loss)
continued
Other operating income arises mainly from insurance proceeds received in the year in relation to claims regarding the cancellation or postponement of a number of events that were scheduled to
take place in previous financial years.
2022
£000
2021
£000
Cancellation insurance proceeds
19,255
64,992
Government and other subsidies
–
596
Other
302
513
Other operating income
19,557
66,101
Auditor’s remuneration
The analysis of the auditor’s remuneration is as follows:
2022
£000
2021
£000
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
533
408
Fees payable to the Company’s auditor and its joint ventures for other services:
– The audit of the Company’s subsidiaries pursuant to legislation
231
220
– Additional fees paid in relation to the 2021 audit
–
100
Total audit fees
764
728
– Other services pursuant to legislation (interim review)
84
69
– Advice regarding regulatory enquiries
–
12
– Reporting accountant work – Class 1 transaction
231
–
Total non-audit fees
315
81
1,079
809
Details on the Group’s policy on the use of the auditor for non-audit services, the reasons why the auditor was used rather than another supplier and how the auditor’s independence and objectivity
were safeguarded are set out in the Audit Committee report on pages 85 to 89. No services were provided pursuant to contingent fee arrangements.
Notes to the consolidated accounts
continued
162
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Annual Report and Accounts 2022
5 Adjusting items
2022
£000
2021
£000
Operating adjusting items
Amortisation of acquired intangible assets (note 14)
28,838
27,770
Impairment of assets (notes 12 and 19)
2,850
19,028
Profit on disposal of subsidiary holdings (note 17)
(3,974)
(189)
Transaction costs on completed and pending acquisitions and disposals
3,276
682
Tax on income from joint ventures
(225)
455
Total operating adjusting items
30,765
47,746
Financing adjusting items
Revaluation of assets and liabilities on completed acquisitions and disposals
– Gain on revaluation of equity options (note 23)
–
(8,807)
– Loss on revaluation of deferred and contingent consideration payable (note 21)
6,783
1,350
– Loss on revaluation of deferred and contingent consideration receivable (note 19)
1,050
2,687
– Unwind of imputed interest credit on discounted deferred and contingent consideration receivable (note 19)
(1,652)
(1,594)
– Unwind of imputed interest charged on discounted deferred and contingent consideration payable (note 21)
5,494
–
Total adjusting items before tax
42,440
41,382
The loss from discontinued operations is adjusted for the following items:
2022
£000
2021
£000
Operating adjusting items
Loss on disposal of discontinued operations (note 17)
46,306
3,604
Discontinued operations – adjusting items
46,306
3,604
The adjusting items are discussed in the Chief Finance and Operations Officer’s statement and the alternative performance measures section of the Glossary.
6 Investment revenue
2022
£000
2021
£000
Interest receivable from bank deposits
269
163
Gain on revaluation of equity options
–
8,807
Unwind of imputed interest credit on discounted deferred and contingent consideration receivable (note 19)
1,652
1,594
1,921
10,564
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Financial statements
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Hyve Group plc
7 Finance costs
2022
£000
2021
£000
Interest on bank loans
5,674
5,241
Bank charges
1,926
2,350
Loss on revaluation of deferred and contingent consideration receivable (note 19)
1,050
2,687
Loss on revaluation of deferred and contingent consideration payable (note 21)
6,783
1,350
Unwind of imputed interest charged on discounted deferred and contingent consideration payable (notes 19 and 21)
5,494
–
Interest on lease liabilities (note 27)
592
650
21,519
12,278
8 Staff costs
2022
Number
2021
(restated)
Number
The average monthly number of employees (including Directors) was:
Administration
146
158
Technical and sales
351
325
497
483
Their aggregate remuneration comprised:
£000
£000
Wages and salaries
44,414
30,269
Social security costs
4,943
3,573
Other staff benefits
1,426
674
Defined contribution pension scheme contributions
1,277
937
Share-based payments (note 28)
1,598
766
53,658
36,219
The defined contribution pension contributions relate to the schemes in multiple regions around the Group. Staff costs of £8.5m (2021: £10.7m) are included in profit/(loss) from
discontinued operations.
Details of audited Directors’ remuneration are shown in the Directors’ remuneration report on pages 99 to 127.
Remuneration of key management personnel is disclosed in note 29.
Notes to the consolidated accounts
continued
164
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Annual Report and Accounts 2022
9 Tax on profit on ordinary activities
Analysis of tax credit for the year:
2022
£000
2021
(restated)
£000
Group taxation on current year result:
UK corporation tax (credit)/charge on result for the year
(178)
1,211
Adjustment to UK tax in respect of previous years
(222)
17
(400)
1,228
Overseas tax – current year
400
1,334
Overseas tax – previous years
126
(735)
526
599
Current tax
126
1,827
Deferred tax
Origination and reversal of temporary differences:
Current year
(5,576)
(4,953)
Prior year
(165)
(1,510)
(5,741)
(6,463)
(5,615)
(4,636)
The tax impact of the adjusting items outlined within note 5 and within the Consolidated income
statement relates to the following:
2022
Gross
£000
2022
Tax impact
£000
2021
(restated)
Gross
£000
2021
(restated)
Tax impact
£000
Amortisation of acquired intangible assets
28,838
5,745
27,770
5,526
Impairment of assets
2,850
–
19,028
5,206
Change of rate of deferred tax on
intangible assets
–
–
–
(4,712)
Profit on disposal of subsidiary holdings
(3,974)
–
(189)
–
Transaction costs on completed and
pending acquisitions and disposals
3,276
–
682
–
Tax on income from joint ventures
(225)
(225)
455
455
Revaluation of liabilities on completed
acquisitions
– Gain on revaluation of equity options
–
–
(8,807)
–
– Loss on revaluation of deferred and
contingent consideration payable
6,783
–
1,350
–
– Loss on revaluation of deferred and
contingent consideration receivable
1,050
–
2,687
–
– Unwind of imputed interest credit on
discounted deferred and contingent
consideration receivable
(1,652)
–
(1,594)
–
– Unwind of imputed interest charged
on discounted deferred and contingent
consideration payable
5,494
–
–
–
42,440
5,520
41,382
6,475
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Financial statements
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Annual Report and Accounts 2022
Hyve Group plc
9 Tax on profit on ordinary activities
continued
The tax credit for the year can be reconciled to the loss per the income statement as follows:
2022
£000
2021
(restated)
£000
Loss on ordinary activities before tax from continuing operations
(30,967)
(27,465)
Loss on ordinary activities multiplied by standard rate of corporation
tax in the UK of 19.0% (2021: 19.0%)
(5,884)
(5,218)
Effects of:
Profit on disposal of subsidiary holdings
790
(29)
Transaction costs
209
181
Tax effect of equity options and deferred contingent consideration
2,218
(1,133)
Impairment of assets
543
283
Other expenses not deductible for tax purposes
873
611
Tax effect of amortisation of intangible assets
(86)
(1,386)
Brought forward deferred tax asset recognised
(4,602)
(2,411)
Movement on provisions for tax uncertainties
(283)
(76)
Current year losses not recognised as a DTA
–
3,594
Brought forward losses utilised – no brought forward DTA
57
–
Withholding tax on overseas dividends suffered in the year
85
563
Deferred tax provision on repatriation of overseas profits
(100)
950
Adjustments in response to prior years
(261)
(2,215)
Change in tax rate at which deferred tax is calculated
–
2,072
Deferred tax brought forward at 25%, but utilised at 19%
790
–
Effect of different tax rates of subsidiaries in other jurisdictions
(109)
(137)
Associate tax
145
(285)
Total tax credit
(5,615)
(4,636)
Current tax is the amount of corporate income taxes expected to be payable or recoverable
based on the profit for the period as adjusted for items that are not taxable or not deductible
and is calculated using tax rates and laws that were enacted or substantively enacted at the
date of the statement of financial position.
The Group seeks to pay tax in accordance with the laws of the countries where it does
business. The Group estimates its tax on a country-by-country basis. Current tax includes
amounts provided in respect of uncertain tax positions where management expects that, upon
examination of the uncertainty by a tax authority in possession of all relevant knowledge, it is
probable that an economic outflow will occur. While the Group is confident that tax returns are
appropriately prepared and filed, amounts are provided in respect of uncertain tax positions
that reflect the risk with respect to tax matters that are considered to involve uncertainty.
Provisions against uncertain tax positions are measured using a probability weighted expected
measure – where on the balance of probabilities something will be paid to the tax authorities but
there is no definite outcome, the provision is the sum of the probability of the weighted outcomes.
There are no ongoing discussions with tax authorities relating to uncertain tax positions.
A tax charge of £2.9m (2021 restated: a tax credit of £0.3m) has been recognised in respect of
discontinued operations.
2022
£000
2021
£000
Tax relating to components of comprehensive income:
Cash flow (losses) – Deferred (note 24)
(15)
(130)
Tax relating to amounts (charged)/credited to equity:
Share options – Deferred (note 24)
(101)
101
(101)
101
(116)
(29)
10 Dividends
The Directors have not proposed a final dividend (2021: nil) for the year ended 30 September
2022. The payment of dividends was restricted during the year under the terms of the waivers
agreed with the Group’s lenders in May 2020 and extended in November 2021, and remain
restricted under the terms of the new debt facility agreed in October 2022 until the business
is sufficiently deleveraged.
There were not any interim dividends declared or paid in the years ended 30 September 2022
and 30 September 2021.
Under the terms of the trust deed dated 20 October 1998, the Hyve Group Employees Share
Trust, which holds 671,757 (2021: 771,375) ordinary shares representing 0.2% of the Company’s
called up ordinary share capital, has agreed to waive all dividends due to it each year.
Notes to the consolidated accounts
continued
166
Hyve Group plc
Annual Report and Accounts 2022
11 Earnings per share
The calculation of basic, diluted, headline basic and headline diluted earnings per share is based
on the following numbers of shares and earnings:
2022
No. of shares
(000)
2021
No. of shares
(000)
Weighted average number of shares:
For basic earnings per share
287,388
264,349
Effect of dilutive potential ordinary shares
293
132
For diluted and headline diluted earnings per share
287,681
264,481
Basic and diluted earnings per share
The calculations of basic and diluted earnings per share are based on the loss for the financial
year attributable to equity holders of the parent of £58.1m (2021: loss of £19.2m). Basic and
diluted earnings per share were (20.2)p and (20.2)p respectively (2021: (7.3)p and (7.3)p). No
share options were included in the weighted average number of ordinary shares used in the
calculation of the diluted earnings per share because their effect would have been anti-dilutive.
Headline earnings per share
The calculations of headline basic and diluted earnings per share are based on the headline
profit for the financial year attributable to equity holders of the parent of £25.1m (2021: profit
of £19.3m). Headline basic and diluted earnings per share were 8.7p and 8.7p respectively
(2021: 7.3p and 7.3p).
Basic and diluted earnings per share from continuing operations
The calculations of basic and diluted earnings per share from continuing operations are based
on the loss for the financial year attributable to equity holders of the parent from continuing
operations of £24.7m (2021 restated: loss of £22.0m). Basic and diluted earnings per share from
continuing operations were (8.6)p and (8.6)p respectively (2021 restated: (8.3)p and (8.3)p). No
share options were excluded from the weighted average number of ordinary shares used in the
calculation of the diluted earnings per share because their effect would have been anti-dilutive.
Headline earnings per share from continuing operations
The calculations of headline basic and diluted earnings per share are based on the headline
profit for the financial year attributable to equity holders of the parent from continuing
operations of £12.2m (2021 restated: £12.9m). Headline basic and diluted earnings per share
from continuing operations were 4.2p and 4.2p respectively (2021 restated: 4.9p and 4.9p
respectively).
A reconciliation of the loss for the financial year attributable to equity holders of the parent to the
headline earnings for the financial year after tax is provided below:
2022
£000
2021
(restated)
£000
Loss for the financial year attributable to equity holders of the parent
(58,113)
(19,188)
Amortisation of acquired intangible assets
28,838
27,770
Impairment of assets (notes 12 and 19)
2,850
19,028
Profit on disposal of subsidiary holdings (note 17)
(3,974)
(189)
Loss on disposal of discontinued operations (note 17)
46,306
3,603
Transaction costs on completed and pending acquisitions
and disposals
3,276
682
Tax on income from joint ventures
(225)
–
Revaluation of assets and liabilities on completed acquisitions
and disposals
– Gain on revaluation of equity options (note 23)
–
(8,807)
– Loss on revaluation of deferred and contingent consideration
payable (note 21)
6,783
1,350
– Loss on revaluation of deferred and contingent consideration
receivable (note 19)
1,050
2,687
– Unwind of imputed interest credit on discounted deferred and
contingent consideration receivable (note 19)
(1,652)
(1,594)
– Unwind of imputed interest charged on discounted deferred and
contingent consideration payable (note 21)
5,494
–
Tax effect of other adjustments
(5,520)
(6,019)
Headline profit for the financial year attributable to equity holders
of the parent
25,113
19,323
Headline profit from discontinued operations
12,894
6,413
Headline profit for the financial year attributable to equity holders
of the parent from continuing operations
12,219
12,910
Strategic report
Governance
Financial statements
167
Annual Report and Accounts 2022
Hyve Group plc
12 Goodwill
Goodwill
£000
Cost
At 1 October 2020
297,675
Additions through business combinations
12,741
Foreign exchange
(3,689)
Disposal
(5,777)
At 30 September 2021
300,950
Additions through business combinations (note 13)
62,025
Disposals
(55,110)
Foreign exchange
34,883
Goodwill classified as held for sale
(10,173)
At 30 September 2022
332,575
Provision for impairment
At 1 October 2020
(233,997)
Disposals
2,029
Foreign exchange
4,720
At 30 September 2021
(227,248)
Disposals
36,771
Impairment
(2,072)
Foreign exchange
(9,016)
Accumulated impairment losses classified as held for sale
10,173
At 30 September 2022
(191,392)
Net book value
At 30 September 2022
141,183
At 30 September 2021
73,702
Goodwill with a net book value of £18.3m was disposed of during the year following the disposal
of the Russian business. The net book value of goodwill held in respect of ABEC and Ukraine,
which were also disposed of during the year, was £nil. The goodwill classified as held for sale in
respect of Turkey has a net book value of £nil, having previously been fully impaired (see note 17).
An impairment charge of £2.1m has been recognised in respect of Fin-mark Srl, which previously
organised the Aqua-therm event in Ukraine. The impairment charges are recognised within
administrative expenses in the Consolidated income statement.
The Group tests goodwill annually for impairment, or more frequently if there are indications that
goodwill might be impaired. The recoverable amounts of the CGUs are determined from value in
use calculations. The key assumptions for the value in use calculations are those regarding the
Group’s cash flow forecasts, long-term growth rates and discount rates applied to the forecast
cash flows.
Cash flow forecasts
The Group prepares cash flow forecasts based upon management’s most recent four-year
financial plans presented to and approved by the Board and thereafter creates a terminal value
by extrapolating the planned cash flows.
The cash flow forecasts used in the value in use calculation have been revised to take into
account the latest view of the Group’s event schedule and its recovery from the COVID-19
pandemic. The profile of the recovery differs across the portfolio, influenced by the pre-
COVID-19 trajectory, the proportion of the customer base that is international, the resilience
of the industry sector and speed of recovery expected by geography. The forecasts assume
that the impact of COVID-19 on the Group’s event schedule will be minimal, with the notable
exception of China (both in respect of events taking place in China and in respect of Chinese
international participation at events outside China). On a total basis, adjusted for the Group’s
recent disposals, we now forecast a full recovery by the end of the financial year ending
30 September 2023, with further growth driven from the recent acquisitions of 121 Group
and Fintech Meetup.
Central costs are allocated to the CGUs to the extent that they are necessarily incurred to
generate the cash inflows, and can be directly attributed, or allocated on a reasonable and
consistent basis.
Long-term growth rates
Growth rates beyond the detailed plans are based on IMF forecasts of inflation rates in the local
markets, as the CGUs are expected to grow in line with their relevant underlying markets over the
long term. These growth rates, of between 1% and 4%, do not exceed the long-term growth rates
for the economies in which these businesses operate.
Discount rates
Management estimates discount rates that reflect the current market assessments of the time
value of money and risks specific to the CGUs. There are a number of different inputs used in the
build-up of the discount rates, including inflation rates, risk-free rates, market risk premiums and
industry betas, taken from a number of independent sources, including the IMF, Bloomberg and
Financial Times.
The pre-tax discount rates applied to the CGUs are between 16% and 20% (2021: 12% and 17%).
The large variance in discount rates applied reflects the differences in risks inherent in the
regions in which the CGUs operate.
Notes to the consolidated accounts
continued
168
Hyve Group plc
Annual Report and Accounts 2022
12 Goodwill
continued
Discount rates have increased significantly since the prior year, reflecting a number of changes in the Group’s internal and external environment:
Cost of debt – the Group’s cost of debt has increased following the completion of a refinancing in challenging market conditions while the business is still recovering from the COVID-19 pandemic
(see note 20). SONIA, the variable element of the Group’s interest rates, has also increased significantly during the period.
Macroeconomic uncertainty – the discount rates used by management are required to reflect market conditions at the reporting date. Due to the turmoil caused by the UK Government’s
‘mini-budget’ in September 2022, risk-free rates as at 30 September 2022 were markedly higher than in the months preceding the reporting date and have since fallen.
Share price volatility – as a result of the COVID-19 pandemic and the subsequent Russia-Ukraine war, the Group’s share price has been highly volatile in recent years with the Group’s market
capitalisation falling significantly. Therefore the Group’s beta, a measure of Hyve’s volatility relative to market volatility, has increased and the size premium used in the discount rate build-up
has been updated to reflect the Group’s current value in use.
Individually significant CGUs
Significant CGUs
Goodwill
Other intangible assets
Long-term growth rates
Pre-tax discount rates
Recoverable amount in
excess of carrying value
2022
£m
2021
£m
2022
£m
2021
£m
2022
%
2021
%
2022
%
2021
%
2022
£m
2021
£m
China
10.7
9.6
0.7
1.8
2.0
2.0
17.2
12.7
1.4
18.8
Global Natural Resources
47.3
0.8
32.9
27.7
3.2
3.3
19.2
15.1
26.1
14.1
Bett
0.7
0.7
36.4
40.2
1.9
2.0
17.1
12.6
21.1
6.9
Shipping & Specialised Engineering
17.6
16.2
37.2
41.5
2.2
1.9
16.7
12.0
0.8
14.1
UK
–
–
23.2
28.9
1.9
2.0
17.1
13.0
26.0
–
RetailTech
36.2
29.4
62.6
58.6
2.0
2.4
16.5
12.5
77.8
39.6
FinTech
28.7
–
1.7
–
2.0
n/a
16.5
n/a
17.6
n/a
A new CGU, FinTech, has been formed following the acquisition of Fintech Meetup in March 2022.
Goodwill of £38.1m and intangibles of £9.0m in respect of the acquisition of 121 Group have been allocated to the Global Natural Resources CGU (formerly Africa Oil & Mining CGU).
Sensitivity to changes in assumptions
The calculation of value in use is most sensitive to the discount rates, growth rates and forecast cash flows used. The Group has conducted a sensitivity analysis taking into consideration the impact
on these assumptions arising from a range of reasonably possible trading and economic scenarios, including a recession in FY23. The scenarios have been performed separately, and in aggregate,
for each CGU with a recoverable value in excess of its carrying value, with the sensitivities summarised as follows:
A recession in FY23. We have sensitised forecasts to factor in the potential impact of a recession in FY23. Under this scenario, FY23 revenues in the China and UK CGUs decrease by 10%, revenues
in Bett and CWIEME (a component of the Shipping & Specialised Engineering CGU) decrease by 5% and revenues in RetailTech decrease by 2%. The cost savings associated with these revenue
declines are included in the forecast. Overall this represents an 11% decline in operating profits.
An increase in the discount rate by 5%. This is comparable to the increase in the discount rates experienced in FY23 compared to FY22.
A decrease in the long-term growth rate by 1%.
Strategic report
Governance
Financial statements
169
Annual Report and Accounts 2022
Hyve Group plc
12 Goodwill
continued
The sensitivity analysis shows that no impairment would result from the modelled recession
scenario in FY23, a decrease in the long-term growth rate, an increase in the discount rate or an
aggregate of these sensitivities, in any CGU other than in the China, Shipping & Specialised and
Global Natural Resources CGUs. The changes in key assumptions that would cause the
recoverable value of the CGUs to equal their carrying values are shown below.
Sensitivity
China
Shipping &
Specialised
Engineering
Global Natural
Resources
% change in operating profit
–4.9%
–1.0%
–31.8%
% change in discount rate
1.5%
0.2%
5.1%
% change in long-term growth rate
–2.1%
–0.3%
–5.0%
13 Acquisitions
121 Group
On 26 November 2021, the Group acquired 100% of the share capital of 121 Group (HK) Limited
and 121 Partners Limited (together ‘121 Group’) a market-leading omnichannel meetings
programme organiser focused on the mining sector across EMEA, North America and APAC.
Initial cash consideration of £22.9m was paid at acquisition and the fair value of the deferred
contingent consideration at the acquisition date was £24.4m. The acquisition was completed to
support the Group’s digital evolution and the delivery of its omnichannel strategy.
The deferred contingent consideration relates to three earn-out payments based on the
EBITDA of 121 Group for the years ending 31 March 2022, 31 March 2023 and 31 March 2024.
The deferred contingent consideration was calculated based on management’s expectations of
EBITDA at acquisition. A settlement of £7.2m was paid in July 2022 and the deferred contingent
consideration was subsequently revalued at year end based on the latest forecasts, resulting
in an increase of £2.3m of undiscounted forecast consideration payments compared with
management’s expectations at the time of acquisition.
During the period, the Group incurred transaction costs on the acquisition of £1.8m, which are
included within administrative expenses.
The amounts to be recognised in respect of the identifiable assets acquired and liabilities
assumed are presented as follows:
Fair value
£000
Non-current assets
Intangible assets – Customer relationships
6,790
Intangible assets – Trademarks
2,259
Property, plant and equipment
587
Current assets
Trade and other receivables
809
Cash and cash equivalents
3,126
Total assets
13,571
Current liabilities
Trade and other payables
(606)
Current tax liabilities
(702)
Deferred income
(1,186)
Non-current liabilities
Deferred tax liability
(1,686)
Lease liabilities
(254)
Total liabilities
(4,434)
Identifiable net assets
9,137
Goodwill arising on acquisition
38,122
Total consideration
47,259
Satisfied by
Initial cash consideration
22,905
Deferred and contingent consideration
24,354
47,259
Net cash outflow arising on acquisition
(19,779)
Net cash outflow arising on settlement of deferred contingent consideration
(24,354)
Total net cash outflow from acquisition
(44,133)
Notes to the consolidated accounts
continued
170
Hyve Group plc
Annual Report and Accounts 2022
13 Acquisitions
continued
The goodwill of £38.1m arising from the acquisition reflects the strategic value of the opportunity
to share best practices across the Group and 121 Group omnichannel events and the potential
synergies with the Group’s Mining Indaba event. The goodwill of £38.1m is expected to be
deductible for tax purposes.
The acquired business has contributed £6.3m to Group revenue and £2.1m to statutory profit
before tax. Had the acquisition occurred on 1 October 2021, the acquired businesses would have
contributed £9.2m to Group revenue and £4.1m to statutory profit before tax.
Net cash outflow arising on acquisition was £19.8m and net cash outflow arising on settlement of
deferred contingent consideration was expected to be £24.4m at the acquisition date.
At 26 November 2021, the purchase price allocation (PPA) was prepared on a provisional basis
in accordance with IFRS 3. During the 12-month measurement period from the acquisition date,
the Group finalised the valuation of assets and liabilities acquired. Adjustments were made to
the provisional PPA, which was disclosed in the Group’s condensed consolidated financial
statements for the six months ended 31 March 2022, resulting in an increase in the goodwill
recognised on acquisition by £2.9m.
Fintech Meetup
On 11 March 2022, the Group announced the acquisition of 100% of the share capital of Fintech
Meetup LLC (‘Fintech Meetup’), an organiser of the leading US-based fintech facilitated
meetings event, for initial cash consideration of £4.2m. Deferred contingent consideration
payable with a fair value of £19.9m was recognised at the acquisition date. The deferred
contingent consideration relates to two earn-out payments based on the EBITDA of Fintech
Meetup in the years ending 30 September 2023 and 30 September 2024.
The deferred contingent consideration was calculated based on management’s expectations of
EBITDA at acquisition and was subsequently revalued at year end based on the latest forecasts,
resulting in a forecast additional £5.0m of undiscounted consideration being payable compared
with management’s expectations at the time of acquisition.
During the period, the Group incurred transaction costs on the acquisition of £1.0m, which are
included within administrative expenses.
The amounts to be recognised in respect of the identifiable assets acquired and liabilities
assumed are presented as follows:
Fair value
£000
Non-current assets
Intangible assets – Customer relationships
797
Intangible assets – Trademarks
797
Deferred tax asset
490
Current assets
Trade and other receivables
17
Cash and cash equivalents
622
Total assets
2,723
Current liabilities
Trade and other payables
(108)
Deferred income
(2,396)
Total liabilities
(2,504)
Identifiable net assets
219
Goodwill arising on acquisition
23,903
Total consideration
24,122
Satisfied by
Initial cash consideration
4,208
Deferred and contingent consideration
19,914
24,122
Net cash outflow arising on acquisition
(3,586)
Net cash outflow arising on settlement of deferred contingent consideration
(19,914)
Total net cash outflow from acquisition
(23,500)
The goodwill of £23.9m arising from the acquisition reflects the strategic value of the acquisition
of an innovative product, including the expectation of new contracts and relationships and the
potential for growth from further digital spin-off events.
The acquired business has contributed £2.3m to Group revenue and £1.0m to statutory profit
before tax. Had the acquisition occurred on 1 October 2021, the acquired businesses would have
contributed £2.3m to Group revenue and (£2.7m) to statutory profit before tax.
Net cash outflow arising on acquisition was £3.6m and net cash outflow arising on settlement of
deferred contingent consideration was expected to be £19.9m at the acquisition date.
Strategic report
Governance
Financial statements
171
Annual Report and Accounts 2022
Hyve Group plc
14 Other intangible assets
Customer
relationships
£000
Trademarks
and licences
£000
Visitor
databases
£000
Perpetual
technology
licences
£000
Computer
software
£000
Total
£000
Cost
At 1 October 2020
100,977
292,128
206
4,177
6,807
404,295
Additions through business combinations
–
1,270
–
9,523
99
10,892
Additions
–
–
–
–
104
104
Disposals
(1,938)
(1,327)
–
–
(1,109)
(4,374)
Foreign exchange
(1,968)
(3,024)
(33)
(179)
30
(5,174)
At 30 September 2021
97,071
289,047
173
13,521
5,931
405,743
Additions through business combinations (note 13)
7,587
3,056
–
–
–
10,643
Additions
–
–
–
–
63
63
Disposals
(5,902)
(6,852)
–
–
(1,067)
(13,821)
Foreign exchange
5,015
12,691
(71)
3,158
74
20,867
Intangible assets classified as held for sale (note 17)
(10,400)
(2,132)
(102)
–
(10)
(12,644)
At 30 September 2022
93,371
295,810
–
16,679
4,991
410,851
Amortisation
At 1 October 2020
(60,492)
(99,064)
(206)
(348)
(3,613)
(163,723)
Charge for the year
(8,311)
(17,908)
–
(1,551)
(1,262)
(29,032)
Impairments (note 12)
(1,169)
(17,859)
–
–
–
(19,028)
Disposals
1,938
1,327
–
–
945
4,210
Foreign exchange
1,437
1,033
33
34
(47)
2,490
At 30 September 2021
(66,597)
(132,471)
(173)
(1,865)
(3,977)
(205,083)
Charge for the year
(9,185)
(17,892)
–
(1,761)
(855)
(29,693)
Disposals
5,902
6,852
–
–
843
13,597
Foreign exchange
(1,973)
(3,875)
71
(847)
(72)
(6,696)
Accumulated amortisation and impairment losses classified as held for sale (note 17)
10,400
2,132
102
–
10
12,644
At 30 September 2022
(61,453)
(145,254)
–
(4,473)
(4,051)
(215,231)
Net book value
At 30 September 2022
31,918
150,556
–
12,206
940
195,620
At 30 September 2021
30,474
156,576
–
11,656
1,954
200,660
The amortisation period for customer relationships is between three and 12 years, for trademarks between three and 20 years, for visitor databases between five and eight years and for perpetual
technology licences between seven and 10 years. Computer software is amortised over five years.
The additions to customer relationships and trademarks and licences through business combinations relate to the purchase of 121 Group (£9.0m) and Fintech Meetup (£1.6m) as disclosed in note 13.
The intangible assets acquired during the year are amortised in accordance with the Group’s amortisation policy for intangible assets as detailed in note 2 and have been assessed for impairment
as detailed in note 12.
Notes to the consolidated accounts
continued
172
Hyve Group plc
Annual Report and Accounts 2022
14 Other intangible assets
continued
Individually material intangible assets
CGU
Acquisition
Description
Initial fair value
£000
Carrying
amount £000
Remaining
amortisation
Bett
Bett
Trademarks
63,863
34,531
15.8 years
Shipping & Specialised
Engineering
CWIEME
Trademarks
41,022
32,390
15.8 years
UK
UK
Trademarks
89,833
18,741
15.8 years
Global Natural
Resources
Mining Indaba
Trademarks
22,089
16,892
13.0 years
RetailTech
Shoptalk
Trademarks
48,736
42,070
7.2 years
15 Property, plant and equipment
Leasehold land
and buildings
£000
Plant and
equipment
£000
Right-of-use
asset
£000
Total
£000
Cost
At 1 October 2020
5,303
5,994
20,580
31,877
Additions through business combinations
–
–
–
–
Additions
453
418
1,558
2,429
Disposals
(3,211)
(1,073)
(273)
(4,557)
Foreign exchange
(19)
(22)
(376)
(417)
Lease modifications
–
–
(964)
(964)
At 30 September 2021
2,526
5,317
20,525
28,368
Additions through business combinations
(note 13)
175
30
420
625
Additions
248
650
925
1,823
Disposals
(1,614)
(2,374)
(2,748)
(6,736)
Foreign exchange
189
89
1,753
2,031
Fixed assets classified as held for sale
(note 17)
(47)
(120)
(37)
(204)
At 30 September 2022
1,477
3,592
20,838
25,907
Depreciation
At 1 October 2020
(3,386)
(4,102)
(3,274)
(10,762)
Charge for the year
(1,490)
(960)
(3,252)
(5,702)
Disposals
3,062
1,073
129
4,264
Foreign exchange
12
(49)
21
(16)
Lease modifications
–
–
1,085
1,085
At 30 September 2021
(1,802)
(4,038)
(5,291)
(11,131)
Charge for the year
(704)
(107)
(3,200)
(4,011)
Additions through business combinations
(note 13)
(26)
(12)
–
(38)
Disposals
1,490
1,861
1,717
5,068
Foreign exchange
309
(487)
(610)
(788)
Accumulated depreciation classified as held
for sale (note 17)
36
91
31
158
At 30 September 2022
(697)
(2,692)
(7,353)
(10,742)
Net book value
At 30 September 2022
780
900
13,485
15,165
At 30 September 2021
724
1,279
15,234
17,237
All right-of-use assets are recognised in respect of office leases.
Strategic report
Governance
Financial statements
173
Annual Report and Accounts 2022
Hyve Group plc
16 Subsidiaries
A list of all subsidiaries, including the name, country of incorporation and proportion of ownership interest, is presented in note 5 to the Company’s separate financial statements.
17 Disposal of subsidiaries and discontinued operations
In the year, the Group completed the disposal of its Russian business, Ukrainian business, ABEC portfolio of events in India and its interest in the Debindo joint venture in Indonesia.
The profit/(loss) on disposal of subsidiary holdings and the net cash outflow arising on disposal are summarised as follows:
Profit/(loss) on disposal of subsidiary holdings
Net cash outflow arising on disposal
Continuing
operations
£000
Discontinued
operations
£000
Total
£000
Consideration
received in
cash and cash
equivalents
£000
Cash and cash
equivalents
disposed of
£000
Costs to sell
£000
Net cash
outflow arising
on disposal
£000
Russia
–
(38,272)
(38,272)
–
(6,405)
(2,728)
(9,133)
Ukraine
–
(8,034)
(8,034)
(250)
(62)
(90)
(402)
ABEC
3,140
–
3,140
974
(2,059)
–
(1,085)
Debindo
834
–
834
535
–
(152)
383
Total
3,974
(46,306)
(42,332)
1,259
(8,526)
(2,970)
(10,237)
The Group’s disposals of ABEC and Debindo are not treated as discontinued operations because the disposal did not meet the IFRS 5 criteria: the disposal of a separate major line of business or a
separate geographical area of business. The Group did not incur any transaction costs in respect of the disposal of ABEC because the business was sold to existing minority shareholders.
Russia
In March 2022, the Group announced the disposal of its Russian business and on 13 May 2022 it completed the disposal of its 100% shareholding of the Russian business to Rise Expo Limited, a newly
incorporated entity in the UAE which is majority owned by a German national with significant experience in the events industry.
The consideration for the sale was wholly structured as earn-out consideration of up to £72.0m payable over a 10-year period. Sanctions imposed on Russia in response to the war in Ukraine
limit the Group’s ability to receive consideration in respect of the disposal of the Russian business and as at the reporting date the severity of the sanctions imposed has only increased. A change
in the global sanctions landscape is expected to be required before consideration could be received, the timing and extent of which is very unpredictable but is not anticipated in the short term.
The consideration receivable at the disposal date is therefore deemed to have a fair value of £nil.
The sensitivity of the fair value to changes in assumptions has been considered, including a scenario where sanctions are relaxed before the final earn-out payment is due in December 2032.
Were the Russian business to deliver a performance to trigger the maximum £72.0m consideration payable, the length of the period until receipt would result in an immaterial fair value of £1.2m.
It should also be noted that the business reported a loss in the period between disposal and 30 September 2022. The calculated fair value of £1.2m is after being discounted at a rate of 48% to
reflect the significant risks inherent both in operating in Russia and the counterparty risk. This value could also reduce further if sanctions were not lifted until beyond December 2032, supporting
the £nil fair value for the consideration receivable.
The assets of the Russian business were not impaired prior to their classification as held for sale as their recoverability was supported by the trading of the Russian business at that time. A loss on
disposal of £38.3m is recognised in the year ended 30 September 2022, being equal to the value of the disposal costs, the net assets being disposed of and the amounts held with the Group’s
foreign currency translation reserve in respect of the Russian business which must be reclassified to the income statement on disposal.
Notes to the consolidated accounts
continued
174
Hyve Group plc
Annual Report and Accounts 2022
17 Disposal of subsidiaries and discontinued operations
continued
At the time of the disposal, the ‘Proposed Disposal of Russian Business’ Circular disclosed a present value for the disposal proceeds of £14.6m, while at the same time outlining the risk that earn-out
consideration may be less than envisaged or not received at all. An estimated loss on disposal of £27.5m was disclosed, compared to the final loss on disposal of £38.3m. The difference primarily
relates to the subsequent recognition of the fair value of the deferred consideration receivable at £nil, as detailed above, and the recalculation of the cumulative exchange differences, which, when
recalculated at the disposal date foreign exchange rate, decreased to £24.5m from the £27.2m disclosed in the Circular.
The net assets of the entities disposed of at the date of disposal were as follows:
£000
Goodwill
18,339
Investment in joint venture
2,910
Property, plant and equipment
1,711
Deferred tax asset
1,053
Trade and other receivables
7,891
Cash and cash equivalents
6,405
Trade and other payables
(13,972)
Deferred income
(13,332)
Net assets
11,005
Fair value of consideration received
–
Costs to sell
(2,728)
Proceeds net of related selling expenses
(2,728)
Cumulative exchange differences
(24,539)
Loss on disposal
(38,272)
Satisfied by:
Cash and cash equivalents
–
Deferred and contingent consideration
–
Net cash outflow arising on disposal:
Consideration received in cash and cash equivalents
–
Less: cash and cash equivalents disposed of
(6,405)
(6,405)
During the period, the Group incurred costs to sell of £2.7m in respect of the sale of the Russian business, which are included within the loss on disposal.
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Governance
Financial statements
175
Annual Report and Accounts 2022
Hyve Group plc
17 Disposal of subsidiaries and discontinued operations
continued
In line with the requirements of IFRS 5, the Group’s exit from Russia has been treated as a discontinued operation, as it represents the disposal of a component of the entity, a separate major line
of business and a separate geographical area of business. The Russian business is a separately identifiable reporting segment.
The results of the discontinued operations which have been included in the Consolidated income statement are as follows:
Year ended 30 September 2022
Year ended 30 September 2021
Headline
£000
Adjusting items
(note 5)
£000
Statutory
£000
Headline
£000
Adjusting items
(note 5)
£000
Statutory
£000
Revenue
35,985
–
35,985
27,314
–
27,314
Cost of sales
(17,644)
–
(17,644)
(16,001)
–
(16,001)
Gross profit
18,341
–
18,341
11,313
–
11,313
Administrative expenses
(2,956)
(38,272)
(41,228)
(3,725)
–
(3,725)
Share of (loss)/profit from joint ventures
(176)
35
(141)
120
–
120
Operating profit/(loss)
15,209
(38,237)
(23,028)
7,708
–
7,708
Profit/(loss) before tax
15,209
(38,237)
(23,028)
7,708
–
7,708
Tax on profit/(loss)
(2,556)
(35)
(2,591)
181
–
181
Profit/(loss) from discontinued operations
12,653
(38,272)
(25,619)
7,889
–
7,889
Attributable to:
Owners of the Company
12,653
(38,272)
(25,619)
7,889
–
7,889
Non-controlling interests
–
–
–
–
–
–
12,653
(38,272)
(25,619)
7,889
–
7,889
The comparatives within the income statement have been restated to show the results of this discontinued operation as discontinued in the prior year, as required by IFRS 5.
The share of (loss)/profit from joint ventures relates to the Comtrans joint venture, which had a carrying value of £2.9m on the date of disposal.
The adjusting items include the loss on disposal of the Russian business and the tax credit/(charge) on the share of (loss)/profit from joint ventures.
Ukraine
On 8 August 2022, the Group completed the disposal of its 100% shareholding in Premier Expo and Beautexco LLC in Ukraine to ProExpo (Europe) Limited and Anatoly Sushon, the local management
team. The disposal of the Ukrainian business executes the Group’s strategy to refocus its portfolio towards advanced economies and a de-risked portfolio of events.
The consideration for the sale was structured as earn-out consideration of up to £3.0m payable over a seven-year period. At a time when due to the ongoing conflict in Ukraine no events can be
held, the Group has agreed to support the Ukrainian business with funding of up to £1.2m to be repaid by September 2027, dependent on future profitability. At 30 September 2022, the present value
of the reverse earn-out is £0.4m after payments of £0.2m in August 2022 and £0.5m in September 2022.
A loss on disposal of £8.0m is recognised in the year ended 30 September 2022 as the fair value of the net consideration of £0.5m is lower than the net liabilities being disposed of. The loss on
disposal is after including the amounts held within the Group’s foreign currency translation reserve in respect of the Ukrainian business which must be reclassified to the income statement
on disposal.
Notes to the consolidated accounts
continued
176
Hyve Group plc
Annual Report and Accounts 2022
17 Disposal of subsidiaries and discontinued operations
continued
The net assets of the entities disposed of at the date of disposal were as follows:
£000
Property, plant and equipment
34
Trade and other receivables
467
Cash and cash equivalents
62
Trade and other payables
(687)
Deferred income
(167)
Net liabilities
(291)
Fair value of consideration received
545
Costs to sell
(90)
Proceeds net of related selling expenses
455
Cumulative exchange differences
(8,780)
Loss on disposal
(8,034)
Satisfied by:
Cash and cash equivalents
(250)
Deferred contingent consideration
795
545
Net cash outflow arising on disposal:
Net consideration paid in cash and cash equivalents
(250)
Less: cash and cash equivalents disposed of
(62)
(312)
During the period, the Group incurred costs to sell of £0.1m in respect of the sale of the Ukrainian business, which are included within the loss on disposal.
Deferred contingent consideration includes £1.7m of deferred contingent consideration receivable arising on disposal and the deferred reverse earn-out of (£0.9m) at net present value.
Strategic report
Governance
Financial statements
177
Annual Report and Accounts 2022
Hyve Group plc
17 Disposal of subsidiaries and discontinued operations
continued
In line with the requirements of IFRS 5, the Group’s exit from Ukraine has been treated as a discontinued operation, as it represents the disposal of a component of the entity, a separate major line
of business and a separate geographical area of business.
The results of the discontinued operations which have been included in the Consolidated income statement are as follows:
Year ended 30 September 2022
Year ended 30 September 2021
Headline
£000
Adjusting items
(note 5)
£000
Statutory
£000
Headline
£000
Adjusting items
(note 5)
£000
Statutory
£000
Revenue
1,165
–
1,165
2,911
–
2,911
Cost of sales
(1,241)
–
(1,241)
(2,120)
–
(2,120)
Gross (loss)/profit
(76)
–
(76)
791
–
791
Administrative expenses
(586)
(8,034)
(8,620)
(963)
–
(963)
Operating loss
(662)
(8,034)
(8,696)
(172)
–
(172)
Loss before tax
(662)
(8,034)
(8,696)
(172)
–
(172)
Tax on loss
(193)
–
(193)
205
–
205
(Loss)/profit from discontinued operations
(855)
(8,034)
(8,889)
33
–
33
Attributable to:
Owners of the Company
(855)
(8,034)
(8,889)
33
–
33
Non-controlling interests
–
–
–
–
–
–
(855)
(8,034)
(8,889)
33
–
33
The comparatives within the income statement have been restated to show the results of this discontinued operation as discontinued in the prior year, as required by IFRS 5.
The adjusting items are the loss on disposal of the Ukrainian business.
Turkey
On 5 October 2022, the Group announced the disposal of its Turkish business to ICA (JV) Ltd, the previous buyer of the portfolio of events in Central Asia with significant experience in the events
industry. The disposal of the Turkish business executes the Group’s strategy to refocus its portfolio towards advanced economies and a de-risked portfolio of events.
In order to be recognised as a disposal group held for sale, IFRS 5 Non-current Assets Held for Sale and Discontinued Operations requires the business to be available for immediate sale in its
present condition, subject only to terms that are usual and customary for sales of such assets, and the sale must be highly probable.
The Group has considered how advanced the disposal was at 30 September 2022 and concluded that the relevant criteria for recognition as held for sale have been met as at this date. The Turkish
business was available for immediate sale and the sale was highly probable at the reporting date. This conclusion has subsequently been supported by the conditional sale agreement signed on
4 October 2022 and the completion of the disposal of the Turkish business on 24 October 2022.
IFRS 5 requires the disposal group held for sale to be measured at the lower of its carrying value and fair value less costs to sell. The fair value of the disposal group is deemed to be the present
value of the expected consideration of £4.0m (the undiscounted value of the expected consideration is £8.0m). As the fair value less costs to sell of the disposal group exceeds the carrying value
of the disposal group of £0.1m, at 30 September 2022, the disposal group was held at carrying value and comprised the below assets and liabilities.
Notes to the consolidated accounts
continued
178
Hyve Group plc
Annual Report and Accounts 2022
17 Disposal of subsidiaries and discontinued operations
continued
£000
Property, plant and equipment
46
Trade and other receivables
1,404
Cash and cash equivalents
1,513
Total assets classified as held for sale
2,963
Trade and other payables
(1,701)
Deferred income
(1,153)
Total liabilities classified as held for sale
(2,854)
Net assets classified as held for sale
109
In line with the requirements of IFRS 5, the Group’s exit from Turkey has been treated as a discontinued operation, as it represents the disposal of a component of the entity, a separate major line
of business and a separate geographical area of business.
The results of the discontinued operations which have been included in the Consolidated income statement are as follows:
Year ended 30 September 2022
Year ended 30 September 2021
Headline
£000
Adjusting items
(note 5)
£000
Statutory
£000
Headline
£000
Adjusting items
(note 5)
£000
Statutory
£000
Revenue
7,677
–
7,677
3,154
–
3,154
Cost of sales
(4,880)
–
(4,880)
(2,822)
–
(2,822)
Gross profit
2,797
–
2,797
322
–
322
Administrative expenses
(1,201)
–
(1,201)
(1,007)
–
(1,007)
Operating profit/(loss)
1,596
–
1,596
(675)
–
(675)
Net monetary loss arising from hyperinflationary economies
(362)
–
(362)
–
–
–
Profit/(loss) before tax
1,234
–
1,234
(675)
–
(675)
Tax on profit/(loss)
(138)
–
(138)
(11)
–
(11)
Profit/(loss) from discontinued operations
1,096
–
1,096
(686)
–
(686)
Attributable to:
Owners of the Company
1,096
–
1,096
(686)
–
(686)
Non-controlling interests
–
–
–
–
–
–
1,096
–
1,096
(686)
–
(686)
The comparatives within the income statement have been restated to show the results of this discontinued operation as discontinued in the prior year, as required by IFRS 5.
The £0.4m net monetary loss arising from hyperinflationary economies is due to £0.2m of losses resulting from the restatement of the monthly results of the Turkish business and £0.2m of losses
resulting from the restatement of non-monetary assets and liabilities. Please refer to note 2 for further details on hyperinflation accounting. Operating loss from discontinued operations in the
consolidated cash flow statement of £30.5m includes £0.4m of net monetary loss arising from hyperinflationary economies.
Strategic report
Governance
Financial statements
179
Annual Report and Accounts 2022
Hyve Group plc
17 Disposal of subsidiaries and discontinued operations
continued
The discontinued operations for the year ended 30 September 2021 also include the results of the Central Asian division until the disposal in April 2021. In the year ended 30 September 2021,
the Central Asian division contributed a loss of £4.4m.
The earnings per share from the Group’s discontinued operations are as follows:
Year ended 30 September 2022
Year ended 30 September 2021
Headline
Adjusting items
(note 5)
Statutory
Headline
Adjusting items
(note 5)
Statutory
Earnings per share from discontinued operations (pence)
Operating profit/(loss) from discontinued operations
16,143
(46,271)
(30,128)
6,136
(3,616)
2,520
Profit/(loss) from discontinued operations
12,894
(46,306)
(33,412)
6,413
(3,604)
2,809
Basic
4.5
(11.6)
2.4
1.0
Diluted
4.5
(11.6)
2.4
1.0
ABEC
On 12 November 2021, the Group completed the disposal of its 60% shareholding in ABEC, the operating company for a portfolio of exhibitions in India including the Acetech constructions events.
The Group received upfront consideration of £1.0m in respect of the disposal. The business was sold to the previous minority shareholders. The goodwill arising from the acquisition of ABEC was
fully impaired in the year ended 30 September 2020. As a result, the net book value of goodwill on the date of disposal was £nil (see note 12). The Group’s disposal of ABEC is not treated as a
discontinued operation because the disposal did not meet the IFRS 5 criteria: the disposal of a separate major line of business or a separate geographical area of business.
The net assets of the entity disposed of at the date of disposal were as follows:
£000
Net liabilities
(686)
Fair value of consideration received
974
Proceeds net of related selling expenses
974
Non-controlling interest
(978)
Cumulative exchange differences
2,458
Profit on disposal
3,140
Net cash outflow arising on disposal:
Consideration received in cash and cash equivalents
974
Less: cash and cash equivalents disposed of
(2,059)
(1,085)
Debindo
On 23 June 2022, the Group disposed of its 50% interest in the joint venture PT Debindo International Trade and Exhibitions in Indonesia. The Group received upfront consideration of £0.5m in respect
of the disposal. A gain on disposal of £0.8m is recognised in the year ended 30 September 2022 as the fair value of the net consideration of £1.0m is higher than the net assets being disposed of
following the impairment of the Group’s investment in the joint venture in the year ended 30 September 2022. The Group’s disposal of Debindo is not treated as a discontinued operation because
the disposal did not meet the IFRS 5 criteria: the disposal of a separate major line of business or a separate geographical area of business.
During the period the Group incurred costs to sell of £0.2m in respect of the disposal of Debindo, which are included within the loss on disposal.
Notes to the consolidated accounts
continued
180
Hyve Group plc
Annual Report and Accounts 2022
17 Disposal of subsidiaries and discontinued operations
continued
£000
Net assets
–
Fair value of consideration received
986
Costs to sell
(152)
Proceeds net of related selling expenses
834
Profit on disposal
834
Net cash inflow arising on disposal:
Consideration received in cash and cash equivalents
535
Less: cash and cash equivalents disposed of
–
535
18 Interests in joint ventures
Country of incorporation and operation
Registered address
Principal activity
Description
of holding
Group interest
%
Joint ventures
Sinostar ITE
Incorporated in Hong Kong with
operations in China
Rm 2101-2, 21/F, 42-46 Gloucester Rd., Jubilee Centre, Wanchai, Hong Kong
Exhibition organiser
Ordinary
50%
Total
£000
At 1 October 2021
37,126
Share of results of joint ventures
(732)
Share of results of joint ventures from discontinuing operations
(141)
Dividends received
(200)
Foreign exchange
52
Disposal
(2,910)
At 30 September 2022
33,195
In the year ended 30 September 2022, the interests in the Debindo and Comtrans joint ventures were disposed of as detailed in note 17. The carrying value of the investment in Debindo on the
date of disposal was £nil because the investment was fully impaired in the year ended 30 September 2020. The carrying value of the investment in Comtrans on the disposal date was £2.9m.
The Group received dividends from Sinostar of approximately £0.2m (2021: £2.0m). In 2022, no dividends were received from Debindo (2021: £nil) or Comtrans (2021: £nil).
The cancellation of Sinostar’s event in the year is an impairment indicator and as a result the carrying value of interests in joint ventures has been assessed for impairment at the year end.
The recoverable amount of the investment was determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the joint venture’s cash flow
forecasts, long-term growth rates and discount rates applied to the forecast cash flows. Assumptions are consistent with those applied in the goodwill and intangible assets impairment review
detailed in note 12. No impairments were identified in respect of the joint venture.
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Governance
Financial statements
181
Annual Report and Accounts 2022
Hyve Group plc
18 Interests in joint ventures
continued
Summarised financial information in respect of the Group’s material joint ventures is set out
below. The sole material joint venture is Sinostar ITE. The summarised financial information
below represents amounts in the joint ventures’ financial statements prepared in accordance
with IFRS.
Results of material joint venture at 100% share
2022
£000
2021
£000
Cash and cash equivalents
8,419
11,982
Current assets
1,450
1,674
Non-current assets
256
213
Total assets
10,125
13,869
Current liabilities
(11,556)
(12,779)
Non-current liabilities
(48,707)
(39,872)
Total liabilities
(60,263)
(52,651)
Net liabilities
(50,138)
(38,782)
Revenue
220
7,575
Interest income
127
77
Depreciation and amortisation
228
237
(Loss)/profit from continuing operations
(1,913)
3,760
Tax credit/(expense)
451
(886)
(Loss)/profit from continuing operations after tax
(1,462)
2,874
Total comprehensive (expense)/income
(1,462)
2,874
The Group holds a 50% interest in the joint venture and recorded a total comprehensive expense
of £0.7m (2021: income of £1.4m) in the consolidated income statement.
A reconciliation of the above summarised financial information to the carrying amount of the
interest in the material joint venture in the Consolidated financial statements is shown below:
2022
£000
2021
£000
Net liabilities
(50,138)
(38,782)
Proportion of the Group’s ownership in the joint venture
(25,069)
(19,391)
Loan due to shareholders
24,354
19,909
Goodwill
33,910
33,556
Carrying amount of the Group’s interest in the joint venture
33,195
34,074
The loan due to shareholders forms part of the net investment in the joint venture. The movement
in goodwill is due to the effects of changes in foreign exchange rates.
The Group’s non-material joint ventures have an aggregate loss after tax from discontinuing
operations and total comprehensive income of £0.3m (2021: £0.2m profit after tax), at a
100% share.
19 Current assets and non-current assets
Current assets
2022
£000
2021
£000
Trade and other receivables
Trade receivables
27,500
20,333
Other receivables
1,373
1,602
Deferred and contingent consideration receivable
1,899
2,443
Prepayments
10,000
11,122
Taxation and social security
–
69
40,772
35,569
Taxation prepayments
2,174
1,818
Derivative financial assets
152
–
Taxation prepayments relate to overseas subsidiaries and are available for offset against future
tax liabilities.
Prepayments include £8.6m (2021: £9.6m) of prepaid events costs to fulfil the Group’s contracts
with its customers.
In the prior year, other receivables included amounts due to ABEC and the Russian business
totalling £0.8m. As a result of the disposal of these businesses in the year, the other debtors
balance reduced by £0.8m.
Notes to the consolidated accounts
continued
182
Hyve Group plc
Annual Report and Accounts 2022
19 Current assets and non-current assets
continued
The movements in deferred and contingent consideration receivable during the year are shown
in the table below:
£000
At 30 September 2020
8,143
Arising on disposal (note 17)
3,085
Consideration received
(335)
Unwind of imputed interest credit on discounted deferred and contingent
consideration receivable
1,594
Revaluation of deferred and contingent consideration receivable
– Modification of deferred and contingent consideration receivable
(3,114)
– Revaluation
297
– Foreign exchange
130
At 30 September 2021
9,800
Arising on disposal (note 17)
2,105
Consideration received
(2,508)
Unwind of imputed interest credit on discounted deferred and contingent
consideration receivable
1,652
Revaluation of deferred and contingent consideration receivable
– Revaluation
(927)
– Foreign exchange
(123)
Impairment
(778)
Foreign exchange
42
At 30 September 2022
9,263
Included in non-current assets
7,364
Included in current assets
1,899
9,263
Cash and cash equivalents
2022
£000
2021
£000
Cash at bank and in hand
28,068
41,733
The cash at bank and in hand comprises cash held by the Group and short-term deposits with
an original maturity of three months or less. The carrying value of these assets approximates
their fair value. The cash balance is represented by £2.7m of sterling, £10.4m of US dollars,
£2.5m of euro, £6.1m of Chinese yuan, £5.8m of Indian rupees and £0.6m of other currencies.
Surplus funds are placed on short-term deposit with floating interest rates.
20 Bank borrowings
2022
£000
2021
£000
Total drawdowns under debt facility
(101,000)
(124,423)
Capitalised refinancing fees
1,899
2,823
Bank loans
(99,101)
(121,600)
Included in current liabilities
(6,000)
(11,751)
Included in non-current liabilities
(93,101)
(109,849)
(99,101)
(121,600)
In December 2021, the Group amended and restated its debt facilities agreement to
accommodate for the change of base rate from LIBOR to SONIA.
At 30 September 2022, the Group had total available facilities of £201.0m (2021: £212.8m),
comprising a revolving credit facility of £150.0m (2021: £150.0m) and a term loan of £51.0m (2021:
£62.8m). During the year, term loan repayments of £11.8m were made including mandatory
payment of 50% of insurance proceeds subsequent to the Group receiving more than £82.5m
of proceeds in total.
At 30 September there were scheduled repayments of the term loan of £6.0m in November
2022, £22.5m in November 2023 and a final repayment of £22.5m on the termination date in
December 2023. As a result, £6.0m of the drawn debt was included in current liabilities.
Interest was charged on any utilised amount at a rate of SONIA plus 3.40% margin. The debt
facility was secured by asset pledges and debentures given by a number of Group companies.
At 30 September 2022, the Group had total drawn amounts under the debt facility agreement
of £101.0m (2021: £124.4m), all of which were denominated in sterling, and had £100.0m (2021:
£88.4m) of undrawn committed facilities.
On 10 October 2022, the Group’s interest rate swap contract was terminated in line with the
requirements of the new senior facilities agreement. At 30 September 2022, the notional amount
hedged was £32.5m (2021: £41.3m). Please refer to note 23 for further information.
As at 30 September 2022, there were capitalised fees of £1.9m (2021: £2.8m) in relation to the
Group’s debt facility.
Strategic report
Governance
Financial statements
183
Annual Report and Accounts 2022
Hyve Group plc
20 Bank borrowings
continued
In response to the COVID-19 outbreak, the Group obtained waivers for the leverage ratio and
interest cover covenants on its debt facilities up to and including March 2022, replacing them
with a minimum liquidity test, whereby the Group had to ensure that the aggregate of cash and
undrawn debt facilities was not less than £40.0m at the end of each month, except between April
and October 2021 being not less than £30.0m. In the year ended 30 September 2022, the Group
secured an extension of the covenant waivers up to and including March 2023 with the same
minimum liquidity test remaining in place.
Subsequent to the period end, in October 2022 the Group completed the refinancing of its debt.
New debt facilities totalling £135.0m were signed comprising a £115.0m term loan and a £20.0m
super senior revolving recredit facility (‘SSRCF’). The new debt facilities replaced the Group’s
previous debt facilities, and so the £101.0m drawn debt as at 30 September 2022 was repaid in
full on 20 October 2022 when the new term loan of £115.0m was fully drawn on the same date.
The voluntary repayment of the drawn debt is a non-adjusting event in accordance with IAS 10
and, other than the £6.0m due in November 2022, the previous loan was classified as a non-
current liability under the repayment terms of the previous debt facility.
The £115.0m term loan is provided by certain funds and accounts of HPS Investment Partners,
LLC or subsidiaries or affiliates thereof and is repayable over the next four years. Interest is
initially payable at a rate of 7.75% over SONIA subject to a margin ratchet, with a margin range
of 7.5% to 8.0% over SONIA.
The £20.0m SSRCF is provided by HSBC UK Bank PLC and is available over the next three years
and nine months. Interest is initially payable on drawn amounts at 3.5% over SONIA, subject to a
margin ratchet, with a margin range of 2.5% to 3.5% over SONIA, with a commitment fee of 35%
payable on undrawn amounts.
With the previous facility having been due to expire in December 2023, this provides significant
additional financial security for the Group until October 2026.
The Group’s banking covenants include a monthly £21.0m minimum liquidity covenant up to
and including August 2023 before reverting to a quarterly leverage ratio from September 2023.
Details of the quarterly leverage test are presented below:
Adjusted net debt must be less than 4.4x adjusted EBITDA across the last 12 months for the
quarter ending 30 September 2023.
Adjusted net debt must be less than 4.2x adjusted EBITDA across the last 12 months for the
quarter ending 31 December 2023.
Adjusted net debt must be less than 3.0x adjusted EBITDA across the last 12 months for all
subsequent quarters until the expiry of the facility.
21 Current liabilities and non-current liabilities
Current liabilities
2022
£000
2021
£000
Trade payables
2,838
1,324
Taxation and social security
1,764
837
Other payables
9,744
10,833
Accruals
26,772
25,489
Deferred and contingent consideration payable
18,648
835
Lease liabilities (note 27)
3,420
3,347
63,186
42,665
Deferred income
57,973
72,277
– Current
57,769
72,277
– Non-current
204
–
Trade payables and accruals principally comprise amounts outstanding for trade purchases and
ongoing costs. The Directors consider that the carrying value of trade payables approximates
their fair value.
During the year ended 30 September 2022, £58.7m (2021: £27.1m) of the deferred income
balance of £72.3m at 30 September 2021 (£61.3m at 30 September 2020) was recognised as
revenue in the consolidated income statement. This was lower than the balance of deferred
income included in current liabilities at 30 September 2021 as a result of event cancellations
and postponements.
Other payables include refund liabilities in respect of cancelled events of £4.8m (2021: £7.4m).
Notes to the consolidated accounts
continued
184
Hyve Group plc
Annual Report and Accounts 2022
21 Current liabilities and non-current liabilities
continued
The movements in deferred and contingent consideration payable during the year are shown in
the table below:
Total
£000
At 1 October 2020
881
Arising on acquisition
3,440
Consideration paid
(4,693)
Revaluation of deferred and contingent consideration payable
1,350
Foreign exchange
(143)
At 30 September 2021
835
Arising on acquisition (note 13)
44,268
Arising on disposal
23
Consideration paid (notes 13 and 17)
(7,692)
Unwind of imputed interest charged on discounted deferred and contingent
consideration payable
5,494
Revaluation of deferred and contingent consideration payable
6,783
Foreign exchange
8,328
At 30 September 2022
58,039
Included in non-current liabilities
39,391
Included in current liabilities
18,648
58,039
22 Provisions
National
Insurance on
share options
£000
Dilapidations
£000
Total
£000
At 1 October 2021
45
1,355
1,400
Increase in the year
–
100
100
Credited to the income statement
(13)
–
(13)
Foreign exchange
–
195
195
At 30 September 2022
32
1,650
1,682
Included in current liabilities
100
Included in non-current liabilities
1,582
1,682
National Insurance on share options is calculated by reference to the employer’s National
Insurance cost on the potential gain based on the difference between the exercise price and
share price for those share options where the share price exceeds the exercise price at
30 September 2022.
The amounts included in respect of dilapidations provisions will be fully utilised by the end of the
lease term in 2028 with the exception of a £0.1m dilapidations provision in respect of an expired
lease expected to be utilised in the next 12 months. The dilapidations are based on the most likely
amount for settlement.
Strategic report
Governance
Financial statements
185
Annual Report and Accounts 2022
Hyve Group plc
23 Financial instruments
Financial assets and liabilities
Details of the accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect
of each class of financial asset and financial liability, are disclosed in the accounting policies note on pages 151 to 153.
Categories and maturities of financial assets and liabilities
Financial assets and liabilities are classified according to the following categories in the table below.
30 September 2022
£000
Carrying
amount and
fair value
Contractual
cash flows
Less than
1 year
1–2 years
2–5 years
Greater than
5 years
Non-derivative financial assets
Cash and cash equivalents
28,068
28,068
28,068
–
–
–
Trade and other receivables:
Trade receivables
27,500
30,002
30,002
–
–
–
Deferred and contingent consideration receivable
9,263
17,219
2,264
3,613
11,342
–
Other receivables
1,373
1,373
1,373
–
–
–
Derivative financial
assets
Interest rate swap
152
152
152
–
–
–
66,356
76,814
61,859
3,613
11,342
–
Non-derivative financial liabilities
Bank loans
(99,101)
(101,000)
(101,000)
–
–
–
Amortised cost:
Trade payables
(2,838)
(2,838)
(2,838)
–
–
–
Other payables
(9,744)
(9,744)
(9,744)
–
–
–
Accruals
(26,772)
(26,772)
(26,772)
–
–
–
Deferred and contingent consideration payable
(58,039)
(73,580)
(20,785)
(25,483)
(27,312)
–
Lease liabilities
(15,249)
(16,843)
(3,420)
(3,066)
(8,662)
(1,695)
(211,743)
(230,777)
(164,559)
(28,549)
(35,974)
(1,695)
In the year, the Group minimised the effects of interest rate risk by using derivative financial instruments to hedge the risk exposure. The use of financial derivatives is governed by the Group’s
policies approved by the Board. Compliance with policies and exposure limits is reviewed by the Board on a continuous basis. The Group does not enter into financial instruments, including
derivative financial instruments, for speculative purposes.
The Directors consider that the carrying amounts of financial assets and liabilities recorded at amortised cost in the financial statements approximate to their fair value due to the short maturity
of the instruments.
Notes to the consolidated accounts
continued
186
Hyve Group plc
Annual Report and Accounts 2022
23 Financial instruments
continued
30 September 2021
£000
Carrying
amount and
fair value
Contractual
cash flows
Less than
1 year
1–2 years
2–5 years
Greater than
5 years
Non-derivative financial assets
Cash and cash equivalents
41,733
41,733
41,733
–
–
–
Trade and other receivables:
Trade receivables
20,333
21,886
21,886
–
–
–
Deferred and contingent consideration receivable
9,800
16,661
2,669
2,400
8,648
2,944
Other receivables
1,602
1,602
1,602
–
–
–
73,468
81,882
67,890
2,400
8,648
2,944
Non-derivative financial liabilities
Bank loan and overdrafts
(121,600)
(121,600)
(11,751)
(6,000)
(103,849)
–
Amortised cost:
Trade payables
(1,324)
(1,324)
(1,324)
–
–
–
Other payables
(10,833)
(10,833)
(10,833)
–
–
–
Accruals
(25,489)
(25,489)
(25,489)
–
–
–
Deferred and contingent consideration payable
(835)
(835)
(835)
–
–
–
Lease liabilities
(16,722)
(18,788)
(3,348)
(3,137)
(8,157)
(4,146)
Derivative financial liabilities
Equity option liabilities
–
–
–
–
–
–
Interest rate swaps
(85)
(85)
(73)
(12)
–
–
(176,888)
(178,954)
(53,653)
(9,149)
(112,006)
(4,146)
Fair value hierarchy
The following table categorises the Group’s financial instruments which are held at fair value into one of three levels to reflect the degree to which observable inputs are used in determining their
fair values:
Level 1: Fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Fair value measured using inputs, other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly.
Level 3: Fair values measured using inputs for the asset or liability that are not based on observable market data.
Strategic report
Governance
Financial statements
187
Annual Report and Accounts 2022
Hyve Group plc
23 Financial instruments
continued
30 September 2022
Fair value
£000
Level 1
£000
Level 2
£000
Level 3
£000
Assets measured at fair value
Interest rate swaps
152
–
152
–
Deferred and contingent consideration
9,263
–
–
9,263
Total
9,415
–
152
9,263
Liabilities measured at fair value
Deferred and contingent consideration
(58,039)
–
–
(58,039)
Total
(58,039)
–
–
(58,039)
30 September 2021
Fair value
£000
Level 1
£000
Level 2
£000
Level 3
£000
Assets measured at fair value
Deferred and contingent consideration
9,800
–
–
9,800
Total
9,800
–
–
9,800
Liabilities measured at fair value
Interest rate swaps
(85)
–
(85)
–
Deferred and contingent consideration
(835)
–
–
(835)
Total
(920)
–
(85)
(835)
Level 1 financial instruments are valued based on quoted bid prices in an active market. Level 2
financial instruments are measured by discounted cash flow. For interest rate swaps, future cash
flows are estimated based on forward interest rates (from observable yield curves at the end of
the reporting period) and contract interest rates, discounted at a rate that reflects the credit risk
of the various counterparties.
Deferred and contingent consideration payable or receivable balances are classified as level 3
financial instruments and recognised at fair value.
All level 3 amounts credited to the Consolidated income statement in the year are attributable to
the change in unrealised gains or losses relating to those assets and liabilities held at the end of
the reporting period.
Financial risk management
In the course of its business, the Group is exposed to a number of financial risks: market risk
(including foreign currency and interest rate), credit risk, liquidity risk and capital risk. This note
presents the Group’s exposure to each of the above risks. The Group’s objectives, policies and
processes for measuring and managing risks can be found in the Strategic report on pages 1
to 71.
The Board has overall responsibility for the establishment and oversight of the Group’s risk
management framework. The Board has established policies to identify and analyse risks faced
by the Group, to set appropriate risk limits and controls and to monitor risks and adherence
to limits.
Market risk management
Market risk is the risk that changes in foreign exchange rates and interest rates will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters,
while optimising the return on risk.
The Group’s activities expose it primarily to the financial risks of changes in foreign currency
exchange rates and interest rates. The Group enters into derivative financial instruments
to manage its exposure to interest rate risk. Market risk exposures are measured using
sensitivity analysis.
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies and therefore
exposures to exchange rate fluctuations arise. Exchange rate exposures are managed through
natural hedging arrangements where possible.
The carrying amounts of the Group’s foreign currency denominated monetary assets and
monetary liabilities at the reporting date are as follows:
Notes to the consolidated accounts
continued
188
Hyve Group plc
Annual Report and Accounts 2022
23 Financial instruments
continued
Financial assets
2022
£000
2021
£000
EUR
2,089
6,150
GBP
26,994
20,772
USD
19,683
8,241
RUB
–
14,602
INR
6,082
9,751
Other
11,508
13,952
66,356
73,468
Financial liabilities
2022
£000
2021
£000
EUR
357
(11,920)
GBP
131,465
148,870
USD
72,947
10,409
RUB
24
4,364
INR
644
21,610
Other
6,307
3,555
211,744
176,888
Foreign currency sensitivity analysis
The sensitivity analysis below details the impact of a 10% strengthening in the Group’s significant
currencies against sterling, applied to the net monetary assets or liabilities of the Group. 10% is
the sensitivity rate that represents management’s assessment of the reasonably possible change
in foreign exchange rates.
2022 (£000)
USD
EUR
RUB
INR
Other
Total
Monetary assets
19,683
2,089
–
6,082
38,502
66,356
Monetary liabilities
(72,947)
(357)
(24)
(644)
(137,771)
(211,743)
Net monetary assets/(liabilities)
(53,264)
1,732
(24)
5,438
(99,269) (145,387)
Currency impact
Profit before tax gain/(loss)
(2,079)
200
–
1
(330)
(2,208)
Equity gain
(2,757)
(27)
–
562
874
(1,348)
2021 (£000)
USD
EUR
RUB
INR
Other
Total
Monetary assets
8,241
6,150
14,603
9,751
34,724
73,469
Monetary liabilities
(10,409)
11,920
(4,364)
(21,610)
(152,425)
(176,888)
Net monetary (liabilities)/assets
(2,168)
18,070
10,239
(11,859)
(117,701)
(103,419)
Currency impact
Profit before tax (loss)/gain
240
459
879
(1,864)
(382)
(668)
Equity gain/(loss)
(25)
1,348
260
684
1,103
3,370
The following significant exchange rates versus sterling applied during the year and in the
prior year:
Average
Reporting date
2022
2021
2022
2021
EUR
1.18
1.14
1.12
1.16
USD
1.28
1.37
1.09
1.35
RUB
93.08
101.95
63.11
98.13
INR
98.02
100.63
89.23
99.98
Interest rate risk management
As the Group has no significant interest-bearing assets, other than cash, the Group’s income
and operating cash flows are substantially independent of changes in market interest rates. The
Group is exposed to interest rate risk through its borrowings at floating interest rates. This risk is
managed by the Group by maintaining an appropriate level of floating interest rate borrowings
and through the use of interest rate swap contracts. Hedging activities are evaluated regularly to
align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging
strategies are applied.
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in
the liquidity risk section of this note.
Strategic report
Governance
Financial statements
189
Annual Report and Accounts 2022
Hyve Group plc
23 Financial instruments
continued
Interest structure of financial liabilities
2022
£000
2021
£000
Financial liabilities at variable rates:
Bank loan and overdrafts
99,101
121,600
The following average interest rates applied on the Group’s bank loan during the year and in the prior year:
2022
%
2021
%
GBP
5.2
3.3
EUR
0.0
0.0
USD
0.0
0.0
Average interest rates applicable to cash balances were 0.90% in 2022 and 0.39% in 2021.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to interest rates for financial assets and financial liabilities at the balance sheet date. With all other variables held
constant, the table below demonstrates the sensitivity to a 1% change in interest rates applied to the major currencies of net variable rate assets/liabilities. 1% is the sensitivity rate that represents
management’s assessment of the reasonably possible change in interest rates.
£000
USD denominated
EUR denominated
GBP denominated
RUB denominated
INR denominated
Other
Total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Cash and cash equivalents
10,238
5,456
1,677
5,508
2,282
10,754
–
3,739
5,770
4,890
8,102
11,386
28,068
41,733
Bank loan and overdrafts
–
–
–
–
(99,101)
(121,600)
–
–
–
–
–
–
(99,101)
(121,600)
Net variable rate assets/(liabilities)
10,238
5,456
1,677
5,508
(96,819)
(110,846)
–
3,739
5,770
4,890
8,102
11,386
(71,033)
(79,867)
£000
USD denominated
EUR denominated
GBP denominated
RUB denominated
INR denominated
Other denominated
Total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Profit before tax – gain/(loss)
+ 1% change in interest rates
102
55
17
55
(968)
(1,108)
–
37
58
49
81
114
(710)
(798)
– 1% change in interest rates
(102)
(55)
(17)
(55)
968
1,108
–
(37)
(58)
(49)
(81)
(114)
710
798
Interest rate swap contracts
Following the Group’s refinancing in December 2019 and with effect from 28 February 2020, the Group entered into two interest rate swap agreements to exchange the floating rate of interest
paid on its bank borrowings for fixed rates on further notional principal amounts of £38.0m and £32.0m, increasing the total notional principal amount to £100.0m of the Group’s GBP debt up
until 30 November 2020. Under these agreements, three-month GBP LIBOR was exchanged for fixed rates of 0.59% and 0.60% both with a maturity date of 30 November 2022.
Notes to the consolidated accounts
continued
190
Hyve Group plc
Annual Report and Accounts 2022
23 Financial instruments
continued
On 10 October 2022, the Group’s interest rate swap contract was terminated in line with the
requirements of the new senior facilities agreement. At 30 September 2022, the notional amount
hedged was £32.5m (2021: £41.3m).
When the Group’s debt facilities transitioned to the SONIA rate at the point of the cessation of the
impacted LIBOR rate, the Group transitioned its interest rate swap arrangements to the SONIA
rate to continue to appropriately hedge its interest rate risk.
Credit risk management
Credit risk arises because a counterparty may fail to perform its contractual obligations. The
Group’s principal financial assets are cash and cash equivalents, trade and other receivables
and deferred and contingent consideration receivable. The Group considers its maximum
exposure to credit risk to be as follows:
2022
£000
2021
£000
Cash and cash equivalents
28,068
41,733
Trade receivables (net of bad debt provision)
27,500
20,668
Deferred and contingent consideration (undiscounted)
17,219
16,661
Other receivables
1,373
1,602
74,160
80,664
The Group’s credit risk is primarily attributable to its trade and other receivables. The Group has
adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the
risk of financial loss from defaults. The Group’s objective is to ensure all customers have paid
before any service is provided to them. The concentration of credit risk is limited due to the
customer base being large and unrelated.
The ageing profile of the Group’s trade receivables and the details of the Group’s allowances for
doubtful receivables can be seen below.
The credit risk on liquid funds arises due to where the liquid funds are held. The territories in
which Hyve operates do not always have banks with high credit ratings assigned by international
credit rating agencies such as Moody’s and Fitch. The Group aims to minimise the exposure to
credit risk by minimising the level of cash held in such banks. The Group’s exposure and credit
ratings of its counterparties are continuously monitored and the aggregate value of transactions
concluded is spread among approved financial institutions.
Credit rating of financial assets (excluding loans and receivables)
2022
£000
2021
£000
Investments grade A and above
73%
20,597
33,383
Investments grade B and above
27%
7,471
8,350
Investments grade C or below or not rated
0%
–
–
100%
28,068
41,733
The sources of the credit ratings are Moody’s and Fitch.
Ageing profile of trade receivables based on event date
2022
£000
2021
£000
Not past due
27,500
20,053
Past due 1-30 days
–
280
Past due 31-60 days
–
–
Past due 61-90 days
–
–
Past due 91-120 days
–
–
Past due more than 120 days
–
–
27,500
20,333
Management reviews debtors based on when an event has been held. The Group invoices
on receipt of signed contracts, with payments typically due in stages in the lead up to events.
Any overdue amounts, after the stage payment due date, are reviewed and chased.
Trade receivables not past due represent contracts with customers for future events. It therefore
includes receivables for events taking place in 2023. Customers are typically due to settle the full
contractual amount at least 30 days before an event.
The trade receivables amounts presented in the Consolidated statement of financial position
are net of allowances for doubtful receivables, estimated by the Group’s management based on
prior experience, specific credit issues and its assessment of the current economic environment.
Trade receivables consist of a large number of customers spread across diverse industries and
geographical areas, and the Group’s exposure to credit risk is influenced mainly by the individual
characteristics of each customer. The demographics of the Group’s customer base, including
default risk of the industry and country in which the customers operate, have less of an influence
on credit risk.
Strategic report
Governance
Financial statements
191
Annual Report and Accounts 2022
Hyve Group plc
23 Financial instruments
continued
The Group always recognises lifetime ECL for trade receivables. The ECL on these financial
assets are estimated using a provision matrix based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the debtors, general economic conditions
and an assessment of both the current as well as the forecast direction of conditions at the
reporting date, including time value of money where appropriate.
The details of the movement in the allowance for doubtful receivables are shown below.
Allowance for doubtful receivables
2022
£000
2021
£000
At 1 October
1,553
4,223
Allowances made in the period and amounts recovered during the
year
1,174
(592)
Receivables written off as unrecoverable
(225)
(2,078)
2,502
1,553
The lifetime ECL recognised in the period materially relate to receivables in respect of events that
have taken place in the period. The Group no longer expects to recover these debts due to the
current economic climate following the pandemic and the passage of time since these events
took place.
Ageing of impaired receivables
2022
£000
2021
£000
Past due 0-3 months
989
359
Past due 3-6 months
253
–
Past due more than 6 months
1,260
1,194
2,502
1,553
Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its obligations as they fall due.
Such risk may result from inadequate market depth or disruption or refinancing problems.
Ultimate responsibility for liquidity risk management rests with the Board of Directors.
They have built an appropriate liquidity risk management framework for the management of
the Group’s short, medium and long-term funding and liquidity management requirements.
The Group manages liquidity risk by ensuring continuity of funding for operational needs
through cash deposits and debt facilities as appropriate. The Group does not use any supplier
financing arrangements.
The Group’s principal source of borrowings is provided through its debt facilities which
comprised a revolving credit facility of £150.0m (2021: £150.0m) and a term loan of £51.0m
(2021: £62.8m) at 30 September 2022. Subsequent to the period end, in October 2022 the
Group completed the refinancing of its debt. New debt facilities totalling £135.0m were signed
comprising a £115.0m term loan and a £20.0m SSRCF. The new debt facilities replace the
Group’s previous debt facilities, and so the £101.0m drawn debt as at 30 September 2022 was
repaid in full on 20 October 2022 when the new term loan of £115.0m was fully drawn on the
same date.
In the financial year, the Group obtained waivers for the leverage ratio and interest cover
covenants on its debt facilities up to and including March 2023, replacing them with a minimum
liquidity test, whereby the Group must ensure that the aggregate of cash and undrawn debt
facilities is not less than £40m.
As disclosed in the going concern and viability statements on pages 69 to 71, the Group’s
long-term projections have been reviewed against the Group’s banking covenants under the
terms of the new senior debt facilities. Based on the various scenarios considered, the Group is
expected to have material available liquidity throughout the five-year viability period and have
headroom under the minimum liquidity covenant test.
Since the outbreak of COVID-19, management has taken significant action to strengthen the
Group’s liquidity position and protect the long-term financial prospects of the business. These
measures include raising £126.6m through disposal of events or portfolios of events, a rights
issue in May 2020 and delivering significant cost savings. These measures have protected the
business against a prolonged impact of COVID-19 and provide confidence in the Group’s ability
to withstand continued disruption over the next five years.
The Group’s available liquidity means that, even under downside scenarios, the business would
continue to have significant liquidity headroom on its existing facilities. In all assessments, there is
an option to extend the potential mitigations available, such as further reduction in expenditure,
deferring term loan repayments, raising additional capital via the equity markets or the disposal
of assets, if required.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as
going concerns while maximising the return to stakeholders through the optimisation of the debt
and equity balances. The capital structure of the Group consists of cash and cash equivalents
and bank loans which are disclosed in note 19 and note 20 and equity attributable to equity
holders of the parent, comprising issued capital, reserves and retained earnings as disclosed
in note 26 and in the Consolidated statement of changes in equity.
Notes to the consolidated accounts
continued
192
Hyve Group plc
Annual Report and Accounts 2022
24 Deferred tax
Accelerated tax
depreciation
£000
Intangibles
£000
Tax losses
£000
Provisions and
accruals
£000
Hedges
£000
Share-based
payments
£000
Repatriation of
profit
£000
Total
£000
At 30 September 2020
3,037
(25,263)
8,792
(43)
149
67
(52)
(13,313)
Credit/(charge) to profit or loss (note 9)
429
2,924
3,848
1,270
(2)
167
(950)
7,686
Charge to other comprehensive income (note 9)
–
–
–
–
(130)
–
–
(130)
Credit to equity (note 9)
–
–
–
–
–
101
–
101
Acquisition of subsidiary
–
(252)
–
–
–
–
–
(252)
Foreign exchange
–
56
(55)
(20)
–
–
1
(18)
At 30 September 2021
3,466
(22,535)
12,585
1,207
17
335
(1,001)
(5,926)
Credit/(charge) to profit or loss
(834)
4,804
2,226
(349)
(29)
(177)
100
5,741
Charge to other comprehensive income
–
–
–
–
(15)
–
–
(15)
Credit to equity
–
–
–
–
–
(101)
–
(101)
Discontinued operations
–
–
(536)
(669)
(1)
–
800
(406)
Acquisition of subsidiary
–
–
–
490
–
–
–
490
Disposal of a subsidiary
–
(1,685)
–
(50)
–
–
–
(1,735)
Foreign exchange
–
(1)
1,190
170
–
–
–
1,359
At 30 September 2022
2,632
(19,417)
15,465
799
(28)
57
(101)
(593)
Certain deferred tax assets and liabilities have been offset in the above table. The following is the analysis of deferred tax balances for financial reporting purposes:
2022
£000
2021
£000
Deferred tax liabilities
(13,552)
(11,633)
Deferred tax assets
12,959
5,707
(593)
(5,926)
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the statement of financial position. Deferred tax is
calculated using tax rates and laws that have been enacted or substantively enacted at the end of the reporting period, and which are expected to apply when the related deferred tax asset is
realised or the deferred tax liability is settled. A change to the main UK corporation tax rate, announced in the Budget on 3 March 2021, was substantively enacted for IFRS and UK GAAP purposes
on 24 May 2021. The rate applicable from 1 April 2023 will be 25%. Deferred tax assets/liabilities have been revalued to that rate to the extent that they are expected to unwind after that date.
Any amounts expected to unwind prior to 1 April 2023 have been calculated at the current rate of 19%.
Deferred tax assets are recognised (for the carry forward of unused tax losses, accelerated capital allowances and other temporary differences) where (a) there are sufficient deferred tax liabilities
relating to the same taxation authority and the same taxable entity which are expected to reverse in the same period as the deferred tax asset will unwind; or (b) to the extent that, based on a
review of expected profits, it is probable that future taxable profit will be available against which the unused losses and tax credits can be utilised.
At the balance sheet date, deferred tax assets have arisen in the UK and US jurisdictions only.
Strategic report
Governance
Financial statements
193
Annual Report and Accounts 2022
Hyve Group plc
24 Deferred tax
continued
As at 30 September 2022, the Group has unused tax losses of £107.7m (2021: £99.1m) available for
offset against future profits. A deferred tax asset has been recognised in respect of £68.4m (2021:
£53.0m) of such losses. No deferred tax asset has been recognised in respect of the remaining
£39.3m (2021: £46.1m) as it is not considered probable that there will be future taxable profits
available. The unrecognised losses may be carried forward indefinitely, with the exception of
losses of £nil (2021: £6.2m) arising in certain jurisdictions, which expire between five and 10 years.
No deferred tax asset has been recognised in respect of deductible temporary differences of
£7.1m (2021: £5.8m) as it is not considered probable that there will be sufficient future taxable
profits available after utilisation of unused tax losses. The unrecognised assets may be carried
forward indefinitely.
At the balance sheet date, the aggregate amount of temporary differences associated with
undistributed earnings of subsidiaries for which deferred tax liabilities have not been recognised
was £nil (2021: £7.6m). No liability has been recognised in respect of these differences because
the Group is in a position to control the timing of the reversal of the temporary differences and it
is probable that such differences will not reverse in the foreseeable future.
25 Share capital
2022
£000
2021
£000
Allotted and fully paid
291,640,907 ordinary shares of 10p each (2021: 265,128,107 of 10p each)
29,164
26,513
2022
Number of
shares
2021
Number of
shares
At 1 October
265,128,107
265,128,107
Share placement
13,818,698
–
Share subscription
12,694,102
–
At 30 September
291,640,907
265,128,107
On 18 November 2021, the Group announced it had placed 13,818,698 new ordinary shares
at a price of £1.07, raising gross proceeds of £14.8m to part-fund the acquisition of 121 Group
(see note 13). Alongside this, a subscription of 12,694,102 new ordinary shares at a price of
£1.1235 per new ordinary share was completed by investment funds managed by Strategic
Value Partners, LLC. Total net proceeds were £28.1m after expenses of £1.0m, which were
deducted from share premium.
The Company has one class of ordinary shares which carry no right to fixed income. At the
Extraordinary General Meeting held on 17 November 1998, shareholders approved the
establishment of the Hyve Group Employee Share Ownership Trust (‘ESOT’). The terms of the
ESOT allow the trustees to transfer shares to employees who exercise options under the
Company’s share option schemes, to grant options to employees and to accumulate shares by
buying in the market or subscribing for shares at market value. The ESOT is capable of holding
a maximum of 5% of the Company’s issued ordinary share capital. The ESOT reserve arises in
connection with the ESOT. The amount of the reserve represents the deduction in arriving at
shareholders’ funds for the consideration paid for the Company’s shares purchased by the
ESOT which had not vested unconditionally at the end of each financial year.
The ESOT held 671,757 shares in Hyve Group plc at 30 September 2022 (2021: 771,375 shares).
During the year, there were 992,000 nominal share options under the Employees’ Performance
Share Plan granted against ESOT-held shares (2021: 2,180,893). The market value of the ordinary
shares held by the ESOT at 30 September 2022 was £0.3m (2021: £0.9m).
The Company has agreed to make available to the ESOT an interest-free loan of up to £12.5m
for the purpose of buying shares. At 30 September 2022, the amount of the loan drawn down
was £12.0m. The Company profit and loss account and statement of financial position include
the results of the ESOT for the year ended 30 September 2022. The trustees have waived their
current and future rights to all dividend entitlement on the shares held by the ESOT. 99,618
options were exercised from the ESOT during the year (2021: 41,281). The total consideration for
the options exercised from the ESOT was £nil (2021: £nil). 2,637,178 outstanding options are to
be settled by the ESOT, so all shares held by the ESOT are under option as at 30 September
2022. Details of the options in issue and their exercise dates can be seen at note 28 to the
consolidated accounts.
26 Non-controlling interests
2022
£000
2021
(restated)
£000
At 1 October (restated)
2,179
4,552
Dividends payable to non-controlling interests
(339)
(671)
Disposal of non-controlling interest (note 17)
978
(870)
Loss on ordinary activities after taxation
(651)
(832)
Foreign currency translation
366
–
At 30 September
2,533
2,179
Notes to the consolidated accounts
continued
194
Hyve Group plc
Annual Report and Accounts 2022
27 Leases
The Group’s right-of-use assets are disclosed in note 15. All right-of-use assets and lease liabilities are recognised in respect of office leases.
The Group’s lease liabilities at 30 September 2022 are as follows:
Total
£000
1 October 2020
18,835
Principal lease payments
(4,015)
Interest on lease liabilities
650
Acquired through business combinations
112
Additions
1,558
Disposals
(148)
Foreign exchange
(270)
30 September 2021
16,722
Principal lease payments
(3,448)
Interest on lease liabilities
592
Additions
926
Acquired through business combinations (note 13)
420
Disposals
(1,153)
Foreign exchange
1,190
30 September 2022
15,249
Current lease liabilities (note 21)
3,420
Non-current lease liabilities
11,829
15,249
In the year ended 30 September 2022, the lease liabilities acquired through business combinations include £0.1m of current lease liabilities and £0.3m of non-current lease liabilities. Current lease
liabilities are disclosed within trade and other payables.
The Group’s average lease term under IFRS 16 is 3.2 years. The average IBR used for year ended 30 September 2022 to discount lease liabilities was 3.3% (2021: 3.5%).
Maturity of lease liabilities
Carrying amount and fair value
Contractual cash flows
Less than 1 year
1 – 2 years
2 – 3 years
3 – 4 years
4 – 5 years
Greater than 5 years
(15,249)
(16,843)
(3,420)
(3,066)
(2,880)
(2,889)
(2,893)
(1,695)
Total cash outflows in respect of leases was £3.4m (2021: £4.0m).
Short-term lease and low value lease expenses for the year ended 30 September 2022 were as follows:
2022
£000
2021
£000
Office leases
90
161
Venue leases
30,035
7,654
Total
30,125
7,815
Strategic report
Governance
Financial statements
195
Annual Report and Accounts 2022
Hyve Group plc
28 Share-based payments
The Company operates two share option schemes.
Share option plans
The Company operates a share option plan for certain employees of the Group. Options are
exercisable at a price equal to the average quoted market price of the Company’s share on the
date of grant. The vesting period is typically three years and the options are exercisable up to
10 years from granting. The options are forfeited if the employee leaves the Group before the
options vest.
Performance share plans
The Company operates a Performance Share Plan (‘PSP’) for executives and certain employees.
Awards under the PSP are at an exercise value of 10p. Awards can be made to an employee
over shares up to a maximum of 100% of base salary, or 150% for the Chief Executive Officer
and 120% for the Chief Finance and Operations Officer, each year based on market value.
The vesting period is three years and awards are exercisable up to 10 years from the date of
grant. For conditional awards, the vesting is automatic on the satisfaction of performance
targets. The options are forfeited if the employee leaves the Group before the options vest.
The awards are also subject to a performance target. Further details of the performance
targets can be found in the Remuneration Committee report on pages 96 to 98.
Details of the share options outstanding as at 30 September 2022 are as follows:
Number of
share options
2022
Weighted
average
exercise price
(pence)
2022
Number of
share options
2021
Weighted
average
exercise price
(pence)
2021
Share option plans
Outstanding at beginning of period
214,557
123.3
453,127
123.3
Lapsed during the period
(77,768)
120.7
(238,570)
120.7
136,789
126.1
214,557
126.1
Performance share plans
Outstanding at beginning of period
3,121,171
10.0
1,929,457
10.0
Granted during the period
992,000
10.0
1,749,314
10.0
Lapsed during the period
(1,638,304)
10.0
(87,869)
10.0
2,474,867
10.0
3,590,902
10.0
The total number of exercisable options in the share option plans is nil (2021: nil) and in the
performance share plans is nil (2021: 3,478).
The weighted average share price at the date of exercise for share options exercised during the
period was nil. The options outstanding at 30 September 2022 had a weighted average exercise
price of 15.7p (2021: 8.2p) and a weighted average remaining contractual life of 602 days (2021:
530 days).
In the year ended 30 September 2022, PSP options were granted in January 2022. The aggregate
of the estimated fair value of these options is £540,960.
The inputs into the Monte Carlo for the instruments issued during the year are as follows:
Performance
share plan
2022
Performance
share plan
2021
Weighted average share price
–
–
Weighted average exercise price
10p
10p
Expected volatility
34%
48%
Expected life
3 years
3 years
Risk-free rate
1.0%
0.1%
Dividend yield
0.0%
0.0%
Expected volatility was determined by calculating the historical volatility of the Group’s share
price over the previous year.
Monte Carlo simulations were used to model possible share prices of the Group and the relevant
comparator companies to determine the expected vesting percentages of the conditionally
granted performance shares under the ‘total shareholder return’ performance condition.
Value creation plans
The Company operates a Value Creation Plan (‘VCP’) for executives and certain employees
to share the value creation of the Group as a proportion of the increase in the market
capitalisation of the Group in excess of an opening market capitalisation amount plus an
annually compounded base hurdle rate of 10%, with further value delivered above an upper
hurdle of 15%. The vesting period is three, four and five years. The vesting conditions are the
hurdle values which were calculated from a base price of £1.30 and an initial Company value
of £344,666,539 divided by the number of shares in issue. The value created above the hurdle
is calculated using the average share price in the three-month period immediately prior to the
last day of the Company’s financial year preceding the vesting date.
In the year ended 30 September 2022, VCP awards were granted in October 2021 and
February 2022. The aggregate of the estimated fair value of these awards was £4,061,000
at the grant date.
Notes to the consolidated accounts
continued
196
Hyve Group plc
Annual Report and Accounts 2022
28 Share-based payments
continued
The inputs into the Monte Carlo for the instruments issued during the year are as follows:
Value Creation
Plan February
2022
Value Creation
Plan October
2021
Weighted average share price
115p
107p
Weighted average exercise price
n/a
n/a
Expected volatility
38%
34%
Expected life
4.62 years
4.93 years
Risk-free rate
1.4%
0.8%
Dividend yield
0.0%
0.0%
Expected volatility was determined by calculating the historical volatility of the Group’s share
price over the previous year.
Monte Carlo simulations were used to model possible share prices of Hyve and the relevant
comparator companies to determine the expected vesting percentages of the conditionally
granted performance shares under the ‘total shareholder return’ performance condition.
The Group recognised a total expense of £1.6m (2021: £0.7m) related to equity-settled share-
based payment arrangements.
Cash-settled share-based payments
The Group issues to certain employees share appreciation rights (‘SARs’) that require the Group
to pay the intrinsic value of the SAR to the employee at the date of exercise. The Group recorded
liabilities of £177,000 (2021: £137,000) and a charge of £40,000 (2021: £73,000). The total intrinsic
value at 30 September 2022 was £nil (2021: £nil).
29 Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note. Transactions between the Group
and its joint ventures, where relevant, are disclosed below.
Trading transactions
During the year ended 30 September 2022, the Group charged management fees of £nil (2021:
£168,000) to Sinostar ITE, the Group’s joint venture operation in Hong Kong and China.
Remuneration of key management personnel
The remuneration of Directors and the Executive Team, who are the key management personnel
of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related
party disclosures. Further information about the remuneration of individual Directors is provided
in the audited part of the Remuneration Committee report on pages 96 to 98.
2022
£000
2021
£000
Short-term employee benefits
2,633
2,742
Employer’s national insurance contributions
79
166
2,712
2,908
Disposal of subsidiaries
The disposal of the Ukrainian business was classified as a smaller related party transaction
under Listing Rule 11.1.10 R by virtue of Anatoly Sushon being deemed a related party of the
Group at the time of the transaction.
30 Net debt and movements in liabilities arising from financing activities
At
1 October
2021
£000
Cash flow
£000
Non-cash
movements
£000
Foreign
exchange
£000
Classified
as held
for sale
At
30 September
2022
£000
Cash at bank and on hand
41,733
(15,727)
–
3,575
(1,513)
28,068
Cash and cash equivalents
41,733
(15,727)
–
3,575
(1,513)
28,068
Debt due within one year
(11,751)
6,675
(924)
–
–
(6,000)
Debt due after one year
(109,849)
16,748
–
–
–
(93,101)
Adjusted net debt
(79,867)
7,696
(924)
3,575
(1,513)
(71,033)
Lease liabilities (note 27)
(16,722)
3,448
(785)
(1,190)
–
(15,249)
Net debt
(96,589)
11,144
(1,709)
2,385
(1,513)
(86,282)
Strategic report
Governance
Financial statements
197
Annual Report and Accounts 2022
Hyve Group plc
30 Net debt and movements in liabilities arising from financing activities
continued
At
1 October
2020
£000
Cash flow
£000
Non-cash
movements
£000
Foreign
exchange
£000
At
30 September
2021
£000
Cash at bank and on hand
50,330
(8,956)
–
359
41,733
Cash and cash equivalents
50,330
(8,956)
–
359
41,733
Debt due within one year
(17,500)
5,749
–
–
(11,751)
Debt due after one year
(100,485)
(8,104)
(1,260)
–
(109,849)
Adjusted net debt
(67,655)
(11,311)
(1,260)
359
(79,867)
Lease liabilities (note 27)
(18,835)
4,015
(2,172)
270
(16,722)
Net debt
(86,490)
(7,296)
(3,432)
629
(96,589)
Included within the net cash inflow of £11.1m (2021: net cash outflow of £7.3m) is £25.4m (2021:
£67.2m) of repayments on the Group’s debt facility and £2.0m (2021: £69.6m) of drawdowns
on the Group’s debt facility. At 30 September 2022, the Group had £100.0m (2021: £88.4m) of
undrawn debt facilities.
Analysis of changes in other financing liabilities:
At
1 October
2021
£000
Cash flow
£000
Non-cash
movements
£000
At
30 September
2022
£000
Interest payable
(90)
6,676
(6,684)
(98)
At
1 October
2020
£000
Cash flow
£000
Non-cash
movements
£000
At
30 September
2021
£000
Interest payable
(315)
6,556
(6,331)
(90)
Interest payable at 30 September 2022 of £0.1m (2021: £0.1m) is recognised as a current liability
within accruals.
31 Post-balance sheet events
On 20 October 2022, the Group completed the refinancing of its debt facilities. The new debt
facilities totalling £135m comprise a £115m term loan and a £20m super senior revolving credit
facility. The new debt facilities replace the Group’s previous debt facilities, and the £101m drawn
down as at 30 September 2022 was repaid in full on 20 October 2022 when the new funds were
drawn. In advance of the debt refinancing, on 10 October 2022, the Group terminated its interest
rate swap contract, which was due to expire in November 2022.
On 24 October 2022, the Group completed the disposal of Hyve Fuarcılık Anonim Şirketi and its
subsidiaries (the ‘Turkish business’) for consideration of up to £8m to ICA (JV) Limited. The Group
has received upfront consideration of £2.0m in respect of the disposal and expects to receive
between £4m and £6m of deferred contingent consideration, payable over the six-year period
until December 2028 based on the profitability of the Turkish business. The assets and liabilities of
the Turkish business have been classified as held for sale as at 30 September 2022 in accordance
with IFRS 5 Non-Current Assets Held for Sales and Discontinued Operations.
Notes to the consolidated accounts
continued
198
Hyve Group plc
Annual Report and Accounts 2022
Notes
2022
£000
2021
(restated
1
)
£000
Fixed assets
Investments
5
7,619
118,034
Intangible assets
5
17
25
7,636
118,059
Current assets
Debtors due within one year
6
348,270
580,603
Cash at bank and in hand
630
16,194
348,900
596,797
Creditors: amounts falling due within one year
8
(22,882)
(103,615)
Net current assets
326,018
493,182
Creditors: amounts falling due after one year
8
(60,410)
(71,233)
Net assets
273,244
540,008
Capital and reserves
Called up share capital
9
29,164
26,513
Share premium account
185,697
160,271
Merger reserve
2,746
2,746
Capital redemption reserve
457
457
ESOT reserve
(3,018)
(3,083)
Profit and loss account
58,198
353,104
Shareholders’ funds
273,244
540,008
1
Results for the year ended 30 September 2021 have been restated to reflect the adjustments made to corporation tax liability and tax charge. See note 1 for further detail.
The Company reported a loss for the financial year ended 30 September 2022 of £296.4m (2021 (restated): profit of £43.0m).
The accounts of the Company, registered number 01927339, were approved by the Board of Directors and signed on their behalf, on 13 December 2022, by:
John Gulliver
Chief Finance and Operations Officer
Company statement of financial position
30 September 2022
Strategic report
Governance
Financial statements
199
Annual Report and Accounts 2022
Hyve Group plc
Company statement of changes in equity
For the year ended 30 September 2022
Called up
share capital
(note 9)
£000
Share
premium
account
£000
Merger
reserve
£000
Capital
redemption
reserve
£000
ESOT
reserve
£000
Profit and
loss account
(restated)
£000
Total
(restated)
£000
1 October 2020
26,513
160,271
2,746
457
(3,175)
309,468
496,664
Net loss for the year (restated)
–
–
–
–
–
42,962
42,578
Total comprehensive loss for the year (restated)
–
–
–
–
–
42,962
42,578
Exercise of share options
–
–
–
–
92
(92)
–
Dividends
–
–
–
–
–
–
–
Capital contribution
–
–
–
–
–
264
264
Share-based payments
–
–
–
–
–
502
502
30 September 2021 (restated)
26,513
160,271
2,746
457
(3,083)
353,104
540,008
Net loss for the year
–
–
–
–
–
(296,439)
(296,439)
Total comprehensive loss for the year
–
–
–
–
–
(296,439)
(296,439)
Exercise of share options
–
–
–
–
65
(65)
–
Issue of shares
2,651
25,426
–
–
–
–
28,077
Dividends
–
–
–
–
–
–
–
Capital contribution
–
–
–
–
–
682
682
Share-based payments
–
–
–
–
–
916
916
30 September 2022
29,164
185,697
2,746
457
(3,018)
58,198
273,244
200
Hyve Group plc
Annual Report and Accounts 2022
1 Basis of preparation and accounting policies
These separate financial statements of the Company have been prepared in accordance with
applicable United Kingdom accounting standards, including Financial Reporting Standard 102
The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland
(‘FRS 102’), and with the Companies Act 2006. The financial statements have been prepared
on the historical cost basis.
Hyve Group plc is the parent company (the ‘Company’) of the Hyve Group (the ‘Group’) and its
principal activity is to act as the ultimate holding company of the Group. The address of the
registered office is given on page 214.
As permitted by FRS 102, the Company has taken advantage of the disclosure exemptions
available under that standard in relation to share-based payments and related party
transactions. The Directors’ report, Corporate governance report and Directors’ remuneration
report disclosures are on pages 82 to 84, 77 to 81, and 99 to 127 respectively, of this report.
The Company has taken advantage of section 408 of the Companies Act 2006 and has not
included its own profit and loss account in these financial statements. The Company has also
adopted the following disclosure exemptions:
The requirement to present a statement of cash flows and related notes; and
Financial instrument disclosures, including:
–
Categories of financial instruments;
–
Items of income, expenses, gains or losses relating to financial instruments; and
–
Exposure to and management of financial risks.
The principal accounting policies are summarised below. They have all been applied consistently
throughout the year and the preceding year. The preparation of financial statements under
FRS 102 requires the Directors to make judgements, estimates and assumptions that affect the
application of policies and the reported amounts of assets and liabilities, and income and
expenses. These estimates and associated assumptions are based on past experience and other
factors considered applicable at the time and are used to make judgements about the carrying
value of assets and liabilities that cannot be readily determined from other sources. Actual results
may differ from these estimates.
These estimates and underlying assumptions are reviewed on an ongoing basis. Changes to
estimates and assumptions are reflected in the financial statements in the period in which they
are made.
Going concern
The Directors have a reasonable expectation that the Company has adequate resources to
continue in existence for the foreseeable future. The Company therefore continues to adopt the
going concern basis in preparing its financial statements. Please see note 2 to the consolidated
accounts for further detail.
Investments and impairment reviews
Fixed asset investments including subsidiaries are shown at cost less provision for any
impairment. Where the recoverable amount of the investment is less than the carrying amount,
an impairment is recognised. Impairment reviews are undertaken at least annually, or more
frequently where there is an indication of impairment.
The results and assets and liabilities of joint ventures are incorporated in these financial
statements using the equity method of accounting. Details of the basis of accounting of
investments in joint ventures are included in note 2 to the consolidated accounts.
Intangible assets
Trademarks are measured initially at purchase cost and have a definite useful life and are
carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line
method to allocate the cost over their estimated useful life. The estimated useful lives are up to
20 years.
Provisions
Provisions are recognised when the Company has a present legal obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
Financial instruments
Financial assets and financial liabilities are recognised on the Company’s statement of financial
position when the Company becomes a party to the contractual provisions of the instrument.
Trade debtors and creditors
Trade debtors and creditors are stated at their nominal value. Trade debtors are reduced by
appropriate allowances for estimated irrecoverable amounts.
Bank borrowings
Bank overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges
are accounted for on an accrual basis to profit or loss.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct
issue costs.
Notes to the Company accounts
Strategic report
Governance
Financial statements
201
Annual Report and Accounts 2022
Hyve Group plc
1 Basis of preparation and accounting policies
continued
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to
be paid (or recovered) using the tax rates and laws that have been enacted or substantively
enacted by the reporting date.
Deferred tax is recognised in respect of all timing differences that have originated but not
reversed at the balance sheet date where transactions or events that result in an obligation to
pay more tax in the future or a right to pay less tax in the future have occurred at the balance
sheet date. Timing differences are differences between the Group’s taxable profits and its
results as stated in the financial statements that arise from the inclusion of gains and losses
in tax assessments in periods different from those in which they are recognised in the
financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only to the extent
that, on the basis of all available evidence, it can be regarded as more likely than not that there
will be suitable taxable profits from which the future reversal of the underlying timing differences
can be deducted.
Deferred tax is not recognised when fixed assets are revalued unless by the balance sheet date
there is a binding agreement to sell the revalued assets and the gain or loss expected to arise on
sale has been recognised in the financial statements. Neither is deferred tax recognised when
fixed assets are sold and it is more likely than not that the taxable gain will be rolled over, being
charged to tax only if and when the replacement assets are sold.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in
which the timing differences are expected to reverse, based on tax rates and laws that have
been enacted or substantively enacted by the reporting date.
Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the balance
sheet date are retranslated at the rates of exchange prevailing at that date. Non-monetary
assets and liabilities are translated at the rate prevailing at the date the fair value was
determined. Gains and losses arising on retranslation of monetary assets are included in
profit or loss for the period.
Employee Share Ownership Trust
The financial statements include the assets and liabilities of the Employee Share Ownership Trust
(‘ESOT’). Shares in the Company held by the ESOT have been valued at cost and are held in
equity. The costs of administration of the ESOT are written off to profit or loss as incurred.
Where such shares are subsequently sold, any net consideration received is included in equity
attributable to the Company’s equity holders.
Share-based payments
The Company issues equity-settled share-based payments to certain employees. These are
measured at fair value (excluding the effect of non-market-based vesting conditions) at the
date of grant. The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based on the Company’s
estimate of shares that will eventually vest and adjusted for the effect of non-market-based
vesting conditions.
Fair value is measured using a Black-Scholes model. The expected life used in the model has
been adjusted, for the effects of non-transferability, exercise restrictions and behavioural
considerations based on management’s best estimate.
Share-based payment amounts that relate to employees of subsidiary Group companies are
recorded as capital contributions to the relevant Group company.
Details of the Company’s equity-settled share-based payments are included in note 28 to the
consolidated accounts.
Critical accounting judgements and key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
Critical judgements in applying the entity’s accounting policies
The Company does not make any critical judgements in applying the entity’s accounting policies.
Key sources of estimation uncertainty
The Company makes an estimate of the recoverable value of its investments and debtors
balances, including inter-company balances as disclosed within these financial statements
(refer to notes 5 and 6). The Company reviews its investments for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be supported by its
underlying assets. The recoverability assessment requires the Directors to make estimates
regarding the probability of the future earnings potential of the counterparty. An impairment
charge of £298.4m was recognised in the year in relation to the Company’s investment and
debtor balances. At 30 September 2022, the Directors are satisfied that the remaining investment
and debtors balances amounts as disclosed are recoverable.
Prior-year error
During the year, the Directors identified that the tax charge in relation to the year ended
30 September 2021 was incorrectly recorded in the Company accounts.
To correct for the omitted tax charge, the prior-year profit for the year, deferred tax asset
and corporation tax liability have been amended, decreasing profit by £9.1m, decreasing the
deferred tax asset by £0.3m, increasing the corporation tax liability by £0.3m and increasing
the amounts owed to Group undertakings by £8.5m. As a result, retained earnings as at
30 September 2021 have been decreased by £9.1m in the Company statement of changes
in equity.
Notes to the Company accounts
continued
202
Hyve Group plc
Annual Report and Accounts 2022
1 Basis of preparation and accounting policies
continued
Company income statement
2021
£000
Tax charge
9,062
Decrease in profit for the financial year
9,062
Company statement of financial position
2021
£000
Deferred tax asset
(283)
Amounts owed to Group undertakings
(8,449)
Corporation tax
(330)
Change in net assets
(9,062)
Retained earnings
(9,062)
Change to total equity
(9,062)
2 Profit/(loss) for the year
As permitted by section 408 of the Companies Act 2006, no separate profit and loss account or
statement of comprehensive income is presented in respect of the Company. The profit or loss
attributable to the Company is disclosed in the footnote to the Company’s statement of financial
position.
The auditor’s remuneration for audit and other services is disclosed in note 4 to the Consolidated
financial statements.
3 Staff costs
a) Number of employees
The average number of persons (including Directors) employed by the Company during the year
was as follows:
2022
No.
2021
No.
Directors
6
6
b) Employee costs
Their aggregate remuneration comprised:
2022
£000
2021
£000
Wages and salaries
2,438
2,288
Social security costs
336
316
Share-based payments
916
502
3,691
3,106
Highest paid Director
1,317
1,254
4 Dividends
The Directors have not proposed a final dividend (2021: nil) for the year ended 30 September
2022. The payment of dividends was restricted during the year under the terms of the waivers
agreed with the Group’s lenders in May 2020 and extended in November 2021, and remain
restricted under the terms of the new debt facility agreed in October 2022 until the business is
sufficiently deleveraged.
There were not any interim dividends declared or paid in the years ended 30 September 2022
and 30 September 2021.
Under the terms of the trust deed dated 20 October 1998, the Hyve Group Employees Share
Trust, which holds 671,757 (2021: 771,375) ordinary shares representing 0.2% of the Company’s
called up ordinary share capital, has agreed to waive all dividends due to it each year.
Strategic report
Governance
Financial statements
203
Annual Report and Accounts 2022
Hyve Group plc
5 Fixed assets
Investments in subsidiaries
The Company has investments in the following subsidiary undertakings. The principal activity of all the companies listed is the organisation of exhibitions and conferences.
Name
Address
Effective holding
%
121 Group (HK) Ltd
19606, 19/F, FWD Financial Centre, 308 Des Voeux Road, Sheung Wan, Hong Kong
Ordinary shares
100
121 Group Australia Pty Ltd
L4, Suite 402, 261 George Street, Sydney, NSW, 2000, Australia
Ordinary shares
100
121 Partners Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Airgate Holdings Ltd
42 Dositheou, Strovolos, Nicosia, 2028, Cyprus
Ordinary shares
100
Breakbulk Ireland Ltd
5 Lapps Quay, Cork, Ireland T12 RW7D
Ordinary shares
100
Breakbulk US Holdco Inc
One Gateway Centre, Suite 2600, Newark, NJ07102, USA
Ordinary shares
100
Breakbulk US Opco Inc
One Gateway Centre, Suite 2600, Newark, NJ07102, USA
Ordinary shares
100
Fintech Meetup Holdco, Inc
251 Little Falls Drive, Wilmington, DE 19808, USA
Ordinary shares
100
Fintech Meetup, LLC
605 Third Avenue, 26th Floor, New York, NY10158, USA
Ordinary shares
100
Groceryshop, LLC
605 Third Avenue, 26th Floor, New York, NY10158, USA
Ordinary shares
100
Hyve (Europe) Exhibitions Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve (US) Exhibitions Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Asia Exhibitions Ltd
Suite 1004, 10th Floor, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong
Ordinary shares
100
Hyve Beauty Fuarcilik A S
19 Mayıs Caddesi Golden Plaza Kat:7 Şişli, İstanbul, Turkey
Ordinary shares
100
Hyve Build Fuarcilik A S
19 Mayıs Caddesi Golden Plaza Kat:7 Şişli, İstanbul, Turkey
Ordinary shares
100
Hyve China International Exhibitions and
Conferences Services (Beijing) Co., Ltd
301-L302-2, 3/F, Wonderful World Commercial Plaza, 38 East 3rd Ring North Road, Chaoyang District, Beijing, China
Ordinary shares
100
Hyve Enterprises 2 Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Enterprises Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Eventos Ltda
R. Des. Eliseu Guilherme, 53/59 – CJ 81, Paraíso, São Paulo – SP, Brazil 04004-030
Ordinary shares
100
HYVE Events (Shanghai) Company Ltd
Unit 2822, F/28, No. 1045 Middle Huaihai Road, Xuhui District, Shanghai, China
Ordinary shares
100
Hyve Events S.A. Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Events Services Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Events South Africa (Pty) Ltd
StoneMill Office Park, 1B Cornerstone House, 1st Floor, 300 Acacia Road, Darrenwood, 2194, South Africa
Ordinary shares
100
Hyve Events South Africa Holdco Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Footwear Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Fuarcilik A.S
19 Mayıs Caddesi Golden Plaza Kat:7 Şişli, İstanbul, Turkey
Ordinary shares
100
Hyve Holdings Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve India Private Ltd
205, Second Floor, Harsh Bhawan, B.No. 64-65, Nehru Place, New Delhi, 110 019, India
Ordinary shares
100
Hyve International Events Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Moda Footwear Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Moda Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Notes to the Company accounts
continued
204
Hyve Group plc
Annual Report and Accounts 2022
Name
Address
Effective holding
%
Hyve Overseas Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Shanghai Exhibitions Co., Ltd
Room 1703, Soho Building, No. 575 Wusong Rd, Hongkou District, Shanghai, China
Ordinary shares
100
Hyve UK Events Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve US Limited
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Hyve Worldwide B.V.
Business Center Demka, Demkaweg 11, 3555 HW Utrecht, The Netherlands
Ordinary shares
100
Intermedia Exhibitions and Conferences Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
International Trade and Exhibitions Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
ITE Asia Pte Ltd
8 Shenton Way #21-07, AXA Tower Singapore 068811
Ordinary shares
100
ITE Group Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
ITE International Trade and Exhibitions EURL
24, route du CAP, 16412 Bordj El Kiffan, Algeria
Ordinary shares
100
ITE Overseas Holdings BV
Business Center Demka, Demkaweg 11, 3555 HW Utrecht, The Netherlands
Ordinary shares
100
Jacket Required Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Learnit World Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
New Expostar (Shenzhen) Co Ltd
Unit C, 42/F, Block A, World Finance Centre, 4003 Shennan Dong Road, Shenzhen, China
50
PT ITE Exhibitions Indonesia Ltd
Jl. Maritim Raya No. 4A Cilandak Barat, Jakarta Selatan, Dki Jakarta, Indonesia
Ordinary shares
51
RAS Holdings Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
RAS Publishing Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Regent US Holdco Inc
1209 Orange Street, Wilmington, New Castle County, Delaware 19801, USA
Ordinary shares
100
Retail Meetup, LLC
605 Third Avenue, 26th Floor, New York, NY10158, USA
Ordinary shares
100
Scoop International Fashion Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
95
Shanghai AIGE Exhibition Service Ltd
Room 1001, Building B, Twin Towers, No. 618 Xinzhuan Road, Songjiang District, Shanghai, China
Ordinary shares
70
Shoptalk Commerce, LLC
605 Third Avenue, 26th Floor, New York, NY10158, USA
Ordinary shares
100
Shoptalk Europe Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
Summit Trade Events Ltd
2 Kingdom Street, London, England, W2 6JG
Ordinary shares
100
5 Fixed assets
continued
Strategic report
Governance
Financial statements
205
Annual Report and Accounts 2022
Hyve Group plc
5 Fixed assets
continued
The Company has guaranteed the liabilities of the following subsidiary undertakings in order that they qualify for the exemption from audit granted by section 479A of the Companies Act. The
Directors of the Company expect that the possibility of this guarantee being called upon is remote.
Subsidiary undertakings
Registered
numbers
121 Partners Ltd
08920603
Intermedia Exhibitions & Conferences Ltd
03640982
Hyve Eurasian Exhibitions Ltd
07307385
Hyve Enterprises 2 Ltd
14060823
Hyve Enterprises Ltd
03372928
Hyve Overseas Ltd
02926434
Hyve Events Services Ltd
03942985
Hyve Holdings Ltd
06975153
Hyve (US) Exhibitions Ltd
07841956
Hyve (Europe) Exhibitions Ltd
07843009
RAS Holdings Ltd
04211246
Summit Trade Events Ltd
06446907
Hyve US Ltd
08707579
Hyve Events South Africa Ltd
09374049
International Trade and Exhibitions Ltd
10128746
Hyve Moda Ltd
04211308
RAS Publishing Ltd
02725777
Hyve Moda Footwear Ltd
02924254
Jacket Required Ltd
07563504
Scoop International Fashion Ltd
07441467
Shoptalk Europe Ltd
10440875
Learnit Worldwide Ltd
11587014
Notes to the Company accounts
continued
206
Hyve Group plc
Annual Report and Accounts 2022
5 Fixed assets
continued
Subsidiary undertakings
Shares
£000
Capital
contribution
£000
Total
£000
Cost
1 October 2021
111,526
30,511
142,037
Additions
22,905
–
22,905
Capital contribution
–
682
682
30 September 2022
134,431
31,193
165,624
Provision for impairment
1 October 2021
429
23,574
24,003
Impairment
134,002
–
134,002
30 September 2022
134,431
23,574
158,005
Net book value
30 September 2022
–
7,619
7,619
30 September 2021
111,097
6,937
118,034
During the year, the Company subscribed to 100 ordinary shares in Hyve Holdings Limited for
consideration of £22.9m in order to part-fund the acquisition of 121 Group in November 2022.
Please refer to note 13 to the consolidated accounts for further details.
To facilitate the disposal of the Group’s Russian business in May, the Group’s internal structure
was rationalised, which triggered a review of the fair value of the Company’s investments in
its subsidiaries. An impairment charge of £134.0m (2021: £nil) was recognised in the year in
respect of investments in subsidiaries, being the excess of the carrying value of the Company’s
investments over the net asset value of the subsidiary companies at the review date.
Intangible assets
Trademarks
£000
Cost
1 October 2021
103
Additions in the year
–
30 September 2022
103
Amortisation
1 October 2021
78
Charge in the year
8
30 September 2022
86
Net book value
30 September 2022
17
30 September 2021
25
6 Debtors due within one year
2022
£000
2021
(restated)
£000
Amounts owed by Group undertakings
347,764
579,870
Prepayments and accrued income
357
332
Other debtors
98
229
Deferred tax (note 7)
51
172
348,270
580,603
The amounts owed by Group undertakings are payable on demand and bear no interest.
To facilitate the disposal of the Group’s Russian business in May, the Group’s internal structure
was rationalised, which triggered a review of the amounts due to the Company by Group
undertakings. An impairment charge of £164.4m (2021: £nil) was recognised in the year in
respect of amounts owed by Group undertakings, being the excess of the carrying value
of the amounts due by Group undertakings over the net asset value of the relevant Group
counterparties at the review date.
7 Deferred tax
At the reporting date, the Company has unused tax losses of £0.1m (2021: £nil) available for offset
against future profits on which a deferred tax asset has been recognised.
Tax losses
£000
Share based
payments
£000
Total
£000
At 1 October 2020
384
34
418
Credited to profit or loss
37
–
37
At 30 September 2021
421
34
455
Adjustment for prior period error (note 1)
(421)
138
(283)
At 30 September 2021 (restated)
–
172
172
Credited/(charged) to profit or loss
30
(151)
(121)
At 30 September 2022
30
21
51
Strategic report
Governance
Financial statements
207
Annual Report and Accounts 2022
Hyve Group plc
8 Trade and other creditors
2022
£000
2021 (restated)
£000
Bank loan
6,000
11,751
Corporation tax
–
330
Amounts owed to Group undertakings
12,133
91,178
Accruals
1,114
90
Other creditors
3,635
266
16,882
103,615
Amounts due after one year
Bank loan
60,410
71,233
The amounts owed to Group undertakings are payable on demand and bear no interest.
Subsequent to the period end, in October 2022 the Company completed the refinancing of its
debt. The new debt facilities replace the Company’s previous debt facilities, and so the £66.4m
drawn debt as at 30 September 2022 was repaid in full on 20 October 2022 when the Group’s
new term loan of £115.0m was fully drawn on the same date. The voluntary repayment of the
drawn debt is a non-adjusting event in accordance with IAS 10. £6.0m of the drawn debt is
classified as a current liability under the repayment terms of the previous debt facility. Refer to
note 20 to the Group accounts.
9 Called up share capital and reserves
2022
£000
2021
£000
Allotted and fully paid
291,640,907 ordinary shares of 10p each (2021: 265,128,107 of 10p each)
29,164
26,513
2022
Number of
shares
2021
Number of
shares
At 1 October
265,128,107
265,128,107
Share placement
13,818,698
–
Share subscription
12,694,102
–
At 30 September
291,640,907
265,128,107
On 18 November 2021, the Group announced it had placed 13,818,698 new ordinary shares at
a price of £1.07 raising gross proceeds of £14.8m to part-fund the acquisition of 121 Group (see
note 8). Alongside this, a subscription of 12,694,102 new ordinary shares at a price of £1.1235
per new ordinary share was completed by investment funds managed by Strategic Value
Partners, LLC. Total net proceeds were £28.1m after expenses of £1.0m, which were deducted
from share premium.
The Company has one class of ordinary shares which carry no right to fixed income. At the
Extraordinary General Meeting held on 17 November 1998, shareholders approved the
establishment of the Hyve Group Employee Share Ownership Trust (ESOT’). The terms of the
ESOT allow the trustees to transfer shares to employees who exercise options under the
Company’s share option schemes, to grant options to employees and to accumulate shares by
buying in the market or subscribing for shares at market value. The ESOT is capable of holding
a maximum of 5% of the Company’s issued ordinary share capital. The ESOT reserve arises in
connection with the ESOT. The amount of the reserve represents the deduction in arriving at
shareholders’ funds for the consideration paid for the Company’s shares purchased by the
ESOT which had not vested unconditionally at the end of each financial year.
The ESOT held 671,757 shares in Hyve Group plc at 30 September 2022 (2021: 771,375 shares).
During the year, there were 992,000 nominal share options under the Employees’ Performance
Share Plan granted against ESOT-held shares (2021: 2,180,893). The market value of the ordinary
shares held by the ESOT at 30 September 2022 was £0.3m (2021: £0.9m).
The Company has agreed to make available to the ESOT an interest-free loan of up to £12.5m
for the purpose of buying shares. At 30 September 2022, the amount of the loan drawn down
was £12.0m. The Company income statement and statement of financial position include the
results of the ESOT for the year ended 30 September 2022. The trustees have waived their
current and future rights to all dividend entitlement on the shares held by the ESOT. 99,618
options were exercised from the ESOT during the year (2021: 48,281). The total consideration
for the options exercised from the ESOT was £nil (2021: £nil). 2,637,178 outstanding options
are to be settled by the ESOT, so all shares held by the ESOT are under option as at
30 September 2022. Details of the options in issue and their exercise dates can be seen
at note 28 to the consolidated accounts.
10 Post-balance sheet events
On 20 October 2022, the Group completed the refinancing of its debt facilities. The new debt
facilities totalling £135m comprise a £115m term loan and a £20m super senior revolving credit
facility. The new debt facilities replace the Company’s previous debt facilities, and the £66.4m
drawn down as at 30 September 2022 was repaid in full on 20 October 2022 when the new
funds were drawn.
Notes to the Company accounts
continued
208
Hyve Group plc
Annual Report and Accounts 2022
Alternative performance measures (‘APMs’)
In accordance with the Guidelines on APMs issued by the European Securities and Markets Authority (ESMA), additional information is provided on the APMs used by the Group below.
In the reporting of financial information, the Group uses certain measures that are not required under IFRS. These additional measures provide additional information on the performance of the
business and trends to stakeholders. These measures are consistent with those used internally and are considered important to understanding the financial performance and position of the Group.
APMs are considered to be an important measure to monitor how the Group is performing because this provides a meaningful comparison of how the business is managed and measured on a
day-to-day basis and achieves consistency and comparability between reporting periods.
These APMs may not be directly comparable with similarly titled profit measures reported by other companies and they are not intended to be a substitute for, or superior to, IFRS measures.
APM
Closest equivalent
statutory measure
Reconciling items to
statutory measure
Definition and purpose
Headline profit/(loss)
before tax
Profit/(loss) before tax
Adjusting items as
disclosed in note 5
Headline profit before tax is profit/(loss) before tax and adjusting items, as presented in note 5. In addition to providing
a more comparable set of results year-on-year, this is also in line with similar adjusted measures used by our peer
companies and therefore facilitates comparison across the industry.
Refer to the Chief Finance and Operations Officer’s statement for a reconciliation to the statutory measure, and
explanations of the amounts adjusted for.
Headline profit for
the year
Profit/(loss)
Adjusting items as
disclosed in note 5
Headline profit for the year is profit/(loss) and adjusting items, as presented in note 5.
Headline operating
profit/(loss)
Operating profit/(loss)
Operating adjusting
items as disclosed
in note 5
Headline operating profit is operating profit before operating adjusting items, as presented in note 5.
2022
£000
2021
(restated)
£000
Operating loss
(11,369)
(25,751)
Operating adjusting items (note 5)
30,765
47,746
Headline operating profit
19,396
21,995
Headline operating
profit margin
Operating
profit margin
Operating adjusting
items as disclosed
in note 5
Headline operating profit margin is headline operating profit as a percentage of revenue.
Headline EBITDA
Operating profit
Operating adjusting
items as disclosed in
note 5, depreciation
of property, plant
and equipment
and amortisation of
computer software
Headline EBITDA is headline operating profit before operating adjusting items, depreciation of property, plant and
equipment and amortisation of computer software.
2022
£000
2021
(restated)
£000
Operating loss
(11,369)
(25,751)
Operating adjusting items (note 5)
30,765
47,746
Depreciation of property, plant and equipment (note 15)
3,437
4,777
Amortisation of computer software (note 14)
855
1,262
Headline EBITDA
23,688
28,034
Glossary
Strategic report
Governance
Financial statements
209
Annual Report and Accounts 2022
Hyve Group plc
APM
Closest equivalent
statutory measure
Reconciling items to
statutory measure
Definition and purpose
Net debt
Cash and cash
equivalents less
bank loans and
lease liabilities
Reconciliation
of net debt
(note 30)
Net debt is defined as cash and cash equivalents after deducting bank loans and lease liabilities.
Adjusted net debt
Cash and cash
equivalents less
bank loans
Reconciliation of
net debt (note 30)
Adjusted net debt is defined as cash and cash equivalents after deducting bank loans.
The Board considers adjusted net debt to be a reliable measure of the Group’s net indebtedness that provides an
indicator of the overall balance sheet strength. It is also a single measure that can be used to assess the combined
impact of the Group’s cash position and its indebtedness and can be compared consistently against prior periods.
Adjusted net debt:
headline EBITDA
None
N/A
Adjusted net debt: headline EBITDA is the ratio of adjusted net debt to headline EBITDA.
Cash conversion
None
N/A
Cash conversion is defined as headline cash generated from operations as a percentage of headline operating profit
before non-cash items. Headline cash generated from operations is cash generated from operations before net venue
utilisation, the cash impact of adjusting items included in the definition of headline profit before tax after adjusting for
any wrong pocket true-ups through working capital adjustments on acquisitions or disposals. Headline operating profit
before non-cash items is headline operating profit before foreign exchange gains/losses, depreciation and amortisation.
2022
£000
2021
£000
Cash generated from operations
31,898
30,416
Less cash generated from discontinued operations
(8,696)
(1,506)
Net venue utilisation
–
(72)
Adjusting items:
Transaction costs on completed and pending acquisitions and disposals
3,276
1,218
Adjusted cash flow from operations
26,478
30,056
Headline operating profit
19,396
21,995
Depreciation of property, plant and equipment (note 4)
3,437
4,777
Amortisation of computer software (note 14)
855
1,262
Foreign exchange (gain)/loss on operating activities
(2,707)
306
Headline operating profit on a cash basis
20,981
28,340
Cash conversion
126%
111%
Glossary
continued
210
Hyve Group plc
Annual Report and Accounts 2022
APM
Closest equivalent
statutory measure
Reconciling items to
statutory measure
Definition and purpose
Headline basic
earnings per share
Basic earnings
per share
Adjusting items in the
earnings per share
note (note 11)
Profit after tax attributable to owners of the Company and before the impact of adjusting items, divided by the weighted
average number of ordinary shares in issue during the financial year.
Headline diluted
earnings per share
Diluted earnings
per share
Adjusting items in the
earnings per share
note (note 11)
Profit after tax attributable to owners of the Company and before the impact of adjusting items, divided by the weighted
average number of ordinary shares in issue during the financial year adjusted for the effects of any potentially dilutive
options unless anti-dilutive.
Headline effective
tax rate
Effective tax rate
Adjusting items and
the tax impact of
adjusting items
(note 5 and note 9)
The income tax charge for the Group excluding the tax impact of adjusting items, divided by headline profit before tax.
This measure is a useful indicator of the ongoing tax rate for the Group.
2022
£000
2021
£000
Tax credit per income statement
5,615
4,636
Tax on share of results of associates and joint ventures
225
(455)
Tax impact of adjusting items
(5,745)
(6,020)
Headline tax credit/(charge)
95
(1,839)
Headline profit/(loss) before tax
11,473
13,917
Headline effective tax rate
(1%)
13%
Free cash flow from
the business
None
N/A
Free cash flow from the business represents cash generated from operations (after movements in working capital), tax
paid, capital expenditure, lease payments and net interest costs. Free cash flow is therefore before equity or acquisition
and disposal related cash flows.
Free cash flow from the business
2022
£000
2021
£000
Cash generated from operations
31,898
30,416
Capital expenditure and lease payments
(4,408)
(4,990)
Interest received
269
163
Interest paid
(6,676)
(6,556)
Tax paid
(2,654)
(3,266)
Free cash flow from the business
18,429
15,767
Strategic report
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Financial statements
211
Annual Report and Accounts 2022
Hyve Group plc
APM
Closest equivalent
statutory measure
Reconciling items to
statutory measure
Definition and purpose
Like-for-like
None
N/A
Like-for-like (or underlying) results are stated on a constant currency basis, after excluding events which took place in the
current period, but did not take place under our ownership in the comparative period and after excluding events which
took place in the comparative period, but did not take place under our ownership in the current period. This excludes:
Biennial events;
Timing differences (i.e. events that ran in only one of the current or comparative periods, due to changes in the
event dates);
Launches;
Cancelled or disposed of events that did not take place under our ownership in the current year;
Acquired events in the current period; and
Acquired events in the comparative period that did not take place under our ownership in the comparative period
(i.e. they took place pre-acquisition).
Refer to the Chief Finance and Operations Officer’s statement for a reconciliation to the closest statutory measures.
Forward bookings
None
N/A
Forward bookings are contracted revenues for the following financial year. Unless otherwise stated, these are as at the
date of announcement (i.e. late November/early December each year).
Revenue per event
None
N/A
Revenue per event is calculated based on the total revenue divided by the number of events in the portfolio at the
period end. The 2021 metric includes discontinued revenues and events that are now presented as discontinued.
Customer like-for-like
None
N/A
Customer like-for-like results are the change in average spend per customer across customers who are booked to
attend the current edition of an event who also attended the previous edition of the event. They are stated on a constant
currency basis.
All note references refer to the notes to the Group consolidated accounts.
Glossary
continued
212
Hyve Group plc
Annual Report and Accounts 2022
Financial calendar
Pre-close announcement
5 October 2022
Preliminary results announcement
13 December 2022
Annual General Meeting
1 February 2023
Q1 trading update
1 February 2023
Q2 trading update
5 April 2023
Interim results announcement
16 May 2023
Q3 trading update
11 July 2023
Shareholder profile at 30 September 2022
Range of holdings
Number of
shareholders
Percentage
of total
shareholders (%)
Ordinary
shares
(million)
Percentage
of issued
share capital (%)
1–100
340
36.72
10,375
0.00
101–1,000
273
29.48
89,940
0.03
1,001–10,000
116
12.53
434,684
0.15
10,001–1,000,000
152
16.41
30,988,185
10.63
1,000,001–999,999,999
45
4.86
260,117,723
89.19
Totals
926
100.00
291,640,907
100.00
Category
Number of
shareholders
Percentage
of total
shareholders (%)
Ordinary
shares
(million)
Percentage
of issued
share capital
(%)
Private individuals
648
69.98
442,266
0.15
Nominee companies
201
21.71
172,423,256
59.12
Limited and public limited companies
33
3.56
26,468,731
9.08
Other organisations and banks
44
4.75
92,306,654
31.65
Totals
926
100.00
291,640,907
100.00
Share price
London Stock Exchange, pence per 10p share
Highest
117.7p
Lowest
46.8p
Dividend calendar
Dividends suspended in respect of financial year ended 30 September 2022; future dividends will
be kept under review.
Share dealing services
The Company’s Registrar, Equiniti Limited, offers a telephone and internet dealing service,
Shareview, which provides a simple and convenient way of buying and selling shares. For
telephone dealings, please call 0345 603 7037 between 08:00am and 04:30pm, Monday to
Friday, and for internet dealings please log on to
shareview.co.uk/dealing
.
Electronic communications
Shareholders can elect to receive shareholder documents electronically by registering with
Shareview at
shareview.co.uk
. This will save on printing and distribution costs, creating
environmental benefits. When you register, you will be sent an email notification to say when
shareholder documents are available on our website and you will be provided with a link to that
information. When registering, you will need your shareholder reference number, which can be
found on your share certificate or proxy form. Please contact Equiniti Limited if you require any
assistance or further information.
Shareholder information
Strategic report
Governance
Financial statements
213
Annual Report and Accounts 2022
Hyve Group plc
Directors
Richard Last
Non-Executive Chairman
Rachel Addison
Non-Executive Director (appointed 1 March 2022)
Nicholas Backhouse
Non-Executive Senior Independent Director
John Gulliver
Chief Finance and Operations Officer
Mark Shashoua
Chief Executive Officer
Anna Bateson
Non-Executive Director (appointed 1 March 2022; resigned
16 September 2022)
Sharon Baylay
Non-Executive Director (resigned 1 March 2022)
Stephen Puckett
Non-Executive Senior Independent Director (resigned 3 February
2022)
Company Secretary
Jared Cranney
(resigned 15 November 2022)
Alice Rivers
(appointed 15 November 2022)
Registered Office
Hyve Group plc
London
Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Solicitors
Macfarlanes LLP
20 Cursitor Street
London
EC4A 1LT
Principal bankers
HPS Investment Partners LLC
40 West 57th Street, 33rd Floor
New York
NY 10019
USA
HSBC Bank plc
60 Queen Victoria Street
London
EC4N 4TR
Company brokers
Numis Securities Ltd
45 Gresham Street
London
EC2V 7BF
Registrars
Equiniti Ltd
Highdown House
Yeoman Way
Worthing
West Sussex
BN99 3HH
Public Relations
Camarco
3rd Floor
Cannongate House
62-64 Cannon Street
London
EC4N 6AE
Website
hyve.group
Directors, advisers and other information
214
Hyve Group plc
Annual Report and Accounts 2022
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Hyve Group plc
2 Kingdom Street, London
W2 6JG, UK
hyve.group